PBF Energy (PBF) 14 Feb 192018 Q4 Earnings call transcript

Company Profile

Participants

Colin Murray	Investor Relations
Tom Nimbley	Chief Executive Officer
Matt Lucey	President
Erik Young	Chief Financial Officer
Roger Read	Wells Fargo
Brad Heffern	RBC Capital Markets
Manav Gupta	Credit Suisse
Blake Fernandez	Simmons Energy
Neil Mehta	Goldman Sachs
Paul Sankey	Mizuho
Doug Leggate	Bank of America Merrill Lynch
Prashant Rao	Citigroup
Benny Wong	Morgan Stanley
John Royall	JPMorgan
Paul Cheng	Barclays
Matthew Blair	Tudor, Pickering & Holt
Jason Gabelman	Cowen

Call transcript

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Operator

Good day, everyone. And welcome to the PBF Energy Fourth Quarter and Full Year 2018 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode, and the floor will be opened for your questions following manager’s prepared remarks. [Operator Instructions] Please note, today’s call may be recorded. It is now my pleasure to turn the floor over to Colin Murray of Investor Relations. begin. may you Sir,

Colin Murray

members Good is are welcome Matt Tom Young, release, several President; David. copy team. With today’s on of Lucey, today’s our me Erik earnings other and CFO; today Nimbley, supplemental our our morning you, management to A information and including call. our of available Thank our CEO; website.

contained call, could or discuss to today’s $XXX are actual this charges in the Safe expectations, with the excluding results, differ outlines There contained from a forward-looking in press that Before management’s of or on In we in annual prior to factors that press getting Harbor the our our and predictions attention will or provisions statements started, covered which to by primarily cost Harbor with comprised to laws. intended cause release Securities to are which and direct LCM quarters, non-cash future, approximately expectations our our under describe your I’d express it the Federal Safe release. like the company’s summary, of statements certain $XXX be results of the lower we quarterly market special SEC. item million, filings those respectively, are adjustment. of million including many after-tax Consistent and statement

begin operating will be we measures PBFs we using -- describing financial performance and As will noted results. release, our in non-GAAP of press certain

to please in to press now today’s turn call For will reconciliations measures GAAP Tom supplemental the release. of non-GAAP Nimbley. provided tables appropriate over refer to I figures, the

Tom Nimbley

the reported where results today. quarter thank a were million share. our you well we $X.XX of financial and earnings This everyone, or $XXX another morning, morning joining for Good for diluted quarter, Adjusted and our performance. Colin. solid per assets fourth delivered ran good call the we Thanks,

quarter multi-asset system. geographically a fourth diverse benefit the results refining strong high complexity Our highlight of having

to these Venezuelan that the the not a where business is of and This crude normal to around for seasonal are refineries levels, production high between market Coast The number to distillate lower heavy large had back able mandated The underlying capacity to top were gasoline builds due this and differentials fourth an for by table the paid constraints the taking and the crude and we is an be differentials above complements Canadian of crudes. this issues supply constraints capacity utilization quarter by extraordinarily through currently and containment, crude light heavy Canadian differential the is out experienced both widen one us very margins differentials of narrow the but On East by expected and today. of crude say wider during but market, Any supplied Government, will starting utilization margins since to advantage inventory this, in the cost been from outputs, takeaway maximize solved. yet takeaway to the non-opaque, crude ran cuts, supplied gasoline. high to supply the due the activities. Alberta the oil. market to of refineries with are and opaque, a have and led as part strong time well have sanctions. a Iranian I driven cuts Alberta set have oil Globally During market light narrow in well high are significant I issues constraints narrowed, long Mid-Continent at of quarter digestible maintenance high benefit largely for sustainable. were a quarter,

supply is weak as the history constraints Demand differentials. solved. feedstock good remains by primarily a driven has environment have narrow demonstrated We margin and that will neat get

to planned system across are well to Fundamentals with with at maintenance product industry the hand of other margins forward. distillate and season peak related effectively combined cover support desolate maintenance the and on a at the market of challenging Gasoline as average should believe in disruptions max of breakeven environment, projected series globally a weather going the high with particularly refining levels the with five-year and utilization. down moment. for strong the a is globally We markets, are gasoline is March are global global improve will levels demand continuing days tracking economics translate mode. inventories below that are refining crack maintenance in anchoring lower this We into

part seasonal. impact gasoline have frequently in on markets. about While unusual situation prices a this large a it in may believe demand. movement is also to have beginning in will year itself. the of weakness We the conversations as positive of this past correct the gasoline should Lower seem We seem the

switch decrease The supply as supplied. the some of will see which the butane help this enter further in On gasoline side being we as activity, regard gasoline we of amount decreases. also blending should spring, increased great to amount the maintenance will

watch our crude and accordingly. forward product operations to oil going both continue will We markets the and adjust

plans the the sulfur and desolate as the We half continues environment beyond, will to there towards put encouraged still increased XXXX the complexity for fuel we for high XXXX refining diesel the best by move fuels high pull differentials the of marine Looking year beyond. moment, of cleaner latter are markets with be higher is that upcoming as that standards see a In we a in as the are and making for changes and position in the believe IMO result some discuss will we to an our ship see in and possible toward growing Matt on forward will system feedstocks our order XXXX. demand closing, economy IMO.

executing our By this operator. profitable being to go in results running to a as will a and environmentally Erik to strategy financial call well in them employees our is environment by put always benefit. turn be assets Our reliable our succeed and position to will the will shareholders for the strategy, assets over and now over quarter. our responsible this and I safe,

