PBF Energy Inc.

Good day, everyone, and welcome to the PBF Energy Fourth Quarter and Year End 2024 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 questions following management's prepared remarks. If anyone should require operator assistance during the conference, please press star zero or 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, Brittany. Good morning and welcome to today's call. With me today are Matt Lucey, our President and CEO, Mike Bukowski, our Senior Vice President and Head of Refining, 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 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. Consistent with our prior periods, we'll discuss our results excluding special items which are described in today's press release. Also included in the press release is forward-looking guidance information. For any questions on these items or other follow-up questions, please contact Investor Relations after today's 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.

Thanks, Colin. Good morning, everyone, and thank you for joining the call. Before commenting on the fourth quarter and 24 in general, I would like to address the fire that we experienced at the Martinez Refinery on February 1st. I personally want to thank all the first responders, including our own employees, the Contra Costa County Fire Department, Martinez Police, and the mutual aid responders from our local industrial peers who successfully battled the fire and established control. I'm thankful there were no injuries beyond first aid on a few folks. We cannot ignore the impact that this incident had on the surrounding Martinez community. PBF Energy earns the right to operate in the communities where we have facilities by being a responsible, safe, and reliable operator. We apologize to everyone affected by the incident. We need to maintain a cooperative partnership with the state, county, and city to move forward constructively. The fire began as refinery workers prepared for planned maintenance of a process unit. We were in the process of isolating shutdown equipment when the fire began. We are still early in the recovery process. Access to the point of origin is limited until the completion of ongoing investigations. We are in the process of assessing the extent of the damage and we have experienced personnel set up to determine the necessary next steps. Looking ahead, while we don't have all the answers, we fully understand the importance of the products that we manufacture for the people of California. While California is a difficult regulatory environment, the California market, with its unique specifications, is short refined products and thus relies on imports. The situation is set to compound itself with the announced shutdown of LA Basin Refinery scheduled for this fall. While the full impact from this incident is not yet known, it's important to note that PBF is properly insured for an event such as this. Moving on to the fourth quarter, results reflect the challenging markets faced by refiners, comprised mainly of a weak margin environment and poor crude differentials, which is a continuation of the conditions that dominated the second half of 2024. For the most part, our refineries operated well during the quarter. We successfully executed a major cap turnaround on budget at Chalmette. The turnaround work did adversely impact capture rates in that region. The operating performance of our assets reflects the dedication and focus of our outstanding employees who work 24-7 in all market conditions to supply the refined products that are still very much in demand. The weak margins and market conditions experienced recently do not reflect our longer-term view that global refining supply and product demand remain tightly balanced. We believe this provides a constructive backdrop for refiners as demand for our product continues to grow globally. Indeed, forward cracks look constructive. We expect to see a balancing of the disproportionate capacity additions we saw 2025 net capacity additions are expected in the 700,000 to 800,000 range, with product demand growth in the 750,000 barrels per day range. This assumes new capacity operates near an ounce capability, something we have yet to see in some regions. Additionally, narrow light heavy sweet sour spreads have been a headwind to our capture rate. This rewards lower complexity assets in the near term. That said, we like our predominantly coastal system and access to a broad variety of feedstocks that it provides. As the global crude picture continues to evolve, if we see a shift in the market conditions that allows incremental heavy and sour barrels to become economically available, that will benefit our system. There's a lot of turbulence in the markets, and PBF is focused on controlling the aspects of our business that we can control to best position ourselves going forward. One of PBF's strengths is our financial position. In this current market cycle, PBF's balance sheet provides us with flexibility to weather challenging markets and look ahead to the next market cycle. To be successful and enhance value for our investors, we must operate safely, reliably, and responsibly, and we must do it efficiently. With that in mind, our team has been developing a business improvement initiative across our refunding footprint. And as promised, we'll now turn the call over to Mike Bukowski for comments on our cost savings program.

