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    PARR
    Earnings call· Jun 2026(Q2 FY26)

    PAR PACIFIC HOLDINGS Q2 FY26 earnings call PARR

    Aug 5, 2026 Source

    Executive summary

    Par Pacific Q2 FY26 — Strong Execution Drives Exceptional Earnings and Balance Sheet Strengthening

    Par Pacific delivered exceptional Q2 FY26 results, capitalizing on favorable market conditions with strong operational and commercial execution across its refining, logistics, and retail segments. The company significantly strengthened its balance sheet through debt reduction and maintained a robust liquidity position, while also making progress on its Hawaii Renewables business. Management remains focused on disciplined capital allocation and internal growth projects amidst evolving market dynamics.

    Highlights

    5

    • Adjusted EBITDA reached $571 million, reflecting strong market conditions.

    • Adjusted net income was $499 million, or $10.10 per share.

    • Combined market index averaged $33 per barrel, well above historical norms.

    • Term debt was reduced by over 20%, contributing to a total net debt reduction of over $220 million.

    • Total liquidity stood at a robust $1.4 billion at quarter-end.

    Concerns

    4

    • Same-store fuel volumes declined by 0.8% in the retail segment.

    • Working capital outflows totaled $312 million, driven by inventory build and higher commodity prices.

    • Hawaii crude differential is expected to increase to $11.50-$13.50 per barrel in Q3 FY26.

    • Montana Coker maintenance in Q3 FY26 is expected to incur $6 million to $8 million in incremental OpEx.

    Guidance & targets

    11
    CategoryTargetConfidence
    Hawaii conventional throughput
    55,000-65,000 barrels per day
    medium materiality
    High
    Hawaii renewable throughput
    1,500-2,000 barrels per day
    low materiality
    High
    Washington throughput
    40,000-42,000 barrels per day
    medium materiality
    High
    Wyoming throughput
    17,000-20,000 barrels per day
    medium materiality
    High
    Montana throughput
    56,000-61,000 barrels per day
    medium materiality
    High
    Consolidated throughput
    182,000 barrels per day
    high materiality
    High
    Significant planned downtime
    None
    medium materiality
    High
    Federal tax position
    Typical federal tax position
    high materiality
    Medium
    Hawaii crude differential
    $11.50-$13.50 per barrel
    medium materiality
    High
    Montana Coker incremental OpEx
    $6 million-$8 million
    low materiality
    High
    Renewables third-party sales volumes and earnings contribution
    Gradual ramp
    low materiality
    Medium

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    Refining
    Reflecting a sharp step-up in market conditions driven by crude and refined product supply disruptions, compared to $69 million in Q1.
    Combined market index: $33 per barrelSystem-wide refining capture: 125%Normalized refining capture (ex-Hawaii price lag & Wyoming FIFO): 112%
    		———$552 million Adjusted EBITDA
    Logistics
    Compared to $32 million in Q1, reflecting reduced crude imports ahead of the Hawaii turnaround.
    		———$30 million Adjusted EBITDA
    Retail
    Sequential improvement compared to $15 million in Q1, driven by partial recovery in fuel margins and continued growth in foodservice sales.
    Same-store fuel volumes: -0.8%In-store sales: +1%
    		———$17 million Adjusted EBITDA
    Hawaii Refining
    Lower production versus planned was the result of the refinery experiencing end-of-cycle conditions and the turnaround.
    Throughput: 73,200 barrels per dayProduction costs: $6.43 per barrelSingapore 3.1.2. index: ~$50 per barrelLanded crude difference: $3.93 per barrelHawaii index: ~$46 per barrelHawaii capture: 124%Net price lag benefit: $77 million or $11.49 per barrelNormalized Hawaii capture (ex-price lag): 99%
    		————
    Montana Refining
    Reflecting April outage downtime and costs; strong performance in May and June post-outage.
    Throughput: 53,000 barrels per dayProduction costs: $10.16 per barrelIndex: $25.76 per barrelMargin capture: 144%May/June monthly throughput record: ~62,000 barrels per dayMay/June OpEx per barrel record: $7.56 per barrel
    		————
    Wyoming Refining
    Reflecting April outage downtime and costs, partially offset by inventory draws.
    Throughput: 14,000 barrels per dayProduction costs: $15.28 per barrelIndex: $28.73 per barrelMargin capture: 118%FIFO headwind: $3 million
    		————
    Washington Refining
    Set a new quarterly record for throughput, supported by continued jet to diesel strength on the West Coast.
    Throughput: 41,200 barrels per dayProduction costs: $4.21 per barrelIndex: $20.27 per barrelMargin capture: 100%
    		————

