Par Pacific Holdings Reports First Quarter 2019 Results
HOUSTON, May 7, 2019 /PRNewswire/ -- Par Pacific Holdings, Inc. (NYSE: PARR) ("Par Pacific" or the "Company") today reported its financial results for the quarter ended March 31, 2019.
First Quarter 2019 Highlights
-- Net Income of $61.1 million, or $1.14 per diluted share
-- Adjusted Net Income of $6.4 million, or $0.13 per diluted share
-- Adjusted EBITDA of $47.6 million
-- Record refining throughput of 162,300 bpd
-- Record on-island sales of 106,900 bpd in Hawaii
Par Pacific reported net income of $61.1 million, or $1.14 per diluted share, for the quarter ended March 31, 2019, compared to net income of $15.2 million, or $0.33 per diluted share, for the same quarter in 2018. First quarter 2019 net income includes a $65.4 million tax benefit associated with a partial release of our valuation allowance in connection with the U.S. Oil & Refining Co. acquisition. First quarter 2019 Adjusted Net Income was $6.4 million, compared to Adjusted Net Income of $8.2 million in the first quarter of 2018. First quarter 2019 Adjusted EBITDA was $47.6 million, compared to Adjusted EBITDA of $26.1 million in the first quarter of 2018. First quarter 2018 results include $13.2 million of RINs benefit related to the 2017 compliance year. 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.
"Adjusted EBITDA increased by approximately $35 million year over year, when adjusted for last year's RINs benefit, reflecting the combined earnings power of our businesses after our recent acquisitions," said William Pate, Par Pacific's President and Chief Executive Officer. "The high distillate yield of our refining operations permitted us to achieve strong profitability in a weak gasoline crack environment. I would like to congratulate our team on delivering safe and reliable operations at our four refining locations. Market conditions in the second quarter have improved substantially, boosting our positive view of our earnings per share growth and free cash flow generation for the remainder of the year."
Refining
The Refining segment reported operating income of $14.4 million in the first quarter of 2019, compared to operating income of $26.1 million in the first quarter of 2018. Adjusted Gross Margin for the Refining segment was $85.7 million in the first quarter of 2019, compared to $56.4 million in the first quarter of 2018.
Refining Adjusted EBITDA was $30.4 million in the first quarter of 2019, compared to Refining Adjusted EBITDA of $19.0 million in the first quarter of 2018.
Hawaii Refinery
The 4-1-2-1 Singapore Crack Spread was $6.88 per barrel in the first quarter of 2019, compared to $6.38 per barrel in the first quarter of 2018. The Hawaii refinery's throughput in the first quarter of 2019, across our two locations, was 113 thousand barrels per day (Mbpd). This compares to throughput of 76 Mbpd for the same quarter in 2018. Production costs were $2.81 per throughput barrel in the first quarter of 2019, compared to $3.64 per throughput barrel in the same period in 2018. 2019 results include contribution from the crude units purchased from Island Energy Services, which closed on December 19, 2018.
Washington Refinery
Since our acquisition of the Washington refinery on January 11, 2019, the Pacific Northwest 5-2-2-1 Index averaged $11.09/bbl. Throughput from the date of acquisition was 37 Mbpd and production costs were $4.87 per throughput barrel. Adjusted Gross Margin was $8.88 per throughput barrel during this period, calculated using the LIFO basis of inventory accounting, consistent with past practice.
Wyoming Refinery
During the first quarter of 2019, the Wyoming 3-2-1 Index averaged $15.09 per barrel, compared to $15.65 per barrel in the first quarter of 2018. The Wyoming refinery's throughput was 16 Mbpd in the first quarter of 2019. This compares to 17 Mbpd in the first quarter of 2018. Production costs were $7.69 per throughput barrel in the first quarter of 2019, compared to $7.74 per throughput barrel in the same period in 2018. The Wyoming refinery's Adjusted Gross Margin of $14.55 per throughput barrel reflects a positive FIFO impact of approximately $4.8 million, or $3.26 per throughput barrel, in the first quarter of 2019.
Retail
The Retail segment reported operating income of $10.1 million in the first quarter of 2019, compared to $5.7 million in the first quarter of 2018. Adjusted Gross Margin for the Retail segment was $28.5 million in the first quarter of 2019, compared to $19.4 million in the same quarter of 2018. 2018 results incorporate the Northwest Retail acquisition commencing March 23, 2018.
