Delaware | 001-35764 | 45-3763855 | ||
Delaware | 333-206728-02 | 61-1622166 | ||
Delaware | 333-186007 | 27-2198168 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
Item 9.01 | Financial Statements and Exhibits. |
(a) | Financial Statements of Business Acquired. |
(b) | Pro Forma Financial Information. |
(d) | Exhibits. |
Exhibit No. | Description | |
99.1 | Unaudited pro forma consolidated financial statements of PBF Energy and supplemental EBITDA information for Chalmette Refining as of and for the nine months ended September 30, 2015 and for the year ended December 31, 2014. | |
99.2 | Unaudited pro forma consolidated financial statements of PBF LLC and supplemental EBITDA information for Chalmette Refining as of and for the nine months ended September 30, 2015 and for the year ended December 31, 2014. |
PBF Energy Inc. (Registrant) | |||
Date: December 22, 2015 | By: | /s/ Erik Young | |
Name: | Erik Young | ||
Title: | Senior Vice President, Chief Financial Officer | ||
PBF Energy Company LLC (Registrant) | |||
Date: December 22, 2015 | By: | /s/ Erik Young | |
Name: | Erik Young | ||
Title: | Senior Vice President, Chief Financial Officer | ||
PBF Holding Company LLC (Registrant) | |||
Date: December 22, 2015 | By: | /s/ Erik Young | |
Name: | Erik Young | ||
Title: | Senior Vice President, Chief Financial Officer |
Exhibit No. | Description | |
99.1 | Unaudited pro forma consolidated financial statements of PBF Energy and supplemental EBITDA information for Chalmette Refining as of and for the nine months ended September 30, 2015 and for the year ended December 31, 2014. | |
99.2 | Unaudited pro forma consolidated financial statements of PBF LLC and supplemental EBITDA information for Chalmette Refining as of and for the nine months ended September 30, 2015 and for the year ended December 31, 2014. |
• | the closing of the Chalmette Acquisition and its associated impact on our balance sheet and statement of operations including borrowings under our Revolving Loan to fund the acquisition; |
• | distributions and dividends made subsequent to September 30, 2015; |
• | the October 2015 Equity Offering; and |
• | the consummation of the offering of the 2023 Notes. |
• | the closing of the Chalmette Acquisition and its associated impact on our statement of operations including borrowings under our Revolving Loan to fund the acquisition; |
• | the consummation of the secondary offerings and the associated impact on income tax expense, the net income attributable to PBF Energy and the noncontrolling interest; |
• | the consummation of the offering of the PBFX Senior Notes and corresponding repayment of borrowings under the PBFX Revolving Credit Facility; and |
• | the consummation of the offering of the 2023 Notes. |
Unaudited Pro Forma Consolidated Balance Sheet | |||||||||||||||||||||||||||
As of September 30, 2015 | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Historical | Pro Forma Effect of Accounting Changes (Note 1) | Adjusted Pro Forma Chalmette | Pro Forma Acquisition Adjustments | Other Pro Forma Adjustments | Pro Forma Consolidated | ||||||||||||||||||||||
PBF Energy | Chalmette | ||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | 472,829 | $ | 177,291 | $ | — | $ | 177,291 | $ | (547,874 | ) | (3) | $ | 344,021 | (5) | $ | 896,638 | ||||||||||
490,000 | (6) | ||||||||||||||||||||||||||
(39,629 | ) | (7) | |||||||||||||||||||||||||
Accounts receivable | 395,624 | 92,327 | — | 92,327 | (89,741 | ) | (3) | — | 398,210 | ||||||||||||||||||
Inventories | 1,101,182 | 252,841 | — | 252,841 | 6,496 | (3) | — | 1,360,519 | |||||||||||||||||||
Deferred tax asset | 262,542 | — | — | — | — | — | 262,542 | ||||||||||||||||||||
Prepaid expense and other current assets | 71,398 | 127,971 | — | 127,971 | (131,758 | ) | (3) | — | 67,611 | ||||||||||||||||||
Total current assets | 2,303,575 | 650,430 | — | 650,430 | (762,877 | ) | 794,392 | 2,985,520 | |||||||||||||||||||
Property, plant and equipment, net | 1,960,149 | 325,876 | — | 325,876 | 1,086 | (3) | — | 2,287,111 | |||||||||||||||||||
Deferred tax assets | 297,783 | — | — | — | — | — | 297,783 | ||||||||||||||||||||
Marketable securities | 234,249 | — | — | — | — | — | 234,249 | ||||||||||||||||||||
Deferred charges and other assets, net | 311,420 | 4,517 | 30,156 | (2) | 34,673 | (34,673 | ) | (3) | 10,000 | (6) | 321,420 | ||||||||||||||||
