Edgar Filing: PBF Logistics LP

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)



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

For the fiscal year ended: December 31, 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: 001-36446

PBF LOGISTICS LP

(Exact name of registrant as specified in its charter)



DELAWARE		35-2470286
(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)

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



Title of Each Class		Name of Each Exchange on Which Registered
Common Units Representing Limited Partnership Interest		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

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. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

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 o	Accelerated filer þ	Non-accelerated filer o	Smaller reporting company o Emerging growth company þ

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. þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of June 30, 2018, the aggregate market value of common units held by non-affiliates of the registrant was approximately $487.0 million based upon the closing price of such units on the New York Stock Exchange on such date. Common units held by executive officers and directors of the registrant and its affiliates are not included in the computation. The registrant had 45,348,821 common units outstanding at February 19, 2019.

DOCUMENTS INCORPORATED BY REFERENCE: None

PBF LOGISTICS LP

TABLE OF CONTENTS



PART I

	Item1.	Business	4
	Item 1A.	Risk Factors	16
	Item 1B.	Unresolved Staff Comments	50
	Item 2.	Properties	50
	Item 3.	Legal Proceedings	50
	Item 4.	Mine Safety Disclosures	50

PART II
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	51
	Item 6.	Selected Financial Data	53
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	55
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	81
	Item 8.	Financial Statements and Supplementary Data	82
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	133
	Item 9A.	Controls and Procedures	133
	Item 9B.	Other Information	133

PART III

	Item 10.	Directors, Executive Officers and Corporate Governance	134
	Item 11.	Executive Compensation	139
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters	147
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	150
	Item 14.	Principal Accountant Fees and Services	153

PART IV
	Item 15.	Exhibits and Financial Statement Schedules	154
SIGNATURES

This Annual Report on Form 10-K (including documents incorporated by reference herein) (this “Form 10-K”) contains statements with respect to our expectations or beliefs as to future events. These types of statements are “forward-looking” and subject to uncertainties. See “Important Information Regarding Forward-Looking Statements” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Unless the context otherwise requires, references in this Form 10-K to “PBF Logistics LP,” “PBFX,” the “Partnership,” “we,” “us” or “our” may refer to PBF Logistics LP, one or more of its consolidated subsidiaries or all of them taken as a whole.

Glossary of selected terms

Unless otherwise noted or indicated by context, the following terms used in this Form 10-K have the following meanings:

“Aframax” refers a medium-sized crude tanker with a dead weight tonnage between 80,000 and 120,000.

“API” refers to the American Petroleum Institute.

“ASU” refers to Accounting Standards Update issued by the Financial Accounting Standards Board.

“barrel” refers to a common unit of measure in the oil industry, which equates to 42 gallons.

“bpd” refers to an abbreviation for barrels per day.

“CAA” refers to the Clean Air Act.

“CPI-U” refers to the U.S. Consumer Price Index for All Urban Consumers.

“CZA” refers to the Delaware Coastal Zone Act.

“Dated Brent” refers to Brent blend oil, a light, sweet North Sea crude oil, characterized by an API gravity of 38° and a sulfur content of approximately 0.4 weight percent that is used as a benchmark for other crude oils.

“distillates” refers primarily to diesel, heating oil, kerosene and jet fuel.

“DNREC” refers to the Delaware Department of Natural Resources and Environmental Control.

“DOT” refers to the U.S. Department of Transportation.

“dth/d” refers to an abbreviation for dekatherms per day.

“EPA” refers to the U.S. Environmental Protection Agency.

“Ethanol Permit” refers to a Coastal Zone Act permit for ethanol.

“ethanol” refers to a clear, colorless, flammable oxygenated liquid. Ethanol is typically produced chemically from ethylene or biologically from fermentation of various sugars from carbohydrates found in agricultural crops. It is used in the U.S. as a gasoline octane enhancer and oxygenate.

“FASB” refers to the Financial Accounting Standards Board which develops U.S. generally accepted accounting principles.

“FERC” refers to the Federal Energy Regulation Commission.

“FRA” refers to the Federal Railroad Administration.

“GAAP” refers to the U.S. generally accepted accounting principles developed by the Financial Accounting Standards Board for nongovernmental entities.

“GHG” refers to the greenhouse gas carbon dioxide.

“IDRs” refers to incentive distribution rights.

“IPO” refers to PBF Logistics LP’s initial public offering completed on May 14, 2014.

“IOW” refers to the Independent Oil Workers union.

“LPG” refers to liquefied petroleum gas.

“MLP” refers to master limited partnership.

“MVCs” refers to minimum volume commitments on certain commercial contracts.

“NYSE” refers to the New York Stock Exchange.

“OPEC” refers to the Organization of Petroleum Exporting Countries.

“OSHA” refers to the Occupational Safety and Health Administration.

“PPI” refers to the U.S. Producer Price Index.

“refined products” refers to petroleum products, such as gasoline, diesel and jet fuel, that are produced by a refinery.

“Savage” refers to the Savage Services Corporation.

“SEC” refers to the U.S. Securities and Exchange Commission.

“throughput” refers to the volume processed through a unit or refinery.

“U.S.” refers to the United States of America.

“USW” refers to the United Steel Workers union.

“WCS” refers to Western Canadian Select, a heavy, sour crude oil blend typically characterized by API gravity between 20° and 22° and a sulfur content of approximately 3.5 weight percent that is used as a benchmark for heavy Western Canadian crude oil.

“WTI” refers to West Texas Intermediate crude oil, a light, sweet crude oil, typically characterized by API gravity between 38° and 40° and a sulfur content of approximately 0.3 weight percent that is used as a benchmark for other crude oils.

PART I

ITEM 1. BUSINESS

In this Form 10-K, we make certain forward-looking statements, including statements regarding our plans, strategies, objectives, expectations, intentions, and resources. You should read our forward-looking statements together with our disclosures under the heading: “Important Information Regarding Forward-Looking Statements.” When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements set forth in this Form 10-K under “Risk Factors” in Item 1A.

Available Information

Our website address is www.pbflogistics.com. Information contained on our website is not part of this Form 10-K. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any other materials filed with (or furnished to) the SEC by us are available on our website (under “SEC Filings” in the “Financial Information” section) free of charge, soon after we file or furnish such material. Also available on our website (in the “Governance” section), we post our corporate governance guidelines, code of business conduct and ethics, and the charters of the committees of the board of directors of our general partner. These documents are available free of charge in print to any unitholder that makes a written request to the Secretary, PBF Logistics LP, One Sylvan Way, Second Floor, Parsippany, New Jersey 07054.

Overview

We are a fee-based, growth-oriented, Delaware master limited partnership formed in February 2013 by subsidiaries of PBF Energy Inc. and its indirect subsidiary, PBF Logistics GP LLC (“PBF GP”), our general partner, to own or lease, operate, develop and acquire crude oil and refined petroleum products terminals, pipelines, storage facilities and similar logistics assets. PBF GP is our general partner and is wholly-owned by PBF Energy Company LLC (“PBF LLC”). PBF Energy Inc. is the sole managing member of PBF LLC and as of December 31, 2018 owned 99.0% of the total economic interest in PBF LLC. We refer you to “Organizational Structure” below for an illustration of our relationship with PBF Energy Inc. Unless the context otherwise requires, references in this report to “PBF Energy” refer collectively to PBF Energy Inc. and its subsidiaries, other than PBFX and its subsidiaries, and our general partner. PBFX’s common units trade on the NYSE under the symbol “PBFX,” and as of December 31, 2018, PBF LLC held a 44.0% limited partner interest in us, a non-economic general partner interest and owned all of the IDRs, with the remaining 56.0% limited partner interest held by public unitholders. On February 13, 2019, we entered into an Equity Restructuring Agreement (the “IDR Restructuring Agreement”) with PBF LLC and PBF GP, pursuant to which the IDRs held by PBF LLC will be canceled and converted into newly issued PBFX common units.

Our business includes the assets, liabilities and results of operations of certain crude oil, refined products, natural gas and intermediates transportation, terminaling and storage assets, which include assets previously operated and owned by subsidiaries of PBF Holding Company LLC (“PBF Holding”) and PBF Holding’s previously held subsidiaries.

Business Developments

Knoxville Terminals Purchase

On April 16, 2018, our wholly-owned subsidiary, PBF Logistics Products Terminals LLC (“PLPT”), completed the purchase of two refined product terminals located in Knoxville, Tennessee, which include product tanks with a total shell capacity of approximately 0.5 million barrels, pipeline connections to the Colonial Pipeline Company and Plantation Pipe Line Company pipeline systems and two truck loading facilities with nine loading bays (the “Knoxville Terminals”) from Cummins Terminals, Inc. (“Cummins”) for total cash consideration of $58.0

million, excluding working capital adjustments (the “Knoxville Terminals Purchase”). The transaction was financed through a combination of cash on hand and borrowings under the Revolving Credit Facility, as defined below. This acquisition was accounted for as a business combination under GAAP. Refer to Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further discussion regarding the Knoxville Terminals Purchase.

East Coast Storage Assets Acquisition

On July 16, 2018, we entered into an agreement with Crown Point International, LLC (“Crown Point”) to purchase its wholly-owned subsidiary, CPI Operations LLC (“CPI”), whose assets include a storage facility with approximately four million barrels of multi-use storage capacity, an Aframax-capable marine facility, a rail facility, a truck terminal, equipment, contracts and certain other idled assets located on the Delaware River near Paulsboro, New Jersey (the “East Coast Storage Assets”), for total consideration of $127.0 million, including working capital and the Contingent Consideration, as defined below (the “East Coast Storage Assets Acquisition”), comprised of an initial payment at closing of $75.0 million with a remaining balance of $32.0 million being payable one year after closing. Additionally, the East Coast Storage Assets Acquisition includes an earn-out provision related to an existing commercial agreement with a third party, based on the future results of restarting certain of the acquired idled assets (the “Contingent Consideration”). The acquisition date estimated fair value of the Contingent Consideration payable was $21.1 million. The East Coast Storage Assets Acquisition closed on October 1, 2018. The transaction was financed through a combination of cash on hand and borrowings under the Revolving Credit Facility. This acquisition was accounted for as a business combination under GAAP. Refer to Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further discussion regarding the East Coast Storage Assets Acquisition and the Contingent Consideration.

Registered Direct Offering

On July 16, 2018, we entered into a common unit purchase agreement with certain funds managed by Tortoise Capital Advisors, L.L.C. providing for the issuance and sale in a registered direct offering (the “Registered Direct Offering”) of an aggregate of 1,775,750 common units representing limited partner interests in us for gross proceeds of $35.0 million. The Registered Direct Offering closed on July 30, 2018.

Development Assets Acquisition

On July 16, 2018, we entered into four contribution agreements with PBF LLC pursuant to which PBF Energy contributed to us certain of its subsidiaries (the “Development Assets Contribution Agreements”). Pursuant to the Development Assets Contribution Agreements, we acquired from PBF LLC all of the issued and outstanding limited liability company interests of Toledo Rail Logistics Company LLC (“TRLC”), whose assets consist of an unloading and loading rail facility located at PBF Holding’s Toledo Refinery (the “Toledo Rail Products Facility”); Chalmette Logistics Company LLC (“CLC”), whose assets consist of a truck loading rack facility (the “Chalmette Truck Rack”) and a rail yard facility (the “Chalmette Rosin Yard”), both of which are located at PBF Holding’s Chalmette Refinery; Paulsboro Terminaling Company LLC (“PTC”), whose assets consist of a lube oil terminal facility located at PBF Holding’s Paulsboro Refinery (the “Paulsboro Lube Oil Terminal”); and DCR Storage and Loading Company LLC (“DSLC”), whose assets consist of an ethanol storage facility located at PBF Holding’s Delaware City Refinery (the “Delaware Ethanol Storage Facility” and collectively with the Toledo Rail Products Facility, the Chalmette Truck Rack, the Chalmette Rosin Yard and the Paulsboro Lube Oil Terminal, the “Development Assets”). Total consideration for the acquisition of the Development Assets was $31.6 million, consisting of 1,494,134 common units representing limited partner interests in us issued to PBF LLC (the “Development Assets Acquisition”). The Development Assets Acquisition closed on July 31, 2018 and was accounted for as a transfer of assets between entities under common control under GAAP. Refer to Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further discussion regarding the Development Assets Acquisition.

Revolving Credit Facility

On July 30, 2018, we entered into a $500.0 million amended and restated revolving credit facility (as amended, the “Revolving Credit Facility”) with Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders. The Revolving Credit Facility amended and restated our five-year $360.0 million revolving credit facility entered into in connection with the closing of the IPO. Among other things, the Revolving Credit Facility increased the maximum commitment available to us from $360.0 million to $500.0 million and extended the maturity date to July 2023. The commitment fees on the unused portion, the interest rate on advances and the fees for letters of credit are consistent with our original five-year, $360.0 million revolving credit facility. The Revolving Credit Facility contains representations, warranties and covenants by us, as well as customary events of default and indemnification obligations that are consistent with, or more favorable to us, than those in the original facility. Refer to Note 7 “Debt” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further discussion regarding the Revolving Credit Facility.

IDR Restructuring Agreement

On February 13, 2019, we entered into the IDR Restructuring Agreement with PBF LLC and PBF GP, pursuant to which the IDRs held by PBF LLC will be canceled and converted into 10,000,000 newly issued PBFX common units (the “IDR Restructuring”). The IDR Restructuring is expected to close on February 28, 2019. Subsequent to the close of the IDR Restructuring, no distributions will be made to PBF LLC with respect to the IDRs and the newly issued common units will be entitled to normal distributions.

Rail Agreement Amendments

On February 13, 2019, we amended the existing Amended and Restated Delaware City Rail Terminaling Services Agreement between Delaware City Terminaling Company LLC and PBF Holding (as amended, the “Amended and Restated Delaware City Rail Terminaling Services Agreement”) for the inclusion of services through certain rail infrastructure at the East Coast Storage Assets (the “East Coast Rail Assets”). We also entered into a new Terminaling Services Agreement, between Delaware City Terminaling Company and PBF Holding (the “Terminaling Services Agreement”), with a four-year term starting in 2022 subsequent to the expiration of the Amended and Restated Delaware City Rail Terminaling Services Agreement, related to the DCR Rail Facility (as defined in the table below) and the East Coast Rail Assets, which will reduce the MVC to 95,000 bpd and includes additional services to be provided by us as operator of facilities owned by PBF Holding’s subsidiaries.

Principles of Combination and Consolidation and Basis of Presentation

In connection with, and subsequent to, the IPO, we have acquired certain assets from PBF LLC (collectively referred to as the “Contributed Assets”). Such acquisitions completed subsequent to the IPO were made through a series of drop-down transactions with PBF LLC (collectively referred to as the “Acquisitions from PBF”). The financial statements presented in “Item 6. Selected Financial Data” in this Form 10-K include the consolidated financial results of PBF MLP Predecessor, our predecessor for accounting purposes (our “Predecessor”), for periods presented through May 13, 2014, and our consolidated financial results for the period beginning May 14, 2014, the date of the IPO. The balance sheet as of December 31, 2018 and 2017 presents solely our consolidated financial position. We recorded the Acquisitions from PBF at PBF Energy’s historical book value, as the Acquisitions from PBF were treated as a reorganization of entities under common control. We have retrospectively adjusted the financial information of us and our Predecessor contained herein to include the historical results of the Acquisitions from PBF prior to the effective date of each transaction with the exception of the Delaware Ethanol Storage Facility, which is considered an asset purchase.

below) and the Paulsboro Lube Oil Terminal. In connection with the closing of the IPO and each of the Acquisitions from PBF, we entered into commercial and service agreements with subsidiaries of PBF Energy under which we operate our assets for the purpose of generating fee-based revenues. We receive, handle and transfer crude oil, refined products and natural gas from sources located throughout the U.S. and Canada and store crude oil, refined products and intermediates for PBF Energy in support of its refineries. In addition, we generate third-party revenue from certain of our assets, including the Knoxville Terminals and the East Coast Storage Assets subsequent to our acquisitions in 2018 and the Paulsboro Lube Oil Terminal, which also generated revenue for our Predecessor prior to our acquisition.

Since we do not own any of the crude oil, refined products or natural gas that we handle nor engage in the trading of crude oil, refined products or natural gas, we have minimal direct exposure to risks associated with commodity price fluctuations. However, these risks indirectly influence our activities and results of operations over the long term through their effects on our customer’s operations. A substantial majority of our revenue is derived from PBF Energy under various long-term, fee-based commercial agreements that generally include MVCs. Refer to Note 12 “Related Party Transactions” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further discussion regarding the commercial agreements with PBF Holding.

The Partnership is not a taxable entity for federal income tax purposes or the income taxes of those states that follow the federal income tax treatment of partnerships. Instead, for purposes of these income taxes, each partner of the Partnership is required to take into account his, her or its share of items of income, gain, loss and deduction in computing his, her or its federal and state income tax liabilities, regardless of whether cash distributions are made to such partner by the Partnership. The taxable income reportable to each partner takes into account differences between the tax basis and fair market value of PBFX’s assets, the acquisition price of such partner’s units and the taxable income allocation requirements under the Second Amended and Restated Agreement of Limited Partnership of PBF Logistics LP (as amended, our “partnership agreement”).

Organizational Structure

The following simplified diagram depicts our organizational and ownership structure as of December 31, 2018:

Assets and Operations

We prepare segment information on the same basis that we review financial information for operational decision-making purposes. Currently, our business consists of two operating segments: (i) our transportation and terminaling segment and (ii) our storage segment. Additional segment and financial information is contained in our segment results included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 13 “Segment Information” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K.

The following map details the locations of PBF Holding’s refineries and the location of our assets (each as previously defined, or as defined in the table below):

The following table details our assets (as defined in the table below), including the available throughput or storage capacity per asset:



Asset	Capacity	Products Handled	Location Supported
Transportation and Terminaling
DCR Rail Facility (a)(b)(c)	various throughput capacity (a)	Crude	Delaware City and Paulsboro refineries
Toledo Truck Terminal (b)(c)	22,500 bpd unloading capacity	Crude	Toledo Refinery
Toledo Storage Facility - propane loading facility (c)	11,000 bpd throughput capacity	Propane	Toledo Refinery
DCR Products Pipeline (c)(d)	125,000 bpd pipeline capacity	Refined products	Delaware City Refinery
DCR Truck Rack (c)(d)	76,000 bpd throughput capacity	Gasoline, distillates and LPGs	Delaware City Refinery
East Coast Terminals	various throughput capacity and approximately 4.2 million barrel aggregate shell capacity	Refined products	Delaware City and Paulsboro refineries
Torrance Valley Pipeline (c)	110,000 bpd pipeline capacity	Crude	Torrance Refinery
Paulsboro Natural Gas Pipeline (c)	60,000 dth/d pipeline capacity	Natural gas	Paulsboro Refinery
Toledo Products Terminal	various throughput capacity and 110,000 barrel aggregate shell capacity	Refined products	Toledo Refinery
Knoxville Terminals	various throughput capacity and 520,000 barrel aggregate shell capacity	Gasoline, distillates and LPGs	Chalmette Refinery
Toledo Rail Products Facility (c)	16,000 bpd loading capacity	Crude, LPGs, gasoline and distillates	Toledo Refinery
Chalmette Truck Rack (c)	20,000 bpd loading capacity	Gasoline and distillates	Chalmette Refinery
Chalmette Rosin Yard (c)	17,000 bpd unloading capacity	LPGs	Chalmette Refinery
Paulsboro Lube Oil Terminal (c)	various throughput capacity and 229,000 barrel aggregate shell capacity	Lubes	Paulsboro Refinery
Delaware Ethanol Storage Facility (c)	various throughput capacity and 100,000 barrel aggregate shell capacity	Ethanol	Delaware Refinery

Storage
Toledo Storage Facility (c)	approximately 3.9 million barrel aggregate shell capacity (e)	Crude, refined products and intermediates	Toledo Refinery
Chalmette Storage Tank	625,000 barrel shell capacity	Crude	Chalmette Refinery
East Coast Storage Assets	approximately 4.0 million barrel aggregate shell capacity (f)	Crude, feedstock and asphalt	Delaware City and Paulsboro refineries

____________________


(a)	Included within the DCR Rail Facility are the “DCR Rail Terminal,” a rail unloading terminal with an unloading capacity of 130,000 bpd, and the “DCR West Rack,” an unloading facility with an unloading capacity of 40,000 bpd.


(b)	The Toledo Truck Terminal and the DCR Rail Terminal are collectively referred to as the “Contributed Assets,” or “IPO Assets.”


(c)	These assets are collectively referred to as the “Acquisitions from PBF.”


(d)	The DCR Products Pipeline and DCR Truck Rack are collectively referred to as the “DCR Products Pipeline and Truck Rack.”


(e)	Of the approximately 3.9 million barrel aggregate shell capacity, approximately 1.3 million barrels are dedicated to crude and approximately 2.6 million barrels are allocated to refined products and intermediates.


(f)	Of the approximately 4.0 million barrel aggregate shell capacity, approximately 3.0 million barrels are dedicated to crude and feedstocks and approximately 1.0 million barrels are allocated to asphalt.

Please see “Agreements with PBF Energy—Commercial Agreements” below for a discussion of our agreements with PBF Energy relating to our transportation and terminaling and storage operations.

Agreements with PBF Energy

Contribution Agreements

The contribution agreements (as defined in the table below and collectively referred to as the “Contribution Agreements”) entered into with PBF Holding include:



Contribution Agreement	Effective Date	Assets Contributed	Total Consideration
Contribution Agreement I	5/8/2014	IPO Assets	74,053 common units and 15,886,553 subordinated units (a)
Contribution Agreement II	9/16/2014	DCR West Rack	$135.0 million in cash and $15.0 million through the issuance of 589,536 common units
Contribution Agreement III	12/2/2014	Toledo Storage Facility	$135.0 million in cash and $15.0 million through the issuance of 620,935 common units
Contribution Agreement IV	5/5/2015	DCR Products Pipeline and Truck Rack	$112.5 million in cash and $30.5 million through the issuance of 1,288,420 common units
Contribution Agreement V	8/31/2016	Torrance Valley Pipeline	$175.0 million in cash
Contribution Agreement VI	2/15/2017	Paulsboro Natural Gas Pipeline	$11.6 million intercompany promissory note (b)
Contribution Agreements VII-X	7/16/2018	Development Assets	$31.6 million through the issuance of 1,494,134 common units

____________________

(a)

In exchange for contributing all of the interests in the IPO Assets, PBF Holding received all of our IDRs (which were subsequently distributed to PBF LLC and, in connection with the closing of the IDR Restructuring in February 2019, the IDRs will be canceled and converted into 10,000,000 newly issued PBFX common units), as well as the right to receive a distribution of $30.0 million from us as reimbursement for certain preformation capital expenditures attributable to the DCR Rail Terminal and Toledo Truck Terminal, and the right to receive a distribution of $298.7 million; and in connection with the foregoing, we redeemed PBF Holding’s initial partner interests in us for $1,000.


(b)	As a result of the completion of the Paulsboro Natural Gas Pipeline in the fourth quarter of 2017, we fully repaid the promissory note and related accrued interest.

Commercial Agreements

We currently derive the majority of our revenue from long-term, fee-based, MVC agreements with PBF Holding, supported by contractual fee escalations for inflation adjustments and certain increases in operating costs. We believe 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 PBF Holding, are generally no less favorable to either party than those that could have been negotiated with unaffiliated parties with respect to similar services.

Refer to Note 12 “Related Party Transactions” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further discussion regarding the commercial agreements with PBF Holding.

Omnibus Agreement

In addition to the commercial agreements described above, we have entered into an omnibus agreement with PBF GP, PBF LLC and PBF Holding, which has been amended and restated in connection with certain of the Acquisitions from PBF for the provision of executive management services and support for accounting and finance, legal, human resources, information technology, environmental, health and safety, and other administrative functions, as well as (i) PBF LLC’s agreement not to compete with us under certain circumstances, subject to certain exceptions, (ii) our right of first offer for ten years to acquire certain logistics assets retained by PBF Energy following the IPO, including certain logistics assets that PBF LLC or its subsidiaries may construct or acquire in the future, subject to certain exceptions, and (iii) a license to use our trademark and name.

On July 31, 2018, in connection with the Development Assets Acquisition, we entered into the Fifth Amended and Restated Omnibus Agreement (the “Omnibus Agreement”), with PBF GP, PBF LLC and PBF Holding, to update the provision of these executive management services and support for the Development Assets, which we expect to result in an increase of the estimated annual fee to $7.0 million.

Services Agreement

Additionally, we have entered into an operation and management services and secondment agreement with PBF Holding and certain of its subsidiaries, pursuant to which PBF Holding and its subsidiaries provide us with the personnel necessary for us to perform our obligations under our commercial agreements. We reimburse PBF Holding for the use of such employees and the provision of certain infrastructure-related services to the extent applicable to our 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 July 31, 2018, in connection with the Development Assets Acquisition, we entered into the Sixth Amended and Restated Operation and Management Services and Secondment Agreement with PBF Holdings and certain of its subsidiaries (the “Services Agreement”) to update the provision of these operation and management services for the Development Assets, resulting in an increase of the annual fee to $8.6 million. The Services Agreement will terminate upon the termination of the Omnibus Agreement, provided that we may terminate any service on 30-days’ notice.

Properties

Our principal properties are described above in “Assets and Operations.” We believe that our properties and facilities are adequate for our operations and that our facilities are adequately maintained. Our corporate office is located in the same office as PBF Energy. PBF Energy leases approximately 58,000 square feet for its principal corporate offices in Parsippany, New Jersey. The lease for PBF Energy’s principal corporate offices expires in 2022. Functions performed in the Parsippany office include overall corporate management, refinery and health,

safety and environmental management, planning and strategy, corporate finance, commercial operations, logistics, contract administration, marketing, investor relations, governmental affairs, accounting, tax, treasury, information technology, legal and human resources support functions.

Additionally, we lease approximately 5,000 square feet for our regional corporate office in The Woodlands, Texas. The lease for The Woodlands office expires in 2022. Functions performed in The Woodlands include pipeline control center operations and logistics operations, engineering and regulatory support functions.

Under the Contribution Agreements, PBF Energy, through certain of its subsidiaries, indemnifies us for certain environmental liabilities associated with the ownership and operation of the Contributed Assets arising at or before the closing of the IPO and the Acquisitions from PBF. See “Environmental Regulations, Environmental Liabilities” below for a more detailed discussion of PBF Energy’s indemnification obligations.

Competition

As a result of our contractual relationship with PBF Energy and our direct connection to all of its refineries, we believe that our terminals, pipelines and storage facilities will not face significant competition from other terminals, pipelines and storage facilities for PBF Energy’s transportation and storage requirements with respect to the services provided under our commercial agreements.

If PBF Energy reduces its purchases of crude oil shipped via rail or truck, PBF Energy may only receive the minimum volumes through our crude oil unloading terminals (or pay the shortfall payment if it does not receive the minimum volumes), which may cause a decrease in our revenues. PBF Energy may elect to ship crude oil to its refineries via pipeline or through its refinery marine facilities, which PBFX does not own, as an alternative mode of crude oil transportation. PBF Energy competes with integrated petroleum companies, which have their own crude oil storage, supplies and distribution and marketing systems, as well as with independent refiners, many of which also have their own storage, distribution and marketing systems. PBF Energy also competes with other suppliers that purchase refined petroleum products for resale. Competition in any particular geographic area is affected significantly by the volume of products produced by refineries in that area and by the availability of products and the cost of transportation to that area from distant refineries.

The East Coast Terminals, the Knoxville Terminals and the East Coast Storage Assets compete with other terminal and storage facilities, in terms of fees, and other qualitative factors, including those affiliated with integrated petroleum companies. Competition related to the East Coast Terminals, the Knoxville Terminals and the East Coast Storage Assets is affected significantly by the volume of products produced, transported and available in the geographic area and the cost to transport products from distant locations.

Safety and Maintenance

We perform preventive and normal maintenance on all of our facilities and make repairs and replacements when necessary or appropriate. We also conduct routine and required inspections of those assets in accordance with good industry practices and as required by regulation.

Our terminal, pipeline and storage facilities have response plans, spill prevention and control plans, fire response plans, and other programs designed to effectively respond to emergencies. We continually strive to maintain compliance with applicable air, solid waste, and wastewater regulations.

Our pipelines are subject to strict safety laws and regulations for the transportation of crude oil, natural gas and petroleum products. Transportation involves a risk that hazardous liquids or gases may be released into the environment, which could cause harm to the public or the environment. The DOT has adopted safety regulations with respect to the design, construction, operation, maintenance, inspection and management of pipeline assets, which affect our pipelines. These regulations contain requirements for pipeline integrity management programs,

which include the inspection, testing and maintenance or repairs of the pipelines. The DOT regulations also require pipeline operation and maintenance personnel to meet certain qualifications and that pipeline operators develop comprehensive spill response plans. We believe that we are in compliance with all of the DOT’s Pipeline and Hazardous Materials Safety Administration regulations on pipeline safety.

Employee Safety

We are subject to the requirements of OSHA and comparable state statutes that regulate the protection of the health and safety of workers. In addition, OSHA hazard communication standard requires that information be maintained about hazardous materials used or produced in operations and that this information be provided to employees, state, and local government authorities and citizens. We believe that our operations are in compliance with OSHA requirements, including general industry standards, record keeping requirements, and monitoring of occupational exposure to regulated substances.

Insurance

Terminals and storage facilities may experience damage as a result of an accident or natural disaster. These hazards can cause personal injury and loss of life, severe damage to and destruction of property and equipment, pollution or environmental damage and suspension of operations. We maintain insurance and/or are insured under the property, liability and business interruption policies of PBF Energy and/or certain of its subsidiaries, subject to the deductibles and limits applicable to us, which we believe are reasonable and prudent under the circumstances to cover our operations and assets. However, such insurance does not cover every potential risk associated with our assets, and we cannot ensure that such insurance will be adequate to protect us from all material expenses related to potential future claims for personal and property damage, or that these levels of insurance will be available in the future at commercially reasonable prices. As we continue to grow, we will continue to monitor limits and retentions under our policies and those of PBF Energy and/or its subsidiaries as they relate to the overall cost and scope of our insurance program.

Terminal and Pipeline Control Operations

Our terminals, facilities and pipelines are generally automated, but are continuously supervised by either our employees (including our employees located at The Woodlands office), or PBF Energy employees. At the terminals, our customers’ truck drivers are provided with security badges or other credentials to access and use these facilities. In addition, individual trucks are required to be registered in either our, or PBF Energy’s system to ensure that required regulatory inspections are maintained by either our customers, PBF Energy’s customers, or their common carriers.

Environmental Regulation

Endangered Species Act

The Endangered Species Act restricts certain activities that may affect endangered species or their environments. While some of our facilities are in areas that may be designated as habitats for endangered species, we believe that we are in substantial compliance with the Endangered Species Act. However, the discovery of previously unidentified endangered species or habitats could cause us to incur additional costs or become subject to operating limitations or bans in the affected area.

Environmental Liabilities

Contaminations resulting from spills of crude oil or petroleum products are not unusual within the petroleum terminaling or transportation industries. Historic spills at truck and rail racks and terminals, as a result of past operations, have resulted in contamination of the environment, including soils and groundwater.

Pursuant to the Contribution Agreements entered into in connection with the IPO and the Acquisitions from PBF, PBF Energy has agreed to indemnify us for certain known and unknown environmental liabilities that are based on conditions in existence at our Predecessor’s properties and associated with the ownership or operation of the Contributed Assets and arising from the conditions that existed prior to the closings of the IPO and the Acquisitions from PBF. In addition, we have agreed to indemnify PBF Energy for (i) certain events and conditions associated with the ownership or operation of our assets that occur, as applicable, after the closing of the each Acquisition from PBF (including the IPO), and (ii) environmental liabilities related to our assets if the environmental liability is the result of the negligence, willful misconduct or criminal conduct of us or our employees, including those seconded to us. As a result, we may incur environmental expenses in the future, which may be substantial.

In connection with the acquisition of the East Coast Terminals (the “Plains Asset Purchase”), we are responsible for the environmental remediation costs for conditions that existed on the closing date up to a maximum of $0.3 million per year for ten years, with Plains All American Pipeline, L.P. remaining responsible for any and all additional costs above such amounts during such period.

In connection with the acquisition of the Toledo Products Terminal (the “Toledo Products Terminal Acquisition”), we did not assume, and are currently not aware of, any pre-existing environmental obligations. If pre-acquisition environmental obligations are identified, Sunoco Logistics Partners L.P. (“Sunoco”) is responsible for any liabilities up to $2.0 million identified to have occurred since 2002. For liabilities arising prior to 2002, Sunoco is indemnified by the prior owner under an agreement between Sunoco and the prior owner, and we are entitled to be reimbursed for all amounts paid related to such liabilities on a full pass-through basis.

In connection with the Knoxville Terminals Purchase, we did not assume, and are currently not aware of, any pre-existing environmental obligations. Additionally, we and Cummins purchased a ten-year, $30.0 million environmental insurance policy against unknown environmental liabilities. For items not covered by the insurance policy, Cummins remains responsible for pre-acquisition environmental obligations up to $5.8 million.

In connection with the East Coast Storage Assets Acquisition, we assumed the pre-existing environmental obligations associated with the East Coast Storage Assets. Additionally, we and Crown Point purchased a ten-year, $30.0 million environmental insurance policy with a retention of not less than $0.5 million against unknown environmental liabilities.

As of December 31, 2018, we have recorded a total liability related to environmental remediation costs of $2.6 million related to the acquisitions of the East Coast Terminals, the Torrance Valley Pipeline and the East Coast Storage Assets. Refer to Note 11 “Commitments and Contingencies” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for additional information.

Seasonality

The crude oil, refined products and natural gas throughput and stored at our facilities are affected by the level of supply and demand for crude oil, refined products and natural gas in the markets served directly or indirectly by our assets. However, many effects of seasonality on our revenues will be substantially mitigated due to our commercial agreements with PBF Energy that include MVCs, and are constant each calendar quarter or year.

Employees

As of December 31, 2018, we and certain of our wholly-owned subsidiaries employ 82 employees at our East Coast Terminals, at our Toledo Products Terminal, in The Woodlands office, at our Knoxville Terminals and at our East Coast Storage Assets. Through our wholly-owned subsidiary, PLPT, we employ 30 employees located at the East Coast Terminals, 6 employees located at the Toledo Products Terminal and 11 employees located at the Knoxville Terminals. Through our wholly-owned subsidiary, PBFX Op Co, we employ 9 employees in The

Woodlands office. Through our wholly-owned subsidiary, CPI, we employ 26 employees located at the East Coast Storage Assets.

Of the 30 employees at our East Coast Terminals, 10 are covered by a collective bargaining agreement through the USW. The agreement with the USW covering the East Coast Terminals is scheduled to expire in April 2021. Of the 26 employees at our East Coast Storage Assets, 19 are covered by a collective bargaining agreement through the USW. The agreement with the USW covering the East Coast Storage Assets is scheduled to expire in February 2022. We consider our relations with the represented employees to be satisfactory.

All of our executive management personnel are currently employees of PBF Energy or subsidiaries of PBF Energy and devote a portion of their time to our business and affairs that is required to manage and conduct our operations. The other personnel that conduct our operations are employees of PBF Holding or its subsidiaries. Pursuant to the Omnibus Agreement, we pay an annual fee to PBF Energy for the provision of various centralized administrative services and reimburse PBF Energy for direct or allocated costs and expenses incurred by PBF Energy on our behalf. Pursuant to the Services Agreement, we use employees of PBF Energy to operate certain of our assets and PBF Energy is reimbursed for such employees through an annual fee, which also includes provisions of certain utilities and other infrastructure-related services. Please read “Agreements with PBF Energy.”

In addition, PBF Energy and its affiliates have entered into a rail operations services agreement with Savage, an unaffiliated third party, to provide crude oil unloading and other operations services for the Delaware City and Toledo refineries. Under the rail operations services agreement, Savage is responsible for providing the personnel necessary for the performance of our operations services. Savage is at all times considered an independent contractor and none of Savage’s employees or contractors are considered an employee, representative or agent of us or PBF Energy or its subsidiaries. The costs of Savage’s services provided to us are passed through to us by PBF Holding and its subsidiaries. From time to time, certain other third parties may provide operating services to us in a capacity as independent contractors.

ITEM 1A. RISK FACTORS

Limited partner interests are inherently different from the capital stock of a corporation, although many of the business risks to which we are subject to are similar to those that would be faced by a corporation engaged in a similar business. If any of the following risks were actually to occur, our business, financial condition, results of operations and our cash flows could be materially adversely affected. In that case, we might not be able to pay distributions on our common units, or the trading price of our common units could decline.

Risks Related to Our Business

PBF Energy accounts for the substantial majority of our revenues, and we are substantially dependent on PBF Energy’s refineries particularly at its Delaware City, Toledo and Torrance refineries. Therefore, we are subject to its business risks. If PBF Energy changes its business strategy, fails to satisfy its obligations under our commercial agreements for any reason or significantly reduces the volumes throughput at our facilities, our revenues could decline, which would have a material adverse effect on our financial condition, results of operations, cash flows and ability to make distributions to unitholders.

PBF Energy is our largest customer and accounted for the majority of our revenue for the year ended December 31, 2018. We are substantially dependent on PBF Energy’s refineries particularly at its Delaware City, Toledo and Torrance refineries. We expect PBF Energy will continue to provide a substantial majority of our revenues for the foreseeable future, and as a result, we are subject to the risk of nonpayment or nonperformance under our commercial agreements. If PBF Energy were to significantly decrease its use of our logistics assets, because of business or operational difficulties, including labor difficulties, strategic decisions by management or due to catastrophic events, weather and regulatory actions, it is unlikely that we would be able to utilize any additional capacity as a result of this decreased use to service third-party customers without substantial capital

outlays and delays, if at all, which could materially and adversely affect our results of operations, financial condition and cash flows. Additionally, any event, whether in our areas of operation or otherwise, that materially and adversely affects PBF Energy’s financial condition, results of operations or cash flows may adversely affect our ability to sustain or increase cash distributions to our unitholders. Accordingly, we are subject to the operational and business risks of PBF Energy, including:


•	supply, demand, prices and other market conditions for PBF Energy’s products, including volatility in commodity prices;


•	the effects of competition in PBF Energy’s markets;


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


•	adverse developments in PBF Energy’s relationship with both its key employees and unionized employees;


•	PBF Energy’s ability to operate its business efficiently, manage capital expenditures and costs (including general and administrative expenses) and generate earnings and cash flow;


•	PBF Energy’s level of indebtedness;


•	PBF Energy’s expectations and timing with respect to its acquisition activity and whether such acquisitions are accretive or dilutive to shareholders;


•	PBF Energy’s expectations with respect to its capital improvement and turnaround projects;


•	PBF Energy’s supply and inventory intermediation arrangements expose it to counterparty credit and performance risk;

•

termination of PBF Energy’s inventory intermediation agreements, which could have a material adverse effect on their liquidity, as PBF Energy would be required to finance its intermediate and refined products inventory covered by the agreements. Additionally, PBF Energy is obligated to repurchase from the counterparty certain intermediates and finished products located at its Paulsboro and Delaware City refineries’ storage tanks upon termination of these agreements;


•	restrictive covenants in PBF Energy’s indebtedness that may adversely affect its operational flexibility;


•	PBF Energy’s obligations under its tax receivable agreement for certain tax benefits it may claim; and in particular that PBF Energy’s assumptions regarding such payments are subject to change due to various factors outside of its control;


•	the impact of disruptions to crude or feedstock supply to any of PBF Energy’s refineries, including disruptions due to problems with third-party logistics infrastructure or operations, including pipeline, marine and rail transportation;


•	the possibility that PBF Energy might reduce or not make further dividend payments;


•	the inability of PBF Energy’s subsidiaries to freely pay dividends or make distributions to PBF Energy;


•	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 effectiveness of PBF Energy’s crude oil sourcing strategies, including PBF Energy’s crude by rail strategy and related commitments;


•	adverse impact related to regulation by the federal government lifting the restrictions on exporting U.S. crude oil;


•	adverse impacts from changes in PBF Energy’s 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 required to comply with the Renewable Fuel Standards and GHG emission credits required to comply with various GHG emission programs, such as AB32;


•	PBF Energy’s ability to successfully integrate acquisitions into its business and realize the benefits from such acquisitions;


•	liabilities arising from acquisitions that are unforeseen or exceed PBF Energy’s expectations;


•	risk associated with our operations as a separate, publicly-traded entity;


•	potential tax consequences related to PBF Energy’s investment in us; and


•	any decisions PBF Energy continues to make with respect to its energy-related logistical assets that may be transferred to us.

Such risks may impact us as we significantly rely on revenues generated from our transportation, terminaling and storage operations that are located in PBF Energy’s facilities, particularly such operations related to its Toledo, Torrance and Delaware City refineries. Due to our lack of diversification in assets and geographic location, an adverse development in our businesses or areas of operations, including adverse developments due to catastrophic events, weather, regulatory action and decreases in demand for crude oil and refined products, could have a significantly greater impact on our results of operations and cash available for distribution to our common unitholders than if we maintained more diverse assets and locations. Such events may constitute force majeure events under our commercial agreements, potentially resulting in the suspension, reduction or termination of one or more commercial agreements in the impacted geographic area.

We may not have sufficient cash from operations following the establishment of cash reserves and payment of fees and expenses, including cost reimbursements to our general partner and its affiliates, to enable us to pay the minimum quarterly distribution to holders of our common units.

In order to pay the minimum quarterly distribution of $0.30 per unit, or $1.20 per unit on an annualized basis, we will require available cash of approximately $13.8 million per quarter, or approximately $55.2 million per year, based on the number of common units outstanding at December 31, 2018. Immediately following the closing of the IDR Restructuring, we will require available cash of approximately $16.8 million per quarter, or approximately $67.2 million on an annualized basis, to pay the minimum quarterly distributions. We may not have sufficient available cash from operating surplus each quarter to enable us to pay the minimum quarterly distribution. The amount of cash we can distribute on our units principally depends upon the amount of cash we generate from our operations, which will fluctuate from quarter to quarter based on, among other things:


•	the volume of crude oil throughput;


•	our entitlement to payments associated with MVCs;


•	the fees we charge for the volumes throughput;


•	the level of our operating, maintenance and general and administrative costs;


•	prevailing economic conditions; and


•	continued operation of our facilities.

In addition, the actual amount of cash we will have available for distribution will depend on other factors, some of which are beyond our control, including:


•	the level and timing of capital expenditures we make;


•	the amount of our operating expenses and general and administrative expenses, including reimbursements to our general partner and its affiliates, including PBF Energy, in respect of those expenses and payment of the administrative fees under the Omnibus Agreement and Services Agreement for services provided to us by our general partner and its affiliates, including PBF Energy;


•	the cost of acquisitions, if any;


•	our debt service requirements and other liabilities;


•	fluctuations in our working capital needs;


•	our ability to borrow funds and access capital markets;


•	restrictions contained in the 2023 Notes (as defined below) and the Revolving Credit Facility and other debt service requirements;


•	the amount of cash reserves established by our general partner; and


•	other business risks affecting our cash levels.

For purposes of this Form 10-K, we refer to the $350.0 million in aggregate principal amount of 6.875% senior notes due 2023 issued by us and our wholly-owned subsidiary PBF Logistics Finance Corporation (“PBF Finance”) in 2015 as the “initial 2023 Notes,” we refer to the $175.0 million in aggregate principal amount of 6.875% senior notes due 2023 issued by us and PBF Finance in 2017 as the “additional 2023 Notes,” and we refer to the initial 2023 Notes and the additional 2023 Notes collectively as the “2023 Notes.”

Certain of our commercial agreements with PBF Energy and the Services Agreement contain provisions that allow our counterparty to such agreement to suspend, reduce or terminate its obligations under such agreement in certain circumstances, including events of force majeure, which would have a material adverse effect on our financial condition, results of operations, cash flows and ability to make distributions to unitholders.

Certain of our commercial agreements with PBF Energy and the Services Agreement contain provisions that allow our counterparty to such agreement to suspend, reduce or terminate its obligations to us under such agreement, including the requirement to pay the fees associated with the applicable MVCs, if certain events occur, including (i) a material breach of the agreement by us, (ii) PBF Energy deciding to permanently or indefinitely suspend crude oil refining operations at certain of its refineries for which we provide services or (iii) the occurrence of certain force majeure events that would prevent us or PBF Energy from performing our or its obligations under the applicable agreement (in the case of PBF Energy, or with respect to the Services Agreement, us). In such circumstances, PBF Energy has the discretion to decide to suspend, reduce or terminate its obligations notwithstanding the fact that its decision may significantly and adversely affect us. For instance, under certain of our commercial agreements with PBF Energy, if PBF Energy decides to permanently or indefinitely suspend refining operations at the refinery served under the applicable agreement for a period that will continue for at least twelve consecutive months, then it may terminate the agreement on no less than twelve months’ prior written notice to us. Furthermore, under such agreements, PBF Energy has the right to suspend or reduce its obligations at the refinery served under the applicable agreement for the duration of a force majeure event affecting its assets with respect to any affected services, and may terminate the agreements with respect to such services if the force majeure event lasts in excess of twelve months. In addition, if the force majeure event occurs on our assets at any time, PBF Energy has the right to suspend or reduce its obligations for the duration of the force majeure event with respect to any affected services. As defined in our commercial agreements with PBF Energy, force majeure events include any acts or occurrences that prevent services from being performed either by us or PBF Energy under the applicable agreement, such as:


•	acts of God;


•	strikes, lockouts or other industrial disturbances;


•	acts of the public enemy, wars, terrorism, blockades, insurrections, riots or civil disturbances;


•	storms, floods or washouts; or other interruptions caused by acts of nature or the environment;


•	arrests or the order of any court or governmental authority claiming or having jurisdiction while the same is in force and effect;


•	civil disturbances, explosions, fires, breakage leaks, releases, accidents to machinery, vessels, storage tanks, lines of pipe, rail lines and equipment;


•	any inability to obtain or unavoidable delay in obtaining material or equipment;


•	any inability to receive crude oil because of a failure of third-party logistics systems; and


•	any other causes not reasonably within the control of the party claiming suspension and which by the exercise of commercially reasonable efforts such party is unable to prevent or overcome.

Accordingly, under our commercial agreements with PBF Energy there exists a broad range of events that could result in our no longer being able to utilize our facilities and PBF Energy no longer having an obligation to meet its MVCs or pay the full amount of fees or other amounts otherwise owing under these agreements. Furthermore, a single event relating to one of PBF Energy’s refineries could have such an impact on a number of our commercial agreements with PBF Energy. Any reduction, suspension or termination of any of our commercial agreements would have a material adverse effect on our financial condition, results of operations, cash flows and ability to make distributions to unitholders.

If we are unable to renew or extend the various commercial agreements we have with PBF Energy, our ability to make distributions to our unitholders may be reduced.

The term of PBF Energy’s obligations under each of our commercial agreements ranges from one to fifteen years. If we are unable to renew or extend such commercial agreements or if we are unable to generate additional revenues from third parties, our ability to make cash distributions to unitholders may be reduced. Additionally, even if we were to renew or extend our commercial agreements, PBF Energy is under no obligation to renew or extend such agreements on the same terms. The renewal or extension of such agreements with reduced MVCs or rates could also have an impact on our ability to make cash distributions to unitholders. For example, throughput volumes at certain of our assets have been below MVCs in recent periods. PBF Energy may seek to renew or extend its commercial agreements with us for these assets with reduced MVCs or rates, or may not seek to renew or extend these commercial agreements upon expiration. Any such change in these or our other commercial agreements that would reduce the MVCs or include other less favorable terms could have a material adverse effect on our financial condition, results of operations, cash flows and our ability to make distributions to unitholders.

A material decrease in the supply of attractively priced crude oil or a material decrease in the refining margins at PBF Energy could significantly reduce the volumes of crude oil that are throughput, which could materially adversely affect our financial condition, results of operations, cash flows and ability to make distributions to our unitholders.

The volumes of crude oil that are throughput depend substantially on PBF Energy’s refining margins and the differentials for crude oils that are throughput at our facilities. This volume of crude oil purchased depends, in part, on the availability of attractively priced crude oil that can be transported to PBF Energy’s refineries by pipelines, rail or truck.

Refining margins are dependent mostly upon the price of crude oil or other refinery feedstocks and the price of refined products. These prices are affected by numerous factors beyond our or PBF Energy’s control, including the global supply and demand for crude oil and gasoline and other refined products. Global economic weakness and high unemployment in the U.S. and/or globally could depress demand for refined products. The impact of low demand may be further compounded by excess global refining capacity and high inventory levels. Several refineries in North America and Europe have been temporarily or permanently shut down in response to falling demand and excess refining capacity in the recent past.

In addition to such market conditions, there are long-term factors that may impact the supply and demand of refined products in the U.S., including:


•	changes in capacity and utilization rates of refineries worldwide;


•	increased fuel efficiency standards for vehicles, including greater acceptance of electric and alternative fuel vehicles;


•	development and marketing of alternative and competing fuels, such as ethanol and biodiesel;


•	changes in fuel specifications required by environmental and other laws, particularly with respect to renewable fuel content requirements;


•	potential and enacted climate change legislation;


•	the EPA regulation of greenhouse gas emissions under the CAA; and


•	other U.S. or state government regulations and policies.