Thank you, Matt. Good morning, everyone. As Matt mentioned, we have a number of initiatives ongoing at PBF that we are collectively calling our Refining Business Improvement Program, or RBI for short. Achieving our targeted cash expenditure savings will be a corporate-wide effort that focuses on improving our current standards of fiscal discipline and operational excellence. We are committed to improving what are already excellent programs. We have identified several opportunity areas within the refining business. We've established teams to systematically capture these opportunities and effectively institutionalize the improvements to ensure the durability of these savings year over year into the future. We've launched five separate efforts led by different subject matter experts targeting over $200 million in run rate cost savings to be implemented by the end of 2025. As a basic framework for the program, we've identified energy usage and turnarounds as the largest opportunity areas, representing approximately 30 to 50% of our overall target. Beyond those areas, we are looking at our procurement practices, capital planning and expenditures, maintenance and organizational design. These areas represent approximately 10 to 15% each of our targeted savings. The five teams have held several idea generation sessions in the field at our refineries and have identified multiple initiatives to capture the savings goal. Some of these initiatives are already underway. The new ideas will be prioritized, developed into implementation plans, and resourced. By the end of the first quarter, we expect to have an overall implementation plan with clear line of sight to our goal. As a commitment to our employees and to our external stakeholders, In the future, we will provide more detail on our progress in terms of what we are doing and the savings generated, all while continuing to operate safely. With that, I'll now turn it over to Karen Davis for our financial overview.

Thank you, Mike. For the fourth quarter, we reported an adjusted net loss of $2.82 per share and adjusted EBITDA loss of $249.7 million. Included in our results is a 4.8 million loss related to PBF equity investment in St. Bernard Renewables. SBR produced an average of 17,000 barrels per day of renewable diesel in the fourth quarter. First quarter RD production is expected to be 10,000 to 12,000 barrels per day as a result of a planned catalyst change in March. Cash flow used in operations for the quarter was approximately $330 million, which includes a working capital headwind of approximately $83 million. Consolidated CapEx for the fourth quarter was approximately $237 million, which includes refining, corporate, and logistics. Full-year 2024 CapEx was approximately $1 billion. As mentioned on our third quarter call, this amount includes approximately $145 million of cash outflows related to our 2023 capital program for work completed at the end of 2023. You should note that our CapEx guidance is on an incurred basis, but our cash flow statement will reflect what we actually spend for the capital expenditures and turnarounds in the period. Through share repurchases and our dividend, we returned approximately 60 million to shareholders in the fourth quarter. Since our repurchase program was introduced in December of 2022, through the end of the fourth quarter, we completed approximately 1 billion in share repurchases. This represents over 17% of our outstanding shares at the beginning of the program. Additionally, our Board of Directors approved a regular quarterly dividend of 27.5 cents per share. We ended the quarter with approximately $536 million in cash and approximately $921 million of net debt. Maintaining our firm financial footing and strong balance sheet remain priorities. Our ability to fund operations and continuously invest in our assets will always be of paramount importance. We entered last year with the strongest balance sheet we have ever had. Our under-levered balance sheet enabled us to increase net debt during the weak market conditions of 2024. As the market rebalances off the 2024 lows, we expect to use periods of strength to focus on de-levering and preserving the balance sheet. After prioritizing our balance sheet and operations, we'll look at all capital allocation opportunities to determine which promotes the greatest long-term value. Operator, we've completed our opening remarks, and we'd be pleased to take questions.

In a moment, we'll open the call for questions. Callers limit each turn to one question and one follow-up. You may rejoin the queue with additional questions. If you would like to ask a question, please press the star and 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. And we will take our first question from Roger Redd with Wells Fargo. Your line is now open.

Hey, good morning, everybody. I don't think I changed my name, but I'll roll with it here. Anyway, quick question for you on, you know, just focusing on Martinez here. Recognizing regulatory environment in California is, you know, is what it is. What's the timeline you believe that we will get greater clarity on, you know, what the damage is, what it'll take to fix it, and, you know, when you'll be allowed to do the work? What's kind of a broad guideline we should consider here?

