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PBF Logistics Increases Quarterly Distribution to $0.4950 per Unit and Announces Second Quarter 2018 Earnings Results

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PBF Logistics Increases Quarterly Distribution to $0.4950 per Unit and Announces Second Quarter 2018 Earnings Results

- Second quarter net income attributable to the limited partners of $16.7 million, or $0.39 per common unit, net of the General Partner interest, and EBITDA attributable to PBFX of $36.1 million

- Fifteenth consecutive quarterly distribution increase to $0.4950 per unit, representing a 65% increase to the Partnership's minimum quarterly distribution

- Announces successful revolving credit facility refinancing and upsizing to $500 million

- Highlights July and April acquisitions for $243 million, at a combined 7.1x expected annualized run-rate EBITDA multiple

PR Newswire

PARSIPPANY, N.J., Aug. 2, 2018 /PRNewswire/ -- PBF Logistics LP (NYSE:PBFX, the ", Partnership", )) today announced second quarter 2018 net income attributable to the limited partners of $16.7 million, or $0.39 per common unit, net of the General Partner interest. During the quarter, the Partnership generated cash from operations of approximately $23.3 million, earnings before interest, income taxes, depreciation, and amortization ("EBITDA") of $36.1 million and distributable cash flow of $28.1 million. Included in our general and administrative expenses for the second quarter are $2.6 million, or $0.07 per common unit, of expenses related to incremental stock-based compensation and transaction-related expenses.

PBF Logistics Logo (PRNewsfoto/PBF Logistics LP)

"Our base business remains strong and our growing asset base is performing well.  On July 31, we completed the drop-down transaction with PBF Energy as announced in April, and earlier in July we announced the agreement to acquire the East Coast Storage Assets," said PBF Logistics GP LLC Executive Vice President Matt Lucey. "Our active business development efforts have generated these accretive transactions and we see additional attractive opportunities to continue the growth of the Partnership and, ultimately, reward our unitholders."

As of June 30, 2018, the Partnership had approximately $291.7 million of liquidity, including approximately $19.7 million in cash and cash equivalents, and access to approximately $272.0 million under its revolving credit facility.

PBF Logistics announces successful closing of upsized $500 million credit facility
PBF Logistics LP announced today that it and certain of its subsidiaries' have entered into an amended and extended five-year revolving credit facility. Commitments under the facility have increased from $360 million to $500 million. The credit facility will be used for acquisitions and other general partnership purposes.

The Partnership's Chief Financial Officer Erik Young said, "This successful syndication demonstrates the growth and development of our business and we thank our lending partners for their commitment to PBF Logistics. Our upsized, five-year credit facility provides us with incremental liquidity and increased financial flexibility that will help fund our disciplined growth strategy."

Wells Fargo Bank is the Administrative Agent for the 20-bank syndicate participating in the facility. Wells Fargo Securities, LLC, BNP Paribas, Citigroup Global Markets Inc., MUFG Union Bank, N.A., Natixis and RBC Capital Markets acted as Joint Lead Arrangers and Joint Bookrunners. BNP Paribas, Citigroup Global Markets Inc., MUFG Union Bank, N.A., Natixis and RBC Capital Markets acted as Co-Syndication Agents.

East Coast Storage Assets Acquisition and Drop-downs
On July 17, 2018, The Partnership announced that it has entered into an agreement to purchase CPI Operations LLC, whose assets include a storage facility and other idled assets located on the Delaware River near Paulsboro, New Jersey (the "East Coast Storage Assets").  The acquisition of the East Coast Storage Assets, combined together with the transactions announced on April 16, 2018, which closed on July 31, 2018, the Partnership expects to achieve annualized run-rate EBITDA of approximately $34 million for a total investment of approximately $243 million, inclusive of related capital projects.

The East Coast Storage Assets include a storage facility with approximately four million barrels of multi-use storage capacity (of which over 50 percent is heated storage), an Aframax-capable marine facility, a rail facility, a truck terminal, equipment, contracts and other assets.  With close proximity to the Paulsboro refinery, the assets are expected to provide synergy opportunities with the Partnership's sponsor, PBF Energy. The total consideration for the assets is $107.0 million, which is comprised of an initial payment at closing of $75.0 million with the balance being payable one year after closing. Following closing, the Partnership expects to invest approximately $8.5 million over the next two years in projects to enhance facility capabilities and expects to achieve run-rate EBITDA of $15.5 million at the end of 2020. The transaction is expected to close in the fourth quarter subject to customary regulatory and other approvals.