In order to maintain or increase production levels at PBF Energy’s refineries, PBF Energy must continually contract for new crude oil supplies or consider connecting to alternative sources of crude oil. Adverse developments in major oil producing regions around the world could have a significantly greater impact on our financial condition, results of operations and cash flows because of our lack of industry and geographic diversity and substantial reliance on PBF Energy as a customer. Accordingly, in addition to risks related to accessing and transporting crude oil, we are disproportionately exposed to risks inherent in the broader oil and gas industry, including:


•	the volatility and uncertainty of regional pricing differentials for crude oil and refined products;


•	the ability of the members of the OPEC, and certain other oil exporting countries, to agree to and maintain production controls;


•	the nature and extent of governmental regulation and taxation; and


•	the anticipated future prices of crude oil and refined products in markets served by PBF Energy’s refineries.

If, as a result of any of these or other factors, the demand for refined products decreases significantly, if crude oil differentials for the crude run by PBF Energy narrow, or if there is a material increase in the price of crude oil supplied to PBF Energy’s refineries without an increase in the value of the refined products produced by those refineries, either temporary or permanent, which causes PBF Energy to reduce production of refined products at its refineries, there would likely be a reduction in the volumes of crude oil we handle for PBF Energy. Any such reduction could adversely affect our financial condition, results of operations, cash flows and ability to make distributions to our unitholders.

Any cyber-attacks, political instability, military strikes, sustained military campaigns, terrorist activity, or changes in foreign policy may negatively affect our and PBF Energy’s operations, financial condition, results of operations, cash flows, and our ability to make distributions to our unitholders.

We and PBF Energy are dependent on technology infrastructure and maintain and rely upon certain critical information systems for the effective operation of our respective businesses. These information systems include data network and telecommunications, internet access and our websites, and various computer hardware equipment and software applications, including those that are critical to the safe operation of our pipelines and terminals. These information systems are subject to damage or interruption from a number of potential sources including natural disasters, software viruses or other malware, power failures, cyber-attacks, and other events. To the extent that these information systems are under our control, we and PBF Energy have implemented measures such as virus protection software and emergency recovery processes to address the outlined risks. However, security measures for information systems cannot be guaranteed to be failsafe. Any compromise of our data security or our inability to use or access these information systems at critical points in time could unfavorably impact the timely and efficient operation of our business and subject us to additional costs and liabilities.

Any political instability, military strikes, sustained military campaigns, terrorist activity, or changes in foreign policy in areas or regions of the world where we operate or where PBF Energy acquires crude oil and other raw materials or sells its refined petroleum products may affect our business in unpredictable ways, including forcing us to increase security measures and causing disruptions of supplies and distribution markets. We may also be subject to U.S. trade and economic sanctions laws, which change frequently as a result of foreign policy developments, and which may necessitate changes to PBF Energy’s crude oil acquisition activities. Further, like other industrial companies, our facilities or PBF Energy’s facilities may be the target of terrorist activity. Any act

of war or terrorism that results in damage to any of our logistics assets or PBF Energy’s refineries or third-party facilities upon which we or PBF Energy are dependent for our business operations could have a material adverse effect on our business, results of operations and financial condition.

Our ability to expand may be limited if PBF Energy’s business does not grow as expected.

Part of our growth strategy depends on the growth of PBF Energy’s business. We believe our growth will be driven in part by identifying and executing organic expansion projects that will result in increased throughput volumes from PBF Energy and third parties. Our prospects for organic growth currently include projects that we expect PBF Energy to undertake, and that we expect to have an opportunity to purchase from PBF Energy. In addition, our organic growth opportunities will be limited if PBF Energy is unable to successfully acquire new assets for which our execution of organic projects is needed. Additionally, if PBF Energy focuses on other growth areas or does not make capital expenditures to fund the organic growth of its logistics operations, we may not be able to fully execute our growth strategy.

We may not be able to significantly develop third-party revenue due to competition and other factors, which could limit our ability to grow and may extend our dependence on PBF Energy.

Our ability to develop third-party revenue is subject to numerous factors beyond our control, including competition from third parties and the extent to which we have available capacity when third-party customers require it.

In addition, with respect to our facilities collocated at a PBF Energy refinery, our ability to obtain third-party customers will be partially dependent on our ability to make connections to third-party facilities and pipelines. If we do not or are unable to make connections to third-party facilities and pipelines, the throughput at our facilities may be limited to the demand from PBF Energy’s refineries. Furthermore, to the extent that we have capacity at our products terminals available for third-party volumes, competition from other products terminals owned by our competitors may limit our ability to utilize this available capacity.

We can provide no assurance that we will be able to attract material third-party revenues to our existing or future assets. Our efforts to establish our reputation and attract new unaffiliated customers may be adversely affected by our relationship with PBF Energy and our desire to provide services pursuant to fee-based contracts. Our existing and potential third-party customers may prefer to obtain services under contracts through which we could be required to assume direct commodity exposure.

If we are unable to obtain needed capital or financing on satisfactory terms to fund expansions of our asset base, our ability to make quarterly cash distributions may be diminished or our financial leverage could increase. We do not have any commitment with any of our affiliates to provide direct or indirect financial assistance to us.

In order to expand our asset base, we will need to make expansion capital expenditures. If we do not make sufficient or effective expansion capital expenditures, we will be unable to expand our business operations and may be unable to maintain or raise the level of our quarterly cash distributions. We will be required to use cash from our operations, incur borrowings or sell additional common units or other limited partner interests in order to fund our expansion capital expenditures. Using cash from operations will reduce cash available for distribution to our common unitholders. Our ability to obtain financing or to access the capital markets for future equity or debt offerings may be limited by our financial condition at the time of any such financing or offering as well as the covenants in our debt agreements, general economic conditions and contingencies and uncertainties that are beyond our control. Even if we are successful in obtaining funds for expansion capital expenditures through equity or debt financing, the terms thereof could limit our ability to pay distributions to our common unitholders. Incurring additional debt may significantly increase our interest expense and financial leverage, and issuing additional limited partner interests may result in significant common unitholder dilution and increase the aggregate amount of cash

required to maintain the then-current distribution rate, which could materially decrease our ability to pay distributions at the then-current distribution rate.

PBF Energy’s level of indebtedness, the terms of its borrowings and any future credit ratings could adversely affect our ability to grow our business, our ability to make cash distributions to our unitholders and our credit ratings and profile. Our ability to obtain credit in the future and our future credit rating may also be affected by PBF Energy’s level of indebtedness.

PBF Energy has a significant amount of debt. As of December 31, 2018, PBF Energy had total debt of $1,974.7 million, excluding debt issuance costs of $41.0 million. In addition to its outstanding debt, as of December 31, 2018, PBF Energy could have incurred an additional $1,420.1 million of indebtedness based on the available capacity under existing debt agreements. PBF Energy’s significant level of debt could increase its and our vulnerability to general adverse economic and industry conditions and require PBF Energy to dedicate a substantial portion of its cash flow from operations to service its debt and lease obligations, thereby reducing the availability of its cash flow to fund its growth strategy, including capital expenditures, acquisitions and other business opportunities. Furthermore, a higher level of indebtedness at PBF Energy increases the risk that it may default on its obligations, including under its commercial agreements with us. The covenants contained in the agreements governing PBF Energy’s outstanding and future indebtedness may limit its ability to borrow additional funds for development and make certain investments and may directly or indirectly impact our operations in a similar manner. For example, PBF Energy’s indebtedness requires that any transactions PBF Energy enters into with us must be on terms no less favorable to PBF Energy than those that could have been obtained with an unrelated person.

Our credit rating may be adversely affected by the leverage or any change in the credit rating of PBF Energy, or its subsidiaries, or of the debt held by such entities, as credit rating agencies such as Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc. may consider the leverage and credit profile of PBF Energy and its affiliates because of their ownership interest in and control of us and because PBF Energy currently accounts for a substantial majority of our revenues. Any adverse effect on our credit rating would increase our cost of borrowing or hinder our ability to raise financing in the capital markets, which would impair our ability to grow our business and make cash distributions to our unitholders.

In the event PBF Energy were to default under certain of its debt obligations, we could be materially adversely affected. We have no control over whether PBF Energy remains in compliance with the provisions of its debt obligations, except as such provisions may otherwise directly pertain to us. Further, any debt instruments that PBF Energy or any of its affiliates enter into in the future, including any amendments to existing credit facilities, may include additional or more restrictive limitations on PBF Energy that may impact our ability to conduct our business. These additional restrictions could adversely affect our ability to finance our future operations or capital needs or engage in, expand or pursue our business activities.

PBF LLC has obligations to make tax distributions to the members of PBF LLC and these amounts could be material and adversely impact their ability to meet their obligations to us. PBF Energy has obligations to make certain payments under its tax receivable agreement to the current and former members of PBF LLC other than PBF Energy, and the amounts PBF Energy has to pay could be significant and, in certain cases, may be accelerated and/or significantly exceed the actual benefits realized by PBF Energy.

PBF LLC is required to make periodic tax distributions to the members of PBF LLC, including PBF Energy, prorated in accordance with their respective percentage interests, subject to the terms and conditions of its limited liability company agreement. These amounts could be material to PBF LLC. PBF Energy is also party to a tax receivable agreement that provides for the payment from time to time by PBF Energy to the current and former members of PBF LLC other than PBF Energy of 85% of the benefits, if any, that PBF Energy is deemed to realize as a result of (i) the increases in tax basis resulting from its acquisitions of PBF LLC Series A Units, and (ii) certain other tax benefits related to its entering into the tax receivable agreement, including tax benefits attributable to

payments under the tax receivable agreement. The payments that PBF Energy may make under the tax receivable agreement will be substantial and there may be a material negative effect on PBF Energy’s liquidity if, as a result of timing discrepancies or otherwise, (i) the payments under the tax receivable agreement exceed the actual benefits it realizes in respect of the tax attributes subject to the tax receivable agreement, and/or (ii) distributions to PBF Energy by PBF LLC are not sufficient to permit PBF Energy, after it has paid its taxes and other obligations, to make payments under the tax receivable agreement. In addition, in certain cases, payments owed by PBF Energy under the tax receivable agreement may be accelerated and/or significantly exceed the actual benefits it realizes. PBF Energy’s payment obligations under the tax receivable agreement are PBF Energy’s obligation and not our obligation or any of the other subsidiaries of PBF Energy. However, PBF Energy may not be able to finance its obligations under the tax receivable agreement and its existing indebtedness may limit its subsidiaries’ ability to make distributions to it to pay these obligations. These provisions could materially adversely affect PBF Energy and its ability to meet its obligations to us.

Our logistics operations and PBF Energy’s refining operations are subject to many risks and operational hazards, some of which may result in business interruptions and shutdowns of our or PBF Energy’s facilities and liability for damages, particularly if not fully covered by insurance. If a significant accident or event occurs that results in business interruption or shutdown for which we are not adequately insured, our operations and financial results could be adversely affected.

Our logistics operations are subject to all of the risks and operational hazards inherent in receiving, handling, storing and transferring crude oil, natural gas and refined products, including:


•	damages to our facilities, related equipment and surrounding properties caused by floods, fires, severe weather, explosions and other natural disasters and acts of terrorism;


•	the inability of third-party facilities on which our operations are dependent, including PBF Energy’s facilities, to complete capital projects and to restart timely refining operations following a suspension or shutdown;


•	mechanical or structural failures at our facilities or at third-party facilities on which our operations are dependent, including PBF Energy’s facilities;


•	curtailments of operations relative to severe seasonal weather;


•	inadvertent damage to our facilities from construction, farm and utility equipment; and


•	other hazards.

These risks could result in substantial losses due to personal injury and/or loss of life, severe damage to and destruction of property and equipment and pollution or other environmental damage, as well as business interruptions or shutdowns of our facilities. Any such event or unplanned shutdown could have a material adverse effect on our business, financial condition and results of operations. In addition, PBF Energy’s refining operations, on which our operations are substantially dependent and over which we have no control, are subject to similar operational hazards and risks inherent in refining crude oil. A significant accident at our facilities or at PBF Energy’s facilities could result in serious injury or death to employees of PBF Energy or its affiliates or contractors, could expose us to significant liability for personal injury claims and reputational risk and could affect PBF Energy’s ability and/or requirement to satisfy the MVCs under our commercial agreements.

Our insurance policies do not cover all losses, costs or liabilities that we may experience, and insurance companies that currently insure companies in the energy industry may cease to do so or substantially increase premiums.

We maintain insurance or are covered by insurance policies maintained by PBF Energy or its affiliates. These insurance policies provide limited coverage for some, but not all, of the potential risks and liabilities associated with our business. To the extent we are covered by insurance policies maintained by PBF Energy or its affiliates, our coverage is subject to the deductibles and limits under those policies and to the extent PBF Energy or its

affiliates experience losses under these insurance policies, the limits of our coverage may be decreased. In addition, we are not insured against all potential losses, costs or liabilities. We could suffer losses for uninsurable or uninsured risks or in amounts in excess of existing insurance coverage. We and PBF Energy may not be able to maintain or obtain insurance of the type and amount we desire at reasonable rates. As a result of market conditions, premiums and deductibles for certain of our or PBF Energy’s insurance policies may increase substantially. In some instances, certain insurance could become unavailable or available only for reduced amounts of coverage. For example, coverage for hurricane damage can be limited, and coverage for terrorism risks can include broad exclusions. If we were to incur a significant liability for which we were not fully insured, it could have a material adverse effect on our financial position.

The energy industry is highly capital intensive, and the entire or partial loss of individual facilities or multiple facilities can result in significant costs to both energy industry companies, such as us, and their insurance carriers. In recent years, several large energy industry claims have resulted in significant increases in the level of premium costs and deductible periods for participants in the energy industry. As a result of large energy industry claims, insurance companies that have historically participated in underwriting energy-related facilities may discontinue that practice, may reduce the insurance capacity they are willing to offer or demand significantly higher premiums or deductible periods to cover these facilities. If significant changes in the number or financial solvency of insurance underwriters for the energy industry occur, or if other adverse conditions over which we have no control prevail in the insurance market, we may be unable to obtain and maintain adequate insurance at a reasonable cost.

Our insurance program may include a number of insurance carriers. Significant disruptions in financial markets could lead to a deterioration in the financial condition of many financial institutions, including insurance companies; therefore, we may not be able to obtain the full amount of our insurance coverage for insured events.

Our right of first offer to acquire the right of first offer assets and certain assets that PBF Energy may acquire or construct in the future is subject to risks and uncertainty, and ultimately we may not acquire any of those assets.

The Omnibus Agreement provides us with a right of first offer for a period of 10 years after the closing of the IPO on certain of PBF Energy’s existing logistics assets and certain assets that it may acquire or construct in the future, subject to certain exceptions. The consummation and timing of any future acquisitions pursuant to this right will depend upon, among other things, PBF Energy’s willingness to offer subject assets for sale and obtain any necessary consents, our ability to negotiate acceptable purchase agreements and commercial agreements with respect to such assets and our ability to obtain financing on acceptable terms. We can offer no assurance that we will be able to successfully consummate any future acquisitions pursuant to our right of first offer, and PBF Energy is under no obligation to accept any offer that we may choose to make. In addition, certain of the right of first offer assets may require substantial capital expenditures in order to maintain compliance with applicable regulatory requirements or otherwise make them suitable for our commercial needs. For these or a variety of other reasons, we may decide not to exercise our right of first offer if and when any assets are offered for sale, and our decision will not be subject to unitholder approval. In addition, the Omnibus Agreement and our right of first offer may be terminated by PBF Energy at any time in the event that PBF LLC or its affiliates no longer controls our general partner. Please read “Item 1. Business—Agreements with PBF Energy—Omnibus Agreement.”

Our purchase option under certain circumstances to acquire and our right to use certain of PBF Energy’s existing assets is subject to risks and uncertainty, and ultimately we may not acquire or have a right to use any of those assets.

Our commercial agreements provide us with options to purchase and use certain assets at PBF Energy’s refineries related to our business in the event PBF Energy were to shut them down. In the event PBF Energy shuts down any of the refineries and our option becomes exercisable, the consummation and timing of any future acquisitions pursuant to our purchase option will depend upon, among other things, our ability to obtain any necessary consents, to negotiate acceptable purchase agreements and commercial agreements with respect to such

assets and to obtain financing on acceptable terms. We can offer no assurance that we will be able to successfully consummate any future acquisitions pursuant to this purchase option. In addition, certain of the assets covered by this purchase option and our right of use may require substantial capital expenditures in order to maintain compliance with applicable regulatory requirements or otherwise make them suitable for our commercial needs. For these or a variety of other reasons, we may decide not to exercise this purchase option if PBF Energy permanently shuts down any of its refineries, or to exercise our right of use if and when we have capacity in excess of PBF Energy’s throughput volumes, as applicable, and our decision to exercise any purchase options or right of use will not be subject to unitholder approval. Refer to Note 12 “Related Party Transactions” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further discussion regarding the commercial agreements with PBF Holding.

We may not be able to fully execute our growth plan if we are unable to access the capital markets on economically acceptable terms or experience increased competition for investment opportunities.

Our growth plan includes growing through strategic acquisitions, whether through acquisitions from PBF Energy or third parties, and through strategic organic projects. In order to fund our growth plan, we may, from time to time, have to acquire substantial new capital to finance our acquisitions or organic growth projects. If we are unable to access the capital markets on economically acceptable terms, we may not be able to fully execute our growth plan.

Additionally, we may not be able to execute our growth plan if we experience increased competition for third-party investment opportunities, or if our organic growth projects are no longer economical due to market influences.

If we are unable to make acquisitions on economically acceptable terms from PBF Energy or third parties, our future growth would be limited, and any acquisitions we undertake may reduce, rather than increase, our cash flows and ability to make distributions to unitholders.

A portion of our strategy to grow our business and increase distributions to unitholders is dependent on our ability to make acquisitions that result in an increase in cash flow. If we are unable to make acquisitions from PBF Energy or third parties for any reason, including if we are unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts, we are unable to obtain financing for these acquisitions on economically acceptable terms, we are outbid by competitors or we or the seller are unable to obtain any necessary consents, our future growth and ability to increase distributions to unitholders will be limited. Furthermore, even if we do consummate acquisitions that we believe will be accretive, they may in fact result in a decrease in cash flow. Any acquisition involves potential risks, including, among other things:


•	mistaken assumptions about revenues and costs, including synergies;


•	the assumption of unknown liabilities;


•	limitations on rights to indemnity from the seller;


•	mistaken assumptions about the overall costs of equity or debt;


•	the diversion of management’s attention from other business concerns;


•	unforeseen difficulties operating in new product areas or new geographic areas; and


•	customer or key employee losses at the acquired businesses.

If we consummate any future acquisitions, our capitalization and results of operations may change significantly, and unitholders may not have the opportunity to evaluate the economic, financial and other relevant information that we will consider in determining the application of these funds and other resources.

We may be unsuccessful in integrating the operations of the assets we have acquired or of any future acquisitions with our existing operations, and in realizing all or any part of the anticipated benefits of any such acquisitions.

From time to time, we expect to evaluate and acquire assets and businesses that we believe complement our existing assets and businesses. Acquisitions, including drop-down transactions from PBF Energy, may require substantial capital or the incurrence of substantial indebtedness. Our capitalization and results of operations may change significantly as a result of future acquisitions. Acquisitions and business expansions involve numerous risks, including difficulties in the assimilation of the assets and operations of the acquired businesses, inefficiencies and difficulties that arise because of unfamiliarity with new assets and the businesses associated with them and new geographic areas and the diversion of management’s attention from other business concerns. Further, unexpected costs and challenges may arise whenever businesses with different operations or management are combined, and we may experience unanticipated delays in realizing the benefits of an acquisition. Also, following an acquisition, we may discover previously unknown liabilities associated with the acquired business or assets for which we have no recourse under applicable indemnification provisions.

Our expansion of existing assets and construction of new assets, including execution of organic growth projects, may not result in revenue increases and will be subject to regulatory, environmental, political, legal and economic risks, which could adversely affect our operations and financial condition.

A portion of our strategy to grow and increase distributions to unitholders is dependent on our ability to expand existing assets and to construct additional assets, including execution of organic growth projects. Other than certain existing capital projects underway, which are expected to be material to us, we have no additional material commitments for expansion or construction projects as of December 31, 2018. Organic growth projects such as the construction of a pipeline or terminal or the expansion of our existing terminals or pipelines involves numerous regulatory, environmental, political and legal uncertainties, most of which are beyond our control. If we undertake these types of projects, they may not be completed on schedule or at all or at the budgeted cost. Moreover, we may not receive sufficient long-term contractual commitments from customers to provide the revenue needed to support such projects. Even if we receive such commitments, we may not realize an increase in revenue for an extended period of time. For instance, if we build a pipeline, the construction will occur over an extended period of time, and we will not receive any material increases in revenues until after completion of the project. Moreover, we may construct facilities to capture anticipated future growth in production in a region or gain access to crude oil supplies at lower costs and such growth or access may not materialize. As a result, new facilities may not be able to attract enough throughput to achieve our expected investment return, which could adversely affect our results of operations and financial condition and our ability to make distributions to our unitholders.

We do not own all of the land on which our facilities are located, which could result in disruptions to our operations.

We do not own all of the land on which our facilities have been constructed, and we are therefore subject to the possibility of more onerous terms and/or increased costs to retain necessary land use if we do not have valid rights of way, if such rights of way lapse or terminate or if our facilities are not properly located within the boundaries of such rights of way. Although some of these rights are perpetual in nature, we occasionally obtain the rights to construct and operate our facilities on land owned by third parties and governmental agencies for a specific period of time. If we are unsuccessful in renegotiating rights of way, we may have to relocate our facilities. A loss of rights of way or a relocation could have a material adverse effect on our business, financial condition, results of operations and cash flows and our ability to make distributions to our unitholders.

Whether we have the power of eminent domain varies from state to state, depending upon the laws of the particular state. We must compensate landowners for the use of their property and, in eminent domain actions, such compensation may be determined by a court. Our inability to exercise the power of eminent domain could

negatively affect our business if we were to lose the right to use or occupy the property on which our facilities are located.

We operate in a highly regulated industry and increased costs of compliance with, or liability for violation of, existing or future laws, regulations and other requirements could significantly increase our costs of doing business, thereby adversely affecting our profitability.

Our industry is subject to extensive laws, regulations and other requirements including, but not limited to, those relating to the environment, safety, employment, labor, immigration, minimum wages and overtime pay, health care and benefits, working conditions, public accessibility and other requirements. These laws and regulations are enforced by federal agencies including the EPA, the DOT, OSHA, the FRA, as well as numerous other state, local and federal agencies. Ongoing compliance with, or a violation of, these laws, regulations and other requirements could have a material adverse effect on our business, financial condition and results of operations.

We believe that our operations are in substantial compliance with applicable laws and regulations. However, these laws and regulations, and the interpretation or enforcement thereof, are subject to frequent change and varying interpretation by regulatory authorities, and we are unable to predict the ongoing cost to us of complying with these laws and regulations or the future impact of these laws and regulations on our operations. Violation of environmental or other laws, regulations and permits can result in the imposition of significant administrative, civil and criminal penalties, injunctions and construction bans or delays.

Under various federal, state and local environmental requirements, as the owner or operator of terminals or other facilities, we may be liable for the costs of removal or remediation of contamination at or from our existing locations, whether we knew of, or were responsible for, the presence of such contamination. The failure to timely report and properly remediate contamination may subject us to liability to third parties and may adversely affect our ability to sell or rent our property or to borrow money using our property as collateral. Additionally, we may be liable for the costs of remediating third-party sites where hazardous substances from our operations have been transported for treatment or disposal, regardless of whether we own or operate that site. In the future, we may incur substantial expenditures for investigation or remediation of contamination that has not yet been discovered at our current or former locations or locations that we may acquire.

A discharge of hydrocarbons or hazardous substances into the environment could subject us to substantial expense, including the cost to recover the materials spilled, restore the affected natural resources, pay fines and penalties, and natural resource damages and claims made by employees, neighboring landowners, government authorities and other third parties, including for personal injury and property damage. We may experience future catastrophic sudden or gradual releases into the environment from our facilities or discover historical releases that were previously unidentified or not assessed. Although our inspection and testing programs are designed to prevent, detect and address any such releases promptly, the liabilities incurred due to any future releases into the environment from our assets, have the potential to substantially affect our business. Such events could also subject us to media and public scrutiny that could have a negative effect on our operations and also on the value of our common units.

Changes in laws or standards affecting the transportation of North American crude oil by rail could significantly reduce volumes throughput at our facilities, and as a result our revenues could decline, which would have a material adverse effect on our financial condition, results of operations, cash flows and ability to make distributions to unitholders.

Investigations into past rail accidents involving the transport of crude oil have prompted government agencies and other interested parties to call for increased regulation of the transport of crude oil by rail including in the areas of crude oil constituents, rail car design, routing of trains and other matters. Regulation governing shipments of petroleum crude oil by rail requires shippers to properly test and classify petroleum crude oil and further requires shippers to treat Class 3 petroleum crude oil transported by rail in tank cars as a Packing Group I or II hazardous material only, which creates further classification and testing requirements, along with more severe penalties for

violations. The DOT issued additional rules and regulations that require rail carriers to provide certain notifications to state agencies along routes utilized by trains over a certain length carrying crude oil, enhance safety training standards under the Rail Safety Improvement Act of 2008, require each railroad or contractor to develop and submit a training program to perform regular oversight and annual written reviews and establish enhanced tank car standards and operational controls for high-hazard flammable trains. These rules and any further changes in law, regulations or industry standards that require us to reduce the volatile or flammable constituents in crude oil that is transported by rail, alter the design or standards for rail cars we use, change the routing or scheduling of trains carrying crude oil or any other changes that detrimentally affect the economics of delivering North American crude oil by rail to PBF Energy’s or subsequently to third-party refineries, could increase our costs, which could have a material adverse effect on our financial condition, results of operations, cash flows and our ability to service our indebtedness.

We could incur substantial costs or disruptions in our business if we cannot obtain or maintain necessary permits and authorizations or otherwise comply with health, safety, environmental and other laws and regulations.

Our operations require numerous permits and authorizations under various laws and regulations. These authorizations and permits are subject to revocation, renewal or modification and can require operational changes to limit impacts or potential impacts on the environment and/or health and safety. A violation of authorization or permit conditions or other legal or regulatory requirements could result in substantial fines, criminal sanctions, permit revocations, injunctions, and/or facility shutdowns. In addition, major modifications of our operations could require modifications to our existing permits or upgrades to our existing pollution control equipment. Any or all of these matters could have a negative effect on our business, results of operations and cash flows.

We may incur significant liability for costs and capital expenditures to comply with environmental and health and safety regulations, which are complex and change frequently.

Our operations are subject to federal, state and local laws regulating, among other things, the handling of petroleum, petroleum products and other regulated materials, the emission and discharge of materials into the environment, waste management, and remediation of discharges of petroleum and petroleum products, characteristics and composition of gasoline and distillates and other matters otherwise relating to the protection of the environment. Our operations are also subject to extensive laws and regulations relating to occupational health and safety.

We cannot predict what additional environmental, health and safety legislation or regulations may be adopted in the future, or how existing or future laws or regulations may be administered or interpreted with respect to our operations. Many of these laws and regulations are becoming increasingly stringent, and the cost of compliance with these requirements can be expected to increase over time.

Certain environmental laws impose strict, and in certain circumstances, joint and several, liability for costs of investigation and cleanup of such spills, discharges or releases on owners and operators of, as well as persons who arrange for treatment or disposal of regulated materials at contaminated sites. Under these laws, we may incur liability or be required to pay penalties for past contamination, and third parties may assert claims against us for damages allegedly arising out of any past or future contamination. The potential penalties and clean-up costs for past or future releases or spills, the failure of prior owners of our facilities to complete their clean-up obligations, the liability to third parties for damage to their property, or the need to address newly-discovered information or conditions that may require a response could be significant, and the payment of these amounts could have a material adverse effect on our business, financial condition and results of operations.

Furthermore, the DCR Rail Facility is collocated with PBF Energy’s Delaware City Refinery and is located in Delaware’s coastal zone where certain activities are regulated under the CZA. Therefore, determinations regarding the CZA that impact the Delaware City Refinery may potentially adversely impact our assets even if we are not directly involved.

In 2013, the Delaware City Refinery obtained a permit to allow loading of crude oil onto barges (the “2013 Secretary’s Order”). The issuance of the permit was appealed by environmental interest groups and the DNREC’s issuance was ultimately upheld. The Delaware City Refinery appealed a Notice of Penalty Assessment and Secretary’s Order issued in March 2017 (the “2017 Secretary’s Order”), including a $0.2 million fine, alleging violations of the 2013 Secretary’s Order. DNREC determined that the Delaware City Refinery had violated the 2013 Secretary’s Order by failing to make timely and full disclosure to DNREC about the nature and extent of certain shipments and had misrepresented the number of shipments that went to other facilities. The penalty assessment and 2017 Secretary’s Order conclude that the 2013 Secretary’s Order was violated by the Paulsboro 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 35,700,000 gallons of crude oil in total. On April 28, 2017, the Delaware City Refinery appealed the Notice of Penalty Assessment and 2017 Secretary’s Order. On March 5, 2018, the Notice of Penalty Assessment was settled by DNREC, the Delaware Attorney General and Delaware City Refinery for $0.1 million. The Delaware City Refinery made no admission with respect to the alleged violations and agreed to request a CZA status decision prior to making crude oil shipments to destination other than to the Paulsboro Refinery. The CZA status decision was requested and the outstanding appeal was withdrawn as required under the settlement agreement.

On December 28, 2016, DNREC issued an Ethanol Permit to the Delaware City Refinery allowing the utilization of existing tanks and existing marine loading equipment at their existing facilities to enable denatured ethanol to be loaded from storage tanks to marine vessels and shipped to offsite facilities. On January 13, 2017, the issuance of the Ethanol Permit was appealed by two environmental groups. On February 27, 2017, the Coastal Zone Industrial Board (the “Coastal Zone Board”) held a public hearing and dismissed the appeal, determining that the appellants did not have standing. The appellants filed an appeal of the Coastal Zone Board’s decision with the Delaware Superior Court (the “Superior Court”) on March 30, 2017. On January 19, 2018, the Superior Court rendered an Opinion regarding the decision of the Coastal Zone Board to dismiss the appeal of the Ethanol Permit for the ethanol project. The Judge determined that the record created by the Coastal Zone Board was insufficient for the Superior Court to make a decision, and therefore remanded the case back to the Coastal Zone Board to address the deficiency in the record. Specifically, the Superior Court directed the Coastal Zone Board to address any evidence concerning whether the appellants’ claimed injuries would be affected by the increased quantity of ethanol shipments. On remand, the Coastal Zone Board met on January 28, 2019 and reversed its previous decision on standing, ruling that the appellants have standing to appeal the issuance of the Ethanol Permit. The Delaware City Refinery is currently evaluating its appeal options.

On October 19, 2017, the Delaware City Refinery received approval from DNREC for the construction and operation of the ethanol marketing project to allow for a combined total loading of up to 10,000 bpd, on an annual average basis, of ethanol on to marine vessels at the marine piers and the terminal truck loading rack, subject to certain operational and emissions limitations as well as other conditions. On 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 to the existing vapor recovery unit located at its terminal in Delaware City. This approval is also subject to certain operational and emission limitations as well as other conditions.

Many of our assets have been in service for several years and could require significant expenditures to maintain them. As a result, our maintenance or repair costs may increase in the future.

Our pipelines, terminals and storage assets are generally long-lived assets, and many of them have been in service for many years. The age and condition of our assets could result in increased maintenance or repair expenditures in the future. Any significant increase in these expenditures could adversely affect our results of operations, financial position or cash flows, as well as our ability to service our indebtedness.

Regulation of emissions of greenhouse gases could force us to incur increased capital and operating costs and could have a material adverse effect on our results of operations and financial condition.

The EPA has taken steps to regulate GHGs under the CAA. The EPA has already adopted regulations limiting emissions of GHGs from motor vehicles, addressing the permitting of GHG emissions from stationary sources, and requiring the reporting of GHG emissions from specified large GHG emission sources, including refineries. These and similar regulations could require us to incur costs to monitor and report GHG emissions or reduce emissions of GHGs associated with our operations. In addition, various states, individually as well as in some cases on a regional basis, have taken steps to control GHG emissions, including adoption of GHG reporting requirements, cap and trade systems and renewable portfolio standards. Efforts have also been undertaken to delay, limit or prohibit EPA and possibly state action to regulate GHG emissions, and it is not possible at this time to predict the ultimate form, timing or extent of federal or state regulation. In the event we do incur increased costs as a result of increased efforts to control GHG emissions, we may not be able to pass on any of these costs to our customers. Such requirements also could adversely affect demand for commodities that we handle, transport and store. Any increased costs or reduced demand could materially and adversely affect our business and results of operation.

Climate change could have a material adverse impact on our operations and adversely affect our facilities.

Some scientists have concluded that increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, floods and other climatic events. We believe the issue of climate change will likely continue to receive scientific and political attention, with the potential for further laws and regulations that could materially adversely affect our ongoing operations.

In addition, as many of our facilities are located near coastal areas, rising sea levels may disrupt our ability to operate those facilities or transport crude oil and refined petroleum products. Extended periods of such disruption could have an adverse effect on our results of operation. We could also incur substantial costs to protect or repair these facilities.

Our business may suffer if any of our or PBF Energy’s senior executives or other key employees discontinues employment with us or PBF Energy. Furthermore, a shortage of skilled labor or disruptions in our labor force may make it difficult for us to maintain labor productivity.

Our future success depends to a large extent on the services of our, and our general partner’s, senior executives and other key employees and the same is true of PBF Energy and its senior executives and key employees. Our business depends on our continuing ability to recruit, train and retain highly qualified employees in all areas of our operations, including engineering, accounting, business operations, finance and other key back-office and mid-office personnel, or those of PBF Energy that we rely upon. Furthermore, our operations require skilled and experienced employees with proficiency in multiple tasks. The competition for these employees is intense, and the loss of these executives or employees could harm our business. If any of these executives or other key personnel resigns or becomes unable to continue in his or her present role and is not adequately replaced, either by us or PBF Energy, our business operations could be materially adversely affected.

A portion of our and PBF Energy’s workforce is unionized, and we may face labor disruptions that would interfere with our operations.

At the East Coast Terminals and the East Coast Storage Assets and at PBF Energy’s Delaware City, Toledo, Chalmette and Torrance refineries, most hourly employees are covered by collective bargaining agreements through the USW. The agreements with the USW covering the East Coast Terminals are scheduled to expire in April 2021, the agreement with the USW covering the Delaware City and Chalmette refineries are scheduled to expire in January 2022 and the agreement with the USW covering the East Coast Storage Assets is scheduled to expire in February 2022. The agreements with the USW covering the represented employees at the Torrance Refinery and

Torrance Logistics facilities expired in January 2019, with a tentative agreement in place that would extend the respective collective bargaining agreement expiration dates through January 2022, subject to an affirmative ratification vote and execution. Similarly, at the Paulsboro Refinery, hourly employees are represented by the IOW under a contract scheduled to expire in March 2022. Future negotiations as our collective agreements expire may result in labor unrest for which a strike or work stoppage is possible. Strikes and/or work stoppages could negatively affect our operational and financial results and may increase operating expenses at the refineries.

Our operations could be disrupted if our or PBF Energy’s information systems are hacked or fail, causing increased expenses and loss of sales.

We face various security threats, including cybersecurity threats to gain unauthorized access to sensitive information or to render data systems unusable, threats to the security of our and PBF Energy’s facilities and infrastructure or third-party facilities and infrastructure, such as pipelines. The potential for such security threats has subjected our operations to increased risks that could have a material adverse effect on our business.

Our business is highly dependent on financial, accounting and other data processing systems and other communications and information systems, including such systems of PBF Energy that we utilize pursuant to the Omnibus Agreement. We process a large number of transactions on a daily basis and rely upon the proper functioning of computer systems. If a key system was hacked or otherwise interfered with by an unauthorized access, or was to fail or experience unscheduled downtime for any reason, even if only for a short period, our financial results could be affected adversely.

Additionally, we and PBF Energy rely on information systems across our and its operations, respectively, including the management of supply chain and various other processes and transactions. As a result, a disruption on any information systems at our operating locations, or at PBF Energy’s refineries, pipelines or terminals, may cause disruptions to our collective operations.

These systems could be damaged or interrupted by a security breach, cyber-attack, fire, flood, power loss, telecommunications failure or similar event. We have a formal disaster recovery plan in place, but this plan may not prevent delays or other complications that could arise from an information systems failure. Further, our business interruption insurance may not compensate us adequately for losses that may occur. Additionally, federal legislation relating to cyber-security threats could impose additional requirements on our operations. Finally, our implementation of additional procedures and controls in response to such legislation or to otherwise monitor and mitigate security threats and to increase security for our information, facilities and infrastructure may result in increased capital and operating costs.

Risks Related to Our Indebtedness

The 2023 Notes and the Revolving Credit Facility contain restrictions which could adversely affect our business, financial condition, results of operations and our ability to service our indebtedness.

We are dependent upon the earnings and cash flow generated by our operations in order to meet our debt service obligations. The Revolving Credit Facility and the indenture governing the 2023 Notes each contain, and any future financing agreements may contain, operating and financial restrictions and covenants that could restrict our ability to finance future operations or capital needs, or to expand or pursue our business activities, which may, in turn, limit our ability to service our indebtedness. For example, the Revolving Credit Facility and the indenture that governs the 2023 Notes restrict our ability to, among other things:


•	make investments;


•	incur or guarantee additional indebtedness or issue preferred units;


•	pay dividends or make distributions on units or redeem or repurchase our subordinated debt;


•	create liens;


•	incur dividend or other payment restrictions affecting subsidiaries;


•	sell assets;


•	merge or consolidate with other entities; and


•	enter into transactions with affiliates.

Furthermore, the Revolving Credit Facility contains covenants requiring us to maintain certain financial ratios.

The provisions of the Revolving Credit Facility may affect our ability to obtain future financing and pursue attractive business opportunities and our flexibility in planning for, and reacting to, changes in business conditions. In addition, a failure to comply with the provisions of our existing debt could result in an event of default that could enable our lenders, subject to the terms and conditions of such debt, to declare the outstanding principal, together with accrued interest, to be immediately due and payable. If we were unable to repay the accelerated amounts, our lenders could proceed against the collateral granted to them to secure such debt. If the payment of our debt is accelerated, defaults under our other debt instruments, if any, may be triggered, and our assets may be insufficient to repay such debt in full and the holders of our units could experience a partial or total loss of their investment. Please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources and Liquidity—Credit Facilities.”

Our current and future debt levels may limit our flexibility to obtain financing and to pursue other business opportunities.

At December 31, 2018, we had $156.0 million of borrowings, $4.0 million of letters of credit outstanding and an additional $340.0 million of total unused borrowing capacity under the Revolving Credit Facility and $525.0 million in aggregate principal amount of outstanding 2023 Notes. Our level of indebtedness could have important consequences to us, including the following:


•	our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms;


•	covenants contained in our existing and future credit and debt arrangements will require us to meet financial tests that may affect our flexibility in planning for and reacting to changes in our business, including possible acquisition opportunities;


•	we will need a substantial portion of our cash flow to make principal and interest payments on our indebtedness, reducing the funds that would otherwise be available for operations, future business opportunities and payments of our debt obligations, including the 2023 Notes;


•	our debt level will make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our business or the economy generally; and


•	our flexibility in responding to changing business and economic conditions may be limited.

Any of these factors could result in a material adverse effect on our business, financial condition, results of operations, business prospects and ability to satisfy our obligations under the 2023 Notes.

Our ability to service our debt will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control. If our operating results are not sufficient to service our current or future indebtedness, we will be forced to take actions such as reducing distributions, reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets or seeking additional equity capital. We may not be able to effect any of these actions on satisfactory terms or at all. The amount of cash we have available for distribution to holders of our common units depends primarily on our cash flow rather than on

our profitability, which may prevent us from making distributions, even during periods in which we record net income.

In addition, the amount of cash we have available for distribution does not depend solely on profitability, which may be affected by non-cash items. As a result, we may make cash distributions during periods when we record net losses for financial accounting purposes, and we may not make cash distributions during periods when we record net income for financial accounting purposes.

We have sold our U.S. Treasury securities (“marketable securities”) over time to fund our capital expenditures. In March 2017, we fully repaid our three-year, $300.0 million term loan facility (the “Term Loan”) and, as a result, such securities were no longer used to secure our obligation. During the year-ended December 31, 2017, we liquidated the remaining marketable securities. We may also rely on external sources including other borrowings under the Revolving Credit Facility, and issuances of equity and debt securities to fund any significant future expansion.

Any borrowings and letters of credit issued under the Revolving Credit Facility will be secured, and as a result, effectively senior to the 2023 Notes and the guarantees of the 2023 Notes by the guarantors, to the extent of the value of the collateral securing that indebtedness. In addition, the holders of any future debt we may incur that ranks equally with the 2023 Notes will be entitled to share ratably with the holders of the 2023 Notes in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding up of us. This may have the effect of reducing the amount of proceeds paid to holders of the 2023 Notes in such events.

Increases in interest rates could adversely impact the price of our common units, our ability to issue equity or incur debt for acquisitions or other purposes and our ability to make cash distributions at our intended levels.

Interest rates on future credit facilities and debt offerings could be higher than current levels, causing our financing costs to increase accordingly. As with other yield-oriented securities, our unit price is impacted by the level of our cash distributions and implied distribution yield. The distribution yield is often used by investors to compare and rank yield-oriented securities for investment decision-making purposes. Therefore, changes in interest rates, either positive or negative, may affect the yield requirements of investors who invest in our common units, and a rising interest rate environment could have an adverse impact on the price of our common units, our ability to issue equity or incur debt for acquisitions or other purposes and our ability to make cash distributions at our intended levels.

We do not have the same flexibility as other types of organizations to accumulate cash which may limit cash available to service the 2023 Notes or to repay them at maturity.

Subject to the limitations on restricted payments contained in the Revolving Credit Facility, in the indenture governing the 2023 Notes and any other indebtedness, we distribute all of our “available cash” each quarter to our unitholders of record on the applicable record date.

Available cash generally means, for any quarter, all cash on hand at the end of that quarter:


•	less, the amount of cash reserves established by our general partner to:


◦	provide for the proper conduct of our business (including cash reserves for our future capital expenditures and anticipated future debt service requirements subsequent to that quarter);


◦	comply with applicable law, any of our debt instruments or other agreements; or


◦	provide funds for distributions to our unitholders and to our general partner for any one or more of the next four quarters (provided that our general partner may not establish cash reserves for distributions if the effect of the establishment of such reserves will prevent us from distributing

the minimum quarterly distribution on all common units and any cumulative arrearages on such common units for the current quarter);


•	plus, if our general partner so determines, all or any portion of the cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made subsequent to the end of such quarter.

The purpose and effect of the last bullet point above is to allow our general partner, if it so decides, to use cash from working capital borrowings made after the end of the quarter but on or before the date of determination of available cash for that quarter to pay distributions to unitholders. Under our partnership agreement, working capital borrowings are generally borrowings that are made under a credit facility, commercial paper facility or similar financing arrangement, and in all cases are used solely for working capital purposes or to pay distributions to unitholders, and with the intent of the borrower to repay such borrowings within twelve months with funds other than from additional working capital borrowings.

As a result, we do not accumulate significant amounts of cash and thus do not have the same flexibility as corporations or other entities that do not pay dividends, or distributions, or have complete flexibility regarding the amounts they will distribute to their equity holders. The timing and amount of our distributions could significantly reduce the cash available to pay the principal, premium (if any) and interest on the 2023 Notes. The board of directors of our general partner will determine the amount and timing of such distributions and has broad discretion to establish and make additions to our reserves or the reserves of our operating subsidiaries as it determines are necessary or appropriate.

Although our payment obligations to our unitholders are subordinate to our payment obligations with respect to the 2023 Notes, the value of our units will decrease in correlation with decreases in the amount we distribute per unit. Accordingly, if we experience a liquidity problem in the future, we may not be able to issue equity to recapitalize.

Payment of principal and interest on the 2023 Notes is effectively subordinated to our senior secured debt to the extent of the value of the assets securing the debt and structurally subordinated as to the indebtedness of any of our subsidiaries that do not guarantee the 2023 Notes.

The 2023 Notes are our senior unsecured debt and rank equally in right of payment with all of our other existing and future unsubordinated debt. The 2023 Notes are effectively junior to all our existing and future secured debt, including the Revolving Credit Facility, to the extent of the value of the assets securing the debt, and to the existing and future secured debt of any subsidiaries that guarantee the 2023 Notes to the extent of the value of the assets securing the debt and structurally subordinated to any debt of our subsidiaries that do not guarantee the 2023 Notes. Holders of our secured obligations, including obligations under the Revolving Credit Facility, will have claims that are prior to claims of holders of the 2023 Notes with respect to the assets securing those obligations. In the event of liquidation, dissolution, reorganization, bankruptcy or any similar proceeding, our assets and those of our subsidiaries will be available to pay obligations on the 2023 Notes and the guarantees only after holders of our senior secured debt have been paid the value of the assets securing such debt.

In addition, although all of our existing subsidiaries, other than PBF Finance, initially guarantee the 2023 Notes, in the future, under certain circumstances, the guarantees are subject to release and we may have subsidiaries that are not guarantors. In that case, the 2023 Notes would be structurally junior to the claims of all creditors, including trade creditors and tort claimants, of our subsidiaries that are not guarantors. In the event of the liquidation, dissolution, reorganization, bankruptcy or similar proceeding of the business of a subsidiary that is not a guarantor, creditors of that subsidiary would generally have the right to be paid in full before any distribution is made to us or the holders of the 2023 Notes. Accordingly, there may not be sufficient funds remaining to pay amounts due on all or any of the 2023 Notes.

Further, although PBF LLC provides a limited guarantee of collection of the principal amount of the 2023 Notes, under the terms of such guarantee, PBF LLC will generally not have any obligation to make principal payments with respect to the 2023 Notes unless and until all remedies, including in the context of bankruptcy proceedings, have first been fully exhausted against us with respect to such payment obligations, and holders of the 2023 Notes are still owed amounts in respect of the principal of the 2023 Notes. In addition, PBF LLC is not subject to any of the covenants under the indenture governing the 2023 Notes.

The subsidiary guarantees of the 2023 Notes could be deemed fraudulent conveyances under certain circumstances, and a court may try to subordinate or void the subsidiary guarantees.

Under U.S. bankruptcy law and comparable provisions of state fraudulent transfer laws, a guarantee can be voided, or claims under a guarantee may be subordinated to all other debts of that guarantor if, among other things, the guarantor, at the time it incurred the indebtedness evidenced by its guarantee:


•	received less than reasonably equivalent value or fair consideration for the incurrence of the guarantee and was insolvent or rendered insolvent by reason of such incurrence;


•	was engaged in a business or transaction for which the guarantor’s remaining assets constituted unreasonably small capital; or


•	intended to incur, or believed that it would incur, debts beyond its ability to pay those debts as they mature.

In addition, any payment by that guarantor under a guarantee could be voided and required to be returned to the guarantor or to a fund for the benefit of the creditors of the guarantor.

The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a subsidiary guarantor would be considered insolvent if:


•	the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all of its assets;


•	the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability, including contingent liabilities, on its existing debts as they become absolute and mature; or


•	it could not pay its debts as they became due.

We cannot assure you as to what standard for measuring insolvency a court would apply or that a court would agree with our conclusions.

We may not be able to repurchase the 2023 Notes upon a change of control triggering event, and a change of control triggering event could result in us facing substantial repayment obligations under the Revolving Credit Facility and the 2023 Notes.

Upon occurrence of a change of control triggering event, the indenture governing the 2023 Notes provides that holders will have the right to require us to repurchase all or any part of their 2023 Notes with a cash payment equal to 101% of the aggregate principal amount of 2023 Notes repurchased, plus accrued and unpaid interest. Additionally, our ability to repurchase the 2023 Notes upon such a change of control triggering event would be limited by our access to funds at the time of the repurchase and the terms of our other debt agreements. In addition, the Revolving Credit Facility contains provisions relating to change of control of our general partner, our partnership and our operating subsidiaries. Upon a change of control triggering event, we may be required immediately to repay the outstanding principal, any accrued and unpaid interest on and any other amounts owed by us under the Revolving Credit Facility, the 2023 Notes and any other outstanding indebtedness. The source of funds for these

repayments would be our available cash or cash generated from other sources. However, we cannot assure holders that we will have sufficient funds available or that we will be permitted by our other debt instruments to fulfill these obligations upon a change of control in the future, in which case the lenders under the Revolving Credit Facility would have the right to foreclose on our assets, which would have a material adverse effect on us. Furthermore, certain change of control events would constitute an event of default under the agreement governing the Revolving Credit Facility and we might not be able to obtain a waiver of such defaults. There is no restriction in our partnership agreement on the ability of our general partner to enter into a transaction which would trigger the change of control provisions of the Revolving Credit Facility or the indenture governing the 2023 Notes.

Many of the covenants in the indenture governing the 2023 Notes will terminate if the 2023 Notes are rated investment grade by Moody’s and Standard & Poor’s.

Many of the covenants in the indenture governing the 2023 Notes will terminate if the 2023 Notes are rated investment grade by Moody’s and Standard & Poor’s, provided at such time no default under the indenture has occurred and is continuing. These covenants restrict, among other things, our ability to pay distributions, incur debt, and to enter into certain other transactions. There can be no assurance that the 2023 Notes will ever be rated investment grade or that if they are rated investment grade, that the 2023 Notes will maintain these ratings. However, termination of these covenants would allow us to engage in certain transactions that would not be permitted while these covenants were in force.

