UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(Mark one)
 
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: SeptemberJune 30, 20152019
Oror
¨☐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)
 

DELAWAREDelaware45-3763855
Delaware61-1622166
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
  
One Sylvan Way, Second Floor
ParsippanyNew Jersey07054
(Address of principal executive offices)(Zip Code)
(973) (973) 455-7500
(Registrant’s telephone number, including area code)
 


Securities registered pursuant to Section 12(b) of the Act.
Title of each classTrading SymbolName of each exchange on which registered
Common Stockpar value $.001PBFNew 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 [x][ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

PBF Energy Inc.             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, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company”, and “smaller reporting“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 LLCLarge accelerated filer
☐
Accelerated filer o
 
Non-accelerated filerþ
☑
Smaller reporting companyo
☐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 [x]☑
PBF Energy Company LLC    Yes ☐ No ☑

As of July 30, 2019, PBF Energy Inc. had outstanding 119,894,441 shares of Class A common stock and 20 shares of Class B common stock. PBF Energy Inc. is the sole managing member of, and owner of an equity interest representing approximately 99.0% of the outstanding economic interest in PBF Energy Company LLC as of June 30, 2019. 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. As of December 4, 2015, approximately 95.1% of the outstanding economic interests in PBF Energy Company LLC were owned by PBF Energy Inc. and the remaining economic interests were held by the members of PBF Energy Company LLC, other than PBF Energy Inc.
 






PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBERJUNE 30, 20152019
TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
34
     
PART I – FINANCIAL INFORMATION
 
    
  ITEM 1.
Financial Statements (Unaudited)
PBF Energy Inc. 
   
Condensed Consolidated Balance Sheets as of SeptemberJune 30, 20152019 and December 31, 2014
5
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014
6
Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2015 and 20142018
7
   
Condensed Consolidated Statements of Cash FlowsOperations for the ninethree and six months ended SeptemberJune 30, 20152019 and 20142018
8
   
Notes to Condensed Consolidated Financial Statements of Comprehensive Income for the three and six months ended June 30, 2019 and 2018
9
Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2019 and 2018
10
  
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018
12
PBF Energy Company LLC
Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018
14
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018
15
Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2019 and 2018
16
Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2019 and 2018
17
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018
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
3252
  ITEM 3.
Quantitative and Qualitative Disclosures about Market Risk
5383
  ITEM 4.
Controls and Procedures
5485
  
PART II – OTHER INFORMATION
 
    
  ITEM 1.
Legal Proceedings
5586
  ITEM 1A.
Risk Factors
5690
  ITEM 22.
Unregistered Sales of Equity Securities and Use of Proceeds
5790
  ITEM 6.
Exhibits
5791
SIGNATURES
5892


This combined Quarterly Report on 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 Delaware limited liability company and holding company whose primary asset is an equity interest in PBF LLC. PBF Energy is the sole managing member is PBF Energy Inc. ("PBF Energy"). As of, September 30, 2015,and owner of an equity interest representing approximately 94.4%99.0% of the outstanding economic interests in PBF LLC were owned byas of June 30, 2019. PBF Energy operates and controls all of the remaining economic interests were held bybusiness and affairs and consolidates the membersfinancial results of PBF LLC, other than PBF Energy. PBF LLC and its subsidiaries' business and affairs are operated and controlled by PBF Energy.subsidiaries. PBF LLC is a holding company for the companies that directly and indirectly own and operate PBF Energy'sour business. PBF Holding Company LLC (“PBF Holding”) is a wholly-owned subsidiary of PBF LLC.LLC and PBF Finance Corporation (“PBF Finance”) is a wholly-owned subsidiary of PBF Holding. As of June 30, 2019, PBF LLC also holds a 53.7%48.2% limited partner interest and a non-economic general partner interest and all of the incentive distribution rights in PBF Logistics LP ("PBFX"(“PBFX” or the "Partnership"“Partnership”), a publicly traded master limited partnership. PBF LLC,Energy, through its ownership of the general partner of PBFX,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'sPBFX’s unit holders other than PBF LLC. Collectively, PBF LLCEnergy and its consolidated subsidiaries, including PBF LLC, PBF Holding, and PBFX are referred to hereinafter as the "Company"“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.


2



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.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 upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results.
Important factors that could cause actual results to differ materially from our expectations, which we refer to as “cautionary statements,” are disclosed in the section entitled “Risk Factors” in our prospectus dated October 30, 2015 (Registration No. 333-206728) filed with the SEC on October 30, 2015 (the “Prospectus”)under “Management's Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this QuarterlyForm 10-Q, the Annual Report on Form 10-Q.10-K for the year ended December 31, 2018 of PBF Energy and PBF LLC, which we refer to as our 2018 Annual Report on Form 10-K, and in our other filings with the U.S. Securities and Exchange Commission (“SEC”). All forward-looking information in this Quarterly Report on Form 10-Q and subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Some of the factors that we believe could affect our results include:
•supply, demand, prices and other market conditions for our products, including volatility in commodity prices;
•the effects of competition in our markets;
•changes in currency exchange rates, interest rates and capital costs;
•adverse developments in our relationship with both our key employees and unionized employees;
•our ability to operate our businesses efficiently, manage capital expenditures and costs (including general and administrative expenses) and generate earnings and cash flow;
•our indebtedness;
•our substantial indebtedness;expectations with respect to our capital improvement and turnaround projects;
•our supply and inventory intermediation arrangements expose us to counterparty credit and performance risk;
•termination of our Inventory Intermediation Agreements with J. Aron, which 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 agreements. Additionally, we are obligated to repurchase from J. Aron certain crude, intermediates and finished products located at the Company’s storage tanks at the Paulsboro and Delaware City refineries’ storage tanksrefineries and at the PBFX East Coast Storage Facility upon termination of these agreements;agreements (all terms as defined in “Note 4 - Inventories” of our Notes to Condensed Consolidated Financial Statements);
•restrictive covenants in our indebtedness that may adversely affect our operational flexibility or ability to make distributions;flexibility;
•payments by PBF Energy to the current and former holders of PBF LLC Series A Units and PBF LLC Series B Units under the tax receivable agreementPBF Energy’s Tax Receivable Agreement (as defined in “Note 7 - Commitments and Contingencies” of our Notes to Condensed Consolidated Financial Statements) for certain tax benefits PBF Energywe may claim;


•our assumptions regarding payments arising under the tax receivable agreementPBF 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'sEnergy Class A common stock as contemplated by the tax receivable agreement,Tax Receivable Agreement, the price of PBF Energy'sEnergy 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;

3


•our expectations and timing with respect to our acquisition activity and whether such acquisitions are accretive or dilutive to PBF Energy's shareholders;
•our expectations and timing with respect to our capital improvement and turnaround projects;
•the status of an air permit to transfer crude through the Delaware City refinery's dock;
•the impact of disruptions to crude or feedstock supply to any of our refineries, including disruptions due to problems at PBFX or with third partythird-party logistics infrastructure or operations, including pipeline, marine and rail transportation;
•the possibility that we might reduce or not make further dividend payments;
•the inability of our subsidiaries to freely pay dividends or make distributions to us;
•the impact of current and future laws, rulings and governmental regulations, including the implementation of rules and regulations regarding transportation of crude oil by rail;
•the impact of the newly enacted federal income tax legislation on our business;
•the effectiveness of our crude oil sourcing strategies, including our crude by rail strategy and related commitments;
•adverse impacts related to any changelegislation by the federal government inlifting the restrictions on exporting U.S. crude oil including relaxing limitations onoil;
•adverse impacts from changes in our regulatory environment, such as the exporteffects of certain types of crude oilcompliance with the California Global Warming Solutions Act (also referred to as “AB32”), or condensates or the lifting of the restrictions entirely;from actions taken by environmental interest groups;
•market risks related to the volatility in the price of Renewable Identification Numbers ("RINS"(“RINs”) required to comply with the Renewable Fuel Standards;Standards and greenhouse gas (“GHG”) emission credits required to comply with various GHG emission programs, such as AB32;
•adverse impacts from changes in our regulatory environment or actions taken by environmental interest groups;
•our ability to consummate the pending acquisitionMartinez Acquisition (as defined in “ITEM 2. Management’s Discussion and Analysis of the ownership interestsFinancial Condition and Results of the Torrance refinery and related logistics assets (collectively, the "Torrance Acquisition"Operations”), the timing for the closing of such acquisition and our plans for financing such acquisition;
•our ability to complete the successful integration of the completed acquisition of Chalmette Refining, L.L.CMartinez Acquisition and related logistic assets (collectively, the "Chalmette Acquisition") and the pending Torrance Acquisitionany other acquisitions into our business and to realize the benefits from such acquisitions;
•unforeseen liabilities associated with the ChalmetteMartinez Acquisition and/or Torrance Acquisition;and any other acquisitions;
•the costs of PBF Energy being a public company, including Sarbanes-Oxley Act compliance;
•risk associated with the operation of PBFX as a separate, publicly-traded entity;
•potential tax consequences related to our investment in PBFX; and
•receipt of regulatory approvals and complianceany decisions we continue to make with contractual obligations required in connection withrespect to our energy-related logistics assets that may be transferred to 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 Quarterly Report on Form 10-Q may not in fact occur. Accordingly, investors should not place undue reliance on those statements.
Our forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, including the securities laws of the United States, 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.

4


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,
2019		 December 31,
2018
ASSETS   
Current assets:   
Cash and cash equivalents (PBFX: $20.0 and $19.9, respectively)$204.1
 $597.3
Accounts receivable989.8
 718.2
Inventories2,314.4
 1,865.8
Prepaid and other current assets90.7
 55.6
Total current assets3,599.0
 3,236.9
Property, plant and equipment, net (PBFX: $856.0 and $862.1, respectively)3,919.1
 3,820.9
Deferred tax assets—
 48.5
Operating lease right of use assets236.9
 —
Deferred charges and other assets, net1,054.7
 899.1
Total assets$8,809.7
 $8,005.4
LIABILITIES AND EQUITY   
Current liabilities:   
Accounts payable$444.2
 $488.4
Accrued expenses1,846.8
 1,623.6
Deferred revenue25.3
 20.1
Current operating lease liabilities80.2
 —
Current debt1.3
 2.4
Total current liabilities2,397.8
 2,134.5
Long-term debt (PBFX: $769.2 and $673.3, respectively)2,029.4
 1,931.3
Payable to related parties pursuant to Tax Receivable Agreement373.5
 373.5
Deferred tax liabilities60.1
 40.4
Long-term operating lease liabilities156.1
 —
Other long-term liabilities279.7
 277.2
Total liabilities5,296.6
 4,756.9
Commitments and contingencies (Note 7)

 

Equity:   
PBF Energy Inc. equity   
Class A common stock, $0.001 par value, 1,000,000,000 shares authorized, 119,894,441 shares outstanding at June 30, 2019, 119,874,191 shares outstanding at December 31, 20180.1
 0.1
Class B common stock, $0.001 par value, 1,000,000 shares authorized, 20 shares outstanding at June 30, 2019, 20 shares outstanding at December 31, 2018—
 —
Preferred stock, $0.001 par value, 100,000,000 shares authorized, no shares outstanding at June 30, 2019 and December 31, 2018—
 —
Treasury stock, at cost, 6,315,761 shares outstanding at June 30, 2019 and 6,274,261 shares outstanding at December 31, 2018
(162.2) (160.8)
Additional paid in capital2,800.4
 2,633.8
Retained earnings350.8
 225.8
Accumulated other comprehensive loss(21.7) (22.4)
Total PBF Energy Inc. equity2,967.4
 2,676.5
Noncontrolling interest545.7
 572.0
Total equity3,513.1
 3,248.5
Total liabilities and equity$8,809.7
 $8,005.4


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,
 2019 2018 2019 2018
Revenues$6,560.0
 $7,444.1
 $11,776.2
 $13,246.9

       
Cost and expenses:       
Cost of products and other5,955.8
 6,452.5
 10,165.0
 11,584.6
Operating expenses (excluding depreciation and amortization expense as reflected below)433.2
 417.7
 912.2
 843.8
Depreciation and amortization expense104.2
 89.7
 207.2
 173.0
Cost of sales6,493.2
 6,959.9
 11,284.4
 12,601.4
General and administrative expenses (excluding depreciation and amortization expense as reflected below)53.6
 58.7
 111.2
 121.5
Depreciation and amortization expense2.9
 2.6
 5.7
 5.3
Loss on sale of assets0.8
 0.6
 0.8
 0.7
Total cost and expenses6,550.5
 7,021.8
 11,402.1
 12,728.9
        
Income from operations9.5
 422.3
 374.1
 518.0
        
Other income (expense):       
Change in fair value of catalyst leases0.5
 4.1
 (2.6) 4.1
Interest expense, net(42.1) (43.4) (81.6) (86.6)
Other non-service components of net periodic benefit cost—
 0.2
 (0.1) 0.5
Income (loss) before income taxes(32.1) 383.2
 289.8
 436.0
Income tax (benefit) expense(10.5) 95.5
 70.0
 106.5
Net income (loss)(21.6) 287.7
 219.8
 329.5
Less: net income attributable to noncontrolling interests10.6
 15.6
 22.8
 27.0
Net income (loss) attributable to PBF Energy Inc. stockholders$(32.2) $272.1
 $197.0
 $302.5
        
Weighted-average shares of Class A common stock outstanding       
Basic119,181,845
 112,875,813
 119,885,386
 111,853,774
Diluted119,181,845
 116,409,273
 122,020,444
 115,749,927
Net income (loss) available to Class A common stock per share:       
Basic$(0.27) $2.41
 $1.64
 $2.70
Diluted$(0.27) $2.37
 $1.63
 $2.66



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

 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
 2019 2018 2019 2018
Net income (loss)$(21.6) $287.7
 $219.8
 $329.5
Other comprehensive income (loss):    
 
Unrealized (loss) gain on available for sale securities0.3
 (0.2) 0.3
 (0.2)
Net gain on pension and other post-retirement benefits0.2
 0.2
 0.4
 0.5
Total other comprehensive income0.5
 —
 0.7
 0.3
Comprehensive income (loss)(21.1) 287.7
 220.5
 329.8
Less: comprehensive income attributable to noncontrolling interests10.8
 15.5
 22.9
 27.0
Comprehensive income (loss) attributable to PBF Energy Inc. stockholders$(31.9) $272.2
 $197.6
 $302.8

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
Other
Comprehensive
Income (Loss)		Treasury StockNoncontrolling
Interest		Total
Equity
 SharesAmountSharesAmountSharesAmount
Balance, December 31, 2018119,874,191
$0.1
20
$—
$2,633.8
$225.8
$(22.4)6,274,261
$(160.8)$572.0
$3,248.5
Comprehensive Income—
—
—
—
—
229.3
0.2
—
—
12.1
241.6
Exercise of warrants and options5,025
—
 —
0.1
—
—
—
—
—
0.1
Taxes paid for net settlement of equity-based compensation—
—
—
—
(1.0)—
—
—
—
—
(1.0)
Distributions to PBF Energy Company LLC members—
—
—
—
—
—
—
—
—
(0.4)(0.4)
Distributions to PBF Logistics LP public unitholders—
—
—
—
—
—
—
—
—
(13.2)(13.2)
Stock-based compensation(1,410)—
—
—
6.2
—
—
—
—
1.0
7.2
Dividends ($0.30 per common share)—
—
—
—
—
(36.0)—
—
—
—
(36.0)
Issuance of additional PBFX common units—
—
—
—
82.4
—
—
—
—
(82.4)—
Treasury stock purchases(29,671)—
—
—
1.0
—
—
29,671
(1.0)—
—
Balance, March 31, 2019119,848,135
$0.1
20
$—
$2,722.5
$419.1
$(22.2)6,303,932
$(161.8)$489.1
$3,446.8
Comprehensive Income (loss)—
—
—
—
—
(32.4)0.5
—
—
10.8
(21.1)
Exercise of warrants and options2,500
—
 —
0.1
—
—
—
—
—
0.1
Distributions to PBF Energy Company LLC members—
—
—
—
—
—
—
—
—
(1.9)(1.9)
Distributions to PBF Logistics LP public unitholders—
—
—
—
—
—
—
—
—
(16.8)(16.8)
Stock-based compensation45,635
—
—
—
7.7
—
—
—
—
3.4
11.1
Dividends ($0.30 per common share)—
—
—
—
—
(35.9)—
—
—
—
(35.9)
Issuance of additional PBFX common units—
—
—
—
69.6
—
—
—
—
62.9
132.5
Exchange of PBF Energy Company LLC Series A Units for PBF Energy Class A common stock10,000
—
—
—
0.1
—
—
—
—
—
0.1
Treasury stock purchases(11,829)—
—
—
0.4
—
—
11,829
(0.4)—
—
Other—
—
—
—
—
—
—
—
—
(1.8)(1.8)
Balance, June 30, 2019119,894,441
$0.1
20
$—
$2,800.4
$350.8
$(21.7)6,315,761
$(162.2)$545.7
$3,513.1





PBF ENERGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (continued)
(unaudited, in millions, except share and per share data)

 Class A
Common Stock		Class B
Common Stock		Additional
Paid-in
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Treasury StockNoncontrolling
Interest		Total
Equity
 SharesAmountSharesAmountSharesAmount
Balance, December 31, 2017110,565,531
$0.1
25
$—
$2,277.7
$236.8
$(25.4)6,132,884
$(152.6)$566.3
$2,902.9
Comprehensive Income—
—
—
—
—
30.3
0.3
—
—
11.5
42.1
Exercise of warrants and options45,257
—
 —
—
—
—
—
—
—
—
Distributions to PBF Energy Company LLC members—
—
—
—
—
—
—
—
—
(1.0)(1.0)
Distributions to PBF Logistics LP public unitholders—
—
—
—
—
—
—
—
—
(11.7)(11.7)
Stock-based compensation1,054
—
—
—
4.3
—
—
—
—
0.8
5.1
Dividends ($0.30 per common share)—
—
—
—
—
(33.3)—
—
—
—
(33.3)
Effects of exchanges of PBF LLC Series A Units on deferred tax assets and liabilities and tax receivable agreement obligation—
—
—
—
0.8
—
—
—
—
—
0.8
Exchange of PBF Energy Company LLC Series A Units for PBF Energy Class A common stock539,288
—
(3)—
—
—
—
—
—
—
—
Treasury stock purchases(32,149)—
—
—
1.0
—
—
32,149
(1.0)—
—
Other—
—
—
—
10.9
—
—
—
—
—
10.9
Balance, March 31, 2018111,118,981
$0.1
22
$—
$2,294.7
$233.8
$(25.1)6,165,033
$(153.6)$565.9
$2,915.8
Comprehensive Income—
—
—
—
—
272.2
—
—
—
15.5
287.7
Exercise of warrants and options557,659
—
 —
11.7
—
—
—
—
—
11.7
Taxes paid for net settlement of equity-based compensation—
—
—
—
—
—
—
—
—
(0.3)(0.3)
Distributions to PBF Energy Company LLC members—
—
—
—
—
—
—
—
—
(0.4)(0.4)
Distributions to PBF Logistics LP public unitholders—
—
—
—
—
—
—
—
—
(11.9)(11.9)
Stock-based compensation11,190
—
—
—
5.2
—
—
—
—
2.7
7.9
Dividends ($0.30 per common share)—
—
—
—
—
(34.0)—
—
—
—
(34.0)
Effects of exchanges of PBF LLC Series A Units on deferred tax assets and liabilities and tax receivable agreement obligation—
—
—
—
(3.2)—
—
—
—
—
(3.2)
Exchange of PBF Energy Company LLC Series A Units for PBF Energy Class A common stock2,148,763
—
(2)—
—
—
—
—
—
—
—
Treasury stock purchases(6,865)—
—
—
—
—
—
6,865
—
—
—
Other—
—
—
—
—
—
—
—
—
(1.0)(1.0)
Balance, June 30, 2018113,829,728
$0.1
20
$—
$2,308.4
$472.0
$(25.1)6,171,898
$(153.6)$570.5
$3,172.3





PBF ENERGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
 Six Months Ended 
 June 30,
 2019 2018
Cash flows from operating activities:   
Net income$219.8
 $329.5
Adjustments to reconcile net income to net cash (used in) provided by operating activities:   
Depreciation and amortization218.4
 182.3
Stock-based compensation20.0
 13.0
Change in fair value of catalyst leases2.6
 (4.1)
Deferred income taxes68.2
 105.7
Non-cash change in inventory repurchase obligations35.0
 2.5
Non-cash lower of cost or market inventory adjustment(324.0) (245.7)
Pension and other post-retirement benefit costs22.4
 23.7
Loss on sale of assets0.8
 0.7
    
Changes in operating assets and liabilities:   
Accounts receivable(271.6) (81.5)
Inventories(124.6) (80.8)
Prepaid and other current assets(35.1) 8.4
Accounts payable(33.5) 61.7
Accrued expenses197.8
 7.6
Deferred revenue5.2
 (4.1)
Other assets and liabilities(28.8) (11.0)
Net cash (used in) provided by operating activities$(27.4) $307.9
    
Cash flows from investing activities:   
Expenditures for property, plant and equipment(206.1) (115.7)
Expenditures for deferred turnaround costs(261.9) (179.2)
Expenditures for other assets(33.9) (12.3)
Acquisition of Knoxville Terminals by PBFX—
 (58.0)
Net cash used in investing activities$(501.9) $(365.2)



PBF ENERGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(unaudited, in millions)
 Six Months Ended 
 June 30,
 2019 2018
Cash flows from financing activities:   
Net proceeds from issuance of PBFX common units$132.5
 $—
Distributions to PBF Energy Company LLC members other than PBF Energy(2.4) (1.4)
Distributions to PBFX public unitholders(29.2) (22.9)
Dividend payments(71.7) (67.2)
Proceeds from revolver borrowings1,250.0
 —
Repayments of revolver borrowings(1,250.0) —
Repayment of note payable—
 (2.4)
Proceeds from PBFX revolver borrowings196.0
 64.0
Repayments of PBFX revolver borrowings(101.0) (9.7)
Repayments of PBF Rail Term Loan(3.5) (3.4)
Catalyst lease settlements(1.2) (9.5)
Proceeds from insurance premium financing18.9
 17.4
Proceeds from stock options exercised0.2
 11.7
Purchase of treasury stock(1.4) (1.0)
Deferred financing costs and other
(1.1) (13.0)
Net cash provided by (used in) financing activities$136.1
 $(37.4)
    
Net decrease in cash and cash equivalents(393.2) (94.7)
Cash and cash equivalents, beginning of period597.3
 573.0
Cash and cash equivalents, end of period$204.1
 $478.3
    
Supplemental cash flow disclosures   
Non-cash activities:   
Accrued and unpaid capital expenditures$39.9
 $20.1
Assets acquired under operating leases281.6
 —
Assets acquired under finance leases14.6
 —
Cash paid during the year for:   
Interest (net of capitalized interest of $8.1 and $4.0 in 2019 and 2018, respectively)$72.1
 $80.9
Income taxes1.6
 0.1



PBF ENERGY COMPANY LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands,millions, except unit and per unit data)
September 30,
2015		 December 31,
2014		June 30,
2019		 December 31,
2018
ASSETS      
Current assets:      
Cash and cash equivalents$471,582
 $367,780
Cash and cash equivalents (PBFX: $20.0 and $19.9, respectively)$203.7
 $596.0
Accounts receivable395,624
 551,269
989.8
 718.2
Inventories1,101,182
 1,102,261
2,314.4
 1,865.8
Prepaid expense and other current assets71,398
 32,452
Prepaid and other current assets90.7
 55.1
Total current assets2,039,786
 2,053,762
3,598.6
 3,235.1
      
Property, plant and equipment, net1,960,149
 1,936,839
Marketable securities234,249
 234,930
Property, plant and equipment, net (PBFX: $856.0 and $862.1, respectively)3,919.1
 3,820.9
Operating lease right of use assets236.9
 —
Deferred charges and other assets, net311,420
 332,669
1,052.6
 897.1
Total assets$4,545,604
 $4,558,200
$8,807.2
 $7,953.1
   
LIABILITIES AND EQUITY      
Current liabilities:      
Accounts payable$212,772
 $335,268
$444.2
 $488.4
Accrued expenses908,498
 1,130,905
1,870.0
 1,642.7
Deferred revenue4,174
 1,227
25.3
 20.1
Current operating lease liabilities80.2
 —
Current debt1.3
 2.4
Total current liabilities1,125,444
 1,467,400
2,421.0
 2,153.6
      
Delaware Economic Development Authority loan8,000
 8,000
Long-term debt1,373,122
 1,252,349
Intercompany note payable134,358
 109,754
Long-term debt (PBFX: $769.2 and $673.3, respectively)2,029.4
 1,931.3
Affiliate note payable378.4
 326.1
Deferred tax liabilities35.1
 40.4
Long-term operating lease liabilities156.1
 —
Other long-term liabilities63,119
 62,750
279.7
 277.2
Total liabilities2,704,043
 2,900,253
5,299.7
 4,728.6
      
Commitments and contingencies (Note 9)
 
Commitments and contingencies (Note 7)   
      
Series B Units, 1,000,000 issued and outstanding, no par or stated value5,110
 5,110
5.1
 5.1
   
Equity:   
Series A Units, 5,111,358 and 9,170,696 issued and outstanding, as of September 30, 2015 and December 31, 2014, no par or stated value50,847
 91,179
Series C Units, 85,893,850 and 81,981,119 issued and outstanding, as of September 30, 2015 and December 31, 2014, no par or stated value922,588
 865,954
Treasury units, at cost(150,804) (142,731)
Retained earnings/(Accumulated deficit)702,448
 528,942
PBF Energy Company LLC equity:   
Series A Units, 1,206,325 and 1,206,325 issued and outstanding at June 30, 2019 and December 31, 2018, no par or stated value20.2
 20.2
Series C Units, 119,915,672 and 119,895,422 issued and outstanding at June 30, 2019 and December 31, 2018, no par or stated value2,176.4
 2,009.8
Treasury stock, at cost(162.2) (160.8)
Retained earnings1,058.2
 914.3
Accumulated other comprehensive loss(25,561) (26,876)(23.2) (23.9)
Total PBF Energy Company LLC equity1,499,518
 1,316,468
3,069.4
 2,759.6
Noncontrolling interest in PBFX336,933
 336,369
Noncontrolling interest433.0
 459.8
Total equity1,836,451
 1,652,837
3,502.4
 3,219.4
Total liabilities, Series B units and equity$4,545,604
 $4,558,200
$8,807.2
 $7,953.1

See notes to condensed consolidated financial statements.
5


PBF ENERGY COMPANY LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands)
millions)
Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,		Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
2015 2014 2015 20142019 2018 2019 2018
Revenues$3,217,640
 $5,260,003
 $9,763,440
 $15,308,155
$6,560.0
 $7,444.1
 $11,776.2
 $13,246.9

              
Cost and expenses:              
Cost of sales, excluding depreciation2,822,444
 4,670,908
 8,319,404
 13,754,048
Operating expenses, excluding depreciation203,860
 202,625
 635,948
 682,246
General and administrative expenses50,808
 37,307
 125,431
 106,947
(Gain) loss on sale of assets(142) 18
 (1,133) (162)
Cost of products and other5,955.8
 6,452.5
 10,165.0
 11,584.6
Operating expenses (excluding depreciation and amortization expense as reflected below)433.2
 417.7
 912.2
 843.8
Depreciation and amortization expense48,133
 68,010
 144,401
 135,887
104.2
 89.7
 207.2
 173.0
3,125,103
 4,978,868
 9,224,051
 14,678,966
Cost of sales6,493.2
 6,959.9
 11,284.4
 12,601.4
General and administrative expenses (excluding depreciation and amortization expense as reflected below)53.2
 58.2
 110.5
 120.8
Depreciation and amortization expense2.9
 2.6
 5.7
 5.3
Loss on sale of assets0.8
 0.6
 0.8
 0.7
Total cost and expenses6,550.1
 7,021.3
 11,401.4
 12,728.2
              
Income from operations92,537
 281,135
 539,389
 629,189
9.9
 422.8
 374.8
 518.7
              
Other income (expenses):       
Other income (expense):       
Change in fair value of catalyst leases4,994
 5,543
 8,982
 1,204
0.5
 4.1
 (2.6) 4.1
Interest expense, net(29,360) (24,855) (80,183) (76,728)(44.5) (45.4) (86.0) (90.6)
Net income68,171
 261,823
 468,188
 553,665
Other non-service components of net periodic benefit cost—
 0.2
 (0.1) 0.5
Income (loss) before income taxes(34.1) 381.7
 286.1
 432.7
Income tax expense (benefit)1.8
 (4.0) (5.4) (4.7)
Net income (loss)(35.9) 385.7
 291.5
 437.4
Less: net income attributable to noncontrolling interests9,381
 4,637
 26,608
 7,328
11.1
 9.4
 20.1
 19.6
Net income attributable to PBF Energy Company LLC$58,790
 $257,186
 $441,580
 $546,337
Net income (loss) attributable to PBF Energy Company LLC$(47.0) $376.3
 $271.4
 $417.8






See notes to condensed consolidated financial statements.
6


PBF ENERGY COMPANY LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited, in thousands)millions)


 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2015 2014 2015 2014
Net income$68,171
 $261,823
 $468,188
 $553,665
Other comprehensive income:    
 
Unrealized (loss) gain on available for sale securities119
 (160) 115
 (75)
Net gain on pension and other postretirement benefits400
 242
 1,200
 691
Total other comprehensive income519
 82
 1,315
 616
Comprehensive income68,690
 261,905
 469,503
 554,281
Less: comprehensive income attributable to noncontrolling interests9,381
 4,637
 26,608
 7,328
Comprehensive income attributable to PBF Energy Company LLC$59,309
 $257,268
 $442,895
 $546,953
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
 2019 2018 2019 2018
Net income (loss)$(35.9) $385.7
 $291.5
 $437.4
Other comprehensive income (loss):       
Unrealized (loss) gain on available for sale securities0.3
 (0.2) 0.3
 (0.2)
Net gain on pension and other post-retirement benefits0.2
 0.2
 0.4
 0.5
Total other comprehensive income0.5
 —
 0.7
 0.3
Comprehensive income (loss)(35.4) 385.7
 292.2
 437.7
Less: comprehensive income attributable to noncontrolling interests11.1
 9.4
 20.1
 19.6
Comprehensive income (loss) attributable to PBF Energy Company LLC$(46.5) $376.3
 $272.1
 $418.1


PBF ENERGY COMPANY LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited, in millions, except unit data)
See notes to condensed consolidated financial statements.
7
 Series ASeries CAccumulated
Other
Comprehensive Income (Loss)
Retained
Earnings
Noncontrolling
Interest
Treasury Stock
Total Member’s
Equity
 UnitsAmountUnitsAmount
Balance, December 31, 20181,206,325
$20.2
119,895,422
$2,009.8
$(23.9)$914.3
$459.8
$(160.8)$3,219.4
Comprehensive Income—
—
—
—
0.2
318.4
9.0
—
327.6
Exercise of Series A warrants and options—
—
5,025
(0.9)—
—
—
—
(0.9)
Distribution to members—
—
—
—
—
(36.4)(13.2)—
(49.6)
Issuance of additional PBFX common units—
—
—
82.4
—
—
(82.4)—
—
Stock-based compensation—
—
(1,410)6.2
—
—
1.0
—
7.2
Treasury stock purchases—
—
(29,671)1.0
—
—
—
(1.0)—
Balance, March 31, 20191,206,325
$20.2
119,869,366
$2,098.5
$(23.7)$1,196.3
$374.2
$(161.8)$3,503.7
Comprehensive Income (loss)—
—
—
—
0.5
(47.0)11.1
—
(35.4)
Exercise of Series A warrants and options10,000
0.1
2,500
0.1
—
—
—
—
0.2
Exchange of Series A units for PBF Energy Class A common stock(10,000)(0.1)10,000
0.1
—
—
—
—
—
Distribution to members—
—
—
—
—
(91.1)(16.8)—
(107.9)
Issuance of additional PBFX common units—
—
—
69.6
—
—
62.9
—
132.5
Stock-based compensation—
—
45,635
7.7
—
—
3.4
—
11.1
Treasury stock purchases—
—
(11,829)0.4
—
—
—
(0.4)—
Other—
—
—
—
—
—
(1.8)—
(1.8)
Balance, June 30, 20191,206,325
$20.2
119,915,672
$2,176.4
$(23.2)$1,058.2
$433.0
$(162.2)$3,502.4


PBF ENERGY COMPANY LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (continued)
(unaudited, in millions, except unit data)

 Series ASeries CAccumulated
Other
Comprehensive Income (Loss)		Retained
Earnings		Noncontrolling
Interest		Treasury StockTotal Member’s
Equity
 UnitsAmountUnitsAmount
Balance, December 31, 20173,767,464
$40.1
110,586,762
$1,655.0
$(26.9)$906.8
$456.1
$(152.6)$2,878.5
Comprehensive Income—
—
—
—
0.3
41.5
10.2
—
52.0
Exercise of Series A warrants and options11,886
—
45,257
—
—
—
—
—
—
Exchange of Series A units for PBF Energy Class A common stock(539,288)(4.1)539,288
4.1
—
—
—
—
—
Distribution to members—
—
—
—
—
(34.3)(11.7)—
(46.0)
Stock-based compensation—
—
1,054
4.3
—
—
0.8
—
5.1
Treasury stock purchases—
—
(32,149)1.0
—
—
—
(1.0)—
Other—
—
—
—
—
10.9
—
—
10.9
Balance, March 31, 20183,240,062
$36.0
111,140,212
$1,664.4
$(26.6)$924.9
$455.4
$(153.6)$2,900.5
Comprehensive Income—
—
—
—
—
376.3
9.4
—
385.7
Exercise of Series A warrants and options115,026
(3.3)557,659
—
—
—
—
—
(3.3)
Exchange of Series A units for PBF Energy Class A common stock(2,148,763)(13.2)2,148,763
13.2
—
—
—
—
—
Distribution to members—
—
—
—
—
(34.4)(11.9)—
(46.3)
Stock-based compensation—
—
11,190
5.2
—
—
2.7
—
7.9
Treasury stock purchases—
—
(6,865)—
—
—
—
—
—
Other—
—
—
—
—
—
(1.0)—
(1.0)
Balance, June 30, 20181,206,325
$19.5
113,850,959
$1,682.8
$(26.6)$1,266.8
$454.6
$(153.6)$3,243.5





PBF ENERGY COMPANY LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)millions)
Nine Months Ended 
 September 30,		Six Months Ended 
 June 30,
2015 20142019 2018
Cash flows from operating activities:      
Net income$468,188
 $553,665
$291.5
 $437.4
Adjustments to reconcile net income to net cash provided by (used in) operations:   
Adjustments to reconcile net income to net cash (used in) provided by operating activities:   
Depreciation and amortization151,509
 141,547
218.4
 182.3
Stock-based compensation8,757
 5,377
20.0
 13.0
Change in fair value of catalyst lease obligations(8,982) (1,204)
Change in fair value of catalyst leases2.6
 (4.1)
Deferred income taxes(5.3) (4.7)
Non-cash change in inventory repurchase obligations53,370
 (31,602)35.0
 2.5
Pension and other post retirement benefit costs19,340
 16,462
Gain on disposition of property, plant and equipment(1,133) (162)
Change in non-cash lower of cost or market adjustment81,147
 —
Non-cash lower of cost or market inventory adjustment(324.0) (245.7)
Pension and other post-retirement benefit costs22.4
 23.7
Loss on sale of assets0.8
 0.7
      
