PBF Energy (PBF) 15 May 202020 Q1 Earnings call transcript

Good day, everyone and welcome to the PBF Energy First Quarter 2020 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 questions following management’s prepared remarks. [Operator Instructions]

It is now my pleasure to turn the floor to Mr. Colin Murray of Investor Relations. begin. may you Sir,

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

press of In or our Before release the or federal by contained contained in securities statements including in statement described expectations, results the that Safe getting started, with to under Harbor call, statements this the I’d on management’s are that like There press be and to actual many summary, factors those release. SEC. which direct we future covered are in company’s filings outlines forward-looking laws. could our the provisions your predictions attention from to the Safe the it differ Harbor cause today’s express intended expectations to

excluding discuss Consistent with our results prior will quarters, our special we items.

first tax For the notes in consisting lower-of-cost-or-market change adjustments, quarter, million of and to extinguishment X% or redemption LCM cost tax, adjustment the net change of debt which and related earnings connection out per share. due offset after $XXX in our the income agreement net acquisition, decreased reported non-cash, the liability receivable, the is in a were the which of by Martinez provision XXXX value a with fair this in partially earn included in total

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

system included of refinery in are of today's to February XXXX. non-GAAP today’s appropriate the information provided release coast the provided with as X, tables our now please in consolidated of figure, supplemental the refer to measures results west in Martinez reconciliations the For press included our release. Also, press supplemental GAAP

new If call. contract presentation, Relations you about any please or questions after have information this Investor the

the over to turn call Tom. now I’ll

start wherever from our inconsequential for to working. thank you everyone seemed XXXX. Results you morning, challenging call Good for the and Collin. first the may Thanks, somewhat joining quarter be given

all our individuals, own of communities impacts the sets are necessary circumstances experience, lives as pandemic. in and we face the companies of of the navigate COVID-XX manage to We families, unique the our as measures daily

refining the Through of our COVID-XX logistics commercial have operations, we our and business destruction effects on hand. seen demand first

of bottomed response other As has destruction. PBF XX% number for of taken protect at gasoline stay-at-home from and early a aggressive estimate year's in from for result pressures well. as level the virus we to around a pandemic, business down the demand resulting down nationwide with last steps In April impacts demand to of the orders, demand products the our

our reduced significantly remainder for the We of XXXX. capital expenditures

of million expenditures. XXXX million have near-term to safety, represents XX% announced minimalize capital to $XXX explore our reduction of satisfy required opportunities We a environmental increased planned initial capital to all decrease regulatory CapEx. in We while to in on $XXX continuing further original aggregate our commitments guidance. and an reduction to March This intend

lowered We opportunities number by salary approximately million. $XX primarily temporary We by million, of balance sheet. other We the dividend, support our in target savings. suspended non-represented to to $XX workforce quarter our will for continue each corporate areas which and quarterly cash preserve and million to have more through operating lower for XXXX approximately overhead XX% corporate a expenses of our $XXX than expenses identified over reductions

other cash liquidity optimization the Martinez, Torrance we through and five refineries Delaware at evaluate proceeds various continue and located City in $XXX million hydrogen our plants flow we to of and And options. sale generated cash

finally, offering. week we And raised bond billion $X through last a successful

savings than XXXX. million $XXX measures in expected Our cost reduction total more projected amount to in

in temporary, are these but of should benefits. measures long-term result Some

to unprecedented headwinds We we steps of impact the are other facing. counter taking these are the and

into XX%. to the XXX,XXX XXXX approximately by a in now runs reduced run be XXX,XXX have day to a through to context, approximately we barrels we refineries coming March, we expect our put expected and into XXX,XXX late Since day To barrels that range.

will operations our conditions. depending market We improves expect regionally to range demand in be until upon and adjust that we

system, of our the configuration to balance facilities, idle flexibility to complexity back our with and the our refining scale we units Across demand. production and prevailing operations due to have certain

are appear a in the company responding only We market competitors be the conditions our not fashion. market facing and these similar to to

shutdown are conditions domestically have companies and low with supply shutdown of aligning a Atlantic and sector harder whole as responded refining a decision done basin more shutdown facilities margins. facilities Two to take some the seeing been to and in result high We The also the completely refineries. as has good demand. product costs several a market of have the job

We actions a ensure to we assumptions trials are necessary emerge to the from taking complexity matters. fully that and we company our stronger remain all that these committed base

diverse remain with geographically and strong the to of have effects the asset base will a the economy. it our Many future. uncertainties impact complex pandemic to Our respect has with and stable a build and on provide had lasting us platform

that signs priority. and of returning our it top in employees measure as some as we and our demand the community we the states that in these and trying our safety hydrocarbons times, bottom always recovery remains have the are their Even partners is certainly appears hit a paths. manage From perspective, health individual seeing some

reliable We environmentally in a will fashion. and our operate safe, continue assets to responsible

to to financial Now, I'll discuss current and position. Erik turn the liquidity our call over

Tom. you, Thank

which CapEx EBITDA an of for million. figures quarter $X.X the $X.XX expenses. of and Today, was CapEx first excludes transaction PBF and per $X for consolidated million the adjusted $XXX These share include loss approximately $XX.X quarter PBF reported approximately corporate CapEx and acquisition The million, of negative Consolidated adjusted million for includes refinery. related the Martinez for the of with the refining connection logistics. in amounts paid $XXX

expect reductions our the per the we million roughly to incur through the of result CapEx capital XXXX a $XX of from of As budget, May month end to year.

