Item 7.01.
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Regulation FD Disclosure.
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In connection with the Notes Offering referred to in Item
8.01 below, PBF Logistics LP (the Partnership or PBFX) is disclosing under this Item 7.01 of this Current Report on Form
8-K
the information included below, which is being delivered to
potential investors in connection with the Notes Offering and is provided in this Item 7.01 of this Current Report on Form
8-K
to satisfy the Partnerships public disclosure requirements under Regulation
FD. The information contained in this Item 7.01 does not constitute an offer to sell, or a solicitation of an offer to buy, any of the notes in the Notes Offering or any other securities of the Partnership.
Certain information being delivered to potential investors in connection with the Notes Offering
As previously announced, the Partnership commenced operations on its new 24 interstate pipeline (the Paulsboro Natural Gas
Pipeline) in August 2017 and expects to complete construction on its crude oil storage tank at PBF Holding Company LLCs Chalmette refinery (the Chalmette Storage Tank, and collectively with the Paulsboro Natural Gas Pipeline,
the Organic Projects) during the Partnerships fourth quarter of 2017. Subsequent to the completion and commencement of operations of the Chalmette Storage Tank, the Partnership expects estimated net income, inclusive of the
Paulsboro Natural Gas Pipeline and the Toledo refined product terminal acquired in April 2017 (the Toledo Terminal), of approximately $119.7 million and EBITDA attributable to PBFX (as defined below) of approximately
$159.0 million. In addition, the Partnership expects to incur capital expenditures related to the Organic Projects of approximately $20.0 million subsequent to June 30, 2017 through the end of the year.
The following table reconciles estimated net income to EBITDA attributable to PBFX subsequent to the completion of the Chalmette Storage Tank
and inclusive of the Paulsboro Natural Gas Pipeline and the Toledo Terminal. For purposes of the reconciliation below, run-rate financial information reflects the estimated annual amounts attributable to the Paulsboro Natural Gas Pipeline, Chalmette
Storage Tank, and the Toledo Terminal assuming each asset is fully operational.
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Estimated
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(in millions)
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Annualized actual June 2017
year-to-date
net income (1)
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$
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110.4
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Add: Estimated annual net income of the Organic Projects and the Toledo Terminal
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9.3
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Estimated annualized net income subsequent to the completion of the Organic Projects
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$
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119.7
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Add: Annualized actual June 2017
year-to-date
depreciation and amortization expense (1)
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22.2
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Add: Annualized actual June 2017
year-to-date
interest expense, net and other financing costs (1)
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31.6
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Add: Estimated run-rate annual depreciation and amortization related to the Organic Projects and
the Toledo Terminal
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4.7
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Add: Estimated run-rate annual interest expense, net related to the Organic Projects and the
Toledo Terminal
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1.0
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Estimated annualized run-rate EBITDA
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$
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179.2
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Less: Annualized noncontrolling interest and predecessor EBITDA (1)
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20.2
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Estimated annualized run-rate EBITDA attributable to PBFX
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$
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159.0
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(1)
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Annualized amounts are calculated by multiplying actual
year-to-date
results through June 2017 by a factor of 2.
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The estimated run-rate financial data discussed above has been prepared by, and is the responsibility of, the Partnerships management
and has not been audited or reviewed by the Partnerships independent registered public accounting firm. The estimated run-rates are based upon estimates and upon assumptions the Partnership believes to be reasonable but it is possible that the
Partnerships actual results may not be consistent with our expectations, and the difference may be material. The estimated run-rate financial data discussed above constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which may be beyond the Partnerships control, that may cause actual results to
differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors and uncertainties that may cause actual results to differ include but are not limited to the risks disclosed
in the Partnerships filings with the U.S. Securities and Exchange Commission. All forward-looking statements speak only as of the date hereof. The Partnership undertakes no obligation to revise or update any forward-looking statements
except as may be required by applicable law.
The information contained in Item 7.01 of this Current Report on Form
8-K
is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the
liabilities of that Section. The information contained in Item 7.01 of this Current Report on Form
8-K
shall not be incorporated by reference into any registration statement or other document pursuant to the
Securities Act of 1933, as amended (the Securities Act), or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
Non-GAAP
Financial Measures
The Partnership defines EBITDA as net income (loss) before interest expense, income tax expense, depreciation and amortization expense. The
Partnership defines EBITDA attributable to PBFX as net income (loss) attributable to PBFX before net interest expense, income tax expense, depreciation and amortization expense attributable to PBFX, which excludes the results of acquisitions
from PBF Energy Company LLC prior to the effective dates of such transactions. EBITDA and EBITDA attributable to PBFX are not financial measures prescribed by U.S. generally accepted accounting principles (GAAP).
While EBITDA and EBITDA attributable to PBFX are not financial measures prescribed by GAAP
(non-GAAP),
they are supplemental financial measures that management and external users of the Partnerships consolidated financial statements, such as industry analysts, investors, lenders
and rating agencies, may use to assess:
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the Partnerships operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of EBITDA, financing methods;
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the ability of the Partnerships assets to generate sufficient cash flow to make distributions to the Partnerships unitholders;
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the Partnerships ability to incur and service debt and fund capital expenditures; and
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the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
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The Partnership believes that the presentation of EBITDA and EBITDA attributable to PBFX provides useful information to investors in assessing
the Partnerships financial condition and results of operations. However, EBITDA and EBITDA attributable to PBFX should not be considered alternatives to net income, operating income, cash from operations or any other measure of financial
performance or liquidity presented in accordance with GAAP.
EBITDA and EBITDA attributable to PBFX have important limitations as
analytical tools because they exclude some but not all items that affect net income and net cash provided by operating activities. EBITDA and EBITDA attributable to PBFX are reconciled to their most directly comparable financial measures calculated
and presented in accordance with GAAP in the table included in Item 7.01 of this Current Report on Form
8-K
above.
These
non-GAAP
financial measures should not be considered in isolation or as a substitute for
analysis of the Partnerships results as reported under GAAP. The Partnerships definitions of these
non-GAAP
financial measures may not be comparable to similarly titled measures of other
partnerships, because they may be defined differently by other partnerships in the Partnerships industry, thereby limiting their utility.