Q1 2026 PBF Energy Inc Earnings Call

April 30, 2026

Operator: Good day, everyone. Welcome to the PBF Energy Q1 2026 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode. The floor will be open for questions following management's prepared remarks. If anyone should require operator assistance during the conference, please press star 0 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.

Speaker #2: If anyone should require operator assistance during the conference, please press *0 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.

Speaker #2: Sir, you may begin. Thank you, Angeline. Good morning and welcome to today's call. With me today are Matthew Lucey, 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 team.

Colin Murray: Thank you, Angeline. 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, Joe Marino, 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. 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Colin Murray: 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.

Speaker #2: Please contact Investor Relations after today's call. I'll now turn the call over to Matthew Lucey.

Speaker #3: 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.

Matthew C. 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 and reward our shareholders for owning such critical infrastructure. 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. There are three main areas of focus in terms of the restart at Martinez: the cat feed hydrotreater, the alkylation unit, and the FCC. The cat feed hydrotreater and alk are up and both are running. With the FCC, we expect to be making finished products this weekend.

Matthew 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 and reward our shareholders for owning such critical infrastructure. 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. There are three main areas of focus in terms of the restart at Martinez: the cat feed hydrotreater, the alkylation unit, and the FCC. The cat feed hydrotreater and alk are up and both are running. With the FCC, we expect to be making finished products this weekend.

Speaker #3: And therein lies the momentous opportunity for our company to perform and reward our shareholders for owning such critical infrastructure. Within PBF, the spotlight is squarely on Martinez.

Speaker #3: We are bringing Martinez back online and will surely 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.

Speaker #3: There are three main areas of focus in terms of the restart at Martinez. The catfish hydro treater, the alkalination unit, and the FCC. The catfish hydro treater and alkali are up and both are running.

Speaker #3: 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.

Matthew C. Lucey: While the rebuild effort was completed in February, there is no question the restart took longer than expected. It was critical for us 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 in the Middle East have caused the largest disruption ever in the oil markets, and the effects are indeed dramatic and constructive for PBF. Initially, approximately 15 million barrels per day of crude and 5 million barrels per day of product were trapped inside the Strait of Hormuz. The loss of crude barrels was most acutely felt in Asia, but the shortages have cascaded to other markets.

Matthew Lucey: While the rebuild effort was completed in February, there is no question the restart took longer than expected. It was critical for us 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 in the Middle East have caused the largest disruption ever in the oil markets, and the effects are indeed dramatic and constructive for PBF. Initially, approximately 15 million barrels per day of crude and 5 million barrels per day of product were trapped inside the Strait of Hormuz. The loss of crude barrels was most acutely felt in Asia, but the shortages have cascaded to other markets.

Speaker #3: It was critical for us to ensure that all the work accomplished at Martinez over the last 14 months was capped off with a safe restart.

Speaker #3: Moving on to the broader environment, the events in the Middle East have caused the largest disruption ever in the oil markets, and the effects are indeed dramatic and constructive for PBF.

Speaker #3: Initially, approximately 15 million barrels per day of crude and 5 million barrels per day of product were trapped inside the Straits of Hormuz. The loss of crude barrels was most acutely felt in Asia but the shortages have cascaded to other markets.

Matthew C. Lucey: 80% of the crude flowing through the Straits was destined for Asian refineries, and those refineries in turn supplied products to many markets, including the US 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. Increasingly, markets are calling for both US crude and US products to meet demand. While the US has been somewhat insulated, there are signs that demand is being impacted globally by both pricing and supply issues.

Matthew Lucey: 80% of the crude flowing through the Straits was destined for Asian refineries, and those refineries in turn supplied products to many markets, including the US 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. Increasingly, markets are calling for both US crude and US products to meet demand. While the US has been somewhat insulated, there are signs that demand is being impacted globally by both pricing and supply issues.

Speaker #3: 80% of the crude flowing through the Straits was destined for Asian refineries, and those refineries in turn supplied products to many markets. Including the US West Coast.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: Increasingly, markets are calling for both US crude and US products to meet demand. While the US has been somewhat insulated, there are signs that demand is being impacted globally by both pricing and supply issues.

Speaker #3: It has never been more evident that U.S. refining is critical infrastructure. And this is most apparent in regions like the West Coast and East Coast that are short on refining capacity and rely on imports from unstable sources to meet demand.

Matthew C. Lucey: It has never been more evident that US refining is critical infrastructure. This is most apparent in regions like the West Coast and East Coast that are short refining capacity and rely on imports from unstable sources to meet demand. It'll take some time for trade patterns to normalize, both during and post the conflict in the Middle East. Refining fundamentals should remain strong throughout, supported by tight refining balances coupled with low product inventories around the world. Prior to this event, refining balances look constructive. The inevitable restocking should provide a favorable backdrop for quarters 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. We must do it as efficiently as possible.

Matthew Lucey: It has never been more evident that US refining is critical infrastructure. This is most apparent in regions like the West Coast and East Coast that are short refining capacity and rely on imports from unstable sources to meet demand. It'll take some time for trade patterns to normalize, both during and post the conflict in the Middle East. Refining fundamentals should remain strong throughout, supported by tight refining balances coupled with low product inventories around the world. Prior to this event, refining balances look constructive. The inevitable restocking should provide a favorable backdrop for quarters 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. We must do it as efficiently as possible.

Speaker #3: It'll take some time for trade patterns to normalize both during and post the conflict in the Middle East. Refining fundamentals should remain strong throughout.

Speaker #3: Supported by tight refining balances coupled with low product inventories around the world. Prior to this event, refining balances looked constructive, and the inevitable restocking should provide a favorable backdrop for quarters to come.

Speaker #3: 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.

Speaker #3: And with that, I'll turn the call over to Mike Bukowski.

Matthew C. Lucey: With that, I'll turn the call over to Michael Bukowski.

Matthew Lucey: With that, I'll turn the call over to Michael Bukowski.

Speaker #2: Thank you, Matt. Good morning, everyone. Before updating on the progress of our refining business improvement program, I'll provide a few comments on first quarter operations and our Martinez refinery status.

Michael Bukowski: Thank you, Matt. Good morning, everyone. Before updating on the progress of our refining business improvement program, I'll provide a few comments on Q1 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. The process to 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 hydrotreater 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 this weekend. The Martinez team and a supporting cast too numerous to mention worked tirelessly to get us to this point.

Speaker #2: 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.

Speaker #2: The process to 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.

Speaker #2: The catfish hydro treater and alkalination unit have been operating and producing finished products as well as the intermediates required for the startup of the fluid catalytic cracking unit this weekend.

Speaker #2: The Martinez team and a supporting cast, too numerous to mention, worked tirelessly to get us to this point. My thanks to all involved in the project.

Michael Bukowski: My thanks to all involved in the project. Additionally, while Martinez operations were being restored, Torrance underwent a turnaround early in Q1, and with that event complete, has a clean runway for the remainder of 2026. I'm happy to report that we're seeing progress from our RBI program. We achieved our 2025 target of $230 million of annualized run 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 Q1 results, we are very comfortable in meeting or even exceeding our stated targets.

Speaker #2: 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 2026.

Speaker #2: I'm happy to report that we're seeing progress from our RBI program. We achieved our 2025 target of 230 million dollars of annualized run rate savings.

Speaker #2: This goal includes approximately 160 million dollars 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 targets.

Speaker #2: 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.

Michael Bukowski: 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 Joseph Marino for our financial overview.

Speaker #2: With that, I'll now turn the call over to Joe Marino for our financial overview.

Speaker #4: Thanks, Mike. For the first quarter, excluding special items, we reported adjusted net loss of 88 cents per share, and adjusted EBITDA of 68.7 million dollars.