Changes in current assets and current liabilities:   
Changes in operating assets and liabilities:   
Accounts receivable155,645
 (101,752)(271.6) (81.5)
Inventories(110,830) (378,538)(124.6) (80.8)
Prepaid expenses and other current assets(38,946) 25,104
Prepaid and other current assets(35.6) (1.8)
Accounts payable(122,496) (76,008)(33.5) 61.7
Accrued expenses(331,617) 269,687
202.0
 2.4
Deferred revenue2,947
 (6,017)5.2
 (4.1)
Other assets and liabilities(21,959) (15,616)(28.8) (14.2)
Net cash provided by operations304,940
 400,943
Net cash (used in) provided by operating activities$(25.5) $286.8
      
Cash flow from investing activities:   
Cash flows from investing activities:   
Expenditures for property, plant and equipment(288,909) (258,875)(206.1) (115.7)
Expenditures for deferred turnaround costs(39,725) (58,423)(261.9) (179.2)
Expenditures for other assets(7,275) (13,446)(33.9) (12.3)
Purchase of marketable securities(1,609,286) (1,188,906)
Maturities of marketable securities1,609,983
 923,996
Proceeds from sale of assets168,270
 74,343
Acquisition of Knoxville Terminals by PBFX—
 (58.0)
Net cash used in investing activities(166,942) (521,311)$(501.9) $(365.2)


See notes to condensed consolidated financial statements.
8


PBF ENERGY COMPANY LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(unaudited, in thousands)millions)
 Nine Months Ended 
 September 30,
 2015 2014
Cash flows from financing activities:   
Proceeds from issuance of PBFX common units, net of underwriters' discount and commissions$—
 $340,957
Offering costs for issuance of PBFX common units—
 (5,000)
Distributions to PBFX unit holders$(17,082) $(2,573)
Dividend and distributions payments(152,838) (283,680)
Proceeds from PBFX Senior Notes350,000
 —
Proceeds from PBFX revolver borrowings24,500
 140,100
Repayments of PBFX revolver borrowings(275,100) —
Proceeds from PBFX Term Loan borrowings—
 300,000
Repayments of PBFX Term Loan borrowings(700) (35,100)
Proceeds from intercompany loan from PBF Energy Inc.71,904
 91,660
Repayment of intercompany loan from PBF Energy Inc.(47,300) —
Proceeds from Rail Facility revolver borrowings102,075
 35,925
Repayments of Rail Facility revolver borrowings(71,938) —
Proceeds from revolver borrowings—
 395,000
Repayments of revolver borrowings—
 (410,000)
Purchases of treasury stock(8,073) (32,593)
Deferred financing costs and other(9,644) (13,905)
Net cash (used in) provided by financing activities(34,196) 520,791
    
Net increase in cash and cash equivalents103,802
 400,423
Cash and equivalents, beginning of period367,780
 76,970
Cash and equivalents, end of period$471,582
 $477,393
    
Supplemental cash flow disclosures   
Non-cash activities:   
Conversion of Delaware Economic Development Authority loan to grant$—
 $4,000
Accrued distributions$115,228
 $—
Accrued construction in progress and unpaid fixed assets$4,670
 $65,193
 Six Months Ended 
 June 30,
 2019 2018
Cash flows from financing activities:   
Net proceeds from issuance of PBFX common units$132.5
 $—
Distributions to PBF Energy Company LLC members(74.2) (68.6)
Distributions to PBFX public unitholders(29.2) (22.9)
Proceeds from revolver borrowings1,250.0
 —
Repayments of revolver borrowings(1,250.0) —
Repayment of note payable—
 (2.4)
Proceeds from PBFX revolver borrowings196.0
 64.0
Repayments of PBFX revolver borrowings(101.0) (9.7)
Repayments of PBF Rail Term Loan(3.5) (3.4)
Catalyst lease settlements(1.2) (9.5)
Proceeds from insurance premium financing18.9
 17.4
Repayment of affiliate note payable with PBF Energy Inc.(0.8) 40.3
Proceeds from stock options exercised0.1
 0.2
Repurchase of treasury stock(1.4) (1.0)
Deferred financing costs and other(1.1) (13.0)
Net cash provided by (used in) financing activities$135.1
 $(8.6)
    
Net decrease in cash and cash equivalents(392.3) (87.0)
Cash and cash equivalents, beginning of period596.0
 562.0
Cash and cash equivalents, end of period$203.7
 $475.0
    
Supplemental cash flow disclosures   
Non-cash activities:   
Accrued and unpaid capital expenditures$39.9
 $20.1
Assets acquired under operating leases281.6
 —
Assets acquired under finance leases14.6
 —
Affiliate note payable related to PBF LLC member distributions53.2
 —
Cash paid during the year for:   
Interest (net of capitalized interest of $8.1 and $4.0 in 2019 and 2018, respectively)$72.1
 $80.9
Income taxes0.7
 0.1


See notes to condensed consolidated financial statements.
9
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT UNIT, PER UNIT AND BARREL DATA)


 
1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION
Description of the Business
PBF Energy Inc. (“PBF Energy”) was formed as a Delaware corporation on November 7, 2011 and is the sole managing member of PBF Energy Company LLC ("(“PBF LLC" or the "Company"LLC”), a Delaware limited liability company, with a controlling interest in PBF LLC and its subsidiaries. PBF Energy consolidates the financial results of PBF LLC and its subsidiaries and records a noncontrolling interest in its 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 99.0% economic interest in PBF LLC as of June 30, 2019 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 1.0% economic interest in PBF LLC. The PBF LLC Series C Units rank on parity with the PBF LLC Series A Units as to distribution rights, voting rights and rights upon liquidation, winding up or dissolution. In addition, 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. As of June 30, 2019, PBF Energy held 119,915,672 PBF LLC Series C Units and the members of PBF LLC other than PBF Energy held 1,206,325 PBF LLC Series A Units.
PBF LLC, together with its consolidated subsidiaries, owns and operates oil refineries and related facilities in North America. PBF Energy Inc. ("PBF Energy") is the sole managing member of, and owner and of an equity interest representing approximately 94.4% of the outstanding economic interest in, PBF LLC as of September 30, 2015, with the remaining economic interests were held by the members of PBF LLC, other than PBF Energy. PBF Holding Company LLC ("(“PBF Holding"Holding”) is a wholly-owned subsidiary of PBF LLC. PBF Investments LLC (“PBF Investments”), Toledo Refining Company LLC (“Toledo Refining” or “TRC”), Paulsboro Refining Company LLC (“Paulsboro Refining” or “PRC”), Delaware City Refining Company LLC ("(“Delaware City Refining"Refining” or "DCR"“DCR”), Delaware Pipeline CompanyChalmette Refining, L.L.C. (“Chalmette Refining”), PBF Western Region LLC (“PBF Power Marketing LLC, PBF Energy Limited, PaulsboroWestern Region”), Torrance Refining Company LLC Paulsboro Natural Gas Pipeline Company LLC(“Torrance Refining”) and Toledo RefiningTorrance Logistics Company LLC are PBF LLC’s principal operating subsidiaries and are all wholly-owned subsidiaries of PBF Holding. AsDiscussions or areas of September 30, 2015, PBF LLC also holds a 53.7% limited partner interest and all of the incentive distribution rights in PBF Logistics LP ("PBFX" or the "Partnership"), a publicly traded master limited partnership (refer to Note 2 "PBF Logistics LP" of our Notes to Condensed Consolidated Financial Statements)Statements that either apply only to PBF Energy or PBF LLC are clearly noted in such footnotes.
As of June 30, 2019, PBF LLC also held a 48.2% limited partner interest in PBF Logistics LP (“PBFX”), a publicly-traded master limited partnership (“MLP”) (refer to “Note 2 - PBF Logistics LP”). PBF Logistics GP LLC (“PBF GP”) owns the noneconomic general partner interest and serves as the general partner of PBFX and is wholly-owned by PBF LLC. 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 LLCEnergy and its consolidated subsidiaries, including PBF LLC, PBF Holding, PBF GP and PBFX are referred to hereinafter as the "Company"“Company” unless the context otherwise requires.
On February 6, 2015, PBF Energy completed a public offering of 3,804,653 shares of Class A common stock in a secondary offering (the "February 2015 secondary offering"). All of the shares in the February 2015 secondary offering were sold by funds affiliated with Blackstone Group L.P., or Blackstone, and First Reserve Management, L.P., or First Reserve. In connection with the February 2015 secondary offering, Blackstone and First Reserve exchanged all of their remaining PBF LLC Series A Units for an equivalent number of shares of Class A common stock of PBF Energy, and as a result, Blackstone and First Reserve no longer hold any PBF LLC Series A Units or shares of PBF Energy Class A Common stock. The holders of PBF LLC Series B Units, which include certain executive officers of PBF Energy and others, received a portion of the proceeds of the sale of the PBF Energy Class A common stock by Blackstone and First Reserve in accordance with the amended and restated limited liability company agreement of PBF LLC. PBF Energy did not receive any proceeds from the February 2015 secondary offering. As of September 30, 2015, PBF Energy owns 85,893,850 PBF LLC Series C Units and PBF Energy's executive officers and directors and certain employees and others beneficially own 5,111,358 PBF LLC Series A Units. As of September 30, 2015, the holders of PBF Energy's issued and outstanding shares of Class A common stock have 94.4% of the voting power in PBF Energy and the members of PBF LLC, other than PBF Energy, through their holdings of Class B common stock have the remaining 5.6% of the voting power in PBF Energy.
Substantially all of the Company’s operations are in the United States. The Company operates in two reportable business segments: Refining and Logistics. The Company’s three 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 is a publicly traded master limited partnershipMLP that was formed to operate logisticallogistics assets such as crude oil and refined petroleum products terminals, pipelines and storage facilities. PBFX's operations are aggregated into theThe Logistics segment.segment consists solely of PBFX’s operations. To generate earnings and cash flows from operations, the Company is primarily dependent upon processing crude oil and selling refined petroleum products at margins sufficient to cover fixed and variable costs and other expenses. Crude oil and refined petroleum products are commodities; and factors that are largely out of the Company’s control can cause prices to vary over time. The resulting potential margin volatility can have a material effect on the Company’s financial position, earnings and cash flow.    flows.


10
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT UNIT, PER UNIT AND BARREL DATA)


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 statementsCondensed Consolidated Financial Statements of the Company have been prepared in accordance with U.S.accounting principles generally accepted accounting principles ("GAAP"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 statementsCondensed Consolidated Financial Statements should be read in conjunction with the audited consolidatedPBF Energy Inc. and PBF Energy Company LLC financial statements included in the prospectus dated October 30, 2015, as filed withAnnual Report on Form 10-K for the SEC on October 30, 2015 (the “Prospectus”).year ended December 31, 2018. The results of operations for the three and ninesix months ended SeptemberJune 30, 20152019 are not necessarily indicative of the results to be expected for the full year.

In 2019, the Company has changed its presentation from thousands to millions, as applicable, and as a result, any necessary rounding adjustments have been made to prior year disclosed amounts.
RecentRecently Adopted Accounting PronouncementsGuidance
In April 2015,February 2016, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASC 842”) to increase the transparency and comparability of leases. ASU 842 supersedes the lease accounting guidance in ASC 840 - “Leases” (“ASC 840”). ASC 842 requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. The Company elected to utilize the “package” of three expedients, as defined in ASC 842, which retains the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. The Company also has elected to not evaluate land easements that existed as of, or expired before, adoption of the new standard. The Company’s Condensed Consolidated Financial Statements for the periods prior to the adoption of ASC 842 are not adjusted and are reported in accordance with the Company’s historical accounting policy. As of the date of implementation on January 1, 2019, the impact of the adoption of ASC 842 resulted in the recognition of a right of use asset and lease payable obligation on the Company’s Condensed Consolidated Balance Sheets of approximately $250.0 million. As the right of use asset and the lease payable obligation were the same upon adoption of ASC 842, there was no cumulative effect impact on the Company’s retained earnings. See “Note 8 - Leases” for further details.
In August 2017, the FASB issued ASU No. 2015-03, "Interest - Imputation2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”). The amendments in ASU 2017-12 more closely align the results of Interest (Subtopic 835-30): Simplifyingcash flow and fair value hedge accounting with risk management activities in the Presentationconsolidated financial statements. The amendments expand the ability to hedge nonfinancial and financial risk components, reduce complexity in fair value hedges of Debt Issuance Costs" ("interest rate risk, eliminate the requirement to separately measure and report hedge ineffectiveness, and eases certain hedge effectiveness assessment requirements. The guidance in ASU 2015-03"), which requires debt issuance costs related2017-12 was applied using a modified retrospective approach. The guidance in ASU 2017-12 also provided transition relief to a recognized debt liabilitymake it easier for entities to apply certain amendments to existing hedges (including fair value hedges) where the hedge documentation needs to be presentedmodified. The presentation and disclosure requirements of ASU 2017-12 were applied prospectively. The Company adopted the amendments in this ASU effective January 1, 2019, which did not have a material impact on its Condensed Consolidated Financial Statements and related disclosures.
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


In June 2018, the balance sheet asFASB issued ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718): Targeted Improvements to Non-employee Share-Based Payment Accounting” (“ASU 2018-07”). ASU 2018-07 expands the scope of Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from non-employees. As a direct deductionresult, non-employee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. In addition, ASU 2018-07 also clarifies that any share-based payment awards issued to customers should be evaluated under ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company adopted the debt liability rather than as an asset. The standardamendments in this ASU effective January 1, 2019, which did not have a material impact on its Condensed Consolidated Financial Statements and related disclosures.
In August 2018, the FASB issued ASU 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software” (Subtopic 350-40) (“ASU 2018-15”). This guidance addresses a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in such arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for interim and annual periodsfiscal years beginning after December 15, 20152019 and for interim periods within those fiscal years, with early adoption permitted. This guidance should be applied on either a retrospective or prospective basis. The Company has elected to early adopt this guidance in the second quarter of 2019 on a prospective basis. The Company’s adoption of ASU 2018-15 did not have a material impact on its Condensed Consolidated Financial Statements and related disclosures.
Recently Issued Accounting Pronouncements
In August 2018, the FASB issued ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20)”, to improve the effectiveness of benefit plan disclosures in the notes to financial statements by facilitating clear communication of the information required by GAAP that is permitted.most important to users of each entity’s financial statements. The amendments in this ASU modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. Additionally, the amendments in this ASU remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. The amendments in this ASU are effective for fiscal years ending after December 15, 2020, for public business entities and for fiscal years ending after December 15, 2021, for all other entities. Early adoption is permitted for all entities. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures.
In August 2015,June 2016, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers2016-13, “Financial Instruments-Credit Losses” (Topic 606): Deferral326), Measurement of the Effective Date”Credit Losses on Financial Instruments (“ASU 2015-14”2016-13”), which defers. This guidance amends the effectiveguidance on measuring credit losses on financial assets held at amortized cost. ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date of ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”) for all entities by one year. Thebased on historical experience, current conditions, and reasonable and supportable forecasts. This guidance in ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. Under ASU 2015-14, this guidance becomesis effective for interim and annual periodsfiscal years beginning after December 15, 2017 and permits the use of either the retrospective or cumulative effect transition method. Under ASU 2015-14, early adoption is permitted only as of annual reporting periods beginning after December 15, 2016,2019, including interim reporting periods within that reporting period.those fiscal years. The Company continues to evaluatedoes not expect that the impactadoption of this new standardguidance will have a material impact on its consolidated financial statements and related disclosures.
In September 2015, the FASB issued ASU No. 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments" ("ASU 2015-16"), which requires (i) that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, (ii) that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date, (iii)that an entity present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. Under ASU 2015-16, this guidance becomes effective for annual periods beginning after December 15, 2016 and interim periods within annual periods beginning after December 15, 2017 with prospective application with early adoption permitted. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures.

2.
PBF LOGISTICS LP
On May 14, 2014, PBFX completed its initial public offering (the “PBFX Offering”) of 15,812,500 common units. As of September 30, 2015, PBF LLC holds a 53.7% limited partner interest in PBFX (consisting of 2,572,944 common units and 15,886,553 subordinated units) and all of PBFX's incentive distribution rights, with the remaining 46.3% limited partner interest held by public common unit holders. PBF LLC also owns indirectly a non-economic general partner interest in PBFX through its wholly-owned subsidiary, PBF GP, the general partner of PBFX.

11
ENERGY INC. AND PBF ENERGY COMPANY LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT UNIT, PER UNIT AND BARREL DATA)

During the subordination period (as set forth in the partnership agreement of PBFX) holders of the subordinated units are not entitled
2. PBF LOGISTICS LP
PBFX is a fee-based, growth-oriented, publicly traded Delaware MLP formed by PBF Energy to receive any distribution of available cash until the common units have received the minimum quarterly distribution plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. If PBFX does not pay distributions on the subordinated units, the subordinated units will not accrue arrearages for those unpaid distributions. Each subordinated unit will convert into one common unit at the end of the subordination period.
own or lease, operate, develop and acquire crude oil and refined petroleum products terminals, pipelines, storage facilities and similar logistics assets. PBFX engages in the receiving, handling, storage and transferring of crude oil, and the receipt, storage and delivery of crude oil, refined products, natural gas and intermediates. Allintermediates 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, 2019, a substantial majority of PBFX’s revenue is derived from long-term, fee-based commercial agreements with PBF Holding, which include minimum volume commitments for receiving, handling, storing and transferring crude oil, and refined products and storing crude oil and refined products.natural gas. PBF LLCEnergy 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’s initial assets consisted of a light crude oil rail unloading terminal at the Delaware City refinery that also services the Paulsboro refinery (which is referred to as the “Delaware City Rail Terminal”), and a crude oil truck unloading terminal at the Toledo refinery (which is referred to as the “Toledo Truck Terminal”) that are integral components of the crude oil delivery operations at all three of PBF Energy’s refineries. On September 30, 2014, PBF LLC contributed to PBFX all of the equity interests of Delaware City Terminaling Company II LLC, which assets consist solely of the Delaware City heavy crude unloading rack (the "DCR West Rack"), for total consideration of $150,000. On December 11, 2014, PBF LLC contributed to PBFX all of the issued and outstanding limited liability company interests of Toledo Terminaling Company LLC, whose assets consist of a tank farm and related facilities located at our Toledo refinery, including a propane storage and loading facility (the "Toledo Storage Facility"), for total consideration of $150,000. On May 14, 2015 PBF LLC contributed to PBFX all of the issued and outstanding limited liability company interests of Delaware Pipeline Company LLC ("DPC") and Delaware City Logistics Company LLC ("DCLC"), whose assets consist of a products pipeline, truck rack and related facilities located at our Delaware City refinery (collectively the "Delaware City Products Pipeline and Truck Rack"), for total consideration of $143,000.
PBFX, a variable interest entity, is consolidated by PBF Energy through its ownership of PBF LLC. PBF LLC, through its ownership of 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.

3. NONCONTROLLING INTEREST OF PBF ENERGY AND PBFX

Noncontrolling Interest in PBFX
As of June 30, 2019, PBF LLC holdsheld a 53.7%48.2% limited partner interest in PBFX and owns all(consisting of PBFX’s incentive distribution rights,29,953,631 common units) with the remaining 46.3%51.8% limited partner interest ownedheld by the public common unit holders as of September 30, 2015.unitholders. PBF LLC is also the sole member ofindirectly owns a non-economic general partner interest in PBFX through its wholly-owned subsidiary, PBF GP, the general partner of PBFX.
On February 28, 2019, PBFX closed on an Equity Restructuring Agreement (the “IDR Restructuring Agreement”) with PBF LLC consolidatesand PBF GP, pursuant to which PBFX’s incentive distribution rights (the “IDRs”) held by PBF LLC were canceled and converted into 10,000,000 newly issued PBFX common units (the “IDR Restructuring”). Subsequent to the financial resultsclosing of the IDR Restructuring, no distributions were made to PBF LLC with respect to the IDRs and the newly issued PBFX common units are entitled to normal distributions by PBFX.
PBFX Registered Direct Offering
On April 24, 2019, PBFX entered into subscription agreements to sell an aggregate of 6,585,500 common units to certain institutional investors in a registered direct public offering (the “PBFX Registered Direct Offering”) for gross proceeds of approximately $135.0 million. The PBFX Registered Direct Offering closed on April 29, 2019.
TVPC Acquisition
On April 24, 2019, PBFX entered into a contribution agreement with PBF LLC (the “TVPC Contribution Agreement”), pursuant to which PBF LLC contributed to PBFX all of the issued and recordsoutstanding limited liability company interests of TVP Holding Company LLC (“TVP Holding”) for total consideration of $200.0 million (the “TVPC Acquisition”). Prior to the TVPC Acquisition, TVP Holding owned a noncontrolling interest for the economic50% membership interest in PBFX held by the public common unit holders. Noncontrolling interest on the consolidated statements of operations includes the portion of net income or loss attributableTorrance Valley Pipeline Company LLC (“TVPC”). Subsequent to the economic interestclosing of the TVPC Acquisition on May 31, 2019, PBFX owns 100% of the membership interests in PBFX held by the public common unit holders of PBFX other than TVPC.

PBF LLC. Noncontrolling interest on the consolidated balance sheets includes the portion of net assets of PBFX attributable to the public common unit holders of PBFX.
The noncontrolling interest ownership percentage of PBFX as of September 30, 2015 and December 31, 2014, is calculated as follows:

12
ENERGY INC. AND PBF ENERGY COMPANY LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT UNIT, PER UNIT AND BARREL DATA)


3. ACQUISITIONS
East Coast Storage Assets Acquisition
On October 1, 2018, PBFX closed the acquisition of CPI Operations LLC (“CPI”), whose assets include a storage facility with multi-use storage capacity, an Aframax-capable marine facility, a rail facility, a truck terminal, equipment, contracts and certain other idled assets (collectively, the “East Coast Storage Assets”) located on the Delaware River near Paulsboro, New Jersey (the “East Coast Storage Assets Acquisition”), which had been contemplated by an agreement dated as of July 16, 2018 between PBFX and Crown Point International, LLC (“Crown Point”). Additionally, the East Coast Storage Assets Acquisition includes 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 “Contingent Consideration”) which are expected to be restarted in the fourth quarter of 2019.
The aggregate purchase price for the East Coast Storage Assets Acquisition was $127.0 million, including working capital and Contingent Consideration, which was comprised of an initial payment at closing of $75.0 million with a remaining balance of $32.0 million payable one year after closing. The residual purchase consideration consists of the Contingent Consideration. The consideration was financed through a combination of cash on hand and borrowings under the amended and restated PBFX revolving credit facility (the “PBFX Revolving Credit Facility”). The fair value allocation is subject to adjustment pending completion of the final purchase valuation, which was in process as of June 30, 2019, as the purchase price and fair value allocation may be subject to adjustment due to changes in assumptions and timing that may impact the Contingent Consideration.
PBFX accounted for the East Coast Storage Assets Acquisition as a business combination under GAAP whereby PBFX recognizes assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition.
The total purchase consideration and the estimated fair values of the assets and liabilities at the acquisition date were as follows:

Units of PBFX Held by the Public
Units of PBFX Held by PBF LLC (Including Subordinated Units)
Total
December 31, 201415,812,500
 17,171,077
 32,983,577

47.9% 52.1% 100.0%
September 30, 201515,893,313
 18,459,497
 34,352,810
 46.3% 53.7% 100.0%
(in millions)Purchase Price
Gross purchase price*$105.9
Estimated working capital adjustments—
Contingent consideration**21.1
Total consideration$127.0
* Includes $30.9 million net present value payable of $32.0 million due to Crown Point one year after closing, which is included in “Accrued expenses” on the Condensed Consolidated Balance Sheets.
** Contingent consideration is included in “Other long-term liabilities” on the Condensed Consolidated Balance Sheets.

The following table summarizes the changes in equityestimated amounts recognized for assets acquired and liabilities assumed as of the controlling and noncontrolling interests of PBF LLC for the nine months ended September 30, 2015 and 2014:
acquisition date:
 PBF Energy Company LLC Equity Noncontrolling
Interest in PBFX		 Total Equity
Balance at January 1, 2015$1,316,468
 $336,369
 $1,652,837
Comprehensive income442,895
 26,608
 469,503
Dividends and distributions(268,066) (17,082) (285,148)
Issuance of additional PBFX common units11,390
 (11,390) —
Stock-based compensation6,329
 2,428
 8,757
Exercise of PBF LLC options and warrants, net and other(1,425) —
 (1,425)
Purchase of treasury stock(8,073) —
 (8,073)
Balance at September 30, 2015$1,499,518
 $336,933
 $1,836,451
(in millions)Fair Value Allocation
Accounts receivable$0.4
Prepaid and other current assets1.8
Property, plant and equipment114.4
Intangible assets*13.3
Accounts payable(0.9)
Accrued expenses(1.3)
Other long-term liabilities(0.7)
Estimated fair value of net assets acquired$127.0

* Intangible assets are included in “Deferred charges and other assets” on the Condensed Consolidated Balance Sheets.

 PBF Energy  Company LLC Equity Noncontrolling
Interest in PBFX		 Total Equity
Balance at January 1, 2014$1,779,710
 $—
 $1,779,710
Comprehensive income546,953
 7,328
 554,281
Dividends and distributions(283,680) (2,573) (286,253)
Issuance of additional PBFX common units4,249
 (4,249) —
Stock-based compensation4,724
 653
 5,377
Record noncontrolling interest upon completion of the PBFX Offering—
 335,957
 335,957
Exercise of PBF LLC options and warrants, net and other2,477
 —
 2,477
Purchase of treasury stock(32,593) —
 (32,593)
Balance at September 30, 2014$2,021,840
 $337,116
 $2,358,956


13
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT UNIT, PER UNIT

The East Coast Storage Asset Acquisition includes consideration in the form of the Contingent Consideration. Pursuant to the agreement, PBFX and Crown Point will share equally in the future operating profits of the restarted assets, as defined in the agreement, over a contractual term of up to three years starting in 2019. PBFX recorded the Contingent Consideration based on its estimated fair value of $21.1 million at acquisition date, which was recorded in Other long-term liabilities on the Condensed Consolidated Balance Sheets.
The Company’s Condensed Consolidated Financial Statements for the six months ended June 30, 2019 include the results of operations of the East Coast Storage Assets subsequent to the East Coast Storage Assets Acquisition, whereas the same period in 2018 does not include the results of operations of such assets. On an unaudited pro forma basis, the revenues and net income of the Company, assuming the acquisition had occurred on January 1, 2017, for the period indicated, are shown below. The unaudited pro forma information does not purport to present what the Company’s actual results would have been had the East Coast Storage Assets Acquisition occurred on January 1, 2017, nor is the financial information indicative of the results of future operations. The unaudited pro forma financial information includes the depreciation and amortization expense related to the East Coast Storage Assets Acquisition and interest expense associated with the related financing.
  Six Months Ended June 30, 2018
(Unaudited, in millions)
PBF Energy  
Pro forma revenues $13,258.5
Pro forma net income attributable to PBF Energy Inc. stockholders 301.0
   
PBF LLC  
Pro forma revenues $13,258.5
Pro forma net income attributable to PBF LLC 415.7

Acquisition Expenses
The Company incurred acquisition-related costs of $3.2 million and $3.3 million for the three and six months ended June 30, 2019, respectively. The Company incurred acquisition-related costs of $0.7 million and $1.2 million for the three and six months ended June 30, 2018, respectively. Acquisition-related costs consist primarily of consulting and legal expenses related to completed, pending and non-consummated acquisitions. These costs are included in General and administrative expenses within the Condensed Consolidated Statements of Operations.
PBF ENERGY INC. AND BARREL DATA)PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



4. INVENTORIES
Inventories consisted of the following:
June 30, 2019
(in millions)Titled Inventory Inventory Intermediation Agreements Total
Crude oil and feedstocks$992.7
 $115.0
 $1,107.7
Refined products and blendstocks1,082.9
 335.1
 1,418.0
Warehouse stock and other116.5
 —
 116.5
 $2,192.1
 $450.1
 $2,642.2
Lower of cost or market adjustment(250.6) (77.2) (327.8)
Total inventories$1,941.5
 $372.9
 $2,314.4
September 30, 2015
Titled Inventory Inventory Supply and Intermediation Arrangements Total
December 31, 2018December 31, 2018
(in millions)Titled Inventory Inventory Intermediation Agreements Total
Crude oil and feedstocks$954,744
 $21,288
 $976,032
$1,044.8
 $—
 $1,044.8
Refined products and blendstocks545,279
 310,238
 855,517
1,026.9
 334.8
 1,361.7
Warehouse stock and other40,890
 —
 40,890
111.1
 —
 111.1
$1,540,913
 $331,526
 $1,872,439
$2,182.8
 $334.8
 $2,517.6
Lower of cost or market reserve(662,638) (108,619) (771,257)
Lower of cost or market adjustment(557.2) (94.6) (651.8)
Total inventories$878,275
 $222,907
 $1,101,182
$1,625.6
 $240.2
 $1,865.8
December 31, 2014
 Titled Inventory Inventory Supply and Intermediation Arrangements Total
Crude oil and feedstocks$918,756
 $61,122
 $979,878
Refined products and blendstocks520,308
 255,459
 775,767
Warehouse stock and other36,726
 —
 36,726
 $1,475,790
 $316,581
 $1,792,371
Lower of cost or market reserve(609,774) (80,336) (690,110)
Total inventories$866,016
 $236,245
 $1,102,261


Inventory under inventory supply and intermediation arrangementsagreements includes certain crude oil stored at the Company’s Delaware City refinery's storage facilities that the Company will purchase as it is consumed in connection with its crude supply agreement; and intermediates andcertain light finished products sold to counterparties in connection with the amended and restated inventory intermediation agreements and stored(as amended in the Paulsboro andfirst quarter of 2019, the “Inventory Intermediation Agreements”) with J. Aron & Company, a subsidiary of The Goldman Sachs Group, Inc. (“J. Aron”). This inventory is held in the Company’s storage tanks at the Delaware City refineries'and Paulsboro refineries and at PBFX’s East Coast Storage Assets (the “PBFX East Coast Storage Facility”, and together with the Company’s storage facilities.
Due to the lower crude oil and refined product pricing environmenttanks at the end of 2014Delaware City and intoPaulsboro refineries, the third quarter of 2015, the Company recorded adjustments to value its inventories to the lower of cost or market. “Storage Tanks”).
During the three months ended SeptemberJune 30, 2015,2019, the Company recorded an adjustment to value its inventories to the lower of cost or market which decreased both operating income and net income by $208,313$182.0 million, reflecting the net change in the lower of cost or market (“LCM”) inventory reserve from $562,944$145.8 million at March 31, 2019 to $327.8 million at June 30, 2015 to $771,257 at September 30, 2015.2019. During the ninesix months ended SeptemberJune 30, 2015,2019, the Company recorded an adjustment to value its inventories to the lower of cost or market which decreased bothincreased operating income and net income by $81,147$324.0 million, reflecting the net change in the LCM inventory reserve from $651.8 million at December 31, 2018 to $327.8 million at June 30, 2019.
During the three months ended June 30, 2018, the Company recorded an adjustment to value its inventories to the lower of cost or market inventorywhich increased operating income by $158.0 million, reflecting the net change in the LCM reserve from $690,110$212.8 million at March 31, 2018 to $54.8 million at June 30, 2018. During the six months ended June 30, 2018, the Company recorded an adjustment to value its inventories to the lower of cost or market which increased operating income by $245.7 million, reflecting the net change in the LCM reserve from $300.5 million at December 31, 20142017 to $771,257$54.8 million at SeptemberJune 30, 2015.2018.



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

5. DEFERRED CHARGES AND OTHER ASSETS, NET
Deferred charges and other assets, net consisted of the following:

 September 30,
2015		 December 31,
2014
Deferred turnaround costs, net$183,618
 $204,987
Catalyst, net71,516
 77,322
Deferred financing costs, net34,495
 32,280
Linefill10,230
 10,230
Restricted cash1,500
 1,521
Intangible assets, net231
 357
Other9,830
 5,972
Total deferred charges and other assets, net$311,420
 $332,669

6.5. ACCRUED EXPENSES
Accrued expenses consisted of the following:

PBF Energy (in millions)
June 30, 2019 December 31, 2018
Inventory-related accruals$1,121.8
 $846.3
Inventory intermediation agreements315.6
 249.4
Excise and sales tax payable132.9
 149.4
Accrued transportation costs60.2
 53.6
Accrued utilities32.2
 49.8
Deferred payment - East Coast Storage Assets Acquisition31.7
 30.9
Accrued capital expenditures29.6
 60.6
Renewable energy credit and emissions obligations26.5
 27.1
Accrued refinery maintenance and support costs19.9
 19.0
Accrued salaries and benefits13.6
 89.8
Accrued interest12.5
 12.1
Environmental liabilities9.7
 7.0
Customer deposits1.4
 5.6
Other39.2
 23.0
Total accrued expenses$1,846.8
 $1,623.6

PBF LLC (in millions)
June 30, 2019 December 31, 2018
Inventory-related accruals$1,121.8
 $846.3
Inventory intermediation agreements315.6
 249.4
Excise and sales tax payable132.9
 149.4
Accrued transportation costs60.2
 53.6
Accrued interest34.7
 29.9
Accrued utilities32.2
 49.8
Deferred payment - East Coast Storage Assets Acquisition31.7
 30.9
Accrued capital expenditures29.6
 60.6
Renewable energy credit and emissions obligations26.5
 27.1
Accrued refinery maintenance and support costs19.9
 19.0
Accrued salaries and benefits13.6
 89.8
Environmental liabilities9.7
 7.0
Customer deposits1.4
 5.6
Other40.2
 24.3
Total accrued expenses$1,870.0
 $1,642.7

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 September 30,
2015		 December 31,
2014
Inventory-related accruals$407,678
 $588,297
Inventory supply and intermediation arrangements212,930
 253,549
Accrued distribution115,228
 —
Accrued transportation costs49,548
 59,959
Accrued salaries and benefits37,766
 56,117
Excise and sales tax payable20,430
 40,444
Accrued interest20,100
 23,127
Accrued utilities9,633
 22,337
Customer deposits8,910
 24,659
Accrued construction in progress4,634
 31,452
Renewable energy credit obligations—
 286
Other21,641
 30,678
Total accrued expenses$908,498
 $1,130,905

The Company has the obligation to repurchase certain intermediatescrude oil, intermediate and finished products (the “Products”) that are held in the Company’s refinery storage tanks at the Delaware City and Paulsboro refineriesStorage Tanks in accordance with the Inventory Intermediation Agreements with J. Aron & Company,Aron. As of June 30, 2019 and December 31, 2018, a subsidiary of The Goldman Sachs Group, Inc. ("J. Aron"). A liability is recognized for the Inventory supply and intermediation arrangementsIntermediation Agreements and is recorded at market price for the J. Aron owned inventory held in the Company's storage tanksCompany’s Storage Tanks under the Inventory Intermediation Agreements, with any change in the market price being recorded in costCost of sales.
The Company has the obligation to purchaseproducts and sell feedstocks under a supply agreement with Statoil Marketing and Trading (US) Inc. ("Statoil") for its Delaware City refinery (the “Crude Supply Agreement”).  Statoil purchases the refinery's production of certain feedstocks or purchases feedstocks from third parties on the refineries' behalf. Legal title to the feedstocks is held by Statoil and the feedstocks are held in the refinery's storage tanks until they are needed for further use in the refining process. At that time, the products are drawn out of the storage tanks and purchased by the refinery. These purchases and sales are settled monthly at the daily market prices related to those

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

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 refinery to Statoil. Inventory remains at cost and the net cash receipts result in a liability.other.
The Company is subject to obligations to purchase Renewable Identification Numbers ("RINs"(“RINs”) required to comply with the Renewable Fuels Standard. The Company'sCompany’s overall RINs obligation is based on a percentage of domestic shipments of on-road fuels as established by the Environmental Protection Agency ("EPA"(“EPA”). 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 Expensesexpenses when its RINs liability is greater than the amount of RINs earned and purchased in a given period and in Prepaid expenses and other current assets when the amount of RINs earned and purchased is greater than the RINs liability.