five we reductions, We of hydrogen million and executed to cost $XXX last senior million to X issued plants notes secured two for $XXX Air Products of the strategic the to boost billion week. of liquidity. sale transactions addition In completed

our these was and logistics, When billion $XXX our million capacity after transactions, with combined borrowing As under facility. on consolidated effects billion. PBF $X.X liquidity more asset-backed of $XXX cash $X May available estimated liquidity X, of credit revolving of our million our additional than XXXX, to approximately giving is based

improve our Assuming increases. relatively prices in and base constant, to credit remain liquidity normalize borrowing expect current commodity we our continues May working facility to capital revolving as

opening take Operator, questions. our pleased and be we'll we've any completed remarks to

Fargo. we Certainly. And will [Operator go to Instructions] Roger Wells Reid with first

can hear certainly, everybody morning. Hopefully, me? Hey, good

We hear Yes you. can Roger.

good. Okay

just Erik if billion the to in we written in followup never release so $XXX the comments, issued later what's after your back secured presume giving revolving I there think was could that a quick all of on did debt if debt? us paid the we thing million press you know, at - with the or should work-from-home content May, effects really $X liquidity that look we

billion is were a numbers cash an or think about we're of working working payable then trapped I hand, that that, capital this mean, billion at receivable, looking accounts lower, I'm just we guessing what I'm on most kind trying point? capital accounts since moving in a at the components the of reported to within inventory less understand we as add than And how $X $X.X you were?

the pre-transactions of $XXX.X it call Roger, and you proceeds think then as May take roughly getting to X, the the, billion, so $X cash how were after the expenses. all balance the was I closer of $X fees That's million balanced net $XXX million billion. to we're

bond deal, from the $XXX the $X billion incremental plus plus call it, under cash availability of the So our ABL. the

side, capital Okay, thanks. the moving That's there? all right, then helpful. working the on parts And

biggest capital. the is Yes, on the piece working

there the We of do long system declined, did see payables of carry, course anywhere from working we about is typically lag X American payments a capital. crude we're quarter, as clearly During we paying we the are weeks of move through to when think cash out North there. like the X prices essentially terms,

priced a month in paid paying ultimately will the barrels, for price we month March. flat that of we basically example during the the during So that declining of April, what of see half we barrels for environment we're

you flips the to prices $XX, start month per will barrel a goes ultimately month, have $XX other when it way. So start moves lag you as Then to rebound, and see over there.

we capital net We So receivables we of and from anywhere things, to are position. in worth carry hydrocarbon of the where payables a because side XX worth days of that's XX believe days working probably payables. related XX

price when environment flat flips So increasing an way. other the everything back

see back will the cash We start to system. into come

an should be think it when a we on as or it month on price prices to of the think March compute And we're they XX XX of should just versus in trying of average were where as we as a that, effect? where quick might June as clarification

involved a science run basis. for another and doing, of think for we're right, to amount probably significant I buy about way prices, it's on three to buy you're a three about we using end there's it, crude whatever not do ultimately easiest over months crude, think will to is we CMA to or some will easiest the But CMA way specific CMA is most depending month crude may easiest way of though individual the it that going for The up, prices is month though again economic then on it. because months. fluctuations the because think There whether what

demand the you improvement West East got mentioned us have would and And April, creep market to some go certainly the maybe of markets. indicators then back the like it of over which just, weaker starting to parts to signs thanks. Okay, Coast great, more the other could Coast Tom, two some of low I show exposure if been than back you but you into looks

there with was there? is us I So curious help of if kind anything incrementally just

this track Yes, obviously we diligently.

is at, pad-X look and was is from XX% down at down take XX% as to or last was you was year's trough, said, nationwide XX%, down XX%, close down XX%, If I pad-X down levels. gasoline XX%, pad-X a the pad-X

level I you last pads set year's that look the we're XXXX.X barrels million XX% of a reported all from day in if at reported numbers EIAs. from last had, the Now last now up down

only year. I been And the moved XX% little bit Pad-X pad-X loss less to is of in slower last XX% now regions. more Pad-X to and have last now opening actually improvements a again, area apparently traffic obviously say XX country the of pronounced were down X, and in year than only the shouldn’t is XX%, XX%. only, And has has on a California. in There than up lot more other is XX% lag this XX%. X, in to the most rebounded pad-X and to from

you. great, thank Okay,

We Credit Suisse. next to go will Gupta Manoj with

capture big a capture was were there if broader turnaround understand was Hey little weaker And and margin question gross reason guys. expected sharpest. the than was has demand the only there the the just a that is weaker Toledo, I to we because factors Mid-Continent? gasoline a was which understand little of margin I'm first is, understand on question gross recovered some My trying other or Mid-Continent that the and

In of high fact some should as be indicating as are people normalized XX% levels. to XX% it

other versus you XQ plan into run some harder to of do So Toledo the assets?

Okay, parts to there's three question. your

Toledo a had that down the to bring being efficiency we the rate a some was little turnaround. we execute not all, by ready three needing and and to decided Toledo we tired planned but unit the the that of accelerated of actually on in getting [indiscernible] we basically but was had capture a it the fact mechanical it unit I'm turnaround weeks impacted so than - of problems we First had by rest. the earlier turnaround, and to was impacted there the boilers some number because had only candidly

double-digit a we cracker makes negative completed well, said at we gasoline. and not the were to sitting cat gas we turnaround, that the Then bringing there up time this when is be cracks looking

it So and and had turnaround than for. was weeks we couple been expected a down of fact a prolonged that longer in than much more planned so unit – we has what really

going very what quite are you Second saying. diligent. to there, part, are be strong are but get you as Hopefully, we not seeing I had that the very, as demand will are numbers and increase we