Joseph Marino: Thanks, Mike. For the first quarter, excluding special items, we reported adjusted net loss of $0.88 per share and adjusted EBITDA of $68.7 million. Our discussion of Q1 results excludes the net effect of special items, including $11.5 million in incremental OpEx related to the Martinez refinery incident, a $106.5 million gain on insurance recoveries, a $313 million LCM inventory adjustment, a $9.4 million gain relating to PBF 50% share of SBR's LCM adjustment for this quarter, and approximately $9.4 million of charges associated with the RBI initiative, as well as other items detailed in the reconciling tables in today's press release. PBF results reflect several unfavorable conditions that manifested in Q1, both operationally and commercially.

Speaker #4: Our discussion of first quarter results, excludes the net effect of special items, including 11.5 million dollars in incremental OPEX related to the Martinez refinery incident, a 106.5 million dollar gain on insurance recoveries, a 313 million dollar LCM inventory adjustment, a 9.4 million dollar gain relating to PBF 50% share of SBRs LCM adjustment for this quarter, and approximately 9.4 million dollars of charges associated with the RBI initiative.

Speaker #4: As well as other items detailed in the reconciling tables in today's press release. PBF's results reflect several unfavorable conditions that manifested in the first quarter, both operationally and commercially.

Speaker #4: Capture rates for the quarter were negatively impacted by West Coast operations, the higher flat price environment increasing the headwind of low value products, higher rinse expense, and derivative losses recognized in the quarter.

Joseph Marino: Capture rates for Q1 were negatively impacted by West Coast operations, the higher flat price environment increasing the headwind of low-value products, higher RINs expense, and derivative losses recognized in Q1. These capture headwinds more than offset benefits from the improving jet-to-diesel spreads and certain crude dips. Operationally, our Torrance refinery was in planned turnaround during January and February, while our Martinez refinery restart was delayed. We built up inventory levels in Q1, primarily in anticipation of the planned restart of Martinez. This occurred as global pricing for hydrocarbons surged on the back of the conflict in the Middle East, resulting in losses in our typical hedge program. Our results for Q1 reflect an aggregate derivative loss of a little over $200 million.

Speaker #4: These capture headwinds more than offset benefits from the improving jet-to-diesel spreads and certain crew diffs. Operationally, our torrents refinery was in planned turnaround during January and February, while our Martinez refinery restart was delayed.

Speaker #4: 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.

Speaker #4: Our results for the quarter reflect an aggregate derivative loss of a little over $200 million. Approximately half of this loss related to unrealized amounts expected to be mostly offset in the second quarter as the physical barrels run to our refining system.

Joseph Marino: Approximately half of this loss related to unrealized amounts expected to be mostly offset in Q2 as the physical barrels run through our refining system. The $106.5 million gain on insurance recoveries related to the Martinez fire is a result of the fourth unallocated payment agreed to and received in Q1. This brings our total insurance recoveries to $1 billion 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.

Speaker #4: 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.

Speaker #4: This brings our total insurance recoveries to $1 billion 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.

Speaker #4: Shifting back to our normal quarterly results discussion, also included in our results is an approximate $8 million EBITDA benefit excluding LCM impacts, related to PBF's equity investment in St.

Joseph Marino: Shifting back to our normal quarterly results discussion, also included in our results is an approximate $8 million EBITDA benefit, excluding LCM impacts, related to PBF equity investment in St. Bernard Renewables. SBR produced an average of 16,700 barrels per day of renewable diesel in Q1. SBR'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, 2027 RVO, the market now has the ability to stabilize and should result in favorable margins.

Speaker #4: Bernard renewables. SBR produced an average of 16,700 barrels per day of renewable diesel in the first quarter. SBR'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.

Speaker #4: With the setting of the 2026-27 RVO, the market's now the ability to stabilize and should result in favorable margins. PBF's cash used in operations for the quarter was 324 million dollars, which includes a working capital draw of approximately 340 million dollars, mainly due to movements in inventory and the impact on our net payable position as a result of rapidly moving commodity prices.

Joseph Marino: PBF cash used in 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 Q1 CapEx and working capital outflows, primarily related to 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 restart in full. Cash invested in consolidated CapEx for the quarter was $320 million, which includes refining, corporate, and logistics. This amount excludes Q1 capital of approximately $189 million related to the Martinez incident.

Speaker #4: 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.

Speaker #4: The capital spending for the Martinez rebuild is essentially behind us and we expect working capital to normalize as operations restart in full. Cash invested in consolidated CAPEX for the quarter was 320 million dollars, which includes refining, corporate, and logistics.

Speaker #4: This amount excludes first quarter capital of approximately 189 million dollars 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.

Joseph Marino: On the surface, the Q1 figure might be slightly higher than expected. This is because it includes approximately $100 million of net carryover from 2025 that had not been cash settled at year-end. The balance is our normal quarterly incurred amount, including the turnaround at Torrance. Given that, and the noise related to the Martinez rebuild, it would be helpful to more broadly consider the 2025 and 2026 capital programs over a two-year period. We ended the quarter with $542 million in cash and approximately $2.3 billion in debt. At quarter-end, our net debt to cap was 36%, and our current liquidity is approximately $2.4 billion based on current commodity prices, cash, and borrowing capacity under our ABL.

Speaker #4: The balance is our normal quarterly incurred amount, including the turnaround at torrents. Given that and the noise related to the Martinez rebuild, it would be helpful to more broadly consider the 2025 and 2026 capital programs over a two-year period.

Speaker #4: We ended the quarter with 542 million dollars in cash and approximately 2.3 billion dollars of net debt. At quarter-end, our net debt to cap was 36% and our current liquidity is approximately 2.4 billion dollars, based on current commodity prices, cash, and borrowing capacity under our ABL.

Speaker #4: 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 build in inventory.

Joseph Marino: Our net debt increased in Q1 due to planned capital expenditures, continued spend on the Martinez restart, and working capital outflows primarily related to a build in 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 re-rebuild predominantly behind us, we expect to further progress on 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 of strength to focus on reducing both our gross and net debt. Operator, we've completed our opening remarks, and we'd be pleased to take any questions.

Speaker #4: 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.

Speaker #4: 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.

Speaker #4: As we look ahead, we expect to use periods of strength to focus on reducing both our growth and net debt. Operator, we've completed our opening remarks and we'd be pleased to take any questions.

Operator: 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 one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two 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.

Speaker #1: you. In a moment, we will open the call to questions. The company request that all callers limit each turn to one question in one follow-up.

Speaker #1: You may rejoin the queue with additional questions. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Speaker #1: You may press star two if you would like to remove your question from the queue. For participants using a speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #1: One moment, please. While we follow the questions. The first question comes from Manav Gupta with UBS. Please go ahead.

Manav Gupta: Good morning. I want to start a little bit on the global macro side. The way we are seeing things, Matt, is Q2 and Q3 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. Can you help us understand, given the relatively low US nat gas price and availability of crude, does that mean that US refining has an advantage over most of their global peers at this point of time?

Speaker #2: Good morning. I want to start a little bit on the global macro side. The way we are seeing things matters, two Q and three Q are a stale of two halves.

Speaker #2: 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.

Speaker #2: And you are in those category where you have the crude and you can run. So can you help us understand, given relatively low US natural gas price and availability of crude, does that mean that US refining has an advantage over most of their global peers at this point of time?

Matthew C. Lucey: Manav, I don't think there's any question on that. I think the outlook for the Q2 and the Q3 quarter look extraordinary, only because the world is gonna be in desperate need of our products. As you say, we're insulated from a natural gas perspective. Heck, we're insulated from a physical security perspective. We have the best steel globally with a very stable workforce. Indeed, we have access to crude. Obviously, the pricing on crude is determined on a global basis. When you stack up the US industry compared to the rest of the world, it stands out. Then when you look within the US, I think particularly PBF, coastal complexity, is incredibly well-positioned within that.

