EX-99.1 2 pressrelease123117.htm EXHIBIT 99.1 Exhibit




pbfr2clra09.jpg
PBF Energy Reports Fourth Quarter 2017 Results, Declares Dividend of $0.30 Per Share

•
Fourth quarter income from operations of $253.5 million (excluding special items, fourth quarter income from operations of $55.9 million)
•
Tax reform related benefit of $173.3 million
•
Declares quarterly dividend of $0.30 per share

PARSIPPANY, NJ - February 15, 2018 - PBF Energy Inc. (NYSE:PBF) today reported fourth quarter 2017 income from operations of $253.5 million as compared to income from operations of $139.8 million for the fourth quarter of 2016. The company reported fourth quarter 2017 net income of $260.4 million, and net income attributable to PBF Energy Inc. of $241.9 million or $2.14 per share. This compares to net income of $71.8 million, and net income attributable to PBF Energy Inc. of $54.6 million or $0.54 per share for the fourth quarter 2016. Net income attributable to PBF Energy Inc. for the year-ended December 31, 2017 was $415.5 million, or $3.73 per share as compared to net income of $170.8 million, or $1.74 per share, for the year-ended December 31, 2016. Income from operations for the years ended December 31, 2017 and 2016 was $730.2 million and $498.9 million, respectively.

Our results for the fourth quarter 2017 were impacted by special items. These special items include a net, non-cash, after-tax gain of $119.3 million, or $1.04 per share, lower-of-cost-or-market ("LCM") inventory adjustment, and an after-tax net expense of $42.3 million, or $0.37 per share, related to a change in the tax receivable agreement ("TRA") liability and remeasurement of TRA associated deferred tax assets. The Tax Cuts and Jobs Act (the "TCJA") provided a net tax benefit of $173.3 million, or $1.51 per share, primarily related to the reduction in net deferred tax liabilities. In addition to these special items, our results included net after-tax charges totaling approximately $3.0 million, or $0.03 per share, related to an inventory layer decrement and approximately $42.2 million, or $0.37 per share, related to non-cash, unrealized derivative expense related to basis exposure for heavy Canadian feedstocks that will be processed in 2018.

Excluding special items, fourth quarter 2017 income from operations was $55.9 million as compared to a loss from operations of $60.7 million for the fourth quarter of 2016. Adjusted fully-converted net loss for the fourth quarter 2017, excluding special items, was $4.4 million, or $0.04 per share on a fully-exchanged, fully-diluted basis, as described below, compared to adjusted fully-converted net loss of $74.9 million, or $0.71 per share, for the fourth quarter 2016.

Excluding special items, income from operations was $434.7 million for the year-ended December 31, 2017 as compared to a loss from operations of $22.5 million for the year-ended December 31, 2016. Adjusted fully-converted net income for the year ended December 31, 2017, excluding special items, was $130.1 million, or $1.14 per share on a fully-exchanged, fully-diluted basis, as compared to adjusted fully-converted net loss of $145.7 million, or $1.41 per share, for the year ended December 31, 2016. PBF Energy's financial results reflect the consolidation of PBF Logistics LP (NYSE: PBFX), a master limited partnership of which PBF indirectly owns the general partner and approximately 44.1% of the limited partner interests as of December 31, 2017.

“2017 was a year of two halves for PBF Energy. During the first two quarters of the year, we invested heavily in our assets and completed the largest turnaround in our company's history at our Torrance refinery. The improvements and strategic capital investments we completed were critical to our operational success in the third and fourth quarters and helped demonstrate the strength of our fully-operational refining system,” said Tom Nimbley, PBF Energy's Chairman and CEO, “Looking ahead, we continue to focus on the safe and reliable operations of our assets. We are beginning 2018 with a strong and flexible balance sheet and are positioned to benefit from opportunities in the market.”


1




PBF Energy Inc. Declares Dividend
The company announced today that it will pay a quarterly dividend of $0.30 per share of Class A common stock on March 14, 2018, to holders of record as of February 28, 2018.

Outlook
For the first quarter 2018, we expect East Coast total throughput to average 330,000 to 350,000 barrels per day; Mid-Continent total throughput is expected to average 125,000 to 135,000 barrels per day; Gulf Coast total throughput is expected to average 180,000 to 190,000 barrels per day and West Coast total throughput is expected to average 160,000 to 170,000 barrels per day. These figures include the impact of the previously announced planned turnarounds at the Toledo, Delaware City and Chalmette refineries.

Non-GAAP Measures
This earnings release, and the discussion during the management conference call, may include references to non-GAAP (Generally Accepted Accounting Principles) measures including Adjusted Fully-Converted Net Income, Adjusted Fully-Converted Net Income excluding special items, Adjusted Fully-Converted Net Income per fully-exchanged, fully-diluted share, gross refining margin, gross refining margin excluding special items, gross refining margin per barrel of throughput, EBITDA (Earnings before Interest, Income Taxes, Depreciation and Amortization), EBITDA excluding special items, Adjusted EBITDA and projected EBITDA related to the refinery acquisitions. PBF believes that non-GAAP financial measures provide useful information about its operating performance and financial results. However, these measures have important limitations as analytical tools and should not be viewed in isolation or considered as alternatives for, or superior to, comparable GAAP financial measures. PBF's non-GAAP financial measures may also differ from similarly named measures used by other companies. See the accompanying tables and footnotes in this release for additional information on the non-GAAP measures used in this release and reconciliations to the most directly comparable GAAP measures.

Adjusted Fully-Converted Results
Adjusted fully-converted results assume the exchange of all PBF Energy Company LLC Series A Units and dilutive securities into shares of PBF Energy Inc. Class A common stock on a one-for-one basis, resulting in the elimination of the noncontrolling interest and a corresponding adjustment to the company's tax provision.

Conference Call Information
PBF Energy's senior management will host a conference call and webcast regarding quarterly results and other business matters on Thursday, February 15, 2018, at 8:30 a.m. ET. The call is being webcast and can be accessed at PBF Energy's website, http://www.pbfenergy.com. The call can also be heard by dialing (866) 518-6930 or (203) 518-9797, conference ID: PBFQ417. The audio replay will be available two hours after the end of the call through March 1, 2018, by dialing (800) 283-4605 or (402) 220-0874.