Thanks. Thanks, Mr. Redd. Look, the reality is the sort of ground zero where the ignition took place, it's actually still cordoned off. We expected, quite frankly, to have access to it already, but we don't. So, again, I'm getting dangerously close to speculating. I suspect that we will get access to that area shortly. And as I said in my comments, I mean, we absolutely have to work collaboratively with all the different stakeholders as we look at and investigate what happened. And so once we get full access to the site, and we have to appreciate we were commencing a turnaround, and obviously now there's damage from the fire. So there's a multi-pronged effort to assess moving forward. But I suspect we'll be getting access to that cordoned off area very soon. And then we already have teams, as I said, on the ground doing the work they can do now. But we should be able to, you know, over the next short period of time, have a much better assessment. It just so happens this call coincided at a moment in time that was in front of that. But over the next, week or so, I think we'll have a much better view. And all I can promise to you and to our shareholders is to communicate openly and transparently as we learn things going forward.

Understood. Yeah, timing is everything, right? The second part or the second question I have also ties in with this. Given it is premature to know exactly how long it's down and what the costs are, if we look at Q4 results, which consume some cash, Q1, which let's just say it's neutral or a little bit of a negative impact based on where things are tracking so far, what are some of the levers you can pull on in 2025 to ensure that the company know is in a sufficient position liquidity wise to operate with one of the units down to do whatever repairs are necessary you know are there referrals or capex are you know i'll i'll leave some of the bigger kind of topics out there for you to answer rather than putting words in your mouth but what should we watching maybe that's more of a question for you karen i'm not really sure but Just with the uncertainty, how should we think about what you'll do from a cash position standpoint?

I'll make a couple comments and then turn over to Karen. You know, in regards to our financial strength, Karen, I think, mentioned in her remarks that we started 24 with the strongest financial position in our history. I would say we started 24 with the strongest financial position in our industry, even where we sit today after a difficult 24 market conditions. If you go back to when we became a public company and we had the intent on coming out with a conservative balance sheet, our balance sheet today, even though our company is more than twice the size and we own all the inventory, our company today on any debt metric is well below where we originally designed it when we became public. And when you look at 2024, we were able to navigate the year without impacting CapEx because we felt like that was the right thing to do. Everything is predicated on your view of the market. You're not always right, but you're always evolving that view. And so we'll always take that view in combination with the financial strength we have and operate our business as best as we can. So in 24, we didn't defer any spending. We invested in our plants as we should, and indeed 2025 looks constructive. The downtime at Martinez, we were scheduled to be down for 60 days for a major turnaround at Torrance. This will impact that schedule, but our ability to generate cash as a company will not hinder on Martinez in isolation. So we're in a really strong financial position. Our outlook is positive, but we always have the capability to the degree our outlook changes or the market changes to manage our business and the capital and the work that we do at our facilities in conjunction with the market that exists. Karen, if you have any other...

Well, I just would add, obviously, over the past few quarters, you've seen us rely on our under levered balance sheet to support both operations and share repurchases. At the end of the fourth quarter, we were at a 16% net debt to cap ratio. We've got $2.4 billion available under our ABL, as well as the other triggers that Matt mentioned. Going forward as the market normalizes and we see improved cash generation, we're going to refocus again on reducing leverage as a top priority over share repurchases.

It is a core tenet of how we're running this business, and that is when markets are strong and we're generating cash, we intend to under-lever ourselves, and that gives us the flexibility and the luxury of managing the business without being hindered by financial constraints when markets are more difficult.

Thank you.

Thanks, Roger.

We'll take our next question from Ryan Todd with Piper Sandler. Your line is open.

Thanks. A follow-up, one follow-up on Marquina. You mentioned the insurance that you have that should offset some of the impact of this. Can you maybe help us walk through how the insurance offset works, what sort of the impact it might offset if it's too early to say at this point? And then as a second question on renewable diesel, if we switch gears over there, can you maybe provide an update? There's a lot of moving pieces here into the early part of 2025. Maybe an update on your view of the market and how you might approach, how you think you might approach 45C credits in the first quarter, if you think you'll be able to book or not book or any of those dynamics. Thanks.

