Welcome to the PBF Energy Fourth Quarter 2014 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode, and the floor will be opened for your questions following management's prepared remarks. [Operator Instructions] It is now my pleasure to turn the floor over to Erik Young, Chief Financial Officer. Sir, you may begin.

Thank you. Good morning everyone and welcome to our fourth quarter earnings call. On the call with me today are Tom O'Malley, our Executive Chairman; Tom Nimbley, our CEO; and other members of our management team. A copy of today’s earnings release, including supplemental financial and operating information is available on our website www.pbfenergy.com. Before we get started, I'd like to direct your attention to the forward-looking statement disclaimer contained in today's press release. In summary, it outlines that statements contained in the press release and on this call 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 described in our filings with the SEC. As also noted in our press release, we will be using several non-GAAP measures while describing PBF's operating performance and financial results as we believe these measures are useful but they are non-GAAP measures and should be taken as such. It is important to note that we will emphasize adjusted fully converted earnings information and results excluding special items. Our GAAP net income or GAAP EPS figures reflect a percentage interest in PBF Energy Company LLC, owned by PBF Energy, Inc. which averaged approximately 90.1% during the fourth quarter. We think adjusted fully converted net income and EPS are two more meaningful metrics to you because they present 100% of the operations on an after-tax basis. Before discussing our results, I'd like to take a moment to review the non-cash lower-of-cost-or-market or LCM inventory adjustments that we recognized in the quarter. This GAAP adjustment is driven by the accounting requirement to carry inventory on our balance sheet at the…

Thank you, Erik. And good morning, everybody. Excluding the non-cash LCM adjustment Erik eloquently described PBF had a good year. Not without its challenges but very positive nonetheless. We accomplished quite a lot in the last 12 months even during times when the market was not always a friend to refiners. Whether that due to narrower feedstock differentials or lower product margins. We completed a number of renew enhancing projects across all three of our refineries. We completed the build out of our East Coast rail system. We successfully launched PBF Logistics and we completed one of the largest turnaround ever undertaken at our Toledo refinery. Probably our biggest success of the year and it happened over the course of four quarters, was the emergence of the earnings potential of the East Coast. The East Coast contributed over 60% of our refining EBITDA for the year. We understand that one year does not establish a trend, but we view the performance of our East Coast system in 2014 as a direct result of the optionality that we have built into our system in terms of being able to sort in land and waterborne crude oil. Because of our coking ability on the East Coast, we are able to run any type of barrel. Light sweet, medium, heavy or sour. And realized the benefit from converting the bottom of the barrel. The ability to run virtually any type barrel or mix of barrels gives us a tremendous advantage on the East Coast as we are not locking to a single type of crude and could be flexible in buying the most economic mix of crude oils to run through our system. Before continuing on to the fourth quarter results, I'd like to provide an update on a now completed turnaround in…

Thank you, Tom. I am just going to comment on a few general points. The first being the price of oil and perhaps the motivation for the Saudi's actions and not sponsoring some type of reduction in production. Our best info indicates that when the Saudi's were evaluating this situation they understood that the price north of $100 a barrel promotes crude oils resulting in a decline in consumption of oil products. Now I suppose if your country was the 100 or 150 years of production capability and that's your principal export that's bad news. While there might have been subsidiary reasons in terms of wanting to see lower supply, I think the main issue there was this price constrains the market in terms of consumption. So our own reading of what's going to happen in the marketplace is that we will see some recovery whether that's prompt or I three months or in six months really we can't forecast that. But certainly these lower crude oil prices and lower product prices resulting there from are increasing consumption. Obviously the lower crude oil prices are constraining production. The latest figures published that came out this morning I believe indicated a very small growth in US production and indeed that growth is going to be reversed in my opinion in the months to come. Certainly other productive areas offshore deep water the Gulf of Mexico, it is going to be very difficult at these numbers, I would imagine that Brazil will have a hard time developing its reserves and there are certainly other places in the world where we are going to see a contraction. So ultimately those old economic laws of Adam Smith of supply and demand will come into play. In terms of the environment for particularly US refiners…

[Operator Instructions] Our first question is coming from Mohit Bhardwaj with Citi. Your line is open.

