UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2018

Or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission File Number: 333-186007

Commission File Number: 333-186007-07

PBF HOLDING COMPANY LLC

PBF FINANCE CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE DELAWARE	27-2198168 45-2685067
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
One Sylvan Way, Second Floor Parsippany, New Jersey	07054
(Address of principal executive offices)	(Zip Code)

(973) 455-7500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.  

PBF Holding Company LLC	o  Yes    x  No
PBF Finance Corporation	o  Yes    x  No

(Note: As of January 1, 2018, each registrant was no longer subject to the filing requirements of section 13 or 15(d) of the Exchange Act, however, each registrant filed all reports required to be filed during the period it was subject to section 13 or 15(d) of the Exchange Act.)

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

PBF Holding Company LLC	x  Yes    o  No
PBF Finance Corporation	x  Yes    o  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer	Accelerated filer	Non-accelerated filer (Do not check if a smaller reporting company)	Smaller reporting company	Emerging growth company
PBF Holding Company LLC	¨	¨	x	¨	o
PBF Finance Corporation	o	o	x	o	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

PBF Holding Company LLC	o  Yes    o  No
PBF Finance Corporation	o  Yes    o  No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  

PBF Holding Company LLC	¨  Yes    x  No
PBF Finance Corporation	o  Yes    x  No

PBF Holding Company LLC has no common stock outstanding. As of November 6, 2018, 100% of the membership interests of PBF Holding Company LLC were owned by PBF Energy Company LLC, and PBF Finance Corporation had 100 shares of common stock outstanding, all of which were held by PBF Holding Company LLC.

PBF Finance Corporation meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format.

PBF HOLDING COMPANY LLC

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2018

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS			3
PART I – FINANCIAL INFORMATION
	ITEM 1.	Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017	5
		Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2018 and 2017	6
		Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2018 and 2017	7
		Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017	8
		Notes to Condensed Consolidated Financial Statements	10
	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
	ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	61
	ITEM 4.	Controls and Procedures	63
PART II – OTHER INFORMATION
	ITEM 1.	Legal Proceedings	64
	ITEM 6.	Exhibits	69
SIGNATURES			70

This combined Quarterly Report on Form 10-Q is filed by PBF Holding Company LLC (“PBF Holding”) and PBF Finance Corporation (“PBF Finance”). PBF Holding is a wholly-owned subsidiary of PBF Energy Company LLC (“PBF LLC”) and is the parent company for PBF LLC’s refinery operating subsidiaries. PBF Finance is a wholly-owned subsidiary of PBF Holding. PBF Holding is an indirect subsidiary of PBF Energy Inc. (“PBF Energy”), which is the sole managing member of, and owner of an equity interest representing approximately 99.0% of the outstanding economic interests in PBF LLC as of September 30, 2018. PBF Energy operates and controls all of the business and affairs and consolidates the financial results of PBF LLC and its subsidiaries. PBF Holding, together with its consolidated subsidiaries, owns and operates oil refineries and related facilities in North America.

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This combined Quarterly Report on Form 10-Q contains certain "forward-looking statements" of expected future developments that involve risks and uncertainties. You can identify forward-looking statements because they contain words such as "believes," "expects," "may," "should," "seeks," "approximately," "intends," "plans," "estimates," or "anticipates" or similar expressions that relate to our strategy, plans or intentions. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results or to our expectations regarding future industry trends are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results.

Important factors that could cause actual results to differ materially from our expectations, which we refer to as "cautionary statements," are disclosed under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Form 10-Q, the Annual Report on Form 10-K for the year ended December 31, 2017 of PBF Holding Company LLC and PBF Finance Corporation, which we refer to as our 2017 Annual Report on Form 10-K, and in our other filings with the SEC. All forward-looking information in this Quarterly Report on Form 10-Q and subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Some of the factors that we believe could affect our results include:

•supply, demand, prices and other market conditions for our products, including volatility in commodity prices;

•the effects of competition in our markets;

•changes in currency exchange rates, interest rates and capital costs;

•adverse developments in our relationship with both our key employees and unionized employees;

•our ability to operate our businesses efficiently, manage capital expenditures and costs (including general and administrative expenses) and generate earnings and cash flow;

•our indebtedness;

•our supply and inventory intermediation arrangements expose us to counterparty credit and performance risk;

•termination of our Inventory Intermediation Agreements with J. Aron, which could have a material adverse effect on our liquidity, as we would be required to finance our intermediate and refined products inventory covered by the agreements. Additionally, we are obligated to repurchase from J. Aron certain intermediates and finished products located at the Paulsboro and Delaware City refineries’ storage tanks upon termination of these agreements;

•restrictive covenants in our indebtedness that may adversely affect our operational flexibility or ability to make distributions;

•our assumptions regarding payments arising under PBF Energy’s Tax Receivable Agreement and other arrangements relating to PBF Energy;

•our expectations and timing with respect to our acquisition activity;

•our expectations with respect to our capital improvement and turnaround projects;

•the status of an air permit to transfer crude through the Delaware City refinery’s dock;

3

•the impact of disruptions to crude or feedstock supply to any of our refineries, including disruptions due to problems at PBFX or with third party logistics infrastructure or operations, including pipeline, marine and rail transportation;

•the impact of current and future laws, rulings and governmental regulations, including the implementation of rules and regulations regarding transportation of crude oil by rail;

•the impact of the newly enacted federal income tax legislation on our business;

•the effectiveness of our crude oil sourcing strategies, including our crude by rail strategy and related commitments;

•adverse impacts related to legislation by the federal government lifting the restrictions on exporting U.S. crude oil;

•adverse impacts from changes in our regulatory environment, such as the effects of compliance with the California Global Warming Solutions Act (also referred to as “AB32”), or from actions taken by environmental interest groups;

•market risks related to the volatility in the price of Renewable Identification Numbers (“RINs”) required to comply with the Renewable Fuel Standards and greenhouse gas (“GHG”) emission credits required to comply with various GHG emission programs, such as AB32;

•our ability to successfully integrate recently completed acquisitions into our business and realize the benefits from such acquisitions;

•liabilities arising from recent acquisitions that are unforeseen or exceed our expectations; and

•any decisions we continue to make with respect to our energy-related logistical assets that may be transferred to PBFX.

We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this Quarterly Report on Form 10-Q may not in fact occur. Accordingly, investors should not place undue reliance on those statements.

Our forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, including the securities laws of the United States, we do not intend to update or revise any forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing.

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

PBF HOLDING COMPANY LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)

	September 30, 2018			December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	1,013,394		$	526,160
Accounts receivable	1,064,801			951,129
Accounts receivable - affiliate	17,659			8,352
Inventories	2,561,106			2,213,797
Prepaid and other current assets	58,187			49,523
Total current assets	4,715,147			3,748,961
Property, plant and equipment, net	2,860,390			2,805,390
Investment in equity method investee	168,763			171,903
Deferred charges and other assets, net	851,842			779,924
Total assets	$	8,596,142		$	7,506,178
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	481,200		$	572,932
Accounts payable - affiliate	33,454			40,817
Accrued expenses	2,129,768			1,800,859
Current debt	1,242			10,987
Deferred revenue	11,971			7,495
Note payable	—			5,621
Total current liabilities	2,657,635			2,438,711
Long-term debt	1,608,737			1,626,249
Deferred tax liabilities	27,778			33,155
Other long-term liabilities	240,498			223,961
Total liabilities	4,534,648			4,322,076
Commitments and contingencies (Note 8)
Equity:
PBF Holding Company LLC equity
Member’s equity	2,648,182			2,359,791
Retained earnings	1,428,938			840,431
Accumulated other comprehensive loss	(26,477		)	(26,928		)
Total PBF Holding Company LLC equity	4,050,643			3,173,294
Noncontrolling interest	10,851			10,808
Total equity	4,061,494			3,184,102
Total liabilities and equity	$	8,596,142		$	7,506,178

See notes to condensed consolidated financial statements.

5

PBF HOLDING COMPANY LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands)

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2018			2017			2018			2017
Revenues	$	7,642,471		$	5,475,816		$	20,882,542		$	15,239,265
Cost and expenses:
Cost of products and other	6,876,698			4,411,809			18,578,457			13,326,396
Operating expenses (excluding depreciation and amortization expense as reflected below)	409,600			389,504			1,223,798			1,224,757
Depreciation and amortization expense	83,353			70,338			242,960			181,238
Cost of sales	7,369,651			4,871,651			20,045,215			14,732,391
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	64,869			54,677			174,895			130,044
Depreciation and amortization expense	2,594			2,572			7,871			10,355
Equity income in investee	(4,725		)	(3,799		)	(13,110		)	(11,218		)
(Gain) loss on sale of assets	(43,745		)	28			(43,072		)	940
Total cost and expenses	7,388,644			4,925,129			20,171,799			14,862,512
Income from operations	253,827			550,687			710,743			376,753
Other income (expense):
Change in fair value of catalyst leases	1,630			473			5,783			(1,011		)
Debt extinguishment costs	—			—			—			(25,451		)
Interest expense, net	(31,756		)	(29,269		)	(98,122		)	(92,782		)
Other non-service components of net periodic benefit cost	278			(103		)	833			(305		)
Income before income taxes	223,979			521,788			619,237			257,204
Income tax (benefit) expense	(719		)	(4,292		)	(5,403		)	2,040
Net income	224,698			526,080			624,640			255,164
Less: net income (loss) attributable to noncontrolling interests	35			(6		)	43			374
Net income attributable to PBF Holding Company LLC	$	224,663		$	526,086		$	624,597		$	254,790

See notes to condensed consolidated financial statements.

6

PBF HOLDING COMPANY LLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in thousands)

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2018			2017			2018			2017
Net income	$	224,698		$	526,080		$	624,640		$	255,164
Other comprehensive income:
Unrealized (loss) gain on available for sale securities	(77		)	(1		)	(312		)	76
Net gain on pension and other post-retirement benefits	254			288			763			862
Total other comprehensive income	177			287			451			938
Comprehensive income	224,875			526,367			625,091			256,102
Less: comprehensive income (loss) attributable to noncontrolling interests	35			(6		)	43			374
Comprehensive income attributable to PBF Holding Company LLC	$	224,840		$	526,373		$	625,048		$	255,728

See notes to condensed consolidated financial statements.

7

PBF HOLDING COMPANY LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	Nine Months Ended   September 30,
	2018			2017
Cash flows from operating activities:
Net income	$	624,640		$	255,164
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	255,614			197,365
Stock-based compensation	14,059			13,549
Change in fair value of catalyst leases	(5,783		)	1,011
Deferred income taxes	(5,377		)	641
Non-cash change in inventory repurchase obligations	10,701			(26,659		)
Non-cash lower of cost or market inventory adjustment	(300,456		)	(97,943		)
Debt extinguishment costs	—			25,451
Pension and other post-retirement benefit costs	35,536			31,682
Income from equity method investee	(13,110		)	(11,218		)
Distributions from equity method investee	13,110			16,897
(Gain) loss on sale of assets	(43,072		)	940
Changes in operating assets and liabilities:
Accounts receivable	(113,672		)	(159,026		)
Due to/from affiliates	(16,670		)	(2,318		)
Inventories	(46,853		)	(349,189		)
Prepaid and other current assets	(8,664		)	(4,107		)
Accounts payable	(106,155		)	(103,069		)
Accrued expenses	302,594			401,674
Deferred revenue	4,476			(9,044		)
Other assets and liabilities	(6,462		)	(57,387		)
Net cash provided by operating activities	594,456			124,414
Cash flows from investing activities:
Expenditures for property, plant and equipment	(165,675		)	(211,224		)
Expenditures for deferred turnaround costs	(201,029		)	(341,598		)
Expenditures for other assets	(16,946		)	(31,096		)
Proceeds from sale of assets	48,290			—
Equity method investment - return of capital	3,140			451
Net cash used in investing activities	$	(332,220	)	$	(583,467	)

See notes to condensed consolidated financial statements.

8

PBF HOLDING COMPANY LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(unaudited, in thousands)

	Nine Months Ended   September 30,
	2018			2017
Cash flows from financing activities:
Contributions from PBF LLC	$	287,000		$	97,000
Distributions to members	(36,090		)	(39,315		)
Proceeds from 2025 Senior Notes	—			725,000
Cash paid to extinguish 2020 Senior Secured Notes	—			(690,209		)
Repayments of PBF Rail Term Loan	(5,092		)	(4,959		)
Proceeds from revolver borrowings	—			490,000
Repayments of revolver borrowings	—			(490,000		)
Repayment of note payable	(5,621		)	—
Catalyst lease settlements	(9,466		)	—
Proceeds from insurance premium financing	6,959			—
Deferred financing costs and other	(12,692		)	(13,424		)
Net cash provided by financing activities	224,998			74,093
Net increase (decrease) in cash and cash equivalents	487,234			(384,960		)
Cash and cash equivalents, beginning of period	526,160			626,705
Cash and cash equivalents, end of period	$	1,013,394		$	241,745
Supplemental cash flow disclosures
Non-cash activities:
Accrued and unpaid capital expenditures	$	48,460		$	33,120
Distribution of assets to PBF Energy Company LLC	12,677			25,547
Conversion of affiliate notes payable to capital contribution	—			86,298
Note payable issued for purchase of property, plant and equipment	—			6,831

See notes to condensed consolidated financial statements.

9

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Description of the Business

PBF Holding Company LLC (“PBF Holding” or the “Company”), a Delaware limited liability company, and PBF Finance LP (“PBF Finance”), a wholly-owned subsidiary of PBF Holding, together with the Company’s consolidated subsidiaries, owns and operates oil refineries and related facilities in North America. PBF Holding is a wholly-owned subsidiary of PBF Energy Company LLC (“PBF LLC”). PBF Energy Inc. (“PBF Energy”) is the sole managing member of, and owner of an equity interest representing approximately 99.0% of the outstanding economic interest in, PBF LLC as of September 30, 2018. PBF Investments LLC (“PBF Investments”), Toledo Refining Company LLC (“Toledo Refining” or “TRC”), Paulsboro Refining Company LLC (“Paulsboro Refining” or “PRC”), Delaware City Refining Company LLC (“Delaware City Refining” or “DCR”), Chalmette Refining, L.L.C. (“Chalmette Refining”), PBF Western Region LLC (“PBF Western Region”), Torrance Refining Company LLC (“Torrance Refining”) and Torrance Logistics Company LLC are PBF LLC’s principal operating subsidiaries and are all wholly-owned subsidiaries of PBF Holding. Collectively, PBF Holding and its consolidated subsidiaries are referred to hereinafter as the “Company”.

PBF Logistics GP LLC (“PBF GP”) serves as the general partner of PBF Logistics LP (“PBFX”). PBF GP is wholly-owned by PBF LLC. In a series of transactions, PBF Holding distributed certain assets to PBF LLC, which in turn contributed those assets to PBFX (as described in “Note 7 - Related Party Transactions”).

Substantially all of the Company’s operations are in the United States. As of September 30, 2018, the Company’s oil refineries are all engaged in the refining of crude oil and other feedstocks into petroleum products, and have been aggregated to form one reportable segment. To generate earnings and cash flows from operations, the Company is primarily dependent upon processing crude oil and selling refined petroleum products at margins sufficient to cover fixed and variable costs and other expenses. Crude oil and refined petroleum products are commodities; and factors largely out of the Company’s control can cause prices to vary over time. The potential margin volatility can have a material effect on the Company’s financial position, earnings and cash flow.

Basis of Presentation

The unaudited condensed consolidated financial information furnished herein reflects all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, considered necessary for a fair presentation of the financial position and the results of operations and cash flows of the Company for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These interim condensed consolidated financial statements should be read in conjunction with the financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2017 of PBF Holding Company LLC and PBF Finance Corporation. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year.

Torrance Land Sale

During the three months ended September 30, 2018, the Company closed on a third party sale of a parcel of real property acquired as part of the Torrance Refinery, but not part of the refinery itself. The sale resulted in a gain of approximately $43,761 included within Gain on sale of assets within the Condensed Consolidated Statements of Operations.

10

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

Recently Adopted Accounting Guidance

In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (Topic 606) “Revenue from Contracts with Customers.” (“ASC 606”). ASC 606 supersedes the revenue recognition requirements in Accounting Standards Codification 605 “Revenue Recognition” (“ASC 605”), and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method. See “Note 2 - Revenues” for further details.

In March 2017, the FASB issued ASU No. 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”), which provides guidance to improve the reporting of net periodic benefit cost in the income statement and on the components eligible for capitalization in assets. Under the new guidance, employers will present the service cost component of net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in assets. Additionally, under this guidance, employers will present the other non-service components of the net periodic benefit cost separately from the line item(s) that includes the service cost and outside of any subtotal of operating income, if one is presented. Employers will apply the guidance on the presentation of the components of net periodic benefit cost in the income statement retrospectively. The guidance limiting the capitalization of net periodic benefit cost in assets to the service cost component will be applied prospectively. The guidance includes a practical expedient allowing entities to estimate amounts for comparative periods using the information previously disclosed in their pension and other postretirement benefit plan note to the financial statements. The amendments in this ASU are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company adopted ASU 2017-07 effective January 1, 2018 and applied the new guidance retrospectively in the Condensed Consolidated Statements of Operations. Income and expense amounts related to non-service components of net periodic benefit cost, historically recorded within Operating expenses and General and administrative expenses, have been recorded within Other income (expense). For the three and nine months ended September 30, 2018, the Company recorded income of $278 and $833, respectively, related to non-service components of net periodic benefit cost. For the three and nine months ended September 30, 2017, the Company recorded expense of $103 and $305, respectively, related to non-service components of net periodic benefit cost.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which provides guidance to increase clarity and reduce both diversity in practice and cost and complexity when applying the existing accounting guidance on changes to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 require an entity to account for the effects of a modification unless all the following are met: (i) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (ii) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance in ASU 2017-09 should be applied prospectively. The amendments in this ASU are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company’s adoption of this guidance did not materially impact its condensed consolidated financial statements.

11

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), to increase the transparency and comparability about leases among entities. Additional ASUs have been issued subsequent to ASU 2016-02 to provide supplementary clarification and implementation guidance for leases related to, among other things, the application of certain practical expedients, the rate implicit in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments (collectively, the Company refers to ASU 2016-02 and these additional ASUs as the “Updated Lease Guidance”). The Updated Lease Guidance requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. The Updated Lease Guidance is effective for interim and annual periods beginning after December 15, 2018, and allows a modified retrospective approach to adoption. While early adoption is permitted, the Company will not early adopt the Updated Lease Guidance. The Company has established a working group to study the implementation of the Updated Lease Guidance and has instituted a task plan designed to meet the requirements and implementation deadline. The Company has also evaluated and purchased a lease software system, completed software design and configuration of the system, and substantially completed testing the implementation of the selected system. The working group continues to evaluate the impact of the Updated Lease Guidance on the Company’s consolidated financial statements and related disclosures and has designed and begun implementing business processes and controls to address the new guidance. While the assessment of this standard is ongoing, the Company has identified that the most significant impacts of the Updated Lease Guidance will be to bring nearly all leases, with the exception of certain short-term leases, on its balance sheet reflected as right of use assets and lease obligation liabilities as well as accelerating recognition of the interest expense component of financing leases. The new standard will also require additional disclosures for financing and operating leases. The Updated Lease Guidance allows for certain practical expedients, certain of which the Company has elected to adopt including, among others, the expedient to carry forward the classification of leases under current lease guidance once the Updated Lease Guidance becomes effective, the expedient to not include short-term leases on its balance sheet and to avail itself of the additional transition method whereby it will apply the Updated Lease Guidance on the effective date and recognize a cumulative-effect adjustment to opening retained earnings.

In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”). The amendments in ASU 2017-12 more closely align the results of cash flow and fair value hedge accounting with risk management activities in the consolidated financial statements. The amendments expand the ability to hedge nonfinancial and financial risk components, reduce complexity in fair value hedges of interest rate risk, eliminate the requirement to separately measure and report hedge ineffectiveness, and eases certain hedge effectiveness assessment requirements. The guidance in ASU 2017-12 should be applied using a modified retrospective approach. The guidance in ASU 2017-12 also provides transition relief to make it easier for entities to apply certain amendments to existing hedges (including fair value hedges) where the hedge documentation needs to be modified. The presentation and disclosure requirements of ASU 2017-12 should be applied prospectively. The amendments in this ASU are effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. While the Company is still evaluating the timing of adoption, it currently does not expect this guidance to have a material impact on its consolidated financial statements and related disclosures.

In June 2018, the FASB issued ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718): Targeted Improvements to Non-employee Share-Based Payment Accounting” (“ASU 2018-07”). ASU 2018-07 expands the scope of Topic 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. In addition, ASU 2018-07 also clarifies that any share-based payment awards issued to customers should be evaluated under ASC 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted. The Company does not expect this guidance to have a material impact on its consolidated financial statements and related disclosures.

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PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

In August 2018, the FASB issued ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20), to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the information required by GAAP that is most important to users of each entity’s financial statements. The amendments in this ASU modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. Additionally, the amendments in this ASU remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. The amendments in this ASU are effective for fiscal years ending after December 15, 2020, for public business entities and for fiscal years ending after December 15, 2021, for all other entities. Early adoption is permitted for all entities. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures.

2. REVENUES

Adoption of Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”

Prior to January 1, 2018, the Company recognized revenue from customers when all of the following criteria were met:  (i) persuasive evidence of an exchange arrangement existed, (ii) delivery had occurred or services had been rendered, (iii) the buyer’s price was fixed or determinable and (iv) collectability was reasonably assured. Amounts billed in advance of the period in which the service was rendered or product delivered were recorded as deferred revenue. 

Effective January 1, 2018, the Company adopted ASC 606. As a result, the Company has changed its accounting policy for the recognition of revenue from contracts with customers as detailed below.

The Company adopted ASC 606 using the modified retrospective method, which has been applied for the three and nine months ended September 30, 2018. The Company has applied ASC 606 only to those contracts that were not complete as of January 1, 2018. As such, the financial information for prior periods has not been adjusted and continues to be reported under ASC 605.The Company did not record a cumulative effect adjustment upon initially applying ASC 606 as there was not a significant impact upon adoption; however, the details of significant qualitative and quantitative disclosure changes upon implementing ASC 606 are detailed below.