Matthew Lucey: Manav, I don't think there's any question on that. I think the outlook for the Q2 and the Q3 quarter look extraordinary, only because the world is gonna be in desperate need of our products. As you say, we're insulated from a natural gas perspective. Heck, we're insulated from a physical security perspective. We have the best steel globally with a very stable workforce. Indeed, we have access to crude. Obviously, the pricing on crude is determined on a global basis. When you stack up the US industry compared to the rest of the world, it stands out. Then when you look within the US, I think particularly PBF, coastal complexity, is incredibly well-positioned within that.

Speaker #3: 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.

Speaker #3: And as you say, we're insulated from a natural gas perspective. Heck, we're insulated from a physical security perspective. We have the best steel globally with a very stable workforce.

Speaker #3: And indeed, we have access to crude. Obviously, the pricing on crude is determined on a global basis. But when you stack up the US industry compared to the rest of the world, it stands out.

Speaker #3: And then, when you look within the U.S., I think particularly PBF's coastal complexity is incredibly well positioned within that.

Speaker #1: Perfect. Thank you so much, Anna. Quick follow-up here. And this is a question we have pretty much got all morning. What gives you the confidence that this time Martinez will be able to restart within probably a week or so and there will not be any further delays?

Manav Gupta: Perfect. Thank you so much. 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 Martinez will be able to restart within probably a week or so, and there will not be any further delays? Thank you.

Speaker #1: Thank you.

Matthew C. Lucey: I'll turn that over to Michael Bukowski.

Speaker #3: I'll turn that over to Mike.

Matthew Lucey: I'll turn that over to Michael Bukowski.

Michael Bukowski: The delays that we saw over the past couple months were primarily focused on the process to verify the equipment, to make sure it was constructed, installed properly. Now we're at the point now with two units up in operations. We always had a phased start up. It was always gonna be the cat feed hydrotreater. It was always gonna be the alkylation unit. Those two units started up without incident. They were got up safely. 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, and we're a day or so away from putting feed in the unit. It's very close. We've got all the checks that we've done.

Speaker #4: So the delays that we saw from over the past couple of months were primarily focused on the process to verify the equipment, to make sure it was constructed and installed properly.

Speaker #4: 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 hydro treater.

Speaker #4: It was always going to be the alkylation unit. Those two units started up without incident. They were got up safely. And we're essentially if you make the analogy of a football game, we're in the fourth quarter on the process on the FCC.

Speaker #4: The unit is heating up, and we're a day or so away from putting feed in the unit. So it's very close. We've got all the checks that we've done and we've passed a lot of the major hurdles that you typically go through in an FCC startup.

Joseph Marino: We've passed a lot of the major hurdles that you typically go through in an FCC start-up. That's gives us the confidence.

Michael Bukowski: We've passed a lot of the major hurdles that you typically go through in an FCC start-up. That's gives us the confidence.

Speaker #4: So that gives us the confidence.

Matthew C. Lucey: The frustration of the duration is certainly understandable, but the alternative simply wasn't considered in terms of rushing through anything. All the steps that were taken were done in the name of caution and safety and reliability. It obviously was an extraordinarily large disruption, and as such, it took a bit longer. That being said, we're here on the precipice of this whole incident being behind us.

Speaker #3: The frustration of the duration is certainly understandable. But the alternative simply wasn't considered in terms of rushing through anything. And so all the steps that were taken were done in the name of caution and safety and reliability.

Matthew Lucey: The frustration of the duration is certainly understandable, but the alternative simply wasn't considered in terms of rushing through anything. All the steps that were taken were done in the name of caution and safety and reliability. It obviously was an extraordinarily large disruption, and as such, it took a bit longer. That being said, we're here on the precipice of this whole incident being behind us.

Speaker #3: It obviously was an extraordinarily large disruption. And as such, it took a bit longer. That being said, we're here on the precipice of this whole incident being behind us.

Speaker #1: Thank you so much. All the best for the second quarter.

Manav Gupta: Thank you so much. All the best for Q2.

Speaker #3: Thank you.

Matthew C. Lucey: Thank you.

Matthew Lucey: Thank you.

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

Operator: Thank you. The next question comes from Alexis Patrick with Goldman Sachs. Please go ahead.

Speaker #1: Thank you. The next question comes from Alexa Patrick with Goldman Sachs. Please go ahead.

Speaker #5: Good morning, team. And thank you for taking our question. We wanted to ask on the East Coast dynamics. That region looks tight from a product perspective, but there's also a lot of moving pieces around crude access, freight rates.

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

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

Speaker #5: So can you just talk about the exposure there and how you're seeing capture rate shakeout?

Speaker #3: 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.

Matthew C. Lucey: Yeah. It was in my comments. I mean, whether you're talking about the East Coast or West Coast, you're relying on imports. How critical our infrastructure is within those pads, it's highlighted. It gets highlighted every couple years, whether it's through hurricanes, or, you know, other events, whether when Colonial went down, clearly, in this event, now with the global market completely disrupted. Our assets are running well. They, like I said, they have access to crude. I think we'll be rewarded handsomely for operating them reliably over the coming quarters. Tom?

Matthew Lucey: Yeah. It was in my comments. I mean, whether you're talking about the East Coast or West Coast, you're relying on imports. How critical our infrastructure is within those pads, it's highlighted. It gets highlighted every couple years, whether it's through hurricanes, or, you know, other events, whether when Colonial went down, clearly, in this event, now with the global market completely disrupted. Our assets are running well. They, like I said, they have access to crude. I think we'll be rewarded handsomely for operating them reliably over the coming quarters. Tom?

Speaker #3: It's highlighted. It gets highlighted every couple of years, whether it's through hurricanes or other events, whether when Colonial went down, clearly in this event now with the global market completely disrupted.

Speaker #3: But our assets are running well. Like I said, they have access to crude. And so I think we'll be rewarded handsomely for operating them reliably over the coming quarters, Tom.

Speaker #4: Yeah. I mean, I would just add in terms of what we've seen, particularly over the last several reporting weeks, right, where we're seeing draws across the country.

Thomas O'Connor: 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, where we're seeing, you know, draws across the country. You're at a situation also where even in the past couple, in the past month or so, right, where in terms of the US has been exporting product, not just off of the Gulf Coast, but out of the East Coast as well. We're at a situation where inventories have been depleted and obviously depends upon how long the disruption in the Strait of Hormuz continues, right? You know, the longer it goes, obviously we stay in a very point of friction.

Speaker #4: And you're at a situation also where even in the past couple in the past month or so, right, where in terms of the US has been exporting product, not just off of the Gulf Coast, but out of the East Coast as well.

Speaker #4: So we're at a situation where inventories have been depleted and obviously depends upon how long the disruption in the Straits of Hormuz continues, right?

Speaker #4: But the longer it goes, obviously we stay in a very point of friction. But on the flip side of it is that when we would look at it, and 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 the organization.

Thomas O'Connor: On the flip side of it is that, you know, when we would look at it, you know, in terms of, you know, resolution in terms of the conflict, you then potentially also have, you know, OPEC in a fractured state with the announcement of UAE, you know, looking to depart the organization. I think that all sort of fits within the sort of constructive outlook and a situation where, in terms of markets that are deficit product, it is going to be, 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.

Speaker #4: So I think that all sort of fits within the sort of constructive outlook and a situation where in terms of markets that are deficit products, it is going to be challenging in the short term to find that resupply from any other region because it certainly would appear at this point that Asia is buying the minimum amount of crude that they can purchase to basically satisfy their local demand or the region's demand.