PBF Logistics Announces Increased Quarterly Distribution
The board of directors of PBF Logistics GP LLC, the Partnership's general partner, declared a regular quarterly cash distribution of $0.4950 per common unit. The distribution is payable on August 30, 2018, to unitholders of record at the close of business on August 15, 2018.

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
PBFX Reconciliation of Amounts under U.S. GAAP to annualized run-rate EBITDA (unaudited, in millions)

Reconciliation of East Coast Storage Assets, Knoxville Terminals, drop-down assets and associated projects Forecasted Net Income to annualized run-rate EBITDA:

 

(in millions)

Knoxville
Terminals &
Drop-down
Assets


East Coast
Storage Assets


Total

Forecasted net income

$

10.4


$

6.1


$

16.5

Add: Depreciation and amortization expense


3.8



4.5



8.3

Add: Interest expense, net and other financing costs


3.9



4.9



8.8

Annualized run-rate EBITDA

$

18.1


$

15.5


$

33.6

 

Annualized run-rate EBITDA for the Knoxville Terminals, drop-down assets and the East Coast Storage Assets assumes the completion of all related capital projects and full run-rate throughput. The identified organic growth capital projects associated with each of the acquisitions are capable of generating incremental revenue for PBFX above the acquired base assets. Upon completion of the organic projects, run-rate annualized EBITDA is expected to be approximately $33.6 million, which will be supported by long-term agreements with PBF Energy. The organic projects and the execution of the related contracts are expected to be completed with the assets operating at full run-rate volumes as follows: a) the organic projects associated with the drop-down assets by the end of 2018; b) the Knoxville Terminals by the end of 2019; and c) the East Coast Storage Assets by the end of 2020. The Knoxville Terminals, drop-down assets, the East Coast Storage Assets and the organic growth capital projects are included in the run-rate EBITDA for a full year period.

The Partnership defines EBITDA as net income (loss) before net interest expense, income tax expense, depreciation and amortization expense. EBITDA is a non-GAAP supplemental financial measure 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 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 returns on investment of various investment opportunities.

The Partnership's management believes that the presentation of EBITDA provides useful information to investors in assessing our financial condition and results of operations. EBITDA should not be considered an alternative to net income, income from operations, cash from operations or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA has important limitations as an analytical tool because it excludes some, but not all, items that affect net income. Additionally, because EBITDA may be defined differently by other companies in our industry, our definition of EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.

Conference Call Information
The Partnership's senior management will host a conference call and webcast regarding quarterly results and other business matters on Thursday, August 2, 2018, 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 (866) 342-8591 or (203) 518-9822, conference ID: PBFXQ218. The audio replay will be available two hours after the end of the call through August 16, 2018, by dialing (800) 688-9445 or (402) 220-1371.

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, the possibility that the Partnership may not consummate the proposed acquisitions, the Partnership's plans for financing the proposed acquisitions, and other risks inherent in PBFX's business. 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 including its most recent Annual Report on Form 10-K and its Quarterly Report on Form 10-Q. Forward-looking statements reflect information, facts and circumstances only as of the date they are made. The Partnership 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 EBITDA and distributable cash flow (both as defined below) of PBFX for the three and six months ended June 30, 2018 and 2017. The financial information presented contains the financial results of PBFX and PNGPC (as defined below) prior to the PNGPC Acquisition (as defined below) on February 28, 2017.

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 and Plantation pipeline systems and truck loading facilities (the "Knoxville Terminals") from Cummins Terminals, Inc. (the "Knoxville Terminals Purchase").

Effective January 1, 2018, our wholly-owned subsidiary, Delaware City Terminaling Company LLC, and PBF Holding Company LLC ("PBF Holding") amended the commercial agreements relating to our Delaware City rail unloading assets with the service fees thereunder being adjusted, including the addition of an ancillary fee paid by PBF Holding on an actual cost basis (the "Amended and Restated Rail Agreements").

