PBF Energy Inc.: PBF Energy Reports Third Quarter 2014 Results, Declares Dividend of $0.30 Per Share, Announces $100 Million Increase to Share Repurchase Authorization, and Appointment of Thomas Nimbley to PBF Energy’s Board of Directors
"The markets continue to be turbulent and PBF is focused on operating safely and capturing the opportunities that the markets present. We remain committed to return value to our shareholders and we continue to pursue opportunities to grow the business."
PARSIPPANY, N.J.--(BUSINESS WIRE)--PBF Energy Inc. (NYSE: PBF) today reported third quarter 2014 Operating Income of $284.1 million versus an Operating Loss of $(55.6) million for the third quarter of 2013. Adjusted Pro Forma Net Income for the third quarter 2014 was $155.6 million, or $1.60 per share on a fully-exchanged, fully-diluted basis, as described below, compared to an Adjusted Pro Forma Net Loss of $(46.9) million, or $(0.48) per share, for the third quarter 2013. Net Income attributable to PBF Energy Inc. for the quarter was $141.0 million. PBF Energy's financial results reflect the consolidation of the financial results of PBF Logistics LP (NYSE: PBFX), a master limited partnership of which PBF indirectly owns the general partner and approximately 51.1% of the limited partner interests as of quarter-end.
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Tom Nimbley, PBF Energy's CEO, said, "This is PBF's fourth successive quarter of positive results and, as of the third quarter of 2014, the East Coast has contributed over 50 percent of the total EBITDA of the company for the year. Our East Coast results reflect our continuing efforts to use our procurement optionality to source the most economic barrels for processing at our East Coast facilities, as well as in the Mid-continent." Mr. Nimbley continued, "Stable operations during the quarter allowed us to benefit from lower feedstock costs, capture the wide distillate margins and recognize improved margins on our lower value products as a result of the overall decline in crude prices."
Throughput for the quarter averaged approximately 495,500 barrels per day, which was in-line with total guidance for the quarter. Throughput on the East Coast averaged approximately 344,100 barrels per day and throughput in the Mid-continent averaged approximately 151,400 barrels per day. We ran the East Coast at higher than expected rates in order to capture favorable product differentials.
During the third quarter of 2014, the company processed approximately 130,200 barrels per day of rail-delivered crudes through its East Coast system, 47,200 barrels per day of which were heavy crude oil. Economics for North American barrels sourced by rail versus waterborne barrels impacted deliveries as did the scheduling of deliveries to the light crude unloading rack ("loop track") at Delaware City as a result of planned third-party rail facility maintenance activity in the Mid-continent.
On September 30, 2014, a subsidiary of PBF completed the sale of the West Rack, a 40,000 barrel per day heavy crude oil rail unloading facility, located at PBF's Delaware City refinery to PBF Logistics LP for total consideration of $150 million, consisting of $135 million in cash and PBF Logistics LP limited partner interests of $15 million, or 589,536 common units.
"With our first drop-down successfully completed in the quarter, we monetized another valuable piece of our logistics infrastructure and have used a portion of those funds to return value to our shareholders through our share repurchase program. The program was implemented late in the third quarter and remains active at this time," said Mr. Nimbley. "The markets continue to be turbulent and PBF is focused on operating safely and capturing the opportunities that the markets present. We remain committed to return value to our shareholders and we continue to pursue opportunities to grow the business."
During the third quarter of 2014, we wrote down assets associated with an abandoned capital project at our Delaware City refinery, resulting in a pre-tax charge of $28.5 million.
Effective October 29, 2014, Tom Nimbley, PBF Energy's Chief Executive Officer, has been appointed to the company's board of directors. Mr. Nimbley has served as PBF's Chief Executive Officer since June of 2010. Prior thereto, he served as a Principal for Nimbley Consultants LLC from June 2005 to March 2010, where he provided consulting services and assisted on the acquisition of two refineries. He previously served as Senior Vice President and Head of Refining for Phillips Petroleum Company and subsequently Senior Vice President and head of Refining for ConocoPhillips' domestic refining system (13 locations) following the merger of Phillips and Conoco. Before joining Phillips at the time of its acquisition of Tosco in September 2001, Mr. Nimbley served in various positions with Tosco Corporation and its subsidiaries starting in April 1993.
PBF Energy Inc. Share Repurchase Program
On August 19, 2014, PBF announced that its board of directors authorized the repurchase of up to $200 million of PBF Class A Common Stock. On October 29, 2014, the board of directors approved a $100 million increase to the existing authorization, for a total repurchase authorization of $300 million. The repurchase authorization expires on September 30, 2016.
These repurchases may be made from time to time through various methods, including open market transactions, block trades, accelerated share repurchases, privately negotiated transactions or otherwise, certain of which may be effected through Rule 10b5-1 and Rule 10b-18 plans. The timing and number of shares repurchased will depend on a variety of factors, including price, capital availability, legal requirements and economic and market conditions. PBF is not obligated to purchase any shares under the repurchase program, and repurchases may be suspended or discontinued at any time without prior notice.
As of the end the third quarter, 1,354,943 shares of Class A common stock have been repurchased at an average price of approximately $24.03 per share. After giving effect to shares already purchased under the program, the company has approximately $200 million of available repurchasing authorization under the program going forward. At the end of the quarter, there were 86,390,173 shares of Class A common stock outstanding.
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 November 25, 2014, to holders of record as of November 10, 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.
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 host a conference call and webcast regarding third quarter results and other business matters on Thursday, October 30, 2014, at 8:30 a.m. ET. The call is being webcast and can be accessed at PBF Energy's website, http://www.pbfenergy.com . The call can also be heard by dialing (800) 862-9098 or (785) 424-1051, conference ID: PBFQ314. The audio replay will be available two hours after the end of the call through November 14, 2014, by dialing (800) 723-5782 or (402) 220-2663.
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 risks disclosed in PBF Logistics LP's SEC filings and any impact PBF Logistics LP may have on the company's credit rating, cost of funds, employees, customers and vendors; risks relating to the securities markets generally; and the impact of adverse market conditions affecting the company, unanticipated developments, regulatory approvals, changes in laws and other events that 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.
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.
PBF Energy Inc. also indirectly owns the general partner and approximately 51.1% of the limited partner interest of PBF Logistics LP (NYSE: PBFX).
PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except share and per share data)
Three Months Ended
Nine Months Ended
Costs and expenses:
Cost of sales, excluding depreciation
Operating expenses, excluding depreciation
General and administrative expenses
Loss (gain) on sale of assets
Depreciation and amortization expense
Income (loss) from operations
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