PBF Energy Reports First Quarter 2016 Results, Declares Dividend of $0.30 Per Share

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

March 31,

2016

2015

Revenues

$

2,800,185

$

2,995,136

Costs and expenses:

Cost of sales, excluding depreciation

2,412,095

2,502,215

Operating expenses, excluding depreciation

299,999

237,118

General and administrative expenses

37,582

36,046

Gain on sale of assets

—

(359)

Depreciation and amortization expense

55,933

47,706

2,805,609

2,822,726

(Loss) income from operations

(5,424)

172,410

Other income (expenses):

Change in fair value of catalyst leases

(2,885)

2,039

Interest expense, net

(37,527)

(22,192)

(Loss) income before income taxes

(45,836)

152,257

Income tax (benefit) expense

(22,500)

49,138

Net (loss) income

(23,336)

103,119

Less: net income attributable to noncontrolling interests

6,052

15,798

Net (loss) income attributable to PBF Energy Inc.

$

(29,388)

$

87,321

Net (loss) income available to Class A common stock per share:

Basic

$

(0.30)

$

1.04

Diluted

$

(0.30)

$

1.00

Weighted-average shares outstanding-basic

97,809,384

84,278,071

Weighted-average shares outstanding-diluted

97,809,384

91,669,101

Dividends per common share

$

0.30

$

0.30

Adjusted fully-converted net (loss) income and adjusted     fully-converted net income per fully        exchanged, fully diluted shares outstanding       (Note 1):

Adjusted fully-converted net (loss) income

$

(30,862)

$

91,978

Adjusted fully-converted net (loss) income per fully exchanged, fully diluted share

$

(0.30)

$

1.00

Adjusted fully-converted shares outstanding - diluted

102,765,801

91,669,101

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP

(Unaudited, in thousands, except share and per share data)

Three Months Ended

RECONCILIATION OF NET (LOSS) INCOME TO

March 31,

ADJUSTED FULLY-CONVERTED NET (LOSS) INCOME (Note 1)

2016

2015

Net (loss) income attributable to PBF Energy Inc.

$

(29,388)

$

87,321

Add:

Net (loss) income attributable to the noncontrolling interest (Note 2)

(2,441)

7,788

Less:

Income tax benefit (expense) (Note 3)

967

(3,131)

Adjusted fully-converted net (loss) income

$

(30,862)

$

91,978

Special Items (Note 4):

Add:

Net non-cash LCM inventory adjustment (Note 5)

(59,063)

(21,208)

Less:

Recomputed income taxes on special items (Note 5)

23,389

8,526

Adjusted fully-converted net (loss) income excluding special items (Note 4)

$

(66,536)

$

79,296

Diluted weighted-average shares outstanding of PBF Energy Inc. (Note 6)

97,809,384

91,669,101

Conversion of PBF LLC Series A Units (Note 7)

4,956,417

—

Fully-converted shares outstanding - diluted

102,765,801

91,669,101

Adjusted fully-converted net (loss) income (per fully exchanged, fully diluted shares outstanding)

$

(0.30)

$

1.00

Adjusted fully-converted net (loss) income excluding special items (per fully exchanged, fully diluted shares outstanding) (Note 4)

$

(0.65)

$

0.87

Three Months Ended

RECONCILIATION OF (LOSS) INCOME FROM OPERATIONS TO

March 31,

(LOSS) INCOME FROM OPERATIONS EXCLUDING SPECIAL ITEMS

2016

2015

(Loss) income from operations

$

(5,424)

$

172,410

Special Items (Note 4):

Add:

Net non-cash LCM inventory adjustment (Note 5)

(59,063)

(21,208)

(Loss) income from operations excluding special items (Note 4)

$

(64,487)

$

151,202

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP

EBITDA RECONCILIATIONS (Note 8)

(Unaudited, in thousands)

Three Months Ended

March 31,

RECONCILIATION OF NET (LOSS) INCOME TO EBITDA

2016

2015

Net (loss) income

$

(23,336)

$

103,119

Add:

Depreciation and amortization expense

55,933

47,706

Add:

