PBF ENERGY INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

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 Energy and PBF LLC included in the Annual Report on Form 10-K for the
year ended December 31, 2020 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."
PBF Energy is the sole managing member of, and owner of an equity interest
representing approximately 99.2% of the outstanding economic interests in PBF
LLC as of September 30, 2021. PBF LLC is a holding company for the companies
that directly and indirectly own and operate our business. PBF Holding is a
wholly-owned subsidiary of PBF LLC and PBF Finance is a wholly-owned subsidiary
of PBF Holding. As of September 30, 2021, PBF LLC also holds a 47.9% limited
partner interest and a non-economic general partner interest in PBFX, a
publicly-traded MLP.
Unless the context indicates otherwise, the terms "we," "us," and "our" refer to
PBF Energy and its consolidated subsidiaries, including PBF LLC, PBF Holding and
its subsidiaries and PBFX and its subsidiaries. Discussions on areas that either
apply only to PBF Energy or PBF LLC are clearly noted in such sections.

                                       55
--------------------------------------------------------------------------------

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, 2021, we own and operate six domestic oil refineries and related
assets. Based on the current configuration our refineries have a combined
processing capacity, known as throughput, of approximately 1,000,000 barrels per
day ("bpd"), and a weighted-average Nelson Complexity Index of 13.2 based on
current operating conditions. The complexity and throughput capacity of our
refineries are subject to change dependent upon configuration changes we make to
respond to market conditions, as well as a result of investments made to improve
our facilities and maintain compliance with environmental and governmental
regulations. We operate in two reportable business segments: Refining and
Logistics. Our six oil refineries are all engaged in the refining of crude oil
and other feedstocks into petroleum products, and are aggregated into the
Refining segment. PBFX operates certain logistics assets such as crude oil and
refined petroleum products terminals, pipelines, and storage facilities, which
are aggregated into the Logistics segment.
Our six refineries are located in Delaware City, Delaware, Paulsboro, New
Jersey, Toledo, Ohio, Chalmette, Louisiana, Torrance, California and Martinez,
California. In 2020, we reconfigured our Delaware City and Paulsboro refineries
(the "East Coast Refining Reconfiguration"), temporarily idling certain of our
major processing units at the Paulsboro refinery, in order to operate the two
refineries as one functional unit that we refer to as the "East Coast Refining
System". Each refinery is briefly described in the table below:
                                                                        Throughput Capacity (in
Refinery            Region                Nelson Complexity Index (1)   bpd) (1)                 PADD       Crude Processed (2)   Source (2)
                                                                                                            light sweet through
Delaware City       East Coast            13.6                          180,000                  1          heavy sour            water, rail
                                                                                                            light sweet through
Paulsboro           East Coast            10.4(3)                       105,000(3)               1          heavy sour            water
Toledo              Mid-Continent         11.0                          180,000                  2          light sweet           pipeline, truck, rail
                                                                                                            light sweet through
Chalmette           Gulf Coast            13.0                          185,000                  3          heavy sour            water, pipeline
Torrance            West Coast            13.8                          166,000                  5          medium and heavy      pipeline, water, truck
Martinez            West Coast            16.1                          157,000                  5          medium and heavy      pipeline and water


________
(1) Reflects operating conditions at each refinery as of the date of this
filing. Changes in complexity and throughput capacity reflect the result of
current market conditions such as our East Coast Refining Reconfiguration, in
addition to investments made to improve our facilities and maintain compliance
with environmental and governmental regulations. Configurations at each of our
refineries are evaluated and updated accordingly.
(2) Reflects the typical crude and feedstocks and related sources utilized under
normal operating conditions and prevailing market environments.
(3) Under normal operating conditions and prevailing market environments, our
Nelson Complexity Index and throughput capacity for the Paulsboro refinery would
be 13.1 and 180,000, respectively. As a result of the East Coast Refining
Reconfiguration, our Nelson Complexity Index and throughput capacity were
reduced.
                                       56
--------------------------------------------------------------------------------

As of September 30, 2021, PBF Energy owned 120,266,740 PBF LLC Series C Units
and our current and former executive officers and directors and certain
employees and others held 994,192 PBF LLC Series A Units (we refer to all of the
holders of the PBF LLC Series A Units as "the members of PBF LLC other than PBF
Energy"). As a result, the holders of our issued and outstanding shares of our
PBF Energy Class A common stock have approximately 99.2% of the voting power in
us, and the members of PBF LLC other than PBF Energy through their holdings of
Class B common stock have approximately 0.8% of the voting power in us (99.2%
and 0.8% as of December 31, 2020, respectively).
                                       57
--------------------------------------------------------------------------------

Business Developments
Recent significant business developments affecting us are discussed below.
COVID-19
The outbreak of the COVID-19 pandemic negatively impacted worldwide economic and
commercial activity and financial markets starting in the first quarter of 2020.
The COVID-19 pandemic, the Delta variant and other variants thereof, and the
related governmental and consumer responses resulted in significant business and
operational disruptions, including business and school closures, supply chain
disruptions, travel restrictions, stay-at-home orders and limitations on the
availability of workforces and has resulted in significantly lower global demand
for refined petroleum and petrochemical products. We have seen the demand for
these products starting to rebound in 2021 as a result of the lifting or easing
of governmental restrictions in response to decreasing COVID-19 infection rates
and the distribution of COVID-19 vaccines. Despite these signs of improvements,
the resulting economic consequences of the COVID-19 pandemic remains uncertain
and will depend on the ongoing severity, location and duration of the outbreak,
the effectiveness of the vaccine programs and other actions undertaken by
national, regional and local governments and health officials to contain the
virus or treat its effects, and how quickly and to what extent economic
conditions improve and normal business and operating conditions resume.
We are actively responding to the impacts from these matters on our business.
Starting in late March 2020, we reduced the amount of crude oil processed at our
refineries in response to the decreased demand for our products and we
temporarily idled various units at certain of our refineries to optimize our
production in light of prevailing market conditions. We have been operating our
refineries at reduced rates, while constantly monitoring and adjusting our
production to correlate to increases in product demand. Throughput across our
refineries was higher in the three and nine months ended September 2021 in
comparison to the three and nine months ended September 2020, reflecting gradual
improvement in market conditions. We expect near-term throughput to be in the
880,000 to 940,000 barrel per day range for our refining system. Despite the
measures we have taken, we have been, and likely will continue to be, adversely
impacted by the COVID-19 pandemic for the foreseeable future. We are unable to
predict the ultimate outcome of the economic impact of the COVID-19 pandemic and
can provide no assurance that measures taken to mitigate the impact of the
COVID-19 pandemic will be effective.
We continue to adjust our operational plans to the evolving market conditions
and continue to monitor and maintain lower operating expenses through
significant reductions in discretionary activities and third-party services. We
successfully reconfigured our East Coast Refining System to maintain the most
profitable elements of two refineries while reducing costs and improving our
competitive position. Our overall market outlook for the fourth quarter of 2021
remains constructive, with continued gradual improvement in demand, and our
full-year capital expenditures are expected to be within a range of
approximately $400.0 million to $450.0 million. Should market conditions change
from our current expectations, we expect that we will review our capital
requirements and adjust as needed.
Adoption of Rule 6-5
On July 21, 2021, the board of Bay Area Air Quality Management District
("BAAQMD") voted to adopt Proposed Amended Rule ("PAR") 6-5 requiring compliance
with more stringent standards for particulate emissions from Fluid Catalytic
Cracking ("FCC") units at refineries in the Bay Area by 2026. The regulation,
which impacts our Martinez refinery, does not require that any specific
technology be utilized to meet the new standards. We have a previously approved
capital project that will significantly lower the particulate emissions from
Martinez's FCC and we have identified and will be evaluating potential process
changes that could potentially reduce emissions further in advance of the
compliance date. If these measures prove ineffective, the costs incurred by us
to achieve the new emissions standards at our Martinez refinery within the
required timeframe may be significant, and there can be no assurance that the
measures we implement will achieve the required emissions reductions.
                                       58
--------------------------------------------------------------------------------