7. CREDIT FACILITIES
On April 29, 2015, PBF Rail Logistics LLC ("PBF Rail"), an indirect wholly-owned subsidiary of PBF Holding, entered into In addition, the First AmendmentCompany is subject to Loan Agreement (as amended, the “Rail Facility”) among Credit Agricole Corporate + Investment Bank as Administrative Agent, Deutsche Bank Trust Company Americas as Collateral Agent, DVB Bank SE as Syndication Agent, ING Bank, a branch of ING-DiBa AG as Documentation Agentobligations to comply with federal and certain other Continuing Lenders, as definedstate legislative and regulatory measures, including regulations in the agreement. The primary purposestate of the Rail Facility isCalifornia pursuant to fund the acquisition by PBF Rail of coiledAssembly Bill 32 (“AB32”), to address environmental compliance and insulated crude tank carsgreenhouse gas and non-coiledother emissions. These requirements include incremental costs to operate and non-insulated general purpose crude tank cars. The amendmentsmaintain our facilities as well as to the Rail Facility include the extension of the maturity to April 29, 2017, the reduction of the total commitment from $250,000 to $150,000,implement and the reduction of the commitment fee on the unused portion of the Rail Facility.
On May 12, 2015, PBFX entered into an indenture among the Partnership, PBF Logistics Finance Corporation, a Delaware corporationmanage new emission controls and wholly-owned subsidiary of the Partnership ("PBF Logistics Finance,"programs. Renewable energy credit and togetheremissions obligations fluctuate with the Partnership, the "Issuers"), the Guarantors named therein (certain subsidiariesvolume of PBFX)applicable product sales and Deutsche Bank Trust Company Americas, as Trustee, under which the Issuers issued $350,000 intiming of credit purchases.

6. AFFILIATE NOTE PAYABLE - PBF LLC
As of June 30, 2019 and December 31, 2018, PBF LLC had an outstanding note payable with PBF Energy for an aggregate principal amount of 6.875% Senior Notes due 2023 (the "PBFX Senior Notes").$378.4 million and $326.1 million, respectively. During the second quarter of 2019, the note payable was amended to extend the maturity date from April 2020 to April 2030. The note has 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 has provided a limited guarantee of collection of the principal amount of the PBFX Senior Notes, but is not otherwise subject to the covenants of the indenture. Of the $350,000 aggregate PBFX Senior Notes, $19,910 were purchased by certain of PBF Energy’s officers and directors and their affiliates and family members pursuant to a separate private placement transaction. After deducting offering expenses, PBFX received net proceeds of approximately $343,000 from the PBFX Senior Notes offering.without penalty or premium.

PBF LLC, exclusive of its consolidating subsidiaries, provides a limited guarantee of collection of the principal amount of the PBFX Senior Notes. Under the PBF LLC parent company limited guarantee, PBF LLC would not have any obligation to make principal payments with respect to the notes unless all remedies, including in the context of bankruptcy proceedings, have first been fully exhausted against PBFX with respect to such payment obligation, and holders of the PBFX Senior Notes are still owed amounts in respect of the principal of the notes. PBF LLC is not otherwise subject to the covenants of the indenture governing the notes. As a result of the limited guarantee the following PBF LLC parent company balance sheets and statements of operations support the limited guarantee of collection.

16
ENERGY INC. AND PBF ENERGY COMPANY LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT UNIT, PER UNIT

7. COMMITMENTS AND BARREL DATA)

CONTINGENCIES
PBF ENERGY COMPANY LLC (PARENT COMPANY)
BALANCE SHEETS
(in thousands)
    
 September 30,
2015		 December 31,
2014
ASSETS   
Current assets:   
Cash and cash equivalents$83,924
 $135,210
Due from related parties268,090
 —
Other current assets15,234
 —
Total current assets367,248
 135,210
Intercompany note receivable18,178
 12,510
Investment in subsidiaries1,235,039
 1,173,854
Total assets$1,620,465
 $1,321,574
    
LIABILITIES AND EQUITY   
    
Current liabilities:   
Due to related parties$115,228
 $—
    
Total equity1,505,237
 1,321,574
Total liabilities and equity$1,620,465
 $1,321,574

PBF ENERGY COMPANY LLC (PARENT COMPANY)
STATEMENT OF OPERATIONS
(in thousands)
 Three Months Ended September 30, Nine Months Ended September 30,
 2015 2014 2015 2014
Equity in earnings of subsidiaries$59,083
 $257,191
 $441,770
 $546,180
Interest (expense) income(293) (5) (190) 157
Net income$58,790
 $257,186
 $441,580
 $546,337

8. MARKETABLE SECURITIES
The U.S Treasury securities purchased byIn the ordinary conduct of the Company’s business, the Company withis 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 proceeds fromCompany accrues liabilities for these matters if the PBFX Offering are used as collateral to secureCompany has determined that it is probable a three-year, $300,000 term loan facility entered into by PBFX (the "PBFX Term Loan"). PBFX anticipates holding the securities for an indefinite amount of time (the securities will be rolled over as they mature). As necessary and at the discretion of PBFX, these securities are expected to be liquidatedloss has been incurred and the proceeds usedloss 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 fund future capital expenditures. While PBFX does not routinely sell marketable securities prior to their scheduled maturity dates, someestimate a range of PBFX's investments may be held and restricted for the purpose of funding future capital expenditures and acquisitions, so these investments are classified as available-for-sale marketable securities as they may occasionally be sold prior to their scheduled maturity datespossible 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 unexpected timingpotential claims. However, the ultimate resolution of cash needs. The carrying valueone or more of these marketable securities approximates fair value and are measured using Level 1 inputs.

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

The maturitiescontingencies could result in an adverse outcome that may have a material effect on our financial position, results of the marketable securities range from one to three months and are classified on the balance sheet in non-current assets.
As of September 30, 2015 and December 31, 2014, the Company held $234,249 and $234,930, respectively, in marketable securities. The gross unrecognized holding gains and losses as of September 30, 2015 and December 31, 2014 were not material. The net realized gainsoperations or losses from the sale of marketable securities were immaterial for the three and nine months ended September 30, 2015 and 2014.

9. COMMITMENTS AND CONTINGENCIEScash 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, 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 our current operations are in substantial 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 Paulsboroacquisition of the Torrance refinery acquisition,and related logistics assets, the Company assumed certain pre-existing environmental liabilities totaling $125.4 million as of June 30, 2019 ($130.8 million as of December 31, 2018), related to certain environmental remediation obligations. The environmental liabilityobligations to address existing soil and groundwater contamination and monitoring activities and other clean-up activities, which reflects the current estimated cost of $10,714 recorded as of September 30, 2015 ($10,476 as of December 31, 2014) represents the present value of expected future costs discounted at a rate of 8%.remediation obligations. The current portion of the environmental liability is recorded in accruedAccrued expenses and the non-current portion is recorded in otherOther long-term liabilities. As of September
The accrued environmental liability reflected in the Company’s Condensed Consolidated Balance Sheets was $139.2 million and $144.2 million at June 30, 20152019 and December 31, 2014, this liability2018, respectively, of which $129.5 million and $137.2 million, respectively, were classified as Other long-term liabilities. These accruals include remediation and monitoring costs, related to the Torrance refinery, as discussed above, and other operating assets, 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.
During the first quarter of 2019, PBFX notified certain agencies of an oil sheen in the Schuylkill River potentially sourcing from a PBFX facility. Clean-up was immediately initiated, and oil is self-guaranteed byno longer being released into the Company.
In connection with the acquisitionwaterway. The source of the Delaware City assets, Valero Energy Corporation ("Valero") remains responsible for certain pre-acquisition environmental obligations up to $20,000oil is currently under investigation. Although full clean-up and the predecessor to Valero in ownership of the refinery retains other historical obligations.
In connection with the acquisition of the Delaware City assets and the Paulsboro refinery, the Company and Valero purchased ten year, $75,000 environmental insurance policies to insure against unknown environmental liabilities at each site. In connection with the Toledo refinery acquisition, Sunoco, Inc. (R&M) ("Sunoco") remains responsible for environmental remediation for conditions that existed on the closing date for twenty years from March 1, 2011, subject to certain limitations.
In 2010, New York State adopted a Low-Sulfur Heating Oil mandate that, beginning July 1, 2012, requires all heating oil sold in New York State to contain no more than 15 parts per million ("PPM") sulfur. Since July 1, 2012, other states in the Northeast market began requiring heating oil sold in their state to contain no more than 15 PPM sulfur. Currently, six Northeastern states require heating oil with 15 PPM or less sulfur. By July 1, 2016, two more states are expected to adopt this requirement and by July 1, 2018 most of the remaining Northeastern states (except for Pennsylvania and New Hampshire) will require heating oil with 15 PPM or less sulfur. All of the heating oil the Company currently produces meets these specifications. The mandate and other requirements docosts have not currently have a material impact on the Company's financial position, results of operations or cash flows.
The EPA issued the final Tier 3 Gasoline standards on March 3, 2014 under the Clean Air Act. This final rule establishes more stringent vehicle emission standards and further reduces the sulfur content of gasoline starting in January of 2017.  The new standard is set at 10 PPM sulfur in gasoline on an annual average basis starting January 1, 2017, with a credit trading program to provide compliance flexibility. The EPA responded to industry comments on the proposed rule and maintained the per gallon sulfur cap on gasoline at the existing 80 PPM cap. The standards set by the new rulebeen completed, such incremental costs are not expected to have abe material impact onto the Company’s financial position, results of operations or cash flows.Company.
The EPA was required to release the final annual standards for the Reformulated Fuels Standard ("RFS") for 2014 no later than Nov 29, 2013 and for 2015 no later than Nov 29, 2014. The EPA did not meet these requirements but did release proposed standards for 2014. The EPA did not finalize this proposal in 2014. However, in May 2015,

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

the EPA re-proposed annual standards for RFS 2 for 2014, and proposed new standards for 2015 and 2016 and biomass-based diesel volumes for 2017. The EPA is proposing volume requirements in the annual standards which, while below the volumes originally set by Congress, would increase renewable fuel use in the U.S. above historical levels and provide for steady growth over time. The EPA is also proposing to increase the required volume of biomass-based diesel in 2015, 2016, and 2017 while maintaining the opportunity for growth in other advanced biofuels. The EPA has solicited comments on the proposed annual standards and held public hearings on June 25, 2015. Final action on this proposal is expected by November 30, 2015. If they are issued, the final standards may have a material impact on the Company's cost of compliance with RFS 2.
On September 12, 2012, the EPA issued final amendments to the New Source Performance Standards ("NSPS") for petroleum refineries, including standards for emissions of nitrogen oxides from process heaters and work practice standards and monitoring requirements for flares.  The Company has evaluated the impact of the regulation and amended standards on its refinery operations and currently does not expect the cost to comply to be material.
In addition, the EPA published a Final Rule to the Clean Water Act ("CWA") Section 316(b) in August 2014 regarding cooling water intake structures which includes requirements for petroleum refineries. The purpose of this rule is to prevent fish from being trapped against cooling water intake screens (impingement) and to prevent fish from being drawn through cooling water systems (entrainment). Facilities will be required to implement Best Technology Available (BTA) as soon as possible, but state agencies have the discretion to establish implementation time lines. The Company continues to evaluate the impact of this regulation, and at this time does not anticipate it having a material impact on the Company’s financial position, results of operations or cash flows.

The Delaware City Rail Terminal and DCR West Rack are collocated with the Delaware City refinery, and are located in Delaware's coastal zone where certain activities are regulated under the Delaware Coastal Zone act. On June 14, 2013, two administrative appeals were filed by the Sierra Club and Delaware Audubon (collectively the "Appellants") regarding an air permit Delaware City Refining obtained to allow loading of crude oil onto barges. The appeals allege that both the loading of crude oil onto barges and the operation of the Delaware City Rail Terminal violate Delaware’s Coastal Zone Act. The first appeal is Number 2013-1 before the State Coastal Zone Industrial Control Board (the “CZ Board”), and the second appeal is before the Environmental Appeals Board (the "EAB") and appeals Secretary’s Order No. 2013-A-0020. The CZ Board held a hearing on the first appeal on July 16, 2013, and ruled in favor of Delaware City Refining and the State of Delaware and dismissed the Appellants’ appeal for lack of standing. The Appellants appealed that decision to the Delaware Superior Court, New Castle County, Case No. N13A-09-001 ALR, and Delaware City Refining and the State of Delaware filed cross-appeals. A hearing on the second appeal before the EAB, case no. 2013-06, was held on January 13, 2014, and the EAB ruled in favor of Delaware City Refining and the State and dismissed the appeal for lack of jurisdiction. The Appellants also filed a Notice of Appeal with the Superior Court appealing the EAB’s decision. On March 31, 2015 the Superior Court affirmed the decisions by both the CZ Board and the EAB stating they both lacked jurisdiction to rule on the Appellants' appeal. The Appellants appealed to the Delaware Supreme Court, and, on November 5, 2015, the Delaware Supreme Court affirmed the Superior Court decision.
The Company is also currently subject to certain other existing environmental claims and proceedings. The Company believes that there is only a remote possibility that future costs related to any of these other known contingent liability exposures would have a material impact on its financial position, results of operations or cash flows.

PBF LLC Limited Liability Company Agreement

The holders of limited liability company interests in PBF LLC, including PBF Energy, generally have to include for purposes of calculating their U.S. federal, state and local income taxes their share of any taxable income of PBF LLC, regardless of whether such holders receive cash distributions from PBF LLC. PBF Energy ultimately may not receive cash distributions from PBF LLC equal to its share of such taxable income or even equal to the actual tax due with respect to that income. For example, PBF LLC is required to include in taxable income PBF LLC’s allocable share of PBFX’s taxable income and gains (such share to be determined pursuant to the partnership

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

agreement of PBFX), regardless of the amount of cash distributions received by PBF LLC from PBFX, and such taxable income and gains will flow-through to PBF Energy to the extent of its allocable share of the taxable income of PBF LLC. As a result, at certain times, the amount of cash otherwise ultimately available to PBF Energy on account of its indirect interest in PBFX may not be sufficient for PBF Energy to pay the amount of taxes it will owe on account of its indirect interests in PBFX.

Taxable income of PBF LLC generally is allocated to the holders of PBF LLC units (including PBF Energy) pro rata in accordance with their respective share of the net profits and net losses of PBF LLC. In general, PBF LLC is required to make periodic tax distributions to the members of PBF LLC, including PBF Energy, pro rata in accordance with their respective percentage interests for such period (as determined under the amended and restated limited liability company agreement of PBF LLC), subject to available cash and applicable law and contractual restrictions (including pursuant to our debt instruments) and based on certain assumptions. Generally, these tax distributions are required to be in an amount equal to our estimate of the taxable income of PBF LLC for the year multiplied by an assumed tax rate equal to the highest effective marginal combined U.S. federal, state and local income tax rate prescribed for an individual or corporate resident in New York, New York (taking into account the nondeductibility of certain expenses). If, with respect to any given calendar year, the aggregate periodic tax distributions were less than the actual taxable income of PBF LLC multiplied by the assumed tax rate, PBF LLC is required to make a “true up” tax distribution, no later than March 15 of the following year, equal to such difference, subject to the available cash and borrowings of PBF LLC. PBF LLC obtains funding to pay its tax distributions by causing PBF Holding to distribute cash to PBF LLC and from distributions it receives from PBFX.


Tax Receivable Agreement

PBF Energy entered into a tax receivable agreement with the PBF LLC Series A and PBF LLC Series B Unit holdersunitholders (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’sEnergy 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.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 94.4%99.0% interest in PBF LLC as of SeptemberJune 30, 2015 (89.9%2019 (99.0% as of December 31, 2014)2018). 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.

As of June 30, 2019, PBF Energy has recognized a liability for the Tax Receivable Agreement of $373.5 million ($373.5 million as of December 31, 2018) reflecting the estimate of the undiscounted amounts that the Company expects to pay under the agreement.


8. LEASES
The Company leases office space, office equipment, refinery facilities and equipment, railcars and other logistics assets primarily under non-cancelable operating leases, with terms typically ranging from one to twenty years, subject to certain renewal options as applicable. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of lease liabilities and right-of-use assets. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet.
The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate.
The Company does not separate lease and nonlease components of contracts. There are no material residual value guarantees associated with any of the Company’s leases. There are no significant restrictions or covenants included in the Company’s lease agreements other than those that are customary in such arrangements. Certain of the Company’s leases, primarily for the Company’s commercial and logistics asset classes, include provisions for variable payments. These variable payments are typically determined based on a measure of throughput or actual days the asset is operated during the contract term or another measure of usage and are not included in the initial measurement of lease liabilities and right-of-use assets.
20
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT UNIT, PER UNIT

Lease Position as of June 30, 2019
The table below presents the lease related assets and liabilities recorded on the Company’s Condensed Consolidated Balance Sheets as of June 30, 2019:
(in millions) Classification on the Balance Sheet June 30, 2019
Assets    
Operating lease assets Operating lease right of use assets $236.9
Finance lease assets Deferred charges and other assets, net 14.2
Total lease right of use assets   $251.1
     
Liabilities    
Current liabilities:    
Operating lease liabilities Current operating lease liabilities $80.2
Finance lease liabilities Accrued expenses 1.1
Noncurrent liabilities:    
Operating lease liabilities Long-term operating lease liabilities 156.1
Finance lease liabilities Other long-term liabilities 13.3
Total lease liabilities   $250.7

Lease Costs
The table below presents certain information related to costs for the Company’s leases for the three and six months ended June 30, 2019:
Lease Costs (in millions)
 Three Months Ended June 30, 2019 Six Months Ended June 30, 2019
Components of total lease cost:    
Finance lease cost 
 
Amortization of right of use assets $0.4
 $0.4
Interest on lease liabilities 0.2
 0.2
Operating lease cost 26.0
 52.2
Short-term lease cost 25.1
 48.4
Variable lease cost 2.1
 3.5
Total lease cost $53.8
 $104.7


There were no net gains or losses on any sale-leaseback transactions for the three and six months ended June 30, 2019.
PBF ENERGY INC. AND BARREL DATA)PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


11.
Other Information
The table below presents supplemental cash flow information related to leases for the six months ended June 30, 2019:
(in millions) Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:  
Operating cash flows for operating leases $52.0
Operating cash flows for finance leases 0.2
Financing cash flows for finance leases 0.2
Supplemental non-cash amounts of lease liabilities arising from obtaining right-of-use assets 46.2

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 June 30, 2019:
June 30, 2019
Weighted average remaining lease term - operating leases5.5 years
Weighted average remaining lease term - finance leases9.8 years
Weighted average discount rate - operating leases7.97%
Weighted average discount rate - finance leases6.83%

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Undiscounted Cash Flows
The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Condensed Consolidated Balance Sheets as of June 30, 2019:
Amounts due within twelve months of June 30, (in millions)
 Finance Leases Operating Leases
2019 $2.0
 $95.3
2020 2.0
 68.3
2021 2.0
 30.9
2022 2.0
 22.8
2023 2.0
 18.6
Thereafter 9.8
 68.0
Total minimum lease payments 19.8
 303.9
Less: effect of discounting 5.4
 67.6
Present value of future minimum lease payments 14.4
 236.3
Less: current obligations under leases 1.1
 80.2
Long-term lease obligations $13.3
 $156.1

As of June 30, 2019, the Company has entered certain leases that have not yet commenced. Such leases include a 15-year lease for hydrogen supply, with future lease payments estimated to total approximately $212.6 million, expected to commence in the second quarter of 2020, and a 30-year lease for use of port facilities, with future lease payments estimated to total approximately $238.6 million, expected to commence in the third quarter of 2019. There are no material lease arrangements, in which the Company is the lessor.

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 99.0% as of June 30, 2019 and December 31, 2018, 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 represents the portion of net assets of PBF Energy attributable to the members of PBF LLC other than PBF Energy.
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


The noncontrolling interest ownership percentages in PBF LLC as of June 30, 2019 and December 31, 2018 are calculated as follows:
 Holders of PBF LLC Series A Units Outstanding Shares of PBF Energy Class A Common Stock 
Total *
December 31, 20181,206,325
 119,874,191
 121,080,516
 1.0% 99.0% 100.0%
June 30, 20191,206,325
 119,894,441
 121,100,766
 1.0% 99.0% 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 48.2% limited partner interest in PBFX with the remaining 51.8% limited partner interest owned by the public common unitholders as of June 30, 2019. PBF LLC is also the sole member of PBF GP, the general partner of PBFX. As noted in “Note 2 - PBF Logistics LP”, pursuant to the IDR Restructuring, the IDRs held by PBF LLC were canceled and converted into newly issued common units. In addition, PBFX issued 6,585,500 common units to certain institutional investors in connection with the PBFX Registered Direct Offering on April 29, 2019.
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.
The noncontrolling interest ownership percentages in PBFX as of December 31, 2018, the closing of the PBFX Registered Direct Offering and June 30, 2019 are calculated as follows:

Units of PBFX Held by the Public
Units of PBFX Held by PBF LLC
Total
December 31, 201825,395,032
 19,953,631
 45,348,663

56.0% 44.0% 100.0%
April 29, 2019 - PBFX Registered Direct Offering32,047,718
 29,953,631
 62,001,349
 51.7% 48.3% 100.0%
June 30, 201932,153,579
 29,953,631
 62,107,210
 51.8% 48.2% 100.0%

Noncontrolling Interest in PBF Holding
In connection with the Chalmette Acquisition, PBF Holding recorded 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 both the three and six months ended June 30, 2019 and 2018 the Company recorded noncontrolling interest in the earnings of these subsidiaries of less than $0.2 million.
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
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, 2019 and 2018, 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, 2019$2,676.5
 $112.2
 $10.9
 $448.9
 $3,248.5
Comprehensive income197.6
 2.8
 0.1
 20.0
 220.5
Dividends and distributions(71.9) (2.3) —
 (30.0) (104.2)
Issuance of additional PBFX common units152.0

—

—

(19.5) 132.5
Stock-based compensation13.9
 —
 —
 4.4
 18.3
Exercise of PBF LLC and PBF Energy options and warrants, net0.2

—

—
 —
 0.2
Other(0.9) —
 —
 (1.8) (2.7)
Balance at June 30, 2019$2,967.4
 $112.7
 $11.0
 $422.0
 $3,513.1

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, 2018$2,336.6
 $110.2
 $10.8
 $445.3
 $2,902.9
Comprehensive income302.8
 7.4
 —
 19.6
 329.8
Dividends and distributions(67.3) (1.4) —
 (23.6) (92.3)
Effects of exchanges of PBF LLC Series A Units on deferred tax assets and liabilities and Tax Receivable Agreement obligation(2.4) —
 —
 —
 (2.4)
Stock-based compensation9.5
 —
 —
 3.5
 13.0
Exercise of PBF LLC and PBF Energy options and warrants, net11.7
 (0.3) —
 —
 11.4
Other10.9
 —
 —
 (1.0) 9.9
Balance at June 30, 2018$2,601.8
 $115.9
 $10.8
 $443.8
 $3,172.3
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, 2019 and 2018, 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, 2019$2,759.6
 $10.9
 $448.9
 $3,219.4
Comprehensive income272.1
 0.1
 20.0
 292.2
Dividends and distributions(127.5) —
 (30.0) (157.5)
Exercise of PBF LLC options and warrants, net(0.7) —
 —
 (0.7)
Issuance of additional PBFX common units152.0

—

(19.5) 132.5
Stock-based compensation13.9

—

4.4
 18.3
Other—
—
—
—
(1.8) (1.8)
Balance at June 30, 2019$3,069.4
 $11.0
 $422.0
 $3,502.4
PBF LLC (in millions)
PBF Energy Company LLC Equity Noncontrolling
Interest in PBF Holding		 Noncontrolling
Interest in PBFX		 Total Equity
Balance at January 1, 2018$2,422.4
 $10.8
 $445.3
 $2,878.5
Comprehensive income418.1
 —
 19.6
 437.7
Dividends and distributions(68.7) —
 (23.6) (92.3)
Stock-based compensation9.5
 —
 3.5
 13.0
Exercise of PBF LLC and PBF Energy options and warrants, net(3.3) —
 —
 (3.3)
Other10.9
 —
 (1.0) 9.9
Balance at June 30, 2018$2,788.9
 $10.8
 $443.8
 $3,243.5







PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


10. DIVIDENDS AND DISTRIBUTIONS
With respect to dividends and distributions paid during the ninesix months ended SeptemberJune 30, 2015,2019, PBF LLC made an aggregate non-tax quarterly distributionsdistribution of $81,954,$72.7 million, or $0.90$0.30 per unit to its members, of which $77,287$71.9 million was distributed proratapro-rata to PBF Energy and the balance was distributed to its other members. PBF Energy used this $77,287$71.9 million to pay a quarterly cash dividendsdividend of $0.30 per share of Class A common stock on both March 10, 2015,14, 2019 and May 27, 2015 and August 10, 2015.30, 2019. In addition, during the ninesix months ended SeptemberJune 30, 2015,2019, PBF LLC made aggregate tax distributions to its members of $186,112,$54.8 million, of which $175,551$53.2 million was distributedmade to PBF Energy.


With respect to distributions paid during the ninesix months ended SeptemberJune 30, 2015,2019, PBFX paid a distribution on outstanding common and subordinated units of $0.33$0.505 per unit on March 4, 2015, $0.3514, 2019 and $0.510 per unit on May 29, 2015 and $0.37 per unit on August 31, 2015 for a total distribution of $35,772,30, 2019, of which $18,690$30.4 million was distributed to PBF LLC and the balance was distributed to its public unit holders.unitholders.


12. TREASURY UNITS

On August 19, 2014, PBF Energy's Board of Directors authorized the repurchase of up to $200,000 of the Company's Series C Units, through the repurchase of PBF Energy’s Class A common stock (the "Repurchase Program"). On October 29, 2014, PBF Energy's Board of Directors approved an additional $100,000 increase to the existing Repurchase Program. As of September 30, 2015, the Company has purchased approximately 6.05 million of the Company's Series C Units under the Repurchase Program, for a total of $150,804 through the purchase of PBF Energy’s Class A common stock in open market transactions. During the three and nine months ended September 30, 2015, the Company repurchased 142,487 and 284,771 of the Company's Series C Units, respectively, for $4,073 and $8,073, respectively through the purchase of PBF Energy’s Class A common stock in open market transactions. During both, the three and nine months ended September 30, 2014, the Company repurchased 1,354,943 of the Company's Series C Units for $32,593 through the purchase of PBF Energy’s Class A common stock in open market transactions.

The following table summarizes PBF Energy's Class A common stock repurchase activity under the Repurchase Program:

Number of shares purchased (1)
 Cost of purchased shares
Shares purchased as of December 31, 20145,765,946
 $142,731
Shares purchased during the nine months ended September 30, 2015284,771
 8,073
Shares purchased as of September 30, 20156,050,717
 $150,804
__________   
(1) - The shares purchased include only those shares that have settled as of the period end date.
These repurchases may be made from time to time through various methods, including open market transactions, block trades, accelerated share repurchases, privately negotiated transactions or otherwise, certain of which may be effected through Rule 10b5-1 and Rule 10b-18 plans. The timing and number of shares repurchased will depend on a variety of factors, including price, capital availability, legal requirements and economic and market conditions. PBF Energy is not obligated to purchase any shares under the Repurchase Program, and repurchases may be suspended or discontinued at any time without prior notice.

As of September 30, 2015, PBF Energy has the ability to purchase an additional $149,196 in Class A common stock under the approved Repurchase Program.


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

13.11. EMPLOYEE BENEFIT PLANS
The components of net periodic benefit cost related to the Company’s defined benefit plans consisted of the following:
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
(in millions) Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
Pension Benefits 2015 2014 2015
2014 2019 2018 2019
2018
Components of net periodic benefit cost:                
Service cost $5,790
 $5,134
 $17,369
 $14,276
 $10.9
 $11.8
 $21.8
 $23.6
Interest cost 710
 616
 2,126
 1,787
 2.1
 1.4
 4.2
 2.8
Expected return on plan assets (830) (546) (2,489) (1,609) (2.4) (2.1) (4.8) (4.2)
Amortization of prior service costs 13
 13
 39
 26
Amortization of loss 311
 277
 933
 757
Amortization of prior service cost and actuarial loss —
 0.1
 0.1
 0.2
Net periodic benefit cost $5,994
 $5,494
 $17,978
 $15,237
 $10.6
 $11.2
 $21.3
 $22.4

(in millions)Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
Post-Retirement Medical Plan2019 2018 2019 2018
Components of net periodic benefit cost:       
Service cost$0.3
 $0.2
 $0.5
 $0.5
Interest cost0.1
 0.3
 0.3
 0.4
Amortization of prior service cost0.2
 0.1
 0.3
 0.3
Net periodic benefit cost$0.6
 $0.6
 $1.1
 $1.2


PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


12. REVENUES
Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
As described in “Note 16 - 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 
 September 30,		 Nine Months Ended 
 September 30,
Post Retirement Medical Plan 2015 2014 2015 2014
Components of net periodic benefit cost:        
Service cost $243
 $269
 $731
 $747
Interest cost 134
 125
 403
 353
Amortization of prior service costs 76
 52
 228
 107
Amortization of loss (gain) —
 —
 —
 (4)
Net periodic benefit cost $453
 $446
 $1,362
 $1,203
 Three Months Ended June 30,
(in millions)2019 2018
Refining Segment:   
Gasoline and distillates$5,570.7
 $6,341.8
Asphalt and blackoils531.8
 397.2
Feedstocks and other203.9
 403.2
Chemicals177.6
 202.6
Lubricants67.9
 94.8
Total6,551.9
 7,439.6
Logistics Segment:   
Logistics82.8
 68.1
Total revenue prior to eliminations6,634.7
 7,507.7
Elimination of intercompany revenue(74.7) (63.6)
Total Revenues$6,560.0
 $7,444.1

 Six Months Ended June 30,
(in millions)2019 2018
Refining Segment:   
Gasoline and distillates$10,003.7
 $11,336.1
Asphalt and blackoils884.8
 706.1
Feedstocks and other404.6
 641.4
Chemicals329.3
 378.7
Lubricants138.2
 176.4
Total11,760.6
 13,238.7
Logistics Segment:   
Logistics161.6
 132.8
Total revenue prior to eliminations11,922.2
 13,371.5
Elimination of intercompany revenue(146.0) (124.6)
Total Revenues$11,776.2
 $13,246.9


PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


The majority of the Company’s revenues are generated from the sale of refined petroleum 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.
Logistics segment revenue is 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 Revenues
The Company records deferred revenues when cash payments are received or are due in advance of performance, including amounts which are refundable. Deferred revenue was $25.3 million and $20.1 million as of June 30, 2019 and December 31, 2018, 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.

13. INCOME TAXES
PBF Energy files federal and applicable state corporate income tax returns and recognizes income taxes on its pre-tax income, which to date has consisted primarily of its share of PBF LLC’s pre-tax income (approximately 99.0% as of June 30, 2019 and December 31, 2018, 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 Ltd, that are treated as C-Corporations for income tax purposes.
The reported 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)2019 2018 2019 2018
Current income tax (benefit) expense$(0.2) $0.7
 $1.8
 $0.8
Deferred income tax (benefit) expense(10.3) 94.8
 68.2
 105.7
Total income tax (benefit) expense$(10.5) $95.5
 $70.0
 $106.5

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



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. The difference between PBF Energy’s effective income tax rate and the United States statutory rate is reconciled below:
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
 2019 2018 2019 2018
Provision at Federal statutory rate21.0 % 21.0 % 21.0 % 21.0 %
Increase (decrease) attributable to flow-through of certain tax adjustments:       
State income taxes (net of federal income tax)2.0 % 5.6 % 5.5 % 5.6 %
Nondeductible/nontaxable items(3.4)% 0.1 % 0.7 % 0.1 %
Rate differential from foreign jurisdictions2.4 % (0.2)% (0.7)% (0.2)%
Other2.6 % (0.5)% (0.3)% (0.5)%
Effective tax rate24.6 % 26.0 % 26.2 % 26.0 %

PBF Energy’s effective income tax rate for the three and six months ended June 30, 2019, including the impact of income attributable to noncontrolling interests of $10.6 million and $22.8 million, respectively, was 32.7% and 24.2%, respectively. PBF Energy’s effective income tax rate for the three and six months ended June 30, 2018, including the impact of income attributable to noncontrolling interests of $15.6 million and $27.0 million, respectively, was 24.9% and 24.4%, respectively.
The reported income tax provision in the PBF LLC Condensed Consolidated Statements of Operations consists of the following:
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(in millions)2019 2018 2019 2018
Current income tax benefit$(0.1) $—
 $(0.1) $—
Deferred income tax expense (benefit)1.9
 (4.0) (5.3) (4.7)
Total income tax expense (benefit)$1.8
 $(4.0) $(5.4) $(4.7)

The Company has determined there are no material uncertain tax positions as of June 30, 2019. The Company does not have any unrecognized tax benefits.

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


14. FAIR VALUE MEASUREMENTS
The tables below present information about the Company'sCompany’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 SeptemberJune 30, 20152019 and December 31, 20142018.
We haveThe 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. We haveThe 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. We haveThe Company has no derivative contracts that are subject to master netting arrangements that are reflected gross on the balance sheet.Condensed Consolidated Balance Sheets.

