Core Viewpoint - The Zacks Oil and Gas - Refining & Marketing industry is evolving to balance reliable fossil fuel output with investments in cleaner, lower-carbon solutions, driven by government incentives and corporate demand, while U.S. refiners are increasing exports to capture margins and diversify revenue streams [1][3][4]. Industry Overview - The industry includes companies that sell refined petroleum products and non-energy materials, operating terminals, storage facilities, and transportation services. Refining margins are volatile and influenced by various factors including inventory levels, demand, and capacity utilization [2]. Trends Defining the Future - **Growing Role of Low-Carbon Solutions**: Refiners are investing in renewable diesel and sustainable aviation fuel, supported by government incentives and corporate demand, which positions them for long-term relevance in a decarbonizing economy [3]. - **Advantaged Export Opportunities**: U.S. refiners are leveraging strong international demand, particularly from Latin America and Europe, to export refined products, enhancing profitability and providing a hedge against domestic market fluctuations [4]. - **Margin Pressure from Volatile Prices**: The industry faces risks from fluctuating crude oil prices and inflationary cost pressures, which could impact earnings stability and shareholder returns [5]. Industry Outlook - The Zacks Oil and Gas - Refining & Marketing industry holds a Zacks Industry Rank of 56, placing it in the top 23% of 246 Zacks industries, indicating strong near-term prospects [6][7]. Performance Comparison - Over the past year, the industry has underperformed compared to the broader Zacks Oil - Energy Sector and the S&P 500, with a decline of 10.1% versus a decrease of 0.6% for the sector and a gain of 15.9% for the S&P 500 [9]. Current Valuation - The industry is currently trading at an EV/EBITDA ratio of 4.24X, significantly lower than the S&P 500's 17.60X and the sector's 4.92X, indicating a potential undervaluation [12]. Stocks in Focus - **Par Pacific Holdings**: Operates an integrated energy platform with a refining capacity of 219,000 barrels per day and a market cap of $1.5 billion, showing a projected earnings growth of 394.6% for 2025 [15][16]. - **Galp Energia**: A Portuguese company with a market cap of $13.1 billion, producing over 100,000 barrels of oil equivalent per day, and a four-quarter average earnings surprise of 47.2% [18][19]. - **Marathon Petroleum**: A leading independent refiner with a market cap of $50 billion, known for strong cash flow generation and shareholder returns, with a recent earnings estimate increase of 8.5% for 2025 [21][22]. - **Phillips 66**: One of the largest independent refiners with nearly 2 million barrels per day of refining capacity, expected EPS growth rate of 15.5% over three to five years [24][25].

Financial Performance - For the quarter ended June 2025, Par Petroleum reported revenue of $1.89 billion, down 6.2% year-over-year, with an EPS of $1.54 compared to $0.49 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.62 billion by +17.17%, and the EPS surprised by +108.11% against the consensus estimate of $0.74 [1] Key Metrics - Total refining feedstocks throughput was 186,600 million barrels, surpassing the average estimate of 183,299 million barrels [4] - Hawaii Refinery throughput was 88.1 million barrels, above the average estimate of 83.06 million barrels [4] - Montana Refinery throughput was 44.2 million barrels, slightly below the average estimate of 45.3 million barrels [4] - Wyoming Refinery throughput was 13.5 million barrels, compared to the average estimate of 14 million barrels [4] - Washington Refinery throughput was 40.8 million barrels, in line with the average estimate of 40.97 million barrels [4] - Retail sales volumes reached 30,848.00 Kgal, slightly above the average estimate of 30,765.31 Kgal [4] Revenue Breakdown - Revenues from refining were $1.83 billion, exceeding the average estimate of $1.55 billion [4] - Retail revenues were $146.69 million, compared to the average estimate of $142.65 million [4] - Logistics revenues were $73.01 million, surpassing the average estimate of $60.88 million [4] Adjusted EBITDA - Adjusted EBITDA for refining was $108.38 million, significantly above the average estimate of $64.86 million [4] - Adjusted EBITDA for logistics was $29.8 million, slightly above the average estimate of $28.89 million [4] - Adjusted EBITDA for retail was $23.35 million, exceeding the average estimate of $20.46 million [4] Stock Performance - Par Petroleum's shares have returned -21.7% over the past month, while the Zacks S&P 500 composite increased by +1.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Core Insights - The article emphasizes the importance of disciplined analysis and long-term thinking in identifying resilient and undervalued companies across various sectors, particularly in the Energy sector due to its strategic significance [1]. Group 1: Company Focus - The company is focused on the buy-side investment strategy, aiming to identify companies with strong fundamentals and long-term value [1]. - There is a particular interest in the Energy sector, highlighting its transitional importance in the current market landscape [1]. Group 2: Market Perspective - The article suggests that in a volatile market, it is crucial to prioritize downside protection while maintaining a long-term investment outlook [1].

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements and accompanying notes for the interim periods [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show the company's financial position at June 30, 2025, and December 31, 2024 **Financial Position Summary** | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total assets | $3,895,542 | $3,829,371 | | Total liabilities | $2,747,127 | $2,638,069 | | Total stockholders' equity | $1,148,415 | $1,191,302 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations summarize revenues, expenses, and net income for the interim periods **Operations Summary** | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenues | $1,893,438 | $2,017,468 | $3,638,474 | $3,998,303 | | Operating income | $96,760 | $48,641 | $80,984 | $58,156 | | Net income | $59,460 | $18,638 | $29,060 | $14,887 | | Basic income per share | $1.18 | $0.33 | $0.56 | $0.26 | | Diluted income per share | $1.17 | $0.32 | $0.55 | $0.25 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement details comprehensive income, including net income and other comprehensive income items **Comprehensive Income Summary** | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net income | $59,460 | $18,638 | $29,060 | $14,887 | | Other comprehensive loss, net of tax | $(77) | $(55) | $(153) | $(109) | | Comprehensive income | $59,383 | $18,583 | $28,907 | $14,778 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The statements of cash flows present cash generated from or used in operating, investing, and financing activities **Cash Flow Summary** | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | $132,179 | $20,755 | | Net cash used in investing activities | $(86,788) | $(57,987) | | Net cash used in financing activities | $(68,114) | $(62,213) | | Net decrease in cash, cash equivalents, and restricted cash | $(22,723) | $(99,445) | | Cash, cash equivalents, and restricted cash at end of period | $169,544 | $180,001 | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement outlines changes in each component of stockholders' equity for the reported periods **Stockholders' Equity Summary** | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Common Stock (shares) | 50,759 | 55,265 | | Common Stock (amount) | $507 | $552 | | Additional Paid-In Capital | $892,152 | $884,548 | | Accumulated Earnings | $245,553 | $295,846 | | Accumulated Other Comprehensive Income | $10,203 | $10,356 | | Total Stockholders' Equity | $1,148,415 | $1,191,302 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations and disclosures for the condensed consolidated financial statements [Note 1—Overview](index=9&type=section&id=Note%201%E2%80%94Overview) The company operates in Refining, Retail, and Logistics and reports a recent operational incident - Par Pacific Holdings, Inc. operates in three primary business segments: **Refining, Retail, and Logistics**, serving the western United States with renewable and conventional fuels[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) - The Wyoming refinery experienced an operational incident on February 12, 2025, and **resumed full crude operations in late April 2025**[21](index=21&type=chunk) [Note 2—Summary of Significant Accounting Policies](index=9&type=section&id=Note%202%E2%80%94Summary%20of%20Significant%20Accounting%20Policies) This note outlines the principles of consolidation, basis of presentation, and use of estimates - The company's condensed consolidated financial statements are prepared in accordance with **GAAP for interim financial information**, with all intercompany balances and transactions eliminated[23](index=23&type=chunk)[24](index=24&type=chunk) - ASU 2023-09, 'Improvements to Income Tax Disclosure,' effective for annual periods beginning after December 15, 2024, will require **expanded tax disclosures** in the full year financial statements for 2025[32](index=32&type=chunk) [Note 3—Refining and Logistics Equity Investments](index=10&type=section&id=Note%203%E2%80%94Refining%20and%20Logistics%20Equity%20Investments) The company details its equity method investments in YELP and YPLC, noting increased earnings **Change in Equity Investment in YELP (in thousands)** | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | | Beginning balance | $57,167 | $5 | | Equity earnings from YELP | $11,479 | $ | | Ending balance | $67,950 | $6 | **Change in Equity Investment in YPLC (in thousands)** | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | | Beginning balance | $29,144 | $2 | | Equity earnings from YPLC | $3,960 | $ | | Dividends received | $(5,840) | $( | | Ending balance | $27,340 | $2 | [Note 4—Investment in Laramie Energy](index=11&type=section&id=Note%204%E2%80%94Investment%20in%20Laramie%20Energy) The company holds a 46% equity investment in Laramie Energy, accounted for under the equity method - As of June 30, 2025, the company owned a **46.0% equity investment** in Laramie Energy, LLC, focused on natural gas development[38](index=38&type=chunk) - The equity in Laramie Energy's net assets exceeded the carrying value of the investment by approximately **$61.4 million** as of June 30, 2025, primarily due to prior impairments[40](index=40&type=chunk) **Change in Equity Investment in Laramie Energy (in thousands)** | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Beginning balance | $12,498 | $14,279 | | Equity earnings (losses) from Laramie Energy | $(646) | $(26) | | Accretion of basis difference | $3,228 | $3,229 | | Dividends received | — | $(1,485) | | Ending balance | $15,080 | $15,997 | [Note 5—Revenue Recognition](index=12&type=section&id=Note%205%E2%80%94Revenue%20Recognition) This note details disaggregated revenue by major product line and