Aug 2, 2018 SOURCE: PR NewsWire
PBF Energy Reports Second Quarter 2018 Results, Declares Dividend of $0.30 Per Share
PARSIPPANY, N.J., Aug. 2, 2018 /PRNewswire/ -- PBF Energy Inc. (NYSE: PBF) today reported second quarter 2018 income from operations of $422.3 million as compared to loss from operations of $111.0 million for the second quarter of 2017. Excluding special items, second quarter 2018 income from operations was $264.3 million as compared to income from operations of $40.0 million for the second quarter of 2017. Special items in the second quarter 2018 results, which increased operating income, include a net, non-cash, after-tax gain of $116.3 million, or $1.00 per share, lower-of-cost-or-market ("LCM") inventory adjustment.
The company reported second quarter 2018 net income of $287.7 million and net income attributable to PBF Energy Inc. of $272.2 million or $2.37 per share. This compares to net loss of $104.2 million, and net loss attributable to PBF Energy Inc. of $109.7 million or $1.01 per share for the second quarter 2017. Adjusted fully-converted net income for the second quarter 2018, excluding special items, was $160.2 million, or $1.38 per share on a fully-exchanged, fully-diluted basis, as described below, compared to an adjusted fully-converted net loss of $6.9 million or $0.06 per share, for the second quarter 2017. PBF Energy's financial results reflect the consolidation of PBF Logistics LP (NYSE: PBFX), a master limited partnership of which PBF indirectly owns the general partner and approximately 43.9% of the limited partner interests as of quarter-end.
Tom Nimbley, PBF Energy's Chairman and CEO, said, "Our strong results for the second quarter reflect the the earnings power of our five-refinery system. The investments and improvements we have made, especially at Torrance, are beginning to show in our operations and we have additional opportunities system-wide to further enhance our earnings potential." Mr. Nimbley continued, "Looking forward, our assets are well-positioned to benefit from favorable market conditions through safe, reliable and environmentally responsible operations."
PBF Energy Inc. Declares Dividend
The company announced today that it will pay a quarterly dividend of $0.30 per share of Class A common stock on August 30, 2018, to holders of record as of August 15, 2018.
Outlook
For the third quarter 2018, we expect East Coast total throughput to average 340,000 to 360,000 barrels per day; Mid-Continent total throughput is expected to average 145,000 to 155,000 barrels per day; Gulf Coast total throughput is expected to average 180,000 to 190,000 barrels per day and West Coast total throughput is expected to average 165,000 to 175,000 barrels per day.
For the full-year 2018, we expect East Coast total throughput to average 340,000 to 360,000 barrels per day; Mid-Continent total throughput is expected to average 140,000 to 150,000 barrels per day; Gulf Coast total throughput is expected to average 180,000 to 190,000 barrels per day and West Coast total throughput is expected to average 160,000 to 170,000 barrels per day.
Adjusted Fully-Converted Results
Adjusted fully-converted results assume the exchange of all PBF Energy Company LLC Series A Units and dilutive securities into shares of PBF Energy Inc. Class A common stock on a one-for-one basis, resulting in the elimination of the noncontrolling interest and a corresponding adjustment to the company's tax provision.
Non-GAAP Measures
This earnings release, and the discussion during the management conference call, may include references to Non-GAAP (Generally Accepted Accounting Principles) measures including Adjusted Fully-Converted Net Income (Loss), Adjusted Fully-Converted Net Income (Loss) excluding special items, Adjusted Fully-Converted Net Income (Loss) per fully-exchanged, fully-diluted share, gross refining margin, gross refining margin excluding special items, gross refining margin per barrel of throughput, EBITDA (Earnings before Interest, Income Taxes, Depreciation and Amortization), EBITDA excluding special items, Adjusted EBITDA and projected EBITDA related to the refinery acquisitions. PBF believes that Non-GAAP financial measures provide useful information about its operating performance and financial results. However, these measures have important limitations as analytical tools and should not be viewed in isolation or considered as alternatives for, or superior to, comparable GAAP financial measures. PBF's Non-GAAP financial measures may also differ from similarly named measures used by other companies. See the accompanying tables and footnotes in this release for additional information on the Non-GAAP measures used in this release and reconciliations to the most directly comparable GAAP measures.
Conference Call Information
PBF Energy's senior management will host a conference call and webcast regarding quarterly results and other business matters on Thursday, August 2, 2018, at 8:30 a.m. ET. The call is being webcast and can be accessed at PBF Energy's website, http://www.pbfenergy.com. The call can also be accessed by dialing (877) 876-9176 or (785) 424-1667, conference ID: PBFQ218. The audio replay will be available two hours after the end of the call through August 16, 2018, by dialing (800) 723-0498 or (402) 220-2652.
Forward-Looking Statements
Statements in this press release relating to future plans, results, performance, expectations, achievements and the like are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which may be beyond the company's control, that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors and uncertainties that may cause actual results to differ include but are not limited to the risks disclosed in the company's filings with the SEC, as well as the risks disclosed in PBF Logistics LP's SEC filings and any impact PBF Logistics LP may have on the company's credit rating, cost of funds, employees, customer and vendors; risk relating to the securities markets generally; and the impact of adverse market conditions affecting the company, unanticipated developments, regulatory approvals, changes in laws and other events that negatively impact the company. All forward-looking statements speak only as of the date hereof. The company undertakes no obligation to revise or update any forward-looking statements except as may be required by applicable law.