Forward-Looking Statements
Statements in this press release relating to future plans, results, performance, expectations, achievements and the like are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which may be beyond the company's control, that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors and uncertainties that may cause actual results to differ include but are not limited to the risks disclosed in the company's filings with the SEC, as well as the risk disclosed in PBF Logistics LP's SEC filings and any impact PBF Logistics LP may have on the company's credit rating, cost of funds, employees, customer and vendors; risk relating to the securities markets generally; and the impact of adverse market conditions affecting the company, unanticipated developments, regulatory approvals, changes in laws and other events that negatively impact the company. All forward-looking statements speak only as of the date hereof. The company undertakes no obligation to revise or update any forward-looking statements except as may be required by applicable law.

About PBF Energy Inc.
PBF Energy Inc. (NYSE:PBF) is one of the largest independent refiners in North America, operating, through its subsidiaries, oil refineries and related facilities in California, Delaware, Louisiana, New Jersey and Ohio. Our mission is to operate our facilities in a safe, reliable and environmentally responsible manner, provide employees with a safe and rewarding workplace, become a positive influence in the communities where we do business, and provide superior returns to our investors.

2





PBF Energy Inc. also currently indirectly owns the general partner and approximately 44.1% of the limited partnership interest of PBF Logistics LP (NYSE: PBFX).


Contacts:                        
Colin Murray (investors)                                 
ir@pbfenergy.com
Tel: 973.455.7578                                 

Michael C. Karlovich (media)
mediarelations@pbfenergy.com
Tel: 973.455.8994



3




PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except share and per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
 
 
 
 
December 31,
 
December 31,
 
 
 
 
 
 
2017
 
2016
 
2017
 
2016
Revenues
 
$
6,535,988

 
$
4,748,568

 
$
21,786,637

 
$
15,920,424

 
 
 
 
 
 
 
 
 
 
 
 
 
Cost and expenses (Note 1):
 
 
 
 
 
 
 
 
 
 
Cost of products and other
 
5,709,100

 
4,074,222

 
18,863,621

 
13,598,341

 
Operating expenses (excluding depreciation and amortization expense as reflected below)
 
418,475

 
433,902

 
1,685,611

 
1,423,198

 
Depreciation and amortization expense
 
80,192

 
57,729

 
277,992

 
216,341

 
Cost of sales
 
6,207,767

 
4,565,853

 
20,827,224

 
15,237,880

 
General and administrative expenses (excluding depreciation and amortization expense as reflected below)
 
71,578

 
41,477

 
214,773

 
166,452

 
Depreciation and amortization expense
 
2,609

 
1,418

 
12,964

 
5,835

 
Loss (gain) on sale of assets
 
518

 
(7
)
 
1,458

 
11,374

Total cost and expenses
 
 
6,282,472

 
4,608,741

 
21,056,419

 
15,421,541

 
 
 
 
 
 
 
 
 
 
 
 
 
Income from operations
 
253,516

 
139,827

 
730,218

 
498,883

 
 
 
 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
 
Change in tax receivable agreement liability
 
250,357

 
16,051

 
250,922

 
12,908

 
Change in fair value of catalyst leases
 
(1,236
)
 
5,978

 
(2,247
)
 
1,422

 
Debt extinguishment costs
 
—

 
—

 
(25,451
)
 
—

 
Interest expense, net
 
(39,556
)
 
(38,051
)
 
(154,427
)
 
(150,045
)
Income before income taxes
 
463,081

 
123,805

 
799,015

 
363,168

Income tax expense
 
202,695

 
52,043

 
315,584

 
137,650

Net income
 
260,386

 
71,762

 
483,431

 
225,518

 
Less: net income attributable to noncontrolling interests
 
18,494

 
17,204

 
67,914

 
54,707

Net income attributable to PBF Energy Inc. stockholders
 
$
241,892

 
$
54,558

 
$
415,517

 
$
170,811

 
 
 
 
 
 
 
 
 
 
 
 
 
Net income available to Class A common stock per share:
 
 
 
 
 
 
 
 
 
 
Basic
 
$
2.19

 
$
0.55

 
$
3.78

 
$
1.74

 
 
Diluted
 
$
2.14

 
$
0.54

 
$
3.73

 
$
1.74

 
 
Weighted-average shares outstanding-basic
 
110,208,152

 
99,854,984

 
109,779,407

 
98,334,302

 
 
Weighted-average shares outstanding-diluted
 
114,773,845

 
104,815,217

 
113,898,845

 
103,606,709

 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends per common share
 
$
0.30

 
$
0.30

 
$
1.20

 
$
1.20

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted fully-converted net income and adjusted fully-converted net income per fully exchanged, fully diluted shares outstanding (Note 2):
 
 
 
 
 
 
 
 
 
 
Adjusted fully-converted net income
 
$
245,929

 
$
57,086

 
$
424,587

 
$
179,893

 
 
Adjusted fully-converted net income per fully exchanged, fully diluted share
 
$
2.14

 
$
0.54

 
$
3.73

 
$
1.74

 
 
Adjusted fully-converted shares outstanding - diluted
 
114,773,845

 
104,815,217

 
113,898,845

 
103,606,709


 
 
 
 
 
 
 
 
 
 
 
 
See Footnotes to Earnings Release Tables


4




PBF ENERGY INC. AND SUBSIDIARIES
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
(Unaudited, in thousands, except share and per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RECONCILIATION OF NET INCOME TO ADJUSTED FULLY-CONVERTED
Three Months Ended
 
Year Ended
NET INCOME AND ADJUSTED FULLY-CONVERTED NET INCOME (LOSS)
December 31,
 
December 31,
EXCLUDING SPECIAL ITEMS (Note 2)
2017
 
2016
 
2017
 
2016
Net income attributable to PBF Energy Inc. stockholders
$
241,892

 
$
54,558

 
$
415,517

 
$
170,811

 
Less:
Income allocated to participating securities
232

 
—

 
1,043

 
—

Net income attributable to PBF Energy Inc. stockholders - basic
241,660

 
54,558

 
414,474


170,811

 
Add:
Net income attributable to noncontrolling interest (Note 3)
7,069

 
4,149

 
16,746

 
14,903

 
Less:
Income tax expense (Note 4)
(2,800
)
 
(1,621
)
 
(6,633
)
 
(5,821
)
Adjusted fully-converted net income
$
245,929

 
$
57,086

 
$
424,587

 
$
179,893

Special items (Note 5):
 
 
 
 
 
 
 
 
Add:
Non-cash LCM inventory adjustment (Note 6)
(197,589
)
 
(200,515
)
 
(295,532
)
 
(521,348
)
 
Add:
Change in tax receivable agreement liability (Note 6)
(250,357
)
 
(16,051
)
 
(250,922
)
 
(12,908
)
 
Add:
Debt extinguishment costs (Note 6)
—

 
—

 
25,451

 
—

 
Add:
Net tax benefit related to the TCJA (Note 7)
(173,346
)
 