On April 17, 2017, our wholly-owned subsidiary, PLPT, acquired the Toledo, Ohio refined products terminal assets (the "Toledo Products Terminal") from Sunoco Logistics Partners L.P. (the "Toledo Products Terminal Acquisition"). The Toledo Products Terminal is directly connected to, and currently supplied by, PBF Holding's Toledo Refinery. The Toledo Products Terminal is comprised of a ten-bay truck rack and  chemicals, clean product and additive storage capacity.

On February 28, 2017, our wholly-owned subsidiary, PBFX Operating Company LLC ("PBFX Op Co"), acquired from PBF Energy Company LLC ("PBF LLC"), a subsidiary of PBF Energy Inc. ("PBF Energy"), all of the issued and outstanding limited liability company interests of Paulsboro Natural Gas Pipeline Company LLC ("PNGPC") (the "PNGPC Acquisition"). In connection with the PNGPC Acquisition, we constructed a new 24" natural gas pipeline to replace the existing interstate pipeline, which commenced services in August 2017 (the "Paulsboro Natural Gas Pipeline"). Concurrent with commencement of operations of the Paulsboro Natural Gas Pipeline, a new service agreement was entered into between PNGPC and Paulsboro Refining Company LLC ("PRC").

In November 2017, we completed construction of a new crude storage tank at PBF Holding's Chalmette Refinery (the "Chalmette Storage Tank"). Our wholly-owned subsidiary, PBFX Op Co, began providing storage services to PBF Holding in November 2017 for usage of the Chalmette Storage Tank under a ten-year storage services agreement (the "Chalmette Storage Services Agreement").

The PNGPC Acquisition was a transfer between entities under common control. Accordingly, PBFX's financial information contained herein has been retrospectively adjusted to include the historical results of PNGPC as if it was owned by the Partnership for all periods presented. The results of PNGPC 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, income tax expense, depreciation and amortization expense. We define EBITDA attributable to PBFX as net income (loss) attributable to PBFX before net interest expense, income tax expense, depreciation and amortization expense attributable to PBFX, which excludes the results of acquisitions from PBF LLC 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 net cash paid for interest, maintenance capital expenditures 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 distributable cash flow divided by total distribution declared. EBITDA, EBITDA attributable to PBFX and distributable cash flow are not presentations made in accordance with U.S. generally accepted accounting principles ("GAAP").

While EBITDA, EBITDA attributable to PBFX and distributable cash flow are not presentations made in accordance with GAAP, they are supplemental financial measures that management and external users of our condensed 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 returns on investment of 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 provides useful information to investors as it is a widely accepted financial indicator used by investors to compare partnership performance, as 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 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. EBITDA, EBITDA attributable to PBFX 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.

 

 

PBF LOGISTICS LP

EARNINGS RELEASE TABLES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except unit and per unit data)





Three Months Ended
June 30,


Six Months Ended
June 30,

2018


2017


2018


2017

Revenue (a):









Affiliate

$

63,785



$

58,355



$

124,649



$

114,557



Third-party

3,613



3,974



6,788



8,249


Total revenue

67,398



62,329



131,437



122,806










Costs and expenses:









Operating and maintenance expenses (a)

19,111



15,504



37,159



31,273



General and administrative expenses

6,488



6,098



10,779



9,413



Depreciation and amortization

6,919



5,710



13,414



11,062


Total costs and expenses

32,518



27,312



61,352



51,748










Income from operations

34,880



35,017



70,085



71,058










Other expense:









Interest expense, net

(10,029)



(7,509)



(19,614)



(15,077)



Amortization of loan fees and debt premium

(396)



(377)



(759)



(793)


Net income

24,455



27,131



49,712



55,188



Less: Net loss attributable to Predecessor







(150)



Less: Net income attributable to noncontrolling interest (g)

4,363



3,820



8,385



7,419


Net income attributable to the partners

20,092



23,311



41,327



47,919



Less: Net income attributable to the IDR holder

3,415



2,107



6,370



3,793


Net income attributable to PBF Logistics LP unitholders

$

16,677



$

21,204



$

34,957



$

44,126










Net income per limited partner unit (h):