Risks Inherent in an Investment in Us

Our general partner and its affiliates, including PBF Energy, have conflicts of interest with us and limited fiduciary duties to us and our unitholders, and they may favor their own interests to the detriment of us and our other common unitholders.

PBF Energy owns and controls our general partner and appoints all of the officers and directors of our general partner. All of the officers and certain of the directors of our general partner are also officers of PBF Energy. Although our general partner has a duty to manage us in a manner that is beneficial to us and our unitholders, the directors and officers of our general partner have a fiduciary duty to manage our general partner in a manner that is beneficial to PBF Energy. Conflicts of interest will arise between PBF Energy and its affiliates, including our general partner, on the one hand, and us and our unitholders, on the other hand. In resolving these conflicts of interest, our general partner may favor its own interests and the interests of PBF Energy over our interests and the interests of our unitholders. These conflicts include the following situations, among others:

•

Neither our partnership agreement nor any other agreement requires PBF Energy to pursue a business strategy that favors us or utilizes our assets, including whether to increase or decrease refinery production, whether to shut down or reconfigure a refinery or what markets to pursue or grow. The directors and officers of PBF Energy have a fiduciary duty to make these decisions in the best interests of the stockholders of PBF Energy, which may be contrary to our interests. PBF Energy may choose to shift the focus of its investment and growth to areas not served by our assets.


•	PBF Energy, as our primary customer, has an economic incentive to cause us not to seek higher service fees, even if such higher rates or fees would reflect rates and fees that could be obtained in arm’s-length, third-party transactions.


•	Our general partner is allowed to take into account the interests of parties other than us, such as PBF Energy, in resolving conflicts of interest.


•	All of the officers and certain of the directors of our general partner are also officers of PBF Energy and will owe fiduciary duties to it. These officers will devote significant time to the business of PBF Energy and will be compensated by it accordingly.


•	PBF Energy may be constrained by the terms of its debt instruments from taking actions, or refraining from taking actions, that may be in our best interests.


•	Our partnership agreement replaces the fiduciary duties that would otherwise be owed by our general partner with contractual standards governing its duties, limits our general partner’s liabilities and restricts the remedies available to our unitholders for actions that, without such limitations, might constitute breaches of fiduciary duty.


•	Except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval.


•	Disputes may arise under our commercial agreements with PBF Energy.


•	Our general partner determines the amount and timing of asset purchases and sales, borrowings, issuances of additional partnership units and the creation, reduction or increase of cash reserves, each of which can affect the amount of cash available for distribution to our unitholders.


•	Our general partner determines the amount and timing of any capital expenditures and whether a capital expenditure is classified as a maintenance capital expenditure, which reduces operating surplus, or an expansion, investment or regulatory capital expenditure, which does not reduce operating surplus. This determination can affect the amount of cash that is distributed to our unitholders.


•	Our general partner determines which costs incurred by it are reimbursable by us.


•	Our general partner may cause us to borrow funds in order to permit the payment of cash distributions.


•	Our partnership agreement permits us to classify up to $20.0 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus. This cash may be used to fund distributions to PBF LLC.


•	Our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf.


•	Our general partner intends to limit its liability regarding our contractual and other obligations.


•	PBF Energy and its controlled affiliates may exercise their right to call and purchase all of the common units not owned by them if they own more than 80% of the common units.


•	Our general partner controls the enforcement of the obligations that it and its affiliates owe to us, including PBF Energy’s obligations under the Omnibus Agreement and its commercial agreements with us.


•	Our general partner decides whether to retain separate counsel, accountants or others to perform services for us.

PBF Energy may compete with us.

PBF Energy may compete with us. Under the Omnibus Agreement, PBF Energy and its affiliates agree not to engage in, whether by acquisition or otherwise, the business of owning or operating any crude oil, refined products or natural gas pipelines, terminals or storage facilities in the U.S. that are not within, directly connected to, substantially dedicated to, or otherwise an integral part of, any refinery owned, acquired or constructed by PBF Energy. This restriction, however, does not apply to:


•	any assets owned by PBF Energy at the closing of the IPO (including replacements or expansions of those assets);


•	any assets acquired or constructed by PBF Energy that are within, substantially dedicated to, or an integral part of any refinery owned, acquired or constructed by PBF Energy;


•	any asset or business that PBF Energy acquires or constructs that has a fair market value of less than $25 million;


•	any asset or business that PBF Energy acquires or constructs that has a fair market value of $25 million or more if the Partnership has been offered the opportunity and has elected not to purchase such asset, group of assets or business;


•	any logistics asset that PBF Energy acquires or constructs that has a fair market value of $25 million or more but comprises less than half of the fair market value (as determined in good faith by PBF Energy) of the total asset package acquired or constructed by PBF Energy;


•	the purchase and ownership of a non-controlling interest in any publicly traded entity; and


•	the ownership of the equity interests in us, our general partner and our affiliates.

As a result, PBF Energy has the ability to construct assets which directly compete with our assets. The limitations on the ability of PBF Energy to compete with us are terminable by either party if PBF Energy ceases to control our general partner.

Pursuant to the terms of our partnership agreement, the doctrine of corporate opportunity, or any analogous doctrine, does not apply to our general partner or any of its affiliates, including PBF Energy and its executive officers and directors. Any such person or entity that becomes aware of a potential transaction, agreement, arrangement or other matter that may be an opportunity for us will not have any duty to communicate or offer such opportunity to us. Any such person or entity will not be liable to us or to any limited partner for breach of any fiduciary duty or other duty by reason of the fact that such person or entity pursues or acquires such opportunity for itself, directs such opportunity to another person or entity or does not communicate such opportunity or information to us. This may create actual and potential conflicts of interest between us and affiliates of our general partner and result in less than favorable treatment of us and our common unitholders.

If you are not an Eligible Holder, your common units may be subject to redemption.

We have adopted certain requirements regarding those investors who may own our common units. Eligible Holders are limited partners whose (i) federal income tax status is not reasonably likely to have a material adverse effect on the rates that can be charged by us on assets that are subject to regulation by the FERC or an analogous regulatory body and (ii) nationality, citizenship or other related status would not create a substantial risk of cancellation or forfeiture of any property in which we have an interest, in each case as determined by our general partner with the advice of counsel. If you are not an Eligible Holder, in certain circumstances as set forth in our partnership agreement, your units may be redeemed by us at the then current market price. The redemption price will be paid in cash or by delivery of a promissory note, as determined by our general partner.

It is our policy to distribute a significant portion of our cash available for distribution to our partners, which could limit our ability to grow and make acquisitions.

We distribute most of our cash available for distribution, which may cause our growth to proceed at a slower pace than that of businesses that reinvest their cash to expand ongoing operations. To the extent we issue additional units in connection with any acquisitions or expansion capital expenditures, the payment of distributions on those additional units may increase the risk that we will be unable to maintain or increase our per unit distribution level. There are no limitations in our partnership agreement on our ability to issue additional units, including units ranking senior to our common units. The incurrence of additional commercial borrowings or other debt to finance our growth strategy would result in increased interest expense, which, in turn, may impact the cash that we have available to distribute to our unitholders.

Our partnership agreement does not contain a requirement for us to pay distributions to our unitholders, and there is no guarantee that we will pay the minimum quarterly distribution, or any distribution, in any quarter.

The market price of our common units may fluctuate significantly, which could cause the value of your investment to decline.

The market price of our common units may decline and will likely continue to be influenced by many factors, some of which are beyond our control, including:


•	the level of our quarterly distributions;


•	our quarterly or annual earnings or those of other companies in our industry;


•	announcements by us or our competitors of significant contracts or acquisitions;


•	changes in accounting standards, policies, guidance, interpretations or principles;


•	changes in tax laws and regulations;


•	general economic conditions, including interest rates and governmental policies impacting interest rates;


•	the failure of securities analysts to cover our common units or changes in financial estimates by analysts; and


•	future sales of our common units.

These and other factors may cause the market price of our units to decrease significantly, which in turn would adversely affect the value of your investment.

In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which could significantly harm our profitability and reputation.

Our partnership agreement replaces our general partner’s fiduciary duties to holders of our common units with contractual standards governing its duties.

Our partnership agreement contains provisions that eliminate the fiduciary standards to which our general partner would otherwise be held by state fiduciary duty law and replaces those duties with several different contractual standards. For example, our partnership agreement permits our general partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner, free of any duties to us and our unitholders other than the implied contractual covenant of good faith and fair dealing, which means that a court will enforce the reasonable expectations of the partners where the language in our partnership agreement does not provide for a clear course of action. This provision entitles our general partner to consider only the interests and factors that it desires and relieves it of any duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or our limited partners. Examples of decisions that our general partner may make in its individual capacity include:


•	how to allocate business opportunities among us and its other affiliates;


•	whether to exercise its limited call right;


•	whether to seek approval of the resolution of a conflict of interest by the conflicts committee of the board of directors of our general partner; and


•	whether or not to consent to any merger or consolidation of the partnership or amendment to the partnership agreement.

Our partnership agreement restricts the remedies available to holders of our common units for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty.

Our partnership agreement contains provisions that restrict the remedies available to unitholders for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty under state fiduciary duty law. For example, our partnership agreement provides that:

•

whenever our general partner, the board of directors of our general partner or any committee thereof (including the conflicts committee) makes a determination or takes, or declines to take, any other action in their respective capacities, our general partner, the board of directors of our general partner and any committee thereof (including the conflicts committee), as applicable, is required to make such determination, or take or decline to take such other action, in good faith, meaning that it subjectively believed that the decision was in the best interests of our partnership, and, except as specifically provided by our partnership agreement, will not be subject to any other or different standard imposed by our partnership agreement, Delaware law, or any other law, rule or regulation, or at equity;


•	our general partner will not have any liability to us or our unitholders for decisions made in its capacity as a general partner so long as such decisions are made in good faith;

•

our general partner and its officers and directors will not be liable for monetary damages to us or our limited partners resulting from any act or omission unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our general partner or its officers and directors, as the case may be, acted in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the conduct was criminal; and


•	our general partner will not be in breach of its obligations under our partnership agreement (including any duties to us or our unitholders) if a transaction with an affiliate or the resolution of a conflict of interest is:


◦	approved by the conflicts committee of the board of directors of our general partner, although our general partner is not obligated to seek such approval;


◦	approved by the vote of a majority of the outstanding common units, excluding any common units owned by our general partner and its affiliates;


◦	determined by the board of directors of our general partner to be on terms no less favorable to us than those generally being provided to or available from unrelated third parties; or


◦	determined by the board of directors of our general partner to be fair and reasonable to us, taking into account the totality of the relationships among the parties involved, including other transactions that may be particularly favorable or advantageous to us.

In connection with a situation involving a transaction with an affiliate or a conflict of interest, any determination by our general partner or the conflicts committee must be made in good faith. If an affiliate transaction or the resolution of a conflict of interest is not approved by our common unitholders or the conflicts committee and the board of directors of our general partner determines that the resolution or course of action taken with respect to the affiliate transaction or conflict of interest satisfies either of the standards set forth in the third and fourth subbullets above, then it will be presumed that, in making its decision, the board of directors of our general partner acted in good faith, and in any proceeding brought by or on behalf of any limited partner or the partnership challenging such determination, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption.

The administrative services fee and reimbursements due to our general partner and its affiliates for services provided to us or on our behalf will reduce our cash available for distribution to our common unitholders. The amount and timing of such reimbursements will be determined by our general partner.

Prior to making any distribution on our common units, we will reimburse our general partner and its affiliates, including PBF Energy, for costs and expenses they incur and payments they make on our behalf. Prior to making

distributions, we will pay our general partner and its affiliates an annual fee for the provision of centralized administrative services and employees and reimburse our general partner and its affiliates for direct or allocated costs and expenses incurred on our behalf pursuant to the Omnibus Agreement, which we currently estimate will total $7.0 million annually. In addition, prior to making distributions, we will pay an annual fee of $8.6 million to PBF Energy for the provision of certain utilities and other infrastructure-related services with respect to our business pursuant to the Services Agreement. Our partnership agreement provides that our general partner will determine in good faith the expenses that are allocable to us. The reimbursement of expenses and payment of fees, if any, to our general partner and its affiliates will reduce the amount of available cash to pay cash distributions to our common unitholders.

Holders of our common units have limited voting rights and are not entitled to elect our general partner or its directors.

Unlike the holders of common stock in a corporation, unitholders have only limited voting rights on matters affecting our business and, therefore, limited ability to influence management’s decisions regarding our business. Unitholders will have no right on an annual or ongoing basis to elect our general partner or its board of directors. Rather, the board of directors of our general partner will be appointed by PBF Energy. Furthermore, if the unitholders are dissatisfied with the performance of our general partner, they will have little ability to remove our general partner. As a result of these limitations, the price at which our common units will trade could be diminished because of the absence or reduction of a takeover premium in the trading price. Our partnership agreement also contains provisions limiting the ability of unitholders to call meetings or to acquire information about our operations, as well as other provisions limiting the unitholders’ ability to influence the manner or direction of management.

Even if holders of our common units are dissatisfied, they cannot currently remove our general partner without its consent.

Unitholders currently are unable to remove our general partner without its consent because our general partner and its affiliates, including PBF Energy, own sufficient units to be able to prevent its removal. The vote of the holders of at least 66²/₃% of all outstanding common units voting together as a single class is required to remove our general partner. PBF Energy currently indirectly owns 44.0% of our outstanding common units.

Our partnership agreement restricts the voting rights of unitholders owning 20% or more of our common units.

Unitholders’ voting rights are further restricted by a provision of our partnership agreement providing that any units held by a person that owns 20% or more of any class of units then outstanding, other than our general partner, its affiliates, their transferees and persons who acquired such units with the prior approval of the board of directors of our general partner, cannot vote on any matter.

Our general partner interest or the control of our general partner may be transferred to a third-party without unitholder consent.

Our general partner may transfer its general partner interest to a third party in a merger or in a sale of all or substantially all of any assets it may own without the consent of the unitholders. Furthermore, there is no restriction in our partnership agreement on the ability of PBF Energy to transfer its membership interest in our general partner to a third party. The new members of our general partner would then be in a position to replace the board of directors and officers of our general partner with their own choices and to control the decisions taken by the board of directors and officers.

We may issue additional units without unitholder approval, which would dilute unitholder interests.

Our partnership agreement does not limit the number of additional limited partner interests, including limited partner interests that rank senior to the common units that we may issue at any time without the approval of our unitholders. The issuance by us of additional common units or other equity securities of equal or senior rank will have the following effects:


•	our existing unitholders’ proportionate ownership interest in us will decrease;


•	the amount of cash available for distribution on each unit may decrease;


•	the ratio of taxable income to distributions may increase;


•	the relative voting strength of each previously outstanding unit may be diminished; and


•	the market price of the common units may decline.

PBF Energy may sell units in the public or private markets, and such sales could have an adverse impact on the trading price of the common units.

As of December 31, 2018, PBF Energy holds 19,953,631 common units. In addition, we have agreed to provide PBF Energy with certain registration rights. The sale of these units in the public or private markets could have an adverse impact on the price of the common units or on any trading market that may develop.

Our general partner intends to limit its liability regarding our obligations.

Our general partner intends to limit its liability under contractual arrangements so that the counterparties to such arrangements have recourse only against our assets and not against our general partner or its assets. Our general partner may therefore cause us to incur indebtedness or other obligations that are nonrecourse to our general partner. Our partnership agreement permits our general partner to limit its liability, even if we could have obtained more favorable terms without the limitation on liability. In addition, we are obligated to reimburse or indemnify our general partner to the extent that it incurs obligations on our behalf. Any such reimbursement or indemnification payments would reduce the amount of cash otherwise available for distribution to our unitholders.

PBF Energy has a limited call right that may require you to sell your units at an undesirable time or price.

If at any time PBF Energy and its controlled affiliates own more than 80% of our common units, PBF Energy will have the right, which it may assign to any of its affiliates or to us, but not the obligation, to acquire all, but not less than all, of the common units held by unaffiliated persons at a price that is not less than their then-current market price, as calculated pursuant to the terms of our partnership agreement. As a result, you may be required to sell your common units at an undesirable time or price and may not receive any return on your investment. You may also incur a tax liability upon a sale of your units. PBF Energy owns 44.0% of our outstanding common units as of December 31, 2018.

Your liability may not be limited if a court finds that unitholder action constitutes control of our business.

A general partner of a partnership generally has unlimited liability for the obligations of the partnership, except for those contractual obligations of the partnership that are expressly made without recourse to the general partner. Our partnership is organized under Delaware law, and we conduct business in and outside of Delaware. The limitations on the liability of holders of limited partner interests for the obligations of a limited partnership have not been clearly established in some of the other states in which we do business. You could be liable for any and all of our obligations as if you were a general partner if a court or government agency were to determine that:


•	we were conducting business in a state but had not complied with that particular state’s partnership statute; or


•	your rights to act with other unitholders to remove or replace our general partner, to approve some amendments to our partnership agreement or to take other actions under our partnership agreement constitute “control” of our business.

Unitholders may have liability to repay distributions that were wrongfully distributed to them.

Under certain circumstances, unitholders may have to repay amounts wrongfully returned or distributed to them. Under Section 17-607 of the Delaware Revised Uniform Limited Partnership Act, we may not make a distribution to you if the distribution would cause our liabilities to exceed the fair value of our assets. Delaware law provides that for a period of three years from the date of an impermissible distribution, limited partners who received the distribution and who knew at the time of the distribution that it violated Delaware law will be liable to the limited partnership for the distribution amount. Transferees of common units are liable both for the obligations of the transferor to make contributions to the partnership that were known to the transferee at the time of transfer and for those obligations that were unknown if the liabilities could have been determined from our partnership agreement. Neither liabilities to partners on account of their partnership interest nor liabilities that are non-recourse to the partnership are counted for purposes of determining whether a distribution is permitted.

The NYSE does not require a publicly traded limited partnership like us to comply with certain of its corporate governance requirements.

We currently list our common units on the NYSE, under the symbol “PBFX.” Because we are a publicly traded limited partnership, the NYSE does not require us to have, and we do not intend to have, a majority of independent directors on our general partner’s board of directors or to establish a compensation committee or a nominating and corporate governance committee. Accordingly, unitholders do not have the same protections afforded to certain corporations that are subject to all of the NYSE corporate governance requirements.

We incur costs as a result of being a publicly traded partnership.

As a public traded partnership, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and requirements of the Sarbanes-Oxley Act of 2002. These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. These compliance requirements and costs will further increase once we are no longer an “emerging growth company,” as defined in the JOBS Act (as defined below), which will occur December 31, 2019 at the latest, as we will need to comply with additional disclosure and reporting requirements, including an attestation report on internal control over financing reporting as of December 31, 2019 issued by our independent registered public accounting firm, and providing additional information regarding executive compensation in our Form 10-K for the year ended December 31, 2019. In addition, sustaining our growth also will require us to commit additional management, operational and financial resources to identify new professionals to join our firm and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. We expect to incur significant additional annual expenses related to these steps and other public company expenses. Before we are able to make distributions to our unitholders, we must first pay or reserve cash for our expenses, including the costs of being a publicly-traded partnership. As a result, the amount of cash we have available for distribution to our unitholders is affected by the costs associated with being a public company.

Pursuant to the Jumpstart Our Business Startups Act of 2012, our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 for so long as we are an emerging growth company.

In general, public companies are required to disclose changes made in their internal control over financial reporting on a quarterly basis and to assess the effectiveness of their system of internal control over financial reporting on an annual basis. However, for as long as we are an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or JOBS Act, we may take advantage of certain exemptions from various requirements that are applicable to other public companies that are not emerging growth companies, including not being required to provide an auditor’s attestation report on the effectiveness of our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, and reduced disclosure obligations regarding executive compensation in our periodic reports. We may remain an emerging growth company for up to five years. Effective internal controls are necessary for us to provide reliable and timely financial reports, prevent fraud and to operate successfully as a publicly traded partnership. We prepare our Consolidated Financial Statements in accordance with GAAP, but our internal accounting controls may not meet all standards applicable to companies with publicly traded securities. Our efforts to develop and maintain our internal controls may not be successful, and we may be unable to maintain effective controls over our financial processes and reporting in the future or to comply with our obligations under Section 404. For example, Section 404 will require us, among other things, to annually review and report on the effectiveness of our internal control over financial reporting. Since the fiscal year ended December 31, 2014, we have complied with Section 404 (except for the requirement for an auditor’s attestation report). Any failure to develop, implement or maintain effective internal controls or to improve our internal controls could harm our operating results or cause us to fail to meet our reporting obligations. Even if we conclude that our internal controls over financial reporting are effective, our independent registered public accounting firm may still decline to attest to the operating effectiveness of our internal controls or may issue a report that is qualified if it is not satisfied with our controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us.

Given the difficulties inherent in the design and operation of internal controls over financial reporting, in addition to our limited accounting personnel and management resources, we can provide no assurance as to our, or our independent registered public accounting firms, future conclusions about the effectiveness of our internal controls, and we may incur significant costs in our efforts to comply with Section 404. Any failure to implement and maintain effective internal controls over financial reporting will subject us to regulatory scrutiny and a loss of confidence in our reported financial information, which could have an adverse effect on our business and would likely have a negative effect on the trading price of our common units.

We may take advantage of these exemptions until we are no longer an “emerging growth company,” which will occur December 31, 2019 at the latest. We cannot predict if investors will find our units less attractive because we will rely on these exemptions. If some investors find our units less attractive as a result, there may be a less active trading market for our units and our trading price may be more volatile.

Tax Risks to Common Unitholders

Our tax treatment depends on our status as a partnership for U.S. federal income tax purposes, as well as our not being subject to a material amount of entity-level taxation by individual states. If the Internal Revenue Service, or IRS, were to treat us as a corporation for U.S. federal income tax purposes, which would subject us to entity-level taxation, or if we were otherwise subjected to a material amount of entity-level taxation, then our distributable cash flow to our unitholders would be substantially reduced.

The anticipated after-tax benefit of an investment in our units depends largely on our being treated as a partnership for U.S. federal income tax purposes.

Despite the fact that we are organized as a limited partnership under Delaware law, we will be treated as a corporation for U.S. federal income tax purposes unless we satisfy a “qualifying income” requirement. Based upon our current operations, we believe we satisfy the qualifying income requirement. Failing to meet the qualifying income requirement or a change in current law could cause us to be treated as a corporation for U.S. federal income tax purposes or otherwise subject us to taxation as an entity.

If we were treated as a corporation for U.S. federal income tax purposes, we would pay U.S. federal income tax on our income at the corporate tax rate and we would also likely be liable for additional state and local income taxes at varying rates. Distributions to our unitholders would generally be taxed again as corporate distributions, and no income, gains, losses, deductions or credits would flow through to our unitholders. Because taxes would be imposed upon us as a corporation, our cash available for distribution to our unitholders would be substantially reduced.

At the state level, several states have been evaluating ways to subject partnerships to entity-level taxation through the imposition of state income, franchise or other forms of taxation. Imposition of a material amount of any of these taxes in the jurisdictions in which we own assets or conduct business could substantially reduce the cash available for distribution to our unitholders.

If we were treated as a corporation or otherwise subjected to a material amount of entity-level taxation, there would be a material reduction in the anticipated cash flow and after-tax return to our unitholders, likely causing a substantial reduction in the value of our common units.

Our partnership agreement provides that if a law is enacted or existing law is modified or interpreted in a manner that subjects us to taxation as a corporation or otherwise subjects us to entity-level taxation for U.S. federal, state or local income tax purposes, the minimum quarterly distribution amount and the target distribution amounts may be adjusted to reflect the impact of that law on us.

The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial or administrative changes or differing interpretations, possibly applied on a retroactive basis.

The present U.S. federal income tax treatment of publicly traded partnerships, including us, or an investment in our common units may be modified by administrative, legislative or judicial interpretation at any time. For example, from time to time members of the U.S. Congress have proposed and considered substantive changes to the existing federal income tax laws, including the most recent tax law change in December 2017, which would affect publicly traded partnerships, including elimination of partnership tax treatment of publicly traded partnerships.

We are unable to predict whether any of these changes or other proposals will ultimately be enacted. Any modification to the U.S. federal income tax laws and interpretations thereof may or may not be applied retroactively and could make it more difficult or impossible for us to meet the exception to be treated as a partnership for U.S. federal income tax purposes and could negatively impact the value of an investment in our common units.

Further, Treasury Regulations under Section 7704(d)(1)(E) of the Code interpret the scope of qualifying income requirements for publicly traded partnerships by providing industry-specific guidance. We believe the income that we treat as qualifying satisfies the requirements under these regulations. However, there are no assurances that the regulations will not be revised to take a position that is contrary to our interpretation of current law.

If the IRS were to contest the U.S. federal income tax positions we take, it may adversely impact the market for our common units and our cash available for distribution to our unitholders might be substantially reduced.

The IRS may adopt positions that differ from the positions that we take, even positions taken with the advice of counsel. It may be necessary to resort to administrative or court proceedings to sustain some or all of the positions we take. A court may not agree with some or all of the positions we take. Any contest with the IRS may materially and adversely impact the market for our common units and the prices at which they trade. Moreover, the costs of any contest between us and the IRS will result in a reduction in cash available for distribution to our unitholders and thus will be borne indirectly by our unitholders.

Pursuant to legislation applicable for partnership tax years beginning after 2017, if the IRS makes audit adjustments to our partnership tax returns, it may assess and collect any taxes (including applicable penalties and interest) resulting from such audit adjustments directly from us. To the extent possible under these new rules our general partner may elect to either pay the taxes (including any applicable penalties and interest) directly to the IRS in the year in which the audit is completed or, if we are eligible, issue a revised information statement to each current and former unitholder with respect to an audited and adjusted partnership tax return. Although our general partner may elect to have our current and former unitholders take such audit adjustment into account and pay any resulting taxes (including applicable penalties or interest) in accordance with their interests in us during the tax year under audit, there can be no assurance that such election will be practical, permissible or effective in all circumstances. If we make payments of taxes and any penalties and interest directly to the IRS in the year in which the audit is completed, our cash available for distribution to our unitholders might be substantially reduced, in which case our current unitholders may bear some or all of the tax liability resulting from such audit adjustment, even if the unitholders did not own units in us during the tax year under audit.

Our unitholders’ share of our income is taxable to them for federal income tax purposes even if they do not receive any cash distributions from us.

Each unitholder is treated as a partner to whom we will allocate taxable income even if the unitholder does not receive any cash distributions from us. Unitholders are required to pay U.S. federal income taxes and, in some cases, state and local income taxes, on their share of our taxable income, whether or not they receive cash distributions from us. Our unitholders may not receive cash distributions from us equal to their share of our taxable income or even equal to the actual tax due from them with respect to that income.

Tax gain or loss on the disposition of our units could be more or less than expected.

If our unitholders sell units, they will recognize a gain or loss for federal income tax purposes equal to the difference between the amount realized and their tax basis in those units. Because distributions in excess of their allocable share of our net taxable income decrease their tax basis in their units, the amount, if any, of such prior excess distributions with respect to the units a unitholder sells will, in effect, become taxable income to the unitholder if it sells such units at a price greater than its tax basis in those units, even if the price received is less than its original cost. Furthermore, a substantial portion of the amount realized on any sale of units, whether or not representing gain, may be taxed as ordinary income due to potential recapture items, including depreciation recapture. Thus, a unitholder may recognize both ordinary income and capital loss from the sale of units if the amount realized on a sale of the units is less than the unitholder’s adjusted basis in units. In addition, because the amount realized includes a unitholder’s share of our non-recourse liabilities, a unitholder that sells units may incur a tax liability in excess of the amount of cash received from the sale.

Unitholders may be subject to limitations on their ability to deduct interest expense we incur.

Our ability to deduct business interest expense is limited for U.S. federal income tax purposes to an amount equal to our business interest income and 30% of our “adjusted taxable income” during the taxable year computed

without regard to any business interest income or expense, and in the case of taxable years beginning before 2022, any deduction allowable for depreciation, amortization, or depletion. Business interest expense that we are not entitled to fully deduct will be allocated to each unitholder as excess business interest and can be carried forward by the unitholder to successive taxable years and used to offset any excess taxable income allocated by us to the unitholder. Any excess business interest expense allocated to a unitholder will reduce the unitholder’s tax basis in its partnership interest in the year of the allocation even if the expense does not give rise to a deduction to the unitholder in that year.

Tax-exempt entities owning our units face unique tax issues that may result in substantially adverse tax consequences to them.

Investment in our units by tax-exempt entities, such as individual retirement accounts (known as “IRAs”), raises tax issues unique to them. For example, virtually all of our income allocated to entities exempt from U.S. federal income tax, including IRAs and other retirement plans, will be unrelated business taxable income and will be taxable to them, despite their exempt status. Tax-exempt entities with multiple unrelated trades or businesses cannot aggregate losses from one unrelated trade or business to offset income from another to reduce total unrelated business taxable income. As a result, it may not be possible for tax-exempt entities to utilize losses from an investment in us to offset unrelated business taxable income from another unrelated trade or business and vice versa. Tax-exempt entities should consult a tax advisor before investing in our common units.

Non-U.S. unitholders will be subject to U.S. federal income taxes and withholding with respect to income and gain from owning our units.

Non-U.S. persons are generally taxed and subject to federal income tax filing requirements on income effectively connected with a U.S. trade or business. Income allocated to our unitholders and any gain from the sale of our common units will generally be considered to be “effectively connected” with a U.S. trade or business. As a result, distributions to a non-U.S. unitholder will be subject to withholding at the highest applicable effective tax rate and a non-U.S. unitholder who sells or otherwise disposes of a common unit will also be subject to U.S. federal income tax on the gain realized from the sale or disposition of that common unit.

Recently enacted legislation also imposes a federal income tax withholding obligation of 10% of the amount realized upon a non-U.S. person’s sale or exchange of an interest in a partnership that is engaged in a U.S. trade or business. However, application of this withholding rule to dispositions of publicly traded partnership interests has been temporarily suspended by the IRS until regulations or other guidance have been issued. It is not clear when or if such regulations or guidance will be issued. Non-U.S. persons should consult a tax advisor before investing in our common units.

We treat each purchaser of our common units as having the same tax benefits without regard to the common units actually purchased. The IRS may challenge this treatment, which could adversely affect the value of our common units.

Because we cannot match transferors and transferees of common units, we will adopt depreciation and amortization positions that may not conform to all aspects of existing Treasury Regulations. A successful IRS challenge to those positions could adversely affect the amount of tax benefits available to unitholders. Our counsel is unable to opine as to the validity of such filing positions. It also could affect the timing of these tax benefits or the amount of gain from a unitholder’s sale of common units and could have a negative impact on the value of our common units or result in tax return audit adjustments.

We prorate our items of income, gain, loss and deduction between transferors and transferees of our common units each month based upon the ownership of our common units on the first day of each month, instead of on the basis of the date a particular unit is transferred. The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders.

We prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based upon the ownership of our units on the first day of each month, instead of on the basis of the date a particular unit is transferred. Although Treasury Regulations allow publicly traded partnerships to use a similar monthly simplifying convention to allocate tax items among transferor and transferee unitholders, these regulations do not specifically authorize all aspects of the proration method we have adopted. Accordingly, our counsel is unable to opine on the validity of our method of allocating income, gain, loss and deduction among transferor and transferee unitholders. If the IRS were to successfully challenge our proration method or new Treasury Regulations were issued, we may be required to change the allocation of items of income, gain, loss and deduction among our unitholders.

A unitholder whose units are the subject of a securities loan (e.g., a loan to a “short seller” to cover a short sale of units) may be considered to have disposed of those units. If so, such unitholders would no longer be treated for tax purposes as a partner with respect to those units during the period of the loan and could recognize gain or loss from the disposition.

Because there are no specific rules governing the U.S. federal income tax consequence of loaning a partnership interest, a unitholder whose units are the subject of a securities loan may be considered to have disposed of the loaned units. In that case, the unitholder may no longer be treated for U.S. federal income tax purposes as a partner with respect to those units during the period of the loan to the short seller and the unitholder may recognize gain or loss from such disposition. Moreover, during the period of the loan, any of our income, gain, loss or deduction with respect to those units may not be reportable by the unitholder and any cash distributions received by the unitholder as to those units could be fully taxable as ordinary income. Unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a securities loan are urged to consult a tax adviser to discuss whether it is advisable to modify any applicable brokerage account agreements to prohibit their brokers from borrowing their units.

We have adopted certain valuation methodologies in determining a unitholder’s allocations of income, gain, loss and deduction. The IRS may challenge these methodologies or the resulting allocations, and such a challenge could adversely affect the value of our common units.

In determining the items of income, gain, loss and deduction allocable to our unitholders, we must routinely determine the fair market value of our assets. Although we may from time to time consult with professional appraisers regarding valuation matters, we make many fair market value estimates ourselves using a methodology based on the market value of our common units as a means to determine the fair market value of our assets. The IRS may challenge these valuation methods and the resulting allocations of income, gain, loss and deduction.

A successful IRS challenge to these methods or allocations could adversely affect the timing, character or amount of taxable income or loss being allocated to our unitholders. It also could affect the amount of gain from our unitholders’ sale of common units and could have a negative impact on the value of the common units or result in audit adjustments to our unitholders’ tax returns without the benefit of additional deductions.

As a result of investing in our common units, our unitholders may become subject to state and local taxes and return filing requirements in jurisdictions where we operate or own or acquire properties.

In addition to U.S. federal income taxes, our unitholders will likely be subject to other taxes, including state and local income taxes, unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which we conduct business or control property now or in the future, even if they do

not live in those jurisdictions. Our unitholders will likely be required to file state and local income tax returns and pay state and local income taxes in some or all of these various jurisdictions. Further, our unitholders may be subject to penalties for failure to comply with those requirements. As we make acquisitions or expand our business, we may control assets or conduct business in additional states that impose a personal income tax. It is our unitholders’ responsibility to file all federal, state and local tax returns. Our counsel has not rendered an opinion on the state or local tax consequences of an investment in our common units.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

See “Item 1. Business.”

ITEM 3. LEGAL PROCEEDINGS

Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believe that we are a party to any litigation that will have a material adverse impact on our financial condition, results of operations or statements of cash flows. We are not aware of any significant legal or governmental proceedings against us, or contemplated to be brought against us.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

UNIT PRICE AND CASH DISTRIBUTIONS

Our common units trade on the NYSE under the symbol “PBFX.” As of February 19, 2019, there were eight holders of record of our 25,395,190 outstanding common units held by the public, including common units held in street name. Our common units represent limited partner interests in us that entitle the holders to the rights and privileges specified in our partnership agreement. In addition, as of February 19, 2019, PBF Energy owned 19,953,631 of our common units, which constitute a 44.0% ownership interest in us.

Distributions of Available Cash

General

Our partnership agreement requires that, on or about the last day of each of February, May, August and November, we distribute all of our available cash to unitholders of record on the applicable record date.

Definition of Available Cash

Available cash generally means, for any quarter, all cash on hand at the end of that quarter:


•	less, the amount of cash reserves established by our general partner to:


◦	provide for the proper conduct of our business (including cash reserves for our future capital expenditures and anticipated future debt service requirements subsequent to that quarter);


◦	comply with applicable law, any of our debt instruments or other agreements; or

◦

provide funds for distributions to our unitholders and to our general partner for any one or more of the next four quarters (provided that our general partner may not establish cash reserves for distributions if the effect of the establishment of such reserves will prevent us from distributing the minimum quarterly distribution on all common units and any cumulative arrearages on such common units for the current quarter);


•	plus, if our general partner so determines, all or any portion of the cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made subsequent to the end of such quarter.

Intent to Distribute the Minimum Quarterly Distribution

We have made and intend to continue to make a minimum quarterly distribution to the holders of our common units of at least $0.30 per unit, or $1.20 per unit on an annualized basis, to the extent we have sufficient cash from our operations after the establishment of cash reserves and the payment of costs and expenses, including reimbursements of expenses to our general partner. However, we have no obligation to, and there is no guarantee

that we will pay the minimum quarterly distribution or any amount on our units in any quarter. Even if our cash distribution policy is not modified or revoked, the amount of distributions paid under our policy and the decision to make any distribution is determined by our general partner, taking into consideration the terms of our partnership agreement.

General Partner Interest

Our general partner owns a non-economic general partner interest in us, which does not entitle it to receive cash distributions. However, our general partner may in the future own common units or other equity securities in us and will be entitled to receive distributions on any such interests.

Incentive Distribution Rights

Prior to the IDR Restructuring, PBF LLC held IDRs that entitled it to receive increasing percentages, up to a maximum of 50.0%, of the cash we distributed from operating surplus in excess of $0.345 per unit per quarter. The maximum distribution of 50.0% included distributions paid to PBF LLC on its partner interest. The maximum distribution of 50.0% did not include any distributions that PBF LLC previously received on common units that it owns. For each of the quarters in the year ended December 31, 2018, PBF LLC was entitled to receive distributions at the 50.0% level. PBF LLC received IDR payments of $12.7 million and $7.6 million from PBFX for the years ended December 31, 2018 and 2017, respectively. As a result of the closing of the IDR Restructuring, the IDRs will be canceled and no subsequent distributions will be made to PBF LLC with respect to the IDRs.

Subordinated Units

In connection with the IPO, we issued 15,886,553 subordinated units to PBF LLC. These units were deemed “subordinated” because for a period of time, referred to as the subordination period, the subordinated units were not entitled to receive any distributions from operating surplus until the common units had received the minimum quarterly distribution plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. Furthermore, no arrearages were paid on the subordinated units. The practical effect of the subordinated units was to increase the likelihood that during the subordination period there was sufficient cash from operating surplus to pay the minimum quarterly distribution on the common units.

On June 1, 2017, the requirements under our partnership agreement for the conversion of all subordinated units into common units were satisfied and the subordination period ended. As a result, each of the 15,886,553 outstanding subordinated units converted on a one-for-one basis into common units and began participating pro rata with the other common units in distributions of available cash. The conversion did not impact the amount of the cash distribution paid or the total number of the outstanding units representing limited partner interests.

UNREGISTERED SALE OF EQUITY SECURITIES

As described elsewhere in this Form 10-K and in our Current Report on Form 8-K filed with the SEC on August 2, 2018, we issued 1,494,134 common units representing limited partner interests in us to PBF LLC, as the consideration for the Development Assets Acquisition on July 31, 2018. The issuance of common units was completed in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended, under Section 4(a)(2), as a transaction by an issuer not involving a public offering. Refer to Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further discussion regarding the Development Assets Acquisition.

During the three months ended December 31, 2018, the Partnership did not repurchase any of its equity securities.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters” for information relating to compensation plans under which the Partnership’s securities are authorized for issuance.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth certain selected financial data as of and for each of the five years in the period ended December 31, 2018, which is derived from the combined financial results of our Predecessor for periods presented through May 13, 2014, and our consolidated financial results for the period beginning May 14, 2014, the date we commenced operations. Our Predecessor includes the financial results of the IPO Assets acquired from PBF Energy and its subsidiaries in connection with the IPO through May 14, 2014. In addition, all financial information has been retrospectively adjusted for the Acquisitions from PBF as noted below.

We acquired from PBF LLC the DCR West Rack and the Toledo Storage Facility in 2014, the DCR Products Pipeline and Truck Rack in 2015, the Torrance Valley Pipeline in 2016, the Paulsboro Natural Gas Pipeline in 2017 and the Development Assets in 2018. All of the Acquisitions from PBF were transfers between entities under common control. Accordingly, our financial information, and that of our Predecessor, contained herein has been retrospectively adjusted to include the historical results of the assets acquired in the Acquisitions from PBF prior to the effective date of each acquisition for all periods presented, with the exception of the Delaware Ethanol Storage Facility, which is considered an asset purchase. Net income (loss) attributable to the Acquisitions from PBF prior to their respective acquisition effective dates was allocated entirely to PBF GP as if only PBF GP had rights to that net income (loss); therefore, there is no retrospective adjustment to net income per unit.

With the exception of revenue generated by the DCR Products Pipeline and the Paulsboro Lube Oil Terminal, our Predecessor generally recognized only the costs and did not record revenue for transactions with PBF Energy prior to the IPO and the Acquisitions from PBF. Affiliate revenues have been recorded for all of the assets subsequent to the commencement of the commercial agreements with PBF Energy upon completion of the IPO and the Acquisitions from PBF. As a result, the information included in the following tables is not necessarily comparable on a year-over-year basis. Refer to “Factors Affecting the Comparability of Our Financial Results” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K for further information and our Consolidated Financial Statements and the related notes thereto included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K.



	Year Ended December 31,
	2018			2017			2016			2015			2014 (a)
	(In thousands, except unit and per unit amounts)
Statement of operations data:
Total revenues (b)	$	283,440		$	257,588		$	189,006		$	142,696		$	59,990
Net income	100,837			110,016			74,807			69,008			10,597
Loss attributable to Predecessor	(2,443		)	(4,986		)	(11,832		)	(4,840		)	(19,367		)
Income attributable to noncontrolling interest	17,819			14,565			5,679			—			—
Net income attributable to the partners	85,461			100,437			80,960			73,848			29,964
Income attributable to the IDR holder (c)	10,011			9,055			4,031			—			—
Net income attributable to PBF Logistics LP unitholders	$	75,450		$	91,382		$	76,929		$	73,848		$	29,964

Net income per limited partner unit (d):
Common units - basic	$	1.73		$	2.17		$	2.01		$	2.18		$	0.94
Common units - diluted	$	1.73		$	2.17		$	2.01		$	2.18		$	0.94
Subordinated units - basic and diluted	$	—		$	2.15		$	2.01		$	2.18		$	0.93

Weighted-average limited partner units outstanding (d):
Common units - basic	43,646,997			35,505,446			22,288,118			17,956,152			16,167,802
Common units - diluted	43,731,299			35,568,760			22,338,784			17,956,152			16,169,827
Subordinated units - basic and diluted	—			6,572,245			15,886,553			15,886,553			15,886,553
Cash distribution per unit	$	1.9900		$	1.8950		$	1.7400		$	1.5200		$	0.7900

Balance sheet data (at period end):
Total assets	$	956,353		$	748,215		$	767,380		$	434,136		$	412,488
Debt	673,324			548,793			571,675			599,635			507,848

Cash flows provided by (used in):
Operating activities	$	133,141		$	138,182		$	94,053		$	73,656		$	5,996
Investing activities	(175,696		)	(50,234		)	70,298			(9,308		)	(282,740		)
Financing activities	42,799			(132,505		)	(118,808		)	(59,835		)	290,834
Net change in cash and cash equivalents	$	244		$	(44,557	)	$	45,543		$	4,513		$	14,090

Capital expenditures (e):
Expansion	$	169,023		$	85,662		$	121,026		$	8,179		$	43,526
Maintenance	6,168			4,596			2,920			1,826			4,285
Regulatory	505			—			—			—			—
Total capital expenditures	$	175,696		$	90,258		$	123,946		$	10,005		$	47,811

____________________


(a)	The information presented includes the results of operations of our Predecessor for periods presented through May 13, 2014 and of our operations for the period beginning May 14, 2014, the date we commenced operations.


(b)	We, and our Predecessor, did not record revenue for the Contributed Assets (with the exception of the Paulsboro Lube Oil Terminal) prior to the IPO or the effective date of the Acquisitions from PBF.


(c)	Subsequent to the closing of the IDR Restructuring, the IDRs will be canceled and, as a result, no income was allocated to the IDR holder, as the holder will not be entitled to an IDR distribution, related to the fourth quarter of 2018.


(d)	Information is applicable for the periods subsequent to the IPO.

(e)

Expansion capital expenditures include acquisitions or capital improvements that we expect will increase our operating income or operating capacity over the long term. Maintenance capital expenditures include expenditures required to maintain equipment, ensure the reliability, integrity and safety of our terminals, tanks and pipelines. Regulatory capital expenditures include expenditures incurred to address environmental laws or regulations.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Acquisitions from PBF were transfers between entities under common control. Accordingly, our financial information, and that of our Predecessor, contained herein has been retrospectively adjusted to include the historical results of the assets acquired in the Acquisitions from PBF prior to the effective date of each acquisition for all periods presented with the exception of the Delaware Ethanol Storage Facility, which is considered an asset purchase.

With the exception of revenue generated by the DCR Products Pipeline and the Paulsboro Lube Oil Terminal, our Predecessor generally recognized only the costs and did not record revenue for transactions with PBF Energy prior to the IPO and the Acquisitions from PBF. Affiliate revenues have been recorded for all of our assets in the Transportation and Terminaling and Storage segments subsequent to the commencement of the commercial agreements with PBF Energy upon completion of the IPO and the Acquisitions from PBF. See “Item 6. Selected Financial Data” and “Factors Affecting the Comparability of Our Financial Results” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further information. See “Overview” in “Item 1. Business” for further information regarding the Acquisitions from PBF.

The following information concerning our results of operations and financial condition should be read in conjunction with “Item 1. Business,” “Item 1A. Risk Factors,” “Item 2. Properties,” “Item 6. Selected Financial Data,” and “Item 8. Financial Statements and Supplementary Data,” respectively, included in this Form 10-K.

IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-K contains certain “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995, which involve risk 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; 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 “Item 1A. Risk Factors,” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-K. All forward-looking information in this Form 10-K 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:


•	our limited operating history as a separate public partnership;


•	changes in general economic conditions;


•	our ability to make, complete and integrate acquisitions from affiliates or third parties, and to realize the benefits from such acquisitions;


•	our ability to have sufficient cash from operations to enable us to pay the minimum quarterly distribution;


•	competitive conditions in our industry;


•	actions taken by our customers and competitors;


•	the supply of, and demand for, crude oil, refined products, natural gas and logistics services;


•	our ability to successfully implement our business plan;


•	our dependence on PBF Energy for a substantial majority of our revenues subjects us to the business risks of PBF Energy, which includes the possibility that contracts will not be renewed because they are no longer beneficial for PBF Energy;


•	a substantial majority of our revenue is generated at PBF Energy’s facilities, particularly at PBF Energy’s Delaware City, Toledo and Torrance refineries, and any adverse development at any of these facilities could have a material adverse effect on us;


•	our ability to complete internal growth projects on time and on budget;


•	the price and availability of debt and equity financing;


•	operating hazards and other risks incidental to handling crude oil, petroleum products and natural gas;


•	natural disasters, weather-related delays, casualty losses and other matters beyond our control;


•	interest rates;


•	labor relations;


•	changes in the availability and cost of capital;


•	the effects of existing and future laws and governmental regulations, including those related to the shipment of crude oil by trains;


•	changes in insurance markets impacting costs and the level and types of coverage available;


•	the timing and extent of changes in commodity prices and demand for PBF Energy’s refined products and natural gas and the differential in the prices of different crude oils;


•	the suspension, reduction or termination of PBF Energy’s obligations under our commercial agreements;


•	disruptions due to equipment interruption or failure at our facilities, PBF Energy’s facilities or third-party facilities on which our business is dependent;


•	incremental costs as a separate public partnership;


•	our general partner and its affiliates, including PBF Energy, have conflicts of interest with us and limited duties to us and our unitholders, and they may favor their own interests to the detriment of us and our other common unitholders;


•	our partnership agreement restricts the remedies available to holders of our common units for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty;


•	holders of our common units have limited voting rights and are not entitled to elect our general partner or its directors;


•	our tax treatment depends on our status as a partnership for U.S. federal income tax purposes, as well as not being subject to a material amount of entity level taxation by individual states;


•	changes at any time (including on a retroactive basis) in the tax treatment of publicly traded partnerships, including related impacts on potential dropdown transactions with PBF LLC, or an investment in our common units;


•	our unitholders will be required to pay taxes on their share of our taxable income even if they do not receive any cash distributions from us;


•	the effects of future litigation; and


•	other factors discussed elsewhere in this Form 10-K.

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

Our forward-looking statements speak only as of the date of this Form 10-K or as of the date which they are made. Except as required by applicable law, including the securities laws of the U.S., we undertake no obligation 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.

Overview

We are a fee-based, growth-oriented, Delaware master limited partnership formed in February 2013 by subsidiaries of PBF Energy to own or lease, operate, develop and acquire crude oil and refined petroleum products terminals, pipelines, storage facilities and similar logistics assets. PBF GP is our general partner and is wholly-owned by PBF LLC. PBF Energy is the sole managing member of PBF LLC and, as of December 31, 2018, owned 99% of the total economic interest in PBF LLC. As of December 31, 2018, PBF LLC held a 44% limited partner interest in us and owned all of the IDRs, with the remaining 56% limited partner interest owned by public unitholders. Immediately following the closing of the IDR Restructuring, our IDRs will be canceled and PBF LLC will hold a 54.1% limited partner interest in us.

Our business includes the assets, liabilities and results of operations of certain crude oil, refined products, natural gas and intermediates terminaling, pipeline, and storage assets, including those previously operated and owned by PBF Holding’s subsidiaries and PBF Holding’s previously held subsidiaries. See “Item 1. Business” in this Form 10-K for more detailed information on our business and assets.

Business Developments

Knoxville Terminals Purchase

On April 16, 2018, our wholly-owned subsidiary, PLPT, completed the purchase of the Knoxville Terminals from Cummins for total cash consideration of $58.0 million, excluding working capital adjustments. The transaction was financed through a combination of cash on hand and borrowings under the Revolving Credit Facility. This acquisition was accounted for as a business combination under GAAP. Refer to Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further discussion regarding the Knoxville Terminals Purchase.