22
 As of June 30, 2019
 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$11.1
 $—
 $—
 $11.1
 N/A
 $11.1
Commodity contracts22.4
 8.4
 —
 30.8
 (11.8) 19.0
Liabilities:           
Commodity contracts11.2
 0.6
 —
 11.8
 (11.8) —
Catalyst lease obligations—
 45.8
 —
 45.8
 —
 45.8
Derivatives included with inventory intermediation agreement obligations—
 10.9
 —
 10.9
 —
 10.9
 As of December 31, 2018
 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$16.7
 $—
 $—
 $16.7
 N/A
 $16.7
Commodity contracts1.2
 8.9
 —
 10.1
 (2.9) 7.2
Derivatives included with inventory intermediation agreement obligations—
 24.1
 —
 24.1
 —
 24.1
Liabilities:           
Commodity contracts2.7
 0.2
 —
 2.9
 (2.9) —
Catalyst lease obligations—
 44.3
 —
 44.3
 —
 44.3

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


 As of September 30, 2015
 Fair Value Hierarchy Total Gross Fair Value Effect of Counter-party Netting Net Carrying Value on Balance Sheet
 Level 1 Level 2 Level 3  
Assets:           
Money market funds$342,414
 $—
 $—
 $342,414
 N/A
 $342,414
Marketable securities234,249
 —
 —
 234,249
 N/A
 234,249
Non-qualified pension plan assets9,441
 —
 —
 9,441
 N/A
 9,441
Commodity contracts148,907
 10,710
 838
 160,455
 (137,670) 22,785
Derivatives included with intermediation agreement obligations—
 44,684
 —
 44,684
 —
 44,684
Derivatives included with inventory supply arrangement obligations—
 1,031
 —
 1,031
 —
 1,031
Liabilities:           
Commodity contracts134,702
 1,945
 1,023
 137,670
 (137,670) —
Catalyst lease obligations—
 27,577
 —
 27,577
 —
 27,577

 As of December 31, 2014
 Fair Value Hierarchy Total Gross Fair Value Effect of Counter-party Netting Net Carrying Value on Balance Sheet
 Level 1 Level 2 Level 3 
Assets:           
Money market funds$5,575
 $—
 $—
 $5,575
 N/A
 $5,575
Marketable securities234,930
 —
 —
 234,930
 N/A
 234,930
Non-qualified pension plan assets5,494
 —
 —
 5,494
 N/A
 5,494
Commodity contracts415,023
 12,093
 1,715
 428,831
 (397,676) 31,155
Derivatives included with inventory intermediation agreement obligations—
 94,834
 —
 94,834
 —
 94,834
Derivatives included with inventory supply arrangement obligations—
 4,251
 —
 4,251
 —
 4,251
Liabilities:           
Commodity contracts390,144
 7,338
 194
 397,676
 (397,676) —
Catalyst lease obligations—
 36,559
 —
 36,559
 —
 36,559

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

The valuation methods used to measure financial instruments at fair value are as follows:
Money market funds categorized in Level 1 of the fair value hierarchy are measured at fair value based on quoted market prices and included within Cash and cash equivalents.
Marketable securities, consisting primarily of US Treasury securities, categorized in Level 1 of the fair value hierarchy are measured at fair value based on quoted market prices.
Non-qualified pension plan assets categorized in Level 1 of the fair value hierarchy are measured at fair value using a market approach based on published net asset values of mutual funds and included within Deferred charges and other assets, net.
The commodity contracts categorized in Level 1 of the fair value hierarchy are measured at fair value based on quoted prices in an active market. The commodity contracts categorized in Level 2 of the fair value hierarchy are measured at fair value using a market approach based upon future commodity prices for similar instruments quoted in active markets.
The commodity contracts categorized in Level 3 of the fair value hierarchy consist ofcommodity 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 were derived using broker quotes, prices from other third party sources and other available market based data.
The derivatives included with inventory supply arrangement obligations, derivatives included with inventory intermediation agreement obligations and the catalyst lease obligations are categorized in Level 2 of the fair value hierarchy and are measured at fair value using a market approach based upon commodity prices for similar instruments quoted in active markets.


The table below summarizes the changes inNon-qualified pension plan assets are measured at fair value measurements categorized in Level 3using a market approach based on published net asset values of the fair value hierarchy:mutual funds as a practical expedient. As of June 30, 2019 and December 31, 2018, $10.2 million and $9.7 million, respectively, were included within Deferred charges and other assets, net for these non-qualified pension plan assets.
  Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
  2015 2014 2015 2014
Balance at beginning of period $1,905
 $2,689
 $1,521
 $(23,365)
Purchases —
 —
 —
 —
Settlements (1,238) (9,020) (12,549) (5,353)
Unrealized gain included in earnings (852) 19,377
 10,843
 41,764
Transfers into Level 3 —
 —
 —
 —
Transfers out of Level 3 —
 —
 —
 —
Balance at end of period $(185) $13,046
 $(185) $13,046

There were no transfers between levels during the three and ninesix months ended SeptemberJune 30, 2015 and 2014, respectively.2019 or 2018.

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

Fair value of debt
The table below summarizes the fair value and carrying value of debt as of SeptemberJune 30, 20152019 and December 31, 2014.2018.
 September 30, 2015 December 31, 2014
 
Carrying
value
 
Fair
 value
 
Carrying
 value
 
Fair
value
Senior Secured Notes (a)$669,354
 $680,548
 $668,520
 $675,580
PBFX Senior Notes (a)350,000
 328,976
 —
 —
PBFX Term Loan (b)234,200
 234,200
 234,900
 234,900
Rail Facility (b)67,491
 67,491
 37,270
 37,270
PBFX Revolving Credit Facility (b)24,500
 24,500
 275,100
 275,100
Revolving Loan (b)—
 —
 —
 —
Catalyst leases (c)27,577
 27,577
 36,559
 36,559
 1,373,122
 1,363,292
 1,252,349
 1,259,409
Less - Current maturities—
 —
 —
 —
Long-term debt$1,373,122
 $1,363,292
 $1,252,349
 $1,259,409
 June 30, 2019 December 31, 2018
(in millions)
Carrying
value
 
Fair
 value
 
Carrying
 value
 
Fair
value
2025 Senior Notes (a)$725.0
 $759.6
 $725.0
 $688.4
2023 Senior Notes (a)500.0
 519.6
 500.0
 479.4
PBFX 2023 Senior Notes (a)527.5
 542.8
 527.8
 515.3
PBF Rail Term Loan (b)18.1
 18.1
 21.6
 21.6
Catalyst leases (c)45.8
 45.8
 44.3
 44.3
PBFX Revolving Credit Facility (b)251.0
 251.0
 156.0
 156.0
 2,067.4
 2,136.9
 1,974.7
 1,905.0
Less - Current debt (c)(1.3) (1.3) (2.4) (2.4)
Less - Unamortized deferred financing costs(36.7) n/a
 (41.0) n/a
Long-term debt$2,029.4
 $2,135.6
 $1,931.3
 $1,902.6


(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 Senior Secured Notes7.00% senior notes due 2023, the 7.25% senior notes due 2025 (collectively with the senior notes due 2023, the “Senior Notes”), and the PBFX 6.875% senior notes due 2023 (the “PBFX 2023 Senior Notes.Notes”).
(b) The estimated fair value approximates carrying value, categorized as a Level 2 measurement, as these borrowings bear interest based upon short-term floating market interest rates.
(c) Catalyst leases are valued using a market approach based upon commodity prices for similar instruments quoted in active markets and are categorized as a Level 2 measurement. The Company has elected the fair value option for accounting for its catalyst lease repurchase obligations as the Company'sCompany’s liability is directly impacted by the change in fair value of the underlying catalyst. During 2018, Toledo Refining and Chalmette Refining entered into two platinum bridge leases which were settled in April 2019 and were not renewed. During 2018, Delaware City Refining entered into a new platinum bridge lease, which will expire in the third quarter of 2019. This lease

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


is payable at maturity and is not anticipated to be renewed. The total outstanding balance related to these bridge leases as of June 30, 2019 and December 31, 2018 was $1.3 million and $2.4 million, respectively, and is included in Current debt in the Company’s Condensed Consolidated Balance Sheets.
15. DERIVATIVES
The Company uses derivative instruments to mitigate certain exposures to commodity price risk. The Company’s crude supply agreement containsCompany entered into Inventory Intermediation Agreements that contain purchase obligations for certain volumes of crude oil, and other feedstocks. In addition, the Company entered into Inventory Intermediation Agreements commencing in July 2013 that contain purchase obligations for certain volumes of intermediates and refined products. The purchase obligations related to crude oil, feedstocks, intermediates and refined products under these agreements are derivative instruments that have been designated as fair value hedges in order to hedge the commodity price volatility of certain refinery inventory. The fair value of these purchase obligation derivatives is based on market prices of the underlying crude oil, intermediates and refined products. The level of activity for these derivatives is based on the level of operating inventories.

As of SeptemberJune 30, 2015,2019, there were 238,306496,153 barrels of crude oil and feedstocks (662,579(no barrels at December 31, 2014)2018) outstanding under these derivative instruments designated as fair value hedges and no barrels (no barrels at December 31, 2014) outstanding under these derivative instruments not designated as hedges. As of SeptemberJune 30, 2015,2019, there were 3,130,7663,418,263 barrels of intermediates and refined products (3,106,325(3,350,166 barrels at December 31, 2014)2018) outstanding under these derivative instruments designated as fair value hedges and no barrels (no barrels at December 31, 2014) outstanding under these derivative instruments not designated as hedges. These volumes represent the notional value of the contract.


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

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 SeptemberJune 30, 2015,2019, there were 45,651,00012,167,000 barrels of crude oil and 2,277,0006,481,000 barrels of refined products (47,339,000(5,801,000 and 1,970,871,1,609,000, respectively, as of December 31, 2014)2018), outstanding under short and long term commodity derivative contracts not designated as hedges representing the notional value of the contracts.

The following tables provide information about the fair values of these derivative instruments as of SeptemberJune 30, 20152019 and December 31, 20142018 and the line items in the consolidated balance sheetCondensed Consolidated Balance Sheets in which the fair values are reflected.
Description

Balance Sheet Location
Fair Value
Asset/(Liability)
  (in millions)
Derivatives designated as hedging instruments:  
June 30, 2019:  
Derivatives included with the inventory intermediation agreement obligationsAccrued expenses$(10.9)
December 31, 2018:  
Derivatives included with the inventory intermediation agreement obligationsAccrued expenses$24.1
   
Derivatives not designated as hedging instruments:  
June 30, 2019:  
Commodity contractsAccounts receivable$19.0
December 31, 2018:  
Commodity contractsAccounts receivable$7.2

Description

Balance Sheet Location
Fair Value
Asset/(Liability)
Derivatives designated as hedging instruments:  
September 30, 2015:  
Derivatives included with inventory supply arrangement obligationsAccrued expenses$1,031
Derivatives included with the intermediation agreement obligationsAccrued expenses$44,684
December 31, 2014  
Derivatives included with inventory supply arrangement obligationsAccrued expenses$4,251
Derivatives included with the intermediation agreement obligationsAccrued expenses$94,834
   
Derivatives not designated as hedging instruments:  
September 30, 2015:  
Commodity contractsAccounts receivable$22,785
December 31, 2014  
Commodity contractsAccounts receivable$31,155

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


The following tables providetable provides information about the gaingains or losslosses recognized in income on these derivative instruments and the line items in the consolidated financial statementsCondensed 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
Derivatives designated as hedging instruments:  
For the three months ended September 30, 2015:  
Derivatives included with inventory supply arrangement obligationsCost of sales$1,409
Derivatives included with the intermediation agreement obligationsCost of sales$34,424
For the three months ended September 30, 2014:  
Derivatives included with inventory supply arrangement obligationsCost of sales$2,729
Derivatives included with the intermediation agreement obligationsCost of sales$20,900
For the nine months ended September 30, 2015:  
Derivatives included with inventory supply arrangement obligationsCost of sales$(3,220)
Derivatives included with the intermediation agreement obligationsCost of sales$(50,150)
For the nine months ended September 30, 2014:  
Derivatives included with inventory supply arrangement obligationsCost of sales$1,660
Derivatives included with the intermediation agreement obligationsCost of sales$29,942
   
Derivatives not designated as hedging instruments:  
For the three months ended September 30, 2015:  
Commodity contractsCost of sales$31,017
For the three months ended September 30, 2014:  
Commodity contractsCost of sales$70,624
For the nine months ended September 30, 2015:  
Commodity contractsCost of sales$(14,080)
For the nine months ended September 30, 2014:  
Commodity contractsCost of sales$101,902
   
Hedged items designated in fair value hedges:  
For the three months ended September 30, 2015:  
Crude oil and feedstock inventoryCost of sales$(1,409)
Intermediate and refined product inventoryCost of sales$(34,424)
For the three months ended September 30, 2014:  
Crude oil and feedstock inventoryCost of sales$(2,729)
Intermediate and refined product inventoryCost of sales$(20,900)
For the nine months ended September 30, 2015:  
Crude oil and feedstock inventoryCost of sales$3,220
Intermediate and refined product inventoryCost of sales$50,150
For the nine months ended September 30, 2014:  
Crude oil and feedstock inventoryCost of sales$(1,660)
Intermediate and refined product inventoryCost of sales$(29,942)
Description
Location of Gain or (Loss) Recognized in
 Income on Derivatives
Gain or (Loss)
Recognized in
Income on Derivatives
  (in millions)
Derivatives designated as hedging instruments:  
For the three months ended June 30, 2019:  
Derivatives included with the inventory intermediation agreement obligationsCost of products and other$(20.8)
For the three months ended June 30, 2018:  
Derivatives included with the inventory intermediation agreement obligationsCost of products and other$6.3
For the six months ended June 30, 2019:  
Derivatives included with the inventory intermediation agreement obligationsCost of products and other$(35.0)
For the six months ended June 30, 2018:  
Derivatives included with the inventory intermediation agreement obligationsCost of products and other$(2.5)
   
Derivatives not designated as hedging instruments:  
For the three months ended June 30, 2019:  
Commodity contractsCost of products and other$1.0
For the three months ended June 30, 2018:  
Commodity contractsCost of products and other$(33.1)
For the six months ended June 30, 2019:  
Commodity contractsCost of products and other$32.7
For the six months ended June 30, 2018:  
Commodity contractsCost of products and other$(46.4)
   
Hedged items designated in fair value hedges:  
For the three months ended June 30, 2019:  
Crude oil, intermediate and refined product inventoryCost of products and other$20.8
For the three months ended June 30, 2018:  
Intermediate and refined product inventoryCost of products and other$(6.3)
For the six months ended June 30, 2019:  
Crude oil, intermediate and refined product inventoryCost of products and other$35.0
For the six months ended June 30, 2018:  
Intermediate and refined product inventoryCost of products and other$2.5



The Company had no ineffectiveness related to the Company's fair value hedges for the three and ninesix months ended SeptemberJune 30, 2015 and 2014.2019 or 2018.



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


16. SEGMENT INFORMATION

The Company'sCompany’s operations are organized into two reportable segments, Refining and Logistics. Operations that are not included in the Refining and Logistics segments are included in Corporate. Intersegment transactions are eliminated in the consolidated financial statementsCondensed Consolidated Financial Statements and are included in Eliminations.

Refining
Refining
As of September 30, 2015, the Company 'sThe Company’s Refining Segmentsegment includes the operations of its threefive refineries, whichincluding certain related logistics assets that are not owned by PBFX. The Company’s refineries are located in Toledo, Ohio, Delaware City, Delaware, and Paulsboro, New Jersey.Jersey, Toledo, Ohio, New Orleans, Louisiana and Torrance, 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 MidwestWest Coast of the United States, as well as in other regions of the United States and Canada, and is able to ship products to other international destinations. As of September 30, 2015, the refineries have a combined processing capacity, known as throughput, of approximately 540,000 barrels per day ("bpd"), and a weighted-average Nelson Complexity Index of 11.3.

Logistics
The Company formedCompany’s Logistics segment is comprised of PBFX, a publicly traded master limited partnership,publicly-traded MLP, formed to own or lease, operate, develop and acquire crude oil and refined petroleum products terminals, pipelines, storage facilities and similar logistics assets. PBFX'sPBFX’s assets primarily consist of (i) a rail terminal which has a double loop track and ancillary pumpingtruck terminals and unloading equipmentracks, tank farms and pipelines that were acquired from or contributed by PBF LLC and are located at, or nearby, the Delaware City refinery with an unloading capacity of approximately 130,000 bpd; (ii) a truck terminal comprised of six lease automatic custody transfer units accepting crude oil deliveries by truck located at the Toledo refinery designed for total throughput capacity of up to approximately 22,500 bpd; (iii) a heavy crude rail unloading rack located at the Delaware City refinery with an unloading capacity of at least 40,000 bpd; (iv) a tank farm with aggregate storage capacity of approximately 3.9 million barrels, including a propane storage and loading facility with throughput capacity of 11,000 bpd at the Toledo Refinery; (v) a 23.4 mile 16-inch interstate petroleum products pipeline with capacity in excess of 125,000 bpd at the Delaware City refinery and; (vi) a 15-lane, 76,000 bpd capacity truck loading rack utilized to distribute gasoline, distillates and liquefied petroleum gas at the Delaware City refinery.Company’s refineries. PBFX provides various rail, truck and truckmarine terminaling services, pipeline transportation services and storage services to PBF Holding and/or its subsidiaries and third-party customers through long-termfee-based commercial agreements. PBFX currently does not generate third partysignificant third-party revenue and as such intersegment related-party revenues are eliminated in consolidation. PriorFrom a PBF Energy and PBF LLC perspective, the Company’s chief operating decision maker evaluates the Logistics segment as a whole without regard to the PBFX Offering, PBFX's assets were operated within the refining operationsany of the Company's Delaware City and Toledo refineries. The assets did not generate third party revenue and were not considered to be a separate reportable segment.

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'ssegment’s revenues include inter-segmentintersegment transactions with the Company'sCompany’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'sCompany’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 certain items of othernon-operating income and expense items, including income taxes, to the individual segments. The Refinery segment’s operating subsidiaries and PBFX are primarily pass-through entities with respect to income taxes.

Disclosures regarding our reportable segments with reconciliations to consolidated totals for the three and nine months ended September 30, 2015 and September 30, 2014 are presented below. The Logistics segment's results include financial information of the predecessor of PBFX for periods prior to May 13, 2014, and the financial information of PBFX for the period beginning May 14, 2014, the completion date of the PBFX Offering. In connection with the contribution by PBF LLC of the DCR West Rack, the Toledo Storage Facility and the Delaware City Products Pipeline and Truck Rack, the accompanying segment information has been retrospectively adjusted to include the historical results of the DCR West Rack, Toledo Storage Facility and the Delaware City Products Pipeline and Truck Rack in the Logistics Segment for all periods presented prior to such contributions.

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


Prior to the PBFX Offering, the Company did not operate the PBFX assets independent of the Refining segment. Total assets of each segment consist of net property, plant and equipment, inventories, cash and cash equivalents, accounts receivables and other assets directly associated with the segment’s operations. Corporate assets consist primarily of deferred tax assets, property, plant and equipment and other assets not directly related to ourthe Company’s refinery and logisticlogistics operations.
Disclosures regarding the Company’s reportable segments with reconciliations to consolidated totals for the three and six months ended June 30, 2019 and June 30, 2018 are presented below. In connection with certain contributions by PBF LLC to PBFX in 2018, the accompanying segment information has been retrospectively adjusted to include the historical results of those assets in the Logistics segment for all periods presented prior to such contributions.

Three Months Ended September 30, 2015

Refining
Logistics
Corporate Eliminations
Consolidated Total
Revenues$3,217,640

$37,082

$—
 $(37,082)
$3,217,640
Depreciation and amortization expense44,366

1,649

2,118
 —

48,133
Income (loss) from operations114,925
 27,463
 (49,851) —
 92,537
Interest expense, net4,110
 7,180
 18,070
 —
 29,360
Capital expenditures81,969
 962
 573
 —
 83,504


 Three Months Ended September 30, 2014
 Refining Logistics Corporate Eliminations Consolidated Total
Revenues$5,260,003
 $17,060
 $—
 $(17,060) $5,260,003
Depreciation and amortization expense63,532
 1,177
 3,301
 —
 68,010
Income (loss) from operations316,244
 5,942
 (41,051) —
 281,135
Interest expense, net5,314
 827
 18,714
 —
 24,855
Capital expenditures110,340
 14,874
 32,642
 —
 157,856
 Nine Months Ended September 30, 2015
 Refining Logistics Corporate Eliminations Consolidated Total
Revenues$9,763,440
 $104,796
 $—
 $(104,796) $9,763,440
Depreciation and amortization expense131,817
 4,919
 7,665
 —
 144,401
Income (loss) from operations591,005
 71,914
 (123,530) —
 539,389
Interest expense, net13,387
 14,065
 52,731
 —
 80,183
Capital expenditures332,544
 1,182
 2,183
 —
 335,909
 Nine Months Ended September 30, 2014
 Refining Logistics Corporate  Eliminations Consolidated Total
Revenues$15,308,155
 $29,409
 $—
 $(29,409) $15,308,155
Depreciation and amortization expense122,858
 2,906
 10,123
 —
 135,887
Income (loss) from operations741,483
 4,491
 (116,785) —
 629,189
Interest expense, net20,404
 1,183
 55,141
 —
 76,728
 Capital expenditures250,701
 40,993
 39,050
 —
 330,744
 Balance at September 30, 2015
 Refining Logistics Corporate  Eliminations Consolidated Total
Total assets$4,062,727
 $432,663
 $74,486
 $(24,272) $4,545,604
 Balance at December 31, 2014
 Refining Logistics Corporate  Eliminations Consolidated Total
Total assets$4,135,494
 $410,141
 $24,195
 $(11,630) $4,558,200


29
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT UNIT,


 Three Months Ended June 30, 2019
PBF Energy - (in millions)
Refining Logistics Corporate Eliminations Consolidated Total
Revenues$6,551.9
 $82.8
 $—
 $(74.7) $6,560.0
Depreciation and amortization expense95.3
 8.9
 2.9
 —
 107.1
Income (loss) from operations (1) (2)23.7
 37.8
 (48.8) (3.2) 9.5
Interest expense, net0.9
 12.5
 28.7
 —
 42.1
Capital expenditures235.9
 4.0
 1.4
 —
 241.3

 Three Months Ended June 30, 2018
 Refining Logistics Corporate Eliminations Consolidated Total
Revenues$7,439.6
 $68.1
 $—
 $(63.6) $7,444.1
Depreciation and amortization expense82.6
 7.1
 2.6
 —
 92.3
Income (loss) from operations (2)447.6
 33.8
 (54.7) (4.4) 422.3
Interest expense, net2.5
 10.5
 30.4
 —
 43.4
Capital expenditures (3)208.7
 61.7
 1.5
 —
 271.9

 Six Months Ended June 30, 2019
 Refining Logistics Corporate Eliminations Consolidated Total
Revenues$11,760.6
 $161.6
 $—
 $(146.0) $11,776.2
Depreciation and amortization expense189.6
 17.6
 5.7
 —
 212.9
Income (loss) from operations (1) (2)413.2
 72.0
 (103.2) (7.9) 374.1
Interest expense, net1.4
 24.6
 55.6
 —
 81.6
Capital expenditures483.0
 15.2
 3.7
 —
 501.9

 Six Months Ended June 30, 2018
 Refining Logistics Corporate  Eliminations Consolidated Total
Revenues$13,238.7
 $132.8
 $—
 $(124.6) $13,246.9
Depreciation and amortization expense159.3
 13.7
 5.3
 —
 178.3
Income (loss) from operations (2)574.6
 67.7
 (115.9) (8.4) 518.0
Interest expense, net4.4
 20.4
 61.8
 —
 86.6
Capital expenditures (3)297.0
 65.7
 2.5
 —
 365.2

 Balance at June 30, 2019
 Refining Logistics Corporate  Eliminations Consolidated Total
Total assets (1)$7,834.5
 $959.6
 $62.9
 $(47.3) $8,809.7

 Balance at December 31, 2018
 Refining Logistics Corporate  Eliminations Consolidated Total
Total assets (4)$6,988.0
 $956.4
 $98.1
 $(37.1) $8,005.4




PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



 Three Months Ended June 30, 2019
PBF LLC - (in millions)
Refining Logistics Corporate Eliminations Consolidated Total
Revenues$6,551.9
 $82.8
 $—
 $(74.7) $6,560.0
Depreciation and amortization expense95.3
 8.9
 2.9
 —
 107.1
Income (loss) from operations (1) (2)23.7
 37.8
 (48.4) (3.2) 9.9
Interest expense, net0.9
 12.5
 31.1
 —
 44.5
Capital expenditures235.9
 4.0
 1.4
 —
 241.3

 Three Months Ended June 30, 2018
 Refining Logistics Corporate Eliminations Consolidated Total
Revenues$7,439.6
 $68.1
 $—
 $(63.6) $7,444.1
Depreciation and amortization expense82.6
 7.1
 2.6
 —
 92.3
Income (loss) from operations (2)447.6
 33.8
 (54.2) (4.4) 422.8
Interest expense, net2.5
 10.5
 32.4
 —
 45.4
Capital expenditures (3)208.7
 61.7
 1.5
 —
 271.9

 Six Months Ended June 30, 2019
 Refining Logistics Corporate Eliminations Consolidated Total
Revenues$11,760.6
 $161.6
 $—
 $(146.0) $11,776.2
Depreciation and amortization expense189.6
 17.6
 5.7
 —
 212.9
Income (loss) from operations (1) (2)413.2
 72.0
 (102.5) (7.9) 374.8
Interest expense, net1.4
 24.6
 60.0
 —
 86.0
Capital expenditures483.0
 15.2
 3.7
 —
 501.9

 Six Months Ended June 30, 2018
 Refining Logistics Corporate  Eliminations Consolidated Total
Revenues$13,238.7
 $132.8
 $—
 $(124.6) $13,246.9
Depreciation and amortization expense159.3
 13.7
 5.3
 —
 178.3
Income (loss) from operations (2)574.6
 67.7
 (115.2) (8.4) 518.7
Interest expense, net4.4
 20.4
 65.8
 —
 90.6
Capital expenditures (3)297.0
 65.7
 2.5
 —
 365.2

 Balance at June 30, 2019
 Refining Logistics Corporate  Eliminations Consolidated Total
Total assets (1)$7,834.5
 $959.6
 $60.4
 $(47.3) $8,807.2

 Balance at December 31, 2018
 Refining Logistics Corporate  Eliminations Consolidated Total
Total assets (4)$6,988.0
 $956.4
 $45.8
 $(37.1) $7,953.1

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(1)On April 24, 2019, PBFX entered into the TVPC Contribution Agreement, pursuant to which PBF LLC contributed to PBFX all of the issued and outstanding limited liability company interests of TVP Holding. Prior to the TVPC Acquisition, TVP Holding owned a 50% membership interest in TVPC. Subsequent to the closing of the TVPC Acquisition on May 31, 2019, PBFX owns 100% of the membership interests in TVPC.
(2)Prior to the TVPC Contribution Agreement, the Logistics segment included 100% of the income from operations of TVPC, as TVPC was consolidated by PBFX. PBFX recorded net income attributable to noncontrolling interest for the 50% equity interest in TVPC held by PBF Holding. PBF Holding (included in the Refining segment) recorded equity income in investee related to its 50% noncontrolling ownership interest in TVPC. For purposes of the Company’s Condensed Consolidated Financial Statements, PBF Holding’s equity income in investee and PBFX’s net income attributable to noncontrolling interest eliminated in consolidation.
(3)The Logistics segment includes capital expenditures of $58.0 million for the acquisition of the Knoxville Terminals by PBFX on April 16, 2018.
(4)Prior to the TVPC Contribution Agreement, the Logistics segment included 100% of the assets of TVPC, as TVPC was consolidated by PBFX. PBFX recorded noncontrolling interest for the 50% equity interest in TVPC held by PBF Holding. PBF Holding (included in the Refining segment) recorded an equity investment in TVPC reflecting its noncontrolling ownership interest. For purposes of the Company’s Condensed Consolidated Financial Statements, PBFX’s noncontrolling interest in TVPC and PBF Holding’s equity investment in TVPC eliminated in consolidation.

PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


17. NET INCOME PER UNITSHARE 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 (loss) 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:2019 2018 2019 2018
Allocation of earnings:       
Net income (loss) attributable to PBF Energy Inc. stockholders$(32.2) $272.1
 $197.0
 $302.5
Less: Income allocated to participating securities0.1
 0.2
 0.2
 0.4
Income (loss) available to PBF Energy Inc. stockholders - basic$(32.3) $271.9
 $196.8
 $302.1
Denominator for basic net income (loss) per Class A common share - weighted average shares119,181,845
 112,875,813
 119,885,386
 111,853,774
Basic net income (loss) attributable to PBF Energy per Class A common share$(0.27) $2.41
 $1.64
 $2.70
        
Diluted Earnings Per Share:       
Numerator:       
Income (loss) available to PBF Energy Inc. stockholders - basic$(32.3) $271.9
 $196.8
 $302.1
Plus: Net income attributable to noncontrolling interest (1)
—
 6.1
 2.7
 7.4
Less: Income tax expense on net income attributable to noncontrolling interest (1)
—
 (1.5) (0.7) (1.9)
Numerator for diluted net income (loss) per PBF Energy Class A common share - net income (loss) attributable to PBF Energy Inc. stockholders (1)
$(32.3) $276.5
 $198.8
 $307.6
        
Denominator:(1)
       
Denominator for basic net income (loss) per PBF Energy Class A common share-weighted average shares119,181,845
 112,875,813
 119,885,386
 111,853,774
Effect of dilutive securities:(2)
       
Conversion of PBF LLC Series A Units—
 1,838,196
 1,206,325
 2,681,980
Common stock equivalents—
 1,695,264
 928,733
 1,214,173
Denominator for diluted net income (loss) per PBF Energy Class A common share-adjusted weighted average shares119,181,845
 116,409,273
 122,020,444
 115,749,927
Diluted net income (loss) attributable to PBF Energy Inc. stockholders per PBF Energy Class A common share$(0.27) $2.37
 $1.63
 $2.66
        

PBF ENERGY INC. AND BARREL DATA)PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


17.
(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 (loss) attributable to PBF Energy, used in the numerator of the diluted earnings per share calculation is adjusted to reflect the net income (loss), as well as the corresponding income tax benefit (expense) (based on a 26.5% estimated annualized statutory corporate tax rate for the three and six months ended June 30, 2019 and a 26.4% estimated annualized statutory corporate tax rate for the three and six months ended June 30, 2018) attributable to the converted units. During the three months ended June 30, 2019, the potential conversion of 1,206,325 PBF LLC Series A Units into PBF Energy Class A common stock were excluded from the denominator in computing diluted net income (loss) per share because including them would have had an anti-dilutive effect. As the potential conversion of the PBF LLC Series A Units and common stock equivalents were not included, the numerator used in the calculation of diluted net income (loss) per share was equal to the numerator used in the calculation of basic net income (loss) per share and does not include the net income (loss) and income tax attributable to the net income (loss) associated with the potential conversion of the PBF LLC Series A Units and common stock equivalents.

(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 options, warrants and performance share units to purchase 6,833,973 and 6,012,867 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, 2019, respectively. Common stock equivalents exclude the effects of options and warrants to purchase 12,500 and 233,250 shares of PBF Energy Class A common stock and PBF LLC Series A units because they were anti-dilutive for the three and six months ended June 30, 2018, respectively. For periods showing a net loss, all common stock equivalents and unvested restricted stock are considered anti-dilutive.


18. SUBSEQUENT EVENTS
Cash DistributionDividend Declared
On October 29, 2015,August 1, 2019, PBF Energy's Board of Directors declaredEnergy announced a dividend of $0.30 per share on outstanding PBF Energy Class A common stock. The dividend was paidis payable on November 24, 2015August 30, 2019 to PBF Energy Class A common stockholders of record at the close of business on November 9, 2015. PBF LLC made an aggregate non-tax quarterly distribution of $30,818 or $0.30 per unit, pro rata, to its members, of which $29,297 was distributed to PBF Energy and the balance was distributed to its other members.

August 15, 2019.
PBFX Distributions
On October 29, 2015,August 1, 2019, the Board of Directors of PBF GP declaredannounced a distribution of $0.39$0.515 per unit on outstanding common and subordinated units of PBFX. The distribution of $13,751 was paidis payable on NovemberAugust 30, 20152019 to PBFX unit holdersunitholders of record at the close of business on November 13, 2015.August 15, 2019.


Chalmette Acquisition
On November 1, 2015, the Company acquired from ExxonMobil Oil Corporation, Mobil Pipe Line Company and PDV Chalmette, L.L.C. (collectively, the "Chalmette Sellers"), the ownership interests of Chalmette Refining, L.L.C. (“Chalmette Refining”), which owns the Chalmette refinery and related logistics assets (collectively, the "Chalmette Acquisition"). The Chalmette refinery, located outside of New Orleans, Louisiana, is a dual-train coking refinery and is capable of processing both light and heavy crude oil.
Chalmette Refining owns 100% of the MOEM Pipeline, providing access to the Empire Terminal, as well as the CAM Connection Pipeline, providing access to the Louisiana Offshore Oil Port facility through a third party pipeline. Chalmette Refining also owns 80% of each of the Collins Pipeline Company and T&M Terminal Company, both located in Collins, Mississippi, which provide a clean products outlet for the refinery to the Plantation and Colonial Pipelines. Also included in the acquisition are a marine terminal capable of importing waterborne feedstocks and loading or unloading finished products; a clean products truck rack which provides access to local markets; and a crude and product storage facility.
The aggregate purchase price for the Chalmette Acquisition was $322,000 in cash, plus estimated inventory and working capital of $233,083, which is subject to final valuation within ninety days of closing. The transaction was financed through a combination of cash on hand and borrowings under the Company’s existing revolving credit line. A determination of the acquisition-date fair values of the assets acquired and the liabilities assumed and the working capital at closing calculation is pending the completion of an independent appraisal and other evaluations.
The Chalmette Acquisition provides the Company with a broader more diversified asset base and increases the number of operating refineries from three to four and the Company's combined crude oil throughput capacity. The acquisition also provides the Company with a presence in the attractive Petroleum Administration for Defense Districts ("PADD") 3 market.

October 2015 Equity Offering
On October 13, 2015, the PBF Energy completed a public offering of an aggregate of 11,500,000 shares of Class A common stock, including 1,500,000 shares of Class A common stock that was sold pursuant to the exercise of an over-allotment option, for net proceeds of $344,000, after deducting underwriting discounts and commissions and other offering expenses (the "October 2015 Equity Offering"). In conjunction with the October 2015 Equity Offering, PBF Energy purchased an aggregate of 11,500,000 PBF LLC Series C Units.

Immediately following the October 2015 Equity Offering, PBF Energy owned 97,393,850 PBF LLC Series C Units and PBF Energy's executive officers and directors and certain employees beneficially owned 5,111,358 PBF LLC Series A Units, and the holders of PBF Energy's issued and outstanding shares of Class A common stock had 95.0% of the voting power in PBF Energy and the members of PBF LLC, other than PBF Energy, through their holdings of Class B common stock had the remaining 5.0% of the voting power in PBF Energy.


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

7.0% Senior Secured Notes due 2023
On November 24, 2015, PBF Holding completed the offering of $500,000 aggregate principal amount of 7.0% Senior Secured Notes due 2023. The net proceeds of approximately $490,000, after deducting the initial purchasers’ discount and estimated offering expenses, are intended to be used for general corporate purposes, including to fund a portion of the purchase price for the pending acquisition of the Torrance refinery and related assets.

Revolving Loan
In November 2015, PBF Holding increased the maximum availability under the Revolving Loan to $2,600,000 in accordance with its accordion feature.


31

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 unauditedaudited financial statements of PBF Energy Inc. and PBF LLC included in the notes thereto included elsewhere in this report. The following information and such unaudited condensed consolidated financial statements should also be read in conjunction withAnnual Report on Form 10-K for the audited consolidated financial statements and related notes, together with our discussion and analysis of financial condition and results of operations, in our prospectus dated October 30, 2015, as filed with the SEC on October 30, 2015 (the “Prospectus”).year ended December 31, 2018. 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.”
Unless the context otherwise requires, references to “PBF LLC,” “we,” “us,” “our” or the “Company” refer to PBF Energy Company LLC and its consolidated subsidiaries, including PBF Holding and PBFX. Unless the context otherwise requires, references to “PBF Energy” refer to PBF Energy Inc., PBF LLC's parent, and its consolidated subsidiaries.
PBF Energy is the sole managing member of, and owner of an equity interest representing approximately 99.0% of the outstanding economic interests in PBF LLC and operates and controls allas of the business and affairs of PBF LLC.June 30, 2019. PBF LLC is a holding company for the companies that directly orand indirectly own and operate PBF Energy’sour business. PBF Holding Company LLC (“PBF Holding”) is a wholly-owned subsidiary of PBF LLC and PBF Finance Corporation (“PBF Finance”) is the parent company for our refining operations.a wholly-owned subsidiary of PBF Holding. As of June 30, 2019, PBF LLC consolidatesalso holds a 48.2% limited partner interest and a non-economic general partner interest in PBF Logistics LP (“PBFX” or the financial results of“Partnership”), a publicly-traded master limited partnership (“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 records a noncontrolling interest for the economic interestsits subsidiaries. Discussions on areas that either apply only to PBF Energy or PBF LLC are clearly noted in PBFX held by the public common unit holders of PBFX.such sections.