Retail Adjusted EBITDA was $12.4 million in the first quarter of 2019, compared to $7.6 million in the first quarter of 2018. The Retail segment reported sales volumes of 29.7 million gallons in the first quarter of 2019, compared to 22.2 million gallons in the same quarter of 2018.
Logistics
The Logistics segment reported operating income of $12.4 million in the first quarter of 2019, compared to $8.8 million in the first quarter of 2018. Adjusted Gross Margin for the Logistics segment was $18.7 million in the first quarter of 2019, compared to $12.3 million in the same quarter of 2018.
Logistics Adjusted EBITDA was $16.3 million in the first quarter of 2019, compared to $10.4 million in the first quarter of 2018. 2019 results include contribution from the U.S. Oil & Refining Co. acquisition commencing January 11, 2019, which largely accounts for the year over year growth.
Laramie Energy
Equity earnings from Laramie in the first quarter of 2019 were $0.3 million, compared to $5.6 million in the first quarter of 2018. Equity losses from Laramie, excluding Par Pacific's share of unrealized derivatives, were $0.9 million in 2019, compared to earnings of $3.6 million in 2018. Laramie's total net loss was $3.0 million in the first quarter of 2019, compared to net income of $7.3 million in the first quarter of 2018. Laramie's total Adjusted EBITDAX was $20.2 million in the first quarter of 2019, compared to $19.8 million in the first quarter of 2018.
Liquidity
Net cash used in operations totaled $56.8 million for the three months ended March 31, 2019, compared to net cash provided from operations of $12.6 million during the three months ended March 31, 2018. Cash used in operations in the first quarter of 2019 was driven by working capital, much of which was reversed in April. At March 31, 2019, Par Pacific's cash balance totaled $60.3 million, long-term debt totaled $676.8 million, and total liquidity was $126.4 million.
Conference Call Information
A conference call is scheduled for Wednesday, May 8, 2019 at 1:00 p.m. Central Time (2:00 p.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 May 15, 2019 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 13689016#.
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 148,000-bpd of combined refining capacity, 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 60,000-bpd of combined refining capacity, related multimodal logistics systems, 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 and free cash flow; 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 thereon; 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; anticipated synergies and other benefits of the Island Energy Services transaction and the U.S. Oil & Refining Co. transaction; the anticipated financial and operating results of the assets acquired in the Island Energy Services transaction and the U.S. Oil & Refining Co. transaction and their effect on Par Pacific's cash flows and profitability (including free cash flow and 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
March 31,
2019 2018
---
Revenues $
1,191,335 $
765,439
Operating expenses
Cost of revenues (excluding
depreciation) 1,060,732 661,899
Operating expense (excluding
depreciation) 73,674 51,010
Depreciation, depletion, and
amortization 20,957 13,037
General and administrative
expense (excluding
depreciation) 11,665 11,205
Acquisition and integration
costs 2,884 632
Total operating expenses 1,169,912 737,783
Operating income 21,423 27,656
Other income (expense)
Interest expense and financing
costs, net (18,710) (8,377)
Debt extinguishment and
commitment costs (5,496)
Other income, net 87 119
Change in value of common stock
warrants (1,282) 745
Change in value of contingent
consideration - (10,500)
Equity earnings from Laramie
Energy, LLC 301 5,576
Total other income (expense),
net (25,100) (12,437)
Income (loss) before income
taxes (3,677) 15,219
Income tax benefit (expense) 64,769 (34)
Net income $
61,092 $
15,185
Weighted-average shares outstanding
Basic 49,127 45,634
Diluted 55,550 45,677
Income per share
Basic $
1.23 $
0.33
Diluted $
1.14 $
0.33
Balance Sheet Data
(Unaudited)
(in thousands)
March 31, 2019 December 31, 2018
---
Balance Sheet Data
Cash and
cash
equivalents $
60,297 $
75,076
Working
capital
