Quarterly Report (10-q)

Date : 08/01/2019 @ 9:08PM
Source : Edgar (US Regulatory)
Stock : PBF Logistics LP (PBFX)
Quote : 21.42  0.0 (0.00%) @ 1:00AM

Quarterly Report (10-q)



 
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:  June 30, 2019

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: 001-36446
 
PBF LOGISTICS LP
(Exact name of registrant as specified in its charter)
 
DELAWARE
 
35-2470286
(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)
 














Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Units Representing Limited Partner Interests
PBFX
New York Stock Exchange

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.
Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes þ No o

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
o
 
Accelerated filer þ
 
Non-accelerated filer o
 
Smaller reporting company o
Emerging growth company þ

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. þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of July 30, 2019 , there were 62,108,942 common units outstanding.





PBF LOGISTICS LP

TABLE OF CONTENTS

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

EXPLANATORY NOTE

PBF Logistics LP (“PBFX” or the “Partnership”) is a Delaware limited partnership formed in February 2013. PBF Logistics GP LLC (“PBF GP” or “our general partner”) serves as the general partner of PBFX. PBF GP is wholly-owned by PBF Energy Company LLC (“PBF LLC”). PBF Energy Inc. (“PBF Energy”) is the sole managing member of PBF LLC and, as of June 30, 2019 , owned 99.0% of the total economic interest in PBF LLC. In addition, PBF LLC is the sole managing member of PBF Holding Company LLC (“PBF Holding”), a Delaware limited liability company and affiliate of PBFX. PBF LLC owns 29,953,631 PBFX common units constituting an aggregate 48.2% limited partner interest in PBFX, with the remaining 51.8% limited partner interest owned by public unitholders as of June 30, 2019 .
 
Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q (this “Form 10-Q”) to “Predecessor,” and “we,” “our,” “us,” or like terms, when used in the context of periods prior to the completion of certain acquisitions from PBF LLC, refer to PBF MLP Predecessor, our predecessor for accounting purposes (our “Predecessor”), which includes assets, liabilities and results of operations of certain crude oil, refined products, natural gas and intermediates transportation, terminaling and storage assets, previously operated and owned by certain of PBF Holding’s currently and previously held subsidiaries. As of June 30, 2019 , PBF Holding, together with its subsidiaries, owns and operates five oil refineries and related facilities in North America. PBF Energy, through its ownership of PBF LLC, controls all of the business and affairs of PBFX and PBF Holding.



3



References in this Form 10-Q to “PBF Logistics LP,” “PBFX,” the “Partnership” and “we,” “our,” or “us,” or like terms used in the context of periods on or after the completion of certain acquisitions from PBF LLC, refer to PBF Logistics LP and its subsidiaries.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-Q (including information incorporated by reference) contains certain “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995, which 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; 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 “Item 1A. Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q; in our Annual Report on Form 10-K for the year ended December 31, 2018 (our “ 2018 Form 10-K”) and in our other filings with the U.S. Securities and Exchange Commission (“SEC”). All forward-looking information in this 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:
our limited operating history as a separate public partnership;
changes in general economic conditions;
our ability to make, complete and integrate acquisitions from affiliates or third parties, and to realize the benefits from such acquisitions;
our ability to have sufficient cash from operations to enable us to pay the minimum quarterly distribution;
competitive conditions in our industry;
actions taken by our customers and competitors;
the supply of, and demand for, crude oil, refined products, natural gas and logistics services;
our ability to successfully implement our business plan;
our dependence on PBF Energy for a substantial majority of our revenue subjects us to the business risks of PBF Energy, which include the possibility that contracts will not be renewed because they are no longer beneficial for PBF Energy;
a substantial majority of our revenue is generated at PBF Energy’s facilities, particularly at PBF Energy’s Delaware City, Toledo and Torrance refineries, and any adverse development at any of these facilities could have a material adverse effect on us;
our ability to complete internal growth projects on time and on budget;
the price and availability of debt and equity financing;
operating hazards and other risks incidental to the receiving, handling, storage and transferring of crude oil, refined products, natural gas and intermediates;


4



natural disasters, weather-related delays, casualty losses and other matters beyond our control;
interest rates;
labor relations;
changes in the availability and cost of capital;
the effects of existing and future laws and governmental regulations, including those related to the shipment of crude oil by rail;
changes in insurance markets impacting costs and the level and types of coverage available;
the timing and extent of changes in commodity prices and demand for PBF Energy’s refined products and natural gas and the differential in the prices of different crude oils;
the suspension, reduction or termination of PBF Energy’s obligations under our commercial agreements;
disruptions due to equipment interruption or failure at our facilities, PBF Energy’s facilities or third-party facilities on which our business is dependent;
incremental costs as a separate public partnership;
our general partner and its affiliates, including PBF Energy, have conflicts of interest with us and limited duties to us and our unitholders, and they may favor their own interests to the detriment of us and our other common unitholders;
our partnership agreement restricts the remedies available to holders of our common units for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty;
holders of our common units have limited voting rights and are not entitled to elect our general partner or its directors;
our tax treatment depends on our status as a partnership for U.S. federal income tax purposes, as well as our not being subject to a material amount of entity level taxation by individual states;
changes at any time (including on a retroactive basis) in the tax treatment of publicly traded partnerships, including related impacts on potential dropdown transactions with PBF LLC, or an investment in our common units;
our unitholders will be required to pay taxes on their share of our taxable income even if they do not receive any cash distributions from us;
the effects of future litigation; and
other factors discussed elsewhere in this Form 10-Q.
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 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 Form 10-Q. Except as required by applicable law, including the securities laws of the U.S., we undertake no obligation 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.



5


PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

PBF LOGISTICS LP
CONDENSED CONSOLIDATED BALANCE SHEETS
( unaudited, in thousands, except unit data )
 
 
June 30,
2019
 
December 31,
2018
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
20,000

 
$
19,908

Accounts receivable - affiliates
 
47,279

 
37,052

Accounts receivable
 
5,129

 
7,511

Prepaids and other current assets
 
5,883

 
4,598

Total current assets
 
78,291

 
69,069

Property, plant and equipment, net
 
855,958

 
862,117

Goodwill
 
6,332

 
6,332

Other non-current assets
 
18,992

 
18,835

Total assets
 
$
959,573

 
$
956,353

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable - affiliates
 
$
5,469

 
$
12,047

Accounts payable
 
5,422

 
4,660

Accrued liabilities
 
44,642

 
46,312

Deferred revenue
 
2,875

 
2,960

Total current liabilities
 
58,408

 
65,979

Long-term debt
 
769,219

 
673,324

Other long-term liabilities
 
24,952

 
23,860

Total liabilities
 
852,579

 
763,163

 
 
 
 
 
Commitments and contingencies (Note 9)
 

 

 
 
 
 
 
Equity:
 
 
 
 
Common unitholders (62,107,210 and 45,348,663 units issued and outstanding, as of June 30, 2019 and December 31, 2018, respectively)
 
106,994

 
23,718

Total PBF Logistics LP equity
 
106,994

 
23,718

Noncontrolling interest
 

 
169,472

Total equity
 
106,994

 
193,190

Total liabilities and equity
 
$
959,573

 
$
956,353



See Notes to Condensed Consolidated Financial Statements.
6




PBF LOGISTICS LP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except unit and per unit data)
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2019
 
2018
 
2019
 
2018
Revenue:
 
 
 
 
 
 
 
 
Affiliate
 
$
74,656

 
$
63,785

 
$
145,988

 
$
124,649

Third-party
 
8,094


4,314


15,607


8,190

Total revenue
 
82,750

 
68,099

 
161,595

 
132,839

 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
Operating and maintenance expenses
 
28,553

 
20,724

 
58,469

 
40,604

General and administrative expenses
 
7,580

 
6,488

 
13,590

 
10,779

Depreciation and amortization
 
8,854

 
7,091

 
17,575

 
13,734

Total costs and expenses
 
44,987

 
34,303

 
89,634

 
65,117

 
 
