Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a growing energy company based in Houston, Texas, that provides both renewable and conventional fuels to the western United States. For more information, please read “Part I –Item 1. — Business—Overview” of this Form 10-K.
Known Trends or Uncertainties
While the market indices presented below under “Item 7. — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations” are representative of the results of our refineries, each refinery’s realized gross margin on a per barrel basis will differ from the benchmark due to a variety of factors that affect the performance of the specific refinery. These factors include, but are not limited to, the actual type and timing of crude oil throughput; product yields; transportation and storage costs; fuel burn; product premiums or discounts; inventory fluctuations; feedstock and product purchases; commodity price risk-management activities; crude oil purchase financing activities; and other factors not reflected in the benchmark refining margin. We operate in logistically complex, niche markets and, as such, each of our refineries has unique cost advantages and disadvantages as compared to their respective relevant market indices.
Recent Events Affecting Comparability of Periods
Operational Update. Our Wyoming refinery experienced an operational incident on the evening of February 12, 2025, and remained safely idled during repair and recovery work through late April 2025, when the refinery returned to full crude operations. The 66 days of idle time impacted comparability between the year ended December 31, 2025, and December 31, 2024.
Small Refinery Exemption. In August 2025, the U.S. Environmental Protection Agency (“EPA”) granted our mainland refineries a combination of full (100%) and partial (50%) small refinery exemptions (“SREs”) from the Renewable Fuel Standard (the “RFS”) program for the 2019 through 2024 compliance years. As a result of our historical compliance with the RFS program, we received previously retired Renewable Identification Numbers (“RINs”) related to the 2019 through 2023 compliance years from the EPA and relieved a portion of our 2024 RVO, recording a corresponding gain of $199.5 million in Net Income on our consolidated statements of operations for the year ended December 31, 2025. This also resulted in gains of $195.9 million in Adjusted Net Income (Loss) attributable to Par Pacific stockholders and $202.6 million in Adjusted EBITDA for the year ended December 31, 2025. As of December 31, 2025, the EPA has not made a determination with respect to small refinery exemptions for the 2025 compliance year. Accordingly, our recorded RFS obligation for the year ended December 31, 2025, reflects 100% of the RFS obligation for the period with no assumption of SRE relief.
Renewable Fuels Facility Joint Venture. On July 21, 2025, we and Hawaii Renewables, LLC (“Hawaii Renewables”), entered into a definitive Equity Contribution Agreement (the “Equity Contribution Agreement”) with Alohi Renewable Energy LLC (“Alohi”), an entity owned by Mitsubishi Corporation and ENEOS Corporation, to establish Hawaii Renewables as a joint venture. The joint venture was formed for the development, construction, ownership, and operation of the renewable fuels manufacturing facility co-located with our Hawaii refinery (“Renewable Fuels Facility”).
On October 21, 2025, we completed the transaction to form the Hawaii Renewables joint venture. Following the closing of the transaction, we held a 63.5% ownership interest in Hawaii Renewables and Alohi held the remaining 36.5% ownership interest. We will operate and manage the day-to-day operations at the Renewable Fuels Facility on behalf of Hawaii Renewables and provide certain services, such as construction management services, operating and corporate services, and terminalling services, to Hawaii Renewables. In addition, at the closing of the transaction, we contributed certain assets to Hawaii Renewables and Alohi contributed $100.0 million in cash in exchange for a minority interest. In connection with the transaction, Hawaii Renewables distributed $83.0 million to Par and approximately $17.0 million of Alohi’s contribution was retained by Hawaii Renewables to fund remaining construction and initial working capital. The Renewable Fuels Facility is expected to commence operations in the first half of 2026.
Inflation. Energy prices are, among other factors, indicators of inflation, and the U.S. Federal Reserve (the “Fed”) has taken significant steps to curb inflation. After aggressively raising interest rates in early 2023 to bring down inflation, the Fed cut interest rates in 2024 and 2025 in response to positive indicators of economic growth, including easing labor market conditions and lower inflation. Interest rates decreased to a range of 3.50% to 3.75% in December 2025 from 4.25% to 4.50% in December 2024. Crude oil prices decreased in 2025 compared to 2024. Brent crude oil prices averaged $68.19 per barrel in 2025 compared to $79.86 per barrel in 2024. The U.S. retail price for regular-grade gasoline averaged $3.10 per gallon in 2025 compared to $3.30 per gallon in 2024. This decline was due, in part, to lower crude oil prices in 2025 compared to 2024, as
noted above. The decrease in crude prices in 2025 was primarily due to increased global oil inventories driven by increased production by the Organization of the Petroleum Exporting Countries (“OPEC”) in the second half of 2025. The overall energy index increased to 7.7% year over year as of December 2025. While inflation has improved relative to prior years, we do not believe that inflation has had a material effect on our business, financial condition or results of operations in 2025. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases, or price increases could lead to a decline in demand for our products, which could have a material effect on our business, financial condition, or results of operations.
Geopolitical Conflicts. Given the nature of our operations, including sourcing crude oil and feedstocks, geopolitical conflicts may affect our business and results of operations. The Russia-Ukraine war, the Israel-Palestine conflict, the political activity in Venezuela, Houthi-related disruptions in the Red Sea, and tensions involving Iran and the Strait of Hormuz have all continued to disrupt global trade patterns, increase crude oil price volatility, and, at times, increase freight costs and delivery times. Sanctions, price caps, and related restrictions on Russian crude oil and petroleum products, as well as evolving U.S. sanctions and licensing regimes affecting Venezuela’s petroleum sector, have further reshaped crude and refined product trade patterns, which may indirectly affect our business through changes in the availability and pricing of crude oil and feedstocks, and increased volatility in refining margins. Further escalation, renewed maritime disruptions, or additional sanctions could adversely affect our supply economics, operating costs, and results of operations.
Tariffs. Effective August 1, 2025, the U.S. adopted new and increased tariffs on countries and specific goods, subject to evolving exemptions. In October 2025, the U.S. government announced a series of new and expanded tariffs on imports from China and other countries, including a 100% tariff on certain categories of goods and increased duties. On November 1, 2025, the U.S. government announced a deal with China that retained heightened reciprocal tariffs and suspended (retaining a 10% baseline) and reduced certain China-specific tariffs, effective November 10, 2025. Separately, previously announced tariffs on imports from other countries went into effect on November 1, 2025. In January 2026, the U.S. government announced that an additional 25% tariff would be imposed on countries purchasing Iranian oil. On February 20, 2026, the U.S Supreme Court ruled that the International Emergency Powers Act (“IEEPA”) does not authorize presidential tariff actions and invalidated prior IEEPA-based global duties. In response, the U.S. government imposed a temporary 10% global tariff under Section 122 of the Trade Act of 1974 that was increased to 15% prior to becoming effective on February 24, 2026. Those policies, along with retaliatory actions by some trading partners, increased US-China trade tensions, and ongoing negotiations around trade policy, have led to increased , upward pressure on prices of a wide range of goods, and for global trade.
We continue to actively monitor the impact of these and other global situations on our people, operations, financial condition, liquidity, suppliers, customers, and industry, and are actively responding to the impacts that these matters have on our business. Please read “Item 1A. — Risk Factors” for more information on risks and uncertainties, including those related to economic factors, and their potential impacts on our business.
For purposes of this section, “legacy portfolio” and “legacy refining operations” refer to our Hawaii, Wyoming, and Washington refineries, and exclude our Montana refinery acquired in June 2023.
Results of Operations
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Net Income (Loss) Attributable to Par Pacific Stockholders. Our financial results for the year ended December 31, 2025, improved from net loss attributable to Par Pacific stockholders of $33.3 million for the year ended December 31, 2024, to net income attributable to Par Pacific stockholders of $369.4 million for the year ended December 31, 2025. The increase was driven by a $469.6 million increase in refining segment operating income, a $23.6 million increase in equity earnings from Laramie Energy, LLC, a $10.3 million decrease in general and administrative expenses, and a $9.9 million increase in retail segment operating income, partially offset by a $116.5 million increase in income tax expense. Please read the discussions of segment and consolidated results below for additional information.
Adjusted EBITDA and Adjusted Net Income Attributable to Par Pacific Stockholders. For the year ended December 31, 2025, Adjusted EBITDA was $633.5 million compared to $238.7 million for the year ended December 31, 2024. The $394.8 million improvement was primarily related to a $382.3 million increase in our refining segment Adjusted Gross Margin and an $11.8 million increase in our logistics segment Adjusted Gross Margin. Please read the discussion of Adjusted Gross Margin by Segment and the Discussion of Consolidated Results below for additional information.
For the year ended December 31, 2025, Adjusted Net Income attributable to Par Pacific stockholders was $390.1 million compared to $21.2 million for the year ended December 31, 2024. The $368.9 million improvement was primarily related to the same factors described above for the increase in Adjusted EBITDA, partially offset by a $12.7 million increase in
income tax expense, net of impacts due to changes in the valuation allowance and other deferred tax items, and a $12.7 million increase in D&A.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Net Income (Loss) Attributable to Par Pacific Stockholders. Our financial results for the year ended December 31, 2024, declined from net income attributable to Par Pacific stockholders of $728.6 million for the year ended December 31, 2023, to net loss attributable to Par Pacific stockholders of $33.3 million for the year ended December 31, 2024. The decrease was driven by a $658.8 million decrease in refining segment Operating income, a $109.6 million decrease in Income tax benefit, a $25.3 million decrease in Equity earnings from Laramie Energy, LLC, and a $17.4 million increase in general and administrative expenses, partially offset by a $19.7 million increase in logistics segment Operating income, a $17.5 million decrease in Debt extinguishment and commitment costs, and a $17.4 million decrease in Acquisition and integration costs related to our Billings Acquisition. Please read the discussions of segment and consolidated results below for additional information.
Adjusted EBITDA and Adjusted Net Income Attributable to Par Pacific Stockholders. For the year ended December 31, 2024, Adjusted EBITDA was $238.7 million compared to $696.2 million for the year ended December 31, 2023. The decrease was primarily related to a $376.7 million decrease in our refining segment Adjusted Gross Margin and a $98.7 million increase in operating expenses, partially offset by increases of $14.6 million and $9.4 million in our logistics and retail segment Adjusted Gross Margins, respectively. Please read the discussion of Adjusted Gross Margin by Segment and the Discussion of Consolidated Results below for additional information.
For the year ended December 31, 2024, Adjusted Net Income attributable to Par Pacific stockholders was $21.2 million compared to $501.2 million for the year ended December 31, 2023. The decline was primarily related to the same factors described above for the decrease in Adjusted EBITDA, as well as a $12.0 million increase in interest expense and financing costs, excluding unrealized interest rate derivative losses (gains), an $11.8 million increase in Depreciation and amortization, and a $9.2 million decrease in cash distributions received from Laramie Energy, LLC, partially offset by a decrease in Income tax expense, net of impacts due to changes in the valuation allowance and other deferred tax items of $13.3 million.
The following table summarizes our consolidated results of operations for the years ended December 31, 2025, 2024, and 2023 (in thousands). The following should be read in conjunction with our consolidated financial statements under Item 8 of this Annual Report on Form 10-K.
Year Ended December 31,
Revenues
Cost of revenues (excluding depreciation)
Operating expense (excluding depreciation)
Depreciation and amortization
General and administrative expense (excluding depreciation)
Equity earnings from refining and logistics investments
Acquisition and integration costs
Par West redevelopment and other costs
Other operating loss (gain), net
Total operating expenses
Operating income
Other income (expense)
Interest expense and financing costs, net
Debt extinguishment and commitment costs
Other expense, net
Equity earnings (losses) from Laramie Energy, LLC
Total other expense, net
Income (loss) before income taxes
Income tax benefit (expense)
Net income (loss)
Less:
Net loss attributable to noncontrolling interest
Net income (loss) attributable to Par Pacific stockholders
The following tables summarize our Operating income (loss) by segment for the years ended December 31, 2025, 2024, and 2023 (in thousands). The following should be read in conjunction with our consolidated financial statements under Item 8 of this Annual Report on Form 10-K.
