Operator: Good day, everyone and welcome to the PBF Energy Third Quarter 2024 Earnings Conference Call and Webcast. At this time, all participants have been placed on a listen-only mode and the floor will be open for questions following management's prepared remarks. [Operator Instructions] Please note this conference is being recorded. It is now my pleasure to turn the floor over to Colin Murray of Investor Relations. Sir, you may begin.

Thank you, Brittany. Good morning. Happy Halloween and welcome to today's call. With me today are Matt Lucey, our President and CEO; Karen Davis, 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. There are many factors that could cause actual results to differ from our expectations, including those we describe in our filings with the SEC. Consistent with our prior periods, we will discuss our results, excluding special items, which are described in today's press release. Also included in the press release is guidance information related to fourth quarter 2024 operations. For any questions on these items or follow up questions, please contact Investor Relations after today's call. For reconciliations of any non-GAAP measures mentioned on today’s call, please refer to the supplemental tables provided in the press release. I’ll now turn the call over to Matt Lucey.

Good morning, everyone and thank you for joining our call. Our third quarter results reflect market conditions, a combination of weaker margin environment and poor crude differentials that challenged refiners. Our refineries ran well during the quarter. We had no planned maintenance or material unplanned downtime. The operating performance of our assets reflects the dedication and focus of our outstanding employees who work 24x7 in all marketplaces conditions to supply the refined products that are still very much in demand. Weak margins and gyrating market conditions experienced recently do not reflect our longer term view that global refining supply and product demand remain tightly balanced. This tightly balanced system should, over the medium to long-term provide a constructive backdrop for refiners as demand for our products continue to grow globally. 2024 has had a number of factors negatively impacting the year. While demand for refined products in the US has improved year-over-year in the third quarter and has generally been resilient, demand across the rest of the world was less constructive. On the supply side, the market has been impacted by adverse timing as planned refining capacity additions came online in 2024 in front of planned and announced shutdowns that are scheduled for '25. 2025 is trying to be a more balanced year. 2024 has seen net additions of approximately 1 million barrels per day. For 2025, the list of closures or announced shutdowns across North America, Europe and Asia is approximately 1 million barrels per day. As stated, crude oil was particularly strong across Q3 and was a significant headwind to refinery margins over the quarter. Importantly, we are now coming out of the seasonal peak demand period of high runs and seasonal crude burns. As we approach 2025, we should see more relief from the announced refinery closures,…

Thank you, Matt. Good morning. For the third quarter, we reported an adjusted net loss of $1.50 per share and adjusted EBITDA loss of $60.1 million. Included in our results is a $29 million loss related to PBF's equity investment in St. Bernard Renewables. As mentioned on our second quarter earnings call, third quarter results for SBR were expected to be lower as a result of the catalyst change and other concurrent work impacting costs and production of RD during the quarter. SBR produced an average of 13,000 barrels per day of renewable diesel in the third quarter. Fourth quarter, RD production is expected to be 16,000 to 17,000 barrels per day. Cash flow used in operations for the quarter was approximately $68 million, which includes a working capital headwind of approximately $25 million. Consolidated CapEx for the third quarter was approximately $153 million, which includes refining, corporate and logistics. Full year 2024 CapEx is likely to be near the top end of guidance of approximately $850 million. You should note that our CapEx guidance and reported CapEx is on an incurred basis, but our cash flow statement will reflect actual cash spend for capital expenditures and turnarounds. Our year-to-date 2024 capital expenditures for the cash flow statement includes approximately $145 million of cash outflows related to our 2023 capital program for work completed at the very end of 2023. Through share repurchases and our dividend, we continue to demonstrate our commitment to shareholder returns by delivering approximately $104 million to shareholders in the third quarter. Since our repurchase program was introduced in December of 2022, through the end of the third quarter, we have completed approximately $990 million in share repurchases. This represents over 17% of our outstanding shares at the beginning of the program. We have reduced our total share count to approximately 115 million shares as of September 30th. We ended the quarter with approximately $977 million in cash and approximately $1.3 billion of debt. Maintaining our firm financial footing and strong balance sheet remain priorities. Our ability to fund operations and continuously invest in our assets will always be our first priority and while dependent in part on our financial results, continues to be underpinned by our financial strength. Through the challenging market conditions of the past few quarters, we have continued to support both operations and shareholder returns. Operator, we've completed our opening remarks and we'd be pleased to take questions.