Total assets | $ | 5,107,176 | $ | 980,823 | $ | 30,156 | $ | 1,010,979 | $ | (796,464 | ) | $ | 804,392 | $ | 6,126,083 | ||||||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||
Accounts payable | $ | 212,772 | $ | 1,194,689 | $ | — | $ | 1,194,689 | $ | (1,167,549 | ) | (3) | $ | — | $ | 239,912 | |||||||||||
Accrued expenses | 819,730 | — | — | — | 12,413 | 177 | (7) | 832,320 | |||||||||||||||||||
Payable to related parties pursuant to tax receivable agreement | 57,784 | — | — | — | — | — | 57,784 | ||||||||||||||||||||
Deferred revenue | 4,174 | — | — | — | — | — | 4,174 | ||||||||||||||||||||
Total current liabilities | 1,094,460 | 1,194,689 | — | 1,194,689 | (1,155,136 | ) | 177 | 1,134,190 | |||||||||||||||||||
Delaware Economic Development Authority loan | 8,000 | — | — | — | — | — | 8,000 | ||||||||||||||||||||
Long-term debt | 1,373,122 | — | — | — | 170,000 | (3) | 500,000 | (6) | 2,043,122 | ||||||||||||||||||
Payable to related parties pursuant to tax receivable agreement | 677,592 | — | — | — | — | — | 677,592 | ||||||||||||||||||||
Other long-term liabilities | 63,032 | 1,565 | — | 1,565 | (1,565 | ) | (3) | — | 63,032 | ||||||||||||||||||
Total liabilities | 3,216,206 | 1,196,254 | — | 1,196,254 | (986,701 | ) | 500,177 | 3,925,936 | |||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||||||||||
Equity: | |||||||||||||||||||||||||||
Class A common stock | 92 | — | — | — | — | 12 | (5) | 104 | |||||||||||||||||||
Class B common stock | — | — | — | — | — | — | — | ||||||||||||||||||||
Preferred stock | — | — | — | — | — | — | — | ||||||||||||||||||||
Members' Capital | — | (220,393 | ) | 30,156 | (2) | (190,237 | ) | 190,237 | (4) | — | — | ||||||||||||||||
Treasury stock, at cost | (150,804 | ) | — | — | — | — | — | (150,804 | ) | ||||||||||||||||||
Additional paid in capital | 1,558,237 | — | — | — | — | 344,009 | (5) | 1,902,246 | |||||||||||||||||||
Retained earnings/(accumulated deficit) | 65,372 | — | — | — | — | (29,296 | ) | (7) | 36,076 | ||||||||||||||||||
Accumulated other comprehensive income/(loss) | (24,052 | ) | — | — | — | — | — | (24,052 | ) | ||||||||||||||||||
Total equity | 1,448,845 | (220,393 | ) | 30,156 | (190,237 | ) | 190,237 | 314,725 | 1,763,570 | ||||||||||||||||||
Noncontrolling interests | 442,125 | 4,962 | — | 4,962 | — | (10,510 | ) | (7) | 436,577 | ||||||||||||||||||
Total Equity | 1,890,970 | (215,431 | ) | 30,156 | (185,275 | ) | 190,237 | 304,215 | 2,200,147 | ||||||||||||||||||
Total Liabilities and Equity | $ | 5,107,176 | $ | 980,823 | $ | 30,156 | $ | 1,010,979 | $ | (796,464 | ) | $ | 804,392 | $ | 6,126,083 |
1. | We performed certain procedures for the purpose of identifying any material differences in significant accounting policies between PBF Energy and Chalmette Refining and any accounting adjustments that would be required in connection with adopting uniform policies. Procedures performed by PBF Energy included a review of the summary of significant accounting policies disclosed in Chalmette Refining’s audited financial statements and discussions with Chalmette Refining’s management regarding their significant accounting policies in order to identify material adjustments. While we are continuing to engage in additional discussions with Chalmette Refining’s management and are in the process of evaluating the impact of Chalmette Refining’s accounting policies on its historical results following the close of the acquisition on November 1, 2015, our best estimate of the differences we have identified to date are included in Note 2 and Note 8 below. |
2. | Reflects the estimated impact of reversing refinery turnaround costs expensed by Chalmette Refining from January 1, 2014 through September 30, 2015 in accordance with their historical accounting policy and adjusted based on PBF Energy’s accounting policy which is to capitalize refinery turnaround costs incurred in connection with planned major maintenance activities and subsequently amortize such costs on a straight line basis over the period of time estimated to lapse until the next turnaround occurs (generally 3 to 5 years). |
3. | Represents cash consideration transferred of $555.1 million for the Chalmette Acquisition at closing, which was funded through cash on hand and a borrowing incurred under PBF Holding’s Revolving Loan in addition to the $10.0 million of cash that had been previously deposited and included in prepaid expense and other assets of PBF Energy, and the estimated preliminary fair value of the net assets acquired as follows: |
