UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2022

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: 333-206728-02

PBF ENERGY INC.

PBF ENERGY COMPANY LLC

(Exact name of registrant as specified in its charter)

Delaware		45-3763855
Delaware		61-1622166
(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

(Registrants’ telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act.

Title of each class		Trading Symbol	Name of each exchange on which registered
Common Stock	par value $.001	PBF	New York Stock Exchange

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.                 Yes [x] No [ ]

PBF Energy Company LLC         Yes [x] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

PBF Energy Inc.             Yes [x] No [ ]

PBF Energy Company LLC    Yes [x] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

PBF Energy Inc.	Large accelerated filer	☑	Accelerated filer	o	Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company	☐
PBF Energy Company LLC	Large accelerated filer	☐	Accelerated filer	o	Non-accelerated filer	☑	Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

PBF Energy Inc.             ☐

PBF Energy Company LLC     ☐

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 ☐ No ☑

PBF Energy Company LLC    Yes ☐ No ☑

As of July 22, 2022, PBF Energy Inc. had 121,924,401 shares of Class A common stock and 13 shares of Class B common stock outstanding. PBF Energy Inc. is the sole managing member of, and owner of an equity interest representing approximately 99.3% of the outstanding economic interest in PBF Energy Company LLC as of June 30, 2022. There is no trading in the membership interest of PBF Energy Company LLC and therefore an aggregate market value based on such is not determinable. PBF Energy Company LLC has no common stock outstanding.

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS			4
PART I – FINANCIAL INFORMATION
	ITEM 1.	Financial Statements (Unaudited)
	PBF Energy Inc.
		Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	7
		Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021	8
		Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2022 and 2021	9
		Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2022 and 2021	10
		Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	12
	PBF Energy Company LLC
		Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	14
		Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021	15
		Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2022 and 2021	16
		Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2022 and 2021	17
		Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	19
Notes to PBF Energy Inc. and PBF Energy Company LLC Condensed Consolidated Financial Statements			21
	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	50
	ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	82
	ITEM 4.	Controls and Procedures	84
PART II – OTHER INFORMATION
	ITEM 1.	Legal Proceedings	85
	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	87
	ITEM 6.	Exhibits	88
SIGNATURES			90

2

EXPLANATORY NOTE

This combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (this “Form 10-Q”) is filed by PBF Energy Inc. (“PBF Energy”) and PBF Energy Company LLC (“PBF LLC”). 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 a holding company whose primary asset is an equity interest in PBF LLC. PBF Energy is the sole managing member of, and owner of an equity interest representing approximately 99.3% of the outstanding economic interests in PBF LLC as of June 30, 2022. PBF Energy operates and controls all of the business and affairs and consolidates the financial results of PBF LLC and its subsidiaries. PBF LLC is a holding company for the companies that directly and indirectly own and operate our business. PBF Holding Company LLC (“PBF Holding”) is a wholly-owned subsidiary of PBF LLC and PBF Finance Corporation (“PBF Finance”) is a wholly-owned subsidiary of PBF Holding. As of June 30, 2022, PBF LLC also holds a 47.7% limited partner interest and a non-economic general partner interest in PBF Logistics LP (“PBFX”), a publicly traded master limited partnership (“MLP”). PBF Energy, through its ownership of PBF LLC, consolidates the financial results of PBFX and its subsidiaries and records a noncontrolling interest in its consolidated financial statements representing the economic interests of PBFX’s unitholders other than PBF LLC. Collectively, PBF Energy and its consolidated subsidiaries, including PBF LLC, PBF Holding, and PBFX are referred to hereinafter as the “Company” unless the context otherwise requires. Discussions or areas of this report that either apply only to PBF Energy or PBF LLC are clearly noted in such sections. Unless the context indicates otherwise, the terms “we,” “us,” and “our” refer to both PBF Energy and PBF LLC and its consolidated subsidiaries.

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 (“PSLRA”), 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 strategies, objectives, intentions, resources and expectations regarding future industry trends are forward-looking statements made under the safe harbor provisions of the PSLRA except to the extent such statements relate to the operations of a partnership or limited liability company. 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 on 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 “Management's Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q, the Annual Report on Form 10-K for the year ended December 31, 2021 of PBF Energy and PBF LLC, which we refer to as our 2021 Annual Report on Form 10-K, and in our other filings with the U.S. Securities and Exchange Commission. 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 or crude oil, including volatility in commodity prices or constraints arising from federal, state or local governmental actions or environmental and/or social activists that reduce crude oil production or availability in the regions in which we operate our pipelines and facilities;

•the possibility that the PBFX Transaction (as defined in ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations) may not be consummated in the anticipated timeframe, on the contemplated terms or at all;

•the possibility that the expected synergies and value creation from the PBFX Transaction will not be realized, or will not be realized within the expected time period;

•the risk that unexpected costs will be incurred in connection with the completion of the PBFX Transaction;

•the risk that potential litigation in connection with the PBFX Transaction may affect the timing or occurrence of the PBFX Transaction or result in significant costs to us;

•the effects related to or resulting from Russia's military action in Ukraine, including the imposition of additional sanctions and export controls, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environment;

•the effectiveness of our crude oil sourcing strategies, including our crude by rail strategy and related commitments;

4

•our obligation to buy Renewable Identification Numbers (“RINs”) and market risks related to the volatility in the price of RINs required to comply with the Renewable Fuel Standard and greenhouse gas (“GHG”) emission credits required to comply with various GHG emission programs, such as Assembly Bill 32 (“AB 32”);

•our ability to operate our businesses efficiently, manage capital expenditures and costs (including general and administrative expenses) and generate earnings and cash flow;

•our expectations with respect to our capital spending and turnaround projects;

•the continued effect of the coronavirus (“COVID-19”) pandemic, including resurgences and variants of the virus, as well as related governmental and consumer responses on our business, financial condition and results of operations;

•the impact of current and future laws, rulings and governmental regulations, including restrictions on the exploration and/or production of crude oil in the state of California, the implementation of rules and regulations regarding transportation of crude oil by rail or in response to the potential impacts of climate change, decarbonization and future energy transition;

•adverse impacts related to legislation by the federal government lifting the restrictions on exporting U.S. crude oil or subjecting us to trade and sanctions laws, which change frequently as a result of foreign policy developments, and which may necessitate changes to our crude oil acquisition activities;

•our ability to target and execute expense reduction measures and achieve opportunities to improve our liquidity, including continued repurchases of our outstanding debt securities or otherwise further reducing our debt, and/or potential sales of non-operating assets or other real property;

•political pressure and influence of environmental groups and other stakeholders on decisions and policies related to the refining and processing of crude oil and refined products, and the related adverse impacts from changes in our regulatory environment, such as the effects of compliance with AB 32, or from actions taken by environmental interest groups;

•the risk of cyber-attacks;

•our increased dependence on technology;

•the effects of competition in our markets;

•the possibility that we may not reinstate dividend payments;

•the inability of our subsidiaries to freely pay dividends or make distributions to us;

•our ability to make acquisitions or investments, including in renewable diesel production, on any announced time frame or at all, and to realize the benefits from such acquisitions or investments;

•liabilities arising from recent acquisitions or investments that are unforeseen or exceeded our expectation;

•our expectations and timing with respect to our acquisition activity and whether such acquisitions are accretive or dilutive to shareholders;

•adverse developments in our relationship with both our key employees and unionized employees;

•our substantial indebtedness, including the impact of potential downgrades to our corporate credit rating, and unsecured notes;

•changes in currency exchange rates, interest rates and capital costs;

•restrictive covenants in our indebtedness that may adversely affect our operational flexibility;

5

•counterparty credit and performance risk exposure related to our supply and inventory intermediation arrangements;

•termination of our third amended and restated inventory intermediation agreement (“Third Inventory Intermediation Agreement”) with J. Aron & Company, a subsidiary of The Goldman Sachs Group, Inc. (“J. Aron”), which is scheduled to expire in December 2024 and could have a material adverse effect on our liquidity, as we would be required to finance our crude oil, intermediate and refined products inventory covered by the agreement. Additionally, we are obligated to repurchase from J. Aron certain crude oil, intermediates and finished products (the “J. Aron Products”) upon termination of the agreement;

•payments by PBF Energy to the current and former holders of PBF LLC Series A Units and PBF LLC Series B Units under PBF Energy’s tax receivable agreement entered with the PBF LLC Series A and PBF LLC Series B unitholders (the “Tax Receivable Agreement”) for certain tax benefits we may claim;

•our assumptions regarding payments arising under PBF Energy’s 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 PBF Energy Class A common stock as contemplated by the Tax Receivable Agreement, the price of PBF Energy 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;

•the impact of disruptions to crude or feedstock supply to any of our refineries, including disruptions related to PBFX or with third-party logistics infrastructure or operations, including pipeline, marine and rail transportation;

•risks associated with the operation of PBFX as a separate, publicly-traded entity; and

•potential tax consequences related to our investment in PBFX.

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 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 Form 10-Q. Except as required by applicable law, including the securities laws of the United States, 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.

6

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

PBF ENERGY INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in millions, except share and per share data)

	June 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents (PBFX: $30.7 and $33.9, respectively)	$	2,174.3	$	1,341.5
Accounts receivable	1,967.5		1,277.6
Inventories	2,976.3		2,505.1
Prepaid and other current assets	214.2		75.0
Total current assets	7,332.3		5,199.2
Property, plant and equipment, net (PBFX: $771.7 and $787.3, respectively)	5,009.3		4,902.2
Lease right of use assets	703.6		717.1
Deferred charges and other assets, net	930.5		822.9
Total assets	$	13,975.7	$	11,641.4
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,341.7	$	911.7
Accrued expenses	4,022.3		2,740.4
Deferred revenue	85.6		42.7
Current operating lease liabilities	66.6		64.9
Current debt	1,256.6		—
Total current liabilities	6,772.8		3,759.7
Long-term debt (PBFX: $553.4 and $622.5, respectively)	2,012.7		4,295.8
Payable to related parties pursuant to Tax Receivable Agreement	334.8		48.3
Deferred tax liabilities	171.6		111.4
Long-term operating lease liabilities	563.9		570.4
Long-term financing lease liabilities	63.8		70.6
Other long-term liabilities	269.6		252.4
Total liabilities	10,189.2		9,108.6
Commitments and contingencies (Note 8)
Equity:
PBF Energy Inc. equity
Class A common stock, $0.001 par value, 1,000,000,000 shares authorized, 121,924,401 shares outstanding at June 30, 2022, 120,319,577 shares outstanding at December 31, 2021	0.1		0.1
Class B common stock, $0.001 par value, 1,000,000 shares authorized, 13 shares outstanding at June 30, 2022, 15 shares outstanding at December 31, 2021	—		—
Preferred stock, $0.001 par value, 100,000,000 shares authorized, no shares outstanding at June 30, 2022 and December 31, 2021	—		—
Treasury stock, at cost, 6,742,719 shares outstanding at June 30, 2022 and 6,676,809 shares outstanding at December 31, 2021	(170.5)		(169.1)
Additional paid in capital	2,915.8		2,874.0
Retained earnings (accumulated deficit)	386.5		(796.1)
Accumulated other comprehensive income	15.7		17.3
Total PBF Energy Inc. equity	3,147.6		1,926.2
Noncontrolling interest	638.9		606.6
Total equity	3,786.5		2,532.8
Total liabilities and equity	$	13,975.7	$	11,641.4

See notes to condensed consolidated financial statements.

7

PBF ENERGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in millions, except share and per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues	$	14,077.7	$	6,897.9	$	23,219.4	$	11,822.7
Cost and expenses:
Cost of products and other	11,380.5		6,100.7		19,586.7		10,291.7
Operating expenses (excluding depreciation and amortization expense as reflected below)	637.6		483.8		1,258.0		965.1
Depreciation and amortization expense	120.1		111.6		238.4		225.7
Cost of sales	12,138.2		6,696.1		21,083.1		11,482.5
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	153.2		55.0		206.7		102.8
Depreciation and amortization expense	1.9		3.3		3.8		6.7
Change in fair value of contingent consideration	77.6		(4.0)		127.9		26.1
Loss (gain) on sale of assets	0.2		—		0.3		(0.6)
Total cost and expenses	12,371.1		6,750.4		21,421.8		11,617.5
Income from operations	1,706.6		147.5		1,797.6		205.2
Other income (expense):
Interest expense, net	(85.5)		(80.8)		(163.9)		(161.1)
Change in Tax Receivable Agreement liability	(267.2)		—		(286.5)		—
Change in fair value of catalyst obligations	7.2		5.8		2.3		(4.2)
Gain on extinguishment of debt	3.8		—		3.8		—
Other non-service components of net periodic benefit cost	2.2		1.9		4.4		3.9
Income before income taxes	1,367.1		74.4		1,357.7		43.8
Income tax expense (benefit)	131.3		4.5		125.2		(3.9)
Net income	1,235.8		69.9		1,232.5		47.7
Less: net income attributable to noncontrolling interests	32.1		22.0		49.9		41.1
Net income attributable to PBF Energy Inc. stockholders	$	1,203.7	$	47.9	$	1,182.6	$	6.6
Weighted-average shares of Class A common stock outstanding
Basic	121,268,354		120,230,133		120,886,059		120,211,219
Diluted	125,658,046		121,916,175		124,411,545		121,687,236
Net income available to Class A common stock per share:
Basic	$	9.93	$	0.40	$	9.78	$	0.05
Diluted	$	9.65	$	0.39	$	9.58	$	0.05

See notes to condensed consolidated financial statements.

8

PBF ENERGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in millions)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income	$	1,235.8	$	69.9	$	1,232.5	$	47.7
Other comprehensive income (loss):
Unrealized (loss) gain on available for sale securities	(0.6)		0.1		(1.7)		(0.5)
Net gain on pension and other post-retirement benefits	—		0.2		0.1		0.4
Total other comprehensive income (loss)	(0.6)		0.3		(1.6)		(0.1)
Comprehensive income	1,235.2		70.2		1,230.9		47.6
Less: comprehensive income attributable to noncontrolling interests	32.1		22.0		49.9		41.1
Comprehensive income attributable to PBF Energy Inc. stockholders	$	1,203.1	$	48.2	$	1,181.0	$	6.5

See notes to condensed consolidated financial statements.

9

PBF ENERGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(unaudited, in millions, except share and per share data)

	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Noncontrolling Interest		Total Equity
	Shares	Amount		Shares	Amount								Shares	Amount
Balance, March 31, 2022	120,617,648	$	0.1	15	$	—	$	2,882.0	$	(817.2)	$	16.3	6,731,747	$	(170.2)	$	615.1	$	2,526.1
Comprehensive income (loss)	—	—		—	—		—		1,203.7		(0.6)		—	—		32.1		1,235.2
Distributions to PBF Logistics LP public unitholders	—	—		—	—		—		—		—		—	—		(10.1)		(10.1)
Stock-based compensation expense	—	—		—	—		6.6		—		—		—	—		2.8		9.4
Transactions in connection with stock-based compensation plans	1,292,977	—		—	—		26.5		—		—		—	—		(1.3)		25.2
Effects of exchanges of PBF LLC Series A Units on deferred tax assets and liabilities and tax receivable agreement obligation	—	—		—	—		0.3		—		—		—	—		—		0.3
Exchange of PBF Energy Company LLC Series A Units for PBF Energy Class A common stock	24,748	—		(2)	—		0.1		—		—		—	—		(0.1)		—
Treasury stock purchases	(10,972)	—		—	—		0.3		—		—		10,972	(0.3)		—		—
Other	—	—		—	—		—		—		—		—	—		0.4		0.4
Balance, June 30, 2022	121,924,401	$	0.1	13	$	—	$	2,915.8	$	386.5	$	15.7	6,742,719	$	(170.5)	$	638.9	$	3,786.5
Balance, March 31, 2021	120,180,989	$	0.1	16	$	—	$	2,852.7	$	(1,068.4)	$	(9.5)	6,615,007	$	(168.2)	$	569.4	$	2,176.1
Comprehensive income	—	—		—	—		—		47.9		0.3		—	—		22.0		70.2
Distributions to PBF Logistics LP public unitholders	—	—		—	—		—		—		—		—	—		(10.0)		(10.0)
Stock-based compensation expense	—	—		—	—		6.9		—		—		—	—		2.8		9.7
Transactions in connection with stock-based compensation plans	81,840	—		—	—		(0.3)		—		—		—	—		(1.0)		(1.3)
Exchange of PBF Energy Company LLC Series A Units for PBF Energy Class A common stock	6,331	—		—	—		—		—		—		—	—		—		—
Treasury stock purchases	(21,165)	—		—	—		0.3		—		—		21,165	(0.3)		—		—
Other	—	—		—	—		2.9		—		—		—	—		(0.7)		2.2
Balance, June 30, 2021	120,247,995	$	0.1	16	$	—	$	2,862.5	$	(1,020.5)	$	(9.2)	6,636,172	$	(168.5)	$	582.5	$	2,246.9

See notes to condensed consolidated financial statements.

10

PBF ENERGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(unaudited, in millions, except share and per share data)

	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Noncontrolling Interest		Total Equity
	Shares	Amount		Shares	Amount								Shares	Amount
Balance, December 31, 2021	120,319,577	$	0.1	15	$	—	$	2,874.0	$	(796.1)	$	17.3	6,676,809	$	(169.1)	$	606.6	$	2,532.8
Comprehensive income (loss)	—	—		—	—		—		1,182.6		(1.6)		—	—		49.9		1,230.9
Distributions to PBF Logistics LP public unitholders	—	—		—	—		—		—		—		—	—		(20.1)		(20.1)
Stock-based compensation expense	—	—		—	—		13.2		—		—		—	—		3.5		16.7
Transactions in connection with stock-based compensation plans	1,634,742	—		—	—		27.1		—		—		—	—		(1.3)		25.8
Exchange of PBF Energy Company LLC Series A Units for PBF Energy Class A common stock	35,992	—		(2)	—		0.1		—		—		—	—		(0.1)		—
Treasury stock purchases	(65,910)	—		—	—		1.4		—		—		65,910	(1.4)		—		—
Other	—	—		—	—		—		—		—		—	—		0.4		0.4
Balance, June 30, 2022	121,924,401	$	0.1	13	$	—	$	2,915.8	$	386.5	$	15.7	6,742,719	$	(170.5)	$	638.9	$	3,786.5
Balance, December 31, 2020	120,101,641	$	0.1	16	$	—	$	2,846.2	$	(1,027.1)	$	(9.1)	6,549,449	$	(167.3)	$	559.5	$	2,202.3
Comprehensive income (loss)	—	—		—	—		—		6.6		(0.1)		—	—		41.1		47.6
Distributions to PBF Logistics LP public unitholders	—	—		—	—		—		—		—		—	—		(20.0)		(20.0)
Stock-based compensation expense	—	—		—	—		12.8		—		—		—	—		3.8		16.6
Transactions in connection with stock-based compensation plans	188,722	—		—	—		(0.8)		—		—		—	—		(1.0)		(1.8)
Exchange of PBF Energy Company LLC Series A Units for PBF Energy Class A common stock	44,355	—		—	—		0.2		—		—		—	—		(0.2)		—
Treasury stock purchases	(86,723)	—		—	—		1.2		—		—		86,723	(1.2)		—		—
Other	—	—		—	—		2.9		—		—		—	—		(0.7)		2.2
Balance, June 30, 2021	120,247,995	$	0.1	16	$	—	$	2,862.5	$	(1,020.5)	$	(9.2)	6,636,172	$	(168.5)	$	582.5	$	2,246.9

See notes to condensed consolidated financial statements.

11

PBF ENERGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)

	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities:
Net income	$	1,232.5	$	47.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	253.0		240.9
Stock-based compensation	18.0		17.8
Change in fair value of catalyst obligations	(2.3)		4.2
Deferred income taxes	60.2		(3.5)
Change in Tax Receivable Agreement liability	286.5		—
Non-cash change in inventory repurchase obligations	(3.4)		42.2
Non-cash lower of cost or market inventory adjustment	—		(669.6)
Change in fair value of contingent consideration	127.9		26.1
Gain on extinguishment of debt	(3.8)		—
Pension and other post-retirement benefit costs	23.8		25.3
Loss (gain) on sale of assets	0.3		(0.6)
Changes in operating assets and liabilities:
Accounts receivable	(689.9)		(494.9)
Inventories	(471.3)		(280.4)
Prepaid and other current assets	(139.1)		(84.0)
Accounts payable	396.9		373.4
Accrued expenses	1,163.8		883.4
Deferred revenue	42.9		(18.4)
Other assets and liabilities	(27.0)		(44.9)
Net cash provided by operating activities	$	2,269.0	$	64.7
Cash flows from investing activities:
Expenditures for property, plant and equipment	(226.5)		(84.6)
Expenditures for deferred turnaround costs	(166.8)		(38.5)
Expenditures for other assets	(43.6)		(16.5)
Net cash used in investing activities	$	(436.9)	$	(139.6)

See notes to condensed consolidated financial statements.

12

PBF ENERGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(unaudited, in millions)

	Six Months Ended June 30,
	2022		2021
Cash flows from financing activities:
Distributions to PBFX public unitholders	$	(19.6)	$	(19.5)
Distributions to T&M and Collins shareholders	—		(0.7)
Repurchase of 2028 6.00% Senior Notes	(21.1)		—
Repurchase of 2025 7.25% Senior Notes	(4.8)		—
Repayments of revolver borrowings	(900.0)		—
Repayments of PBFX revolver borrowings	(70.0)		(40.0)
Repayments of PBF Rail Term Loan	—		(3.7)
Payments on financing leases	(5.7)		(7.1)
Proceeds from insurance premium financing	32.4		28.0
Payments of contingent consideration	(2.7)		(12.2)
Deferred financing costs and other	(7.8)		0.3
Net cash used in financing activities	$	(999.3)	$	(54.9)
Net change in cash and cash equivalents	832.8		(129.8)
Cash and cash equivalents, beginning of period	1,341.5		1,609.5
Cash and cash equivalents, end of period	$	2,174.3	$	1,479.7
Supplemental cash flow disclosures
Non-cash activities:
Accrued and unpaid capital expenditures	$	119.4	$	48.0
Assets acquired or remeasured under operating and financing leases	30.1		(127.9)
Cash paid during the period for:
Interest (net of capitalized interest of $9.3 million and $4.9 million in 2022 and 2021, respectively)	$	150.5	$	152.4
Income taxes	1.9		4.7

See notes to condensed consolidated financial statements.

13

PBF ENERGY COMPANY LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in millions, except unit and per unit data)

	June 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents (PBFX: $30.7 and $33.9, respectively)	$	2,141.1	$	1,339.8
Accounts receivable	1,967.5		1,277.6
Inventories	2,976.3		2,505.1
Prepaid and other current assets	214.2		75.0
Total current assets	7,299.1		5,197.5
Property, plant and equipment, net (PBFX: $771.7 and $787.3, respectively)	5,009.3		4,902.2
Lease right of use assets	703.6		717.1
Deferred charges and other assets, net	930.5		822.9
Total assets	$	13,942.5	$	11,639.7
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,341.7	$	911.7
Accrued expenses	4,013.6		2,792.6
Deferred revenue	85.6		42.7
Current operating lease liabilities	66.6		64.9
Current debt	1,256.6		—
Total current liabilities	6,764.1		3,811.9
Long-term debt (PBFX: $553.4 and $622.5, respectively)	2,012.7		4,295.8
Affiliate note payable	373.4		375.2
Deferred tax liabilities	14.7		24.2
Long-term operating lease liabilities	563.9		570.4
Long-term financing lease liabilities	63.8		70.6
Other long-term liabilities	269.6		252.4
Total liabilities	10,062.2		9,400.5
Commitments and contingencies (Note 8)
Series B Units, 1,000,000 issued and outstanding, no par or stated value	5.1		5.1
PBF Energy Company LLC equity:
Series A Units, 910,457 and 927,990 issued and outstanding at June 30, 2022 and December 31, 2021, no par or stated value	17.5		17.6
Series C Units, 121,945,632 and 120,340,808 issued and outstanding at June 30, 2022 and December 31, 2021, no par or stated value	2,257.7		2,245.0
Treasury stock, at cost	(170.5)		(169.1)
Retained earnings (accumulated deficit)	1,220.4		(390.9)
Accumulated other comprehensive income	18.7		20.3
Total PBF Energy Company LLC equity	3,343.8		1,722.9
Noncontrolling interest	531.4		511.2
Total equity	3,875.2		2,234.1
Total liabilities, Series B units and equity	$	13,942.5	$	11,639.7

See notes to condensed consolidated financial statements.