Common units - basic

$

0.39



$

0.49



$

0.83



$

1.04



Common units - diluted

0.39



0.49



0.83



1.04



Subordinated units - basic and diluted



0.52





1.07










Weighted-average limited partner units outstanding (h):









Common units - basic

42,231,119



31,428,577



42,176,202



28,784,479



Common units - diluted

42,294,616



31,485,563



42,190,136



28,788,463



Subordinated units - basic and diluted



10,649,228





13,253,423











Cash distribution declared per unit (e)

$

0.4950



$

0.4700



$

0.9850



$

0.9300










See Footnotes to Earnings Release Tables

 

 

PBF LOGISTICS LP

EARNINGS RELEASE TABLES

KEY OPERATING AND FINANCIAL INFORMATION

(Unaudited, amounts in thousands except as indicated)









Three Months Ended
June 30,


Six Months Ended
June 30,

2018


2017


2018


2017

Transportation and Terminaling Segment








Terminals








   Total throughput (barrels per day ("bpd")) (b)(d)

268,430



223,639



255,973



209,618


   Lease tank capacity (average lease capacity barrels
   per month)

1,589,784



2,374,420



1,869,693



2,250,314


Pipelines








   Total throughput (bpd) (b)(d)

166,900



121,532



159,868



133,694


   Lease tank capacity (average lease capacity barrels
   per month)

1,574,740



750,597



1,555,930



1,060,197










Storage Segment








   Storage capacity reserved (average shell capacity
   barrels per month)

4,412,673



3,787,736



4,445,714



3,739,838










Cash Flow Information:








Net cash provided by (used in):








   Operating activities

$

23,314



$

36,856



$

67,370



$

90,653


   Investing activities

(59,568)



3,136



(63,521)



(16,361)


   Financing activities

33,926



(29,768)



(3,832)



(87,459)


      Net change in cash

$

(2,328)



$

10,224



$

17



$

(13,167)










Other Financial Information:








   EBITDA attributable to PBFX (c)

$

36,070



$

35,552



$

72,387



$

72,022


   Distributable cash flow (c)

$

28,100



$

30,543



$

54,346



$

59,137


   Quarterly distribution declared per unit (e)

$

0.4950



$

0.4700



$

0.9850



$

0.9300


   Distributions (e):








      Common units

$

22,800



$

20,000



$

43,770



$

32,272


      Subordinated units - PBF LLC







7,308


      IDR holder - PBF LLC

3,415



2,107



6,370



3,793


         Total distributions

$

26,215



$

22,107



$

50,140



$

43,373


         Coverage ratio (c)

1.07x



1.38x



1.08x



1.36x


Capital expenditures, including acquisitions

$

59,568



$

36,918



$

63,521



$

56,385





















See Footnotes to Earnings Release Tables

 

 

PBF LOGISTICS LP

EARNINGS RELEASE TABLES

KEY OPERATING AND FINANCIAL INFORMATION

(Unaudited, in thousands)



June 30,


December 31,

Balance Sheet Information:

2018


2017

   Cash and cash equivalents (f)

$

19,681



$

19,664


   Property, plant and equipment, net

710,412



673,823


   Total assets

777,756



737,550


   Total debt (f)

603,581



548,793


   Total liabilities

627,012



580,455


   Partners' equity

(18,294)



(14,808)


   Noncontrolling interest (g)

169,038



171,903


   Total liabilities and equity

777,756



737,550









See Footnotes to Earnings Release Tables

 

 

PBF LOGISTICS LP

EARNINGS RELEASE TABLES

RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP

TO EBITDA AND DISTRIBUTABLE CASH FLOW

(Unaudited, in thousands)









Three Months Ended
June 30,


Six Months Ended
June 30,

2018


2017


2018


2017

Reconciliation of net income to EBITDA and
distributable cash flow (c):









 Net income

$

24,455



$

27,131



$

49,712



$

55,188




Interest expense, net

10,029



7,509



19,614



15,077




Amortization of loan fees and debt premium

396



377



759



793




Depreciation and amortization

6,919



5,710



13,414



11,062



 EBITDA

41,799



40,727



83,499



82,120




Less: Predecessor EBITDA







(40)




