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Par Pacific(PARR) - 2024 Q4 - Annual Report
PARRPar Pacific(PARR)2025-02-28 20:37
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Refining Operations - The company processed 186.7 Mbpd of crude oil and sold 199.9 Mbpd of refined products during the year ended December 31, 2024[29]. - The Hawaii refinery has a throughput capacity of 94 Mbpd and is uniquely configured to meet the demands of the Hawaii market[32]. - The Montana refinery has a throughput capacity of 63 Mbpd and processes low-cost Western Canadian and regional Rocky Mountain crude oil[34]. - The Washington refinery has a throughput capacity of 42 Mbpd and primarily markets its products in the Pacific Northwest[37]. - The Wyoming refinery has a throughput capacity of 20 Mbpd and produces gasoline, ULSD, and jet fuel[40]. - The company consumed approximately 187 Mbpd of crude oil during the refining process in 2024, with 4% internally consumed as fuel cost[352]. Financial Performance - A 1perbarrelchangeinaveragegrossrefiningmarginswouldchangeannualizedOperatingincomebyapproximately1 per barrel change in average gross refining margins would change annualized Operating income by approximately 67.2 million, based on a throughput of 187 Mbpd for the full year of 2024[349]. - A 1changeinthepriceofcrudeoilwouldresultina1 change in the price of crude oil would result in a 6.6 million change to the fair value of derivative instruments and Cost of revenues (excluding depreciation)[351]. - As of December 31, 2024, the company had 1.1billionofindebtednesssubjecttofloatinginterestrates,witha11.1 billion of indebtedness subject to floating interest rates, with a 1% increase in variable rates resulting in an increase of approximately 1.7 million in Cost of revenues and 11.2millioninInterestexpenseperyear[356].RegulatoryCompliance−Thecompanyisinsubstantialcompliancewithairpollutioncontrolrequirements,butongoingenforcementactivitiesbytheEPAmayresultinnewregulatoryandpermitrequirementsthatcouldinvolveadditionalcosts[93].−ThecompanybelievesithasnomaterialliabilityassociatedwithanySuperfundsiteandhasnotbeennotifiedofanyclaimsunderCERCLA[87].−ThecompanyissubjecttovariousfederalandstateregulationsregardingthepreventionofcrudeoilspillsandbelievescompliancewiththeOilPollutionActwillnothaveamaterialadverseeffect[88].−ThecompanyhasreceivedaletterfromtheEPAregardingallegedviolationsofairemissionslimitsunderaconsentdecree,whichmayinvolvefinancialpenaltiesorcapitalexpenditurerequirements[96].−ThecompanyisrequiredtocomplywiththeCleanWaterActandbelievesitisinsubstantialcompliancewiththeserequirements[89].EmployeeandSafetyInitiatives−Thecompanyhasinvestedinemployeebenefits,includingaretirementsavingsplanwithcompanymatchandextensivehealthandwellnessbenefits[105].−Thecompanyrecognizestheimportanceofsafetyandpromotesacultureofcontinuoussafetyimprovementacrossitsoperations[106].−AsofDecember31,2024,thecompanyemployed1,787employees,with403employees(2311.2 million in Interest expense per year[356]. Regulatory Compliance - The company is in substantial compliance with air pollution control requirements, but ongoing enforcement activities by the EPA may result in new regulatory and permit requirements that could involve additional costs[93]. - The company believes it has no material liability associated with any Superfund site and has not been notified of any claims under CERCLA[87]. - The company is subject to various federal and state regulations regarding the prevention of crude oil spills and believes compliance with the Oil Pollution Act will not have a material adverse effect[88]. - The company has received a letter from the EPA regarding alleged violations of air emissions limits under a consent decree, which may involve financial penalties or capital expenditure requirements[96]. - The company is required to comply with the Clean Water Act and believes it is in substantial compliance with these requirements[89]. Employee and Safety Initiatives - The company has invested in employee benefits, including a retirement savings plan with company match and extensive health and wellness benefits[105]. - The company recognizes the importance of safety and promotes a culture of continuous safety improvement across its operations[106]. - As of December 31, 2024, the company employed 1,787 employees, with 403 employees (23%) represented by the United Steelworkers Union[102]. - The refining and logistics segment employed 1,069 employees, while the retail segment had 532 employees and the corporate segment had 186 employees[102]. Market and Economic Conditions - Hawaii is projected to see a decrease of 0.6% in visitor arrivals in 2024, but an increase is expected in 2025, with a full recovery anticipated by 2027[54]. - The GDP for the State of Washington grew by 5.1% from 2023 to 2024, indicating strong economic performance[60]. - The average annual wage in Spokane, Washington, was 62,000 in the fourth quarter of 2023, indicating a robust job market[59]. - The unemployment rate in Hawaii was 3% for the first 10 months of 2024, which is 1% lower than the national average[57]. - Hawaii's construction industry reached a total value of 11.8billionin2023,witha14.811.8 billion in 2023, with a 14.8% increase to 6.5 billion in the first half of 2024 compared to the same period in 2023[55]. - Construction payroll jobs in Hawaii hit a record high of 43,300 in October 2024, with private building permits increasing by 28.6% in the first 10 months of 2024[56]. - South Dakota welcomed 14.9 million visitors in 2024, resulting in visitor spending of approximately 5.1billion,a2.85.1 billion, a 2.8% increase from 2023[61]. Investments and Equity - The balance of the investment in Laramie Energy was 12.5 million as of December 31, 2024, reflecting a significant equity investment[65]. - The company owns a 65% and a 40% equity investment in YELP and YPLC, respectively, as of December 31, 2024[66]. Environmental and Sustainability Efforts - The GHG emissions cap for the Hawaii refineries is set at 904,945 metric tons per year, which is 16% below the combined facility GHG emission levels of 2010[72]. - The RFS requires an increasing amount of renewable fuel to be blended into the nation's transportation fuel supply, which may reduce demand for refined transportation fuel products[77]. - The company is exposed to market risks related to the volatility in the price of RINs required to comply with the Renewable Fuel Standard, impacting revenues and costs[353]. - The company may purchase compliance credits to mitigate risks related to the Washington Climate Commitment Act and Clean Fuel Standard, based on greenhouse gas emissions[355]. - The company utilizes exchange-traded futures, options, and OTC swaps to manage commodity price risks, with open positions expiring in December 2025[350]. - The company closely monitors the creditworthiness of customers to mitigate credit risk associated with nonpayment or nonperformance[358].