East Coast Storage Assets Acquisition

On July 16, 2018, we entered into an agreement with Crown Point to purchase its wholly-owned subsidiary, CPI, whose assets consist of the East Coast Storage Assets, for total consideration of $127.0 million, including working capital and the Contingent Consideration, comprised of an initial payment at closing of $75.0 million with a remaining balance of $32.0 million being payable one year after closing. The Contingent Consideration included in the East Coast Storage Assets Acquisition pertains to an earn-out provision related to an existing commercial agreement with a third-party, based on the future results of restarting certain of the acquired idled assets. The acquisition date estimated fair value of the Contingent Consideration payable was $21.1 million. The East Coast Storage Assets Acquisition closed on October 1, 2018. The transaction was financed through a combination of cash on hand and borrowings under the Revolving Credit Facility. This acquisition was accounted for as a business combination under GAAP. Refer to Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further discussion regarding the East Coast Storage Assets Acquisition and the Contingent Consideration.

Registered Direct Offering

On July 16, 2018, we completed the Registered Direct Offering, through which we issued and sold to certain funds managed by Tortoise Capital Advisors, L.L.C. an aggregate of 1,775,750 common units representing limited partner interests in us for gross proceeds of $35.0 million. The Registered Direct Offering closed on July 30, 2018.

Development Assets Acquisition

On July 16, 2018, we entered into the Development Assets Contribution Agreements. Pursuant to the Development Assets Contribution Agreements, we acquired from PBF LLC all of the issued and outstanding limited liability company interests of TRLC, whose assets consist of the Toledo Rail Products Facility; CLC, whose assets consist of the Chalmette Truck Rack and the Chalmette Rosin Yard; PTC, whose assets consist of the Paulsboro Lube Oil Terminal; and DSLC, whose assets consist of the Delaware Ethanol Storage Facility. Total consideration for the Development Assets Acquisition was $31.6 million, consisting of 1,494,134 common units representing limited partner interests in us issued to PBF LLC. The Development Assets Acquisition closed on July 31, 2018 and was accounted for as a transfer of assets between entities under common control under GAAP. Refer to Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further discussion regarding the Development Assets Acquisition.

Revolving Credit Facility

On July 30, 2018, we entered into the Revolving Credit Facility with Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders. The Revolving Credit Facility amended and restated our five-year $360.0 million revolving credit facility entered into in connection with the closing of the IPO. Among other things, the Revolving Credit Facility increased the maximum commitment available to us from $360.0 million to $500.0 million and extended the maturity date to July 2023. The commitment fees on the unused portion, the interest rate on advances and the fees for letters of credit are consistent with our original five-year, $360.0 million revolving credit facility. The Revolving Credit Facility contains representations, warranties and covenants by us, as well as customary events of default and indemnification obligations that are consistent with, or more favorable to us, than those in the original facility. Refer to Note 7 “Debt” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further discussion regarding the Revolving Credit Facility.

IDR Restructuring Agreement

On February 13, 2019, we entered into the IDR Restructuring Agreement with PBF LLC and PBF GP, pursuant to which the IDRs held by PBF LLC will be canceled and converted into 10,000,000 newly issued PBFX common units. The IDR Restructuring is expected to close on February 28, 2019. Subsequent to the close of the IDR Restructuring, no distributions will be made to PBF LLC with respect to the IDRs and the newly issued PBFX common units will be entitled to normal distributions.

Rail Agreement Amendments

On February 13, 2019, we amended the existing Amended and Restated Delaware City Rail Terminaling Services Agreement for the inclusion of services through the East Coast Rail Assets. We also entered into a new Terminaling Services Agreement with a four year term starting in 2022 subsequent to the expiration of the Amended and Restated Delaware City Rail Terminaling Services Agreement, related to the DCR Rail Facility and the East Coast Rail Assets, which will reduce the MVC to 95,000 bpd and includes additional services to be provided by us as operator of facilities owned by PBF Holding’s subsidiaries.

Principles of Combination and Consolidation and Basis of Presentation

Our Predecessor did not historically operate its assets for the purpose of generating revenues independent of other PBF Energy businesses that we support, with the exception of the DCR Products Pipeline and the Paulsboro Lube Oil Terminal. In connection with the closing of the IPO and the Acquisitions from PBF, we entered into commercial and service agreements with subsidiaries of PBF Energy under which we operate our assets for the purpose of generating fee-based revenues. We receive, handle and transfer crude oil, refined products and natural gas from sources located throughout the U.S. and Canada and store crude oil, refined products and intermediates for PBF Energy in support of its refineries located in Paulsboro, New Jersey, Delaware City, Delaware, Toledo, Ohio, Chalmette, Louisiana and Torrance, California. We acquired various terminal, pipeline and storage assets from PBF Energy, which are integral components of the crude oil, refined products and natural gas delivery and storage operations at PBF Energy’s refineries. In addition, we generate third-party revenue from certain of our assets, including the Knoxville Terminals and the East Coast Storage Assets subsequent to our acquisitions in 2018.

The consolidated financial statements presented in this Form 10-K include our consolidated financial results as of and for the period ending December 31, 2018. We have retrospectively adjusted our financial information contained herein to include the historical results of the Acquisitions from PBF prior to the effective date of each transaction including the Development Assets, with the exception of the Delaware Ethanol Storage Facility as it is considered an asset purchase, prior to the Development Assets Acquisition.

Business Strategies

We continue to focus on the following strategic areas:

•

Maintain Safe, Reliable and Efficient Operations. We are committed to maintaining and improving the safety, reliability, environmental compliance and efficiency of our operations. We seek to improve operating performance through our commitment to our preventive maintenance program and to employee training and development programs. We will continue to emphasize safety in all aspects of our operations. We believe these objectives are integral to maintaining stable cash flows and are critical to the success of our business.

•

Generate Stable, Fee-Based Cash Flow. We believe our long-term, fee-based logistics contracts provide us with stable, predictable cash flows. We generate a substantial majority of our revenue from PBF Energy under various commercial agreements which include minimum quarterly volume commitments, minimum storage commitments and inflation escalators with initial terms of one to fifteen years. In addition, we generate third-party revenue from certain of our assets, which include fee-based commercial agreements. Over time, we will continue to seek to enter into similar contracts with PBF Energy and/or third parties that generate stable and predictable cash flows.

•

Grow Through Acquisitions and Organic Projects. We were formed by PBF Energy to be the primary vehicle to expand the logistics assets supporting its business. We expect to pursue strategic acquisitions independently and jointly with PBF Energy that complement and grow our asset base. PBF Energy has also granted us a right of first offer to acquire certain of its logistics assets. PBF Energy may, under certain circumstances, offer us the opportunity to purchase additional logistics assets that it may acquire or construct in the future. Furthermore, we believe that our current asset base and our knowledge of the refining logistics sector will allow us to identify third-party acquisitions that will provide compelling returns to our unitholders. We believe certain of our acquisitions, including the Knoxville Terminals Purchase and the East Coast Storage Assets Acquisition, are examples of such strategic acquisitions. In addition, we pursue strategic organic projects that enhance our existing assets and increase our revenues. The Chalmette Storage Tank and the recently announced Development Assets projects are examples of recently completed organic growth projects.


•	Seek to Optimize Our Existing Assets and Pursue Third-Party Volumes. We intend to enhance the profitability of our existing and future assets by increasing throughput volumes from PBF Energy, attracting third-party volumes, improving operating efficiencies and managing costs.

How We Evaluate Our Operations

Our management uses a variety of financial and operating metrics to analyze our business and segment performance. These metrics are significant factors in assessing our operating results and profitability and include but are not limited to volumes, including terminal and pipeline throughput and storage capacity; operating and maintenance expenses; and EBITDA, EBITDA attributable to PBFX and distributable cash flow. We define EBITDA, EBITDA attributable to PBFX and distributable cash flow below.

Volumes. The amount of revenue we generate primarily depends on the volumes of crude oil, refined products and natural gas that we throughput at our terminaling and pipeline operations and our available storage capacity. These volumes are primarily affected by the supply of and demand for crude oil, refined products and natural gas in the markets served directly or indirectly by our assets. Although PBF Energy has committed to minimum volumes under the commercial agreements, our results of operations will be impacted by:


•	PBF Energy’s utilization of our assets in excess of the MVCs;


•	our ability to identify and execute accretive acquisitions and organic expansion projects, and capture incremental PBF Energy or third-party volumes; and


•	our ability to increase throughput volumes at our facilities and provide additional ancillary services at those terminals and pipelines.

Operating and Maintenance Expenses. Our management seeks to maximize the profitability of our operations by effectively managing operating and maintenance expenses. These expenses are comprised primarily of labor expenses, outside contractor expenses, utility costs, insurance premiums, repairs and maintenance expenses and related property taxes. These expenses generally remain relatively stable across broad ranges of throughput volumes but can fluctuate from period to period depending on the mix of activities performed during that period and the timing of these expenses. We will seek to manage our maintenance expenditures on our assets by scheduling maintenance over time to avoid significant variability in our maintenance expenditures and to minimize their impact on our cash flow.

EBITDA, EBITDA attributable to PBFX and Distributable Cash Flow. We define EBITDA as net income (loss) before net interest expense (including amortization of loan fees and debt premium and accretion on discounted liabilities), income tax expense, depreciation and amortization expense. We define EBITDA attributable to PBFX as net income (loss) attributable to PBFX before net interest expense (including amortization of loan fees and debt premium and accretion on discounted liabilities), income tax expense, depreciation and amortization expense attributable to PBFX, which excludes the results of Acquisitions from PBF prior to the effective dates of such transactions. We define distributable cash flow as EBITDA attributable to PBFX plus non-cash unit-based compensation expense, less cash interest, maintenance capital expenditures attributable to PBFX and income taxes. Distributable cash flow will not reflect changes in working capital balances. EBITDA, EBITDA attributable to PBFX and distributable cash flow are not presentations made in accordance with GAAP.

EBITDA, EBITDA attributable to PBFX and distributable cash flow are non-GAAP supplemental financial measures that management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:


•	our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of EBITDA, financing methods;


•	the ability of our assets to generate sufficient cash flow to make distributions to our unitholders;


•	our ability to incur and service debt and fund capital expenditures; and


•	the viability of acquisitions and other capital expenditure projects and the economic returns on various investment opportunities.

We believe that the presentation of EBITDA and EBITDA attributable to PBFX provides useful information to investors in assessing our financial condition and results of operations. We believe that the presentation of distributable cash flow will provide useful information to investors as it is a widely accepted financial indicator used by investors to compare partnership performance and provides investors with another perspective on the operating performance of our assets and the cash our business is generating. EBITDA, EBITDA attributable to PBFX and distributable cash flow should not be considered alternatives to net income, operating income, cash from operations or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA, EBITDA attributable to PBFX and distributable cash flow have important limitations as analytical tools because they exclude some but not all items that affect net income and net cash provided by operating activities. Additionally, because EBITDA, EBITDA attributable to PBFX and distributable cash flow may be defined differently by other companies in our industry, our definition of such matters may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. EBITDA, EBITDA attributable to PBFX and distributable cash flow are reconciled to net income and net cash provided by operating activities in this Form 10-K in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.”

Factors Affecting the Comparability of Our Financial Results

Our results of operations may not be comparable to our historical results of operations for the reasons described below:

Revenues. There are differences in the way our Predecessor historically reported revenues for services provided to PBF Energy and the way we record revenues subsequent to the closing of the IPO and effective dates of the Acquisitions from PBF, and our third-party acquisitions. The majority of our assets have historically been a part of the integrated operations of PBF Energy, and the operation of such assets, prior to our ownership, did not generate third-party or inter-entity revenue with the exception of the DCR Products Pipeline and the Paulsboro Lube Oil Terminal. Revenues are also affected by the completion of organic growth projects, such as the Chalmette Storage Tank.

Following the closing of the IPO, the effective dates of the Acquisitions from PBF and our third-party acquisitions, revenues are primarily generated from the commercial agreements that we entered into with PBF Holding, and others, under which we receive fees for logistics services. Our reported logistics assets revenues are fee-based, and a majority are subject to contractual MVCs. These fees are indexed for inflation in accordance with either the FERC indexing methodology, the PPI or the CPI-U.

General and Administrative Expenses. Historically, our general and administrative expenses included direct monthly charges for the management and operation of our logistics assets and certain expenses allocated by PBF Energy for general corporate services, such as treasury, accounting and legal services. These expenses were allocated to us based on the nature of the expenses and our proportionate share of employee time and headcount. Pursuant to the terms of the Omnibus Agreement, PBF Energy charges us an administrative fee for providing such services. This fee is updated annually and has also been increased in connection with certain of the Acquisitions from PBF as the services have expanded to cover additional assets and personnel. Additionally, we generally reimburse our general partner and its affiliates, including subsidiaries of PBF Energy, for the full salaries and benefits costs of employees who devote more than 50% of their time to us, which is currently estimated to be approximately $2.0 million annually. Refer to “Item 1. Business—Agreements with PBF Energy—Omnibus Agreement” in this Form 10-K for further information regarding these fees and services.

Financing. Historically, we have financed our operations and capital expenditure requirements through internally generated cash flows, proceeds generated by equity and debt offerings and borrowings under the Revolving Credit Facility. In 2016, in connection with the Plains Asset Purchase, we borrowed an additional $98.5 million under the Revolving Credit Facility, which was used to repay $98.3 million of our Term Loan in order to release $98.3 million in marketable securities that had collateralized the Term Loan, and in connection with the

acquisition of the Torrance Valley Pipeline, we borrowed an additional $76.2 million under the Revolving Credit Facility, which was used to repay $76.2 million of our Term Loan in order to release $76.2 million in marketable securities that had collateralized the Term Loan. In connection with the acquisition of the Paulsboro Natural Gas Pipeline in 2017, through our newly acquired subsidiary, Paulsboro Natural Gas Pipeline Company LLC (“PNGPC”), we entered into an $11.6 million intercompany promissory note (the “Affiliate Note Payable”) with Paulsboro Refining Company LLC, a wholly-owned subsidiary of PBF Holding. During March and December 2017, we fully repaid the remaining outstanding balances of the Term Loan and the Affiliate Note Payable, respectively. In October 2017, we issued the additional 2023 Notes for an aggregate principal amount of $175.0 million and used the net proceeds from the additional 2023 Notes to repay a portion of the outstanding borrowings under our existing Revolving Credit Facility. During 2018, we have incurred net borrowings of $126.3 million under the Revolving Credit Facility (or the predecessor arrangement) including borrowings for the Knoxville Terminals Purchase and the East Coast Storage Assets Acquisition. On July 30, 2018, we entered into the amended and restated Revolving Credit Facility, which, among other things, increased the maximum commitment available to us from $360.0 million to $500.0 million.

IDR Restructuring. On February 13, 2019, we entered into the IDR Restructuring Agreement with PBF LLC and PBF GP, pursuant to which the IDRs held by PBF LLC will be canceled and converted into 10,000,000 newly issued PBFX common units. The IDR Restructuring is expected to close on February 28, 2019. Subsequent to the IDR Restructuring, the IDRs will be canceled and no distributions will be made to PBF LLC with respect to the IDRs and the newly issued PBFX common units will be entitled to normal distributions. As such, no income was allocated to the IDR holder for the three months ended December 31, 2018.

Third-party Transactions. On April 29, 2016, we completed the Plains Asset Purchase, which has subsequently generated third-party revenues. On April 17, 2017, our wholly-owned subsidiary, PLPT, acquired the Toledo Products Terminal from Sunoco. On April 16, 2018, we, through our wholly-owned subsidiary, PLPT, acquired the Knoxville Terminals from Cummins. On October 1, 2018, we completed the acquisition of the East Coast Storage Assets from Crown Point.

As a result, our results may not be comparable due to additional revenue (including incremental third-party revenue), operating and maintenance expenses and general and administrative expenses associated with the third-party transactions listed above.

Other Factors That Will Significantly Affect Our Results

Supply and Demand for Crude Oil and Refined Products. We generate revenue by charging fees for receiving, handling, transferring, storing and throughputting crude oil, refined products and natural gas. The majority of our revenues are derived from MVC, fee-based commercial agreements with subsidiaries of PBF Energy with initial terms ranging from one to fifteen years, which enhance the stability of our cash flows. The volume of crude oil, refined products and natural gas that is throughput depends substantially on PBF Energy’s refining margins. Refining margins are greatly dependent upon the price of crude oil or other refinery feedstocks, refined products and natural gas.

Factors driving the prices of petroleum-based commodities include supply and demand in crude oil, gasoline and other refined products. Supply and demand for these products depend on numerous factors outside of our control, including changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, logistics constraints, availability of imports, marketing of competitive fuels, crude oil price differentials and government regulation. Please read “Item 1A. Risk Factors” in this Form 10-K for more information on factors affecting margins and commodity pricing.

Acquisition and Organic Growth Opportunities. We may acquire additional logistics assets from PBF Energy or third parties. Under our Omnibus Agreement, subject to certain exceptions, we have a right of first offer on certain logistics assets owned by PBF Energy to the extent PBF Energy decides to sell, transfer or otherwise dispose

of any of those assets. We also have a right of first offer to acquire additional logistics assets that PBF Energy may construct or acquire in the future. Our commercial agreements provide us with options to purchase certain assets at PBF Holding’s refineries related to our business in the event PBF Energy permanently shuts down PBF Holding’s refineries. In addition, our commercial agreements provide us with the right to use certain assets at PBF Holding’s refineries in the event of a temporary shutdown. Furthermore, we may pursue strategic asset acquisitions from third parties or organic growth projects to the extent such acquisitions or projects complement our or PBF Energy’s existing asset base or provide attractive potential returns. We believe that we are well-positioned to acquire logistics assets from PBF Energy and third parties should such opportunities arise, and identifying and executing acquisitions and organic growth projects is a key part of our strategy. However, if we do not complete acquisitions or organic growth projects on economically acceptable terms, our future growth will be limited, and the acquisitions or projects we do complete may reduce, rather than increase, our cash available for distribution. These acquisitions and organic growth projects could also affect the comparability of our results from period to period. We expect to fund future growth capital expenditures primarily from a combination of cash-on-hand, borrowings under the Revolving Credit Facility and the issuance of additional equity or debt securities. To the extent we issue additional units to fund future acquisitions or expansion capital expenditures, the payments of distributions on those additional units may increase the risk that we will be unable to maintain or increase our per unit distribution level.

Third-Party Business. As of December 31, 2018, PBF Energy accounts for the substantial majority of our revenues and we continue to expect the majority of our revenue for the foreseeable future will be derived from operations supporting PBF Energy’s refineries. We are examining further diversification of our customer base by potentially developing additional third-party throughput volumes in our existing system and continuing to expand our asset portfolio to service third-party customers. Unless we are successful in attracting additional third-party customers, our ability to increase volumes will be dependent on PBF Energy, which has no obligation under our commercial agreements to supply our facilities with additional volumes in excess of its MVCs. If we are unable to increase throughput volumes, future growth may be limited.

Noncontrolling Interest. As a result of the acquisition of the Torrance Valley Pipeline, PBFX Op Co became the managing member of Torrance Valley Pipeline Company LLC (“TVPC”) and fully consolidates TVPC. With respect to the consolidation of TVPC, we record a noncontrolling interest for the remaining 50% economic interest in TVPC held by TVP Holding Company LLC (“TVP Holding”). Noncontrolling interest on the consolidated statements of operations includes the portion of net income or loss attributable to the economic interest in TVPC held by TVP Holding. Noncontrolling interest on the consolidated balance sheets includes the portion of net assets of TVPC attributable to TVP Holding.

Results of Operations

A discussion and analysis of the factors contributing to our results of operations is presented below. The financial information contained herein has been retrospectively adjusted to include the historical results of the Acquisitions from PBF for all periods presented prior to the effective date of each transaction. The financial statements, together with the following information, are intended to provide investors with a reasonable basis for assessing our historical operations, but should not serve as the only criteria for predicting our future performance.

Combined Overview. The following tables summarize our results of operations and financial data for the years ended December 31, 2018, 2017 and 2016. The following data should be read in conjunction with our Consolidated Financial Statements and the notes thereto included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K.



	Year Ended December 31,
	2018			2017			2016
	(In thousands)
Revenue:
Affiliate	$	259,426		$	240,654		$	175,448
Third-Party	24,014			16,934			13,558
Total revenue	283,440			257,588			189,006

Costs and expenses:
Operating and maintenance expenses	88,390			73,521			51,393
General and administrative expenses	21,371			16,284			16,967
Depreciation and amortization	29,809			24,404			15,406
Total costs and expenses	139,570			114,209			83,766

Income from operations	143,870			143,379			105,240

Other expense:
Interest expense, net	(40,541		)	(31,875		)	(28,755		)
Amortization of loan fees and debt premium	(1,717		)	(1,488		)	(1,678		)
Accretion on discounted liabilities	(775		)	—			—
Net income	100,837			110,016			74,807
Less: Net loss attributable to Predecessor	(2,443		)	(4,986		)	(11,832		)
Less: Net income attributable to noncontrolling interest	17,819			14,565			5,679
Net income attributable to the partners	85,461			100,437			80,960
Less: Net income attributable to the IDR holder	10,011			9,055			4,031
Net income attributable to PBF Logistics LP unitholders	$	75,450		$	91,382		$	76,929

Other Data:
EBITDA attributable to PBFX	$	152,428		$	152,084		$	121,911
Distributable cash flow	111,586			120,038			94,547
Capital expenditures, including acquisitions	175,696			90,258			123,946

Reconciliation of Non-GAAP Financial Measures. As described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—How We Evaluate Our Operations,” our management uses EBITDA, EBITDA attributable to PBFX and distributable cash flow to analyze our performance. The following table presents a reconciliation of EBITDA, EBITDA attributable to PBFX and distributable cash flow to net income, the most directly comparable GAAP financial measure of operating performance on a historical basis, for the periods indicated.



	Year Ended December 31,
	2018			2017			2016
	(In thousands)
Net income	$	100,837		$	110,016		$	74,807
Interest expense, net	40,541			31,875			28,755
Amortization of loan fees and debt premium	1,717			1,488			1,678
Accretion of discounted liabilities	775			—			—
Depreciation and amortization	29,809			24,404			15,406
EBITDA	173,679			167,783			120,646
Less: Predecessor EBITDA	(2,051		)	(4,303		)	(8,763		)
Less: Noncontrolling interest EBITDA	23,302			20,002			7,498
EBITDA attributable to PBFX	152,428			152,084			121,911
Non-cash unit-based compensation expense	5,757			5,345			4,360
Cash interest	(40,685		)	(33,050		)	(28,844		)
Maintenance capital expenditures attributable to PBFX	(5,914		)	(4,341		)	(2,880		)
Distributable cash flow	$	111,586		$	120,038		$	94,547

The following table presents a reconciliation of EBITDA, EBITDA attributable to PBFX and distributable cash flow to net cash provided by operating activities, the most directly comparable GAAP financial measure of liquidity on a historical basis, for the periods indicated.



	Year Ended December 31,
	2018			2017			2016
	(In thousands)
Net cash provided by operating activities	$	133,141		$	138,182		$	94,053
Change in operating assets and liabilities	5,754			3,071			2,198
Interest expense, net	40,541			31,875			28,755
Non-cash unit-based compensation expense	(5,757		)	(5,345		)	(4,360		)
EBITDA	173,679			167,783			120,646
Less: Predecessor EBITDA	(2,051		)	(4,303		)	(8,763		)
Less: Noncontrolling interest EBITDA	23,302			20,002			7,498
EBITDA attributable to PBFX	152,428			152,084			121,911
Non-cash unit-based compensation expense	5,757			5,345			4,360
Cash interest	(40,685		)	(33,050		)	(28,844		)
Maintenance capital expenditures attributable to PBFX	(5,914		)	(4,341		)	(2,880		)
Distributable cash flow	$	111,586		$	120,038		$	94,547

The following table presents a reconciliation of net income attributable to noncontrolling interest and noncontrolling interest EBITDA for informational purposes.



	Year Ended December 31,
	2018		2017		2016
	(In thousands)
Net income attributable to noncontrolling interest	$	17,819	$	14,565	$	5,679
Depreciation and amortization related to noncontrolling interest (a)	5,483		5,437		1,819
Noncontrolling interest EBITDA	$	23,302	$	20,002	$	7,498

____________


(a)	Represents 50% of depreciation and amortization for TVPC for the years ended December 31, 2018 and 2017.

The following tables present a summary of our results of operations for the years ended December 31, 2018, 2017 and 2016, disaggregated to present the results of our operations and the pre-acquisition results of the Development Assets, PNGPC and TVPC, respectively. For purpose of the tables, PBF Logistics LP includes the post-close results of such assets.



	Year Ended December 31, 2018
	PBF Logistics LP			Development Assets			Consolidated Results
	(In thousands)
Revenue:
Affiliate	$	259,426		$	—		$	259,426
Third-party	22,085			1,929			24,014
Total revenue	281,511			1,929			283,440

Costs and expenses:
Operating and maintenance expenses	84,410			3,980			88,390
General and administrative expenses	21,371			—			21,371
Depreciation and amortization	29,417			392			29,809
Total costs and expenses	135,198			4,372			139,570

Income (loss) from operations	146,313			(2,443		)	143,870

Other expense:
Interest expense, net	(40,541		)	—			(40,541		)
Amortization of loan fees and debt premium	(1,717		)	—			(1,717		)
Accretion on discounted liabilities	(775		)	—			(775		)
Net income (loss)	$	103,280		$	(2,443	)	$	100,837



	Year Ended December 31, 2017
	PBF Logistics LP			PNGPC			Development Assets			Consolidated Results
	(In thousands)
Revenue:
Affiliate	$	240,654		$	—		$	—		$	240,654
Third-party	14,159			—			2,775			16,934
Total revenue	254,813			—			2,775			257,588

Costs and expenses:
Operating and maintenance expenses	66,443			40			7,038			73,521
General and administrative expenses	16,284			—			—			16,284
Depreciation and amortization	23,721			110			573			24,404
Total costs and expenses	106,448			150			7,611			114,209

Income (loss) from operations	148,365			(150		)	(4,836		)	143,379

Other expense:
Interest expense, net	(31,875		)	—			—			(31,875		)
Amortization of loan fees and debt premium	(1,488		)	—			—			(1,488		)
Net income (loss)	$	115,002		$	(150	)	$	(4,836	)	$	110,016



	Year Ended December 31, 2016
	PBF Logistics LP			TVPC			PNGPC			Development Assets			Consolidated Results
	(In thousands)
Revenue:
Affiliate	$	175,448		$	—		$	—		$	—		$	175,448
Third-party	11,887			—			—			1,671			13,558
Total revenue	187,335			—			—			1,671			189,006

Costs and expenses:
Operating and maintenance expenses	41,317			2,845			401			6,830			51,393
General and administrative expenses	16,609			353			5			—			16,967
Depreciation and amortization	12,337			1,819			827			423			15,406
Total costs and expenses	70,263			5,017			1,233			7,253			83,766

Income (loss) from operations	117,072			(5,017		)	(1,233		)	(5,582		)	105,240

Other expense:
Interest expense, net	(28,755		)	—			—			—			(28,755		)
Amortization of loan fees	(1,678		)	—			—			—			(1,678		)
Net income (loss)	$	86,639		$	(5,017	)	$	(1,233	)	$	(5,582	)	$	74,807

Summary. Our net income for the year ended December 31, 2018 decreased by approximately $9.2 million, or 8.3%, to $100.8 million from $110.0 million for the year ended December 31, 2017. The decrease in net income was primarily due to the following:


•	an increase in operating and maintenance expenses of approximately $14.9 million, or 20.2%, as a result of increased utilities expenses within our Transportation and Terminaling segment, higher maintenance and materials expenses and expenses related to the operations of recently acquired or constructed assets,

partially offset by a decrease in outside services expenses within our Transportation and Terminaling segment;


•	an increase in general and administrative expenses of approximately $5.1 million, or 31.2%, as a result of higher acquisition related costs, higher audit and tax-related fees and higher outside services expenses;


•	an increase in depreciation and amortization expenses of approximately $5.4 million, or 22.1%, related to the timing of acquisitions and new assets being placed in service;


•	an increase in interest expense, net of approximately $8.7 million, or 27.2%, attributable to the interest costs associated with the additional 2023 Notes, partially offset by lower borrowings under the Revolving Credit Facility for a majority of the year;


•	an increase in amortization of loan fees and debt premium of approximately $0.2 million, or 15.4%, attributable to the increase in loans fees and debt premium associated with the additional 2023 Notes and the Revolving Credit Facility;


•	an increase in accretion of discounted liabilities of approximately $0.8 million, or 100.0%, attributable to the accretion of the discounted liabilities recorded in connection with the East Coast Storage Assets Acquisition;

partially offset by the following:

•

an increase in total revenue of approximately $25.9 million, or 10.0%, primarily attributable to operations of recently acquired or constructed assets and the inflation rate adjustments implemented in accordance with certain of our commercial agreements (“Inflation Rate Increase”), partially offset by decreases in throughput fees resulting from the amendments to the Delaware City Rail Terminaling Services Agreement and the Delaware West Ladder Rack Terminaling Services Agreement, each between Delaware City Terminaling Company LLC and PBF Holding, effective January 1, 2018 (together, the “Amended and Restated Rail Agreements”).

Our net income for the year ended December 31, 2017 increased by approximately $35.2 million, or 47.1%, to $110.0 million from $74.8 million for the year ended December 31, 2016. The increase in net income was primarily due to the following:


•	an increase in total revenue of approximately $68.6 million, or 36.3%, primarily attributable to the full year operations of the Torrance Valley Pipeline and the East Coast Terminals, in addition to operations of assets that were acquired or constructed in 2017;


•	a decrease in general and administrative expenses of approximately $0.7 million, or 4.0%, as a result of lower acquisition related costs, partially offset by higher unit-based compensation expense and higher fees associated with the Omnibus Agreement;


•	a decrease in amortization of loan fees and debt premium of approximately $0.2 million, or 11.3%, attributable to the repayment of the Term Loan, offset by the increase in loans fees and debt premium associated with the additional 2023 Notes;

partially offset by the following:


•	an increase in operating and maintenance expenses of approximately $22.1 million, or 43.1%, primarily attributable to full year operations of the Torrance Valley Pipeline and the East Coast Terminals, in addition to operations of assets that were acquired or constructed in 2017, partially offset by a decrease in outside services due to lower throughput at certain of our assets;


•	an increase in depreciation and amortization expenses of approximately $9.0 million, or 58.4%, related to the timing of acquisitions and new assets being placed in service; and


•	an increase in interest expense, net of approximately $3.1 million, or 10.9%, attributable to the interest costs associated with the additional 2023 Notes, higher borrowings under the Revolving Credit Facility for a majority of the year and the Affiliate Note Payable.

Segment Information

Our operations are comprised of operating segments, which are strategic business units that offer different services in various geographical locations. We review operations in two reportable segments: (i) Transportation and Terminaling; and (ii) Storage. Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. Management measures the operating performance of each of its reportable segments based on the segment operating income. Segment operating income is defined as net revenue less operating expenses and depreciation and amortization. General and administrative expenses and interest expenses not included in the Transportation and Terminaling and Storage segments are included in Corporate. Segment reporting is further discussed in Note 13 “Segment Information” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K.

Transportation and Terminaling Segment

The following table and discussion is an explanation of our results of operations of the Transportation and Terminaling segment for the years ended December 31, 2018, 2017 and 2016:



	Year Ended December 31,
	2018		2017		2016
	(In thousands, except as noted)
Revenue:
Affiliate	$	232,316	$	217,404	$	153,637
Third-party	18,096		16,934		13,558
Total revenue	250,412		234,338		167,195

Costs and expenses:
Operating and maintenance expenses	76,176		65,885		42,705
Depreciation and amortization	24,899		21,650		12,978
Total costs and expenses	101,075		87,535		55,683
Transportation and Terminaling Segment Operating Income	$	149,337	$	146,803	$	111,512

Key Operating Information
Transportation and Terminaling Segment
Terminals
Total throughput (bpd)*	291,655		204,833		164,210
Lease tank capacity (average lease capacity barrels per month)**	2,067,660		2,089,529		2,023,304
Pipelines
Total throughput (bpd)*	164,787		140,900		149,831
Lease tank capacity (average lease capacity barrels per month)**	1,583,294		1,250,930		1,439,846

____________

(*) Calculated as the sum of the average throughput per day for each asset group for the period presented.


(**)	Lease capacity is based on tanks in service and average lease capacity available during the period.

Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

Revenue. Revenue increased by approximately $16.1 million, or 6.9%, to $250.4 million for the year ended December 31, 2018 compared to $234.3 million for the year ended December 31, 2017. The increase in revenue was primarily attributable to operations of recently acquired or constructed assets, increased throughput in excess of MVC levels at certain of our assets and the Inflation Rate Increase, partially offset by decreases in throughput fees resulting from the Amended and Restated Rail Agreements.

Operating and Maintenance Expenses. Operating and maintenance expenses increased by approximately $10.3 million, or 15.6%, to $76.2 million for the year ended December 31, 2018 compared to $65.9 million for the year ended December 31, 2017. The increase in operating and maintenance expenses was primarily attributable to operations of recently acquired or constructed assets, higher utilities expenses related to increased throughput volumes on our pipeline assets and higher maintenance and materials expenses, partially offset by a decrease in outside services expenses.

Depreciation and Amortization. Depreciation and amortization expense increased by approximately $3.2 million, or 15.0%, to $24.9 million for the year ended December 31, 2018 compared to $21.7 million for the year ended December 31, 2017. The increase in depreciation and amortization expense was primarily attributable to the timing of acquisitions and new assets being placed in service.

Year Ended December 31, 2017 Compared to Year Ended December 31, 2016

Revenue. Revenue increased by approximately $67.1 million, or 40.2%, to $234.3 million for the year ended December 31, 2017 compared to $167.2 million for the year ended December 31, 2016. The increase in revenue was primarily attributable to the full year operations of the Torrance Valley Pipeline and the East Coast Terminals, in addition to operations of assets that were acquired or constructed in 2017.

Operating and Maintenance Expenses. Operating and maintenance expenses increased by approximately $23.2 million, or 54.3%, to $65.9 million for the year ended December 31, 2017 compared to $42.7 million for the year ended December 31, 2016. The increase in operating and maintenance expenses was primarily attributable to the full year operations of the Torrance Valley Pipeline and the East Coast Terminals, in addition to operations of assets that were acquired or constructed in 2017, partially offset by a decrease in outside services due to lower throughput at certain of our assets.

Depreciation and Amortization. Depreciation and amortization expense increased by approximately $8.7 million, or 66.8%, to $21.7 million for the year ended December 31, 2017 compared to $13.0 million for the year ended December 31, 2016. The increase in depreciation and amortization expense was primarily attributable to the timing of acquisitions and new assets being placed in service.

Storage Segment

The following table and discussion is an explanation of our results of operations of the Storage segment for the years ended December 31, 2018, 2017 and 2016:



	Year Ended December 31,
	2018		2017		2016
	(In thousands, except as noted)
Revenue:
Affiliate	$	27,110	$	23,250	$	21,811
Third-party	5,918		—		—
Total revenue	33,028		23,250		21,811

Costs and expenses:
Operating and maintenance expenses	12,214		7,636		8,688
Depreciation and amortization	4,910		2,754		2,428
Total costs and expenses	17,124		10,390		11,116
Storage Segment Operating Income	$	15,904	$	12,860	$	10,695

Key Operating Information
Storage Segment
Storage capacity reserved (average shell capacity barrels per month)*	7,550,292		4,363,630		3,635,236

____________


(*)	Storage capacity is based on tanks in service and average shell capacity available during the period.

Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

Revenue. Revenue increased by approximately $9.8 million, or 42.1%, to $33.0 million for the year ended December 31, 2018 compared to $23.3 million for the year ended December 31, 2017. The increase in revenue was primarily attributable to operations of the East Coast Storage Assets, the full year operations of the Chalmette Storage Agreement commencing in November 2017, higher available storage capacity and the Inflation Rate Increase.

Operating and Maintenance Expenses. Operating and maintenance expenses increased by approximately $4.6 million, or 60.0%, to $12.2 million for the year ended December 31, 2018 compared to $7.6 million for the year ended December 31, 2017. The increase in operating and maintenance expenses was primarily attributable to higher maintenance activity, as well as expenses associated with the East Coast Storage Assets and the full year operations of the Chalmette Storage Tank.

Depreciation and Amortization. Depreciation and amortization expense increased by approximately $2.2 million, or 78.3%, to $4.9 million for the year ended December 31, 2018 compared to $2.8 million for the year ended December 31, 2017. The increase in depreciation and amortization expense was primarily attributable to the East Coast Storage Assets and a full year of depreciation for the Chalmette Storage Tank.

Year Ended December 31, 2017 Compared to Year Ended December 31, 2016

Revenue. Revenue increased by approximately $1.4 million, or 6.6%, to $23.3 million for the year ended December 31, 2017 compared to $21.8 million for the year ended December 31, 2016. The increase in

revenue was primarily attributable to higher storage capacity at the Toledo Storage Facility, as well as the Chalmette Storage Tank commencing service in November 2017.

Operating and Maintenance Expenses. Operating and maintenance expenses decreased by approximately $1.1 million, or 12.1%, to $7.6 million for the year ended December 31, 2017 compared to $8.7 million for the year ended December 31, 2016. The decrease in operating and maintenance expenses was primarily attributable to lower maintenance activity.

Depreciation and Amortization. Depreciation and amortization expense increased by approximately $0.3 million, or 13.4%, to $2.8 million for the year ended December 31, 2017 compared to $2.4 million for the year ended December 31, 2016. The increase in depreciation and amortization expense was primarily attributable to the Chalmette Storage Tank being placed in service in 2017.

Liquidity and Capital Resources

During 2018, we incurred net borrowings of $126.3 million including borrowings for the Knoxville Terminals Purchase and the East Coast Storage Assets Acquisition. On July 30, 2018, we entered into the amended and restated Revolving Credit Facility, which increased the maximum commitment available to us from $360.0 million to $500.0 million.

Refer to Notes 4 “Acquisitions” and 7 “Debt” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for additional information.

At December 31, 2018, we had $156.0 million of borrowings and $4.0 million of letters of credit outstanding under the Revolving Credit Facility and $525.0 million in aggregate principal amount of outstanding 2023 Notes.

We expect our ongoing sources of liquidity to include cash generated from operations (including proceeds from our commercial agreements with PBF Holding), borrowings under the Revolving Credit Facility and the issuance of additional debt and equity securities as appropriate given market conditions. We expect that these sources of funds will be adequate to provide for our short-term and long-term liquidity needs. We have sold our marketable securities over time to fund our capital expenditures. As a result, our marketable securities, coupled with the availability under the Revolving Credit Facility, initially provided us with the ability to fund capital expenditures without increasing the net amount of our outstanding borrowings. All of our marketable securities have been liquidated as of December 31, 2017. Our ability to meet our debt service obligations and other capital requirements, including capital expenditures and distributions on our units, as well as make future acquisitions, will depend on our future operating performance which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are beyond our control. As a normal part of our business, depending on market conditions, we will from time to time consider opportunities to repay, redeem, repurchase or refinance our indebtedness.

We have paid, and intend to continue to pay, at least the minimum quarterly distribution of $0.30 per unit per quarter, or $1.20 per unit on an annualized basis, which aggregates to approximately $13.8 million per quarter and approximately $55.2 million per year based on the number of common units outstanding as of December 31, 2018. Immediately following the closing of the IDR Restructuring, we will require available cash of approximately $16.8 million on an annualized basis, or approximately $67.2 million per year, to pay the minimum quarterly distribution.

The tables below summarize our 2018 and 2017 quarterly distributions related to our quarterly financial results:



Quarter Ended	Declaration Date	Quarterly Distribution per Common and Subordinated Unit		Quarterly Distribution per Common and Subordinated Unit, Annualized		Total Cash Distribution (in thousands) (a)
December 31, 2018	February 14, 2019	$	0.5050	$	2.0200	$	27,951
September 30, 2018	October 31, 2018	0.5000		2.0000		26,315
June 30, 2018	August 2, 2018	0.4950		1.9800		25,860
March 31, 2018	May 3, 2018	0.4900		1.9600		23,553
December 31, 2017	February 15, 2018	0.4850		1.9400		23,058
September 30, 2017	November 2, 2017	0.4800		1.9200		22,636
June 30, 2017	August 3, 2017	0.4700		1.8800		21,797
March 31, 2017	May 4, 2017	0.4600		1.8400		20,938

____________


(a)	Cash distributions are paid in the quarter subsequent to the period in which the distributions are earned. For the quarter ended December 31, 2018, total cash distribution was estimated based on vested shares anticipated to be outstanding as of the record date. We do not expect the actual distribution to be materially different.

Expiration of Subordination Period

On June 1, 2017, the requirements under our partnership agreement for the conversion of all subordinated units into common units were satisfied and the subordination period ended. As a result, each of our 15,886,553 outstanding subordinated units converted on a one-for-one basis into common units and began participating pro rata with the other common units in distributions of available cash. The conversion did not impact the amount of the cash distribution paid or the total number of our outstanding units representing limited partner interests. Refer to Notes 8 “Equity” and 10 “Net Income per Unit” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for additional information.

Credit Facilities

Revolving Credit Facility

The maximum amount of the Revolving Credit Facility was increased to $500.0 million in July 2018. We have the ability to further increase the maximum amount of the Revolving Credit Facility by an additional $250.0 million, to a total facility size of $750.0 million, subject to receiving increased commitments from its lenders or other financial institutions and satisfaction of certain conditions. Refer to Note 7 “Debt” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for further information regarding the Revolving Credit Facility, as well as information pertaining to corresponding financial and other covenants. We are in compliance with our financial and other covenants as of December 31, 2018.

Senior Notes

On May 12, 2015, we and our wholly-owned subsidiary, PBF Finance (and together with us, the “Issuers”), issued $350.0 million aggregate principal amount of the initial 2023 Notes. On October 6, 2017, we issued $175.0 million in aggregate principal amount of the additional 2023 Notes. The additional 2023 Notes were issued under the indenture governing the initial 2023 Notes.

The 2023 Notes are guaranteed on a senior unsecured basis by all of our subsidiaries. In addition, PBF LLC provides a limited guarantee of collection of the principal amount of the 2023 Notes, but is not otherwise subject

to the covenants of the indenture governing the 2023 Notes. We have the option to repurchase all or a portion of the 2023 Notes at varying prices no less than 100% of the principal amounts of the notes plus accrued and unpaid interest. The holders of the 2023 Notes have the option to require that we repurchase the principal amounts of the 2023 Notes together with any accrued and unpaid interest to the date of redemption only upon a change in control, certain asset sale transactions, or in the event of a default as defined in the indenture governing the 2023 Notes. In addition, the 2023 Notes contain covenants limiting our and our restricted subsidiaries’ ability to make certain types of investments, incur additional debt, issue preferred equity, create liens, make certain payments, sell assets, merge or consolidate with other entities, and enter into transactions with affiliates. We are in compliance with the covenants as of December 31, 2018.

Cash Flows

The following table sets forth our cash flows for the periods indicated:



	Year Ended December 31,
	2018			2017			2016
	(In thousands)
Net cash provided by operating activities	$	133,141		$	138,182		$	94,053
Net cash (used in) provided by investing activities	(175,696		)	(50,234		)	70,298
Net cash provided by (used in) financing activities	42,799			(132,505		)	(118,808		)
Net change in cash and cash equivalents	$	244		$	(44,557	)	$	45,543

Cash Flows from Operating Activities

Net cash provided by operating activities decreased by approximately $5.0 million to $133.1 million for the year ended December 31, 2018 compared to $138.2 million for the year ended December 31, 2017. The decrease in net cash provided by operating activities was primarily the result of a decrease in net income of approximately $9.2 million and a net decrease in the net changes in operating assets and liabilities of approximately $2.7 million primarily driven by the timing of collection of accounts receivables and liability payments, partially offset by a net increase in non-cash charges relating to depreciation and amortization, amortization of loan fees and debt premium, accretion on discounted liabilities and unit-based compensation of approximately $6.8 million.

Net cash provided by operating activities increased by approximately $44.1 million to $138.2 million for the year ended December 31, 2017 compared to $94.1 million for the year ended December 31, 2016. The increase in net cash provided by operating activities was primarily the result of an increase in net income of approximately $35.2 million and a net increase non-cash charges relating to depreciation and amortization, amortization of loan fees and debt premium and unit-based compensation of approximately $9.8 million, partially offset by a net decrease in the net changes in operating assets and liabilities of approximately $0.9 million primarily driven by the timing of collection of accounts receivables and liability payments.

Cash Flows from Investing Activities

Net cash used in investing activities increased by approximately $125.5 million to $175.7 million for the year ended December 31, 2018 compared to $50.2 million for the year ended December 31, 2017. The increase in net cash used in investing activities was primarily the result of capital expenditures related to the East Coast Terminals Acquisition of $75.0 million and the Knoxville Terminals Purchase of $58.4 million and a decrease in net sales and maturities of marketable securities of approximately $40.0 million, partially offset by a decrease in capital expenditures of approximately $37.8 million primarily related to the construction of assets in 2017 and the Toledo Products Terminal Acquisition of $10.1 million in April 2017.

Net cash used in investing activities changed by approximately $120.5 million to $50.2 million for the year ended December 31, 2017 compared to net cash provided by investing activities of $70.3 million for the year ended

December 31, 2016. The change in net cash used in investing activities was primarily the result of a decrease in net sales and maturities of marketable securities of approximately $154.2 million, an increase in capital expenditures of approximately $54.6 million primarily related to the construction of assets in 2017 and the Toledo Products Terminal Acquisition of $10.1 million in April 2017, partially offset by the Plains Asset Purchase of $98.4 million in April 2016.

Cash Flows from Financing Activities

Net cash provided by financing activities changed by approximately $175.3 million to $42.8 million for the year ended December 31, 2018 compared to net cash used in financing activities of $132.5 million for the year ended December 31, 2017. Net cash provided by financing activities for the year ended December 31, 2018 consisted of net borrowings under the Revolving Credit Facility of $126.3 million, net proceeds from the issuance of common units of $34.8 million and a contribution from PBF LLC of $4.2 million related to the 2018 pre-acquisition activities of the Development Assets, partially offset by distributions to unitholders of $98.8 million, distributions to TVPC members of $20.3 million and deferred financing costs of $3.5 million. Net cash used in financing activities for the year ended December 31, 2017 consisted of net repayments on the Revolving Credit Facility of $159.5 million, distributions to unitholders of $85.4 million, repayment of our Term Loan of $39.7 million, distributions to TVPC members of $21.5 million, repayment of our Affiliate Note Payable of $11.6 million and deferred financing costs of $3.7 million, partially offset by the proceeds from the issuance of the additional 2023 Notes of $178.5 million and a contribution from PBF LLC of $10.4 million related to the 2017 pre-acquisition activities of PNGPC and the Development Assets.

Net cash used in financing activities increased by approximately $13.7 million to $132.5 million for the year ended December 31, 2017 compared to $118.8 million for the year ended December 31, 2016. Net cash used in financing activities for the year ended December 31, 2017 consisted of net repayments on the Revolving Credit Facility of $159.5 million, distributions to unitholders of $85.4 million, repayment of our Term Loan of $39.7 million, distributions to TVPC members of $21.5 million, repayment of our Affiliate Note Payable of $11.6 million and deferred financing costs of $3.7 million, partially offset by the proceeds from the issuance of the additional 2023 Notes of $178.5 million and a contribution from PBF LLC of $10.4 million related to the 2017 pre-acquisition activities of PNGPC and the Development Assets. Net cash used in financing activities for the year ended December 31, 2016 consisted of repayment of our Term Loan of $194.5 million, distributions to PBF LLC related to Acquisitions from PBF of $175.0 million and distributions to unitholders of $67.5 million, partially offset by net borrowings on the Revolving Credit Facility of $164.7 million, net proceeds from PBFX’s public offerings of common units in April 2016 and August 2016 of $138.4 million and contributions from PBF LLC of $15.2 million related to the 2016 pre-acquisition activities of TVPC, PNGPC and the Development Assets.

Capital Expenditures

Our capital requirements have consisted of, and are expected to continue to consist of, maintenance capital expenditures, regulatory capital expenditures and expansion capital expenditures. Maintenance capital expenditures are expenditures (including expenditures for the addition or improvement to, or the replacement of, our capital assets, and for the acquisition of existing, or the construction or development of new, capital assets) made to maintain our long-term operating income or operating capacity. Examples of maintenance capital expenditures are expenditures for the refurbishment and replacement of terminals, to maintain equipment reliability, integrity and safety. Regulatory capital expenditures are expenditures made to attain or maintain compliance with regulatory standards. Examples of regulatory capital expenditures are expenditures incurred to address environmental laws or regulations. Expansion capital expenditures are expenditures incurred for acquisitions or capital improvements that we expect will increase our operating income or operating capacity over the long term. Examples of expansion capital expenditures include the acquisition of equipment and the construction, development or acquisition of unloading equipment or other equipment at our facilities or additional throughput capacity to the extent such capital expenditures are expected to expand our operating capacity or our operating income.

Capital expenditures for the past three years were as follows:



	Year Ended December 31,
	2018		2017		2016
	(In thousands)
Expansion*	$	169,023	$	85,662	$	121,026
Maintenance	6,168		4,596		2,920
Regulatory	505		—		—
Total capital expenditures	$	175,696	$	90,258	$	123,946

____________


(*)	Expansion capital expenditures include our acquisitions for the periods presented.

For the year ended December 31, 2018, our capital expenditures were primarily incurred for the East Coast Storage Assets Acquisition, the Knoxville Terminals Purchase, organic growth projects associated with the Development Assets and the maintenance of the Toledo Storage Facility, the East Coast Terminals and the Torrance Valley Pipeline. For the year ended December 31, 2017, our capital expenditures were primarily incurred for the construction of the Paulsboro Natural Gas Pipeline and the Chalmette Storage Tank, the acquisition of the Paulsboro Natural Gas Pipeline, the Toledo Products Terminal Acquisition and the maintenance of the Toledo Storage Facility, the East Coast Terminals and the Torrance Valley Pipeline. For the year ended December 31, 2016, our capital expenditures were primarily incurred for the expansion of the DCR Products Pipeline, the Plains Asset Purchase and the maintenance of the Toledo Storage Facility and the DCR Products Pipeline.

