PARSIPPANY, N.J., Feb. 11, 2021 /PRNewswire/ -- PBF Energy Inc. (NYSE:PBF) today reported fourth quarter 2020 loss from operations of $328.1 million as compared to income from operations of $123.0 million for the fourth quarter of 2019. Excluding special items, fourth quarter 2020 loss from operations was $499.3 million as compared to income from operations of $149.8 million for the fourth quarter of 2019. PBF Energy's financial results reflect the consolidation of PBF Logistics LP (NYSE: PBFX), a master limited partnership of which PBF indirectly owned the general partner and approximately 48% of the limited partner interests as of December 31, 2020.
The company reported fourth quarter 2020 net loss of $286.0 million and net loss attributable to PBF Energy Inc. of $298.4 million or $(2.49) per share. This compares to net income of $69.1 million, and net income attributable to PBF Energy Inc. of $53.0 million or $0.44 per share for the fourth quarter of 2019. Special items in the fourth quarter 2020 results, which decreased net loss by a net, after-tax benefit of $246.4 million, or $2.04 per share, primarily consisted of a lower-of-cost-or-market ("LCM") inventory adjustment, a benefit related to the change in our tax receivable agreement liability, a net tax expense on remeasurement of deferred tax assets and a gain on the sale of land at our Torrance refinery, partially offset by asset write-offs, project abandonments, a LIFO inventory decrement, severance and other charges primarily associated with the East Coast Refining Reconfiguration (described below) and a charge associated with the residual costs on the early return of certain leased railcars. Adjusted fully-converted net loss for the fourth quarter 2020, excluding special items, was $547.4 million, or $(4.53) per share on a fully-exchanged, fully-diluted basis, as described below, compared to adjusted fully-converted net income of $73.6 million or $0.60 per share, for the fourth quarter 2019.
Tom Nimbley, PBF Energy's Chairman and CEO, said, "The unprecedented challenges of 2020 provided PBF with the opportunity to become a better company. Our employees, contractors and business partners operated under enormous pressure during the year and their resilience allowed PBF to operate safely and reliably through what has hopefully been the worst of the pandemic. We evaluated many aspects of our business with the goal of reducing operating expenses and driving efficiency in our capital program. We believe the measures we took in 2020, and continue to explore, will improve the competitiveness of our refining system going forward."
Mr. Nimbley continued, "PBF's fourth quarter, and full-year, results reflect the continuing headwinds brought on by the global pandemic and attendant demand destruction for our products. We exited the year with approximately $1.6 billion in cash and other sources of liquidity that will support our business through the current crisis. Although there are some signs of improvement, we expect demand to remain depressed until vaccine distribution is improved so that everyone can return to their normal routines." Mr. Nimbley concluded, "Until that time, we will focus on the safety and health of our employees, the reliability of our operations and the ongoing strategic review of our entire portfolio."
Loss from operations was $1,416.8 million for the year-ended December 31, 2020 as compared to income from operations of $649.0 million for the year-ended December 31, 2019. Excluding special items, loss from operations was $1,441.2 million for the year-ended December 31, 2020 as compared to income from operations of $365.7 million for the year-ended December 31, 2019. Adjusted fully-converted net loss for the year ended December 31, 2020, excluding special items, was $1,421.7 million, or $(11.78) per share on a fully-exchanged, fully-diluted basis, as compared to adjusted fully-converted net income, excluding special items, of $109.3 million, or $0.90 per share, for the year ended December 31, 2019.
Liquidity and Financial Position
In response to the pandemic, we took several steps to protect our balance sheet and increase the financial liquidity of the company, including the issuance of $250 million of senior secured notes in December 2020. As of December 31, 2020, our liquidity was approximately $2.3 billion based on approximately $1.6 billion of cash and current availability under our asset-based lending facility. In addition, PBF Logistics LP liquidity included $36.3 million in cash and approximately $295.1 million of availability under its revolving credit facility.
Strategic Update and Outlook
During the fourth quarter, PBF Energy announced the operational reconfiguration of its East Coast Refining System comprised of its Delaware City and Paulsboro refineries. The completed reconfiguration resulted in the idling of the following units at the Paulsboro refinery: the smaller of two crude units, coker, fluid catalytic cracker and several smaller units. Expected annual operating and capital expenditures savings are approximately $100.0 million and $50.0 million, respectively, relative to average historic levels.