[Operator Instructions] And we will take our first question from Roger Read with Wells Fargo. Your line is now open.

Yeah. Thank you. Good morning.

Good morning.

I didn't really talk about the preamble, but it's certainly one of the big topics out there. California, I was just wondering if we could kind of get your thoughts on some of the changes out there, both on the front end with the government and then the announcement by one of your competitors that they're going to exit the market about a year from now. Maybe how you're thinking about the outlook in California.

Thanks, Roger. Look, in some respects, I don't have a lot of interest in throwing sand or quite frankly, inviting scrutiny. But the assault on the industry continues from the regulators and the politicians in California. I don't know if you saw it, the governor held a press conference a couple weeks ago. We essentially vilified, attacked our integrity, called me, all my colleagues and everyone else in the industry liars and accuses of stealing from people in California. All the while, they can't plead ignorance on the fact that the industry swallowed significant losses. They knew that because that's part of California regulatory regime. We, along with all the other market participants, submit monthly statements. So, I think it's important to note just the reality. It's important to note even currently, the industry in California this quarter, like I said, swallowed down significant losses and it's still the highest price of gasoline in the country. And that's primarily because of the state's involvement. The state charges either tax or through other mechanisms, other costs. Approximately -- I think it's close to $0.70 more than any other state. And that's set to potentially go up 50%. And those are impositions they're putting on the people. And so, it's sort of -- I sort of chalk it up to maybe my cynical view of every other statement that politicians seem to make, where every accusation, I guess, may be a confession. I was certainly offended by the press conference, but it is what it is. The reality is the state doesn't address the root cause of the problem. It only exasperates it. The old Reagan joke of, we're here for government and we're here to help. That's multiplied by a factor of 1,000 when you're talking about the state of California and every bit of involvement they make, the market becomes less efficient. Now we believe we have two of the most complex refineries out in the West Coast. The supply/demand situation is seemingly getting worse with a major refinery on the heels of the governor's latest salvo as announced its closing. And the state desperately will need refined products going forward, and we intend to provide it to them, provided that there's a landscape for us to operate both in terms of our refineries being competitive and well-positioned. We do think that, and I think this can be critical for the state. I don't know if there's much more to say in that regard. I could go on.

Yeah. Yeah, I understand. It's hard to know where to stop things like that. Let me change direction a little bit. The increase in the dividend by 10%, you mentioned the cost saving targets. Maybe there's something also that will happen on the CapEx side in terms of trying to just look for ways to turn spending. But given that a smaller company slashed their dividend, I got to say it was one of those things I wasn't really anticipating. So, maybe you can help us understand what goes into the thought process. Maybe it's the strength of the balance sheet, your outlook, et cetera, to give you the confidence to raise a dividend here.

So, two years ago we reimposed the dividend and what we said at that time, and we very much like to follow through on everything that we say and mean what we say and say what we mean. Two years ago, we reinstated it and we said we were going to look at annually, and I have no interest in gyrating our dividend quarter-to-quarter. We tried to design a dividend that is conservative, reliable and stable through cycles. And as we look at it, we look at it on an annual basis. So, a year ago we raised it. A year ago on this call, we raised it from $0.20 to $0.25. And this year we looked at and based on the current market, which is challenging, but the cycle -- the marketplace in the medium to long-term looks very constructive. And when we look at the cost of $0.275 and we compare that to our expectations of midcycle free cash flow, we're very, very comfortable with the $0.275 and we're happy to give it to shareholders. It's just the reality in our industry in a -- when you look at a midcycle number, there are going to be periods where you're going to be below that and there's going to be periods where you're going to be above it. The reality is you may not even have a cup of coffee when the market's actually at midcycle. But we look through the cycles and come up with what we think is a good, solid, defendable, conservative dividend. And again, we intend to look at it on an annual basis.

Great. Thank you.

Thank you. We'll take our next question from Doug Leggate with Wolfe Research. Your line is open.