Sure. So in regards to insurance, and I can get into absolute specifics of it, but as a company, You know, we've been procuring property insurance since we began. It's a proper risk management tool. We have a very good relationship with insurance providers, with the insurance community, and we've worked very closely with them every year. And so all I can tell you is we absolutely have the proper coverages with the proper providers, and we'll be working with them As we assess what happens, and it's truly to speculate on that. So I feel very, very comfortable and pleased. Insurance is a funny thing. You hate paying for it when you don't need it, and you hate the fact that you need it, but you're happy that it's there in a time like this. So in regards to RD, nothing is static, obviously. I think the developments over 25 are going to be incredibly interesting to watch. The biodiesel guys have a lot of headwinds. You're going to have less imports into the country. The 45Z is going to be below by all indications, although that was the previous administration's guidance, so there's no guarantees. I would think the 45Z, economics from the 45Z will probably be less than the Lenders Tax Grant. And over time, my guess is the RIN will sort of set the market for how much RD needs to be manufactured. But I come back to, and I can't bring up RD without bringing up our partner. We've been lockstep with them. Similar outlook on the marketplace. similar commitment to our SPR venture. So we're very pleased with the partnership we have. I think as we look at the marketplace, our ability to pre-treat feeds, our location in the Gulf Coast, I think we're well positioned to be a top quartile performer in the marketplace as it evolves. In regards to accounting for unclear 45Z or producer tax credit language, We're going to use the language that we have at the time that we create, you know, we publish our books and records. Karen, I don't know if you have.

No, that's right. You know, similar to what some of our peers have announced, we will, we do expect to accrue the credit based on the guidelines that are available right now.

Great. Thank you.

Thank you. We'll take our next question from Minav Gupta with UBS. Your line is open.

good morning i have more of a theoretical question but let's say we do go down the line of peace between ukraine and russia it will have multiple impacts for refiners obviously more product can come in but what can also happen is more heavier crews come to the market bgo comes to the market do you think in that scenario if we do have a complete piece between uk and russia you could see a wider quality discounts, heavy light widening, which could help PVF out?

I do, but I'd ask Tom to... Yeah, thanks, Manav.

You know, in regards to the question, I mean, I think it's probably really what are the terms of the piece, but, you know, broadly speaking in the way that you presented it, In terms of peace at that point, certainly should be a catalyst for a wider light heavy differential. I think particularly also in the Atlantic Basin, just because the Pacific Basin has been the primary beneficiary of Russian crude over the last several years. But I think we really need to watch that as that plays out. I mean, clearly there's a lot of factors in the market today. You know, I think in terms of some aspects, the things that we see that for every policy action, there's a countermeasure or another reaction and some other things as we've gone through the sequencing. But in a vacuum, you know, that coming to, you know, some resolution, you know, certainly would be, you know, a positive catalyst for wider light heavy.

Perfect. My quick follow-up, which I wanted to ask you is, When you did buy Martinus, one of the thought processes was if one of the assets on the West Coast does go down, you wanted a couple of assets there to benefit from it. In this scenario, when Martinus is down, can you run torrents hard at nameplate capacity or maybe even over to actually benefit from a spike in the West Coast margins?

The Torrance Refinery is running and will maximize, as we do at all of our facilities, to the market that exists. As I said, Torrance is there and is producing products which are desperately needed in California.

Thank you.

Thank you. We'll take our next question from Neil Mehta with Goldman Sachs. Your line is open.

Yeah, staying on the macro, obviously a very dynamic environment around tariffs, and you guys do import some barrels, including some crude from Canada, but also some waterborne barrels. So just your perspective of how this potentially could ripple through the system and any frameworks that you're using to evaluate a very dynamic situation.