Speaker #4: And there's no expectation that they're going to be continuing to pull crude from the Atlantic Basin to then resupply just in terms of the sheer amount of time that that takes and the uncertainty in terms of what could happen during that 60, 90, 120-day supply line.

Thomas O'Connor: There's no expectation that they're going to be continuing to pull crude from the Atlantic Basin to then resupply, just in terms of the sheer amount of time that that takes and the uncertainty in terms of what could happen during that 60, 90, 120-day supply line.

Matthew C. Lucey: Importantly, also for the East Coast, and the West Coast, with the Jones Act being put on the shelf, for a period of time, we're actually able to run non-traditional crudes to the East Coast. Indeed, we'll be running some WTI and some other US barrels on the East Coast, during the Q2. We'll have access to the crude. At the end of the day, as we said in the comments and Tom highlighted, the world's going to be desperate for our finished products.

Matthew Lucey: Importantly, also for the East Coast, and the West Coast, with the Jones Act being put on the shelf, for a period of time, we're actually able to run non-traditional crudes to the East Coast. Indeed, we'll be running some WTI and some other US barrels on the East Coast, during the Q2. We'll have access to the crude. At the end of the day, as we said in the comments and Tom highlighted, the world's going to be desperate for our finished products.

Speaker #3: And importantly also for the East Coast, and the West Coast, with the Jones Act being put on the shelf for a period of time, we're actually able to run non-traditional crudes to the East Coast.

Speaker #3: Indeed, we'll be running some WTI and some other US barrels on the East Coast during the second quarter. So we'll have access to the crude.

Speaker #3: At the end of the day, as we said in the comments and Tom highlighted, the world's going to be desperate for our finished products.

Speaker #5: 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?

Alexa Patrick: Okay, that's helpful. 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?

Alexis Patrick: Okay, that's helpful. 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?

Matthew C. Lucey: 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. When there are periods of excess cash flow generation, we will look to our balance sheet first. It's just a core business model, how we run our business in terms of driving to a very conservative balance sheet. Obviously, it's a cyclical business. It's a capital-intensive business. 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, where we return the balance sheet to our expectation. Joe, any other?

Matthew Lucey: 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. When there are periods of excess cash flow generation, we will look to our balance sheet first. It's just a core business model, how we run our business in terms of driving to a very conservative balance sheet. Obviously, it's a cyclical business. It's a capital-intensive business. 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, where we return the balance sheet to our expectation. Joe, any other?

Speaker #3: 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, when there are periods of excess cash flow generation, we will look to our balance sheet first.

Speaker #3: And it's just a core business model of how we run our business in terms of driving to a very conservative balance sheet. Obviously, it's a cyclical business.

Speaker #3: It's a capital-intensive business, 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, where we return the balance sheet to our expectation.

Speaker #3: Joe, any other?

Speaker #4: Yeah. No, I would reiterate that. We do maintain our always look at our capital allocation and framework comprised of the three pillars of investment in the business, investment in the balance sheet, and shareholder returns.

Joseph Marino: No, I would reiterate that. You know, 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. As Matt indicated, if current market conditions persist, you know, we'll have an opportunity here to accelerate de-levering 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 in the last 12, 24 months, and I think we'd be looking to get back to levels we had, you know, coming into 2025.

Speaker #4: But as Matt indicated, current market conditions persist, we'll have an opportunity here to accelerate delivering as a means of transferring value from debt to equity.

Speaker #4: Which would be a priority in the near term. We did lean into the balance sheet in the last 12 to 24 months. And I think we'd be looking to get back to levels we had coming into 2025.

Speaker #5: Okay. That's helpful. I'll turn it back. Thank you.

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

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

Speaker #1: Thank you. The next question comes from Joe Latch. With Morgan Stanley. Please go ahead.

Operator: Thank you. The next question comes from Joe Laetsch with Morgan Stanley. Please go ahead.

Speaker #6: 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?

Joe Laetsch: Hey, good morning, Matt and team, thanks for taking my questions. 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 ANS right now? Is there any competition that you're seeing from Asia pulling barrels away?

Speaker #6: Are those barrels pricing off of ANS right now? And then is there any competition that you're seeing from Asia pulling barrels away?

Matthew C. Lucey: 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 a fair amount in regards to and we've spent a lot of time talking about products and, you know, 300,000 barrels a day of gasoline and jet that needs to be imported to meet demand. You know, to the degree you bring in those products, those products, you know, you have to be able to attract those products from the rest of the world, and the logistics to get there are significant. On the crude side, we talk about it less. We've seen an increase on California production, with some production coming on over the last quarter.

Speaker #3: 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 a fair amount.

Matthew Lucey: 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 a fair amount in regards to and we've spent a lot of time talking about products and, you know, 300,000 barrels a day of gasoline and jet that needs to be imported to meet demand. You know, to the degree you bring in those products, those products, you know, you have to be able to attract those products from the rest of the world, and the logistics to get there are significant. On the crude side, we talk about it less. We've seen an increase on California production, with some production coming on over the last quarter.

Speaker #3: In regards to and we've spent a lot of time talking about products and 300,000 barrels a day of gasoline and jet that needs to be imported to meet demand.

Speaker #3: And to the degree you bring in those products, those you have to be able to attract those products from the rest of the world.

Speaker #3: And the logistics to get there are significant. But on the crude side, we talk about it less. We've seen an increase on California production, with some production coming on over the last quarter.

Matthew C. Lucey: Importantly, PBF has its own pipeline infrastructure, with our M-70 pipeline delivering to Torrance. The crude pricing in California is particularly interesting because, you know, if you look at pricing of crude around the world, the California production coming out of the valley, some of the most attractively priced crude in the world. We have our own proprietary line that is bringing it to our refinery in Torrance. I feel like that's gonna be a real competitive advantage for us going forward. Any other comments, Paul?

Speaker #3: And importantly, PBF has its own pipeline infrastructure with our M70 pipeline delivering to Torrance. So the crude pricing in California is particularly interesting because if you look at pricing of crude, around the world, the California production coming out of Alley some of the most attractively priced crude in the world.

Matthew Lucey: Importantly, PBF has its own pipeline infrastructure, with our M-70 pipeline delivering to Torrance. The crude pricing in California is particularly interesting because, you know, if you look at pricing of crude around the world, the California production coming out of the valley, some of the most attractively priced crude in the world. We have our own proprietary line that is bringing it to our refinery in Torrance. I feel like that's gonna be a real competitive advantage for us going forward. Any other comments, Paul?

Speaker #3: And we have our own proprietary line that we'll be bringing in that is bringing it to our refinery in Torrance. So I feel like that's going to be a real competitive advantage for us going forward.

Speaker #3: Any other comments, Paul?

Speaker #4: Yeah. I mean, on the indigenous crude, it prices against ice. That's the format that it trades on. It trades at a discount because of the qualities.

Michael Bukowski: I mean, on the, on the indigenous crude, it prices against ICE. That's, that's the format 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. It trades, it trades at a pretty good discount to ICE, which is obviously a pretty good discount to ANS. As far as the pool on the-- from Asia, the Asian program did pull a lot of ANS away from the West Coast in the current trade periods and the next trade periods. It's, it's a good supplement to some of the Arab grades that have been lost for those guys. Yeah, we're seeing a pretty good pool.

Speaker #4: 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.

Speaker #4: Which is obviously a pretty good discount to ANS. As far as the pool on the from Asia, the Asian program did pull a lot of ANS away from the West Coast.

Speaker #4: And the current trade periods and the next trade periods, it's a good supplement to some of the Arab grades that have been lost for those guys.

Speaker #4: So yeah, we're seeing a pretty good pull.

Speaker #6: Great. 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.