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 MidwestWest Coast of the United States, as well as in other regions of the United States, Canada and Canada,Mexico and are able to ship products to other international destinations. We were formed in 2008 to pursue acquisitions of crude oil refineries and downstream assets in North America. As of SeptemberJune 30, 20152019, we ownedown and operated threeoperate five domestic oil refineries and related assets which we acquired in 2010 and 2011. Our refineries havewith a combined processing capacity, known as throughput, of approximately 540,000900,000 barrels per day ("bpd"(“bpd”), and a weighted-average Nelson Complexity Index of 11.3. On November 1, 2015 we closed on our acquisition12.2. We operate in two reportable business segments: Refining and Logistics. Our five oil refineries are all engaged in the refining of crude oil and other feedstocks into petroleum products, and are aggregated into the ownership interests of Chalmette Refining L.L.C. ("Chalmette Refining"). See Business Developments for additional information.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.
As of September 30, 2015, our threeOur five refineries are located in Toledo, Ohio, Delaware City, Delaware, and Paulsboro, New Jersey. Our Mid-ContinentJersey, Toledo, Ohio, New Orleans, Louisiana and Torrance, California. Each refinery at Toledo processes light, sweetis briefly described in the table below:
RefineryRegionNelson Complexity IndexThroughput Capacity (in barrels per day)PADD
Crude Processed (1)
Source (1)
Delaware CityEast Coast11.3190,0001light sweet through heavy sourwater, rail
PaulsboroEast Coast13.2180,0001light sweet through heavy sourwater
ToledoMid-Continent9.2170,0002light sweetpipeline, truck, rail
ChalmetteGulf Coast12.7189,0003light sweet through heavy sourwater, pipeline
TorranceWest Coast14.9155,0005medium and heavypipeline, water, truck
________
(1) Reflects the typical crude has a throughput capacity of 170,000 bpd and a Nelson Complexity Index of 9.2. The majority of Toledo’s West Texas Intermediate ("WTI") based crude is delivered via pipelines that originate in both Canadafeedstocks and the United States. Since our acquisition of Toledo in 2011, we have added additional truckrelated sources utilized under normal operating conditions and rail crude unloading capabilities that provide feedstock sourcing flexibility for the refinery and enables Toledo to run a more cost-advantaged crude slate. Our East Coast refineries at Delaware City and Paulsboro have a combined refining capacity of 370,000 bpd and Nelson Complexity Indices of 11.3 and 13.2, respectively. These high-conversion refineries process primarily medium and heavy, sour crudes and have historically received the bulk of their feedstock via ships and barges on the Delaware River.
Since our acquisition of the Delaware City refinery, we expanded and upgraded the existing on-site railroad infrastructure, including the expansion of the crude rail unloading facilities. Currently, crude delivered by rail to this facility is consumed at our Delaware City refinery. We also transport some of the crude delivered by rail from Delaware City via barge to our Paulsboro refinery or other third party destinations. In 2014 we completed a project to expand the Delaware City heavy crude rail unloading terminal capability at the refinery from 40,000 bpd to 80,000 bpd and added additional unloading spots to the dual-loop track light crude rail unloading facility, which has increased its unloading capability from 105,000 bpd to 130,000 bpd. These projects bring total rail crude

32

unloading capability up to 210,000 bpd, subject to the delivery of coiled and insulated railcars, the development of crude rail loading infrastructure in Canada and the use of unit trains. The Delaware City rail unloading facilities, including the facilities now owned by PBFX, allows our East Coast refineries to source WTI price-based crude oils from Western Canada and the Mid-Continent, which we believe at times may provide cost advantages versus traditional Brent based international crudes.prevailing market environments.
As of SeptemberJune 30, 2015,2019, PBF Energy owned 85,893,850119,915,672 PBF LLC Series C Units and our current and former executive officers and directors and certain employees and others held 5,111,3581,206,325 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 PBF Energy'sour issued and outstanding shares of our PBF Energy Class A common stock have approximately 94.4%99.0% 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 5.6%1.0% of the voting power in us. See "Business Developments - October 2015 Equity Offering."us (99.0% and 1.0% as of December 31, 2018, respectively).


Business Developments
Recent significant business developments affecting the Companyus are discussed below.

ChalmettePending Martinez Acquisition
On November 1, 2015, the Company acquired from ExxonMobil Oil Corporation, Mobil Pipe Line Company and PDV Chalmette, L.L.C.June 11, 2019 (the “Execution Date”), the ownership interests of Chalmette Refining, which owns the Chalmette refinery and related logistics assets (collectively, the "Chalmette Acquisition"). The Chalmette refinery, located outside of New Orleans, Louisiana, is a 189,000 barrel per day, dual-train coking refinery with a Nelson Complexity of 12.7 and is capable of processing both light and heavy crude oil.
Chalmette Refining owns 100% of the MOEM Pipeline, providing access to the Empire Terminal, as well as the CAM Connection Pipeline, providing access to the Louisiana Offshore Oil Port facility through a third party pipeline. Chalmette Refining also owns 80% of each of the Collins Pipeline Company and T&M Terminal Company, both located in Collins, Mississippi, which provide a clean products outlet for the refinery to the Plantation and Colonial Pipelines. Also included in the acquisition are a marine terminal capable of importing waterborne feedstocks and loading or unloading finished products; a clean products truck rack which provides access to local markets; and a crude and product storage facility with approximately 7.5 million barrels of shell capacity.
The aggregate purchase price for the Chalmette Acquisition was $322.0 million in cash, plus inventory and working capital of $233.1 million, which is subject to final valuation within ninety days of closing. The transaction was financed through a combination of cash on hand and borrowings under the Company’s existing revolving credit line. A determination of the acquisition-date fair values of the assets acquired and the liabilities assumed and the working capital at closing calculation is pending the completion of an independent appraisal and other evaluations.
The Chalmette Acquisition provides the Company with a broader more diversified asset base and increases the number of operating refineries from three to four and the Company's combined crude oil throughput capacity from 540,000 bpd to approximately 730,000 bpd. The acquisition also provides the Company with a presence in the attractive Petroleum Administration for Defense Districts ("PADD") 3 market.

Pending Torrance Acquisition
On September 29, 2015, PBF Holding entered into a definitive Sale and Purchase Agreement (the “Torrance Sale“Sale and Purchase Agreement”) with ExxonMobilEquilon Enterprises LLC d/b/a Shell Oil Corporation and its subsidiary, Mobil Pacific Pipeline Company (together, the "Torrance Sellers"Products US (the "Seller"), to purchase the TorranceMartinez refinery and related logistics assets (collectively, the "Torrance Acquisition"“Martinez Acquisition”). The Torranceobligations of PBF Holding under the Sale and Purchase Agreement have been guaranteed by the Company. The Martinez refinery is located on 750 acresan 860-acre site in Torrance, California,the City of Martinez, 30 miles northeast of San Francisco, California. The refinery is a high-conversion 155,000 barrel per day, delayed-coking refinery157,000 bpd, dual-coking facility with a Nelson Complexity Index of 14.9.16.1, making it one of the most complex refineries in the United States. The facility is strategically positioned in SouthernNorthern California with advantaged logistics connectivity that offers flexible raw material sourcing and product distribution opportunities primarily in the California, Las Vegasprovides for operating and Phoenix area

33

markets. Including the estimated contribution of the Chalmette refinery,commercial synergies with the Torrance refinery located in Southern California. The Martinez Acquisition willis expected to further increase the Company'sour total throughput capacity to approximately 900,000over 1,000,000 bpd.
In addition to refining assets, the TorranceMartinez Acquisition includes a number of high-quality onsite logistics assets including a sophisticated network of crude and products pipelines,deep-water marine facility, product distribution terminals and refinery crude and product storage facilities. The most significant of the logistics assets is a 171-mile crude gathering and transportation system which delivers San Joaquin Valley crude oil directly from the field to the refinery. Additionally, included in the transaction are several pipelines which provide access to sources of crude oil including the Ports of Long Beach and Los Angeles, as well as clean product outlets with a direct pipeline supplying jet fuel to the Los Angeles airport. The Torrance refinery also has crude and product storage facilities with approximately 8.68.8 million barrels of shell capacity.
The purchase price for the TorranceMartinez Acquisition is $537.5will range from $900.0 million to $1.0 billion in cash, based on the date the transaction closes, plus inventory and working capital to be valued at closing. In addition, PBF Holding also has an obligation to make certain post-closing payments to the Seller if certain conditions are met including earn-out payments based on certain earnings thresholds of the Martinez refinery (as set forth in the Sale and Purchase Agreement), for a period of up to four years following the closing. The purchase price is also subject to other customary purchase price adjustments. The TorranceMartinez Acquisition is expected to close in the secondfourth quarter of 2016,2019, subject to satisfaction of customary closing conditions.conditions, including the absence of legal impediments prohibiting the Martinez Acquisition, receipt of regulatory approvals and required consents and absence of a material adverse effect. Additionally, as a condition of closing, the Torrance refinery is toassets must be restored to full working order with respect tooperational in all material respects and in substantially the event that occurred on February 18, 2015 resulting in damage tosame condition and repair, ordinary wear and tear excepted, as of the electrostatic precipitator and related systems, and shall have operated as required under the Torrance Sale and Purchase Agreement for a period of at least fifteen days after such restoration. Execution Date.
We expect to finance the transaction with a combination of cash on hand debt, including the proceeds from the issuance of the 7.0% Senior Secured Notes due 2023, and proceeds contributed to us in connection with PBF Energy's equity offering completed on October 13, 2015. In addition, PBF Energy has guaranteed all payment and performance obligations of PBF Holding that relate to or arise out of the Sale and Purchase Agreement related to the Torrance Acquisition.debt. Following the expected completion of the TorranceMartinez Acquisition, our weighted average Nelson Complexity Index will increase to 12.2.12.8.

October 2015 Equity Offering
On October 13, 2015, PBF Energy completed a public offering of an aggregate of 11,500,000 shares of Class A common stock, including 1,500,000 shares of Class A common stock that was sold pursuant to the exercise of an over-allotment option, for net proceeds of $344.0 million, after deducting underwriting discounts and commissions and other offering expenses (the “October 2015 Equity Offering”). In conjunction with the October 2015 Equity Offering, PBF Energy purchased an aggregate of 11,500,000 PBF LLC Series C Units. We intend to use the proceeds to fund a portion of the purchase price for the Torrance Acquisition. However, subject to the timing of the closing of the Torrance Acquisition, we may use the net proceeds of the October 2015 Equity Offering to pay down indebtedness incurred to fund the Chalmette Acquisition (or for capital in lieu of indebtedness we might otherwise borrow).
As a result of the October 2015 Equity Offering, PBF Energy now owns 97,393,850 PBF LLC Series C Units and PBF Energy’s executive officers and directors and certain employees beneficially own 5,111,358 PBF LLC Series A Units, and the holders of PBF Energy’s issued and outstanding shares of Class A common stock have 95.0% of the voting power in PBF Energy and the members of PBF LLC other than PBF Energy through their holdings of Class B common stock have the remaining 5.0% of the voting power in PBF Energy.

7.0% Senior Secured Notes due 2023
On November 24, 2015, PBF Holding completed the offering of $500 million aggregate principal amount of 7.0% Senior Secured Notes due 2023. The net proceeds of approximately $490 million, after deducting the initial purchasers’ discount and estimated offering expenses, are intended to be used for general corporate purposes, including to fund a portion of the purchase price for the pending Torrance Acquisition.

Revolving Loan
In November 2015 the Company increased the maximum availability under the Revolving Loan to $2.6 billion in accordance with its accordion feature.


34

Factors Affecting Comparability Between Periods
Our results have been affected by the following events, the understanding of which must be understoodwill aid in order to assessassessing the comparability of our period to period financial performance and financial condition.

Initial PublicPBFX Registered Direct Offering of PBFX
On May 14, 2014,April 24, 2019, PBFX completed its initialentered into subscription agreements to sell an aggregate of 6,585,500 common units to certain institutional investors in a registered direct public offering (the “PBFX Registered Direct Offering”) for gross proceeds of 15,812,500approximately $135.0 million. The PBFX Registered Direct Offering closed on April 29, 2019.
Inventory Intermediation Agreements
On certain dates subsequent to the inception of the Inventory Intermediation Agreements, we and our subsidiaries, DCR and PRC, entered into amendments to the amended and restated inventory intermediation agreements (as amended in the first quarter of 2019, the “Inventory Intermediation Agreements”) with J. Aron & Company, a subsidiary of The Goldman Sachs Group, Inc. (“J. Aron”), pursuant to which certain terms of the inventory intermediation agreements were amended, including, among other things, pricing and an extension of the terms. The most recent of these amendments was executed on March 29, 2019. As a result of the amendments (i) the Inventory Intermediation Agreement by and among J. Aron, PBF Holding and DRC (i) extended the term to February 28, 2020, which term may be further extended by mutual consent of the parties to February 26, 2021 and (ii) added the PBFX East Coast Storage Facility (as defined in “Note 4 - Inventories” of our Notes to Condensed Consolidated Financial Statements) as a location which will sell crude oil, a new product type to be included in the Products (as defined in “Note 4 - Inventories” of our Notes to Condensed Consolidated Financial Statements), to J. Aron by DCR. Pursuant to each Inventory Intermediation Agreement, J. Aron continues to purchase and hold title to the Products produced by the Paulsboro and Delaware City refineries (the “Refineries”), and delivered into the Storage Tanks (as defined in “Note 4 - Inventories” of our Notes to Condensed Consolidated Financial Statements). Furthermore, J. Aron agrees to sell the Products back to the Refineries as the Products are discharged out of the Storage Tanks. J. Aron has the right to store the Products purchased in tanks under the Inventory Intermediation Agreements and will retain these storage rights for the term of the agreements. PBF Holding continues to market and sell the Products independently to third parties.
PBFX IDR Restructuring
On February 28, 2019, PBFX closed on an Equity Restructuring Agreement (the “IDR Restructuring Agreement”) with PBF LLC and PBF GP, pursuant to which PBFX’s incentive distribution rights (the “IDRs”) held by PBF LLC were canceled and converted into 10,000,000 newly issued PBFX common units including 2,062,500(the “IDR Restructuring”). Subsequent to the closing of the IDR Restructuring, no distributions were made to PBF LLC with respect to the IDRs and the newly issued PBFX common units issued upon exerciseare entitled to normal distributions by PBFX.
Adoption of Accounting Standards Codification (“ASC”) Topic 842, “Leases”
As disclosed in “Note 8 - Leases” of our Notes to Condensed Consolidated Financial Statements, prior to January 1, 2019, we accounted for leases under ASC 840 and did not record a right of use asset or corresponding lease liability for operating leases on our Condensed Consolidated Balance Sheets. We adopted ASC 842 using a modified retrospective approach, and elected the over-allotment option that was grantedtransition method to apply the underwriters,new standard at the adoption date of January 1, 2019. As such, financial information for prior periods has not been adjusted and continues to be reported under ASC 840. Refer to “Note 8 - Leases” of our Notes to Condensed Consolidated Financial Statements.
PBF Energy Inc. Public Offering
On August 14, 2018, PBF Energy completed a price topublic offering of an aggregate of 6,000,000 shares of Class A common stock for net proceeds of $287.3 million, after deducting underwriting discounts and commissions and other offering expenses (the “August 2018 Equity Offering”).

PBFX Assets and Transactions
PBFX’s assets consist of various logistics assets. Apart from business associated with certain third-party acquisitions, PBFX’s revenue is derived from long-term, fee-based commercial agreements with subsidiaries of PBF Holding, which include minimum volume commitments, for receiving, handling, transferring and storing crude oil, refined products and natural gas. These transactions are eliminated by PBF Energy and PBF LLC in consolidation.
Since the publicinception of $23.00 per unit. On September 30,PBFX in 2014, PBF LLC completedand PBFX have entered into a transaction to contribute toseries of drop-down transactions. Such transactions and third-party acquisitions made by PBFX in the Delaware City heavy crude unloading rack ("DCR West Rack") for total consideration of $150.0 million, consisting of $135.0 million of cash and $15.0 million ofcurrent or prior period are discussed below.
TVPC Acquisition
On April 24, 2019, PBFX common units, or 589,536 common units (the "DCR West Rack Acquisition"). On December 11, 2014,entered into a contribution agreement with PBF LLC completed a transaction(the “TVPC Contribution Agreement”), pursuant to contribute to PBFX the tank farm and related facilities located at our Toledo refinery, including a propane storage and loading facility (the "Toledo Storage Facility") for total consideration of $150.0 million, consisting of $135.0 million of cash and $15.0 million of PBFX common units, or 620,935 common units (the "Toledo Storage Facility Acquisition"). On May 14, 2015which PBF LLC contributed to PBFX all of the issued and outstanding limited liability company interests of DelawareTVP Holding Company LLC (“TVP Holding”) for total consideration of $200.0 million (the “TVPC Acquisition”). Prior to the TVPC Acquisition, TVP Holding owned a 50% membership interest in the Torrance Valley Pipeline Company LLC ("DPC"(“TVPC”). Subsequent to the closing of the TVPC Acquisition on May 31, 2019, PBFX owns 100% of the membership interests in TVPC. The transaction was financed through a combination of proceeds from the PBFX Registered Direct Offering and borrowings under the PBFX Revolving Credit Facility (as defined below).
East Coast Storage Assets Acquisition
On July 16, 2018, PBFX entered into an agreement with Crown Point to purchase its wholly-owned subsidiary, CPI Operations LLC (“CPI”) for total consideration of approximately $127.0 million, including working capital and Delaware Citythe Contingent Consideration, comprised of an initial payment at closing of $75.0 million with a remaining $32.0 million balance payable one year after closing. The residual purchase consideration consists of the Contingent Consideration. The consideration was financed through a combination of cash on hand and borrowings under the PBFX Revolving Credit Facility (as defined below). The East Coast Storage Assets Acquisition (all terms as defined in “Note 3 - Acquisitions” of our Notes to Condensed Consolidated Financial Statements) closed on October 1, 2018.
Development Assets Acquisition
On July 16, 2018, PBFX entered into four contribution agreements with PBF LLC (the “Development Assets Contribution Agreements”), pursuant to which PBFX acquired from PBF LLC all of the issued and outstanding limited liability company interests of: Toledo Rail Logistics Company LLC ("DCLC"(“TRLC”), whose assets consist of a products pipeline, truck rackloading and related facilitiesunloading rail facility located at ourPBF Holding’s Toledo Refinery (the “Toledo Rail Products Facility”); Chalmette Logistics Company LLC (“CLC”), whose assets consist of a truck loading rack facility (the “Chalmette Truck Rack”) and a rail yard facility (the “Chalmette Rosin Yard”), both of which are located at PBF Holding’s Chalmette Refinery; Paulsboro Terminaling Company LLC (“PTC”), whose assets consist of a lube oil terminal facility located at PBF Holding’s Paulsboro Refinery (the “Paulsboro Lube Oil Terminal”); and DCR Storage and Loading Company LLC (“DSLC”), whose assets consist of an ethanol storage facility located at PBF Holding’s Delaware City refinery (collectivelyRefinery (the “Delaware Ethanol Storage Facility” and collectively with the "Delaware CityToledo Rail Products PipelineFacility, the Chalmette Truck Rack, the Chalmette Rosin Yard, and Truck Rack"the Paulsboro Lube Oil Terminal, the “Development Assets”),. The acquisition of the Development Assets closed on July 31, 2018 for total consideration of $143.0$31.6 million consisting of $112.51,494,134 common units representing limited partner interests in PBFX, issued to PBF LLC (the “Development Assets Acquisition”).

Knoxville Terminal Acquisition
On April 16, 2018, PBFX completed the purchase of Knoxville Terminals from Cummins Terminals, Inc. for total cash consideration of $58.0 million, excluding working capital adjustments (the “Knoxville Terminals Purchase”). The transaction was financed through a combination of cash on hand and $30.5 million ofborrowings under the PBFX common units, or 1,288,420 common units.
As of September 30, 2015, PBF LLC holds a 53.7% limited partner interest in PBFX (consisting of 2,572,944 common units and 15,886,553 subordinated units), with the remaining 46.3% limited partner interest held by the public unit holders. PBF LLC also owns all of the incentive distribution rights and indirectly owns a non-economic general partner interest in PBFX through its wholly-owned subsidiary, PBF Logistics GP LLC (“PBF GP”), the general partner of PBFX. During the subordination period (as set forth in the partnership agreement of PBFX) holders of the subordinated units are not entitled to receive any distribution of available cash until the common units have received the minimum quarterly distribution plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. If PBFX does not pay distributions on the subordinated units, the subordinated units will not accrue arrearages for those unpaid distributions. Each subordinated unit will convert into one common unit at the end of the subordination period.Revolving Credit Facility.
PBFX is a fee-based, growth-oriented, Delaware master limited partnership formed by PBF Energy to own or lease, operate, develop and acquire crude oil and refined petroleum products terminals, pipelines, storage facilities and similar logistics assets. PBFX engages in the receiving, handling and transferring of crude oil and the receipt, storage and delivery of crude oil, refined products and intermediates. PBFX’s assets consist of a light crude oil rail unloading terminal at the Delaware City refinery that also services the Paulsboro refinery (which we refer to as the “Delaware City Rail Terminal”), a crude oil truck unloading terminal at the Toledo refinery (which we refer to as the “Toledo Truck Terminal”), the DCR West Rack, the Toledo StorageRevolving Credit Facility and the Delaware City Products Pipeline and Truck Rack. All of PBFX’s revenue is derived from long-term, fee-based commercial agreements with subsidiaries of PBF LLC, which include minimum volume commitments, for receiving, handling, transferring and storing crude oil and refined products. These transactions are eliminated by PBF LLC in consolidation.
Secondary Offerings
On February 6, 2015, PBF Energy completed a public offering of 3,804,653 shares of Class A common stock in a secondary offering (the "February 2015 secondary offering"). All of the shares in the February 2015 secondary offering were sold by funds affiliated with Blackstone Group L.P., or Blackstone, and First Reserve Management, L.P., or First Reserve. In connection with the February 2015 secondary offering, Blackstone and First Reserve exchanged all of their remaining PBF LLC Series A Units forJuly 30, 2018, PBFX entered into an equivalent number of shares of Class A common stock of PBF Energy, and as a result, Blackstone and First Reserve no longer hold any PBF LLC Series A Units or shares of PBF Energy's Class A common stock. The holders of PBF LLC Series B Units, which include certain executive officers of PBF Energy and others, received a portion of the proceeds of the sale of the

35

PBF Energy Class A common stock by Blackstone and First Reserve in accordance with the amended and restated limited liability company agreement of PBF LLC. PBF Energy did not receive any proceeds fromcredit facility (as amended, the February 2015 secondary offering. In addition, in January, March and June of 2014, PBF Energy also completed three separate secondary offerings for a total of 48,000,000 shares of Class A common stock. All such shares were sold by funds affiliated with Blackstone and First Reserve.
Rail Facility“PBFX Revolving Credit Facility
Effective March 25, 2014, PBF Rail Logistics Company LLC (“PBF Rail”), an indirect wholly-owned subsidiary of PBF Holding, entered into a $250.0 million secured revolving credit agreement (the “Rail Facility”). The primary purpose of the Rail Facility is to fund the acquisition by PBF Rail of coiled and insulated crude tank cars and non-coiled and non-insulated general purpose crude tank cars (the "Eligible Railcars") before December 2015. The amount available to be advanced under the Rail Facility equals 70% of the lesser of the aggregate Appraised Value of the Eligible Railcars, or the aggregate Purchase Price of such Eligible Railcars, with Wells Fargo, National Association, as these terms are defined in the credit agreement.
On April 29, 2015, the Rail Facility was amended to, among other things, extend the maturity to April 29, 2017, reduce the total commitment from $250.0 million to $150.0 million, and reduce the commitment fee on the unused portion of the Rail Facility. At any time prior to maturity PBF Rail may repay and re-borrow any advances without premium or penalty. On the first anniversary of the closing of the amendment, the advance rate adjusts automatically to 65%.
PBFX Debt and Credit Facilities
On May 14, 2014, in connection with the closing of the PBFX Offering, PBFX entered into a five-year, $275.0 million revolving credit facility (the "PBFX Revolving Credit Facility")administrative agent, and a three-year, $300.0 million term loan (the "PBFX Term Loan").syndicate of lenders. The PBFX Revolving Credit Facility was increased from $275.0 million to $325.0 million in December 2014. Theamended and restated the May 2014 PBFX Revolving Credit Facility isto, among other things, increase the maximum commitment available to fund working capital, acquisitions, distributionsPBFX from $360.0 million to $500.0 million and capital expenditures and for other general partnership purposes and is guaranteed by a guaranty of collection from PBF LLC.extend the maturity date to July 2023. PBFX also has the ability to increase the maximum amount of the PBFX Revolving Credit Facility by an aggregate amount of up to $275.0$250.0 million, to a total facility size of $600.0$750.0 million, subject to receiving increased commitments from lenders or other financial institutions and satisfaction of certain conditions. The commitment fees on the unused portion, the interest rate on advances and the fees for letters of credit are consistent with the May 2014 PBFX Revolving Credit Facility. The PBFX Revolving Credit Facility includes a $25.0 million sublimit for standby letters of credit and a $25.0 million sublimit for swingline loans. The PBFX Term Loan was used to fund distributions to PBF LLC and is guaranteed by a limited guaranty of collection from PBF LLC and secured at all times by cash, U.S. Treasury or other investment grade securities in an amount equal to or greater than theLLC.
The outstanding principal amount ofbalance under the PBFX Term Loan.Revolving Credit Facility was $251.0 million and $156.0 million as of June 30, 2019 and December 31, 2018, respectively.
PBF Holding Revolving Credit Facility
On May 12, 2015, PBFX entered into an Indenture among the Partnership,2, 2018, PBF Logistics Finance Corporation, a Delaware corporationHolding and wholly-owned subsidiary of PBFX ("PBF Logistics Finance," and together with PBFX, the "Issuers"), the Guarantors named therein (certain subsidiaries of PBFX) and Deutsche Bank Trust Company Americas, as Trustee, under which the Issuers issued $350.0 million in aggregate principal amount of 6.875% Senior Notes due 2023 (the "PBFX Senior Notes"). PBF LLC has provided a limited guarantee of collection of the principal amount of the PBFX Senior Notes, but is not otherwise subject to the covenants of the Indenture. Of the $350.0 million aggregate PBFX Senior Notes, $19.9 million were purchased by certain of PBF Energy’s officers and directors and their affiliates pursuant to a separate private placement transaction. After deducting offering expenses, PBFX received net proceeds of approximately $343.0 million from the PBFX Senior Notes offering.
J. Aron Intermediation Agreements
On May 29, 2015, PBF Holding entered into amended and restated inventory intermediation agreements (the "A&R Intermediation Agreements") with J. Aron & Company ("J. Aron") pursuant to which certain terms of theits wholly-owned subsidiaries, as borrowers or subsidiary guarantors, replaced our existing inventory intermediation agreements were amended, including, among other things, pricing and an extension of the term for a period of two years from the original expiry date of July 1, 2015, subject to certain

36

early termination rights. In addition, the A&R Intermediation Agreements include one-year renewal clauses by mutual consent of both parties.
Pursuant to each A&R Intermediation Agreement, J. Aron will continue to purchase and hold title to certain of the intermediate and finished products (the "Products") produced by the Paulsboro and Delaware City refineries (the "Refineries"), respectively, and delivered into tanks at the Refineries. Furthermore, J. Aron agrees to sell the Products back to Paulsboro refinery and Delaware City refinery as the Products are discharged out of the Refineries' tanks. J. Aron has the right to store the Products purchased in tanks under the A&R Intermediation Agreements and will retain these storage rights for the term of the agreements. PBF Holding will continue to market and sell the Products independently to third parties.
Crude Oil Acquisition Agreement Termination
Effective July 31, 2014, PBF Holding terminated the Amended and Restated Crude Oil Acquisition Agreement,asset-based revolving credit agreement dated as of March 1, 2012 as amendedAugust 15, 2014 (the "Toledo Crude Oil Acquisition Agreement"“August 2014 Revolving Credit Agreement”) with Morgan Stanley Capital Group, Inc. ("MSCG"a new asset-based revolving credit agreement (the “Revolving Credit Facility"). UnderAmong other things, the termsRevolving Credit Facility increases the maximum commitment available to PBF Holding from $2.6 billion to $3.4 billion, extends the maturity date to May 2023 and redefines certain components of the Toledo Crude Oil Acquisition Agreement, we previously acquired substantially allBorrowing Base, as defined in the agreement governing the Revolving Credit Facility (the “Revolving Credit Agreement”), to make more funding available for working capital and other general corporate purposes. In addition, an accordion feature allows for commitments of our crude oilup to $3.5 billion. The commitment fees on the unused portion, the interest rate on advances and the fees for our subsidiary's Toledo refinery from MSCG through delivery at various interstate pipeline locations. No early termination penaltiesletters of credit are consistent with the August 2014 Revolving Credit Agreement.
There were incurred by usno outstanding borrowings under the Revolving Credit Facility as a result of the termination. We began sourcing our own crude oil needs for Toledo upon termination.June 30, 2019 and December 31, 2018, respectively.




Results of Operations
The tables below reflect our consolidated financial and operating highlights for the three and ninesix months ended SeptemberJune 30, 20152019 and 20142018 (amounts in thousands)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 three 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 master limited partnershippublicly-traded MLP that operates logisticalcertain logistics assets such as crude oil and refined petroleum products terminals, pipelines and storage facilities. PBFX'sPBFX’s operations are aggregated into the Logistics segment. Prior to the PBFX Offering, DCR West Rack acquisition, Toledo Tank Farm acquisition and the Delaware City Products Pipeline and Truck Rack acquisition, PBFX's assets were operated within the refining operations of our Delaware City and Toledo refineries and wereWe do not considered to be a separate reportable segment. We did not analyzeseparately discuss our results by individual segmentsegments as, apart from PBFX’s third-party acquisitions, our Logistics segment doesdid not have any third partysignificant third-party revenue and substantially alla significant portion of its operating results eliminate in consolidation. Additionally, third party expenses attributable directly to the Logistics segment are immaterial relative to our consolidated operating results.


37

 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2015 2014 2015 2014
Revenue$3,217,640
 $5,260,003
 $9,763,440
 $15,308,155
Cost of sales, excluding depreciation2,822,444
 4,670,908
 8,319,404
 13,754,048

395,196
 589,095
 1,444,036
 1,554,107
Operating expenses, excluding depreciation203,860
 202,625
 635,948
 682,246
General and administrative expenses50,808
 37,307
 125,431
 106,947
(Gain) loss on sale of assets(142) 18
 (1,133) (162)
Depreciation and amortization expense48,133
 68,010
 144,401
 135,887
Income from operations92,537
 281,135
 539,389
 629,189
Change in fair value of catalyst leases4,994
 5,543
 8,982
 1,204
Interest expense, net(29,360) (24,855) (80,183) (76,728)
Net income68,171
 261,823
 468,188
 553,665
Less: net income attributable to noncontrolling interests9,381
 4,637
 26,608
 7,328
Net income attributable to PBF LLC$58,790
 $257,186
 $441,580
 $546,337
        
Gross margin$150,815
 $322,084
 $686,401
 $746,567
        
Gross refining margin (1)$359,231
 $574,351
 $1,349,017
 $1,531,581
PBF EnergyThree Months Ended 
 June 30,		 Six Months Ended 
 June 30,
 2019 2018 2019 2018
Revenues$6,560.0
 $7,444.1
 $11,776.2
 $13,246.9
Cost and expenses:       
Cost of products and other5,955.8
 6,452.5
 10,165.0
 11,584.6
Operating expenses (excluding depreciation and amortization expense as reflected below)433.2
 417.7
 912.2
 843.8
Depreciation and amortization expense104.2
 89.7
 207.2
 173.0
Cost of sales6,493.2
 6,959.9
 11,284.4
 12,601.4
General and administrative expenses (excluding depreciation and amortization expense as reflected below)53.6
 58.7
 111.2
 121.5
Depreciation and amortization expense2.9
 2.6
 5.7
 5.3
Loss on sale of assets0.8
 0.6
 0.8
 0.7
Total cost and expenses6,550.5
 7,021.8
 11,402.1
 12,728.9
        
Income from operations9.5
 422.3
 374.1
 518.0
Other income (expense):       
Change in fair value of catalyst leases0.5
 4.1
 (2.6) 4.1
Interest expense, net(42.1) (43.4) (81.6) (86.6)
Other non-service components of net periodic benefit cost—
 0.2
 (0.1) 0.5
Income (loss) before income taxes(32.1) 383.2
 289.8
 436.0
Income tax (benefit) expense(10.5) 95.5
 70.0
 106.5
Net income (loss)(21.6) 287.7
 219.8
 329.5
Less: net income attributable to noncontrolling interests10.6
 15.6
 22.8
 27.0
Net income (loss) attributable to PBF Energy Inc. stockholders$(32.2) $272.1
 $197.0
 $302.5
        
Consolidated gross margin$66.8
 $484.2
 $491.8
 $645.5
        
Gross refining margin (1)
$526.5
 $928.3
 $1,459.0
 $1,538.3
        
Net income (loss) available to Class A common stock per share:       
Basic$(0.27) $2.41
 $1.64
 $2.70
Diluted$(0.27) $2.37
 $1.63
 $2.66
(1) See Non-GAAP Financial Measures.


PBF LLCThree Months Ended 
 June 30,		 Six Months Ended 
 June 30,
 2019 2018 2019 2018
Revenues$6,560.0
 $7,444.1
 $11,776.2
 $13,246.9
Cost and expenses:       
Cost of products and other5,955.8
 6,452.5
 10,165.0
 11,584.6
Operating expenses (excluding depreciation and amortization expense as reflected below)433.2
 417.7
 912.2
 843.8
Depreciation and amortization expense104.2
 89.7
 207.2
 173.0
Cost of sales6,493.2
 6,959.9
 11,284.4
 12,601.4
General and administrative expenses (excluding depreciation and amortization expense as reflected below)53.2
 58.2
 110.5
 120.8
Depreciation and amortization expense2.9
 2.6
 5.7
 5.3
Loss on sale of assets0.8
 0.6
 0.8
 0.7
Total cost and expenses6,550.1
 7,021.3
 11,401.4
 12,728.2
        
Income from operations9.9
 422.8
 374.8
 518.7
        
Other income (expense):       
Change in fair value of catalyst leases0.5
 4.1
 (2.6) 4.1
Interest expense, net(44.5) (45.4) (86.0) (90.6)
Other non-service components of net periodic benefit cost—
 0.2
 (0.1) 0.5
Income (loss) before income taxes(34.1) 381.7
 286.1
 432.7
Income tax expense (benefit)1.8
 (4.0) (5.4) (4.7)
Net income (loss)(35.9) 385.7
 291.5
 437.4
Less: net income attributable to noncontrolling interests11.1
 9.4
 20.1
 19.6
Net income (loss) attributable to PBF Energy Company LLC$(47.0) $376.3
 $271.4
 $417.8



Operating HighlightsThree Months Ended 
 June 30,		 Six Months Ended 
 June 30,
 2019 2018 2019 2018
Key Operating Information       
Production (bpd in thousands)854.2
 866.1
 796.7
 831.2
Crude oil and feedstocks throughput (bpd in thousands)854.1
 866.6
 798.9
 833.3
Total crude oil and feedstocks throughput (millions of barrels)77.7
 78.8
 144.6
 150.8
Consolidated gross margin per barrel of throughput$0.85
 $6.14
 $3.40
 $4.28
Gross refining margin, excluding special items, per barrel of throughput (1)
$9.10
 $9.77
 $7.85
 $8.57
Refinery operating expense, per barrel of throughput$5.27
 $5.11
 $5.97
 $5.40
        
Crude and feedstocks (% of total throughput) (2)
       
Heavy30% 38% 31% 37%
Medium28% 28% 30% 31%
Light26% 21% 25% 20%
Other feedstocks and blends16% 13% 14% 12%
Total throughput100% 100% 100% 100%
        
Yield (% of total throughput)       
Gasoline and gasoline blendstocks49% 48% 48% 49%
Distillates and distillate blendstocks31% 32% 32% 32%
Lubes1% 1% 1% 1%
Chemicals2% 2% 2% 2%
Other17% 17% 17% 16%
Total yield100% 100% 100% 100%


(1)See Non-GAAP Financial Measures below.

