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| 8-K - 8-K - PBF Energy Inc. | earningsreleaseq114.htm |
PBF Energy Reports First Quarter 2014 Results, Declares Dividend of $0.30 Per Share
PARSIPPANY, NJ - April 30, 2014 - PBF Energy Inc. (NYSE: PBF) today reported first quarter 2014 Operating Income of $260.2 million versus Operating Income of $100.1 million for the first quarter of 2013. Adjusted Pro Forma Net Income for the first quarter 2014 was $140.7 million, or $1.44 per share on a fully exchanged, fully diluted basis, as described below, compared to Adjusted Pro Forma Net Income of $46.7 million, or $0.48 per share, for the first quarter 2013. Net Income attributable to PBF Energy Inc. for the quarter was $77.4 million.
Throughput for the quarter averaged approximately 430,900 barrels per day, which was below guidance for the quarter. Throughput on the East Coast averaged approximately 292,700 barrels per day and throughput in the Mid-continent averaged approximately 138,200 barrels per day. Throughput was negatively impacted by the cold weather experienced during the quarter which, among other things, caused a freeze-related, unplanned shutdown at our Paulsboro refinery in January.
During the first quarter 2014, the company ran approximately 102,400 barrels per day of rail-delivered crudes through its East Coast system, of which 40,100 barrels per day were heavy crude oil. The severity of the weather in the mid-continent during the quarter negatively impacted the ability to load crude oil onto the trains and transit times also increased. Depending on economics, we expect that our total volumes of rail-delivered crudes will increase in the second quarter. The company is currently expanding its existing rail capacity of approximately 145,000 barrels per day to a total of 210,000 barrels per day and expects this increased capacity to be in service by the end of the third quarter.
Tom Nimbley, PBF Energy's CEO, said, “Our strong results are representative of the success of our ongoing efforts to enhance our feedstock sourcing flexibility and procure the most economic barrels for processing at our facilities. In conjunction with relatively stable operations, given the sometimes adverse operating conditions, the landed cost of crude, especially on the East Coast, was the single largest driver of our strong results for the quarter. Broader market conditions were favorable, with strong benchmark cracks and crude oil differentials benefiting all of our refineries. Bakken traded at a discount to Brent of $13 and WCS averaged a discount to Brent of more than $31 per barrel and we were able to land these crudes, and some price-advantaged waterborne barrels, into our East Coast system at attractive economics.” Mr. Nimbley continued, “Moving into the second quarter, crude differentials have narrowed somewhat but product cracks have remained strong. We expect that our landed cost of crude will continue to support strong operating results and we are positioning our refineries to benefit from these continuing favorable market conditions.”
PBF Energy Inc. Declares Dividend
The company announced today that it will pay a quarterly dividend of $0.30 per share of Class A common stock on May 29, 2014, to holders of record as of May 12, 2014.
Adjusted Pro Forma Results
Adjusted Pro Forma results assume the exchange of all PBF Energy Company LLC Series A Units and dilutive securities into shares of PBF Energy Inc. Class A common stock on a one-for-one basis, resulting in the elimination of the noncontrolling interest and a corresponding adjustment to the company's tax provision.
Non-GAAP Measures
This earnings release, and the discussion during the management conference call, may include references to non-GAAP (Generally Accepted Accounting Principles) measures including Adjusted Pro Forma Net Income, Adjusted Pro Forma
Net Income per fully exchanged, fully diluted share, gross refining margin, gross refining margin per barrel of throughput, EBITDA (Earnings before Interest, Income Taxes, Depreciation and Amortization) and Adjusted EBITDA. PBF Energy Inc. believes that non-GAAP financial measures provide useful information about its operating performance and financial results. However, these measures have important limitations as analytical tools and should not be viewed in isolation or considered as alternatives for, or superior to, comparable GAAP financial measures. PBF Energy Inc.'s non-GAAP financial measures may also differ from similarly named measures used by other companies. See the accompanying tables and footnotes in this release for additional information on the non-GAAP measures used in this release and reconciliations to the most directly comparable GAAP measures.
