- Net Income of
$30 .0 million, or$0.49 per diluted share - Adjusted Net Income of
$105.6 million , or$1.73 per diluted share - Adjusted EBITDA of
$150.8 million - Exceptional operational and financial results from Billings in the first month after closing
“We closed the Billings acquisition on
Refining
The Refining segment reported operating income of
Refining segment Adjusted EBITDA was
The 3-1-2 Singapore Crack Spread was
The
Since our acquisition of the
The
The RVO Adjusted
The
The RVO Adjusted USGC 3-2-1 Index averaged
The Wyoming refinery's Adjusted Gross Margin was
Retail
The Retail segment reported operating income of
Retail segment Adjusted EBITDA was
Logistics
The Logistics segment reported operating income of
Logistics segment Adjusted EBITDA was
Liquidity
Net cash provided by operations totaled
At
Conference Call Information
A conference call is scheduled for
About
Forward-Looking Statements
This news release (and oral statements regarding the subject matter of this news release, including those made on the conference call and webcast announced herein) includes certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements include, without limitation, statements about: expected market conditions; anticipated free cash flows; anticipated refinery throughput; anticipated cost savings; anticipated capital expenditures, including major maintenance costs, and their effect on our financial and operating results, including earnings per share and free cash flow; anticipated retail sales volumes and on-island sales; the anticipated financial and operational results of
Contact:
Ashimi Patel
Director, Investor Relations
(832) 916-3355
apatel@parpacific.com
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share data)
| Three Months Ended |
Six Months Ended |
||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenues | $ | 1,783,927 | $ | 2,106,332 | $ | 3,469,136 | $ | 3,456,625 | |||||||
| Operating expenses | |||||||||||||||
| Cost of revenues (excluding depreciation) | 1,574,806 | 1,808,925 | 2,863,826 | 3,159,174 | |||||||||||
| Operating expense (excluding depreciation) | 101,843 | 80,865 | 184,963 | 160,881 | |||||||||||
| Depreciation and amortization | 28,216 | 25,583 | 52,576 | 49,363 | |||||||||||
| Loss on sale of assets, net | — | 15 | — | 15 | |||||||||||
| General and administrative expense (excluding depreciation) | 23,168 | 15,438 | 42,454 | 31,331 | |||||||||||
| Equity (earnings) from refining and logistics investments | (425 | ) | — | (425 | ) | — | |||||||||
| Acquisition and integration costs | 7,273 | — | 12,544 | 63 | |||||||||||
| Par West redevelopment and other costs | 2,613 | 1,477 | 5,363 | 2,865 | |||||||||||
| Total operating expenses | 1,737,494 | 1,932,303 | 3,161,301 | 3,403,692 | |||||||||||
| Operating income | 46,433 | 174,029 | 307,835 | 52,933 | |||||||||||
| Other income (expense) | |||||||||||||||
| Interest expense and financing costs, net | (14,909 | ) | (18,154 | ) | (31,159 | ) | (34,548 | ) | |||||||
| Debt extinguishment and commitment costs | 38 | (5,672 | ) | (17,682 | ) | (5,672 | ) | ||||||||
| Other income, net | 379 | 47 | 344 | 49 | |||||||||||
| Equity earnings from |
— | — | 10,706 | — | |||||||||||
