PBF-2014.3.31.10Q


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(Mark one)
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2014
Or
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission File Number: 001-35764
Commission File Number: 333-186007
Commission File Number: 333-186007-07
 
PBF ENERGY INC.
PBF HOLDING COMPANY LLC
PBF FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
 
DELAWARE
DELAWARE
DELAWARE
 
45-3763855 
27-2198168 
45-2685067
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
One Sylvan Way, Second Floor
Parsippany, New Jersey
 
07054
(Address of principal executive offices)
 
(Zip Code)
(973) 455-7500
(Registrant’s telephone number, including area code)
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.  
PBF Energy Inc.
x  Yes    ¨  No
PBF Holding Company LLC
x  Yes    ¨  No
PBF Finance Corporation
x  Yes    o  No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
PBF Energy Inc.
x  Yes    o  No
PBF Holding Company LLC
x  Yes    o  No
PBF Finance Corporation
x  Yes    o  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated
filer
 
Accelerated filer
 
Non-accelerated filer
(Do not check if a
smaller reporting
company)
 
Smaller reporting
company
PBF Energy Inc.
x
 
¨
 
¨
 
¨
PBF Holding Company LLC
¨
 
¨
 
x
 
¨
PBF Finance Corporation
o
 
o
 
x
 
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
PBF Energy Inc.
¨  Yes    x  No
PBF Holding Company LLC
¨  Yes    x  No
PBF Finance Corporation
o  Yes    x  No
As of May 5, 2014, PBF Energy Inc. had outstanding 69,670,192 shares of Class A common stock and 40 shares of Class B common stock. PBF Energy Inc. is the sole managing member of, and owner of an equity interest of approximately 71.9% of the outstanding economic interest in, PBF Energy Company LLC. PBF Energy Company LLC held 100% of the membership interests in PBF Holding Company LLC as of May 5, 2014. PBF Holding Company LLC has no common stock outstanding. As of May 5, 2014, PBF Finance Corporation had 100 shares of common stock outstanding, all of which were held by PBF Holding Company LLC.

PBF Finance Corporation meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format.
 
 



PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2014
TABLE OF CONTENTS
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 2.
 
 
ITEM 3.
 
 
ITEM 4.
 
 
 
 
 
 
 
 
 
ITEM 1.
 
 
ITEM 2.
 
 
ITEM 6.

2


Explanatory Note
This combined Form 10-Q is filed by PBF Energy Inc. (“PBF Energy”), PBF Holding Company LLC (“PBF Holding”) and PBF Finance Corporation ("PBF Finance"). Each Registrant hereto is filing on its own behalf all of the information contained in this report that relates to such Registrant. Each Registrant hereto is not filing any information that does not relate to such Registrant, and therefore makes no representation as to any such information. PBF Energy is the sole managing member of, and owner of an equity interest representing approximately 71.9% of the outstanding economic interests in, PBF Energy Company LLC ("PBF LLC"). PBF Holding is a wholly-owned subsidiary of PBF LLC and PBF Finance is a wholly-owned subsidiary of PBF Holding. PBF Holding is the parent company for PBF LLC's operating subsidiaries.
PBF Holding is an indirect subsidiary of PBF Energy, representing 100% of PBF Energy’s consolidated revenue for the three months ended March 31, 2014 and constituting 100% of PBF Energy’s revenue generating assets as of March 31, 2014.
Unless the context indicates otherwise, the terms “we,” “us,” and “our” refer to both PBF Energy and PBF Holding and subsidiaries. Discussions or areas of this report that either apply only to PBF Energy or PBF Holding are clearly noted in such sections.

3


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain “forward-looking statements”, as defined in the Private Securities Litigation Reform Act of 1995, of expected future developments that involve risks and uncertainties. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates” or similar expressions that relate to our strategy, plans or intentions. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results or to our expectations regarding future industry trends are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results.
Important factors that could cause actual results to differ materially from our expectations, which we refer to as “cautionary statements,” are disclosed under “Item 1A. Risk Factors” and elsewhere in the Annual Reports on Form 10-K for the year ended December 31, 2013 of PBF Energy Inc., PBF Holding Company LLC and PBF Finance Corporation, which we refer to as our 2013 Annual Reports on Form 10-K, and in our other filings with the U.S. Securities and Exchange Commission ("SEC"). All forward-looking information in this Quarterly Report on Form 10-Q and subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Some of the factors that we believe could affect our results include:
• supply, demand, prices and other market conditions for our products;
• the effects of competition in our markets;
•changes in currency exchange rates, interest rates and capital costs;
• adverse developments in our relationship with both our key employees and unionized employees;
•our ability to operate our businesses efficiently, manage capital expenditures and costs (including general and administrative expenses) and generate earnings and cash flow;
•our substantial indebtedness;
•our supply and inventory intermediation arrangements expose us to counterparty credit and performance risk;
•termination of our Inventory Intermediation Agreements with J. Aron could have a material adverse effect on our liquidity, as we would be required to finance our refined products inventory covered by the agreements. Additionally, we are obligated to repurchase from J. Aron all volumes of products located at the Paulsboro and Delaware City refineries’ storage tanks upon termination of these agreements;
•restrictive covenants in our indebtedness that may adversely affect our operational flexibility;
•payments to the holders of PBF LLC Series A Units and PBF LLC Series B Units under our tax receivable agreement for certain tax benefits we may claim;
•our assumptions regarding payments arising under the tax receivable agreement and other arrangements relating to our organizational structure are subject to change due to various factors, including, among other factors, the timing of exchanges of PBF LLC Series A Units for shares of our Class A common stock as contemplated by the tax receivable agreement, the price of our Class A common stock at the time of such exchanges, the extent to which such exchanges are taxable, and the amount and timing of our income;

4


•our expectations and timing with respect to our acquisition activity and whether any acquisitions are accretive or dilutive to shareholders;
•our expectations with respect to our capital improvement projects including the development and expansion of our Delaware City crude unloading facilities and status of an air permit to transfer crude to Paulsboro;
•the impact of disruptions to crude or feedstock supply to any of our refineries, including disruptions due
to problems with third party logistics infrastructure or operations, including pipeline and rail transportation;
•the possibility that we might reduce or not make further dividend payments;
•the impact of current and future laws, rulings and governmental regulations, including any change by the federal government in the restrictions on exporting U.S. crude oil and the implementation of rules and regulations regarding transportation of crude oil by rail;
•adverse impacts from changes in our regulatory environment or actions taken by environmental interest groups;
•the costs of being a public company, including Sarbanes-Oxley Act compliance;
•any decisions we make with respect to our energy-related logistical assets that could qualify for an MLP structure, including future opportunities that we may determine present greater potential value to stockholders than conveying assets to the planned MLP;
•the timing and structure of the planned MLP initial public offering may change;
•unanticipated developments may delay or negatively impact the planned MLP initial public offering;
•receipt of regulatory approvals and compliance with contractual obligations required in connection with the planned MLP initial public offering;
•the impact of the planned MLP initial public offering on our relationships with our employees, customers and vendors and our credit rating and cost of funds; and
•although we are no longer a “controlled company” following our January 2014 secondary offering, Blackstone and First Reserve continue to be able to significantly influence our decisions, and it is possible that their interests will conflict with ours.
We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this Quarterly Report on Form 10-Q may not in fact occur. Accordingly, investors should not place undue reliance on those statements.
Our forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, including the securities laws of the United States, and we do not intend to update or revise any forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing.