 
 
 
 
 
 
 
Income from operations
 
37,763

 
33,796

 
71,961

 
67,722

 
 
 
 
 
 
 
 
 
Other expense:
 
 
 
 
 
 
 
 
Interest expense, net
 
(11,216
)
 
(10,029
)
 
(22,129
)
 
(19,614
)
Amortization of loan fees and debt premium
 
(446
)
 
(396
)
 
(895
)
 
(759
)
Accretion on discounted liabilities
 
(773
)
 

 
(1,533
)
 

Net income
 
25,328

 
23,371

 
47,404

 
47,349

Less: Net loss attributable to Predecessor
 

 
(1,084
)
 

 
(2,363
)
Less: Net income attributable to noncontrolling interest
 
3,162

 
4,363

 
7,881

 
8,385

Net income attributable to the partners
 
22,166

 
20,092

 
39,523

 
41,327

Less: Net income attributable to the IDR holder
 

 
3,415

 

 
6,370

Net income attributable to PBF Logistics LP unitholders
 
$
22,166

 
$
16,677

 
$
39,523

 
$
34,957

 
 
 
 
 
 
 
 
 
Net income per limited partner unit:
 
 
 
 
 
 
 
 
Common units - basic
 
$
0.37

 
$
0.39

 
$
0.72

 
$
0.83

Common units - diluted
 
0.37

 
0.39

 
0.72

 
0.83

 
 
 
 
 
 
 
 
 
Weighted-average limited partner units outstanding:
 
 
 
 
 
 
 
 
Common units - basic
 
60,279,287

 
42,231,119

 
54,748,755

 
42,176,202

Common units - diluted
 
60,364,347

 
42,294,616

 
54,776,257

 
42,190,136



See Notes to Condensed Consolidated Financial Statements.
7




PBF LOGISTICS LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 
 
Six Months Ended June 30,
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 
Net income
 
$
47,404

 
$
47,349

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
17,575

 
13,734

Amortization of loan fees and debt premium
 
895

 
759

Accretion on discounted liabilities
 
1,533

 

Unit-based compensation expense
 
4,351

 
3,497

Changes in operating assets and liabilities:
 
 
 
 
Accounts receivable - affiliates
 
(10,227
)
 
9,344

Accounts receivable
 
2,382

 
(1,077
)
Prepaids and other current assets
 
(1,285
)
 
242

Accounts payable - affiliates
 
(2,630
)
 
(1,607
)
Accounts payable
 
762

 
(2,572
)
Accrued liabilities
 
(2,857
)
 
(2,754
)
Deferred revenue
 
(85
)
 
(286
)
Other assets and liabilities
 
(1,932
)
 
(1,302
)
Net cash provided by operating activities
 
55,886

 
65,327

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Knoxville Terminals Purchase
 

 
(58,000
)
Expenditures for property, plant and equipment
 
(15,152
)
 
(7,671
)
Net cash used in investing activities
 
(15,152
)
 
(65,671
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Proceeds from issuance of common units
 
132,483

 

Acquisition of TVPC noncontrolling interest
 
(200,000
)
 

Distributions to unitholders
 
(59,625
)
 
(46,611
)
Distributions to TVPC members
 
(8,500
)
 
(11,250
)
Contribution from parent
 

 
4,193

Proceeds from revolving credit facility
 
196,000

 
64,000

Repayment of revolving credit facility
 
(101,000
)
 
(9,700
)
Deferred financing costs
 

 
(271
)
Net cash (used in) provided by financing activities
 
(40,642
)
 
361

 
 
 
 
 
Net change in cash and cash equivalents
 
92

 
17

Cash and cash equivalents at beginning of year
 
19,908

 
19,664

Cash and cash equivalents at end of period
 
$
20,000

 
$
19,681

 
 
 
 
 
Supplemental disclosure of non-cash investing and financing activities:
 
 
 
 
Accrued capital expenditures
 
$
405

 
$
24

Contribution of net assets from PBF LLC
 
242

 

Units issued in connection with the IDR Restructuring
 
215,300

 

Assets acquired under operating leases
 
482

 


See Notes to Condensed Consolidated Financial Statements.
8


PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

PBF Logistics LP (“PBFX” or the “Partnership”) is a Delaware limited partnership formed in February 2013. PBF Logistics GP LLC (“PBF GP” or “our general partner”) serves as the general partner of PBFX. PBF GP is wholly-owned by PBF Energy Company LLC (“PBF LLC”). PBF Energy Inc. (“PBF Energy”) is the sole managing member of PBF LLC and, as of June 30, 2019 , owned 99.0% of the total economic interest in PBF LLC. In addition, PBF LLC is the sole managing member of PBF Holding Company LLC (“PBF Holding”), a Delaware limited liability company and affiliate of PBFX. PBF LLC owns 29,953,631 PBFX common units constituting an aggregate 48.2% limited partner interest in PBFX, with the remaining 51.8% limited partner interest owned by public unitholders as of June 30, 2019 .

PBFX engages in the receiving, handling, storage and transferring of crude oil, refined products, natural gas and intermediates. The Partnership does not take ownership of or receive any payments based on the value of the crude oil, products, natural gas or intermediates that it handles and does not engage in the trading of any commodities. PBFX’s assets are integral to the operations of PBF Holding’s refineries, and as a result, the Partnership continues to generate a substantial majority of its revenue from transactions with PBF Holding. Additionally, certain of PBFX’s assets also generate revenue from third-party transactions.

On February 28, 2019, the Partnership closed on an Equity Restructuring Agreement (the “IDR Restructuring Agreement”) with PBF LLC and PBF GP, pursuant to which PBFX’s incentive distribution rights (“IDRs”) held by PBF LLC were canceled and converted into 10,000,000 newly issued PBFX common units (the “IDR Restructuring”). Transaction costs related to the IDR Restructuring were $2,057 for the six months ended June 30, 2019 and were included in “General and administrative expenses” within the Partnership’s condensed consolidated statements of operations. Subsequent to the closing of the IDR Restructuring, no distributions were made to PBF LLC with respect to the IDRs, and the newly issued PBFX common units are entitled to normal distributions.

On April 24, 2019, the Partnership entered into a Contribution Agreement with PBF LLC (the “TVPC Contribution Agreement”), pursuant to which PBF LLC contributed to the Partnership all of the issued and outstanding limited liability company interests of TVP Holding Company LLC (“TVP Holding”) for total consideration of $200,000 (the “TVPC Acquisition”). Subsequent to the closing of the TVPC Acquisition on May 31, 2019, the Partnership owns 100% of the equity interest in Torrance Valley Pipeline Company LLC (“TVPC”). Refer to Note 3 “Acquisitions” of the Notes to Condensed Consolidated Financial Statements for further discussion regarding the TVPC Acquisition.

Principles of Combination and Consolidation and Basis of Presentation

In connection with, and subsequent to, PBFX’s initial public offering (“IPO”), the Partnership has acquired certain assets from PBF LLC (collectively referred to as the “Contributed Assets”). Such acquisitions completed subsequent to the IPO were made through a series of drop-down transactions with PBF LLC (collectively referred to as the “Acquisitions from PBF”). The assets, liabilities and results of operations of the Contributed Assets prior to their acquisition by PBFX are collectively referred to as the “Predecessor.” The transactions through which PBFX acquired the Contributed Assets were transfers of assets between entities under common control. Accordingly, the accompanying condensed consolidated financial statements and related notes present the results of operations and cash flows of our Predecessor for all periods presented prior to the effective date of each transaction. The financial statements of our Predecessor have been prepared from the separate records maintained by PBF Energy and may not necessarily be indicative of the conditions that would have existed or the results of operations if the Predecessor had been operated as an unaffiliated entity. See (i) the Annual Report on Form 10-K for the year ended December 31, 2018 (the “ 2018 Form 10-K”) for additional information regarding the Acquisitions from PBF and the agreements that were entered into or amended with related parties in connection with these acquisitions and (ii) Note 3 “Acquisitions” of the Notes to Condensed Consolidated Financial Statements for further discussion regarding the TVPC Acquisition.