Year Ended December 31, 2025
Refining
Logistics (1)
Retail
Corporate, Eliminations and Other (2)
Total
Revenues
Cost of revenues (excluding depreciation)
Operating expense (excluding depreciation)
Depreciation and amortization
General and administrative expense (excluding depreciation)
Equity earnings from refining and logistics investments
Acquisition and integration costs
Par West redevelopment and other costs
Other operating loss (gain), net
Operating income (loss)
Year Ended December 31, 2024
Refining
Logistics (1)
Retail
Corporate, Eliminations and Other (2)
Total
Revenues
Cost of revenues (excluding depreciation)
Operating expense (excluding depreciation)
Depreciation and amortization
General and administrative expense (excluding depreciation)
Equity earnings from refining and logistics investments
Acquisition and integration costs
Par West redevelopment and other costs
Other operating loss (gain), net
Operating income (loss)
For the year ended December 31, 2023
Refining
Logistics (1)
Retail
Corporate, Eliminations and Other (2)
Total
Revenues
Cost of revenues (excluding depreciation)
Operating expense (excluding depreciation)
Depreciation and amortization
General and administrative expense (excluding depreciation)
Equity earnings from refining and logistics investments
Acquisition and integration costs
Par West redevelopment and other costs
Other operating loss (gain), net
Operating income (loss)
(1) Our logistics operations consist primarily of intercompany transactions which eliminate on a consolidated basis.
(2) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $616.7 million, $643.7 million, and $590.8 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Below is a summary of key operating statistics for the refining segment for the years ended December 31, 2025, 2024, and 2023:
Year Ended December 31,
Total Refining Segment
Feedstocks Throughput (Mbpd) (1)
Refined product sales volume (Mbpd) (1)
Adjusted Gross Margin per bbl ($/throughput bbl) (2)
SRE impact
Adjusted Gross Margin excluding SRE impact
Production costs per bbl ($/throughput bbl) (3)
D&A per bbl ($/throughput bbl)
Hawaii Refinery
Feedstocks Throughput (Mbpd)
Yield (% of total throughput)
Gasoline and gasoline blendstocks
Distillates
Fuel oils
Other products
Total yield
Refined product sales volume (Mbpd)
Adjusted Gross Margin per bbl ($/throughput bbl) (2)
SRE impact
Adjusted Gross Margin excluding SRE impact
Production costs per bbl ($/throughput bbl) (3)
D&A per bbl ($/throughput bbl)
Montana Refinery
Feedstocks Throughput (Mbpd) (1)
Yield (% of total throughput)
Gasoline and gasoline blendstocks
Distillates
Asphalt
Other products
Total yield
Refined product sales volume (Mbpd) (1)
Year Ended December 31,
Adjusted Gross Margin per bbl ($/throughput bbl) (2)
SRE impact
Adjusted Gross Margin excluding SRE impact
Production costs per bbl ($/throughput bbl) (3)
D&A per bbl ($/throughput bbl)
Washington Refinery
Feedstocks Throughput (Mbpd)
Yield (% of total throughput)
Gasoline and gasoline blendstocks
Distillates
Asphalt
Other products
Total yield
Refined product sales volume (Mbpd)
Adjusted Gross Margin per bbl ($/throughput bbl) (2)
SRE impact
Adjusted Gross Margin excluding SRE impact
Production costs per bbl ($/throughput bbl) (3)
D&A per bbl ($/throughput bbl)
Wyoming Refinery
Feedstocks Throughput (Mbpd)
Yield (% of total throughput)
Gasoline and gasoline blendstocks
Distillates
Fuel oil
Other products
Total yield
Refined product sales volume (Mbpd)
Adjusted Gross Margin per bbl ($/throughput bbl) (2)
SRE impact
Adjusted Gross Margin excluding SRE impact
Production costs per bbl ($/throughput bbl) (3)
D&A per bbl ($/throughput bbl)
Year Ended December 31,
Market Indices (average $ per barrel)
Hawaii Index (4)
Montana Index (5)
Washington Index (6)
Wyoming Index (7)
Combined Index (8)
Market Cracks (average $ per barrel)
Singapore 3.1.2 Product Crack (4)
Montana 6.3.2.1 Product Crack (5)
Washington 3.1.1.1 Product Crack (6)
Wyoming 2.1.1 Product Crack (7)
Crude Oil Prices (average $ per barrel) (9)
Brent
WTI
ANS (-) Brent
Bakken Guernsey (-) WTI
Bakken Williston (-) WTI
WCS Hardisty (-) WTI
MSW (-) WTI
Syncrude (-) WTI
Brent M1-M3
(1) The 2025 and 2024 amounts for the total refining segment represent the sum of the Hawaii, Montana, Washington, and Wyoming refineries’ throughput or sales volumes averaged over the year ended December 31, 2025 and 2024, respectively. Feedstocks throughput and sales volumes per day for the Montana refinery for the year ended December 31, 2023, are calculated based on the 214-day period for which we owned the Montana refinery in 2023. As such, the amounts for the total refining segment represent the sum of the Hawaii, Washington, and Wyoming refineries’ throughput or sales volumes averaged over the year ended December 31, 2023, plus the Montana refinery’s throughput or sales volumes averaged over the period from June 1, 2023, to December 31, 2023.
(2) 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 first-in, first-out (“FIFO”) inventory costing method. Total Refining Segment Adjusted Gross Margin per barrel is presented net of intercompany profit in inventory per barrel, which represents margin on intercompany sales where the inventory remains on our consolidated balance sheet at period end. Intercompany profit in inventory per barrel for the years ended December 31, 2025, 2024, and 2023 was immaterial. For the year ended December 31, 2025, Adjusted Gross Margin per barrel includes the SRE impact related to the 2019 through 2024 compliance years.
(3) Management uses production costs per barrel to evaluate performance and compare efficiency to other companies in the industry. There are 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 refineries, 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 consolidated statements of operations, which also includes costs related to our bulk marketing operations and severance costs.
(4) Beginning in 2025, we established the Hawaii Index as a new benchmark for our Hawaii operations. We believe the Hawaii Index, which incorporates market cracks and landed crude differentials, better reflects the key drivers impacting our Hawaii refinery’s financial performance compared to prior reported market indices. The Hawaii Index is calculated as the Singapore 3.1.2 Product Crack, or one part gasoline (RON 92) and two parts distillates (Sing Jet & Sing gasoil) as created from a barrel of Brent crude oil, less the Par Hawaii Refining, LLC (“PHR”) crude differential.
(5) Beginning in 2025, we established the Montana Index as a new benchmark for our Montana refinery. We believe the Montana Index, which incorporates local market cracks, regional crude oil prices, and management’s estimates for other costs of sales, better reflects the key drivers impacting our Montana refinery’s financial performance compared to prior reported market indices. Beginning in 2025, market cracks have been updated to reflect local market product pricing, which better reflects our Montana refinery’s refined product sales price compared to prior reported market indices. The Montana Index is calculated as the Montana 6.3.2.1 Product Crack less Montana crude costs, less other costs of sales, including inflation-adjusted product delivery costs, yield loss expense, taxes and tariffs, and product discounts. The Montana 6.3.2.1 Product Crack is calculated by taking three parts gasoline (Billings E10 and Spokane E10), two parts distillate (Billings ULSD and Spokane ULSD), and one part asphalt (Rocky Mountain Rail Asphalt) as created from a barrel of WTI crude oil, less 100% of the RVO cost for gasoline and ULSD. Asphalt pricing is lagged by one month. The Montana crude cost is calculated as 60% WCS differential to WTI, 20% MSW differential to WTI, and 20% Syncrude differential to WTI. The Montana crude cost is lagged by three months and includes an inflation-adjusted crude delivery cost. Other costs of sales and crude delivery costs are based on historical averages and management’s estimates.
(6) Beginning in 2025, we established the Washington Index as a new benchmark for our Washington refinery. We believe the Washington Index, which incorporates local market cracks, regional crude oil prices, and management’s estimates for other costs of sales, better reflects the key drivers impacting our Washington refinery’s financial performance compared to prior reported market indices. Beginning in 2025, market cracks have been updated to reflect local market product pricing, which better reflects our Washington refinery’s refined product sales price compared to prior reported market indices. The Washington Index is calculated as the Washington 3.1.1.1 Product Crack, less Washington crude costs, less other costs of sales, including inflation-adjusted product delivery costs, yield loss expense and state and local taxes. The Washington 3.1.1.1 Product Crack is calculated by taking one part gasoline (Tacoma E10), one part distillate (Tacoma ULSD) and one part secondary products (USGC VGO and Rocky Mountain Rail Asphalt) as created from a barrel of WTI crude oil, less 100% of the RVO cost for gasoline and ULSD. Asphalt pricing is lagged by one month. The Washington crude cost is calculated as 67% Bakken Williston differential to WTI and 33% WCS Hardisty differential to WTI. The Washington crude cost is lagged by one month and includes an inflation-adjusted crude delivery cost. Other costs of sales and crude delivery costs are based on historical averages and management’s estimates.
(7) Beginning in 2025, we established the Wyoming Index as a new benchmark for our Wyoming refinery. We believe the Wyoming Index, which incorporates local market cracks, regional crude oil prices, and management’s estimates for other costs of sales, better reflects the key drivers impacting our Wyoming refinery’s financial performance compared to prior reported market indices. Beginning in 2025, market cracks have also been updated to reflect local market product pricing, which better reflects our Wyoming refinery’s refined product sales price compared to prior reported market indices. The Wyoming Index is calculated as the Wyoming 2.1.1 Product Crack, less Wyoming crude costs, less other cost of sales, including inflation adjusted product delivery costs and yield loss expense, based on historical averages and management’s estimates. The Wyoming 2.1.1 Product Crack is calculated by taking one part gasoline (Rockies gasoline) and one part distillate (USGC ULSD and USGC Jet) as created from a barrel of WTI crude oil, less 100% of the RVO cost for gasoline and ULSD. The Wyoming crude cost is calculated as the Bakken Guernsey differential to WTI on a one-month lag.
(8) Beginning in 2025, we established the Combined Index as a new benchmark for our refining segment. The Combined Index provides a wholistic view of key drivers impacting our refining segment’s financial performance and is calculated as the throughput-weighted average of each regional index for periods under our ownership. As such, the throughput weighted index contemplates the Montana index following June 1, 2023.
(9) Beginning in 2025, crude oil prices have been updated and expanded to reflect regional differentials to Brent and WTI, which better reflect our refineries’ feedstock costs compared to prior crude oil pricing.
Below is a summary of key operating statistics for the retail segment for the years ended December 31, 2025, 2024, and 2023:
Year Ended December 31,
Retail Segment
Retail sales volumes (thousands of gallons)
Non-GAAP Performance Measures
Management uses certain financial measures and forecasts to evaluate our operating performance and allocate resources that are considered non-GAAP financial measures. The chief operating decision-maker (“CODM”) is the Chief Executive Officer (“CEO”), who uses certain non-GAAP financial measures and forecasts to allocate resources and evaluate our operating performance. These measures should not be considered in isolation or as substitutes or alternatives to their most directly comparable GAAP financial measures or any other measure of financial performance or liquidity presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures used by other companies since each company may define these terms differently.
We believe Adjusted Gross Margin (as defined below) 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 and 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 and amortization. Operating expense includes certain shared costs such as finance, accounting, tax, human resources, information technology, and legal costs that are not directly attributable to specific operating segments. The criteria used to determine the allocation of these expenses generally reflect the time and resources required to provide the applicable service to other internal stakeholders. Remaining expenses are included in the reconciliation of reportable segment Adjusted EBITDA to consolidated pre-tax income (loss) as unallocated corporate general and administrative expenses.
