PBF Energy (PBF) 3 May 182018 Q1 Earnings call transcript

Good day, everyone, and welcome to the PBF Energy First Quarter 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 management's prepared remarks. Please note, today's call may be recorded. It is now my pleasure to turn the conference over to Colin Murray of Investor Relations. Sir, you may begin.

Erica. 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 financial guidance A available website. our on earnings today's release, is and information with of operating throughput including

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

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

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

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

is I like our downtime occurring million regions with our market of to the in operating adjusted congratulate the conditions bulk first in $XXX and the of We the of employees with which our turnarounds. in quarter activity. extensive completed broadly With execution our quarter on reported the given half early of of we line our of approximately three turnaround four expectations in turnarounds all the the latter EBITDA would quarter. the

both the increase benefits represented rate all a us which driven and employees, to was lowered on incentive and Act by This Jobs and their supported by of and tax corporate in an Cuts increase would to us pay Another employees. Tax management the reward benefit was item highlight with to possible this to of decision in of by large our I by part taken XXXX, allowed compensation. like our board our made our non-represented,

result, a first higher expense our than original G&A As guidance. was quarter in our the

items Looking of that very are sector. up for ahead, the nicely we a see lining refining number

to and of granted EPA While Market refinery business. there been with thereby fix our are for solutions, prices fundamentals small very the season. distillates have the appear days inventories, distillates, Product discussions to down into favorable as lows. waste lower a RFS by summer driving RINs reducing head significant no effect inventory the cover especially be near had waivers five-year to we the permanent and trending headwind on the have

On market favorably. the Brent the to TI well side, and move crude we be seeing differentials the continues are supplied light-heavy and

Looking shift we further marine well for believe standard upcoming our XXXX. diesel fuel prepared system is with refining the IMO ahead,

independent one has on call, system additional than refining across but projects are coking potentially our our As could we PBF this and refiner, capacity said all last increase we advantage. more exploring that

selective market to employees profitable highlights. run operational and in reliably and as on projects and we value assets our high yield safely Our our source by return assets assets organic optionality to do and and that will be this capitalize benefit. through If to of execute our call crude I is will our in our over to will turn shareholders fundamentals. strategy, improve running now our this high the succeed a our strategy position products. Matt incrementally investments by and always in put this strong and environment making We

the first around of Tom as mentioned that the completed And the turnaround work heavy Thanks, Tom. quarter a was company. the revolves story just ago, across moment

Chalmette, In completed major downtime were unit we of quarter, year. turnarounds impacted for the Del planned approximately our low barrels Total turnaround half system budget. the half we're and and conditions by than City, the plants. now we for driven and all the each our guidance, second Toledo throughput refining was day, runway for XXX,XXX we line market clear the pleased quarter for the results quarter first on the with extensive our the During Clearly, approximately was XX% completed per completed have that Coast FCC weaker was East workload with our quarter. Chalmette, an workload the alkylation remaining during heavy quarters refineries, only by the during of the first for on the third year in end work of with a in the which QX major more heavy but assets. turnaround scheduled of the second and the and

under With million, budget. the early slightly turnaround couple completed $XXX days XX-day and of was a

at to of clean our costs. It allowed to tank newly XX,XXX of reduce the average day continue Chalmette. on a benefits see and barrels the constructed We export demerge products us

weather higher capitalize but were January. first Chalmette's the as hit lower turnaround March Our on the in in to well activity. as Louisiana and has quarter were results in major February maintenance FCC exports fully of some project lie last as Chalmette somewhat yet reformer clearly and benefits the in of from potentially impacted that January the a the result approved. are an maintenance when extraordinary the good was of year. better commercial fundamentals With front now, underlying project in The to coming investment us. end project by work original place as this of put still

We forward. but The of target our large aromatics and was turnarounds challenging the environment unit, the crude going reformer quarter In will the are Mid-Con. work expectations production budget. to hydrocracker, in The for completed the we our past on unit. the importantly perform original quite remained market Toledo, extended units confident date

were partially capture offset by that maintenance markets of the our Our rate impact cracks. gasoline combined relatively strong with reflects chemical activity weak

complex note budget. was only in East on in Reliability and note The operating line ran $X were which just in refinery excellent, expectations. and of represents with Coast, City's target are on Of $X, a was operating but Coast above of the East line were operating to our decrease running expense $X guidance, time slightly Torrance On the quarter. our well. operations where not least, reported This not includes as terminal certainly the as XXXX. important over Last stated the throughput expenses, the but we reductions. completed Del from in it's on expenses well. with very pipeline is alkylation turnaround Torrance. $X we started well network

work at to remaining plant Del set off work the set year, the September these in only are turnaround the Paulsboro team unit, work a which should While turnaround end the with scheduled of XX% its of scheduled results for year, at regards our and completed standout good In be for has planned the XXXX tremendous its a the possible smaller a to on through is to October. reformer City November. a in Torrance. start on work bulk this year. we the for of has begin investments last and coker to crude are of have be clear made They turnarounds ahead year efforts path with significant Torrance. no

and growing averages. are As driving global inventory below levels is product for strong Tom mentioned, distillates, demand five-year especially clean markets,

turnarounds to well to planned firing bulk cylinders, our season. a of is like on be With complete, looks spring entering the our refining positioned the on very and financials. With that, Erik I'll over system constructive turn all summer what call