Interest expense, net

37,527

22,192

Add:

Income tax (benefit) expense

(22,500)

49,138

EBITDA

$

47,624

$

222,155

Special Items (Note 4):

Add:

Net non-cash LCM inventory adjustment (Note 5)

(59,063)

(21,208)

EBITDA excluding special items (Note 4)

$

(11,439)

$

200,947

RECONCILIATION OF EBITDA TO ADJUSTED EBITDA

EBITDA

$

47,624

$

222,155

Add:

Stock based compensation

3,350

2,955

Add:

Net non-cash change in fair value of catalyst leases

2,885

(2,039)

Add:

Non-cash LCM inventory adjustment (Note 5)

(59,063)

(21,208)

Adjusted EBITDA

$

(5,204)

$

201,863

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(Unaudited, in thousands)

March 31,

December 31,

2016

2015

Cash, cash equivalents and marketable securities

$

974,729

$

1,178,578

Inventories

1,229,299

1,174,272

Total assets

6,188,803

6,105,124

Total long-term debt

1,845,902

1,840,355

Total equity

$

2,038,890

$

2,095,857

  Special Items (Note 4)

    Add: Net non-cash LCM inventory adjustment (Note 5)

(59,063)

427,226

    Add: Change in tax receivable agreement liability (Note 4)

—

(18,150)

    Less: Recomputed income taxes on special items (Note 5)

23,389

(161,994)

       Net impact of special items to equity

$

(35,674)

$

247,082

Total equity excluding special items (Note 4)

$

2,003,216

$

2,342,939

Net debt to capitalization ratio

30

%

24

%

Net debt to capitalization ratio, excluding special items

30

%

22

%

Total debt to capitalization ratio

48

%

47

%

Total debt to capitalization ratio, excluding special items

48

%

44

%

SUMMARIZED STATEMENT OF CASH FLOW DATA

(Unaudited, in thousands)

Three Months Ended March 31,

2016

2015

Cash flows (used in) provided by operations

$

(20,597)

$

132,505

Cash flows used in investing activities

(145,879)

(48,107)

Cash flows used in financing activities

(37,523)

(32,791)

Net (decrease) increase in cash and cash equivalents

(203,999)

51,607

Cash and cash equivalents, beginning of period

944,320

397,873

Cash and cash equivalents, end of period

$

740,321

$

449,480

Marketable securities

234,408

234,939

Net cash, cash equivalents and marketable securities

$

974,729

$

684,419

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

CONSOLIDATING FINANCIAL INFORMATION (Note 9)

(Unaudited, in thousands)

Three Months Ended March 31, 2016

Refining

Logistics

Corporate

 Eliminations

Consolidated Total

Revenues

$

2,800,185

$

36,549

$

—

$

(36,549)

$

2,800,185

Depreciation and amortization

52,596

1,640

1,697

—

55,933

(Loss) income from operations

4,967

26,323

(36,714)

—

(5,424)

Interest expense, net

972

7,229

29,326

—

37,527

Capital expenditures (Note 14)

139,600

439

5,700

—

145,739

Three Months Ended March 31, 2015

Refining

Logistics

Corporate

 Eliminations

Consolidated Total

Revenues

$

2,995,136

$

32,846

$

—

$

(32,846)

$

2,995,136

Depreciation and amortization

43,030

1,633

3,043

—

47,706

Income (loss) from operations

188,085

19,717

(35,392)

—

172,410

Interest expense, net

3,956

1,955

16,281

—

22,192

Capital expenditures

124,468

76

1,185

—

125,729

Balance at March 31, 2016

Refining

Logistics

Corporate

 Eliminations

Consolidated Total

Total assets

$

5,165,674

$

433,579

$

614,004

$

(24,454)

$

6,188,803

Balance at December 31, 2015

Refining

Logistics

Corporate

 Eliminations

Consolidated Total

Total assets

$

5,087,554

$

422,902

$

618,617

$

(23,949)

$

6,105,124

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

MARKET INDICATORS AND KEY OPERATING INFORMATION

(Unaudited, amounts in thousands except as indicated)