let's refiners did improvement else seeing did jet. gas up, do, Holy am the and We what to what thing unmake Grail, distillate our not are and it when unmake run. looking to I just say everybody not ramp to is everybody horses we expects This is it going there across at that gasoline do is, cracks over. in and let's

in channeled a we're we careful also fuel that being we've [ph] inventory We cut distillate knob into jet significantly, turned prudent. runs go and and but and manner not the building not distillate are at is distillate very as actually GD that looking we gasoline forward something is

in a likely a running we've anymore we up maybe day but we couple thousand So gotten we be waterline. until start won't more crude, will crude the above SEC [ph] of the that barrels candidly see Toledo

have because then when Torrance, Yes, thanks you about performing is Tom. you followup, for A up quick of am I that it expectations? quarter, this little a question initially your had needed to for you work, now kind it you thought more initially acquired [indiscernible]. asking a maintenance

a expected So to is which in you delivered? asset Thank in condition an Martinez be you. it

Actually is so class from not that is we workforce. are and first tell we far, the it the absent facility I that it first in fact we situation the is from blows. oil when situation. margin It the good [indiscernible] really and took is you, buy first confident the are, class February very we X, a case they class over troubled we side, these that It will and a pandemic. Torrance asset, obviously I said the not bought am we folks in thought would those assets, inherited impact

Thank for you, so taking may questions. much

Prashant We will next Rao go Citi. with to

the a would this X on followup offering know private to with debt right? the ratio quite debt to $XXX besides be a – the behalf like your is like billion want should I maintaining capital that I net Joe million some So major books what be like morning, revolver? of of are up just to Good just covenants like wanted aware Prashant. we bit, on on of issuance

high a From a was this note secured issuance. know yield you -

So covenant to to going abide different under that moving in assets of need perspective, that simply of are anything a terms out incurrence do we security. event in by or types need from from there to tests the the we're do

covenants. So, other than really no that, there's incremental

has from our existing I under of real assets. receive increase stayed ABL place. the total have yield think covenants total with ABL We with we notes. that perspective, covenant to secured no debt an there are But our the XX% did the in dealing to amendment capacity covenants financial a high

back drivers like, you the completing guidance like origin the little versus for you. changed gears on $XXX your million your Okay. XXXX expectation. turnarounds or a for views Thank CapEx Switching to elaborate little cash bit also that is on your deal? a since CapEx, the bit another have for your needed Could Martinez and

that turnaround turnarounds, pushing additional for XXXX - unit are into predominantly The a out on from CapEx scheduled was a that in is Torrance. driver reaction that the crude are and XXXX reduction turnaround but turnarounds was was being some turnaround the done work we that Delaware and pre-spend

Martinez. couldn't So they what rebalance, XXXX I turnarounds. from move XXXX try That's I'm now you out, will, of at sorry, going can to get out looking the smooth to question to way pushed we second and curve. XXXX we're everything your have by part out push into our else on handle the to been we if the And

turnarounds or Martinez the the completing needed acquisition? changed since asset views for cash the Have on your like for

at all. No, not

all, thank you. Not at

to with Barclays. Chen next Theresa go will We

to just on of West possibly there's comments Good about a outlook and evolution perpetual do the you Coast? follow and being you LA on follow question, in up by officials, to the Francisco under California how government wanted until would think of there. if your morning. In think and lockdown to things demand made relating the cure suit San recent relation light I

took was has the trough look – sure. tell as I down California recovered the it stacks, rather demand can at said, the to XX% not may you It if I we plateauing, XX%. Well, you we’re are nicely. and at it now that be down, increase facts seen gasoline have seeing are We

at last year's XX% level. it��s of So

expect there, depends quickly which - see to. it to goes politician it's on to California tough actually it As how from we follow to because listen you

that's supervisor the saying is said, up open it jurisdictions and out Governor okay. have LA, County said, not but the come closed to you said, came has I I who willing for LA and county the The months one to is was local what be going she Mayor then some health guess the and no he's have out that in three think things, who

things that at our we're what that, frankly, be recover the going will So that politicians open some it going is is, continuing the states view is are as and always to risk as But will just the to to be. do California the of rest be country up.

under months, pretty then wild ride both of Got on in and to do of it. for water, of how And a out and storage this past you the part, and and shutting it’s been all and quarters I domestically next Tom, clearly globally. mean couple side, due – now see and with couple XXXX? production differential in in key it's hubs over the the playing

forward, us is you get logical mean anchored where sort back path your what any there differentials to, economics In of to of transportation, guess, by has and think sort are do again, environment mind, normalized for I happen quality? to some I

I the question. reacting the to That's that saying, in We're never has I things everybody. by to start react a we've had to obvious will volatility great to think before. been marketplace

it the a sudden of of lot been a with All it lot of negative derivatives might wind of price a was up a storage or on that minus And the thing. you related, $XX was. box this length a and whatever have TI