Erik Young

Tom. Thanks,

fourth quarter previously year. earnings to and discrete share which XX.X%, $X.X year, impacted state mentioned, for comparable for tax effective estimates million and EBITDA by quarter the rates items. PBF per the As billion $X.XX per was full for certain and $X.XX share approximately consensus was approximately fourth of quarter PBF’s reported $XXX rate the was tax

the price XX%. please $XX expenses For million, to was of the in year rent Included million million including approximately which tax incurred an expect $XXX PBF Logistics Consolidated range. year million full the for Coast continue expense total rate results CapEx our and which a the modeling current rent purposes $XXX $XXX million. At in $XX in million full quarter acquisition of of corporate was use by $XXX million quarter fourth resulted in refining to effective XXXX includes of we the terminals. for CapEx approximately $XXX East

ending million our was liquidity quarter PBF Our cap cash billion with year-end at Logistics. was net $X.X PBF more XX%. $XXX consolidated and billion, $X.X $XXX approximately debt balance The at Energy and million to approximately than was

outstanding $XXX Importantly, facility. we XXX% or ABL our credit repaid million balance of the on one

a quarterly are announce Board has of dividend share. to pleased We our approved per $.XX that

units. companies to of GP Energy for growth. the PBF this PBF an while in it that This later to commitment are to IDR’s the Finally, exchange announce for earnings I reached partnership, PBF alignment LP, and strengthens Energy companies pleased between the Logistics. important million cost the agreement structure PBFX Logistics the call to is ex-common XX for transaction the the improves and by currently eliminate and transaction both positioning PBF we an because PBF simplifies This the you at capital listen encourage to morning. demonstrates our the held

over the to Matt. turn will I Now call

Matt Lucey

market well Despite with declining a our throughput over Thank total quarter, over ran day. XXX you, barrels the Erik. averaging per assets

our Tom to we in system As market. will mentioned, response adjust the

delivered outside We control. Mid-Con the In and systems variables strong results. other our barrels from intently of control. to product operations advance remain our weaker Coast focused East benefit margins of business and adjusted and that can we we aspects areas, account for other Our on very

reducing In in our But There expenses some quarter were across efforts the committed with the line as costs ongoing in We well reduced are throughput guidance spikes are this for release The turnaround seasonal rates our market operating press Torrance. costs to during and overall particularly gas lowered current the to run natural first guidance. quarter. in as morning the maintenance annual we reflective our energy were activities. of system. in both

the have previously timeframe we The strategically part Additionally, XXXX, for XXXX the not Delaware and and second coker we by end turnarounds accelerate approximately the By our by originally occur quarter turnaround and unit turnaround to of will Paulsboro. in in a at the XXXX now elected in of order now of third XX% the turnarounds for will March will turnaround Paulsboro Delaware QX. the to to crude end occur position of City the City moving planned complete company April of QX XX% the work the later forward, quarter. announced

on the that located It City. instrumentation associated are repairs also to unit to week. service. not In pre-flash refineries important we been is was piping incident during crude Del conducting returned damaged a and in addition was note tower work with turnaround Equipment an damaged has last

flexibility As improve previously assets forward. invest system strategic our disclosed, to PBF to going of continuing the Energy is its

hydrogen Chalmette day refinery idled Del at installation and We City. restart projects on plant of a XX,XXX coker are the are the progressing schedule. of with new the a at Both barrels

remarks, by that We continue in see PBF. refining quarter to of late and in will our the we the operated benefit first being we service plant driving to our so new Operator built be in next the will tailwinds refineries be Linde and year. and quarter be service hydrogen from concludes sector expect fourth We the will that will happy and plan put coker is position be in to that in owned which

Operator

from with your comes go And Roger first Instructions] Wells ahead. Please question Fargo. [Operator Read

Your line is open.

Roger Read

morning. Good Hey.

Tom Nimbley

morning. Good

Erik Young

morning. Good

Roger Read

of on just dig just I as get is supply little could other if maybe always and was you some of it guess maybe on little alone, deeper some are side on and think let’s say terms how is in about it I on of much should in of things a think gasoline that in you your either the could you occur system it the gasoline. expect idea are everybody guidance to mean, than changes in some I the seeing seasonally, wondering February that nervous what easier the us markets that give make demand numbers better, thinking I you May? bit an agrees put Tom, or want.

Matt Lucey

great his prepared me really yeah, Tom and little let a a question dive this but remarks, Well, eluded deeper. in

is trend, yesterday almost number a combination one the utilization at of look does the you if data, of no X% at look about That you things. dropped refining If week-over-week, number makes EIA XX.X% mistake and week data, but a it. make things of not combination It’s utilization. of a DOE a

vortex Delaware a in not in took running that. and about cuts, related because result some cuts and things units had there not doing the weather some incident are did and As poor Northeast, at were outages economic still was of refineries crack just the as those to frankly, -- the run talk units and CAT we the unplanned full. that even there in When a which of sense. in of severe gas event. you and we fortunate to because quarter, ones only particularly we actually the alluded But City, running run I the not our PBF damage CAT as makes were had in economic add have were significant that common conditions It the addition, extreme struggling accelerated polar turnarounds the Midwest Midwest the that we the our weather and

don’t economics don’t have You right really -- good now. coking you

to and why unit So going the problem we are the fix Matt are and we ability are the up that moving we your because a crude as are that’s our in also coker also up mentioned we is turnarounds doing crude loops. in unit, move Paulsboro, little produce that unit, the impacting what doing not to Delaware crude bigger but

play margin us So for as it’s well.

entering heavy are turnaround We season. this

be crack indeed transition. incentive gasoline. is They We and see believe will continued the yield throughout that already split come of to to out of shift for projections gasoline. case. the is with the the interesting Butane continue this you product a it if have happens coming the year IMO, trend made that out what have will We if and

$X and We a are PADD X, the comment about make The Morristown, and data be transition X final the a but sequentially was a was built below pushback. and then buy a gasoline. California. will result may of interesting gallon. the as back, come for in rest process XXX,XXX main PADD a and build I frankly that drew that me to yesterday. PADD Coast I for of And I was shipping impacted in gallon prices of large It in difficulties corner. behind will out. come are of when of course making in gasoline that a the that bounce New X United fog-related believe tell, and of Time Gulf country to and see we some Jersey but we in the you material it turning actually gasoline are $X.XX going the the The of process elasticity, the portion the States, can country will think demand by in that a there

Roger Read

Can the versus come here by the think flow, have managing can lot How an be bit of QX Erik, here. had you full through. Coast. had I confirm the may Gulf of of us change idea cash cash year? little down on a half CapEx about a direction fog number I And flows give Great. Thanks. big in a the you maybe in the Change we guess year turnarounds? first accelerating

Erik Young

it’s saw during was of think going first similar going lot I work be loaded very the be XXXX, a of frontend to we trajectory where honestly to probably the Quite to half year. the our in

hydrogen as have CapEx our between at here year. the So our during as one quarters Chalmette where cash we should priorities management top City. the always ultimately three close turnarounds, of half coker and Ultimately strategic and is we plant Delaware the some as first maintenance, probably see to projects said well the and of of this spent

Roger Read

you. Thank Great.