    Operational metrics

    17
    Adjusted EBITDA
    $571 million
    Q2 FY26

    Company-wide adjusted EBITDA.

    Adjusted Net Income
    $499 million
    Q2 FY26

    Company-wide adjusted net income.

    Adjusted EPS
    $10.10
    Q2 FY26

    Diluted basis.

    Renewable diesel production
    3,000
    June 2026

    Reached this level before the Hawaii plant-wide turnaround.

    Term debt reduction
    over 20%
    Q2 FY26

    Achieved via inaugural senior unsecured notes issuance.

    ABL borrowings reduction
    $78 million
    Q2 FY26

    Reduction in ABL borrowings.

    Net debt reduction
    over $220 million
    Q2 FY26

    Total net debt reduction for the quarter.

    Total liquidity
    $1.4 billion
    as of June 30, 2026

    Total available liquidity.

    Cash balance
    $185 million
    as of June 30, 2026

    Cash and equivalents balance.

    Working capital outflows
    $312 million
    Q2 FY26

    Primarily driven by building refined product inventories ahead of Hawaii turnaround and higher commodity prices.

    Deferred turnaround costs
    $19 million
    Q2 FY26

    Deferred turnaround costs incurred in Q2.

    Capital expenditures
    $59 million
    Q2 FY26

    Total capital expenditures including deferred turnaround costs.

    RIN gain (GAAP)
    $35 million
    Q2 FY26

    Represents the difference between current RIN prices and the book value of RIN assets on the balance sheet.

    Share repurchases
    $48 million
    YTD Q2 FY26

    Includes cash settled options; moderated in Q2 in favor of debt reduction.

    NOL balance
    around $700 million
    end of FY25

    Expected to utilize a substantial portion in FY26.

    Mainland RVO
    140 million
    2025

    Potential full exemption impact at current RIN prices is about $300 million.

    Consolidated Refining index
    $31.34approximately $1.60 below Q2 average
    July 2026

    Consolidated refining index for July.

    Industry KPIs

    1
    MetricValueDetails
    FCF shareholder distributions$48 millionUSD

    Deals & partnerships

    1
    Public marketIssuance of senior unsecured notes to reduce gross term debt.$500 million

    Inaugural senior unsecured notes offering.

    Capital programs

    4
    Hawaii Plant-wide Turnaroundsubstantially complete
    Period spend: $19 million
    Start: late June 2026

    Executed safely and cleanly, delivering cost and schedules near target. Major operations safely restarted, with hydrocracker in catalyst activation and start-up.

    Wyoming Scheduled Outagecompleted
    Start: April 2026

    Completed safely and efficiently.

    Montana Scheduled Outagecompleted
    Start: April 2026

    Executed safely, on time, and on budget.

    Montana Coker Maintenanceunderway
    Period spend: $6 million to $8 million
    Start: July 2026

    Routine maintenance, expected to return to service by mid-August.

    Risks & headwinds

    6
    Pressure on fuel margins in higher price environmentQ2 FY26

    Same-store fuel volumes declined by 0.8%

    Mitigation: Merchandising and food programs continue to advance, strengthening underlying earnings power.

    Working capital outflowsQ2 FY26

    $312 million

    Mitigation: Expected to reverse as inventory levels normalize after Hawaii turnaround and commodity prices stabilize.

    Higher Hawaii crude differentialQ3 FY26

    $11.50-$13.50 per barrel

    Incremental OpEx due to Montana Coker maintenanceQ3 FY26

    $6 million-$8 million

    Mitigation: Routine maintenance, expected to return to service by mid-August.

