On this page of StockholderLetter.com we present the 3/18/2024 shareholder letter from PAR PACIFIC HOLDINGS, INC. — ticker symbol PARR. Reading current and past PARR letters to shareholders can bring important insights into the investment thesis.

 •  3/18/2024 Letter Continued (Full PDF)
 •  3/23/2023 PARR Stockholder Letter
 •  3/20/2025 PARR Stockholder Letter
 •  More "Oil & Gas Refining & Marketing" Category Stockholder Letters
 •  PARR Benford's Law Stock Score = 96

PARR 3/18/2024 Shareholder/Stockholder Letter Transcript:

Par Pacific
2023
ANNUAL REPORT


Dear Fellow Shareholders,
2023 was an exceptional year as we generated record financial results, successfully
closed and integrated the highly accretive Billings acquisition, launched a renewables
business line and achieved our target balance sheet.
Compared to 2022, 2023 Adjusted Earnings per share increased 3% to $8.21 and
Adjusted EBITDA increased 8% to $696 million. Net book value expanded by over 100% to $1.3
billion, or $21.88 per share. Year-end liquidity exceeded $640 million after funding the $310 million
Billings acquisition with cash on hand.
These improvements were achieved despite refining market conditions declining by 23%,
as measured by our benchmark indices, for the year. While the market environment remained well
above mid-cycle, reliable execution is a necessity to capture market strength. Our sterling results are
built upon the highly accretive Billings transaction and the consistent and reliable business operations
by all of our business units.
In many respects, 2023 marks the tenth anniversary of our company   s inception and is an
important milestone to commemorate by reflecting on our strategy. While the modern era of crude
oil refining is more than 175 years old, we believe a differentiated strategy focused on remote markets
can generate premium returns. We do not aim to compete with the largest export-oriented refineries
on the Gulf Coast, in the Middle East or even in Asia. We intensely focus on delivering the lowest cost,
highest quality products to our local markets. Our business model relies on excellence in manufacturing, distribution and knowing our customers. These are our competitive advantages, and we spend our
time thinking about how to enhance and deepen our strengths to bolster our leading market position.
Better means lower cost, higher reliability and increasingly more sustainable products. Given our line
of work, we are often reminded of the brutal efficiency of global commodity markets, yet we keenly
focus our strategic thinking on the unique markets that we serve. It is in this narrower strategic arena
that we tip our hats to our longtime friend, mentor and lover of real estate - the late Sam Zell. Location,
location, location. Location matters in a low margin, high volume enterprise because distribution costs
are a substantial component of the industry   s cost structure. In this business setting, proximity to the
customer delivers a relative advantage. The western United States is the ideal geography with markets
that fit this profile. In the Rockies, the Pacific Northwest, and Hawaii, a high cost is exacted to move
refined products to or from local markets. We capture value by having the leading local position. In
summary, we are a growing energy company providing both renewable and conventional fuels to the
western United States.
A 10-year milestone is also a good opportunity to reflect upon our culture and aspirations.
The history of our company comes down to countercyclical capital deployment paired with an entrepreneurial culture that has not only focused on acquiring assets at an attractive price but also constantly
improving our operations and commercial capabilities. Needless to say, our strategy requires us to
tailor our operations to fit local needs; centralization of many functions and our brands would be
counter-productive to being a local operator. We generally only ask our employees to abide by two
central edicts. We want all sites to have the same rigorous protocols that ensure the highest level of
safety and environmental compliance, and we want all employees to embrace the same set of core
values. Our core values are: Respect for others, Integrity, Creativity and Hard Work. With these
values in hand, our employees have a deep well of mutual trust between each other. We want to push
decision-making authority as far down into the employment ranks as possible while providing the
knowledge and training that permits our local managers and employees to always make the best
decisions that ensure safe and environmentally compliant conduct in the most reliable fashion.
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As a growing energy company, we are providing both renewable and
conventional fuels to the western United States.

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 3/18/2024 Letter Continued (Full PDF)