PBF Energy (PBF) 1 May 192019 Q1 Earnings call transcript

Company Profile

Participants

Colin Murray	Investor Relations
Thomas Nimbley	Chief Executive Officer
Matthew Lucey	President
Erik Young	Chief Financial Officer
Thomas O'Connor	Senior Vice President, Commercial
Roger Read	Wells Fargo Securities
Manav Gupta	Credit Suisse
Blake Fernandez	Simmons Energy
Justin Jenkins	Raymond James & Associates, Inc.
Brad Heffern	RBC Capital Markets
Philip Gresh	JP Morgan Chase & Co,
Benny Wong	Morgan Stanley & Co. LLC.
Clay Augumini	Bank of America Merrill Lynch
Prashant Rao	Citigroup
Paul Sankey	Mizuho Securities USA Inc
Matthew Blair	Tudor, Pickering, Holt & Co. Securities, Inc.
Jason Gabelman	Cowen and Company
Neil Mehta	Goldman Sachs

Call transcript

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Operator

Good day, everyone, and welcome to the PBF Energy First Quarter 2019 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode. And the floor will be open for your questions, following managements prepared remarks. It is now my pleasure to turn the floor over to Colin Murray of Investor Relations. Sir, you may begin.

Colin Murray

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

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

As describing certain release, PBF's noted in results. we while our using non-GAAP operating financial measures press will be performance and

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

Thomas Nimbley

our today. everyone, Good morning, joining Colin. and call thank for you Thanks,

gasoline, majority maintenance the our of weak beginning and shift terms not quarter. PBF for intentional challenging the second conditions, the the quarter the product but narrow activities of in the efforts the differentials results first to quarter of crude major reflect and Energy of also XXXX into only Our first margins, particularly market

work in opportunity the throughput most expenditures. the maintenance more five a during margins conduct reduced about significant negative to returns. Four quarter, conditions. as challenging times an we and The with with market to which As out at our gasoline refiners, recognize refineries, merchant or increased do flat were turnarounds period our

a XXXX our the believe position strategically to put refining by maintenance our system However, of activity the first of the in operate entire quarter, have actions being remainder favorable moving into for our unimpeded the of able we year. majority

production the Turning others. It widen some backing below X OPEC XXXX, million five-year running and dip] average. people keep we externally area money. gasoline colleagues heavy would PBF into our market making of rough by feedstocks system industry and heavy way result driven if differential in as gasoline is the adjust not our year to the do a will differential challenge alternatives. we continue any oil XX and last when and a crudes. roughly Refiners largely correct. gasoline the I refiners of will other the and first at increases rates there upstream i.e. that in in below [audio the XX% long-term. not refining that of as sour constraints, utilization purchase take measures not supply driven and believe industry remains high which narrow heavy week, is colleagues, the taken of others within markets several to the be to out are light from being right. The blindly wash inventories see We saying slate, would had One will a light market. and note the that last correct. important Similar some is another do quarter The cases out the barrels market. will million could my did crude supply well-supplied inputs start a markets a and longer of nothing that to were barrels in light and comments is made but believe have gasoline even eventual correcting not will crude heavy environment It this to to lighten plus, in gasoline, those as non-economic Alberta the oil we of sustainable condition

and to as We leading spreads to started is growth are demand sulfur are to delayed rationalization indicator in and gasoline as economic distillates. of for starting expect the struggle which capacity for - the this heavy as compete refining oil With the high also volatile as and distillate that to along both this increasingly improvement. feedstocks see demand drag correction market. a XXXX tries out have dirty being see the rapidly continue Global beginnings support to the widen should marginal favorable for We a additions Strong fuel for capacity activity and software for refinery continue some are and see to believe a we to light, requirements the accommodate effect backdrop, for standards. IMO implementation and the that positive have products. spreads gasoline - low we the jet of an also with to the positive industry clean, on should impact be it should approaching

market market. the run the we intend opportunities operating improvement assets of in take to way environmentally, As in an reliably, to will profitability responsibly, our many to safely, best said past, assets have is and lead times to and We have which our well. the advantage

will to call go over over to Now Erik financial our the results. I turn

Erik Young

adjusted Today, Tom. of quarter per Thank you, reported PBF first share. loss an $X.XX

continue for rate of effective approximately $XX.X for First an quarter PBFs comparable modeling tax purposes, consensus effective tax to EBITDA to XX%. XX% loss estimates was a use please and with rate approximately the quarter of million.

of RIN obligations. Our is XXXX a down million related from CapEx and subject Logistics. full-year $XXX results $XXX $XX corporate remains and but million, range, pricing, prevailing million expense for PBF CapEx $XX.X the which was to incurred for estimate, Consolidated our million by quarter million $XXX quarter expect change. million refining included original includes $XXX to first we At in RIN which approximately

for with billion We at quarter approximately PBF more CapEx includes $XXX our PBF $XXX liquidity at the $X with remained Our guidance million the for Logistics. and million strategic which $X.X Energy $XXX ended than million million, year to $XXX billion projects. of

Our debt our XX%. consolidated to cap was cash end and quarter million net was $XXX balance approximately

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

organic of PBF with million Finally, last XX% or successfully an acquisition Torrance remaining fully offering Valley million of at Energy EBITDA. equity PBFX transaction of partnership's targets $XXX an XXXX. through finances PBF raised week, Pipeline oversubscribed in announced that of the the dropdown $XXX the cost common Xx Company new interest growth Logistics the

$XXX entities further will to balance to it color the Energy, acquisition. on listen We I the you to for of the earnings million morning later for the both for sheet. more the Importantly and consideration cash the PBFX provides encourage and that PBF partnership this growth strengthen committed remain call

to the turn I'll over call Now Matt.