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

The following table provides information relating to the Company’s revenues from external customers for each product or group of similar products for the periods presented:

	Three Months Ended   September 30,
	2018		2017
Gasoline and distillates	$	6,227,509	$	4,657,279
Feedstocks and other	552,683		193,519
Asphalt and blackoils	544,943		361,401
Chemicals	243,174		189,812
Lubricants	74,162		73,805
Total Revenues	$	7,642,471	$	5,475,816

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PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

	Nine Months Ended   September 30,
	2018		2017
Gasoline and distillates	$	17,563,586	$	12,900,465
Asphalt and blackoils	1,251,007		834,260
Feedstocks and other	1,195,589		728,880
Chemicals	621,834		553,311
Lubricants	250,526		222,349
Total Revenues	$	20,882,542	$	15,239,265

The Company’s revenues are generated from the sale of refined petroleum products. These revenues are largely based on the current spot (market) prices of the products sold, which represent consideration specifically allocable to the products being sold on a given day, and the Company recognizes those revenues upon delivery and transfer of title to the products to our customers. The time at which delivery and transfer of title occurs is the point when the Company’s control of the products is transferred to the Company’s customers and when its performance obligation to its customers is fulfilled. Delivery and transfer of title are specifically agreed to between the Company and customers within the contracts. The Company also has contracts which contain fixed pricing, tiered pricing, minimum volume features with makeup periods, or other factors that have not materially been affected by ASC 606.

Deferred Revenues

The Company records deferred revenues when cash payments are received or are due in advance of our performance, including amounts which are refundable. Deferred revenue was $11,971 and $7,495 as of September 30, 2018 and December 31, 2017, respectively. Fluctuations in the deferred revenue balance are primarily driven by the timing and extent of cash payments received or due in advance of satisfying the Company’s performance obligations.

The Company’s payment terms vary by type and location of customer and the products offered. The period between invoicing and when payment is due is not significant (i.e. generally within two months). For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer.

Significant Judgment and Practical Expedients

For performance obligations related to sales of products, the Company has determined that customers are able to direct the use of, and obtain substantially all of the benefits from, the products at the point in time that the products are delivered. The Company has determined that the transfer of control upon delivery to the customer’s requested destination accurately depicts the transfer of goods. Upon the delivery of the products and transfer of control, the Company generally has the present right to payment and the customers bear the risks and rewards of ownership of the products. The Company has elected the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

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PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

3. INVENTORIES

Inventories consisted of the following:

September 30, 2018
	Titled Inventory		Inventory Intermediation Agreements		Total
Crude oil and feedstocks	$	1,055,654	$	—	$	1,055,654
Refined products and blendstocks	1,060,841		339,134		1,399,975
Warehouse stock and other	105,477		—		105,477
	$	2,221,972	$	339,134	$	2,561,106
Lower of cost or market adjustment	—		—		—
Total inventories	$	2,221,972	$	339,134	$	2,561,106

December 31, 2017
	Titled Inventory			Inventory Intermediation Agreements			Total
Crude oil and feedstocks	$	1,073,093		$	—		$	1,073,093
Refined products and blendstocks	1,030,817			311,477			1,342,294
Warehouse stock and other	98,866			—			98,866
	$	2,202,776		$	311,477		$	2,514,253
Lower of cost or market adjustment	(232,652		)	(67,804		)	(300,456		)
Total inventories	$	1,970,124		$	243,673		$	2,213,797

Inventory under inventory intermediation agreements includes certain light finished products sold to counterparties and stored in the Paulsboro and Delaware City refineries’ storage facilities in connection with the amended and restated inventory intermediation agreements (as amended, the “Inventory Intermediation Agreements”) with J. Aron & Company, a subsidiary of The Goldman Sachs Group, Inc. (“J. Aron”).

At September 30, 2018 the replacement value of inventories exceeded the LIFO carrying value by approximately $12,037. During the three months ended September 30, 2018, the Company recorded an adjustment to value its inventories to the lower of cost or market which increased operating income and net income by $54,801, reflecting no lower of cost or market (“LCM”) reserve as of September 30, 2018 in comparison to an LCM reserve of $54,801 at June 30, 2018. During the nine months ended September 30, 2018, the Company recorded an LCM inventory adjustment which increased operating income and net income by $300,456, reflecting no LCM reserve as of September 30, 2018 in comparison to an LCM reserve of $300,456 at December 31, 2017.

During the three months ended September 30, 2017, the Company recorded an adjustment to value its inventories to the lower of cost or market which increased operating income and net income by $265,077, reflecting the net change in the LCM reserve from $763,122 at June 30, 2017 to $498,045 at September 30, 2017. During the nine months ended September 30, 2017, the Company recorded an LCM inventory adjustment which increased both operating income and net income by $97,943 reflecting the net change in the LCM reserve from $595,988 at December 31, 2016 to $498,045 at September 30, 2017.

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PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

4. ACCRUED EXPENSES

Accrued expenses consisted of the following:

	September 30, 2018		December 31, 2017
Inventory-related accruals	$	1,451,142	$	1,151,810
Inventory intermediation agreements	254,022		244,287
Excise and sales tax payable	122,405		118,515
Accrued transportation costs	56,167		64,400
Accrued salaries and benefits	55,366		58,589
Renewable energy credit and emissions obligations	32,753		26,231
Accrued utilities	32,371		42,189
Accrued interest	28,934		9,466
Accrued capital expenditures	25,997		17,342
Accrued refinery maintenance and support costs	23,147		35,674
Customer deposits	20,583		16,133
Environmental liabilities	6,737		7,968
Other	20,144		8,255
Total accrued expenses	$	2,129,768	$	1,800,859

The Company has the obligation to repurchase certain intermediates and finished products that are held in the Company’s refinery storage tanks at the Delaware City and Paulsboro refineries in accordance with the Inventory Intermediation Agreements with J. Aron. As of September 30, 2018 and December 31, 2017, a liability is recognized for the Inventory Intermediation Agreements and is recorded at market price for the J. Aron owned inventory held in the Company’s storage tanks under the Inventory Intermediation Agreements, with any change in the market price being recorded in Cost of products and other.

The Company is subject to obligations to purchase Renewable Identification Numbers (“RINs”) required to comply with the Renewable Fuels Standard. The Company’s overall RINs obligation is based on a percentage of domestic shipments of on-road fuels as established by Environmental Protection Agency (“EPA”). To the degree the Company is unable to blend the required amount of biofuels to satisfy its RINs obligation, RINs must be purchased on the open market to avoid penalties and fines. The Company records its RINs obligation on a net basis in Accrued expenses when its RINs liability is greater than the amount of RINs earned and purchased in a given period and in Prepaid and other current assets when the amount of RINs earned and purchased is greater than the RINs liability. In addition, the Company is subject to obligations to comply with federal and state legislative and regulatory measures, including regulations in the state of California pursuant to Assembly Bill 32 (“AB32”), to address environmental compliance and greenhouse gas and other emissions. These requirements include incremental costs to operate and maintain our facilities as well as to implement and manage new emission controls and programs. Renewable energy credit and emissions obligations fluctuate with the volume of applicable product sales and timing of credit purchases.

Early Return of Railcars

On September 30, 2018, the Company agreed to voluntarily return a portion of railcars under an operating lease in order to rationalize certain components of its railcar fleet based on prevailing market conditions in the crude oil by rail market. Under the terms of the lease amendment, the Company will pay agreed amounts in lieu of satisfaction of return conditions (the “early termination penalty”) and will pay a reduced rental fee over the remaining term of the lease. Certain of these railcars are idle and the remaining railcars will be taken out of service during the fourth quarter of 2018 and subsequently fully returned to the lessor. As a result, the Company recognized an expense of

16

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

$44,571 for the three months ended September 30, 2018 included within Cost of sales consisting of (i) a $40,313 charge for the early termination penalty and (ii) a $4,258 charge related to the remaining lease payments associated with the portion of railcars within the amended lease, that were idled and out of service as of September 30, 2018. The Company has recorded a liability within Inventory-related accruals (included within Accrued expenses) for $25,843 representing the amount of the early lease termination obligation expected to be paid within the next twelve months and a liability within Other long-term liabilities for $18,728 representing the remaining amount of the obligation.

5. DEBT

2018 Revolving Credit Agreement

On May 2, 2018, PBF Holding and certain of its wholly-owned subsidiaries, as borrowers or subsidiary guarantors, replaced its existing asset-based revolving credit agreement dated as of August 15, 2014 (the “August 2014 Revolving Credit Agreement”) with a new asset-based revolving credit agreement (the “2018 Revolving Credit Agreement"). The 2018 Revolving Credit Agreement has a maximum commitment of $3,400,000, a maturity date of May 2023 and redefines certain components of the Borrowing Base (as defined in the credit agreement) to make more funding available for working capital and other general corporate purposes. Borrowings under the 2018 Revolving Credit Agreement bear interest at the Alternative Base Rate plus the Applicable Margin or at the Adjusted LIBOR Rate plus the Applicable Margin (all as defined in the credit agreement). The Applicable Margin ranges from 0.25% to 1.00% for Alternative Base Rate Loans and from 1.25% to 2.00% for Adjusted LIBOR Rate Loans, in each case depending on the Company’s corporate credit rating. In addition, an accordion feature allows for commitments of up to $3,500,000. The LC Participation Fee ranges from 1.00% to 1.75% depending on the Company’s corporate credit rating and the Fronting Fee is capped at 0.25%.

The 2018 Revolving Credit Agreement contains customary covenants and restrictions on the activities of PBF Holding and its subsidiaries, including, but not limited to, limitations on incurring additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions and prepayment of other debt, distributions, dividends and the repurchase of capital stock, transactions with affiliates and the ability of PBF Holding to change the nature of its business or its fiscal year; all as defined in the credit agreement.

In addition, the 2018 Revolving Credit Agreement has a financial covenant which requires that if at any time Excess Availability, as defined in the credit agreement, is less than the greater of (i) 10% of the lesser of the then existing Borrowing Base and the then aggregate Revolving Commitments of the Lenders (the “Financial Covenant Testing Amount”), and (ii) $100,000, and until such time as Excess Availability is greater than the Financial Covenant Testing Amount and $100,000 for a period of 12 or more consecutive days, PBF Holding will not permit the Consolidated Fixed Charge Coverage Ratio, as defined in the credit agreement and determined as of the last day of the most recently completed quarter, to be less than 1.0 to 1.0.

At both September 30, 2018 and December 31, 2017, there was $350,000 outstanding under the revolving credit agreements.

6. INCOME TAXES

PBF Holding is a limited liability company treated as a “flow-through” entity for income tax purposes. Accordingly, there is generally no benefit or expense for federal or state income tax in the PBF Holding financial statements apart from the income tax attributable to two subsidiaries acquired in connection with the acquisition of Chalmette Refining and the Company’s wholly-owned Canadian subsidiary, PBF Energy Limited (“PBF Ltd.”), which are treated as C-Corporations for income tax purposes.

17

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

The reported income tax (benefit) expense in the PBF Holding condensed consolidated financial statements of operations consists of the following:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2018			2017			2018			2017
Current income tax expense (benefit)	$	5		$	190		$	(26	)	$	1,399
Deferred income tax (benefit) expense	(724		)	(4,482		)	(5,377		)	641
Total income tax (benefit) expense	$	(719	)	$	(4,292	)	$	(5,403	)	$	2,040

7. RELATED PARTY TRANSACTIONS

Transactions and Agreements with PBFX

The Company entered into agreements with PBFX that establish fees for certain general and administrative services, and operational and maintenance services provided by the Company to PBFX. In addition, the Company executed terminal, pipeline and storage services agreements with PBFX under which PBFX provides commercial transportation, terminaling, storage and pipeline services to the Company. These agreements with PBFX include the agreements set forth below:

Contribution Agreements

Immediately prior to the closing of certain contribution agreements, which PBF LLC entered into with PBFX (collectively referred to as the “Contribution Agreements”), the Company contributed certain assets to PBF LLC. PBF LLC in turn contributed those assets to PBFX pursuant to the Contribution Agreements. Certain proceeds received by PBF LLC from PBFX in accordance with the Contribution Agreements were subsequently contributed by PBF LLC to the Company. See the 2017 Form 10-K for a more complete description of the Company’s contribution agreements with PBFX that were entered into prior to 2018.

On July 16, 2018, PBFX entered into four contribution agreements with PBF LLC pursuant to which the Company contributed to PBF LLC certain of its subsidiaries (the “Development Assets Contribution Agreements”). Pursuant to the Development Asset Contribution Agreements, the Company contributed all of the issued and outstanding limited liability company interests of: Toledo Rail Logistics Company LLC (“TRLC”), whose assets consist of a loading and unloading rail facility located at the Toledo refinery (the “Toledo Rail Products Facility”); Chalmette Logistics Company LLC (“CLC”), whose assets consist of a truck loading rack facility (the “Chalmette Truck Rack”) and a rail yard facility (the “Chalmette Rosin Yard”), both of which are located at the Chalmette refinery; Paulsboro Terminaling Company LLC (“PTC”), whose assets consist of a lube oil terminal facility located at the Paulsboro refinery (the “Paulsboro Lube Oil Terminal”); and DCR Storage and Loading Company LLC (“DSLC”), whose assets consist of an ethanol storage facility located at the Delaware City refinery (the “Delaware Ethanol Storage Facility” and collectively with the Toledo Rail Products Facility, the Chalmette Truck Rack, the Chalmette Rosin Yard, and the Paulsboro Lube Oil Terminal, the “Development Assets”) to PBF LLC. PBFX Operating Company LP (“PBFX Op Co”), PBFX’s wholly-owned subsidiary, in turn acquired the limited liability company interests in the Development Assets from PBF LLC in connection with the Development Assets Contribution Agreement effective July 31, 2018.

In consideration for the Development Assets limited liability company interests, PBFX delivered to PBF LLC total consideration of $31,586, consisting of 1,494,134 common units of PBFX.

Commercial Agreements

PBFX currently derives a substantial majority of its revenue from long-term, fee-based commercial agreements with the Company relating to assets associated with the Contribution Agreements described above, the majority of which include minimum volume commitments (“MVCs”) and are supported by contractual fee escalations for inflation adjustments and certain increases in operating costs. Under these agreements, PBFX provides various

18

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

pipeline, rail and truck terminaling and storage services to the Company and the Company has committed, under certain of these agreements, to provide PBFX with minimum fees based on minimum monthly throughput volumes. The Company believes the terms and conditions under these agreements, as well as the Omnibus Agreement (as defined below) and the Services Agreement (as defined below) each with PBFX, are generally no less favorable to either party than those that could have been negotiated with unaffiliated parties with respect to similar services.

See the 2017 Form 10-K for a more complete description of the Company’s commercial agreements with PBFX, including those identified as leases, that were entered into prior to 2018. The following are commercial agreements entered into between the Company and PBFX during 2018:

Agreements	Initiation Date	Initial Term	Renewals (a)	MVC	Force Majeure
Amended and Restated Rail Agreements (b)	5/8/2014	7 years, 8 months	2 x 5	125,000 barrels per day (“bpd”)	PBF Holding or PBFX can declare
Knoxville Terminals Agreement- Terminaling Services	4/16/2018	5 years	Evergreen	Various (c)
Knoxville Terminals Agreement- Tank Lease (d)	4/16/2018	5 years	Evergreen	115,334 barrels (e)
Toledo Rail Loading Agreement	7/31/2018	7 years, 5 months	2 x 5	Various (f)
Chalmette Terminal Throughput Agreement	7/31/2018	1 year	Evergreen	N/A
Chalmette Rail Unloading Agreement	7/31/2018	7 years, 5 months	2 x 5	7,600 bpd
DSL Ethanol Throughput Agreement (d)	7/31/2018	7 years, 5 months	2 x 5	5,000 bpd

___________________

(a) The Company has the option to extend the agreements for up to two additional five-year terms, as applicable.

(b) The Delaware City Rail Terminaling Services Agreement and the Delaware West Ladder Rack Terminaling Services Agreement each between Delaware City Terminaling Company LLC and the Company were amended effective as of January 1, 2018 with the service fees thereunder being adjusted, including the addition of an ancillary fee paid by the Company on an actual cost basis. In determining payments due under the Amended and Restated Rail Agreements, excess volumes throughput under the agreements shall apply against required payments in respect to the minimum throughput commitments on a quarterly basis and, to the extent not previously applied, on an annual basis against the MVCs.

(c) The minimum throughput revenue commitment is $894 for year one, $1,788 for year two and $2,683 for year three and thereafter.

(d) These commercial agreements with the Company are considered leases.

(e) Reflects the overall capacity as stipulated by the storage agreement. The storage MVC is subject to the effective operating capacity of each tank, which can be impacted by routine tank maintenance and other factors. The Company is expected to take full shell capacity by the end of the fourth quarter of 2018.

(f) Under the Toledo Rail Loading Agreement, the Company has minimum throughput commitments for (i) 30 railcars per day of products and (ii) 11.5 railcars per day of premium product. The Toledo Rail Loading Agreement also specifies a maximum throughput rate of 50 railcars per day.

19

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

Other Agreements

In addition to the commercial agreements described above, the Company has entered into an omnibus agreement with PBFX, PBF GP and PBF LLC, which has been amended and restated in connection with the closing of certain of the contribution agreements. This agreement addresses the payment of an annual fee for the provision of various general and administrative services and reimbursement of salary and benefit costs for certain PBF Energy employees. On July 31, 2018, the Company entered into the Fifth Amendment and Restated Omnibus Agreement (as amended, the “Omnibus Agreement”) in connection with the Development Assets Acquisition, resulting in an increase of the estimated annual fee to $7,000.

Additionally, the Company and certain of its subsidiaries have entered into an operation and management services and secondment agreement with PBFX, pursuant to which the Company and its subsidiaries provide PBFX with the personnel necessary for PBFX to perform its obligations under its commercial agreements. PBFX reimburses the Company for the use of such employees and the provision of certain infrastructure-related services to the extent applicable to its operations, including storm water discharge and waste water treatment, steam, potable water, access to certain roads and grounds, sanitary sewer access, electrical power, emergency response, filter press, fuel gas, API solids treatment, fire water and compressed air. On July 31, 2018, the Company entered into the Sixth Amended and Restated Operation and Management Services and Secondment Agreement (as amended, the “Services Agreement”) in connection with the Development Assets Acquisition, resulting in an increase of the annual fee to $8,587. The Services Agreement will terminate upon the termination of the Omnibus Agreement, provided that PBFX may terminate any service on 30-days’ notice.

Summary of Transactions with PBFX

A summary of transactions with PBFX is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Reimbursements under affiliate agreements:
Services Agreement	$	1,979	$	1,639	$	5,327	$	4,918
Omnibus Agreement	1,927		1,890		5,364		5,174
Total expenses under affiliate agreements	66,140		62,359		190,789		176,916

8. COMMITMENTS AND CONTINGENCIES

Environmental Matters

The Company’s refineries, pipelines and related operations are subject to extensive and frequently changing federal, state and local laws and regulations, including, but not limited to, those relating to the discharge of materials into the environment or that otherwise relate to the protection of the environment, waste management and the characteristics and the compositions of fuels. Compliance with existing and anticipated laws and regulations can increase the overall cost of operating the refineries, including remediation, operating costs and capital costs to construct, maintain and upgrade equipment and facilities.

In connection with the Paulsboro refinery acquisition, the Company assumed certain environmental remediation obligations. The Paulsboro environmental liability of $11,253 recorded as of September 30, 2018 ($10,282 as of December 31, 2017) represents the present value of expected future costs discounted at a rate of 8.0%. The current portion of the environmental liability is recorded in Accrued expenses and the non-current portion is recorded in

20

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

Other long-term liabilities. As of September 30, 2018 and December 31, 2017, this liability is self-guaranteed by the Company.

In connection with the acquisition of the Delaware City assets, Valero Energy Corporation (“Valero”) remains responsible for certain pre-acquisition environmental obligations up to $20,000 and the predecessor to Valero in ownership of the refinery retains other historical obligations.

In connection with the acquisition of the Delaware City assets and the Paulsboro refinery, the Company and Valero purchased ten year, $75,000 environmental insurance policies to insure against unknown environmental liabilities at each site. In connection with the Toledo refinery acquisition, Sunoco, Inc. (R&M) remains responsible for environmental remediation for conditions that existed on the closing date for twenty years from March 1, 2011, subject to certain limitations.

In connection with the acquisition of the Chalmette refinery, the Company obtained $3,936 in financial assurance (in the form of a surety bond) to cover estimated potential site remediation costs associated with an agreed to Administrative Order of Consent with EPA. The estimated cost assumes remedial activities will continue for a minimum of thirty years. Further, in connection with the acquisition of the Chalmette refinery, the Company purchased a ten year, $100,000 environmental insurance policy to insure against unknown environmental liabilities at the refinery.

On December 28, 2016, DNREC issued a Coastal Zone Act permit (the “Ethanol Permit”) to DCR allowing the utilization of existing tanks and existing marine loading equipment at their existing facilities to enable denatured ethanol to be loaded from storage tanks to marine vessels and shipped to offsite facilities. On January 13, 2017, the issuance of the Ethanol Permit was appealed by two environmental groups. On February 27, 2017, the Coastal Zone Industrial Board (the “Coastal Zone Board”) held a public hearing and dismissed the appeal, determining that the appellants did not have standing. The appellants filed an appeal of the Coastal Zone Board’s decision with the Delaware Superior Court (the “Superior Court”) on March 30, 2017. On January 19, 2018, the Superior Court rendered an Opinion regarding the decision of the Coastal Zone Board to dismiss the appeal of the Ethanol Permit for the ethanol project. The Judge determined that the record created by the Coastal Zone Board was insufficient for the Superior Court to make a decision, and therefore remanded the case back to the Coastal Zone Board to address the deficiency in the record. Specifically, the Superior Court directed the Coastal Zone Board to address any evidence concerning whether the appellants’ claimed injuries would be affected by the increased quantity of ethanol shipments. During the hearing before the Coastal Zone Board on standing, one of the appellants’ witnesses made a reference to the flammability of ethanol, without any indication of the significance of flammability/ explosivity to specific concerns. Moreover, the appellants did not introduce at hearing any evidence of the relative flammability of ethanol as compared to other materials shipped to and from the refinery. However, the sole dissenting opinion from the Coastal Zone Board focused on the flammability/explosivity issue, alleging that the appellants’ testimony raised the issue as a distinct basis for potential harms. Once the Board responds to the remand, it will go back to the Superior Court to complete its analysis and issue a decision.