Matt. Thanks,

first on quarter item. comments As a aforementioned results the our reminder, LCM non-cash exclude the will

diluted $X approximately For converted fully operations the fully net $X.XX and first on quarter, PBF fully reported of a of million million per exchanged $XX.X income loss from share or basis. adjusted

million, includes stock-based estimates compensation approximately $X to approximately was comparable EBITDA expense. non-cash million which $XX.X Our consensus of

the $XX.X structure. and rate and approximately $XX.X G&A tax reflective corporate were For the new million, of quarter which million. tax was effective $XX was was million, interest for our expense quarter, PBF's approximately XX% is lower expense expenses amortization depreciation

compared of for prices a lower lower favorable $XX.X the first due totaled obligations activity. with last RINs turnaround RIN is quarter combined million. quarter our the a This is heavy Our result direct to expense and decline volume to

year rate, expense. and million and consolidated was less XX%. million by $XX.X see $X quarter $XXX to RIN burden Total was million a incurred the ended full the CapEx in at corporate we XXXX net approximately expenses still to approximately approximately or quarter our the than Logistics. With $X.X debt for respect and our million with liquidity the While current CapEx $XXX refining cap our RIN range consolidated includes we for $XX.X could PBF balance which sheet, of billion, million,

to provide important capital incremental mentioned yesterday. morning, our in component on maturity This structure, an strong to our the our support Final institutions and the facility $X.X amended and commitments terms XXXX. We'd for PBF. new were resulted an upsizing the of their commitment the this press of closed extend of to As like release we revolving XX thank to facility participating and flexibility credit facility in is the and billion.

we've announce pleased any increase. per opening today, and Also to approved that dividend has be questions. our board of Logistics our Operator, we'd to share. consecutive we quarterly distribution are XXth completed announced remarks quarterly $X.XX PBF take Lastly, a note of its pleased

ahead. open In will Read you. Roger for to go from the questions. Wells Please we first Thank go a call We'll moment, Fargo.

you. Thank Yeah. Good morning.

Good morning.

we back then you generally the and – this we've doing can would and sustainability couple that there opening of years? benefits as we of cost about us seeing increase it, speaking, out fairly think – in you've that, across the cost on trimming of Could should had But been go walk maybe here in consistently and a things Can you've we whether you or from, the talk continuous we process the you how about reductions expect next up California. for through mentioned kind you is from ops. risks the been maybe what reductions foresee,

put turnaround, and investment, really we add? that is that what us human and and Matt, these I spent the there money improvements believe obviously in has you the the progress investment folks to course, and not to have lot was of do, that to that. mouth, in allowed We Matt would to yet and And Torrance extremely said us. then extent, of But good systems we do the in just invested because we the in system. you this Torrance bit the their and Tom. problem his took but proud work they rest the Torrance – turn to is very of The that Torrance who over we're certain I'm for kind to speak of has had Roger, on plant, procedural to and of particular the shape. come all that the will that give embraced investment equipment a views of have it the only into much people in reductions. going resulted a

Roger, we dramatically consistent throughput that. OpEx maintain that Just, helps and intend to

if other is the you a – stay over think maybe how we can But fence up. a there. escalating we directly, we below about think to where have line, question refinery, it and moving compare at we I no, answer we're see the to prove you are your in which $X If isolate look intend We've get. competitors no, we West not to Hopefully, the can that barrel we well Coast, or to gone we you know better. barrel. to you a But and as think are do we want simply bit where to $X just

your had guess I anticipating something How in a this mean at least we been the do are are that you on world's asset bid do And how look? can But I've since say Okay. pretty front. reasonable here? assets else acquisition I still West then you market Coast actively big the of prices? the from on market oyster week. as think and on or return announcement ask next been that we've things the that I'll Thanks. there look opposed does Are beginning the do question things

congratulations and, say Goff. – to did announcement but not about let Greg this what first you're Let I'm me referring in sure and the Heminger fact, I earlier was I say to both Gary say e-mail me going first week,

Andeavor, think companies, other deal opportunities the a clearly up. and a very of I in themselves good and in it results that's shareholders well, usually transformative of probably, very as for the is good industry many shown a happens deal ways. shareholders merger immediately both the and for Potentially

has IMO individual little heard the ask. the so asset probably say think terms On complication a you've of analytical me basis, in the I process bit a put on before, of bid

up an have You get in will this that to because the look as go at evaluation situations people of IMO. tend opportunity, these who perhaps refineries

it's because market, And price three-year That former, sitting you is bit back absolutely of us, to thing so Marathon got of okay, it is may this what or of a doing has room going spending time around it's said, to, and come a a and if do price, then they to may want saying a than get then transitory a the to Andeavor a cyclical that. and be has lot candidly, amount so going corporate that a not to game including we board ridiculously think will have in to longer IMO. at on take do buyer changing believe to And did we're what your have the bit, little fair do people bigger I IMO thing. you're look being elevate is it. Refineries the the