(in Thousands) | |||
Cash | $ | 14,500 | |
Accounts receivable | 2,586 | ||
Inventories | 259,337 | ||
Prepaid expenses and other current assets | 6,213 | ||
Property, plant and equipment | 322,000 | ||
Accounts payable and accrued expenses | (39,553 | ) | |
Estimated fair value of net assets acquired | $ | 565,083 |
Cash paid for Chalmette Acquisition | $ | (555,083 | ) |
Reversal of Chalmette Refining historical cash balance | (177,291 | ) | |
Proceeds from Revolving Loan borrowings in connection with the Chalmette Acquisition | 170,000 | ||
Acquired working capital cash in Chalmette Acquisition | 14,500 | ||
Total pro forma cash adjustment | $ | (547,874 | ) |
4. | Reflects the elimination of Chalmette Refining’s Members’ Capital Deficit in connection with PBF Energy’s initial purchase price accounting adjustments. |
5. | Represents adjustments to equity for the October 2015 Equity Offering reflecting par value for Class A common stock outstanding following the offering and related Additional paid-in capital. |
6. | Represents proceeds received from the issuance of the $500.0 million secured notes issued in connection with the 2023 Notes offering. These notes mature in 2023 and are net of estimated financing costs of $10.0 million which were capitalized and will be subsequently amortized. |
7. | Reflects the net effect on cash and cash equivalents, retained earnings and noncontrolling interest of the payment of aggregate distributions made subsequent to September 30, 2015. PBF Holding made aggregate distributions of $82.6 million to PBF LLC. PBF LLC in turn distributed $78.5 million to PBF Energy (of which $29.3 million was used to pay on November 24, 2015 its previously declared cash dividend of $0.30 per share of Class A common stock) and $4.1 million to its other members. In addition, on November 30, 2015, PBF Logistics made a distribution of $13.9 million ($0.37 per unit) to holders of its common and subordinated units and incentive distribution rights (“IDRs”), of which $7.6 million was paid to PBF LLC. The effects of these distributions and dividends on PBF Energy would decrease cash and cash equivalents by $39.6 million, increase in accrued expenses of $0.2 million, decrease retained earnings by $29.3 million and decrease noncontrolling interests by $10.5 million. |
Unaudited Pro Forma Condensed Consolidated Statement of Operations | |||||||||||||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Historical | Pro Forma Effect of Accounting Changes (Note 1) | Adjusted Pro Forma Chalmette | Pro Forma Acquisition Adjustments | Other Pro Forma Adjustments | Pro Forma Condensed Consolidated | ||||||||||||||||||||||
PBF Energy | Chalmette | ||||||||||||||||||||||||||
Revenues | $ | 19,828,155 | $ | 6,857,506 | $ | — | $ | 6,857,506 | $ | — | $ | — | $ | 26,685,661 | |||||||||||||
Cost and expenses: | |||||||||||||||||||||||||||
Cost of sales, excluding depreciation | 18,471,203 | 6,673,711 | (339,961 | ) | (8) | 6,333,750 | — | — | 24,804,953 | ||||||||||||||||||
Operating expenses, excluding depreciation | 883,140 | — | 378,140 | (8) | 378,140 | — | — | 1,261,280 | |||||||||||||||||||
General and administrative expenses | 143,671 | 174,054 | (132,342 | ) | (8) | 41,712 | — | — | 185,383 | ||||||||||||||||||
Gain on sale of assets | (895 | ) | — | — | — | — | — | (895 | ) | ||||||||||||||||||
Depreciation and amortization expense | 180,382 | 49,336 | 5,483 | (8) | 54,819 | (33,022 | ) | (9) | — | 202,179 | |||||||||||||||||
19,677,501 | 6,897,101 | (88,680 | ) | 6,808,421 | (33,022 | ) | — | 26,452,900 | |||||||||||||||||||
Income (loss) from operations | 150,654 | (39,595 | ) | 88,680 | 49,085 | 33,022 | — | 232,761 | |||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||
Change in fair value of catalyst lease | 3,969 | — | — | — | — | — | 3,969 | ||||||||||||||||||||
Interest expense, net | (98,764 | ) | 299 | (48,309 | ) | (8) | (48,010 | ) | (5,831 | ) | (10) | (61,314 | ) | (12) | (213,919 | ) | |||||||||||
Income (loss) before income taxes | 55,859 | (39,296 | ) | 40,371 | 1,075 | 27,191 | (61,314 | ) | 22,811 | ||||||||||||||||||
Income tax (benefit) expense | (22,412 | ) | — | 1,991 | (8) | 1,991 | 9,898 | (11) | 20,022 | (11) | 9,499 | ||||||||||||||||