9

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, PBFX has included all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations and cash flows of PBFX for the periods presented. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the full year.

The Predecessor generally did not historically operate its respective assets for the purpose of generating revenue independent of other PBF Energy businesses prior to the IPO or the effective dates of the Acquisitions from PBF, with the exception of the Paulsboro Lube Oil Terminal (as defined in Note 3 “Acquisitions” of the Notes to Condensed Consolidated Financial Statements). All intercompany accounts and transactions have been eliminated.

Summary of Significant Accounting Policies

Reclassifications

Certain amounts previously reported in the Partnership’s condensed consolidated financial statements for prior periods have been reclassified to conform to the presentation within this Quarterly Report on Form 10-Q. These reclassifications include the separation of “Accounts payable” and “Accrued liabilities” into two line items within the Partnership’s condensed consolidated balance sheets and statements of cash flows, as well as the corresponding statements within Note 13 “Condensed Consolidating Financial Statements of PBF Logistics” of the Notes to Condensed Consolidated Financial Statements.

Recently Adopted Accounting Guidance

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASC 842”) to increase the transparency and comparability of leases among entities. ASC 842 supersedes the lease accounting guidance in Accounting Standards Codification 840 “Leases,” and 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 Partnership adopted ASC 842 effective January 1, 2019, using a modified retrospective approach. The adoption of ASC 842 resulted in the inclusion of less than $1,000 of operating leases recorded on the Partnership’s balance sheets, with operating lease right of use assets recorded in “Other non-current assets” and operating lease liabilities recorded in “Accrued liabilities” or “Other long-term liabilities” based on the future timing of lease payments. The adoption of ASC 842 did not materially impact the Partnership’s statements of operations or statements of cash flows. The Partnership’s condensed consolidated financial statements for the periods prior to the adoption of ASC 842 are not adjusted and are reported in accordance with the Partnership’s historical accounting policy. See Note 2 “Revenue” of the Notes to Condensed Consolidated Financial Statements for additional information about the impact of ASC 842 to the Partnership as a lessor.

In January 2017, the FASB issued ASU No. 2017-04, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”) to provide updated guidance on goodwill impairment testing. Under ASU 2017-04, Step 2 of the goodwill impairment analysis would be eliminated. This step required a comparison of the implied fair value to the carrying value of goodwill of the reporting unit. Subsequent to the effective date of ASU 2017-04, during the annual, or if applicable, interim goodwill impairment assessment, entities would perform the test by comparing the fair value of the reporting unit with the carrying value of the reporting unit. The impairment charge would be the excess amount of which carrying value is greater than fair value, with the total amount limited to the carrying value of goodwill. ASU 2017-04 is effective for goodwill impairment assessments beginning after December 15, 2019. The Partnership early adopted the new standard effective January 1, 2019, and the adoption did not have a material impact on its condensed consolidated financial statements and related disclosures.


10

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). This guidance amends the guidance on measuring credit losses on financial assets held at amortized cost. ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Partnership does not expect that the adoption of this guidance will have a material impact on its condensed consolidated financial statements and related disclosures.

2. REVENUE

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration the Partnership expects to be entitled to in exchange for those goods or services.

As noted in Note 11 “Segment Information” of the Notes to Condensed Consolidated Financial Statements, the Partnership’s business consists of two reportable segments: (i) Transportation and Terminaling and (ii) Storage.

The following table provides information relating to the Partnership’s revenue for each service category by segment for the periods presented:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2019
 
2018
 
2019
 
2018
Transportation and Terminaling Segment
 
 
 
 
 
 
 
 
Terminaling
 
$
34,152

 
$
29,410

 
$
66,505

 
$
56,461

Pipeline
 
20,326

 
19,217

 
38,953

 
37,706

Other
 
15,178

 
12,506

 
30,157

 
24,637

Total
 
69,656

 
61,133

 
135,615

 
118,804

Storage Segment
 
 
 
 
 
 
 
 
Storage
 
13,094

 
6,966

 
25,980

 
14,035

Total
 
13,094

 
6,966

 
25,980

 
14,035

Total Revenue
 
$
82,750

 
$
68,099

 
$
161,595

 
$
132,839


PBFX recognizes revenue by charging fees for crude oil and refined products terminaling, storage and pipeline services based on the greater of the contractual minimum volume commitment (“MVC”), as applicable, or the delivery of actual volumes transferred or stored based on contractual rates applied to throughput or storage volumes.

Minimum Volume Commitments

Transportation and Terminaling Segment

The Partnership’s Transportation and Terminaling segment consists of product terminals, pipelines, crude unloading facilities and other facilities capable of transporting and handling crude oil, refined products and natural gas. Certain of the Transportation and Terminaling commercial agreements contain MVCs. Under these commercial agreements, if the Partnership’s customer fails to transport its minimum throughput volumes during any specified period, the customer will pay the Partnership a deficiency payment equal to the volume of the deficiency multiplied by the contractual rate then in effect. The deficiency payment is initially recorded as deferred revenue   on the


11

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


Partnership’s balance sheets for all contracts in which the MVC deficiency makeup period is contractually longer than a fiscal quarter.

Certain of the Partnership’s customers may apply the amount of any such deficiency payments as a credit for volumes transported on the applicable pipeline or terminal system in excess of its MVC during the following quarters under the terms of the applicable agreement. The Partnership recognizes operating revenue for the deficiency payments when credits are used for volumes transported in excess of MVCs or at the end of the contractual period. If the Partnership determines, based on all available information, that it is remote that the Partnership’s customer will utilize these deficiency payments, the amount of the expected unused credits will be recognized as operating revenue in the period when that determination is made. The use or recognition of the credits is recorded as a reduction to deferred revenue.

Storage Segment

The Partnership earns storage revenue under crude oil and refined products storage contracts through capacity reservation agreements, where the Partnership collects a fee for reserving storage capacity for customers in its facilities. Customers generally pay reservation fees based on the level of storage capacity reserved rather than the actual volumes stored.

As of  June 30, 2019 , future fees for MVCs to be received related to noncancelable commercial terminaling, pipeline and storage agreements were as follows:
Remainder of 2019
$
58,496

2020
114,253

2021
113,355

2022
91,476

2023
87,199

Thereafter
170,794

Total MVC payments to be received (1)(2)
$
635,573

(1) All fixed consideration from contracts with customers is included in the amounts presented above. Variable consideration that is constrained or not required to be estimated as it reflects our efforts to perform is excluded.
(2) Arrangements deemed implicit leases are excluded from this table.

Leases

Lessor Disclosure Following the Adoption of ASC 842

The Partnership has leased certain of its assets under lease agreements with terms generally up to  fifteen years , including leases of storage, terminaling and pipeline assets. Some leases include options to terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised. The Partnership’s agreements generally do not provide an option for the lessee to purchase the leased equipment at the end of the lease term. However, in connection with the affiliate lease agreement for the interstate natural gas pipeline at PBF Holding’s Paulsboro Refinery (the “Paulsboro Natural Gas Pipeline”), the Partnership granted a right of first refusal in favor of PBF LLC such that the Partnership would be required to give PBF Holding the first opportunity to purchase the Paulsboro Natural Gas Pipeline at market value prior to selling to an unrelated third party if PBF Holding refused to purchase it.

At inception, the Partnership determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. As of June 30, 2019 , all of the Partnership’s leases have been determined to be operating leases. Some of the Partnership’s lease arrangements contain lease components ( e.g., MVCs) and non-lease components ( e.g., maintenance, labor charges, etc.). The Partnership accounts for the lease and non-lease components as a single lease component.