14

PBF ENERGY COMPANY LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in millions)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues	$	14,077.7	$	6,897.9	$	23,219.4	$	11,822.7
Cost and expenses:
Cost of products and other	11,380.5		6,100.7		19,586.7		10,291.7
Operating expenses (excluding depreciation and amortization expense as reflected below)	637.6		483.8		1,258.0		965.1
Depreciation and amortization expense	120.1		111.6		238.4		225.7
Cost of sales	12,138.2		6,696.1		21,083.1		11,482.5
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	152.8		54.1		205.9		101.6
Depreciation and amortization expense	1.9		3.3		3.8		6.7
Change in fair value of contingent consideration	77.6		(4.0)		127.9		26.1
Loss (gain) on sale of assets	0.2		—		0.3		(0.6)
Total cost and expenses	12,370.7		6,749.5		21,421.0		11,616.3
Income from operations	1,707.0		148.4		1,798.4		206.4
Other income (expense):
Interest expense, net	(88.2)		(83.2)		(169.2)		(166.1)
Change in fair value of catalyst obligations	7.2		5.8		2.3		(4.2)
Gain on extinguishment of debt	3.8		—		3.8		—
Other non-service components of net periodic benefit cost	2.2		1.9		4.4		3.9
Income before income taxes	1,632.0		72.9		1,639.7		40.0
Income tax benefit	(1.2)		(4.3)		(9.3)		(14.9)
Net income	1,633.2		77.2		1,649.0		54.9
Less: net income attributable to noncontrolling interests	19.9		21.6		37.7		41.1
Net income attributable to PBF Energy Company LLC	$	1,613.3	$	55.6	$	1,611.3	$	13.8

See notes to condensed consolidated financial statements.

15

PBF ENERGY COMPANY LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in millions)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income	$	1,633.2	$	77.2	$	1,649.0	$	54.9
Other comprehensive income (loss):
Unrealized (loss) gain on available for sale securities	(0.6)		0.1		(1.7)		(0.5)
Net gain on pension and other post-retirement benefits	—		0.2		0.1		0.4
Total other comprehensive income (loss)	(0.6)		0.3		(1.6)		(0.1)
Comprehensive income	1,632.6		77.5		1,647.4		54.8
Less: comprehensive income attributable to noncontrolling interests	19.9		21.6		37.7		41.1
Comprehensive income attributable to PBF Energy Company LLC	$	1,612.7	$	55.9	$	1,609.7	$	13.7

See notes to condensed consolidated financial statements.

16

PBF ENERGY COMPANY LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(unaudited, in millions, except unit data) 

	Series A			Series C			Accumulated Other Comprehensive Income (Loss)		Retained Earnings (Accumulated Deficit)		Noncontrolling Interest		Treasury Stock		Total Member’s Equity
	Units	Amount		Units	Amount
Balance, March 31, 2022	927,990	$	17.6	120,638,879	$	2,251.4	$	19.3	$	(392.9)	$	519.7	$	(170.2)	$	2,244.9
Comprehensive income (loss)	—	—		—	—		(0.6)		1,613.3		19.9		—		1,632.6
Exchange of Series A units for PBF Energy Class A common stock	(24,748)	(0.1)		24,748	0.1		—		—		—		—		—
Distribution to members	—	—		—	—		—		—		(10.1)		—		(10.1)
Stock-based compensation expense	—	—		—	6.6		—		—		2.8		—		9.4
Transactions in connection with stock-based compensation plans	7,215	—		1,292,977	(0.7)		—		—		(1.3)		—		(2.0)
Treasury stock purchases	—	—		(10,972)	0.3		—		—		—		(0.3)		—
Other	—	—		—	—		—		—		0.4		—		0.4
Balance, June 30, 2022	910,457	$	17.5	121,945,632	$	2,257.7	$	18.7	$	1,220.4	$	531.4	(170.5)		$	3,875.2
Balance, March 31, 2021	993,947	$	17.7	120,202,220	$	2,226.5	$	(6.5)	$	(732.3)	$	476.6	$	(168.2)	$	1,813.8
Comprehensive income	—	—		—	—		0.3		55.6		21.6		—		77.5
Exchange of Series A units for PBF Energy Class A common stock	(6,331)	—		6,331	—		—		—		—		—		—
Distribution to members	—	—		—	—		—		—		(10.0)		—		(10.0)
Stock-based compensation expense	—	—		—	6.9		—		—		2.8		—		9.7
Transactions in connection with stock-based compensation plans	6,576	0.1		81,840	—		—		—		(1.0)		—		(0.9)
Treasury stock purchases	—	—		(21,165)	0.3		—		—		—		(0.3)		—
Other	—	—		—	—		—		—		(0.7)		—		(0.7)
Balance, June 30, 2021	994,192	$	17.8	120,269,226	$	2,233.7	$	(6.2)	$	(676.7)	$	489.3	(168.5)		$	1,889.4

See notes to condensed consolidated financial statements.

17

PBF ENERGY COMPANY LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(unaudited, in millions, except unit data) 

	Series A			Series C			Accumulated Other Comprehensive Income (Loss)		Retained Earnings (Accumulated Deficit)		Noncontrolling Interest		Treasury Stock		Total Member’s Equity
	Units	Amount		Units	Amount
Balance, December 31, 2021	927,990	$	17.6	120,340,808	$	2,245.0	$	20.3	$	(390.9)	$	511.2	$	(169.1)	$	2,234.1
Comprehensive income (loss)	—	—		—	—		(1.6)		1,611.3		37.7		—		1,647.4
Exchange of Series A units for PBF Energy Class A common stock	(35,992)	(0.1)		35,992	0.1		—		—		—		—		—
Distribution to members	—	—		—	—		—		—		(20.1)		—		(20.1)
Stock-based compensation expense	—	—		—	13.2		—		—		3.5		—		16.7
Transactions in connection with stock-based compensation plans	18,459	—		1,634,742	(2.0)		—		—		(1.3)		—		(3.3)
Treasury stock purchases	—	—		(65,910)	1.4		—		—		—		(1.4)		—
Other	—	—		—	—		—		—		0.4		—		0.4
Balance, June 30, 2022	910,457	$	17.5	121,945,632	$	2,257.7	$	18.7	$	1,220.4	$	531.4	$	(170.5)	$	3,875.2
Balance, December 31, 2020	970,647	$	17.6	120,122,872	$	2,220.3	$	(6.1)	$	(690.5)	$	466.1	$	(167.3)	$	1,840.1
Comprehensive income (loss)	—	—		—	—		(0.1)		13.8		41.1		—		54.8
Exchange of Series A units for PBF Energy Class A common stock	(44,355)	(0.2)		44,355	0.2		—		—		—		—		—
Distribution to members	—	—		—	—		—		—		(20.0)		—		(20.0)
Stock-based compensation expense	—	—		—	12.8		—		—		3.8		—		16.6
Transactions in connection with stock-based compensation plans	67,900	0.4		188,722	(0.8)		—		—		(1.0)		—		(1.4)
Treasury stock purchases	—	—		(86,723)	1.2		—		—		—		(1.2)		—
Other	—	—		—	—		—		—		(0.7)		—		(0.7)
Balance, June 30, 2021	994,192	$	17.8	120,269,226	$	2,233.7	$	(6.2)	$	(676.7)	$	489.3	$	(168.5)	$	1,889.4

See notes to condensed consolidated financial statements.

18

PBF ENERGY COMPANY LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)

	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities:
Net income	$	1,649.0	$	54.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	253.0		240.9
Stock-based compensation	18.0		17.8
Change in fair value of catalyst obligations	(2.3)		4.2
Deferred income taxes	(9.3)		(13.8)
Non-cash change in inventory repurchase obligations	(3.4)		42.2
Non-cash lower of cost or market inventory adjustment	—		(669.6)
Change in fair value of contingent consideration	127.9		26.1
Gain on extinguishment of debt	(3.8)		—
Pension and other post-retirement benefit costs	23.8		25.3
Loss (gain) on sale of assets	0.3		(0.6)
Changes in operating assets and liabilities:
Accounts receivable	(689.9)		(494.9)
Inventories	(471.3)		(280.4)
Prepaid and other current assets	(139.1)		(84.0)
Accounts payable	396.8		373.5
Accrued expenses	1,103.0		889.9
Deferred revenue	42.9		(18.4)
Other assets and liabilities	(27.0)		(44.9)
Net cash provided by operating activities	$	2,268.6	$	68.2
Cash flows from investing activities:
Expenditures for property, plant and equipment	(226.5)		(84.6)
Expenditures for deferred turnaround costs	(166.8)		(38.5)
Expenditures for other assets	(43.6)		(16.5)
Net cash used in investing activities	$	(436.9)	$	(139.6)

See notes to condensed consolidated financial statements.

19

PBF ENERGY COMPANY LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(unaudited, in millions)

	Six Months Ended June 30,
	2022		2021
Cash flows from financing activities:
Distributions to PBFX public unitholders	$	(19.6)	$	(19.5)
Distributions to T&M and Collins shareholders	—		(0.7)
Repurchase of 2028 6.00% Senior Notes	(21.1)		—
Repurchase of 2025 7.25% Senior Notes	(4.8)		—
Repayments of revolver borrowings	(900.0)		—
Repayments of PBFX revolver borrowings	(70.0)		(40.0)
Payments of contingent consideration	(2.7)		(12.2)
Repayments of PBF Rail Term Loan	—		(3.7)
Payments on financing leases	(5.7)		(7.1)
Proceeds from insurance premium financing	32.4		28.0
Affiliate note payable with PBF Energy Inc.	(1.8)		(1.0)
Deferred financing costs and other	(37.1)		(2.3)
Net cash used in financing activities	(1,030.4)		(58.5)
Net change in cash and cash equivalents	801.3		(129.9)
Cash and cash equivalents, beginning of period	1,339.8		1,607.3
Cash and cash equivalents, end of period	$	2,141.1	$	1,477.4
Supplemental cash flow disclosures
Non-cash activities:
Accrued and unpaid capital expenditures	$	119.4	$	48.0
Assets acquired or remeasured under operating and financing leases	30.1		(127.9)
Cash paid during the period for:
Interest (net of capitalized interest of $9.3 million and $4.9 million in 2022 and 2021, respectively)	$	150.5	$	152.4
Income taxes	1.5		0.6

See notes to condensed consolidated financial statements.

20

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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”), which has 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 Condensed Consolidated Financial Statements representing the economic interests of PBF LLC’s members other than PBF Energy (refer to “Note 9 - Equity”).

PBF Energy holds a 99.3% economic interest in PBF LLC as of June 30, 2022 through its ownership of PBF LLC Series C Units, which are held solely by PBF Energy. Holders of PBF LLC Series A Units, which are held by parties other than PBF Energy (“the members of PBF LLC other than PBF Energy”), hold the remaining 0.7% economic interest in PBF LLC. The amended and restated limited liability company agreement of PBF LLC provides that any PBF LLC Series A Units acquired by PBF Energy will automatically be reclassified as PBF LLC Series C Units in connection with such acquisition. PBF LLC, together with its consolidated subsidiaries, owns and operates oil refineries and related facilities in North America.

As of June 30, 2022, PBF LLC also held a 47.7% limited partner interest in PBF Logistics LP (“PBFX”), a publicly-traded master limited partnership (“MLP”) (refer to “Note 2 - PBF Logistics LP”). PBF Energy, through its ownership of PBF LLC, consolidates the financial results of PBFX and its subsidiaries and records a noncontrolling interest in its consolidated financial statements representing the economic interests of PBFX’s unitholders other than PBF LLC (refer to “Note 9 - Equity”). Collectively, PBF Energy and its consolidated subsidiaries, are referred to hereinafter as the “Company” unless the context otherwise requires. Discussions or areas of the Notes to Condensed Consolidated Financial Statements that either apply only to PBF Energy or PBF LLC are clearly noted in such footnotes.

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 accounting principles generally accepted in the United States of America (“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 Financial Statements should be read in conjunction with the PBF Energy and PBF LLC financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2021. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year.

Recently Adopted Accounting Guidance

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the effects of reference rate reform on financial reporting”. The amendments in this ASU provide optional guidance to alleviate the burden in accounting for reference rate reform, by allowing certain expedients and exceptions in applying GAAP to contracts, hedging relationships and other transactions affected by the expected market transition from London Interbank Offered Rate (“LIBOR”) and other interbank rates. The Company’s adoption of this guidance did not have, and is not anticipated to have, a material impact on its Consolidated Financial Statements and related disclosures.

21

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. PBF LOGISTICS LP

PBFX is a fee-based, growth-oriented, publicly traded MLP that owns and operates crude oil and refined products terminals, pipelines, storage facilities and similar logistics assets. PBFX engages in the processing of crude oil and the receiving, handling, storage and transferring of crude oil, refined products, natural gas and intermediates from sources located throughout the United States and Canada for PBF Energy in support of its refineries, as well as for third-party customers. As of June 30, 2022, a substantial majority of PBFX’s revenues are derived from long-term, fee-based commercial agreements with PBF Holding Company LLC (“PBF Holding”), which include minimum volume commitments for receiving, handling, storing and transferring crude oil, refined products and natural gas. PBF Energy also has agreements with PBFX that establish fees for certain general and administrative services and operational and maintenance services provided by PBF Holding to PBFX. These transactions, other than those with third parties, are eliminated by PBF Energy and PBF LLC in consolidation.

PBFX, a variable interest entity, is consolidated by PBF Energy through its ownership of PBF LLC. PBF LLC, through its ownership of PBF Logistics GP LLC (“PBF GP”), has the sole ability to direct the activities of PBFX that most significantly impact its economic performance. PBF LLC is considered to be the primary beneficiary of PBFX for accounting purposes.

With respect to distributions paid during the six months ended June 30, 2022, PBFX paid a distribution on outstanding common units of $0.30 per unit on March 10, 2022 and $0.30 per unit on May 26, 2022 of which $18.0 million was distributed to PBF LLC and the balance was distributed to its public unitholders.

3. CURRENT EXPECTED CREDIT LOSSES

Credit Losses

The Company has exposure to credit losses primarily through its sales of refined products. The Company evaluates creditworthiness on an individual customer basis. The Company utilizes a financial review model for purposes of evaluating creditworthiness which is based on information from financial statements and credit reports. The financial review model enables the Company to assess the customer’s risk profile and determine credit limits on the basis of their financial strength, including but not limited to, their liquidity, leverage, debt serviceability, longevity and how they pay their bills. The Company may require security in the form of letters of credit or cash payments in advance of product delivery for certain customers that are deemed higher risk.

The Company’s payment terms on its trade receivables are relatively short, generally 30 days or less for a substantial majority of its refined products. As a result, the Company’s collection risk is mitigated to a certain extent by the fact that sales are collected in a relatively short period of time, allowing for the ability to reduce exposure on defaults if collection issues are identified. Notwithstanding, the Company reviews each customer’s credit risk profile at least annually or more frequently if warranted.

The Company performs a quarterly allowance for doubtful accounts analysis to assess whether an allowance needs to be recorded for any outstanding trade receivables. In estimating credit losses, management reviews accounts that are past due, have known disputes or have experienced any negative credit events that may result in future collectability issues. There was no allowance for doubtful accounts recorded as of June 30, 2022 or December 31, 2021.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. INVENTORIES

Inventories consisted of the following:

June 30, 2022
(in millions)	Titled Inventory		Inventory Intermediation Agreement		Total
Crude oil and feedstocks	$	1,232.4	$	220.0	$	1,452.4
Refined products and blendstocks	1,026.7		352.2		1,378.9
Warehouse stock and other	145.0		—		145.0
	$	2,404.1	$	572.2	$	2,976.3
Lower of cost or market adjustment	—		—		—
Total inventories	$	2,404.1	$	572.2	$	2,976.3

December 31, 2021
(in millions)	Titled Inventory		Inventory Intermediation Agreement		Total
Crude oil and feedstocks	$	953.5	$	151.4	$	1,104.9
Refined products and blendstocks	964.6		293.8		1,258.4
Warehouse stock and other	141.8		—		141.8
	$	2,059.9	$	445.2	$	2,505.1
Lower of cost or market adjustment	—		—		—
Total inventories	$	2,059.9	$	445.2	$	2,505.1

On October 25, 2021, PBF Holding and its subsidiaries, Delaware City Refining Company LLC, Paulsboro Refining Company LLC and Chalmette Refining, L.L.C. (“Chalmette Refining”) (collectively, the “PBF Entities”), entered into a third amended and restated inventory intermediation agreement (the “Third Inventory Intermediation Agreement”) with J. Aron & Company, a subsidiary of The Goldman Sachs Group, Inc. (“J. Aron”), pursuant to which the terms of the existing inventory intermediation agreements were amended and restated in their entirety, including, among other things, pricing and an extension of terms. The Third Inventory Intermediation Agreement extends the term to December 31, 2024, which term may be further extended by mutual consent of the parties to December 31, 2025. On May 25, 2022, the PBF Entities entered into an amendment of the Third Inventory Intermediation Agreement to amend certain provisions thereof that related to and were impacted by amendments made on May 25, 2022 to the Revolving Credit Agreement (as defined below).

Pursuant to the Third Inventory Intermediation Agreement, J. Aron will continue to purchase and hold title to certain inventory, including crude oil, intermediate and certain finished products (the “J. Aron Products”) purchased or produced by the Paulsboro and Delaware City refineries (and, at the election of the PBF Entities, the Chalmette refinery) (the "Refineries") and delivered into storage tanks at the Refineries (the "Storage Tanks"). The J. Aron Products are sold back to the Company as the J. Aron Products are discharged out of the Storage Tanks. These purchases and sales are settled daily, and pricing is trued-up monthly at the market prices related to those J. Aron Products. These transactions are considered to be made in contemplation of each other and, accordingly, do not result in the recognition of a sale when title passes from the Refineries to J. Aron. Additionally, J. Aron has the right to store the J. Aron Products purchased in Storage Tanks under the Third Inventory Intermediation Agreement and will retain these storage rights for the term of the agreement. PBF Holding continues to market and sell the J. Aron Products independently to third parties.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

At June 30, 2022 the replacement value of inventories exceeded the last-in, first-out (“LIFO”) carrying value. There was no lower of cost or market (“LCM”) inventory reserve at June 30, 2022 or December 31, 2021.

At June 30, 2021, the replacement value of inventories exceeded the LIFO carrying value. During the three months ended June 30, 2021, the Company recorded an adjustment to value its inventories to the lower of cost or market which increased income from operations by $264.0 million, reflecting no LCM inventory reserve at June 30, 2021 in comparison with an LCM reserve of $264.0 million at March 31, 2021. During the six months ended June 30, 2021, the company recorded an adjustment to value its inventories to the lower of cost or market which increased income from operations by $669.6 million, reflecting no LCM inventory reserve at June 30, 2021 in comparison with an LCM inventory reserve of $669.6 million at December 31, 2020.

5. ACCRUED EXPENSES

Accrued expenses consisted of the following:

PBF Energy (in millions)	June 30, 2022		December 31, 2021
Inventory-related accruals	$	1,534.6	$	959.9
Renewable energy credit and emissions obligations (a)	1,325.6		953.9
Inventory intermediation agreement (b)	365.0		280.1
Accrued salaries and benefits	120.8		59.5
Excise and sales tax payable	116.0		112.7
Accrued transportation costs	110.6		91.0
Contingent consideration	91.4		2.9
Accrued utilities	74.5		73.0
Accrued capital expenditures	66.4		62.8
Accrued income tax payable	64.1		—
Accrued refinery maintenance and support costs	39.2		55.8
Accrued interest	38.1		37.7
Environmental liabilities	14.4		14.9
Current finance lease liabilities	11.4		11.1
Customer deposits	5.1		3.5
Other	45.1		21.6
Total accrued expenses	$	4,022.3	$	2,740.4

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PBF LLC (in millions)	June 30, 2022		December 31, 2021
Inventory-related accruals	$	1,534.6	$	959.9
Renewable energy credit and emissions obligations (a)	1,325.6		953.9
Inventory intermediation agreement (b)	365.0		280.1
Accrued salaries and benefits	120.8		59.5
Excise and sales tax payable	116.0		112.7
Accrued transportation costs	110.6		91.0
Accrued interest	91.4		86.0
Contingent consideration	91.4		2.9
Accrued utilities	74.5		73.0
Accrued capital expenditures	66.4		62.8
Accrued refinery maintenance and support costs	39.2		55.8
Environmental liabilities	14.4		14.9
Current finance lease liabilities	11.4		11.1
Customer deposits	5.1		3.5
Other	47.2		25.5
Total accrued expenses	$	4,013.6	$	2,792.6

______________________

(a) The Company is subject to obligations to purchase Renewable Identification Numbers (“RINs”) required to comply with the Renewable Fuel Standard. The Company’s overall RINs obligation is based on a percentage of domestic shipments of on-road fuels as established by Environmental Protection Agency. To the degree the Company is unable to blend the required amount of biofuels to satisfy its 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 and other current assets when the amount of RINs earned and purchased is greater than the RINs liability. In addition, the Company is subject to obligations to comply with federal and state legislative and regulatory measures, including regulations in the state of California pursuant to Assembly Bill 32 (“AB 32”), to address environmental compliance and greenhouse gas and other emissions. These requirements include incremental costs to operate and maintain our facilities as well as to implement and manage new emission controls and programs. Renewable energy credit and emissions obligations fluctuate with the volume of applicable product sales and timing of credit purchases. The Company enters into forward purchase commitments in order to acquire its renewable energy and emissions credits at fixed prices. As of June 30, 2022, the Company had entered into $899.4 million of such forward purchase commitments with respect to its total accrued renewable energy and emissions obligations. Currently, our obligations are anticipated to require settlement in 2023. The Company’s AB 32 liability is part of a triennial period program which will be settled through 2024.

(b) The Company has the obligation to repurchase the J. Aron Products that are held in its Storage Tanks in accordance with the Inventory Intermediation Agreement with J. Aron. As of June 30, 2022 and December 31, 2021, a liability is recognized for the Inventory Intermediation Agreement and is recorded at market price for the J. Aron owned inventory held in the Company’s Storage Tanks, with any change in the market price being recorded in Cost of products and other.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6. CREDIT FACILITIES AND DEBT

Debt outstanding consists of the following:

(in millions)	June 30, 2022		December 31, 2021
2025 Senior Secured Notes (1)	$	1,250.0	$	1,250.0
2028 Senior Notes	801.6		826.5
2025 Senior Notes	664.5		669.5
PBFX 2023 Senior Notes (2)	525.0		525.0
Revolving Credit Facility	—		900.0
PBFX Revolving Credit Facility	30.0		100.0
Catalyst financing arrangements	56.2		58.4
	3,327.3		4,329.4
Less — Current debt (1)	(1,256.6)		—
Unamortized premium	1.0		1.4
Unamortized deferred financing costs	(59.0)		(35.0)
Long-term debt	$	2,012.7	$	4,295.8

(1) On July 11, 2022, the Company fully redeemed all of the $1,250.0 million in aggregate principal amount outstanding of its 9.25% senior secured notes due 2025 (the “2025 Senior Secured Notes”); as such, as of June 30, 2022 this amount was classified as Current debt in the Condensed Consolidated Balance Sheets. Refer to “Note 17 - Subsequent Events” for more details.

(2) PBFX’s 6.875% senior notes are due May 2023. They are included in Long-term debt as of June 30, 2022 as the Company has the ability and intent to refinance this debt through availability under other credit facilities in the event the debt is not renewed at maturity.

PBF Holding Revolving Credit Facility

On May 25, 2022, PBF Holding and certain of its wholly-owned subsidiaries, as borrowers or subsidiary guarantors, entered into an amendment of its existing asset-based revolving credit agreement (the “Revolving Credit Agreement”), among PBF Holding, Bank of America, National Association as administrative agent, and certain other lenders. Among other things, the Revolving Credit Agreement amended and extended PBF Holding’s asset-based revolving credit facility (the “Revolving Credit Facility”) through January 2025 and increased the maximum commitment to $4.3 billion through May 2023 (currently set to adjust to $2.75 billion in May 2023 through January 2025). The amendments also redefine certain components of the Borrowing Base (as defined in the Revolving Credit Agreement) to reflect the existence of two tranches, tranche A which is comprised of existing lenders who have not elected to extend and whose commitments retain the existing maturity date under the existing revolving credit agreement of May 2, 2023 (the “Tranche A Commitments”) and tranche B, which is comprised of existing and new lenders whose commitments have an extended maturity date of January 31, 2025 (the “Tranche B Commitments”). The Tranche A Commitments total $1.55 billion and the Tranche B Commitments total $2.75 billion. The amendments also include changes to incorporate the adoption of Secured Overnight Financing Rate (“SOFR”) as a replacement of LIBOR, changes to joint lead arrangers, bookrunners, syndication agents and other titles, and other changes related to the foregoing. In addition, an accordion feature allows for additional Tranche B Commitments of up to an additional $500.0 million plus an amount equal to the Tranche A Commitments for existing Tranche A lenders.

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Borrowings under the Revolving Credit Facility bear interest at the Alternative Base Rate plus the Applicable Margin or at the Term SOFR Rate plus the Applicable Margin (all as defined in the Revolving Credit Agreement). The Applicable Margin ranges from 0.25% to 1.00% for Alternative Base Rate Loans and from 1.25% to 2.00% for Term SOFR Loans, in each case depending on the Company’s corporate credit rating. In addition, the LC Participation Fee ranges from 1.00% to 1.75% depending on the Company’s corporate credit rating and the Fronting Fee is capped at 0.25%.

The Revolving Credit Agreement contains customary covenants and restrictions on the activities of PBF Holding and its subsidiaries, including, but not limited to, limitations on incurring additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers and acquisitions, prepayment of other debt, distributions, dividends and the repurchase of capital stock, transactions with affiliates and the ability of PBF Holding to change the nature of its business or its fiscal year; all as defined in the Revolving Credit Agreement.

