PARR - Earnings call 4 2023 | Par Pacific Holdings, Inc.

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Operator

Good day, and welcome to the Par Pacific's Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Ashimi Patel, Director of Investor Relations. Please go ahead.

Ashimi Patel

Thank you, Betsy. Fourth Conference Pacific's Par to Quarter Call. Earnings Welcome

Counsel. Pate, Officer; and Will me and Financial today President; Executive William are General SVP Hollis, SVP Joining Monteleone, Chief Shawn and Jeff Officer; Chief Flores,

forward-looking turn reliance forward-looking materially obligation Before to we begin, on of investors Chief and our investor forward-looking uncertainties, that them. you disclaim additional statements. Accordingly, the forward-looking William to the our future change presentation Officer, statements, actual from performance are and to may not Executive They and now statements. non-GAAP are risks filings our place our to may I subject subject call we any for not comments over statements to and revise update are and undue Any today SEC note these or to include website Pate. with differ guarantees or results should events. on our reconciliations refer information. I'll and

William Pate

good like achievements. you, morning, XXXX Thank everyone. Pacific's a and to moment reflect Par I'd Ashimi, on to take

$XXX thrived last year, million results. XXXX $XXX achieved XXXX's reached income This Billings increase in despite nearly year-end the underscored company adjusted liquidity even acquisition decline growth $XXX XX% reached financial position in X% financial a record-breaking earnings million, net a EBITDA $X.XX last market and adjusted was We results. over per million achieving share, our Our by indices completing year. after of is June. success our strong which we

at common price. capital we year an over below of intermediation finally, our cost last repurchased cost share We one current well also of facilities. million lowered with the average of of refinancing our our $XX And stock

from X share in last operations. $XX per the years, generated Over we've cash

configurations, operations free and we relatively Given from flow. the heightening capital turnaround conversion our cash to of cash maintenance requirements, low refineries have

bolster Other Consequently, growth cover Logistics more than segments our and capital even operations characteristics. more Shawn for improvements. available Our structure detail. cash better opportunities acquisition, flow and the much these cash conversion of Retail and gone reduce is have of in free liquidity the debt. to from changes Billings flow business cash has will

financial starts reliability. and compliance In with safety, excellence our industry, environmental

on Our an our metrics refining XX% and in with of process key improving focusing and team safety objectives personal by excellent these job did approximately logistics XXXX.

remain also in renewable sustainability committed Hawaii Tacoma to We initiatives. and our energy, and particularly

the Our lay groundwork for projects. learnings on in coprocessing larger Tacoma

be capital continue in begin conversion will on SAF to world. focus capital, cost opportunities our plan this project. to return like XXXX projects We production lower $XX in SAF lowest million among We the which will the from higher unit, Hawaii

In addition to renewables actively processing, feedstocks. working in on solutions pretreating and we're also advantaged sourcing

our ENERGY efficiency, X energy certified refineries illustrating in and our by our commitment emissions operations. Finally, STAR were organizational low of to gas EPA, greenhouse the X

behind the of remain local high constructive couple favor of With are outlook. like as us. Cracks remain robust optimistic market 'XX and producers months freight generally about the first Singapore we us, Asian inventories costs

strength an Mainland reliability, ability ensuring focus rapidly the turnaround Given declining on of activity approach will markets on summer demonstrated our as capitalize in year, season. Last to results and market This reasonable of driving inventories, we supplied. market year, we face to the spring we expect the improving level that improve we well market. U.S. keeping increase financial our we and a

also in will in presence our string markets and our to on built a contiguous was of markets. acquisitions, grow continue opportunities to company footprint seek successful Our so we existing increase

of of you step have and to my Most for Before the avoid congratulate Chief Par establish and decision emerging took Officer and the together market a enterprise, development I to many Will for differentiated risks. importantly, of objectives and this at Will to and that want my most know Spring's down to primary job, XX growing years Pacific. When speak organization years, pursue CEO. a promotion on and pass about floor were President nearly I an we opportunities rapidly this on of to I and I the successful worked Annual could role those as Executive Will, strategy Meeting that collaborated ensure his we've that

and company my always leaving CEO, business his this leadership. While local can as and director confident expertly while and retain team that preserving I status shareholder market Will our manage grow

is yours. the floor Will,

William Monteleone

Bill. you, Thank

congratulate Logistics operational a year Before in strong care diving this of for and and into improvements Post take process to alertness throughput, I day per significant improvements. XXXX the these averaged Billings personal unwavering team XX.X% XXX,XXX and Refining thank details, availability. units. entire to operational to a discipline, the barrels safety the year. for business operational deliver want moment was and takes we acquisition, resulting It

world energy competitive In Improving also operation our Washington intensities the achieved an reducing ENERGY a example and based benchmarking to industry structure EPA emissions. Washington and delivers of and investment efficiency, addition also recognizing of while awards excellence efficiency the overall how Wyoming consistency STAR cost the studies. lowest upon emissions energy carbon thoughtful is in managerial one