5

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
PBF ENERGY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share data)
 
March 31,
2014
 
December 31,
2013
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
237,135

 
$
76,970

Accounts receivable
529,641

 
596,647

Inventories
1,546,255

 
1,445,517

Deferred tax asset
12,666

 
25,529

Prepaid expense and other current assets
40,125

 
55,843

Total current assets
2,365,822

 
2,200,506

 
 
 
 
Property, plant and equipment, net
1,757,985

 
1,781,589

Deferred tax assets
310,445

 
169,234

Deferred charges and other assets, net
282,167

 
262,479

Total assets
$
4,716,419

 
$
4,413,808

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
246,819

 
$
402,293

Accrued expenses
1,364,412

 
1,209,881

Payable to related parties pursuant to tax receivable agreement
12,541

 
12,541

Current portion of long-term debt
12,491

 
12,029

Deferred revenue
6,373

 
7,766

Total current liabilities
1,642,636

 
1,644,510

 
 
 
 
Delaware Economic Development Authority loan
12,000

 
12,000

Long-term debt
710,337

 
723,547

Payable to related parties pursuant to tax receivable agreement
496,609

 
274,775

Other long-term liabilities
44,714

 
43,720

Total liabilities
2,906,296

 
2,698,552

 
 
 
 
Commitments and contingencies (Note 9)

 

 
 
 
 
Equity:
 
 
 
Class A common stock, $0.001 par value, 1,000,000,000 shares authorized, 69,670,192 shares outstanding at March 31, 2014, 39,665,473 shares outstanding, at December 31, 2013
70

 
40

Class B common stock, $0.001 par value, 1,000,000 shares authorized, 40 shares outstanding, at March 31, 2014 and December 31, 2013
—

 
—

Preferred stock, $0.001 par value, 100,000,000 shares authorized, no shares outstanding, at March 31, 2014 and December 31, 2013
—

 
—

Additional paid in capital
1,198,365

 
657,499

Retained earnings
64,622

 
3,579

Accumulated other comprehensive loss
(10,277
)
 
(6,988
)
Total PBF Energy Inc. equity
1,252,780

 
654,130

Noncontrolling interest
557,343

 
1,061,126

Total equity
1,810,123

 
1,715,256

Total liabilities and equity
$
4,716,419

 
$
4,413,808


See notes to condensed consolidated financial statements.
6


PBF ENERGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)
 
 
 
Three Months Ended 
 March 31,
 
 
2014
 
2013
Revenues
 
$
4,746,443

 
$
4,797,847

 
 
 
 
 
Cost and expenses:
 
 
 
 
Cost of sales, excluding depreciation
 
4,147,684

 
4,435,101

Operating expenses, excluding depreciation
 
268,899

 
206,015

General and administrative expenses
 
36,624

 
30,094

Gain on sale of assets
 
(186
)
 
—

Depreciation and amortization expense
 
33,215

 
26,532

 
 
4,486,236

 
4,697,742

 
 
 
 
 
Income from operations
 
260,207

 
100,105

 
 
 
 
 
Other income (expenses)
 
 
 
 
Change in fair value of catalyst leases
 
(2,001
)
 
(1,339
)
Interest expense, net
 
(25,255
)
 
(21,611
)
Income before income taxes
 
232,951

 
77,155

Income tax expense
 
49,679

 
7,444

Net Income
 
183,272

 
69,711

Less: net income attributable to noncontrolling interest
 
105,828

 
58,305

Net Income attributable to PBF Energy Inc.
 
$
77,444

 
$
11,406

 
 
 
 
 
Weighted-average shares of Class A common stock outstanding
 
 
 
 
Basic
 
54,167,861

 
23,589,687

Diluted
 
54,691,627

 
97,415,576

Net income available to Class A common stock per share:
 
 
 
 
Basic
 
$
1.43

 
$
0.48

Diluted
 
$
1.42

 
$
0.48

 
 
 
 
 
Dividends per common share
 
$
0.30

 
$
0.30

 
 
 
 
 





See notes to condensed consolidated financial statements.
7


PBF ENERGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited, in thousands)



 
 
Three Months Ended 
 March 31,
 
 
2014
 
2013
Net income
 
$
183,272

 
$
69,711

Other comprehensive income (loss):
 

 

Unrealized gain on available for sale securities
 
29

 
—

Net gain (loss) on pension and other postretirement
benefits
 
217

 
(108
)
Total other comprehensive income (loss)
 
246

 
(108
)
Comprehensive income
 
183,518

 
69,603

Less: comprehensive income attributable to noncontrolling interest
 
105,897

 
58,223

Comprehensive income attributable to PBF Energy Inc.
 
$
77,621

 
$
11,380


See notes to condensed consolidated financial statements.
8


PBF ENERGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 
Three Months Ended 
 March 31,
 
2014
 
2013
Cash flows from operating activities:
 
 
 
Net income
$
183,272

 
$
69,711

Adjustments to reconcile net income to net cash provided by operations:
 
 
 
Depreciation and amortization
34,848

 
28,142

Stock-based compensation
1,420

 
1,020

Change in fair value of catalyst lease obligations
2,001

 
1,339

Deferred income taxes
32,960

 
7,444

Non-cash change in inventory repurchase obligations
(17,463
)
 
(8,153
)
Pension and other post retirement benefit costs
4,805

 
4,182

Gain on disposition of property, plant and equipment
(186
)
 
—

 
 
 
 
Changes in current assets and current liabilities:
 
 
 
Accounts receivable
67,006

 
(159,050
)
Inventories
(99,974
)
 
22,060

Prepaid expenses and other current assets
15,718

 
(15,202
)
Accounts payable
(155,474
)
 
116,163

Accrued expenses
196,698

 
150,707

Deferred revenue
(1,393
)
 
1,804

Other assets and liabilities
(3,667
)
 
(9,101
)
Net cash provided by operations
260,571

 
211,066

 
 
 
 
Cash flow from investing activities:
 
 
 
Expenditures for property, plant and equipment
(60,127
)
 
(56,152
)
Expenditures for deferred turnaround costs
(23,128
)
 
(2,166
)
Expenditures for other assets
(7,157
)
 
(835
)
Proceeds from sale of assets
37,759

 
—

Net cash used in investing activities
(52,653
)
 
(59,153
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Distribution to PBF Energy Company LLC members
(13,260
)
 
(25,892
)
Dividend payments
(16,401
)
 
(7,084
)
Proceeds from revolver borrowings
265,000

 
—

Repayments of revolver borrowings
(280,000
)
 
—

Deferred financing costs and other
(3,092
)
 
(733
)
Net cash used in financing activities
(47,753
)
 
(33,709
)
 
 
 
 
Net increase in cash and cash equivalents
160,165

 
118,204

Cash and equivalents, beginning of period
76,970

 
285,884

Cash and equivalents, end of period
$
237,135

 
$
404,088

 
 
 
 
Supplemental cash flow disclosures
 
 
 
Non-cash activities:
 
 
 
         Conversion of Delaware Economic Development Authority loan to grant
$
—

 
$
4,000

         Accrued construction in progress
8,277

 
5,749


See notes to condensed consolidated financial statements.
9


PBF HOLDING COMPANY LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)

 
March 31,
2014
 
December 31,
2013
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
237,135

 
$
76,970

Accounts receivable
529,641

 
596,647

Inventories
1,546,255

 
1,445,517

Prepaid expense and other current assets
40,125

 
55,843

Total current assets
2,353,156

 
2,174,977

 
 
 
 
Property, plant and equipment, net
1,757,985

 
1,781,589

Deferred charges and other assets, net
282,167

 
262,479

Total assets
$
4,393,308

 
$
4,219,045

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
246,819

 
$
402,293

Accrued expenses
1,348,757

 
1,210,945

Current portion of long-term debt
12,491

 
12,029

Deferred revenue
6,373

 
7,766

Total current liabilities
1,614,440

 
1,633,033

 
 
 
 
Delaware Economic Development Authority loan
12,000

 
12,000

Long-term debt
710,337

 
723,547

Intercompany notes payable
32,035

 
31,835

Other long-term liabilities
48,670

 
46,477

Total liabilities
2,417,482

 
2,446,892

 
 
 
 
Commitments and contingencies (Note 9)

 

 
 
 
 
Equity:
 
 
 
Member's equity
933,502

 
933,164

Retained earnings
1,056,616

 
853,527

Accumulated other comprehensive loss
(14,292
)
 
(14,538
)
Total equity
1,975,826

 
1,772,153

Total liabilities and equity
$
4,393,308

 
$
4,219,045


See notes to condensed consolidated financial statements.
10


PBF HOLDING COMPANY LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands)
 
 
Three Months Ended 
 March 31,
 
2014
 
2013
Revenues
$
4,746,443

 
$
4,797,847

 
 
 
 
Costs and expenses:
 
 
 
Cost of sales, excluding depreciation
4,147,684

 
4,435,101

Operating expenses, excluding depreciation
268,899

 
206,015

General and administrative expenses
36,624

 
30,094

Gain on sale of assets
(186
)
 
—

Depreciation and amortization expense
33,215

 
26,532

 
4,486,236

 
4,697,742

 
 
 
 
Income from operations
260,207

 
100,105

 
 
 
 
Other income (expense)
 
 
 
Change in fair value of catalyst leases
(2,001
)
 
(1,339
)
Interest expense, net
(25,456
)
 