(1) (87,297) 4,348
Debt,
including
current
portion 676,829 392,640
Total
stockholders'
equity 611,202 512,329
(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
March 31,
2019 (1) 2018 (1)
---
Total Refining Segment
Feedstocks
Throughput (Mbpd)
(2) 162.3 92.7
Refined product
sales volume (Mbpd)
(2) 166.0 102.3
Hawaii Refinery
Feedstocks
Throughput (Mbpd) 113.0 76.2
Source of Crude Oil:
North America 35.0 39.7
% %
Asia 20.6 6.7
% %
Africa 34.1 39.9
% %
Latin America 10.3
% %
Middle East - % 13.7
%
Total 100.0 100.0
% %
===
Yield (% of total throughput)
Gasoline and
gasoline % %
blendstocks 22.8 28.2
Distillate 42.5 47.2
% %
Fuel oils 29.0 16.3
% %
Other products 2.1 5.2
% %
---
Total yield 96.4 96.9
% %
===
Refined product sales volume (Mbpd)
On-island sales
volume 106.9 69.4
Exports sale volume 5.7 14.6
Total refined
product sales
volume 112.6 84.0
Adjusted Gross
Margin per bbl
($/throughput bbl)
(3) $
3.74 $
5.20
Production costs per
bbl ($/throughput
bbl) (4) 2.81 3.64
DD&A per bbl
($/throughput bbl) 0.44 0.71
Washington Refinery
Feedstocks
Throughput (Mbpd)
(2) 37.2
Yield (% of total throughput)
Gasoline and
gasoline %
blendstocks 24.2 %
Distillate 36.5
% %
Asphalt 16.2
% %
Other products 20.7
% %
Total yield 97.6
% %
===
Refined product
sales volume (Mbpd)
(2) 41.0
Adjusted Gross
Margin per bbl
($/throughput bbl)
(3) $
8.88
$
Production costs per
bbl ($/throughput
bbl) (4) 4.87
DD&A per bbl
($/throughput bbl) 1.88
Three Months Ended
March 31,
2019 (1) 2018 (1)
---
Wyoming Refinery
Feedstocks
Throughput (Mbpd) 16.2 16.5
Yield (% of total throughput)
Gasoline and
gasoline % %
blendstocks 52.8 49.9
Distillate 41.9 44.8
% %
Fuel oils 1.5 2.5
% %
Other products 0.8 0.4
% %
---
Total yield 97.0 97.6
% %
===
Refined product
sales volume (Mbpd) 17.0 18.3
Adjusted Gross
Margin per bbl
($/throughput bbl)
(3) $
14.55 $
13.96
Production costs per
bbl ($/throughput
bbl) (4) 7.69 7.74
DD&A per bbl
($/throughput bbl) 2.65 2.33
Market Indices ($ per barrel)
4-1-2-1 Singapore
Crack Spread (5) $
6.88 $
6.38
Pacific Northwest
5-2-2-1 Index (6) 11.09
Wyoming 3-2-1 Index
(7) 15.09 15.65
Crude Prices
Brent crude price $
63.83 $
67.19
WTI crude price 54.90 62.89
ANS 64.09 67.29
Bakken Clearbrook 54.84 62.06
WCS Hardisty 44.26 36.73
Brent M1-M3 0.07 0.71
Retail Segment
Retail sales volumes
(thousands of
gallons) (8) 29,734 22,190
(1) Previously
reported
logistics
pipeline
throughput
volumes have been
removed from the
Operating
Statistics table
post-closing of
the Washington
refinery
acquisition as we
have determined
that pipeline
throughput is no
longer a relevant
indicator of
logistics segment
profitability
given the low
weighting of
pipeline
movements at the
Washington
refinery.
Operating income
(loss) per bbl
has also been
removed from the
table because we
do not believe it
to be an
indicative
measure of our
refineries'
profitability.
(2) Feedstocks
throughput and
sales volumes per
day for the
Washington
refinery for
three months
ended March 31,
2019 are
calculated based
on the 80-day
period for which
we owned the
Washington
refinery in 2019.
As such, the
amounts for the
total refining
segment represent
the sum of the
Hawaii and
Wyoming
refineries'
throughput or
sales volumes
averaged over the
three months
ended March 31,
2019 plus the
Washington
refinery's
throughput or
sales volumes
averaged over the
period from
January 11, 2019
to March 31,
2019. The 2018
amounts for the
total refining
segment represent
the sum of the
Hawaii and
Wyoming
refineries'
throughput or
sales volumes
averaged over the
three months
ended March 31,
2018.
(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.
Adjusted Gross
Margin for our
Washington
refinery is
determined under
the last-in,
first-out
("LIFO")
inventory costing
method. Adjusted
Gross Margin for
our other
refineries is
determined under
the under the
first-in, first-
out ("FIFO")
inventory costing
method.
(4) Management uses
production costs
per barrel to
evaluate
performance and
compare
efficiency to
other companies
in the industry.
There is 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
refinery
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 condensed
consolidated
statement of
operations, which
also includes
costs related to
our bulk
marketing
operations.