Okay, great. you. Thank

that Blake We'll Scotia the change go landscape? boards Inc. Capital talked the now that do Weil. I'm reassess kind think Blake on competitive point, morning. mean, things, mean, Fernandez competitor necessarily go Howard to about that. to from Good doesn't Please just to you. Fernandez of change that year-end, of Hey, the have, (USA), last when landscape line me I I having maybe larger at Scotia guess, Tom, you you Thank - on the necessarily ahead. guys. wrong that but does next that I you

into spawn you if is handle has the try handle with the anything this acquisition? Inc. Fernandez stranded on will but you Scotia sulfur a a don't but companies don't that happen those potential opportunities a the of high in say fuel resid (USA), while, be that a the with exist I of going way do are deal big specific it going to to it was that to for lot my perhaps. a I are think think make. necessarily in certainly to area and material. that deal, you impacts to one right perhaps there, And it's that have I going And it activity, No, going buying companies can't activity. perhaps, see X.X% deals? some there's what And as force Do actually IMO change the industry. the I of does. off commercial not The real that will early in issue reality all some be have with stream, some the board the probably corollary choices But of a to things have time, is well. okay. Capital perhaps a scale going is now, to oil, on view have - two M&A you So system I no go that to do good very the they're who I try do as this, some I earlier they're we to you're believe commercial/M&A more to and Blake activity of saw not in do in say position say that week,

actual question capacity you the gasoline comments and Okay. was just then, I second far where do guys going bit what a of the then Thanks. little distillate potential it's have made us maybe Thanks. XX,XXX on breakdown what elaborate is, there? exports, barrels a And as could remind Matt as is day. you any was, of hoping

in capability can of in in - Yeah, investing early terms breaking or don't but where life from exports. get I invest you grow know our another our gasoline versus deal into It's day continue X,XXX Fernandez distillate, expect responses We see to gain, Blake, capabilities can down Toledo XX,XXX did Capital of and the export a barrels tell look (USA), we are. where barrels we we on we're in we would where cycle a day we Inc. a we I and that just specific we increasing. but export Scotia to Blake commercial

Okay. Matt. Thank you,

question ahead. comes go from Please from Our Gresh JPMorgan. next Phil

spending. morning. Hi, here. questions A couple on is just good Yes. the One of capital

turnarounds, Given the years' in actually are turnarounds like XX% reasonably the low. about XQ of comment CapEx that worth looks the of the is

didn't year new guidance think Erik, to I relative give full your you year. hear I full guidance, the any for

comment just I tie in anything you'd could on be any overall And potentially thinking IMO Just to that if spending thoughts about prepared remarks. your given on outlook. that XXXX related your

of the is From Phil. $XXX Sure, we're shy still have year. call just I of $XXX with a QX. financial think million statement But ultimately CapEx total standpoint, this did our, for consolidated circa comfortable CapEx accounting. in in million it, We

another accruals CapEx of ultimately a we've will during to going into portion that the got the $XXX balance swing as convert that and shows quarter, of sheet the you're through CapEx cash. million have So second probably certain and worth back on up course

one would Yeah, It's comment. the major disruption going My XX%. make downtimes. our not the to That's just comment on accounting I regard keeping. to to going unit refinery to the finance

pre-spending So so work be and other will there the operations. capital year, at our spending, towards the complete impact won't that that of end but Torrance is all

XX% my you want if going it, really call is our operational to disruptions So system. to, to

pay likely The of short-term, out if of good very projected barrel even being quote are believe by three venture aware, category. $XX that along about number this we've project a units, me project some looking it's previous investment. addition Let impact. clean-dirty Chalmette very coker at. And spreads shutdown that which a in with analysts, put talk is potential a for we a given kind some We a that One would in that ownership, as restarted. IMO, XXXX have the buckets will be It's coker a other the that we're that economic joint you're of the I quickly. IMO well three-year,

now it unit better what spending it's to on projected. take. get are estimate would down. It's we money been mothballed right has been a So been The

the in but issue of have in second we because going be would some to offsite we're logistics building it things the notionally we hydrogen The move basically That IMO impact. is The How then out? logistics and going would million project, literally that have have be we feedstock then likely looking done with the spend that place one hydrogen potentially revising is lease some $XX have we plant third we're would and advantage we here do and thing. party will plant Delaware is at to a And doing change. you an do what a on, into things can go tomorrow said, pressing we're don't that being money IMO. today. to We in have

about these increment And So bet projects. do what it talked to just is I've if we're I pressing we think our just that. on

Sure.

Okay. And it ballpark coker? Or any do it you the cost what early? might to do on just is have too

I to year too we're us It's give you million we've that would doing pump in a earmarked or of the the $XX will debottleneck incremental simple I hydrocracker. think to They're bit early, this the all that recall try options, study something we've It's will got. That a Torrance but the of get about out. little options on it hydrocracker. – project a tell to on little capacity

now are months quite we million well-defined, better So of on and coker. the but $XX be have those cost should the from handle might bit a it more what about three

Okay.

