UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
 
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2019March 31, 2020
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission File Number: 001-35764
Commission File Number: 333-206728-02

PBF ENERGY INC.
PBF ENERGY COMPANY LLC
(Exact name of registrant as specified in its charter)

Delaware45-3763855
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 [ ]

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

PBF Energy Inc.    Yes [x] No [ ]
PBF Energy Company LLC Yes [x] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
PBF Energy Inc.Large accelerated filer☑
Accelerated filer o
Non-accelerated filer☐Smaller reporting company☐Emerging growth company☐
PBF Energy Company LLCLarge accelerated filer
 ☐
Accelerated filer o
Non-accelerated filer☑Smaller reporting company☐Emerging growth company☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
PBF Energy Inc.    Yes ☐ No ☑
PBF Energy Company LLC Yes ☐ No ☑

As of July 30, 2019,May 12, 2020, PBF Energy Inc. had outstanding 119,894,441119,986,604 shares of Class A common stock and 2018 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%99.2% of the outstanding economic interest in PBF Energy Company LLC as of June 30, 2019.March 31, 2020. 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 no0 common stock outstanding.





PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2019MARCH 31, 2020
TABLE OF CONTENTS
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
4
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTSITEM 1.
PART I – FINANCIAL INFORMATION
ITEM 1.
Financial Statements (Unaudited)
PBF Energy Inc.
7
8
9
10
1211
PBF Energy Company LLC
1413
1514
1615
1716
1917
2119
ITEM 2.
5253
ITEM 3.
8386
ITEM 4.
8588
ITEM 1.
8689
ITEM 1A.
9094
ITEM 2.
9096
ITEM 6.
9197
9299



This combined Quarterly
2

EXPLANATORY NOTE

As previously disclosed in the Current Report on Form 10-Q is8-K filed by PBF Energy Inc. (“PBF Energy”) and PBF Energy Company LLC (“PBF LLC”) on May 7, 2020, the Company delayed the filing of this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (this “Form 10-Q”) due to circumstances related to the recent novel coronavirus (“COVID-19”) pandemic in reliance on the “Order under Section 36 of the Securities Exchange Act of 1934 Modifying Exemptions From the Reporting and Proxy Delivery Requirements for Public Companies” dated March 25, 2020 (Release No. 34-88465) issued by the U.S. Securities and Exchange Commission (“SEC”).

Since early March 2020, the Company has been following the recommendations of state and local health authorities to minimize the exposure risk for its employees, including suggested and mandated travel restrictions, office closures, stay-at-home orders and limitations on the availability of workforces. These restrictions have in turn caused a delay in the completion of the Form 10-Q process. In addition, the Company’s management has had to devote significant time and attention to assessing the potential impact of the COVID-19 pandemic and related events on its operations and financial position and developing operational and financial plans to address those matters, which has diverted management resources from completing the tasks necessary to file this Form 10-Q by the applicable filing due date.

This combined Quarterly Report on Form 10-Q is filed by PBF Energy and PBF LLC. Each Registrant hereto is filing on its own behalf all of the information contained in this report that relates to such Registrant. Each Registrant hereto is not filing any information that does not relate to such Registrant, and therefore makes no representation as to any such information. PBF Energy is a holding company whose primary asset is an equity interest in PBF LLC. PBF Energy is the sole managing member of, and owner of an equity interest representing approximately 99.0%99.2% of the outstanding economic interests in PBF LLC as of June 30, 2019.March 31, 2020. PBF Energy operates and controls all of the business and affairs and consolidates the financial results of PBF LLC and its subsidiaries. PBF LLC is a holding company for the companies that directly and indirectly own and operate our business. PBF Holding Company LLC (“PBF Holding”) is a wholly-owned subsidiary of PBF LLC and PBF Finance Corporation (“PBF Finance”) is a wholly-owned subsidiary of PBF Holding. As of June 30, 2019,March 31, 2020, PBF LLC also holds a 48.2% limited partner interest and a non-economic general partner interest in PBF Logistics LP (“PBFX” or the “Partnership”), a publicly traded master limited partnership.partnership (“MLP”). PBF Energy, through its ownership of PBF LLC, consolidates the financial results of PBFX and its subsidiaries and records a noncontrolling interest in its consolidated financial statements representing the economic interests of PBFX’s unit holdersunitholders other than PBF LLC. Collectively, PBF Energy and its consolidated subsidiaries, including PBF LLC, PBF Holding, and PBFX are referred to hereinafter as the “Company” unless the context otherwise requires. Discussions or areas of this report that either apply only to PBF Energy or PBF LLC are clearly noted in such sections. Unless the context indicates otherwise, the terms “we,” “us,” and “our” refer to both PBF Energy and PBF LLC and its consolidated subsidiaries.

3

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains certain “forward-looking statements”, as defined in the Private Securities Litigation Reform Act of 1995 (“PSLRA”), of expected future developments that involve risks and uncertainties. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates” or similar expressions that relate to our strategy, plans or intentions. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results or to our strategies, objectives, intentions, resources and expectations regarding future industry trends are forward-looking statements made under the safe harbor provisions of the PSLRA except to the extent such statements relate to the operations of a partnership or limited liability company. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based uponon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results.
Important factors that could cause actual results to differ materially from our expectations, which we refer to as “cautionary statements,” are disclosed under “Management's Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q, the Annual Report on Form 10-K for the year ended December 31, 20182019 of PBF Energy and PBF LLC, which we refer to as our 20182019 Annual Report on Form 10-K, and in our other filings with the U.S. Securities and Exchange Commission (“SEC”).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:
•the effect of the COVID-19 pandemic and related governmental and consumer responses on our business, financial condition and results of operations;
•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 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 (as defined in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”) with J. Aron & Company, a subsidiary of The Goldman Sachs Group, Inc. (“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 (the “J. Aron Products”) located at the Company’s storage tanks at the Paulsboro and Delaware City and Paulsboro refineries (the “East Coast Refineries”) and at PBFX’s assets acquired from
4

Crown Point International, LLC in October 2018 (together with the PBFXCompany’s storage tanks at the East Coast Refineries, the “J. Aron Storage FacilityTanks”) upon termination of these agreements (all terms as defined in “Note 4 - Inventories” of our Notes to Condensed Consolidated Financial Statements);agreements;
•restrictive covenants in our indebtedness that may adversely affect our operational flexibility;
•payments by PBF Energy to the current and former holders of PBF LLC Series A Units and PBF LLC Series B Units under PBF Energy’s Taxtax receivable agreement entered with the PBF LLC Series A and PBF LLC Series B unitholders (the “Tax Receivable Agreement (as defined in “Note 7 - Commitments and Contingencies” of our Notes to Condensed Consolidated Financial Statements)Agreement”) for certain tax benefits we may claim;


•our assumptions regarding payments arising under PBF Energy’s Tax Receivable Agreement and other arrangements relating to our organizational structure are subject to change due to various factors, including, among other factors, the timing of exchanges of PBF LLC Series A Units for shares of PBF Energy Class A common stock as contemplated by the Tax Receivable Agreement, the price of PBF Energy Class A common stock at the time of such exchanges, the extent to which such exchanges are taxable, and the amount and timing of our income;
•our expectations and timing with respect to our acquisition activity and whether such acquisitions are accretive or dilutive to shareholders;
•the impact of disruptions to crude or feedstock supply to any of our refineries, including disruptions due to problems at PBFX or with third-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 newlyrecently enacted federal income tax legislation on our business;
•the threat of cyber-attacks;
•our increased dependence on technology;
•the effectiveness of our crude oil sourcing strategies, including our crude by rail strategy and related commitments;
• adverse impacts related to legislation by the federal government lifting the restrictions on exporting U.S. crude oil;
•adverse impacts from changes in our regulatory environment, such as the effects of compliance with the California Global Warming Solutions Act (also referred to as “AB32”), or from actions taken by environmental interest groups;
•market risks related to the volatility in the price of Renewable Identification Numbers (“RINs”) required to comply with the Renewable Fuel Standards and greenhouse gas (“GHG”) emission credits required to comply with various GHG emission programs, such as AB32;
•our ability to consummate the pending Martinez Acquisition (as defined in “ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of 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 Martinez Acquisitionrefinery and any other acquisitions into our business and to realize the benefits from such acquisitions;
•unforeseen liabilities associated with the Martinez Acquisition (as defined in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations) and any other acquisitions;
•risk associated with the operation of PBFX as a separate, publicly-traded entity;
•potential tax consequences related to our investment in PBFX; and
•any decisions we continue to make with respect to our energy-related logistics assets that may be transferred to PBFX.

5

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.

6

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements

PBF ENERGY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions, except share and per share data)
March 31,
2020		December 31,
2019
ASSETS
Current assets:
Cash and cash equivalents (PBFX: $116.0 and $35.0, respectively)$722.1  $814.9  
Accounts receivable439.1  835.0  
Inventories986.5  2,122.2  
Assets held for sale58.4  —  
Prepaid and other current assets103.6  51.6  
Total current assets2,309.7  3,823.7  
Property, plant and equipment, net (PBFX: $850.0 and $854.6, respectively)4,995.3  4,023.2  
Deferred tax assets324.4  —  
Operating lease right of use assets330.5  306.4  
Financing lease right of use assets84.9  24.2  
Deferred charges and other assets, net1,089.3  954.9  
Total assets$9,134.1  $9,132.4  
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$437.1  $601.4  
Accrued expenses1,492.6  1,815.6  
Deferred revenue36.7  20.1  
Current operating lease liabilities79.5  72.1  
Total current liabilities2,045.9  2,509.2  
Long-term debt (PBFX: $902.5 and $802.1, respectively)3,546.1  2,064.9  
Payable to related parties pursuant to Tax Receivable Agreement385.1  373.5  
Deferred tax liabilities44.8  96.9  
Long-term operating lease liabilities249.4  233.1  
Long-term financing lease liabilities73.2  18.4  
Other long-term liabilities310.1  250.9  
Total liabilities6,654.6  5,546.9  
Commitments and contingencies (Note 9)
Equity:
PBF Energy Inc. equity
Class A common stock, $0.001 par value, 1,000,000,000 shares authorized, 119,986,604 shares outstanding at March 31, 2020, 119,804,971 shares outstanding at December 31, 20190.1  0.1  
Class B common stock, $0.001 par value, 1,000,000 shares authorized, 18 shares outstanding at March 31, 2020, 20 shares outstanding at December 31, 2019—  —  
Preferred stock, $0.001 par value, 100,000,000 shares authorized, no shares outstanding at March 31, 2020 and December 31, 2019—  —  
Treasury stock, at cost, 6,455,792 shares outstanding at March 31, 2020 and 6,424,787 shares outstanding at December 31, 2019(165.7) (165.7) 
Additional paid in capital2,825.6  2,812.3  
Retained earnings (Accumulated deficit)(700.6) 401.2  
Accumulated other comprehensive loss(11.1) (8.3) 
Total PBF Energy Inc. equity1,948.3  3,039.6  
Noncontrolling interest531.2  545.9  
Total equity2,479.5  3,585.5  
Total liabilities and equity$9,134.1  $9,132.4  

See notes to condensed consolidated financial statements.
7
 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 March 31,
20202019
Revenues$5,277.5  $5,216.2  
Cost and expenses:
Cost of products and other5,963.3  4,209.2  
Operating expenses (excluding depreciation and amortization expense as reflected below)531.7  479.0  
Depreciation and amortization expense116.7  103.0  
Cost of sales6,611.7  4,791.2  
General and administrative expenses (excluding depreciation and amortization expense as reflected below)82.5  57.6  
Depreciation and amortization expense2.9  2.8  
Change in fair value of contingent consideration(52.8) —  
Total cost and expenses6,644.3  4,851.6  
Income (loss) from operations(1,366.8) 364.6  
Other income (expense):
Interest expense, net(49.2) (39.5) 
Change in Tax Receivable Agreement liability(11.6) —  
Change in fair value of catalyst obligations11.7  (3.1) 
Debt extinguishment costs(22.2) —  
Other non-service components of net periodic benefit cost1.0  (0.1) 
Income (loss) before income taxes(1,437.1) 321.9  
Income tax (benefit) expense(374.6) 80.5  
Net income (loss)(1,062.5) 241.4  
Less: net income attributable to noncontrolling interests3.4  12.2  
Net income (loss) attributable to PBF Energy Inc. stockholders$(1,065.9) $229.2  
Weighted-average shares of Class A common stock outstanding
Basic119,380,210  119,880,915  
Diluted119,380,210  122,175,744  
Net income (loss) available to Class A common stock per share:
Basic$(8.93) $1.91  
Diluted$(8.93) $1.89  

See notes to condensed consolidated financial statements.
8
 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 March 31,
20202019
Net income (loss)$(1,062.5) $241.4  
Other comprehensive income (loss):
Unrealized gain on available for sale securities0.6  —  
Net (loss) gain on pension and other post-retirement benefits(3.4) 0.2  
Total other comprehensive income (loss)(2.8) 0.2  
Comprehensive income (loss)(1,065.3) 241.6  
Less: comprehensive income attributable to noncontrolling interests3.4  12.1  
Comprehensive income (loss) attributable to PBF Energy Inc. stockholders$(1,068.7) $229.5  

See notes to condensed consolidated financial statements.
9
 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 Deficit)		Accumulated
Other
Comprehensive
Income (Loss)		Treasury StockNoncontrolling
Interest		Total
Equity
 SharesAmountSharesAmountSharesAmount
Balance, December 31, 2019119,804,971  $0.1  20  $—  $2,812.3  $401.2  $(8.3) 6,424,787  $(165.7) $545.9  $3,585.5  
Comprehensive Income (loss)—  —  —  —  —  (1,065.9) (2.8) —  —  3.4  (1,065.3) 
Exercise of warrants and options7,500  —  —  0.2  —  —  —  —  —  0.2  
Taxes paid for net settlement of equity-based compensation—  —  —  —  (0.9) —  —  —  —  —  (0.9) 
Distributions to PBF Energy Company LLC members—  —  —  —  —  —  —  —  —  (0.4) (0.4) 
Distributions to PBF Logistics LP public unitholders—  —  —  —  —  —  —  —  —  (17.1) (17.1) 
Stock-based compensation1,861  —  —  —  6.8  —  —  —  —  1.3  8.1  
Dividends ($0.30 per common share)—  —  —  —  —  (35.9) —  —  —  —  (35.9) 
Exchange of PBF Energy Company LLC Series A Units for PBF Energy Class A common stock203,277  —  (2) —  1.9  —  —  —  —  (1.9) —  
Treasury stock purchases(31,005) —  —  —  —  —  —  31,005  —  —  —  
Other—  —  —  —  5.3  —  —  —  —  —  5.3  
Balance, March 31, 2020119,986,604  $0.1  18  $—  $2,825.6  $(700.6) $(11.1) 6,455,792  $(165.7) $531.2  $2,479.5  
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  

See notes to condensed consolidated financial statements.
10
 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)
Three Months Ended March 31,
20202019
Cash flows from operating activities:
Net income (loss)$(1,062.5) $241.4  
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization123.0  108.6  
Stock-based compensation9.6  8.0  
Change in fair value of catalyst obligations(11.7) 3.1  
Deferred income taxes(374.8) 78.5  
Change in Tax Receivable Agreement liability11.6  —  
Non-cash change in inventory repurchase obligations(67.9) 14.2  
Non-cash lower of cost or market inventory adjustment1,285.6  (506.0) 
Change in fair value of contingent consideration(52.8) —  
Debt extinguishment costs22.2  —  
Pension and other post-retirement benefit costs13.1  11.2  
Changes in operating assets and liabilities:
Accounts receivable396.0  (151.2) 
Inventories74.3  (194.7) 
Prepaid and other current assets(46.6) (69.5) 
Accounts payable(199.9) 46.1  
Accrued expenses(361.4) 224.5  
Deferred revenue16.5  46.4  
Other assets and liabilities(10.1) (10.5) 
Net cash used in operating activities$(235.8) $(149.9) 
Cash flows from investing activities:
Expenditures for property, plant and equipment(65.3) (105.4) 
Expenditures for deferred turnaround costs(69.1) (133.0) 
Expenditures for other assets(4.6) (22.2) 
Acquisition of Martinez Refinery(1,176.2) —  
Net cash used in investing activities$(1,315.2) $(260.6) 

See notes to condensed consolidated financial statements.
11
 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)(continued)
(unaudited, in millions)
Three Months Ended March 31,
20202019
Cash flows from financing activities:
Distributions to PBF Energy Company LLC members other than PBF Energy$(0.4) $(0.4) 
Distributions to PBFX public unitholders(16.7) (12.8) 
Dividend payments(35.9) (35.9) 
Proceeds from 2028 6.00% Senior Notes1,000.0  —  
Redemption of 2023 7.00% Senior Notes(517.5) —  
Proceeds from revolver borrowings1,150.0  575.0  
Repayments of revolver borrowings(250.0) (325.0) 
Proceeds from PBFX revolver borrowings100.0  16.0  
Repayments of PBFX revolver borrowings—  (12.0) 
Repayments of PBF Rail Term Loan(1.8) (1.7) 
Proceeds from insurance premium financing45.3  30.2  
Payments on finance leases(2.6) —  
Taxes paid for net settlement of stock-based compensation(0.9) (1.0) 
Proceeds from stock options exercised0.2  0.1  
Purchase of treasury stock—  (1.0) 
Deferred financing costs and other(11.5) —  
Net cash provided by financing activities$1,458.2  $231.5  
Net decrease in cash and cash equivalents(92.8) (179.0) 
Cash and cash equivalents, beginning of period814.9  597.3  
Cash and cash equivalents, end of period$722.1  $418.3  
Supplemental cash flow disclosures
Non-cash activities:
Accrued and unpaid capital expenditures$125.7  $119.3  
Assets acquired under operating leases47.6  267.0  
Assets acquired under finance leases63.5  —  
Fair value of the Martinez Contingent Consideration at acquisition77.3  —  
Cash paid during the period for:
Interest (net of capitalized interest of $3.4 million and $4.3 million in 2020 and 2019, respectively)$16.5  $5.9  
Income taxes0.1  —  

See notes to condensed consolidated financial statements.
12
 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 millions, except unit and per unit data)
March 31,
2020		December 31,
2019
ASSETS
Current assets:
Cash and cash equivalents (PBFX: $116.0 and $35.0, respectively)$721.8  $813.7  
Accounts receivable439.1  834.0  
Inventories986.5  2,122.2  
Assets held for sale58.4  —  
Prepaid and other current assets103.6  51.6  
Total current assets2,309.4  3,821.5  
Property, plant and equipment, net (PBFX: $850.0 and $854.6, respectively)4,995.3  4,023.2  
Operating lease right of use assets330.5  306.4  
Financing lease right of use assets84.9  24.2  
Deferred charges and other assets, net1,088.3  953.8  
Total assets$8,808.4  $9,129.1  
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$436.7  $601.4  
Accrued expenses1,527.0  1,846.2  
Deferred revenue36.7  20.1  
Current operating lease liabilities79.5  72.1  
Total current liabilities2,079.9  2,539.8  
Long-term debt (PBFX: $902.5 and $802.1, respectively)3,546.1  2,064.9  
Affiliate note payable377.5  376.4  
Deferred tax liabilities45.6  31.4  
Long-term operating lease liabilities249.4  233.1  
Long-term financing lease liabilities73.2  18.4  
Other long-term liabilities310.1  250.9  
Total liabilities6,681.8  5,514.9  
Commitments and contingencies (Note 9)
Series B Units, 1,000,000 issued and outstanding, no par or stated value5.1  5.1  
PBF Energy Company LLC equity:
Series A Units, 1,019,916 and 1,215,317 issued and outstanding at March 31, 2020 and December 31, 2019, no par or stated value18.0  20.0  
Series C Units, 120,007,835 and 119,826,202 issued and outstanding at March 31, 2020 and December 31, 2019, no par or stated value2,197.3  2,189.4  
Treasury stock, at cost(165.7) (165.7) 
Retained earnings (Accumulated deficit)(354.1) 1,142.4  
Accumulated other comprehensive loss(8.9) (9.7) 
Total PBF Energy Company LLC equity1,686.6  3,176.4  
Noncontrolling interest434.9  432.7  
Total equity2,121.5  3,609.1  
Total liabilities, Series B units and equity$8,808.4  $9,129.1  

See notes to condensed consolidated financial statements.
13
 June 30,
2019		 December 31,
2018
ASSETS   
Current assets:   
Cash and cash equivalents (PBFX: $20.0 and $19.9, respectively)$203.7
 $596.0
Accounts receivable989.8
 718.2
Inventories2,314.4
 1,865.8
Prepaid and other current assets90.7
 55.1
Total current assets3,598.6
 3,235.1
    
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, net1,052.6
 897.1
Total assets$8,807.2
 $7,953.1
LIABILITIES AND EQUITY   
Current liabilities:   
Accounts payable$444.2
 $488.4
Accrued expenses1,870.0
 1,642.7
Deferred revenue25.3
 20.1
Current operating lease liabilities80.2
 —
Current debt1.3
 2.4
Total current liabilities2,421.0
 2,153.6
    
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 liabilities279.7
 277.2
Total liabilities5,299.7
 4,728.6
    
Commitments and contingencies (Note 7)   
    
Series B Units, 1,000,000 issued and outstanding, no par or stated value5.1
 5.1
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(23.2) (23.9)
Total PBF Energy Company LLC equity3,069.4
 2,759.6
Noncontrolling interest433.0
 459.8
Total equity3,502.4
 3,219.4
Total liabilities, Series B units and equity$8,807.2
 $7,953.1


PBF ENERGY COMPANY LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions)
Three Months Ended March 31,
20202019
Revenues$5,277.5  $5,216.2  
Cost and expenses:
Cost of products and other5,963.3  4,209.2  
Operating expenses (excluding depreciation and amortization expense as reflected below)531.7  479.0  
Depreciation and amortization expense116.7  103.0  
Cost of sales6,611.7  4,791.2  
General and administrative expenses (excluding depreciation and amortization expense as reflected below)82.5  57.3  
Depreciation and amortization expense2.9  2.8  
Change in fair value of contingent consideration(52.8) —  
Total cost and expenses6,644.3  4,851.3  
Income (loss) from operations(1,366.8) 364.9  
Other income (expense):
Interest expense, net(51.7) (41.5) 
Change in fair value of catalyst obligations11.7  (3.1) 
Debt extinguishment costs(22.2) —  
Other non-service components of net periodic benefit cost1.0  (0.1) 
Income (loss) before income taxes(1,428.0) 320.2  
Income tax expense (benefit)14.2  (7.2) 
Net income (loss)(1,442.2) 327.4  
Less: net income attributable to noncontrolling interests18.0  9.0  
Net income (loss) attributable to PBF Energy Company LLC$(1,460.2) $318.4  

See notes to condensed consolidated financial statements.
14
 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)53.2
 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


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

Three Months Ended March 31,
20202019
Net income (loss)$(1,442.2) $327.4  
Other comprehensive income:
Unrealized gain on available for sale securities0.6  —  
Net gain on pension and other post-retirement benefits0.2  0.2  
Total other comprehensive income0.8  0.2  
Comprehensive income (loss)(1,441.4) 327.6  
Less: comprehensive income attributable to noncontrolling interests18.0  9.0  
Comprehensive income (loss) attributable to PBF Energy Company LLC$(1,459.4) $318.6  

See notes to condensed consolidated financial statements.
15
 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)
 
Series ASeries CAccumulated
Other
Comprehensive Income (Loss)		Retained
Earnings (Accumulated Deficit)		Noncontrolling
Interest		Treasury StockTotal Member’s
Equity
UnitsAmountUnitsAmount
Balance, December 31, 20191,215,317  $20.0  119,826,202  $2,189.4  $(9.7) $1,142.4  $432.7  $(165.7) $3,609.1  
Comprehensive Income (loss)—  —  —  —  0.8  (1,460.2) 18.0  —  (1,441.4) 
Exercise of Series A warrants and options, net7,876  (0.1) 7,500  (0.8) —  —  —  —  (0.9) 
Exchange of Series A units for PBF Energy Class A common stock(203,277) (1.9) 203,277  1.9  —  —  —  —  —  
Distribution to members—  —  —  —  —  (36.3) (17.1) —  (53.4) 
Stock-based compensation—  —  1,861  6.8  —  —  1.3  —  8.1  
Treasury stock purchases—  —  (31,005) —  —  —  —  —  —  
Balance, March 31, 20201,019,916  $18.0  120,007,835  $2,197.3  $(8.9) $(354.1) $434.9  $(165.7) $2,121.5  
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, net—  —  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  

See notes to condensed consolidated financial statements.
16
 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 millions)
Three Months Ended March 31,
20202019
Cash flows from operating activities:
Net income (loss)$(1,442.2) $327.4  
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization123.0  108.6  
Stock-based compensation9.6  8.0  
Change in fair value of catalyst obligations(11.7) 3.1  
Deferred income taxes14.2  (7.2) 
Non-cash change in inventory repurchase obligations(67.9) 14.2  
Non-cash lower of cost or market inventory adjustment1,285.6  (506.0) 
Change in fair value of contingent consideration(52.8) —  
Debt extinguishment costs22.2  —  
Pension and other post-retirement benefit costs13.1  11.2  
Changes in operating assets and liabilities:
Accounts receivable394.9  (151.2) 
Inventories74.3  (194.7) 
Prepaid and other current assets(46.6) (70.0) 
Accounts payable(200.2) 46.1  
Accrued expenses(357.7) 225.2  
Deferred revenue16.5  46.4  
Other assets and liabilities(10.1) (10.5) 
Net cash used in operating activities$(235.8) $(149.4) 
Cash flows from investing activities:
Expenditures for property, plant and equipment(65.3) (105.4) 
Expenditures for deferred turnaround costs(69.1) (133.0) 
Expenditures for other assets(4.6) (22.2) 
Acquisition of Martinez Refinery(1,176.2) —  
Net cash used in investing activities$(1,315.2) $(260.6) 
See notes to condensed consolidated financial statements.
17
 Six Months Ended 
 June 30,
 2019 2018
Cash flows from operating activities:   
Net income$291.5
 $437.4
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 taxes(5.3) (4.7)
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(35.6) (1.8)
Accounts payable(33.5) 61.7
Accrued expenses202.0
 2.4
Deferred revenue5.2
 (4.1)
Other assets and liabilities(28.8) (14.2)
Net cash (used in) provided by operating activities$(25.5) $286.8
    
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 COMPANY LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)(continued)
(unaudited, in millions)
Three Months Ended March 31,
20202019
Cash flows from financing activities:
Distributions to PBF Energy Company LLC members$(36.3) $(36.3) 
Distributions to PBFX public unitholders(16.7) (12.8) 
Proceeds from 2028 6.00% Senior Notes1,000.0  —  
Redemption of 2023 7.00% Senior Notes(517.5) —  
Proceeds from revolver borrowings1,150.0  575.0  
Repayments of revolver borrowings(250.0) (325.0) 
Proceeds from PBFX revolver borrowings100.0  16.0  
Repayments of PBFX revolver borrowings—  (12.0) 
Repayments of PBF Rail Term Loan(1.8) (1.7) 
Proceeds from insurance premium financing45.3  30.2  
Payments on finance leases(2.6) —  
Affiliate note payable with PBF Energy Inc.1.1  (0.1) 
Taxes paid for net settlement of stock-based compensation—  (1.0) 
Repurchase of treasury stock—  (1.0) 
Deferred financing costs and other(12.4) —  
Net cash provided by financing activities1,459.1  231.3  
Net decrease in cash and cash equivalents(91.9) (178.7) 
Cash and cash equivalents, beginning of period813.7  596.0  
Cash and cash equivalents, end of period$721.8  $417.3  
Supplemental cash flow disclosures
Non-cash activities:
Accrued and unpaid capital expenditures$125.7  $119.3  
Assets acquired under operating leases47.6  267.0  
Assets acquired under finance leases63.5  —  
Fair value of the Martinez Contingent Consideration at acquisition77.3  —  
Cash paid during the period for:
Interest (net of capitalized interest of $3.4 million and $4.3 million in 2020 and 2019, respectively)$16.5  $5.9  

See notes to condensed consolidated financial statements.
18
 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
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION
Description of the Business
PBF Energy Inc. (“PBF Energy”) was formed as a Delaware corporation on November 7, 2011 and is the sole managing member of PBF Energy Company LLC (“PBF 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 911 - Equity”).
PBF Energy holds a 99.0%99.2% economic interest in PBF LLC as of June 30, 2019March 31, 2020 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%0.8% 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,March 31, 2020, PBF Energy held 119,915,672120,007,835 PBF LLC Series C Units and the members of PBF LLC other than PBF Energy held 1,206,3251,019,916 PBF LLC Series A Units.
PBF LLC, together with its consolidated subsidiaries, owns and operates oil refineries and related facilities in North America. PBF Holding Company LLC (“PBF Holding”) is a wholly-owned subsidiary of PBF LLC. PBF 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” or “DCR”), Chalmette Refining, L.L.C. (“Chalmette Refining”), PBF Energy Western Region LLC, (“PBF Western Region”), Torrance Refining Company LLC, (“Torrance Refining”) and Torrance Logistics Company LLC and Martinez Refining Company LLC are PBF LLC’s principal operating subsidiaries and are all wholly-owned subsidiaries of PBF Holding. Discussions or areas of the Notes to Condensed Consolidated Financial Statements that either apply only to PBF Energy or PBF LLC are clearly noted in such footnotes.
As of June 30, 2019,March 31, 2020, 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 911 - Equity”). Collectively, PBF Energy and its consolidated subsidiaries, including PBF LLC, PBF Holding, PBF GP and PBFX are referred to hereinafter as the “Company” unless the context otherwise requires.
Substantially all of the Company’s operations are in the United States. The Company operates in two2 reportable business segments: Refining and Logistics. The Company’s 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 MLP that was formed to operate logistics assets such as crude oil and refined petroleum products terminals, pipelines and storage facilities. The Logistics 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 flows.
19
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Basis of Presentation
The unaudited condensed consolidated financial information furnished herein reflects all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, considered necessary for a fair presentation of the financial position and the results of operations and cash flows of the Company for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These interim Condensed Consolidated Financial Statements should be read in conjunction with the PBF Energy Inc. and PBF Energy Company LLC financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2018.2019. The results of operations for the three and six months ended June 30, 2019March 31, 2020 are not necessarily indicative of the results to be expected for the full year.
In 2019,Reclassification
As of March 31, 2020, Financing lease right-of-use assets and liabilities, previously included in Deferred charges and other assets, net and Other long term liabilities, respectively, in the Condensed Consolidated Balance Sheets, are disclosed as separate line items in the Condensed Consolidated Financial Statements. Certain of these amounts previously reported in the Company's Condensed Consolidated Financial Statements and those respective footnotes for prior periods have been reclassified to conform to the 2020 presentation.
Interim Impairment Assessment
The global crisis resulting from the spread of the recent novel coronavirus (“COVID-19”) has had a substantial impact on the economy and overall consumer demand for energy and hydrocarbon products. As a result of the significant decrease in PBF Energy’s stock price as of the end of the quarter and noticeable reduction in demand for the Company’s products, the Company has changed its presentation from thousands to millions,determined an impairment triggering event had occurred. As such, the Company performed an interim impairment assessment on certain long-lived assets as applicable, and asof March 31, 2020. As a result any necessary rounding adjustments have been madeof the interim impairment test, the Company concluded that the carrying values of its long-lived assets were not impaired when comparing the carrying value of the long-lived assets to prior year disclosed amounts.the estimated undiscounted future cash flows expected to result from use of the assets over their remaining estimated useful life.

