PBF Energy Inc.

Good day, everyone, and welcome to the PBF Energy first quarter 2021 earnings call and webcast. At this time, all participants have been placed in a listen-only mode, and the floor will be open to your questions following management's prepared remarks. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. It's now my pleasure to turn the floor over to Colin Murray of Investor Relations. Sir, you may begin.

Thank you, Melissa. Good morning and welcome to today's call. With me today are Tom Nimley, our CEO, Matt Lucey, our President, Eric Young, our CFO, Tom O'Connor, our Senior Vice President of Commercial, and several other members of our management team. A copy of today's earnings release, including supplemental information, is available 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 that 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 periods, we will discuss our results today excluding special items. In today's press release, we provide a detailed list of the non-cash special items included in our first quarter 2021 results. The cumulative impact of these special items increased net income by an after-tax benefit of $273.9 million, or $227 per share. As noted in our press release, we'll be using certain non-GAAP measures while describing PBS operating performance and financial results. For reconciliations of non-GAAP measures to the appropriate GAAP figure, please refer to the supplemental tables contained in today's press release. I'll now turn the call over to Tom.

Thanks, Colin. Good morning, everyone, and thank you for joining our call today. While we are not out of the woods yet, our business saw a strong recovery during the first quarter. The vaccine rollouts have picked up and people are starting to come out from their respected COVID and winter carbonations. Market conditions are improving. Lower utilization rates in 2020 kept refined product inventories within very reasonable ranges coming into 2021. Aside from the catastrophic personal impacts of winter storm Uri, the storm continued to clean up and balancing of inventory levels. Cracks responded as a result of the storm, but operational discipline meant that the impacts were seen in lower inventories rather than higher utilization. Product inventory levels are now all at or near their five-year average levels. Industry data shows that gasoline demand, domestic gasoline demand, has recovered to approximately 95 percent of normal levels. Distillate demand has fully recovered and is even 5 percent or so above historic levels while jet demand remains at about 75% of normal levels but continues its slower recovery. Demand is the key driver. Increased demand will provide support for improved refining margins, which in turn will support incrementally higher utilization. Higher refining runs should increase the call on crude from producers, and this should have a positive impact on differentials. We are seeing the green shoots of this effect with discounts widening modestly for sour crude oils as incremental barrels are coming from the Middle East. We expect this trend to continue as demand improves. To be clear, the industry is coming off a very low base and many of the incremental data points are positive. We believe that a strong domestic recovery from the pandemic will continue to drive increased demand for our products. Internationally, the recovery has not been as consistent or smooth as we are experiencing in the U.S., but those regions will recover as well. This should provide a backdrop where we see a more gradual but sustained growth in product demand. We are encouraged by what we are seeing in the market. We expect utilization going forward will be pulled by demand rather than run ahead of it. We are expecting to run almost 25 percent more barrels through our system in the second quarter than we did in the fourth quarter of 2020, and this is a very big step in our recovery. Lastly, I would like to thank all of our employees for following our pandemic protocols while continuing their tireless efforts in maintaining the safety and integrity of our operations. We look forward to the day when we will have all of our team members back in the office, which we will believe will occur by the end of the second quarter. With that, I will turn the call over to Matt.