Par Pacific Holdings Reports Third Quarter 2018 Results
HOUSTON, Nov. 6, 2018 /PRNewswire/ -- Par Pacific Holdings, Inc. (NYSE: PARR) ("Par Pacific" or the "Company") today reported its financial results for the quarter ended September 30, 2018.
Third Quarter 2018 Highlights
-- Net Loss of $5.8 million, or $(0.13) per diluted share
-- Adjusted Net Income of $5.5 million, or $0.12 per diluted share
-- Adjusted EBITDA of $27.1 million
-- Record on-island sales of 75,300 barrels per day in Hawaii
-- Approved $44 million investment in Hawaii to increase on-island gasoline
production; projected to come online in the first quarter of 2021
-- Laramie ownership interest increased to 46% from 39% in October
following the redemption of a unitholder's interest
Par Pacific reported a net loss of $5.8 million, or $(0.13) per diluted share, for the quarter ended September 30, 2018, compared to net income of $18.8 million, or $0.41 per diluted share, for the same quarter in 2017. Third quarter 2018 Adjusted Net Income was $5.5 million, compared to Adjusted Net Income of $25.2 million in the third quarter of 2017. Third quarter 2018 Adjusted EBITDA was $27.1 million, compared to Adjusted EBITDA of $45.1 million in the third quarter of 2017. 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.
"I am pleased with the progress we made during the quarter in executing on our strategic initiatives," said William Pate, Par Pacific's President and Chief Executive Officer. "We've announced a combined $116 million investment in Hawaii between the IES transaction and other expansion projects with attractive return profiles in order to capitalize on IMO 2020 and growing jet fuel demand. Our third quarter operating and financial results benefited from strong operations from our Wyoming Refinery and Retail, which mitigated challenges faced by our Hawaii Refinery."
Refining
The Refining segment reported operating income of $0.4 million in the third quarter of 2018, compared to operating income of $21.3 million in the third quarter of 2017. Adjusted Gross Margin for the Refining segment was $52.3 million in the third quarter of 2018, compared to $71.2 million in the third quarter of 2017.
Refining Adjusted EBITDA was $15.6 million in the third quarter of 2018, compared to Refining Adjusted EBITDA of $35.1 million in the third quarter of 2017. Over half of this decline can be attributed to market conditions in Hawaii.
Hawaii Refinery
The combined Mid Pacific Index was $8.59/bbl in the third quarter of 2018, compared to $10.27/bbl in the third quarter of 2017. The Hawaii refinery's throughput in the third quarter of 2018 was 72 thousand barrels per day (Mbpd). This compares to throughput of 74 Mbpd for the same quarter in 2017. Production costs were $3.97 per throughput barrel in the third quarter of 2018, compared to $3.69 per throughput barrel in the same period in 2017. The planned reformer regeneration and prolonged shut-down of downstream processing units related to Hurricane Lane impacted financial results in the third quarter of 2018.
Par Pacific is commencing a new $44 million capital project to build a 10 Mbpd naphtha hydrotreater and 6.5 Mbpd isomerization unit at its Hawaii refinery. These units are expected to convert lower-value exported products into higher-value on-island gasoline sales, enhance octane production, and improve benzene and sulfur balances. Startup is expected to occur in the first quarter of 2021.
Wyoming Refinery
During the third quarter of 2018, the Wyoming 3-2-1 Index averaged $26.25/bbl, compared to $25.29/bbl in the third quarter of 2017. The Wyoming refinery's throughput was 17 Mbpd in the third quarter of both 2018 and 2017. Production costs were $6.10 per throughput barrel in the third quarter of 2018, compared to $6.67 per throughput barrel in the same period in 2017.
Retail
The Retail segment reported operating income of $10.7 million in the third quarter of 2018, compared to $7.5 million in the third quarter of 2017. Adjusted Gross Margin for the Retail segment was $29.0 million in the third quarter of 2018, compared to $20.5 million in the same quarter of 2017.
