Par Pacific Holdings, Inc. (NYSE: PARR) (“Par Pacific” or the “Company”) today reported its financial results for the fourth quarter and twelve months ended December 31, 2023.
- Fourth quarter Net Income of $289.3 million, or $4.77 per diluted share; Adjusted Net Income of $65.2 million, or $1.08 per diluted share; Adjusted EBITDA of $122.0 million
- Full year Net Income of $728.6 million, or $11.94 per diluted share; Record Adjusted Net Income of $501.2 million, or $8.21 per diluted share; Adjusted EBITDA of $696.2 million
Par Pacific reported net income of $728.6 million, or $11.94 per diluted share, for the twelve months ended December 31, 2023, compared to $364.2 million, or $6.08 per diluted share, for the twelve months ended December 31, 2022. Full year 2023 net income includes a deferred income tax benefit of $126.2 million, primarily related to the release of valuation allowances on deferred tax assets. Adjusted Net Income for 2023 was $501.2 million, compared to $474.7 million for 2022. 2023 Adjusted EBITDA was $696.2 million, compared to $643.4 million for 2022.
Par Pacific reported net income of $289.3 million, or $4.77 per diluted share, for the quarter ended December 31, 2023, compared to $84.7 million, or $1.40 per diluted share, for the same quarter in 2022. Fourth quarter 2023 net income includes a deferred income tax benefit of $126.2 million, primarily related to the release of valuation allowances on deferred tax assets. Fourth quarter 2023 Adjusted Net Income was $65.2 million, compared to $132.8 million in the fourth quarter of 2022. Fourth quarter 2023 Adjusted EBITDA was $122.0 million, compared to $174.9 million in the fourth quarter of 2022. A reconciliation of reported non-GAAP financial measures to their most directly comparable GAAP financial measures can be found in the tables accompanying this news release.
“2023 was an exceptionally positive year for our company,” said William Pate, Chief Executive Officer. “We generated record financial results, successfully closed and integrated the highly accretive Billings acquisition, and launched a renewables business line. Record earnings were driven by excellent operational reliability and commercial execution in a strong market environment, allowing us to improve our balance sheet while repurchasing $62 million of common stock throughout the year.”
Refining
The Refining segment generated operating income of $676.2 million for the year ended December 31, 2023, compared to $401.9 million for the year ended December 31, 2022. Adjusted Gross Margin for the Refining segment in the year ended December 31, 2023 was $995.0 million, compared to $812.8 million in the year ended December 31, 2022.
Refining segment Adjusted EBITDA for the year ended December 31, 2023 was $621.5 million, compared to $566.8 million for the year ended December 31, 2022.
The Refining segment reported operating income of $174.0 million in the fourth quarter of 2023, compared to $85.3 million in the fourth quarter of 2022. Adjusted Gross Margin for the Refining segment was $227.2 million in the fourth quarter of 2023, compared to $212.0 million in the fourth quarter of 2022.
Refining segment Adjusted EBITDA was $106.5 million in the fourth quarter of 2023, compared to $146.4 million in the fourth quarter of 2022.
Hawaii
The 3-1-2 Singapore Crack Spread was $19.44 per barrel in the fourth quarter of 2023, compared to $22.84 per barrel in the fourth quarter of 2022. Throughput in the fourth quarter of 2023 was 81 thousand barrels per day (Mbpd), consistent with throughput for the same quarter in 2022. Production costs were $4.80 per throughput barrel in the fourth quarter of 2023, compared to $5.42 per throughput barrel in the same period of 2022.
The Hawaii refinery’s Adjusted Gross Margin was $16.73 per barrel during the fourth quarter of 2023, including a net price lag impact of approximately $20.5 million, or $2.77 per barrel, compared to $14.23 per barrel during the fourth quarter of 2022.
Montana
The RVO Adjusted USGC 3-2-1 Index averaged $13.71 per barrel in the fourth quarter of 2023. The Montana refinery’s throughput in the fourth quarter of 2023 was 49.8 Mbpd and production costs were $12.03 per throughput barrel.
The Montana refinery’s Adjusted Gross Margin was $11.55 per barrel during the fourth quarter of 2023.
Washington
The RVO Adjusted Pacific Northwest 3-1-1-1 Index averaged $17.95 per barrel in the fourth quarter of 2023, compared to $30.11 per barrel in the fourth quarter of 2022. The Washington refinery’s throughput was 38 Mbpd in the fourth quarter of 2023, compared to 40 Mbpd in the fourth quarter of 2022. Production costs were $4.53 per throughput barrel in the fourth quarter of 2023, compared to $3.57 per throughput barrel in the same period of 2022.
The Washington refinery’s Adjusted Gross Margin was $7.87 per barrel during the fourth quarter of 2023, compared to $21.74 per barrel during the fourth quarter of 2022.
