Good day, everyone, and welcome to the PBF Energy First Quarter 2026 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 on your telephone keypad. Please note that 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, Angeline. Good morning and welcome to today's call. With me today are Matt Lucy, our President and CEO, Mike Bukowski, our Senior Vice President and Head of Refining, Joe Marino, our CFO, and several other members of our management Copies of today's earnings release and our 10Q 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. I'll now turn the call over to Matt Lucey.

Thanks, Colin. Good morning, everyone, and thank you for joining the call. Indeed, today is a moment. With the disruption in the Middle East, the world is in greater need of the products we produce, and therein lies the momentous opportunity for our company to perform within PBF. The spotlight is squarely on Martinez. We are bringing Martinez back online and will shortly be supplying the California market with our full capabilities. This could not be coming at a better time for the West Coast and California markets. Three main areas of focus in terms of the restart at Martinez. Martinez, the Catfeed Hydratreater, the Alkylation Unit, and the FCC. The Catfeed Hydratreater and Alky are up and both with the FCC we expect to be making finished products this weekend. While the rebuild effort was completed in February, there is no question the restart took longer than expected to ensure that all the work accomplished at Martinez over the last 14 months was capped off with a safe restart moving on to the broader environment the events the events in the middle east have caused the largest disruption ever in the low markets and the effects are indeed dramatic and constructive for pdf initially approximately 15 million barrels per day of crude and 5 million barrels per day of product were trapped inside the straits of The loss of crude barrels was most acutely felt in Asia, but the shortages have cascaded to other markets. Eighty percent of the crude flowing through the Straits was destined for Asian refineries, and those refineries, in turn, supplied products to many markets, including the U.S. West Coast. As refining runs in Asia have been rationed due to lack of inputs, the loss of products has affected every market. Compounding this impact, the products stranded in the Arabian Gulf have tightened markets in Europe and subsequently the Atlantic Basin. In the near term, the markets will continue to adjust in real time to demand signals for both crude and products. Global pricing will dictate trade patterns. Markets are calling for both U.S. crude and U.S. products to meet demand. While the U.S. has been somewhat insulated, there are signs that demand is being impacted globally by both pricing and supply issues. It has never been more evident that U.S. refining is critical, and this is most apparent in regions like the West Coast and East Coast that are short refining capacity and rely on imports from unmeet demand. It will take some time for trade patterns to normalize and post the confining fundamentals should remain strong throughout, supported by tight refining balances. Coupled with low product inventories around the world, buying balances look constructive and the inevitable restocking should provide a favorable factor to come. PBF remains focused on controlling the aspects of our business that we can control. To be successful and enhance value for our investors, we must operate safely, reliably, and responsibly, and we must do it as efficiently as possible.

And with that, I'll turn the call over to Mike Bukowski. thank you matt good morning everyone before updating on the progress of a refining business improvement program i'll provide a few comments on first quarter operations and our martinez refinery status outside of the west coast our refining system ran reasonably well all of our refineries navigated record cold temperatures with minimal disruptions on the west coast as matt mentioned martinez is in the final stages of its phased restart has been methodical and required many levels of safety and process checks to ensure that all equipment was correctly manufactured and installed before we introduced hydrocarbons the cat feed hydro treater and alkylation unit have been operating and producing finished products as well as the intermediates required for the startup of the fluid catalytic cracking unit the martinez team and a supporting cast too numerous to mention worked tirelessly to get us to this point all involved in the project additionally while martinez operations were being restored torrents underwent a turnaround early in the first quarter and with that event complete as a clean runway for the remainder of 20 seeing progress from our rbi program We achieved our 2025 target of $230 million of annualized wind rate savings. This goal includes approximately $160 million of OPEX reductions against our 2024 benchmark and is incorporated in our full 2026 budget. While the ongoing Martinez process is causing some noise, with the first quarter results, we are very comfortable in meeting or even exceeding our stated target. While we are improving our maintenance and operational efficiency and reducing energy consumption, our main priority will always be to focus on safe, reliable, and responsible operations across our system. With that, I'll now turn the call over to Joe Verino for our financial overview.