Retail Adjusted EBITDA was $12.5 million in the third quarter of 2018, compared to $8.9 million in the third quarter of 2017. The Retail segment reported sales volumes of 32.2 million gallons in the third quarter of 2018, compared to 24.1 million gallons in the same quarter of 2017. The third quarter of 2018 includes results from the Northwest retail acquisition.
Logistics
The Logistics segment reported operating income of $9.0 million in the third quarter of 2018, compared to $10.4 million in the third quarter of 2017. Adjusted Gross Margin for the Logistics segment was $12.3 million in the third quarter of 2018, compared to $16.0 million in the same quarter of 2017.
Logistics Adjusted EBITDA was $10.6 million in the third quarter of 2018, compared to $12.0 million in the third quarter of 2017.
Laramie Energy
Equity earnings from Laramie in the third quarter of 2018 were $1.1 million, compared to equity earnings of $0.6 million in the third quarter of 2017. Third quarter 2018 earnings attributable to Par Pacific's 39.1% ownership interest in Laramie included $1.3 million in unrealized losses on derivative instruments compared to $1.0 million in unrealized gains on derivative instruments during the third quarter of 2017. Laramie's total net loss was $0.2 million in the third quarter of 2018, compared to a net loss of $1.8 million in the third quarter of 2017. Laramie's total Adjusted EBITDAX was $29.2 million in the third quarter of 2018, compared to $14.4 million in the third quarter of 2017.
Laramie averaged 211 million cubic feet equivalent per day (MMcfed) of production during the third quarter of 2018 and exited the quarter with production of 215 MMcfed. Subsequent to the third quarter of 2018, Par Pacific's ownership interest in Laramie increased to 46% following the redemption of a unitholder's interest.
Liquidity
Net cash provided by operations totaled $51.9 million for the nine months ended September 30, 2018, compared to $105.5 million during the nine months ended September 30, 2017. At September 30, 2018, Par Pacific's cash balance totaled $87.7 million, long-term debt totaled $389.6 million, and total liquidity was $184.9 million. Par Pacific's cash balance improved by $5.0 million in the quarter, primarily due to cash provided from operations.
Conference Call Information
A conference call is scheduled for Wednesday, November 7, 2018 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time). To access the call, please dial 1-877-404-9648 inside the U.S. or 1-412-902-0030 outside the U.S. and ask for the Par Pacific call. Please dial in at least 10 minutes early to register. The webcast may be accessed online through the Company's website at http://www.parpacific.com on the Investor Relations page. A telephone replay will be available until November 14, 2018 and may be accessed by calling 1-877-660-6853 inside the U.S. or 1-201-612-7415 outside the U.S. and using the conference ID 13684344#.
About Par Pacific
Par Pacific Holdings, Inc. (NYSE: PARR), headquartered in Houston, Texas, owns and operates market-leading energy and infrastructure businesses. Par Pacific's strategy is to acquire and develop energy and infrastructure businesses in logistically complex markets. Par Pacific owns and operates one of the largest energy networks in Hawaii with a 94,000-bpd refinery, a logistics system supplying the major islands of the state and 91 retail locations. In the Pacific Northwest and the Rockies, Par Pacific owns and operates an 18,000-bpd refinery, a logistics system and 33 retail locations. Par Pacific also owns 46% of Laramie Energy, LLC, a natural gas production company with operations and assets concentrated in Western Colorado. More information is available at www.parpacific.com.
