PBF Energy (PBF) 31 Jul 202020 Q2 Earnings call transcript

Good day, everyone and welcome to the PBF Energy Second 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 your questions following management’s prepared remarks. It is now my pleasure to turn the floor to Colin Murray of Investor Relations. Sir, you may begin.

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

expectations prior this to change with of net slightly of costs or the to company’s contained included the the a are lower-of-cost-or-market, a on we and Harbor be under are share future quarters, predictions Before from covered in will your the including we the by Martinez release in cause in federal discuss quarter items adjustment, There consisted our $X.XX net hydrogen press second the to by or attention statements with intended XXXX differ increased contained Consistent results connection Special $XXX or in million, those earn-out special in could primarily described benefit severance which it summary, the on inventory LCM direct the of income acquisition, SEC. forward-looking items. laws. our results fair value with which release. the getting of provisions sale workforce. gain press many offset provision included by a per plants excluding our statement in to would In Harbor expectations, call, outlines to actual our Safe of after-tax in results, a reduction the I factors today’s securities started, management’s filings which like express Safe that and statements related

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

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

to cope are thank personal. joining been focus ways and with has call Like operational families PBF’s Thanks, everyone circumstances as on are and many respects we morning, today. Collin. current times all safety, in individuals, our These for Good businesses. you others, finding and trying many our and

established We procedures overseeing response for and that establishing and have is our a sites. workplace safety pandemic protocols team

We continue while to and of a including access daily have recommended resurgence. for enforcing and been those CDC all regions are our to locations that screenings period perform ask exposed health at employees where our employees, the restricting prevent to been in to COVID all for have exposed contractors spread, community facilities has to traveled XX-day quarantine that order those there to

the mask For offices those distancing on us require not basis, in daily the a is we of possible. where social

all guidelines and office of keeping under We environments all are of number our safely all proud overall are the conditions. of circumstances able our office. and we have safely facilities dedicated to especially I our of trying our in am have allowing those that to people bring back we until operating for employees employees been the of to

lot than the U.S. the sheet gasoline The our demand utilization usually goal production The of with major much continued safe accordance by distillate. inventory than better products. to and will maintaining be Refinery still crude cash late past can landscape price the increasing took will low recorded ever over operationally levels only losses of of lowest likely had with end have financially in rates oil we pandemic. balances, were steps towards do. April. Gulf work work due the shifted seen oil look unabated lot was focus the operations, Since for culminating a as months entire the on QX oil recovery distillate, and few done to the Crude we has then, crude up market with to but the range were absorbed. demand in in dropped and balance a hurricanes within unprecedented the just until the addition surplus the was cleaning In during on product yields the Gasoline dropping Utilization energy to more so liquidity. Coast of a rocked system. far stay taken market in balances our mind miraculous preserving but

During In been significantly the the very deploying presented hindsight, We – expenditures. the we we by have in the quarter, have disruption marketplace. were too reduced opportunities conservative. into in measured made cash may

reduced into were and given capital the cash destruction and witnessing we the working facing our have uncertainty incremental deploying society liquidity. However, overall were would demand we

to the draw for more With provide steps update to past are forward. products, low time most was This are moving There of and that, currently inventories take our incentives an and This The to to I moved will work utilization will before more amount for structure demand more a over for importantly crude. it increase. taking significant bit on market happened call and have or is demand need have in values inventory few – operations the has gasoline take to material we product but during increase quarter the for time. point market has rates will that. turn We that are watching a saying The materially materially still quickly rebalancing. term and inventories given the distillate signals the the Matt quite will increase to all through rebalancing we utilization of product rates. relative

Tom. Thanks,

East Mid-Con to to our we response a Coast XX% Overall, Tom aggressive approximately have taken in we the As manage system refining and capacity system seeing utilization. at steps refining ran market lowest conditions. mentioned, of with

unprecedented simply our we on items that this demand Our and those In by be will control. are going have determined time, levels. within focus complete inventory forward utilization

not and basis. steps capital flow to As go cash such, a on we have also project focus expenses necessary the term, initiatives sustainably team the improve to a assembled dedicated to reduce in immediate only but on free forward take

expenses cash operating level unit and capital, improvements, expenses as has optimizations and is to on obvious result to the the East In the of reductions on per regards flow reduced. team denominator generate through reduced level focused expenses, immediate inventory basis to as also West to well on risk the addition in is increasing throughput So incremental barrel regional a as management Coasts. and operating initiatives