(21,611
)
Net income
$
232,750

 
$
77,155


See notes to condensed consolidated financial statements.
11


PBF HOLDING COMPANY LLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited, in thousands)
 

 
 
Three Months Ended 
 March 31,
 
 
2014
 
2013
Net income
 
$
232,750

 
$
77,155

Other comprehensive income (loss):
 
 
 
 
Unrealized gain on available for sale
     securities
 
29

 
—

Net gain (loss) on pension and other postretirement
benefits
 
217

 
(108
)
Total other comprehensive income (loss)
 
246

 
(108
)
Comprehensive income
 
$
232,996

 
$
77,047




See notes to condensed consolidated financial statements.
12

PBF HOLDING COMPANY LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 
Three Months Ended 
 March 31,
 
2014
 
2013
Cash flows from operating activities:
 
 
 
Net income
$
232,750

 
$
77,155

Adjustments to reconcile net income to net cash provided by operations:
 
 
 
Depreciation and amortization
34,848

 
28,142

Stock-based compensation
1,420

 
1,020

Change in fair value of catalyst lease obligations
2,001

 
1,339

Non-cash change in inventory repurchase obligations
(17,463
)
 
(8,153
)
Pension and other post retirement benefit costs
4,805

 
4,182

Gain on disposition of property, plant and equipment
(186
)
 
—

 
 
 
 
Changes in current assets and current liabilities:
 
 
 
Accounts receivable
67,006

 
(159,050
)
Due to/from related party
—

 
27,231

Inventories
(99,974
)
 
22,060

Prepaid assets and other current assets
15,718

 
(15,202
)
Accounts payable
(155,474
)
 
116,163

Accrued expenses
179,981

 
155,069

Deferred revenue
(1,393
)
 
1,804

Other assets and liabilities
(3,667
)
 
(9,101
)
Net cash provided by operations
260,372

 
242,659

 
 
 
 
Cash flows from investing activities:
 
 
 
Expenditures for property, plant and equipment
(60,127
)
 
(56,152
)
Expenditures for deferred turnaround costs
(23,128
)
 
(2,166
)
Expenditures for other assets
(7,157
)
 
(835
)
Proceeds from sale of assets
37,759

 
—

Net cash used in investing activities
(52,653
)
 
(59,153
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Proceeds from revolver borrowings
265,000

 
—

Distributions to members
(29,661
)
 
(32,976
)
Repayments of revolver borrowings
(280,000
)
 
—

Deferred financing costs and other
(2,893
)
 
(733
)
Net cash used in financing activities
(47,554
)
 
(33,709
)
 
 
 
 
Net increase in cash and cash equivalents
160,165

 
149,797

Cash and equivalents, beginning of period
76,970

 
254,291

Cash and equivalents, end of period
$
237,135

 
$
404,088

 
 
 
 
Supplemental cash flow disclosures
 
 
 
Non-cash activities:
 
 
 
         Conversion of Delaware Economic Development Authority loan to grant
$
—

 
$
4,000

         Accrued construction in progress
8,277

 
5,749


See notes to condensed consolidated financial statements.
13
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

 
1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION
Description of the Business
PBF Energy Inc. ("PBF Energy") is the sole managing member of PBF Energy Company LLC ("PBF LLC") with a controlling interest in PBF LLC and its subsidiaries. PBF Energy consolidates the financial results of PBF LLC and its subsidiaries and records a noncontrolling interest in its consolidated financial statements representing the economic interests of PBF LLC's members other than PBF Energy.

On January 10, 2014, PBF Energy completed a public offering of 15,000,000 shares of Class A common stock at a price of $28.00 per share, less underwriting discounts and commissions, in a secondary offering (the "January 2014 secondary offering"). All of the shares were sold by funds affiliated with The Blackstone Group L.P., or Blackstone, and First Reserve Management, L.P., or First Reserve. In connection with the January 2014 secondary offering, Blackstone and First Reserve exchanged 15,000,000 Series A Units of PBF LLC for an equivalent number of shares of Class A common stock of PBF Energy. The holders of PBF LLC Series B Units, which include certain executive officers of PBF Energy, had the right to receive a portion of the proceeds of the sale of the PBF Energy Class A common stock by Blackstone and First Reserve. PBF Energy did not receive any proceeds from the January 2014 secondary offering.

Additionally, on March 26, 2014, PBF Energy completed a public offering of 15,000,000 shares of Class A common stock at a price of $25.39 per share, which includes underwriting discounts and commissions, in a secondary offering (the "March 2014 secondary offering"). All of the shares were sold by funds affiliated with First Reserve. In connection with the March 2014 secondary offering, First Reserve exchanged 15,000,000 Series A Units of PBF LLC for an equivalent number of shares of Class A common stock of PBF Energy. The holders of PBF LLC Series B Units, which include certain executive officers of PBF Energy, had the right to receive a portion of the proceeds of the sale of the PBF Energy Class A common stock by First Reserve. PBF Energy did not receive any proceeds from the March 2014 secondary offering.

PBF LLC, together with its consolidated subsidiaries, owns and operates oil refineries and related facilities in North America. PBF Holding Company LLC ("PBF Holding") is a wholly-owned subsidiary of PBF LLC. PBF Finance Corporation ("PBF Finance") is a wholly-owned subsidiary of PBF Holding. Delaware City Refining Company LLC, Delaware Pipeline Company LLC, PBF Power Marketing LLC, Paulsboro Refining Company LLC, Paulsboro Natural Gas Pipeline Company LLC and Toledo Refining Company LLC are PBF LLC’s principal operating subsidiaries and are all wholly-owned subsidiaries of PBF Holding. Collectively, PBF Energy and subsidiaries, including PBF Holding, are referred to hereinafter as the "Company".

Substantially all of the Company’s operations are in the United States. The Company’s three oil refineries are all engaged in the refining of crude oil and other feedstocks into petroleum products, and have been aggregated to form one reportable segment. To generate earnings and cash flows from operations, the Company is primarily dependent upon processing crude oil and selling refined petroleum products at margins sufficient to cover fixed and variable costs and other expenses. Crude oil and refined petroleum products are commodities and factors largely out of the Company’s control can cause prices to vary over time. The potential margin volatility can have a material effect on the Company’s financial position, earnings and cash flow.    

Basis of Presentation
The unaudited condensed consolidated financial information furnished herein reflects all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, considered necessary for a fair presentation of the financial position and the results of operations and cash flows of the Company for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These interim condensed consolidated

14
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

financial statements should be read in conjunction with the financial statements included in the Annual Reports on Form 10-K for the year ended December 31, 2013 of PBF Energy Inc., PBF Holding Company LLC and PBF Finance Corporation. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results to be expected for the full year.

2. NONCONTROLLING INTEREST OF PBF ENERGY

PBF Energy is the sole managing member of, and had a controlling interest in, PBF LLC which represented 40.9% of the outstanding units as of December 31, 2013. As the sole managing member of PBF LLC, PBF Energy operates and controls all of the business and affairs of PBF LLC and its subsidiaries. In connection with the January 2014 and March 2014 secondary offerings, Blackstone and First Reserve exchanged 30,000,000 Series A Units of PBF LLC for an equivalent number of shares of Class A common stock of PBF Energy, which increased PBF Energy's interest in PBF LLC to approximately 71.9% as of March 31, 2014.

PBF Energy consolidates the financial results of PBF LLC and its subsidiaries, and records a noncontrolling interest for the economic interest in PBF Energy held by the members of PBF LLC other than PBF Energy. Noncontrolling interest on the consolidated statements of operations represents the portion of net income or loss attributable to the economic interest in PBF Energy held by the members of PBF LLC other than PBF Energy. Noncontrolling interest on the consolidated balance sheets represents the portion of net assets of PBF Energy attributable to the members of PBF LLC other than PBF Energy. The noncontrolling interest ownership percentage as of March 31, 2014, March 26, 2014 (the completion date of the March 2014 secondary offering) and January 10, 2014 (the completion date of the January 2014 secondary offering) and December 31, 2013 is calculated as follows:
 
 
Holders of
PBF LLC Series
A Units
 
Outstanding Shares
of PBF Energy
Class A
Common
Stock
 
Total *
December 31, 2013
57,201,674

 
39,665,473

 
96,867,147

 
59.1
%
 
40.9
%
 
100
%
January 10, 2014
42,201,674

 
54,665,473

 
96,867,147

 
43.6
%
 
56.4
%
 
100
%
March 26, 2014
27,213,374

 
69,670,192

 
96,883,566

 
28.1
%
 
71.9
%
 
100
%
March 31, 2014
27,213,374

 
69,670,192

 
96,883,566

 
28.1
%
 
71.9
%
 
100
%
——————————
*
Assumes all of the holders of PBF LLC Series A Units exchange their PBF LLC Series A Units for shares of PBF Energy’s Class A common stock on a one-for-one basis.