dynamic it is, I'll ask Tom to comment as well. Look, the Canadian and Mexican tariffs seem to be different than some of the other tariffs that are being imposed in that it does seem to be a cudgel to broader geopolitical issues, whether it's immigration or fentanyl or other things. And so the duration of those tariffs that tariffs may be different. It does seem to be sort of isolated into a person of one of how these decisions are being made, but he's clearly getting advice because even when the tariffs were threatened before, there was a recognition, obviously, that oil was getting a different mark than the rest of the imports from Canada. Canada and Mexico are a bit different. I sort of chuckled to myself. Canada is more of a Mexican standoff because their alternatives are much less in terms of if they don't sell it to the US, it's going to stay in the ground. Mexico obviously has more flexibility with having access to water. That being said, TAB, Mark McIntyre, The mid time needs Canadian refineries I Canadian oil to you know maintain throughput and so anytime that there's going to be. TAB, Mark McIntyre, disruption of that size if it happens, it will have some impact on throughput i'm sure I do think it's important to note, certainly on the Canadian side, the movement, the respective dollars, so if you're a Canadian producer. what is the net difference if you're looking at it sort of on a post currency trade. But it'll be interesting dynamic. Tariffs are being threatened and initiated on a daily basis. On that Monday when the Canadian and Mexican tariffs were supposed to be implemented and then postponed, we went in a six hour period where Obviously, there was going to be a bullish TI event by imposing tariffs on Canada and Mexico. And six hours later, that was off the table, but the Chinese were putting tariffs on U.S. crude, which was bearish. So there's nothing static for even a moment, but we've got a perfect team. I'll hand it over to Tom sort of on every aspect of this.

Yeah. In terms of, I mean, Matt gave a very, you know, fulsome response there. I mean, I think in terms of, I think that market reaction, which we saw on that Monday, I think is very, you know, a key indicator as to how the market would respond in terms of, you know, TI was, you know, outperforming, you know, the waterborne crudes, you know, certainly had a strong crack response in terms of products on the, particularly in the observable markets are just staring at screens, right? You know, you had outperformance in NYMEX, you know, the cash markets in certain areas didn't have time to sort of respond as people were sort of just waiting in terms of figuring out for a little bit more certainty. But, you know, I think it does get to the point where when you look at the market today, I do think that the likelihood of tariffs, the market is saying, you know, they're not there. I mean, you have TI spreads are basically on six-month lows, and that is a reflection of the fundamentals and the seasonal reality of the marketplace that we are in today, right? I mean, you're in the maintenance period, you got low runs and you're sitting in a situation where crude is building coming off of basically the low of the five year and is now moving closer towards the five year, but still has some work to do and products have been drawn. I mean, so, I mean, if we get back specifically to the effects of the tariffs, I think in terms of, I don't really have anything else to add in terms of Matt's response to us.

Uh, the only thing else I would add is, um, As I look at it, I don't see PBF being disadvantaged relative to the rest of industry in the U.S. in any way, shape, or form.

That's great. And the follow-up is, maybe this is for you, Matt, maybe for Karen, but you pointed to net debt to cap, kind of at that 16% range, and therefore the priority, even though that's a pretty good balance sheet, is to get just to delever a bit before you return capital to shareholders in the form of buybacks. What's the framework? Is that decision point of a certain leverage level, either on that metric or net debt to EBITDA that we should be looking for when you say you want to flip from deleveraging back to buybacks?

I think it'd be impossible for us to give you one metric. I think it's a combination of the current market we're in, the outlook going forward in the short term to medium term, how our assets are running. You have a lot of sort of different equations in the bowl of soup. But what we intend to do is set up our company as best we can for our investors. That includes a really, really strong balance sheet, and it also includes returning customers cash to shareholders, and we'll balance that to the best of our ability.

Is there a target through the cycle, that number maybe is a better way of asking it?

You know, I would say maybe I'll answer the question with what we could see as the maximum, and that would be our goal has always been to maintain investment grade level credit metrics, which we think could be as high as less than 35%. Currently, we're at 16%. It's our goal to be very conservative.

Thanks, Karen. Thanks, Matt. Thank you.

Thank you. Our next question will come from John Royal with JP Morgan. Your line is open.

Hi, good morning. Thanks for taking my question. So my first question is on 4Q cash flows. We noticed cash from ops, even X working capital came in a little late relative to earnings. It looks like there's 100 million plus of deferred tax headwinds as one of the drivers. I was just hoping for some color on the deferred tax piece and any other major items to call out for 4Q.

Yeah, I think you hit on one of the drivers. The other one was just a and this is the main one, is an overall decline in our net payables related to inventory. Looking forward into Q1, working capital is going to be driven primarily by hydrocarbon pricing. But I would also point out that we did make a TRA payment of $130 million in January, which will provide a headwind.