Management, including the CODM, uses Adjusted Gross Margin per barrel to evaluate operating performance and compare profitability to other companies in the industry and to industry benchmarks. We believe Adjusted Net Income (Loss) attributable to Par Pacific stockholders, Adjusted EBITDA (as defined below), and Adjusted EBITDA by segment (as defined below) are useful supplemental financial measures that allow management and 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.
Beginning with financial results reported for the second quarter of 2023, Adjusted Gross Margin, Adjusted Net Income (Loss) attributable to Par Pacific stockholders, and Adjusted EBITDA exclude our portion of interest, taxes, and depreciation expense from our refining and logistics investments acquired on June 1, 2023, as part of the Billings Acquisition.
Beginning with financial results reported for the fourth quarter of 2023, Adjusted Gross Margin, Adjusted Net Income (Loss) attributable to Par Pacific stockholders, and Adjusted EBITDA also exclude all hedge losses (gains) associated with our Washington ending inventory and LIFO layer increment impacts associated with our Washington inventory. In addition, we have modified our environmental obligation mark-to-market adjustment to include only the mark-to-market losses (gains) associated with our net RINs liability and net obligation associated with the Washington Climate Commitment Act (“Washington CCA”) and Clean Fuel Standard. This modification was made as part of our change in how we estimate our environmental obligation liabilities.
Beginning with financial results reported for the fourth quarter of 2023, Adjusted Net Income (Loss) attributable to Par Pacific stockholders excludes unrealized interest rate derivative losses (gains) and all Laramie Energy related impacts with the exception of cash distributions. We have recast Adjusted Net Income (Loss) attributable to Par Pacific stockholders for prior periods when reported to conform to the modified presentation. Please read “Note 2—Summary of Significant Accounting Policies”, Environmental Credits and Obligations section, for a discussion of the change in estimate.
Beginning with financial results reported for the first quarter of 2024, Adjusted Net Income (Loss) attributable to Par Pacific stockholders also excludes other non-operating income and expenses. This modification improves comparability between periods by excluding income and expenses resulting from non-operating activities.
Effective as of the fourth quarter of 2024, we have modified our definition of Adjusted Gross Margin, Adjusted Net Income (Loss) attributable to Par Pacific stockholders and Adjusted EBITDA to align the accounting treatment for deferred turnaround costs from our refining and logistics investments with our accounting policy. Under this approach, we exclude our share of their turnaround expenses, which are recorded as period costs in their financial statements, and instead defer and amortize these costs on a straight-line basis over the period estimated until the next planned turnaround. This modification enhances consistency and comparability across reporting periods.
Beginning with the financial results reported for the fourth quarter of 2025, Adjusted Net Income (Loss) attributable to Par Pacific stockholders excludes the portion of non-GAAP adjustments associated with the noncontrolling interest in our joint venture established on October 21, 2025. Adjusted Net Income (Loss) attributable to Par Pacific stockholders and Adjusted EBITDA by segment also excludes other operating gains and losses (which primarily includes the impacts of the noncash remeasurement of our environmental liabilities). This modification improves comparability between periods by excluding non-cash gains and losses that do not reflect ongoing underlying business operations.
Beginning with the financial results reported for the fourth quarter of 2025, Adjusted EBITDA includes the Adjusted Net Loss attributable to noncontrolling interests associated with our joint venture established on October 21, 2025.
Adjusted Gross Margin
Adjusted Gross Margin is defined as Operating income (loss) excluding:
• operating expense (excluding depreciation);
• depreciation and amortization (“D&A”);
• Par’s portion of interest, taxes, and D&A expense from refining and logistics investments;
• impairment expense;
• other operating (gain) loss, net (which primarily includes the impacts of the noncash remeasurement of our environmental liabilities);
• Par's portion of accounting policy differences from refining and logistics investments;
• inventory valuation adjustment (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 or terminal obligations, hedge losses (gains) associated with our Washington ending inventory and intermediation obligation, purchase price allocation adjustments, and LIFO layer increment and decrement impacts associated with our Washington inventory);
• Environmental obligation mark-to-market adjustment (which represents the mark-to-market losses (gains) associated with our net RINs liability and our net obligation associated with the Washington Climate Commitment Act and Clean Fuel Standard); and
• unrealized loss (gain) on derivatives.
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):
Year ended December 31, 2025
Refining
Logistics
Retail
Operating Income
Operating expense (excluding depreciation)
Depreciation, depletion, and amortization
Par’s portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments
Inventory valuation adjustment
Environmental obligation mark-to-market adjustments
Unrealized gain on derivatives
Par's portion of accounting policy differences from refining and logistics investments
Other operating loss (gain), net
Adjusted Gross Margin (1)
Year ended December 31, 2024
Refining
Logistics
Retail
Operating Income
Operating expense (excluding depreciation)
Depreciation, depletion, and amortization
Par’s portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments
Inventory valuation adjustment
Environmental obligation mark-to-market adjustments
Unrealized loss on derivatives
Par's portion of accounting policy differences from refining and logistics investments
Other operating loss (gain), net
Adjusted Gross Margin (1)
Year ended December 31, 2023
Refining
Logistics
Retail
Operating Income
Operating expense (excluding depreciation)
Depreciation, depletion, and amortization
Par’s portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments
Inventory valuation adjustment
Environmental obligation mark-to-market adjustments
Unrealized gain on derivatives
Other operating loss (gain), net
Adjusted Gross Margin (1) (2)
(1) For the years ended December 31, 2025, 2024, and 2023, there was no impairment expense.
(2) For the year ended December 31, 2023, there was no impact in Operating Income from accounting policy differences at our refining and logistics investments.
Adjusted Net Income (Loss) Attributable to Par Pacific Stockholders and Adjusted EBITDA
Adjusted Net Income (Loss) attributable to Par Pacific stockholders is defined as Net income (loss) attributable to Par Pacific stockholders excluding:
• inventory valuation adjustment (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 or terminal obligations, hedge losses (gains) associated with our Washington ending inventory and intermediation obligation, purchase price allocation adjustments, and LIFO layer increment and decrement impacts associated with our Washington inventory);
• Environmental obligation mark-to-market adjustments (which represents the mark-to-market losses (gains) associated with our RINs and Washington CCA and Clean Fuel Standard);
• unrealized (gain) loss on derivatives;
• acquisition and integration costs;
• redevelopment and other costs related to Par West;
• debt extinguishment and commitment costs;
• increase in (release of) tax valuation allowance and other deferred tax items;
• changes in the value of contingent consideration and common stock warrants;
• severance costs and other non-operating expense (income);
• impairment expense;
• impairment expense associated with our investment in Laramie Energy;
• Par’s share of equity (earnings) losses from Laramie Energy, LLC, excluding cash distributions;
• Par’s portion of accounting policy differences from refining and logistics investments;
• other operating (gain) loss, net (which primarily included the impacts of the noncash remeasurement of our environmental liabilities); and
• Noncontrolling interest impact of non-GAAP adjustments.
Adjusted EBITDA is defined as Adjusted Net Income (Loss) attributable to Par Pacific stockholders plus Adjusted Net Loss attributable to noncontrolling interests excluding:
• interest expense and financing costs, net, excluding interest rate derivative loss (gain);
• cash distributions from Laramie Energy, LLC to Par;
• Par's portion of interest, taxes, and D&A expense from refining and logistics investments; and
• income tax expense (benefit) excluding the increase in (release of) tax valuation allowance.
The following table presents a reconciliation of Adjusted Net Income (Loss) attributable to Par Pacific stockholders and Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income (loss) attributable to Par Pacific stockholders, on a historical basis for the periods indicated (in thousands):
Year Ended December 31,
Net income (loss) attributable to Par Pacific stockholders
Inventory valuation adjustment
Environmental obligation mark-to-market adjustments
Unrealized loss (gain) on derivatives
Acquisition and integration costs
Par West redevelopment and other costs
Debt extinguishment and commitment costs
Changes in valuation allowance and other deferred tax items (1)
Severance costs and other non-operating expense (2)
Equity (earnings) losses from Laramie Energy, LLC, excluding cash distributions
Par's portion of accounting policy differences from refining and logistics investments
Other operating loss (gain), net
Noncontrolling interest impact of non-GAAP adjustments
Adjusted Net Income attributable to Par Pacific stockholders (3) (4)
Adjusted Net Loss attributable to noncontrolling interests
Depreciation, depletion, and amortization
Interest expense and financing costs, net, excluding unrealized interest rate derivative loss (gain)
Laramie Energy, LLC cash distributions to Par
Par's portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments
Income tax expense (benefit)
Adjusted EBITDA (3)
(1) For the year ended December 31, 2025, we recognized a non-cash deferred tax expense of $100.4 million. For the years ended December 31, 2024 and 2023, we recognized non-cash deferred tax benefits of $3.3 million and $126.2 million, respectively. These tax impacts are included in Income tax benefit (expense) on our consolidated statements of operations.
(2) For the years ended December 31, 2025 and 2024, we incurred $0.8 million and $13.1 million of stock-based compensation expenses associated with equity awards modifications, respectively. For the year ended December 31, 2024, we incurred $0.8 million for a legal settlement unrelated to current operating activities.
(3) For the years ended December 31, 2025, 2024, and 2023, there was no change in value of contingent consideration, change in value of common stock warrants, impairment expense, impairments associated with our investment in Laramie Energy, or our share of Laramie Energy’s asset impairment losses in excess of our basis difference.
(4) For the year ended December 31, 2023, there was no impact in Net Income (Loss) from accounting policy differences at our refining and logistics investments.
Adjusted EBITDA by Segment
Adjusted EBITDA by segment is defined as Operating income (loss) excluding:
• inventory valuation adjustment (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 or terminal obligations, hedge losses (gains) associated with our Washington ending inventory and intermediation obligation, purchase price allocation adjustments, and LIFO layer increment and decrement impacts associated with our Washington inventory);
• Environmental obligation mark-to-market adjustments (which represents the mark-to-market losses (gains) associated with our net RINs liability and net obligation associated with the Washington CCA and Clean Fuel Standard);
• unrealized (gain) loss on derivatives;
• acquisition and integration costs;
• redevelopment and other costs related to Par West;
• severance costs and other non-operating expense (income);
• other operating loss (gain), net (which primarily includes the impacts of the noncash remeasurement of our environmental liabilities);
• impairment expense;
• Par's portion of interest, taxes, and D&A expense from refining and logistics investments; and
• Par's portion of accounting policy differences from refining and logistics investments.
Adjusted EBITDA by segment also includes Gain on curtailment of pension obligation and Other income (loss), net, which are presented below Operating income (loss) on our consolidated statements of operations.
The following table presents a reconciliation of Adjusted EBITDA by segment to the most directly comparable GAAP financial measure, Operating income (loss) by segment, on a historical basis, for our operating segments, for the periods indicated (in thousands):
Year ended December 31, 2025
Refining
Logistics
Retail
Corporate and Other
Operating income (loss) by segment
Depreciation, depletion and amortization
Inventory valuation adjustment
Environmental obligation mark-to-market adjustments
Unrealized gain on derivatives
Acquisition and integration costs
Par West redevelopment and other costs
Severance costs and other non-operating expense
Par's portion of accounting policy differences from refining and logistics investments
Other operating loss (gain), net
Par's portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments
Other loss, net
Adjusted EBITDA (1)
Year ended December 31, 2024
Refining
Logistics
Retail
Corporate and Other
Operating income (loss) by segment
Depreciation, depletion and amortization
Inventory valuation adjustment
Environmental obligation mark-to-market adjustments
Unrealized loss on derivatives
Acquisition and integration costs
Par West redevelopment and other costs
Severance costs and other non-operating expense
Par's portion of accounting policy differences from refining and logistics investments
Other operating loss (gain), net
Par's portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments
Other loss, net
Adjusted EBITDA (1)
Year ended December 31, 2023
Refining
Logistics
Retail
Corporate and Other
Operating income (loss) by segment
Depreciation, depletion and amortization
Inventory valuation adjustment
Environmental obligation mark-to-market adjustments
Unrealized gain on derivatives
Acquisition and integration costs
Par West redevelopment and other costs
Severance costs and other non-operating expense
Other operating loss (gain), net
Par's portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments
Other loss, net
Adjusted EBITDA (1) (2)
(1) For the years ended December 31, 2025, 2024, and 2023, there was no change in value of contingent consideration, change in value of common stock warrants, impairment expense, impairments associated with our investment in Laramie Energy, or our share of Laramie Energy’s asset impairment losses in excess of our basis difference. Please read the Non-GAAP Performance Measures discussion above for information regarding changes to the components of Adjusted EBITDA made during 2025.