In addition, the Revolving Credit Agreement has a financial covenant which requires that if at any time Excess Availability, as defined in the Revolving Credit Agreement, is less than the greater of (i) 10% of the lesser of the then existing Borrowing Base and the then aggregate Revolving Commitments of the Lenders (the “Financial Covenant Testing Amount”), and (ii) $100.0 million, and until such time as Excess Availability is greater than the Financial Covenant Testing Amount and $100.0 million for a period of 12 or more consecutive days, PBF Holding will not permit the Consolidated Fixed Charge Coverage Ratio, as defined in the Revolving Credit Agreement and determined as of the last day of the most recently completed quarter, to be less than 1 to 1. As of June 30, 2022, the Company is in compliance with all covenants in the Revolving Credit Agreement, including financial covenants.

PBF Holding’s obligations under the Revolving Credit Facility are (a) guaranteed by each of its domestic operating subsidiaries that are not Excluded Subsidiaries (as defined in the Revolving Credit Agreement) and (b) secured by a lien on (i) PBF LLC’s equity interest in PBF Holding and (ii) certain assets of PBF Holding and the subsidiary guarantors, including all deposit accounts (other than zero balance accounts, cash collateral accounts, trust accounts and/or payroll accounts, all of which are excluded from the definition of collateral), all accounts receivable, all hydrocarbon inventory (other than the J. Aron Products owned by J. Aron pursuant to the Third Inventory Intermediation Agreement) and to the extent evidencing, governing, securing or otherwise related to the foregoing, all general intangibles, chattel paper, instruments, documents, letter of credit rights and supporting obligations; and all products and proceeds of the foregoing.

Extinguishment of Debt

During the three months ended June 30, 2022, the Company made a number of open market repurchases of its 6.00% senior unsecured notes due 2028 (the “2028 Senior Notes”) and 7.25% senior unsecured notes due 2025 (the “2025 Senior Notes”) that resulted in the extinguishment of $24.9 million in principal of the 2028 Senior Notes and $5.0 million in principal of the 2025 Senior Notes. Total cash consideration paid to repurchase the principal amount outstanding of the 2028 Senior Notes and the 2025 Senior Notes, excluding accrued interest, totaled $25.9 million and the Company recognized a $3.8 million gain on the extinguishment of debt during the three and six months ended June 30, 2022.

7. AFFILIATE NOTE PAYABLE - PBF LLC

As of June 30, 2022 and December 31, 2021, PBF LLC had an outstanding note payable with PBF Energy for an aggregate principal amount of $373.4 million and $375.2 million, respectively. The note payable has a maturity date of April 2030, an annual interest rate of 2.5% and may be prepaid in whole or in part at any time, at the option of PBF LLC without penalty or premium.

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

8. COMMITMENTS AND CONTINGENCIES

In the ordinary conduct of the Company’s business, the Company is from time to time subject to lawsuits, investigations and claims, including class action proceedings, mass tort actions, tort actions, environmental claims and employee-related matters. The outcome of these matters cannot always be predicted accurately, but the Company accrues liabilities for these matters if the Company has determined that it is probable a loss has been incurred and the loss can be reasonably estimated. For such ongoing matters for which we have not recorded a liability but losses are reasonably possible, we are unable to estimate a range of possible losses at this time due to various reasons that may include but are not limited to, matters being in an early stage and not fully developed through pleadings, discovery or court proceedings, number of potential claimants being unknown or uncertainty regarding a number of different factors underlying the potential claims. However, the ultimate resolution of one or more of these contingencies could result in an adverse outcome that may have a material effect on our financial position, results of operations or cash flows.

Environmental Matters

The Company’s refineries, pipelines and related operations 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 (including in response to the potential impacts of climate change), 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.

These laws and permits raise potential exposure to future claims and lawsuits involving environmental and safety matters which could include soil and water contamination, air pollution, personal injury and property damage allegedly caused by substances which the Company manufactured, handled, used, released or disposed of, transported, or that relate to pre-existing conditions for which the Company has assumed responsibility. The Company believes that its current operations are in compliance with existing environmental and safety requirements. However, there have been and will continue to be ongoing discussions about environmental and safety matters between the Company and federal and state authorities, including notices of violations, citations and other enforcement actions, some of which have resulted or may result in changes to operating procedures and in capital expenditures. While it is often difficult to quantify future environmental or safety related expenditures, the Company anticipates that continuing capital investments and changes in operating procedures will be required for the foreseeable future to comply with existing and new requirements, as well as evolving interpretations and more strict enforcement of existing laws and regulations.

In connection with the acquisition of the Torrance refinery and related logistics assets, the Company assumed certain pre-existing environmental liabilities. The estimated costs related to these remediation obligations totaled $114.5 million as of June 30, 2022 ($118.5 million as of December 31, 2021), and related primarily to remediation obligations to address existing soil and groundwater contamination and the related monitoring and clean-up activities. Costs related to these obligations are reassessed periodically or when changes to our remediation approach are identified. The current portion of the environmental liability is recorded in Accrued expenses and the non-current portion is recorded in Other long-term liabilities.

The aggregate environmental liability reflected in the Company’s Condensed Consolidated Balance Sheets was $156.1 million and $157.0 million at June 30, 2022 and December 31, 2021, respectively, of which $141.7 million and $142.1 million, respectively, were classified as Other long-term liabilities. These liabilities include remediation and monitoring costs expected to be incurred over an extended period of time. Estimated liabilities could increase in the future when the results of ongoing investigations become known, are considered probable and can be reasonably estimated.

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contingent Consideration

In connection with the acquisition of the Martinez refinery and related logistics assets, the sale and purchase agreement dated June 11, 2019 includes an earn-out provision based on certain earnings thresholds of the Martinez refinery. Pursuant to the agreement, the Company will make payments to the Seller based on future earnings at the Martinez refinery in excess of certain thresholds, as defined in the agreement, for a period of up to four years following the acquisition closing date (the “Martinez Contingent Consideration”). The Company recorded the acquisition date fair value of the earn-out provision as contingent consideration within “Other long-term liabilities” within the Company’s Condensed Consolidated Balance Sheets. Subsequent changes in the fair value of the Martinez Contingent Consideration are recorded in the Condensed Consolidated Statements of Operations. The fair value of the Martinez Contingent Consideration was estimated to be $157.1 million as of June 30, 2022 (of which $90.9 million is included within “Accrued expenses”) and $29.4 million as of December 31, 2021 (all of which was included within “Other long-term liabilities”) on the Company’s Condensed Consolidated Balance Sheets.

In connection with the PBFX acquisition of CPI Operations LLC from Crown Point International LLC (“Crown Point”) in October 2018, the purchase and sale agreement between PBFX and Crown Point included an earn-out provision related to an existing commercial agreement with a third-party, based on the future results of certain of the acquired idled assets (the “PBFX Contingent Consideration”). PBFX and Crown Point will share equally in the future operating profits of the restarted assets, as defined in the purchase and sale agreement, over a contractual term of up to three years starting in 2019. The PBFX Contingent Consideration recorded was $0.5 million and $2.9 million as of June 30, 2022 and December 31, 2021, respectively, representing the present value of expected future payments. The short-term PBFX Contingent Consideration is included within “Accrued expenses” on the Company’s Condensed Consolidated Balance Sheets.

Tax Receivable Agreement

PBF Energy entered into a tax receivable agreement with the PBF LLC Series A and PBF LLC Series B unitholders (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 benefits 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 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 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, PBF Holding or PBFX. In general, PBF Energy expects to obtain funding for these annual payments from PBF LLC, primarily through tax distributions, which PBF LLC makes on a pro-rata basis to its owners. Such owners include PBF Energy, which holds a 99.3% interest in PBF LLC as of June 30, 2022 (99.2% as of December 31, 2021). PBF LLC generally obtains funding to pay its tax distributions by causing PBF Holding to distribute cash to PBF LLC and from distributions it receives from PBFX.

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2022 and December 31, 2021, the Company recognized liabilities of $334.8 million and $48.3 million related to the Tax Receivable Agreement obligation, reflecting the estimate of the undiscounted amounts that PBF Energy expects to pay under the agreement, net of the impact of any deferred tax asset valuation allowance recognized in accordance with FASB Accounting Standards Codification (“ASC”) 740, Income Taxes. As future taxable income is recognized, increases in our Tax Receivable Agreement liability may be necessary in conjunction with the revaluation of deferred tax assets. Refer to “Note 12 - Income Taxes” for more details.

9. EQUITY

Noncontrolling Interest in PBF LLC

PBF Energy is the sole managing member of, and has a controlling interest in, PBF LLC. 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. PBF Energy’s equity interest in PBF LLC was approximately 99.3% and 99.2% as of June 30, 2022 and December 31, 2021, respectively.

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 Condensed Consolidated Statements of Operations includes 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 Condensed Consolidated Balance Sheets reflects the portion of net assets of PBF Energy attributable to the members of PBF LLC other than PBF Energy.

The noncontrolling interest ownership percentages in PBF LLC as of December 31, 2021 and June 30, 2022 are calculated as follows:

	Holders of PBF LLC Series A Units	Outstanding Shares of PBF Energy Class A Common Stock	Total *
December 31, 2021	927,990	120,319,577	121,247,567
	0.8%	99.2%	100.0%
June 30, 2022	910,457	121,924,401	122,834,858
	0.7%	99.3%	100.0%

——————————

*    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.

Noncontrolling Interest in PBFX

PBF LLC held a 47.7% limited partner interest in PBFX with the remaining 52.3% limited partner interest owned by the public common unitholders as of June 30, 2022. PBF LLC is also the sole member of PBF GP, the general partner of PBFX.

PBF Energy, through its ownership of PBF LLC, consolidates the financial results of PBFX, and records a noncontrolling interest for the economic interest in PBFX held by the public common unitholders. Noncontrolling interest on the Condensed Consolidated Statements of Operations includes the portion of net income or loss attributable to the economic interest in PBFX held by the public common unitholders of PBFX other than PBF Energy (through its ownership in PBF LLC). Noncontrolling interest on the Condensed Consolidated Balance Sheets includes the portion of net assets of PBFX attributable to the public common unitholders of PBFX.

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The noncontrolling interest ownership percentages in PBFX as of December 31, 2021 and June 30, 2022 are calculated as follows:

	Units of PBFX Held by the Public	Units of PBFX Held by PBF LLC	Total
December 31, 2021	32,621,013	29,953,631	62,574,644
	52.1%	47.9%	100.0%
June 30, 2022	32,778,447	29,953,631	62,732,078
	52.3%	47.7%	100.0%

Noncontrolling Interest in PBF Holding

In connection with the acquisition of the Chalmette refinery, PBF Holding records noncontrolling interests in two subsidiaries of Chalmette Refining. PBF Holding, through Chalmette Refining, owns an 80% ownership interest in both Collins Pipeline Company and T&M Terminal Company. In the three and six months ended June 30, 2022 the Company recorded noncontrolling interest in the losses of these subsidiaries of $(0.6) million and $(1.7) million, respectively. In the three and six months ended June 30, 2021 the Company recorded noncontrolling interest in the earnings of these subsidiaries of $2.3 million and $2.4 million, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Changes in Equity and Noncontrolling Interests

The following tables summarize the changes in equity for the controlling and noncontrolling interests of PBF Energy for the six months ended June 30, 2022 and 2021, respectively:

PBF Energy (in millions)	PBF Energy Inc. Equity		Noncontrolling Interest in PBF LLC		Noncontrolling Interest in PBF Holding		Noncontrolling Interest in PBFX		Total Equity
Balance at January 1, 2022	$	1,926.2	$	95.4	$	12.2	$	499.0	$	2,532.8
Comprehensive income (loss)	1,181.0		12.2		(1.7)		39.4		1,230.9
Dividends and distributions	—		—		—		(20.1)		(20.1)
Stock-based compensation expense	13.2		—		—		3.5		16.7
Transactions in connection with stock-based compensation plans	27.1		—		—		(1.3)		25.8
Exchanges of PBF Energy Company LLC Series A Units for PBF Energy Class A common stock	0.1		(0.1)		—		—		—
Other	—		—		0.4		—		0.4
Balance at June 30, 2022	$	3,147.6	$	107.5	$	10.9	$	520.5	$	3,786.5

PBF Energy (in millions)	PBF Energy Inc. Equity		Noncontrolling Interest in PBF LLC		Noncontrolling Interest in PBF Holding		Noncontrolling Interest in PBFX		Total Equity
Balance at January 1, 2021	$	1,642.8	$	93.4	$	10.6	$	455.5	$	2,202.3
Comprehensive income	6.5		—		2.4		38.7		47.6
Dividends and distributions	—		—		(0.7)		(20.0)		(20.7)
Stock-based compensation expense	12.8		—		—		3.8		16.6
Transactions in connection with stock-based compensation plans	(0.8)		—		—		(1.0)		(1.8)
Exchanges of PBF Energy Company LLC Series A Units for PBF Energy Class A common stock	0.2		(0.2)		—		—		—
Other	2.9		—		—		—		2.9
Balance at June 30, 2021	$	1,664.4	$	93.2	$	12.3	$	477.0	$	2,246.9

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following tables summarize the changes in equity for the controlling and noncontrolling interests of PBF LLC for the six months ended June 30, 2022 and 2021, respectively:

PBF LLC (in millions)	PBF Energy Company LLC Equity		Noncontrolling Interest in PBF Holding		Noncontrolling Interest in PBFX		Total Equity
Balance at January 1, 2022	$	1,722.9	$	12.2	$	499.0	$	2,234.1
Comprehensive income (loss)	1,609.7		(1.7)		39.4		1,647.4
Dividends and distributions	—		—		(20.1)		(20.1)
Stock-based compensation expense	13.2		—		3.5		16.7
Transactions in connection with stock-based compensation plans	(2.0)		—		(1.3)		(3.3)
Other	—		0.4		—		0.4
Balance at June 30, 2022	$	3,343.8	$	10.9	$	520.5	$	3,875.2

PBF LLC (in millions)	PBF Energy Company LLC Equity		Noncontrolling Interest in PBF Holding		Noncontrolling Interest in PBFX		Total Equity
Balance at January 1, 2021	$	1,374.0	$	10.6	$	455.5	$	1,840.1
Comprehensive income	13.7		2.4		38.7		54.8
Dividends and distributions	—		(0.7)		(20.0)		(20.7)
Stock-based compensation expense	12.8		—		3.8		16.6
Transactions in connection with stock-based compensation plans	(0.4)		—		(1.0)		(1.4)
Balance at June 30, 2021	$	1,400.1	$	12.3	$	477.0	$	1,889.4

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

10. EMPLOYEE BENEFIT PLANS

The components of net periodic benefit cost related to the Company’s defined benefit plans consisted of the following:

(in millions)	Three Months Ended June 30,				Six Months Ended June 30,
Pension Benefits	2022		2021		2022		2021
Components of net periodic benefit cost:
Service cost	$	13.9	$	14.3	$	27.8	$	28.7
Interest cost	1.9		1.4		3.9		2.7
Expected return on plan assets	(4.3)		(3.5)		(8.7)		(7.1)
Net periodic benefit cost	$	11.5	$	12.2	$	23.0	$	24.3

(in millions)	Three Months Ended June 30,				Six Months Ended June 30,
Post-Retirement Medical Plan	2022		2021		2022		2021
Components of net periodic benefit cost:
Service cost	$	0.2	$	0.1	$	0.4	$	0.5
Interest cost	0.2		—		0.3		0.1
Amortization of prior service cost and actuarial loss	—		0.2		0.1		0.4
Net periodic benefit cost	$	0.4	$	0.3	$	0.8	$	1.0

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11. REVENUES

As described in “Note 15 - Segment Information”, the Company’s business consists of the Refining segment and Logistics segment. The following table provides information relating to the Company’s revenues for each product or group of similar products or services by segment for the periods presented.

	Three Months Ended June 30,
(in millions)	2022		2021
Refining Segment:
Gasoline and distillates	$	12,520.9	$	5,990.6
Asphalt and blackoils	667.2		298.4
Feedstocks and other	451.9		290.6
Chemicals	291.2		230.4
Lubricants	132.8		73.2
Total	14,064.0		6,883.2
Logistics Segment:
Logistics	93.4		89.8
Total revenues prior to eliminations	14,157.4		6,973.0
Elimination of intercompany revenues	(79.7)		(75.1)
Total Revenues	$	14,077.7	$	6,897.9
	Six Months Ended June 30,
(in millions)	2022		2021
Refining Segment:
Gasoline and distillates	$	20,558.6	$	10,220.7
Asphalt and blackoils	1,126.1		513.8
Feedstocks and other	786.8		502.9
Chemicals	498.2		425.1
Lubricants	222.5		133.9
Total	23,192.2		11,796.4
Logistics Segment:
Logistics	182.8		177.3
Total revenues prior to eliminations	23,375.0		11,973.7
Elimination of intercompany revenues	(155.6)		(151.0)
Total Revenues	$	23,219.4	$	11,822.7

The majority of the Company’s revenues are generated from the sale of refined products reported in the Refining segment. These revenues are largely based on the current spot (market) prices of the products sold, which represent consideration specifically allocable to the products being sold on a given day, and the Company recognizes those revenues upon delivery and transfer of title to the products to our customers. The time at which delivery and transfer of title occurs is the point when the Company’s control of the products is transferred to the Company’s customers and when its performance obligation to its customers is fulfilled. Delivery and transfer of title are specifically agreed to between the Company and customers within the contracts. The Refining segment also has contracts which contain fixed pricing, tiered pricing, minimum volume features with makeup periods, or other factors that have not materially been affected by ASC 606, Revenue from Contracts with Customers.

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company’s Logistics segment revenues are generated by charging fees for crude oil and refined products terminaling, storage and pipeline services based on the greater of contractual minimum volume commitments, as applicable, or the delivery of actual volumes based on contractual rates applied to throughput or storage volumes. A majority of the Company’s logistics revenues are generated by intercompany transactions and are eliminated in consolidation.

Deferred Revenue

The Company records deferred revenue when cash payments are received or are due in advance of performance, including amounts which are refundable. Deferred revenue was $85.6 million and $42.7 million as of June 30, 2022 and December 31, 2021, respectively. Fluctuations in the deferred revenue balance are primarily driven by the timing and extent of cash payments received or due in advance of satisfying the Company’s performance obligations.

The Company’s payment terms vary by type and location of customers and the products offered. The period between invoicing and when payment is due is not significant (i.e. generally within two months). For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer.

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

12. INCOME TAXES

PBF Energy is required to file federal and applicable state corporate income tax returns and recognizes income taxes on its pre-tax income (loss), which to-date has consisted primarily of its share of PBF LLC’s pre-tax income (loss) (approximately 99.3% and 99.2% as of June 30, 2022 and December 31, 2021, respectively). PBF LLC is organized as a limited liability company and PBFX is an MLP, both of which are treated as “flow-through” entities for federal income tax purposes and therefore are not subject to income taxes apart from the income tax attributable to the two subsidiaries acquired in connection with the acquisition of Chalmette Refining and PBF Holding’s wholly-owned Canadian subsidiary, PBF Energy Limited, that are treated as C-Corporations for income tax purposes, with the tax provision calculated based on the effective tax rate for the periods presented.

Valuation Allowance

The Company assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of existing deferred tax assets. Negative evidence evaluated as part of this assessment includes cumulative losses incurred over a three-year period. Such objective evidence could limit PBF Energy’s ability to consider other subjective evidence, such as PBF Energy’s projections for future taxable income as market conditions, commodity prices and demand for refined products normalize.

On the basis of this evaluation, a valuation allowance was recorded to recognize only the portion of deferred tax assets that are more likely than not to be realized. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryover period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as PBF Energy’s projections for future taxable income.

The Company evaluated all available positive and negative evidence and determined that a significant portion of the $308.5 million valuation allowance, as of December 31, 2021, associated with deferred tax assets should be released because the Company believed that it had become more likely than not that the deferred tax assets would be realized. This resulted in the release of approximately $197.6 million of the valuation allowance in the six months ended June 30, 2022. The remaining portion of the valuation allowance will be released through the remaining quarters of 2022. In the Company' s evaluation of the need for and amount of a valuation allowance on its deferred tax assets at June 30, 2022, the Company placed the most weight on objectively verifiable direct evidence, including its recent and historical operating results and the significant improvement in its operating profitability. The specific positive factors and evidence considered in the realizability of its deferred tax assets included the cumulative pre-tax income that the Company generated over the three year period ended June 30, 2022. While the Company experienced a significant loss for the year ended December 31, 2020, the significant earnings for the three months ended June 30, 2022 have brought the Company into a three year cumulative pre-tax income position as of June 30, 2022.

The Company prepared estimates of the amount of future pre-tax income and the number of years it expects will be required to utilize all net operating loss carryforwards. Although the Company projects to generate positive pre-tax operating income in the future, current taxable income earned to date is sufficient to utilize all of its federal net operating losses (“NOLs”) within the next two years and all of its state NOLs prior to expiration of any state NOL carryforward periods.

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The income tax provision in the PBF Energy Condensed Consolidated Statements of Operations consists of the following: 

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2022		2021		2022		2021
Current income tax expense (benefit)	$	65.0	$	0.3	$	65.0	$	(0.4)
Deferred income tax expense (benefit)	66.3		4.2		60.2		(3.5)
Total income tax expense (benefit)	$	131.3	$	4.5	$	125.2	$	(3.9)

The income tax provision is based on earnings before taxes attributable to PBF Energy and excludes earnings before taxes attributable to noncontrolling interests as such interests are generally not subject to income taxes except as noted above. PBF Energy’s effective income tax rate for the three and six months ended June 30, 2022, was 9.8% and 9.6%, respectively. PBF Energy’s effective income tax rate for the three and six months ended June 30, 2021, was 8.6% and (144.4)%, respectively.

PBF Energy’s effective income tax rate for the three and six months ended June 30, 2022, including the impact of income attributable to noncontrolling interests of $32.1 million and $49.9 million, respectively, was 9.6% and 9.2%, respectively. PBF Energy’s effective income tax rate for the three and six months ended June 30, 2021, including the impact of income attributable to noncontrolling interests of $22.0 million and $41.1 million, respectively, was 6.0% and (8.9)%, respectively.

For the three and six months ended June 30, 2022 and June 30, 2021, the difference between the United States statutory rate and PBF Energy’s effective tax rate was primarily attributable to the changes in the deferred tax asset valuation allowance.

The reported income tax provision in the PBF LLC Condensed Consolidated Statements of Operations consists of the following: 

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2022		2021		2022		2021
Current income tax expense (benefit)	$	—	$	0.1	$	—	$	(1.1)
Deferred income tax benefit	(1.2)		(4.4)		(9.3)		(13.8)
Total income tax benefit	$	(1.2)	$	(4.3)	$	(9.3)	$	(14.9)

The Company has determined there are no material uncertain tax positions as of June 30, 2022. The Company does not have any unrecognized tax benefits.

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

13. 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 June 30, 2022 and December 31, 2021.

The Company has 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. The Company has 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. The Company has no derivative contracts that are subject to master netting arrangements that are reflected gross on the Condensed Consolidated Balance Sheets.

	As of June 30, 2022
	Fair Value Hierarchy						Total Gross Fair Value		Effect of Counter-party Netting	Net Carrying Value on Balance Sheet
(in millions)	Level 1		Level 2		Level 3
Assets:
Money market funds	$	29.3	$	—	$	—	$	29.3	N/A	$	29.3
Commodity contracts	98.4		2.2		—		100.6		(100.6)	—
Derivatives included with inventory intermediation agreement obligations	—		23.1		—		23.1		—	23.1
Liabilities:
Commodity contracts	119.8		—		—		119.8		(100.6)	19.2
Catalyst obligations	—		56.2		—		56.2		—	56.2
Renewable energy credit and emissions obligations	—		1,325.6		—		1,325.6		—	1,325.6
Contingent consideration obligations	—		—		157.6		157.6		—	157.6

	As of December 31, 2021
	Fair Value Hierarchy						Total Gross Fair Value		Effect of Counter-party Netting	Net Carrying Value on Balance Sheet
(in millions)	Level 1		Level 2		Level 3
Assets:
Money market funds	$	270.1	$	—	$	—	$	270.1	N/A	$	270.1
Commodity contracts	71.5		—		—		71.5		(71.5)	—
Derivatives included with inventory intermediation agreement obligations	—		19.7		—		19.7		—	19.7
Liabilities:
Commodity contracts	79.7		3.8		—		83.5		(71.5)	12.0
Catalyst obligations	—		58.4		—		58.4		—	58.4
Renewable energy credit and emissions obligations	—		953.9		—		953.9		—	953.9
Contingent consideration obligations	—		—		32.3		32.3		—	32.3

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

•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 derivatives included with inventory intermediation agreement obligations and the catalyst 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.