Thanks, Mike. For the first quarter, reported adjusted net loss of 88 cents per share and adjusted EBITDA The discussion of first quarter results excludes the net effect of special OPEX related to martinez refinery incident a 106.5 million dollar gain on insurance recovery a 313 million dollar lcm inventory adjustment a 9.4 million dollar gain relating to pbs 50 share of sbr's lcm adjustment for this order and approximately 9.4 million dollars of charges associated with the rbi initiative as well as other items detailed in the reconciling tables in today's press release PVF's results reflect several unfavorable conditions that manifested in the first quarter, both operationally and commercially. Capture rates for the quarter were negatively impacted by West Coast operations, a higher flat price environment increasing the headwind of low-value products, higher RINs expense, and derivative losses recognized in the quarter. These capture headwinds more than offset benefits from the improving jet-to-diesel spreads and certain crude diffs. Operationally, our Torrance refinery was in planned turn around during January and February, while our Martinez refinery restart was delayed. We built up inventory levels in the first quarter primarily in anticipation of the planned restart of Martinez. This occurred as global pricing for hydrocarbon surged on the back of the conflict in the Middle East, resulting in losses in our typical hedge program. Our results for the quarter reflect an aggregate derivative loss of a little over $200 million, dollars. Approximately half of this loss related to unrealized amounts expected to be mostly offset in the second quarter as the physical barrels run through our refining system. The 106.5 million dollar gain on insurance recoveries related to the Martinez fire is a result of the fourth unallocated payment agreed to and received in the first quarter. This brings our total insurance recoveries to one billion dollars net of our deductibles and retention including the amounts received in 2025. Important to note while the bulk of the spending related to Martinez is behind us the claim is ongoing and we expect to recover incremental funds as we continue to work with our insurance providers towards potential additional interim payments and finalization of the claim in an expeditious manner. Shifting back to our normal quarterly results discussion also included in our results is an approximate eight million dollar EBIT of benefit excluding lcm impacts related to pbs equity investment in saint bernard renewables fbr produced an average of 16 700 barrels per day of renewable diesel in the first quarter fbr's production was as expected but results reflect the impact of improving market conditions in the renewable fuel space with the finalization of the rvo in march with the setting of the 2026-27 rbo the market's now the ability stabilized and should result in favorable margins. PBF's cash use and operations for the quarter was $324 million, which includes a working capital draw of approximately $340 million, mainly due to movements in inventory and the impact on our net payable position as a result of rapidly moving commodity prices. On our last call, we mentioned our expectations for elevated first quarter CAPEX and working capital outflows primarily related to the Martinez restart and normal seasonal inventory patterns. The capital spending for the Martinez rebuild is essentially behind us and we expect working capital to normalize as operations restarts unfold. Cash invested in consolidated CapEx for the quarter was $320 million, which includes refining, corporate, and logistics. This amount excludes first quarter capital of approximately $189 million related to the Martinez incident. on the surface the q1 figure might be slightly higher than expected and this is because it includes approximately 100 million dollars of net carryover from 2025 that had not been cash settled at year end the balance is our normal quarterly incurred amount including including the turnaround at torrent given that and the noise related to the martinez rebuild would be helpful to more broadly consider the 2025 and 2026 capital programs over a two-year period we end of the quarter with 542 million dollars in cash and approximately 2.3 billion dollars of debt at quarter end our net debt to cap was 36 percent and our current liquidity is approximately 2.4 billion dollars based on current commodity prices cash and borrowing capacity under our abl our net debt increased in the first quarter due to planned capital expenditures continued spend on the martinez restart and working capital outflows primarily related to a building inventory Going forward, inventory should normalize as operations ramp up and we should see a resulting tailwind in working capital cash flows. Additionally, with our capital spend for the Martinez rebuild predominantly behind us, we expect to further progress our Martinez insurance claim and receive additional payments. Once realized, these factors alone should principally offset the increase in net debt experienced in Q1. Maintaining our firm financial footing and a resilient balance sheet remain priorities. As we look ahead, we expect to use periods and strength to focus on reducing both our gross and net debt. Operator, we completed our opening remarks and we'd be pleased to take any questions.

Thank you. In a moment, we will open the call to questions. The company requests that all 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 star 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 your speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment please, while we follow the questions. the first question comes from manav gupta with ubs please go ahead good morning i want to start a little bit on the global macro side the way we are think seeing things matt is 2q and 3q are a tale of two halves those who have the crude and who can run and those who don't have crude and they may have the best kit out there but they don't have crude And you are in this category where you have the crude and you can run. So can you help us understand, given relatively low U.S. Nat gas price and availability of crude, does that mean that U.S. refining has an advantage over most of their global peers at this point of time?