(2) For the year ended December 31, 2023, there was no impact in Operating Income from accounting policy differences at our refining and logistics investments.
Discussion of Operating Income by Segment
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Refining. Operating income for our refining segment was $487.0 million for the year ended December 31, 2025, an increase of $469.6 million compared to $17.4 million for the year ended December 31, 2024. The increase in operating income was primarily driven by:
an increase of $241.2 million related to higher crack spreads across all our refineries,
an SRE benefit of $199.5 million at our Washington, Montana, and Wyoming refineries,
an increase of $79.8 million related favorable derivative impacts,
a favorable change in the valuation of the embedded derivatives related to our Inventory Intermediation Agreement driven by changes in commodity prices that resulted in a decrease of $33.0 million, and
a favorable change in other drivers of $56.9 million,
partially offset by:
an increase of $98.4 million of environmental compliance cost related to current period production and
an increase of $37.2 million driven by unfavorable feedstock differentials and purchased product costs.
Logistics. Operating income for our logistics segment was $97.6 million for the year ended December 31, 2025, an increase of $8.2 million compared to $89.4 million for the year ended December 31, 2024. The increase was primarily due to decreases of $11.2 million in repair and maintenance costs, $6.6 million in environmental expenses, and $5.7 million in other expenses, and an increase of $4.0 million in third party revenue. These improvements were partially offset by an $11.8 million in rent expense, $5.5 million related to lower throughput, and $4.1 million of reduced gross margin related to the Wyoming refinery incident in the first half of the year. Other impacts include a $1.5 million decrease in losses on sale and a $1.0 million decrease in depreciation and amortization.
Retail. Operating income for our retail segment was $74.7 million for the year ended December 31, 2025, an increase of $9.9 million compared to $64.8 million for the year ended December 31, 2024. The increase in operating income was primarily due to a $2.0 million increase driven by 1% higher fuel sales volumes, a $1.9 million increase in merchandise margins, a $1.7 million increase related to a 2% increase in fuel margins, and a $1.7 million decrease in repairs and maintenance costs. Other impacts include a $0.7 million decrease in employee expenses, a $0.7 million decrease in other operating costs and a $0.6 million decrease in outside services expenses.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Refining. Operating income for our refining segment was $17.4 million for the year ended December 31, 2024, a decrease of $658.8 million compared to $676.2 million for the year ended December 31, 2023. The decrease in operating income was primarily driven by:
• a decrease of $532.5 million related to declining crack spreads at refineries in our legacy portfolio,
• a decrease of $134.7 million in environmental credit and related obligations income across refineries in our legacy portfolio, primarily associated with RIN settlement gains recorded in 2023 with no similar gains in 2024, and
• a decrease of $38.8 million driven by a 1% decrease in refined product sales volumes at our refineries in our legacy portfolio,
partially offset by:
• an increase of $58.3 million related to a favorable change in crude oil differentials at refineries in our legacy portfolio, and
• a favorable impact of $20.8 million related to our derivatives in Hawaii and Washington.
Logistics. Operating income for our logistics segment was $89.4 million for the year ended December 31, 2024, an increase of $19.7 million compared to $69.7 million for the year ended December 31, 2023. The increase was primarily due to a $16.2 million contribution from the Billings Acquisition logistics assets acquired in June 2023. Excluding the contribution from the Billings Acquisition, the increase in operating income was driven by lower repair and maintenance costs of $3.4 million in our legacy portfolio.
Retail. Operating income for our retail segment was $64.8 million for the year ended December 31, 2024, an increase of $8.2 million compared to $56.6 million for the year ended December 31, 2023. The increase in operating income was primarily driven by an increase of $4.6 million related to higher fuel margins, $3.4 million related to higher merchandise sales, and $1.1 million reflecting higher fuel sales volumes, partially offset by $1.3 million of higher operating expenses driven by increases in employee costs during the year ended December 31, 2024, compared to the year ended December 31, 2023.
Discussion of Adjusted Gross Margin by Segment
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Refining . For the year ended December 31, 2025, our refining Adjusted Gross Margin was approximately $1.0 billion, an increase of $382.3 million compared to $618.3 million for the year ended December 31, 2024. The increase in profitability was primarily due to a $238.7 million benefit related to improved crack spreads, an SRE benefit of $202.6 million, and other factors as described below.
• Adjusted Gross Margin for the Washington refinery increased by $10.44 per barrel from $3.25 per barrel during the year ended December 31, 2024, to $13.69 per barrel, including an SRE impact of $5.27 per barrel, during the year ended December 31, 2025. The increase was primarily due to higher crack spreads, an SRE benefit of $74.4 million, and a 3% increase in refined product sales volumes, partially offset by higher environmental costs related to those higher refined product sales volumes and higher feedstock costs. The Washington Index improved by $7.16 per barrel, or 173%. The Washington 3.1.1.1 Product Crack improved by $7.82 per barrel, or 65%.
• Adjusted Gross Margin for the Montana refinery increased by $4.46 per barrel from $11.37 per barrel during the year ended December 31, 2024, to $15.83 per barrel, including an SRE impact of $3.05 per barrel, during the year ended December 31, 2025. The increase was primarily due to an SRE benefit of $57.6 million, higher crack spreads, and a favorable change in realized derivatives. These improvements were partially offset by a 2% decrease in refined product sales volumes with a corresponding decrease in environmental costs. The Montana Index declined by $0.18 per barrel, or 1%. The Montana 6.3.2.1 Product Crack improved by $2.90 per barrel, or 13%.
• Adjusted Gross Margin for the Hawaii refinery increased by $2.35 per barrel from $9.34 per barrel during the year ended December 31, 2024, to $11.69 per barrel during the year ended December 31, 2025. The increase was primarily
due to lower purchased product costs, higher crack spreads, higher yields, and lower other inventory financing cost partially offset by unfavorable changes in feedstock differentials and an unfavorable change in realized derivatives. The Hawaii Index improved by $3.39 per barrel, or 47%. The Singapore 3.1.2 Product Crack improved by $2.77 per barrel, or 21%.
• Adjusted Gross Margin for the Wyoming refinery increased by $17.20 per barrel from $13.73 per barrel during the year ended December 31, 2024, to $30.93 per barrel, including an SRE impact of $14.52 per barrel, during the year ended December 31, 2025. The increase was primarily driven by an SRE benefit of $70.5 million and higher crack spreads, partially offset by higher feedstock costs and a 9% decrease in refined product sales volumes. The Wyoming Index improved by $3.52 per barrel, or 21%. The Wyoming 2.1.1 Product Crack improved by $3.41 per barrel or 18%.
Logistics. For the year ended December 31, 2025, our logistics Adjusted Gross Margin was approximately $147.6 million, an increase of $11.8 million compared to $135.8 million for the year ended December 31, 2024. The increase was primarily due to a $7.3 million decrease in repair and maintenance costs, a $9.4 million decrease in other expenses, and a $3.1 million decrease in environment expenses, partially offset by a $5.5 million decrease related to lower throughput, a $4.1 million decrease related to the Wyoming refinery incident in the first half of the year, and $2.3 million related to higher rent expense.
Retail. For the year ended December 31, 2025, our retail Adjusted Gross Margin was approximately $170.4 million, an increase of $5.7 million compared to $164.7 million for the year ended December 31, 2024. The increase was primarily due to a 1% increase in sales volumes, a $1.9 million increase in merchandise margins, and a $1.7 million increase related to a 2% increase in fuel margins.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Refining . For the year ended December 31, 2024, our refining Adjusted Gross Margin was approximately $618.3 million, a decrease of $376.7 million compared to $995.0 million for the year ended December 31, 2023. The decrease in profitability was primarily due to a decrease in Adjusted Gross Margin contributed by our legacy refining portfolio of $358.6 million reflecting lower crack spreads and a 1.3% decrease in refined product sales volumes, partially offset by favorable impacts from realized derivatives of $114.6 million, favorable changes in crude oil differentials at the refineries in our legacy portfolio, lower intermediation fees of $19.1 million and other factors as described below.
• Adjusted Gross Margin for the Hawaii refinery declined by $5.91 per barrel from $15.25 per barrel during the year ended December 31, 2023, to $9.34 per barrel during the year ended December 31, 2024. The decrease was primarily due to lower crack spreads, partially offset by favorable changes in realized derivatives. The Hawaii Index declined $5.85 per barrel, or 45%.
• Adjusted Gross Margin for the Washington refinery decreased by $6.16 per barrel from $9.41 per barrel during the year ended December 31, 2023, to $3.25 per barrel during the year ended December 31, 2024. The decrease was primarily due to lower crack spreads and a 6% decrease in refined product sales volumes, partially offset by lower environmental costs, and favorable changes in crude oil differentials and realized derivatives. The Washington Index declined $5.68 per barrel, or 58%.
• Adjusted Gross Margin for the Wyoming refinery decreased by $11.42 per barrel from $25.15 per barrel during the year ended December 31, 2023, to $13.73 per barrel during the year ended December 31, 2024. The decrease was primarily due to lower crack spreads, partially offset by favorable changes in crude oil differentials. The Wyoming Index declined $8.01 per barrel, or 33%.
• Adjusted Gross Margin for the Montana refinery decreased by $9.77 per barrel from $21.14 per barrel during the year ended December 31, 2023, to $11.37 per barrel during the year ended December 31, 2024. The decrease was primarily due to lower crack spreads, partially offset by higher refined product sale volumes. The Montana Index declined $9.32 per barrel, or 39%.
Logistics. For the year ended December 31, 2024, our logistics Adjusted Gross Margin was approximately $135.8 million, an increase of $14.6 million compared to $121.2 million for the year ended December 31, 2023. The increase was primarily due to a $14.7 million increased contribution from the Billings Acquisition logistics assets acquired in June 2023.
Retail. For the year ended December 31, 2024, our retail Adjusted Gross Margin was approximately $164.7 million, an increase of $9.4 million compared to $155.3 million for the year ended December 31, 2023. The increase was primarily related to a $4.1 million increase in fuel volumes and $3.5 million of increased merchandise margins.
Discussion of Consolidated Results
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Revenues. For the year ended December 31, 2025, revenues were $7.5 billion, a $0.5 billion decrease compared to $8.0 billion for the year ended December 31, 2024. The decrease was primarily driven by $0.6 billion lower refining revenue related to lower crude oil prices, partially offset by a $0.2 billion increase related to higher average product crack spreads. The Combined Index increased 32% as compared to the prior period. Average Brent crude oil prices and average WTI crude oil prices both declined 15% compared to the prior period. Revenues at our retail segment decreased $8.1 million primarily due to a 3% decrease in fuel prices, partially offset by a 1% increase in fuel sales volumes and a 1% increase in merchandise sales. Please read our key operating statistics for further information.