Recently Adopted Accounting GuidancePronouncements
In FebruaryJune 2016, the FinancialFASB issued Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases2016-13, “Financial Instruments-Credit Losses” (Topic 842)”326), Measurement of Credit Losses on Financial Instruments (“ASC 842”) to increase the transparency and comparability of leases. ASU 842 supersedes the lease accounting guidance in ASC 840 - “Leases” (“ASC 840”2016-13”). ASC 842This guidance amends the guidance on measuring credit losses on financial assets held at amortized cost. ASU 2016-13 requires lessees to recognize a lease liabilitythe measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and a corresponding lease assetreasonable and supportable forecasts. This guidance is effective for virtually all lease contracts. It also requires additional disclosures about leasing arrangements.fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. 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. 2017-12, “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 cash flow and fair value hedge accounting with risk management activities in the consolidated financial statements. The amendments expand the ability to hedge nonfinancial and financial risk components, reduce complexity in fair value hedges of interest rate risk, eliminate the requirement to separately measure and report hedge ineffectiveness, and eases certain hedge effectiveness assessment requirements. The guidance in ASU 2017-12 was applied using a modified retrospective approach. The guidance in ASU 2017-12 also provided transition relief to make it easier for entities to apply certain amendments to existing hedges (including fair value hedges) where the hedge documentation needs to be modified. 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 did2020. The adoption of this ASU does not have a materialcurrently impact on itsthe Company’s Condensed Consolidated Financial Statements andStatements. Refer to “Note 4 - Current Expected Credit Losses” for further disclosure related disclosures.to our adoption of this pronouncement.
20
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Recently Issued Accounting Pronouncements
In June 2018,March 2020, the FASB issued ASU No. 2018-07, “Compensation - Stock Compensation2020-04, Reference Rate Reform (Topic 718)848): 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 result, non-employee share-based transactions will be measured by estimating the fair valueFacilitation of the equity instruments at the grant date, taking into consideration the probabilityeffects 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”).reference rate reform on financial reporting. The Company adopted the amendments in this ASU provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU are elective and apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference London Interbank Offering Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The amendments in this ASU are effective January 1, 2019, which did not havefor all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by topic or industry subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a materialdate within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. The Company is currently evaluating the impact of this new standard on its Condensed Consolidated Financial Statements and related disclosures.
In August 2018,December 2019, the FASB issued ASU 2018-15, “Intangibles-Goodwill2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, as part of its overall simplification initiative to reduce costs and Other-Internal-Use Software” (Subtopic 350-40) (“complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Amendments include removal of certain exceptions to the general principles of ASC 740, Income taxes, and simplification in several other areas. The amendments in this 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 isare effective for fiscal years beginningending after December 15, 2019 and2020, for interim periods within those fiscal years, with earlypublic business entities. Early adoption permitted. This guidance should be applied on either a retrospective or prospective basis.is permitted for all entities. The Company has elected to early adoptis currently evaluating the impact of 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 impactnew standard 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 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. Earlyearly adoption is permitted for all entities. The Company is currently evaluating the impact of this new standard on its consolidated financial statementsCondensed Consolidated Financial Statements and related disclosures.
In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses” (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This guidance amends the guidance 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 based on historical experience, current conditions, and reasonable and supportable forecasts. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company does not expect that the adoption of this guidance will have a material impact on its financial statements and related disclosures.

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


2. PBF LOGISTICS LP
PBFX is a fee-based, growth-oriented, publicly traded Delaware MLP 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 processing of crude oil and the receiving, handling, storage and transferring of crude oil, refined products, natural gas and intermediates from sources located throughout the United States and Canada for PBF Energy in support of its refineries, as well as for third party customers. As of June 30, 2019,March 31, 2020, a substantial majority of PBFX’s revenue isrevenues are derived from long-term, fee-based commercial agreements with PBF Holding, which include minimum volume commitments for receiving, handling, storing and transferring crude oil, refined products and natural gas. PBF Energy also has agreements with PBFX that establish fees for certain general and administrative services and operational and maintenance services provided by PBF Holding to PBFX. These transactions, other than those with third parties, are eliminated by PBF Energy and PBF LLC in consolidation.
PBFX, a variable interest entity, is consolidated by PBF Energy through its ownership of PBF LLC. PBF LLC, through its ownership of PBF 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.
As of June 30, 2019,March 31, 2020, PBF LLC held a 48.2% limited partner interest in PBFX (consisting of 29,953,631 common units) with the remaining 51.8% limited partner interest held by the public unitholders. PBF LLC also indirectly 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 anthe transaction contemplated by the 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 (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 are entitled to normal distributions by PBFX.
PBFX Registered Direct Offering
22
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 outstanding 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 50% membership interest in Torrance Valley Pipeline Company LLC (“TVPC”). Subsequent to the closing of the TVPC Acquisition on May 31, 2019, PBFX owns 100% of the membership interests in TVPC.

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


3. ACQUISITIONS
East Coast Storage AssetsMartinez Acquisition
On OctoberFebruary 1, 2018, PBFX closed2020, the acquisition of CPI OperationsCompany acquired from Equilon Enterprises LLC (“CPI”d/b/a Shell Oil Products US (the "Seller"), whose assets include a storage facility with multi-use storage capacity, an Aframax-capable marine facility, a rail facility, a truck terminal, equipment, contractsthe Martinez refinery and certain other idledrelated logistics assets (collectively, the “East Coast Storage Assets”) located on the Delaware River near Paulsboro, New Jersey (the “East Coast Storage Assets Acquisition”"Martinez Acquisition"), which had been contemplated by anpursuant to a sale and purchase agreement dated as of July 16, 2018 between PBFXJune 11, 2019 (the “Sale and Crown Point International, LLC (“Crown Point”Purchase Agreement”). Additionally,The Martinez refinery, located in Martinez, California, is a high-conversion, dual-coking facility that is strategically positioned in Northern California and provides for operating and commercial synergies with the East Coast Storage AssetsTorrance refinery located in Southern California.
In addition to refining assets, the Martinez Acquisition includes an earn-out provision related to an existing commercial agreement with a third-party, based on the future resultsnumber of certain of the acquired idledonsite logistics assets, (the “Contingent Consideration”) which are expected to be restarted in the fourth quarter of 2019.including a deep-water marine facility, product distribution terminals and refinery crude and product storage facilities.
The aggregate purchase price for the East Coast Storage AssetsMartinez Acquisition was $127.0$1,253.4 million, including final working capital of $216.1 million and the Martinez 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.as defined below. The residual purchase consideration consists of the Contingent Consideration. The considerationtransaction was financed through a combination of cash on hand, including proceeds from the 2028 Senior Notes (as defined in “Note 7 - Debt”), and borrowings under the amended and restated PBFXPBF Holding’s asset-based revolving credit facilityagreement (the “PBFX Revolving“Revolving Credit Facility”).
The Company accounted for the Martinez Acquisition as a business combination under GAAP whereby it recognizes assets acquired and liabilities assumed in an acquisition at their estimated fair values as of the date of acquisition. The purchase price and fair value allocation ismay be 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.March 31, 2020.
The total purchase consideration and the estimated fair values of the assets and liabilities at the acquisition date, which may be subject to adjustments as noted above, were as follows:
(in millions)Purchase Price
Gross purchase price$960.0 
Working capital, including post close adjustments216.1 
Contingent consideration (a)77.3 
Total consideration$1,253.4 
(in millions)Purchase Price
Gross purchase price*$105.9
Estimated working capital adjustments—
Contingent consideration**21.1
Total consideration$127.0

* Includes $30.9(a) The Martinez Acquisition includes an obligation for the Company to make post-closing earn-out payments to the Seller 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 acquisition closing date (the “Martinez Contingent Consideration”). The Company recorded the Martinez Contingent Consideration based on its estimated fair value of $77.3 million net present value payable of $32.0 million due to Crown Point one year after closing,at the acquisition date, which is included in “Accrued expenses” onwas recorded within “Other long-term liabilities” within 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 estimated amounts recognized for assets acquired and liabilities assumed as of the acquisition date:
23
(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 INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


The East Coast Storage Asset Acquisition includes consideration infollowing table summarizes the formpreliminary amounts recognized for assets acquired and liabilities assumed as 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 wasdate:
(in millions)Fair Value Allocation
Inventories$224.1 
Prepaid and other current assets5.4 
Property, plant and equipment987.9 
Operating lease right of use assets7.8 
Financing lease right of use assets63.5 
Deferred charges and other assets, net63.7 
Accrued expenses(1.4)
Current operating lease liabilities(1.9)
Current financing lease liabilities (a)(6.0)
Long-term operating lease liabilities(5.9)
Long-term financing lease liabilities(57.5)
Other long-term liabilities - Environmental obligation(26.3)
Fair value of net assets acquired$1,253.4 
(a) Current financing lease liabilities are recorded in Other long-term liabilities onAccrued expenses within the Condensed Consolidated Balance Sheets.Sheet.

The Company’s Condensed Consolidated Financial Statements for the sixthree months ended June 30, 2019March 31, 2020 include the results of operations of the East Coast Storage AssetsMartinez refinery and related logistics assets subsequent to the East Coast Storage Assets Acquisition, whereas theMartinez Acquisition. The same period in 20182019 does not include the results of operations of such assets. On an unaudited pro formapro-forma basis, the revenues and net income (loss) of the Company, assuming the acquisition had occurred on January 1, 2017, for the period indicated,2019, are shown below. The unaudited pro formapro-forma information does not purport to present what the Company’s actual results would have been had the East Coast Storage AssetsMartinez Acquisition occurred on January 1, 2017,2019, nor is the financial information indicative of the results of future operations. The unaudited pro formapro-forma financial information includes the depreciation and amortization expense related to the East Coast Storage AssetsMartinez 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

Three Months Ended March 31, 2020Three Months Ended March 31, 2019
(Unaudited, in millions)
PBF Energy
Pro-forma revenues$5,641.3  $6,258.8  
Pro-forma net income (loss) attributable to PBF Energy Inc. stockholders(1,096.9) 210.9  
PBF LLC
Pro-forma revenues$5,641.3  $6,258.8  
Pro-forma net income (loss) attributable to PBF LLC(1,491.5) 299.9  
Acquisition Expenses
The Company incurred acquisition-related costs of $3.2 million and $3.3$11.6 million for the three and six months ended June 30, 2019, respectively.March 31, 2020 consisting primarily of consulting and legal expenses related to the Martinez Acquisition. The Company incurred acquisition-related costs of $0.7 million and $1.2$0.1 million for the three and six months ended June 30, 2018, respectively. Acquisition-related costs consistMarch 31, 2019 consisting 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.
24
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


4. CURRENT EXPECTED CREDIT LOSSES
4.
Credit Losses
The Company has exposure to credit losses primarily through its sales of refined products. The Company evaluates creditworthiness on an individual customer basis. The Company utilizes a financial review model for purposes of evaluating creditworthiness which is based on information from financial statements and credit reports. The financial review model enables the Company to assess the customer’s risk profile and determine credit limits on the basis of their financial strength, including but not limited to, their liquidity, leverage, debt serviceability, longevity and how they pay their bills. The Company may require security in the form of letters of credit or cash payments in advance of product delivery for certain customers that are deemed higher risk.
The Company’s payment terms on its trade receivables are relatively short, generally 30 days or less for a substantial majority of its refined products. As a result, the Company’s collection risk is mitigated to a certain extent by the fact that sales are collected in a relatively short period of time, allowing for the ability to reduce exposure on defaults if collection issues are identified. Notwithstanding, the Company reviews each customer’s credit risk profile at least annually or more frequently if warranted. Following the widespread market disruption that has resulted from the COVID-19 pandemic and related governmental responses, the Company has been performing ongoing credit reviews of its customers including monitoring for any negative credit events such as customer bankruptcy or insolvency events. As a result, the Company has adjusted payment terms or limited available trade credit for certain customers, as well as for customers within industries that are deemed to be at higher risk.
The Company performs a quarterly allowance for doubtful accounts analysis to assess whether an allowance needs to be recorded for any outstanding trade receivables. In estimating credit losses, management reviews accounts that are past due, have known disputes or have experienced any negative credit events that may result in future collectability issues. There was 0 allowance for doubtful accounts recorded as of March 31, 2020 and December 31, 2019.
25
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5. INVENTORIES
Inventories consisted of the following:
June 30, 2019
March 31, 2020March 31, 2020
(in millions)Titled Inventory Inventory Intermediation Agreements Total(in millions)Titled InventoryInventory Intermediation AgreementsTotal
Crude oil and feedstocks$992.7
 $115.0
 $1,107.7
Crude oil and feedstocks$1,158.7  $—  $1,158.7  
Refined products and blendstocks1,082.9
 335.1
 1,418.0
Refined products and blendstocks1,109.6  270.8  1,380.4  
Warehouse stock and other116.5
 —
 116.5
Warehouse stock and other134.6  —  134.6  
$2,192.1
 $450.1
 $2,642.2
$2,402.9  $270.8  $2,673.7  
Lower of cost or market adjustment(250.6) (77.2) (327.8)Lower of cost or market adjustment(1,521.5) (165.7) (1,687.2) 
Total inventories$1,941.5
 $372.9
 $2,314.4
Total inventories  $881.4  $105.1  $986.5  
December 31, 2018
(in millions)Titled Inventory Inventory Intermediation Agreements Total
Crude oil and feedstocks$1,044.8
 $—
 $1,044.8
Refined products and blendstocks1,026.9
 334.8
 1,361.7
Warehouse stock and other111.1
 —
 111.1
 $2,182.8
 $334.8
 $2,517.6
Lower of cost or market adjustment(557.2) (94.6) (651.8)
Total inventories$1,625.6
 $240.2
 $1,865.8

December 31, 2019
(in millions)Titled InventoryInventory Intermediation AgreementsTotal
Crude oil and feedstocks$1,071.4  $2.7  $1,074.1  
Refined products and blendstocks976.0  352.9  1,328.9  
Warehouse stock and other120.8  —  120.8  
$2,168.2  $355.6  $2,523.8  
Lower of cost or market adjustment(324.8) (76.8) (401.6) 
Total inventories  $1,843.4  $278.8  $2,122.2  
Inventory under inventory intermediation agreements includes crude oil and certain light finished products sold to counterparties in connection with 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”). (as amended and restated from time to time, the “Inventory Intermediation Agreements”) includes crude oil, intermediate and certain finished products (the “J. Aron Products”) purchased or produced by the Paulsboro and Delaware City refineries (the “East Coast Refineries”), and sold to counterparties in connection with such agreements. This inventory is held in the Company’s storage tanks at the Delaware City and Paulsboro refineriesEast Coast Refineries and at PBFX’s East Coast Storage Assets (the “PBFX East Coast Storage Facility”, and togetherassets acquired from Crown Point International, LLC in October 2018 (together with the Company’s storage tanks at the Delaware City and Paulsboro refineries,East Coast Refineries, the “Storage“J. Aron Storage Tanks”).
During the three months ended June 30, 2019,March 31, 2020, the Company recorded an adjustment to value its inventories to the lower of cost or market which decreased operating incomeincreased loss from operations by $182.0$1,285.6 million, reflecting the net change in the lower of cost or market (“LCM”) inventory reserve from $145.8$401.6 million at December 31, 2019 to $1,687.2 million at March 31, 2019 to $327.8 million at June 30, 2019. 2020.
During the sixthree months ended June 30,March 31, 2019, the Company recorded an adjustment to value its inventories to the lower of cost or market which increased operating income from operations by $324.0$506.0 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 which increased operating income by $158.0 million, reflecting the net change in the LCM reserve from $212.8$145.8 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, 2017 to $54.8 million at June 30, 2018.2019.

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


5.6. 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 (in millions)
March 31, 2020December 31, 2019
Inventory-related accruals$606.8  $1,103.2  
Inventory intermediation agreements209.5  278.1  
Excise and sales tax payable142.4  98.6  
Renewable energy credit and emissions obligations118.4  17.7  
Accrued transportation costs88.5  88.7  
Accrued capital expenditures85.1  32.2  
Accrued interest41.1  12.1  
Customer deposits36.4  1.8  
Accrued utilities28.2  40.1  
Accrued salaries and benefits21.7  81.1  
Accrued refinery maintenance and support costs13.5  16.9  
Environmental liabilities13.2  12.8  
Current finance lease liabilities12.7  6.5  
Contingent consideration10.5  10.0  
Other64.6  15.8  
Total accrued expenses$1,492.6  $1,815.6  

PBF LLC (in millions)
March 31, 2020December 31, 2019
Inventory-related accruals$606.8  $1,103.2  
Inventory intermediation agreements209.5  278.1  
Excise and sales tax payable142.4  98.6  
Renewable energy credit and emissions obligations118.4  17.7  
Accrued transportation costs88.5  88.7  
Accrued capital expenditures85.1  32.2  
Accrued interest71.0  39.5  
Customer deposits36.4  1.8  
Accrued utilities28.2  40.1  
Accrued salaries and benefits21.7  81.1  
Accrued refinery maintenance and support costs13.5  16.9  
Environmental liabilities13.2  12.8  
Current finance lease liabilities12.7  6.5  
Contingent consideration10.5  10.0  
Other69.1  19.0  
Total accrued expenses$1,527.0  $1,846.2  
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PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


The Company has the obligation to repurchase certain crude oil, intermediate and finished products (the “Products”)the J. Aron Products that are held in the Company’sits J. Aron Storage Tanks in accordance with the Inventory Intermediation Agreements with J. Aron. As of June 30, 2019March 31, 2020 and December 31, 2018,2019, a liability is recognized for the Inventory Intermediation Agreements and is recorded at market price for the J. Aron owned inventory held in the Company’s J. Aron Storage Tanks under the Inventory Intermediation Agreements, with any change in the market price being recorded in Cost of products and other.
The Company is subject to obligations to purchase Renewable Identification Numbers (“RINs”) required to comply with the Renewable Fuels Standard. The Company’s overall RINs obligation is based on a percentage of domestic shipments of on-road fuels as established by Environmental Protection Agency (“EPA”).Agency. To the degree the Company is unable to blend the required amount of biofuels to satisfy its RINs obligation, RINs must be purchased on the open market to avoid penalties and fines. The Company records its RINs obligation on a net basis in Accrued expenses when its RINs liability is greater than the amount of RINs earned and purchased in a given period and in Prepaid and other current assets when the amount of RINs earned and purchased is greater than the RINs liability. In addition, the Company is subject to obligations to comply with federal and state legislative and regulatory measures, including regulations in the state of California pursuant to Assembly Bill 32, (“AB32”), to address environmental compliance and greenhouse gas and other emissions. These requirements include incremental costs to operate and maintain our facilities as well as to implement and manage new emission controls and programs. Renewable energy credit and emissions obligations fluctuate with the volume of applicable product sales and timing of credit purchases.


6.
7. DEBT
Senior Notes
On January 24, 2020, PBF Holding entered into an indenture (the “Indenture”) among PBF Holding and PBF Holding’s wholly-owned subsidiary, PBF Finance Corporation (together with PBF Holding, the “Issuers”), the guarantors named therein (collectively the “Guarantors”), Wilmington Trust, National Association, as Trustee and Deutsche Bank Trust Company Americas, under which the Issuers issued $1.0 billion in aggregate principal amount of 6.00% senior unsecured notes due 2028 (the “2028 Senior Notes”). The Issuers received net proceeds of approximately $987.0 million from the offering after deducting the initial purchasers’ discount and estimated offering expenses. The Company primarily used the net proceeds to fully redeem the 7.00% senior notes due 2023 (the “2023 Senior Notes”), including accrued and unpaid interest, on February 14, 2020, and to fund a portion of the cash consideration for the Martinez Acquisition. The difference between the carrying value of the 2023 Senior Notes on the date they were reacquired and the amount for which they were reacquired has been classified as Debt extinguishment costs in the Condensed Consolidated Statement of Operations.
In connection with the issuance of the 2028 Senior Notes, the Issuers and the Guarantors entered into a registration rights agreement whereby the Company has agreed to file with the SEC and use reasonable efforts to cause to become effective within 365 days of the closing date, a registration statement relating to an offer to exchange the 2028 Senior Notes for an issue of registered notes with terms substantially identical to the 2028 Senior Notes. The Issuers will be obligated to pay additional interest if they fail to comply with their obligations to register the 2028 Senior Notes within the specified time period. The Company fully intends to file a registration statement for the exchange of the 2028 Senior Notes within the 365 day period following the closing of the 2028 Senior Notes. In addition, there are no restrictions or hindrances that the Company is aware of that would prohibit the Issuers from filing such registration statement and maintaining its effectiveness as stipulated in the registration rights agreement. As such, the Company asserts that it is not probable that it will have to transfer any consideration as a result of the registration rights agreement and thus no loss contingency was recorded.
28
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The 2028 Senior Notes are guaranteed on a senior unsecured basis by substantially all of PBF Holding’s subsidiaries. The 2028 Senior Notes and guarantees are senior unsecured obligations and rank equal in right of payment with all of the Issuers’ and the Guarantors’ existing and future indebtedness, including PBF Holding’s Revolving Credit Facility and the Issuers’ 7.25% senior notes due 2025 (the “2025 Senior Notes”). The 2028 Senior Notes and the guarantees rank senior in right of payment to the Issuers’ and the Guarantors’ existing and future indebtedness that is expressly subordinated in right of payment thereto. The 2028 Senior Notes and the guarantees are effectively subordinated to any of the Issuers’ and the Guarantors’ existing or future secured indebtedness (including the Revolving Credit Facility) to the extent of the value of the collateral securing such indebtedness. The 2028 Senior Notes and the guarantees are structurally subordinated to any existing or future indebtedness and other obligations of the Issuers’ non-guarantor subsidiaries.
At any time prior to February 15, 2023, the Issuers may on any one or more occasions redeem up to 35% of the aggregate principal amount of the 2028 Senior Notes in an amount not greater than the net cash proceeds of certain equity offerings at a redemption price equal to 106.000% of the principal amount of the 2028 Senior Notes, plus any accrued and unpaid interest through the date of redemption. On or after February 15, 2023, the Issuers may redeem all or part of the 2028 Senior Notes, in each case at the redemption prices described in the Indenture, together with any accrued and unpaid interest through the date of redemption. In addition, prior to February 15, 2023, the Issuers may redeem all or part of the 2028 Senior Notes at a “make-whole” redemption price described in the Indenture, together with any accrued and unpaid interest through the date of redemption.
As disclosed in “Note 20 - Subsequent Events”, on May 13, 2020, PBF Holding issued $1.0 billion in aggregate principal amount of 9.25% senior secured notes due 2025 (the “2025 Senior Secured Notes”). The Company intends to use the net proceeds for general corporate purposes.
PBF Holding Revolving Credit Facility
The Revolving Credit Facility has a maximum commitment of $3.4 billion, a maturity date of May 2023, and a Borrowing Base, as defined in the agreement governing the Revolving Credit Facility (the “Revolving Credit Agreement”) to make funds available for working capital and other 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 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.
During the three months ended March 31, 2020, the Company used advances under the Revolving Credit Facility to fund a portion of the Martinez Acquisition and other general corporate purposes. The outstanding borrowings under the Revolving Credit Facility as of March 31, 2020 were $900.0 million. There were 0 outstanding borrowings under the Revolving Credit Facility as of December 31, 2019.
On February 18, 2020, in connection with its entry into a $300.0 million uncommitted receivables purchase facility (the “Receivables Facility”), the Company amended the Revolving Credit Agreement and entered into a related intercreditor agreement to allow it to sell certain Eligible Receivables (as defined in the Revolving Credit Agreement) derived from the sale of refined product over truck racks. Under the Receivables Facility, the Company sells such receivables to a bank subject to bank approval and certain conditions. The sales of receivables under the Receivables Facility are absolute and irrevocable but subject to certain repurchase obligations under certain circumstances.
As disclosed in “Note 20 - Subsequent Events”, on May 7, 2020, the Company further amended the Revolving Credit Facility, to increase PBF Holding’s ability to incur certain secured debt from an amount equal to 10% of its total assets to 20% of its total assets.

29
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

8. AFFILIATE NOTE PAYABLE - PBF LLC
As of June 30, 2019March 31, 2020 and December 31, 2018,2019, PBF LLC had an outstanding note payable with PBF Energy for an aggregate principal amount of $378.4$377.5 million and $326.1$376.4 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 without penalty or premium.

