UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)



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

For the quarterly period ended: ~~September~~June 30, ~~2017~~2018



¨	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: 333-186007

Commission File Number: 333-186007-07

PBF HOLDING COMPANY LLC

PBF FINANCE CORPORATION

(Exact name of registrant as specified in its charter)



DELAWARE DELAWARE		27-2198168 45-2685067
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One Sylvan Way, Second Floor Parsippany, New Jersey		07054
(Address of principal executive offices)		(Zip Code)

(973) 455-7500

(Registrant’s telephone number, including area code)

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 Holding Company LLC	o Yes x No
PBF Finance Corporation	o Yes x No

(Note: As of January 1, 2018, each registrant was no longer subject to the filing requirements of section 13 or 15(d) of the Exchange Act, however, each registrant filed all reports required to be filed during the period it was subject to section 13 or 15(d) of the Exchange Act.)

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



PBF Holding Company LLC	x Yes o No
PBF Finance Corporation	x Yes o 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.



	Large accelerated filer	Accelerated filer	Non-accelerated filer (Do not check if a smaller reporting company)	Smaller reporting company	Emerging growth company
PBF Holding Company LLC	¨	¨	x	¨	o
PBF Finance Corporation	o	o	x	o	o

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 Holding Company LLC	o Yes o No
PBF Finance Corporation	o Yes o No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



PBF Holding Company LLC	¨ Yes x No
PBF Finance Corporation	o Yes x No

PBF Holding Company LLC has no common stock outstanding. As of ~~November 7, 2017,~~July 31, 2018, 100% of the membership interests of PBF Holding Company LLC were owned by PBF Energy Company LLC, and PBF Finance Corporation had 100 shares of common stock outstanding, all of which were held by PBF Holding Company LLC.

PBF Finance Corporation meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format.

PBF HOLDING COMPANY LLC

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2018

TABLE OF CONTENTS



CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS			3

PART I – FINANCIAL INFORMATION

	ITEM 1.	Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017	5
		Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	6
		Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	7
		Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	8
		Notes to Condensed Consolidated Financial Statements	10
	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4441
	ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	6360
	ITEM 4.	Controls and Procedures	6562

PART II – OTHER INFORMATION

	ITEM 1.	Legal Proceedings	6663
	ITEM 6.	Exhibits	6967
SIGNATURES			7068

This combined Quarterly Report on Form 10-Q is filed by PBF Holding Company LLC (“PBF Holding”) and PBF Finance Corporation (“PBF Finance”). PBF Holding is a wholly-owned subsidiary of PBF Energy Company LLC (“PBF LLC”) and is the parent company for PBF LLC’s refinery operating subsidiaries. PBF Finance is a wholly-owned subsidiary of PBF Holding. PBF Holding is an indirect subsidiary of PBF Energy Inc. (“PBF Energy”), which is the sole managing member of, and owner of an equity interest representing approximately ~~96.6%~~99.0% of the outstanding economic interests in PBF LLC as of ~~September~~June 30, ~~2017.~~2018. PBF Energy operates and controls all of the business and affairs and consolidates the financial results of PBF LLC and its subsidiaries. PBF Holding, together with its consolidated subsidiaries, owns and operates oil refineries and related facilities in North America.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This combined Quarterly Report on Form 10-Q contains certain "forward-looking statements" 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 expectations regarding future industry trends are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results.

Important factors that could cause actual results to differ materially from our expectations, which we refer to as "cautionary statements," are disclosed under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Form 10-Q, ~~and~~ the Annual Report on Form 10-K for the year ended December 31, ~~2016~~2017 of PBF Holding Company LLC and PBF Finance Corporation, which we refer to as our ~~2016~~2017 Annual Report on Form 10-K, and in our other filings with the SEC. All forward-looking information in this Quarterly Report on Form 10-Q and subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Some of the factors that we believe could affect our results include:

•supply, demand, prices and other market conditions for our products, including volatility in commodity prices;

• the effects of competition in our markets;

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

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

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

•our ~~substantial~~ indebtedness;

•our supply and inventory intermediation arrangements expose us to counterparty credit and performance risk;

•termination of our ~~A&R~~Inventory Intermediation Agreements with J. Aron, which could have a material adverse effect on our liquidity, as we would be required to finance our intermediate and refined products inventory covered by the agreements. Additionally, we are obligated to repurchase from J. Aron certain intermediates and finished products located at the Paulsboro and Delaware City refineries’ storage tanks upon termination of these agreements;

•restrictive covenants in our indebtedness that may adversely affect our operational flexibility or ability to make distributions;

•our assumptions regarding payments arising under PBF Energy’s ~~tax receivable agreement~~Tax Receivable Agreement and other arrangements relating to PBF Energy;

•our expectations and timing with respect to our acquisition activity;

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

•the status of an air permit to transfer crude through the Delaware City refinery’s dock;

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

•the impact of current and future laws, rulings and governmental regulations, including the implementation of rules and regulations regarding transportation of crude oil by rail;

•the impact of the newly enacted federal income tax legislation on our business;

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

•adverse impacts related to 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 successfully integrate ~~the~~recently completed ~~acquisition of the Torrance refinery and related logistics assets (collectively, the “Torrance Acquisition”)~~acquisitions into our business and realize the benefits from such ~~acquisition;~~acquisitions;

•liabilities arising from ~~the Torrance Acquisition~~recent acquisitions that are unforeseen or exceed our expectations; and

•any decisions we continue to make with respect to our energy-related logistical assets that may be transferred to PBFX.

We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this Quarterly Report on Form 10-Q may not in fact occur. Accordingly, investors should not place undue reliance on those statements.

Our forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, including the securities laws of the United States, we do not intend to update or revise any forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

PBF HOLDING COMPANY LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)


	September 30, 2017			December 31, 2016			June 30, 2018			December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	241,745		$	626,705		$	442,717		$	526,160
Accounts receivable	774,907			615,881			1,031,574			951,129
Accounts receivable - affiliate	19,938			7,631			6,745			8,352
Affiliate notes receivable	11,600			—
Inventories	2,310,692			1,863,560			2,540,277			2,213,797
Prepaid expense and other current assets	44,439			40,536
Prepaid and other current assets							51,284			49,523
Total current assets	3,403,321			3,154,313			4,072,597			3,748,961

Property, plant and equipment, net	2,805,149			2,728,699			2,850,236			2,805,390
Investment in equity method investee	172,752			179,882			169,038			171,903
Deferred charges and other assets, net	801,415			504,003			861,395			779,924
Total assets	$	7,182,637		$	6,566,897		$	7,953,266		$	7,506,178

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	441,483		$	530,365		$	634,893		$	572,932
Accounts payable - affiliate	36,045			37,863			31,473			40,817
Accrued expenses	1,809,571			1,462,729			1,818,734			1,800,859
Current debt							1,298			10,987
Deferred revenue	3,296			12,340			3,657			7,495
Notes payable	6,831			—
Note payable							3,200			5,621
Total current liabilities	2,297,226			2,043,297			2,493,255			2,438,711

Long-term debt	1,625,201			1,576,559			1,610,461			1,626,249
Affiliate notes payable	—			86,298
Deferred tax liabilities	46,340			45,699			28,502			33,155
Other long-term liabilities	213,344			226,111			231,767			223,961
Total liabilities	4,182,111			3,977,964			4,363,985			4,322,076

Commitments and contingencies (Note 9)
Commitments and contingencies (Note 8)

Equity:
PBF Holding Company LLC equity
Member’s equity	2,352,772			2,155,863			2,391,321			2,359,791
Retained earnings	659,891			446,519			1,213,798			840,431
Accumulated other comprehensive loss	(25,024		)	(25,962		)	(26,654		)	(26,928		)
Total PBF Holding Company LLC equity	2,987,639			2,576,420			3,578,465			3,173,294
Noncontrolling interest	12,887			12,513			10,816			10,808
Total equity	3,000,526			2,588,933			3,589,281			3,184,102
Total liabilities and equity	$	7,182,637		$	6,566,897		$	7,953,266		$	7,506,178

PBF HOLDING COMPANY LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017
Revenues	$	5,475,816		$	4,508,613		$	15,239,265		$	11,164,571		$	7,440,470		$	5,013,251		$	13,240,071		$	9,763,449

Cost and expenses:
Cost of products and other	4,411,809			3,904,258			13,326,396			9,634,989			6,512,153			4,662,833			11,701,759			8,914,587
Operating expenses (excluding depreciation and amortization expense as reflected below)	389,591			404,045			1,225,014			972,223			402,751			398,485			814,198			835,253
Depreciation and amortization expense	70,338			51,336			181,238			151,473			82,829			56,973			159,607			110,901
Cost of sales	4,871,738			4,359,639			14,732,648			10,758,685			6,997,733			5,118,291			12,675,564			9,860,741
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	54,693			39,912			130,092			111,272			51,756			34,904			110,026			75,367
Depreciation and amortization expense	2,572			1,342			10,355			4,417			2,563			6,020			5,277			7,782
Equity income in investee	(3,799		)	(1,621		)	(11,218		)	(1,621		)	(4,363		)	(3,820		)	(8,385		)	(7,419		)
Loss on sale of assets	28			8,159			940			11,381			594			29			673			912
Total cost and expenses	4,925,232			4,407,431			14,862,817			10,884,134			7,048,283			5,155,424			12,783,155			9,937,383

Income from operations	550,584			101,182			376,448			280,437
Income (loss) from operations													392,187			(142,173		)	456,916			(173,934		)

Other income (expenses):
Other income (expense):
Change in fair value of catalyst leases	473			77			(1,011		)	(4,556		)	4,140			1,104			4,153			(1,484		)
Debt extinguishment costs	—			—			(25,451		)	—			—			(25,451		)	—			(25,451		)
Interest expense, net	(29,269		)	(33,896		)	(92,782		)	(98,446		)	(33,052		)	(32,857		)	(66,366		)	(63,513		)
Income before income taxes	521,788			67,363			257,204			177,435
Other non-service components of net periodic benefit cost													277			(101		)	555			(202		)
Income (loss) before income taxes													363,552			(199,478		)	395,258			(264,584		)
Income tax (benefit) expense	(4,292		)	2,291			2,040			29,287			(3,983		)	5,898			(4,684		)	6,332
Net income	526,080			65,072			255,164			148,148
Less: net (loss) income attributable to noncontrolling interests	(6		)	45			374			438
Net income attributable to PBF Holding Company LLC	$	526,086		$	65,027		$	254,790		$	147,710
Net income (loss)													367,535			(205,376		)	399,942			(270,916		)
Less: net income attributable to noncontrolling interests													76			267			8			380
Net income (loss) attributable to PBF Holding Company LLC													$	367,459		$	(205,643	)	$	399,934		$	(271,296	)

PBF HOLDING COMPANY LLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,				Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017		2016		2018			2017			2018			2017
Net income	$	526,080		$	65,072		$	255,164	$	148,148
Net income (loss)											$	367,535		$	(205,376	)	$	399,942		$	(270,916	)
Other comprehensive income:
Unrealized (loss) gain on available for sale securities	(1		)	(76		)	76		329		(235		)	43			(235		)	77
Net gain on pension and other post-retirement benefits	288			502			862		1,134		255			287			509			574
Total other comprehensive income	287			426			938		1,463		20			330			274			651
Comprehensive income	526,367			65,498			256,102		149,611
Less: comprehensive (loss) income attributable to noncontrolling interests	(6		)	45			374		438
Comprehensive income attributable to PBF Holding Company LLC	$	526,373		$	65,453		$	255,728	$	149,173
Comprehensive income (loss)											367,555			(205,046		)	400,216			(270,265		)
Less: comprehensive income attributable to noncontrolling interests											76			267			8			380
Comprehensive income (loss) attributable to PBF Holding Company LLC											$	367,479		$	(205,313	)	$	400,208		$	(270,645	)

PBF HOLDING COMPANY LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)


	Nine Months Ended September 30,						Six Months Ended June 30,
	2017			2016			2018			2017
Cash flows from operating activities:
Net income	$	255,164		$	148,148
Adjustments to reconcile net income to net cash provided by operations:
Net income (loss)							$	399,942		$	(270,916	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:
Depreciation and amortization	197,365			162,565			168,110			122,849
Stock-based compensation	13,549			12,658			9,520			10,134
Change in fair value of catalyst leases	1,011			4,556			(4,153		)	1,484
Deferred income taxes	641			27,813			(4,653		)	5,123
Non-cash change in inventory repurchase obligations							2,538			(3,107		)
Non-cash lower of cost or market inventory adjustment	(97,943		)	(320,833		)	(245,655		)	167,134
Non-cash change in inventory repurchase obligations	(26,659		)	29,317
Debt extinguishment costs	25,451			—			—			25,451
Pension and other post-retirement benefit costs	31,682			25,894			23,691			21,121
Income from equity method investee	(11,218		)	(1,621		)	(8,385		)	(7,419		)
Distributions from equity method investee	16,897			—			8,385			12,254
Loss on sale of assets	940			11,381			673			912

Changes in operating assets and liabilities:
Accounts receivable	(159,026		)	(194,898		)	(80,445		)	6,121
Due to/from affiliates	(2,318		)	8,194			(7,737		)	(13,505		)
Inventories	(349,189		)	54,052			(80,825		)	(178,738		)
Prepaid expense and other current assets	(4,107		)	(20,203		)
Prepaid and other current assets							(1,761		)	(18,038		)
Accounts payable	(103,069		)	50,297			64,253			(144,819		)
Accrued expenses	401,674			308,047			910			106,073
Deferred revenue	(9,044		)	8,029			(3,838		)	(7,408		)
Other assets and liabilities	(57,387		)	(21,880		)	(10,025		)	(40,525		)
Net cash provided by operations	124,414			291,516
Net cash provided by (used in) operations							230,545			(205,819		)

Cash flows from investing activities:
Acquisition of Torrance refinery and related logistics assets	—			(971,932		)
Expenditures for property, plant and equipment	(211,224		)	(187,743		)	(110,169		)	(179,575		)
Expenditures for deferred turnaround costs	(341,598		)	(138,936		)	(179,194		)	(214,375		)
Expenditures for other assets	(31,096		)	(27,735		)	(12,357		)	(23,747		)
Chalmette Acquisition working capital settlement	—			(2,659		)
Proceeds from sale of assets	—			13,030
Equity method investment - return of capital	451			—			2,865			—
Net cash used in investing activities	$	(583,467	)	$	(1,315,975	)	$	(298,855	)	$	(417,697	)

PBF HOLDING COMPANY LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(unaudited, in thousands)


	Nine Months Ended September 30,						Six Months Ended June 30,
	2017			2016			2018			2017
Cash flows from financing activities:
Contributions from PBF LLC	$	97,000		$	175,000		$	22,000		$	97,000
Distributions to members	(39,315		)	(92,503		)	(26,567		)	(5,252		)
Proceeds from affiliate notes payable	—			635
Repayment of affiliate notes payable	—			(517		)
Proceeds from 2025 7.25% Senior Notes	725,000			—
Cash paid to extinguish 2020 8.25% Senior Secured Notes	(690,209		)	—
Proceeds from 2025 Senior Notes							—			725,000
Cash paid to extinguish 2020 Senior Secured Notes							—			(690,209		)
Repayments of PBF Rail Term Loan	(4,959		)	—			(3,385		)	(3,295		)
Repayments of Rail Facility revolver borrowings	—			(11,457		)
Proceeds from revolver borrowings	490,000			550,000			—			290,000
Repayments of revolver borrowings	(490,000		)	—			—			(290,000		)
Proceeds from catalyst lease	—			7,927
Repayment of note payable							(2,421		)	—
Catalyst lease settlements							(9,466		)	—
Proceeds from insurance premium financing							17,398			—
Deferred financing costs and other	(13,424		)	—			(12,692		)	(12,414		)
Net cash provided by financing activities	74,093			629,085
Net cash (used in) provided by financing activities							(15,133		)	110,830

Net decrease in cash and cash equivalents	(384,960		)	(395,374		)	(83,443		)	(512,686		)
Cash and cash equivalents, beginning of period	626,705			914,749			526,160			626,705
Cash and cash equivalents, end of period	$	241,745		$	519,375		$	442,717		$	114,019

Supplemental cash flow disclosures
Non-cash activities:
Accrued and unpaid capital expenditures							$	20,119		$	127,805
Distribution of assets to PBF Energy Company LLC	$	25,547		$	173,426		—			25,547
Accrued and unpaid capital expenditures	33,120			16,813
Conversion of affiliate notes payable to capital contribution	86,298			—			—			86,298
Notes payable issued for purchase of property, plant and equipment	6,831			—

See notes to condensed consolidated financial statements.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Description of the Business

PBF Holding Company LLC (“PBF Holding” or the “Company”), a Delaware limited liability company, and PBF Finance LP (“PBF Finance”), a wholly-owned subsidiary of PBF Holding, together with ~~its~~the Company’s consolidated subsidiaries, owns and operates oil refineries and related facilities in North America. PBF Holding is a wholly-owned subsidiary of PBF Energy Company LLC (“PBF LLC”). PBF Energy Inc. (“PBF Energy”) is the sole managing member of, and owner of an equity interest representing approximately ~~96.6%~~99.0% of the outstanding economic interest in, PBF LLC as of ~~September~~June 30, ~~2017.~~2018. 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 Western Region LLC (“PBF Western Region”), Torrance Refining Company LLC (“Torrance Refining”) and Torrance Logistics Company LLC are PBF LLC’s principal operating subsidiaries and are all wholly-owned subsidiaries of PBF Holding. Collectively, PBF Holding and its consolidated subsidiaries are referred to hereinafter as the “Company”.

~~On May 14, 2014, PBF Logistics LP (“PBFX”), a Delaware master limited partnership, completed its initial public offering (the “PBFX Offering”).~~ PBF Logistics GP LLC (“PBF GP”) serves as the general partner of ~~PBFX.~~PBF Logistics LP (“PBFX”). PBF GP is wholly-owned by PBF LLC. In ~~connection with the PBFX Offering, PBF Holding contributed to PBFX the assets and liabilities of certain crude oil terminaling assets. In~~ a series of ~~additional~~ transactions, ~~subsequent to the PBFX Offering,~~ PBF Holding distributed certain ~~additional~~ assets to PBF LLC, which in turn contributed those assets to PBFX (as described in “Note 87 - Related Party Transactions”).

Substantially all of the Company’s operations are in the United States. As of ~~September~~June 30, ~~2017,~~2018, the Company’s oil refineries are all engaged in the refining of crude oil and other feedstocks into petroleum products, and have been aggregated to form one reportable segment. 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 largely out of the Company’s control can cause prices to vary over time. The potential margin volatility can have a material effect on the Company’s financial position, earnings and cash flow.

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 financial statements included in the Annual Report on Form 10-K for the year ended December 31, ~~2016~~2017 of PBF Holding Company LLC and PBF Finance Corporation. The results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 are not necessarily indicative of the results to be expected for the full year.

Change in Presentation

~~During the third quarter of~~In 2017, the Company determined that it would revise the presentation of certain line items on its consolidated statements of operations to enhance its disclosure under the requirements of Rule 5-03 of Regulation S-X. The revised presentation is comprised of the inclusion of a subtotal within costs and expenses referred to as “Cost of sales” and the reclassification of total depreciation and amortization expense between such amounts attributable to cost of sales and other operating costs and expenses. The amount of depreciation and

~~PBF HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

amortization expense that is presented separately within the “Cost of Sales” subtotal represents depreciation and amortization of refining and logistics assets that are integral to the refinery production process.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

The historical comparative information has been revised to conform to the current presentation. This revised presentation does not have an effect on the Company’s historical consolidated income from operations or net income, nor does it have any impact on its consolidated balance sheets, statements of comprehensive income or statements of cash flows. Presented below is a summary of the effects of this revised presentation on the Company’s historical statements of operations for the three and ~~nine month periods~~six months ended ~~September~~June 30, ~~2016 (in thousands):~~2017:


	Three Months ended September 30, 2016					Three Months Ended June 30, 2017
	As Previously Reported		Adjustments	As Reclassified		As Previously Reported		Adjustments	As Reclassified
Cost and expenses:
Cost of products and other	$	3,904,258	—	$	3,904,258	$	4,662,833	—	$	4,662,833
Operating expenses (excluding depreciation and amortization expense as reflected below)(1)	404,045		—	404,045		398,485		—	398,485
Depreciation and amortization expense	—		51,336	51,336		—		56,973	56,973
Cost of sales				4,359,639					5,118,291
General and administrative expenses (excluding depreciation and amortization expense as reflected below)(1)	39,912		—	39,912		34,904		—	34,904
Depreciation and amortization expense	52,678		(51,336)	1,342		62,993		(56,973)	6,020
Equity income in investee	(1,621)		—	(1,621)		(3,820)		—	(3,820)
Loss on sale of assets	8,159		—	8,159		29		—	29
Total cost and expenses	$	4,407,431		$	4,407,431	$	5,155,424		$	5,155,424


	Nine Months ended September 30, 2016					Six Months Ended June 30, 2017
	As Previously Reported		Adjustments	As Reclassified		As Previously Reported		Adjustments	As Reclassified
Cost and expenses:
Cost of products and other	$	9,634,989	—	$	9,634,989	$	8,914,587	—	$	8,914,587
Operating expenses (excluding depreciation and amortization expense as reflected below)(1)	972,223		—	972,223		835,253		—	835,253
Depreciation and amortization expense	—		151,473	151,473		—		110,901	110,901
Cost of sales				10,758,685					9,860,741
General and administrative expenses (excluding depreciation and amortization expense as reflected below)(1)	111,272		—	111,272		75,367		—	75,367
Depreciation and amortization expense	155,890		(151,473)	4,417		118,683		(110,901)	7,782
Equity income in investee	(1,621)		—	(1,621)		(7,419)		—	(7,419)
Loss on sale of assets	11,381		—	11,381		912		—	912
Total cost and expenses	$	10,884,134		$	10,884,134	$	9,937,383		$	9,937,383

~~Cost Classifications~~

~~Cost of products and other consists~~(1) Amounts disclosed include the retrospective adjustments recorded as part of the ~~cost~~adoption of ~~crude oil, other feedstocks, blendstocks and purchased refined products and~~ASU 2017-07, as defined below under “Recently Adopted Accounting Guidance”.

Recently Adopted Accounting Guidance

In May 2014, the ~~related in-bound freight and transportation costs.~~Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (Topic 606) “Revenue from Contracts with Customers.” (“ASC 606”). ASC 606 supersedes the revenue recognition requirements in Accounting Standards Codification 605 “Revenue Recognition” (“ASC 605”),

Operating expenses (excluding depreciation and amortization) consists of direct costs of labor, maintenance and services, utilities, property taxes, environmental compliance costs and other direct operating costs incurred in connection with our refining operations. Such expenses exclude depreciation related to refining and logistics assets

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that ~~are integral~~reflects the consideration to which the ~~refinery production process, which is presented separately as Depreciation and amortization expense as a component of Cost of sales on the Company’s condensed consolidated statements of operations.~~

~~Reclassification~~

~~Certain amounts previously reported~~entity expects to be entitled to in ~~the Company's condensed consolidated financial statements~~exchange for prior periods have been reclassified to conform to the 2017 presentation. These reclassifications, in addition to the changes in “Cost and expenses” described above, include certain details about accrued expenses in that footnote.

~~Recently Adopted Accounting Guidance~~

~~Effective January 1, 2017, the~~those goods or services. The Company adopted Accounting Standard Update (“ASU”) No. 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (a consensus of the FASB Emerging Issues Task Force)” (“ASU 2016-06”). ASU 2016-6 was issued in March 2016 by the Financial Accounting Standards Board (“FASB”) to increase consistency in practice in applying guidance on determining if an embedded derivative is clearly and closely related to the economic characteristics of the host contract, specifically for assessing whether call (put) options that can accelerate the repayment of principal on a debt instrument meet the clearly and closely related criterion. The Company’s adoption of this guidance did not materially impact its consolidated financial statements.

Effective January 1, 2017, the Company adopted ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 was issued by the FASB in March 2016 to simplify certain aspects of the accounting for share-based payments to employees. The guidance in ASU 2016-09 requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled rather than recording excess tax benefits or deficiencies in additional paid-in capital. The guidance in ASU 2016-09 also allows an employer to repurchase more of an employee’s shares than it could prior to its adoption for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. The Company’s adoption of this guidance did not materially impact its consolidated financial statements.

Effective January 1, 2017, the Company adopted ASU No. 2016-17, “Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control” (“ASU 2016-17”). ASU 2016-17 was issued by the FASB in October 2016 to amend the consolidation guidance on how a reporting entity that is the single decision maker of a variable interest entity (“VIE”) should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The amendments in this ASU do not change the characteristics of a primary beneficiary in current GAAP. The amendments in this ASU require that a reporting entity, in determining whether it satisfies the second characteristic of a primary beneficiary, include all of its direct variable interests in a VIE and, on a proportionate basis, its indirect variable interests in a VIE held through related parties, including related parties that are under common control with the reporting entity. The Company’s adoption of this guidance did not materially impact its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”), which provides guidance to assist entities with evaluating when a set of transferred assets and activities is a business. Under ASU 2017-01, it is expected that the definition of a business will be narrowed and more consistently applied. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments in this ASU should be applied prospectively on or after the effective date. Early adoption of ASU 2017-01 is permitted and the Company early adopted the new standard in its consolidated financial statements and related disclosures effective January 1, 2017. The Company’s adoption of this guidance did not materially impact its consolidated financial statements.

~~Recent Accounting Pronouncements~~

In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” (“ASU 2015-14”), which defers the effective date of ASU 2014-09, “Revenue from

~~PBF HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

Contracts with Customers” (“ASU 2014-09”) for all entities by one year. Additional ASUs have been issued in 2016 and 2017 that provide certain implementation guidance related to ASU 2014-09 (collectively, the Company refers to ASU 2014-09 and these additional ASUs as the “Updated Revenue Recognition Guidance”). The Updated Revenue Recognition Guidance will replace most existing revenue recognition guidance in GAAP when it becomes effective. Under ASU 2015-14, this guidance becomes effective for interim and annual periods beginning after December 15, 2017 and permits the use of either the retrospective or modified retrospective transition method. Under ASU 2015-14, early adoption is permitted onlyASC 606 as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company has established a working group to assess the Updated Revenue Recognition Guidance, including its impact on the Company’s business processes, accounting systems, controls and financial statement disclosures. The Company will adopt this new standard effective January 1, 2018 using the modified retrospective application. Under that method, the cumulative effect of initially applying the standard is recognized as an adjustment to the opening balance of retained earnings, and revenues reported in the periods prior to the date of adoption are not changed. The working group is progressing through its implementation plan and continues to evaluate the impact of this new standard on the Company’s consolidated financial statements and related disclosures. Additionally, the Company has begun training the relevant staff at its corporate headquarters and refineries on the Updated Revenue Recognition Guidance, including the potential impacts on internal reporting and disclosure requirements. Although the Company’s analysis of the new standard is still in process and interpretative and industry specific guidance is still developing, based on the results to date, we have reached tentative conclusions for most contract types and do not believe revenue recognition patterns will change materially. However, it is expected that the new standard will have some impact on presentation and disclosures in its financial statements and internal controls.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), to increase the transparency and comparability about leases among entities. The new guidance requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, and requires a modified retrospective approach to adoption. Early adoption is permitted. The Company has established a working group to study and lead implementation of the new guidance in ASU 2016-02. This working group was formed during 2016 and has begun the process of compiling a central repository for all leases entered into by the Company and its subsidiariestransition method. See “Note 2 - Revenues” for further analysis as the implementation project progresses. The Company will not early adopt this new guidance. The working group continues to evaluate the impact of this new standard on its consolidated financial statements and related disclosures. At this time, the Company has identified that the most significant impacts of this new guidance will be to bring nearly all leases on its balance sheet with “right of use assets” and “lease obligation liabilities” as well as accelerating the interest expense component of financing leases. While the assessment of the impacts arising from this standard is progressing, it remains in its early stages. Accordingly, the Company has not fully determined the impacts on its business processes, controls or financial statement disclosures.details.

In March 2017, the FASB issued ASU No. 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”), which provides guidance to improve the reporting of net periodic benefit cost in the income statement and on the components eligible for capitalization in assets. Under the new guidance, employers will present the service cost component of net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in assets. Additionally, under this guidance, employers will present the other non-service components of the net periodic benefit cost separately from the line item(s) that includes the service cost and outside of any subtotal of operating income, if one is presented. ~~These components will not be eligible for capitalization in assets.~~ Employers will apply the guidance on the presentation of the components of net periodic benefit cost in the income statement retrospectively. The guidance limiting the capitalization of net periodic benefit cost in assets to the service cost component will be applied prospectively. The guidance includes a practical expedient allowing entities to estimate amounts for comparative periods using the information previously disclosed in their pension and other postretirement benefit plan note to the financial statements. The amendments in this ASU are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company ~~does not expect~~adopted ASU 2017-07 effective January 1, 2018 and applied the

~~PBF HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

~~adoption~~ new guidance retrospectively in the Condensed Consolidated Statement of ~~this new standard to~~Operations. For the three and six months ended June 30, 2018, the Company recorded income of $277 and $555, respectively. For the three and six months ended June 30, 2017, the Company recorded expense of $101 and $202, respectively. These income and expense amounts have ~~a material impact on its consolidated financial statements~~been recorded within Other income (expense) for the non-service components of net periodic benefit cost that were historically recorded within Operating expenses and ~~related disclosures.~~General and administrative expenses.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which provides guidance to increase clarity and reduce both diversity in practice and cost and complexity when applying the existing accounting guidance on changes to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 require an entity to account for the effects of a modification unless all the following are met: (i) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (ii) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance in ASU 2017-09 should be applied prospectively. The amendments in this ASU are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company’s adoption of this guidance did not materially impact its condensed consolidated financial statements.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), to increase the transparency and comparability about leases among entities. Additional ASUs have been issued subsequent to ASU 2016-02 to provide additional clarification and implementation guidance for leases related to ASU 2016-02 related to, among other things, the application of certain practical expedients, the rate implicit in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments (collectively, the Company refers to ASU 2016-02 and these additional ASUs as the “Updated Lease Guidance”). The Updated Lease Guidance requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. The Updated Lease Guidance is effective for interim and annual periods beginning after December 15, 2018, and requires a modified retrospective approach to adoption. While early adoption is permitted, the Company will ~~apply~~not early adopt the ~~guidance prospectively for any modifications~~Updated Lease Guidance. The Company has established

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

a working group to ~~its stock compensation plans occurring after~~study and lead the ~~effective date~~implementation of the Updated Lease Guidance and has instituted a task plan designed to meet the requirements and implementation deadline. The Company has also evaluated and purchased a lease software system, completed software design and configuration of the system, and begun testing the implementation of the selected system. The working group continues to evaluate the impact of the Updated Lease Guidance on the Company’s consolidated financial statements and related disclosures and the impact on its business processes and controls. While the assessment of this standard is ongoing, the Company has identified that the most significant impacts of the Updated Lease Guidance will be to bring nearly all leases on its balance sheet with “right of use assets” and “lease obligation liabilities” as well as accelerating recognition of the interest expense component of financing leases. The new ~~standard.~~standard will also require additional disclosures for financing and operating leases.

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 through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. The amendments in ASU 2017-12 address specific limitations in current GAAP by expanding hedge accounting for both nonfinancial and financial risk components and by refining the measurement of hedge results to better reflect an entity’s hedging strategies. Thus, the amendments in ASU 2017-12 will enable an entity to better portray the economic results of hedging activities for certain fair value and cash flow hedges and will avoid mismatches in earnings by allowing for greater precision when measuring changes in fair value of the hedged item for certain fair value hedges. Additionally, by aligning the timing of recognition of hedge results with the earnings effect of the hedged item for cash flow and net investment hedges, and by including the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is presented, the results of an entity’s hedging program and the cost of executing that program will be more visible to users of financial statements. The guidance in ASU 2017-12 concerning amendments to cash flow and net investment hedge relationships that exist on the date of adoption should be applied using a modified retrospective approach (i.e., with a cumulative effect adjustment recorded to the opening balance of retained earnings as of the initial application date). The guidance in ASU 2017-12 also provides 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 should be applied prospectively. The amendments in this ASU are effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures.