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.
COVID-19 and Market Developments
The impact of the unprecedented global health and economic crisis sparked by the
COVID-19 pandemic was amplified late in the quarter ended March 31, 2020 due to
movements made by the world's largest oil producers to increase market share.
This created simultaneous shocks in oil supply and demand resulting in an
economic challenge to our industry which has not occurred since our formation.
This combination resulted in significant demand reduction for our refined
products and atypical volatility in oil commodity prices. In 2021, as a result
of the lifting or easing of restrictions by many governmental authorities in
response to decreasing COVID-19 infection rates and the distribution of COVID-19
vaccines, the demand for refined petroleum products has started to recover,
consequently improving our refining margins in comparison to the prior year.
While our results for the three and nine months ended September 30, 2021
continue to be impacted by lower demand for refined products, we have
experienced gradual improvements when compared to the same periods in 2020 and
favorable impacts on our revenues, cost of products sold, operating income and
liquidity. Although we currently continue to operate our refineries at reduced
rates, throughput rates across our refining system have increased in the current
year to correlate with the gradual increases in demand.
East Coast Refining Reconfiguration
On December 31, 2020, we completed the East Coast Refining Reconfiguration. As
part of the reconfiguration process, we temporarily idled certain of our major
processing units at the Paulsboro refinery, resulting in lower overall
throughput and inventory levels in addition to decreases in capital and
operating costs. Based on this reconfiguration, our East Coast throughput
capacity is approximately 285,000 barrels per day.
Debt and Credit Facilities
Senior Notes
During the three months ended September 30, 2021, we made a number of open
market repurchases of our 2028 Senior Notes (as defined below) and our 7.25%
senior unsecured notes due 2025 (the "2025 Senior Notes") that resulted in the
extinguishment of $117.7 million in principal of the 2028 Senior Notes and
$35.0 million in principal of the 2025 Senior Notes. Total cash consideration
paid to repurchase the principal amount outstanding of the 2028 Senior Notes and
the 2025 Senior Notes, excluding accrued interest, totaled $90.9 million and we
recognized a $60.3 million gain on the extinguishment of debt during the three
and nine months ended September 30, 2021.
On May 13, 2020, we issued $1.0 billion in aggregate principal amount of 9.25%
senior secured notes due 2025 (the "initial 2025 Senior Secured Notes"). The net
proceeds from this offering were approximately $982.9 million after deducting
the initial purchasers' discount and offering expenses. We used the net proceeds
for general corporate purposes.
On December 21, 2020, we issued an additional $250.0 million in aggregate
principal amount of 9.25% senior secured notes due 2025, in a tack-on offering,
(together with the initial 2025 Senior Secured Notes, the "2025 Senior Secured
Notes"). The net proceeds from this offering were approximately $245.7 million
after deducting the initial purchasers' discount and offering expenses. We used
the net proceeds for general corporate purposes.
                                       59
--------------------------------------------------------------------------------

On January 24, 2020, we issued $1.0 billion in aggregate principal amount of
6.00% senior unsecured notes due 2028 (the "2028 Senior Notes"). The net
proceeds from this offering were approximately $987.0 million after deducting
the initial purchasers' discount and offering expenses. We used $517.5 million
of the proceeds to fully redeem our 7.00% senior notes due 2023 (the "2023
Senior Notes") and the balance to fund a portion of the cash consideration for
the Martinez Acquisition (as defined below).
On February 14, 2020, we exercised our rights under the indenture governing the
2023 Senior Notes to redeem all of the outstanding 2023 Senior Notes at a price
of 103.5% of the aggregate principal amount thereof plus accrued and unpaid
interest. The aggregate redemption price for all 2023 Senior Notes approximated
$517.5 million plus accrued and unpaid interest. The difference between the
carrying value of the 2023 Senior Notes on the date they were redeemed and the
amount for which they were redeemed was $22.2 million and was classified as Loss
on extinguishment of debt in the Condensed Consolidated Statement of Operations
as of September 30, 2020.
Revolving Credit Facility
During the nine months ended September 30, 2020, we used advances under PBF
Holding's asset-based revolving credit agreement (the "Revolving Credit
Facility") to fund a portion of the Martinez Acquisition (as defined below) and
for other general corporate purposes. The outstanding borrowings under the
Revolving Credit Facility as of both September 30, 2021 and December 31, 2020
were $900.0 million.
PBFX Revolving Credit Facility
During the nine months ended September 30, 2021, PBFX made net repayments of
$75.0 million on the PBFX five-year, $500.0 million amended and restated
revolving credit facility (the "PBFX Revolving Credit Facility"), resulting in
outstanding borrowings as of September 30, 2021 of $125.0 million. There was
$200.0 million of outstanding borrowings under the PBFX Revolving Credit
Facility as of December 31, 2020.
Catalyst Financing Obligations
During the three months ended September 30, 2021, we settled one of our precious
metal financing arrangements, which represented a reduction in debt of
approximately $18.5 million.
On September 25, 2020, we closed on agreements to sell a portion of our precious
metals catalyst to certain major commercial banks for approximately
$51.9 million and subsequently leased the catalyst back. The precious metals
financing arrangements cover a portion of the catalyst used in our East Coast
Refining System, and the Martinez and Toledo refineries. The volumes of the
precious metal catalyst and the interest rates are fixed over the term of each
financing arrangement. We are obligated to repurchase the precious metals
catalyst at fair market value upon expiration of these leases.
Martinez Acquisition
We acquired the Martinez refinery and related logistics assets from Equilon
Enterprises LLC d/b/a Shell Oil Products US ("Shell") on February 1, 2020 (the
"Martinez Acquisition") for an aggregate purchase price of $1,253.4 million,
including final working capital of $216.1 million and the obligation to make
certain post-closing earn-out payments to Shell based on certain earnings
thresholds of the Martinez refinery for a period of up to four years (the
"Martinez Contingent Consideration"). The transaction was financed through a
combination of cash on hand, including proceeds from the 2028 Senior Notes, and
borrowings under the Revolving Credit Facility.
                                       60
--------------------------------------------------------------------------------

The Martinez refinery is located on an 860-acre site in the City of Martinez, 30
miles northeast of San Francisco, California. The refinery is a high-conversion
157,000 bpd, dual-coking facility with a Nelson Complexity Index of 16.1, making
it one of the most complex refineries in the United States. The facility is
strategically positioned in Northern California and provides for operating and
commercial synergies with the Torrance refinery located in Southern California.
In addition to refining assets, the Martinez Acquisition includes a number of
high-quality onsite logistics assets including a deep-water marine facility,
product distribution terminals and refinery crude and product storage facilities
with approximately 8.8 million barrels of shell capacity.
Tax Receivable Agreement
As of September 30, 2021 and December 31, 2020, there was zero liability
recognized related to the Tax Receivable Agreement. As of September 30, 2020,
PBF Energy recognized a liability for the Tax Receivable Agreement of
$132.9 million ($373.5 million as of December 31, 2019) reflecting the estimate
of the undiscounted amounts that the Company expected to pay under the
agreement, net of the impact of a deferred tax asset valuation allowance
recognized in accordance with FASB Accounting Standards Codification ("ASC")
740, Income Taxes ("ASC 740"). As future taxable income is recognized, increases
in our Tax Receivable Agreement liability may be necessary in conjunction with
the revaluation of deferred tax assets.
Severance Costs
Following the onset of the COVID-19 pandemic, we implemented a number of cost
reduction initiatives to strengthen our financial flexibility and rationalize
overhead expenses, including workforce reduction. During the second quarter of
2020, we reduced headcount across our refineries, which resulted in
approximately $12.9 million of severance related costs included in General and
administrative expenses.
Sale of Hydrogen Plants
On April 17, 2020, we closed on the sale of five hydrogen plants to Air Products
and Chemicals, Inc. ("Air Products") in a sale-leaseback transaction for gross
cash proceeds of $530.0 million and recognized a gain of $471.1 million. In
connection with the sale, we entered into a transition services agreement, which
was followed by the execution of long-term supply agreements in August 2020,
through which Air Products will exclusively supply hydrogen, steam, carbon
dioxide and other products to the Martinez, Torrance and Delaware City
refineries for a term of fifteen years.