Conference Call Information
PBF Energy's senior management will hold a conference call at 9:00 a.m. ET, Wednesday, April 30, 2014, to discuss its earnings results and provide an update on company operations. Callers may listen to the live presentation, which will be followed by a question and answer session, by dialing (800) 862-9098 or (785) 424-1051, conference ID: PBFQ114. The audio replay will be available two hours after the end of the call through May 14, 2014, by dialing (800) 388-6197 or (402) 220-1115. A live webcast of the conference call will also be available in the Investor Relations section of the company's web site at http://www.pbfenergy.com.
Forward-Looking Statements
Statements in this press release relating to future plans, results, performance, expectations, achievements and the like are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which may be beyond the company's control, that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors and uncertainties that may cause actual results to differ include but are not limited to the risks disclosed in the company's filings with the SEC, as well as the risk that an initial public offering of the MLP may not occur, or be negatively impacted by adverse conditions, any impact an MLP may have on the company's credit rating, cost of funds, employees, customers and vendors; risks relating to the securities markets generally; the impact of adverse market conditions affecting the company, unanticipated developments, regulatory approvals, changes in laws and other events negatively impact the company. All forward-looking statements speak only as of the date hereof. The company undertakes no obligation to revise or update any forward-looking statements except as may be required by applicable law.
About PBF Energy Inc.
PBF Energy Inc. (NYSE:PBF) is one of the largest independent refiners in North America, operating, through its subsidiaries, oil refineries and related facilities in Delaware City, Delaware, Paulsboro, New Jersey and Toledo, Ohio. Our mission is to operate our facilities in a safe, reliable and environmentally sensitive manner, provide employees with a safe and rewarding workplace, become a positive influence in the communities where we do business, and provide superior returns to our investors.
Contacts:
Colin Murray (investors)
ir@pbfenergy.com
Tel: 973.455.7578
Michael C. Karlovich (media)
mediarelations@pbfenergy.com
Tel: 973.455.8994
PBF ENERGY INC. AND SUBSIDIARIES | |||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
(Unaudited, in thousands, except share and per share data) | |||||||||||||
Three Months Ended | |||||||||||||
March 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Revenues | $ | 4,746,443 | $ | 4,797,847 | |||||||||
Costs and expenses: | |||||||||||||
Cost of sales, excluding depreciation | 4,147,684 | 4,435,101 | |||||||||||
Operating expenses, excluding depreciation | 268,899 | 206,015 | |||||||||||
General and administrative expenses | 36,624 | 30,094 | |||||||||||
Gain on sale of assets | (186 | ) | — | ||||||||||
Depreciation and amortization expense | 33,215 | 26,532 | |||||||||||
4,486,236 | 4,697,742 | ||||||||||||
Income from operations | 260,207 | 100,105 | |||||||||||
Other income (expense) | |||||||||||||
Change in fair value of catalyst lease | (2,001 | ) | (1,339 | ) | |||||||||
Interest expense, net | (25,255 | ) | (21,611 | ) | |||||||||
Income before income taxes | 232,951 | 77,155 | |||||||||||
Income tax expense | 49,679 | 7,444 | |||||||||||
Net income | 183,272 | 69,711 | |||||||||||
Less: net income attributable to noncontrolling interest | 105,828 | 58,305 | |||||||||||
Net income attributable to PBF Energy Inc. | $ | 77,444 | $ | 11,406 | |||||||||