~~2. ACQUISITIONS~~

~~Torrance Acquisition~~

~~On July 1, 2016,~~In June 2018, the ~~Company acquired from ExxonMobil Oil Corporation and its subsidiary, Mobil Pacific Pipe Line Company, the Torrance refinery and related logistics assets (collectively, the “Torrance Acquisition”~~FASB issued ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718): Targeted Improvements to Non-employee Share-Based Payment Accounting” (“ASU 2018-07”). ASU 2018-07 expands the scope of Topic 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. Under ASU 2018-07, the existing employee guidance for share-based payments will apply to nonemployee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The ~~Torrance refinery, located~~cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in Torrance, California, is a high-conversion, delayed-coking refinery. The facility is strategically positioned in Southern California with advantaged logistics connectivity that offers flexible raw material sourcing and product distribution opportunities primarilylieu of an expected term in the ~~California, Las Vegas and Phoenix area markets. The Torrance Acquisition provided~~option-pricing model for nonemployee awards. ASU 2018-07 also specifies the ~~Company~~following: (i) that equity-classified share-based payment awards issued to nonemployees will now be measured on the grant date, instead of the previous requirement to remeasure the awards through the performance completion date; (ii) for performance conditions, compensation cost associated with ~~a broader more diversified asset base and increased~~ the ~~number~~award will be recognized when achievement of ~~operating refineries from four~~the performance condition is probable, rather than upon achievement of the performance condition; (iii) the current requirement to ~~five and expanded~~reassess the ~~Company’s combined crude oil throughput capacity. The acquisition also provided the Company with a presence~~classification (equity or liability) for nonemployee awards upon vesting will be eliminated, except for awards in the ~~PADD 5 market.~~form of convertible instruments. Finally, 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. The amendments in this ASU are effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted. Upon adoption, an entity should only re-measure liability-classified awards that have not been settled by the date of adoption and equity-classified awards for which a

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

~~In addition~~measurement date has not been established through a cumulative-effect adjustment to refining assets, the transaction included a number of high-quality logistics assets including a sophisticated network of crude and products pipelines, product distribution terminals and refinery crude and product storage facilities. The most significantretained earnings as of the ~~logistics~~beginning of the fiscal year of adoption. Upon transition, the entity is required to measure these nonemployee awards at fair value as of the adoption date. The entity must not re-measure assets ~~is a crude gathering~~that are completed. Disclosures required at transition include the nature of and transportation system which delivers San Joaquin Valley crude oil directly from the field to the refinery. Additionally, included in the transaction were several pipelines which provide access to sources of crude oil including the Ports of Long Beach and Los Angeles, as well as clean product outlets with a direct pipeline supplying jet fuel to the Los Angeles airport.

~~The aggregate purchase price~~reason for the ~~Torrance Acquisition was $521,350~~change in ~~cash after post-closing purchase price adjustments, plus final working capital~~accounting principle and, if applicable, quantitative information about the cumulative effect of ~~$450,582. In addition,~~the change on retained earnings or other components of equity. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures.

2. REVENUES

Adoption of Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”

Prior to January 1, 2018, the Company ~~assumed certain pre-existing environmental~~recognized revenue from customers when all of the following criteria were met: (i) persuasive evidence of an exchange arrangement existed, (ii) delivery had occurred or services had been rendered, (iii) the buyer’s price was fixed or determinable and ~~regulatory emission credit obligations~~(iv) collectability was reasonably assured. Amounts billed in ~~connection~~advance of the period in which the service was rendered or product delivered were recorded as deferred revenue.

Effective January 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. As a result, the ~~Torrance Acquisition. The transaction was financed through a combination~~Company has changed its accounting policy for the recognition of ~~cash on hand, including proceeds~~revenue from ~~certain PBF Energy equity offerings and borrowings under the Company’s asset based revolving credit agreement (the “Revolving Loan”).~~contracts with customers as detailed below.

The Company ~~accounted~~adopted ASC 606 using the modified retrospective method, which has been applied for the ~~Torrance Acquisition~~three and six months ended June 30, 2018. The Company has applied ASC 606 only to those contracts that were not complete as of January 1, 2018. As such, the financial information for prior periods has not been adjusted and continues to be reported under ASC 605.The Company did not record a ~~business combination under GAAP whereby~~cumulative effect adjustment upon initially applying ASC 606 as there was not a significant impact upon adoption; however, the ~~Company recognizes assets acquired~~details of significant qualitative and ~~liabilities assumed~~quantitative disclosure changes upon implementing ASC 606 are discussed below.

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an ~~acquisition at their estimated fair values as of~~amount that reflects the ~~date of acquisition. The final purchase price and fair value allocation were completed as of June 30, 2017. During the measurement period, which ended~~consideration we expect to be entitled to in June 2017, adjustments were made to the Company’s preliminary fair value estimates related primarily to Property, plant and equipment and Other long-term liabilities reflecting the finalization of the Company’s assessment of the costs and duration of certain assumed pre-existing environmental obligations.

~~The total purchase consideration and the fair values of the assets and liabilities at the acquisition date were as follows:~~

Purchase Price
Gross purchase price $ 537,500
Working capital 450,582
Post close purchase price adjustments (16,150 )
Total consideration $ 971,932
exchange for those goods or services.

The following table ~~summarizes~~provides information relating to the ~~amounts recognized~~Company’s revenues from external customers for ~~assets acquired and liabilities assumed as~~each product or group of similar products for the ~~acquisition date:~~periods presented:

Fair Value Allocation
Inventories $ 404,542
Prepaid expenses and other current assets 982
Property, plant and equipment 704,633
Deferred charges and other assets, net 68,053
Accounts payable (2,688 )
Accrued expenses (64,137 )
Other long-term liabilities (139,453 )
Fair value of net assets acquired $ 971,932



	Three Months Ended June 30,
	2018		2017
Gasoline and distillates	$	6,341,757	$	4,154,375
Feedstocks and other	404,197		310,951
Asphalt and blackoils	397,203		287,731
Chemicals	202,552		179,076
Lubricants	94,761		81,118
Total Revenues	$	7,440,470	$	5,013,251

The Company’s condensed consolidated financial statements for the three and nine months ended September 30, 2017 include the results of operations of the Torrance refinery and related logistics assets subsequent to the Torrance Acquisition. The Company’s condensed consolidated financial statements for the prior year include the results of operations of such assets from the date of the Torrance Acquisition on July 1, 2016 to September 30, 2016 during which period the Torrance refinery and related logistics assets contributed revenues of $928,225 and net income of $51,457. On an unaudited pro forma basis, the revenues and net income of the Company assuming the Torrance Acquisition had occurred on January 1, 2015, are shown below. The unaudited pro forma information does not

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

purport to present what the Company’s actual results would have been had the acquisition occurred on January 1, 2015, nor is the financial information indicative of the results of future operations. The unaudited pro forma financial information includes the depreciation and amortization expense attributable to the Torrance Acquisition and interest expense associated with the related financing.

Nine Months Ended September 30, 2016
Pro forma revenues $ 12,243,582
Pro forma net loss attributable to PBF Holding Company LLC $ (60,908 )

The unaudited amount of revenues and net loss above have been calculated after conforming accounting policies of the Torrance refinery and related logistics assets to those of the Company and certain one-time adjustments.

~~Chalmette Acquisition~~

On November 1, 2015, the Company acquired from ExxonMobil, Mobil Pipe Line Company and PDV Chalmette, L.L.C., 100% of the ownership interests of Chalmette Refining, which owns the Chalmette refinery and related logistics assets (collectively, the “Chalmette Acquisition”). While the Company’s condensed consolidated financial statements for both the three and nine months ended September 30, 2017 and 2016 include the results of operations of Chalmette Refining, the final working capital settlement for the Chalmette Acquisition was finalized in the first quarter of 2016. Additionally, certain acquisition related costs for the Chalmette Acquisition were recorded in the first quarter of 2016.

~~Acquisition Expenses~~

The Company incurred acquisition related costs consisting primarily of consulting and legal expenses related to completed, pending and non-consummated acquisitions. These costs were $22 and $488 in the three and nine months ended September 30, 2017, respectively, and $3,912 and $13,622 in the three and nine months ended September 30, 2016, respectively. These costs are included in the condensed consolidated statements of operations in General and administrative expenses.

~~3. INVENTORIES~~

~~Inventories consisted of the following:~~

September 30, 2017
Titled Inventory Inventory Intermediation Arrangements Total
Crude oil and feedstocks $ 1,302,162
$ —
$ 1,302,162
Refined products and blendstocks 1,065,608
343,904
1,409,512
Warehouse stock and other 97,063
—
97,063
$ 2,464,833
$ 343,904
$ 2,808,737
Lower of cost or market adjustment (404,227 ) (93,818 ) (498,045 )
Total inventories $ 2,060,606
$ 250,086
$ 2,310,692

~~PBF HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

December 31, 2016
Titled Inventory Inventory Intermediation Arrangements Total
Crude oil and feedstocks $ 1,102,007
$ —
$ 1,102,007
Refined products and blendstocks 915,397
352,464
1,267,861
Warehouse stock and other 89,680
—
89,680
$ 2,107,084
$ 352,464
$ 2,459,548
Lower of cost or market adjustment (492,415 ) (103,573 ) (595,988 )
Total inventories $ 1,614,669
$ 248,891
$ 1,863,560



	Six Months Ended June 30,
	2018		2017
Gasoline and distillates	$	11,336,077	$	8,243,186
Asphalt and blackoils	706,064		472,859
Feedstocks and other	642,906		535,361
Chemicals	378,660		363,499
Lubricants	176,364		148,544
Total Revenues	$	13,240,071	$	9,763,449

The Company’s revenues are generated from the sale of refined petroleum products. 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 their performance obligation to their customers is fulfilled. Delivery and transfer in title are specifically agreed to between the Company and customers within the contracts. The Company 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.

Deferred Revenues

The Company records deferred revenues when cash payments are received or are due in advance of our performance, including amounts which are refundable. Deferred revenue was $3,657 and $7,495 as of June 30, 2018 and December 31, 2017, respectively. The decrease in the deferred revenue balance for the six months ended June 30, 2018 is primarily driven by the timing and extent of cash payments received or due in advance of satisfying the Company’s performance obligations for the comparative periods.

Our payment terms vary by the type and location of our customer 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, we require payment before the products or services are delivered to the customer.

Significant Judgment and Practical Expedients

For performance obligations related to sales of products, the Company has determined that customers are able to direct the use of, and obtain substantially all of the benefits from, the products at the point in time that the products are delivered. The Company has determined that the transfer of control upon delivery to the customer’s requested destination accurately depicts the transfer of goods. Upon the delivery of the products and transfer of control, the Company generally has the present right to payment and the customers bear the risks and rewards of ownership of the products. We have elected the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

3. INVENTORIES

Inventories consisted of the following:



June 30, 2018
	Titled Inventory			Inventory Intermediation Agreements			Total
Crude oil and feedstocks	$	1,159,842		$	—		$	1,159,842
Refined products and blendstocks	1,036,028			296,142			1,332,170
Warehouse stock and other	103,066			—			103,066
	$	2,298,936		$	296,142		$	2,595,078
Lower of cost or market adjustment	(11,751		)	(43,050		)	(54,801		)
Total inventories	$	2,287,185		$	253,092		$	2,540,277



December 31, 2017
	Titled Inventory			Inventory Intermediation Agreements			Total
Crude oil and feedstocks	$	1,073,093		$	—		$	1,073,093
Refined products and blendstocks	1,030,817			311,477			1,342,294
Warehouse stock and other	98,866			—			98,866
	$	2,202,776		$	311,477		$	2,514,253
Lower of cost or market adjustment	(232,652		)	(67,804		)	(300,456		)
Total inventories	$	1,970,124		$	243,673		$	2,213,797

Inventory under inventory intermediation ~~arrangements~~agreements included certain light finished products sold to counterparties and stored in the Paulsboro and Delaware City refineries’ storage facilities in connection with the amended and restated inventory intermediation agreements (as amended, in the ~~second and third quarters of 2017, the “A&R~~“Inventory Intermediation Agreements”) with J. Aron & Company, a subsidiary of The Goldman Sachs Group, Inc. (“J. Aron”).

During the three months ended September 30, 2017, the Company recorded an adjustment to value its inventories to the lower of cost or market (“LCM”) which increased both operating income and net income by $265,077 reflecting the net change in the lower of cost or market inventory reserve from $763,122 at June 30, ~~2017 to $498,045 at September 30, 2017. During the nine months ended September 30, 2017,~~2018, the Company recorded an adjustment to value its inventories to the lower of cost or market which increased both operating income and net income by ~~$97,943~~$158,002 reflecting the net change in the lower of cost or market inventory reserve from ~~$595,988~~$212,803 at ~~December~~March 31, ~~2016~~2018 to ~~$498,045~~$54,801 at ~~September~~June 30, ~~2017.~~

2018. During the ~~three~~six months ended ~~September~~June 30, ~~2016,~~2018, the Company recorded an adjustment to value its inventories to the lower of cost or market which increased both operating income and net income by ~~$103,990~~$245,655 reflecting the net change in the lower of cost or market inventory reserve from ~~$900,493~~$300,456 at December 31, 2017 to $54,801 at June 30, ~~2016 to $796,503 at September 30, 2016.~~ 2018.

During the ~~nine~~three months ended ~~September~~June 30, ~~2016,~~2017, the Company recorded an adjustment to value its inventories to the lower of cost or market which ~~increased both~~decreased operating income and net income by ~~$320,833~~$151,095 reflecting the net change in the lower of cost or market inventory reserve from ~~$1,117,336~~$612,027 at March 31, 2017 to $763,122 at June 30, 2017. During the six months ended June 30, 2017, the Company recorded an adjustment to value its inventories to the lower of cost or market which decreased both operating income and net income by $167,134 reflecting the net change in the lower of cost or market inventory reserve from $595,988 at December 31, ~~2015~~2016 to ~~$796,503~~$763,122 at ~~September~~June 30, ~~2016.~~2017.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

4. ACCRUED EXPENSES

Accrued expenses consisted of the following:


	September 30, 2017		December 31, 2016		June 30, 2018		December 31, 2017
Inventory-related accruals	$	984,702	$	810,027	$	1,138,913	$	1,151,810
Inventory intermediation arrangements	282,640		225,524
Renewable energy credit and emissions obligations	138,717		70,158
Inventory intermediation agreements					227,740		244,287
Excise and sales tax payable	91,042		86,046		176,557		118,515
Accrued transportation costs	90,933		89,830		53,464		64,400
Renewable energy credit and emissions obligations					52,390		26,231
Accrued utilities					31,647		42,189
Accrued salaries and benefits					30,347		58,589
Accrued refinery maintenance and support costs					25,578		35,674
Customer deposits	45,548		9,215		22,670		16,133
Accrued utilities	36,274		44,190
Accrued refinery maintenance and support costs	36,098		28,670
Accrued salaries and benefits	32,709		17,466
Accrued capital expenditures					14,371		17,342
Accrued interest	30,987		28,934		10,516		9,466
Accrued capital expenditures	18,933		33,610
Environmental liabilities	8,295		8,882		6,940		7,968
Other	12,693		10,177		27,601		8,255
Total accrued expenses	$	1,809,571	$	1,462,729	$	1,818,734	$	1,800,859

The Company has the obligation to repurchase certain intermediates and finished products that are held in the Company’s refinery storage tanks at the Delaware City and Paulsboro refineries in accordance with the ~~A&R~~Inventory Intermediation Agreements with J. Aron. As of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, a liability is recognized for the ~~inventory intermediation arrangements~~Inventory Intermediation Agreements and is recorded at market price for the J. Aron owned inventory held in the Company’s storage tanks under the ~~A&R~~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 the Environmental Protection Agency (“EPA”). To the degree the Company is unable to blend the required amount of biofuels to satisfy its RINs obligation, RINs must be purchased on the open market to avoid penalties and fines. The Company records its RINs obligation on a net basis in Accrued expenses when its RINs liability is greater than the amount of RINs earned and purchased in a given period and in Prepaid ~~expenses~~ and other current assets when the amount of RINs earned and purchased is greater than the RINs liability. 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, including AB32 in California.~~emissions. These requirements include incremental costs to operate and maintain our facilities as well as to implement and manage new emission controls and ~~programs, which have contributed to the increase in accrued environmental liabilities and emission obligations following the Torrance Acquisition.~~programs. Renewable energy credit and emissions obligations fluctuate with the volume of applicable product sales and timing of credit purchases.

5. DEBT

~~Senior Notes~~

2018 Revolving Credit Agreement

On May ~~30, 2017, PBF Holding entered into an Indenture (the “Indenture”) among~~2, 2018, PBF Holding and ~~PBF Holding’s~~certain of its wholly-owned subsidiaries, as borrowers or subsidiary ~~PBF Finance Corporation (“PBF Finance” and, together with PBF Holding, the “Issuers”), the~~ guarantors, ~~named therein (collectively the “Guarantors”) and Wilmington Trust, National Association~~replaced its existing asset-based revolving credit agreement dated as ~~Trustee, under which the Issuers issued $725,000 in aggregate principal amount~~ of ~~7.25% senior~~August 15, 2014 (the “August 2014

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

~~notes due 2025~~Revolving Credit Agreement”) with a new asset-based revolving credit agreement (the ~~“2025 Senior Notes”~~“2018 Revolving Credit Agreement"). The ~~Issuers received net proceeds~~2018 Revolving Credit Agreement has a maximum commitment of ~~approximately $711,576 from the offering after deducting the initial purchasers’ discount~~$3,400,000, a maturity date of May 2023 and estimated offering expenses. The Company used the net proceeds to fund the cash tender offer (the “Tender Offer”) for any and all of its outstanding 8.25% senior secured notes due 2020 (the “2020 Senior Secured Notes”), to pay the related redemption price and accrued and unpaid interest for any 2020 Senior Secured Notes that remained outstanding after the completionredefines certain components of the ~~Tender Offer,~~Borrowing Base (as defined in the credit agreement) to make more funding available for working capital and ~~for~~other general corporate purposes. ~~The difference between~~Borrowings under the ~~carrying value of~~2018 Revolving Credit Agreement bear interest at the ~~2020 Senior Secured Notes on~~Alternative Base Rate plus the ~~date they were reacquired and~~Applicable Margin or at the ~~amount for which they were reacquired has been classified as debt extinguishment costs in~~Adjusted LIBOR Rate plus the ~~condensed consolidated statements of operations.~~

The 2025 Senior Notes included a registration rights arrangement whereby the Company agreed to file with the SEC and use commercially reasonable efforts to consummate an offer to exchange the 2025 Senior Notes for an issue of registered notes with terms substantially identical to the notes not later than 365 days after the date of the original issuance of the notes. This registration statement was declared effective on October 18, 2017 and it is anticipated that the exchange will be consummated during the fourth quarter of 2017. As such, the Company does not anticipate it will have to transfer any consideration as a result of the registration rights agreement and thus no loss contingency was recorded.

The 2025 Senior Notes are guaranteed on a senior unsecured basis by substantially all of PBF Holding’s subsidiaries. The 2025 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 senior indebtedness, including PBF Holding’s Revolving Loan and the Issuers’ 7.00% senior notes due 2023 (the “2023 Senior Notes”). The 2025 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 2025 Senior Notes and the guarantees are effectively subordinated to any of the Issuers’ and the Guarantors’ existing or future secured indebtedness (including the Revolving Loan) to the extent of the value of the collateral securing such indebtedness. The 2025 Senior Notes and the guarantees are structurally subordinated to any existing or future indebtedness and other obligations of the Issuers’ non-guarantor subsidiaries.

PBF Holding has optional redemption rights to repurchase all or a portion of the 2025 Senior Notes at varying prices no less than 100% of the principal amounts of the notes plus accrued and unpaid interest. The holders of the 2025 Senior Notes have repurchase options exercisable only upon a change in control, certain asset sale transactions, or in event of a defaultApplicable Margin (all as defined in the ~~Indenture.~~credit agreement). The Applicable Margin ranges from 0.25% to 1.00% for Alternative Base Rate Loans and from 1.25% to 2.00% for Adjusted LIBOR Rate Loans, in each case depending on the Company’s corporate credit rating. In addition, an accordion feature allows for commitments of up to $3,500,000. The LC Participation Fee ranges from 1.00% to 1.75% depending on the ~~2025 Senior Notes contain~~Company’s corporate credit rating and the Fronting Fee is capped at 0.25%. The 2018 Revolving Credit Agreement contains representations, warranties and covenants by PBF Holding and the other borrowers, as well as customary ~~terms,~~ events of default and ~~covenants for an issuer of non-investment grade debt securities that limit certain types of additional debt, equity issuances,~~indemnification obligations.

At June 30, 2018 and ~~payments. Many of these covenants will cease to apply or will be modified if the 2025 Senior Notes are rated investment grade.~~

~~Upon the satisfaction~~December 31, 2017, there was $350,000 and ~~discharge of the 2020 Senior Secured Notes in connection with the closing of the Tender Offer and the redemption described above, a Collateral Fall-Away Event~~$350,000, respectively, outstanding under the indenture governing the 2023 Senior Notes occurred on May 30, 2017, and the 2023 Senior Notes became unsecured and certain covenants were modified, as provided for in the indenture governing the 2023 Senior Notes and related documents.revolving credit agreements.

~~Notes Payable~~

In connection with the purchase of a waste water treatment facility servicing the Toledo refinery completed on September 28, 2017, the Company issued a short-term promissory note payable in the amount of $6,831 due June 30, 2018. Payments of $403 on the note will be made monthly with a balloon payment of $3,200 due at maturity.

6. INCOME TAXES

PBF Holding is a limited liability company treated as a “flow-through” entity for income tax purposes. Accordingly, there is generally no benefit or ~~provision~~expense for federal or state income tax in the PBF Holding financial statements apart from the income tax attributable to two subsidiaries acquired in connection with the acquisition of Chalmette Refining and the Company’s wholly-owned Canadian subsidiary, PBF Energy Limited (“PBF Ltd.”)~~. The two~~

~~PBF HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

~~subsidiaries acquired in connection with the Chalmette Acquisition~~, which are treated as C-Corporations for income tax purposes.

The income tax ~~provision~~ (benefit) expense in the PBF Holding condensed consolidated financial statements of operations consists of the following:


	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended June 30,					Six Months Ended June 30,
	2017			2016		2017		2016		2018			2017		2018			2017
Current income tax expense	$	190		$	389	$	1,399	$	1,474
Current income tax (benefit) expense										$	(26	)	$	737	$	(31	)	$	1,209
Deferred income tax (benefit) expense	(4,482		)	1,902		641		27,813		(3,957		)	5,161		(4,653		)	5,123
Total income tax (benefit) expense	$	(4,292	)	$	2,291	$	2,040	$	29,287	$	(3,983	)	$	5,898	$	(4,684	)	$	6,332

During the preparation of the financial statements for the first quarter of 2016, management determined that the deferred income tax liabilities for PBF Ltd. were understated for prior periods. For the three months ended March 31, 2016, the Company incurred $30,602 of deferred tax expense and $121 of current tax expense relating to a correction of prior periods.

7. ~~AFFILIATE NOTES PAYABLE~~

PBF Holding has entered into affiliate notes payable with PBF Energy and PBF LLC with an interest rate of 2.5% and a five year term, which may be prepaid in whole or in part at any time, at the option of PBF Holding, without penalty or premium. Additional borrowings may be made by PBF Holding under such affiliate notes payable from time to time. In the fourth quarter of 2016, the notes were extended to 2021. Additionally, in the fourth quarter of 2016, PBF LLC converted $379,947 of the outstanding affiliate notes payable from PBF Holding to a capital contribution. In the first quarter of 2017, PBF LLC converted the full amount of outstanding affiliate notes payable from PBF Holding of $86,298 to a capital contribution. Therefore, as of September 30, 2017, PBF Holding had no outstanding affiliate notes payable with PBF Energy and PBF LLC ($86,298 outstanding as of December 31, 2016).

8. RELATED PARTY TRANSACTIONS

Transactions and Agreements with PBFX

PBF Holding entered into agreements with PBFX that establish fees for certain general and administrative services, and operational and maintenance services provided by the Company to PBFX. In addition, the Company executed terminal, pipeline and storage services agreements with PBFX under which PBFX provides commercial transportation, terminaling, storage and pipeline services to the Company. These agreements with PBFX include the agreements set forth below:

Contribution Agreements

Immediately prior to the closing of certain contribution agreements, which PBF LLC entered into with PBFX (collectively referred to as the “Contribution Agreements”), PBF Holding contributed certain assets to PBF LLC. PBF LLC in turn contributed those assets to PBFX pursuant to the Contribution Agreements. Certain proceeds received by PBF LLC from PBFX in accordance with the Contribution Agreements were subsequently contributed by PBF LLC to PBF Holding.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

Pursuant to a Contribution Agreement entered into on February 15, 2017, PBF Holding contributed all of the issued and outstanding limited liability company interests of Paulsboro Natural Gas Pipeline Company LLC (“PNGPC”) to PBF LLC. PBFX Operating Company LP (“PBFX Op Co”), PBFX’s wholly-owned subsidiary, in turn acquired the limited liability company interests in PNGPC from PBF LLC in connection with the Contribution Agreement effective February 28, 2017. PNGPC owns and operates an ~~existing~~ interstate natural gas pipeline which serves

PBF ~~HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

~~PBF Holding's~~Holding’s Paulsboro refinery (the “Paulsboro Natural Gas Pipeline”~~), which is subject to regulation by the Federal Energy Regulatory Commission (“FERC”~~). In connection with the PNGPC Contribution Agreement, PBFX constructed a new pipeline to replace the existing pipeline, which commenced services in August 2017.

In consideration for the PNGPC limited liability company interests, PBFX delivered to PBF LLC (i) an $11,600 intercompany promissory note in favor of Paulsboro Refining Company LLC, a wholly owned subsidiary of PBF Holding (the “Promissory Note”), (ii) an expansion rights and right of first refusal agreement in favor of PBF LLC with respect to the ~~new pipeline~~Paulsboro Natural Gas Pipeline and (iii) an assignment and assumption agreement with respect to certain outstanding litigation involving PNGPC and the existing pipeline. Following the completion of the Paulsboro Natural Gas Pipeline in the fourth quarter of 2017, PBF Holding received full payment of the affiliate promissory note due from PBFX.

Commercial Agreements

~~In connection~~PBFX currently derives a substantial majority of its revenue from long-term, fee-based commercial agreements with PBF Holding relating to assets associated with the Contribution Agreements ~~PBF Holding entered into long-term, fee-based,~~described above, the majority of which include minimum volume ~~commitment~~commitments (“~~MVC”~~MVCs”) ~~commercial agreements with PBFX.~~and are supported by contractual fee escalations for inflation adjustments and certain increases in operating costs. Under these agreements, PBFX provides various pipeline, rail and truck terminaling and storage services to PBF Holding and PBF Holding has committed, under certain of these agreements, to provide PBFX with minimum fees based on minimum monthly throughput volumes. ~~The fees under each of these agreements are supported by contractual fee escalations for inflation adjustments and certain increases in operating costs.~~ PBF Holding believes the terms and conditions under these agreements, as well as the Omnibus Agreement (as defined below) and the Services Agreement (as defined below) each with PBFX, are generally no less favorable to either party than those that could have been negotiated with unaffiliated parties with respect to similar services.

~~These~~See the 2017 Form 10-K for a more complete description of PBF Holding’s commercial agreements ~~(as defined in the table below)~~ with PBFX, ~~include:~~including those identified as leases, that were entered into prior to 2018. The following are commercial agreements entered into between PBF Holding and PBFX during 2018:

Amended and Restated Rail Agreements - The Delaware City Rail Terminaling Services Agreement and the Delaware West Ladder Rack Terminaling Services Agreement between PBF Holding and Delaware City Terminaling Company LLC were amended effective as of January 1, 2018 (collectively, the “Amended and Restated Rail Agreements”) with the service fees thereunder being adjusted, including the addition of an ancillary fee paid by PBF Holding on an actual cost basis. In determining payments due under the Amended and Restated Rail Agreements, excess volumes throughput under the agreements shall apply against required payments in respect to the minimum throughput commitments on a quarterly basis and, to the extent not previously applied, on an annual basis against the MVCs.

Knoxville Terminals Agreement - On April 16, 2018, PBFX completed the purchase of two refined product terminals located in Knoxville, Tennessee, which include product tanks, pipeline connections to the Colonial and Plantation pipeline systems and truck loading facilities (the “Knoxville Terminals”) from Cummins Terminals, Inc. (the “Knoxville Terminals Purchase”). In connection with the Knoxville Terminals Purchase, PBF Holding and PBFX entered into a terminal throughput and storage agreement (the “Knoxville Terminals Agreement”) whereby PBFX provides PBF Holding terminaling and storage services at the Knoxville Terminals. The initial term of the Knoxville Terminals Agreement is five years with automatic one-year renewals unless canceled by either party through written notice. Under the Knoxville Terminals Agreement, PBF Holding has a minimum volume commitment for storage and a minimum revenue commitment for throughput. The minimum throughput revenue commitment is $894 for year one, $1,788 for year two and $2,683 for year three and thereafter. The minimum storage commitment is equal to the available shell capacity for the dedicated PBF Holding tanks. If PBF Holding does not throughput or store the aggregate amounts

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)



~~Service Agreements~~	~~Initiation Date~~	~~Initial Term~~	~~Renewals (a)~~	~~Minimum Volume Commitments~~	~~Force Majeure~~
~~Transportation and Terminaling~~
~~Delaware City Rail Terminaling Services Agreement~~	~~5/8/2014~~	~~7 years, 8 months~~	~~2 x 5~~	~~85,000 barrels per day (“bpd”)~~	~~PBFX or PBF Holding can declare~~
~~Toledo Truck Unloading & Terminaling Services Agreement~~	~~5/8/2014~~	~~7 years, 8 months~~	~~2 x 5~~	~~5,500 bpd~~
~~Delaware West Ladder Rack Terminaling Services Agreement~~	~~10/1/2014~~	~~7 years, 3 months~~	~~2 x 5~~	~~40,000 bpd~~
~~Toledo Storage Facility Storage and Terminaling Services Agreement- Terminaling Facility~~	~~12/12/2014~~	~~10 years~~	~~2 x 5~~	~~4,400 bpd~~
~~Delaware Pipeline Services Agreement~~	~~5/15/2015~~	~~10 years, 8 months~~	~~2 x 5~~	~~50,000 bpd~~
~~Delaware Pipeline Services Agreement- Magellan Connection~~	~~11/1/2016~~	~~2 years, 5 months~~	~~N/A~~	~~14,500 bpd~~
~~Delaware City Truck Loading Services Agreement- Gasoline~~	~~5/15/2015~~	~~10 years, 8 months~~	~~2 x 5~~	~~30,000 bpd~~
~~Delaware City Truck Loading Services Agreement- LPGs~~	~~5/15/2015~~	~~10 years, 8 months~~	~~2 x 5~~	~~5,000 bpd~~
~~East Coast Terminals Terminaling Services Agreements~~	~~5/1/2016~~	~~Various (f)~~	~~Evergreen~~	~~15,000 bpd (e)~~
~~East Coast Terminals Tank Lease Agreements~~	~~5/1/2016~~	~~Various (f)~~	~~Evergreen~~	~~350,000 barrels (c)~~
~~Torrance Valley Pipeline Transportation Services Agreement- North Pipeline~~	~~8/31/2016~~	~~10 years~~	~~2 x 5~~	~~50,000 bpd~~
~~Torrance Valley Pipeline Transportation Services Agreement- South Pipeline~~	~~8/31/2016~~	~~10 years~~	~~2 x 5~~	~~70,000 bpd~~
~~Torrance Valley Pipeline Transportation Services Agreement- Midway Storage Tank~~	~~8/31/2016~~	~~10 years~~	~~2 x 5~~	~~55,000 barrels (c)~~
~~Torrance Valley Pipeline Transportation Services Agreement- Emidio Storage Tank~~	~~8/31/2016~~	~~10 years~~	~~2 x 5~~	~~900,000 barrels per month~~
~~Torrance Valley Pipeline Transportation Services Agreement- Belridge Storage Tank~~	~~8/31/2016~~	~~10 years~~	~~2 x 5~~	~~770,000 barrels per month~~
~~Paulsboro Natural Gas Pipeline Services Agreement (b)~~	~~8/4/2017~~	~~15 years~~	~~Evergreen~~	~~60,000 dekatherms per day~~
~~Toledo Terminal Services Agreement (g)~~	~~5/1/2016~~	~~1 year~~	~~Evergreen~~	~~N/A~~
~~Storage~~
~~Toledo Storage Facility Storage and Terminaling Services Agreement- Storage Facility~~	~~12/12/2014~~	~~10 years~~	~~2 x 5~~	~~3,849,271 barrels (c)~~	~~PBFX or PBF Holding can declare~~
~~Chalmette Storage Agreement (d)~~	~~See note (d)~~	~~10 years~~	~~2 x 5~~	~~625,000 barrels~~	~~PBFX or PBF Holding can declare~~

~~____________________~~


~~(a)~~	~~PBF Holding has the option to extend the agreements for up to two additional five-year terms, as applicable.~~

equal to the minimum throughput revenue or available shell capacity described above, PBF ~~HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~


~~(b)~~	~~In August 2017, PBFX’s new pipeline commenced service. Concurrent with the commencement of operations, a new service agreement was entered into between PBF Holding and PNGPC.~~


~~(c)~~	Reflects the overall capacity as stipulated by the storage agreement. The storage MVC is subject to effective operating capacity of each tank which can be impacted by routine tank maintenance and other factors.