segment for the interim periods **Total Segment Revenues (in thousands)** | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Refining | $1,826,509 | $1,957,273 | $3,512,638 | $3,883,889 | | Logistics | $73,005 | $72,475 | $144,420 | $144,317 | | Retail | $146,685 | $152,842 | $283,117 | $292,976 | [Note 6—Inventories](index=13&type=section&id=Note%206%E2%80%94Inventories) The company's inventories consist of crude oil, refined products, and environmental credits - Inventories include **$171.2 million** (June 30, 2025) and **$195.0 million** (December 31, 2024) of RINs and environmental credits[50](index=50&type=chunk) - As of June 30, 2025, there was **no reserve for the lower of cost or net realizable value** of inventory, compared to $2.3 million as of December 31, 2024[51](index=51&type=chunk) **Inventories (in thousands)** | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Crude oil and feedstocks | $286,607 | $302,980 | | Refined products and blendstock | $490,853 | $504,456 | | Warehouse stock and other | $264,019 | $281,882 | | Total | $1,041,479 | $1,089,318 | [Note 7—Prepaid and Other Current Assets](index=14&type=section&id=Note%207%E2%80%94Prepaid%20and%20Other%20Current%20Assets) This note details the components of prepaid and other current assets, including derivative assets **Prepaid and Other Current Assets (in thousands)** | Category | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :-------------- | :---------------- | | Collateral posted with broker for derivative instruments | $9,553 | $38,618 | | Derivative assets | $42,558 | $12,855 | | Prepaid environmental credits | $45,053 | — | | Total | $122,515 | $92,527 | [Note 8—Inventory Financing Agreements](index=14&type=section&id=Note%208%E2%80%94Inventory%20Financing%20Agreements) The company utilizes inventory financing agreements to support its Hawaii refining operations - The company entered into an Inventory Intermediation Agreement with Citi on May 31, 2024, to finance crude oil for its Hawaii refinery, with **$161.0 million outstanding** as of June 30, 2025[55](index=55&type=chunk) - A new Product Financing Agreement with Citi was established on June 27, 2025, to finance RINs, with **$25.1 million in obligations** as of June 30, 2025[56](index=56&type=chunk) **Inventory Intermediation Fees and Interest Expense (in thousands)** | Agreement | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Inventory Intermediation Agreement fees | $10,877 | $6,036 | $16,477 | $6,036 | | Inventory Intermediation Agreement interest | $332 | $105 | $664 | $105 | | Supply and Offtake Agreement fees | — | $11,880 | — | $30,918 | | Supply and Offtake Agreement interest | — | $1,088 | — | $2,872 | [Note 9—Other Accrued Liabilities](index=16&type=section&id=Note%209%E2%80%94Other%20Accrued%20Liabilities) Other accrued liabilities include payroll, environmental credit obligations, and derivative liabilities **Other Accrued Liabilities (in thousands)** | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Accrued payroll and other employee benefits | $29,259 | $34,130 | | Environmental credit obligations | $301,217 | $231,982 | | Derivative liabilities | $70,212 | $19,548 | | Deferred revenue | $4,109 | $16,247 | | Total | $435,194 | $344,188 | [Note 10—Debt](index=16&type=section&id=Note%2010%E2%80%94Debt) The company's outstanding debt primarily consists of an ABL Credit Facility and a Term Loan - The ABL Credit Facility was increased to **$1.4 billion** in March 2024, with $485 million outstanding and **$477.8 million availability** as of June 30, 2025[68](index=68&type=chunk) - The Term Loan Credit Agreement was increased to **$650.0 million** in November 2024 and matures on February 28, 2030[72](index=72&type=chunk)[73](index=73&type=chunk) **Outstanding Debt (in thousands)** | Debt Instrument | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :---------------- | | ABL Credit Facility due 2028 | $485,000 | $483,000 | | Term Loan Credit Agreement due 2030 | $636,875 | $640,125 | | Other long-term debt | $3,778 | $4,108 | | Total debt, net of unamortized discount and deferred financing costs | $1,112,473 | $1,112,967 | | Long-term debt, net of current maturities | $1,107,743 | $1,108,082 | [Note 11—Derivatives](index=17&type=section&id=Note%2011%E2%80%94Derivatives) The company uses commodity and interest rate derivatives to manage market risks - The company entered into five additional interest rate collar transactions during Q2 2025, effective from May 2026 to May 2029, with a total notional amount of **$250.0 million**, to reduce variable interest rate risk[80](index=80&type=chunk) **Open Commodity Derivative Contracts (in thousands of barrels) as of June 30, 2025** | Contract Type | Purchases | Sales | Net | | :------------ | :-------- | :------ | :---- | | Futures | 2,170 | (2,595) | (425) | | Swaps | 105,583 | (133,973) | (28,390) | | Total | 107,753 | (136,568) | (28,815) | **Fair Value of Derivatives (in thousands)** | Balance Sheet Location | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Commodity derivatives (asset) | $40,564 | $10,591 | | Commodity derivatives (liability) | $(3,361) | $(13,456) | | Citi repurchase obligation derivative | $(3,678) | $(1,588) | | Interest rate derivatives | $(758) | $(24) | [Note 12—Fair Value Measurements](index=18&type=section&id=Note%2012%E2%80%94Fair%20Value%20Measurements) This note describes how financial assets and liabilities are measured and categorized at fair value - Financial assets and liabilities are classified into **Level 1** (quoted prices in active markets), **Level 2** (observable inputs), and **Level 3** (significant unobservable inputs)[86](index=86&type=chunk) - The valuation of the embedded derivative related to the Citi repurchase obligation is classified as a **Level 3 instrument** due to unobservable contractual price differentials[86](index=86&type=chunk) **Fair Value Amounts by Hierarchy Level (in thousands) as of June 30, 2025** | Category | Level 1 | Level 2 | Level 3 | Gross Fair Value | Net Carrying Value | | :-------------------------- | :------ | :------ | :------ | :--------------- | :----------------- | | Commodity derivatives (assets) | $10,746 | $391,564 | — | $402,310 | $38,950 | | Commodity derivatives (liabilities) | $(12,563) | $(354,158) | — | $(366,721) | $(3,361) | | Citi repurchase obligation derivative | — | — | $(3,678) | $(3,678) | $(3,678) | | Interest rate derivatives | — | $(758) | — | $(758) | $(758) | | Gross environmental credit obligations | — | $(85,381) | — | $(85,381) | $(85,381) | [Note 13—Leases](index=21&type=section&id=Note%2013%E2%80%94Leases) The company has finance and operating lease liabilities for various assets, including land and facilities **Lease Information (in thousands) as of June 30, 2025** | Metric | Finance Leases | Operating Leases | | :------------------------------------ | :------------- | :--------------- | | ROU assets, net | $15,273 | $435,227 | | Total lease liabilities | $13,225 | $453,235 | | Weighted-average remaining lease term (years) | 10.17 | 6.74 | | Weighted-average discount rate | 7.03% | 7.72% | **Net Lease Cost (in thousands)** | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30, | $37,622 | $30,864 | | Six Months Ended June 30, | $75,411 | $61,489 | **Estimated Future Undiscounted Cash Flows for Leases (in thousands) as of June 30, 2025** | Year | Finance Leases | Operating Leases | Total | | :----------------------- | :------------- | :--------------- | :---- | | 2025 (July 1 - Dec 31) | $1,499 | $60,698 | $62,197 | | 2026 | $2,772 | $126,030 | $128,802 | | Thereafter | $7,872 | $112,633 | $120,505 | | Total lease payments | $18,532 | $556,953 | $575,485 | [Note 14—Commitments and Contingencies](index=23&type=section&id=Note%2014%E2%80%94Commitments%20and%20Contingencies) The company is involved in various legal, tax, and environmental matters that could result in material costs - The company is appealing a **$1.4 million tax assessment** from the Washington Department of Revenue and is being audited for prior state tax exemptions in Hawaii's foreign trade zone[107](index=107&type=chunk) - The Hawaii refinery is subject to a Consent Decree with the EPA, with alleged air emission violations that could lead to **material financial penalties** or capital expenditures[112](index=112&type=chunk) - The Wyoming refinery has accrued **$12.7 million for environmental remediation** efforts and faces potential penalties exceeding $300,000 for wastewater discharge exceedances[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - The company incurs costs for emission allowances and compliance credits to meet obligations under **Washington state and federal regulations**[116](index=116&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) [Note 15—Stockholders' Equity](index=25&type=section&id=Note%2015%E2%80%94Stockholders'%20Equity) The Board authorized a new $250 million share repurchase program in February 2025 - A new share repurchase program for up to **$250 million** of common stock was authorized on February 21, 2025, replacing the prior program[122](index=122&type=chunk) - As of June 30, 2025, **$181.3 million of authorization remained** under the current share repurchase program[122](index=122&type=chunk) **Share Repurchases (in millions)** | Period | Shares Repurchased | Value | | :-------------------------- | :----------------- | :------ | | Three Months Ended June 30, 2025 | 1.6 | $28.2 | | Six Months Ended June 30, 2025 | 5.2 | $79.4 | | Three Months Ended June 30, 2024 | 2.2 | $67.1 | | Six Months Ended June 30, 2024 | 3.1 | $99.5 | **Compensation Costs (in thousands)** | Award Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Restricted Stock Awards | $3,170 | $2,105 | $5,668 | $6,301 | | Restricted Stock Units | $721 | $497 | $1,399 | $3,218 | | Stock Option Awards | $358 | $279 | $728 | $9,772 | [Note 16—Income (Loss) per Share](index=26&type=section&id=Note%2016%E2%80%94Income%20(Loss)%20per%20Share) This note provides the computation of basic and diluted income per share for the interim periods **Income Per Share (in thousands, except per share amounts)** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net income | $59,460 | $18,638 | $29,060 | $14,887 | | Basic income per common share | $1.18 | $0.33 | $0.56 | $0.26 | | Diluted income per common share | $1.17 | $0.32 | $0.55 | $0.25 | | Basic weighted-average common stock shares outstanding | 50,373 | 57,239 | 52,052 | 57,936 | | Diluted weighted-average common stock shares outstanding | 50,836 | 58,045 | 52,390 | 58,402 | [Note 17—Income Taxes](index=26&type=section&id=Note%2017%E2%80%94Income%20Taxes) The income tax provision is determined using an estimated annual effective tax rate, adjusted for discrete items - The effective tax rate for the interim periods differed from statutory rates due to **state income tax apportionment**, equity compensation, and equity method investments[129](index=129&type=chunk)[130](index=130&type=chunk) - The company expects to incur state tax liabilities as **NOL carryforwards may not offset taxable income** apportioned to all states[131](index=131&type=chunk) - The company is evaluating the