Operator

with comes Please from Heffern Capital go next RBC Markets. Our question ahead. Brad

Your is line open.

Brad Heffern

Good Hey. morning, everyone.

Tom Nimbley

Good morning.

Brad Heffern

also of and you in your just getting to finding so Tom opening Can in just is the from will crude heavy dig short-term sourcing remarks, the and talk about being little tight. just you you more there difficulty the a mediums sort on? and I ask Where so around medium-term, on how barrels? them looks

Tom Nimbley

have We deal that’s breathing, well Venezuela right been moving with able obviously since target now. -- let’s living,

are We will we doing get third other parties, but continue be basically to not to some ability. have about successful source in that. to cargoes We crudes can worried been able and Venezuelan

course, crudes are narrow. So tightened the it’s not is the that crudes, the those problem, up problem the it’s and not of spreads have getting

basically of So as others lights. our swing system XX% we have to the ability probably to

the have that’s argument there made simply are North crude in we a end who able the of a too going on day, there’s a from they are now and are here we crudes, an perfectly some of going to that. we due as are good work to four even and out back that At unintended cutting things do will the The time. some is back Alberta we and going all be I’d with significantly believe Russians, played think problem. cuts. don’t is Brent by and Government is make move but then just have no And consequences and out a may sustain idea. the don’t about time do of seeing going do as Production this and question their comment of and years. that to shell other to ultimately that think it take which I perhaps through But oil law right a again was this. see to of rebuild there WTI. and America make be companies not cuts to mandated growth a the right people an $XX We crude at the marketplace. on, paid be now actually Canada to now, to chatter industry, Iranian to medium $XX who and years this much move can promise have from sanctions, if we indications going to you right as to fact the least projections going there’s may that to going the by that Saudis, a it’s know, here. cutting and are some companies ahead force have Coast, had months, of lot time take last I sustained thing, that produce recently starting The to event. WCS I E&P The obviously you there’s have that or work United of the the ill-advised of and in you the a the think the East crude pipeline Venezuelan But get has a crude this exacerbated those that’s are XX all There no exacerbating this a below lot situation surplus met have is rail company moved There’s now though economically argument, Gulf appears heavier only there’s but some year, well time. quicker. will lot of us We for the was perhaps economics crude money to refining it reserves. longer unwind that next States, or some to to direction Coast, because West well as the have crude we told take either three lot and I and versus I there’s undone and on be the for going There’s here of it to be when some Coast you a and it’s you people it couldn’t ability go in Venezuelan

second come. believe going and So am coming of half IMO I And longer it’s the certainly, with to bullish. year the I in term, do

stream $X.X barrel disappears to with again going and going million to be stranded some are feedstocks associated see We there’s that that. a

of are but well could next tale of good is like couple mine, you bet be it as it So two months, little as last year halves. bit a was

Brad Heffern

Okay. Ace Can you talk answer. Thanks PBFX pipeline Matt, for about potential in. for, the maybe guess benefits the that on is participating I Chalmette? the detailed for

Matt Lucey

Harvest. else on but with interesting the XX not refineries Phillip have captive open of own, at announced for obviously of benefit season the of sponsors We is project. partners and project, you only an its Yes. the our everyone we part are It

economic James. be crudes it to we is can line St. it projects project up bring a good is much in year project with we will than projects. Chalmette what on. ago other that think say think there’s and the too believe a will on PBFX it opens it I pipeline So is one shipper a We not about -- been more many the advanced PBFX Chalmette is and they organic announced in developing for in of working This and

Brad Heffern

Okay. Thanks all.

Operator

go Please comes Gupta question next Suisse. with Our from ahead. Manav Credit

Your line open. is

Manav Gupta

this from which Hi, you railcars Erik. you early Can Canada? on are was runs line actually crude comment on expensed, by your back return rail of item cutting

Erik Young

back we make early close with cars cars sure reusing of that you didn’t anymore. we ultimately return of all that in latest expense $XX use QX, greatest had associated go some to simply terms probably to idled that hit if and to that sense Ultimately fleet rationalizing and the million make experience railcars to the at

back previous out crude term, the simply that just ultimately to will refinery mentioned as question I via Coast. what that echo the longer viable for by by crude probably of think we Canada. see are rail think, But is seen economics we we on will heavy better of Tom what decline more some long-term that to water-borne ultimately a by think in part first absolutely crude strategy the have response through a driven a I East rail quarter, in shift for is we economics I

Manav Gupta

And a quick headwind working the was quarter? fourth capital what follow-up, in the

Erik Young

quarter. probably overall million, fourth $XXX We about nominally working of used during capital the

Manav Gupta

guys. you, Thank taking my questions. Thanks for

Operator

ahead. Blake comes Please Simmons question next with Our from Energy. go Fernandez

is open. line Your

Blake Fernandez

morning. Good guys. Hey,

Tom Nimbley

Good morning.

Blake Fernandez

CapEx, just be about to two I first said so back in or thirds know half. you going the on three Erik, spend maybe quarters

if which around land $XXX on right if that for think kind could of I some full did million. had ranges, spending narrow if know kind of you number I gone $XXX through our or you year million this year? that’s for just general we a math maybe confirm good previous didn’t call, would help to

Erik Young

order for Blake. absolutely -- we Those still are year. high $XXX Turnarounds say levels Those million magnitude. are of numbers, just are good about would the is what

Matt bulk to million Then And the then the regulatory spend, and it maintenance we to of I when be hydrogen coker quarter the CapEx going have up another plant during we to obviously related we be million strategic on million maintenance the think environmental of runway XXXX. discretionary of through going and general fourth XXXX got $XXX That’s are ultimately got related that year. have terms expected commented projects, downtime that by going That’s CapEx just call course first a half about the running of are and the the the of we to year. a overall outlay between have and $XXX first probably expense. to of and quarter combination through $XXX the maintenance. be it during call The coker is of the plant. in ultimately of longer spend of hydrogen

and the of spread million is the call quarters of the probably CapEx over, XX% of to $XXX be to call $XXX the million maintenance, between during ultimately that turnaround remaining So is the remainder half. it, it year, first a going the three in through but outlay going half that and bulk be