About PBF Energy Inc.
PBF Energy Inc. (NYSE:PBF) is one of the largest independent refiners in North America, operating, through its subsidiaries, oil refineries and related facilities in California, Delaware, Louisiana, New Jersey and Ohio. Our mission is to operate our facilities in a safe, reliable and environmentally responsible manner, provide employees with a safe and rewarding workplace, become a positive influence in the communities where we do business, and provide superior returns to our investors.
PBF Energy Inc. also currently indirectly owns the general partner and approximately 44% of the limited partnership interest of PBF Logistics LP (NYSE: PBFX).
PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except share and per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2018 2017 2018 2017
---- ---- ---- ----
Revenues $7,444,083 $5,017,225 $13,246,859 $9,771,698
Cost and expenses (Note 1):
6,452,535 4,605,693 11,584,637 8,802,460
Cost of products and other
417,695 412,790 843,830 864,056
Operating expenses (excluding depreciation and amortization expense as reflected
below)
89,748 62,683 173,021 121,853
Depreciation and amortization expense
---
Cost of sales 6,959,978 5,081,166 12,601,488 9,788,369
58,685 41,058 121,498 84,888
General and administrative expenses (excluding depreciation and amortization
expense as reflected below)
2,563 6,020 5,277 7,782
Depreciation and amortization expense
594 29 673 912
Loss on sale of assets
Total cost and expenses 7,021,820 5,128,273 12,728,936 9,881,951
--------- --------- ---------- ---------
Income (loss) from operations 422,263 (111,048) 517,923 (110,253)
Other income (expense):
4,140 1,104 4,153 (1,484)
Change in fair value of catalyst leases
- (25,451) - (25,451)
Debt extinguishment costs
(43,448) (40,698) (86,646) (77,881)
Interest expense, net
277 (101) 555 (202)
Other non-service components of net periodic benefit cost (Note 17)
---
Income (loss) before income taxes 383,232 (176,194) 435,985 (215,271)
Income tax expense (benefit) 95,545 (72,043) 106,487 (91,090)
------ ------- ------- -------
Net income (loss) 287,687 (104,151) 329,498 (124,181)
15,534 5,512 26,979 16,559
Less: net income attributable to noncontrolling interests
---
Net income (loss) attributable to PBF Energy Inc. stockholders $272,153 $(109,663) $302,519 $(140,740)
======== ========= ======== =========
Net income (loss) available to Class A common stock per share:
$2.41 $(1.01) $2.70 $(1.30)
Basic
$2.37 $(1.01) $2.66 $(1.30)
Diluted
112,875,813 108,779,992 111,853,774 108,770,237
Weighted-average shares outstanding-basic
===
116,409,273 108,779,992 115,749,927 108,770,237
Weighted-average shares outstanding-diluted
===
Dividends per common share $0.30 $0.30 $0.60 $0.60
===== ===== ===== =====
Adjusted fully-converted net income (loss) and adjusted fully-converted net
income (loss) per fully exchanged, fully diluted shares outstanding (Note 2):
$276,451 $(113,937) $307,564 $(146,409)
Adjusted fully-converted net income (loss)
$2.37 $(1.01) $2.66 $(1.30)
Adjusted fully-converted net income (loss) per fully exchanged, fully diluted share
116,409,273 112,608,863 115,749,927 112,606,236
Adjusted fully-converted shares outstanding - diluted
===
See Footnotes to Earnings Release Tables
PBF ENERGY INC. AND SUBSIDIARIES
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
(Unaudited, in thousands, except share and per share data)
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED Three Months Ended Six Months Ended
FULLY-CONVERTED
NET INCOME (LOSS) AND ADJUSTED FULLY-CONVERTED NET June 30, June 30,
INCOME (LOSS)
EXCLUDING SPECIAL ITEMS (Note 2) 2018 2017 2018 2017
------------------------------- ---- ---- ---- ----
Net income (loss) attributable to PBF Energy Inc. stockholders $272,153 $(109,663) $302,519 $(140,740)
Less: Income allocated to participating securities 197 269 398 539
--- --- --- ---
Income (loss) available to PBF Energy Inc. stockholders - basic 271,956 (109,932) 302,121 (141,279)
Add: Net income (loss) attributable to noncontrolling interest (Note 3) 6,108 (6,604) 7,396 (8,460)
Less: Income tax (expense) benefit (Note 4) (1,613) 2,599 (1,953) 3,330
------ ----- ------ -----
Adjusted fully-converted net income (loss) $276,451 $(113,937) $307,564 $(146,409)
Special Items (Note 5):
Add: Non-cash LCM inventory adjustment (158,002) 151,095 (245,655) 167,134
Add: Debt extinguishment costs - 25,451 - 25,451
Less: Recomputed income taxes on special items 41,728 (69,489) 64,877 (75,801)
------ ------
Adjusted fully-converted net income (loss) excluding special items $160,177 $(6,880) $126,786 $(29,625)
======== ======= ======== ========
Weighted-average shares outstanding of PBF Energy Inc. 112,875,813 108,779,992 111,853,774 108,770,237