Great. Thank you, Karen. My follow-up is on the business improvement plan. You gave a little bit of color in the opener and mentioned the key piece being around energy usage and turnaround. And I think, you know, next quarter maybe some more detail. But how do you expect the $200 million to phase in this year? How should we think about kind of first half versus second half? And does the outage of Martinez impact the plan in any way?

I'll make a couple comments then turn it over to Mike. In regards to the $200 million, what we said last quarter and what the $200 million is pointing to, it's run rate savings as of January 1, 2026. So we're going through each of our refineries, each of our processes that support our refineries, and coming up with cost-saving initiatives, plans, and beginning to execute those savings what we the pledge that we made was as of the beginning of next year would be fully implemented so over the course of 25 there will be some savings but the savings will not be fully achieved in 2025 and no i don't believe the the events at martinez will impact this initiative at all uh yeah well said matt i think as we as

As we develop the detailed implementation plans prior to the end of the first quarter, we'll have a really good line of study to how much exactly going to hit in 2025. But we will be adjusting every time we do an initiative and we account for the run rate savings, we will be adjusting our budget targets for 2026 so that those savings remain sustainable. We'll be putting in operating KPIs as well as the financial KPIs, but operating KPIs associated with all those cost savings initiatives so that we keep our eye on the ball and that those savings will continue to be realized throughout 2026 and beyond.

Very clear. Thank you.

Thank you. We'll take our next question from Jason Gabelman with TD Cowan. Your line is open.

Yeah. Hey, morning. Thanks for taking my questions. I wanted to go back to the Martinez incident if I could. And it's not completely clear. Is the entire facility shut down right now, or is it just a unit that shut down? Can you give us any more color as to what unit was impacted? And as you think about your contractual obligations, do you need to source product from third parties in order to meet those while the asset's down? Thanks.

Alright, so specifically in regards to you know the units we were in the midst of commencing what I referred to as essentially a 60 day cat turnaround. The cat feed hydrotreater was shut down in front of that and pipe work was being done, and so it's in the vicinity of the cat feed hydrotreater. As a result of the fire, we did take down the entire refinery, uh is down uh completely now and so you have multiple work streams you have to turn around work and then uh assessing the fire and then what it will take to get other units back on stream all three on their own schedule got it and in terms of um um commitments with customers and needing to source product from oh yeah i'm sorry uh yeah from a commercial standpoint we don't have anything to report. We'll be able to manage through all the commercial necessities with our team, and there's nothing to highlight at this point.

Okay. Got it. And then just a quick accounting one. I noticed in your full year 25 guidance that Jan 1 share count was actually up versus 4Q. I think it was guided to 121 million versus 115 and 4Q. Was that just related to incentive comp or was there something else that drove that?

Thanks. I think that's going to be related to potential dilution from incentive comp.

Okay. Great. Thanks for the answers. Thanks.

Your next question comes from Matthew Blair with TPH. Your line is now open.

Great. Thank you. I wanted to circle back to the RBI program, so the $200 million of run rate cost savings. I think that comes out to about $0.60 a barrel. Could you talk about how we can measure that? Does that all come through refining OpEx, or would it also come through corporate GNA? You know, just looking at your published OpEx in 2024 versus like 2018, 2019 levels, it's about $2 a barrel higher. So is this $0.60? Should this be thought of as a pretty conservative figure? And there might be more wood to chop after that. Thanks.

So first of all, in terms of the accounting, most of it is going to come through refining OpEx, but the capital projects and the turnaround will come through our capital program. I would think about it that way. On the $0.60 per barrel versus previous years, I would consider this a start. We think that there's more opportunity beyond 2025. This is a program which is not going to end. This is going to be a new way of life for us in terms of driving continuous improvement, not only in how we manage costs, but how we innovate to drive efficiency. And we will let that spill over to all the things that we do in terms of managing our business, including how we manage our reliability and how we manage our health and safety as well. So I would look at the $0.60 per barrel as the first step of a long journey.

