LEASES (Notes)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Lessee, Finance Leases

LEASES

Lease Position as of December 31, 2021 and December 31, 2020

The table below presents the lease related assets and liabilities recorded on the Company’s Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020:

(in millions)	Classification on the Balance Sheet	December 31, 2021		December 31, 2020
Assets
Operating lease assets - third party	Lease right of use assets - third party	$	635.8	$	836.3
Operating lease assets - affiliate	Lease right of use assets - affiliate	485.4		571.0
Finance lease assets	Lease right of use assets - third party	81.2		80.4
Total lease right of use assets		$	1,202.4	$	1,487.7
Liabilities
Current liabilities:
Operating lease liabilities - third party	Current operating lease liabilities - third party	$	64.8	$	78.3
Operating lease liabilities - affiliate	Current operating lease liabilities - affiliate	90.7		85.6
Finance lease liabilities - third party	Accrued expenses	11.1		14.4
Noncurrent liabilities:
Operating lease liabilities - third party	Long-term operating lease liabilities - third party	570.3		755.9
Operating lease liabilities - affiliate	Long-term operating lease liabilities - affiliate	394.7		485.4
Finance lease liabilities - third party	Long-term financing lease liabilities - third party	70.6		68.3
Total lease liabilities		$	1,202.2	$	1,487.9

Lease Costs

The table below presents certain information related to costs for the Company’s leases for the year ended December 31, 2021 and December 31, 2020:

Lease Costs (in millions)	December 31, 2021		December 31, 2020
Components of total lease costs:
Finance lease costs
Amortization of right of use assets	$	16.1	$	14.0
Interest on lease liabilities	4.6		4.3
Operating lease costs	299.1		291.2
Short-term lease costs	59.3		92.3
Variable lease costs	31.6		31.1
Total lease costs	$	410.7	$	432.9

Sale-leaseback Transactions

On April 17, 2020, the Company closed on the sale of five hydrogen plants to Air Products in a sale-leaseback transaction for gross cash proceeds of $530.0 million and recognized a gain of $471.1 million. In connection with the sale, the Company entered into a transition services agreement through which Air Products will exclusively supply hydrogen, steam, carbon dioxide and other products (the “Products”) to the Martinez, Torrance and Delaware City refineries for a specified period (not expected to exceed 18 months). The transition services agreement also requires certain maintenance and operating activities to be provided by PBF Holding, for which the Company will be reimbursed, during the term of the agreement. In August 2020, the parties executed long-term supply agreements through which Air Products will supply the Products for a term of fifteen years at these same refineries. As a result of these transactions, the Company recorded lease right of use assets and corresponding operating lease liabilities of approximately $504.0 million. There were no net gains or losses on any sale-leaseback transactions for the year ended December 31, 2021.

Other Information

The table below presents supplemental cash flow information related to leases for the year ended December 31, 2021 and December 31, 2020 (in millions):

	Years Ended December 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	297.9	$	292.4
Operating cash flows for finance leases	4.6		4.3
Financing cash flows for finance leases	17.8		12.4
Supplemental non-cash amounts of lease liabilities arising from obtaining or remeasuring right-of-use assets	(106.6)		702.0

Lease Term and Discount Rate

The table below presents certain information related to the weighted average remaining lease term and weighted average discount rate for the Company’s leases as of December 31, 2021:

Weighted average remaining lease term - operating leases	9.8 years
Weighted average remaining lease term - finance leases	6.5 years
Weighted average discount rate - operating leases	13.4	%
Weighted average discount rate - finance leases	7.4	%

Undiscounted Cash Flows

The table below reconciles the fixed component of the undiscounted cash flows for each of the periods presented to the lease liabilities recorded on the Consolidated Balance Sheets as of December 31, 2021:

Amounts due in the year ended December 31, (in millions)	Finance Leases		Operating Leases
2022	$	16.5	$	280.6
2023	16.4		252.4
2024	15.7		243.0
2025	14.2		202.3
2026	13.8		166.0
Thereafter	25.6		903.9
Total minimum lease payments	102.2		2,048.2
Less: effect of discounting	20.5		927.7
Present value of future minimum lease payments	81.7		1,120.5
Less: current obligations under leases	11.1		155.5
Long-term lease obligations	$	70.6	$	965.0

As of December 31, 2021, the Company has entered into certain leases that have not yet commenced. Such leases include a 15-year lease for water treatment equipment, with future lease payments estimated to total approximately $34.1 million. No other such pending leases, either individually or in the aggregate, are material. There are no material lease arrangements in which the Company is the lessor.

In the normal course of business, the Company enters into certain affiliate lease arrangements with PBFX for the use of certain storage, terminaling and pipeline assets. The Company believes the terms and conditions under these leases are generally no less favorable to either party than those that could have been negotiated with unaffiliated parties with respect to similar services. The terms for these affiliate leases generally range from seven to fifteen years. The Company uses the same methodology for discounting the lease payments on affiliate leases as it does for third party leases as described above. For the year ended December 31, 2021 and December 31, 2020 , the Company incurred operating lease costs, related to affiliate operating leases, of $129.1 million and $129.1 million, respectively.