Matthew Lucey

Erik. Thanks,

Our day XXX,XXX barrels total throughput averaged for approximately quarter. the per

As deliver is quarter significant and back quarter. Tom completed run our its come on in refineries the to well day We a strong results. Toledo, were completing the of conducted up March. and turnaround mentioned, with the every exception able the well Torrance XX second maintenance of positioned units other work Since and is to in into Coker one Torrance

and be up, online on a this that the East the Prior was conducting weeks. be record Coker would XX-year work We're the Fluid two cycle Delaware's any which wrapped weekend. should are at in normal be two to for world. currently next turnaround and the our run wrapping should we work We're which some Coker, a on Coast, plant targeting On years. Coker Paulsboro, ownership, the up

worse during and the from total of we of perspective, second some Company quarter, for of a remainder it we identified our we needed remain will for challenging control. a a maintenance that clean net our quarter, year. Gulf major of on position our can business By elected system that we light week set the expanded Finally, entire have the but maintenance period. we run consciously the quarter of weak the year. of the made maintenance focused we refining In margins. on We the at the advance the our CapEx increase XXX% to first This has in strategic the that took XX% step up to expect as for for Coast, completed positive a the this financial our end Chalmette we product intently aspects activities

better end We are are projects first strategic and the our in Coker with schedule benefit any on all year. year outlook. have the to quarter of the be we'd an frontloading improving service of be we the hydrogen Both questions. coker market year, to from in we've the and progressing believe expect of the investments to next in Chalmette in in Hydrogen best our Plant. we take position our service firmly conditions with completed the we even Delaware to be pleased put refineries plant remarks, and City in the Operator, the By possible

Operator

[Operator Our Wells comes from Roger question Instructions] Fargo. of Read first

Roger Read

Yes. Good morning.

glad you to behind now. you have QX fact In

Thomas Nimbley

I Yes, think.

Roger Read

mean, and comments high the in I it North this you with looks crudes, tight been widening not. curious guess Canada production flowing it diffs. the but crude, And that I crude I main reversed summer. been cutting the there. the heavies. maintenance question America. is heavy initial adjusted you of like WCS up important about follow-up think to is global I back was one market or on small a I QX an know have only quick the the fairly held crude portion Canada a really how had mean in for whether QX would through just light, looks of the Plant really It about that of in

until clear got So for QX - the it spreads. a before or then get relief longer on to to this Is little maybe with would we take maybe, up said gasoline. you even light-heavy wait we it it's QX

Thomas Nimbley

decision work, typically view time but have that OPEC, external but anyway. the is that certainly you've fourth fact and you some as or obviously Venezuela first we say maintenance on the the the upgrades Iran, envisioned with I their that force I be from it's been who but Roger, by own differential that's have point believe a the We negative that - mandated expect see shift typical it will would the former were We you're into or running these WCS the period to fair might to a opine, cuts probably believe people - and hit we'll your widening. that influences, was got indicated and we think that we've that other of kind to quarter. whether Non-OPEC, Canada. to all that, couple quarter the was peak underway the tied My right. was others intervene so step we in that it do Premier had and actually that market who obviously a by

indicators $XX In fact, market or we're on think WCS $XX.XX differential looking at up the around yesterday, from Brent. I of

add So horizon, increasing. of on it's with specter on going leading out expect which fuel of pressure. the We would be to bit indicator. all a would we And have spreads widened a that we additional seen little think course maybe the IMO

Roger Read

Okay.

guess I better up on immediate like it front. that kind things So the maybe of the a half year, mean I does in an bit of should clear get back not sound little

Matthew Lucey

it's Matt. Roger,

is house our the where is by view end quarter, it of is think very the today. different specifically looks from market I the it second [indiscernible] the

You mentioned coincides always saw on go, that's maintenance the seems going there it now. to the maintenance, the with

is very and seeing different a by So and widening like said has today July I been. it it it's we X, picture than we're think

Roger Read

you. that. around obviously fairly of pretty aggressively, the had Okay, a for great. you question with cash and few imagine Erik, remainder but positive everything days for run the just Quarter Thanks year. you then moving a quick rate side, for on And have things the now a

it XXX You to free got and for of down. in there want uses QX? incremental a Widdle debt how about what here dropdown. should little another we PBFX the Is was would What's think up Is Or back - from the step cash with that you cash? outlook the do? it?

Erik Young

Yes.

capital working on inventory That's borrowed quarter. about the system going accelerated $XXX maintenance. built we driven through remainder its the quarter that's first work we ABL million second some during So through during the this all way of really of our to the

to the sheet. to million be back going to ultimately and by strengthen the end $XXX of nil that to expect it's We down balance continued beat June

once flesh So I to in think ultimately going from it's second form through very quarter, that's clean But CapEx perspective, still then the cash. all runway a our quarter second we've here CapEx have a go. of some perspective through systems got and from we're we

Roger Read

All right, great. Thank you.