12

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


Certain of the Partnership’s lease agreements include MVCs that are adjusted periodically for an index or rate. The leases are initially measured using the projected payments adjusted for the index or rate in effect at the commencement date. The Partnership’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Partnership expects to derive significant future benefits from its leased assets following the end of the lease term, as the remaining useful life would be sufficient to allow the Partnership to enter into new leases for such assets.

In the normal course of business, the Partnership enters into contracts with PBF Holding and its refineries whereby PBF Holding and its refineries lease certain of the Partnership’s storage, terminaling and pipeline assets. The Partnership believes the terms and conditions under these leases are generally no less favorable to either party than those that could have been negotiated with unaffiliated parties with respect to similar services. The terms for these affiliate leases range from one to fifteen years. Leases with affiliates represent approximately 95% of the undiscounted future rental income from the Partnership’s leased assets. These affiliate lease arrangements accounted for $38,693 of total lease revenue of $43,046 and $74,780 of total lease revenue of $83,482 for the three and six months ended June 30, 2019 , respectively, and $28,556 of total lease revenue of $30,149 and $56,827 of total lease revenue of $59,925 for the three and six months ended June 30, 2018 , respectively.

Undiscounted Cash Flows

The table below presents the fixed component of the undiscounted cash flows to be received for each of the first five years and the total remaining years for the Partnership’s operating leases as of June 30, 2019 :
Remainder of 2019
$
71,940

2020
150,193

2021
148,971

2022
138,768

2023
137,406

Thereafter
371,578

Total undiscounted future cash to be received
$
1,018,856


Assets Under Lease

The Partnership’s assets subject to lease are included in “Property, plant and equipment, net” within the Partnership’s condensed consolidated balance sheets. The table below quantifies by property, plant and equipment category the assets that are subject to lease as of June 30, 2019 :
 
June 30,
2019
Land
$
98,337

Pipelines
315,212

Terminals and equipment
50,235

Storage facilities
198,870

 
662,654

Accumulated depreciation
(62,988
)
Net assets under lease
$
599,666






13

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


Deferred Revenue

The Partnership records deferred revenue when cash payments are received or due in advance of performance, including amounts which are refundable. Deferred revenue was $2,875 and $2,960 as of June 30, 2019 and December 31, 2018 , respectively. The decrease in the deferred revenue balance as of June 30, 2019  is primarily driven by the timing and extent of cash payments received in advance of satisfying the Partnership’s performance obligations for the comparative periods.

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

3. ACQUISITIONS
 
Third-Party Acquisitions

Knoxville Terminals Purchase

On April 16, 2018, the Partnership’s wholly-owned subsidiary, PBF Logistics Products Terminals LLC (“PLPT”), completed the purchase of two refined product terminals located in Knoxville, Tennessee (the “Knoxville Terminals Purchase”), which include product tanks, pipeline connections to the Colonial Pipeline Company and Plantation Pipe Line Company pipeline systems and truck loading facilities (the “Knoxville Terminals”) from Cummins Terminals, Inc. (“Cummins”).

The aggregate purchase price for the Knoxville Terminals Purchase was $58,000 , excluding working capital. The consideration was financed through a combination of cash on hand and borrowings under the Partnership’s Revolving Credit Facility (as defined in Note 6 “Debt” of the Notes to Condensed Consolidated Financial Statements). The final purchase price and fair value allocation were completed as of December 31, 2018.

PBFX accounted for the Knoxville Terminals Purchase as a business combination in accordance with GAAP whereby the Partnership recognizes assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition. Any excess consideration transferred over the estimated fair values of the identifiable net assets acquired is recorded as goodwill.

The total purchase consideration and the fair values of the assets and liabilities at the acquisition date were as follows:
 
Purchase Price
Gross purchase price
$
58,000

Working capital
356

Total consideration
$
58,356













14

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


The following table summarizes the final amounts recognized for assets acquired and liabilities assumed as of the acquisition date:
 
Fair Value Allocation
Prepaids and other current assets
$
356

Property, plant and equipment
45,768

Intangibles*
5,900

Goodwill
6,332

Fair value of net assets acquired
$
58,356

* Intangibles are included in “Other non-current assets” within the Partnership’s condensed consolidated balance sheets.

The Partnership’s condensed consolidated financial statements for the six months ended June 30, 2019 include the results of operations of the Knoxville Terminals subsequent to the Knoxville Terminals Purchase whereas the same period in 2018 does not include the results of operations of such assets prior to April 16, 2018. On an unaudited pro forma basis, the revenue and net income of PBFX assuming the acquisition had occurred on January 1, 2017, for the periods indicated, are shown below. The unaudited pro forma information does not purport to present what PBFX’s actual results would have been had the Knoxville Terminals Purchase occurred on January 1, 2017, nor is the financial information indicative of the results of future operations. The unaudited pro forma financial information includes the depreciation and amortization expense related to the acquisition and interest expense associated with the Knoxville Terminals Purchase financing.
 
Six Months Ended June 30, 2018
(Unaudited)
Pro forma revenue
$
136,369

Pro forma net income attributable to PBF Logistics LP unitholders
35,153


East Coast Storage Assets Acquisition

On October 1, 2018, the Partnership closed the acquisition of CPI Operations LLC (“CPI”), whose assets include a storage facility with multi-use storage capacity, an Aframax-capable marine facility, a rail facility, a truck terminal, equipment, contracts and certain other idled assets (collectively, the “East Coast Storage Assets”) located on the Delaware River near Paulsboro, New Jersey (the “East Coast Storage Assets Acquisition”), which had been contemplated by an agreement dated as of July 16, 2018 between the Partnership and Crown Point International LLC (“Crown Point”). Additionally, the East Coast Storage Assets Acquisition includes an earn-out provision related to an existing commercial agreement with a third party, based on the future results of certain of the acquired idled assets (the “Contingent Consideration”), which are expected to be restarted in the fourth quarter of 2019.

The aggregate purchase price for the East Coast Storage Assets Acquisition was $126,989 , including working capital and the Contingent Consideration, which was comprised of an initial payment at closing of $75,000 with a remaining balance of $32,000 payable one year after closing. The residual purchase consideration consists of the Contingent Consideration. The consideration was financed through a combination of cash on hand and borrowings under the Partnership’s Revolving Credit Facility (as defined in Note 6 “Debt” of the Notes to Condensed Consolidated Financial Statements). The fair value allocation is subject to adjustment pending completion of the final purchase valuation, which was in process as of June 30, 2019, as the purchase price and fair value allocation may be subject to adjustment due to changes in assumptions and timing that may impact the Contingent Consideration.

PBFX accounted for the East Coast Storage Assets Acquisition as a business combination under GAAP whereby the Partnership recognizes assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition.


15

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


The total purchase consideration and the estimated fair values of the assets and liabilities at the acquisition date were as follows:
 
Purchase Price
Gross purchase price*
$
105,900

Estimated working capital adjustments
(11
)
Contingent Consideration **
21,100

Total consideration
$
126,989

* Includes $30,900 net present value payable of $32,000 due to Crown Point one year after closing, which is included in “Accrued liabilities” within the Partnership’s condensed consolidated balance sheets.
** Contingent Consideration is included in “Other long-term liabilities” within the Partnership’s condensed consolidated balance sheets.

The following table summarizes the estimated amounts recognized for assets acquired and liabilities assumed as of the acquisition date:
 
Fair Value Allocation
Accounts receivable
$
436

Prepaids and other current assets
1,770

Property, plant and equipment
114,406

Intangibles*
13,300

Accounts payable
(902
)
Accrued liabilities
(1,271
)
Other long-term liabilities
(750
)
Estimated fair value of net assets acquired
$
126,989

* Intangibles are included in “Other non-current assets” within the Partnership’s condensed consolidated balance sheets.