Brent demand, is over you And – rebalancing But A is it's the of see get in as that's that at our to lot make, the between starts look Marz five the you versus blown trend of the that a market where just you distorted that – but if process the is ultimately but daily that we'll is up believe a a put take of side your can of if and a states market of belief opening LOS, start lot ICE rebalancing. back to Brent. to days on process doesn’t crude actually A bucks, pickup all is, in couple as out in the and crude, we and a its we selling six and the differentials. storage. spread

being But story incremental is is the and go obviously, up the plus. on that occasion, OPEC, crude the should that it of one inside ultimately, bringing think improves, why will here [indiscernible] a we this utilization wind then not mediums some you'll I OPEC the will the from I be crude that demand, that? is, do learn about has can and backed and marketplace products the I'm find its way are it demand into we've say back I the value no as cut and will, It's we say crude up of refinery. really being really by system seen out of things unless what side, likely sure

refinery The into takes only to and refinery value and is products way crude you it it the nation that if and the world turns get the has a needs. it

a than And confident in to but we I of as demand and quarter long second it moving longer after in get normal, trends kit, that, of process take be suspect bit little So be remain recovering. will the direction. to is a going – to until situation some it ultimately complex no, right How the we'll normal, normal, not that seem the more the can't do rewarded. may certainly there we're type return is normal more but that with say our to going take? I

you. Thank

America. Bank with Leggate Doug of to next go We’ll

lot obviously we terms you levers an for how that extended I'm with can taken me good second. bolster of you steps of of by position in your as you what everybody. a And wonder morning, Erik, I to your liquidity cash do the through excuse take what curious pull, the if for walked cash, up if a Roger. I of expect you to a Thanks, just just weakness could with are have here way demand, burn? you ended period cash you you question back planning see

cost over back use the the just of we it, next reset lower and is pretty priorities obviously you're for wondering get some out us to debt What about feel just years just the I'm there's how free please? I'm would there? be get several onerous. because a your through to and cash if that point, try if of walk trying when at flexibility thinking for

on was, from assets, in perspective, other we're point a probably Doug is demand need the I different where you I then need we of say going front to So, our Do any sustained believe evaluate. have to burn companies questions, lose if and than refining end there cash issue, no that your would were we money. we a would to operating perspective idle zero

it So end what the from when we of through think year. costs to system, about maintain actually our the May

roughly of probably right have million million call $XXX CapEx push an We'll we've turnarounds portion to we a month. not what include of That to our that's $XXX per so million done $XX incremental does incur of reducing is CapEx turnaround. need that it ultimately terms out essentially is burn

that's biggest have that levers from So overall of reduction a you the one standpoint. CapEx

think per on then assets, reduce some So assets but right? terms per numbers. any in ultimately, of expensive on In idle were do to to shutdown Coast versus scenario, more refineries operate, plant. are $X our million costs month million roughly a general a $XX operating the to million probably of Clearly, legacy a average, I operate our spending expenses. out on you're some CapEx, plants, average, month bit of $XX the you those West

if we're inventory? intermediation there sense make have with draconian do have We that true And million you about carry idle asset. We with to inventory time, that something it thinking a agreement XX then an do point levers also what We an at with Aron. in do frankly, quite with do scenario. I J. inventory. of think associated are any you you inventory barrels evaluate think Does XX to if

to various point of cars seeing road. see other so racks. going probably seeing run We're shoots see Not we all demand. We're the are we're starting starting and are to here. direction more our think on green though, more across this at barrels much rebound, the I we but

things prior see at So direction. are recovery to we think where back get other to we reopen, states pandemic. believe But not I related point, we're ultimately, start I shoots to I the go to as to this green do planning and were starting think the to

a you've this scenarios, with the but to enough it’s at through know steps think one to taken tricky bottom I point line done the navigate navigate you this? you've

do, We absolutely.

You interest necessary hit year head. is on did the extremely plus for nail lightly. was expense the us. of just absolutely is incremental What we step a that million take a we dollars The prudent XX not something that

we've I our we our for think do. talked everyone about we business as expect else industry in cash run - to

we I – structure. levers our have back different during call frankly, goal these quite was, end that sales cost that reducing is usual. our the clearly as business But And go ultimately view point really and flow are asset we generate so at the no think cash back at of our can pulled away we free March and to notes we month the get this of two-year, to enough period for

on think I optimized as that there result mentioned we front end, Tom things of more cost believe be variety term business longer these a of the will our reductions. are a

permanent them of we will temporary, quite of Some but to as those going forward. are some frankly, be go be

worth we extremely right liquidity of on that's business a to is, optimize this to us. go that think $X a so clear billion is need gives And way important to the And today do. I forward our something we basis, we and now the view runway have feel us

you curious forgive demand’s But on been this. distillate already, But to question me well. floated that has question lengthy the me the let like and because a I'm float appreciate obviously I and talked what about but seeing I'm pointed out more, my answer. to side little bit going gasoline the out Erik you're preface as just Tom

whereas As our that recovering? flatlining, we mass us can data on, it for the to get like look things seems seems gasoline hands transit at be demand example no to all we that is

globally So importantly, in we're the third-party freight but on same here, things a holding better behavioral It out seems of the seeing just well. use the bit some we're figure that U.S. to consultants up side. change as more that not a we little but there are trying actually

So the or you sort segregate demand get how terms down in a different different between – the I little more see detail could products. of of if wonder in trends you for

So I tricky, color know could but bit appreciated? offer any you it's be a would

certainly, was obviously draconian And is a same. and in look with that the down itself, demand that and impact when something production immediate jet that – be at XX% actually would fuel. you down we the or Doug and start or most take jet area if is

those we to a most demand obviously part do to There anytime soon. don't Europe on jet a on to back to come plane roaring reticence So expect people going be get some is take likely and the things. of vacation and

with day. refineries make jet were low expecting make a have into our jet production, But the to only the We're we gotten within actually terrific supply-demand even to with curve in have thing we XXXX jet that we PBF, $XX,XXX we've was we on environment. basically and jet is, small basically down the a And about what amounts. demand done job in and just reduced

to going we're inventory think have don't we issue. So an

day and industry the that went it gasoline up million the a a turning got curves. gasoline in on distillate, The within week come - gasoline to day to to X.X barrels same under production move we're worked and exists per demand was then course cuts jet and crept control there that to and was up. we stats, last and whole runs million is everybody knobs the to $X.X supply-demand from continuing to about the one and because of we've gasoline the the talked because and Now, ourselves gasoline. then story first, we And

to one of going a I'm your part gasoline And moment. come a think question of your to, back on I in questions,

distillate. jet up. is in turn of and increased starting cracker into into it distillate that cracking obviously we and reverse distillate to to We're I is gasoline. gasoline which actually step a mean, Now is and steps holding that fuel by cat it taking a but distillate, production we’re putting some