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; expected refinery throughput; anticipated capital expenditures, including major maintenance costs, and their effect on our financial and operating results, including earnings per share; anticipated retail sales volumes and on-island sales; the anticipated financial and operational results of Laramie Energy, LLC; the amount of our discounted net cash flows and the impact of our NOL carryforwards on them; our ability to identify, acquire and operate energy, related retailing and infrastructure companies with attractive competitive positions; the timing and expected results of certain development projects, including Par Pacific's investment in an isomerization unit and diesel hydrotreater, as well as the impact of such investments on Par Pacific's product mix and on-island sales; the timing of the IES transaction and anticipated synergies and other benefits of the IES transaction; the anticipated financial and operating results of the assets acquired in the IES transaction and their effect on Par Pacific's cash flows and profitability (including free cash flow and Adjusted earnings per share); and other risks and uncertainties detailed in Par Pacific's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and any other documents that Par Pacific files with the Securities and Exchange Commission (SEC). Additionally, forward looking statements are subject to certain risks, trends, and uncertainties, such as changes to financial condition and liquidity; the volatility of crude oil and refined product prices; operating disruptions at our refineries resulting from unplanned maintenance events or natural disasters; uncertainties inherent in estimating oil, natural gas and NGL reserves; environmental risks; and risks of political or regulatory changes. Par Pacific cannot provide assurances that the assumptions upon which these forward-looking statements are based will prove to have been correct. Should one of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expressed or implied in any forward-looking statements, and investors are cautioned not to place undue reliance on these forward-looking statements, which are current only as of this date. Par Pacific does not intend to update or revise any forward-looking statements made herein or any other forward-looking statements as a result of new information, future events or otherwise. The Company further expressly disclaims any written or oral statements made by a third party regarding the subject matter of this news release.
Contact:
Suneel Mandava
SVP, Finance
(713) 969-2136
smandava@parpacific.com
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share data)
Three Months Ended
Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
---
Revenues $
909,781 $
610,506 $
2,531,616 $
1,780,004
Operating expenses
Cost of revenues (excluding
depreciation) 822,785 509,476 2,232,608 1,485,118
Operating expense (excluding
depreciation) 54,905 51,718 158,975 153,741
Depreciation, depletion, and
amortization 13,192 11,304 39,004 33,848
General and administrative
expense (excluding
depreciation) 11,871 11,292 35,981 34,688
Acquisition and integration
expense 2,134 3,515 253
Total operating expenses 904,887 583,790 2,470,083 1,707,648
Operating income 4,894 26,716 61,533 72,356
Other income (expense)
Interest expense and financing
costs, net (10,425) (7,419) (29,346) (25,500)
Loss on termination of financing
agreements - (1,804)
Other income, net 85 649 861 886
Change in value of common stock
warrants (1,067) (975) (396) (2,211)
Change in value of contingent
consideration - (10,500)
Equity earnings from Laramie
Energy, LLC 1,050 553 4,274 11,651
Total other income (expense),
net (10,357) (7,192) (35,107) (16,978)
Income (loss) before income
taxes (5,463) 19,524 26,426 55,378
Income tax expense (359) (700) (885) (1,762)
Net income (loss) $
(5,822) $
18,824 $
25,541 $
53,616
Weighted-average shares outstanding
Basic 45,709 45,561 45,676 45,505
Diluted 45,709 51,992 45,721 45,527
Income (loss) per share
Basic $
(0.13) $
0.41 $
0.55 $
1.16
Diluted $
(0.13) $
0.41 $
0.55 $
1.16
Balance Sheet Data
(Unaudited)
(in thousands)
September 30, 2018 December 31, 2017
---
Balance Sheet Data
Cash
and
cash
equivalents $
87,734 $
118,333
Working
capital
(1) 14,002 14,259
Debt,
including
current
portion 389,598 384,812
Total
stockholders'
equity 477,406 447,719
________________________________________
(1) Working capital is calculated
as (i) total current assets,
excluding cash and cash
equivalents less (ii) total
current liabilities,
excluding current portion of
long-term debt.