The East Coast Storage Assets Acquisition includes consideration in the form of the Contingent Consideration. Pursuant to the agreement, the Partnership and Crown Point will share equally in the future operating profits of the restarted assets, as defined in the agreement, over a contractual term of up to three years starting in 2019. The Partnership recorded the Contingent Consideration based on its estimated fair value of $21,100 at the acquisition date, which was recorded in “Other long-term liabilities” within the Partnership’s condensed consolidated balance sheets.

The Partnership’s condensed consolidated financial statements for the six months ended June 30, 2019 include the results of operations of the East Coast Storage Assets subsequent to the East Coast Storage Assets Acquisition. The same period in 2018 does not include the results of operations of such assets. On an unaudited pro forma basis, the revenue and net income of PBFX assuming the acquisition had occurred on January 1, 2017, for the periods indicated, are shown below. The unaudited pro forma information does not purport to present what PBFX’s actual results would have been had the East Coast Storage Assets Acquisition occurred on January 1, 2017, nor is the financial information indicative of the results of future operations. The unaudited pro forma financial information includes the depreciation and amortization expense related to the acquisition and interest expense associated with the East Coast Storage Assets Acquisition financing.
 
Six Months Ended June 30, 2018
(Unaudited)
Pro forma revenue
$
144,454

Pro forma net income attributable to PBF Logistics LP unitholders
30,117








16

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


Acquisitions from PBF

The following Acquisitions from PBF were transactions between affiliate companies. As a result, the acquisitions were accounted for as transfers of assets between entities under common control in accordance with GAAP. The assets and liabilities of the Acquisitions from PBF were transferred at their historical carrying value.

Development Assets Acquisition

On July 16, 2018, the Partnership entered into four contribution agreements with PBF LLC, pursuant to which PBF Energy contributed to PBFX certain of its subsidiaries (the “Development Assets Contribution Agreements”). Pursuant to the Development Assets Contribution Agreements, the Partnership acquired from PBF LLC 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 PBF Holding’s 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 PBF Holding’s Chalmette Refinery; Paulsboro Terminaling Company LLC (“PTC”), whose assets consist of a lube oil terminal facility located at PBF Holding’s 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 PBF Holding’s 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”). The acquisition of the Development Assets closed on July 31, 2018 for total consideration of $31,586 , consisting of 1,494,134 common units issued to PBF LLC (the “Development Assets Acquisition”).

TVPC Acquisition

On April 24, 2019, the Partnership entered into the TVPC Contribution Agreement, pursuant to which the Partnership acquired from PBF LLC all of the issued and outstanding limited liability company interests of TVP Holding, which held the remaining 50% equity interests in TVPC. The TVPC Acquisition closed on May 31, 2019 for total consideration of $200,000 in cash, which was financed through proceeds from the April Registered Direct Offering (as defined in Note 7 “Equity” of the Notes to Condensed Consolidated Financial Statements) and borrowings under the Partnership’s Revolving Credit Facility (as defined in Note 6 “Debt” of the Notes to Condensed Consolidated Financial Statements). As a result of the TVPC Acquisition, the Partnership owns 100% of the equity interest in TVPC.

Acquisition Expenses

PBFX incurred acquisition related costs of $930 and $1,051 for the three and six months ended June 30, 2019 , respectively, primarily consisting of consulting and legal expenses related to the TVPC Acquisition and other pending and non-consummated acquisitions. PBFX incurred acquisition related costs of $669 and $1,152 for the three and six months ended June 30, 2018 , respectively, primarily consisting of consulting and legal expenses related to the Knoxville Terminals Purchase and other pending and non-consummated acquisitions. These costs are included in “General and administrative expenses” within the Partnership’s condensed consolidated statements of operations.










17

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


4. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the following:
 
 
June 30,
2019
 
December 31,
2018
Land
 
$
115,957

 
$
115,957

Pipelines
 
339,286

 
337,474

Terminals and equipment
 
279,325

 
259,441

Storage facilities
 
216,714

 
213,937

Construction in progress
 
6,910

 
20,439

 
 
958,192

 
947,248

Accumulated depreciation
 
(102,234
)
 
(85,131
)
Property, plant and equipment, net
 
$
855,958

 
$
862,117


Depreciation expense was $17,324 and $13,611 for the six months ended June 30, 2019 and 2018 , respectively.

5. INTANGIBLES

The Partnership’s net intangibles balance consisted of the following:
 
 
June 30,
2019
 
December 31,
2018
Customer contracts
 
$
13,300

 
$
13,300

Customer relationships
 
5,900

 
5,900

 
 
19,200

 
19,200

Accumulated amortization
 
(646
)
 
(395
)
Total intangibles*
 
$
18,554

 
$
18,805

* Intangibles are included in “Other non-current assets” within the Partnership’s condensed consolidated balance sheets.

Amortization expense was $251 and $123 for the six months ended June 30, 2019 and 2018 , respectively.

6. DEBT

Total debt was comprised of the following:
 
 
June 30,
2019
 
December 31,
2018
2023 Notes
 
$
525,000

 
$
525,000

Revolving credit facility (a)(b)
 
251,000

 
156,000

Total debt outstanding
 
776,000

 
681,000

Unamortized debt issuance costs
 
(9,310
)
 
(10,496
)
Unamortized 2023 Notes premium
 
2,529

 
2,820

Net carrying value of debt
 
$
769,219

 
$
673,324

___________________
(a)
PBFX had $4,110 outstanding letters of credit and $244,890 available under its $500,000 amended and restated revolving credit facility with Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders (as amended, the “Revolving Credit Facility”) as of  June 30, 2019 .


18

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


(b)
During the six months ended June 30, 2019 , PBFX incurred net borrowings of $95,000 under the Revolving Credit Facility to fund the TVPC Acquisition, other capital expenditures and working capital requirements.

Fair Value Measurement

A fair value hierarchy (Level 1, Level 2, or Level 3) is used to categorize fair value amounts based on the quality of inputs used to measure fair value. Accordingly, fair values derived from Level 1 inputs utilize quoted prices in active markets for identical assets or liabilities. Fair values derived from Level 2 inputs are based on quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are either directly or indirectly observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

The estimated fair value of the Revolving Credit Facility approximates its carrying value, categorized as a Level 2 measurement, as this borrowing bears interest based upon short-term floating market interest rates. The estimated fair value of the Partnership’s 6.875% Senior Notes due 2023 (the “2023 Notes”), 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 2023 Notes and was approximately $542,778 and $515,336 at June 30, 2019 and December 31, 2018 , respectively. The carrying value and fair value of PBFX’s debt, exclusive of unamortized debt issuance costs and unamortized premium on the 2023 Notes, was $776,000 and  $793,778 as of  June 30, 2019 , respectively, and $681,000 and $671,336 as of December 31, 2018 , respectively.

7. EQUITY

PBFX had 32,153,579 common units held by the public outstanding as of June 30, 2019 . PBF LLC owns 29,953,631 PBFX common units constituting an aggregate of 48.2% of PBFX’s limited partner interest as of June 30, 2019 .

Share Activity

The partnership agreement authorizes PBFX to issue an unlimited number of additional partnership interests for the consideration of, and on the terms and conditions determined by, PBFX’s general partner without the approval of the unitholders. It is possible that PBFX will fund future acquisitions through the issuance of additional common units, subordinated units or other partnership interests.