~~(d)~~	The Chalmette Storage Agreement was entered into on February 15, 2017 but commences at the earlier of November 1, 2017 or the completion of the Chalmette Storage Tank (as defined below), which is currently expected to be completed in November 2017.


~~(e)~~	The East Coast Terminals terminaling service agreements have no MVCs and are billed based on actual volumes throughput, other than a terminaling services agreement between the East Coast Terminals' Paulsboro, New Jersey location and PBF Holding with a 15,000 bpd MVC.


~~(f)~~	~~The East Coast Terminal related party agreements include varying term lengths, ranging from one to five years.~~


~~(g)~~	~~Subsequent to the Toledo Terminal Acquisition, the Toledo Terminal was added to the East Coast Terminals Terminaling Service Agreements.~~

Holding will be required to pay a shortfall payment equal to the shortfall revenue or capacity. The throughput and storage services fees are subject to increase or decrease effective as of January 1 of each year, beginning on January 1, 2019, by the amount of any change in the Consumer Price Index, provided that the fee may not be adjusted below the initial amount. The storage commitment under the Knoxville Terminals Agreement is considered a lease.

Other Agreements

In addition to the commercial agreements described above, ~~at the closing of the PBFX Offering, PBFX~~PBF Holding has entered into an omnibus agreement with PBFX, PBF GP and PBF LLC, which has been amended and restated in connection with the closing of certain of the contribution agreements ~~with PBF GP, PBF LLC and PBF Holding~~ (as amended, the “Omnibus Agreement”). The Omnibus Agreement addresses the payment of an annual fee for the provision of various general and administrative services and reimbursement of salary and benefit costs for certain PBF Energy employees. ~~The annual fee was increased to $6,900 per year effective as~~

Additionally, PBF Holding and certain of ~~January 1, 2017.~~

~~In connection with the PBFX Offering, PBFX also~~its subsidiaries have entered into an operation and management services and secondment agreement with ~~PBF Holding and certain of its subsidiaries,~~PBFX (the “Services Agreement”), pursuant to which PBF Holding and its subsidiaries provide PBFX with the personnel necessary for PBFX to perform its obligations under its commercial agreements. PBFX reimburses PBF Holding for the use of such employees and the provision of certain infrastructure-related services to the extent applicable to its operations, including storm water discharge and waste water treatment, steam, potable water, access to certain roads and grounds, sanitary sewer access, electrical power, emergency response, filter press, fuel gas, API solids treatment, fire water and compressed air. On February 28, 2017, PBF Holding and PBFX entered into a fifth amended and restated services agreement (as amended, the “Services Agreement”) in connection with the PNGPC Contribution Agreement, resulting in an increase to the annual fee to $6,696. The Services Agreement will terminate upon the termination of the Omnibus Agreement, provided that PBFX may terminate any service on ~~30 days’~~30-days’ notice.

In connection with the Chalmette Storage Agreement, PBF Holding’s subsidiary, Chalmette Refining, entered into a twenty-year lease for the premises upon which a new tank at the Chalmette refinery (the “Chalmette Storage Tank”) will be located (the “Lease”) and a project management agreement (the “Project Management Agreement”) pursuant to which Chalmette Refining has managed the construction of the tank. The Lease can be extended by PBFX Op Co for two additional ten year terms.

~~PBF HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

Summary of Transactions with PBFX

A summary of ~~revenue and expense~~ transactions with PBFX is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016		2018		2017		2018		2017
Revenues under affiliate agreements:
Reimbursements under affiliate agreements:
Services Agreement	$	1,639	$	1,280	$	4,918	$	3,523	$	1,674	$	1,661	$	3,348	$	3,279
Omnibus Agreement	1,890		1,201		5,174		3,460		1,737		1,630		3,437		3,284
Total expenses under affiliate agreements	62,359		43,842		176,916		118,356		63,785		58,355		124,649		114,557

9.8. COMMITMENTS AND CONTINGENCIES

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.

In connection with the Paulsboro refinery acquisition, the Company assumed certain environmental remediation obligations. The Paulsboro environmental liability of ~~$10,809~~$11,448 recorded as of ~~September~~June 30, ~~2017~~2018 ($~~10,792~~10,282 as of

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

December 31, ~~2016)~~2017) represents the present value of expected future costs discounted at a rate of 8.0%. The current portion of the environmental liability is recorded in Accrued expenses and the non-current portion is recorded in Other long-term liabilities. ~~This~~As of June 30, 2018 and December 31, 2017, this liability is self-guaranteed by the Company.

In connection with the acquisition of the Delaware City assets, Valero Energy Corporation (“Valero”) remains responsible for certain pre-acquisition environmental obligations up to $20,000 and the predecessor to Valero in ownership of the refinery retains other historical obligations.

In connection with the acquisition of the Delaware City assets and the Paulsboro refinery, the Company and Valero purchased ten year, $75,000 environmental insurance policies to insure against unknown environmental liabilities at each site. In connection with the Toledo refinery acquisition, Sunoco, Inc. (R&M) ~~(“Sunoco”)~~ remains responsible for environmental remediation for conditions that existed on the closing date for twenty years from March 1, 2011, subject to certain limitations.

In connection with the acquisition of the Chalmette refinery, the Company obtained $3,936 in financial assurance (in the form of a surety bond) to cover estimated potential site remediation costs associated with an agreed to Administrative Order of Consent with the EPA. The estimated cost assumes remedial activities will continue for a minimum of 30thirty years. Further, in connection with the acquisition of the Chalmette refinery, the Company purchased a ten year, $100,000 environmental insurance policy to insure against unknown environmental liabilities at the refinery.

~~As of November 1, 2015,~~ At the time the Company acquired Chalmette ~~Refining, which~~refinery it was ~~in discussions with the Louisiana Department of Environmental Quality (“LDEQ”)~~subject to resolve self-reported deviations from refinery operations relating to certain Clean Air Act Title V permit conditions, limits and other requirements. LDEQ commenced an enforcement action against Chalmette Refining on November 14, 2014 by issuing a Consolidated Compliance Order and Notice of Potential Penalty (the “Order”) issued by the Louisiana Department of Environmental Quality (“LDEQ”) covering deviations from 2009 and 2010. Chalmette Refining and LDEQ subsequently entered into a dispute resolution agreement ~~the enforcement of which has been suspended while negotiations are ongoing, which may include~~to negotiate the resolution of deviations ~~outside~~on or before December 31, 2014. On May 18, 2018 the ~~periods covered~~Order was settled by ~~the~~

~~PBF HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

~~Order. In February 2017, Chalmette Refining~~LDEQ and the ~~LDEQ met to resolve the issues under the Order, including the assessment of~~Chalmette refinery for an administrative penalty ~~against Chalmette Refining. Although a resolution~~of $741, of which $100 has ~~not~~ been ~~finalized,~~paid in cash and the ~~administrative penalty is anticipated to~~remainder has been or will be ~~approximately $700, including~~spent on beneficial environmental projects. ~~To the extent the administrative penalty exceeds such amount, it is not expected to be material to the Company.~~

On December 23, 2016, the Delaware City refinery received a Notice of Violation (“NOV”) from DNREC concerning a potential violation of the DNREC order authorizing the shipment of crude oil by barge from the refinery. The NOV alleges that DCR made shipments to locations other than the Paulsboro refinery in violation of the order and requests certain additional information. On February 7, 2017, DCR responded to the NOV. On March 10, 2017, DNREC issued a $150 fine in a Notice of Penalty Assessment and Secretary’s Order to the Delaware City refinery for violating the 2013 Secretary’s Order. DNREC determined that the Delaware City refinery had violated the order by failing to make timely and full disclosure to DNREC about the nature and extent of those shipments, and had misrepresented the number of shipments that went to other facilities. The penalty assessment and Secretary’s Order conclude that the 2013 Secretary’s Order was violated by the Delaware City 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, DCR appealed the Notice of Penalty Assessment and Secretary’s Order. The hearing of the appeal is scheduled for February 2018. To the extent that the penalty and Secretary’s Order are upheld, there will not be a material adverse effect on the Company’s financial position, results of operations or cash flows.

On December 28, 2016, DNREC issued a Coastal Zone Act permit (the “Ethanol ~~permit”~~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 ~~final opinion and order of the Board was issued March 16, 2017. 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 ~~September 28, 2017,~~January 19, 2018, the ~~Delaware~~ Superior Court ~~issued it scheduling order governing briefing in~~rendered an Opinion regarding the decision of the Coastal Zone Board to dismiss the appeal of the ~~Coastal Zone Board’s decision to sustain the permit issued~~Ethanol Permit for the ethanol project. The ~~filing of briefs has been scheduled for October and November 2017.~~

~~On October 19, 2017,~~Judge determined that the ~~Delaware City Refinery received approval from DNREC~~record created by the Coastal Zone Board was insufficient for the ~~construction~~Superior Court to make a decision, and ~~operation~~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. During the hearing before the Coastal Zone Board on standing, one of the ~~ethanol marketing project~~appellants’ witnesses made a reference to ~~allow for a combined total loading of up to 10,000 bpd, on an annual average basis,~~the flammability of ethanol, without any indication of the significance of flammability/ explosivity to specific concerns. Moreover, the appellants did not introduce at hearing any evidence of the relative flammability of ethanol as compared to other materials shipped to and from the refinery. However, the sole dissenting opinion from the Coastal Zone Board focused on ~~to marine vessels at~~ the ~~marine piers and~~flammability/explosivity issue, alleging that the ~~terminal truck loading rack, subject to certain operational and emissions limitations~~appellants’ testimony raised the issue as ~~well as other conditions. On~~a distinct basis for potential harms. Once the same date, Delaware City Logistics Company LLC received DNREC approval for the construction of (i) four additional loading arms for each of lanes 4, 10 and 11 for purposes of loading ethanol at its truck loading rack and (ii) a vapor vacuum control system for loading lanes connectedBoard responds to the ~~existing vapor recovery unit located at~~remand, it will go back to the Superior Court to complete its ~~terminal in Delaware City. This approval is also subject to certain operational~~analysis and ~~emission limitations as well as other conditions.~~issue a decision.

~~On February 3, 2011,~~At the time the Company acquired the Toledo refinery, the EPA ~~sent a request for information~~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, the EPA issued an Amended Notice of Violation, and on September 20, 2013, the EPA issued a Notice of Violation and Finding of Violation to Toledo refinery, alleging certain violations of the Clean Air Act toat its Plant 4 and Plant 9 flares since the ~~Paulsboro~~acquisition of the refinery ~~with respect to compliance with EPA standards governing flaring. The~~on March 1, 2011. Toledo refinery and the EPA ~~have reached agreement on~~subsequently entered into tolling agreements pending settlement ~~which includes a~~ discussions. Although the resolution has not been finalized, the

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

civil administrative penalty ~~of $180. On July 13, 2017~~is anticipated to be approximately $645 including supplemental environmental projects. To the ~~U.S. Department of Justice filed with~~extent the ~~Court~~administrative penalty exceeds such amount, it is not expected to be material to the ~~motion to enter the consent decree. On September 19, 2017, the Court approved the consent decree and in connection therewith the Paulsboro refinery has paid a penalty of $180.~~Company.

In connection with the acquisition of the Torrance refinery and related logistics assets, the Company assumed certain pre-existing environmental liabilities totaling ~~$138,511~~$133,928 as of ~~September~~June 30, ~~2017~~2018 ($~~142,456~~136,487 as of December 31, ~~2016)~~2017), 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. In addition, in connection with the acquisition of the Torrance refinery and related logistics assets, the Company purchased a ten year, $100,000 environmental

~~PBF HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

insurance policy to insure against unknown environmental liabilities. Furthermore, in connection with the acquisition, the Company assumed responsibility for certain specified environmental matters that occurred prior to the Company’s ownership of the refinery and the logistics assets, including specified incidents and/or ~~NOVs~~notices of violations (“NOVs”) issued by regulatory agencies in various years before the Company’s 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”).

~~Additionally, subsequent~~

Subsequent to the acquisition, further NOVs were issued by the SCAQMD, Cal/OSHA, the City of Torrance, ~~and~~ 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 the Company’s acquisition. ~~With~~EPA in November 2016 conducted a Risk Management Plan (“RMP”) inspection following the ~~exception~~acquisition related to Torrance operations and issued preliminary findings in March 2017 concerning RMP potential operational violations. EPA and the California Department of ~~one NOV~~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. In April 2017, EPA referred the RCRA preliminary findings to DTSC for ~~which~~final resolution. On March 1, 2018, the Company received a ~~proposed~~notice of intent to sue from Environmental Integrity Project, on behalf of Environment California, under RCRA with respect to the alleged violations from EPA’s and DTSC’s December 2016 inspection. On March 2, 2018, DTSC issued an order to correct alleged RCRA violations relating to the accumulation of oil bearing materials in roll off bins during 2016 and 2017. On June 14, 2018, the Torrance refinery and DTSC reached settlement ~~is less~~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. Following this settlement, in June 2018, DTSC referred the remaining alleged RCRA violations from EPA’s and DTSC’s December 2016 inspection to the California Attorney General for final resolution. The Torrance refinery and the California Attorney General are in discussions to resolve these remaining alleged RCRA violations. Other than ~~$100,~~the $150 DTSC administrative penalty, no other settlement or penalty demands have been received to date with respect to any of the other ~~NOVs.~~NOVs, preliminary findings, or order that are in excess of $100. As the ultimate outcomes are uncertain, the Company cannot currently estimate the final amount or timing of their ~~resolution. It is reasonably possible that SCAQMD, Cal/OSHA and/or the City of Torrance will assess penalties in the other matters in excess of $100~~resolution but any such amount is not expected to have a material impact on the Company’s financial position, results of operations or cash flows, individually or in the aggregate.

Applicable Federal and State Regulatory Requirements

The Company’s operations and many of the products it manufactures are subject to certain specific requirements of the Clean Air Act (the “CAA”) and related state and local regulations. The CAA contains provisions that require capital expenditures for the installation of certain air pollution control devices at the Company’s refineries. Subsequent rule making authorized by the CAA or similar laws or new agency interpretations of existing rules, may necessitate additional expenditures in future years.

In 2010, New York State adopted a Low-Sulfur Heating Oil mandate that, beginning July 1, 2012, requires all heating oil sold in New York State to contain no more than 15 parts per million (“PPM”) sulfur. Since July 1, 2012, other states in the Northeast market began requiring heating oil sold in their state to contain no more than 15 PPM sulfur. Currently, all of the Northeastern states and Washington DC have adopted sulfur controls on heating oil.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

Most of the Northeastern states will now require heating oil with 15 PPM or less sulfur by July 1, 2018 (except for Pennsylvania and Maryland - where less than 500 ~~ppm~~PPM sulfur is required). All of the heating oil the Company currently produces meets these specifications. The mandate and other requirements do not currently have a material impact on the Company’s financial position, results of operations or cash flows.

The EPA issued the final Tier 3 Gasoline standards on March 3, 2014 under the CAA. This final rule establishes more stringent vehicle emission standards and further reduces the sulfur content of gasoline starting in January 2017. The new standard is set at 10 PPM sulfur in gasoline on an annual average basis starting January 1, 2017, with a credit trading program to provide compliance flexibility. The EPA responded to industry comments on the proposed rule and maintained the per gallon sulfur cap on gasoline at the existing 80 PPM cap. The refineries are complying with these new requirements as planned, either directly or using flexibility provided by sulfur credits generated or purchased in advance as an economic optimization. The standards set by the new rule are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

The ~~EPA published the final 2014-2016 standards under~~Company is required to comply with the Renewable ~~Fuels~~Fuel Standard (“RFS”) ~~late~~implemented by the EPA, which sets annual quotas for the quantity of renewable fuels (such as ethanol) that must be blended into motor fuels consumed in ~~2015 and issued final 2017 RFS standards in November 2016.~~the United States. In July ~~2017,~~2018, the EPA issued proposed ~~2018~~amendments to the RFS program regulations that would establish annual percentage standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and renewable fuels that ~~while~~would apply to all gasoline and diesel produced in the ~~Company is still reviewing, appear to slightly reduce renewable~~U.S. or imported in the year 2019. In addition, the separate proposal includes a proposed biomass-based diesel applicable volume ~~standards from final 2017 levels. It is not clear that renewable fuel producers will be able to produce the volumes of these fuels required~~ for ~~blending in accordance with the 2017 standards. The final 2017 cellulosic standard is at approximately 135% of the 2016 standard.~~2020. It is likely that ~~cellulosic~~ RIN production will continue to be lower than needed forcing obligated parties, such as the Company, to purchase cellulosic ~~“waiver credits” to comply in 2017 (the~~ waiver credit option by regulation is only available for the cellulosic standard). The advanced and total RIN requirements were raised (by 7% and 3%, respectively) above the original proposed level in May 2016. Production of advancedcredits or purchase excess RINs ~~has been below what is needed for compliance in 2016. Obligated parties, such as the Company, will likely be relying~~from suppliers on the nesting feature of the biodiesel RIN to comply with the advanced standard in 2017. While the Company believes that total RIN production will be adequate for 2016 needs, the new 2017 standard will put obligated parties up

~~PBF HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

against the E10 blendwall leaving little flexibility. Compliance in 2017 will likely rely on obligated parties drawing down the supply of excess RINs collectively known as the “RIN bank” and could tighten the RIN market potentially raising RIN prices further. The Company is supporting a proposal to change the point of obligation under the RFS program to the “blender” of renewable fuels, of which the new presidential administration may be supportive. Depending on how the new administration addresses this proposal and any future changes to the RFS 2 program, there could be a material impact on the Company’s cost of compliance with RFS 2.open market.

In addition, on December 1, 2015 the EPA finalized revisions to an existing air regulation concerning Maximum Achievable Control Technologies (“MACT”) for Petroleum Refineries. The regulation requires additional continuous monitoring systems for eligible process safety valves relieving to atmosphere, minimum flare gas heat (Btu) content, and delayed coke drum vent controls to be installed by January 30, 2019. In addition, a program for ambient fence line monitoring for benzene ~~will need~~was implemented prior to ~~be implemented by~~the deadline of January 30, 2018. The Company is ~~currently evaluating~~in the ~~final standards to evaluate~~process of implementing the ~~impact~~requirements of this regulation. The regulation ~~and at this time~~ does not ~~anticipate it will~~ have a material impact on the Company’s financial position, results of operations or cash flows.

The EPA published a Final Rule to the Clean Water Act (“CWA”) Section 316(b) in August 2014 regarding cooling water intake structures, which includes requirements for petroleum refineries. The purpose of this rule is to prevent fish from being trapped against cooling water intake screens (impingement) and to prevent fish from being drawn through cooling water systems (entrainment). Facilities will be required to implement Best Technology Available (“BTA”) as soon as possible, but state agencies have the discretion to establish implementation time lines. The Company continues to evaluate the impact of this regulation, and at this time does not anticipate it having a material impact on the Company’s financial position, results of operations or cash flows.

As a result of the Torrance Acquisition, the Company is subject to greenhouse gas emission control regulations in the state of California pursuant to ~~Assembly Bill 32 (“AB32”).~~AB32. AB32 imposes a statewide cap on greenhouse gas emissions, including emissions from transportation fuels, with the aim of returning the state to 1990 emission levels by 2020. AB32 is implemented through two market mechanisms including the Low Carbon Fuel Standard (“LCFS”) and Cap and Trade, which was extended for an additional ten years to 2030 in July 2017. The Company is responsible for the AB32 obligations related to the Torrance refinery beginning on July 1, 2016 and must purchase emission credits to comply with these obligations. Additionally, in September 2016, the state of California enacted Senate Bill 32 (“SB32”) which further reduces greenhouse gas emissions targets to 40 percent below 1990 levels by 2030.

However, subsequent to the acquisition, the Company is recovering the majority of these costs from its customers, and as such does not expect this obligation to materially impact the Company’s financial position, results of operations, or cash flows. To the degree there are unfavorable changes to AB32 or SB32 regulations or the Company is unable to recover such compliance costs from customers, these regulations could have a material adverse effect on our financial position, results of operations and cash flows.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

The Company is subject to obligations to purchase RINs. On February 15, 2017, the Company received a notification that EPA records indicated that PBF Holding used potentially invalid RINs that were in fact verified under the 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. The Company has asserted the affirmative defense and if accepted by the 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 the EPA will not accept the Company’s defense and may assess penalties in these matters but any such amount is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

As of January 1, 2011, the Company is required to comply with the EPA’s Control of Hazardous Air Pollutants From Mobile Sources, or MSAT2, regulations on gasoline that impose reductions in the benzene content of its produced gasoline. The Company purchases benzene credits to meet these requirements. The Company’s planned capital projects will reduce the amount of benzene credits that it needs to purchase. In addition, the renewable fuel standards mandate the blending of prescribed percentages of renewable fuels (e.g., ethanol and biofuels) into the Company’s produced gasoline and diesel. These new requirements, other requirements of the CAA and other presently existing or future environmental regulations may cause the Company to make substantial capital expenditures as well as the purchase of credits at significant cost, to enable its refineries to produce products that meet applicable requirements.

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 the Company’s sites are subject to these laws and the Company 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 the Company’s current normal operations, it has 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.

The Company is also currently subject to certain other existing environmental claims and proceedings. The Company believes that there is only a remote possibility that future costs related to any of these other known contingent liability exposures would have a material impact on its financial position, results of operations or cash flows.

~~PBF HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

PBF LLC Limited Liability Company Agreement

The holders of limited liability company interests in PBF LLC, including PBF Energy, generally have to include for purposes of calculating their U.S. federal, state and local income taxes their share of any taxable income of PBF LLC, regardless of whether such holders receive cash distributions from PBF LLC. PBF Energy ultimately may not receive cash distributions from PBF LLC equal to its share of such taxable income or even equal to the actual tax due with respect to that income. For example, PBF LLC is required to include in taxable income PBF LLC’s allocable share of PBFX’s taxable income and gains (such share to be determined pursuant to the partnership agreement of PBFX), regardless of the amount of cash distributions received by PBF LLC from PBFX, and such taxable income and gains will flow-through to PBF Energy to the extent of its allocable share of the taxable income of PBF LLC. As a result, at certain times, the amount of cash otherwise ultimately available to PBF Energy on account of its indirect interest in PBFX may not be sufficient for PBF Energy to pay the amount of taxes it will owe on account of its indirect interests in PBFX.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Tax Receivable Agreement

PBF Energy (the Company’s indirect parent) entered into a ~~tax receivable agreement~~Tax Receivable Agreement with the PBF LLC Series A and PBF LLC Series B Unit holders (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’s Class A common stock and had PBF Energy not entered into the Tax Receivable Agreement. The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless: (i) PBF Energy exercises its right to terminate the Tax Receivable Agreement, (ii) PBF Energy breaches any of its material obligations under the Tax Receivable Agreement or (iii) certain changes of control occur, in which case all obligations under the Tax Receivable Agreement will generally be accelerated and due as calculated under certain assumptions.

The payment obligations under the Tax Receivable Agreement are obligations of PBF Energy and not of PBF LLC or ~~the Company.~~PBF Holding. 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 ~~96.6%~~99.0% interest in PBF LLC as of ~~September~~June 30, ~~2017 (96.5%~~2018 (96.7% as of December 31, ~~2016)~~2017). 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 a result of the reduction of the corporate federal tax rate to 21% as part of the Tax Cuts and Jobs Act, PBF Energy’s liability associated with the Tax Receivable Agreement was reduced.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

~~10.~~9. EMPLOYEE BENEFIT PLANS

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


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
Pension Benefits	2017			2016			2017			2016			2018			2017			2018			2017
Components of net periodic benefit cost:
Service cost	$	10,142		$	10,064		$	30,429		$	24,743		$	11,836		$	10,144		$	23,672		$	20,287
Interest cost	1,084			772			3,252			2,323			1,449			1,084			2,896			2,168
Expected return on plan assets	(1,441		)	(1,234		)	(4,325		)	(3,447		)	(2,136		)	(1,442		)	(4,270		)	(2,884		)
Amortization of prior service cost	13			13			39			39			22			13			43			26
Amortization of actuarial loss (gain)	113			328			339			716
Amortization of actuarial loss													72			113			143			226
Net periodic benefit cost	$	9,911		$	9,943		$	29,734		$	24,374		$	11,243		$	9,912		$	22,484		$	19,823


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
Post-Retirement Medical Plan	2017		2016		2017		2016		2018		2017		2018		2017
Components of net periodic benefit cost:
Service cost	$	316	$	304	$	948	$	743	$	287	$	316	$	574	$	632
Interest cost	172		131		516		398		155		172		310		344
Amortization of prior service cost	162		161		484		379		161		161		323		322
Amortization of actuarial loss (gain)	—		—		—		—
Net periodic benefit cost	$	650	$	596	$	1,948	$	1,520	$	603	$	649	$	1,207	$	1,298

The Company adopted ASU 2017-07 as described in “Note 1 - Description of the Business and Basis of Presentation” effective January 1, 2018. The new guidance requires the bifurcation of net periodic benefit cost. The service cost component is presented within Income from operations, while the other components are reported separately outside of operations. This guidance was applied retrospectively in the Condensed Consolidated Statements of Operations. For the three and six months ended June 30, 2018, the Company recorded income of $277 and $555, respectively, related to the non-service cost components of net periodic benefit cost in Other income (expense). For the three and six months ended June 30, 2017, the Company recorded expense of $101 and $202, respectively, related to the non-service cost components of net periodic benefit cost in Other income (expense).

~~11.~~10. 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 ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017.

We have elected to offset the fair value amounts recognized for multiple derivative contracts executed with the same counterparty; however, fair value amounts by hierarchy level are presented on a gross basis in the tables below. We have posted cash margin with various counterparties to support hedging and trading activities. The cash margin posted is required by counterparties as collateral deposits and cannot be offset against the fair value of open contracts except in the event of default. We have no derivative contracts that are subject to master netting arrangements that are reflected gross on the balance sheet.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)


	As of September 30, 2017													As of June 30 2018
	Fair Value Hierarchy						Total Gross Fair Value			Effect of Counter-party Netting		Net Carrying Value on Balance Sheet		Fair Value Hierarchy						Total Gross Fair Value		Effect of Counter-party Netting		Net Carrying Value on Balance Sheet
	Level 1		Level 2		Level 3				Level 1						Level 2		Level 3
Assets:
Money market funds	$	14,458	$	—	$	—	$	14,458		N/A		$	14,458	$	13,173	$	—	$	—	$	13,173	N/A		$	13,173
Commodity contracts	18,257		4,248		—		22,505			(22,505	)	—		65,389		5,999		—		71,388		(71,388	)	—
Liabilities:
Commodity contracts	11,671		15,850		—		27,521			(22,505	)	5,016		75,477		37,397		—		112,874		(71,388	)	41,486
Catalyst lease obligations	—		46,981		—		46,981			—		46,981		—		45,430		—		45,430		—		45,430
Derivatives included with inventory intermediation agreement obligations	—		20,601		—		20,601			—		20,601		—		10,259		—		10,259		—		10,259


	As of December 31, 2016												As of December 31, 2017
	Fair Value Hierarchy						Total Gross Fair Value		Effect of Counter-party Netting		Net Carrying Value on Balance Sheet		Fair Value Hierarchy						Total Gross Fair Value		Effect of Counter-party Netting		Net Carrying Value on Balance Sheet
	Level 1		Level 2		Level 3								Level 1		Level 2		Level 3
Assets:
Money market funds	$	342,837	$	—	$	—	$	342,837	N/A		$	342,837	$	4,730	$	—	$	—	$	4,730	N/A		$	4,730
Commodity contracts	948		35		—		983		(983	)	—		10,031		357		—		10,388		(10,388	)	—
Derivatives included with inventory intermediation agreement obligations	—		6,058		—		6,058		—		6,058
Liabilities:
Commodity contracts	859		3,548		84		4,491		(983	)	3,508		51,673		33,035		—		84,708		(10,388	)	74,320
Catalyst lease obligations	—		45,969		—		45,969		—		45,969		—		59,048		—		59,048		—		59,048
Derivatives included with inventory intermediation agreement obligations													—		7,721		—		7,721		—		7,721

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 commodity contracts categorized in Level 3 of the fair value hierarchy consist of commodity price swap contracts that relate to forecasted purchases of crude oil for which quoted forward market prices are not readily available due to market illiquidity. The forward prices used to value these swaps were derived using broker quotes, prices from other third party sources and other available market based data.

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.

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 ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016, $9,642~~2017, $9,464 and ~~$9,440,~~$9,593, respectively, were included within Deferred charges and other assets, net for these non-qualified pension plan assets.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

The table below summarizes the changes in fair value measurements of commodity contracts categorized in Level 3 of the fair value hierarchy:


	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016			2017			2016			2018		2017		2018		2017
Balance at beginning of period	$	—	$	493		$	(84	)	$	3,543		$	—	$	—	$	—	$	(84	)
Purchases	—		—			—			—			—		—		—		—
Settlements	—		(90		)	45			(1,093		)	—		—		—		45
Unrealized gain (loss) included in earnings	—		(21		)	39			(2,068		)
Unrealized gain included in earnings												—		—		—		39
Transfers into Level 3	—		—			—			—			—		—		—		—
Transfers out of Level 3	—		—			—			—			—		—		—		—
Balance at end of period	$	—	$	382		$	—		$	382		$	—	$	—	$	—	$	—

There were no transfers between levels during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 or ~~2016.~~2017.

Fair value of debt

The table below summarizes the fair value and carrying value of debt as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016.~~2017.


	September 30, 2017				December 31, 2016				June 30, 2018						December 31, 2017
	Carrying value		Fair value		Carrying value		Fair value		Carrying value			Fair value			Carrying value			Fair value
Senior secured notes due 2020 (a)	$	—	$	—	$	670,867	$	696,098
Senior notes due 2023 (a) (d)	500,000		514,575		500,000		498,801
Senior notes due 2025 (a)	725,000		740,982		—		—
Revolving Loan (b)	350,000		350,000		350,000		350,000
2025 Senior Notes (a)									$	725,000		$	763,255		$	725,000		$	763,945
2023 Senior Notes (a)									500,000			521,660			500,000			522,101
Revolving Credit Agreement (b)									350,000			350,000			350,000			350,000
PBF Rail Term Loan (b)	30,041		30,041		35,000		35,000		24,982			24,982			28,366			28,366
Catalyst leases (c)	46,981		46,981		45,969		45,969		45,430			45,430			59,048			59,048
	1,652,022		1,682,579		1,601,836		1,625,868		1,645,412			1,705,327			1,662,414			1,723,460
Less - Current debt (c)									(1,298		)	(1,298		)	(10,987		)	(10,987		)
Less - Unamortized deferred financing costs	26,821		n/a		25,277		n/a		(33,653		)	n/a			(25,178		)	n/a
Long-term debt	$	1,625,201	$	1,682,579	$	1,576,559	$	1,625,868	$	1,610,461		$	1,704,029		$	1,626,249		$	1,712,473

(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% senior ~~secured~~ notes due 2023 and the 7.25% senior ~~notes.~~notes due 2025 (collectively, the “Senior Notes”).