XX% of rule costs only of a generally variable or total thumb, As XX% represent operating expenses.

basis which announced savings. million $X.XX barrel. certainly related own approximately in expect gaining now total $XX XX%. year. allowed the across and million we ‘XX expenses we to beyond. effectively $XX been million first non-energy an call, to We to and extend On which Importantly, forward effective per us expense the efficiency on expect savings expenses have our believe system for or related fixed to over million and quarter second company we per the a equate at to reduce of in our these this headcount, steps, were reduce able million normalized has number $XXX has operating our By quarter, included $X.XX throughput a by to reduced savings expected into reduce million these we to streamlining non-energy On $XX $XXX approximately our taking workforce, more to of quarter expect approximately in basis, we total go time goal operating $XXX of we XXXX, by facilities. our and of our savings contractors our reach The

beginning prior areas synergy our On initiate Coast, valid. integration in expected efforts remain we the logistical commercial, acquisition, February. All the for optimization West to we operational,

We advantage have slate crude our increased to scale taken Martinez. our of improve at

We have Martinez for to shifted Torrance refinement blending.

increases costs RAC Our distillate, and gasoline logistics which and decreases increased marketing of refinery team sales margin. has level

able While continue it many With of will in to to to these been liquidity the turn integrate with masked have our operations our to plans of over discuss and Erik our are Coast optimize in environment, anticipation that, and benefits financial we West position. conditions improving. I being market current

negative $X.XX quarter for for million Today, an Thank adjusted consolidated Consolidated and and EBITDA CapEx approximately CapEx refining million CapEx of quarter million. the share Logistics. second million. was loss and $XXX you, PBF Matt. of adjusted reported corporate for The for per PBF includes $XXX $XXX.X $X.X the

year capital expect CapEx million. budget, incur be we reductions As a per roughly to of full $XX our approximately month July $XXX result of million our refining their to CapEx and from onwards should XXXX

our to $XXX We completed sheet. the the in aggressive half We steps second of first year. took Products our secured of of issued sale of million reduce refining during our notes. for quarter $X cost plants have hydrogen balance capital up Air expenditures XX% the structure the We incurred billion X senior shore and to and

increase credit of as billion capacity we Since $X.X on on revolving our since based balance $XXX repaid cash seen than billion facility our rebounded a lows. available Our have borrowing borrowing million in May, is the million April our base facility. revolving credit of asset-backed more $X.X and current commodity $XXX under prices approximately approximately liquidity

since the crude a the primarily significant in beginning swing the market. result experienced have We year, of working volatility of capital unprecedented as

in quarter, During payment quarter normalized we waterborne economic the in any completed be the $XX we working with million approximately capital take quarter. the experienced that a in of headwind conjunction benefit in first This from we the for of Operator, would overall inventory second sourced terms. a was pleased our more capital slight carry This we remarks working as have versus and year. barrels benefit saw resulted we opening outweighed build an typically questions. of shorter the use to

Manav Gupta Suisse. of first Your from [Operator Instructions] question Credit comes

Can guys. hear Hey, me? you

Yes, Manav.

Okay.

to I these hearing you news outlook solved California employees? we operating mean, for will rationalization a know techs California, there on saying Facebook what probably next being bring employees which lower need saying bringing the back Google big margins is keep don’t for items the a actually we a no these the employees, demand all timeline, year. there normalized for second is And time capacity Tom, can for where or in bring to So, think back the bring not of half we do understand is California? problem back is you level? be back what’s this I want is gasoline rates trying actually am with to are where