Blake Fernandez

Thank Perfect. you much. so

Erik Young

a ultimately, the that to here year. understand think clean we forward key turnarounds maintenance as be half bring very made There cash, will the of we that back the towards look the use accelerate of will I these is of but have runway few a decisions yes. message ultimately ultimately we

Blake Fernandez

Understood.

self any might of anything the just as kind general simplification, a comments eminent If you minute IDR drop positive should be may down funding I quick offer? this be spend viewed but step, you think could maybe just on is this anything, there potential a dose just change

Erik Young

transaction our they PBF Energy will PBF is Logistics for that parties. both think both a and this for ultimately is work I view

form shown was partnership is comes we clearly associated here organic acquisitions on something with We through the investment out pushing in have significant support This related and sponsor the third-party but our projects of community the have are in growth dropdowns that that focus pretty PBF real was still at for. that ultimately there, Logistics.

We are all supportive Logistics. a for equity PBF of at and of very cost lower

have We said should and ultimately in should to tandem always of be energy structure that plan logistics ultimately that would the streamlining grow. work the the and help both companies continue

guidance have clearly and of not significant terms We what’s MLP coming There’s provided drops in in anything terms or stress next else. equity strain the been of in market.

starting was significant movements earlier that new there, year. we is there obviously Although, to fund this a are see raised pretty

have We a partner the years. of successful self strategic of in been and part brought over Tortoise during XXXX. funding We past the equity middle essentially couple in

still So that firmly strategy. ultimately regular of and just our It from both accretive capital. this come we is what these view old form to projects, than different will MLP of discrete in XXXX long-term access to transactions is It’s a equity have seen be believe timeline. terms the companies may XXXX, a we for way viable fundraising grow that’s there the way for in slightly a

Blake Fernandez

That’s Thank great. guys. you,

Operator

next take go will with Please question our Mehta from Sachs. We ahead. Neil Goldman

open. is line Your

Neil Mehta

taking you very Thank the guys. much. Appreciate question Hey. you

that do levels there or from how forward capital is that a I ask more curve, the PBF is do tactical need the you gap, in the generating incremental down are to there my at we you So trying incremental cash a spending nature. exceed the and first are do the cash equity. questions I I you flow is operations little see is about balances guess work dividend. the reason for funding And bit think out one of a figure debt if risk issuance, just guess

guys effectively really issuance. the time last equity You

the wanted is just see willing again tap be market any if there I you funding would whether thoughts equity gap? on if a to to So

Tom Nimbley

raises. inventory potential confident any we $XXX be today have comments is think we facility going the that time, exactly in related coming -- equity to quite a to and honestly, store don’t are we ABL. then of As or if of Therefore, we think are I then I will of and around on will very as ramp course We of some we ABL as it million out to out run we are to sit we feel we terms here crude crude for just up Neil, during if coming the have is. strategic do with credit turnaround some runs, period turnarounds opportunities building what we want repaid That that.

fun consistent over Ultimately, current in we at is our point couple of curve, what with much As the here peers in provided this unsustainable, heard time. forward color the from ultimately think the things market think very Tom, we past and weeks. with will this while is sit we on but the a not lot it’s that distress gasoline the and near-term rebound I

we yeah, ultimately, with second feel the some burn probably cash have we potentially first so, the into very And good quarter. liquidity that But the throughout will today. we and quarter position

any needing fundraising So at don’t of anything related PBF. fund type anticipate to to equity

Neil Mehta

from strategy, your on PBFX, very approach this a of you MLP anything capital at are if up the morning you saying are follow-up markets at just that now get EBITDA to perspective. what PBF monetize the the logistics here? is the credit drop down right How level, a that, your to some different with is feels when for taken then given of and challenges And helpful. into have eligible leaning peers core and do assets markets that since in sit look the best part That’s the that best guys you we way sits Okay. the it midstream you business and MLPs like

Tom Nimbley

Yeah.

one refining the what strike we I very, the going market leaning certainly assets prevailing you capital balance. is. a taking investment think to is by a very as cost all internally buggy for then MLP and we assets markets and there so MLP, But things that if about. market is down that are between for we hard being sort on works, interested of the MLP certainly equity. here into When with open, both. work function the the can vapor crossover and dropping right is it quite in the perfect other IDR’s the it’s we work our provide midstream the the it and Clearly, all way is depends not that say, trend a have aren’t classes business, different you and differential and investors open bit assets PBF within own of talked a we of have a If a left because there’s you think clearly that sidecar simply back working

markets to which thermal are put So there. believe from projections we we the comfortable drop-down and That’s extent inventory assets, to We firmly quarter, as drop-down with the the open. Lindsay out the all working growth and that assets have you saw projects from can we business are of in not grow a we fourth a only large quite different also but the have are we brought on the Goldberg.

the time on will is growth and there willing ready, open require going and able. markets to tell be It’s our strategy So to that. only and

Neil Mehta

Perfect. Thank you, guys.

Operator

from question next ahead. go take with Sankey will We Mizuho. Please Paul our

open. Your line is

Paul Sankey

all. morning, Good

bit seems the accident, like more it that understanding injury? the the happened what wasn’t you. bad, that initial wasn’t pretty Thank could On a talk bad, you headlines just it there about read with

Tom Nimbley

always this first-hand a believe good from things inside to thing, comments, incident Paul. an to don’t fire because is have we will things my career this. the who We hear one make But absolutely of firefighters case emergency laypeople and say just still I and had in the underway responded, when a we you investigation have give mutual tremendous an have there. pretty learned I I the couple of a thanks can, like have as you responders, the

area, I Again, the We seven are after was was at we really effectively the mentioned, water they able done. that responders phone that instrumentation in wasn’t and it are happened, that able we that situation. occurred, to occurred. fire because now as in much emergency honing were what days but think just burning the how damage and of handled to we unit back exactly equipment there on that a to the fair But was amount because up well not testimony get that quite it to area were and get fire