15
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

The following table summarizes the changes in equity for the controlling and noncontrolling interests of PBF Energy for the three months ended March 31, 2014:
 
 
PBF Energy Inc. Equity
 
Noncontrolling
Interest
 
Total Equity
Balance at January 1, 2014
$
654,130

 
$
1,061,126

 
$
1,715,256

Comprehensive income
77,621

 
105,897

 
183,518

Dividend and distributions
(16,401
)
 
(13,260
)
 
(29,661
)
Record deferred tax asset and liabilities and tax receivable agreement associated with secondary offerings
(60,526
)
 
—

 
(60,526
)
Record allocation of noncontrolling interest upon completion of secondary offerings
596,758

 
(596,758
)
 
—

Stock-based compensation
1,198

 
222

 
1,420

Exercise of PBF LLC options and warrants, net
—

 
116

 
116

Balance at March 31, 2014
$
1,252,780

 
$
557,343

 
$
1,810,123



3. INVENTORIES
Inventories consisted of the following:

March 31, 2014
 
Titled Inventory
 
Inventory Supply and Offtake Arrangements
 
Total
Crude oil and feedstocks
$
662,276

 
$
71,169

 
$
733,445

Refined products and blendstocks
401,997

 
376,615

 
778,612

Warehouse stock and other
34,198

 
—

 
34,198

 
$
1,098,471

 
$
447,784

 
$
1,546,255

 
December 31, 2013
 
Titled Inventory
 
Inventory Supply and Offtake Arrangements
 
Total
Crude oil and feedstocks
$
518,599

 
$
89,837

 
$
608,436

Refined products and blendstocks
425,033

 
378,286

 
803,319

Warehouse stock and other
33,762

 
—

 
33,762

 
$
977,394

 
$
468,123

 
$
1,445,517


The inventory offtake agreements at the Paulsboro and Delaware City refineries were terminated on July 1, 2013 and separate inventory intermediation agreements for these refineries became effective upon the termination.

Inventory under inventory supply and offtake arrangements includes certain crude oil stored at the Company’s Delaware City refinery's storage facilities that the Company will purchase as it is consumed in connection with

16
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

the crude supply agreement; and light finished products sold to counterparties in connection with the intermediation agreements and stored in the Paulsboro and Delaware City refineries' storage facilities.

At March 31, 2014 and December 31, 2013, the replacement value of inventories exceeded the LIFO carrying value by approximately $105,258 and $78,407, respectively.

4. DEFERRED CHARGES AND OTHER ASSETS, NET
Deferred charges and other assets, net consisted of the following:
 
 
March 31, 2014
 
December 31, 2013
Deferred turnaround costs, net
$
132,414

 
$
119,383

Catalyst
93,806

 
88,964

Deferred financing costs, net
26,866

 
26,541

Restricted cash
13,617

 
12,117

Linefill
9,667

 
9,636

Intangible assets, net
560

 
653

Other
5,237

 
5,185

 
$
282,167

 
$
262,479


 
5. ACCRUED EXPENSES
PBF Energy
Accrued expenses consisted of the following:

 
March 31, 2014
 
December 31, 2013
Inventory-related accruals
$
684,726

 
$
533,012

Inventory supply and offtake arrangements
475,275

 
454,893

Accrued transportation costs
38,246

 
29,762

Excise and sales tax payable
36,698

 
42,814

Accrued utilities
29,777

 
25,959

Accrued salaries and benefits
20,246

 
10,799

Income taxes payable
15,655

 
—

Renewable energy credit obligations
13,482

 
15,955

Customer deposits
13,396

 
23,621

Accrued interest
9,023

 
22,570

Accrued construction in progress
8,277

 
33,747

Other
19,611

 
16,749

 
$
1,364,412

 
$
1,209,881

 

17
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

 PBF Holding
Accrued expenses consisted of the following:

 
March 31, 2014
 
December 31, 2013
Inventory-related accruals
$
684,726

 
533,012

Inventory supply and offtake arrangements
475,275

 
454,893

Accrued transportation costs
38,246

 
29,762

Excise and sales tax payable
36,698

 
42,814

Accrued utilities
29,777

 
25,959

Accrued salaries and benefits
20,246

 
10,799

Renewable energy credit obligations
13,482

 
15,955

Customer deposits
13,396

 
23,621

Accrued interest
9,023

 
22,570

Accrued construction in progress
8,277

 
33,747

Other
19,611

 
17,813

 
$
1,348,757

 
$
1,210,945


The Company has the obligation to repurchase certain intermediates and finished products that are held in the Company’s refinery storage tanks in accordance with the Inventory Intermediation Agreements with J. Aron, which commenced in July 2013. As of March 31, 2014, a liability included in Inventory supply and offtake arrangements is recorded at market price for the J. Aron owned inventory held in the Company's storage tanks under the Inventory Intermediation Agreements, with any change in the market price being recorded in cost of sales. 

Prior to July 1, 2013, the Company had the obligation to repurchase certain intermediates and lube products under its products offtake agreements with Morgan Stanley Capital Group Inc. (“MSCG”) that were held in the Company’s refinery storage tanks in Delaware City and Paulsboro. A liability included in Inventory supply and offtake arrangements was recorded at market price for the volumes held in storage consistent with the terms of the offtake agreements with any change in the market price recorded in cost of sales.  The liability represented the amount the Company expected to pay to repurchase the volumes held in storage. The Company recorded a non-cash benefit of $15,904 related to this liability in the three months ended March 31, 2013.

The Company is subject to obligations to purchase Renewable Identification Numbers ("RINs") required to comply with the Renewable Fuels Standard. The Company's overall RINs obligation is based on a percentage of domestic shipments of on-road fuels as established by the Environmental Protection Agency ("EPA"). To the degree the Company is unable to blend the required amount of biofuels to satisfy our RINs obligation, RINs must be purchased on the open market to avoid penalties and fines. The Company records its RINs obligation on a net basis in Accrued expenses when its RINs liability is greater than the amount of RINs earned and purchased in a given period and in Prepaid expenses and other current assets when the amount of RINs earned and purchased is greater than the RINs liability.

6. CREDIT FACILITY
Effective March 25, 2014, PBF Rail Logistics Company LLC (“PBF Rail”), an indirect wholly-owned subsidiary of PBF Holding, entered into a $250,000 secured revolving credit agreement (the “Rail Facility”) with a consortium of eleven lenders, including Credit Agricole Corporate & Investment Bank (“CA-CIB”) as Administrative Agent. The primary purpose of the Rail Facility is to fund the acquisition by PBF Rail of approximately two thousand

18
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

coiled and insulated crude tank cars and approximately one thousand non-coiled and non-insulated general purpose crude tank cars (the "Eligible Railcars") before December 2015.

The amount advanced under the Rail Facility will equal 70% of the lesser of the aggregate Appraised Value of the Eligible Railcars, or the aggregate Purchase Price of such Eligible Railcars, as these terms are defined in the credit agreement. On the first anniversary of the closing, the advance rate will adjust automatically to 65%. The Rail Facility matures on March 31, 2016 and all outstanding advances must be repaid at that time. At any time prior to maturity PBF Rail may repay and re-borrow any advances without premium or penalty.

At PBF Rail's election, advances will bear interest at a rate per annum equal to one month Libor plus the Facility Margin for Eurodollar Loans, or the Corporate Base Rate plus the Facility Margin for Base Rate Loans (the Corporate Base Rate is equal to the higher of the prime rate as determined by CA-CIB, the Federal Funds Rate plus 50 basis points, or one month Libor plus 100 basis points), all as defined in the credit agreement. In addition, there is a commitment fee on the unused portion. Interest and fees are payable monthly.