                                       61
--------------------------------------------------------------------------------

Results of Operations
The tables below reflect our consolidated financial and operating highlights for
the three and nine months ended September 30, 2021 and 2020 (amounts in
millions, except per share data). Differences between the results of operations
of PBF Energy and PBF LLC primarily pertain to income taxes, interest expense
and noncontrolling interest as shown below. Earnings per share information
applies only to the financial results of PBF Energy. We operate in two
reportable business segments: Refining and Logistics. Our oil refineries,
excluding the assets owned by PBFX, are all engaged in the refining of crude oil
and other feedstocks into petroleum products, and are aggregated into the
Refining segment. PBFX is a publicly-traded MLP that operates certain logistics
assets such as crude oil and refined petroleum products terminals, pipelines and
storage facilities. PBFX's operations are aggregated into the Logistics segment.
We do not separately discuss our results by individual segment as, apart from
PBFX's third-party acquisitions, our Logistics segment does not have significant
third-party revenues and a significant portion of its operating results are
eliminated in consolidation.
                                       62
--------------------------------------------------------------------------------

PBF Energy                                     Three Months Ended September 30,           Nine Months Ended September 30,
                                                   2021                2020                  2021                   2020
Revenues                                       $  7,186.7          $ 3,667.5          $       19,009.4          $ 11,460.8

Cost and expenses:
Cost of products and other                        6,374.7            3,378.6                  16,666.4            11,095.0
Operating expenses (excluding depreciation and
amortization expense as reflected below)            530.5              471.9                   1,495.6             1,445.7
Depreciation and amortization expense               112.8              130.3                     338.5               369.3
Cost of sales                                     7,018.0            3,980.8                  18,500.5            12,910.0
General and administrative expenses (excluding
depreciation and amortization expense as
reflected below)                                     64.1               46.6                     166.9               187.0
Depreciation and amortization expense                 3.4                2.7                      10.1                 8.4
Change in fair value of contingent
consideration                                         0.1              (28.6)                     26.2               (93.5)
Impairment expense                                      -                7.0                         -                 7.0
Loss (gain) on sale of assets                         0.2                1.7                      (0.4)             (469.4)
Total cost and expenses                           7,085.8            4,010.2                  18,703.3            12,549.5

Income (loss) from operations                       100.9             (342.7)                    306.1            (1,088.7)
Other income (expense):
Interest expense, net                               (82.0)             (70.4)                   (243.1)             (185.1)
Change in Tax Receivable Agreement liability            -              252.2                         -               240.6
Change in fair value of catalyst obligations         17.8               (2.4)                     13.6                 4.2
Gain (loss) on extinguishment of debt                60.3                  -                      60.3               (22.2)
Other non-service components of net periodic
benefit cost                                          2.0                1.1                       5.9                 3.2
Income (loss) before income taxes                    99.0             (162.2)                    142.8            (1,048.0)
Income tax expense (benefit)                         20.3              235.6                      16.4                (0.7)
Net income (loss)                                    78.7             (397.8)                    126.4            (1,047.3)
Less: net income attributable to
noncontrolling interests                             19.6               19.4                      60.7                46.7
Net income (loss) attributable to PBF Energy
Inc. stockholders                              $     59.1          $  (417.2)         $           65.7          $ (1,094.0)

Consolidated gross margin                      $    168.7          $  (313.3)         $          508.9          $ (1,449.2)
Gross refining margin (1)                      $    727.5          $   203.1          $        2,089.0          $    108.0
Net income (loss) available to Class A common
stock per share:
Basic                                          $     0.49          $   (3.49)         $           0.55          $    (9.15)
Diluted                                        $     0.49          $   (3.49)         $           0.54          $    (9.15)

(1) See Non-GAAP Financial Measures.

                                       63
--------------------------------------------------------------------------------

PBF LLC                                        Three Months Ended September 30,           Nine Months Ended September 30,
                                                   2021                2020                  2021                   2020
Revenues                                       $  7,186.7          $ 3,667.5          $       19,009.4          $ 11,460.8

Cost and expenses:
Cost of products and other                        6,374.7            3,378.6                  16,666.4            11,095.0
Operating expenses (excluding depreciation and
amortization expense as reflected below)            530.5              471.9                   1,495.6             1,445.7
Depreciation and amortization expense               112.8              130.3                     338.5               369.3
Cost of sales                                     7,018.0            3,980.8                  18,500.5            12,910.0
General and administrative expenses (excluding
depreciation and amortization expense as
reflected below)                                     63.7               46.4                     165.3               186.5
Depreciation and amortization expense                 3.4                2.7                      10.1                 8.4
Change in fair value of contingent
consideration                                         0.1              (28.6)                     26.2               (93.5)
Impairment expense                                      -                7.0                         -                 7.0
Loss (gain) on sale of assets                         0.2                1.7                      (0.4)             (469.4)
Total cost and expenses                           7,085.4            4,010.0                  18,701.7            12,549.0

Income (loss) from operations                       101.3             (342.5)                    307.7            (1,088.2)

Other income (expense):
Interest expense, net                               (84.8)             (73.0)                   (250.9)             (192.8)
Change in fair value of catalyst obligations         17.8               (2.4)                     13.6                 4.2
Gain (loss) on extinguishment of debt                60.3                  -                      60.3               (22.2)
Other non-service components of net periodic
benefit cost                                          2.0                1.1                       5.9                 3.2
Income (loss) before income taxes                    96.6             (416.8)                    136.6            (1,295.8)
Income tax (benefit) expense                         (2.0)              (1.2)                    (16.9)                8.6
Net income (loss)                                    98.6             (415.6)                    153.5            (1,304.4)
Less: net income attributable to
noncontrolling interests                             18.9               22.8                      60.0                60.3
Net income (loss) attributable to PBF Energy
Company LLC                                    $     79.7          $  (438.4)         $           93.5          $ (1,364.7)



                                       64

--------------------------------------------------------------------------------

Operating Highlights                           Three Months Ended September 30,             Nine Months Ended September 30,
                                                    2021                  2020                  2021                  2020
Key Operating Information
Production (bpd in thousands)                         867.7               716.7                   839.7               750.2
Crude oil and feedstocks throughput (bpd in
thousands)                                            848.3               706.1                   823.2               744.6
Total crude oil and feedstocks throughput
(millions of barrels)                                  78.0                65.0                   224.7               204.0
Consolidated gross margin per barrel of
throughput                                   $         2.16            $  (4.82)         $         2.26            $  (7.10)
Gross refining margin, excluding special
items, per barrel of throughput (1)          $         9.32            $   2.98          $         6.32            $   3.92
Refinery operating expense, per barrel of
throughput                                   $         6.50            $   6.96          $         6.36            $   6.78

Crude and feedstocks (% of total throughput)
(2)
Heavy                                                    32    %             43  %                   34    %             43  %
Medium                                                   32    %             25  %                   29    %             26  %
Light                                                    19    %             18  %                   20    %             17  %
Other feedstocks and blends                              17    %             14  %                   17    %             14  %
Total throughput                                        100    %            100  %                  100    %            100  %

Yield (% of total throughput)
Gasoline and gasoline blendstocks                        52    %             54  %                   53    %             50  %
Distillates and distillate blendstocks                   29    %             28  %                   30    %             31  %
Lubes                                                     1    %              1  %                    1    %              1  %
Chemicals                                                 2    %              1  %                    2    %              1  %
Other                                                    18    %             18  %                   16    %             18  %
Total yield                                             102    %            102  %                  102    %            101  %





(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.
                                       65
--------------------------------------------------------------------------------

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,
                                                    2021               2020               2021               2020
                                                                (dollars per barrel, except as noted)
Dated Brent crude oil                           $    73.45          $  43.05          $    67.93          $  40.74
West Texas Intermediate (WTI) crude oil         $    70.54          $  40.91          $    65.06          $  38.12
Light Louisiana Sweet (LLS) crude oil           $    71.46          $  42.46          $    66.68          $  40.13
Alaska North Slope (ANS) crude oil              $    72.66          $  42.75          $    67.53          $  41.32
Crack Spreads
Dated Brent (NYH) 2-1-1                         $    18.66          $   8.30          $    16.09          $   9.30
WTI (Chicago) 4-3-1                             $    19.60          $   7.08          $    16.73          $   6.56
LLS (Gulf Coast) 2-1-1                          $    18.13          $   6.53          $    15.40          $   7.79
ANS (West Coast-LA) 4-3-1                       $    21.54          $  11.70          $    19.58          $  11.41
ANS (West Coast-SF) 3-2-1                       $    23.27          $  10.88          $    19.22          $   9.77
Crude Oil Differentials
Dated Brent (foreign) less WTI                  $     2.91          $   2.14          $     2.87          $   2.62
Dated Brent less Maya (heavy, sour)             $     7.26          $   3.88          $     5.93          $   5.95
Dated Brent less WTS (sour)                     $     2.91          $   2.09          $     2.53          $   2.72
Dated Brent less ASCI (sour)                    $     4.79          $   1.38          $     3.58          $   1.99
WTI less WCS (heavy, sour)                      $    13.59          $   9.29          $    13.00          $  10.58
WTI less Bakken (light, sweet)                  $    (0.48)         $   1.23          $     0.07          $   2.57
WTI less Syncrude (light, sweet)                $     2.47          $   1.94          $     1.66          $   1.58
WTI less LLS (light, sweet)                     $    (0.92)         $  (1.55)         $    (1.63)         $  (2.01)
WTI less ANS (light, sweet)                     $    (2.12)         $  (1.84)         $    (2.48)         $  (3.20)
Natural gas (dollars per MMBTU)                 $     4.32          $   