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


7.9. COMMITMENTS AND CONTINGENCIES
In the ordinary conduct of the Company’s business, the Company is from time to time subject to lawsuits, investigations and claims, including class action proceedings, mass tort actions, tort actions, environmental claims and employee-related matters. The outcome of these matters cannot always be predicted accurately, but the Company accrues liabilities for these matters if the Company has determined that it is probable a loss has been incurred and the loss can be reasonably estimated. For such ongoing matters for which we have not recorded a liability but losses are reasonably possible, we are unable to estimate a range of possible losses at this time due to various reasons that may include but are not limited to, matters being in an early stage and not fully developed through pleadings, discovery or court proceedings, number of potential claimants being unknown or uncertainty regarding a number of different factors underlying the potential claims. However, the ultimate resolution of one or more of these contingencies could result in an adverse outcome that may have a material effect on our financial position, results of operations or cash flows.
Environmental Matters
The Company’s refineries, pipelines and related operations are subject to extensive and frequently changing federal, state and local laws and regulations, including, but not limited to, those relating to the discharge of materials into the environment or that otherwise relate to the protection of the environment, 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 ourits 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 acquisition of the Torrance refinery and related logistics assets, the Company assumed certain pre-existing environmental liabilities totaling $125.4$119.8 million as of June 30, 2019March 31, 2020 ($130.8121.3 million as of December 31, 2018)2019), related to certain environmental remediation obligations to address existing soil and groundwater contamination and monitoring activities and other clean-up activities, which reflects the current estimated cost of the remediation obligations. The current portion of the environmental liability is recorded in Accrued expenses and the non-current portion is recorded in Other long-term liabilities.
30
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accruedaggregate environmental liability reflected in the Company’s Condensed Consolidated Balance Sheets was $139.2$164.3 million and $144.2$134.6 million at June 30, 2019March 31, 2020 and December 31, 2018,2019, respectively, of which $129.5$151.1 million and $137.2$121.8 million, respectively, were classified as Other long-term liabilities. These accrualsliabilities 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.
DuringContingent Consideration
In connection with the first quarterMartinez Acquisition, the Sale and Purchase Agreement includes an earn-out provision based on certain earning thresholds of 2019, PBFX notified certain agenciesthe Martinez refinery. Pursuant to the agreement, the Company will make payments to the Seller based on the future earnings of an oil sheenthe Martinez refinery, as defined in the Schuylkill River potentially sourcing fromagreement, for a PBFX facility. Clean-up was immediately initiated, and oil is no longer being released intoperiod of up to four years following the waterway.acquisition closing date. The sourceCompany recorded the acquisition date fair value of the oil is currently under investigation. Although full clean-upearn-out provision as contingent consideration of $77.3 million within “Other long-term liabilities” within the Company’s Condensed Consolidated Balance Sheets. The Martinez Contingent Consideration was $24.3 million as of March 31, 2020, representing the present value of expected future payments discounted at a blended rate of 24.6%. At March 31, 2020, the estimated undiscounted liability totaled $43.5 million, based on the Company’s anticipated future earn-out payments.
In connection with the PBFX acquisition of CPI Operations LLC from Crown Point International LLC (“Crown Point”) in October 2018, the purchase and remediation costs have not been completed, such incremental costs are not expectedsale agreement between PBFX and Crown Point included an earn-out provision related to be materialan existing commercial agreement with a third party, based on the future results of certain of the acquired idled assets (the “PBFX Contingent Consideration”). Pursuant to the Company.
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


purchase and sale agreement, PBFX and Crown Point will share equally in the future operating profits of the restarted assets, as defined in the purchase and sale agreement, over a contractual term of up to three years starting in 2019. The PBFX Contingent Consideration recorded was $27.0 million and $26.1 million as of March 31, 2020 and December 31, 2019, respectively, representing the present value of expected future payments discounted at a blended rate of 8.79%. At March 31, 2020, the estimated undiscounted liability totaled $31.0 million based on PBFX’s anticipated total annual earn-out payments. The acquired idled assets that are subject to the PBFX Contingent Consideration recommenced operations in October 2019.
Tax Receivable Agreement
PBF Energy entered into a tax receivable agreement with the PBF LLC Series A and PBF LLC Series B unitholders (the “Tax Receivable Agreement”) that provides for the payment by PBF Energy to such persons of an amount equal to 85% of the amount of the benefits, if any, that PBF Energy is deemed to realize as a result of (i) increases in tax basis, as described below, and (ii) certain other tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. For purposes of the Tax Receivable Agreement, the benefits deemed realized by PBF Energy will be computed by comparing the actual income tax liability of PBF Energy (calculated with certain assumptions) to the amount of such taxes that PBF Energy would have been required to pay had there been no increase to the tax basis of the assets of PBF LLC as a result of purchases or exchanges of PBF LLC Series A Units for shares of PBF Energy Class A common stock and had PBF Energy not entered into the Tax Receivable Agreement. The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless: (i) PBF Energy exercises its right to terminate the Tax Receivable Agreement, (ii) PBF Energy breaches any of its material obligations under the Tax Receivable Agreement or (iii) certain changes of control occur, in which case all obligations under the Tax Receivable Agreement will generally be accelerated and due as calculated under certain assumptions.
31
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The payment obligations under the Tax Receivable Agreement are obligations of PBF Energy and not of PBF LLC, PBF Holding or PBFX. In general, PBF Energy expects to obtain funding for these annual payments from PBF LLC, primarily through tax distributions, which PBF LLC makes on a pro-rata basis to its owners. Such owners include PBF Energy, which holds a 99.0%99.2% interest in PBF LLC as of June 30, 2019March 31, 2020 (99.0% as of December 31, 2018)2019). 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,March 31, 2020, PBF Energy has recognized a liability for the Tax Receivable Agreement of $373.5$385.1 million ($373.5 million as of December 31, 2018)2019) reflecting the estimate of the undiscounted amounts that the Company expects to pay under the agreement.


8.10. 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 operating lease payments is recognized on a straight-line basis over the lease term. Interest expense for finance leases is incurred based on the carrying value of the lease liability. 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.
TheFor substantially all classes of underlying assets, the Company doeshas elected the practical expedient not to separate lease and nonleasenon-lease components, which allows it to combine the components if certain criteria are met. For certain leases of contracts.refinery support facilities, which have commenced subsequent to the year ended December 31, 2019, the Company accounts for the non-lease service component separately. 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 ishas 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.
32
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Lease Position as of June 30,March 31, 2020 and December 31, 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:for the periods presented:

(in millions) Classification on the Balance Sheet June 30, 2019(in millions)Classification on the Balance SheetMarch 31, 2020December 31, 2019
Assets  Assets
Operating lease assets Operating lease right of use assets $236.9
Operating lease assetsOperating lease right of use assets$330.5  $306.4  
Finance lease assets Deferred charges and other assets, net 14.2
Finance lease assetsFinancing lease right of use assets84.9  24.2  
Total lease right of use assets $251.1
Total lease right of use assets$415.4  $330.6  
  
Liabilities  Liabilities
Current liabilities:  Current liabilities:
Operating lease liabilities Current operating lease liabilities $80.2
Operating lease liabilitiesCurrent operating lease liabilities$79.5  $72.1  
Finance lease liabilities Accrued expenses 1.1
Finance lease liabilitiesAccrued expenses12.7  6.5  
Noncurrent liabilities:  Noncurrent liabilities:
Operating lease liabilities Long-term operating lease liabilities 156.1
Operating lease liabilitiesLong-term operating lease liabilities249.4  233.1  
Finance lease liabilities Other long-term liabilities 13.3
Finance lease liabilitiesLong-term financing lease liabilities73.2  18.4  
Total lease liabilities $250.7
Total lease liabilities$414.8  $330.1  

Lease Costs
The table below presentsprovides certain information related to costs for the Company’s leases for the three and six months ended June 30, 2019:periods presented:
Three Months Ended March 31,
Lease Costs (in millions)
20202019
Components of total lease cost:
Finance lease cost
Amortization of right of use assets$2.9  $—  
Interest on lease liabilities0.9  —  
Operating lease cost28.2  26.2  
Short-term lease cost22.0  23.3  
Variable lease cost3.9  1.4  
Total lease cost$57.9  $50.9  
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,March 31, 2020 and March 31, 2019.
33
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Other Information
The table below presentsprovides supplemental cash flow information related to leases for the six months ended June 30, 2019:periods presented (in millions):
Three Months Ended March 31,
20202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$28.6  $20.9  
Operating cash flows for finance leases0.9  —  
Financing cash flows for finance leases2.6  —  
Supplemental non-cash amounts of lease liabilities arising from obtaining right-of-use assets111.1  17.0  
(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:March 31, 2020:

June 30, 2019
Weighted average remaining lease term - operating leases5.512.1 years
Weighted average remaining lease term - finance leases9.87.8 years
Weighted average discount rate - operating leases7.977.2 %
Weighted average discount rate - finance leases6.835.3 %

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 yearsperiods presented to the lease liabilities recorded on the Condensed Consolidated Balance Sheets as of June 30, 2019:March 31, 2020:
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

Amounts due within twelve months of March 31, (in millions)
Finance LeasesOperating Leases
2020$16.8  $100.1  
202115.4  65.4  
202211.0  51.1  
202311.0  31.7  
202411.0  33.1  
Thereafter40.0  232.0  
Total minimum lease payments105.2  513.4  
Less: effect of discounting19.3  184.5  
Present value of future minimum lease payments85.9  328.9  
Less: current obligations under leases12.7  79.5  
Long-term lease obligations$73.2  $249.4  
As of June 30, 2019,March 31, 2020, the Company has entered into 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 commence2020. No other such pending leases, either individually or in the third quarter of 2019.aggregate, are material. There are no material lease arrangements in which the Company is the lessor.

34
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
9.

11. 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 99.2% and 99.0% as of June 30, 2019March 31, 2020 and December 31, 2018,2019, 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, 2019March 31, 2020 and December 31, 20182019 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%
Holders of PBF LLC Series A UnitsOutstanding Shares of PBF Energy Class A Common Stock
Total *
December 31, 20191,215,317119,804,971121,020,288
1.0 %99.0 %100.0 %
March 31, 20201,019,916119,986,604121,006,520
0.8 %99.2 %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.
* 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 1-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.March 31, 2020. 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.
35
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The noncontrolling interest ownership percentages in PBFX as of December 31, 2018, the closing of the PBFX Registered Direct Offering2019 and June 30, 2019March 31, 2020 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%

Units of PBFX Held by the PublicUnits of PBFX Held by PBF LLCTotal
December 31, 201932,176,40429,953,63162,130,035
51.8 %48.2 %100.0 %
March 31, 202032,197,76029,953,63162,151,391
51.8 %48.2 %100.0 %
Noncontrolling Interest in PBF Holding
In connection with the acquisition of the Chalmette Acquisition,refinery, PBF Holding recorded noncontrolling interests in two2 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 of the three and six months ended June 30,March 31, 2020 and 2019 and 2018 the Company recorded noncontrolling interest in the earnings of these subsidiaries of less than $0.2$0.1 million.
36
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 sixthree months ended June 30,March 31, 2020 and 2019, and 2018, respectively: 


PBF Energy (in millions)
PBF Energy Inc. EquityNoncontrolling
Interest in PBF LLC		Noncontrolling
Interest in PBF Holding		Noncontrolling
Interest in PBFX		Total Equity
Balance at January 1, 2020$3,039.6  $113.2  $10.9  $421.8  $3,585.5  
Comprehensive income (loss)(1,068.7) (14.6) —  18.0  (1,065.3) 
Dividends and distributions(35.9) (0.4) —  (17.1) (53.4) 
Stock-based compensation6.8  —  —  1.3  8.1  
Exercise of PBF LLC and PBF Energy options and warrants, net0.2  —  —  —  0.2  
Taxes paid for net settlements of equity-based compensation(0.9) —  —  —  (0.9) 
Exchanges of PBF Energy Company LLC Series A Units for PBF Energy Class A common stock1.9  (1.9) —  —  —  
Other5.3  —  —  —  5.3  
Balance at March 31, 2020$1,948.3  $96.3  $10.9  $424.0  $2,479.5  


PBF Energy (in millions)
PBF Energy Inc. Equity Noncontrolling
Interest in PBF LLC		 
Noncontrolling
Interest in PBF Holding
 Noncontrolling
Interest in PBFX		 Total Equity
Balance at January 1, 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. EquityNoncontrolling
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 income229.5  3.1  —  9.0  241.6  
Dividends and distributions(36.0) (0.4) —  (13.2) (49.6) 
Issuance of additional PBFX common units82.4  —  —  (82.4) —  
Stock-based compensation6.2  —  —  1.0  7.2  
Exercise of PBF LLC and PBF Energy options and warrants, net0.1  —  —  —  0.1  
Taxes paid for net settlements of equity-based compensation(1.0) —  —  —  (1.0) 
Balance at March 31, 2019$2,957.7  $114.9  $10.9  $363.3  $3,446.8  
37
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 sixthree months ended June 30,March 31, 2020 and 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 EquityNoncontrolling Interest in PBF HoldingNoncontrolling
Interest in PBFX		Total Equity
Balance at January 1, 2020$3,176.4  $10.9  $421.8  $3,609.1  
Comprehensive income (loss)(1,459.4) —  18.0  (1,441.4) 
Dividends and distributions(36.3) —  (17.1) (53.4) 
Exercise of PBF LLC options and warrants, net(0.9) —  —  (0.9) 
Stock-based compensation6.8  —  1.3  8.1  
Balance at March 31, 2020$1,686.6  $10.9  $424.0  $2,121.5  
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 LLC (in millions)
PBF Energy Company LLC EquityNoncontrolling
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 income318.6  —  9.0  327.6  
Dividends and distributions(36.4) —  (13.2) (49.6) 
Exercise of PBF LLC and PBF Energy options and warrants, net(0.9) —  —  (0.9) 
Issuance of additional PBFX common units82.4  —  (82.4) —  
Stock-based compensation6.2  —  1.0  7.2  
Balance at March 31, 2019$3,129.5  $10.9  $363.3  $3,503.7  





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


10.12. DIVIDENDS AND DISTRIBUTIONS
With respect to dividends and distributions paid during the sixthree months ended June 30, 2019,March 31, 2020, PBF LLC made an aggregate non-tax quarterly distribution of $72.7$36.2 million, or $0.30 per unit to its members, of which $71.9$35.9 million was distributed pro-rata to PBF Energy and the balance was distributed to its other members. PBF Energy used this $71.9$35.9 million to pay a quarterly cash dividend of $0.30 per share of Class A common stock on both March 14, 2019 and May 30, 2019. In addition, during the six months ended June 30, 2019, PBF LLC made aggregate tax distributions to its members of $54.8 million, of which $53.2 million was made to PBF Energy.17, 2020.

With respect to distributions paid during the sixthree months ended June 30, 2019,March 31, 2020, PBFX paid a distribution on outstanding common units of $0.505$0.520 per unit on March 14, 2019 and $0.510 per unit on May 30, 2019,17, 2020, of which $30.4$15.6 million was distributed to PBF LLC and the balance was distributed to its public unitholders.

38
11.
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

13. EMPLOYEE BENEFIT PLANS
The Company amended the PBF Energy Pension Plan to, among other things, incorporate into the plan all employees who became employed at the Company’s Martinez, California location on February 1, 2020, in connection with the Martinez Acquisition. The amendment to the plan was effective as of February 1, 2020. The components of net periodic benefit cost related to the Company’s defined benefit plans consisted of the following:
(in millions) Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,		(in millions)Three Months Ended March 31,
Pension Benefits 2019 2018 2019
2018Pension Benefits20202019
Components of net periodic benefit cost:        Components of net periodic benefit cost:
Service cost $10.9
 $11.8
 $21.8
 $23.6
Service cost$13.8  $10.9  
Interest cost 2.1
 1.4
 4.2
 2.8
Interest cost1.8  2.1  
Expected return on plan assets (2.4) (2.1) (4.8) (4.2)Expected return on plan assets(3.1) (2.4) 
Amortization of prior service cost and actuarial loss —
 0.1
 0.1
 0.2
Amortization of prior service cost and actuarial loss0.1  0.1  
Net periodic benefit cost $10.6
 $11.2
 $21.3
 $22.4
Net periodic benefit cost$12.6  $10.7  
(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


(in millions)Three Months Ended March 31,
Post-Retirement Medical Plan20202019
Components of net periodic benefit cost:
Service cost$0.3  $0.2  
Interest cost0.1  0.2  
Amortization of prior service cost and actuarial loss0.1  0.1  
Net periodic benefit cost$0.5  $0.5  

39
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


12.14. 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 1618 - Segment Information”, the Company’s business consists of the Refining Segment and Logistics Segment. The following table provides information relating to the Company’s revenues for each product or group of similar products or services by segment for the periods presented.
 Three Months Ended June 30,
(in millions)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


Three Months Ended March 31,
(in millions)20202019
Refining Segment:
Gasoline and distillates$4,570.4  $4,433.0  
Feedstocks and other311.3  200.7  
Asphalt and blackoils207.0  353.0  
Chemicals112.8  151.7  
Lubricants58.5  70.3  
Total5,260.0  5,208.7  
Logistics Segment:
Logistics93.0  78.8  
Total revenues prior to eliminations5,353.0  5,287.5  
Elimination of intercompany revenues(75.5) (71.3) 
Total Revenues$5,277.5  $5,216.2  
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 606.606, Revenues from Contracts with Customers.
LogisticsThe Company’s logistics segment revenue isrevenues are generated by charging fees for crude oil and refined products terminaling, storage and pipeline services based on the greater of contractual minimum volume commitments, as applicable, or the delivery of actual volumes based on contractual rates applied to throughput or storage volumes. A majority of the Company’s logistics revenues are generated by intercompany transactions and are eliminated in consolidation.
Deferred 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$36.7 million and $20.1 million as of June 30, 2019March 31, 2020 and December 31, 2018,2019, 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.
40
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

13.15. INCOME TAXES
PBF Energy filesis required to file federal and applicable state corporate income tax returns and recognizes income taxes on its pre-tax income (loss), which to dateto-date has consisted primarily of its share of PBF LLC’s pre-tax income (loss) (approximately 99.2% and 99.0% as of June 30, 2019March 31, 2020 and December 31, 2018,2019, 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 two2 subsidiaries acquired in connection with the acquisition of Chalmette Refining and PBF Holding’s wholly-owned Canadian subsidiary, PBF Ltd,Energy Limited, 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 March 31,
(in millions)20202019
Current income tax expense$0.2  $2.0  
Deferred income tax (benefit) expense(374.8) 78.5  
Total income tax (benefit) expense$(374.6) $80.5  
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(in millions)2019 2018 2019 2018
Current income tax (benefit) expense$(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 (losses) 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 %

Three Months Ended March 31,
20202019
Provision at Federal statutory rate21.0 %21.0 %
Increase (decrease) attributable to flow-through of certain tax adjustments:   
State income taxes (net of federal income tax)5.3 %5.0 %
Nondeductible/nontaxable items— %0.2 %
Rate differential from foreign jurisdictions(0.1)%(0.3)%
Other(0.2)%0.1 %
Effective tax rate26.0 %26.0 %
PBF Energy’s effective income tax rate for the three and six months ended June 30,March 31, 2020, including the impact of income attributable to noncontrolling interests of $3.4 million, was 26.1%. PBF Energy’s effective income tax rate for the three months ended March 31, 2019, including the impact of income attributable to noncontrolling interests of $10.6$12.2 million, was 25.0%.
41
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On March 27, 2020, the Coronavirus Aid, Relief, and $22.8 million, respectively,Economic Security Act (the “CARES Act”) was 32.7%enacted and 24.2%, respectively. PBF Energy’s effectivesigned into law. The CARES Act includes several provisions for corporations, including increasing the amount of deductible interest, allowing companies to carryback certain Net Operating Losses (“NOLs”) and increasing the amount of NOLs that corporations can use to offset income. The CARES Act did not materially affect the Company’s first-quarter income tax rate forprovision, deferred tax assets and liabilities, and related taxes payable. The Company is currently assessing the three and six months ended June 30, 2018, includingfuture implications of these provisions within the impact of income attributable to noncontrolling interests of $15.6 million and $27.0 million, respectively, was 24.9% and 24.4%, respectively.CARES Act on its Consolidated Financial Statements.
The reported income tax provision in the PBF LLC Condensed Consolidated Statements of Operations consists of the following:
Three Months Ended March 31,
(in millions)20202019
Current income tax expense$—  $—  
Deferred income tax expense (benefit)14.2  (7.2) 
Total income tax expense (benefit)$14.2  $(7.2) 
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
(in millions)2019 2018 2019 2018
Current income tax benefit$(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 no0 material uncertain tax positions as of June 30, 2019.March 31, 2020. The Company does not have any unrecognized tax benefits.

42
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


14.16. FAIR VALUE MEASUREMENTS
The tables below present information about the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis and indicate the fair value hierarchy of the inputs utilized to determine the fair values as of June 30, 2019March 31, 2020 and December 31, 2018.2019.
The Company has elected to offset the fair value amounts recognized for multiple derivative contracts executed with the same counterparty; however, fair value amounts by hierarchy level are presented on a gross basis in the tables below. The Company has posted cash margin with various counterparties to support hedging and trading activities. The cash margin posted is required by counterparties as collateral deposits and cannot be offset against the fair value of open contracts except in the event of default. The Company has no derivative contracts that are subject to master netting arrangements that are reflected gross on the Condensed Consolidated Balance Sheets.
As of March 31, 2020
Fair Value HierarchyTotal Gross Fair ValueEffect of Counter-party NettingNet Carrying Value on Balance Sheet
(in millions)Level 1Level 2Level 3
Assets:
Money market funds$101.3  $—  $—  $101.3  N/A  $101.3  
Commodity contracts—  9.9  —  9.9  (7.5) 2.4  
Derivatives included with inventory intermediation agreement obligations—  66.6  —  66.6  —  66.6  
Liabilities:
Commodity contracts1.1  6.4  —  7.5  (7.5) —  
Catalyst obligations—  35.9  —  35.9  —  35.9  
Contingent consideration obligation—  —  51.3  51.3  —  51.3  
 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

As of December 31, 2019
Fair Value HierarchyTotal Gross Fair ValueEffect of Counter-party NettingNet Carrying Value on Balance Sheet
(in millions)Level 1Level 2Level 3
Assets:
Money market funds$111.8  $—  $—  $111.8  N/A  $111.8  
Commodity contracts32.5  1.5  —  34.0  (33.8) 0.2  
Liabilities:
Commodity contracts32.8  1.0  —  33.8  (33.8) —  
Catalyst obligations—  47.6  —  47.6  —  47.6  
Derivatives included with inventory intermediation agreement obligations—  1.3  —  1.3  —  1.3  

43
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


The valuation methods used to measure financial instruments at fair value are as follows:
•Money market funds categorized in Level 1 of the fair value hierarchy are measured at fair value based on quoted market prices and included within Cash and cash equivalents.
•The commodity contracts categorized in Level 1 of the fair value hierarchy are measured at fair value based on quoted prices in an active market. The commodity contracts categorized in Level 2 of the fair value hierarchy are measured at fair value using a market approach based upon future commodity prices for similar instruments quoted in active markets.
•The derivatives included with inventory intermediation agreement obligations and the catalyst 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 contingent consideration obligation at March 31, 2020 is categorized in Level 3 of the fair value hierarchy and is estimated using discounted cash flow models based on management’s estimate of the future cash flows related to the earn-out periods. The change in fair value of the obligation during the three months ended March 31, 2020 was impacted primarily by the change in estimated future earnings related to the Martinez refinery during the earn-out period.

Non-qualified pension plan assets are measured at fair value using a market approach based on published net asset values of mutual funds as a practical expedient. As of June 30, 2019March 31, 2020 and December 31, 2018, $10.22019, $11.0 million and $9.7$10.3 million, respectively, were included within Deferred charges and other assets, net for these non-qualified pension plan assets.

The table below summarizes the changes in fair value measurements categorized in Level 3 of the fair value hierarchy:
(in millions)Three Months Ended March 31, 2020
Balance at beginning of period$26.1 
Additions77.3 
Accretion on discounted liabilities0.7 
Unrealized gain included in earnings(52.8)
Balance at end of period$51.3 

There were no0 transfers between levels during the three and six months ended June 30,March 31, 2020 or 2019, or 2018.respectively.


44
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair value of debt
The table below summarizes the faircarrying value and carryingfair value of debt as of June 30, 2019March 31, 2020 and December 31, 2018.2019.
March 31, 2020December 31, 2019
(in millions)
Carrying
value
Fair
 value
Carrying
 value
Fair
value
2028 Senior Notes (a)$1,000.0  $670.9  $—  $—  
2025 Senior Notes (a)725.0  480.6  725.0  776.5  
2023 Senior Notes (b)—  —  500.0  519.7  
PBFX 2023 Senior Notes (a)527.1  302.4  527.2  543.0  
PBF Rail Term Loan (c)12.8  12.8  14.5  14.5  
PBFX Revolving Credit Facility (c)383.0  383.0  283.0  283.0  
Revolving Credit Facility (c)900.0  900.0  —  —  
Catalyst financing arrangements (d)35.9  35.9  47.6  47.6  
3,583.8  2,785.6  2,097.3  2,184.3  
Less - Current debt—  —  —  —  
Less - Unamortized deferred financing costs(37.7) n/a  (32.4) n/a  
Long-term debt$3,546.1  $2,785.6  $2,064.9  $2,184.3  
 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 7.00%outstanding senior notes due 2023,notes.
(b) As discussed in “Note 7 - Debt”, 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 were redeemed in full on February 14, 2020.
(b)(c) 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)(d) Catalyst leasesfinancing arrangements are valued using a market approach based upon commodity prices for similar instruments quoted in active markets and are categorized as a Level 2 measurement. The Company has elected the fair value option for accounting for its catalyst lease repurchase obligations as the Company’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.
15.17. DERIVATIVES
The Company uses derivative instruments to mitigate certain exposures to commodity price risk. The Company entered into the Inventory Intermediation Agreements that contain purchase obligations for certain volumes of crude oil, intermediates and refined products. The purchase obligations related to crude oil, intermediates and refined products under these agreements are derivative instruments that have been designated as fair value hedges in order to hedge the commodity price volatility of certain refinery inventory. The fair value of these purchase obligation derivatives is based on market prices of the underlying crude oil, intermediates and refined products. The level of activity for these derivatives is based on the level of operating inventories.
45
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2019,March 31, 2020, there were 496,1530 barrels of crude oil and feedstocks (no(27,580 barrels at December 31, 2018)2019) outstanding under these derivative instruments designated as fair value hedges. As of June 30, 2019,March 31, 2020, there were 3,418,2633,275,153 barrels of intermediates and refined products (3,350,166(3,430,635 barrels at December 31, 2018)2019) outstanding under these derivative instruments designated as fair value hedges. These volumes represent the notional value of the contract.
The Company also enters into economic hedges primarily consisting of commodity derivative contracts that are not designated as hedges and are used to manage price volatility in certain crude oil and feedstock inventories as well as crude oil, feedstock, and refined product sales or purchases. The objective in entering into economic hedges is consistent with the objectives discussed above for fair value hedges. As of June 30, 2019,March 31, 2020, there were 12,167,0003,500,000 barrels of crude oil and 6,481,0002,775,000 barrels of refined products (5,801,000(5,511,000 and 1,609,000,5,788,000, respectively, as of December 31, 2018)2019), outstanding under short and long term commodity derivative contracts not designated as hedges representing the notional value of the contracts.
The Company also uses derivative instruments to mitigate the risk associated with the price of credits needed to comply with various governmental and regulatory environmental compliance programs. For such contracts that represent derivatives, the Company elects the normal purchase normal sale exception under ASC 815, Derivatives and Hedging, and therefore does not record them at fair value.
The following tables provide information about the fair values of these derivative instruments as of June 30, 2019March 31, 2020 and December 31, 20182019 and the line items in the Condensed 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:
March 31, 2020:
Derivatives included with the inventory intermediation agreement obligationsAccrued expenses$66.6 
December 31, 2019:
Derivatives included with the inventory intermediation agreement obligationsAccrued expenses$(1.3)
Derivatives not designated as hedging instruments:
March 31, 2020:
Commodity contractsAccounts receivable$2.4 
December 31, 2019:
Commodity contractsAccounts receivable$0.2 
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

46
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


The following table provides information about the gains or losses recognized in income on these derivative instruments and the line items in the Condensed Consolidated Statements of Operations in which such gains and losses are reflected.
Description
Location of Gain or (Loss) Recognized in
 Income on Derivatives
Gain or (Loss)
Recognized in
Income on Derivatives
(in millions)
Derivatives designated as hedging instruments:
For the three months ended March 31, 2020:
Derivatives included with the inventory intermediation agreement obligationsCost of products and other$67.9 
For the three months ended March 31, 2019:
Derivatives included with the inventory intermediation agreement obligationsCost of products and other$(14.2)
Derivatives not designated as hedging instruments:
For the three months ended March 31, 2020:
Commodity contractsCost of products and other$78.2 
For the three months ended March 31, 2019:
Commodity contractsCost of products and other$31.7 
Hedged items designated in fair value hedges:
For the three months ended March 31, 2020:
Crude oil, intermediate and refined product inventoryCost of products and other$(67.9)
For the three months ended March 31, 2019:
Crude oil, intermediate and refined product inventoryCost of products and other$14.2 
Description
Location of Gain or (Loss) Recognized in
 Income on Derivatives
Gain or (Loss)
Recognized in
Income on Derivatives
  (in millions)
Derivatives designated as hedging instruments:  
For the three months ended June 30, 2019:  
Derivatives included with the inventory intermediation agreement obligationsCost of products and other$(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 no0 ineffectiveness related to the fair value hedges for the three and six months ended June 30,March 31, 2020 or 2019, or 2018.respectively.