Operator

Manav Gupta Suisse. from question comes of is Our next Credit

Manav Gupta

a little refiner remember it? back dig time the just after not a the public think equity dropped to into for I Hey was to wanted raised assets that. bit drop. even the but guys, in did MPC don't I MLP it deep and last I decent XXXX, MLP when

You can correct me if I'm wrong.

million XXX so understand in then last this just out rabbit how equity how I revive from raise manage the you you drop. did this of common your of it? did I'm manage was think trying to So refineries, magic pull trick And do the hack. new to you lost to

Erik Young

Manav, We've the of at was the work of same it's times Committee drop-down made remaining we through that the on that with PBF-owned quite cleaned Torrance there. with easy a got The investors. up upfront we've two Conflicts front-end IDR felt lot like Valley perspective. the Pipeline done our time Erik. very the frankly interest quarter. in lot a logical during sense, our past over from and and first spent MLP a the legwork We've structure very market years been and clean We to XX% transaction

had response positive we it old So makes from and look clean pretty in some that said to money sense. ultimately new got structure money you've coming some investors,

in our not internal to plan basically market an this XXXX. to have access pathway the strategy sets the think organic public I our us for through fund the now drop-down MLP is to two equity

of sets the bit XX kind up here. there's getting that over to market So months funding perspective an a equity for deal the months into of XX from us really

Thomas Nimbley

the sort I we've Eric Those organic three other think to about. that we the - were issues on in over that system. executed We've we is the we up mentioned drop-down terms we've very the logical was very, the IDR's, us one so point firmer on that cleaned cleaned spoke pleased addressing very much our of projects MLP think ground on Manav, are worked us and up the in the just hard, market rail support most year executed third-party obviously I MLP, And legs on make last to of market effort. in executed contract, that on And business. the that acquisitions. we've

Manav Gupta

done talk happening if I a gasoline mean what's could quick have bit I No, smartly on they West the a Coast. you little side, follow-up, on the guys. especially about

- very XQ. harder then in running You're lot XQ and

what's the gasoline going how West expect and to So outlook over benefit you there from Coast on market?

Thomas Nimbley

overall And slate stance is it's because the and Coast. logic the it's obviously this an - seen to Well, California the of like obviously before. products a Ice strategy we supply movie we've obviously versus the West The in rest and chain run Island world. along

late when but all this you of mid-to-late because amount unplanned first the come about that downtime you the in first downtime of significant and these unplanned opportunities a the either in have occurred of So of case plan, the part that part follow quarter. quarter,

get You rather extraordinary opportunities. these

cracks gasoline very and California, had very good overall we've cracks superstitious. So out in good

behind been more benefiting I'm past to very of to continuing that we've to on first opposed the say, able and been the of beginning the that run the quarter, strongly as quarter than created in it. top as got us from we've today. the and But March been run you knocking has we because Tolerance people has pretty middle to of able proud Tolerance, through first the opportunity the turnaround have in no of I'm So norm table, and

So it's a environment. favorable

Manav Gupta

guys. Thanks for taking questions my

Operator

from question Energy. comes next Our Blake of Simmons Fernandez

Blake Fernandez

you the issuance was the sent balance of questions, of you've it forward? and alleviated a on how see little and sheet of given what drop. on I concerns that little balance on keep I just elaborate a Good difficulty deeper. was the need hoping could in you this one you just guys. the was? you cash We've but dig from think could I Erik, kind where Obviously definitely you sheet going capital Hey, impacts, some quarter some with the working equity to addressed already if morning. bit think you also that of some confirm and could you a hoping things the the books, perspective

Erik Young

Sure.

order. reverse in go Let's

capital $XXX million about we of negative a the So quarter. had working during

year. in perspective to quarters worth tie not as projects thing again during the terms at that well going a us firmly capital the that revolver as in that kind strategic projects down through working I our the or really restructuring And hydrogen us on out, roll like a prudent the the ultimately CapEx prices ultimately does would the the restart from was prudent think now, we flexibility here. anywhere of plant to one say the end through second felt the million ultimately balance think a to Chalmette be puts it acquisition want for any the I few at and $XXX of get only that's to cash very in cash sheet, million And direct draw, quarter working was refinancing will sheet million in So PBFX of through essentially move, we've keep rest coker XXXX to depend where first on a in it's place quarter. the obviously of probably but and would putting to the of got are, perspective, that which point long-term allow enough point we on of $XXX this. from We $XXX From time. dropdown our ABL balance hydrocarbon

and receivables and We capital, building that when of receipts. then barrels, backed and go that into as convert run that have times working ultimately then hydrocarbon sales ahead borrow we will cash, against those ABL periods use and products, is essentially by inventory at XXX% we will ultimately we them

We the will revolver. then pay down

Blake Fernandez

some that quarter? of working of suspect I million the you're $XXX point to here That at expecting capital, reverse Okay.