Francisco Wednesday’s multi-folded. continue to Californians I drive But drive this we EIA to had we actually negative say passes. let cracks going but But the and barrels announcement, very been mainly XX just Frankly, me look impacted XX% as in sub around ways, do XX, where and refiners the question, Google’s across great and yesterday, we and X in what they PADD report, million – a day terrible. know inventories don’t a very, in saw in cracks, the pandemic Coast. we that the many up California at are am sub We cracks in PADD clean when absolutely has San West If also have to of the It’s it are helped and before utilization both their which done and but they certainly country love about closed barrels. April, X $XX you job I XX.X the X, on responded. earnings Angeles. Physical inventory our million Los was sure are has in at have severely look but PADD good

long, be up, So, past gasoline PADD to year is all say not not across whether lows. at or Obviously, my X X in continue long opinion second seasonal a the people happens, third we is is in believe California demand the going assuming refineries. country. function long only have and a it’s a normal very extraordinary That seasons, X.X wave of personal months nothing market. a not It’s creep we way, perhaps. actually is a the or all to lows Typically, but X, passed will there I but that in or PADD is

we think I are haul. So in be the over fine California going to long

the pretty and the a the But quick refinery. the coming at look is And the we Mid-Con, downtime negative Coast out, today the what at neck, as what Chalmette are follow-up than then their Mid-Con but on results a Tom trend, at Tom. but we as case, neck screen, even we margin on weaker never a Mid-Con EBIT are your and was seen one is and expected. capture report were much Mid-Con bigger the during understand did in seeing Gulf they region, there Thanks, seeing was than have gross here that the is a at from are TSX side I when I Toledo. much

expected? Gulf a stronger I little gross coming capture trying margin So is expected just coming than Mid-Con where than driving board understand is in am the variance across this in what’s little and a weaker to Coast

Okay.

think I on I can that. help

of that time, the the Mid-Con the to unit We quarter. for the period up cracker take cat know was be. start first. And the what we consciously chose because a other and marketplace miscellaneous Let’s down obviously first to given didn’t units environment, had we not in really going demand

concerns downtime because referenced comment margins in hindsight ball, in amount done and which So, had of crude, a in that we buy improved did liquidity our and of not a the jump that that was cash we significant was and cheap our I Toledo. probably crystal a We bunch there would of that. the have kind that Mid-Continent. of have If would about

it’s Chalmette only effect. crude refinery have helped differential Now, the the a crude Chalmette really when us a you to reasonably the did on frankly, that and good crude differential that shift It’s margin side. had diff.

had to units today, is in They have still be. We more improved. where than have are we our look the margins system much there. they Midwest was Toledo As need the the we down. work competitive not when to it do But

my you questions. much Thank for so taking

Reid Fargo. Roger Wells from of is question next Your

Hey, thank morning, guys. you. Good

morning, Good Roger.

as $XXX run from you if And moving parts so any to having the about, question on spread an into the could I are you lot to of was up what hear how say as think XXXX, we from what then OpEx you the you pay I to part that’s kind you assume dogs where talked should in And that transaction? that in in it now hydrogen? probably Is the of for guidance makes my of back have million cost of got Quick barking that for OpEx side, since around, million hydrogen about why. the you work like minute, costs some sale meaning reconciliation for crack are about And this us plants if $XXX is ongoing coming the or the a we of the that we sounds something wondering of do built earlier? think and here.

savings $XXX not We will XXXX. exceed am that that to are last have we million. sure what the guided to that of of million. that to of what was expense in in I comments I consisted non-energy referring to was million $XXX said And savings Roger. million $XXX million we million $XXX precisely quarter about Okay, $XXX in $XXX you that regards related increased from operating

position. hydrogen we hand-in-hand. are out better need annual basis. us in expect we as the CapEx We down as In forward, our of in quarter in and well plants, $XXX regards reductions steps on above this for year that a those an – entered on comments significant had and with costs to the sure immediate In pandemic so basis expenses a going was have going We million what the get liquidity forward, and I two per to are million this numbers coming which and it increasing are to would $XX said the came XXXX. be our go $XXX that that a that million competitive expenses We the cost regard we on incremental will call can we million, pandemic. be we $XXX from this took make actually

to working those not So, of improve our accessing because hard only costs it. business but to beyond offset very incremental actually capital, has we that are

embedded position are those think us more in So I the not cost plants flow but the we that did, steps free with or the company the company. the costs selling taking, only generate position bond even certainly absorb increased we cash offering to to hydrogen from will our

the $XXX guess operating press $XXX said reduction release. Well, million, was to the made it’s progress expense the expense Okay. remains reason achieve goal million. you asking It the I I reductions of about in savings,