—

 
(173,346
)
 
—

 
Add:
Net tax expense on remeasurement of TRA associated deferred tax assets (Note 7)
193,499

 
—

 
193,499

 
—

 
Less:
Recomputed income taxes on special items (Note 6)
177,427

 
84,593

 
206,364

 
208,686

Adjusted fully-converted net (loss) income excluding special items (Note 5)
$
(4,437
)
 
$
(74,887
)
 
$
130,101

 
$
(145,677
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares outstanding of PBF Energy Inc.
110,208,152

 
99,854,984

 
109,779,407

 
98,334,302

 
Conversion of PBF LLC Series A Units (Note 8)
3,798,023

 
4,591,968

 
3,823,783

 
4,865,133

 
Common stock equivalents (Note 9)
767,670

 
368,265

 
295,655

 
407,274

Fully-converted shares outstanding - diluted
114,773,845

 
104,815,217

 
113,898,845

 
103,606,709

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted fully-converted net income (per fully exchanged, fully diluted shares outstanding)
$
2.14

 
$
0.54

 
$
3.73

 
$
1.74

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted fully-converted net (loss) income excluding special items (per fully exchanged, fully diluted shares outstanding) (Note 5)
$
(0.04
)
 
$
(0.71
)
 
$
1.14

 
$
(1.41
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
RECONCILIATION OF INCOME FROM OPERATIONS TO
December 31,
 
December 31,
INCOME (LOSS) FROM OPERATIONS EXCLUDING SPECIAL ITEMS
2017
 
2016
 
2017
 
2016
Income from operations
$
253,516

 
$
139,827

 
$
730,218

 
$
498,883

Special items (Note 5):
 
 
 
 
 
 
 
 
Add:
Non-cash LCM inventory adjustment (Note 6)
(197,589
)
 
(200,515
)
 
(295,532
)
 
(521,348
)
Income (loss) from operations excluding special items (Note 5)
$
55,927

 
$
(60,688
)
 
$
434,686

 
$
(22,465
)
 
 
 
 
 
 
 
 
See Footnotes to Earnings Release Tables



5




PBF ENERGY INC. AND SUBSIDIARIES
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
EBITDA RECONCILIATIONS (Note 10)
(Unaudited, in thousands, except share and per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
Three Months Ended
 
Year Ended
RECONCILIATION OF NET INCOME TO EBITDA AND EBITDA
December 31,
 
December 31,
EXCLUDING SPECIAL ITEMS:
2017
 
2016
 
2017
 
2016
Net income
$
260,386

 
$
71,762

 
$
483,431

 
$
225,518

 
Add:
Depreciation and amortization expense
82,801

 
59,147

 
290,956

 
222,176

 
Add:
Interest expense, net
39,556

 
38,051

 
154,427

 
150,045

 
Add:
Income tax expense
202,695

 
52,043

 
315,584

 
137,650

EBITDA
$
585,438

 
$
221,003

 
$
1,244,398

 
$
735,389

Special Items (Note 5):
 
 
 
 
 
 
 
 
Add:
Non-cash LCM inventory adjustment (Note 6)
(197,589
)
 
(200,515
)
 
(295,532
)
 
(521,348
)
 
Add:
Change in tax receivable agreement liability (Note 6)
(250,357
)
 
(16,051
)
 
(250,922
)
 
(12,908
)
 
Add:
Debt extinguishment costs (Note 6)
—

 
—

 
25,451

 
—

EBITDA excluding special items (Note 5)
$
137,492

 
$
4,437

 
$
723,395

 
$
201,133

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RECONCILIATION OF EBITDA TO ADJUSTED EBITDA:
 
 
 
 
 
 
 
EBITDA
$
585,438

 
$
221,003

 
$
1,244,398

 
$
735,389

 
Add:
Stock based compensation
8,784

 
6,325

 
26,848

 
22,656

 
Add:
Net non-cash change in fair value of catalyst leases
1,236

 
(5,978
)
 
2,247

 
(1,422
)
 
Add:
Non-cash LCM inventory adjustment (Note 6)
(197,589
)
 
(200,515
)
 
(295,532
)
 
(521,348
)
 
Add:
Change in tax receivable agreement liability (Note 6)
(250,357
)
 
(16,051
)
 
(250,922
)
 
(12,908
)
 
Add:
Debt extinguishment costs (Note 6)
—

 
—

 
25,451

 
—

Adjusted EBITDA
$
147,512

 
$
4,784

 
$
752,490

 
$
222,367

 
See Footnotes to Earnings Release Tables


6




PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
CONSOLIDATED BALANCE SHEET DATA
(Unaudited, in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
 
December 31,
 
 
 
 
 
2017
 
2016
Balance Sheet Data:
 
 
 
 
 
Cash, cash equivalents and marketable securities
$
573,021

 
$
786,298

 
Inventories
2,213,797

 
1,863,560

 
Total assets
8,117,993

 
7,621,927

 
Total debt
2,191,650

 
2,148,234

 
 
 
 
 
 
Total equity
2,902,949

 
2,570,684

 
Total equity, excluding special items (Note 5, 18)
$
2,950,154

 
$
2,912,375

 
 
 
 
 
 
Total debt to capitalization ratio (Note 18)
43
%
 
46
%
 
Total debt to capitalization ratio, excluding special items (Note 18)
43
%
 
42
%
 
Net debt to capitalization ratio (Note 18)
36
%
 
35
%
 
Net debt to capitalization ratio, excluding special items (Note 18)
35
%
 
32
%
 
 
 
 
 
 
 
 
SUMMARIZED STATEMENT OF CASH FLOW DATA
(Unaudited, in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31,
 
 
 
 
 
2017
 
2016
Cash flows provided by operations
$
685,861

 
$
651,934

Cash flows used in investing activities
(687,011
)
 
(1,393,935
)
Cash flows (used in) provided by financing activities
(172,103
)
 
543,955

Net decrease in cash and cash equivalents
(173,253
)
 
(198,046
)
Cash and cash equivalents, beginning of period
746,274

 
944,320

Cash and cash equivalents, end of period
$
573,021

 
$
746,274

 
Marketable securities
—

 
40,024

Net cash, cash equivalents and marketable securities
$
573,021

 
$
786,298

 
 
 
 
 
 
 
 
See Footnotes to Earnings Release Tables

7




PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
SEGMENT FINANCIAL INFORMATION (Note 11)
(Unaudited, in thousands)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31, 2017
 
Refining
 
Logistics
 
Corporate
 
 Eliminations
 
Consolidated Total
Revenues
$
6,533,213

 
$
66,513

 
$
—

 
$
(63,738
)
 