Hi. Good morning, everyone. I guess, Matt, I want to also go back to California. Not so much on the press conference and the ask of the industry, but more the dynamics of what's going on out there. As we see it, about 70% of diesel demand in California is now covered by renewable diesel. And even though we're getting another refinery shut at the end of next year, potentially it looks like imports to meet the retail obligation of Phillips 66 in particular, means that the market is probably going to remain pretty well oversupplied. So, I guess, leaving aside the regulatory issues, how do you see the actual fundamental supply/demand dynamics playing out in that market, especially on the diesel side?

Yeah. So, there's three major products on the diesel side. We'll invite Paul Davis, who is our resident expert on everything California comment. But obviously, the gasoline side is shorter and gets significantly shorter still with the announced shutdown. We're insulated a bit on CARB diesel because that's never been a significant part of our business of Torrance or Martinez. We export a little bit out of California. And then jet, we're obviously a major producer of jet. And so, you want to isolate one product, you can, but you have to look at the suite of products and see what's going to happen. And there is a limitation on logistics. The state was designed around its refining system. It was well supplied and that supply is declining. And the resupply is just more difficult. It's more difficult from a logistics standpoint and it's more difficult from a cost standpoint. Your resupply into California from imports is three weeks to a month of travel time. So, I think, broadly speaking, it's going to rely on significantly more imports. And on the diesel side, we understand that renewable diesel is being called to California and that will continue with the programs they have in place. And that's not a surprise to us. We've been set up for that. Paul, any other comments?

Well, on the diesel side, you're seeing some of the balancing happening as we speak. I mean, the plant that's going to be shutting down at the end of '25 makes a predominant amount of CARB diesel and it's going to be balanced by when they shut in. The balancing act is going to be the renewable diesel they're producing up in the bay. There's going to be a lot less imports of renewable diesel coming in from Asia and other parts when the blender tax credit goes away. So, there's still some wrangling going on in the distillate balances on the West Coast. From a PBF standpoint, Matt said it correctly. We're primarily a jet-maker on the West Coast. We make gasoline and jets and we make just a de minimis amount of CARB diesel and we make some export diesel that goes into Arizona and Nevada. So, from an outright distillate crack standpoint, our primary capture is always on the jet side.

Okay. Thank you for that. Matt or Karen, my follow up is a philosophical question on your decision on the dividend and buybacks and so on. If you can give me a minute. I think this is a really key issue as folks look at how you've managed to delever your business over the last several years with the windfall cash flows we had after COVID. But at the end of the day, you're basically an annuity business. It's not clear how long it's going to take for the market to clean up in terms of refinery closures and so on. And I put it to you that in an annuity business, your equity value is what's left after net debt. And raising your dividend and buying back stock is essentially building net debt at the expense of equity value. So, I'm just curious, when you think about it like that, how long or how -- to what extent are you prepared to continue with buybacks and dividends if the cycle remains depressed or at some point do you pause and wait and see how it plays out?

I think -- okay, so nothing is static, obviously, Doug. And there's going to be period lucky, you've been following the industry forever. There's going to be periods of weakness and there are reactions to that. We're seeing that now in terms of capacity coming off. And so, we spent a lot of time this year devising and analyzing what the medium to long-term outlook for our business looks like. And to be frank, we think it looks very constructive. We've had some timing issues over '24 as the net addition certainly outstripped shutdowns in '24, but there are some -- and they continue to pile up and it might -- my suspicion is that they will continue to grow for those refineries that have structural weaknesses or in markets that are structurally weaker than the market in which we operate. So, your thesis of is going to be lower for longer, we'll see now if this persists for many years, we can certainly reevaluate it. But the marketplace is a function of supply and demand, and we certainly like our competitive positioning within the marketplace.

I don't know that we say many years, but I appreciate the color, Matt. Thanks so much.