Net income (loss) | 78,271 | (39,296 | ) | 38,380 | (916 | ) | 17,293 | (81,336 | ) | 13,312 | |||||||||||||||||
Less: net income (loss) attributable to noncontrolling interests | 116,508 | 362 | — | 362 | 1,292 | (11) | (113,653 | ) | (11) | 4,509 | |||||||||||||||||
Net (loss) income attributable to PBF Energy Inc. | (38,237 | ) | (39,658 | ) | 38,380 | (1,278 | ) | 16,001 | 32,317 | 8,803 | |||||||||||||||||
Weighted-average shares of Class A common stock outstanding | |||||||||||||||||||||||||||
Basic | 74,464,494 | 27,362,188 | (13) | 101,826,682 | |||||||||||||||||||||||
Diluted | 74,464,494 | 27,879,826 | (13) | 102,344,320 | |||||||||||||||||||||||
Net (loss) income available to Class A common stock per share: | |||||||||||||||||||||||||||
Basic | (0.51 | ) | 0.09 | ||||||||||||||||||||||||
Diluted | (0.51 | ) | 0.09 |
Unaudited Pro Forma Condensed Consolidated Statement of Operations | |||||||||||||||||||||||||||
Nine Months Ended September 30, 2015 | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Historical | Pro Forma Effect of Accounting Changes (Note 1) | Adjusted Pro Forma Chalmette | Pro Forma Acquisition Adjustments | Other Pro Forma Adjustments | Pro Forma Condensed Consolidated | ||||||||||||||||||||||
PBF Energy | Chalmette | ||||||||||||||||||||||||||
Revenues | $ | 9,763,440 | $ | 3,388,258 | $ | — | $ | 3,388,258 | $ | — | $ | — | $ | 13,151,698 | |||||||||||||
Cost and expenses: | |||||||||||||||||||||||||||
Cost of sales, excluding depreciation | 8,319,404 | 2,961,695 | (196,597 | ) | (8) | 2,765,098 | — | — | 11,084,502 | ||||||||||||||||||
Operating expenses, excluding depreciation | 635,948 | — | 263,700 | (8) | 263,700 | — | — | 899,648 | |||||||||||||||||||
General and administrative expenses | 128,562 | 134,438 | (105,703 | ) | (8) | 28,735 | — | — | 157,297 | ||||||||||||||||||
Gain on sale of assets | (1,133 | ) | — | — | — | — | — | (1,133 | ) | ||||||||||||||||||
Depreciation and amortization expense | 144,401 | 38,934 | 8,224 | (8) | 47,158 | (30,810 | ) | (9) | — | 160,749 | |||||||||||||||||
Impairment | — | 405,408 | — | 405,408 | (405,408 | ) | (9) | — | — | ||||||||||||||||||
9,227,182 | 3,540,475 | (30,376 | ) | 3,510,099 | (436,218 | ) | — | 12,301,063 | |||||||||||||||||||
Income (loss) from operations | 536,258 | (152,217 | ) | 30,376 | (121,841 | ) | 436,218 | — | 850,635 | ||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||
Change in fair value of catalyst lease | 8,982 | — | — | — | — | — | 8,982 | ||||||||||||||||||||
Interest expense, net | (77,094 | ) | 109 | (36,782 | ) | (8) | (36,673 | ) | (4,373 | ) | (10) | (34,016 | ) | (12) | (152,156 | ) | |||||||||||
Income (loss) before income taxes | 468,146 | (152,108 | ) | (6,406 | ) | (158,514 | ) | 431,845 | (34,016 | ) | 707,461 | ||||||||||||||||
Income tax (benefit) expense | 151,072 | — | 1,819 | (8) | 1,819 | 103,459 | (11) | (10,384 | ) | (11) | 245,966 | ||||||||||||||||
Net income (loss) | 317,074 | (152,108 | ) | (8,225 | ) | (160,333 | ) | 328,386 | (23,632 | ) | 461,495 | ||||||||||||||||
Less: net income (loss) attributable to noncontrolling interests | 51,144 | 646 | — | 646 | 13,507 | (11) | (4,700 | ) | (11) | 60,597 | |||||||||||||||||
Net income (loss) attributable to PBF Energy Inc. | 265,930 | (152,754 | ) | (8,225 | ) | (160,979 | ) | 314,879 | (18,932 | ) | 400,898 | ||||||||||||||||
Weighted-average shares of Class A common stock outstanding: | |||||||||||||||||||||||||||
Basic | 85,401,028 | 11,500,000 | (14) | 96,901,028 | |||||||||||||||||||||||
Diluted | 91,557,371 | 11,500,000 | (14) | 103,057,371 | |||||||||||||||||||||||
Net (loss) income available to Class A common stock per share: | |||||||||||||||||||||||||||
Basic | 3.11 | 4.14 | |||||||||||||||||||||||||
Diluted | 3.06 | 4.07 |
8. | Reflects the estimated impact of reversing refinery turnaround costs expensed by Chalmette Refining from January 1, 2014 through September 30, 2015 in accordance with its historical accounting policy in order to conform to PBF Energy’s accounting policy which is to capitalize refinery turnaround costs incurred in connection with planned major maintenance activities and subsequently amortize such costs on a straight line basis over the period of time estimated to lapse until the next turnaround occurs (generally 3 to 5 years). |