$
6,535,988

Depreciation and amortization expense
73,033

 
7,159

 
2,609

 
—

 
82,801

Income (loss) from operations (Note 19)
290,976

 
36,737

 
(70,850
)
 
(3,347
)
 
253,516

Interest expense, net
1,262

 
9,745

 
28,549

 
—

 
39,556

Capital expenditures
58,483

 
18,098

 
512

 
—

 
77,093

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31, 2016
 
Refining
 
Logistics
 
Corporate
 
 Eliminations
 
Consolidated Total
Revenues
$
4,743,966

 
$
61,694

 
$
—

 
$
(57,092
)
 
$
4,748,568

Depreciation and amortization expense
52,289

 
5,440

 
1,418

 
—

 
59,147

Income (loss) from operations (Note 19)
148,180

 
35,505

 
(39,800
)
 
(4,058
)
 
139,827

Interest expense, net
111

 
7,874

 
30,066

 
—

 
38,051

Capital expenditures
160,043

 
14,935

 
3,633

 
—

 
178,611

 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2017
 
Refining
 
Logistics
 
Corporate
 
 Eliminations
 
Consolidated Total
Revenues
$
21,772,478

 
$
254,813

 
$
—

 
$
(240,654
)
 
$
21,786,637

Depreciation and amortization expense
254,161

 
23,831

 
12,964

 
—

 
290,956

Income (loss) from operations (Note 19)
808,021

 
148,215

 
(211,453
)
 
(14,565
)
 
730,218

Interest expense, net
4,695

 
33,363

 
116,369

 
—

 
154,427

Capital expenditures (Note 17)
634,013

 
89,539

 
3,483

 
—

 
727,035

 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2016
 
Refining
 
Logistics
 
Corporate
 
 Eliminations
 
Consolidated Total
Revenues
$
15,908,537

 
$
187,335

 
$
—

 
$
(175,448
)
 
$
15,920,424

Depreciation and amortization expense
201,358

 
14,983

 
5,835

 
—

 
222,176

Income (loss) from operations (Note 19)
551,810

 
110,822

 
(158,070
)
 
(5,679
)
 
498,883

Interest expense, net
2,938

 
30,433

 
116,674

 
—

 
150,045

Capital expenditures (Note 16)
1,471,291

 
121,351

 
20,229

 
—

 
1,612,871

 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
 
Refining
 
Logistics
 
Corporate
 
 Eliminations
 
Consolidated Total
Total Assets (Note 20)
$
7,298,049

 
$
737,550

 
$
123,211

 
$
(40,817
)
 
$
8,117,993

 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2016
 
Refining
 
Logistics
 
Corporate
 
 Eliminations
 
Consolidated Total
Total Assets (Note 20)
$
6,419,950

 
$
756,861

 
$
482,979

 
$
(37,863
)
 
$
7,621,927

 
 
 
 
 
 
 
 
 
 
See Footnotes to Earnings Release Tables

8




PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
MARKET INDICATORS AND KEY OPERATING INFORMATION
(Unaudited, amounts in thousands except as indicated)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
 
 
 
 
December 31,
 
December 31,
Market Indicators (dollars per barrel, except as noted) (Note 12)
2017
 
2016
 
2017
 
2016
Dated Brent Crude
$
61.39

 
$
49.56

 
$
54.18

 
$
43.91

West Texas Intermediate (WTI) crude oil
$
55.23

 
$
49.23

 
$
50.79

 
$
43.34

Light Louisiana Sweet (LLS) crude oil
$
60.94

 
$
50.60

 
$
54.02

 
$
45.03

Alaska North Slope (ANS) crude oil
$
61.31

 
$
50.06

 
$
54.43

 
$
43.67

Crack Spreads
 
 
 
 
 
 
 
 
Dated Brent (NYH) 2-1-1
$
14.44

 
$
14.43

 
$
14.74

 
$
13.49

 
WTI (Chicago) 4-3-1
$
19.44

 
$
10.30

 
$
15.88

 
$
12.38

 
LLS (Gulf Coast) 2-1-1
$
13.00

 
$
11.98

 
$
13.57

 
$
10.75

 
ANS (West Coast) 4-3-1
$
13.34

 
$
14.16

 
$
17.43

 
$
16.46

Crude Oil Differentials
 
 
 
 
 
 
 
 
Dated Brent (foreign) less WTI
$
6.16

 
$
0.33

 
$
3.39

 
$
0.56

 
Dated Brent less Maya (heavy, sour)
$
10.52

 
$
6.70

 
$
7.16

 
$
7.36

 
Dated Brent less WTS (sour)
$
6.59

 
$
1.24

 
$
4.37

 
$
1.42

 
Dated Brent less ASCI (sour)
$
3.88

 
$
3.59

 
$
3.66

 
$
3.92

 
WTI less WCS (heavy, sour)
$
16.48

 
$
13.79

 
$
12.24

 
$
12.57

 
WTI less Bakken (light, sweet)
$
(1.54
)
 
$
1.98

 
$
(0.26
)
 
$
1.32

 
WTI less Syncrude (light, sweet)
$
(1.53
)
 
$
(0.04
)
 
$
(1.74
)
 
$
(2.01
)
 
WTI less LLS (light, sweet)
$
(5.71
)
 
$
(1.37
)
 
$
(3.23
)
 
$
(1.69
)
 
WTI less ANS (light, sweet)
$
(6.08
)
 
$
(0.83
)
 
$
(3.63
)
 
$
(0.33
)
Natural gas (dollars per MMBTU)
 
 
$
2.92

 
$
3.18

 
$
3.02

 
$
2.55

 
 
 
 
 
 
 
 
 
 
 
 
 
Key Operating Information
 
 
 
 
 
 
 
Production (barrels per day ("bpd") in thousands)
872.3

 
786.1

 
802.9

 
734.3

Crude oil and feedstocks throughput (bpd in thousands)
870.9

 
775.5

 
807.4

 
727.7

Total crude oil and feedstocks throughput (millions of barrels)
80.1

 
71.3

 
294.7

 
266.4

Gross margin per barrel of throughput
$
4.39

 
$
2.85

 
$
3.53

 
$
2.73

Gross refining margin, excluding special items, per barrel of throughput (Note 5, Note 13)
$
7.06

 
$
5.80

 
$
8.08

 
$
6.09

Refinery operating expense per barrel of throughput (Note 14)
$
5.02

 
$
5.86

 
$
5.52

 
$
5.22

Crude and feedstocks (% of total throughput) (Note 15)
 
 
 
 
 
 
 