| Total other expense, net | (14,492 | ) | (23,779 | ) | (37,791 | ) | (40,171 | ) | |||||||
| Income before income taxes | 31,941 | 150,250 | 270,044 | 12,762 | |||||||||||
| Income tax expense | (1,928 | ) | (1,125 | ) | (2,141 | ) | (688 | ) | |||||||
| Net income | $ | 30,013 | $ | 149,125 | $ | 267,903 | $ | 12,074 | |||||||
| Weighted-average shares outstanding | |||||||||||||||
| Basic | 60,399 | 59,479 | 60,255 | 59,449 | |||||||||||
| Diluted | 60,993 | 59,642 | 61,020 | 59,644 | |||||||||||
| Income per share | |||||||||||||||
| Basic | $ | 0.50 | $ | 2.51 | $ | 4.45 | $ | 0.20 | |||||||
| Diluted | $ | 0.49 | $ | 2.50 | $ | 4.39 | $ | 0.20 | |||||||
Balance Sheet Data
(Unaudited)
(in thousands)
| Balance Sheet Data | |||||||
| Cash and cash equivalents | $ | 190,951 | $ | 490,925 | |||
| Debt, including current portion | 579,115 | 505,532 | |||||
| Total stockholders’ equity | 919,311 | 644,537 | |||||
Operating Statistics
The following table summarizes key operational data:
| Three Months Ended |
Six Months Ended |
||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Total Refining Segment | |||||||||||||||
| Feedstocks throughput (Mbpd) (1) | 162.3 | 141.3 | 147.7 | 129.8 | |||||||||||
| Refined product sales volume (Mbpd) (1) | 168.8 | 143.4 | 159.1 | 133.0 | |||||||||||
| Feedstocks throughput (Mbpd) | 84.1 | 84.1 | 80.2 | 83.4 | |||||||||||
| Yield (% of total throughput) | |||||||||||||||
| Gasoline and gasoline blendstocks | 26.8 | % | 22.9 | % | 26.8 | % | 24.0 | % | |||||||
| Distillates | 41.0 | % | 38.0 | % | 40.1 | % | 39.6 | % | |||||||
| Fuel oils | 28.2 | % | 33.6 | % | 28.8 | % | 31.5 | % | |||||||
| Other products | 0.8 | % | 2.4 | % | 1.2 | % | 1.4 | % | |||||||
| Total yield | 96.8 | % | 96.9 | % | 96.9 | % | 96.5 | % | |||||||
| Refined product sales volume (Mbpd) | 87.2 | 80.2 | 88.8 | 79.2 | |||||||||||
| Adjusted Gross Margin per bbl ($/throughput bbl) (2) | $ | 12.08 | $ | 18.71 | $ | 15.41 | $ | 11.22 | |||||||
| Production costs per bbl ($/throughput bbl) (3) | 4.33 | 4.50 | 4.43 | 4.45 | |||||||||||
| D&A per bbl ($/throughput bbl) | 0.67 | 0.66 | 0.70 | 0.66 | |||||||||||
| Feedstocks Throughput (Mbpd) (1) | 62.6 | — | 62.6 | — | |||||||||||
| Yield (% of total throughput) | |||||||||||||||
| Gasoline and gasoline blendstocks | 46.3 | % | — | % | 46.3 | % | — | % | |||||||
| Distillates | 29.3 | % | — | % | 29.3 | % | — | % | |||||||
| Asphalt | 13.3 | % | — | % | 13.3 | % | — | % | |||||||
| Other products | 6.1 | % | — | % | 6.1 | % | — | % | |||||||
| Total yield | 95.0 | % | — | % | 95.0 | % | — | % | |||||||
| Refined product sales volume (Mbpd) (1) | 59.3 | — | 59.3 | — | |||||||||||
| Adjusted Gross Margin per bbl ($/throughput bbl) (2) | 30.98 | — | 30.98 | — | |||||||||||
| Production costs per bbl ($/throughput bbl) (3) | 8.07 | — | 8.07 | — | |||||||||||
| D&A per bbl ($/throughput bbl) | $ | 1.85 | $ | — | $ | 1.85 | $ | — | |||||||
| Three Months Ended |
Six Months Ended |
||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Feedstocks throughput (Mbpd) | 40.9 | 40.5 | 40.3 | 30.4 | |||||||||||
| Yield (% of total throughput) | |||||||||||||||
| Gasoline and gasoline blendstocks | 24.0 | % | 24.2 | % | 23.8 | % | 24.4 | % | |||||||