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

Good morning. You always have a very informed view of the global heavy/light spreads and what are you looking over there? And then even if you could help us understand what your view on the Canada side is, looks like the production is rising, but then the TMX is on, which can technically benefit you on the West Coast. So, help us walk through what you're seeing out there in terms of global heavy/light spreads and can they improve in 2025? ThomasO’Connor: Thanks, Manav. It's Tom. When looking at the heavy market right now, I mean, we're certainly coming through the very high run environment in the third quarter for the reasons that Matt described earlier in the call, plus also the seasonal crude burn. I think we're obviously on the precipice at this point and we'll have certainly some direction next week further from OPEC. OPEC+ in terms of the taper and the expectations there -- I mean, obviously, there was discussion or sources in the press yesterday referring to that OPEC+ may be deferring that in another month. But I think we're certainly in the expectations that the heavy side of the barrel sort of peaked in terms of its strength seasonally in the base case, and then secondarily OPEC+ introducing some more oil whether it's in December or whether it's in the first quarter. But I think it's then really important to sort of really look at that in the fourth quarter of this year PADD 3 turnarounds were particularly light and then where there is quite an active turnaround planned maintenance schedule for the first quarter, which would certainly introduce more oil to the market for those that are operating to sort of put the market back into better balance. Regarding TMX, I mean, in terms of the production side, we're seeing the same things in terms of -- from the production side of the equation.

Perfect. My quick follow-up here is quarter-over-quarter, Mid-Con results did show an improvement on a relatively flattish crack and help us understand whether you ran better. What helped you drive an improvement in Mid-Con earnings quarter-over-quarter?

Manav, I don't know that I would point to anyone saying, the refinery of Toledo has run well, and they've actually performed well all year. And so, we've been pleased with that. Obviously, there can be gyrations quarter-to-quarter on different aspects of products or on the crude side that can play with capture rate a bit. But nothing to call out for Toledo, other than the fact that they've been operating well.

Thank you for taking my questions.

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

Thanks. Maybe starting out, the $200 million cost savings target that you're targeting by the end of 2025, can you maybe walk through some of the bigger -- the primary buckets that you see in terms of driving that savings? Any sort of details you might be able to provide there?

I'm going to hand that over to Mike Bukowski.

Sure, Ryan. Thanks for the question. So, over the past month or so, we've put together a task force that we looked at internal and external benchmarking and looked at some best practices across the system to see where we can identify opportunities. And again, with any maintenance budget, your biggest category of expense is going to be energy. So, of that $200 million we think there is about 30% to 40% of it we could get in energy reduction. And then the other categories run the gamut in terms of our maintenance, our third-party spend. So, look at that in terms of catalyst and chemicals and some of our operating supplies. There are two capital categories in there, and those are turnarounds in capital projects. So, we think that there is an opportunity on the maintenance and turnarounds, for instance. It's really about driving better efficiency on turnarounds. It's also some scope optimization, some interval optimization. And I would say, as I said before, the energy piece is about 30% to 40% and the balance of that of those other buckets are roughly evenly distributed across.

Thank you. That's very helpful. Maybe a follow-up on, as you think about capturing, I know it can be a tough topic, but we've generally seen that across much of the industry kind of decline over the last 18 months. There have been headwinds to capture. As we look into maybe end of the fourth quarter or into the early part of 2025, anything you can point to in terms of some of the moving pieces, whether it's crude backwardation or secondary products or differentials that where we might see an improvement, anything encouraging on the capture side as we look going forward?

Yeah. The biggest driver is and he sort of alluded to it. And so, the couple of things you mentioned is, is on the crude side. And in the third quarter, as Tom went through and some of the comments in the transcript, there was particular strength on the crude side. The crude market was significantly stronger than the -- on the product side. And we went through those reasons why in terms of new plants coming on, drawing more crude. It was Q3 when all our plants sort of around the world are trying to run in front of certainly turnarounds in the Northern Hemisphere. You have seasonal crude burning in the Middle East, which draws on. And then all the while, you've had -- and then you had geopolitical sort of noise, which was adding to it. And hopefully, on the geopolitical side, we can all pray for a more stable environment there. But also a big flywheel here is OPEC. And whether it's in December or January or some month thereafter, I'm not sure. But there's certainly conviction that they're eventually going to sell their oil, and it becomes a self-fulfilling prophecy that should -- that market should loosen up. Indeed, we're seeing it. We're seeing it today just on the backs of entering turnaround season. So, the biggest driver on capture rates, if you're running well, we ran well, we intend to continue to run well, is on your discount, on the feedstocks you're running. And I'm hopeful that the worst is behind us in that regard.