and know and meeting lot there on committee just this and of hydrofluoric around there is Torrance, there's be topic weekend Second I out a acid back of forth. question the is this

think curious was and presume financially. company entire risk, he of Manager just that he said, did I solution. a there made will he at X that which would put press an think sulfuric the meeting work of like And I I acid, to moving comment and the But a to your representation meant conclusion situation? from presenting be was this it sound afterwards the try secondarily, the release view of towards accurate your Refinery Tier

your on of Just your thoughts curious all this. latest

stakeholders The half which its MHF. to or to use alkylation is has units the been We for HF change we think is good. California beginning. the technology ways. with going unit. safety a has back go that of the particular not continue in to believe mitigated. investment unit a issue And very said, alternative United some we Torrance That record believe and of absolutely the only all and own in Well, for the HF/MHF on to in warranted. The are work we Over risk extremely state-of-the-art has this acid, technology sulfuric and being be look I of safe an is States the

we We look Tier add are in you're optimistic the some go you're to pleased definitely meeting. safety will buttress solution of going we that for But we aware, and were other put we would – we of the that going X, are mitigation very the X, the can further Tier optimistic that here. the as outcome Phil, get steps facility. a are and to that potentially with place And

Okay. California. in that on go the bit or turnarounds the I'm a and side fundamentals the we question like you not? that any in data demand And how gasoline will anything The California still high just for or the weekly looks? looking Last summer do your into as think on on view comes help market curious the gasoline inventories are out.

flat on so demand or basically Overall it's year-to-year. gasoline,

is on Jersey this little to seeing but here and some state still for morning we're are a a I ordinary. demand. demand the my drive. inventory XX. – the high, Californians out work Supreme But up filled $X.XX of New of the really car is gallon not it good love there headwinds. for into course, in way Of the at was California

think we be fine. going So we're to

for products you I third barrels is to day. where probably XXX here cross global going globally have the story is to a point going if you're look the think million in threshold quarter demand a really

structurally product doesn't side. Hopefully mean bullish we're crude structurally side missing that and bullish we're something. that on we're the So on

Okay. Thank you.

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

Hey, good morning, everyone.

Good morning.

you've Question on new projects PBF announced. that

those of is any to curious scale the if benefit Presumably coming million PBF. $XX that have I'm from projects? sort of from number. PBF You you EBITDA fees quote what that's

from business. third regards to business and new the But PBF, a relatively fees profitability it $XX million, projects. PBF's It's tame. PBF's Tennessee. PBF value is new is as part the result of in acquired of it not is increased customers a exchange third-party and in are it part We party contracts, new of importantly, Yeah, terminal a between PBFX. with

breaking know center and don't this it's if I the project. win-win a PBF the business center. logistics worth is out numbers but is services, it doing companies. new profit is the move specific So on for But a a Energy to a cost definitively is PBFX of This both not that is arm to provide

I thoughts color. RIN's gasoline finding refineries of the smaller the long-term. Okay. seems around like through sort for higher sort getting of of on sort solution. any managing the that nation-wide a the of are this taking It regulatory the like a solution in lot behind octane broader front, Thanks thoughts EPA Any And that? on then, guess these exemptions. things of guess it seems I tact is

around to even centerpiece higher though back the to on main CAFÉ discussions going the is take of but going status. forefront for EPA has compression deal things, you octane overall want automobile trying see in other and fighting high they automobile standards then they're the with of how makers the need driver is meet get to a really reality it solution what the increased out The the who pull the a indicating here. is is octane, and lot The companies to miles engines fight been I'm Matt use Obviously will of those couple Detroit use to high out get to the world a figure is gallon are They've of might a that. standards. a around and engines compression to done bit.

octane You've higher got to have gasoline.

the could be there as be that well like early of game unleaded impacts has in a what a it the be type there looks be discussed legislative term a could putting as solution you lot in fuel that analysis regular and done happens part with know the not out Congress not, are or standard, and certainly repeat. There's some be or for that things today's won't would worked lot make happen of Matt? all went House materializes bills the of type that of to of gasoline through of place, it and an are understand pushed with to some It's of replacing if that fuel. have to XX a Cornyn's will a sure, in of and whether that are to though. solution. a a octane. XX go the it what fuel There's that components but but corollary sure octane John you are to I'll what So where we octane to XX being new entertaining bill we longer

Yeah, the Sundays the concerned at here off and way of of a more longer probably and yeah, lot is, we worth look Tom's just there's now. of that comments, certainly go a month's solution We're term oxygen can in with that.

the of RFS that knowledge deserves rally a Senator raising was as raising around in the awareness broken and Senator is this the program. common Cruz credit temperature last and and more as the and RIN's more but the There game, Cruz. becoming week program game winners nothing it's raising think losers. lot for Washington with I recently a

If think last I – over look four the what's really the RINs directionally of couple at you happened things are helpful. $X.XX months, are that reason they there's to all now $X.XX, that at

the government First, the the on one recognized the RFS bankruptcy putting drivers the company essentially came And upfront program, of RINs. some them. back in and RFS problem. with I for cognizantly fact forgave actually supply them but and The the demand, is the is the saying government with helps and we're think bankruptcy obviously, forgiveness, part into important historical that of was in program key obviously, the that much is and of PES the more filed agreed

refineries like any helpful. program a sort portion been entire insignificant the it's that's It's uncovered XX,XXX to small not about that's waiver refiners, have absolutely waiver. PBF if day, but number it's because Unfortunately, the doesn't incredibly RVO. So the helpful below one. a you're getting talk helpful barrels of Obviously, of is an XX-some you program, when