We currently expect to spend an aggregate of between approximately $27.5 million and $32.5 million during 2019 for capital expenditures, of which between approximately $14.0 million and $18.0 million relate to maintenance or regulatory capital expenditures. We anticipate the forecasted maintenance capital expenditures will be funded primarily with cash from operations and through borrowings under the Revolving Credit Facility as needed. We currently have not included any potential future acquisitions in our budgeted capital expenditures for the twelve months ending December 31, 2019. We may rely on external sources including other borrowings under the Revolving Credit Facility, and issuances of equity and debt securities to fund any significant future expansion.

Under the Omnibus Agreement, PBF Energy has agreed to reimburse us for any costs up to $20.0 million per event (net of any insurance recoveries) that we incur for repairs required due to the failure of any Contributed Asset to operate in substantially the same manner and condition as such asset was operating prior to the closing of the IPO and the Acquisitions from PBF during the first five years after the closing of the IPO and the Acquisitions from PBF, and any matters related thereto.

Contractual Obligations

Information regarding our contractual obligations of the types described below as of December 31, 2018, is set forth in the following table:



	Payments Due by Period
	Totals		2019		2020 and 2021		2022 and 2023		2024 and Beyond
	(In thousands)

Long-term debt obligations ⁽¹⁾	$	681,000	$	—	$	—	$	681,000	$	—
Interest ⁽²⁾	206,052		45,613		91,226		69,213		—
Affiliate - services agreements ⁽³⁾	211,723		15,587		31,174		31,174		133,788
Environmental obligations ⁽⁴⁾	2,587		517		800		800		470
Construction obligations	4,632		4,632		—		—		—
Deferred payment for East Coast Storage Assets Acquisition	32,000		32,000		—		—		—
Contingent Consideration ⁽⁵⁾	27,978		—		18,340		9,638		—
Operating leases and other ⁽⁶⁾	9,879		1,250		1,460		1,140		6,029
Total obligations	$	1,175,851	$	99,599	$	143,000	$	792,965	$	140,287

____________________


(1)	No principal amounts are due under our 2023 Notes and Revolving Credit Facility until May 2023 and July 2023, respectively.


(2)	Includes interest on our 2023 Notes and Revolving Credit Facility based on outstanding indebtedness as of December 31, 2018. Includes commitment fees on the Revolving Credit Facility through July 2023 using rates in effect at December 31, 2018.

(3)

Includes annual fixed payments under the Omnibus Agreement and the Services Agreement, as well as an estimate of approximately $2.0 million annually of obligations under the Omnibus Agreement to reimburse PBF LLC for full salaries and benefit costs of employees who devote more than 50% of their time to us. Obligations under these agreements are expected to continue through the terms of our existing commercial agreements.


(4)	Includes environmental liabilities associated with the East Coast Terminals, the Torrance Valley Pipeline and the East Coast Storage Assets. In accordance with the Contribution Agreement for TVPC, PBF Holding has indemnified us for any and all costs associated with environmental remediation for obligations that existed on or before August 31, 2016, including all known or unknown events.


(5)	Includes the estimated undiscounted Contingent Consideration payable to Crown Point related to the East Coast Storage Assets Acquisition to be paid annually starting in 2020.


(6)	Includes operating leases and rental and franchise payments to secure right of way access across certain East Coast Terminals and Torrance Valley Pipeline assets with various terms and tenures.

Effects of Inflation

Inflation in the United States has been relatively low in recent years and did not have a material impact on our results of operations for the years ended December 31, 2018, 2017 and 2016, respectively, except as noted above for the 2018 Inflation Rate Increase.

Off-Balance Sheet Arrangements

We have not entered into any transactions, agreements or other contractual arrangements that would result in off-balance sheet liabilities, other than outstanding letters of credit in the amount of $4.0 million and operating leases.

Environmental and Other Matters

Environmental Regulation

Our operations are subject to extensive and frequently changing federal, state and local laws, regulations and ordinances relating to the protection of the environment. Among other things, these laws and regulations govern

the emission or discharge of pollutants into or onto the land, air and water, the handling and disposal of solid and hazardous wastes and the remediation of contamination. As with the industry generally, compliance with existing and anticipated environmental laws and regulations increases our overall cost of business, including our capital costs to develop, maintain, operate and upgrade equipment and facilities. While these laws and regulations affect our maintenance and regulatory capital expenditures and net income, we believe they do not necessarily affect our competitive position, as the operations of our competitors are similarly affected. We believe our facilities are in substantial compliance with applicable environmental laws and regulations. However, these laws and regulations are subject to changes, or to changes in the interpretation of such laws and regulations, by regulatory authorities, and continued and future compliance with such laws and regulations may require us to incur significant expenditures. Additionally, violation of environmental laws, regulations and permits can result in the imposition of significant administrative, civil and criminal penalties, injunctions limiting our operations, investigatory or remedial liabilities or construction bans or delays in the development of additional facilities or equipment. Furthermore, a release of hydrocarbons or hazardous substances into the environment could, to the extent the event is not insured, subject us to substantial expenses, including costs to comply with applicable laws and regulations and to resolve claims by third parties for personal injury or property damage, or by the U.S. federal government or state governments for natural resources damages. These impacts could directly and indirectly affect our business and have an adverse impact on our financial position, results of operations and liquidity. We cannot currently determine the amounts of such future impacts.

Environmental Liabilities

In connection with the Plains Asset Purchase, the Partnership is responsible for the environmental remediation costs for conditions that existed on the closing date up to a maximum of $0.3 million per year for ten years, with Plains All American Pipeline, L.P. remaining responsible for any and all additional costs above such amounts during such period.

In connection with the Toledo Products Terminal Acquisition, we did not assume, and are currently not aware of, any pre-existing environmental obligations. If pre-acquisition environmental obligations are identified, Sunoco is responsible for any liabilities up to $2.0 million identified to have occurred since 2002. For liabilities arising prior to 2002, Sunoco is indemnified by the prior owner under an agreement between Sunoco and the prior owner, and we are entitled to be reimbursed for all amounts paid related to such liabilities on a full pass-through basis.

Critical Accounting Policies and Estimates

Our significant accounting policies are described in Note 2 “Summary of Accounting Policies” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K. We prepare our Consolidated Financial Statements in conformity with GAAP, and in the process of applying these principles, we must make judgments, assumptions and estimates based on the best available information at the time. To aid a reader’s understanding, management has identified our critical accounting policies. These policies are considered critical because they are both most important to the portrayal of our financial condition and results, and require our most difficult, subjective or complex judgments. Often they require judgments and estimation about matters which are inherently uncertain and involve measuring, at a specific point in time, events which are continuous in nature. Actual results may differ based on the accuracy of the information utilized and subsequent events, some of which we may have little or no control over. The following accounting policies involve estimates that are considered critical due to the level of subjectivity and judgment involved, as well as the impact on our financial position and results of operations. We believe that all of our estimates are reasonable. Unless otherwise noted, estimates of the sensitivity to earnings that would result from changes in the assumptions used in determining our estimates is not practicable due to the number of assumptions and contingencies involved, and the wide range of possible outcomes.

Business Combinations

We use the acquisition method of accounting for third-party acquisitions for the recognition of assets acquired and liabilities assumed in business combinations at their estimated fair values as of the date of acquisition. Any excess consideration transferred over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is required in estimating the fair value of assets acquired. As a result, in the case of significant acquisitions, we obtain the assistance of third-party valuation specialists in estimating fair values of tangible and intangible assets based on available historical information and on expectations and assumptions about the future, considering the perspective of marketplace participants. While our management believes those expectations and assumptions are reasonable, they are inherently uncertain. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions.

The Acquisitions from PBF were transfers between entities under common control. Accordingly, we recorded the assets that were acquired from PBF Energy on our consolidated balance sheet at PBF Energy’s historical carrying value rather than fair value.

Environmental Matters

Liabilities for future remediation costs are recorded when environmental assessments and/or remediation efforts are probable and the costs can be reasonably estimated. Other than for assessments, the timing and magnitude of these accruals generally are based on the completion of investigations or other studies or a commitment to a formal plan of action. Environmental liabilities are based on best estimates of probable future costs using currently

available technology and the impact that current regulations may have on our remediation plans. The actual settlement of our liability for environmental matters could materially differ from our estimates due to a number of uncertainties such as the extent of contamination, changes in environmental laws and regulations, potential improvements in remediation technologies and the participation of other responsible parties.

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 supplementary clarification and implementation guidance for leases 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, we refer 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 for both lessee and lessor relationships, including identification of owned assets subject to operating leases as a lessor. We adopted the Updated Lease Guidance effective January 1, 2019, using a modified retrospective approach whereby a cumulative effect adjustment will be recognized upon adoption and the Updated Lease Guidance will be applied prospectively.

We completed our evaluation of the provisions of the Updated Lease Guidance, including the adoption of certain practical expedients allowed. The significant practical expedients adopted include the following:


•	We elected the practical expedient to apply the transition approach as of the beginning of the period of adoption and not restate comparative periods;


•	We elected to utilize the “package of three” expedients, as defined in the Updated Lease Guidance, whereby we did not reassess whether contracts existing prior to the effective date contain leases, nor did we reassess lease classification determinations nor whether initial direct costs qualify for capitalization;


•	We elected the practical expedient to not capitalize any leases with initial terms of less than twelve months on our balance sheet;


•	We elected the practical expedient to not separate lease and non-lease components for both lessee and lessor relationships; and


•	We elected the practical expedient to continue to account for land easements (rights of way) that were not previously accounted for as leases consistent with prior accounting until such contracts are modified or replaced, at which time they would be assessed for lease determination under the Updated Lease Guidance.

We successfully completed the implementation of a lease software system and refined business processes and controls to address the new standard. We are currently developing our lease disclosures and enhancing our accounting systems to enable the preparation of such disclosures beginning with our Quarterly Report on Form 10-Q for the quarter ending March 31, 2019. As of the date of implementation on January 1, 2019, the impact of the adoption of the Updated Lease Guidance is estimated to result in the recognition of a right of use asset and lease payable obligation on our balance sheet not expected to exceed $1.0 million. In addition, Lessor accounting for us will remain relatively unchanged from current GAAP reporting, but will include some enhanced disclosure requirements. Subsequent to adoption, we do not anticipate the impact on our net income and cash flows to be material.

Refer to Note 2 “Summary of Accounting Policies” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K for additional Recently Issued Accounting Pronouncements.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss arising from adverse changes in market rates and prices. Because we do not generally own the crude oil or refined products that are distributed through our facilities, and because all of our commercial agreements with PBF Energy require PBF Energy to bear the risk of any material volume loss relating to the services we provide, we have minimal direct exposure to risks associated with fluctuating commodity prices.

Debt that we incur under the Revolving Credit Facility bears interest at a variable rate and exposes us to interest rate risk. At December 31, 2018, we had $156.0 million outstanding in variable interest debt. A 1.0% change in the interest rate associated with the borrowings outstanding under this facility would result in a $3.9 million change in our interest expense, assuming we were to borrow all $500.0 million available under the Revolving Credit Facility.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of PBF Logistics GP LLC and

Unitholders of PBF Logistics LP

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of PBF Logistics LP and subsidiaries (the “Partnership”) as of December 31, 2018 and 2017, the related consolidated statements of operations, partners’ equity, and cash flows, for each of the three years in the period ended December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on the Partnership’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Parsippany, New Jersey

February 21, 2019

We have served as the Partnership’s auditor since 2013.

PBF LOGISTICS LP

CONSOLIDATED BALANCE SHEETS

(in thousands, except unit data)



	December 31, 2018		December 31, 2017

ASSETS
Current assets:
Cash and cash equivalents	$	19,908	$	19,664
Accounts receivable - affiliates	37,052		40,817
Accounts receivable	7,511		1,423
Prepaids and other current assets	4,598		1,793
Total current assets	69,069		63,697
Property, plant and equipment, net	862,117		684,488
Goodwill	6,332		—
Other non-current assets	18,835		30
Total assets	$	956,353	$	748,215
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable - affiliates	$	12,047	$	8,352
Accounts payable and accrued liabilities	50,972		19,794
Deferred revenue	2,960		1,438
Total current liabilities	65,979		29,584
Long-term debt	673,324		548,793
Other long-term liabilities	23,860		2,078
Total liabilities	763,163		580,455

Commitments and contingencies (Note 11)

Equity:
Net investment - Predecessor	—		10,665
Common unitholders (45,348,663 and 41,900,708 units issued and outstanding, as of December 31, 2018 and 2017, respectively)	23,718		(17,544		)
IDR holder - PBF LLC	—		2,736
Total PBF Logistics LP equity	23,718		(4,143		)
Noncontrolling interest	169,472		171,903
Total equity	193,190		167,760
Total liabilities and equity	$	956,353	$	748,215

See accompanying notes to consolidated financial statements.

PBF LOGISTICS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except unit and per unit data)



	Year Ended December 31,
	2018			2017			2016

Revenue:
Affiliate	$	259,426		$	240,654		$	175,448
Third-party	24,014			16,934			13,558
Total revenue	283,440			257,588			189,006

Costs and expenses:
Operating and maintenance expenses	88,390			73,521			51,393
General and administrative expenses	21,371			16,284			16,967
Depreciation and amortization	29,809			24,404			15,406
Total costs and expenses	139,570			114,209			83,766

Income from operations	143,870			143,379			105,240

Other expense:
Interest expense, net	(40,541		)	(31,875		)	(28,755		)
Amortization of loan fees and debt premium	(1,717		)	(1,488		)	(1,678		)
Accretion on discounted liabilities	(775		)	—			—
Net income	100,837			110,016			74,807
Less: Net loss attributable to Predecessor	(2,443		)	(4,986		)	(11,832		)
Less: Net income attributable to noncontrolling interest	17,819			14,565			5,679
Net income attributable to the partners	85,461			100,437			80,960
Less: Net income attributable to the IDR holder	10,011			9,055			4,031
Net income attributable to PBF Logistics LP unitholders	$	75,450		$	91,382		$	76,929

Net income per limited partner unit:
Common units - basic	$	1.73		$	2.17		$	2.01
Common units - diluted	1.73			2.17			2.01
Subordinated units - basic and diluted	—			2.15			2.01

Weighted-average limited partner units outstanding:
Common units - basic	43,646,997			35,505,446			22,288,118
Common units - diluted	43,731,299			35,568,760			22,338,784
Subordinated units - basic and diluted	—			6,572,245			15,886,553

See accompanying notes to consolidated financial statements.

PBF LOGISTICS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY

(in thousands)



	Net Investment			Common Units			Subordinated Units - PBF LLC			IDR			Noncontrolling Interest		Total
Balance at January 1, 2016	$	8,734		$	91,954		$	(277,094	)	$	(535	)	$	—	$	(176,941	)
Net loss attributable to Development Assets	(5,582		)	—			—			—			—		(5,582		)
Net loss attributable to PNGPC	(1,233		)	—			—			—			—		(1,233		)
Net loss attributable to TVPC	(5,017		)	—			—			—			—		(5,017		)
Sponsor contributions	366,306			—			—			—			—		366,306
Allocation of TVPC assets acquired to unitholders	(346,458		)	174,650			(2,158		)	—			173,966		—
Distributions to PBF LLC related to the TVPC Acquisition	—			(175,000		)	—			—			—		(175,000		)
Quarterly distributions to unitholders (including IDRs)	—			(38,088		)	(27,006		)	(3,348		)	—		(68,442		)
Net proceeds from public offering	—			138,378			—			—			—		138,378
Net income attributable to the partners	—			45,010			31,919			4,031			5,679		86,639
Contributions from PBF LLC	—			15			—			—			—		15
Unit-based compensation expense	—			4,360			—			—			—		4,360
Other	—			(4		)	(1,744		)	1,118			237		(393		)
Balance at December 31, 2016	$	16,750		$	241,275		$	(276,083	)	$	1,266		$	179,882	$	163,090

See accompanying notes to consolidated financial statements.

PBF LOGISTICS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY (Continued)

(in thousands)



	Net Investment			Common Units			Subordinated Units - PBF LLC			IDR			Noncontrolling Interest			Total
Balance at January 1, 2017	$	16,750		$	241,275		$	(276,083	)	$	1,266		$	179,882		$	163,090
Net loss attributable to Development Assets	(4,836		)	—			—			—			—			(4,836		)
Net loss attributable to PNGPC	(150		)	—			—			—			—			(150		)
Sponsor contributions	10,439			—			—			—			—			10,439
Allocation of PNGPC assets acquired to unitholders	(11,538		)	11,592			(54		)	—			—			—
Distributions to PBF LLC related to the PNGPC Acquisition	—			(11,600		)	—			—			—			(11,600		)
Quarterly distributions to unitholders (including IDRs)	—			(64,515		)	(14,457		)	(7,584		)	—			(86,556		)
Distributions to TVPC members	—			—			—			—			(21,544		)	(21,544		)
Net income attributable to the partners	—			77,219			14,163			9,055			14,565			115,002
Unit-based compensation expense	—			5,345			—			—			—			5,345
Contributions from PBF LLC	—			527			—			—			—			527
Subordinated units conversion to common units	—			(276,433		)	276,433			—			—			—
Other	—			(954		)	(2		)	(1		)	(1,000		)	(1,957		)
Balance at December 31, 2017	$	10,665		$	(17,544	)	$	—		$	2,736		$	171,903		$	167,760

See accompanying notes to consolidated financial statements.

PBF LOGISTICS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY (Continued)

(in thousands)



	Net Investment			Common Units			Subordinated Units - PBF LLC		IDR			Noncontrolling Interest			Total
Balance at January 1, 2018	$	10,665		$	(17,544	)	$	—	$	2,736		$	171,903		$	167,760
Net loss attributable to Development Assets	(2,443		)	—			—		—			—			(2,443		)
Sponsor contributions	4,455			—			—		—			—			4,455
Allocation of Development Assets acquired to unitholders	(12,677		)	12,677			—		—			—			—
Quarterly distributions to unitholders (including IDRs)	—			(87,384		)	—		(12,747		)	—			(100,131		)
Distributions to TVPC members	—			—			—		—			(20,250		)	(20,250		)
Net income attributable to the partners	—			75,450			—		10,011			17,819			103,280
Unit-based compensation expense	—			5,757			—		—			—			5,757
Contributions from PBF LLC	—			1,056			—		—			—			1,056
Issuance of common units, net of expense	—			34,820			—		—			—			34,820
Other	—			(1,114		)	—		—			—			(1,114		)
Balance at December 31, 2018	$	—		$	23,718		$	—	$	—		$	169,472		$	193,190

See accompanying notes to consolidated financial statements.

PBF LOGISTICS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



	Year Ended December 31,
	2018			2017			2016
Cash flows from operating activities:
Net income	$	100,837		$	110,016		$	74,807
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	29,809			24,404			15,406
Amortization of loan fees and debt premium	1,717			1,488			1,678
Accretion on discounted liabilities	775			—			—
Unit-based compensation expense	5,757			5,345			4,360
Changes in operating assets and liabilities:
Accounts receivable - affiliates	3,765			(3,954		)	(12,439		)
Accounts receivable	(6,088		)	2,871			(4,294		)
Prepaids and other current assets	(679		)	(39		)	3,152
Accounts payable - affiliates	(253		)	721			3,513
Accounts payable and accrued liabilities	(2,336		)	(2,086		)	7,920
Deferred revenue	1,522			486			952
Other assets and liabilities	(1,685		)	(1,070		)	(1,002		)
Net cash provided by operating activities	133,141			138,182			94,053

Cash flows from investing activities:
Plains Asset Purchase	—			—			(98,373		)
Toledo Products Terminal Acquisition	—			(10,097		)	—
Knoxville Terminals Purchase	(58,356		)	—			—
East Coast Storage Assets Acquisition	(74,989		)	—			—
Expenditures for property, plant and equipment	(42,351		)	(80,161		)	(25,573		)
Purchases of marketable securities	—			(75,036		)	(1,909,965		)
Maturities of marketable securities	—			115,060			2,104,209
Net cash (used in) provided by investing activities	$	(175,696	)	$	(50,234	)	$	70,298

See accompanying notes to consolidated financial statements.

PBF LOGISTICS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(in thousands)



	Year Ended December 31,
	2018			2017			2016
Cash flows from financing activities:
Net proceeds from issuance of common units	$	34,820		$	—		$	138,378
Distribution to PBF LLC related to Acquisitions from PBF	—			—			(175,000		)
Distributions to unitholders	(98,786		)	(85,430		)	(67,534		)
Distributions to TVPC members	(20,250		)	(21,544		)	—
Contribution from parent	4,201			10,439			15,184
Proceeds from issuance of senior notes	—			178,500			—
Repayment of term loan	—			(39,664		)	(194,536		)
Proceeds from revolving credit facility	170,000			20,000			194,700
Repayment of revolving credit facility	(43,700		)	(179,500		)	(30,000		)
Repayment of Affiliate Note Payable	—			(11,600		)	—
Deferred financing costs	(3,486		)	(3,706		)	—
Net cash provided by (used in) financing activities	42,799			(132,505		)	(118,808		)

Net change in cash and cash equivalents	244			(44,557		)	45,543
Cash and cash equivalents at beginning of year	19,664			64,221			18,678
Cash and cash equivalents at end of period	$	19,908		$	19,664		$	64,221

Supplemental cash flow disclosures:
Non-cash activities:
Contribution of net assets from PBF LLC	$	1,056		$	527		$	15
Accrued capital expenditures	4,632			1,423			1,540
Issuance of Affiliate Note Payable	—			11,600			—
Deferred payment for East Coast Storage Assets Acquisition	30,900			—			—
East Coast Storage Assets contingent consideration	21,100			—			—
Units issued as consideration for acquisitions	31,586			—			—
Cash paid during year for:
Interest, net of capitalized interest of $143, $1,219, and $118 in 2018, 2017 and 2016, respectively	$	39,716		$	29,231		$	28,550

See accompanying notes to consolidated financial statements.

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

PBF Logistics LP (“PBFX” or the “Partnership”) is a Delaware limited partnership formed in February 2013. PBF Logistics GP LLC (“PBF GP” or “our general partner”) serves as the general partner of PBFX. PBF GP is wholly-owned by PBF Energy Company LLC (“PBF LLC”). PBF Energy Inc. (“PBF Energy”) is the sole managing member of PBF LLC and, as of December 31, 2018, owned 99% of the total economic interest in PBF LLC. In addition, PBF LLC is the sole managing member of PBF Holding Company LLC (“PBF Holding”), a Delaware limited liability company and affiliate of PBFX. On May 14, 2014, PBFX completed its initial public offering (“IPO”). As of December 31, 2018, PBF LLC held a 44% limited partner interest in PBFX and owned all of PBFX’s incentive distribution rights (“IDRs”), with the remaining 56% limited partner interest owned by public unit holders. On February 13, 2019, the Partnership entered into an Equity Restructuring Agreement (the “IDR Restructuring Agreement”) with PBF LLC and PBF GP, pursuant to which the IDRs held by PBF LLC will be canceled and converted into newly issued PBFX common units.

PBFX engages in the receiving, handling, storage and transferring of crude oil, refined products, natural gas and intermediates. The Partnership does not take ownership of or receive any payments based on the value of the crude oil, products, natural gas or intermediates that it handles and does not engage in the trading of any commodities. PBFX’s assets are integral to the operations of PBF Holding’s refineries, and, as a result, the Partnership continues to generate a substantial majority of its revenue from transactions with PBF Holding. Additionally, certain of PBFX’s assets also generate revenue from third-party transactions.

Acquisitions in 2018

On April 16, 2018, the Partnership’s wholly-owned subsidiary, PBF Logistics Products Terminals LLC (“PLPT”), completed the purchase of two refined product terminals located in Knoxville, Tennessee, which include product tanks, pipeline connections to the Colonial Pipeline Company and Plantation Pipe Line Company pipeline systems and truck loading facilities (the “Knoxville Terminals”) from Cummins Terminals, Inc. (“Cummins”) for total cash consideration of $58,000, excluding working capital adjustments (the “Knoxville Terminals Purchase”). This acquisition was accounted for as a business combination under United States of America (“U.S.”) generally accepted accounting principles (“GAAP”). Refer to Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements for further discussion regarding the Knoxville Terminals Purchase.

On July 16, 2018, PBFX entered into an agreement with Crown Point International, LLC (“Crown Point”) to purchase its wholly-owned subsidiary, CPI Operations LLC (“CPI”), whose assets include a storage facility with multi-use storage capacity, an Aframax-capable marine facility, a rail facility, a truck terminal, equipment, contracts and certain other idled assets located on the Delaware River near Paulsboro, New Jersey (the “East Coast Storage Assets”) for total consideration of $126,989, including working capital and contingent consideration (the “East Coast Storage Assets Acquisition”), which was comprised of an initial payment at closing of $75,000 with a remaining balance of $32,000 being payable one year after closing. Additionally, the East Coast Storage Assets Acquisition includes an earn-out provision related to an existing commercial agreement with a third-party, based on the future results of restarting certain of the acquired idled assets (the “Contingent Consideration”). The East Coast Storage Assets Acquisition closed on October 1, 2018. This acquisition was accounted for as a business combination under GAAP. Refer to Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements for further discussion regarding the East Coast Storage Assets Acquisition and the Contingent Consideration.

On July 16, 2018, the Partnership entered into four contribution agreements with PBF LLC pursuant to which PBF Energy contributed to PBFX certain of its subsidiaries (the “Development Assets Contribution Agreements”). Pursuant to the Development Assets Contribution Agreements, the Partnership acquired from PBF LLC all of the issued and outstanding limited liability company interests of: Toledo Rail Logistics Company LLC (“TRLC”), whose assets consist of a loading and unloading rail facility located at PBF Holding’s Toledo Refinery (the “Toledo Rail Products Facility”); Chalmette Logistics Company LLC (“CLC”), whose assets consist of a truck loading rack facility (the “Chalmette Truck Rack”) and a rail yard facility (the “Chalmette Rosin Yard”), both of which

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

are located at PBF Holding’s Chalmette Refinery; Paulsboro Terminaling Company LLC (“PTC”), whose assets consist of a lube oil terminal facility located at PBF Holding’s Paulsboro Refinery (the “Paulsboro Lube Oil Terminal”); and DCR Storage and Loading Company LLC (“DSLC”), whose assets consist of an ethanol storage facility located at PBF Holding’s Delaware City Refinery (the “Delaware Ethanol Storage Facility” and collectively with the Toledo Rail Products Facility, the Chalmette Truck Rack, the Chalmette Rosin Yard, and the Paulsboro Lube Oil Terminal, the “Development Assets”). The acquisition of the Development Assets closed on July 31, 2018 for total consideration of $31,586, consisting of 1,494,134 common units issued to PBF LLC (the “Development Assets Acquisition”). This acquisition was accounted for as a transfer of assets between entities under common control under GAAP. Refer to Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements for further discussion regarding the Development Assets Acquisition.

Principles of Combination and Consolidation and Basis of Presentation

In connection with the IPO, PBF LLC contributed the assets, liabilities and results of operations of certain crude oil terminaling assets to the Partnership. The assets were owned and operated by PBF Holding’s subsidiaries, Delaware City Refining Company LLC (“DCR”) and Toledo Refining Company LLC (“TRC”), and were contributed to PBF LLC in connection with the IPO. PBF Holding, together with its subsidiaries, owns and operates five oil refineries and related facilities in North America. PBF Energy, through its ownership in PBF LLC, controls all of the business affairs of PBFX and PBF Holding.

PBFX’s initial assets consisted of a double loop track with ancillary pumping and unloading equipment (the “DCR Rail Terminal”) and a crude truck unloading terminal consisting of lease automatic custody transfer units (the “Toledo Truck Terminal”), which together with the DCR Rail Terminal, are referred to as the “IPO Assets.” Subsequent to the IPO, the Partnership acquired from PBF LLC a heavy crude oil rail unloading facility at the Delaware City Refinery (the “DCR West Rack,” together with the DCR Rail Terminal, the “DCR Rail Facility”), a tank farm and related facilities, which included a propane storage and loading facility (the “Toledo Storage Facility”), an interstate petroleum products pipeline (the “DCR Products Pipeline”) and truck loading rack (the “DCR Truck Rack”), which are collectively referred to as the “DCR Products Pipeline and Truck Rack,” the San Joaquin Valley pipeline system, which consists of the M55, M1 and M70 crude pipeline systems including pipeline stations with storage capacity and truck unloading capacity (the “Torrance Valley Pipeline”), the Paulsboro Natural Gas Pipeline (as defined in Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements) and the Development Assets.

The transactions entered into with PBF LLC after the IPO are collectively referred to as “Acquisitions from PBF.” Subsequent to the Acquisitions from PBF, the DCR Rail Terminal, Toledo Truck Terminal, DCR West Rack, Toledo Storage Facility, the DCR Products Pipeline and Truck Rack, the Torrance Valley Pipeline, the Paulsboro Natural Gas Pipeline and the Development Assets are collectively referred to as the “Contributed Assets.”

The financial statements presented in this Annual Report on Form 10-K include the consolidated financial results of PBFX. The balance sheet as of December 31, 2018 and 2017, presents solely the consolidated financial position of PBFX. PBFX recorded the TVPC Acquisition (as defined in Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements), the PNGPC Acquisition (as defined in Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements) and the Development Assets Acquisition at PBF Energy’s historical book value, as the acquisitions were treated as a reorganization of entities under common control. We have retrospectively adjusted the financial information of PBFX contained herein to include the historical results of the Contributed Assets prior to the effective date of each transaction with the exception of the Delaware Ethanol Storage Facility, which is considered an asset purchase. The financial statements of the Contributed Assets have been prepared from the separate records maintained by subsidiaries of PBF Energy and may not necessarily be indicative of the conditions that would have existed or the results of operations if they were operated as an unaffiliated company. Portions of certain expenses represent allocations made from corporate expenses applicable to PBF Energy as a whole. Refer to Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements for further discussion.

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

2. SUMMARY OF ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Business Combinations

The Partnership uses the acquisition method of accounting for third-party acquisitions for the recognition of assets acquired and liabilities assumed in business combinations at their estimated fair values as of the date of acquisition. Any excess consideration transferred over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is required in estimating the fair value of assets acquired. As a result, in the case of significant acquisitions, the Partnership obtains the assistance of third-party valuation specialists in estimating fair values of tangible and intangible assets based on available historical information and on expectations and assumptions about the future, considering the perspective of marketplace participants. While the Partnership’s management believes those expectations and assumptions are reasonable, they are inherently uncertain. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions.

The Acquisitions from PBF were transfers between entities under common control. Accordingly, the Partnership records the assets that were acquired from PBF Energy on its consolidated balance sheet at PBF Energy’s historical carrying value rather than fair value.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits, and short-term investments with original maturities of three months or less, but exclude debt or equity securities classified as U.S. Treasury Securities (“marketable securities”).

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. PBFX capitalizes costs associated with the preliminary, pre-acquisition and development/construction stages of a major construction project. PBFX capitalizes the interest cost associated with major construction projects based on the effective interest rate of its total borrowings. Maintenance and repairs are charged to operating expenses as they are incurred. Improvements and betterments, which extend the lives of the assets, are capitalized.

PBFX’s depreciable property, plant and equipment are comprised of storage, pipelines, terminals and equipment which are depreciated using the straight-line method over estimated useful lives of 5-25 years.

Goodwill

Goodwill, related to an acquisition, is calculated as the excess of the purchase price over the fair value of the identifiable net assets and is carried at cost. Goodwill is not amortized for financial reporting purposes; however, it is subject to annual assessment to determine if an impairment of goodwill has occurred. The Partnership performs this impairment review annually as of July 1, or in any period prior to the annual assessment in which the Partnership experiences any circumstances that would indicate an impairment exists, such as disruptions in its business or other significant declines in results. An impairment loss is recorded if the implied fair value of the reporting unit is less

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

than the carrying value. Reporting units are based on a component of the business with discrete financial information that management reviews on a regular basis. The Partnership reviews its reporting units on an annual basis.

Intangibles

The Partnership’s intangibles are comprised of customer relationships and customer contracts, which were acquired in connection with certain acquisitions, all of which were recorded at their estimated fair value at the date of acquisition.

Intangibles with definite lives are amortized using the straight-line method over their relative estimated useful life, or the period of which they provide an economic benefit. The customer relationships estimated useful life was determined to be 10 years and the customer contracts estimated useful lives were determined to be 3-13 years, based on the specific contract intangible. Intangible assets are included in “Other non-current assets” within the Partnership’s consolidated balance sheets.

Long-Lived Assets

PBFX reviews property, plant and equipment and other long-lived assets for impairment whenever events or changes in business circumstances indicate the net book values of the assets may not be recoverable. Impairment is evaluated by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from use of the assets and their ultimate disposition. If such analysis indicates that the carrying value of the long-lived assets is not considered to be recoverable, the carrying value is reduced to the fair value. Impairment assessments inherently involve judgment as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Although management would utilize assumptions that it believes are reasonable, future events and changing market conditions may impact management’s assumptions, which could produce different results.

Asset Retirement Obligations

PBFX records an asset retirement obligation at fair value for the estimated cost to retire a tangible long-lived asset at the time PBFX incurs that liability, which is generally when the asset is purchased, constructed, or leased. PBFX records the liability when it has a legal or contractual obligation to incur costs to retire the asset and when a reasonable estimate of the fair value of the liability can be made. If a reasonable estimate cannot be made at the time the liability is incurred, PBFX will record the liability when sufficient information is available to estimate the liability’s fair value. Certain of PBFX’s asset retirement obligations are based on its legal obligation to perform remedial activity when it permanently ceases operations of the long-lived assets. PBFX therefore considers the settlement date of these obligations to be indeterminable. Accordingly, PBFX cannot calculate an associated asset retirement liability for these obligations at this time. PBFX will measure and recognize the fair value of these asset retirement obligations when the settlement date is determinable.

Product Imbalances

The Partnership incurs product imbalances as a result of tank storage volume fluctuations at certain of its terminals. Fluctuations are due to differences in the measurements of actual product stored as compared to total consigned volumes per the customer. The Partnership uses a year-to-date weighted average market price to value our assets and liabilities related to product imbalances. Product imbalance liabilities are included in “Accounts payable and accrued liabilities” and product imbalance assets are included in “Prepaids and other current assets” in the Partnership’s consolidated balance sheets. As of and for the periods ended December 31, 2018 and 2017, the imbalance amounts were immaterial.

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Environmental Matters

Liabilities for future remediation costs are recorded when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated. Other than for assessments, the timing and magnitude of these accruals generally are based on the completion of investigations or other studies or a commitment to a formal plan of action. Environmental liabilities are based on best estimates of probable future costs using currently available technology and the impact that current regulations may have on our remediation plans. The measurement of environmental remediation liabilities may be discounted to reflect the time value of money if the aggregate amount and timing of cash payments of the liabilities are fixed or reliably determinable. The actual settlement of PBFX’s liability for environmental matters could materially differ from its estimates due to a number of uncertainties such as the extent of contamination, changes in environmental laws and regulations, potential improvements in remediation technologies and the participation of other responsible parties.

Revenue Recognition

PBFX recognizes revenue by charging fees for crude oil and refined products terminaling, storing and pipeline services based on the greater of contractual minimum volume commitments (“MVCs”), as applicable, or the delivery of actual volumes transferred based on contractual rates applied to throughput volumes. Prior to the IPO and effective date of the Acquisitions from PBF, the majority of PBFX’s assets were part of the integrated operations of PBF Energy. With the exception of the DCR Products Pipeline and Paulsboro Lube Oil Terminal, PBF Energy generally recognized only the costs associated with these assets. Following the closing of the IPO and Acquisitions from PBF, PBFX’s revenues were generated by commercial agreements with subsidiaries of PBF Energy. In addition, PBFX generates third-party revenue from certain of its assets. Billings to PBFX’s third-party customers for throughput services are billed monthly for actual totals shipped through the terminals. A portion of the fee-based agreements provide for fixed demand charges, which are recognized as revenue pursuant to the contract terms. Billings to third-party customers for tank lease obligations occur in the prior month and are recorded as deferred revenue which is recognized in the period in which the customer receives such storage services.

Unit-Based Compensation

PBF GP provides unit-based compensation to certain officers, non-employee directors and seconded employees of our general partner or its affiliates, consisting of phantom units. The fair value of PBFX’s phantom units are measured based on the fair market value of the underlying common units on the date of the grant based on the common unit closing price on the grant date. The estimated fair value of PBFX’s phantom units is amortized over the vesting period using the straight-line method. Awards typically vest over a four year service period, subject to acceleration if certain conditions are met. The phantom unit awards may be settled in common units, cash or a combination of both. Expenses related to unit-based compensation are included in “General and administrative expenses” within the Partnership’s consolidated statements of operations.

Net Income Per Unit

In addition to the common and subordinated units (prior to the June 1, 2017 conversion into common units), PBFX has identified the general partner interest and IDRs as participating securities and uses the two-class method when calculating the net income per unit applicable to limited partners. Net income per unit applicable to limited partners (including common and subordinated unitholders, prior to the conversion to common unit) is computed by dividing limited partners’ interest in net income, after deducting any incentive distributions, by the weighted-average number of outstanding common and subordinated units (prior to the conversion to common units).

On February 13, 2019, the Partnership entered into the IDR Restructuring Agreement with PBF LLC and PBF GP, pursuant to which the IDRs held by PBF LLC will be canceled and converted into 10,000,000 newly issued PBFX common units (the “IDR Restructuring”). The IDR Restructuring is expected to close on February 28, 2019. Subsequent to the close of the IDR Restructuring, no distributions will be made to PBF LLC with respect

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

to the IDRs, including with respect to the fourth quarter of 2018, and the newly issued PBFX common units will be entitled to normal distributions.

Net income (loss) attributable to the Acquisitions from PBF prior to each Effective Date was allocated entirely to PBF GP as if only PBF GP had rights to that net income (loss), therefore there is no retrospective adjustment to previously reported net income per unit.

Fair Value of Financial Instruments

The estimated fair value of cash, accounts receivable, certain other current assets, accounts payable, certain accrued expenses and other current liabilities approximates their carrying value reflected in the Consolidated Financial Statements because of the short-term maturity of the instruments.

Fair Value Measurement

A fair value hierarchy (Level 1, Level 2, or Level 3) is used to categorize fair value amounts based on the quality of inputs used to measure fair value. Accordingly, fair values derived from Level 1 inputs utilize quoted prices in active markets for identical assets or liabilities. Fair values derived from Level 2 inputs are based on quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are either directly or indirectly observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

PBFX uses appropriate valuation techniques based on the available inputs to measure the fair values of its applicable assets and liabilities. When available, PBFX measures fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value. In some valuations, the inputs may fall into different levels in the hierarchy. In these cases, the asset or liability level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurements.

Income Taxes

PBFX is not a taxable entity for federal income tax purposes or the income taxes of those states that follow the federal income tax treatment of partnerships. Instead, for purposes of these income taxes, each partner of the Partnership is required to take into account his, her or its share of items of income, gain, loss and deduction in computing his, her or its federal and state income tax liabilities, regardless of whether cash distributions are made to such partner by the Partnership. The taxable income reportable to each partner takes into account differences between the tax basis and fair market value of PBFX’s assets, the acquisition price of such partner’s units and the taxable income allocation requirements under the Second Amended and Restated Agreement of Limited Partnership of the Partnership (as amended, the “partnership agreement”). We are unable to readily determine the net difference in the bases of our assets and liabilities for financial and tax reporting purposes because individual unitholders have different investment bases depending upon the timing and price of acquisition of their partnership units.

As PBFX is a limited partnership treated as a “flow-through” entity for income tax purposes, there is no benefit or provision for U.S. federal or state income tax in the accompanying financial statements.

Recently Adopted Accounting Guidance

In May 2014, the Financial Accounting Standards 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”), and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

those goods or services. The Partnership adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method. Refer to Note 3 “Revenue” of the Notes to Consolidated Financial Statements for further details.

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 supplementary clarification and implementation guidance for leases 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 Partnership 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 for both lessee and lessor relationships, including identification of owned assets subject to operating leases as a lessor. The Partnership adopted the Updated Lease Guidance effective January 1, 2019, using a modified retrospective approach whereby a cumulative effect adjustment will be recognized upon adoption and the Updated Lease Guidance will be applied prospectively.

The Partnership completed its evaluation of the provisions of the Updated Lease Guidance, including the adoption of certain practical expedients allowed. The significant practical expedients adopted include the following:


•	The Partnership elected the practical expedient to apply the transition approach as of the beginning of the period of adoption and not restate comparative periods;


•	The Partnership elected to utilize the “package of three” expedients, as defined in the Updated Lease Guidance, whereby it did not reassess whether contracts existing prior to the effective date contain leases, nor did it reassess lease classification determinations nor whether initial direct costs qualify for capitalization;


•	The Partnership elected the practical expedient to not capitalize any leases with initial terms of less than twelve months on its balance sheet;


•	The Partnership elected the practical expedient to not separate lease and non-lease components for both lessee and lessor relationships; and


•	The Partnership elected the practical expedient to continue to account for land easements (rights of way) that were not previously accounted for as leases consistent with prior accounting until such contracts are modified or replaced, at which time they would be assessed for lease determination under the Updated Lease Guidance.

The Partnership successfully completed the implementation of a lease software system and refined business processes and controls to address the new standard. The Partnership is currently developing its lease disclosures and enhancing its accounting systems to enable the preparation of such disclosures beginning with its Quarterly Report on Form 10-Q for the quarter ending March 31, 2019. As of the date of implementation on January 1, 2019, the impact of the adoption of the Updated Lease Guidance is estimated to result in the recognition of a right of use asset and lease payable obligation on our balance sheet not expected to exceed $1,000. In addition, Lessor accounting for the Partnership will remain relatively unchanged from current GAAP reporting, but will include some enhanced disclosure requirements. Subsequent to adoption, the Partnership does not anticipate the impact on its net income and cash flows to be material.

In January 2017, the FASB issued ASU No. 2017-04, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”) to provide updated guidance on goodwill impairment testing. Under ASU 2017-04, goodwill impairment Step 2 would be eliminated. This step required a comparison of the implied fair value and carrying value of goodwill of the reporting unit. Subsequent to the effective date of ASU 2017-04, during the annual, or if applicable, interim goodwill impairment assessment, entities would perform the test by comparing the fair value

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

of the reporting unit with the carrying value of the reporting unit. The impairment charge would be the excess amount of which carrying value is greater than fair value, with the total amount limited to the carrying value of goodwill. ASU 2017-04 is effective for annual or, if applicable, interim goodwill impairment assessments beginning after December 15, 2019. Early adoption is permitted. The Partnership is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures.

3. REVENUE

Adoption of ASC 606

Prior to January 1, 2018, the Partnership 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 (iv) collectability was reasonably assured. Amounts billed in advance of the period in which the service was rendered or product delivered were recorded as deferred revenue.

Effective January 1, 2018, the Partnership adopted ASC 606. As a result, the Partnership has changed the accounting policy for the recognition of revenue from contracts with customers as detailed below.

The Partnership adopted ASC 606 using the modified retrospective method, which has been applied for the year ended December 31, 2018. The Partnership 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 Partnership did not record a cumulative effect adjustment upon initially applying ASC 606 as there was not a significant impact upon adoption; however, the details of significant qualitative and quantitative disclosure changes upon implementing ASC 606 are discussed below.

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration the Partnership expects to be entitled to in exchange for those goods or services.

As noted in Note 13 “Segment Information” of the Notes to Consolidated Financial Statements, the Partnership’s business consists of two reportable segments: (i) Transportation and Terminaling and (ii) Storage.

The following table provides information relating to the Partnership’s revenues for each service category by segment for the periods presented:



	Year Ended December 31,
	2018		2017*		2016*
Transportation and Terminaling Segment
Terminaling	$	120,342	$	127,547	$	121,441
Pipeline	78,073		67,273		28,851
Other	51,997		39,518		16,903
Total	250,412		234,338		167,195
Storage Segment
Storage	33,028		23,250		21,811
Total	33,028		23,250		21,811
Total Revenue	$	283,440	$	257,588	$	189,006

* Prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

PBFX recognizes revenue by charging fees for crude oil and refined products terminaling, storing and pipeline services based on the greater of contractual MVCs, as applicable, or the delivery of actual volumes transferred or stored based on contractual rates applied to throughput or storage volumes.

Minimum Volume Commitments

Transportation and Terminaling

The Partnership’s Transportation and Terminaling segment consists of product terminals, pipelines, crude unloading facilities and other facilities capable of handling barges and ships. Certain of these commercial agreements contain MVCs. Under these commercial agreements, if the Partnership’s customer fails to transport its minimum throughput volumes during any specified period, the customer will pay the Partnership a deficiency payment equal to the volume of the deficiency multiplied by the contractual rate then in effect. The deficiency payment is initially recorded as deferred revenue on the Partnership’s balance sheets for all contracts in which the MVC deficiency makeup period is contractually longer than a fiscal quarter.

Certain of the Partnership’s customers may apply the amount of any such deficiency payments as a credit for volumes transported on the applicable pipeline or terminal system in excess of its MVC during the following quarters under the terms of the applicable agreement. The Partnership recognizes operating revenues for the deficiency payments when credits are used for volumes transported in excess of MVCs or at the end of the contractual period. If the Partnership determines, based on all available information, that it is remote that the Partnership’s customer will utilize these deficiency payments, the amount of the expected unused credits will be recognized as operating revenues in the period when that determination is made. The use or recognition of the credits is recorded as a reduction to deferred revenue.

Storage

The Partnership earns storage revenue under the crude oil and refined products storage contracts through capacity reservation agreements, where the Partnership collects a fee for reserving storage capacity for customers in its facilities. Customers generally pay reservation fees based on the level of storage capacity reserved rather than the actual volumes stored.

As of December 31, 2018, future fees for MVCs to be received related to noncancelable commercial terminaling, pipeline and storage agreements were as follows:



2019	$	107,167
2020	107,032
2021	106,933
2022	25,938
2023	24,039
Thereafter	46,575
Total MVC payments to be received⁽¹⁾⁽²⁾	$	417,684

(1) All fixed consideration from contracts with customers is included in the amounts presented above. Variable consideration that is constrained or not required to be estimated as it reflects our efforts to perform is excluded.

(2) Arrangements deemed implicit leases are excluded from this table.

Leases

Certain of the Partnership’s commercial agreements are considered operating leases. Under these leasing agreements, the Partnership provides access to storage tanks and/or use of throughput assets that convey the right to control the use of an identified asset to the customer. Through December 31, 2018, the Partnership accounts for

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

these transactions under ASC 840 “Leases.” These lease arrangements accounted for $139,216 of the Partnership’s revenue for the year ended December 31, 2018.

Deferred Revenue

The Partnership records deferred revenues when cash payments are received or due in advance of performance, including amounts which are refundable. Deferred revenue was $2,960 and $1,438 as of December 31, 2018 and 2017, respectively. The increase in the deferred revenue balance as of December 31, 2018 is primarily driven by deferred revenue associated with the operations of the newly acquired East Coast Storage Assets, as well as the timing and extent of cash payments received in advance of satisfying the Partnership’s performance obligations for the comparative periods.

The Partnership’s payment terms vary by the type and location of our customer and the services offered. The period between invoicing and when payment is due is not significant (i.e., generally within two months). For certain services and customer types, the Partnership requires payment before the services are performed for the customer.

Significant Judgment and Practical Expedients

For performance obligations, the Partnership determined that customers are able to obtain control of these services over time. The Partnership determined that these performance obligations, which are satisfied over time, are considered a series that generally have the same pattern of transfer to customers. For stand ready performance obligations, the Partnership generally recognizes revenue over time on a straight-line basis under the time-elapsed output method as the Partnership believes this is a reasonable basis in determining how customers obtain the benefits of the Partnership’s services. For non-stand ready performance obligations, the Partnership generally recognizes revenue over time based on actual performance (current period volumes multiplied by the applicable rate per unit of volume) as the Partnership believes this accurately depicts the transfer of benefits to customers.

The Partnership did 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 the Partnership recognizes revenue at the amount to which the Partnership has the right to invoice for services performed.

4. ACQUISITIONS

Third-Party Acquisitions

Knoxville Terminals Purchase

On April 16, 2018, the Partnership’s wholly-owned subsidiary, PLPT, completed the third-party Knoxville Terminals Purchase. The Knoxville Terminals consist of two refined product terminals located in Knoxville, Tennessee, which include product tanks, pipeline connections to the Colonial Pipeline Company and Plantation Pipe Line Company pipeline systems and truck loading facilities.

The aggregate purchase price for the Knoxville Terminals Purchase was $58,000, excluding working capital. The consideration was financed through a combination of cash on hand and borrowings under the Partnership’s Revolving Credit Facility (as defined in Note 7 “Debt” of the Notes to Consolidated Financial Statements). The final purchase price and fair value allocation were completed as of December 31, 2018.

PBFX accounted for the Knoxville Terminals Purchase as a business combination under GAAP whereby the Partnership recognizes assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition. Any excess consideration transferred over the estimated fair values of the identifiable net assets acquired is recorded as goodwill.