Conversion of PBF LLC Series A Units (Note 6) 1,838,196 3,828,871 2,681,980 3,835,999
Common stock equivalents (Note 7) 1,695,264 - 1,214,173 -
--------- ---
Fully-converted shares outstanding - diluted 116,409,273 112,608,863 115,749,927 112,606,236
=========== =========== =========== ===========
Adjusted fully-converted net income (loss) (per fully exchanged, fully $2.37 $(1.01) $2.66 $(1.30)
diluted shares outstanding)
Adjusted fully-converted net income (loss) excluding special items $1.38 $(0.06) $1.10 $(0.26)
(per fully exchanged, fully diluted shares outstanding) (Note 5)
RECONCILIATION OF INCOME (LOSS) FROM OPERATIONS June 30, June 30,
TO INCOME FROM OPERATIONS EXCLUDING SPECIAL ITEMS 2018 2017 2018 2017
------------------------------------------------- ---- ---- ---- ----
Income (loss) from operations (Note 17) $422,263 $(111,048) $517,923 $(110,253)
Special Items (Note 5):
Add:Non-cash LCM inventory adjustment (158,002) 151,095 (245,655) 167,134
-------- ------- -------- -------
Income from operations excluding special items $264,261 $40,047 $272,268 $56,881
======== ======= ======== =======
See Footnotes to Earnings Release Tables
PBF ENERGY INC. AND SUBSIDIARIES
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
EBITDA RECONCILIATIONS (Note 8)
(Unaudited, in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND 2018 2017 2018 2017
EBITDA EXCLUDING SPECIAL ITEMS
Net income (loss) $287,687 $(104,151) $329,498 $(124,181)
Add: Depreciation and amortization expense 92,311 68,703 178,298 129,635
Add: Interest expense, net 43,448 40,698 86,646 77,881
Add: Income tax expense (benefit) 95,545 (72,043) 106,487 (91,090)
------ -------
EBITDA $518,991 $(66,793) $700,929 $(7,755)
Special Items (Note 5):
Add: Non-cash LCM inventory adjustment (158,002) 151,095 (245,655) 167,134
Add: Debt extinguishment costs - 25,451 - 25,451
--- ------ --- ------
EBITDA excluding special items $360,989 $109,753 $455,274 $184,830
======== ======== ======== ========
Three Months Ended Six Months Ended
June 30, June 30,
RECONCILIATION OF EBITDA TO ADJUSTED EBITDA 2018 2017 2018 2017
------------------------------------------- ---- ---- ---- ----
EBITDA $518,991 $(66,793) $700,929 $(7,755)
Add: Stock-based compensation 7,945 7,817 13,017 13,842
Add: Net non-cash change in fair value of catalyst leases (4,140) (1,104) (4,153) 1,484
Add: Non-cash LCM inventory adjustment (Note 5) (158,002) 151,095 (245,655) 167,134
Add: Debt extinguishment costs (Note 5) - 25,451 - 25,451
--- ------ --- ------
Adjusted EBITDA $364,794 $116,466 $464,138 $200,156
======== ======== ======== ========
See Footnotes to Earnings Release Tables
PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited, in thousands)
June 30, December 31,
2018 2017
---- ----
Balance Sheet Data:
Cash and cash equivalents $478,329 $573,021
Inventories 2,540,277 2,213,797
Total assets 8,546,715 8,117,993
Total debt 2,218,540 2,191,650
Total equity 3,172,284 2,902,949
Total equity excluding special items (Note 5, 14) $3,038,711 $2,950,154
Total debt to capitalization ratio (Note 14) 41% 43%
Total debt to capitalization ratio, excluding special items (Note 14) 42% 43%
Net debt to capitalization ratio (Note 14) 35% 36%
Net debt to capitalization ratio, excluding special items (Note 14) 36% 35%
SUMMARIZED STATEMENT OF CASH FLOW DATA
(Unaudited, in thousands)
Six Months Ended June 30,
2018 2017
---- ----
Cash flows provided by (used in) operations $307,888 $(34,665)
Cash flows used in investing activities (365,241) (428,641)
Cash flows used in financing activities (37,339) (109,937)
------- --------
Net decrease in cash and cash equivalents (94,692) (573,243)
Cash and cash equivalents, beginning of period 573,021 746,274
Cash and cash equivalents, end of period $478,329 $173,031
======== ========
See Footnotes to Earnings Release Tables
PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
CONSOLIDATING FINANCIAL INFORMATION (Note 9)
(Unaudited, in thousands)
Three Months Ended June 30, 2018
Refining Logistics Corporate Eliminations Consolidated
Total
-----
Revenues $7,440,470 $67,398 $ - $(63,785) $7,444,083
Depreciation and amortization expense 82,829 6,919 2,563 - 92,311
Income (loss) from operations (Note 15, 17) 446,506 34,880 (54,760) (4,363) 422,263
Interest expense, net 2,596 10,425 30,427 - 43,448
Capital expenditures (Note 18) 210,930 59,568 1,463 - 271,961
Three Months Ended June 30, 2017
Refining Logistics Corporate Eliminations Consolidated
Total
-----
Revenues $5,013,251 $62,329 $ - $(58,355) $5,017,225
Depreciation and amortization expense 56,973 5,710 6,020 - 68,703
Income (loss) from operations (Note 15, 17) (101,264) 35,017 (40,981) (3,820) (111,048)