RIN, which a scarcity prices. is so reducing this And called the directionally commodity you're helpful to of false

has bad on dramatic piece with years, was the third real too is the then from couple actors in program speculators to obligated the but not direct the non-obligated they field. been either take is the going made impacting action no a fourth removing that last limit commodity Tumi, future participating level to RIN trading program doubt the on can distant piece false of doing I work some White EPA sort the hoarding, of with way over The House the would negotiating be RINs, on and this limit parties. on the buyers exploiting out pretty from here and and playing the in the where expect that Pruitt were simply in to the which some of reform now of is adjustments And Cruz that this

worked closely I EPA, the So we're be in all We support we that may a complete of make President with for the can on were we with The a parties. precipice Hill, the decision that. the win-win hopeful and that. of House, that And very with think soon White is

that. to accurate losers PBF largest is closer prices more crazy roller describe obviously So prices, RIN hard bigger to as as coaster with a it. but the of as world beneficiary beneficiaries in of one regards prevail. describe It's of high to ride, RINs, lower ourselves And it's it's RIN the when we to get

program. to continue So the we're optimistic cautiously work and will

everyone. Okay. Appreciate Thanks answer. the detailed

Thank you.

go Please Hi, guys. Gupta - comes Credit Suisse question Suisse. LLC ahead. next Securities Manav Manav Gupta Credit (USA) Our with from

in supply XX% inventory question little average. a demand is going you what's Following down to five-year I'm on PADD there, distillate trying light. on PADD PADD. is distillate on understand from different Gresh's if some inventory up shed Phil and X XX% dynamics year-over-year the over bit could just a down a X

demand from is, I inventories than get for had two world the Northeast, who high. is distillate for do we Northeast, distillate And impact in States in Well, lower push seen GDP overall PADD spring distillate increased live the drilling, around days. in of an the you you the United can weather. high those that while are other we've normal basically certainly think X drivers demand We say fact The disproportionately i.e. yeah, PADDs. the on

kind doing XQ, that PADD But the and little shape headwind bit the they're of price Gupta push that economies question disproportionately So the I'm is more demand across program. cooler portends you good two that which crude is as continue squeeze second or in XQ get we actually overall continued understand LLC do what we story for was and a bit as seeing there distillate tend well here to even world the of the very (USA) kept well. Manav for the remain Credit this low, as looks product Suisse my cracks, environment. And guess, secondary trying long what little board in saw the temperatures - on a last of just even to inventories rising X to Securities quarters? in though

Well, see you're we on. certainly and spot

opportunity type and And such that because If – an have Toledo, see coke, you $XX, have more can't a it's Credit which tale it to whereas reform coke, you can of when product cycle and particularly like going it's Manav it low-value into example, that on it impacts. and so the buys to how goes go Although, for have the a long of go it'll coking example, sell refinery light and the is Gupta of part that products just of will crude could naphtha – look Delaware, they much, you insulated But from to you're stays disproportionately you where goes impacted. down, refineries same. down. actually then - see say, naphtha who two at LLC They the products the and to marketplace, get inelastic octane. somebody obviously you become – percentage sulfur, Suisse that into coke for But those yield, up be extent typical it look Torrance up and you you price them and then (USA) price stories, turns have by much more and of well business refinery high of you naphtha to the sulfur. produce like for of Chalmette guys. Thank Securities

Our question Barclays. ahead. Paul Please go next from comes with Cheng

Hey, guys. Good morning.

Paul. Hey,

Chalmette ship any the Canada you Tom, your down don't commitment I that guys the for or refinery. the Permian Gulf and suspect pipeline Gulf think to from I to down from have to

well. to option East the be in crude, So the the if and order you would WCS the terminal. possible get the of any only Coast, In already the Permian have

also the the Canada do to is actually capacities want and you to what for you So from that today's the East available well Coast? cost going ship? into from Permian And is whether

day, that the and day XX,XXX barrels a between Coast and quarter I heavy second third predominantly the first just Yeah, and barrels into heavy, forward we XX,XXX day of in into that crude regards under going Canadian expect a barrels East was the somewhere increase quarter the a to railed and of XX,XXX Canadian will in beyond. capacities,

months. market months weaker but the it some mitt. the in structurally seasonal the and to there's basis on winter think with a gets aspects up, And there we catcher's strengthens Canadian a will set differential summer business sit crude the where I is in

unloading our to We to the and ability. we're best capacity look of have preeminent exploit a going to

Yeah.

it's add obviously game, look on those whether Well, were or – given to we there's in of the early the I just distressed the us side, for opportunity crudes. to Permian would but an see starting just nature not with

or but we have any spreads anything look that something we're definitive in is right we plans that So it take concrete, to the late don't want given a at. seeing now

has We've business other there. side, And rail partners maybe during and the supply differentiated players got in the some nothing itself I of the changed. we lot the chain. mean, just we from counterparties and early on PBF – were cost that has stayed the along

way material historically from in about. changed what talked haven't costs our we've So

say, to still from talking Coast? So about, East we to $XX are the Alberta $XX

Yeah.