9. | Represents the estimated depreciation expense resulting from the assumed fair value of property, plant and equipment acquired through the Chalmette Acquisition using a 20 year useful life for assets acquired. Also reflects the reversal of the impairment charge recorded by Chalmette Refining which would not be applicable since property, plant & equipment would be recorded at fair value in connection with the Company’s preliminary purchase price allocation. |
10. | Represents assumed interest expense incurred in connection with the $170.0 million borrowing under the Company’s Revolving Loan, which was used in part to fund the Chalmette Acquisition. |
11. | Reflects the impact on PBF Energy’s net income attributable to noncontrolling interests and income tax expense based on a noncontrolling interest of 5.9% and a tax rate of 40.2%. |
12. | Represents assumed interest expense associated with the $500.0 million of 7.00% secured notes in connection with the 2023 Notes offering and $350.0 million of 6.875% senior notes in connection with the PBFX Senior Notes offering. Also, includes a decrease in interest expenses associated with the repayment of the PBFX Revolving Credit Facility of $275.1 million. In addition, includes the assumed amortization of estimated deferred financing costs incurred in connection with the issuance of the 2023 Notes and the PBFX Senior Notes. |
13. | Includes the impact of shares issued in connection with the October 2015 Equity Offering (11,500,000 shares), treasury share activity and the dilutive effect on stock options and warrants. |
14. | Includes the impact of shares issued in connection with the October 2015 Equity Offering (11,500,000 shares). |
Nine months ended September 30, 2015 | Year ended December 31, 2014 | |||||||
Net income (loss) | $ | (152,107 | ) | $ | (39,296 | ) | ||
Add: Interest expense, net | (109 | ) | (299 | ) | ||||
Add: Depreciation amd amortization expense | 38,934 | 49,336 | ||||||
Add: Financing fees included in General and Administrative expense | 36,782 | 48,309 | ||||||
Chalmette Refining EBITDA | (76,500 | ) | 58,050 | |||||
Add: Impairment | 405,408 | — | ||||||
Chalmette Refining EBITDA excluding Impairments | $ | 328,908 | $ | 58,050 |
• | the closing of the Chalmette Acquisition and its associated impact on our balance sheet and statement of operations including borrowings under our Revolving Loan to fund the acquisition; |
• | distributions made subsequent to September 30, 2015; |
• | the contribution received from PBF Energy, PBF LLC’s parent, which was made with proceeds received in connection with PBF Energy’s October 2015 Equity Offering; and |
• | the consummation of the offering of the 2023 Notes. |
• | the closing of the Chalmette Acquisition and its associated impact on our statement of operations including borrowings under our Revolving Loan to fund the acquisition; |
• | the consummation of the offering of the PBFX Senior Notes and corresponding repayment of borrowings under the PBFX Revolving Credit Facility; and |
• | the consummation of the offering of the 2023 Notes. |
Unaudited Pro Forma Consolidated Balance Sheet | |||||||||||||||||||||||||||
As of September 30, 2015 | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Historical | Pro Forma Effect of Accounting Changes (Note 1) | Adjusted Pro Forma Chalmette | Pro Forma Acquisition Adjustments | Other Pro Forma Adjustments | Pro Forma Consolidated | ||||||||||||||||||||||
PBF LLC | Chalmette | ||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | 471,582 | $ | 177,291 | $ | — | $ | 177,291 | $ | (547,874 | ) | (3) | $ | 345,000 | (5) | $ | 896,370 | ||||||||||
490,000 | (6) | ||||||||||||||||||||||||||
(39,629 | ) | (7) | |||||||||||||||||||||||||
Accounts receivable | 395,624 | 92,327 | — | 92,327 | (89,741 | ) | (3) | — | 398,210 | ||||||||||||||||||
Inventories | 1,101,182 | 252,841 | — | 252,841 | 6,496 | (3) | — | 1,360,519 | |||||||||||||||||||
Prepaid expense and other current assets | 71,398 | 127,971 | — | 127,971 | (131,758 | ) | (3) | — | 67,611 | ||||||||||||||||||
Total current assets | 2,039,786 | 650,430 | — | 650,430 | (762,877 | ) | 795,371 | 2,722,710 | |||||||||||||||||||
Property, plant and equipment, net | 1,960,149 | 325,876 | — | 325,876 | 1,086 | (3) | — | 2,287,111 | |||||||||||||||||||
Marketable securities | 234,249 | — | — | — | — | — | 234,249 | ||||||||||||||||||||