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Operating Highlights
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2015 2014 2015 2014
Key Operating Information        
Production (bpd in thousands)473.2
 496.8
 473.4
 465.3
Crude oil and feedstocks throughput (bpd in thousands)475.4
 495.5
 478.1
 465.9
Total crude oil and feedstocks throughput (millions of barrels)43.7
 45.6
 130.5
 127.2
Gross refining margin, excluding special items, per barrel of throughput (1)$12.97
 $12.60
 $10.95
 $12.04
Refinery operating expenses, excluding depreciation, per barrel of throughput$4.57
 $4.41
 $4.79
 $5.34
        
Crude and feedstocks (% of total throughput) (2):
       
Heavy crude9% 12% 12% 13%
Medium crude54% 43% 50% 44%
Light crude26% 34% 27% 34%
Other feedstocks and blends11% 11% 11% 9%
        
Yield (% of total throughput):
       
Gasoline and gasoline blendstocks48% 46% 47% 47%
Distillates and distillate blendstocks34% 36% 35% 36%
Lubes1% 2% 2% 2%
Chemicals3% 3% 3% 3%
Other14% 13% 13% 12%
        


(1)See Non-GAAP Financial Measures below.Measures.
(2)We define heavy crude oil as crude oil with an American Petroleum Institute (API) gravity less than 24 degrees. We define medium crude oil as crude oil with an API gravity between 24 and 35 degrees. We define light crude oil as crude oil with an 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 
 September 30,		 Nine Months Ended 
 September 30,		Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
2015 2014 2015 20142019 2018 2019 2018
(dollars per barrel, except as noted)(dollars per barrel, except as noted)
Dated Brent Crude$50.36
 $101.93
 $55.54
 $106.52
Dated Brent crude oil$68.96
 $74.42
 $66.16
 $70.75
West Texas Intermediate (WTI) crude oil$46.45
 $97.56
 $50.93
 $99.77
$59.90
 $68.02
 $57.42
 $65.52
Light Louisiana Sweet (LLS) crude oil$67.04
 $73.14
 $64.75
 $69.58
Alaska North Slope (ANS) crude oil$68.29
 $73.93
 $66.37
 $70.64
Crack Spreads              
Dated Brent (NYH) 2-1-1$17.60
 $13.91
 $17.75
 $13.07
$13.54
 $14.96
 $11.72
 $13.90
WTI (Chicago) 4-3-1$24.03
 $16.63
 $20.09
 $17.40
$21.10
 $17.56
 $16.79
 $14.74
LLS (Gulf Coast) 2-1-1$12.65
 $13.52
 $11.29
 $13.19
ANS (West Coast) 4-3-1$22.96
 $18.70
 $18.33
 $17.59
Crude Oil Differentials              
Dated Brent (foreign) less WTI$3.91
 $4.36
 $4.61
 $6.75
$9.06
 $6.40
 $8.74
 $5.23
Dated Brent less Maya (heavy, sour)$7.60
 $11.06
 $8.12
 $14.52
$7.27
 $12.40
 $5.69
 $10.78
Dated Brent less WTS (sour)$2.29
 $13.14
 $4.14
 $13.95
$10.73
 $14.78
 $10.15
 $10.20
Dated Brent less ASCI (sour)$5.08
 $5.02
 $4.43
 $7.39
$3.96
 $5.09
 $3.17
 $4.84
WTI less WCS (heavy, sour)$14.52
 $20.06
 $11.58
 $20.70
$12.53
 $18.26
 $11.28
 $22.17
WTI less Bakken (light, sweet)$3.26
 $6.43
 $3.49
 $4.98
$1.06
 $0.39
 $0.41
 $0.70
WTI less Syncrude (light, sweet)$1.02
 $4.12
 $(1.19) $1.97
$(0.05) $2.98
 $(0.01) $1.69
WTI less LLS (light, sweet)$(7.14) $(5.12) $(7.33) $(4.06)
WTI less ANS (light, sweet)$(8.39) $(5.91) $(8.95) $(5.12)
Natural gas (dollars per MMBTU)$2.73
 $3.95
 $2.76
 $4.41
$2.51
 $2.85
 $2.69
 $2.82

Three Months Ended SeptemberJune 30, 20152019 Compared to the Three Months Ended SeptemberJune 30, 20142018
Overview— Net income PBF Energy net loss was $68.2$21.6 million for the three months ended SeptemberJune 30, 20152019 compared to net income of $261.8$287.7 million for the three months ended SeptemberJune 30, 2014. Net income attributable to2018. PBF LLC net loss was $58.8$35.9 million for the three months ended SeptemberJune 30, 20152019 compared to net income of $385.7 million for the three months ended June 30, 2018. Net loss attributable to PBF Energy was $32.2 million, or $(0.27) per diluted share, for the three months ended June 30, 2019 ($(0.27) per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net loss, or $0.83 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 LLCEnergy of $257.2$272.1 million, or $2.37 per diluted share, for the three months ended SeptemberJune 30, 2014.2018 ($2.37 per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net income, or $1.38 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). The net income or loss attributable to PBF LLC includesEnergy represents PBF LLC’sEnergy’s equity interest in its operating subsidiaries' net income.PBF LLC’s pre-tax income, less applicable income tax (benefit) expense. PBF Energy’s weighted-average equity interest in PBF LLC was 99.0% and 98.4% for the three months ended June 30, 2019 and 2018, respectively.

Our results for the three months ended SeptemberJune 30, 20152019 were negatively impacted by a non-cash, special item consisting of a non-cash inventorypre-tax lower of cost or market ("LCM"(“LCM”) inventory adjustment of approximately $208.3$182.0 million, onor $133.8 million net of tax. Our results for the three months ended June 30, 2018 were positively impacted by a pre-tax LCM inventory adjustment of approximately $158.0 million, or $116.3 million net basis,of tax. The LCM inventory adjustments were recorded due to movements in the price of crude oil and refined products in the periods presented.
Excluding the impact of these special items, our results were negatively impacted by unfavorable movements in crude differentials and overall lower throughput volumes and barrels sold across the majority of our refineries as a result of ongoing turnarounds, which includes the reversal of the LCM charge recordedwere completed in the second quarter of 2015. The LCM adjustment is a result of the changing crude oil and refined product prices from the second quarter of 2015 to the end of the third quarter of 2015. During this period the prices have remained below historical costs. Excluding the impact of the net change in LCM reserve of $208.3 million, our results were positively impacted by higher crack spreads2019, despite stronger refining margins in the East CoastMid-Continent and Mid-Continent partially offset by unfavorable movements in crude oil differentials and the impact of the unplanned downtime at our Delaware City refinery in August 2015 and planned turnaround at our Delaware City refinery in September 2015 which reduced throughput and increased operating expenses.
Revenues— Revenues totaled $3.2 billionWest Coast. Our results for the three months ended SeptemberJune 30, 2015 compared to $5.32019 were also negatively impacted by increased depreciation and amortization expense associated with our continued investment in our refining assets and the effect of significant turnaround activity during the first half of the year.
Revenues— Revenues totaled $6.6 billion for the three months ended SeptemberJune 30, 2014, 2019 compared to $7.4 billion for the three months ended June 30, 2018, a decrease of approximately $2.0$0.9 billion,, or 38.8%11.9%. Revenues per barrel were $74.24 and $80.39 for the three months ended June 30, 2019 and 2018, respectively, a decrease of 7.7% directly related to lower hydrocarbon commodity prices. For the three months ended SeptemberJune 30, 2015, the total throughput rates in the East Coast and Mid-Continent refineries averaged approximately 301,800 bpd and 173,600 bpd, respectively. For the three months ended September 30, 2014,2019, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and Mid-ContinentWest Coast refineries averaged approximately 344,100325,800 bpd, 163,200 bpd, 201,400 bpd and 151,400163,700 bpd, respectively. For the three months ended June 30, 2018, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 359,900 bpd, 152,900 bpd, 188,500 bpd and 165,300 bpd, respectively. The decline in throughput rates at our East Coast refineries were lower in 2015the three months ended June 30, 2019 compared to 2014 is primarilythe same period in 2018 due to unplannedplanned downtime associated with the turnarounds of the crude unit at our Paulsboro refinery and coker at our Delaware City refinery, which were completed during the second quarter of 2019. Throughput rates in August 2015 andthe Mid-Continent were higher in the three months ended June 30, 2019 compared to the same period in 2018 due to a planned turnaround in September 2015 at our Delaware City refinery. The increase in throughput rates at our Mid-Continent refinery in 2015 compared to 2014 was primarily attributable to favorable market conditions at our Toledo refinery in the thirdsecond quarter of 2015.the prior year. For the three months ended SeptemberJune 30, 2015, the

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total barrels sold at our East Coast and Mid-Continent refineries averaged approximately 355,400 bpd and 179,700 bpd, respectively. For the three months ended September 30, 2014,2019, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and Mid-ContinentWest Coast refineries averaged approximately 365,200358,700 bpd, 171,800 bpd, 243,800 bpd and 154,400196,800 bpd, respectively. For the three months ended June 30, 2018, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 401,100 bpd, 162,900 bpd, 250,000 bpd and 203,600 bpd, respectively. Total refined product barrels sold were higher than throughput rates, reflecting sales from inventory as well as sales and purchases of refined products outside the refinery.our refineries.
Consolidated Gross Margin— Consolidated gross margin totaled $66.8 million for the three months ended June 30, 2019 compared to $484.2 million for the three months ended June 30, 2018, a decrease of approximately $417.4 million. Gross refining margin (as described below in Non-GAAP Financial Measures) totaled $359.2$526.5 million, or $8.21 per barrel of throughput ($567.5 million or $12.97 per barrel of throughput excluding the impact of special items), for the three months ended September 30, 2015 compared to $574.4 million, or $12.60 per barrel of throughput during the three months ended September 30, 2014, a decrease of $215.2 million. Gross margin, including refinery operating expenses and depreciation, totaled $150.8 million, or $3.45$6.76 per barrel of throughput for the three months ended SeptemberJune 30, 20152019 compared to $322.1$928.3 million, or $7.10$11.77 per barrel of throughput for the three months ended SeptemberJune 30, 2014,2018, a decrease of $171.3approximately $401.8 million. Excluding the impact ofGross refining margin excluding special items gross margin and gross refining margin increased duetotaled $708.5 million or $9.10 per barrel of throughput for the three months ended June 30, 2019 compared to improved crack spreads in$770.3 million or $9.77 per barrel of throughput for the East Coast and the Mid-Continent partially offset by unfavorable movements in crude differentials in both the East Coast and the Mid-Continent and lower throughput rates at our East Coast refineries. In addition,three months ended June 30, 2018, a decrease of $61.8 million.
Consolidated gross margin and gross refining margin were negatively impacted by a non-cash LCM adjustment of approximately $208.3$182.0 million on a net basis, resulting from the changedecrease in crude oil and refined product prices fromin comparison to the prices at the end of the first quarter of 2019. The non-cash LCM inventory adjustment increased consolidated gross margin and gross refining margin by approximately $158.0 million on a net basis in the second quarter of 20152018. Gross refining margin excluding the impact of special items decreased due to unfavorable movements in crude differentials and reduced throughput rates in the end ofEast Coast and West Coast, partially offset by higher throughput rates in the third quarter of 2015, which remained below historical costs.Mid-Continent and Gulf Coast and higher crack spreads in the Mid-Continent and West Coast.
Additionally, our results continue to be impacted by significant costs to comply with the Renewable Fuel Standard (“RFS”), although at a reduced level from the prior year. Total RFS costs were $30.9 million for the three months ended June 30, 2019 in comparison to $39.2 million for the three months ended June 30, 2018.

Average industry refining margins in the Mid-Continent were strongermixed during the three months ended SeptemberJune 30, 2015 as compared2019 in comparison to the same period in 2014. The WTI (Chicago) 4-3-1 industry crack spread was approximately $24.03 per barrel or 44.5% higher2018, primarily as a result of varying regional inventory levels of gasoline and seasonal and unplanned refining downtime issues impacting product margins. Crude oil differentials were generally unfavorable in the three months ended September 30, 2015 as comparedcomparison to $16.63 per barrel in the same period in 2014. However,2018, with notable light-heavy crude differential compression negatively impacting our margins were negatively impacted from our refinery specific crude slate inrefining gross margin.
On the Mid-Continent which was impacted by a declining WTI/Syncrude differential, which averaged approximately $1.02 per barrel inEast Coast, the third quarter of 2015 as compared to $4.12 per barrel in the third quarter of 2014.
The Dated Brent (NYH) 2-1-1 industry crack spread was approximately $17.60$13.54 per barrel, or 26.5% higher9.5% lower, in the three months ended SeptemberJune 30, 20152019, as compared to $13.91$14.96 per barrel in the same period in 2014. The WTI/Dated Brent differential and2018. Our margins were negatively impacted from our refinery specific slate on the East Coast by tightening in the Dated Brent/Maya differentials were $0.45 and $3.46 lower, respectively,differential, which decreased by $5.13 per barrel in the three months ended SeptemberJune 30, 20152019 as compared to the same period in 2014.2018. In addition, the WTI/BakkenWCS differential was approximately $3.17decreased significantly to $12.53 per barrel less favorable in the three months ended SeptemberJune 30, 20152019 compared to $18.26 in the same period in 2018, which unfavorably impacted our cost of heavy Canadian crude. This decrease was offset by improving WTI/Bakken differential, which increased $0.67 per barrel in the three months ended June 30, 2019 as compared to the same period in 2014.2018.
Across the Mid-Continent, the WTI (Chicago) 4-3-1 industry crack spread was $21.10 per barrel, or 20.2% higher, in the three months ended June 30, 2019 as compared to $17.56 per barrel in the same period in 2018. Our margins were positively impacted from our refinery specific slate in the Mid-Continent by an increasing WTI/Bakken differential, which averaged $1.06 per barrel in the three months ended June 30, 2019, as compared to $0.39 per barrel in the same period in 2018. This increase was offset by tightening in the WTI/Syncrude differential, which averaged a premium of $0.05 per barrel during the three months ended June 30, 2019 as compared to a discount of $2.98 per barrel in the same period of 2018.
On the Gulf Coast, the LLS (Gulf Coast) 2-1-1 industry crack spread was $12.65 per barrel, or 6.4% lower, in the three months ended June 30, 2019 as compared to $13.52 per barrel in the same period in 2018. Margins on the Gulf Coast were negatively impacted from our refinery specific slate by a declining WTI/LLS differential, which averaged a premium of $7.14 per barrel during the three months ended June 30, 2019 as compared to a premium of $5.12 per barrel in the same period of 2018.
On the West Coast the ANS (West Coast) 4-3-1 industry crack spread was $22.96 per barrel, or 22.8% higher, in the three months ended June 30, 2019 as compared to $18.70 per barrel in the same period in 2018. Margins on the West Coast were negatively impacted from our refinery specific slate by a weakening WTI/ANS differential, which averaged a premium of $8.39 per barrel during the three months ended June 30, 2019 as compared to a premium of $5.91 per barrel in the same period of 2018.
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.
Operating Expenses— Operating expenses totaled $203.9$433.2 million for the three months ended SeptemberJune 30, 20152019 compared to $202.6$417.7 million for the three months ended SeptemberJune 30, 2014,2018, an increase of $1.3$15.5 million, or 0.6%3.7%. Of the total $203.9$433.2 million of operating expenses for the three months ended SeptemberJune 30, 2015, $200.02019, $409.7 million, or $4.57$5.27 per barrel of throughput, related to expenses incurred by the Refining segment, while the remaining $3.8$23.5 million related to expenses incurred by the Logistics segment. The increasesegment ($402.7 million, or $5.11 per barrel, and $15.0 million of operating expenses for the three months ended June 30, 2018 related to the Refining and Logistics segments, respectively). Increases in operating expenses waswere mainly attributableattributed to $11.9 millionhigher outside service costs attributed to turnaround and maintenance activity. Operating expenses related to our Logistics segment increased when compared to the same period in higher maintenance and repair2018 primarily due to expenses related to the unplanned downtime at our Delaware City refineryoperations of PBFX’s recently acquired assets and $2.5 million of higher employee wage and benefits expenses which were predominantly offset by a decrease of $13.0 million in energy related costs due to lower natural gas and electricity prices. Our operating expenses principally consist of salaries and employee benefits, maintenance, energy and catalyst and chemicals costs at our refineries. The operating expenses related to the Logistics segment consists of costs related to the operation and maintenance of PBFX's assets subsequent to the PBFX Offering.environmental clean-up costs.

General and Administrative Expenses— General and administrative expenses totaled $50.8 million for the three months ended September 30, 2015 compared to $37.3$53.6 million for the three months ended SeptemberJune 30, 2014, an increase2019 compared to $58.7 million for the three months ended June 30, 2018, a decrease of $13.5approximately $5.1 million or 36.2%8.7%. The increasedecrease in general and administrative expenses primarily relatesfor the three months ended June 30, 2019 in comparison to higher employee compensation costs and administrative expensesthe three months ended June 30, 2018 is primarily related to PBFX.lower employee related expenses, including incentive compensation. Our general and administrative expenses are comprised of the personnel, facilities and other infrastructure costs necessary to support our refineries.refineries and related logistics assets.


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GainLoss on Sale of Assets— GainThere was a net loss of $0.8 million on the sale of assets for the three months ended SeptemberJune 30, 2015 was $0.12019 compared to a net loss of $0.6 million for the three months ended June 30, 2018, both of which were related to the sale of railcars which were subsequently leased back.non-operating refinery assets.
Depreciation and Amortization Expense— Depreciation and amortization expense totaled $48.1$107.1 million for the three months ended SeptemberJune 30, 20152019 (including $104.2 million recorded within Cost of sales) compared to $68.0$92.3 million for the three months ended SeptemberJune 30, 2014, a decrease2018 (including $89.7 million recorded within Cost of $19.9sales), an increase of $14.8 million. The decreaseincrease was primarily a result of an impairment charge of $28.5 million incurredadditional depreciation expense associated with a general increase in our fixed asset base due to capital projects and turnarounds completed since the thirdsecond quarter of 2014 partially offset by capital projects related to turnarounds completed in 2014, the completed expansion of the crude rail unloading facility at the Delaware City refinery in 2014 and refinery optimization projects at Toledo.2018.
Change in Fair Value of Catalyst Leases— Change in the fair value of catalyst leases represented a gain of $5.0$0.5 million for the three months ended SeptemberJune 30, 20152019 compared to a gain of $5.5$4.1 million for the three months ended SeptemberJune 30, 2014.2018. These gains relate to the change in value of the precious metals underlying the sale and leaseback of our refineries’ precious metals catalyst, which we are obligated to repurchase at fair market value on the lease termination dates.
Interest Expense, net— InterestPBF Energy interest expense totaled $29.4$42.1 million for the three months ended SeptemberJune 30, 20152019 compared to $24.9$43.4 million for the three months ended SeptemberJune 30, 2014, an increase2018, a decrease of $4.5approximately $1.3 million. This increasenet decrease is mainly attributable to lower outstanding revolver borrowings during the issuance of the PBFX Senior Notes and the related amortization of deferred financing fees. This increase was offset by decreases in interest expense related to the termination of our crude and feedstock supply agreement with MSCG, effective July 31, 2014.three months ended June 30, 2019. Interest expense includes interest on long-term debt including the PBFX credit facilities, costs related to the sale and leaseback of our precious metals catalyst, interest expense incurred in connection with our crude and feedstock supply agreement with Statoil, financing costs associated with the Inventory Intermediation Agreements 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 $44.5 million and $45.4 million for the three months ended June 30, 2019 and June 30, 2018, respectively (inclusive of $2.4 million and $2.0 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 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 consolidated financial statements based on PBF Energy’s allocable share of PBF LLC’s pre-tax income or loss, which was approximately 99.0% and 98.4%, on a weighted-average basis for the three months ended June 30, 2019 and 2018, respectively. 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 interest, for the three months ended June 30, 2019 and 2018 was 24.6% and 26.0%, respectively, reflecting tax adjustments for discrete items during the quarters.

Noncontrolling Interest— PBF Energy is the sole managing member of, and has a controlling interest in, PBF LLC. As a resultthe sole managing member of PBF LLC, PBF Energy operates and controls all of the initial public offeringbusiness 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 unit holdersunitholders of PBFX.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 consolidated statementCondensed Consolidated Statements of operationsOperations 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 unit holdersunitholders of PBFX.PBFX and by the third-party stockholders of certain of Chalmette Refining’s subsidiaries. The total noncontrolling interest on the balance sheetCondensed 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 unit holdersunitholders of PBFX.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 the three months ended June 30, 2019 and 2018 was approximately 1.0% and 1.6%, respectively. 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.

NineSix Months Ended SeptemberJune 30, 20152019 Compared to the NineSix Months Ended SeptemberJune 30, 20142018
Overview— Net PBF Energy net income was $468.2$219.8 million for the ninesix months ended SeptemberJune 30, 20152019 compared to net income of $553.7$329.5 million for the ninesix months ended SeptemberJune 30, 2014.2018. PBF LLC net income was $291.5 million for the six months ended June 30, 2019 compared to net income of $437.4 million for the six months ended June 30, 2018. Net income attributable to PBF LLCEnergy stockholders was $441.6$197.0 million, or $1.63 per diluted share, for the ninesix months ended SeptemberJune 30, 20152019 ($1.63 per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net income, or $(0.33) 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) compared to net income attributable to PBF LLCEnergy stockholders of $546.3$302.5 million, or $2.66 per diluted share, for the ninesix months ended SeptemberJune 30, 2014.2018 ($2.66 per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net income, or $1.10 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). The net income or loss attributable to PBF LLC includesEnergy stockholders represents PBF LLC’sEnergy’s equity interest in its operating subsidiaries' net income.PBF LLC’s pre-tax income, less applicable income tax expense. PBF Energy’s weighted-average equity interest in PBF LLC was 99.0% and 97.6% for the six months ended June 30, 2019 and 2018, respectively.
Our results for the ninesix months ended SeptemberJune 30, 20152019 were negativelypositively impacted by a non-cash, special item consisting of a non-cashpre-tax LCM inventory lower of cost or market ("LCM") adjustment of approximately $81.1$324.0 million, onor $238.3 million net of tax. Our results for the six months ended June 30, 2018 were positively impacted by a pre-tax LCM inventory adjustment of approximately $245.7 million, or $180.8 million net basis, which includes the reversal of thetax. The LCM chargeinventory adjustments were recorded due to movements in the fourth quarterprice of 2014. The LCM adjustment is a result of the changing crude oil and refined product prices fromproducts in the year ended 2014 to the end of the third quarter of 2015. During this period the prices have remained below historical costs. periods presented.
Excluding the impact of the net change in LCM reserve of $81.1 million,these special items, our results were negatively impacted by unfavorable movements in certain crude oil differentials and overall lower throughput volumes and barrels sold across our refineries, despite stronger refining margins in the impactMid-Continent and West Coast. Our results for the six months ended June 30, 2019 were also negatively impacted by increased depreciation and amortization expense associated with our continued investment in our refining assets and the effect of significant turnaround activity during the first half of the unplanned downtime at our Toledo refinery and Delaware City refinery in June and August 2015, respectively, which increased operating expenses and reduced throughput, partially offset by higher crack spreads on the East Coast and Mid-Continent.year.

Revenues—Revenues totaled $9.8$11.8 billion for the ninesix months ended SeptemberJune 30, 20152019 compared to $15.3$13.2 billion for the ninesix months ended SeptemberJune 30, 2014,2018, a decrease of approximately $5.5$1.5 billion, or 36.2%11.1%. Revenues per barrel were $70.45 and $76.53 for the six months ended June 30, 2019 and 2018, respectively, a decrease of 7.9% directly related to lower hydrocarbon commodity prices. For the ninesix months ended SeptemberJune 30, 2015, the total throughput rates in the East Coast and Mid-Continent refineries averaged approximately 325,400 bpd and 152,700 bpd, respectively. For the nine months ended September 30, 2014,2019, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and Mid-ContinentWest Coast refineries averaged approximately 320,400

42

315,500 bpd, 155,600 bpd, 183,100 bpd and 145,500144,700 bpd, respectively. The increase inFor the six months ended June 30, 2018, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 346,500 bpd, 138,000 bpd, 178,900 bpd and 169,900 bpd, respectively. The throughput rates at our East Coast and West Coast refineries were lower in 2015the six months ended June 30, 2019 compared to 2014 is primarilythe same period in 2018 due to favorable market conditions, partially offset byplanned downtime associated with turnarounds of the coker and associated units at our Delaware City and Torrance refineries and the crude unit at our Paulsboro refinery, all of which were completed in the first half of 2019, and unplanned down timedowntime at our Delaware City refinery in August 2015 and a planned turnaround in September 2015. The increase in throughputthe first quarter of 2019. Throughput rates at our Mid-Continent refinery iswere higher in the six months ended June 30, 2019 compared to the same period in 2018 due to favorable market conditionsa planned turnaround at our Toledo refinery in the third quarterfirst half of 2015, partially offset by an unplanned downtimethe prior year. Throughput rates at our Gulf Coast refinery were in line with the second quarter of 2015.prior year. For the ninesix months ended SeptemberJune 30, 2015,2019, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and Mid-ContinentWest Coast refineries averaged approximately 363,400353,900 bpd, 164,900 bpd, 229,800 bpd and 163,000174,900 bpd, respectively. For the ninesix months ended SeptemberJune 30, 2014,2018, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and Mid-ContinentWest Coast refineries averaged approximately 341,600378,000 bpd, 149,300 bpd, 232,400 bpd and 152,700196,700 bpd, respectively. Total refined product barrels sold were higher than throughput rates, reflecting sales from inventory as well as sales and purchases of refined products outside the refinery.our refineries.
Consolidated Gross Margin— Consolidated gross margin totaled $491.8 million for the six months ended June 30, 2019, compared to $645.5 million for the six months ended June 30, 2018, a decrease of approximately $153.7 million. Gross refining margin (as described below in Non-GAAP Financial Measures) totaled $1,349.0$1,459.0 million, or $10.33 per barrel of throughput ($1,430.2 million or $10.95 per barrel of throughput excluding the impact of special items), for the nine months ended September 30, 2015 compared to $1,531.6 million, or $12.04 per barrel of throughput during the nine months ended September 30, 2014, a decrease of $182.6 million. Gross margin, including refinery operating expenses and depreciation, totaled $686.4 million, or $5.26$10.08 per barrel of throughput for the ninesix months ended SeptemberJune 30, 20152019 compared to $746.6$1,538.3 million, or $5.89$10.20 per barrel of throughput for the ninesix months ended SeptemberJune 30, 2014,2018, a decrease of $60.2approximately $79.3 million. Excluding the impact ofGross refining margin excluding special items gross margin and gross refining margin decreased duetotaled $1,135.0 million or $7.85 per barrel of throughput for the six months ended June 30, 2019 compared to unfavorable movements in crude differentials partially offset by improved crack spreads in$1,292.6 million or $8.57 per barrel of throughput for the East Coast and the Mid-Continent and higher throughput rates. In addition,six months ended June 30, 2018, a decrease of $157.6 million.
Consolidated gross margin and gross refining margin were negativelypositively impacted by a non-cash LCM adjustment of approximately $81.1$324.0 million on a net basis resulting from the changeincrease in crude oil and refined product prices from the year ended 20142018 to the end of the thirdsecond quarter of 2015, which remained below historical costs.2019. The non-cash LCM inventory adjustment increased consolidated gross margin and gross refining margin by approximately $245.7 million for the six months ended June 30, 2018. Gross refining margin excluding the impact of special items decreased due to unfavorable movements in certain crude differentials and refining margins and reduced throughput rates in the East Coast and West Coast, partially offset by higher throughput rates in the Mid-Continent and Gulf Coast and stronger crack spreads in the Mid-Continent and West Coast.
Additionally, our results continue to be impacted by significant costs to comply with the RFS, although at a reduced level from the prior year. Total RFS costs were $60.4 million for the six months ended June 30, 2019 in comparison to $83.1 million for the six months ended June 30, 2018.
Average industry refining margins in the Mid-Continent were strongermixed during the ninesix months ended SeptemberJune 30, 2015 as compared2019 in comparison to the same period in 2014. The WTI (Chicago) 4-3-1 industry crack spread was approximately $20.09 per barrel or 15.5% higher2018, primarily as a result of varying regional inventory levels of gasoline and seasonal and unplanned refining downtime issues impacting product margins. Crude oil differentials were generally unfavorable in the nine months ended September 30, 2015 as comparedcomparison to $17.40 per barrel in the same period in 2014. Alternatively,2018, with notable light-heavy crude differential compression negatively impacting our margins were negatively impacted from our refinery specific crude slate ingross refining margin.

On the Mid-Continent which was impacted by a declining WTI/Syncrude differential, which averaged a premium of $1.19 per barrel duringEast Coast, the nine months ended September 30, 2015 as compared to a discount of $1.97 per barrel in the same period of 2014.
The Dated Brent (NYH) 2-1-1 industry crack spread was approximately $17.75$11.72 per barrel, or 35.8% higher15.7% lower, in the ninesix months ended SeptemberJune 30, 20152019, as compared to $13.07$13.90 per barrel in the same period in 2014. The WTI/Dated Brent differential and2018. Our margins were negatively impacted from our refinery specific slate on the East Coast by tightening in the Dated Brent/Maya differential were $2.14 and $6.40 lower,WTI/Bakken differentials, which decreased by $5.09 per barrel and $0.29 per barrel, respectively, in the nine months ended September 30, 2015 as comparedcomparison to the same period in 2014.2018. In addition, the WTI/BakkenWCS differential was approximately $1.49decreased significantly to $11.28 per barrel less favorablein 2019 compared to $22.17 in 2018, which unfavorably impacted our cost of heavy Canadian crude.
Across the Mid-Continent, the WTI (Chicago) 4-3-1 industry crack spread was $16.79 per barrel, or 13.9% higher, in the ninesix months ended SeptemberJune 30, 20152019 as compared to $14.74 per barrel in the same period in 2014.2018. Our margins were negatively impacted from our refinery specific slate in the Mid-Continent by a decreasing WTI/Bakken differential, which averaged a discount of $0.41 per barrel in the six months ended June 30, 2019, as compared to a discount of $0.70 per barrel in the same period in 2018. Additionally, the WTI/Syncrude differential averaged a premium of $0.01 per barrel during the six months ended June 30, 2019 as compared to a discount of $1.69 per barrel in the same period of 2018.
On the Gulf Coast, the LLS (Gulf Coast) 2-1-1 industry crack spread was $11.29 per barrel, or 14.4% lower, in the six months ended June 30, 2019 as compared to $13.19 per barrel in the same period in 2018. Margins on the Gulf Coast were negatively impacted from our refinery specific slate by a weakening WTI/LLS differential, which averaged a premium of $7.33 per barrel during the six months ended June 30, 2019 as compared to a premium of $4.06 per barrel in the same period of 2018.
On the West Coast the ANS (West Coast) 4-3-1 industry crack spread was $18.33 per barrel, or 4.2% higher, in the six months ended June 30, 2019 as compared to $17.59 per barrel in the same period in 2018. Margins on the West Coast were negatively impacted from our refinery specific slate by a weakening WTI/ANS differential, which averaged a premium of $8.95 per barrel during the six months ended June 30, 2019 as compared to a premium of $5.12 per barrel in the same period of 2018.
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.
Operating Expenses— Operating expenses totaled $635.9$912.2 million for the ninesix months ended SeptemberJune 30, 20152019 compared to $682.2$843.8 million for the ninesix months ended SeptemberJune 30, 2014, a decrease2018, an increase of $46.3approximately $68.4 million, or 6.8%8.1%. Of the total $635.9$912.2 million of operating expenses for the ninesix months ended SeptemberJune 30, 2015, $625.52019, $863.1 million or $4.79$5.97 per barrel of throughput, related to expenses incurred by the Refining segment, while the remaining $10.4$49.1 million related to expenses incurred by the Logistics segment. The decreasesegment ($814.1 million or $5.40 per barrel, and $29.7 million of operating expenses for the six months ended June 30, 2018 related to the Refining and Logistics segments, respectively). Increases in operating expenses waswere mainly attributableattributed to a decrease of $64.8 million in energyhigher outside service costs attributed to turnaround and maintenance activity. Operating expenses related costs primarily attributable to lower natural gas and electricity prices. The decrease was partially offset by an increase of $12.8 million in maintenance and repair expenses directly attributableour Logistics segment increased when compared to the unplanned downtime at our Delaware City and Toledo refineries and $3.9 millionsame period in chemical and catalyst related expenses. Our operating expenses principally consist of salaries and employee benefits, maintenance, energy and catalyst and chemicals costs at our refineries. The operating2018 due to expenses related to the Logistics segment consistsoperations of costs related to the operationPBFX’s recently acquired assets and maintenance of PBFX's assets subsequent to the PBFX Offering.higher environmental clean-up costs.
General and Administrative Expenses— General and administrative expenses totaled $125.4$111.2 million for the ninesix months ended SeptemberJune 30, 20152019 compared to $106.9$121.5 million for the ninesix months ended SeptemberJune 30, 2014, an increase2018, a decrease of approximately $18.4$10.3 million or 17.3%8.5%. The increasedecrease in general and administrative expenses

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for the six months ended June 30, 2019 in comparison to the six months ended June 30, 2018 primarily relatesrelated to lower employee related expenses, incurred associated with PBFX and employeeincluding incentive compensation, partially offset by higher legal settlement costs. Our general and administrative expenses are comprised of the personnel, facilities and other infrastructure costs necessary to support our refineries.refineries and related logistics assets.
GainLoss on Sale of Assets— GainNet loss on sale of assets for the nine months ended September 30, 2015 was $1.1 million as compared to $0.2$0.8 million for the ninesix months ended SeptemberJune 30, 20142019 compared to a loss of $0.7 million for the six months ended June 30, 2018. These losses are related to the sale of railcars which were subsequently leased back.non-operating refinery assets.