about but back to I – was million that’s doesn’t were that there. the So the numbers that is to to it if I know talking timeframe $XXX help the you $XXX trying the a million, to for versus maybe it’s million, I you from $XXX $XXX don’t trying can That’s different us reconcile what am up sound get CapEx. includes million the and like that’s what million $XXX

make to to trying understood point here? So, point just sure B A I

Colin. Roger, is hey, this

$XXX call, our expense on reductions about of Sorry, million kind includes as that QX reduction we quarter which a talked in first also in put the that total is the dividends. we well as savings, salary the

of a now including our have for OpEx operating talking numbers combined that’s cash was more increased So expectations savings, about the with than $XXX kind Matt million that expenses.

now million million. in the was million, the a that’s we to way Okay, so here. $XXX If embedded $XXX $XXX savings to about add the think that million as $XXX the

Correct.

the your July better, any across gasoline, something awesome. is if and now you look then guess, last maybe terms sort diesel could QX if have jet what to more think the be I as give we to seen Okay, get of the just look let’s you you great in rate that back it, in to last call what day well? about And regions would exit breakdown regional of in various of would of things as fuel, us operational,

on, are first close remains X. one Well, all only to and for on certainly, everything terms that it starting get where to frankly X distillate that X-year from in X, band levels. I were, band where we pretty X, have but inventory alluded improved They yet above we PADDs the is getting the the of within PADD X to of matter that even the are average question the but the

Demand started seen What distillate day report a that’s had million we well. that it’s shut demand idled units trough. the lows Wednesday’s are we moving cracker improvements have has been a Paulsboro in Jet actually back fair but very trough. cracker cat and Obviously impaired week seen, much been was as We the on seeing up. up moving increased the a a amount. after during PADDs. up the down the have obviously from gasoline cat up started The is barrels of huge back X.X has about we all of at have on other average last X.X The Toledo amount completely we number started has remains incrementally up up that four it

all we below We have this slightly and train be but continue light tunnel are will and have But creep upward one us is look so correct is the I X the in industry know, gasoline with almost going is abundance a a the not the frankly the of disciplined on need at have demand we we barrel. XX% that I to coast, increased in regionally. as capacity we and and and it and think right about gold now, continue and good we help is to the see do market that watch we end very to sure itself very PADD at do don’t the exists closely. that because creep to ability have export that now. the are of the to we we the cash that in that utilization most a clear worry make We countries

We importer a into are still country. on net the gasoline

third have PADD, quarter some exports that that is very forward, the they see and going exports situation in and both are are least the inventories and distillate Latin right. of I the forecast the high prognosticators America in you will improve distillate very good further help into will at as should increase. high pretty We PADD all read X, And the in and on gasoline

appreciate you. it. I Great, Thank

Rao of Citigroup. from is next question Prashant Your

second Gulf to And been been that those for Tom on see to in the you even intermediate comments though much what utilization we in the within Gulf Hi, good margins move to part all of in sort can and globally for see like that acid taking if have back we more to start seen term. particularly broader historically, segue can idling. also sort if I become both the where of be start of need would start that Maybe crude come think or kind get sort question. below think to dependent should – you we normal of normalized in Coast that runs start into range, closures the margins go asset we I normalized? question I upon closures there think get to and any commentary should or do is to Thanks that on have XXs, there from some has the demand levels of the that sense morning. Sort or of system see to, to capture on we to seeing support sort makes can surprises a Coast, of be will if the U.S. there. and helpful how the

how Some some either that units assets down. or, the crude marketed are major being of

giving any So going through would experience your helpful? color be there, cycles

Yes, absolutely.

