Par Pacific Holdings, Inc. Q2 FY2026 earnings call

• Overall Financial & Operational Performance

  • Reported strong Q2 2026 results driven by excellent operational and commercial execution amid extreme market volatility
  • Fine product cracks and the combined refining market index averaged $33 per barrel, far above the 2025 full-year average of $12.40 per barrel and exceeding levels seen in Q2 2022 during the early Russia-Ukraine conflict
  • Favorable market conditions were driven by reduced refined product exports from the Persian Gulf and Russia, conservative operating levels from Asian refiners, and protectionist trade policies that restricted free trade
  • System-wide throughput remained elevated during the peak margin window, with commercial teams optimizing crude sourcing and product placement to achieve strong margin capture rates
  • Refining & Logistics Operations
  • Scheduled Q2 outages at Wyoming and Montana refineries were completed safely, on time, and on budget; the Hawaii refinery turnaround started in late June and is substantially complete with major operations safely restarted, coming in near cost and schedule targets
  • Tacoma (Washington) achieved a new record quarterly production rate of 41.2 thousand barrels per day, representing 98.1% utilization, with production costs of $4.21 per barrel
  • Hawaii Q2 throughput was 73.2 thousand barrels per day with production costs of $6.43 per barrel; lower-than-planned output reflected end-of-cycle conditions ahead of the turnaround
  • Wyoming Q2 throughput was 14 thousand barrels per day with production costs of $15.28 per barrel, reflecting April outage downtime and costs; the refinery has returned to routine operations
  • Montana Q2 throughput was 53 thousand barrels per day with production costs of $10.16 per barrel; following the April outage, Montana set new monthly records of ~62 thousand barrels per day throughput and $7.56 per barrel OPEX in May-June
  • Strategic Growth (Renewables)
  • The renewable diesel business made steady progress, with production ramping through Q2 and June throughput reaching ~3,000 barrels per barrel ahead of the Hawaii plant-wide turnaround
  • First commercial renewable diesel sales were completed during the quarter; volumes were small due to the early ramp stage, but the end-to-end operational pathway from production to sales was successfully established
  • Capital Allocation & Balance Sheet
  • The company meaningfully strengthened its balance sheet, reducing term debt by over 20% via an inaugural $500 million senior unsecured notes offering, with total net debt reduced by over $220 million during the quarter
  • Ended Q2 with total liquidity of ~$1.4 billion, putting the balance sheet in a strong position to pursue growth and maintain flexible capital allocation through market cycles
  • Opportunistic share repurchase activity was moderated during the quarter to prioritize debt reduction amid market volatility; year-to-date through Q2, ~$48 million of common stock has been repurchased

1. Refining Segment: Reported adjusted EBITDA of $552 million in Q2 2026, up from $69 million in Q1 2026. This segment contributed 96.7% of total adjusted EBITDA for the quarter. System-wide margin capture was 125% (112% on a normalized basis after adjusting for Hawaii price lag and Wyoming FIFO impacts). Regional performance breakdown: Hawaii had an index of ~$46 per barrel with 124% capture (99% normalized); Montana had an index of $25.76 per barrel with 144% capture; Wyoming had an index of $28.73 per barrel with 118% capture; Washington had an index of $20.27 per barrel with 100% capture.
2. Logistics Segment: Reported adjusted EBITDA of $30 million in Q2 2026, down from $32 million in Q1 2026. This segment contributed 5.3% of total adjusted EBITDA for the quarter. The sequential decline was driven by reduced crude imports ahead of the Hawaii refinery turnaround.
3. Retail Segment: Reported adjusted EBITDA of $17 million in Q2 2026, up from $15 million in Q1 2026. This segment contributed 3.0% of total adjusted EBITDA for the quarter. Same-store fuel volumes declined 0.8% year-over-year, while in-store sales increased 1% year-over-year. The sequential improvement came from a partial recovery in fuel margins and continued growth in food service sales.

