PBF Energy Inc. — Q1 2024 Form 10-Q
Business context and period. This unaudited report covers the three months ended March 31, 2024, compared with Q1 2023. PBF operates six U.S. refineries with approximately 1.0 million barrels per day of combined capacity, alongside a logistics business. It also owns a 50% equity-method interest in St. Bernard Renewables (SBR), which owns the renewable diesel facility co-located with the Chalmette refinery.
Financial and operating performance
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Revenue | $8.646 billion | $9.295 billion |
| Income from operations | $145.1 million | $532.4 million |
| Net income | $107.5 million | $385.9 million |
| Net income attributable to PBF Energy stockholders | $106.6 million | $382.1 million |
| Diluted EPS | $0.86 | $2.86 |
| Consolidated gross margin | $218.2 million; $2.68/barrel | $576.4 million; $7.53/barrel |
| Gross refining margin (non-GAAP) | $958.3 million; $11.73/barrel | $1.406 billion; $18.35/barrel |
| Adjusted EBITDA (non-GAAP) | $301.5 million | $665.4 million |
| Cash provided by operating activities | $15.8 million | $437.6 million |
Margins and operating results. Revenue fell 7.5%, which management attributed primarily to lower hydrocarbon prices. Gross refining margin declined as crack spreads weakened across most regions. Throughput increased to 897,400 barrels per day from 851,200, while refining operating expense fell to $8.02 per barrel from $9.78, reflecting lower maintenance and energy costs. RFS compliance costs were $129.7 million, down from $181.1 million.
Cash, debt, and liquidity. Cash and cash equivalents were $1.442 billion at quarter-end, down from $1.784 billion at December 31, 2023. Operating cash flow was limited by working-capital movements, including changes in accrued expenses and a $44.8 million Tax Receivable Agreement payment. Investing cash outflow was $284.4 million, including $139.6 million of property, plant and equipment expenditures and $140.6 million of turnaround costs. Financing cash outflow was $73.4 million, including $125.0 million of share repurchases and $29.6 million of dividends. Debt had a $1.302 billion principal balance ($1.249 billion carrying value); no revolving facility borrowings were outstanding. PBF reported more than $4.2 billion of operational liquidity, including cash and more than $2.8 billion of revolver availability, and compliance with debt covenants. Its reported non-GAAP net debt was negative $192.9 million, meaning cash exceeded debt on that measure.
Changes versus Q1 2023
- Net income fell to $107.5 million from $385.9 million; diluted EPS declined to $0.86 from $2.86.
- Gross refining margin declined by $447.5 million, with management citing weaker crack spreads and maintenance at Delaware City, Toledo, and West Coast refineries. West Coast maintenance that began in late 2023 extended into Q1 2024.
- Operating cash flow decreased to $15.8 million from $437.6 million, while cash used in investing activities improved to $284.4 million from $378.7 million.
- Interest expense, net, fell to $10.5 million from $18.7 million, primarily reflecting prior debt redemptions and termination of the inventory intermediation agreement.
- Share repurchases were $125.0 million versus $167.6 million. The board increased the repurchase authorization to $1.75 billion in February 2024.
Outlook, commentary, risks, and unusual items
- Outlook: Management expects 2024 capital spending of approximately $800 million to $850 million, including facility improvements, maintenance and turnarounds, and environmental, regulatory, and safety work. It said it expects liquidity and capital resources to cover anticipated needs for the next 12 months, subject to market and other factors. The filing provides no specific earnings or margin guidance.
- Capital returns: PBF announced a $0.25-per-share dividend payable May 30, 2024 and said it currently intends to continue quarterly dividends, subject to board discretion. From April 1 through May 1, it repurchased an additional 574,865 shares for $33.6 million.
- Special items: Q1 2024 results included an $8.7 million loss related to the formation of the SBR equity-method investment, a $3.3 million gain from the fair-value change in Martinez contingent consideration, and PBF’s $6.6 million share of SBR’s inventory valuation adjustment. Q1 2023 included a $16.3 million contingent-consideration gain and a $1.7 million land-sale gain.
- Risks and contingencies: Results are sensitive to crude and product prices, refining margins, RIN and emissions-credit costs, energy prices, operating disruptions, and regulation. Martinez refinery incidents—including a spent catalyst release, coke dust releases, flaring, and a brush fire—remain subject to investigations and enforcement action; penalties had not been assessed and were not estimable. A separate water-quality matter had a proposed reduced assessment of approximately $4.5 million, half directed to environmental compliance or restoration projects, with final approval pending. Environmental liabilities totaled $156.7 million at quarter-end.
- Other exposures: The Tax Receivable Agreement liability was $291.8 million, including $121.8 million current. The company also disclosed litigation and environmental remediation exposures whose ultimate outcomes may be uncertain. Management identified commodity-market volatility, geopolitical and supply disruptions, cyber risk, and regulatory and energy-transition changes among risks that could affect results.
Important facts for investors to verify
- Whether refining margins and operating performance recover, and how planned and unplanned refinery maintenance affects throughput and costs.
- Whether operating cash flow improves after the quarter’s working-capital outflows, and how planned capital spending, dividends, buybacks, and Tax Receivable Agreement payments affect cash.
- Availability and terms of revolving credit capacity, debt covenant compliance, and the company’s reported liquidity under changing market conditions.
- Developments, potential penalties, and remediation costs related to the Martinez incidents and other environmental matters, including the pending water-quality settlement approval.
- How RIN and emissions-credit obligations, crude differentials, and SBR’s operating and financial performance affect margins and cash flow.