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PBF Energy Reports Second Quarter 2013 Results, Declares Dividend Of $0.30 Per Share And Announces Confidential Submission Of A Registration Statement For An IPO Of Its Subsidiary, PBF Logistics LP

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.

                 
PBF ENERGY INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except share and per share data)
 
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
 
Revenues $ 4,678,293 $ 5,077,015 $ 9,476,141 $ 9,793,121
 
Costs and expenses:
Cost of sales, excluding depreciation 4,295,979 4,279,046 8,731,081 8,939,239
Operating expenses, excluding depreciation 202,583 170,702 408,599 358,845
General and administrative expenses 19,141 25,286 49,235 39,100
Gain on sale of assets - 53 - (2,450 )
Depreciation and amortization expense   27,563     22,422     54,093     42,963  
  4,545,266     4,497,509     9,243,008     9,377,697  
 
Income from operations 133,027 579,506 233,133 415,424
 
Other income (expense)

Change in fair value of contingent consideration

- (692 ) - (1,384 )
Change in fair value of catalyst lease 6,820 5,371 5,481 (978 )
Interest expense, net   (21,708 )   (28,443 )   (43,319 )   (59,851 )
Income before income taxes 118,139 555,742 195,295 353,211
Income tax expense   (10,969 )   -     (18,413 )   -  
Net income 107,170 $ 555,742   176,882 $ 353,211  

Less: net income attributable to noncontrolling interest

  90,344     148,649  
Net income attributable to PBF Energy Inc. $ 16,826   $ 28,233  
 
Net income available to Class A common
stock per share:
Basic $ 0.62   $ 1.12  
Diluted $ 0.61   $ 1.08  
Weighted-average shares outstanding-basic   26,944,055     25,276,137  
Weighted-average shares outstanding-diluted   27,706,696     26,110,976  
 
Dividends per share $ 0.30   $ 0.60  
 
Adjusted pro forma net income and adjusted
pro forma net income per fully exchanged,
fully diluted shares outstanding (1):
Adjusted pro forma net income $ 71,484   $ 336,224   $ 118,166   $ 213,693  
Adjusted pro forma net income per fully
exchanged, fully diluted share $ 0.73   $ 3.45   $ 1.21   $ 2.19  
Pro forma shares outstanding -diluted   97,353,701     97,353,701     97,425,899     97,425,899  
 

(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
CONSOLIDATED BALANCE SHEET DATA
(Unaudited, in thousands)
 
 
 
June 30, December 31,
2013 2012
Balance Sheet Data:
Cash and cash equivalents $ 69,230 $ 285,884
Inventories $ 1,537,573 $ 1,497,119
Total assets $ 4,325,903 $ 4,253,702
Total long-term debt $ 815,963 $ 729,980
Total equity $ 1,741,909 $ 1,723,545
   
Total debt to capitalization ratio 32 % 30 %
Net debt to capitalization ratio 30 % 20 %
 
 
 
SUMMARIZED STATEMENT OF CASH FLOW DATA
(Unaudited, in thousands)
 

  Six months ended June 30,  

2013 2012
Cash flows from (used by) operations $ (40,201 ) $ 117,374
Cash flows used in investing activities (112,724 ) (89,854 )
Cash flows used in financing activities   (63,729 )   (68,958 )
Net decrease in cash and cash equivalents (216,654 ) (41,438 )
Cash and cash equivalents, beginning of period   285,884     50,166  
Cash and cash equivalents, end of period $ 69,230   $ 8,728  
 
                 
PBF ENERGY INC. AND SUBSIDIARIES
MARKET INDICATORS AND KEY OPERATING INFORMATION
(Unaudited, amounts in thousands except as indicated)
 