Fourth winter October quarter conditions throughput strong. seasonality. was mid-November XXX,XXX market were barrels per through day, reflecting

Index to fourth second $X.XX the per half our barrels per landed Singapore barrel. per production the guidance. quarter barrel and averaged costs throughput differential markets. in deeper However, than $X.XX inland our and $XX.XX elevated the seasonal In of typical a day was saw quarter per quarterly barrel, slightly crude decline The were Hawaii, XX,XXX was

Washington, an price asphalt the per and quarter feedstock differentials averaged capture Hawaii throughput crude lag throughput constraints. to were The quarter barrel. offset targets and production approximately day We per $X was expanding the to our improved per to heater barrel. expect $XX.XX to costs below PNW by system quarter. per barrel Capture $X.XX reflecting XX%, benefits. In was partially $XX.XX and during Overall versus realizations. advantage XX,XXX WTI, Index reflecting VGO due our combined declining index quarter Fourth barrels between fourth average first was XXX%, favorable

quarter. an We outage the address are planning issues first these with to during approximate XX-day

approximately Capture an Wyoming line which Coast and near-term capture energy costs projects production impact day unfavorable barrel, index by $X Great team. to per the the was to million. In record We barrels and U.S. million and Fourth profitability XXXX, XXX% $X.XX of quarterly day throughput was quarter expect $X and impact our throughput team $XX.XX due FIFO was to $X The barrels the per XX%, despite per barrel Wyoming elevated with seasonal expectations. Gulf reliability costs $XX.XX XX,XXX throughput million. Montana production Coast an costs. Gulf was barrels to seasonally job winter per set to barrel. in per index were a XX,XXX annual was XX,XXX elevated totaled was of outage day.

crude the prompt widened. Canadian differentials During quarter,

However, of and of FIFO inventory realization a slower these benefits. combination turns the accounting belay

day, barrels per XX,XXX between first the expect For XX,XXX to day. quarter, XX,XXX, Washington run Montana between between and XX,XXX and XX,XXX between Hawaii XX,XXX and XX,XXX barrels and we and per XX,XXX Wyoming

a same-store The by and respectively. growth was annual and and for Adjusted XXXX. continued sales growth trend million, Retail EBITDA of same-store record delivered with impressive Fourth X.X% fuel sales segment X.X% X.X%, $XX respectively. of result fuel merchandise X.X%, the quarter driven merchandise sales and

results of Spokane locations operation. X are opened and encouraging delivering new-to-industry that we their months in Hawaii in first addition, In

progressing well. renewables the project SAF Hawaii On front, is our

time started have ordering lead ground and feedstock We broken project. filed X on for permits the equipment long renewable banks,

the of we turnarounds, our XXXX, Hawaii reliable crisp forward project. are in capital delivering to As operations safe SAF look we on execution and focused

and the focused experience and in-store retail remodel on Our an delighting rebuild remain the active brands customer improving program. via

turn our to now review it I'll to over Shawn results. financial

Shawn Flores

the year or share. $XX $XXX you, in Full Fourth $XXX $XX share. EBITDA million product results or million The EBITDA net $XXX the million, $XXX $X and Fourth price and of quarter and lag per a Thank million $X.XX $X.XX in in of Will. adjusted fourth loss Hawaii adjusted and of negative Refining impact included quarter adjusted adjusted offset and reported in third per compared benefit million million million earnings to $XXX $X segment were our of were a crack earnings EBITDA million. Hawaii adjusted million by hedge Wyoming quarter FIFO quarter. in

at $XX by million quarter. of driven reported over costs in maintenance quarter We in with softer in $XX $XX elevated the crack third were fourth have and XX% fourth to million segment quarter in Montana Brent. Logistics The tank million of adjusted our framework continued compared approximately pipeline first sales hedging $X EBITDA our results hedged the and quarter Hawaii of Washington.