47
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


16.18. SEGMENT INFORMATION
The Company’s operations are organized into two2 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 Condensed Consolidated Financial Statements and are included in Eliminations.
Refining
The Company’s Refining segment includes the operations of its five6 refineries, including certain related logistics assets that are not owned by PBFX. The Company’s refineries are located in Delaware City, Delaware, Paulsboro, New Jersey, Toledo, Ohio, New Orleans,Chalmette, Louisiana, Torrance, California and Torrance,Martinez, California. The refineries produce unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products in the United States. The Company purchases crude oil, other feedstocks and blending components from various third-party suppliers. The Company sells products throughout the Northeast, Midwest, Gulf Coast and West Coast of the United States, as well as in other regions of the United States and Canada, and is able to ship products to other international destinations.
Logistics
The Company’s Logistics segment is comprised of PBFX, a publicly-traded MLP, formed to own or lease, operate, develop and acquire crude oil and refined petroleum products terminals, pipelines, storage facilities and similar logistics assets. PBFX’s assets primarily consist of rail and truck terminals and unloading racks, tank farms and pipelines that were acquired from or contributed by PBF LLC and are located at, or nearby, the Company’s refineries. PBFX provides various rail, truck and marine terminaling services, pipeline transportation services and storage services to PBF Holding and/or its subsidiaries and third-party customers through fee-based commercial agreements. PBFX currently does not generate significant third-party revenuerevenues and intersegment related-party revenues are eliminated in consolidation. From a PBF Energy and PBF LLC perspective, the Company’s chief operating decision maker evaluates the Logistics segment as a whole without regard to any of PBFX’s individual operating segments.
The Company evaluates the performance of its segments based primarily on income from operations. Income from operations includes those revenues and expenses that are directly attributable to management of the respective segment. The Logistics segment’s revenues include intersegment transactions with the Company’s Refining segment at prices the Company believes are substantially equivalent to the prices that could have been negotiated with unaffiliated parties with respect to similar services. Activities of the Company’s business that are not included in the two2 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 two2 operating segments. The Company does not allocate non-operating income and expense items, including income taxes, to the individual segments. The RefineryRefining segment’s operating subsidiaries and PBFX are primarily pass-through entities with respect to income taxes.
Total assets of each segment consist of property, plant and equipment, inventories, cash and cash equivalents, accounts 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 the Company’s refinery and logistics operations.
Disclosures regarding the Company’s reportable segments with reconciliations to consolidated totals for the three and six months ended June 30,March 31, 2020 and March 31, 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.


48
PBF ENERGY INC. AND PBF ENERGY COMPANY LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Three Months Ended March 31, 2020
PBF Energy - (in millions)
RefiningLogisticsCorporateEliminationsConsolidated Total
Revenues$5,260.0  $93.0  $—  $(75.5) $5,277.5  
Depreciation and amortization expense105.4  11.3  2.9  —  119.6  
Income (loss) from operations(1,386.4) 47.7  (28.1) —  (1,366.8) 
Interest expense, net0.8  12.8  35.6  —  49.2  
Capital expenditures (1)1,304.1  6.1  5.0  —  1,315.2  

Three Months Ended March 31, 2019
RefiningLogisticsCorporate EliminationsConsolidated Total
Revenues$5,208.7  $78.8  $—  $(71.3) $5,216.2  
Depreciation and amortization expense94.3  8.7  2.8  —  105.8  
Income (loss) from operations (2)(3)389.5  34.2  (54.4) (4.7) 364.6  
Interest expense, net0.5  12.1  26.9  —  39.5  
Capital expenditures247.1  11.2  2.3  —  260.6  

Balance at March 31, 2020
RefiningLogisticsCorporate EliminationsConsolidated Total
Total assets$7,746.3  $1,088.7  $386.2  $(87.1) $9,134.1  

Balance at December 31, 2019
RefiningLogisticsCorporate EliminationsConsolidated Total
Total assets$8,154.8  $973.0  $52.7  $(48.1) $9,132.4  

Three Months Ended March 31, 2020
PBF LLC - (in millions)
RefiningLogisticsCorporateEliminationsConsolidated Total
Revenues$5,260.0  $93.0  $—  $(75.5) $5,277.5  
Depreciation and amortization expense105.4  11.3  2.9  —  119.6  
Income (loss) from operations(1,386.4) 47.7  (28.1) —  (1,366.8) 
Interest expense, net0.8  12.8  38.1  —  51.7  
Capital expenditures (1)1,304.1  6.1  5.0  —  1,315.2  

Three Months Ended March 31, 2019
RefiningLogisticsCorporate EliminationsConsolidated Total
Revenues$5,208.7  $78.8  $—  $(71.3) $5,216.2  
Depreciation and amortization expense94.3  8.7  2.8  —  105.8  
Income (loss) from operations (2)(3)389.5  34.2  (54.1) (4.7) 364.9  
Interest expense, net0.5  12.1  28.9  —  41.5  
Capital expenditures247.1  11.2  2.3  —  260.6  

Balance at March 31, 2020
RefiningLogisticsCorporate EliminationsConsolidated Total
Total assets$7,746.3  $1,088.7  $60.5  $(87.1) $8,808.4  

Balance at December 31, 2019
RefiningLogisticsCorporate EliminationsConsolidated Total
Total assets$8,154.8  $973.0  $49.4  $(48.1) $9,129.1  

49
 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


(1) The Refining segment includes capital expenditures of $1,176.2 million for the acquisition of the Martinez refinery in the first quarter of 2020.
(2) 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 outstanding limited liability company interests of TVP Holding Company LLC (“TVP Holding”) for a total consideration of $200.0 million (the “TVPC Acquisition”). Prior to the TVPC Acquisition, TVP Holding owned a 50% membership interest in Torrance Valley Pipeline Company LLC (“TVPC”). Subsequent to the closing of the TVPC Acquisition on May 31, 2019, PBFX owns 100% of the membership interests in TVPC.
(3) 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.


50
 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


17.19. NET INCOME (LOSS) PER SHARE OF PBF ENERGY
The Company grants certain equity-based compensation awards to employees and non-employee directors that are considered to be participating securities. Due to the presence of participating securities, the Company has calculated net income (loss) 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,		(in millions, except share and per share amounts)Three Months Ended March 31,
Basic Earnings Per Share:2019 2018 2019 2018Basic Earnings Per Share:20202019
Allocation of earnings:       Allocation of earnings:
Net income (loss) attributable to PBF Energy Inc. stockholders$(32.2) $272.1
 $197.0
 $302.5
Net income (loss) attributable to PBF Energy Inc. stockholders$(1,065.9) $229.2  
Less: Income allocated to participating securities0.1
 0.2
 0.2
 0.4
Less: Income allocated to participating securities0.1  0.1  
Income (loss) available to PBF Energy Inc. stockholders - basic$(32.3) $271.9
 $196.8
 $302.1
Income (loss) available to PBF Energy Inc. stockholders - basic$(1,066.0) $229.1  
Denominator for basic net income (loss) per Class A common share - weighted average shares119,181,845
 112,875,813
 119,885,386
 111,853,774
Denominator for basic net income (loss) per Class A common share - weighted average shares119,380,210  119,880,915  
Basic net income (loss) attributable to PBF Energy per Class A common share$(0.27) $2.41
 $1.64
 $2.70
Basic net income (loss) attributable to PBF Energy per Class A common share$(8.93) $1.91  
       
Diluted Earnings Per Share:       Diluted Earnings Per Share:
Numerator:       Numerator:
Income (loss) available to PBF Energy Inc. stockholders - basic$(32.3) $271.9
 $196.8
 $302.1
Income (loss) available to PBF Energy Inc. stockholders - basic$(1,066.0) $229.1  
Plus: Net income attributable to noncontrolling interest (1)
—
 6.1
 2.7
 7.4
Plus: Net income attributable to noncontrolling interest (1)
—  3.1  
Less: Income tax expense on net income attributable to noncontrolling interest (1)
—
 (1.5) (0.7) (1.9)
Less: Income tax expense (benefit) on net income attributable to noncontrolling interest (1)
Less: Income tax expense (benefit) on net income attributable to noncontrolling interest (1)
—  (0.8) 
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
Numerator for diluted net income (loss) per PBF Energy Class A common share - net income (loss) attributable to PBF Energy Inc. stockholders (1)
$(1,066.0) $231.4  
       
Denominator:(1)
       
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
Denominator for basic net income (loss) per PBF Energy Class A common share-weighted average shares119,380,210  119,880,915  
Effect of dilutive securities:(2)
       
Effect of dilutive securities:(2)
Conversion of PBF LLC Series A Units—
 1,838,196
 1,206,325
 2,681,980
Conversion of PBF LLC Series A Units—  1,206,325  
Common stock equivalents—
 1,695,264
 928,733
 1,214,173
Common stock equivalents—  1,088,504  
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
Denominator for diluted net income (loss) per PBF Energy Class A common share-adjusted weighted average shares119,380,210  122,175,744  
Diluted net income (loss) attributable to PBF Energy Inc. stockholders per PBF Energy Class A common share$(0.27) $2.37
 $1.63
 $2.66
Diluted net income (loss) attributable to PBF Energy Inc. stockholders per PBF Energy Class A common share$(8.93) $1.89  
       

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


(1)(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
Dividend Declared
On August 1, 2019, PBF Energy announced a dividend of $0.30 per share on outstanding PBF Energy Class A common stock. The dividendnet income (loss) attributable to PBF Energy used in the numerator of the diluted earnings per share calculation is payableadjusted to reflect the net income (loss), as well as the corresponding income tax expense (benefit) (based on August 30, 2019a 26.3% estimated annualized statutory corporate tax rate for the three months ended March 31, 2020 and a 26.0% estimated annualized statutory corporate tax rate for the three months ended March 31, 2019), attributable to the converted units. During the three months ended March 31, 2020, the potential conversion of 1,208,798 PBF LLC Series A Units into PBF Energy Class A common stockholdersstock 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 recordthe 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 performance share units and options and warrants to purchase 11,388,905 and 5,111,617 shares of PBF Energy Class A common stock and PBF LLC Series A units because they were anti-dilutive for the three months ended March 31, 2020 and March 31, 2019, respectively. For periods showing a net loss, all common stock equivalents and unvested restricted stock are considered anti-dilutive.


20. SUBSEQUENT EVENTS
Sale of Hydrogen Plants
On April 17, 2020, the Company closed on the sale of 5 hydrogen plants to Air Products and Chemicals, Inc. for gross cash proceeds of $530.0 million. In connection with the sale, the Company has agreed to enter into long term off-take arrangements covering hydrogen produced at each of the closefive plants on terms in line with similar arrangements in place elsewhere in its refining system.
Revolver Credit Facility Amendment
On May 7, 2020, PBF Holding amended its Revolving Credit Facility to increase its ability to incur certain secured debt from an amount equal to 10% of business on August 15, 2019.its total assets to 20% of its total assets.
2025 Senior Secured Notes Offering
On May 13, 2020, PBF Holding issued $1.0 billion in aggregate principal amount of 9.25% senior secured notes due 2025 for net proceeds of $987.5 million after deducting the initial purchasers’ discount and estimated offering expenses. The proceeds from this notes issuance will be used for general corporate purposes.
PBFX Distributions
On August 1, 2019,May 15, 2020, the Board of Directors of PBF GP announced a distribution of $0.515$0.30 per unit on outstanding common units of PBFX. The distribution is payable on August 30, 2019June 17, 2020 to PBFX unitholders of record at the close of business on August 15, 2019.May 27, 2020.



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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited financial statements of PBF Energy Inc. and PBF LLC included in the Annual Report on Form 10-K for the year ended December 31, 2018.2019 and the unaudited financial statements and related notes included in this report. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Cautionary Note Regarding Forward-Looking Statements.”

PBF Energy is the sole managing member of, and owner of an equity interest representing approximately 99.0%99.2% of the outstanding economic interests in PBF LLC as of June 30, 2019.March 31, 2020. PBF LLC is a holding company for the companies that directly and indirectly own and operate our business. PBF Holding Company LLC (“PBF Holding”) is a wholly-owned subsidiary of PBF LLC and PBF Finance Corporation (“PBF Finance”) is a wholly-owned subsidiary of PBF Holding. As of June 30, 2019,March 31, 2020, PBF LLC also holds a 48.2% limited partner interest and a non-economic general partner interest in PBF Logistics LP (“PBFX” or the “Partnership”),PBFX, a publicly-traded master limited partnership (“MLP”).

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

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Overview
We are one of the largest independent petroleum refiners and suppliers of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products in the United States. We sell our products throughout the Northeast, Midwest, Gulf Coast and West Coast of the United States, as well as in other regions of the United States, Canada and Mexico and are able to ship products to other international destinations. As of June 30, 2019,March 31, 2020, we own and operate fivesix domestic oil refineries and related assets with a combined processing capacity, known as throughput, of approximately 900,0001,050,000 barrels per day (“bpd”), and a weighted-average Nelson Complexity Index of 12.2.12.8. We operate in two reportable business segments: Refining and Logistics. Our fivesix oil refineries are all engaged in the refining of crude oil and other feedstocks into petroleum products, and are aggregated into the Refining segment. PBFX operates certain logistics assets such as crude oil and refined petroleum products terminals, pipelines, and storage facilities, which are aggregated into the Logistics segment.
Our fivesix refineries are located in Delaware City, Delaware, Paulsboro, New Jersey, Toledo, Ohio, New Orleans,Chalmette, Louisiana, Torrance, California and Torrance,Martinez, California. Each refinery is briefly described in the table below:
RefineryRegionNelson Complexity IndexThroughput Capacity (in barrels per day)PADD
Crude Processed (1)
Source (1)
RefineryRegionNelson Complexity IndexThroughput Capacity (in bpd)PADD
Crude Processed (1)
Source (1)
Delaware CityEast Coast11.3190,0001light sweet through heavy sourwater, railDelaware CityEast Coast11.3  190,000  1  light sweet through heavy sour  water, rail  
PaulsboroEast Coast13.2180,0001light sweet through heavy sourwaterPaulsboroEast Coast13.2  180,000  1  light sweet through heavy sour  water  
ToledoMid-Continent9.2170,0002light sweetpipeline, truck, railToledoMid-Continent9.2  170,000  2  light sweet  pipeline, truck, rail  
ChalmetteGulf Coast12.7189,0003light sweet through heavy sourwater, pipelineChalmetteGulf Coast12.7  189,000  3  light sweet through heavy sour  water, pipeline  
TorranceWest Coast14.9155,0005medium and heavypipeline, water, truckTorranceWest Coast14.9  155,000  5  medium and heavy  pipeline, water, truck  
MartinezMartinezWest Coast16.1  157,000  5  medium and heavy  pipeline and water  
________
(1) Reflects the typical crude and feedstocks and related sources utilized under normal operating conditions and prevailing market environments.
As of June 30, 2019,March 31, 2020, PBF Energy owned 119,915,672120,007,835 PBF LLC Series C Units and our current and former executive officers and directors and certain employees and others held 1,206,3251,019,916 PBF LLC Series A Units (we refer to all of the holders of the PBF LLC Series A Units as “the members of PBF LLC other than PBF Energy”). As a result, the holders of our issued and outstanding shares of our PBF Energy Class A common stock have approximately 99.0%99.2% 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 1.0%0.8% of the voting power in us (99.0% and 1.0% as of December 31, 2018,2019, respectively).
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Business Developments
Recent significant business developments affecting us are discussed below.
Pending COVID-19
The recent outbreak of the COVID-19 pandemic and certain developments in the global oil markets are negatively impacting worldwide economic and commercial activity and financial markets, as well as global demand for petroleum and petrochemical products. The COVID-19 pandemic and related governmental responses have also resulted in significant business and operational disruptions, including business closures, supply chain disruptions, travel restrictions, stay-at-home orders and limitations on the availability of workforces and has resulted in significantly lower demand for refined petroleum products. We believe, but cannot guarantee, that demand for refined petroleum products will ultimately rebound as governmental restrictions are lifted. However, the ultimate significance of the COVID-19 pandemic on our business will be dictated by its currently unknowable duration and the rate at which people are willing and able to resume activities even after governmental restrictions are lifted. In addition, recent global geopolitical and macroeconomic events have further contributed to the decline in crude oil prices and the overall volatility in crude oil and refined product prices.
The price of refined products we sell and the crude oil we purchase impacts our revenues, income from operations, net income and cash flows. In addition, a decline in the market prices for products and feedstocks held in our inventories below the carrying value of our inventory may result in the adjustment of the value of our inventories to the lower market price and a corresponding loss on the value of our inventories, and any such adjustment is likely to be material.
We are actively responding to the impacts from these matters on our business. In late March and through early April 2020, we started reducing the amount of crude oil processed at our refineries in response to the decreased demand for our products and we temporarily idled various units at certain of our refineries to optimize our production in light of prevailing market conditions.
We have adjusted our operational plans to the evolving market conditions and previously announced steps to lower our 2020 operating expenses budget through significant reductions in discretionary activities and third party services. In March 2020, we estimated that these efforts would result in a reduction in our operating expenses budget of approximately $125.0 million. We have subsequently identified additional reductions and currently estimate an aggregate reduction of approximately $140.0 million in our 2020 operating expenses budget. In addition, we are currently operating our refineries at minimum rates and expect near-term throughput to be in the 650,000 to 700,000 barrel per range for our refining system. As the market conditions develop and the demand outlook becomes clearer, we will continue to adjust our operations in response.
In addition to the steps above with respect to our operations, we are also addressing our liquidity. We are taking the following measures, some of which were previously announced in March 2020:
•Raised net proceeds of approximately $987.5 million through the May 13, 2020 issuance of $1.0 billion in aggregate principal amount of 9.25% senior secured notes due 2025 (the “2025 Senior Secured Notes”);
•Closed on the sale of five hydrogen plants for gross cash proceeds of $530.0 million on April 17, 2020;
•Reduced 2020 planned capital expenditures by approximately $240.0 million. We subsequently identified additional reductions in capital expenditures and currently estimate an aggregate reduction of approximately $357.0 million in 2020 planned capital expenditures, an approximate 49% reduction to our previous 2020 budget. We intend to satisfy all required safety, environmental and regulatory capital commitments, while continuing to explore further opportunities to minimize our near-term capital expenditure requirements;
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•Established a company wide COVID-19 Response Team and increased precautions to keep our employees healthy and safe, including social distancing, additional personal protective equipment and enhanced facility cleanings. We have not had to temporarily close any of our refineries due to a COVID-19 outbreak;
•Reduced corporate overhead expenses by over $20.0 million on an annual basis primarily through salary reductions. Specifically, the Board of Directors of PBF Energy and management have reduced their compensation by 50%, while Chairman and CEO Thomas Nimbley’s salary has been reduced by 67%. In addition, more than 50% of our corporate and non-represented employees have also reduced their salaries;
•Suspended PBF Energy’s quarterly dividend of $0.30 per share, anticipated to preserve approximately $35.0 million of cash each quarter; and
•Evaluating various other liquidity and cash flow optimization options.
Many uncertainties remain with respect to the COVID-19 pandemic, including the extent to which the COVID-19 pandemic will continue to impact our business and operations, the effectiveness of the actions undertaken by national, regional, state and local governments and health officials to contain the virus or treat its effects, and how quickly and to what extent economic conditions improve and normal business and operating conditions resume. We are unable to predict the ultimate economic impacts from the COVID-19 pandemic, however, we have been and will likely continue to be adversely impacted. We believe, to the extent possible, we have proactively addressed many of the known impacts of the COVID-19 pandemic and will strive to continue to do so, but there can be no guarantee that these measures will be effective.
Refer to “Liquidity” and “Part II - Other Information - Item 1A. Risk Factors” for further information.
Sale of Hydrogen Plants
On April 17, 2020, we closed on the sale of five hydrogen plants to Air Products and Chemicals, Inc. for gross cash proceeds of $530.0 million. In connection with the sale we have agreed to enter into long-term off-take arrangements covering hydrogen produced at each of the five plants on terms in line with similar arrangements in place elsewhere in our refining system.
Receivables Purchase Agreement
On February 18, 2020, in connection with the entry into a $300.0 million uncommitted receivables purchase facility (the “Receivables Facility”), we amended the asset-based revolving credit agreement (“Revolving Credit Facility”) and entered into a related intercreditor agreement to allow us to sell certain Eligible Receivables (as defined in the agreement governing the Revolving Credit Facility (the “Revolving Credit Agreement”) derived from the sale of refined product over truck racks. Under the Receivables Facility, we sell such receivables to a bank subject to bank approval and certain conditions. The sales of receivables under the Receivables Facility are absolute and irrevocable but subject to certain repurchase obligations under certain circumstances.

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Factors Affecting Comparability Between Periods
Our results have been affected by the following events, the understanding of which will aid in assessing the comparability of our period to period financial performance and financial condition.
COVID-19
The impact of the unprecedented global health and economic crisis sparked by the COVID-19 pandemic was amplified late in the quarter ended March 31, 2020 due to movements made by the world’s largest oil producers to increase market share in the current environment. This created simultaneous shocks in oil supply and demand resulting in an economic challenge to our industry which has not occurred since our formation. This combination has resulted in significant demand reduction for our refined products and abnormal volatility in oil commodity prices, which may continue for the foreseeable future. Our results for the quarter ending March 31, 2020 were impacted by the decreased demand for refined products and the significant decline in the price of crude oil, both of which negatively impacted our revenues, cost of products sold and operating income towards the end of the quarter and lowered our liquidity. Throughput rates across our refining system also decreased, most significantly towards the end of the quarter, and we are currently operating our refineries at minimum rates. Refer to “Item 1A. Risk Factors” included in “Part II - Other Information” of this Form 10-Q for further information.
Debt and Credit Facilities
Senior Notes
On January 24, 2020, we issued $1.0 billion in aggregate principal amount of 6.00% senior unsecured notes due 2028 (the "2028 Senior Notes"). The net proceeds from this offering were approximately $987.0 million after deducting the initial purchasers’ discount and estimated offering expenses. We used the proceeds primarily to fully redeem our 7.00% senior notes due 2023 (the “2023 Senior Notes”) and to fund a portion of the cash consideration for the Martinez Acquisition (as defined below).
On February 14, 2020, we exercised our rights under the indenture governing the 2023 Senior Notes to redeem all of the outstanding 2023 Senior Notes at a price of 103.5% of the aggregate principal amount thereof plus accrued and unpaid interest. The aggregate redemption price for all 2023 Senior Notes approximated $517.5 million plus accrued and unpaid interest. The difference between the carrying value of the 2023 Senior Notes on the date they were redeemed and the amount for which they were redeemed was $22.2 million and has been classified as Debt extinguishment costs in the Condensed Consolidated Statement of Operations as of March 31, 2020.
Refer to “Note 7 - Debt” of our Notes to Condensed Consolidated Financial Statements, for further information.
Revolving Credit Facility
During the three months ended March 31, 2020, we used advances under our Revolving Credit Facility to fund a portion of the Martinez Acquisition (as defined below) and other general corporate purposes. The outstanding borrowings under the Revolving Credit Facility as of March 31, 2020 were $900.0 million. There were no outstanding borrowings under the Revolving Credit Facility as of December 31, 2019.
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Martinez Acquisition
On June 11, 2019 (the “Execution Date”), PBF Holding entered into a definitive Sale and Purchase Agreement (the “Sale and Purchase Agreement”) withFebruary 1, 2020, we acquired from Equilon Enterprises LLC d/b/a Shell Oil Products US (the "Seller"), to purchase the Martinez refinery and related logistics assets (collectively, the “Martinez Acquisition”"Martinez Acquisition"). The obligations of PBF Holding under the Sale, pursuant to a sale and purchase agreement dated June 11, 2019 (the “Sale and Purchase Agreement have been guaranteed by the Company.Agreement”). The Martinez refinery is located on an 860-acre site in the City of Martinez, 30 miles northeast of San Francisco, California. The refinery is a high-conversion 157,000 bpd, dual-coking facility with a Nelson Complexity Index of 16.1, making it one of the most complex refineries in the United States. The facility is strategically positioned in Northern California and provides for operating and commercial synergies with the Torrance refinery located in Southern California. The Martinez Acquisition is expected to further increaseincreased our total throughput capacity to over 1,000,000 bpd.
In addition to refining assets, the Martinez Acquisition includes a number of high-quality onsite logistics assets including a deep-water marine facility, product distribution terminals and refinery crude and product storage facilities with approximately 8.8 million barrels of shell capacity.
The aggregate purchase price for the Martinez Acquisition will range from $900.0was $1,253.4 million, to $1.0 billion in cash, based on the date the transaction closes, plus inventory andincluding final working capital to be valued at closing. In addition, PBF Holding also has anof $216.1 million and the obligation to make certain post-closing earn-out 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.closing date (the “Martinez Contingent Consideration”). The purchase price is also subject to other customary purchase price adjustments. The Martinez Acquisition is expected to close in the fourth quarter of 2019, subject to satisfaction of customary closing 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 assets must be operational in all material respects and in substantially the same condition and repair, ordinary wear and tear excepted, as of the Execution Date.
We expect to finance the transaction withwas financed through a combination of cash on hand, including proceeds from the 2028 Senior Notes, and debt. Followingborrowings under the expected completionRevolving Credit Facility.
Inventory Intermediation Agreements
On August 29, 2019, we and our subsidiaries, Delaware City Refining Company LLC (“DCR”) and Paulsboro Refining Company LLC (“PRC”), entered into amended and restated inventory intermediation agreements with J. Aron (as amended from time to time, the “Inventory Intermediation Agreements”), pursuant to which certain terms of the Martinez Acquisition, our weighted average Nelson Complexity Index will increaseInventory Intermediation Agreements were amended and restated, including, among other things, the maturity date. The Inventory Intermediation Agreement by and among J. Aron, PBF Holding and PRC was extended to 12.8.December 31, 2021, which term may be further extended by mutual consent of the parties to December 31, 2022 and the Inventory Intermediation Agreement by and among J. Aron, PBF Holding and DCR was extended to June 30, 2021, which term may be further extended by mutual consent of the parties to June 30, 2022.