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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	$	58,000
Working capital	356
Total consideration	$	58,356

The following table summarizes the final amounts recognized for assets acquired and liabilities assumed as of the acquisition date:



	Fair Value Allocation
Prepaids and other current assets	$	356
Property, plant and equipment	45,768
Intangibles*	5,900
Goodwill	6,332
Estimated fair value of net assets acquired	$	58,356

* Intangibles are included in “Other non-current assets” within the Partnership’s consolidated balance sheets.

The Partnership’s consolidated financial statements for the year ended December 31, 2018 include the results of operations of the Knoxville Terminals since April 16, 2018, during which period the Knoxville Terminals contributed affiliate revenue of $652, third-party revenue of $5,382, and net income of $2,054. On an unaudited pro forma basis, the revenues and net income of PBFX assuming the acquisition had occurred on January 1, 2017, for the periods indicated, are shown below. The unaudited pro forma information does not purport to present what PBFX’s actual results would have been had the Knoxville Terminals Purchase occurred on January 1, 2017, nor is the financial information indicative of the results of future operations. The unaudited pro forma financial information includes the depreciation and amortization expense related to the acquisition and interest expense associated with the Knoxville Terminals Purchase financing.



	Year Ended December 31, 2018		Year Ended December 31, 2017
(Unaudited)	Year Ended December 31, 2018		Year Ended December 31, 2017
Pro forma revenues	$	286,970	$	272,267
Pro forma net income attributable to PBF Logistics LP unitholders:	75,862		91,182
Pro forma net income available per limited partner unit:
Common units - basic	$	1.74	$	2.17
Common units - diluted	1.74		2.17
Subordinated units - basic and diluted	—		2.15

East Coast Storage Assets Acquisition

On October 1, 2018, the Partnership closed the East Coast Storage Assets Acquisition, which had been contemplated by an agreement dated as of July 16, 2018 between the Partnership and Crown Point. The East Coast Storage Assets consist of a storage facility with multi-use storage capacity, an Aframax-capable marine facility, a rail facility, a truck terminal, equipment, contracts and certain other idled assets located on the Delaware River near Paulsboro, New Jersey. The Partnership is currently in the process of restarting certain of the acquired idled assets in connection with a third-party commercial agreement.

The aggregate purchase price for the East Coast Storage Assets Acquisition was $126,989, including working capital and the Contingent Consideration, which was comprised of an initial payment at closing of $75,000 with a remaining balance of $32,000 being payable one year after closing. The consideration was financed through a

100

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

combination of cash on hand and borrowings under the Partnership’s Revolving Credit Facility. The fair value allocation is subject to adjustment pending completion of the final purchase valuation, which was in process as of December 31, 2018.

PBFX accounted for the East Coast Storage Assets Acquisition as a business combination under GAAP whereby the Partnership recognizes assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition.

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



	Purchase Price
Gross purchase price*	$	105,900
Estimated working capital adjustments	(11		)
Contingent Consideration **	21,100
Total consideration	$	126,989

* Includes $30,900 net present value payable of $32,000 due to Crown Point one year after closing, which is included in “Accounts payable and accrued liabilities” within the Partnership’s consolidated balance sheets.

** Contingent Consideration is included in “Other long-term liabilities” within the Partnership’s consolidated balance sheets.

The following table summarizes the estimated amounts recognized for assets acquired and liabilities assumed as of the acquisition date:



	Fair Value Allocation
Accounts receivable	$	436
Prepaids and other current assets	1,770
Property, plant and equipment	114,406
Intangibles*	13,300
Accounts payable and accrued liabilities	(2,173		)
Other long-term liabilities	(750		)
Estimated fair value of net assets acquired	$	126,989

* Intangibles are included in “Other non-current assets” within the Partnership’s consolidated balance sheets.

The East Coast Storage Assets Acquisition includes an earn-out provision related to an existing commercial agreement with a third party, based on the future results of restarting certain of the acquired idled assets. Pursuant to the agreement, the Partnership and Crown Point will share equally in the future operating profits of the restarted assets, as defined in the agreement, over a contractual term of up to three years starting in 2020. The Partnership recorded the earn-out provision as Contingent Consideration based on its estimated fair value at the acquisition date. This amount of $21,100 was recorded within “Other long-term liabilities,” based on anticipated payments of $27,978, which are discounted over the contractual period starting in 2020.

The Partnership’s consolidated financial statements for the year ended December 31, 2018 include the results of operations of the East Coast Storage Assets since October 1, 2018, during which period the East Coast Storage Assets contributed third-party revenue of $5,918, and net income of $787. On an unaudited pro forma basis, the revenues and net income of PBFX assuming the acquisition had occurred on January 1, 2017, for the periods indicated, are shown below. The unaudited pro forma information does not purport to present what PBFX’s actual results would have been had the East Coast Storage Assets Acquisition occurred on January 1, 2017, nor is the financial information indicative of the results of future operations. The unaudited pro forma financial information includes the depreciation and amortization expense related to the acquisition and interest expense associated with the East Coast Storage Assets Acquisition financing.

101

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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



	Year Ended December 31, 2018		Year Ended December 31, 2017
(Unaudited)	Year Ended December 31, 2018		Year Ended December 31, 2017
Pro forma revenues	$	300,863	$	271,667
Pro forma net income attributable to PBF Logistics LP unitholders:	67,847		42,931
Pro forma net income available per limited partner unit:
Common units - basic	$	1.55	$	1.02
Common units - diluted	1.55		1.02
Subordinated units - basic and diluted	—		1.01

Toledo Products Terminal Acquisition

On April 17, 2017, the Partnership’s wholly-owned subsidiary, PLPT, completed the acquisition of the Toledo, Ohio refined products terminal assets (the “Toledo Products Terminal”) from Sunoco Logistics Partners L.P. (“Sunoco”) (the “Toledo Products Terminal Acquisition”). The Toledo Products Terminal is directly connected to, and currently supplied by, PBF Holding’s Toledo Refinery.

The aggregate purchase price for the Toledo Products Terminal Acquisition was $10,000, plus working capital. The consideration was funded in full with cash on hand.

PBFX accounted for the Toledo Products Terminal Acquisition as a business combination under GAAP whereby the Partnership recognizes assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition. The entire purchase consideration of $10,000 was allocated to Property, plant and equipment.

Plains Asset Purchase

On April 29, 2016, the Partnership’s wholly-owned subsidiary, PLPT, completed the acquisition (the “Plains Asset Purchase”) of four refined product terminals located in and around Philadelphia, Pennsylvania (the “East Coast Terminals”). The East Coast Terminals include product tanks, pipeline connections to the Colonial Pipeline Company, Buckeye Partners, L.P., Sunoco and other proprietary pipeline systems, truck loading lanes and marine facilities capable of handling barges and ships. The aggregate purchase price for the Plains Asset Purchase was $100,000, less working capital adjustments.

PBFX accounted for the Plains Asset Purchase as a business combination under U.S. GAAP whereby the Partnership recognizes assets acquired and liabilities assumed in an acquisition at their estimated fair values as of the date of acquisition.

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	$	100,000
Working capital adjustments	(1,627		)
Total consideration	$	98,373

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PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The following table summarizes the final amounts recognized for assets acquired and liabilities assumed as of the acquisition date:



	Fair Value Allocation
Prepaids and other current assets	$	4,221
Property, plant and equipment	99,342
Accounts payable and accrued expenses	(3,174		)
Other long-term liabilities	(2,016		)
Fair value of net assets acquired	$	98,373

The results of operations of the East Coast Terminals are included in the Partnership’s Consolidated Financial Statements for the full years ended December 31, 2018 and 2017. The Partnership’s Consolidated Financial Statements for the year ended December 31, 2016 include the results of operations of the East Coast Terminals since April 29, 2016 during which period the East Coast Terminals contributed affiliate revenue of $3,303, third-party revenue of $11,871 and net income of $5,133. On an unaudited pro forma basis, the revenues and net income of PBFX assuming the acquisition had occurred on January 1, 2015, are shown below. The unaudited pro forma information does not purport to present what PBFX’s actual results would have been had the Plains Asset Purchase 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 related to the acquisition and interest expense associated with the Plains Asset Purchase financing.



	Year Ended December 31, 2016
(Unaudited)	Year Ended December 31, 2016
Pro forma revenues	$	195,800
Pro forma net income attributable to the partners:	86,059
Pro forma net income per limited partner unit:
Common units - basic	$	2.11
Common units - diluted	2.11
Subordinated units - basic and diluted	2.11

Acquisitions from PBF

The following Acquisitions from PBF are transactions between affiliate companies. As a result, these acquisitions were accounted for as a transfer of assets between entities under common control under GAAP. The assets and liabilities of the Acquisitions from PBF were transferred at their historical carrying value.

Development Assets Acquisition

On July 31, 2018, the Partnership closed the Development Assets Acquisition. Pursuant to the Development Assets Contribution Agreements, the Partnership acquired from PBF LLC all of the issued and outstanding limited liability company interests of TRLC, whose assets consist of the Toledo Rail Products Facility; CLC, whose assets consist of the Chalmette Truck Rack and the Chalmette Rosin Yard; PTC, whose assets consist of the Paulsboro Lube Oil Terminal; and DSLC, whose assets consist of the Delaware Ethanol Storage Facility. In connection with the Development Asset Acquisition, the Partnership entered into various commercial agreements with PBF Holding and assumed a commercial agreement with a third party. The Development Assets Acquisition closed on July 31, 2018 for total consideration of $31,586, consisting of 1,494,134 common units issued to PBF LLC.

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PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

PNGPC Acquisition

On February 28, 2017, the Partnership closed the acquisition of Paulsboro Natural Gas Pipeline Company LLC (“PNGPC”), which had been contemplated by a contribution agreement dated as of February 15, 2017 between the Partnership and PBF LLC (the “PNGPC Contribution Agreement”). Pursuant to the PNGPC Contribution Agreement, the Partnership, through its wholly-owned subsidiary, PBFX Operating Company LLC (“PBFX Op Co”), acquired from PBF LLC all of the issued and outstanding limited liability company interests of PNGPC (the “PNGPC Acquisition”), which owned and operated an existing interstate natural gas pipeline subject to regulation by the Federal Energy Regulation Commission. In connection with the PNGPC Acquisition, the Partnership constructed a new pipeline to replace the existing pipeline, which commenced services in August 2017 (the “Paulsboro Natural Gas Pipeline”). The Paulsboro Natural Gas Pipeline serves PBF Holding’s Paulsboro Refinery.

In consideration for the PNGPC limited liability company interests, the Partnership delivered to PBF LLC (i) an $11,600 intercompany promissory note in favor of Paulsboro Refining Company LLC (“PRC”), a wholly-owned subsidiary of PBF Holding (the “Affiliate Note Payable”), (ii) an expansion rights and right of first refusal agreement in favor of PBF LLC with respect to the Paulsboro Natural Gas Pipeline and (iii) an assignment and assumption agreement with respect to certain outstanding litigation involving PNGPC and the existing pipeline. As a result of the completion of the Paulsboro Natural Gas Pipeline in the fourth quarter of 2017, the Partnership fully repaid the Affiliate Note Payable and related accrued interest.

TVPC Acquisition

On August 31, 2016, the Partnership entered into a contribution agreement with PBF LLC (the “TVPC Contribution Agreement”). Pursuant to the TVPC Contribution Agreement, the Partnership, through its wholly-owned subsidiary, PBFX Op Co, acquired from PBF LLC 50% of the issued and outstanding limited liability company interests of TVPC, whose assets consist of the Torrance Valley Pipeline, which supports PBF Holding’s Torrance Refinery (the “TVPC Acquisition”). The Torrance Valley Pipeline consists of the M55, M1 and M70 pipeline systems, including pipeline stations with storage capacity and truck unloading capability. Total consideration paid to PBF LLC was $175,000.

The following table summarizes the final amounts recognized for assets acquired and liabilities assumed as of the acquisition date:



	Fair Value Allocation
Property, plant and equipment	$	350,475
Other long-term liabilities	(475		)
Fair value of net assets acquired	$	350,000

The results of operations of TVPC are included in the Partnership’s Consolidated Financial Statements for the full years ended December 31, 2018 and 2017. The Partnership’s Consolidated Financial Statements for the year-ended December 31, 2016 include the results of operations of TVPC since July 1, 2016, including the historical results prior to its acquisition on August 31, 2016, during which period TVPC contributed affiliate revenue of $24,717 and net income of $6,341. On an unaudited pro forma basis, the revenues and net income of PBFX assuming the acquisition had occurred on January 1, 2015, are shown below. The unaudited pro forma information does not purport to present what PBFX’s actual results would have been had the TVPC 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 related to the acquisition and interest expense associated with the TVPC Acquisition financing.

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PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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



	Year Ended December 31, 2016
(Unaudited)	Year Ended December 31, 2016
Pro forma revenues	$	236,723
Pro forma net income attributable to the partners:	90,967
Pro forma net income per limited partner unit:
Common units - basic	$	2.18
Common units - diluted	2.18
Subordinated units - basic and diluted	2.18

As the Acquisitions from PBF were considered transfers of businesses between entities under common control, the TRLC, CLC, PTC and DSLC assets and liabilities were transferred at their historical carrying value of $12,677 as of July 31, 2018. The PNGPC assets and liabilities were transferred at their historical carrying value of $11,538 as of February 28, 2017. The TVPC assets and liabilities were transferred at their historical carrying value of $344,989 as of August 31, 2016, of which 50% was allocated to noncontrolling interest in equity (“NCI”). The historical financial statements have been retrospectively adjusted to reflect the financial position, results of operations and cash flows of TRLC, CLC, PTC, PNGPC, and TVPC. No retrospective adjustments were made regarding DSLC as the Delaware Ethanol Storage Facility was considered an asset purchase. Net income (loss) attributable to TRLC, CLC, PTC, PNGPC and TVPC prior to their respective effective dates were allocated entirely to PBF GP as if only PBF GP had rights to that net income (loss); therefore, there is no retrospective adjustment to net income per unit.

PBFX’s Consolidated Financial Statements include TVPC, a variable interest entity with the interest in TVPC not owned by PBFX reflected as a reduction to net income and equity as a noncontrolling interest. In accordance with the Amended and Restated Limited Liability Company Agreement of TVPC (the “TVPC LLC Agreement”), PBFX Op Co serves as TVPC’s managing member. PBFX, through its ownership of PBFX Op Co, has the sole ability to direct the activities of TVPC that most significantly impact its economic performance. PBFX is also considered to be the primary beneficiary for accounting purposes, and as a result, fully consolidates TVPC. TVPC provides transportation and storage services to PBF Holding, primarily under fee-based contracts.

Acquisition Expenses

PBFX incurred acquisition related costs of $2,896 for the year ended December 31, 2018, consisting primarily of consulting and legal expenses related to the Knoxville Terminals Purchase, the East Coast Storage Assets Acquisition, the Development Assets Acquisition and other pending and non-consummated acquisitions. Acquisition related costs were $533 for the year ended December 31, 2017, consisting primarily of consulting and legal expenses related to the PNGPC Acquisition, the Toledo Products Terminal Acquisition and other pending and non-consummated acquisitions. Acquisition related costs were $3,522 for the year ended December 31, 2016, consisting primarily of consulting and legal expenses related to the Plains Asset Purchase, the TVPC Acquisition and other pending and non-consummated acquisitions. These costs are included in “General and administrative expenses” within the Partnership’s consolidated statements of operations.

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PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

5. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the following:



	December 31, 2018			December 31, 2017

Land	$	115,957		$	99,707
Terminals and equipment	259,441			211,797
Pipelines	337,474			333,609
Storage facilities	213,937			90,373
Construction in progress	20,439			4,810
	947,248			740,296
Accumulated depreciation	(85,131		)	(55,808		)
Property, plant and equipment, net	$	862,117		$	684,488

Capitalized interest in connection with construction during 2018 and 2017 was $143 and $1,219, respectively. Depreciation expense was $29,414, $24,404 and $15,406 for the years ended December 31, 2018, 2017 and 2016, respectively.

6. GOODWILL AND INTANGIBLES

Goodwill

On April 16, 2018, the Partnership’s wholly-owned subsidiary, PLPT, completed the Knoxville Terminals Purchase. As a result of the preliminary purchase price allocation, goodwill was recorded. Refer to Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements for further discussion regarding the Knoxville Terminals Purchase and the preliminary purchase price allocation.

As of December 31, 2018, the carrying amount of goodwill was $6,332, all of which was recorded within the Transportation and Terminaling segment. The Partnership performed its annual goodwill impairment assessment as of July 1, 2018 and determined that the carrying value of goodwill was not impaired.

Intangibles

As a result of the preliminary purchase price allocation of the Knoxville Terminals Purchase and the East Coast Storage Assets Acquisition, customer related intangibles were recorded. Refer to Note 4 “Acquisitions” of the Notes to Consolidated Financial Statements for further discussion regarding the Knoxville Terminals Purchase and the East Coast Storage Assets Acquisition and the respective preliminary purchase price allocations.

As of December 31, 2018, the Partnership’s net intangible balance consisted of the following:



	December 31, 2018
Customer contracts	$	13,300
Customer relationships	5,900
Accumulated amortization	(395		)
Total intangibles	$	18,805

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PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Amortization expense was $395 for the year ended December 31, 2018. The Partnership estimates amortization expense for the next five years as follows:



Year Ending December 31,
2019	$	901
2020	5,332
2021	5,332
2022	4,931
2023	499

7. DEBT

On May 14, 2014, in connection with the closing of PBFX’s IPO, the Partnership entered into a five-year, $360,000 senior secured revolving credit facility (the “Original Revolving Credit Facility”) with Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders. On July 30, 2018, the Partnership amended the Original Revolving Credit Facility and entered into an amended and restated revolving credit facility (as amended, the “Revolving Credit Facility”) with Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders for an increased capacity of $500,000.

The Revolving Credit Facility is available to fund working capital, acquisitions, distributions and capital expenditures and for other general partnership purposes. The Partnership has the ability to increase the maximum amount of the Revolving Credit Facility by an aggregate amount of up to $250,000, to a total facility size of $750,000, subject to receiving increased commitments from the lenders or other financial institutions and satisfaction of certain conditions. The Revolving Credit Facility includes a $75,000 sublimit for standby letters of credit and a $25,000 sublimit for swingline loans. Obligations under the Revolving Credit Facility are guaranteed by the Partnership’s restricted subsidiaries and secured by a first priority lien on the Partnership’s assets and those of the Partnership’s restricted subsidiaries. The maturity date of the Revolving Credit Facility is July 30, 2023 and may be extended for one year on up to two occasions, subject to certain customary terms and conditions. Borrowings under the Revolving Credit Facility will bear interest either at the Base Rate (as defined in the Revolving Credit Agreement, which is defined below) plus an applicable margin ranging from 0.75% to 1.75%, or at LIBOR plus an applicable margin ranging from 1.75% to 2.75%. The applicable margin will vary based upon the Partnership’s Consolidated Total Leverage Ratio (as defined in the Revolving Credit Agreement).

The agreement governing the Revolving Credit Facility (the “Revolving Credit Agreement”) contains affirmative and negative covenants customary for revolving credit facilities of this nature which, among other things, limit or restrict the Partnership’s ability and the ability of its restricted subsidiaries to incur or guarantee debt, incur liens, make investments, make restricted payments, amend material contracts, engage in certain business activities, engage in mergers, consolidations and other organizational changes, sell, transfer or otherwise dispose of assets, enter into burdensome agreements or enter into transactions with affiliates on terms which are not at arm’s length. Additionally, the Partnership is required to maintain the following financial ratios, each as defined in the Revolving Credit Agreement: (a) Consolidated Interest Coverage of at least 2.50 to 1.00, (b) Consolidated Total Leverage of not greater than 4.50 to 1.00 and (c) Consolidated Senior Secured Leverage of not greater than 3.50 to 1.00.

The Revolving Credit Agreement contains events of default customary for transactions of its nature, including, but not limited to (and subject to grace periods in certain circumstances), the failure to pay any principal, interest or fees when due, failure to perform or observe any covenant contained in the Revolving Credit Agreement or related documentation, any representation or warranty made in the agreements or related documentation being untrue in any material respect when made, default under certain material debt agreements, commencement of bankruptcy or other insolvency proceedings, certain changes in the Partnership’s ownership or the ownership or board composition of PBF GP and material judgments or orders. Upon the occurrence and during the continuation

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PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

of an event of default under the Revolving Credit Agreement, the lenders may, among other things, terminate their commitments, declare any outstanding loans to be immediately due and payable and/or exercise remedies against the Partnership and the collateral as may be available to the lenders under the Revolving Credit Agreement and related documentation or applicable law.

At December 31, 2018, PBFX had $156,000 of borrowings and $4,010 of letters of credit outstanding under the Revolving Credit Facility.

Senior Notes

On May 12, 2015, the Partnership entered into an indenture (as supplemented by the supplemental indenture for the additional 2023 Notes, the “Indenture”) among the Partnership, PBF Logistics Finance Corporation, a Delaware corporation and wholly-owned subsidiary of the Partnership (“PBF Logistics Finance,” and together with the Partnership, the “Issuers”), the Guarantors (as defined below) and Deutsche Bank Trust Company Americas, as Trustee, under which the Issuers issued $350,000 in aggregate principal amount of 6.875% Senior Notes due 2023 ( the “initial 2023 Notes”).

On October 6, 2017, the Partnership entered into a supplemental indenture for the purpose of issuing $175,000 in aggregate principal amount of 6.875% Senior Notes due 2023 (the “additional 2023 Notes,” and together with the initial 2023 Notes, the “2023 Notes”). The additional 2023 Notes were issued at 102% of face value with an effective interest rate of 6.442%. The additional 2023 Notes are treated as a single series with the initial 2023 Notes and have the same terms as those of the initial 2023 Notes, except that (a) the additional 2023 Notes are subject to a separate registration rights agreement, which was filed and deemed effective on April 2, 2018, and the exchange was finalized in May 2018, and (b) the additional 2023 Notes were issued initially under CUSIP numbers different from the initial 2023 Notes.

At December 31, 2018, PBFX had $525,000 of borrowings outstanding under the 2023 Notes.

The 2023 Notes are guaranteed on a senior unsecured basis by Delaware City Logistics Company LLC (“DCLC”), Delaware Pipeline Company LLC (“DPC”), Delaware City Terminaling Company LLC (“Delaware City Terminaling”), Toledo Terminaling Company LLC (“Toledo Terminaling”), PLPT, PBFX Op Co, TVPC, PNGPC, TRLC, CLC, PTC and DSLC (collectively, the “Guarantors” and each a “Guarantor”). In addition, PBF LLC provides a limited guarantee of collection of the principal amount of the 2023 Notes, but is not otherwise subject to the covenants of the Indenture. The 2023 Notes are general senior unsecured obligations of the Issuers and are equal in right of payment with all of the Issuers’ existing and future senior indebtedness, including amounts outstanding under the Revolving Credit Facility. The 2023 Notes are effectively subordinated to all of the Issuers’ and the Guarantors’ existing and future secured debt, including the Revolving Credit Facility, to the extent of the value of the assets securing that secured debt and will be structurally subordinated to all indebtedness of the Partnership’s subsidiaries that do not guarantee the 2023 Notes. The 2023 Notes will mature on May 15, 2023. The 2023 Notes will be senior to any future subordinated indebtedness the Issuers may incur. The Partnership pays interest on the 2023 Notes semi-annually in cash in arrears on May 15 and November 15 of each year.

The Indenture contains customary terms, events of default and covenants for transactions of this nature. These covenants include limitations on the Partnership’s and its restricted subsidiaries’ ability to, among other things: (i) make investments, (ii) incur additional indebtedness or issue preferred units, (iii) pay dividends or make distributions on units or redeem or repurchase our subordinated debt, (iv) create liens, (v) incur dividend or other payment restrictions affecting subsidiaries, (vi) sell assets, (vii) merge or consolidate with other entities and (viii) enter into transactions with affiliates. These covenants are subject to a number of important limitations and exceptions.

The Issuers may redeem all or part of the 2023 Notes, in each case at the redemption prices described in the Indenture, together with any accrued and unpaid interest to the date of redemption. If the Partnership undergoes

108

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

certain change of control events, holders of the 2023 Notes will have the right to require the Issuers to purchase all or any part of the 2023 Notes at a price equal to 101% of the aggregate principal amount of the 2023 Notes, together with any accrued and unpaid interest to the date of purchase. In connection with certain asset dispositions, the Issuers will be required to use the net cash proceeds of the asset dispositions (subject to a right to reinvest such net cash proceeds) to make an offer to purchase the 2023 Notes at 100% of the principal amount, together with any accrued and unpaid interest to the date of purchase.

The Issuers may issue additional 2023 Notes from time to time pursuant to the Indenture.

Fair Value Measurement

The estimated fair value of the Revolving Credit Facility approximates its carrying value, categorized as a Level 2 measurement, as this borrowing bears interest based upon short-term floating market interest rates. The estimated fair value of the 2023 Notes, 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 2023 Notes and was approximately $515,336 at December 31, 2018. The carrying value and fair value of PBFX’s debt, exclusive of unamortized debt issuance costs and unamortized premium on the additional 2023 Notes, was $681,000 and $671,336 as of December 31, 2018 and $554,700 and $573,818 as of December 31, 2017, respectively.

Debt Maturities

Debt maturing in the next five years and thereafter is as follows:



Year Ending December 31,
2019	$	—
2020	—
2021	—
2022	—
2023	681,000
Thereafter	—
Total debt outstanding	681,000
Unamortized debt issuance costs	(10,496		)
Unamortized 2023 Notes premium	2,820
Net carrying value of debt	$	673,324

8. EQUITY

PBFX had 25,395,032 common units held by the public outstanding as of December 31, 2018. PBF LLC owns 19,953,631 of PBFX’s common units constituting an aggregate of 44.0% of PBFX’s limited partner interest as of December 31, 2018. On June 1, 2017, the requirements under PBFX’s partnership agreement for the conversion of all subordinated units into common units were satisfied and the subordination period ended. As a result, each of the Partnership’s 15,886,553 outstanding subordinated units converted on a one-for-one basis into common units and began participating pro rata with the other common units in distributions of available cash. The conversion did not impact the amount of the cash distribution paid or the total number of the Partnership’s outstanding units representing limited partner interests.

109

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Share Activity

The partnership agreement authorizes PBFX to issue an unlimited number of additional partnership interests for the consideration and on the terms and conditions determined by PBFX’s general partner without the approval of the unitholders. It is possible that PBFX will fund future acquisitions through the issuance of additional common units, subordinated units or other partnership interests.

The following table presents changes in PBFX common and subordinated units outstanding:



	December 31,
	2018	2017
	Common Units	Common Units	Subordinated Units - PBF LLC
Balance at beginning of period	41,900,708	25,844,118	15,886,553
Vesting of phantom units, net of forfeitures	178,071	170,037	—
New units issued	3,269,884	—	—
Conversion of subordinated units	—	15,886,553	(15,886,553	)
Balance at end of period	45,348,663	41,900,708	—

On July 16, 2018, the Partnership entered into a common unit purchase agreement with certain funds managed by Tortoise Capital Advisors, L.L.C. providing for the issuance and sale in a registered direct offering (the “Registered Direct Offering”) of an aggregate of 1,775,750 common units representing limited partner interests for gross proceeds of $35,000. The Registered Direct Offering closed on July 30, 2018. On July 31, 2018, the Partnership issued 1,494,134 common units representing limited partner interests, having an aggregate value of $31,586, to PBF LLC in connection with the Development Assets Acquisition. On April 5, 2016, PBFX completed a public offering of an aggregate of 2,875,000 common units, including 375,000 common units that were sold pursuant to the full exercise by the underwriter of its option to purchase additional common units, for net proceeds of $51,625, after deducting underwriting discounts and commissions and other offering expenses (the “April 2016 Offering”). On August 17, 2016, PBFX completed a public offering of an aggregate of 4,000,000 common units, with an underwriter’s option to purchase an additional 600,000 common units, of which 375,000 units were subsequently purchased on September 14, 2016, for a total of 4,375,000 units and total net proceeds of $86,753, after deducting underwriting discounts and commissions and other offering expenses (the “August 2016 Offering”).

Additionally, 233,993, 217,171 and 116,349 of the Partnership’s phantom units issued under the PBFX 2014 Long-Term Incentive Plan (“LTIP”) vested and were converted into common units held by certain directors, officers and current and former employees of PBFX’s general partner or its affiliates during the years ended December 31, 2018, 2017 and 2016, respectively.

Holders of any additional common units PBFX issues will be entitled to share equally with the then-existing common unitholders in PBFX’s distributions of available cash. Refer to Note 9 “Unit-Based Compensation” of the Notes to Consolidated Financial Statements for further information.

Noncontrolling Interest

PBFX’s wholly-owned subsidiary, PBFX Op Co, holds a 50% controlling interest in TVPC, with the other 50% interest in TVPC held by TVP Holding Company LLC (“TVP Holding”), a subsidiary of PBF Holding. PBFX Op Co is the sole managing member of TVPC. PBFX, through its ownership of PBFX Op Co, consolidates the financial results of TVPC and records a noncontrolling interest for the economic interest in TVPC held by TVP Holding. Noncontrolling interest on the consolidated statements of operations includes the portion of net income or loss attributable to the economic interest in TVPC held by TVP Holding. Noncontrolling interest on the consolidated balance sheets includes the portion of net assets of TVPC attributable to TVP Holding.

110

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Allocations of Net Income

PBFX’s partnership agreement contains provisions for the allocation of net income and loss to the unitholders. For purposes of maintaining partner capital accounts, PBFX’s partnership agreement specifies that items of income and loss shall be allocated among the partners in accordance with their respective percentage interest. Normal allocations according to percentage interests are made after giving effect, if any, to priority income allocations in an amount equal to incentive cash distributions allocated 100% to PBF LLC. Subsequent to the closing of the IDR Restructuring, the IDRs will be canceled and, as a result, no income was allocated to the IDR holder as the holder will not be entitled to an IDR distribution related to the fourth quarter of 2018.

The tables below summarize PBFX’s 2018 and 2017 quarterly distribution cash declarations, payments and scheduled payments through March 14, 2019:



	2018
	Declaration Date	Record Date	Payment Date	Quarterly Distribution per Common Unit
First quarter	May 3	May 15	May 30	$	0.4900
Second quarter	August 2	August 15	August 30	0.4950
Third quarter	October 31	November 15	November 30	0.5000
Fourth quarter	February 14, 2019	March 1, 2019	March 14, 2019	0.5050
Total				$	1.9900



	2017
	Declaration Date	Record Date	Payment Date	Quarterly Distribution per Common and Subordinated Unit
First quarter	May 4	May 16	May 31	$	0.4600
Second quarter	August 3	August 15	August 31	0.4700
Third quarter	November 2	November 13	November 29	0.4800
Fourth quarter	February 15, 2018	February 28, 2018	March 14, 2018	0.4850
Total				$	1.8950

PBFX’s distributions are declared subsequent to quarter end. The following table reflects the allocation of total cash distributions to the general and limited partners applicable to the period in which the distributions were earned:



	Year Ended December 31, 2018		Year Ended December 31, 2017
IDR - PBF LLC ⁽¹⁾	$	10,011	$	9,055
Limited partners’ distributions:
Common units	95,120		73,322
Subordinated units – PBF LLC	—		7,308
Total distributions	105,131		89,685
Total cash distributions ⁽²⁾	$	103,679	$	88,428

(1) Subsequent to the closing of the IDR Restructuring, the IDRs will be canceled and no distributions will be made to PBF LLC with respect to the IDRs and the newly issued PBFX common units will be entitled to normal distributions. As a result, the IDR holder will not be entitled to an IDR distribution related to the fourth quarter of 2018.

(2) Excludes phantom unit distributions, which are accrued and paid upon vesting.

111

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

9. UNIT-BASED COMPENSATION

PBF GP’s board of directors adopted the LTIP in connection with the completion of the IPO. The LTIP is for the benefit of employees, consultants, service providers and non-employee directors of the general partner and its affiliates.

Under the LTIP, PBFX issues phantom unit awards to certain directors, officers and seconded employees of our general partner or its affiliates and its employees as compensation. The fair value of each phantom unit on the grant date is equal to the market price of PBFX’s common units on that date. The estimated fair value of PBFX’s phantom units is amortized over the vesting period of four years, using the straight-line method. Total unrecognized compensation cost related to PBFX’s nonvested phantom units totaled $7,032 as of December 31, 2018, which is expected to be recognized over a weighted-average period of four years. The fair value of nonvested service phantom units outstanding as of December 31, 2018, totaled $14,714.

Unit-based compensation expense related to the Partnership was $5,757, $5,345 and $4,360 for the years ended December 31, 2018, 2017 and 2016, respectively. These expenses are included in “General and administrative expenses” within the Partnership’s consolidated statements of operations.

In the year ended December 31, 2016, unit-based compensation expense included $1,123 of expense associated with the accelerated vesting of phantom units in accordance with grant agreements related to the retirement of certain of PBF GP’s officers. There were no accelerated vesting of phantom units for the years ended December 31, 2018 and 2017.

A summary of PBFX’s unit award activity for the years ended December 31, 2018, 2017 and 2016, is set forth below:



	Number of Phantom Units		Weighted Average Grant Date Fair Value
Nonvested at December 31, 2015	403,375		$	25.06
Granted	284,854		19.95
Vested	(116,349	)	25.24
Forfeited	(7,000	)	23.20
Nonvested at December 31, 2016	564,880		22.47
Granted	319,940		20.97
Vested	(217,171	)	23.15
Forfeited	(24,875	)	21.23
Nonvested at December 31, 2017	642,774		21.54
Granted	328,052		19.95
Vested	(233,993	)	22.71
Forfeited	(20,125	)	18.81
Nonvested at December 31, 2018	716,708		$	20.53

PBFX’s long-term incentive plans provide for the issuance of distribution equivalent rights (“DERs”) in connection with phantom unit awards. A DER entitles the participant, upon vesting of the related phantom units, to a mandatory cash payment equal to the product of the number of vested phantom unit awards and the cash distribution per common unit paid by PBFX to its common unitholders during the vesting period. Cash payments made in connection with DERs are charged to partners’ equity, accrued and paid upon vesting.

112

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

10. NET INCOME PER UNIT

Earnings in excess of distributions are allocated to the limited partners based on their respective ownership interests. Payments made to PBFX’s unitholders are determined in relation to actual distributions declared and are not based on the net income (loss) allocations used in the calculation of net income (loss) per unit.

Diluted net income per unit includes the effects of potentially dilutive units of PBFX’s common units that consist of unvested phantom units. Diluted net income per unit excludes the effects of 20,750, 92,166 and 324,729 phantom units because they were anti-dilutive for the years ended December 31, 2018, 2017 and 2016, respectively. Basic and diluted net income per unit applicable to subordinated limited partners are the same because there are no potentially dilutive subordinated units outstanding.

In addition to the common and subordinated units (prior to the conversion to common units), PBFX has also identified the IDRs as participating securities and uses the two-class method when calculating the net income per unit applicable to limited partners that is based on the weighted-average number of common units outstanding during the period. In 2018, the Partnership issued 1,775,750 common units representing limited partner interests in connection with the Registered Direct Offering and 1,494,134 common units representing limited partner interests to PBF LLC in connection with the Development Assets Acquisition. In 2016, the Partnership issued 2,875,000 common units in connection with the April 2016 Offering and 4,000,000 common units in August 2016 and 375,000 common units in September 2016, upon exercise of the underwriter’s purchase option, in connection with the August 2016 Offering.

On February 13, 2019, the Partnership entered into the IDR Restructuring Agreement with PBF LLC and PBF GP, pursuant to which the IDRs held by PBF LLC will be canceled and converted into 10,000,000 newly issued PBFX common units. The IDR Restructuring is expected to close on February 28, 2019. Subsequent to the closing of the IDR Restructuring, no distributions will be made to PBF LLC with respect to the IDRs and the newly issued PBFX common units will be entitled to normal distributions.

On June 1, 2017, following the May 31, 2017 payment of the cash distribution attributable to the second quarter of 2017, the requirements under PBFX’s partnership agreement for the conversion of all subordinated units into common units were satisfied and the subordination period for such subordinated units ended. As a result, in the second quarter of 2017, each of the Partnership’s 15,886,553 outstanding subordinated units converted on a one-for-one basis into common units and began participating pro rata with the other common units in distributions of available cash. The conversion did not impact the amount of the cash distribution paid or the total number of the Partnership’s outstanding units representing limited partner interests. The Partnership’s net income was allocated to the general partner, the limited partners, including the holder of the subordinated units through May 31, 2017 and IDR holder, in accordance with the partnership agreement.

When calculating basic earnings per unit under the two-class method for a master limited partnership, net income for the current reporting period is reduced by the amount of available cash that has been or will be distributed to the limited partners and IDR holder for that reporting period. Subsequent to the closing of the IDR Restructuring on February 28, 2019, the IDRs will be canceled and, as a result, no income was allocated to the IDR holder with respect to the fourth quarter of 2018 as the holder will not be entitled to an IDR distribution for the fourth quarter of 2018. Net loss attributable to the Development Assets Acquisition prior to the effective date was allocated entirely to PBF GP as if only PBF GP had rights to that net loss; therefore, there is no retrospective adjustment to net income per unit.

113

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The following table shows the calculation of earnings less distributions:



	Year Ended December 31, 2018
	Limited Partner Common Units			IDRs - PBF LLC		Total
Net income attributable to the partners:
Distributions declared⁽¹⁾	$	95,120		$	10,011	$	105,131
Earnings less distributions	(19,670		)	—		(19,670		)
Net income attributable to the partners⁽¹⁾	$	75,450		$	10,011	$	85,461

Weighted-average units outstanding - basic	43,646,997
Weighted-average units outstanding - diluted	43,731,299

Net income per limited partner unit - basic	$	1.73
Net income per limited partner unit - diluted	$	1.73

(1) Subsequent to the closing of the IDR Restructuring, the IDRs will be canceled and no distributions will be made to PBF LLC with respect to the IDRs and the newly issued PBFX common units will be entitled to normal distributions. As a result, no income was allocated to the IDR holder as the holder will not be entitled to an IDR distribution related to the fourth quarter of 2018.



	Year Ended December 31, 2017
	Limited Partner Common Units		Limited Partner Subordinated Units – PBF LLC		IDRs - PBF LLC		Total
Net income attributable to the partners:
Distributions declared	$	73,322	$	7,308	$	9,055	$	89,685
Earnings less distributions	3,897		6,855		—		10,752
Net income attributable to the partners	$	77,219	$	14,163	$	9,055	$	100,437

Weighted-average units outstanding - basic	35,505,446		6,572,245
Weighted-average units outstanding - diluted	35,568,760		6,572,245

Net income per limited partner unit - basic	$	2.17	$	2.15
Net income per limited partner unit - diluted	$	2.17	$	2.15

114

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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



	Year Ended December 31, 2016
	Limited Partner Common Units		Limited Partner Subordinated Units – PBF LLC		IDRs - PBF LLC		Total
Net income attributable to the partners:
Distributions declared	$	42,232	$	27,642	$	4,031	$	73,905
Earnings less distributions	2,778		4,277		—		7,055
Net income attributable to the partners	$	45,010	$	31,919	$	4,031	$	80,960

Weighted-average units outstanding - basic	22,288,118		15,886,553
Weighted-average units outstanding - diluted	22,338,784		15,886,553

Net income per limited partner unit - basic	$	2.01	$	2.01
Net income per limited partner unit - diluted	$	2.01	$	2.01

11. COMMITMENTS AND CONTINGENCIES

The DCR Rail Terminal and the DCR West Rack are collocated with PBF Holding’s Delaware City Refinery and are located in Delaware’s coastal zone where certain activities are regulated under the Delaware Coastal Zone Act (the “CZA”). Therefore, determinations regarding the CZA that impact the Delaware City Refinery may potentially adversely impact the Partnership’s assets even if the Partnership is not directly involved.

The Delaware City Refinery appealed a Notice of Penalty Assessment and Secretary’s Order issued in March 2017 (the “2017 Secretary’s Order”), including a $150 fine, alleging violation of a 2013 Secretary’s Order authorizing crude oil shipment by barge (the “2013 Secretary’s Order”). The Delaware Department of Natural Resources and Environmental Control’s (“DNREC”) determined that the Delaware City Refinery had violated the 2013 Secretary’s Order by failing to make timely and full disclosure to DNREC about the nature and extent of certain shipments and had misrepresented the number of shipments that went to other facilities. The Notice of Penalty Assessment and 2017 Secretary’s Order conclude that the 2013 Secretary’s Order was violated by the Delaware City Refinery by shipping crude oil from the Partnership’s Delaware City assets to three locations other than PBF Holding’s Paulsboro Refinery, on 15 days in 2014, making a total of 17 separate barge shipments containing approximately 35,700,000 gallons of crude oil in total. On April 28, 2017, the Delaware City Refinery appealed the Notice of Penalty Assessment and 2017 Secretary’s Order. On March 5, 2018, the Notice of Penalty Assessment was settled by DNREC, the Delaware Attorney General and the Delaware City Refinery for $100. The Delaware City Refinery made no admissions with respect to the alleged violations and agreed to request a CZA status decision prior to making crude oil shipments to destinations other than the Paulsboro Refinery. The Delaware City Refinery has paid the penalty. The CZA status decision was submitted to the DNREC and the outstanding appeal was withdrawn as required under the settlement agreement.

On December 28, 2016, DNREC issued a CZA permit (the “Ethanol Permit”) to the Delaware City Refinery allowing the utilization of existing tanks and existing marine loading equipment at their existing facilities to enable denatured ethanol to be loaded from storage tanks to marine vessels and shipped to offsite facilities. On January 13, 2017, the issuance of the Ethanol Permit was appealed by two environmental groups. On February 27, 2017, the Coastal Zone Industrial Board (the “Coastal Zone Board”) held a public hearing and dismissed the appeal, determining that the appellants did not have standing. The appellants filed an appeal of the Coastal Zone Board’s decision with the Delaware Superior Court (the “Superior Court”) on March 30, 2017. On January 19, 2018, the Superior Court rendered an Opinion regarding the decision of the Coastal Zone Board to dismiss the appeal of the Ethanol Permit for the ethanol project. The Judge determined that the record created by the Coastal Zone Board was insufficient for the Superior Court to make a decision, and therefore remanded the case back to the Coastal

115

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Zone Board to address the deficiency in the record. Specifically, the Superior Court directed the Coastal Zone Board to address any evidence concerning whether the appellants’ claimed injuries would be affected by the increased quantity of ethanol shipments. On remand, the Coastal Zone Board met on January 28, 2019 and reversed its previous decision on standing, ruling that the appellants have standing to appeal the issuance of the Ethanol Permit. The Delaware City Refinery is currently evaluating its appeal options.

On October 19, 2017, the Delaware City Refinery received approval from DNREC for the construction and operation of the ethanol marketing project to allow for a combined total loading of up to 10,000 barrels per day (“bpd”), on an annual average basis, of ethanol on to marine vessels at the marine piers and the terminal truck loading rack, subject to certain operational and emissions limitations as well as other conditions. On the same date, DCLC 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 to the existing vapor recovery unit located at its terminal in Delaware City. This approval is also subject to certain operational and emission limitations as well as other conditions.

Environmental Matters

PBFX’s assets, along with PBF Energy’s refineries, 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 composition of fuels. Compliance with existing and anticipated laws and regulations can increase the overall cost of operating the Partnership’s assets, including remediation, operating costs and capital costs to construct, maintain and upgrade equipment and facilities.

In connection with PBF Holding’s acquisition of the DCR 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 its acquisition of the DCR assets and the Paulsboro Refinery, PBF Holding and Valero purchased ten-year, $75,000 environmental insurance policies to insure against unknown environmental liabilities at each site. In connection with PBF Holding’s Toledo Refinery acquisition, Sunoco Inc. (R&M) 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 its purchase of the East Coast Terminals, the Partnership is responsible for the environmental remediation costs for conditions that existed on the closing date up to a maximum of $250 per year for ten years, with Plains All American Pipeline, L.P. remaining responsible for any and all additional costs above such amounts during such period. The environmental liability of $1,570 recorded as of December 31, 2018 ($1,923 as of December 31, 2017) represents the present value of expected future costs discounted at a rate of 1.83%. At December 31, 2018, the undiscounted liability is $1,698 and the Partnership expects to make aggregate payments for this liability of $1,250 over the next five years. The current portion of the environmental liability is recorded in “Accounts payable and accrued liabilities” and the non-current portion is recorded in “Other long-term liabilities” within the Partnership’s consolidated balance sheets.

In connection with PBF Holding’s acquisition of the Torrance Refinery and related logistics assets, PBF Holding is responsible for all known and unknown environmental liabilities at each site acquired in connection with the acquisition. The total estimated liability of known environmental obligations associated with the Torrance Valley Pipeline was $132 as of December 31, 2018 ($256 as of December 31, 2017). In accordance with the contribution agreement associated with the TVPC Acquisition, PBF Holding has indemnified the Partnership for any and all costs associated with environmental remediation for obligations that existed on or before August 31, 2016, including all known or unknown events, which includes the recorded liability of $132. At December 31, 2018, the Partnership expects to make the full aggregate payment for this liability within the next five years. The

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

current portion of the environmental liability is recorded in “Accounts payable and accrued liabilities” and the non-current portion is recorded in “Other long-term liabilities” within the Partnership’s consolidated balance sheets. PBFX has recorded a receivable from PBF Holding in “Accounts receivable - affiliates” within the Partnership’s consolidated balance sheets for such anticipated payments related to the known pre-existing Torrance Valley Pipeline environmental obligations for which PBFX is indemnified.

In connection with the Partnership’s purchase of the Toledo Products Terminal, the Partnership did not assume and is currently not aware of any pre-existing environmental obligations. If pre-acquisition environmental obligations are identified, Sunoco is responsible for any liabilities up to $2,000 identified to have occurred since 2002. For liabilities arising prior to 2002, Sunoco is indemnified by the prior owner under an agreement between Sunoco and the prior owner, and the Partnership is entitled to be reimbursed for all amounts paid related to such liabilities on a full pass-through basis.

In connection with the Knoxville Terminals Purchase, the Partnership did not assume, and is currently not aware of, any pre-existing environmental obligations. Additionally, the Partnership and Cummins purchased a ten-year, $30,000 environmental insurance policy against unknown environmental liabilities. For items not covered by the insurance policy, Cummins remains responsible for pre-acquisition environmental obligations up to $5,800.

In connection with the East Coast Storage Assets Acquisition, the Partnership assumed the pre-existing environmental obligations associated with the East Coast Storage Assets. The total estimated liability of known environmental obligations associated with the East Coast Storage Assets was $885 as of December 31, 2018. At December 31, 2018, the Partnership expects to make aggregate payments for this liability of $735 over the next five years. The current portion of the environmental liability is recorded in “Accounts payable and accrued liabilities” and the non-current portion is recorded in “Other long-term liabilities” within the Partnership’s consolidated balance sheets. Additionally, the Partnership and Crown Point purchased a ten-year, $30,000 environmental insurance policy with a retention of not less than $500 against unknown environmental liabilities.

Contingent Consideration

In connection with the East Coast Storage Assets Acquisition, the purchase agreement between Partnership and Crown Point included an earn-out provision related to an existing commercial agreement with a third party, based on the future results of restarting certain of the acquired idled assets. Pursuant to the agreement, the Partnership and Crown Point will share equally in the future operating profits of the restarted assets, as defined in the agreement, over a contractual term of up to three years starting in 2020. The Partnership recorded the acquisition date fair value of the earn-out provision as Contingent Consideration of $21,100 within “Other long-term liabilities” within the Partnership’s consolidated balance sheets. The Contingent Consideration of $21,100 recorded as of December 31, 2018 represents the present value of expected future payments discounted at a blended rate of 8.79%. At December 31, 2018, the estimated undiscounted liability totaled $27,978, based on the Partnership’s anticipated total annual earn-out payments.

12. RELATED PARTY TRANSACTIONS

Commercial Agreements

PBFX currently derives the majority of its revenue from long-term, fee-based agreements with PBF Holding, supported by MVCs as applicable and contractual fee escalations for inflation adjustments and certain increases in operating costs. PBFX 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 PBF Holding, are generally no less favorable to either party than those that could have been negotiated with unaffiliated parties with respect to similar services.

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

These commercial agreements (as defined in the table below) with PBF Holding include:



Agreements	Initiation Date	Initial Term	Renewals (a)	MVC	Force Majeure
Transportation and Terminaling
Amended and Restated Rail Agreements (b)	5/8/2014	7 years, 8 months	2 x 5	125,000 bpd	PBFX or PBF Holding can declare
Toledo Truck Unloading & Terminaling Services Agreement (g)	5/8/2014	7 years, 8 months	2 x 5	5,500 bpd
Toledo Storage Facility Storage and Terminaling Services Agreement- Terminaling Facility (g)	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 (c)	5/1/2016	Various (d)	Evergreen	15,000 bpd (e)
East Coast Terminals Tank Lease Agreements	5/1/2016	Various (d)	Evergreen	350,000 barrels (f)
Torrance Valley Pipeline Transportation Services Agreement- North Pipeline (g)	8/31/2016	10 years	2 x 5	50,000 bpd
Torrance Valley Pipeline Transportation Services Agreement- South Pipeline (g)	8/31/2016	10 years	2 x 5	70,000 bpd
Torrance Valley Pipeline Transportation Services Agreement- Midway Storage Tank (g)	8/31/2016	10 years	2 x 5	55,000 barrels (f)
Torrance Valley Pipeline Transportation Services Agreement- Emidio Storage Tank (g)	8/31/2016	10 years	2 x 5	900,000 barrels per month
Torrance Valley Pipeline Transportation Services Agreement- Belridge Storage Tank (g)	8/31/2016	10 years	2 x 5	770,000 barrels per month
Paulsboro Natural Gas Pipeline Services Agreement (g) (h)	8/4/2017	15 years	Evergreen	60,000 dekatherms per day
Knoxville Terminals Agreement- Terminaling Services	4/16/2018	5 years	Evergreen	Various (i)
Knoxville Terminals Agreement- Tank Lease (g)	4/16/2018	5 years	Evergreen	115,334 barrels (f)
Toledo Rail Loading Agreement (g)	7/31/2018	7 years, 5 months	2 x 5	Various (j)
Chalmette Terminal Throughput Agreement	7/31/2018	1 year	Evergreen	N/A
Chalmette Rail Unloading Agreement	7/31/2018	7 years, 5 months	2 x 5	7,600 bpd
DSL Ethanol Throughput Agreement (g)	7/31/2018	7 years, 5 months	2 x 5	5,000 bpd

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



Agreements	Initiation Date	Initial Term	Renewals (a)	MVC	Force Majeure
Storage
Toledo Storage Facility Storage and Terminaling Services Agreement- Storage Facility (g)	12/12/2014	10 years	2 x 5	3,849,271 barrels (f)	PBFX or PBF Holding can declare
Chalmette Storage Agreement (g)	See note (k)	10 years	2 x 5	625,000 barrels (f)	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.