 
Heavy
33
%
 
36
%
 
34
%
 
26
%
 
Medium
30
%
 
32
%
 
30
%
 
37
%
 
Light
23
%
 
18
%
 
21
%
 
25
%
 
Other feedstocks and blends
 
 
14
%
 
14
%
 
15
%
 
12
%
 
 
Total throughput
 
 
100
%
 
100
%
 
100
%
 
100
%
Yield (% of total throughput):
 
 
 
 
 
 
 
 
Gasoline and gasoline blendstocks
51
%
 
52
%
 
50
%
 
50
%
 
Distillates and distillate blendstocks
31
%
 
32
%
 
30
%
 
31
%
 
Lubes
1
%
 
1
%
 
1
%
 
1
%
 
Chemicals
2
%
 
3
%
 
2
%
 
3
%
 
Other
15
%
 
13
%
 
16
%
 
15
%
 
 
Total yield
100
%
 
101
%
 
99
%
 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
See Footnotes to Earnings Release Tables

9




PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
 SUPPLEMENTAL OPERATING INFORMATION
(Unaudited, amounts in thousands except as indicated)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
 
 
 
 
December 31,
 
December 31,
 
 
 
 
 
 
2017
 
2016
 
2017
 
2016
Supplemental Operating Information - East Coast (Delaware City and Paulsboro)
 
 
 
 
 
 
 
Production (bpd in thousands)
359.3

 
323.6

 
332.5

 
322.9

Crude oil and feedstocks throughput (bpd in thousands)
362.4

 
324.5

 
338.2

 
327.0

Total crude oil and feedstocks throughput (millions of barrels)
33.3

 
29.9

 
123.4

 
119.7

Gross margin per barrel of throughput
$
1.46

 
$
2.01

 
$
0.89

 
$
1.28

Gross refining margin, excluding special items, per barrel of throughput (Note 5, Note 13)
$
4.02

 
$
4.66

 
$
5.46

 
$
5.07

Refinery operating expense per barrel of throughput (Note 14)
$
4.28

 
$
4.40

 
$
4.44

 
$
4.42

Crude and feedstocks (% of total throughput) (Note 15):
 
 
 
 
 
 
 
 
Heavy
26
%
 
35
%
 
31
%
 
22
%
 
Medium
44
%
 
38
%
 
40
%
 
52
%
 
Light
12
%
 
10
%
 
11
%
 
11
%
 
Other feedstocks and blends
18
%
 
17
%
 
18
%
 
15
%
 
 
Total throughput
100
%
 
100
%
 
100
%
 
100
%
Yield (% of total throughput):
 
 
 
 
 
 
 
 
Gasoline and gasoline blendstocks
48
%
 
47
%
 
46
%
 
47
%
 
Distillates and distillate blendstocks
33
%
 
35
%
 
31
%
 
31
%
 
Lubes
2
%
 
2
%
 
2
%
 
2
%
 
Chemicals
1
%
 
2
%
 
1
%
 
2
%
 
Other
15
%
 
14
%
 
18
%
 
17
%
 
 
Total yield
99
%
 
100
%
 
98
%
 
99
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Operating Information - Mid-Continent (Toledo)
 
 
 
 
 
 
 
Production (bpd in thousands)
143.8

 
143.1

 
148.2

 
161.8

Crude oil and feedstocks throughput (bpd in thousands)
141.5

 
139.3

 
145.2

 
159.1

Total crude oil and feedstocks throughput (millions of barrels)
13.0

 
12.8

 
53.0

 
58.3

Gross margin per barrel of throughput
$
9.17

 
$
1.59

 
$
5.52

 
$
2.57

Gross refining margin, excluding special items, per barrel of throughput (Note 5, Note 13)
$
12.17

 
$
3.22

 
$
10.28

 
$
5.28

Refinery operating expense per barrel of throughput (Note 14)
$
5.33

 
$
5.29

 
$
5.24

 
$
4.59

Crude and feedstocks (% of total throughput) (Note 15):
 
 
 
 
 
 
 
 
Medium
36
%
 
43
%
 
37
%
 
36
%
 
Light
63
%
 
56
%
 
61
%
 
62
%
 
Other feedstocks and blends
1
%
 
1
%
 
2
%
 
2
%
 
 
Total throughput
100
%
 
100
%
 
100
%
 
100
%
Yield (% of total throughput):
 
 
 
 
 
 
 
 
Gasoline and gasoline blendstocks
55
%
 
55
%
 
54
%
 
53
%
 
Distillates and distillate blendstocks
33
%
 
36
%
 
33
%
 
35
%
 
Chemicals
6
%
 
6
%
 
6
%
 
5
%
 
Other
8
%
 
6
%
 
9
%
 
9
%
 
 
Total yield
102
%
 
103
%
 
102
%
 
102
%
See Footnotes to Earnings Release Tables

10




PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
 SUPPLEMENTAL OPERATING INFORMATION
(Unaudited, amounts in thousands except as indicated)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
 
 
 
 
December 31,
 
December 31,
 
 
 
 
 
 
2017
 
2016
 
2017
 
2016
Supplemental Operating Information - Gulf Coast (Chalmette)
 
 
 
 
 
 
 
Production (bpd in thousands)
187.7

 
168.8

 
182.3

 
175.6

Crude oil and feedstocks throughput (bpd in thousands)
190.1

 
163.5

 
184.5

 
169.3

Total crude oil and feedstocks throughput (millions of barrels)
17.5

 
15.0

 
67.4

 
61.9

Gross margin per barrel of throughput
$
2.92

 
$
2.18

 
$
3.68

 
$
2.69

Gross refining margin, excluding special items, per barrel of throughput (Note 5, Note 13)
$
6.12

 
$
6.10

 
$
8.34

 
$
6.67

Refinery operating expense per barrel of throughput (Note 14)
$
4.51

 
$
6.37

 
$
4.84

 
$
5.55

Crude and feedstocks (% of total throughput) (Note 15):
 
 
 
 
 
 
 
 
Heavy
36
%
 
35
%
 
38
%
 
38
%
 
Medium
16
%
 
29
%
 
22
%
 
20
%
 
Light
35
%
 
17
%
 
25
%
 
26
%
 
Other feedstocks and blends
13
%
 
19
%
 
15
%
 
16
%
 
 
Total throughput
100
%
 
100
%
 
100
%
 
100
%
Yield (% of total throughput):
 
 
 
 
 
 
 