Factors Affecting Comparability Between Periods
Our results have been affectedPursuant to each Inventory Intermediation Agreement, J. Aron continues to purchase and hold title to the J. Aron Products, produced by the following events,East Coast Refineries, and delivered into our J. Aron Storage Tanks. Furthermore, J. Aron agrees to sell the understanding of which will aid in assessingJ. Aron Products back to the comparabilityEast Coast Refineries as the J. Aron Products are discharged out of our periodJ. Aron Storage Tanks. J. Aron has the right to period financial performancestore the J. Aron Products purchased in tanks under the Inventory Intermediation Agreements and financial condition.will retain these storage rights for the term of the agreements. PBF Holding continues to market and sell the J. Aron Products independently to third parties.
PBFX Registered DirectEquity 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“2019 Registered Direct Offering”) for gross proceeds of approximately $135.0 million. The PBFX2019 Registered Direct Offering closed on April 29, 2019.
Inventory Intermediation Agreements
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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 (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 are 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 transition method to apply the 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 public 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 isrevenues are 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 inception of PBFX in 2014, PBF LLC and PBFX have entered into a series of drop-down transactions. Such transactions and third-party acquisitions made by PBFX in the current or prior periodperiods are discussed below.
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 outstanding 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 50% membership interest in the Torrance Valley Pipeline Company LLC (“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 PBFX2019 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 $127.0five-year, $500.0 million including working capital and the 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 (“TRLC”), whose assets consist of a loading and unloading rail facility located at PBF 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 (the “Delaware Ethanol Storage Facility” and collectively with the Toledo Rail Products Facility, the Chalmette Truck Rack, the Chalmette Rosin Yard, and the Paulsboro Lube Oil Terminal, the “Development Assets”). The acquisition of the Development Assets closed on July 31, 2018 for total consideration of $31.6 million consisting of 1,494,134 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 borrowings under the PBFX Revolving Credit Facility.
PBFX Revolving Credit Facility
On July 30, 2018, PBFX entered into an amended and restated revolving credit facility (as amended, the(the “PBFX Revolving Credit Facility”).
PBFX IDR Restructuring
On February 28, 2019, PBFX closed on the transaction contemplated by the Equity Restructuring Agreement with Wells Fargo, National Association, as administrative agent,PBF LLC and a syndicate of lenders. ThePBF 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 Revolving Credit Facility amended and restatedcommon units (the “IDR Restructuring”). Subsequent to the May 2014 PBFX Revolving Credit Facility to, among other things, increase the maximum commitment available to PBFX from $360.0 million to $500.0 million and extend the maturity date to July 2023. PBFX has the ability to increase the maximum amountclosing of the PBFX Revolving Credit Facility by an aggregate amount of upIDR Restructuring, no distributions were made to $250.0 million,PBF LLC with respect to a total facility size of $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 advancesIDRs and the fees for letters of creditnewly issued PBFX common units are consistent with the May 2014 PBFX Revolving Credit Facility. The PBFX Revolving Credit Facility is guaranteedentitled to normal distributions by a limited guaranty of collection from PBF LLC.PBFX.
The outstanding balance under the PBFX 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 2, 2018, PBF Holding and certain of its wholly-owned subsidiaries, as borrowers or subsidiary guarantors, replaced our existing asset-based revolving credit agreement dated as of August 15, 2014 (the “August 2014 Revolving Credit Agreement”) with a new asset-based revolving credit agreement (the “Revolving Credit Facility"). Among other things, the Revolving 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 Borrowing 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 up to $3.5 billion. The commitment fees on the unused portion, the interest rate on advances and the fees for letters of credit are consistent with the August 2014 Revolving Credit Agreement.
There were no outstanding borrowings under the Revolving Credit Facility as of 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 six months ended June 30,March 31, 2020 and 2019 and 2018 (amounts in millions, except per share data). Differences between the results of operations of PBF Energy and PBF LLC primarily pertain to income taxes, interest expense and noncontrolling interest as shown below. Earnings per share information applies only to the financial results of PBF Energy. We operate in two reportable business segments: Refining and Logistics. Our oil refineries, excluding the assets owned by PBFX, are all engaged in the refining of crude oil and other feedstocks into petroleum products, and are aggregated into the Refining segment. PBFX is a publicly-traded MLP that operates certain logistics assets such as crude oil and refined petroleum products terminals, pipelines and storage facilities. PBFX’s operations are aggregated into the Logistics segment. We do not separately discuss our results by individual segments as, apart from PBFX’s third-party acquisitions, our Logistics segment did not have any significant third-party revenuerevenues and a significant portion of its operating results eliminate in consolidation.


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PBF EnergyThree Months Ended 
 June 30,		 Six Months Ended 
 June 30,		PBF EnergyThree Months Ended March 31,
2019 2018 2019 201820202019
Revenues$6,560.0
 $7,444.1
 $11,776.2
 $13,246.9
Revenues$5,277.5  $5,216.2  
Cost and expenses:       Cost and expenses:
Cost of products and other5,955.8
 6,452.5
 10,165.0
 11,584.6
Cost of products and other5,963.3  4,209.2  
Operating expenses (excluding depreciation and amortization expense as reflected below)433.2
 417.7
 912.2
 843.8
Operating expenses (excluding depreciation and amortization expense as reflected below)531.7  479.0  
Depreciation and amortization expense104.2
 89.7
 207.2
 173.0
Depreciation and amortization expense116.7  103.0  
Cost of sales6,493.2
 6,959.9
 11,284.4
 12,601.4
Cost of sales6,611.7  4,791.2  
General and administrative expenses (excluding depreciation and amortization expense as reflected below)53.6
 58.7
 111.2
 121.5
General and administrative expenses (excluding depreciation and amortization expense as reflected below)82.5  57.6  
Depreciation and amortization expense2.9
 2.6
 5.7
 5.3
Depreciation and amortization expense2.9  2.8  
Loss on sale of assets0.8
 0.6
 0.8
 0.7
Change in fair value of contingent considerationChange in fair value of contingent consideration(52.8) —  
Total cost and expenses6,550.5
 7,021.8
 11,402.1
 12,728.9
Total cost and expenses6,644.3  4,851.6  
       
Income from operations9.5
 422.3
 374.1
 518.0
Income (loss) from operationsIncome (loss) from operations(1,366.8) 364.6  
Other income (expense):       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)Interest expense, net(49.2) (39.5) 
Change in Tax Receivable Agreement liabilityChange in Tax Receivable Agreement liability(11.6) —  
Change in fair value of catalyst obligationsChange in fair value of catalyst obligations11.7  (3.1) 
Debt extinguishment costsDebt extinguishment costs(22.2) —  
Other non-service components of net periodic benefit cost—
 0.2
 (0.1) 0.5
Other non-service components of net periodic benefit cost1.0  (0.1) 
Income (loss) before income taxes(32.1) 383.2
 289.8
 436.0
Income (loss) before income taxes(1,437.1) 321.9  
Income tax (benefit) expense(10.5) 95.5
 70.0
 106.5
Income tax (benefit) expense(374.6) 80.5  
Net income (loss)(21.6) 287.7
 219.8
 329.5
Net income (loss)(1,062.5) 241.4  
Less: net income attributable to noncontrolling interests10.6
 15.6
 22.8
 27.0
Less: net income attributable to noncontrolling interests3.4  12.2  
Net income (loss) attributable to PBF Energy Inc. stockholders$(32.2) $272.1
 $197.0
 $302.5
Net income (loss) attributable to PBF Energy Inc. stockholders$(1,065.9) $229.2  
       
Consolidated gross margin$66.8
 $484.2
 $491.8
 $645.5
Consolidated gross margin$(1,334.2) $425.0  
       
Gross refining margin (1)
$526.5
 $928.3
 $1,459.0
 $1,538.3
Gross refining margin (1)
$(773.4) $932.5  
       
Net income (loss) available to Class A common stock per share:       Net income (loss) available to Class A common stock per share:
Basic$(0.27) $2.41
 $1.64
 $2.70
Basic$(8.93) $1.91  
Diluted$(0.27) $2.37
 $1.63
 $2.66
Diluted$(8.93) $1.89  

(1) See Non-GAAP Financial Measures.


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PBF LLCThree Months Ended 
 June 30,		 Six Months Ended 
 June 30,		PBF LLCThree Months Ended March 31,
2019 2018 2019 201820202019
Revenues$6,560.0
 $7,444.1
 $11,776.2
 $13,246.9
Revenues$5,277.5  $5,216.2  
Cost and expenses:       Cost and expenses:
Cost of products and other5,955.8
 6,452.5
 10,165.0
 11,584.6
Cost of products and other5,963.3  4,209.2  
Operating expenses (excluding depreciation and amortization expense as reflected below)433.2
 417.7
 912.2
 843.8
Operating expenses (excluding depreciation and amortization expense as reflected below)531.7  479.0  
Depreciation and amortization expense104.2
 89.7
 207.2
 173.0
Depreciation and amortization expense116.7  103.0  
Cost of sales6,493.2
 6,959.9
 11,284.4
 12,601.4
Cost of sales6,611.7  4,791.2  
General and administrative expenses (excluding depreciation and amortization expense as reflected below)53.2
 58.2
 110.5
 120.8
General and administrative expenses (excluding depreciation and amortization expense as reflected below)82.5  57.3  
Depreciation and amortization expense2.9
 2.6
 5.7
 5.3
Depreciation and amortization expense2.9  2.8  
Loss on sale of assets0.8
 0.6
 0.8
 0.7
Change in fair value of contingent considerationChange in fair value of contingent consideration(52.8) —  
Total cost and expenses6,550.1
 7,021.3
 11,401.4
 12,728.2
Total cost and expenses6,644.3  4,851.3  
       
Income from operations9.9
 422.8
 374.8
 518.7
Income (loss) from operationsIncome (loss) from operations(1,366.8) 364.9  
       
Other income (expense):       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)Interest expense, net(51.7) (41.5) 
Change in fair value of catalyst obligationsChange in fair value of catalyst obligations11.7  (3.1) 
Debt extinguishment costsDebt extinguishment costs(22.2) —  
Other non-service components of net periodic benefit cost—
 0.2
 (0.1) 0.5
Other non-service components of net periodic benefit cost1.0  (0.1) 
Income (loss) before income taxes(34.1) 381.7
 286.1
 432.7
Income (loss) before income taxes(1,428.0) 320.2  
Income tax expense (benefit)1.8
 (4.0) (5.4) (4.7)Income tax expense (benefit)14.2  (7.2) 
Net income (loss)(35.9) 385.7
 291.5
 437.4
Net income (loss)(1,442.2) 327.4  
Less: net income attributable to noncontrolling interests11.1
 9.4
 20.1
 19.6
Less: net income attributable to noncontrolling interests18.0  9.0  
Net income (loss) attributable to PBF Energy Company LLC$(47.0) $376.3
 $271.4
 $417.8
Net income (loss) attributable to PBF Energy Company LLC$(1,460.2) $318.4  



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Operating HighlightsThree Months Ended 
 June 30,		 Six Months Ended 
 June 30,		Operating HighlightsThree Months Ended March 31,
2019 2018 2019 201820202019
Key Operating Information       Key Operating Information
Production (bpd in thousands)854.2
 866.1
 796.7
 831.2
Production (bpd in thousands)867.0  737.7  
Crude oil and feedstocks throughput (bpd in thousands)854.1
 866.6
 798.9
 833.3
Crude oil and feedstocks throughput (bpd in thousands)852.9  743.1  
Total crude oil and feedstocks throughput (millions of barrels)77.7
 78.8
 144.6
 150.8
Total crude oil and feedstocks throughput (millions of barrels)77.6  66.9  
Consolidated gross margin per barrel of throughput$0.85
 $6.14
 $3.40
 $4.28
Consolidated gross margin per barrel of throughput$(17.19) $6.35  
Gross refining margin, excluding special items, per barrel of throughput (1)
$9.10
 $9.77
 $7.85
 $8.57
Gross refining margin, excluding special items, per barrel of throughput (1)
$6.60  $6.38  
Refinery operating expense, per barrel of throughput$5.27
 $5.11
 $5.97
 $5.40
Refinery operating expense, per barrel of throughput$6.54  $6.78  
       
Crude and feedstocks (% of total throughput) (2)
       
Crude and feedstocks (% of total throughput) (2)
Heavy30% 38% 31% 37%Heavy44 %32 %
Medium28% 28% 30% 31%Medium23 %32 %
Light26% 21% 25% 20%Light19 %24 %
Other feedstocks and blends16% 13% 14% 12%Other feedstocks and blends14 %12 %
Total throughput100% 100% 100% 100%Total throughput100 %100 %
       
Yield (% of total throughput)       Yield (% of total throughput)
Gasoline and gasoline blendstocks49% 48% 48% 49%Gasoline and gasoline blendstocks51 %46 %
Distillates and distillate blendstocks31% 32% 32% 32%Distillates and distillate blendstocks32 %32 %
Lubes1% 1% 1% 1%Lubes1 %1 %
Chemicals2% 2% 2% 2%Chemicals1 %2 %
Other17% 17% 17% 16%Other17 %18 %
Total yield100% 100% 100% 100%Total yield102 %99 %


(1)See Non-GAAP Financial Measures.
(2)We define heavy crude oil as crude oil with American Petroleum Institute (API) gravity less than 24 degrees. We define medium crude oil as crude oil with API gravity between 24 and 35 degrees. We define light crude oil as crude oil with API gravity higher than 35 degrees.


(1) See Non-GAAP Financial Measures.
(2) We define heavy crude oil as crude oil with American Petroleum Institute (“API”) gravity less than 24 degrees. We define medium crude oil as crude oil with API gravity between 24 and 35 degrees. We define light crude oil as crude oil with API gravity higher than 35 degrees.
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The table below summarizes certain market indicators relating to our operating results as reported by Platts. 
Three Months Ended March 31,
20202019
(dollars per barrel, except as noted)
Dated Brent crude oil$49.70  $63.26  
West Texas Intermediate (WTI) crude oil$45.56  $54.87  
Light Louisiana Sweet (LLS) crude oil$47.81  $62.38  
Alaska North Slope (ANS) crude oil$51.07  $64.39  
Crack Spreads
Dated Brent (NYH) 2-1-1$9.96  $9.85  
WTI (Chicago) 4-3-1$7.37  $12.33  
LLS (Gulf Coast) 2-1-1$10.42  $9.89  
ANS (West Coast-LA) 4-3-1$13.36  $13.54  
ANS (West Coast-SF) 3-2-1$9.65  $11.14  
Crude Oil Differentials
Dated Brent (foreign) less WTI$4.14  $8.39  
Dated Brent less Maya (heavy, sour)$8.87  $4.50  
Dated Brent less WTS (sour)$4.70  $9.55  
Dated Brent less ASCI (sour)$4.29  $2.35  
WTI less WCS (heavy, sour)$16.85  $9.96  
WTI less Bakken (light, sweet)$3.46  $(0.25) 
WTI less Syncrude (light, sweet)$1.80  $(0.04) 
WTI less LLS (light, sweet)$(2.25) $(7.51) 
WTI less ANS (light, sweet)$(5.51) $(9.52) 
Natural gas (dollars per MMBTU)$1.87  $2.87  
 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,
 2019 2018 2019 2018
 (dollars per barrel, except as noted)
Dated Brent crude oil$68.96
 $74.42
 $66.16
 $70.75
West Texas Intermediate (WTI) crude oil$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$13.54
 $14.96
 $11.72
 $13.90
WTI (Chicago) 4-3-1$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$9.06
 $6.40
 $8.74
 $5.23
Dated Brent less Maya (heavy, sour)$7.27
 $12.40
 $5.69
 $10.78
Dated Brent less WTS (sour)$10.73
 $14.78
 $10.15
 $10.20
Dated Brent less ASCI (sour)$3.96
 $5.09
 $3.17
 $4.84
WTI less WCS (heavy, sour)$12.53
 $18.26
 $11.28
 $22.17
WTI less Bakken (light, sweet)$1.06
 $0.39
 $0.41
 $0.70
WTI less Syncrude (light, sweet)$(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)$2.51
 $2.85
 $2.69
 $2.82

Three Months Ended June 30, 2019March 31, 2020 Compared to the Three Months Ended June 30, 2018March 31, 2019
Overview— PBF Energy net loss was $21.6$1,062.5 million for the three months ended June 30, 2019March 31, 2020 compared to net income of $287.7$241.4 million for the three months ended June 30, 2018.March 31, 2019. PBF LLC net loss was $35.9$1,442.2 million for the three months ended June 30, 2019March 31, 2020 compared to net income of $385.7$327.4 million for the three months ended June 30, 2018.March 31, 2019. Net loss attributable to PBF Energy stockholders was $32.2$1,065.9 million, or $(0.27)$(8.93) per diluted share, for the three months ended June 30, 2019March 31, 2020 ($(0.27)8.93 per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net loss, or $0.83$(1.19) per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net incomeloss excluding special items, as described below in Non-GAAP Financial Measures) compared to net income attributable to PBF Energy stockholders of $272.1$229.2 million, or $2.37$1.89 per diluted share, for the three months ended June 30, 2018March 31, 2019 ($2.371.89 per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net income, or $1.38$(1.18) per share on a fully-exchanged, fully-diluted basis based on adjusted fully-converted net incomeloss excluding special items, as described below in Non-GAAP Financial Measures). The net income or loss attributable to PBF Energy stockholders represents PBF Energy’s equity interest in PBF LLC’s pre-tax income,loss, less applicable income tax (benefit) expense. PBF Energy’s weighted-average equity interest in PBF LLC was 99.0% and 98.4%99.0% for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively.
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Our results for the three months ended June 30, 2019March 31, 2020 were negatively impacted by special items consisting of a non-cash, pre-tax lower of cost or market (“LCM”) inventory adjustment of approximately $182.0$1,285.6 million, or $133.8$947.5 million net of tax, a pre-tax change in the Tax Receivable Agreement liability of $11.6 million, or $8.5 million net of tax and pre-tax debt extinguishment costs associated with the early redemption of our 2023 Senior Notes of $22.2 million, or $16.4 million net of tax. These unfavorable impacts were partially offset by the change in the fair value of the contingent consideration primarily related to the Martinez Acquisition of $52.8 million, or $38.9 million net of tax. Our results for the three months ended June 30, 2018March 31, 2019 were positively impacted by a non-cash pre-tax LCM inventory adjustment of approximately $158.0$506.0 million, or $116.3$374.4 million net 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 negativelypositively impacted by unfavorablefavorable movements in certain crude differentials and overall lowerhigher throughput volumes and barrels sold across the majority of our refineries, as a result of ongoing turnarounds, whichoffset by lower margins in certain regions. Refining margins for the three months ended March 31, 2020 compared to the three months ended March 31, 2019 were completed inmixed with stronger margins on the second quarter of 2019, despite stronger refiningEast Coast and Gulf Coast offset by weaker margins in the Mid-Continent and West Coast. Our results for the three months ended June 30, 2019March 31, 2020 were also negatively impacted by higher general and administrative expenses associated with higher employee-related compensation and transaction costs and increased depreciation and amortization expense associated with our continued investment in our refining assets and the effect of significant turnaround activityassets. Additionally, during the first halfquarter we began to experience the negative impacts of the year.COVID-19 pandemic on our business through a decline in the demand for our refined products and a precipitous decrease in the prices for crude oil and refined products.
Revenues— Revenues totaled $6.6$5.3 billion for the three months ended June 30, 2019March 31, 2020 compared to $7.4$5.2 billion for the three months ended June 30, 2018, a decreaseMarch 31, 2019, an increase of approximately $0.9$0.1 billion, or 11.9%1.9%. Revenues per barrel were $74.24$57.89 and $80.39$66.19 for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, a decrease of 7.7%12.5% directly related to lower hydrocarbon commodity prices. For the three months ended June 30,March 31, 2020, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 329,300 bpd, 90,100 bpd, 174,500 bpd and 259,000 bpd, respectively. For the three months ended March 31, 2019, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 325,800305,000 bpd, 163,200148,000 bpd, 201,400164,600 bpd and 163,700125,500 bpd, respectively. For the three months ended June 30, 2018,March 31, 2020, the total throughput ratesbarrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 359,900365,300 bpd, 152,900131,300 bpd, 188,500213,800 bpd and 165,300291400 bpd, respectively. The throughput rates at our East Coast refineries were lower in the three months ended June 30, 2019 compared to the same period in 2018 due to planned 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 the Mid-Continent were higher in the three months ended June 30, 2019 compared to the same period in 2018 due to a planned turnaround at our Toledo refinery in the second quarter of the prior year. For the three months ended June 30,March 31, 2019, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 358,700349,200 bpd, 171,800158,000 bpd, 243,800215,600 bpd and 196,800152,800 bpd, respectively. For
The throughput rates at the majority of our refineries were higher in the three months ended June 30, 2018,March 31, 2020 compared to the total barrels soldsame period in 2019 due to planned downtime associated with turnarounds of the coker and associated units at our East Coast,Delaware City and Torrance refineries and unplanned downtime at our Delaware City refinery in the first quarter of 2019. Throughput rates at our Mid-Continent Gulf Coast and West Coast refineries averaged approximately 401,100 bpd, 162,900 bpd, 250,000 bpd and 203,600 bpd, respectively.refinery were lower in the three months ended March 31, 2020 compared to the same period in 2019 due to a planned turnaround at our Toledo refinery during the first quarter of 2020. Our Martinez refinery was not acquired until the first quarter of 2020. Total refined product barrels sold were higher than throughput rates, reflecting sales from inventory as well as sales and purchases of refined products outside our refineries.
64

Consolidated Gross Margin— Consolidated gross margin totaled $66.8$(1,334.2) million for the three months ended June 30, 2019March 31, 2020, compared to $484.2$425.0 million for the three months ended June 30, 2018,March 31, 2019, a decrease of approximately $417.4$1,759.2 million. Gross refining margin (as described below in Non-GAAP Financial Measures) totaled $526.5$(773.4) million, or $6.76$(9.96) per barrel of throughput for the three months ended June 30, 2019March 31, 2020 compared to $928.3$932.5 million, or $11.77$13.94 per barrel of throughput for the three months ended June 30, 2018,March 31, 2019, a decrease of approximately $401.8$1,705.9 million. Gross refining margin excluding special items totaled $708.5$512.2 million or $9.10$6.60 per barrel of throughput for the three months ended June 30, 2019March 31, 2020 compared to $770.3$426.5 million or $9.77$6.38 per barrel of throughput for the three months ended June 30, 2018, a decreaseMarch 31, 2019, an increase of $61.8$85.7 million.
Consolidated gross margin and gross refining margin were negatively impacted by a non-cash LCM adjustment of approximately $182.0$1,285.6 million on a net basis resulting from the decrease in crude oil and refined product prices in comparisonfrom the year ended 2019 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 2018.2020. Gross refining margin excluding the impact of special items decreasedincreased due to unfavorablefavorable movements in certain crude differentials and reducedrefining margins and increased throughput rates in the East Coast and West Coast,majority of our refineries, partially offset by higherlower throughput rates in the Mid-Continent and Gulf Coast and higherweaker crack spreads in the Mid-Continent and West Coast. For the three months ended March 31, 2019, special items impacting our margin calculations included a non-cash LCM inventory adjustment of approximately $506.0 million on a net basis, resulting from an increase in crude oil and refined product prices.
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$36.8 million for the three months ended June 30, 2019March 31, 2020 in comparison to $39.2$29.5 million for the three months ended June 30, 2018.

March 31, 2019.
Average industry margins were mixed during the three months ended June 30, 2019March 31, 2020 in comparison to the same period in 2018,2019, primarily as a resultdue to varying timing and extent of varyingthe impacts of the COVID-19 pandemic on regional inventory levels of gasolinedemand and seasonal and unplanned refining downtime issues impacting product margins.commodity prices. Crude oil differentials were generally unfavorablefavorable in comparison to the same period in 2018,2019. However, such differentials weakened towards the end of the quarter, primarily due to the negative impact of the COVID-19 pandemic, combined with notable light-heavy crude differential compression negatively impacting our refining gross margin.the movements made by the world’s largest oil producers to increase market share in the current environment, creating simultaneous shocks in oil supply and demand.
On the East Coast, the Dated Brent (NYH) 2-1-1 industry crack spread was approximately $13.54$9.96 per barrel, or 9.5% lower,1.1% higher, in the three months ended June 30, 2019,March 31, 2020, as compared to $14.96$9.85 per barrel in the same period in 2018.2019. Our margins were negativelypositively impacted from our refinery specific slate on the East Coast by tightening in thestronger Dated Brent/Maya differential,and WTI/Bakken differentials, which decreasedincreased by $5.13$4.37 per barrel and $3.71 per barrel, respectively, in the three months ended June 30, 2019 as comparedcomparison to the same period in 2018.2019. In addition, the WTI/WCS differential decreasedincreased significantly to $12.53$16.85 per barrel in the three months ended June 30, 20192020 compared to $18.26$9.96 in the same period in 2018,2019, which unfavorablyfavorably 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 2018.
Across the Mid-Continent, the WTI (Chicago) 4-3-1 industry crack spread was $21.10$7.37 per barrel, or 20.2% higher,40.2% lower, in the three months ended June 30, 2019March 31, 2020 as compared to $17.56$12.33 per barrel in the same period in 2018.2019. Our margins were positively impacted from our refinery specific slate in the Mid-Continent by an increasing WTI/Bakken differential, which averaged $1.06a discount of $3.46 per barrel in the three months ended June 30, 2019,March 31, 2020, as compared to $0.39a premium of $0.25 per barrel in the same period in 2018. This increase was offset by tightening in2019. Additionally, the WTI/Syncrude differential which averaged a premiumdiscount of $0.05$1.80 per barrel during the three months ended June 30, 2019March 31, 2020 as compared to a discountpremium of $2.98$0.04 per barrel in the same period of 2018.2019.
On the Gulf Coast, the LLS (Gulf Coast) 2-1-1 industry crack spread was $12.65$10.42 per barrel, or 6.4% lower,5.4% higher, in the three months ended June 30, 2019March 31, 2020 as compared to $13.52$9.89 per barrel in the same period in 2018.2019. Margins on the Gulf Coast were negativelypositively impacted from our refinery specific slate by a decliningstrengthening WTI/LLS differential, which averaged a premium of $7.14$2.25 per barrel during the three months ended June 30, 2019March 31, 2020 as compared to a premium of $5.12$7.51 per barrel in the same period of 2018.2019.
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On the West Coast, the ANS (West Coast) 4-3-1 industry crack spread was $22.96$13.36 per barrel, or 22.8% higher,1.3% lower, in the three months ended June 30, 2019March 31, 2020 as compared to $18.70$13.54 per barrel in the same period in 2018. Margins2019. Additional, margins on the West Coast were negativelypositively impacted from our refinery specific slate by a weakeningstrengthening WTI/ANS differential, which averaged a premium of $8.39$5.51 per barrel during the three months ended June 30, 2019March 31, 2020 as compared to a premium of $5.91$9.52 per barrel in the same period of 2018.2019.
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 $433.2$531.7 million for the three months ended June 30, 2019March 31, 2020 compared to $417.7$479.0 million for the three months ended June 30, 2018,March 31, 2019, an increase of $15.5approximately $52.7 million, or 3.7%11.0%. Of the total $433.2$531.7 million of operating expenses for the three months ended June 30, 2019, $409.7March 31, 2020, $507.5 million or $5.27$6.54 per barrel of throughput, related to expenses incurred by the Refining segment, while the remaining $23.5$24.2 million related to expenses incurred by the Logistics segment ($402.7453.4 million or $5.11$6.78 per barrel of throughput, and $15.0$25.6 million of operating expenses for the three months ended June 30, 2018March 31, 2019 related to the Refining and Logistics segments, respectively). Increases in operating expenses were mainly attributed to highercosts associated with the Martinez refinery and related logistic assets which totaled approximately $69.5 million for the three months ended March 31, 2020. Total operating expenses for the three months ended March 31, 2020, excluding our Martinez refinery, decreased slightly due to lower outside service costs attributed to turnaroundlower maintenance activity and maintenance activity.the initiation of our cost optimization measures. Operating expenses related to our Logistics segment increaseddecreased when compared to the same period in 2018 primarily2019 due to decreased utility expenses related to the operations of PBFX’s recently acquiredcoinciding with lower throughput at certain PBFX assets and higherlower environmental clean-up remediation costs.