impact of the newly enacted One Big Beautiful Bill Act (OBBBA) but does **not expect it to materially impact** the effective tax rate or cash flows in the current fiscal year[132](index=132&type=chunk) [Note 18—Segment Information](index=26&type=section&id=Note%2018%E2%80%94Segment%20Information) The company reports financial results for four segments: Refining, Retail, Logistics, and Corporate **Operating Income (Loss) by Segment (in thousands) for Three Months Ended June 30** | Segment | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Refining | $81,320 | $41,206 | | Logistics | $23,741 | $18,041 | | Retail | $20,793 | $16,053 | | Corporate, Eliminations and Other | $(29,094) | $(26,659) | | Total Operating Income | $96,760 | $48,641 | **Operating Income (Loss) by Segment (in thousands) for Six Months Ended June 30** | Segment | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Refining | $56,599 | $63,806 | | Logistics | $45,630 | $38,415 | | Retail | $36,754 | $27,049 | | Corporate, Eliminations and Other | $(57,999) | $(71,114) | | Total Operating Income | $80,984 | $58,156 | [Note 19—Subsequent Events](index=31&type=section&id=Note%2019%E2%80%94Subsequent%20Events) The company entered into a joint venture agreement for a renewable fuels manufacturing facility - On July 21, 2025, the company entered into an Equity Contribution Agreement to form a **joint venture with Alohi Renewable Energy, LLC** for a renewable fuels manufacturing facility in Hawaii[146](index=146&type=chunk) - Alohi will own a **36.5% equity interest** in the joint venture, with the company owning the remainder[146](index=146&type=chunk) - The company will contribute certain assets and up to $21 million in cash, while Alohi will contribute $100 million in cash, with the facility expected to be **operational by the end of 2025**[146](index=146&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides its perspective on financial results, segment performance, liquidity, and capital resources [Overview](index=32&type=section&id=Overview) Par Pacific Holdings, Inc. is a growing energy company providing fuels to the western United States - Par Pacific Holdings, Inc. is an energy company supplying **renewable and conventional fuels** to the western U.S[148](index=148&type=chunk) [Recent Events Affecting Comparability of Periods](index=32&type=section&id=Recent%20Events%20Affecting%20Comparability%20of%20Periods) Recent events impacting financial comparability include a refinery incident and a new joint venture [Operational Update](index=32&type=section&id=Operational%20Update) The Wyoming refinery experienced an operational incident leading to a 66-day idle period for repairs - The Wyoming refinery was **idled for 66 days** from February 12, 2025, to late April 2025, due to an operational incident, affecting comparability of financial results[149](index=149&type=chunk) [Renewable Fuels Facility Joint Venture](index=32&type=section&id=Renewable%20Fuels%20Facility%20Joint%20Venture) A joint venture was formed to develop a renewable fuels manufacturing facility in Hawaii - A joint venture with Alohi Renewable Energy, LLC was established on July 21, 2025, for a renewable fuels manufacturing facility at the Hawaii refinery, expected to be **operational by year-end 2025**[150](index=150&type=chunk) - Alohi will hold a **36.5% equity interest**, and Par Pacific Holdings, Inc. will operate and manage the facility[150](index=150&type=chunk) [Economic Update](index=32&type=section&id=Economic%20Update) Crude oil and gasoline prices decreased in the first half of 2025 compared to 2024 - OPEC agreed to **gradually increase oil production** starting April 2025, reversing 2.2 million barrels per day cuts over 18 months[151](index=151&type=chunk) - **Geopolitical tensions** in the Middle East and Red Sea continue to exert upward pressure on prices and increase freight and operating costs[152](index=152&type=chunk) **Average Crude Oil and Gasoline Prices** | Metric | First Half 2025 | First Half 2024 | | :-------------------------- | :-------------- | :-------------- | | Brent crude oil (per barrel) | $70.82 | $83.39 | | U.S. retail gasoline (per gallon) | $3.25 | $3.52 | [Results of Operations](index=33&type=section&id=Results%20of%20Operations) The company's financial results showed significant improvement in net income for the interim periods [Three months ended June 30, 2025 compared to the three months ended June 30, 2024 (Consolidated)](index=33&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20compared%20to%20the%20three%20months%20ended%20June%2030%2C%202024%20(Consolidated)) Net income for Q2 2025 increased significantly to $59.5 million, up from $18.6 million in the prior year - **Adjusted EBITDA increased by $56.2 million** to $137.8 million, driven by a $55.2 million increase in refining segment Adjusted Gross Margin[155](index=155&type=chunk) - **Adjusted Net Income improved by $49.8 million** to $78.3 million, reflecting higher Adjusted EBITDA and the absence of cash distributions from Laramie Energy in 2025[156](index=156&type=chunk) **Consolidated Financial Results (in thousands)** | Metric | Q2 2025 | Q2 2024 | $ Change | % Change | | :--------------------------------------- | :------ | :------ | :------- | :------- | | Revenues | $1,893,438 | $2,017,468 | $(124,030) | (6)% | | Operating income | $96,760 | $48,641 | $48,119 | 99% | | Net income | $59,460 | $18,638 | $40,822 | 219% | | Income tax expense | $(16,887) | $(6,667) | $(10,220) | 153% | [Six months ended June 30, 2025 compared to the six months ended June 30, 2024 (Consolidated)](index=33&type=section&id=Six%20months%20ended%20June%2030%2C%202025%20compared%20to%20the%20six%20months%20ended%20June%2030%2C%202024%20(Consolidated)) Net income for H1 2025 increased to $29.1 million from $14.9 million in the prior year - **Adjusted EBITDA decreased by $28.3 million** to $148.0 million, mainly due to a $47.6 million decrease in refining segment Adjusted Gross Margin[158](index=158&type=chunk) - **Adjusted Net Income declined by $42.2 million** to $28.0 million, reflecting the decrease in Adjusted EBITDA and higher D&A[159](index=159&type=chunk) **Consolidated Financial Results (in thousands)** | Metric | H1 2025 | H1 2024 | $ Change | % Change | | :--------------------------------------- | :------ | :------ | :------- | :------- | | Revenues | $3,638,474 | $3,998,303 | $(359,829) | (9)% | | Operating income | $80,984 | $58,156 | $22,828 | 39% | | Net income | $29,060 | $14,887 | $14,173 | 95% | | General and administrative expense (excluding depreciation) | $47,891 | $64,923 | $(17,032) | (26)% | | Income tax expense | $(9,993) | $(4,036) | $(5,957) | 148% | [Operating Income by Segment (Three Months)](index=35&type=section&id=Operating%20Income%20by%20Segment%20(Three%20Months)) For Q2 2025, all operating segments showed increased operating income compared to the prior year **Operating Income (Loss) by Segment (in thousands)** | Segment | Q2 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | | Refining | $81,320 | $41,206 | | Logistics | $23,741 | $18,041 | | Retail | $20,793 | $16,053 | | Corporate, Eliminations and Other | $(29,094) | $(26,659) | | Total Operating Income | $96,760 | $48,641 | [Operating Income by Segment (Six Months)](index=36&type=section&id=Operating%20Income%20by%20Segment%20(Six%20Months)) For H1 2025, Logistics and Retail segments reported increased operating income, while Refining decreased **Operating Income (Loss) by Segment (in thousands)** | Segment | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | | Refining | $56,599 | $63,806 | | Logistics | $45,630 | $38,415 | | Retail | $36,754 | $27,049 | | Corporate, Eliminations and Other | $(57,999) | $(71,114) | | Total Operating Income | $80,984 | $58,156 | [Non-GAAP Performance Measures](index=41&type=section&id=Non-GAAP%20Performance%20Measures) Management uses non-GAAP measures like Adjusted EBITDA to evaluate operating performance - **Adjusted Gross Margin** is used to evaluate operating performance and compare profitability, eliminating the gross impact of volatile commodity prices[176](index=176&type=chunk)[177](index=177&type=chunk) - **Adjusted Net Income (Loss) and Adjusted EBITDA** are supplemental measures to assess financial performance without regard to financing methods or capital structure[177](index=177&type=chunk) - Effective Q4 2024, the definition of non-GAAP measures was modified to align accounting treatment for **deferred turnaround costs** from refining and logistics investments[180](index=180&type=chunk) [Adjusted Gross Margin](index=42&type=section&id=Adjusted%20Gross%20Margin) Adjusted Gross Margin excludes certain operating expenses and non-cash items from operating income **Adjusted Gross Margin by Segment (in thousands) for Three Months Ended June 30** | Segment | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Refining | $231,780 | $176,603 | | Logistics | $34,402 | $30,759 | | Retail | $43,589 | $41,598 | **Adjusted Gross Margin by Segment (in thousands) for Six Months Ended June 30** | Segment | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Refining | $336,108 | $383,713 | | Logistics | $68,441 | $62,709 | | Retail | $83,382 | $78,680 | [Adjusted Net Income (Loss) and Adjusted EBITDA](index=43&type=section&id=Adjusted%20Net%20Income%20(Loss)%20and%20Adjusted%20EBITDA) These non-GAAP measures exclude non-operating and non-cash items to show core operational performance - **Adjusted Net Income (loss)** excludes non-operating income and expenses to improve comparability[178](index=178&type=chunk) - **Adjusted EBITDA** further excludes D&A, interest expense, Laramie Energy cash distributions, and income tax expense[188](index=188&type=chunk) **Adjusted Net Income and Adjusted EBITDA (in thousands)** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net Income | $59,460 | $18,638 | $29,060 | $14,887 | | Adjusted Net Income | $78,291 | $28,544 | $27,970 | $70,212 | | Adjusted EBITDA | $137,829 | $81,601 | $147,975 | $176,299 | [Adjusted EBITDA by Segment](index=45&type=section&id=Adjusted%20EBITDA%20by%20Segment) Adjusted EBITDA by segment provides a detailed view of the operational performance of each business unit **Adjusted EBITDA by Segment (in thousands) for Three Months Ended June 30** | Segment | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Refining | $108,384 | $60,094 | | Logistics | $29,798 | $26,058 | | Retail | $23,347 | $18,728 | | Corporate and Other | $(23,700) | $(23,279) | | Total Adjusted EBITDA | $137,829 | $81,601 | **Adjusted EBITDA by Segment (in thousands) for Six Months Ended June 30** | Segment | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Refining | $94,092 | $141,378 | | Logistics | $59,472 | $54,196 | | Retail | $41,971 | $32,830 | | Corporate and Other | $(47,560) | $(52,105) | | Total Adjusted EBITDA | $147,975 | $176,299 | [Factors Impacting Segment Results](index=48&type=section&id=Factors%20Impacting%20Segment%20Results) This section analyzes the key drivers behind changes in operating income and Adjusted Gross Margin [Operating Income (Three Months)](index=48&type=section&id=Operating%20Income%20(Three%20Months)) Refining