At the time the Company acquired the Toledo refinery, EPA had initiated an investigation into the compliance of the refinery with EPA standards governing flaring pursuant to Section 114 of the Clean Air Act. On February 1, 2013, EPA issued an Amended Notice of Violation, and on September 20, 2013, EPA issued a Notice of Violation and Finding of Violation to Toledo refinery, alleging certain violations of the Clean Air Act at its Plant 4 and Plant 9 flares since the acquisition of the refinery on March 1, 2011. Toledo refinery and EPA subsequently entered into tolling agreements pending settlement discussions. Although the resolution has not been finalized, the civil administrative penalty is anticipated to be approximately $645 including supplemental environmental projects. To the extent the administrative penalty exceeds such amount, it is not expected to be material to the Company.

In connection with the acquisition of the Torrance refinery and related logistics assets, the Company assumed certain pre-existing environmental liabilities totaling $133,025 as of September 30, 2018 ($136,487 as of December 31, 2017), related to certain environmental remediation obligations to address existing soil and groundwater contamination and monitoring activities and other clean-up activities, which reflects the current estimated cost of the remediation obligations. The current portion of the environmental liability is recorded in

21

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

Accrued expenses and the non-current portion is recorded in Other long-term liabilities. In addition, in connection with the acquisition of the Torrance refinery and related logistics assets, the Company purchased a ten year, $100,000 environmental insurance policy to insure against unknown environmental liabilities. Furthermore, in connection with the acquisition, the Company assumed responsibility for certain specified environmental matters that occurred prior to the Company’s ownership of the refinery and the logistics assets, including specified incidents and/or notices of violations (“NOVs”) issued by regulatory agencies in various years before the Company’s ownership, including the Southern California Air Quality Management District (“SCAQMD”) and the Division of Occupational Safety and Health of the State of California (“Cal/OSHA”).

In connection with the acquisition of the Torrance refinery and related logistics assets, the Company agreed to take responsibility for NOV No. P63405 that ExxonMobil had received from the SCAQMD for Title V deviations that are alleged to have occurred in 2015. On August 14, 2018, the Company received a letter from SCAQMD offering to settle this NOV for $515. The Company is currently in communication with SCAQMD to resolve this NOV.

Subsequent to the acquisition, further NOVs were issued by the SCAQMD, Cal/OSHA, the City of Torrance, the City of Torrance Fire Department, and the Los Angeles County Sanitation District related to alleged operational violations, emission discharges and/or flaring incidents at the refinery and the logistics assets both before and after the Company’s acquisition. EPA in November 2016 conducted a Risk Management Plan (“RMP”) inspection following the acquisition related to Torrance operations and issued preliminary findings in March 2017 concerning RMP potential operational violations. The Company is currently in communication with EPA to resolve the RMP preliminary findings. EPA and the California Department of Toxic Substances Control (“DTSC”) in December 2016 conducted a Resource Conservation and Recovery Act (“RCRA”) inspection following the acquisition related to Torrance operations and also issued in March 2017 preliminary findings concerning RCRA potential operational violations. In April 2017, EPA referred the RCRA preliminary findings to DTSC for final resolution. On March 1, 2018, the Company received a notice of intent to sue from Environmental Integrity Project, on behalf of Environment California, under RCRA with respect to the alleged violations from EPA’s and DTSC’s December 2016 inspection. On March 2, 2018, DTSC issued an order to correct alleged RCRA violations relating to the accumulation of oil bearing materials in roll off bins during 2016 and 2017. On June 14, 2018, the Torrance refinery and DTSC reached settlement regarding the oil bearing materials in the form of a stipulation and order, wherein the Torrance refinery agreed that it would recycle or properly dispose of the oil bearing materials by the end of 2018 and pay an administrative penalty of $150. Following this settlement, in June 2018, DTSC referred the remaining alleged RCRA violations from EPA’s and DTSC’s December 2016 inspection to the California Attorney General for final resolution. The Torrance refinery and the California Attorney General are in discussions to resolve these remaining alleged RCRA violations. Other than the $150 DTSC administrative penalty, no other settlement or penalty demands have been received to date with respect to any of the other NOVs, preliminary findings, or order that are in excess of $100. As the ultimate outcomes are uncertain, the Company cannot currently estimate the final amount or timing of their resolution but any such amount is not expected to have a material impact on the Company’s financial position, results of operations or cash flows, individually or in the aggregate.

Applicable Federal and State Regulatory Requirements

The Company’s operations and many of the products it manufactures are subject to certain specific requirements of the Clean Air Act (the “CAA”) and related state and local regulations. The CAA contains provisions that require capital expenditures for the installation of certain air pollution control devices at the Company’s refineries. Subsequent rule making authorized by the CAA or similar laws or new agency interpretations of existing rules, may necessitate additional expenditures in future years.

In 2010, New York State adopted a Low-Sulfur Heating Oil mandate that, beginning July 1, 2012, requires all heating oil sold in New York State to contain no more than 15 parts per million (“PPM”) sulfur. Since July 1, 2012, other states in the Northeast market began requiring heating oil sold in their state to contain no more than 15 PPM sulfur. Currently, all of the Northeastern states and Washington DC have adopted sulfur controls on heating oil. Most of the Northeastern states will now require heating oil with 15 PPM or less sulfur by July 1, 2018 (except for Pennsylvania and Maryland - where less than 500 PPM sulfur is required). All of the heating oil the Company

22

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

currently produces meets these specifications. The mandate and other requirements do not currently have a material impact on the Company’s financial position, results of operations or cash flows.

EPA issued the final Tier 3 Gasoline standards on March 3, 2014 under the CAA. This final rule establishes more stringent vehicle emission standards and further reduces the sulfur content of gasoline starting in January 2017. The new standard is set at 10 PPM sulfur in gasoline on an annual average basis starting January 1, 2017, with a credit trading program to provide compliance flexibility. EPA responded to industry comments on the proposed rule and maintained the per gallon sulfur cap on gasoline at the existing 80 PPM cap. The refineries are complying with these new requirements as planned, either directly or using flexibility provided by sulfur credits generated or purchased in advance as an economic optimization. The standards set by the new rule are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

The Company is required to comply with the Renewable Fuel Standard (“RFS”) implemented by EPA, which sets annual quotas for the quantity of renewable fuels (such as ethanol) that must be blended into motor fuels consumed in the United States. In July 2018, EPA issued proposed amendments to the RFS program regulations that would establish annual percentage standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and renewable fuels that would apply to all gasoline and diesel produced in the U.S. or imported in the year 2019. In addition, the separate proposal includes a proposed biomass-based diesel applicable volume for 2020. It is likely that RIN production will continue to be lower than needed forcing obligated parties, such as the Company, to purchase cellulosic waiver credits or purchase excess RINs from suppliers on the open market.

In addition, on December 1, 2015 EPA finalized revisions to an existing air regulation concerning Maximum Achievable Control Technologies (“MACT”) for Petroleum Refineries. The regulation requires additional continuous monitoring systems for eligible process safety valves relieving to atmosphere, minimum flare gas heat (Btu) content, and delayed coke drum vent controls to be installed by January 30, 2019. In addition, a program for ambient fence line monitoring for benzene was implemented prior to the deadline of January 30, 2018. The Company is in the process of implementing the requirements of this regulation. The regulation does not have a material impact on the Company’s financial position, results of operations or cash flows.

EPA published a Final Rule to the Clean Water Act (“CWA”) Section 316(b) in August 2014 regarding cooling water intake structures, which includes requirements for petroleum refineries. The purpose of this rule is to prevent fish from being trapped against cooling water intake screens (impingement) and to prevent fish from being drawn through cooling water systems (entrainment). Facilities will be required to implement Best Technology Available (“BTA”) as soon as possible, but state agencies have the discretion to establish implementation time lines. The Company continues to evaluate the impact of this regulation, and at this time does not anticipate it having a material impact on the Company’s financial position, results of operations or cash flows.

As a result of the Torrance Acquisition, the Company is subject to greenhouse gas emission control regulations in the state of California pursuant to AB32. AB32 imposes a statewide cap on greenhouse gas emissions, including emissions from transportation fuels, with the aim of returning the state to 1990 emission levels by 2020. AB32 is implemented through two market mechanisms including the Low Carbon Fuel Standard (“LCFS”) and Cap and Trade, which was extended for an additional ten years to 2030 in July 2017. The Company is responsible for the AB32 obligations related to the Torrance refinery beginning on July 1, 2016 and must purchase emission credits to comply with these obligations. Additionally, in September 2016, the state of California enacted Senate Bill 32 (“SB32”) which further reduces greenhouse gas emissions targets to 40 percent below 1990 levels by 2030.

However, subsequent to the acquisition, the Company is recovering the majority of these costs from its customers, and as such does not expect this obligation to materially impact the Company’s financial position, results of operations, or cash flows. To the degree there are unfavorable changes to AB32 or SB32 regulations or the Company is unable to recover such compliance costs from customers, these regulations could have a material adverse effect on our financial position, results of operations and cash flows.

The Company is subject to obligations to purchase RINs. On February 15, 2017, the Company received a notification that EPA records indicated that PBF Holding used potentially invalid RINs that were in fact verified under EPA’s

23

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

RIN Quality Assurance Program (“QAP”) by an independent auditor as QAP A RINs. Under the regulations, use of potentially invalid QAP A RINs provided the user with an affirmative defense from civil penalties provided certain conditions are met. The Company has asserted the affirmative defense and if accepted by EPA will not be required to replace these RINs and will not be subject to civil penalties under the program. It is reasonably possible that EPA will not accept the Company’s defense and may assess penalties in these matters but any such amount is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

As of January 1, 2011, the Company is required to comply with EPA’s Control of Hazardous Air Pollutants From Mobile Sources, or MSAT2, regulations on gasoline that impose reductions in the benzene content of its produced gasoline. The Company purchases benzene credits to meet these requirements. The Company’s planned capital projects will reduce the amount of benzene credits that it needs to purchase. In addition, the renewable fuel standards mandate the blending of prescribed percentages of renewable fuels (e.g., ethanol and biofuels) into the Company’s produced gasoline and diesel. These new requirements, other requirements of the CAA and other presently existing or future environmental regulations may cause the Company to make substantial capital expenditures as well as the purchase of credits at significant cost, to enable its refineries to produce products that meet applicable requirements.

The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), also known as “Superfund,” imposes liability, without regard to fault or the legality of the original conduct, on certain classes of persons who are considered to be responsible for the release of a “hazardous substance” into the environment. These persons include the current or former owner or operator of the disposal site or sites where the release occurred and companies that disposed of or arranged for the disposal of the hazardous substances. Under CERCLA, such persons may be subject to joint and several liability for investigation and the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies. As discussed more fully above, certain of the Company’s sites are subject to these laws and the Company may be held liable for investigation and remediation costs or claims for natural resource damages. It is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances or other pollutants released into the environment. Analogous state laws impose similar responsibilities and liabilities on responsible parties. In the Company’s current normal operations, it has generated waste, some of which falls within the statutory definition of a “hazardous substance” and some of which may have been disposed of at sites that may require cleanup under Superfund.

The Company is also currently subject to certain other existing environmental claims and proceedings. The Company believes that there is only a remote possibility that future costs related to any of these other known contingent liability exposures would have a material impact on its financial position, results of operations or cash flows.

PBF LLC Limited Liability Company Agreement

The holders of limited liability company interests in PBF LLC, including PBF Energy, generally have to include for purposes of calculating their U.S. federal, state and local income taxes their share of any taxable income of PBF LLC, regardless of whether such holders receive cash distributions from PBF LLC. PBF Energy ultimately may not receive cash distributions from PBF LLC equal to its share of such taxable income or even equal to the actual tax due with respect to that income. For example, PBF LLC is required to include in taxable income PBF LLC’s allocable share of PBFX’s taxable income and gains (such share to be determined pursuant to the partnership agreement of PBFX), regardless of the amount of cash distributions received by PBF LLC from PBFX, and such taxable income and gains will flow-through to PBF Energy to the extent of its allocable share of the taxable income of PBF LLC. As a result, at certain times, the amount of cash otherwise ultimately available to PBF Energy on account of its indirect interest in PBFX may not be sufficient for PBF Energy to pay the amount of taxes it will owe on account of its indirect interests in PBFX.

Taxable income of PBF LLC generally is allocated to the holders of PBF LLC units (including PBF Energy) pro-rata in accordance with their respective share of the net profits and net losses of PBF LLC. In general, PBF LLC

24

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

is required to make periodic tax distributions to the members of PBF LLC, including PBF Energy, pro-rata in accordance with their respective percentage interests for such period (as determined under the amended and restated limited liability company agreement of PBF LLC), subject to available cash and applicable law and contractual restrictions (including pursuant to our debt instruments) and based on certain assumptions. Generally, these tax distributions are required to be in an amount equal to our estimate of the taxable income of PBF LLC for the year multiplied by an assumed tax rate equal to the highest effective marginal combined U.S. federal, state and local income tax rate prescribed for an individual or corporate resident in New York, New York (taking into account the nondeductibility of certain expenses). If, with respect to any given calendar year, the aggregate periodic tax distributions were less than the actual taxable income of PBF LLC multiplied by the assumed tax rate, PBF LLC is required to make a “true up” tax distribution, no later than March 15 of the following year, equal to such difference, subject to the available cash and borrowings of PBF LLC. PBF LLC generally obtains funding to pay its tax distributions by causing PBF Holding to distribute cash to PBF LLC and from distributions it receives from PBFX.

Tax Receivable Agreement

PBF Energy (the Company’s indirect parent) entered into a Tax Receivable Agreement with the PBF LLC Series A and PBF LLC Series B Unit holders (the “Tax Receivable Agreement”) that provides for the payment by PBF Energy to such persons of an amount equal to 85% of the amount of the benefits, if any, that PBF Energy is deemed to realize as a result of (i) increases in tax basis, as described below, and (ii) certain other tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. For purposes of the Tax Receivable Agreement, the benefits deemed realized by PBF Energy will be computed by comparing the actual income tax liability of PBF Energy (calculated with certain assumptions) to the amount of such taxes that PBF Energy would have been required to pay had there been no increase to the tax basis of the assets of PBF LLC as a result of purchases or exchanges of PBF LLC Series A Units for shares of PBF Energy’s Class A common stock and had PBF Energy not entered into the Tax Receivable Agreement. The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless: (i) PBF Energy exercises its right to terminate the Tax Receivable Agreement, (ii) PBF Energy breaches any of its material obligations under the Tax Receivable Agreement or (iii) certain changes of control occur, in which case all obligations under the Tax Receivable Agreement will generally be accelerated and due as calculated under certain assumptions.

The payment obligations under the Tax Receivable Agreement are obligations of PBF Energy and not of PBF LLC or PBF Holding. In general, PBF Energy expects to obtain funding for these annual payments from PBF LLC, primarily through tax distributions, which PBF LLC makes on a pro-rata basis to its owners. Such owners include PBF Energy, which holds a 99.0% interest in PBF LLC as of September 30, 2018 (96.7% as of December 31, 2017). PBF LLC generally obtains funding to pay its tax distributions by causing PBF Holding to distribute cash to PBF LLC and from distributions it receives from PBFX. As a result of the reduction of the corporate federal tax rate to 21% as part of the Tax Cuts and Jobs Act, PBF Energy’s liability associated with the Tax Receivable Agreement was reduced.

25

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

9. EMPLOYEE BENEFIT PLANS

The components of net periodic benefit cost related to the Company’s defined benefit plans consisted of the following:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
Pension Benefits	2018			2017			2018			2017
Components of net periodic benefit cost:
Service cost	$	11,836		$	10,142		$	35,508		$	30,429
Interest cost	1,448			1,084			4,344			3,252
Expected return on plan assets	(2,135		)	(1,441		)	(6,405		)	(4,325		)
Amortization of prior service cost	22			13			65			39
Amortization of actuarial loss	71			113			214			339
Net periodic benefit cost	$	11,242		$	9,911		$	33,726		$	29,734

	Three Months Ended   September 30,				Nine Months Ended   September 30,
Post-Retirement Medical Plan	2018		2017		2018		2017
Components of net periodic benefit cost:
Service cost	$	287	$	316	$	861	$	948
Interest cost	155		172		465		516
Amortization of prior service cost	161		162		484		484
Net periodic benefit cost	$	603	$	650	$	1,810	$	1,948

The Company adopted ASU 2017-07 as described in “Note 1 - Description of the Business and Basis of Presentation” effective January 1, 2018. The new guidance requires the bifurcation of net periodic benefit cost. The service cost component is presented within Income from operations, while the other components are reported separately outside of operations. This guidance was applied retrospectively in the Condensed Consolidated Statements of Operations. For the three and nine months ended September 30, 2018, the Company recorded income of $278 and $833, respectively, related to the non-service components of net periodic benefit cost in Other income (expense). For the three and nine months ended September 30, 2017, the Company recorded expense of $103 and $305, respectively, related to the non-service components of net periodic benefit cost in Other income (expense).

10. FAIR VALUE MEASUREMENTS

The tables below present information about the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis and indicate the fair value hierarchy of the inputs utilized to determine the fair values as of September 30, 2018 and December 31, 2017.

We have elected to offset the fair value amounts recognized for multiple derivative contracts executed with the same counterparty; however, fair value amounts by hierarchy level are presented on a gross basis in the tables below. We have posted cash margin with various counterparties to support hedging and trading activities. The cash margin posted is required by counterparties as collateral deposits and cannot be offset against the fair value of open contracts except in the event of default. We have no derivative contracts that are subject to master netting arrangements that are reflected gross on the balance sheet.

26

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

	As of September 30 2018
	Fair Value Hierarchy						Total Gross Fair Value		Effect of Counter-party Netting		Net Carrying Value on Balance Sheet
	Level 1		Level 2		Level 3
Assets:
Money market funds	$	371,209	$	—	$	—	$	371,209	N/A		$	371,209
Commodity contracts	17,023		1,702		—		18,725		(18,725	)	—
Liabilities:
Commodity contracts	24,202		21,895		—		46,097		(18,725	)	27,372
Catalyst lease obligations	—		43,800		—		43,800		—		43,800
Derivatives included with inventory intermediation agreement obligations	—		18,422		—		18,422		—		18,422

	As of December 31, 2017
	Fair Value Hierarchy						Total Gross Fair Value		Effect of Counter-party Netting		Net Carrying Value on Balance Sheet
	Level 1		Level 2		Level 3
Assets:
Money market funds	$	4,730	$	—	$	—	$	4,730	N/A		$	4,730
Commodity contracts	10,031		357		—		10,388		(10,388	)	—
Liabilities:
Commodity contracts	51,673		33,035		—		84,708		(10,388	)	74,320
Catalyst lease obligations	—		59,048		—		59,048		—		59,048
Derivatives included with inventory intermediation agreement obligations	—		7,721		—		7,721		—		7,721

The valuation methods used to measure financial instruments at fair value are as follows:

• Money market funds categorized in Level 1 of the fair value hierarchy are measured at fair value based on quoted market prices and included within Cash and cash equivalents.

• The commodity contracts categorized in Level 1 of the fair value hierarchy are measured at fair value based on quoted prices in an active market. The commodity contracts categorized in Level 2 of the fair value hierarchy are measured at fair value using a market approach based upon future commodity prices for similar instruments quoted in active markets.

• The commodity contracts categorized in Level 3 of the fair value hierarchy consist of commodity price swap contracts that relate to forecasted purchases of crude oil for which quoted forward market prices are not readily available due to market illiquidity. The forward prices used to value these swaps were derived using broker quotes, prices from other third party sources and other available market based data.

• The derivatives included with inventory intermediation agreement obligations and the catalyst lease obligations are categorized in Level 2 of the fair value hierarchy and are measured at fair value using a market approach based upon commodity prices for similar instruments quoted in active markets.

Non-qualified pension plan assets are measured at fair value using a market approach based on published net asset values of mutual funds as a practical expedient. As of September 30, 2018 and December 31, 2017, $9,427 and $9,593, respectively, were included within Deferred charges and other assets, net for these non-qualified pension plan assets.

27

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

The table below summarizes the changes in fair value measurements of commodity contracts categorized in Level 3 of the fair value hierarchy:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Balance at beginning of period	$	—	$	—	$	—	$	(84	)
Purchases	—		—		—		—
Settlements	—		—		—		45
Unrealized gain included in earnings	—		—		—		39
Transfers into Level 3	—		—		—		—
Transfers out of Level 3	—		—		—		—
Balance at end of period	$	—	$	—	$	—	$	—

There were no transfers between levels during the three and nine months ended September 30, 2018 or 2017.

Fair value of debt

The table below summarizes the fair value and carrying value of debt as of September 30, 2018 and December 31, 2017.

	September 30, 2018						December 31, 2017
	Carrying value			Fair  value			Carrying  value			Fair value
2025 Senior Notes (a)	$	725,000		$	767,282		$	725,000		$	763,945
2023 Senior Notes (a)	500,000			522,798			500,000			522,101
Revolving Credit Agreement (b)	350,000			350,000			350,000			350,000
PBF Rail Term Loan (b)	23,273			23,273			28,366			28,366
Catalyst leases (c)	43,800			43,800			59,048			59,048
	1,642,073			1,707,153			1,662,414			1,723,460
Less - Current debt (c)	(1,242		)	(1,242		)	(10,987		)	(10,987		)
Less - Unamortized deferred financing costs	(32,094		)	n/a			(25,178		)	n/a
Long-term debt	$	1,608,737		$	1,705,911		$	1,626,249		$	1,712,473

(a) The estimated fair value, categorized as a Level 2 measurement, was calculated based on the present value of future expected payments utilizing implied current market interest rates based on quoted prices of the 7.00% senior notes due 2023 and the 7.25% senior notes due 2025 (collectively, the “Senior Notes”).

(b) The estimated fair value approximates carrying value, categorized as a Level 2 measurement, as these borrowings bear interest based upon short-term floating market interest rates.