(b)

The Amended and Restated Rail Agreements, as amended and effective as of January 1, 2018, include the Amended and Restated Delaware City Rail Terminaling Services Agreement and the Amended and Restated Delaware West Ladder Rack Terminaling Services Agreement each between Delaware City Terminaling Company LLC and PBF Holding 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. On February 13, the Partnership amended and restated the existing Amended and Restated Delaware City Rail Terminaling Services Agreement and entered into a new terminaling services agreement. Refer to Note 14 “Subsequent Events” of the Notes to Consolidated Financial Statements for further discussion.


(c)	Subsequent to the Toledo Products Terminal Acquisition, the Toledo Products Terminal was added to the East Coast Terminals Terminaling Services Agreements.


(d)	The East Coast Terminals related party agreements include varying initial term lengths, ranging from one to five years.


(e)	The East Coast Terminals Terminaling Services 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’s Paulsboro Refinery, with a 15,000 bpd MVC.


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


(g)	These commercial agreements with PBF Holding are considered leases.


(h)	In August 2017, the Paulsboro Natural Gas Pipeline commenced service. Concurrent with the commencement of operations, a new services agreement was entered into between PNGPC and PRC regarding the Paulsboro Natural Gas Pipeline.


(i)	The minimum throughput revenue commitment for the Knoxville Terminals Agreement- Terminaling Services is $894 for year one, $1,788 for year two and $2,683 for year three and thereafter.


(j)	Under the Toledo Rail Loading Agreement, PBF Holding has minimum throughput commitments for (i) 30 railcars per day of products and (ii) 11.5 railcars per day of premium products. The Toledo Rail Loading Agreement also specifies a maximum throughput rate of 50 railcars per day.


(k)	The Chalmette Storage Services Agreement was entered into on February 15, 2017 and commenced on November 1, 2017.

Omnibus Agreement

In addition to the commercial agreements described above, PBFX has entered into an omnibus agreement with PBF GP, PBF LLC and PBF Holding, which has been amended and restated in connection with certain of the Acquisitions from PBF for the provision of executive management services and support for accounting and finance, legal, human resources, information technology, environmental, health and safety, and other administrative

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

functions, as well as (i) PBF LLC’s agreement not to compete with the Partnership under certain circumstances, subject to certain exceptions, (ii) the Partnership’s right of first offer for ten years to acquire certain logistics assets retained by PBF Energy following PBFX’s IPO, including certain logistics assets that PBF LLC or its subsidiaries may construct or acquire in the future, subject to certain exceptions, and (iii) a license to use the PBF Logistics trademark and name.

On July 31, 2018, in connection with the Development Assets Acquisition, the Partnership entered into the Fifth Amended and Restated Omnibus Agreement (the “Omnibus Agreement”), with PBF GP, PBF LLC and PBF Holding, to update the provision of these executive management services and support for the Development Assets, which the Partnership expects to result in an increase of the estimated annual fee to $7,000.

Services Agreement

Additionally, PBFX has entered into an operation and management services and secondment agreement with PBF Holding and certain of its subsidiaries, pursuant to which PBF Holding and its subsidiaries provide PBFX with the personnel necessary for the Partnership 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 July 31, 2018, in connection with the Development Assets Acquisition, the Partnership entered into the Sixth Amended and Restated Operation and Management Services and Secondment Agreement with PBF Holdings and certain of its subsidiaries (the “Services Agreement”) to update the provision of these operation and management services for the Development Assets, resulting in an increase of the annual fee to $8,587. The Services Agreement will terminate upon the termination of the Omnibus Agreement, provided that the Partnership may terminate any service on 30-days’ notice.

Distributions

In connection with the Partnership’s quarterly distributions, the Partnership distributed $50,599 and $41,920 to PBF LLC for the years ended December 31, 2018 and 2017, respectively. During the year ended December 31, 2018 and 2017, TVPC distributed $20,250 and $21,544, respectively, to each of its members, which includes TVP Holding, a subsidiary of PBF Holding.

Summary of Transactions

A summary of revenue and expense transactions with the Partnership’s affiliates, including expenses directly charged and allocated to the Partnership, is as follows:



	Year Ended December 31,
	2018		2017		2016
Revenues	$	259,426	$	240,654	$	175,448
Operating and maintenance expenses	7,477		6,626		5,121
General and administrative expenses	7,468		6,899		4,805

13. SEGMENT INFORMATION

The Partnership’s operations are comprised of operating segments, which are strategic business units that offer different services in various geographical locations. PBFX has evaluated the performance of each operating segment based on its respective operating income. The operating segments adhere to the accounting polices used

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

for the consolidated financial statements, as described in Note 2 “Summary of Accounting Policies” of the Notes to Consolidated Financial Statements.

The Partnership’s operating segments are organized into two reportable segments, Transportation and Terminaling and Storage. Operations that are not included in either the Transportation and Terminaling or the Storage segments are included in Corporate.

The Partnership’s Transportation and Terminaling segment consists of operating segments that include product terminals, pipelines, crude unloading facilities and other facilities capable of transporting and handling crude oil, refined products and natural gas. The Partnership’s Storage segment consists of operating segments that include storage facilities capable of handling crude oil, refined products and intermediates.

Revenues are generated from third-party transactions as well as commercial agreements entered into with PBF Holding under which the Partnership receives fees for transportation, terminaling and storage of crude oil, refined products and natural gas. The commercial agreements with PBF Holding are described in Note 12 “Related Party Transactions” of the Notes to Consolidated Financial Statements. The Partnership does not have any foreign operations.

Certain general and administrative expenses and interest and financing costs are included in Corporate as they are not directly attributable to a specific reporting segment. Identifiable assets are those used by the operating segment, whereas assets included in Corporate are principally cash, deposits and other assets that are not associated with operations specific to a reporting segment.



	Year Ended December 31, 2018
	Transportation and Terminaling		Storage		Corporate			Consolidated Total
Total revenue	$	250,412	$	33,028	$	—		$	283,440
Depreciation and amortization expense	24,899		4,910		—			29,809
Income (loss) from operations	149,337		15,904		(21,371		)	143,870
Interest expense, net, amortization of loan fees and debt premium and accretion on discounted liabilities	—		—		43,033			43,033
Capital expenditures, including the Knoxville Terminals Purchase and the East Coast Storage Assets Acquisition	97,077		78,619		—			175,696



	Year Ended December 31, 2017
	Transportation and Terminaling		Storage		Corporate			Consolidated Total
Total revenue	$	234,338	$	23,250	$	—		$	257,588
Depreciation and amortization expense	21,650		2,754		—			24,404
Income (loss) from operations	146,803		12,860		(16,284		)	143,379
Interest expense, net and amortization of loan fees and debt premium	—		—		33,363			33,363
Capital expenditures, including the Toledo Products Terminal Acquisition	59,119		31,139		—			90,258

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



	Year Ended December 31, 2016
	Transportation and Terminaling		Storage		Corporate			Consolidated Total
Total revenue	$	167,195	$	21,811	$	—		$	189,006
Depreciation and amortization expense	12,978		2,428		—			15,406
Income (loss) from operations	111,512		10,695		(16,967		)	105,240
Interest expense, net and amortization of loan fees and debt premium	—		—		30,433			30,433
Capital expenditures, including the Plains Asset Purchase	121,187		2,759		—			123,946



	Balance at December 31, 2018
	Transportation and Terminaling		Storage		Corporate		Consolidated Total
Total assets	$	731,505	$	219,326	$	5,522	$	956,353



	Balance at December 31, 2017
	Transportation and Terminaling		Storage		Corporate		Consolidated Total
Total assets	$	649,975	$	86,760	$	11,480	$	748,215

14. SUBSEQUENT EVENTS

Cash distribution

On February 14, 2019, PBF GP’s board of directors announced a cash distribution, based on the results of the fourth quarter of 2018, of $0.5050 per unit. The distribution is payable on March 14, 2019 to PBFX unitholders of record at the close of business on March 1, 2019.

IDR Restructuring Agreement

On February 13, 2019, the Partnership entered into the IDR Restructuring Agreement with PBF LLC and PBF GP, pursuant to which the IDRs held by PBF LLC will be canceled and converted into 10,000,000 newly issued PBFX common units. The IDR Restructuring is expected to close on February 28, 2019. Subsequent to the closing of the IDR Restructuring, no distributions will be made to PBF LLC with respect to the IDRs and the newly issued PBFX common units will be entitled to normal distributions.

Rail Agreement Amendments

On February 13, 2019, the Partnership amended the existing Amended and Restated Delaware City Rail Terminaling Services Agreement (as amended, the “Amended and Restated Delaware City Rail Terminaling Services Agreement”) between Delaware City Terminaling Company LLC and PBF Holding for the inclusion of services through certain rail infrastructure at the East Coast Storage Assets (the “East Coast Rail Assets”). The Partnership also entered into a new Terminaling Services Agreement, between Delaware City Terminaling Company and PBF Holding, with a four year term starting in 2022 subsequent to the expiration of the Amended and Restated Delaware City Rail Terminaling Services Agreement, related to the DCR Rail Facility and the East Coast Rail Assets, which will reduce the MVC to 95,000 bpd and includes additional services to be provided by us as operator of facilities owned by PBF Holding’s subsidiaries.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

15. CONSOLIDATING FINANCIAL STATEMENTS OF PBF LOGISTICS

DCLC, DPC, Delaware City Terminaling, Toledo Terminaling, PLPT, PBFX Op Co, TVPC, PNGPC, TRLC, CLC, PTC and DSLC serve as guarantors of the obligations under the 2023 Notes. These guarantees are full and unconditional and joint and several. For purposes of the following footnote, the Partnership is referred to as “Issuer.” The Indenture governs subsidiaries designated as “Guarantor Subsidiaries.” In addition, PBF LLC provides a limited guarantee of collection of the principal amount of the 2023 Notes, but is not otherwise subject to the covenants of the Indenture. Refer to PBF LLC’s consolidated financial statements, which are included in its Annual Report on Form 10-K.

The 2023 Notes were co-issued by PBF Logistics Finance. For purposes of the following footnote, PBF Logistics Finance is referred to as “Co-Issuer.” The Co-Issuer has no independent assets or operations.

The following supplemental combining and consolidating financial information reflects the Issuer’s separate accounts, the combined accounts of the 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’ investment in its subsidiaries are accounted for under the equity method of accounting.

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

15. CONSOLIDATING FINANCIAL STATEMENTS OF PBF LOGISTICS

CONSOLIDATING BALANCE SHEET



	December 31, 2018
	Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	4,010	$	15,898	$	—	$	—		$	19,908
Accounts receivable - affiliates	9		37,043		—		—			37,052
Accounts receivable	365		7,146		—		—			7,511
Prepaids and other current assets	1,137		3,461		—		—			4,598
Due from related parties	161,613		561,605		—		(723,218		)	—
Total current assets	167,134		625,153		—		(723,218		)	69,069
Property, plant and equipment, net	—		862,117		—		—			862,117
Goodwill	—		6,332		—		—			6,332
Other non-current assets	—		18,835		—		—			18,835
Investment in subsidiaries	1,133,775		—		—		(1,133,775		)	—
Total assets	$	1,300,909	$	1,512,437	$	—	$	(1,856,993	)	$	956,353
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable - affiliates	$	1,239	$	10,808	$	—	$	—		$	12,047
Accounts payable and accrued liabilities	41,023		9,949		—		—			50,972
Deferred revenue	—		2,960		—		—			2,960
Due to related parties	561,605		161,613		—		(723,218		)	—
Total current liabilities	603,867		185,330		—		(723,218		)	65,979
Long-term debt	673,324		—		—		—			673,324
Other long-term liabilities	—		23,860		—		—			23,860
Total liabilities	1,277,191		209,190		—		(723,218		)	763,163

Commitments and contingencies (Note 11)

Equity:
Net investment - Predecessor	—		1,133,775		—		(1,133,775		)	—
Common unitholders	23,718		—		—		—			23,718
Total PBF Logistics LP equity	23,718		1,133,775		—		(1,133,775		)	23,718
Noncontrolling Interest	—		169,472		—		—			169,472
Total equity	23,718		1,303,247		—		(1,133,775		)	193,190
Total liabilities and equity	$	1,300,909	$	1,512,437	$	—	$	(1,856,993	)	$	956,353

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

15. CONSOLIDATING FINANCIAL STATEMENTS OF PBF LOGISTICS

CONSOLIDATING BALANCE SHEET



	December 31, 2017
	Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	10,909		$	8,755	$	—	$	—		$	19,664
Accounts receivable - affiliates	1			40,816		—		—			40,817
Accounts receivable	—			1,423		—		—			1,423
Prepaids and other current assets	571			1,222		—		—			1,793
Due from related parties	64,162			388,737		—		(452,899		)	—
Total current assets	75,643			440,953		—		(452,899		)	63,697
Property, plant and equipment, net	—			684,488		—		—			684,488
Other non-current assets	—			30		—		—			30
Investment in subsidiaries	866,922			—		—		(866,922		)	—
Total assets	$	942,565		$	1,125,471	$	—	$	(1,319,821	)	$	748,215
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable - affiliates	$	2,022		$	6,330	$	—	$	—		$	8,352
Accounts payable and accrued liabilities	7,156			12,638		—		—			19,794
Deferred revenue	—			1,438		—		—			1,438
Due to related parties	388,737			64,162		—		(452,899		)	—
Total current liabilities	397,915			84,568		—		(452,899		)	29,584
Long-term debt	548,793			—		—		—			548,793
Other long-term liabilities	—			2,078		—		—			2,078
Total liabilities	946,708			86,646		—		(452,899		)	580,455

Commitments and contingencies (Note 11)

Equity:
Net investment - Predecessor	10,665			866,922		—		(866,922		)	10,665
Common unitholders	(17,544		)	—		—		—			(17,544		)
IDR holder - PBF LLC	2,736			—		—		—			2,736
Total PBF Logistics LP equity	(4,143		)	866,922		—		(866,922		)	(4,143		)
Noncontrolling Interest	—			171,903		—		—			171,903
Total equity	(4,143		)	1,038,825		—		(866,922		)	167,760
Total liabilities and equity	$	942,565		$	1,125,471	$	—	$	(1,319,821	)	$	748,215

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PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

15. CONSOLIDATING FINANCIAL STATEMENTS OF PBF LOGISTICS

CONSOLIDATING STATEMENT OF OPERATIONS



	Year Ended December 31, 2018
	Issuer			Guarantors Subsidiaries			Non-Guarantors Subsidiaries		Combining and Consolidating Adjustments			Total
Revenue:
Affiliate	$	—		$	259,426		$	—	$	—		$	259,426
Third-party	—			24,014			—		—			24,014
Total revenue	—			283,440			—		—			283,440

Costs and expenses:
Operating and maintenance expenses	—			88,390			—		—			88,390
General and administrative expenses	21,371			—			—		—			21,371
Depreciation and amortization	—			29,809			—		—			29,809
Total costs and expenses	21,371			118,199			—		—			139,570

Income (loss) from operations	(21,371		)	165,241			—		—			143,870

Other income (expense):
Equity in earnings of subsidiaries	164,737			—			—		(164,737		)	—
Interest expense, net	(40,541		)	—			—		—			(40,541		)
Amortization of loan fees and debt premium	(1,717		)	—			—		—			(1,717		)
Accretion on discounted liabilities	(271		)	(504		)	—		—			(775		)
Net income	100,837			164,737			—		(164,737		)	100,837
Less: Net loss attributable to Predecessor	—			(2,443		)	—		—			(2,443		)
Less: Net income attributable to noncontrolling interest	—			17,819			—		—			17,819
Net income attributable to the partners	100,837			149,361			—		(164,737		)	85,461
Less: Net income attributable to the IDR holder	10,011			—			—		—			10,011
Net income attributable to PBF Logistics LP unitholders	$	90,826		$	149,361		$	—	$	(164,737	)	$	75,450

126

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

15. CONSOLIDATING FINANCIAL STATEMENTS OF PBF LOGISTICS

CONSOLIDATING STATEMENT OF OPERATIONS



	Year Ended December 31, 2017
	Issuer			Guarantors Subsidiaries			Non-Guarantors Subsidiaries		Combining and Consolidating Adjustments			Total
Revenue:
Affiliate	$	—		$	240,654		$	—	$	—		$	240,654
Third-party	—			16,934			—		—			16,934
Total revenue	—			257,588			—		—			257,588

Costs and expenses:
Operating and maintenance expenses	—			73,521			—		—			73,521
General and administrative expenses	16,284			—			—		—			16,284
Depreciation and amortization	—			24,404			—		—			24,404
Total costs and expenses	16,284			97,925			—		—			114,209

Income (loss) from operations	(16,284		)	159,663			—		—			143,379

Other income (expense):
Equity in earnings of subsidiaries	159,663			—			—		(159,663		)	—
Interest expense, net	(31,875		)	—			—		—			(31,875		)
Amortization of loan fees and debt premium	(1,488		)	—			—		—			(1,488		)
Net income	110,016			159,663			—		(159,663		)	110,016
Less: Net loss attributable to Predecessor	—			(4,986		)	—		—			(4,986		)
Less: Net income attributable to noncontrolling interest	—			14,565			—		—			14,565
Net income attributable to the partners	110,016			150,084			—		(159,663		)	100,437
Less: Net income attributable to the IDR holder	9,055			—			—		—			9,055
Net income attributable to PBF Logistics LP unitholders	$	100,961		$	150,084		$	—	$	(159,663	)	$	91,382

127

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

15. CONSOLIDATING FINANCIAL STATEMENTS OF PBF LOGISTICS

CONSOLIDATING STATEMENT OF OPERATIONS



	Year Ended December 31, 2016
	Issuer			Guarantors Subsidiaries			Non-Guarantors Subsidiaries		Combining and Consolidating Adjustments			Total
Revenue:
Affiliate	$	—		$	175,448		$	—	$	—		$	175,448
Third-party	—			13,558			—		—			13,558
Total revenue	—			189,006			—		—			189,006

Costs and expenses:
Operating and maintenance expenses	—			51,393			—		—			51,393
General and administrative expenses	16,609			358			—		—			16,967
Depreciation and amortization	—			15,406			—		—			15,406
Total costs and expenses	16,609			67,157			—		—			83,766

Income (loss) from operations	(16,609		)	121,849			—		—			105,240

Other income (expense):
Equity in earnings of subsidiaries	121,849			—			—		(121,849		)	—
Interest expense, net	(28,755		)	—			—		—			(28,755		)
Amortization of loan fees	(1,678		)	—			—		—			(1,678		)
Net income	74,807			121,849			—		(121,849		)	74,807
Less: Net loss attributable to Predecessor	—			(11,832		)	—		—			(11,832		)
Less: Net income attributable to noncontrolling interest	—			5,679			—		—			5,679
Net income attributable to the partners	74,807			128,002			—		(121,849		)	80,960
Less: Net income attributable to the IDR holder	4,031			—			—		—			4,031
Net income attributable to PBF Logistics LP unitholders	$	70,776		$	128,002		$	—	$	(121,849	)	$	76,929

128

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

15. CONSOLIDATING FINANCIAL STATEMENTS OF PBF LOGISTICS

CONSOLIDATING STATEMENT OF CASH FLOWS



	Year Ended December 31, 2018
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
Cash flows from operating activities:
Net income	$	100,837		$	164,737		$	—	$	(164,737	)	$	100,837
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization	—			29,809			—		—			29,809
Amortization of loan fees and debt premium	1,717			—			—		—			1,717
Accretion of discounted liabilities	271			504			—		—			775
Unit-based compensation expense	5,757			—			—		—			5,757
Equity in earnings of subsidiaries	(164,737		)	—			—		164,737			—
Changes in operating assets and liabilities:
Accounts receivable - affiliates	(8		)	3,773			—		—			3,765
Accounts receivable	(365		)	(5,723		)	—		—			(6,088		)
Prepaids and other current assets	(566		)	(113		)	—		—			(679		)
Accounts payable - affiliates	(783		)	530			—		—			(253		)
Accounts payable and accrued liabilities	1,351			(3,687		)	—		—			(2,336		)
Amounts due to/from related parties	75,417			(75,417		)	—		—			—
Deferred revenue	—			1,522			—		—			1,522
Other assets and liabilities	(1,114		)	(571		)	—		—			(1,685		)
Net cash provided by operating activities	17,777			115,364			—		—			133,141

Cash flows from investing activities:
Knoxville Terminals Purchase	—			(58,356		)	—		—			(58,356		)
East Coast Storage Assets Acquisition	—			(74,989		)	—		—			(74,989		)
Expenditures for property, plant and equipment	—			(42,351		)	—		—			(42,351		)
Investment in subsidiaries	(83,524		)	—			—		83,524			—
Net cash used in investing activities	(83,524		)	(175,696		)	—		83,524			(175,696		)

Cash flows from financing activities:
Net proceeds from issuance of common units	34,820			—			—		—			34,820
Distributions to unitholders	(98,786		)	—			—		—			(98,786		)
Distribution to TVPC members	—			(20,250		)	—		—			(20,250		)
Contribution from parent	—			87,725			—		(83,524		)	4,201
Proceeds from revolving credit facility	170,000			—			—		—			170,000
Repayment of revolving credit facility	(43,700		)	—			—		—			(43,700		)
Deferred financing costs	(3,486		)	—			—		—			(3,486		)
Net cash provided by financing activities	58,848			67,475			—		(83,524		)	42,799

Net change in cash and cash equivalents	(6,899		)	7,143			—		—			244
Cash and equivalents, beginning of period	10,909			8,755			—		—			19,664
Cash and equivalents, end of period	$	4,010		$	15,898		$	—	$	—		$	19,908

129

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

15. CONSOLIDATING FINANCIAL STATEMENTS OF PBF LOGISTICS

CONSOLIDATING STATEMENT OF CASH FLOWS



	Year Ended December 31, 2017
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
Cash flows from operating activities:
Net income	$	110,016		$	159,663		$	—	$	(159,663	)	$	110,016
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization	—			24,404			—		—			24,404
Amortization of loan fees and debt premium	1,488			—			—		—			1,488
Unit-based compensation expense	5,345			—			—		—			5,345
Equity in earnings of subsidiaries	(159,663		)	—			—		159,663			—
Changes in operating assets and liabilities:
Accounts receivable - affiliates	124			(4,078		)	—		—			(3,954		)
Accounts receivable	—			2,871			—		—			2,871
Prepaids and other current assets	(265		)	226			—		—			(39		)
Accounts payable - affiliates	352			369			—		—			721
Accounts payable and accrued liabilities	311			(2,397		)	—		—			(2,086		)
Amounts due to/from related parties	82,873			(82,873		)	—		—			—
Deferred revenue	—			486			—		—			486
Other assets and liabilities	(957		)	(113		)	—		—			(1,070		)
Net cash provided by operating activities	39,624			98,558			—		—			138,182

Cash flows from investing activities:
Toledo Products Terminal Acquisition	—			(10,097		)	—		—			(10,097		)
Expenditures for property, plant and equipment	—			(80,161		)	—		—			(80,161		)
Purchases of marketable securities	(75,036		)	—			—		—			(75,036		)
Maturities of marketable securities	115,060			—			—		—			115,060
Investment in subsidiaries	(11,072		)	—			—		11,072			—
Net cash provided by (used in) investing activities	28,952			(90,258		)	—		11,072			(50,234		)

Cash flows from financing activities:
Distributions to unitholders	(85,430		)	—			—		—			(85,430		)
Distribution to TVPC members	—			(21,544		)	—		—			(21,544		)
Contribution from parent	—			21,511			—		(11,072		)	10,439
Proceeds from issuance of senior notes	178,500			—			—		—			178,500
Repayment of term loan	(39,664		)	—			—		—			(39,664		)
Proceeds from revolving credit facility	20,000			—			—		—			20,000
Repayment of revolving credit facility	(179,500		)	—			—		—			(179,500		)
Repayment of Affiliate Note Payable	—			(11,600		)	—		—			(11,600		)
Deferred financing costs	(3,706		)	—			—		—			(3,706		)
Net cash used in financing activities	(109,800		)	(11,633		)	—		(11,072		)	(132,505		)

Net change in cash and cash equivalents	(41,224		)	(3,333		)	—		—			(44,557		)
Cash and equivalents, beginning of period	52,133			12,088			—		—			64,221
Cash and equivalents, end of period	$	10,909		$	8,755		$	—	$	—		$	19,664

130

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

15. CONSOLIDATING FINANCIAL STATEMENTS OF PBF LOGISTICS

CONSOLIDATING STATEMENT OF CASH FLOWS



	Year Ended December 31, 2016
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
Cash flows from operating activities:
Net income	$	74,807		$	121,849		$	—	$	(121,849	)	$	74,807
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization	—			15,406			—		—			15,406
Amortization of loan fees	1,678			—			—		—			1,678
Unit-based compensation expense	4,360			—			—		—			4,360
Equity in earnings of subsidiaries	(121,849		)	—			—		121,849			—
Changes in operating assets and liabilities:
Accounts receivable - affiliates	(125		)	(12,314		)	—		—			(12,439		)
Accounts receivable	—			(4,294		)	—		—			(4,294		)
Prepaids and other current assets	(71		)	3,223			—		—			3,152
Accounts payable - affiliates	1,096			2,417			—		—			3,513
Accounts payable and accrued liabilities	(211		)	8,131			—		—			7,920
Amounts due to/from related parties	115,616			(115,616		)	—		—			—
Deferred revenue	—			952			—		—			952
Other assets and liabilities	(672		)	(330		)	—		—			(1,002		)
Net cash provided by operating activities	74,629			19,424			—		—			94,053

Cash flows from investing activities:
Plains Asset Purchase	(98,373		)	—			—		—			(98,373		)
Expenditures for property, plant and equipment	—			(25,573		)	—		—			(25,573		)
Purchases of marketable securities	(1,909,965		)	—			—		—			(1,909,965		)
Maturities of marketable securities	2,104,209			—			—		—			2,104,209
Investment in subsidiaries	(3,053		)	—			—		3,053			—
Net cash provided by (used in) investing activities	92,818			(25,573		)	—		3,053			70,298

Cash flows from financing activities:
Proceeds from issuance of common units	138,378			—			—		—			138,378
Distribution to PBF LLC related to Acquisitions from PBF	(175,000		)	—			—		—			(175,000		)
Distributions to unitholders	(67,534		)	—			—		—			(67,534		)
Contribution from parent	—			18,237			—		(3,053		)	15,184
Repayment of term loan	(194,536		)	—			—		—			(194,536		)
Proceeds from revolving credit facility	194,700			—			—		—			194,700
Repayment of revolving credit facility	(30,000		)	—			—		—			(30,000		)
Net cash (used in) provided by financing activities	(133,992		)	18,237			—		(3,053		)	(118,808		)

Net change in cash and cash equivalents	33,455			12,088			—		—			45,543
Cash and equivalents, beginning of period	18,678			—			—		—			18,678
Cash and equivalents, end of period	$	52,133		$	12,088		$	—	$	—		$	64,221

131

PBF LOGISTICS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

16. QUARTERLY FINANCIAL DATA (UNAUDITED)

The following table summarizes quarterly financial data for the years ended December 31, 2018 and 2017 (in thousands, except per unit amounts).



	2018 Quarter Ended
	March 31		June 30		September 30		December 31
Total revenue	$	64,740	$	68,099	$	70,556	$	80,045
Income from operations	33,926		33,796		37,577		38,571
Net income	23,978		23,371		27,010		26,478
Net income attributable to PBF Logistics LP unitholders	18,280		16,677		18,724		21,769
Net income per limited partner unit:
Common - basic	$	0.43	$	0.39	$	0.42	$	0.48
Common - diluted	$	0.43	$	0.39	$	0.42	$	0.48



	2017 Quarter Ended
	March 31		June 30		September 30		December 31
Total revenue	$	61,164	$	63,016	$	66,195	$	67,213
Income from operations	34,697		33,867		39,201		35,614
Net income	26,713		25,981		31,453		25,869
Net income attributable to PBF Logistics LP unitholders	22,922		21,204		26,347		20,909
Net income per limited partner unit:
Common - basic	$	0.55	$	0.49	$	0.63	$	0.50
Common - diluted	$	0.55	$	0.49	$	0.63	$	0.50
Subordinated units - basic and diluted	$	0.55	$	0.52	$	—	$	—

132

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

We maintain a system of disclosure controls and procedures that is designed to provide reasonable assurance that information which is required to be disclosed is accumulated and communicated to management in a timely manner. Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we have evaluated the effectiveness of our system of disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of December 31, 2018. Based on that evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective at the reasonable assurance level.

Internal Control Over Financial Reporting and Changes in Internal Control Over Financial Reporting

The SEC, as required by Section 404 of the Sarbanes-Oxley Act, adopted rules generally requiring every public company that files reports with the SEC to include a management report on such company’s internal control over financial reporting in its annual report. In addition, such company’s independent registered public accounting firm must attest to its internal control over financial reporting. However, pursuant to the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 for up to five years or through such earlier date that we are no longer an emerging growth company as defined in the JOBS Act.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act. Our internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the U.S. Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2018, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework (2013 framework). Based on such assessment, management concluded that as of December 31, 2018, our internal control over financial reporting is effective.

On April 16, 2018, our wholly-owned subsidiary, PLPT, completed the Knoxville Terminals Purchase, which consisted of the Knoxville Terminals. On October 1, 2018, we completed the East Coast Storage Assets Acquisition, which consisted of the East Coast Storage Assets. We are in the process of integrating the Knoxville Terminals’ and the East Coast Storage Assets’ operations, including internal control over financial reporting. There have been no other changes in our internal control over financial reporting during the quarter-ended December 31, 2018 that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. OTHER INFORMATION

None.

133

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Management of PBF Logistics LP

We are managed by the directors and executive officers of our general partner, PBF GP, which is a wholly-owned subsidiary of PBF LLC. PBF LLC is, in turn, a subsidiary of PBF Energy. Our general partner is not elected by our unitholders and will not be subject to re-election by our unitholders in the future. Our general partner has a board of directors. The initial directors were appointed by PBF Energy and thereafter were appointed by the directors then in office. Our unitholders are not entitled to elect the directors of PBF GP, directly or indirectly, or to participate in our management or operations.

Certain of our general partner’s affiliates’ employees are seconded to us pursuant to the Services Agreement. These seconded employees provide operating, routine maintenance and other services with respect to the assets owned and operated by us under our direction, supervision and control pursuant to the Services Agreement. We sometimes refer to these individuals in this Form 10-K as our employees because they provide services to us directly.

Director Independence

Although most companies listed on the NYSE are required to have a majority of independent directors serving on the board of directors of the listed company, the NYSE does not require a publicly traded limited partnership like us to have a majority of independent directors on the board of directors of our general partner or to establish a compensation or a nominating and corporate governance committee. We are, however, required to have an audit committee of at least three members, and all of our audit committee members are required to meet the independence and financial literacy tests established by the NYSE and the Exchange Act. The board of directors of our general partner has determined that Bruce A. Jones, David Roush and Karen Davis are independent under applicable SEC rules and regulations and the rules of the NYSE. Under the NYSE’s listing standards, a director will not be deemed independent unless the board of directors of our general partner affirmatively determines that the director has no material relationship with us. Based upon information requested from and provided by each director concerning his background, employment and affiliations, including commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, the Board has determined that each of Messrs. Jones and Roush and Ms. Davis has no material relationship with us or PBF Energy, either directly or as a partner, stockholder or officer of an organization that has a relationship with us or PBF Energy, and each of them is therefore independent under the NYSE’s listing standards and applicable SEC rules and regulations.

Director Experience and Qualifications

The board of directors of the general partner as a whole is responsible for filling vacancies on the board of directors at any time during the year, and for selecting individuals to serve on the board of directors of our general partner. From time to time, the board of directors may utilize the services of search firms or consultants to assist in identifying and screening potential candidates.

Committees of the Board of Directors

The board of directors of our general partner has two standing committees, an audit committee and a conflicts committee, and may have such other committees as the board of directors of our general partner shall determine from time to time.

Each of the standing committees of the board of directors of our general partner has the composition and responsibilities described below. The standing audit committee has a written charter that may be found on our

134

website at www.pbflogistics.com. In addition, paper copies of the charter are available free of charge to all unitholders by written request to the Secretary, PBF Logistics LP, One Sylvan Way, Second Floor, Parsippany, New Jersey 07054. The audit committee reviews the adequacy of its charter on an annual basis, in addition to evaluating its performance and reporting to the board on such evaluation. All of the members of the standing committees are independent and outside directors as defined by the rules and regulations of the NYSE, the SEC, the IRS and our corporate guidelines, as applicable.

Audit Committee

The audit committee of the board of directors of our general partner assists the board of directors of our general partner in its oversight of the integrity of our financial statements and our compliance with legal and regulatory requirements and corporate policies and controls. The audit committee has the sole authority to retain and terminate our independent registered public accounting firm, approve all auditing services and related fees and the terms thereof and pre-approve any non-audit services to be rendered by our independent registered public accounting firm. The audit committee also is responsible for confirming the independence and objectivity of our independent registered public accounting firm. Our independent registered public accounting firm is given unrestricted access to the audit committee. The board of directors of our general partner has determined that each of Bruce A. Jones, David Roush and Karen Davis meet the requirements to serve on the audit committee and our audit committee is therefore comprised of the following independent directors: Bruce A. Jones, David Roush and Karen Davis. Mr. Roush serves as the Chairman of the audit committee and as an “audit committee financial expert.”

Conflicts Committee

At least three members of the board of directors of our general partner serve on the conflicts committee to review specific matters that may involve conflicts of interest in accordance with the terms of our partnership agreement. The conflicts committee determines if the resolution of the conflict of interest is fair and reasonable to us. The members of the conflicts committee are not officers or employees of our general partner or directors, officers or employees of its affiliates, and meet the independence and experience standards established by the NYSE and the Exchange Act to serve on an audit committee of a board of directors. In addition, the members of our conflicts committee may not own any interest in our general partner or its affiliates or any interest in us or our subsidiaries other than common units or awards under our incentive compensation plan. Any matters approved by the conflicts committee in good faith will be deemed to be approved by all of our partners and not a breach by our general partner of any duties it may owe us or our unitholders. The board of directors of our general partner has determined that each of Bruce A. Jones, David Roush and Karen Davis meet the requirements to serve on the conflicts committee and the conflicts committee is therefore comprised of the following independent directors: Bruce A. Jones, David Roush and Karen Davis. Mr. Roush serves as the Chairman of the conflicts committee.

Meetings of the Board of Directors

During the last fiscal year, the board of directors of our general partner had eight meetings, while the audit committee had five meetings and the conflicts committee had eighteen meetings. All directors have access to members of management and a substantial amount of information transfer and informal communication occurs between meetings. None of the directors attended fewer than 75% of the aggregate number of meetings of the board of directors and committees of the board of directors of our general partner on which the director served. Under our corporate governance guidelines, executive sessions of the non-management directors are held periodically as part of the routine activities and deliberation of the board of directors. The non-management directors determine among themselves who shall preside at such meetings. The non-management directors may request that certain employees and executive officers of our general partner and/or PBF Energy and other advisers and consultants to make presentations or participate in discussions at such meetings. To the extent this group of non-management directors does not also meet the independence standards of the NYSE, the directors who do meet such independence requirements shall also meet in executive sessions at least once a year.

135

Directors and Executive Officers of PBF Logistics GP, LLC

The following table shows information for the executive officers and directors of our general partner as of February 21, 2019. Directors are elected by the board members of our general partner and are appointed for a one-year term and hold office until their successors have been elected or qualified or until the earlier of their death, resignation, retirement, removal or disqualification. Executive officers are appointed by, and serve at the discretion of, the board of directors of our general partner. Some of our directors and all of our executive officers also serve as executive officers of PBF Energy.



	Age
Name	(as of December 31, 2018)	Position with PBF Logistics GP, LLC
Thomas J. Nimbley	67	Chief Executive Officer and Chairman of the Board of Directors
Matthew C. Lucey	45	Executive Vice President and Director
Trecia Canty	49	Senior Vice President, General Counsel and Secretary
C. Erik Young	41	Senior Vice President, Chief Financial Officer and Director
Timothy Paul Davis	56	Assistant Secretary
Michael D. Gayda	64	Director
Bruce A. Jones	65	Director
David Roush	65	Director
Karen B. Davis	62	Director

Thomas J. Nimbley was appointed Chairman of the Board of Directors of our general partner in July 2016 and serves as the Chief Executive Officer. Mr. Nimbley has served as the Chief Executive Officer of PBF Energy and its subsidiaries since June 2010 and was the Executive Vice President, Chief Operating Officer of PBF Energy from March 2010 through June 2010. Prior to joining PBF Energy, Mr. Nimbley served as a Principal for Nimbley Consultants LLC from June 2005 to March 2010, where he provided consulting services and assisted on the acquisition of two refineries. He previously served as Senior Vice President and head of Refining for Phillips Petroleum Company (“Phillips”) and subsequently Senior Vice President and head of Refining for ConocoPhillips (“ConocoPhillips”) domestic refining system (13 locations) following the merger of Phillips and Conoco Inc. Before joining Phillips at the time of its acquisition of Tosco Corporation (“Tosco”) in September 2001, Mr. Nimbley served in various positions with Tosco and its subsidiaries starting in April 1993.

Matthew C. Lucey was appointed a Director of our general partner in 2013 and has served as our Executive Vice President since April 2014. Prior to that, from 2013, he served as Senior Vice President, Chief Financial Officer of our general partner. Mr. Lucey has served as the President of PBF Energy since January 2015. From April 2014 to January 2015, Mr. Lucey served as Executive Vice President of PBF Energy. Mr. Lucey joined PBF Energy as Vice President, Finance in April 2008 and served as Senior Vice President, Chief Financial Officer of PBF Energy from April 2010 until his promotion in March 2014. Prior thereto, Mr. Lucey served as a Managing Director of M.E. Zukerman & Co., a New York-based private equity firm specializing in several sectors of the broader energy industry, from 2001 to 2008. Before joining M.E. Zukerman & Co., Mr. Lucey spent six years in the banking industry.

Trecia Canty was appointed Senior Vice President and General Counsel of our general partner in September 2015. Ms. Canty joined PBF Energy in November 2012 and has led the Company’s commercial and finance legal operations. Effective October 2014, she served as our Vice President, Senior Deputy General Counsel and Assistant Secretary. Prior to joining the Company, Ms. Canty served as Associate General Counsel, Corporate and Assistant Secretary of Southwestern Energy Company, where her responsibilities included finance and mergers and

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acquisitions, securities and corporate compliance and corporate governance. She also provided legal support to the midstream marketing and logistics businesses. Prior to joining Southwestern Energy Company in 2004, she was an associate with Cleary, Gottlieb, Steen & Hamilton. Ms. Canty has over 20 years of experience focused on energy, mergers and acquisition, securities, finance and corporate matters.

C. Erik Young was appointed a Director of our general partner in October 2016 and serves as the Senior Vice President and Chief Financial Officer. Mr. Young has served as the Senior Vice President and Chief Financial Officer of our general partner and of PBF Energy effective April 1, 2014. Mr. Young previously served as Director, Strategic Planning at PBF Energy since December 2010, where he was responsible for both corporate development and capital markets initiatives for PBF Energy. Prior to joining the Company, Mr. Young spent 11 years in corporate finance, strategic planning and mergers and acquisitions roles across a variety of industries. He began his career in investment banking before joining J.F. Lehman & Company, a private equity investment firm, in 2001.

Timothy Paul Davis was appointed Assistant Secretary of a subsidiary of our general partner and President, PBF Energy Western Region LLC in September 2017. Mr. Davis joined PBF Energy in April of 2012 and served as head of its commercial operations related to crude oil and refinery feedstock sourcing from May of 2013 to January 2015 and, from January 2015 to September 2015, served as its Co-Head of Commercial and served as Senior Vice President, Western Region Commercial Operations from September 2015 to September 2017. Previously, Mr. Davis was responsible for managing the U.S. clean products commercial operations for Hess Energy Trading Company from 2006 to 2012. Prior to that, Mr. Davis was responsible for Premcor Inc.’s (“Premcor”) U.S. Midwest clean products disposition group. Mr. Davis has over 30 years of experience in commercial operations in crude oil and refined products, including 16 years with the ExxonMobil Corporation in various operational and commercial positions, including sourcing refinery feedstocks and crude oil and the disposition of refined petroleum products, as well as optimization roles within refineries.

Michael D. Gayda was appointed a Director of our general partner in 2013. Mr. Gayda previously also served as President of our general partner and of PBF Energy until his retirement in January 2015. Since February 2015, Mr. Gayda has served as a consultant and arbiter on U.S. and international energy matters. Mr. Gayda joined PBF Energy as Executive Vice President, General Counsel and Secretary in April 2010 and served as its President from June 2010 until his retirement in 2015 and was a director from inception until October 2009. Prior thereto, from May 2006 until January 2010 Mr. Gayda served as Executive Vice President, General Counsel and Secretary of Petroplus. Prior to Petroplus, he served as an executive officer of Premcor until its sale to Valero in August 2005 and as General Counsel-Refining for Phillips 66 Company, a division of Phillips, following Phillips’ acquisition of Tosco in September 2001. Mr. Gayda previously served as a Vice President of certain of Tosco’s subsidiaries.

Bruce A. Jones was appointed an independent Director of our general partner in April 2014 and serves on the Audit and Conflicts Committees. Mr. Jones has over 30 years of experience in energy related industries, including 19 years in refining and distribution. From May 2006 until February 2010, Mr. Jones served as Executive Vice President, Chief Operating Officer of Petroplus during its acquisitions of five European refineries. Mr. Jones retired in February 2010. Prior to Petroplus, he served as Vice President Environmental Health and Safety for Premcor until its sale to Valero in August 2005. Mr. Jones previously held various positions with Phillips, Tosco, Exxon Corporation and Public Service Electric and Gas Company. Mr. Jones has extensive experience in the energy industry, including refining and distribution operations with a strong basis in safe and environmentally compliant operations, and, for these reasons, he is a valuable member of the board of directors of our general partner.

David Roush was appointed an independent Director of our general partner in April 2014 and serves on the Audit and Conflicts Committees. Mr. Roush is a licensed CPA and an experienced entrepreneur and financial expert. Mr. Roush is a founder and principal of JDP Holdings, Inc. (“JDP Holdings”), an investment company which acquires and develops technology companies. He founded JDP Holdings in the early part of 2010. Prior to that, Mr. Roush founded Insurance.com, a leading, web-based, auto insurance agency, in 2000 and worked as its Chairman and Chief Executive Officer until February 2009. Mr. Roush has also held various positions at Progressive Insurance and worked as an internal auditor for the Bendix/Allied Signal Corporation. Mr. Roush has over 40 years

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of accounting and management experience and is a licensed CPA, and, for these reasons, he is a valuable member of the board of directors of our general partner.

Karen B. Davis was appointed an independent Director of our general partner in December 2017 and serves on the Audit and Conflicts Committees. Ms. Davis most recently served as the Executive Vice President and Chief Financial Officer of both Western Refining Inc. (“Western”) and the general partner of Western Refining Logistics LP from August 2016 to May 2017. Prior to that, she served as the Executive Vice President and Chief Financial Officer of Western’s affiliate, the general partner of Northern Tier Energy LP from February 2015 to August 2016. Ms. Davis also served as the Chief Financial Officer of the general partner of Western Refining Logistics and the Vice President-Director of Investor Relations of Western from December 2014 to February 2015. Previously, Ms. Davis served as the Chief Accounting Officer of PBF Energy Inc. from February 2011 to November 2014, and of PBF Logistics GP LLC, the general partner of PBF Logistics LP, from its inception in February 2013 until November 2014. During her career, Ms. Davis has served in other executive accounting and finance positions with various public and private companies throughout the United States. Ms. Davis’s extensive experience in the energy industry as a finance executive establishes her as a valuable member of the board of directors of our general partner.

Board of Directors Leadership Structure

The board of directors of our general partner has no policy with respect to the separation of the offices of chairman of the board and chief executive officer; rather, that relationship is defined and governed by the limited liability company agreement of our general partner, which permits the same person to hold both offices.

Board of Directors Role in Risk Oversight

Our corporate governance guidelines provide that the board of directors of our general partner is responsible for assessing the major risks facing us and the options for their mitigation. Specifically, pursuant to its charter, the audit committee is responsible for reviewing and discussing with management the guidance and policies governing the process by which risk assessment and management is undertaken.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires our general partner’s officers and directors and persons who beneficially own more than 10% of our common units to file reports of securities ownership and changes in such ownership with the SEC. Officers, directors and greater than 10% beneficial owners are also required by rules promulgated by the SEC to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of the Forms 3 and 4, including any amendments, filed with the SEC in 2018 (no Forms 5, or any amendments, were filed with respect to 2018), all required report filings by our (or our general partner’s) directors and executive officers and greater than 10% affiliated beneficial owners were timely made.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to all directors, officers and employees as well as a Code of Ethics for the Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer. These codes are posted on our website at www.pbflogistics.com under “Corporate Governance” in the “Investor Relations” section. In addition, paper copies of these codes are available to all unitholders free of charge by written request to the Secretary, PBF Logistics LP, One Sylvan Way, Second Floor, Parsippany, New Jersey 07054. We will, within the time periods proscribed by the SEC and the NYSE, timely post on our website at www.pbflogistics.com any amendments to these codes and any waiver applicable to any of the Chief Executive Officer, Chief Financial Officer or Principal Accounting Officer.

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Communications with PBF Logistics GP Board of Directors by Unitholders and Other Interested Parties

Unitholders and other interested parties may send communications to the board of directors of our general partner or any committee thereof, the Chairman of the Board or any other director in care of the Secretary of PBF Logistics LP, One Sylvan Way, Second Floor, Parsippany, New Jersey 07054 and should clearly mark the envelope as “Unitholder Communications with Directors” and clearly identify the intended recipient(s). The General Counsel of our general partner will review each communication received and will forward the communication, as expeditiously as reasonably practicable, to the addressees if: (1) the communication complies with the requirements of any applicable policy adopted by the board of directors relating to the subject matter of the communication; and (2) the communication falls within the scope of matters generally considered by the board of directors. To the extent the subject matter of a communication relates to matters that have been delegated by the board of directors to a committee or to an executive officer of our general partner, then the General Counsel may forward the communication to the executive officer or chairman of the committee to which the matter has been delegated. The acceptance and forwarding of communications to the directors or an executive officer does not imply or create any fiduciary duty of the directors or executive officer to the person submitting the communications.

Item 11. EXECUTIVE COMPENSATION

Neither we nor our general partner directly employs any of the persons responsible for managing our business. All of our general partner’s executive officers and other management personnel necessary for our business to function are employees of subsidiaries of PBF Energy.

Named Executive Officers

This Compensation Discussion and Analysis (“CD&A”) discusses the principles underlying our general partner’s compensation programs and the key executive compensation decisions that were made for 2018. It also explains the most important factors relevant to such decisions. This CD&A provides context and background for the compensation earned and awarded to our named executive officers (“NEOs”), as reflected in the compensation tables that follow the CD&A. Our NEOs for 2018 were as follows:


•	Thomas J. Nimbley, Chief Executive Officer and Chairman of the Board of Directors


•	C. Erik Young, Senior Vice President, Chief Financial Officer and Director


•	Matthew C. Lucey, Executive Vice President and Director


•	Trecia Canty, Senior Vice President and General Counsel


•	Timothy Paul Davis, Assistant Secretary

Overview - Compensation Decisions and Allocation of Compensation Expenses

The board of directors of our general partner does not have a compensation committee. The board of directors of our general partner does not feel that a compensation committee is necessary at this time, primarily because neither our general partner nor the Partnership has a significant amount of direct employees or executive officers to compensate. However, the board of directors believes it is important to promote the interests of the Partnership and the general partner by providing to employees of the Partnership’s affiliates and others who perform services for us or on our behalf incentive compensation awards for their service. Accordingly, pursuant to our partnership agreement, the general partner is allowed to and has adopted the PBF Logistics LP Long-Term Incentive Plan (“Long-Term Incentive Plan” or “LTIP”). Due to the fact that several of the members of the board of directors of the general partner perform services on our behalf in their roles as executive officers of PBF Energy, the LTIP is fully administered by the disinterested members of the board of directors. The disinterested members of the board of directors may also delegate to an executive officer of the general partner the authority to issue awards to employees other than Section 16 officers of the general partner.