Yes, thanks for taking my questions. Tom, I just had a question on the CapEx guidance that you had provided. So it seems like majority of the CapEx beyond the railcars this year is the sustaining CapEx and in your most recent presentation, you guys have talked about increasing EBITDA by at least [$130] [ph] million through additional projects in 2015. If you could just talk through that how the two numbers jibe up?

Yes. Thanks for the question. The reality is the shift from using - when we put our original CapEx forecast together we had contemplated building the hydrogen unit at the Delaware City refinery ourselves when we went though the economics on that it is clearly more attractive to use third party money to get that built and pay a tolling fee and allow us to still get most if not all of the benefits of what that project would have done if we have built it with our money. To put in perspective that project is expected to generate, that project alone is expected to generate between $75 million and $95 million a year of EBITDA once it is complete and the range there is frankly a function of what the flat price accrued is. So even though we decreased our CapEx guidance, we would not expect to have a significant and frankly only a marginal impact on the return elements and the EBITDA contributions mainly because we are using somebody else's money to build the biggest investment. And the way -- the reason that range exist is one of the things the hydrogen plant does is basically because we are short hydrogen in Delaware in the East Coast, it is a gas liquids project so it actually increases volumes well in Delaware, we will make more products than we buy and if the price accrued is $60 it is worth something if the price accrued is worth a $100, it is worth more, so wouldn’t expect to see much of an impact on EBITDA at all.

Great. And Tom if you could just tie in with the comments that you made regarding acquisitions, is it like leaving more cash on the balance sheet, if the opportunities arise as you are in multiple processes.

We are looking at a number of opportunities. We are going to protect the balance sheet. There is no doubt about that. But our balance sheet is strong. We have now basically gotten to the point where we have absorbed three refineries, we have built out our infrastructure in the back office and in Parsippany have a vibrant commercial operation. So we are in a position where we will pursue, we are pursuing and we expect to do acquisitions both for the parent company and logistics company but we just simply will not buy something just to buy it. We are seeing different model show up, there is different players in the field that we are looking at or we are competing with. And we are evaluating how to respond to that. But we won't compromise our balance sheet, but with the number of opportunities and Tom made comment on this thing, there are a lot of assets that are on the market and more likely are going to come and we feel very comfortable and confident that we will be able to get an accretive acquisition.

Let me just add a comment. The alternative we always have is buying our own shares. And when we evaluate the quality of the assets that we have within the company and we look at the marketplace for assets that are being sold, it certainly has been a bit of a toss-up, we might be better off taking in additional shares from our company. So that's kind of how we evaluate everything going forward, careful with the balance sheet, look at everything that's available in the market place, in North America, and try and figure out what the best way is to spend the shareholders' money.

Very cleared, Tom. And one final one if I may. Tom, you guys are usually provide like some guidance on rail volumes, this -- you were referring to this aspect before that you are probably getting more barrels -- medium sour barrels from offshore delivery. If you could just give some numbers around that, that will be great.

Okay. Yes, again and we can't over emphasize the benefits that we see from having the complexity to handle any barrel basically that is being pretty much produced in the world. But right now the economics have shifted as you are well aware. You take a look at heavy crudes out of Canada and the [indiscernible] not only to the East Coast by rail but frankly the [indiscernible] to the Gulf Coast of the United States by pipe. So we have switched over because we have much more economic options running medium and heavy sours like Maya and M100 et cetera. That being said, we are still running a fair amount of heavy crude for the first quarter. We will see what the market does in the second quarter. I just said frankly in April they are, based on today's prices, is not open. Bakken, we slowed down our Bakken purchases again because of economics and it is very important that you all understand that one of the reasons we slowed down Bakken purchases by rail because we can run a South American crude, sour crude that makes a lot more money for us. The other refineries in the Pad 1 their option, because they are light sweet only, is to substitute Bakken for a West African barrel and that's simply not as attractive. But we did slow down some Bakken, however, right now the Bakken is [indiscernible] and opened up and we've done some deals, again you should always keep in mind, don't look just at the index pricing, we have supplier relationships in the Bakken that will allow us to benefit from some better economics and right now we are actually starting to see that all opened up but it will be a function of what the price -- actual prices are over the course of the next two or three months.