(c) Catalyst leases are valued using a market approach based upon commodity prices for similar instruments quoted in active markets and are categorized as a Level 2 measurement. The Company has elected the fair value option for accounting for its catalyst lease repurchase obligations as the Company’s liability is directly impacted by the change in fair value of the underlying catalyst. During 2017, Delaware City Refining entered into two platinum bridge leases which were settled during the second quarter of 2018 and the Company entered into a new platinum bridge lease, which will expire in the first quarter of 2019. The total outstanding balance related to these bridge leases as of September 30, 2018 and December 31, 2017 was $1,242 and $10,987, respectively, and is included in Current debt on the Company’s Condensed Consolidated balance sheet.

28

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

11. DERIVATIVES

The Company uses derivative instruments to mitigate certain exposures to commodity price risk. The Company entered into Inventory Intermediation Agreements that contain purchase obligations for certain volumes of intermediates and refined products. The purchase obligations related to intermediates and refined products under these agreements are derivative instruments that have been designated as fair value hedges in order to hedge the commodity price volatility of certain refinery inventory. The fair value of these purchase obligation derivatives is based on market prices of the underlying intermediates and refined products. The level of activity for these derivatives is based on the level of operating inventories.

As of September 30, 2018, there were 2,966,904 barrels of intermediates and refined products (3,000,142 barrels at December 31, 2017) outstanding under these derivative instruments designated as fair value hedges. These volumes represent the notional value of the contract.

The Company also enters into economic hedges primarily consisting of commodity derivative contracts that are not designated as hedges and are used to manage price volatility in certain crude oil and feedstock inventories as well as crude oil, feedstock, and refined product sales or purchases. The objective in entering into economic hedges is consistent with the objectives discussed above for fair value hedges. As of September 30, 2018, there were 11,126,000 barrels of crude oil and 3,097,000 barrels of refined products (22,348,000 and 1,989,000, respectively, as of December 31, 2017), outstanding under short and long term commodity derivative contracts not designated as hedges representing the notional value of the contracts.

The following tables provide information about the fair values of these derivative instruments as of September 30, 2018 and December 31, 2017 and the line items in the condensed consolidated balance sheet in which the fair values are reflected.

Description	Balance Sheet Location	Fair Value Asset/(Liability)
Derivatives designated as hedging instruments:
September 30, 2018:
Derivatives included with the inventory intermediation agreement obligations	Accrued expenses	$	(18,422	)
December 31, 2017:
Derivatives included with the inventory intermediation agreement obligations	Accrued expenses	$	(7,721	)
Derivatives not designated as hedging instruments:
September 30, 2018:
Commodity contracts	Accrued expenses	$	(27,372	)
December 31, 2017:
Commodity contracts	Accrued expenses	$	(74,320	)

29

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

The following table provides information about the gains or losses recognized in income on these derivative instruments and the line items in the condensed consolidated statements of operations in which such gains and losses are reflected.

Description	Location of Gain or (Loss) Recognized in  Income on Derivatives	Gain or (Loss) Recognized in Income on Derivatives
Derivatives designated as hedging instruments:
For the three months ended September 30, 2018:
Derivatives included with the inventory intermediation agreement obligations	Cost of products and other	$	(8,163	)
For the three months ended September 30, 2017:
Derivatives included with the inventory intermediation agreement obligations	Cost of products and other	$	(29,766	)
For the nine months ended September 30, 2018:
Derivatives included with the inventory intermediation agreement obligations	Cost of products and other	$	(10,701	)
For the nine months ended September 30, 2017:
Derivatives included with the inventory intermediation agreement obligations	Cost of products and other	$	(26,659	)
Derivatives not designated as hedging instruments:
For the three months ended September 30, 2018:
Commodity contracts	Cost of products and other	$	(9,517	)
For the three months ended September 30, 2017:
Commodity contracts	Cost of products and other	$	(17,291	)
For the nine months ended September 30, 2018:
Commodity contracts	Cost of products and other	$	(55,877	)
For the nine months ended September 30, 2017:
Commodity contracts	Cost of products and other	$	(2,606	)
Hedged items designated in fair value hedges:
For the three months ended September 30, 2018:
Intermediate and refined product inventory	Cost of products and other	$	8,163
For the three months ended September 30, 2017:
Intermediate and refined product inventory	Cost of products and other	$	29,766
For the nine months ended September 30, 2018:
Intermediate and refined product inventory	Cost of products and other	$	10,701
For the nine months ended September 30, 2017:
Intermediate and refined product inventory	Cost of products and other	$	26,659

The Company had no ineffectiveness related to the fair value hedges for the three and nine months ended September 30, 2018 or 2017.

30

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

12. SUBSEQUENT EVENTS

Dividend Declared

On October 31, 2018, PBF Energy, PBF Holding’s indirect parent, announced a dividend of $0.30 per share on its outstanding Class A common stock. The dividend is payable on November 30, 2018 to PBF Energy Class A common stockholders of record at the close of business on November 15, 2018.

31

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

PBF Services Company, Delaware City Refining Company LLC, PBF Power Marketing LLC, Paulsboro Refining Company LLC, Toledo Refining Company LLC, Chalmette Refining, L.L.C., PBF Energy Western Region LLC, Torrance Refining Company LLC, Torrance Logistics Company LLC, PBF International Inc. and PBF Investments LLC are 100% owned subsidiaries of PBF Holding and serve as guarantors of the obligations under the Senior Notes. These guarantees are full and unconditional and joint and several. For purposes of the following footnote, PBF Holding is referred to as “Issuer”. The indentures dated November 24, 2015 and May 30, 2017, among PBF Holding, PBF Finance, the guarantors party thereto and Wilmington Trust, National Association, governs subsidiaries designated as “Guarantor Subsidiaries”. PBF Energy Limited, PBF Transportation Company LLC, PBF Rail Logistics Company LLC, MOEM Pipeline LLC, Collins Pipeline Company, T&M Terminal Company, TVP Holding Company LLC (“TVP Holding”), Torrance Basin Pipeline Company LLC and Torrance Pipeline Company LLC are consolidated subsidiaries of the Company that are not guarantors of the Senior Notes. Additionally, our 50% equity investment in Torrance Valley Pipeline Company, held by TVP Holding is included in our Non-Guarantor financial position and results of operations and cash flows as TVP Holding is not a guarantor of the Senior Notes.

The Senior Notes were co-issued by PBF Finance. For purposes of the following footnote, PBF Finance is referred to as “Co-Issuer.” The Co-Issuer has no independent assets or operations.

The following supplemental combining and condensed consolidating financial information reflects the Issuer’s separate accounts, the combined accounts of the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries, the combining and consolidating adjustments and eliminations and the Issuer’s consolidated accounts for the dates and periods indicated. For purposes of the following combining and consolidating information, the Issuer’s investment in its subsidiaries and the Guarantor subsidiaries’ investments in their subsidiaries are accounted for under the equity method of accounting.

32

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING BALANCE SHEETS

(UNAUDITED)

	September 30, 2018
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	971,349		$	16,021		$	26,024	$	—		$	1,013,394
Accounts receivable	1,024,062			11,575			29,164		—			1,064,801
Accounts receivable - affiliate	1,413			15,521			725		—			17,659
Inventories	2,366,474			—			194,632		—			2,561,106
Prepaid and other current assets	25,356			31,782			1,049		—			58,187
Due from related parties	32,674,797			24,698,233			9,068,281		(66,441,311		)	—
Total current assets	37,063,451			24,773,132			9,319,875		(66,441,311		)	4,715,147
Property, plant and equipment, net	18,641			2,609,644			232,105		—			2,860,390
Investment in subsidiaries	—			387,740			—		(387,740		)	—
Investment in equity method investee	—			—			168,763		—			168,763
Deferred charges and other assets, net	18,595			833,213			34		—			851,842
Total assets	$	37,100,687		$	28,603,729		$	9,720,777	$	(66,829,051	)	$	8,596,142
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	344,287		$	117,388		$	19,525	$	—		$	481,200
Accounts payable - affiliate	32,555			861			38		—			33,454
Accrued expenses	1,732,674			120,001			277,093		—			2,129,768
Current debt	—			1,242			—		—			1,242
Deferred revenue	10,422			1,540			9		—			11,971
Due to related parties	27,745,723			29,697,466			8,998,122		(66,441,311		)	—
Total current liabilities	29,865,661			29,938,498			9,294,787		(66,441,311		)	2,657,635
Long-term debt	1,543,186			42,558			22,993		—			1,608,737
Deferred tax liabilities	—			—			27,778		—			27,778
Other long-term liabilities	47,355			188,998			4,145		—			240,498
Investment in subsidiaries	1,582,991			—			—		(1,582,991		)	—
Total liabilities	33,039,193			30,170,054			9,349,703		(68,024,302		)	4,534,648
Commitments and contingencies (Note 8)
Equity:
PBF Holding Company LLC equity
Member’s equity	2,648,182			1,725,362			327,691		(2,053,053		)	2,648,182
Retained earnings / (accumulated deficit)	1,428,938			(3,292,878		)	43,383		3,249,495			1,428,938
Accumulated other comprehensive loss	(26,477		)	(9,660		)	—		9,660			(26,477		)
Total PBF Holding Company LLC equity	4,050,643			(1,577,176		)	371,074		1,206,102			4,050,643
Noncontrolling interest	10,851			10,851			—		(10,851		)	10,851
Total equity	4,061,494			(1,566,325		)	371,074		1,195,251			4,061,494
Total liabilities and equity	$	37,100,687		$	28,603,729		$	9,720,777	$	(66,829,051	)	$	8,596,142

33

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING BALANCE SHEETS

(UNAUDITED)

	December 31, 2017
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	486,568		$	13,456		$	26,136	$	—		$	526,160
Accounts receivable	903,298			7,605			40,226		—			951,129
Accounts receivable - affiliate	2,321			5,300			731		—			8,352
Inventories	1,982,315			—			231,482		—			2,213,797
Prepaid and other current assets	20,523			27,100			1,900		—			49,523
Due from related parties	28,632,914			23,302,660			6,820,693		(58,756,267		)	—
Total current assets	32,027,939			23,356,121			7,121,168		(58,756,267		)	3,748,961
Property, plant and equipment, net	21,785			2,547,229			236,376		—			2,805,390
Investment in subsidiaries	—			413,136			—		(413,136		)	—
Investment in equity method investee	—			—			171,903		—			171,903
Deferred charges and other assets, net	30,141			749,749			34		—			779,924
Total assets	$	32,079,865		$	27,066,235		$	7,529,481	$	(59,169,403	)	$	7,506,178
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	413,829		$	137,149		$	21,954	$	—		$	572,932
Accounts payable - affiliate	39,952			865			—		—			40,817
Accrued expenses	1,409,212			122,722			268,925		—			1,800,859
Current debt	—			10,987			—		—			10,987
Deferred revenue	6,005			1,472			18		—			7,495
Note payable	—			5,621			—		—			5,621
Due to related parties	24,813,299			27,166,679			6,776,289		(58,756,267		)	—
Total current liabilities	26,682,297			27,445,495			7,067,186		(58,756,267		)	2,438,711
Long-term debt	1,550,206			48,024			28,019		—			1,626,249
Deferred tax liabilities	—			—			33,155		—			33,155
Other long-term liabilities	30,612			189,204			4,145		—			223,961
Investment in subsidiaries	632,648			—			—		(632,648		)	—
Total liabilities	28,895,763			27,682,723			7,132,505		(59,388,915		)	4,322,076
Commitments and contingencies (Note 8)
Equity:
PBF Holding Company LLC equity
Member’s equity	2,359,791			1,731,268			343,940		(2,075,208		)	2,359,791
Retained earnings / (accumulated deficit)	840,431			(2,348,904		)	53,036		2,295,868			840,431
Accumulated other comprehensive loss	(26,928		)	(9,660		)	—		9,660			(26,928		)
Total PBF Holding Company LLC equity	3,173,294			(627,296		)	396,976		230,320			3,173,294
Noncontrolling interest	10,808			10,808			—		(10,808		)	10,808
Total equity	3,184,102			(616,488		)	396,976		219,512			3,184,102
Total liabilities and equity	$	32,079,865		$	27,066,235		$	7,529,481	$	(59,169,403	)	$	7,506,178

34

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended September 30, 2018
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total
Revenues	$	7,565,959		$	460,805		$	852,441		$	(1,236,734	)	$	7,642,471
Cost and expenses:
Cost of products and other	6,986,334			279,448			847,650			(1,236,734		)	6,876,698
Operating expenses (excluding depreciation and amortization expense as reflected below)	163			400,953			8,484			—			409,600
Depreciation and amortization expense	—			81,431			1,922			—			83,353
Cost of sales	6,986,497			761,832			858,056			(1,236,734		)	7,369,651
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	59,304			6,050			(485		)	—			64,869
Depreciation and amortization expense	2,594			—			—			—			2,594
Equity income in investee	—			—			(4,725		)	—			(4,725		)
Gain on sale of assets	—			(43,745		)	—			—			(43,745		)
Total cost and expenses	7,048,395			724,137			852,846			(1,236,734		)	7,388,644
Income (loss) from operations	517,564			(263,332		)	(405		)	—			253,827
Other income (expense):
Equity in (loss) earnings of subsidiaries	(261,695		)	40			—			261,655			—
Change in fair value of catalyst leases	—			1,630			—			—			1,630
Interest expense, net	(31,074		)	(408		)	(274		)	—			(31,756		)
Other non-service components of net periodic benefit cost	(97		)	375			—			—			278
Income (loss) before income taxes	224,698			(261,695		)	(679		)	261,655			223,979
Income tax benefit	—			—			(719		)	—			(719		)
Net income (loss)	224,698			(261,695		)	40			261,655			224,698
Less: net income attributable to noncontrolling interests	35			35			—			(35		)	35
Net income (loss) attributable to PBF Holding Company LLC	$	224,663		$	(261,730	)	$	40		$	261,690		$	224,663
Comprehensive income (loss) attributable to PBF Holding Company LLC	$	224,840		$	(261,730	)	$	40		$	261,690		$	224,840

35

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended September 30, 2017
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total
Revenues	$	5,410,245		$	223,582		$	536,386		$	(694,397	)	$	5,475,816
Cost and expenses:
Cost of products and other	4,483,164			85,031			538,011			(694,397		)	4,411,809
Operating expenses (excluding depreciation and amortization expense as reflected below)	289			380,864			8,351			—			389,504
Depreciation and amortization expense	—			68,419			1,919			—			70,338
Cost of sales	4,483,453			534,314			548,281			(694,397		)	4,871,651
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	49,864			4,959			(146		)	—			54,677
Depreciation and amortization expense	2,572			—			—			—			2,572
Equity income in investee	—			—			(3,799		)	—			(3,799		)
Loss on sale of assets	—			28			—			—			28
Total cost and expenses	4,535,889			539,301			544,336			(694,397		)	4,925,129
Income (loss) from operations	874,356			(315,719		)	(7,950		)	—			550,687
Other income (expense):
Equity in (loss) earnings of subsidiaries	(319,568		)	2,467			—			317,101			—
Change in fair value of catalyst leases	—			473			—			—			473
Interest expense, net	(28,692		)	(305		)	(272		)	—			(29,269		)
Other non-service components of net periodic benefit cost	(16		)	(87		)	—			—			(103		)
Income (loss) before income taxes	526,080			(313,171		)	(8,222		)	317,101			521,788
Income tax benefit	—			—			(4,292		)	—			(4,292		)
Net income (loss)	526,080			(313,171		)	(3,930		)	317,101			526,080
Less: net loss attributable to noncontrolling interests	(6		)	(6		)	—			6			(6		)
Net income (loss) attributable to PBF Holding Company LLC	$	526,086		$	(313,165	)	$	(3,930	)	$	317,095		$	526,086
Comprehensive income (loss) attributable to PBF Holding Company LLC	$	526,373		$	(313,165	)	$	(3,930	)	$	317,095		$	526,373

36

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(UNAUDITED)

	Nine Months Ended September 30, 2018
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total
Revenues	$	20,679,860		$	1,514,588		$	2,441,647		$	(3,753,553	)	$	20,882,542
Cost and expenses:
Cost of products and other	18,853,086			1,040,893			2,438,031			(3,753,553		)	18,578,457
Operating expenses (excluding depreciation and amortization expense as reflected below)	194			1,200,736			22,868			—			1,223,798
Depreciation and amortization expense	—			237,195			5,765			—			242,960
Cost of sales	18,853,280			2,478,824			2,466,664			(3,753,553		)	20,045,215
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	154,167			19,034			1,694			—			174,895
Depreciation and amortization expense	7,871			—			—			—			7,871
Equity income in investee	—			—			(13,110		)	—			(13,110		)
Gain on sale of assets	—			(43,072		)	—			—			(43,072		)
Total cost and expenses	19,015,318			2,454,786			2,455,248			(3,753,553		)	20,171,799
Income (loss) from operations	1,664,542			(940,198		)	(13,601		)	—			710,743
Other income (expense):
Equity in loss of subsidiaries	(943,652		)	(9,009		)	—			952,661			—
Change in fair value of catalyst leases	—			5,783			—			—			5,783
Interest expense, net	(95,968		)	(1,340		)	(814		)	—			(98,122		)
Other non-service components of net periodic benefit cost	(282		)	1,112			3			—			833
Income (loss) before income taxes	624,640			(943,652		)	(14,412		)	952,661			619,237
Income tax benefit	—			—			(5,403		)	—			(5,403		)
Net income (loss)	624,640			(943,652		)	(9,009		)	952,661			624,640
Less: net income attributable to noncontrolling interests	43			43			—			(43		)	43
Net income (loss) attributable to PBF Holding Company LLC	$	624,597		$	(943,695	)	$	(9,009	)	$	952,704		$	624,597
Comprehensive income (loss) attributable to PBF Holding Company LLC	$	625,048		$	(943,695	)	$	(9,009	)	$	952,704		$	625,048

37

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(UNAUDITED)

	Nine Months Ended September 30, 2017
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total
Revenues	$	15,064,488		$	983,917		$	1,578,553		$	(2,387,693	)	$	15,239,265
Cost and expenses:
Cost of products and other	13,547,358			615,093			1,551,638			(2,387,693		)	13,326,396
Operating expenses (excluding depreciation and amortization expense as reflected below)	(42		)	1,200,113			24,686			—			1,224,757
Depreciation and amortization expense	—			175,543			5,695			—			181,238
Cost of sales	13,547,316			1,990,749			1,582,019			(2,387,693		)	14,732,391
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	112,370			18,410			(736		)	—			130,044
Depreciation and amortization expense	10,355			—			—			—			10,355
Equity income in investee	—			—			(11,218		)	—			(11,218		)
Loss on sale of assets	—			940			—			—			940
Total cost and expenses	13,670,041			2,010,099			1,570,065			(2,387,693		)	14,862,512
Income (loss) from operations	1,394,447			(1,026,182		)	8,488			—			376,753
Other income (expense):
Equity in (loss) earnings of subsidiaries	(1,022,866		)	5,802			—			1,017,064			—
Change in fair value of catalyst leases	—			(1,011		)	—			—			(1,011		)
Debt extinguishment costs	(25,451		)	—			—			—			(25,451		)
Interest expense, net	(90,918		)	(1,143		)	(721		)	—			(92,782		)
Other non-service components of net periodic benefit cost	(48		)	(257		)	—			—			(305		)
Income (loss) before income taxes	255,164			(1,022,791		)	7,767			1,017,064			257,204
Income tax expense	—			—			2,040			—			2,040
Net income (loss)	255,164			(1,022,791		)	5,727			1,017,064			255,164
Less: net income attributable to noncontrolling interests	374			374			—			(374		)	374
Net income (loss) attributable to PBF Holding Company LLC	$	254,790		$	(1,023,165	)	$	5,727		$	1,017,438		$	254,790
Comprehensive income (loss) attributable to PBF Holding Company LLC	$	255,728		$	(1,023,165	)	$	5,727		$	1,017,438		$	255,728

38

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended September 30, 2018
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total
Cash flows from operating activities:
Net income (loss)	$	624,640		$	(943,652	)	$	(9,009	)	$	952,661		$	624,640
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	12,548			237,234			5,832			—			255,614
Stock-based compensation	—			14,059			—			—			14,059
Change in fair value of catalyst leases	—			(5,783		)	—			—			(5,783		)
Deferred income taxes	—			—			(5,377		)	—			(5,377		)
Non-cash change in inventory repurchase obligations	10,701			—			—			—			10,701
Non-cash lower of cost or market inventory adjustment	(300,456		)	—			—			—			(300,456		)
Pension and other post-retirement benefit costs	5,626			29,910			—			—			35,536
Income from equity method investee	—			—			(13,110		)	—			(13,110		)
Distributions from equity method investee	—			—			13,110			—			13,110
Gain on sale of assets	—			(43,072		)	—			—			(43,072		)
Equity in earnings of subsidiaries	943,652			9,009			—			(952,661		)	—
Changes in operating assets and liabilities:
Accounts receivable	(120,764		)	(3,970		)	11,062			—			(113,672		)
Due to/from affiliates	(1,103,057		)	1,112,098			(25,711		)	—			(16,670		)
Inventories	(83,703		)	—			36,850			—			(46,853		)
Prepaid and other current assets	(4,831		)	(4,684		)	851			—			(8,664		)
Accounts payable	(69,542		)	(34,184		)	(2,429		)	—			(106,155		)
Accrued expenses	300,546			(5,962		)	8,010			—			302,594
Deferred revenue	4,417			68			(9		)	—			4,476
Other assets and liabilities	32,188			(21,757		)	(16,893		)	—			(6,462		)
Net cash provided by operating activities	251,965			339,314			3,177			—			594,456
Cash flows from investing activities:
Expenditures for property, plant and equipment	(4,726		)	(159,612		)	(1,337		)	—			(165,675		)
Expenditures for deferred turnaround costs	—			(201,029		)	—			—			(201,029		)
Expenditures for other assets	—			(16,946		)	—			—			(16,946		)
Proceeds from sale of assets	—			48,290			—			—			48,290
Equity method investment - return of capital	—			—			3,140			—			3,140
Due to/from affiliates	(1,143		)	—			—			1,143			—
Net cash (used in) provided by investing activities	(5,869		)	(329,297		)	1,803			1,143			(332,220		)
Cash flows from financing activities:
Contributions from PBF LLC	287,000			—			—			—			287,000
Distribution to members	(36,090		)	—			—			—			(36,090		)
Repayments of PBF Rail Term Loan	—			—			(5,092		)	—			(5,092		)
Repayment of note payable	—			(5,621		)	—			—			(5,621		)
Catalyst lease settlements	—			(9,466		)	—			—			(9,466		)
Due to/from affiliates	—			1,143			—			(1,143		)	—
Proceeds from insurance premium financing	467			6,492			—			—			6,959
Deferred financing cost and other	(12,692		)	—			—			—			(12,692		)
Net cash provided by (used in) financing activities	238,685			(7,452		)	(5,092		)	(1,143		)	224,998
Net increase (decrease) in cash and cash equivalents	484,781			2,565			(112		)	—			487,234
Cash and cash equivalents, beginning of period	486,568			13,456			26,136			—			526,160
Cash and cash equivalents, end of period	$	971,349		$	16,021		$	26,024		$	—		$	1,013,394

