PBF Energy(US:PBF)2024-05-02 10:54PART I – FINANCIAL INFORMATION This section presents PBF Energy's unaudited condensed consolidated financial statements and management's discussion and analysis for Q1 2024 Item 1. Financial Statements PBF Energy's Q1 2024 financials show total assets at $13.8 billion, with net income of $107.5 million and reduced operating cash flow Condensed Consolidated Balance Sheets PBF Energy's total assets decreased to $13.81 billion from $14.39 billion by March 31, 2024, driven by reduced current assets and cash Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $5,822.0 | $6,596.6 | | Cash and cash equivalents | $1,441.5 | $1,783.5 | | Inventories | $2,891.3 | $3,183.1 | | Total Assets | $13,808.2 | $14,387.8 | | Total Current Liabilities | $3,781.2 | $4,217.3 | | Long-term debt | $1,248.6 | $1,245.9 | | Total Liabilities | $7,210.0 | $7,756.5 | | Total Equity | $6,598.2 | $6,631.3 | Condensed Consolidated Statements of Operations Q1 2024 revenues fell to $8.65 billion from $9.30 billion in Q1 2023, leading to a significant drop in net income to $106.6 million Q1 2024 vs Q1 2023 Statement of Operations (in millions, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenues | $8,645.6 | $9,295.0 | | Cost of sales | $8,427.4 | $8,718.6 | | Income from operations | $145.1 | $532.4 | | Net income | $107.5 | $385.9 | | Net income attributable to PBF Energy Inc. stockholders | $106.6 | $382.1 | | Diluted EPS | $0.86 | $2.86 | Condensed Consolidated Statements of Cash Flows Net cash from operations significantly declined to $15.8 million in Q1 2024 from $437.6 million in Q1 2023, resulting in a $342.0 million net decrease in cash Q1 2024 vs Q1 2023 Cash Flow Summary (in millions) | Cash Flow Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $15.8 | $437.6 | | Net cash used in investing activities | $(284.4) | $(378.7) | | Net cash used in financing activities | $(73.4) | $(646.4) | | Net change in cash and cash equivalents | $(342.0) | $(587.5) | | Cash and cash equivalents, end of period | $1,441.5 | $1,616.1 | Notes to Condensed Consolidated Financial Statements Detailed notes cover inventory valuation, $1.25 billion long-term debt, $291.8 million Tax Receivable Agreement liability, and the Refining segment's dominant revenue contribution - Total inventories stood at $2.89 billion as of March 31, 2024, down from $3.18 billion at year-end 2023, with no lower of cost or market adjustment recorded47 - Total long-term debt remained stable at approximately $1.25 billion as of March 31, 202453 - The company has a Tax Receivable Agreement liability of $291.8 million as of March 31, 2024, with $121.8 million classified as a current liability70 - The Refining segment generated $8.64 billion in revenue in Q1 2024, while the Logistics segment generated $96.1 million before intercompany eliminations88133 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Q1 2024 net income decreased due to lower refining margins and maintenance, with liquidity remaining strong at over $4.2 billion and 2024 capital spending projected at $800-850 million Overview PBF Energy operates six U.S. oil refineries with 1,000,000 bpd capacity, focusing on Refining and Logistics segments, and increased its share repurchase authorization to $1.75 billion - Owns and operates six domestic oil refineries with a combined processing capacity of approximately 1,000,000 bpd146 - The company's Board of Directors increased the share repurchase authorization to $1.75 billion in February 2024. In Q1 2024, $125.0 million of stock was repurchased158 Results of Operations Q1 2024 net income sharply declined to $107.5 million due to unfavorable crack spreads and planned maintenance, despite lower operating expenses and RFS compliance costs Financial Highlights (in millions) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenues | $8,645.6 | $9,295.0 | | Income from operations | $145.1 | $532.4 | | Net income | $107.5 | $385.9 | | Consolidated gross margin | $218.2 | $576.4 | Operating Highlights | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Crude oil and feedstocks throughput (bpd in thousands) | 897.4 | 851.2 | | Gross refining margin per barrel of throughput | $11.73 | $18.35 | | Refining operating expense, per barrel of throughput | $8.02 | $9.78 | - The decrease in