The lenders received a perfected, first priority security interest in all of PBF Rail assets, including but not limited to (i) the Railcars, (ii) all railcar marks and other intangibles, (iii) the rights of PBF Rail under the Transportation Services Agreement (“TSA”) entered into by the PBF Rail and PBF Holding, (iv) the accounts of PBF Rail, and (v) proceeds from the sale or other disposition of the Eligible Railcars, including insurance proceeds. In addition, the lenders received a pledge of the membership interest of PBF Rail held by PBF Transportation Company LLC, a wholly-owned subsidiary of PBF Holding. The obligations of PBF Holding under the TSA are guaranteed by each of Delaware City Refining Company LLC, Paulsboro Refining Company LLC, and Toledo Refining Company LLC.
At March 31, 2014, there were no outstanding loans under the Rail Facility.

7. INCOME TAXES
PBF Energy
For periods following PBF Energy’s IPO, PBF Energy is required to file federal and applicable state corporate income tax returns and recognizes income taxes on its pre-tax income, which to date has consisted solely of its share of PBF LLC’s pre-tax income (approximately 40.9% prior to the January 2014 secondary offering, 56.4% prior to the March 2014 secondary offering and approximately 71.9% subsequent to the March 2014 secondary offering). PBF LLC is organized as a limited liability company which is treated as a "flow-through" entity for federal income tax purposes and therefore is not subject to income taxes. As a result, the PBF Energy condensed consolidated financial statements do not reflect any benefit or provision for income taxes on the pre-tax income or loss attributable to the noncontrolling interest in PBF LLC.

The income tax provision in the PBF Energy condensed consolidated financial statements of operations consists of the following:
 
 
 
Three Months Ended March 31, 2014
 
Three Months Ended March 31, 2013
Current tax benefit
 
$
16,719

 
$
—

Deferred tax expense
 
32,960

 
7,444

Total tax expense
 
$
49,679

 
$
7,444



19
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

The difference between the Company’s income tax expense and the income tax provision computed by applying the United States statutory rate and the difference between the Company’s effective income tax rate and the United States statutory rate are reconciled below:
 
 
 
Three Months Ended March 31, 2014
 
Three Months Ended March 31, 2013
Provision at Federal statutory rate
 
$
44,493

 
35.0
 %
 
$
6,598

 
35.0
%
Increase (decrease) attributable to flow-through of certain tax adjustments:
 
 
 
 
 
 
 
 

State income taxes (net federal income tax)
 
6,623

 
5.2
 %
 
819

 
4.3
%
Non deductible/nontaxable items
 
178

 
0.1
 %
 
18

 
0.1
%
Other
 
(1,615
)
 
(1.3
)%
 
9

 
0.1
%
Total
 
$
49,679

 
39.0
 %
 
$
7,444

 
39.5
%

PBF Energy has determined there are no material uncertain tax positions as of March 31, 2014.

PBF Holding
PBF Holding is a limited liability company treated as a "flow-through" entity for income tax purposes. Accordingly there is no benefit or provision for federal or state income tax in the accompanying PBF Holding financial statements.

8. INTERCOMPANY NOTES PAYABLE
As of March 31, 2014, PBF Holding had outstanding notes payable with PBF Energy and PBF LLC for an aggregate principal amount of $32,035 ($31,835 as of December 31, 2013). The notes have an interest rate of 2.5% and a five year term but may be prepaid in whole or in part at any time, at the option of the PBF Holding, without penalty or premium.

9. COMMITMENTS AND CONTINGENCIES
Environmental Matters
The Company’s refineries are subject to extensive and frequently changing federal, state and local laws and regulations, including, but not limited to, those relating to the discharge of materials into the environment or that otherwise relate to the protection of the environment, waste management and the characteristics and the compositions of fuels. Compliance with existing and anticipated laws and regulations can increase the overall cost of operating the refineries, including remediation, operating costs and capital costs to construct, maintain and upgrade equipment and facilities.

In connection with the Paulsboro refinery acquisition, the Company assumed certain environmental remediation obligations. The environmental liability of $11,473 recorded as of March 31, 2014 ($9,869 as of December 31, 2013) represents the present value of expected future costs discounted at a rate of 8%. The current portion of the environmental liability is recorded in accrued expenses and the non-current portion is recorded in other long-term liabilities. A trust fund related to this liability in the amount of $12,117 and $12,117, acquired in the Paulsboro acquisition, is recorded as restricted cash in deferred charges and other assets, net as of March 31, 2014 and December 31, 2013, respectively.

In connection with the acquisition of the Delaware City assets, Valero Energy Corporation ("Valero") remains responsible for certain pre-acquisition environmental obligations up to $20,000 and the predecessor to Valero in ownership of the refinery retains other historical obligations.


20
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

In connection with the acquisition of the Delaware City assets and the Paulsboro refinery, the Company and Valero purchased ten year, $75,000 environmental insurance policies to insure against unknown environmental liabilities at each site. In connection with the Toledo refinery acquisition, Sunoco, Inc. (R&M) ("Sunoco") remains responsible for environmental remediation for conditions that existed on the closing date for twenty years from March 1, 2011.

In 2010, New York State adopted a Low-Sulfur Heating Oil mandate that, beginning July 1, 2012, requires all heating oil sold in New York State to contain no more than 15 PPM sulfur.  By July 1, 2014, four additional Northeastern states will also require heating oils with 500 PPM or less sulfur.  All of the heating oil we currently produce meets these specifications.  The mandate and other requirements do not currently have a material impact on the Company's financial position, results of operations or cash flows.
 
The EPA issued the final Tier 3 Gasoline standards on March 3, 2014 under the Clean Air Act. This final rule establishes more stringent vehicle emission standards and further reduces the sulfur content of gasoline starting in January of 2017.  The new standard is set at 10 ppm sulfur in gasoline on an annual average basis starting January 1, 2017, with a credit trading program to provide compliance flexibility. The EPA responded to industry comments on the proposed rule and maintained the per gallon sulfur cap on gasoline at the existing 80 ppm cap. The standards set by the new rule are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.
 
The EPA was required to release the final annual standards for the Reformulated Fuels Standard ("RFS") for 2014 no later than Nov 29, 2013. The EPA did not meet this requirement but did release the proposed standards for 2014. In the proposed standards EPA responded to the industry discussion around the apparent infeasibility of compliance in 2014 if the EPA issued standards following the requirements of the Energy Independence and Security Act.  The EPA indicated it would use its waiver authority under the RFS 2 program ("RFS 2") and set standards for renewable fuel recognizing the practical constraints in requiring ethanol blending into gasoline above 10%. The EPA also indicated it would reduce the advanced biofuel requirement and hold constant the biomass based diesel requirements at the 2013 level. The cellulosic requirement would be increased over the 2013 volume and, as has been the case in each of the prior years, the EPA would likely be overstating the actual production. Renewable fuel groups have been vocal in advocating changes to the proposed standards in general due to the lower volumes mandated. The EPA is targeting to finalize the 2014 RFS 2 standards by June 2014. While there is still uncertainty regarding the final standards, the Company expects that the final standards issued by the EPA will not have a material impact on the Company's cost of compliance with RFS 2.
 
On June 1, 2012, the EPA issued final amendments to the New Source Performance Standards ("NSPS") for petroleum refineries, including standards for emissions of nitrogen oxides from process heaters and work practice standards and monitoring requirements for flares.  The Company has evaluated the impact of the regulation and amended standards on its refinery operations and currently does not expect the cost to comply by July 1, 2015 with the amended NSPS to be material.
 
In addition, the EPA proposed a Final Rule to the Clean Water Act ("CWA") Section 316(b) regarding cooling water intake structures. The next phase will include requirements for petroleum refineries.  The rule was to be published in January 2014, but was delayed by the EPA.  On February 10, 2014 the EPA and regulated parties agreed that the Agency will finalize the cooling water intake rule by April 17, 2014. The EPA did not meet this date, and has indicated that the issuance will be delayed until May 16, 2014.  The purpose of this rule is to prevent fish from being trapped against cooling water intake screens (impingement) and to prevent fish from being drawn through cooling water systems (entrainment). Facilities will be required to implement Best Technology Available (BTA) as soon as possible, but may request additional time, no later than 8-years after the final rule effective date. The company continues to evaluate the impact of this regulation, and at this time does not anticipate it having a material impact on the Company’s financial position, results of operations or cash flows.