And we will take our next question from Paul Sankey with Wolfe Research. Your line is open.

Hi, good morning, everyone. Could you just talk a little bit more about your CapEx in Q4? I am not totally sure what's in that - very big looking number. And I think it is related to rail, could you talk a bit about who loses out from your optionality, that's to say if you decide not to rail crude but rather to bring it in waterborne, is it harming to your logistics side or is it someone else who loses out on the revenue that would be earned from the rail trade? Thanks.

Paul, it's Tom. I'll take the second question; Erik will take the CapEx portion of this. We have take-or-pays with the logistics company, the parent company is require to and does meet those take-or-pay commitments so the logistics company will not be impacted by that, they will get the minimum volume commitment. We obviously have cost associated with the rail unloading facility whether it be on the light sweet, the loop track where we do the light or the west rack where we do the heavies and those costs are notionally $2, $2.20 to unload but they are factored into the economic evaluation that we do. And even with those costs the spreads that we are seeing on the delivered basis for the heavier, medium sour crude, waterborne crudes, make it clear that the best proposition for PBF even having to adhere to those take or pays, is to switch over and run those waterborne crudes.

Are you public on what the take-or-pays are?

Erik will give you the actual…

For the logistics company absolutely we have minimum volume commitments on the double loop track at Delaware City as well as minimum volume commitments on the West Rack, it is also located at Delaware City.

And it is 85,000 barrels a day on the double loop track that's the sweet side, and 40,000 barrels a day on the West Rack on the heavy side.

And Paul with your question regarding CapEx. So the gross CapEx for the quarter was $300 million. We did sell - included in that is approximately $126 million worth of CapEx related to railcar purchases. So if you remember we are taking delivery of our railcar fleet over a period of time. We will be finishing up railcar deliveries based on current estimate the first half of this year. So we've spent $126 million of the $300 million on railcars. And then we subsequently did various sale lease backs throughout the quarter and generated net proceeds from those leases of $128 million. So the net CapEx is about $170 million to $175 million in total. There will be a timing difference that we will see when we buy these railcars because we are packaging the railcars into call it between 200 and 500 cars at a time and then ultimately go into the leasing market versus just flushing a railcar through the system and then leasing them in 10 railcar lots.

Hey, Paul. Just keep it simple. We spent $175 million bucks during the quarter at Toledo. And if you take the $125 odd million of sale lease back on the railcars, you simplify the whole thing and it is not much more than we forecasted with the exception that we had to spend more in Toledo than the original budget.

And our next question comes from Manav Gupta with Morgan Stanley. Your line is open.

Congrats on the great East Coast results, guys. My question is are the East Coast assets now where you would like them to be when you IPO'd back in 2012 and did you see further scope of improvement in these assets, they are performing well but is there further scope of improvement and any projects you could highlight which could further increase the capture on this East Coast assets.