Three Months Ended

March 31,

Market Indicators (dollars per barrel) (Note 10)

2016

2015

Dated Brent Crude

$

34.24

$

54.29

West Texas Intermediate (WTI) crude oil

$

33.45

$

48.49

Light Louisiana Sweet (LLS) crude oil

$

35.34

$

52.84

Crack Spreads:

Dated Brent (NYH) 2-1-1

$

11.18

$

15.76

WTI (Chicago) 4-3-1

$

8.83

$

15.45

LLS (Gulf Coast) 2-1-1

$

8.71

$

13.61

Crude Oil Differentials:

Dated Brent (foreign) less WTI

$

0.79

$

5.80

Dated Brent less Maya (heavy, sour)

$

8.04

$

10.14

Dated Brent less WTS (sour)

$

0.94

$

6.79

Dated Brent less ASCI (sour)

$

4.27

$

5.58

WTI less WCS (heavy, sour)

$

11.34

$

11.80

WTI less Bakken (light, sweet)

$

1.56

$

5.13

WTI less Syncrude (light, sweet)

$

(4.44)

$

(0.68)

Natural gas (dollars per MMBTU)

$

1.98

$

2.81

Key Operating Information

Production (barrels per day (bpd) in thousands)

655.9

465.4

Crude oil and feedstocks throughput (bpd in thousands)

650.1

467.8

Total crude oil and feedstocks throughput (millions of barrels)

59.2

42.1

Gross refining margin, excluding special items, per barrel of throughput (Note 4, Note 11)

$

4.99

$

10.57

Refinery operating expense per barrel of throughput (Note 12)

$

5.01

$

5.54

Crude and feedstocks (% of total throughput) (Note 13)

Heavy

14

%

15

%

Medium

50

%

46

%

Light

23

%

27

%

Other feedstocks and blends

13

%

12

%

Total throughput

100

%

100

%

Yield (% of total throughput):

Gasoline and gasoline blendstocks

48

%

49

%

Distillates and distillate blendstocks

31

%

34

%

Lubes

1

%

1

%

Chemicals

4

%

3

%

Other

16

%

13

%

Total yield

100

%

100

%

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

 SUPPLEMENTAL OPERATING INFORMATION

(Unaudited, amounts in thousands except as indicated)

Three Months Ended

March 31,

2016

2015

Supplemental Operating Information - East Coast (Delaware City and Paulsboro)

Production (barrels per day (bpd) in thousands)

312.2

320.5

Crude oil and feedstocks throughput (bpd in thousands)

316.2

325.7

Total crude oil and feedstocks throughput (millions of barrels)

28.8

29.3

Gross refining margin, excluding special items, per barrel of throughput (Note 4, Note 11)

$

4.26

$

8.92

Refinery operating expense per barrel of throughput (Note 12)

$

5.18

$

5.54

Crude and feedstocks (% of total throughput) (Note 13):

Heavy

9

%

22

%

Medium

66

%

46

%

Light

10

%

16

%

Other feedstocks and blends

15

%

16

%

Total throughput

100

%

100

%

Yield (% of total throughput):

Gasoline and gasoline blendstocks

47

%

48

%

Distillates and distillate blendstocks

26

%

33

%

Lubes

3

%

2

%

Chemicals

2

%

2

%

Other

21

%

13

%

Total yield

99

%

98

%

Supplemental Operating Information - Mid-Continent (Toledo)

Production (bpd in thousands)

160.1

144.9

Crude oil and feedstocks throughput (bpd in thousands)

157.7

142.1

Total crude oil and feedstocks throughput (millions of barrels)

14.4

12.8

Gross refining margin, excluding special items, per barrel of throughput (Note 4, Note 11)

$

4.12

$

14.36

Refinery operating expense per barrel of throughput (Note 12)

$

4.93

$

5.56

Crude and feedstocks (% of total throughput) (Note 13):

Medium

40

%

45

%

Light

57

%

53

%

Other feedstocks and blends

3

%

2

%

Total throughput

100

%

100

%

Yield (% of total throughput):

