to the Par Pacific Second Quarter 2026 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Jeff Hollis, Senior Vice President, General Counsel, and Secretary. Please go ahead.

Thank you, Operator. Welcome to Par Pacific's Earnings Conference Call. Joining me today are Will Montleung, President and CEO, Richard Kramer, EVP of Refining and Logistics, and Sean Flores, CFO. Before we begin, note that our comments today may include forward-looking statements. Any forward-looking statements are subject to change that are not guarantees of future performance or events. They are subject to risks and uncertainties, and actual results may differ materially from these forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements, and we disclaim any obligation to update or revise them. I refer you to our investor presentation on our website and to our filings with the SEC for additional information. I'll now turn the call over to our President and CEO, Will Monteleon.

Thank you, Jeff, and good morning, everyone. We're pleased to report strong second quarter financial results driven by excellent operational and commercial execution. Amidst extreme volatility, each of our business units executed crisply and used the full commercial flexibility of our asset base to capture market conditions. System throughput ran at elevated levels through the peak margin window, and our commercial team optimized crude sourcing and product placement, generating excellent capture rates. Fine product cracks remained materially above historical norms through the quarter. Our combined market index averaged approximately $33 per barrel, well above the 2025 average of $12.40 per barrel and exceeding the second quarter 2022 when the Russia-Ukraine conflict was intensifying. Reduced Persian Gulf and Russian origin refined product exports, Asian refiners running conservatively to preserve crude supply chain duration, and protectionist policies restricting free trade drove these favorable market conditions. Looking forward, global refined product inventories remain tight, and the structural factors supporting margins remain. Turning to retail, same-store fuel volumes declined by 0.8% while in-store sales increased by 1% compared to the second quarter of 2025. Despite pressure on fuel margins and a higher-price environment, the merchandising and food programs continued to advance, strengthening the underlying earnings power of the segment. On the strategic front, our Hawaii renewables business made steady progress. Renewable diesel production ramped through the quarter, with June throughput reaching approximately 3,000 barrels per day before we commenced the Hawaii plant-wide turnaround. In addition, we completed first commercial renewable diesel sales during the quarter. Volumes were small and reflect the early stage nature of the commercial ramp, but they established the operational pathway from production to sales. On the capital allocation front, we meaningfully strengthened the balance sheet during the quarter, reducing our term debt balance by over 20% via the inaugural senior unsecured notes issuance. We ended the quarter with total liquidity of approximately $1.4 billion, placing our balance sheet in a very strong position to pursue growth and continue to allocate capital thoughtfully through cycles. In closing, our through-cycle discipline on operations, commercial positioning, and capital allocation is what allowed us to convert an exceptional market environment into a durably stronger balance sheet and strong per-share earnings. We remain focused on maintaining that discipline as market conditions evolve. With that, I'll hand the call to Richard, who will walk through our refined logistics results.

Thank you, Will. I want to begin by congratulating the Wyoming and Montana teams for the safe and efficient completion of their scheduled outages in April. In addition, the Tacoma team achieved a new record quarterly production rate of 41.2 thousand barrels per day or 98.1 percent utilization through the second quarter. In Hawaii, the Q2 throughput was 73.2 thousand barrels per day and production costs were six dollars and 43 cents per barrel the lower production versus plan was the result of the refinery experiencing end of cycle conditions the team delivered on all customer fuel requirements despite challenges associated with the ongoing conflict in the middle east the turnaround in hawaii began in late june and i'm pleased to report that the team executed the turnaround safely and cleanly while also delivering costs and schedules near target. At this point, the Hawaii turnaround is substantially complete and major operations have been safely restarted. As I stated, Washington throughput set a new quarterly record at 41.2 thousand barrels per day and production costs were $4.21 per barrel, capturing market conditions following the Q1 planned outage. Shifting to Wyoming, throughput was 14,000 barrels per day and production costs were $15.28 cents per barrel, reflecting the April outage downtime and costs. Following the outage, the refinery has shifted to routine operations supported by strong seasonal demand. Finally, in Montana, second quarter throughput was 53,000 barrels per day and production costs were $10.16 per barrel. The team executed the April crude outage safely on time and on budget. In May and In June, PAR Montana Refining set new monthly throughput and OPEX per barrel records of approximately 62,000 barrels per day at $7.56 per barrel. Looking ahead to the third quarter, we expect Hawaii conventional throughput between 59 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. In the mainland, Washington is expected between 40 and 42,000 barrels per day, Wyoming between 17 and 20, and Montana between 56 and 61. The Montana Coker was down in July for routine maintenance and is expected to return to service by mid-August. From today's date, there are no significant planned downtime for the balance of the year. The Q3 midpoint throughput guidance is 182,000 barrels per day. And now I'll turn the call over to Sean to cover our financial results.