| Distillate | 34.8 | % | 34.4 | % | 34.6 | % | 34.1 | % | |||||||
| Asphalt | 19.5 | % | 20.8 | % | 19.0 | % | 19.7 | % | |||||||
| Other products | 18.3 | % | 17.4 | % | 18.7 | % | 18.6 | % | |||||||
| Total yield | 96.6 | % | 96.8 | % | 96.1 | % | 96.8 | % | |||||||
| Refined product sales volume (Mbpd) | 44.8 | 44.6 | 42.8 | 37.1 | |||||||||||
| Adjusted Gross Margin per bbl ($/throughput bbl) (2) | $ | 6.37 | $ | 20.50 | $ | 8.66 | $ | 14.17 | |||||||
| Production costs per bbl ($/throughput bbl) (3) | 3.98 | 3.40 | 4.11 | 4.71 | |||||||||||
| D&A per bbl ($/throughput bbl) | 1.82 | 2.03 | 1.81 | 2.45 | |||||||||||
| Feedstocks throughput (Mbpd) | 16.7 | 16.7 | 16.8 | 16.0 | |||||||||||
| Yield (% of total throughput) | |||||||||||||||
| Gasoline and gasoline blendstocks | 43.7 | % | 48.1 | % | 45.6 | % | 49.1 | % | |||||||
| Distillate | 48.7 | % | 43.6 | % | 47.3 | % | 43.4 | % | |||||||
| Fuel oils | 2.6 | % | 2.2 | % | 2.5 | % | 2.3 | % | |||||||
| Other products | 2.5 | % | 3.4 | % | 1.7 | % | 2.5 | % | |||||||
| Total yield | 97.5 | % | 97.3 | % | 97.1 | % | 97.3 | % | |||||||
| Refined product sales volume (Mbpd) | 17.3 | 18.6 | 17.7 | 16.7 | |||||||||||
| Adjusted Gross Margin per bbl ($/throughput bbl) (2) | $ | 20.56 | $ | 43.34 | $ | 24.05 | $ | 34.97 | |||||||
| Production costs per bbl ($/throughput bbl) (3) | 8.30 | 6.97 | 7.85 | 7.46 | |||||||||||
| D&A per bbl ($/throughput bbl) | 2.93 | 2.92 | 2.85 | 3.07 | |||||||||||
| Market Indices ($ per barrel) | |||||||||||||||
| 3-1-2 Singapore Crack Spread (4) | $ | 13.72 | $ | 36.80 | $ | 17.45 | $ | 26.56 | |||||||
| RVO Adj. |
25.13 | 47.23 | 25.21 | 35.01 | |||||||||||
| RVO Adj. USGC 3-2-1 Index (6) | 21.65 | 42.24 | 24.09 | 30.31 | |||||||||||
| Crude Oil Prices ($ per barrel) | |||||||||||||||
| Brent | $ | 77.73 | $ | 111.98 | $ | 79.90 | $ | 104.98 | |||||||
| WTI | 73.56 | 108.52 | 74.77 | 101.80 | |||||||||||
| ANS (7) | 78.26 | 112.17 | 78.63 | 104.19 | |||||||||||
|
|
75.37 | 109.80 | 77.25 | 102.86 | |||||||||||
| WCS Hardisty (7) | 60.07 | 90.25 | 58.38 | 85.10 | |||||||||||
| Brent M1-M3 | 0.44 | 4.23 | 0.48 | 4.18 | |||||||||||
| Retail Segment | |||||||||||||||
| Retail sales volumes (thousands of gallons) | 29,373 | 25,862 | 56,572 | 50,770 | |||||||||||
________________________________________
(1) Feedstocks throughput and sales volumes per day for the
(2) We calculate Adjusted Gross Margin per barrel by dividing Adjusted Gross Margin by total refining throughput. Adjusted Gross Margin for our
(3) Management uses production costs per barrel to evaluate performance and compare efficiency to other companies in the industry. There are a variety of ways to calculate production costs per barrel; different companies within the industry calculate it in different ways. We calculate production costs per barrel by dividing all direct production costs, which include the costs to run the refineries including personnel costs, repair and maintenance costs, insurance, utilities, and other miscellaneous costs, by total refining throughput. Our production costs are included in Operating expense (excluding depreciation) on our consolidated statement of operations, which also includes costs related to our bulk marketing operations.