Hi. I will just take that. We are satisfied with where the East Coast asset are, they are performing at the present time beyond our original model. Certainly Tom has already outlined for you the addition of a hydrogen plant at the Delaware City refinery which will add to the EBITDA somewhere between $75 million and $100 million. He also mentioned in his opening remarks an improvement in our chemical yield over at the Paulsboro refinery which again should add something to the EBITDA, but really as a general remark across the industry and certainly as it refers to PBF, we always try to discover new projects. We don't have a great deal of new projects in the investment budget of the East Coast because we think the East Coast system now is very mature but that doesn't mean that six months, nine months, a year from now we might not come up with a project. In general however, the philosophy within this company is we don't want giant projects that come to fruition three years from the time that you indicate you are going forward. We’re really focused on what can we improve in three months and six months and nine months and a year, what is very resilient for instance a hydrogen plant. So that's the kind of thing we are after. But you should view it now as a very strong system, in fact in my opinion by far the strongest system on the US East Coast.

I have a follow up and that is any views on the USW strike, you are obviously not in the 11 refineries currently impacted by it but just trying to understand if the strike spreads to other refineries, could you also be impacted in any way?

Okay, very good question. The short answer is we will not be affected by a spread of this strike spread. Last year not necessarily anticipating the strike that is underway right now, we had -- we were preparing for the Toledo turnaround and we didn't want to be in a position where we would have to be spending a lot of our resources on strike preparation which you would have to do because of the contract terminating as the time that it did. So we actually settled with all three of our refineries early. And we gave basically what is call the me too, so we settled all local issues with Paulsboro at Delaware City in Toledo and when we are hoping to soon that the USW is settles with the industry, whatever the wage settlement is health benefit et cetera, we will give the me too our refineries. What we got for that of course is two things. One, the USW, all three refineries, one of our refineries in Paulsboro is not USW but all three refineries cannot strike and we cannot lockout any of the employees at any of the three refineries so from that vantage point, we are insulated, we cannot be struck at this particular time. But again we hope that wisdom prevails here and Shell who is the leader negotiator for the industry in this time around, is working hard and hopefully they will come to a sufficient, satisfactory resolution soon.

Last question, guys. I mean you have been very strong advocates of not lifting the crude export ban while six to eight months back everybody was talking about it and it was kind of -- being said that this could happen very soon. Now looks like it is -- it is probably not going to happen so any views on it and do you still see that as any kind of near-term risk?

This is Tom O'Malley. We view it as a non issue. Fine and simple. I viewed it frankly as a non issue six months, nine months ago. We are getting ready for the eternal election cycle here in the United States and there is nobody that's going to do anything in the political world that's going to raise price of gasoline to the American consumer and if you remove the export ban you are going to raise a price of gasoline to the American consumer. And frankly, one of the things the USW probably should be focused on and they certainly want and should maintain a strong employment level within the refining industry. And one way to do that is too certainly and totally opposed to the export of crude oil.

And we will take our next question from Ed Westlake with Credit Suisse.

So a couple of questions then. New York -- congratulations on the 4Q numbers, very strong adjusted EBITDA. And just a sort of a structural change, obviously, there are some sort of timing benefits but it does feel in the second half of last year that the Northeast product market was stronger than perhaps even the Gulf and I'm just wondering, do you think there's any structural changes, obviously, since the great financial crisis we've had a lot of closures in that region. The people who import into the region or perhaps from Europe higher cost, so I'm just trying to get a sense of how you think the strategic environment shapes up in the East Coast relative to perhaps perceptions four or five years ago.

Tom, I'll take that. Look, first of all, the East Coast has historically been a premium market to the US Gulf Coast. If you look at average over the years, you have $0.04 or $0.05 a gallon premium on the East Coast that really reflects the colonial pipeline tariff. That's item number one. Item number two and I hate to say this because it does come a bit around to the Wall Street industry; many of the players in the past were in essence financial institutions. For instance Credit Suisse, Morgan Stanley, JPMorgan Chase et cetera, et cetera. And to a great degree they have exited the oil trading market. And people have become a bit more depended on domestic production. So when the ARB opens there is not someone there at every moment instantaneously to take advantage of it. Certainly we've seen some rationalization on the East Coast over the past years that have played into it. We've seen some rationalization in Europe certainly that's been a difficult environment to make a profit and the traditional cross -Atlantic ARB going from Europe to the United States has to some degree closed in many cases. And indeed it reversed so that you get the Gulf Coast frequently now exploiting to some places in Europe and not pushing the product up here. I think the other thing that has happened the terrific competitiveness on a worldwide basis of the Gulf Coast refining system has kind of moderated the previous, oh, well put it in the colonial pipeline send up north even if the net pack doesn't work particular well. Now it seems well loaded on a ship and will send it to Brazil, perhaps will send it to Chile, perhaps will send it wherever and that's changed. So I do see a long-term change in the profitability and resilience of the remaining East Coast refineries.