Manav, I don't think there's any question on that. I think the outlook for the second quarter and the third quarter look extraordinary, only because the world is going to be in desperate need of our products. And as you say, we're insulated from a natural gas perspective. Heck, we're insulated from a physical security perspective. The best steel, very stable workforce, and indeed, we have access to crude. Obviously, the pricing on crude is determined on a global basis. But when you stack up the U.S. industry compared to the rest of the world, it stands out. And then when you look within the U.S., I think particularly PBF's coastal complexity is incredibly well positioned.

Perfect. Thank you so much. And a quick follow-up here, and this is a question we have pretty much got all morning. What gives you the confidence that this time Martinus will be able to restart within probably a week or so and there will not be any further delays?

I'll turn that over to Mike. So the delays that we saw over the past couple of months were primarily focused on the process to verify the equipment, make sure it was constructed and installed properly. and now we're at the point now with two units up in operations or we always had a phase startup it was always going to be the cat feed hidey treater it was always going to be the accolation unit those two units started up without incident they were got up safely and we're essentially you know if you make the analogy of a football game we're in the fourth quarter on the process on the fcc the unit is heating up uh and we're we're we're a day or so away from putting feed the unit. So it's very close. We've got all the checks that we've done. We've passed a lot of the major hurdles that you typically go through in an FCC startup.

So that gives us the frustration of the duration, but the alternative simply wasn't overtaken. We're done in the name of caution. It obviously was disruption, and as such, it took a bit longer. That being said...

Thank you so much. All the best for second quarter.

Thank you.

Thank you. The next question comes from Alexa Patrick with Goldman Sachs. Please go ahead.

Good morning, team, and thank you for taking our question. We wanted to ask on the East Coast dynamics that that region looks tight from a product perspective, but there's also a lot of moving pieces around crude access, freight rates. So can you just talk about the exposure there and how you're seeing capture rates shake out?

Yeah, it was in my comments. I mean, whether you're talking about the East Coast or West Coast, you're relying on imports. And so how critical our infrastructure is within those pads, it's highlighted. It gets high over hurricanes. It's completely disrupted. But our assets are running well, rewarded handsomely, reliably.

Yeah, I mean, I would just, you know, add in terms of what we've seen, particularly, you know, over the last, you know, several reporting weeks, right, or even in the past couple, in the past month or so, right, in terms of the U.S. has been exporting product, not just off of the Gulf Coast, but out of the East Coast. Inventories have been depleted, and obviously depends upon how long the disruption in the Straits of Hormuz continues, right, but, you know, the longer it goes, obviously, we stay in a very point of friction. But on the flip side of it is that when we look at it in terms of resolution in terms of the conflict, you then potentially also have OPEC in a fractured state with the announcement of UAE looking to depart. I think that all sort of fits within the sort of constructive outlook and the situation where in terms of markets that are deficit, you know, challenging in the short term to find that resupply from any other region, because it certainly would appear at this point that, you know, Asia is buying the minimum amount of crude that they can purchase to basically satisfy their local demand or the region's demand. And there's no expectation that they're going to be continuing to pull crude resupply just in terms of the sheer amount of time.

We'll have access to the...

Okay, that's helpful. And then our follow-up is just on capital allocation. Any more color you could provide on the optimal capital structure with Martinez back on and elevated margins? How should we just think about that cash flow generation being used?

I'll hand it over to Joe, but just one overriding sort of 10,000-foot comment I would make, consistent with all the comments that we've made for the last number of years. There are periods of excess cash flow, very conservative balance sheet, obviously, and during periods where the cycle is against us, we have that balance sheet to lean into. But that's requisite on times where we are generating excess cash.

Yeah, no, I would reiterate that. We do maintain, always look at our capital allocation framework comprised of the three pillars of invest in the business, invest in the balance sheet, and shareholder returns. But as Matt indicated, current market conditions persist. We're delivering as a means of transferring value from debt to equity, which would be a priority in the near term. You know, we did lean into the balance sheet and get back to...