Okay. Thank you.

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

Yeah. Good morning, Matt and team. I guess, the first question is, you've talked in the past about the potential for asset monetization, specifically underutilized assets like the development of available real estate. Just curious on your perspective of, as you think about your portfolio, does that make sense? And where do you stand in that process?

Thanks. So, I don't have a specific update. It absolutely makes sense. We absolutely have teams of people that are focused on exactly what you just laid out, whether it's capitalizing on value that's within the company on assets that are underutilized, i.e. real estate. We are actively working to sort of develop and create value in that regard. And I think there's actually very constructive possibilities there that -- and that's the reason we've allocated the resources to it, and we'll continue to do it. And in terms of other unutilized assets, so it's a non-core strategic assets. Yes. We're constantly evaluating those and exploring, whether they should be held by us or by other parties that will value them in a more constructive way. And so, that is -- that's a significant part of our job that we take very seriously and evaluate on a real time basis. And we'll certainly communicate, if there's something to be done on one of those items.

Yeah. Matt, is there a specific asset or region that you're specifically focused on as it relates to real estate or you don't want to cover that?

Yeah. No. The obvious one on the real estate side is because we have incremental value. It's not a substitution of. We have excess land in Delaware. And that land is being utilized in Ag today. We rent it to farmers. And there's no question, there is going to be a higher and better use for that property. And we think it potentially holds a tremendous amount of value.

Thank you. And then the follow-up is around environmental payables, which I know has been a big focus for you guys to reduce the outstanding levels. Can you just talk about where you are? How we should be thinking about that in 2025 and the moving pieces?

Sure. Sure, Neil. Thanks. The environmental liability, and I need to remind you that includes not just rents, but LCFS, cap and trade. It's the entire bucket. It increased from $429 million to $474 million at the end of this quarter. And -- which is slightly above our guidance range this quarter, primarily because of -- it simply reflects some extended payment terms for cap and trade payables. Typically, we view that as ranging between $200 million to $400 million.

Thanks, team.

Thank you. We'll take our next question from John Royall with JPMorgan. Your line is open.

Hi, good morning. Thanks for taking my questions. So, I just had a follow-up on Doug's question and maybe just drilling in a little bit more on the balance sheet. You've spent -- almost two years at negative net debt, and leverage has now ticked up to be a little bit positive, not meaningfully so. But you are remaining aggressive on your buyback and hiking dividend and cracks have come down. Do you still expect to kind of live in that close to net zero type range on net debt, or at the low point in the cycle? Are you comfortable levering up a little bit? Is that more of kind of a through the cycle target with the zero net debt?

I think it's having zero net debt positions you incredibly well for a cycle. There's a period of time where you have to lean into the balance sheet. You're still talking about a very, very conservative balance sheet. And so, we take it very, very seriously. We monitor it very, very closely. But we also have an outlook that goes beyond the next number of weeks or the next couple of months. And so, we have confidence in our business and where we stand within the industry in that regard. So, as we go through difficult periods of time and we need to lean into the balance sheet, that's what's there for.

Great. Thank you. And then, follow-up is just operationally on the West Coast. Can you just give a feedstock update on the West Coast? I think you had mentioned previously that you were running about 25 KBD of TMX barrels and hoping to get to 50. Where are you on that today? And are there any challenges with running those barrels or any kind of learning curve you have to get up in general?

Yeah. I'll make a couple of comments and I'd like Paul to follow-up. In the third quarter, we ran 20,000 barrels a day. In actuality, in the fourth quarter, I expect we'll run less than that. But that is not -- there's a little bit of we're doing some maintenance on some sulfur equipment that those crudes are higher in sulfur than some other alternatives. But that's not really the driver. The driver is how those barrels price. And so, we look at the marketplace and we look at the suite of crudes that are available. They have -- we're going to pick the most economic. Now what we've been focused on is we've been preparing our catcher's mitt where to the extent those crudes are available and economic, we can run up to 50,000 barrels a day of Trans Mountain, Western Canadian crudes. And so, we have the capability, the optionality, but they have to be delivered in a cost competitive way. And I think for a whole host of reasons, some of which we were talking before in regarding it -- in regards to the tightness of the crude market, and some of the things that are going on in Asia, those barrels have been bid up a bit. That is not my long-term projection. I think we're in the very, very early innings. And at the end of the day, the California refineries are going to be have the least amount of logistics cost to get that crude into those refineries. So, I think, over a span of a long period of time, my suspicion is that we will be running significantly more of it over time. Any other comments?