million Our in the quarter, primary working year-end component availability. expenditures. million, from totaled credits. Cash quarter with net environmental adjusted fourth Retail quarter period and the Cash the results. of quarter during consistent million Total million $XXX million. $XXX primarily settlement activities was outflow with EBITDA fourth net at $XX associated provided of by $XX the $XXX of investing up during made of $XXX segment prior excluding was capital of reported working million third fourth The capital driven by capital cash totaled outflow a during the $XXX liquidity in cash operations million, outflows

As Bill flow the has over mentioned, X in demonstrated operations. company exceptional performance cash our years, from past billion $X generating over

million, legacy During million and an less this retired more our than at $XX for of RIN per of liquidity $XX completed highly than $XXX strategically Billings stock improved period, accretive million, acquisition successfully share repurchased fully by obligations. we average $XXX the common price

the consolidating ABL we facility a also simultaneous into We termination our intermediation $XXX to working million. of further term refinancing of October, and completed our Tacoma multiple the comprehensive optimized loan. year, tranches for In financing last a debt upsides single high-cost of capital

We objectives remarks. to our promising liquidity attractive repurchasing well concludes cash it XXXX, expect positioned million remain to and our nearly streamlined turn strategic year. to prices. This and we you $XXX reduce committed $XX we'll this With funding costs growth outlook into for stock to million than opportunistically more structure capital prepared Operator, our Q&A. our by at achieve stand a

Operator

question from Pickering, first The Holt. Blair Instructions] Matthew [Operator comes with today Tudor,

Matthew Blair

could Will, the would a as business be which picking Par interested as a that flow just also of you on environment moves. up the respective rate opportunities And by about Is with still question congrats lower both attractive year? and later by your be kind you talk what of interest about I geography? M&A deal had line to indicated well in. prospects this Bill market,

William Monteleone

Thanks the Sure, for question, your Matthew. It's I and appreciate comments. Will.

So in key has grown. a part general, we've strategy M&A been our think I of as

a challenging I side the that strength think conditions it's think I we've I Now market, environment are Again, that's and to be seller refining I And on major done. think to given get months, definitely the going XX expectations on seen a the last over try a the that deal high. of factor. think market said,

So really I the backdrop. think that's

previously. think I we've it's when about had that you really the geography, focus think

think and locations. niche renewable because it of serving the Western on liquid strategy focused with really fuels we're communities States in our are fits I United conventional largely that

Retail. that's think true and be focus, to be I across to our so both going And going and Refining that's and Logistics

Matthew Blair

that it's mentioned there? you then into this rising And is because through moving environment, the good. Par. walk Could freight Asia? for supply imported you coming source that the Sounds marginal just an barrel rate from helpful parts Hawaii of Is

William Pate

Matt, of streams, of the I weak have Bill. cracks. the That's generally, been of in factors. this economic think of think pretty a higher to is I supportive one one reasons I despite the the and have news, freight inventories Asia, one export lot of refineries, in spot mean And costs. is factor reasons stronger they're

refineries focus you're even when there's production we're top the restrictions restrictions of product and in our Canal, And are the refineries fortunate to to in when movement sitting that around. Panama some And down. environment right just you move on more harder things markets. of the with movement where So the it's and Sea on -- local less have slowed also to tend Red

William Monteleone

just Hawaii, I'd in, and is the that freight MR on only Matt, Asia. And general, distillate the both marginal West particularly in to you from pool, is thing moving about the Northeast Coast think for when barrel the typically add

major and a So particularly for marginal barrel. factor the about you I diesel when think think jet, that's

Operator

question next JPMorgan. comes John The with from Royall

John Royall

to Bill Congratulations Will. and

that? the goal year? on So the is consistently enable doing be this you'll speak impact get And Can doing? raising work I per my the kbd the reliability first level. work there throughputs? around to question that is that you with on turnaround Billings. really up know just a about does numerator is barrel be of How it is to XX you'll work plus Or this OpEx

William Monteleone

is Sure, John. This Will.