Net income available to Class A common stock per share: | |||||||||||||
Basic | $ | 1.43 | $ | 0.48 | |||||||||
Diluted | $ | 1.42 | $ | 0.48 | |||||||||
Weighted-average shares outstanding-basic | 54,167,861 | 23,589,687 | |||||||||||
Weighted-average shares outstanding-diluted | 54,691,627 | 97,415,576 | |||||||||||
Dividends per share | $ | 0.30 | $ | 0.30 | |||||||||
Adjusted pro forma net income and adjusted pro forma net income per fully exchanged, fully diluted shares outstanding(1): | |||||||||||||
Adjusted pro forma net income | $ | 140,729 | $ | 46,686 | |||||||||
Adjusted pro forma net income per fully exchanged, fully diluted share | $ | 1.44 | $ | 0.48 | |||||||||
Pro forma shares outstanding - diluted | 97,398,632 | 97,415,576 | |||||||||||
(1) Adjusted Pro Forma information is presented in the table above as management believes that these non-GAAP measures when presented in conjunction with comparable U.S. GAAP measures, are useful to investors to compare the company’s results across the periods presented and facilitates an understanding of the company’s operating results. The company also uses this measure to evaluate its operating performance. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. The differences between Adjusted Pro Forma and U.S. GAAP results are explained in the "Reconciliation of Amounts Reported Under U.S. GAAP - Adjusted Pro Forma Net Income." | |||||||||||||
PBF ENERGY INC. AND SUBSIDIARIES | ||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEET DATA | ||||||||||||
(Unaudited, in thousands) | ||||||||||||
March 31, | December 31, | |||||||||||
2014 | 2013 | |||||||||||
Balance Sheet Data: | ||||||||||||
Cash and cash equivalents | $ | 237,135 | $ | 76,970 | ||||||||
Inventories | $ | 1,546,255 | $ | 1,445,517 | ||||||||
Total assets | $ | 4,716,419 | $ | 4,413,808 | ||||||||
Total long-term debt | $ | 734,828 | $ | 747,576 | ||||||||
Total equity | $ | 1,810,123 | $ | 1,715,256 | ||||||||
Total debt to capitalization ratio | 29 | % | 30 | % | ||||||||
Net debt to capitalization ratio | 22 | % | 28 | % | ||||||||
SUMMARIZED STATEMENT OF CASH FLOW DATA | ||||||||||||
(Unaudited, in thousands) | ||||||||||||
Three Months Ended March 31, | ||||||||||||
2014 | 2013 | |||||||||||
Cash flows provided by operations | $ | 260,571 | $ | 211,066 | ||||||||
Cash flows used in investing activities | (52,653 | ) | (59,153 | ) | ||||||||
Cash flows used in financing activities | (47,753 | ) | (33,709 | ) | ||||||||
Net increase in cash and cash equivalents | 160,165 | 118,204 | ||||||||||
Cash and cash equivalents, beginning of period | 76,970 | 285,884 | ||||||||||
Cash and cash equivalents, end of period | $ | 237,135 | $ | 404,088 | ||||||||
PBF ENERGY INC. AND SUBSIDIARIES | ||||||||||||||
MARKET INDICATORS AND KEY OPERATING INFORMATION | ||||||||||||||
(Unaudited, amounts in thousands except as indicated) | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
Market Indicators (dollars per barrel)(1) | 2014 | 2013 | ||||||||||||
Dated Brent Crude | $ | 108.21 | $ | 112.57 | ||||||||||
West Texas Intermediate (WTI) crude oil | $ | 98.69 | $ | 94.29 | ||||||||||
Crack Spreads: | ||||||||||||||
Dated Brent (NYH) 2-1-1 | $ | 11.41 | $ | 12.79 | ||||||||||
WTI (Chicago) 4-3-1 | $ | 16.79 | $ | 26.09 | ||||||||||
Crude Oil Differentials: | ||||||||||||||
Dated Brent (foreign) less WTI | $ | 9.52 | $ | 18.28 | ||||||||||
Dated Brent less Maya (heavy, sour) | $ | 18.93 | $ | 9.86 | ||||||||||
Dated Brent less WTS (sour) | $ | 15.10 | $ | 24.61 | ||||||||||
Dated Brent less ASCI (sour) | $ | 7.77 | $ | 3.66 | ||||||||||
WTI less WCS (heavy, sour) | $ | 21.63 | $ | 26.62 | ||||||||||
WTI less Bakken (light, sweet) | $ | 3.79 | $ | 1.90 | ||||||||||