• Third quarter 2026 system-wide throughput midpoint guidance is 182,000 barrels per day. Regional throughput guidance:
  • Hawaii: 59,000 to 65,000 barrels per day conventional throughput, 1,500 to 2,000 barrels per day renewable throughput, reflecting the turnaround that ran from July through early August
  • Washington: 40,000 to 42,000 barrels per day
  • Wyoming: 17,000 to 20,000 barrels per day
  • Montana: 56,000 to 61,000 barrels per day; the Montana coker routine maintenance in July is expected to add $6 to $8 million in incremental OPEX and shift sales mix toward heavier asphalt
• July 2026 consolidated refining index averaged $31.34 per barrel, ~$1.60 below the Q2 2026 average; the financial impact of the Hawaii turnaround is concentrated in Q3, with higher crude differentials (expected to land between $11.50 and $13.50 per barrel, driven by higher freight costs and steeper backwardation) and increased imports expected to push margin capture below the typical 100-110% normalized guidance range
• A gradual ramp in third-party renewable diesel sales volumes and earnings contribution is expected in Q3 following the Hawaii turnaround restart
• If current strong margins persist, the company expects to use a substantial portion of its remaining $700 million net operating loss (NOL) in 2026, and transition to a typical federal tax position starting in 2027
• Global refined product inventories remain tight, and structural factors supporting strong refining margins are expected to remain in place

• Forward-looking statements are inherently uncertain, and actual results may differ materially from projections due to market volatility and other risks
  • Extreme commodity price and crude differential volatility creates uncertainty for landed crude costs and refining margins; differentials have seen $25 per barrel swings in a three-month period
  • Chinese refined product export policy and volumes are opaque; any material increase in Chinese waterborne exports could soften regional refining margins
  • Small refinery exemption (SRE) petitions for 2025 face regulatory uncertainty, as the EPA rarely meets announced deadlines for decisions on exemptions
  • Ongoing conflict in the Middle East creates supply chain and crude pricing uncertainty, and can disrupt refinery operations and customer fulfillment

Q: With the Hawaii turnaround running through July, can built inventories offset Q3 impacts, will there be higher OpEx, and is there a Q3 price lag timing headwind? What is the current state of the Singapore refined product market amid higher Chinese refinery utilization? / A: Price lag impacts cannot be assessed yet, as they depend on end-of-quarter September Singapore pricing. Most imported inventory built in Q2 will be costed in Q3, so margin capture is expected to come in below the typical 100-110% normalized guidance range. Only a marginal OpEx increase is expected, as most turnaround expenditures are capitalized. Despite reports of slightly higher Chinese refinery utilization, no material increase in Chinese refined product exports has been seen through July and August, per vessel tracking data, consistent with China’s longstanding policy of internalizing refining capacity.

Q: Can you provide an update on the Hawaii turnaround operational progress, and what are your current capital allocation priorities? / A: The turnaround is on track with cost and schedule targets. Early units came back online on the 30-day schedule, and the hydrocracker has finished mechanical work and is now in catalyst activation and startup, on track for the 45-day timeline. Capital allocation remains disciplined and focused on per-share long-term value creation, following the company’s historical framework. The company is currently advancing small-scale internal projects that deliver low-20% unlevered returns, and will opportunistically pursue M&A, internal renewable growth, and share repurchases depending on market conditions and relative value.

Q: How much NOL remains, when will it be exhausted, and what is the latest outlook for 2025 small refinery exemptions? / A: At the start of 2026, the remaining NOL balance was ~$700 million. If current margins hold, most of the NOL will be used in 2026, and the company will move to a normal federal tax position in 2027. It is impossible to predict when the EPA will rule on 2025 SRE petitions, but the company hopes for clarity ahead of the September 1 compliance deadline. The company’s 2025 required RIN volume is ~140 million units; full SRE across all refineries would be worth ~$300 million at current RIN prices, while a partial exemption would be worth half that amount. The company already has a favorable 2025 RIN position at this juncture.

Q: What share of the Q2 working capital outflow will reverse after the Hawaii turnaround, and when will landed crude costs normalize? / A: Roughly half of the Q2 $312 million working capital outflow was from building Hawaii refined product inventories, and that portion is expected to reverse as inventory is drawn down after the turnaround; the remaining balance is tied to higher commodity prices raising overall inventory values. Waterborne crude differentials have been extremely volatile, with a ~$25 per barrel swing over three months, but even with intensified Middle East conflict, differentials have not returned to the peak levels seen in March-April 2026 in the current market.