Joe Laetsch: Great. Thanks. That's helpful. Then on the refining business improvement program, can you just talk about how that's progressing? 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 2026?

Speaker #6: Can you just talk a bit more about the path to the $350 million by year-end '26?

Matthew C. Lucey: Well, sure. I'm just happy to report we're on path. Mike, why don't you give.

Matthew Lucey: Well, sure. I'm just happy to report we're on path. Mike, why don't you give.

Speaker #3: Well, sure. I'm just happy to report we're on path. But Mike, why don't you give?

Speaker #4: Sure. 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 that included capital.

Michael Bukowski: Sure, yeah. The way we structured the program is, we took the run rate savings that we had achieved last year. That was $230 million. That included capital. Just from an OpEx perspective, it was $160 million. We put that into our budget. The Q1, we are right on that plan right now. You'll see as the quarters go by, an increase in savings from quarter to quarter as other savings initiatives are implemented as well. By the year-end, we would expect to achieve those savings.

Speaker #4: So just from an X perspective, it was $160 million. We put that into our budget. And then the first quarter, we were right on that plan right now.

Speaker #4: 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 achieve those savings.

Joe Laetsch: Thank you. That's helpful.

Speaker #6: Thank you. That's helpful.

Speaker #1: Thank you. The next question comes from Paul Sankey with the Sankey Research. Please go ahead.

Operator: Thank you. The next question comes from Paul Sankey with the Sankey Research. Please go ahead.

Speaker #5: Hi guys. Can you hear me okay?

Paul Sankey: Hi, guys. Can you hear me okay?

Speaker #3: I can hear fine, Paul. Good morning.

Matthew C. Lucey: Can hear you fine, Paul. Good morning.

Matthew Lucey: Can hear you fine, Paul. Good morning.

Paul Sankey: Great. Hi. You've talked a lot around these questions, but if I could just keep digging a bit here, please. Matt, did you say, can you just say when Martinez is gonna be completely up and running all units, best guess? Did you say that's happening? 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 price at Cushing? You know, can we dig a little bit into how your crude slate is changing given the whole mood situation? Again, you've addressed this, but are there major issues where, for example, jet fuel, how are you dealing with that? Is that getting exported?

Speaker #5: Great. Hi. You've talked a little bit around these questions. But if I could just sort of keep digging a bit here, please. Matt, did you say can you just say when Martinez is going to be completely up and running all units, best guess?

Speaker #5: 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.

Speaker #5: You mentioned the Jones Act. Allowing you to take WTI. I was wondering, for example, is that WTI priced at Cushing? And can we dig a little bit into changing given the whole mood situation?

Speaker #5: And again, you've addressed this. But are there major issues where for example, jet fuel, how you're dealing with that? And is that getting exported?

Speaker #5: 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.

Paul Sankey: Can we kind of go through what the next 2 months will look like? I think the current market is guaranteed to be here for the next 2 months. If Houmt Souk starts opening up, I assume that all of that will reverse. Any longer term comments would be helpful as well. Thanks.

Speaker #5: And then if whole mood starts opening up, I assume that all of that will reverse. But any longer-term comments would be helpful as well.

Speaker #5: Thanks.

Matthew C. Lucey: Okay. There's a lot.

Matthew Lucey: Okay. There's a lot.

Speaker #3: Okay. There's a lot. So just in regards to Martinez, as we said, essentially, we expect literally over the next couple of days and so we'll be very, very pleased to get there.

Paul Sankey: I know.

Matthew C. Lucey: Just regards to Chalmette, as we said, you know, essentially we expect literally over the next couple days. We'll be very, very pleased to get there. You know, as soon as this weekend, we should be up with sort of all our units up and running, which is good news. Again, frustrating on the duration, very, very good news looking forward. In regards to, you know, running non-traditional crudes, everything has been disrupted. The size and scale of this disruption is sort of hard to imagine.

Matthew Lucey: Just regards to Chalmette, as we said, you know, essentially we expect literally over the next couple days. We'll be very, very pleased to get there. You know, as soon as this weekend, we should be up with sort of all our units up and running, which is good news. Again, frustrating on the duration, very, very good news looking forward. In regards to, you know, running non-traditional crudes, everything has been disrupted. The size and scale of this disruption is sort of hard to imagine.

Speaker #3: But as soon as this weekend, we can be up with sort of all our units up and running. Which is good news. Again, frustrating on the duration, but very, very good news looking forward.

Speaker #3: In regards to running non-traditional crudes, everything has been disrupted and the size and scale of this disruption is sort of hard to imagine. I just keep coming back to at the end of the day, there's a lot of interesting conversations about crude.

Matthew C. Lucey: I just keep coming back to, at the end of the day, there's a lot of interesting conversations about crude. At the end of the day, the only thing that matters is products. The disruption to the product market is extreme. We're best positioned to capitalize that throughout the country, particularly our coastal markets. When you look at our base operations, and sort of the daily impacts, the US East Coast is probably impacted the most in terms of what crudes it's running. Paulsboro historically ran, you know, Saudi Aramco barrels. We've been able to make adjustments there. To a great degree, Chalmette, Toledo certainly, the West Coast is running what it traditionally ran.

Matthew Lucey: I just keep coming back to, at the end of the day, there's a lot of interesting conversations about crude. At the end of the day, the only thing that matters is products. The disruption to the product market is extreme. We're best positioned to capitalize that throughout the country, particularly our coastal markets. When you look at our base operations, and sort of the daily impacts, the US East Coast is probably impacted the most in terms of what crudes it's running. Paulsboro historically ran, you know, Saudi Aramco barrels. We've been able to make adjustments there. To a great degree, Chalmette, Toledo certainly, the West Coast is running what it traditionally ran.

Speaker #3: But at the end of the day, the only thing that matters is products. The disruption to the product market is extreme. And we're best positioned to capitalize that throughout the country but particularly our coastal markets.

Speaker #3: When you look at our base operations and sort of the daily impacts the US East Coast is probably impacted the most in terms of what crudes it's running.

Speaker #3: Paulsboro historically run Aramco Barrels and we've been able to make adjustments there. But to a great degree, Shell Met Toledo certainly and the West Coast is running what a traditionally ran I don't think we're going to give you quite the detail you're looking for in terms of exactly how TI is pricing.

Matthew C. Lucey: I don't think we're gonna give you quite the detail you're looking for in terms of how the WTI is pricing, but I commend you for trying. Yeah, I mean, at the end of the day, like I said, I just go back to products, products. To the degree that we can reliably produce them, we will be handsomely rewarded because they're in desperate need.

Matthew Lucey: I don't think we're gonna give you quite the detail you're looking for in terms of how the WTI is pricing, but I commend you for trying. Yeah, I mean, at the end of the day, like I said, I just go back to products, products. To the degree that we can reliably produce them, we will be handsomely rewarded because they're in desperate need.

Speaker #3: But I commend you for trying. But yeah, I mean, at the end of the day, like I said, I just go back to products, products, products.

Speaker #3: And to the degree that we can reliably produce them, we will be handsomely rewarded. Because they're in desperate need.

Paul Sankey: Fair enough, Matt. It was worth a try. Thanks.

Speaker #5: Fair enough, Matt. It was worth a try. Thanks.

Thomas O'Connor: Paul, it's Tom. I would just jump in. I mean, I think, you know, certainly for us in terms of, I mean, your comment, you know, that, 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 dealing or going through, it really depends upon just really how far you are from the Strait of Hormuz, right? Asia felt all these, you know, the pinch points soonest. Then it cascaded more so into the European product markets, and then it's now filtered into the US market or the Americas. We're certainly seeing that on products and particularly in terms of what gasoline has done over the last several weeks in terms of, you know, catching up.