Operating Statistics
The following table summarizes certain operational data:
Three Months Ended Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
Total Refining Segment
Feedstocks Throughput
(Mbpd) 88.6 90.3 90.8 90.1
Refined product sales
volume (Mbpd) 99.9 91.8 99.2 91.2
Hawaii Refinery
Feedstocks Throughput
(Mbpd) 71.5 73.8 73.8 74.4
Source of Crude Oil:
North America 15.3 14.8 29.6 24.4
% % % %
Asia 38.1 23.6 23.0 24.3
% % % %
Africa 31.8 29.1 32.7 23.1
% % % %
Latin America - % % % 0.1
%
Middle East 14.8 32.5 14.7 28.1
% % % %
Total 100.0 100.0 100.0 100.0
% % % %
===
Yield (% of total throughput)
Gasoline and gasoline 26.0 28.8 27.4 27.9
blendstocks % % % %
Distillate 49.9 47.2 48.6 47.1
% % % %
Fuel oils 16.0 15.6 16.3 16.1
% % % %
Other products 4.8 5.1 4.5 5.7
% % % %
---
Total yield 96.7 96.7 96.8 96.8
% % % %
===
Refined product sales volume (Mbpd)
On-island sales volume 75.3 63.7 72.2 62.1
Exports sale volume 8.3 11.2 9.9 12.7
Total refined product
sales volume 83.6 74.9 82.1 74.8
4-1-2-1 Singapore Crack
Spread ($ per barrel)
(1) $
7.81 $
8.20 $
6.87 $
7.30
4-1-2-1 Mid Pacific Crack
Spread ($ per barrel)
(1) 8.93 9.94 8.01 8.67
Mid Pacific Crude Oil
Differential ($ per
barrel) (2) 0.34 (0.33) (0.03) (0.71)
Operating income (loss)
per bbl ($/throughput
bbl) (2.16) 0.91 0.94 2.05
Adjusted Gross Margin per
bbl ($/throughput bbl)
(3) 3.66 6.32 4.74 6.39
Production costs per bbl
($/throughput bbl) (4) 3.97 3.69 3.72 3.66
DD&A per bbl
($/throughput bbl) 0.66 0.63 0.68 0.64
Wyoming Refinery
Feedstocks Throughput
(Mbpd) 17.1 16.5 17.0 15.7
Yield (% of total throughput)
Gasoline and gasoline 47.7 50.5 48.2 51.2
blendstocks % % % %
Distillate 46.0 43.4 46.3 43.1
% % % %
Fuel oils 2.1 2.7 1.8 2.6
% % % %
Other products 1.7 1.6 1.3 1.6
% % % %
---
Total yield 97.5 98.2 97.6 98.5
% % % %
===
Refined product sales
volume (Mbpd) 16.3 16.9 17.1 16.4
Three Months Ended Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
---
Wyoming Refinery (continued)
Wyoming 3-2-1 Index ($
per barrel) (5) $
26.25 $
25.29 $
22.34 $
21.11
Operating income (loss)
per bbl ($/throughput
bbl) 9.32 9.97 7.45 4.82
Adjusted Gross Margin per
bbl ($/throughput bbl)
(3) 17.95 18.67 16.35 14.03
Production costs per bbl
($/throughput bbl) (4) 6.10 6.67 6.63 7.07
DD&A per bbl
($/throughput bbl) 2.54 2.03 2.28 2.13
Retail Segment
Retail sales volumes
(thousands of gallons)
(6) 32,217 24,064 85,896 69,868
Logistics Segment
Pipeline throughput (Mbpd)
Crude oil pipelines 88.0 82.3 88.3 86.5
Refined product pipelines 82.9 85.0 84.4 86.7
Total pipeline throughput 170.9 167.3 172.7 173.2
________________________________________
(1) The profitability of our Hawaii business is
heavily influenced by crack spreads in both the
Singapore and U.S. West Coast markets. These
markets reflect the closest liquid market
alternatives to source refined products for
Hawaii. We believe the Singapore and Mid Pacific
crack spreads (or four barrels of Brent crude
converted into one barrel of gasoline, two
barrels of distillate (diesel and jet fuel) and
one barrel of fuel oil) best reflect a market
indicator for our Hawaii refinery operations.
The Mid Pacific crack spread is calculated using
a ratio of 80% Singapore and 20% San Francisco
indices.