The following table presents changes in PBFX common units outstanding:
 
 
Three Months Ended June 30,
 
 
2019
 
2018
Balance at beginning of period
 
55,348,821

 
41,900,708

Vesting of phantom units, net of forfeitures
 
172,889

 
172,354

New units issued
 
6,585,500

 

Balance at end of period
 
62,107,210

 
42,073,062

 
 
Six Months Ended June 30,
 
 
2019
 
2018
Balance at beginning of period
 
45,348,663

 
41,900,708

Vesting of phantom units, net of forfeitures
 
173,047

 
172,354

New units issued
 
16,585,500

 

Balance at end of period
 
62,107,210

 
42,073,062




19

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


On February 28, 2019, as a result of the closing of the IDR Restructuring, PBFX’s IDRs held by PBF LLC were canceled and converted into 10,000,000 newly issued PBFX common units. On April 24, 2019, the Partnership entered into subscription agreements to sell an aggregate of 6,585,500 common units to certain institutional investors in a registered direct public offering (the “April Registered Direct Offering”) for gross proceeds of approximately $135,000 . The April Registered Direct Offering closed on April 29, 2019.

Additionally, 233,993 of the Partnership’s phantom units issued under the PBFX 2014 Long-Term Incentive Plan (“LTIP”) vested and were converted into common units held by certain directors, officers and current and former employees of our general partner or its affiliates during the year ended December 31, 2018 .

Holders of any additional common units PBFX issues will be entitled to share equally with the then-existing common unitholders in PBFX’s distributions of available cash. 

Noncontrolling Interest

Prior to the TVPC Acquisition, PBFX’s wholly-owned subsidiary, PBFX Operating Company LP (“PBF Op Co”), held a 50% controlling interest in TVPC, with the other 50% equity interest in TVPC held by TVP Holding, a subsidiary of PBF Holding. PBFX Op Co was the sole managing member of TVPC. PBFX, through its ownership of PBFX Op Co, consolidated the financial results of TVPC and recorded a noncontrolling interest for the economic interest in TVPC held by TVP Holding. Noncontrolling interest on the condensed consolidated statements of operations included the portion of net income or loss attributable to the economic interest in TVPC held by TVP Holding. Noncontrolling interest on the condensed consolidated balance sheets included the portion of net assets of TVPC attributable to TVP Holding.

Subsequent to the TVPC Acquisition, PBFX owns 100% of the equity interest in TVPC and no longer records a noncontrolling interest related to TVPC.

Equity Activity

The following tables summarize the changes in the carrying amount of the Partnership’s equity during the six months ended June 30, 2019 and 2018 :
 
 
Common Units
 
Noncontrolling Interest
 
Total Equity
Balance at December 31, 2018
 
$
23,718

 
$
169,472

 
$
193,190

Quarterly distributions to unitholders
($0.5050 per unit)
 
(28,313
)
 

 
(28,313
)
Distributions to TVPC members
 

 
(6,500
)
 
(6,500
)
Net income attributable to the partners
 
17,357

 
4,719

 
22,076

Unit-based compensation expense
 
964

 

 
964

Other
 
259

 

 
259

Balance at March 31, 2019
 
$
13,985

 
$
167,691

 
$
181,676

Quarterly distributions to unitholders
($0.5100 per unit)
 
(32,079
)
 

 
(32,079
)
Distributions to TVPC members
 

 
(2,000
)
 
(2,000
)
Net income attributable to the partners
 
22,166

 
3,162

 
25,328

Acquisition of TVPC noncontrolling interest
 
(31,147
)
 
(168,853
)
 
(200,000
)
Unit-based compensation expense
 
3,387

 

 
3,387

Issuance of common units, net of expenses
 
132,483

 

 
132,483

Other
 
(1,801
)
 

 
(1,801
)
Balance at June 30, 2019
 
$
106,994

 
$

 
$
106,994



20

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


 
 
Net Investment
 
Common Units
 
IDR Holder
 
Noncontrolling Interest
 
Total Equity
Balance at December 31, 2017
 
$
10,665

 
$
(17,544
)
 
$
2,736

 
$
171,903

 
$
167,760

Net loss attributable to the Development Assets
 
(1,279
)
 

 

 

 
(1,279
)
Contributions to the Development Assets
 
1,131

 

 

 

 
1,131

Quarterly distributions to unitholders (including IDRs)
($0.4850 per unit)
 

 
(20,618
)
 
(2,736
)
 

 
(23,354
)
Distributions to TVPC members
 

 

 

 
(5,000
)
 
(5,000
)
Net income attributable to the partners
 

 
18,276

 
2,959

 
4,022

 
25,257

Unit-based compensation expense
 

 
834

 

 

 
834

Other
 

 
(11
)
 

 

 
(11
)
Balance at March 31, 2018
 
$
10,517

 
$
(19,063
)
 
$
2,959

 
$
170,925

 
$
165,338

Net loss attributable to the Development Assets
 
(1,084
)
 

 

 

 
(1,084
)
Contributions to the Development Assets
 
3,062

 

 

 

 
3,062

Quarterly distributions to unitholders (including IDRs)
($0.4900 per unit)
 

 
(20,942
)
 
(2,955
)
 

 
(23,897
)
Distributions to TVPC members
 

 

 

 
(6,250
)
 
(6,250
)
Net income attributable to the partners
 

 
16,681

 
3,411

 
4,363

 
24,455

Unit-based compensation expense
 

 
2,663

 

 

 
2,663

Other
 

 
(1,048
)
 

 

 
(1,048
)
Balance at June 30, 2018
 
$
12,495

 
$
(21,709
)
 
$
3,415

 
$
169,038

 
$
163,239


Cash Distributions

PBFX’s partnership agreement sets forth the calculation to be used to determine the amount and priority of cash distributions that the unitholders and general partner will receive.

During the six months ended June 30, 2019 , PBFX made distribution payments as follows:
Related Earnings Period:
Q4 2018

Q1 2019

Distribution date
March 14, 2019

May 30, 2019

Record date
March 1, 2019

May 15, 2019

Per unit
$
0.5050

$
0.5100

To public common unitholders
$
12,825

$
16,398

To PBF LLC
15,126

15,276

Total distribution
$
27,951

$
31,674










21

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


The allocation of total quarterly distributions to general and limited partners for the three and six months ended  June 30, 2019 and 2018 is shown in the table below. The Partnership’s distributions are declared subsequent to quarter end (distributions of $0.5150 and $0.4950 per unit declared for the three months ended June 30, 2019 and 2018, respectively, and $0.5100 and $0.4900 per unit declared for the three months ended March 31, 2019 and 2018, respectively); therefore, the table represents total estimated distributions applicable to the period in which the distributions are earned:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2019
 
2018
 
2019
 
2018
IDR - PBF LLC (1)
 
$

 
$
3,415

 
$

 
$
6,370

Limited partners’ distributions:
 
 
 
 
 
 
 
 
Common
 
32,398

 
22,800

 
64,481

 
43,770

Total distributions
 
32,398

 
26,215

 
64,481

 
50,140

Total cash distributions (2)
 
$
31,986

 
$
25,866

 
$
63,660

 
$
49,419

(1) Subsequent to the closing of the IDR Restructuring, the IDRs were canceled, no distributions were made to PBF LLC with respect to the IDRs and the newly issued PBFX common units are entitled to normal distributions.
(2) Excludes phantom unit distributions, which are accrued and paid upon vesting.  

8. NET INCOME PER UNIT

Earnings in excess of distributions are allocated to the limited partners based on their respective ownership interests. Payments made to PBFX’s unitholders are determined in relation to actual distributions declared and are not based on the net income (loss) allocations used in the calculation of net income (loss) per unit.

Diluted net income per unit includes the effect of potentially dilutive units of PBFX’s common units that consist of unvested phantom units. There were 1,000 and 340,198 anti-dilutive phantom units for the three and six months ended June 30, 2019 , respectively, compared to 146,065 and 429,503 anti-dilutive phantom units for the three and six months ended June 30, 2018 , respectively.

In addition to the common units, PBFX has also identified the IDRs (prior to the IDR Restructuring) as participating securities and used the two-class method when calculating the net income per unit applicable to limited partners that is based on the weighted-average number of common units outstanding during the prior period.