Gulf to driven the export distillate America it as pandemic the pretty is continues hold because on being better. up that And Not out the increasing though the demand gasoline now saw we're the mainly that the to of into the to and runs, we shifting being South hard. from does we're side Coast fact distillate That what hitting being barrels South by ability to product little concerned America just impacted. appear distillate United is States said, is

on question are – believe yes to get not I behavioral vacations. to to on headwind even going be subways. going going terms be on on of willing we going and tailwinds think likely There's in to there's going your bus. get lot the ship that cruise some an may are going to And not of Uber. to not They're particularly because be not get to decide take airplane. They people going They're gasoline, shifts, who people that a to not on I'm go a

of automobile. safest The own form is that my have to drive transportation I

fact, it in with family probably it's I member. In want car to a drive only unless the me

to have a some occur. some have we of bit think think from upside significant an potential for gasoline written I or I that that could the little perhaps So of there's a analysts upside and

with go Capital will next RBC We Brad to Markets. Heffern

an everyone. to earlier I CapEx. back morning, Hey, about wanted good go answer to

XXXX or So about into some deferring of you the expenditures turnaround talked XXXX.

an be sort the significantly picture number I pushed of get sort level? the stays of turnaround whole system $XXX the Post out the should million. you ultimately sort or it of recovery, would for talked we million to than past, of larger think like to that $XXX and in CapEx about expect average annual

of some how can that long And up end impact question, you of also on reliability? these sort at before talk having you you then sort spend can levels about think within you

Good million question extent. issue the we in work XXXX spend first part short already to We'll $XXX to have is, will how are we a – question. the that that – CapEx to to answer starting our of and to is large range. $XXX do the The million the get on that to CapEx continue rate expectation a

bumping optionality We don't year. any to We do turnarounds. turnarounds in given have too on out many like the

the reasons, have case, out They're that the smooth of would lumping it certainly you amount throughput be to in lose. we base obvious but for like

going total certainly expectation XXXX we the the just the $XX by already commitment an we that's on looking fit. So manage cut million CapEx increase CapEx that at we’ll XXX. is We've that. that spend or and this beyond basically we're handle to made we're can have a said We not

But million spent because on a the is that already over was turnaround. money fact spent of a that $XXX that lot we the biggest in We thing. Toledo Toledo

maybe we So sure, the add range year things but we suspicious. and of even to million we end back, some somewhat $XX recovery see significant the and for then I'm until really might are something faster a sustain then unless the going

and we the to of it's some end is unsafe that it said, finally point, down the continue your earlier in Toledo ultimately a At question correct. we'll or all was in high to be a the where it run where and of unit I mentioned it's – turnarounds into get likely we an us defer unit run won't Well, condition. will shutdown. because could we time the turnaround area, situation percentage in to talking And most turnarounds, have to if take

then we're - expect levels, year, range to again, of don't think anyway at there going there right the to back the we But that right to go stay now these talked I and you about. that rest and we're

thank I about the with complicated Okay, contango on contango, know be it's whether profitability. question And it capture then for a waterborne to can that. possible you barrels just

it color how but would can in it of than the So, Thanks. assume at system? some anymore you through walk I got looks Toledo, you that?

wonderful. Toledo we before. at in what's probably the the anywhere have that had look near is area, If only system probably take the of contango don't a last couple so happened days, we we is the Yes but

– that being So as a is take We kind going that an it huge steps the that we’re have going I to effect wouldn't going to think just as at try of to comes. focus take market we're to area.

Phil We'll go next to JP Gresh Morgan. with

morning. of good couple yes, Hi A for questions Erik.

EBITDA like look see? these after then rate decisions any on type Act to of the expense, all would there? expect sale, First, benefit run made? lost hydrogen And the CARES you've and with new the just interest situation plant that finally what is then would tax you'd be the there And what

anticipate of through a still tax not components result in order. those various material we point, reverse CARES as we're do coming take this we’ll Act, At but the the having Phil, of CARES from So standpoint us a combing Act. anything at

team pretty has Our tax been to-date. efficient

we have we to in again carry back able hydrogen the believe that don't anything plant. be will So we terms of

we did So receive $XXX of million dollars proceeds. gross

be be be the where be is is to every Coast. West because between are. going million probably, ultimately of will Incremental line. bulk that split the year obviously call way Coast will, the Easy that will will those it that's $XX incremental and $XX will assets about And think the it's will to to East EBITDA those Coast, about the above that basically ultimately million the EBITDA West that XX%, hit simply costs, hit costs

So go they will EBITDA forward a reduce on basis.