any Permian to that ship much cost? And if may the how from do East it you Coast, idea

game, this It's as way half. started in and Literally week Paul. in early just we too the an the last initiative a

got to work lot do. of So a we've

of they be capacity available even Permian have some though in heard those have a that shipment may but up I not terminal sand do because used availability you for the lot Actually, for oil? shipping

say, having way, and of can Texas and certainly other hinterlands a Canada. people crudes but we're It's while to from the capacity, we're in coming different fair there's in we'll our there's exploit to some But that this involved, big it. refineries, the from there the look conversation, obviously in West railroads extent do to coming hard-working we to market increasing

you there's a guys at And heard with the gentlemen proposing, just curious heard they that if have looked what option option you in if (XX:XX) sulfur XXXX, there's an cost. company believe convert that we directly or private way there's terms of have a could the IMO have the don't and And capital they very efficient about know you a technology. high think is

not would to and it actually the said on heard trying but problem. We've need with that I I've publications wouldn't seen deal to as I've it's I that that We're my knowledge. the at to we least go anything. raise money, some things to cokers converting are say about same We – got not earlier. worry don't the beyond pursuing

commercially So these being that to material a I've that's but to looked we Technology things, don't going seen great viable. is are I ones near real ones anything magnitude. today anywhere pursue produce any at, I've and haven't high the People seen any of sulfur thing.

would I also comment. a make just And

clock the opportunities, those track also. is ticking you As

sure a is attract to markets going done So, the at snap I'm and be in of opportunities, us XXXX pretty a a will nothing can period be on short but time. finger, different of

question? sneak final just I in Can one

ahead. Go

cost quarter you're start talking about what how Chalmette coker region? that in about may also, that? And you. Thank is opportunity guys Do big an have loss by is with estimate on that you that the first the the

and XX,XXX back not The cast publishing of we coker have our about is what we're would that not done had Tom XX,XXX to a a referred to coker day now, barrels system have turnaround. the

you. Thank

Sorry.

ahead. Go Okay.

Neil next Mehta go We'll Sachs. Goldman from you. to Thank

morning, guys. Good Hey.

Neil. morning, Good

Good morning.

picture with of incremental relatively about Can much and do to max? ability a outlined a just run you'd fleet? you to than distillate gasoline. more as of a switch system strong the you Tom, XXXX headroom have talk so picture distillate How the

just a gasoline But upon little bit XX% in and of It can this volume refinery can by look board. and to what distillate terms. you you units. the dependent the across XX% broad shift Typically, at about between around moves

distillate, guess continued right indeed strength see that if in now, across would I so, we system. the And

it XXX,XXX If take rest you we've say day some of those and diesel. a a XXX,XXX here XX% numbers, do gasoline we're barrels, and yield, so somewhere between XX% day at product jet if out, you're and you and XXX,XXX is clean or sitting got barrels the

into can tell the upon There's of And be that barrels, dependent go all or XX will And into streams. we will. do you where can so of are some to maybe still right into go if barrels there's XX,XXX diesel XX,XXX we more to a can't spectrum I now barrels day gasoline. that push that two those that you stuff economics X diesel. in

Yeah. I appreciate that.

characterization, adopted a the your business of picture shareholder have which acquisitions, it peers, for capital growth PBF and a that question company peers orientation capital is into So, keep share future prioritized? a story more a in to allocation around is where thinking guys them has not different capital some building question growth I different some buybacks other The more return that it's or dividend don't than it's agree of is I have priority point yourself orientation turning the strategy about So, know see with big taken value ton are capital you you taken just a some are a that? you right? assets, a return at to of evolve than way. peers. and the in do not strategy. in judgment, understand you if want finding a to low, a Do how

Yeah.

plan to we've I'll just good fix there if that we we were long. refineries you and quite that question. bit isn't upside We have or it's buy Look and that well will had disciplined that had plan. refineries when But can But that will five and that opportunities same how refiner. have widened bought them ask answer acquisition a in their you and still growth plan. more starting And I a growth investment back as believe, and in necessary employed interested you in do clear some it we us to under previous can all a be a were your three it. at out, acquisition the acquire talk cash and now. and there's is capital or if invested business, we benefits company mentioned capital giving company a I bid out And has you're could reasonable flow refineries, earlier. you as a once it Neil, to assets get do you're say, very we'll do good to day we up, that, return our going that, we right were owner a believe obviously to five I that But upside this you by an it's the and price. me think of small that. the point, to in acquire it your out And to not use because things plan friend to unloved you I about the been even and shareholder. on refineries in we necessarily model an The believe, also be had of not the

build projects fence billion We for could hydrocracker organic could two we that's what the for $X refineries line. inside $X or we buy a not interested we're did. billion, So in big