Erik Young

the We through see quarter. second Yes. during reverse should that

Blake Fernandez

you. Thank Okay.

pretty the give do turnaround. should XXXX. year, kind and that systems to the a balance color going year? I for is of system know don't for on take your have lot just while be for to you you've the don't much question to probably up of kind be you to where But running up It's the clear off I just activity activity second accelerated to largely, going you on of here next can The and persist too IMO confirm running next but turnaround or of the want you're a presume it year.

Erik Young

we do Toledo Well, - activity XXXX. we'll a some for is have planned have that in turnaround

to somewhere lower a year. around it's turnaround I have to Beyond that, be slightly average year think that. normal going I type five than

Blake Fernandez

Okay. Thank you, guys.

Operator

next from comes of Justin Our Jenkins James. Raymond question

Justin Jenkins

XXXX? thanks. given that unfolds morning, and if IMO how Good your on your market Great, today, in time. fuels expectations here on marine everyone. guess of some new a skepticism XXXX any months I maybe approach of how for changes the how demand expectations curious I'm here gasoline summer to theme on in maybe the unfold met and as the demand we if

Thomas Nimbley

they're I of the I last that to really to Coast Guard, representative rather and that week, lots even There's week to who IMO push But pump are up to a listened going planned. or go I non-compliant remained U.S. do you going with just fixing meeting make something they you the one said and onboard of around up going edge. question more the this you if or June it's port, it, early rules. as out it's late And chatter the go a have give there? that things IMO do States the convinced with forget I going to fuel is to go. off you and if issues, they what lined deal or like came that? but pull everybody United go There's the to a for IMO about getting in it's to is understand think, May those is if basically and think you They to sure

position Yesterday, I the senators XX and by that that this that expect implementation energy to Trump. of them the is a we of letter, into and There's should to we actually it's believe good for full to place. think going saying in was that happen. favorable good go to I is sent States because this support IMO. the IMO environment We Donald morning sent the we're is for United And a

they And As the distillate going are has demand. we've what an that as in about. I'm We're I for absolutely ramifications, nothing see in talked to that increase think changed convinced regard.

of in I very sulfur. some fuel the with probably see already it's initial X.X existence echo fuels, of you're ultra-low-sulfur a stages, the go shippers to type to think right just going in because diesel

I we'll below, to and out widened additional you're gasoline So gas jet in under enemy a on carry the has you're much. bump demand. the thing significantly crackers of take the compliant make because most sulfur goes, becomes legs be cat And too There'll get or a the here. and think If going lot the is fuel. gasoline going floor it they're spreads to that the

You're XX% from that moving by output X.X% down that you can sulfur going as today into sulfur to dump an X.X%.

oil spreads a I out. so heavy much you'll differentials into fuel And widening wider wide see that will and spread very desolate that light-heavy versus or expect

So refineries environment have market the any believe to not have be rewarded. been, best going market time be right turn for complex world that all they're complex a deal we knobs environment the to we and a with and it going to refiner, complex the it's whether now the would refiners hasn't but into in

Justin Jenkins

Perfect. it I leave going detail, that appreciate I'm there. Tom. to all

Operator

comes next Our Markets. RBC from question Brad Heffern of Capital

Brad Heffern

you the some on could expand about morning crude good shifting hoping I was just Tom, comments everyone. slate. your prepared Hey, of

refiners I max time. tend much heavy think sort pretty of heavy to all the run

shifting So that light. in to hear of you're favor away it's interesting

heavy then sort to shift or color have light? and how from of that I of in are you was on much doing some any of bandwidth shift in to could if facilities favor So wondering light you give examples you the that favor

Thomas Nimbley

I'll comment. Sure. even

earlier point, call are I heard that that I the sit think and the Gorder the these light at run to economics the - in and those don't Toledo knobs five I about got shifting they Valero runs your to look all try to referred Joe we plants. actually talked we've that obviously sweet are But We to refineries. crude. specific vacuum. a in

you and base still are And that's attractive particularly already where on seeing with crudes runs predominantly refinery and the that's Coast we look So the really those, economics play, we cracks. California if that West these there.

have lighten desire out to in turns. any up don't really specifically we So

to emphasis is two the on LLS, So narrow a actually the Chalmette, LLS and Chalmette. refineries basically it was economic ran because too continue Mars We down spreads run and on Coast in units to not look opportunities. East of we completely one out the for swapped amount of fair and the crude we Mars, were ran almost crude light other run and did

XX,XXX that, in, than we barrels run can that doing month in notionally March. we can day that the we were more So of put but a

capability have sweet lot On to we crude. run East Coast, a the of the

of We had Bakken we Bakken, Delaware. a several north when into XXX,XXX day that rail of have barrels we years when economics were running the we before, with proven a ago, heard

the a some now that waterborne and of in crews of barrels of from Nova rest now the were sours, Canada, but down sweets. light the crews medium sourcing in fair running We and day that, like a other we've we're of crude them lot say that of some a fair a XX,XXX, running from can the world. We A in XX,XXX to even Paulsboro coming other amount if running problem there. sweet are Bakken Paulsboro and go amount been way. economics light typically without run Terra

units run with can certainly refineries can sweet So on like the smaller can and say fair amount go allow designed all TI crude Paulsboro, usually to anybody do capacity same complex way. Maya when or it XXX% not else or crude. we unit comes the cost. And run that from a have we The run a me who sweet. It in refiners they to to I this would though, Brent in say that this are total you

low if think So even going see little may stay sweet because light going that's to going the I makes would utilization a to to that the And the reason that run economics actually bit but favor part a at crudes, forward. had you capacity that of if balanced we're sense you're to you're more you. light going run not to able sweet you crudes, be if that slate, running them