•Renewable energy credit and emissions obligations primarily represent our liability for the purchase of (i) biofuel credits (primarily RINs in the U.S.) needed to satisfy our obligation to blend biofuels into the products we produce and (ii) emission credits under the AB 32 and similar programs (collectively, the cap-and-trade systems). To the degree we are unable to blend biofuels (such as ethanol and biodiesel) at percentages required under the biofuel programs, we must purchase biofuel credits to comply with these programs. Under the cap-and-trade systems, we must purchase emission credits to comply with these systems. The liability for environmental credits is in part based on our deficit for such credits as of the balance sheet date, if any, after considering any credits acquired or under contract, and is equal to the product of the credits deficit and the market price of these credits as of the balance sheet date. The environmental credit obligations are categorized in Level 2 of the fair value hierarchy and are measured at fair value using a market approach based on quoted prices from an independent pricing service.

•When applicable, 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 prices used to value these swaps are derived using broker quotes, prices from other third-party sources and other available market based data.

•The contingent consideration obligations at June 30, 2022 and December 31, 2021 are categorized in Level 3 of the fair value hierarchy and are estimated using discounted cash flow models based on management’s estimate of the future cash flows related to the earn-out periods.

Non-qualified pension plan assets are measured at fair value using a market approach based on published net asset values of mutual funds as a practical expedient. As of June 30, 2022 and December 31, 2021, $19.2 million and $20.7 million, respectively, were included within Deferred charges and other assets, net for these non-qualified pension plan assets.

The table below summarizes the changes in fair value measurements categorized in Level 3 of the fair value hierarchy, which primarily includes the change in estimated future earnings related to both the Martinez Contingent Consideration and the PBFX Contingent Consideration:

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2022		2021		2022		2021
Balance at beginning of period	$	80.0	$	30.1	$	32.3	$	12.1
Additions	—		—		—		—
Settlements	—		—		(2.6)		(12.1)
Unrealized loss (gain) included in earnings	77.6		(4.0)		127.9		26.1
Balance at end of period	$	157.6	$	26.1	$	157.6	$	26.1

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

There were no transfers between levels during the three and six months ended June 30, 2022 or the three and six months ended June 30, 2021.

Fair value of debt

The table below summarizes the carrying value and fair value of debt as of June 30, 2022 and December 31, 2021.

	June 30, 2022				December 31, 2021
(in millions)	Carrying value		Fair  value		Carrying  value		Fair value
2025 Senior Secured Notes (a)	$	1,250.0	$	1,307.3	$	1,250.0	$	1,192.7
2028 Senior Notes (a)	801.6		670.0		826.5		520.9
2025 Senior Notes (a)	664.5		621.2		669.5		475.9
PBFX 2023 Senior Notes (a)	525.0		516.9		525.0		513.7
Revolving Credit Facility (b)	—		—		900.0		900.0
PBFX Revolving Credit Facility (b)	30.0		30.0		100.0		100.0
Catalyst financing arrangements (c)	56.2		56.2		58.4		58.4
	3,327.3		3,201.6		4,329.4		3,761.6
Less - Current debt	(1,256.6)		(1,256.6)		—		—
Unamortized premium	1.0		n/a		1.4		n/a
Less - Unamortized deferred financing costs	(59.0)		n/a		(35.0)		n/a
Long-term debt	$	2,012.7	$	1,945.0	$	4,295.8	$	3,761.6

(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 outstanding senior 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 financing arrangements 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 repurchase obligations as the Company’s liability is directly impacted by the change in fair value of the underlying catalyst.

14. DERIVATIVES

The Company uses derivative instruments to mitigate certain exposures to commodity price risk. The Company entered into the Third Inventory Intermediation Agreement that contain purchase obligations for certain volumes of crude oil, intermediates and refined products. The purchase obligations related to crude oil, 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, intermediates and refined products. The level of activity for these derivatives is based on the level of operating inventories.

41

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2022 and December 31, 2021, there were 2,741,075 and 2,081,783 barrels of crude oil and feedstocks outstanding under these derivative instruments designated as fair value hedges, respectively. As of June 30, 2022, there were 2,070,706 barrels of intermediates and refined products (2,070,550 barrels at December 31, 2021) outstanding under these derivative instruments designated as fair value 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 June 30, 2022, there were 37,209,000 barrels of crude oil and 3,695,000 barrels of refined products (36,246,000 and 5,819,000, respectively, as of December 31, 2021), outstanding under short and long term commodity derivative contracts not designated as hedges representing the notional value of the contracts.

The Company also uses derivative instruments to mitigate the risk associated with the price of credits needed to comply with various governmental and regulatory environmental compliance programs. For such contracts that represent derivatives, the Company elects the normal purchase normal sale exception under ASC 815, Derivatives and Hedging, and therefore does not record them at fair value.

The following tables provide information regarding the fair values of derivative instruments as of June 30, 2022 and December 31, 2021, and the line items in the Condensed Consolidated Balance Sheets in which fair values are reflected.

Description	Balance Sheet Location	Fair Value Asset/(Liability)
		(in millions)
Derivatives designated as hedging instruments:
June 30, 2022:
Derivatives included within the inventory intermediation agreement obligations	Accrued expenses	$	23.1
December 31, 2021:
Derivatives included within the inventory intermediation agreement obligations	Accrued expenses	$	19.7
Derivatives not designated as hedging instruments:
June 30, 2022:
Commodity contracts	Accounts receivable	$	(19.2)
December 31, 2021:
Commodity contracts	Accounts receivable	$	(12.0)

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table provides information regarding gains or losses recognized in income on derivative instruments and the line items in the Condensed Consolidated Statements of Operations in which such gains and losses are reflected.

Description	Location of Gain or (Loss) Recognized in  Income on Derivatives	Gain or (Loss) Recognized in Income on Derivatives
		(in millions)
Derivatives designated as hedging instruments:
For the three months ended June 30, 2022:
Derivatives included within the inventory intermediation agreement obligations	Cost of products and other	$	(37.3)
For the three months ended June 30, 2021:
Derivatives included within the inventory intermediation agreement obligations	Cost of products and other	$	(34.2)
For the six months ended June 30, 2022:
Derivatives included within the inventory intermediation agreement obligations	Cost of products and other	$	3.4
For the six months ended June 30, 2021:
Derivatives included within the inventory intermediation agreement obligations	Cost of products and other	$	(42.2)
Derivatives not designated as hedging instruments:
For the three months ended June 30, 2022:
Commodity contracts	Cost of products and other	$	(25.2)
For the three months ended June 30, 2021:
Commodity contracts	Cost of products and other	$	(19.7)
For the six months ended June 30, 2022:
Commodity contracts	Cost of products and other	$	(52.1)
For the six months ended June 30, 2021:
Commodity contracts	Cost of products and other	$	(34.5)
Hedged items designated in fair value hedges:
For the three months ended June 30, 2022:
Crude oil, intermediate and refined product inventory	Cost of products and other	$	37.3
For the three months ended June 30, 2021:
Crude oil, intermediate and refined product inventory	Cost of products and other	$	34.2
For the six months ended June 30, 2022:
Crude oil, intermediate and refined product inventory	Cost of products and other	$	(3.4)
For the six months ended June 30, 2021:
Crude oil, intermediate and refined product inventory	Cost of products and other	$	42.2

The Company had no ineffectiveness related to the fair value hedges for the three and six months ended June 30, 2022 or the three and six months ended June 30, 2021.

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

15. SEGMENT INFORMATION

The Company’s operations are organized into two reportable segments, Refining and Logistics. Operations that are not included in the Refining or Logistics segments are included in Corporate. Intersegment transactions are eliminated in the Condensed Consolidated Financial Statements and are included in the Eliminations column below.

Refining

The Company’s Refining segment includes the operations of its six refineries, including certain related logistics assets that are not owned by PBFX. The Company’s refineries are located in Delaware City, Delaware, Paulsboro, New Jersey, Toledo, Ohio, Chalmette, Louisiana, Torrance, California and Martinez, California. The refineries produce unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products in the United States. The Company purchases crude oil, other feedstocks and blending components from various third-party suppliers. The Company sells products throughout the Northeast, Midwest, Gulf Coast and West Coast of the United States, as well as in other regions of the United States, Canada and Mexico, and is able to ship products to other international destinations.

Logistics

The Company’s Logistics segment is comprised of PBFX, a publicly-traded MLP, formed to own or lease, operate, develop and acquire crude oil and refined products terminals, pipelines, storage facilities and similar logistics assets. PBFX’s assets primarily consist of rail and truck terminals and unloading racks, tank farms and pipelines that 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. PBFX currently does not generate significant third-party revenues and intersegment related-party revenues are eliminated in consolidation. From a PBF Energy and PBF LLC perspective, the Company’s chief operating decision maker evaluates the Logistics segment as a whole without regard to any of PBFX’s individual operating segments.

The Company evaluates the performance of its segments based primarily on income from operations. Income from operations includes those revenues and expenses that are directly attributable to management of the respective segment. The Logistics segment’s revenues include intersegment transactions with the Company’s Refining segment at prices the Company believes are substantially equivalent to the prices that could have been negotiated with unaffiliated parties with respect to similar services. Activities of the Company’s business that are not included in the two operating segments are included in Corporate. Such activities consist primarily of corporate staff operations and other items that are not specific to the normal operations of the two operating segments. The Company does not allocate non-operating income and expense items, including income taxes, to the individual segments. The Refining segment’s operating subsidiaries and PBFX are primarily pass-through entities with respect to income taxes.

Total assets of each segment consist of property, plant and equipment, inventories, cash and cash equivalents, accounts receivable and other assets directly associated with the segment’s operations. Corporate assets consist primarily of non-operating property, plant and equipment and other assets not directly related to the Company’s refinery and logistics operations.

Disclosures regarding the Company’s reportable segments with reconciliations to consolidated totals for the three and six months ended June 30, 2022 and June 30, 2021 are presented below. In connection with certain contributions by PBF LLC to PBFX, the accompanying segment information is retrospectively adjusted to include the historical results of those assets in the Logistics segment for all periods presented prior to such contributions, as applicable.

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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Three Months Ended June 30, 2022
PBF Energy - (in millions)	Refining		Logistics		Corporate		Eliminations		Consolidated Total
Revenues	$	14,064.0	$	93.4	$	—	$	(79.7)	$	14,077.7
Depreciation and amortization expense	111.0		9.1		1.9		—		122.0
Income (loss) from operations	1,883.4		49.3		(226.1)		—		1,706.6
Interest expense, net	5.5		10.2		69.8		—		85.5
Capital expenditures	207.4		1.7		2.3		—		211.4
	Three Months Ended June 30, 2021
	Refining		Logistics		Corporate		Eliminations		Consolidated Total
Revenues	$	6,883.2	$	89.8	$	—	$	(75.1)	$	6,897.9
Depreciation and amortization expense	102.3		9.3		3.3		—		114.9
Income (loss) from operations	146.8		47.8		(47.1)		—		147.5
Interest expense, net	1.7		10.7		68.4		—		80.8
Capital expenditures	75.2		2.2		1.7		—		79.1
	Six Months Ended June 30, 2022
	Refining		Logistics		Corporate		Eliminations		Consolidated Total
Revenues	$	23,192.2	$	182.8	$	—	$	(155.6)	$	23,219.4
Depreciation and amortization expense	219.8		18.6		3.8		—		242.2
Income (loss) from operations	2,029.5		95.7		(327.6)		—		1,797.6
Interest expense, net	8.6		20.3		135.0		—		163.9
Capital expenditures	430.5		3.1		3.3		—		436.9
	Six Months Ended June 30, 2021
	Refining		Logistics		Corporate		Eliminations		Consolidated Total
Revenues	$	11,796.4	$	177.3	$	—	$	(151.0)	$	11,822.7
Depreciation and amortization expense	207.0		18.7		6.7		—		232.4
Income (loss) from operations	232.7		95.7		(123.2)		—		205.2
Interest expense, net	3.5		21.4		136.2		—		161.1
Capital expenditures	133.3		3.5		2.8		—		139.6

	Balance at June 30, 2022
	Refining		Logistics		Corporate		Eliminations		Consolidated Total
Total assets	$	13,069.3	$	867.0	$	86.7	$	(47.3)	$	13,975.7
	Balance at December 31, 2021
	Refining		Logistics		Corporate		Eliminations		Consolidated Total
Total assets	$	10,753.3	$	901.3	$	48.5	$	(61.7)	$	11,641.4

45

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Three Months Ended June 30, 2022
PBF LLC - (in millions)	Refining		Logistics		Corporate		Eliminations		Consolidated Total
Revenues	$	14,064.0	$	93.4	$	—	$	(79.7)	$	14,077.7
Depreciation and amortization expense	111.0		9.1		1.9		—		122.0
Income (loss) from operations	1,883.4		49.3		(225.7)		—		1,707.0
Interest expense, net	5.5		10.2		72.5		—		88.2
Capital expenditures	207.4		1.7		2.3		—		211.4
	Three Months Ended June 30, 2021
	Refining		Logistics		Corporate		Eliminations		Consolidated Total
Revenues	$	6,883.2	$	89.8	$	—	$	(75.1)	$	6,897.9
Depreciation and amortization expense	102.3		9.3		3.3		—		114.9
Income (loss) from operations	146.8		47.8		(46.2)		—		148.4
Interest expense, net	1.7		10.7		70.8		—		83.2
Capital expenditures	75.2		2.2		1.7		—		79.1
	Six Months Ended June 30, 2022
	Refining		Logistics		Corporate		Eliminations		Consolidated Total
Revenues	$	23,192.2	$	182.8	$	—	$	(155.6)	$	23,219.4
Depreciation and amortization expense	219.8		18.6		3.8		—		242.2
Income (loss) from operations	2,029.5		95.7		(326.8)		—		1,798.4
Interest expense, net	8.6		20.3		140.3		—		169.2
Capital expenditures	430.5		3.1		3.3		—		436.9
	Six Months Ended June 30, 2021
	Refining		Logistics		Corporate		Eliminations		Consolidated Total
Revenues	$	11,796.4	$	177.3	$	—	$	(151.0)	$	11,822.7
Depreciation and amortization expense	207.0		18.7		6.7		—		232.4
Income (loss) from operations	232.7		95.7		(122.0)		—		206.4
Interest expense, net	3.5		21.4		141.2		—		166.1
Capital expenditures	133.3		3.5		2.8		—		139.6

	Balance at June 30, 2022
	Refining		Logistics		Corporate		Eliminations		Consolidated Total
Total assets	$	13,069.3	$	867.0	$	53.5	$	(47.3)	$	13,942.5
	Balance at December 31, 2021
	Refining		Logistics		Corporate		Eliminations		Consolidated Total
Total assets	$	10,753.3	$	901.3	$	46.8	$	(61.7)	$	11,639.7

46

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

16. NET INCOME PER SHARE OF PBF ENERGY

The Company grants certain equity-based compensation awards to employees and non-employee directors that are considered to be participating securities. Due to the presence of participating securities, the Company has calculated net income per share of PBF Energy Class A common stock using the two-class method.

The following table sets forth the computation of basic and diluted net income per share of PBF Energy Class A common stock attributable to PBF Energy for the periods presented:

(in millions, except share and per share amounts)	Three Months Ended June 30,				Six Months Ended June 30,
Basic Earnings Per Share:	2022		2021		2022		2021
Allocation of earnings:
Net income attributable to PBF Energy Inc. stockholders	$	1,203.7	$	47.9	$	1,182.6	$	6.6
Less: Income allocated to participating securities	—		—		—		—
Income available to PBF Energy Inc. stockholders - basic	$	1,203.7	$	47.9	$	1,182.6	$	6.6
Denominator for basic net income per Class A common share - weighted average shares	121,268,354		120,230,133		120,886,059		120,211,219
Basic net income attributable to PBF Energy per Class A common share	$	9.93	$	0.40	$	9.78	$	0.05
Diluted Earnings Per Share:
Numerator:
Income available to PBF Energy Inc. stockholders - basic	$	1,203.7	$	47.9	$	1,182.6	$	6.6
Plus: Net income attributable to noncontrolling interest (1)	12.2		0.4		12.2		—
Less: Income tax expense on net income attributable to noncontrolling interest (1)	(3.2)		(0.1)		(3.2)		—
Numerator for diluted net income per PBF Energy Class A common share - net income attributable to PBF Energy Inc. stockholders (1)	$	1,212.7	$	48.2	$	1,191.6	$	6.6
Denominator:(1)
Denominator for basic net income per PBF Energy Class A common share-weighted average shares	121,268,354		120,230,133		120,886,059		120,211,219
Effect of dilutive securities:(2)
Conversion of PBF LLC Series A Units	923,334		994,138		925,649		986,834
Common stock equivalents	3,466,358		691,904		2,599,837		489,183
Denominator for diluted net income per PBF Energy Class A common share-adjusted weighted average shares	125,658,046		121,916,175		124,411,545		121,687,236
Diluted net income attributable to PBF Energy Inc. stockholders per PBF Energy Class A common share	$	9.65	$	0.39	$	9.58	$	0.05

___________________________________________

47

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)    The diluted earnings per share calculation generally assumes the conversion of all outstanding PBF LLC Series A Units to PBF Energy Class A common stock. The net income attributable to PBF Energy used in the numerator of the diluted earnings per share calculation is adjusted to reflect the net income, as well as the corresponding income tax expense (based on a 25.9% estimated annualized statutory corporate tax rate for the three and six months ended June 30, 2022 and a 26.6% estimated annualized statutory corporate tax rate for the three and six months ended June 30, 2021), attributable to the converted units.

(2)    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 performance share 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). Common stock equivalents exclude the effects of performance share units and options and warrants to purchase 3,539,238 and 7,934,448 shares of PBF Energy Class A common stock and PBF LLC Series A units because they are anti-dilutive for the three and six months ended June 30, 2022, respectively. Common stock equivalents exclude the effects of performance share units and options and warrants to purchase 11,091,279 shares of PBF Energy Class A common stock and PBF LLC Series A units because they are anti-dilutive for the three and six months ended June 30, 2021, respectively. For periods showing a net loss, all common stock equivalents and unvested restricted stock are considered anti-dilutive.

48

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

17. SUBSEQUENT EVENTS

PBFX Distributions

On July 28, 2022, the Board of Directors of PBF GP announced a distribution of $0.30 per unit on outstanding common units of PBFX. The distribution is payable on August 25, 2022 to PBFX unitholders of record at the close of business on August 11, 2022.

Extinguishment of Debt

On July 11, 2022, the Company exercised its rights under the indenture governing the 2025 Senior Secured Notes to redeem all of the outstanding 2025 Senior Secured Notes at a price of 104.625% of the aggregate principal amount thereof plus accrued and unpaid interest. The aggregate redemption price for all 2025 Senior Secured Notes approximated $1.3 billion plus accrued and unpaid interest. The 2025 Senior Secured Notes are reflected as Current debt on the Condensed Consolidated Balance Sheets and the redemption was financed using cash on hand as of June 30, 2022. The difference between the carrying value of the 2025 Senior Secured Notes on the date they were redeemed and the amount for which they were redeemed was $70.4 million and will be recorded as a Loss on extinguishment of debt in the Consolidated Statements of Operations in the third quarter of 2022.

In July 2022, the Company settled one of its precious metal financing arrangements at its Torrance refinery with cash on hand as of June 30, 2022. The related financing obligation of approximately $6.7 million is included in Current debt in the Condensed Consolidated Balance Sheets as of June 30, 2022.

Pending Merger with PBFX

On July 27, 2022, PBF Energy and PBF LLC entered into a definitive agreement with PBFX (the “Merger Agreement”) (the Merger Agreement and the transactions contemplated thereby are referred to herein as the “Merger Transaction”) pursuant to which PBF Energy and PBF LLC will acquire all of the publicly held common units in PBFX representing limited partner interests in the MLP not already owned by certain wholly-owned subsidiaries of PBF Energy and its affiliates.

The consideration to the PBFX common unitholders (other than PBF Energy and its affiliates) under the Merger Transaction consists of cash and PBF Energy Class A common stock. The holders of each outstanding PBFX common unit will receive cash consideration of $9.25 and 0.27 shares of PBF Energy Class A common stock for each PBFX common unit. PBF Energy and PBF LLC, as the beneficiary owner of 47.7% of PBFX’s outstanding common units, have committed to vote such units to approve the transaction.

The terms of the Merger Transaction were unanimously approved by the conflicts committee (the “Conflicts Committee”) of the Board of Directors (the “PBFX Board”) of PBFX’s general partner and by the PBFX Board based on the unanimous approval and recommendation of the Conflicts Committee, which is comprised entirely of independent directors. Upon closing, PBFX will become an indirect wholly-owned subsidiary of PBF Energy and PBF LLC.

The Merger Transaction is subject to regulatory approval and customary closing conditions and the approval of the PBFX common unit holders (including PBF Energy) it is expected to close in the fourth quarter of 2022, however there can be no assurance that the Merger Transaction will be consummated in the anticipated timeframe, on the contemplated terms or at all.

49

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited financial statements of PBF Energy and PBF LLC included in the Annual Report on Form 10-K for the year ended December 31, 2021 and the unaudited financial statements and related notes included in this report. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Cautionary Note Regarding Forward-Looking Statements.”

PBF Energy is the sole managing member of, and owner of an equity interest representing approximately 99.3% of the outstanding economic interests in PBF LLC as of June 30, 2022. PBF LLC is a holding company for the companies that directly and indirectly own and operate our business. PBF Holding is a wholly-owned subsidiary of PBF LLC and PBF Finance is a wholly-owned subsidiary of PBF Holding. As of June 30, 2022, PBF LLC also holds a 47.7% limited partner interest and a non-economic general partner interest in PBFX, a publicly-traded MLP.

Unless the context indicates otherwise, the terms “we,” “us,” and “our” refer to PBF Energy and its consolidated subsidiaries, including PBF LLC, PBF Holding and its subsidiaries and PBFX and its subsidiaries. Discussions on areas that either apply only to PBF Energy or PBF LLC are clearly noted in such sections.

50

Overview

We are one of the largest independent petroleum refiners and suppliers of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products in the United States. We sell our products throughout the Northeast, Midwest, Gulf Coast and West Coast of the United States, as well as in other regions of the United States, Canada and Mexico and are able to ship products to other international destinations. As of June 30, 2022, we own and operate six domestic oil refineries and related assets. Based on the current configuration our refineries have a combined processing capacity, known as throughput, of approximately 1,000,000 barrels per day (“bpd”), and a weighted-average Nelson Complexity Index of 13.2 based on current operating conditions. The complexity and throughput capacity of our refineries are subject to change dependent upon configuration changes we make to respond to market conditions, as well as a result of investments made to improve our facilities and maintain compliance with environmental and governmental regulations. We operate in two reportable business segments: Refining and Logistics. Our six oil refineries are all engaged in the refining of crude oil and other feedstocks into petroleum products, and are aggregated into the Refining segment. PBFX operates certain logistics assets such as crude oil and refined petroleum products terminals, pipelines, and storage facilities, which are aggregated into the Logistics segment.

Our six refineries are located in Delaware City, Delaware, Paulsboro, New Jersey, Toledo, Ohio, Chalmette, Louisiana, Torrance, California and Martinez, California. In 2020, we reconfigured our Delaware City and Paulsboro refineries (the “East Coast Refining Reconfiguration”), temporarily idling certain of our major processing units at the Paulsboro refinery, in order to operate the two refineries as one functional unit that we refer to as the “East Coast Refining System”. Each refinery is briefly described in the table below:

Refinery	Region	Nelson Complexity Index (1)	Throughput Capacity (in bpd) (1)	PADD	Crude Processed (2)	Source (2)
Delaware City	East Coast	13.6	180,000	1	light sweet through heavy sour	water, rail
Paulsboro	East Coast	10.4(3)	105,000(3)	1	light sweet through heavy sour	water
Toledo	Mid-Continent	11.0	180,000	2	light sweet	pipeline, truck, rail
Chalmette	Gulf Coast	13.0	185,000	3	light sweet through heavy sour	water, pipeline
Torrance	West Coast	13.8	166,000	5	medium and heavy	pipeline, water, truck
Martinez	West Coast	16.1	157,000	5	medium and heavy	pipeline and water

________

(1) Reflects operating conditions at each refinery as of the date of this filing. Changes in complexity and throughput capacity reflect the result of current market conditions such as our East Coast Refining Reconfiguration, in addition to investments made to improve our facilities and maintain compliance with environmental and governmental regulations. Configurations at each of our refineries are evaluated and updated accordingly.

(2) Reflects the typical crude and feedstocks and related sources utilized under normal operating conditions and prevailing market environments.

(3) Under normal operating conditions and prevailing market environments, our Nelson Complexity Index and throughput capacity for the Paulsboro refinery would be 13.1 and 180,000, respectively. As a result of the East Coast Refining Reconfiguration, our Nelson Complexity Index and throughput capacity were reduced.

51

As of June 30, 2022, PBF Energy owned 121,945,632 PBF LLC Series C Units and our current and former executive officers and directors and certain employees and others held 910,457 PBF LLC Series A Units (we refer to all of the holders of the PBF LLC Series A Units as “the members of PBF LLC other than PBF Energy”). As a result, the holders of our issued and outstanding shares of our PBF Energy Class A common stock have approximately 99.3% of the voting power in us, and the members of PBF LLC other than PBF Energy through their holdings of Class B common stock have approximately 0.7% of the voting power in us (99.2% and 0.8% as of December 31, 2021, respectively).