General and Administrative Expenses— General and administrative expenses totaled $53.6$82.5 million for the three months ended June 30, 2019March 31, 2020 compared to $58.7$57.6 million for the three months ended June 30, 2018, a decreaseMarch 31, 2019, an increase of approximately $5.1$24.9 million or 8.7%43.2%. The decreaseincrease in general and administrative expenses for the three months ended June 30, 2019March 31, 2020 in comparison to the three months ended June 30, 2018 isMarch 31, 2019 primarily related to lower employee relatedhigher employee-related expenses, including incentive compensation.compensation and increased headcount. Additionally, we experienced higher professional fees primarily related to information technology support and transaction and integration costs pertaining to the Martinez Acquisition. Our general and administrative expenses are comprised of personnel, facilities and other infrastructure costs necessary to support our refineries and related logistics assets.
Loss on Sale of Assets— There was a net loss of $0.8 million on the sale of assets for the three months ended June 30, 2019 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 non-operating refinery assets.
Depreciation and Amortization Expense— Depreciation and amortization expense totaled $107.1$119.6 million for the three months ended June 30, 2019March 31, 2020 (including $104.2$116.7 million recorded within Cost of sales) compared to $92.3$105.8 million for the three months ended June 30, 2018March 31, 2019 (including $89.7$103.0 million recorded within Cost of sales), an increase of $14.8approximately $13.8 million. The increase was a result of additional depreciation expense associated with the assets acquired in the Martinez Acquisition and a general increase in our fixed asset base due to capital projects and turnarounds completed since the secondfirst quarter of 2018.2019.
Change in Fair Value of Contingent Consideration— Change in the fair value of contingent consideration was a gain of $52.8 million for the three months ended March 31, 2020. This change primarily represents the decrease in the estimated fair value of the total Martinez Contingent Consideration we expect to pay in connection with our acquisition of the Martinez refinery. There were no such costs in the same period of 2019.
Change in Tax Receivable Agreement Liability— Change in Tax Receivable Agreement liability for the three months ended March 31, 2020 represented a loss of $11.6 million. There was no change in the Tax Receivable Agreement liability for the three months ended March 31, 2019.
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Change in Fair Value of Catalyst LeasesObligations— Change in the fair value of catalyst leasesobligations represented a gain of $0.5$11.7 million for the three months ended June 30, 2019March 31, 2020 compared to a gainloss of $4.1$3.1 million for the three months ended June 30, 2018.March 31, 2019. 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,metal catalysts, which we are obligated to repurchase at fair market value on the lease termination dates.
Debt Extinguishment Costs— Debt extinguishment costs of $22.2 million incurred in the three months ended March 31, 2020 relate to early redemption of our 2023 Senior Notes. There were no such costs in the same period of 2019.
Interest Expense, net— PBF Energy interest expense totaled $42.1$49.2 million for the three months ended June 30, 2019March 31, 2020 compared to $43.4$39.5 million for the three months ended June 30, 2018, a decreaseMarch 31, 2019, an increase of approximately $1.3$9.7 million. This net decreaseincrease is mainly attributable to lower outstanding revolver borrowings duringhigher interest cost associated with the three months ended June 30, 2019.issuance of the 2028 Senior Notes in February 2020 and the drawdown on our Revolving Credit Facility to partially fund the Martinez Acquisition and other general corporate purposes. 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,metal catalysts, 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$51.7 million and $45.4$41.5 million for the three months ended June 30,March 31, 2020 and March 31, 2019, and June 30, 2018, respectively (inclusive of $2.4$2.5 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 statementsCondensed 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%99.0%, on a weighted-average basis for the three months ended June 30,March 31, 2020 and 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 the sole managing member of PBF LLC, PBF Energy operates and controls all of the business and affairs of PBF LLC and its subsidiaries. PBF Energy consolidates the financial results of PBF LLC and its subsidiaries, including PBFX. With respect to the consolidation of PBF LLC, the Company records a noncontrolling interest for the economic interest in PBF LLC held by members other than PBF Energy, and with respect to the consolidation of PBFX, the Company records a noncontrolling interest for the economic interests in PBFX held by the public unitholders of PBFX, and with respect to the consolidation of PBF Holding, the Company records a 20% noncontrolling interest for the ownership interests in two subsidiaries of Chalmette Refining held by a third party. The total noncontrolling interest on the Condensed Consolidated Statements of Operations represents the portion of the Company’s earnings or loss attributable to the economic interests held by members of PBF LLC other than PBF Energy, by the public common unitholders of PBFX and by the third-party stockholders of certain of Chalmette Refining’s subsidiaries. The total noncontrolling interest on the Condensed Consolidated Balance Sheets represents the portion of the Company’s net assets attributable to the economic interests held by the members of PBF LLC other than PBF Energy, by the public common unitholders of PBFX and by the third-party stockholders of the two Chalmette Refining subsidiaries. PBF Energy’s weighted-average equity noncontrolling interest ownership percentage in PBF LLC for 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.
Six Months Ended June 30, 2019 Compared to the Six Months Ended June 30, 2018
Overview— PBF Energy net income was $219.8 million for the six months ended June 30, 2019 compared to net income of $329.5 million for the six months ended June 30, 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 Energy stockholders was $197.0 million, or $1.63 per diluted share, for the six months ended June 30, 2019 ($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 Energy stockholders of $302.5 million, or $2.66 per diluted share, for the six months ended June 30, 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 attributable to PBF Energy stockholders represents PBF Energy’s equity interest in PBF LLC’s pre-tax income, less applicable income tax expense. PBF Energy’s weighted-average equity interest in PBF LLC was 99.0% and 97.6% for the six months ended June 30, 2019 and 2018, respectively.
Our results for the six months ended June 30, 2019 were positively impacted by a non-cash, pre-tax LCM inventory adjustment of approximately $324.0 million, or $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 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 our refineries, despite stronger refining margins in the Mid-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 year.

Revenues— Revenues totaled $11.8 billion for the six months ended June 30, 2019 compared to $13.2 billion for the six months ended June 30, 2018, a decrease of approximately $1.5 billion, or 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 six months ended June 30, 2019, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 315,500 bpd, 155,600 bpd, 183,100 bpd and 144,700 bpd, respectively. For 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 the six months ended June 30, 2019 compared to the same period in 2018 due to planned 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 downtime at our Delaware City refinery in the first quarter of 2019. Throughput rates at our Mid-Continent refinery were higher in the six months ended June 30, 2019 compared to the same period in 2018 due to a planned turnaround at our Toledo refinery in the first half of the prior year. Throughput rates at our Gulf Coast refinery were in line with the prior year. For the six months ended June 30, 2019, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 353,900 bpd, 164,900 bpd, 229,800 bpd and 174,900 bpd, respectively. For the six months ended June 30, 2018, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 378,000 bpd, 149,300 bpd, 232,400 bpd and 196,700 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 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 $1,459.0 million, or $10.08 per barrel of throughput for the six months ended June 30, 2019 compared to $1,538.3 million, or $10.20 per barrel of throughput for the six months ended June 30, 2018, a decrease of approximately $79.3 million. Gross refining margin excluding special items totaled $1,135.0 million or $7.85 per barrel of throughput for the six months ended June 30, 2019 compared to $1,292.6 million or $8.57 per barrel of throughput for the six months ended June 30, 2018, a decrease of $157.6 million.
Consolidated gross margin and gross refining margin were positively impacted by a non-cash LCM adjustment of approximately $324.0 million on a net basis resulting from the increase in crude oil and refined product prices from the year ended 2018 to the end of the second quarter of 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 margins were mixed during the six months ended June 30, 2019 in comparison to the same period in 2018, 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 comparison to the same period in 2018, with notable light-heavy crude differential compression negatively impacting our gross refining margin.

On the East Coast, the Dated Brent (NYH) 2-1-1 industry crack spread was approximately $11.72 per barrel, or 15.7% lower, in the six months ended June 30, 2019, as compared to $13.90 per barrel in the same period in 2018. Our margins were negatively impacted from our refinery specific slate on the East Coast by tightening in the Dated Brent/Maya and WTI/Bakken differentials, which decreased by $5.09 per barrel and $0.29 per barrel, respectively, in comparison to the same period in 2018. In addition, the WTI/WCS differential decreased significantly to $11.28 per barrel in 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 six months ended June 30, 2019 as compared to $14.74 per barrel in the same period in 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 $912.2 million for the six months ended June 30, 2019 compared to $843.8 million for the six months ended June 30, 2018, an increase of approximately $68.4 million, or 8.1%. Of the total $912.2 million of operating expenses for the six months ended June 30, 2019, $863.1 million or $5.97 per barrel of throughput, related to expenses incurred by the Refining segment, while the remaining $49.1 million related to expenses incurred by the Logistics segment ($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 were mainly attributed to higher outside service costs attributed to turnaround and maintenance activity. Operating expenses related to our Logistics segment increased when compared to the same period in 2018 due to expenses related to the operations of PBFX’s recently acquired assets and higher environmental clean-up costs.
General and Administrative Expenses— General and administrative expenses totaled $111.2 million for the six months ended June 30, 2019 compared to $121.5 million for the six months ended June 30, 2018, a decrease of approximately $10.3 million or 8.5%. The decrease in general and administrative expenses for the six months ended June 30, 2019 in comparison to the six months ended June 30, 2018 primarily related to lower employee related expenses, including incentive compensation, partially offset by higher legal settlement costs. Our general and administrative expenses are comprised of personnel, facilities and other infrastructure costs necessary to support our refineries and related logistics assets.
Loss on Sale of Assets— Net loss on sale of assets was $0.8 million for the six months ended June 30, 2019 compared to a loss of $0.7 million for the six months ended June 30, 2018. These losses are related to the sale of non-operating refinery assets.

Depreciation and Amortization Expense— Depreciation and amortization expense totaled $212.9 million for the six months ended June 30, 2019 (including $207.2 million recorded within Cost of sales) compared to $178.3 million for the six months ended June 30, 2018 (including $173.0 million recorded within Cost of sales), an increase of approximately $34.6 million. The increase was a result of additional depreciation expense associated with a general increase in our fixed asset base due to capital projects and turnarounds completed since the second quarter of 2018, as well as accelerated amortization related to the Delaware City and Torrance refinery turnarounds, which were completed in the first half of 2019.
Change in Fair Value of Catalyst Leases— Change in the fair value of catalyst leases represented a loss of $2.6 million for the six months ended June 30, 2019 compared to a gain of $4.1 million for the six months ended June 30, 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— PBF Energy interest expense totaled $81.6 million for the six months ended June 30, 2019 compared to $86.6 million for the six months ended June 30, 2018, a decrease of approximately $5.0 million. This net decrease is mainly attributable to lower outstanding revolver borrowings during the 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, 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 sixthree months ended June 30,March 31, 2020 and 2019 and 2018 was 26.2%26.0% and 26.0%, respectively.

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Noncontrolling Interest— PBF Energy is the sole managing member of, and has a controlling interest in, PBF LLC. As the sole managing member of PBF LLC, PBF Energy operates and controls all of the business and affairs of PBF LLC and its subsidiaries. PBF Energy consolidates the financial results of PBF LLC and its subsidiaries, including PBFX. With respect to the consolidation of PBF LLC, the Company records a noncontrolling interest for the economic interest in PBF LLC held by members other than PBF Energy, and with respect to the consolidation of PBFX, the Company records a noncontrolling interest for the economic interests in PBFX held by the public unitholders of PBFX, and with respect to the consolidation of PBF Holding, the Company records a 20% noncontrolling interest for the ownership interests in two subsidiaries of Chalmette Refining held by a third party. The total noncontrolling interest on the Condensed Consolidated Statements of Operations represents the portion of the Company’s earnings or loss attributable to the economic interests held by members of PBF LLC other than PBF Energy, by the public common unitholders of PBFX and by the third-party stockholders of certain of Chalmette Refining’s subsidiaries. The total noncontrolling interest on the Condensed Consolidated Balance Sheets represents the portion of the Company’s net assets attributable to the economic interests held by the members of PBF LLC other than PBF Energy, by the public common unitholders of PBFX and by the third-party stockholders of the two Chalmette Refining subsidiaries. PBF Energy’s weighted-average equity noncontrolling interest ownership percentage in PBF LLC for the sixthree months ended June 30,March 31, 2020 and 2019 and 2018 was approximately 1.0% and 2.4%1.0%, 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.
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Non-GAAP Financial Measures
Management uses certain financial measures to evaluate our operating performance that are calculated and presented on the basis of methodologies other than in accordance with GAAP (“Non-GAAP”). These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP,accounting principles generally accepted in the United States of America (“GAAP”), and our calculations thereof may not be comparable to similarly entitled measures reported by other companies. Such Non-GAAP financial measures are presented only in the context of PBF Energy’s results and are not presented or discussed in respect to PBF LLC.
Special Items
The Non-GAAP measures presented include Adjusted Fully-Converted Net Income (loss)(Loss) excluding special items, EBITDA excluding special items and gross refining margin excluding special items. Special items presented for the three and six months ended June 30, 2019 and June 30, 2018, respectively,periods presented relate to an LCM inventory adjustment.adjustments, changes in the Tax Receivable Agreement liability, debt extinguishment costs and changes in the fair value of contingent consideration. See “Notes to Non-GAAP Financial Measures” below for more details on all special items disclosed. Although we believe that Non-GAAP financial measures, excluding the impact of special items, provide useful supplemental information to investors regarding the results and performance of our business and allow for helpful period-over-period comparisons, such Non-GAAP measures should only be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP.
Adjusted Fully-Converted Net Income (loss)(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)(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)(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.
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.
69

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 thePBF Energy’s Adjusted Fully-Converted results of PBF Energy with its results presented in accordance with GAAP for the three and six months ended June 30,March 31, 2020 and 2019 and 2018 (in millions, except share and per share amounts):
Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,		Three Months Ended March 31,
2019 2018 2019 201820202019
Net income (loss) attributable to PBF Energy Inc. stockholders$(32.2) $272.1
 $197.0
 $302.5
Net income (loss) attributable to PBF Energy Inc. stockholders$(1,065.9) $229.2  
Less: Income allocated to participating securities0.1
 0.2
 0.2
 0.4
Less: Income allocated to participating securities0.1  0.1  
Income (loss) available to PBF Energy Inc. stockholders - basic(32.3) 271.9
 196.8
 302.1
Income (loss) available to PBF Energy Inc. stockholders - basic(1,066.0) 229.1  
Add: Net income (loss) attributable to noncontrolling interest (1)
(0.5) 6.1
 2.7
 7.4
Add: Net income (loss) attributable to noncontrolling interest (1)
(14.6) 3.1  
Less: Income tax benefit (expense) (2)
0.1
 (1.5) (0.7) (1.9)
Less: Income tax benefit (expense) (2)
3.9  (0.8) 
Adjusted fully-converted net income (loss)$(32.7) $276.5
 $198.8
 $307.6
Adjusted fully-converted net income (loss)$(1,076.7) $231.4  
Special Items: (3)
       
Special Items: (3)
Add: Non-cash LCM inventory adjustment182.0
 (158.0) (324.0) (245.7)Add: Non-cash LCM inventory adjustment1,285.6  (506.0) 
Add: Change in Tax Receivable Agreement liabilityAdd: Change in Tax Receivable Agreement liability11.6  —  
Add: Debt extinguishment costsAdd: Debt extinguishment costs22.2  —  
Add: Change in fair value of contingent considerationAdd: Change in fair value of contingent consideration(52.8) —  
Add: Recomputed income taxes on special items(48.2) 41.7
 85.7
 64.9
Add: Recomputed income taxes on special items(333.1) 131.6  
Adjusted fully-converted net income (loss) excluding special items$101.1
 $160.2
 $(39.5) $126.8
Adjusted fully-converted net income (loss) excluding special items$(143.2) $(143.0) 
       
Weighted-average shares outstanding of PBF Energy Inc.119,181,845
 112,875,813
 119,885,386
 111,853,774
Weighted-average shares outstanding of PBF Energy Inc.119,380,210  119,880,915  
Conversion of PBF LLC Series A Units (4)
1,206,325
 1,838,196
 1,206,325
 2,681,980
Conversion of PBF LLC Series A Units (4)
1,208,798  1,206,325  
Common stock equivalents (5)
1,501,569
 1,695,264
 928,733
 1,214,173
Common stock equivalents (5)
—  1,088,504  
Fully-converted shares outstanding-diluted121,889,739
 116,409,273
 122,020,444
 115,749,927
Fully-converted shares outstanding-diluted120,589,008  122,175,744  
       
Diluted net income (loss) per share$(0.27) $2.37
 $1.63
 $2.66
Diluted net income (loss) per share$(8.93) $1.89  
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) per fully exchanged, fully diluted shares outstanding (5)
$(8.93) $1.89  
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
Adjusted fully-converted net income (loss) excluding special items per fully exchanged, fully diluted shares outstanding (3) (5)
$(1.19) $(1.18) 
——————————
See Notes to Non-GAAP Financial Measures.

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Gross Refining Margin and Gross Refining Margin Excluding Special Items
Gross refining margin is defined as consolidated gross margin excluding refinery depreciation, refinery operating expense, and gross margin of PBFX. We believe both gross refining margin and gross refining margin excluding special items are important measures of operating performance and provide useful information to investors because they are helpful metric comparisons to the industry refining margin benchmarks, as the refining margin benchmarks do not include a charge for refinery operating expenses and depreciation. In order to assess our operating performance, we compare our gross refining margin (revenue(revenues less cost of products and other) to industry refining margin benchmarks and crude oil prices as defined in the table below.
Neither gross refining margin nor gross refining margin excluding special items should be considered an alternative to consolidated gross margin, income from operations, net cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Gross refining margin and gross refining margin excluding special items presented by other companies may not be comparable to our presentation, since each company may define these terms differently. The following table presents our GAAP calculation of gross margin and a reconciliation of gross refining margin to the most directly comparable GAAP financial measure, consolidated gross margin, on a historical basis, as applicable, for each of the periods indicated (in millions, except per barrel amounts):

 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

Six Months Ended June 30,Three Months Ended March 31,
2019 201820202019
$ per barrel of throughput $ per barrel of throughput$per barrel of throughput$per barrel of throughput
Calculation of consolidated gross margin:       Calculation of consolidated gross margin:
Revenues$11,776.2
 $81.44
 $13,246.9
 $87.83
Revenues$5,277.5  $68.00  $5,216.2  $77.99  
Less: Cost of sales11,284.4
 78.04
 12,601.4
 83.55
Less: Cost of sales6,611.7  85.19  4,791.2  71.64  
Consolidated gross margin$491.8
 $3.40
 $645.5
 $4.28
Consolidated gross margin$(1,334.2) $(17.19) $425.0  $6.35  
Reconciliation of consolidated gross margin to gross refining margin:       Reconciliation of consolidated gross margin to gross refining margin:
Consolidated gross margin$491.8
 $3.40
 $645.5
 $4.28
Consolidated gross margin$(1,334.2) $(17.19) $425.0  $6.35  
Add: PBFX operating expense58.5
 0.40
 37.1
 0.25
Add: PBFX operating expense29.6  0.38  29.9  0.45  
Add: PBFX depreciation expense17.6
 0.12
 13.4
 0.09
Add: PBFX depreciation expense11.3  0.15  8.7  0.13  
Less: Revenues of PBFX(161.6) (1.12) (131.4) (0.87)Less: Revenues of PBFX(93.0) (1.20) (78.8) (1.18) 
Add: Refinery operating expense863.1
 5.97
 814.1
 5.40
Add: Refinery operating expense507.5  6.54  453.4  6.78  
Add: Refinery depreciation expense189.6
 1.31
 159.6
 1.05
Add: Refinery depreciation expense105.4  1.36  94.3  1.41  
Gross refining margin$1,459.0
 $10.08
 $1,538.3
 $10.20
Gross refining margin$(773.4) $(9.96) $932.5  $13.94  
Special items:(3)
       
Special items:(3)
Add: Non-cash LCM inventory adjustment(324.0) (2.23) (245.7) (1.63)Add: Non-cash LCM inventory adjustment1,285.6  16.56  (506.0) (7.56) 
Gross refining margin excluding special items$1,135.0
 $7.85
 $1,292.6
 $8.57
Gross refining margin excluding special items$512.2  $6.60  $426.5  $6.38  
——————————
See Notes to Non-GAAP Financial Measures.
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EBITDA, EBITDA Excluding Special Items and Adjusted EBITDA
Our management uses EBITDA (earnings before interest, income taxes, depreciation and amortization), EBITDA excluding special items and Adjusted EBITDA as measures of operating performance to assist in comparing performance from period to period on a consistent basis and to readily view operating trends, as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations, and in communications with our board of directors, creditors, analysts and investors concerning our financial performance. Our outstanding indebtedness for borrowed money and other contractual obligations also include similar measures as a basis for certain covenants under those agreements which may differ from the Adjusted EBITDA definition described below.
EBITDA, EBITDA excluding special items and Adjusted EBITDA are not presentations made in accordance with GAAP and our computation of EBITDA, EBITDA excluding special items and Adjusted EBITDA may vary from others in our industry. In addition, Adjusted EBITDA contains some, but not all, adjustments that are taken into account in the calculation of the components of various covenants in the agreements governing our senior notes and other credit facilities. EBITDA, EBITDA excluding special items and Adjusted EBITDA should not be considered as alternatives to income from operations or net income as measures of operating performance. In addition, EBITDA, EBITDA excluding special items and Adjusted EBITDA are not presented as, and should not be considered, an alternative to cash flows from operations as a measure of liquidity. Adjusted EBITDA is defined as EBITDA before adjustments for items such as stock-based compensation expense, the non-cash change in the fair value of catalyst leases,obligations, the write down of inventory to the 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, change in the fair value of contingent consideration and certain other non-cash items. Other companies, including other companies in our industry, may calculate EBITDA, EBITDA excluding special items and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures. EBITDA, EBITDA excluding special items and Adjusted EBITDA also have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include that EBITDA, EBITDA excluding special items and Adjusted EBITDA:

•do not reflect depreciation expense or our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
•do not reflect changes in, or cash requirements for, our working capital needs;
•do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;
•do not reflect realized and unrealized gains and losses from certain hedging activities, which may have a substantial impact on our cash flow;
•do not reflect certain other non-cash income and expenses; and
•exclude income taxes that may represent a reduction in available cash.

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

 Three Months Ended 
 June 30,		 Six Months Ended 
 June 30,		Three Months Ended March 31,
 
 2019 2018 2019 201820202019
Reconciliation of net income (loss) to EBITDA and EBITDA excluding special items: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
 $329.5
Net income (loss)$(1,062.5) $241.4  
Add: Depreciation and amortization expenseAdd: Depreciation and amortization expense107.1
 92.3
 212.9
 178.3
Add: Depreciation and amortization expense119.6  105.8  
Add: Interest expense, netAdd: Interest expense, net42.1
 43.4
 81.6
 86.6
Add: Interest expense, net49.2  39.5  
Add: Income tax (benefit) expenseAdd: Income tax (benefit) expense(10.5) 95.5
 70.0
 106.5
Add: Income tax (benefit) expense(374.6) 80.5  
EBITDAEBITDA$117.1
 $518.9
 $584.3
 $700.9
EBITDA$(1,268.3) $467.2  
Special Items(3)
Special Items(3)
       
Special Items(3)
Add: Non-cash LCM inventory adjustmentAdd: Non-cash LCM inventory adjustment182.0
 (158.0) (324.0) (245.7)Add: Non-cash LCM inventory adjustment1,285.6  (506.0) 
Add: Change in Tax Receivable Agreement liabilityAdd: Change in Tax Receivable Agreement liability11.6  —  
Add: Debt extinguishment costsAdd: Debt extinguishment costs22.2  —  
Add: Change in fair value of contingent considerationAdd: Change in fair value of contingent consideration(52.8) —  
EBITDA excluding special itemsEBITDA excluding special items$299.1
 $360.9
 $260.3
 $455.2
EBITDA excluding special items$(1.7) $(38.8) 
        
Reconciliation of EBITDA to Adjusted EBITDA:Reconciliation of EBITDA to Adjusted EBITDA:       Reconciliation of EBITDA to Adjusted EBITDA:
EBITDAEBITDA$117.1
 $518.9
 $584.3
 $700.9
EBITDA$(1,268.3) $467.2  
Add: Stock-based compensationAdd: Stock-based compensation12.0
 7.9
 20.0
 13.0
Add: Stock-based compensation9.6  8.0  
Add: Net non-cash change in fair value of catalyst leases(0.5) (4.1) 2.6
 (4.1)
Add: Net non-cash change in fair value of catalyst obligationsAdd: Net non-cash change in fair value of catalyst obligations(11.7) 3.1  
Add: Net non-cash change in fair value of contingent consideration (3)
Add: Net non-cash change in fair value of contingent consideration (3)
(52.8) —  
Add: Non-cash LCM inventory adjustment (3)
Add: Non-cash LCM inventory adjustment (3)
182.0
 (158.0) (324.0) (245.7)
Add: Non-cash LCM inventory adjustment (3)
1,285.6  (506.0) 
Add: Change in Tax Receivable Agreement liability(3)
Add: Change in Tax Receivable Agreement liability(3)
11.6  —  
Add: Debt extinguishment costs (3)
Add: Debt extinguishment costs (3)
22.2  —  
Adjusted EBITDAAdjusted EBITDA$310.6
 $364.7
 $282.9
 $464.1
Adjusted EBITDA$(3.8) $(27.7) 
——————————
See Notes to Non-GAAP Financial Measures.

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Notes to Non-GAAP Financial Measures
The following notes are applicable to the Non-GAAP Financial Measures above: 
(1)Represents the elimination of the noncontrolling interest associated with the ownership by the members of PBF LLC other than PBF Energy, as if such members had fully exchanged their PBF LLC Series A Units for shares of PBF Energy’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:
(1)Represents the elimination of the noncontrolling interest associated with the ownership by the members of PBF LLC other than PBF Energy, as if such members had fully exchanged their PBF LLC Series A Units for shares of PBF Energy Class A common stock.
(2) Represents an adjustment to reflect PBF Energy’s estimated annualized statutory corporate tax rate of approximately 26.3% and 26.0% for the 2020 and 2019 periods, respectively, applied to net income (loss) attributable to noncontrolling interest for all periods presented. The adjustment assumes the full exchange of existing PBF LLC Series A Units as described in (1) above.
(3) Special items:
LCM inventory adjustment - LCM is a GAAP requirement related to inventory valuation that mandates inventory to be stated at the lower of cost or market. Our inventories are stated at the lower of cost or market. Cost is determined using the last-in, first-out (“LIFO”) inventory valuation methodology, in which the most recently incurred costs are charged to cost of sales and inventories are valued at base layer acquisition costs. Market is determined based on an assessment of the current estimated replacement cost and net realizable selling price of the inventory. In periods where the market price of our inventory declines substantially, cost values of inventory may exceed market values. In such instances, we record an adjustment to write down the value of inventory to market value in accordance with GAAP. In subsequent periods, the value of inventory is reassessed and an LCM inventory adjustment is recorded to reflect the net change in the LCM inventory reserve between the prior period and the current period. The net impact of these LCM inventory adjustments are included in the Refining segment’s income from operations, but are excluded from the operating results presented, in the table belowas applicable, in order to make such information comparable between periods.
The following table includes the LCM inventory reserve as of each date presented (in millions):

2019 201820202019
January 1,$651.8
 $300.5
January 1,$401.6  $651.8  
March 31,145.8
 212.8
March 31,1,687.2  145.8  
June 30,327.8
 54.8
The following table includes the corresponding impact of changes in the LCM inventory reserve on income (loss) from operations and net income (loss) for the periods presented (in millions):

Three Months Ended March 31,
20202019
Net LCM inventory adjustment (charge) benefit in income (loss) from operations$(1,285.6) $506.0  
Net LCM inventory adjustment (charge) benefit in net income (loss)(947.5) 374.4  
Debt Extinguishment Costs - During the three months ended March 31, 2020, we recorded pre-tax debt extinguishment costs of $22.2 million related to the redemption of the 2023 Senior Notes. These nonrecurring charges increased net loss by $16.4 million for the three months ended March 31, 2020. There were no such costs in the three months ended March 31, 2019.
74

 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
Change in Tax Receivable Agreement liability - During the three months ended March 31, 2020 we recorded a change in the Tax Receivable Agreement liability that increased loss before income taxes and net loss by $11.6 million and $8.5 million, respectively. The changes in the Tax Receivable Agreement liability reflect charges or benefits attributable to changes in our obligation under the Tax Receivable Agreement due to factors out of our control such as changes in tax rates. There was no change in the Tax Receivable Agreement liability during the three months ended March 31, 2019.
Change in Fair Value of Contingent Consideration - During the three months ended March 31, 2020 we recorded a change in the fair value of the contingent consideration primarily related to the Martinez Contingent Consideration which decreased loss before income taxes and net loss by $52.8 million and $38.9 million, respectively.
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.
(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 months ended March 31, 2020 and 2019, respectively. Common stock equivalents exclude the effects of performance share units and options and warrants to purchase 11,388,905 and 5,111,617 shares of PBF Energy Class A common stock and PBF LLC Series A Units because they are anti-dilutive for the three months ended March 31, 2020 and 2019, respectively. For periods showing a net loss, all common stock equivalents and unvested restricted stock are considered anti-dilutive.
75

Liquidity and Capital Resources
Overview
OurTypically our primary sources of liquidity are our cash flows from operations, cash and cash equivalents and borrowing availability under our credit facilities, however, due to the COVID-19 pandemic and the current extraordinary and volatile market conditions, our business and results of operations are being negatively impacted. The demand destruction as a result of the worldwide economic slowdown and governmental responses, including travel restrictions and stay-at-home orders, has resulted in a significant decrease in the demand for and market prices for our products. In addition, recent global geopolitical and macroeconomic events have further contributed to the decline in crude oil prices and the overall volatility in crude oil and refined product prices, contributing to an adverse impact on our liquidity. We continue to be focused on implementing measures to preserve liquidity and strengthen our balance sheet in light of these challenging market conditions. Our response to the current economic environment and its impact on our liquidity is 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 capital expenditure, working capital needs, dividend payments, debt service requirements, and PBF Energy’s obligations underin the Tax Receivable Agreement, for the next twelve months, as well as to fund the 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 covenants, including financial covenants, in all of our debt agreements.“Liquidity” section below.
Cash Flow Analysis
The below cash flow analysis includes details by cash flow activity based on the results of PBF Energy. Material changes that exist between the PBF Energy and PBF LLC cash flows are explained thereafter.
Cash Flows from Operating Activities
Net cash used in operating activities was $27.4$235.8 million for the sixthree months ended June 30, 2019March 31, 2020 compared to net cash provided byused in operating activities of $307.9$149.9 million for the sixthree months ended June 30, 2018.March 31, 2019. Our operating cash flows for the sixthree months ended June 30, 2019March 31, 2020 included our net incomeloss of $219.8 million, depreciation and amortization of $218.4$1,062.5 million, deferred income taxes of $68.2 million, pension and other post-retirement benefits costs of $22.4$374.8 million, net non-cash charges relating to the change in the fair value of our inventory repurchase obligations of $35.0$67.9 million, stock-based compensationchange in the fair value of $20.0the contingent consideration of $52.8 million, changesand change in the fair value of our catalyst leasesobligations of $2.6 million and loss on sale of assets of $0.8$11.7 million, partially offset by depreciation and amortization of $123.0 million, pension and other post-retirement benefits costs of $13.1 million, change in the Tax Receivable Agreement liability of $11.6 million, stock-based compensation of $9.6 million, debt extinguishment costs related to the early redemption of our 2023 Senior Notes of $22.2 million, and a net non-cash benefitcharge of $324.0$1,285.6 million relating to an LCM inventory adjustment. In addition, net changes in operating assets and liabilities reflectedreflects cash uses of $290.6$131.2 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 sixthree months ended June 30, 2018March 31, 2019 included our net income of $329.5$241.4 million, depreciation and amortization of $182.3$108.6 million, deferred income taxes of $105.7$78.5 million, pension and other post-retirement benefits costs of $23.7$11.2 million, net non-cash charges relating to the change in the fair value of our inventory repurchase obligations of $2.5$14.2 million, stock-based compensation of $13.0$8.0 million, and a loss on salechanges in the fair value of assetsour catalyst obligations of $0.7$3.1 million, partially offset by a net non-cash benefit of $245.7$506.0 million relating to an LCM inventory adjustment and changes in the fair value of our catalyst leases of $4.1 million.adjustment. In addition, net changes in operating assets and liabilities reflected cash uses of cash of $99.7$108.9 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 $501.9$1,315.2 million for the sixthree months ended June 30, 2019March 31, 2020 compared to net cash used in investing activities of $365.2$260.6 million for the sixthree months ended June 30, 2018.March 31, 2019. The net cash flows used in investing activities for the sixthree months ended June 30,March 31, 2020 was comprised of cash outflows of $1,176.2 million used to fund the Martinez Acquisition, capital expenditures totaling $65.3 million, expenditures for refinery turnarounds of $69.1 million, and expenditures for other assets of $4.6 million. Net cash used in investing activities for the three months ended March 31, 2019 was comprised of cash outflows of $206.1$105.4 million for capital expenditures, expenditures for refinery turnarounds of $261.9$133.0 million, and expenditures for other assets of $33.9 million. Net cash used in investing activities for the six months ended June 30, 2018 was comprised of cash outflows of $115.7 million for capital expenditures, expenditures for refinery turnarounds of $179.2 million, expenditures for other assets of $12.3 million and expenditures for the acquisition of Knoxville Terminals by PBFX of $58.0$22.2 million.