Cost of Revenues (Excluding Depreciation). For the year ended December 31, 2025, cost of revenues (excluding depreciation) was $6.1 billion, a $1.0 billion decrease compared to $7.1 billion for the year ended December 31, 2024, primarily driven by the decreases in crude oil prices discussed above, an SRE benefit of $0.2 billion related to SREs granted for the 2019 through 2024 compliance years, and lower purchased product costs, partially offset by unfavorable feedstock costs.
Operating Expense (Excluding Depreciation). For the year ended December 31, 2025, operating expense (excluding depreciation) was approximately $587.7 million, which was relatively consistent with $584.3 million for the year ended December 31, 2024.
Depreciation and Amortization . For the year ended December 31, 2025, D&A expense was approximately $144.3 million, an increase of $12.7 million compared to $131.6 million for the year ended December 31, 2024. The increase was primarily driven by a $14.8 million increase in Montana primarily related to the amortization of turnaround assets and a $3.0 million increase in Wyoming driven by equipment damaged as a result of the February 2025 operational incident, partially offset by a $4.8 million decrease in D&A at our Hawaii Refinery reflecting fully amortized turnaround assets.
General and Administrative Expense (Excluding Depreciation). For the year ended December 31, 2025, General and administrative expense (excluding depreciation) was approximately $98.5 million, a decrease of $10.3 million compared to $108.8 million for the year ended December 31, 2024. The decrease was primarily due to $13.1 million of stock-based compensation expenses related to CEO transition costs in 2024 and a $7.8 million decrease in renewable project costs, partially offset by a $7.5 million increase in employee costs and a $2.2 million increase in IT expenses.
Equity Earnings from Refining and Logistics Investments. For the year ended December 31, 2025, Equity earnings from refining and logistics investments were $26.3 million, an increase of $14.4 million compared to $11.9 million for the year ended December 31, 2024. The increase was primarily due to a $13.9 million increase in our proportionate share of YELP’s net income. Please read “Note 3—Refining and Logistics Equity Investments” to our consolidated financial statements under Item 8 of this Form 10-K for additional information.
Acquisition and Integration Costs. For the year ended December 31, 2025, we incurred $4.3 million of acquisition and integration costs, primarily related to the establishment of the Hawaii Renewables joint venture. For the year ended December 31, 2024, we incurred an immaterial amount of acquisition and integration costs. Please read “Note 3—Refining and Logistics Equity Investments” to our consolidated financial statements under Item 8 of this Form 10-K for more information.
Par West Redevelopment and Other Costs. For the year ended December 31, 2025, Par West redevelopment and other costs were $14.8 million, an increase of $2.3 million compared to $12.5 million for the year ended December 31, 2024. The increase was primarily due to an increase in redevelopment activities.
Other Operating Loss (Gain), Net. For the year ended December 31, 2025, other operating gain, net was $7.2 million, primarily related to a $10.3 million decrease due to the remeasurement of Montana Refinery environmental remediation liabilities, partially offset by a $3.9 million increase due to the remeasurement of Wyoming Refinery environmental remediation liabilities. Please read “Note 19—Commitments and Contingencies” to our consolidated financial statements under Item 8 of this Form 10-K for more information. For the year ended December 31, 2024, other operating loss, net was immaterial.
Interest Expense and Financing Costs, Net . For the year ended December 31, 2025, our Interest expense and financing costs, net were approximately $82.4 million, which was relatively consistent with $82.8 million for the year ended December 31, 2024.
Debt Extinguishment and Commitment Costs. For the year ended December 31, 2025, we incurred $1.1 million of debt extinguishment and commitment costs in connection with the repricing of our Term Loan Credit Agreement. For the year ended December 31, 2024, our Debt extinguishment and commitment costs of $1.7 million were incurred in connection with the repricing of our Term Loan Credit Agreement, the termination of our LC Facility, and the expiration of our Supply and Offtake Agreement in 2024. Please read “Note 15—Debt” to our consolidated financial statements under Item 8 of this Form 10-K for further discussion.
Other Expense, Net . For the year ended December 31, 2025, other expense was $0.7 million, a decrease of $1.2 million compared to $1.9 million for the year ended December 31, 2024. The decrease was primarily due to 2024 legal expenses unrelated to operating activities with no similar 2025 expenses.
Equity earnings (losses) from Laramie Energy, LLC. For the year ended December 31, 2025, equity earnings from Laramie Energy, LLC were $23.3 million, an increase of $23.6 million compared to $0.3 million of equity losses for the year ended December 31, 2024. The increase was primarily due to a $23.6 million increase in our proportionate share of Laramie Energy’s net income. On April 29, 2024, Laramie Energy made a one-time cash distribution to its owners, including us, based on ownership percentage. Our share of this distribution was $1.5 million. Please read “Note 4—Investment in Laramie Energy” to our consolidated financial statements under Item 8 of this Form 10-K for more information.
Income Taxes. For the year ended December 31, 2025, we recorded an income tax expense of $110.8 million primarily due to a $100.4 million non-cash deferred tax expense driven by an increase in our 2025 taxable income. For the year ended December 31, 2024, we recorded an income tax benefit of $5.7 million primarily due to a $5.5 million non-cash deferred tax benefit driven by our 2024 pre-tax losses. Please read “Note 23—Income Taxes” to our consolidated financial statements under Item 8 of this Form 10-K for more information.
Net Loss Attributable to Noncontrolling Interests . For the year ended December 31, 2025, losses attributable to noncontrolling interests were $2.3 million, related to our Hawaii Renewables joint venture. Please read “Note 5—Joint Venture” and “Note 20—Stockholders’ Equity” to our consolidated financial statements under Item 8 of this Form 10-K for more information.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Revenues. For the year ended December 31, 2024, Revenues were $8.0 billion, a $0.2 billion decrease compared to $8.2 billion for the year ended December 31, 2023. The decrease was primarily due to a $0.7 billion decrease in third-party revenues when comparing our legacy refining operations, of which $0.5 billion was related to lower average crack spreads, $0.1 billion was related to lower crude oil prices, and $0.1 billion was related to a 1% decrease in sales volumes. This decrease was partially offset by an increase of $0.5 billion in contributions from the Billings Acquisition, which closed on June 1, 2023. The Washington Index, Hawaii Index, Montana Index, and Wyoming Index declined 58%, 45%, 39%, and 33% respectively, compared to 2023. Average Brent crude oil prices declined 3% and average WTI crude oil prices declined 2% as compared to the prior period. Revenues at our retail segment decreased $7.7 million primarily due to a 6% decrease in fuel sales prices, partially offset by a 3% increase in sales volumes and a 5% increase in merchandise sales.
Cost of Revenues (Excluding Depreciation). For the year ended December 31, 2024, Cost of revenues (excluding depreciation) was $7.1 billion, a $0.3 billion increase compared to $6.8 billion for the year ended December 31, 2023, primarily driven by an additional $0.5 billion in contributions related to a full year of results from our Billings assets, partially offset by decreases in crude oil prices at our legacy refining locations as discussed above.
Operating Expense (Excluding Depreciation). For the year ended December 31, 2024, operating expense (excluding depreciation) was approximately $584.3 million, an increase of $98.7 million compared to $485.6 million for the year ended December 31, 2023. The increase was primarily driven by a $96.2 million increase in expense from the Billings Acquisition.
Depreciation and Amortization . For the year ended December 31, 2024, D&A expense was approximately $131.6 million, an increase of $11.8 million compared to $119.8 million for the year ended December 31, 2023. The increase was primarily driven by $18.4 million of additional D&A attributable to the Billings Acquisition, partially offset by a $6.3 million decrease in D&A from our Hawaii Refinery reflecting fully depreciated assets in the second half of 2023 and the second quarter of 2024.
General and Administrative Expense (Excluding Depreciation). For the year ended December 31, 2024, general and administrative expense (excluding depreciation) was approximately $108.8 million, an increase of $17.4 million compared to $91.4 million for the year ended December 31, 2023. The increase was primarily due to $13.1 million of stock-based
compensation expenses related to CEO transition costs in the first quarter of 2024, a $3.1 million increase in IT expenses, and a $2.1 million increase in employee costs.
Equity earnings from refining and logistics investments. For the year ended December 31, 2024, equity earnings from refining and logistics investments were $11.9 million, which was relatively consistent with $11.8 million for the year December 31, 2023. Please read “Note 3—Refining and Logistics Equity Investments” to our consolidated financial statements under Item 8 of this Form 10-K for additional information.
Acquisition and Integration Costs. For the year ended December 31, 2024, we incurred an immaterial amount of acquisition and integration costs. For the year ended December 31, 2023, we incurred $17.5 million of acquisition and integration costs related to the Billings Acquisition, which closed on June 1, 2023. Please read “Note 6—Acquisitions” to our consolidated financial statements under Item 8 of this Form 10-K for more information.
Par West redevelopment and other costs. For the year ended December 31, 2024, Par West redevelopment and other costs were $12.5 million, an increase of $1.1 million compared to $11.4 million for the year ended December 31, 2023, associated with the operation and decommissioning of our Par West facility. Increased redevelopment activity was the primary driver of the increase in costs.
Interest Expense and Financing Costs, Net . For the year ended December 31, 2024, our interest expense and financing costs, net were approximately $82.8 million, an increase of $10.3 million compared to $72.5 million for the year ended December 31, 2023. $15.8 million of the increase in interest expense and financing costs, primarily related to higher ABL Credit Facility and Term Loan B Facility balances in 2024, and a $7.1 million decrease in interest income from our investment accounts. This activity was partially offset by a $12.8 million net decrease in inventory financing costs related to the refinancing of our inventory financing agreements in 2023 and 2024. Please read “Note 13—Inventory Financing Agreements” and “Note 15—Debt” to our consolidated financial statements under Item 8 of this Form 10-K for further discussion on our inventory financing and indebtedness, respectively.
Debt extinguishment and commitment costs. For the year ended December 31, 2024, our debt extinguishment and commitment costs were approximately $1.7 million in connection with the repricing of our Term Loan Credit Agreement, the termination of our LC Facility and the expiration of our Supply and Offtake Agreement in the second quarter of 2024. For the year ended December 31, 2023, our debt extinguishment and commitment costs were approximately $19.2 million in connection with the refinancing of our long-term debt in the first quarter of 2023 and the termination of the Washington Refinery Intermediation Agreement in the fourth quarter of 2023. Please read “Note 15—Debt” to our consolidated financial statements under Item 8 of this Form 10-K for further discussion.
Other expense, net. For the year ended December 31, 2024, other expense was $1.9 million, an increase of $1.8 million compared to $0.1 million for the year ended December 31, 2023. 2024 activity was primarily due to $0.8 million of 2024 legal expenses unrelated to operating activities with no similar 2023 activity.
Equity earnings (losses) from Laramie Energy, LLC. For the year ended December 31, 2024, equity losses from Laramie Energy, LLC were $0.3 million compared to $25.0 million of equity earnings for the year ended December 31, 2023. For the year ended December 31, 2024, our proportionate share of Laramie Energy’s net loss was $6.8 million, partially offset by $6.5 million of accretion of the basis difference. On April 29, 2024, Laramie Energy made a cash distribution to its owners, including us, based on ownership percentage. Our share of this distribution was $1.5 million. For the year ended December 31, 2023, our proportionate share of Laramie Energy’s net income was $19.5 million, and the accretion of basis was $5.5 million. On March 1, 2023, following a refinancing of certain debt, Laramie Energy, LLC was permitted to make a one-time cash distribution to its owners based on ownership percentage. Our share of this distribution was $10.7 million. Please read “Note 4—Investment in Laramie Energy” to our consolidated financial statements under Item 8 of this Form 10-K for more information.