(4) We believe the 3-1-2 Singapore Crack Spread (or three barrels of Brent crude oil converted into one barrel of gasoline and two barrels of distillates (diesel and jet fuel)) is the most representative market indicator for our operations in
(5) We believe the RVO Adjusted
(6) We believe the RVO Adjusted USGC 3-2-1 (or three barrels of WTI crude oil converted into two barrels of USGC gasoline and one barrel of USGC ULSD, less 100% of the RVO cost) is the most representative market indicator for our operations in
(7) Crude pricing has been updated to reflect simple averages of outright prices during the relevant period.
Non-GAAP Performance Measures
Management uses certain financial measures to evaluate our operating performance that are considered non-GAAP financial measures. These measures should not be considered in isolation or as substitutes or alternatives to their most directly comparable GAAP financial measures or any other measure of financial performance or liquidity presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures used by other companies since each company may define these terms differently.
We believe Adjusted Gross Margin (as defined below) provides useful information to investors because it eliminates the gross impact of volatile commodity prices and adjusts for certain non-cash items and timing differences created by our inventory financing agreements and lower of cost and net realizable value adjustments to demonstrate the earnings potential of the business before other fixed and variable costs, which are reported separately in Operating expense (excluding depreciation) and Depreciation and amortization. Management uses Adjusted Gross Margin per barrel to evaluate operating performance and compare profitability to other companies in the industry and to industry benchmarks. We believe Adjusted Net Income (Loss) and Adjusted EBITDA (as defined below) are useful supplemental financial measures that allow investors to assess the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis, the ability of our assets to generate cash to pay interest on our indebtedness, and our operating performance and return on invested capital as compared to other companies without regard to financing methods and capital structure. We believe Adjusted EBITDA by segment (as defined below) is a useful supplemental financial measure to evaluate the economic performance of our segments without regard to financing methods, capital structure, or historical cost basis.
Beginning with financial results reported for periods in fiscal year 2023, Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA also exclude the mark-to-market losses (gains) associated with our net obligation related to the Washington Climate Commitment Act and Clean Fuel Standard effective beginning in 2023. These modifications were made to better reflect our operating performance and to improve comparability between periods.
Beginning with financial results reported for periods in fiscal year 2023, Adjusted Net Income (loss) and Adjusted EBITDA also exclude the redevelopment and other costs for our Par West facility, which was shut down in 2020. This modification improves comparability between periods by excluding expenses incurred in connection with the strategic redevelopment of this non-operating facility. We have recast Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA for prior periods when reported to conform to the modified presentation.
Beginning with financial results report for the second quarter of 2023, Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA also exclude our portion of interest, taxes, and depreciation expense from our refining and logistics investments.
Adjusted Gross Margin
Adjusted Gross Margin is defined as operating income (loss) excluding:
| • | operating expense (excluding depreciation); | |
| • | depreciation and amortization (“D&A”); | |
| • | impairment expense; | |
| • | loss (gain) on sale of assets, net; | |
| • | inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, contango (gains) and backwardation losses associated with our |
|
| • | LIFO layer liquidation impacts associated with our |
|
| • | Environmental obligation mark-to-market adjustments (which represents the income statement effect of reflecting our Renewable Identification Numbers (“RINs”) liability on a net basis; this adjustment also includes the mark-to-market losses (gains) associated with our net RINs liability; beginning with the first quarter of 2023, this also includes our mark-to-market losses (gains) associated with our net obligation associated with the Washington Climate Commitment Act and Clean Fuel Standard); | |
| • | unrealized loss (gain) on derivatives. | |
| • | Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments |
The following tables present a reconciliation of Adjusted Gross Margin to the most directly comparable GAAP financial measure, operating income (loss), on a historical basis, for selected segments, for the periods indicated (in thousands):
| Three months ended |
Refining | Logistics | Retail | ||||||||
| Operating income | $ | 44,139 | $ | 20,691 | $ | 15,220 | |||||
| Operating expense (excluding depreciation) | 76,971 | 3,596 | 21,276 | ||||||||
| Depreciation and amortization | 19,826 | 5,059 | 2,732 | ||||||||
| Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments | — | 207 | — | ||||||||
| Inventory valuation adjustment | 33,118 | — | — | ||||||||
| Environmental obligation mark-to-market adjustments | 9,343 | — | — | ||||||||
| Unrealized loss on derivatives | 22,178 | — | — | ||||||||
| Adjusted Gross Margin (1) (2) | $ | 205,575 | $ | 29,553 | $ | 39,228 | |||||
| Three months ended |
Refining | Logistics | Retail | ||||||||
| Operating income | $ | 168,798 | $ | 15,898 | $ | 5,525 | |||||
| Operating expense (excluding depreciation) | 59,101 | 3,797 | 19,444 | ||||||||
| Depreciation and amortization | 16,979 | 5,211 | 2,600 | ||||||||
| Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments | — | — | — | ||||||||
| Gain on sale of assets, net | — | (12 | ) | — | |||||||
| Inventory valuation adjustment | (7,557 | ) | — | — | |||||||
| Environmental obligation mark-to-market adjustments | 78,548 | — | — | ||||||||
| Unrealized gain on derivatives | (28,607 | ) | — | — | |||||||
| Adjusted Gross Margin (1) | $ | 287,262 | $ | 24,894 | $ | 27,569 | |||||
| Six Months Ended June 30, 2023 | Refining | Logistics | Retail | ||||||||
| Operating income | $ | 307,276 | $ | 33,299 | $ | 28,694 | |||||
| Operating expense (excluding depreciation) | 135,853 | 7,043 | 42,067 | ||||||||
| Depreciation and amortization | 35,549 | 10,093 | 5,811 | ||||||||
| Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments | — | 207 | — | ||||||||
| Inventory valuation adjustment | 53,976 | — | — | ||||||||
| Environmental obligation mark-to-market adjustments | (123,958 | ) | — | — | |||||||
| Unrealized loss on derivatives | 8,508 | — | — | ||||||||
| Adjusted Gross Margin (1) (2) | $ | 417,204 | $ | 50,642 | $ | 76,572 | |||||
| Six Months Ended June 30, 2022 | Refining | Logistics | Retail | ||||||||
| Operating income | $ | 50,473 | $ | 25,750 | $ | 9,570 | |||||
| Operating expense (excluding depreciation) | 117,401 | 7,570 | 38,775 | ||||||||
| Depreciation and amortization | 32,312 | 10,298 | 5,291 | ||||||||
| Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments | — | — | — | ||||||||
| Gain on sale of assets, net | — | (12 | ) | — | |||||||
| Inventory valuation adjustment | 73,096 | — | — | ||||||||
| Environmental obligation mark-to-market adjustments | 89,850 | — | — | ||||||||
| Unrealized gain on derivatives | (13,155 | ) | — | — | |||||||
| Adjusted Gross Margin (1) | $ | 349,977 | $ | 43,606 | $ | 53,636 | |||||
________________________________________
(1) There was no LIFO liquidation adjustment or impairment expense for the three and six months ended
(2) There was no (gain) loss on sale of assets for the three and six months ended
Adjusted Net Income (Loss) and Adjusted EBITDA
