Par Pacific(PARR) - 2020 Q2 - Quarterly Report

Financial Performance - For Q2 2020, the company reported a net loss of $40.6 million, a significant decline from a net income of $28.2 million in Q2 2019, reflecting a decrease of 243%[199]. - Adjusted EBITDA for Q2 2020 was a loss of $50.3 million, compared to earnings of $68.5 million in Q2 2019, indicating a decline of 173.5%[200]. - Revenues for Q2 2020 were $515.3 million, down 63% from $1.41 billion in Q2 2019, primarily due to lower refining sales volumes related to COVID-19[207]. - For the first half of 2020, net income decreased to a loss of $262.9 million from a profit of $89.3 million in the same period of 2019, a decline of 394%[202]. - Adjusted EBITDA for the first half of 2020 was a loss of $36.7 million, compared to earnings of $119.0 million in the first half of 2019, a decrease of 130.8%[203]. - Operating income for Q2 2020 was a loss of $25.4 million, compared to an operating income of $48.6 million in Q2 2019[207]. - Total revenues for the three months ended June 30, 2020, were $1,409,409 million, a decrease from $1,347,557 million in the same period of 2019[210]. - Operating income for the six months ended June 30, 2020, was a loss of $206,616 million, compared to a profit of $70,044 million for the same period in 2019[211]. - The company reported a net loss of $(40,560) thousand for the three months ended June 30, 2020, compared to a net income of $28,169 thousand in 2019[226]. - Adjusted Net Income (Loss) for the three months ended June 30, 2020, was $(90,760) thousand, compared to $22,403 thousand in 2019, indicating a significant decline[226]. Impairments and Charges - The company experienced goodwill impairments of $67.9 million and an other-than-temporary impairment of $45.3 million related to its equity investment in Laramie Energy during the first half of 2020[202]. - The company reported an impairment expense of $67,922 million for the six months ended June 30, 2020, which was not present in the same period of 2019[211]. - The company incurred an impairment expense of $38,105 thousand for the six months ended June 30, 2020, which was not present in the same period in 2019[222]. - Goodwill impairment charges of $67.9 million were recorded in the first half of 2020, affecting both refining and retail segments[256]. Sales and Production - Feedstocks throughput for the refining segment decreased to 115.5 Mbpd in Q2 2020 from 172.9 Mbpd in Q2 2019, representing a decline of approximately 33%[213]. - Total refined product sales volume for the refining segment was 119.3 Mbpd in Q2 2020, down from 176.4 Mbpd in Q2 2019, indicating a decrease of about 32%[213]. - The company experienced a significant reduction in on-island sales volume, which fell to 69.1 Mbpd in Q2 2020 from 113.5 Mbpd in Q2 2019[213]. - Retail sales volumes for the three months ended June 30, 2020, decreased to 22,586 thousand gallons from 31,810 thousand gallons in 2019, representing a decline of approximately 29%[217]. Cost and Margins - Adjusted gross margin per barrel for the refining segment was $(6.96) in Q2 2020, down from $3.46 in Q2 2019[213]. - Adjusted Gross Margin for the refining segment for the three months ended June 30, 2020, was $(22,338) thousand, compared to $98,181 thousand for the same period in 2019, indicating a significant decrease[222]. - The company's operating income (loss) for the refining segment for the six months ended June 30, 2020, was $(205,327) thousand, compared to $47,548 thousand in 2019, reflecting a decline of over 530%[222]. - Production costs per barrel increased to $4.45 in Q2 2020 from $2.82 in Q2 2019, reflecting a rise of approximately 58%[213]. Liquidity and Financing - The company has taken measures to address liquidity, including deferring capital expenditures and issuing $105 million in senior secured notes due 2026[196]. - The company’s liquidity position as of June 30, 2020 was $203.8 million, consisting of $198.5 million at Par Petroleum, LLC and subsidiaries[282]. - The company had access to $142.9 million in cash on hand as of June 30, 2020, along with various credit facilities[283]. - Interest expense and financing costs for the six months ended June 30, 2020, were $35.1 million, a decrease of $3.9 million compared to $39.0 million for the same period in 2019[259]. Market Conditions - The ongoing COVID-19 pandemic has caused significant disruptions, with mandatory self-quarantine orders affecting operations in Hawaii and Washington[198]. - Average Brent crude oil prices dropped from $68.47 per barrel in Q2 2019 to $33.39 per barrel in Q2 2020, while WTI prices fell from $59.91 to $28.00 per barrel in the same period[241]. - A $1 change in the price of crude oil would result in a change of approximately $0.4 million to the fair value of derivative instruments and cost of revenues[302]. Future Outlook - The company plans to continue focusing on market expansion and new product development to improve future performance[214]. - The company may seek to raise additional debt or equity capital to fund significant changes to its business or refinance existing debt[284]. - The company’s capital expenditure budget for 2020 ranges from $95 million to $110 million, focusing on various projects including a Washington renewables project[290].