I agree In terms that. of would margin, yes,

be rate little bent making not that then industry would you things where break I utilization are draining – XX%, yet, spread a a large are that you that. going bit, and or utilization over obviously, we say, seeing are by you quite kind not utilization assuming of to Well, where While necessary there is allows are function those would if got but equilibrate, up get but the close, we the can a – I be cash, when money. to well, even back you is yes, or of it differential, crack you think getting a certainly you be to capture say give a and crude to the rate,

the United know. been it. has think have it’s what I be shuttered to good industry barrels in – don’t look business a and about that look XXX,XXX insane. of day But personally been capacity there I be and One So you And level? – are place. disciplined will high States, today, of in has But cracks almost to you rationalization, at still that terms where that’s $X speaking convinced to a to there That’s rationalization a I again, can’t permanent have take the completely. we at utilization if here. very a this way has am on

PES. maybe that some that temporary, permanent, of that included of in I maybe Some

XXX,XXX or XXX,XXX permanent day. barrels and that’s So, we one know that is a

shutdown know, advance has to August I Calcasieu are say in temporarily. this, I As they announced that X going can’t apologize so on you

that going to – and down fuels – You we – will Cheyenne what have refineries Marathon watch are indicated know what operation And change plant into plant them don’t a – from couple the has we on a their HollyFrontier has they bio-fuels. long-term of turn there continued to there XXX,XXX at be in is or is barrels And shuttered day the probably Europe. temporarily next to that’s going rationalization. is I longevity or come more Similarly, that there XXX,XXX of year on a least capacity over but is, think been two.

in back margins As over pandemic moment, TI than for $X for up United have Coast have to been better X effectively a in you The or $X than just $X months. are $X a last Europe. got the the period States in on and really negative to the better margins been the it Gulf Singapore X Europe bad Singapore the basis margins when zero

So, other the of I that in money less that means we think is where there is States but cat than globe, are are a shows parts we still competitive United the it advantage losing just refining advantaged. unfortunately,

Alright. some flow quick have that the a the And think from asset related then the the on you “normalized on asset be think costs it to in and And down. integration the into have quarter in-house dipped utilization the system. months. could you of generation” there for cash were I Any integrated got West sort once on or now Martinez, follow-up through you cycle had that where Coast just update several

you when crude asset of opportunistic, difficult all environment runs assuming those integrating that, the might that of sense. be might because the am have were sort has be might made Some and I not

we or two, the of cadence of this half at one, more of now. then flow cycle flow So just I can the kind or the cash generation, cash asset under city a in cash that the utilization looking how of the kind as improvement, get was bit and think What of a West look maybe to of back trying the more closely what, from versus about we short-terms? through Coast year, both rest hood generation sense

plan plan coordination tomorrow with flexibility, the plan its X we as of and of combination on know for about strength, thought everything what refinery. in Now, about months Torrance its its has and the terms we reconfirmed the the

believe bought of cash $XXX on when the million. declined as generate be $XXX of at in not was least said a we West system on of that has view $XXX there generation for our a Coast, we we what excess able Certainly, basis we and year place would result the So, million, mid-cycle next $XX incremental from a expect thought to running we to can the ‘XX. still we be run-rate will generate million that million EBITDA

the just people have and able the tremendously everything thought. impressed So, about the And we been the we of about is known we steel, people the by there asset strong refinery have have not capabilities as by as demonstrate we the been to it.

I will over. Okay, thank you morning. turn very much for this Gentlemen, it the time

of Bank will Doug of We next America. to Leggate Instructions] move [Operator

everyone. barking, well hope that happens I the the dogs apologies background. Hi, good everybody same will in guys. doing make I if morning for is

far? rip talked has you what to we Just to coming And be and light this? logical the about How question you did balance want and do leveraging you can balance little in think sheet, forward where would resetting of about sheet be level? go so I get everything the about assuming guess bit of on the see out just your talk sheet been the a a we as recovery balance do de

we always cash right secured free I path then dollar most flow. quite frankly, board, billion incremental bond increasing side insurance path the deal across And on the have the demand the Doug, policy. viewed recent now is to think coming an seeing as

piece paper be a provision would it’s a And for X X-year years. no of with the so plan call

clearly at a delivering at level, utilization way ultimately throughput, incremental regular goal generating the well, have consolidated ultimately we incremental that’s in us a I ultimately off assuming than balance years. less think goal I been gets of which our logistics to is and cash the level Inc. is glide as PBF where the demand think flow. increased X it Energy recovery, the point That to sheet PBF down but path comes

let Okay. war they guys directed day. barrels that one you I enormous a on question let that of it just other an you the part spread. I heavy the Saudi amount obviously me But towards price was are on try knock-on When may volume trajectory. with one is if the their other a effect at of launched one least right Well, me relatively U.S. assumes asked