(b) The estimated fair value approximates carrying value, categorized as a Level 2 measurement, as these borrowings bear interest based upon short-term floating market interest rates.

(c) Catalyst leases are valued using a market approach based upon commodity prices for similar instruments quoted in active markets and are categorized as a Level 2 measurement. The Company has elected the fair value option for accounting for its catalyst lease repurchase obligations as the Company’s liability is directly impacted by the change in fair value of the underlying catalyst.

~~(d) As discussed~~ During 2017, Delaware City Refining entered into two platinum bridge leases which were settled as of June 30, 2018 and the Company entered into a new platinum bridge lease, which will expire in ~~“Note 5 - Debt”,~~the first quarter of 2019. The total outstanding balance related to these ~~notes became unsecured following~~bridge leases as of June 30, 2018 and December 31, 2017 was $1,298 and $10,987, respectively, and is included in Current debt on the ~~Collateral Fall-Away Event on May 30, 2017.~~Company’s Condensed Consolidated balance sheet.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

~~12.~~

11. DERIVATIVES

The Company uses derivative instruments to mitigate certain exposures to commodity price risk. The Company entered into ~~the A&R~~Inventory Intermediation Agreements that contain purchase obligations for certain volumes of intermediates and refined products. The purchase obligations related to 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 intermediates and refined products. The level of activity for these derivatives is based on the level of operating inventories.

As of ~~September~~June 30, ~~2017,~~2018, there were ~~3,306,154~~2,868,426 barrels of intermediates and refined products ~~(2,942,348~~(3,000,142 barrels at December 31, ~~2016)~~2017) 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 ~~September~~June 30, ~~2017,~~2018, there were ~~37,496,000~~22,752,000 barrels of crude oil and ~~8,163,000~~5,293,000 barrels of refined products ~~(5,950,000~~(22,348,000 and ~~2,831,000,~~1,989,000, respectively, as of December 31, ~~2016)~~2017), outstanding under short and long term commodity derivative contracts not designated as hedges representing the notional value of the contracts.

The following tables provide information about the fair values of these derivative instruments as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 and the line items in the condensed consolidated balance sheet in which the fair values are reflected.


Description	Balance Sheet Location	Fair Value Asset/(Liability)			Balance Sheet Location	Fair Value Asset/(Liability)
Derivatives designated as hedging instruments:
September 30, 2017:
June 30, 2018:
Derivatives included with the inventory intermediation agreement obligations	Accrued expenses	$	(20,601	)	Accrued expenses	$	(10,259	)
December 31, 2016:
December 31, 2017:
Derivatives included with the inventory intermediation agreement obligations	Accrued expenses	$	6,058		Accrued expenses	$	(7,721	)

Derivatives not designated as hedging instruments:
September 30, 2017:
June 30, 2018:
Commodity contracts	Accrued expenses	$	(5,016	)	Accrued expenses	$	(41,486	)
December 31, 2016:
December 31, 2017:
Commodity contracts	Accrued expenses	$	3,508		Accrued expenses	$	(74,320	)

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

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			Location of Gain or (Loss) Recognized in Income on Derivatives	Gain or (Loss) Recognized in Income on Derivatives
Derivatives designated as hedging instruments:
For the three months ended September 30, 2017:
For the three months ended June 30, 2018:
Derivatives included with the inventory intermediation agreement obligations	Cost of products and other	$	(29,766	)	Cost of products and other	$	6,287
For the three months ended September 30, 2016:
For the three months ended June 30, 2017:
Derivatives included with the inventory intermediation agreement obligations	Cost of products and other	$	(3,145	)	Cost of products and other	$	(20,017	)
For the nine months ended September 30, 2017:
For the six months ended June 30, 2018:
Derivatives included with the inventory intermediation agreement obligations	Cost of products and other	$	(26,659	)	Cost of products and other	$	(2,538	)
For the nine months ended September 30, 2016:
For the six months ended June 30, 2017:
Derivatives included with the inventory intermediation agreement obligations	Cost of products and other	$	(29,317	)	Cost of products and other	$	3,107

Derivatives not designated as hedging instruments:
For the three months ended September 30, 2017:
For the three months ended June 30, 2018:
Commodity contracts	Cost of products and other	$	(17,291	)	Cost of products and other	$	(33,079	)
For the three months ended September 30, 2016:
For the three months ended June 30, 2017:
Commodity contracts	Cost of products and other	$	(15,559	)	Cost of products and other	$	14,293
For the nine months ended September 30, 2017:
For the six months ended June 30, 2018:
Commodity contracts	Cost of products and other	$	(2,606	)	Cost of products and other	$	(46,360	)
For the nine months ended September 30, 2016:
For the six months ended June 30, 2017:
Commodity contracts	Cost of products and other	$	(54,646	)	Cost of products and other	$	14,684

Hedged items designated in fair value hedges:
For the three months ended September 30, 2017:
For the three months ended June 30, 2018:
Intermediate and refined product inventory	Cost of products and other	$	29,766		Cost of products and other	$	(6,287	)
For the three months ended September 30, 2016:
For the three months ended June 30, 2017:
Intermediate and refined product inventory	Cost of products and other	$	3,145		Cost of products and other	$	20,017
For the nine months ended September 30, 2017:
For the six months ended June 30, 2018:
Intermediate and refined product inventory	Cost of products and other	$	26,659		Cost of products and other	$	2,538
For the nine months ended September 30, 2016:
For the six months ended June 30, 2017:
Intermediate and refined product inventory	Cost of products and other	$	29,317		Cost of products and other	$	(3,107	)

The Company had no ineffectiveness related to the ~~Company’s~~ fair value hedges for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 or ~~2016.~~2017.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

~~13.~~12. SUBSEQUENT EVENTS

Dividend Declared

On ~~November~~August 2, ~~2017,~~2018, PBF Energy, PBF Holding’s indirect parent, announced a dividend of $0.30 per share on its outstanding Class A common stock. The dividend is payable on ~~November 29, 2017~~August 30, 2018 to PBF Energy Class A common stockholders of record at the close of business on ~~November 13, 2017.~~August 15, 2018.

Development Assets Acquisition

Pursuant to contribution agreements entered into on July 16, 2018, PBF Holding contributed certain of its subsidiaries (the “Development Assets Acquisition”) to PBF LLC. PBFX Op Co, PBFX’s wholly owned subsidiary, in turn acquired the subsidiary assets from PBF LLC that included the Toledo Rail Products Facility, an unloading and loading rail facility; the Chalmette Truck Rack, a truck loading rack facility; the Chalmette Rosin Yard, a rail yard facility; the Paulsboro Lube Oil Terminal, a lubes oil terminal facility; and the Delaware Ethanol Storage Facility, an ethanol storage facility (collectively, the “Development Assets”). The Development Assets Acquisition closed on July 31, 2018 for total consideration of $31,586 consisting of 1,494,134 common units of PBFX issued to PBF LLC.

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

~~14.~~13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

PBF Services Company, Delaware City Refining Company LLC, PBF Power Marketing LLC, Paulsboro Refining Company LLC, Toledo Refining Company LLC, Chalmette Refining, L.L.C., PBF Energy Western Region LLC, Torrance Refining Company LLC, Torrance Logistics Company LLC, PBF International Inc. and PBF Investments LLC are 100% owned subsidiaries of PBF Holding and serve as guarantors of the obligations under the ~~senior notes.~~Senior Notes. These guarantees are full and unconditional and joint and several. For purposes of the following footnote, PBF Holding is referred to as “Issuer”. The indentures dated November 24, 2015 and May 30, 2017, among PBF Holding, PBF Finance, the guarantors party thereto and Wilmington Trust, National Association, governs subsidiaries designated as “Guarantor Subsidiaries”. PBF ~~International Inc., PBF~~ Energy Limited, PBF Transportation Company LLC, PBF Rail Logistics Company LLC, Chalmette Logistics Company LLC, Paulsboro Terminaling Company LLC, MOEM Pipeline LLC, Collins Pipeline Company, T&M Terminal Company, TVP Holding Company LLC (“TVP Holding”), Torrance Basin Pipeline Company LLC and Torrance Pipeline Company LLC are consolidated subsidiaries of the Company that are not guarantors of the ~~senior notes.~~Senior Notes. Additionally, our 50% equity investment in Torrance Valley Pipeline Company, held by TVP Holding is included in our Non-Guarantor financial position and results of operations and cash flows as TVP Holding is not a guarantor of the ~~senior notes.~~Senior Notes.

The ~~senior notes~~Senior Notes were co-issued by PBF Finance. For purposes of the following footnote, PBF Finance is referred to as “Co-Issuer.” The Co-Issuer has no independent assets or operations.

The following supplemental combining and condensed consolidating financial information reflects the Issuer’s separate accounts, the combined accounts of the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries, the combining and consolidating adjustments and eliminations and the Issuer’s consolidated accounts for the dates and periods indicated. For purposes of the following combining and consolidating information, the Issuer’s investment in its subsidiaries and the Guarantor subsidiaries’ investments in their subsidiaries are accounted for under the equity method of accounting.

~~PBF HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

~~14. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING~~

~~CONDENSED CONSOLIDATING BALANCE SHEET~~

~~(UNAUDITED)~~

September 30, 2017
Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Combining and Consolidating Adjustments Total
ASSETS
Current assets:
Cash and cash equivalents $ 200,136
$ 9,124
$ 32,485
$ —
$ 241,745
Accounts receivable 718,960
9,781
46,166
—
774,907
Accounts receivable - affiliate 1,392
17,946
600
—
19,938
Affiliate notes receivable —
11,600
—
—
11,600
Inventories 2,064,678
—
246,014
—
2,310,692
Prepaid expense and other current assets 23,245
21,194
—
—
44,439
Due from related parties 27,591,736
22,923,564
6,144,950
(56,660,250 ) —
Total current assets 30,600,147
22,993,209
6,470,215
(56,660,250 ) 3,403,321

Property, plant and equipment, net 23,884
2,543,193
238,072
—
2,805,149
Investment in subsidiaries —
429,035
—
(429,035 ) —
Investment in equity method investee —
—
172,752
—
172,752
Deferred charges and other assets, net 27,934
773,447
34
—
801,415
Total assets $ 30,651,965
$ 26,738,884
$ 6,881,073
$ (57,089,285 ) $ 7,182,637

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 310,158
$ 112,773
$ 18,552
$ —
$ 441,483
Accounts payable - affiliate 34,815
1,327
(97 ) —
36,045
Accrued expenses 1,467,974
125,490
216,107
—
1,809,571
Deferred revenue 3,214
74
8
—
3,296
Due to related parties 23,949,841
26,558,885
6,151,524
(56,660,250 ) —
Notes payable —
6,831
—
—
6,831
Total current liabilities 25,766,002
26,805,380
6,386,094
(56,660,250 ) 2,297,226

Long-term debt 1,548,591
46,938
29,672
—
1,625,201
Deferred tax liabilities —
—
46,340
—
46,340
Other long-term liabilities 27,906
181,293
4,145
—
213,344
Investment in subsidiaries 308,940
—
—
(308,940 ) —
Total liabilities 27,651,439
27,033,611
6,466,251
(56,969,190 ) 4,182,111

Commitments and contingencies (Note 9)

Equity:
Member’s equity 2,352,772
1,723,480
357,332
(2,080,812 ) 2,352,772
Retained earnings / (accumulated deficit) 659,891
(2,022,858 ) 57,490
1,965,368
659,891
Accumulated other comprehensive loss (25,024 ) (8,236 ) —
8,236
(25,024 )
Total PBF Holding Company LLC equity 2,987,639
(307,614 ) 414,822
(107,208 ) 2,987,639
Noncontrolling interest 12,887
12,887
—
(12,887 ) 12,887
Total equity 3,000,526
(294,727 ) 414,822
(120,095 ) 3,000,526
Total liabilities and equity $ 30,651,965
$ 26,738,884
$ 6,881,073
$ (57,089,285 ) $ 7,182,637

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

~~14.~~13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING BALANCE ~~SHEET~~SHEETS

(UNAUDITED)


	December 31, 2016														June 30, 2018
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	530,085		$	56,717		$	41,366	$	(1,463	)	$	626,705		$	400,634		$	16,243		$	25,840	$	—		$	442,717
Accounts receivable	599,147			7,999			8,735		—			615,881			992,378			9,071			30,125		—			1,031,574
Accounts receivable - affiliate	2,432			4,504			695		—			7,631			2,727			3,292			726		—			6,745
Inventories	1,680,058			—			183,502		—			1,863,560			2,353,720			—			186,557		—			2,540,277
Prepaid expense and other current assets	27,443			12,933			160		—			40,536
Prepaid and other current assets															18,953			30,848			1,483		—			51,284
Due from related parties	24,141,120			21,883,569			4,692,799		(50,717,488		)	—			31,378,354			24,147,941			8,296,673		(63,822,968		)	—
Total current assets	26,980,285			21,965,722			4,927,257		(50,718,951		)	3,154,313			35,146,766			24,207,395			8,541,404		(63,822,968		)	4,072,597

Property, plant and equipment, net	33,772			2,452,877			242,050		—			2,728,699			19,084			2,597,504			233,648		—			2,850,236
Investment in subsidiaries	705,034			440,377			—		(1,145,411		)	—			—			390,529			—		(390,529		)	—
Investment in equity method investee	—			—			179,882		—			179,882			—			—			169,038		—			169,038
Deferred charges and other assets, net	12,317			491,673			13		—			504,003			24,250			837,111			34		—			861,395
Total assets	$	27,731,408		$	25,350,649		$	5,349,202	$	(51,864,362	)	$	6,566,897		$	35,190,100		$	28,032,539		$	8,944,124	$	(64,213,497	)	$	7,953,266

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	360,260		$	157,277		$	14,291	$	(1,463	)	$	530,365		$	508,073		$	109,942		$	16,878	$	—		$	634,893
Accounts payable - affiliate	37,077			786			—		—			37,863			30,042			1,431			—		—			31,473
Accrued expenses	1,094,581			201,935			166,213		—			1,462,729			1,477,262			109,095			232,377		—			1,818,734
Current debt															—			1,298			—		—			1,298
Deferred revenue	10,901			1,438			1		—			12,340			3,630			20			7		—			3,657
Due to related parties	22,027,065			24,031,520			4,658,903		(50,717,488		)	—			26,699,566			28,862,202			8,261,200		(63,822,968		)	—
Note payable															—			3,200			—		—			3,200
Total current liabilities	23,529,884			24,392,956			4,839,408		(50,718,951		)	2,043,297			28,718,573			29,087,188			8,510,462		(63,822,968		)	2,493,255


Long-term debt	1,496,085			45,908			34,566		—			1,576,559			1,541,649			44,132			24,680		—			1,610,461
Affiliate notes payable	86,298			—			—		—			86,298
Deferred tax liabilities	—			—			45,699		—			45,699			—			—			28,502		—			28,502
Other long-term liabilities	30,208			192,204			3,699		—			226,111			30,979			196,643			4,145		—			231,767
Investment in subsidiaries															1,309,618			—			—		(1,309,618		)	—
Total liabilities	25,142,475			24,631,068			4,923,372		(50,718,951		)	3,977,964			31,600,819			29,327,963			8,567,789		(65,132,586		)	4,363,985

Commitments and contingencies (Note 9)
Commitments and contingencies (Note 8)

Equity:
PBF Holding Company LLC equity
Member’s equity	2,155,863			1,714,997			374,067		(2,089,064		)	2,155,863			2,391,321			1,734,642			332,689		(2,067,331		)	2,391,321
Retained earnings / (accumulated deficit)	446,519			(999,693		)	51,763		947,930			446,519			1,213,798			(3,031,222		)	43,646		2,987,576			1,213,798
Accumulated other comprehensive loss	(25,962		)	(8,236		)	—		8,236			(25,962		)	(26,654		)	(9,660		)	—		9,660			(26,654		)
Total PBF Holding Company LLC equity	2,576,420			707,068			425,830		(1,132,898		)	2,576,420			3,578,465			(1,306,240		)	376,335		929,905			3,578,465
Noncontrolling interest	12,513			12,513			—		(12,513		)	12,513			10,816			10,816			—		(10,816		)	10,816
Total equity	2,588,933			719,581			425,830		(1,145,411		)	2,588,933			3,589,281			(1,295,424		)	376,335		919,089			3,589,281
Total liabilities and equity	$	27,731,408		$	25,350,649		$	5,349,202	$	(51,864,362	)	$	6,566,897		$	35,190,100		$	28,032,539		$	8,944,124	$	(64,213,497	)	$	7,953,266

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

~~14.~~13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING ~~STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)~~BALANCE SHEETS

(UNAUDITED)

Three Months Ended September 30, 2017
Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Combining and Consolidating Adjustments Total

Revenues $ 5,410,245
$ 223,582
$ 536,386
$ (694,397 ) $ 5,475,816

Cost and expenses:
Cost of products and other 4,483,164
85,031
538,011
(694,397 ) 4,411,809
Operating expenses (excluding depreciation and amortization expense as reflected below) 289
380,951
8,351
—
389,591
Depreciation and amortization expense —
68,419
1,919
—
70,338
Cost of sales 4,483,453
534,401
548,281
(694,397 ) 4,871,738
General and administrative expenses (excluding depreciation and amortization expense as reflected below) 49,880
4,959
(146 ) —
54,693
Depreciation and amortization expense 2,572
—
—
—
2,572
Equity income in investee —
—
(3,799 ) —
(3,799 )
Loss on sale of assets —
28
—
—
28
Total cost and expenses 4,535,905
539,388
544,336
(694,397 ) 4,925,232

Income (loss) from operations 874,340
(315,806 ) (7,950 ) —
550,584

Other income (expenses):
Equity in earnings (loss) of subsidiaries (319,568 ) 2,467
—
317,101
—
Change in fair value of catalyst leases —
473
—
—
473
Debt extinguishment costs —
—
—
—
—
Interest expense, net (28,692 ) (305 ) (272 ) —
(29,269 )
Income (loss) before income taxes 526,080
(313,171 ) (8,222 ) 317,101
521,788
Income tax benefit —
—
(4,292 ) —
(4,292 )
Net income (loss) 526,080
(313,171 ) (3,930 ) 317,101
526,080
Less: net loss attributable to noncontrolling interests (6 ) (6 ) —
6
(6 )
Net income (loss) attributable to PBF Holding Company LLC $ 526,086
$ (313,165 ) $ (3,930 ) $ 317,095
$ 526,086

Comprehensive income (loss) attributable to PBF Holding Company LLC $ 526,373
$ (313,165 ) $ (3,930 ) $ 317,095
$ 526,373



	December 31, 2017
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	486,568		$	13,456		$	26,136	$	—		$	526,160
Accounts receivable	903,298			7,605			40,226		—			951,129
Accounts receivable - affiliate	2,321			5,300			731		—			8,352
Inventories	1,982,315			—			231,482		—			2,213,797
Prepaid and other current assets	20,523			27,100			1,900		—			49,523
Due from related parties	28,632,914			23,302,660			6,820,693		(58,756,267		)	—
Total current assets	32,027,939			23,356,121			7,121,168		(58,756,267		)	3,748,961

Property, plant and equipment, net	21,785			2,547,229			236,376		—			2,805,390
Investment in subsidiaries	—			413,136			—		(413,136		)	—
Investment in equity method investee	—			—			171,903		—			171,903
Deferred charges and other assets, net	30,141			749,749			34		—			779,924
Total assets	$	32,079,865		$	27,066,235		$	7,529,481	$	(59,169,403	)	$	7,506,178

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	413,829		$	137,149		$	21,954	$	—		$	572,932
Accounts payable - affiliate	39,952			865			—		—			40,817
Accrued expenses	1,409,212			122,722			268,925		—			1,800,859
Current debt	—			10,987			—		—			10,987
Deferred revenue	6,005			1,472			18		—			7,495
Note payable	—			5,621			—		—			5,621
Due to related parties	24,813,299			27,166,679			6,776,289		(58,756,267		)	—
Total current liabilities	26,682,297			27,445,495			7,067,186		(58,756,267		)	2,438,711

Long-term debt	1,550,206			48,024			28,019		—			1,626,249
Deferred tax liabilities	—			—			33,155		—			33,155
Other long-term liabilities	30,612			189,204			4,145		—			223,961
Investment in subsidiaries	632,648			—			—		(632,648		)	—
Total liabilities	28,895,763			27,682,723			7,132,505		(59,388,915		)	4,322,076

Commitments and contingencies (Note 8)

Equity:
PBF Holding Company LLC equity
Member’s equity	2,359,791			1,731,268			343,940		(2,075,208		)	2,359,791
Retained earnings / (accumulated deficit)	840,431			(2,348,904		)	53,036		2,295,868			840,431
Accumulated other comprehensive loss	(26,928		)	(9,660		)	—		9,660			(26,928		)
Total PBF Holding Company LLC equity	3,173,294			(627,296		)	396,976		230,320			3,173,294
Noncontrolling interest	10,808			10,808			—		(10,808		)	10,808
Total equity	3,184,102			(616,488		)	396,976		219,512			3,184,102
Total liabilities and equity	$	32,079,865		$	27,066,235		$	7,529,481	$	(59,169,403	)	$	7,506,178

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

~~14.~~13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING ~~STATEMENT~~STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)


	Three Months Ended September 30, 2016															Three Months Ended June 30, 2018
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total

Revenues	$	4,488,925		$	441,554		$	345,215		$	(767,081	)	$	4,508,613		$	7,379,226		$	342,061		$	903,603		$	(1,184,420	)	$	7,440,470

Cost and expenses:
Cost of products and other	3,914,018			428,587			328,734			(767,081		)	3,904,258			6,628,670			157,113			910,790			(1,184,420		)	6,512,153
Operating expenses (excluding depreciation and amortization expense as reflected below)	25			385,761			18,259			—			404,045			11			394,759			7,981			—			402,751
Depreciation and amortization expense	—			47,471			3,865			—			51,336			—			80,906			1,923			—			82,829
Cost of sales	3,914,043			861,819			350,858			(767,081		)	4,359,639			6,628,681			632,778			920,694			(1,184,420		)	6,997,733
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	34,820			4,312			780			—			39,912			43,894			6,995			867			—			51,756
Depreciation and amortization expense	1,342			—			—			—			1,342			2,563			—			—			—			2,563
Equity income in investee	—			—			(1,621		)	—			(1,621		)	—			—			(4,363		)	—			(4,363		)
Loss on sale of assets	2,418			73			5,668			—			8,159			—			594			—			—			594
Total cost and expenses	3,952,623			866,204			355,685			(767,081		)	4,407,431			6,675,138			640,367			917,198			(1,184,420		)	7,048,283

Income (loss) from operations	536,302			(424,650		)	(10,470		)	—			101,182			704,088			(298,306		)	(13,595		)	—			392,187

Other income (expenses):
Equity in earnings (loss) of subsidiaries	(438,249		)	—			—			438,249			—
Other income (expense):
Equity in earnings of subsidiaries																(304,211		)	(9,888		)	—			314,099			—
Change in fair value of catalyst leases	—			77			—			—			77			—			4,140			—			—			4,140
Interest expense, net	(32,982		)	(447		)	(467		)	—			(33,896		)	(32,248		)	(527		)	(277		)	—			(33,052		)
Other non-service components of net periodic benefit cost																(94		)	370			1			—			277
Income (loss) before income taxes	65,071			(425,020		)	(10,937		)	438,249			67,363			367,535			(304,211		)	(13,871		)	314,099			363,552
Income tax expense	—			—			2,291			—			2,291
Income tax benefit																—			—			(3,983		)	—			(3,983		)
Net income (loss)	65,071			(425,020		)	(13,228		)	438,249			65,072			367,535			(304,211		)	(9,888		)	314,099			367,535
Less: net income attributable to noncontrolling interests	45			45			—			(45		)	45			76			76			—			(76		)	76
Net income (loss) attributable to PBF Holding Company LLC	$	65,026		$	(425,065	)	$	(13,228	)	$	438,294		$	65,027		$	367,459		$	(304,287	)	$	(9,888	)	$	314,175		$	367,459

Comprehensive income (loss) attributable to PBF Holding Company LLC	$	65,452		$	(425,065	)	$	(13,228	)	$	438,294		$	65,453		$	367,479		$	(304,287	)	$	(9,888	)	$	314,175		$	367,479

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)



	Three Months Ended June 30, 2017
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total

Revenues	$	4,928,464		$	134,566		$	512,262		$	(562,041	)	$	5,013,251

Cost and expenses:
Cost of products and other	4,703,574			32,288			489,012			(562,041		)	4,662,833
Operating expenses (excluding depreciation and amortization expense as reflected below)	(326		)	389,804			9,007			—			398,485
Depreciation and amortization expense	—			55,076			1,897			—			56,973
Cost of sales	4,703,248			477,168			499,916			(562,041		)	5,118,291
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	28,827			6,286			(209		)	—			34,904
Depreciation and amortization expense	6,020			—			—			—			6,020
Equity income in investee	—			—			(3,820		)	—			(3,820		)
Loss on sale of assets	—			29			—			—			29
Total cost and expenses	4,738,095			483,483			495,887			(562,041		)	5,155,424

Income (loss) from operations	190,369			(348,917		)	16,375			—			(142,173		)

Other income (expense):
Equity in (loss) earnings of subsidiaries	(338,171		)	1,442			—			336,729			—
Change in fair value of catalyst leases	—			1,104			—			—			1,104
Debt extinguishment costs	(25,451		)	—			—			—			(25,451		)
Interest expense, net	(32,108		)	(480		)	(269		)	—			(32,857		)
Other non-service components of net periodic benefit cost	(16		)	(85		)	—			—			(101		)
Income (loss) before income taxes	(205,377		)	(346,936		)	16,106			336,729			(199,478		)
Income tax expense	—			—			5,898			—			5,898
Net income (loss)	(205,377		)	(346,936		)	10,208			336,729			(205,376		)
Less: net income attributable to noncontrolling interests	267			267			—			(267		)	267
Net income (loss) attributable to PBF Holding Company LLC	$	(205,644	)	$	(347,203	)	$	10,208		$	336,996		$	(205,643	)

Comprehensive income (loss) attributable to PBF Holding Company LLC	$	(205,314	)	$	(347,203	)	$	10,208		$	336,996		$	(205,313	)

13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)



	Six Months Ended June 30, 2018
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total

Revenues	$	13,113,901		$	1,053,783		$	1,589,206		$	(2,516,819	)	$	13,240,071

Cost and expenses:
Cost of products and other	11,866,752			761,445			1,590,381			(2,516,819		)	11,701,759
Operating expenses (excluding depreciation and amortization expense as reflected below)	31			799,783			14,384			—			814,198
Depreciation and amortization expense	—			155,764			3,843			—			159,607
Cost of sales	11,866,783			1,716,992			1,608,608			(2,516,819		)	12,675,564
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	94,863			12,984			2,179			—			110,026
Depreciation and amortization expense	5,277			—			—			—			5,277
Equity income in investee	—			—			(8,385		)	—			(8,385		)
Loss on sale of assets	—			673			—			—			673
Total cost and expenses	11,966,923			1,730,649			1,602,402			(2,516,819		)	12,783,155

Income (loss) from operations	1,146,978			(676,866		)	(13,196		)	—			456,916

Other income (expense):
Equity in loss of subsidiaries	(681,957		)	(9,049		)	—			691,006			—
Change in fair value of catalyst leases	—			4,153			—			—			4,153
Interest expense, net	(64,894		)	(932		)	(540		)	—			(66,366		)
Other non-service components of net periodic benefit cost	(185		)	737			3			—			555
Income (loss) before income taxes	399,942			(681,957		)	(13,733		)	691,006			395,258
Income tax benefit	—			—			(4,684		)	—			(4,684		)
Net income (loss)	399,942			(681,957		)	(9,049		)	691,006			399,942
Less: net income attributable to noncontrolling interests	8			8			—			(8		)	8
Net income (loss) attributable to PBF Holding Company LLC	$	399,934		$	(681,965	)	$	(9,049	)	$	691,014		$	399,934

Comprehensive income (loss) attributable to PBF Holding Company LLC	$	400,208		$	(681,965	)	$	(9,049	)	$	691,014		$	400,208

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)



	Six Months Ended June 30, 2017
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total

Revenues	$	9,654,243		$	760,335		$	1,042,167		$	(1,693,296	)	$	9,763,449

Cost and expenses:
Cost of products and other	9,064,194			530,062			1,013,627			(1,693,296		)	8,914,587
Operating expenses (excluding depreciation and amortization expense as reflected below)	(331		)	819,249			16,335			—			835,253
Depreciation and amortization expense	—			107,123			3,778			—			110,901
Cost of sales	9,063,863			1,456,434			1,033,740			(1,693,296		)	9,860,741
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	62,506			13,451			(590		)	—			75,367
Depreciation and amortization expense	7,782			—			—			—			7,782
Equity income in investee	—			—			(7,419		)	—			(7,419		)
Loss on sale of assets	—			912			—			—			912
Total cost and expenses	9,134,151			1,470,797			1,025,731			(1,693,296		)	9,937,383

Income (loss) from operations	520,092			(710,462		)	16,436			—			(173,934		)

Other income (expense):
Equity in (loss) earnings of subsidiaries	(703,300		)	3,335			—			699,965			—
Change in fair value of catalyst leases	—			(1,484		)	—			—			(1,484		)
Debt extinguishment costs	(25,451		)	—			—			—			(25,451		)
Interest expense, net	(62,226		)	(838		)	(449		)	—			(63,513		)
Other non-service components of net periodic benefit cost	(32		)	(170		)	—			—			(202		)
Income (loss) before income taxes	(270,917		)	(709,619		)	15,987			699,965			(264,584		)
Income tax expense	—			—			6,332			—			6,332
Net income (loss)	(270,917		)	(709,619		)	9,655			699,965			(270,916		)
Less: net income attributable to noncontrolling interests	380			380			—			(380		)	380
Net income (loss) attributable to PBF Holding Company LLC	$	(271,297	)	$	(709,999	)	$	9,655		$	700,345		$	(271,296	)

Comprehensive income (loss) attributable to PBF Holding Company LLC	$	(270,646	)	$	(709,999	)	$	9,655		$	700,345		$	(270,645	)

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

~~14.~~13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING ~~STATEMENT~~STATEMENTS OF ~~OPERATIONS AND COMPREHENSIVE INCOME (LOSS)~~CASH FLOWS

(UNAUDITED)

Nine Months Ended September 30, 2017
Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Combining and Consolidating Adjustments Total

Revenues $ 15,064,488
$ 983,917
$ 1,578,553
$ (2,387,693 ) $ 15,239,265

Cost and expenses:
Cost of products and other 13,547,358
615,093
1,551,638
(2,387,693 ) 13,326,396
Operating expenses (excluding depreciation and amortization expense as reflected below) (42 ) 1,200,370
24,686
—
1,225,014
Depreciation and amortization expense —
175,543
5,695
—
181,238
Cost of sales 13,547,316
1,991,006
1,582,019
(2,387,693 ) 14,732,648
General and administrative expenses (excluding depreciation and amortization expense as reflected below) 112,418
18,410
(736 ) —
130,092
Depreciation and amortization expense 10,355
—
—
—
10,355
Equity income in investee —
—
(11,218 ) —
(11,218 )
Loss on sale of assets —
940
—
—
940
Total cost and expenses 13,670,089
2,010,356
1,570,065
(2,387,693 ) 14,862,817

Income (loss) from operations 1,394,399
(1,026,439 ) 8,488
—
376,448

Other income (expenses):
Equity in earnings (loss) of subsidiaries (1,022,866 ) 5,802
—
1,017,064
—
Change in fair value of catalyst leases
(1,011 ) —
—
(1,011 )
Debt extinguishment costs (25,451 ) —
—
—
(25,451 )
Interest expense, net (90,918 ) (1,143 ) (721 ) —
(92,782 )
Income (loss) before income taxes 255,164
(1,022,791 ) 7,767
1,017,064
257,204
Income tax expense —
—
2,040
—
2,040
Net income (loss) 255,164
(1,022,791 ) 5,727
1,017,064
255,164
Less: net income attributable to noncontrolling interests 374
374
—
(374 ) 374
Net income (loss) attributable to PBF Holding Company LLC $ 254,790
$ (1,023,165 ) $ 5,727
$ 1,017,438
$ 254,790