operating income increased by $40.1 million due to higher crack spreads and favorable derivatives - **Refining operating income increased by $40.1 million**, driven by a $58.4 million increase in crack spreads and $51.7 million from favorable derivative impacts[195](index=195&type=chunk) - **Logistics operating income increased by $5.7 million** due to lower repair and maintenance costs, lower variable costs, and a $1.2 million gain on sale of assets[195](index=195&type=chunk) - **Retail operating income increased by $4.7 million**, primarily from a $2.6 million decrease in operating expenses and higher fuel and merchandise margins[196](index=196&type=chunk) [Operating Income (Six Months)](index=48&type=section&id=Operating%20Income%20(Six%20Months)) Refining operating income decreased by $7.2 million due to unfavorable feedstock and environmental costs - **Refining operating income decreased by $7.2 million**, primarily due to a $128.8 million decrease related to unfavorable feedstock costs and a $55.0 million increase in environmental costs[197](index=197&type=chunk)[198](index=198&type=chunk) - **Logistics operating income increased by $7.2 million**, driven by a $5.3 million decrease in cost of revenues and a $1.2 million gain on sale of assets[197](index=197&type=chunk) - **Retail operating income increased by $9.8 million**, mainly due to a $4.4 million decrease in operating expenses and a $4.2 million increase in fuel margins[198](index=198&type=chunk)[200](index=200&type=chunk) [Adjusted Gross Margin (Three Months)](index=49&type=section&id=Adjusted%20Gross%20Margin%20(Three%20Months)) Refining Adjusted Gross Margin increased by $55.2 million, driven by higher crack spreads - **Refining Adjusted Gross Margin increased by $55.2 million**, primarily due to a $58.4 million increase in crack spreads[201](index=201&type=chunk) - Hawaii refinery's Adjusted Gross Margin per barrel increased by $0.11 to **$10.18**[205](index=205&type=chunk) - Montana refinery's Adjusted Gross Margin per barrel increased by $5.41 to **$22.30**[205](index=205&type=chunk) - Washington refinery's Adjusted Gross Margin per barrel increased by $6.80 to **$11.47**[205](index=205&type=chunk) - Wyoming refinery's Adjusted Gross Margin per barrel increased by $3.83 to **$18.57**[205](index=205&type=chunk) - **Logistics Adjusted Gross Margin increased by $3.6 million**, mainly due to decreased repair and maintenance expenses and higher third-party revenues[202](index=202&type=chunk) - **Retail Adjusted Gross Margin increased by $2.0 million**, attributed to a $1.2 million increase in fuel margins and a $0.7 million increase in merchandise margins[203](index=203&type=chunk) [Adjusted Gross Margin (Six Months)](index=49&type=section&id=Adjusted%20Gross%20Margin%20(Six%20Months)) Refining Adjusted Gross Margin decreased by $47.6 million due to unfavorable feedstock costs - **Refining Adjusted Gross Margin decreased by $47.6 million**, mainly due to a $108.2 million decrease related to unfavorable feedstock costs and a $34.8 million increase in environmental costs[204](index=204&type=chunk) - Hawaii refinery's Adjusted Gross Margin per barrel decreased by $2.45 to **$9.57**[204](index=204&type=chunk) - Montana refinery's Adjusted Gross Margin per barrel decreased by $2.18 to **$13.02**[213](index=213&type=chunk) - Washington refinery's Adjusted Gross Margin per barrel increased by $1.64 to **$6.94**[213](index=213&type=chunk) - Wyoming refinery's Adjusted Gross Margin per barrel increased by $4.18 to **$19.01**[213](index=213&type=chunk) - **Logistics Adjusted Gross Margin increased by $5.7 million**, driven by higher marine revenues and lower variable expenses[206](index=206&type=chunk) - **Retail Adjusted Gross Margin increased by $4.7 million**, primarily due to a $4.2 million increase in fuel margins and an 8% increase in merchandise margins[207](index=207&type=chunk) [Discussion of Consolidated Results](index=50&type=section&id=Discussion%20of%20Consolidated%20Results) This section analyzes consolidated revenues, operating expenses, and other income/expense items [Three months ended June 30, 2025 compared to the three months ended June 30, 2024 (Detailed)](index=50&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20compared%20to%20the%20three%20months%20ended%20June%2030%2C%202024%20(Detailed)) Revenues decreased by $0.1 billion due to lower crude oil prices, despite increased sales volumes - **Revenues decreased by $0.1 billion (6%)** to $1.9 billion, primarily due to a 22% decrease in Brent crude oil prices[208](index=208&type=chunk) - **Cost of revenues decreased by $0.2 billion (10%)** to $1.6 billion, driven by lower crude oil prices and favorable derivative activity[209](index=209&type=chunk) - **Operating expense increased by $4.6 million (3%)** to $148.7 million, mainly due to higher repair and maintenance costs from the Wyoming operational incident[210](index=210&type=chunk) - **Depreciation and amortization increased by $2.6 million (8%)** to $34.7 million, primarily due to Montana deferred turnaround asset amortization[211](index=211&type=chunk) - **Equity earnings** from refining and logistics investments increased by $3.6 million to $7.3 million[213](index=213&type=chunk)[214](index=214&type=chunk) - **Interest expense** and financing costs, net, increased by $1.7 million (8%) to $22.1 million[217](index=217&type=chunk) - **Income tax expense increased by $10.2 million (153%)** to $16.9 million, related to higher pre-tax net income[220](index=220&type=chunk) [Six months ended June 30, 2025 compared to the six months ended June 30, 2024 (Detailed)](index=51&type=section&id=Six%20months%20ended%20June%2030%2C%202025%20compared%20to%20the%20six%20months%20ended%20June%2030%2C%202024%20(Detailed)) Revenues decreased by $0.4 billion due to lower crude prices and the Wyoming operational incident - **Revenues decreased by $0.4 billion (9%)** to $3.6 billion, primarily due to lower crude prices and the Wyoming operational incident[221](index=221&type=chunk) - **Cost of revenues decreased by $0.3 billion (10%)** to $3.2 billion, mainly due to lower crude oil prices[222](index=222&type=chunk) - **Operating expense decreased by $4.5 million (2%)** to $292.8 million, driven by lower costs at the Montana refinery and Retail segment[223](index=223&type=chunk) - **Depreciation and amortization increased by $6.5 million (10%)** to $71.3 million, primarily due to increases at Montana and Wyoming[224](index=224&type=chunk) - **General and administrative expense decreased by $17.0 million (26%)** to $47.9 million, mainly due to lower stock-based compensation[226](index=226&type=chunk) - **Equity earnings** from refining and logistics investments increased by $5.0 million to $14.8 million[227](index=227&type=chunk) - **Interest expense** and financing costs, net, increased by $5.7 million (15%) to $44.0 million[230](index=230&type=chunk) - **Income tax expense increased by $6.0 million (148%)** to $10.0 million, related to higher pre-tax net income[234](index=234&type=chunk) [Consolidating Condensed Financial Information](index=53&type=section&id=Consolidating%20Condensed%20Financial%20Information) This section provides supplemental condensed consolidating financial information for guarantors - The Term Loan Credit Agreement is guaranteed on a senior unsecured basis by Par Pacific Holdings, Inc. (Parent) and on a **senior secured basis by all subsidiaries of Par Borrower**[235](index=235&type=chunk) **Consolidating Balance Sheet (in thousands) as of June 30, 2025** | Category | Parent Guarantor | Par Borrower and Subsidiaries | Non-Guarantor Subsidiaries and Eliminations | Par Pacific Holdings, Inc. and Subsidiaries | | :-------------------------------- | :--------------- | :---------------------------- | :------------------------------------------ | :------------------------------------------ | | Total assets | $1,382,151 | $3,630,885 | $(1,117,494) | $3,895,542 | | Total liabilities | $233,736 | $3,113,135 | $(599,744) | $2,747,127 | | Total stockholders' equity | $1,148,415 | $517,750 | $(517,750) | $1,148,415 | **Consolidating Statement of Operations (in thousands) for Three Months Ended June 30, 2025** | Category | Parent Guarantor | Par Borrower and Subsidiaries | Non-Guarantor Subsidiaries and Eliminations | Par Pacific Holdings, Inc. and Subsidiaries | | :-------------------------------- | :--------------- | :---------------------------- | :------------------------------------------ | :------------------------------------------ | | Revenues | — | $1,893,435 | $3 | $1,893,438 | | Operating income (loss) | $(7,750) | $97,248 | $7,262 | $96,760 | | Net income (loss) | $59,460 | $58,443 | $(58,443) | $59,460 | | Adjusted EBITDA | $(7,212) | $136,304 | $8,737 | $137,829 | [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is derived from cash flows, cash on hand, and available credit facilities - As of June 30, 2025, **total liquidity was $647.0 million**, consisting of $169.2 million in cash and $477.8 million available under the ABL Credit Facility[252](index=252&type=chunk) - The company believes current cash flows and capital resources are **sufficient to meet requirements for the next 12 months**[253](index=253&type=chunk) - The Board authorized a **$250 million share repurchase program** on February 21, 2025, with $181.3 million remaining as of June 30, 2025[254](index=254&type=chunk) [Cash Flows](index=63&type=section&id=Cash%20Flows) This section summarizes cash flow activities for the six months ended June 30, 2025, and 2024 **Summary of Cash Activities (in thousands)** | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $132,179 | $20,755 | | Net cash used in investing activities | $(86,788) | $(57,987) | | Net cash used in financing activities | $(68,114) | $(62,213) | [Cash flows for the six months ended June 30, 2025](index=63&type=section&id=Cash%20flows%20for%20the%20six%20months%20ended%20June%2030%2C%202025) Net cash provided by operating activities was $132.2 million, driven by changes in working capital - **Net cash provided by operating activities was $132.2 million**, primarily from changes in operating assets and liabilities, non-cash charges, and net income[258](index=258&type=chunk) - Key operating cash inflows included a **$144.6 million increase in Accounts payable and Other accrued liabilities** and a $46.6 million decrease in Inventories[258](index=258&type=chunk) - **Net cash used in investing activities was $86.8 million**, mainly for $89.1 million in capital expenditures for refinery projects and repairs[258](index=258&type=chunk) - **Net cash used in financing activities was $68.1 million**, primarily due to $80.8 million in common stock repurchases and $13.6 million in net debt repayments[259](index=259&type=chunk) [Cash flows for the six months ended June 30, 2024](index=64&type=section&id=Cash%20flows%20for%20the%20six%20months%20ended%20June%2030%2C%202024) Net cash provided by operating activities was $20.8 million, driven by net income and non-cash charges - **Net cash provided by operating activities was $20.8 million**, driven by $14.9 million net income and $153.2 million