PBF Logistics Declares Quarterly Distribution of $0.30 per Unit and Announces First Quarter 2020 Earnings Results

PARSIPPANY, N.J., May 15, 2020 /PRNewswire/ -- PBF Logistics LP (NYSE:PBFX, the "Partnership") today announced first quarter 2020 net income attributable to the limited partners of $34.8 million, or $0.56 per common unit. During the quarter, the Partnership generated cash from operations of $18.6 million, EBITDA attributable to PBFX of $56.3 million, Adjusted EBITDA of $57.9 million and distributable cash flow of $40.8 million. Included in reported results for the first quarter are $1.6 million, or $0.03 per common unit, of expenses related to pending and non-consummated acquisitions, non-cash unit-based compensation and environmental remediation costs associated with the East Coast Terminals.

"PBF Logistics operated well during the first quarter and our revenues were supported by our minimum volume commitments with PBF Energy. As we navigate the new market dynamics created by the COVID-19 pandemic, we expect our revenues to remain well-supported by our long-term contracts. However, we have seen a decline in our rack volumes as a result of demand destruction but this has been partially offset by increased revenue and opportunities in our storage segment," said PBF Logistics GP LLC Executive Vice President Matt Lucey. "Additionally, we announced a distribution of $0.30 per unit today and we believe this is prudent given the uncertain outlook. Our near-term strategy is to build coverage, de-lever the business and increase financial resources to pursue identified organic projects and future external growth opportunities that may arise out of the current market turmoil."

As of March 31, 2020, the Partnership had approximately $228.3 million of liquidity, including approximately $116.0 million in cash and cash equivalents, and access to approximately $112.2 million under its revolving credit facility.

PBF Logistics Declares Quarterly Distribution
The board of directors of PBF Logistics GP LLC, the Partnership's general partner, declared a regular quarterly cash distribution of $0.30 per common unit. The distribution is payable on June 17, 2020, to unitholders of record at the close of business on May 27, 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 affiliates of PBF Energy prior to the effective dates of such transactions and earnings attributable to the CPI earn-out (the portion of earnings associated with an earn-out provision related to the purchase of CPI Operations LLC ("CPI")(the "Contingent Consideration")). 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").

For additional information on the Partnership's non-GAAP financial measures, including reconciliations to their most directly comparable financial measures calculated and presented in accordance with GAAP, refer to the supplemental information provided in "Results of Operations" and the Earnings Release Tables included herein.

Conference Call Information
The Partnership will host a conference call and webcast regarding first quarter results and other business matters on Friday, May 15, 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) 876-9176 or (785) 424-1670, conference ID: PBFXQ120. The audio replay will be available two hours after the end of the call through May 29, 2020, by dialing (800) 934-7884 or (402) 220-6987.

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 any potential future acquisitions, the Partnership's plans for financing any potential future acquisitions, the duration and severity of the COVID-19 pandemic, 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 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)

Business Developments

COVID-19

The recent outbreak of the coronavirus disease 2019 ("COVID-19") pandemic is negatively impacting worldwide economic and commercial activity and financial markets, as well as global demand for petroleum and petrochemical products. The COVID-19 pandemic and resulting governmental responses have also resulted in significant business and operational disruptions, including business closures, supply chain disruptions, travel restrictions, stay-at-home orders and limitations on the availability of workforces. While the COVID-19 pandemic is expected to adversely affect our business and operations, the full impact is unknown and rapidly evolving and the ultimate effect on our business is uncertain at this time. However, in light of the COVID-19 pandemic, we are taking necessary steps to mitigate potential adverse impacts on our business and operations as this pandemic continues, including reducing capital expenditures, decreasing operating expenses by reducing discretionary activities and third-party services and reducing our quarterly distribution. Due to the uncertainty of the full impact of the COVID-19 pandemic will have on our business, we have decided to reduce our quarterly distribution to our minimum quarterly distribution of $0.30 per unit, which represents a short term shift in our distribution strategy to build our cash flow coverage, de-lever our business and increase our financial resources as we continue to identify potential organic growth projects or strategic acquisitions. In addition, our parent sponsor and largest customer, PBF Energy, has taken similar steps to preserve liquidity and solidify its operations under the adverse market conditions caused by the COVID-19 pandemic.

The full extent to which the COVID-19 pandemic impacts our business and operations, or that of our parent sponsor, will depend on the severity, location and duration of the effects and spread of COVID-19, the actions undertaken by national, regional and local governments and health officials to contain the virus or treat its effects, related consumer responses and how quickly and to what extent economic conditions improve and normal business and operating conditions resume.

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 ended March 31, 2020 and 2019. 

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 included 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.

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 (the portion of earnings associated with an earn-out provision related to the purchase of CPI (the "Contingent Consideration")). 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 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 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

Related Links

http://www.pbflogistics.com

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