PBF Logistics Announces Fourth Quarter 2019 Results and Quarterly Cash Distribution of $0.52 per Unit

PARSIPPANY, N.J., Feb. 13, 2020 /PRNewswire/ -- PBF Logistics LP PBFX (the "Partnership") announced today fourth quarter 2019 net income attributable to the limited partners of $29.8 million, or $0.48 per common unit. During the fourth quarter, the Partnership generated cash from operations of $53.4 million, EBITDA attributable to PBFX of $52.0 million, Adjusted EBITDA of $54.2 million and distributable cash flow of $38.0 million. Included in reported results for the fourth quarter are $2.3 million, or $0.04 per common unit, of transaction-related expenses, non-cash unit-based compensation and environmental remediation costs associated with the East Coast Terminals.

For the year-ended December 31, 2019, the Partnership reported net income attributable to the limited partners of $100.3 million, or $1.71 per common unit, generated cash from operations of $149.0 million, EBITDA attributable to PBFX of $184.8 million, Adjusted EBITDA of $201.0 million and distributable cash flow of $137.1 million. Included in reported results for the year-ended December 31, 2019 are $16.2 million, or $0.28 per common unit, of transaction-related expenses, non-cash unit-based compensation, environmental remediation costs associated with the East Coast Terminals and a true-up for revenue associated with the Paulsboro Natural Gas Pipeline due to a reduction in its pipeline tariff based on the lower than budget project costs.

As of December 31, 2019, the Partnership had approximately $247.2 million of liquidity, including approximately $35.0 million in cash and cash equivalents and access to approximately $212.2 million under its revolving credit facility.

PBF Logistics GP LLC Executive Vice President Matt Lucey said, "PBF Logistics' assets finished the year  with another solid quarter of operating performance. The Partnership delivered significant growth in 2019 through the drop down of the second half of the Torrance Valley Pipeline in April, along with a successful public equity offering, and the start-up of the Maersk processing agreement in October. We continue to focus on the development of organic projects to further drive Partnership revenues." Mr. Lucey continued, "To support the continued growth of the Partnership, we believe that a disciplined distribution strategy will continue to reward unitholders while allowing the Partnership to build coverage, de-lever the balance sheet and internally fund growth opportunities."

Commencement of production and storage of 0.5% sulphur fuel on the U.S. East Coast
On October 1, 2019, PBF Logistics commenced operations at CPI Operations LLC, a PBF Logistics LP terminal facility ("East Coast Storage assets") in New Jersey, United States, pursuant to a previously announced agreement with A.P. Moller - Maersk ("Maersk"). PBFX commenced processing crude oil sourced by Maersk and providing products per the arrangement.

The agreement enables Maersk Oil Trading to supply IMO 2020-compliant 0.5% marine fuel to its customers on the U.S. East Coast. Annual production will be around 1.25 million metric tonnes (mt), the equivalent of approximately 10% of A.P. Moller - Maersk's annual fuel demand.

PBF Logistics Announces Quarterly Distribution
The board of directors of PBF Logistics GP LLC, the Partnership's general partner, declared a regular quarterly cash distribution of $0.52 per unit. The distribution is payable on March 17, 2020, to PBFX unitholders of record at the close of business on February 25, 2020.

This release is intended to be a qualified notice to nominees under Treasury Regulations Section 1.1446-4(b). All of the Partnership's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, the Partnership's distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate.

Non-GAAP Financial Measures
The Partnership defines 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, amortization and change in contingent consideration. The Partnership defines 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, amortization and change in contingent consideration attributable to PBFX, which excludes results of acquisitions from PBF Energy Company LLC prior to the effective dates of such transactions and earnings attributable to the CPI earn-out. The Partnership defines Adjusted EBITDA as EBITDA attributable to PBFX excluding acquisition and transaction costs, non-cash unit-based compensation expense and items that meet the conditions of unusual, infrequent and/or non-recurring charges. The Partnership defines 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, Adjusted EBITDA and distributable cash flow are not presentations made in accordance with U.S. generally accepted accounting principles ("GAAP").