39

PBF HOLDING COMPANY LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT UNIT, BARREL AND PER BARREL DATA)

13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF HOLDING

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended September 30, 2017
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total
Cash flows from operating activities:
Net income (loss)	$	255,164		$	(1,022,791	)	$	5,727		$	1,017,064		$	255,164
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization	15,746			175,859			5,760			—			197,365
Stock-based compensation	—			13,549			—			—			13,549
Change in fair value of catalyst leases	—			1,011			—			—			1,011
Deferred income taxes	—			—			641			—			641
Non-cash change in inventory repurchase obligations	(26,659		)	—			—			—			(26,659		)
Non-cash lower of cost or market inventory adjustment	(97,943		)	—			—			—			(97,943		)
Debt extinguishment costs	25,451			—			—			—			25,451
Pension and other post-retirement benefit costs	4,956			26,726			—			—			31,682
Income from equity method investee	—			—			(11,218		)	—			(11,218		)
Distributions from equity method investee	—			—			16,897			—			16,897
Loss on sale of assets	—			940			—			—			940
Equity in earnings (loss) of subsidiaries	1,022,866			(5,802		)	—			(1,017,064		)	—
Changes in operating assets and liabilities:
Accounts receivable	(119,813		)	(1,782		)	(37,431		)	—			(159,026		)
Due to/from affiliates	(1,494,632		)	1,451,846			40,468			—			(2,318		)
Inventories	(286,677		)	—			(62,512		)	—			(349,189		)
Prepaid and other current assets	4,200			(8,467		)	160			—			(4,107		)
Accounts payable	(50,102		)	(58,691		)	4,261			1,463			(103,069		)
Accrued expenses	365,132			(13,352		)	49,894			—			401,674
Deferred revenue	(7,687		)	(1,364		)	7			—			(9,044		)
Other assets and liabilities	(14,472		)	(26,189		)	(16,726		)	—			(57,387		)
Net cash (used in) provided by operations	(404,470		)	531,493			(4,072		)	1,463			124,414
Cash flows from investing activities:
Expenditures for property, plant and equipment	(847		)	(210,076		)	(301		)	—			(211,224		)
Expenditures for deferred turnaround costs	—			(341,598		)	—			—			(341,598		)
Expenditures for other assets	—			(31,096		)	—			—			(31,096		)
Equity method investment - return of capital	—			—			451			—			451
Due to/from affiliates	(3,684		)	—			—			3,684			—
Net cash (used in) provided by investing activities	(4,531		)	(582,770		)	150			3,684			(583,467		)
Cash flows from financing activities:
Contributions from PBF LLC	97,000			—			—			—			97,000
Distributions to members	(39,315		)	—			—			—			(39,315		)
Proceeds from 2025 Senior Notes	725,000			—			—			—			725,000
Cash paid to extinguish 2020 Senior Secured Notes	(690,209		)	—			—			—			(690,209		)
Repayments of PBF Rail Term Loan	—			—			(4,959		)	—			(4,959		)
Proceeds from revolver borrowings	490,000			—			—			—			490,000
Repayments of revolver borrowings	(490,000		)	—			—			—			(490,000		)
Due to/from affiliates	—			3,684			—			(3,684		)	—
Deferred financing costs and other	(13,424		)	—			—			—			(13,424		)
Net cash provided by (used in) financing activities	79,052			3,684			(4,959		)	(3,684		)	74,093
Net decrease in cash and cash equivalents	(329,949		)	(47,593		)	(8,881		)	1,463			(384,960		)
Cash and cash equivalents, beginning of period	530,085			56,717			41,366			(1,463		)	626,705
Cash and cash equivalents, end of period	$	200,136		$	9,124		$	32,485		$	—		$	241,745

40

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited financial statements of PBF Holding Company LLC included in the Annual Report on Form 10-K for the year ended December 31, 2017 and the unaudited financial statements and related notes included in this report. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Cautionary Note Regarding Forward-Looking Statements.”

Unless the context indicates otherwise, the terms “we,” “us,” and “our” refer to PBF Holding and its consolidated subsidiaries.

Overview

We are one of the largest independent petroleum refiners and suppliers of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products in the United States. We sell our products throughout the Northeast, Midwest, Gulf Coast and West Coast of the United States, as well as in other regions of the United States, Canada and Mexico and are able to ship products to other international destinations. As of September 30, 2018, we own and operate five domestic oil refineries and related assets with a combined processing capacity, known as throughput, of approximately 900,000 barrels per day (“bpd”), and a weighted-average Nelson Complexity Index of 12.2. Our five oil refineries are aggregated into one reportable segment.

Our five refineries are located in Delaware City, Delaware, Paulsboro, New Jersey, Toledo, Ohio, New Orleans, Louisiana and Torrance, California. Each refinery is briefly described in the table below:

Refinery	Region	Nelson Complexity Index	Throughput Capacity (in barrels per day)	PADD	Crude Processed (1)	Source (1)
Delaware City	East Coast	11.3	190,000	1	light sweet through heavy sour	water, rail
Paulsboro	East Coast	13.2	180,000	1	light sweet through heavy sour	water
Toledo	Mid-Continent	9.2	170,000	2	light sweet	pipeline, truck, rail
Chalmette	Gulf Coast	12.7	189,000	3	light sweet through heavy sour	water, pipeline
Torrance	West Coast	14.9	155,000	5	medium and heavy	pipeline, water, truck

________

⁽¹⁾ Reflects the typical crude and feedstocks and related sources utilized under normal operating conditions and prevailing market environments.

We are a wholly-owned subsidiary of PBF LLC and an indirect subsidiary of PBF Energy. PBF Finance is a wholly-owned subsidiary of PBF Holding. We are the parent company for PBF LLC’s refinery operating subsidiaries.

Factors Affecting Comparability Between Periods

Our results have been affected by the following events, the understanding of which will aid in assessing the comparability of our period to period financial performance and financial condition.

41

Torrance Land Sale

During the three months ended September 30, 2018, the Company closed on a third party sale of a parcel of real property acquired as part of the Torrance Refinery, but not part of the refinery itself. The sale resulted in a gain of approximately $43.8 million included within Gain on sale of assets within the Condensed Consolidated Statements of Operations.

Early Return of Railcars

On September 30, 2018, we agreed to voluntarily return a portion of railcars under an operating lease in order to rationalize certain components of our railcar fleet based on prevailing market conditions in the crude oil by rail market. Under the terms of the lease amendment, we will pay agreed amounts in lieu of satisfaction of return conditions (the “early termination penalty”) and will pay a reduced rental fee over the remaining term of the lease. Certain of these railcars are idle and the remaining railcars will be taken out of service during the fourth quarter of 2018 and subsequently fully returned to the lessor. As a result, we recognized an expense of $44.6 million for the three months ended September 30, 2018 included within Cost of sales consisting of (i) a $40.3 million charge for the early termination penalty and (ii) a $4.3 million charge related to the remaining lease payments associated with the portion of railcars within the amended lease that were idled and out of service as of September 30, 2018. In addition, we expect to recognize a charge of $7.7 million subsequent to September 30, 2018 relating to the residual lease payments as the remaining railcars are taken out of service and returned to the lessor. We have recorded a liability within Accrued expenses for $25.8 million representing the amount of the early lease termination obligation expected to be paid within the next twelve months and a liability within Other long-term liabilities for $18.7 million representing the remaining amount of the obligation.

PBF Holding Revolving Credit Facility

On May 2, 2018, we and certain of our wholly-owned subsidiaries, as borrowers or subsidiary guarantors, replaced our existing asset-based revolving credit agreement dated as of August 15, 2014 (the “August 2014 Revolving Credit Agreement”) with a new asset-based revolving credit agreement (the “2018 Revolving Credit Agreement"). Among other things, the 2018 Revolving Credit Agreement increases the maximum commitment available to us from $2.6 billion to $3.4 billion, extends the maturity date to May 2023, and redefines certain components of the Borrowing Base, as defined in the credit agreement, to make more funding available for working capital and other general corporate purposes. In addition, an accordion feature allows for commitments of up to $3.5 billion. The commitment fees on the unused portion, the interest rate on advances and the fees for letters of credit are consistent with the August 2014 Revolving Credit Agreement.

Senior Notes Offering

On May 30, 2017, we and PBF Finance issued $725.0 million in aggregate principal amount of 7.25% senior notes due 2025 (the “2025 Senior Notes”). We used the net proceeds of $711.6 million to fund the cash tender offer (the “Tender Offer”) for any and all of our outstanding 8.25% senior secured notes due 2020 (the “2020 Senior Secured Notes”), to pay the related redemption price and accrued and unpaid interest for any 2020 Senior Secured Notes that remained outstanding after the completion of the Tender Offer, and for general corporate purposes. Upon the satisfaction and discharge of the 2020 Senior Secured Notes in connection with the closing of the Tender Offer and the redemption, the 7.00% senior notes due 2023 (the “2023 Senior Notes”) became unsecured and certain covenants were modified, as provided for in the indenture governing the 2023 Senior Notes and related documents.

Inventory Intermediation Agreements

On May 4, 2017 and September 8, 2017, we and our subsidiaries, DCR and PRC, entered into amendments to the inventory intermediation agreements (as amended the “Inventory Intermediation Agreements") with J. Aron & Company, a subsidiary of The Goldman Sachs Group, Inc. (“J. Aron”), pursuant to which certain terms of the existing inventory intermediation agreements were amended, including, among other things, pricing and an extension of the terms. As a result of the amendments (i) the Inventory Intermediation Agreement by and among J. Aron, us and PRC relating to the Paulsboro refinery extends the term to December 31, 2019, which term may be further extended by mutual consent of the parties to December 31, 2020 and (ii) the Inventory Intermediation Agreement by and among J. Aron, us and DCR relating to the Delaware City refinery extends the term to July 1, 2019, which term may be further extended by mutual consent of the parties to July 1, 2020.

42

Agreements with PBFX

PBFX is a fee-based, growth-oriented, publicly traded Delaware master limited partnership formed by our indirect parent company, PBF Energy, to own or lease, operate, develop and acquire crude oil, refined petroleum products and natural gas terminals, pipelines, storage facilities and similar logistics assets. PBFX engages in the receiving, handling, storage and transferring of crude oil, refined products, natural gas and intermediates from sources located throughout the United States and Canada for PBF Energy in support of certain of our refineries, as well as for third-party customers.

We have entered into a series of agreements with PBFX, including contribution, commercial and operational agreements. Refer to “Note 7 - Related Party Transactions” of our Notes to Condensed Consolidated Financial Statements, for descriptions of these agreements and their impact to our operations. Transactions that have an impact on the comparability of our period to period financial performance and financial condition are listed below.

On February 15, 2017, PBFX entered into a contribution agreement (the “PNGPC Contribution Agreement”) between PBFX and PBF LLC, pursuant to which we contributed to PBF LLC, which, in turn, contributed to PBFX’s wholly-owned subsidiary PBFX Operating Company LLC (“PBFX Op Co”) all of the issued and outstanding limited liability company interests of Paulsboro Natural Gas Pipeline Company LLC (“PNGPC”). PNGPC owns and operates an interstate natural gas pipeline. In August 2017, PBFX completed construction of a new 24" pipeline to replace the existing pipeline and commenced services. In consideration for the PNGPC limited liability company interests, PBFX delivered to PBF LLC (i) an $11.6 million affiliate promissory note in favor of PRC, a wholly-owned subsidiary of ours (the “Promissory Note”), (ii) an expansion rights and right of first refusal agreement in favor of PBF LLC with respect to the new pipeline and (iii) an assignment and assumption agreement with respect to certain outstanding litigation involving PNGPC and the existing pipeline. Following the completion of the Paulsboro Natural Gas Pipeline in the fourth quarter of 2017, we received full payment of the affiliate promissory note due from PBFX.

On February 15, 2017, we entered into a ten-year storage services agreement with PBFX Op Co (the “Chalmette Storage Services Agreement”) under which PBFX, through PBFX Op Co, began providing storage services to us commencing on November 1, 2017 upon the completion of the construction of a new crude tank with a shell capacity of 625,000 barrels at our Chalmette refinery (the “Chalmette Storage Tank”). PBFX Op Co and Chalmette Refining entered into a twenty-year lease for the premises upon which the tank is located (the “Lease”) and a project management agreement (the “Project Management Agreement”) pursuant to which Chalmette Refining managed the construction of the tank. The Lease can be extended by PBFX Op Co for two additional ten-year periods.

On April 16, 2018, PBFX 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 with nine loading bays (the “Knoxville Terminals”) from Cummins Terminals, Inc. (the “Knoxville Terminals Purchase”). In connection with the Knoxville Terminals Purchase, we and PBFX entered into a terminal throughput and storage agreement (the “Knoxville Terminals Agreement”) wherein PBFX provides us terminaling and storage services at the Knoxville Terminals. The initial term of the Knoxville Terminals Agreement is five years with automatic one year renewals unless canceled by either party through written notice. Under the Knoxville Terminals Agreement, we have a minimum volume commitment for storage and a minimum revenue commitment for throughput. If we do not throughput or store the aggregate amounts equal to the minimum throughput revenue or available shell capacity as described in “Note 7 - Related Party Transactions” of our Notes to Condensed Consolidated Financial Statements), we will be required to pay a shortfall payment equal to the shortfall revenue or capacity.

On May 2, 2018, the Delaware City Rail Terminaling Services Agreement and the Delaware West Ladder Rack Terminaling Services Agreement between us and Delaware City Terminaling Company LLC were amended effective as of January 1, 2018 (collectively, the “Amended and Restated Rail Agreements”) with the service fees thereunder being adjusted, including the addition of an ancillary fee paid by us on an actual cost basis. In determining payments due under the Amended and Restated Rail Agreements, excess volumes throughput under the agreements shall apply against required payments in respect to the minimum throughput commitments on a quarterly basis and, to the extent not previously applied, on an annual basis against the minimum volume commitment (as defined in “Note 7 - Related Party Transactions” of our Notes to Condensed Consolidated Financial Statements).

Pursuant to contribution agreements entered into on July 16, 2018, we contributed certain of our subsidiaries (the “Development Assets Acquisition”) to PBF LLC. PBFX Op Co, in turn acquired the subsidiary assets from

43

PBF LLC that included the Toledo Rail Products Facility, an unloading and loading rail facility; the Chalmette Truck Rack, a truck loading rack facility; the Chalmette Rosin Yard, a rail yard facility; the Paulsboro Lube Oil Terminal, a lubes oil terminal facility; and the Delaware Ethanol Storage Facility, an ethanol storage facility (collectively, the “Development Assets”). The Development Assets Acquisition closed on July 31, 2018 for total consideration of $31.6 million consisting of 1,494,134 common units of PBFX issued to PBF LLC.

A summary of transactions with PBFX is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Reimbursements under affiliate agreements:
Services Agreement	$	1,979	$	1,639	$	5,327	$	4,918
Omnibus Agreement	1,927		1,890		5,364		5,174
Total expenses under affiliate agreements	66,140		62,359		190,789		176,916

44

Results of Operations

The following tables reflect our financial and operating highlights for the three and nine months ended September 30, 2018 and 2017 (amounts in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2018			2017			2018			2017
Revenues	$	7,642,471		$	5,475,816		$	20,882,542		$	15,239,265
Cost and expenses:
Cost of products and other	6,876,698			4,411,809			18,578,457			13,326,396
Operating expenses (excluding depreciation and amortization expense as reflected below)	409,600			389,504			1,223,798			1,224,757
Depreciation and amortization expense	83,353			70,338			242,960			181,238
Cost of sales	7,369,651			4,871,651			20,045,215			14,732,391
General and administrative expenses (excluding depreciation and amortization expense as reflected below)	64,869			54,677			174,895			130,044
Depreciation and amortization expense	2,594			2,572			7,871			10,355
Equity income in investee	(4,725		)	(3,799		)	(13,110		)	(11,218		)
(Gain) loss on sale of assets	(43,745		)	28			(43,072		)	940
Total cost and expenses	7,388,644			4,925,129			20,171,799			14,862,512
Income from operations	253,827			550,687			710,743			376,753
Other income (expense):
Change in fair value of catalyst leases	1,630			473			5,783			(1,011		)
Debt extinguishment costs	—			—			—			(25,451		)
Interest expense, net	(31,756		)	(29,269		)	(98,122		)	(92,782		)
Other non-service components of net periodic benefit cost	278			(103		)	833			(305		)
Income before income taxes	223,979			521,788			619,237			257,204
Income tax (benefit) expense	(719		)	(4,292		)	(5,403		)	2,040
Net income	224,698			526,080			624,640			255,164
Less: net income (loss) attributable to noncontrolling interests	35			(6		)	43			374
Net income attributable to PBF Holding Company LLC	$	224,663		$	526,086		$	624,597		$	254,790
Consolidated gross margin	$	272,820		$	604,165		$	837,327		$	506,874
Gross refining margin (1)	$	765,773		$	1,064,007		$	2,304,085		$	1,912,869

(1) See Non-GAAP Financial Measures.

45

Operating Highlights	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2018			2017			2018			2017
Key Operating Information
Production (bpd in thousands)	896.7			852.6			854.0			781.6
Crude oil and feedstocks throughput (bpd in thousands)	888.4			849.7			851.8			786.1
Total crude oil and feedstocks throughput (millions of barrels)	81.7			78.2			232.5			214.6
Consolidated gross margin per barrel of throughput	$	3.34		$	7.73		$	3.60		$	2.36
Gross refining margin, excluding special items, per barrel of throughput (1)	$	9.25		$	10.22		$	8.80		$	8.46
Refinery operating expense, per barrel of throughput	$	5.01		$	4.98		$	5.26		$	5.71
Crude and feedstocks(% of total throughput)(2)
Heavy	35		%	33		%	36		%	34		%
Medium	28		%	30		%	30		%	30		%
Light	23		%	22		%	21		%	21		%
Other feedstocks and blends	14		%	15		%	13		%	15		%
Total throughput	100		%	100		%	100		%	100		%
Yield (% of total throughput)
Gasoline and gasoline blendstocks	49		%	50		%	49		%	50		%
Distillates and distillate blendstocks	32		%	29		%	32		%	29		%
Lubes	1		%	1		%	1		%	1		%
Chemicals	2		%	2		%	2		%	2		%
Other	17		%	18		%	16		%	17		%
Total yield	101		%	100		%	100		%	99		%

(1) See Non-GAAP Financial Measures.

(2) We define heavy crude oil as crude oil with American Petroleum Institute (API) gravity less than 24 degrees. We define medium crude oil as crude oil with API gravity between 24 and 35 degrees. We define light crude oil as crude oil with API gravity higher than 35 degrees.

46

The table below summarizes certain market indicators relating to our operating results as reported by Platts.

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2018			2017			2018			2017
	(dollars per barrel, except as noted)
Dated Brent Crude	$	75.07		$	52.16		$	72.19		$	51.79
West Texas Intermediate (WTI) crude oil	$	69.63		$	48.18		$	66.90		$	49.32
Light Louisiana Sweet (LLS) crude oil	$	74.15		$	51.67		$	71.11		$	51.73
Alaska North Slope (ANS) crude oil	$	75.26		$	52.04		$	72.19		$	52.15
Crack Spreads
Dated Brent (NYH) 2-1-1	$	14.62		$	18.12		$	14.15		$	14.84
WTI (Chicago) 4-3-1	$	18.05		$	18.82		$	15.84		$	14.70
LLS (Gulf Coast) 2-1-1	$	13.38		$	16.69		$	13.26		$	13.75
ANS (West Coast) 4-3-1	$	14.84		$	20.66		$	16.67		$	18.78
Crude Oil Differentials
Dated Brent (foreign) less WTI	$	5.44		$	3.97		$	5.29		$	2.47
Dated Brent less Maya (heavy, sour)	$	9.12		$	8.75		$	10.21		$	6.77
Dated Brent less WTS (sour)	$	19.79		$	4.96		$	13.41		$	3.63
Dated Brent less ASCI (sour)	$	4.42		$	3.82		$	4.69		$	3.58
WTI less WCS (heavy, sour)	$	29.30		$	10.03		$	24.55		$	10.83
WTI less Bakken (light, sweet)	$	1.08		$	(0.69	)	$	0.87		$	0.18
WTI less Syncrude (light, sweet)	$	5.59		$	(1.95	)	$	3.00		$	(1.86	)
WTI less LLS (light, sweet)	$	(4.52	)	$	(3.49	)	$	(4.21	)	$	(2.41	)
WTI less ANS (light, sweet)	$	(5.63	)	$	(3.86	)	$	(5.29	)	$	(2.82	)
Natural gas (dollars per MMBTU)	$	2.86		$	2.95		$	2.85		$	3.05

Three Months Ended September 30, 2018 Compared to the Three Months Ended September 30, 2017

Overview— Net income was $224.7 million for the three months ended September 30, 2018 compared to $526.1 million for the three months ended September 30, 2017.

Our results for the three months ended September 30, 2018 were positively impacted by special items consisting of a non-cash lower of cost or market (“LCM”) inventory adjustment of approximately $54.8 million and a gain on the Torrance land sale of $43.8 million. These favorable impacts were partially offset by a special item related to the early return of certain leased railcars, resulting in a charge of $44.6 million. Our results for the three months ended September 30, 2017 were positively impacted by an LCM inventory adjustment of approximately $265.1 million. The LCM inventory adjustments were recorded due to movements in the price of crude oil and refined products in the periods presented.

