Par Pacific (PARR) Q3 2026 Earnings Call Transcript

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DATE

Wed, Nov. 4, 2026

CALL PARTICIPANTS

• Vice President of Investor Relations – Ashimi Patel Vitter
• President and Chief Executive Officer – William Monteleone
• Senior Adviser – Richard Creamer
• Executive Vice President of Refining and Logistics – Jerry Stumbo
• Executive Vice President and Chief Financial Officer – Shawn Flores

TAKEAWAYS

• Adjusted Net Income — $531.5 million or $10.70 per diluted share, reflecting strong operating performance and a significant small refinery exemption benefit.
• Adjusted EBITDA — $646 million, including a $222 million gain related to the 2025 small refinery exemptions.
• Total Refining Throughput — 174,200 barrels per day, representing a decrease from 197,700 barrels per day in the same period last year due to plant-wide maintenance in Hawaii.
• Hawaii Refining Throughput — 56,600 barrels per day, impacted by scheduled turnaround activities and extended discovery work during the outage.
• Montana Refining Throughput — 58,400 barrels per day, establishing a record for the facility following reliability investments that increased throughput from approximately 50,000 barrels per day prior to ownership.
• Combined Market Index — $38.45 per barrel, nearly a threefold increase compared to the 2025 average of $12.40 per barrel.
• Hawaii Renewables Adjusted EBITDA — $5.1 million, marking the first profitable quarter for the segment since its commercial launch.
• Hawaii Renewables Production — 3,700 barrels per day in September, reaching an inflection point after ramping up from July turnaround activities.
• Retail Same-Store Fuel Volumes — 2.1% growth, reflecting continued momentum across the company’s retail network.
• Retail Food Sales — 11% growth, driven by an enhanced food offering that now represents more than 10% of total in-store sales.
• Laramie Energy Divestment Proceeds — $120 million in near-term cash, expected from the sale of substantially all of Laramie Energy’s oil and gas assets.
• Total Liquidity — $2.4 billion as of Sept. 30, 2026, comprising a cash balance of $731 million and zero borrowings on the ABL credit facility.
• Q4 System-Wide Throughput Guidance — 200,000 barrels per day at the midpoint, supported by strong fourth-quarter demand expectations.
• Hawaii Crude Differential Guidance — $9 per barrel to $11 per barrel for the fourth quarter, reflecting purchases made during the third quarter.
• Share Repurchases — $10 million in common stock repurchased during the quarter, as part of an opportunistic capital allocation framework.
• Hawaii Refining Production Costs — $8.45 per barrel, an increase from $4.66 per barrel due to reduced throughput during the turnaround period.
• Logistics Adjusted EBITDA — $30.7 million, down from $37.3 million due to lower asset utilization related to the Hawaii maintenance cycle.
• Federal Net Operating Loss Utilization — $160 million in cash tax benefits anticipated for 2026 as the company expects to fully utilize its remaining $775 million in NOL carryforwards.
• Montana Production Costs — $9.29 per barrel when excluding coker maintenance, reflecting a decrease from historical levels exceeding $12 per barrel.
• Washington Adjusted Gross Margin — $35.95 per barrel, supported by a $32.2 million small refinery exemption benefit.
• Wyoming FIFO Benefit — $8.8 million, or $5.11 per barrel, contributing to an adjusted gross margin of $64.98 per barrel in the Wyoming segment.
• Hawaii Crude Intermediation Facility Termination — $150 million in cash to be utilized for inventory repurchases, which management expects will reduce annual working capital funding costs by $14 million.

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RISKS

• CFO Flores warned that after the full utilization of the remaining federal net operating losses this year, the company anticipates “becoming a regular federal cash taxpayer going forward,” which will increase future cash obligations.

SUMMARY

Par Pacific Holdings, Inc. (PARR -5.65%) management reported reaching a milestone net cash position while transitioning its Hawaii refining facility back to full operations following a plant-wide turnaround. The company recorded its first profitable quarter for the Hawaii Renewables business and reached an agreement to divest its equity interest in Laramie Energy to further optimize the balance sheet. Management indicated that the current market environment is supported by constrained global refined product exports and resilient demand, which facilitated the full repayment of outstanding credit facility borrowings. The company is shifting its strategic focus toward low capital, high-return organic growth projects on the mainland to improve yield and crude flexibility.

• Leadership Transition: Richard Creamer is moving to a senior adviser role ahead of his retirement, with Jerry Stumbo joining as Executive Vice President of Refining and Logistics.
• Renewables Feedstock Expansion: The Hawaii Renewables business expanded its processing capabilities to include canola, yellow grease, and tallow feedstocks.
• Infrastructure Maintenance: Management successfully completed a changeout of the Hawaii single point mooring system and positioned the refinery for a five-year operating run.
• Montana Optimization Projects: Management is initiating low-cost debottlenecking projects in Montana, costing less than $10 million each, to expand diesel and jet fuel production by up to 1,000 barrels per day.
• M&A Strategy: CEO Monteleone stated that the company remains focused on potential synergies in the Western United States, though high-margin environments often present challenges for reaching buyer-seller agreements.
• Market Dynamics: Management noted that delivered Alaska North Slope (ANS) differentials to the West Coast widened by $10 per barrel to $15 per barrel over the last three months, acting as a proxy for crude competition in Hawaii.

INDUSTRY GLOSSARY

• SRE (Small Refinery Exemption): A waiver granted by the EPA to small refineries that demonstrates the Renewable Fuel Standard requirements cause a disproportionate economic hardship.
• RIN (Renewable Identification Number): Credits used for compliance with the Renewable Fuel Standard, representing a volume of renewable fuel blended into transportation fuel.
• Throughput: The total amount of raw material processed by a refinery over a specific period.
• Adjusted EBITDA: A non-GAAP measure of earnings before interest, taxes, depreciation, and amortization, adjusted for non-recurring or non-cash items.
• FIFO (First-In, First-Out): An inventory valuation method where the first items placed in inventory are the first ones sold.
• NOL (Net Operating Loss): A period in which a company’s allowable tax deductions are greater than its taxable income, creating a tax credit that can be used to offset future profits.
• ABL (Asset-Based Lending)

  Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.