PBF Energy Inc. (NYSE:PBF) today reported a second quarter 2016 income from operations of $234.8 million as compared to income from operations of $273.8 million for the second quarter of 2015. Excluding special items, second quarter 2016 income from operations was $77.0 million as compared to income from operations of $167.8 million for the second quarter of 2015. Special items in the second quarter 2016 results include a net, non-cash, after-tax gain of $95.3 million, or$0.92 per share, lower-of-cost-or-market ("LCM") inventory adjustment which increased operating income. Additionally, included in our results were net after-tax charges totaling approximately $5.9 million, or $0.06 per share, related to acquisition expenses and accelerated equity-based compensation expense.
The company reported second quarter 2016 net income of $120.6 million, and net income attributable to PBF Energy Inc. of $103.5 million or $1.06 per share. This compares to net income of $158.5 million, and net income attributable to PBF Energy Inc. of $135.8 million or $1.57 per share for the second quarter 2015. Adjusted fully-converted net income for the second quarter 2016, excluding special items, was $13.9 million, or$0.14 per share on a fully exchanged, fully diluted basis, as described below, compared to adjusted fully-converted net income of $80.5 million, or $0.88 per share, for the second quarter 2015. PBF Energy's financial results reflect the consolidation of PBF Logistics LP (NYSE: PBFX), a master limited partnership of which PBF indirectly owns the general partner and approximately 49.4% of the limited partner interests as of quarter-end.
Tom Nimbley, PBF Energy's CEO, said, "Our refineries ran better than last quarter, generating positive results as the East Coast returned to profitability. Our margins were negatively impacted by several factors, including narrower light/heavy crude differentials and a 35% increase in the flat price of crude versus the first quarter. These factors contributed to lower realized margins due to increased input costs and higher relative losses on our low-value products across our system. In addition, rising RIN expenses and persistent above-average inventory levels weighed on product margins."
Mr. Nimbley continued, "Looking forward, seasonal demand remains strong but inventory levels could continue to pressure refining margins in the third quarter. The crude market continues to be well-supplied and feedstock differentials are showing signs of improvement." Mr. Nimbley concluded, "Despite the recent market volatility, we are excited about the increased diversification of our system with the addition of Torrance. We have grown our business significantly over the past twelve months and increased the earnings potential of our company."
Previously announced Torrance Refinery acquisition
On July 1, 2016, PBF announced that its subsidiary had closed its previously announced acquisition of the 155,000 barrel per day Torrance refinery, and related logistics assets, from ExxonMobil. The purchase price for the assets was $537.5 million, plus initial working capital of approximately $460.9 million which is subject to final valuation within ninety days of closing. The estimated working capital expenditures include existing feedstock, intermediate and finished product inventories as well as certain environmental credits. The Company expects the net working capital related to the Torrance Acquisition to ultimately be less than the working capital acquisition price as the pre-paid inventory and credits are cycled through its normal operations in the coming months.
PBF Energy Inc. Declares DividendThe company announced today that it will pay a quarterly dividend of $0.30 per share of Class A common stock on August 23, 2016, to holders of record as of August 9, 2016.
OutlookFor the third quarter 2016, we expect East Coast total throughput to average 300,000 to 320,000 barrels per day; Mid-Continent total throughput is expected to average 155,000 to 165,000 barrels per day; Gulf Coast total throughput is expected to average 155,000 to 165,000 barrels per day and West Coast total throughput is expected to average 145,000 to 155,000 barrels per day.
For the full-year 2016, we expect East Coast total throughput to average 310,000 to 330,000 barrels per day; Mid-Continent total throughput is expected to average 150,000 to 160,000 barrels per day; Gulf Coast total throughput is expected to average 160,000 to 170,000 barrels per day and West Coast total throughput is expected to average 145,000 to 155,000 barrels per day.
Adjusted Fully-Converted Results
Adjusted fully-converted results assume the exchange of all PBF Energy Company LLC Series A Units and dilutive securities into shares of PBF Energy Inc. Class A common stock on a one-for-one basis, resulting in the elimination of the noncontrolling interest and a corresponding adjustment to the company's tax provision.
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 California, Delaware, Louisiana, New Jersey and Ohio. Our mission is to operate our facilities in a safe, reliable and environmentally responsible 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.