Thank you, Richard. Second quarter adjusted EBITDA was $571 million, and adjusted net income was $499 million, or $10.10 per share. A refining segment reported adjusted EBITDA of $552 million in the second quarter, compared to $69 million in the first quarter, reflecting a sharp step up in market conditions driven by the disruptions in crude and refined product supply. Our combined refining index averaged approximately $33 per barrel, an increase of roughly $14 per barrel compared to the first quarter. System-wide refining capture was 125% or 112% on a normalized basis after adjusting for Hawaii price lag and Wyoming FIFO impacts. Starting in Hawaii, the Singapore 312 averaged approximately $50 per barrel, and our landed crew differential was $3.93, resulting in a Hawaii index of approximately $46 per barrel. Hawaii capture was 124%, including a net price lag benefit of approximately $77 million, or $11.49 per barrel. Normalized for the price lag impact, Hawaii capture was 99%. In Montana, the second quarter index averaged $25.76 per barrel, with margin capture of 144%. Capture was well above our target range, driven by favorable clean product to asphalt sales mix and refined product inventory drawdowns that sustained volumes during the April outage. In Wyoming, the second quarter index averaged $28.73 per barrel. Margin capture was 118%, including the benefit of refined product inventory draws during the April outage, partially offset by a $3 million FIFO headwind from declining crude oil prices. In Washington, our index averaged $20.27 per barrel. Margin capture was 100%, supported by continued jet-to-diesel strength on the West Coast. Turning to the logistics segment, adjusted EBITDA was $30 million in the second quarter compared to $32 million in the first quarter, reflecting reduced crude imports ahead of the Hawaii turnaround. In the retail segment, adjusted EBITDA was $17 million compared to $15 million in the first quarter. The sequential improvement was driven by a partial recovery in fuel margins and continued growth in food service sales in both regions. Moving to cash flow, second quarter cash from operations totaled $614 million, excluding working capital outflows of $312 million and deferred turnaround costs of $19 million. The working capital outflows were primarily driven by building refined product inventories ahead of the Hawaii turnaround and higher commodity prices, which increased the value of hydrocarbon inventories. We expect a substantial portion of these working capital outflows to reverse as inventory levels normalize after the Hawaii turnaround and commodity prices stabilize. Second quarter capital expenditures, including deferred turnaround costs totaled approximately $59 million. During the quarter, we continued to benefit from our excess rent inventories associated with the prior period small refinery exemptions. As a reminder, our adjusted EBITDA and adjusted net income reflect full rent expense at current period rent prices, which does not reflect the benefit of our excess rent position. Our gap results, by contrast, include approximately $35 million gain in the quarter, representing the difference between current rent prices and the book value of our rent assets on our balance sheet. Shifting to the balance sheet, we completed a $500 million offering of senior unsecured notes, reducing gross term debt by more than $130 million during the quarter. We also reduced ABL borrowings by $78 million, resulting in a total net debt reduction of over $220 million. Given the heightened market volatility during the period, we moderated our opportunistic share repurchase activity in favor of strengthening the balance sheet through debt reduction. Year-to-date through the second quarter, we have repurchased approximately $48 million of common stock, including cash-settled options. As of June 30th, total liquidity was approximately $1.4 billion and our cash balance was $185 million. Looking to the third quarter, our July Consolidated refining index was $31.34 per barrel, or approximately $1.60 below the Q2 average. In Hawaii, the financial impact of the refinery turnaround will be concentrated in the third quarter. Increased refined product imports are expected to hold capture below our typical guidance range. Our third quarter Hawaii crew differential is expected to land between $11.50 and $13.50 per barrel, reflecting higher freight costs and steeper backwardation. Across our mainland system, distillate margins have remained firm, and seasonal demand has been strong quarter to date. As Richard mentioned, Montana will complete its annual Coker maintenance during the third quarter, resulting in roughly $6 million to $8 million of incremental OPEX and a heavier asphalt sales mix. In renewables, we expect a gradual ramp in third-party sales volumes and earnings contribution as we restart the units following the Hawaii turnaround. round. Overall, the second quarter demonstrated the significant earnings power of our business in a favorable market. Our strong balance sheet and liquidity position will provide financial flexibility to invest in strategic growth opportunities while maintaining an opportunistic approach to share repurchases. This concludes our prepared remarks. Sarah will turn it back to you for the Q&A.