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Cash Flows from Financing Activities
Net cash provided by financing activities was $136.1$1,458.2 million for the sixthree months ended June 30, 2019March 31, 2020 compared to net cash used inprovided by financing activities of $37.4$231.5 million for the sixthree months ended June 30, 2018.March 31, 2019. For the sixthree months ended June 30, 2019,March 31, 2020, net cash provided by financing activities consisted of $132.5cash proceeds of $470.2 million in net proceeds from the issuance of PBFX common units,the 2028 Senior Notes net of cash paid to redeem the 2023 Senior Notes and related issuance costs, net borrowings under our Revolving Credit Facility of $900.0 million, net borrowings from the PBFX Revolving Credit Facility of $95.0$100.0 million, proceeds from insurance premium financing of $18.9$45.3 million, and proceeds from stock options exercised of $0.2 million, and deferred financing costs and other of $0.8 million, partially offset by distributions and dividends of $103.3$53.0 million, principal amortization payments of the PBF Rail Term Loan of $3.5$1.8 million, deferred financing costs and other of $1.1 million, net settlements of precious metals catalystpayments on finance leases of $1.2$2.6 million and repurchasestaxes paid for net settlement of our common stock in connection with tax withholding obligations upon equity-based compensation of $0.9 million. Forthe vesting of certain restricted stock awards of $1.4 million. Additionally, during the sixthree months ended June 30,March 31, 2019, we borrowed and repaid $1,250.0 millionnet cash provided by financing activities consisted of net borrowings under our Revolving Credit Facility resulting in noof $250.0 million, proceeds from insurance premium financing of $30.2 million, net change to amounts outstanding forborrowings from the six months ended June 30, 2019. Forthe six months ended June 30, 2018, net cash used in financing activities consistedPBFX Revolving Credit Facility of $4.0 million, and proceeds from stock options exercised of $0.1 million, partially offset by distributions and dividends of $91.5$49.1 million, principal amortization payments of the PBF Rail Term Loan of $3.4$1.7 million, repaymenttaxes paid for net settlement of note payableequity-based compensation of $2.4 million, net settlements of precious metals catalyst leases of $9.5 million, deferred financing costs of $13.0$1.0 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 of $54.3 million, proceeds 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 period ended June 30, 2019March 31, 2020 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 the affiliate note payable with PBF Energy of $0.8$1.1 million included in cash flows from financing activities, which eliminates in consolidation at PBF Energy.
The cash flow activity of PBF LLC for the period ended June 30, 2018March 31, 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 net proceeds from the affiliate note payable with PBF Energy of $40.3$0.1 million included in cash flows from financing activities, which eliminates in consolidation at PBF Energy.
Debt and 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 an additional $250.0 million to a total commitment of $750.0 million, subject to receiving increased commitments from lenders or other financial institutions and satisfaction of certain conditions. Borrowings under the PBFX Revolving Credit Facility bear interest either at the Alternative Base Rate plus the Applicable Margin or at LIBORthe London Interbank Offering Rate (“LIBOR”) plus the Applicable Margin, all as defined in the agreement governing the PBFX Revolving Credit Agreement.Facility (the “PBFX Revolving Credit Agreement”).

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PBF Holding Revolving Credit Facility
On May 2, 2018, PBF Holding and certain of our wholly-owned subsidiaries, as borrowers or subsidiary guarantors, replaced the existing asset-based revolving credit agreement dated as of August 15, 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 the Borrowing Base, (asas defined in the Revolving Credit Agreement)Agreement, to make more funding available for working capital and other 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.
On February 18, 2020, in connection with the entry into the Receivables Facility, we amended the Revolving Credit Facility and entered into a related intercreditor agreement to allow us to sell certain Eligible Receivables (as defined in the Revolving Credit Agreement) derived from the sale of refined product over truck racks. Under the Receivables Facility, we sell such receivables to a bank subject to bank approval and certain conditions. The sales of receivables under the Receivables Facility are absolute and irrevocable but subject to certain repurchase obligations under certain circumstances.
As disclosed in “Note 20 - Subsequent Events” of our Notes to Condensed Consolidated Financial Statements, on May 7, 2020, we further amended the Revolving Credit Facility, to increase PBF Holding’s ability to incur certain secured debt from an amount equal to 10% of its total assets to 20% of its total assets.
Senior Notes
On January 24, 2020, PBF Holding entered into an indenture among PBF Holding’s wholly-owned subsidiary, PBF Finance (together with PBF Holding, the “Issuers”), the guarantors named therein (collectively the “Guarantors”), Wilmington Trust, National Association, as Trustee and Deutsche Bank Trust Company Americas, under which the Issuers issued $1.0 billion in aggregate principal amount of the 2028 Senior Notes. The Issuers received net proceeds of approximately $987.0 million from the offering after deducting the initial purchasers’ discount and estimated offering expenses. We used the net proceeds primarily to fully redeem the 2023 Senior Notes, including accrued and unpaid interest, on February 14, 2020, and to fund a portion of the cash consideration for the Martinez Acquisition. The difference between the carrying value of the 2023 Senior Notes on the date they were reacquired and the amount for which they were reacquired has been classified as Debt extinguishment costs in the Condensed Consolidated Statement of Operations.
As disclosed in “Note 20 - Subsequent Events” of our Notes to Condensed Consolidated Financial Statements, on May 13, 2020, PBF Holding issued $1.0 billion in aggregate principal amount of the 2025 Senior Secured Notes. We intend to use the net proceeds for general corporate purposes.
We are in compliance as of March 31, 2020 with all covenants, including financial covenants, in all of our debt agreements.
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Liquidity
The recent outbreak of the COVID-19 pandemic and certain developments in the global oil markets began negatively impacting our liquidity beginning towards the end of the current quarter. As of March 31, 2020, we had $1,080.2 million of unused borrowing availability, which includes PBF Holding cash and cash equivalents of $589.4 million, under the Revolving Credit Facility (net of $193.2 million outstanding letters of credit) and total long-term debt outstanding of $3,546.1 million.
As of June 30, 2019,March 31, 2020, our total liquidity was approximately $1,802.6$1,212.9 million, compared to total liquidity of approximately $1,677.4$2,276.2 million as of December 31, 2018.2019. Our total liquidity is equal to the amount of excess availability under the Revolving Credit Facility, which includes our cash balance at June 30, 2019.March 31, 2020. In addition, as of June 30, 2019March 31, 2020, PBFX had approximately $244.9$112.2 million of borrowing capacity under the PBFX Revolving Credit Facility in comparison to $340.0$212.2 million as of December 31, 2018.2019. The PBFX Revolving Credit Facility is available to fund working capital, acquisitions, distributions, capital expenditures and other general corporate purposes incurred by PBFX.
Due to the unprecedented events caused by the COVID-19 pandemic and the negative impact it has caused to our liquidity, we have taken the following measures to strengthen our balance sheet and increase our flexibility and responsiveness:
•Cost reduction and cash preservation initiatives, including a significant reduction in 2020 planned capital expenditures, lowering 2020 operating expenses driven by significant reductions in discretionary activities and third party services, and reducing corporate overhead expenses through salary reductions to a large portion of our workforce;
•Suspended our quarterly dividend of $0.30 per share, anticipated to preserve approximately $35.0 million of cash each quarter to support the balance sheet;
•Closed on the sale of five hydrogen facilities for gross cash proceeds of $530.0 million on April 17, 2020; and
•Issued $1.0 billion in aggregate principal amount of the 2025 Senior Secured Notes for net proceeds of approximately $987.5 million to be used for general corporate purposes. See “Note 20 - Subsequent Events” of our Notes to Condensed Consolidated Financial Statements for additional details related to the notes offering.
The 2025 Senior Secured Notes are guaranteed by certain of our current domestic subsidiaries. The 2025 Senior Secured Notes are senior obligations and are initially secured, subject to certain exceptions and permitted liens, on a first-priority basis, by substantially all of our and our guarantors’ present and future assets (other than assets securing our Revolving Credit Facility and other excluded assets) and any future indebtedness and certain hedging obligations which are permitted to be secured on a pari passu basis with the 2025 Senior Secured Notes to the extent of the value of the collateral. In addition, the 2025 Senior Secured Notes contain customary terms, events of default and covenants for an issuer of non-investment grade debt securities. These covenants include limitations on the incurrence of additional indebtedness, equity issuances, and payments. Many of these covenants will cease to apply or will be modified if the 2025 Senior Secured Notes are rated investment grade.
Inclusive of the measures and transactions described above, we estimate our liquidity to be approximately $2,000.0 million, based on our estimated May 1, 2020 cash and cash equivalents balance of $805.0 million (excluding cash related to PBFX), $151.0 million of additional available borrowing capacity and no subsequent borrowings under our Revolving Credit Facility. Assuming current commodity prices do not significantly weaken and working capital normalizes in May, we expect to realize an additional net working capital benefit and a Revolving Credit Facility borrowing base increase. However, if we continue to experience low crude oil prices and deteriorating market conditions, our borrowing capacity under our Revolving Credit Facility may be reduced.
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As of March 31, 2020, we have no expected debt maturities due in 2020, and we have $48.7 million of debt obligations due over the next three years, excluding interest incurred on amounts we have borrowed and financing fees.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act provides opportunities for additional liquidity, loan guarantees, and other government programs to support companies affected by the COVID-19 pandemic and their employees. Based on our preliminary analysis of the CARES Act, we are exploring the following opportunities:
•Deferral of social security payroll tax matches that would otherwise be required in 2020;
•Receipt of a payroll tax credit in 2020, to the extent allowable, for expenses related to paying wages and health benefits to employees who are not working as a result of closures and reduced receipts associated with the COVID-19 pandemic; and
•Carryforward of tax loss incurred in 2020, as applicable, to utilize in future years when our 2020 tax return is filed.
We intend to seek any available potential benefits under the CARES Act, including loans, investments or guarantees, and any other such current or future government programs for which we qualify, including those described above. We cannot predict the manner in which such benefits or any of the other benefits described herein will be allocated or administered and we cannot assure you that we will be able to access such benefits in a timely manner or at all.
While it is impossible to estimate the duration or complete financial impact of the COVID-19 pandemic, we believe that these strategic actions plus our cash flows from operations and available capital resources will be sufficient to meet our and our subsidiaries’ capital expenditures, working capital needs, and debt service requirements, for the next twelve months. We cannot assure you that our assumptions used to estimate our liquidity requirements will be correct because the impact that the COVID-19 pandemic is having on us and our industry is ongoing and unprecedented. The extent of the impact of the COVID-19 pandemic on our business, financial condition, results of operation and liquidity will depend largely on future developments, including the duration of the outbreak, particularly within the geographic areas where we operate, and the related impact on overall economic activity, all of which are uncertain and cannot be predicted with certainty at this time. As a result, we may require additional capital, and, from time to time, may pursue funding strategies in the capital markets or through private transactions to strengthen our liquidity and/or fund strategic initiatives. Such additional financing may not be available on favorable terms or at all.
Refer to “Business Developments” and “Part II - Other Information, Item 1A. Risk Factors” for further information.
Working Capital
PBF Energy’s working capital at June 30, 2019March 31, 2020 was $1,201.2$263.8 million, consisting of $3,599.0$2,309.7 million in total current assets and $2,397.8$2,045.9 million in total current liabilities. PBF Energy’s working capital at December 31, 20182019 was $1,102.4$1,314.5 million, consisting of $3,236.9$3,823.7 million in total current assets and $2,134.5$2,509.2 million in total current liabilities. PBF LLC’s working capital at June 30, 2019March 31, 2020 was $1,177.6$229.5 million, consisting of $3,598.6$2,309.4 million in total current assets and $2,421.0$2,079.9 million in total current liabilities. PBF LLC’s working capital at December 31, 20182019 was $1,081.5$1,281.7 million, consisting of $3,235.1$3,821.5 million in total current assets and $2,153.6$2,539.8 million in total current liabilities.
Working capital has increaseddecreased during the sixthree months ended June 30, 2019March 31, 2020 primarily as a result of losses for the period and the change in our LCM inventory adjustment, partially offset byas well as capital expenditures, including turnaround costs, and dividends and distributions.
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Capital Spending
Capital spending was $501.9$1,315.2 million for the sixthree months ended June 30, 2019,March 31, 2020, which primarily included costs for the construction of the Delaware City refinery hydrogen plant, which is expected to be completed in the second quarter of 2020, turnaround costs at our Torrance, Delaware City and Paulsboro refineries,Toledo refinery, safety related enhancements and facility improvements at our refineries.refineries, the Martinez Acquisition and approximately $6.1 million of capital expenditures related to PBFX. Due to current challenging market conditions, we have taken strategic steps to increase our flexibility and responsiveness, one of which is the reduction of approximately $357.0 million in 2020 planned capital expenses. We currently expect to spend an aggregate of approximately $625.0$325.0 million to $675.0$375.0 million in net capital expenditures during 2019,2020, excluding PBFX, and any potential capital expenditures related to the pending Martinez Acquisition, for facility improvements, and refinery maintenance and turnarounds with the majorityintention 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 meetsatisfying all required safety, 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.commitments. In addition, PBFX expects to spend an aggregate of approximately $30.0$12.0 million to $35.0$16.0 million in net capital expenditures during 2019.the remainder of 2020.

As noted in "Business Developments",On February 1, 2020 we entered into a Sale and Purchase Agreement to purchaseacquired the Martinez refinery and related logisticslogistic assets. The aggregate purchase price for the Martinez Acquisition will range from $900.0was $960.0 million to $1.0 billion in cash, based on closing date, plus inventory andfinal 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 $216.1 million and $77.3 million in the Martinez refinery, as defined in the Sale and Purchase Agreement, for a period up to four years following the closing.Contingent Consideration. The purchase price is also subject to other customary purchase price adjustments. The Martinez Acquisition is expected to close in the fourth quarter of 2019, subject to satisfaction of customary closing 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 was financed through a combination of cash on hand, including proceeds from our 2028 Senior Notes, and debt.borrowings under our Revolving Credit Facility.
Contractual Obligations and Commitments
In connection with the Martinez Acquisition and related financing transactions, including the 2028 Senior Notes offering and the redemption of the 2023 Senior Notes, we entered into or assumed certain contractual obligations and commitments, as described below, not previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019.
In connection with the issuance of the 2028 Senior Notes and the redemption of the 2023 Senior Notes during the three months ended March 31, 2020, our long-term debt obligations were reduced in 2023 for the $500.0 million redemption of the 2023 Senior Notes and increased in 2028 by $1.0 billion for the issuance of the 2028 Senior Notes. The 2028 Senior Notes pay interest semi-annually in cash in arrears on February 15 and August 15 each year, beginning on August 15, 2020 and will mature on February 15, 2028. During the first quarter of 2020, we also incurred borrowings under the Revolving Credit Facility to fund a portion of the Martinez Acquisition and for other general corporate purposes. At March 31, 2020, we had outstanding borrowings under the Revolving Credit Facility of $900.0 million that are currently due in May 2023. As a result of this debt activity, our obligation to make interest payments on outstanding debt increased as follows: $8.5 million in 2020, $43.0 million in 2021 and 2022, $32.5 million in 2023, and a $60.0 million annually thereafter until the maturity of the 2028 Senior Notes.
Refer to “Note 7 - Debt” of our Notes to Condensed Consolidated Financial Statements for further information.
We have entered into certain leases and other rental-related agreements in connection with the Martinez Acquisition that resulted in additional contractual obligations as follows: $11.3 million in 2020, $20.2 million in aggregate in 2021 and 2022, $18.9 million in aggregate in 2023 and 2024 and $37.4 million thereafter.
In connection with the Martinez Acquisition, we entered into various five-year crude supply agreements for approximately 145,000 bpd, which are subject to certain volume reductions at our discretion. Following the COVID-19 pandemic and extraordinary market disruption and volatility that it has caused, there has been a significant decrease in the market price of crude oil. While the extent of this market disruption and duration of significantly lower crude oil prices is uncertain, if it does persist for an extended period of time, our obligations for our crude and feedstock supply agreements would be significantly less than the amounts disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019.
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The information above does not include future interest and principal payments related to the May 2020 issuance of $1.0 billion in aggregate principal amount of the 2025 Senior Secured Notes. The 2025 Senior Secured Notes pay interest semi-annually in cash in arrears on May 15 and November 15 of each year, beginning on November 15, 2020 and will mature on May 15, 2025. Additionally, in connection with our sale of five hydrogen facilities subsequent to March 31, 2020, we have agreed to enter into long-term off-take arrangements covering hydrogen produced at each of the five plants on terms in line with similar arrangements in place elsewhere in its refining system. Refer to “Note 20 - Subsequent Events” of our Notes to Condensed Consolidated Financial Statements for further information.
Crude and Feedstock Supply Agreements
Certain of our purchases of crude oil under our agreements with foreign national oil companies require that we post letters of credit, if open credit terms are exceeded, and arrange for shipment. We pay for the crude when invoiced, at which time theany applicable letters of credit are lifted. We have a contract with Saudi AramcoArabian Oil Company (“Saudi Aramco”) pursuant to which we have been purchasing up to approximately 100,000 bpd of crude oil from Saudi Aramco that is processed at our Paulsboro refinery. In connection with the acquisition of the Chalmette Acquisitionrefinery we entered into a contract with PDVSAPetróleos de Venezuela S.A. (“PDVSA”) for the supply of 40,000 to 60,000 bpd of crude oil that can be processed at any of our East or Gulf Coast refineries. We have not sourced crude oil under this agreement since the third quarter of 2017 when PDVSA suspended deliveries due to the parties’ inability to agree to mutually acceptable payment terms.terms and because of U.S. government sanctions against PDVSA. 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 acquisition of the Torrance Acquisition,refinery, we entered into a crude supply agreement with ExxonMobilExxon Mobil Oil Corporation (“ExxonMobil”) for approximately 60,000 bpd of crude oil that can be processed at our Torrance refinery. We currently purchase all of our crude and feedstock needs independently from a variety of suppliers on the spot market or through term agreements for our Delaware City and Toledo refineries.
We have entered into various five-year crude supply agreements with Shell Oil Products for approximately 145,000 bpd, in the aggregate, to support our West Coast and Mid-Continent refinery operations. In addition, we have entered into certain offtake agreements for our West Coast system with the same counterparty for clean products with varying terms up to 15 years.
Inventory Intermediation Agreements
On March 29, 2019, PBF Holding and its subsidiaries, DCR and PRC,We entered into amendments to the Inventory Intermediation Agreements with J. Aron, pursuant to which certain termssupport the operations of the existing inventory intermediation agreements were amended, including, among other things, pricing and an extension of the terms. As a result of the amendments (i) theEast Coast Refineries. The Inventory Intermediation Agreement by and among J. Aron, PBF Holding and DCR relating to the Delaware refinery extended the term to February 28, 2020,expires on June 30, 2021, which term may be further extended by mutual consent of the parties to February 26, 2021June 30, 2022. The Inventory Intermediation Agreement by 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, toamong J. Aron, PBF Holding and PRC expires on December 31, 2021, which term may be further extended by DCR.mutual consent of the parties to December 31, 2022. If not extended, at expiration, we will be required to repurchase the inventories outstanding under the Inventory Intermediation Agreement at that time.
Pursuant to each Inventory Intermediation Agreement, J. Aron continues to purchasepurchases and holdholds title to the J. Aron Products produced by the East Coast Refineries, and delivered into theour J. Aron Storage Tanks. Furthermore, J. Aron agreeshas agreed to sell the J. Aron Products back to the East Coast Refineries as the Productsthey are discharged out of theour J. Aron Storage Tanks. J. Aron has the right to store the J. Aron 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 J. Aron Products independently to third parties.
At June 30, 2019,March 31, 2020, 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$270.8 million. We accrue a corresponding liability for such crude oil, intermediates and finished products.
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Off-Balance Sheet Arrangements and Contractual Obligations and Commitments
We have no off-balance sheet arrangements as of June 30, 2019,March 31, 2020, other than outstanding letters of credit of approximately $283.7$198.0 million.

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,March 31, 2020, PBF Energy has recognized a liability for the Tax Receivable Agreement of $373.5$385.1 million reflecting our estimate of the undiscounted amounts that we expect to pay under the agreement due to exchanges of 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 a share of our Class A common stock equals $31.30$7.08 per share (the closing price on June 30, 2019)March 31, 2020) and that LIBOR were to be 1.85%, we estimate as of June 30, 2019March 31, 2020 that the aggregate amount of these accelerated payments would have been approximately $327.2$330.2 million if triggered immediately on such date. These payment obligations are obligations of PBF Energy and not of PBF LLC or any of its subsidiaries including PBF Holding or PBFX. However, because PBF Energy is a holding company with no operations of its own, PBF Energy’s ability to make payments under the Tax Receivable Agreement is dependent upon a number of factors, including its subsidiaries’ ability to make distributions for the benefit of PBF LLC’s members, including PBF Energy, its ability, if necessary, to finance its obligations under the Tax Receivable Agreement and existing indebtedness which may limit PBF Energy’s subsidiaries’ ability to make distributions.
Future payments under the Tax Receivable Agreement by us in respect of subsequent exchanges of PBF LLC Series A Units for shares of PBF Energy Class A common stock would be in addition 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 law, and that we earn sufficient taxable income to realize all tax benefits that are subject to the Tax Receivable Agreement. It is possible that future transactions or events could increase or decrease the actual tax benefits realized and the corresponding Tax Receivable Agreement payments.
Dividend and Distribution Policy
PBF Energy
With respect to dividends and distributions paid during the sixthree months ended June 30, 2019,March 31, 2020, PBF LLC made aggregate non-tax quarterly distributions of $72.7$36.2 million, or $0.30 per unit to its members, of which $71.9$35.9 million was distributed pro-rata to PBF Energy and the balance was distributed to its other members. PBF Energy used this $71.9$35.9 million to pay quarterly cash dividends of $0.30 per share of Class A common stock on both March 14, 2019 and May 30, 2019. In addition, during17, 2020.
While it is impossible to estimate the six months ended June 30, 2019, PBF LLC made aggregate tax distributions to its membersduration or ultimate financial impact of $54.8 million, of which $53.2 million was made to PBF Energy.
On August 1, 2019, PBF Energy announced a dividend of $0.30 per sharethe COVID-19 pandemic on outstanding PBF Energy Class A common stock. The dividend is payable on August 30, 2019 to PBF Energy Class A common stockholders of record at the close ofour business, on August 15, 2019. PBF LLC intends to make pro-rata distributions of approximately $36.3 million, or $0.30 per unit to its members, including PBF Energy, which in turn, intends to use this distribution to fund the dividend paymentswe expect our future results subsequent to the shareholdersquarter ending March 31, 2020 will be adversely impacted in a significant manner. As part of our strategic plan to navigate these current extraordinary and volatile markets, we have suspended PBF Energy.
PBF Energy currently intends to continue to payEnergy’s quarterly cash dividendsdividend of $0.30 per share on its Class A common stock. We will continue to monitor and evaluate our dividend policy as market conditions develop and our business outlook becomes clearer.
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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 June 30, 2019, the Company had $1,755.3 million of unused borrowing availability, which includes PBF Holding cash and cash equivalents of $156.8 million, under the Revolving Credit Facility to fund its operations, if necessary. Accordingly, as of June 30, 2019, there was sufficient cash and cash equivalents and borrowing capacity under our credit facilities available to make distributions to PBF LLC, if necessary, in order for PBF LLC to make pro-rata distributions to its members, including PBF Energy, necessary to fund in excess of one year’s cash dividend payments by PBF Energy. PBF Holding would have been permitted under its debt agreements to make these distributions; however, its ability to continue to comply with its debt covenants is, to a significant degree, subject to its operating results, which are dependent on a number of factors outside of our control. We believe our and our 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 our intended dividend and distribution policy.
PBF Logistics LP
Due to the uncertainty of the full impact of the COVID-19 pandemic will have on its business, PBFX has paid,decided to reduce their quarterly distribution to its minimum quarterly distribution of $0.30 per unit, which represents a short term shift in its distribution strategy to build cash flow coverage, de-lever the business and strengthen its financial resources. However, PBFX intends to continue to pay aat least the minimum quarterly distribution of at least $0.30 per unit per quarter, or $1.20 per unit on an annualized basis, which aggregates to approximately $18.9 million per quarter and approximately $75.6 million on an annualized basis, based on the number of common units outstanding as of June 30, 2019.March 31, 2020.
During the sixthree months ended June 30, 2019,March 31, 2020, PBFX made quarterly cash distributions totaling $59.6$32.3 million of which $30.4$15.6 million was distributed to PBF LLC and the balance was distributed to its public unitholders.
On August 1, 2019,May 15, 2020, the Board of Directors of PBFX’s general partner, PBF GP, announced a distribution of $0.515$0.30 per unit on outstanding common units of PBFX. The distribution is payable on August 30, 2019June 17, 2020 to PBFX common unitholders of record at the close of business on August 15, 2019.May 27, 2020.
As of June 30, 2019,March 31, 2020, PBFX had $4.1$4.8 million outstanding letters of credit and $244.9$112.2 million available under the PBFX Revolving Credit Facility and cash and cash equivalents of $20.0$116.0 million to fund its operations, if necessary. Accordingly, as of June 30, 2019,March 31, 2020, there was sufficient cash and cash equivalents and borrowing capacity under ourits credit facilities available to PBFX to make distributions to unitholders.
Critical Accounting Estimates
The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Actual results could differ from those estimates. Our critical accounting estimates are included in our annual report on Form 10-K for the year ended December 31, 2019. As of March 31, 2020, the following accounting policy is included as it involves estimates that are considered critical due to the level of subjectivity and judgment involved, as well as the impact on our financial position and results of operations. We believe that all of our estimates are reasonable. Estimates of the sensitivity to earnings that would result from changes in the assumptions used in determining our estimates are not practicable due to the number of assumptions and contingencies involved, and the wide range of possible outcomes.
Impairment of Long-Lived Assets
Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. A long-lived asset is not recoverable if its carrying amount exceeds the sum of the undiscounted cash flows expected to result from its use and eventual disposition. If a long-lived asset is not recoverable, an impairment loss is recognized for the amount by which the carrying amount of the long-lived asset exceeds its fair value, with fair value determined based on discounted estimated net cash flows or other appropriate methods.
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The global crisis resulting from the COVID-19 pandemic has had a substantial impact on the economy and overall consumer demand for energy and hydrocarbon products. As a result of the significant decrease in PBF Energy’s stock price as of the end of the three months ended March 31, 2020 and noticeable reduction in demand for our products, we determined that an impairment triggering event had occurred. Therefore, we performed an interim impairment assessment on certain long-lived assets as of March 31, 2020. As a result of the interim impairment test, we determined that our long-lived assets were not impaired when comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from use of the assets over their remaining estimated useful life. If adverse market conditions persist or there is further deterioration in the general economic environment due to the COVID-19 pandemic, there could be additional indicators that our assets are impaired requiring evaluation that may result in future impairment charges to earnings. Refer to “Note 1 - Description of the Business and Basis of Presentation” of our Notes to Condensed Consolidated Financial Statements.