WTI less Syncrude (light, sweet) | $ | 0.99 | $ | (3.33 | ) | |||||||||
Natural gas (dollars per MMBTU) | $ | 4.72 | $ | 3.48 | ||||||||||
Key Operating Information | ||||||||||||||
Production (barrels per day ("bpd") in thousands) | 428.6 | 440.3 | ||||||||||||
Crude oil and feedstocks throughput (bpd in thousands) | 430.9 | 441.6 | ||||||||||||
Total crude oil and feedstocks throughput (millions of barrels) | 38.8 | 39.7 | ||||||||||||
Gross refining margin per barrel of throughput (2) | $ | 15.44 | $ | 9.13 | ||||||||||
Operating expense per barrel of throughput (3) | $ | 6.93 | $ | 5.19 | ||||||||||
Crude and feedstocks (% of total throughput) (4): | ||||||||||||||
Heavy | 13 | % | 15 | % | ||||||||||
Medium | 45 | % | 47 | % | ||||||||||
Light | 34 | % | 30 | % | ||||||||||
Other feedstocks and blends | 8 | % | 8 | % | ||||||||||
Total throughput | 100 | % | 100 | % | ||||||||||
Yield (% of total throughput): | ||||||||||||||
Gasoline and gasoline blendstocks | 49 | % | 46 | % | ||||||||||
Distillates and distillate blendstocks | 37 | % | 38 | % | ||||||||||
Lubes | 2 | % | 2 | % | ||||||||||
Chemicals | 3 | % | 3 | % | ||||||||||
Other | 9 | % | 11 | % | ||||||||||
Total yield | 100 | % | 100 | % | ||||||||||
(1) As reported by Platts. | ||||||||||||||
(2) Gross refining margin per barrel of throughput is a non-GAAP measure. We define it as gross margin, plus refinery operating expenses and depreciation and amortization, divided by total crude and feedstocks throughput. Refer to the "Reconciliation of Amounts Reported Under U.S. GAAP - Gross Refining Margin/Gross Refining Margin per Barrel of Throughput" provided below for additional information, including our rationale for the use of this non-GAAP measure. | ||||||||||||||
(3) Represents refinery operating expenses, excluding depreciation and amortization, divided by total crude oil and feedstocks throughput. | ||||||||||||||
(4) We define heavy crude oil as crude oil with an American Petroleum Institute (API) gravity less than 24 degrees. We define medium crude oil as crude oil with an API gravity between 24 and 35 degrees. We define light crude oil as crude oil with an API gravity higher than 35 degrees. | ||||||||||||||
PBF ENERGY INC. AND SUBSIDIARIES | ||||||||||||
SUPPLEMENTAL OPERATING INFORMATION | ||||||||||||
(Unaudited, amounts in thousands except as indicated) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2014 | 2013 | |||||||||||
Supplemental Operating Information - East Coast (Delaware City and Paulsboro) | ||||||||||||
Production (barrels per day ("bpd") in thousands) | 288.6 | 316.9 | ||||||||||
Crude oil and feedstocks throughput (bpd in thousands) | 292.7 | 318.9 | ||||||||||
Total crude oil and feedstocks throughput (millions of barrels) | 26.3 | 28.7 | ||||||||||
Crude and feedstocks (% of total throughput) (1): | ||||||||||||
Heavy | 19 | % | 21 | % | ||||||||
Medium | 49 | % | 53 | % | ||||||||
Light | 21 | % | 15 | % | ||||||||
Other feedstocks and blends | 11 | % | 11 | % | ||||||||
Total throughput | 100 | % | 100 | % | ||||||||
Yield (% of total throughput): | ||||||||||||
Gasoline and gasoline blendstocks | 47 | % | 45 | % | ||||||||
Distillates and distillate blendstocks | 37 | % | 38 | % | ||||||||
Lubes | 2 | % | 3 | % | ||||||||
Chemicals | 2 | % | 2 | % | ||||||||
Other | 11 | % | 12 | % | ||||||||
Total yield | 99 | % | 100 | % | ||||||||
Supplemental Operating Information - Mid-Continent (Toledo) | ||||||||||||
Production (bpd in thousands) | 140.0 | 123.4 | ||||||||||
Crude oil and feedstocks throughput (bpd in thousands) | 138.2 | 122.7 | ||||||||||
Total crude oil and feedstocks throughput (millions of barrels) | 12.4 | 11.0 | ||||||||||