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. Please ensure that your phone is not on mute when called upon. Thank you. Your first question comes from Matthew Blair with TPH. Your line is open.

Matthew Blair Thank you, and good morning, and congrats on the strong results. I was hoping we could talk just a little bit more about the moving parks in Hawaii for the third quarter. So, you mentioned with the turnaround in July, July, the capture would likely be below typical guidance. I think you also mentioned that you've been building inventory, so is it reasonable to assume that you're monetizing inventory throughout July to help offset the impact of the turnaround? Also is there any increase in OPEX from the turnaround? And then finally, should we expect a timing headwind just based on Q3, quarter-day prices so far in Q3 in Hawaii?

Hey, Matt, Sean. I'll take your last one first. I think it's too early to call the sort of price lag impacts. It's really, as you know, the last month of each quarter, and you look at sort of Singapore distillate prices. So I think just watch September Singapore pricing relative to June once that month prices out. And then I think on capture, I sort of referred to it in the prepared remarks. We are expecting a more concentrated impact of the turnaround activities in Q3. 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 percent because of those factors. I think on OPEX, I would say a marginal increase. Most of the expenditures incurred during the turnaround are capitalized.

And just lower total credit throughputs, Matt, right, as you think about as the plant comes back online, you won't be at full rates, you know, for the entire quarter.

Okay, sounds good. And then, Will, could you share any insight on the Singapore market? You know, we have seen China refinery utilization pick up a little bit over the past month. It still is relatively low. Report that China has been increasing product. Have you seen any of that? And, yeah, I mean, for a picture in Singapore is still at new five-year highs. But what are the moving parts you're seeing in the Singapore market? Sure.

Yeah, Matt, I think, you know, continue to watch Chinese behavior closely, obviously moves month to month. I would say despite, you know, I think some announcements and potentially some increases in crude throughputs, we've not seen any material change in exports of refined product as we look, you know, in the July and even the forward planning that we've seen at least through So, again, I think, as you know, the data out of China is opaque, and the best thing to do is to watch the vessel movements, and I think what we're seeing is limited increases in waterborne refined exports at this point in time. And, again, I think just as a reminder, you know, we followed the Chinese policy over, you know, the last decade, and there's been a focus on internalizing their capabilities for many years. And, again, I think you're seeing that behavior play out amidst this shock. And so, again, I think that internal focus is probably the primary objective. and, again, I think that's something to continue to watch, you know, over the course of years rather than months, but that's certainly the behavior that we're seeing.

Great. Thanks for your comments.

Your next question comes from Alexa Breno with Goldman Sachs. Your line is open.

Hey, good morning, team, and thanks for taking our question. Are you able to give us any more color on the Hawaii turnaround? Sounds like from an operational perspective, it's tracking. I mean, anything that surprised upside, downside, and then, you know, on the substantially complete piece, what specific units are left and any thoughts on timeline?

Sure, Alexa. This is Richard. The turnaround was scheduled for 30 to 45 days, 30 being the return of some of the early equipment. And we followed pretty well on track with that with the crew unit and reforming unit to produce gasoline on that 30-day window. Out on the outer edge of that, the 45-day window is really centered around the hydrocracker, and the mechanical work is completed on it, and it's in the middle of catalyst activation and startup at this point. That's the status of the major equipment. The cost and schedule all came in in close range to target, so no significant issues there.

Okay, that's helpful. And then just to follow up, can you talk about your latest thoughts on capital allocation priorities, whether that be around capital returns or potential for any faults on M&A or any other considerations?