non-cash charges, offset by working capital changes[261](index=261&type=chunk) - Key operating cash outflows included a **$114.0 million increase in accounts receivable** and a $101.3 million increase in inventories[261](index=261&type=chunk) - **Net cash used in investing activities was $58.0 million**, primarily for $59.5 million in capital expenditures[261](index=261&type=chunk) - **Net cash used in financing activities was $62.2 million**, including $547.6 million for inventory financing agreement terminations and $103.5 million for common stock repurchases[262](index=262&type=chunk) [Critical Accounting Estimates](index=64&type=section&id=Critical%20Accounting%20Estimates) There have been no material changes to critical accounting estimates for the interim period - **No material changes** to critical accounting estimates were reported for the six months ended June 30, 2025[263](index=263&type=chunk) [Forward-Looking Statements](index=65&type=section&id=Forward-Looking%20Statements) This section contains cautionary statements regarding forward-looking information - Forward-looking statements involve known and unknown risks, including **geopolitical events, tariffs, and global crude oil market developments**[265](index=265&type=chunk) - Actual results may differ materially from forward-looking statements due to factors described in the **Annual Report on Form 10-K** and this Quarterly Report[266](index=266&type=chunk) - The company **does not intend to update** or revise any forward-looking statements based on new information or future events[266](index=266&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to commodity price, compliance, interest rate, and credit risks [Commodity Price Risk](index=65&type=section&id=Commodity%20Price%20Risk) The company's earnings are significantly affected by commodity price volatility - A **$1 per barrel change** in average gross refining margins would change annualized operating income by approximately **$67.2 million**[267](index=267&type=chunk) - A **$1 change in crude oil price** would result in an approximate **$28.7 million change** to the fair value of derivative instruments and Cost of revenues[268](index=268&type=chunk) - The company uses **option collars** to economically hedge internally consumed fuel costs at its refineries[269](index=269&type=chunk) [Compliance Program Price Risk](index=66&type=section&id=Compliance%20Program%20Price%20Risk) The company is exposed to price volatility of RINs and other environmental compliance credits - The company is exposed to market risks from the volatility in **RINs prices** for Renewable Fuel Standard compliance and credits for Washington's climate programs[270](index=270&type=chunk)[271](index=271&type=chunk) - To mitigate risk, the company **purchases RINs and compliance credits** when prices are deemed favorable[270](index=270&type=chunk)[271](index=271&type=chunk) [Interest Rate Risk](index=66&type=section&id=Interest%20Rate%20Risk) The company is exposed to interest rate volatility on its $1.1 billion of floating-rate debt - As of June 30, 2025, **$1.1 billion in debt principal** was subject to floating interest rates[272](index=272&type=chunk) - A **1% increase in the variable rate** would increase annual interest expense by approximately **$11.2 million**[272](index=272&type=chunk) - The company uses **interest rate collars** with a maximum cap of 5.50% to manage interest rate risk[272](index=272&type=chunk) [Credit Risk](index=66&type=section&id=Credit%20Risk) The company is exposed to credit risk from nonperformance by its counterparties - The company is exposed to credit risk from **nonpayment or nonperformance** by counterparties[273](index=273&type=chunk) - **Creditworthiness of customers is closely monitored**, and credit limits are established in accordance with the company's credit policy[273](index=273&type=chunk) [Item 4. Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025 [Evaluation of Disclosure Controls and Procedures](index=67&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective - The CEO and CFO concluded that **disclosure controls and procedures were effective** as of June 30, 2025[275](index=275&type=chunk) [Changes in Internal Control over Financial Reporting](index=67&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) There were no material changes in internal control over financial reporting during the quarter - **No material changes** in internal control over financial reporting occurred during the quarter ended June 30, 2025[276](index=276&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=68&type=section&id=Item%201.%20LEGAL%20PROCEEDINGS) The company is involved in various legal proceedings arising from ordinary business operations - The company is involved in various legal proceedings in the ordinary course of business, with **details provided in Note 14**[278](index=278&type=chunk) [Item 1A. Risk Factors](index=68&type=section&id=Item%201A.%20RISK%20FACTORS) This section updates risk factors, highlighting new risks from U.S. trade policy and a joint venture - Changes in **U.S. trade policy and tariffs**, such as a 10% tariff on product imports, could adversely affect the business by increasing production costs[280](index=280&type=chunk) - The pending **Renewable Fuels Facility joint venture** faces risks including delays in commencement, integration challenges, and obligations to fund capital expenditures[281](index=281&type=chunk)[282](index=282&type=chunk)[284](index=284&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details common stock repurchases and its dividend policy [Dividends](index=69&type=section&id=Dividends) The company has not paid dividends and does not anticipate doing so in the near future - The company has not paid, and **does not expect to pay, dividends** on its common stock in the foreseeable future[285](index=285&type=chunk) - Subsidiaries are **restricted from paying dividends** or making other equity distributions under the ABL Credit Facility and Term Loan Credit Agreement[285](index=285&type=chunk) [Repurchases](index=69&type=section&id=Repurchases) The company repurchased 1.62 million shares during the quarter under its repurchase program - The repurchases were made under a **$250 million share repurchase program** authorized on February 21, 2025[286](index=286&type=chunk) **Common Stock Repurchases (Quarter Ended June 30, 2025)** | Period | Total Shares Purchased | Average Price Paid Per Share | Maximum Remaining Authorization | | :----------------------- | :--------------------- | :--------------------------- | :------------------------------ | | April 1 - April 30, 2025 | 770,654 | $13.63 | $198,690,419 | | May 1 - May 31, 2025 | 445,758 | $19.45 | $190,058,671 | | June 1 - June 30, 2025 | 406,829 | $22.29 | $181,262,216 | | Total | 1,623,241 | $17.40 | | [Item 3. Defaults Upon Senior Securities](index=69&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period [Item 4. Mine Safety Disclosures](index=69&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period [Item 5. Other Information](index=69&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated any Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted or terminated **Rule 10b5-1 or non-Rule 10b5-1 trading arrangements** during the quarter ended June 30, 2025[289](index=289&type=chunk) [Item 6. Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including agreements and certifications - Exhibit 2.13 is the **Equity Contribution Agreement** dated July 21, 2025, for the Hawaii Renewables, LLC joint venture[292](index=292&type=chunk) - Exhibit 10.1 is a Letter Agreement dated June 27, 2025, amending the **Inventory Intermediation Agreement**[294](index=294&type=chunk) - Includes **certifications from the CEO and CFO** pursuant to Sections 302 and 1350 of the Sarbanes-Oxley Act of 2002[294](index=294&type=chunk)

Financial Data and Key Metrics Changes - Second quarter adjusted EBITDA was $138 million, and adjusted net income was $1.54 per share, reflecting strong operations and improving market conditions [4][20] - Total liquidity increased by 23% during the second quarter to $647 million, supported by strong operating cash flows [20] - Year-to-date share count reduced by nearly 8% due to stock repurchases totaling $28 million [8][19] Business Line Data and Key Metrics Changes - Refining segment reported adjusted EBITDA of $108 million in the second quarter, compared to a loss of $14 million in the first quarter [13] - Retail segment adjusted EBITDA increased to $23 million from $19 million in the first quarter, driven by higher fuel margins and same-store sales growth [17] - Logistics segment adjusted EBITDA remained consistent at $30 million, aligning with mid-cycle run rate guidance [16] Market Data and Key Metrics Changes - Hawaii throughput reached a record 88,000 barrels per day, with production costs at $4.18 per barrel [10] - Montana throughput was 44,000 barrels per day, reflecting lower throughput due to a successful turnaround [11] - Washington index averaged $15.37 per barrel, an improvement of approximately $11 from the prior quarter [15] Company Strategy and Development Direction - The company is focusing on low capital, high return projects to improve profitability following the Montana turnaround [6] - A joint venture with Mitsubishi and INEOS was announced, with a $100 million investment to strengthen renewable fuels capabilities [7] - The company aims to achieve annual cost reductions of $30 million to $40 million relative to the previous year [17] Management's Comments on Operating Environment and Future Outlook - Management expressed a constructive outlook despite policy uncertainty, citing flexibility and structural cost advantages [8] - The Asian market outlook remains favorable, with expectations of strong cash generation driven by market conditions and reduced capital spending [9] - Management anticipates financial contributions from the joint venture starting in 2026, following the commissioning of the pretreatment unit [29] Other Important Information - Cash from operations during the second quarter totaled $83 million, excluding working capital inflows [18] - The company repurchased $28 million worth of shares during the second quarter, with a total of 5.2 million shares repurchased year-to-date [19] Q&A Session Summary Question: Drivers behind strong capture rates in Hawaii - Management noted that elevated clean product freight rates and improved throughput rates contributed to capture rates exceeding guidance [22][23] Question: Update on SAF joint venture and startup timing - The joint venture discussions have been ongoing, with startup targeted for the second half of the year and expected EBITDA contributions beginning in 2026 [26][29] Question: Performance in The Rockies and excess inventory sales - Management indicated that excess inventory sales contributed to capture rates, with guidance for Q3 remaining at 90% to 100% [32][33] Question: Small refinery exemptions and cash flow implications - Management expects the EPA to follow the law regarding small refinery exemptions, with potential cash flow upside from retroactive receipts [43][46] Question: Sustainability of Singapore market margins - Management highlighted that the Chinese refining fleet's focus on internal demand and integration with petrochemical complexes is key to market dynamics [47][49] Question: Use of excess cash and M&A appetite - The company remains in an excess capital position, with a focus on opportunistic buybacks and internal growth opportunities rather than large-scale M&A [57][59]