Deferred charges and other assets, net | 311,420 | 4,517 | 30,156 | (2) | 34,673 | (34,673 | ) | (3) | 10,000 | (6) | 321,420 | ||||||||||||||||
Total assets | $ | 4,545,604 | $ | 980,823 | $ | 30,156 | $ | 1,010,979 | $ | (796,464 | ) | $ | 805,371 | $ | 5,565,490 | ||||||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||
Accounts payable | $ | 212,772 | $ | 1,194,689 | $ | — | $ | 1,194,689 | $ | (1,167,549 | ) | (3) | $ | — | $ | 239,912 | |||||||||||
Accrued expenses | 908,498 | — | — | — | 12,413 | 177 | (7) | 970,248 | |||||||||||||||||||
49,160 | (7) | ||||||||||||||||||||||||||
Deferred revenue | 4,174 | — | — | — | — | — | 4,174 | ||||||||||||||||||||
Total current liabilities | 1,125,444 | 1,194,689 | — | 1,194,689 | (1,155,136 | ) | 49,337 | 1,214,334 | |||||||||||||||||||
Delaware Economic Development Authority loan | 8,000 | — | — | — | — | — | 8,000 | ||||||||||||||||||||
Long-term debt | 1,373,122 | — | — | — | 170,000 | (3) | 500,000 | (6) | 2,043,122 | ||||||||||||||||||
Intercompany note payable | 134,358 | — | — | — | — | — | 134,358 | ||||||||||||||||||||
Other long-term liabilities | 63,119 | 1,565 | — | 1,565 | (1,565 | ) | (3) | — | 63,119 | ||||||||||||||||||
Total liabilities | 2,704,043 | 1,196,254 | — | 1,196,254 | (986,701 | ) | 549,337 | 3,462,933 | |||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||||||||||
Series B Units | 5,110 | — | — | — | — | — | 5,110 | ||||||||||||||||||||
Equity: | |||||||||||||||||||||||||||
Series A Units | 50,847 | — | — | — | — | — | 50,847 | ||||||||||||||||||||
Series C Units | 922,588 | — | — | — | — | 345,000 | (5) | 1,267,588 | |||||||||||||||||||
Members' Capital | — | (220,393 | ) | 30,156 | (2) | (190,237 | ) | 190,237 | (4) | — | — | ||||||||||||||||
Treasury stock, at cost | (150,804 | ) | — | — | — | — | — | (150,804 | ) | ||||||||||||||||||
Retained earnings/(accumulated deficit) | 702,448 | — | — | — | — | (82,590 | ) | (7) | 619,858 | ||||||||||||||||||
Accumulated other comprehensive income/(loss) | (25,561 | ) | — | — | — | — | — | (25,561 | ) | ||||||||||||||||||
Total equity | 1,499,518 | (220,393 | ) | 30,156 | (190,237 | ) | 190,237 | 262,410 | 1,761,928 | ||||||||||||||||||
Noncontrolling interests in PBFX | 336,933 | 4,962 | — | 4,962 | — | (6,376 | ) | (7) | 335,519 | ||||||||||||||||||
Total Equity | 1,836,451 | (215,431 | ) | 30,156 | (185,275 | ) | 190,237 | 256,034 | 2,097,447 | ||||||||||||||||||
Total Liabilities, Series B Units and Equity | $ | 4,545,604 | $ | 980,823 | $ | 30,156 | $ | 1,010,979 | $ | (796,464 | ) | $ | 805,371 | $ | 5,565,490 |
1. | We performed certain procedures for the purpose of identifying any material differences in significant accounting policies between PBF LLC and Chalmette Refining and any accounting adjustments that would be required in connection with adopting uniform policies. Procedures performed by PBF LLC included a review of the summary of significant accounting policies disclosed in Chalmette Refining’s audited financial statements and discussions with Chalmette Refining’s management regarding their significant accounting policies in order to identify material adjustments. While we are continuing to engage in additional discussions with Chalmette Refining’s management and are in the process of evaluating the impact of Chalmette Refining’s accounting policies on its historical results following the close of the acquisition on November 1, 2015, our best estimate of the differences we have identified to date are included in Note 2 and Note 8 below. |
2. | Reflects the estimated impact of reversing refinery turnaround costs expensed by Chalmette Refining from January 1, 2014 through September 30, 2015 in accordance with their historical accounting policy and adjusted based on PBF LLC’s accounting policy which is to capitalize refinery turnaround costs incurred in connection with planned major maintenance activities and subsequently amortize such costs on a straight line basis over the period of time estimated to lapse until the next turnaround occurs (generally 3 to 5 years). |
3. | Represents cash consideration transferred of $555.1 million for the Chalmette Acquisition at closing, which was funded through cash on hand and a borrowing incurred under PBF Holding’s Revolving Loan in addition to the $10.0 million of cash that had been previously deposited and included in prepaid expense and other assets of PBF LLC, and the estimated preliminary fair value of the net assets acquired as follows: |
