PBF Energy Inc. — 2022 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2022. This is an annual filing, not a standalone fourth-quarter report. PBF Energy consolidates PBF Energy Company LLC (PBF LLC); figures below generally refer to PBF Energy unless otherwise noted.
Business context
PBF is a U.S. independent refiner and marketer operating six refineries with approximately 1.0 million barrels per day of combined throughput capacity, plus a logistics business. Its results are primarily driven by refining margins, crude differentials, throughput, and regulatory-credit costs. PBF Energy owned approximately 99.3% of PBF LLC at year-end.
Key financial metrics
| Metric | FY 2022 | FY 2021 |
|---|---|---|
| Revenue | $46.83 billion | $27.25 billion |
| Income from operations | $4.15 billion | $597.2 million |
| Net income | $2.97 billion | $315.5 million |
| Net income attributable to PBF Energy stockholders | $2.88 billion | $231.0 million |
| Diluted EPS | $22.84 | $1.90 |
| Consolidated gross margin | $4.68 billion; $13.85 per throughput barrel | $887.2 million; $2.91 per throughput barrel |
| Gross refining margin, excluding special items (non-GAAP) | $7.43 billion; $22.00 per throughput barrel | $2.42 billion; $7.94 per throughput barrel |
| Cash from operating activities | $4.77 billion | $477.3 million |
| Cash and cash equivalents | $2.20 billion | $1.34 billion |
| Total debt, net of deferred financing costs and premium | $1.96 billion | $4.30 billion |
| Working capital | $1.35 billion | $1.44 billion |
Capital spending and refinery turnaround expenditures totaled $1.01 billion in 2022, versus $366.8 million in 2021. Operating expenses rose 24.6% to $2.60 billion; general and administrative expenses rose 89.5% to $468.7 million. RIN and other renewable-fuel compliance costs were $1.23 billion, up from $726.0 million. The company reported $4.80 billion of total revolving-credit commitments, with no year-end borrowings; reported liquidity was more than $4.9 billion for PBF Energy and approximately $530 million for PBFX.
Material changes versus 2021
- Revenue rose 71.4%, reflecting higher commodity prices and more throughput and product sales. Average crude/feedstock throughput increased to 925,100 barrels per day from 834,500.
- Refining margins strengthened sharply amid higher demand and global supply disruption. Benchmark crack spreads increased across the company’s operating regions.
- Operating cash flow increased to $4.77 billion. Investing cash use rose to $1.01 billion, while financing cash use reached $2.90 billion, largely reflecting debt repayment, the PBFX acquisition, and share repurchases.
- Total debt declined, including redemption of approximately $1.3 billion of 9.25% senior secured notes and repayment of revolving-credit borrowings. Interest expense fell to $246.0 million from $317.5 million.
- Results include important accounting and transaction effects: a $290.3 million charge from the change in the Tax Receivable Agreement liability, a $66.1 million net debt-extinguishment loss, and a $308.5 million release of the deferred-tax valuation allowance. By contrast, 2021 included a $669.6 million noncash inventory valuation benefit.
Outlook, commentary, risks, and unusual items
- Management expected 2023 spending of approximately $700–$750 million for facility improvements, maintenance, turnarounds, and environmental, regulatory, and safety requirements, excluding the renewable diesel project. Remaining project spending was estimated at $200–$250 million, with production targeted for the first half of 2023.
- After year-end, PBF agreed to form a 50/50 joint venture with Eni Sustainable Mobility for the Chalmette renewable diesel facility. Eni was to contribute $835 million, excluding working capital, plus up to $50 million subject to milestones. Closing remained subject to customary conditions, including regulatory approvals.
- PBF expected operating cash flow and available resources to cover obligations over the next 12 months, while noting that cash generation depends on oil markets and other factors outside its control. No earnings or margin guidance was provided in the supplied filing text.
- PBFX became an indirect wholly owned subsidiary on November 30, 2022. Public PBFX units were exchanged for $303.7 million in cash and 8.86 million PBF Energy shares. The transaction was accounted for as an equity transaction.
- The $525 million PBFX 2023 notes were classified as current debt at year-end and redeemed on February 2, 2023 using cash. PBF’s $500 million share-repurchase authorization expires in December 2024; $156.4 million had been spent by year-end. The company stated an intention to continue quarterly dividends of approximately $0.20 per share, subject to board approval and restrictions.
- Major risks include volatile refining margins and crude differentials, high and variable RIN costs, refinery outages and supply disruptions, environmental and climate regulation, California refinery requirements, project completion and joint-venture execution, labor and cyber risks, and refinancing or covenant constraints. The J. Aron inventory-intermediation agreement expires in December 2024 unless extended or replaced; PBF would have to repurchase covered inventory at expiration.
- Environmental remediation liabilities totaled approximately $157.7 million. PBF disclosed ongoing Torrance-related litigation and a challenge to the Bay Area refinery particulate-emissions rule; management stated it did not expect the described matters to materially affect financial results. A California air-district notice-of-violation settlement was accepted at $736,845, with the agreement still being drafted.
Most important facts for investors to verify
- How much of 2022’s exceptional earnings and cash generation is sustainable if crack spreads, crude differentials, or demand normalize; compare GAAP results with non-GAAP measures and account for the unusual 2021 inventory benefit.
- Actual 2023 maintenance and renewable-diesel spending, commissioning progress, joint-venture closing, and the facility’s operating and financial contribution.
- RIN and other emissions-credit costs, including the $1.36 billion year-end accrued renewable-energy and emissions obligation and related forward purchase commitments.
- Debt and liquidity after the February 2023 PBFX note redemption, along with refinancing plans and restrictions on distributions, dividends, and repurchases.
- Future Tax Receivable Agreement payments: the year-end liability was $338.6 million, and actual amounts may differ from estimates or accelerate under specified circumstances.
- Developments in California regulatory requirements, environmental matters, and the disclosed legal proceedings, including remediation-cost estimates and potential refinery capital needs.