Par Pacific Holdings, Inc.

Greetings and welcome to the Power Pacific Holdings Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ashimi Patel, Manager and Best Relations for Power Pacific Holdings. Thank you. Ms. Patel, you may begin.

Thank you, Melissa. Welcome to Power Pacific's second quarter earnings conference call. Joining me today are William Pate, President and Chief Executive Officer, Will Monteleone, Chief Financial Officer, and Joseph Israel, President and Chief Executive Officer of Power Petroleum. Before we begin, note that our comments today may include forward-looking statements. Any forward-looking statements are subject to change and 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 non-GAAP reconciliations and additional information. I'll now turn the call over to our President and Chief Executive Officer, Bill Pate.

Thank you, Ashimi. Good morning and welcome to all of our conference call participants. The COVID pandemic has brought serious challenges to almost every person in the world. Like many industries, the energy sector has been hit pretty hard. And furthermore, the pandemic has impacted Hawaii's economy more than most regions, given the high reliance on air travel and tourism. While our geographic diversity and vertical integration has helped to offset the unprecedented impact on our operations in Hawaii, our second quarter results reflect difficult market conditions. During the second quarter, we reported negative adjusted EBITDA of $50 million, and an adjusted net loss of $1.70 per share. These results were driven principally by losses in our Hawaii refining unit, which had negative adjusted EBITDA of $70 million due to low throughput and negative realized gross margin. In response to weak demand, global refining throughput has been cut to near minimum rates, and yet supply continues to outpace demand for refined products, resulting in some of the most significant inventory builds in history. For this same reason, many refineries in the U.S. and elsewhere have permanently shut their operations, which is promising for well-positioned refineries like ours. With the virtual halt of commercial air traffic, jet fuel demand has dropped to record lows. Refiners are dropping all possible jets into diesel. Consequently, distal inventories are currently at the highest level in 40 years. Finally, restrictions on mobility have greatly reduced the gasoline demand. Rising case levels in major demand areas in the U.S., like Texas and California, have stifled the increase from the partial reopening that had taken place in the early part of the summer. On the crude supply side, both inland and waterborne crude differentials experienced extreme volatility. While crude differentials initially widened to reflect a surplus of crude oil, this trend reversed rapidly as other factors tightened the physical market. Taking all of these circumstances together, refining margins have dropped to historic lows and have persisted at unprofitable levels for most refineries. While challenges remain, we believe the worst is behind us. Crude diffs and product cracks have modestly improved when compared to the prior quarter, and refined product inventories have begun to decline. We also have several contracts with improved terms in Hawaii, which will significantly improve our capture going forward. An increase in air travel to the state will also help the utilization and profitability of our Hawaii logistics network. And finally, I'd like to note we're very pleased with the financial results of our retail business, which reported record-adjusted EBITDA of $19 million despite a decline in fuel demand. The diversification afforded by our retail unit is most evident in economic downturns like the present. Throughout this period, we have concentrated on those aspects of our business under our control, making structural improvements so that we will emerge from this environment with a stronger high cash flow enterprise. In the next nine months, we remain focused on completing three major turnarounds. We're confident that we have very strong franchises in our local markets, and there's no better time to refurbish our valuable refining network than in a weak market with minimal lost opportunity. Despite the second quarter losses, we enter these turnarounds having increased our liquidity by 49% for nearly $70 million during the quarter. We remain cautious in how we operate our business. A quick resumption in the economy seems unlikely. Therefore, we have identified additional cost cuts to manage effectively during an extended pandemic and to position us to thrive when economic activities fully resume. Before turning the call over to Joseph to review our operations, I want to thank our employees for their dedication and for continuing to execute safely and efficiently. Joseph, the floor is yours.