2.12 $ 3.35 $ 1.92

Three Months Ended September 30, 2021 Compared to the Three Months Ended
September 30, 2020
Overview- PBF Energy net income was $78.7 million for the three months ended
September 30, 2021 compared to a net loss of $397.8 million for the three months
ended September 30, 2020. PBF LLC net income was $98.6 million for the three
months ended September 30, 2021 compared to a net loss of $415.6 million for the
three months ended September 30, 2020. Net income attributable to PBF Energy was
$59.1 million, or $0.49 per diluted share, for the three months ended
September 30, 2021 ($0.49 per share on a fully-exchanged, fully-diluted basis
based on adjusted fully-converted net income, or $0.12 per share on a
fully-exchanged, fully-diluted basis based on adjusted fully-converted net
income excluding special items, as described below in Non-GAAP Financial
Measures) compared to net loss attributable to PBF Energy of $417.2 million, or
$(3.49) per diluted share, for the three months ended September 30, 2020
($(3.49) per share on a fully-exchanged, fully-diluted basis based on adjusted
fully-converted net loss, or $(2.87) per share on a fully-exchanged,
fully-diluted basis based on adjusted fully-converted net loss excluding special
items, as described below in Non-GAAP Financial Measures). The net income
attributable to PBF Energy represents PBF Energy's equity interest in PBF LLC's
pre-tax income, less applicable income tax (benefit) expense. PBF Energy's
weighted-average equity interest in PBF LLC was 99.2% for the three months ended
September 30, 2021 and September 30, 2020.
                                       66
--------------------------------------------------------------------------------

Our results for the three months ended September 30, 2021 were positively
impacted by a pre-tax gain on the extinguishment of debt associated with the
repurchase of a portion of our 2028 Senior Notes and 2025 Senior Notes of $60.3
million, or $44.3 million net of tax and a $1.4 million tax benefit associated
with the remeasurement of certain deferred tax assets, partially offset by a
change in fair value of contingent consideration related to both the Martinez
Acquisition and PBFX CPI Operations LLC acquisition (the "East Coast Storage
Assets Acquisition") of $0.1 million, or $0.1 million net of tax. Our results
for the three months ended September 30, 2020 were positively impacted by
special items consisting of a non-cash, pre-tax lower of cost or market ("LCM")
inventory adjustment of approximately $9.9 million, or $7.3 million net of tax,
a change in the fair value of the contingent consideration related to both the
Martinez Acquisition and East Coast Storage Assets Acquisition of $28.6 million,
or $21.1 million net of tax and a pre-tax benefit of $252.2 million, or $185.9
million net of tax, related to the change in our Tax Receivable Agreement
liability. Our results for the three months ended September 30, 2020 were
negatively impacted by impairment expense of $7.0 million, or $5.2 million net
of tax, related to the write-down of certain PBFX long-lived assets and a net
tax expense of $282.3 million associated with the remeasurement of certain
deferred tax assets.
Excluding the impact of these special items, our results were positively
impacted by increases in the demand for our refined products and improved
margins for refined products, which have positively impacted our revenues, cost
of products sold and operating income. Our results for the three months ended
September 30, 2020 were significantly impacted by the COVID-19 pandemic,
evidenced by overall lower throughput volumes and barrels sold at the majority
of our refineries, as well as lower refining margins.
Revenues- Revenues totaled $7.2 billion for the three months ended September 30,
2021 compared to $3.7 billion for the three months ended September 30, 2020, an
increase of approximately $3.5 billion, or 94.6%. Revenues per barrel were
$83.44 and $49.57 for the three months ended September 30, 2021 and 2020,
respectively, an increase of 68.3% directly related to higher hydrocarbon
commodity prices. For the three months ended September 30, 2021, the total
throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast
refineries averaged approximately 259,800 bpd, 146,000 bpd, 145,300 bpd and
297,200 bpd, respectively. For the three months ended September 30, 2020, the
total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West
Coast refineries averaged approximately 251,400 bpd, 108,400 bpd, 125,600 bpd
and 220,700 bpd, respectively. For the three months ended September 30, 2021,
the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West
Coast refineries averaged approximately 299,300 bpd, 152,800 bpd, 152,000 bpd
and 332,100 bpd, respectively. For the three months ended September 30, 2020,
the total barrels sold at our East Coast, Mid-Continent, Gulf Coast and West
Coast refineries averaged approximately 287,500 bpd, 118,000 bpd, 137,400 bpd
and 261,200 bpd, respectively.
The throughput rates at our refineries were higher in the three months ended
September 30, 2021 compared to the same period in 2020. We operated our
refineries at reduced rates beginning in March 2020, and, based on current
market conditions, we have adjusted throughput rates across our entire refining
system to correlate with the gradual increases in demand during the three months
ended September 30, 2021, while still running below historic levels. We plan on
continuing to operate our refineries at lower utilization levels until such time
that sustained product demand justifies higher production. Total refined product
barrels sold were higher than throughput rates, reflecting sales from inventory
as well as sales and purchases of refined products outside our refineries.
Consolidated Gross Margin- Consolidated gross margin totaled $168.7 million for
the three months ended September 30, 2021 compared to $(313.3) million for the
three months ended September 30, 2020, an increase of approximately $482.0
million. Gross refining margin (as described below in Non-GAAP Financial
Measures) totaled $727.5 million, or $9.32 per barrel of throughput for the
three months ended September 30, 2021 compared to $203.1 million, or $3.13 per
barrel of throughput for the three months ended September 30, 2020, an increase
of approximately $524.4 million. Gross refining margin excluding special items
totaled $727.5 million or $9.32 per barrel of throughput for the three months
ended September 30, 2021 compared to $193.2 million or $2.98 per barrel of
throughput for the three months ended September 30, 2020, an increase of $534.3
million.
                                       67
--------------------------------------------------------------------------------

Consolidated gross margin and gross refining margin were not impacted by special
items for the three months ended September 30, 2021. When compared to the same
period in 2020, results were positively impacted by the increase in refined
product margins, favorable movements in certain crude differentials and an
overall increase in throughput rates. For the three months ended September 30,
2020, special items impacting our margin calculations included a non-cash LCM
inventory benefit of approximately $9.9 million on a net basis, resulting from
an increase in crude oil and refined product prices.
Additionally, our results continue to be impacted by significant costs to comply
with the Renewable Fuel Standard. Total Renewable Fuel Standard compliance costs
were $73.1 million for the three months ended September 30, 2021 in comparison
to $86.6 million for three months ended months ended September 30, 2020.
Overall average industry margins were higher during the three months ended
September 30, 2021 in comparison to the same period in 2020, primarily due to
varying timing and extent of the impacts of the COVID-19 pandemic on regional
demand and commodity prices. During the three months ended September 30, 2021,
commodity prices increased and we started to experience an increase in demand
for our products in connection with the lifting or easing of restrictions by
many governmental authorities in response to decreasing COVID-19 infection rates
and the distribution of COVID-19 vaccines.
Favorable movements in 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.
On the East Coast, the Dated Brent (NYH) 2-1-1 industry crack spread was
approximately $18.66 per barrel, or 124.8% higher, in the three months ended
September 30, 2021, as compared to $8.30 per barrel in the same period in 2020.
Our margins were positively impacted from our refinery specific slate on the
East Coast by strengthening Dated Brent/Maya differential, which increased by
$3.38 per barrel, slightly offset by weakened WTI/Bakken differentials, which
decreased by $1.71 per barrel in comparison to the same period in 2020. The
WTI/WCS differential increased to $13.59 per barrel in the three months ended
September 30, 2021 compared to $9.29 in the same period in 2020, which favorably
impacted our cost of heavy Canadian crude.
Across the Mid-Continent, the WTI (Chicago) 4-3-1 industry crack spread was
$19.60 per barrel, or 176.8% higher, in the three months ended September 30,
2021 as compared to $7.08 per barrel in the same period in 2020. Additionally,
the WTI/Syncrude differential averaged $2.47 per barrel during the three months
ended September 30, 2021 as compared to $1.94 per barrel in the same period of
2020. Our margins were negatively impacted from our refinery specific slate in
the Mid-Continent by a decreasing WTI/Bakken differential, which averaged a
premium of $0.48 per barrel in the three months ended September 30, 2021, as
compared to a discount of $1.23 per barrel in the same period in 2020.
On the Gulf Coast, the LLS (Gulf Coast) 2-1-1 industry crack spread was $18.13
per barrel, or 177.6% higher, in the three months ended September 30, 2021 as
compared to $6.53 per barrel in the same period in 2020. Margins on the Gulf
Coast were positively impacted from our refinery specific slate by a
strengthening WTI/LLS differential, which averaged a discount of $0.92 per
barrel during the three months ended September 30, 2021 as compared to a premium
of $1.55 per barrel in the same period of 2020.
On the West Coast the ANS (West Coast) 4-3-1 industry crack spread was $21.54
per barrel, or 84.1% higher, in the three months ended September 30, 2021 as
compared to $11.70 per barrel in the same period in 2020. Additionally, the ANS
(West Coast) 3-2-1 industry crack spread was $23.27 per barrel, or 113.9%
higher, in the three months ended September 30, 2021 as compared to $10.88 per
barrel in the same period in 2020. Our margins on the West Coast were negatively
impacted from our refinery specific slate by weakened WTI/ANS differential,
which averaged a premium of $2.12 per barrel during the three months ended
September 30, 2021 as compared to a premium of $1.84 per barrel in the same
period of 2020.
                                       68
--------------------------------------------------------------------------------