We realized a one-time working capital benefit as a result of overall lower inventory levels required to support continuing operations. We also incurred non-recurring expenses as a result of unit shutdowns and workforce reductions.
We successfully reduced our system-wide 2020 operating expenses by $235 million, excluding energy savings, and exceeded our full-year goal of $140 million in total operating expense reductions. Including energy, our full-year 2020 operating expense reductions totaled approximately $325 million. While some of these savings are a result of reduced operational tempo, the majority are deliberate operating and other expense reductions. Looking ahead, we expect operating expenses on a system-wide basis to be reduced by $200 to $225 million annually as a result of our efforts versus historic levels, including the East Coast Reconfiguration.
During 2020, we aggressively managed our capital expenditures, with total refining capital expenditures of approximately $370 million, an almost 50% reduction to our planned 2020 expenditures. Going forward, we expect refining capital expenditures to be approximately $150 million for the first six months of 2021 and we will remain flexible for the balance of the year depending on the progress of the refining environment.
Our refineries operated at reduced rates during the fourth quarter and, based on current market conditions, we anticipate operating our refineries at lower utilization until such time that sustained product demand justifies higher production. We expect near-term throughput to be in the 675,000 to 725,000 barrel per day range for our refining system.
Adjusted Fully-Converted Results
Adjusted fully-converted results assume the exchange of all PBF Energy Company LLC Series A Units and dilutive securities into shares of PBF Energy Inc. Class A common stock on a one-for-one basis, resulting in the elimination of the noncontrolling interest and a corresponding adjustment to the company's tax provision.
Non-GAAP Measures
This earnings release, and the discussion during the management conference call, may include references to Non-GAAP (Generally Accepted Accounting Principles) measures including Adjusted Fully-Converted Net Income, Adjusted Fully-Converted Net Income excluding special items, Adjusted Fully-Converted Net Income per fully-exchanged, fully-diluted share, gross refining margin, gross refining margin excluding special items, gross refining margin per barrel of throughput, EBITDA (Earnings before Interest, Income Taxes, Depreciation and Amortization), EBITDA excluding special items and Adjusted EBITDA. PBF believes that Non-GAAP financial measures provide useful information about its operating performance and financial results. However, these measures have important limitations as analytical tools and should not be viewed in isolation or considered as alternatives for, or superior to, comparable GAAP financial measures. PBF's Non-GAAP financial measures may also differ from similarly named measures used by other companies. See the accompanying tables and footnotes in this release for additional information on the Non-GAAP measures used in this release and reconciliations to the most directly comparable GAAP measures.
Conference Call Information
PBF Energy's senior management will host a conference call and webcast regarding quarterly results and other business matters on Thursday, February 11, 2021, at 8:30 a.m. ET. The call is being webcast and can be accessed at PBF Energy's website, http://www.pbfenergy.com. The call can also be accessed by dialing (877) 869-3847 or (201) 689-8261. The audio replay will be available approximately two hours after the end of the call and will be available through the company's website.
Forward-Looking Statements
Statements in this press release relating to future plans, results, performance, expectations, achievements and the like are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which may be beyond the company's control, that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors and uncertainties that may cause actual results to differ include but are not limited to the risks disclosed in the company's filings with the SEC, as well as the risks disclosed in PBF Logistics LP's SEC filings; the duration and severity of the COVID-19 pandemic and certain developments in the global oil markets and their impact on the global macroeconomic conditions, risks relating to the securities markets generally; risks associated with the East Coast Refining Reconfiguration and other measures implemented to respond to the COVID-19 pandemic and macroeconomic conditions and the recent acquisition of the Martinez refinery, and related logistics assets; and the impact of adverse market conditions, unanticipated developments, regulatory approvals, changes in laws and other events that negatively impact the company. All forward-looking statements speak only as of the date hereof. The company undertakes no obligation to revise or update any forward-looking statements except as may be required by applicable law.
About PBF Energy Inc.
PBF Energy Inc. (NYSE:PBF) is one of the largest independent refiners in North America, operating, through its subsidiaries, oil refineries and related facilities in California, Delaware, Louisiana, New Jersey and Ohio. Our mission is to operate our facilities in a safe, reliable and environmentally responsible manner, provide employees with a safe and rewarding workplace, become a positive influence in the communities where we do business, and provide superior returns to our investors.
PBF Energy Inc. also currently indirectly owns the general partner and approximately 48% of the limited partnership interest of PBF Logistics LP (NYSE: PBFX).
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SOURCE PBF Energy Inc.