52

Business Developments

Recent significant business developments affecting us are discussed below.

Pending Merger with PBFX

On July 27, 2022, we entered into a definitive agreement with PBFX (the “Merger Agreement”) (the Merger Agreement and the transactions contemplated thereby are referred to herein as the “Merger Transaction”) pursuant to which we will acquire all of the publicly held common units in PBFX representing limited partner interests in the MLP not already owned by us.

The consideration to the PBFX common unitholders (other than us and our affiliates) under the Merger Transaction consists of cash and PBF Energy Class A common stock. The holders of each outstanding PBFX common unit will receive cash consideration of $9.25 and 0.27 shares of PBF Energy Class A common stock for each PBFX common unit. We, as the beneficial owner of 47.7% of PBFX’s outstanding common units, have committed to vote such units to approve the transaction.

The terms of the Merger Transaction were unanimously approved by the Conflicts Committee and by the PBFX Board (all as defined in “Note 17 - Subsequent Events” of our Notes to Condensed Consolidated Financial Statements), based on the unanimous approval and recommendation of the Conflicts Committee, which is comprised entirely of independent directors. Upon closing, PBFX will become our indirect wholly-owned subsidiary.

The Merger Transaction is subject to regulatory approval and customary closing conditions and the approval of the PBFX common unit holders (including us) it is expected to close in the fourth quarter of 2022, however there can be no assurance that the PBFX Transaction will be consummated in the anticipated timeframe, on the contemplated terms or at all.

Market Developments

We continue to adjust our operational plans to the evolving market conditions and continue to monitor and manage operating expenses through reductions in discretionary activities and third-party services. Market conditions currently include high crude oil prices, tight domestic supplies and elevated refining margins as a result of sustained increases in demand, coupled with global supply disruption related to sanctions imposed on Russia for its invasion of Ukraine.

We also remain focused on enhancing the profitability and reliability of our core operations. Our full-year refining capital expenditures are expected to range from $500.0 million to $550.0 million. We continue to focus on capital discipline, with turnaround and other mandatory spend accounting for the majority of total planned refining capital expenses for 2022. We will be responsive in regards to the pace of capital expenditures and scope of turnarounds depending on market conditions.

Renewable Diesel Project

We continue to advance on our project for a renewable fuels production facility co-located at our Chalmette refinery. The project incorporates certain idled assets at the refinery, including an idle hydrocracker, along with a newly-constructed pre-treatment unit to establish a 20,000 barrel per day renewable diesel production facility. During the second quarter of 2022, we invested approximately $52.0 million in incremental capital to continue to progress and incubate the project with the goal of being in production in the first half of 2023. Concurrently with our activities to progress the project, we are continuing discussions with potential strategic and financial partners.

53

Factors Affecting Comparability Between Periods

Our results have been affected by the following events, the understanding of which will aid in assessing the comparability of our period to period financial performance and financial condition.

Market Developments

The impact of the unprecedented global health and economic crisis sparked by the COVID-19 pandemic at the end of the quarter ended March 31, 2020, created a shock in oil demand resulting in an economic challenge to our industry which has not occurred since our formation. This resulted in significant demand reduction for our refined products and atypical volatility in oil commodity prices. The demand for these products started to rebound in 2021 and continued to improve in the three and six months ended June 30, 2022. Additionally, refining margins improved in the first half of 2022 as a result of global supply disruption.

Debt and Credit Facilities

Senior Notes

During the three months ended June 30, 2022, we made a number of open market repurchases of our 6.00% senior unsecured notes due 2028 (the “2028 Senior Notes”) and 7.25% senior unsecured notes due 2025 (the “2025 Senior Notes”) that resulted in the extinguishment of $24.9 million in principal of the 2028 Senior Notes and $5.0 million in principal of the 2025 Senior Notes. Total cash consideration paid to repurchase the principal amount outstanding of the 2028 Senior Notes and the 2025 Senior Notes, excluding accrued interest, totaled $25.9 million and we recognized a $3.8 million gain on the extinguishment of debt during the three and six months ended June 30, 2022.

Revolving Credit Facility

On May 25, 2022, we entered into an amendment of our existing asset-based revolving credit agreement (the “Revolving Credit Agreement”). Among other things, the Revolving Credit Agreement amended and extended PBF Holding’s asset-based revolving credit facility (the “Revolving Credit Facility”) through January 2025 and increased the maximum commitment to $4.3 billion through May 2023 (currently set to adjust to $2.75 billion in May 2023 through January 2025). The amendments also redefine certain components of the Borrowing Base (as defined in the Revolving credit Agreement) to reflect the existence of the two tranches, tranche A which is comprised of existing lenders who have not elected to extend and whose commitments retain the existing maturity date under the existing revolving credit agreement of May 2, 2023 (the “Tranche A Commitments”) and tranche B, which is comprised of existing and new lenders whose commitments have an extended maturity date of January 31, 2025 (the “Tranche B Commitments”). The Tranche A Commitments total $1.55 billion and the Tranche B Commitments total $2.75 billion. The amendments also include changes to incorporate the adoption of Secured Overnight Financing Rate (“SOFR”) as a replacement of the London Interbank Offered Rate (“LIBOR”), changes to joint lead arrangers, bookrunners, syndication agents and other titles, and other changes related to the foregoing. In addition, an accordion feature allows for additional Tranche B Commitments of up to an additional $500.0 million plus an amount equal to the Tranche A Commitments for existing Tranche A lenders.

During the six months ended June 30, 2022, we made net repayments of $900.0 million on the Revolving Credit Facility, resulting in no outstanding borrowings as of June 30, 2022. There was $900.0 million of outstanding borrowings under the Revolving Credit Facility as of December 31, 2021.

54

PBFX Revolving Credit Facility

During the six months ended June 30, 2022, PBFX made net repayments of $70.0 million on the PBFX five-year, $500.0 million amended and restated revolving credit facility (the “PBFX Revolving Credit Facility”), resulting in outstanding borrowings as of June 30, 2022 of $30.0 million. There was $100.0 million of outstanding borrowings under the PBFX Revolving Credit Facility as of December 31, 2021.

Tax Receivable Agreement

As of June 30, 2022, PBF Energy recognized a liability for the Tax Receivable Agreement of $334.8 million ($48.3 million as of December 31, 2021) reflecting the estimate of the undiscounted amounts that the Company expected to pay under the agreement, net of the impact of a deferred tax asset valuation allowance recognized in accordance with Financial Accounting Standards Board, Accounting Standards Codification (“ASC”) 740, Income Taxes (“ASC 740”). As future taxable income is recognized, increases in our Tax Receivable Agreement liability may be necessary in conjunction with the revaluation of deferred tax assets.

55

Results of Operations

The tables below reflect our consolidated financial and operating highlights for the three and six months ended June 30, 2022 and 2021 (amounts in millions, except per share data). Differences between the results of operations of PBF Energy and PBF LLC primarily pertain to income taxes, interest expense and noncontrolling interest as shown below. Earnings per share information applies only to the financial results of PBF Energy. We operate in two reportable business segments: Refining and Logistics. Our oil refineries, excluding the assets owned by PBFX, are all engaged in the refining of crude oil and other feedstocks into petroleum products, and are aggregated into the Refining segment. PBFX is a publicly-traded MLP that operates certain logistics assets such as crude oil and refined products terminals, pipelines and storage facilities. PBFX’s operations are aggregated into the Logistics segment. We do not separately discuss our results by individual segments as, apart from PBFX’s third-party acquisitions, our Logistics segment did not have any significant third-party revenues and a significant portion of its operating results are eliminated in consolidation.

PBF Energy	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues	$	14,077.7	$	6,897.9	$	23,219.4	$	11,822.7
Cost and expenses:
Cost of products and other	11,380.5		6,100.7		19,586.7		10,291.7
Operating expenses (excluding depreciation and amortization expense as reflected below)	637.6		483.8		1,258.0		965.1
Depreciation and amortization expense	120.1		111.6		238.4		225.7
Cost of sales	12,138.2		6,696.1		21,083.1		11,482.5
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	153.2		55.0		206.7		102.8
Depreciation and amortization expense	1.9		3.3		3.8		6.7
Change in fair value of contingent consideration	77.6		(4.0)		127.9		26.1
Loss (gain) on sale of assets	0.2		—		0.3		(0.6)
Total cost and expenses	12,371.1		6,750.4		21,421.8		11,617.5
Income from operations	1,706.6		147.5		1,797.6		205.2
Other income (expense):
Interest expense, net	(85.5)		(80.8)		(163.9)		(161.1)
Change in Tax Receivable Agreement liability	(267.2)		—		(286.5)		—
Change in fair value of catalyst obligations	7.2		5.8		2.3		(4.2)
Gain on extinguishment of debt	3.8		—		3.8		—
Other non-service components of net periodic benefit cost	2.2		1.9		4.4		3.9
Income before income taxes	1,367.1		74.4		1,357.7		43.8
Income tax expense (benefit)	131.3		4.5		125.2		(3.9)
Net income	1,235.8		69.9		1,232.5		47.7
Less: net income attributable to noncontrolling interests	32.1		22.0		49.9		41.1
Net income attributable to PBF Energy Inc. stockholders	$	1,203.7	$	47.9	$	1,182.6	$	6.6
Consolidated gross margin	$	1,939.5	$	201.8	$	2,136.3	$	340.2
Gross refining margin (1)	$	2,608.2	$	711.3	$	3,458.9	$	1,361.5
Net income available to Class A common stock per share:
Basic	$	9.93	$	0.40	$	9.78	$	0.05
Diluted	$	9.65	$	0.39	$	9.58	$	0.05

(1) See Non-GAAP Financial Measures.

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PBF LLC	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues	$	14,077.7	$	6,897.9	$	23,219.4	$	11,822.7
Cost and expenses:
Cost of products and other	11,380.5		6,100.7		19,586.7		10,291.7
Operating expenses (excluding depreciation and amortization expense as reflected below)	637.6		483.8		1,258.0		965.1
Depreciation and amortization expense	120.1		111.6		238.4		225.7
Cost of sales	12,138.2		6,696.1		21,083.1		11,482.5
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	152.8		54.1		205.9		101.6
Depreciation and amortization expense	1.9		3.3		3.8		6.7
Change in fair value of contingent consideration	77.6		(4.0)		127.9		26.1
Loss (gain) on sale of assets	0.2		—		0.3		(0.6)
Total cost and expenses	12,370.7		6,749.5		21,421.0		11,616.3
Income from operations	1,707.0		148.4		1,798.4		206.4
Other income (expense):
Interest expense, net	(88.2)		(83.2)		(169.2)		(166.1)
Change in fair value of catalyst obligations	7.2		5.8		2.3		(4.2)
Gain on extinguishment of debt	3.8		—		3.8		—
Other non-service components of net periodic benefit cost	2.2		1.9		4.4		3.9
Income before income taxes	1,632.0		72.9		1,639.7		40.0
Income tax benefit	(1.2)		(4.3)		(9.3)		(14.9)
Net income	1,633.2		77.2		1,649.0		54.9
Less: net income attributable to noncontrolling interests	19.9		21.6		37.7		41.1
Net income attributable to PBF Energy Company LLC	$	1,613.3	$	55.6	$	1,611.3	$	13.8

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Operating Highlights	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Key Operating Information
Production (bpd in thousands)	958.8			894.5			901.6			824.6
Crude oil and feedstocks throughput (bpd in thousands)	942.2			874.2			887.7			810.4
Total crude oil and feedstocks throughput (millions of barrels)	85.8			79.6			160.7			146.7
Consolidated gross margin per barrel of throughput	$	22.61		$	2.53		$	13.30		$	2.31
Gross refining margin, excluding special items, per barrel of throughput (1)	$	30.41		$	5.62		$	21.54		$	4.72
Refinery operating expense, per barrel of throughput	$	7.16		$	5.81		$	7.53		$	6.29
Crude and feedstocks (% of total throughput) (2)
Heavy	31		%	36		%	33		%	36		%
Medium	34		%	25		%	33		%	28		%
Light	20		%	23		%	19		%	21		%
Other feedstocks and blends	15		%	16		%	15		%	15		%
Total throughput	100		%	100		%	100		%	100		%
Yield (% of total throughput)
Gasoline and gasoline blendstocks	47		%	54		%	48		%	54		%
Distillates and distillate blendstocks	36		%	29		%	35		%	30		%
Lubes	1		%	1		%	1		%	1		%
Chemicals	1		%	2		%	2		%	2		%
Other	17		%	16		%	16		%	15		%
Total yield	102		%	102		%	102		%	102		%

(1)    See Non-GAAP Financial Measures.

(2)    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.

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The table below summarizes certain market indicators relating to our operating results as reported by Platts. 

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(dollars per barrel, except as noted)
Dated Brent crude oil	$	113.93	$	68.87	$	107.84	$	65.08
West Texas Intermediate (WTI) crude oil	$	108.77	$	66.19	$	101.99	$	62.22
Light Louisiana Sweet (LLS) crude oil	$	110.33	$	68.05	$	103.91	$	64.22
Alaska North Slope (ANS) crude oil	$	112.17	$	68.58	$	104.15	$	64.89
Crack Spreads
Dated Brent (NYH) 2-1-1	$	55.26	$	17.40	$	38.47	$	14.77
WTI (Chicago) 4-3-1	$	44.53	$	18.84	$	31.24	$	15.26
LLS (Gulf Coast) 2-1-1	$	50.39	$	15.87	$	37.27	$	13.99
ANS (West Coast-LA) 4-3-1	$	53.56	$	21.28	$	43.20	$	18.56
ANS (West Coast-SF) 3-2-1	$	56.14	$	21.21	$	42.76	$	17.13
Crude Oil Differentials
Dated Brent (foreign) less WTI	$	5.16	$	2.68	$	5.85	$	2.86
Dated Brent less Maya (heavy, sour)	$	9.99	$	4.72	$	11.11	$	5.25
Dated Brent less WTS (sour)	$	5.64	$	2.41	$	6.19	$	2.34
Dated Brent less ASCI (sour)	$	8.75	$	3.13	$	8.69	$	2.95
WTI less WCS (heavy, sour)	$	18.52	$	13.09	$	16.96	$	12.61
WTI less Bakken (light, sweet)	$	(3.97)	$	0.23	$	(3.73)	$	0.35
WTI less Syncrude (light, sweet)	$	(4.38)	$	1.24	$	(2.03)	$	1.17
WTI less LLS (light, sweet)	$	(1.56)	$	(1.86)	$	(1.92)	$	(2.00)
WTI less ANS (light, sweet)	$	(3.40)	$	(2.39)	$	(2.16)	$	(2.67)
Natural gas (dollars per MMBTU)	$	7.50	$	2.98	$	6.04	$	2.85

Three Months Ended June 30, 2022 Compared to the Three Months Ended June 30, 2021

Overview— PBF Energy net income was $1,235.8 million for the three months ended June 30, 2022 compared to a net income of $69.9 million for the three months ended June 30, 2021. PBF LLC net income was $1,633.2 million for the three months ended June 30, 2022 compared to a net income of $77.2 million for the three months ended June 30, 2021. Net income attributable to PBF Energy was $1,203.7 million, or $9.65 per diluted share, for the three months ended June 30, 2022 ($9.65 per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net income, or $10.58 per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net income excluding special items, as described below in Non-GAAP Financial Measures) compared to net income attributable to PBF Energy of $47.9 million, or $0.39 per diluted share, for the three months ended June 30, 2021 ($0.39 per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net income, or $(1.26) per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net loss excluding special items, as described below in Non-GAAP Financial Measures). The net income attributable to PBF Energy represents PBF Energy’s equity interest in PBF LLC’s pre-tax income, less applicable income tax expense. PBF Energy’s weighted-average equity interest in PBF LLC was 99.2% for the three months ended June 30, 2022 and June 30, 2021.

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Our results for the three months ended June 30, 2022 were negatively impacted by special items consisting of pre-tax charges associated with the change in the Tax Receivable Agreement liability of $267.2 million, or $198.0 million net of tax, and a change in fair value of contingent consideration of $77.6 million, or $57.5 million net of tax, primarily related to the acquisition of the Martinez refinery and logistic assets (the “Martinez Acquisition”), partially offset by a $136.2 million tax benefit associated with the remeasurement of certain deferred tax assets, and a pre-tax gain on the extinguishment of debt associated with the repurchase of a portion of our 2028 Senior Notes and 2025 Senior Notes of $3.8 million, or $2.8 million net of tax. Our results for the three months ended June 30, 2021 were positively impacted by special items consisting of a non-cash, pre-tax lower of cost or market (“LCM”) inventory adjustment of approximately $264.0 million, or $193.8 million net of tax, a change in the fair value of the contingent consideration primarily related to the Martinez Acquisition of $4.0 million, or $2.9 million net of tax and a $4.1 million tax benefit associated with the remeasurement of certain deferred tax assets.

Excluding the impact of these special items, when comparing our results to the three months ended June 30, 2021, we experienced an increase in the demand for our refined products, evidenced by higher throughput volumes and barrels sold at the majority of our refineries, as well as overall stronger refining margins due to favorable movements in crack spreads and crude oil differentials. These improving metrics have positively impacted our revenues, cost of products sold and operating income.

Revenues— Revenues totaled $14.1 billion for the three months ended June 30, 2022 compared to $6.9 billion for the three months ended June 30, 2021, an increase of approximately $7.2 billion, or 104.3%. Revenues per barrel were $146.26 and $78.46 for the three months ended June 30, 2022 and 2021, respectively, an increase of 86.4% directly related to higher hydrocarbon commodity prices. For the three months ended June 30, 2022, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 292,100 bpd, 161,700 bpd, 199,500 bpd and 288,900 bpd, respectively. For the three months ended June 30, 2021, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 250,000 bpd, 150,400 bpd, 174,600 bpd and 299,200 bpd, respectively. For the three months ended June 30, 2022, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 339,500 bpd, 167,500 bpd, 213,900 bpd and 336,800 bpd, respectively. For the three months ended June 30, 2021, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 286,700 bpd, 149,300 bpd, 191,300 bpd and 338,800 bpd, respectively.

The throughput rates at our refineries were overall higher in the three months ended June 30, 2022 compared to the same period in 2021, despite turnaround activity at the Torrance refinery during the three months ended June 30, 2022. We plan to continue operating our refineries based on demand and current market conditions. Total refined product barrels sold were higher than throughput rates, reflecting sales from inventory as well as sales and purchases of refined products outside our refineries.

Consolidated Gross Margin— Consolidated gross margin totaled $1,939.5 million for the three months ended June 30, 2022 compared to $201.8 million for the three months ended June 30, 2021, an increase of approximately $1,737.7 million. Gross refining margin (as described below in Non-GAAP Financial Measures) totaled $2,608.2 million, or $30.41 per barrel of throughput for the three months ended June 30, 2022 compared to $711.3 million, or $8.94 per barrel of throughput for the three months ended June 30, 2021, an increase of approximately $1,896.9 million. Gross refining margin excluding special items totaled $2,608.2 million or $30.41 per barrel of throughput for the three months ended June 30, 2022 compared to $447.3 million or $5.62 per barrel of throughput for the three months ended June 30, 2021, an increase of $2,160.9 million.

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During the three months ended June 30, 2022, our margin calculations were not impacted by special items. Consolidated gross margin and gross refining margin increased due to favorable movements in certain crack spreads and crude oil differentials and higher throughput volumes and barrels sold at all of our refineries. For the three months ended June 30, 2021, special items impacting our margin calculations included a non-cash LCM benefit of approximately $264.0 million on a net basis, resulting from the increase in crude oil and refined product prices at the end of the second quarter of 2021 in comparison to the prices at the end of the first quarter of 2021.

Additionally, our results continue to be impacted by significant costs to comply with the Renewable Fuel Standard. Total Renewable Fuel Standard compliance costs were $432.7 million for the three months ended June 30, 2022 in comparison to $297.6 million for three months ended months ended June 30, 2021.

Average industry margins were favorable during the three months ended June 30, 2022 in comparison to the same period in 2021, primarily due to varying timing and extent of the impacts of the COVID-19 pandemic on regional demand and commodity prices, in addition to increased refining margins as a result of global supply disruptions.

Favorable movements in benchmark crude differentials typically result in lower crude costs and positively impact our earnings while reductions in these benchmark crude differentials typically result in higher crude costs and negatively impact our earnings.

On the East Coast, the Dated Brent (NYH) 2-1-1 industry crack spread was approximately $55.26 per barrel, or 217.6% higher, in the three months ended June 30, 2022, as compared to $17.40 per barrel in the same period in 2021. Our margins were positively impacted from our refinery specific slate on the East Coast by strengthening Dated Brent/Maya differential, which increased by $5.27 per barrel, slightly offset by weakened WTI/Bakken differentials, which decreased by $4.20 per barrel in comparison to the same period in 2021. The WTI/WCS differential increased to $18.52 per barrel in the three months ended June 30, 2022 compared to $13.09 in the same period in 2021, which favorably impacted our cost of heavy Canadian crude.

Across the Mid-Continent, the WTI (Chicago) 4-3-1 industry crack spread was $44.53 per barrel, or 136.4% higher, in the three months ended June 30, 2022 as compared to $18.84 per barrel in the same period in 2021. Our margins were negatively impacted from our refinery specific slate in the Mid-Continent by a decreasing WTI/Bakken differential, which averaged a premium of $3.97 per barrel in the three months ended June 30, 2022, as compared to a discount of $0.23 per barrel in the same period in 2021. Additionally, the WTI/Syncrude differential averaged a premium $4.38 per barrel during the three months ended June 30, 2022 as compared to a discount of $1.24 per barrel in the same period of 2021.

On the Gulf Coast, the LLS (Gulf Coast) 2-1-1 industry crack spread was $50.39 per barrel, or 217.5% higher, in the three months ended June 30, 2022 as compared to $15.87 per barrel in the same period in 2021. Margins on the Gulf Coast were positively impacted from our refinery specific slate by a strengthening WTI/LLS differential, which averaged a premium of $1.56 per barrel during the three months ended June 30, 2022 as compared to a premium of $1.86 per barrel in the same period of 2021.

On the West Coast the ANS (West Coast) 4-3-1 industry crack spread was $53.56 per barrel, or 151.7% higher, in the three months ended June 30, 2022 as compared to $21.28 per barrel in the same period in 2021. Additionally, the ANS (West Coast) 3-2-1 industry crack spread was $56.14 per barrel, or 164.7% higher, in the three months ended June 30, 2022 as compared to $21.21 per barrel in the same period in 2021. Our margins on the West Coast were negatively impacted from our refinery specific slate by weakened WTI/ANS differential, which averaged a premium of $3.40 per barrel during the three months ended June 30, 2022 as compared to a premium of $2.39 per barrel in the same period of 2021.

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Operating Expenses— Operating expenses totaled $637.6 million for the three months ended June 30, 2022 compared to $483.8 million for the three months ended June 30, 2021, an increase of $153.8 million, or 31.8%. Of the total $637.6 million of operating expenses for the three months ended June 30, 2022, $613.8 million, or $7.16 per barrel of throughput, related to expenses incurred by the Refining segment, while the remaining $23.8 million related to expenses incurred by the Logistics segment ($462.3 million, or $5.81 per barrel, and $21.5 million of operating expenses for the three months ended June 30, 2021 related to the Refining and Logistics segments, respectively). Increases in operating expenses was mainly attributable to increases in natural gas volumes and price across our refineries when compared to the same period in 2021. Additionally, we experienced higher outside services, maintenance and operational costs due to increased production when compared to the same period in 2021. Operating expenses related to our Logistics segment also increased as a result of increased maintenance activity.

General and Administrative Expenses— General and administrative expenses totaled $153.2 million for the three months ended June 30, 2022 compared to $55.0 million for the three months ended June 30, 2021, an increase of approximately $98.2 million or 178.5%. The increase in general and administrative expenses for the three months ended June 30, 2022 in comparison to the three months ended June 30, 2021 is primarily related to higher employee-related expenses, including incentive compensation. Our general and administrative expenses are comprised of personnel, facilities and other infrastructure costs necessary to support our refineries and related logistics assets.

Loss on Sale of Assets— There was a loss on the sale of assets of $0.2 million for the three months ended June 30, 2022, related to the sale of non-operating refinery assets. There was no gain or loss on sale of assets for the three months ended June 30, 2021.

Depreciation and Amortization Expense— Depreciation and amortization expense totaled $122.0 million for the three months ended June 30, 2022 (including $120.1 million recorded within Cost of sales) compared to $114.9 million for the three months ended June 30, 2021 (including $111.6 million recorded within Cost of sales), an increase of $7.1 million. The increase was a result of a general increase to our fixed asset base due to capital projects and turnarounds completed since the second quarter of 2021.

Change in Fair Value of Contingent Consideration— Change in fair value of contingent consideration represented a loss of $77.6 million for the three months ended June 30, 2022 in comparison to a gain of $4.0 million for the three months ended June 30, 2021. These losses and gains were primarily related to the changes in estimated fair value of the contingent consideration associated with the Martinez Acquisition (the “Martinez Contingent Consideration”).