Gasoline and gasoline blendstocks

52

%

51

%

Distillates and distillate blendstocks

37

%

37

%

Chemicals

6

%

5

%

Other

7

%

9

%

Total yield

102

%

102

%

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

 SUPPLEMENTAL OPERATING INFORMATION

(Unaudited, amounts in thousands except as indicated)

Three Months Ended

March 31,

2016

2015

Supplemental Operating Information - Gulf Coast (Chalmette)

Production (bpd in thousands)

183.6

N/A

Crude oil and feedstocks throughput (bpd in thousands)

176.2

N/A

Total crude oil and feedstocks throughput (millions of barrels)

16.0

N/A

Gross refining margin, excluding special items, per barrel of throughput (Note 4, Note 11)

$

7.07

N/A

Refinery operating expense per barrel of throughput (Note 12)

$

4.80

N/A

Crude and feedstocks (% of total throughput) (Note 13):

Heavy

37

%

N/A

Medium

29

%

N/A

Light

17

%

N/A

Other feedstocks and blends

17

%

N/A

Total throughput

100

%

N/A

Yield (% of total throughput):

Gasoline and gasoline blendstocks

48

%

N/A

Distillates and distillate blendstocks

32

%

N/A

Chemicals

6

%

N/A

Other

15

%

N/A

Total yield

101

%

N/A

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP

GROSS REFINING MARGIN / GROSS REFINING MARGIN PER BARREL OF THROUGHPUT (Note 11)

(Unaudited, in thousands, except per barrel amounts)

Three Months Ended

Three Months Ended

March 31, 2016

March 31, 2015

RECONCILIATION OF GROSS MARGIN TO GROSS REFINING MARGIN

$

per barrel ofthroughput

$

per barrel ofthroughput

Gross margin

$

38,855

$

0.66

$

216,328

$

5.14

Less:  Affiliate revenues of PBFX

(36,549)

(0.62)

(30,565)

(0.73)

Add:  Affiliate cost of sales of PBFX

2,661

0.05

3,740

0.09

Add:  Refinery operating expenses

296,639

5.01

233,377

5.54

Add:  Refinery depreciation

52,596

0.89

43,216

1.03

Gross refining margin

$

354,202

$

5.99

$

466,096

$

11.07

   Special Items (Note 4):

Add: Non-cash LCM inventory adjustment (Note 5)

(59,063)

(1.00)

(21,208)

(0.50)

Gross refining margin excluding special items (Note 4)

$

295,139

$

4.99

$

444,888

$

10.57

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

FOOTNOTES TO EARNINGS RELEASE TABLES

(1) Adjusted fully-converted information is presented in this table 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 these measures 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 fully-converted and U.S. GAAP results are explained in footnotes 2 through 7.

(2)  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 PBF Energy's Class A common stock.

(3) Represents an adjustment to reflect the Company's statutory corporate tax rate of approximately 39.6% and 40.2% for the 2016 and 2015 periods, respectively, applied to the net income attributable to the noncontrolling interest for all periods presented.  The adjustment assumes the full exchange of existing PBF Energy Company LLC Series A Units as described in footnote 2.

(4) The non-GAAP measures presented include adjusted fully-converted net income excluding special items, income from continuing operations excluding special items, EBITDA excluding special items, and gross refining margin excluding special items.  The special items for the periods presented relate to a lower of cost or market adjustment (LCM).  LCM is a GAAP guideline related to inventory valuation that requires inventory to be stated at the lower of cost or market. Our inventories are stated at the lower of cost or market. Cost is determined using last-in, first-out (LIFO) inventory valuation methodology, in which the most recently incurred costs are charged to cost of sales and inventories are valued at base layer acquisition costs. Market is determined based on an assessment of the current estimated replacement cost and net realizable selling price of the inventory. In periods where the market price of our inventory declines substantially, cost values of inventory may exceed market values. In such instances, we record an adjustment to write down the value of inventory to market value in accordance with GAAP. In subsequent periods, the value of inventory is reassessed and an LCM adjustment is recorded to reflect the net change in the LCM inventory reserve between the prior period and the current period. In addition, the special items shown in the 2015 balance sheet include changes in the tax receivable agreement liability reflecting a benefit attributable to changes in our obligation under the tax receivable agreement due to factors outside of our control such as changes in tax rates. Although we believe that non-GAAP financial measures excluding the impact of special items provide useful supplemental information to investors regarding the results and performance of our business and allow for more useful period-over-period comparisons, such non-GAAP measures should only be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP.