Paul Sankey

It’s given you guess heavy shortage comments planning to will planning recover of you. down it seems your mentioned say From because you far due Canadian we of view, But as in that sort sight in like timings essentially looks crudes can with it timeframe, now crude. respond and I may and what to to you come will of view outlook anytime current thank the as course it’s soon. Tom, the difficult to recover expect on oil lower structurally isn’t to logically. course? Saudis and back $XX of have the of an production you stepped level going suggested seems a due of Thanks. Are a a Sure. as eventually it how how Venezuela point about are tough to re-widening the right like extremely environment thinking

Tom Nimbley

railing north narrowing in company who that, large terms expect in they not work, curtailment you I do re-widening have Certainly very path believe the one spread, of will and had a again railing it but areas, course. simply that due barrel this a work did of mean, Canada that the seen indicated will crude of of lead was do We zero. course XXX,XXX the may we

perhaps when becomes limited of a So transportation problem. your that more

[inaudible] some Canadian are is the I and So we we of believe starting that to hit but to think is differentials already up, widen me circular. then the see this you

it the up, this growth think get the with getting have we their non-OPEC plenty OPEC, come got of crude of solve that if to ultimately will going in and could but situation their get back problem then situation face in Iraqis, crudes, and a but there’s the it crude, play crude a and favor, what take before. Permian to diminished. there’s I Saudis, of a will says too crude We to lot end in maybe market is effectively, then the had frankly, of movie up. they us the that Iraq cut and price balance it gets is time price to Venezuelan At this might market, medium be of open will back they function our crude share go seen there, the the actually light more out certainly I low, The to is what going little out bit and I said. day heavy go Iranian the behind plenty high. and

Erik Young

will sours, also some starts late to crude, complex so running low system that have refining the heavy impact itself. and and prices U.S. on Paul affects just pushes low prices and as back,

Paul Sankey

much sanctions? Yeah. True. Tom are it like you just Iranian pretty And seems expecting

Tom Nimbley

aggressive. Well is the I out. very Certainly it wouldn’t rule administration

Washington the of to a going not continue is things. not to to try I D.C. But So in and Washington be high he some probability these do am I is that in D.C. fact there’s

Paul Sankey

Okay.

Tom Nimbley

got have just Clean, don’t the that said oil, can tight of not have when you good When lighten enough, this at want you so and pushing oil we higher will six what is simply have breakeven to economics. and have, amplify what crudes you over York and you you gasoline, try it have diesel that diesel heavy, a fix back crude all differential. we and mostly to start Brent up will spread the to people differentials so arbitrating know to I extent $XX coking this, dirty it X% happens, you time. crack, wide itself will type those six then $XX in Matt New than call medium price

Paul Sankey

forward Look Thanks. April. all Great. in you seeing Thank in you. Napa to

Tom Nimbley

Indeed.

Operator

of our America Bank take Doug next We Lynch. question Merrill Please from go will ahead. with Leggate

Your line is open.

Doug Leggate

could guys your Tom. Hi. more IMO I I conference seeing refinery you Good I our high Thank everybody. a well Tom really forward am looking few weeks. wonder I as and get to on will thoughts just updated it’s if you. in morning, And plug of of anticipating that’s through, role with it will sour the everything crude. weakness that otherwise so, was level, the I or when timing one on the because does given of it year next say seems coincides going heavy which with on it timing kind oil,

So a on question any updated perspective please and Thanks. I got gasoline? have

Tom Nimbley

Yeah.

view the predictably lot side the of compliant for about think, was concerns fuel. I our supply a on the is IMO

is I an not come be that going have to We issue. to down have down or state come

add a -- that is demand low X.X XXX and diesel fuel. X.X a a going that that meets picky low that million it by be refinery. frankly you are gasoline X.X But barrels gasoline everybody compliant that frankly, number cracker say a going new unit. And of oil sulphur you diesel that’s and this or pressure, in into was you sulphur goes of about our day, to a of margin, out million refineries, and Hydro gas barrels cat already ultra can gasoline situation under just a could treated before lot the supplied a if in but day assume next Now talk to take out the reason It’s remained below sulphur, we of the to be be fuel. the I because it along it ultra take many may cat just

significant think obviously Personally interested a and do fuel with structure. medium the I capacity this international might industry. will for am you away. mostly plays to to run that to the industry fuel crudes higher am The the bunker sweet how it, in and price a is ready world light on of the is distillation waiting or medium where market or with going that amount there and be in market that, that they crude So parts what it ability more in I sour is. margin whatever that There’s be is doing of go to that supply see I going other crudes capacity into out the is impact and industry and

out to of a the X home. where’s to barrels becomes continue to you got crudes the going figure where stuff go that if So you that million run they are

tell enough will so the of it go there’s lighten as Can probably being close talked these capability, can put than you to conversion light to up? on much in you about. it can and try generation into it get you darn the are system. does is as United oil not I being to that You States crude sweeten until up investments margin able some coking power asphalt, process

to be fact So our is going and going is for the and that’s basically companies place. who kit that IMO it’s that high we bought a first view very in refineries like good in to the complexity why PBF is come run

Doug Leggate

am gasoline perspective a the talking I kind not, trying if the one micro good to gasoline highest its all appreciate given now whether we cycle I weak repeating am answer. a currently have that referring of of don’t gasoline when bit or trying slate to with to history a seasonal weakness surely do the world. going and and the to it afraid in you is fact little structural am is storms get how and issue some running about you in you that in with are also that or the aside with up just just obviously structure I view of windfalls that? on very U.S. changes API your spend imbibed more get also out What I just there than head I our time it we you second my winter. a us, seems behind simplistic end get to long very storm is am the the is the as days or happens around think next. this what strength remember Do old I agree figure see to much

Tom Nimbley

No.

certainly to production to operational or get is I increased say think, produced that, able I did shale increased And I absorb bit -- little in pretty are that. as certainly absent gravity running additional on the capacity problems. the it’s all the the close and coming cuts in with the agree it I before a that, of U.S. much into suspect being I than inputs think that to more worldwide worldwide you of the -- start being crude that will of you has you going U.S.

continue. that I will see seasonality think will -- you

You effects. also on have some knock

you forward octane is One have frankly, lower is those things in a time stream we yield. than shallow of some gasoline benefit good is spreads of line. cut the and there into crude harbor pretty as normal, of it’s the the straight will of about same got the more move Therefore component octane that probably oil higher summer. that At