Comprehensive income (loss) attributable to PBF Holding Company LLC $ 255,728
$ (1,023,165 ) $ 5,727
$ 1,017,438
$ 255,728



	Six Months Ended June 30, 2018
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total
Cash flows from operating activities:
Net income (loss)	$	399,942		$	(681,957	)	$	(9,049	)	$	691,006		$	399,942
Adjustments to reconcile net income (loss) to net cash (used in) provided by operations:
Depreciation and amortization	8,417			155,805			3,888			—			168,110
Stock-based compensation	—			9,520			—			—			9,520
Change in fair value of catalyst leases	—			(4,153		)	—			—			(4,153		)
Deferred income taxes	—			—			(4,653		)	—			(4,653		)
Non-cash change in inventory repurchase obligations	2,538			—			—			—			2,538
Non-cash lower of cost or market inventory adjustment	(245,655		)	—			—			—			(245,655		)
Pension and other post-retirement benefit costs	3,482			20,209			—			—			23,691
Income from equity method investee	—			—			(8,385		)	—			(8,385		)
Distributions from equity method investee	—			—			8,385			—			8,385
Loss on sale of assets	—			673			—			—			673
Equity in earnings of subsidiaries	681,957			9,049			—			(691,006		)	—
Changes in operating assets and liabilities:
Accounts receivable	(89,080		)	(1,466		)	10,101			—			(80,445		)
Due to/from affiliates	(866,193		)	849,520			8,936			—			(7,737		)
Inventories	(125,750		)	—			44,925			—			(80,825		)
Prepaid and other current assets	1,572			(3,750		)	417			—			(1,761		)
Accounts payable	94,244			(24,915		)	(5,076		)	—			64,253
Accrued expenses	61,061			(23,450		)	(36,701		)	—			910
Deferred revenue	(2,375		)	(1,452		)	(11		)	—			(3,838		)
Other assets and liabilities	8,585			(7,018		)	(11,592		)	—			(10,025		)
Net cash (used in) provided by operations	(67,255		)	296,615			1,185			—			230,545

Cash flows from investing activities:
Expenditures for property, plant and equipment	(2,575		)	(106,633		)	(961		)	—			(110,169		)
Expenditures for deferred turnaround costs	—			(179,194		)	—			—			(179,194		)
Expenditures for other assets	—			(12,357		)	—			—			(12,357		)
Equity method investment - return of capital	—			—			2,865			—			2,865
Due to/from affiliates	(13		)	—			—			13			—
Net cash (used in) provided by investing activities	(2,588		)	(298,184		)	1,904			13			(298,855		)

Cash flows from financing activities:
Contributions from PBF LLC	22,000			—			—			—			22,000
Distribution to members	(26,567		)	—			—			—			(26,567		)
Repayments of PBF Rail Term Loan	—			—			(3,385		)	—			(3,385		)
Repayment of note payable	—			(2,421		)	—			—			(2,421		)
Catalyst lease settlements	—			(9,466		)	—			—			(9,466		)
Due to/from affiliates	—			13			—			(13		)	—
Proceeds from insurance premium financing	1,168			16,230			—			—			17,398
Deferred financing cost and other	(12,692		)	—			—			—			(12,692		)
Net cash (used in) provided by financing activities	(16,091		)	4,356			(3,385		)	(13		)	(15,133		)

Net (decrease) increase in cash and cash equivalents	(85,934		)	2,787			(296		)	—			(83,443		)
Cash and cash equivalents, beginning of period	486,568			13,456			26,136			—			526,160
Cash and cash equivalents, end of period	$	400,634		$	16,243		$	25,840		$	—		$	442,717

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~UNAUDITED,~~ IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

~~14.~~13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING ~~STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)~~

~~(UNAUDITED)~~

Nine Months Ended September 30, 2016
Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Combining and Consolidating Adjustments Total

Revenues $ 11,119,301
$ 586,336
$ 1,005,656
$ (1,546,722 ) $ 11,164,571

Cost and expenses:
Cost of products and other 9,653,945
532,040
995,726
(1,546,722 ) 9,634,989
Operating expenses (excluding depreciation and amortization expense as reflected below) (375 ) 948,403
24,195
—
972,223
Depreciation and amortization expense —
143,994
7,479
—
151,473
Cost of sales 9,653,570
1,624,437
1,027,400
(1,546,722 ) 10,758,685
General and administrative expenses (excluding depreciation and amortization expense as reflected below) 92,126
20,372
(1,226 ) —
111,272
Depreciation and amortization expense 4,417
—
—
—
4,417
Equity income in investee —
—
(1,621 ) —
(1,621 )
Loss on sale of assets 2,418
97
8,866
—
11,381
Total cost and expenses 9,752,531
1,644,906
1,033,419
(1,546,722 ) 10,884,134

Income (loss) from operations 1,366,770
(1,058,570 ) (27,763 ) —
280,437

Other income (expenses):
Equity in earnings (loss) of subsidiaries (1,123,054 ) —
—
1,123,054
—
Change in fair value of catalyst leases —
(4,556 ) —
—
(4,556 )
Interest expense, net (95,568 ) (1,289 ) (1,589 ) —
(98,446 )
Income (loss) before income taxes 148,148
(1,064,415 ) (29,352 ) 1,123,054
177,435
Income tax expense —
—
29,287
—
29,287
Net income (loss) 148,148
(1,064,415 ) (58,639 ) 1,123,054
148,148
Less: net income attributable to noncontrolling interests 438
438
—
(438 ) 438
Net income (loss) attributable to PBF Holding Company LLC $ 147,710
$ (1,064,853 ) $ (58,639 ) $ 1,123,492
$ 147,710

Comprehensive income (loss) attributable to PBF Holding Company LLC $ 149,173
$ (1,064,853 ) $ (58,639 ) $ 1,123,492
$ 149,173

~~PBF HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

~~14. CONDENSED CONSOLIDATING FINANCIAL~~ STATEMENTS OF ~~PBF HOLDING~~

~~CONDENSED CONSOLIDATING STATEMENT OF~~ CASH ~~FLOW~~

~~(UNAUDITED)~~

Nine Months Ended September 30, 2017
Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Combining and Consolidating Adjustments Total
Cash flows from operating activities:
Net income (loss) $ 255,164
$ (1,022,791 ) $ 5,727
$ 1,017,064
$ 255,164
Adjustments to reconcile net income (loss) to net cash (used in) provided by operations:
Depreciation and amortization 15,746
175,859
5,760
—
197,365
Stock-based compensation —
13,549
—
—
13,549
Change in fair value of catalyst leases —
1,011
—
—
1,011
Deferred income taxes —
—
641
—
641
Non-cash lower of cost or market inventory adjustment (97,943 ) —
—
—
(97,943 )
Non-cash change in inventory repurchase obligations (26,659 ) —
—
—
(26,659 )
Debt extinguishment costs 25,451
—
—
—
25,451
Pension and other post-retirement benefit costs 4,956
26,726
—
—
31,682
(Income) from equity method investee
—
(11,218 ) —
(11,218 )
Distributions from equity method investee —
—
16,897
—
16,897
Loss on sale of assets —
940
—
—
940
Equity in earnings (loss) of subsidiaries 1,022,866
(5,802 ) —
(1,017,064 ) —
Changes in operating assets and liabilities:
Accounts receivable (119,813 ) (1,782 ) (37,431 ) —
(159,026 )
Due to/from affiliates (1,494,632 ) 1,451,846
40,468
—
(2,318 )
Inventories (286,677 ) —
(62,512 ) —
(349,189 )
Prepaid expense and other current assets 4,200
(8,467 ) 160
—
(4,107 )
Accounts payable (50,102 ) (58,691 ) 4,261
1,463
(103,069 )
Accrued expenses 365,132
(13,352 ) 49,894
—
401,674
Deferred revenue (7,687 ) (1,364 ) 7
—
(9,044 )
Other assets and liabilities (14,472 ) (26,189 ) (16,726 ) —
(57,387 )
Net cash (used in) provided by operations (404,470 ) 531,493
(4,072 ) 1,463
124,414

Cash flows from investing activities:
Expenditures for property, plant and equipment (847 ) (210,076 ) (301 ) —
(211,224 )
Expenditures for deferred turnaround costs —
(341,598 ) —
—
(341,598 )
Expenditures for other assets —
(31,096 ) —
—
(31,096 )
Equity method investment - return of capital —
—
451
—
451
Due to/from affiliates (3,684 ) —
—
3,684
—
Net cash (used in) provided by investing activities (4,531 ) (582,770 ) 150
3,684
(583,467 )

Cash flows from financing activities:
Contributions from PBF LLC 97,000
—
—
—
97,000
Distribution to members (39,315 ) —
—
—
(39,315 )
Proceeds from 2025 7.25% Senior Notes 725,000
—
—
—
725,000
Cash paid to extinguish 2020 8.25% Senior Secured Notes (690,209 ) —
—
—
(690,209 )
Repayments of PBF Rail Term Loan —
—
(4,959 ) —
(4,959 )
Proceeds from revolver borrowings 490,000
—
—
—
490,000
Repayments of revolver borrowings (490,000 ) —
—
—
(490,000 )
Due to/from affiliates —
3,684
—
(3,684 ) —
Deferred financing costs and other (13,424 ) —
—
—
(13,424 )
Net cash provided by (used in) financing activities 79,052
3,684
(4,959 ) (3,684 ) 74,093

Net decrease in cash and cash equivalents (329,949 ) (47,593 ) (8,881 ) 1,463
(384,960 )
Cash and cash equivalents, beginning of period 530,085
56,717
41,366
(1,463 ) 626,705
Cash and cash equivalents, end of period $ 200,136
$ 9,124
$ 32,485
$ —
$ 241,745

~~PBF HOLDING COMPANY LLC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED, IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)~~

~~14. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING~~

~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW~~FLOWS

(UNAUDITED)


	Nine Months Ended September 30, 2016															Six Months Ended June 30, 2017
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total
Cash flows from operating activities:
Net income (loss)	$	148,148		$	(1,064,415	)	$	(58,639	)	$	1,123,054		$	148,148		$	(270,917	)	$	(709,619	)	$	9,655		$	699,965		$	(270,916	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operations:
Depreciation and amortization	10,828			144,011			7,726			—			162,565			11,597			107,429			3,823			—			122,849
Stock-based compensation	—			12,658			—			—			12,658			—			10,134			—			—			10,134
Change in fair value of catalyst leases	—			4,556			—			—			4,556			—			1,484			—			—			1,484
Deferred income taxes	—			—			27,813			—			27,813			—			—			5,123			—			5,123
Non-cash change in inventory repurchase obligations																(3,107		)	—			—			—			(3,107		)
Non-cash lower of cost or market inventory adjustment	(320,833		)	—			—			—			(320,833		)	167,134			—			—			—			167,134
Non-cash change in inventory repurchase obligations	29,317			—			—			—			29,317
Debt extinguishment costs																25,451			—			—			—			25,451
Pension and other post-retirement benefit costs	5,249			20,645			—			—			25,894			3,304			17,817			—			—			21,121
Equity income in investee	—			—			(1,621		)	—			(1,621		)
Income from equity method investee																—			—			(7,419		)	—			(7,419		)
Distributions from equity method investee																—			—			12,254			—			12,254
Loss on sale of assets	2,418			97			8,866			—			11,381			—			912			—			—			912
Equity in earnings of subsidiaries	1,123,054			—			—			(1,123,054		)	—
Equity in earnings (loss) of subsidiaries																703,300			(3,335		)	—			(699,965		)	—
Changes in operating assets and liabilities:
Accounts receivable	(205,816		)	3,695			7,223			—			(194,898		)	21,334			3,501			(18,714		)	—			6,121
Due to/from affiliates	(1,624,741		)	1,588,690			44,245			—			8,194			(1,111,279		)	1,029,667			68,107			—			(13,505		)
Inventories	56,792			—			(2,740		)	—			54,052			(141,219		)	—			(37,519		)	—			(178,738		)
Prepaid expense and other current assets	(6,330		)	(11,768		)	(2,105		)	—			(20,203		)
Prepaid and other current assets																(3,314		)	(14,716		)	(8		)	—			(18,038		)
Accounts payable	37,074			16,943			(5,126		)	1,406			50,297			(120,026		)	(24,140		)	(2,116		)	1,463			(144,819		)
Accrued expenses	661,974			(353,030		)	(897		)	—			308,047			178,794			(42,903		)	(29,818		)	—			106,073
Deferred revenue	6,559			—			1,470			—			8,029			(6,002		)	(1,418		)	12			—			(7,408		)
Other assets and liabilities	(7,573		)	(14,210		)	(97		)	—			(21,880		)	(15,218		)	(13,881		)	(11,426		)	—			(40,525		)
Net cash (used in) provided by operations	(83,880		)	347,872			26,118			1,406			291,516			(560,168		)	360,932			(8,046		)	1,463			(205,819		)

Cash flows from investing activities:
Acquisition of Torrance refinery and related logistic assets	(971,932		)	—			—			—			(971,932		)
Expenditures for property, plant and equipment	(16,244		)	(172,174		)	675			—			(187,743		)	(287		)	(179,019		)	(269		)	—			(179,575		)
Expenditures for deferred turnaround costs	—			(138,936		)	—			—			(138,936		)	—			(214,375		)	—			—			(214,375		)
Expenditures for other assets	—			(27,735		)	—			—			(27,735		)	—			(23,747		)	—			—			(23,747		)
Investment in subsidiaries	12,800			—			—			(12,800		)	—
Chalmette Acquisition working capital settlement	—			(2,659		)	—			—			(2,659		)
Proceeds from sale of assets	—			—			13,030			—			13,030
Net cash provided by (used in) investing activities	(975,376		)	(341,504		)	13,705			(12,800		)	(1,315,975		)
Net cash used in investing activities																(287		)	(417,141		)	(269		)	—			(417,697		)

Cash flows from financing activities:
Proceeds from catalyst lease	—			7,927			—			—			7,927
Distributions to Parent	—			—			(12,800		)	12,800			—
Contributions from PBF LLC related to TVPC	175,000			—			—			—			175,000
Contributions from PBF LLC																97,000			—			—			—			97,000
Distributions to members	(92,503		)	—			—			—			(92,503		)	(5,252		)	—			—			—			(5,252		)
Proceeds from affiliate notes payable	635			—			—			—			635
Repayment of affiliate notes payable	(517		)	—			—			—			(517		)
Repayment of Rail Facility revolver borrowings	—			—			(11,457		)	—			(11,457		)
Proceeds from 2025 Senior Notes																725,000			—			—			—			725,000
Cash paid to extinguish 2020 Senior Secured Notes																(690,209		)	—			—			—			(690,209		)
Repayments of PBF Rail Term Loan																—			—			(3,295		)	—			(3,295		)
Proceeds from revolver borrowings	550,000			—			—			—			550,000			290,000			—			—			—			290,000
Repayments of revolver borrowings																(290,000		)	—			—			—			(290,000		)
Due to/from affiliates																(5,453		)	5,453			—			—			—
Deferred financing costs and other																(12,414		)	—			—			—			(12,414		)
Net cash provided by (used in) financing activities	632,615			7,927			(24,257		)	12,800			629,085			108,672			5,453			(3,295		)	—			110,830

Net (decrease) increase in cash and cash equivalents	(426,641		)	14,295			15,566			1,406			(395,374		)	(451,783		)	(50,756		)	(11,610		)	1,463			(512,686		)
Cash and cash equivalents, beginning of period	882,820			6,236			28,968			(3,275		)	914,749			530,085			56,717			41,366			(1,463		)	626,705
Cash and cash equivalents, end of period	$	456,179		$	20,531		$	44,534		$	(1,869	)	$	519,375		$	78,302		$	5,961		$	29,756		$	—		$	114,019

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 Holding Company LLC included in the Annual Report on Form 10-K for the year ended December 31, ~~2016~~2017 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.”

Unless the context indicates otherwise, the terms “we,” “us,” and “our” refer to PBF Holding and its consolidated subsidiaries.

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 ~~Canada,~~Mexico and are able to ship products to other international destinations. As of ~~September~~June 30, ~~2017,~~2018, we own and operate five domestic oil refineries and related assets with a combined processing capacity, known as throughput, of approximately 900,000 barrels per day (“bpd”), and a weighted-average Nelson Complexity Index of 12.2. Our five oil refineries are aggregated into one reportable segment.

Our five refineries are located in Delaware City, Delaware, Paulsboro, New Jersey, Toledo, Ohio, New Orleans, Louisiana and Torrance, California. Each ~~of these refineries~~refinery is briefly described in the table below:

Refinery

Region

Nelson Complexity

Throughput Capacity (in barrels per day)

PADD

Crude Processed (1)

Source (1)

Region

Nelson Complexity Index

Throughput Capacity (in barrels per day)

PADD

Crude Processed (1)

Source (1)

Delaware City

East Coast

11.3

190,000

medium and heavy sour crude

water, rail

East Coast

11.3

190,000

light sweet through heavy sour

water, rail

Paulsboro

East Coast

13.2

180,000

medium and heavy sour crude

water, rail

East Coast

13.2

180,000

light sweet through heavy sour

water

Toledo

Mid-Continent

9.2

170,000

light,

sweet crude

pipeline, truck, rail

Mid-Continent

9.2

170,000

light sweet

pipeline, truck, rail

Chalmette

Gulf Coast

12.7

189,000

light and heavy crude

water, pipeline

Gulf Coast

12.7

189,000

light sweet through heavy sour

water, pipeline

Torrance

West Coast

14.9

155,000

heavy and medium crude

pipeline, water, truck

West Coast

14.9

155,000

medium and heavy

pipeline, water, truck

________

⁽¹⁾ Reflects the typical crude and feedstocks and related sources utilized under normal operating conditions and prevailing market environments.

We are a wholly-owned subsidiary of PBF LLC and an indirect subsidiary of PBF Energy. PBF Finance is a wholly-owned subsidiary of PBF Holding. We are the parent company for PBF LLC’s refinery operating subsidiaries.

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.

PBF Holding Revolving Credit Facility

On May 2, 2018, we and certain of our 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 “2018 Revolving Credit Agreement"). Among other things, the 2018 Revolving Credit Agreement increases the maximum commitment available to us 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 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.

Senior Notes Offering

On May 30, 2017, we and PBF Finance issued $725.0 million in aggregate principal amount of 7.25% ~~Senior Notes~~senior notes due 2025 (the “2025 Senior Notes”). We used the net proceeds of $711.6 million to fund the cash tender offer (the “Tender Offer”) for any and all of our outstanding 8.25% senior secured notes due 2020 (the “2020 Senior Secured Notes”), to pay the related redemption price and accrued and unpaid interest for any 2020 Senior Secured Notes that remained outstanding after the completion of the Tender Offer, and for general corporate purposes. ~~As described in “Note 5 - Debt”, upon~~Upon the satisfaction and discharge of the 2020 Senior Secured Notes in connection with the closing of the Tender Offer and the redemption, the 7.00% senior notes due 2023 (the “2023 Senior ~~Notes~~Notes”) became unsecured and certain covenants were modified, as provided for in the indenture governing the 2023 Senior Notes and related documents.

Inventory Intermediation Agreements

On May 4, 2017 and September 8, 2017, we and our subsidiaries, DCR and PRC, entered into amendments to the inventory intermediation agreements (as amended in the ~~second and third quarters of 2017, the "A&R~~“Inventory Intermediation Agreements") with J. Aron & Company, a subsidiary of The Goldman Sachs Group, Inc. ~~“J.~~(“J. Aron”), pursuant to which certain terms 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) the ~~A&R~~Inventory Intermediation Agreement by and among J. Aron, us and PRC relating to the Paulsboro refinery extends the term to December 31, 2019, which term may be further extended by mutual consent of the parties to December 31, 2020 and (ii) the ~~A&R~~Inventory Intermediation Agreement by and among J. Aron, us and DCR relating to the Delaware City refinery extends the term to July 1, 2019, which term may be further extended by mutual consent of the parties to July 1, 2020.

~~Torrance Acquisition~~

On July 1, 2016, we acquired from ExxonMobil Oil Corporation (“ExxonMobil”) and its subsidiary, Mobil Pacific Pipeline Company (together, the “Torrance Sellers”), the Torrance refinery and related logistics assets (collectively, the “Torrance Acquisition”). The Torrance refinery is strategically positioned in Southern California with advantaged logistics connectivity that offers flexible raw material sourcing and product distribution opportunities primarily in the California, Las Vegas and Phoenix area markets.

In addition to refining assets, the Torrance Acquisition included a number of high-quality logistics assets consisting of a sophisticated network of crude and products pipelines, product distribution terminals and refinery crude and product storage facilities. The most significant of the logistics assets is a 189-mile crude gathering and transportation system which delivers San Joaquin Valley crude oil directly from the field to the refinery. Additionally, included in the transaction were several pipelines which provide access to sources of crude oil including the Ports of Long Beach and Los Angeles, as well as clean product outlets with a direct pipeline supplying jet fuel to the Los Angeles airport. The Torrance refinery also has crude and product storage facilities with approximately 8.6 million barrels of shell capacity.

The purchase price for the assets was approximately $521.4 million in cash after post-closing purchase price adjustments, plus final working capital of $450.6 million. The final purchase price and fair value allocation were completed as of June 30, 2017. During the measurement period, which ended in June 2017, adjustments were made to the Company’s preliminary fair value estimates related primarily to Property, plant and equipment and Other long-term liabilities reflecting the finalization of the Company’s assessment of the costs and duration of certain assumed pre-existing environmental obligations. The transaction was financed through a combination of cash on hand, including proceeds from certain PBF Energy equity offerings, and borrowings under our asset based revolving credit agreement (“Revolving Loan”).

~~PNGPC Contribution Agreement~~

On February 15, 2017, PBFX entered into a contribution agreement (the “PNGPC Contribution Agreement”) between PBFX and PBF LLC. Pursuant to the PNGPC Contribution Agreement, we contributed to PBF LLC, which, in turn, contributed to PBFX’s wholly owned subsidiary PBFX Operating Company LLC (“PBFX Op Co”) all of the issued and outstanding limited liability company interests of Paulsboro Natural Gas Pipeline Company LLC (“PNGPC”). PNGPC owns and operates an existing interstate natural gas pipeline that runs under the Delaware River and terminates at our Paulsboro refinery. In August 2017, PBFX Op Co completed the construction of a new pipeline which replaced the existing pipeline and commenced services. In consideration for the PNGPC limited liability company interests, PBFX delivered to PBF LLC (i) an $11.6 million intercompany promissory note in favor of Paulsboro Refining Company LLC, a wholly owned subsidiary of ours (the “Promissory Note”), (ii) an expansion rights and right of first refusal agreement in favor of PBF LLC with respect to the new pipeline and (iii)

~~an assignment and assumption agreement with respect to certain outstanding litigation involving PNGPC and the existing pipeline.~~

~~Chalmette Storage Tank Lease~~

On February 15, 2017, we and PBFX Op Co entered into a ten-year storage services agreement (the “Chalmette Storage Agreement”) and a twenty-year lease for the premises upon which a new tank at the Chalmette refinery (the “Chalmette Storage Tank”) will be located (the “Lease”). Additionally, we and PBFX entered into a project management agreement (the “Project Management Agreement”) pursuant to which PBFX, through PBFX Op Co, assumed construction of a crude oil storage tank at our Chalmette refinery, commencing upon the earlier of November 1, 2017 or the completion of construction of the Chalmette Storage Tank, which is currently expected to be completed in November 2017. The Lease can be extended by PBFX Op Co for two additional ten year terms. The Chalmette Storage Agreement can be extended by us for two additional five-year periods. Under the Chalmette Storage Agreement, PBFX will provide us with storage services in return for storage fees. The storage services require PBFX to accept, redeliver and store all products tendered by us in the tank and we will pay a monthly fee of $0.60 per barrel of shell capacity. The Lease can be extended by PBFX Op Co for two additional ten year periods.

~~TVPC Contribution Agreement~~

On August 31, 2016, PBFX entered into a contribution agreement (the “TVPC Contribution Agreement”) between PBFX and PBF LLC. Pursuant to the TVPC Contribution Agreement, PBF Holding distributed to PBF LLC, and PBFX acquired from PBF LLC, 50% of the issued and outstanding limited liability company interests of Torrance Valley Pipeline Company LLC (“TVPC”), whose assets consist of the 189-mile San Joaquin Valley Pipeline system, including the M55, M1 and M70 pipeline system, including 11 pipeline stations with storage capability and truck unloading capacity at two of the stations. Subsequent to the distribution of TVPC pursuant to the TVPC Contribution Agreement, PBF Holding deconsolidated TVPC and has recognized an equity investment in TVPC for its 50% noncontrolling interest.

Agreements with PBFX

PBFX is a fee-based, growth-oriented, publicly traded Delaware master limited partnership formed by our indirect parent company, PBF Energy, to own or lease, operate, develop and acquire crude oil, refined petroleum products and natural gas terminals, pipelines, storage facilities and similar logistics assets. PBFX engages in 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 certain of our refineries, as well as for ~~third party~~third-party customers.

~~On May 14, 2014, PBFX completed its initial public offering (the “PBFX Offering”). Beginning with the completion of the PBFX Offering, we~~We have entered into a series of agreements with PBFX, including contribution, commercial and operational agreements. ~~Each~~Refer to “Note 7 - Related Party Transactions” of our Notes to Condensed Consolidated Financial Statements, for descriptions of these agreements and their impact to our ~~operations~~operations. Transactions that have an impact on the comparability of our period to period financial performance and financial condition are listed below.

On February 15, 2017, PBFX entered into a contribution agreement (the “PNGPC Contribution Agreement”) between PBFX and PBF LLC, pursuant to which we contributed to PBF LLC, which, in turn, contributed to PBFX’s wholly-owned subsidiary PBFX Operating Company LLC (“PBFX Op Co”) all of the issued and outstanding limited liability company interests of Paulsboro Natural Gas Pipeline Company LLC (“PNGPC”). PNGPC owns and operates an interstate natural gas pipeline. In August 2017, PBFX completed construction of a new 24" pipeline to replace the existing pipeline and commenced services. In consideration for the PNGPC limited liability company interests, PBFX delivered to PBF LLC (i) an $11.6 million affiliate promissory note in favor of PRC, a wholly-owned subsidiary of ours (the “Promissory Note”), (ii) an expansion rights and right of first refusal agreement in favor of PBF LLC with respect to the new pipeline and (iii) an assignment and assumption agreement with respect to certain outstanding litigation involving PNGPC and the existing pipeline. Following the completion of the

Paulsboro Natural Gas Pipeline in the fourth quarter of 2017, we received full payment of the affiliate promissory note due from PBFX.

On February 15, 2017, we entered into a ten-year storage services agreement with PBFX Op Co (the “Chalmette Storage Services Agreement”) under which PBFX, through PBFX Op Co, began providing storage services to us commencing on November 1, 2017 upon the completion of the construction of a new crude tank with a shell capacity of 625,000 barrels at our Chalmette refinery (the “Chalmette Storage Tank”). PBFX Op Co and Chalmette Refining entered into a twenty-year lease for the premises upon which the tank is located (the “Lease”) and a project management agreement (the “Project Management Agreement”) pursuant to which Chalmette Refining managed the construction of the tank. The Lease can be extended by PBFX Op Co for two additional ten-year periods.

On April 16, 2018, PBFX completed the purchase of two refined product terminals located in Knoxville, Tennessee, which include product tanks, pipeline connections to the Colonial and Plantation pipeline systems and truck loading facilities with nine loading bays (the “Knoxville Terminals”) from Cummins Terminals, Inc. (the “Knoxville Terminals Purchase”). In connection with the Knoxville Terminals Purchase, we and PBFX entered into a terminal throughput and storage agreement (the “Knoxville Terminals Agreement”) wherein PBFX provides us terminaling and storage services at the Knoxville Terminals. The initial term of the Knoxville Terminals Agreement is five years with automatic one year renewals unless canceled by either party through written notice. Under the Knoxville Terminals Agreement, we have a minimum volume commitment for storage and a minimum revenue commitment for throughput. If we do not throughput or store the aggregate amounts equal to the minimum throughput revenue or available shell capacity as described in “Note 87 - Related Party Transactions” of our Notes to Condensed Consolidated Financial Statements), we will be required to pay a shortfall payment equal to the shortfall revenue or capacity.

On May 2, 2018, the Delaware City Rail Terminaling Services Agreement and the Delaware West Ladder Rack Terminaling Services Agreement between us and Delaware City Terminaling Company LLC were amended effective as of January 1, 2018 (collectively, the “Amended and Restated Rail Agreements”) with the service fees thereunder being adjusted, including the addition of an ancillary fee paid by us on an actual cost basis. In determining payments due under the Amended and Restated Rail Agreements, excess volumes throughput under the agreements shall apply against required payments in respect to the minimum throughput commitments on a quarterly basis and, to the extent not previously applied, on an annual basis against the minimum volume commitment (as defined in “Note 7 - Related Party Transactions” of our ~~condensed consolidated financial statements.~~Notes to Condensed Consolidated Financial Statements).

A summary of ~~revenue and expense~~ transactions with PBFX is as follows (in ~~millions)~~thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Revenues under affiliate agreements:
Services Agreement $ 1.6
$ 1.3
$ 4.9
$ 3.5
Omnibus Agreement 1.9
1.2
5.2
3.5
Total expenses under affiliate agreements 62.4
43.8
176.9
118.4

~~Amended and Restated Revolving Loan~~

The Third Amended and Restated Revolving Loan is available to be used for working capital and other general corporate purposes. As noted in “Note 2 - Acquisitions”, we took down an advance under our Revolving Loan to partially fund the Torrance Acquisition in 2016. The outstanding balance under our Revolving Loan was $350.0 million, $350.0 million and $550.0 million as of September 30, 2017, December 31, 2016 and September 30, 2016, respectively.

~~Rail Facility Revolving Credit Facility~~

Effective March 25, 2014, PBF Rail Logistics Company LLC (“PBF Rail”), an indirect wholly-owned subsidiary of ours, entered into a $250.0 million secured revolving credit agreement (the “Rail Facility”). The primary purpose of the Rail Facility was to fund the acquisition by PBF Rail of crude tank cars (the “Eligible Railcars”) before December 2015.

~~On December 22, 2016, the Rail Facility was terminated and replaced with the PBF Rail Term Loan (as described below).~~

~~PBF Rail Term Loan~~

On December 22, 2016, PBF Rail entered into a $35.0 million term loan (the “PBF Rail Term Loan”) with a bank previously party to the Rail Facility. The PBF Rail Term Loan amortizes monthly over its five year term and bears interest at the one month LIBOR plus the margin as defined in the credit agreement. As security for the PBF Rail Term Loan, PBF Rail pledged, among other things: (i) certain Eligible Railcars; (ii) the debt service reserve account; and (iii) our member interest in PBF Rail. Additionally, the PBF Rail Term Loan contains customary terms, events of default and covenants for a transaction of this nature. PBF Rail may at any time repay the PBF Rail Term Loan without penalty in the event that railcars collateralizing the loan are sold, scrapped or otherwise removed from the collateral pool.

~~The outstanding balance of the PBF Rail Term Loan was $30.0 million and $35.0 million as of September 30, 2017 and December 31, 2016, respectively.~~

~~Affiliate notes payable with PBF LLC and PBF Energy~~

Our long-term debt obligations may include outstanding affiliate notes payable with PBF LLC and PBF Energy. The affiliate notes have an interest rate of 2.5% and a five year term but may be prepaid in whole or in part at any time, at the option of PBF Holding, without penalty or premium. Additional borrowings may be made by PBF Holding under such affiliate notes payable from time to time. In the fourth quarter of 2016, the affiliate notes were extended to 2021. Additionally, in the fourth quarter of 2016, PBF LLC converted outstanding affiliate notes payable from PBF Holding of $379.9 million to a capital contribution. In the first quarter of 2017, PBF LLC converted the full amount of outstanding affiliate notes payable from PBF Holding of $86.3 million to a capital contribution. As of September 30, 2017, PBF Holding had no outstanding affiliate notes payable with PBF Energy and PBF LLC ($86.3 million outstanding as of December 31, 2016).