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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 and the prices we pay for crude oil and other feedstocks. We may use derivative instruments to manage the risks from changes in the prices of crude oil and refined products, natural gas, interest rates, or to capture market opportunities.
Commodity Price Risk
Our earnings, cash flow and liquidity are significantly affected by a variety of factors beyond our control, including the supply of, and demand for, crude oil, other feedstocks, refined products and natural gas. The supply of and demand for these commodities depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, planned and unplanned downtime in refineries, pipelines and production facilities, production levels, the availability of imports, the marketing of competitive and alternative fuels, and the extent of government regulation. As a result, the prices of these commodities can be volatile. Our revenues fluctuate significantly with movements in industry refined product prices, our cost of sales fluctuates significantly with movements in crude oil and feedstock prices and our operating expenses fluctuate with movements in the price of natural gas. We manage our exposure to these commodity price risks through our supply and offtake agreements as well as through the use of various commodity derivative instruments.
We may use non-trading derivative instruments to manage exposure to commodity price risks associated with the purchase or sale of crude oil and feedstocks, finished products and natural gas outside of our supply and offtake agreements. The derivative instruments we use include physical commodity contracts and exchange-traded and over-the-counter financial instruments. We mark-to-market our commodity derivative instruments and recognize the changes in their fair value in our statements of operations.
The negative impact of the unprecedented global health and economic crisis sparked by the COVID-19 pandemic, combined with the movements made by the world’s largest oil producers to increase market share in the current environment has created simultaneous shocks in oil supply and demand resulting in an economic challenge to our industry which has not occurred since our formation. This combination has resulted in significant demand reduction for our refined products and abnormal volatility in oil commodity prices, which may continue for the foreseeable future.
At June 30, 2019March 31, 2020 and December 31, 2018,2019, we had gross open commodity derivative contracts representing 18.66.3 million barrels and 7.411.3 million barrels, respectively, with an unrealized net gain of $19.0$2.4 million and $7.2$0.2 million, respectively. The open commodity derivative contracts as of June 30, 2019March 31, 2020 expire at various times during 2019.2020.
We carry inventories of crude oil, intermediates and refined products (“hydrocarbon inventories”) on our Condensed Consolidated Balance Sheets, the values of which are subject to fluctuations in market prices. Our hydrocarbon inventories totaled approximately 31.833.5 million barrels and 30.530.2 million barrels at June 30, 2019March 31, 2020 and December 31, 2018,2019, respectively. The average cost of our hydrocarbon inventories was approximately $79.35$75.82 and $78.78$79.63 per barrel on a LIFO basis at June 30, 2019March 31, 2020 and December 31, 2018,2019, respectively, excluding the net impact of LCM inventory adjustments of approximately $327.8$1,687.2 million and $651.8$401.6 million, respectively. If market prices of our inventory decline to a level below our average cost, we may be required to write down the carrying value of our hydrocarbon inventories to market.
Our predominant variable operating cost is energy, which is comprised primarily of natural gas and electricity. We are therefore sensitive to movements in natural gas prices. Assuming normal operating conditions, we annually consume a total of between 68expect our annual consumption to range from 75 million and 73to 100 million MMBTUs of natural gas amongstin total across our five refineries as of June 30, 2019.six refineries. Accordingly, a $1.00 per MMBTU change in natural gas prices would increase or decrease our natural gas costs by approximately $68.0$75.0 million to $73.0$100.0 million.
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Compliance Program Price Risk
We are exposed to market risks related to the volatility in the price of credits needed to comply with various governmental and regulatory compliance programs, which includes RINs, required to comply with the RFS. Our overall RINs obligation is based on a percentage of our domestic shipments of on-road fuels as established by 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 or other environmental credits 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. Compliance with such emission standards may require the purchase of emission credits or similar instruments.
Certain of these compliance contracts or instruments qualify as derivative instruments. We generally elect the normal purchase normal sale exception under ASC 815, Derivatives and Hedging, for such instruments, and therefore do not record these contracts at their fair value.
Interest Rate Risk
The maximum commitment under our Revolving Credit Facility is $3.4 billion. Borrowings under the Revolving Credit Facility bear interest either at the Alternative Base Rate plus the Applicable Margin or at Adjusted LIBOR plus the Applicable Margin, all as defined in the 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 $21.5$24.9 million annually.
The PBFX Revolving Credit Facility, with a maximum commitment of $500.0 million, bears interest either at the Alternative Base Rate plus the Applicable Margin or at Adjusted LIBOR plus the Applicable Margin, all as defined in the PBFX Revolving Credit Agreement. 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$4.6 million annually.
In addition, the PBF Rail Term Loan, which bears interest at a variable rate, had an outstanding principal balance of $18.1$12.8 million at June 30, 2019.March 31, 2020. A 1.0% change in the interest rate would increase or decrease our interest expense by approximately $0.2$0.1 million annually, assuming the current outstanding principal balance on the PBF Rail Term Loan remained outstanding.
We also have interest rate exposure in connection with our 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 continue to closely monitor the creditworthiness of customers to whom we grant credit and establish credit limits in accordance with our credit policy.
We continually monitor our market risk exposure, including the impact and developments related to the COVID-19 pandemic combined with the movements made by the world’s largest oil producers to increase market share in the current environment, which have introduced significant volatility in the financial markets subsequent to our year ended December 31, 2019.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
PBF Energy and PBF LLC conducted separate evaluations, under the supervision and with the participation of each company’s management, including the principal executive officer and principal financial officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934 as amended (the “Exchange Act”)) as of June 30, 2019.March 31, 2020. Based upon these evaluations, as required by Exchange Act Rule 13a-15(b), the principal executive officer and principal financial officer, in each case, concluded that the disclosure controls and procedures are effective as of June 30, 2019.March 31, 2020.
Changes in Internal Control Over Financial Reporting
ThereOn February 1, 2020, we completed the Martinez Acquisition. We are in the process of integrating Martinez Refining Company LLC’s (“Martinez Refining”) operations, including internal controls over financial reporting and, therefore, management's evaluation and conclusion as to the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q excludes any evaluation of the internal controls over financial reporting of Martinez Refining. We expect the integration of Martinez Refining's operations, including internal controls over financial reporting to be complete within one year of its acquisition. Martinez Refining accounts for approximately 9% of our total assets and approximately 9% of our total revenues as of and for the quarter ended March 31, 2020.
Management has been no changenot identified any other changes in PBF Energy’sEnergy's or PBF LLC’s internal controlcontrols over financial reporting during the quarter ended June 30, 2019March 31, 2020 that has materially affected, or is reasonably likely to materially affect, PBF Energy’s or PBF LLC’s internal controlcontrols over financial reporting.

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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On July 24, 2013, DNRECthe Delaware Department of Natural Resources and Environmental Control (“DNREC”) issued a Notice of Administrative Penalty Assessment and Secretary’s Order to Delaware City RefiningDCR 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 seekssought $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 assessmentPursuant to a settlement agreement entered into on or about July 11, 2019 by and allegations made in the order,between DCR and are in discussions with DNREC to resolve(“Settlement Agreement”), DCR resolved this assessment in addition toand other Notices of Violation (“NOVs”NOV”) andas well as potential claims available to DNREC claims offor any noncompliance with air quality matters related to activities at the Delaware City Refinery that have occurred sincerefinery occurring between June 1, 2010 and October 31, 2018, including associated Title V Permit deviations. In addition, Delaware City Refining Company has reported to DNREC that measured levels ofdeviations and 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 will 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.facilities. The agreement, which is expected to be executed shortly,Settlement Agreement provides for resolution of DNREC’s claims, a penalty payment by Delaware City Refining CompanyDCR of $950,000, and no admission of liability by Delaware City Refining Company with respect to the alleged air quality violations.DCR. The agreementSettlement Agreement will also result in modification and reissuance by DNREC of certain air quality permits for the Delaware City refinery to resolve claimsobjections made by Delaware City Refining Company objectingDCR to certain prior permit conditions. Testing of the aforementioned coke management facilities was conducted in September 2019 and confirmed compliance with operating permit limits.
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 determinedasserted that the Delaware City refinery had violated the orderSecretary’s 2013 Order by allegedly failing to make timely and full disclosure to DNREC about the nature and extent of those shipments, and had misrepresentedallegedly misrepresenting 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 CompanyDCR has fully satisfied its obligations under the agreement, and therefore that the resolution of liability provided under the agreement has taken effect.

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On December 28, 2016, DNREC issued the Ethanol PermitCoastal Zone Act permit for ethanol (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 Industrial Board (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 Delaware Superior Court (the “Superior Court”) on March 30, 2017. On January 19, 2018, the Superior Court rendered an Opinion regarding the decision of the Coastal Zone Board to dismiss 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. The Coastal Zone Board notified the parties in January of 2020 that it concurred with the parties proposed course of action. The appellants and DCR subsequently filed a motion with the Superior Court requesting relief consistent with what was described to the Coastal Zone Board. In February of 2020, the Superior Court scheduled a conference with counsel for April 3, 2020 to discuss the issues. In addition, the Superior Court issued to the parties a letter, dated March 4, 2020, reporting that the Court would not retain jurisdiction and that the case could proceed to a merits hearing before the Coastal Zone Board. The parties must, therefore, submit to the Coastal Zone Board a joint proposed schedule to govern future proceedings related to the merits hearing.
At the time we acquired the Toledo refinery, EPA 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 at its Plant 4 and Plant 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 SCAQMD, 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 haswe have been in substantive discussions to resolve the preliminary findings. InEffective January 9, 2020, we and EPA entered into a Consent Agreement and Final Order (“CAFO”), effective as of January 9, 2020, which contains no admission by us for any alleged violations in the courseCAFO, includes a release from all alleged violations in the CAFO, requires payment of these discussions, on November 8, 2018, EPA made an offera penalty of $125,000 and the implementation of a supplemental environmental project (“SEP”) of at least $219,000 that must be completed by December 15, 2021. The SEP will consist of configuring the northeast fire water monitor to settle all preliminary findings for $480,000. The Company is currently in communication with EPA to resolve the RMP preliminary findings.

automatically deploy water upon detection of a release.
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, 2018, the Torrance refinery and DTSC reached settlement regarding the oil bearing materials in the form of a stipulation and order, wherein the Torrance refinery agreed that it would recycle or properly dispose of the oil bearing materials by the end of 2018 and pay an administrative penalty of $150,000. The Torrance refinery has complied with these requirements.materials. Following this settlement, in June 2018, DTSC referred the remaining alleged RCRA
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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
On September 3, 2019, we received a letter from the $150,000 DTSC administrative penalty, no otherSCAQMD proposing to settle a NOV relating to Title V deviations alleged to have occurred in the second half of 2016 for $465,000. On April 3, 2020, we settled this NOV for $350,000.
On May 8, 2020, we received a letter from the SCAQMD proposing to settle a NOV relating to Title V deviations alleged to have occurred in the first half of 2017 for $878,450.We are evaluating the allegations and will be communicating with the SCAQMD regarding the allegations and the settlement or penalty demands have been received to date with respect to anyoffer upon the completion of the other NOVs, preliminary findings, or order that are in excess of $100,000. our review.
As the ultimate outcomes of the matters discussed above are uncertain, we cannot currently estimate the final amount or timing of their resolution but any such amount is not expected to have a material impact on our financial position, results of operations or cash flows, individually or in the aggregate.
On 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 forcourt had scheduled 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. BecauseHowever, on October 9, 2019, the parties reached an agreement in principle to settle this matter, which is expected to result in the dismissal with prejudice of all outstanding claims. Although the number of potential claimants is unknown andsettlement resolution has not been finalized, we presently believe the differing events underlying the claims, the potential amount of the claims isoutcome will not determinable. It is possible that an adverse outcome may have a material adverse effectimpact 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 CorporationExxonMobil 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 (the “Court”) 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 ESP explosion, ExxonExxonMobil 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. OurWe filed our opposition to the motion was filed on July 29, 2019. The hearing on Plaintiffs’ motion is currently scheduled forwas heard on September 23, 2019. On October 15, 2019, the judge granted certification to two limited classes of property owners, rejecting two other proposed subclasses based on negligence and on strict liability for ultrahazardous activities. The certified
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subclasses relate to trespass claims for ground contamination and nuisance for air emissions. 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 forwas held on August 23, 2019. As thisFrom the mediation hearing, the parties have reached a tentative agreement in principle to settle. On March 17, 2019, plaintiffs filed with the court a Notice of Motion and Motion for Preliminary Approval of Settlement Agreement for the Court’s approval of the proposed settlement pursuant to which Torrance Refining would pay $2.9 million to resolve the matter is inand receive a full release and discharge from any and all claims and make no admission of any wrongdoing or liability. The Court has scheduled a hearing on May 1, 2020 to consider the class certification phase, we cannot currently estimate the amount or the timing of its resolution.settlement. 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.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 PBFrefinery (the “PBF Defendants”), two entities, PBF Consultants, LLC (“PBF Consultants”) 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 employed by Clean Harbors and performing clay removal work activities inside a clay treating vessel located at the Chalmette Refinery.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 Answeranswer 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.Investments. 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, weInvestments. Discovery has been served by the parties. We cannot currently estimate the amount or the timing of the resolution of this matter. The PBF Defendants previously issued a tender of defense and indemnity to Clean Harbors and its resolution.insurer pursuant to indemnity obligations contained in the associated services agreement. Clean Harbors has accepted the tender of defense and indemnity, and Clean Harbors’ insurer has accepted the tender of defense and indemnity subject to a reservation of rights. We presently believe the outcome will not have a material impact on our financial position, results of operations or cash flows.
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In Varga, Sabrina, et al., v. CRU Railcar Services, LLC, et al., us and other of our entities were named as defendants along with CRU Railcar Services, LLC (“CRU”) in a lawsuit arising from a railcar explosion that occurred while CRU employees were cleaning a railcar owned by us. The initial lawsuit alleged that an employee of CRU was fatally injured as a result of the explosion. On July 5, 2019, a petition for intervention was filed alleging that another CRU employee was fatally injured in the same explosion. On October 7, 2019, a third CRU employee joined the lawsuit alleging severe injuries from the incident. We have issued a tender of defense and indemnity to CRU and its insurer pursuant to indemnity obligations contained in the associated services agreement which have not been accepted at this time. Discovery has been served by the parties. We cannot currently estimate the amount or the timing of the resolution of this matter. 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,The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), also known as “Superfund,” imposes liability, without regard to fault or the legality of the original conduct, on certain classes of persons who are considered to be responsible for the release of a “hazardous substance” into the environment. These persons include the current or former owner or operator of the disposal site or sites where the release occurred and companies that disposed of or arranged for the disposal of the hazardous substances. Under CERCLA, such persons may be subject to joint and several liability for investigation and the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies. As discussed more fully above, certain of our sites are subject to these laws and we may be held liable for investigation and remediation costs or claims for natural resource damages. It is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances or other pollutants released into the environment. Analogous state laws impose similar responsibilities and liabilities on responsible parties. In our current normal operations, we have generated waste, some of which falls within the statutory definition of a “hazardous substance” and some of which may have been disposed of at sites that may require cleanup under Superfund.


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Item 1A. Risk Factors
The following risk factors supplement and/or update the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018:2019:
Risks Relating to Our Business and Industry
Our announced Martinez AcquisitionThe recent outbreak of the COVID-19 pandemic and certain developments in the global oil markets are significantly affecting our business, financial condition and results of operations and may continue to do so, and our liquidity could also be negatively impacted, particularly if the U.S. economy remains unstable for a significant amount of time.
The recent outbreak of the COVID-19 pandemic and certain developments in the global oil markets are negatively impacting worldwide economic and commercial activity and financial markets, as well as global demand for petroleum and petrochemical products. The COVID-19 pandemic and related governmental responses have also resulted in significant business and operational disruptions, including business closures, supply chain disruptions, travel restrictions, stay-at-home orders and limitations on the availability of workforces. In addition, movements made by the world’s largest oil producers to increase market share in the current environment, combined with the impact of the COVID-19 pandemic, has created simultaneous shocks in oil supply and demand resulting in an economic challenge to our industry which has not occurred since our formation. This combination has resulted in significant demand reduction for our refined products and abnormal volatility in oil commodity prices, which may continue for the foreseeable future. The full impact of the COVID-19 pandemic and these market developments is unknown and is rapidly evolving. The full extent to which the COVID-19 pandemic and these market developments negatively impact our business and operations will depend on the severity, location and duration of the effects and spread of COVID-19, the actions undertaken by national, regional and local governments and health officials to contain the virus or treat its effects, and how quickly and to what extent economic conditions improve and normal business and operating conditions resume.
We are working with federal, state and local health authorities to respond to COVID-19 cases in the regions we operate and are taking or supporting measures to try to limit the spread of the virus and to mitigate the burden on the healthcare system. Many of these measures will have an adverse impact on our business and financial results that we are not currently able to fully quantify. For example, we are limiting onsite staff at all of our facilities to essential operational personnel. As a result, we are carefully evaluating projects at our refineries and limiting or postponing projects and other non-essential work. Based on market conditions, our refineries are currently operating at minimum rates. We plan to significantly reduce capital expenditures in the near term, while intending to satisfy and comply with all required safety, environmental and planned regulatory capital commitments and other regulatory requirements, although there are no assurances that we will be able to do so. Non-compliance with applicable environmental and safety requirements, including as a result of reduced staff due to an outbreak at one of our refineries, may subject us to fines or penalties assessed by governmental authorities or may result in an environmental or safety incident. We may also be subject to liability as a result of claims by impacted workers.
If we continue to experience low crude oil prices and deteriorating market conditions, our borrowing capacity under our Revolving Credit Facility may be reduced. As a result, we may require additional capital, and such additional financing may not close when we expect,be available on favorable terms or at all,all.
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Broad economic factors resulting from the current COVID-19 pandemic, including increasing unemployment rates, substantially reduced travel 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 refineryreduced business 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 inventoryconsumer spending, also affect our business. Business closings 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 closelayoffs in the second halfmarkets we operate may adversely affect demand for our refined products. If general economic conditions continue to deteriorate or remain uncertain for an extended period of 2019, subjecttime, our liquidity and ability to satisfactionrepay our outstanding debt may be harmed and the trading price of customary closing conditions.PBF Energy’s Class A common stock, which has already significantly declined in recent weeks, could decline further.
In addition, our results and financial condition may be adversely affected by federal or state laws, regulations, orders, or other governmental or regulatory actions addressing the current COVID-19 pandemic or the U.S. refining industry, which, if adopted, could result in direct or indirect restrictions to our business, financial condition, results of operations and cash flow.
Furthermore, the current COVID-19 pandemic has caused disruption in the financial markets and the businesses of financial institutions. These factors have caused a slowdown in the decision-making of these institutions, which may affect the timing on which we may obtain any additional funding. There can be no assurance that we will completebe able to raise additional funds on terms acceptable to us, if at all.
The foregoing and other continued disruptions to our business as a result of the Martinez Acquisition underCOVID-19 pandemic could result in a material adverse effect on our business, result of operations, financial condition, cash flows and our ability to service our indebtedness and other obligations.
To the terms set forthextent the COVID-19 pandemic adversely affects our business, financial condition, results of operations and liquidity, it may also have the effect of heightening many of the other risks described in the purchase agreement,“Risk Factors” section included in our Annual Report on Form 10-K for the year ended December 31, 2019 and in this Current Report on Form 10-Q, as those risk factors are amended or supplemented by subsequent Quarterly Reports on Form 10-Q and other reports and documents we file with the SEC after the date of this Current Report on Form 10-Q.
Our working capital, cash flows and liquidity can be significantly impacted by volatility in commodity prices and refined product demand.
Payment terms for our crude oil purchases are typically longer than those terms we extend to our customers for sales of refined products. Additionally, reductions in crude oil purchases tend to lag demand decreases for our refined products. As a result of this timing differential, the payables for our crude oil purchases are generally proportionally larger than the receivables for our refined product sales. As we are normally in a net payables position, a decrease in commodity prices generally results in a use of working capital. Given we process a significant volume of crude oil, the impact can materially affect our working capital, cash flows and liquidity.
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PBF Energy has suspended its quarterly dividend and cannot assure you that it will declare dividends in the future or have the available cash to make any future dividend payments.
On March 30, 2020, PBF Energy announced that it has suspended its quarterly dividend of $0.30 per share on its Class A common stock as part of its strategic plan to respond to the impact of the COVID-19 outbreak and related market activity. PBF Energy is not obligated under any applicable laws, its governing documents or any contractual agreements with its existing and prior 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). Any future declaration, amount and payment of any dividends will be at all. We expectthe sole discretion of our board of directors, however, because the impact of the COVID-19 outbreak and related market activity is difficult to financepredict, no assurance can be made when or whether our board of directors will determine to declare a dividend in the transaction throughfuture. Our board of directors may take into account, among other things, general economic conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, plans for expansion, including acquisitions, tax, legal, regulatory and contractual restrictions and implications, including under our subsidiaries’ outstanding debt documents, and such other factors as our board of directors may deem relevant in determining whether to declare or pay any dividend. Because PBF Energy is a combinationholding company with no material assets (other than the equity interests of its direct subsidiary), its cash flow and ability to pay dividends is dependent upon the financial results and cash flows of its indirect subsidiaries PBF Holding and PBFX and their respective operating subsidiaries and the distribution or other payment of cash to it in the form of dividends or otherwise. The direct and indirect subsidiaries of PBF Energy are separate and distinct legal entities and have no obligation to make any funds available to it other than in the case of certain intercompany transactions. As a result, if PBF Energy does not declare or pay dividends you may not receive any return on hand and debt. The Martinez Acquisition is subject to numerous risks and uncertainties, including (i) the possibilityan investment in PBF Energy Class A common stock unless you sell PBF Energy Class A common stock for a price greater than that the announced acquisition will be delayed or will not close due to the failure of either party to satisfy the closing conditions, orwhich you paid 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.it.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Exchange of PBF LLC Series A Units to PBF Energy Class A Common Stock
In the three months ended June 30, 2019, 10,000March 31, 2020, there were 203,277 PBF LLC Series A Units were exchanged for 10,000203,277 shares of PBF Energy Class A common stock in transactions exempt from registration under Section 4(a)(2) of the Securities Act. We received no other consideration in connection with any exchanges. No exchanges were made by any of our directors or current executive officers.



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Item 6. Exhibits
The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this report and such Exhibit Index is incorporated herein by reference.
EXHIBIT INDEX
Exhibit
Number		Description
Exhibit
Number2.2
Description
2.1**
Amendment No. 1 dated February 1, 2020 to Sale and Purchase Agreement dated June 11, 2019 by and between PBF Holding Company LLC and Equilon Enterprises LLC d/b/a Shell Oil Products US (incorporated by reference to Exhibit 2.12.2 filed with PBF Energy Inc.'s Current Report on Form 8-K dated February 6, 2020 (File No. 001-35764)).
Indenture dated as of January 24, 2020, among PBF Holding Company LLC, PBF Finance Corporation, the Guarantors named on the signature pages thereto, Wilmington Trust, National Association, as Trustee and Deutsche Bank Trust Company Americas, as Paying Agent, Registrar, Transfer Agent and Authenticating Agent (incorporated by reference to Exhibit 4.1 filed with PBF Energy Inc.’s Current Report on Form 8-K dated June 11, 2019January 24, 2020 (File No. 001-35764)).
ContributionRegistration Rights Agreement dated as of AprilJanuary 24, 2019 by and between2020, among PBF EnergyHolding Company LLC and PBF Logistics LPFinance Corporation, the Guarantors named therein and BofA Securities, Inc., as Representative of the several Initial Purchasers (incorporated by reference to Exhibit 2.14.3 filed with PBF Energy Inc.’s Current Report on Form 8-K dated April 26, 2019January 24, 2020 (File No. 001-35764)).
First Supplemental Indenture dated February 3, 2020, among PBF Holding Company LLC, PBF Finance Corporation, Martinez Refining Company LLC, Martinez Terminal Company LLC, Wilmington Trust, National Association, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, transfer agent, registrar and authenticating agent (2028 Senior Notes).
First Supplemental Indenture dated February 3, 2020, among PBF Holding Company LLC, PBF Finance Corporation, Martinez Refining Company LLC, Martinez Terminal Company LLC, Wilmington Trust, National Association, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, transfer agent, registrar and authenticating agent (2025 Senior Notes).
Eighth Supplemental Indenture dated March 4, 2020, among PBFX Ace Holdings LLC, PBF Logistics LP, PBF Logistics Finance Corporation, and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 filed with PBF Logistics LP’s Quarterly Report on Form 10-Q dated May 15, 2020 (File No. 001-36446)).
Joinder Agreement to the ABL Security Agreement dated as of February 1, 2020, among Martinez Refining Company LLC, Martinez Terminal Company LLC and Bank of America, N.A., as Administrative Agent.
Joinder Agreement to the Credit Agreement dated as of February 1, 2020, among PBF Holding Company LLC, the Guarantors named on the signature pages thereto including Martinez Refining Company LLC, Martinez Terminal Company LLC and Bank of America, N.A., as Administrative Agent to Senior Secured Revolving Credit Agreement dated as of May 2, 2018.
Amendment dated as of February 18, 2020 to Senior Secured Revolving Credit Agreement dated as of May 2, 2018
Consent to Temporary Reduction of Biweekly Installments of Base Salary for Thomas Nimbley.
Consent to Temporary Reduction of Biweekly Installments of Base Salary for Charles Erik Young.
Consent to Temporary Reduction of Biweekly Installments of Base Salary for Timothy Paul Davis.
Consent to Temporary Reduction of Biweekly Installments of Base Salary for Thomas O’Connor.
Consent to Temporary Reduction of Biweekly Installments of Base Salary for Matthew Lucey.
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.
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.
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.
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Certification of Erik Young, Chief Financial Officer of PBF Energy Company LLC pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1* (1)
Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Energy Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2* (1)
Certification of Erik Young, Chief Financial Officer of PBF Energy Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.3* (1)
Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Energy Company LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.4* (1)
Certification of Erik Young, Chief Financial Officer of PBF Energy Company LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INSInline XBRL Instance Document.
101.SCHInline XBRL Taxonomy Extension Schema Document.
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
———————
**Certain 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 any omitted schedule or exhibit to the SEC upon request.
*Filed herewith.
†Indicates management compensatory plan or arrangement.
(1)This exhibit should not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.

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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
PBF Energy Inc.
Date:May 15, 2020PBF Energy Inc.
By:
Date:August 1, 2019By:/s/ Erik Young
Erik Young

Senior Vice President, Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer)

PBF Energy Company LLC
Date:May 15, 2020PBF Energy Company LLC
By:
Date:August 1, 2019By:/s/ Erik Young
Erik Young

Senior Vice President, Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer)


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