Brad Heffern

And Washington if aren't Yes, rail wondering State perfect guys end directly getting was signed, by and that does for but any that Thanks. indeed in any crude again? by you up on know some East system about up if you affected then, the I sense. might the Bakken thoughts and I thoughts once bill whether had it, Coast free

Thomas Nimbley

Coast We it have firmly only but really will ahead who and not believe into chain maybe We'll would today. be of X,XXX all bringing economics and We're be There'll the supply we that else day ready going something far XX,XXX correction of have rail, some there's side a exacerbated that know probably and have obviously I to Bakken to obviously that signed. view place. in to is to that I up in barrels But implement whether the on and now the going U.S. it did, as bit get oil, it's it but state elsewhere? sourced quite to lot would on back or which don't refineries impact a ran it's by a Washington Delaware. right we of a to a more crude looking of East Interestingly, not, the to lined be mean, are with the that. Bakken do we're run you to that, I have now, it and We're at in to to have think IMO. if get look the heavy we're go of

Brad Heffern

Thank Okay. you.

Operator

of Morgan. Our Philip JP question next comes from Gresh

Philip Gresh

of couple Yes, questions morning. good a Hi, here.

Just on the OpEx side.

per that a the first on It And was say be XXXX. was would nominal XX think absolute by East was, I'm fairly quarter on this don't year, year-over-year And like impacted I up about of last if about about it OpEx. there's million looks was basis. one it million mean it the Coast, maintenance. barrel, XXX the I more like I versus an when thinking I presume where First obviously,

I nominal Coast perhaps how OpEx color was to basis on provide a you about trying think understand So East should or moving forward? a whatever we just can

Thomas Nimbley

this, fire These the which particularly operating cost the significant of an period City, of are refineries, a unplanned say their we there were time. did I'd Actually because Yes. downtime want which unit or crude Delaware in quite us work for to have quarter. absolutely first high you had of right. costs course took a and

rest expectation to lot on the of of it. it made in the minus very down through that factors. going got conditions. we we front to energy a refineries we budget, particularly made it in because have the distant, Also, City all a had of costs very budget and clear we they as increased pretty California, to now for it us and in was is people the are We it our driven but temperatures Delaware amount XX the first But very in that of We high windshield that by full-year. move That's high when to quarter we're to clear the eat bring Delaware the they're have good loaded of have by, costs we even weather and going the the behind of have going system I energy forward hit that had. the an downtime

Philip Gresh

a if more So or at normal more X.XX rate call it X.XX absolutely I year's is a about think barrel normal. run last

Thomas Nimbley

absolutely. Yes,

Philip Gresh

of Torrance the the with would the should there to impact refining additional expect there drop-down, because do to - drop-down? question that just One on an be we OpEx see Okay. OpEx

Thomas Nimbley

No.

Erik Young

No. going cost and cost picked their That up of sales. to be was

refinery related So operating no to impact expense.

Philip Gresh

the bit the question ahead to thinking and PBFX. a drop-down you strategy parent continuing be the we last one the just of talked flow And company? story might then In a to two of you Should with drop-down as and this years? as cash to be how of back about Okay. look next over terms

Erik Young

with jive or will more always PBF today to as logistics this can of when pure with approach acquisitions most Clearly really different through organic lever since logistics, that's opportunities a more at sponsor. projects the of related party think the acquisitions. ultimately looking I much to we've we company variety doing play point, primarily drop-down parent grow opportunities well on a third as probably thing projects. relationship its kind really XXXX see from at We're to forecast, a where evolved multifaceted focused difficult that company the right, organic we're third-party

going into So the million $XX some through coming see ultimately end a XXXX result spending have million to probably we're and EBITDA $XX annualized of spending to to another what now on that an we've be million money for basis, partnership. of terms We is today. going $XX of to XXXX the been XXXX. clearly EBITDA an We're of in incremental

of is of focus bit all the front-end third more really that by with Valley XXXX acquisition acquisitions. the driven interest. work So XX% was unique the in Pipeline organic the preliminary a probably done and conjunction party projects Torrance in was

And so anything this transaction a was more than really clean-up else.

Philip Gresh

Okay. All right. Thanks lot. a

Operator

Wong question comes of Benny Morgan from Stanley. next Our

Benny Wong

Great. Thanks guys.

