PBF Energy(PBF) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents PBF Energy Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, along with notes on significant accounting policies and events Condensed Consolidated Balance Sheets Total assets increased to $12.98 billion by June 30, 2025, driven by higher inventories and long-term debt, while total equity decreased to $5.22 billion Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $4,765.8 | $4,543.9 | | Total Assets | $12,980.4 | $12,703.2 | | Total Current Liabilities | $3,631.6 | $3,626.1 | | Long-term Debt | $2,390.2 | $1,457.3 | | Total Liabilities | $7,764.1 | $7,024.6 | | Total Equity | $5,216.3 | $5,678.6 | | Total Liabilities and Equity | $12,980.4 | $12,703.2 | Condensed Consolidated Statements of Operations The company reported a Q2 2025 net loss of $5.4 million, an improvement from Q2 2024, largely due to insurance recoveries, while the six-month period saw a $411.3 million net loss compared to prior year net income Statement of Operations Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $7,475.3 | $8,736.1 | $14,541.7 | $17,381.7 | | Income (loss) from operations | $43.0 | $(74.6) | $(468.2) | $70.5 | | Net income (loss) | $(5.4) | $(66.0) | $(411.3) | $41.5 | | Net income (loss) attributable to PBF Energy Inc. stockholders | $(5.2) | $(65.2) | $(407.0) | $41.4 | | Diluted Net income (loss) per share | $(0.05) | $(0.56) | $(3.58) | $0.33 | - A significant event impacting the Q2 and H1 2025 results was a gain on insurance recoveries of $189.0 million related to the Martinez refinery fire[25] Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $470.3 million for H1 2025, a reversal from prior year, with financing activities providing $896.2 million primarily from new debt, leading to a $54.6 million net increase in cash Cash Flow Summary for Six Months Ended June 30 (in millions) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(470.3) | $441.1 | | Net cash used in investing activities | $(371.3) | $(617.6) | | Net cash provided by (used in) financing activities | $896.2 | $(239.8) | | Net change in cash and cash equivalents | $54.6 | $(416.3) | | Cash and cash equivalents, end of period | $590.7 | $1,367.2 | - Financing activities in H1 2025 were driven by $788.5 million in proceeds from new 9.875% Senior Notes and net revolver borrowings of $150.0 million, contrasting with H1 2024's $225.1 million in share repurchases[38] - Investing activities in H1 2025 included $132.0 million in insurance proceeds, partially offsetting capital expenditures[36] Notes to Condensed Consolidated Financial Statements The notes detail significant events and accounting policies, including the financial impact of the February 2025 Martinez refinery fire and its $189.0 million insurance recovery gain, alongside disclosures on debt, inventory, and legal contingencies - On February 1, 2025, a fire occurred at the Martinez refinery, leading to a full shutdown, with certain units restarting in April 2025 and the remaining units expected to restart by year-end 2025, though the full financial impact is not yet reasonably estimable[49][50] - In Q2 2025, the company received a $250.0 million insurance payment for the Martinez fire, resulting in a recognized gain of $189.0 million on the income statement[53] - In March 2025, the company issued $800.0 million of 9.875% Senior Notes due 2030, with net proceeds of approximately $776.0 million used to repay the revolving credit facility and for general corporate purposes[63] - The company has a Tax Receivable Agreement (TRA) with a recognized liability of $168.2 million as of June 30, 2025, down from $293.6 million at year-end 2024 after a $125.4 million payment in January 2025[84] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) This section details the company's operational and financial performance, attributing the H1 2025 net loss of $411.3 million to unfavorable refining margins and the Martinez fire, while highlighting a $189.0 million insurance recovery gain and strong liquidity of over $2.3 billion Recent Developments Key recent developments include the February 1, 2025 Martinez refinery fire and its phased restart, along with a $250.0 million initial insurance payment and the agreement to sell two terminal assets for $175.0 million - A fire at the Martinez refinery on February 1, 2025, led to a full shutdown, with a phased restart beginning in April 2025 and a full restart of damaged units planned by year-end 2025[169][170] - The company expects repair costs to be largely covered by property insurance, subject to a $30.0 million deductible, with business interruption coverage beginning on April 3, 2025, and an initial insurance payment of $250.0 million received in Q2 2025[171][172] - On April 30, 2025, PBFX entered an agreement to sell two refined product terminal facilities in Philadelphia, PA and Knoxville, TN for $175.0 million[173] Results of Operations Q2 2025 saw a net loss of $5.4 million, an improvement due to a $189.0 million insurance gain, while H1 2025 resulted in a significant net loss of $411.3 million driven by lower revenues, unfavorable margins, and the Martinez shutdown Financial Highlights Comparison (in millions) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $7,475.3 | $8,736.1 | $14,541.7 | $17,381.7 | | Net Income (Loss) | $(5.4) | $(66.0) | $(411.3) | $41.5 | | Gross Refining Margin | $640.1 | $681.1 | $1,031.8 | $1,639.4 | Operating Highlights Comparison | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Throughput (bpd in thousands) | 839.1 | 921.3 | 785.1 | 909.5 | | Refining OpEx per barrel | $7.96 | $6.94 | $9.25 | $7.47 | - Q2 2025 results were positively impacted by a $189.0 million gain on insurance