Operating Expenses- Operating expenses totaled $530.5 million for the three
months ended September 30, 2021 compared to $471.9 million for the three months
ended September 30, 2020, an increase of $58.6 million, or 12.4%. Of the total
$530.5 million of operating expenses for the three months ended September 30,
2021, $507.6 million, or $6.50 per barrel of throughput, related to expenses
incurred by the Refining segment, while the remaining $22.9 million related to
expenses incurred by the Logistics segment ($452.4 million, or $6.96 per barrel,
and $19.5 million of operating expenses for the three months ended September 30,
2020 related to the Refining and Logistics segments, respectively). Increases in
operating expenses were mainly attributable to higher energy costs as a result
of increases in both natural gas volumes and price across our refineries when
compared to the same period in 2020. Additionally, we experienced higher
maintenance and operational costs due to increased production when compared to
the same period in 2020. Operating expenses related to our Logistics segment
also increased as a result of increased maintenance activity.
General and Administrative Expenses- General and administrative expenses totaled
$64.1 million for the three months ended September 30, 2021 compared to $46.6
million for the three months ended September 30, 2020, an increase of
approximately $17.5 million or 37.6%. The increase in general and administrative
expenses for the three months ended September 30, 2021 in comparison to the
three months ended September 30, 2020 is primarily related to higher salaries,
wages and benefits. Our general and administrative expenses are comprised of
personnel, facilities and other infrastructure costs necessary to support our
refineries and related logistics assets.
Gain on Sale of Assets- There was a loss of $0.2 million and $1.7 million for
the three months ended September 30, 2021 and September 30, 2020, respectively,
related to the sale of non-operating refinery assets.
Depreciation and Amortization Expense- Depreciation and amortization expense
totaled $116.2 million for the three months ended September 30, 2021 (including
$112.8 million recorded within Cost of sales) compared to $133.0 million for the
three months ended September 30, 2020 (including $130.3 million recorded within
Cost of sales), a decrease of $16.8 million. The decrease was a result of
reduced depreciation and amortization expense associated with certain units
idled as a result of the East Coast Refining Reconfiguration.
Change in Fair Value of Contingent Consideration- Change in fair value of
contingent consideration represented a loss of $0.1 million for the three months
ended September 30, 2021 in comparison to a gain of $28.6 million for the three
months ended September 30, 2020. These losses and gains relate to changes in
estimated fair value of the Martinez Contingent Consideration and the PBFX an
earn-out provision related to the East Coast Storage Assets Acquisition (the
"PBFX Contingent Consideration").
Change in Fair Value of Catalyst Obligations- Change in fair value of catalyst
obligations represented a gain of $17.8 million for the three months ended
September 30, 2021 compared to a loss of $2.4 million for the three months ended
September 30, 2020. These gains and losses relate to the change in value of the
precious metals underlying the sale and leaseback of our refineries' precious
metal catalysts, which we are obligated to repurchase at fair market value upon
lease termination.
Gain (loss) on extinguishment of debt- Gain on extinguishment of debt of $60.3
million incurred in the three months ended September 30, 2021 relates to the
repurchase of a portion of our 2028 Senior Notes and 2025 Senior Notes. There
were no such costs in the same period of 2020.
Impairment expense- There was no impairment expense recorded in the three months
ended September 30, 2021. Impairment expense totaled $7.0 million for the three
months ended September 30, 2020, resulting from an impairment charge related to
the write-down of certain PBFX long-lived assets.
                                       69
--------------------------------------------------------------------------------

Change in Tax Receivable Agreement Liability- There was no change in the Tax
Receivable Agreement liability for the three months ended September 30, 2021.
Change in the Tax Receivable Agreement liability for the three months ended
September 30, 2020 represented a gain of $252.2 million. This gain was primarily
the result of a deferred tax asset valuation allowance recorded in accordance
with ASC 740, related to the reduction of deferred tax assets associated with
the payments made or expected to be made in connection with the Tax Receivable
Agreement liability.
Interest Expense, net- PBF Energy interest expense totaled $82.0 million for the
three months ended September 30, 2021 compared to $70.4 million for the three
months ended September 30, 2020, an increase of approximately $11.6 million.
This net increase is mainly attributable to higher interest costs associated
with the issuance of the 2025 Senior Secured Notes in May 2020 and December
2020. Interest expense includes interest on long-term debt including the PBFX
credit facilities, costs related to the sale and leaseback of our precious metal
catalysts, financing costs associated with the amended and restated inventory
intermediation agreements ("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. PBF LLC interest expense totaled $84.8
million and $73.0 million for the three months ended September 30, 2021 and
September 30, 2020, respectively (inclusive of $2.8 million and $2.6 million,
respectively, of incremental interest expense on the affiliate note payable with
PBF Energy that eliminates in consolidation at the PBF Energy level).
Income Tax Expense- PBF LLC is organized as a limited liability company and PBFX
is an MLP, both of which are treated as "flow-through" entities for federal
income tax purposes and therefore are not subject to income tax. However, two
subsidiaries of Chalmette Refining L.L.C ("Chalmette Refining") and our Canadian
subsidiary, PBF Energy Limited ("PBF Ltd.") are treated as C-Corporations for
income tax purposes and may incur income taxes with respect to their earnings,
as applicable. The members of PBF LLC are required to include their
proportionate share of PBF LLC's taxable income or loss, which includes PBF
LLC's allocable share of PBFX's pre-tax income or loss, on their respective tax
returns. PBF LLC generally makes distributions to its members, per the terms of
PBF LLC's amended and restated limited liability company agreement, related to
such taxes on a pro-rata basis. PBF Energy recognizes an income tax expense or
benefit in our consolidated financial statements based on PBF Energy's allocable
share of PBF LLC's pre-tax income or loss, which was approximately 99.2% on a
weighted-average basis for both the three months ended September 30, 2021 and
2020. PBF Energy's Condensed Consolidated Financial Statements do not reflect
any benefit or provision for income taxes on the pre-tax income or loss
attributable to the noncontrolling interests in PBF LLC or PBFX (although, as
described above, PBF LLC must make tax distributions to all its members on a
pro-rata basis). PBF Energy's effective tax rate, excluding the impact of
noncontrolling interest, for the three months ended September 30, 2021 and 2020
was 25.6% and (129.7)%, respectively, reflecting tax adjustments for discrete
items during the quarters.
                                       70
--------------------------------------------------------------------------------