No, I think you kind of covered it. I mean, bottom line, it gets down to price and right now, the -- or going into the third and fourth quarter, the Asian markets fitted very aggressively and it wound up going Transpacific. I think the West Coast systems can run a fair amount of TMX type barrels, whether they're sands, suites, or WCS's. So, it's going to depend on price, and that's going to be for us and everybody else on the West Coast.

Very clear. Thank you.

Thank you. We'll take our next question from Paul Cheng with Scotiabank. Your line is open.

Hey, guys. Good morning. Matt, just -- or maybe that's for Karen. Do you have a rough outlook for 2025 CapEx? And that if the market condition really remain challenging on yourself improving next year, what is the minimum you need to spend? That's the first question.

Well, with respect to '25 CapEx, we're still in the process of finalizing our 2025 capital budget. I would just point you in terms of a range we've often talk about a typical range of between 750 to 800 and some years it's going to be higher based on turnaround activity and magnitude of margin improvement projects, et cetera. On the other hand, if weaker refining margins materialize, we'll look to reduce capital spend where we can. But while as is our custom, we expect to release the guidance in early January along with our turnaround schedule.

That 750 to 800, is that including any growth capital in there, or is already, say, on a maintenance capital and meet the turnaround basis?

Our CapEx budget always includes an element of discretionary growth projects. So, yes, it would be included.

Okay. On -- Matt, can I -- sorry that to ask this question. If we go back into the dividend, based on your dividend one way and your cap expanding, like, 750 to 800 a year, what is the crack spread with environment you need in order for you to be cash flow breakeven? Any -- I mean, comparing to the last 12 months that you did, you think you need to be $5 better or any kind of -- what number that you can share?

I think it would be too difficult to isolate to a specific rack. So, I -- because there's too many other dynamics. There's operating costs, crude differentials, energy costs. But over the long span of time, as we've analyzed our business through multiple cycles, in a midcycle environment, which includes periods of lowering and up cycles, we generate free cash flow, call it, $300 million to $500 million. And that can be in multiple markets where strong cracks and weak crude differentials or vice versa. So, isolating one crack, I think is too difficult or quite frankly, it's not an accurate assessment. But as we look forward and all the advantages the North American refiner has, but more specifically that PBF has, of having the complexity that we have, the location that we have, the optionality that we have, we think we're well-positioned, not only within North America, but when you compare us globally.

All right. Very good. Thank you.

Thank you. We'll take our next question from Joe Laetsch with Morgan Stanley. Your line is open.

Hey, good morning team and thanks for taking my questions. So, I wanted to follow-up on the $200 million run rate cash savings. On the energy reduction side, should we think about that as being smaller, quick hit projects or be larger projects requiring more capital? I'm just trying to get a sense of anything through the CapEx needs to hit that $200 million reduction? Thank you.

Yeah, Joe. On the energy side, we expect these to be a combination of some small maintenance dollars that we need to spend and some small capital and then just increased governance, increased optimization at the plant. So, I wouldn't expect large capital on these projects.

Great. Thank you. And then, shifting gears, I wanted to ask on SBR. Now that that's been online for a little bit more than a year, could you just talk to the performance of that asset relative to expectations? Thank you.