 
Gasoline and gasoline blendstocks
44
%
 
48
%
 
45
%
 
47
%
 
Distillates and distillate blendstocks
32
%
 
31
%
 
32
%
 
31
%
 
Chemicals
2
%
 
6
%
 
2
%
 
6
%
 
Other
21
%
 
15
%
 
20
%
 
16
%
 
 
Total yield
99
%
 
100
%
 
99
%
 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Operating Information - West Coast (Torrance)
 
 
 
 
 
 
 
Production (bpd in thousands)
181.5

 
150.6

 
139.9

 
147.1

Crude oil and feedstocks throughput (bpd in thousands)
176.9

 
148.2

 
139.5

 
143.9

Total crude oil and feedstocks throughput (millions of barrels)
16.3

 
13.6

 
50.9

 
26.5

Gross margin per barrel of throughput
$
4.24

 
$
2.18

 
$
2.84

 
$
3.00

Gross refining margin, excluding special items, per barrel of throughput (Note 5, Note 13)
$
10.24

 
$
10.36

 
$
11.80

 
$
11.14

Refinery operating expense per barrel of throughput (Note 14)
$
6.85

 
$
9.04

 
$
9.35

 
$
9.46

Crude and feedstocks (% of total throughput) (Note 15):
 
 
 
 
 
 
 
 
Heavy
77
%
 
74
%
 
74
%
 
77
%
 
Medium
7
%
 
11
%
 
8
%
 
9
%
 
Other feedstocks and blends
16
%
 
15
%
 
18
%
 
14
%
 
 
Total throughput
100
%
 
100
%
 
100
%
 
100
%
Yield (% of total throughput):
 
 
 
 
 
 
 
 
Gasoline and gasoline blendstocks
62
%
 
63
%
 
64
%
 
62
%
 
Distillates and distillate blendstocks
27
%
 
25
%
 
22
%
 
25
%
 
Other
14
%
 
14
%
 
14
%
 
16
%
 
 
Total yield
103
%
 
102
%
 
100
%
 
103
%
 
 
 
 
 
 
 
 
 
 
 
 
 
See Footnotes to Earnings Release Tables


11




PBF ENERGY INC. AND SUBSIDIARIES
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
GROSS REFINING MARGIN / GROSS REFINING MARGIN PER BARREL OF THROUGHPUT (Note 13)
(Unaudited, in thousands, except per barrel amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Three Months Ended
 
December 31, 2017
 
December 31, 2016
RECONCILIATION OF GROSS MARGIN TO GROSS REFINING MARGIN AND GROSS REFINING MARGIN EXCLUDING SPECIAL ITEMS
$
 
per barrel of throughput
 
$
 
per barrel of throughput
Calculation of gross margin:

 

 

 

Revenues
$
6,535,988

 
$
81.58

 
$
4,748,568

 
$
66.56

 
Less: Cost of products and other
5,709,100

 
71.26

 
4,074,222

 
57.11

 
Less: Refinery operating expense
402,602

 
5.02

 
418,359

 
5.86

 
Less: Refinery depreciation expense
73,033

 
0.91

 
52,532

 
0.74

Gross margin
$
351,253

 
$
4.39

 
$
203,455

 
$
2.85

 
Less: Revenues of PBFX
(66,513
)
 
(0.83
)
 
(61,694
)
 
(0.86
)
 
Add: Affiliate Cost of sales of PBFX
3,407

 
0.04

 
1,215

 
0.02

 
Add: Refinery operating expense
402,602

 
5.02

 
418,359

 
5.86

 
Add: Refinery depreciation expense
73,033

 
0.91

 
52,532

 
0.74

Gross refining margin
$
763,782

 
$
9.53

 
$
613,867

 
$
8.61

Special Items (Note 5):
 
 
 
 
 
 
 
 
Add: Non-cash LCM inventory adjustment (Note 6)
(197,589
)
 
(2.47
)
 
(200,515
)
 
(2.81
)
Gross refining margin excluding special items (Note 5)
$
566,193

 
$
7.06

 
$
413,352

 
$
5.80

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended
 
Year Ended
 
December 31, 2017
 
December 31, 2016
RECONCILIATION OF GROSS MARGIN TO GROSS REFINING MARGIN AND GROSS REFINING MARGIN EXCLUDING SPECIAL ITEMS
$
 
per barrel of throughput
 
$
 
per barrel of throughput
Calculation of gross margin:

 

 

 

Revenues
$
21,786,637

 
$
73.92

 
$
15,920,424

 
$
59.77

 
Less: Cost of products and other
18,863,621

 
64.01

 
13,598,341

 
51.05

 
Less: Refinery operating expense
1,627,616

 
5.52

 
1,390,582

 
5.22

 
Less: Refinery depreciation expense
254,271

 
0.86

 
204,005

 
0.77

Gross margin
1,041,129

 
3.53

 
727,496

 
2.73

 
Less: Revenues of PBFX
(254,813
)
 
(0.86
)
 
(187,335
)
 
(0.70
)
 
Add: Affiliate Cost of sales of PBFX
8,448

 
0.03

 
8,701

 
0.03

 
Add: Refinery operating expense
1,627,616

 
5.52

 
1,390,582

 
5.22

 
Add: Refinery depreciation expense
254,271

 
0.86

 
204,005

 
0.77

Gross refining margin
$
2,676,651

 
$
9.08

 
$
2,143,449

 
$
8.05

Special Items (Note 5):
 
 
 
 
 
 
 
 
Add: Non-cash LCM inventory adjustment (Note 6)
(295,532
)
 
(1.00
)
 
(521,348
)
 
(1.96
)
Gross refining margin excluding special items (Note 5)
$
2,381,119

 
$
8.08

 
$
1,622,101

 
$
6.09

 
 
 
 
 
 
 
 
 
 
 
 
 
 
See Footnotes to Earnings Release Tables


12




PBF ENERGY INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
FOOTNOTES TO EARNINGS RELEASE TABLES
 
(1) During the third quarter of 2017, we determined that we would revise the presentation of certain line items on our consolidated statements of operations to enhance our disclosure under the requirements of Rule 5-03 of Regulation S-X. The revised presentation is comprised of the inclusion of a subtotal within costs and expenses referred to as “Cost of sales” and the reclassification of total depreciation and amortization expense between such amounts attributable to cost of sales and other operating costs and expenses. The amount of depreciation and amortization expense that is presented separately within the “Cost of sales” subtotal represents depreciation and amortization of refining and logistics assets that are integral to the refinery production process. The historical comparative information has been revised to conform to the current presentation. This revised presentation does not have an effect on our historical consolidated income from operations or net income, nor does it have any impact on our consolidated balance sheets, statements of comprehensive income or statements of cash flows.
 