Company Overview - Par Pacific is a growing energy company focused on renewable and conventional fuels in the western United States[10] - The company has an integrated logistics network with 13 million barrels (MMbbls) of storage and marine, rail, and pipeline assets[10] - The company's system-wide refining capacity is 219,000 barrels per day (bpd)[10] - Par Pacific has 119 fuel retail locations in Hawaii and the Pacific Northwest[10] - The company holds a 46% ownership interest in Laramie Energy, a natural gas E&P company[10] - As of December 31, 2024, Par Pacific had approximately $1 billion in federal tax attributes[10] Refining Segment - Par Pacific's system-wide distillate & LSFO yield is 52%[22] - The company has a 21% system-wide exposure to Western Canadian Select (WCS) heavy crude[22] - Hawaii refinery crude capacity is 94,000 bpd, Montana is 63,000 bpd, Washington is 42,000 bpd, and Wyoming is 20,000 bpd[19] Retail and Logistics Segments - The Retail and Logistics segments are showing growing Adjusted EBITDA contribution through various market cycles[38] - The Trending Retail & Logistics Adjusted EBITDA for the Last Twelve Months (LTM) ending June 30, 2025, was $211 million[40] - The company is targeting gross term debt of 3-4x Retail and Logistics annual Adjusted EBITDA[41] Capital Expenditure and Turnaround - The company's 2024 actual capital expenditures were $209 million[44] - The company's 2025 capital expenditure guidance is $210-240 million[43] - The company expects a normalized annual turnaround outlay of $8-9 million for Hawaii, $7-8 million for Washington, $4-5 million for Wyoming, and $18-22 million for Montana[44] Hawaii Renewables Project - Par Pacific is executing a project in Hawaii to produce 61 million gallons per year capacity for renewable fuels, including Renewable Diesel (RD) and Sustainable Aviation Fuel (SAF)[51] - Mitsubishi and ENEOS will contribute $100 million to Hawaii Renewables through Alohi Renewable Energy for a 36.5% equity interest[51] Financial Position - As of June 30, 2025, the company's term debt was $641 million[99]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) This section provides an overview of Par Pacific Holdings' strong Q2 2025 financial performance, strategic achievements, and capital allocation efforts [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Par Pacific Holdings reported significantly improved financial results for Q2 2025 compared to Q2 2024, with net income more than tripling and Adjusted EBITDA increasing by 69% The company also highlighted record Hawaii refining throughput and a new joint venture | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------------- | :---------- | :---------- | :----------- | | Net Income | $59.5 million | $18.6 million | +220% | | Diluted EPS | $1.17 | $0.32 | +266% | | Adjusted Net Income | $78.3 million | $28.5 million | +175% | | Adjusted EBITDA | $137.8 million| $81.6 million | +69% | - Repurchased **$28 million of common stock** at an average price of **$17.36 per share** during the second quarter, contributing to an **8% year-to-date reduction in shares outstanding**[4](index=4&type=chunk)[6](index=6&type=chunk)[18](index=18&type=chunk) - Achieved record Hawaii refining quarterly throughput of **88 thousand barrels per day (Mbpd)**[6](index=6&type=chunk) - Announced Hawaii Renewables joint venture with expected cash proceeds of **$100 million**[4](index=4&type=chunk)[6](index=6&type=chunk) - Successfully completed the Montana turnaround[4](index=4&type=chunk)[6](index=6&type=chunk) [CEO's Strategic Commentary](index=1&type=section&id=CEO%27s%20Strategic%20Commentary) President and CEO Will Monteleone highlighted strong operational and commercial execution, advancing key strategic priorities including the Montana turnaround, Hawaii SAF project, and the Hawaii Renewables joint venture The company also opportunistically reduced shares outstanding - Second quarter results reflected strong operational and commercial execution[4](index=4&type=chunk) - Advanced key strategic priorities, including completing the Montana turnaround and progressing construction of the Hawaii SAF project[4](index=4&type=chunk) - Announced the Hawaii Renewables joint venture at an attractive implied valuation with strategic partners, bringing strong commercial capabilities and expanded market access[4](index=4&type=chunk) - Opportunistically reduced shares outstanding by **3%** during the quarter, bringing total reductions to **8% year-to-date**[4](index=4&type=chunk) [Segment Performance Overview](index=1&type=section&id=Segment%20Performance%20Overview) This section details the financial and operational performance of Par Pacific's Refining, Retail, and Logistics segments for Q2 2025 [Refining Segment](index=1&type=section&id=Refining%20Segment) The Refining segment demonstrated strong growth in Q2 2025, with operating income more than doubling and Adjusted EBITDA increasing significantly year-over-year, driven by improved margins across most refineries | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Operating Income | $81.3 million | $41.2 million | +97.3% | | Adjusted Gross Margin | $231.8 million| $176.6 million| +31.3% | | Adjusted EBITDA | $108.4 million| $60.1 million | +80.4% | | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Feedstocks throughput (Mbpd)| 186.6 | 179.8 | +3.8% | | Refined product sales (Mbpd)| 204.5 | 191.2 | +6.9% | | Adjusted Gross Margin ($/bbl)| $13.65 | $10.79 | +26.5% | | Production costs ($/bbl) | $7.20 | $7.04 | +2.3% | [Hawaii Refinery](index=1&type=section&id=Hawaii%20Refinery) The Hawaii refinery achieved record throughput and improved its Adjusted Gross Margin in Q2 2025, despite a net price lag impact | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Hawaii Index ($/bbl) | $8.57 | $7.41 | +15.6% | | Throughput (Mbpd) | 88 | 81 | +8.6% | | Production costs ($/bbl) | $4.18 | $4.50 | -7.2% | | Adjusted Gross Margin ($/bbl)| $10.18 | $10.07 | +1.1% | - Adjusted Gross Margin for Hawaii refinery included a net price lag impact of approximately **$(3.7) million**, or **$(0.46) per barrel**, in Q2 2025[7](index=7&type=chunk) [Montana Refinery](index=2&type=section&id=Montana%20Refinery) The Montana refinery significantly increased throughput and Adjusted Gross Margin in Q2 2025, benefiting from lower production costs | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Montana Index ($/bbl) | $20.29 | $19.15 | +6.0% | | Throughput (Mbpd) | 44 | 38 | +15.8% | | Production costs ($/bbl) | $14.18 | $16.18 | -12.3% | | Adjusted Gross Margin ($/bbl)| $22.30 | $16.89 | +32.0% | [Washington Refinery](index=2&type=section&id=Washington%20Refinery) The Washington refinery maintained stable throughput in Q2 2025, achieving a substantial increase in Adjusted Gross Margin | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Washington Index ($/bbl) | $15.37 | $7.25 | +112.0% | | Throughput (Mbpd) | 41 | 41 | 0.0% | | Production costs ($/bbl) | $3.73 | $3.66 | +1.9% | | Adjusted Gross Margin ($/bbl)| $11.47 | $4.67 | +145.6% | [Wyoming Refinery](index=2&type=section&id=Wyoming%20Refinery) The Wyoming refinery experienced a decrease in throughput and a significant rise in production costs in Q2 2025, yet improved its Adjusted Gross Margin | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Wyoming Index ($/bbl) | $21.41 | $17.45 | +22.7% | | Throughput (Mbpd) | 13 | 20 | -35.0% | | Production costs ($/bbl) | $14.50 | $7.08 | +104.8% | | Adjusted Gross Margin ($/bbl)| $18.57 | $14.74 | +26.0% | - Adjusted Gross Margin for Wyoming refinery included a FIFO impact of approximately **$0.9 million**, or **$0.74 per barrel**, in Q2 2025[13](index=13&type=chunk) [Retail Segment](index=2&type=section&id=Retail%20Segment) The Retail segment experienced solid growth in Q2 2025, with increased operating income, Adjusted Gross Margin, and Adjusted EBITDA, supported by higher sales volumes and improved same-store metrics | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Operating Income | $20.8 million | $16.1 million | +29.2% | | Adjusted Gross Margin | $43.6 million | $41.6 million | +4.8% | | Adjusted EBITDA | $23.3 million | $18.7 million | +24.6% | | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Sales volumes (million gallons)| 30.8 | 30.5 | +1.0% | | Same store fuel volumes | +1.8% | N/A | N/A | | Inside sales revenue | +3.0% | N/A | N/A | [Logistics Segment](index=3&type=section&id=Logistics%20Segment) The Logistics segment also showed strong performance in Q2 2025, with notable increases in operating income, Adjusted Gross Margin, and Adjusted EBITDA compared to the prior year | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Operating Income | $23.7 million | $18.0 million | +31.7% | | Adjusted Gross Margin | $34.4 million | $30.8 million | +11.7% | | Adjusted EBITDA | $29.8 million | $26.1 million | +14.2% | [Liquidity and Capital Allocation](index=3&type=section&id=Liquidity%20and%20Capital%20Allocation) This section outlines Par Pacific's cash flow, balance sheet position, and share repurchase activities, reflecting its financial health and capital management strategy [Cash Flow and Balance Sheet](index=3&type=section&id=Cash%20Flow%20and%20Balance%20Sheet) Par Pacific significantly improved its cash flow from operations in Q2 2025, moving from a net cash outflow in the prior year to a substantial inflow, while also increasing total liquidity and managing its debt | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :----------- | | Net cash provided by operations | $133.6 million| $(4.7) million| +$138.3 million| | Net cash used in investing activities| $(45.9) million| $(35.4) million| +$10.5 million| | Net cash used in financing activities| $(52.3) million| $(8.6) million| +$43.7 million| | Cash balance (as of June 30) | $169.2 million| N/A | N/A | | Gross term debt (as of June 30) | $640.7 million| N/A | N/A | | Net term debt (as of June 30) | $471.5 million| N/A | N/A | | Total liquidity (as of June 30) | $647.0 million| N/A | +23% (QoQ) | - Net cash provided by operations for Q2 2025 included working capital inflows of **$122.9 million** and deferred turnaround expenditures of **$(72.3) million**[17](index=17&type=chunk) [Share Repurchases](index=3&type=section&id=Share%20Repurchases) The company continued its share repurchase program, buying back $28 million of common stock during Q2 2025, contributing to a year-to-date reduction of 8% in shares outstanding - Repurchased **$28 million of common stock** at a weighted average price of **$17.36 per share** during the second quarter of 2025[6](index=6&type=chunk)[18](index=18&type=chunk) - Total shares outstanding reductions reached **8% year-to-date**[4](index=4&type=chunk) [Laramie Energy