I that we're So we're Erik for couple here pretty will And that We am, to going in at of runway and have well, buy we a be cash. capital. us Then have something. we very history, we're comes we then acquisitive and out, to bought buybacks. allow hopeful mode, of when as back go I the that as look going shares is getting produce to into prudent on significant down shut think amounts already but will a flow years and cash our

look at dividends. will both We

now. – different Our we when we where a were share back a share priced stock. us to were $X.XX paying little appreciation bit has low very gotten a It's

it'll flows. money the after be So, at but that, we'll look

...Matt it's had a call should long the they period way quarter touched cooperates, the should. completely to put up of position some really shaping had cash operating position lined kind spitting major We in us have QX flow Neil, running and in that we've a are less where five not the it, to start out on as had ultimately, here. time all we've Torrance. continued, be this than really multiple good year market as out since where pretty still in a but out and QX been we of projects assets a

great, That's time. Thanks guys. the for

Our Citigroup. go next question will ahead. come from from Please Rao Prashant

questions. my taking for Thanks morning. Good

which First the of – you question just wanted came kept out low operational you've about side turnaround ask, to come is turnarounds. I to a heavy and budget, in you've under talk of I costs XQ impressive. wanted the

these, in of question. back you things are you half about thinking broader the As those future is particularly This forward, here, can sort turnarounds? that of things the what operating a is Are be there we that of as of going in But some you're as through refineries going take through during machine in of learnings lessons fine-tune operations terms of should this there terms or turnarounds? in sort the of year even kind years.

Yeah.

have had we things refineries it's of think the and is. it better network, I them others cultures different some than basically tend you those what some simple. have not through for five things They you that good. all bit refinery and five best things as go call to different of do they refineries all them way a These like what little turnarounds, in when and do Seedorf. speak a very Herman But and itself establish of practices certain do

in the oversees So one going the people best the site that those we've to the through either execution to sites, projects, from now, of ship projects at – and that practices them activities, planning taking in obviously turnarounds the other sites or major and major from in we assist back learnings absolutely as there then been major group turnarounds.

how quickly So there see. are weeds ready the this, can get on but just can to over clear there we unit mechanical of and a be opportunities turned it in that get you you to into terms

business, diligently we're applies a It is question. operational pretty it of that's aspects but lot broad working So the of to on. a really something that

investment, from to better been our we've refinery than you longer that of some City, our of where And base in better it. to system and years. whether prior operating California but Del two got returns, California, don't actually was part regards going refineries for Toledo benefits acquired, Obviously, turnarounds turnarounds and in turnaround. investment those Chalmette, has eight In nearest the we the has turnarounds was case we new but the in Paulsboro on have the done massive than generally obviously otherwise would get a

of there. in And and wasn't at I been and I every you was teams not absolute But we've of experienced those said our learn a got so each we've expertise what at turnaround And – great refineries every turnaround on done. first quarter, cycles the new, it one refineries. like we've full the we, think something demonstrated well job group demonstrated through

helpful. the Thanks. to of wanted some plays sort proceeding before, had on bidirectional the to question, given quarter, a how if wanted I you Good. That's and of the we bi-directional the East in had on updated on on you've sort about thoughts broader an and see judgment, X the – ask and the of sort any just there earlier update this that out. PADD Buckeye that I sort have there, know denial I market, Coast this market but we wanted X picture service impact PADD to Laurel talked pipeline the of get

Yes.

distinction in X logical counter our for now directional, sort on it's to going regards without now they is Pittsburgh, they are I think in short. bad product of view a It's it's and that a merit changed. so deal bidirectional, one lost hasn't PADD the

a bi-directional And Pennsylvania we monitor it, we in people certainly of view clearly see for and being but Pennsylvania as have it's it, so we'll we a don't it, answer don't to the we'll to great But watch interest continue a continue issue. Pennsylvania. vested

Great. up a one capital And turn very credit mentioned over. working facility and some you follow I'll From it just quick Thanks. then Okay. needs. raise

we're we remodelling terms Just of there in be thinking the about of wanted when that putting turnarounds terms back to or anything of in get facility? uses any credit the year specific detail of raised there this half we towards should through back

No.

of really really $X.X result having we billion on oversubscribed is very the commitments. the think were I strong facility.

average facility. of pre LCEs under where so that is payable $XXX an $XXX use Our is, about of use going debt. million it million outstanding to We probably continue incremental

current for the it's see environment So flat definitely oversized we that today. price

maturity. five For time us was due, going extend simply years. coming to it's and was the be It it ultimately extending another to

us for growing the of and to more flexibility us against gives So of hydrocarbon it spike business as potentially, the a importantly, result grow ensure kind prices. to in any

Got it.

Okay. the so it. appreciate Thank time. for you much I

will question from Doug come Thank Bank you. of And America. from our next Leggate

is my for taking questions. Doug. guys. Hi, for Kalei Akamine Thanks This on

First into prices, EPA as translate the could a in cost you one, what have of an to these this estimate RINs give on just the full result the during be? starting Are quarter year. headlines can crack? this of see series come the you so of And obviously from year updated

ludicrous. so the that basic it's transitory gets the RINs broken. way Yeah. program's that whole ludicrous. appear. are is the The The analysis crack. same is in quite the anything honestly, is And market the in idea static in And they

for dramatically affects moved And and cracks sometimes that $X.XX hasn't. month of certain part the had sometime crack the We've have and RINs it areas. in it

time percentage time. or what either errand. a in look, So of portion significant the not crack getting all I into A is some in the fool's the the crack is think

So to push from prices, forward for we we'll RIN lower benefit continue and it.

year, we the going we terms in current again what we directionally now year, volume the I $XXX XXXX. December, for Kalei, experienced least based the know to we in pricing obligation and think lie, on at through be what so of will could where we're And for the think, we of range end see full from knowing million less which than our $XXX million in is make

Great. question Thanks is second differentials. on heavy for that. Canadian My

and rail. caps have an Delaware update hearing run QX? there? impact by So that your you running? are ability do What's obviously to in much How some the on this think Canadian has you And heavy will the

Yeah.

