Par Pacific Holdings, Inc.

Good morning and welcome to the PAR Pacific Second Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I'd now like to turn the conference over to Ashimi Patel, Senior Manager of Investor Relations. Please go ahead.

Thank you, Jason. Welcome to PAR 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 PAR 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, and good morning to those of you on our conference call today. Our retail and logistics segments performed very well during the quarter as our sales volumes nearly returned to pre-pandemic levels. Second quarter adjusted EBITDA was a loss of $7 million, and our adjusted net loss was 81 cents per share. These results include a $27 million non-cash mark-to-market adjustment for our prior year's RFS compliance. Excluding this impact, consolidated adjusted EBITDA was $20 million, and adjusted EBITDA for our refining units approached breakeven for the quarter. We were pleased to see the Supreme Court affirm the EPA's obligation to review small refinery exemptions on a non-continuous basis. We believe the EPA needs to quickly review outstanding SREs and address the REN shortfall created by prior year increases in RFS obligations. The renewable fuel standard has been pushed to levels that is creating unintended consequences for the domestic refining industry. This regulation is also creating inflation and volatility in gasoline, diesel, and ultimately food prices, which hurt the consumer and hamper our domestic economic recovery. Turning to our performance, all our business lines showed significant improvements on a quarter-over-quarter basis. Logistics profitability returned to 2019 levels due to the dramatic upswing in Hawaii tourism, and our retail segment benefited from increasing gasoline demand, although there was some offsetting margin compression from the rise in crude oil prices during the quarter. Conversion of our Northwest retail locations to our Nom Nom brand is going very well. We're launching several new initiatives with the rebrand, including a proprietary loyalty card program, dynamic pricing, a self-checkout test, and greater brand marketing investments. Our refining operations continue to improve from pandemic lows. In Wyoming, regional cracks increased rapidly during the latter part of the second quarter, kicking off a strong summer driving season. Present conditions are even tighter than pre-pandemic summers, and our biggest challenge is meeting strong demand. Hawaii refining is also improving, although the progress is partially masked by the price lag related to some of our product contracts. Although Asian crack spreads are still well below historical averages, recent Chinese reforms appear to be supporting Asian cracks despite the surge of the COVID Delta variant. The Singapore 312 market outlook for the remainder of the year is currently in excess of 650 per barrel. While the physical oil market is tight, our crude oil differentials have continued to be in the $2 per barrel premium range. Washington refining was a bright spot during the pandemic as product sales benefited from declining crude oil prices. But this year, rising prices are having the opposite impact as asphalt cracks are hampered by a significant price lag. In addition, tightening inland crude differentials and the narrow TI Brent spread have increased our feedstock costs. West Coast cracks are improving early in the third quarter, given increasing demand and limited supply, and feedstock costs are benefiting from improved differentials in Canadian and inland crudes. In summary, when you exclude the noise of the mark-to-market on our prior year RENs position, we showed substantial improvement over the first quarter, and we foresee continued improvement for the last half of the year, despite global cracks remaining well below historical averages. This is a testament to the actions taken during the pandemic to improve our long-term profitability. With these changes, we're now focused on reducing our debt load. With very limited capital investments planned, we expect debt reduction to accelerate as our free cash flow grows. At this time, I will turn the call over to Joseph to discuss our operational performance.