Speaker #4: All the time. I would just jump in. I mean, I think certainly for us in terms of I mean, your comment, maybe the next two weeks, two months are a certainty, right?

Speaker #4: I mean, this is—I think as we look at the sort of acute problems that the market's been dealing with, we're going through, it really depends upon just really how far you are from the Straits of Hormuz, right?

Speaker #4: So Asia felt all these the pinch points soonest. Then it cascaded more so into the European product markets. And then it's now filtered into the US market or the Americas.

Speaker #4: And we're certainly seeing that on products and particularly in terms of what gasoline has done over the last several weeks in terms of catching up.

Speaker #4: Because initially, this was just a crude problem. And a distillate problem. And a jet problem, right? Now in terms of the balances, now it's a gasoline problem.

Thomas O'Connor: Initially this was just a crude problem and a distillate problem and a jet problem, right? You know, now in terms of the balances, now it's a gasoline problem. Therefore also if, you know, the Strait of Hormuz opens, right? It is going to be a situation where the recovery is going to happen soonest in terms of how far are you from Strait of Hormuz, right? Obviously the Americas are the furthest away from the Strait of Hormuz. In terms of that's the sort of commentary related around sort of months, quarters, et cetera, in terms of the recovery time.

Speaker #4: And then therefore also if the Straits of Hormuz opens, right, it then is going to be a situation where the recovery is going to happen soonest in terms of how far are you from Straits of Hormuz, right?

Speaker #4: And obviously, the Americas are the furthest away from the Straits of Hormuz. So in terms of that, that's the sort of commentary related around sort of months, quarters, etc., in terms of the recovery time.

Speaker #5: Yeah. Yeah. And it's interesting that the Jones Act is helping you bring up or lack of it. Thanks, guys.

Paul Sankey: Yeah. Yeah. It's interesting that the Jones Act is helping you. Brilliant. Or lack of it. Thanks, guys.

Speaker #3: Thanks, Paul.

Matthew C. Lucey: Thanks, Paul.

Matthew Lucey: Thanks, Paul.

Speaker #1: Thank you. The next question comes from Doug Leggett with Wolfe Research. Please go ahead.

Operator: Thank you. The next question comes from Doug Leggate with Wolfe Research. Please go ahead.

Doug Leggate: Hey, guys. Good morning. I can't tell you how happy I am to hear you talk about translating value from debt to equity, we'll take that one offline. My two questions, fellas, first of all, I'd like to maybe dig in a little bit on capture rate. At the simplest level, we've all been through these kind of spikes before, maybe not quite like this. 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?

Speaker #6: Hi 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.

Speaker #6: 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 we've been through these kind of spikes before, maybe not quite like this.

Speaker #6: 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.

Speaker #6: Of those margins. You guys talked about headwinds. You talked about winds 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?

Speaker #6: Will it be the same? Will it be higher? Will it be lower? That's my first one. My second one is, as real simple on business interruption.

Doug Leggate: 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, netted against how much you actually still get in the door for business interruption. At the root of my question is, you've been offline during extraordinary margins in the West Coast. You were supposed to come back up in December. Do you still get business interruption in Q1? I'll leave it there. Thanks.

Speaker #6: 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.

Speaker #6: In other words, when you pay out the remainder, there are payers. Net it against how much you actually still get in the door for business interruption.

Speaker #6: And at the root of my question is, you've been offline during extraordinary margins in the West Coast. You were supposed to come back up in December.

Speaker #6: Do you still get business interruption in the first quarter? And I'll leave it there. Thanks.

Speaker #3: Okay. Sure. So capture rates, in extraordinary periods of time, which we clearly are in, it will be very, very difficult for the for you, quite frankly, for the investment community to pinpoint capture rates.

Matthew C. Lucey: Okay. Sure. Capture rates. In extraordinary periods of time, which we clearly are in, it'll be very, very difficult for you, quite frankly, for the investment community to pinpoint capture rates, as you have a lot. Obviously flat price, RINs, and massive basis differentials that are swinging wildly on a daily basis. Indeed, you know, jet on the West Coast today is trading over $1 the NYMEX distillate mark. It'll be very difficult task to bring precision to capture rates in these extraordinary periods. Capture rates by definition are rules of thumb. In this period of time, rules of thumb don't necessarily equate perfectly.

Matthew Lucey: Okay. Sure. Capture rates. In extraordinary periods of time, which we clearly are in, it'll be very, very difficult for you, quite frankly, for the investment community to pinpoint capture rates, as you have a lot. Obviously flat price, RINs, and massive basis differentials that are swinging wildly on a daily basis. Indeed, you know, jet on the West Coast today is trading over $1 the NYMEX distillate mark. It'll be very difficult task to bring precision to capture rates in these extraordinary periods. Capture rates by definition are rules of thumb. In this period of time, rules of thumb don't necessarily equate perfectly.

Speaker #3: As you have a lot obviously flat price, winds, and massive, massive basis differentials that are swinging wildly on a daily basis. Indeed, jet on the West Coast today is trading over a dollar the NYMEX distillate mark.

Speaker #3: So it will be very difficult tasks to bring precision to capture rates in these extraordinary periods. Capture rates, by definition, are rules of thumb.

Speaker #3: And in this period of time, rules of thumb don't necessarily equate perfectly. We'll try to be as helpful as we can in that regard, navigating it through.

Matthew C. Lucey: We'll try to be as helpful as we can in that regard, navigating you through. There are obviously lots of puts and tells. At the end of the day, I keep coming back to products, products. The physical price for our products will be evident as we go because of how short they are at the moment. Yes, and on top of that, you know, the last barrel in the plant may look expensive compared to historic sort of runs. Again, the product prices are gonna carry that. In regards to BI, indeed, our coverage does extend into this year.

Matthew Lucey: We'll try to be as helpful as we can in that regard, navigating you through. There are obviously lots of puts and tells. At the end of the day, I keep coming back to products, products. The physical price for our products will be evident as we go because of how short they are at the moment. Yes, and on top of that, you know, the last barrel in the plant may look expensive compared to historic sort of runs. Again, the product prices are gonna carry that. In regards to BI, indeed, our coverage does extend into this year.

Speaker #3: But there are obviously a lot of puts and tells. But at the end of the day, I keep coming back to products, products, products.

Speaker #3: And the physical price for our products will be evident as we go. Because of how short they are at the moment. And so yes, and on top of that, the last barrel in the plant may look expensive compared to historic sort of runs.

Speaker #3: But again, the product prices are going to carry that. In regards to PI, indeed, our coverage does extend into this year. And we will continue sort of to work with the insurance companies who've been very, very good partners.

Matthew C. Lucey: You know, we will continue it, sort of, to work with the insurance companies who've been very good partners. I've said that, I think, on every single call. I'll turn some of the insurance stuff over to Joe. Indeed, it wasn't your question, but again, the addressing the balance sheet, and transferring that wealth from leverage into equity is a core principle of how we run this business. Let there be no confusion on that. Any other comment on the insurance side?

Matthew Lucey: You know, we will continue it, sort of, to work with the insurance companies who've been very good partners. I've said that, I think, on every single call. I'll turn some of the insurance stuff over to Joe. Indeed, it wasn't your question, but again, the addressing the balance sheet, and transferring that wealth from leverage into equity is a core principle of how we run this business. Let there be no confusion on that. Any other comment on the insurance side?

Speaker #3: I've said that, I think, on every single call. And I'll turn some of the insurance stuff over to Joe. But indeed, it wasn't your question.

Speaker #3: But again, the addressing the balance sheet and transferring that wealth from leverage into equity is a core principle of how we run this business.

Speaker #3: So let there be no confusion on that. Any other comment on the insurance side?