And I would just add one thing to what Tom said. Just from perspective standpoint if you go back 1970s, pad 1 always had the product advantage. Their colonial pipeline tariff for waterborne transportation. However, pad 1 was disadvantaged in two key areas. One was cost accrued because pretty much was bringing crude in from Europe and paying the freight. And on natural gas pricing because buying natural gas in the Gulf Coast and paying the freight. Well that last thing is now an advantage because we frankly have cheaper gas or at least had a push with the Gulf Coast and certainly versus Europe, our crude situation as we were so I do think there are some structural changes that have happened.

Yes. And I was trying to get on the product side because if the other ones are kind of like out there but this seems quite an important change, you improved your assets, you got the benefit of being a domestic refiner and then the motors of our own product seems to have improved. We will have to see how long it lasts. Just on a second point, on the secondary products, obviously you talked about it in your opening remarks in terms of that being a benefit, is there any way to put a number on a dollar per barrel basis and how much you think of that dollar per barrel is sustainable going forward, aka, can you do my model for me?

You have to break it up. It is going to be function of different things. One thing we could say and I would give you an example but you are going to have to do your model but let's take a look at Delaware City. Delaware City produces 10% coke, sulphur and CO2 in a product straight. That is going to be sustainable benefit when the price of crude drop. So if we are buying crude at $100 and those products that I just said sell for on average about five bucks. So at $100 you are losing $95 a barrel. And at $50 you are losing $45 a barrel on 10% of your volume. That is a sustainable effect of this lower flat price. Similarly, both of our East Coast refineries being coking refineries actually have a net loss through the system, call it 1%. So if we buy 100 barrels of raw material and run through the front door we sell 99 barrels out to back door that loss in $100 a barrel is twice as much that today is at $50 a barrel, the debit associated with the buy and contracted. Those are sustainable things. Asphalt pricing, propane pricing, things other lower value products but they will tie back to crude and they will move around and as I said in my comments, we did benefit from asphalt prices in lagging. In fact, we had positive asphalt cracks in the fourth quarter versus Brent. That's not going to stay forever and in fact it could turn a little bit if the price of crude starts going up.

It is Tom. I often have the same question. So I have a developed using massive computer skill, a model, okay and Tom gave you the 10% take, 10% of the crude price, multiply that 10% by 90% so as you take 10 bucks on a $100 crude, you get $9 and now go down to $50, take 10% of $50, multiply it by $9 and you get $450 and that's probably very close, that's probably within $0.25 or $0.30 up or down of the advantage that we are experiencing at the current time with our East Coast heavy crude oil refineries. And the other East Coast refineries that don't coke are not experiencing that advantage; in essence what it allows us to do is to recover a greater portion of the available crack so perhaps instead of recovering 50% of $15 crack in this case we would recover 75% or 80% of a $15 crack. So that's the nitty-gritty, that's my simple as I said massively calculated formula.

We expect you to pay him a fee at the end of this call.

[Operator Instructions] We will take our next question from Roger Read with Wells Fargo Securities, LLC. Your line is open.

Yes, good morning. I would like to come back to the question on the East Coast running the heavy crude. You give us an idea and I'm sorry if I missed this earlier but the volumes are the percentage of heavy you are able to run Del City and I presume at Paulsboro we're still looking at all light sweets?