(5) During the first quarter of 2016, the Company recorded an adjustment to value its inventories to the lower of cost or market which resulted in a net pre-tax benefit of approximately $59.1 million reflecting the change in the lower of cost or market inventory reserve from $1,117.3 million at December 31, 2015 to $1,058.3 million at March 31, 2016. During the three months ended March 31, 2015, the Company recorded an adjustment to value its inventories to the lower of cost or market which resulted in a net pre-tax charge of $21.2 million reflecting the change in the lower of cost or market inventory reserve from $690.1 million at December 31, 2014 to $668.9 million at March 31, 2015.The net impact of these LCM inventory adjustments are included in the Refining segment's operating income, but are excluded from the operating results presented in the table in order to make such information comparable between periods. Income taxes related to the net LCM adjustment were recalculated using the Company's statutory corporate tax rate of approximately 39.6% and 40.2%, respectively, for the three months ended March 31, 2016 and 2015.

(6)  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 (to the extent the impact of such exchange would not be anti-dilutive). Common stock equivalents excludes the effects of options to purchase 4,945,360 and 2,869,500 shares of PBF Energy Class A common stock because they are anti-dilutive for the three months ended March 31, 2016 and March 31, 2015, respectively.

(7) Represents an adjustment to weighted-average diluted shares to assume the full exchange of existing PBF LLC Series A Units as described in footnote 2 above if not included in the diluted weighted-average shares outstanding as described in footnote 6 above.

(8) EBITDA (Earnings before Interest, Income Taxes, Depreciation and Amortization) and Adjusted EBITDA 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.

(9) We operate in two reportable segments; Refining and Logistics.  Our operations that are not included in the Refining and Logistics segments are included in Corporate.  As of March 31, 2016, the Refining segment includes the operations of our oil refineries and related facilities in Delaware City, Delaware, Paulsboro, New Jersey,  Toledo, Ohio and New Orleans, Louisiana.  The Logistics segment includes the operations of PBF Logistics LP ("PBFX"), a growth-oriented master limited partnership which owns and operates logistics assets, currently consisting of the Delaware City Rail Terminal, the Toledo Truck Terminal, the DCR West Rack, the Toledo Storage Facility and the Delaware City Products Pipeline and Truck Rack. Prior to the PBFX's initial public offering and subsequent acquisitions, PBFX's assets were operated within the refining operations of PBF Energy's Delaware City and Toledo refineries. The assets did not generate third party or intra-entity revenue, other than certain intra-entity revenue recognized by the Delaware City Products Pipeline and Truck Rack, and were not considered to be a separate reportable segment. All intercompany transactions are eliminated in our consolidated financial statements and are included in Eliminations, as applicable.

(10)  As reported by Platts.

(11)  Gross refining margin and gross refining margin per barrel of throughput are non-GAAP measures because they exclude refinery operating expenses, refinery depreciation and amortization and gross margin of PBFX.  Gross refining margin per barrel is gross refining margin, divided by total crude and feedstocks throughput.  We believe they are important measures of operating performance and they provide useful information to investors because gross refining margin per barrel is a better metric comparison to the industry refining margin benchmarks shown in the Market Indicators Tables, 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.

(12) Represents refinery operating expenses, excluding depreciation and amortization, divided by total crude oil and feedstocks throughput.

(13) We define heavy crude oil as crude oil with American Petroleum Institute (API) gravity less than 24 degrees.  We define medium crude oil as crude oil with API gravity between 24 and 35 degrees.  We define light crude oil as crude oil with API gravity higher than 35 degrees.

(14) The Refining segment includes capital expenditures of $2.7 million for the working capital settlement related to the acquisition of the Chalmette refinery that was finalized in the first quarter of 2016.