And on I then basis. a interest our think for interest general run from consolidated standpoint, expense expense an current rate

we going logistics So that this issuance be roughly We or billion. to new million it’s to back portion of of we outstanding, were $XX sorry, $XXX do incremental a that that clearly range. did I'm the everything $XXX this $X expense then the and includes million includes all notes notes billion January. $X That PBF interest probably the million in did X% is at just in redeemed

notes. the expense expense it have redeemed So and interest will for no to those we from has that interest then incremental cover two new includes issuances reduced the the longer

last there's K question specifically factor Okay, already again maybe did Tom. just great more a for just light-heavy I differentials, but on night. thanks. tighten know question And then differentials. be second will the on Pemex

OPEC to do the see further a kind about little it's just Thanks. on cuts more back, how versus little guess, near-term little term? that? starting bit coming of barrels more OPEC talking the I out You're bit elaboration things a bit you a in just kick but intermediate of in with So of playing timing

significantly, their sortie Asia to the competitive. [ph] in right here Maya focus to certainly trying was in protect appear has even – The Yes, be longer on be seen interested with the and less we've it's now. in moved barrels U.S. no mortgage the European markets there

situation and lack which tough with Canada, for those right So the business now, - WCS we you've demand. folks is course, in are then of seeing, a given got that's the of

you're in So I cases But picks some we've said until that fundamentals. seen and of think completely we'll being get And demand a to these differentials and earlier, in function not as distorted. I that's clear back the significantly narrow fundamentals. ultimately, run And diffs. have and have we'll capability lighter, sweeter we tighter to and that, up, to diffs, going do actually if to react it's to then the going we'll probably crude in more that. we're if light-heavy And to want economical

in until demand up And when situation I going picks increase that then see picks don't demand production. to a think you're and remain up, domestic will rapid

be needed to lie incremental time. that incremental going that's The be period to supply fact, barrel heavy barrel medium demand some on In of will at consequences differentials. those directionally in the is going some will that and be to

thank okay, Interesting, you.

Cheng We will go Scotiabank. next to with Paul

Hey guys, good morning.

Paul. Good morning,

Good morning.

are or some projects sheet looking the So at the how point run how going There way that your your project terms how the M&A, run experience, you each at at in sending? that you're to that and point if this have going so that the whether you're that just answers from how in changed Ascension are how short looking is business of your is questions, balance after you're operation, at may of they hopefully to pandemic highest? a two - number is it’s one. be Tom,

great a Paul. question, That's

the our we looking out things First that is about. imagine. interesting yes at for And steps would just take and we We've of steps out of invention. I'll aggressive I example. of that hey, all, is been the runs had one But say – decrease areas the get than in throughput to to we're necessity ever talked actually and very of our all mother like that already we've point able down lower would

The the in have people crackers Martinez, on cat safe people the reduced Chalmette the minimums in in facilities. operating those

we dislocations, gone, the a are our are a demand or tools if disposal. situation pandemic get now margins is some So we where get some there that we good fine, into and but at is we've have situation got where if into good other

at on to basically turned to second the instead stage continue capitalize think into overall or down turned and those going Taunton a turned to high crackers Martinez machines to There's actually other number be them to to of in down continue able we're efficiency. gasoline machines. that steps improve [indiscernible] We've we our and of shut and

But having think side, a an balance was acquisition operation project Martinez very have X. acquisition As were the we like and look in to that I clear we is through we the M&A now side and deck focus just layer us for second Pad felt important that is here that. had and to further since balance ever, to up on done we've is, than let it's our the on acquisition, focus Erik some comment and sheet now delevering I'll more

firm It that near I point a this no what of as level. the went – for to to at is, we pandemic. term I phases is think not going are in the with lose of first that's absolutely this continuing just the beginning through before there as a only margin running gross this money result and cash, just we it ultimately is have business believe we operate case, the I that believers mentioned business seen

activity there first saw untenable, similar from ultimately, refining XXXX, ultimately of we will responses margin a the quarter sector when be also, the become point reach in we But in where the that market.

be standpoint there things. help I demand it forward, we so, clearly things our us – we the side match do think do we And mechanically, from can of are ultimately go some that as will how ultimately

volume here. having managing a but scale we more a ultimately really do we of of about six combination advantage just a we believe so are And optimization. business also talked a mechanical time are standpoint profitability to this little of of with distillate, refineries, us there's is on delever. sheer take this But gasoline us business the for economies attractive versus If for bit go a can forward operational There a changes, some again, or we of now basis. getting that to lot is things from

what And Paul, said. I just to Erik add just something

your – in margin margins good watch XXXX distillate and happened up banking And three gasoline fact capture well, to out, what to what running quarter the we and occur does oftentimes very as it to the selling that had going business, what before, build started said and of fourth on going you're fourth at to I've those look you does, is cranking you your running try you're there industry are not take the And months If the enormously through XXXX. you're really situation, quarter. but the if you're get product.

later sooner not You're building product, an or and are inventory, you your cost is that you getting for time. to cash big going

makes this to be of watching carefully watching very as it very run said, money. at to to make look cognizant run now we're not build and reinforce what it inventory sense to me and Erik going no now even we're right we So just or and

it's of the key and money there, not learnings a one reasonable gets it really only I way So I throttle the industry you at can back. make that sell think if is products hope price the and is oil your you

other into is gasoline to between that to everyone products? attitude. I flexibility is problem is have is reasonable push there gasoline. is distillate And the any that that take we get into going back done, can same also products that jet to And that - fuel I that some really if some we Tom those distillate, hope those to have push I mean factorability light outside diesel. know everything flexibility we The products light

yes, distillate the push problem. now may we concern so but you're Because, to mean become gasoline a trying that's I a it have I case, gasoline, mean to back if

one is or that, overall is low? to to only So yes there other option the we any need maintain one the be option

because someone thought. Very got discovered. into jet of can again, around flexibilities good year lot say whether is we've jet into that we you you additional recover, know. we think if we've as quality We’ve run before some crackers, into hydro distillate And fuel be well this sulfur to a limits, that you actually a are only so it gasoline given put takes can question. much or flash, or There fuel

use we wanted to turn the could hydro into we fuel But to, we if actually jet crackers think gasoline.