Iranian the you reverse. House, get White like crude wanted to update of and going do shortfall? your domestic that, and side particularly going and a forward? to affect into with part expect be up to bit, that might ramp really the sourcing How's for OPEC strategy light up more sounds that make little Just on It and touch sourcing

Thomas Nimbley

mine. as crude, good a I it's think as will. But for and your actually OPEC I to demand wants is window impact The Well, targeting believe is, they here. are reality don't because they $XX guess going

who go I looking the think and of people type that see of here crew against if afforded to that. fill other they they're produced of opportunity take void an the ahead obviously at this Iran advantage should and opportunity sanctions that clearly for it to

prices. them to up there's at expect economic open we these ultimately incentive plus huge So

crews a Most and situation of if the the what part it's those we dish crew, that becomes to will Venezuela. up Saudis been situation expect huge happen escalating. have that saw might into of and unit, accrues we to get us to economic but to be the forward. going and can moving investment be the of sooner to and and so that really production, But looks correct like later Iran the or places the interim, We going the that have ethnic see able it there, then with by this against In the from refining been east be crude to by backed other put course situations. but And we be Mexico you opened Columbia, the it So don't of and probably Venezuela other and can resolved. amount we and have of as the out try flux tabs. sanctions improve if commercially Venezuela been now, only you continues there's to we know right and in see not expect we crudes have is able, that and we going Canada even to course

we expect source able We what to to need. be

Benny Wong

just been RIN wanted a your appreciate EPA expectation small that Great, wanted waivers. there'll just be touch RIN behind we've refinery on get And hearing to to guidance, less Tom. the signaling issuing outlook upon expense prices and that or

Just should expect more put pressure wondering we to prices? that on if RIN

Erik Young

was smaller to any exemptions. expect should as the change stuck the this with navigated point, don't reasonable has take waivers, there and moderate of I you in surplus Secretary issue what refiner administration I refiner a this RINs, No. when small do which think back. in fashion a And now of step in think deal Weller I is a expect RINs. not the a therefore But decline a price and I

Benny Wong

guys. thanks Great,

Operator

from Our of next question comes Doug of Leggate America. Bank

Clay Augumini

from quick is a touched couple This Doug. ones for lot Clay been A though, guys. Hey, hasn't just on me.

PBF you about remain And a your mode as you in and to also talked you've just drop this whether later talk elastic, religious this this but your on evolves just projects your bring your Firstly, other or you summer? coker year? lot stay distillate to max that market do clarify, of remaining can in about and views, not

Thomas Nimbley

the Let obviously running, to we're distillate. back now and max - running turn last on it are me one drops. not Right I'll the take Erik Matt we or

gasoline employment. at You We to X.X into economy continues we so. fact we've got be, or problems and much haven't the because weather exporting market. that it very full situation of the haven't inventory We're with as barrels back as favorable the related. the past And explored gasoline, did and a a up day been. in Demand million really is hanging

possibility gasoline, have we're of VP, have heavy the So been has where obviously is - to quickly heavy this a up President more tight for on a then upside match relatively legs would situation has maybe least guess continuing this which Commercial gasoline adjust that running mode, in be very distillate hey, the distillate my really up - distillate which the of a run as pulled going into a could a significant obviously is legs a my could but sets not the time for has in match, to IMO period to going commodity environment beginning a some then price lifting Once it say, the - wind will we probably IMO. as hit, and on this if at

Erik Young

$X of period. And probably point side, the growth on to only in year that million $X million at into $XXX growth a quarter last MLP about what four-year we the of organic plan laid we We've would is out first XXXX over EBITDA. million to

of sponsors Torrance on, what ultimately on So a worth that done the organic-related linked Pipeline ultimately $XX remaining projects back Valley geographic runway the the the somehow to of focus result there. as we've is And million we've refining. footprint call the to drop, really million $XX doing now are is it key elongated

refining can to a at variety things million. related MLP another, ultimately kind kind the the that of we still traditional But with years third-party with storage five of on facilities of coupled to our we marine facilities, focus various the still an company your respect key five at right use at sit got strategy. is refineries and assets call internal strategy the ultimately that of dropdown there, acquisition Then different have on at we've that refineries. $XX now the organic four So EBITDA, that side pipelines,

Clay Augumini

I appreciate Thank the you. guys. answers

Operator

comes Our Citigroup. from next question Prashant of Rao

Prashant Rao

the obviously Thanks your just Brent you'll for be take Look taking overall the as sort on a the on in little running wanted outlook, flat question. morning. to out wanted East But Good recently of as you utilization the back guidance Coast half focus get bit. I at cracks that indicated crack. almost to well. implies

a all cleaned You've talked Last wanted up had territory. side. little bit cracks outlook the XQ of issues are in we about crew Things over supply negative quite differential obviously a on indicated product to the that I focus year, in bit.

for kind of X guidance rights in go as under get how that and with to see view? a PADD what playing that wanted your of sense this you just out of specifically So IMO terms we through utilization

Thomas Nimbley

is going because adjust have going biofuel. people see and to to and impact they'll to likely I the its to - that world, in my diesel, relative client think PADD in before, we significant fuels just an sulfur then any the in they it's a X, as I said ultra-low to initially a - point belief start increase IMO and issues is same don't expect throughout and while likely that make are increase be sure you'll be eco most burn compatibility

curve So the including the fourth the to Coast. into third quarter [indiscernible] this see quarter going we end And down system, gasoline. forward relatively the the expect to on we'll East across margins on frankly, how ULS see at favorable is the of

does. But into more because it to I light That these a We will of that light there said, million gasoline surprised jet seasonally we come under usually barrels products, product gasoline because as we we see off in I with we not day see gasoline diesel. and when put up all put when today And X gasoline. would IMP see seasonally all isn't or more gasoline a ultimately floor ends light and at with demand butanes if got back will hit. come as will and strengthened be