Interest expense, net 1,335 7,886 31,477 - 40,698
Capital expenditures (Note 18) 242,655 36,918 148 - 279,721
Six Months Ended June 30, 2018
Refining Logistics Corporate Eliminations Consolidated
Total
-----
Revenues $13,240,071 $131,437 $ - $(124,649) $13,246,859
Depreciation and amortization expense 159,607 13,414 5,277 - 178,298
Income (loss) from operations (Note 15, 17) 572,219 70,085 (115,996) (8,385) 517,923
Interest expense, net 4,431 20,373 61,842 - 86,646
Capital expenditures (Note 18) 299,227 63,521 2,493 - 365,241
Six Months Ended June 30, 2017
Refining Logistics Corporate Eliminations Consolidated
Total
-----
Revenues $9,763,449 $122,806 $ - $(114,557) $9,771,698
Depreciation and amortization expense 110,791 11,062 7,782 - 129,635
Income (loss) from operations (Note 15, 17) (90,771) 71,058 (83,121) (7,419) (110,253)
Interest expense, net 2,253 15,870 59,758 - 77,881
Capital expenditures (Note 18) 409,871 56,385 2,409 - 468,665
Balance at June 30, 2018
Refining Logistics Corporate Eliminations Consolidated
Total
-----
Total Assets (Note 16) $7,744,601 $777,756 $55,831 $(31,473) $8,546,715
Balance at December 31, 2017
Refining Logistics Corporate Eliminations Consolidated
Total
-----
Total Assets (Note 16) $7,298,049 $737,550 $123,211 $(40,817) $8,117,993
See Footnotes to Earnings Release Tables
PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
MARKET INDICATORS AND KEY OPERATING INFORMATION
(Unaudited, amounts in thousands except as indicated)
Three Months Ended Six Months Ended
June 30, June 30,
Market Indicators (dollars per barrel) (Note 10) 2018 2017 2018 2017
---- ---- ---- ----
Dated Brent Crude $74.42 $49.69 $70.75 $51.61
West Texas Intermediate (WTI) crude oil $68.02 $48.11 $65.52 $49.89
Light Louisiana Sweet (LLS) crude oil $73.14 $50.17 $69.58 $51.77
Alaska North Slope (ANS) crude oil $73.93 $50.61 $70.64 $52.20
Crack Spreads:
Dated Brent (NYH) 2-1-1 $14.96 $14.81 $13.90 $13.21
WTI (Chicago) 4-3-1 $17.56 $14.09 $14.74 $12.65
LLS (Gulf Coast) 2-1-1 $13.52 $12.56 $13.19 $12.30
ANS (West Coast) 4-3-1 $18.70 $19.16 $17.59 $17.85
Crude Oil Differentials:
Dated Brent (foreign) less WTI $6.40 $1.58 $5.23 $1.73
Dated Brent less Maya (heavy, sour) $12.40 $8.00 $10.78 $7.34
Dated Brent less WTS (sour) $14.78 $2.65 $10.20 $2.98
Dated Brent less ASCI (sour) $5.09 $2.85 $4.84 $3.46
WTI less WCS (heavy, sour) $18.26 $9.56 $22.17 $11.23
WTI less Bakken (light, sweet) $0.39 $0.30 $0.70 $0.61
WTI less Syncrude (light, sweet) $2.98 $(1.35) $1.69 $(1.81)
WTI less LLS (light, sweet) $(5.12) $(2.06) $(4.06) $(1.88)
WTI less ANS (light, sweet) $(5.91) $(2.50) $(5.12) $(2.31)
Natural gas (dollars per MMBTU) $2.85 $3.14 $2.82 $3.10
Key Operating Information
Production (barrels per day ("bpd") in thousands) 866.1 764.2 831.2 748.8
Crude oil and feedstocks throughput (bpd in thousands) 866.6 769.2 833.3 753.7
Total crude oil and feedstocks throughput (millions of barrels) 78.8 70.0 150.8 136.4
Consolidated gross margin per barrel of throughput $6.14 $(0.90) $4.28 $(0.12)
Gross refining margin, excluding special items, per barrel of throughput (Note 5, $9.77 $7.17 $8.57 $7.45
Note 11)
Refinery operating expense, per barrel of throughput (Note 12) $5.11 $5.69 $5.40 $6.12
Crude and feedstocks (% of total throughput) (Note 13)
Heavy 38% 30% 37% 35%
Medium 28% 31% 31% 30%
Light 21% 23% 20% 20%
Other feedstocks and blends 13% 16% 12% 15%
--- --- --- ---
Total throughput 100% 100% 100% 100%
=== === === ===
Yield (% of total throughput)
Gasoline and gasoline blendstocks 48% 50% 49% 51%
Distillates and distillate blendstocks 32% 30% 32% 30%
Lubes 1% 1% 1% 1%
Chemicals 2% 2% 2% 2%
Other 17% 16% 16% 16%
--- --- --- ---
Total yield 100% 99% 100% 100%
=== === === ===
See Footnotes to Earnings Release Tables
PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
SUPPLEMENTAL OPERATING INFORMATION
(Unaudited, amounts in thousands except as indicated)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
---- ---- ---- ----
Supplemental Operating Information - East Coast (Delaware City and Paulsboro)
Production (bpd in thousands) 357.1 321.4 342.5 318.6
Crude oil and feedstocks throughput (bpd in thousands) 359.9 326.1 346.5 323.2
Total crude oil and feedstocks throughput (millions of barrels) 32.7 29.7 62.7 58.5
Gross margin per barrel of throughput $3.39 $(2.60) $2.36 $(1.36)
Gross refining margin, excluding special items, per barrel of throughput (Note 5, Note 11) $7.17 $4.98 $6.84 $5.46
Refinery operating expense, per barrel of throughput (Note 12) $4.34 $4.54 $4.73 $4.85
Crude and feedstocks (% of total throughput) (Note 13):
Heavy 30% 31% 27% 34%
Medium 47% 40% 49% 38%
Light 4% 12% 7% 11%
Other feedstocks and blends 19% 17% 17% 17%