On June 14, 2013, two administrative appeals were filed by the Sierra Club and Delaware Audubon regarding a permit Delaware City Refining Company LLC (“DCR”) obtained to allow loading of crude oil onto barges.  The

21
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

appeals allege that both the loading of crude oil onto barges and the operation of the Delaware City rail unloading terminal violate Delaware’s Coastal Zone Act. The first appeal is Number 2013-1 before the State Coastal Zone Industrial Control Board (the “CZ Board”), and the second appeal is before the Environmental Appeals Board and appeals Secretary’s Order No. 2013-A-0020.  The CZ Board held a hearing on the first appeal on July 16, 2013, and ruled in favor of DCR and the State of Delaware and dismissed Appellants’ appeal for lack of standing.  Sierra Club and Delaware Audubon have appealed that decision to the Delaware Superior Court, New Castle County, Case No. N13A-09-001 ALR, and DCR and the State have filed cross-appeals.  Briefs have been filed in this appeal but no date has been set for a decision by the Superior Court.  A hearing on the second appeal before the Environmental Appeals Board, case no. 2013-06, was held on January 13, 2014, and the Board ruled in favor of DCR and the State and dismissed the appeal for lack of jurisdiction.  A written decision by the Board has been issued and the Appellants have the right to appeal the decision to Superior Court.  If the Appellants in one or both of these matters ultimately prevail, the outcome may have an adverse material effect on our financial position, results of operations or cash flows. 

The Company is also currently subject to certain other existing environmental claims and proceedings. The Company believes that there is only a remote possibility that future costs related to any of these other known contingent liability exposures would have a material impact on its financial position, results of operations or cash flows.

PBF LLC Limited Liability Company Agreement
The holders of limited liability company interests in PBF LLC, including PBF Energy, generally have to include for purposes of calculating their U.S. federal, state and local income taxes their share of any taxable income of PBF LLC, regardless of whether such holders receive cash distributions from PBF LLC. PBF Energy may not receive cash distributions from PBF LLC equal to its share of such taxable income or even equal to the actual tax due with respect to that income. Taxable income of PBF LLC generally is allocated to the holders of PBF LLC units (including PBF Energy) pro rata in accordance with their respective share of the net profits and net losses of PBF LLC. In general, PBF LLC is required to make periodic tax distributions to the members of PBF LLC, including PBF Energy, pro rata in accordance with their respective percentage interests for such period (as determined under the amended and restated limited liability company agreement of PBF LLC), subject to available cash and applicable law and contractual restrictions (including pursuant to our debt instruments) and based on certain assumptions. Generally, these tax distributions are required to be in an amount equal to our estimate of the taxable income of PBF LLC for the year multiplied by an assumed tax rate equal to the highest effective marginal combined U.S. federal, state and local income tax rate prescribed for an individual or corporate resident in New York, New York (taking into account the nondeductibility of certain expenses). If, with respect to any given calendar year, the aggregate periodic tax distributions were less than the actual taxable income of PBF LLC multiplied by the assumed tax rate, PBF LLC is required to make a “true up” tax distribution, no later than March 15 of the following year, equal to such difference, subject to the available cash and borrowings of PBF LLC.
Tax Receivable Agreement
PBF Energy entered into a tax receivable agreement with the PBF LLC Series A and PBF LLC Series B Unit holders (the “Tax Receivable Agreement”) that provides for the payment by PBF Energy to such persons of an amount equal to 85% of the amount of the benefits, if any, that PBF Energy is deemed to realize as a result of (i) increases in tax basis, as described below, and (ii) certain other tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. For purposes of the Tax Receivable Agreement, the benefit deemed realized by PBF Energy will be computed by comparing the actual income tax liability of PBF Energy (calculated with certain assumptions) to the amount of such taxes that PBF Energy would have been required to pay had there been no increase to the tax basis of the assets of PBF LLC as a result of purchases or exchanges of PBF LLC Series A Units for shares of PBF Energy's Class A common stock and had PBF Energy not entered into the Tax Receivable Agreement. The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless: (i) PBF Energy exercises its right to terminate the Tax Receivable Agreement, (ii) PBF Energy breaches any of its material obligations under the Tax Receivable Agreement or (iii) certain changes of control occur, in which case all

22
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

obligations under the Tax Receivable Agreement will generally be accelerated and due as calculated under certain assumptions.

The payment obligations under the Tax Receivable Agreement are obligations of PBF Energy and not of PBF LLC or PBF Holding. In general, PBF Energy expects to obtain funding for these annual payments from PBF LLC, primarily through tax distributions. PBF LLC will cause PBF Holding to distribute cash to PBF LLC to make such distributions on a pro-rata basis to its owners. Such owners include PBF Energy, which holds a 71.9% interest as of March 31, 2014 (40.9% as of December 31, 2013).

10. DIVIDENDS AND DISTRIBUTIONS
With respect to dividends and distributions paid during the three months ended March 31, 2014, PBF Holding paid $29,661 in distributions to PBF LLC. PBF LLC used $29,065 of this amount in total to make non-tax distributions of $0.30 per unit to its members, of which $16,401 was distributed to PBF Energy and the balance was distributed to its other members on March 14, 2014. PBF Energy used this $16,401 to pay cash dividends of $0.30 per share of Class A common stock on March 14, 2014. PBF LLC used the remaining net $596, from PBF Holding's distribution to make tax distributions to its members, including PBF Energy, during the three months ended March 31, 2014.

11. EMPLOYEE BENEFIT PLANS
The components of net periodic benefit cost related to the Company’s defined benefit plans consisted of the following:

 
Three Months Ended March 31,
Pension Benefits
2014
 
2013
Components of net periodic benefit cost:
 
 
 
Service cost
$
4,291

 
$
3,699

Interest cost
570

 
248

Expected return on plan assets
(524
)
 
(138
)
Amortization of prior service costs
3

 
3

Amortization of loss
222

 
105

Net periodic benefit cost
$
4,562

 
$
3,917



 
Three Months Ended March 31,
Post Retirement Medical Plan
2014
 
2013
Components of net periodic benefit cost:
 
 
 
Service cost
$
178

 
$
181

Interest cost
93

 
84

Amortization of prior service costs
(20
)
 
—

Amortization of gain
(5
)
 
—

Net periodic benefit cost
$
246

 
$
265




23
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

12. FAIR VALUE MEASUREMENTS
The tables below present information about the Company's financial assets and liabilities measured and recorded at fair value on a recurring basis and indicate the fair value hierarchy of the inputs utilized to determine the fair values as of March 31, 2014 and December 31, 2013.
We have elected to offset the fair value amounts recognized for multiple derivative contracts executed with the same counterparty; however, fair value amounts by hierarchy level are presented on a gross basis in the tables below. We have posted cash margin with various counterparties to support hedging and trading activities. The cash margin posted is required by counterparties as collateral deposits and cannot be offset against the fair value of open contracts except in the event of default. We have no derivative contracts that are subject to master netting arrangements that are reflected gross on the balance sheet.
 
As of March 31, 2014
 
Fair Value Hierarchy
 
Total Gross Fair Value
 
Effect of Counter-party Netting
 
Net Carrying Value on Balance Sheet
 
Level 1
 
Level 2
 
Level 3
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
Money market funds
$
155,861

 
$
—

 
$
—

 
$
155,861

 
N/A

 
$
155,861

Non-qualified pension plan assets
4,955

 
—

 
—

 
4,955

 
N/A

 
4,955

Commodity contracts
33,436

 
19,839

 
800

 
54,075

 
(26,124
)
 
27,951

Derivatives included with intermediation agreement obligations
—

 
20,829

 
—

 
20,829

 
—

 
20,829

Derivatives included with inventory supply arrangement obligations
—

 
2,473

 
—

 
2,473

 
—

 
2,473

Total
$
194,252

 
$
43,141

 
$
800

 
$
238,193

 
$
(26,124
)
 
$
212,069

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Catalyst lease obligations
—

 
55,090

 
—

 
55,090

 
N/A

 
55,090

Commodity contracts
—

 
21,573

 
4,551

 
26,124

 
(26,124
)
 
—

Total
$
—

 
$
76,663

 
$
4,551

 
$
81,214

 
$
(26,124
)
 
$
55,090

 
As of December 31, 2013
 
Fair Value Hierarchy
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Assets:
 
 
 
 
 
 
 