Joseph Marino: I'd just say, given the fact that the claim is ongoing, and the insurance proceeds we've received to date have not been allocated, can't really give you any more detail on the breakup between BI at this point.

Speaker #4: Yeah. I was just saying, given the fact that the claim is ongoing and the insurance proceeds we've received to date have not been allocated, can't really give you any more detail on the breakup between VI at this point.

Speaker #4: But we'll say that importantly, the rebuild costs are substantially behind us at this point. And we do expect further progress payments in the insurance side through the end of the claim.

Joseph Marino: You know, importantly, the rebuild costs are substantially behind us at this point. We do expect further, you know, progress payments on the insurance side through the end of the claim.

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

Speaker #6: Terrific, guys. Thanks for the answers. Appreciate it. And I understand there's no precision here, but nevertheless, I appreciate the color.

Speaker #1: Thank you. The next question comes from Philip Junworth with BMO. Please go ahead.

Operator: Thank you. The next question comes from Philip Jungwirth with BMO. Please go ahead.

Philip Jungwirth: Thanks. Good morning. The turnaround schedule for the year originally contemplated Martinez hydrocracker in Q2. Is this at all impacted by the later restart or just what's the status here? What all would this turnaround entail or imply as far as crude throughput for the facility?

Speaker #5: Thanks. Good morning. The turnaround schedule for the year originally contemplated Martinez Hydrocracker in 2Q. Is this at all impacted by the later restart and/or just what's the status here?

Phillip Jungwirth: Thanks. Good morning. The turnaround schedule for the year originally contemplated Martinez hydrocracker in Q2. Is this at all impacted by the later restart or just what's the status here? What all would this turnaround entail or imply as far as crude throughput for the facility?

Speaker #5: What all would this turnaround entail? Or imply as far as crude throughput for the facility?

Speaker #3: Yeah. We've been working that, obviously, that was originally a lot per our last call, we were talking about that in the second quarter. We're working through that now.

Matthew C. Lucey: Yeah, we've been working that. That was originally, you know, per our last call, we were talking about that in Q2. We're working through that now. I would say there's a high degree or a high probability that that turnaround that we actually move that towards the end of Q3. That hasn't been completely finalized yet. They have to go through, you know, a number of checks. Again, safety, reliability, responsibility, you know, running responsibly is sort of the prerequisite for everything. We're working through that. I expect that work will be pushed out towards the end of Q3.

Matthew Lucey: Yeah, we've been working that. That was originally, you know, per our last call, we were talking about that in Q2. We're working through that now. I would say there's a high degree or a high probability that that turnaround that we actually move that towards the end of Q3. That hasn't been completely finalized yet. They have to go through, you know, a number of checks. Again, safety, reliability, responsibility, you know, running responsibly is sort of the prerequisite for everything. We're working through that. I expect that work will be pushed out towards the end of Q3.

Speaker #3: I would say there's a high degree or a high probability that that turnaround that we actually move that towards the end of the third quarter.

Speaker #3: That hasn't been completely finalized yet. They have to go through a number of checks. And again, safety reliability, responsibility, we're running responsibly is sort of the prerequisite for everything.

Speaker #3: But we're working through that. But I expect that work will be pushed out towards the end of the third quarter.

Speaker #6: Okay. Great. And then can you talk a little bit about SBR and the outlook here? I mean, we don't get a ton of detail on profitability, but clearly the margin profile for RD has improved.

Philip Jungwirth: Okay. Great. Then, can you talk a little bit about SBR and the outlook here? I mean, we don't get a ton of detail on profitability, but clearly the margin profile for RD has improved. Any color as we head into Q2? Then separately, just how are you viewing your RIN exposure currently, net of SBR?

Phillip Jungwirth: Okay. Great. Then, can you talk a little bit about SBR and the outlook here? I mean, we don't get a ton of detail on profitability, but clearly the margin profile for RD has improved. Any color as we head into Q2? Then separately, just how are you viewing your RIN exposure currently, net of SBR?

Speaker #6: Any color as we head into 2Q? And then separately, just how are you viewing your wind exposure currently net of SBR?

Speaker #3: All right. So SBR, look, this is it's a happy moment. There's no doubt. And the reason one of the reasons we invested in the project in the first place so the prospects, the outlook for SBR is quite strong today.

Matthew C. Lucey: All right. SBR, it's a happy moment, there's no doubt. One of the reasons we invested in the project in the first place. The prospects, the outlook for SBR is quite strong today. It's quite honestly the strongest it's ever been since we've been up and operating. The first quarter had +EBITDA, but the outlook going forward, and we just completed a catalyst change. The outlook going forward looks very, very constructive. To some degree, it holds the story together for PBF as the hedge against RIN prices that we didn't have three years ago. You know, we're very pleased to have SBR in our portfolio.

Matthew Lucey: All right. SBR, it's a happy moment, there's no doubt. One of the reasons we invested in the project in the first place. The prospects, the outlook for SBR is quite strong today. It's quite honestly the strongest it's ever been since we've been up and operating. The first quarter had +EBITDA, but the outlook going forward, and we just completed a catalyst change. The outlook going forward looks very, very constructive. To some degree, it holds the story together for PBF as the hedge against RIN prices that we didn't have three years ago. You know, we're very pleased to have SBR in our portfolio.

Speaker #3: It's quite honestly the strongest it's ever been since we've been up and operating. So the first quarter had positive EBITDA, but the outlook going forward, and we just completed a catalyst change, the outlook going forward looks very, very constructive.

Speaker #3: And to some degree, it holds the story together for PBF as the hedge against wind prices that we didn't have three years ago. And so we're very pleased to have SBR in our portfolio.

Speaker #3: And indeed, I think on our next call, you'll see sort of how helpful it is in regards to winds. They seem to be on a one-way freight train going up.

Matthew C. Lucey: Indeed, I think, you know, our next call, you'll see sort of how helpful it is. In regards to RINs, they seem to be on a one-way freight train going up. RINs are upwards of getting close to $13 a barrel. I've described the program for over a decade as being broken, which is true. Maybe nothing is more true than that. It actually very well may break literally where there's not sufficient RIN generation. Of course, high RIN prices, low RIN prices, you still blend the same amount of ethanol. There is a blend wall. It relies on RD production and bio production.

Matthew Lucey: Indeed, I think, you know, our next call, you'll see sort of how helpful it is. In regards to RINs, they seem to be on a one-way freight train going up. RINs are upwards of getting close to $13 a barrel. I've described the program for over a decade as being broken, which is true. Maybe nothing is more true than that. It actually very well may break literally where there's not sufficient RIN generation. Of course, high RIN prices, low RIN prices, you still blend the same amount of ethanol. There is a blend wall. It relies on RD production and bio production.

Speaker #3: Winds are upwards of getting close to $13 a barrel. I've described the program for over a decade as being broken, which is true, maybe nothing is more true than that.

Speaker #3: But it actually very well may break literally where there's not sufficient wind generation because, of course, high wind prices, low wind prices, you still blend the same amount of ethanol.

Speaker #3: There is an ethanol blend wall. So it relies on RD production. And bioproduction. And if that doesn't meet the RVO, you could get into a situation where not only is winds dramatically in pricing the price of gasoline, where it's actually constricting supply because if you can't if you import, so if you go to the coast and you need to attract imports, that importer has to buy a wind.

Matthew C. Lucey: If that doesn't meet the RVO, you could get into a situation where not only is RINs dramatically in pricing the price of gasoline, where it's actually constricting supply. If you import, if you go to the coast and you need to attract imports, that importer has to buy a RIN. The price that he's looking at deducts the RIN price. That sort of speaks to the requirement on the coast to be able to attract those products. If the RIN is unavailable and he can't be compliant, the product won't come. Will we get there this year? I don't know. To a great degree, it will depend on bio production and renewable diesel production around the world, I guess, to some degree.