Income Taxes. For the year ended December 31, 2024, we recorded an income tax benefit of $5.7 million primarily due to a $5.5 million non-cash deferred tax benefit driven by our 2024 pre-tax losses. For the year ended December 31, 2023, we recorded an income tax benefit of $115.3 million primarily related to the release of the federal tax valuation allowance in the fourth quarter of 2023, partially offset by state taxes. Please read “Note 23—Income Taxes” to our consolidated financial statements under Item 8 of this Form 10-K for more information.
Condensed Consolidating Financial Information
On February 28, 2023, Par Petroleum, LLC (“Par Borrower”) entered into the Term Loan Credit Agreement (the “Term Loan Credit Agreement”) due 2030 with Wells Fargo Bank, National Association, as administrative agent, and the
lenders party thereto. The Term Loan Credit Agreement was co-issued by Par Petroleum Finance Corp. (together with the Par Borrower, the “Term Loan Borrowers”), which has no independent assets or operations. The Term Loan Credit Agreement is guaranteed on a senior unsecured basis only as to payment of principal and interest by Par Pacific Holdings, Inc. (the “Parent”) and is guaranteed on a senior secured basis by all of the subsidiaries of Par Borrower. The Term Loan Credit Agreement proceeds were used to refinance our existing Term Loan B and repurchase our outstanding 7.75% Senior Secured Notes and 12.875% Senior Secured Notes, all three of which had similar guarantees that were replaced by those on the Term Loan Credit Agreement.
The following supplemental condensed consolidating financial information reflects (i) the Parent’s separate accounts, (ii) Par Borrower and its consolidated subsidiaries’ accounts (which are all guarantors of the Term Loan Credit Agreement), (iii) the accounts of subsidiaries of the Parent that are not guarantors of the Term Loan Credit Agreement and consolidating adjustments and eliminations, and (iv) the Parent’s consolidated accounts for the dates and periods indicated. For purposes of the following condensed consolidating information, the Parent’s investment in its subsidiaries is accounted for under the equity method of accounting (dollar amounts in thousands).
As of December 31, 2025
Parent Guarantor
Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations
Par Pacific Holdings, Inc. and Subsidiaries
ASSETS
Current assets
Cash and cash equivalents
Restricted cash
Trade accounts receivable
Inventories
Prepaid and other current assets
Due from related parties
Current note receivable from subsidiaries
Total current assets
Property, plant, and equipment
Property, plant, and equipment
Less accumulated depreciation and amortization
Property, plant, and equipment, net
Long-term assets
Operating lease right-of-use (“ROU”) assets
Refining and logistics equity investments
Investment in Laramie Energy, LLC
Investment in subsidiaries
Intangible assets, net
Goodwill
Long term note receivable from subsidiaries
Other long-term assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of long-term debt
Obligations under inventory financing agreements
Accounts payable
Accrued taxes
Operating lease liabilities
Other accrued liabilities
Due to related parties
Total current liabilities
Long-term liabilities
Long-term debt, net of current maturities
Finance lease liabilities
Operating lease liabilities
Other liabilities
Total liabilities
Commitments and contingencies
Noncontrolling interest
Stockholders’ equity
Preferred stock
Common stock
Additional paid-in capital
Accumulated earnings (deficit)
Accumulated other comprehensive income (loss)
Total stockholders’ equity
Total liabilities, noncontrolling interest, and stockholders’ equity
As of December 31, 2024
Parent Guarantor
Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations
Par Pacific Holdings, Inc. and Subsidiaries
ASSETS
Current assets
Cash and cash equivalents
Restricted cash
Trade accounts receivable
Inventories
Prepaid and other current assets
Due from related parties
Total current assets
Property, plant, and equipment
Property, plant, and equipment
Less accumulated depreciation and amortization
Property, plant, and equipment, net
Long-term assets
Operating lease right-of-use (“ROU”) assets
Refining and logistics equity investments
Investment in Laramie Energy, LLC
Investment in subsidiaries
Intangible assets, net
Goodwill
Other long-term assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of long-term debt
Obligations under inventory financing agreements
Accounts payable
Accrued taxes
Operating lease liabilities
Other accrued liabilities
Due to related parties
Total current liabilities
Long-term liabilities
Long-term debt, net of current maturities
Finance lease liabilities
Operating lease liabilities
Other liabilities
Total liabilities
Commitments and contingencies
Stockholders’ equity
Preferred stock
Common stock
Additional paid-in capital
Accumulated earnings (deficit)
Accumulated other comprehensive income (loss)
Total stockholders’ equity
Total liabilities and stockholders’ equity
Year Ended December 31, 2025
Parent Guarantor
Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations
Par Pacific Holdings, Inc. and Subsidiaries
Revenues
Operating expenses
Cost of revenues (excluding depreciation)
Operating expense (excluding depreciation)
Depreciation and amortization
General and administrative expense (excluding depreciation)
Equity earnings from refining and logistics investments
Acquisition and integration costs
Par West redevelopment and other costs
Other operating loss (gain), net
Total operating expenses
Operating income (loss)
Other income (expense)
Interest expense and financing costs, net
Debt extinguishment and commitment costs
Other income (expense), net
Equity earnings (losses) from subsidiaries
Equity earnings (losses) from Laramie Energy, LLC
Total other income (expense), net
Income (loss) before income taxes
Income tax benefit (expense) (1)
Net income (loss)
Less:
Net loss attributable to noncontrolling interest
Net income attributable to Par Pacific stockholders
Adjusted EBITDA
Year Ended December 31, 2024
Parent Guarantor
Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations
Par Pacific Holdings, Inc. and Subsidiaries
Revenues
Operating expenses
Cost of revenues (excluding depreciation)
Operating expense (excluding depreciation)
Depreciation and amortization
General and administrative expense (excluding depreciation)
Equity earnings from refining and logistics investments
Acquisition and integration costs (2)
Par West redevelopment and other costs
Other operating loss (gain), net
Total operating expenses
Operating income (loss)
Other income (expense)
Interest expense and financing costs, net
Debt extinguishment and commitment costs
Other income (expense), net
Equity earnings (losses) from subsidiaries
Equity earnings (losses) from Laramie Energy, LLC
Total other income (expense), net
Income (loss) before income taxes
Income tax benefit (expense) (1)
Net income (loss)
Less:
Net income attributable to noncontrolling interest
Net loss attributable to Par Pacific stockholders
Adjusted EBITDA
Year Ended December 31, 2023
Parent Guarantor
Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations
Par Pacific Holdings, Inc. and Subsidiaries
Revenues
Operating expenses
Cost of revenues (excluding depreciation)
Operating expense (excluding depreciation)
Depreciation and amortization
General and administrative expense (excluding depreciation)
Equity earnings from refining and logistics investments
Acquisition and integration costs (2)
Par West redevelopment and other costs
Other operating loss (gain), net
Total operating expenses
Operating income (loss)
Other income (expense)
Interest expense and financing costs, net
Debt extinguishment and commitment costs
Other income (expense), net
Equity earnings (losses) from subsidiaries
Equity earnings (losses) from Laramie Energy, LLC
Total other income (expense), net
Income (loss) before income taxes
Income tax benefit (expense) (1)
Net income (loss)
Less:
Net income attributable to noncontrolling interest
Net income attributable to Par Pacific stockholders
Adjusted EBITDA
(1) The income tax benefit (expense) of the Parent Guarantor and Par Borrower and Subsidiaries is determined using the separate return method. The Non-Guarantor Subsidiaries and Eliminations column includes tax benefits recognized at the Par consolidated level that are primarily associated with changes to the consolidated valuation allowance and other deferred tax balances.
(2) The acquisition and integration expense related to the Billings Acquisition was pushed down from the Parent Guarantor to the Issuer and Subsidiaries upon consummation of the transaction.
Non-GAAP Financial Measures
Adjusted EBITDA for the supplemental consolidating condensed financial information, which is segregated at the “Parent Guarantor,” “Par Borrower and Subsidiaries,” and “Non-Guarantor Subsidiaries and Eliminations” levels, is calculated in the same manner as for the Par Pacific Holdings, Inc. Adjusted EBITDA calculations. See “Results of Operations — Non-GAAP Performance Measures — Adjusted Net Income (Loss) attributable to Par Pacific stockholders and Adjusted EBITDA” above.
The following tables present a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income (loss), on a historical basis for the periods indicated (in thousands):
Year Ended December 31, 2025
Parent Guarantor
Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations
Par Pacific Holdings, Inc. and Subsidiaries
Net income (loss)
Inventory valuation adjustment
Environmental obligation mark-to-market adjustments
Unrealized loss (gain) on derivatives
Par West redevelopment and other costs
Acquisition and integration costs
Debt extinguishment and commitment costs
Severance costs and other non-operating expense (2)
Equity losses from Laramie Energy, LLC, excluding cash distributions
Par's portion of accounting policy differences from refining and logistics investments
Other operating loss (gain), net
Depreciation and amortization
Interest expense and financing costs, net, excluding unrealized interest rate derivative loss (gain)
Laramie Energy, LLC cash distributions to Par
Par's portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments
Equity losses (income) from subsidiaries
Income tax expense (benefit)
Adjusted EBITDA (1)
Year Ended December 31, 2024
Parent Guarantor
Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations
Par Pacific Holdings, Inc. and Subsidiaries
Net income (loss)
Inventory valuation adjustment
Environmental obligation mark-to-market adjustments
Unrealized loss on derivatives
Par West redevelopment and other costs
Acquisition and integration costs
Debt extinguishment and commitment costs
Severance costs and other non-operating expense (2)
Equity earnings from Laramie Energy, LLC, excluding cash distributions
Par's portion of accounting policy differences from refining and logistics investments
Other operating loss (gain), net
Depreciation and amortization
Interest expense and financing costs, net, excluding unrealized interest rate derivative loss (gain)
Laramie Energy, LLC cash distributions to Par
Par's portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments
Equity losses (income) from subsidiaries
Income tax expense (benefit)
Adjusted EBITDA (1)
Year Ended December 31, 2023
Parent Guarantor
Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations
Par Pacific Holdings, Inc. and Subsidiaries
Net income (loss)
Inventory valuation adjustment
Environmental obligation mark-to-market adjustments
Unrealized gain on derivatives
Par West redevelopment and other costs
Acquisition and integration costs
Debt extinguishment and commitment costs
Severance costs and other non-operating expense
Other operating loss (gain), net
Equity earnings from Laramie Energy, LLC, excluding cash distributions
Depreciation and amortization
Interest expense and financing costs, net, excluding unrealized interest rate derivative loss (gain)
Laramie Energy, LLC cash distributions to Par
Par’s portion of interest, taxes, depreciation and amortization expense from refining and logistics investments
Equity losses (income) from subsidiaries
Income tax expense (benefit)
Noncontrolling interest impact of non-GAAP adjustments
Adjusted EBITDA (1)
(1) Please read the Non-GAAP Performance Measures and Adjusted Net Income (Loss) attributable to Par Pacific stockholders and Adjusted EBITDA discussions above for information regarding the components of Adjusted Net Income (Loss) attributable to Par Pacific stockholders and Adjusted EBITDA.
(2) For the years ended December 31, 2025 and 2024, we incurred $0.8 million and $13.1 million of stock-based compensation expenses associated with equity awards modifications, respectively. For the year ended December 31, 2024, we incurred $0.8 million for a legal settlement unrelated to current operating activities.
Liquidity and Capital Resources
Capital Resources and Available Liquidity
Our liquidity and capital requirements are primarily a function of our debt maturities and debt service requirements and contractual obligations, capital expenditures, turnaround outlays, and working capital needs. Examples of working capital needs include purchases and sales of commodities and associated margin and collateral requirements, facility maintenance costs, and other costs such as payroll. Our primary sources of liquidity are cash flows from operations, cash on hand, amounts available under our credit agreements, and access to capital markets. Generally, the primary uses of our capital resources have been in the operations of our refining and retail segments, for payments related to acquisitions, to repay or refinance indebtedness, and to repurchase shares of our common stock.