When calculating basic earnings per unit under the two-class method for a master limited partnership, net income for the current reporting period is reduced by the amount of available cash that has been or will be distributed to the limited partners and IDR holder (prior to the IDR Restructuring) for that reporting period.

The following table shows the calculation of net income per limited partner unit:
 
 
Three Months Ended
June 30, 2019
 
Six Months Ended
June 30, 2019
Net income attributable to the partners:
 
 
 
 
Distributions declared
 
$
32,398

 
$
64,481

Earnings less distributions
 
(10,232
)
 
(24,958
)
Net income attributable to the partners
 
$
22,166

 
$
39,523

 
 
 
 
 
Weighted-average units outstanding - basic
 
60,279,287

 
54,748,755

Weighted-average units outstanding - diluted
 
60,364,347

 
54,776,257

 
 
 
 
 
Net income per limited partner unit - basic
 
$
0.37

 
$
0.72

Net income per limited partner unit - diluted
 
0.37

 
0.72



22

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


 
 
Three Months Ended June 30, 2018
 
 
Limited Partner Common Units
 
IDRs - PBF LLC
 
Total
Net income attributable to the partners:
 
 
 
 
 
 
Distributions declared
 
$
22,800

 
$
3,415

 
$
26,215

Earnings less distributions
 
(6,123
)
 

 
(6,123
)
Net income attributable to the partners
 
$
16,677

 
$
3,415

 
$
20,092

 
 
 
 
 
 
 
Weighted-average units outstanding - basic
 
42,231,119

 
 
 
 
Weighted-average units outstanding - diluted
 
42,294,616

 
 
 
 
 
 
 
 
 
 
 
Net income per limited partner unit - basic
 
$
0.39

 
 
 
 
Net income per limited partner unit - diluted
 
0.39

 
 
 
 
 
 
Six Months Ended June 30, 2018
 
 
Limited Partner Common Units
 
IDRs - PBF LLC
 
Total
Net income attributable to the partners:
 
 
 
 
 
 
Distributions declared
 
$
43,770

 
$
6,370

 
$
50,140

Earnings less distributions
 
(8,813
)
 

 
(8,813
)
Net income attributable to the partners
 
$
34,957

 
$
6,370

 
$
41,327

 
 
 
 
 
 
 
Weighted-average units outstanding - basic
 
42,176,202

 
 
 
 
Weighted-average units outstanding - diluted
 
42,190,136

 
 
 
 
 
 
 
 
 
 
 
Net income per limited partner unit - basic
 
$
0.83

 
 
 
 
Net income per limited partner unit - diluted
 
0.83

 
 
 
 

9. COMMITMENTS AND CONTINGENCIES

Environmental Matters

PBFX’s assets, along with PBF Energy’s refineries, 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 composition of fuels. Compliance with existing and anticipated laws and regulations can increase the overall cost of operating the Partnership’s assets, including remediation, operating costs and capital costs to construct, maintain and upgrade equipment and facilities.

PBFX recorded a total liability related to environmental remediation costs at certain of its assets of $2,493 and $2,587 for the period ended June 30, 2019 and December 31, 2018, respectively, related to existing environmental liabilities.

During the first quarter of 2019, the Partnership notified certain agencies of an oil sheen in the Schuylkill River potentially sourcing from one of its facilities. Clean up was immediately initiated, and oil is no longer being released into the waterway. The source of the oil is currently under investigation. Although full clean-up and remediation activities have not been completed, such incremental costs are not expected to be material to the Partnership.



23

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


Contingent Consideration

In connection with the East Coast Storage Assets Acquisition, the purchase agreement between the Partnership and Crown Point included the Contingent Consideration. Pursuant to the agreement, the Partnership and Crown Point will share equally in the future operating profits of the restarted assets, as defined in the agreement, over a contractual term of up to three years starting in 2019. The Contingent Consideration was $22,534 as of June 30, 2019 ( $21,100 as of December 31, 2018) representing the present value of expected future payments discounted at a blended rate of 8.79% and is recorded in “Other long-term liabilities” within the Partnership’s condensed consolidated balance sheets. At June 30, 2019 , the estimated undiscounted liability totaled $27,978 , based on the Partnership’s anticipated total annual earn-out payments.

10. RELATED PARTY TRANSACTIONS

Agreements with PBF Energy Entities

Commercial Agreements

PBFX currently derives a majority of its revenue from long-term, fee-based agreements with PBF Holding, supported by MVCs, as applicable, and contractual fee escalations for inflation adjustments and certain increases in operating costs. PBFX believes the terms and conditions under these agreements, as well as the Omnibus Agreement and the Services Agreement (each as defined below), each with PBF Holding, 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 2018 Form 10-K for a more complete description of PBFX’s commercial agreements with PBF Holding, including those identified as leases, which were entered into prior to 2019 . The following table reflects activity during 2019 related to commercial agreements between PBFX and PBF Holding:
Agreements
Initiation Date
Initial Term
Renewals (a)
MVC
Force Majeure
Transportation and Terminaling
 
 
 
 
 
Amended and Restated Rail Agreements (b)
5/8/2014
7 years, 8 months
N/A
125,000 bpd
PBFX or PBF Holding can declare
Delaware Pipeline Services Agreement- Magellan Connection
11/1/2016
2 years, 5 months
See note
 (c)
See note
(c)
Delaware City Terminaling Services Agreement (d)
1/1/2022
4 years
2 x 5
95,000 bpd
Amended and Restated Torrance Valley Pipeline Transportation Services Agreement- South Pipeline
8/31/2016
10 years
2 x 5
75,000 bpd (e)
Storage
 
 
 
 
 
East Coast Storage Assets Terminal Storage Agreement
1/1/2019
8 years
Evergreen
2,953,725 barrels (f)
PBFX or PBF Holding can declare
___________________
(a)
PBF Holding has the option to extend the agreements for up to two additional five -year terms, as applicable.
(b)
In 2019, the Partnership amended (effective as of January 1, 2019) the existing Amended and Restated Rail Agreements between Delaware City Terminaling Company LLC (“DCTC”) and PBF Holding for the inclusion of services through certain rail infrastructure at the East Coast Storage Assets.
(c)
In connection with the inclusion of an additional destination at the Magellan connection under the Delaware Pipeline Services Agreement, Delaware Pipeline Company LLC (“DPC”) and PBF Holding agreed to a two-year, five-month MVC (the “Magellan MVC”) under the Delaware Pipeline Services Agreement.


24

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


The Magellan MVC expired on March 31, 2019, subsequent to which, the Partnership has been billing actual throughput on the Magellan connection.
(d)
The Delaware City Terminaling Services Agreement between DCTC and PBF Holding will commence in 2022 subsequent to the expiration of the Amended and Restated Rail Agreements and includes additional services to be provided by PBFX as operator of other rail facilities owned by PBF Holding’s subsidiaries.
(e)
In connection with the TVPC Acquisition on May 31, 2019, the Torrance Valley Pipeline Transportation Services Agreement- South Pipeline was amended and restated to increase the MVC from 70,000 bpd to 75,000 bpd.
(f)
Reflects the overall shell 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.

Other Agreements

In addition to the commercial agreements described above, PBFX has entered into an omnibus agreement with PBF GP, PBF LLC and PBF Holding, which has been amended and restated in connection with certain of the Acquisitions from PBF (as amended, the “Omnibus Agreement”). 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.

Additionally, PBFX has entered into an operation and management services and secondment agreement with PBF Holding and certain of its subsidiaries (as amended, the “Services Agreement”), pursuant to which PBF Holding and its subsidiaries provide PBFX with the personnel necessary for the Partnership to perform its obligations under its commercial agreements. PBFX reimburses PBF Holding 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. The Services Agreement will terminate upon the termination of the Omnibus Agreement, provided that the Partnership may terminate any service upon 30-days’ notice.

See the 2018 Form 10-K for a more complete description of the Omnibus Agreement and the Services Agreement.