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

• the Partnership's 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 the Partnership's assets to generate sufficient cash flow to make distributions to the Partnership's unitholders;
• the Partnership's 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.

The Partnership believes that the presentation of EBITDA, EBITDA attributable to PBFX and Adjusted EBITDA provides useful information to investors in assessing the Partnership's financial condition and results of operations and assists in evaluating the Partnership's ongoing operating performance for current and comparative periods. The Partnership believes that the presentation of distributable cash flow provides 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 of the operating performance of the Partnership's assets and the cash the Partnership's business is generating. EBITDA, EBITDA attributable to PBFX, Adjusted EBITDA and distributable cash flow should not be considered alternatives to net income, income from operations, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA, EBITDA attributable to PBFX, Adjusted EBITDA 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, Adjusted EBITDA and distributable cash flow may be defined differently by other companies in the Partnership's industry, the Partnership's definitions of such measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Conference Call Information
The Partnership's senior management will host a conference call and webcast regarding earnings results and other business matters on Thursday, February 13, 2020, at 11:00 a.m. ET. The call is being webcast and can be accessed at PBF Logistics' website, http://www.pbflogistics.com. The call can also be accessed by dialing (877) 830-2590 or (785) 424-1737, conference ID: PBFXQ419. The audio replay will be available two hours after the end of the call through February 27, 2020, by dialing (800) 723-0544 or (402) 220-2656.

Forward-Looking Statements
This press release contains forward-looking statements (as that term is defined under the federal securities laws) made by the Partnership and its management. Such statements are based on current expectations, forecasts and projections, including, but not limited to, anticipated financial and operating results, plans, objectives, expectations and intentions that are not historical in nature. Forward-looking statements should not be read as a guarantee of future performance or results, and may not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. Forward-looking statements are based on information available at the time, and are subject to various risks and uncertainties, including risks relating to the securities markets generally, the impact of adverse market conditions impacting PBFX's logistics and other assets and other risks inherent in PBFX's business including but not limited to our ability to consummate potential acquisitions, the timing for the closing of any such acquisition and our plans for financing any acquisition; unforeseen liabilities associated with any potential acquisition; inability to successfully integrate acquired assets or other acquired businesses or operations; effects of existing and future laws and governmental regulations, including environmental, health and safety regulations; and various other factors. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see PBFX's filings with the Securities and Exchange Commission. Forward-looking statements reflect information, facts and circumstances only as of the date they are made. PBFX assumes no responsibility or obligation to update forward-looking statements except as may be required by law.

PBF Logistics LP
PBF Logistics LP, headquartered in Parsippany, New Jersey, is a fee-based, growth-oriented master limited partnership formed by PBF Energy Inc. to own or lease, operate, develop and acquire crude oil and refined petroleum products terminals, pipelines, storage facilities and similar logistics assets.

Results of Operations (Unaudited)

Factors Affecting Comparability

The following tables present our results of operations, related operational information and reconciliations of net income and net cash provided by operating activities to our EBITDA, EBITDA attributable to PBFX, Adjusted EBITDA and distributable cash flow (each as defined below) for the three months and years ended December 31, 2019 and 2018. The financial information presented contains our financial results and the results of the Development Assets (as defined below) prior to the Development Assets Acquisition (as defined below) on July 31, 2018.

On October 1, 2018, we acquired from Crown Point International, LLC, 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 (the "East Coast Storage Assets") located on the Delaware River near Paulsboro, New Jersey (the "East Coast Storage Assets Acquisition"). In connection with the acquisition, the purchase and sale agreement includes an earn-out provision related to an existing commercial agreement with a third party, based on the future results of certain of the acquired idled assets, which recommenced operations in October 2019.