Excluding the impact of these special items, our results were positively impacted by favorable movements in crude differentials, higher throughput volumes and barrels sold across the majority of our refineries and reduced regulatory compliance costs, offset by lower crack spreads realized at each of our refineries, which were favorably impacted in the prior year by the hurricane-related effect on refining margins due to tightening product inventories, specifically distillates. Our results in the current period were negatively impacted by higher general and administrative costs and increased depreciation and amortization expense.

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Revenues— Revenues totaled $7.6 billion for the three months ended September 30, 2018 compared to $5.5 billion for the three months ended September 30, 2017, an increase of approximately $2.2 billion, or 39.6%. Revenues per barrel were 83.51 and 63.75 for the three months ended September 30, 2018 and 2017, respectively, an increase of 31.0% directly related to higher hydrocarbon commodity prices. For the three months ended September 30, 2018, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 354,600 bpd, 172,100 bpd, 195,500 bpd and 166,200 bpd, respectively. For the three months ended September 30, 2017, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 343,700 bpd, 160,600 bpd, 200,400 bpd and 145,000 bpd, respectively. The throughput rates at our East Coast, Mid-Continent and West Coast refineries were higher in the three months ended September 30, 2018 compared to the same period in 2017. Throughput rates at our Gulf Coast refinery were in line with the same quarter of the prior year, whereas our East Coast and Mid-Continent refineries ran at higher rates during the quarter taking advantage of a relatively strong margin environment. The throughput rates at our West Coast refinery increased due to planned downtime in 2017 related to its first significant turnaround under our ownership, which was completed early in the third quarter of 2017. For the three months ended September 30, 2018, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 380,200 bpd, 175,800 bpd, 242,800 bpd and 196,000 bpd, respectively. For the three months ended September 30, 2017, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 359,700 bpd, 167,300 bpd, 233,400 bpd and 173,300 bpd, respectively. Total refined product barrels sold were higher than throughput rates, reflecting sales from inventory as well as sales and purchases of refined products outside the refinery.

Consolidated Gross Margin— Consolidated gross margin totaled $272.8 million for the three months ended September 30, 2018 compared to $604.2 million for the three months ended September 30, 2017, a decrease of approximately $331.3 million. Gross refining margin (as described below in Non-GAAP Financial Measures) totaled $765.8 million, or $9.37 per barrel of throughput ($755.5 million or $9.25 per barrel of throughput excluding the impact of special items), for the three months ended September 30, 2018 compared to $1,064.0 million, or $13.61 per barrel of throughput ($798.9 million or $10.22 per barrel of throughput excluding the impact of special items) for the three months ended September 30, 2017, a decrease of approximately$298.2 million, or $43.4 million excluding special items.

Consolidated gross margin and gross refining margin decreased due to overall lower crack spreads in comparison to the same period in 2017, partially offset by favorable movements in crude differentials and higher throughput volumes and barrels sold across the majority of our refineries. During the three months ended September 30, 2017 we experienced higher crack spreads realized at each of our refineries, which were impacted by the hurricane-related reduction in refining throughput in the Gulf Coast region. In addition, consolidated gross margin and gross refining margin were positively impacted in the current and prior year by special items. For the three months ended September 30, 2018, special items impacting our margin calculations included a non-cash LCM inventory adjustment of approximately $54.8 million on a net basis, resulting from an increase in crude oil and refined product prices in comparison to the prices at end of the second quarter of 2018, partially offset by a $44.6 million charge resulting from costs associated with the early return of certain leased railcars. The non-cash LCM inventory adjustment increased gross margin and gross refining margin by approximately $265.1 million on a net basis in the third quarter of 2017.

Additionally, our results continue to be impacted by significant costs to comply with the Renewable Fuel Standard (“RFS”), although at a reduced level from the prior year. Total RFS costs were $33.9 million for the three months ended September 30, 2018 in comparison to $83.4 million for the three months ended September 30, 2017.

Average industry refining margins in the Mid-Continent were slightly weaker during the three months ended September 30, 2018 as compared to the same period in 2017. The WTI (Chicago) 4-3-1 industry crack spread was $18.05 per barrel, or 4.1% lower, in the three months ended September 30, 2018 as compared to $18.82 per barrel in the same period in 2017. Our refinery specific crude slate in the Mid-Continent was impacted by an improving WTI/Bakken differential, which averaged a discount of $1.08 per barrel in the three months ended September 30, 2018, as compared to a premium of $0.69 per barrel in the same period in 2017. Additionally, the WTI/Syncrude

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differential averaged a discount of $5.59 per barrel during the three months ended September 30, 2018 as compared to a premium of $1.95 per barrel in the same period of 2017.

On the East Coast, the Dated Brent (NYH) 2-1-1 industry crack spread was approximately $14.62 per barrel, or 19.3% lower, in the three months ended September 30, 2018, as compared to $18.12 per barrel in the same period in 2017. The Dated Brent/Maya differential was $0.37 higher in the three months ended September 30, 2018 as compared to the same period in 2017 and the Dated Brent/WTI differential was $1.47 higher in the three months ended September 30, 2018 as compared to the same period in 2017.

Gulf Coast industry refining margins weakened during the three months ended September 30, 2018 as compared to the same period in 2017. The LLS (Gulf Coast) 2-1-1 industry crack spread was $13.38 per barrel, or 19.8% lower, in the three months ended September 30, 2018 as compared to $16.69 per barrel in the same period in 2017. Additionally, crude differentials weakened with the WTI/LLS differential averaging a premium of $4.52 per barrel during the three months ended September 30, 2018 as compared to a premium of $3.49 per barrel in the same period of 2017.

Additionally, West Coast industry refining margins decreased during the three months ended September 30, 2018 as compared to the same period in 2017. The ANS (West Coast) 4-3-1 industry crack spread was $14.84 per barrel, or 28.2% lower, in the three months ended September 30, 2018 as compared to $20.66 per barrel in the same period in 2017. Crude differentials weakened with the WTI/ANS differential averaging a premium of $5.63 per barrel during the three months ended September 30, 2018 as compared to a premium of $3.86 per barrel in the same period of 2017.

Favorable movements in these benchmark crude differentials typically result in lower crude costs and positively impact our earnings while reductions in these benchmark crude differentials typically result in higher crude costs and negatively impact our earnings.

Operating Expenses— Operating expenses totaled $409.6 million, or $5.01 per barrel of throughput, for the three months ended September 30, 2018 compared to $389.5 million, or $4.98 per barrel of throughput, for the three months ended September 30, 2017, an increase of $20.1 million, or 5.2%. The increase in operating expenses was driven by higher energy and utility costs driven by higher throughput across our system.

General and Administrative Expenses— General and administrative expenses totaled $64.9 million for the three months ended September 30, 2018 compared to $54.7 million for the three months ended September 30, 2017, an increase of approximately $10.2 million or 18.6%. The increase in general and administrative expenses for the three months ended September 30, 2018 in comparison to the three months ended September 30, 2017 primarily related to higher employee related expenses, including incentive compensation and retirement benefits. Our general and administrative expenses are comprised of the personnel, facilities and other infrastructure costs necessary to support our refineries.

Gain (Loss) on Sale of Assets— There was a net gain of $43.7 million on the sale of assets for the three months ended September 30, 2018 mainly attributable to a $43.8 million gain related to the Torrance land sale. There was a de minimis loss on the sale of non-operating refinery assets for the three months ended September 30, 2017.

Depreciation and Amortization Expense— Depreciation and amortization expense totaled $85.9 million for the three months ended September 30, 2018 (including $83.4 million recorded within Cost of sales) compared to $72.9 million for the three months ended September 30, 2017 (including $70.3 million recorded within Cost of sales), an increase of $13.0 million. The increase was a result of additional depreciation expense associated with a general increase in our fixed asset base due to capital projects and turnarounds completed since the third quarter of 2017 which included the first significant Torrance refinery turnaround under our ownership.

Change in Fair Value of Catalyst Leases— Change in the fair value of catalyst leases represented a gain of $1.6 million for the three months ended September 30, 2018 compared to a gain of $0.5 million for the three months ended September 30, 2017. These gains relate to the change in value of the precious metals underlying the sale

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and leaseback of our refineries’ precious metals catalyst, which we are obligated to repurchase at fair market value on the lease termination dates.

Interest Expense, net— Interest expense was relatively consistent with the same quarter of the prior year totaling $31.8 million for the three months ended September 30, 2018 compared to $29.3 million for the three months ended September 30, 2017. Interest expense includes interest on long-term debt and notes payable, costs related to the sale and leaseback of our precious metals catalyst, financing costs associated with the Inventory Intermediation Agreements with J. Aron, letter of credit fees associated with the purchase of certain crude oils, and the amortization of deferred financing costs.

Income Tax Expense— As PBF Holding is a limited liability company treated as a “flow-through” entity for income tax purposes, our consolidated financial statements generally do not include a benefit or expense for income taxes for the three months ended September 30, 2018 and September 30, 2017, respectively, apart from the income tax attributable to two subsidiaries acquired in connection with the Chalmette Acquisition in the fourth quarter of 2015 and our wholly-owned Canadian subsidiary, PBF Ltd. These subsidiaries are treated as C-Corporations for income tax purposes. An income tax benefit of $0.7 million was recorded for the three months ended September 30, 2018 in comparison to income tax benefit of $4.3 million recorded for the three months ended September 30, 2017, primarily attributable to the results of PBF Ltd.

Nine Months EndedSeptember 30, 2018 Compared to the Nine Months EndedSeptember 30, 2017

Overview— Net income was $624.6 million for the nine months ended September 30, 2018 compared to net income of $255.2 million for the nine months ended September 30, 2017.

Our results for the nine months ended September 30, 2018 were positively impacted by special items consisting of a non-cash LCM inventory adjustment of approximately $300.5 million and a gain on the Torrance land sale of $43.8 million. These favorable impacts were partially offset by a special item related to the early return of certain leased railcars, resulting in a charge of $44.6 million. Our results for the nine months ended September 30, 2017 were positively impacted by an LCM inventory adjustment of approximately $97.9 million and debt extinguishment costs associated with the early retirement of our 2020 Senior Secured Notes of $25.5 million. The LCM inventory adjustments were recorded due to movements in the price of crude oil and refined products in the periods presented.

Excluding the impact of these special items, our results were positively impacted by favorable movements in crude differentials, higher throughput volumes and barrels sold across the majority of our refineries and reduced regulatory compliance costs, offset by lower crack spreads realized at the majority of our refineries, which were favorably impacted in the prior year by the hurricane-related effect on refining margins due to tightening product inventories, specifically distillates. Our results in the current year period were negatively impacted by higher general and administrative costs and increased depreciation and amortization expense.

Revenues— Revenues totaled $20.9 billion for the nine months ended September 30, 2018 compared to $15.2 billion for the nine months ended September 30, 2017, an increase of approximately $5.6 billion, or 37.0%. Revenues per barrel were $78.92 and $62.34 for the nine months ended September 30, 2018 and 2017, respectively, an increase of 26.6% directly related to higher hydrocarbon commodity prices. For the nine months ended September 30, 2018, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 349,200 bpd, 149,500 bpd, 184,400 bpd and 168,700 bpd, respectively. For the nine months ended September 30, 2017, the total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 330,100 bpd, 146,500 bpd, 182,600 bpd and 126,900 bpd, respectively. The throughput rates at our East Coast and West Coast refineries were higher in the nine months ended September 30, 2018 compared to the same period in 2017. Throughput rates at our Mid-Continent and Gulf Coast refineries were in line with the prior year despite planned downtimes during the first half of 2018. The throughput rates at our East Coast refineries increased due to planned downtime at our Delaware City refinery during 2017. The throughput rates at our West Coast refinery increased due to planned downtime in the prior year as part of the first significant turnaround of the refinery under our ownership and improved refinery performance

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experienced in the current year. For the nine months ended September 30, 2018, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 378,700 bpd, 158,300 bpd, 235,900 bpd and 196,500 bpd, respectively. For the nine months ended September 30, 2017, the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast refineries averaged approximately 358,000 bpd, 160,600 bpd, 221,700 bpd and 155,200 bpd, respectively. Total refined product barrels sold were higher than throughput rates, reflecting sales from inventory as well as sales and purchases of refined products outside the refinery.

Consolidated Gross Margin— Consolidated gross margin totaled $837.3 million for the nine months ended September 30, 2018 compared to $506.9 million for the nine months ended September 30, 2017, an increase of approximately $330.5 million. Gross refining margin (as described below in Non-GAAP Financial Measures) totaled $2,304.1 million, or $9.90 per barrel of throughput ($2,048.2 million or $8.80 per barrel of throughput excluding the impact of special items), for the nine months ended September 30, 2018 compared to $1,912.9 million, or $8.91 per barrel of throughput ($1,814.9 million or $8.46 per barrel of throughput excluding the impact of special items) for the nine months ended September 30, 2017, an increase of approximately $391.2 million, or $233.3 million excluding special items.

Consolidated gross margin and gross refining margin increased due to generally favorable movements in crude differentials and higher throughput volumes and barrels sold across the majority of our refineries. In addition, consolidated gross margin and gross refining margin were positively impacted in the current and prior year by special items. For the nine months ended September 30, 2018, special items impacting our margin calculations included a non-cash LCM inventory adjustment of approximately $300.5 million on a net basis, resulting from an increase in crude oil and refined product prices in comparison to the prices at the end of 2017, partially offset by a $44.6 million charge resulting from costs associated with the early return of certain leased railcars. The non-cash LCM adjustment increased consolidated gross margin and gross refining margin by approximately $97.9 million for the nine months ended September 30, 2017.

Additionally, our results continue to be impacted by significant costs to comply with RFS, although at a reduced level from the prior year. Total RFS costs were $117.0 million for the nine months ended September 30, 2018 in comparison to $203.2 million for the nine months ended September 30, 2017.

Average industry refining margins in the Mid-Continent were stronger during the nine months ended September 30, 2018 as compared to the same period in 2017. The WTI (Chicago) 4-3-1 industry crack spread was $15.84 per barrel, or 7.8% higher, in the nine months ended September 30, 2018 as compared to $14.70 per barrel in the same period in 2017. Our refinery specific crude slate in the Mid-Continent was impacted by an improving WTI/Bakken differential, which was approximately $0.87 per barrel in the nine months ended September 30, 2018, as compared to $0.18 per barrel in the same period in 2017. Additionally, the WTI/Syncrude differential averaged a discount of $3.00 per barrel during the nine months ended September 30, 2018 as compared to a premium of $1.86 per barrel in the same period of 2017.

On the East Coast, the Dated Brent (NYH) 2-1-1 industry crack spread was approximately $14.15 per barrel, or 4.6% lower in the nine months ended September 30, 2018, as compared to $14.84 per barrel in the same period in 2017. The Dated Brent/Maya differential was $3.44 higher in the nine months ended September 30, 2018 as compared to the same period in 2017. The Dated Brent/WTI differential was $2.82 higher in the nine months ended September 30, 2018 as compared to the same period in 2017, and the WTI/Bakken differential was approximately $0.69 per barrel higher in the nine months ended September 30, 2018 as compared to the same period in 2017.

Gulf Coast industry refining margins slightly decreased during the nine months ended September 30, 2018 as compared to the same period in 2017. The LLS (Gulf Coast) 2-1-1 industry crack spread was $13.26 per barrel, or 3.6% lower, in the nine months ended September 30, 2018 as compared to $13.75 per barrel in the same period in 2017. Crude differentials weakened with the WTI/LLS differential averaging a premium of $4.21 per barrel during the nine months ended September 30, 2018 as compared to a premium of $2.41 per barrel in the same period of 2017.

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Additionally, West Coast industry refining margins decreased during the nine months ended September 30, 2018 as compared to the same period in 2017. The ANS (West Coast) 4-3-1 industry crack spread was $16.67 per barrel, or 11.2% lower, in the nine months ended September 30, 2018 as compared to $18.78 per barrel in the same period in 2017. Crude differentials weakened with the WTI/ANS differential averaging a premium of $5.29 per barrel during the nine months ended September 30, 2018 as compared to a premium of $2.82 per barrel in the same period of 2017.

Favorable movements in these benchmark crude differentials typically result in lower crude costs and positively impact our earnings while reductions in these benchmark crude differentials typically result in higher crude costs and negatively impact our earnings.

Operating Expenses— Operating expenses totaled $1,223.8 million, or $5.26 per barrel of throughput, for the nine months ended September 30, 2018 compared to $1,224.8 million, or $5.71 per barrel of throughput, for the nine months ended September 30, 2017, a decrease of approximately $1.0 million, or 0.1%. Operating expenses were in line with the prior year. Decreases in operating expenses on a per barrel basis were driven by increased system reliability and our focused efforts on reducing operating costs. Additionally, there was a decrease in supplies and materials due to our Torrance refinery experiencing higher costs in 2017 related to its turnaround. These decreases were offset by higher energy and utility costs as a result of overall increased throughput.

General and Administrative Expenses— General and administrative expenses totaled $174.9 million for the nine months ended September 30, 2018 compared to $130.0 million for the nine months ended September 30, 2017, an increase of approximately $44.9 million or 34.5%. The increase in general and administrative expenses for the nine months ended September 30, 2018 in comparison to the nine months ended September 30, 2017 primarily related to higher employee related expenses, including incentive compensation and retirement benefits. Our general and administrative expenses are comprised of the personnel, facilities and other infrastructure costs necessary to support our refineries.

Gain (Loss) on Sale of Assets— There was a net gain of $43.1 million for the nine months ended September 30, 2018 mainly attributed to a $43.8 million gain related to the Torrance land sale. There was a loss of $0.9 million for the nine months ended September 30, 2017 related to the sale of non-operating refinery assets.

Depreciation and Amortization Expense— Depreciation and amortization expense totaled $250.8 million for the nine months ended September 30, 2018 (including $243.0 million recorded within Cost of sales) compared to $191.6 million for the nine months ended September 30, 2017 (including $181.2 million recorded within Cost of sales), an increase of approximately $59.2 million. The increase was a result of additional depreciation expense associated with a general increase in our fixed asset base due to capital projects and turnarounds completed since the third quarter of 2017, which included the first significant Torrance refinery turnaround under our ownership.

Change in Fair Value of Catalyst Leases— Change in the fair value of catalyst leases represented a gain of $5.8 million for the nine months ended September 30, 2018 compared to a loss of $1.0 million for the nine months ended September 30, 2017. These gains and losses relate to the change in value of the precious metals underlying the sale and leaseback of our refineries’ precious metals catalyst, which we are obligated to repurchase at fair market value on the lease termination dates.

Debt extinguishment costs— Debt extinguishment costs of $25.5 million incurred in the nine months ended September 30, 2017 related to nonrecurring charges associated with debt refinancing activity calculated based on the difference between the carrying value of the 2020 Senior Secured Notes on the date that they were reacquired and the amount for which they were reacquired. There were no such costs in the same period of 2018.

Interest Expense, net— Interest expense totaled $98.1 million for the nine months ended September 30, 2018 compared to $92.8 million for the nine months ended September 30, 2017, an increase of approximately $5.3 million. This net increase is attributable to higher debt outstanding and amortization of debt financing costs partially offset by lower interest rates on a portion of our senior notes that were refinanced in May 2017. Interest expense includes interest on long-term debt and notes payable, costs related to the sale and leaseback of our precious metals

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catalyst, financing costs associated with the Inventory Intermediation Agreements with J. Aron, letter of credit fees associated with the purchase of certain crude oils and the amortization of deferred financing costs.

Income Tax Expense— As PBF Holding is a limited liability company treated as a “flow-through” entity for income tax purposes, our consolidated financial statements generally do not include a benefit or expense for income taxes for the nine months ended September 30, 2018 and September 30, 2017, respectively, apart from the income tax attributable to two subsidiaries acquired in connection with the Chalmette Acquisition in the fourth quarter of 2015 and our wholly-owned Canadian subsidiary, PBF Ltd. These subsidiaries are treated as C-Corporations for income tax purposes. An income tax benefit of $5.4 million was recorded for the nine months ended September 30, 2018 in comparison to income tax expense of $2.0 million recorded for the nine months ended September 30, 2017 primarily attributable to the results of PBF Ltd.

Non-GAAP Financial Measures

Management uses certain financial measures to evaluate our operating performance that are calculated and presented on the basis of methodologies other than in accordance with GAAP (“Non-GAAP”). These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly entitled measures reported by other companies.

Special Items

The Non-GAAP measures presented include EBITDA excluding special items and gross refining margin excluding special items. Special items for the three and nine months ended September 30, 2018 relate to an LCM inventory adjustment, gain on the sale of assets related to the Torrance land sale and charges associated with the early return of certain leased railcars. Special items for the three and nine months ended September 30, 2017 relate to an LCM inventory adjustment and debt extinguishment costs. See “Notes to Non-GAAP Financial Measures” below for more details on all special items disclosed. Although we believe that Non-GAAP financial measures, excluding the impact of special items, provide useful supplemental information to investors regarding the results and performance of our business and allow for helpful period-over-period comparisons, such Non-GAAP measures should only be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP.

Gross Refining Margin and Gross Refining Margin Excluding Special Items

Gross refining margin is defined as consolidated gross margin excluding refinery depreciation and operating expenses. We believe both gross refining marginand gross refining margin excluding special items are important measures of operating performance and provide useful information to investors because they are helpful metric comparisons to the industry refining margin benchmarks, as the refining margin benchmarks do not include a charge for refinery operating expenses and depreciation. In order to assess our operating performance, we compare our gross refining margin (revenue less cost of products and other) to industry refining margin benchmarks and crude oil prices as defined in the table below.

Neither gross refining margin nor gross refining margin excluding special items should be considered an alternative to consolidated gross margin, income from operations, net cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Gross refining margin and gross refining margin excluding special items presented by other companies may not be comparable to our presentation, since each company may define these terms differently.