Three Months Ended

Six Months Ended

June 30, June 30,
Market Indicators (dollars per barrel) (1) 2013 2012 2013 2012
Dated Brent Crude $ 102.43 $ 108.29 $ 107.50 $ 113.61
West Texas Intermediate (WTI) crude oil $ 94.07 $ 93.30 $ 94.17 $ 98.16
Crack Spreads
Dated Brent (NYH) 2-1-1 $ 14.67 $ 15.32 $ 13.60 $ 12.78
WTI (Chicago) 4-3-1 $ 29.26 $ 28.17 $ 27.72 $ 23.89
Crude Oil Differentials
Dated Brent (foreign) less WTI $ 8.36 $ 14.99 $ 13.33 $ 15.45
Dated Brent less Maya (heavy, sour) $ 4.59 $ 9.16 $ 7.30 $ 9.55
Dated Brent less WTS (sour) $ 8.42 $ 20.28 $ 16.42 $ 19.93
Dated Brent less ASCI (sour) $ 3.14 $ 4.41 $ 3.55 $ 4.07
WTI less WCS (heavy, sour) $ 16.63 $ 19.87 $ 21.54 $ 23.16
WTI less Bakken (light, sweet) $ 2.06 $ 6.54 $ 1.98 $ 9.49
WTI less Syncrude (light, sweet) $ (4.33 ) $ 1.68 $ (3.84 ) $ 4.49
Natural gas (dollars per MMBTU) $ 4.02 $ 2.35 $ 3.76 $ 2.43
 
(1) As reported by Platts.
 
Key Operating Information
Production (barrels per day ("bpd") in thousands) 464.0 475.2 450.9 451.4
Crude oil and feedstocks throughput (bpd in thousands) 464.6 479.1 453.1 451.3
Total crude oil and feedstocks throughput (millions of barrels) 42.3 43.6 82.0 82.1
Gross refining margin per barrel of throughput (2) $ 9.04 $ 18.30 $ 9.08 $ 10.40
Operating expense per barrel of throughput (3) $ 4.79 $ 3.92 $ 4.98 $ 4.37
Crude and feedstocks (% of total throughput) (4):
Heavy 16 % 17 % 15 % 18 %
Medium 39 % 42 % 44 % 46 %
Light 38 % 32 % 33 % 28 %
Other feedstocks and blends   7 %   9 %   8 %   8 %
Total throughput   100 %   100 %   100 %   100 %
Yield (% of total throughput):
Gasoline and gasoline blendstocks 45 % 48 % 46 % 47 %
Distillates and distillate blendstocks 37 % 34 % 37 % 35 %
Lubes 2 % 2 % 2 % 2 %
Chemicals 3 % 3 % 3 % 3 %
Other   13 %   13 %   12 %   13 %
Total yield   100 %   100 %   100 %   100 %
 

(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 Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Supplemental Operating Information - East Coast (Delaware City and Paulsboro)
Production (barrels per day ("bpd") in thousands) 315.4 320.9 315.3 309.8
Crude oil and feedstocks throughput (bpd in thousands) 317.3 318.1 318.1 306.8
Total crude oil and feedstocks throughput (millions of barrels) 28.9 28.9 57.6 55.8
Crude and feedstocks (% of total throughput) (1):
Heavy 23 % 25 % 22 % 27 %
Medium 41 % 46 % 47 % 50 %
Light 26 % 17 % 21 % 12 %
Other feedstocks and blends 10 % 12 % 10 % 11 %
Total throughput 100 % 100 % 100 % 100 %
Yield (% of total throughput):
Gasoline and gasoline blendstocks 44 % 45 % 44 % 45 %
Distillates and distillate blendstocks 37 % 34 % 38 % 36 %
Lubes 3 % 3 % 3 % 3 %
Chemicals 2 % 2 % 2 % 2 %
Other 14 % 16 % 13 % 14 %
Total yield 100 % 100 % 100 % 100 %
 
Supplemental Operating Information - Mid-Continent (Toledo)
Production (bpd in thousands) 148.6 154.3 135.6 141.6
Crude oil and feedstocks throughput (bpd in thousands) 147.3 161.0 135.0 144.5
Total crude oil and feedstocks throughput (millions of barrels) 13.4 14.7 24.4 26.3
Crude and feedstocks (% of total throughput) (1):
Heavy 0 % 0 % 0 % 0 %
Medium 35 % 33 % 36 % 36 %
Light 62 % 64 % 62 % 63 %
Other feedstocks and blends 3 % 3 % 2 % 1 %
Total throughput 100 % 100 % 100 % 100 %
Yield (% of total throughput):
Gasoline and gasoline blendstocks 48 % 52 % 49 % 53 %
Distillates and distillate blendstocks 37 % 34 % 37 % 34 %
Lubes 0 % 0 % 0 % 0 %
Chemicals 5 % 5 % 5 % 5 %
Other 10 % 9 % 9 % 8 %
Total yield 100 % 100 % 100 % 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 Six Months Ended
June 30, June 30,
2013 2012 2013 2012
 