(2) Adjusted fully-converted information is presented in this table as management believes that these Non-GAAP measures, when presented in conjunction with comparable GAAP measures, are useful to investors to compare our results across the periods presented and facilitates an understanding of our operating results. We also use these measures to evaluate our operating performance. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The differences between adjusted fully-converted and GAAP results are explained in footnotes 3 through 9.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3) Represents the elimination of the noncontrolling interest associated with the ownership by the members of PBF Energy Company LLC other than PBF Energy Inc., as if such members had fully exchanged their Series A Units for shares of PBF Energy's Class A common stock.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(4) Represents an adjustment to reflect our statutory corporate tax rate of approximately 39.6% and 39.1% for the 2017 and 2016 periods, respectively, applied to the net income attributable to the noncontrolling interest for all periods presented. The adjustment assumes the full exchange of existing PBF Energy Company LLC Series A Units as described in footnote 3. Our statutory tax rates will be reduced in future periods as a result of the TCJA enactment (as defined below).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(5) The Non-GAAP measures presented include adjusted fully-converted net income excluding special items, income from continuing operations excluding special items, EBITDA excluding special items, and gross refining margin excluding special items. The special items for the periods presented relate to a lower of cost or market ("LCM") adjustment, changes in the tax receivable agreement liability ("TRA"), debt extinguishment costs, a net tax benefit related to the Tax Cuts and Jobs Act (the “TCJA”) and a net tax expense associated with the remeasurement of TRA associated deferred tax assets as further described below:

    (a) LCM is a GAAP guideline related to inventory valuation that requires inventory to be stated at the lower of cost or market. Our inventories are stated at the lower of cost or market. Cost is determined using last-in, first-out (LIFO) inventory valuation methodology, in which the most recently incurred costs are charged to cost of sales and inventories are valued at base layer acquisition costs. Market is determined based on an assessment of the current estimated replacement cost and net realizable selling price of the inventory. In periods where the market price of our inventory declines substantially, cost values of inventory may exceed market values. In such instances, we record an adjustment to write down the value of inventory to market value in accordance with GAAP. In subsequent periods, the value of inventory is reassessed and an LCM adjustment is recorded to reflect the net change in the LCM inventory reserve between the prior period and the current period.

     (b) Changes in the TRA reflect charges or benefits attributable to changes in our obligation under the TRA due to factors out of our control such as changes in tax rates.

    (c) Debt extinguishment costs reflect the difference between the carrying value of our 2020 Senior Secured Notes on the date that they were reacquired and the amount for which they were reacquired.

    (d) On December 22, 2017, the U.S. government enacted the TCJA. The TCJA makes broad and complex changes to the U.S. tax code, including, but not limited to reducing the U.S. federal corporate tax rate from 35 percent to 21 percent. Under GAAP, we are required to recognize the effect of the TCJA in the period of enactment. These effects resulted in a net tax expense associated with the remeasurement of TRA associated deferred tax assets and a net tax benefit for the reduction of our deferred tax liabilities as a result of the TCJA.

Although we believe that Non-GAAP financial measures excluding the impact of special items provide useful supplemental information to investors regarding the results and performance of our business and allow for useful period-over-period comparisons, such Non-GAAP measures should only be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(6) The following table includes the lower of cost or market inventory reserve as of each date presented (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

13




 
2017
 
2016
January 1,
$
595,988

 
$
1,117,336

September 30,
498,045

 
796,503

December 31,
300,456

 
595,988

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table includes the corresponding impact of changes in the lower of cost or market inventory reserve on operating income and net income for the periods presented (in thousands):
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
 
 
 
 
 
 
December 31,
 
December 31,
 
2017
 
2016
 
2017
 
2016
Net LCM inventory adjustment benefit in operating income
$
197,589

 
$
200,515

 
$
295,532

 
$
521,348

Net LCM inventory adjustment benefit in net income
119,326

 
122,192

 
178,475

 
317,704

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additionally, during both the three months and year ended December 31, 2017 we recorded a change in TRA that increased operating income by $250.4 million and 250.9 million ($151.2 million and 151.5 million, net of tax), respectively.

During the three months and year ended December 31, 2016 we recorded a change in TRA that increased operating income by $16.1 million and $12.9 million ($9.8 million and $7.8 million, net of tax), respectively.
 
Furthermore, during the year ended December 31, 2017, we recorded pre-tax debt extinguishment costs of $25.5 million related to the redemption of the 2020 Senior Secured Notes. These nonrecurring charges decreased net income by $15.4 million for the year ended December 31, 2017. There were no such costs in the year ended December 31, 2016 nor in the three months ended December 31, 2017 and 2016.
 
The income tax impact of the special items, other than TCJA related items discussed in footnote 7 below, were calculated using the tax rates shown in footnote 4 above.
 
(7) The Company made a one-time adjustment to deferred tax assets and liabilities in relation to the TCJA. The net income tax expense impact of $20.2 million consists of a net tax expense of $193.5 million associated with the remeasurement of TRA associated deferred tax assets and a net tax benefit of $173.3 million for the reduction of our deferred tax liabilities as a result of the TCJA.
 
(8) Represents an adjustment to weighted-average diluted shares outstanding to assume the full exchange of existing PBF LLC Series A Units as described in footnote 3 above.
 
(9) Represents weighted-average diluted shares outstanding assuming the conversion of all 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 (to the extent the impact of such exchange would not be anti-dilutive) for the three months and years ended December 31, 2017 and 2016, respectively. Common stock equivalents exclude the effects of options and warrants to purchase 3,537,500 and 6,820,275 shares of PBF Energy Class A common stock and PBF LLC Series A Units because they are anti-dilutive for the three months and year ended December 31, 2017, respectively. Common stock equivalents exclude the effects of options and warrants to purchase 5,923,625 and 5,701,750 shares of PBF Energy Class A common stock and PBF LLC Series A Units because they are anti-dilutive for the three months and year ended December 31, 2016, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(10) EBITDA (Earnings before Interest, Income Taxes, Depreciation and Amortization) and Adjusted EBITDA are supplemental measures of performance that are not required by, or presented in accordance with GAAP. We use these Non-GAAP financial measures as a supplement to our GAAP results in order to provide additional metrics on factors and trends affecting our business. EBITDA and Adjusted EBITDA are measures of operating performance that are not defined by GAAP and should not be considered substitutes for net income as determined in accordance with GAAP. In addition, because EBITDA and Adjusted EBITDA are not calculated in the same manner by all companies, they are not necessarily comparable to other similarly titled measures used by other companies. EBITDA and Adjusted EBITDA have their limitations as an analytical tool, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

