PBF Energy Inc.

Good day, everyone, and welcome to the PBF Energy First Quarter 2020 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following management's prepared remarks. You may register to ask a question at any time by pressing the star and 1 on your touch-tone phone. It is now my pleasure to turn the floor to Colin Murray of Investor Relations. Sir, you may begin.

Thank you, Brie. Good morning, and welcome to today's call. With me today are Tom Nimley, our CEO, Matt Lucey, our president, Eric Young, our CFO, and several other members of our management team. A copy of today's earnings release, including supplemental information, is on our website. Before getting started, I'd like to direct your attention to the safe harbor statement contained in today's press release. In summary, it outlines the statements contained in the press release and on this call, which express the company's or management's expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions under federal securities laws. There are many factors that could cause actual results to differ from our expectations, including those we describe in our filings with the SEC. Consistent with our prior quarters, we will discuss our results excluding special items. For the first quarter, this is a net 933 million adjustment consisting of after-tax, non-cash, lower of cost or market or LCM adjustments, change in tax receivable agreement liability, and debt extinction costs related to the redemption of the 7% notes due in 2023, which were partially offset by a change in the fair value of the earn-out provision included in connection with the Martinez acquisition, which in total decreased our reported net income and earnings per share. As noted in our press release, we'll be using certain non-GAAP measures while describing PBF's operating performance and financial results. For reconciliations of non-GAAP measures to the appropriate GAAP figure, please refer to the supplemental tables provided in today's press release. Also included in the supplemental information provided with today's press release are the consolidated results of our Martinez Refinery, now included in our West Coast system as of February 1st, 2020. If you have any questions about this new information or presentation, please contact Investor Relations after the call. I'll now turn the call over to Tom.

Thanks, Colin. Good morning, everyone, and thank you for joining our call from wherever you may be working. The results for the first quarter seem somewhat inconsequential, given the challenging start to 2020. We all experience our own unique set of circumstances as we manage our daily lives as individuals, families, communities, and companies in the face of the measures necessary to navigate the impacts of the COVID-19 pandemic. Through our refining, logistics, and commercial operations, we have seen the effects of COVID-19 demand destruction on our business firsthand. As a result of the nationwide stay-at-home orders, We estimate demand for gasoline bottomed at around down 50% from last year's level in early April, with demand for other products down as well. In response to the pressures of the pandemic, PBF has taken a number of aggressive steps to protect our business from the virus impacts and resulting demand destruction. We significantly reduced our capital expenditures for the remainder of 2020. We have increased our initial reduction of $240 million announced in March to an aggregate decrease of $360 million in 2020 planned capital expenditures. This represents a 50% reduction to our original guidance. We intend to satisfy all required safety, environmental, and regulatory capital commitments while continuing to explore further opportunities to minimize our near-term capex. We have identified a number of opportunities to lower our 2020 operating expenses by approximately $140 million. We lowered the corporate overhead expenses by over $20 million, primarily through temporary salary reductions for more than 50% of our corporate and nonrepresented workforce and continue to target other areas for savings. We suspended our quarterly dividend, which will preserve approximately $35 million in cash each quarter to support the balance sheet. And through the sale of five hydrogen plants located at our Martinez, Torrance, and Delaware City refineries, we generated $530 million in cash proceeds, and we continue to evaluate various other liquidity and cash flow optimization options. And finally, last week, we raised $1 billion to a successful bond offering. Our total projected cost reduction measures amount to more than $600 million in expected savings in 2020. Some of these measures are temporary, but should result in long-term benefits. We are taking these and other steps to counter the impact of the unprecedented headwinds we are facing. Since late March, we have reduced runs by approximately 30%. to put that into context, coming into 2020 we expected to run approximately 950,000 barrels a day through our refineries and we now expect to be in the 650 to 750,000 barrel a day range. We expect to be in that range until demand improves and we will adjust our operations regionally depending upon market conditions. Across our refining system, Due to the complexity and configuration of our facilities, we have the flexibility to idle certain units and scale back operations to balance our production with prevailing demand. We are not the only company facing these market conditions, and our competitors appear to be responding to the market in a similar fashion. We are also seeing some companies take the harder decision to completely shut down refineries. Two facilities have shut down domestically, and several more facilities have been shut down in the Atlantic Basin as a result of high cost and low margins. The refining sector as a whole has responded to the market conditions and done a good job of aligning product supply with demand. We are taking all the necessary actions to ensure that we emerge from these trials a stronger company and we remain fully committed to our base assumption that complexity matters. Our complex and geographically diverse asset base provides us with a stable platform to build a strong future. Many uncertainties remain with respect to the lasting effects of the pandemic and the impact it has had and will have on our economy. From a hydrocarbon perspective, it certainly appears that we have hit a bottom and we are seeing some signs that demand is returning in some small measure as the states manage their individual recovery paths. Even in these trying times, as always, the health and safety of our employees and our community partners remains our top priority. We will continue to operate our assets in a safe, reliable, and environmentally responsible fashion. Now I'll turn the call over to Eric to discuss our current liquidity and financial position.