 
Net income attributable to PBF Energy Inc. $ 16,826 $ - $ 28,233 $ -

Add:

Net income attributable to the noncontrolling interest (1)

90,344 555,742 148,649 353,211
Less: Income tax expense (2)   (35,686 )   (219,518 )   (58,716 )   (139,518 )
Adjusted pro forma net income $ 71,484   $ 336,224   $ 118,166   $ 213,693  
 
Diluted weighted-average shares outstanding of PBF Energy Inc. (3) 27,706,696 - 26,110,976 -
Conversion of PBF LLC Series A Units (4)   69,647,005     97,353,701     71,314,923     97,425,899  
Pro forma shares outstanding - diluted   97,353,701     97,353,701     97,425,899     97,425,899  
 
Adjusted pro forma net income per fully
exchanged, fully diluted shares outstanding $ 0.73   $ 3.45   $ 1.21   $ 2.19  
 

(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 Series A Units for shares of the company's Class A common stock.

 
(2)

Represents an adjustment to reflect the company's current effective corporate tax rate of approximately 39.5% applied to all periods presented. The adjustment assumes the full exchange of existing PBF Energy Company LLC Series A Units as described in (1) above.

 

(3)

Represents weighted-average diluted shares outstanding assuming the conversion of all common stock equivalents, including options and warrants for units of PBF LLC Series A Units and options for shares of PBF Energy Class A common stock as calculated under the treasury stock method for the three and six month period ended June 30, 2013. Common stock equivalents exclude the effects of options to purchase 731,250 shares of PBF Energy's Class A common stock because they are anti-dilutive.

 
(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
June 30, 2013 June 30, 2012
per barrel of per barrel of
$ throughput $ throughput
Reconciliation of gross margin to gross
refining margin:
Gross margin $ 155,484 $ 3.68 $ 606,234 $ 13.90
Add: refinery operating expense 202,583 $ 4.79 170,702 $ 3.92
Add: refinery depreciation   24,247 $ 0.57   21,033 $ 0.48
Gross refining margin $ 382,314 $ 9.04 $ 797,969 $ 18.30
 
 
Six Months Ended Six Months Ended
June 30, 2013 June 30, 2012
per barrel of per barrel of
$ throughput   $ throughput
Reconciliation of gross margin to gross
refining margin:
Gross margin $ 288,506 $ 3.52 $ 455,013 $ 5.54
Add: refinery operating expense 408,599 $ 4.98 358,845 $ 4.37
Add: refinery depreciation   47,955 $ 0.58   40,024 $ 0.49
Gross refining margin $ 745,060 $ 9.08 $ 853,882 $ 10.40
 
Non-GAAP Financial Measures

Gross refining margin is a non-GAAP measure because it excludes refinery operating expenses and depreciation and amortization. We believe it is an important measure of operating performance and provides useful information 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 refining margin and 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 Six Months Ended
June 30, June 30,
2013 2012 2013 2012
 
Reconciliation of net income to EBITDA:
Net income $ 107,170 $ 555,742 $ 176,882 $ 353,211
Add: Depreciation and amortization expense 27,563 22,422 54,093 42,963
Add: Interest expense, net 21,708 28,443 43,319 59,851
Add: Income tax expense   10,969     -     18,413     -  
EBITDA $ 167,410   $ 606,607   $ 292,707   $ 456,025  
 
 
 
Reconciliation of EBITDA to Adjusted EBITDA:
EBITDA $ 167,410 $ 606,607 $ 292,707 $ 456,025

Add:

Stock based compensation

957 540 1,977 1,047

Add:

Non-cash change in fair value of catalyst

lease obligations (6,820 ) (5,371 ) (5,481 ) 978

Add:

Non-cash change in fair value of contingent

consideration - 692 - 1,384

Add:

Non-cash change in fair value of inventory

repurchase obligations (2,831 ) (5,289 ) (13,873 ) (12,209 )

Add:

Non-cash deferral of gross profit on

finished product sales   (20,496 )   2,330     (28,030 )   (3,441 )
Adjusted EBITDA $ 138,220   $ 599,509   $ 247,300   $ 443,784  
 
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.

 




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