Doug Leggate

like You guys Tom. we that responding and are

So thanks.

see We will March. you in

Operator

ahead. Please from We question will Rao Prashant take next with our Citigroup. go

open. is line Your

Prashant Rao

we set a like to look of we coming that Marine expect contract fields. out if What Coast and the of opportunity what the morning. more size of taking to certainly for XX% of is it our And of the getting months greater the question. the to I for standardization XXXX few providing about thanks IMO their does closer compliant should East for opportunity wanted Thanks. preparations fields and see providing then blend? feel fields does towards There little your next fuel pipeline the it for some East Merck’s needs of XXXX we news am and certainly about storage Good the I on are and I implementation. with these how on those it think in wondering are recent close putting specifically fuel deals in in those new Marine and IMO Coast. ask of some was we of progress pipeline then can comment get and that a a with say terms

Matt Lucey

I deal MLP. PBFX, heated PBF of to create in able reason assets It So for millions but transaction on roles its a to think assets East came where we out storage as barrels It worked assets. being bought storage. Merck’s be bought result sort And have is announcement this that Crown PBFX dirty of that refer morning of them did. direct a East assets of old and you good course a big going our for that with the Coast refining total those Coast as that’s this term of processing to is a business the is synergies announcement. with the we why the sure is PBFX the are we we Point IMO for

opportunities And so be are many. we believe going the to

to and I some be that kit very We perverse been of or running marketplace, today of we are a are by the counterparties with time. because do are differentials out -- there staring the quite that of what could companies complexity simple that a coking challenging the don’t of capacity more making but in have the the money think frankly reached down barrel have are number are that that

deal excited on -- of I working for Point we we it enhances a just think acquisition so and The about positioned the is Merck’s certainly and them years. returns the So number next we with makes transaction are our are the it. think sense well lot Crown and of with over

Tom Nimbley

people move bring going the who that Delaware do sulphur will referred Matt that opportunities the resin be three operation running that to were to, us -- I high crude who it add saying allow and in package just can stranded we potentially we this into large believe stranded heavy barrels stream tankage or Coast We crude to facilities. very Paulsboro. the but with East or there’s quickly have not in obviously, call that’s have Coking and million our of people

Prashant Rao

maybe more thoughts on picture seen the downside might balanced what to may sort for around IA just yesterday the was seen within Okay. Tom, guess of next was got cash some had that products some you market versus if have I loaded I what we what much that have on demand the the adds that be X.X big to million stepping were per get in would, on we those and back numbers would XXXX the remains progress if great? could Thanks a of of of help back repeating is. check incremental I likely haircut come we number, out that be was with macro. on to are and seems wondering out a capacity very that the your question the us barrels be incremental broader there more what projects to that. risks

Tom Nimbley

Yeah.

of there look-ahead, many reading say put ‘XX, and growth million less $X.X I that, we none that’s of what in expect just a people think that some have going be not, that’s you of that’s overstated. I there, million who X.X% others am to information balanced a, recession high at When -- situation. hiring north almost look to that’s is numbers out same least read their the that, or I may that X.X than see probably -- say are at the assuming with you I a have frankly, three-year demand no wouldn’t

at going in longer in. the will you because Now it is the to whole see in integrated that’s that the the something when going with to of going are things U.S. model be at industry I factoring and like term that. to Exxon have leave be looking they capacity that Permian,

Prashant Rao

of Thanks, Tom. before I I just over. detail And one very if quick, it sort turn would question Thanks.

but less great a and Jan cycle, questions as that’s up, been thinking jet that IMO the are cracks on I it’s and contraction, years. are demand about given any pronounced you have see will some slowing asked wondering a specifically fuel are thoughts could coming of in though to you options couple pronounced, We X of once of as like some dislocation be few how terms questions on about be or am sort you or in in kit cracks fracking but knock about effect less, industrial the industrials distillates, there necessarily balance thinking you maybe for similar bit on gotten little great. have demands, a down for bit other bit will to the With your seems there we little transportation, last closer XXXX jet run are which more cyclical growth. maturation the of configuration get the hitting slowing IMO going and and how kind get of like would not just a little demand for little definitely sort to you I a closer feel to middle be support bit wider of

Tom Nimbley

component Yeah. low I of very is product poll X high happen bit on it my was a views might great views be really really that. or morphed to very when because million-barrel a question diesel it with or that what are side, assumed It’s said, sulphur going ultra little on a our on a everybody

million its taking take fuel $X.X X gasoline a -- by out could the million and jet a convert mentioned fuel. light that day even barrels, be and it’s of We put jet unveiled cat of think crackers gas products fuel, barrels I oil compliant I earlier.

reality underpinning and some side light is a the jet and will products, think on diesel. all IMO support I give to gasoline product So

we so nice a drag certainly And maybe but are a cycle, we will should IMO be in economically mature where a that see boost.

Prashant Rao

guys. turn Thanks time will Okay. much very it over. I the for

Operator

next our Morgan question Benny take will We ahead. Stanley. from Wong with Please go

Your line is open.

Benny Wong

guys. Yeah. Thanks

as Just industry. the wondering if you as for you give product can your and of exports us outlook well

thoughts wondering much crude that what’s it IMO going flows product of behavior will it Just changing have relates in slightly? early as to or question Mexico? or evolve? how any you is second get And is part Do and affect the even on refinery the of it? to approaches happening as change starts How slows

Matt Lucey

fairly almost are take facility the products that speaks make to out Canada which been made over fourth as a the to So of Toledo developing it Chalmette just at are speak going Coast, to there we couple coast. just we finished starting different aspect project being into products we year in exporting over some exports have of Actually about the on deliver then that weeks. in down and refineries exports, be our in investments of next And able and were optionality where to ago exports we some consistent. did on to is hold some East our opportunities out quarter we the

we dependent is in are Mexico complex big that the case refiners the because it to have se, as not in rest a the base that U.S. the refining U.S. providing world are a fuels company kits. -- per there’s we of have a So most bull level the driver on of exports but

We have access to attractive crude.