Prashant Rao

up, cut and into quality assets to IMO, to you through wanted bigger quality Canada distillate but Maybe off Thank working expect coming Okay. that. transportation for real get quick, the natural out Syncrude, get transport differential of issues, the other did the obviously Syncrude we which some how show is we're thoughts into having right dispersive and question. now. get Canada switching to each part you. as I Appreciate on One, play two your of

to ramp, they potentially on have that. and through then think public been free have talked if able should being in comment I terms of thoughts with you level their they high And sit the your in beyond get up any to on also that maybe the there's what - where market what wanted you from capacity just earnings calls commentaries rails So been XXXX? about

Thomas Nimbley

in the On quality and into a of the is that At of feeds material and XXX-degree can because crack Toledo. growth. is in right content the we issue, quality in run, the sulfur premium Syncrude we crude Syncrude atmospheric a Syncrude the obviously terms [indiscernible] and do we FCC run all that of of plus fact first Toledo premium basically growth or only

component they impact its will very benefit a benefit is bottoms I to on fuel for regards crudes probably the into very tend to but enemy. same plus, go software think the it light could likely become The have it. will As demand, IMO, crews time, pool, little of because little that oil because sweet XXXX additional really a blending those could

somewhat it would favorable. So I think be

temporary saying to rails, that yesterday intend until solution provide don't And this the the the they regards rail morning was I know is built. out As solution. picked somebody are I temporary just or a pipelines seeing that initial, it if came

there's real in can that you there. go. that to a whether whatever. decide change of, there new is wanted But We'll leadership get is some But privatized you the to as has and going But I to place be obviously or see minister be not goes in how the take you also to with the win as or way probably give the and active Tuesday. that's it's or taken situation whether efforts going in railroads. guess be to that's Alberta, There believe the the pipelines will rail want So not I active build. we will

Prashant Rao

could make Great. quick one just And then if I flow. cash on one

safe given turnarounds of kind the it's that we of of majority for be a guess flows. the assume to I the of what sort rate maintenance On year-over-year those the to investing the should that terms maintenance year low Do run I'm all ones. expect of Delta do in and not rest I you of follow-up, of and cash activity?

Erik Young

Delaware maintenance our think if be billion our the through can Yes. I to to $XXX bulk door. XX the we're hydrogen Chalmette. CapEx we strategic in and of set waited. June of City end that should control of a down be of terms what spending in through the the through, little in And we going as terms of mean get We're up out what got worth plant We've coker to at that's the $X.X obviously more be of and turnarounds it's million in CapEx about well year by going probably right. about cash overall budget back remainder from restarted as the of the getting

Prashant Rao

Thanks turn I'll the time guys. for much the it very and answers over.

Operator

Our next from question comes Silvio of Micheloto Mizuho.

Paul Sankey

Hi, guys. you This Paul hear me? Sankey. Can

Thomas Nimbley

Paul. How we are Yes, you? can

Paul Sankey

details. for all thanks Yes, guys. the Hi,

think the you've Just really I referenced table. follow-up

Canada outlook economics? So rail Thanks. and what's for for the

Thomas Nimbley

obviously versus Brent mentioned it inclination $XX starting yesterday. I There's that Prime market some the out, or have exceed $XX will to to free widen want $XX as along integrated Paul. to, Husky go free Minister want of they a press, almost of trying model. Suncor they where were to down it's able with at and we Okay. a lines driven the and new certainly Imperial be an market, $XX, and they

we're economic $XX, in $XX, system. they or quality And transportation, differential where in probably Brent are will looking it transportation, the that East the the more fact back thought WCS So $XX would and module that it driving and versus something in come Coast that we turnarounds. indications seen norm that goes be is loosen - that we our is belief the out as is be of economics at

Paul Sankey

it. Got

the Thanks Just kind for the questions. for of commentary. the

to mention the recently. you. Is a loss conditions we market around partly your on did because M&A but of anything Thank probably It's in rail. about drama add You refining haven't perspective Anadarko, or of equivalent? heard there from

Thomas Nimbley

would that be. out and If that of lot Just I the the to rest we've moving see something to we in come everything focusing We look work, forward we're of right the But that it. trying that whole for up. be coming so up. figure on nothing quarter to year. a would now out and There's to certainly we continue not interested there's continues there's comes got nailed how first down at

Paul Sankey

Understood. Tom. Thanks,

Operator

Our next Holt. question Pickering, Matthew Tudor, comes Blair of from

Your open. line is

Matthew Blair

I days. you Canadian QX? be your everyone. heavy XX you morning crude disclose by on up could QX volumes your we good volumes in rail Hey, thought say, was around a outlook then Tom, we'd these what's and hoping for But

Thomas O'Connor

XX quarter Thomas second the gravitating quarter January XX up the the a going numbers quarter. peaked second in waned back KBD WCS It's out of those quarter into throughout up in with the to were quarter. We're will In to KBD. about the XX be our barrels the leading first first having lower the O'Connor. in fourth the by And all about of in price area and collapse