(5) The profitability
of our Hawaii
business is
heavily
influenced by
crack spreads in
the Singapore
market. This
market reflects
the closest
liquid market
alternative to
source refined
products for
Hawaii. We
believe the
4-1-2-1 Singapore
crack spread (or
four barrels of
Brent crude oil
converted into
one barrel of
gasoline, two
barrels of
distillate
(diesel and jet
fuel) and one
barrel of fuel
oil) best
reflects a market
indicator for our
Hawaii
operations.
(6) We believe the
Pacific Northwest
5-2-2-1 Index
is the best
market indicator
for our
operations in
Tacoma,
Washington. The
Pacific Northwest
5-2-2-1 Index
is computed by
taking two parts
gasoline (sub-
octane), two
parts middle
distillates (ULSD
and jet fuel),
and one part fuel
oil as created
from a barrel of
Alaskan North
Slope crude.
(7) 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 (ULSD)
as created from
three barrels of
West Texas
Intermediate
Crude Oil
("WTI"). Pricing
is based 50% on
applicable
product pricing
in Rapid City,
South Dakota, and
50% on applicable
product pricing
in Denver,
Colorado.
(8) Retail sales
volumes for the
three months
ended March 31,
2018, include the
9 days of retail
sales volumes
from Northwest
Retail since its
acquisition on
March 23, 2018.
The 2019 amounts
represent the sum
of the Hawaii and
Northwest Retail
sales volumes for
the three months
ended March 31,
2019.
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), impairment expense, inventory valuation adjustments (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 obligations, and purchase price allocation adjustments), depreciation, depletion, and amortization ("DD&A"), RINs loss (gain) in excess of net obligation (see definition below), 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.
Beginning in the fourth quarter of 2018, Adjusted Net Income (loss) excludes RINs losses (gains) recorded in excess of our net RINs obligation ("RINs loss (gain) in excess of net obligation"). Our RINs obligations to comply with Renewable Fuels Standards are recorded as liabilities and measured at fair value as of the end of the reporting period. Our RINs assets, which include RINS purchased in on the open market and RINs generated by blending biofuels as part of our refining process, are stated at the lower of cost or net realizable value (NRV) as of the end of the reporting period. During periods of rising RINs market prices, we recognize unrealized losses associated with the increase in the fair value of our RINs liabilities. We do not adjust the carrying value of our RINs assets because such assets are stated at the lower of cost or NRV under GAAP. This adjustment represents the income statement effect of reflecting our RINs liability on a net basis, as the settlement of any open obligation would first be offset by RINs assets rather than purchasing such RINs obligations at market prices. We have recast the non-GAAP information for the three months ended March 31, 2018 to conform to the current period presentation.
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 agreements 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
March 31, 2019 Refining Logistics Retail
--- ---
Operating income $
14,363 $
12,419 $
10,064
Operating expense
(excluding
depreciation) 55,255 2,364 16,055
Depreciation,
depletion, and
amortization 13,878 3,896 2,374
Inventory valuation
adjustment 385
RINs loss (gain) in
excess of net
obligation (4,512)
Unrealized loss
(gain) on
derivatives 6,298
Adjusted Gross
Margin (1) $
85,667 $
18,679 $
28,493
Three months ended
March 31, 2018 Refining Logistics Retail
--- ---
Operating income $
26,073 $
8,793 $
5,738
Operating expense
(excluding
depreciation) 37,349 1,822 11,839
Depreciation,
depletion, and
amortization 8,362 1,642 1,868
Inventory valuation
adjustment (11,887)
RINs loss (gain) in
excess of net
obligation -
Unrealized loss
(gain) on
derivatives (3,505)
Adjusted Gross
Margin (1) $
56,392 $
12,257 $
19,445
(1) For the three
months ended
March 31, 2019
and 2018, there
was no impairment
expense.
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 costs, unrealized (gains) losses on derivatives, debt extinguishment and commitment costs, release of tax valuation allowance, inventory valuation adjustment, severance costs, impairment expense, (gain) loss on sale of assets and Par's share of Laramie Energy's unrealized loss (gain) on derivatives. Beginning in the fourth quarter of 2018, Adjusted Net Income (Loss) also excludes RINs loss (gain) in excess of net obligation (as defined in the Adjusted Gross Margin section above).
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 (gain) on derivatives.We have recast the non-GAAP information for the three months ended March 31, 2018 to conform to the current period presentation.