Summary of Transactions

A summary of revenue and expense transactions with the Partnership’s affiliates, including expenses directly charged and allocated to the Partnership, is as follows:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2019
 
2018
 
2019
 
2018
Revenue
 
$
74,656

 
$
63,785

 
$
145,988

 
$
124,649

Operating and maintenance expenses
 
2,171

 
1,674

 
4,276

 
3,348

General and administrative expenses
 
1,752

 
1,737

 
3,514

 
3,437


11. SEGMENT INFORMATION

The Partnership’s operations are comprised of operating segments, which are strategic business units that offer different services in various geographical locations. PBFX has evaluated the performance of each operating segment based on its respective operating income. The operating segments adhere to the accounting polices used


25

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


for the consolidated financial statements, as described in Note 2 “Summary of Accounting Policies” of the Notes to Consolidated Financial Statements in the 2018 Form 10-K.

The Partnership’s operating segments are organized into two reportable segments: (i) Transportation and Terminaling and (ii) Storage. Operations that are not included in either the Transportation and Terminaling or the Storage segments are included in Corporate.

The Partnership’s Transportation and Terminaling segment consists of operating segments that include product terminals, pipelines, crude unloading facilities and other facilities capable of transporting and handling crude oil, refined products and natural gas. The Partnership’s Storage segment consists of operating segments that include storage facilities capable of handling crude oil, refined products and intermediates.

Revenue is generated from third-party transactions as well as commercial agreements entered into with PBF Holding under which the Partnership receives fees for transportation, terminaling and storage of crude oil, refined products and natural gas. The commercial agreements with PBF Holding are discussed in Note 10 “Related Party Transactions” of the Notes to Condensed Consolidated Financial Statements. The Partnership does not have any foreign operations. Certain general and administrative expenses and interest and financing costs are included in Corporate as they are not directly attributable to a specific reporting segment. Identifiable assets are those used by the operating segments, whereas assets included in Corporate are principally cash, deposits and other assets that are not associated with operations specific to a reporting segment.
 
 
Three Months Ended June 30, 2019
 
 
Transportation and Terminaling
 
Storage
 
Corporate
 
Consolidated Total
Total revenue
 
$
69,656

 
$
13,094

 
$

 
$
82,750

Depreciation and amortization
 
6,879

 
1,975

 

 
8,854

Income (loss) from operations
 
40,529

 
4,814

 
(7,580
)
 
37,763

Interest expense, net, amortization of loan fees and debt premium and accretion on discounted liabilities
 

 

 
12,435

 
12,435

Capital expenditures
 
1,689

 
2,243

 

 
3,932

 
 
Three Months Ended June 30, 2018
 
 
Transportation and Terminaling
 
Storage
 
Corporate
 
Consolidated Total
Total revenue
 
$
61,133

 
$
6,966

 
$

 
$
68,099

Depreciation and amortization
 
6,166

 
925

 

 
7,091

Income (loss) from operations
 
36,234

 
4,050

 
(6,488
)
 
33,796

Interest expense, net and amortization of loan fees and debt premium
 

 

 
10,425

 
10,425

Capital expenditures, including the Knoxville Terminals Purchase
 
61,716

 
2

 

 
61,718



26

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


 
 
Six Months Ended June 30, 2019
 
 
Transportation and Terminaling
 
Storage
 
Corporate
 
Consolidated Total
Total revenue
 
$
135,615

 
$
25,980

 
$

 
$
161,595

Depreciation and amortization
 
13,780

 
3,795

 

 
17,575

Income (loss) from operations
 
77,080

 
8,471

 
(13,590
)
 
71,961

Interest expense, net, amortization of loan fees and debt premium and accretion on discounted liabilities
 

 

 
24,557

 
24,557

Capital expenditures
 
12,233

 
2,919

 

 
15,152

 
 
Six Months Ended June 30, 2018
 
 
Transportation and Terminaling
 
Storage
 
Corporate
 
Consolidated Total
Total revenue
 
$
118,804

 
$
14,035

 
$

 
$
132,839

Depreciation and amortization
 
11,884

 
1,850

 

 
13,734

Income (loss) from operations
 
70,460

 
8,041

 
(10,779
)
 
67,722

Interest expense, net and amortization of loan fees and debt premium
 

 

 
20,373

 
20,373

Capital expenditures, including the Knoxville Terminals Purchase
 
65,583

 
88

 

 
65,671

 
 
Balance at June 30, 2019
 
 
Transportation and Terminaling
 
Storage
 
Corporate
 
Consolidated Total
Total assets
 
$
730,250

 
$
220,030

 
$
9,293

 
$
959,573

 
 
Balance at December 31, 2018
 
 
Transportation and Terminaling
 
Storage
 
Corporate
 
Consolidated Total
Total assets
 
$
731,505

 
$
219,326

 
$
5,522

 
$
956,353


12. SUBSEQUENT EVENTS

Cash Distribution

On August 1, 2019, PBF GP’s board of directors announced a cash distribution, based on the results of the second quarter of 2019, of $0.5150 per unit. The distribution is payable on August 30, 2019 to PBFX unitholders of record at the close of business on August 15, 2019.





27

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF LOGISTICS

Delaware City Logistics Company LLC, DPC, DCTC, Toledo Terminaling Company LLC, PLPT, PBFX Op Co, TVPC, Paulsboro Natural Gas Pipeline Company LLC, TRLC, CLC, PTC, DSLC and CPI serve as guarantors of the obligations under the 2023 Notes. These guarantees are full and unconditional and joint and several. For purposes of the following footnote, the Partnership is referred to as “Issuer.” The indenture dated May 12, 2015, as supplemented, among the Partnership, PBF Logistics Finance Corporation (“PBF Logistics Finance”), the guarantors party thereto and Deutsche Bank Trust Company Americas, as Trustee, governs subsidiaries designated as “Guarantor Subsidiaries.” In addition, PBF LLC provides a limited guarantee of collection of the principal amount of the 2023 Notes but is not otherwise subject to the covenants of the indenture. Refer to PBF LLC’s condensed consolidated financial statements, which are included in its Quarterly Report on Form 10-Q for the period ended June 30, 2019 .

The 2023 Notes were co-issued by PBF Logistics Finance. For purposes of the following footnote, PBF Logistics 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, 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.




28

PBF LOGISTICS LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT BARREL, UNIT AND PER UNIT DATA)


13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF PBF LOGISTICS
CONDENSED CONSOLIDATING BALANCE SHEET
 
June 30, 2019
 
Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Combining and Consolidating Adjustments
 
Total
ASSETS
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
6,836

 
$
13,164

 
$

 
$

 
$
20,000

Accounts receivable - affiliates
580

 
46,699

 

 

 
47,279

Accounts receivable
365

 
4,764

 

 

 
5,129

Prepaids and other current assets
1,512

 
4,371

 

 

 
5,883

Due from related parties
180,784

 
654,745

 

 
(835,529
)
 

Total current assets
190,077

 
723,743

 

 
(835,529
)
 
78,291

Property, plant and equipment, net

 
855,958

 

 

 
855,958

Goodwill

 
6,332

 

 

 
6,332

Other non-current assets

 
18,992

 

 

 
18,992

Investment in subsidiaries
1,382,665

 

 

 
(1,382,665
)
 

Total assets
$
1,572,742

 
$
1,605,025

 
$

 
$
(2,218,194
)
 
$
959,573

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable - affiliates
$
1,085

 
$
4,384

 
$

 
$

 
$
5,469

Accounts payable
1,121

 
4,301

 

 

 
5,422

Accrued liabilities
39,578

 
5,064

 

 

 
44,642

Deferred revenue

 
2,875

 

 

 
2,875

Due to related parties
654,745

 
180,784

 

 
(835,529
)
 

Total current liabilities
696,529

 
197,408

 

 
(835,529
)
 
58,408

Long-term debt
769,219