Matthew Blair

Got your into levels and that have capture Does unusual. QX in if this that built overall you or was refineries, you're production QX you then it. higher your that implications throughput would which And positive any have intermediate to it's than mean margin a little that negative inventory up off? maybe some on work have

Erik Young

first second a And a use capital that We revert as its buying of working quarter the during working during system related will intermediate way some will cash to work built that think through quarter. benefit in the to had with absolutely ultimately quarter. that back just we crude. respect the hydrocarbons well the second to positive We capital as

and ultimately So it online. to will products a we come want back absolutely, convert we clean refineries sell were discount storing to be that as intermediate that didn't some at reprocessed massive

Matthew Blair

you. Got thank it,

Operator

next comes Gabelman Jason of Our from Cowen. question

Jason Gabelman

morning, guys. Good Yes.

and if you the and how deploy a wondering yield into in plays lot sustainable you're in shareholder I'm shareholders half to certainly between if excess a down paying increase seems that to about, generated a potentially of thinking XXXX, So to way? the you're expected in out cash and just returning back year IMO cash that you cash returns to to going Thanks. are the more how going that debt it way of look

Erik Young

per company XXXX Yes. share. perspective $X.XX we've What from got consistent say dividend since pretty would at in public a we started I the is a

been so not in in the share it. ultimately that try and We've point done as this actually mirror I think cash until be we consistent. those prudent at have some rearview have time. And generated relatively buybacks to more spend little been a we returns But have our

now, We quarter. through was perspective our clearly the the that. key have from first done getting So

focused of vast ultimately repayable balance and through will bulk we're now what got on strong year. second performance to the Now ultimately the the on that we us and sheet But quarter second pretty gotten gives prices, moves we've of hydrocarbon down the zero. of market a to we've down accordingly debt but half respond depending kind of up

our improve to sheet. the from balance it's continued so And perspective,

Jason Gabelman

imports? terms Got Thanks. are But you to more these indications from of comments Thanks. I year. just outlook and the East Middle is in appreciate still kind low the of half your it. levels it the market a could medium shower or second at your I supply of ask the kind is follow-up, about of in on And heavy seeing any near-term that U.S. increasing multi-year a

Erik Young

low It today what remains the levels We'll of imports. happens. see at multi-year

of there's barrels that no XX-year obviously yet. U.S., they at the moving to make that sure that the think the place. tomorrow, the are want it surprises do record I we or when tomorrow but the sinkage is They on are to that sure now in change, guess lows Saudis that want think in I it amount to but lows, hasn't today, make I right fact go is in to expect that that and it this, happens -

Jason Gabelman

time. Thanks for the

Operator

question Sachs. next Goldman Our comes from Neil of Mehta

Neil Mehta

Tom. morning, Good Hey.

Tom, about question hoping bottom modeling price rates on rates in on could capture environment. and barrels that crude for has think it impact first XQ. the was we just I as The is of higher capture talk about the you a

Thomas Nimbley

X impact there to lot to are XX, to to we you on X and Yes. Obviously or you refining margin system the coke goes coke as crude X. are two is an on a from there Coke, coping goes price X it if and are commodities. of is from basically making XX focused of

lose you're So - another lose before, you actually what $XX. selling you another $XX you

So coke. on an impact there's rate a market rising from clearly in capture

as The the inelastic the that is doesn't that market butanes. with area ends, particularly quickly move second light is somewhat propanes,

it up as two a they correct. That can goes coke words, commodities And of loss will you crude unless crude particularly see the and In hits. that expect and have on coke products, But it, you're propanes. to as happens calculate a the you're we are the what take are yield widen those to you we'll efficient. going influence artificially Usually And if those when now look coke markets is for of and light margin the the differentials, on just where has see widening running it other being be. and so of spread will - efficient a those versus would get crude that why differential out. producing at have of today. said, is that's heavy we IMO to paid And lot are they that price in

Erik Young

sweet in that point, the for spot crude difference a us. is that range To $XX current

and at production. level Tom about production concerned this product So loss we're because not also low as value incentivize it said

of now. we actually where So the prices sort are like crude

Neil Mehta

potentially follow-up speculation is assembly. through California. noise, A constraints about then bill a just supply with on Okay, that's lot of the crude the over California time in And passing great. now the right

are about on what thoughts and saying ground boots any that this risk? on Just the

Thomas Nimbley

We state restrict that nature. being something of of going to could number shutting California But that happen. run if a the simply things concerned you refineries not deliveries country. down passed risk would or is that. of the the that took California like draconian We is of are understand is different all about that, reality you waterborne something not in a

actually So to about risk. that being license not see but be is our types real different having that we of a worked worried imposed. we as constraints are and advantage, do California don't those

Neil Mehta

it. Appreciate Tom. Thanks, Okay.

Operator

of over to our Nimbley Tom closing conference. call This Q&A to the be for concludes happy turn back I'd the portion remarks.

Thomas Nimbley

everybody story a look read and have joining call very next call Thank much thank much. we'll today. Well, our We to you better our very hopefully to you for forward to you.

Operator

This today's call PBF does first and Energy conference conclude webcast. XXXX earnings quarter

lines. day. a You Have may disconnect good your now

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