the if later, tanks full. it or particularly try to doesn't, production the jet jet pretty on So there, and sooner doesn't the and back industry example, are limits, be runs. but increasing jet of flexibility some a go balance could ultimately if because for there's take the and constraint issue, demand in on provide and to If and demand it let's I'll increase

have impact we've into exhausted wanted indeed I and take ability utilization. to you're because a limit, your and building, it it fuel then constraint we going is if remains think to distillate runs can distillate you So the have and jet to on quality and will turn distillate how increase long quickly

refinery, Yes, then at thank questions on least McKinsey horrible for can one side finance you. and good factory was the you Erik, in quite the was have two I margin of a yes had couple March. the three runs quick that first weeks

all first so question? anyway said that's money at quarter finally first the you the we’ll make So in

to the up about up show the in talk hydrogen, the million, margin going of going [indiscernible] achieved And progress EBITDA in and up showing finally, in gross target rate is you the first OpEx. run $XX is you to the the year? quarter any million the show or $XXX is that have when does then throughout is impact of Second, $XX how the the savings, to million them

were these the Let's probably and third all reverse million take of quarter. going Paul. savings second, during fourth be is in to Again, $XXX those The order recognized first more quarter. announced

reductions, as start So see in benefits to it's And assume but to start go. it's we to the see a bit that starting for let's with going we geared going second And ultimately the towards it those associated now, more be quarter. to we'll probably you're take were rateable. to generally steps

a end back for weighted probably more it's bit year. the However,

the full will so through will we terms gross we're provide In quarter point, this or a earnings the we operating but more some here, be of plant the line, that that above At expense, call. and ultimately second the EBITDA in we’ll some of be next be it hydrogen captured? costs for versus working where margin issues quarter included know quarter will do have color still accounting as it

we've been given was that a on doing ultimately, And has never around California I seen market from a think what is basis. detail when clearly, the but refinery there. the daily or volatile standpoint we've better guidance is what has absolutely bit money in market a each out But Martinez Martinez look, specific made

So though, will I Martinez the assume, that Coast West see you of the think P&L. directionally that you consolidated should benefit numbers, ultimately hitting

Holt. to Pickering next & go Tudor, ahead. Please Matthew Blair We'll with go

headed to extremely you of on glad for a paper on at looks touched all reports U.S. everyone. discs to I'm and like Saudi it sound delivered here. morning, good quite least few you the Tom, hear briefly safe there's cargoes and are May favorable. OPEC Hey, were

could is wondering of So, quarter this? ramp you second give here? numbers we're Saudi the on to barrels idea the us you just and part looking so, any Are if PBF in

let crude what whole out bunch war and say motives we’re the put played effectively for a price of give with by Russia on they the and you put their that time would but and Well, ago, exactly specific months K crude shale, me back factors several ask the indicating they were that be a on have to of and to water. of numbers, the you'll somewhat attractive, were. Saudis maybe a get has period to some going just going strange. water them did And the not this made is a been to go way There was obviously into decision after

was we crude. it running have with obviously lose a them we in were We run – contract [indiscernible] and

the what I maybe some said work it right sudden, in to they decided which called month phenomenon are Saudi barrels is because I But that had not So a fact way as of that OPEC at priced benefits earlier, had the attractively do as now they of plus, as one almost situation And one And there. that through as in all fast was had you went very came. then the we pandemic. as look away almost. something we

say wait to all that's have side going to we're out is how can I and this, going to really So see and demand that. the lead on have of

here. DOE domestic a exports distillate demand you little up And better? to to U.S. that contrast see hoping be Latin mentioned we're moment I starting to bit holding overall just impacted. that in America, good. data in current versus which at can you demand could the also We Tom, sounds the just then export is start Okay, was

think demand the because the it last versus than was seeing in fact of say U.S. even Well, distillate. the on on holding barrels, gasoline we weren't both I That's gasoline X clearing we less into the is we were coming actually, significantly X out were export America. stats. think million we up on barrels South than a certainly market but and exports is, areas. are barrels importer actually of that, net a PAD other And million or less we I And

impacted demand in showing we by they're Europe pandemic as seen we're than as you And in tremendously though that the barrel you but some in pretty demand if see as the impacted distillate the that to export by apparently now and wave disruptions, for shoots, up. becoming is even more green And We're seeing much lower is US has way U.S. South directly South and there, and what been the attributable significantly you it it. will moving seeing the has stabilized being U.S. America. some opening the definitely recovery impacted

for the insights. thanks Great,

next to Gabelman Jason Cowen. go We'll with

your margin morning. wanted reacting refineries typically the improvements. the on not comments I good just and way to react margin ask Hey, outlook to about

signal rates? in the manner to of to higher to the do the a of don't industry give you guys to way in terms they you margins expect historically? in you up that they rest are So PBF, to watching, And ramp what the same be have that watching respond

slack gets stay economic of weakness, out seen because point kind capacity. of you've And subdued refining kind margins, of this at you've periods had the of global that

And so refiners and margins have improvements ramped that's margin first up sign kind of the of depressed. at

differently playing time see you out So that around? do this

think you're variable in hope because existence you fixed as I And going look you and so. said on the incremental incremental earlier, just storing you barrel it industry. that. what you do inventories. We you've you tank trace your because economics look lower to and We're cost already is covered doing barrel up a I of at, that assure of refining predicates look an the sure will you bane margins wind at costs. a at demand, I well

there's it better – going base going by asked for? as good running our we systemic, and go – building But doesn't question want something are that we we stable So to so when that you somebody to will, margins what we're throughput. – improve ahead do kills inventories, killing And a if increase do just headed we golden mantra are if improve, that think that then to are creating vice really the gasoline that's and that goose, and if to to don't distillate then kill you or make versa. to mean

states pandemic everybody think yet. right to this open first look on now okay the of up starting the of has things I One I that not think out country. we're is everybody's and it's to in mind at We're

if this these second but right forecasting don't So a takes see things, it can we a I in can't a And don't do if repeat and certainly open wave. who even we we up certainly see is little hope know country, don't while, we it.

