Par Pacific Holdings, Inc.

Good morning, and welcome to the PAR Pacific fourth 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. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Ashimi Patel, Senior Manager, Investor Relations. Please go ahead.

Thank you, Gary. Welcome to PAR Pacific's fourth quarter earnings conference call. Joining me today are William Pate, President and Chief Executive Officer, Will Monteleone, Chief Financial Officer, and Matt Vaughn, EVP Retail. 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, everyone. We certainly live in interesting times. Market conditions and refined product demand improved significantly in all our regions during the second half of 2021. Full-year adjusted EBITDA was $61 million, and adjusted net loss was $1.72 per share. These results include a $46 million non-cash mark-to-market expense for our 2019 and 2020 RFS compliance. Excluding this impact, refining segment adjusted EBITDA improved by over $160 million last year. Operationally, our teams performed well to close out the year. Wyoming production costs were 550 per barrel as the refinery ran extremely well through the fourth quarter. Full year production costs came in at a record low, $6.22 per barrel. Given winter demand, first quarter throughput is expected to be 15,000 to 16,000 barrels per day. Hawaii production costs were $4.24 per barrel in the fourth quarter, and for the full year, production costs averaged $3.98 per barrel. Maintenance costs were $7 million higher in 2021 as we caught up on deferred maintenance from 2020 and energy costs were also a significant factor during the second half of the year. Higher oil prices increased utilities expense by over 30 cents per barrel when compared to the first half of 2021. First quarter throughput is expected to increase to 82 to 85,000 barrels per day as we work to meet rising demand in Hawaii. Tacoma production costs were $4.30 per barrel up from third quarter production costs of $3.60 per barrel due to end-of-run conditions and related throughput shortfalls. Despite significant flooding and a freeze in the Pacific Northwest that caused widespread outages, our Tacoma refinery continued to receive crude shipments and operated throughout December. We began a major turnaround at Tacoma during early January, and we expect to restart our refinery generally as planned in the next week. This turnaround caps an 18-month period during which all our refineries completed major turnarounds. We have no significant planned downtime for at least the next two years. First quarter Tacoma throughput is expected to be 22,000 to 23,000 barrels per day, including the turnaround impact. In conjunction with the current outage, we're completing a debottlenecking project, which should allow us to increase our maximum throughput to 42,000 barrels per day and increase our heavy crude consumption capability by 15%. While the depths of the pandemic made 2020 a very difficult year, this year has been characterized by a choppy return to profitability. Third quarter results were strong, but our recovery was partially set back in the fourth quarter as the Omicron surge impacted demand and rising crude oil prices and differentials adversely affected our gross margin. However, Forward cracks in 2022 are strong. Demand is increasing, inventories are low, and many refineries have been closed. In addition, high natural gas prices hamper the competitiveness of many European and Asian refiners. Singapore cracks and Asian inventory levels have improved, reflecting recent Chinese tax and policy reforms that discourage low-quality blending operations and limit product exports. These factors are somewhat offset by the continued rise in crude oil prices and differentials and market backwardation, all of which are heightened by the current European crisis. Looking to 2022, our near-term objectives are twofold. First, we're concentrated on improvements to our existing operations. We've identified $10 million in growth capital to de-bottleneck units, improve our yield, and expand our retail store base. Second, we are refocusing our efforts to grow our footprint. We remain anchored on supplying isolated local markets like Hawaii and Wyoming, and we see plenty of opportunities to build on that strategy. We're also focused on energy transition opportunities within our communities. Several of these efforts are higher risk and in early stages, such as carbon capture projects in Hawaii and a Tacoma hydrogen electrolyzer project that we're pursuing with local partners. Other opportunities are quickly actionable. We're pursuing small co-feeding opportunities and a unit conversion project for renewable diesel at our existing locations. Co-feeding has the added benefit of fully balancing our REN position. With under 2,500 barrels per day, we could generate enough RENs through blending and production to fully offset our current annual renewable volume obligation. In closing, I'd like to introduce Matt Vaughn, who's taking responsibility of our retail segment, as our new Executive Vice President of Retail. I'll turn the call over to Matt to discuss those segment results and recent strategic initiatives.