recoveries, partially offset by $30.4 million in Martinez fire-related expenses and $13.6 million in severance charges[193] - Interest expense increased to $53.8 million in Q2 2025 from $17.3 million in Q2 2024, mainly due to the new 9.875% Senior Notes issued in March 2025 and higher revolver borrowings[209] Non-GAAP Financial Measures This section reconciles non-GAAP measures, showing a Q2 2025 adjusted fully-converted net loss of $118.5 million and EBITDA excluding special items of $51.8 million, after accounting for the insurance gain and fire expenses Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA (in millions) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(5.4) | $(66.0) | $(411.3) | $41.5 | | EBITDA | $204.8 | $84.1 | $(134.8) | $374.4 | | EBITDA excluding special items | $51.8 | $86.2 | $(218.4) | $375.3 | | Adjusted EBITDA | $61.8 | $94.8 | $(197.0) | $396.3 | Reconciliation to Adjusted Fully-Converted Net Income (Loss) (in millions) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Adjusted fully-converted net income (loss) | $(5.3) | $(65.8) | $(410.2) | $41.5 | | Adjusted fully-converted net income (loss) excluding special items | $(118.5) | $(64.2) | $(472.1) | $42.2 | - Special items for Q2 2025 included a $189.0M gain on insurance recoveries, $30.4M in Martinez fire expenses, a $(8.0)M favorable SBR LCM inventory adjustment, and $13.6M in severance charges[241][250] Liquidity and Capital Resources As of June 30, 2025, the company maintained strong liquidity of over $2.3 billion, with $470.3 million net cash used in operations for H1 2025, and projected 2025 capital spending of $750.0 to $775.0 million - Total liquidity was over $2.3 billion as of June 30, 2025, consisting of over $500.0 million in cash and approximately $1.8 billion of availability under the Revolving Credit Facility[271] - Capital spending for full-year 2025 is expected to be between $750.0 million and $775.0 million, excluding costs to rebuild units damaged by the Martinez fire[276] - A dividend of $0.275 per share was declared on July 31, 2025, payable on August 28, 2025[284] - The Tax Receivable Agreement liability was $168.2 million as of June 30, 2025, following a payment of $125.4 million in January 2025 for the 2023 tax year[281] Item 3. Quantitative and Qualitative Disclosures about Market Risk The company faces significant market risks from commodity price volatility, particularly refined product and crude oil spreads, alongside compliance costs for RFS (RINs) and interest rate risk on variable-rate debt, partially mitigated by derivatives - The primary market risk is commodity price volatility, specifically the difference between refined product prices and crude oil/feedstock costs[286] - As of June 30, 2025, the company had open commodity derivative contracts representing 31.4 million barrels with an unrealized net gain of $2.2 million[289] - The company is exposed to compliance program price risk, particularly the cost of Renewable Identification Numbers (RINs) to comply with the RFS[292] - The company has interest rate risk on its $3.5 billion Revolving Credit Facility, with $350.0 million outstanding as of June 30, 2025, where a 1.0% change in interest rates would impact annual interest expense by approximately $24.0 million if fully drawn[295] Item 4. Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[297] - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[298] PART II – OTHER INFORMATION Legal Proceedings The company is involved in multiple environmental and incident-related legal proceedings, including investigations and class action lawsuits concerning the Martinez refinery fire and prior incidents, though management anticipates no material financial impact - The Martinez refinery is under investigation by multiple agencies (BAAD, CCC, DOJ, EPA, etc.) for a November 2022 catalyst release, 2023 coke dust releases, and other incidents, resulting in numerous NOVs and a joint civil enforcement action[302] - The February 1, 2025 fire at the Martinez refinery is also under investigation by regulatory agencies, with the BAAD issuing 22 NOVs related to the event as of the filing date, and potential liabilities currently unknown[303] - The company is a defendant in multiple class action and individual lawsuits (Piscitelli, Cruz, Frye, etc.) related to Martinez refinery operations, alleging public/private nuisance, trespass, and negligence, with these cases being coordinated for common issues[305][306][307] - The company believes that the ultimate outcomes of these pending legal matters will not have a material impact on its financial position, results of operations, or cash flows[314] Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2025, there were no exchanges of PBF LLC Series A Units or share repurchases under the $1.75 billion Repurchase Program, leaving $732.0 million available for future repurchases - In the three months ended June 30, 2025, there were no exchanges of PBF LLC Series A Units for shares of PBF Energy Class A common stock[315] - The company did not purchase any shares of its Class A common stock under its Repurchase Program during the three and six months ended June 30, 2025, with approximately $732.0 million remains available for purchase under the program[317] Other Information During Q2 2025, no directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements - During the three months ended June 30, 2025, no directors or executive officers adopted or terminated a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement[319] Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, and Inline XBRL data files - The report includes CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, as well as Inline XBRL filings[322]