Okay, that's helpful. I'll turn it back. Thank you.

Thank you. The next question comes from Joe Latch with Morgan Stanley. Please go ahead.

Hey, good morning, Matt and team, and thanks for taking my questions. So I wanted to ask on the West Coast, can you just talk about what you're seeing from a local crude pricing and availability standpoint here? Are those barrels pricing off of A&S right now? And then is there any competition that you're seeing from Asia pulling barrels away?

I'll make a comment and hand it over to Paul. You have to appreciate our position on the West Coast. And we've talked about this firm of gasoline and jet that means bringing those products. You have to be able to attract those products that are significant. But on the crude side, we talk about it less. We've seen an increase in production. PBF has its own pipeline infrastructure.

If you look at pricing of indigenous crude, it prices against ice. That's the format that it trades on. It trades at a discount because of the quality. It's a very heavy, sweet barrel, high tan material, somewhat captured because it can't go offshore. So it trades at a pretty good discount to ICE, which is obviously a pretty good discount to A&S. As far as the pull from Asia, the Asian program did pull a lot of A&S away from the West Coast in the current trade periods and the next trade periods.

It's a good supplement to some of the air upgrades that have been lost for those guys. So, yeah, we're seeing a pretty good pull.

Thanks. That's helpful. And then on the refining business improvement program, can you just talk about how that's progressing? So I understand the $230 million was achieved in 2025. Can you just talk a bit more about the path to the $350 million by year-end 26? Sure.

I'm just happy to report we're all on path, but Mike, why don't you give it?

Yeah, so the way we structured the program is we took the savings that we – the run rate savings that we had achieved last year. That was $230 million. That included capital. So just from an OpEx perspective, it was $160 million. dollars we put that into our budget um and then the first quarter we are right on that plan right now and you'll see as the quarters go by an increase in savings from quarter to quarter as other savings initiatives are implemented as well so that by the year end we would expect to thank you that's helpful thank you the next question comes from paul sankey with the sankey research please go ahead hi guys can you hear me okay okay you're fine paul good morning great hi

um can we you've you've talked a lot about around uh these questions but if i could just sort of keep digging a bit here please um matt did you say can you just say when martinez is up going to be completely up and running all units best guess did you say that's happening and then can we talk a little bit you've said some interesting stuff about how the crude slate is changing for example, you mentioned the Jones Act allowing you to take WTI. I was wondering, for example, is that WTI priced at Cushing? And, you know, can we dig a little bit into how your crude slate is changing given the whole mood situation? And again, you've addressed this, but are there major issues where, for example, jet fuel, how are you dealing with that? And is that getting exported? Can we kind of go through what the next two months will look like? Because I think the current market is guaranteed to be here for the next two months. And then if Hormuz starts opening up, I assume that all of that will reverse, but any longer-term comments would be helpful as well.

So just, you know, essentially we expect we'll be very, very pleased to get there. But, you know, it's, again, frustrating. Any nontraditional has been disrupted. The U.S. East Coast, but to the degree that we can reliably produce them,

we will be handsomely rewarded because uh they're in desperate need fair enough matt it was worth a try thanks oh it's tom i i would just jump in i mean i think you know certainly for us in terms of i mean your comment you know the you know maybe the next two weeks two months or certainty right i mean is that i think as we look at the sort of acute problems that the market's been doing or going through it really depends upon just really how asia felt all these uh it's now filtered into the U.S. market or the Americas, and we're certainly seeing that on product catching up, because initially this was just a crude problem and a distillate problem and a jet, and then therefore also recovery is going to happen soon as in months.

Yeah, yeah, and it's interesting that the Jones Act is helping you. Brilliant, or lack of it. Thanks, guys. Thanks, Paul.

Thank you. The next question comes from Doug Legate with Wolf Research. please go ahead.