Money market funds
$
5,857

 
$
—

 
$
—

 
$
5,857

Non-qualified pension plan assets
4,905

 
—

 
—

 
4,905

Commodity contracts
4,252

 
6,681

 
—

 
10,933

Derivatives included with inventory intermediation agreement obligations
—

 
6,016

 
—

 
6,016

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Commodity contracts
—

 
6,989

 
23,365

 
30,354

Catalyst lease obligations
—

 
53,089

 
—

 
53,089

Derivatives included with inventory supply arrangement obligations
—

 
177

 
—

 
177



24
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

The valuation methods used to measure financial instruments at fair value are as follows:
•
Money market funds categorized in Level 1 of the fair value hierarchy are measured at fair value based on quoted market prices and included within cash and cash equivalents.
•
Non-qualified pension plan assets categorized in Level 1 of the hierarchy are measured at fair value using a market approach based on published net asset values of mutual funds and included within deferred charges and other assets, net.
•
The commodity contracts categorized in Level 1 of the fair value hierarchy are measured at fair value based on quoted prices in an active market. The commodity contracts categorized in Level 2 of the fair value hierarchy are measured at fair value using a market approach based upon future commodity prices for similar instruments quoted in active markets.
•
The commodity contracts categorized in Level 3 of the fair value hierarchy consist of commodity price swap contracts that relate to forecasted purchases of crude oil for which quoted forward market prices are not readily available due to market illiquidity. The forward price used to value these swaps was derived using broker quotes, prices from other third party sources and other available market based data.
•
The derivatives included with inventory supply arrangement obligations, derivatives included with inventory intermediation agreement obligations and the catalyst lease obligations are categorized in Level 2 of the fair value hierarchy and are measured at fair value using a market approach based upon commodity prices for similar instruments quoted in active markets.

The table below summarizes the changes in fair value measurements of commodity contracts categorized in Level 3 of the fair value hierarchy:

 
 
Three Months Ended March 31,
 
 
2014
 
2013
Balance at beginning of period
 
$
(23,365
)
 
$
—

Purchases
 
—

 
—

Settlements
 
(1,305
)
 
—

Unrealized gain included in earnings
 
20,919

 
—

Transfers into Level 3
 
—

 
—

Transfers out of Level 3
 
—

 
—

Balance at end of period
 
$
(3,751
)
 
$
—



There were no transfers between levels during the three months ended March 31, 2014 and 2013, respectively.

25
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

Fair value of debt
The table below summarizes the fair value and carrying value as of March 31, 2014 and December 31, 2013.

 
March 31, 2014
 
December 31, 2013
 
Carrying
value
 
Fair
 value
 
Carrying
 value
 
Fair
value
Senior secured notes (a)
$
667,738

 
$
698,785

 
$
667,487

 
$
697,568

Revolver (b)
—

 
—

 
15,000

 
15,000

Catalyst leases (c)
55,090

 
55,090

 
53,089

 
53,089

 
722,828

 
753,875

 
735,576

 
765,657

Less - Current maturities
12,491

 
12,491

 
12,029

 
12,029

Long-term debt
$
710,337

 
$
741,384

 
$
723,547

 
$
753,628


(a) The estimated fair value, categorized as a Level 2 measurement, was calculated based on the present value of future expected payments utilizing implied current market interest rates based on quoted prices of the senior secured notes.
(b) The estimated fair value approximates carrying value, categorized as a Level 2 measurement, as these borrowings bear interest based upon short-term floating market interest rates.
(c) Catalyst leases are valued using a market approach based upon commodity prices for similar instruments quoted in active markets and are categorized as a Level 2 measurement. The Company has elected the fair value option for accounting for its catalyst lease repurchase obligations as the Company's liability is directly impacted by the change in fair value of the underlying catalyst.

13. DERIVATIVES
The Company uses derivative instruments to mitigate certain exposures to commodity price risk. The Company’s crude supply agreements contain purchase obligations for certain volumes of crude oil and other feedstocks. In addition, the Company entered into Inventory Intermediation Agreements commencing in July 2013 that contain purchase obligations for certain volumes of intermediates and refined products. The purchase obligations related to crude oil, feedstocks, intermediates and refined products under these agreements are derivative instruments that have been designated as fair value hedges in order to hedge the commodity price volatility of certain refinery inventory. The fair value of these purchase obligation derivatives is based on market prices of the underlying crude oil and refined products. The level of activity for these derivatives is based on the level of operating inventories.

As of March 31, 2014, there were 697,550 barrels of crude oil and feedstocks (838,829 barrels at December 31, 2013) outstanding under these derivative instruments designated as fair value hedges and no barrels (no barrels at December 31, 2013) outstanding under these derivative instruments not designated as hedges. As of March 31, 2014, there were 3,511,926 barrels of intermediates and refined products (3,274,047 barrels at December 31, 2013) outstanding under these derivative instruments designated as fair value hedges and no barrels (no barrels at December 31, 2013) outstanding under these derivative instruments not designated as hedges. These volumes represent the notional value of the contract.

The Company also enters into economic hedges primarily consisting of commodity derivative contracts that are not designated as hedges and are used to manage price volatility in certain crude oil and feedstock inventories as well as crude oil, feedstock, and refined product sales or purchases. The objective in entering into economic hedges is consistent with the objectives discussed above for fair value hedges. As of March 31, 2014, there were 91,730,000 barrels of crude oil and no barrels of refined products (43,199,000 and 0, respectively, as of December 31, 2013),

26
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

outstanding under short and long term commodity derivative contracts not designated as hedges representing the notional value of the contracts.

The following tables provide information about the fair values of these derivative instruments as of March 31, 2014 and December 31, 2013 and the line items in the consolidated balance sheet in which the fair values are reflected.
Description

Balance Sheet Location
Fair Value
Asset/(Liability)
Derivatives designated as hedging instruments:
 
 
March 31, 2014:
 
 
Derivatives included with inventory supply arrangement obligations
Accrued expenses
$
2,473

Derivatives included with the intermediation agreement obligations
Accrued expenses
$
20,829

December 31, 2013:
 
 
Derivatives included with inventory supply arrangement obligations
Accrued expenses
$
(177
)
Derivatives included with the intermediation agreement obligations
Accrued expenses
$
6,016

 
 
 
Derivatives not designated as hedging instruments:
 
 
March 31, 2014:
 
 
Commodity contracts
Accounts receivable
$
27,951

December 31, 2013:
 
 
Commodity contracts
Accounts payable
$
(19,421
)

The following tables provide information about the gain or loss recognized in income on these derivative instruments and the line items in the consolidated financial statements in which such gains and losses are reflected.

27
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

Description
Location of Gain or (Loss) Recognized in
 Income on Derivatives
Gain or (Loss)
Recognized in
Income on Derivatives
Derivatives designated as hedging instruments:
 
 
For the three months ended March 31, 2014:
 
 
Derivatives included with inventory supply arrangement obligations
Cost of sales
$
2,651

Derivatives included with the intermediation agreement obligations
Cost of sales
$
14,812

For the three months ended March 31, 2013:
 
 
Derivatives included with inventory supply arrangement obligations
Cost of sales
$
(7,751
)
Derivatives included with the intermediation agreement obligations
Cost of sales
$
—

 
 
 
Derivatives not designated as hedging instruments:
 
 
For the three months ended March 31, 2014:
 
 
Commodity contracts
Cost of sales
$
72,397

For the three months ended March 31, 2013:
 
 
Commodity contracts
Cost of sales
$
18,678

 
 
 
Hedged items designated in fair value hedges:
 
 
For the three months ended March 31, 2014:
 
 
Crude oil and feedstock inventory
Cost of sales
$
(2,651
)
Intermediate and refined product inventory
Cost of sales
$
(14,812
)
For the three months ended March 31, 2013:
 
 
Crude oil and feedstock inventory
Cost of sales
$
2,888

Intermediate and refined product inventory
Cost of sales
$
—


The Company had no ineffectiveness related to the Company's fair value hedges for the three months ended March 31, 2014 and a loss of $4,863 for the three months ended March 31, 2013 which was recorded in cost of sales. Gains and losses due to ineffectiveness, resulting from the difference in the forward and spot rates of the underlying crude inventory related to the derivatives included with inventory supply arrangement obligations, were excluded from the assessment of hedge effectiveness.


