Q3 2020 PBF Logistics LP Earnings Call
Welcome to the PBF Logistics third-quarter earnings conference call and webcast at this time. All participants have been placed in a listen-only mode and four will be open for your questions following Management's prepared remarks to join the question queue, please press star and one on your touch-tone. So you may remove yourself from the queue by pressing the pound key. It is now my pleasure to turn the floor over to call Anne-Marie of investor relations sir. You may begin with thank you Chloe. Good morning, and welcome to today's call with me today are Matt Lucy Executive Vice President Eric Young our CFO and several other members of the partnership senior managing. If you'd like a copy of our earnings release it is available on our website before we begin. I'd like to direct your attention to the forward-looking statements disclaimer contained in today's press release in, New Jersey.
It outlines at statements in the press release and on this conference call that state the Partnerships 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've described in our filings with the SEC home as noted in our press release. We will be using certain non-gaap measures while describing the Partnerships operating performance and financial results for reconciliations of non-gaap measures to the appropriate gaap. Figure. Please refer to the supplemental tables provided in today's press release. I'll now turn the call over to Matt Lucy.
Thank you calling.
The pandemic continues to drive very challenging environment with everyone's struggling to find normal routines despite these challenges PDF Logistics continues to operate well as can be as can be seen in the consistency of our earnings for the past several quarters. We've seen an overall modest decline in throughput levels, but much less than what can be seen in life and demand nationally for the products. We move store and deliver a revenue has remained relatively stable as a result of our base demand and the strong contract structure Provide support for our business.
Or even Don distributable cash flow. We're up versus last quarter as a result of lower costs operating expenses came down to lower through puts and corporate expense reductions provided saving money today or sponsoring Partners PBF energy announced their strategic restructuring of its East Coast refining system. Whereby the Paulsboro Refinery will be idling a major processing units and expected output from the refinery will decrease
For 2020 we do not expect this to impact the Partnerships earnings and then 2021. The impact is expected to equate to less than 1% of partnership T, but
Another impact of the current environment will be the will be that the partnership will no longer be processing materials from fuel business at at our East Coast storage assets off. This Arrangement has always been a year a year to year agreement and do the pandemic may I ask is elected not to renew the contract?
We initially acquired the East Coast storage assets 407 million dollars or a 6.9 times multiple based on the tourmaline ebitda forecast, which remains unchanged following the exit.
The cash flow drive from the processing agreement essentially reduced our net investment by ten million dollars, which effectively lowers our realize acquisition multiple from 6.9 * 2.3 *
Going forward with changes. I just mentioned we expect distribution coverage remain healthy and to continue generating ample cash flow to deliver the business today. We maintain our distributions of distribution of thirty cents per unit. We will continue to review our distribution policy going forward with respect to the company performance market conditions off an alternative use of funds.
I'll now turn the call over there. Thank you, Matt. Good morning everyone and thank you for joining us on today's call. We reported third-quarter net income attributable to the limited partners of 44.2. He's adjusted partnership Eva. Was 60.5 Million which includes approximately 1.2 million of continued environmental remediation costs associated with our East Coast Terminals and non-cash unit based compensation during the quarter. We spent approximately 1 million in maintenance capex and one point seven million in total capex. Our total carbs for the year is expected to be in the 15 to 20 million dollar range with respect to Matt's comments regarding the termination of the marriage agreement in the third quarter. We recognized a net non-cash benefit of approximately 4.7 million as we finalize the process unit decommissioning, we expect to incur approximately 7 million of non-cash incremental expense and Ed.
for that will be
Put it in depreciation and amortization.
We ended the quarter with approximately $310 in liquidity, including a cash balance of 27.9 million and roughly $282 million of availability under our revolving credit facility during the quarter. We repaid approximately $35 million on our revolving credit facility net debt to annualized adjusted. Ebitda was 2.9 times wage to continue using excess cash to improve leverage ratios and strengthen the balance sheet operator. We've concluded our opening remarks and now we'll open the call for questions.
No, ma'am, we will open the call to questions. If you would like to join the queue, you may press star and one on your touch-tone phone to remove yourself from the queue, press the pound key. And once again, that is star and 1 and we will take our first question from Spiro Donuts from credits with please go ahead hey morning guys. First question just just respect to the sponsor and some of the decisions being made at that level. You know, it sounds like a not a material impact with respect to the east coast assets going into next year. We're also still sounds like there's a lot going on behind the scenes to preserve cash flow and potentially might end up with more rational optimization that system. So just maybe more broadly when thinking about the relationship with the sponsor or the potential impact going forward, you know, obviously, you're pretty well NBC protected and so I think what we're trying to figure out
What are some of the factors that we should be expecting going forward other potential impacts from optimization and ultimately at what point is is pbfx asked to be part of the solution here. It's May reduce costs by way of renegotiation.
Look, I think on the last call PDF the last call we use management were clear that that nothing's off the table. Everything is on the table. Don't worry continually analyzing every aspect of our business how that relates to pbfx. You know, there's nothing to report as you mention. We have a strong contracts and there's nothing as of right now that we see changing in regards to our business you reiterate my comments from just a couple of minutes ago. Obviously, there's a big announcement today in regards to these cuz a reconfiguration but the impacts to 2021 are very modest, you know, and that's just reduced. You know, there may be actually some positives that at Delaware some negatives at Paulsboro, you know taking down volumes above the he's dead.
We we don't see it as being impactful, too.
Okay, great. And then I guess in that vein if things are still sort of Fairly solid on your rent balance. She looks like it's a great shape dividends actually fairly well covered, you know if they look at your debt, obviously it's traded off here October, um appears to be trading about eighty cents on a dollar so so I guess just curious. Obviously we talked about the leveraging as well as is one of the capital use buckets. How are you assessing the ability to maybe go out to the open mic and purchase some of that debt at a discount. We're you know, Eric and, but we'll we'll we'll assess all our opportunities and make Market decisions as we age we go.
Great, that's it for me. Thanks guys.
Again for your questions today that is star and one on your touch-tone phone pause a moment to allow questions to Q.
It does appear we have no further questions at this time. I will now turn the call back to not Lucy for any closing remarks. I appreciate your time today and look forward to speaking again next quarter. Have a good day.
This does conclude today's program. Thank you for your participation. You might disconnect at any time.
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