--- --- --- ---
Total throughput 100% 100% 100% 100%
=== === === ===
Yield (% of total throughput):
Gasoline and gasoline blendstocks 45% 43% 46% 45%
Distillates and distillate blendstocks 33% 33% 33% 31%
Lubes 2% 2% 2% 2%
Chemicals 1% 1% 1% 1%
Other 18% 20% 17% 20%
---
Total yield 99% 99% 99% 99%
=== === === ===
Supplemental Operating Information - Mid-Continent (Toledo)
Production (bpd in thousands) 154.7 158.2 139.1 142.2
Crude oil and feedstocks throughput (bpd in thousands) 152.9 154.6 138.0 139.3
Total crude oil and feedstocks throughput (millions of barrels) 13.9 14.1 25.0 25.2
Gross margin per barrel of throughput $9.61 $(0.19) $5.41 $(0.85)
Gross refining margin, excluding special items, per barrel of throughput (Note 5, Note $12.63 $7.90 $10.68 $7.79
11)
Refinery operating expense, per barrel of throughput (Note 12) $4.93 $4.82 $5.49 $5.58
Crude and feedstocks (% of total throughput) (Note 13):
Medium 34% 35% 36% 39%
Light 64% 64% 63% 60%
Other feedstocks and blends 2% 1% 1% 1%
--- --- ---
Total throughput 100% 100% 100% 100%
=== === === ===
Yield (% of total throughput):
Gasoline and gasoline blendstocks 50% 55% 55% 55%
Distillates and distillate blendstocks 36% 31% 33% 33%
Chemicals 5% 6% 5% 6%
Other 10% 10% 8% 8%
--- --- --- ---
Total yield 101% 102% 101% 102%
=== === === ===
See Footnotes to Earnings Release Tables
PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
SUPPLEMENTAL OPERATING INFORMATION
(Unaudited, amounts in thousands except as indicated)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
---- ---- ---- ----
Supplemental Operating Information - Gulf Coast (Chalmette)
Production (bpd in thousands) 190.0 191.8 176.9 173.6
Crude oil and feedstocks throughput (bpd in thousands) 188.5 191.3 178.9 173.6
Total crude oil and feedstocks throughput (millions of barrels) 17.2 17.4 32.4 31.4
Gross margin per barrel of throughput $5.30 $0.85 $2.83 $1.24
Gross refining margin, excluding special items, per barrel of throughput (Note 5, $7.92 $7.76 $6.29 $8.40
Note 11)
Refinery operating expense, per barrel of throughput (Note 12) $4.65 $4.65 $4.82 $5.35
Crude and feedstocks (% of total throughput) (Note 13):
Heavy 42% 42% 42% 42%
Medium 13% 25% 16% 25%
Light 30% 20% 31% 16%
Other feedstocks and blends 15% 13% 11% 17%
Total throughput 100% 100% 100% 100%
=== === === ===
Yield (% of total throughput):
Gasoline and gasoline blendstocks 43% 45% 42% 47%
Distillates and distillate blendstocks 32% 33% 32% 31%
Chemicals 2% 2% 1% 2%
Other 24% 20% 24% 20%
---
Total yield 101% 100% 99% 100%
=== === === ===
Supplemental Operating Information - West Coast (Torrance)
Production (bpd in thousands) 164.3 92.8 172.7 114.4
Crude oil and feedstocks throughput (bpd in thousands) 165.3 97.2 169.9 117.6
Total crude oil and feedstocks throughput (millions of barrels) 15.0 8.8 30.7 21.3
Gross margin per barrel of throughput $7.12 $(4.55) $6.17 $(1.66)
Gross refining margin, excluding special items, per barrel of throughput (Note 5, $14.88 $12.18 $12.80 $11.10
Note 11)
Refinery operating expense, per barrel of throughput (Note 12) $7.46 $13.01 $7.29 $11.39
Crude and feedstocks (% of total throughput) (Note 13):
Heavy 82% 57% 81% 73%
Medium 7% 3% 6% 2%
Other feedstocks and blends 11% 40% 13% 25%
Total throughput 100% 100% 100% 100%
=== === === ===
Yield (% of total throughput):
Gasoline and gasoline blendstocks 57% 69% 59% 66%
Distillates and distillate blendstocks 27% 12% 27% 17%
Other 15% 14% 16% 14%
---
Total yield 99% 95% 102% 97%
=== === === ===
See Footnotes to Earnings Release Tables
PBF ENERGY INC. AND SUBSIDIARIES
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
GROSS REFINING MARGIN / GROSS REFINING MARGIN PER BARREL OF THROUGHPUT (Note 11)
(Unaudited, in thousands, except per barrel amounts)
Three Months Ended Three Months Ended
June 30, 2018 June 30, 2017
RECONCILIATION OF CONSOLIDATED GROSS MARGIN TO $ per barrel of $ per barrel of
GROSS REFINING MARGIN AND GROSS REFINING MARGIN throughput
EXCLUDING SPECIAL ITEMS throughput
----------------------- ---
Calculation of consolidated gross margin:
Revenues $7,444,083 $94.40 $5,017,225 $71.68
Less: Cost of Sales 6,959,978 88.26 5,081,166 72.58
--------- ----- --------- -----
Consolidated gross margin $484,105 $6.14 $(63,941) $(0.90)
Reconciliation of consolidated gross margin to gross refining
margin:
Consolidated gross margin $484,105 $6.14 $(63,941) $(0.90)
Add: PBFX operating expense 19,111 0.24 15,504 0.22
Add: PBFX depreciation expense 6,919 0.08 5,710 0.08
Less: Revenues of PBFX (67,398) (0.85) (62,329) (0.89)
Add: Refinery operating expenses (Note 17) 402,751 5.11 398,501 5.69
Add: Refinery depreciation expense 82,829 1.05 56,973 0.81
----------------