Hey, guys. Good morning. I can't tell you how happy I am to hear you talk about translating value from debt to equity, but we'll take that one offline. My two questions, fellas, first of all, I'd like to maybe dig in a little bit and capture it. At the simplest level, what we're trying to feel, we've all been through these kind of spikes before, maybe not quite like this. But when you see extraordinary margins, the risk, I think, is that the market takes those extraordinary margins and assumes capture rate remains the same of those margins. You guys talked about headwinds. You talked about RINs. Obviously, you talked about crude slate. I wonder if you could just dumb it down and say, well, how do you anticipate your capture rate on these extraordinary margins to trend? Will it be the same? Will it be higher? Will it be lower? That's my first one. My second one is real simple on business interruption. And maybe it's just a balance sheet question. You haven't really given us a lot of disclosure on how much of the current balance sheet is still a net positive that will go away. In other words, when you pay out the remainder of the repairs, net it against how much you actually still get in the door for business interruption. And the root of my question is, you've been offline during extraordinary margins on the west coast you were supposed to come back up in december do you still get business interruption in the first quarter i'll lead it there thanks so capture rate an extraordinary will be very very difficult for you what price basis defied indeed you know jet on the west

coast it'll be very big definition or we're navigating it through the end of the day but

again yeah i'll just say given the fact that the claim is ongoing and the insurance proceeds we've allocated. Can't really give you any more detail.

Terrific, guys. Thanks for the answers. I appreciate it. I understand there's no precision here, but nevertheless, I appreciate the color.

Thank you. The next question comes from Philip Jimworth with BMO. Please go ahead.

Thanks. Good morning. The turnaround schedule for the year originally contemplated Martinez hydrocracker in 2q uh is this at all impacted by the later restart and or just what's the status here um what all would this turnaround entail um or imply as far as crew throughput facility you know we've we've been working that obvious high degree that that turnaround uh that we actually moved hasn't been completely finalized yet they have to go through uh you know a number of checks and again safety reliability okay great and then uh can you talk a little bit about about sbr and and the outlook here i mean we don't get a ton of detail on on profitability but clearly the margin profile for rd has has improved um any color as we head into 2q and and then separately just how are you reviewing your rent exposure currently uh net of sbr all right so sbr look

this is it's a happy moment uh there's no doubt and the reason one of the reasons we invested prospects the outs it's ever been uh since we've been up and operating than that but it actually very well may break uh literally where there's not sufficient all the color and final question

that's jason gibberman with td cohen please go ahead yeah hey uh thanks for taking my questions You discussed the Martinez hydrocracker turnaround and potential to push that out, but can you talk more broadly about the opportunity to push out maintenance later this year into next year and just how maintenance looks over the next couple years, given we could be in a period where margins are higher for a decent amount of time here? yeah hire for longer uh yeah and i'll just say in the short term uh we obviously uh just looking

at the next couple quarters we have a very very clean runway and so term mike why don't you make some comments yeah the second third quarter are pretty clean we do have some things coming up in the fourth quarter we always evaluate uh right around this time actually uh moving some things around there's some things that we may be able to do there's some things that are kind of locked in I'm not going to get into specific turnarounds and the likelihood of moving them at this point. I will say that this year was probably one of our heavier turnaround years in terms of our major turnarounds. We consider a major turnaround, whether it's a conversion unit or a crew unit combined together. So this is one of our heavier years in recent history in terms of the scope. But the next couple of years, we're a little bit later in 27 and 28. So specifically, I'm not going to mention any turnaround is going to be moved, but we do those evaluations.

Thanks. My other question is on the results for the quarter. You mentioned derivative losses impacting 1Q, I believe. You didn't quantify it. Can you talk about what that looked like for 1Q and what that maybe will look like for 2Q or how we should think about that going forward, just given in the current environment, I think some of these derivative losses could be a bit outsized.

Yeah, so we recognize a little over $200 million mark-to-market on derivative losses during the quarter. At the end of the quarter, there was about $100 million of unrealized. So there's still some offsetting physical barrels that will flow through to offset that and likely be a benefit in Q2. And then as far as Q2, actually, derivative impact will depend on where prices go from here.

The derivative, I understand, is a reducing, we will hedge inventory that is above and beyond our disruption we had on the West Coast. We're entering above and beyond what we, and as such, we were managing the price of that. Anecdotally, I think, the company did an exceptional job of sort of navigating the unprecedented volatility that we saw. call-outs, but again, it's a sit-to-market that you're then going to realize the physical

Thanks for that, Collin. That's helpful.

Thank you. We have reached the end of the question and answer session, and I will now turn the call over to Matt Lucey, CEO, for closing remarks. Please go ahead.

Thanks again for your time and attention this morning, and we look forward to speaking with you in July. Have a good day.

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