Lessee, Operating Leases

LEASES

Lease Position as of December 31, 2021 and December 31, 2020

The table below presents the lease related assets and liabilities recorded on the Company’s Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020:

(in millions)	Classification on the Balance Sheet	December 31, 2021		December 31, 2020
Assets
Operating lease assets - third party	Lease right of use assets - third party	$	635.8	$	836.3
Operating lease assets - affiliate	Lease right of use assets - affiliate	485.4		571.0
Finance lease assets	Lease right of use assets - third party	81.2		80.4
Total lease right of use assets		$	1,202.4	$	1,487.7
Liabilities
Current liabilities:
Operating lease liabilities - third party	Current operating lease liabilities - third party	$	64.8	$	78.3
Operating lease liabilities - affiliate	Current operating lease liabilities - affiliate	90.7		85.6
Finance lease liabilities - third party	Accrued expenses	11.1		14.4
Noncurrent liabilities:
Operating lease liabilities - third party	Long-term operating lease liabilities - third party	570.3		755.9
Operating lease liabilities - affiliate	Long-term operating lease liabilities - affiliate	394.7		485.4
Finance lease liabilities - third party	Long-term financing lease liabilities - third party	70.6		68.3
Total lease liabilities		$	1,202.2	$	1,487.9

Lease Costs

The table below presents certain information related to costs for the Company’s leases for the year ended December 31, 2021 and December 31, 2020:

Lease Costs (in millions)	December 31, 2021		December 31, 2020
Components of total lease costs:
Finance lease costs
Amortization of right of use assets	$	16.1	$	14.0
Interest on lease liabilities	4.6		4.3
Operating lease costs	299.1		291.2
Short-term lease costs	59.3		92.3
Variable lease costs	31.6		31.1
Total lease costs	$	410.7	$	432.9

Sale-leaseback Transactions

On April 17, 2020, the Company closed on the sale of five hydrogen plants to Air Products in a sale-leaseback transaction for gross cash proceeds of $530.0 million and recognized a gain of $471.1 million. In connection with the sale, the Company entered into a transition services agreement through which Air Products will exclusively supply hydrogen, steam, carbon dioxide and other products (the “Products”) to the Martinez, Torrance and Delaware City refineries for a specified period (not expected to exceed 18 months). The transition services agreement also requires certain maintenance and operating activities to be provided by PBF Holding, for which the Company will be reimbursed, during the term of the agreement. In August 2020, the parties executed long-term supply agreements through which Air Products will supply the Products for a term of fifteen years at these same refineries. As a result of these transactions, the Company recorded lease right of use assets and corresponding operating lease liabilities of approximately $504.0 million. There were no net gains or losses on any sale-leaseback transactions for the year ended December 31, 2021.

Other Information

The table below presents supplemental cash flow information related to leases for the year ended December 31, 2021 and December 31, 2020 (in millions):

	Years Ended December 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	297.9	$	292.4
Operating cash flows for finance leases	4.6		4.3
Financing cash flows for finance leases	17.8		12.4
Supplemental non-cash amounts of lease liabilities arising from obtaining or remeasuring right-of-use assets	(106.6)		702.0

Lease Term and Discount Rate

The table below presents certain information related to the weighted average remaining lease term and weighted average discount rate for the Company’s leases as of December 31, 2021:

Weighted average remaining lease term - operating leases	9.8 years
Weighted average remaining lease term - finance leases	6.5 years
Weighted average discount rate - operating leases	13.4	%
Weighted average discount rate - finance leases	7.4	%

Undiscounted Cash Flows

The table below reconciles the fixed component of the undiscounted cash flows for each of the periods presented to the lease liabilities recorded on the Consolidated Balance Sheets as of December 31, 2021:

Amounts due in the year ended December 31, (in millions)	Finance Leases		Operating Leases
2022	$	16.5	$	280.6
2023	16.4		252.4
2024	15.7		243.0
2025	14.2		202.3
2026	13.8		166.0
Thereafter	25.6		903.9
Total minimum lease payments	102.2		2,048.2
Less: effect of discounting	20.5		927.7
Present value of future minimum lease payments	81.7		1,120.5
Less: current obligations under leases	11.1		155.5
Long-term lease obligations	$	70.6	$	965.0

As of December 31, 2021, the Company has entered into certain leases that have not yet commenced. Such leases include a 15-year lease for water treatment equipment, with future lease payments estimated to total approximately $34.1 million. No other such pending leases, either individually or in the aggregate, are material. There are no material lease arrangements in which the Company is the lessor.

In the normal course of business, the Company enters into certain affiliate lease arrangements with PBFX for the use of certain storage, terminaling and pipeline assets. The Company believes the terms and conditions under these leases are generally no less favorable to either party than those that could have been negotiated with unaffiliated parties with respect to similar services. The terms for these affiliate leases generally range from seven to fifteen years. The Company uses the same methodology for discounting the lease payments on affiliate leases as it does for third party leases as described above. For the year ended December 31, 2021 and December 31, 2020 , the Company incurred operating lease costs, related to affiliate operating leases, of $129.1 million and $129.1 million, respectively.