Less: Noncontrolling interest EBITDA (g)

5,729



5,175



11,112



10,138



 EBITDA attributable to PBFX

36,070



35,552



72,387



72,022




Non-cash unit-based compensation expense

2,663



3,028



3,497



3,708




Cash interest

(10,049)



(7,866)



(19,629)



(15,617)




Maintenance capital expenditures attributable to PBFX

(584)



(171)



(1,909)



(976)



 Distributable cash flow

$

28,100



$

30,543



$

54,346



$

59,137










Reconciliation of net cash provided by operating
activities to EBITDA and distributable cash flow (c):









 Net cash provided by operating activities

$

23,314



$

36,856



$

67,370



$

90,653



Change in operating assets and liabilities

11,119



(610)



12



(19,902)




Interest expense, net

10,029



7,509



19,614



15,077




Non-cash unit-based compensation expense

(2,663)



(3,028)



(3,497)



(3,708)



 EBITDA

41,799



40,727



83,499



82,120




Less: Predecessor EBITDA







(40)




Less: Noncontrolling interest EBITDA (g)

5,729



5,175



11,112



10,138



 EBITDA attributable to PBFX

36,070



35,552



72,387



72,022




Non-cash unit-based compensation expense

2,663



3,028



3,497



3,708




Cash interest

(10,049)



(7,866)



(19,629)



(15,617)




Maintenance capital expenditures attributable to PBFX

(584)



(171)



(1,909)



(976)



 Distributable cash flow

$

28,100



$

30,543



$

54,346



$

59,137










See Footnotes to Earnings Release Tables

 

 

PBF LOGISTICS LP

EARNINGS RELEASE TABLES

SEGMENT FINANCIAL INFORMATION

(Unaudited, in thousands)












Three Months Ended June 30, 2018



Transportation
and
Terminaling


Storage


Corporate


Consolidated
Total

Total revenue (a)


$

60,432



$

6,966



$



$

67,398


Depreciation and amortization expense


5,994



925





6,919


Income (loss) from operations


37,318



4,050



(6,488)



34,880


Interest expense, net and amortization of
loan fees and debt premium






10,425



10,425


Capital expenditures, including the
Knoxville Terminals Purchase


59,566



2





59,568













Three Months Ended June 30, 2017



Transportation
and
Terminaling


Storage


Corporate


Consolidated
Total

Total revenue (a)


$

56,603



$

5,726



$



$

62,329


Depreciation and amortization expense


5,090



620





5,710


Income (loss) from operations


37,788



3,327



(6,098)



35,017


Interest expense, net and amortization of
loan fees and debt premium






7,886



7,886


Capital expenditures, including the Toledo
Products Terminal Acquisition


32,540



4,378





36,918













Six Months Ended June 30, 2018



Transportation
and
Terminaling


Storage


Corporate


Consolidated
Total

Total revenue (a)


$

117,402



$

14,035



$



$

131,437


Depreciation and amortization expense


11,564



1,850





13,414


Income (loss) from operations


72,823



8,041



(10,779)



70,085


Interest expense, net and amortization of l
oan fees and debt premium






20,373



20,373


Capital expenditures, including the Knoxville
Terminals Purchase


63,433



88





63,521













Six Months Ended June 30, 2017



Transportation
and
Terminaling


Storage


Corporate


Consolidated
Total

Total revenue (a)


$

111,542



$

11,264



$



$

122,806


Depreciation and amortization expense


9,841



1,221





11,062


Income (loss) from operations


73,894



6,577



(9,413)



71,058


Interest expense, net and amortization of
loan fees and debt premium






15,870



15,870


Capital expenditures, including the Toledo
Products Terminal Acquisition


47,833



8,552





56,385










Balance at June 30, 2018



Transportation
and
Terminaling


Storage


Corporate


Consolidated
Total

Total assets


$

684,582



$

84,489



$

8,685



$

777,756













Balance at December 31, 2017



Transportation
and
Terminaling


Storage


Corporate


Consolidated
Total

Total assets


$

639,310



$

86,760



$

11,480



$

737,550











See Footnotes to Earnings Release Tables

 