On April 24, 2019, we entered into a Contribution Agreement with PBF Energy Company LLC ("PBF LLC"), pursuant to which PBF LLC contributed to us all of the issued and outstanding limited liability company interests of TVP Holding Company LLC ("TVP Holding"), which held the remaining 50% equity interest in Torrance Valley Pipeline Company LLC ("TVPC"), for total consideration of $200.0 million (the "TVPC Acquisition"). Subsequent to the closing of the TVPC Acquisition on May 31, 2019, we own 100% of the equity interest in TVPC.

On April 24, 2019, we entered into subscription agreements to sell an aggregate of 6,585,500 common units to certain institutional investors in a registered direct public offering (the "2019 Registered Direct Offering") for gross proceeds of approximately $135.0 million. The 2019 Registered Direct Offering closed on April 29, 2019.

On February 28, 2019, we closed on the transaction contemplated by the Equity Restructuring Agreement with PBF LLC and PBF Logistics GP LLC, our general partner, pursuant to which our incentive distribution rights ("IDRs") held by PBF LLC were canceled and converted into 10,000,000 newly issued PBFX common units (the "IDR Restructuring"). Subsequent to the closing of the IDR Restructuring, no distributions were made to PBF LLC with respect to the IDRs, and the newly issued PBFX common units are entitled to normal distributions.

On July 31, 2018, we acquired from PBF LLC all of the issued and outstanding limited liability company interests of: Toledo Rail Logistics Company LLC, whose assets consist of a loading and unloading rail facility located at PBF Holding Company LLC's ("PBF Holding") Toledo Refinery (the "Toledo Rail Products Facility"); Chalmette Logistics Company LLC, 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, 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, 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 "Development Assets Acquisition"). In connection with the Development Assets Acquisition, we entered into various commercial agreements with PBF Holding and assumed an existing commercial agreement with a third party.

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, 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. (the "Knoxville Terminals Purchase").

The Development Assets Acquisition was a transfer between entities under common control. Accordingly, our financial information contained herein has been retrospectively adjusted to include the historical results of the Development Assets as if they were owned by us for all periods presented. The results of the Development Assets are included in the Transportation and Terminaling segment.

As a result of the factors above, the information included in the following tables is not necessarily comparable on a year-over-year basis.

Non-GAAP Financial Measures

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, amortization and change in contingent consideration. 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, amortization and change in contingent consideration attributable to PBFX, which excludes the results of acquisitions from PBF LLC prior to the effective dates of such transactions and earnings attributable to the CPI earn-out. We define Adjusted EBITDA as EBITDA attributable to PBFX excluding acquisition and transaction costs, non-cash unit-based compensation expense and items that meet the conditions of unusual, infrequent and/or non-recurring charges. 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. We use distributable cash flow to calculate a measure we refer to as our coverage ratio. Our coverage ratio is calculated by dividing distributable cash flow by our total distribution declared. EBITDA, EBITDA attributable to PBFX, Adjusted EBITDA and distributable cash flow are not presentations made in accordance with U.S. generally accepted accounting principles ("GAAP").

While EBITDA, EBITDA attributable to PBFX, Adjusted EBITDA and distributable cash flow are not presentations made in accordance with GAAP, they are 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, EBITDA attributable to PBFX and Adjusted EBITDA provides useful information to investors in assessing our financial condition and results of operations and assists in evaluating our ongoing operating performance for current and comparative periods. We believe that the presentation of distributable cash flow provides useful information to investors as it is a widely accepted financial indicator used by investors to compare partnership performance and it provides investors with another perspective of the operating performance of our assets and the cash our business is generating. However, EBITDA, EBITDA attributable to PBFX, Adjusted EBITDA and distributable cash flow should not be considered alternatives to net income, income from operations, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP.

EBITDA, EBITDA attributable to PBFX, Adjusted EBITDA 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. EBITDA, EBITDA attributable to PBFX, Adjusted EBITDA and distributable cash flow are reconciled to their most directly comparable financial measures calculated and presented in accordance with GAAP in the Earnings Release Tables included herein.

These non-GAAP financial measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other partnerships, because they may be defined differently by other partnerships in our industry, thereby limiting their utility.

SOURCE PBF Logistics LP