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

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.

"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:

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.

SOURCE PBF Logistics LP

Related Links

http://www.pbflogistics.com

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