(2) Weighted-average differentials, excluding
shipping costs, of a blend of crudes with an API
of 31.98 and sulfur weight percentage of 0.65%
that is indicative of our typical crude oil mix
quality compared to Brent crude.
(3) Please see discussion of Adjusted Gross Margin
below. We calculate Adjusted Gross Margin per
barrel by dividing Adjusted Gross Margin by
total refining throughput.
(4) Management uses production costs per barrel to
evaluate performance and compare efficiency to
other companies in the industry. There are
several 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.
(5) The profitability of our Wyoming refinery is
heavily influenced by crack spreads in nearby
markets. We believe the Wyoming 3-2-1 Index is
the best market indicator for our operations in
Wyoming. The Wyoming 3-2-1 Index is computed
by taking two parts gasoline and one part
distillate (ultra-low sulfur diesel) as created
from three barrels of West Texas Intermediate
Crude. Pricing is based 50% on applicable
product pricing in Rapid City, South Dakota, and
50% on applicable product pricing in Denver,
Colorado.
(6) Retail sales volumes for the three and nine
months ended September 30, 2018, include the 92
days and 192 days of retail sales volumes from
Northwest Retail from the acquisition date of
March 23, 2018 through September 30, 2018,
respectively.
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 a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP and our calculations thereof may not be comparable to similarly titled measures reported by other companies.
Adjusted Gross Margin
Adjusted Gross Margin is defined as (i) operating income (loss) plus operating expense (excluding depreciation), depreciation, depletion, and amortization ("DD&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 obligation, and purchase price allocation adjustments), and unrealized losses (gains) on derivatives or (ii) revenues less cost of revenues (excluding depreciation) plus inventory valuation adjustments and unrealized losses (gains) on derivatives. We define cost of revenues (excluding depreciation) as the hydrocarbon-related costs of inventory sold, transportation costs of delivering product to customers, crude oil consumed in the refining process, costs to satisfy our Renewable Identification Numbers ("RINs") obligations, and certain hydrocarbon fees and taxes. Cost of revenues (excluding depreciation) also includes the unrealized gains (losses) on derivatives and inventory valuation adjustments that we exclude from Adjusted Gross Margin.
Management believes Adjusted Gross Margin is an important measure of operating performance and uses Adjusted Gross Margin per barrel to evaluate operating performance and compare profitability to other companies in the industry and to industry benchmarks. Management believes Adjusted Gross Margin 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 agreement and lower of cost or 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, depletion, and amortization.
Adjusted Gross Margin should not be considered an alternative to operating income (loss), net cash flows from operating activities, or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted Gross Margin presented by other companies may not be comparable to our presentation since each company may define this term differently as they may include other manufacturing costs and depreciation expense in cost of revenues.