Sure, Lex, that's Will. Yeah, I think what I'd say on capital allocation is, you know, it continues to be dynamic. And I think our past history really is a pretty good indicator of the framework that we deploy. And so, you know, I'd say if you look back, you know, at times we found that M&A is the most attractive capital deployment, and at others you've seen us invest in growth inside the business, like in our renewable fuels project. And then there's been other times where we've seen the opportunity to repurchase our own shares at attractive discounts to our view of intrinsic value. And, yeah, I think these opportunities, they come and go, and based on many different variables. And ultimately, you know, our focus is really just a disciplined view on creating long-term value on a per-share basis. That's really how we think about the capital allocation priorities. And so, at this point in time, you know, I think we're spending a fair amount of effort developing internal, you know, small-scale projects that I described as kind of singles and doubles that I think, give us flexibility to achieve unlevered returns that are in the low, you know, 20s for refining logistics projects. And, you know, I think those are within our control. And these other opportunities involve a lot of external market forces. And I think being prepared and ready to move is a significant strategic asset. So I think our historical framework is the best thing to look at and guides the way we think about the future.

Appreciate the color. We'll turn it back.

Once again, if you have a question, it is star 1 on your telephone keypad. Your next question comes from Jason Gableman with TD Cowan. Your line is open.

Yeah, hey, thanks for taking my questions. I was hoping to get an update on how much of the NOL is left. When do you expect that to be exhausted, just given the very strong earnings we've seen and then updated guidance on where tax rate can go once that is exhausted.

Hey, Jason. It's Sean. Yeah, I'd say the beginning point at the beginning of the year, our NOL balance was around $700 million. And just given the year-to-date performance, I would expect to utilize a substantial portion of that NOL this year. I think if current margins persist, we'll likely transition to a more typical federal tax position beginning in 2027.

Okay. Understood. And then maybe was hoping to get your updated thoughts around small refinery exemptions. Any kind of sense on when you can expect to hear on your 2025 petitions and outlook for what that could do from a cash standpoint?

Sure, Jason.

Yeah, I think any specific dates would be complete speculation, As you guys know, just kind of watching this, there's deadlines, there's legal obligations, and all those things rarely seem to be binding on behalf of the EPA. So, I think that the key date, you know, we're watching is clearly there's a September 1st compliance deadline for 2025. It's early August. So, we would certainly hope to hear with adequate time ahead of that compliance deadline. As a reminder, we're in a favorable position with respect to the 2025 RIN positioning at this juncture. And I'll let Sean go into the dollar magnitudes based on, you know, different scenarios for your benefit.

Yeah, Jason, our mainland RVO is about 140 million RIN units for 2025. So a full exemption at all three of our refineries and at current rent prices would be about $300 million, and then a partial exemption would be half of that.

Got it. Maybe if I could just ask a follow-up on the Hawaii turnaround and kind of the outlook. I know you mentioned some of the working capital headwind in 2Q was related to Hawaii. I was hoping you could disclose around what proportion of the headwind we should expect to come back once once Hawaii comes back online. And then based on what you're seeing in the market, do you anticipate landed crude costs to normalize beyond 3Q?

Yeah, Jason, I'll take the first one. I would say roughly half of the outflow this quarter was directly related to building up refined product inventories in Hawaii. I think the balance is mostly related to just higher flat price and inventory values. And then, Will, you want to cover the crude deal?

Yeah, Jason, I think the waterborne crude market's been volatile, as you can imagine. And we've seen, I think as probably your best proxy to think about this is amidst kind of the peak concerns on crude supply, You know, we saw ANS for June crude delivery, so these would have traded in kind of the April-May timeframe, trade as high as ice print plus 18. And then the moment that the straits appeared to be opening and did open for periods of time, we saw, you know, substantial excess waterborne crude available, and the ANS deliveries or September delivery dropped to minus six. So you can see it's almost a $25 barrel swing in the span of three months in terms of crude delivery. And, you know, I think expresses the kind of volatility we're seeing. Yeah. That said, I would just comment that at this point, despite the conflict reintensifying, we're not seeing crude differentials at peak levels like it was early in the early stage of the conflict in the kind of March-April time frame in the current market environment.

All right.

Thanks for that, caller. I'll turn it back.

This concludes the question and answer session. I will now turn the call over to Will for closing remarks.

Great. This quarter represents an example of what strong execution can deliver against a favorable market backdrop. Looking forward, our focus remains on discipline execution as the durable path to growing earnings and free cash flow per share over time. Thank you to the entire PowerPacific team for your focused efforts throughout the quarter, and thank you all for joining us today.

This concludes today's conference call. Thank you for joining. You may now disconnect.