Performance](index=3&type=section&id=Laramie%20Energy%20Performance) This section reviews the financial contribution and operational metrics of Par Pacific's equity investment in Laramie Energy, LLC [Laramie Energy Performance](index=3&type=section&id=Laramie%20Energy%20Performance) Par Pacific's equity earnings from Laramie Energy, LLC improved significantly in Q2 2025, with Laramie Energy reporting net income compared to a net loss in the prior year, and an increase in Adjusted EBITDAX | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Par Pacific Equity Earnings | $1.9 million | $(1.4) million| +$3.3 million| | Laramie Net Income | $0.5 million | $(6.5) million| +$7.0 million| | Laramie Adjusted EBITDAX| $12.4 million | $10.0 million | +24.0% | - Laramie's total net income in Q2 2025 included unrealized losses on derivatives of **$(0.9) million**[19](index=19&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) This section provides an overview of Par Pacific Holdings, including its business operations, upcoming conference call details, and important forward-looking statements [About Par Pacific](index=3&type=section&id=About%20Par%20Pacific) Par Pacific Holdings, Inc. is a Houston-based energy company focused on providing renewable and conventional fuels to the western United States, operating refining capacity across four locations and an extensive energy infrastructure network It also holds a significant stake in a natural gas production company - Headquartered in Houston, Texas, Par Pacific Holdings, Inc. is a growing energy company providing both renewable and conventional fuels to the western United States[21](index=21&type=chunk) - Owns and operates **219,000 bpd** of combined refining capacity across four locations: Hawaii, the Pacific Northwest, and the Rockies[21](index=21&type=chunk) - Manages an extensive energy infrastructure network, including **13 million barrels of storage**, and marine, rail, rack, and pipeline assets[21](index=21&type=chunk) - Operates the Hele retail brand in Hawaii and the 'nomnom' convenience store chain in the Pacific Northwest[21](index=21&type=chunk) - Owns **46%** of Laramie Energy, LLC, a natural gas production company with operations concentrated in Western Colorado[21](index=21&type=chunk)[22](index=22&type=chunk) [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) Par Pacific scheduled a conference call for August 6, 2025, to discuss its Q2 2025 financial results, with details provided for live access and replay - A conference call is scheduled for Wednesday, August 6, 2025, at **9:00 a.m. Central Time (10:00 a.m. Eastern Time)**[20](index=20&type=chunk) - Access details for the call and webcast are provided, along with information for a telephone replay available until **August 20, 2025**[20](index=20&type=chunk) [Forward-Looking Statements & Contact](index=4&type=section&id=Forward-Looking%20Statements%20%26%20Contact) The report includes a standard disclaimer regarding forward-looking statements, outlining various risks and uncertainties that could cause actual results to differ materially Contact information for investor relations is also provided - The news release contains forward-looking statements subject to risks, trends, and uncertainties, including market conditions, operational disruptions, environmental risks, and political/regulatory changes[23](index=23&type=chunk) - Investors are cautioned not to place undue reliance on these statements, which are current only as of the report date, and the company does not intend to update or revise them[23](index=23&type=chunk) - Contact for Investor Relations & Sustainability: Ashimi Patel Vitter at **(832) 916-3355** or **apatel@parpacific.com**[24](index=24&type=chunk) [Financial Statements (GAAP)](index=5&type=section&id=Financial%20Statements%20(GAAP)) This section presents Par Pacific's condensed consolidated statements of operations and balance sheet data in accordance with GAAP for the reported periods [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The condensed consolidated statements of operations show a significant increase in operating income and net income for both the three and six months ended June 30, 2025, compared to the same periods in 2024, despite a decrease in total revenues | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Revenues | $1,893,438 | $2,017,468 | | Total operating expenses | $1,796,678 | $1,968,827 | | Operating income | $96,760 | $48,641 | | Total other expense, net | $(20,413) | $(23,336) | | Income before income taxes | $76,347 | $25,305 | | Income tax expense | $(16,887) | $(6,667) | | Net income | $59,460 | $18,638 | | Diluted Income per share | $1.17 | $0.32 | | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $3,638,474 | $3,998,303 | | Total operating expenses | $3,557,490 | $3,940,147 | | Operating income | $80,984 | $58,156 | | Total other expense, net | $(41,931) | $(39,233) | | Income before income taxes | $39,053 | $18,923 | | Income tax expense | $(9,993) | $(4,036) | | Net income | $29,060 | $14,887 | | Diluted Income per share | $0.55 | $0.25 | [Balance Sheet Data](index=5&type=section&id=Balance%20Sheet%20Data) As of June 30, 2025, Par Pacific maintained a healthy cash balance and managed its debt levels, though working capital and total stockholders' equity saw a decrease compared to December 31, 2024 | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $169,195 | $191,921 | | Working capital | $347,968 | $488,940 | | ABL Credit Facility | $485,000 | $483,000 | | Term debt | $640,653 | $644,233 | | Total debt | $1,112,473 | $1,112,967 | | Total stockholders' equity| $1,148,415 | $1,191,302 | [Operating Statistics](index=7&type=section&id=Operating%20Statistics) This section provides detailed operational metrics for Par Pacific's refining and retail segments, along with market indices and crude oil prices [Total Refining Segment Statistics](index=7&type=section&id=Total%20Refining%20Segment%20Statistics) The total refining segment saw increased throughput and refined product sales volumes in Q2 2025, alongside a significant improvement in Adjusted Gross Margin per barrel, despite a slight rise in production costs | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Feedstocks throughput (Mbpd)| 186.6 | 179.8 | +3.8% | | Refined product sales (Mbpd)| 204.5 | 191.2 | +6.9% | | Adjusted Gross Margin ($/bbl)| $13.65 | $10.79 | +26.5% | | Production costs ($/bbl) | $7.20 | $7.04 | +2.3% | | D&A per bbl ($/throughput bbl)| $1.47 | $1.33 | +10.5% | [Refinery Specific Operating Data](index=7&type=section&id=Refinery%20Specific%20Operating%20Data) Detailed operating statistics for individual refineries show varied performance, with Hawaii and Montana increasing throughput and improving production costs, while Wyoming's throughput decreased and production costs rose significantly Washington maintained throughput with a substantial increase in Adjusted Gross Margin | Refinery | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--------- | :-------------------------- | :------ | :------ | :----------- | | **Hawaii** | Feedstocks throughput (Mbpd)| 88.1 | 81.0 | +8.8% | | | Production costs ($/bbl) | $4.18 | $4.50 | -7.1% | | | Adjusted Gross Margin ($/bbl)| $10.18 | $10.07 | +1.1% | | **Montana**| Feedstocks Throughput (Mbpd)| 44.2 | 37.7 | +17.2% | | | Production costs ($/bbl) | $14.18 | $16.18 | -12.3% | | | Adjusted Gross Margin ($/bbl)| $22.30 | $16.89 | +32.0% | | **Washington**| Feedstocks throughput (Mbpd)| 40.8 | 41.2 | -1.0% | | | Production costs ($/bbl) | $3.73 | $3.66 | +1.9% | | | Adjusted Gross Margin ($/bbl)| $11.47 | $4.67 | +145.6% | | **Wyoming**| Feedstocks throughput (Mbpd)| 13.5 | 19.9 | -32.1% | | | Production costs ($/bbl) | $14.50 | $7.08 | +104.8% | | | Adjusted Gross Margin ($/bbl)| $18.57 | $14.74 | +26.0% | [Market Indices and Crude Oil Prices](index=8&type=section&id=Market%20Indices%20and%20Crude%20Oil%20Prices) Par Pacific's regional indices and market cracks generally improved in Q2 2025 compared to Q2 2024, indicating stronger market conditions for refined products, while benchmark crude oil prices (Brent and WTI) decreased | Index | Q2 2025 ($/bbl) | Q2 2024 ($/bbl) | Change (YoY) | | :---------------- | :-------------- | :-------------- | :----------- | | Hawaii Index | $8.57 | $7.41 | +15.6% | | Montana Index | $20.29 | $19.15 | +6.0% | | Washington Index | $15.37 | $7.25 | +112.0% | | Wyoming Index | $21.41 | $17.45 | +22.7% | | Combined Index | $13.76 | $10.95 | +25.7% | | Market Crack | Q2 2025 ($/bbl) | Q2 2024 ($/bbl) | Change (YoY) | | :----------------------- | :-------------- | :-------------- | :----------- | | Singapore 3.1.2 Product Crack | $13.56 | $12.49 | +8.6% | | Montana 6.3.2.1 Product Crack | $29.00 | $25.50 | +13.7% | | Washington 3.1.1.1 Product Crack| $24.16 | $15.76 | +53.3% | | Wyoming 2.1.1 Product Crack | $22.68 | $19.33 | +17.3% | | Crude Oil Price | Q2 2025 ($/bbl) | Q2 2024 ($/bbl) | Change (YoY) | | :---------------- | :-------------- | :-------------- | :----------- | | Brent | $66.71 | $85.03 | -21.5% | | WTI | $63.68 | $80.66 | -21.1% | - Beginning in 2025, new regional indices (Hawaii, Montana, Washington, Wyoming, Combined) and updated crude oil prices/differentials were established to better reflect key drivers impacting refinery financial performance and feedstock costs[30](index=30&type=chunk)[31](index=31&type=chunk)[37](index=37&type=chunk) [Retail Sales Volumes](index=9&type=section&id=Retail%20Sales%20Volumes) Retail sales volumes showed a modest increase for both the three and six months ended June 30, 2025, compared to the prior year | Metric | Q2 2025 (thousands of gallons) | Q2 2024 (thousands of gallons) | Change (YoY) | | :-------------------- | :----------------------------- | :----------------------------- | :----------- | | Retail sales volumes | 30,848 | 30,523 | +1.1% | | Metric | H1 2025 (thousands of gallons) | H1 2024 (thousands of gallons) | Change (YoY) | | :-------------------- | :----------------------------- | :----------------------------- | :----------- | | Retail sales volumes | 60,279 | 59,953 | +0.5% | [Non-GAAP Financial Measures & Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines and reconciles Par Pacific's non-GAAP financial measures, offering a clearer view of underlying operational performance [Non-GAAP Definitions and Rationale](index=10&type=section&id=Non-GAAP%20Definitions%20and%20Rationale) Par Pacific utilizes several non-GAAP financial measures, including Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA, to provide investors with a clearer view of operational performance by excluding volatile commodity prices, non-cash items, and certain non-operating expenses Definitions and calculation methodologies have been updated for improved comparability - Non-GAAP measures are used to evaluate operating performance and allocate resources, providing supplemental information to GAAP measures[32](index=32&type=chunk) - Adjusted Gross Margin eliminates the gross impact of volatile commodity prices and adjusts for certain non-cash items and timing differences to demonstrate earnings potential[33](index=33&type=chunk) - Adjusted Net