	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Reimbursements under affiliate agreements:
Services Agreement	$	1,674	$	1,661	$	3,348	$	3,279
Omnibus Agreement	1,737		1,630		3,437		3,284
Total expenses under affiliate agreements	63,785		58,355		124,649		114,557

Change in Presentation

As discussed in “Note 1 - Description of the Business and Basis of ~~Presentation,” during the third quarter~~Presentation” of our Notes to Condensed Consolidated Financial Statements, in 2017 we determined that we would revise the presentation of certain line items on our historical consolidated statements of operations to enhance our disclosure under the requirements of Rule 5-03 of Regulation S-X. The revised presentation is comprised of the inclusion of a subtotal within operating costs and expenses referred to as “Cost of sales” and the reclassification of total depreciation and amortization expense between such amounts attributable to cost of sales and other operating costs and expenses. The amount of depreciation and amortization expense that is presented separately within the “Cost of Sales” subtotal represents depreciation and amortization of refining and logistics assets that are integral to the refinery production process.

The historical comparative information has been revised to conform to the current presentation. This revised presentation does not have an effect on our historical consolidated income from operations or net income, nor does it have any impact on our consolidated balance sheets, statements of comprehensive income or statements of cash flows.

Results of Operations

The following tables reflect our financial and operating highlights for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 (amounts in thousands).:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017
Revenues	$	5,475,816		$	4,508,613		$	15,239,265		$	11,164,571		$	7,440,470		$	5,013,251		$	13,240,071		$	9,763,449
Cost and expenses:
Cost of products and other	4,411,809			3,904,258			13,326,396			9,634,989			6,512,153			4,662,833			11,701,759			8,914,587
Operating expenses (excluding depreciation and amortization expense as reflected below)	389,591			404,045			1,225,014			972,223			402,751			398,485			814,198			835,253
Depreciation and amortization expense	70,338			51,336			181,238			151,473			82,829			56,973			159,607			110,901
Cost of sales	4,871,738			4,359,639			14,732,648			10,758,685			6,997,733			5,118,291			12,675,564			9,860,741
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	54,693			39,912			130,092			111,272			51,756			34,904			110,026			75,367
Depreciation and amortization expense	2,572			1,342			10,355			4,417			2,563			6,020			5,277			7,782
Equity income in investee	(3,799		)	(1,621		)	(11,218		)	(1,621		)	(4,363		)	(3,820		)	(8,385		)	(7,419		)
Loss on sale of assets	28			8,159			940			11,381			594			29			673			912
Total cost and expenses	4,925,232			4,407,431			14,862,817			10,884,134			7,048,283			5,155,424			12,783,155			9,937,383

Income from operations	550,584			101,182			376,448			280,437
Income (loss) from operations													392,187			(142,173		)	456,916			(173,934		)

Other income (expenses):
Other income (expense):
Change in fair value of catalyst leases	473			77			(1,011		)	(4,556		)	4,140			1,104			4,153			(1,484		)
Debt extinguishment costs	—			—			(25,451		)	—			—			(25,451		)	—			(25,451		)
Interest expense, net	(29,269		)	(33,896		)	(92,782		)	(98,446		)	(33,052		)	(32,857		)	(66,366		)	(63,513		)
Income before income taxes	521,788			67,363			257,204			177,435
Other non-service components of net periodic benefit cost													277			(101		)	555			(202		)
Income (loss) before income taxes													363,552			(199,478		)	395,258			(264,584		)
Income tax (benefit) expense	(4,292		)	2,291			2,040			29,287			(3,983		)	5,898			(4,684		)	6,332
Net income	526,080			65,072			255,164			148,148
Less: net (loss) income attributable to noncontrolling interests	(6		)	45			374			438
Net income attributable to PBF Holding Company LLC	$	526,086		$	65,027		$	254,790		$	147,710
Net income (loss)													367,535			(205,376		)	399,942			(270,916		)
Less: net income attributable to noncontrolling interests													76			267			8			380
Net income (loss) attributable to PBF Holding Company LLC													$	367,459		$	(205,643	)	$	399,934		$	(271,296	)

Gross margin	$	604,078		$	148,973		$	506,617		$	405,886
Consolidated gross margin													$	442,737		$	(105,040	)	$	564,507		$	(97,292	)
Gross refining margin (1)	$	1,064,007		$	604,355		$	1,912,869		$	1,529,582		$	928,317		$	350,418		$	1,538,312		$	848,862


~~(1)~~	~~See Non-GAAP Financial Measures below.~~

(1) See Non-GAAP Financial Measures.

~~Operating Highlights~~


	Three Months Ended September 30,						Nine Months Ended September 30,
Operating Highlights													Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017
Key Operating Information
Production (bpd in thousands)	852.6			799.1			781.6			717.6			866.1			764.2			831.2			748.8
Crude oil and feedstocks throughput (bpd in thousands)	849.7			786.3			786.1			711.8			866.6			769.2			833.3			753.7
Total crude oil and feedstocks throughput (millions of barrels)	78.2			72.3			214.6			195.0			78.8			70.0			150.8			136.4
Gross margin per barrel of throughput	$	7.73		$	2.06		$	2.36		$	2.09
Consolidated gross margin per barrel of throughput													$	5.61		$	(1.49	)	$	3.75		$	(0.71	)
Gross refining margin, excluding special items, per barrel of throughput (1)	$	10.22		$	6.92		$	8.46		$	6.20		$	9.77		$	7.17		$	8.57		$	7.45
Refinery operating expenses, excluding depreciation, per barrel of throughput	$	4.98		$	5.59		$	5.71		$	4.98
Refinery operating expense, per barrel of throughput													$	5.11		$	5.69		$	5.40		$	6.12

Crude and feedstocks (% of total throughput) (2)
Heavy crude	33		%	34		%	34		%	23		%
Medium crude	30		%	32		%	30		%	38		%
Light crude	22		%	23		%	21		%	28		%
Heavy													38		%	30		%	37		%	35		%
Medium													28		%	31		%	31		%	30		%
Light													21		%	23		%	20		%	20		%
Other feedstocks and blends	15		%	11		%	15		%	11		%	13		%	16		%	12		%	15		%
Total throughput	100		%	100		%	100		%	100		%	100		%	100		%	100		%	100		%

Yield (% of total throughput)
Gasoline and gasoline blendstocks	50		%	51		%	50		%	49		%	48		%	50		%	49		%	51		%
Distillates and distillate blendstocks	29		%	31		%	29		%	31		%	32		%	30		%	32		%	30		%
Lubes	1		%	1		%	1		%	1		%	1		%	1		%	1		%	1		%
Chemicals	2		%	3		%	2		%	4		%	2		%	2		%	2		%	2		%
Other	18		%	14		%	17		%	15		%	17		%	16		%	16		%	16		%
Total yield	100		%	100		%	99		%	100		%	100		%	99		%	100		%	100		%


(1)	See Non-GAAP Financial ~~Measures below.~~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.

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


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017
	(dollars per barrel, except as noted)												(dollars per barrel, except as noted)
Dated Brent Crude	$	52.16		$	45.90		$	51.79		$	42.05		$	74.42		$	49.69		$	70.75		$	51.61
West Texas Intermediate (WTI) crude oil	$	48.18		$	44.88		$	49.32		$	41.41		$	68.02		$	48.11		$	65.52		$	49.89
Light Louisiana Sweet (LLS) crude oil	$	51.67		$	46.52		$	51.73		$	43.20		$	73.14		$	50.17		$	69.58		$	51.77
Alaska North Slope (ANS) crude oil	$	52.04		$	44.65		$	52.15		$	41.58		$	73.93		$	50.61		$	70.64		$	52.20
Crack Spreads
Dated Brent (NYH) 2-1-1	$	18.12		$	12.94		$	14.84		$	13.18		$	14.96		$	14.81		$	13.90		$	13.21
WTI (Chicago) 4-3-1	$	18.82		$	13.64		$	14.70		$	13.07		$	17.56		$	14.09		$	14.74		$	12.65
LLS (Gulf Coast) 2-1-1	$	16.69		$	11.51		$	13.75		$	10.35		$	13.52		$	12.56		$	13.19		$	12.30
ANS (West Coast) 4-3-1	$	20.66		$	15.61		$	18.78		$	17.22		$	18.70		$	19.16		$	17.59		$	17.85
Crude Oil Differentials
Dated Brent (foreign) less WTI	$	3.97		$	1.02		$	2.47		$	0.64		$	6.40		$	1.58		$	5.23		$	1.73
Dated Brent less Maya (heavy, sour)	$	8.75		$	6.87		$	6.77		$	7.57		$	12.40		$	8.00		$	10.78		$	7.34
Dated Brent less WTS (sour)	$	4.96		$	2.50		$	3.63		$	1.48		$	14.78		$	2.65		$	10.20		$	2.98
Dated Brent less ASCI (sour)	$	3.82		$	4.14		$	3.58		$	4.02		$	5.09		$	2.85		$	4.84		$	3.46
WTI less WCS (heavy, sour)	$	10.03		$	13.28		$	10.83		$	12.15		$	18.26		$	9.56		$	22.17		$	11.23
WTI less Bakken (light, sweet)	$	(0.69	)	$	1.41		$	0.18		$	1.13		$	0.39		$	0.30		$	0.70		$	0.61
WTI less Syncrude (light, sweet)	$	(1.95	)	$	(0.95	)	$	(1.86	)	$	(2.67	)	$	2.98		$	(1.35	)	$	1.69		$	(1.81	)
WTI less LLS (light, sweet)	$	(3.49	)	$	(1.65	)	$	(2.41	)	$	(1.79	)	$	(5.12	)	$	(2.06	)	$	(4.06	)	$	(1.88	)
WTI less ANS (light, sweet)	$	(3.86	)	$	0.23		$	(2.82	)	$	(0.17	)	$	(5.91	)	$	(2.50	)	$	(5.12	)	$	(2.31	)
Natural gas (dollars per MMBTU)	$	2.95		$	2.79		$	3.05		$	2.35		$	2.85		$	3.14		$	2.82		$	3.10

Three Months Ended ~~September~~June 30, ~~2017~~2018 Compared to the Three Months Ended ~~September~~June 30, ~~2016~~2017

Overview— Net income was ~~$526.1~~$367.5 million for the three months ended ~~September~~June 30, ~~2017~~2018 compared to ~~$65.1~~a loss of $205.4 million for the three months ended ~~September~~June 30, ~~2016.~~2017.

Our results for the three months ended ~~September~~June 30, ~~2017~~2018 were positively impacted by a non-cash special item consisting of a ~~non-cash~~ lower of cost or market (“LCM”) inventory adjustment of approximately ~~$265.1~~$158.0 million. Our results for the three months ended ~~September~~June 30, ~~2016~~2017 were ~~positively~~negatively impacted by an LCM inventory adjustment of approximately ~~$104.0~~$151.1 million and debt extinguishment costs related to the early retirement of our 2020 Senior Secured Notes of $25.5 million. 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 positively impacted by strong crack spreads, particularly in the Mid-Continent, favorable movements in crude differentials and higher overall throughput volumes ~~at the majority of~~and barrels sold across our refineries ~~and higher crack spreads realized~~as a result of all five refineries operating without significant turnarounds or major maintenance during the quarter. In particular, we benefited significantly from favorable results at ~~each of~~ our ~~refineries,~~Torrance refinery, which continues to experience operational improvements due to the capital investments made since our acquisition. Our results in the current period were negatively impacted by ~~the hurricane-related reduction in refining throughput in the Gulf Coast region~~higher general and ~~tightening product inventories, specifically distillates. Notably, we benefited from the improved operating performance of our Chalmette~~administrative costs and ~~Torrance refineries.~~increased depreciation and amortization expense.

Revenues— Revenues totaled ~~$5.5~~$7.4 billion for the three months ended ~~September~~June 30, ~~2017~~2018 compared to ~~$4.5~~$5.0 billion for the three months ended ~~September~~June 30, ~~2016,~~2017, an increase of approximately ~~$1.0~~$2.4 billion, or ~~21.5%~~48.4%. Revenues per barrel were ~~$63.75~~$80.35 and ~~$62.32~~$61.25 for the three months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively, an increase of ~~2.3%~~31.2% directly related to higher hydrocarbon commodity prices. For the three months ended ~~September~~June 30, 2018, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 359,900 bpd, 152,900 bpd, 188,500 bpd and 165,300 bpd, respectively. For the three months ended June 30, 2017, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately ~~343,700~~326,100 bpd, ~~160,600~~154,600 bpd, ~~200,400~~191,300 bpd and ~~145,000~~97,200 bpd, respectively. ~~For~~The throughput rates at our East Coast and West Coast refineries were higher in the

three months ended ~~September~~June 30, ~~2016,~~2018 compared to the same period in 2017. Throughput rates at our Mid-Continent and Gulf Coast refineries were in line with the same quarter of the prior year. The throughput rates at our East Coast refineries increased due to planned downtime at our Delaware City refinery during 2017. The throughput rates at our West Coast refinery increased due to planned downtime in 2017 related to its first significant turnaround under our ownership, which was completed early in the third quarter of 2017. For the three months ended June 30, 2018, the total ~~throughput rates~~barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately ~~315,900~~401,100 bpd, ~~165,300~~162,900 bpd, ~~165,600~~250,000 bpd and ~~139,500~~203,600 bpd, respectively. Our East Coast and Gulf Coast refineries’ throughput rates increased in the third quarter of 2017 as compared to the same period of 2016 as a result of improved operational performance following the completion of planned turnarounds at our Delaware City and Chalmette refineries in the first and second quarters of 2017, respectively. Our West Coast refinery underwent its first major turnaround under our ownership for a majority of the second quarter in 2017, following which its throughput rates in the third quarter of 2017 were significantly above the same period of 2016. For the three months ended ~~September~~June 30, 2017, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately ~~359,700~~369,000 bpd, ~~167,300~~161,500 bpd, ~~233,400~~237,700 bpd and 173,300 bpd, respectively. For the three months ended September 30, 2016, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 345,800 bpd, 177,200 bpd, 209,300 bpd and 177,100131,200 bpd, respectively. Total refined product barrels sold were higher than throughput rates, reflecting sales from inventory as well as sales and purchases of refined products outside the refinery.

Consolidated Gross Margin— ~~Gross~~Consolidated gross margin ~~including refinery operating expenses and depreciation,~~ totaled ~~$604.1~~$442.7 million ~~or $7.73 per barrel of throughput,~~ for the three months ended ~~September~~June 30, ~~2017~~2018 compared to ~~$149.0~~$(105.0) million ~~or $2.06 per barrel of throughput,~~ for the three months ended ~~September~~June 30, ~~2016,~~2017, an increase of approximately ~~$455.1~~$547.8 million. Gross refining margin (as described below in Non-GAAP Financial Measures) totaled ~~$1,064.0~~$928.3 million, or ~~$13.61~~$11.77 per barrel of throughput ($~~798.9~~770.3 million or ~~$10.22~~$9.77 per barrel of throughput excluding the impact of special items), for the three months ended ~~September~~June 30, ~~2017~~2018 compared to ~~$604.4~~$350.4 million, or ~~$8.36~~$5.01 per barrel of throughput ($~~500.4~~501.5 million or ~~$6.92~~$7.17 per barrel of throughput excluding the impact of special items) for the three months ended ~~September~~June 30, ~~2016,~~2017, an increase of approximately ~~$459.7~~$577.9 million, or ~~$298.6~~$268.8 million excluding special items.

~~Excluding the impact of special items,~~Consolidated gross margin and gross refining margin increased due to ~~improved crack spreads and~~overall higher throughput ~~rates~~volumes and generally favorable movements in crude differentials and certain crack spreads. We experienced increased gross refining margin contributions of $155.4 million, or $116.1 million excluding special items, from our Torrance refinery following its first significant turnaround under our ownership, which was completed early in the East Coast, Gulf Coast and West Coast and reduced costs to comply with the RFS. Costs to comply with our obligation under the RFS totaled $83.4 million for the three months ended September 30, 2017 compared to $94.7 million for the three months ended September 30, 2016.third quarter of 2017. In addition, consolidated gross margin and gross refining margin were positively impacted by a non-cash LCM inventory adjustment of approximately ~~$265.1~~$158.0 million on a net basis resulting from an increase in crude oil and refined product prices in comparison to the prices at ~~the~~ end of the ~~second~~first quarter of ~~2017.~~2018. The non-cash LCM inventory adjustment ~~increased~~decreased consolidated gross margin and gross refining margin by approximately ~~$104.0~~$151.1 million on a net basis in the ~~third~~second quarter of ~~2016.~~2017. Additionally, our results continue to be impacted by significant costs to comply with the Renewable Fuel Standard (“RFS”). Total RFS costs were $39.2 million for the three months ended June 30, 2018 in comparison to $74.2 million for the three months ended June 30, 2017.

Average industry refining margins in the Mid-Continent were significantly stronger during the three months ended ~~September~~June 30, ~~2017~~2018 as compared to the same period in ~~2016.~~2017. The WTI (Chicago) 4-3-1 industry crack spread was ~~$18.82~~$17.56 per barrel, or ~~38.0%~~24.6% higher, in the three months ended ~~September~~June 30, ~~2017~~2018 as compared to ~~$13.64~~$14.09 per barrel in the same period in ~~2016.~~2017. Our ~~margins were unfavorably impacted by our~~ refinery specific crude slate in the Mid-Continent ~~which~~ was impacted by ~~a declining~~an improving WTI/Bakken differential, ~~and a declining~~which was 30.0% higher in the three months ended June 30, 2018, as compared to $0.30 per barrel in the same period in 2017. Additionally, the WTI/Syncrude differential ~~which~~ averaged a ~~premium of $1.95~~discount $2.98 per barrel during the three months ended ~~September~~June 30, ~~2017~~2018 as compared to a premium of ~~$0.95~~$1.35 per barrel in the same period of ~~2016.~~2017.

On the East Coast, the Dated Brent (NYH) 2-1-1 industry crack spread was approximately ~~$18.12~~$14.96 per barrel, or ~~40.0%~~1.0% higher, in the three months ended ~~September~~June 30, ~~2017~~2018 as compared to ~~$12.94~~$14.81 per barrel in the same period in ~~2016.~~2017. The ~~Dated Brent/WTI differential and~~ Dated Brent/Maya differential ~~were $2.95 and $1.88~~was $4.40 higher ~~respectively,~~ in the three months ended ~~September~~June 30, 2018 as compared

to the same period in 2017 and the Dated Brent/WTI differential was $4.82 higher in the three months ended June 30, 2018 as compared to the same period in 2016, partially offset by adverse movements in the WTI/Bakken differential, which was approximately $2.10 per barrel less favorable (a premium of $0.69 in 2017 as compared to a discount of $1.41 in 2016) in2017.

Gulf Coast industry refining margins improved during the three months ended ~~September~~June 30, ~~2017~~2018 as compared to the same period in ~~2016.~~

~~Gulf Coast industry refining margins improved significantly during the three months ended September 30, 2017 as compared to the same period in 2016.~~2017. The LLS (Gulf Coast) 2-1-1 industry crack spread was ~~$16.69~~$13.52 per barrel, or ~~45.0%~~7.6% higher, in the three months ended ~~September~~June 30, ~~2017~~2018 as compared to ~~$11.51~~$12.56 per barrel in the same period in ~~2016.~~2017. Crude differentials weakened with the WTI/LLS differential averaging a premium of ~~$3.49~~

$5.12 per barrel during the three months ended ~~September~~June 30, ~~2017~~2018 as compared to a premium of ~~$1.65~~$2.06 per barrel in the same period of ~~2016.~~2017.

Additionally, ~~we benefited from improvements in the~~ West Coast industry refining margins slightly decreased during the three months ended ~~September~~June 30, ~~2017~~2018 as compared to the same period in ~~2016.~~2017. The ANS (West Coast) 4-3-1 industry crack spread was ~~$20.66~~$18.70 per barrel, or ~~32.4% higher,~~2.4% lower, in the three months ended ~~September~~June 30, ~~2017~~2018 as compared to ~~$15.61~~$19.16 per barrel in the same period in ~~2016. Partially offsetting the improved crack spreads, crude~~2017. Crude differentials weakened with the WTI/ANS differential averaging a premium of ~~$3.86~~$5.91 per barrel during the three months ended ~~September~~June 30, ~~2017~~2018 as compared to a ~~discount~~premium of ~~$0.23~~$2.50 per barrel in the same period of ~~2016.~~2017.

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 ~~$389.6~~$402.8 million, or ~~$4.98~~$5.11 per barrel of throughput, for the three months ended ~~September~~June 30, ~~2017~~2018 compared to ~~$404.0~~$398.5 million, or ~~$5.59~~$5.69 per barrel of throughput, for the three months ended ~~September~~June 30, ~~2016, a decrease~~2017, an increase of ~~$14.5~~$4.3 million, or ~~3.6%~~1.1%. The ~~decrease~~nominal increase in operating expenses was ~~mainly attributable to lower outside services~~driven by higher energy and utility costs ~~as compared to the same period in 2016~~driven by higher throughput across ~~all of~~ our ~~refineries~~system, partially offset by ~~higher~~a decrease in maintenance and supply costs ~~due to~~as a result of increased ~~throughput.~~system reliability and our focused efforts on reducing operating costs at our Chalmette and Torrance refineries.

General and Administrative Expenses— General and administrative expenses totaled ~~$54.7~~$51.8 million for the three months ended ~~September~~June 30, ~~2017~~2018 compared to ~~$39.9~~$34.9 million for the three months ended ~~September~~June 30, ~~2016,~~2017, an increase of approximately ~~$14.8~~$16.9 million or ~~37.0%~~48.3%. The increase in general and administrative expenses for the three months ended ~~September~~June 30, 2018 in comparison to the three months ended June 30, 2017 ~~over the same period of 2016~~ primarily ~~relates~~related to ~~increases in~~higher employee related expenses, ~~of $21.5 million driven by higher~~including incentive compensation ~~in the third quarter of 2017 as compared to the third quarter of 2016. This increase was partially offset by lower costs associated with acquisition~~ and ~~integration related activities which were $7.0 million lower in the current quarter as compared to the same quarter of 2016.~~retirement benefits. Our general and administrative expenses are comprised of the personnel, facilities and other infrastructure costs necessary to support our refineries.

Loss on Sale of Assets— There was a ~~de minimis~~$0.6 million loss on sale of assets for the three months ended ~~September~~June 30, ~~2017~~2018 relating to the sale of non-operating refinery ~~assets compared to~~assets. There was a de minimis loss ~~of $8.2 million~~ on the sale of non-operating refinery assets for the three months ended ~~September~~June 30, ~~2016.~~2017.

Depreciation and Amortization Expense— Depreciation and amortization expense totaled ~~$72.9~~$85.4 million for the three months ended ~~September~~June 30, ~~2017~~2018 (including ~~$70.3~~$82.8 million recorded within Cost of sales) compared to ~~$52.7~~$63.0 million for the three months ended ~~September~~June 30, ~~2016~~2017 (including ~~$51.3~~$57.0 million recorded within Cost of sales), an increase of ~~$20.2~~$22.4 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 ~~third~~second quarter ~~2016, including~~of 2017 which included the first significant Torrance refinery turnaround under our ~~ownership at our Torrance refinery, which was completed early in the third quarter of 2017.~~ownership.

Change in Fair Value of Catalyst Leases— Change in the fair value of catalyst leases represented a gain of ~~$0.5~~$4.1 million for the three months ended ~~September~~June 30, ~~2017~~2018 compared to a gain of ~~$0.1~~$1.1 million for the three months ended ~~September~~June 30, ~~2016.~~2017. These gains relate to the change in value of the precious metals underlying the sale and leaseback of our refineries’ precious metals catalyst, which we are obligated to repurchase at fair market value on the lease termination dates.

~~Interest Expense, net—~~ Interest expense totaled $29.3 million for the three months ended September 30, 2017 compared to $33.9 million for the three months ended September 30, 2016, a decrease of approximately $4.6 million. This net decrease is primarily attributable to lower interest expense on a portion of our senior notes that were refinanced in May 2017 (see “Note 5 - Debt” for additional details). Interest expense includes interest on long-term debt and notes payable, costs related to the sale and leaseback of our precious metals catalyst, financing

~~costs associated with the A&R Intermediation Agreements with J. Aron, letter of credit fees associated with the purchase of certain crude oils, and the amortization of deferred financing costs.~~

~~Income Tax Expense~~— As PBF Holding is a limited liability company treated as a “flow-through” entity for income tax purposes, our consolidated financial statements generally do not include a benefit or provision for income taxes for the three months ended September 30, 2017 and September 30, 2016, respectively, apart from the income tax attributable to two subsidiaries acquired in connection with the Chalmette Acquisition in the fourth quarter of 2015 and our wholly-owned Canadian subsidiary, PBF Energy Limited (“PBF Ltd.”). The two subsidiaries acquired in connection with the Chalmette Acquisition are treated as C-Corporations for income tax purposes.

We incurred a net income tax benefit of $4.3 million and income tax expense of $2.3 million for the three months ended September 30, 2017 and September 30, 2016, respectively, reflecting a net loss from our taxable subsidiaries in the three months ended September 30, 2017 as compared to net earnings from our taxable subsidiaries in the three months ended September 30, 2016.

~~Nine Months EndedSeptember 30, 2017 Compared to the Nine Months Ended September 30, 2016~~

~~Overview—~~ ~~Net income was $255.2 million for the nine months ended September 30, 2017 compared to$148.1 million for the nine months ended September 30, 2016.~~

Our results for the nine months ended September 30, 2017 were net positively impacted by special items. During the nine months ended September 30, 2017, we incurred a positive special item in the form of a non-cash LCM inventory adjustment of approximately $97.9 million, which was partially offset by a special item related to debt extinguishment costs associated with the early retirement of our 2020 Senior Secured Notes of $25.5 million. Our results for the nine months ended September 30, 2016 were positively impacted by an LCM inventory adjustment of approximately $320.8 million. 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 positively impacted by higher throughput volumes at the majority of our refineries and higher crack spreads realized at each of our refineries, which were impacted by the hurricane-related reduction in refining throughput in the Gulf Coast region and tightening product inventories, specifically distillates, as well as lower costs to comply with the RFS. Notably, we benefited from the improved operating performance of our Chalmette and Torrance refineries.

~~Revenues—~~ Revenues totaled $15.2 billion for the nine months ended September 30, 2017 compared to $11.2 billion for the nine months ended September 30, 2016, an increase of approximately $4.1 billion, or 36.5%. Revenues per barrel were $62.34 and $57.25 for the nine months ended September 30, 2017 and 2016, respectively, an increase of 8.9% directly related to higher hydrocarbon commodity prices. For the nine months ended September 30, 2017, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 330,100 bpd, 146,500 bpd, 182,600 bpd and 126,900 bpd, respectively. For the nine months ended September 30, 2016, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 327,900 bpd, 165,700 bpd, 171,300 bpd and 139,600 bpd, respectively. The throughput rates at our East Coast refineries were substantially unchanged in 2017 compared to 2016. Our West Coast refinery was not acquired until the beginning of the third quarter of 2016. The decrease in throughput rates at our West Coast refinery in 2017 compared to 2016 is primarily due to planned downtime at our Torrance refinery for its first significant turnaround under our ownership, which was completed early in the third quarter of 2017. For the nine months ended September 30, 2017, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 358,000 bpd, 160,600 bpd, 221,700 bpd and 155,200 bpd, respectively. For the nine months ended September 30, 2016, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 366,000 bpd, 175,700 bpd, 209,000 bpd and 177,100 bpd, respectively. Total refined product barrels sold were higher than throughput rates, reflecting sales from inventory as well as sales and purchases of refined products outside the refinery.

~~Gross Margin—~~ ~~Gross margin, including refinery operating expenses and depreciation, totaled $506.6 million, or $2.36 per barrel of throughput, for the nine months ended September 30, 2017 compared to $405.9~~

million, or $2.09 per barrel of throughput, for the nine months ended September 30, 2016, an increase of $100.7 million. Gross refining margin (as described below in Non-GAAP Financial Measures) totaled $1,912.9 million, or $8.91 per barrel of throughput ($1,814.9 million or $8.46 per barrel of throughput excluding the impact of special items), for the nine months ended September 30, 2017 compared to $1,529.6 million, or $7.85 per barrel of throughput ($1,208.7 million or $6.20 per barrel of throughput excluding the impact of special items) for the nine months ended September 30, 2016, an increase of approximately $383.3 million or $606.2 million excluding special items.

Excluding the impact of special items, gross margin and gross refining margin increased due to improved crack spreads for each of our refineries, reduced costs to comply with the RFS and positive margin contributions from our Torrance refinery following its first significant turnaround under our ownership, which was completed early in the third quarter of 2017. Costs to comply with our obligation under the RFS totaled $203.2 million for the nine months ended September 30, 2017 compared to $251.9 million for the nine months ended September 30, 2016. In addition, gross margin and gross refining margin were positively impacted by a non-cash LCM inventory adjustment of approximately $97.9 million on a net basis resulting from an increase in crude oil and refined product prices in comparison to the prices at year end. The non-cash LCM inventory adjustment increased gross margin and gross refining margin by approximately $320.8 million for the nine months ended September 30, 2016.

Average industry refining margins in the Mid-Continent were stronger during the nine months ended September 30, 2017 as compared to the same period in 2016. The WTI (Chicago) 4-3-1 industry crack spread was $14.70 per barrel, or 12.5% higher, in the nine months ended September 30, 2017 as compared to $13.07 per barrel in the same period in 2016. Our margins were unfavorably impacted by our refinery specific crude slate in the Mid-Continent which was impacted by a declining WTI/Bakken differential partially offset by an improving WTI/Syncrude differential, which averaged a premium of $1.86 per barrel during the nine months ended September 30, 2017 as compared to a premium of $2.67 per barrel in the same period of 2016.

On the East Coast, the Dated Brent (NYH) 2-1-1 industry crack spread was approximately $14.84 per barrel, or 12.6% higher in the nine months ended September 30, 2017 as compared to $13.18 per barrel in the same period in 2016. The Dated Brent/Maya differential was $0.80 lower in the nine months ended September 30, 2017 as compared to the same period in 2016. The Dated Brent/WTI differential was $1.83 higher in the nine months ended September 30, 2017 as compared to the same period in 2016, partially offset by a narrowing WTI/Bakken differential, which was approximately $0.95 per barrel less favorable in the nine months ended September 30, 2017 as compared to the same period in 2016.

Gulf Coast industry refining margins improved during the nine months ended September 30, 2017 as compared to the same period in 2016. The LLS (Gulf Coast) 2-1-1 industry crack spread was $13.75 per barrel, or 32.9% higher, in the nine months ended September 30, 2017 as compared to $10.35 per barrel in the same period in 2016. Crude differentials slightly decreased with the WTI/LLS differential averaging a premium of $2.41 per barrel during the nine months ended September 30, 2017 as compared to a premium of $1.79 per barrel in the same period of 2016.

Additionally, we benefited from improvements in the West Coast industry refining margins during the nine months ended September 30, 2017 as compared to the same period in 2016. The ANS (West Coast) 4-3-1 industry crack spread was $18.78 per barrel, or 9.1% higher, in the nine months ended September 30, 2017 as compared to $17.22 per barrel in the same period in 2016. Partially offsetting the improved crack spreads, crude differentials weakened with the WTI/ANS differential averaging a premium of $2.82 per barrel during the nine months ended September 30, 2017 as compared to a premium of $0.17 per barrel in the same period of 2016. As the Torrance refinery was not acquired until the beginning of the third quarter of 2016, we did not benefit from the contribution of this refinery for the full nine months of the prior year.

~~Operating Expenses~~— Operating expenses totaled $1,225.0 million, or $5.71 per barrel of throughput, for the nine months ended September 30, 2017 compared to $972.2 million, or $4.98 per barrel of throughput, for the nine months ended September 30, 2016, an increase of $252.8 million, or 26.0%. The increase in operating expenses was mainly attributable to an increase of $237.3 million in costs associated with the Torrance refinery and related logistics assets. Total operating expenses for the nine months ended September 30, 2017, excluding our Torrance refinery, increased due to higher maintenance and utility costs across all our other refineries.