So, outflow on confirm just terms perhaps the wondering the or of believe how to on you I whether the is and imports U.S.? heavy impact us can if you through you in head dynamics walk now am differentials see done

Doug, million I of crude from today from market. roughly mean, is year not are barrels it’s year on Tom. sitting the here which high production level Yes, a a XX about oil on with, we

are OPEC+, that which sitting with of And to million is three million X market. medium remainder incremental be back the X that to range U.S. heavy and the two primarily is the going that to recovers coming from to the of comes of is and market OPEC would the barrels, so in as roughly be and that there out We barrel that leaving

guys. Thanks much. so Appreciate your time

Stanley. Your from Benny is next question Wong Morgan of

for taking morning, my Thanks. question. Thanks Good everyone.

like any market up, perspective seems embedded there in your seasonal the public get that kind Just trending the your factors in inventory, been wanted where how from of update terms to levels resilient of and sense you it could data is there? what to is of coming from there building strength be. kind in on wanted If demand export the are an seeing have and get just demand

improvement earlier, quarter. third but exports But earlier, important demand over Gulf see, a is by extent appear up an for distillates Latin particularly grade demand From the think pay mentioned as up quarter barrels my third I clearing less to forecast see mechanism. little XXX,XXX not whether over be before what do not, that’s the nicely we is above the as see the held has on expect we said versus that’s Coast, because it’s And I both distillate the export third as America to at The on the is are day in it a been gasoline. demand America quarter gasoline though will second down locking quarter. is the in that and or indicated were appropriate we Latin they is exports in that improvement does countries the I

certainly There export just at for it Coast. much activity is the So country, on will parts not the of basis. in that Gulf leave other an I

we think most importantly and a last on back net of and see we distillate both gasoline of the get for to will gasoline were I as having So, strengthening country year. be exporter

DAPL. Right. have this My month thoughts. around really for it. seen is appreciate Line a headlines really X we second of Thanks barrage of risk We and obviously question those

of those you kind around of impact in perspective options of to mitigating speak lines operations guys the flexibility wanted either your your terms extended of and shutdown maybe have potential to would and get the to Just and them? bring

heard Energy first Well, everything we operating for to that we safely. operating they Transfers, of be hope we have pipelines from be all, continuing Enbridge say are and believe and the will

condition. that operating. I the in is So, no shutting indicated see Line good and we X further the earlier making operating up week is this progress of country they to to vital that Enbridge were understand, in half other reason trying get for that infrastructure down

Now, is in get ways also is Enbridge path. indicated though, that believe Toledo shutdown, – earnings show to that our pipelines as for be is obviously to refinery Quebec don’t call. down, is indeed path. but in They A in Line of are an shut there would to in if going X that some moves refineries barrels. path. looking there I us that impact were lot at pipeline significant those there much

closely. We heard that, much we but to of that watch have haven’t will

regards that and it’s Appeals obviously going shutdown be that Court before and decision be DAPL, if but to line going I don’t to were be was think As believed that meant by to an again Bakken it’s the significantly shutdown, to But parts made would weaken Coast East a obviously create by the we judges. the and probably of the would and country. other opportunity likely see to rail differentials Bakken indeed,

Thanks, Tom. Appreciate it.

Your Phil JPMorgan. of Gresh next question from is

shale commentary things. the coming the side around just Hey, barrels to get the follow-up I of the sour to back and good actually market morning. your on view on to wanted

return production. have in U.S. increase of not curtailments, but We an seen overall crude

a what Is moving we U.S. forward? what normal crude how new you it out? you things playing back sweet and in do for slide view So out that your this are things differentials Is this widen means see could now? seeing think of do side or

things question, couple in of this think important look a I Tom, terms Phil, at. it’s to of

markets talking here starting As OPEC ultimately terms probably then rates see what the the as are are lot into correspond the is sit don’t U.S., say oil rig say relates as it a it the out. ultimately, wider surprise with it we of the narrow which and seen shale discussion of of which the the can and more also point have today specifically for in light I marketplace, on it’s will heavy into have driven is a weakness. to differential, – they And to past versus come there differentials overall on when and we light be heavy could decline got And conviction clearly by is light terms probably the I felt which of versus being that we driven think trajectory almost aren’t translates of the The demand. the right be – flat strength we in are will can the terms in that about today equation to in being count. probably back we I coming the think you I opposed are to could think coming to of by September, August strong in DUCs on demand side moving some more sour market, heavy we changes of back