Our liquidity position as of December 31, 2025, was $914.6 million, consisting of $164.1 million of cash and cash equivalents and $750.5 million of availability under the ABL Credit Facility. For the year ended December 31, 2025, we generated cash from operations of $445.3 million. Please read the Cash Flows discussion below for information regarding additional sources and uses of cash for the fiscal year ended December 31, 2025.
We believe our cash flows from operations and available capital resources will be sufficient to meet our current capital and turnaround expenditures, working capital, and debt service requirements for the next 12 months. Please read the Cash Requirements section below for further information. We may seek to raise additional debt or equity capital to fund acquisitions and any other significant changes to our business or to refinance existing debt. We cannot offer any assurances that such capital will be available in sufficient amounts or at an acceptable cost. Our expected cash inflows and cash requirements are subject to
the risks and uncertainties discussed in the Cautionary Statement Regarding Forward Looking Statements section of Item 1: Business and, for further information, the “Operating Risks” section of “Item 1A. Risk Factors”.
Significant Developments
On June 27, 2025, we entered into a RINs financing agreement with Citi (the “Product Financing Agreement”) to, among other things, provide funding to finance RINs; borrowings under the agreement are not to exceed $450 million in the aggregate when combined with obligations under the Inventory Intermediation Agreement. On October 2, 2025, we entered into an agreement with Wells Fargo (the “Renewables Intermediation Agreement”) to, among other things, provide funding to finance renewables feedstock. On October 21, 2025, we completed the transaction to form the Hawaii Renewables joint venture with Alohi in which Alohi contributed $100.0 million in cash in exchange for a minority interest in Hawaii Renewables. In connection with the transaction, Hawaii Renewables distributed $83.0 million to Par and approximately $17.0 million of Alohi’s contribution was retained by Hawaii Renewables to fund remaining construction and initial working capital. In connection with the Renewables Intermediation Agreement, on December 16, 2025, Hawaii Renewables entered into a Letter of Credit Facility Agreement (the “Renewables LC Facility Agreement”). On December 17, 2025, we amended the Term Loan Credit Agreement to reduce the applicable margin by 50 basis points. Please read “Note 5—Joint Venture”, “Note 13—Inventory Financing Agreements”, and “Note 15—Debt” to our consolidated financial statements under Item 8 of this Form 10-K for further information.
During the years ended December 31, 2025, 2024, and 2023, we had significant activity related to our inventory financing and debt agreements. Please read “Note 13—Inventory Financing Agreements” and “Note 15—Debt” to our consolidated financial statements under Item 8 of this Form 10-K for further discussion of significant activity related to our inventory financing and debt agreements, respectively.
Cash Requirements
We have various cash requirements stemming from investment strategies, contractual obligations, and financial commitments in the normal course of our operations and financing activities. Contractual obligations include future cash payments required under existing contractual arrangements, such as debt and lease agreements. These cash requirements and obligations may result from both general financing activities and from commercial arrangements that are directly related to our operating activities. We also continue to seek strategic investments in business opportunities, however the amount and timing of those investments are not predictable. Our known material cash requirements as of December 31, 2025, include the following and read “Note 15—Debt”, “Note 13—Inventory Financing Agreements”, and “Note 18—Leases” to our consolidated financial statements under Item 8 of this Form 10-K for our long-term commitments and further discussion:
Debt and Interest Payments. Current and long-term debt includes the scheduled principal and interest payments related to our outstanding debt obligations and ABL Credit Facility. Our estimated interest payments due for 2026 are $44.4 million and our total estimated undiscounted future interest payments will be $186.8 million on the debt obligations held as of December 31, 2025, and using interest rates in effect as of December 31, 2025. Our estimated principal payments due for 2026 are $7.5 million and our total estimated undiscounted future principal payments are $814.8 million on the debt obligations held as of December 31, 2025.
Product Financing. On June 27, 2025, we entered into a RINs financing agreement with Citi (the “Product Financing Agreement”) to, among other things, provide funding to finance RINs. As of December 31, 2025, there were no product financing obligations under the Product Financing Agreement.
Renewables Financing. On October 2, 2025, Hawaii Renewables entered into the Renewables Intermediation Agreement with Wells Fargo pursuant to which the parties agreed to a framework for entering into a series of Swap Transactions. In connection with the Renewables Intermediation Agreement, on December 16, 2025, we entered into the Renewables LC Facility Agreement. As of December 31, 2025, there were $31.3 million of outstanding obligations under the Renewables Intermediation Agreement with required cash outlays in the next twelve months and no letters of credit outstanding under the Renewables LC Facility.
Capital Expenditures and Turnaround Costs. Our deferred turnaround costs and capital expenditures, including land and building purchases but excluding acquisitions, for the year ended December 31, 2025, totaled approximately $250.1 million and were primarily related to 2025 turnaround activities and related scheduled maintenance work at our Montana refinery, repair and replacement work related to our Wyoming operational incident, the Hawaii Renewables hydrotreater project, and other capital projects and sustaining maintenance at all of our refineries and other businesses. Our capital expenditures and deferred turnaround costs budget for 2026 is approximately $190 to $220 million and primarily relates to the planned Hawaii and Wyoming refinery turnarounds and other scheduled maintenance, capital projects, and turnaround projects related to
regulatory compliance, information technology, and growth across each of our businesses with required cash outlays primarily expected in the next twelve months.
Operating Lease Liabilities. Operating lease liabilities primarily include obligations associated with the lease of land, office space, retail facilities, and other facilities used in the storage and transportation of crude oil and refined products. Please read “Note 18—Leases” to our consolidated financial statements under Item 8 of this Form 10-K for further discussion, including our related short- and long-term cash requirements.
Finance Lease Liabilities. Finance lease liabilities primarily include obligations associated with the lease of retail facilities and vehicles. Please read “Note 18—Leases” to our consolidated financial statements under Item 8 of this Form 10-K for further discussion, including our related short- and long-term cash requirements.
Purchase Commitments. Purchase commitments primarily consist of contracts executed as of December 31, 2025, for the purchase of crude oil for use at our refineries that are scheduled for delivery in 2026. As of December 31, 2025, we have non-cancelable material purchase commitments of $2.6 billion, with required cash outlays primarily expected in the next twelve months.
Environmental Matters. Our operations are subject to extensive and periodically-changing federal, state, and local environmental laws and regulations including but not limited to air emissions, wastewater discharges, and solid and hazardous waste management activities. Additionally, we have asset retirement obligations in the period in which we have a legal obligation, whether by government or regulatory action or contractual arrangement, to incur these costs and can make a reasonable estimate of the fair value of the liability. Please read “Note 12—Asset Retirement Obligations” and “Note 19—Commitments and Contingencies” to our consolidated financial statements under Item 8 of this Form 10-K for more information, including estimated long term cash requirements.
Other Cash Commitments. We may from time to time seek to retire or repurchase our common stock through cash purchases, in open market purchases, privately negotiated transactions, or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material. On February 21, 2025, the Board authorized and approved a share repurchase program authorizing the repurchase of up to $250 million of common stock, with no specified end date. This repurchase program terminated and replaced the prior share repurchase authorization. Please read “Note 20—Stockholders’ Equity” to our consolidated financial statements under Item 8 of this Form 10-K for additional discussion on the share repurchase program. The Term Loan Credit Agreement may also require annual prepayments of principal with a variable percentage of our excess cash flow, 50%, 25%, or 0% depending on our consolidated year end secured leverage ratio (as defined in the Term Loan Credit Agreement).
Cash Flows
The following table summarizes cash activities for the years ended December 31, 2025, 2024, and 2023 (in thousands):
Years Ended December 31,
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Cash flows for the year ended December 31, 2025
Net cash provided by operating activities for the year ended December 31, 2025, was driven primarily by net income of $367.1 million, non-cash charges to operations of approximately $200.8 million, and net cash used for changes in operating
assets and liabilities of approximately $122.5 million. Non-cash charges to operations consisted primarily of the following adjustments:
depreciation and amortization expenses of $144.3 million and
a $100.4 million decrease in net deferred tax assets driven by our net income during the period,
partially offset by
unrealized gain on derivatives contracts of $26.3 million and
$26.3 million of non-cash equity earnings from our refining and logistics investments.
Net cash used for changes in operating assets and liabilities resulted primarily from:
a $255.7 million increase in RINs and environmental credits as a result of current year purchases and SREs received for the 2019 through 2024 compliance years,
an increase in deferred turnaround assets of $101.2 million primarily driven by turnaround activities at the Montana refinery,
a $94.8 million decrease in Accounts payable driven by timing and lower crude prices, and
a $59.9 million decrease in Obligations under inventory financing agreements primarily related to decreases in the step-out liability driven by lower financed inventory volumes and prices,
partially offset by
an increase in environmental credit obligations of $148.4 million driven by current period production,
a $116.2 million decrease in inventories other than RINs and environmental credits primarily related to crude oil and feedstock inventories.
an $84.7 million decrease in Accounts receivable primarily driven by timing of collections, and
decrease in prepaid and other primarily driven by $31.6 million decrease in collateral posted with broker to support commodity derivative positions.
Net cash used in investing activities for the year ended December 31, 2025, consisted primarily of $148.9 million of additions to property, plant, and equipment driven by profit improvement and maintenance projects at our refineries, including our Hawaii renewable hydrotreater project, completed maintenance at our Montana refinery, and repair and replacement work related to our Wyoming operational incident, partially offset by $6.1 million of proceeds from the sale of assets, primarily related to the sale of property in Hawaii and Pacific Northwest retail stores.
Net cash used in financing activities was approximately $330.4 million for the year ended December 31, 2025, and consisted primarily of the following activities:
net debt repayments of $332.5 million primarily driven by activity in our ABL Credit Facility and
$123.9 million of common stock repurchases under the share repurchase program,
partially offset by
the sale of subsidiary units in our Hawaii Renewables joint venture of $100.0 million.
Cash flows for the year ended December 31, 2024
Net cash provided by operating activities for the year ended December 31, 2024, was driven primarily by non-cash charges to operations of approximately $208.6 million, net cash used for changes in operating assets and liabilities of approximately $91.5 million, and a net loss of $33.3 million. Non-cash charges to operations consisted primarily of the following adjustments:
depreciation and amortization expenses of $131.6 million;
unrealized loss on derivatives contracts of $42.5 million;
stock based compensation costs of $25.7 million, including $13.1 million related to the accelerated vesting of equity awards and modification of vested equity awards related to our CEO; and
dividends received from our refining and logistic investments of $13.1 million,
partially offset by
$11.9 million of non-cash equity earnings from our refining and logistics investments.
Net cash used for changes in operating assets and liabilities resulted primarily from:
an increase in deferred turnaround assets of $73.5 million driven by the 2024 Montana refinery turnarounds,
a $53.5 million decrease in Obligations under inventory financing agreements primarily related to the refinancing of our inventory financing agreements and a decrease in crude oil prices, and
a decrease in our gross environmental credit obligations primarily related to the settlement of our 2023 RINs and CCA obligations combined with lower environmental credit values,
partially offset by
a $62.9 million decrease in inventories, primarily related to the retirement of environmental credits and lower refined product and warehouse inventories.
Net cash used in investing activities for the year ended December 31, 2024, consisted primarily of:
$135.5 million in additions to property, plant, and equipment driven by maintenance projects at our refineries and various profit improvement projects.
Net cash used in financing activities for the year ended December 31, 2024, was approximately $37.0 million and consisted primarily of the following activities:
payments of $547.6 million related to the expiration of our Supply and Offtake Agreement and related deferred payment arrangement in the second quarter of 2024,
repurchases of common stock of $142.0 million, and
aggregate payments of $9.6 million of deferred loan costs,
partially offset by
net debt borrowings of $456.6 million primarily driven by activity in our ABL Credit Facility and the increase to the size of our Term Loan Credit Agreement, and
proceeds of $203.1 million related to the step-in of the Inventory Intermediation Agreement in the second quarter of 2024.