~~General and Administrative Expenses~~— General and administrative expenses totaled $130.1 million for the nine months ended September 30, 2017 compared to $111.3 million for the nine months ended September 30, 2016, an increase of approximately $18.8 million or 16.9%. The increase in general and administrative expenses for the nine months ended September 30, 2017 over the same period of 2016 primarily relates to increased employee related expenses of $28.3 million driven by higher incentive compensation costs in the nine months ended September 30, 2017 as compared to the same period in 2016 as well as higher employee headcount. These increases were partially offset by lower costs associated with the acquisition and integration related activities which were approximately $10.1 million lower in the nine months ended September 30, 2017 as compared to the same period of 2016. Our general and administrative expenses are comprised of the personnel, facilities and other infrastructure costs necessary to support our refineries.

~~Loss on Sale of Assets~~— There was a loss of $0.9 million on sale of assets for the nine months ended September 30, 2017 relating to non-operating refinery assets as compared to a loss of $11.4 million on the sale of assets for the nine months ended September 30, 2016 relating to the sale of non-operating refinery assets.

~~Depreciation and Amortization Expense~~— Depreciation and amortization expense totaled $191.6 million for the nine months ended September 30, 2017 (including $181.2 million recorded within Cost of sales) compared to $155.9 million for the nine months ended September 30, 2016 (including $151.5 million recorded within Cost of sales), an increase of approximately $35.7 million. The increase was a result of additional depreciation expense associated with the assets acquired in the Torrance Acquisition and a general increase in our fixed asset base due to capital projects and turnarounds completed since the third quarter of 2016.

~~Change in Fair Value of Catalyst Leases~~— Change in the fair value of catalyst leases represented a loss of $1.0 million for the nine months ended September 30, 2017 compared to a loss of $4.6 million for the nine months ended September 30, 2016. These 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.

Debt extinguishment costs -— Debt extinguishment costs of $25.5 million incurred in the ~~nine~~three months ended ~~September~~June 30, 2017 relate to nonrecurring charges associated with debt refinancing activity calculated based on the difference between the carrying value of the 2020 Senior Secured Notes on the date that they were reacquired and the amount for which they were reacquired. There were no such costs in the same period of ~~2016.~~2018.

Interest Expense, net— Interest expense ~~totaled $92.8~~was relatively consistent with the same quarter of the prior year totaling $33.1 million for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2018 compared to ~~$98.4~~$32.9 million for the ~~nine~~three months ended ~~September~~June 30, 2016, a decrease of approximately $5.7 million. This net decrease is attributable to lower interest expense on a portion of our senior notes that were refinanced in May 2017 (see “Note 5 - Debt” for additional details).2017. Interest expense includes interest on long-term debt and notes payable, costs related to the sale and leaseback of our precious metals catalyst, financing costs associated with the ~~A&R~~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.

Income Tax Expense— As PBF Holding is a limited liability company treated as a “flow-through” entity for income tax purposes, our consolidated financial statements generally do not include a benefit or ~~provision~~expense for income taxes for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2018 and ~~September~~June 30, ~~2016,~~2017, respectively, apart from the income tax attributable to two subsidiaries acquired in connection with the Chalmette Acquisition in the fourth quarter of 2015 and our wholly-owned Canadian subsidiary, PBF ~~Ltd..~~Ltd. These subsidiaries are treated as C-Corporations for income tax purposes. An income tax benefit of $4.0 million was recorded for the three months ended June 30, 2018 in comparison to income tax expense of $5.9 million recorded for the three months ended June 30, 2017, primarily attributable to the results of PBF Ltd.

Six Months EndedJune 30, 2018 Compared to the Six Months Ended June 30, 2017

Overview— Net income was $399.9 million for the six months ended June 30, 2018 compared to net loss of $270.9 million for the six months ended June 30, 2017.

Our results for the six months ended June 30, 2018 were positively impacted by a non-cash special item consisting of an LCM inventory adjustment of approximately $245.7 million. Our results for the six months ended June 30, 2017 were negatively impacted by an LCM inventory adjustment of approximately $167.1 million and debt extinguishment costs related to the early retirement of our 2020 Senior Secured Notes of $25.5 million. 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 positively impacted by strong crack spreads, favorable movements in crude differentials, higher overall throughput volumes and increases in barrels sold across our refineries. In particular, we benefited significantly from favorable results at our Torrance refinery, which continues to experience operational improvements, including reduced operating expenses, due to the capital investments made since our acquisition. Our results in the current period were negatively impacted by higher general and administrative costs and increased interest and depreciation and amortization expense.

Revenues— Revenues totaled $13.2 billion for the six months ended June 30, 2018 compared to $9.8 billion for the six months ended June 30, 2017, an increase of approximately $3.5 billion, or 35.6%. Revenues per barrel were $76.49 and $61.57 for the six months ended June 30, 2018 and 2017, respectively, an increase of 24.2% directly related to higher hydrocarbon commodity prices. 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. For the six months ended June 30, 2017, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 323,200 bpd, 139,300 bpd, 173,600 bpd and 117,600 bpd, respectively. The throughput rates at our East Coast, Gulf Coast and West Coast refineries were higher in the six months ended June 30, 2018 compared to the same period in 2017 generally due to improved market conditions and turnaround activity timing. Throughput rates at our Mid-Continent refinery were in line with the prior year. The throughput rates at our East Coast refineries increased due to planned downtime at our Delaware City refinery during 2017. The throughput rates at our West Coast refinery increased due to planned downtime in the prior year as part of the first significant turnaround of the refinery under our ownership and improved refinery performance experienced in the current year. 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. For the six months ended June 30, 2017, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast

refineries averaged approximately 357,100 bpd, 157,200 bpd, 215,800 bpd and 146,000 bpd, respectively. Total refined product barrels sold were higher than throughput rates, reflecting sales from inventory as well as sales and purchases of refined products outside the refinery.

Consolidated Gross Margin— Consolidated gross margin totaled $564.5 million for the six months ended June 30, 2018 compared to $(97.3) million for the six months ended June 30, 2017, an increase of approximately $661.8 million. Gross refining margin (as described below in Non-GAAP Financial Measures) totaled $1,538.3 million, or $10.20 per barrel of throughput ($1,292.7 million or $8.57 per barrel of throughput excluding the impact of special items), for the six months ended June 30, 2018 compared to $848.9 million, or $6.22 per barrel of throughput ($1,016.0 million or $7.45 per barrel of throughput excluding the impact of special items) for the six months ended June 30, 2017, an increase of approximately $689.5 million, or $276.7 million excluding special items.

Consolidated gross margin and gross refining margin increased due to generally favorable movements in crude differentials, higher crack spreads and overall higher throughput volumes experienced across our refineries. We also experienced increased gross refining margin contributions of $229.8 million, or $157.4 million excluding special items, from our Torrance refinery following its first significant turnaround under our ownership, which was completed early in the third quarter of 2017. In addition, consolidated gross margin and gross refining margin were positively impacted by a non-cash LCM inventory adjustment of approximately $245.7 million on a net basis resulting from an increase in crude oil and refined product prices in comparison to the prices at the end of 2017. The non-cash LCM inventory adjustment decreased consolidated gross margin and gross refining margin by approximately $167.1 million for the six months ended June 30, 2017. Additionally, our results continue to be impacted by significant costs to comply with RFS. Total RFS costs were $83.1 million for the six months ended June 30, 2018 in comparison to $119.7 million for the six months ended June 30, 2017.

Average industry refining margins in the Mid-Continent were stronger during the six months ended June 30, 2018 as compared to the same period in 2017. The WTI (Chicago) 4-3-1 industry crack spread was $14.74 per barrel, or 16.5% higher, in the six months ended June 30, 2018 as compared to $12.65 per barrel in the same period in 2017. Our refinery specific crude slate in the Mid-Continent was impacted by an improving WTI/Bakken differential, which was 14.8% higher in the six months ended June 30, 2018, as compared to $0.61 per barrel in the same period in 2017. Additionally, the WTI/Syncrude differential averaged a discount of $1.69 per barrel during the six months ended June 30, 2018 as compared to a premium of $1.81 per barrel in the same period of 2017.

On the East Coast, the Dated Brent (NYH) 2-1-1 industry crack spread was approximately $13.90 per barrel, or 5.2% higher in the six months ended June 30, 2018, as compared to $13.21 per barrel in the same period in 2017. The Dated Brent/Maya differential was $3.44 higher in the six months ended June 30, 2018 as compared to the same period in 2017. The Dated Brent/WTI differential was $3.50 higher in the six months ended June 30, 2018 as compared to the same period in 2017, and the WTI/Bakken differential was approximately $0.09 per barrel higher in the six months ended June 30, 2018 as compared to the same period in 2017.

Gulf Coast industry refining margins improved during the six months ended June 30, 2018 as compared to the same period in 2017. The LLS (Gulf Coast) 2-1-1 industry crack spread was $13.19 per barrel, or 7.2% higher, in the six months ended June 30, 2018 as compared to $12.30 per barrel in the same period in 2017. Crude differentials weakened with the WTI/LLS differential averaging a premium of $4.06 per barrel during the six months ended June 30, 2018 as compared to a premium of $1.88 per barrel in the same period of 2017.

Additionally, West Coast industry refining margins slightly decreased during the six months ended June 30, 2018 as compared to the same period in 2017. The ANS (West Coast) 4-3-1 industry crack spread was $17.59 per barrel, or 1.5% lower, in the six months ended June 30, 2018 as compared to $17.85 per barrel in the same period in 2017. Crude differentials weakened with the WTI/ANS differential averaging a premium of $5.12 per barrel during the six months ended June 30, 2018 as compared to a premium of $2.31 per barrel in the same period of 2017.

Operating Expenses— Operating expenses totaled $814.2 million, or $5.40 per barrel of throughput, for the six months ended June 30, 2018 compared to $835.3 million, or $6.12 per barrel of throughput, for the six months ended June 30, 2017, a decrease of approximately $21.1 million, or 2.5%. The decrease in operating expenses was driven by increased system reliability, and our focused efforts on reducing operating costs at our Chalmette and Torrance refineries, which lowered maintenance costs. Additionally, there was a decrease in supplies and materials due to our Torrance refinery experiencing higher costs in 2017 related to its turnaround. These decreases were partially offset by higher energy and utility costs as a result of increased throughput.

General and Administrative Expenses— General and administrative expenses totaled $110.0 million for the six months ended June 30, 2018 compared to $75.4 million for the six months ended June 30, 2017, an increase of approximately $34.7 million or 46.0%. The increase in general and administrative expenses for the six months ended June 30, 2018 in comparison to the six months ended June 30, 2017 primarily related to higher employee related expenses, including incentive compensation and retirement benefits. Our general and administrative expenses are comprised of the personnel, facilities and other infrastructure costs necessary to support our refineries.

Loss on Sale of Assets— There was a loss of $0.7 million and a loss of $0.9 million for the six months ended June 30, 2018 and June 30, 2017, respectively, related to the sale of non-operating refinery assets.

Depreciation and Amortization Expense— Depreciation and amortization expense totaled $164.9 million for the six months ended June 30, 2018 (including $159.6 million recorded within Cost of sales) compared to $118.7 million for the six months ended June 30, 2017 (including $110.9 million recorded within Cost of sales), an increase of approximately $46.2 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 2017, which included the first significant Torrance refinery turnaround under our ownership.

Change in Fair Value of Catalyst Leases— Change in the fair value of catalyst leases represented a gain of $4.2 million for the six months ended June 30, 2018 compared to a loss of $1.5 million for the six months ended June 30, 2017. 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.

Debt extinguishment costs— Debt extinguishment costs of $25.5 million incurred in the six months ended June 30, 2017 related to nonrecurring charges associated with debt refinancing activity calculated based on the difference between the carrying value of the 2020 Senior Secured Notes on the date that they were reacquired and the amount for which they were reacquired. There were no such costs in the same period of 2018.

Interest Expense, net— Interest expense totaled $66.4 million for the six months ended June 30, 2018 compared to $63.5 million for the six months ended June 30, 2017, an increase of approximately $2.9 million. This net increase is attributable to higher debt outstanding partially offset by lower interest rates on a portion of our senior notes that were refinanced in May 2017. Interest expense includes interest on long-term debt and notes payable, 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.

Income Tax Expense— As PBF Holding is a limited liability company treated as a “flow-through” entity for income tax purposes, our consolidated financial statements generally do not include a benefit or expense for income taxes for the six months ended June 30, 2018 and June 30, 2017, respectively, apart from the income tax attributable to two subsidiaries acquired in connection with the Chalmette Acquisition in the fourth quarter of 2015 and our wholly-owned Canadian subsidiary, PBF Ltd. These subsidiaries are treated as C-Corporations for income tax purposes. An income tax benefit of $4.7 million was recorded for the six months ended June 30, 2018 in comparison

~~Income~~to income tax expense ~~was $2.0~~of $6.3 million ~~and $29.3 million~~recorded for the ~~nine~~six months ended ~~September~~June 30, 2017 ~~and September 30, 2016, respectively. Income tax expense for~~primarily attributable to the ~~nine months ended September 30, 2016 included a charge~~results of ~~$30.7 million related to a correction of prior periods.~~PBF Ltd.

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”~~Non-GAAP”). These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly entitled measures reported by other companies.

Special Items

The ~~non-GAAP~~Non-GAAP measures presented include EBITDA excluding special items and gross refining margin excluding special items. ~~The~~Special items for the three and six months ended June 30, 2018 relate to an LCM inventory adjustment and special items for the ~~periods presented~~three and six months ended June 30, 2017 relate to an LCM inventory adjustment and debt extinguishment costs (as further explained in “Notes to Non-GAAP Financial Measures” ~~below on page 60)~~below). Although we believe that ~~non-GAAP~~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~~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.

Gross Refining Margin and Gross Refining Margin Excluding Special Items

Gross refining margin is defined as consolidated gross margin excluding refinery depreciation and ~~operating expenses related to the refineries.~~operating. 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 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, ~~operating~~ income from operations, net cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Gross refining margin and gross refining margin excluding special items presented by other companies may not be comparable to our presentation, since each company may define these terms differently.

The following table presents our GAAP calculation of consolidated 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 thousands, except per barrel amounts):


	Three Months Ended September 30,												Three Months Ended June 30,
	2017						2016						2018						2017
	$			per barrel of throughput			$			per barrel of throughput			$			per barrel of throughput			$			per barrel of throughput
Calculation of gross margin:
Calculation of consolidated gross margin:
Revenues	$	5,475,816		$	70.05		$	4,508,613		$	62.32		$	7,440,470		$	94.35		$	5,013,251		$	71.62
Less: Cost of products and other	4,411,809			56.44			3,904,258			53.96
Less: Refinery operating expenses	389,591			4.98			404,045			5.59
Less: Refinery depreciation expenses	70,338			0.90			51,337			0.71
Gross margin	$	604,078		$	7.73		$	148,973		$	2.06
Reconciliation of gross margin to gross refining margin:
Gross margin	$	604,078		$	7.73		$	148,973		$	2.06
Less: Cost of Sales													6,997,733			88.74			5,118,291			73.11
Consolidated gross margin													$	442,737		$	5.61		$	(105,040	)	$	(1.49	)
Reconciliation of consolidated gross margin to gross refining margin:
Consolidated gross margin													$	442,737		$	5.61		$	(105,040	)	$	(1.49	)
Add: Refinery operating expenses	389,591			4.98			404,045			5.59			402,751			5.11			398,485			5.69
Add: Refinery depreciation expense	70,338			0.90			51,337			0.71			82,829			1.05			56,973			0.81
Gross refining margin	$	1,064,007		$	13.61		$	604,355		$	8.36		$	928,317		$	11.77		$	350,418		$	5.01
Special items:
Add: Non-cash LCM inventory adjustment (1)	(265,077		)	(3.39		)	(103,990		)	(1.44		)	(158,002		)	(2.00		)	151,095			2.16
Gross refining margin excluding special items	$	798,930		$	10.22		$	500,365		$	6.92		$	770,315		$	9.77		$	501,513		$	7.17



	Six Months Ended June 30,
	2018						2017
	$			per barrel of throughput			$			per barrel of throughput
Calculation of consolidated gross margin:
Revenues	$	13,240,071		$	87.79		$	9,763,449		$	71.57
Less: Cost of Sales	12,675,564			84.04			9,860,741			72.28
Consolidated gross margin	$	564,507		$	3.75		$	(97,292	)	$	(0.71	)
Reconciliation of consolidated gross margin to gross refining margin:
Consolidated gross margin	$	564,507		$	3.75		$	(97,292	)	$	(0.71	)
Add: Refinery operating expense	814,198			5.40			835,253			6.12
Add: Refinery depreciation expense	159,607			1.05			110,901			0.81
Gross refining margin	$	1,538,312		$	10.20		$	848,862		$	6.22
Special items:
Add: Non-cash LCM inventory adjustment (1)	(245,655		)	(1.63		)	167,134			1.23
Gross refining margin excluding special items	$	1,292,657		$	8.57		$	1,015,996		$	7.45

——————————

See Notes to Non-GAAP Financial ~~Measures on page 60~~

Nine Months Ended September 30,
2017 2016
$ per barrel of throughput $ per barrel of throughput
Calculation of gross margin:
Revenues $ 15,239,265
$ 71.02
$ 11,164,571
$ 57.25
Less: Cost of products and other 13,326,396
62.11
9,634,989
49.40
Less: Refinery operating expenses 1,225,014
5.71
972,223
4.98
Less: Refinery depreciation expenses 181,238
0.84
151,473
0.78
Gross margin $ 506,617
$ 2.36
$ 405,886
$ 2.09
Reconciliation of gross margin to gross refining margin:
Gross margin $ 506,617
$ 2.36
$ 405,886
$ 2.09
Add: Refinery operating expenses 1,225,014
5.71
972,223
4.98
Add: Refinery depreciation expense 181,238
0.84
151,473
0.78
Gross refining margin $ 1,912,869
$ 8.91
$ 1,529,582
$ 7.85
Special items:
Add: Non-cash LCM inventory adjustment (1) (97,943 ) (0.45 ) (320,833 ) (1.65 )
Gross refining margin excluding special items $ 1,814,926
$ 8.46
$ 1,208,749
$ 6.20

~~——————————~~

~~See Notes to Non-GAAP Financial Measures on page 60~~Measures.

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 operating income (loss) or net income (loss) 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 ~~equity-based~~stock-based compensation expense, ~~gains (losses) from certain derivative activities and contingent consideration,~~ the non-cash change in the ~~deferral~~fair value of ~~gross profit related to the sale of certain finished products,~~catalyst leases, the write down of inventory to the LCM, ~~and~~ debt extinguishment costs related to refinancing ~~activities.~~activities and certain other non-cash items. Other companies, including other companies in our industry, may calculate EBITDA, EBITDA excluding special items and Adjusted EBITDA differently than we do, limiting 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.

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


		Three Months Ended September 30,						Nine Months Ended September 30,								Three Months Ended June 30,								Six Months Ended June 30,

			2017			2016					2017				2016				2018				2017				2018				2017

Reconciliation of net income to EBITDA and EBITDA excluding special items:
Net income		$	526,080		$	65,072		$	255,164			$	148,148
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)	$	367,535			$	(205,376	)		$	399,942			$	(270,916	)
Add: Depreciation and amortization expense	Add: Depreciation and amortization expense	72,910			52,678			191,593				155,890			Add: Depreciation and amortization expense	85,392				62,993				164,884				118,683
Add: Interest expense, net	Add: Interest expense, net	29,269			33,896			92,782				98,446			Add: Interest expense, net	33,052				32,857				66,366				63,513
Add: Income tax (benefit) expense	Add: Income tax (benefit) expense	(4,292		)	2,291			2,040				29,287			Add: Income tax (benefit) expense	(3,983		)		5,898				(4,684		)		6,332
EBITDA	EBITDA	$	623,967		$	153,937		$	541,579			$	431,771		EBITDA	$	481,996			$	(103,628	)		$	626,508			$	(82,388	)
Special Items:	Special Items:														Special Items:
Add: Non-cash LCM inventory adjustment (1)	Add: Non-cash LCM inventory adjustment (1)	(265,077		)	(103,990		)	(97,943		)		(320,833		)	Add: Non-cash LCM inventory adjustment⁽¹⁾	(158,002		)		151,095				(245,655		)		167,134
Add: Debt extinguishment costs (1)	Add: Debt extinguishment costs (1)	—			—			25,451				—			Add: Debt extinguishment costs ⁽¹⁾	—				25,451				—				25,451
EBITDA excluding special items	EBITDA excluding special items	$	358,890		$	49,947		$	469,087			$	110,938		EBITDA excluding special items	$	323,994			$	72,918			$	380,853			$	110,197

Reconciliation of EBITDA to Adjusted EBITDA:	Reconciliation of EBITDA to Adjusted EBITDA:														Reconciliation of EBITDA to Adjusted EBITDA:
EBITDA	EBITDA	$	623,967		$	153,937		$	541,579			$	431,771		EBITDA	$	481,996			$	(103,628	)		$	626,508			$	(82,388	)
Add: Stock based compensation		3,415			2,659			13,549				12,658
Add: Stock-based compensation															Add: Stock-based compensation	5,282				4,789				9,520				10,134
Add: Non-cash change in fair value of catalyst leases	Add: Non-cash change in fair value of catalyst leases	(473		)	(77		)	1,011				4,556			Add: Non-cash change in fair value of catalyst leases	(4,140		)		(1,104		)		(4,153		)		1,484
Add: Non-cash LCM inventory adjustment (1)	Add: Non-cash LCM inventory adjustment (1)	(265,077		)	(103,990		)	(97,943		)		(320,833		)	Add: Non-cash LCM inventory adjustment⁽¹⁾	(158,002		)		151,095				(245,655		)		167,134
Add: Debt extinguishment costs (1)	Add: Debt extinguishment costs (1)	—			—			25,451				—			Add: Debt extinguishment costs ⁽¹⁾	—				25,451				—				25,451
Adjusted EBITDA	Adjusted EBITDA	$	361,832		$	52,529		$	483,647			$	128,152		Adjusted EBITDA	$	325,136			$	76,603			$	386,220			$	121,815

——————————

See Notes to Non-GAAP Financial ~~Measures on page 60~~Measures.

Notes to Non-GAAP Financial Measures

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

(1)

Special items: In accordance with GAAP, we are required to state our inventories at the lower of cost or market. Our inventory cost is determined by 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.

LCM inventory adjustment - LCM is a GAAP guideline related to inventory valuation that requires inventory to be stated at the lower of cost or market. Our inventories are stated at the lower of cost or market. Cost is determined using last-in, first-out (“LIFO”) inventory valuation methodology, in which the most recently incurred costs are charged to cost of sales and inventories are valued at base layer acquisition costs. Market is determined based on an assessment of the current estimated replacement cost and net realizable selling price of the inventory. In periods where the market price of our inventory 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 operating income, but are excluded from the operating results presented in the tables in order to make such information comparable between periods.

The following table includes the lower of cost or market inventory reserve as of each date presented (in thousands):


	2017		2016		2018		2017
January 1,	$	595,988	$	1,117,336	$	300,456	$	595,988
March 31,					212,803		612,027
June 30,	763,122		900,493		54,801		763,122
September 30,	498,045		796,503

The following table includes the corresponding impact of changes in the lower of cost or market inventory reserve on both ~~operating~~ income (loss) from operations and net income (loss) for the periods presented (in thousands):

Three Months Ended September 30, Nine Months Ended
September 30,

2017 2016 2017 2016
Net LCM inventory adjustment benefit in both operating and net income $ 265,077
$ 103,990
$ 97,943
$ 320,833



	Three Months Ended June 30,					Six Months Ended June 30,
	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017
Net LCM inventory adjustment benefit (charge) in both income (loss) from operations and net income (loss)	$	158,002	$	(151,095	)	$	245,655	$	(167,134	)

~~Additionally, during~~Debt Extinguishment Costs - During the ~~nine~~three and six months ended ~~September~~June 30, 2017, we recorded debt extinguishment costs of $25.5 million related to the redemption of the 2020 Senior Secured Notes. ~~This nonrecurring charge decreased both operating income and net income by $25.5 million for the nine months ended September 30, 2017.~~ There were no such costs in the ~~three months ended September 30, 2017 nor in either the three or nine months ended September 30, 2016.~~same periods of 2018.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are our cash flows from operations and borrowing availability under our credit facilities, as ~~more fully~~further 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, distribution ~~payments~~payment and debt service requirements for the next twelve months. However, our ability to generate sufficient cash flow from operations depends, in part, on petroleum oil market pricing and general economic, political and other factors beyond our control. We are in compliance as of ~~September~~June 30, ~~2017~~2018 with all of the covenants, including financial covenants, in all of our debt agreements.

Cash Flow Analysis

Cash Flows from Operating Activities

Net cash provided by operating activities was ~~$124.4~~$230.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 compared to net cash ~~provided by~~used in operating activities of ~~$291.5~~$205.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. Our operating cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 included our net income of ~~$255.2~~$399.9 million, plus depreciation and amortization of ~~$197.4 million, debt extinguishment costs related to refinancing of our 2020 Senior Secured Notes of $25.5~~$168.1 million, pension and other post-retirement benefits costs of ~~$31.7~~$23.7 million, ~~equity-based~~stock-based compensation of ~~$13.5~~$9.5 million, changes in the fair value of our catalyst leases of $1.0 million, deferred income taxes of $0.6 million, loss on sale of assets of $0.9 million and $5.7 million of net distributions received from our equity method investment in TVPC in excess of its earnings, partially offset by a non-cash benefit of $97.9 million relating to an LCM inventory adjustment and a change in the fair value of our inventory repurchase obligations of ~~$26.7~~$2.5 million, distributions from our equity method investment in Torrance Valley Pipeline Company LLC (“TVPC”) of $8.4 million, and loss on sale of assets of $0.7 million, partially offset by a non-cash benefit of $245.7 million relating to an LCM inventory adjustment, a change in the fair value of our catalyst leases of $4.2 million, income from our equity method investment in TVPC of $8.4 million and deferred income taxes of $4.7 million. In addition, net changes in operating assets and liabilities reflected uses of cash of ~~$282.5~~$119.5 million driven by the timing of inventory purchases, payments for accrued expenses and accounts payable and collections of accounts receivable. Our operating cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 included our net ~~income~~loss of ~~$148.1~~$270.9 million, plus ~~net non-cash charges relating to~~ depreciation and amortization of ~~$162.6~~$122.8 million, a non-cash charge of $167.1 million relating to an LCM inventory adjustment, debt extinguishment costs related to refinancing of our 2020 Senior Secured Notes of $25.5 million, pension and other post-retirement benefits costs of $21.1 million, stock-based compensation of $10.1 million, changes in the fair value of our catalyst leases of $1.5 million, deferred income taxes of $5.1 million, loss on sale of assets of $0.9 million and distributions from our equity investment in TVPC of $12.3 million, partially offset by a change in the fair value of our inventory repurchase obligations of $29.3 million, deferred income taxes of $27.8 million, pension and other post-retirement benefits costs of $25.9 million, changes in the fair value of our catalyst leases of $4.6 million, equity-based compensation of $12.7$3.1 million and ~~a loss on sale of assets of $11.4 million, offset by a non-cash benefit of $320.8 million relating to an LCM inventory adjustment and equity~~ income from our equity method investment in TVPC of ~~$1.6~~$7.4 million. In addition, net changes in operating assets and liabilities reflected ~~sources~~uses of cash of ~~$191.6~~$290.8 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 ~~$583.5~~$298.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 compared to net cash used in investing activities of ~~$1,316.0~~$417.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. The net cash flows used in investing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017 was~~2018 were comprised of capital expenditures totaling ~~$211.2~~$110.2 million, expenditures for refinery turnarounds of ~~$341.6~~$179.2 million and expenditures for other assets of ~~$31.1~~$12.4 million, slightly offset by a return of capital related to our equity method investment in TVPC of ~~$0.5~~$2.9 million. Net cash used in investing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 was comprised of ~~cash outflows of $971.9 million used to fund the Torrance Acquisition,~~ capital expenditures totaling ~~$187.7~~$179.6 million, expenditures for refinery turnarounds of ~~$138.9~~$214.4 million and expenditures for other assets of $27.7 million and a final net working capital settlement of $2.7 million associated with the acquisition of the Chalmette refinery, partially offset by $13.0 million of proceeds from the sale of assets.$23.7 million.

Cash Flows from Financing Activities

Net cash ~~provided by~~used in financing activities was ~~$74.1~~$15.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 compared to net cash provided by financing activities of ~~$629.1~~$110.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. For the ~~nine~~six months ended ~~September~~June 30, 2018, net cash used in financing activities consisted primarily of distributions to members of $26.6 million, principal amortization payments of the PBF Rail Term Loan of $3.4 million, repayments of note payable of $2.4 million, net settlements of precious metals catalyst leases of $9.5 million, and deferred financing costs and other of $12.7 million, partially offset by a contribution from PBF LLC of $22.0 million and proceeds from insurance premium financing of $17.4 million, For the six months ended June 30, 2017, net cash provided by financing activities consisted of a contribution from PBF LLC of $97.0 million and net cash proceeds of ~~$21.4~~$22.4 million from the issuance of the 2025 Senior Notes net of cash paid to redeem the 2020 Senior Secured Notes and related issuance ~~costs. Additionally, during the nine months ended September 30, 2017, we made~~costs, partially offset by distributions to members of ~~$39.3~~$5.3 million and principal amortization payments of the PBF Rail Term Loan of ~~$5.0~~$3.3 million. Further, during the ~~nine~~six months ended ~~September~~June 30, 2017, we borrowed and repaid ~~$490.0~~$290.0 million under our ~~Revolving Loan~~asset-based revolving credit agreement resulting in no net change to amounts outstanding for the ~~nine~~six months ended ~~September~~June 30, 2017. ~~For~~

Credit Facility

PBF Holding Revolving Credit Facility

available to us 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 credit agreement) to make more funding available for working capital and other general corporate purposes. Borrowings under the 2018 Revolving Credit Agreement 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 credit agreement. The Applicable Margin ranges from 0.25% to 1.00% for Alternative Base Rate Loans and from 1.25% to 2.00% for Adjusted LIBOR Rate Loans, in each case depending on our corporate credit rating. In addition, an accordion feature allows for commitments of up to $3.5 billion. The LC Participation Fee ranges from 1.00% to 1.75% depending on the Company’s corporate credit rating and the Fronting Fee is capped at 0.25% (as described in “Note 5 - Debt” of our Notes to Condensed Consolidated Financial Statements). The 2018 Revolving Credit Agreement contains representations, warranties and covenants by us and the other borrowers, as well as customary events of default and indemnification obligations.

The 2018 Revolving Credit Agreement contains customary covenants and restrictions on our activities and our subsidiaries’ activities, including, but not limited to, limitations on the incurrence of additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions and prepayment of other debt, distributions, dividends and the repurchase of capital stock, transactions with affiliates and our ability to change the nature of our business or our fiscal year; all as defined in the credit agreement.

In addition, the 2018 Revolving Credit Agreement has a financial covenant which requires that if at any time Excess Availability, as defined in the credit agreement, is less than the greater of (i) 10% of the lesser of the then existing Borrowing Base and the then aggregate Revolving Commitments of the Lenders (the “Financial Covenant Testing Amount”), and (ii) $100.0 million, and until such time as Excess Availability is greater than the Financial Covenant Testing Amount and $100.0 million for a period of 12 or more consecutive days, we will not permit the Consolidated Fixed Charge Coverage Ratio, as defined in the credit agreement and determined as of the last day of the most recently completed quarter, to be less than 1.0 to 1.0.