Change in Fair Value of Catalyst Obligations— Change in fair value of catalyst obligations represented a gain of $7.2 million for the three months ended June 30, 2022 compared to a gain of $5.8 million for the three months ended June 30, 2021. These gains relate to the change in value of the precious metals underlying the sale and leaseback of our refineries’ precious metal catalysts, which we are obligated to repurchase at fair market value upon lease termination.

Gain on Extinguishment of Debt— Gain on the extinguishment of debt totaled $3.8 million in the three months ended June 30, 2022, and relates to the repurchase of a portion of our 2028 Senior Notes and 2025 Senior Notes. There were no such gains or losses recorded in the same period of 2021.

Change in Tax Receivable Agreement Liability— Change in the Tax Receivable Agreement liability for the three months ended June 30, 2022 represented a charge of $267.2 million. There was no change in the Tax Receivable Agreement liability for the three months ended June 30, 2021. This charge was primarily the result of a deferred tax asset valuation allowance recorded in accordance with ASC 740 related to the reduction of deferred tax assets associated with the payments made or expected to be made in connection with the Tax Receivable Agreement liability.

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Interest Expense, net— PBF Energy interest expense totaled $85.5 million for the three months ended June 30, 2022 compared to $80.8 million for the three months ended June 30, 2021, an increase of approximately $4.7 million. Interest expense includes interest on long-term debt including the PBFX credit facilities, costs related to the sale and leaseback of our precious metal catalysts, financing costs associated with the Third Inventory Intermediation Agreement with J. Aron, letter of credit fees associated with the purchase of certain crude oils and the amortization of deferred financing costs. PBF LLC interest expense totaled $88.2 million and $83.2 million for the three months ended June 30, 2022 and June 30, 2021, respectively (inclusive of $2.7 million and $2.4 million, respectively, of incremental interest expense on the affiliate note payable with PBF Energy that eliminates in consolidation at the PBF Energy level).

Income Tax Expense— PBF LLC is organized as a limited liability company and PBFX is an MLP, both of which are treated as “flow-through” entities for federal income tax purposes and therefore are not subject to income tax. However, two subsidiaries of Chalmette Refining L.L.C (“Chalmette Refining”) and our Canadian subsidiary, PBF Energy Limited (“PBF Ltd.”) are treated as C-Corporations for income tax purposes and may incur income taxes with respect to their earnings, as applicable. The members of PBF LLC are required to include their proportionate share of PBF LLC’s taxable income or loss, which includes PBF LLC’s allocable share of PBFX’s pre-tax income or loss, on their respective tax returns. PBF LLC generally makes distributions to its members, per the terms of PBF LLC’s amended and restated limited liability company agreement, related to such taxes on a pro-rata basis. PBF Energy recognizes an income tax expense or benefit in our Condensed Consolidated Financial Statements based on PBF Energy’s allocable share of PBF LLC’s pre-tax income or loss, which was approximately 99.2%, on a weighted-average basis for both the three months ended June 30, 2022 and June 30, 2021. PBF Energy’s 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 interests in PBF LLC or PBFX (although, as described above, PBF LLC must make tax distributions to all its members on a pro-rata basis). PBF Energy’s effective tax rate, excluding the impact of noncontrolling interests, for the three months ended June 30, 2022 and June 30, 2021 was 9.8% and 8.6%, respectively.

Noncontrolling Interest— PBF Energy is the sole managing member of, and has a controlling interest in, PBF LLC. 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. PBF Energy consolidates the financial results of PBF LLC and its subsidiaries, including PBFX. With respect to the consolidation of PBF LLC, the Company records a noncontrolling interest for the economic interest in PBF LLC held by members other than PBF Energy, and with respect to the consolidation of PBFX, the Company records a noncontrolling interest for the economic interests in PBFX held by the public unitholders of PBFX, and with respect to the consolidation of PBF Holding, the Company records a 20% noncontrolling interest for the ownership interests in two subsidiaries of Chalmette Refining held by a third party. The total noncontrolling interest on the Condensed Consolidated Statements of Operations represents the portion of the Company’s earnings or loss attributable to the economic interests held by members of PBF LLC other than PBF Energy, by the public common unitholders of PBFX and by the third-party stockholders of certain of Chalmette Refining’s subsidiaries. The total noncontrolling interest on the Condensed Consolidated Balance Sheets represents the portion of the Company’s net assets attributable to the economic interests held by the members of PBF LLC other than PBF Energy, by the public common unitholders of PBFX and by the third-party stockholders of the two Chalmette Refining subsidiaries. PBF Energy’s weighted-average equity noncontrolling interest ownership percentage in PBF LLC for both the three months ended June 30, 2022 and June 30, 2021 was approximately 0.8%. The carrying amount of the noncontrolling interest on our Condensed Consolidated Balance Sheets attributable to the noncontrolling interest is not equal to the noncontrolling interest ownership percentage due to the effect of income taxes and related agreements that pertain solely to PBF Energy.

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Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021

Overview— PBF Energy net income was $1,232.5 million for the six months ended June 30, 2022 compared to net income of $47.7 million for the six months ended June 30, 2021. PBF LLC net income was $1,649.0 million for the six months ended June 30, 2022 compared to net income of $54.9 million for the six months ended June 30, 2021. Net income attributable to PBF Energy stockholders was $1,182.6 million, or $9.58 per diluted share, for the six months ended June 30, 2022 ($9.58 per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net income, or $11.03 per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net income excluding special items, as described below in Non-GAAP Financial Measures), compared to net income attributable to PBF Energy stockholders of $6.6 million, or $0.05 per diluted share, for the six months ended June 30, 2021 ($0.05 per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net loss, or $(3.87) per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net loss excluding special items, as described below in Non-GAAP Financial Measures). The net income attributable to PBF Energy stockholders represents PBF Energy’s equity interest in PBF LLC’s pre-tax income, less applicable income tax benefit. PBF Energy’s weighted-average equity interest in PBF LLC was 99.2% for the six months ended June 30, 2022 and 2021.

Our results for the six months ended June 30, 2022 were negatively impacted by special items consisting of pre-tax charges associated with the change in the Tax Receivable Agreement liability of $286.5 million, or $212.3 million net of tax, and a change in fair value of contingent consideration of $127.9 million, or $94.8 million net of tax, primarily related to the Martinez Acquisition, partially offset by a $123.4 million tax benefit associated with the remeasurement of certain deferred tax assets, and a gain on the extinguishment of debt associated with the repurchase of a portion of our 2028 Senior Notes and 2025 Senior Notes of $3.8 million, or $2.8 million net of tax. Our results for the six months ended June 30, 2021 were positively impacted by special items consisting of a non-cash, pre-tax LCM inventory adjustment of approximately $669.6 million, or $491.5 million net of tax, and a $2.4 million tax benefit associated with the remeasurement of certain deferred tax assets, offset by a change in the fair value of contingent consideration primarily related to the Martinez Acquisition of $26.1 million, or $19.2 million net of tax.

Excluding the impact of these special items, when comparing our results to the six months ended June 30, 2021, we experienced an increase in the demand for our refined products, evidenced by higher throughput volumes and barrels sold at all of our refineries, as well as overall stronger refining margins due to favorable movements in crack spreads and crude oil differentials. These improving metrics have positively impacted our revenues, cost of products sold and operating income.

Revenues— Revenues totaled $23.2 billion for the six months ended June 30, 2022 compared to $11.8 billion for the six months ended June 30, 2021, an increase of approximately $11.4 billion, or 96.6%. Revenues per barrel were $128.12 and $73.47 for the six months ended June 30, 2022 and 2021, respectively, an increase of 74.4% directly related to higher hydrocarbon commodity prices. For the six months ended June 30, 2022, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 277,700 bpd, 149,300 bpd, 181,400 bpd and 279,300 bpd, respectively. For the six months ended June 30, 2021, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 246,400 bpd, 133,900 bpd, 164,400 bpd and 265,700 bpd, respectively. For the six months ended June 30, 2022, total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 329,200 bpd, 153,700 bpd, 194,900 bpd and 323,500 bpd, respectively. For the six months ended June 30, 2021, total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 278,800 bpd, 139,700 bpd, 172,700 bpd and 297,800 bpd, respectively.

Overall the throughput rates were higher in the six months ended June 30, 2022 compared to the same period in 2021, despite turnaround activity at several refineries during the six months ended June 30, 2022. We plan to continue operating our refineries based on demand and current market conditions. Total refined product barrels sold were higher than throughput rates, reflecting sales from inventory as well as sales and purchases of refined products outside our refineries.

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Consolidated Gross Margin— Consolidated gross margin totaled $2,136.3 million for the six months ended June 30, 2022, compared to $340.2 million for the six months ended June 30, 2021, an increase of approximately $1,796.1 million. Gross refining margin (as described below in Non-GAAP Financial Measures) totaled $3,458.9 million, or $21.54 per barrel of throughput for the six months ended June 30, 2022 compared to $1,361.5 million, or $9.29 per barrel of throughput for the six months ended June 30, 2021, an increase of approximately $2,097.4 million. Gross refining margin excluding special items totaled $3,458.9 million or $21.54 per barrel of throughput for the six months ended June 30, 2022 compared to $691.9 million or $4.72 per barrel of throughput for the six months ended June 30, 2021, an increase of $2,767.0 million.

During the six months ended June 30, 2022, our margin calculations were not impacted by special items. Consolidated gross margin and gross refining margin increased due to favorable movements in certain crack spreads and crude oil differentials and higher throughput volumes and barrels sold at all of our refineries. For the six months ended June 30, 2021, special items impacting our margin calculations included a non-cash LCM inventory benefit of approximately $669.6 million on a net basis, resulting from an increase in crude oil and refined product prices from the year ended 2020 to the end of the second quarter of 2021.

Additionally, our results continue to be impacted by significant costs to comply with the Renewable Fuel Standard. Total Renewable Fuel Standard compliance costs were $627.1 million for the six months ended June 30, 2022 in comparison to $580.7 million for the six months ended June 30, 2021.

Average industry margins were favorable during the six months ended June 30, 2022 in comparison to the same period in 2021, primarily due to varying timing and extent of the impacts of the COVID-19 pandemic on regional demand and commodity prices, in addition to increased refining margins as a result of global supply disruptions.

Favorable movements in these benchmark crude differentials typically result in lower crude costs and positively impact our earnings while reductions in these benchmark crude differentials typically result in higher crude costs and negatively impact our earnings.

On the East Coast, the Dated Brent (NYH) 2-1-1 industry crack spread was approximately $38.47 per barrel, or 160.5% higher, in the six months ended June 30, 2022, as compared to $14.77 per barrel in the same period in 2021. Our margins were impacted from our refinery specific slate on the East Coast by strengthened Dated Brent/Maya differentials, which increased by $5.86 per barrel, slightly offset by weakened WTI/Bakken differentials, which decreased by $4.08 per barrel, in comparison to the same period in 2021. The WTI/WCS differential increased to $16.96 per barrel in the six months ended June 30, 2022 compared to $12.61 in the same period in 2021, which favorably impacted our cost of heavy Canadian crude.

Across the Mid-Continent, the WTI (Chicago) 4-3-1 industry crack spread was $31.24 per barrel, or 104.7% higher, in the six months ended June 30, 2022 as compared to $15.26 per barrel in the same period in 2021. Our margins were negatively impacted from our refinery specific slate in the Mid-Continent by a decreasing WTI/Bakken differential and WTI/Syncrude differential, which decreased by $4.08 per barrel and $3.20 per barrel, respectively.

On the Gulf Coast, the LLS (Gulf Coast) 2-1-1 industry crack spread was $37.27 per barrel, or 166.4% higher, in the six months ended June 30, 2022 as compared to $13.99 per barrel in the same period in 2021. Margins on the Gulf Coast were positively impacted from our refinery specific slate by a strengthened WTI/LLS differential, which averaged a premium of $1.92 per barrel during the six months ended June 30, 2022 as compared to a premium of $2.00 per barrel in the same period of 2021.

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On the West Coast, the ANS (West Coast) 4-3-1 industry crack spread was $43.20 per barrel, or 132.8% higher, in the six months ended June 30, 2022 as compared to $18.56 per barrel in the same period in 2021. Additionally (West Coast) 3-2-1 industry crack spread was $42.76 per barrel, or 149.6% higher, in the six months ended June 30, 2022 as compared to $17.13 per barrel in the same period in 2021. Our margins on the West Coast were positively impacted from our refinery specific slate by a strengthening WTI/ANS differential, which averaged a premium of $2.16 per barrel during the six months ended June 30, 2022 as compared to a premium of $2.67 per barrel in the same period of 2021.

Operating Expenses— Operating expenses totaled $1,258.0 million for the six months ended June 30, 2022 compared to $965.1 million for the six months ended June 30, 2021, an increase of approximately $292.9 million, or 30.3%. Of the total $1,258.0 million of operating expenses for the six months ended June 30, 2022, $1,209.4 million or $7.53 per barrel of throughput, related to expenses incurred by the Refining segment, while the remaining $48.6 million related to expenses incurred by the Logistics segment ($922.5 million or $6.29 per barrel of throughput, and $42.6 million of operating expenses for the six months ended June 30, 2021 related to the Refining and Logistics segments, respectively). The increase in operating expenses was mainly attributable to increases in natural gas volumes and price across our refineries when compared to the same period in 2021. Additionally, we experienced higher outside services, maintenance and operational costs due to increased production when compared to the same period in 2021.

General and Administrative Expenses— General and administrative expenses totaled $206.7 million for the six months ended June 30, 2022 compared to $102.8 million for the six months ended June 30, 2021, an increase of approximately $103.9 million or 101.1%. The increase in general and administrative expenses for the six months ended June 30, 2022 in comparison to the six months ended June 30, 2021 primarily related to higher employee-related expenses, including incentive compensation. Our general and administrative expenses are comprised of personnel, facilities and other infrastructure costs necessary to support our refineries and related logistics assets.

Loss (Gain) on Sale of Assets— There was a loss of $0.3 million and a gain of $0.6 million for the six months ended June 30, 2022 and June 30, 2021, respectively, related primarily to the sale of non-operating refinery assets.

Depreciation and Amortization Expense— Depreciation and amortization expense totaled $242.2 million for the six months ended June 30, 2022 (including $238.4 million recorded within Cost of sales) compared to $232.4 million for the six months ended June 30, 2021 (including $225.7 million recorded within Cost of sales), an increase of approximately $9.8 million. The slight increase was a result of a general increase in our fixed asset base due to capital projects and turnarounds completed since the second quarter of 2021.

Change in Fair Value of Contingent Consideration— Change in fair value of contingent consideration represented a loss of $127.9 million for the six months ended June 30, 2022 in comparison to a loss of $26.1 million for the six months ended June 30, 2021. These losses were primarily related to the changes in estimated fair value of the Martinez Contingent Consideration.

Change in Tax Receivable Agreement Liability— Change in the Tax Receivable Agreement liability for the six months ended June 30, 2022 represented a charge of $286.5 million. There was no change in the Tax Receivable Agreement liability for the six months ended June 30, 2021. This charge was primarily the result of a deferred tax asset valuation allowance recorded in accordance with ASC 740 related to the reduction of deferred tax assets associated with the payments made or expected to be made in connection with the Tax Receivable Agreement liability.

Change in Fair Value of Catalyst Obligations— Change in fair value of catalyst obligations represented a gain of $2.3 million for the six months ended June 30, 2022 compared to a loss of $4.2 million for the six months ended June 30, 2021. These gains and losses relate to the change in value of the precious metals underlying the sale and leaseback of our refineries’ precious metal catalysts, which we are obligated to repurchase at fair market value upon lease termination.

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Gain on Extinguishment of Debt— Gain on the extinguishment of debt of $3.8 million incurred in the six months ended June 30, 2022 relates to the repurchase of a portion of our 2028 Senior Notes and 2025 Senior Notes. There were no such gain or loss in the same period of 2021.

Interest Expense, net— PBF Energy interest expense totaled $163.9 million for the six months ended June 30, 2022 compared to $161.1 million for the six months ended June 30, 2021, an increase of approximately $2.8 million. Interest expense includes interest on long-term debt including the PBFX credit facilities, costs related to the sale and leaseback of our precious metal catalysts, financing costs associated with the Third Inventory Intermediation Agreement with J. Aron, letter of credit fees associated with the purchase of certain crude oils and the amortization of deferred financing costs. PBF LLC interest expense totaled $169.2 million and $166.1 million for the six months ended June 30, 2022 and 2021, respectively (inclusive of $5.3 million and $5.0 million, respectively, of incremental interest expense on the affiliate note payable with PBF Energy that eliminates in consolidation at the PBF Energy level).

Income Tax Expense— PBF LLC is organized as a limited liability company and PBFX is an MLP, both of which are treated as “flow-through” entities for federal income tax purposes and therefore are not subject to income tax. However, two subsidiaries of Chalmette Refining and our Canadian subsidiary, PBF Ltd., are treated as C-Corporations for income tax purposes and may incur income taxes with respect to their earnings, as applicable. The members of PBF LLC are required to include their proportionate share of PBF LLC’s taxable income or loss, which includes PBF LLC’s allocable share of PBFX’s pre-tax income or loss, on their respective tax returns. PBF LLC generally makes distributions to its members, per the terms of PBF LLC’s amended and restated limited liability company agreement, related to such taxes on a pro-rata basis. PBF Energy recognizes an income tax expense or benefit in our Condensed Consolidated Financial Statements based on PBF Energy’s allocable share of PBF LLC’s pre-tax income or loss, which was approximately 99.2%, on a weighted-average basis for both the six months ended June 30, 2022 and June 30, 2021. PBF Energy’s 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 interests in PBF LLC or PBFX (although, as described above, PBF LLC must make tax distributions to all its members on a pro-rata basis). PBF Energy’s effective tax rate, excluding the impact of noncontrolling interests, for the six months ended June 30, 2022 and June 30, 2021 was 9.6% and (144.4)%, respectively.

Noncontrolling Interest— PBF Energy is the sole managing member of, and has a controlling interest in, PBF LLC. 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. PBF Energy consolidates the financial results of PBF LLC and its subsidiaries, including PBFX. With respect to the consolidation of PBF LLC, the Company records a noncontrolling interest for the economic interest in PBF LLC held by members other than PBF Energy, and with respect to the consolidation of PBFX, the Company records a noncontrolling interest for the economic interests in PBFX held by the public unitholders of PBFX, and with respect to the consolidation of PBF Holding, the Company records a 20% noncontrolling interest for the ownership interests in two subsidiaries of Chalmette Refining held by a third-party. The total noncontrolling interest on the Condensed Consolidated Statements of Operations represents the portion of the Company’s earnings or loss attributable to the economic interests held by members of PBF LLC other than PBF Energy, by the public common unitholders of PBFX and by the third-party stockholders of certain of Chalmette Refining’s subsidiaries. The total noncontrolling interest on the Condensed Consolidated Balance Sheets represents the portion of the Company’s net assets attributable to the economic interests held by the members of PBF LLC other than PBF Energy, by the public common unitholders of PBFX and by the third-party stockholders of the two Chalmette Refining subsidiaries. PBF Energy’s weighted-average equity noncontrolling interest ownership percentage in PBF LLC for both the six months ended June 30, 2022 and 2021 was approximately 0.8%. The carrying amount of the noncontrolling interest on our Condensed Consolidated Balance Sheets attributable to the noncontrolling interest is not equal to the noncontrolling interest ownership percentage due to the effect of income taxes and related agreements that pertain solely to PBF Energy.

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Non-GAAP Financial Measures

Management uses certain financial measures to evaluate our operating performance that are calculated and presented on the basis of methodologies other than in accordance with GAAP (“Non-GAAP”). These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and our calculations thereof may not be comparable to similarly entitled measures reported by other companies. Such Non-GAAP financial measures are presented only in the context of PBF Energy’s results and are not presented or discussed in respect to PBF LLC.

Special Items

The Non-GAAP measures presented include Adjusted Fully-Converted Net Income (Loss) excluding special items, EBITDA excluding special items and gross refining margin excluding special items. Special items for the periods presented relate to LCM inventory adjustments, changes in fair value of contingent consideration, changes in the Tax Receivable Agreement liability, gain on extinguishment of debt, and net tax benefit on remeasurement of deferred tax assets. See “Notes to Non-GAAP Financial Measures” below for more details on all special items disclosed. 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 helpful 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.

Adjusted Fully-Converted Net Income (Loss) and Adjusted Fully-Converted Net Income (Loss) Excluding Special Items

PBF Energy utilizes results presented on an Adjusted Fully-Converted basis that reflects an assumed exchange of all PBF LLC Series A Units for shares of PBF Energy Class A common stock. In addition, we present results on an Adjusted Fully-Converted basis excluding special items as described above. We believe that these Adjusted Fully-Converted measures, when presented in conjunction with comparable GAAP measures, are useful to investors to compare PBF Energy results across different periods and to facilitate an understanding of our operating results.

Neither Adjusted Fully-Converted Net Income (Loss) nor Adjusted Fully-Converted Net Income (Loss) excluding special items should be considered an alternative to net income (loss) presented in accordance with GAAP. Adjusted Fully-Converted Net Income (Loss) and Adjusted Fully-Converted Net Income (Loss) excluding special items presented by other companies may not be comparable to our presentation, since each company may define these terms differently. The differences between Adjusted Fully-Converted and GAAP results are as follows:

1.    Assumed exchange of all PBF LLC Series A Units for shares of PBF Energy Class A common stock. As a result of the assumed exchange of all PBF LLC Series A Units, the noncontrolling interest related to these units is converted to controlling interest. Management believes that it is useful to provide the per-share effect associated with the assumed exchange of all PBF LLC Series A Units.

2.    Income Taxes. Prior to PBF Energy’s initial public offering (“IPO”), PBF Energy was organized as a limited liability company treated as a “flow-through” entity for income tax purposes, and even after PBF Energy’s IPO, not all of its earnings are subject to corporate-level income taxes. Adjustments have been made to the Adjusted Fully-Converted tax provisions and earnings to assume that PBF Energy had adopted its post-IPO corporate tax structure for all periods presented and is taxed as a C-corporation in the U.S. at the prevailing corporate rates. These assumptions are consistent with the assumption in clause 1 above that all PBF LLC Series A Units are exchanged for shares of PBF Energy Class A common stock, as the assumed exchange would change the amount of PBF Energy’s earnings that are subject to corporate income tax.

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The following table reconciles PBF Energy’s Adjusted Fully-Converted results with its results presented in accordance with GAAP for the three and six months ended June 30, 2022 and 2021 (in millions, except share and per share amounts):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income attributable to PBF Energy Inc. stockholders	$	1,203.7	$	47.9	$	1,182.6	$	6.6
Less: Income allocated to participating securities	—		—		—		—
Income available to PBF Energy Inc. stockholders - basic	1,203.7		47.9		1,182.6		6.6
Add: Net income attributable to noncontrolling interest (1)	12.2		0.4		12.2		—
Less: Income tax expense (2)	(3.2)		(0.1)		(3.2)		—
Adjusted fully-converted net income	$	1,212.7	$	48.2	$	1,191.6	$	6.6
Special Items: (3)
Add: Non-cash LCM inventory adjustment	—		(264.0)		—		(669.6)
Add: Change in fair value of contingent consideration	77.6		(4.0)		127.9		26.1
Add: Gain on extinguishment of debt	(3.8)		—		(3.8)		—
Add: Change in Tax Receivable Agreement liability	267.2		—		286.5		—
Add: Net tax benefit on remeasurement of deferred tax assets	(136.2)		(4.1)		(123.4)		(2.4)
Add: Recomputed income tax on special items	(88.3)		71.3		(106.3)		171.2
Adjusted fully-converted net income (loss) excluding special items	$	1,329.2	$	(152.6)	$	1,372.5	$	(468.1)
Weighted-average shares outstanding of PBF Energy Inc.	121,268,354		120,230,133		120,886,059		120,211,219
Conversion of PBF LLC Series A Units (4)	923,334		994,138		925,649		986,834
Common stock equivalents (5)	3,466,358		691,904		2,599,837		489,183
Fully-converted shares outstanding-diluted	125,658,046		121,916,175		124,411,545		121,687,236
Diluted net income per share	$	9.65	$	0.39	$	9.58	$	0.05
Adjusted fully-converted net income per fully exchanged, fully diluted shares outstanding (5)	$	9.65	$	0.39	$	9.58	$	0.05
Adjusted fully-converted net income (loss) excluding special items per fully exchanged, fully diluted shares outstanding (3) (5)	$	10.58	$	(1.26)	$	11.03	$	(3.87)

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See Notes to Non-GAAP Financial Measures.

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Gross Refining Margin and Gross Refining Margin Excluding Special Items

Gross refining margin is defined as consolidated gross margin excluding refinery depreciation, refinery operating expense, and gross margin of PBFX. We believe both gross refining margin and gross refining margin excluding special items are important measures of operating performance and provide useful information to investors because they are helpful metric comparisons to the industry refining margin benchmarks, as the refining margin benchmarks do not include a charge for refinery operating expenses and depreciation. In order to assess our operating performance, we compare our gross refining margin (revenues less cost of products and other) to industry refining margin benchmarks and crude oil prices as defined in the table below.