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 September 30, 2018 Refining Logistics Retail
--- ---
Operating income (loss) $
438 $
8,959 $
10,650
Operating expense (excluding depreciation) 36,766 1,663 16,476
Depreciation, depletion, and amortization 8,336 1,654 1,876
Inventory valuation adjustment 3,944
Unrealized loss (gain) on derivatives 2,858
Adjusted Gross Margin $
52,342 $
12,276 $
29,002
Three months ended September 30, 2017 Refining Logistics Retail
--- ---
Operating income (loss) $
21,331 $
10,350 $
7,473
Operating expense (excluding depreciation) 36,126 4,029 11,563
Depreciation, depletion, and amortization 7,390 1,602 1,471
Inventory valuation adjustment 9,423
Unrealized loss (gain) on derivatives (3,033)
Adjusted Gross Margin $
71,237 $
15,981 $
20,507
Nine Months Ended September 30, 2018 Refining Logistics Retail
--- ---
Operating income (loss) $
53,593 $
26,402 $
24,245
Operating expense (excluding depreciation) 108,862 5,870 44,239
Depreciation, depletion, and amortization 24,173 4,969 6,441
Inventory valuation adjustment (20,034)
Unrealized loss (gain) on derivatives 4,849
Adjusted Gross Margin $
171,443 $
37,241 $
74,925
Nine Months Ended September 30, 2017 Refining Logistics Retail
--- ---
Operating income (loss) $
62,389 $
27,186 $
20,589
Operating expense (excluding depreciation) 107,237 12,675 33,829
Depreciation, depletion, and amortization 22,243 4,613 4,377
Inventory valuation adjustment (1,989)
Unrealized loss (gain) on derivatives 79
Adjusted Gross Margin $
189,959 $
44,474 $
58,795
Adjusted Net Income (Loss) and Adjusted EBITDA
Adjusted Net Income (Loss) is defined as Net income (loss) excluding changes in the value of contingent consideration and common stock warrants, acquisition and integration expense, unrealized (gains) losses on derivatives, loss on termination of financing agreements, release of tax valuation allowance, inventory valuation adjustment, severance costs, impairment expense, and (gain) loss on sale of assets. Beginning in 2018, Adjusted Net Income (Loss) also excludes Par's share of Laramie Energy's unrealized loss (gain) on derivatives. The exclusion of Par's share of Laramie Energy's unrealized loss (gain) on derivatives from Adjusted Net Income (Loss) is consistent with our treatment of Par's unrealized (gains) losses on derivatives, which are also excluded from Adjusted Net Income (Loss). We have recast the non-GAAP information for three and nine months ended September 30, 2017 to conform to the current period presentation.
Adjusted EBITDA is Adjusted Net Income (Loss) excluding interest expense and financing costs, taxes, DD&A, and equity losses (earnings) from Laramie Energy (excluding Par's share of Laramie's unrealized loss or gain on derivatives). We believe Adjusted Net Income (Loss) and Adjusted EBITDA 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.
Adjusted Net Income (Loss) and Adjusted EBITDA should not be considered in isolation, or as a substitute for, operating income (loss), net income (loss), cash flows provided by operating, investing, and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. Adjusted Net Income (Loss) and Adjusted EBITDA presented by other companies may not be comparable to our presentation as other companies may define these terms differently.
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 Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
Net income (loss) $
(5,822) $
18,824 $
25,541 $
53,616
Inventory valuation
adjustment 3,944 9,423 (20,034) (1,989)
Unrealized loss
(gain) on
derivatives 2,858 (3,033) 4,849 79
Acquisition and
integration expense 2,134 3,515 253
Loss on termination
of financing
agreements 1,804
Change in value of
common stock
warrants 1,067 975 396 2,211
Change in value of
contingent
consideration 10,500
Severance costs 1,595
Par's share of
Laramie Energy's
unrealized loss
(gain) on
derivatives (1) 1,271 (997) 2,440 (14,914)
Adjusted Net Income
(2) 5,452 25,192 27,207 42,655
Depreciation,
depletion, and
amortization 13,192 11,304 39,004 33,848
Interest expense and
financing costs,
net 10,425 7,419 29,346 25,500
Equity losses
(earnings) from
Laramie Energy,
LLC, excluding
Par's share of
unrealized loss
(gain) on
derivatives (2,321) 444 (6,714) 3,263
Income tax expense 359 700 885 1,762
Adjusted EBITDA $
27,107 $
45,059 $
89,728 $
107,028
________________________________________
(1) Included in Equity earnings from
Laramie Energy, LLC on our Condensed
Consolidated Statements of
Operations.
(2) For the three and nine months ended
September 30, 2018 and 2017, there
was no tax valuation allowance
release, impairment expense, or
(gain) loss on sale of assets.