28
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

14. NET INCOME PER SHARE OF PBF ENERGY
The following table sets forth the computation of basic and diluted net income per Class A common share attributable to PBF Energy:

Basic Earnings Per Share:
 
Three Months Ended March 31, 2014
 
Three Months Ended March 31, 2013
Numerator for basic net income per Class A common share net income attributable to PBF Energy
 
$
77,444

 
$
11,406

Denominator for basic net income per Class A common share-weighted average shares
 
54,167,861

 
23,589,687

Basic net income attributable to PBF Energy per Class A common share
 
$
1.43

 
$
0.48

 
 
 
 
 
Diluted Earnings Per Share:
 
 
 
 
Numerator:
 
 
 
 
Net income attributable to PBF Energy
 
$
77,444

 
$
11,406

Plus: Net income attributable to noncontrolling interest (1)   
 
—

 
58,305

Less: Income tax on net income attributable to noncontrolling interest (2)   
 
—

 
(23,025
)
Numerator for diluted net income per Class A common share net income attributable to PBF Energy
 
$
77,444

 
$
46,686

 
 
 
 
 
Denominator:
 
 
 
 
Denominator for basic net income per Class A common share-weighted average shares
 
54,167,861

 
23,589,687

Effect of dilutive securities:
 
 
 
 
Conversion of PBF LLC Series A Units (3)   
 
—

 
72,972,131

Common stock equivalents (4)  
 
523,766

 
853,758

Denominator for diluted net income per common share-adjusted weighted average shares
 
54,691,627

 
97,415,576

Diluted net income attributable to PBF Energy per Class A common share
 
$
1.42

 
$
0.48

 
——————————
(1)
Represents the elimination of the noncontrolling interest associated with the ownership by the members of PBF LLC other than PBF Energy as if such members had fully exchanged their Series A Units for shares of PBF Energy's Class A common stock for the three months ended March 31, 2013. The potential conversion of 42,707,005 PBF LLC Series A Units were excluded from the denominator in computing diluted net income per share for the three months ended March 31, 2014 because including them would have had an antidilutive effect. As the PBF LLC Series A Units were not included, the numerator used in the calculation of diluted net income per share was equal to the numerator used in the calculation of basic net income per share and does not include the net income and income tax attributable to the net income associated with the potential conversion of the PBF LLC Series A Units.

29
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

(2)
Represents an adjustment to apply PBF Energy's statutory tax rate of approximately 39.5% for the three months ended March 31, 2013 to the noncontrolling interest. The adjustment assumes the full exchange of existing PBF LLC Series A Units as described in (1) above.
(3)
Represents an adjustment to weighted-average diluted shares to assume the full exchange of existing PBF LLC Series A Units as described in (1) above.
(4)
Represents an adjustment to weighted-average diluted shares outstanding to assume the full exchange of common stock equivalents, including options and warrants for PBF LLC Series A Units and options for shares of PBF Energy Class A common stock as calculated under the treasury stock method. Common stock equivalents excludes the effects of options to purchase 1,943,125 and 57,500 shares of PBF Energy Class A common stock because they are anti-dilutive for the three months ended March 31, 2014 and March 31, 2013, respectively.

15. SUBSEQUENT EVENTS
Dividend Declared
On April 28, 2014, the Company's Board of Directors declared a dividend of $0.30 per share on outstanding Class A common stock. The dividend is payable on May 29, 2014 to Class A common stockholders of record at the close of business on May 12, 2014.
Tax Distributions
On April 11, 2014, PBF Holding made cash distributions to PBF LLC in the amount of $103,500. PBF LLC subsequently made tax distributions of $103,500 to its members relating to the three months ended March 31, 2014, pursuant to the terms of PBF LLC's amended and restated limited liability company agreement. PBF Energy's share of such tax distributions was $57,573.

16. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING
PBF Services Company, Delaware City Refining Company LLC, Delaware Pipeline Company LLC, PBF Power Marketing LLC, Paulsboro Refining Company LLC, Paulsboro Natural Gas Pipeline Company LLC, Toledo Refining Company LLC and PBF Investments LLC are 100% owned subsidiaries of PBF Holding and serve as guarantors of the obligations under the senior secured notes. These guarantees are full and unconditional and joint and several. For purposes of the following footnote, PBF Holding is referred to as “Issuer.” The indenture dated February 9, 2012, among PBF Holding, PBF Finance, the guarantors party thereto and Wilmington Trust, National Association, governs subsidiaries designated as “Guarantor Subsidiaries.” PBF Logistics LP, PBF Rail Logistics Company LLC and Delaware City Terminaling Company LLC and PBF Transportation Company LLC are consolidated subsidiaries of the Company that are not guarantors of the senior secured notes.

The senior secured notes were co-issued by PBF Finance. For purposes of the following footnote, PBF Finance is referred to as “Co-Issuer.” The Co-Issuer has no independent assets or operations.

The following supplemental combining and consolidating financial information reflects the Issuer’s separate accounts, the combined accounts of the Guarantor Subsidiaries, the combining and consolidating adjustments and eliminations and the Issuer’s consolidated accounts for the dates and periods indicated. For purposes of the following combining and consolidating information, the Issuer’s Investment in its subsidiaries and the Guarantor Subsidiaries’ Investment in its subsidiaries are accounted for under the equity method of accounting.




30
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

16. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING
CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)
 
March 31, 2014
 
Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Combining and Consolidating Adjustments
 
Total
ASSETS
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
235,846

 
$
1,289

 
$
—

 
$
—

 
$
237,135

Accounts receivable
521,340

 
8,301

 
—

 
—

 
529,641

Inventories
953,337

 
592,918

 
—

 
—

 
1,546,255

Prepaid expense and other current assets
35,114

 
5,011

 
—

 
—

 
40,125

Due from related parties
12,709,103

 
17,255,733

 
—

 
(29,964,836
)
 
—

Total current assets
14,454,740

 
17,863,252

 
—

 
(29,964,836
)
 
2,353,156

 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
24,288

 
1,733,697

 
—

 
—

 
1,757,985

Investment in subsidiaries
3,280,156

 
—

 
—

 
(3,280,156
)
 
—

Deferred charges and other assets, net
27,542

 
254,625

 
—

 
—

 
282,167

Total assets
$
17,786,726

 
$
19,851,574

 
$
—

 
$
(33,244,992
)
 
$
4,393,308

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
172,917

 
$
73,902

 
$
—

 
$
—

 
$
246,819

Accrued expenses
780,437

 
568,320

 
—

 
—

 
1,348,757

Current portion of long-term debt
—

 
12,491

 
—

 
—

 
12,491

Deferred revenue
6,373

 
—

 
—

 
—

 
6,373

Due to related parties
14,135,658

 
15,829,178

 
—

 
(29,964,836
)
 
—

Total current liabilities
15,095,385

 
16,483,891

 
—

 
(29,964,836
)
 
1,614,440

 
 
 
 
 
 
 
 
 
 
Delaware Economic Development Authority loan
—

 
12,000

 
—

 
—

 
12,000

Long-term debt
667,738

 
42,599

 
—

 
—

 
710,337

Intercompany notes payable
32,035

 
—

 
—

 
—

 
32,035

Other long-term liabilities
15,742

 
32,928

 
—

 
—

 
48,670

Total liabilities
15,810,900

 
16,571,418

 
—

 
(29,964,836
)
 
2,417,482

 
 
 
 
 
 
 
 
 
 
Commitments and contingencies

 

 

 

 

 
 
 
 
 
 
 
 
 
 
Equity:
 
 
 
 
 
 
 
 
 
Member's equity
933,502

 
667,511

 
—

 
(667,511
)
 
933,502

Retained earnings
1,056,616

 
2,610,891

 
—

 
(2,610,891
)
 
1,056,616

Accumulated other comprehensive (loss) income
(14,292
)
 
1,754

 
—

 
(1,754
)
 
(14,292
)
Total equity
1,975,826

 
3,280,156

 
—

 
(3,280,156
)
 
1,975,826

Total liabilities and equity
$
17,786,726

 
$
19,851,574

 
$
—

 
$
(33,244,992
)
 
$
4,393,308




31
PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)

16. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING
CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)
 
December 31, 2013
 
Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Combining and Consolidating Adjustments
 
Total
ASSETS
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
76,179

 
$
791

 
$
—

 
$
—

 
$
76,970

Accounts receivable
588,385

 
8,262

 
—

 
—

 
596,647

Inventories
818,007

 
627,510

 
—

 
—

 
1,445,517

Prepaid expense and other current assets
49,251

 
6,592

 
—

 
—

 
55,843

Due from related parties
11,807,063

 
16,600,151

 
—

 
(28,407,214
)
 
—

Total current assets
13,338,885

 
17,243,306

 
—

 
(28,407,214
)
 
2,174,977

 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
60,746

 
1,720,843

 
—

 
—

 
1,781,589

Investment in subsidiaries
3,584,622