Gross refining margin $928,317 $11.77 $350,418 $5.01
Special Items (Note 5):
Add: Non-cash LCM inventory adjustment (158,002) (2.00) 151,095 2.16
Gross refining margin excluding special items $770,315 $9.77 $501,513 $7.17
======== ===== ======== =====
Six Months Ended Six Months Ended
June 30, 2018 June 30, 2017
RECONCILIATION OF CONSOLIDATED GROSS MARGIN TO $ per barrel of $ per barrel of
GROSS REFINING MARGIN AND GROSS REFINING MARGIN throughput throughput
EXCLUDING SPECIAL ITEMS
----------------------- ---
Calculation of consolidated gross margin:
Revenues $13,246,859 $87.83 $9,771,698 $71.63
Less: Cost of Sales 12,601,488 83.55 9,788,369 71.75
Consolidated gross margin $645,371 $4.28 $(16,671) $(0.12)
Reconciliation of consolidated gross margin to gross refining
margin:
Consolidated gross margin $645,371 $4.28 $(16,671) $(0.12)
Add: PBFX operating expense 37,159 0.25 31,233 0.23
Add: PBFX depreciation expense 13,414 0.09 10,952 0.08
Less: Revenues of PBFX (131,437) (0.87) (122,806) (0.90)
Add: Refinery operating expense (Note 17) 814,198 5.40 835,253 6.12
Add: Refinery depreciation expense 159,607 1.05 110,901 0.81
----------------
Gross refining margin $1,538,312 $10.20 $848,862 $6.22
Special Items (Note 5):
Add: Non-cash LCM inventory adjustment (245,655) (1.63) 167,134 1.23
----------------
Gross refining margin excluding special items $1,292,657 $8.57 $1,015,996 $7.45
========== ===== ========== =====
See Footnotes to Earnings Release Tables
PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
FOOTNOTES TO EARNINGS RELEASE TABLES
(1) During the third quarter of 2017,
we determined that we would revise the
presentation of certain line items on
our consolidated statements of
operations to enhance our disclosure
under the requirements of Rule 5-03
of Regulation S-X. The revised
presentation is comprised of the
inclusion of a subtotal within cost
and expenses referred to as "Cost of
sales" and the reclassification of
total depreciation and amortization
expense between such amounts
attributable to cost of sales and
other operating costs and expenses.
The amount of depreciation and
amortization expense that is presented
separately within the "Cost of sales"
subtotal represents depreciation and
amortization of refining and logistics
assets that are integral to the
refinery production process. The
historical comparative information has
been revised to conform to the current
presentation. This revised
presentation does not have an effect
on our historical condensed
consolidated income from operations or
net income, nor does it have any
impact on our condensed consolidated
balance sheets, statements of
comprehensive income or statements of
cash flows.
(2) Adjusted fully-converted
information is presented in this table
as management believes that these Non-
GAAP measures, when presented in
conjunction with comparable GAAP
measures, are useful to investors to
compare our results across the periods
presented and facilitates an
understanding of our operating
results. We also use these measures to
evaluate our operating performance.
These measures should not be
considered a substitute for, or
superior to, measures of financial
performance prepared in accordance
with GAAP. The differences between
adjusted fully-converted and GAAP
results are explained in footnotes 3
through 7.
(3) Represents the elimination of the
noncontrolling interest associated
with the ownership by the members of
PBF Energy Company LLC ("PBF LLC")
other than PBF Energy Inc., as if such
members had fully exchanged their PBF
LLC Series A Units for shares of PBF
Energy's Class A common stock.
(4) Represents an adjustment to reflect
our estimated annualized statutory
corporate tax rate of approximately
26.4% and 39.4% for the 2018 and 2017
periods, respectively, applied to net
income attributable to noncontrolling
interests for all periods presented.
The adjustment assumes the full
exchange of existing PBF LLC Series A
Units as described in footnote 3. Our
statutory tax rates were reduced in
2018 as a result of the Tax Cut and
Jobs Act enactment.
(5) The Non-GAAP measures presented
include adjusted fully-converted net
income (loss) excluding special items,
income from operations excluding
special items, EBITDA excluding
special items and gross refining
margin excluding special items.
Special items presented for the three
and six months ended June 30, 2018
relate to a lower of cost or market
("LCM") inventory adjustment and
special items presented for the three
and six months ended June 30, 2017
relate to an LCM inventory adjustment
and debt extinguishment costs, as
discussed further below. Additionally,
the cumulative effects of all prior
period special items on equity are
shown in footnote 14.