Wyoming
The RVO Adjusted USGC 3-2-1 Index averaged $13.71 per barrel in the fourth quarter of 2023, compared to $24.30 per barrel in the fourth quarter of 2022. The Wyoming refinery’s throughput was 17 Mbpd in the fourth quarter of 2023, compared to 16 Mbpd in the fourth quarter of 2022. Production costs were $8.03 per throughput barrel in the fourth quarter of 2023, compared to $7.80 per throughput barrel in the same period of 2022.
The Wyoming refinery's Adjusted Gross Margin was $13.90 per barrel during the fourth quarter of 2023, including a FIFO impact of approximately $(8.4) million, or $(5.33) per barrel, compared to $17.66 per barrel during the fourth quarter of 2022.
Retail
The Retail segment reported operating income of $56.6 million for the twelve months ended December 31, 2023, compared to $49.2 million in the twelve months ended December 31, 2022. Adjusted Gross Margin for the Retail segment was $155.3 million for the twelve months ended December 31, 2023, compared to $141.5 million in twelve months ended December 31, 2022.
For the twelve months ended December 31, 2023, Retail Adjusted EBITDA was $68.3 million, compared to $60.3 million for the twelve months ended December 31, 2022. For the twelve months ended December 31, 2023, the Retail segment reported fuel sales volumes of 117.6 million gallons, compared to 105.5 million gallons for the twelve months ended December 31, 2022. 2023 same store sales fuel volumes and merchandise revenue increased by 8.8% and 7.8%, respectively, compared to 2022.
The Retail segment reported operating income of $14.6 million in the fourth quarter of 2023, compared to $22.3 million in the fourth quarter of 2022. Adjusted Gross Margin for the Retail segment was $40.5 million in the fourth quarter of 2023, compared to $46.0 million in the same quarter of 2022.
Retail segment Adjusted EBITDA was $17.2 million in the fourth quarter of 2023, compared to $25.2 million in the fourth quarter of 2022. The Retail segment reported sales volumes of 29.8 million gallons in the fourth quarter of 2023, compared to 26.9 million gallons in the same quarter of 2022. Fourth quarter 2023 same store sales fuel volumes and merchandise revenue increased by 7.3% and 4.2%, respectively, compared to the fourth quarter of 2022.
Logistics
The Logistics segment generated operating income of $69.7 million for the twelve months ended December 31, 2023, compared to $54.0 million for the twelve months ended December 31, 2022. Adjusted Gross Margin for the Logistics segment was $121.2 million for the twelve months ended December 31, 2023, compared to $89.4 million for the twelve months ended December 31, 2022.
Adjusted EBITDA for the Logistics segment was $96.7 million for the twelve months ended December 31, 2023, compared to $74.4 million for the twelve months ended December 31, 2022.
The Logistics segment reported operating income of $15.7 million in the fourth quarter of 2023, compared to $10.7 million in the fourth quarter of 2022. Adjusted Gross Margin for the Logistics segment was $35.3 million in the fourth quarter of 2023, compared to $19.6 million in the same quarter of 2022.
Logistics segment Adjusted EBITDA was $24.0 million in the fourth quarter of 2023, compared to $15.9 million in the fourth quarter of 2022.
Liquidity
Net cash provided by (used in) operations totaled $(2.3) million and $579.2 million for the three months and twelve months ended December 31, 2023, respectively, compared to net cash provided by operations of $83.6 million and $452.6 million for the three months and twelve months ended December 31, 2022, respectively. Fourth quarter 2023 net cash provided by (used in) operations of $(2.3) million includes a working capital outflow of $(132.0) million. Excluding working capital items, net cash provided by operations was $129.7 million in the fourth quarter of 2023.
Net cash used in investing activities totaled $(27.3) million and $(659.0) million for the three months and twelve months ended December 31, 2023, respectively, compared to $(49.6) million and $(87.3) million for the three months and twelve months ended December 31, 2022, respectively. Net cash used in investing activities of $(659.0) million for the twelve months ended December 31, 2023 includes $(280.0) million for the Billings Acquisition base purchase price, $(315.4) million for the purchase of Billings hydrocarbon inventory value and other working capital items, and $(82.3) million in capital expenditures.
Net cash used in financing activities totaled $(56.6) million and $(135.6) million for the three months and twelve months ended December 31, 2023, respectively, compared to net cash provided by financing activities of $47.9 million and $13.4 million for the three months and twelve months ended December 31, 2022, respectively.
At December 31, 2023, Par Pacific’s cash balance totaled $279.1 million, gross debt totaled $665.6 million, and total liquidity was $644.5 million. Net debt was $386.5 million at December 31, 2023.
Tax Valuation Allowance Summary
Full year 2023 results reflect a deferred income tax benefit of $126.2 million, which includes a non-cash deferred tax benefit of $277.7 million from the release of valuation allowances on deferred tax assets, partially offset by a non-cash deferred tax expense of $151.5 million. The release of the valuation allowance is primarily the result of achieving sustained profitability, with management concluding that the company is more likely than not to realize all federal deferred tax assets in the future.