financial performance was primarily due to unfavorable movements in crack spreads and planned maintenance at the Delaware City and Toledo refineries170 - Total RFS compliance costs were $129.7 million for Q1 2024, compared to $181.1 million for Q1 2023174 Non-GAAP Financial Measures Adjusted EBITDA for Q1 2024 was $301.5 million, down from $665.4 million in Q1 2023, reflecting the impact of special items on non-GAAP performance metrics Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in millions) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income | $107.5 | $385.9 | | EBITDA | $290.3 | $674.9 | | EBITDA excluding special items | $289.1 | $656.9 | | Adjusted EBITDA | $301.5 | $665.4 | Reconciliation of Gross Refining Margin (in millions) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Consolidated gross margin | $218.2 | $576.4 | | Gross refining margin | $958.3 | $1,405.8 | Liquidity and Capital Resources PBF Energy maintains strong liquidity of over $4.2 billion, with Q1 2024 capital spending at $284.7 million and a full-year forecast of $800-850 million - Operational liquidity was over $4.2 billion as of March 31, 2024, consisting of $1.4 billion in cash and over $2.8 billion of borrowing availability226 - Full-year 2024 capital spending is expected to be between $800.0 million and $850.0 million230 - The company declared a dividend of $0.25 per share payable on May 30, 2024141236 Item 3. Quantitative and Qualitative Disclosures About Market Risk PBF Energy faces significant commodity price volatility, managing risk with 41.8 million barrels in derivative contracts and facing RFS compliance and interest rate risks - The primary market risk is commodity price volatility, affecting revenues from refined products and costs for crude oil238239 - As of March 31, 2024, the company had open commodity derivative contracts for 41.8 million barrels with an unrealized net gain of $14.1 million241 - A $1.00 per MMBTU change in natural gas prices would impact annual costs by approximately $75.0 million to $95.0 million243 Item 4. Controls and Procedures Disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal controls over financial reporting during Q1 2024 - Management concluded that disclosure controls and procedures were effective as of March 31, 2024250 - No material changes were made to the company's internal controls over financial reporting during the first quarter of 2024251 PART II – OTHER INFORMATION This section covers legal proceedings, equity sales, other information, and exhibits for PBF Energy's Q1 2024 report Item 1. Legal Proceedings The Martinez refinery faces multiple investigations and a civil enforcement action following incidents, with the company also defending several class-action lawsuits - The Martinez refinery is under investigation by multiple agencies (BAAQMD, CCC, EPA, DFG) and faces a joint civil enforcement action following a November 2022 spent catalyst release and subsequent incidents256 - The San Francisco Bay Regional Water Quality Control Board assessed an administrative civil liability of $13.8 million against the Martinez refinery, which was subsequently proposed to be reduced to approximately $4.5 million258 - The company is a defendant in several class-action lawsuits alleging nuisance, trespass, and negligence related to operations at the Martinez and Torrance refineries259261262 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds PBF Energy repurchased 2,561,060 shares for $125 million in Q1 2024, with $936.1 million remaining under the $1.75 billion repurchase authorization Q1 2024 Share Repurchase Activity | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2024 | 728,107 | $43.28 | | February 2024 | 791,611 | $49.57 | | March 2024 | 1,041,342 | $52.09 | | Total | 2,561,060 | $48.81 | - In February 2024, the Board of Directors increased the share repurchase authorization from $1.0 billion to $1.75 billion268 Item 5. Other Information No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during Q1 2024 - No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during Q1 2024270 Item 6. Exhibits This section lists required exhibits, including CEO and CFO certifications and XBRL data files - The Exhibit Index lists required filings, including Sarbanes-Oxley Act certifications and Inline XBRL documents271273