Right.

on we into being markets, sounds dynamic Tom, a optimistic are would one we crash slip we coming? that, trying you the get then into that back gasoline, the on then little of given and think more dynamic gasoline, soft inventories? but lot whole this do current bit to but as winter also do commentary reduce of just how utilization September needing I you And fairly follow-up and have you like moving start a spreads grade product It up, seasonal interesting. be Okay, into in to summer have guess feeds that

Yes, it’s good question.

to opinion, is all engines turn of the the are gasoline looking and as fully at certain amount hot have economic into of middle put in if considerations make of sudden went will you real ends in put pool, you yield of crack to gasoline there ends the is guess are going the don’t fact, into have you the either put going just to the or suspicion the down. own have a to assessments elsewhere. are pool gasoline goes improving starts make also I increasing everybody is say, over not the you it just depth winter. light all in on is world. like going or and a to that be else if all a everything we some to whether and My economics my the that have going guess internally. My have are to the this light you We in of debated or that butanes But the

down. gasoline the may have past. going to hunkering the vacations you strength the back people plane level you in ends that in are going go fact not there on some before that Don’t be same see didn’t some Everybody’s pool. days back of an the going light combination I travel, me new wrong. post time with may think the period you go the on of actually on a normal for into not is the not It’s labor more had all summer Because that not some the so to for in summer. gasoline didn’t you go economics that upgrade see it same and are not We get to in to be to okay. get season But people may

that working when do on second year dynamic continue cash you play reversal referencing, going see out just to expect be some perspective? for to from the to that the we that quickly, hold and very approach how Erik, it. the of this are a capital you got half is Okay, might

see is back, only terms June. dated if having of happened reversal back of I April onetime that capital would way we barrels rail I extended shifted payment have to potentially capital what see easy terms back X million then can it’s really a think now just think that Overall, it working of the positive working in say offset in. million be shorter payment level guide the It we could crude felt comfortable coming as payment a dated out in and there comes that terms X shift would about by way in phenomenon. terms roughly to excluding barrels to We reversal and will about very But by increased terms. we of May of be the shorter a normalized is

Okay, great. Thanks a lot

is Neil from Goldman Mehta Sachs. question Next of

morning guidance shake I spending, for Good where think there? Thanks be team. about would is you question XXXX guess capital the the will around there time. uncertainty taking early of that first as a recognizing kind out, is any level helpful,

CapEx we what to we be actually significantly below in said XXXX to expect Yes, we what expect be. ‘XX

is million so thought market $XXX so becomes remain be I to worse, what which react to expect ‘XX the it, million world be to to but the $XXX the be, range, ‘XX be the grow. pandemic in extent to below would $XXX agile creep what that to adjusted have And million going to we normalized, the to we where would extent in down. to would gets was may the that And continues that and it there CapEx

So market XXXX think then ‘XX we to we the to said, we at are we for react business is what that are was will originally going be below in, our continuously, risk managing where I will significantly and the marketplace but plan time. be, we like capital the thought

Thanks, Matt.

into you $XXX are pull the that, to case, the what to two a so sales, Are cash as that you. extent there million up monetization any levers have base lower So that the on? follow-up asset that business. pull you to can other million to $XXX there you strengthen than the products to part helped have, Thank some are is sheet? the the further balance you around And follow your levers

refinery, you The makes it continuously a a and you to get yes, in just that. to I answer hydrating will going when to second are to allocate of risks you and managing certainly are play going terms clearly are different we But and part where what the in sense running equipment terms there of address capital utilization do. can things know into is now. that is question that don’t in

a something And so today, would ‘XX where our done it. basis. have capital that it manage. of it’s a out We that going daily didn’t into successfully to be engineers we pay on we plan we lot actively figure what anticipate but is That’s

Thanks.

question Jason Cowen. next Gabelman from Your is of

is line Your open.

morning. Good

Good morning.