So focused Billings. summer and we're on really reliability

significant strong as third opportunity from really first cash when and in And quarter generate you've think saw that's a contribution that's got you year I the last market environment, the flows. to foremost.

corrosion that the to our year ensure probably crude reliability So really I to focus is getting to think alloy additional and on unit the positioned on this adding some reduce we're risks. well a ultimately, position turnaround better there,

then And per think when to towards push number, number. $XX Again, OpEx targeting we think that's -- achievable. XX more the ultimately, kbd remain our you barrel think impacts, again, as I I the going that about be that's objectives

focus this all the really that's turnaround year's again, of reliability. summer So it's activities, and about

John Royall

Great. completed perspective, also Billings. is buyback. the And be question but my pace But -- you year you 'XX second in Really bit after and will delever. second you a a little half different maintenance on from don't the then also a strong have of to don't CapEx this

some So How in had rate going to rate about of you moving think pieces relative turnarounds? directions. strong kind no where and run we cracks both run should that forward XH the

William Pate

John, Shawn. this is

suspect strong. our got I and be the million our fund demonstrated buyback in requirements in we've $XX cash we'll think million liquidity We've of I is cadence of within think sort capital Look, capital to quarters excess in I recent today. QX. QX able $XX our flow.

ample sheet of see, And cadence our buyback Obviously, to we're see to when balance our be program. aggressive to and pull weaker the buybacks. more you got continue market, as we get we've going the on in on you want back capacity share if So a price opportunistic.

there our not approach has So changed.

Operator

from with comes Sachs. Neil Goldman question next The Mehta

Nicolette Slusser

on all on And Slusser the you Neil years. Nicolette congratulations role. thank Bill, contributions the for and leadership over is Mehta. for This new your Will, the

opportunistic we about product roughly the mindful business see distillate-oriented potential is think question and yield Longer for Our is XX%. term you XX% as do optimal versus think business? the peers first mix, I the distillate of a level when more bit the Par at M&A, for

William Monteleone

Sure.

and -- of the think continue you on the focus barrel. we're I try going distillate to to side

I need. to think pull communities average barrel weighted long going term, we over And crack the be portion of that is going ultimately, that's what to serve the time. I ultimately, a the that's think frankly

trying you'll increase continue be on I our flexibility distillate to production like production so on even in think places see distillate And focus to and Billings.

Nicolette Slusser

follow-up the the the just FID to then those That's SAF and you the the is this just balancing pursuing. of you're and company Okay. on near-term stand we some term hydrogen Can renewable-oriented with well? where regards us And great. is facilities longer-term expected longer opportunities projects remind the how on year Washington in as

William Monteleone

Sure.

project. we're attractive West there's think means continue available Coast the think backdrop to current business in favorable growing engineering that our simultaneously, think jurisdiction. returns, I capital location I would I be to certain about of a disciplined capital it segment. how said, on to and be So its think still trying that mindful pursue we'll And pursue on evaluate the front. we're That that continuing the of partners are given think Again, the allocation renewable and and we aspects on for to what I renewables that that framework

Operator

from Jason [Operator question comes Instructions] The Gabelman next Cowen. with

Jason Gabelman

moving to that RINs. beyond XQ amount hold? related you'll some what's typical you noted obligation pay kind of any in to with are you You down pay environmental the that would I'm down need annual RIN kind forward have outstanding liabilities results, assuming Do of which

Shawn Flores

we've RIN all ratably Jason, our closed legacy obligations, out here. we're just No, procuring current accruing it's obligation obviously the from of RINs and and Shawn.

Jason Gabelman

XXXX? it. us and mentioned Got to else you then you can your schedule? And then of turnaround Montana turnaround. the have you year look upcoming You anything this remind as Do

William Monteleone

the my think reference that's, So to looking turnaround for And Again, outage we've to There expect think that largely this something Again, reduced on some full inventory. profit again, planning Jason, complete see think, planned then really the XX-day in Washington. we're we 'XX year. throughput impact, the from to manage quarter. Billings cycle. major and small heard nothing discussed will try I I first we're 'XX you in think and else and expectations the is I you I

to And so our $XX and look X X year signaled million the again, per at really cycle we've typical if guidance, you is million the $XX to years.

between and 'XX I again, so that at completing full think cycle 'XX. And we're looking

Operator

would over I session. Will remarks. for Monteleone, President question-and-answer conference to our the turn closing concludes This any like to back

William Monteleone

to again success. Bill company's joining inspired grateful Great. many and recognize us for leadership, wisdom our for contributions I'd We're In closing, for his to Thank humility. today. you like his

our growth. shareholders is enterprise chapter this of strong to Thank a future. lead outlook talented a team the opportunity growing next day. to for and I'm your have to We our drive hungry our by excited management into you business the support, have and the nice

Operator

has conference now you today's The concluded. attending for Thank presentation.

You may disconnect. now

Par Pacific (PARR) 28 Feb 242023 Q4 Earnings call transcript