Roger, this is Tom. Paulsboro is not a light sweet refinery, although we do run one still the ARB is open for Bakken, the sweet still -- this would create unit on Bakken. In fact, we are doing that now because we've been able to source some material and that was distressed cargo. But the rest of Paulsboro run medium sours, we have little unit obviously in Paulsboro, the predominant sourcing of crude to that still is sour crude in the form of ARB light or ARB medium right now, we have good economics on our ARB medium, Isthmus from Mexico and Basra from Iraq. So that unit-- so that facility runs a fair amount of what we call a medium sours. It will not run things like Myer or M 100. Delaware has the capability to run 100,000 barrels a day of heavy crude. We don't normally do that or haven't done that in the past because frankly Bakken has been attractive and up that we've been running 70,000 -80,000 barrels a day even north of that in Delaware. But as these coking economics improve as we've talked about with a dropping of flat price accrued, we are actually having up asphalt to take advantage of that for the reasons Tom just went through. The debit of the coal products that coming out of the coke at low value product is diminishing and we haven't seen at least at this moment the accrued differentials now we are in significantly so those crudes are quite economic.

So just to adding and so just you don't misunderstand. Both refineries can run 100% of their capacity as heavy crude oil which we would kind of define as something down around 28 degree gravity and down and higher sulphur crude oil that let say on average would have 2% or more of sulphur in it. So the great advantage of this system on the East Coast as compared with some other refineries on the East Coast is its flexibility and I may state that the somewhat uninformed comment of those who have favored the export of lighter crude oils because the industry can't process them is utter nonsense. The industry is incredibly flexible. And if you have that heavy capacity you really can switch back and forth between heavier barrel and lighter barrel. So just let's be sure you understand both refineries can run everything in the form of heavy higher sulphur or crude oil.

Sure, thanks for that. And then what is the impact we should think about yield wise between the switch from -- I don't know let's say the extreme of the all light versus the all heavy?

Well, if you go from one end of the spectrum to the other end of the spectrum, you would see perhaps 1% to 1.5% decrease in clean product, what I call clean product deal which is basically gasoline and distillate and you would obviously produce a little bit more coke. You produce a little bit more gas, but again we factored that in -- that clearly shows up in the model. And what you have to do you don't make that shifts unless you have an economic differentials on a raw material that justified it. But you certainly will if you go all the way to run in both refineries in the East Coast with a heavier slate see a decrease in gasoline and distillate production, the order magnitude that I spoke to.

Okay. And then final question, you talked earlier or were asked early about the M&A market, just wondering, focusing more on the refining sides specifically we saw the Citgo assets more or less get taken off the market, are you seeing the market more target rich, less target rich in the refining area and are we seeing any interest from the large integrated oils now that they're a little more cash flow constrained being interested in selling off downstream assets?

I'll just take that. It is a funny market. It is never more and it is never less. There is always something out there. The Citgo thing was perhaps the reasons are very complex, we are not exactly sure we think ultimately some of those assets will come back to the market. It would seem to me reading the reports published by institutions like your own, that the major oil companies will be re-evaluating their various assets and we can certainly see a scenario where the majors will continue a process that in my experience started over 20 years ago and that's to shed refining assets in the United States. I think that's an ongoing process and perhaps I am optimistic from a refiner's point of view but pretty much every year that I have been around the business since I guess the early 1990s in terms of Exxon selling Tosco, the Bayway Refinery, there have been sales of major company refining assets in North America. I think that continues.

And we can take our next question from Doug Leggate with Bank of America Merrill Lynch. Your line is open.

Thanks, everybody. Good morning, Tom. I wonder if I can go back to the issue of the heavy crude I just wondered if you could paying a little bit as what we appeared to be seeing in terms of OPEC price policy or Saudi price policy those are such a thing, there surely more the issues that the differentials have held up more in absolute terms, the traditional percentage relationship that I guess most of us assume in our models. Are you seeing any evidence that this could be a new basis for higher expected heavier crude discounts on a more sustainable basis or do you see as more transitory? If it's the former, how does that fit in with then your view on the economics of the Bakken given the potential significant reduction in rig count in that area? I got a quick follow up please.

