PBF Energy Inc. (NYSE:PBF) today reported third quarter 2015 Operating Income, excluding special items, of $298.4 million as compared to Operating Income of $284.1 million for the third quarter of 2014. Special items in the third quarter 2015 results include a net, non-cash, after-tax $124.6 million, or $1.36 per share, lower-of-cost-or-market ('LCM') inventory adjustment which decreased operating income. Our inventory is assessed for a potential LCM adjustment on a quarterly-basis and future adjustments based on movements of hydrocarbon prices could have a non-cash, positive or negative impact to our reported earnings.
Adjusted Fully-Converted Net Income for the third quarter 2015, excluding special items, was $169.4 million, or $1.85 per share on a fully exchanged, fully diluted basis, as described below, compared to Adjusted Fully-Converted Net Income of $155.6 million, or $1.60 per share, for the third quarter 2014. On a GAAP basis, the company reported a third quarter 2015 Net Income of $55.5 million, and Net Income attributable to PBF Energy Inc. of $42.8 million or $0.50 per share. This compares to GAAP Net Income of $170.0 million, and Net Income attributable to PBF Energy Inc. of $141.0 million or $1.61 per share for the third quarter 2014. 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 53.7% of the limited partner interests as of quarter-end.
Tom Nimbley, PBF Energy's CEO, said, 'We benefited from a strong market in the third quarter that translated into solid earnings for our entire refining system. Our Mid-Continent asset outperformed and the East Coast delivered yet another positive quarter, demonstrating the flexibility of our operations and the benefits of having strategically located, complex refineries.'
Mr. Nimbley continued, 'At the end of the quarter, PBF announced that we have entered into an agreement to purchase ExxonMobil's Torrance refinery in California. In conjunction with the previously announced Chalmette acquistion, the addition of these two assets will establish PBF Energy as the fourth largest independent refiner in North America with a presence in all of the U.S. coastal markets and the robust Mid-Continent market.' Mr. Nimbley concluded, 'Subsequent to the end of the quarter, PBF Energy closed a successful equity offering, raising $344.0 million in net proceeds, which are intended to be used to fund portions of our pending transactions. Our focus now is to continue to operate our existing plants in a safe, reliable and environmentally responsible fashion and to work towards the successful closing and integration of the Chalmette and Torrance acquisitions.'
Raised $344.0 million in net proceeds from successful equity offering
On October 13, 2015, PBF closed its previously announced underwritten public offering (the 'Offering') of 11,500,000 shares of its Class A common stock, including the exercise in full by the underwriters of their option to purchase up to 1,500,000 additional shares, at $31.00 per share. Net proceeds to PBF Energy, after deducting underwriting discounts and estimated expenses, were approximately $344.0 million.
Previously announced Chalmette Refining LLC and Torrance Refinery acquisitions
On June 18, 2015, PBF announced that its subsidiary signed a definitive agreement to purchase Chalmette Refining, LLC, consisting of the 189,000 barrel per day Chalmette Refinery and related logistics assets, from ExxonMobil and PDV Chalmette, LLC. The purchase price for the assets is $322 million, plus working capital to be valued at closing. The transaction is expected to close in the middle of the fourth quarter 2015, subject to customary closing conditions and regulatory approvals.
On September 30, 2015, PBF announced that its subsidiary signed a definitive agreement to purchase the 155,000 barrel per day Torrance refinery, and related logistics assets, from ExxonMobil. The purchase price for the assets is $537.5 million, plus working capital to be valued at closing. The Torrance transaction is expected to close in the second quarter of 2016, subject to customary closing conditions and regulatory approvals. The refinery will be restored to full working order prior to close.
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 24, 2015, to holders of record as of November 9, 2015.
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, 6,050,717 shares of Class A common stock have been repurchased at an average price of approximately $24.92 per share, including broker fees. After giving effect to shares already purchased under the program, the company has approximately $149 million of available repurchasing authorization under the program going forward. At the end of the quarter, there were 91,005,208 shares of Class A common stock and PBF Energy Company LLC Series A Units outstanding.
Adjusted Fully-Converted Results
Adjusted fully-converted 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 Fully-Converted Net Income, Adjusted Fully-Converted 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), Adjusted EBITDA and projected EBITDA related to the refinery acquisitions. PBF 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'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 InformationPBF Energy's senior management will host a conference call and webcast regarding quarterly results and other business matters on Thursday, October 29, 2015, 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: PBFQ315. The audio replay will be available two hours after the end of the call through November 14, 2015, by dialing (800) 388-5895 or (402) 220-1110.
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 and in PBF Logistics LP's filings with the SEC, as well as the risks and uncertainties that our previously announced Chalmette and Torrance acquisitions may not close when we expect, or at all, that our plans for financing the acquisitions may change and that the acquisitions may pose unforeseen risks and/or may not have the benefits we expect. 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 responsible 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 53.7% 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
(Gain) loss on sale of assets
Depreciation and amortization expense
Income from operations
Other income (expenses):
Change in fair value of catalyst leases
Interest expense, net
Income before income taxes
Income tax expense
Less: net income attributable to noncontrolling interests