(in Thousands) | |||
Cash | $ | 14,500 | |
Accounts receivable | 2,586 | ||
Inventories | 259,337 | ||
Prepaid expenses and other current assets | 6,213 | ||
Property, plant and equipment | 322,000 | ||
Accounts payable and accrued expenses | (39,553 | ) | |
Estimated fair value of net assets acquired | $ | 565,083 |
Cash paid for Chalmette Acquisition | $ | (555,083 | ) |
Reversal of Chalmette Refining historical cash balance | (177,291 | ) | |
Proceeds from Revolving Loan borrowings in connection with the Chalmette Acquisition | 170,000 | ||
Acquired working capital cash in Chalmette Acquisition | 14,500 | ||
Total pro forma cash adjustment | $ | (547,874 | ) |
4. | Reflects the elimination of Chalmette Refining’s Members’ Capital Deficit in connection with PBF LLC’s initial purchase price accounting adjustments. |
5. | Represents proceeds contributed to PBF LLC by PBF Energy in connection with PBF Energy’s October 2015 Equity Offering. |
6. | Represents proceeds received from the issuance of the $500.0 million secured notes issued in connection with the 2023 Notes offering. These notes mature in 2023 and are net of estimated financing costs of $10.0 million which were capitalized and will be subsequently amortized. |
7. | Reflects the net effect on cash and cash equivalents, retained earnings and noncontrolling interest of the payment of aggregate distributions made subsequent to September 30, 2015. PBF Holding made aggregate distributions of $82.6 million to PBF LLC. PBF LLC in turn distributed $29.3 million to PBF Energy, accrued a distribution payable of $49.2 million to PBF Energy and distributed $4.1 million to its other members. Also on November 30, 2015, PBF Logistics made a distribution of $13.9 million ($0.37 per unit) to holders of its common and subordinated units and incentive distribution rights (“IDRs”), of which $7.6 million was paid to PBF LLC. The effects of these distributions and dividends on PBF Energy would decrease cash and cash equivalents by $39.6 million, increase in accrued expenses of $49.3 million, decrease retained earnings by $82.6 million and decrease noncontrolling interests by $6.4 million. |
Unaudited Pro Forma Condensed Consolidated Statement of Operations | |||||||||||||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Historical | Pro Forma Effect of Accounting Changes (Note 1) | Adjusted Pro Forma Chalmette | Pro Forma Acquisition Adjustments | Other Pro Forma Adjustments | Pro Forma Condensed Consolidated | ||||||||||||||||||||||
PBF LLC | Chalmette | ||||||||||||||||||||||||||
Revenues | $ | 19,828,155 | $ | 6,857,506 | $ | — | $ | 6,857,506 | $ | — | $ | — | $ | 26,685,661 | |||||||||||||
Cost and expenses: | |||||||||||||||||||||||||||
Cost of sales, excluding depreciation | 18,471,203 | 6,673,711 | (339,961 | ) | (8) | 6,333,750 | — | — | 24,804,953 | ||||||||||||||||||
Operating expenses, excluding depreciation | 883,140 | — | 378,140 | (8) | 378,140 | — | — | 1,261,280 | |||||||||||||||||||
General and administrative expenses | 146,592 | 174,054 | (130,351 | ) | (8) | 43,703 | — | — | 190,295 | ||||||||||||||||||
Gain on sale of assets | (895 | ) | — | — | — | — | — | (895 | ) | ||||||||||||||||||
Depreciation and amortization expense | 180,382 | 49,336 | 5,483 | (8) | 54,819 | (33,022 | ) | (9) | — | 202,179 | |||||||||||||||||
19,680,422 | 6,897,101 | (86,689 | ) | 6,810,412 | (33,022 | ) | — | 26,457,812 | |||||||||||||||||||
Income (loss) from operations | 147,733 | (39,595 | ) | 86,689 | 47,094 | 33,022 | — | 227,849 | |||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||
Change in fair value of catalyst lease | 3,969 | — | — | — | — | — | 3,969 | ||||||||||||||||||||
Interest expense, net | (100,352 | ) | 299 | (48,309 | ) | (8) | (48,010 | ) | (5,831 | ) | (10) | (61,314 | ) | (11) | (215,507 | ) | |||||||||||
Net income (loss) | 51,350 | (39,296 | ) | 38,380 | (916 | ) | 27,191 | (61,314 | ) | 16,311 | |||||||||||||||||
Less: net income (loss) attributable to noncontrolling interests | 14,740 | 362 | — | 362 | — | (11,605 | ) | (11) | 3,497 | ||||||||||||||||||
Net (loss) income attributable to PBF Energy LLC | $ | 36,610 | $ | (39,658 | ) | $ | 38,380 | $ | (1,278 | ) | $ | 27,191 | $ | (49,709 | ) | $ | 12,814 |
Unaudited Pro Forma Condensed Consolidated Statement of Operations | |||||||||||||||||||||||||||