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The following table presents our GAAP calculation of consolidated gross margin and a reconciliation of gross refining margin to the most directly comparable GAAP financial measure, consolidated gross margin, on a historical basis, as applicable, for each of the periods indicated (in thousands, except per barrel amounts):

	Three Months Ended September 30,
	2018						2017
	$			per barrel of throughput			$			per barrel of throughput
Calculation of consolidated gross margin:
Revenues	$	7,642,471		$	93.51		$	5,475,816		$	70.05
Less: Cost of Sales	7,369,651			90.17			4,871,651			62.32
Consolidated gross margin	$	272,820		$	3.34		$	604,165		$	7.73
Reconciliation of consolidated gross margin to gross refining margin:
Consolidated gross margin	$	272,820		$	3.34		$	604,165		$	7.73
Add: Refinery operating expenses	409,600			5.01			389,504			4.98
Add: Refinery depreciation expense	83,353			1.02			70,338			0.90
Gross refining margin	$	765,773		$	9.37		$	1,064,007		$	13.61
Special items:(1)
Add: Non-cash LCM inventory adjustment	(54,801		)	(0.67		)	(265,077		)	(3.39		)
Add: Early railcar return expense	44,571			0.55			—			—
Gross refining margin excluding special items	$	755,543		$	9.25		$	798,930		$	10.22

	Nine Months Ended September 30,
	2018						2017
	$			per barrel of throughput			$			per barrel of throughput
Calculation of consolidated gross margin:
Revenues	$	20,882,542		$	89.80		$	15,239,265		$	71.02
Less: Cost of Sales	20,045,215			86.20			14,732,391			68.66
Consolidated gross margin	$	837,327		$	3.60		$	506,874		$	2.36
Reconciliation of consolidated gross margin to gross refining margin:
Consolidated gross margin	$	837,327		$	3.60		$	506,874		$	2.36
Add: Refinery operating expense	1,223,798			5.26			1,224,757			5.71
Add: Refinery depreciation expense	242,960			1.04			181,238			0.84
Gross refining margin	$	2,304,085		$	9.90		$	1,912,869		$	8.91
Special items:(1)
Add: Non-cash LCM inventory adjustment	(300,456		)	(1.29		)	(97,943		)	(0.45		)
Add: Early railcar return expense	44,571			0.19			—			—
Gross refining margin excluding special items	$	2,048,200		$	8.80		$	1,814,926		$	8.46

——————————

See Notes to Non-GAAP Financial Measures.

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EBITDA, EBITDA Excluding Special Items and Adjusted EBITDA

Our management uses EBITDA (earnings before interest, income taxes, depreciation and amortization), EBITDA excluding special items and Adjusted EBITDA as measures of operating performance to assist in comparing performance from period to period on a consistent basis and to readily view operating trends, as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations, and in communications with our board of directors, creditors, analysts and investors concerning our financial performance. Our outstanding indebtedness for borrowed money and other contractual obligations also include similar measures as a basis for certain covenants under those agreements which may differ from the Adjusted EBITDA definition described below.

EBITDA, EBITDA excluding special items and Adjusted EBITDA are not presentations made in accordance with GAAP and our computation of EBITDA, EBITDA excluding special items and Adjusted EBITDA may vary from others in our industry. In addition, Adjusted EBITDA contains some, but not all, adjustments that are taken into account in the calculation of the components of various covenants in the agreements governing our senior notes and other credit facilities. EBITDA, EBITDA excluding special items and Adjusted EBITDA should not be considered as alternatives to income from operations or net income as measures of operating performance. In addition, EBITDA, EBITDA excluding special items and Adjusted EBITDA are not presented as, and should not be considered, an alternative to cash flows from operations as a measure of liquidity. Adjusted EBITDA is defined as EBITDA before adjustments for items such as stock-based compensation expense, the non-cash change in the fair value of catalyst leases, the write down of inventory to the LCM, debt extinguishment costs related to refinancing activities, and certain other non-cash items. Other companies, including other companies in our industry, may calculate EBITDA, EBITDA excluding special items and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures. EBITDA, EBITDA excluding special items and Adjusted EBITDA also have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include that EBITDA, EBITDA excluding special items and Adjusted EBITDA:

• do not reflect depreciation expense or our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

• do not reflect changes in, or cash requirements for, our working capital needs;

• do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

• do not reflect realized and unrealized gains and losses from certain hedging activities, which may have a substantial impact on our cash flow;

• do not reflect certain other non-cash income and expenses; and

• exclude income taxes that may represent a reduction in available cash.

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The following tables reconcile net income as reflected in our results of operations to EBITDA, EBITDA excluding special items and Adjusted EBITDA for the periods presented (in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2018			2017			2018			2017
Reconciliation of net income to EBITDA and EBITDA excluding special items:
Net income	$	224,698		$	526,080		$	624,640		$	255,164
Add: Depreciation and amortization expense	85,947			72,910			250,831			191,593
Add: Interest expense, net	31,756			29,269			98,122			92,782
Add: Income tax (benefit) expense	(719		)	(4,292		)	(5,403		)	2,040
EBITDA	$	341,682		$	623,967		$	968,190		$	541,579
Special Items:(1)
Add: Non-cash LCM inventory adjustment	(54,801		)	(265,077		)	(300,456		)	(97,943		)
Add: Debt extinguishment costs	—			—			—			25,451
Add: Gain on Torrance land sale	(43,761		)	—			(43,761		)	—
Add: Early railcar return expense	44,571			—			44,571			—
EBITDA excluding special items	$	287,691		$	358,890		$	668,544		$	469,087
Reconciliation of EBITDA to Adjusted EBITDA:
EBITDA	$	341,682		$	623,967		$	968,190		$	541,579
Add: Stock-based compensation	4,539			3,415			14,059			13,549
Add: Non-cash change in fair value of catalyst leases	(1,630		)	(473		)	(5,783		)	1,011
Add: Non-cash LCM inventory adjustment (1)	(54,801		)	(265,077		)	(300,456		)	(97,943		)
Add: Debt extinguishment costs (1)	—			—			—			25,451
Adjusted EBITDA	$	289,790		$	361,832		$	676,010		$	483,647

——————————

See Notes to Non-GAAP Financial Measures.

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Notes to Non-GAAP Financial Measures

The following notes are applicable to the Non-GAAP Financial Measures above:

(1) Special items:

LCM inventory adjustment - LCM is a GAAP guideline related to inventory valuation that requires inventory to be stated at the lower of cost or market. Our inventories are stated at the lower of cost or market. Cost is determined using last-in, first-out (“LIFO”) inventory valuation methodology, in which the most recently incurred costs are charged to cost of sales and inventories are valued at base layer acquisition costs. Market is determined based on an assessment of the current estimated replacement cost and net realizable selling price of the inventory. In periods where the market price of our inventory declines substantially, cost values of inventory may exceed market values. In such instances, we record an adjustment to write down the value of inventory to market value in accordance with GAAP. In subsequent periods, the value of inventory is reassessed and an LCM inventory adjustment is recorded to reflect the net change in the LCM inventory reserve between the prior period and the current period. The net impact of these LCM inventory adjustments are included in operating income, but are excluded from the operating results presented in the tables in order to make such information comparable between periods.

The following table includes the lower of cost or market inventory reserve as of each date presented (in thousands):

	2018		2017
January 1,	$	300,456	$	595,988
June 30,	54,801		763,122
September 30,	—		498,045

The following table includes the corresponding impact of changes in the LCM inventory reserve on both income from operations and net income for the periods presented (in thousands):

	Three Months Ended September 30,				Nine Months Ended   September 30,
	2018		2017		2018		2017
Net LCM inventory adjustment benefit in both income from operations and net income	$	54,801	$	265,077	$	300,456	$	97,943

Debt Extinguishment Costs - During the nine months ended September 30, 2017, we recorded debt extinguishment costs of $25.5 million related to the redemption of the 2020 Senior Secured Notes. There were no such costs in the same periods of 2018.

Early Return of Railcars - During the three and nine months ended September 30, 2018 we recognized certain expenses within Cost of sales associated with the voluntary early return of certain leased railcars. These charges decreased income from operations and net income by $44.6 million. There were no such expenses in the same periods of 2017.

Gain on Torrance land sale - During the three and nine months ended September 30, 2018 we recorded a gain on the sale of a parcel of real property acquired as part of the Torrance refinery, but not part of the refinery itself. The gain increased income from operations and net income by $43.8 million. There was no such gain in the same periods of 2017.

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Liquidity and Capital Resources

Overview

Our primary sources of liquidity are our cash flows from operations and borrowing availability under our credit facilities, as further described below. We believe that our cash flows from operations and available capital resources will be sufficient to meet our and our subsidiaries’ capital expenditure, working capital, distribution payment and debt service requirements for the next twelve months. However, our ability to generate sufficient cash flow from operations depends, in part, on petroleum oil market pricing and general economic, political and other factors beyond our control. We are in compliance as of September 30, 2018 with all of the covenants, including financial covenants, in all of our debt agreements.

Cash Flow Analysis

Cash Flows from Operating Activities

Net cash provided by operating activities was $594.5 million for the nine months ended September 30, 2018 compared to net cash provided by operating activities of $124.4 million for the nine months ended September 30, 2017. Our operating cash flows for the nine months ended September 30, 2018 included our net income of $624.6 million, plus depreciation and amortization of $255.6 million, pension and other post-retirement benefits costs of $35.5 million, stock-based compensation of $14.1 million, a change in the fair value of our inventory repurchase obligations of $10.7 million, and distributions from our equity method investment in Torrance Valley Pipeline Company LLC (“TVPC”) of $13.1 million, partially offset by a gain on sale of assets of $43.1 million, a non-cash benefit of $300.5 million relating to an LCM inventory adjustment, a change in the fair value of our catalyst leases of $5.8 million, income from our equity method investment in TVPC of $13.1 million and deferred income taxes of $5.4 million. In addition, net changes in operating assets and liabilities reflected cash proceeds of $8.6 million driven by the timing of inventory purchases, payments for accrued expenses and accounts payables and collections of accounts receivables. Our operating cash flows for the nine months ended September 30, 2017 included our net income of $255.2 million, depreciation and amortization of $197.4 million, debt extinguishment costs related to refinancing of our 2020 Senior Secured Notes of $25.5 million, pension and other post-retirement benefits costs of $31.7 million, stock-based compensation of $13.5 million, changes in the fair value of our catalyst leases of $1.0 million, deferred income taxes of $0.6 million, loss on sale of assets of $0.9 million and distributions from our equity investment in TVPC of $16.9 million, partially offset by a non-cash benefit of $97.9 million relating to an LCM inventory adjustment, net non-cash charges relating to the change in the fair value of our inventory repurchase obligations of $26.7 million and income from our equity method investment in TVPC of $11.2 million. In addition, net changes in operating assets and liabilities reflected uses of cash of $282.5 million driven by the timing of inventory purchases, payments for accrued expenses and accounts payables and collections of accounts receivables.

Cash Flows from Investing Activities

Net cash used in investing activities was $332.2 million for the nine months ended September 30, 2018 compared to net cash used in investing activities of $583.5 million for the nine months ended September 30, 2017. The net cash flows used in investing activities for the nine months ended September 30, 2018 were comprised of capital expenditures totaling $165.7 million, expenditures for refinery turnarounds of $201.0 million and expenditures for other assets of $16.9 million, partially offset by proceeds of $48.3 million related to the Torrance land sale and a return of capital related to our equity method investment in TVPC of $3.1 million. Net cash used in investing activities for the nine months ended September 30, 2017 was comprised of capital expenditures totaling $211.2 million, expenditures for refinery turnarounds of $341.6 million and expenditures for other assets of $31.1 million, slightly offset by a return of capital related to our equity method investment in TVPC of $0.5 million.

Cash Flows from Financing Activities

Net cash provided by financing activities was $225.0 million for the nine months ended September 30, 2018 compared to net cash provided by financing activities of $74.1 million for the nine months ended September 30, 2017. For the nine months ended September 30, 2018, net cash provided by financing activities consisted primarily of contribution from PBF LLC of $287.0 million and proceeds from insurance premium financing of $7.0 million, partially offset by distributions to members of $36.1 million, principal amortization payments of the PBF Rail Term Loan of $5.1 million, repayments of note payable of $5.6 million, settlements of precious metals catalyst leases of $9.5 million, and deferred financing costs and other of $12.7 million. For the nine months ended September 30, 2017, net cash provided by financing activities consisted of a contribution from PBF LLC of $97.0

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million and net cash proceeds of $21.4 million from the issuance of the 2025 Senior Notes net of cash paid to redeem the 2020 Senior Secured Notes and related issuance costs, partially offset by distributions to members of $39.3 million and principal amortization payments of the PBF Rail Term Loan of $5.0 million. Further, during the nine months ended September 30, 2017, we borrowed and repaid $490.0 million under our asset-based revolving credit agreement resulting in no net change to amounts outstanding for the nine months ended September 30, 2017.

Credit Facility

PBF Holding Revolving Credit Facility

On May 2, 2018, we and certain of our wholly-owned subsidiaries, as borrowers or subsidiary guarantors, replaced our existing asset-based revolving credit agreement dated as of August 15, 2014 (the “August 2014 Revolving Credit Agreement”) with a new asset-based revolving credit agreement (the “2018 Revolving Credit Agreement"). Among other things, the 2018 Revolving Credit Agreement increases the maximum commitment available to us from $2.6 billion to $3.4 billion, extends the maturity date to May 2023, and redefines certain components of the Borrowing Base (as defined in the credit agreement) to make more funding available for working capital and other general corporate purposes. Borrowings under the 2018 Revolving Credit Agreement bear interest at the Alternative Base Rate plus the Applicable Margin or at the Adjusted LIBOR Rate plus the Applicable Margin, all as defined in the credit agreement and further described in “Note 5 - Debt” of our Notes to Condensed Consolidated Financial Statements.

The 2018 Revolving Credit Agreement contains customary covenants and restrictions on our activities and our subsidiaries’ activities, including, but not limited to, limitations on the incurrence of additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions and prepayment of other debt, distributions, dividends and the repurchase of capital stock, transactions with affiliates and our ability to change the nature of our business or our fiscal year; all as defined in the credit agreement.

In addition, the 2018 Revolving Credit Agreement has a financial covenant which requires that if at any time Excess Availability, as defined in the credit agreement, is less than the greater of (i) 10% of the lesser of the then existing Borrowing Base and the then aggregate Revolving Commitments of the Lenders (the “Financial Covenant Testing Amount”), and (ii) $100.0 million, and until such time as Excess Availability is greater than the Financial Covenant Testing Amount and $100.0 million for a period of 12 or more consecutive days, we will not permit the Consolidated Fixed Charge Coverage Ratio, as defined in the credit agreement and determined as of the last day of the most recently completed quarter, to be less than 1.0 to 1.0.

Our obligations under the 2018 Revolving Credit Agreement are (a) guaranteed by each of our domestic operating subsidiaries that are not Excluded Subsidiaries (as defined in the credit agreement) and (b) secured by a lien on (i) PBF LLC’s equity interest in us and (ii) certain of our assets and certain assets of our subsidiary guarantors, including all deposit accounts (other than zero balance accounts, cash collateral accounts, trust accounts and/or payroll accounts, all of which are excluded from the collateral), all accounts receivable, all hydrocarbon inventory (other than the intermediate and finished products owned by J. Aron pursuant to the Inventory Intermediation Agreements) and to the extent evidencing, governing, securing or otherwise related to the foregoing, all general intangibles, chattel paper, instruments, documents, letter of credit rights and supporting obligations; and all products and proceeds of the foregoing.

Liquidity

As of September 30, 2018, our total liquidity was approximately $2,191.3 million, compared to total liquidity of approximately $1,395.2 million as of December 31, 2017. Our total liquidity is equal to the amount of excess availability under our 2018 Revolving Credit Agreement, which includes our cash balance at September 30, 2018.

Working Capital

Our working capital at September 30, 2018 was $2,057.5 million, consisting of $4,715.1 million in total current assets and $2,657.6 million in total current liabilities. Our working capital at December 31, 2017 was $1,310.3 million, consisting of $3,749.0 million in total current assets and $2,438.7 million in total current liabilities.

Working capital has increased during the nine months ended September 30, 2018 primarily as a result of positive earnings and proceeds from the Torrance land sale, partially offset by capital expenditures, including turnaround costs.

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Capital Spending

Net capital spending was $383.7 million for the nine months ended September 30, 2018, which primarily included turnaround costs, safety related enhancements and facility improvements at the refineries. We currently expect to spend an aggregate of approximately $525.0 million to $550.0 million in net capital expenditures during the full year 2018 for facility improvements and refinery maintenance and turnarounds. Significant capital spending for the full year 2018 includes turnarounds for the FCC and alkylation units at our Chalmette refinery, the coker at our Paulsboro refinery and several units at our Toledo and Delaware City refineries, as well as expenditures to meet environmental and regulatory requirements.

Crude and Feedstock Supply Agreements

Certain of our purchases of crude oil under our agreements with foreign national oil companies require that we post letters of credit and arrange for shipment. We pay for the crude when invoiced, at which time the letters of credit are lifted. Our crude and feedstock supply agreements with PDVSA provide that the crude oil can be processed at any of our East and Gulf Coast refineries. We have not sourced crude oil under this arrangement since the third quarter of 2017 as PDVSA has suspended deliveries due to the parties’ inability to agree to mutually acceptable payment terms.

Inventory Intermediation Agreements

On May 4, 2017 and September 8, 2017, we and our subsidiaries, DCR and PRC, entered into amendments to the Inventory Intermediation Agreements with J. Aron, pursuant to which certain terms of the existing inventory intermediation agreements were amended, including, among other things, pricing and an extension of the terms. As a result of the amendments (i) the Inventory Intermediation Agreement by and among J. Aron, us and PRC relating to the Paulsboro refinery extends the term to December 31, 2019, which term may be further extended by mutual consent of the parties to December 31, 2020 and (ii) the Inventory Intermediation Agreement by and among J. Aron, us and DCR relating to the Delaware City refinery extends the term to July 1, 2019, which term may be further extended by mutual consent of the parties to July 1, 2020.

Pursuant to each Inventory Intermediation Agreement, J. Aron continues to purchase and hold title to certain of the intermediate and finished products (the “Products”) produced by the Paulsboro and Delaware City refineries (the “Refineries”), respectively, and delivered into tanks at the Refineries. Furthermore, J. Aron agrees to sell the Products back to the Refineries as the Products are discharged out of the Refineries’ tanks. J. Aron has the right to store the Products purchased in tanks under the Inventory Intermediation Agreements and will retain these storage rights for the term of the agreements. We continue to market and sell independently to third parties.

At September 30, 2018, the LIFO value of intermediates and finished products owned by J. Aron included within inventory on our balance sheet was $339.1 million. We accrue a corresponding liability for such intermediates and finished products.

Off-Balance Sheet Arrangements and Contractual Obligations and Commitments

We have no off-balance sheet arrangements as of September 30, 2018, other than outstanding letters of credit in the amount of approximately $678.6 million and operating leases.

Distribution Policy

On October 31, 2018 PBF Energy, PBF Holding’s indirect parent, announced a dividend of $0.30 per share on its outstanding Class A common stock. The dividend is payable on November 30, 2018 to PBF Energy Class A common stockholders of record at the close of business on November 15, 2018. If necessary, PBF Holding will make a distribution of up to approximately $36.3 million to PBF LLC, which in turn will make pro-rata distributions of $0.30 per unit to its members, including PBF Energy. PBF Energy will then use this distribution to fund the dividend payments to the stockholders of PBF Energy.

As of September 30, 2018, we had $2,191.3 million of unused borrowing availability, which includes our cash and cash equivalents of $1,013.4 million, under our 2018 Revolving Credit Agreement to fund our operations, if necessary. Accordingly, as of September 30, 2018, there was sufficient cash and cash equivalents and borrowing capacity under our credit facilities available to make distributions to PBF LLC, in order for PBF LLC, if necessary, to make pro rata distributions to its members, including PBF Energy, necessary to fund in excess of one year’s cash dividend payments by PBF Energy.

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Since, as described above, there was sufficient cash and cash equivalents and borrowing capacity as of September 30, 2018, we would have been permitted under our debt agreements to make these distributions; however, our ability to continue to comply with our debt covenants is, to a significant degree, subject to our operating results, which are dependent on a number of factors outside of our control. We believe our and our subsidiaries’ available cash and cash equivalents, other sources of liquidity to operate our business and operating performance provides us with a reasonable basis for our assessment that we can support PBF Energy’s intended distribution policy.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks, including changes in commodity prices and interest rates. Our primary commodity price risk is associated with the difference between the prices we sell our refined products and the prices we pay for crude oil and other feedstocks. We may use derivative instruments to manage the risks from changes in the prices of crude oil and refined products, natural gas, interest rates, or to capture market opportunities.

Commodity Price Risk

Our earnings, cash flow and liquidity are significantly affected by a variety of factors beyond our control, including the supply of, and demand for, crude oil, other feedstocks, refined products and natural gas. The supply of and demand for these commodities depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, planned and unplanned downtime in refineries, pipelines and production facilities, production levels, the availability of imports, the marketing of competitive and alternative fuels, and the extent of government regulation. As a result, the prices of these commodities can be volatile. Our revenues fluctuate significantly with movements in industry refined product prices, our cost of sales fluctuates significantly with movements in crude oil and feedstock prices and our operating expenses fluctuate with movements in the price of natural gas. We manage our exposure to these commodity price risks through our supply and offtake agreements as well as through the use of various commodity derivative instruments.

We may use non-trading derivative instruments to manage exposure to commodity price risks associated with the purchase or sale of crude oil and feedstocks, finished products and natural gas outside of our supply and offtake agreements. The derivative instruments we use include physical commodity contracts and exchange-traded and over-the-counter financial instruments. We mark-to-market our commodity derivative instruments and recognize the changes in their fair value in our statements of operations.

At September 30, 2018 and December 31, 2017, we had gross open commodity derivative contracts representing 14.2 million barrels and 24.3 million barrels, respectively, with an unrealized net loss of $27.4 million and $74.3 million, respectively. The open commodity derivative contracts as of September 30, 2018 expire at various times during 2018 and 2019.