Crude and feedstocks (% of total throughput) (1): | ||||||||||||
Heavy | — | % | — | % | ||||||||
Medium | 37 | % | 31 | % | ||||||||
Light | 62 | % | 67 | % | ||||||||
Other feedstocks and blends | 1 | % | 2 | % | ||||||||
Total throughput | 100 | % | 100 | % | ||||||||
Yield (% of total throughput): | ||||||||||||
Gasoline and gasoline blendstocks | 52 | % | 50 | % | ||||||||
Distillates and distillate blendstocks | 38 | % | 36 | % | ||||||||
Lubes | — | % | — | % | ||||||||
Chemicals | 5 | % | 4 | % | ||||||||
Other | 6 | % | 10 | % | ||||||||
Total yield | 101 | % | 100 | % | ||||||||
(1) We define heavy crude oil as crude oil with an American Petroleum Institute (API) gravity less than 24 degrees. We define medium crude oil as crude oil with an API gravity between 24 and 35 degrees. We define light crude oil as crude oil with an API gravity higher than 35 degrees. | ||||||||||||
PBF ENERGY INC. AND SUBSIDIARIES | ||||||||||||||
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP | ||||||||||||||
ADJUSTED PRO FORMA NET INCOME | ||||||||||||||
(Unaudited, in thousands, except share and per share data) | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Net income attributable to PBF Energy Inc. | $ | 77,444 | $ | 11,406 | ||||||||||
Add: | Net income attributable to the noncontrolling interest (1) | 105,828 | 58,305 | |||||||||||
Less: | Income tax expense (2) | (42,543 | ) | (23,025 | ) | |||||||||
Adjusted pro forma net income | $ | 140,729 | $ | 46,686 | ||||||||||
Diluted weighted-average shares outstanding of PBF Energy Inc. (3) | 54,691,627 | 97,415,576 | ||||||||||||
Conversion of PBF LLC Series A Units (4) | 42,707,005 | — | ||||||||||||
Diluted weighted-average shares outstanding of PBF Energy Inc. | 97,398,632 | 97,415,576 | ||||||||||||
Adjusted pro forma net income (per fully exchanged, fully diluted shares outstanding | $ | 1.44 | $ | 0.48 | ||||||||||
(1) Represents the elimination of the noncontrolling interest associated with the ownership by the members of PBF Energy Company LLC other than PBF Energy Inc. as if such members had fully exchanged their PBF LLC Series A Units for shares of the company's Class A common stock. | ||||||||||||||
(2) Represents an adjustment to apply PBF Energy's statutory tax rate of approximately 40.2% for the 2014 period and 39.5% for the 2013 period to the noncontrolling interest. The adjustment assumes the full exchange of existing PBF LLC Series A Units as described in (1) above. | ||||||||||||||
(3) Represents weighted-average diluted shares outstanding assuming the full exchange of common stock equivalents, including options and warrants for PBF LLC Series A Units and options for shares of PBF Energy Class A common stock as calculated under the treasury stock method. Common stock equivalents excludes the effects of options to purchase 1,943,125 and 57,500 shares of PBF Energy Class A common stock because they are anti-dilutive for the three months ended March 31, 2014 and March 31, 2013, respectively. | ||||||||||||||
(4) Represents an adjustment to weighted-average diluted shares to assume the full exchange of existing PBF LLC Series A Units as described in (1) above. | ||||||||||||||
Non-GAAP Financial Measures | ||||||||||||||
Adjusted Pro Forma information is presented in the table above as management believes that these non-GAAP measures when presented in conjunction with comparable U.S. GAAP measures, are useful to investors to compare the company’s results across the periods presented and facilitates an understanding of the company’s operating results. The company also uses this measure to evaluate its operating performance. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. The differences between Adjusted Pro Forma and U.S. GAAP results are explained in the footnotes to the table above. | ||||||||||||||