 

 

PBF LOGISTICS LP

EARNINGS RELEASE TABLES

FOOTNOTES TO EARNINGS RELEASE TABLES

(Unaudited, in thousands, except per unit data)













(a)


See discussion of the factors affecting comparability noted on page 5. Our results of operations may not be comparable to the historical results of operations for the reasons described below:
 
Revenue - Effective January 1, 2018, we entered into the Amended and Restated Rail Agreements, which impacted revenue recognized related to those assets for the three and six months ended June 30, 2018.
 
On April 16, 2018, our wholly-owned subsidiary, PLPT, purchased the Knoxville Terminals, which was accounted for as a business combination. As such, there was no revenue associated with the terminals prior to our acquisition. 
 
In November 2017, the Chalmette Storage Tank was completed, and, as a result, the Chalmette Storage Services Agreement commenced. 
 
In August 2017, the Paulsboro Natural Gas Pipeline commenced service. Concurrent with the commencement of operations, a new service agreement was entered into between PNGPC and PRC regarding the Paulsboro Natural Gas Pipeline.
 
On April 17, 2017, our wholly-owned subsidiary, PLPT, acquired the Toledo Products Terminal, which was accounted for as a business combination. As such, there was no revenue associated with the terminal prior to our acquisition.
 
Operating and maintenance expenses - As a result of the Toledo Products Terminal Acquisition, the PNGPC Acquisition, commencement of operations of the Chalmette Storage Tank and the Knoxville Terminals Purchase, our operating expenses are not comparative to prior periods due to expenses associated with these acquired assets.













(b)


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













(c)


See "Non-GAAP Financial Measures" on page 6 for definitions of EBITDA, EBITDA attributable to PBFX, distributable cash flow and coverage ratio.













(d)


Operating information pertains to assets which are included in the Transportation and Terminaling segment. Throughput information reflects activity subsequent to execution of the commercial agreements in connection with the acquisitions of the Toledo Products Terminal, the Paulsboro Natural Gas Pipeline and the Knoxville Terminals.




(e)


On August 2, 2018, we announced a quarterly cash distribution of $0.4950 per limited partner unit based on the results of the second quarter of 2018. The distribution is payable on August 30, 2018 to PBFX unitholders of record at the close of business on August 15, 2018. The total distribution amounts include the expected distributions to be made related to second quarter earnings.













(f)


Management also utilizes net debt as a metric in assessing our leverage. Net debt is a non-GAAP measure calculated by subtracting cash and cash equivalents from total debt. We believe this measurement is also useful to investors since we have the ability to and may decide to use a portion of our cash and cash equivalents to retire or pay down our debt. This non-GAAP financial measure should not be considered in isolation or as a substitute for analysis of our debt levels as reported under GAAP. Our definition of net debt may not be comparable to similarly titled measures of other partnerships, because it may be defined differently by other partnerships in our industry, thereby limiting its utility. Our net debt as of June 30, 2018 and December 31, 2017 was $583,900 and $529,129, respectively.













(g)


Our subsidiary, PBFX Op Co, holds a 50% controlling interest in Torrance Valley Pipeline Company LLC ("TVPC"), with the other 50% interest in TVPC owned by TVP Holding Company LLC ("TVP Holding"), an indirect subsidiary of PBF Holding. PBFX Op Co is also the sole managing member of TVPC. We, through our ownership of PBFX Op Co, consolidate the financial results of TVPC, and record a noncontrolling interest for the economic interest in TVPC held by TVP Holding. Noncontrolling interest on the condensed 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 condensed consolidated balance sheets includes the portion of net assets of TVPC attributable to TVP Holding.













(h)


PBFX bases its calculation of net income per limited partner unit on the weighted-average number of limited partner units outstanding during the period and the amount of available cash that has been or will be distributed to the general partner, limited partners and IDR holders for that reporting period. The weighted-average number of common and subordinated units reflects the conversion of all outstanding subordinated units to common units on June 1, 2017.

 

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SOURCE PBF Logistics LP

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