PBF Energy Inc.

Good day, everyone, and welcome to the PBF Energy second quarter 2022 earnings conference call-in webcast. At this time, all participants have been placed in the listen-only mode, and the floor will be open for 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 that this conference is being recorded. It's now my pleasure to turn the floor over to Colin Murray, Investor Relations. Thank you, 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, and several other members of our management team. Copies of today's earnings release and our 10-Q filing, including supplemental information, are 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. The statements in our press release and those made on this call that 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 prior periods, we will discuss our results today excluding special items. In today's press release, we described the non-cash special items included in our quarterly results. The cumulative impact of the special items decreased net income by an after-tax amount of $116 million, or approximately $0.93 per share. For reconciliations of any non-GAAP measures, please refer to the supplemental tables provided in today's press release. I'll now turn the call over to Tom Nibley.

Thanks, Colin. Good morning, everyone, and thank you for joining our call. For the second quarter, PBF reported earnings per share of $10.58 and adjusted net income of $1.3 billion. Our strong financial results have provided us with the resources to accelerate the repayment of debt we incurred during the pandemic and to continue actions to strengthen our balance sheet. To be clear, the work is not complete. as we remain highly focused on doing more to recover from the ravages of the pandemic. The second quarter picked up where the first quarter ended with volatile market conditions and rising energy prices. Refinery margins expanded as available refiners other than Russia and China were called on to run at high utilization levels. The Russian invasion of Ukraine continues to alter trade flows. Russian waterborne crude exports are generally flowing to Asia as Western nations continue rejecting Russian crude and feedstocks. As trade flows reorganize, a couple of themes are appearing. European refiners are lightening their crude slates as the replacement crude for rejecting Russian barrels is generally light sweet crude produced within Europe, West Africa, or the United States. Also, For some time, Europe has been facing a natural gas and power crisis that has only been exacerbated by the Russian invasion. High-priced natural gas in Europe has made upgrading units and hydrogen plants very expensive to operate, giving US refineries a significant competitive advantage. Differentials for light sweet crude versus heavy sour have been widening for a variety of factors. Light sweet crude for the reasons I just mentioned, plus available upgrading units, coking capacity, et cetera, are generally full. We are seeing a heavy part of the barrel trade at wider discounts to the global benchmarks for light-free crude than we have seen in many years. Heavy fuel oil is quite weak, and there is some market commentary about support coming from the reemergence of IMO 2020 market dynamics. The beginning of the third quarter has seen a 15 to 20% correction in oil prices and refining margins. However, underlying fundamentals remain strong. Low inventories, tight supply, improving demand, and reduced refining capacity. Despite that, there are macroeconomic concerns that are weighing on the market. High inflation, rising interest rates, and a rising U.S. dollar. The macro concerns point to contracting oil demand to help bring the energy markets back into balance as the status quo is simply not sustainable. Inevitably, inventories will need to be replenished from these extraordinary low levels. This will require refineries to continue running at high levels of utilization. Our valued employees continue working tirelessly to keep our assets running safely and reliably and we appreciate their contributions to our performance. With our balance sheet improving and the bulk of our 2022 turnarounds complete, we anticipate that our assets will continue generating cash, which we will use to further strengthen our balance sheet and reward our investors. With that, I will turn the call over to Matt.