But a see want we're have going virus. with lingering to to problem we that and obviously hope not the

I speak who the only industry to will only the the question I speak follow? this an we for rest while and As point. independents can the would of important of think is do

If in over you at X day then barrels fourth look and CDI, you Poly just Valero you refiner. take a others. MPC, And there the look largest of and XX, independent a take when a we're capacity Delek, PBF million if P at throw its

are We country. the crude not a sustainable to increase the throughput competitors run. and they tempered They're capacity, to are their any And by capacity majority sure and going that have recovery very demand before making in swallow that a far the is our of going in they acknowledged calls be recognized in bait.

little that the confident I So, respond in I'm more manner. typically bit will am industry than correct a perhaps the

an for to maybe improving liquidity insight. on maybe that working And capital of remain appreciate the the can or if us prices prices I Thanks. magnitude just if improvement liquidity you stable? – indication cue of here you the benefit continue that comments stay around give

math math this take the The under just quick crude million prices. times barrels product XX is whatever average easy ABL roughly availability and

XXX we crude XX% products the against for just rate million to press in average price release and today in $XX advance for we get had pointed ultimately and example, So per we assumed barrel, that. the that on call roughly

result significant ultimately dollar will availability, So move a our which ultimately, obviously in swing pretty every of in increases upward terms liquidity.

Super, thanks.

We will Neil Sachs. go Goldman Mehta next to with

recognize volume impacts Tom, price of in U.S. terms the is question here, now, structural some you also we're or profile Hey, seeing your of I I'll on supplies. Can comments thoughts outlook first in but be which and made over on that your shape levels talk is quick. so we're about flat are at could the production guys you production think U.S. time oil that profile. the that what you just production return?

depends on to a are resume. Saudis course, resuming may expert difficult everything the we've an ones West not read, of problem the it Coast. Canadians more but have easiest for I'm production side, Well, the The

gets Some – be be if and what could it the up $XX we've From believe is if demand recovers $XX to difficult. prices that more read could shut-in of and level. get into

this and Then That is be to there it's or domestic, or being sustained structural incentive said, I whether will think economic production, if be Neil. foreign some Canadian. increase it

back incremental than that, the barrels million if if that. to – crude get to we and all anybody there's demand the chasing XXX the it's to anybody production understand all say business. business is things about less – the doesn't that realized if think if I the going hasn't problem dollar apply if And of refining level, I

trying their that's let the they're capture going be to a so share. don't already up and Russians market way to to way plus. position. It's the to do And They're everybody got to and told try a the and I ahead they've defend caught States OPEC with going in United what see Saudis, that go are

content barrels million not but XX XX. of that so produced the So they XX may shale, be million, U.S.

will up wars. they're that defend some going price no go And be to to efforts of back because into type

they're participate impacts back, much that As at don't course, obviously in is it that get to shale more domestic us learned few the that be shale of good crude of we can economic. we very most and quite of mediums we production a we still cut going our to And hands heavies all. on. plenty run. There's a crude And if that there's for crudes at can us get

its you XX see of up So up we're barrels think get not to going I produced U.S. structural have exported is and water it export day no world around pipeline. change happening. I can going so that new longer exported offshore the a problem, the ports a And being to do to just that's million be a build don't world. the around being or and XX, production but

Okay, is have thanks, us to result Tom. bring we easy? get Do offline online on situation if back precedent or assets. the there refiners to system idled will related full potentially will ramp to it you for to it back utilization a or the to is where hard think supply being capacity? assets refining is capacity And to structurally taken do in U.S. is that going for question relatively that And idle side into be now. U.S. How XX% is right corollary the in

industry always characterized idled right to They structural the been a to demonstrated back – I come precedence Well, is that now in as assets there's certainly dead don't result this bring have going from the This to see idle refineries that think back. zombies. going again, has because you're change.

The just kind – sequential. second it's throttle other okay? your question, of back to part the you've of If part

cat easy it running, then your operating to to pretty relatively back bring to be going but all shutdown back minimums, going throttle we the to like case done, we have to hybrid, FCCs in then two everything system, a we've save up you them quickly. it's they're units If operating you crackers. the in do all we're we've got safe minimums, If and got said, can

crackers we after we in and So the cat Paulsboro. we up Toledo shut the to turnaround, started shut

little In they time keeping refinery back it that will up. materially to but but take a it trying them idle problematical refineries not those up, the little kept get back being longer your case to warm, you're bit a bring back. more even warm where take They're or is longer, though come more to can it will

So there a case make this some the is, may see rationalization I that other business. what be now in have question we'll to can

in States of Saudi and cetera. and And Middle kit, and strongest has Asia the East United world the the the the et large by refineries, exception with Reliance, the

in don't competitively if But some even come going pressure be should to have that we back had So levels indeed, to North the before. America be refineries are demand are we that we under advantaged. there

so Tom. you much thank Okay,

All right.

are questions. There no further

turn for remarks. closing Tom I'll to So it Nimbley any back

thank very healthy everybody. forward you stay care you next families Well, hope call we'll look of safe, much, take quarter. and your more to I optimistic and

program. conclude participation appreciate your you today's We does now This disconnect. and may