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Under the terms of the Omnibus Agreement, we pay an annual administrative fee of $5.0 million per year to PBF Energy for the provision of general and administrative services. The general and administrative services covered by the annual administrative fee include, without limitation, executive management services of PBF Energy employees who devote less than 50% of their time to our business, financial and administrative services, information technology services, legal services, health, safety and environmental services, human resources services and insurance administration. No service covered by the administrative fee is assigned any particular value individually. Additionally, the Omnibus Agreement requires us to reimburse PBF Energy directly for a proportionate amount of the salary and employee benefits costs of PBF Energy employees who devote more than 50% of their time to our business and affairs, which is currently estimated to be approximately $2.0 million annually.

Although our NEOs provide services to both PBF Energy and us, no portion of the administrative fee is specifically allocated to services provided by our NEOs to us. Instead, the administrative fee covers all centralized services provided to us by PBF Energy, and we have not reimbursed PBF Energy for the cost of such services. Except for awards under the LTIP, which were approved by the independent directors of the board of directors of our general partner, PBF Energy had the ultimate decision-making authority with respect to the compensation of our NEOs.

Compensation Objectives and Philosophy

Overview

Our 2018 NEO compensation framework was designed to reward our NEOs for their efforts with respect to our acquisitions, provide retention incentives for our NEOs, and motivate our NEOs to increase the value of our units. Our compensation program is intended to:

•motivate and retain our general partner’s key executives;

•align the long-term economic interests of our general partner’s executives with those of our unitholders; and

•reward excellence and performance by our general partner’s executives that increases the value of our units.

These objectives govern the disinterested directors’ decisions with respect to the amount of awards made under the LTIP to our NEOs.

At present, our executive compensation program consists of a single element: long-term incentives in the form of awards under the LTIP. Our general partner did not engage a compensation consultant in 2018. Because neither we nor our general partner employ any of our NEOs and because our NEOs are compensated by PBF Energy to manage our business and affairs, we do not provide traditional fixed or discretionary compensation (e.g., salary and bonus) to our NEOs.

2014 Long-Term Incentive Plan

Awards may be made under the LTIP to officers, directors and employees of subsidiaries of PBF Energy, our general partner or its affiliates, as well as any consultants or other individuals who perform services for us. In recognition of strong performance of our assets and the successful completion of our recent acquisitions and organic growth projects, the Compensation Committee of PBF Energy and the board of directors of our general partner approved grants under the LTIP to our NEOs. Each of our NEOs received a grant of phantom units that vests over a four year period, subject to certain accelerated vesting rights. These phantom units are accompanied by distribution equivalent rights (“DERs”) that provide for a lump sum amount paid in cash on the vesting date that is equal to the accrued distributions from the grant date of the phantom units through the vesting date. Phantom units motivate our NEOs to attain our long term goals and support our overall business priorities as well as aligning our NEOs interests with those of our unitholders. The initial equity grants provided our NEOs with an immediate stake in

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our performance and were intended to immediately align the interests of our NEOs and our unitholders by providing a direct incentive for our NEOs to focus on unitholder value. The LTIP is now administered by the disinterested directors on the board of directors of our general partner.

Upon a “change in control” (as defined in the LTIP), the disinterested directors may, in their discretion, (i) remove any forfeiture restrictions applicable to an award, (ii) accelerate the time of exercisability or vesting of an award, (iii) require awards to be surrendered in exchange for a cash payment, (iv) cancel unvested awards without payment or (v) make adjustments to awards as the directors deems appropriate to reflect the change of control. Unless determined otherwise by the directors or provided for otherwise in an award agreement, upon involuntary termination of employment or service of a participant within twenty-four (24) months of a change in control, all of the participant’s awards that have not at such time become vested or otherwise remain subject to lapse restrictions shall immediately become vested or no longer subject to lapse restrictions, as applicable. By providing the potential for immediate value to our NEOs in connection with a change in control, this provision aligns our NEOs’ interests with those of our unitholders and incentivizes our NEOs to work to maximize the value of our units in the event such a transaction were to occur. For additional detail regarding the amount of compensation our NEOs may be entitled to in the event of their termination or a change-in-control, see “Potential Payments Upon Termination or Change of Control.”

Compensation Consultants

The board of directors of our general partner does not have a compensation committee, and it did not retain a compensation consultant in 2018.

Perquisites

Our general partner does not provide any fringe benefits or perquisites to our NEOs.

Prohibition Against Speculative Transactions

We maintain in a policy that applies to all executive officers and directors of our general partner prohibiting speculative transactions in our units such as short sales, puts, calls or other similar options to buy or sell our units in an effort to hedge certain economic risks or otherwise.

Guidelines for Trades by Insiders

We maintain policies that govern trading in our units by officers and directors required to report under Section 16 of the Exchange Act, as well as certain other employees who may have regular access to material non-public information about us. These policies include pre-approval requirements for all trades and periodic trading “black-out” periods designed with reference to our quarterly financial reporting schedule. We also require pre-approval of all trading plans adopted pursuant to Rule 10b5-1 promulgated under the Exchange Act. To mitigate the potential for abuse, no trades are allowed under a trading plan within 30 days after adoption. In addition, we discourage termination or amendment of trading plans by prohibiting trades under new or amended plans within 90 days following a plan termination or amendment.

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2018 Summary Compensation Table

The Summary Compensation Table summarizes the total compensation paid or earned by each of our NEOs.



Name and Principal Position	Fiscal Year	Salary	Bonus	Unit Awards	Option Award	All Other Compensation	Total
Name and Principal Position	Fiscal Year	($) (1)	($) (1)	($) (2)	($) (1)	($) (1)	($)
Thomas J. Nimbley, Chief Executive Officer and Chairman of the Board of Directors	2018	—	—	398,000	—	—	398,000
	2017	—	—	420,000	—	—	420,000
	2016	—	—	297,000	—	—	297,000
C. Erik Young, Senior Vice President, Chief Financial Officer and Director	2018	—	—	248,750	—	—	248,750
	2017	—	—	262,500	—	—	262,500
	2016	—	—	247,500	—	—	247,500
Matthew C. Lucey, Executive Vice President and Director	2018	—	—	298,500	—	—	298,500
	2017	—	—	315,000	—	—	315,000
	2016	—	—	297,000	—	—	297,000
Trecia Canty, Senior Vice President and General Counsel	2018	—	—	248,750	—	—	248,750
	2017	—	—	262,500	—	—	262,500
	2016	—	—	247,500	—	—	247,500
Timothy Paul Davis, Assistant Secretary	2018	—	—	248,750	—	—	248,750
	2017	—	—	262,500	—	—	262,500
	2016	—	—	247,500	—	—	247,500

____________


(1)	As noted above, no compensation other than grants of phantom units under our LTIP is reported for the NEOs.

(2)

This column represents the aggregate grant date fair value computed in accordance with FASB Accounting Standards Codification Topic 718, Compensation - Stock Compensation (“FASB ASC Topic 718”) for financial statement reporting purposes for the phantom units granted under the 2014 Long-Term Incentive Plan. Fair value is calculated using the closing price of our units on the date of grant. The per unit grant date fair value for the 2018, 2017 and 2016 grants was $19.90, $21.00 and $19.80, respectively. Assumptions used in the calculation of this amount are included in Note 9 “Unit-Based Compensation” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K.

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Grants of Plan Based Awards in 2018

The following table provides information regarding plan-based awards granted to our NEOs during fiscal year 2018.



Name and Principal Position	Grant Date	Awards: Number of Units (1)	Option Awards: Number of Securities Underlying Option	Exercise or Base Price of Options Awards (Per Share)	Grant Date Fair Value of Units and Option Awards (2)
Thomas J. Nimbley, Chief Executive Officer and Chairman of the Board of Directors	5/1/2018	20,000	—	—	$398,000
C. Erik Young, Senior Vice President, Chief Financial Officer and Director	5/1/2018	12,500	—	—	$248,750
Matthew C. Lucey, Executive Vice President and Director	5/1/2018	15,000	—	—	$298,500
Trecia Canty, Senior Vice President and General Counsel	5/1/2018	12,500	—	—	$248,750
Timothy Paul Davis, Assistant Secretary	5/1/2018	12,500	—	—	$248,750

____________


(1)	All awards in this column are phantom units under our LTIP.

(2)

The amounts in this column reflect the aggregate grant date fair value of $19.90 per unit, which is equal to the NYSE closing price of our common units on the grant date. Assumptions used in the calculation of this amount for the 2018 fiscal year are included in Note 9 “Unit-Based Compensation” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K.

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Outstanding Equity Awards at December 31, 2018

The following table provides information regarding the number of outstanding equity awards held by our NEOs at December 31, 2018.



						Unit Awards (1)
Name and Principal Position	Grant Date	Number of Securities Underlying Unexercised Options Exercisable	Number of Securities Underlying Unexercised Options Unexercisable	Option Exercise Price	Option Expiration Date	Number of Units That Have Not Vested	Market Value of Units That Have Not Vested (2)
Thomas J. Nimbley, Chief Executive Officer and Chairman of the Board of Directors	5/1/2018	—	—	N/A	N/A	20,000	$402,000
	5/1/2017	—	—	N/A	N/A	15,000	$301,500
	4/26/2016	—	—	N/A	N/A	7,500	$150,750
	4/27/2015	—	—	N/A	N/A	3,750	$75,375
C. Erik Young, Senior Vice President, Chief Financial Officer and Director	5/1/2018	—	—	N/A	N/A	12,500	$251,250
	5/1/2017	—	—	N/A	N/A	9,375	$188,438
	4/26/2016	—	—	N/A	N/A	6,250	$125,625
	4/27/2015	—	—	N/A	N/A	3,125	$62,813
Matthew C. Lucey, Executive Vice President and Director	5/1/2018	—	—	N/A	N/A	15,000	$301,500
	5/1/2017	—	—	N/A	N/A	11,250	$226,125
	4/26/2016	—	—	N/A	N/A	7,500	$150,750
	4/27/2015	—	—	N/A	N/A	3,750	$75,375
Trecia Canty, Senior Vice President and General Counsel	5/1/2018	—	—	N/A	N/A	12,500	$251,250
	5/1/2017	—	—	N/A	N/A	9,375	$188,438
	4/26/2016	—	—	N/A	N/A	6,250	$125,625
	4/27/2015	—	—	N/A	N/A	1,250	$25,125
Timothy Paul Davis, Assistant Secretary	5/1/2018	—	—	N/A	N/A	12,500	$251,250
	5/1/2017	—	—	N/A	N/A	9,375	$188,438
	4/26/2016	—	—	N/A	N/A	6,250	$125,625
	4/27/2015	—	—	N/A	N/A	3,125	$62,813

____________


(1)	All awards in this column are phantom units granted under our LTIP which vest ratably over a four year period.


(2)	Amounts in this column are based upon a fair market value of $20.10 per unit which was the NYSE closing price of our common units on December 31, 2018.

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Option Exercises and Units Vested in 2018

The following table reflects the aggregate value realized by the NEOs for phantom units that vested in 2018. We have not granted any options to purchase our units.



	Unit Awards
Name and Principal Position	Number of Units Acquired on Vesting (1)	Value Realized on Vesting (2)
Thomas J. Nimbley, Chief Executive Officer and Chairman of the Board of Directors	17,500	$347,188
C. Erik Young, Senior Vice President, Chief Financial Officer and Director	13,125	$260,406
Matthew C. Lucey, Executive Vice President and Director	16,250	$322,313
Trecia Canty, Senior Vice President and General Counsel	9,375	$186,250
Timothy Paul Davis, Assistant Secretary	13,125	$260,406

____________


(1)	Reflects the vesting of one-fourth of the service phantom units granted to Messrs. Nimbley, Young, Lucey, Ms. Canty and Mr. Davis in May 2017, April 2016, April 2015 and May 2014.


(2)	The value realized for the service phantom units was calculated using the closing price of our common units on April 26, April 27, May 1 and May 23, 2018, the vesting date, multiplied by the number of units that vested. This amount also includes the value of DERs received as a cash distribution on the vested units during the vesting period.

Potential Payments Upon Termination or Change of Control

The following table discloses the estimated payments and benefits that would be provided to each of our NEOs, assuming that each of the triggering events relating to termination of employment or change of control described in their respective employment agreements and the LTIP took place on December 31, 2018 and their last day of employment with our general partner or its affiliates was December 31, 2018. Due to a number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any actual amounts paid or distributed may differ. Factors that could affect these amounts include the timing during the year of any such event and our unit price.



Name and Principal Position	Termination of Employment (1)		Other Termination of Employment	Change of Control (2)
Thomas J. Nimbley, Chief Executive Officer and Chairman of the Board of Directors	$1,096,450	(3)	—	$1,096,450	(3)
C. Erik Young, Senior Vice President, Chief Financial Officer and Director	$746,750	(4)	—	$746,750	(4)
Matthew C. Lucey, Executive Vice President and Director	$896,100	(5)	—	$896,100	(5)
Trecia Canty, Senior Vice President and General Counsel	$695,675	(6)	—	$695,675	(6)
Timothy Paul Davis, Assistant Secretary	$746,750	(4)	—	$746,750	(4)

____________


(1)	Death, disability, without cause and good reason are defined in the applicable award agreements.

(2)

The agreements evidencing the phantom unit grants to our NEOs in 2018 provide that in the event of a Change of Control (as defined below), all of the then outstanding phantom units and associated DERs will vest in full (to the extent that such phantom units have not previously been forfeited) and settled in accordance with its terms. The amounts in this column assume that a Change of Control occurred on December 31, 2018, all of the then outstanding phantom units and associated DERs became nonforfeitable as of December 31, 2018, and such phantom units would vest on the March 14, 2019 distribution date. That portion of the dollar value given that is attributable to the PBFX phantom units is based on the market value of PBFX’s common units on December 31, 2018 ($20.10), without discount for service period.

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(3)	Consists of the value of 46,250 phantom units and associated DERs.


(4)	Consists of the value of 31,250 phantom units and associated DERs.


(5)	Consists of the value of 37,500 phantom units and associated DERs.


(6)	Consists of the value of 29,375 phantom units and associated DERs.

Under the LTIP and the applicable award agreements, phantom units that have not vested at the time the participant’s employment with our general partner or its affiliates terminates will generally be immediately forfeited unless the board of directors of our general partner determines otherwise or the participant is eligible to retire pursuant to the LTIP. However, upon a Change of Control, 100% of the phantom units subject to current award agreements shall vest (but only to the extent the award agreement has not otherwise previously been forfeited), and the phantom units shall become nonforfeitable.

Pursuant to the LTIP, the phrase “Change of Control” means, and shall be deemed to have occurred upon the occurrence of, one or more of the following events:

(i) any “person” or “group” within the meaning of those terms as used in Sections 13(d) and 14(d)(2) of the Exchange Act, other than PBF Energy or any of its controlled Affiliates (as defined in our LTIP), is or becomes the beneficial owner, by way of merger, consolidation, recapitalization, reorganization, or otherwise, of 50% or more of the voting power of the equity securities of the general partner or the Partnership;

(ii) the limited partners of the Partnership approve, in one transaction or a series of transactions, a plan of complete liquidation of the Partnership;

(iii) the sale or other disposition by either the general partner or the Partnership of all or substantially all of its assets in one or more transactions to any Person (as defined the LTIP) other than PBF Energy or any of its controlled Affiliates;

(iv) (A) the General Partner or an Affiliate of our general partner ceases to be the general partner of the Partnership or (B) our general partner ceases to be PBF Energy or one of its controlled Affiliates;

(v) a “Change in Control” as defined in the PBF Energy Inc. 2012 Equity Incentive Plan, as such plan may be amended, supplemented, restated or succeeded; or

(vi) any other event specified as a “Change of Control” in an applicable award agreement.

We retain the discretion to compensate any officer upon any future termination of employment or change in control.

Director Compensation

Officers or employees of our general partner who also serve as directors of our general partner do not receive additional compensation for such service. Directors of our general partner who are not also officers or employees of our general partner receive cash compensation on a quarterly basis as a retainer and for attending meetings of the board of directors and committee meetings and grants under our LTIP as follows:


•	A cash retainer of $50,000 per year, paid quarterly.


•	For the audit committee chair, an additional cash retainer of $10,000 per year, paid quarterly.


•	An additional cash payment of $1,500 for each board of directors or committee meeting attended.


•	Annual grants under our LTIP of a number of phantom units with a fair market value equal to approximately $50,000 at the date of grant. These phantom units will generally vest over a four year period and have associated DERs.

In addition, we reimburse each director for out-of-pocket expenses in connection with attending meetings. We will fully indemnify each director for actions associated with being a director to the fullest extent permitted under Delaware law pursuant to a director indemnification agreement and our partnership agreement.

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The following table reflects all compensation granted to each non-employee director during 2018.



	Fees Earned or Paid in Cash	Unit Awards	All Other Compensation	Total
Name	($)(1)	($)(2)(3)(4)	($)	($)
Michael D. Gayda	60,500	50,000	—	110,500
Bruce A. Jones	98,000	50,000	—	148,000
David Roush	108,000	50,000	—	158,000
Karen Davis	98,000	50,000	—	148,000

____________


(1)	The annual cash fees for non-employee directors’ board of directors and committee service for the period of January 1, 2018 through December 31, 2018.


(2)	On May 1, 2018, each of the non-employee directors received a grant of 2,513 phantom units, representing their annual phantom unit award grant of $50,000, based on the grant date closing stock price of $19.90.


(3)	The table below reflects the total service phantom units outstanding as of the end of the 2018 fiscal year for each non-employee director. No options or other equity-based awards have been granted to the non-employee directors.



Name	Total Service Phantom Units Outstanding
Michael D. Gayda	6,084
Bruce A. Jones	6,084
David Roush	6,084
Karen Davis	4,325


(4)	The grant date fair value is computed in accordance with FASB ASC Topic 718. The values for the phantom unit awards reflect the aggregate grant date fair values of the awards. The phantom units will vest ratably over a four year period.

Compensation Committee Interlocks and Insider Participation

As previously discussed, our general partner’s board of directors is not required to maintain, and does not maintain, a compensation committee. Thomas J. Nimbley, Matthew C. Lucey and C. Erik Young are directors of our general partner, and are also executive officers of our general partner and PBF Energy. However, all compensation decisions with respect to Thomas J. Nimbley, Matthew C. Lucey and C. Erik Young are made by PBF Energy and they do not receive any compensation directly from us or our general partner other than grants under our LTIP. Please see “Item 13. Certain Relationships and Related Transactions, and Director Independence” below for information about relationships among us, our general partner and PBF Energy. Please see above for information about our director and executive officer compensation.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED UNITHOLDER MATTERS

The following table sets forth as of February 19, 2019 the beneficial ownership of our units held by:


•	each person who beneficially owns 5% or more of the outstanding units;


•	each director and named executive officer of PBF GP; and


•	all directors and officers of PBF GP as a group.

We report the amounts and percentage of units beneficially owned on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. The rules of the SEC deem a person a “beneficial owner” of a security if that person has or shares “voting power” that includes the power to vote or to direct the

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voting of the security, or “investment power” that includes the power to dispose of or to direct the disposition of the security. In computing the number of common units beneficially owned by a person and the percentage ownership of that person, common units subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of February 19, 2019, if any, are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. Except as indicated by footnote, the persons named in the table below have sole voting and investment power with respect to all units that they beneficially own, subject to community property laws where applicable.

The percentage of our units beneficially owned is based on a total of 45,348,821 common units outstanding. The percentage of PBF Energy common stock beneficially owned is based on the shares of Class A common stock and Class B common stock outstanding, with each share of Class B common stock representing the number of PBF LLC Series A units beneficially owned. As of February 19, 2019, 119,845,901 shares of Class A common stock were beneficially owned, as determined in accordance with the rules and regulations of the SEC.



	PBF Logistics LP			PBF Energy Inc.
Name of Beneficial Owner (1)	Common Units Beneficially Owned	Percentage of Common Units Beneficially Owned		Common Stock Beneficially Owned	Percentage of Common Stock Beneficially Owned
Thomas J. Nimbley	143,750	0.3	%	1,653,490	1.4	%
Matthew C. Lucey	50,000	0.1	%	526,047	0.4	%
Michael D. Gayda	48,255	0.1	%	6,538	*
Timothy Paul Davis	25,617	0.1	%	330,058	0.3	%
C. Erik Young	22,672	*		420,305	0.4	%
David Roush	18,100	*		—	—
Trecia Canty	15,783	*		201,461	0.2	%
Bruce A. Jones	14,230	*		—	—
Karen B. Davis	5,604	*		—	—
All directors and executive officers as a group (11 persons)	420,758	0.9	%
Other 5% or more unitholders:
PBF Energy Inc. (2)	19,953,631	44.0	%
Carlos Slim Helu et. Al (3)	4,255,121	9.4	%
Clearbridge Investments, LLC (4)	3,574,811	7.9	%
Goldman Sachs Asset Management (5)	2,411,747	5.3	%

____________


*	Less than 0.1%.


(1)	Unless otherwise indicated, the address for all beneficial owners in this table is One Sylvan Way, Second Floor, Parsippany, New Jersey 07054.

(2)

A subsidiary of PBF Energy Inc. holds the common units and general partner interest. PBF Energy Company LLC directly holds 19,953,631 common units and all the general partner interest. PBF Energy Inc. is the ultimate parent of PBF Energy Company LLC and may, therefore, be deemed to beneficially own the units held. PBF Energy Inc. files information with, or furnishes information to, the United States Securities and Exchange Commission (the “SEC”) pursuant to the information requirements of the Securities Exchange Act of 1934, as amended.

(3)

According to a Schedule 13G/A filed with the SEC on February 14, 2019 by Carlos Slim Helú, Carlos Slim Domit, Marco Antonio Slim Domit, Patrick Slim Domit, María Soumaya Slim Domit, Vanessa Paola Slim Domit and Johanna Monique Slim Domit (collectively, the “Slim Family”). The members of the Slim Family are beneficiaries of a Mexican trust which in turn owns all of the outstanding voting securities of Inversora Carso, S.A. de C.V, formerly known as Inmobiliaria Carso, S.A. de C.V. (“Inversora Carso”). Inversora Carso, a sociedad anónima de capital variable organized under the laws of the United Mexican States (“Mexico”), is a

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holding company with portfolio investments in various companies. Inversora Carso owns all of the outstanding voting securities of Control Empresarial de Capitales S.A. de C.V. The Slim Family has an address of Paseo de las Palmas 736, Colonia Lomas de Chapultepec, 11000 Ciudad de México, México and Inversora Carso, Paseo de las Palmas 781, Piso 3, Lomas de Chapultepec, Seccion III, Migual Hidalgo, Ciudad de Mexico, Mexico, 11000. The Schedule 13G/A reports that the Slim Family and Inversora Carso have shared voting and dispositive power with respect to the reported units.


(4)	According to a Schedule 13G/A filed with the SEC on February 14, 2019 by Clearbridge Investments, LLC, with an address of 620 8th Avenue, New York, New York 10018. The Schedule 13G/A reports that Clearbridge Investments, LLC has sole voting and dispositive power with respect to the reported units.


(5)	According to a Schedule 13G/A filed with the SEC on February 6, 2019 by Goldman Sachs Asset Management, with an address of 200 West Street, New York, New York 10282. The Schedule 13G/A reports that Goldman Sachs Asset Management, L.P. and GS Investment Strategies, LLC share voting and dispositive power with respect to the reported units.

Securities Authorized for Issuance Under Equity Compensation Plans



Plan Category	(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights (1)	(b) Weighted average exercise price of outstanding options, warrants and rights (2)	(c) Number of securities remaining available for future issuance under equity compensation plans, excluding securities reflected in column (a) (3)
Equity compensation plans approved by security holders	716,458	—	312,757
Equity compensation plans not approved by security holders	—	—	—
Total	716,458	—	312,757

____________

(1)

The amounts in column (a) of this table reflect only phantom units that have been granted under the LTIP. No awards (as defined under the LTIP) have been made other than the phantom units, each of which represent rights to receive (upon vesting and payout) one common unit in the Partnership or an amount of cash equal to the fair market value of such unit. These phantom units vest pro-rata, annually over four years from the date of grant.


(2)	Column (b) is not applicable because phantom units do not have an exercise price.


(3)	The LTIP was adopted by the PBF GP in connection with the closing of the IPO and provides for the making of certain awards, including common units, restricted units, phantom units, unit appreciation rights and distribution equivalent rights. For information about the LTIP that did not require approval by our limited partners, see “Item 11. Executive Compensation.”

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Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Party Transactions

Relationships with PBF Energy and PBF LLC

As of February 19, 2019, PBF LLC owned 19,953,631 common units, representing an approximate 44.0% limited partner interest in us and a non-economic general partner interest and owned all of the IDRs. Transactions with PBF Energy and its affiliated entities are considered to be related party transactions because PBF Energy and its affiliates owned more than 5% of our equity interests; in addition, PBF Energy’s executive officers serve as executive officers of both PBF Energy and our general partner. Whenever a conflict arises between our general partner or its affiliates on the one hand, and us or our limited partners on the other hand, the resolution or course of action in respect of such conflict of interest shall be permitted and deemed approved by all our limited partners and shall not constitute a breach of our partnership agreement, of any agreement contemplated thereby or of any duty, if the resolution or course of action in respect of such conflict of interest is:

•approved by the conflicts committee of our general partner, although our general partner is not obligated to seek such approval;

•approved by the holders of a majority of the outstanding common units, excluding any such units owned by our general partner or any of its affiliates;

•determined by the board of directors of our general partner to be on terms no less favorable to us than those generally being provided to, or available from, unrelated third parties; or

•determined by the board of directors of our general partner to be fair and reasonable to us, taking into account the totality of the relationships between the parties involved, including other transactions that may be particularly favorable or advantageous to us.

Our general partner may, but is not required to, seek the approval of such resolutions or courses of action from the conflicts committee of its board of directors or from the holders of a majority of the outstanding common units as described above. If our general partner does not seek approval from the conflicts committee or from holders of common units as described above and the board of directors of our general partner approves the resolution or course of action taken with respect to the conflict of interest, then it will be presumed that, in making its decision, the board of directors of our general partner acted in good faith, and in any proceeding brought by or on behalf of us or any of our unitholders, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption. Unless the resolution of a conflict is specifically provided for in our partnership agreement, the board of directors of our general partner or the conflicts committee of the board of directors of our general partner may consider any factors they determine in good faith to consider when resolving a conflict. An independent third-party is not required to evaluate the resolution. Under our partnership agreement, a determination, other action or failure to act by our general partner, the board of directors of our general partner, or any committee thereof (including the conflicts committee) will be deemed to be in “good faith” if our general partner, the board of directors of our general partner or any committee thereof (including the conflicts committee) subjectively believed such determination, other action or failure to act was in, or not opposed to, the best interests of the partnership or meets the standard otherwise specified in our partnership agreement.

Procedures for Review, Approval and Ratification of Transactions with Related Persons

The board of directors of our general partner has adopted a written related party transactions policy to document procedures pursuant to which “related party transactions” are reviewed, approved or ratified. Under Item 404 of Regulation S-K, a “related party transaction” means any transaction or series of transactions in which we are a participant, the amount involved exceeds $120,000, and any related person has a direct or indirect material interest. The policy covers all transactions between us and any related party (including any transactions requiring disclosure under Item 404), other than (1) employment of executive officers if the compensation is disclosed in

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applicable SEC filings or approved by the independent directors of our general partner; (2) compensation of the directors of our general partner that is disclosed in applicable SEC filings; (3) pro rata payments arising solely from the ownership of our equity securities; (4) certain indebtedness arising from ordinary course transactions or with owners of more than 5% of our common units; (5) transactions where the rates or charges are determined by competitive bids; (6) certain charitable contributions; (7) regulated transactions; and (8) certain financial services. In addition, any transactions between us, any of our subsidiaries or any of our limited partners, on the one hand, and our general partner or any of its affiliates, on the other hand, which has been submitted to the conflicts committee of our general partner for review and approval, shall not constitute a related party transaction under the policy.

The policy provides that the audit committee of our general partner will be responsible to review and approve related party transactions that may arise within our partnership. The audit committee will review the material facts of all related party transactions that require the committee’s approval and either approve or disapprove of the entry into the related party transaction, subject to certain exceptions described above. The policy prohibits any director from participating in any discussion or approval of a related party transaction for which such director is a related party, except that such director is required to provide all material information concerning the interested transaction to the committee. As part of its review and approval of a related party transaction, the committee will consider whether the transaction is made on terms no less favorable than terms that would be generally available to an unaffiliated third-party under the same or similar circumstances, the extent of the related-party’s interest in the transaction and any other matters the committee deems appropriate.

Acquisitions

Development Assets Acquisition

On July 16, 2018, we entered into the Development Assets Contribution Agreements. Pursuant to the Development Assets Contribution Agreements, we acquired from PBF LLC all of the issued and outstanding limited liability company interests of: TRLC, CLC, PTC and DSLC. The Development Assets Acquisition closed on July 31, 2018 for total consideration of $31,586, consisting of 1,494,134 common units issued to PBF LLC representing limited partner interests in us.

IDR Restructuring Agreement

On February 13, 2019, we entered into the IDR Restructuring Agreement with PBF LLC and PBF GP, pursuant to which the IDRs held by PBF LLC will be canceled and converted into 10,000,000 newly issued PBFX common units. The IDR Restructuring is expected to close on February 28, 2019. Subsequent to the closing of the IDR Restructuring, no distributions will be made to PBF LLC with respect to the IDRs and the newly issued PBFX common units will be entitled to normal distributions.

Distributions and Payments to Our General Partner and its Affiliates

We will generally make cash distributions to our unitholders pro rata, including PBF LLC, as the holder of 29,953,631 common units representing limited partner interests in us, following the closing of the IDR Restructuring.

Assuming we have sufficient available cash to pay the full minimum quarterly distribution on all of our outstanding units for four quarters, PBF Energy would receive an annual distribution of approximately $35.9 million on its common units following the closing of the IDR Restructuring.

Our general partner and its affiliates are generally entitled to reimbursement for all expenses they incur on our behalf, including salaries and employee benefit costs for employees who provide services to us, and all other necessary or appropriate expenses allocable to us or reasonably incurred by our general partner and its affiliates in connection with operating our business. Except to the extent specified in the Omnibus Agreement or the Services

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Agreement, our general partner will determine the expenses that are allocable to us in good faith, but there is no limit on the amount of expenses for which our general partner and its affiliates will be reimbursed.

If we are ever liquidated, the partners, including our general partner, will be entitled to receive liquidating distributions according to their respective capital account balances.

In connection with our quarterly distributions, we distributed $50.6 million and $41.9 million to PBF LLC for the years ended December 31, 2018 and 2017, respectively. During the year ended December 31, 2018 and 2017, TVPC distributed $20.3 million and $21.5 million, respectively, to each of its members, which includes TVP Holding, a subsidiary of PBF Holding.

Agreements with PBF Energy

Commercial Agreements

We currently derive the majority of our revenue from long-term, fee-based agreements with PBF Holding, supported by MVCs as applicable and contractual fee escalations for inflation adjustments and certain increases in operating costs. We believe the terms and conditions under these agreements, as well as the Omnibus Agreement and the Services Agreement each with PBF Holding, are generally no less favorable to either party than those that could have been negotiated with unaffiliated parties with respect to similar services.

Omnibus Agreement

On July 31, 2018, in connection with the Development Assets Acquisition, we entered into the Fifth Amended and Restated Omnibus Agreement to update the provision of these executive management services and support for the Development Assets, which we expect to result in an increase of the estimated annual fee to $7.0 million.

Services Agreement

Additionally, we have entered into an operation and management services and secondment agreement with PBF Holding and certain of its subsidiaries, pursuant to which PBF Holding and its subsidiaries provide us with the personnel necessary for us to perform its obligations under its commercial agreements. We reimburse 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.

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operation and management services for the Development Assets, resulting in an increase of the annual fee to $8.6 million. The Services Agreement will terminate upon the termination of the Omnibus Agreement, provided that we may terminate any service on 30-days’ notice.

PBFX’s 2023 Notes

On May 12, 2015, we, along with PBF Finance, issued the initial 2023 Notes, and on October 6, 2017, we, along with PBF Finance issued the additional 2023 Notes. Our named executive officers (other than Timothy Paul Davis) and certain of PBF Energy’s officers and directors and their affiliates and family members purchased $19.9 million aggregate principal amount of the initial 2023 Notes.

The information required by Item 407(a) of Regulation S-K is included in “Item 10. Directors, Executive Officers and Corporate Governance.”

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

For fiscal years 2018 and 2017, Deloitte & Touche LLP (“Deloitte”) billed the following fees and expenses for the indicated services:



	Fiscal Year Ended December 31, 2018		Fiscal Year Ended December 31, 2017
Audit Fees and Expenses	$	1,032,000	$	758,000
Audit-related Fees	601,300		608,700
Tax Fees	403,137		353,391
All Other Fees	—		—
Total Fees and Expenses	$	2,036,437	$	1,720,091

Audit fees paid for the services of Deloitte during fiscal year 2018 and 2017 include services related to the audits of our Consolidated Financial Statements and audit services provided in connection with our regulatory filings. Fees and expenses are for services in connection with the audit of our fiscal year ended December 31, 2018 and 2017 financial statements regardless of the timing of payment for those fees and expenses.

All engagements performed by our independent registered public accounting firm, whether for auditing or non-auditing services, must be pre-approved by the audit committee of the board of directors of our general partner. During the year ended December 31, 2018 and 2017, all of the services performed for us by Deloitte were pre-approved by the audit committee.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) 1. Financial Statements. The Consolidated Financial Statements of PBF Logistics LP and subsidiaries, are included in Part II, Item 8 of this Form 10-K.

2. Financial Statement Schedules and Other Financial Information. No financial statement schedules are submitted because either they are inapplicable or because the required information is included in the Consolidated Financial Statements or notes thereto.

3. Exhibits. Filed as part of this Annual Report on Form 10-K are the following exhibits:

EXHIBIT INDEX



Exhibit Number		Description
2.1		Purchase Agreement dated as of January 29, 2016 by and between PBF Logistics Products Terminals LLC and Plains Products Terminals LLC (incorporated by reference herein to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-36446) filed on February 4, 2016).
2.2		Purchase Agreement dated as of April 16, 2018 by and between PBF Logistics Products Terminals LLC and Cummins Terminals, Inc. (incorporated by reference herein to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-36446) filed on April 20, 2018).
2.3		Purchase and Sale Agreement dated July 16, 2018, among Crown Point International LLC, as Seller, PBF Logistics LP, as Purchaser and, CPI Operations LLC, for the limited purposes set forth therein (incorporated by reference herein to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K (File No. 001-36446) filed on July 20, 2018).
3.1		Certificate of Limited Partnership of PBF Logistics LP (incorporated by reference herein to Exhibit 3.1 to the Registration Statement on Form S-1 (File No. 333-195024) filed on April 3, 2014).
3.2		Second Amended and Restated Agreement of Limited Partnership of PBF Logistics LP dated as of September 15, 2014 (incorporated by reference herein to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-36446) filed on September 19, 2014).
3.3		Amendment No. 1 to Second Amended and Restated Agreement of Limited Partnership of PBF Logistics LP (incorporated by reference herein to Exhibit 3.1 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 (File No. 001-36446) filed on May 3, 2018).
3.4		Certificate of Formation of PBF Logistics GP LLC (incorporated by reference herein to Exhibit 3.3 to the Registration Statement on Form S-1 (File No. 333-195024) filed on April 3, 2014).
3.5		First Amended and Restated Limited Liability Company Agreement of PBF Logistics GP LLC dated May 14, 2014 (incorporated by reference herein to Exhibit 3.2 to the Current Report on Form 8-K (File No. 001-36446) filed on May 14, 2014).
4.1		Indenture dated May 12, 2015, among PBF Logistics LP, PBF Logistics Finance Corporation, the Guarantors named therein and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference herein to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-36446) filed on May 18, 2015).
4.1.1		Supplemental Indenture dated June 19, 2015, among PBF Logistics LP, PBF Logistics Finance Corporation, the Guarantors named therein and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference herein to Exhibit 4.1.1 to the Annual Report on Form 10-K (File No. 001-36446) filed on February 22, 2016).
4.2		Form of 6.875% Senior Note (incorporated by reference herein to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-36446) filed on May 18, 2015).

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Exhibit Number		Description
4.3		Registration Rights Agreement dated May 12, 2015, among PBF Logistics LP, PBF Logistics Finance Corporation and the Guarantors named therein and Deutsche Bank Trust Company Americas, as Trustee (incorporated by reference herein to Exhibit 4.3 to the Current Report on Form 8-K (File No. 001-36446) filed on May 18, 2015).
4.4		Second Supplemental Indenture dated as of June 28, 2016, among PBF Logistics Products Terminals LLC, PBF Logistics LP, PBF Logistics Finance Corporation, and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference herein to Exhibit 4.2 to the Quarterly Report on form 10-Q for the quarter ended June 30, 2016 (File No. 001-36446) filed on August 4, 2016).
4.5		Third Supplemental Indenture dated as of October 24, 2016, among Torrance Valley Pipeline Company LLC, PBFX Operating Company LLC, PBF Logistics LP, PBF Logistics Finance Corporation, and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference herein to Exhibit 4.8 to the Annual Report on Form 10-K (File No. 001-36446) filed on February 24, 2017).
4.6		Fourth Supplemental Indenture dated as of March 13, 2017, among Paulsboro Natural Gas Pipeline Company LLC, PBF Logistics LP, PBF Logistics Finance Corporation, and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference herein to Exhibit 4.2 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (File No. 001-36446) filed on May 4, 2017).
4.7		Fifth Supplemental Indenture dated October 6, 2017, among PBF Logistics LP, PBF Logistics Finance Corporation, the Guarantors named therein and Deutsche Bank Trust Company Americas, as Trustee (incorporated by reference herein to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-36446) filed on October 6, 2017).
4.8		Registration Rights Agreement, dated as of October 6, 2017, among PBF Logistics LP, PBF Logistics Finance Corporation, the guarantors named therein and Deutsche Bank Trust Company Americas, as Trustee (incorporated by reference herein to Exhibit 4.2 to the Current Report on Form 8-K (File No. 001-36446) filed on October 6, 2017).
4.9		Sixth Supplemental Indenture dated as of September 11, 2018, among DCR Storage and Loading LLC, Chalmette Logistics Company LLC, Toledo Rail Logistics Company LLC, Paulsboro Terminaling Company LLC, PBF Logistics LP, PBF Logistics Finance Corporation, and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference herein to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 001-36446) filed on October 31, 2018).
10.1		Contribution and Conveyance Agreement by and among PBF Logistics LP, PBF Logistics GP LLC, PBF Energy Inc., PBF Energy Company LLC, PBF Holding Company LLC, Delaware City Refining Company LLC, Delaware City Terminaling Company LLC and Toledo Refining Company LLC dated as of May 8, 2014 (incorporated by reference herein to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36446) filed on May 14, 2014).
10.2		Contribution Agreement dated as of September 16, 2014 among PBF Energy Company LLC and PBF Logistics LP (incorporated by reference herein to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36446) filed on September 19, 2014).
10.3		Contribution Agreement dated as of December 2, 2014 by and between PBF Energy Company LLC and PBF Logistics LP (incorporated by reference herein to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-36446) filed on December 5, 2014).
10.4		Delaware City Rail Terminaling Services Agreement dated as of May 14, 2014 by and between PBF Holding Company LLC and Delaware City Terminaling Company LLC (incorporated by reference herein to Exhibit 10.6 to the Current Report on Form 8-K (File No. 001-36446) filed on May 14, 2014).
10.5		Assignment and Amendment of Amended and Restated Toledo Truck Unloading & Terminaling Agreement dated as of December 12, 2014 by and between PBF Holding Company LLC, PBF Logistics LP and Toledo Terminaling Company LLC (incorporated by reference herein to Exhibit 10.4 to the Current Report on Form 8-K (File No. 001-36446) filed on December 16, 2014).



Exhibit Number		Description
10.6		Storage and Terminaling Services Agreement dated as of December 12, 2014 among PBF Holding Company LLC and Toledo Terminaling Company LLC (incorporated by reference herein to Exhibit 10.3 to the Current Report on Form 8-K (File No. 001-36446) filed on December 16, 2014).
10.7		Contribution Agreement dated as of May 5, 2015 by and between PBF Energy Company LLC and PBF Logistics LP (incorporated by reference herein to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-36446) filed on May 5, 2015).
10.8		Delaware Pipeline Services Agreement dated as of May 15, 2015 among PBF Holding Company LLC and Delaware Pipeline Company LLC (incorporated by reference herein to Exhibit 10.3 to the Current Report on Form 8-K (File No. 001-36446) filed on May 18, 2015).
10.9		Delaware City Truck Loading Services Agreement dated as of May 15, 2015 among PBF Holding Company LLC and Delaware City Logistics Company LLC (incorporated by reference herein to Exhibit 10.4 to the Current Report on Form 8-K (File No. 001-36446) filed on May 18, 2015).
10.10#		PBF Logistics LP 2014 Long-Term Incentive Plan, adopted as of May 14, 2014 (incorporated by reference herein to Exhibit 10.8 to the Current Report on Form 8-K (File No. 001-36446) filed on May 14, 2014).
10.11#		Form of Phantom Unit Agreement (incorporated by reference herein to Exhibit 10.8 to the Registration Statement on Form S-1 (File No. 333-195024), as amended, originally filed on April 22, 2014).
10.12		Form of Indemnification Agreement, dated December 12, 2012, between PBF Energy Inc. and each of the executive officers and directors of PBF Energy Inc. (incorporated by reference herein to Exhibit 10.5 filed with PBF Energy Inc.’s Current Report on Form 8-K (File No. 001-35764) filed on December 18, 2012).
10.13		Contribution Agreement dated as of August 31, 2016 by and between PBF Energy Company LLC and PBF Logistics LP (incorporated by reference herein to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-36446) filed on September 7, 2016).
10.14		Transportation Services Agreement dated as of August 31, 2016 among PBF Holding Company LLC and Torrance Valley Pipeline Company LLC (incorporated by reference herein to Exhibit 10.3 to the Current Report on Form 8-K (File No. 001-36446) filed on September 7, 2016).
10.15		Pipeline Service Order dated as of August 31, 2016, by and between Torrance Valley Pipeline Company LLC, and PBF Holding Company LLC (incorporated by reference herein to Exhibit 10.4 to the Current Report on Form 8-K (File No. 001-36446) filed on September 7, 2016).
10.16		Pipeline Service Order dated as of August 31, 2016, by and between Torrance Valley Pipeline Company LLC, and PBF Holding Company LLC (incorporated by reference herein to Exhibit 10.5 to the Current Report on Form 8-K (File No. 001-36446) filed on September 7, 2016).
10.17		Dedicated Storage Service Order dated as of August 31, 2016, by and between Torrance Valley Pipeline Company LLC, and PBF Holding Company LLC (incorporated by reference herein to Exhibit 10.6 to the Current Report on Form 8-K (File No. 001-36446) filed on September 7, 2016).
10.18		Throughput Storage Service Order dated as of August 31, 2016, by and between Torrance Valley Pipeline Company LLC, and PBF Holding Company LLC (incorporated by reference herein to Exhibit 10.7 to the Current Report on Form 8-K (File No. 001-36446) filed on September 7, 2016).
10.19		Contribution Agreement dated as of February 15, 2017 by and between PBF Energy Company LLC and PBF Logistics LP (incorporated by reference herein to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-36446) filed on February 16, 2017).
10.20		Storage Services Agreement dated as of February 15, 2017 by and between PBFX Operating Company LLC and PBF Holding Company LLC (incorporated by reference herein to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36446) filed on February 16, 2017).
10.21		Lease Agreement dated as of February 15, 2017 by and between PBFX Operating Company LLC and Chalmette Refining, L.L.C. (incorporated by reference herein to Exhibit 10.3 to the Current Report on Form 8-K (File No. 001-36446) filed on February 16, 2017).



Exhibit Number		Description
10.22		Precedent Agreement dated as of February 28, 2017 by Paulsboro Natural Gas Pipeline Company LLC and Paulsboro Refining Company LLC (incorporated by reference herein to Exhibit 10.6 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (File No. 001-36446) filed on May 4, 2017).
10.23		Expansion Rights and Right of First Refusal Agreement dated as of February 28, 2017 among PBF Energy Company LLC, PBF Logistics GP LLC, and PBF Logistics LP (incorporated by reference herein to Exhibit 10.7 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (File No. 001-36446) filed on May 4, 2017).
10.24		Firm Transportation Service Agreement dated as of August 3, 2017, by and between Paulsboro Natural Gas Pipeline Company LLC and Paulsboro Refining Company LLC (incorporated by reference herein to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 (File No. 001-36446) filed on November 2, 2017).
10.25		Amended and Restated Delaware City Rail Terminaling Services Agreement entered into on May 2, 2018, by and between PBF Holding LLC and Delaware City Terminaling Company LLC (incorporated by reference herein to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 (File No. 001-36446) filed on May 3, 2018).
10.26		Amended and Restated Delaware City West Ladder Rack Terminaling Services Agreement entered into on May 2, 2018, by and between PBF Holding LLC and Delaware City Terminaling Company LLC (incorporated by reference herein to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 (File No. 001-36446) filed on May 3, 2018).
10.27		Amended and Restated Revolving Credit Agreement, dated July 30, 2018 among PBF Logistics LP, Wells Fargo Bank, National Association, as administrative agent and the lender syndicate thereto (incorporated by reference herein to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36446) filed on August 2, 2018).
10.28		Fifth Amended and Restated Omnibus Agreement dated as of July 31, 2018, among PBF Holding Company LLC, PBF Energy Company LLC, PBF Logistics GP LLC and PBF Logistics LP (incorporated by reference herein to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 001-36446) filed on October 31, 2018).
10.29		Sixth Amended and Restated Operation and Management Services and Secondment Agreement dated as of July 31, 2018, among PBF Holding Company LLC, Delaware City Refining Company LLC, Toledo Refining Company LLC, Torrance Refining Company LLC, Torrance Logistics Company LLC, Chalmette Refining L.L.C., Paulsboro Refining Company LLC, PBF Logistics GP LLC, PBF Logistics LP, DCR Storage and Loading LLC, Delaware City Terminaling Company LLC, Toledo Terminaling Company LLC, Delaware Pipeline Company LLC, Delaware City Logistics Company LLC, Paulsboro Terminaling Company LLC, Paulsboro Natural Gas Pipeline Company LLC, Toledo Rail Logistics Company LLC, Chalmette Logistics Company LLC and PBFX Operating Company LLC (incorporated by reference herein to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 001-36446) filed on October 31, 2018).
10.30		Joinder Agreement dated as of September 7, 2018, among DCR Storage and Loading LLC, Chalmette Logistics Company LLC, Toledo Rail Logistics Company LLC, Paulsboro Terminaling Company LLC and Wells Fargo Bank, National Association, as Administrative Agent (incorporated by reference herein to Exhibit 10.4 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 001-36446) filed on October 31, 2018).
10.31		Common Unit Purchase Agreement, dated July 16, 2018, by and among PBF Logistics LP and the purchasers party thereto (incorporated by reference herein to Exhibit 1.1 to the Current Report on Form 8-K (File No. 001-36446) filed on July 17, 2018).
21.1*		Subsidiaries of the Registrant.
23.1*		Consent of Deloitte & Touche LLP, dated February 21, 2019.
23.2*		Consent of Deloitte & Touche LLP, dated February 21, 2019.
24.1*		Power of Attorney (included on signature page).



Exhibit Number		Description
31.1*		Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Logistics GP 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 Logistics GP pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1/*		Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Logistics GP pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2/*		Certification of Erik Young, Chief Financial Officer of PBF Logistics GP pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1*		Supplemental Financial Information of Torrance Valley Pipeline Company LLC
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.

——————

# Represents management contract or compensatory plan or arrangement.

* Filed herewith.

** Furnished, not filed.

Signatures

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



			PBF Logistics LP
		By:	PBF Logistics GP LLC, its general partner

Date:	February 21, 2019		By:	/s/ Thomas J. Nimbley
				Thomas J. Nimbley Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)

POWER OF ATTORNEY

Each of the officers and directors of the registrant, whose signature appears below, in so signing, also makes, constitutes and appoints each of Erik Young, Matthew Lucey and Trecia Canty, and each of them, his true and lawful attorneys-in-fact, with full power and substitution, for him in any and all capacities, to execute and cause to be filed with the SEC any and all amendments to this Annual Report on Form 10-K, with exhibits thereto and other documents connected therewith and to perform any acts necessary to be done in order to file such documents, and hereby ratifies and confirms all that said attorneys-in-fact or their substitute or substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



Signature	Title	Date

/s/ Thomas J. Nimbley	Chief Executive Officer and Chairman of the Board of Directors	February 21, 2019
(Thomas J. Nimbley)	(Principal Executive Officer)

/s/ Erik Young	Senior Vice President, Chief Financial Officer and Director	February 21, 2019
(Erik Young)	(Principal Financial Officer)

/s/ John Barone	Chief Accounting Officer	February 21, 2019
(John Barone)	(Principal Accounting Officer)

/s/ Matthew C. Lucey	Executive Vice President	February 21, 2019
(Matthew C. Lucey)	and Director

/s/ Michael D. Gayda	Director	February 21, 2019
(Michael D. Gayda)

/s/ Bruce A. Jones	Director	February 21, 2019
(Bruce A. Jones)

/s/ David Roush	Director	February 21, 2019
(David Roush)

/s/ Karen Davis	Director	February 21, 2019
(Karen Davis)