Yeah. So, you got to start with the market. The market clearly has been below market, and I think that's shaking itself out a bit. Over the -- again, sort of looking through any quarter or any month, my expectation, sort of like the highest level sort of investment summary is that governments are going to incentivize renewable diesel. Now there's multiple players within renewable diesel, and I think we're positioned with our pretreatment capacity as well as our location and our ability to distribute our products to a whole host of markets. I think, we're in the top quartile of manufacturers of renewable diesel. That is not translating to profits over '24. I'm not confused on that. But again, there's a little bit of a shaking out and there's been a number of players whether it's on the biodiesel side or as some players morph into sustainable aviation fuel. The market is dynamic and will continue to shake out. With our partnership with the Italians, Eni, which has been, very, very good. I'm highly confident that our offering of renewable diesel is as competitive as it needs to be. That being said, anytime you start a new business, there's pluses and minuses. And I think the minuses for us, I think, quite frankly, have been shared by others in the industry. Catalyst has underperformed sort of original expectations. There needs to be a bit more maintenance in terms of catalyst changes and shorter cycles. But we'll continue to line that out and make improvements on that. Never underestimate engineers in that regard. I'm hoping for continued improvement on that side. And as far as our partnership, couldn't be more pleased. And the marketplace, we're starting to see some green shoots in terms of what it looks like. And certainly, the fourth quarter looks better than the third quarter performed from a marketplace standpoint. And then a lot will rest on the new programs that the government's going to roll out once their tax credit is retired at the end of this year. But like I said, for us, we like the asset. And quite frankly, it is no doubt a hedge for us against RIN prices. And as it may have contributed to RIN prices coming down, that's to the benefit of PBF as well.

Thanks, Matt. I appreciate it.

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

Yeah. Hey, this is Jason Gabelman. I wanted to go back to this $200 million in cost savings because we've seen others try to implement similar programs, and it's unclear to what extent these programs have offset cost inflation versus resulted in actual reductions in cash costs. So, can you just kind of discuss what you've seen in the market from an inflation standpoint and what you expect going forward? And if you expect the $200 million to be kind of on an absolute basis or if you expect to offset continued inflation?

So, this is Mike. I'll take that question. So, the $200 million is the basis of that is on the 2023 actual expenses. We did make some adjustments for the reliability of the plant when we set our baseline or the plants when we set our baseline. We didn't want to take credit for improved reliability. So, we are going to go out in the field, do bottoms up initiatives to actually drive reduction of energy consumption. It's not going to be driven by price. We're going to do efficiency-based projects in terms of how we do our maintenance. So, it's not going to be driven -- there may be some scope adjustment as we optimize our PMs, but it's going to be done -- driving how we improve our efficiency. Of course, we're going to have to eat the raises that our maintenance employees get contractually, that's going to be a piece of that. Turnarounds, that's another example where it's largely driven by initiatives to drive efficiency and doing the same work at a less cost. Given the timeframe that we're talking about driving these cost reductions, we don't expect inflation to be that high and it hasn't been that high, it's kind of tamped down. I know some of those other companies that have done that, have done that in a real high period of inflation, so it's been difficult to show those savings. But given the timeframe that we're talking about here, I don't expect to be a large piece of it to be inflationary offsets.

Okay, great. And then my other one, just going back to Ryan's question on some of the headwinds to capture, appreciate the comments on heavy/light dips. But it seems like this year there's also been impacts from backwardation and coproducts. And I'm just wondering in a more normalized environment, if you could kind of approximate what those headwinds would look like relative to what they've been like this year on the coproduct realizations and crude backwardation? Thanks. ThomasO’Connor: Jason, it's Tom. I mean -- and certainly in terms of the crude side of the equation, I think it's also one element at that point that we haven't discussed at this point is really kind of be looking at the third quarter, right, I mean, was the lack of hurricanes impacting anything in terms of the US Gulf Coast. Clearly, obviously, the hurricanes were in the Eastern Gulf and obviously through the things in terms of the damage and to the -- that it did to demand and to communities certainly on the eastern side of the Gulf. But basically, refineries weren't impacted and crude supply was gyrated down, obviously subsequently came back, but was just another contributing factor at that point, the strong crude. I think when you also have to think about it at this point is that when looking at basically the assessments in the markets is cash crude was just even more expensive than just examining data, right? The grades were trading at a premium to the data market. So that really contributes to that point really sort of like -- the waterborne markets were even tighter than expectations. I think at some point, I think you could have looked at it in. I think it was early September if you were just looking at sort of,…

Great. Thanks for that color.

Thank you. We have reached the end of our question-and-answer session. I will now turn the call over to Matt Lucey for closing remarks. End of Q&A:

I greatly appreciate everyone's participation today and look forward to speaking with you again next quarter. Have a great day. Happy Halloween.

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