We carry inventories of crude oil, intermediates and refined products (“hydrocarbon inventories”) on our balance sheet, the values of which are subject to fluctuations in market prices. Our hydrocarbon inventories totaled approximately 30.5 million barrels and 30.1 million barrels at September 30, 2018 and December 31, 2017, respectively. The average cost of our hydrocarbon inventories was approximately $80.45 and $80.21 per barrel on a LIFO basis at September 30, 2018 and December 31, 2017, respectively. The December 31, 2017 results exclude the net impact of an LCM inventory adjustment of approximately $300.5 million, whereas at September 30, 2018, the replacement value of inventories exceeded the LIFO carrying value. If market prices of our inventory declines to a level below our average cost, we may be required to write down the carrying value of our hydrocarbon inventories to market.

Our predominant variable operating cost is energy, which is comprised primarily of natural gas and electricity. We are therefore sensitive to movements in natural gas prices. Assuming normal operating conditions, we annually consume a total of approximately 68 million MMBTUs of natural gas amongst our five refineries as of September 30, 2018. Accordingly, a $1.00 per MMBTU change in natural gas prices would increase or decrease our natural gas costs by approximately $68.0 million.

Compliance Program Price Risk

We are exposed to market risks related to the volatility in the price of RINs required to comply with the RFS. Our overall RINs obligation is based on a percentage of our domestic shipments of on-road fuels as established by EPA. To the degree we are unable to blend the required amount of biofuels to satisfy our RINs obligation, we must purchase RINs on the open market. To mitigate the impact of this risk on our results of operations and cash flows we may purchase RINs when the price of these instruments is deemed favorable.

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In addition, we are exposed to risks associated with complying with federal and state legislative and regulatory measures to address greenhouse gas and other emissions. Requirements to reduce emissions could result in increased costs to operate and maintain our facilities as well as implement and manage new emission controls and programs put in place. For example, AB32 in California requires the state to reduce its GHG emissions to 1990 levels by 2020.

Interest Rate Risk

The maximum availability under our 2018 Revolving Credit Agreement is $3.4 billion. Borrowings under the 2018 Revolving Credit Agreement bear interest either at the Alternative Base Rate plus the Applicable Margin or at Adjusted LIBOR plus the Applicable Margin, all as defined in the 2018 Revolving Credit Agreement. If this facility was fully drawn, a 1.0% change in the interest rate would increase or decrease our interest expense by approximately $34.0 million annually.

In addition, the PBF Rail Term Loan, which bears interest at a variable rate, had an outstanding principal balance of $23.3 million at September 30, 2018. A 1.0% change in the interest rate would increase or decrease our interest expense by approximately $0.23 million annually, assuming the current outstanding principal balance on the PBF Rail Term Loan remained outstanding.

We also have interest rate exposure in connection with our Inventory Intermediation Agreements under which we pay a time value of money charge based on LIBOR.

Credit Risk

We are subject to risk of losses resulting from nonpayment or nonperformance by our counterparties. We continue to closely monitor the creditworthiness of customers to whom we grant credit and establish credit limits in accordance with our credit policy.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

PBF Holding maintains a system of disclosure controls and procedures that is designed to provide reasonable assurance that information which is required to be disclosed is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to management in a timely manner. Under the supervision and with the participation of our management, including PBF Holding’s principal executive officer and the principal financial officer, we have evaluated the effectiveness of our system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of September 30, 2018. Based on that evaluation, PBF Holding’s principal executive officer and the principal financial officer have concluded that PBF Holding’s disclosure controls and procedures are effective as of September 30, 2018.

Changes in Internal Control Over Financial Reporting

Management has not identified any changes in PBF Holding’s internal controls over financial reporting during the quarter ended September 30, 2018 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

On July 24, 2013, the Delaware Department of Natural Resources and Environmental Control (“DNREC”) issued a Notice of Administrative Penalty Assessment and Secretary’s Order to Delaware City Refining for alleged air emission violations that occurred during the re-start of the refinery in 2011 and subsequent to the re-start. The penalty assessment seeks $460,200 in penalties and $69,030 in cost recovery for DNREC’s expenses associated with investigation of the incidents. We dispute the amount of the penalty assessment and allegations made in the order, and are in discussions with DNREC to resolve the assessment. It is possible that DNREC will assess a penalty in this matter but any such amount is not expected to be material to us.

On April 7, 2015, DNREC issued a Notice of Violation (W-15-SWD-01) alleging violations of the Delaware City refinery’s NPDES discharge permit during the period between December 12, 2014 through January 4, 2015. On March 5, 2018, a settlement agreement was finalized resolving the alleged violations contained in the April 7, 2015 Notice of Violation, as well as additional alleged violations occurring during the period between January 2014 through January 2018. Pursuant to this settlement agreement, the Delaware City refinery was either going to pay a penalty of $30,000 and fund an approved Environmental Improvement Project (“EIP”) in the amount of $88,000, or pay a penalty in the amount of $118,000. A cost recovery payment of $7,433 will be assessed in either case. The Delaware City refinery has elected to pay the $30,000 penalty and fund the EIP in the amount of $88,000. The Delaware City refinery has paid the penalty and the cost recovery payment and will fund the approved EIP as soon as the project scope is finalized.

The Delaware City refinery is appealing a Notice of Penalty Assessment and Secretary’s Order issued in March 2017, including a $150,000 fine, alleging violation of a 2013 Secretary’s Order authorizing crude oil shipment by barge. DNREC determined that the Delaware City refinery had violated the order by failing to make timely and full disclosure to DNREC about the nature and extent of those shipments, and had misrepresented the number of shipments that went to other facilities. The Penalty Assessment and Secretary’s Order conclude that the 2013 Secretary’s Order was violated by the refinery by shipping crude oil from the Delaware City terminal to three locations other than the Paulsboro refinery, on 15 days in 2014, making a total of 17 separate barge shipments containing approximately 35.7 million gallons of crude oil in total. On April 28, 2017, the Delaware City refinery appealed the Notice of Penalty Assessment and Secretary’s Order. On March 5, 2018, Notice of Penalty Assessment was settled by DNREC, the Delaware Attorney General and Delaware City refinery for $100,000. The Delaware City refinery made no admissions with respect to the alleged violations and agreed to request a Coastal Zone Act status decision prior to making crude oil shipments to destinations other than Paulsboro. The Delaware City refinery has paid the penalty. The Coastal Zone Act status decision request is being finalized and will be submitted to DNREC.

On December 28, 2016, DNREC issued the Ethanol Permit to DCR allowing the utilization of existing tanks and existing marine loading equipment at their existing facilities to enable denatured ethanol to be loaded from storage tanks to marine vessels and shipped to offsite facilities. On January 13, 2017, the issuance of the Ethanol Permit was appealed by two environmental groups. On February 27, 2017, the Coastal Zone Board held a public hearing and dismissed the appeal, determining that the appellants did not have standing. The appellants filed an appeal of the Coastal Zone Board’s decision with the Superior Court on March 30, 2017. On January 19, 2018, the Superior Court rendered an Opinion regarding the decision of the Coastal Zone Board to dismiss the appeal of the Ethanol Permit for the ethanol project. The judge determined that the record created by the Coastal Zone Board was insufficient for the Superior Court to make a decision, and therefore remanded the case back to the Coastal Zone Board to address the deficiency in the record. Specifically, the Superior Court directed the Coastal Zone Board to address any evidence concerning whether the appellants’ claimed injuries would be affected by the increased quantity of ethanol shipments. During the hearing before the Coastal Zone Board on standing, one of the appellants’ witnesses made a reference to the flammability of ethanol, without any indication of the significance of flammability/explosivity to specific concerns. Moreover, the appellants did not introduce at hearing any evidence of the relative flammability of ethanol as compared to other materials shipped to and from the refinery. However, the sole dissenting opinion from the Coastal Zone Board focused on the flammability/explosivity issue, alleging

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that the appellants’ testimony raised the issue as a distinct basis for potential harms. Once the Board responds to the remand, it will go back to the Superior Court to complete its analysis and issue a decision.

At the time we acquired the Toledo refinery, EPA had initiated an investigation into the compliance of the refinery with EPA standards governing flaring pursuant to Section 114 of the Clean Air Act. On February 1, 2013, EPA issued an Amended Notice of Violation, and on September 20, 2013, EPA issued a Notice of Violation and Finding of Violation to Toledo refinery, alleging certain violations of the Clean Air Act at its Plant 4 and Plant 9 flares since the acquisition of the refinery on March 1, 2011. Toledo refinery and EPA subsequently entered into tolling agreements pending settlement discussions. Although the resolution has not been finalized, the civil administrative penalty is anticipated to be approximately $645,000 including supplemental environmental projects. To the extent the administrative penalty exceeds such amount, it is not expected to be material to us.

In connection with the acquisition of the Torrance refinery and related logistics assets, we assumed certain pre-existing environmental liabilities related to certain environmental remediation obligations to address existing soil and groundwater contamination and monitoring activities, which reflect the estimated cost of the remediation obligations. In addition, in connection with the acquisition of the Torrance refinery and related logistics assets, we purchased a ten year, $100.0 million environmental insurance policy to insure against unknown environmental liabilities. Furthermore, in connection with the acquisition, we assumed responsibility for certain specified environmental matters that occurred prior to our ownership of the refinery and logistics assets, including specified incidents and/or notices of violations (“NOVs”) issued by regulatory agencies in various years before the Company’s ownership, including the Southern California Air Quality Management District (“SCAQMD”) and the Division of Occupational Safety and Health of the State of California (“Cal/OSHA”).

In connection with the acquisition of the Torrance refinery and related logistics assets, we agreed to take responsibility for NOV No. P63405 that ExxonMobil had received from the SCAQMD for Title V deviations that are alleged to have occurred in 2015. On August 14, 2018, the Company received a letter from SCAQMD offering to settle this NOV for $515,250. The Company is currently in communication with SCAQMD to resolve this NOV.

Subsequent to the acquisition, further NOVs were issued by the SCAQMD, Cal/OSHA, the City of Torrance, the City of Torrance Fire Department, and the Los Angeles County Sanitation District related to alleged operational violations, emission discharges and/or flaring incidents at the refinery and the logistics assets both before and after our acquisition. EPA in November 2016 conducted a Risk Management Plan (“RMP”) inspection following the acquisition related to Torrance operations and issued preliminary findings in March 2017 concerning RMP potential operational violations. The Company is currently in communication with EPA to resolve the RMP preliminary findings. EPA and the California Department of Toxic Substances Control (“DTSC”) in December 2016 conducted a Resource Conservation and Recovery Act (“RCRA”) inspection following the acquisition related to Torrance operations and also issued in March 2017 preliminary findings concerning RCRA potential operational violations. In April 2017, EPA referred the RCRA preliminary findings to DTSC for final resolution. On March 1, 2018, we received a notice of intent to sue from Environmental Integrity Project, on behalf of Environment California, under RCRA with respect to the alleged RCRA violations from December 2016 EPA’s and DTSC’s inspection. On March 2, 2018, DTSC issued an order to correct alleged RCRA violations relating to the accumulation of oil bearing materials in roll off bins during 2016 and 2017. On June 14, 2018, the Torrance refinery and DTSC reached settlement regarding the oil bearing materials in the form of a stipulation and order, wherein the Torrance refinery agreed that it would recycle or properly dispose of the oil bearing materials by the end of 2018 and pay an administrative penalty of $150,000. Following this settlement, in June 2018, DTSC referred the remaining alleged RCRA violations from EPA’s and DTSC’s December 2016 inspection to the California Attorney General for final resolution. The Torrance refinery and the California Attorney General are in discussions to resolve these alleged remaining RCRA violations. Other than the $150,000 DTSC administrative penalty, no other settlement or penalty demands have been received to date with respect to any of the other NOVs, preliminary findings, or order that are in excess of $100,000. As the ultimate outcomes are uncertain, we cannot currently estimate the final amount or timing of their resolution but any such amount is not expected to have a material impact on our financial position, results of operations or cash flows, individually or in the aggregate.

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On September 2, 2011, prior to our ownership of the Chalmette refinery, the plaintiff in Vincent Caruso, etal. v. Chalmette Refining, L.L.C., filed an action on behalf of himself and potentially several thousand other Louisiana residents who live or own property in St. Bernard Parish and Orleans Parish and whose property was allegedly contaminated and who allegedly suffered any property damages and clean-up costs as a result of an emission of spent catalyst from the Chalmette refinery on September 6, 2010. Plaintiffs claim to have suffered injuries, symptoms, and property damage as a result of the release, although the trial court has limited recovery to property damages and clean-up expenses. Plaintiffs seek to recover unspecified damages, interest and costs. In 2016, there was a mini-trial for four plaintiffs for property damage relating to home and vehicle cleaning and the trial court rendered judgment awarding damages related to the cost for home cleaning and vehicle cleaning to the four plaintiffs. The trial court found Chalmette Refining and co-defendant Eaton Corporation (“Eaton”), to be solidarily liable for the damages. Chalmette Refining and Eaton filed an appeal in August 2016 of the judgment on the mini-trial and on June 28, 2017, the appellate court unanimously reversed the judgment awarding damages to the plaintiffs, and plaintiffs request for rehearing was later denied. The parties are currently progressing settlement discussions. We presently believe the outcome of a settlement, or continued litigation, will not have a material impact on our financial position, results of operations or cash flows.

On December 5, 1990, prior to our ownership of the Chalmette refinery, the plaintiff in Adam Thomas, et al. v. Exxon Mobil Corporation and Chalmette Refining, L.L.C., filed an action on behalf of himself and potentially thousands of other individuals in St. Bernard Parish and Orleans Parish who were allegedly exposed to hydrogen sulfide and sulfur dioxide as a result of more than 100 separate flaring events that occurred between 1989 and 2007. This litigation is proceeding as a mass action with individually named plaintiffs as a result of a 2008 trial court decision, affirmed by the court of appeals that denied class certification. The plaintiffs claim to have suffered physical injuries, property damage, and other damages as a result of the releases. Plaintiffs seek to recover unspecified compensatory and punitive damages, interest, and costs. Although no trial date has been set by the state trial court, the parties are preparing for a mini-trial of up to 10 plaintiffs, relating to 5 separate flaring events that occurred between 2002 and 2007. Because of the number of potential claimants is unknown and the differing events underlying the claims, the potential amount of the claims is not determinable. It is possible that an adverse outcome may have a material adverse effect on our financial position, results of operations, or cash flows.

On February 17, 2017, in Arnold Goldstein, et al. v. Exxon Mobil Corporation, et al., we and PBF Energy Company LLC, and our subsidiaries, PBF Energy Western Region LLC and Torrance Refining Company LLC and the manager of our Torrance refinery along with Exxon Mobil Corporation were named as defendants in a class action and representative action complaint filed on behalf of Arnold Goldstein, John Covas, Gisela Janette La Bella and others similarly situated. The complaint was filed in the Superior Court of the State of California, County of Los Angeles and alleges negligence, strict liability, ultrahazardous activity, a continuing private nuisance, a permanent private nuisance, a continuing public nuisance, a permanent public nuisance and trespass resulting from the February 18, 2015 electrostatic precipitator (“ESP”) explosion at the Torrance refinery which was then owned and operated by ExxonMobil. The operation of the Torrance refinery by the PBF entities subsequent to our acquisition in July 2016 is also referenced in the complaint. To the extent that plaintiffs’ claims relate to the ESP explosion, Exxon has retained responsibility for any liabilities that would arise from the lawsuit pursuant to the agreement relating to the acquisition of the Torrance refinery. On July 2, 2018, the Court granted leave to plaintiffs’ to file a Second Amended Complaint alleging groundwater contamination. With the filing of the Second Amended Complaint, Plaintiffs’ added an additional plaintiff. As this matter is in the class certification phase, we cannot currently estimate the amount or the timing of its resolution. We presently believe the outcome will not have a material impact on our financial position, results of operations or cash flows.

On September 18, 2018, in Michelle Kendig and Jim Kendig, et al. v. ExxonMobil Oil Corporation, et al., PBF Energy Limited and Torrance Refining Company LLC along with ExxonMobil Oil Corporation and ExxonMobil Pipeline Company were named as defendants in a class action and representative action complaint filed on behalf of Michelle Kendig, Jim Kendig and others similarly situated. The complaint was filed in the Superior Court of the State of California, County of Los Angeles and alleges failure to authorize and permit uninterrupted rest and meal periods, failure to furnish accurate wage statements, violation of the Private Attorneys General Act and violation of the California Unfair Business and Competition Law. Plaintiffs seek to recover

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unspecified economic damages, statutory damages, civil penalties provided by statute, disgorgement of profits, injunctive relief, declaratory relief, interest, attorney’s fees and costs. To the extent that plaintiffs’ claims accrued prior to July 1, 2016, ExxonMobil has retained responsibility for any liabilities that would arise from the lawsuit pursuant to the agreement relating to the acquisition of the Torrance refinery and logistics assets. As this matter was recently filed, we cannot currently estimate the amount or the timing of its resolution. We presently believe the outcome will not have a material impact on our financial position, results of operations or cash flows.

On September 7, 2018, in Jeprece Roussell, et al. v. PBF Consultants, LLC, et al.,the Plaintiff filed an action in the 19th Judicial District Court for the Parish of East Baton Rouge, alleges numerous causes of action, including wrongful death, premises liability, negligence, and gross negligence against PBF Holding Company LLC, PBFX Operating Company LLC, Chalmette Refining, L.L.C., two individual employees of the Chalmette Refinery (“the PBF Defendants”), two entities, PBF Consultants, LLC and PBF Investments, LLC that are Louisiana companies that are not associated with our companies, as well as Clean Harbors, Inc. and Clean Harbors Environmental Services, Inc. (collectively, “Clean Harbors”), Mr. Roussell’s employer. Mr. Roussell was fatally injured on March 31, 2018 while performing clay removal work activities inside a clay treating vessel located at the Chalmette Refinery. Plaintiff seeks unspecified compensatory damages for pain and suffering, past and future mental anguish, impairment, past and future economic loss, attorney’s fees and court costs. The PBF Defendants have issued a tender of defense and indemnity to Clean Harbors and its insurer pursuant to indemnity obligations contained in the associated services agreement. On September 25, 2018, the PBF Defendants filed an Answer in the state court action denying the allegations. On October 10, 2018, the PBF Defendants filed to remove the case to the United States District Court for the Middle District of Louisiana. As this matter was recently filed, we cannot currently estimate the amount or the timing of its resolution. We presently believe the outcome will not have a material impact on our financial position, results of operations or cash flows.

We are subject to obligations to purchase RINs. On February 15, 2017, we received notification that EPA records indicated that PBF Holding used potentially invalid RINs that were in fact verified under EPA’s RIN Quality Assurance Program (“QAP”) by an independent auditor as QAP A RINs. Under the regulations use of potentially invalid QAP A RINs provided the user with an affirmative defense from civil penalties provided certain conditions are met. We have asserted the affirmative defense and if accepted by EPA will not be required to replace these RINs and will not be subject to civil penalties under the program. It is reasonably possible that EPA will not accept our defense and may assess penalties in these matters but any such amount is not expected to have a material impact on our financial position, results of operations or cash flows.

As of January 1, 2011, we are required to comply with EPA’s Control of Hazardous Air Pollutants From Mobile Sources, or MSAT2, regulations on gasoline that impose reductions in the benzene content of our produced gasoline. We purchase benzene credits to meet these requirements. Our planned capital projects will reduce the amount of benzene credits that we need to purchase. In addition, the renewable fuel standards mandate the blending of prescribed percentages of renewable fuels (e.g., ethanol and biofuels) into our produced gasoline and diesel. These new requirements, other requirements of the CAA and other presently existing or future environmental regulations may cause us to make substantial capital expenditures as well as the purchase of credits at significant cost, to enable our refineries to produce products that meet applicable requirements.

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CERCLA, also known as “Superfund,” imposes liability, without regard to fault or the legality of the original conduct, on certain classes of persons who are considered to be responsible for the release of a “hazardous substance” into the environment. These persons include the current or former owner or operator of the disposal site or sites where the release occurred and companies that disposed of or arranged for the disposal of the hazardous substances. Under CERCLA, such persons may be subject to joint and several liability for investigation and the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies. As discussed more fully above, certain of our sites are subject to these laws and we may be held liable for investigation and remediation costs or claims for natural resource damages. It is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances or other pollutants released into the environment. Analogous state laws impose similar responsibilities and liabilities on responsible parties. In our current normal operations, we have generated waste, some of which falls within the statutory definition of a “hazardous substance” and some of which may have been disposed of at sites that may require cleanup under Superfund.

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Item 6. Exhibits

The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this report and such Exhibit Index is incorporated herein by reference.

EXHIBIT INDEX

Exhibit Number	Description
10.1	Fifth Amended and Restated Omnibus Agreement dated as of July 31, 2018, among PBF Holding Company LLC, PBF Energy Company LLC, PBF Logistics GP LLC and PBF Logistics LP (incorporated by reference to Exhibit 10.2 filed with PBF Logistics LP’s Quarterly Report on Form 10-Q dated October 31, 2018 (File No. 001-36446))
10.2	Sixth Amended and Restated Operation and Management Services and Secondment Agreement dated as of July 31, 2018, among PBF Holding Company LLC, Delaware City Refining Company LLC, Toledo Refining Company LLC, Torrance Refining Company LLC, Torrance Logistics Company LLC, Chalmette Refining L.L.C., Paulsboro Refining Company LLC, PBF Logistics GP LLC, PBF Logistics LP, DCR Storage and Loading LLC, Delaware City Terminaling Company LLC, Toledo Terminaling Company LLC, Delaware Pipeline Company LLC, Delaware City Logistics Company LLC, Paulsboro Terminaling Company LLC, Paulsboro Natural Gas Pipeline Company LLC, Toledo Rail Logistics Company LLC, Chalmette Logistics Company LLC and PBFX Operating Company LLC (incorporated by reference to Exhibit 10.3 filed with PBF Logistics LP’s Quarterly Report on Form 10-Q dated October 31, 2018 (File No. 001-36446))
31.1*	Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Holding Company LLC pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Erik Young, Chief Financial Officer of PBF Holding Company LLC pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1* (1)	Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Holding Company LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2* (1)	Certification of Erik Young, Chief Financial Officer of PBF Holding Company LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

 ——————————

*	Filed herewith.
(1)	This exhibit should not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		PBF Holding Company LLC
Date:	November 6, 2018		By:	/s/ Erik Young
				Erik Young Senior Vice President, Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)
		PBF Finance Corporation
Date:	November 6, 2018		By:	/s/ Erik Young
				Erik Young Senior Vice President, Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

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