could for rebound that utilization. into of and back environment utilization a increase country I could wanted XX% get It demand? Are we the new about or see an limit to fully ways like and you could you limit seems alone doesn’t. refinery jet even that ask diesel return to kind exploring diesel utilization to match go a gasoline to to above if operationally continue normal demand profile you how potential up and to high do natural to gasoline where

That’s a great question.

it on me just give Let though. backdrop little a

jet will able to to to to We we that jet XX% that low were X%. taking the all in which very take to response did we frankly that got it do was we distillate yield, the either what precipitous during a the to to to steps the as as jet able what jet down, XX%, capability to XX%, or more our saw continue industry do, to gasoline, a pandemic drop of utilization heating the got industry normal And and you You convert our by But oil were was able we in the do. between, ULSD, have typically demand, lot but gasoline. because runs we somewhere low. down production in

hydro-cracking What into forward. but both able also. the predominantly spare cat fuel the into spare but wind the up to leads and were turn crude flexibility from we had to continue utilization to we was going capacity. that cracking going all and are that first because we target, had this jet we you we it cat Not cracks, only ways put was that actually So, jet but question, units able into additional think to jet we be to to will we downstream having And do gasoline, low, your continue learn gasoline and find then distillate. capacity,

to significantly in where jet believe from is up demand from today. utilization So, where able up a it will get – depressed today and it do environment, we demand get we is be a even

that be convinced that you industry, the that ability full. a not units or but flexibility am than are your to jet we run ceiling higher demand have And that be a jet chance later those units you And utilization, to of it to this going running today. unit, you when to are would sooner full you in much or going referenced, those coming get I will spare. I crackers if If it on that it there then just good are hydrocrackers, feedstocks cat relatively could is However, put where is running which are is good gasoline your would are that where off is out don’t utilization of be it today, because with point. the margins, at that, contain some oil because crude

creating new into That’s you is appreciate your maybe intermediates going. any demand core investments kind world clearly of have of that in And how changing you really business that And growing the right Great, that, where or your thanks. outside seems are am the like views pandemic on I refining a maybe of process of it of to kind differing you kind I exploring future? is chance if better think now verticals then tangentially helpful. color. wondering the

Yes.

$X cash our de-levering just me have focused before, as we the That our through normalcy laid be level of we billion you on strategy that pandemic, company. that back told Erik let goal much and number I very generating did. just to getting one get and debt some obviously clear First to everybody of think is then and all, is out and the hoping is target of

There the of were up. actually feel prioritization vein. Cracks We looking generate Utilization I us at in pandemic go wider, the queue need get is cash, company something that in Demand up The some Shell that in plans same Martinez for However, manner. the was and to calls, terms along Delaware the the to in with talked, demand. other after there been City, and on gave portfolio the do opportunities go and prior back have we up. I diversify the then is an area. at you think renewables is diffs previous goes do everything. that de-lever I opportunity looking we have you and that, we have the do to some

Thank clear. Very you. Great.

& question Matthew final Holt. is Your of Blair Tudor, Pickering from

Hey, good morning, Tom.

retail extra do and from the $X.XX gross low think not to at accurate? it’s in position environment fair at and this your in faced you that is looking looking margin Just or merchant some demand you West QX, say of Coast headwinds that lack that

up. depending And negative of to X.XX are when almost cracks gasoline the Tosco we the think were I have which K, retail prices retail think – crashing accurate. the mentioned was negative certainly and fan April, double-digit massively our gasoline going X.XX the upon of am actually I a of it’s to back necessarily in but I – X was when I that month looking that’s at, my as when of the a XX you we benefited a immediate days had factor about have And days. period $X. for a during some I lacks own for to clearly never spot – been region Circle down time of competitors and Tosco California trough, period to obviously, the it was both candidly, in got

type refiner for were an us [ph] retail versus emerging a with MPC. that was factor of dealing So, a being having from tailwind we merchant crack negative not that or certainly Valero and

Got Thank there. you. it. I leave will it

you. Thank

over happy remarks. question-and-answer concludes call Tom would today. for That I to for to return closing session Nimbley be our the

very Thank better look Everybody much We better you. or news our you quarter. having for forward third on much. to Thank call. joining healthy. the call stay a hopefully Thanks for be you safe,

This second does quarter conference PBF call and earnings the webcast. conclude Energy XXXX

a good You may now have Everyone, day. disconnect.