Adjusted Net Income (Loss) is defined as Net income (loss) excluding:
| • | inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, contango (gains) and backwardation losses associated with our |
|
| • | the LIFO layer liquidation impacts associated with our |
|
| • | Environmental obligation mark-to-market adjustments (which represents the income statement effect of reflecting our Renewable Identification Numbers (“RINs”) liability on a net basis; this adjustment also includes the mark-to-market losses (gains) associated with our net RINs liability; beginning with the first quarter of 2023, this also includes our mark-to-market losses (gains) associated with our net obligation associated with the Washington Climate Commitment Act and Clean Fuel Standard); | |
| • | unrealized (gain) loss on derivatives; | |
| • | acquisition and integration costs; | |
| • | redevelopment and other costs related to Par West; | |
| • | debt extinguishment and commitment costs; | |
| • | increase in (release of) tax valuation allowance and other deferred tax items; | |
| • | changes in the value of contingent consideration and common stock warrants; | |
| • | severance costs; | |
| • | (gain) loss on sale of assets; | |
| • | impairment expense; | |
| • | impairment expense associated with our investment in Laramie Energy and our share of Laramie Energy’s asset impairment losses in excess of our basis difference; and | |
| • | Par’s share of Laramie Energy’s unrealized loss (gain) on derivatives. |
Adjusted EBITDA is defined as Adjusted Net Income (Loss) excluding:
| • | D&A; | |
| • | interest expense and financing costs; | |
| • | equity losses (earnings) from Laramie Energy excluding Par’s share of unrealized loss (gain) on derivatives, impairment of Par’s investment, and our share of Laramie Energy’s asset impairment losses in excess of our basis difference; | |
| • | Par's portion of interest, taxes, and depreciation expense from refining and logistics investments; and | |
| • | income tax expense (benefit) excluding the increase in (release of) tax valuation allowance. |
The following table presents a reconciliation of Adjusted Net Income (Loss) and Adjusted EBITDA to the most directly comparable GAAP financial measure, net income (loss), on a historical basis for the periods indicated (in thousands):
| Three Months Ended |
Six Months Ended |
||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income | $ | 30,013 | $ | 149,125 | $ | 267,903 | $ | 12,074 | |||||||
| Inventory valuation adjustment | 33,118 | (7,557 | ) | 53,976 | 73,096 | ||||||||||
| Environmental obligation mark-to-market adjustments | 9,343 | 78,548 | (123,958 | ) | 89,850 | ||||||||||
| Unrealized loss (gain) on derivatives | 22,178 | (28,607 | ) | 8,508 | (13,155 | ) | |||||||||
| Acquisition and integration costs | 7,273 | — | 12,544 | 63 | |||||||||||
| Par West redevelopment and other costs | 2,613 | — | 5,363 | — | |||||||||||
| Debt extinguishment and commitment costs | (38 | ) | 5,672 | 17,682 | 5,672 | ||||||||||
| Severance costs | 1,070 | 35 | 1,070 | 2,263 | |||||||||||
| Loss on sale of assets, net | — | 15 | — | 15 | |||||||||||
| Adjusted Net Income | 105,570 | 197,231 | 243,088 | 169,878 | |||||||||||
| Depreciation and amortization | 28,216 | 25,583 | 52,576 | 49,363 | |||||||||||
| Interest expense and financing costs, net | 14,909 | 18,154 | 31,159 | 34,548 | |||||||||||
| Equity losses (earnings) from |
— | — | (10,706 | ) | — | ||||||||||
| Par's portion of interest, taxes, and depreciation expense from refining and logistics investments | 207 | — | 207 | — | |||||||||||
| Income tax expense | 1,928 | 1,125 | 2,141 | 688 | |||||||||||
| Adjusted EBITDA (1) | $ | 150,830 | $ | 242,093 | $ | 318,465 | $ | 254,477 | |||||||
___________________________________
(1) For the three and six months ended
The following table sets forth the computation of basic and diluted Adjusted Net Income (Loss) per share (in thousands, except per share amounts):
| Three Months Ended |