Although we believe that Non-GAAP
financial measures excluding the
impact of special items provide useful
supplemental information to investors
regarding the results and performance
of our business and allow for useful
period-over-period comparisons, such
Non-GAAP measures should only be
considered as a supplement to, and not
as a substitute for, or superior to,
the financial measures prepared in
accordance with GAAP.
LCM inventory adjustment - LCM is a
GAAP guideline related to inventory
valuation that requires inventory to
be stated at the lower of cost or
market. Our inventories are stated at
the lower of cost or market. Cost is
determined using last-in, first-out
(LIFO) inventory valuation
methodology, in which the most
recently incurred costs are charged to
cost of sales and inventories are
valued at base layer acquisition
costs. Market is determined based on
an assessment of the current estimated
replacement cost and net realizable
selling price of the inventory. In
periods where the market price of our
inventory declines substantially, cost
values of inventory may exceed market
values. In such instances, we record
an adjustment to write down the value
of inventory to market value in
accordance with GAAP. In subsequent
periods, the value of inventory is
reassessed and an LCM inventory
adjustment is recorded to reflect the
net change in the LCM inventory
reserve between the prior period and
the current period.
The following table shows the LCM
inventory reserve as of each date
presented (in thousands):
2018 2017
---- ----
January 1, $300,456 $595,988
March 31, 212,803 612,027
June 30, 54,801 763,122
The following table includes the
corresponding impact of changes in
the LCM inventory reserve on
income (loss) from operations and
net income (loss) for the periods
presented (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2018 2017 2018 2017
---- ---- ---- ----
Net LCM inventory adjustment benefit (charge) $158,002 $(151,095) $245,655 $(167,134)
in income (loss) from operations
Net LCM inventory adjustment benefit (charge) 116,274 (91,624) 180,778 (101,350)
in net income (loss)
Debt Extinguishment Costs - During
the three and six months ended June,
30, 2017, we recorded pre-tax debt
extinguishment costs of $25.5 million
related to the redemption of the 2020
Senior Secured Notes. These
nonrecurring charges decreased net
income by $15.4 million for the three
and six months ended June 30, 2017.
There were no such costs in the same
periods of 2018.
(6) Represents an adjustment to
weighted-average diluted shares
outstanding to assume the full
exchange of existing PBF LLC Series
A Units as described in footnote 3
above.
(7) Represents weighted-average
diluted shares outstanding assuming
the conversion of all common stock
equivalents, including options and
warrants for PBF LLC Series A Units
and options for shares of PBF Energy
Class A common stock as calculated
under the treasury stock method (to
the extent the impact of such
exchange would not be anti-
dilutive) for the three and six
months ended June 30, 2018 and June
30, 2017, respectively. Common stock
equivalents exclude the effects of
options and warrants to purchase
12,500 and 233,250 shares of PBF
Energy Class A common stock and PBF
LLC Series A Units because they are
anti-dilutive for the three and six
months ended June 30, 2018,
respectively. Common stock
equivalents exclude the effects of
options and warrants to purchase
7,278,142 and 7,278,142 shares of
PBF Energy Class A common stock and
PBF LLC Series A Units because they
are anti-dilutive for the three and
six months ended June 30, 2017,
respectively.
(8) EBITDA (Earnings before Interest,
Income Taxes, Depreciation and
Amortization) and Adjusted EBITDA
are supplemental measures of
performance that are not required
by, or presented in accordance with
GAAP. We use these Non-GAAP
financial measures as a supplement
to our GAAP results in order to
provide additional metrics on
factors and trends affecting our
business. EBITDA and Adjusted EBITDA
are measures of operating
performance that are not defined by
GAAP and should not be considered
substitutes for net income as
determined in accordance with GAAP.
In addition, because EBITDA and
Adjusted EBITDA are not calculated
in the same manner by all companies,
they are not necessarily comparable
to other similarly titled measures
used by other companies. EBITDA and
Adjusted EBITDA have their
limitations as an analytical tool,
and you should not consider them in
isolation or as substitutes for
analysis of our results as reported
under GAAP.
(9) We operate in two reportable
segments: Refining and Logistics.
Our operations that are not included
in the Refining and Logistics
segments are included in Corporate.
As of June 30, 2018, the Refining
segment includes the operations of
our oil refineries and related
facilities in Delaware City,
Delaware, Paulsboro, New Jersey,
Toledo, Ohio, New Orleans, Louisiana
and Torrance, California. The
Logistics segment includes the
operations of PBF Logistics LP
("PBFX"), a growth-oriented master
limited partnership which owns or
leases, operates, develops and
acquires crude oil and refined
petroleum products terminals,
pipelines, storage facilities and
similar logistics assets. PBFX's
assets primarily consist of rail and
truck terminals and unloading racks,
storage facilities and pipelines, a
substantial portion of which were
acquired from or contributed by PBF
LLC and are located at, or nearby,
the Company's refineries. PBFX
provides various rail, truck and
marine terminaling services,
pipeline transportation services and
storage services to PBF Holding and/
or its subsidiaries and third party
customers through fee-based
commercial agreements.
PBFX currently does not generate
significant third party revenue and
intersegment related-party revenues
are eliminated in consolidation.
From a PBF Energy perspective, the
Company's chief operating decision
maker evaluates the Logistics
segment as a whole without regard to
any of PBFX's individual operating
segments.
(10) As reported by Platts.