Income (Loss) and Adjusted EBITDA assess financial performance without regard to financing methods, capital structure, or historical cost basis[34](index=34&type=chunk) - Effective Q1 2024, Adjusted Net Income (loss) excludes other non-operating income and expenses for better comparability[35](index=35&type=chunk) - Effective Q4 2024, definitions of Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA were modified to align accounting treatment for deferred turnaround costs from refining and logistics investments[36](index=36&type=chunk) [Adjusted Gross Margin Reconciliation](index=11&type=section&id=Adjusted%20Gross%20Margin%20Reconciliation) Reconciliations show how Adjusted Gross Margin is derived from Operating Income for the Refining, Logistics, and Retail segments, highlighting adjustments for operating expenses, D&A, inventory valuation, and unrealized gains/losses on derivatives | Metric (in thousands) | Refining (Q2 2025) | Logistics (Q2 2025) | Retail (Q2 2025) | | :-------------------------------- | :------------------- | :------------------ | :--------------- | | Operating income | $81,320 | $23,741 | $20,793 | | Operating expense (excl. D&A) | $123,597 | $4,797 | $20,286 | | Depreciation and amortization | $24,919 | $6,530 | $2,510 | | Inventory valuation adjustment | $28,530 | — | — | | Unrealized gain on commodity derivatives| $(28,815) | — | — | | **Adjusted Gross Margin** | **$231,780** | **$34,402** | **$43,589** | | Metric (in thousands) | Refining (Q2 2024) | Logistics (Q2 2024) | Retail (Q2 2024) | | :-------------------------------- | :------------------- | :------------------ | :--------------- | | Operating income | $41,206 | $18,041 | $16,053 | | Operating expense (excl. D&A) | $116,509 | $4,701 | $22,870 | | Depreciation and amortization | $21,691 | $7,193 | $2,675 | | Inventory valuation adjustment | $(21,101) | — | — | | Unrealized loss on commodity derivatives| $21,141 | — | — | | **Adjusted Gross Margin** | **$176,603** | **$30,759** | **$41,598** | [Adjusted Net Income (Loss) and Adjusted EBITDA Reconciliation](index=14&type=section&id=Adjusted%20Net%20Income%20(Loss)%20and%20Adjusted%20EBITDA%20Reconciliation) The reconciliation tables demonstrate the calculation of Adjusted Net Income and Adjusted EBITDA from GAAP Net Income, adjusting for various non-cash items, non-operating expenses, and timing differences to provide a clearer view of core profitability | Metric (in thousands) | Q2 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | | Net income | $59,460 | $18,638 | | Inventory valuation adjustment | $28,530 | $(21,101)| | Unrealized loss (gain) on derivatives| $(28,166)| $21,104 | | Par West redevelopment and other costs| $4,690 | $3,071 | | Changes in valuation allowance and other deferred tax items| $15,473 | $6,162 | | **Adjusted Net Income** | **$78,291**| **$28,544**| | Depreciation and amortization | $34,712 | $32,144 | | Interest expense and financing costs, net| $21,457 | $20,471 | | **Adjusted EBITDA** | **$137,829**| **$81,601**| | Metric (in thousands) | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | | Net income | $29,060 | $14,887 | | Inventory valuation adjustment | $16,843 | $(20,476)| | Unrealized loss (gain) on derivatives| $(37,523)| $64,952 | | Par West redevelopment and other costs| $8,672 | $5,042 | | Changes in valuation allowance and other deferred tax items| $8,579 | $3,531 | | **Adjusted Net Income** | **$27,970**| **$70,212**| | Depreciation and amortization | $71,298 | $64,800 | | Interest expense and financing costs, net| $43,220 | $39,199 | | **Adjusted EBITDA** | **$147,975**| **$176,299**| | Metric | Q2 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | | Basic Adjusted Net Income per share| $1.55 | $0.50 | | Diluted Adjusted Net Income per share| $1.54 | $0.49 | [Adjusted EBITDA by Segment Reconciliation](index=17&type=section&id=Adjusted%20EBITDA%20by%20Segment%20Reconciliation) Segment-specific Adjusted EBITDA reconciliations provide a detailed view of each segment's economic performance by adjusting operating income for D&A, inventory valuation, environmental obligations, and other non-operating items | Metric (in thousands) | Refining (Q2 2025) | Logistics (Q2 2025) | Retail (Q2 2025) | Corporate and Other (Q2 2025) | | :-------------------------------- | :------------------- | :------------------ | :--------------- | :---------------------------- | | Operating income (loss) by segment| $81,320 | $23,741 | $20,793 | $(29,094) | | Depreciation and amortization | $24,919 | $6,530 | $2,510 | $753 | | Inventory valuation adjustment | $28,530 | — | — | — | | Unrealized gain on commodity derivatives| $(28,815) | — | — | — | | Par West redevelopment and other costs| — | — | — | $4,690 | | **Adjusted EBITDA** | **$108,384** | **$29,798** | **$23,347** | **$(23,700)** | | Metric (in thousands) | Refining (Q2 2024) | Logistics (Q2 2024) | Retail (Q2 2024) | Corporate and Other (Q2 2024) | | :-------------------------------- | :------------------- | :------------------ | :--------------- | :---------------------------- | | Operating income (loss) by segment| $41,206 | $18,041 | $16,053 | $(26,659) | | Depreciation and amortization | $21,691 | $7,193 | $2,675 | $585 | | Inventory valuation adjustment | $(21,101) | — | — | — | | Unrealized loss on commodity derivatives| $21,141 | — | — | — | | Par West redevelopment and other costs| — | — | — | $3,071 | | **Adjusted EBITDA** | **$60,094** | **$26,058** | **$18,728** | **$(23,279)** | [Laramie Energy Adjusted EBITDAX Reconciliation](index=19&type=section&id=Laramie%20Energy%20Adjusted%20EBITDAX%20Reconciliation) The reconciliation for Laramie Energy's Adjusted EBITDAX from net income (loss) highlights adjustments for commodity derivatives, interest expense, and DDA, providing insight into the operational performance of the natural gas production company | Metric (in thousands) | Q2 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | | Net income (loss) | $527 | $(6,466)| | Commodity derivative (income) loss| $(3,356)| $(4,560)| | Gain (loss) on settled derivative instruments| $4,243 | $7,815 | | Interest expense and loan fees | $4,712 | $4,908 | | Depreciation, depletion, amortization, and accretion| $8,171 | $8,788 | | **Total Adjusted EBITDAX** | **$12,379**| **$10,024**| | Metric (in thousands) | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | | Net income (loss) | $(539) | $(57) |\ | Commodity derivative (income) loss| $6,501 | $(10,587)|\ | Gain (loss) on settled derivative instruments| $(1,455)| $8,636 |\ | Interest expense and loan fees | $9,323 | $10,038 |\n| Depreciation, depletion, amortization, and accretion| $15,970 | $16,555 |\ | **Total Adjusted EBITDAX** | **$26,464**| **$24,864**|

Core Insights - Par Petroleum (PARR) reported quarterly earnings of $1.54 per share, significantly exceeding the Zacks Consensus Estimate of $0.74 per share, and up from $0.49 per share a year ago, representing an earnings surprise of +108.11% [1] - The company achieved revenues of $1.89 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 17.17%, although this is a decrease from $2.02 billion in the same quarter last year [2] - Par Petroleum's stock has increased approximately 86.3% year-to-date, outperforming the S&P 500's gain of 7.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.07 on revenues of $1.73 billion, while for the current fiscal year, the estimate is $1.47 on revenues of $6.78 billion [7] - The earnings outlook will be influenced by management's commentary during the earnings call, which is crucial for assessing future stock performance [3][4] Industry Context - The Oil and Gas - Refining and Marketing industry, to which Par Petroleum belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, indicating potential challenges ahead [8] - Historical data suggests that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than a factor of 2 to 1, highlighting the importance of industry performance on individual stock outcomes [8]

Financial Performance - Par Pacific reported net income of $59.5 million, or $1.17 per diluted share, for Q2 2025, compared to $18.6 million, or $0.32 per diluted share, in Q2 2024 [2][10] - Adjusted Net Income for Q2 2025 was $78.3 million, up from $28.5 million in Q2 2024 [2] - Adjusted EBITDA for Q2 2025 was $137.8 million, a 69% increase from $81.6 million in Q2 2024 [2] Operational Highlights - The Refining segment reported operating income of $81.3 million in Q2 2025, compared to $41.2 million in Q2 2024 [4] - Adjusted Gross Margin for the Refining segment was $231.8 million in Q2 2025, up from $176.6 million in Q2 2024 [4] - Hawaii refinery achieved record throughput of 88 thousand barrels per day (Mbpd) in Q2 2025, compared to 81 Mbpd in Q2 2024 [10] Segment Performance - Hawaii Index averaged $8.57 per barrel in Q2 2025, compared to $7.41 per barrel in Q2 2024 [5][29] - Montana Index averaged $20.29 per barrel in Q2 2025, up from $19.15 per barrel in Q2 2024 [7][29] - Washington Index averaged $15.37 per barrel in Q2 2025, compared to $7.25 per barrel in Q2 2024 [9][29] - Wyoming Index averaged $21.41 per barrel in Q2 2025, up from $17.45 per barrel in Q2 2024 [12][29] Strategic Initiatives - Successful completion of the Montana turnaround and progress on the Hawaii SAF project [3] - Announcement of the Hawaii Renewables joint venture with expected cash proceeds of $100 million [10] - Opportunistic reduction of shares outstanding by 3% during the quarter, totaling 8% year-to-date [3] Liquidity and Capital Management - Net cash provided by operations totaled $133.6 million for Q2 2025, including working capital inflows of $122.9 million [17] - Total liquidity increased by 23% during the quarter to $647.0 million at June 30, 2025 [18] - Company repurchased $28 million of common stock at an average price of $17.36 per share during Q2 2025 [10][18]

Company Overview - Par Petroleum (PARR) is expected to report a year-over-year increase in earnings of +51% with an EPS of $0.74, despite a revenue decline of 19.9% to $1.62 billion for the quarter ended June 2025 [3][12] - The consensus EPS estimate has been revised 42.03% higher over the last 30 days, indicating a positive reassessment by analysts [4] Earnings Expectations - The upcoming earnings report is anticipated to be released on August 5, with stock movement likely depending on whether actual results exceed or fall short of expectations [2][12] - A positive Earnings ESP reading is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank of 1, 2, or 3 [10] Historical Performance - Par Petroleum has beaten consensus EPS estimates three out of the last four quarters, although it recently reported a loss of -$0.94 per share against an expected loss of -$0.77, resulting in a surprise of -22.08% [13][14] Industry Context - HF Sinclair (DINO), another player in the oil and gas refining and marketing industry, is expected to report an EPS of $1.09, reflecting a year-over-year change of +39.7%, with revenues projected at $7.2 billion, down 8.2% [18][19] - Similar to Par Petroleum, HF Sinclair has an Earnings ESP of 0% and a Zacks Rank of 3, making it difficult to predict an earnings beat [20]