PBF ENERGY INC. AND SUBSIDIARIES | |||||||||||||||||||||||
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP | |||||||||||||||||||||||
GROSS REFINING MARGIN / GROSS REFINING MARGIN PER BARREL OF THROUGHPUT | |||||||||||||||||||||||
(Unaudited, in thousands, except per barrel amounts) | |||||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
March 31, 2014 | March 31, 2013 | ||||||||||||||||||||||
per barrel of | per barrel of | ||||||||||||||||||||||
$ | throughput | $ | throughput | ||||||||||||||||||||
Reconciliation of gross margin to gross refining margin: | |||||||||||||||||||||||
Gross margin | $ | 300,125 | $ | 7.74 | $ | 133,022 | $ | 3.34 | |||||||||||||||
Add: refinery operating expense | 268,899 | $ | 6.93 | 206,015 | $ | 5.19 | |||||||||||||||||
Add: refinery depreciation | 29,735 | $ | 0.77 | 23,709 | $ | 0.60 | |||||||||||||||||
Gross refining margin | $ | 598,759 | $ | 15.44 | $ | 362,746 | $ | 9.13 | |||||||||||||||
Non-GAAP Financial Measures | |||||||||||||||||||||||
Gross refining margin is a non-GAAP measure because it excludes refinery operating expenses and depreciation and can be relevant to investors because it is a better metric comparison to the industry refining margin benchmarks shown in the Market Indicators table above, as the industry benchmarks do not include a charge for refinery operating expenses and depreciation. Other companies in our industry may not calculate gross refining margin and gross refining margin per barrel in the same manner. | |||||||||||||||||||||||
PBF ENERGY INC. AND SUBSIDIARIES | ||||||||||||||
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP | ||||||||||||||
EBITDA AND ADJUSTED EBITDA | ||||||||||||||
(Unaudited, in thousands) | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Reconciliation of net income to EBITDA: | ||||||||||||||
Net income | $ | 183,272 | $ | 69,711 | ||||||||||
Add: | Depreciation and amortization expense | 33,215 | 26,532 | |||||||||||
Add: | Interest expense, net | 25,255 | 21,611 | |||||||||||
Add: | Income tax expense | 49,679 | 7,444 | |||||||||||
EBITDA | $ | 291,421 | $ | 125,298 | ||||||||||
Reconciliation of EBITDA to Adjusted EBITDA: | ||||||||||||||
EBITDA | $ | 291,421 | $ | 125,298 | ||||||||||
Add: | Stock based compensation | 1,420 | 1,020 | |||||||||||
Add: | Non-cash change in fair value of catalyst lease obligations | 2,001 | 1,339 | |||||||||||
Add: | Non-cash change in fair value of inventory repurchase obligations | — | (11,042 | ) | ||||||||||
Add: | Non-cash deferral of gross profit on finished product sales | — | (7,534 | ) | ||||||||||
Adjusted EBITDA | $ | 294,842 | $ | 109,081 | ||||||||||
Non-GAAP Financial Measures | ||||||||||||||
EBITDA (Earnings before Interest, Income Taxes, Depreciation and Amortization) and Adjusted EBITDA, as presented in the tables above, are supplemental measures of performance that are not required by, or presented in accordance with, GAAP. We use these non-GAAP financial measures as a supplement to our GAAP results in order to provide a more complete understanding of the factors and trends affecting our business. EBITDA and Adjusted EBITDA are measures of operating performance that are not defined by GAAP and should not be considered substitutes for net income as determined in accordance with GAAP. | ||||||||||||||
In addition, because EBITDA and Adjusted EBITDA are not calculated in the same manner by all companies, they are not necessarily comparable to other similarly titled measures used by other companies. EBITDA and Adjusted EBITDA have their limitations as an analytical tool, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. | ||||||||||||||