Cash flows for the year ended December 31, 2023
Net cash provided by operating activities for the year ended December 31, 2023, was primarily driven by net income of $728.6 million, non-cash earnings from operations of approximately $53.2 million, and net cash used for changes in operating assets and liabilities of approximately $96.3 million. Non-cash earnings from operations consisted primarily of the following adjustments:
deprecation and amortization expenses of $119.8 million,
debt commitment and extinguishment costs of $19.2 million, and
stock based compensation costs of $11.6 million,
partially offset by
a benefit from deferred taxes of $126.3 million,
unrealized gain on derivatives contracts of $49.7 million,
a gain of $25.0 million of our equity investment in Laramie Energy, and
$11.8 million of non-cash equity earnings from our refining and logistics investments.
Net cash used for changes in operating assets and liabilities resulted primarily from:
a decrease in gross environmental credit obligations primarily related tot the settlement of our 2020, 2021, and 2022 RINs obligations, and
an increase in prepaid and other primarily driven by a $65.5 million increase in Advances to suppliers for crude purchases.
Net cash used in investing activities for the year ended December 31, 2023, consisted primarily of:
a $595.4 million used for the Billings Acquisition, and
$82.3 million in additions to property, plant, and equipment driven by maintenance projects at our refineries and various profit improvement projects, including construction of a flagship retail store in Washington, improved crude processing equipment at our Hawaii refinery, a co-processing unit at our Tacoma refinery, and various IT infrastructure improvements,
partially offset by
a $10.7 million cash distribution received from Laramie Energy in the first quarter of 2023.
Net cash used in financing activities for the year ended December 31, 2023, was approximately $135.6 million and consisted primarily of the following activities:
net repayments under the Discretionary Draw Facility and Merrill Lynch Commodities, Inc. (“MLC”) receivable advances of $96.0 million,
aggregate payments of $23.1 million of deferred loan costs and debt extinguishment costs, related to our debt refinancing, and
repurchases of common stock of $67.8 million,
partially offset by
net borrowings of debt of $145.1 million primarily driven by the refinancing and consolidation of our debt.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations were based on the consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements required us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. Our significant accounting policies are described in our audited consolidated financial statements under Item 8 of this Form 10-K. We have identified certain estimates as being of particular importance to the portrayal of our financial position and results of operations and which require the application of significant judgment by management. We analyze our estimates on a periodic basis, including those related to fair value, impairments, natural gas and crude oil reserves, bad debts, natural gas and oil properties, income taxes, derivatives, contingencies, and litigation and base our estimates on historical experience and various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
Inventory and Obligations Under Inventory Financing Agreements
Commodity inventories, excluding commodity inventories at the Washington refinery, are stated at the lower of cost and net realizable value using the FIFO accounting method. Commodity inventories at the Washington refinery are stated at the lower of cost and net realizable value using the LIFO inventory accounting method. We value merchandise along with spare parts, materials, and supplies at weighted average cost. Estimating the net realizable value of our inventory requires management to make assumptions about the timing of sales and the expected proceeds that will be realized for these sales. Please read “Note 8—Inventories” to our consolidated financial statements under Item 8 of this Form 10-K for additional information.
Crude oil held in storage tanks at, and certain crude oil in transit to, the Hawaii refinery are financed by Citigroup Energy Inc. (“Citi”) under procurement contracts. The crude oil remains in the legal title of Citi and is stored in our storage tanks governed by a storage facilities agreement. Legal title to the stored crude oil passes to us at the tank outlet. After processing, Citi takes title to the refined products stored in our storage tanks until they are sold to third parties. Citi takes legal title of crude oil in transit at the specified purchase location with the third party supplier. We purchase the crude oil shipment from Citi at the SPM delivery point and we sell an equal quantity and quality of crude oil to Citi at the crude intake point. Legal title to crude oil in transit passes to us at the SPM delivery point for the upstream leg, and legal title passes to Citi at the crude intake point for the downstream leg. We record the inventory owned by Citi on our behalf as inventory with a corresponding obligation on our balance sheet in the amount we expect to pay to satisfy the repurchase obligation for the crude oil inventory then-owned by Citi following the expiration or termination of the Inventory Intermediation Agreement. The valuation of our repurchase obligation requires that we make estimates of the prices and differentials assuming settlement occurs at the end of the reporting period.
Under the Renewables Intermediation Agreement, Hawaii Renewables and Wells Fargo enter into a series of Swap Transactions on a monthly basis and Wells Fargo agrees to prepay a fixed amount to Hawaii Renewables, which is not to exceed $100 million. Hawaii Renewables utilizes the funding received from the Swap Transactions to support our Renewable Fuels Facility’s operations. Hawaii Renewables receives the title to and risk of loss of the renewable feedstocks beginning at the transfer point designated by the sourcing contracts. Hawaii Renewables notifies Wells Fargo of changes in titled inventories and receives swap financing for the renewable feedstock inventory in transit or held in tank storage before consumption at the Renewable Fuels Facility and, following production, for the refined fuels inventory held in tank storage at our facility in Hawaii and agreed upon locations prior to sale. We record the inventory owned by Hawaii Renewables with a corresponding obligation on our balance sheet in the amount we expect to pay to Wells Fargo for the swap settlements, based on the commodity rate changes on the inventory volumes underlying the fixed prepay amount received.
Please read “Note 13—Inventory Financing Agreements” to our consolidated financial statements under Item 8 of this Form 10-K for additional information regarding our Hawaii inventory financing agreement and Renewables Intermediation Agreement.
Fair Value Measurements
We measure certain assets and liabilities at their fair market value. Assets and liabilities measured at fair value on a recurring basis include derivative instruments and environmental credit obligations. We also measure certain assets and liabilities at fair value on a nonrecurring basis when specific triggering events occur, such as business combinations and events which indicate that a reporting unit’s carrying value exceeds its estimated fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. In estimating fair value, we use discounted cash flow projections, recent comparable market transactions, if available, or quoted prices. We consider assumptions that third parties would make in estimating fair value, including the highest and best use of the asset. The assumptions used by another party could differ significantly from our assumptions.
We classify fair value balances based on the classification of the inputs used to calculate the fair value of a transaction. The inputs used to measure fair value have been placed in a hierarchy based on priority. The hierarchy gives the highest priority to unadjusted, readily observable quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Please read “Note 17—Fair Value Measurements” to our consolidated financial statements under Item 8 of this Form 10-K for additional information.
Business Combinations
We recognize assets acquired and liabilities assumed in business combinations separately from goodwill at their estimated fair values as of the date of acquisition. Significant judgment is required in estimating the fair value of assets acquired. We obtain the assistance of third-party valuation specialists in estimating fair values of tangible and intangible assets
based on available historical information and on expectations and assumptions about the future, considering the perspectives of marketplace participants. These valuation methods require management to make estimates and assumptions regarding characteristics of the acquired property and future revenues and expenses. Changes in these estimates and assumptions would result in different amounts allocated to the related assets and liabilities. The measurement period may be up to one year from the acquisition date; we may record adjustments to the preliminary purchase price allocation during this time, concluding at the end of the one year period or final determination of the values of consideration transferred and assets and liabilities assumed, whichever comes first. Subsequent adjustments, if any, are recorded to the consolidated statement of operations. Please read “Note 6—Acquisitions” and “Note 17—Fair Value Measurements” to our consolidated financial statements under Item 8 of this Form 10-K for further information.
Impairment of Goodwill and Long-lived Assets
We assess the recoverability of the carrying value of goodwill during the fourth quarter of each year or whenever events or changes in circumstances indicate that the carrying amount of the goodwill of a reporting unit may not be fully recoverable. We first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, a quantitative test is required. Under the quantitative test, we compare the carrying value of the net assets of the reporting unit to the estimated fair value of the reporting unit. If the carrying value exceeds the estimated fair value of the reporting unit, an impairment loss is recorded. The fair value of a reporting unit is determined using the income approach and the market approach. Under the income approach, we estimate the present value of expected future cash flows using a market participant discount rate. Under the market approach, we estimate fair value using observable multiples for comparable companies within our industry. These valuation methods require us to make significant estimates and assumptions regarding future cash flows, capital projects, commodity prices, long-term growth rates, and discount rates. Please read “Note 11—Goodwill and Intangible Assets” to our consolidated financial statements under Item 8 of this Form 10-K for further information.
We review property, plant, and equipment, operating leases, deferred turnaround costs, and other long-lived assets whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. We use a cash flows model to estimate value because there is usually a lack of quoted market prices available for long-lived assets. Future cash flow estimates used for impairment reviews are based on assessments requiring judgment, including future production volumes, commodity prices, operating costs, margins, discount rates, expected capital expenditures, and other factors based on all available information available as of the date of the review. Impairment is required when the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying value. If this occurs, an impairment loss is recognized for the difference between the fair value and carrying value. The fair value of long-lived assets is determined using the income approach. Please read “Note 10—Property, Plant, and Equipment” to our consolidated financial statements under Item 8 of this Form 10-K for further information.
Environmental Matters and Asset Retirement Obligations
We record liabilities when environmental assessments and/or remedial efforts are probable and can be reasonably estimated. Cost estimates are based on the expected timing and extent of remedial actions required by governing agencies, experience gained from similar sites for which environmental assessments or remediation have been completed, and the amount of our anticipated liability considering the proportional liability and financial abilities of other responsible parties. Usually, the timing of these accruals coincides with the completion of a feasibility study or our commitment to a formal plan of action. Please read “Note 19—Commitments and Contingencies” to our consolidated financial statements under Item 8 of this Form 10-K for further information about our environmental liabilities and assessments.
We record asset retirement obligations (“AROs”) at fair value in the period in which we have a legal obligation, whether by government action or contractual arrangement, to incur these costs and can make a reasonable estimate of the fair value of the liability. Estimating the cost and timing of future remedial efforts is difficult and related technologies, costs, regulatory and other compliance considerations, timing, discount rates, and other inputs considered in the valuations are subject to change. Please read “Note 2—Summary of Significant Accounting Policies”, “Asset Retirement Obligations,” to our consolidated financial statements under Item 8 of this Form 10-K for further information.
Income Taxes
We use the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and NOL and tax credit carry
forwards. The realizability of deferred tax assets is evaluated quarterly based on a “more likely than not” standard and, to the extent this threshold is not met, a valuation allowance is recorded. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. These liabilities are recorded based on our assessment of existing tax laws and regulations. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which these temporary differences become deductible and may vary from our estimates for a number of reasons, including different interpretations of tax laws and regulations. New tax laws and regulations, and changes to existing tax laws and regulations, are proposed and promulgated continuously. The implementation of future tax laws and regulatory initiatives, as well as future interpretations on historical tax laws and regulations, could result in increased tax liabilities that cannot be predicted at this time. Please read “Note 2—Summary of Significant Accounting Policies”, “Income Taxes,” to our consolidated financial statements under Item 8 of this Form 10-K for further information.
In the fourth quarter of 2023, we analyzed projections for our future taxable income and the absence of objective negative evidence, such as a cumulative loss in recent years. As a result of this analysis, we determined that we had sufficient positive evidence to release a majority of the valuation allowance against our federal net deferred tax assets and recognized a non-cash deferred tax benefit of $277.7 million for the year ended December 31, 2023. We retained a partial valuation allowance on certain state deferred tax assets primarily as a result of apportionment factors from minimal activity in certain states impacting assessed likelihood of future realizability. We will continue to reassess whether the balance of the valuation allowance is appropriate on a yearly basis and, given the totality of the facts and circumstances, both positive and negative, will adjust the remaining valuation allowance in future periods if the evidence supports doing so.