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
March 31,
2019 2018
Net
income $
61,092 $
15,185
Inventory
valuation
adjustment 385 (11,887)
RINs
loss
(gain)
in
excess
of net
obligation (4,512)
Unrealized
loss
(gain)
on
derivatives 6,342 (3,505)
Acquisition
and
integration
costs 2,884 632
Debt
extinguishment
and
commitment
costs 5,496
Release
of tax
valuation
allowance
(1) (65,351)
Change
in
value
of
common
stock
warrants 1,282 (745)
Change
in
value
of
contingent
consideration 10,500
Par's
share
of
Laramie
Energy's
unrealized
loss
(gain)
on
derivatives
(2) (1,231) (1,988)
Adjusted
Net
Income
(3) 6,387 8,192
Depreciation,
depletion,
and
amortization 20,957 13,037
Interest
expense
and
financing
costs,
net 18,710 8,377
Equity
losses unrealized
(earnings) loss
from (gain)
Laramie on
Energy, derivatives
LLC,
excluding
Par's
share
of 930 (3,588)
Income
tax
expense
(benefit) 582 34
Adjusted
EBITDA $
47,566 $
26,052
(1) Included in Income
tax benefit
(expense) on our
Condensed
Consolidated
Statements of
Operations.
(2) Included in Equity
earnings from
Laramie Energy,
LLC on our
Condensed
Consolidated
Statements of
Operations.
(3) For the three
months ended
March 31, 2019
and 2018, there
was no severance
costs, 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
March 31,
2019 2018
Adjusted Net
Income
(loss) $
6,387 $
8,192
Undistributed
Adjusted Net
Income
allocated to
participating
securities
(1) 72 103
Adjusted Net
Income
attributable
to common
stockholders 6,315 8,089
Plus: effect
of
convertible
securities
Numerator for
diluted
income per
common share $
6,315 $
8,089
Basic
weighted-
average
common stock
shares
outstanding 49,127 45,634
Add dilutive
effects of
common stock
equivalents 34 43
Diluted
weighted-
average
common stock
shares
outstanding 49,161 45,677
Basic
Adjusted Net
Income
(loss) per
common share $
0.13 $
0.18
Diluted
Adjusted Net
Income
(loss) per
common share $
0.13 $
0.18
(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 depreciation, depletion, and amortization expense, inventory valuation adjustment, unrealized loss (gain) on derivatives, and severance costs. Beginning in the fourth quarter of 2018, Adjusted EBITDA by segment also excludes RINs loss (gain) in excess of net obligation (as defined in the Adjusted Gross Margin section above). We have recast the non-GAAP information for the three months ended March 31, 2018 to conform to the current period presentation.
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 March 31, 2019
Refining Logistics Retail
Operating income
by segment $
14,363 $
12,419 $
10,064
Depreciation,
depletion, and
amortization 13,878 3,896 2,374
Inventory
valuation
adjustment 385
RINs loss (gain)
in excess of net
obligation (4,512)
Unrealized loss
(gain) on
derivatives 6,298
Adjusted EBITDA
(1) $
30,412 $
16,315 $
12,438
Three Months Ended March 31, 2018
Refining Logistics Retail
Operating income
by segment $
26,073 $
8,793 $
5,738
Depreciation,
depletion, and
amortization 8,362 1,642 1,868
Inventory
valuation
adjustment (11,887)
RINs loss (gain)
in excess of net
obligation
Unrealized loss
(gain) on
derivatives (3,505)
Adjusted EBITDA
(1) $
19,043 $
10,435 $
7,606
(1) There were no
severance costs
for the three
months ended
March 31, 2019
and 2018.
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 dividend, 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
March 31,
2019 2018
Net
income
(loss) $
(2,983) $
7,290
Commodity
derivative
loss
(gain) 12,349 (4,463)
Losses
on
settled
derivative
instruments (15,024) (145)
Interest
expense 2,991 1,985
Non-
cash
preferred
dividend 1,244 1,105
Depreciation,
depletion,
amortization,
and
accretion 21,989 15,441
Exploration
and
geological
and
geographical
expense 63 58
Bonus
accrual 738 (1,931)
Equity-
based
compensation
expense 71 1,553
Loss
(gain)
on
disposal
of
assets (81) (6)
Pipeline
(payment)
deficiency
accrual (1,162) (1,178)
Expired
acreage
(non-
cash) 22 114
Total
Adjusted
EBITDAX $
20,217 $
19,825
View original content:http://www.prnewswire.com/news-releases/par-pacific-holdings-reports-first-quarter-2019-results-300845511.html
SOURCE Par Pacific Holdings, Inc.