Noncontrolling Interest- PBF Energy is the sole managing member of, and has a
controlling interest in, PBF LLC. As the sole managing member of PBF LLC, PBF
Energy operates and controls all of the business and affairs of PBF LLC and its
subsidiaries. PBF Energy consolidates the financial results of PBF LLC and its
subsidiaries, including PBFX. With respect to the consolidation of PBF LLC, the
Company records a noncontrolling interest for the economic interest in PBF LLC
held by members other than PBF Energy, and with respect to the consolidation of
PBFX, the Company records a noncontrolling interest for the economic interests
in PBFX held by the public unitholders of PBFX, and with respect to the
consolidation of PBF Holding, the Company records a 20% noncontrolling interest
for the ownership interests in two subsidiaries of Chalmette Refining held by a
third party. The total noncontrolling interest on the Condensed Consolidated
Statements of Operations represents the portion of the Company's earnings or
loss attributable to the economic interests held by members of PBF LLC other
than PBF Energy, by the public common unitholders of PBFX and by the third-party
stockholders of certain of Chalmette Refining's subsidiaries. The total
noncontrolling interest on the Condensed Consolidated Balance Sheets represents
the portion of the Company's net assets attributable to the economic interests
held by the members of PBF LLC other than PBF Energy, by the public common
unitholders of PBFX and by the third-party stockholders of the two Chalmette
Refining subsidiaries. PBF Energy's weighted-average equity noncontrolling
interest ownership percentage in PBF LLC for both the three months ended
September 30, 2021 and 2020 was approximately 0.8%. The carrying amount of the
noncontrolling interest on our Condensed Consolidated Balance Sheets
attributable to the noncontrolling interest is not equal to the noncontrolling
interest ownership percentage due to the effect of income taxes and related
agreements that pertain solely to PBF Energy.
Nine Months Ended September 30, 2021 Compared to the Nine Months Ended
September 30, 2020
Overview- PBF Energy net income was $126.4 million for the nine months ended
September 30, 2021 compared to a net loss of $1,047.3 million for the nine
months ended September 30, 2020. PBF LLC net income was $153.5 million for the
nine months ended September 30, 2021 compared to a net loss of $1,304.4 million
for the nine months ended September 30, 2020. Net income attributable to PBF
Energy stockholders was $65.7 million, or $0.54 per diluted share, for the nine
months ended September 30, 2021 ($0.54 per share on a fully-exchanged,
fully-diluted basis based on adjusted fully-converted net income, or $(3.75) per
share on a fully-exchanged, fully-diluted basis based on adjusted
fully-converted net loss excluding special items, as described below in Non-GAAP
Financial Measures) compared to net loss attributable to PBF Energy stockholders
of $1,094.0 million, or $(9.15) per diluted share, for the nine months ended
September 30, 2020 ($(9.15) per share on a fully-exchanged, fully-diluted basis
based on adjusted fully-converted net loss, or $(7.25) per share on a
fully-exchanged, fully-diluted basis based on adjusted fully-converted net loss
excluding special items, as described below in Non-GAAP Financial Measures). The
net income attributable to PBF Energy stockholders represents PBF Energy's
equity interest in PBF LLC's pre-tax income, less applicable income tax expense
(benefit). PBF Energy's weighted-average equity interest in PBF LLC was 99.2%
and 99.1% for the nine months ended September 30, 2021 and 2020, respectively.
                                       71
--------------------------------------------------------------------------------

Our results for the nine months ended September 30, 2021 were positively
impacted by special items consisting of a non-cash, pre-tax LCM inventory
adjustment of approximately $669.6 million, or $491.5 million net of tax, a
pre-tax gain on the extinguishment of debt associated with the repurchase of a
portion of our 2028 Senior Notes and 2025 Senior Notes of $60.3 million, or
$44.3 million net of tax, and a $3.8 million tax benefit associated with the
remeasurement of certain deferred tax assets, offset by a change in fair value
of contingent consideration primarily related to the Martinez Acquisition of
$26.2 million, or $19.2 million net of tax. Our results for the nine months
ended September 30, 2020 were positively impacted by special items consisting of
a gain on the sale of hydrogen plants of $471.1 million, or $347.2 million net
of tax, a change in the fair value of the contingent consideration related to
both the Martinez Acquisition and East Coast Storage Assets Acquisition of $93.5
million, or $68.9 million net of tax, and a pre-tax change in the Tax Receivable
Agreement liability of $240.6 million, or $177.3 million net of tax. Our results
for the nine months ended September 30, 2020 were negatively impacted by special
items consisting of a non-cash, pre-tax LCM inventory adjustment of
approximately $691.5 million, or $509.6 million net of tax, pre-tax debt
extinguishment costs associated with the early redemption of our 2023 Senior
Notes of $22.2 million, or $16.4 million net of tax, severance costs related to
second quarter reductions in workforce of $12.9 million, or $9.5 million net of
tax, impairment expense of $7.0 million, or $5.2 million net of tax, related to
the write-down of certain PBFX long-lived assets and net tax expense of $282.3
million associated with the remeasurement of certain deferred tax assets. 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 increases in the demand for our refined products and improved
margins for refined products, which have positively impacted our revenues, cost
of products sold and operating income. When comparing our results to the nine
months ended September 30, 2020, demand for our products has started to recover,
evidenced by higher throughput volumes and barrels sold at the majority of our
refineries, as well as overall higher refining margins. Additionally, our
results for the nine months ended September 30, 2021 were positively impacted by
lower general and administrative expenses when compared to the same period in
2020. During the nine months ended September 30, 2020 our results were
negatively impacted by higher general and administrative expenses associated
with severance charges and integration costs associated with the Martinez
Acquisition.
Revenues- Revenues totaled $19.0 billion for the nine months ended September 30,
2021 compared to $11.5 billion for the nine months ended September 30, 2020, an
increase of approximately $7.5 billion, or 65.2%. Revenues per barrel were
$76.95 and $48.67 for the nine months ended September 30, 2021 and 2020,
respectively, an increase of 58.1% directly related to higher hydrocarbon
commodity prices. For the nine months ended September 30, 2021, the total
throughput rates at our East Coast, Mid-Continent, Gulf Coast and West Coast
refineries averaged approximately 250,900 bpd, 138,000 bpd, 158,000 bpd and
276,300 bpd, respectively. For the nine months ended September 30, 2020, the
total throughput rates at our East Coast, Mid-Continent, Gulf Coast and West
Coast refineries averaged approximately 274,300 bpd, 91,900 bpd, 144,000 bpd and
234,400 bpd, respectively. For the nine months ended September 30, 2021, total
barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast
refineries averaged approximately 285,700 bpd, 144,100 bpd, 165,800 bpd and
309,400 bpd, respectively. For the nine months ended September 30, 2020, total
barrels sold at our East Coast, Mid-Continent, Gulf Coast and West Coast
refineries averaged approximately 310,100 bpd, 113,800 bpd, 169,000 bpd and
266,500 bpd, respectively.
The throughput rates at the majority of our refineries were higher in the nine
months ended September 30, 2021 compared to the same period in 2020, with the
exception of lower rates in the East Coast as a result of the East Coast
Refining Reconfiguration in the fourth quarter of 2020. We operated our
refineries at reduced rates beginning in March 2020, and, based on current
market conditions, we have adjusted throughput rates across our entire refining
system to correlate with the gradual increases in demand experienced during the
nine months ended September 30, 2021, while still running below historic levels.
We plan on continuing to operate our refineries at lower utilization levels
until such time that sustained product demand justifies higher production. Total
refined product barrels sold were higher than throughput rates, reflecting sales
from inventory as well as sales and purchases of refined products outside our
refineries.
                                       72
--------------------------------------------------------------------------------

Consolidated Gross Margin- Consolidated gross margin totaled $508.9 million for
the nine months ended September 30, 2021, compared to $(1,449.2) million for the
nine months ended September 30, 2020, an increase of approximately $1,958.1
million. Gross refining margin (as described below in Non-GAAP Financial
Measures) totaled $2,089.0 million, or $9.30 per barrel of throughput for the
nine months ended September 30, 2021 compared to $108.0 million, or $0.53 per
barrel of throughput for the nine months ended September 30, 2020, an increase
of approximately $1,981.0 million. Gross refining margin excluding special items
totaled $1,419.4 million or $6.32 per barrel of throughput for the nine months
ended September 30, 2021 compared to $799.5 million or $3.92 per barrel of
throughput for the nine months ended September 30, 2020, an increase of $619.9
million.
Consolidated gross margin and gross refining margin were positively impacted by
a non-cash LCM adjustment of approximately $669.6 million on a net basis
resulting from the increase in crude oil and refined product prices from the
year ended December 31, 2020 to the end of the third quarter of 2021. Gross
refining margin excluding the impact of special items increased due to favorable
movements in certain crude differentials and an overall increase in throughput
rates and refining margins. For the nine months ended September 30, 2020,
special items impacting our margin calculations included a non-cash LCM
inventory charge of approximately $691.5 million on a net basis, resulting from
a decrease in crude oil and refined product prices.
Additionally, our results continue to be impacted by significant costs to comply
with the Renewable Fuel Standard. Total Renewable Fuel Standard compliance costs
were $653.8 million for the nine months ended September 30, 2021 in comparison
to $183.4 million for the nine months ended September 30, 2020.
Average industry margins were mostly favorable during the nine months ended
September 30, 2021 in comparison to the same period in 2020, primarily due to
varying timing and extent of the impacts of the COVID-19 pandemic on regional
demand and commodity prices. During the nine months ended September 30, 2021, we
started to experience an increase in demand for our products in connection with
the lifting or easing of restrictions by many governmental authorities in
response to decreasing COVID-19 infection rates and the distribution of COVID-19
vaccines.
Favorable movements in 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.
On the East Coast, the Dated Brent (NYH) 2-1-1 industry crack spread was
approximately $16.09 per barrel, or 73.0% higher, in the nine months ended
September 30, 2021, as compared to $9.30 per barrel in the same period in 2020.
Our margins were negatively impacted from our refinery specific slate on the
East Coast by weakened Dated Brent/Maya and WTI/Bakken differentials, which
decreased by $0.02 per barrel and $2.50 per barrel, respectively, in comparison
to the same period in 2020. The WTI/WCS differential increased to $13.00 per
barrel in 2021 compared to $10.58 in 2020, which favorably impacted our cost of
heavy Canadian crude.
Across the Mid-Continent, the WTI (Chicago) 4-3-1 industry crack spread
was $16.73 per barrel, or 155.0% higher, in the nine months ended September 30,
2021 as compared to $6.56 per barrel in the same period in 2020. Our margins
were negatively impacted from our refinery specific slate in the Mid-Continent
by a decreasing WTI/Bakken differential, which averaged $0.07 per barrel in the
nine months ended September 30, 2021, as compared to $2.57 per barrel in the
same period in 2020. This decrease was slightly offset by strengthening
WTI/Syncrude differential which averaged $1.66 per barrel during the nine months
ended September 30, 2021 as compared to $1.58 per barrel in the same period of
2020.
                                       73
--------------------------------------------------------------------------------