XX,XXX like and into number be and barrels under just going beholding crude. are East to day in barrels XX,XXX just up in I of we I second see I the we delivered the XX,XXX us earlier, quarter. we crude would know under And that quarter, of rail the north expect first to a As said, third Coast. said barrels, ran

system. crudes And so to economic we'll our continue access to most the

Thanks Great. the guys. for answers,

next to Blair Matthew And from Pickering, we'll Holt. go Tudor,

here. guys. morning, for questions Hey. Good taking Thanks my

sides, in on crude ran IMO XX% do slate a little both medium. it's maybe XX% what XXXX, last when your would IMO so that Because know the you little see Just capture you on could on slate, but a so about to was early, run heavy you on changing? kicks an run light Any likely it so PBF the heavier to maybe year thoughts discounts be a heavy PBF foresee and I product crude improve I argument larger lighter yield. overall sour, that?

a is, this a be is view for sulfur here going But are be absolute us that. I have to of is both is, time. with good our what capability the What sulfur. think at it will is The base the we the problem spreads a of to news do problem. function

the X.X or X from X.X. going today, pull is whatever You're

out. high crudes just to crudes So going sulfur, are but with heavy, to sulfur widen high necessarily have with not

And of lower other capability. sulfur on said, we make a bit the can more fuel that said, so make we continued being opportunities as situation believe little is if crude new the that there we running words blend X.X. have we're side. I That heavy In going to by a have a

to make I is going It crude absolutely this. clear that to that – only me would clear not fact is me point it's alternative. be other be to The isn't to going crude on in the

power coker happen. that of feeding, lot of gets see these crude. say have dispositions of as get streams that you been wind alternative optionality industry, if good an when have economics buy we've these obviously go fuel those have don't is, a may that's of that who some to we amount a But things buying down into much have any it one wind as these news but crude. all dirty Toledo going clean that of use fair the and feed about, you're to is depends spreads focused light, can Toledo, because what go actually assets stream that streams up here run it oil, with all to don't going we opposed on to the to we of bantered as a running XXX% bought have type on, It a well ever the directions. to You're you up might heavy People cokers be coker

helpful. turnaround expect you quick, Great. to then XXXX? Very And just real directionally would activity less XXXX be than

Actually be a to think No. the I more. or – likely going it's little wouldn't it's I actually say equal bit

Torrance think anything some that it. do will add activity We will have it's have like higher, anything? don't enormously turnaround Matthew in you we but to had, I

say would it similar just We always manage. will directionally I number. be a No.

directionally capital our guess As similar appropriately, be XXXX. very you We'll our it'll it's Tom manage talked about tightly. to but too earlier, we guidance, manage system give early my a specific to but

you. Thank Great.

JPMorgan. We've from Gresh up at Phil follow

Yes.

the any WCS? quarter follow-ups there One around hedging is, here. two first quick Thanks Sorry. were Erik, in effects taking for

overall half folks an million of end related had We of million, at and the $XX I'd consolidated roughly loss the for QX. highlighted to $XX that net of that say we

So call million, it would which a coming day an that loss the the the price during Matt $X XX,XXX be incremental quarter, into barrels crude $X.X million by actual that again of mentioned. refinery offset on

Right.

made there about. particularly something that thinking side. And a in that or of, as to a is debt were and gross was want shape can that Erik, goes comfortable But to curious the bounce you in from I specific Obviously, follow debt, just you're perspective get there's leverage absolute at mentioned the is make better in net you bit, target threshold leverage on But an for up if quite another moves just you your to around terms EBITDA up. general, some Okay. you the debt a if looking just along certain come you more stage? that M&A the EBITDA

important pro possible. is Inc. down net as I though above is the forma to long-term XX% kind One have be leverage the What always point fixed debt target rating We is for is goal continue that to always want income the stay other going within as pick may Logistics cap, our but to always think agencies we've and of told competitive investors that target to we balance to doing below. consolidate note certain transactions. that, tick sheet. Energy, the to we PBF on PBF do

And finance going structure MLP different the you cap company. would standpoint slightly a than to we're parent the so from

the of are will the think to long-term. want company EBITDA bigger cap. tick MLP I the target incremental ultimately think market for may up, to we've start probably into EBITDA where see we folks we times a I target, translate I X want And to where kind on debt shift X.X but see to the the as EBITDA then going, highlighted parent net sub-XX% X gets EBITDA still point about to times things to stay you is picking your think bit, today the you for don't So really based to times that to total and X times and But coverage. who within debt above MLP,

should that benefit forward. So really going us

you. Okay. Thank

for closing Thank would to our like remarks. you. to speakers And it over I back turn

a very us look of you to you We quarter. joining to This talking have call. at again forward the Nimbley. Everybody is Tom the on end good day. the much for Thank second

anytime. to conference free line everybody your at for participation We'd call. on like Please their disconnect thank to today's feel