Neither gross refining margin nor gross refining margin excluding special items should be considered an alternative to consolidated gross margin, income from operations, net cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Gross refining margin and gross refining margin excluding special items presented by other companies may not be comparable to our presentation, since each company may define these terms differently.

The following table presents our GAAP calculation of gross margin and a reconciliation of gross refining margin to the most directly comparable GAAP financial measure, consolidated gross margin, on a historical basis, as applicable, for each of the periods indicated (in millions, except per barrel amounts):

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	Three Months Ended June 30,
	2022				2021
	$		per barrel of throughput		$		per barrel of throughput
Calculation of gross margin:
Revenues	$	14,077.7	$	164.15	$	6,897.9	$	86.70
Less: Cost of sales	12,138.2		141.54		6,696.1		84.17
Consolidated gross margin	$	1,939.5	$	22.61	$	201.8	$	2.53
Reconciliation of consolidated gross margin to gross refining margin:
Consolidated gross margin	$	1,939.5	$	22.61	$	201.8	$	2.53
Add: PBFX operating expense	28.3		0.33		25.4		0.32
Add: PBFX depreciation expense	9.1		0.11		9.3		0.12
Less: Revenues of PBFX	(93.4)		(1.09)		(89.8)		(1.13)
Add: Refinery operating expense	613.8		7.16		462.3		5.81
Add: Refinery depreciation expense	110.9		1.29		102.3		1.29
Gross refining margin	$	2,608.2	$	30.41	$	711.3	$	8.94
Special items:(3)
Add: Non-cash LCM inventory adjustment	—		—		(264.0)		(3.32)
Gross refining margin excluding special items	$	2,608.2	$	30.41	$	447.3	$	5.62
	Six Months Ended June 30,
	2022				2021
	$		per barrel of throughput		$		per barrel of throughput
Calculation of consolidated gross margin:
Revenues	$	23,219.4	$	144.52	$	11,822.7	$	80.61
Less: Cost of sales	21,083.1		131.22		11,482.5		78.30
Consolidated gross margin	$	2,136.3	$	13.30	$	340.2	$	2.31
Reconciliation of consolidated gross margin to gross refining margin:
Consolidated gross margin	$	2,136.3	$	13.30	$	340.2	$	2.31
Add: PBFX operating expense	57.6		0.36		50.4		0.35
Add: PBFX depreciation expense	18.6		0.12		18.7		0.14
Less: Revenues of PBFX	(182.8)		(1.14)		(177.3)		(1.21)
Add: Refinery operating expense	1,209.4		7.53		922.5		6.29
Add: Refinery depreciation expense	219.8		1.37		207.0		1.41
Gross refining margin	$	3,458.9	$	21.54	$	1,361.5	$	9.29
Special items:(3)
Add: Non-cash LCM inventory adjustment	—		—		(669.6)		(4.57)
Gross refining margin excluding special items	$	3,458.9	$	21.54	$	691.9	$	4.72

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See Notes to Non-GAAP Financial Measures.

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EBITDA, EBITDA Excluding Special Items and Adjusted EBITDA

Our management uses EBITDA (earnings before interest, income taxes, depreciation and amortization), EBITDA excluding special items and Adjusted EBITDA as measures of operating performance to assist in comparing performance from period to period on a consistent basis and to readily view operating trends, as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations, and in communications with our Board of Directors, creditors, analysts and investors concerning our financial performance. Our outstanding indebtedness for borrowed money and other contractual obligations also include similar measures as a basis for certain covenants under those agreements which may differ from the Adjusted EBITDA definition described below.

EBITDA, EBITDA excluding special items and Adjusted EBITDA are not presentations made in accordance with GAAP and our computation of EBITDA, EBITDA excluding special items and Adjusted EBITDA may vary from others in our industry. In addition, Adjusted EBITDA contains some, but not all, adjustments that are taken into account in the calculation of the components of various covenants in the agreements governing our senior notes and other credit facilities. EBITDA, EBITDA excluding special items and Adjusted EBITDA should not be considered as alternatives to income from operations or net income as measures of operating performance. In addition, EBITDA, EBITDA excluding special items and Adjusted EBITDA are not presented as, and should not be considered, an alternative to cash flows from operations as a measure of liquidity. Adjusted EBITDA is defined as EBITDA before adjustments for items such as stock-based compensation expense, the non-cash change in the fair value of catalyst obligations, the write down of inventory to the LCM, changes in the Tax Receivable Agreement liability due to factors out of PBF Energy’s control such as changes in tax rates, gain on extinguishment of debt, change in the fair value of contingent consideration and certain other non-cash items. Other companies, including other companies in our industry, may calculate EBITDA, EBITDA excluding special items and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures. EBITDA, EBITDA excluding special items and Adjusted EBITDA also have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include that EBITDA, EBITDA excluding special items and Adjusted EBITDA:

•do not reflect depreciation expense or our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

•do not reflect changes in, or cash requirements for, our working capital needs;

•do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

•do not reflect realized and unrealized gains and losses from certain hedging activities, which may have a substantial impact on our cash flow;

•do not reflect certain other non-cash income and expenses; and

•exclude income taxes that may represent a reduction in available cash.

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The following tables reconcile net income (loss) as reflected in PBF Energy’s results of operations to EBITDA, EBITDA excluding special items and Adjusted EBITDA for the periods presented (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Reconciliation of net income to EBITDA and EBITDA excluding special items:
Net income	$	1,235.8	$	69.9	$	1,232.5	$	47.7
Add: Depreciation and amortization expense	122.0		114.9		242.2		232.4
Add: Interest expense, net	85.5		80.8		163.9		161.1
Add: Income tax expense (benefit)	131.3		4.5		125.2		(3.9)
EBITDA	$	1,574.6	$	270.1	$	1,763.8	$	437.3
Special Items(3)
Add: Non-cash LCM inventory adjustment	—		(264.0)		—		(669.6)
Add: Change in fair value of contingent consideration	77.6		(4.0)		127.9		26.1
Add: Gain on extinguishment of debt	(3.8)		—		(3.8)		—
Add: Change in Tax Receivable Agreement liability	267.2		—		286.5		—
EBITDA excluding special items	$	1,915.6	$	2.1	$	2,174.4	$	(206.2)
Reconciliation of EBITDA to Adjusted EBITDA:
EBITDA	$	1,574.6	$	270.1	$	1,763.8	$	437.3
Add: Stock-based compensation	10.3		10.4		18.0		17.8
Add: Change in fair value of catalyst obligations	(7.2)		(5.8)		(2.3)		4.2
Add: Non-cash LCM inventory adjustment(3)	—		(264.0)		—		(669.6)
Add: Change in fair value of contingent consideration(3)	77.6		(4.0)		127.9		26.1
Add: Gain on extinguishment of debt(3)	(3.8)		—		(3.8)		—
Add: Change in Tax Receivable Agreement liability(3)	267.2		—		286.5		—
Adjusted EBITDA	$	1,918.7	$	6.7	$	2,190.1	$	(184.2)

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See Notes to Non-GAAP Financial Measures.

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Notes to Non-GAAP Financial Measures

The following notes are applicable to the Non-GAAP Financial Measures above: 

(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 PBF LLC Series A Units for shares of PBF Energy Class A common stock.

(2)    Represents an adjustment to reflect PBF Energy’s estimated annualized statutory corporate tax rate of approximately 25.9% and 26.6% for the 2022 and 2021 periods, respectively, applied to the net income (loss) attributable to noncontrolling interest for all periods presented. The adjustment assumes the full exchange of existing PBF LLC Series A Units as described in (1) above.

(3)    Special items:

    LCM inventory adjustment - LCM is a GAAP requirement related to inventory valuation that mandates 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 the 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 inventory adjustment is recorded to reflect the net change in the LCM inventory reserve between the prior period and the current period. The net impact of these LCM inventory adjustments are included in the Refining segment’s income from operations, but are excluded from the operating results presented, as applicable, in order to make such information comparable between periods.

The following table includes the LCM inventory reserve as of each date presented (in millions):

	2022		2021
January 1,	$	—	$	669.6
March 31,	—		264.0
June 30,	—		—

The following table includes the corresponding impact of changes in the LCM inventory reserve on income from operations and net income for the periods presented (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net LCM inventory adjustment benefit in income from operations	$	—	$	264.0	$	—	$	669.6
Net LCM inventory adjustment benefit in net income	—		193.8		—		491.5

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Change in Fair Value of Contingent Consideration - During the three months ended June 30, 2022, we recorded a change in fair value of the contingent consideration primarily related to the Martinez Contingent Consideration which decreased income from operations and net income by $77.6 million and $57.5 million, respectively. During the six months ended June 30, 2022, we recorded a change in fair value of the contingent consideration primarily related to the Martinez Contingent Consideration, which decreased income from operations and net income by $127.9 million and $94.8 million, respectively. During the three months ended June 30, 2021, we recorded a change in fair value of the contingent consideration primarily related to the Martinez Contingent Consideration which increased income from operations and net income by $4.0 million and $2.9 million, respectively. During the six months ended June 30, 2021, we recorded a change in fair value of the contingent consideration primarily related to the Martinez Contingent Consideration which decreased income from operations and net income by $26.1 million and $19.2 million, respectively.

Gain on Extinguishment of Debt - During the three and six months ended June 30, 2022, we recorded a pre-tax gain on extinguishment of debt related to the repurchase of a portion of the 2028 Senior Notes and the 2025 Senior Notes, which increased income before income taxes and net income by $3.8 million and $2.8 million, respectively. There was no such gain during the three and six months ended June 30, 2021.

Change in Tax Receivable Agreement liability - During the three months ended June 30, 2022, we recorded a change in the Tax Receivable Agreement liability that decreased income before income taxes and net income by $267.2 million and $198.0 million, respectively. During the six months ended June 30, 2022, we recorded a change in the Tax Receivable Agreement liability that decreased income before income taxes and net income by $286.5 million and $212.3 million, respectively. There was no change to the Tax Receivable Agreement liability during any of the other periods presented. The changes in the Tax Receivable Agreement liability reflect charges or benefits attributable to changes in our obligation under the Tax Receivable Agreement due to factors out of our control such as changes in tax rates, as well as periodic adjustments to our liability based, in part, on an updated estimate of the amounts that we expect to pay, using assumptions consistent with those used in our concurrent estimate of the deferred tax asset valuation allowance.

Recomputed Income Tax on Special Items - The income tax impact on these special items, other than the net tax expense special item discussed below, is calculated using the tax rates shown in (2) above.

Net Tax Benefit on Remeasurement of Deferred Tax Assets - During the three and six months ended June 30, 2022, we recorded a decrease to our deferred tax valuation allowance of $205.4 million and $197.6 million, respectively, in accordance with ASC 740, of which $136.2 million and $123.4 million, respectively, related to a tax benefit with respect to the remeasurement of deferred tax assets and the balance related to our net changes in the Tax Receivable Agreement liability. During the three and six months ended June 30, 2021, we recorded a decrease to our deferred tax valuation allowance related to the remeasurement of deferred tax assets of $4.1 million and $2.4 million, respectively, in accordance with ASC 740.

(4)    Represents an adjustment to weighted-average diluted shares outstanding to assume the full exchange of existing PBF LLC Series A Units as described in (1) above.

(5)    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 performance share 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 and six months ended June 30, 2022 and 2021, respectively. Common stock equivalents exclude the effects of performance share units and options and warrants to purchase 3,539,238 and 7,934,448 shares of PBF Energy Class A common stock and PBF LLC Series A units because they are anti-dilutive for the three and six months ended June 30, 2022, respectively. Common stock equivalents exclude the effects of performance share units and options and warrants to purchase 11,091,279 shares of PBF Energy Class A common stock and PBF LLC Series A units because they are anti-dilutive for the three and six months ended June 30, 2021, respectively. For periods showing a net loss, all common stock equivalents and unvested restricted stock are considered anti-dilutive.

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Liquidity and Capital Resources

Overview

Our primary sources of liquidity are our cash flows from operations, cash and cash equivalents and borrowing availability under our credit facilities, as described below. We believe that our cash flows from operations and available capital resources will be sufficient to meet our and our subsidiaries’ capital expenditures, working capital needs, future dividend payments (if any), debt service requirements, and PBF Energy’s obligations under the Tax Receivable Agreement, for the next twelve months. However, our ability to generate sufficient cash flow from operations depends, in part, on petroleum oil market pricing and general economic, political and other factors beyond our control. As of June 30, 2022, we are in compliance with all covenants, including financial covenants, in all our debt agreements.

Cash Flow Analysis

The below cash flow analysis includes details by cash flow activity based on the results of PBF Energy. Material changes that exist between the PBF Energy and PBF LLC cash flows are explained thereafter.

Cash Flows from Operating Activities

Net cash provided by operating activities was $2,269.0 million for the six months ended June 30, 2022 compared to net cash provided by operating activities of $64.7 million for the six months ended June 30, 2021. Our operating cash flows for the six months ended June 30, 2022 include our net income of $1,232.5 million, and net changes in operating assets and liabilities reflecting cash proceeds of $276.3 million, driven by the timing of inventory purchases, payments for accrued expenses and accounts payable, and collections of accounts receivable. Change in accrued expenses is due primarily to an increase in renewable energy credit and emissions obligations, as a result of an increase in our unfunded RINs obligation as of June 30, 2022. Our overall increase in cash provided by operating activities also included change in the Tax Receivable Agreement liability of $286.5 million, depreciation and amortization of $253.0 million, change in the fair value of the contingent consideration of $127.9 million primarily associated with the Martinez Contingent Consideration, deferred income taxes of $60.2 million, pension and other post-retirement benefits costs of $23.8 million, stock-based compensation of $18.0 million, and loss on sale of assets of $0.3 million, partially offset by gain on extinguishment of debt related to the repurchase of a portion of our 2028 Senior Notes and 2025 Senior Notes of $3.8 million, net non-cash charges related to the change in the fair value of our inventory repurchase obligations of $3.4 million and change in the fair value of our catalyst obligations of $2.3 million. Our operating cash flows for the six months ended June 30, 2021 included our net income of $47.7 million, net changes in operating assets and liabilities reflect cash proceeds of $334.2 million, depreciation and amortization of $240.9 million, a net non-cash charges related to the change in the fair value of our inventory repurchase obligations of $42.2 million, change in the fair value of the contingent consideration of $26.1 million, pension and other post-retirement benefits costs of $25.3 million, stock-based compensation of $17.8 million, and change in the fair value of our catalyst obligations of $4.2 million, partially offset by net non-cash benefit of $669.6 million relating to an LCM inventory adjustment, deferred income taxes of $3.5 million, and gain on sale of assets of $0.6 million.

Cash Flows from Investing Activities

Net cash used in investing activities was $436.9 million for the six months ended June 30, 2022 compared to net cash used in investing activities of $139.6 million for the six months ended June 30, 2021. The net cash flows used in investing activities for the six months ended June 30, 2022 was comprised of cash outflows of capital expenditures totaling $226.5 million, expenditures for refinery turnarounds of $166.8 million, and expenditures for other assets of $43.6 million. The net cash used in investing activities for the six months ended June 30, 2021 was comprised of cash outflows of capital expenditures totaling $84.6 million, expenditures for refinery turnarounds of $38.5 million, and expenditures for other assets of $16.5 million.

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Cash Flows from Financing Activities

Net cash used in financing activities was $999.3 million for the six months ended June 30, 2022 compared to net cash used in financing activities of $54.9 million for the six months ended June 30, 2021. For the six months ended June 30, 2022, net cash used in financing activities consisted of net repayments on the Revolving Credit Facility of $900.0 million, net repayments on the PBFX Revolving Credit Facility of $70.0 million, $25.9 million related to the repurchase of the principal amount outstanding of the 2028 Senior Notes and the 2025 Senior Notes, excluding accrued interest, distributions and dividends of $19.6 million, payments on finance leases of $5.7 million, payments related to the CPI Operations LLC acquisition related earn-out obligation (the “PBFX Contingent Consideration”) of $2.7 million, and deferred financing costs and other of $7.8 million, partially offset by proceeds from insurance premium financing of $32.4 million. For the six months ended June 30, 2021, net cash used in financing activities consisted of net repayments on the PBFX Revolving Credit Facility of $40.0 million, distributions and dividends of $20.2 million, PBFX Contingent Consideration payments of $12.2 million, payments on finance leases of $7.1 million, and principal amortization payments of the $35.0 million PBF Rail term loan of $3.7 million, partially offset by proceeds from insurance premium financing of $28.0 million, and deferred financing costs and other of $0.3 million.

The cash flow activity of PBF LLC for the period ended June 30, 2022 is materially consistent with that of PBF Energy discussed above, other than changes in deferred income taxes and certain working capital items, which are different from PBF Energy due to certain tax related items not applicable to PBF LLC. Additionally, the PBF LLC cash flows reflect activity of the affiliate note payable with PBF Energy of $1.8 million included in cash flows from financing activities, which eliminates in consolidation at PBF Energy.

The cash flow activity of PBF LLC for the period ended June 30, 2021 is materially consistent with that of PBF Energy discussed above, other than changes in deferred income taxes and certain working capital items, which are different from PBF Energy due to certain tax related items not applicable to PBF LLC. Additionally, the PBF LLC cash flows reflect activity of the affiliate note payable with PBF Energy of $1.0 million included in cash flows from financing activities, which eliminates in consolidation at PBF Energy.

Debt and Credit Facility

PBF Holding Revolving Credit Facility

On May 25, 2022, we entered into an amendment of our Revolving Credit Agreement. Among other things, the Revolving Credit Agreement amended and extended the Revolving Credit Facility through January 2025 and increased the maximum commitment to $4.3 billion through May 2023 (currently set to adjust to $2.75 billion in May 2023 through January 2025). The amendments also redefine certain components of the Borrowing Base (as defined in the Revolving credit Agreement) to reflect the existence of the two tranches, Tranche A Commitments and Tranche B Commitments. The Tranche A Commitments total $1.55 billion and the Tranche B Commitments total $2.75 billion. The amendments also include changes to incorporate the adoption of SOFR as a replacement of LIBOR, changes to joint lead arrangers, bookrunners, syndication agents and other titles, and other changes related to the foregoing. In addition, an accordion feature allows for additional Tranche B Commitments of up to an additional $500.0 million plus an amount equal to the Tranche A Commitments for existing Tranche A lenders.

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Long-Term Debt Related Transactions

On July 11, 2022, we exercised our rights under the indenture governing the 9.25% senior secured notes due 2025 (the “2025 Senior Secured Notes”) to redeem all of the outstanding 2025 Senior Secured Notes at a price of 104.625% of the aggregate principal amount thereof plus accrued and unpaid interest. The aggregate redemption price for all 2025 Senior Secured Notes approximated $1.3 billion plus accrued and unpaid interest. The difference between the carrying value of the 2025 Senior Secured Notes on the date they were redeemed and the amount for which they were redeemed was $70.4 million and will be recorded as a Loss on extinguishment of debt in the Consolidated Statements of Operations in the third quarter of 2022.

During the three months ended June 30, 2022, we made a number of open market repurchases of our 2028 Senior Notes and 2025 Senior Notes that resulted in the extinguishment of $24.9 million in principal. Total cash consideration paid to repurchase the principal amount outstanding of the 2028 Senior Notes and the 2025 Senior Notes, excluding accrued interest, totaled $25.9 million and the Company recognized a $3.8 million gain on the extinguishment of debt during the three and six months ended June 30, 2022.

Liquidity

As of June 30, 2022, our operational liquidity was more than $4.4 billion, which consists of $2.1 billion of cash, excluding cash held at PBFX, and more than $2.3 billion of borrowing availability under our Revolving Credit Facility, which includes our cash on hand. In addition, as of June 30, 2022, PBFX had approximately $497.2 million of liquidity, including approximately $30.7 million in cash, and access to approximately $466.5 million under the PBFX Revolving Credit Facility.

As of June 30, 2022, outstanding letters of credit totaled approximately $1,051.0 million.

We have executed a plan to strengthen our balance sheet and increase our flexibility and responsiveness by incorporating certain adjustments to our operations and other cost saving measures. In an effort to preserve the positive recovery trends experienced during 2021 and the three and six months ended June 30, 2022, we remain committed to our plan in the current year with notable events within the past twelve months highlighted below:

•July 2022 full redemption of our 2025 Senior Secured Notes using cash on hand as of June 30, 2022, resulting in future annual interest savings of approximately $115.0 million;

•Extinguishment of $258.9 million of our 2028 Senior Notes and 2025 Senior Notes to date, resulting in annual cash interest savings of approximately $16.3 million;

•In May 2022, completed a multi-year extension of our Revolving Credit Facility, with an aggregate commitment of $4.3 billion.

•In October 2021, executed the Third Inventory Intermediation Agreement with J. Aron through 2024, covering certain crude oil, intermediate and finished products across our East Coast and Chalmette refineries;

•Continued various cost reduction and cash preservation initiatives, which includes a flexible capital expenditures strategy based on market conditions and operating expenses related to discretionary activities and third-party services; and

•Continued the temporary suspension of our quarterly dividend of $0.30 per share, which currently preserves approximately $35.0 million of cash each quarter, to support the balance sheet.

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We are actively responding to the ongoing rebalancing in the global oil markets. We continue to adjust our operational plans to the evolving market conditions and continue to target and execute expense reduction measures. We also remain committed to assessing other opportunities that could improve our liquidity, including by further reducing debt and/or potential sales of non-operating assets or other real property, although there can be no assurance that we will do so.

We may, at any time and from time to time, seek to continue to repurchase or retire our outstanding debt securities through cash purchases (and/or exchanges for equity or debt), in open-market purchases, block trades, privately negotiated transactions or otherwise, upon such terms and at such prices as we may determine. We will evaluate any such transactions in light of then-existing market conditions, taking into account our current liquidity and prospects for future access to capital, the trading prices of our debt securities, legal requirements and contractual restrictions and economic and market conditions. The amounts involved in any such transactions, individually or in the aggregate, may be material. We are not obligated to repurchase any of our debt securities other than as set forth in the applicable indentures, and repurchases may be made or suspended or discontinued at any time without prior notice.

We may incur additional indebtedness in the future, including additional secured indebtedness, subject to the satisfaction of any debt incurrence and, if applicable, lien incurrence limitation covenants in our existing financing agreements. Although we were in compliance with incurrence covenants during the six months ended June 30, 2022, to the extent that any of our activities triggered these covenants, there are no assurances that conditions could not change significantly, and that such changes could adversely impact our ability to meet some of these incurrence covenants at the time that we needed to. Failure to meet the incurrence covenants could impose certain incremental restrictions on, among other matters, our ability to incur new debt (including secured debt) and also may limit the extent to which we may pay future dividends, make new investments, repurchase our outstanding debt or stock or incur new liens.

We are in compliance as of June 30, 2022 with all covenants, including financial covenants, in all of our debt agreements.

Working Capital

PBF Energy’s working capital at June 30, 2022 was $559.5 million, consisting of $7,332.3 million in total current assets and $6,772.8 million in total current liabilities. PBF Energy’s working capital at December 31, 2021 was $1,439.5 million, consisting of $5,199.2 million in total current assets and $3,759.7 million in total current liabilities. PBF LLC’s working capital at June 30, 2022 was $535.0 million, consisting of $7,299.1 million in total current assets and $6,764.1 million in total current liabilities. PBF LLC’s working capital at December 31, 2021 was $1,385.6 million, consisting of $5,197.5 million in total current assets and $3,811.9 million in total current liabilities.

Capital Spending

Capital spending was $436.9 million for the six months ended June 30, 2022 and was primarily comprised of turnaround costs at our Delaware City, Chalmette, Torrance and Martinez refineries. Capital spend also included costs associated with safety related enhancements and facility improvements at our refineries and approximately $3.1 million of capital expenditures related to PBFX. Our full-year refining capital expenditures are expected to range from $500.0 million to $550.0 million. In addition, PBFX expects to spend an aggregate of approximately $12.0 million to $16.0 million in net capital expenditures for the remainder of 2022.

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Crude and Feedstock Supply Agreements

Certain of our purchases of crude oil under our agreements with foreign national oil companies require that we post letters of credit, if open terms are exceeded, and arrange for shipment. We pay for the crude when invoiced, at which time any applicable letters of credit are lifted. We have a contract with Saudi Arabian Oil Company (“Saudi Aramco”) pursuant to which we have been purchasing up to approximately 100,000 bpd of crude oil from Saudi Aramco that is processed at our Paulsboro refinery. In connection with the acquisition of the Chalmette refinery we entered into a contract with Petróleos de Venezuela S.A. (“PDVSA”) for the supply of 40,000 to 60,000 bpd of crude oil that can be processed at any of our East or Gulf Coast refineries. We have not sourced crude oil under this agreement since 2017 when PDVSA suspended deliveries due to the parties’ inability to agree to mutually acceptable payment terms and because of U.S. government sanctions against PDVSA. Notwithstanding the suspension, the U.S. government sanctions imposed against PDVSA and Venezuela prevented us from purchasing crude oil under this agreement. In connection with the closing of the acquisition of the Torrance refinery, we entered into a crude supply agreement with Exxon Mobil Oil Corporation (“ExxonMobil”) for approximately 60,000 bpd of crude oil that can be processed at our Torrance refinery. We currently purchase all of our crude and feedstock needs independently from a variety of suppliers on the spot market or through term agreements for our Delaware City and Toledo refineries.