Six Months Ended |
||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Adjusted Net Income | $ | 105,570 | $ | 197,231 | $ | 243,088 | $ | 169,878 | |||||||
| Plus: effect of convertible securities | — | — | — | — | |||||||||||
| Numerator for diluted income per common share | $ | 105,570 | $ | 197,231 | $ | 243,088 | $ | 169,878 | |||||||
| Basic weighted-average common stock shares outstanding | 60,399 | 59,479 | 60,255 | 59,449 | |||||||||||
| Add dilutive effects of common stock equivalents | 594 | 163 | 765 | 195 | |||||||||||
| Diluted weighted-average common stock shares outstanding | 60,993 | 59,642 | 61,020 | 59,644 | |||||||||||
| Basic Adjusted Net Income per common share | $ | 1.75 | $ | 3.32 | $ | 4.03 | $ | 2.86 | |||||||
| Diluted Adjusted Net Income per common share | $ | 1.73 | $ | 3.31 | $ | 3.98 | $ | 2.85 | |||||||
Adjusted EBITDA by Segment
Adjusted EBITDA by segment is defined as Operating income (loss) excluding:
| • | D&A; | |
| • | inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, contango (gains) and backwardation losses associated with our |
|
| • | the LIFO layer liquidation impacts associated with our |
|
| • | Environmental obligation mark-to-market adjustments (which represents the income statement effect of reflecting our Renewable Identification Numbers (“RINs”) liability on a net basis; this adjustment also includes the mark-to-market losses (gains) associated with our net RINs liability; beginning with the first quarter of 2023, this also includes our mark-to-market losses (gains) associated with our net obligation associated with the Washington Climate Commitment Act and Clean Fuel Standard); | |
| • | unrealized (gain) loss on derivatives; | |
| • | acquisition and integration costs; | |
| • | redevelopment and other costs related to Par West; | |
| • | severance costs; | |
| • | (gain) loss on sale of assets; | |
| • | impairment expense; and | |
| • | Par's portion of interest, taxes, and depreciation expense from refining and logistics investments |
Adjusted EBITDA by segment also includes Gain on curtailment of pension obligation and Other income (loss), net, which are presented below operating income (loss) on our condensed consolidated statements of operations.
The following table presents a reconciliation of Adjusted EBITDA by segment to the most directly comparable GAAP financial measure, operating income (loss) by segment, on a historical basis, for selected segments, for the periods indicated (in thousands):
| Three Months Ended |
|||||||||||||||
| Refining | Logistics | Retail | Corporate and Other | ||||||||||||
| Operating income (loss) by segment | $ | 44,139 | $ | 20,691 | $ | 15,220 | $ | (33,617 | ) | ||||||
| Depreciation and amortization | 19,826 | 5,059 | 2,732 | 599 | |||||||||||
| Inventory valuation adjustment | 33,118 | — | — | — | |||||||||||
| Environmental obligation mark-to-market adjustments | 9,343 | — | — | — | |||||||||||
| Unrealized loss on derivatives | 22,178 | — | — | — | |||||||||||
| Acquisition and integration costs | — | — | — | 7,273 | |||||||||||
| Par West redevelopment and other costs | — | — | — | 2,613 | |||||||||||
| Severance costs | — | — | — | 1,070 | |||||||||||
| Par's portion of interest, taxes, and depreciation expense from refining and logistics investments | — | 207 | — | — | |||||||||||
| Other income, net | — | — | — | 379 | |||||||||||
| Adjusted EBITDA (1) | $ | 128,604 | $ | 25,957 | $ | 17,952 | $ | (21,683 | ) | ||||||
| Three Months Ended |
|||||||||||||||
| Refining | Logistics | Retail | Corporate and Other | ||||||||||||
| Operating income (loss) by segment | $ | 168,798 | $ | 15,898 | $ | 5,525 | $ | (16,192 | ) | ||||||
| Depreciation and amortization | 16,979 | 5,211 | 2,600 | 793 | |||||||||||
| Inventory valuation adjustment | (7,557 | ) | — | — | — | ||||||||||
| Environmental obligation mark-to-market adjustments | 78,548 | — | — | — | |||||||||||
| Unrealized gain on derivatives | (28,607 | ) | — | — | — | ||||||||||