(11) Gross refining margin and gross
refining margin per barrel of
throughput are Non-GAAP measures
because they exclude refinery
operating expenses, depreciation and
amortization and gross margin of
PBFX. Gross refining margin per
barrel is gross refining margin,
divided by total crude and
feedstocks throughput. We believe
they are important measures of
operating performance and provide
useful information to investors
because gross refining margin per
barrel is a helpful metric
comparison to the industry refining
margin benchmarks shown in the
Market Indicators Tables, as the
industry benchmarks do not include a
charge for refinery operating
expenses and depreciation. Other
companies in our industry may not
calculate gross refining margin and
gross refining margin per barrel in
the same manner. Gross refining
margin and gross refining margin per
barrel of throughput have their
limitations as an analytical tool,
and you should not consider them in
isolation or as substitutes for
analysis of our results as reported
under GAAP.
(12) Represents refinery operating
expenses, including corporate-owned
logistics assets, excluding
depreciation and amortization,
divided by total crude oil and
feedstocks throughput.
(13) We define heavy crude oil as
crude oil with American Petroleum
Institute (API) gravity less than 24
degrees. We define medium crude oil
as crude oil with API gravity
between 24 and 35 degrees. We define
light crude oil as crude oil with
API gravity higher than 35 degrees.
(14) The total debt to capitalization
ratio is calculated by dividing
total debt by the sum of total debt
and total equity. This ratio is a
measurement that management believes
is useful to investors in analyzing
our leverage. Net debt and the net
debt to capitalization ratio are
Non-GAAP measures. Net debt is
calculated by subtracting cash and
cash equivalents from total debt. We
believe these measurements are also
useful to investors since we have
the ability to and may decide to use
a portion of our cash and cash
equivalents to retire or pay down
our debt. Additionally, as described
in footnote 5 above, we have also
presented the total debt to
capitalization and net debt to
capitalization ratios excluding the
cumulative effects of special items
on equity.
June 30, December 31,
2018 2017
---- ----
(in thousands)
Total debt $2,218,540 $2,191,650
Total equity 3,172,284 2,902,949
--------- ---------
Total capitalization $5,390,824 $5,094,599
Total debt $2,218,540 $2,191,650
Total equity excluding special items 3,038,711 2,950,154
--------- ---------
Total capitalization excluding special items $5,257,251 $5,141,804
Total equity $3,172,284 $2,902,949
Special Items (Note 5)
Add: Non-cash LCM inventory adjustment 54,801 300,456
Add: Change in tax receivable agreement liability (276,430) (276,430)
Add: Debt extinguishment costs 25,451 25,451
Less: Recomputed income taxes on special items 42,452 (22,425)
Add: Net tax expense on TCJA related special items 20,153 20,153
------ ------
Net impact of special items to equity (133,573) 47,205
Total equity excluding special items $3,038,711 $2,950,154
========== ==========
Total debt $2,218,540 $2,191,650
Less: Cash and cash equivalents 478,329 573,021
------- -------
Net Debt $1,740,211 $1,618,629
Total debt to capitalization ratio 41 % 43 %
Total debt to capitalization ratio, excluding special items 42 % 43 %
Net debt to capitalization ratio 35 % 36 %
Net debt to capitalization ratio, excluding special items 36 % 35 %
(15) The Logistics segment includes
100% of the income from operations
of the Torrance Valley Pipeline
Company LLC ("TVPC"), as TVPC is
consolidated by PBFX. PBFX records
net income attributable to
noncontrolling interest for the
50% equity interest in TVPC held
by PBF Holding. PBF Holding
(included in the Refining segment)
records equity income in investee
related to its 50% noncontrolling
ownership interest in TVPC. For
the purposes of the consolidated
PBF Energy financial statements,
PBF Holding's equity income in
investee and PBFX's net income
attributable to noncontrolling
interest eliminate in
consolidation.
(16) The Logistics segment includes
100% of the assets of TVPC as TVPC
is consolidated by PBFX. PBFX
records a noncontrolling interest
for the 50% equity interest in
TVPC held by PBF Holding. PBF
Holding (included in the Refining
segment) records an equity
investment in TVPC reflecting its
noncontrolling ownership interest.
For the purposes of the
consolidated PBF Energy financial
statements, PBFX's noncontrolling
interest in TVPC and PBF Holding's
equity investment in TVPC
eliminate in consolidation.
(17) The Company adopted ASU
2017-07 effective January 1, 2018.
The new guidance requires the
bifurcation of net periodic
benefit cost. The service cost
component is presented within
Income from operations, while the
other components are reported
separately outside of operations.
This guidance was applied
retrospectively in the condensed
consolidated statements of
operations.
The following table shows the
effect of the adoption of ASU
2017-07 on our financial
statements (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2018 2017 2018 2017
---- ---- ---- ----
Refining segment income (expense) related to other $371 $(85) $741 $(170)
non-service components of net periodic benefit cost
Corporate operations income (expense) related to non- (94) (16) (186) (32)
service components of net periodic benefit cost
Total income (expense) related to other non-service $277 $(101) $555 $(202)
components of net periodic benefit cost
(18) The Logistics segment
includes capital expenditures
of $58.0 million for the
acquisition of the Knoxville
Terminals by PBFX on April 16,
2018 and $10.1 million for the
acquisition of the Toledo
Terminal by PBFX on April 17,
2017.
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SOURCE PBF Energy Inc.