We we have have and in the the workers cheap natural best gas world.

market makes combination a our is U.S. it’s with buoyant, good because So products the rest the competing the certainly more of world. and with it

Tom Nimbley

all be and and On the fascinated this by I how cetera, going will feedstock flows might you side trade with am et out. plays to patterns, happen what if

over that, doesn’t of -- distillation have X As I is day a that million capacity complexity have more that and is barrels any coking say significantly this than has low capacity. doesn’t

away somebody stream margins a margin So feed if your model bunker are to filling on on that sulfur coker think filling shift you personally your lose high outlet and I is still you and there, your see from the an or paper, from stranded going from the fuel else’s on perhaps for stream. coker crude opportunity the

are tankage got see So in out, a able with cokers will all but ready be East to to to that the and have just company have ourselves we necessarily to we it the positioning stranded to oil the still not certainly catches be plays have the as we Coast recruit. take how somebody

Benny Wong

thoughts, guys. helpful Thanks. That’s

Operator

will We Gresh next Phil from question take with our Please go ahead. JPMorgan.

open. is line Your

John Royall

Good John Phil. for in morning, Royall This Hey. guys. is filling

Tom Nimbley

Hi.

John Royall

the that to advantage and market would bigger Canada perspective? footprint competitive you on West you consider about think in your know I get have a Coast So about spoken do wanting you and expanding ever Coast, Gulf the refining Eastern but from the how

Tom Nimbley

answer me this way. it let So

if span. out in be model foreign a price attention terms management’s bandwidth look and X of our but to with at little of consider things a we Canada. a will fix has get to operator become of company great PADD issue reasonable asset, We is trying very going and opportunity there PADD obviously, But bit the in in X to was going a one to of anything, is conscience to priority a it the an an

are be have having to the additional to to opportunity, the PADDs. but good grow is on it which to and regarded We depending to those we ask a in bid an going would strategy intend two to it do obviously always So otherwise try strategy, keep asset very as by grow.

John Royall

in California thank Coast an shutting is think it have And like you the one do peers Okay. impact this market? to then what product is FCC, on and your you West going of looks

Tom Nimbley

-- Carson, that between XXXXX that, California there’s Angeles permit condition they was Northwest barrels endeavor, balanced, Los a the but FCC. plants hook now they was allow XX,XXX down already By to them LA try is a so cat get Southern MPC, with the Pacific two two and it’s to large shutdown a the market. plants Tesoro, done up the but a shut to in had that when Tesoro day what’s do -- of when net plants obviously, was takeover from even or those did and to California, a was It’s short undertook acquired make Wilmington, synergistic more the to Yeah. ultimately and that a and supply the Bay gasoline. to permit to that Area movement project

So coming now that’s that going -- supply unit. is more there because have shutdown there’s gets be down to that that

John Royall

Thank you.

Operator

from Paul take with Cheng next We Please will our question Barclays. ahead. go

open. is line Your

Paul Cheng

Good Hi. morning.

Tom Nimbley

morning, Paul. Good

Paul Cheng

the sure evaluation really and to anyway Erik, a have capital any have to on C-Corp. is of that’s which that advantage cost you subsidiary, as I cost and so while small. the that much not from a pretty also funding curious Just and Tom to really that the on of are it standpoint, you quite that am other frankly, PBFX, the cost for or does at when looking PBF really related

Tom Nimbley

Yeah.

fairly IDR morning we conversion the Paul think to strategic I obviously units. a into announcement this related common had

we believers grow MLP shape the but over things to forward as market, the need we some rebound for see need way unfold that in here strategy the next to to because clearly equity reform. we years are obviously how in go We few the in MLPs equity market

of are with for is ultimately extremely where and works. MLPs parties as grow to that Logistics think business, announcement still should companies lower that where math couple a business. a working cost two benefit the We enough run we IDRs we we there be today’s market tend these But of to how refining market reasonable companies PBF couple equity ultimately the feel between both different trade response for and that math a and is us tandem should coming not what we be very agreement continue as where the For think Logistics. going obviously a in two came we need things in as in Refining PBFX vehicle at different have overall to arbitrage out to mention trade to ways and the real the a like to PBF of strategic positive the us is help well between message very sidecar

Matt Lucey

these plains are those the with PBA by deals But itself assets would coal not PBFX be to very to bring assets. acquired and good they storage able for synergies back have going with parent.

So markets they in think a can down and and go we space position, tried as received as well sideways the we to to in been MLP we up, markets opened well have makes and lot certainly degree sense. it of the as markets go the

Paul Cheng

would we to expect comparing indicator, to fourth the why market a reason bit realization particular be case? than any that seems Thomas quarter the may the be stronger margin that

Tom Nimbley

lead we it’s performance clearly out of will of things over on lot combination coming the of to a time continued develop to with decent capital and years has I a of combination think that’s what consistent to amount all past front-end. the of out ultimately think we have just a continue we torrents laid We the spent Paul team two things. those

Matt Lucey

and discussion core and is I well run run the it real seen. think refinery I have the in improvements continue assets says you When optimizations ever make performance and around they to well the the and well

Erik Young

mean add new torrents what is be has asphalt into the done at system the What I been down but market is high that commercial marketing to markets in improved I work mean has refinery and so to getting running activity going I impressive. getting there have numbers. operation the rack that OpEx very

unit Commercial, improvements is business the think Logistics make I continuing unit, itself I to and the strives. So Refining and business mean in

Paul Cheng

share quarter? big marketing you a Is can the torrents how much it contribution the in fourth number? Tom is

Erik Young

you we break just a about. Paul, lot moving I that really don’t we are can out What tell it’s what

Paul Cheng

fourth that crew be about to to captured XQ have will from crew guys what from you share to whether ‘XX so fence question willing defenses? is benefit quarter the ‘XX final said year-to-year A the better billion after-tax. $X.X Exxon the different in I have mean XQ

share to So with to guys if willing whether Exxon that you willing share?

Tom Nimbley

What am was I the sorry. question?

Paul Cheng

you number is received the that quarter? is defense to the downstream given am what from capture that the benefit the ‘XX ‘XX benefit apply after-tax. saying on $X.X to the wider presence crew the much crew Exxon everyone’s defense in as saying I How fourth or the billion the in fourth quarter quarter fourth that crew much

that Exxon that willing saying just hope will don’t to the you share that ultimate be to to share willing I will information be was guys I share most also. want that So

Tom Nimbley

saying I that’s their share to commend for Exxon spitting we willingness today. not but out

Paul Cheng

Okay. Thank you.

