PBF Energy Inc.

Good day, everyone, and welcome to the PBF Energy fourth quarter and full year 2023 earnings conference call and webcast. At this time, all participants are placed in a 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 this conference is being recorded. It is now my pleasure to turn the floor over to Colin Murray of Investor Relations. Sir, you may begin.

Thank you, Kat. Good morning and welcome to today's call. With me today are Matt Lucey, our President and CEO, Karen Davis, our CFO, and several other members of our management team. Copies of today's earnings release and our 10-K 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. 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 law. 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 describe the special items included in our quarterly results. The cumulative impact of the special items increased fourth quarter results by an after-tax amount of approximately $700,000, or one cent per share. primarily relates to a change in the fair value of contingent consideration associated with the Martinez acquisition and a benefit related to a change in the tax receivable agreement liability, offset by a decrease to our gain on the formation of SBR and our share of the SBR lower cost of market inventory adjustments. Also included in today's press release is further guidance information related to our expectations for the first quarter of 2024. For any questions on these items or follow-up questions, please contact Investor Relations after the call. For reconciliations of any non-GAAP measures mentioned on today's call, please refer to the supplemental tables provided in the press release. I'll now turn the call over to Matt Lucie.

Good morning, everyone, and thank you for joining our call. As we close the books on last year, PBF achieved its second best financial year in 2023. Over the course of the year, we further enhanced equity value by reducing our debt by over $700 million, and we returned $640 million directly to shareholders through dividends and share buybacks. The company was able to purchase $150 million of our shares in the fourth quarter, I'm pleased to announce our board of directors has approved an incremental 750 million share repurchase authorization. This resets our program to just over a billion dollars of remaining capacity. We ended the year with our balance sheet transformation complete and our strongest financial position ever. As we look at the quarter, The West Coast operations had clear challenges. Operations outside the West Coast were reasonable. Our East Coast and Gulf Coast systems performed well in their respective markets, with capture rates broadly in line with prior quarters. While Toledo operated well, the MidCon market was certainly challenging. At times, gasoline cracks were at or near negative numbers. This phenomenon in the MidCon during the fourth quarter is not new and somewhat of a return to normal seasonality. Importantly, we've seen a recovery in the MidCon product cracks as February began. Our West Coast system underperformed largely to our overlapping planned and unplanned maintenance activities. This was an unfortunate convergence of circumstances where we had both assets undergoing maintenance. While not the plan, it was the reality. In Q4, we completed the major FCC turnaround in Torrance, and as mentioned last quarter, we experienced unplanned flexi-COCR downtime at Martinez. The FCC was delayed getting restarted, and the COCR work rippled through Martinez operations. The delayed restart of Torrance and the unplanned Martinez work Cost us approximately $100 million in lost profit and an additional $32 million in operating expenses. In looking at our tariff sheets, you'll see that on the West Coast, we consume less heavy crude as a percentage of inputs, which increased costs. Our production yielded less high-value products, notably gasoline. As a result of the delays and downtime, we did build high-priced crude inventory, which will be consumed in the first quarter. Again, while Q4 was clearly disappointing in California, I believe our West Coast system will be significant contributors to our results in 24, as it has demonstrated over the last few years. Looking ahead to Q1 across the system, we have a hydrocracker turnaround in Toledo beginning this month, and an SEC turnaround on the East Coast beginning in March. With industry maintenance across the refining space increasing, we have seen significant improvements in our market cracks in February. Indeed, the outlook for 24 is constructive, and we are focused on positioning our assets to perform to their potential. Global refining capacity, including new additions, and refined product demand remain tightly balanced. The refining industry has not been able to sustain product inventory builds and balances remain tight to historical levels with growing demand. Disruptions in historic trade flows and patterns are creating tension in the market that is accruing to U.S. refiners, specifically coastal U.S. refiners such as PBF. With this favorable market backdrop, PBF should continue delivering strong earnings and free cash flow and generating long-term value for our shareholders. On the regulatory front, we are pleased to report that we have reached an agreement with the Bay Area Air Quality Management District on a path forward with regards to Regulation 6-5, which will achieve the mutual goal of lowering particulate emissions. Consistent with expectations, we're able to reach a settlement where we will comply with Rule 6-5 without any mandated incremental investment when the rule goes into effect in July of 2026. Additionally, we do not expect any material changes to our operations or product yield as a result of the regulation. As we saw from activity earlier in the quarter, combined markets will continue to be volatile. The global replying system, and PBF in particular, will be nimble in adapting to market conditions. The focus will be, as always, on maintaining consistent operations coupled with disciplined, rigorous capital allocation. Before turning the call over to Karen, I want to take a moment to publicly thank all of PBF's employees for operating safely. Last year, PBF recorded its best year in our history from a personal safety perspective. This is across all segments of our business, including our employees and the contractors who work in our facilities on a daily basis. The achievement of the lowest lost time incident rate in our history is a testament to the focus of each and every person in the company in executing their daily routines with the utmost professionalism and care. With that, I'll turn it over to Karen.