Just quickly, Tom should take the Bakken, on heavy side, we think that the ever increasing amount of crude that coming out every rock perspectively if there is a settlement with Iran, the maintenance of Saudi production level certainly we see finally a better rent being paid for the use of these heavy refineries. We see the coking economics as a more resilient improvement. There is nobody they can sit around and forecast forever for you but we don't see a lot of new coke is being built particularly here in North America. There has been a lot of additional heavy crude produced. So we think it is pretty resilient. Tom, you take the rest of it.

Yes. The question on the Bakken, I make two points. We absolutely expect Bakken to be the marginal accrued in terms of -- it is going to move by rail, it is going to price to clear by rail probably for the East Coast and maybe to the West Coast. There is no more light crude coming into the Gulf Coast. If Bakken starts making its way down there, or light Canadian make it down there. I am not sure exactly what they are displacing. It would probably push out medium sours and maybe even some heavy that would work perhaps to our advantage. But we see Bakken still coming in. And probably will have economics that will allow to be processed in tandem. I want to make one other -- with the heavy crudes that we are running. One other point that is particularly we have the capability in Delaware. And as by permit with the state of Delaware to actually bring in Bakken and move I think it is 45,000 barrels a day of Bakken transships it, we are doing that today, we are transshipping it, bringing in by rail into Delaware, unloading it, putting it into tank and pumping it over the barge docks to Paulsboro. Well, we can do that to some of the other refineries in the East Coast and take advantage of that to continue to monetize or use the loop rack in a manner that it is adding some value and that would likely be economic to the other East Coast refiners and you could do a deal there. Because again they cannot take advantage of what you talked about Doug is if there is a structural change and you never say always or never. But it is certainly the world's got too much crude and that likely is going to continue and the other East Coast refineries cannot run that crude so they are going to be depended upon light sweet and that become an opportunity for us as well.

Thanks. I know you are going over the hour or so, I'll just double in more if I may and then I leave it there. To be more strategic, a number of your peers have reported very strong earnings. As you guys did but for certainly different reasons mainly the lag effect on their retail businesses. They obviously had very, very high margins there. I'm just curious, when you think strategically about acquisitions as you have opined upon before, is there any desire or I guess strategic need or objective to maybe move further downstream in the acquisition front as opposed to just targeting refining and on NLP assets. I leave it there. Thanks.

Just let me go back. I guess it is great to be run over by the luck wagon and Gary Heminger at marathon or MPC certainly hits spectacular timing in terms of fall in the crude price during the time he took over the Hess retail operation and everybody in the retail business benefited from this tremendous lag. Gee Whiz even if the lag was 21 days given the rate of drop in the crude oil price that added enormously to the profitability of the assets. But realistically speaking we are not equipped to acquire retail at this point in our corporate life. We would prefer to focus at this point refining, on MLP type assets and I wouldn't ever want to say we -- the company will never do something I think in the perspective year, two years you see in front of us, we will not be buying retail assets. So we have better use for the funds and if you get into now somewhat rising price environment on crude oil. And I know there has been bit of yoyo movement, we've follow it by the minute on the crude oil price. There is probably a biased to the upside on the crude oil price in the next 8, 10, 12 months. That being the case that will have somewhat a negative impact on retail margins. I mean long term we feel have continued to decline -- it is really not selling gasoline anymore. It is running a very large convenience operation and again that's not for us.

And this does conclude the question-and-answer session. I'd like to turn the program back over to Tom O'Malley for any additional remarks.

The only remark is to thank everybody for attending. We appreciate your interest in the company. And we are always ready to talk and explain how we operate to any investor. Thank you very much.

Thank you. This does conclude today's teleconference. Please disconnect your line at this time. And have a wonderful day.