On the Gulf Coast, the LLS (Gulf Coast) 2-1-1 industry crack spread was $15.40
per barrel, or 97.7% higher, in the nine months ended September 30, 2021 as
compared to $7.79 per barrel in the same period in 2020. Margins on the Gulf
Coast were positively impacted from our refinery specific slate by a
strengthening WTI/LLS differential, which averaged a premium of $1.63 per barrel
during the nine months ended September 30, 2021 as compared to a premium of
$2.01 per barrel in the same period of 2020.
On the West Coast, the ANS (West Coast) 4-3-1 industry crack spread was $19.58
per barrel, or 71.6% higher, in the nine months ended September 30, 2021 as
compared to $11.41 per barrel in the same period in 2020. Additionally (West
Coast) 3-2-1 industry crack spread was $19.22 per barrel, or 96.7% higher, in
the nine months ended September 30, 2021 as compared to $9.77 per barrel in the
same period in 2020. Our margins on the West Coast were positively impacted from
our refinery specific slate by a strengthening WTI/ANS differential, which
averaged a premium of $2.48 per barrel during the nine months ended
September 30, 2021 as compared to a premium of $3.20 per barrel in the same
period of 2020.
Operating Expenses- Operating expenses totaled $1,495.6 million for the nine
months ended September 30, 2021 compared to $1,445.7 million for the nine months
ended September 30, 2020, an increase of approximately $49.9 million, or 3.5%.
Of the total $1,495.6 million of operating expenses for the nine months ended
September 30, 2021, $1,430.1 million or $6.36 per barrel of throughput, related
to expenses incurred by the Refining segment, while the remaining $65.5 million
related to expenses incurred by the Logistics segment ($1,383.6 million or $6.78
per barrel of throughput, and $62.1 million of operating expenses for the nine
months ended September 30, 2020 related to the Refining and Logistics segments,
respectively). Increase in operating expenses were mainly attributable to
increases in natural gas volumes and price across our refineries when compared
to the same period in 2020. Additionally, we experienced higher maintenance and
operational costs due to increased production when compared to the same period
in 2020. These increases were partially offset by cost reductions associated
with the East Coast Refining Reconfiguration (East Coast operating expenses
decreased by $29.2 million when compared to the same period in 2020) as well as
reductions in discretionary activities and third-party services, which are in
line with our cost reduction initiatives taken to strengthen our financial
flexibility.
General and Administrative Expenses- General and administrative expenses totaled
$166.9 million for the nine months ended September 30, 2021 compared to $187.0
million for the nine months ended September 30, 2020, a decrease of
approximately $20.1 million or 10.7%. The decrease in general and administrative
expenses for the nine months ended September 30, 2021 in comparison to the nine
months ended September 30, 2020 primarily related to reductions in outside
service costs and lower salaries, wages and benefits. Additionally, general and
administrative expenses for the nine months ended September 30, 2020 included
headcount reduction severance costs across the refineries as well as integration
costs pertaining to the Martinez Acquisition. Our general and administrative
expenses are comprised of personnel, facilities and other infrastructure costs
necessary to support our refineries and related logistics assets.
Gain on Sale of Assets- There was a gain of $0.4 million for the nine months
ended September 30, 2021 related primarily to the sale of non-operating refinery
assets. There was a gain of $469.4 million for the nine months ended
September 30, 2020 primarily related to the sale of five hydrogen plants.
Depreciation and Amortization Expense- Depreciation and amortization expense
totaled $348.6 million for the nine months ended September 30, 2021 (including
$338.5 million recorded within Cost of sales) compared to $377.7 million for the
nine months ended September 30, 2020 (including $369.3 million recorded within
Cost of sales), a decrease of approximately $29.1 million. The decrease was a
result of reduced depreciation and amortization expense associated with certain
units idled as a result of the East Coast Refining Reconfiguration.
                                       74
--------------------------------------------------------------------------------

Change in Fair Value of Contingent Consideration- Change in fair value of
contingent consideration represented a loss of $26.2 million for the nine months
ended September 30, 2021 in comparison to a gain of $93.5 million for the nine
months ended September 30, 2020. These losses and gains were related to the
changes in estimated fair value of the Martinez Contingent Consideration and the
PBFX Contingent Consideration.
Impairment expense- There was no impairment expense for the nine months ended
September 30, 2021. Impairment expense totaled $7.0 million for the nine months
ended September 30, 2020, resulting from a write-down of certain PBFX long-lived
asset.
Change in Tax Receivable Agreement Liability- There was no change in the Tax
Receivable Agreement liability for the nine months ended September 30, 2021.
Change in the Tax Receivable Agreement liability for the nine months ended
September 30, 2020 represented a gain of $240.6 million. This gain was primarily
the result of a deferred tax asset valuation allowance recorded in accordance
with ASC 740 related to the reduction of deferred tax assets associated with the
payments made or expected to be made in connection with the Tax Receivable
Agreement liability.

Change in Fair Value of Catalyst Obligations- Change in fair value of catalyst
obligations represented a gain of $13.6 million for the nine months ended
September 30, 2021 compared to a gain of $4.2 million for the nine months ended
September 30, 2020. These gains relate to the change in value of the precious
metals underlying the sale and leaseback of our refineries' precious metal
catalysts, which we are obligated to repurchase at fair market value upon lease
termination.
Gain (loss) on extinguishment of debt- We incurred a gain on extinguishment of
debt of $60.3 million in the nine months ended September 30, 2021 related to the
repurchase of a portion of our 2028 Senior Notes and 2025 Senior Notes. We
incurred debt extinguishment costs of $22.2 million in the nine months ended
September 30, 2020 related to the redemption of our 2023 Senior Notes.
Interest Expense, net- PBF Energy interest expense totaled $243.1 million for
the nine months ended September 30, 2021 compared to $185.1 million for the nine
months ended September 30, 2020, an increase of approximately $58.0 million.
This net increase is mainly attributable to higher interest costs associated
with the issuance of the 2025 Senior Secured Notes in May 2020 and December
2020. Interest expense includes interest on long-term debt including the PBFX
credit facilities, costs related to the sale and leaseback of our precious metal
catalysts, 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. PBF LLC
interest expense totaled $250.9 million and $192.8 million for the nine months
ended September 30, 2021 and 2020, respectively (inclusive of $7.8 million and
$7.7 million, respectively, of incremental interest expense on the affiliate
note payable with PBF Energy that eliminates in consolidation at the PBF Energy
level).
                                       75
--------------------------------------------------------------------------------