Depreciation and Amortization Expense— Depreciation and amortization expense totaled $144.4$212.9 million for the ninesix months ended SeptemberJune 30, 20152019 (including $207.2 million recorded within Cost of sales) compared to $135.9$178.3 million for the ninesix months ended SeptemberJune 30, 2014,2018 (including $173.0 million recorded within Cost of sales), an increase of $8.5approximately $34.6 million. The increase was primarily a result of additional depreciation expense associated with a general increase in our fixed asset base due to capital projects related toand turnarounds completed in 2014,since the completed expansionsecond quarter of the crude rail unloading facility at2018, as well as accelerated amortization related to the Delaware City and Torrance refinery turnarounds, which were completed in 2014 and refinery optimization projects at Toledo, partially offset by an impairment chargethe first half of $28.5 million in 2014.2019.
Change in Fair Value of Catalyst Leases— Change in the fair value of catalyst leases represented a gainloss of $9.0$2.6 million for the ninesix months ended SeptemberJune 30, 20152019 compared to a gain of $1.2$4.1 million for the ninesix months ended SeptemberJune 30, 2014.2018. These gains and losses relate to the change in value of the precious metals underlying the sale and leaseback of our refineries’ precious metals catalyst, which we are obligated to repurchase at fair market value on the lease termination dates.
Interest Expense, net— InterestPBF Energy interest expense totaled $80.2$81.6 million for the ninesix months ended SeptemberJune 30, 20152019 compared to $76.7$86.6 million for the ninesix months ended SeptemberJune 30, 2014, an increase2018, a decrease of approximately $3.4$5.0 million. This increasenet decrease is mainly attributable to higher interest costs associated withlower outstanding revolver borrowings during the issuance of the PBFX Revolving Credit Facility and the PBFX Term Loan in connection with the PBFX Offering as well as the issuance of the PBFX Senior Notes in May 2015 partially offset by the termination of our crude and feedstock supply agreement with MSCG, effective July 31, 2014.six months ended June 30, 2019. Interest expense includes interest on long-term debt including the PBFX credit facilities, costs related to the sale and leaseback of our precious metals catalyst, interest expense incurred in connection with our crude and feedstock supply agreement with Statoil, financing costs associated with the Inventory Intermediation Agreements 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 $86.0 million and $90.6 million for the six months ended June 30, 2019 and June 30, 2018, respectively (inclusive of $4.4 million and $4.0 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 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 consolidated financial statements based on PBF Energy’s allocable share of PBF LLC’s pre-tax income or loss, which was approximately 99.0% and 97.6%, on a weighted-average basis for the six months ended June 30, 2019 and 2018, respectively. 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, 2019 and 2018 was 26.2% and 26.0%, respectively.

Noncontrolling Interest— PBF Energy is the sole managing member of, and has a controlling interest in, PBF LLC. As a resultthe sole managing member of PBF LLC, PBF Energy operates and controls all of the initial public offeringbusiness 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 unit holdersunitholders of PBFX.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 consolidated statementCondensed Consolidated Statements of operationsOperations 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 unit holdersunitholders of PBFX.PBFX and by the third-party stockholders of certain of Chalmette Refining’s subsidiaries. The total noncontrolling interest on the balance sheetCondensed 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 unit holdersunitholders of PBFX.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 the six months ended June 30, 2019 and 2018 was approximately 1.0% and 2.4%, respectively. 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.


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 U.S. GAAP.GAAP (“Non-GAAP”). These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. 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-GAAPNon-GAAP measures presented include Adjusted Fully-Converted net income excluding special items, income from continuing operationsNet Income (loss) excluding special items, EBITDA excluding special items and gross refining margin excluding special items. TheSpecial items presented for the three and six months ended June 30, 2019 and June 30, 2018, respectively, relate to an LCM inventory adjustment. See “Notes to Non-GAAP Financial Measures” below for more details on all special items for the periods presented relate to a LCM adjustment. LCM is a GAAP guideline related to inventory valuation that requires inventory to be stated at the lower of cost or market. Our inventories are stated at the lower of cost or market. Cost is determined using last-in, first-out (LIFO) inventory valuation methodology, in which the most recently incurred costs are charged to cost of sales and inventories are valued at base layer acquisition costs. Market is determined based on an assessment of the current estimated replacement cost and net realizable selling price of the inventory. In periods where the market price of our inventory

44

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 a LCM adjustment is recorded to reflect the net change in the LCM inventory reserve between the prior period and the current period.disclosed. Although we believe that non-GAAPNon-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 more usefulhelpful period-over-period comparisons, such non-GAAPNon-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 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.

The following table reconciles the Adjusted Fully-Converted results of PBF Energy with its results presented in accordance with GAAP for the three and six months ended June 30, 2019 and 2018 (in millions, except share and per share amounts):
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
 2019 2018 2019 2018
Net income (loss) attributable to PBF Energy Inc. stockholders$(32.2) $272.1
 $197.0
 $302.5
Less: Income allocated to participating securities0.1
 0.2
 0.2
 0.4
Income (loss) available to PBF Energy Inc. stockholders - basic(32.3) 271.9
 196.8
 302.1
Add: Net income (loss) attributable to noncontrolling interest (1)
(0.5) 6.1
 2.7
 7.4
Less: Income tax benefit (expense) (2)
0.1
 (1.5) (0.7) (1.9)
Adjusted fully-converted net income (loss)$(32.7) $276.5
 $198.8
 $307.6
Special Items: (3)
       
Add: Non-cash LCM inventory adjustment182.0
 (158.0) (324.0) (245.7)
Add: Recomputed income taxes on special items(48.2) 41.7
 85.7
 64.9
Adjusted fully-converted net income (loss) excluding special items$101.1
 $160.2
 $(39.5) $126.8
        
Weighted-average shares outstanding of PBF Energy Inc.119,181,845
 112,875,813
 119,885,386
 111,853,774
Conversion of PBF LLC Series A Units (4)
1,206,325
 1,838,196
 1,206,325
 2,681,980
Common stock equivalents (5)
1,501,569
 1,695,264
 928,733
 1,214,173
Fully-converted shares outstanding-diluted121,889,739
 116,409,273
 122,020,444
 115,749,927
        
Diluted net income (loss) per share$(0.27) $2.37
 $1.63
 $2.66
Adjusted fully-converted net income (loss) per fully exchanged, fully diluted shares outstanding (5)
$(0.27) $2.37
 $1.63
 $2.66
Adjusted fully-converted net income (loss) excluding special items per fully exchanged, fully diluted shares outstanding (3) (5)
$0.83
 $1.38
 $(0.33) $1.10
——————————
See Notes to Non-GAAP Financial Measures.

Gross Refining Margin and Gross Refining Margin Excluding Special Items
Gross refining margin is defined as consolidated gross margin excluding refinery depreciation, refinery operating expenses,expense, and gross margin of PBFX. We believe both gross refining margin is anand gross refining margin excluding special items are important measuremeasures of operating performance and providesprovide useful information to investors because it is a betterthey are helpful metric comparison forcomparisons 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 (revenue less cost of sales)products and other) to industry refining margin benchmarks and crude oil prices as defined in the table below.
GrossNeither gross refining margin nor gross refining margin excluding special items should not be considered an alternative to consolidated gross margin, operating 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 this termthese 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:indicated (in millions, except per barrel amounts):

 Three Months Ended June 30,
 2019 2018
 $ per barrel of throughput $ per barrel of throughput
Calculation of consolidated gross margin:       
Revenues$6,560.0
 $84.40
 $7,444.1
 $94.40
Less: Cost of sales6,493.2
 83.55
 6,959.9
 88.26
Consolidated gross margin$66.8
 $0.85
 $484.2
 $6.14
Reconciliation of consolidated gross margin to gross refining margin:       
Consolidated gross margin$66.8
 $0.85
 $484.2
 $6.14
Add: PBFX operating expense28.6
 0.37
 19.1
 0.24
Add: PBFX depreciation expense8.9
 0.11
 6.9
 0.08
Less: Revenues of PBFX(82.8) (1.07) (67.4) (0.85)
Add: Refinery operating expense409.7
 5.27
 402.7
 5.11
Add: Refinery depreciation expense95.3
 1.23
 82.8
 1.05
Gross refining margin$526.5
 $6.76
 $928.3
 $11.77
Special items:       
Add: Non-cash LCM inventory adjustment (3)
182.0
 2.34
 (158.0) (2.00)
Gross refining margin excluding special items$708.5
 $9.10
 $770.3
 $9.77

 Three Months Ended September 30,
 2015 2014
 $ per barrel of throughput $ per barrel of throughput
Reconciliation of gross margin to gross refining margin:       
Gross margin$150,815
 $3.45
 $322,084
 $7.10
Less: Affiliate Revenues of PBFX(37,082) (0.85) (14,744) (0.32)
Add: Affiliate Cost of sales of PBFX1,118
 0.03
 —
 —
Add: Refinery operating expenses200,014
 4.57
 202,625
 4.41
Add: Refinery depreciation expense44,366
 1.01
 64,386
 1.41
Gross refining margin$359,231
 $8.21
 $574,351
 $12.60
Special Items:       
Add: Non-Cash LCM inventory adjustment (1)
208,313
 4.76
 —
 —
Gross refining margin excluding special items$567,544
 $12.97
 $574,351
 $12.60
 Six Months Ended June 30,
 2019 2018
 $ per barrel of throughput $ per barrel of throughput
Calculation of consolidated gross margin:       
Revenues$11,776.2
 $81.44
 $13,246.9
 $87.83
Less: Cost of sales11,284.4
 78.04
 12,601.4
 83.55
Consolidated gross margin$491.8
 $3.40
 $645.5
 $4.28
Reconciliation of consolidated gross margin to gross refining margin:       
Consolidated gross margin$491.8
 $3.40
 $645.5
 $4.28
Add: PBFX operating expense58.5
 0.40
 37.1
 0.25
Add: PBFX depreciation expense17.6
 0.12
 13.4
 0.09
Less: Revenues of PBFX(161.6) (1.12) (131.4) (0.87)
Add: Refinery operating expense863.1
 5.97
 814.1
 5.40
Add: Refinery depreciation expense189.6
 1.31
 159.6
 1.05
Gross refining margin$1,459.0
 $10.08
 $1,538.3
 $10.20
Special items:(3)
       
Add: Non-cash LCM inventory adjustment(324.0) (2.23) (245.7) (1.63)
Gross refining margin excluding special items$1,135.0
 $7.85
 $1,292.6
 $8.57
——————————
(1) During the third quarter of 2015, the Company recorded an adjustmentSee Notes to value its inventories to the lower of cost or market which resulted in a net impact of $208.3 million reflecting the change in the lower of cost or market inventory reserve from $562.9 million at June 30, 2015 to $771.3 million at September 30, 2015. The net impact of these LCM inventory adjustments are included in the Refining segment's operating income, but are excluded from the operating results presented in the table in order to make such information comparable between periods.Non-GAAP Financial Measures.


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 Nine Months Ended September 30,
 2015 2014
 $ per barrel of throughput $ per barrel of throughput
Reconciliation of gross margin to gross refining margin:       
Gross margin$686,401
 $5.26
 $746,567
 $5.89
Less: Affiliate Revenues of PBFX(101,413) (0.78) (22,526) (0.18)
Add: Affiliate Cost of sales of PBFX6,394
 0.05
 —
 —
Add: Refinery operating expenses625,542
 4.79
 682,246
 5.34
Add: Refinery depreciation expense132,093
 1.01
 125,294
 0.99
Gross refining margin$1,349,017
 $10.33
 $1,531,581
 $12.04
Special Items:       
Add: Non-Cash LCM inventory adjustment (1)81,147
 0.62
 —
 —
Gross refining margin excluding special items$1,430,164
 $10.95
 $1,531,581
 $12.04
——————————
(1) During the nine months ended September 30, 2015, the Company recorded an adjustment to value its inventories to the lower of cost or market which resulted in a net impact of $81.1 million reflecting the change in the lower of cost or market inventory reserve from $690.1 million million at December 31, 2014 to $771.3 million at September 30, 2015. The net impact of these LCM inventory adjustments are included in the Refining segment's operating income, but are excluded from the operating results presented in the table in order to make such information comparable between periods.


46

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 secured notes and other credit facilities. EBITDA, EBITDA excluding special items and Adjusted EBITDA should not be considered as alternatives to operating 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 equity-basedadjustments for items such as stock-based compensation expense, gains (losses) from certain derivative activities and contingent consideration and the non-cash change in the deferralfair value of gross profit related to the sale of certain finished products andcatalyst leases, the write down of inventory to the LCM.LCM, changes in the liability for Tax Receivable Agreement due to factors out of PBF Energy’s control such as changes in tax rates, debt extinguishment costs related to refinancing activities, 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 itstheir usefulness as a comparative measure.measures. EBITDA, EBITDA excluding special items and Adjusted EBITDA also hashave limitations as an analytical tooltools 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:
does
do not reflect depreciation expense or our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
doesdo not reflect changes in, or cash requirements for, our working capital needs;
doesdo not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;
doesdo not reflect realized and unrealized gains and losses from certain hedging activities, which may have a substantial impact on our cash flow;
doesdo not reflect certain other non-cash income and expenses; and
excludesexclude income taxes that may represent a reduction in available cash.


47

The following tables reconcile net income as reflected in ourPBF Energy’s results of operations to EBITDA, EBITDA excluding special items and Adjusted EBITDA for the periods presented:
presented (in millions):
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,		 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
  
 2015 2014 2015 2014 2019 2018 2019 2018
        
Reconciliation of net income to EBITDA:       
Net income$68,171
 $261,823
 $468,188
 $553,665
Reconciliation of net income (loss) to EBITDA and EBITDA excluding special items:Reconciliation of net income (loss) to EBITDA and EBITDA excluding special items:       
Net income (loss)Net income (loss)$(21.6) $287.7
 $219.8
 $329.5
Add: Depreciation and amortization expenseAdd: Depreciation and amortization expense48,133
 68,010
 144,401
 135,887
Add: Depreciation and amortization expense107.1
 92.3
 212.9
 178.3
Add: Interest expense, netAdd: Interest expense, net29,360
 24,855
 80,183
 76,728
Add: Interest expense, net42.1
 43.4
 81.6
 86.6
Add: Income tax (benefit) expenseAdd: Income tax (benefit) expense(10.5) 95.5
 70.0
 106.5
EBITDAEBITDA$145,664
 $354,688
 $692,772
 $766,280
EBITDA$117.1
 $518.9
 $584.3
 $700.9
Special Items:       
Special Items(3)
Special Items(3)
       
Add: Non-cash LCM inventory adjustmentAdd: Non-cash LCM inventory adjustment208,313
 —
 81,147
 —
Add: Non-cash LCM inventory adjustment182.0
 (158.0) (324.0) (245.7)
EBITDA excluding special itemsEBITDA excluding special items$353,977
 $354,688
 $773,919
 $766,280
EBITDA excluding special items$299.1
 $360.9
 $260.3
 $455.2
                
Reconciliation of EBITDA to Adjusted EBITDA:Reconciliation of EBITDA to Adjusted EBITDA:       Reconciliation of EBITDA to Adjusted EBITDA:       
EBITDAEBITDA$145,664
 $354,688
 $692,772
 $766,280
EBITDA$117.1
 $518.9
 $584.3
 $700.9
Add: Stock based compensation3,363
 2,454
 8,757
 5,377
Add: Non-cash change in fair value of catalyst lease obligations(4,994) (5,543) (8,982) (1,204)
Add: Stock-based compensationAdd: Stock-based compensation12.0
 7.9
 20.0
 13.0
Add: Net non-cash change in fair value of catalyst leasesAdd: Net non-cash change in fair value of catalyst leases(0.5) (4.1) 2.6
 (4.1)
Add: Non-cash LCM inventory adjustment (1)(3)Add: Non-cash LCM inventory adjustment (1)(3)208,313
 —
 81,147
 —
Add: Non-cash LCM inventory adjustment (1)(3)182.0
 (158.0) (324.0) (245.7)
Adjusted EBITDAAdjusted EBITDA$352,346
 $351,599
 $773,694
 $770,453
Adjusted EBITDA$310.6
 $364.7
 $282.9
 $464.1
——————————
(1) DuringSee Notes to Non-GAAP Financial Measures.

Notes to Non-GAAP Financial Measures
The following notes are applicable to the third quarter of 2015, the Company recordedNon-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’s Class A common stock.
(2)Represents an adjustment to reflect PBF Energy’s estimated annualized statutory corporate tax rate of approximately 26.5% and 26.4% for the 2019 and 2018 periods, respectively, applied to net income 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 value its inventoriesinventory valuation that mandates inventory to be stated at the lower of cost or market which resulted in a net impact of $208.3 million reflecting the change inmarket. 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 reserve from $562.9 million at June 30, 2015 to $771.3 million at September 30, 2015. During the nine months ended September 30, 2015, the Company recordeddeclines substantially, cost values of inventory may exceed market values. In such instances, we record an adjustment to write down the value its inventoriesof inventory to market value in accordance with GAAP. In subsequent periods, the lowervalue of cost or market which resulted in ainventory is reassessed and an LCM inventory adjustment is recorded to reflect the net impact of $81.1 million reflecting the change in the lower of cost or marketLCM inventory reserve from $690.1 million at December 31, 2014 to $771.3 million at September 30, 2015.between the prior period and the current period. The net impact of these LCM inventory adjustments are included in the Refining segment's operatingsegment’s income from operations, but are excluded from the operating results presented in the table below in order to make such information comparable between periods.

The following table includes the LCM inventory reserve as of each date presented (in millions):
 2019 2018
January 1,$651.8
 $300.5
March 31,145.8
 212.8
June 30,327.8
 54.8
The following table includes the corresponding impact of changes in the LCM inventory reserve on income from operations and net income (loss) for the periods presented (in millions):
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
  
 2019 2018 2019 2018
Net LCM inventory adjustment (charge) benefit in income from operations$(182.0) $158.0
 $324.0
 $245.7
Net LCM inventory adjustment (charge) benefit in net income (loss)(133.8) 116.3
 238.3
 180.8
Recomputed Income taxes on special items - The income tax impact on special items is calculated using the tax rates shown in (2) above.
(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, 2019 and 2018, respectively. Common stock equivalents exclude the effects of options, warrants and performance share units to purchase 6,833,973 and 6,012,867 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, 2019, respectively. Common stock equivalents exclude the effects of options and warrants to purchase 12,500 and 233,250 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, 2018, respectively. For periods showing a net loss, all common stock equivalents and unvested restricted stock are considered anti-dilutive.

Liquidity and Capital Resources
Overview
Our primary sources of liquidity are our cash flows from operations and borrowing availability under our credit facilities, as more fully described below. We believe that our cash flows from operations and available capital resources will be sufficient to meet our and our subsidiaries'subsidiaries capital expenditure, working capital needs, dividend payments, debt service requirements, and share repurchase program requirementsPBF Energy’s obligations under the Tax Receivable Agreement, for the next twelve months. We expectmonths, as well as to financefund the planned Torrance Acquisition with a combination of cash on hand, debt, including the proceeds from the issuance of the 7.0% Senior Secured Notes due 2023, and proceeds contributed to us in connection with PBF Energy's October 2015 Equity Offering.pending Martinez Acquisition. 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. We are in compliance as of June 30, 2019 with all of the covenants, including financial covenants, forin all of our debt agreements.
Cash Flow Analysis

48The 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 byused in operating activities was $304.9$27.4 million for the ninesix months ended SeptemberJune 30, 20152019 compared to net cash provided by operating activities of $400.9$307.9 million for the ninesix months ended SeptemberJune 30, 2014.2018. Our operating cash flows for the ninesix months ended SeptemberJune 30, 20152019 included our net income of $468.2$219.8 million, plusdepreciation and amortization of $218.4 million, deferred income taxes of $68.2 million, pension and other post-retirement benefits costs of $22.4 million, net non-cash charges relating to the change in the fair value of our inventory repurchase obligations of $53.4$35.0 million, depreciation and amortization of $151.5 million, pension and other post retirement benefits costs of $19.3 million, net non-cash benefit of $81.1 million relating to a LCM inventory adjustment and equity-basedstock-based compensation of $8.8$20.0 million, partially offset by a changechanges in the fair value of our catalyst leaseleases of $9.0$2.6 million and gainloss on sale of assets of $1.1 million.$0.8 million, partially offset by a net non-cash benefit of $324.0 million relating to an LCM inventory adjustment. In addition, net changes in working capitaloperating assets and liabilities reflected cash uses of cash of $467.3$290.6 million driven by the timing of inventory purchases, payments for accrued expenses and accounts payables and collections of accounts receivables. Our operating cash flows for the ninesix months ended SeptemberJune 30, 20142018 included our net income of $553.7$329.5 million, plusdepreciation and amortization of $182.3 million, deferred income taxes of $105.7 million, pension and other post-retirement benefits costs of $23.7 million, net non-cash charges relating to depreciation and amortization of $141.5 million, pension and other post retirement benefits costs of $16.5 million, and equity-based compensation of $5.4 million, partially offset by the change in the fair value of our inventory repurchase obligations of $31.6$2.5 million, changestock-based compensation of $13.0 million, and a loss on sale of assets of $0.7 million, partially offset by a net non-cash benefit of $245.7 million relating to an LCM inventory adjustment and changes in the fair value of our catalyst lease obligationsleases of $1.2 million, and gain on sale of assets of $0.2$4.1 million. In addition, net changes in working capitaloperating assets and liabilities reflected uses of cash of $283.1$99.7 million driven by the timing of inventory purchases, payments for accrued expenses and accounts payables and collections of accounts receivables.

Cash Flows from Investing Activities
Net cash used in investing activities was $166.9$501.9 million for the ninesix months ended SeptemberJune 30, 20152019 compared to net cash used in investing activities of $521.3$365.2 million for the ninesix months ended SeptemberJune 30, 2014.2018. The net cash flows used in investing activities for the ninesix months ended SeptemberJune 30, 20152019 was comprised of cash outflows of $206.1 million for capital expenditures, totaling $288.9 million, expenditures for refinery turnarounds of $39.7$261.9 million, and expenditures for other assets of $7.3 million, partially offset by $168.3 million in proceeds from the sale of railcars and $0.7 million of net maturities of marketable securities.$33.9 million. Net cash used in investing activities for the ninesix months ended SeptemberJune 30, 20142018 was comprised of cash outflows of $115.7 million for capital expenditures, totaling $258.9 million, expenditures for refinery turnarounds of $58.4$179.2 million, and expenditures for other assets of $13.4$12.3 million net purchases of marketable securities totaling $264.9 million as collateraland expenditures for the acquisition of Knoxville Terminals by PBFX Term Loan entered into in conjunction with the PBFX Offering, partially offset by $74.3 million in proceeds from the sale of railcars.$58.0 million.

Cash Flows from Financing Activities
Net cash provided by financing activities was $136.1 million for the six months ended June 30, 2019 compared to net cash used in financing activities was $34.2of $37.4 million for the ninesix months ended SeptemberJune 30, 2015 compared to net cash provided by financing activities of $520.8 million for2018. For the ninesix months ended SeptemberJune 30, 2014. For the nine months ended September 30, 2015,2019, net cash provided by financing activities consisted primarily of $132.5 million in net proceeds from the issuance of PBFX common units, net borrowings from the PBFX Senior NotesRevolving Credit Facility of $350.0$95.0 million, net proceeds from the Rail Facilityinsurance premium financing of $30.1$18.9 million, and net proceeds from the intercompany loan from PBF Energystock options exercised of $24.6$0.2 million, partially offset by distributions and dividends of $169.9$103.3 million, $251.3principal amortization payments of the PBF Rail Term Loan of $3.5 million, deferred financing costs and other of $1.1 million, net repaymentssettlements of PBFX revolverprecious metals catalyst leases of $1.2 million, and term loan borrowings, purchasesrepurchases of our Class A common stock in connection with tax withholding obligations upon the vesting of $8.1 million and $9.6 million for deferred financing and other costs. Forcertain restricted stock awards of $1.4 million. Additionally, during the ninesix months ended SeptemberJune 30, 2014,2019, we borrowed and repaid $1,250.0 million under our Revolving Credit Facility resulting in no net change to amounts outstanding for the six months ended June 30, 2019. Forthe six months ended June 30, 2018, net cash provided byused in financing activities consisted primarily of proceeds received fromdistributions and dividends of $91.5 million, principal amortization payments of the PBFX Offering of $341.0 million, net borrowing under the PBFXPBF Rail Term Loan of $264.9$3.4 million, borrowingrepayment of $140.1note payable of $2.4 million, net settlements of precious metals catalyst leases of $9.5 million, deferred financing costs of $13.0 million and repurchases of our common stock in connection with tax withholding obligations upon the vesting of certain restricted stock awards of $1.0 million, partially offset by net borrowings under the PBFX Revolving Credit Facility borrowing of $35.9$54.3 million, under the Rail Facilityproceeds from insurance premium financing of $17.4 million and proceeds from stock options exercised of $11.7 million.
The cash flow activity of PBF LLC for the intercompany loanperiod ended June 30, 2019 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 repayments of $91.7the affiliate note payable with PBF Energy of $0.8 million partially offsetincluded 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, 2018 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 net proceeds from the affiliate note payable with PBF Energy of $40.3 million included in cash flows from financing activities, which eliminates in consolidation at PBF Energy.
Credit Facilities
PBFX Revolving Credit Facility
On July 30, 2018, PBFX entered into the PBFX Revolving Credit Facility. The PBFX Revolving Credit Facility amended and restated the existing PBFX revolving credit facility entered into in connection with the closing of the PBFX IPO. Among other things, the PBFX Revolving Credit Facility increased the maximum commitment available to PBFX from $360.0 million to $500.0 million, and extended the maturity date to July 2023. PBFX has the ability to further increase the maximum availability by distributionsan additional $250.0 million to a total commitment of $750.0 million, subject to receiving increased commitments from lenders or other financial institutions and dividendssatisfaction of $286.3 million, purchasescertain conditions. Borrowings under the PBFX Revolving Credit Facility bear interest either at the Alternative Base Rate plus the Applicable Margin or at LIBOR Rate plus the Applicable Margin, all as defined in the PBFX Revolving Credit Agreement.

PBF Holding Revolving Credit Facility
On May 2, 2018, PBF Holding and certain of our Class A common stockwholly-owned subsidiaries, as borrowers or subsidiary guarantors, replaced the August 2014 Revolving Credit Agreement with the Revolving Credit Facility. Among other things, the Revolving Credit Facility increased the maximum commitment available to us from $2.6 billion to $3.4 billion, extended the maturity date to May 2023, and redefined certain components of $32.6 million, $15.0 million of net repayments of revolver borrowings, PBFX Offering costs of $5.0 million, and $13.9 millionthe Borrowing Base (as defined in the Revolving Credit Agreement) to make more funding available for deferred financingworking capital and other costs.

general corporate purposes. Borrowings under the Revolving Credit Facility bear interest at the Alternative Base Rate plus the Applicable Margin or at the Adjusted LIBOR Rate plus the Applicable Margin, all as defined in the Revolving Credit Agreement. In addition, an accordion feature allows for commitments of up to $3.5 billion.
Liquidity
As of SeptemberJune 30, 2015, PBF LLC's2019, our total liquidity was approximately $1,198.4$1,802.6 million, compared to total liquidity of approximately $1,109.9$1,677.4 million as of December 31, 2014. Total2018. Our total liquidity is the sum of our cash and cash equivalents plusequal to the amount of excess availability under the Third Amended and Restated Revolving Credit Agreement ("Revolving Loan"). AsFacility, which includes our cash balance at June 30, 2019. In addition, as of SeptemberJune 30, 2015 and December 31, 2014,2019 PBFX had approximately $298.5 and $49.9$244.9 million respectively, of borrowing capacity under the PBFX Revolving Credit Facility whichin comparison to $340.0 million as of December 31, 2018. The PBFX Revolving Credit Facility is available

49

to fund working capital, acquisitions, distributions, and capital expenditures and for other general corporate purposes.
In addition, PBF LLC had borrowing capacity of $82.5 million and $212.7 million under the Rail Facility to fund the acquisition of Eligible Railcars as of September 30, 2015 and December 31, 2014, respectively.

purposes incurred by PBFX.
Working Capital
WorkingPBF Energy’s working capital for PBF LLC at SeptemberJune 30, 20152019 was $914.3$1,201.2 million, consisting of $2,039.8$3,599.0 million in total current assets and $1,125.4$2,397.8 million in total current liabilities. WorkingPBF Energy’s working capital at December 31, 20142018 was $586.4$1,102.4 million, consisting of $2,053.8$3,236.9 million in total current assets and $1,467.4$2,134.5 million in total current liabilities. PBF LLC’s working capital at June 30, 2019 was $1,177.6 million, consisting of $3,598.6 million in total current assets and $2,421.0 million in total current liabilities. PBF LLC’s working capital at December 31, 2018 was $1,081.5 million, consisting of $3,235.1 million in total current assets and $2,153.6 million in total current liabilities.

Working capital has increased during the six months ended June 30, 2019 primarily as a result of the change in our LCM inventory adjustment, partially offset by capital expenditures, including turnaround costs, and dividends and distributions.
Capital Spending
Net capitalCapital spending was $167.6$501.9 million for the ninesix months ended SeptemberJune 30, 2015,2019, which primarily included turnaround costs at our Torrance, Delaware City and Paulsboro refineries, safety related enhancements and facility improvements at theour refineries. We currently expect to spend an aggregate of approximately $200.0$625.0 million to $675.0 million in net capital expenditures during 2015,2019, excluding PBFX and any potential capital expenditures related to the Chalmettepending Martinez Acquisition, for facility improvements and refinery maintenance and turnarounds.turnarounds, the majority of which were incurred during the first six months of 2019. Significant capital spending for the full year 2019, excluding PBFX, includes turnarounds of the coker at our Torrance refinery, the coker at our Delaware City refinery and the crude unit at our Paulsboro refinery, as well as expenditures to meet environmental and regulatory requirements. Capital spending plans also include strategic capital expenditures for the restart of the idled Chalmette refinery coker and the Delaware City refinery hydrogen plant. In addition, PBFX expects to spend an aggregate of approximately $30.0 million to $35.0 million in net capital expenditures during 2019.

As noted in "Business Developments", we entered into a Sale and Purchase Agreement to purchase the ownership interests of Chalmette Refining.Martinez refinery and related logistics assets. The aggregate purchase price for the ChalmetteMartinez Acquisition was $322.0will range from $900.0 million to $1.0 billion in cash, plus inventory and working capital of $233.1 million, which is subject to final valuation within ninety days of closing. The Chalmette Acquisition closedbased on November 1, 2015. The transaction was financed through a combination of cash on hand and borrowings under our existing credit facility. A determination of the acquisition-date fair values of the assets acquired and the liabilities assumed and the working capital at closing calculation is pending the completion of an independent appraisal and other evaluations.
We also entered into a Sales and Purchase Agreement to Purchase the ownership interest of the Torrance refinery, and related logistic assets. The purchase price for the Torrance Acquisition is $537.5 million in cash,date, plus inventory and working capital to be valued at closing. In addition, PBF Holding also has an obligation to make certain post-closing payments to the Seller if certain conditions are met including earn-out payments based on certain earnings thresholds of the Martinez refinery, as defined in the Sale and Purchase Agreement, for a period up to four years following the closing. The purchase price is also subject to other customary purchase price adjustments. The TorranceMartinez Acquisition is expected to close in the secondfourth quarter of 2016,2019, subject to satisfaction of customary closing conditions.conditions, including the absence of legal impediments prohibiting the Martinez Acquisition, receipt of regulatory approvals and required consents and absence of any material adverse effects. We expect to finance the transaction withthrough a combination of cash on hand debt, includingand debt.
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 and arrange for shipment. We pay for the proceedscrude when invoiced, at which time the letters of credit are lifted. We have a contract with 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 issuanceChalmette Acquisition we entered into a contract with 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 the third quarter of 2017 when PDVSA suspended deliveries due to the parties’ inability to agree to mutually acceptable payment terms. Notwithstanding the suspension, the recent U. S. sanctions imposed against PDVSA and Venezuela would prevent us from purchasing crude oil under this agreement. In connection with the closing of the 7.0% Senior Secured Notes due 2023,Torrance Acquisition, we entered into a crude supply agreement with 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 proceeds contributed to us in connection with PBF Energy's October 2015 Equity Offering.

Share Repurchases
On August 19, 2014, PBF Energy's Board of Directors authorized the repurchase of up to $200.0 million of the Company's  Series C Units, through the repurchase of PBF Energy’s Class A common stock (the "Repurchase Program"). On October 29, 2014, PBF Energy's Board of Directors approved an additional $100.0 million increase to the existing Repurchase Program. As of September 30, 2015, the Company has purchased approximately 6.05 million of the Company's Series C Units under the Repurchase Program, for a total of $150.8 million through the purchase of PBF Energy’s Class A common stock in open market transactions. As of September 30, 2015, PBF Energy has the ability to purchase an additional $149.2 million in Class A common stock under the approved Repurchase Program.
These repurchases may be madefeedstock needs independently from time to time through various methods, including open market transactions, block trades, accelerated share repurchases, privately negotiated transactions or otherwise, certain of which may be effected through Rule 10b5-1 and Rule 10b-18 plans. The timing and number of shares repurchased will depend on a variety of factors,suppliers on the spot market or through term agreements for our Delaware City and Toledo refineries.
Inventory Intermediation Agreements
On March 29, 2019, PBF Holding and its subsidiaries, DCR and PRC, entered into amendments to the Inventory Intermediation Agreements with J. Aron, pursuant to which certain terms of the existing inventory intermediation agreements were amended, including, price, capital availability, legal requirementsamong other things, pricing and economican extension of the terms. As a result of the amendments (i) the Inventory Intermediation Agreement by and market conditions.among J. Aron, PBF Energy is not obligatedHolding and DCR relating to the Delaware refinery extended the term to February 28, 2020, which term may be further extended by mutual consent of the parties to February 26, 2021 and (ii) added the PBFX East Coast Storage Facility as a location which will sell crude oil, a new product type to be included in the Products, to J. Aron by DCR.
Pursuant to each Inventory Intermediation Agreement, J. Aron continues to purchase any sharesand hold title to the Products produced by the Refineries, and delivered into the Storage Tanks. Furthermore, J. Aron agrees to sell the Products back to the Refineries as the Products are discharged out of the Storage Tanks. J. Aron has the right to store the Products purchased in tanks under the Repurchase Program,Inventory Intermediation Agreements and repurchases may be suspended or discontinued at any time without prior notice.will retain these storage rights for the term of the agreements. PBF Holding continues to market and sell independently to third parties.
At June 30, 2019, the LIFO value of crude oil, intermediates and finished products owned by J. Aron included within Inventory in our Condensed Consolidated Balance Sheets was $450.1 million. We accrue a corresponding liability for such intermediates and finished products.
Off-Balance Sheet Arrangements and Contractual Obligations and Commitments

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We have no off-balance sheet arrangements as of SeptemberJune 30, 2015,2019, other than outstanding letters of credit in the amount of approximately $152.7$283.7 million.
In March 2015, we sold 515 of our owned crude railcars and concurrently entered into a lease agreement for the same railcars. The lease agreements for the railcars have varying terms from five to seven years. We received a cash payment for the railcars of approximately $77.6 million and expect to make payments totaling $44.9 million over the term of the lease for these railcars.
In June 2015, we sold 404 of our owned crude railcars and concurrently entered into lease agreements for the same railcars. The lease agreements for the railcars have varying terms from five to six years. We received aggregate cash payments for the railcars of approximately $60.5 million and expect to make payments totaling $36.0 million over the term of the lease for these railcars.
In July 2015, we sold 131 of our owned crude railcars and concurrently entered into lease agreements for the same railcars. The lease agreements for the railcars have six year terms. We received aggregate cash payments for the railcars of approximately $19.3 million and expect to make payments totaling $11.9 million over the term of the lease for these railcars.
In August 2015, we sold 72 of our owned crude railcars and concurrently entered into lease agreements for the same railcars. The lease agreements for the railcars have six year terms. We received aggregate cash payments for the railcars of approximately $10.8 million and expect to make payments totaling $6.6 million over the term of the lease for these railcars.
During the nine months ended September 30, 2015, we entered into additional railcar leases with terms of up to 7 years. We expect to make lease payments of $38.7 million over the remaining term of these additional agreements.