Our obligations under the 2018 Revolving Credit Agreement are (a) guaranteed by each of our domestic operating subsidiaries that are not Excluded Subsidiaries (as defined in the credit agreement) and (b) secured by a lien on (i) PBF LLC’s equity interest in us and (ii) certain of our assets and certain assets of our subsidiary guarantors, including all deposit accounts (other than zero balance accounts, cash ~~provided by financing activities consisted primarily~~collateral accounts, trust accounts and/or payroll accounts, all of ~~proceeds~~which are excluded from the ~~Revolving Loan~~collateral), all accounts receivable, all hydrocarbon inventory (other than the intermediate and finished products owned by J. Aron pursuant to the Inventory Intermediation Agreements) and to the extent evidencing, governing, securing or otherwise related to the foregoing, all general intangibles, chattel paper, instruments, documents, letter of ~~$550.0 million, a contribution from our parent of $175.0 million,~~credit rights and supporting obligations; and all products and proceeds ~~from catalyst leases of $7.9 million and a net increase of $0.1 million in proceeds from affiliate notes payable partially offset by $92.5 million of distribution to members and repayments~~ of the ~~PBF Rail revolving credit facility of $11.5 million.~~foregoing.

Liquidity

As of ~~September~~June 30, ~~2017,~~2018, our total liquidity was approximately ~~$1,173.5~~$1,750.3 million, compared to total liquidity of approximately ~~$1,161.3~~$1,395.2 million as of December 31, ~~2016. Total~~2017. Our total liquidity is equal to the ~~sum~~amount of excess availability under our 2018 Revolving Credit Agreement, which includes our cash ~~and cash equivalents plus the estimated amount available under the Revolving Loan.~~

balance at June 30, 2018.

Working Capital

Our working capital at ~~September~~June 30, ~~2017~~2018 was ~~$1,106.1~~$1,579.3 million, consisting of ~~$3,403.3~~$4,072.6 million in total current assets and ~~$2,297.2~~$2,493.3 million in total current liabilities. Our working capital at December 31, ~~2016~~2017 was ~~$1,111.0~~$1,310.3 million, consisting of ~~$3,154.3~~$3,749.0 million in total current assets and ~~$2,043.3~~$2,438.7 million in total current liabilities.

Working capital has ~~decreased~~increased primarily as a result of positive earnings during the six months ended June 30, 2018, partially offset by capital expenditures, including turnaround ~~costs, partially offset by earnings during the nine months ended September 30, 2017.~~costs.

Capital Spending

Net capital spending was ~~$583.9~~$301.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, which primarily included turnaround costs, safety related enhancements and facility improvements at the refineries. We currently expect to spend an aggregate of approximately ~~$600.0~~$525.0 million to $550.0 million in net capital expenditures during the full year ~~2017~~2018 for facility improvements and refinery maintenance and ~~turnarounds, the majority of which have been completed as of September 30, 2017.~~turnarounds. Significant capital spending for the full year ~~2017 has included~~2018 includes turnarounds for the FCC ~~at our Delaware City refinery, several major process~~and alkylation units at our ~~Torrance~~Chalmette refinery, the coker at our Paulsboro refinery and ~~the Chalmette refinery’s crude~~several units at our Toledo and ~~ancillary units,~~Delaware City refineries, as well as expenditures to meet ~~Tier 3~~environmental and regulatory requirements.

Crude and Feedstock Supply Agreements

Certain of our purchases of crude oil under our agreements with foreign national oil companies require that we post letters of credit and arrange for shipment. We pay for the crude when invoiced, at which time the letters of credit are lifted. Our crude and feedstock supply agreements with PDVSA provide that the crude oil can be processed at any of our East and Gulf Coast refineries. ~~In connection with the Torrance Acquisition, we entered into a crude supply agreement with ExxonMobil to deliver~~We have not sourced crude oil under this arrangement since the third quarter of 2017 as PDVSA has suspended deliveries due to ~~our Torrance refinery.~~the parties’ inability to agree to mutually acceptable payment terms.

Inventory Intermediation Agreements

On May 4, 2017 and September 8, 2017, we and our subsidiaries, DCR and PRC, entered into amendments to the ~~A&R~~Inventory Intermediation Agreements with J. Aron, pursuant to which certain terms 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) the ~~A&R~~Inventory Intermediation Agreement by and among J. Aron, us and PRC relating to the Paulsboro refinery extends the term to December 31, 2019, which term may be further extended by mutual consent of the parties to December 31, 2020 and (ii) the ~~A&R~~Inventory Intermediation Agreement by and among J. Aron, us and DCR relating to the Delaware City refinery extends the term to July 1, 2019, which term may be further extended by mutual consent of the parties to July 1, 2020.

Pursuant to each ~~A&R~~Inventory Intermediation Agreement, J. Aron continues to purchase and hold title to certain of the intermediate and finished products (the “Products”) produced by the Paulsboro and Delaware City refineries (the “Refineries”), respectively, and delivered into tanks at the Refineries. Furthermore, J. Aron agrees to sell the Products back to the Refineries as the Products are discharged out of the Refineries’ tanks. J. Aron has the right to store the Products purchased in tanks under the ~~A&R~~Inventory Intermediation Agreements and will retain these storage rights for the term of the agreements. We continue to market and sell independently to third parties.

At ~~September~~June 30, ~~2017,~~2018, the LIFO value of intermediates and finished products owned by J. Aron included within inventory on our balance sheet was ~~$343.9~~$296.1 million. We accrue a corresponding liability for such intermediates and finished products.

Off-Balance Sheet Arrangements and Contractual Obligations and Commitments

We have no off-balance sheet arrangements as of ~~September~~June 30, ~~2017,~~2018, other than outstanding letters of credit in the amount of approximately ~~$326.8~~$601.7 million and operating leases.

Distribution Policy

On ~~November~~August 2, ~~2017~~2018 PBF Energy, PBF Holding’s indirect parent, announced a dividend of $0.30 per share on its outstanding Class A common stock. The dividend is payable on ~~November 29, 2017~~August 30, 2018 to PBF Energy Class A common stockholders of record at the close of business on ~~November 13, 2017.~~August 15, 2018. If necessary, PBF Holding will make a distribution of up to approximately ~~$34.2~~$34.5 million to PBF LLC, which in turn will make pro-rata distributions of $0.30 per unit to its members, including PBF Energy. PBF Energy will then use this distribution to fund the dividend payments to the stockholders of PBF Energy.

As of ~~September~~June 30, ~~2017,~~2018, we had ~~$1,173.5~~$1,750.3 million of unused borrowing availability, which includes our cash and cash equivalents of ~~$241.7~~$442.7 million, under ~~the~~our 2018 Revolving ~~Loan~~Credit Agreement to fund our operations, if necessary. Accordingly, as of ~~September~~June 30, ~~2017,~~2018, there was sufficient cash and cash equivalents and borrowing capacity under our credit facilities available to make distributions to PBF LLC, in order for PBF LLC, if necessary, 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.

Since, as described above, there was sufficient cash and cash equivalents and borrowing capacity as of ~~September~~June 30, ~~2017,~~2018, we would have been permitted under our debt agreements to make these distributions; however, our ability to continue to comply with our debt covenants is, to a significant degree, subject to our 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 PBF Energy’s intended distribution policy.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Commodity Price Risk

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

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

At ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, we had gross open commodity derivative contracts representing ~~45.7~~28.0 million barrels and ~~8.8~~24.3 million barrels, respectively, with an unrealized net loss of ~~$5.0~~$41.5 million and ~~$3.5~~$74.3 million, respectively. The open commodity derivative contracts as of ~~September~~June 30, ~~2017~~2018 expire at various times during ~~2017 and~~ 2018.

We carry inventories of crude oil, intermediates and refined products (“hydrocarbon inventories”) on our balance sheet, the values of which are subject to fluctuations in market prices. Our hydrocarbon inventories totaled approximately ~~35.1~~31.2 million barrels and ~~29.4~~30.1 million barrels at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively. The average cost of our hydrocarbon inventories was approximately ~~$77.17~~$79.92 and ~~$80.50~~$80.21 per barrel on a LIFO basis at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively, excluding the impact of LCM inventory adjustments of approximately ~~$498.0~~$54.8 million and ~~$596.0~~$300.5 million, respectively. If market prices of our inventory decline to a level below our average cost, we may be required to further write down the carrying value of our hydrocarbon inventories to market.

Our predominant variable operating cost is energy, which is comprised primarily of natural gas and electricity. We are therefore sensitive to movements in natural gas prices. Assuming normal operating conditions, we annually consume a total of approximately 68 million MMBTUs of natural gas amongst our five refineries as of ~~September~~June 30, ~~2017.~~2018. Accordingly, a $1.00 per MMBTU change in natural gas prices would increase or decrease our natural gas costs by approximately $68.0 million.

Compliance Program Price Risk

We are exposed to market risks related to the volatility in the price of 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 the EPA. To the degree we are unable to blend the required amount of biofuels to satisfy our RINs obligation, we must purchase RINs on the open market. To mitigate the impact of this risk on our results of operations and cash flows we may purchase RINs when the price of these instruments is deemed favorable.

In addition, we are exposed to risks associated with complying with federal and state legislative and regulatory measures to address greenhouse gas and other emissions. Requirements to reduce emissions could result in increased costs to operate and maintain our facilities as well as implement and manage new emission controls and programs put in place. For example, AB32 in California requires the state to reduce its GHG emissions to 1990 levels by 2020.

Interest Rate Risk

The maximum availability under our 2018 Revolving ~~Loan~~Credit Agreement is ~~$2.64~~$3.4 billion. Borrowings under the 2018 Revolving ~~Loan~~Credit Agreement 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 2018 Revolving ~~Loan.~~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 ~~$26.4~~$34.0 million annually.

In addition, the PBF Rail Term Loan, which bears interest at a variable rate, had an outstanding principal balance of ~~$30.0~~$25.0 million at ~~September~~June 30, ~~2017.~~2018. A 1.0% change in the interest rate would increase or decrease our interest expense by approximately ~~$0.3~~$0.25 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 ~~A&R~~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.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and ~~Procedures.~~Procedures

PBF Holding maintains a system of disclosure controls and procedures that is designed to provide reasonable assurance that information which is required to be disclosed is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to management in a timely manner. Under the supervision and with the participation of our management, including PBF Holding’s principal executive officer and the principal financial officer, we have evaluated the effectiveness of our system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of ~~September~~June 30, ~~2017.~~2018. Based on that evaluation, PBF Holding’s principal executive officer and the principal financial officer have concluded that PBF Holding’s disclosure controls and procedures are effective as of ~~September~~June 30, ~~2017.~~2018.

Changes in Internal Control Over Financial Reporting

Management has not identified any changes in PBF Holding’s internal controls over financial reporting during the quarter ended ~~September~~June 30, ~~2017~~2018 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

On July 24, 2013, the Delaware Department of Natural Resources and Environmental Control (“DNREC”) issued a Notice of Administrative Penalty Assessment and Secretary’s Order to Delaware City Refining for alleged air emission violations that occurred during the re-start of the refinery in 2011 and subsequent to the re-start. The penalty assessment seeks $460,200 in penalties and $69,030 in cost recovery for DNREC’s expenses associated with investigation of the incidents. We dispute the amount of the penalty assessment and allegations made in the order, and are in discussions with DNREC to resolve the assessment. It is possible that DNREC will assess a penalty in this matter but any such amount is not expected to be material to us.

AsOn April 7, 2015, DNREC issued a Notice of ~~November 1,~~Violation (W-15-SWD-01) alleging violations of the Delaware City refinery’s NPDES discharge permit during the period between December 12, 2014 through January 4, 2015. On March 5, 2018, a settlement agreement was finalized resolving the alleged violations contained in the April 7, 2015 Notice of Violation, as well as additional alleged violations occurring during the period between January 2014 through January 2018. Pursuant to this settlement agreement, the Delaware City refinery was either going to pay a penalty of $30,000 and fund an approved Environmental Improvement Project (“EIP”) in the amount of $88,000, or pay a penalty in the amount of $118,000. A cost recovery payment of $7,433 will be assessed in either case. The Delaware City refinery has elected to pay the $30,000 penalty and fund the EIP in the amount of $88,000. The Delaware City refinery has paid the penalty and the cost recovery payment and is awaiting DNREC approval to fund the EIP.

At the time we acquired the Chalmette ~~Refining, which~~refinery it was ~~in discussions with the Louisiana Department of Environmental Quality (“LDEQ”)~~subject to resolve self-reported deviations from refinery operations relating to certain Clean Air Act Title V permit conditions, limits and other requirements. LDEQ commenced an enforcement action against Chalmette Refining on November 14, 2014 by issuing a Consolidated Compliance Order and Notice of Potential Penalty (the “Order”) issued by the Louisiana Department of Environmental Quality (“LDEQ”) covering deviations from 2009 and 2010. Chalmette Refining and LDEQ subsequently entered into a dispute resolution agreement ~~the enforcement of which has been suspended while negotiations are ongoing, which may include~~to negotiate the resolution of deviations ~~outside~~on or before December 31, 2014. On May 18, 2018 the ~~periods covered~~Order was settled by ~~the Order. In February 2017, Chalmette Refining~~LDEQ and the ~~LDEQ met to resolve the issues under the Order, including the assessment of~~Chalmette refinery for an administrative penalty ~~against Chalmette Refining. Chalmette Refining~~of $741,000, of which $100,000 has been paid in cash and the LDEQ are negotiating a settlement agreement with administrative penalties of approximately $0.7 million. Once the settlement agreement is finalized, it is subject to circulated for notice and public comment for a 45-day period and must undergo a review by the Louisiana attorney general’s office.remainder has been or will be spent on beneficial environmental projects.

~~On December 23, 2016, the~~The Delaware City refinery received a Notice of Violation (“NOV”) from DNREC concerning a potential violation of the DNREC order authorizing the shipment of crude oil by barge from the refinery. The NOV alleges that DCR made shipments to locations other than the Paulsboro refinery in violation of the order and requests certain additional information. On February 7, 2017, DCR responded to the NOV. On March 10, 2017, DNREC issued an approximately $0.2 million fine inis appealing a Notice of Penalty Assessment and Secretary’s Order ~~to the Delaware City refinery for violating the~~issued in March 2017, including a $150,000 fine, alleging violation of a 2013 Secretary’s ~~Order.~~Order authorizing crude oil shipment by barge. DNREC determined that the Delaware City refinery had violated the order by failing to make timely and full disclosure to DNREC about the nature and extent of those shipments, and had misrepresented the number of shipments that went to other facilities. The ~~penalty assessment~~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, ~~DCR~~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 ~~hearing of~~Delaware City refinery made no admissions with respect to the ~~appeal is scheduled for February 2018. To~~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 ~~extent that the penalty and Secretary’s Order are upheld, there will not be a material adverse effect on the Company’s financial position, results of operations or cash flows.~~penalty.

On December 28, 2016, DNREC issued ~~a Coastal Zone Act permit (the “Ethanol Permit”)~~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 held a public hearing and dismissed the appeal, determining that the appellants did not have standing. The ~~final opinion and order of the Board was issued March 16, 2017. The~~ appellants filed an appeal of the Coastal Zone Board’s decision with the ~~Delaware~~ Superior Court on March 30, 2017. ~~The filing~~On January 19, 2018, the Superior Court rendered an Opinion regarding the decision of ~~briefs has been scheduled for October and November 2017.~~

~~On October 19, 2017,~~ the ~~Delaware City refinery received approval from DNREC~~Coastal Zone Board to dismiss the appeal of the Ethanol Permit for the ~~construction~~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 ~~operation~~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. During the hearing before the Coastal Zone Board on standing, one of the ~~ethanol marketing project~~appellants’ witnesses made a reference to ~~allow for a combined total loading of up to 10,000 bpd, on an annual average basis,~~the flammability of ethanol, without any indication of the significance of flammability/explosivity to specific concerns. Moreover, the appellants did not introduce at hearing any evidence of the relative flammability of ethanol as compared to other materials shipped to and from the refinery. However, the sole dissenting opinion from the Coastal Zone Board focused on ~~to marine vessels at~~ the ~~marine piers and~~flammability/explosivity issue, alleging that the ~~terminal truck loading rack, subject to certain operational and emissions limitations~~appellants’ testimony raised the issue as ~~well as other conditions. On~~a distinct basis for potential harms. Once the same date, Delaware City Logistics Company LLC received DNREC approval for the construction of (i) four additional loading arms for each of lanes 4, 10 and 11 for purposes of loading ethanol at its truck loading rack and (ii) a vapor vacuum control system for

~~loading lanes connected~~Board responds to the ~~existing vapor recovery unit located at~~remand, it will go back to the Superior Court to complete its ~~terminal in Delaware City. This approval is also subject to certain operational~~analysis and ~~emission limitations as well as other conditions.~~issue a decision.

~~On February 3, 2011,~~At the time we acquired the Toledo refinery, the EPA ~~sent a request for information~~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, the EPA issued an Amended Notice of Violation, and on September 20, 2013, the EPA issued a Notice of Violation 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 the 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 ~~Paulsboro refinery with respect~~extent the administrative penalty exceeds such amount, it is not expected to ~~compliance with EPA standards governing flaring. On July 13, 2017 the U.S. Department of Justice filed with the Court the motion~~be material to ~~enter the consent decree. On September 19, 2017, the Court approved the consent decree and in connection therewith the Paulsboro refinery has paid a penalty of $0.2 million.~~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~~notices of violations (“NOVs”) issued by regulatory agencies in various years before the Company’s 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”). ~~Following the closing of~~

Subsequent to the acquisition, further NOVs were issued by the SCAQMD, Cal/OSHA, the City of Torrance, and the Torrance Fire Department. No settlement or penalty demand in excess of $0.1 million has been made or received with respect to these notices. It is reasonably possible that SCAQMD, Cal/OSHA and/or the City of Torrance ~~will assess penalties~~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. 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. In April 2017, EPA referred the RCRA preliminary findings to DTSC for final resolution. On March 1, 2018, we received a notice of intent to sue from Environmental Integrity Project, on behalf of Environment California, under RCRA with respect to the alleged RCRA violations from December 2016 EPA’s and DTSC’s inspection. On March 2, 2018, DTSC issued an order to correct alleged RCRA violations relating to the accumulation of oil bearing materials in roll off bins during 2016 and 2017. 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. Following this settlement, in June 2018, DTSC referred the remaining alleged RCRA violations from EPA’s and DTSC’s December 2016 inspection to the California Attorney General for final resolution. The Torrance refinery and the California Attorney General are in discussions to resolve these alleged remaining RCRA violations. Other than the $150,000 DTSC administrative penalty, no other ~~matters~~settlement or penalty demands have been received to date with respect to any of the other NOVs, preliminary findings, or order that are in excess of ~~$0.1 million~~$100,000. As the ultimate outcomes are uncertain, we cannot currently estimate the final amount or timing of their resolution but any such amount is not expected to behave a material ~~to us,~~impact on our financial position, results of operations or cash flows, individually or in the aggregate.

On September 2, 2011, prior to our ownership of the Chalmette refinery, the plaintiff in Vincent Caruso, etal. v. Chalmette Refining, L.L.C., filed an action on behalf of himself and potentially several thousand other Louisiana residents who live or own property in St. Bernard Parish and Orleans Parish and whose property was allegedly contaminated and who allegedly suffered any ~~personal or~~ property damages and clean-up costs as a result of an emission of spent catalyst ~~sulfur dioxide and hydrogen sulfide~~ from the Chalmette refinery on September 6, 2010. Plaintiffs claim to have suffered injuries, symptoms, and property damage as a result of the ~~release.~~release, although the trial court has limited recovery to property damages and clean-up expenses. Plaintiffs seek to recover unspecified damages, interest and costs. In ~~August 2015,~~2016, there was a mini-trial for four plaintiffs for property damage relating to home and vehicle ~~cleaning. On April 12, 2016,~~cleaning and the trial court rendered judgment ~~limiting~~awarding damages ~~ranging from $100~~related to ~~$500~~the cost for home cleaning and ~~$25 to $75 for~~ vehicle cleaning to the four plaintiffs. The trial court found Chalmette Refining and co-defendant Eaton Corporation (“Eaton”), to be solidarily liable for the damages. Chalmette Refining and Eaton filed an appeal in August 2016 of the judgment on the ~~mini-trial. On~~mini-trial and on June 28, 2017, the appellate court unanimously reversed the judgment awarding damages to the ~~plaintiffs. On July 12, 2017, the~~ plaintiffs, ~~filed~~and plaintiffs request for a rehearing ~~of the appellate court judgment, which~~ was ~~denied on July 31, 2017.~~later denied. As a result of the appellate court’s judgment, the potential amount of the claims is not determinable. The trial court has set a new mini-trial of two plaintiffs for November 2018. Depending upon the ultimate class size, ~~and~~ the nature of the claims, or the results from the forthcoming mini-trial, the outcome may have a material adverse effect on our financial position, results of operations, or cash flows.

On ~~February 14, 2017,~~December 5, 1990, prior to our ownership of the Chalmette refinery, the plaintiff in Adam ~~Trotter~~Thomas, et al. v. ~~ExxonMobil Corp~~Exxon Mobil Corporation and Chalmette Refining, L.L.C.~~., ExxonMobil Oil Corp., ExxonMobil Refining and Supply Company, et. al.~~, 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 ~~civil~~result of more than 100 separate flaring events that occurred between 1989 and 2007. This litigation is proceeding as a mass action ~~against us in~~with individually named plaintiffs as a result of a 2008 trial court decision, affirmed by the ~~Superior Court~~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 ~~State~~releases. Plaintiffs seek to recover unspecified compensatory and punitive damages, interest, and costs. Although no trial date has been set by the state trial court, the parties are preparing for a mini-trial of ~~California, County~~up to 10 plaintiffs, relating to 5 separate flaring events that occurred between 2002 and 2007. Because of ~~Los Angeles, Southwest District, claiming public nuisance, battery, a violation~~the number of civil rights under 42 U.S.C. §1983, intentional infliction of emotional distress, negligence and strict liability in tort and injuries and symptoms resulting from the February 18, 2015 electrostatic precipitator (“ESP”) explosion at the Torrance Refinery which was then owned and operated by Exxon. The City of Torrancepotential claimants is unknown and the ~~SCAQMD are also named as defendants in~~differing events underlying the ~~lawsuit. On September 29, 2017,~~claims, the ~~court granted our motion to dismiss as well as~~potential amount of the ~~SCAQMD’s motion to dismiss with leave for the plaintiff to amend and denied plaintiff’s motion for a preliminary injunction. We believe the ultimate~~claims is not determinable. It is possible that an adverse outcome ~~of this matter will not~~may have a material ~~impact~~adverse effect on our financial position, results of operations, or cash flows.

On February 17, 2017, in Arnold Goldstein, et al. v. Exxon Mobil Corporation, et al., ~~PBF Energy Inc.~~we and PBF Energy Company LLC, and our subsidiaries, PBF Energy Western Region LLC and Torrance Refining

Company LLC and the manager of our Torrance refinery along with Exxon Mobil Corporation were named as defendants in a class action and representative action complaint filed on behalf of Arnold Goldstein, John Covas, Gisela Janette La Bella and others similarly situated. The complaint was filed in the Superior Court of the State of California, County of Los Angeles and alleges negligence, strict liability, ultrahazardous activity, a continuing private nuisance, a permanent private nuisance, a continuing public nuisance, a permanent public nuisance and trespass resulting from the February 18, 2015 electrostatic precipitator (“ESP”) explosion at the Torrance refinery which was then owned and operated by Exxon. 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, Exxon has retained responsibility for any liabilities that would arise from the lawsuit pursuant to the agreement relating to the acquisition of the Torrance refinery. On July 2, 2018, the Court granted leave to plaintiffs’ to file a Second Amended Complaint alleging groundwater contamination. With the filing of the Second Amended Complaint, Plaintiffs’ added an additional plaintiff. This matter is in the initial stages of discovery and we cannot currently estimate the amount or the timing of its resolution. We presently believe the outcome will not have a material impact on our financial position, results of operations or cash flows.

We are subject to obligations to purchase RINs. On February 15, 2017, we received ~~another~~ notification that EPA records indicated that wePBF Holding used potentially invalid RINs that were in fact verified under the 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 the 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 the 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.

As of January 1, 2011, we are required to comply with the EPA’s Control of Hazardous Air Pollutants From Mobile Sources, or MSAT2, regulations on gasoline that impose reductions in the benzene content of our produced gasoline. We purchase benzene credits to meet these requirements. Our planned capital projects will reduce the amount of benzene credits that we need to purchase. In addition, the renewable fuel standards mandate the blending of prescribed percentages of renewable fuels (e.g., ethanol and biofuels) into our produced gasoline and diesel. These new requirements, other requirements of the CAA and other presently existing or future environmental regulations may cause us to make substantial capital expenditures as well as the purchase of credits at significant cost, to enable our refineries to produce products that meet applicable requirements.

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

Item 6. Exhibits

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

EXHIBIT INDEX



Exhibit Number		Description

10.1†		~~Amendment to the Inventory Intermediation~~Senior Secured Revolving Credit Agreement dated as of ~~September 8, 2017, among J. Aron & Company, PBF Holding Company LLC and Paulsboro Refining Company LLC~~May 2, 2018 (incorporated by reference to Exhibit 10.1 offiled with PBF Energy Inc.’s Current Report on Form ~~8-K/A~~8-K dated May 7, 2018 (File No. 001-35764) ~~filed on September 18, 2017).~~)

~~10.2~~10.2**		~~Amendment to the Inventory Intermediation Agreement dated as of September 8,~~PBF Energy Inc. Amended and Restated 2017 ~~among J. Aron & Company, PBF Holding Company LLC and Delaware City Refining Company LLC~~Equity Incentive Plan (incorporated by reference to ~~Exhibit 10.2 of~~Appendix A to PBF Energy Inc.’s ~~Current Report~~Definitive Proxy Statement on ~~Form 8-K/A~~Schedule 14A filed on April 13, 2018 (File No. 001-35764) ~~filed on September 18, 2017).~~)

31.1*		Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Holding Company LLC pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Erik Young, Chief Financial Officer of PBF Holding 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 Holding Company LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2* (1)		Certification of Erik Young, Chief Financial Officer of PBF Holding Company LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document.

101.SCH		XBRL Taxonomy Extension Schema Document.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

——————————



*	Filed herewith.
†**	~~Confidential treatment has been granted by the SEC as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission.~~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.

Signatures

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



		PBF Holding Company LLC

Date	~~November~~August 7, ~~2017~~2018		By:	/s/ Erik Young
				Erik Young Senior Vice President, Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

		PBF Finance Corporation

Date	~~November~~August 7, ~~2017~~2018		By:	/s/ Erik Young
				Erik Young Senior Vice President, Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

~~EXHIBIT INDEX~~



~~Exhibit~~ ~~Number~~		~~Description~~

~~10.1~~†		Amendment to the Inventory Intermediation Agreement dated as of September 8, 2017, among J. Aron & Company, PBF Holding Company LLC and Paulsboro Refining Company LLC (incorporated by reference to Exhibit 10.1 of PBF Energy Inc.’s Current Report on Form 8-K/A (File No. 001-35764) filed on September 18, 2017).

~~10.2~~		Amendment to the Inventory Intermediation Agreement dated as of September 8, 2017, among J. Aron & Company, PBF Holding Company LLC and Delaware City Refining Company LLC (incorporated by reference to Exhibit 10.2 of PBF Energy Inc.’s Current Report on Form 8-K/A (File No. 001-35764) filed on September 18, 2017).

31.1*		~~Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Holding Company LLC pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

31.2*		~~Certification of Erik Young, Chief Financial Officer of PBF Holding 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 Holding Company LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

32.2* ~~(1)~~		~~Certification of Erik Young, Chief Financial Officer of PBF Holding Company LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~101.INS~~		~~XBRL Instance Document.~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema Document.~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase Document.~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document.~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase Document.~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase Document.~~

~~——————————~~



*	~~Filed herewith.~~
†	~~Confidential treatment has been granted by the SEC as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission.~~
~~(1)~~	~~This exhibit should not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.~~



	Purchase Price
Gross purchase price	$	537,500
Working capital	450,582
Post close purchase price adjustments	(16,150		)
Total consideration	$	971,932



	Fair Value Allocation
Inventories	$	404,542
Prepaid expenses and other current assets	982
Property, plant and equipment	704,633
Deferred charges and other assets, net	68,053
Accounts payable	(2,688		)
Accrued expenses	(64,137		)
Other long-term liabilities	(139,453		)
Fair value of net assets acquired	$	971,932



	Nine Months Ended September 30, 2016
Pro forma revenues	$	12,243,582
Pro forma net loss attributable to PBF Holding Company LLC	$	(60,908	)



	Three Months Ended September 30, 2017
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total

Revenues	$	5,410,245		$	223,582		$	536,386		$	(694,397	)	$	5,475,816

Cost and expenses:
Cost of products and other	4,483,164			85,031			538,011			(694,397		)	4,411,809
Operating expenses (excluding depreciation and amortization expense as reflected below)	289			380,951			8,351			—			389,591
Depreciation and amortization expense	—			68,419			1,919			—			70,338
Cost of sales	4,483,453			534,401			548,281			(694,397		)	4,871,738
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	49,880			4,959			(146		)	—			54,693
Depreciation and amortization expense	2,572			—			—			—			2,572
Equity income in investee	—			—			(3,799		)	—			(3,799		)
Loss on sale of assets	—			28			—			—			28
Total cost and expenses	4,535,905			539,388			544,336			(694,397		)	4,925,232

Income (loss) from operations	874,340			(315,806		)	(7,950		)	—			550,584

Other income (expenses):
Equity in earnings (loss) of subsidiaries	(319,568		)	2,467			—			317,101			—
Change in fair value of catalyst leases	—			473			—			—			473
Debt extinguishment costs	—			—			—			—			—
Interest expense, net	(28,692		)	(305		)	(272		)	—			(29,269		)
Income (loss) before income taxes	526,080			(313,171		)	(8,222		)	317,101			521,788
Income tax benefit	—			—			(4,292		)	—			(4,292		)
Net income (loss)	526,080			(313,171		)	(3,930		)	317,101			526,080
Less: net loss attributable to noncontrolling interests	(6		)	(6		)	—			6			(6		)
Net income (loss) attributable to PBF Holding Company LLC	$	526,086		$	(313,165	)	$	(3,930	)	$	317,095		$	526,086

Comprehensive income (loss) attributable to PBF Holding Company LLC	$	526,373		$	(313,165	)	$	(3,930	)	$	317,095		$	526,373



	Nine Months Ended September 30, 2017
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total

Revenues	$	15,064,488		$	983,917		$	1,578,553		$	(2,387,693	)	$	15,239,265

Cost and expenses:
Cost of products and other	13,547,358			615,093			1,551,638			(2,387,693		)	13,326,396
Operating expenses (excluding depreciation and amortization expense as reflected below)	(42		)	1,200,370			24,686			—			1,225,014
Depreciation and amortization expense	—			175,543			5,695			—			181,238
Cost of sales	13,547,316			1,991,006			1,582,019			(2,387,693		)	14,732,648
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	112,418			18,410			(736		)	—			130,092
Depreciation and amortization expense	10,355			—			—			—			10,355
Equity income in investee	—			—			(11,218		)	—			(11,218		)
Loss on sale of assets	—			940			—			—			940
Total cost and expenses	13,670,089			2,010,356			1,570,065			(2,387,693		)	14,862,817

Income (loss) from operations	1,394,399			(1,026,439		)	8,488			—			376,448

Other income (expenses):
Equity in earnings (loss) of subsidiaries	(1,022,866		)	5,802			—			1,017,064			—
Change in fair value of catalyst leases				(1,011		)	—			—			(1,011		)
Debt extinguishment costs	(25,451		)	—			—			—			(25,451		)
Interest expense, net	(90,918		)	(1,143		)	(721		)	—			(92,782		)
Income (loss) before income taxes	255,164			(1,022,791		)	7,767			1,017,064			257,204
Income tax expense	—			—			2,040			—			2,040
Net income (loss)	255,164			(1,022,791		)	5,727			1,017,064			255,164
Less: net income attributable to noncontrolling interests	374			374			—			(374		)	374
Net income (loss) attributable to PBF Holding Company LLC	$	254,790		$	(1,023,165	)	$	5,727		$	1,017,438		$	254,790

Comprehensive income (loss) attributable to PBF Holding Company LLC	$	255,728		$	(1,023,165	)	$	5,727		$	1,017,438		$	255,728