Income Tax Expense- PBF LLC is organized as a limited liability company and PBFX
is an MLP, both of which are treated as "flow-through" entities for federal
income tax purposes and therefore are not subject to income tax. However, two
subsidiaries of Chalmette Refining and our Canadian subsidiary, PBF Ltd., are
treated as C-Corporations for income tax purposes and may incur income taxes
with respect to their earnings, as applicable. The members of PBF LLC are
required to include their proportionate share of PBF LLC's taxable income or
loss, which includes PBF LLC's allocable share of PBFX's pre-tax income or loss,
on their respective tax returns. PBF LLC generally makes distributions to its
members, per the terms of PBF LLC's amended and restated limited liability
company agreement, related to such taxes on a pro-rata basis. PBF Energy
recognizes an income tax expense or benefit in our Condensed Consolidated
Financial Statements based on PBF Energy's allocable share of PBF LLC's pre-tax
income or loss, which was approximately 99.2% and 99.1%, on a weighted-average
basis for the nine months ended September 30, 2021 and September 30, 2020,
respectively. PBF Energy's Condensed Consolidated Financial Statements do not
reflect any benefit or provision for income taxes on the pre-tax income or loss
attributable to the noncontrolling interests in PBF LLC or PBFX (although, as
described above, PBF LLC must make tax distributions to all its members on a
pro-rata basis). PBF Energy's effective tax rate, excluding the impact of
noncontrolling interests, for the nine months ended September 30, 2021 and
September 30, 2020 was 20.0% and 0.1%, respectively.
Noncontrolling Interest- PBF Energy is the sole managing member of, and has a
controlling interest in, PBF LLC. As the sole managing member of PBF LLC, PBF
Energy operates and controls all of the business and affairs of PBF LLC and its
subsidiaries. PBF Energy consolidates the financial results of PBF LLC and its
subsidiaries, including PBFX. With respect to the consolidation of PBF LLC, the
Company records a noncontrolling interest for the economic interest in PBF LLC
held by members other than PBF Energy, and with respect to the consolidation of
PBFX, the Company records a noncontrolling interest for the economic interests
in PBFX held by the public unitholders of PBFX, and with respect to the
consolidation of PBF Holding, the Company records a 20% noncontrolling interest
for the ownership interests in two subsidiaries of Chalmette Refining held by a
third-party. The total noncontrolling interest on the Condensed Consolidated
Statements of Operations represents the portion of the Company's earnings or
loss attributable to the economic interests held by members of PBF LLC other
than PBF Energy, by the public common unitholders of PBFX and by the third-party
stockholders of certain of Chalmette Refining's subsidiaries. The total
noncontrolling interest on the Condensed Consolidated Balance Sheets represents
the portion of the Company's net assets attributable to the economic interests
held by the members of PBF LLC other than PBF Energy, by the public common
unitholders of PBFX and by the third-party stockholders of the two Chalmette
Refining subsidiaries. PBF Energy's weighted-average equity noncontrolling
interest ownership percentage in PBF LLC for the nine months ended September 30,
2021 and 2020 was approximately 0.8% and 0.9%, respectively. The carrying amount
of the noncontrolling interest on our Condensed Consolidated Balance Sheets
attributable to the noncontrolling interest is not equal to the noncontrolling
interest ownership percentage due to the effect of income taxes and related
agreements that pertain solely to PBF Energy.
                                       76
--------------------------------------------------------------------------------

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 accounting principles generally accepted in the United States of
America ("GAAP"), and our calculations thereof may not be comparable to
similarly entitled measures reported by other companies. Such Non-GAAP financial
measures are presented only in the context of PBF Energy's results and are not
presented or discussed in respect to PBF LLC.
Special Items
The Non-GAAP measures presented include Adjusted Fully-Converted Net Income
(Loss) excluding special items, EBITDA excluding special items and gross
refining margin excluding special items. Special items for the periods presented
relate to LCM inventory adjustments, changes in fair value of contingent
consideration, changes in the Tax Receivable Agreement liability, (gain) loss on
extinguishment of debt, gain on sale of hydrogen plants, severance costs related
to reduction in workforce, impairment expense and net tax (benefit) expense on
remeasurement of deferred tax assets. 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.
Adjusted Fully-Converted Net Income (Loss) and Adjusted Fully-Converted Net
Income (Loss) Excluding Special Items
PBF Energy utilizes results presented on an Adjusted Fully-Converted basis that
reflects an assumed exchange of all PBF LLC Series A Units for shares of PBF
Energy Class A common stock. In addition, we present results on an Adjusted
Fully-Converted basis excluding special items as described above. We believe
that these Adjusted Fully-Converted measures, when presented in conjunction with
comparable GAAP measures, are useful to investors to compare PBF Energy results
across different periods and to facilitate an understanding of our operating
results.
Neither Adjusted Fully-Converted Net Income (Loss) nor Adjusted Fully-Converted
Net Income (Loss) excluding special items should be considered an alternative to
net income (loss) presented in accordance with GAAP. Adjusted Fully-Converted
Net Income (Loss) and Adjusted Fully-Converted Net Income (Loss) excluding
special items presented by other companies may not be comparable to our
presentation, since each company may define these terms differently. The
differences between Adjusted Fully-Converted and GAAP results are as follows:
1.  Assumed exchange of all PBF LLC Series A Units for shares of PBF Energy
Class A common stock. As a result of the assumed exchange of all PBF LLC Series
A Units, the noncontrolling interest related to these units is converted to
controlling interest. Management believes that it is useful to provide the
per-share effect associated with the assumed exchange of all PBF LLC Series A
Units.
2.  Income Taxes. Prior to PBF Energy's initial public offering ("IPO"), PBF
Energy was organized as a limited liability company treated as a "flow-through"
entity for income tax purposes, and even after PBF Energy's IPO, not all of its
earnings are subject to corporate-level income taxes. Adjustments have been made
to the Adjusted Fully-Converted tax provisions and earnings to assume that PBF
Energy had adopted its post-IPO corporate tax structure for all periods
presented and is taxed as a C-corporation in the U.S. at the prevailing
corporate rates. These assumptions are consistent with the assumption in clause
1 above that all PBF LLC Series A Units are exchanged for shares of PBF Energy
Class A
                                       77
--------------------------------------------------------------------------------

common stock, as the assumed exchange would change the amount of PBF Energy's
earnings that are subject to corporate income tax.
The following table reconciles PBF Energy's Adjusted Fully-Converted results
with its results presented in accordance with GAAP for the three and nine months
ended September 30, 2021 and 2020 (in millions, except share and per share
amounts):
                                                       Three Months Ended September 30,                 Nine Months Ended September 30,
                                                          2021                    2020                    2021                    2020
Net income (loss) attributable to PBF Energy Inc.
stockholders                                       $          59.1          

$ (417.2) $ 65.7 $ (1,094.0) Less: Income allocated to participating securities

               -                      -                        -                    0.1
Income (loss) available to PBF Energy Inc.
stockholders - basic                                          59.1                 (417.2)                    65.7               (1,094.1)
Add: Net income (loss) attributable to
noncontrolling interest (1)                                    0.7                   (3.5)                     0.7                  (13.6)
Less: Income tax (expense) benefit (2)                        (0.2)                   0.9                     (0.2)                   3.6

Adjusted fully-converted net income (loss) $ 59.6 $ (419.8) $ 66.2 $ (1,104.1) Special Items: (3) Add: Non-cash LCM inventory adjustment

                           -                   (9.9)                  (669.6)                 691.5
Add: Change in fair value of contingent
consideration                                                  0.1                  (28.6)                    26.2                  (93.5)
Add: Gain on sale of hydrogen plants                             -                      -                        -                 (471.1)
Add: Impairment expense                                          -                    7.0                        -                    7.0
Add: Severance costs                                             -                      -                        -                   12.9
Add: (Gain) loss on extinguishment of debt                   (60.3)                     -                    (60.3)                  22.2
Add: Change in Tax Receivable Agreement liability                -                 (252.2)                       -                 (240.6)

Add: Net tax (benefit) expense on remeasurement of deferred tax assets

                                           (1.4)                 282.3                     (3.8)                 282.3
Add: Recomputed income tax on special items                   16.0                   74.6                    187.2                   18.8
Adjusted fully-converted net income (loss)
excluding special items                            $          14.0          

$ (346.6) $ (454.1) $ (874.6)

Weighted-average shares outstanding of PBF Energy
Inc.                                                   120,268,046            119,684,030              120,230,369            119,561,388
Conversion of PBF LLC Series A Units (4)                   994,192                975,133                  989,314              1,066,849
Common stock equivalents (5)                                91,851                      -                  387,524                      -
Fully-converted shares outstanding-diluted             121,354,089            120,659,163              121,607,207            120,628,237

Diluted net income (loss) per share                $          0.49          $       (3.49)         $          0.54          $       (9.15)
Adjusted fully-converted net income (loss) per
fully exchanged, fully diluted shares outstanding
(5)                                                $          0.49          

$ (3.49) $ 0.54 $ (9.15) Adjusted fully-converted net income (loss) excluding special items per fully exchanged, fully diluted shares outstanding (3) (5)

                 $          0.12          

$ (2.87) $ (3.75) $ (7.25)

----------

See Notes to Non-GAAP Financial Measures.

                                       78
--------------------------------------------------------------------------------

Gross Refining Margin and Gross Refining Margin Excluding Special Items
Gross refining margin is defined as consolidated gross margin excluding refinery
depreciation, refinery operating expense, and gross margin of PBFX. We believe
both gross refining margin and 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 (revenues 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.
The following table presents our GAAP calculation of 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 millions, except per barrel
amounts):

                                       79

--------------------------------------------------------------------------------

© Edgar Online, source Glimpses