What Mike just said is my expectation, our internal expectations, are higher than what we promised the street. As a management team, we certainly are focused on meaning what we say and say what we mean in regards to we're going to not over promise and deliver results as we communicate them. So the other thing I would say that this program is very, very focused on, if you go back to the depths of COVID, at that time, We announced cost savings to the tune of, or that we achieved cost savings to the tune of about $140 million. Much of that eventually came back through the different cycles that we existed in. We're very, very focused on the sustainability of these cost savings on a go-forward basis. So not that it's cut once, but it's cut once and it doesn't return.

Justin Cappos- sounds good and then you also mentioned that refining capacity additions should match up pretty well with incremental demand growth, this year, I think there's also a comment that the Ford cracks look constructive do you think at at the strip that pbf would be free cash flow positive this year.

Justin Cappos- Yes.

Justin Cappos- Great i'll leave it there thanks.

Thank you. Your final question will come from Paul Chang with Scotiabank. Your line is open.

Hey, guys. Good morning. Matt, when I'm looking at your first quarter throughput guidance, East Coast seems like it's low, given that you only have the hydrocracker turnaround there, which is a pretty small unit. Is there anything we should be aware why that the guidance is relatively low and how that impact on your full year expectation for that region? That's the first question. Second question that somewhat related to TALIC, but I'm not going to ask that what you think about the TALIC. But instead, for Tornado, you run a lot of the same crew. If you repay sinkhole with domestic light oil, how does that impact your refinery yield, throughput, and OPEX? Just trying to get some better understanding on that. Thank you.

Yeah. Okay. So your first question was in regard to East Coast throughput. I think the throughput that is down is a bit on the back of the market that has existed. And so, you know, obviously we throttle throughput based on the market in which we're operating. And once a weaker market, you know, throughput can come down. So there's certainly nothing structural or nothing from a work standpoint that's precluding us. And if the market's there, we'll certainly capture as much of it as we possibly can. In regards to Toledo, There is some element, I referred to it as a Mexican standoff before in terms of our, we do not have the ability, nor does anyone in the region have the ability to simply replace all Canadian barrels by domestic supplies. The pipeline capacity isn't there. Pipelines have been reversed. And so there is some element of, tariffs could, could push down throughputs, or ultimately the producer's going to pay and the consumer's going to pay, but to the degree there's not a market for the refiner to run, we're not in the business of manufacturing fuel that is uneconomic to run. Like I said, it's an incredibly dynamic situation, and if there is tariffs put in, the market will balance itself to produce the products that are needed in all the regions.

Matt, if the domestic light oil is available for Toledo, and indeed that you're going to replace Senku and Rangit, how that impacts your product yield and full put if you if that is available and you make that decision so i'm trying to understand what technically is available uh cat is the capability that you can do uh in that particular case and and also that on my first question on the east coast um if the first quarter end up that will be the one way uh should we assume full year your one-way would be lower than the previous four-year guidance. Thank you.

No, as I said, you have to make a market assumption to drive what you think throughputs are, but we're not limited by any stretch on the East Coast. In regards to the theory, I think your question is theoretical. If you were able to deliver all U.S. domestic light suite crew, what would be the yield impact to Toledo? Toledo, not unlike any other refinery, would have a yield impact. We run a significant slate of synthetic crude out of Canada, which has specifications and qualities that Toledo is optimized around. To the extent you change that crude slate for Toledo or for any other refinery in Chicago or throughout the pad, there will be yield impacts. And it's too difficult to get into the specifics of exactly what happens, but throughput will be down. By the way, that's not limited to Pad 2. I mean, it's true in Pad 5 or any other pad. To the degree you're not running your optimized crude, it's the optimized crude for a reason. There will be throughput yield impacts.

Thank you. Matt, since I'm the last caller here, can I sneak in a third question?

All just for you.

Thank you. Really appreciate it. On the insurance, I assume that you have the business interruption insurance also in here. And can you tell us what's the deductible?

I don't want to get into specifics on insurance. We have a manageable deductible. And as I said before, we have all the proper insurance in place.

Okay, we do. Thank you.

Thank you. We have reached the end of our question and answer session, and we'll hand it over to Matt Lucie for closing remarks.

We greatly appreciate your participation today and look forward to communicating with each of you in the future. Thank you very much.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.