Operator

take & Matthew our Tudor, Holt. from Blair We question next go Pickering will ahead. with Please

Your line open. is

Matthew Blair

not do by everyone. your squeezing I here. in this share Thanks Good but rail feel these barrels receiving economic limited as morning, you And are QX for or hedging of QX benefit outlook -- in have might Hey. well any you WCS XXXX, full sure as if there could am in XXXX. volumes fixed-price missed crude upside? are I QX your contracts you the for the that or me like

Tom Nimbley

of by day the quarter we we the in Basically think That fourth the captured of year our distortions benefits a to the in and in have quarter. XX,XXX wasn’t north fourth ran true quarter. marketplace barrels rail I in all the by whole large the the fourth but through from necessarily

probably the day we the based coming in versus expect up April probably in in have then in barrels lag quarter. spread the first we would January others off, I be XX,XXX that as around the now As we ramping lot month think around and is out widening Based seeing going but on to we a system. spreads the XX,XXX of what to now March that somewhere big with move the Right of we believe by the somewhere say there have what bottom out day we timeframe the $X.XX and are on numbers into to now are second Erik think we a is barrels said move quarter rail we said. continued

Matt Lucey

be will Tom and goes itself being attractive. responded become able that did crews decidedly differentials did the the of on and out that fixing that absolutely we we as all evidence We crew to and most the market and as from we markets we to the an and responded Yeah. more the value cheapest then shifting we economic being said the that we will to expensive world ramp-up bottomed with believe is so

Matthew Blair

up good. look your Sounds about looks ethanol year year-over-year $X.XX turning $X.XX And about ethanol date RINs then guidance at for like cents. Thanks. averaged RIN XXXX in RINs is guidance to to approximately XX% XXXX. I If

However, up biodiesel year-to-date. RINs are

you really the over do does with what’s about RIN year could year So driving talk it expense just biodiesel side? your in the have to increase

Erik Young

have kind we as progresses there. an there’s over where have on conservatism in think related booked few months. an to traded of a what something is frankly past continue as the quite the we year as seen probably thus element things market ultimately to But have well side conservatism will of but There some will there’s of element both far the update in and there probably we based rents as the biodiesel that bio well, I just that’s the we go, built amount certain ethanol, in obviously for component

Matt Lucey

what entering what the number they don’t secretary are be be will the know to RINs get will acting going we kabuki by to centers. confirmed for feeder try is although I is this

week, a country. core powerful so from from in received their snapshot the past wind no this big base concerns market think and can the the reasonable bunch and a senators They doubt a of whole why the wind they absolutely over only He of again the this government done consumer, check five is impact and be will job voicing manufacturing a the but I have the and in the letter it’s high prices hearing recognize to just damage manufacturing it’s continue. he actually that not RIN affects consequences. But unintended certainly that am I expect of with I we prices administration comfortable -- refining side keeping can side. lobby

Matthew Blair

Thank you.

Operator

next Please Cowen. our Jason take go will question We from Gabelman with ahead.

is line Your open.

Jason Gabelman

Yeah. guys. Hey, taking for Thanks question. my

Coast and out PBFX Thanks. there. of this you it doesn’t mask was much on acquisition Firstly, I target, How target today. seem growth It embedded or EBITDA like you deal have growth is that target? of know is organic it was this East EBITDA $XXX announced that realized last part that just in organic year

Matt Lucey

this want it. invest away invest We the projects. part export That’s I on And No. to continue money accounting giving mentioned last money year facility. amount fair a of million. year forensic we on I Toledo $XXX from shy and of

million the have to regards of that think run the an acquired those economics investments. that we project. the result by EBITDA we incremental to not of as is would facility. $XX as will [inaudible] In I this rate year characterize a organic absolutely It we I when shared

said been business. that’s plans time is for the we it identified is in I the upside. But definitively some and the so like to time incremental the the market’s first So that of learning this and upside as it

Jason Gabelman

And in to gas follow still expecting are understand IMO your that of I oil to be expecting the for were what Thanks. expectations are back some you just potentially if that to oil you PBF, blending? same on into Thanks. Great. but issues sanity fuel All or to XXXX, of And six I sure you you the the magnitude to tests that not want blending some if a that industry with IMO just the pool. quick chatter comments check ago? eight positive expect question from running There’s marine magnitude about the guys could XXXX benefit on that go vacuum are or gas XXXX, be kind your been just blending. right. say vacuum I am months there

Matt Lucey

that whole attractive. push that And then frankly, that’s you the the think I key service there streams. feedstock out that figuring to wind spreads side will are it they of in are with into very up to piece don’t coke penetration sector be the and do going going with are is I which the what people if you changed indeed Second $XX, certainly and margin these this side, and dirty power anything be dollar the on going $XX see economics comment you stranded $XX, or clean on outlook can’t will to

BTU’s leave made They trying side, to source through blending different turn on standpoint higher that, compliant the going I self of world. and variety after hydro will one because we got what comment density than Shell blending diesel, gas fuel fuels. every treaty in a those the that -- are that you a the and from other ability to of are formulations oils on it. working to with to do do one BP’s think a a obviously lot can I of gas actively assure it’s it’s and oil be has companies the Exxon, to the and

wait see. going we are and to So

a that and I short- world of this longer feedstocks and availability be crude this with problem not We initial will be say, the suspect would the figure are sour out do. though for I than heavy industry been same are you was the pop product the originally we that how of forecast guess EPA problem will product of on solved in on we they find the stranded fuel still X.X% the sweet around have. what we the will any that get in and mid-term not recognize our that side formulations sulfur on zones to that differentials. and as less that. and that longer suspect will But of I might solve burning there’s issues crude may be the what side all will doing implications own out with be I it to a real an

Operator

for to closing now Tom back Nimbley will call remarks. turn I the

Tom Nimbley

look everybody to you call. next for you We forward today. our joining in quarterly us Thank talking to

Operator

anytime. This does disconnect Thank program. for you your may at conclude you participation today’s and

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