Nine Months Ended September 30, 2015 | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Historical | Pro Forma Effect of Accounting Changes (Note 1) | Adjusted Pro Forma Chalmette | Pro Forma Acquisition Adjustments | Other Pro Forma Adjustments | Pro Forma Condensed Consolidated | ||||||||||||||||||||||
PBF LLC | Chalmette | ||||||||||||||||||||||||||
Revenues | $ | 9,763,440 | $ | 3,388,258 | $ | — | $ | 3,388,258 | $ | — | $ | — | $ | 13,151,698 | |||||||||||||
Cost and expenses: | |||||||||||||||||||||||||||
Cost of sales, excluding depreciation | 8,319,404 | 2,961,695 | (196,597 | ) | (8) | 2,765,098 | — | — | 11,084,502 | ||||||||||||||||||
Operating expenses, excluding depreciation | 635,948 | — | 263,700 | (8) | 263,700 | — | — | 899,648 | |||||||||||||||||||
General and administrative expenses | 125,431 | 134,438 | (103,884 | ) | (8) | 30,554 | — | — | 155,985 | ||||||||||||||||||
Gain on sale of assets | (1,133 | ) | — | — | — | — | — | (1,133 | ) | ||||||||||||||||||
Depreciation and amortization expense | 144,401 | 38,934 | 8,224 | (8) | 47,158 | (30,810 | ) | (9) | — | 160,749 | |||||||||||||||||
Impairment | — | 405,408 | — | 405,408 | (405,408 | ) | (9) | — | — | ||||||||||||||||||
9,224,051 | 3,540,475 | (28,557 | ) | 3,511,918 | (436,218 | ) | — | 12,299,751 | |||||||||||||||||||
Income (loss) from operations | 539,389 | (152,217 | ) | 28,557 | (123,660 | ) | 436,218 | — | 851,947 | ||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||
Change in fair value of catalyst lease | 8,982 | — | — | — | — | — | 8,982 | ||||||||||||||||||||
Interest expense, net | (80,183 | ) | 109 | (36,782 | ) | (36,673 | ) | (4,373 | ) | (10) | (34,016 | ) | (11) | (155,245 | ) | ||||||||||||
Net income (loss) | 468,188 | (152,107 | ) | (8,225 | ) | (160,333 | ) | 431,845 | (34,016 | ) | 705,684 | ||||||||||||||||
Less: net income (loss) attributable to noncontrolling interests | 26,608 | 646 | — | 646 | — | (3,161 | ) | (11) | 24,093 | ||||||||||||||||||
Net (loss) income attributable to PBF Energy LLC | 441,580 | (152,753 | ) | (8,225 | ) | (160,979 | ) | 431,845 | (30,855 | ) | 681,591 |
8. | Reflects the estimated impact of reversing refinery turnaround costs expensed by Chalmette Refining from January 1, 2014 through September 30, 2015 in accordance with its historical accounting policy in order to conform to PBF LLC’s accounting policy which is to capitalize refinery turnaround costs incurred in connection with planned major maintenance activities and subsequently amortize such costs on a straight line basis over the period of time estimated to lapse until the next turnaround occurs (generally 3 to 5 years). |
9. | Represents the estimated depreciation expense resulting from the assumed fair value of property, plant and equipment acquired through the Chalmette Acquisition using a 20 year useful life for assets acquired. Also reflects the reversal of the impairment charge recorded by Chalmette Refining which would not be applicable since property, plant & equipment would be recorded at fair value in connection with the Company’s preliminary purchase price allocation. |
10. | Represents assumed interest expense incurred in connection with the $170.0 million borrowing under the Company’s Revolving Loan, which was used in part to fund the Chalmette Acquisition. |
11. | Represents assumed interest expense associated with the $500.0 million of 7.00% secured notes in connection with the 2023 Notes offering and $350.0 million of 6.875% unsecured notes in connection with the PBFX Senior Notes offering. Also, includes a decrease in interest expenses associated with the repayment of the PBFX Revolving Credit Facility of $275.1 million. In addition, includes the assumed amortization of estimated deferred financing costs incurred in connection with the issuance of the 2023 Notes and the PBFX Senior Notes. |
Nine months ended September 30, 2015 | Year ended December 31, 2014 | |||||||
Net income (loss) | $ | (152,107 | ) | $ | (39,296 | ) | ||
Add: Interest expense, net | (109 | ) | (299 | ) | ||||
Add: Depreciation amd amortization expense | 38,934 | 49,336 | ||||||
Add: Financing fees included in General and Administrative expense | 36,782 | 48,309 | ||||||
Chalmette Refining EBITDA | (76,500 | ) | 58,050 | |||||
Add: Impairment | 405,408 | — | ||||||
Chalmette Refining EBITDA excluding Impairments | $ | 328,908 | $ | 58,050 |