Tax Receivable Agreement Obligations
We expect that the payments that we may make under the Tax Receivable Agreement will be substantial. As of June 30, 2019, PBF Energy usedhas recognized a portionliability for the Tax Receivable Agreement of $373.5 million reflecting our estimate of the proceeds from its initial public offeringundiscounted amounts that we expect to purchase PBF LLC Series A Units frompay under the membersagreement due to exchanges of PBF LLC other than PBF Energy. In addition, the members of PBF LLC other than PBF Energy may (subject to the terms of the exchange agreement) exchange their PBF LLC Series A Units for shares of PBF Energy’s Class A common stock that occurred prior to that date, and to range over the next five years from approximately $30.0 million to $65.0 million per year and decline thereafter. In addition, under certain circumstances, our obligations under the Tax Receivable Agreement may be accelerated and determined based on certain assumptions set forth therein. Assuming that the market value of PBF Energy on a one-for-one basis. As a result of both the purchase of PBF LLC Series A Units and subsequent secondary offerings and exchanges, PBF Energy is entitled to a proportionate share of our Class A common stock equals $31.30 per share (the closing price on June 30, 2019) and that LIBOR were to be 1.85%, we estimate as of June 30, 2019 that the existing tax basisaggregate amount of the assets of PBF LLC. Such transactions have resulted in increases in the tax basis of the assets of PBF LLC that otherwisethese accelerated payments would not have been available. Both this proportionate share and these increases in tax basis may reduce the amount of tax that PBF Energy would otherwise be required to pay in the future. These increases in tax basis have reduced the amount of the tax that PBF Energy would have otherwise been required to pay and may also decrease gains (or increase losses)approximately $327.2 million if triggered immediately on the future disposition of certain capital assets to the extent the tax basis is allocated to those capital assets. PBF Energy entered into a tax receivable agreement with the current and former members of PBF LLC other than PBF Energy that provides for the payment by PBF Energy to such members of 85% of the amount of the benefits, if any, that PBF Energy is deemed to realize as a result of (i) these increases in tax basis 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.date. These payment obligations are obligations of PBF Energy and not of PBF LLC or any of its subsidiaries.
subsidiaries including PBF Holding or PBFX. However, because PBF Energy expects to obtain funding for these payments by causingis a holding company with no operations of its subsidiariesown, PBF Energy’s ability to make cashpayments under the Tax Receivable Agreement is dependent upon a number of factors, including its subsidiaries’ ability to make distributions to PBF LLC, which, in turn, will distribute such amounts, generally as tax distributions, on a pro-rata basis to its owners, which as of September 30, 2015 includefor the membersbenefit of PBF LLC other thanLLC’s members, including PBF Energy, holding a 5.6% interestits ability, if necessary, to finance its obligations under the Tax Receivable Agreement and existing indebtedness which may limit PBF Energy holding a 94.4% interest. The membersEnergy’s subsidiaries’ ability to make distributions.
Future payments under the Tax Receivable Agreement by us in respect of PBF LLC other than PBF Energy may continue to reduce their ownership in PBF LLC by exchanging theirsubsequent exchanges of PBF LLC Series A Units for shares of PBF Energy Class A common stock. Such exchanges may resultstock would be in additional increasesaddition to the amounts above and are expected to be substantial. The foregoing numbers are merely estimates - the actual payments could differ materially and assume that there are no material changes in the relevant tax basis of PBF Energy’s investment in PBF LLClaw, and require PBF Energythat we earn sufficient taxable income to make increased payments underrealize all tax benefits that are subject to the tax receivable agreement. Required payments under the tax receivable agreement also mayTax Receivable Agreement. It is possible that future transactions or events could increase or become accelerated in certain circumstances, including certain changes of control.decrease the actual tax benefits realized and the corresponding Tax Receivable Agreement payments.


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Dividend and Distribution Policy
PBF Energy
With respect to dividends and distributions paid during the ninesix months ended SeptemberJune 30, 2015,2019, PBF LLC made aggregate non-tax quarterly distributions of $82.0$72.7 million, or $0.90,$0.30 per unit to its members, of which $77.3$71.9 million was distributed pro ratapro-rata to PBF Energy and the balance was distributed to its other members. PBF Energy used this $77.3$71.9 million to pay quarterly cash dividends of $0.30 per share of Class A common stock on both March 10, 2015,14, 2019 and May 27, 2015 and August 10, 2015.30, 2019. In addition, during the ninesix months ended SeptemberJune 30, 2015,2019, PBF LLC made aggregate tax distributions to its members of $186.1$54.8 million, of which $175.6$53.2 million was distributedmade to PBF Energy.
On October 29, 2015, the Board of Directors ofAugust 1, 2019, PBF Energy declaredannounced a dividend of $0.30 per share on outstanding PBF Energy Class A common stock. The dividend is payable on November 24, 2015August 30, 2019 to PBF Energy Class A common stockholders of record at the close of business on November 9, 2015. PBF Holding intends, if necessary, to make a distribution of $30.8 million toAugust 15, 2019. PBF LLC which in turn willintends to make pro-rata distributions of approximately $36.3 million, or $0.30 per unit to its members, including PBF Energy. PBF Energy, will thenwhich in turn, intends to use this distribution to fund the dividend payments to the shareholders of PBF Energy.
PBF Energy currently intends to continue to pay quarterly cash dividends of $0.30 per share on its Class A common stock. The declaration, amount and payment of this and any other 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).

As of SeptemberJune 30, 2015, PBF LLC2019, the Company had $1,096.2$1,755.3 million of unused borrowing availability, which includes PBF Holding'sHolding cash and cash equivalents of $369.4$156.8 million, under the Revolving LoanCredit Facility to fund its operations, if necessary. Accordingly, as of SeptemberJune 30, 2015,2019, there was sufficient cash and cash equivalents and borrowing capacity under itsour credit facilities available to make distributions to PBF LLC, if necessary, in order for PBF LLC to make pro ratapro-rata distributions to its members, including PBF Energy, necessary to fund in excess of one year’s cash dividend payments by PBF Energy.
Since, as described above, there was sufficient cash and cash equivalents and borrowing capacity as of September 30, 2015, PBF Holding would have been permitted under ourits debt agreements to make these distributions; however, ourits ability to continue to comply with ourits debt covenants is, to a significant degree, subject to ourits operating results, which are dependent on a number of factors outside of our control. We believe our and our subsidiaries'subsidiaries’ available cash and cash equivalents, other sources of liquidity to operate our business and operating performance provides us with a reasonable basis for our assessment that we can support PBF Energy'sour intended dividend and distribution policy.

PBF Logistics LP
PBFX has paid, and intends to continue to pay a minimum quarterly distribution of at least $0.30per unit per quarter, or $1.20 per unit on an annualized basis, which aggregates to approximately $10.4$18.9 million per quarter and approximately $41.6$75.6 million per yearon an annualized basis, based on the number of common and subordinated units outstanding as of SeptemberJune 30, 2015. 2019.
During the ninesix months ended SeptemberJune 30, 2015,2019, PBFX made quarterly cash distributions totaling $35.8$59.6 million of which $18.7$30.4 million was distributed to PBF LLC and the balance was distributed to its public unit holders.unitholders.
On October 29, 2015,August 1, 2019, the Board of Directors of PBFX'sPBFX’s general partner, PBF GP, declaredannounced a distribution of $0.39$0.515 per unit on outstanding common and subordinated units of PBFX. The distribution was paidis payable on NovemberAugust 30, 20152019 to PBFX common and subordinated unit holdersunitholders of record at the close of business on November 13, 2015.August 15, 2019.
As of SeptemberJune 30, 2015,2019, PBFX had $298.5$4.1 million outstanding letters of unused borrowing availabilitycredit and $244.9 million available under the PBFX Revolving Credit Facility and cash and cash equivalents of $18.2$20.0 million to fund its operations, if necessary. Accordingly, as of SeptemberJune 30, 2015,2019, there was sufficient cash and cash equivalents and borrowing capacity under our credit facilities available to PBFX to make distributions to unit holders.unitholders.





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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 for 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 inventory intermediationofftake agreements as well as through the use of various commodity derivative instruments.
Certain of our agreements reduce the time we are exposed to market price fluctuations. For example, our crude and feedstock supply agreement with Statoil allows us to take title to and price our crude oil at locations in close proximity to our refineries, as opposed to the crude oil origination point. The crude supply agreement with MSCG for our Toledo refinery, which terminated on July 31, 2014, allowed us to price and pay for our crude oil as it is processed at that refinery.
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 theour 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 SeptemberJune 30, 20152019 and December 31, 2014,2018, we had gross open commodity derivative contracts representing 47.918.6 million barrels and 49.37.4 million barrels, respectively, with an unrealized net gain of $22.8$19.0 million and $31.2$7.2 million, respectively. The open commodity derivative contracts as of SeptemberJune 30, 20152019 expire at various times during 2015 and 2016.2019.
We carry inventories of crude oil, intermediates and refined products (“hydrocarbon inventories”) on our balance sheet,Condensed Consolidated Balance Sheets, the values of which are subject to fluctuations in market prices. Our hydrocarbon inventories totaled approximately 19.331.8 million barrels and 18.630.5 million barrels at SeptemberJune 30, 20152019 and December 31, 2014,2018, respectively. The average cost of our hydrocarbon inventories was approximately $95.09$79.35 and $94.29$78.78 per barrel on a LIFO basis at SeptemberJune 30, 20152019 and December 31, 2014,2018, respectively, excluding the net impact of LCM inventory adjustments of approximately $771.3$327.8 million and $690.1$651.8 million, respectively. If market prices of our inventory decline to a level below theour average cost, we may be required to further 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 annually consume a total of approximately 37between 68 million and 73 million MMBTUs of natural gas amongst our three refineries.five refineries as of June 30, 2019. Accordingly, a $1.00 per MMBTU change in natural gas prices would increase or decrease our natural gas costs by approximately $37$68.0 million to $73.0 million.


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Compliance Program Price Risk
We are exposed to market risks related to the volatility in the price of Renewable Identification Numbers ("RINs")RINs required to comply with the Renewable Fuel Standard.RFS. Our overall RINs obligation is based on a percentage of our domestic shipments of on-road fuels as established by the EPA.Environmental Protection Agency (“EPA”). 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 this risk on our results of operations and cash flows we may purchase RINs when the price of these instruments is deemed favorable.

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, AB32 in California requires the state to reduce its GHG emissions to 1990 levels by 2020.
Interest Rate Risk
The maximum commitment under our Revolving Credit Facility is $3.4 billion. Borrowings under the Revolving LoanCredit Facility bear interest either at the Alternative Base Rate plus the Applicable Margin or at the Adjusted LIBOR Rate plus the Applicable Margin, all as defined in the agreement. The Applicable Margin ranges from 1.50% to 2.25% for Adjusted LIBOR Rate Loans and from 0.50% to 1.25% for Alternative Base Rate Loans, depending on the Company's debt rating.Revolving Credit Agreement. If this facility werewas fully drawn, a one percent1.0% change in the interest rate would increase or decrease our interest expense by $26.0approximately $21.5 million annually.
The PBFX Revolving Credit Facility, andwith 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. If this facility was fully drawn, a 1.0% change in the interest rate would increase or decrease our interest expense by approximately $4.2 million annually.
In addition, the PBF Rail Term Loan, bearwhich bears interest at a variable rate, and exposes us to interest rate risk.had an outstanding principal balance of $18.1 million at June 30, 2019. A 1.0% change in the interest rate associated with the borrowings outstanding under these facilities would result in a $4.5 million change inincrease or decrease our interest expense by approximately $0.2 million annually, assuming we were to borrow all $325.0 million under our PBFX Revolving Credit Facility and the current outstanding principal balance of our PBFXon the PBF Rail Term Loan was $234.2 million.
The Rail Facility bears interest at a variable rate and exposes us to interest rate risk. A 1.0% change in the interest rate associated with the borrowings outstanding under this facility would result in a $1.5 million change in our interest expense, assuming the $150.0 million available under the Rail Facility were fully drawn.remained outstanding.
We also have interest rate exposure in connection with our Statoil crude oil agreement and J. Aron Inventory Intermediation Agreements 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 will continue to closely monitor the creditworthiness of customers to whom we grant credit and establish credit limits in accordance with our credit policy.


Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures
PBF Energy and PBF LLC maintains a system of disclosure controls and procedures that is designed to provide reasonable assurance that information which is required to be disclosed is accumulated and communicated to management in a timely manner. Underconducted separate evaluations, under the supervision and with the participation of oureach company’s management, including PBF LLC'sthe principal executive officer and the principal financial officer, we have evaluatedof the effectiveness of our system ofthe disclosure controls and procedures as required by(as defined in Rule 13a-15(e) under the Securities Exchange Act Rule 13a-15(b)of 1934 as amended (the “Exchange Act”)) as of SeptemberJune 30, 2015.2019. Based on that evaluation, PBF LLC'supon these evaluations, the principal executive officer and the principal financial officer, havein each case, concluded that PBF LLC'sthe disclosure controls and procedures are effective at the reasonable assurance level.as of June 30, 2019.


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Changes in Internal Control Over Financial Reporting
ManagementThere has not identified any changesbeen no change in PBF LLC'sEnergy’s or PBF LLC’s internal control over financial reporting that occurred during the three monthsquarter ended SeptemberJune 30, 20152019 that havehas materially affected, or areis reasonably likely to materially affect itsPBF Energy’s or PBF LLC’s internal control over financial reporting.



PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Delaware City Rail Terminal and DCR West Rack are collocated with the Delaware City refinery, and are located in Delaware's coastal zone where certain activities are regulated under the Delaware Coastal Zone act. On June 14, 2013, two administrative appeals were filed by the Sierra Club and Delaware Audubon (collectively the "Appellants") regarding an air permit Delaware City Refining Company LLC ("Delaware City Refining" or "DCR") obtained to allow loading of crude oil onto barges. The appeals allege that both the loading of crude oil onto barges and the operation of the Delaware City Rail Terminal violate Delaware’s Coastal Zone Act. The first appeal is Number 2013-1 before the State Coastal Zone Industrial Control Board (the “CZ Board”), and the second appeal is before the Environmental Appeals Board (the "EAB") and appeals Secretary’s Order No. 2013-A-0020. The CZ Board held a hearing on the first appeal on July 16, 2013, and ruled in favor of Delaware City Refining and the State of Delaware and dismissed the Appellants’ appeal for lack of standing. The Appellants appealed that decision to the Delaware Superior Court, New Castle County, Case No. N13A-09-001 ALR, and Delaware City Refining and the State of Delaware filed cross-appeals. A hearing on the second appeal before the EAB, case no. 2013-06, was held on January 13, 2014, and the EAB ruled in favor of DCR and the State and dismissed the appeal for lack of jurisdiction. The Appellants also filed a Notice of Appeal with the Superior Court appealing the EAB’s decision. On March 31, 2015 the Superior Court affirmed the decisions by both the CZ Board and the EAB stating they both lacked jurisdiction to rule on the Appellants' appeal. The Appellants appealed to the Delaware Supreme Court, and, on November 5, 2015, the Supreme Court affirmed the Superior Court decision.
On July 24, 2013, the Delaware Department of Natural Resources and Environmental Control ("DNREC")DNREC issued a Notice of Administrative Penalty Assessment and Secretary’s Order to Delaware City Refining for alleged air emission violations that occurred during the re-start of the refinery in 2011 and subsequent to the re-start. The penalty assessment seeks $460,200 in penalties and $69,030 in cost recovery for DNREC’s expenses associated with investigation of the incidents. We dispute the amount of the penalty assessment and allegations made in the order, and are in discussions with DNREC to resolve this assessment in addition to other Notices of Violation (“NOVs”) and DNREC claims of noncompliance related to activities at the assessment.
AsDelaware City Refinery that have occurred since June 1, 2010, including associated Title V Permit deviations. In addition, Delaware City Refining Company has reported to DNREC that measured levels of November 1, 2015,particulate matter emissions from certain coke management facilities have exceeded applicable permit standards. Delaware City Refining Company has instituted measures to improve the performance of these systems and believes that particulate matter emissions now comply with applicable standards. Delaware City Refining Company acquired Chalmettewill conduct additional testing in late August 2019 to confirm this expectation. DNREC and Delaware City Refining Company have completed negotiations of a comprehensive settlement agreement to resolve all DNREC claims for air quality issues at the Delaware City Refinery through October 31, 2018, and for the particulate matter emission issue related to the coke management sources through the effective date of the agreement. The agreement, which is expected to be executed shortly, provides for resolution of DNREC’s claims, a penalty payment by Delaware City Refining Company of $950,000, and no admission of liability by Delaware City Refining Company with respect to the alleged air quality violations. The agreement will also result in discussionsmodification and reissuance by DNREC of certain air quality permits for the refinery to resolve claims by Delaware City Refining Company objecting to certain prior permit conditions.
The Delaware City refinery appealed a Notice of Penalty Assessment and Secretary’s Order issued in March 2017, including a $150,000 fine, alleging violation of a 2013 Secretary’s Order authorizing crude oil shipment by barge. DNREC determined that the Delaware City refinery had violated the order by failing to make timely and full disclosure to DNREC about the nature and extent of those shipments, and had misrepresented the number of shipments that went to other facilities. The Penalty Assessment and Secretary’s Order conclude that the 2013 Secretary’s Order was violated by the refinery by shipping crude oil from the Delaware City terminal to three locations other than the Paulsboro refinery, on 15 days in 2014, making a total of 17 separate barge shipments containing approximately 35.7 million gallons of crude oil in total. On April 28, 2017, the Delaware City refinery appealed the Notice of Penalty Assessment and Secretary’s Order. On March 5, 2018, Notice of Penalty Assessment was settled by DNREC, the Delaware Attorney General and Delaware City refinery for $100,000. The Delaware City refinery made no admissions with respect to the alleged violations and agreed to request a Coastal Zone Act status decision prior to making crude oil shipments to destinations other than Paulsboro. The Delaware City refinery has paid the penalty. The Coastal Zone Act status decision request was submitted to DNREC and the outstanding appeal was withdrawn as required under settlement agreement. DNREC has confirmed that Delaware City Refining Company has fully satisfied its obligations under the agreement, and therefore that the resolution of liability provided under the agreement has taken effect.

On December 28, 2016, DNREC issued the Ethanol Permit to DCR allowing the utilization of existing tanks and existing marine loading equipment at their existing facilities to enable denatured ethanol to be loaded from storage tanks to marine vessels and shipped to offsite facilities. On January 13, 2017, the issuance of the Ethanol Permit was appealed by two environmental groups. On February 27, 2017, the Coastal Zone Board held a public hearing and dismissed the appeal, determining that the appellants did not have standing. The appellants filed an appeal of the Coastal Zone Board’s decision with the Louisiana DepartmentSuperior Court on March 30, 2017. On January 19, 2018, the Superior Court rendered an Opinion regarding the decision of Environmental Quality ("LDEQ")the Coastal Zone Board to resolve self-reported deviationsdismiss the appeal of the Ethanol Permit for the ethanol project. The judge determined that the record created by the Coastal Zone Board was insufficient for the Superior Court to make a decision, and therefore remanded the case back to the Coastal Zone Board to address the deficiency in the record. Specifically, the Superior Court directed the Coastal Zone Board to address any evidence concerning whether the appellants’ claimed injuries would be affected by the increased quantity of ethanol shipments. On remand, the Coastal Zone Board met on January 28, 2019 and reversed its previous decision on standing ruling that the appellants have standing to appeal the issuance of the Ethanol Permit. The parties to the action have filed a joint motion with the Coastal Zone Board, requesting that the Board concur with the parties’ proposal to secure from the Superior Court confirmation that all rights and claims are preserved for any subsequent appeal to the Superior Court, and that the matter then be scheduled for a hearing on the merits before the Coastal Zone Board.
At the time we acquired the Toledo refinery, operations relatingEPA had initiated an investigation into the compliance of the refinery with EPA standards governing flaring pursuant to Section 114 of the Clean Air Act. On February 1, 2013, EPA issued an Amended Notice of Violation (“NOV”), and on September 20, 2013, EPA issued a NOV and Finding of Violation to Toledo refinery, alleging certain violations of the Clean Air Act Title V permit conditions, limitsat its Plant 4 and other requirementsPlant 9 flares since the acquisition of the refinery on March 1, 2011. Toledo refinery and EPA subsequently entered into tolling agreements pending settlement discussions. Although the resolution has not been finalized, the civil administrative penalty is anticipated to be approximately $645,000 including supplemental environmental projects. To the extent the administrative penalty exceeds such amount, it is not expected to be material to us.
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. Furthermore, in connection with the acquisition, we assumed responsibility for certain specified environmental matters that occurred prior to our ownership of the refinery and logistics assets, including specified incidents and/or NOVs issued by regulatory agencies in various years before our ownership, including the Southern California Air Quality Management District (“SCAQMD”) and the Division of Occupational Safety and Health of the State of California (“Cal/OSHA”).
In connection with the acquisition of the Torrance refinery and related logistics assets, we agreed to take responsibility for NOV No. P63405 that ExxonMobil had received from the SCAQMD for Title V deviations that are alleged to have occurred in 2015. On August 14, 2018, we received a letter from SCAQMD offering to settle this NOV for $515,250. On February 22, 2019, the SCAQMD reduced their settlement offer to $268,500 which the Torrance refinery accepted and paid on May 8, 2019 to resolve this NOV with the SCAQMD.
Subsequent to the acquisition, further NOVs were issued by the Company. LDEQ commenced an enforcement action against Chalmette RefiningSCAQMD, Cal/OSHA, the City of Torrance, the City of Torrance Fire Department, and the Los Angeles County Sanitation District related to alleged operational violations, emission discharges and/or flaring incidents at the refinery and the logistics assets both before and after our acquisition. EPA in November 2016 conducted a Risk Management Plan (“RMP”) inspection following the acquisition related to Torrance operations and issued preliminary findings in March 2017 concerning RMP potential operational violations. Since the EPA’s issuance of the preliminary findings in March 2017, the Company has been in substantive discussions to resolve the preliminary findings. In the course of these discussions, on November 8, 2018, EPA made an offer to settle all preliminary findings for $480,000. The Company is currently in communication with EPA to resolve the RMP preliminary findings.

EPA and the California Department of Toxic Substances Control (“DTSC”) in December 2016 conducted a Resource Conservation and Recovery Act (“RCRA”) inspection following the acquisition related to Torrance operations and also issued in March 2017 preliminary findings concerning RCRA potential operational violations. On June 14, 2014 by issuing2018, the Torrance refinery and DTSC reached settlement regarding the oil bearing materials in the form of a Consolidated Compliance Orderstipulation and Notice of Potential Penalty ("CCO/NOPP") covering deviations from 2009 and 2010. Chalmette Refining and LDEQ subsequently entered into a dispute resolution agreement, which suspends enforcementorder, wherein the Torrance refinery agreed that it would recycle or properly dispose of the CCO/NOPP while negotiations are ongoing. It is possible that LDEQ will assessoil bearing materials by the end of 2018 and pay an administrative penalty against Chalmette Refining,of $150,000. The Torrance refinery has complied with these requirements. Following this settlement, in June 2018, DTSC referred the remaining alleged RCRA violations from EPA’s and DTSC’s December 2016 inspection to the California Attorney General for final resolution. The Torrance refinery and the California Attorney General are in discussions to resolve these alleged remaining RCRA violations. Other than the $150,000 DTSC administrative penalty, no other settlement or penalty demands have been received to date with respect to any of the other NOVs, preliminary findings, or order that are in excess of $100,000. As the ultimate outcomes are uncertain, we cannot currently estimate the final amount or timing of their resolution but any such amount is not expected to behave a material impact on our financial position, results of operations or cash flows, individually or in the aggregate.
On December 5, 1990, prior to our ownership of the Chalmette refinery, the plaintiff in Adam Thomas, et al. v. Exxon Mobil Corporation and Chalmette Refining, L.L.C., filed an action on behalf of himself and potentially thousands of other individuals in St. Bernard Parish and Orleans Parish who were allegedly exposed to hydrogen sulfide and sulfur dioxide as a result of more than 100 separate flaring events that occurred between 1989 and 2010. This litigation is proceeding as a mass action with individually named plaintiffs as a result of a 2008 trial court decision, affirmed by the court of appeals that denied class certification. The plaintiffs claim to have suffered physical injuries, property damage, and other damages as a result of the releases. Plaintiffs seek to recover unspecified compensatory and punitive damages, interest, and costs. The parties are preparing for an October 2019 mini-trial of up to 10 plaintiffs, relating to as many as 5 separate flaring events that occurred between 2002 and 2007. Because of the number of potential claimants is unknown and the differing events underlying the claims, the potential amount of the claims is not determinable. It is possible that an adverse outcome may have a material adverse effect on our financial position, results of operations, or cash flows.
On February 17, 2017, in Arnold Goldstein, et al. v. Exxon Mobil Corporation, et al., we and PBF Energy Company LLC, and our subsidiaries, PBF Energy Western Region LLC and Torrance Refining Company LLC and the manager of our Torrance refinery along with Exxon Mobil Corporation 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, ultrahazardous 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 Company.ESP explosion, Exxon has 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. On March 18, 2019, the class certification hearing was held and the judge took the matter under submission. On April 1, 2019, the judge issued an order denying class certification. On April 15, 2019, Plaintiffs filed a Petition with the Ninth Circuit for Permission to Appeal the Order Denying Motion for Class Certification. The appeal is currently pending with the Ninth Circuit. On May 3, 2019, Plaintiffs filed a Motion with the Central District Court for Leave to File a Renewed Motion for Class Certification. On May 22, 2019, the judge granted Plaintiffs’ motion. Our opposition to the motion was filed on July 29, 2019. The hearing on Plaintiffs’ motion is currently scheduled for September 23, 2019. We presently believe the outcome will not have a material impact on our financial position, results of operations or cash flows.

On September 18, 2018, in Michelle Kendig and Jim Kendig, et al. v. ExxonMobil Oil Corporation, et al., PBF Energy Limited and Torrance Refining Company LLC along with ExxonMobil Oil Corporation and ExxonMobil Pipeline Company were named as defendants in a class action and representative action complaint filed on behalf of Michelle Kendig, Jim Kendig and others similarly situated. The complaint was filed in the Superior Court of the State of California, County of Los Angeles and alleges failure to authorize and permit uninterrupted rest and meal periods, failure to furnish accurate wage statements, violation of the Private Attorneys General Act and violation of the California Unfair Business and Competition Law. Plaintiffs seek to recover unspecified economic damages, statutory damages, civil penalties provided by statute, disgorgement of profits, injunctive relief, declaratory relief, interest, attorney’s fees and costs. To the extent that plaintiffs’ claims accrued prior to July 1, 2016, ExxonMobil has retained responsibility for any liabilities that would arise from the lawsuit pursuant to the agreement relating to the acquisition of the Torrance refinery and logistics assets. On October 26, 2018, the matter was removed to the Federal Court, California Central District. A mediation hearing between the parties is currently scheduled for August 23, 2019. As this matter is in the class certification phase, we cannot currently estimate the amount or the timing of its resolution. We presently believe the outcome will not have a material impact on our financial position, results of operations or cash flows.
On September 7, 2018, in Jeprece Roussell, et al. v. PBF Consultants, LLC, etal., the Plaintiff filed an action in the 19th Judicial District Court for the Parish of East Baton Rouge, alleges numerous causes of action, including wrongful death, premises liability, negligence, and gross negligence against PBF Holding Company LLC, PBFX Operating Company LLC, Chalmette Refining, L.L.C., two individual employees of the Chalmette Refinery (“the PBF Defendants”), two entities, PBF Consultants, LLC and PBF Investments, LLC that are Louisiana companies that are not associated with our companies, as well as Clean Harbors, Inc. and Clean Harbors Environmental Services, Inc. (collectively, “Clean Harbors”), Mr. Roussell’s employer. Mr. Roussell was fatally injured on March 31, 2018 while performing clay removal work activities inside a clay treating vessel located at the Chalmette Refinery. Plaintiff seeks unspecified compensatory damages for pain and suffering, past and future mental anguish, impairment, past and future economic loss, attorney’s fees and court costs. The PBF Defendants have issued a tender of defense and indemnity to Clean Harbors and its insurer pursuant to indemnity obligations contained in the associated services agreement. On September 25, 2018, the PBF Defendants filed an Answer in the state court action denying the allegations. On October 10, 2018, the PBF Defendants filed to remove the case to the United States District Court for the Middle District of Louisiana. On November 9, 2018, Plaintiff filed a motion to remand the matter back to state court and the PBF Defendants filed a response on November 30, 2018. On December 21, 2018, Plaintiff filed a motion for leave to file a reply memorandum and the reply memorandum was filed December 27, 2018. On April 15, 2019 the Federal Magistrate Judge filed a Report and Recommendation denying Plaintiff’s motion to remand and dismissing without prejudice the claims against John Sprafka, Wayne LaCombe, PBF Consultants, LLC and PBF Investments, LLC. On June 24, 2019, the Federal Judge adopted the Magistrate Judge’s Report and Recommendation denying Plaintiff’s motion to remand and dismissing without prejudice the claims against John Sprafka, Wayne LaCombe, PBF Consultants, LLC and PBF Investments, LLC. As this matter was recently filed, we cannot currently estimate the amount or the timing of its resolution. We presently believe the outcome will not have a material impact on our financial position, results of operations or cash flows.
We are subject to obligations to purchase RINs. On February 15, 2017, we received notification that EPA records indicated that PBF Holding used potentially invalid RINs that were in fact verified under EPA’s RIN Quality Assurance Program (“QAP”) by an independent auditor as QAP A RINs. Under the regulations use of potentially invalid QAP A RINs provided the user with an affirmative defense from civil penalties provided certain conditions are met. We have asserted the affirmative defense and if accepted by EPA will not be required to replace these RINs and will not be subject to civil penalties under the program. It is reasonably possible that EPA will not accept our defense and may assess penalties in these matters but any such amount is not expected to have a material impact on our financial position, results of operations or cash flows.

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.
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Item 1A.Risk Factors
There have been no material changes fromThe following risk factors supplement and/or update the risk factors previously disclosed in our Annual Report on Form 10-K for the section entitled "Risk Factors"year ended December 31, 2018:
Risks Relating to Our Business and Industry
Our announced Martinez Acquisition may not close when we expect, or at all, and may pose unforeseen risks and/or not have the benefits we expect.
On June 11, 2019, we entered into an agreement to purchase the Martinez refinery and related logistics assets. The aggregate purchase price for the Martinez Acquisition will range from $900.0 million to $1.0 billion in cash, based on closing date, plus inventory and working capital to be determined at closing. The purchase price is also subject to other customary purchase price adjustments. The Martinez Acquisition is expected to close in the Prospectus.second half of 2019, subject to satisfaction of customary closing conditions. There can be no assurance that we will complete the Martinez Acquisition under the terms set forth in the purchase agreement, or at all. We expect to finance the transaction through a combination of cash on hand and debt. The Martinez Acquisition is subject to numerous risks and uncertainties, including (i) the possibility that the announced acquisition will be delayed or will not close due to the failure of either party to satisfy the closing conditions, or for other reasons, (ii) the risk that the Martinez refinery will not be integrated into our company successfully or that expected benefits will not be realized and (iii) unforeseen liabilities associated with the Martinez Acquisition.



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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Exchange of the Company'sPBF LLC Series A Units forto PBF Energy Class A common stockCommon Stock
In the three months ended SeptemberJune 30, 2015, a total of 85,025 of the Company's2019, 10,000 PBF LLC Series A Units were exchanged for 85,02510,000 shares of PBF Energy Class A common stock in transactions exempt from registration under Section 4(2)4(a)(2) of the Securities Act. We received no other consideration in connection with theseany exchanges. No exchanges were made by any of our directors or current executive officers.
Share Repurchase Program
The Company has repurchased its Series C Units through the repurchase of PBF Energy’s Class A common stock in open market transactions. The following table summarizes PBF Energy Class A common stock repurchase activity during the three months ended September 30, 2015:


 Total number of shares purchased (1) Average price paid per share (2) Total number of share purchased as part of publicly announced plans or programs Maximum approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands)
July 1-31, 2015142,487
 $28.58
 142,487
 149,196
August 1-31, 2015—
 —
 —
 149,196
September 1-30, 2015—
 —
 —
 149,196
Total142,487
 $28.58
 142,487
 $149,196
(1) The shares purchased include only those shares that have settled as of the period end date.
(2) Average price per share excludes transaction commissions.

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
   
2.1**
 Sale and Purchase Agreement dated June 11, 2019 by and between PBF Holding Company LLC and ExxonMobilEquilon Enterprises LLC d/b/a Shell Oil Corporation and its subsidiary, Mobil Pacific Pipeline Company as of September 29, 2015.(IncorporatedProducts US (incorporated by reference to Exhibit 2.1 filed with PBF Energy Inc.’s Current Report on Form 8-K dated October 1, 2015June 11, 2019 (File No. 001-35764)).
   
10.1(2)
2.2**
 Third AmendedContribution Agreement dated as of April 24, 2019 by and Restated Employment Agreement between PBF InvestmentsEnergy Company LLC and Thomas D. O'Malley, Executive Chairman of the Board of Directors of PBF Energy Inc. as of September 8, 2015. (IncorporatedLogistics LP (incorporated by reference to Exhibit 10.12.1 filed with PBF Energy Inc.’s Current Report on Form 8-K dated September 11, 2015April 26, 2019 (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.
   
31.2*
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*
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.
   
32.2*
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.
 ——————————
*Filed herewith.
**SchedulesCertain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of theany omitted schedulesschedule or exhibit to the SEC upon request.
*Filed herewith.
(1)This exhibit should not be deemed to be "filed"“filed” for purposes of Section 18 of the Exchange Act.
(2)Indicates management compensatory plan or arrangement.

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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, theeach registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
  PBF Energy Company LLCInc.
     
DateDate:December 8, 2015August 1, 2019 By:/s/ Erik Young
    
Erik Young
Senior Vice President, Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
     

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EXHIBIT INDEX
Exhibit
Number
 DescriptionPBF Energy Company LLC
   
2.1**Date:August 1, 2019 Sale and Purchase Agreement by and between PBF Holding Company LLC and ExxonMobil Oil Corporation and its subsidiary, Mobil Pacific Pipeline Company as of September 29, 2015.(Incorporated by reference to Exhibit 2.1 filed with PBF Energy Inc.’s Current Report on Form 8-K dated October 1, 2015 (File No. 001-35764))By:/s/ Erik Young
   
10.1(2) Third Amended
Erik Young
Senior Vice President, Chief Financial Officer
(Duly Authorized Officer and Restated Employment Agreement between PBF Investments LLC and Thomas D. O'Malley, Executive Chairman of the Board of Directors of PBF Energy Inc. as of September 8, 2015. (Incorporated by reference to Exhibit 10.1 filed with PBF Energy Inc.’s Current Report on Form 8-K dated September 11, 2015 (File No. 001-35764))Principal Financial Officer)
   
31.1*Certification of Thomas J. Nimbley, Chief Executive Officer of PBF LLC 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 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 LLC 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 LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INSXBRL Instance Document.
101.SCHXBRL Taxonomy Extension Schema Document.
101.CALXBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFXBRL Taxonomy Extension Definition Linkbase Document.
101.LABXBRL Taxonomy Extension Label Linkbase Document.
101.PREXBRL Taxonomy Extension Presentation Linkbase Document.
 ——————————

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*Filed herewith.
**Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of the omitted schedules to the SEC upon request.
(1)This exhibit should not be deemed to be "filed" for purposes of Section 18 of the Exchange Act.
(2)Indicates management compensatory plan or arrangement.


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