Matthew Lucey: If that doesn't meet the RVO, you could get into a situation where not only is RINs dramatically in pricing the price of gasoline, where it's actually constricting supply. If you import, if you go to the coast and you need to attract imports, that importer has to buy a RIN. The price that he's looking at deducts the RIN price. That sort of speaks to the requirement on the coast to be able to attract those products. If the RIN is unavailable and he can't be compliant, the product won't come. Will we get there this year? I don't know. To a great degree, it will depend on bio production and renewable diesel production around the world, I guess, to some degree.

Speaker #3: So the price that he's looking at deducts the wind price. So that sort of speaks to the requirement on the coast to be able to attract those products.

Speaker #3: But if the wind is unavailable and he can't be compliant, the product won't come. And so will we get there this year? I don't know.

Speaker #3: To a great degree, it will depend on bioproduction and renewable diesel production around the world, I guess, to some degree. The RVL, as I said, is as high as it's ever been.

Matthew C. Lucey: The RVO, as I said, is the highest it's ever been and completely stupid in regards to impacting the price of gasoline. The easiest lever the administration has to lower the price of gasoline today would be to address the blend wall. There is countless ways they could do that. It is what it is. As I said, we're very, very pleased to have SBR. We think it's going to be contributing nicely.

Matthew Lucey: The RVO, as I said, is the highest it's ever been and completely stupid in regards to impacting the price of gasoline. The easiest lever the administration has to lower the price of gasoline today would be to address the blend wall. There is countless ways they could do that. It is what it is. As I said, we're very, very pleased to have SBR. We think it's going to be contributing nicely.

Speaker #3: And completely stupid in regard to impacting the price of gasoline. The easiest lever that the administration has to lower the price of gasoline today would be to address the blend wall.

Speaker #3: And there is countless ways they could do that. But it is what it is. And as I said, we're very, very pleased to have SBR.

Speaker #3: We think it's going to be contributing nicely.

Speaker #6: Thanks. Appreciate all the color.

Philip Jungwirth: Thanks. Appreciate all the color.

Phillip Jungwirth: Thanks. Appreciate all the color.

Speaker #1: Thank you. The next and final question that's adjacent Giebelman with Diddy Cohen. Please go ahead.

Operator: Thank you. The next and final question, that's Jason Gabelman with TD Cowen. Please go ahead.

Speaker #5: Yeah. Hey, 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 of years, given we could be in a period where margins are higher for a decent amount of time here?

Jason Gabelman: Yeah. Hey, thanks for taking my questions. You discussed the Martinez hydrocracker turnaround and potential to push that out, 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?

Speaker #3: Yeah. Higher for longer. Yeah. And I'll just say in the short short term. We obviously just looking at the next couple of quarters, we have a very, very clean runway.

Matthew C. Lucey: Yeah, higher for longer. Yeah, no, I'll just say in the short-term, we obviously, just looking at the next couple quarters, we have a very clean runway. The opportunity is certainly extraordinary in the near term. Mike, why don't you make some comments?

Matthew Lucey: Yeah, higher for longer. Yeah, no, I'll just say in the short-term, we obviously, just looking at the next couple quarters, we have a very clean runway. The opportunity is certainly extraordinary in the near term. Mike, why don't you make some comments?

Speaker #3: And so the opportunity is certainly extraordinary in the near term. Mike, why don't you make some comments?

Speaker #4: Yeah. The second and third quarter are pretty clean. We do have some things coming up in the fourth quarter. We've always evaluate right around this time, actually, moving some things around or some things that we may be able to do.

Michael Bukowski: Yeah, the Q2 and Q3 are pretty clean. We do have some things coming up in the Q4. We always evaluate, right around this time, actually, at moving some things around. There's some things that we may be able to do. There's some things that are kinda locked in. I'm not gonna 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 crude unit combined together. This is one of our heavier years in recent history in terms of the scope.

Speaker #4: 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.

Speaker #4: 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.

Speaker #4: So this is one of our heavier years in recent history in terms of the scope. But the next couple of years, the we tell off a bit in we're a little bit later in 27 and 28.

Michael Bukowski: But the next couple years have we tail off a bit we're a little bit later in 2027 and 2028. Specifically, I'm not gonna mention any turnarounds that's gonna be moved, but we do those evaluations right around this time.

Speaker #4: So specifically, I'm not going to mention any turnaround that's going to be moved, but we do those evaluations right around this time.

Speaker #5: Thanks. My other question is on the results for the quarter. You mentioned derivative losses. Impacting one Q, I believe. You didn't quantify it. Can you talk about what that looked like for one Q and what that maybe will look like for two Q 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?

Jason Gabelman: Thanks. My other question is on the results for the quarter. You mentioned derivative losses impacting Q1, I believe. You didn't quantify it. Can you talk about what that looked like for Q1 and what that maybe will look like for Q2, 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?

Speaker #4: Yeah. So we recognize lower 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.

Joseph Marino: Yeah. We recognized a little over $200 million of mark-to-market on derivative losses during the quarter. At the end of the quarter, there was about $100 million of unrealized. There's still, you know, some offsetting physical barrels that will flow through to offset that and, you know, and likely be a benefit in Q2. As far as Q2 actual is going to just derivative impact will depend on where prices, you know, go from here.

Speaker #4: And then as far as Q2 actually is going to just derivative impact will depend on where prices go from here.

Speaker #3: The derivative program, just so everyone understands, is a risk-reducing program in that we will hedge inventory that is above and beyond our normal baseline.

Matthew C. Lucey: The derivative program, just so everyone understands, is a risk-reducing program in that we will hedge inventory that is above and beyond our normal baseline. With the disruption we had on the West Coast, at, when we're entering the 28 February or March, early March, we had approximately 6 million barrels above and beyond what we normally have in our portfolio. 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 in managing those barrels. As our inventory works down, the need for that hedging exercise is eliminated.

Matthew Lucey: The derivative program, just so everyone understands, is a risk-reducing program in that we will hedge inventory that is above and beyond our normal baseline. With the disruption we had on the West Coast, at, when we're entering the 28th February or March, early March, we had approximately 6 million barrels above and beyond what we normally have in our portfolio. 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 in managing those barrels. As our inventory works down, the need for that hedging exercise is eliminated.

Speaker #3: And with the disruption we had on the West Coast, at when we were entering the February 28th or March early March, we had approximately 6 million barrels above and beyond what we normally have in our portfolio.

Speaker #3: 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 in managing those barrels.

Speaker #3: But as our inventory works down, the need for that hedging exercise is eliminated. And so I suspect, by the end of the second quarter, you're not going to see similar callouts. But again, it's a situation where at the end of the first quarter, you're marking those derivatives to market, even though you still have the inventory that you're then going to realize the physical side during the second quarter.

Matthew C. Lucey: I suspect, by the end of Q2, you're not gonna see similar call-outs. It's a situation where at the end of Q1, you're marking those derivatives to market, even though you still have the inventory that you're then gonna realize the physical side during Q2.

Matthew Lucey: I suspect, by the end of Q2, you're not gonna see similar call-outs. It's a situation where at the end of Q1, you're marking those derivatives to market, even though you still have the inventory that you're then gonna realize the physical side during Q2.

Speaker #5: Great. Thanks for that, Colin. That's helpful.

Jason Gabelman: Great. Thanks for that color. That's helpful.

Speaker #1: 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.

Operator: 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.

Speaker #1: Please go ahead.

Speaker #3: Thanks again for your time and attention this morning. And we look forward to speaking with you in July. Have a good day.

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

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

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

Q1 2026 PBF Energy Inc Earnings Call

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