| Severance costs | 3 | 4 | 22 | 6 | |||||||||||
| Loss (gain) on sale of assets, net | — | (12 | ) | — | 27 | ||||||||||
| Other income, net | — | — | — | 47 | |||||||||||
| Adjusted EBITDA (1) | $ | 228,164 | $ | 21,101 | $ | 8,147 | $ | (15,319 | ) | ||||||
| Six Months Ended |
|||||||||||||||
| Refining | Logistics | Retail | Corporate and Other | ||||||||||||
| Operating income (loss) by segment | $ | 307,276 | $ | 33,299 | $ | 28,694 | $ | (61,434 | ) | ||||||
| Depreciation and amortization | 35,549 | 10,093 | 5,811 | 1,123 | |||||||||||
| Inventory valuation adjustment | 53,976 | — | — | — | |||||||||||
| Environmental obligation mark-to-market adjustments | (123,958 | ) | — | — | — | ||||||||||
| Unrealized loss on derivatives | 8,508 | — | — | — | |||||||||||
| Acquisition and integration costs | — | — | — | 12,544 | |||||||||||
| Severance costs | — | — | — | 1,070 | |||||||||||
| Par West redevelopment and other costs | — | — | — | 5,363 | |||||||||||
| Par's portion of interest, taxes, and depreciation expense from refining and logistics investments | — | 207 | — | — | |||||||||||
| Other income, net | — | — | — | 344 | |||||||||||
| Adjusted EBITDA (1) | $ | 281,351 | $ | 43,599 | $ | 34,505 | $ | (40,990 | ) | ||||||
| Six Months Ended |
|||||||||||||||
| Refining | Logistics | Retail | Corporate and Other | ||||||||||||
| Operating income (loss) by segment | $ | 50,473 | $ | 25,750 | $ | 9,570 | $ | (32,860 | ) | ||||||
| Depreciation and amortization | 32,312 | 10,298 | 5,291 | 1,462 | |||||||||||
| Inventory valuation adjustment | 73,096 | — | — | — | |||||||||||
| Environmental obligation mark-to-market adjustments | 89,850 | — | — | — | |||||||||||
| Unrealized gain on derivatives | (13,155 | ) | — | — | — | ||||||||||
| Acquisition and integration costs | — | — | — | 63 | |||||||||||
| Severance costs | 40 | 4 | 22 | 2,197 | |||||||||||
| Loss (gain) on sale of assets, net | — | (12 | ) | — | 27 | ||||||||||
| Other income, net | — | — | — | 49 | |||||||||||
| Adjusted EBITDA (1) | $ | 232,616 | $ | 36,040 | $ | 14,883 | $ | (29,062 | ) | ||||||
________________________________________
(1) For the three and six months ended
Laramie Energy Adjusted EBITDAX
Adjusted EBITDAX is defined as net income (loss) excluding commodity derivative loss (gain), loss (gain) on settled derivative instruments, interest expense, gain on extinguishment of debt, non-cash preferred dividend, depreciation, depletion, amortization, and accretion, exploration and geological and geographical expense, bonus accrual, equity-based compensation expense, loss (gain) on disposal of assets, phantom units, and expired acreage (non-cash). We believe Adjusted EBITDAX is a useful supplemental financial measure to evaluate the economic and operational performance of exploration and production companies such as Laramie Energy.
The following table presents a reconciliation of Laramie Energy’s Adjusted EBITDAX to the most directly comparable GAAP financial measure, net income (loss) for the periods indicated (in thousands):
| Three Months Ended |
Six Months Ended |
||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income (loss) | $ | 6,709 | $ | 383 | $ | 57,527 | $ | (32,517 | ) | ||||||
| Commodity derivative income (loss) | (12,384 | ) | 22,357 | (34,840 | ) | 73,200 | |||||||||
| Loss (gain) on settled derivative instruments | 4,411 | (11,625 | ) | (4,208 | ) | (19,812 | ) | ||||||||
| Interest expense and loan fees | 4,974 | 3,715 | 8,959 | 7,871 | |||||||||||
| Gain on extinguishment of debt | — | — | 10,098 | — | |||||||||||
| Non-cash preferred dividend | — | 2,640 | 2,910 | 4,726 | |||||||||||
| Depreciation, depletion, amortization, and accretion | 6,193 | 5,990 | 13,217 | 12,135 | |||||||||||
| Phantom units | 147 | — | 746 | — | |||||||||||
| Loss on sale of assets, net | 58 | 724 | 68 | 724 | |||||||||||
| Expired acreage (non-cash) | 116 | 44 | 112 | 47 | |||||||||||
| Total Adjusted EBITDAX | $ | 10,224 | $ | 24,228 | $ | 54,589 | $ | 46,374 | |||||||
Source: