Q1 2024 Par Pacific Holdings Inc Earnings Call

May 7, 2024

Good day and welcome to the par Pacific first quarter 2024 earnings Conference call.

Operator: Good day, and welcome to the Par Pacific First Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your touchtone phone. To withdraw your question, please press star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to Ashimi Patel, Vice President of Investor Relations. Please go ahead.

Operator: All participants will be in a listen only mode should you need assistance. Please signal one Congress conference specialist by pressing the Starkey followed by zero.

Operator: After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone.

Operator: To withdraw your question. Please press Star then two please note. This event is being recorded.

Ashimi Patel: I would now like to turn the conference over to actually meet Patel, Vice President of Investor Relations. Please go ahead.

Ashimi Patel: Thank you Danielle and welcome to par Pacific's first quarter earnings Conference call. Joining me today are well much Leon <unk>, President and Chief Executive Officer, Richard Kramer E V P of refining and logistics Shaun floor, as SVP and Chief Financial Officer.

Ashimi Patel: Thank you, Danielle. Welcome to Par Pacific's first quarter earnings conference call. Joining me today are Will Monteleone, President and Chief Executive Officer; Richard Creamer, EVP of Refining and Logistics; and Shawn Flores, SVP and Chief Financial Officer. Before we begin, please note that our comments today may include forward-looking statements. Any forward-looking statements are subject to change and are not guarantees of future performance or events. They are subject to risks and uncertainties, and actual results may differ materially from those projected.

Ashimi Patel: Before we begin note that our comments today may include forward looking statements any forward looking statements are subject to change and are not guarantees of future performance or events are subject to risks and uncertainties and actual results may differ materially from these forward looking statements.

Ashimi Patel: Accordingly, investors should not place undue reliance on forward-looking statements, and we disclaim any obligation to update or revise them. I refer you to our investor presentation on our website and to our filings with the SEC for non-GAAP reconciliations and additional information. I'll now turn the call over to our President and Chief Executive Officer, Will Monteleone.

Ashimi Patel: Accordingly, investors should not place undue reliance on forward looking statements and we disclaim any obligation to update or revise them.

William Monteleone: I refer you to our investor presentation on our website and our filings with the SEC for non-GAAP reconciliations and additional information.

William Monteleone: I'll now turn the call over to our President and Chief Executive Officer four months Leann.

William Monteleone: Thank you, Ashimi, and good morning, everyone. Before discussing the quarterly results, I want to thank Bill Pate for his many contributions to Par Pacific's success over the last 10 years. Bill has been a terrific partner and a guiding force in the company's formation and strategic direction. I'm grateful for his leadership and honored to build upon our strong foundation, today a leading conventional and renewable fuel provider to the western United States. Moving on to quarterly results, our first quarter adjusted EBITDA was $95,000,000, and adjusted net income was $0.69 per share.

William Monteleone: Thank you Ashish and good morning, everyone.

William Monteleone: Our retail and logistics business units delivered stable earnings contributions. All strong operational execution in the refining segment positions us to increase production during the profitable summer driving season. Our buildings refinery is in the process of restarting, further improving our summer operating position. Richard will provide more details.

William Monteleone: Our retail and logistics business units delivered stable earnings contributions, while strong operational execution in the refining segment positions us to increase production during the profitable summer driving season. Our buildings refinery is in the process of restarting, further improving our summer operating position. Richard will provide more details.

William Monteleone: Before discussing quarterly results I want to thank bill Pate for his many contributions to the par Pacific success over the last 10 years.

William Monteleone: <unk> been a terrific partner and a guiding force in there.

William Monteleone: The Companys formation and strategic direction.

William Monteleone: I'm grateful for his leadership and honored to build upon our strong foundation today, leading conventional and renewable fuel provider to the western United States.

William Monteleone: Moving on to quarterly results first.

William Monteleone: First quarter, adjusted EBITDA was $95 million and adjusted net income.

William Monteleone: With 69 cents per share.

William Monteleone: Our retail and logistics business units delivered stable earnings contributions.

William Monteleone: Strong operational execution in the refining segment positions us to increased production during the profitable summer driving season.

William Monteleone: Our billings refinery is in the process of restarting further improving our summer operating position.

William Monteleone: Richard will provide more details.

William Monteleone: Global product inventories are presently low to well-balanced. Supply Side Support, Peers Limited. Incremental Chinese exports are expected to be flattened down year over year, and national policies remain focused on adequate local market supply for both transportation fuels and petrochemicals.

William Monteleone: Global product inventories are presently low to well balanced. Supply Side Support, Peers Limited. Incremental Chinese exports are expected to be flattened down year over year, and national policies remain focused on adequate local market supply for both transportation fuels and petrochemicals.

William Monteleone: Global product inventories presently low well balanced.

William Monteleone: Supply side support appears limited.

William Monteleone: Incremental Chinese exports are expected to be flat to down year over year and national policies remain focused on adequate local market supply.

William Monteleone: Transportation fuels and petrochemicals.

William Monteleone: In addition, we see refined product freight costs remaining elevated, inflating the cost arbitrage between markets and highlighting the benefits of local manufacturing. This is likely to become a larger factor as we enter the summer driving season, and marginal supply will need to stretch further to solve for marginal demand. Retail brands continue to build momentum with same-store fuel and merchandise sales growth of 6% and 5%, respectively. The retail team is focused on growing food service gross margin, rolling out core systems to better manage in-store costs, and Building a Pipeline, a Remodel, and New to Industry sites, which are relatively young brands, continue to be well received in the local markets we serve, as demonstrated by the above-trend growth rate.

William Monteleone: In addition, we see refined product freight costs remaining elevated inflating the cost arbitrage between markets and highlighting the benefits of local manufacturing.

William Monteleone: This is likely to become a larger factor as we enter the summer driving season and marginal supply will need to stretch further the solve for marginal demand.

William Monteleone: Our retail brands continue to build momentum with same store fuel and merchandise sales growth of 6% and 5% respectively.

William Monteleone: The retail team is focused on Brian foodservice gross margin rolling out core systems to better manage and store costs.

William Monteleone: Our pipeline of remodel and new to industry sites.

William Monteleone: Our relatively young brands continued to be well received in the local markets we serve.

William Monteleone: As demonstrated by the above trend growth rates.

William Monteleone: Progress continues on our renewable fuel initiatives.

William Monteleone: Progress continues on our renewable fuel initiatives. In Hawaii, the $90 million Renewable Hydro Treater Project is tracking on-time and on-budget, and the Renewable Fuel Co-Generation Project with Hawaiian Electric is progressing towards a potential power purchase agreement. In Tacoma, we are pivoting from the larger SAS and green hydrogen projects to assess lower capital and return opportunities. Nevertheless, our balance sheet remains well-positioned. Thus far this year, we have further reduced our cost of debt capital and repurchased more than $70 million of our stock at attractive prices.

William Monteleone: In Hawaii, the $90 million renewable hydro Treater project.

William Monteleone: And on time and on budget.

William Monteleone: And the renewable fueled cogeneration project with Hawaiian electric progressing toward the potential power purchase agreement.

William Monteleone: And Docomo, we're pivoting from the larger SaaS Green hydrogen project.

William Monteleone: Lower capital high return opportunities.

William Monteleone: Our balance sheet remains well positioned thus far this year, we further reduced our cost of debt capital and repurchased more than $70 million of our stock at attractive prices.

William Monteleone: With more than $575 million of liquidity, our balance sheet remains strong, allowing us to both opportunistically repurchase our stock and pursue our strategic objectives. Looking forward, we're focused on safe and reliable operations. Crisp, Project Execution, and Thoughtful Capital Allocation. We are committed to managing risks and also positioning our enterprise to generate strong returns through the cycle. I'll now turn the call over to Richard to discuss our refining and logistics operational performance.

William Monteleone: With more than $575 million of liquidity, our balance sheet remains strong, allowing us to both opportunistically repurchase our stock and pursue our strategic objectives. Looking forward, we're focused on safe and reliable operations. Krist, Project Execution, and Thoughtful Capital Allocation. We are committed to managing risks and also positioning our enterprise to generate strong returns through the cycle. I'll now turn the call over to Richard to discuss our refining and logistics operational performance.

William Monteleone: With more than $575 million of liquidity, our balance sheet remains strong, allowing us to both opportunistically repurchase our stock and pursue our strategic objectives.

Richard: Looking forward, we are focused on safe and reliable operations Chris.

Richard: Chris project execution and thoughtful capital allocation.

Richard: We are committed to managing risks and also position our enterprise to generate strong returns through the cycle.

William Monteleone: I'll now turn the call over to Richard to discuss our refining and logistics operational performance.

Richard Creamer: Turning to the refining segment, first quarter combined throughput was 181,000 barrels per day, reflecting winter seasonality and maintenance activity. In Hawaii, throughput was 79,000 barrels per day, and production costs were $4.89 per barrel. The crude rate was reduced for 10 days in March as we resolved the fouling issue in our crude vacuum tower. We've restored operations and demonstrated a return to full crew capability.

Richard Creamer: Turning to the refining segment, first quarter combined throughput was 181,000 barrels per day, reflecting winter seasonality and maintenance activity. In Hawaii, throughput was 79,000 barrels per day and production costs were $4.89 per barrel. The crude rate was reduced for 10 days in March as we resolved the fouling issue in our crude vacuum tower. We've restored operations and demonstrated return to full crew capability.

Speaker Change: Thank you will.

Richard Creamer: Turning to the refining segment first quarter combined throughput was 181000 barrels per day, reflecting winter seasonality in maintenance activities in Hawaii <unk> throughput was 79000 barrels per day and production costs were $4.89 per barrel of.

Richard Creamer: The crude rate was reduced for 10 days in March as we resolve the filing issue in our crude vacuum tower, we restored operations and demonstrated returned to full crude capability.

Richard Creamer: For millings, first quarter throughput was 53,000 barrels per day. Despite seasonality, crude rates were elevated as we built inventory ahead of the second quarter turnaround. First quarter production costs were $12.44 per barrel, elevated by approximately $5 million due to increased electricity costs and pre-turnaround related OPEC. Billings, Crude, and Reformer blocks have been in turnaround since early April. The turnaround has progressed to plan and is on schedule and on budget. We are currently in the beginning stages of our startup operation.

Richard Creamer: For billings first quarter throughput was 53000 barrels per day, despite seasonality crude rates were elevated as we built inventory ahead of the second quarter turnaround.

Richard Creamer: First quarter production costs were $12.44 per barrel elevated by approximately $5 million due to increased electricity costs and pre turnaround related opex.

Richard Creamer: Mailings crude and reformer blocks have been in turnaround since early April the turnaround has progressed to plan and is on schedule and on budget. We are currently in the beginning stages of startup operations.

Richard Creamer: Shifting to Wyoming refinery availability has been excellent throughput was a first quarter record of 17000 barrels per day and production costs were $7 86 per barrel.

Richard Creamer: Shifting to Wyoming, refinery availability has been excellent, throughput was a first quarter record of 17,000 barrels per day, and production costs were $7.86 per barrel. Finally, in Washington, first quarter throughput was 31,000 barrels per day, and production costs were $6.07 per barrel, elevated by approximately $1 million due to a 15-day planned March maintenance event. The refinery is back to full rate and operating well in the second quarter. Looking ahead, each of our assets is positioned to optimize throughput heading into the summer season.

Richard Creamer: Finally in Washington, first quarter throughput was 31000 barrels per day and production costs were $6 seven per barrel elevated by approximately $1 million due to a 15 day planned March maintenance event.

Richard Creamer: The refinery is back to full rates and operating well in the second quarter.

Richard Creamer: Looking ahead each of our assets are positioned to optimize throughput heading into the summer season for the second quarter, we expect way throughput between 81, and 84000 barrels per day, Wyoming between 18, and 20000 barrels per day, Washington between 39, and 41000 barrels per day and billings between 34.

Richard Creamer: For the second quarter, we expect white throughput between 81 and 84,000 barrels per day, Wyoming between 18 and 20,000 barrels per day, Washington between 39 and 41,000 barrels per day, and Billings between 34 and 38,000 barrels per day, reflecting the second quarter turnaround activity. I'll now turn the call over to Shawn to cover our financial results.

Richard Creamer: More than 38000 barrels per day, reflecting the second quarter turnaround activities I'll now turn the call over to Sean to cover our financial results.

Shawn Flores: Thank you, Richard. First quarter adjusted EBITDA and adjusted earnings were $95,042,069 per share. The refining segment reported adjusted EBITDA of $81 million compared to $107 million in the fourth quarter of last year. In Hawaii, the Singapore Index averaged $18.67 per barrel, and our land and crew differential was $6.60, resulting in a combined index of approximately $12 per barrel. Why margin capture was 116%, reflecting the benefits of elevated clean product freight and strong commercial execution.

Richard Creamer: Richard first quarter, adjusted EBITDA, and adjusted earnings were $95 million, and 42 million or <unk> 69 per share.

Richard Creamer: The refining segment reported adjusted EBITDA of $81 million compared to $107 million in the fourth quarter of last year.

Richard Creamer: In Hawaii, the Singapore Index averaged $18 67 per barrel narrow landed crude differential was $6.60.

Richard Creamer: <unk> and <unk> combined index of approximately $12 per barrel.

Richard Creamer: Why margin capture was 116%, reflecting the benefits of elevated clean product freight and strong commercial execution.

Shawn Flores: Looking ahead to the second quarter, we expect our Hawaii crude differential to land between $5.00 and $5.50 per barrel, and we have continued our product crack hedging framework with approximately 26% of our second quarter sales hedged at $20.00 per barrel. In Billings, our Gulf Coast Index averaged 21.34 per barrel. Margin capture was 65%, reflecting seasonally soft market conditions. Upper Rockies gasoline and diesel cracks relative to the gulf coasts have rebounded quarter to date, improving by approximately nine and sixteen dollars per barrel, respectively.

Richard Creamer: Looking ahead to the second quarter, we expect our Hawaii crude differentials to land between five and $5 50 per barrel and we've continued our product crack hedging framework with approximately 26% of our second quarter sales hedged at $20 per barrel.

Richard Creamer: And billings, our Gulf Coast Index averaged $21 34 per barrel margin capture was 65%, reflecting seasonally soft market conditions up.

Richard Creamer: Rockies gasoline and diesel cracks relative to the Gulf coast have rebounded quarter to date.

Richard Creamer: Improving by approximately 9% and $16 per barrel respectively.

Shawn Flores: The second quarter billing's turnaround is expected to impact gross margin by $4 to $5 per barrel, and we expect operating costs to remain flat as well as the first quarter. In Wyoming, captured to the Gulf Coast Index was 70%, reflecting similar seasonal dynamics as Billington.

Richard Creamer: The second quarter billings turnaround is expected to impact gross margin by four to $5 per barrel, we expect operating costs to remain flat relative to the first quarter.

Richard Creamer: In Wyoming captured to the Gulf Coast Index was 70%, reflecting similar seasonal dynamics as billings lower Rockies markets were particularly weak during the first quarter, reflecting strong refinery utilizations and softer demand in January.

Shawn Flores: Lower Rockies markets were particularly weak during the first quarter, reflecting strong refinery utilization and softer demand in January. Rapid City Gasoline spreads to the Gulf Coast have improved $10 per barrel, quarter to date, and we are well positioned ahead of the peak summer season. Lastly, in Washington, the P&W index averaged $20.48 per barrel during the first quarter, and margin capture was 30%, including an approximate $2 per barrel impact from the planned refinery outage. Looking at Q2, our P&W index has improved $7.50 per barrel quarter-to-date, driven by expanding gasoline margins in the region.

Richard Creamer: Rapid city gasoline spreads to the Gulf Coast have improved $10 per barrel corvid date, and we are well positioned headed the peak summer season.

Richard Creamer: Lastly, in Washington, The PNW index averaged 2048 per barrel during the first quarter margin capture was 30%, including an approximate $2 per barrel impact from the planned refinery outage.

Richard Creamer: Looking to Q2, our paying W. Index has improved $7.50 per barrel quarter to date, driven by expanding gasoline margins in the region.

Richard Creamer: The logistics segment reported adjusted EBITDA of $28 million in the first quarter compared to $24 million in the fourth quarter, reflecting strong system utilization and lower operating costs.

Shawn Flores: The logistics segment reported adjusted EBITDA of $28 million in the first quarter compared to $24 million in the fourth quarter, reflecting strong system utilization and lower operating costs. Our retail segment reported adjusted EBITDA of $14 million in the first quarter compared to $17 million in the fourth quarter. Same-store sales growth was partially offset by softer retail fuel margins due to rising wholesale prices.

Richard Creamer: Our retail segment reported adjusted EBITDA of $14 million in the first quarter compared to $17 million in the fourth quarter.

Richard Creamer: Same store sales growth was partially offset by softer retail fuel margins in a rising wholesale prices.

Shawn Flores: Corporate expenses and adjusted EBITDA were $29 million in the first quarter, compared to $26 million in the fourth quarter. First quarter expenses include $5 million related to advancing our renewable development activities. With our pivot from the larger SAF and green hydrogen project in Tacoma, we expect our renewable spending to reduce to $2 to $3 million per quarter for the remainder of the year. Cash provided by operations in the first quarter totaled $83 million, excluding a $44 million working capital outflow related to an increase in trade receivables and $13 million in turnaround expenditures.

Richard Creamer: Corporate expenses and adjusted EBITDA were 29 million in the first quarter compared to 26 million in the fourth quarter.

Richard Creamer: First quarter expenses include $5 million related to advancing our renewable development activities with our pivot from the larger S. C. I think green hydrogen project in Tacoma, we expect our renewable spending to reduced $2 million to $3 million per quarter for the remainder of the year.

Richard Creamer: Cash provided by operations during the first quarter totaled $83 million, excluding a $44 million working capital outflow related to an increase in trade receivables and $13 million in turnaround expenditures.

Richard Creamer: Cash used in investing activities totaled $23 million primarily related to the capex.

Shawn Flores: Cash used in investing activities totaled $23 million, primarily related to CapEx. Total liquidity as of March 31st was $575 million, made up of $228 million in cash and $347 million in availability. We further reduced our cost of debt capital with recent refinancing activities. In April, we repriced our $545 million term loan, reducing annual interest expense by $3 million. In March, we expanded the capacity of our asset-based loan from $900 million to $1.4 billion as we plan to refinance our existing Hawaii intermediation with a combination of borrowings under the ABL and a smaller crude-only intermediation.

Richard Creamer: Total liquidity as of March 31 was 575 million made up of $228 million in cash and 347 million availability.

Richard Creamer: We further reduced our cost of debt capital with the recent refinancing activities in April we repriced their $545 million term loan reducing annual interest expense by $3 million.

Richard Creamer: In March we expanded the capacity of our asset base loan from $900 million to $1 4 billion as we plan to refinance our existing Hawaii intermediation with a combination of borrowings under the ABL and a smaller crude oil intermediation.

Richard Creamer: The shift towards ABL financing in Hawaii is expected to reduce working capital costs by $10 million annually with Hawaii gross margin improving by approximately $20 million per year, partially offset by $10 million increase in annual interest costs.

Richard Creamer: Lastly, we've continued our opportunistic approach to share repurchases with $32 million during the first quarter and 73 million year to date at an average price of $34 per share.

Speaker Change: The strong balance sheet heading into the summer driving season, we are well positioned to pursue our strategic growth objectives, while opportunistically repurchasing our common stock at attractive prices. This concludes our prepared remarks, operator, we'll turn it to you for Q&A.

Shawn Flores: The shift towards ABL financing in Hawaii is expected to reduce working capital costs by $10 million annually, with Hawaii gross margin improving by approximately $20 million per year, partially offset by a $10 million increase in annual interest costs. Lastly, we've continued our opportunistic approach to share repurchases with $32 million during the first quarter and $73 million year-to-date at an average price of $34 per share. With a strong balance sheet heading into the summer driving season, we're well positioned to pursue our strategic growth objectives while opportunistically repurchasing our common stock at attractive prices. This concludes our prepared remarks. Operator, we'll turn it over to you for Q&A.

Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one I had a touchtone phone.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please back up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. The first question comes from Ryan Todd from Piper Sandler. Please go ahead.

Richard Creamer: If you are using a speakerphone please pick up all your handset before pressing the keys.

Richard Creamer: If there's any time a question has been addressed and you would like to withdraw your question. Please press Star then two.

Richard Creamer: The first question comes from Ryan Todd from Piper Sandler. Please go ahead.

Speaker Change: Great. Thanks.

Ryan M. Todd: Great, thanks. Maybe if I could start, I mean, congratulations on the continued strong performance in Hawaii. Can you talk about what you're seeing in Asian markets, including the impact of clean tanker rates on Hawaiian margins and any outlook from here in terms of how you see things progressing over the course of the year? Sure, Ryan.

Speaker Change: Maybe if I could start I mean, congratulations on the continued strong performance.

Richard Creamer: Performance in in Hawaii can you talk about what Youre seeing in <unk>.

Richard Creamer: Asian markets, including the impact of clean tanker rates on why margins in any outlook from here in terms of.

Speaker Change: How do you see things progressing over the course of the year.

Speaker Change: Sure Ryan Thanks for your comments as well.

William Monteleone: Sure, Ryan. Thanks for your comments. It's Will.

William Monteleone: So I think the key things that we're watching on the Singapore margins, you know, again, we continue to see a trade really in sympathy with Northwest Europe, and ultimately, you know, barrels need to clear arbitrage from Asia into Europe. And so I think at the current time, that's the biggest factor. Ultimately, you know, inventories are still on the lower side. And I think as we approach the summer driving season, you're going to see, you know, large refining incentives to produce gasoline, which is going to ultimately compete with diesel.

Richard Creamer: So I think the key things that we're watching on the Singapore margins. You know again, we continue to see a trade really in sympathy with northwest Europe, and ultimately barrels need to clear or arbitrage from.

Richard Creamer: Asia into Europe, and so I think at the current time.

Richard Creamer: That's the biggest factor ultimately inventories are still on the lower side and I think as we approach the summer driving season, you're going to see a large refining incentives to produce gasoline.

Richard Creamer: Which is going to ultimately compete with diesel and on the freight side.

William Monteleone: And on the freight side, again, I think the biggest factor is ultimately the disruption in trade flows, both of rush and refined product exports, as well as the need for refined products that are produced in the Middle East and India that need to be cleared through the Red Sea, need to take much longer routes to get to Europe. So I think ultimately this comes down to geopolitics. I don't see anything readily on the horizon that suggests a change here.

Richard Creamer: And I think the biggest factor is ultimately the disruption in trade flows both of Russian refined product exports.

Richard Creamer: As well as the need for it.

Richard Creamer: Refined product that is produced in the middle East and India needs to is typically cleared through the Red Sea.

Richard Creamer: Needs to take much longer routes to get to Europe. So I think ultimately this comes down to geopolitics.

Speaker Change: Don't see anything readily on the horizon that suggests the change here.

William Monteleone: And so ultimately, I think we're in for a period of elevated refined product freight rates until we see stability. So again, I think that gives us some optimism on overall refined product cracks, both in Northwest Europe as well as in Singapore.

Richard Creamer: And so ultimately I think you're we're in for a period of elevated refined product freight rates until we see stability.

Richard Creamer: So again I think that gives us some optimism on overall refined product cracks books and northwest Europe as well as in Singapore.

Speaker Change: Great. Thanks.

Richard Creamer: And then.

William Monteleone: You know, maybe as we think about the use of cash, you bought back quite a few shares in the quarter, probably more than we expected. Can you talk about the drivers of that pace, how you're thinking about shareholder returns going forward, and maybe just, you know, high-level strategic priorities about how you think about the use of cash over the medium term? Sure.

Speaker Change: Maybe on as we think about use of cash I mean, you bought back quite a few shares in the quarter, probably more than we expected.

Speaker Change: Can you talk about how you know drivers of that pace. So how are you thinking about shareholder returns going forward.

Speaker Change: And maybe just a high level strategic priorities about how you're thinking about use of cash.

Richard Creamer: Over the medium term.

Richard Creamer: Sure.

Richard Creamer: So I think.

William Monteleone: You know, ultimately, the share price cadence or the share repurchase cadence is really driven by an opportunistic approach to our forward outlook, equity, the share price, and our view of fundamental value.

Richard Creamer: Ultimately the share price cadence or the share repurchase cadence is really driven by an opportunistic approach of you know our forward outlook.

Richard Creamer: Liquidity the share price and our view of fundamental value and I think you'll see us continue to be optimistic.

William Monteleone: And I think you'll see us continue to be opportunistic in that approach. And so in periods where you see share price weakness and our outlook is strong, you're gonna see us be more aggressive. And in periods of improving conditions or improving prices, we'll probably buy less stock.

Richard Creamer: And that approach and so in periods, where you see share price weakness in our outlook the strong youre going to see us be more aggressive.

Richard Creamer: And in periods of of improving conditions.

Richard Creamer: Improving price, we will probably buy less stock. So again I think we'll continue to be opportunistic in where share price sensitive.

Matthew Robert Lovseth Blair: So again, I think we'll continue to be opportunistic and we're share price sensitive. I think broadly, as we think about capital allocation, you know, we've strengthened our balance sheet to the point where we've got a lot of flexibility looking ahead. And so the question really is, you know, how do we want to invest in growth? And we look at share purchases as really just another opportunity to invest in our own company.

Richard Creamer: I think broadly as we think about capital allocation, we strengthened our balance sheet to.

Richard Creamer: To the point, where you've got a lot of flexibility looking had until the question really is how.

Matthew Robert Lovseth Blair: How do we want to invest in growth and we look at share repurchases and it's really just another opportunity to invest in our own company.

Matthew Robert Lovseth Blair: And we approach it dynamically, as I suggested. In addition, I think we continue to want to pursue our strategic growth objectives, which include everything from CSTOR development to investing in our refineries to improve reliability, investing in renewables, and then strategic acquisitions to the extent that they fit and are attractively priced. And I'd say all that to say, you know, we know from past M&A experiences that carrying some excess liquidity allows us to be less reliant on capital markets, and it ultimately drives enhanced shareholder returns. So again, we weigh all those things against the opportunity to repurchase our stock at attractive prices. And that's really how we think about our capital allocation framework.

Richard Creamer: And we approach it dynamically as I suggested.

Matthew Robert Lovseth Blair: The next question comes from Matthew Blair from Tudor Pickering Holt. Please go ahead.

Richard Creamer: In addition, I think we continue to want to pursue our strategic growth objectives, which include everything from C store development to invest in our refineries to improve reliability messing renewables.

Richard Creamer: And then strategic acquisitions to the extent that they fit and are attractively priced.

Richard Creamer: And I'd say all that to say, we know from the past M&A experiences are carrying some excess liquidity allows us to be less reliant on capital markets and it ultimately drives enhanced shareholder returns.

Speaker Change: So again, we weigh all those things against ultimately the opportunity to repurchase our stock at attractive prices and that's really how we think about our capital allocation framework.

Matthew Robert Lovseth Blair: Okay.

Richard Creamer: Thanks.

Richard Creamer: The next question comes from Matthew Blair from Tudor Pickering Holt. Please go ahead.

Speaker Change: Great. Good morning, Thanks for taking my question. So your same store retail.

William Monteleone: Great, good morning. Thanks for taking my question. So your same-store retail, both volumes as well as merchandise revenue, were quite impressive. How much would you attribute this to your exposure to some unique markets, you know, say in Hawaii, versus, you know, how much would you attribute to your individual efforts in retail?

William Monteleone: Both volumes as well as merchandise revenue, where we're quite impressive how much would you attribute this to your your exposure to some unique markets stay in Hawaii versus how much would you attribute to your individual efforts in retail.

Speaker Change: Sure Matthew it's well it's a good question I think really this comes down to.

William Monteleone: Sure, Matthew, it's Will. Good question. I think, really, this comes down to I think a mix of both our position in Hawaii but also, I think some strength we're seeing in our Nom Nom brand that's, you know, again, all things considered relatively new. So it's a balanced contribution across the board. And, you know, I think the in-store piece. I think we're really just scratching the surface. You know, we've got a relatively new leadership team on the retail side that's really driving some impressive in-store trends.

Richard Creamer: I think a mix of both our position in Hawaii, but also I think some strength, we're seeing in our Nam Nam brand. That's you know again, all things considered relatively new so it's a balanced contribution across the board.

Richard Creamer: And you know I think the in store piece I think we're really just scratching. The surface you know we've got a relatively new leadership team on the retail side, that's really driving some impressive in store trends and so again I would attribute some of the store base.

William Monteleone: And so, again, I would attribute some of this to a lower base, and, again, I think in the past, you know, we've really been strong on the fuel side, and I think you're seeing us focus on the store, and I think that's beginning to yield results.

William Monteleone: Again, I think in the past, we've really been strong on the fuel side and I think you're seeing us focus on the store and I think that's beginning to yield results.

Richard Creamer: Okay.

Speaker Change: Sounds good and then the follow up is on the M&A could you talk about the current landscape and your overall interest in acquiring either additional refineries or a.

Matthew Robert Lovseth Blair: Sounds good, and then the follow-up is on M&A. Could you talk about the current landscape and your overall interest in acquiring either additional refineries or more retail stations? And then, on the flip side, is PAR open to being acquired? And if so, what does that mean for your considerable NOL position? Thanks.

Matthew Robert Lovseth Blair: More retail stations and then.

Matthew Robert Lovseth Blair: I guess on the flipside is horror open to being acquired and if so.

Matthew Robert Lovseth Blair: You know what does that mean for your considerable NOL position.

Speaker Change: Sure Matthew So I think and as we said in the past our strategic focus really remains on pad four and in the upper reaches of pad five you know as we think about refining logistics.

William Monteleone: Sure, Matthew. So, as we said in the past, our strategic focus really remains on pad four and the upper reaches of pad five, you know, as we think about refining logistics. Again, for a transaction to compete with our alternatives, it really needs to be an exceptional opportunity and it needs to present strong synergies with our existing operations. I think our strategic focus remains consistent on that front. And again, as it relates to opportunities for, you know, our NOLs, I think we're down to about roughly $900 million of gross NOL value.

William Monteleone: Again for a transaction to compete with.

William Monteleone: With our alternatives it really needs to be an exceptional opportunity.

William Monteleone: And it needs to present strong synergies with our existing operations and so.

William Monteleone: I think our strategic focus remains consistent.

William Monteleone: On that front.

William Monteleone: And again I think as it relates to opportunities.

William Monteleone: For you know our NOL I think we're down to about roughly $900 million of gross NOL value.

William Monteleone: It's still a very valuable asset.

William Monteleone: It's still a very valuable asset for us that shields our taxable income for the next several years. And ultimately, I think any future M&A activity, whether we're acquiring or we're the target, I think we're ultimately focused on maximizing shareholder value. And at the end of the day, we think about that NOL as an asset, and we think about our future opportunities and the fundamental value of our business. So, it wouldn't be appropriate to, you know, specifically comment on whether we would be a target, but I think, at the end of the day, we're focused on shareholder value.

William Monteleone: For us that shields are our taxable income for the next several years.

William Monteleone: And ultimately I think any future M&A activity, where there were acquiring or where they target I think we're ultimately focused on maximizing shareholder value and at the end of the day, we think about that NOL as an asset and.

William Monteleone: And we think about our future opportunities on the fundamental value of our business. So.

William Monteleone: It wouldn't be appropriate to specifically comment on whether we would be a target, but I think at the end of the day, we're focused on shareholder value.

Speaker Change: Sounds good thanks for your comments.

Matthew Robert Lovseth Blair: Sounds good. Thanks for your comments.

Matthew Robert Lovseth Blair: The next question comes from Neil Mehta from Goldman Sachs. Please go ahead.

Neil Singhvi Mehta: The next question comes from Neil Mehta from Goldman Sachs. Please go ahead.

Neil Singhvi Mehta: All right. All right. All right.

Neil Singhvi Mehta: Right.

Neil Singhvi Mehta: Yeah.

Neil Singhvi Mehta: Okay.

Neil Singhvi Mehta: Hey, Neel your line is not coming through.

Neil Singhvi Mehta: Hey Neil, your line's not coming through.

Neil Singhvi Mehta: Ashimi, is that better? Yep, that's better. Okay, great.

Neil Singhvi Mehta: She is that better.

Neil Singhvi Mehta: Okay. Great. So the first question is just on Asia margins have certainly softened up out there and a lot of that seems like where towards run cut levels in the region would just love your perspective on how you see the Asia market playing out and then how do you see Hawaii based trading.

William Monteleone: So the first question is just on Asia. Margins have certainly softened up out there, and a lot of that seems like we're towards run-cut levels in the region. We'd just love your perspective on, you know, how you see the Asian market playing out, and then how do you see Hawaii basis trending relative to Asia as we get our way into the summer?

William Monteleone: Trending relative to.

William Monteleone: To Asia as we can our way into the summer.

William Monteleone: Sure, thanks Neal. I tend to agree with your assessment that as we're kind of approaching a Singapore crack or a 312 crack of $12, you look at the secondary products out there like NAP and fuel oil, and the simpler refiners in Asia are approaching negative gross margin levels. So again, from that perspective, again I think that supply-side support exists. Again, I think our view is the marginal barrel still needs to clear from Asia to Europe as you approach the summer, and I think that you'll ultimately see that trend reemerge.

Speaker Change: Sure. Thanks Neal.

William Monteleone: I tend to agree with you or your assessment that as we're kind of approaching a singapore crack or 312 of $12. You look at the secondary products out there like naphtha and fuel oil.

William Monteleone: Let the simpler.

William Monteleone: Refiners in Asia.

William Monteleone: Approaching negative gross margin levels. So again I think from that perspective, again, I think that supply side supporting exist.

William Monteleone: And again I think our view is the marginal barrel still needs to clear from Asia to Europe.

William Monteleone: As you approach the summer and I think that you'll ultimately see.

William Monteleone: That trend reemerge, and when you think about that given where the freight market is.

William Monteleone: And when you think about that, given where the freight market is, it's quite expensive. And so you're going to see, I think, ultimately, products continue to flow in that direction. As that relates to Hawaii, again, I think the marginal barrel to Hawaii is still imported, and freight is a major factor. So again, as we think about the Hawaii basis and our local capture rates, refined product freight, and the trends there remain elevated, I think we've continued to see refined product freight costs trade in the, you know, between $8 and $10 per barrel range, which is consistent with where they've been over the last several quarters.

William Monteleone: It is quite expensive and so youre going to see I think.

William Monteleone: Ultimately products continue to flow in that direction.

William Monteleone: As that relates to Hawaii again, I think the <unk>.

William Monteleone: <unk> barrel to wise still imported and freight is a is a major factor.

William Monteleone: So again as we think about the Hawaii basis in our local capture rates.

William Monteleone: Refined product freight and the trends there remain elevated I think we've continued to see refined product freight cost you know trade and the yeah between eight and $10 per barrel range, which is consistent with where they've been.

William Monteleone: Over the last several.

William Monteleone: Several quarters.

William Monteleone: Yes.

William Monteleone: Yeah, thanks, Will. And the follow-up is just, if you could spend a little bit more time on the Rockies. I think you alluded to the fact it was a softer start to the quarter, but things seem to be moving in the right direction in the region. So your perspective on how much of that was transient and what we should carry into 2Q. Thank you.

Speaker Change: Thanks will and the follow up is just if you could spend a little bit more time on the Rockies I think he he did allude to the fact it was a softer start for quarter, but things seem to be moving in the right direction into regions. So just your perspective on how much of that was transient.

William Monteleone: And what we should carry into Q. Thank you.

Speaker Change: Sure Yeah, I mean I.

William Monteleone: Yeah, I think Shawn referenced this. And again, we saw some strong utilization rates for the PAD4 refining complex in the first quarter. It's really the first time in a while that that's been the case, and I think on top of that, we saw, you know, I'd say steady improvement with a really substantial trough in January, with steady improvement as we move through the first quarter. So, again, I think that signals a little bit of rebalancing that was happening. And again, the steady upward trends continued, you know, Neil, as we moved into, you know, through April and into May. So, again, I would really point to some of the weaknesses of it being a January-specific event.

William Monteleone: I think Sean referenced this and again, we saw some strong utilization rates for the pad for refining complex in the first quarter. It was really the first time in a while that's been the case.

William Monteleone: And I think and on top of that.

William Monteleone: We saw you know I'd say steady improvement with really being a pretty substantial trough in January.

William Monteleone: With steady improvement as we move through the first quarter. So.

William Monteleone: Again, I think that that signals a little bit of rebalancing.

William Monteleone: That was happening and again the steady upward trends continued.

William Monteleone: Neil as we've moved into you know through April and into May. So again, I would I'd really point to some of the weakness has been a January specific event.

Speaker Change: Thank you. Thank you will.

William Monteleone: The next question comes from John Royall from Jpmorgan. Please go ahead.

John Macalister Royall: The next question comes from John Royall from J.P. Morgan. Please go ahead.

John Macalister Royall: Hi, Good morning, Thanks for taking my question could.

John Macalister Royall: Hi, good morning. Thanks for taking my question. Could you go into some detail on the pivot you called out at Tacoma on the renewable side? What's the new scope of the work, and is the green hydrogen project effectively off the table here?

John Macalister Royall: Could you go into some detail on the pivot you called out at Takoma on the renewable side, what's what's the new scope of the work in the Green hydrogen project effectively off the table here.

John Macalister Royall: Hey, John It's will so I think at a high level.

William Monteleone: Hey, John, it's Will. So I think at a high level, you know, we've spent significant effort scoping this project, and given the policy backdrop and also really where the renewables environment sits, you know, we think that a larger, you know, capital-type, higher risk project is more difficult to fund today and more difficult and doesn't generate the types of returns that we think are necessary for a project in this area.

William Monteleone: Spent significant effort scope in this project and given the policy backdrop, and also really where the renewables environment sets, we think well have larger.

William Monteleone: Capital kind of higher risk project is more difficult to fun today, and and more difficult and doesn't generate the types of returns that we think are necessary for a project in this area and and so again I think I've talked about renewables in the past and our view on investing there and again ultimately we.

William Monteleone: And so, again, I think I've talked about renewables in the past and our view on investing there. And again, ultimately, we think the returns there need to be, you know, at or above the way we think about investing in our conventional fuel business. And so, you know, I think that's really the backdrop for the change, and the Green Hydrogen Project pairs with the SAF project. So, again, I think that's currently been deferred.

William Monteleone: Thank the returns there need to be.

William Monteleone: At or above the way, we think about investing in our conventional fuel business.

William Monteleone: And so yeah.

William Monteleone: That's really the backdrop for the change in the Green hydrogen project payers with the Saf project.

William Monteleone: And then as we think about the scope of work, again, I think we're looking at, you know, the advantages we have in Tacoma. Logistically, again, we've got great rail access, significant tankage, deep water capability, and ultimately, thinking about the right way to utilize our logistics assets so that we are prepared to, you know, either distribute or produce lower carbon fuels in the future.

William Monteleone: So again I think that's currently been deferred.

William Monteleone: And then as we think about the scope of work again I think we're looking at the.

William Monteleone: The advantages we have in Tacoma logistically.

John Macalister Royall: That's helpful. Thank you.

William Monteleone: Logistically and again, we've got great rail access significant tankage deepwater capabilities and ultimately thinking about the right way to utilize our logistics assets. So that we are prepared to.

John Macalister Royall: Either distribute and or produce lower carbon fuels in the future.

Speaker Change: That's helpful. Thank you and then on the intermediation facility in Hawaii just.

John Macalister Royall: And then on the intermediation facility in Hawaii, just so we understand, is the savings there just from less inventories being encompassed under the New Deal given it's crude only? And does that come at the cost of carrying more inventories on your balance sheet? And should we think of this as a step towards eventually going to a no intermediation agreement and reducing your finance costs even further? Or should we think of this as kind of more of a necessity for your Hawaii business in the longer term? Hey, John. It's.

John Macalister Royall: Just so we understand is the savings there just from a west inventories being encompassed under the new deal given its crude only and does that come at the cost of carrying more inventories on your balance sheet and should we think of this as a step towards eventually going to know intermediation agreement in reducing your finance costs, even further or should we think of this is.

John Macalister Royall: Kind of more of a necessity for your Hawaii business longer term.

Shawn Flores: Hey John, it's Shawn. You know, I think the drivers of the savings that we called out of ten million dollars a year are really the actual cost of the facility vis-a-vis the ABL and not necessarily the fact that we're equity funding more inventory. In fact, I would signal a big shift in the amount of inventory that we're equity funding. But I think the right way to think about it is about 200 to 300 basis points of savings shifting from intermediation state VLs.

Sean: Hey, John it's Sean.

Shawn Flores: The drivers of the savings that we called out a $10 million a year is really our actual cost of the facility vis vis the ABL not necessarily.

Shawn Flores: The fact that were equity funding more inventory in fact.

Shawn Flores: I wouldn't signal a big shift in the amount of inventory that were equity funding.

Shawn Flores: I think the right way to think about it is it's about 200 to 300 basis points of savings shifting from intermediation State BLS.

Shawn Flores: I think on the question of whether this is just a step in the direction of funding our Hawaii business exclusively with ABL's. I think at this time, we see some benefits in intermediation financing as it relates to our crude. Obviously, we have a complex supply chain with cargoes in the water, and we think that the intermediation facility provides a good solution there. But ultimately, we'll evaluate that as our liquidity position improves over the years and whether it makes sense to shift completely towards APL.

Shawn Flores: I think on the question of whether this is just a step in the direction of funding, our Hawaii business exclusively with a b LS.

Shawn Flores: At this time, we see some benefits in remediation financing as it relates to our crude obviously, we have a complex supply chain with cargoes in the water and we think that the intermediation facility provides a good solution there but.

Shawn Flores: Ultimately, we'll evaluate that as our liquidity position.

Shawn Flores: Improves over the years and whether it makes sense to shift.

Shawn Flores: Completely towards ABL.

Speaker Change: Okay. Thank you.

Speaker Change: The next question comes from Jason Gere Bowman from TD Cowen. Please go ahead.

Jason Daniel Gabelman: The next question comes from Jason Gabelman from TD Cowen. Please go ahead.

Jason Daniel Gabelman: Yeah, thanks for taking my questions. I want to ask about the upcoming Montana maintenance. Can you just remind us what the scope of work is and, given it's your first maintenance event since acquiring the plant and you previously alluded to some eventual improvement in operations, should we expect to see any of that after you come out of turnaround relative to where it was performing prior to turnaround?

Jason Daniel Gabelman: Yeah.

Jason Daniel Gabelman: Yeah. Thanks for taking my questions I wanted to ask about the upcoming Montana maintenance.

Jason Daniel Gabelman: Can you just remind us what the scope of work is and then given it's your first maintenance event since acquiring the plant than you previously alluded to.

Speaker Change: Some <unk>.

Jason Daniel Gabelman: Eventual improvement in operation Ah shall we expect to see any of that.

Jason Daniel Gabelman: After you come out of turnaround relative to where it was performing prior to turnaround. Thanks.

Speaker Change: Sure Jason It's will I assume you mean, the upcoming turnaround you mean, the April activity, we've referenced sorry, yes, yes, yes, the two <unk>.

William Monteleone: Sure, Jason, it's Will. I assume when you mean the upcoming turnaround, you mean the April activity we've referenced? Sorry, yes, yes, yes, the 2Q event. Yeah, so this was largely, as Richard pointed out, on the crude unit, the reformer, and several of the hydrotreaters that we have. And again, as Richard referenced, again moving port to restart activities there. Again, the intent of conducting this activity during this period was to position us to run at, you know, optimum and ultimately the, you know, elevated rates during the summer season.

William Monteleone: Yeah. So this is largely as Richard pointed out.

William Monteleone: The crude unit reformer and in several of the hydro treaters.

William Monteleone: Now, we have and again as Richard reference again moving.

William Monteleone: Fourth restart activities there again, the intent of conducting this activity during the period was to position us to run it you know optimum and <unk> and ultimately the elevated rates during the summer season. So again our plan is to you know again.

William Monteleone: So, again, our plan is to, you know, again, push rates as we come out of the turnaround and into the third quarter. And obviously, the focus in Montana is to again drive reliability. And again, this really comes down to ensuring that we limit the process safety risks that are in the plant and ultimately position us to optimize throughput and focus on reliability and process safety. And I think if we can do that, I think we've already demonstrated the mechanical availability to run the plant into the low 60s. So again, I think that's our focus, and again, not easy to do, but again, I think we've got a really strong team, and that's certainly the top priority.

William Monteleone: Right, so as we come out of turnaround and into the third quarter.

Jason Daniel Gabelman: Got it. And then can you just remind us on the balance sheet what the target cash level is for you guys and or overall liquidity?

Jason Daniel Gabelman: And obviously the focus in Montana is.

Jason Daniel Gabelman: To again drive a liability and again this really comes down to ensuring that.

Jason Daniel Gabelman: Again, we limit.

Jason Daniel Gabelman: The process safety risks that are in the plant and ultimately position us to.

Jason Daniel Gabelman: Optimize throughput and focus on reliability and process safety and I think if we can do that I think we've already demonstrated mechanical availability to run the plant into the low sixties.

Jason Daniel Gabelman: So again I think that's our focus.

Jason Daniel Gabelman: And again not easy to do but again I think we've got a really strong team and that's certainly the.

Jason Daniel Gabelman: The top priority.

Jason Daniel Gabelman:

Speaker Change: Got it and then can you just remind us.

Speaker Change: On the balance sheet.

Jason Daniel Gabelman: Target cash level is for you guys and or overall liquidity.

Jason Daniel Gabelman: Hey, Jason It's Sean I think our minimum liquidity target, it's a really dynamic based on upcoming turnaround events and discretionary capex outlook.

Shawn Flores: Hey, Jason and Shawn, you know, I think our minimum liquidity targets are really dynamic based on upcoming turnaround events and the discretionary CapEx outlook and non-discretionary CapEx. And so I think that will fluctuate over time, depending on upcoming turnaround events.

Shawn Flores: Non discretionary capex.

Shawn Flores: And so I think that will fluctuate over time, depending on upcoming turnaround events. Historically, we signaled pre billings that our minimum liquidity was in the $200 million range, it's safe to assume that that is.

Shawn Flores: Historically, we signaled pre-billings that our minimum liquidity was in the $200 million range. It is safe to assume that that is higher given the expanded business, but needless to say, we've strengthened the balance sheet to the point where we've got excess liquidity. And I think from this point, any additional liquidity will be allocated towards our strategic growth objectives and creating shareholder value with a share of our purchases.

Shawn Flores: It's higher given the expanded business, but needless to say, we've strengthened the balance sheet to the point where.

Shawn Flores: We've got excess liquidity and I think from this point any additional liquidity will be allocated towards our strategic growth objectives, and creating shareholder value with share repurchases.

Speaker Change: Okay. Thanks.

Shawn Flores: As a reminder, if you have a question please press star one.

Manav Gupta: As a reminder, if you have a question, please press star 1. The next question comes from Manav Gupta from UBS. Please go ahead. Good morning.

Manav Gupta: The next question comes from Manav Gupta from UBS. Please go ahead.

Manav Gupta: Good morning. I think in your prepared remarks you indicated that the Pacific Northwest crack has moved up and that's primarily driven by the strength of gasoline and I was just wondering if you could help us understand between the three regions where you're seeing in the terms of relative product strength where are you seeing gasoline the strongest or jet fuel the strongest and or diesel weak or strong if you could just help us walk and understand how the dynamics of the three key projects are looking in the three regions.

Manav Gupta: Good morning, I think in your prepared remarks, you indicated that the Pacific Northwest crack has moved up and that's primarily driven by the strength of gasoline and I was just wondering if you could help us understand between the three regions that you're seeing in terms of relative strength. They they are you seeing gasoline the strongest or jet fuel is the strongest.

Manav Gupta: Our diesel because strong if you could just help us walk and understand how.

Manav Gupta: The dynamics of the peak peak you projects that looking into two regions.

Speaker Change: Sure Manav.

William Monteleone: Yeah, so I think, you know, to start with Hawaii, I think, again, it's really going to be driven by waterborne dynamics. And again, I think we're seeing Strength in the Asian gasoline market, and again, particularly for octane. And that, I think, is going to ripple through into, you know, refining production plans. So again, I think that's, broadly speaking, what I'd point out ahead of the summer season.

Speaker Change: Yeah, So I think to start with Hawaii I think again.

William Monteleone: Really going to be driven by waterborne.

William Monteleone: Dynamics and again I think we're seeing.

William Monteleone: Strength on the Asian gasoline market and again, particularly for octane.

William Monteleone: And that I think is going to ripple through into refining production plants.

William Monteleone: So again I think that's broadly.

William Monteleone: Broadly speaking yeah, what I'd point out ahead of the summer season.

William Monteleone: As you look at the Pacific Northwest, I think, you know, several of the California, northern California refineries that have converted to renewables production are bringing in significant amounts of imports. And that's, I think, impacting the overall clearing price for gasoline. On the flip side, I think diesel on the West Coast is weaker relative to historical conditions. I am seeing more exports out of the West Coast to rebalance the market as renewables are coming in.

William Monteleone: As you look at the Pacific Northwest.

William Monteleone: Definitely seen regional strength on the gasoline side I think several of the California, and northern California refineries that have converted to renewables production, you know or bringing in significant amounts of of imports and that's I think impacting the you know the overall.

William Monteleone: Fearing price for gasoline on the flip side I think diesel on the West coast is weaker relative to historical conditions I'm seeing more exports out of the west coast to rebalance the market.

William Monteleone: As renewables are coming in.

William Monteleone: As you shift inland into the Rockies, again, I think it's going to remain a very hyperseasonal business. We still see strong demand for diesel and see typical seasonal rebounds in gasoline demand. Again, I think overall, we have good product demand across our system.

William Monteleone:

William Monteleone: As you shipped them on into the Rockies again, I think it's going to remain a very a hyper seasonal business still see strong demand for diesel.

William Monteleone: And seeing typical seasonal rebounds in gasoline demand so.

William Monteleone: I think overall <unk> seen good product demand across our system.

Speaker Change: Thank you for taking my question.

Manav Gupta: Thank you for taking my question.

Manav Gupta: Okay.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to well well Italian President and Chief Executive Officer for closing remarks.

William Monteleone: This concludes our question and answer session. I would like to turn the conference back over to Will Monteleone, President and Chief Executive Officer, for closing remarks.

William Monteleone: Thank you all for joining us this morning, I believe the future of this enterprise is bright and we are well positioned to grow our earnings as we enhance and optimize the business. We have built over the last 10 years have a great day.

William Monteleone: Thank you all for joining us this morning. I believe the future of this enterprise is bright, and we are well positioned to grow our earnings as we enhance and optimize the business we've built over the last 10 years. Have a great day.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

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