We currently have various crude supply agreements with terms through 2025 with Shell plc for approximately 145,000 bpd, in the aggregate, to support our West Coast and Mid-Continent refinery operations. In addition, we have certain offtake agreements for our West Coast system with the same counterparty for clean products with varying terms up to 15 years.

Inventory Intermediation Agreement

On October 25, 2021, PBF Holding and its subsidiaries, Delaware City Refining Company (“DCR”), Paulsboro Refining Company (“PRC”) and Chalmette Refining, entered into the Third Inventory Intermediation Agreement with J. Aron, pursuant to which the terms of the previous inventory intermediation agreements were amended and restated in their entirety, including, among other things, pricing and an extension of terms. The Third Inventory Intermediation Agreement extends the term to December 31, 2024, which term may be further extended by mutual consent of the parties to December 31, 2025. If not extended or replaced, at expiration, we will be required to repurchase the inventories outstanding under the Third Inventory Intermediation Agreement at that time. On May 25, 2022, the PBF Entities entered into an amendment of the Third Inventory Intermediation Agreement to amend certain provisions thereof that related to and were impacted by amendments made on May 25, 2022 to the Revolving Credit Agreement.

At June 30, 2022, the LIFO value of the J. Aron Products included within Inventory in our Condensed Consolidated Balance Sheets was $572.2 million. We accrue a corresponding liability for such crude oil, intermediates and finished products.

Tax Receivable Agreement Obligations

PBF Energy has recognized, as of June 30, 2022 and December 31, 2021, a liability for the Tax Receivable Agreement of $334.8 million and $48.3 million, respectively, reflecting the estimated undiscounted amounts that PBF Energy expects to pay under the agreement, net of deferred tax asset valuation allowance recognized in accordance with ASC 740. As future taxable income is recorded, increases in our Tax Receivable Agreement liability may be necessary in conjunction with the revaluation of deferred tax assets. If PBF Energy does not have taxable income, PBF Energy generally is not required (absent a change of control or circumstances requiring an early termination payment) to make payments under the Tax Receivable Agreement for that taxable year because no benefit will have been actually realized. However, any tax benefits that do not result in realized benefits in a given tax year will likely generate tax attributes that may be utilized to generate benefits in previous or future tax years. The utilization of such tax attributes will result in payments under the Tax Receivable Agreement.

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These payment obligations, if any, are obligations of PBF Energy and not of PBF LLC or any of its subsidiaries including PBF Holding or PBFX. However, because PBF Energy is a holding company with no operations of its own, PBF Energy’s ability to make payments under the Tax Receivable Agreement is dependent upon a number of factors, including its subsidiaries’ ability to make distributions for the benefit of PBF LLC’s members, including PBF Energy, its ability, if necessary, to finance its obligations under the Tax Receivable Agreement and existing indebtedness which may limit PBF Energy’s subsidiaries’ ability to make distributions.

The foregoing are merely estimates - the actual payments could differ materially. It is possible that future transactions or events could increase or decrease the actual tax benefits realized and the corresponding Tax Receivable Agreement payments.

Dividend and Distribution Policy

PBF Energy

It is impossible to estimate the duration or ultimate financial impact of the COVID-19 pandemic on our business. As part of our strategic plan to navigate these current extraordinary and volatile markets, we have suspended PBF Energy’s quarterly dividend of $0.30 per share on its Class A common stock. We continue to monitor and evaluate our dividend policy as market conditions develop and our business outlook becomes clearer, however, we do not anticipate that our Board of Directors will declare a dividend in the foreseeable future.

The declaration, amount and payment of any future dividends on shares of PBF Energy Class A common stock will be at the sole discretion of PBF Energy’s Board of Directors, and we are not obligated under any applicable laws, our governing documents or any contractual agreements with our existing owners or otherwise to declare or pay any dividends or other distributions (other than the obligations of PBF LLC to make tax distributions to its members).

PBF Logistics LP

Due to the uncertainty of the full impact of the COVID-19 pandemic will have on its business, PBFX has decided to reduce their quarterly distribution to its minimum quarterly distribution of $0.30 per unit, which represents a shift in its distribution strategy to build cash flow coverage, de-lever the business and strengthen its financial resources as they continue to pursue potential organic growth projects or strategic acquisition opportunities. PBFX intends to continue to pay at least the minimum quarterly distribution of $0.30 per unit per quarter, or $1.20 per unit on an annualized basis, which aggregates to approximately $19.1 million per quarter or approximately $76.4 million on an annualized basis, based on the number of common units outstanding as of June 30, 2022, to the extent PBFX has sufficient cash from operations after the establishment of cash reserves and the payment of costs and expenses, including reimbursements of expenses to PBFX’s general partner. However, there is no guarantee that PBFX will pay the minimum quarterly distribution or any amount on the units it owns in any quarter. Even if PBFX’s cash distribution policy is not modified or revoked, the amount of distributions paid under the policy and the decision to make any distribution is determined by its general partner, taking into consideration the terms of PBFX’s partnership agreement and debt facilities.

During the six months ended June 30, 2022, PBFX made quarterly cash distributions totaling $37.6 million of which $18.0 million was distributed to PBF LLC and the balance was distributed to its public unitholders.

On July 28, 2022, the Board of Directors of PBFX’s general partner, PBF Logistics GP LLC, announced a distribution of $0.30 per unit on outstanding common units of PBFX. The distribution is payable on August 25, 2022 to PBFX common unitholders of record at the close of business on August 11, 2022.

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As of June 30, 2022, PBFX had $3.5 million outstanding letters of credit, $466.5 million available under the PBFX Revolving Credit Facility and cash and cash equivalents of $30.7 million to fund its operations, if necessary. Accordingly, as of June 30, 2022, there was sufficient cash and cash equivalents and borrowing capacity under its credit facilities available to PBFX to make distributions to unitholders.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks, including changes in commodity prices and interest rates. Our primary commodity price risk is associated with the difference between the prices we sell our refined products and the prices we pay for crude oil and other feedstocks. We may use derivative instruments to manage the risks from changes in the prices of crude oil and refined products, natural gas, interest rates, or to capture market opportunities.

Commodity Price Risk

Our earnings, cash flow and liquidity are significantly affected by a variety of factors beyond our control, including the supply of, and demand for, crude oil, other feedstocks, refined products and natural gas. The supply of and demand for these commodities depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, planned and unplanned downtime in refineries, pipelines and production facilities, production levels, the availability of imports, the marketing of competitive and alternative fuels, and the extent of government regulation. As a result, the prices of these commodities can be volatile. Our revenues fluctuate significantly with movements in industry refined product prices, our cost of sales fluctuates significantly with movements in crude oil and feedstock prices and our operating expenses fluctuate with movements in the price of natural gas. We manage our exposure to these commodity price risks through our supply and offtake agreements as well as through the use of various commodity derivative instruments.

We may use non-trading derivative instruments to manage exposure to commodity price risks associated with the purchase or sale of crude oil and feedstocks, finished products and natural gas outside of our supply and offtake agreements. The derivative instruments we use include physical commodity contracts and exchange-traded and over-the-counter financial instruments. We mark-to-market our commodity derivative instruments and recognize the changes in their fair value in our statements of operations.

At June 30, 2022 and December 31, 2021, we had gross open commodity derivative contracts representing 40.9 million barrels and 42.1 million barrels, respectively, with an unrealized net loss of $19.2 million and $12.0 million, respectively. The open commodity derivative contracts as of June 30, 2022 expire at various times during 2022 and 2023.

We carry inventories of crude oil, intermediates and refined products (“hydrocarbon inventories”) on our Condensed Consolidated Balance Sheets, the values of which are subject to fluctuations in market prices. Our hydrocarbon inventories totaled approximately 34.2 million barrels and 30.2 million barrels at June 30, 2022 and December 31, 2021, respectively. The average cost of our hydrocarbon inventories was approximately $82.78 and $78.29 per barrel on a LIFO basis at June 30, 2022 and December 31, 2021, respectively. At June 30, 2022 and December 31, 2021, the replacement value of inventory exceeded the LIFO carrying value. If market prices of our inventory decline to a level below our average cost, we may be required to write down the carrying value of our hydrocarbon inventories to market.

Our predominant variable operating cost is energy, which is comprised primarily of natural gas and electricity. We are therefore sensitive to movements in natural gas prices. Assuming normal operating conditions, we expect our annual consumption to range from 75 million to 95 million MMBTUs of natural gas amongst our six refineries. Accordingly, a $1.00 per MMBTU change in natural gas prices would increase or decrease our natural gas costs by approximately $75.0 million to $95.0 million.

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Compliance Program Price Risk

We are exposed to market risks related to our obligations to buy and the volatility in the price of credits needed to comply with various governmental and regulatory compliance programs, which includes RINs, required to comply with the Renewable Fuel Standard. Our overall RINs obligation is based on a percentage of our domestic shipments of on-road fuels as established by Environmental Protection Agency. To the degree we are unable to blend the required amount of biofuels to satisfy our RINs obligation, we must purchase RINs on the open market. To mitigate the impact of the market risk relating to our obligations on our results of operations and cash flows, we may elect to purchase RINs or other environmental credits as part of our liability management strategy.

In addition, we are exposed to risks associated with complying with federal and state legislative and regulatory measures to address greenhouse gas and other emissions. Requirements to reduce emissions could result in increased costs to operate and maintain our facilities as well as implement and manage new emission controls and programs put in place. For example, in September 2016, the state of California extended AB 32, to reduce greenhouse gas emission targets to 40% below 1990 levels by 2030. Compliance with such emission standards may require the purchase of emission credits or similar instruments.

Certain of these compliance contracts or instruments qualify as derivative instruments. For certain of these contracts, we elect the normal purchase normal sale exception under ASC 815, Derivatives and Hedging, for such instruments, and therefore do not record these contracts at their fair value.

Interest Rate Risk

The maximum commitment under our Revolving Credit Facility is $4.3 billion. Borrowings under the Revolving Credit Facility bear interest either at the Alternative Base Rate plus the Applicable Margin or at the Term SOFR Rate plus the Applicable Margin, all as defined in the Revolving Credit Agreement. At June 30, 2022, we had no outstanding balance in variable interest debt. If this facility was fully drawn, a 1.0% change in the interest rate would increase or decrease our interest expense by approximately $22.4 million annually.

The PBFX Revolving Credit Facility, with a maximum commitment of $500.0 million, bears interest either at the Alternative Base Rate plus the Applicable Margin or at Adjusted LIBOR plus the Applicable Margin, all as defined in the PBFX Revolving Credit Agreement. At June 30, 2022, PBFX had $30.0 million outstanding in variable interest debt. If this facility was fully drawn, a 1.0% change in the interest rate would increase or decrease our interest expense by approximately $3.8 million annually.

We also have interest rate exposure in connection with our Third Inventory Intermediation Agreement under which we pay a time value of money charge based on LIBOR.

Credit Risk

We are subject to risk of losses resulting from nonpayment or nonperformance by our counterparties. We continue to closely monitor the creditworthiness of customers to whom we grant credit and establish credit limits in accordance with our credit policy.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

PBF Energy and PBF LLC conducted separate evaluations, under the supervision and with the participation of each company’s management, including the principal executive officer and principal financial officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934 as amended (the “Exchange Act”)) as of June 30, 2022. Based upon these evaluations, as required by Exchange Act Rule 13a-15(b), the principal executive officer and principal financial officer, in each case, concluded that the disclosure controls and procedures are effective as of June 30, 2022.

Changes in Internal Control Over Financial Reporting

There has been no change in PBF Energy’s or PBF LLC’s internal controls over financial reporting during the quarter ended June 30, 2022 that has materially affected, or is reasonably likely to materially affect, PBF Energy’s or PBF LLC’s internal controls over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

On September 27, 2021, DCR received a Notice of Administrative Penalty Assessment and Secretary’s Order from the Delaware Department of Natural Resources and Environmental Control, seeking to impose penalties in the amount of $285,000 related to alleged Title V permit violations occurring in 2019 and 2020. On October 15, 2021, DCR filed a Notice of Appeal before Delaware’s Environmental Appeals Board, contesting the Secretary’s findings and requesting a hearing. On November 2, 2021, the Environmental Appeals Board scheduled a Pre-Hearing Conference for April 8, 2022 and Hearing Date for April 26, 2022. On March 17, 2022, the parties entered into a settlement agreement, pursuant to which DCR did not admit to any of the allegations and denied any liability but agreed to pay an administrative penalty of $250,000 and withdraw its appeal.

In connection with the acquisition of the Torrance refinery and related logistics assets, we assumed certain pre-existing environmental liabilities related to certain environmental remediation obligations to address existing soil and groundwater contamination and monitoring activities, which reflect the estimated cost of the remediation obligations. In addition, in connection with the acquisition of the Torrance refinery and related logistics assets, we purchased a ten-year, $100.0 million environmental insurance policy to insure against unknown environmental liabilities.

On February 4, 2021, we received a letter from the South Coast Air Quality Management District (“SCAQMD”) proposing to settle a Notice of Violation (“NOV”) relating to 15 Title V deviations alleged to have occurred in the second half of 2017 for $1.3 million. On October 8, 2021, we reached settlement in principle with the SCAQMD to pay a penalty of $250,000 for 14 of the Title V deviations and a penalty of $1.3 million for the remaining deviation, which covers the period of 2017 through 2021, and the settlement agreements have been executed.

On April 17, 2019, we received a NOV from the SCAQMD relating to Title V deviations alleged to have occurred in second half of 2018 self-reported Title V deviations. In May 2022, the SCAQMD requested that we present a settlement proposal to resolve the NOV. On June 16, 2022, we presented a settlement offer of $456,820 to settle the NOV and are awaiting a response from the SCAQMD. On July 22, 2022, the SCAQMD presented a counter proposal of $1.2 million. We are currently evaluating the SCAQMD’s proposal.

On December 4, 2020, the Pennsylvania Department of Environmental Protection (“PaDEP”) issued a draft Consent Order and Agreement (“CAO”) to PBF Logistics Products Terminals LLC (“PLPT”) with respect to two alleged violations at the Philadelphia terminal for failure to: (i) test and inspect regulated piping as required in accordance with industry standards; and (ii) have a professional engineering certification that all above ground storage tanks meet the applicable performance standards and requirements as a result of an alleged release of oil on January 10, 2020 into the Schuylkill River resulting from a pipe leak that was not contained by emergency containment structure. The draft order included a proposed penalty of $800,000. On December 15, 2021, we entered into a final CAO and agreed to pay the $800,000 penalty. Under the final CAO, we capped our future liability at $250,000 if PaDEP brought a subsequent enforcement action under the Pennsylvania Clean Streams Law (“CSL”) for environmental damage allegedly caused by the release of oil from PLPT’s operational violations. Under the final CAO, we also reserved our rights to challenge any subsequent enforcement action brought by PaDEP under the CSL. On January 13, 2022, we received from PaDEP, a Consent Assessment of Civil Penalty alleging violations under the CSL of over $1.0 million. However, because of the CAO cap, the PaDEP’s penalty demand to settle these alleged violations is $250,000. On April 13, 2022, PLPT entered into the final CAO and agreed to pay the $250,000 penalty.

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In connection with self-reported flaring events that occurred at the Paulsboro Refinery between 2016 and 2020, in October 2021, the New Jersey Department of Environmental Protection (“NJDEP”) initiated discussions with PRC regarding potential penalties for alleged violations related to the self-reported flaring events. Although a formal NOV has not been issued, NJDEP provided a calculation sheet of potential penalties totaling approximately $1.6 million. We are currently challenging certain of those potential penalties and are in discussions with NJDEP regarding a potential settlement. On March 17, 2022, the parties reached an agreement with respect to an agreed total penalty amount of $1.0 million. The parties are in the process of negotiating a settlement agreement.

As the ultimate outcomes of the matters discussed above are uncertain, we cannot currently estimate the final amount or timing of their resolution but any such amount is not expected to have a material impact on our financial position, results of operations, or cash flows, individually or in the aggregate.

On February 17, 2017, in Arnold Goldstein, et al. v. Exxon Mobil Corporation, et al., we and PBF LLC, and our subsidiaries, PBF Western Region LLC and Torrance Refining Company LLC and the manager of our Torrance refinery along with ExxonMobil were named as defendants in a class action and representative action complaint filed on behalf of Arnold Goldstein, John Covas, Gisela Janette La Bella and others similarly situated. The complaint was filed in the Superior Court of the State of California, County of Los Angeles and alleges negligence, strict liability, ultra-hazardous activity, a continuing private nuisance, a permanent private nuisance, a continuing public nuisance, a permanent public nuisance and trespass resulting from the February 18, 2015 electrostatic precipitator (“ESP”) explosion at the Torrance refinery which was then owned and operated by ExxonMobil. The operation of the Torrance refinery by the PBF entities subsequent to our acquisition in July 2016 is also referenced in the complaint. To the extent that plaintiffs’ claims relate to the ESP explosion, ExxonMobil retained responsibility for any liabilities that would arise from the lawsuit pursuant to the agreement relating to the acquisition of the Torrance refinery. On July 2, 2018, the court granted leave to plaintiffs to file a Second Amended Complaint alleging groundwater contamination. With the filing of the Second Amended Complaint, plaintiffs added an additional plaintiff, Hany Youssef. On October 15, 2019, the judge granted certification to two limited classes of property owners with Youssef as the sole class representative and named plaintiff, rejecting two other proposed subclasses based on negligence and on strict liability for ultrahazardous activities. The certified subclasses relate to trespass claims for ground contamination and nuisance for air emissions. On February 5, 2021, our motion for Limited Extension of Discovery Cut-Off and a Motion by plaintiffs for Leave to File Third Amended Complaint were heard by the court. On May 5, 2021, the Court granted plaintiffs leave to amend their complaint for the third time to substitute Navarro for Youssef. On May 12, 2021, plaintiffs filed their Third Amended Complaint (“TAC”) that contained significant changes and new claims, including individual claims, that were not included in the motion for leave to amend plaintiffs presented to the Court. On June 9, 2021, we filed a Motion to Dismiss/Strike the TAC. On June 23, 2021, plaintiffs filed their opposition to our Motion to Dismiss/Strike, to which we filed our reply on July 2, 2021. A hearing on the Motion to Dismiss/Strike the TAC was held on August 2, 2021 and the court ordered that the TAC be struck and that the parties meet and confer with respect to the complaint. After meeting and conferring, plaintiffs agreed to submit a corrected TAC with changes reflecting the removal of Youssef and the substitution of Navarro as the named Plaintiff. On August 23, 2021, the Court approved the parties’ stipulation to take Navarro’s deposition on September 23, 2021. Also, on August 23, 2021, the Court approved the parties’ stipulation to continue the pretrial dates with the new deadlines. On October 8, 2021, plaintiffs filed their Motion to Appoint Navarro as Class Representative. On October 29, 2021, we filed our opposition to this motion. On November 15, 2021, plaintiffs filed their reply. On February 8, 2022, the Court held a hearing on plaintiff’s Motion to Appoint Navarro as Class Representative but did not act on the motion. Instead, the court ordered the parties to submit draft orders for the Court’s consideration. After considering the parties’ proposed orders, on July 5, 2022, the Court issued a final order ruling that Plaintiffs’ Motion to Substitute José Navarro as Class Representative was denied and decertifying both of Plaintiffs’ proposed Air and Ground Subclasses. The order provided that the case will proceed with Navarro as the sole plaintiff and required the parties to meet and confer and propose a schedule for the remaining pretrial dates and a trial date. On July 19, 2022, Plaintiff filed a petition with the Ninth Circuit Court of Appeal seeking permission to appeal the District Court’s decertification order finding that Navarro is an inadequate class representative. Our answer to the petition is due July 29, 2022.

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We presently believe the outcome of this litigation will not have a material impact on our financial position, results of operations, or cash flows.

On September 7, 2021, Martinez Refining Company LLC (“MRC”) filed a Verified Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief against the Bay Area Air Quality Management District (“BAAQMD”) requesting the Court to declare as invalid, unenforceable, and ultra vires the BAAMQD’s July 21, 2021, adoption of Rule 6-5 Amendment. MRC is also seeking a writ of mandate ordering the BAAQMD to vacate and rescind the adoption of the Rule 6-5 Amendment, as well as appropriate declaratory relief, injunctive relief, and reasonable costs incurred by MRC to bring this Petition/Complaint. In the Petition/Complaint MRC alleges that: its feasible alternative Particulate Matter (“PM”) reduction proposal that would achieve significant PM reductions while avoiding the significant costs and environmental impacts of the BAAQMD’s adopted PM limit, was improperly removed from consideration and not presented to the BAAQMD Board when the Rule 6-5 Amendment was adopted with the current PM standard; when adopting the Rule 6-5 Amendment, the BAAQMD flagrantly ignored numerous mandatory requirements of the California Environmental Quality Act and the California Health and Safety Code; the BAAQMD’s adoption of the Rule 6-5 Amendment also violated California common law; and these failings render the Rule 6-5 Amendment ultra vires, illegal, and unenforceable. We held mandatory settlement conferences with the BAAQMD on October 27, 2021 and December 15, 2021. We expect another mandatory settlement conference to be held in the third quarter of 2022. The parties are currently compiling the administrative record for completeness and certification. We presently believe the outcome will not have a material impact on our financial position, results of operations, or cash flows.

The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), also known as “Superfund,” imposes liability, without regard to fault or the legality of the original conduct, on certain classes of persons who are considered to be responsible for the release of a “hazardous substance” into the environment. These persons include the current or former owner or operator of the disposal site or sites where the release occurred and companies that disposed of or arranged for the disposal of the hazardous substances. Under CERCLA, such persons may be subject to joint and several liability for investigation and the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies. As discussed more fully above, certain of our sites are subject to these laws and we may be held liable for investigation and remediation costs or claims for natural resource damages. It is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances or other pollutants released into the environment. Analogous state laws impose similar responsibilities and liabilities on responsible parties. In our current normal operations, we have generated waste, some of which falls within the statutory definition of a “hazardous substance” and some of which may have been disposed of at sites that may require cleanup under Superfund.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Exchange of PBF LLC Series A Units to PBF Energy Class A Common Stock

In the three months ended June 30, 2022, a total of 24,748 PBF LLC Series A Units were exchanged for 24,748 shares of PBF Energy Class A common stock in transactions exempt from registration under Section 4(a)(2) of the Securities Act. We received no other consideration in connection with any exchanges. No exchanges were made by any of our directors or current executive officers.

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Item 6. Exhibits

The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this report and such Exhibit Index is incorporated herein by reference.

EXHIBIT INDEX

Exhibit Number	Description
10.1†	Form of 2023-2025 Performance Share Unit Agreement (incorporated by reference to Exhibit 10.1 filed with PBF Energy Inc.’s Current Report on Form 8-K dated April 12, 2022 (File No. 001-35764)).
10.2†	Form of 2023-2025 Performance Unit Agreement (incorporated by reference to Exhibit 10.2 filed with PBF Energy Inc.’s Current Report on Form 8-K dated April 12, 2022 (File No. 001-35764)).
10.3†	Amendment No. 1 to PBF Energy Inc. Amended and Restated 2017 Equity Incentive Plan (incorporated by reference to Appendix A to PBF Energy Inc.’s Definitive Proxy Statement on Schedule 14A filed on April 13, 2022 (File No. 001-35764)).
10.4**	Third Amendment to Senior Secured Revolving Credit Agreement, dated May 2, 2018 (incorporated by reference to Exhibit 10.1 filed with PBF Energy Inc.’s Current Report on Form 8-K dated May 27, 2022 (File No. 001-35764)).
10.5**	First Amendment to the Third Amended and Restated Inventory Intermediation Agreement dated as of October 25, 2021, among J. Aron & Company LLC, PBF Holding Company LLC, Delaware City Refining Company LLC, Paulsboro Refining Company LLC, and Chalmette Refining, L.L.C (incorporated by reference to Exhibit 10.2 filed with PBF Energy Inc.’s Current Report on Form 8-K dated May 27, 2022 (File No. 001-35764)).
31.1*	Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Energy Inc. pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Erik Young, Chief Financial Officer of PBF Energy Inc. pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3*	Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Energy Company LLC pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.4*	Certification of Erik Young, Chief Financial Officer of PBF Energy Company LLC pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1* (1)	Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Energy Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2* (1)	Certification of Erik Young, Chief Financial Officer of PBF Energy Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.3* (1)	Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Energy Company LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.4* (1)	Certification of Erik Young, Chief Financial Officer of PBF Energy Company LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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———————

*	Filed herewith.
†	Indicates management compensatory plan or arrangement.
(1)	This exhibit should not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.
**	Denotes that fees, payment terms and other competitively sensitive business terms have been redacted in accordance with Item 601(b)(10)(iv) Regulation S-K.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

		PBF Energy Inc.
Date:	July 28, 2022		By:	/s/ Erik Young
				Erik Young Senior Vice President, Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

		PBF Energy Company LLC
Date:	July 28, 2022		By:	/s/ Erik Young
				Erik Young Senior Vice President, Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

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