PBF Energy Inc. — FY2021 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2021. This is an annual filing, not a standalone fourth-quarter report. Unless otherwise noted, financial amounts below are PBF Energy consolidated figures.
Business context
PBF operates six U.S. refineries with approximately 1.0 million barrels per day of combined capacity, plus the PBFX logistics business. PBF Energy is a holding company that owns approximately 99.2% of PBF LLC; PBF LLC holds a 47.9% limited partner interest in PBFX. Refining is exposed to commodity prices, product demand, crude differentials, operating reliability and regulatory-credit costs.
Financial and operating performance
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $27.253 billion | $15.116 billion |
| Income (loss) from operations | $597.2 million | $(1.417) billion |
| Net income (loss) | $315.5 million | $(1.333) billion |
| Net income (loss) attributable to PBF Energy stockholders | $231.0 million; diluted EPS $1.90 | $(1.392) billion; diluted EPS $(11.64) |
| Net cash provided by (used in) operating activities | $477.3 million | $(631.6) million |
| Capital spending, including turnarounds | $395.7 million | Not directly comparable; included the Martinez acquisition |
| Crude and feedstocks throughput | 834,500 bpd | 727,700 bpd |
| Gross refining margin, excluding special items | $7.94 per throughput barrel | $3.23 per throughput barrel |
Revenue rose 80.8%, driven principally by higher hydrocarbon prices and recovering demand. Throughput increased, though management said refineries were still operating below historic levels. Refinery operating expense was $6.56 per throughput barrel, down from $6.89. Interest expense increased to $317.5 million from $258.2 million.
FY2021 GAAP results included a $669.6 million noncash benefit from reversal of the prior-year lower-of-cost-or-market inventory reserve; no reserve remained at year-end because replacement inventory value exceeded LIFO carrying value. Other notable items included a $79.9 million debt-extinguishment gain and a $48.3 million charge from the Tax Receivable Agreement liability. The prior year included a $471.1 million gain on hydrogen-plant sales and significant impairment and inventory charges. These items make reported year-over-year earnings less representative of underlying operating trends.
Debt, liquidity and cash flow
- Year-end cash and cash equivalents were $1.342 billion. Working capital was $1.440 billion.
- Long-term debt, net of deferred financing costs and premium, was $4.296 billion; debt to capitalization was 63%. Total debt principal before those adjustments was $4.329 billion. PBF LLC also had a $375.2 million affiliate note payable to PBF Energy, eliminated in PBF Energy’s consolidated debt.
- At year-end, the PBF Holding revolver had $900 million drawn and $380.1 million of letters of credit against a $3.4 billion facility. PBFX’s $500 million revolver had $100 million drawn and $3.5 million of letters of credit, with $396.5 million stated available.
- Management reported operational liquidity above $2.4 billion, and PBFX separately reported approximately $430.4 million of liquidity. Management believed available resources and expected cash flows would meet needs for the next 12 months, while cautioning that pandemic and market uncertainty could require additional capital.
- Operating cash flow improved to $477.3 million, but working-capital movements included substantial increases in receivables and accrued expenses. Investing cash outflow was $388.5 million; financing cash outflow was $356.8 million.
- Major debt maturities begin in 2023: $1.525 billion of debt is due that year, and the main revolving facilities also mature in 2023. The company reported compliance with debt covenants at year-end.
Changes, outlook and risks
- Recovery and operations: Refined-product demand and benchmark margins improved from 2020 as restrictions eased, but recovery remained uncertain. The East Coast refinery reconfiguration, completed in 2020, idled Paulsboro units; management cited expected annual savings of approximately $100 million in operating costs and $50 million in capital spending versus historic levels.
- Regulatory costs: Renewable Identification Number (RIN) costs rose to $726.0 million from $326.4 million. Renewable energy credit and emissions obligations totaled $953.9 million at year-end, including RIN and California emissions-related exposures. RIN costs and future EPA requirements remain volatile.
- 2022 spending plans: Maintenance, environmental, regulatory and safety capital spending was estimated at $150–$200 million, in line with historical averages. Turnaround-related capital spending was expected to be approximately $200–$225 million in the first half of 2022, primarily at East and West Coast refineries. PBFX expected $20–$28 million of net capital expenditures for 2022.
- Renewable diesel: PBF was advancing a proposed 20,000-bpd facility at Chalmette using existing idled assets and a new pretreatment unit. Engineering, permitting, long-lead equipment and initial site preparations were underway; discussions with potential partners continued. The filing does not provide a definitive completion date or final project economics.
- Dividend: PBF Energy’s $0.30-per-share quarterly dividend remained suspended, with no reinstatement anticipated in the foreseeable future. PBFX maintained a $0.30-per-unit quarterly distribution; future payments are not guaranteed.
- Material exposures: Risks include pandemic-related demand and operating disruption, volatile refining margins and crude differentials, high debt and refinancing needs, RIN and emissions costs, environmental rules and remediation, refinery or logistics outages, labor negotiations, and cyber threats. Shell represented approximately 15% of revenue and 26% of trade receivables in 2021.
- Legal and environmental matters: The filing describes regulatory proceedings and environmental claims, including a settled OSHA matter with a $401,923 penalty, a Delaware permit appeal, and other contested or negotiating matters. Management said the outcomes of the identified proceedings were not expected to have a material financial impact individually or in aggregate; ultimate outcomes remain uncertain.
Most important facts for investors to verify
- How much of the earnings recovery persists excluding the $669.6 million inventory-reserve reversal and other special items.
- Whether operating cash flow converts into sustained free cash flow after working-capital needs, turnarounds and environmental spending.
- Refinancing plans and terms for the 2023 revolver and debt maturities, alongside progress on reducing leverage.
- Future RIN and emissions-credit costs, EPA rule outcomes, and the company’s ability to pass compliance costs to customers.
- Actual project cost, financing, partner arrangements and schedule for the Chalmette renewable-diesel project.
- Progress on refinery utilization, reliability and planned turnarounds, and resolution of material labor and regulatory matters.