    Extreme market volatilityQ2 FY26

    Combined market index averaged $33 per barrel, well above $12.40 in 2025

    Mitigation: Company executed crisply and used full commercial flexibility; moderated share repurchase activity in favor of debt reduction.

    Disruptions in crude and refined product supplyQ2 FY26

    Drove market conditions

    Mitigation: Commercial team optimized crude sourcing and product placement, generating excellent capture rates.

    What to watch in Q3 FY26

    5

    Hawaii conventional throughput

    next quarter
    Current73,200 bbl/d (Q2 actual)
    Target55,000-65,000 bbl/d (Q3 guidance)

    Why it matters

    Verifies successful restart and ramp-up post-turnaround, impacting overall refining volumes and profitability.

    Looking ahead to the third quarter, we expect Hawaii conventional throughout between 55,000 and 65,000 barrels per day and renewable throughput between 1,500 and 2,000 barrels per day, reflecting the turnaround event in July through early August.

    Q&A highlights

    6

    Seeking clarity on the financial impacts of the Hawaii turnaround in Q3, including inventory monetization, OpEx, and potential price lag.

    Shawn Flores stated it's too early to call price lag impacts, but Q3 capture would likely be below typical guidance due to imported barrels being costed in Q3. Most turnaround expenditures are capitalized, with a marginal increase in OpEx. Will Monteleone added that the plant won't be at full rates for the entire quarter.

    “we are expecting a more concentrated impact of the turnaround activities in we built refined products through imports late in Q2. But from a costing perspective, most of those imported barrels will be costed in Q3. So would expect capture to likely come in below sort of typical normalized guidance of 100% to 110% because of those factors.”

    asked by Matthew Blair · answered by Shawn Flores

    2 min read5 chapters

    Detailed Narrative

    01

    Strong Q2 Performance

    Par Pacific reported strong Q2 FY26 financial results, with adjusted EBITDA of $571 million and adjusted net income of $499 million or $10.10 per share. This performance was driven by excellent operational and commercial execution across all business units, capitalizing on favorable market conditions with a combined market index averaging $33 per barrel, significantly exceeding historical norms.

    02

    Refining Operations and Turnarounds

    The refining segment saw a substantial increase in adjusted EBITDA to $552 million. The Tacoma refinery achieved a new record quarterly production rate of 41,200 barrels per day, representing 98.1% utilization. The Hawaii plant-wide turnaround, which commenced in late June, was substantially completed safely, on time, and on budget, with major operations successfully restarted. Scheduled outages in Wyoming and Montana were also completed efficiently in April.

    03

    Hawaii Renewables Progress

    The Hawaii Renewables business made steady progress during the quarter. Renewable diesel production ramped up to approximately 3,000 barrels per day in June, prior to the plant-wide turnaround. The company also successfully completed its first commercial renewable diesel sales, establishing the operational pathway from production to market, despite the current small volumes reflecting the early stage of commercial ramp-up.

    04

    Balance Sheet Strengthening and Capital Allocation

    Par Pacific meaningfully strengthened its balance sheet by reducing term debt by over 20% and achieving a total net debt reduction exceeding $220 million, facilitated by an inaugural senior unsecured notes issuance and ABL borrowings reduction. Total liquidity stood at $1.4 billion as of June 30. Management emphasized a dynamic and disciplined approach to capital allocation, prioritizing long-term per-share value creation through internal small-scale projects, M&A, and opportunistic share repurchases.

    05

    Market Conditions and Outlook

    Global refined product inventories remain tight, with structural factors such as reduced exports from the Pershing Gulf and Russia, conservative Asian refiner operations, and protectionist policies continuing to support margins. While the Q3 Hawaii crude differential is expected to be higher, mainland distillate margins have remained firm, and seasonal demand has been strong. The company anticipates utilizing a substantial portion of its NOL in FY26, potentially transitioning to a typical federal tax position by 2027.

    AI-generated summary of the company’s earnings call. Not investment advice.