14




(11) We operate in two reportable segments: Refining and Logistics. Our operations that are not included in the Refining and Logistics segments are included in Corporate. As of December 31, 2017, the Refining segment includes the operations of our oil refineries and related facilities in Delaware City, Delaware, Paulsboro, New Jersey, Toledo, Ohio, New Orleans, Louisiana and Torrance, California. The Logistics segment includes the operations of PBF Logistics LP ("PBFX"), a growth-oriented master limited partnership which owns or leases, operates, develops and acquires crude oil and refined petroleum products terminals, pipelines, storage facilities and similar logistics assets. PBFX's assets consist of rail and truck terminals and unloading racks, tank farms and pipelines, a substantial portion of which were acquired from or contributed by PBF LLC and are located at, or nearby, the company’s refineries. PBFX provides various rail, truck and marine terminaling services, pipeline transportation services and storage services to PBF Holding and/or its subsidiaries and third party customers through fee-based commercial agreements. In connection with the contribution by PBF LLC of the limited liability interests in Paulsboro Natural Gas Pipeline Company LLC ("PNGPC") to PBFX, the accompanying segment information has been retrospectively adjusted to include the historical results of PNGPC in the Logistics segment for all periods presented prior to such contribution.

PBFX currently does not generate significant third party revenue and intersegment related-party revenues are eliminated in consolidation. Prior to the PBFX initial public offering, PBFX was not considered to be a separate reportable segment. From a PBF Energy perspective, the company's chief operating decision maker evaluates the Logistics segment as a whole without regard to any of PBFX's individual segments.
 
(12) As reported by Platts.

(13) Gross refining margin and gross refining margin per barrel of throughput are Non-GAAP measures because they exclude refinery operating expenses, refinery depreciation and amortization and gross margin of PBFX. Gross refining margin per barrel is gross refining margin, divided by total crude and feedstocks throughput. We believe they are important measures of operating performance and they provide useful information to investors because gross refining margin per barrel is a helpful metric comparison to the industry refining margin benchmarks shown in the Market Indicators Tables, as the industry benchmarks do not include a charge for refinery operating expenses and depreciation. Other companies in our industry may not calculate gross refining margin and gross refining margin per barrel in the same manner. Gross refining margin and gross refining margin per barrel of throughput have their limitations as an analytical tool, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.
 
(14) Represents refinery operating expenses, including corporate-owned logistics assets, excluding depreciation and amortization, divided by total crude oil and feedstocks throughput.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(15) We define heavy crude oil as crude oil with American Petroleum Institute (API) gravity less than 24 degrees. We define medium crude oil as crude oil with API gravity between 24 and 35 degrees. We define light crude oil as crude oil with API gravity higher than 35 degrees.
 
(16) The Refining segment includes capital expenditures of $971.9 million related to the acquisition of the Torrance refinery and related logistic assets that was completed in the third quarter of 2016. Additionally, the Refining segment includes capital expenditures of $2.7 million for the working capital settlement related to the acquisition of the Chalmette refinery that was finalized in the first quarter of 2016.The Logistics segment includes capital expenditures of $98.4 million for the PBFX Plains Asset Purchase in the second quarter of 2016.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(17) The Logistics segment includes capital expenditures of $10.1 million for the acquisition of the Toledo Terminal by PBFX on April 17, 2017.
 
(18) The total debt to capitalization ratio is calculated by dividing total debt by the sum of total debt and total equity. This ratio is a measurement that management believes is useful to investors in analyzing our leverage. Net debt and the net debt to capitalization ratio are Non-GAAP measures. Net debt is calculated by subtracting cash and cash equivalents and marketable securities from total debt. We believe these measurements are also useful to investors since we have the ability to and may decide to use a portion of our cash and cash equivalents to retire or pay down our debt. Marketable securities included in net debt fully collateralized PBFX's Term Loan prior to its repayment. Additionally, as described in footnote 5 above, we have also presented the total debt to capitalization and net debt to capitalization ratios excluding the cumulative effects of special items on equity.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
 
December 31,
(In thousands)
2017
 
2016
Total debt
$
2,191,650

 
$
2,148,234

Total equity
2,902,949

 
2,570,684

Total capitalization
$
5,094,599

 
$
4,718,918

 
 
 
 
Total debt
$
2,191,650

 
$
2,148,234

Total equity, excluding special items
2,950,154

 
2,912,375

Total capitalization, excluding special items
$
5,141,804

 
$
5,060,609


15




 
 
 
 
Total equity
$
2,902,949

 
$
2,570,684

Special items (Note 5):
 
 
 
Add: Non-cash LCM inventory adjustment (Note 6)
300,456

 
595,988

Add: Change in tax receivable agreement liability (Note 6)
(276,430
)
 
(25,508
)
Add: Debt extinguishment costs (Note 6)
25,451

 
—

Add: Recomputed income taxes on special items (Note 6)
(22,425
)
 
(228,789
)
Add: Net tax expense on TCJA related special items (Note 7)
20,153

 
—

Net impact of special items to equity
$
47,205

 
$
341,691

Total equity, excluding special items (Note 5)
$
2,950,154

 
$
2,912,375

 
 
 
 
Total debt
$
2,191,650

 
$
2,148,234

Less: Cash, cash equivalents and marketable securities
573,021

 
786,298

Net debt
$
1,618,629

 
$
1,361,936

 


 
 
Total debt to capitalization ratio
43
%
 
46
%
Total debt to capitalization ratio, excluding special items
43
%
 
42
%
Net debt to capitalization ratio
36
%
 
35
%
Net debt to capitalization ratio, excluding special items
35
%
 
32
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(19) The Logistics segment includes 100% of the income from operations of the Torrance Valley Pipeline Company LLC ("TVPC"), as TVPC is consolidated by PBFX. PBFX records net income attributable to noncontrolling interest for the 50% equity interest in TVPC held by PBF Holding. PBF Holding (included in the Refining segment) records equity income in investee related to its 50% noncontrolling ownership interest in TVPC. For the purposes of the consolidated PBF Energy financial statements, PBF Holding's equity income in investee and PBFX's net income attributable to noncontrolling interest eliminate in consolidation.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(20) The Logistics segment includes 100% of the assets of TVPC as TVPC is consolidated by PBFX. PBFX records a noncontrolling interest for the 50% equity interest in TVPC held by PBF Holding. PBF Holding (included in the Refining segment) records an equity investment in TVPC reflecting its noncontrolling ownership interest. For the purposes of the consolidated PBF Energy financial statements, PBFX's noncontrolling interest in TVPC and PBF Holding's equity investment in TVPC eliminate in consolidation.


16