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 Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
Adjusted Net
Income $
5,452 $
25,192 $
27,207 $
42,655
Undistributed
Adjusted Net
Income allocated
to participating
securities (1) 78 319 384 507
Adjusted Net
Income
attributable to
common
stockholders 5,374 24,873 26,823 42,148
Plus: effect of
convertible
securities 2,566
Numerator for
diluted income
per common share $
5,374 $
27,439 $
26,823 $
42,148
Basic weighted-
average common
stock shares
outstanding 45,709 45,561 45,676 45,505
Add dilutive
effects of common
stock equivalents 54 6,431 45 22
Diluted weighted-
average common
stock shares
outstanding 45,763 51,992 45,721 45,527
Basic Adjusted Net
Income per common
share $
0.12 $
0.55 $
0.59 $
0.93
Diluted Adjusted
Net Income per
common share $
0.12 $
0.53 $
0.59 $
0.93
________________________________________
(1) Participating securities include
restricted stock that has been
issued but has not yet vested.
Adjusted EBITDA by Segment
Adjusted EBITDA by segment is defined as Operating income (loss) by segment excluding unrealized (gains) losses on derivatives, inventory valuation adjustment, severance costs, and depreciation, depletion, and amortization expense. We believe Adjusted EBITDA by segment 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.
The following table presents a reconciliation of Adjusted EBITDA 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 September 30, 2018
Refining Logistics Retail
---
Operating income
by segment $
438 $
8,959 $
10,650
Depreciation,
depletion, and
amortization 8,336 1,654 1,876
Inventory
valuation
adjustment 3,944
Unrealized loss
(gain) on
derivatives 2,858
Adjusted EBITDA $
15,576 $
10,613 $
12,526
Three Months Ended September 30, 2017
Refining Logistics Retail
---
Operating income
by segment $
21,331 $
10,350 $
7,473
Depreciation,
depletion, and
amortization 7,390 1,602 1,471
Inventory
valuation
adjustment 9,423
Unrealized loss
(gain) on
derivatives (3,033)
Adjusted EBITDA $
35,111 $
11,952 $
8,944
Nine Months Ended September 30, 2018
Refining Logistics Retail
---
Operating income
(loss) by segment $
53,593 $
26,402 $
24,245
Depreciation,
depletion and
amortization 24,173 4,969 6,441
Inventory
valuation
adjustment (20,034)
Unrealized loss
(gain) on
derivatives 4,849
Adjusted EBITDA $
62,581 $
31,371 $
30,686
Nine Months Ended September 30, 2017
Refining Logistics Retail
---
Operating income
(loss) by segment $
62,389 $
27,186 $
20,589
Depreciation,
depletion and
amortization 22,243 4,613 4,377
Inventory
valuation
adjustment (1,989)
Unrealized loss
(gain) on
derivatives 79
Severance costs 395
Adjusted EBITDA $
83,117 $
31,799 $
24,966
Laramie Energy Adjusted EBITDAX
Adjusted EBITDAX is defined as net income (loss) excluding commodity derivative loss (gain), losses on settled derivative instruments, interest expense, non-cash preferred dividends, depreciation, depletion, amortization, and accretion, exploration and geological and geographical expense, bonus accrual, equity-based compensation expense, loss (gain) on disposal of assets, pipeline (payment) deficiency accrual, 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
September 30,
2018 2017
Net
loss $
(151) $
(1,838)
Commodity
derivative
loss
(gain) 3,132 (945)
Losses
on
settled
derivative
instruments 115 (1,413)
Interest
expense 2,550 1,812
Non-
cash
preferred
dividend 1,198 1,065
Depreciation,
depletion,
amortization,
and
accretion 21,323 12,630
Exploration
and
geological
and
geographical
expense 46 90
Bonus
accrual 828 799
Equity
based
compensation
expense 71 1,669
Loss
(gain)
on
disposal
of
assets (801) 105
Pipeline
(payment)
deficiency
accrual
Expired
acreage
(non-
cash) 866 387
Total
Adjusted
EBITDAX $
29,177 $
14,361
View original content:http://www.prnewswire.com/news-releases/par-pacific-holdings-reports-third-quarter-2018-results-300745131.html
SOURCE Par Pacific Holdings, Inc.
