PBF Logistics LP (Form: 10-Q, Received: 10/31/2018 14:11:46)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)



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

For the quarterly period ended: September 30, 2018



¨	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)

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

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 October 29, 2018 , there were 45,347,196 common units outstanding.

PBF LOGISTICS LP

TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION	5

Item 1. Financial Statements (Unaudited)	5
Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017	5
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2018 and 2017	6
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017	7
Notes to Condensed Consolidated Financial Statements	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	47

Item 3. Quantitative and Qualitative Disclosures About Market Risk	65

Item 4. Controls and Procedures	65

PART II - OTHER INFORMATION	67

Item 1. Legal Proceedings	67

Item 1A. Risk Factors	67

Item 6. Exhibits	68

Signatures	69

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 September 30, 2018 , 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 19,953,631 of PBFX’s common units constituting an aggregate 44.0% limited partner interest in PBFX and owns all of PBFX’s incentive distribution rights (“IDRs”), with the remaining 56.0% limited partner interest owned by public unitholders as of September 30, 2018 .

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 September 30, 2018 , 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.

References in this Form 10-Q to “PBF Logistics LP,” “PBFX,” the “Partnership” and “we,” “our,” “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, 2017, which we refer to as our 2017 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 revenues subjects us to the business risks of PBF Energy, which includes 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 certain of PBF Energy’s facilities, 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 handling crude oil, petroleum products and natural gas;


•	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 trains;


•	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 United States, 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.

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

PBF LOGISTICS LP

CONDENSED CONSOLIDATED BALANCE SHEETS

( unaudited, in thousands, except unit data )



	September 30, 2018		December 31, 2017*
ASSETS
Current assets:
Cash and cash equivalents	$	18,022	$	19,664
Accounts receivable - affiliates	33,454		40,817
Accounts receivable	3,010		1,423
Prepaids and other current assets	3,496		1,793
Total current assets	57,982		63,697
Property, plant and equipment, net	736,876		684,488
Goodwill	6,332		—
Other non-current assets	5,660		30
Total assets	$	806,850	$	748,215

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable - affiliates	$	17,659	$	8,352
Accounts payable and accrued liabilities	24,056		19,794
Deferred revenue	1,183		1,438
Total current liabilities	42,898		29,584
Long-term debt	567,152		548,793
Other long-term liabilities	1,612		2,078
Total liabilities	611,662		580,455

Commitments and contingencies (Note 9)

Equity:
Net investment - Predecessor	—		10,665
Common unitholders (45,347,196 and 41,900,708 units issued and outstanding, as of September 30, 2018 and December 31, 2017, respectively)	22,784		(17,544		)
IDR holder - PBF LLC	3,641		2,736
Total PBF Logistics LP equity	26,425		(4,143		)
Noncontrolling interest	168,763		171,903
Total equity	195,188		167,760
Total liabilities and equity	$	806,850	$	748,215

* Prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition (as defined in Note 1 “Description of the Business and Basis of Presentation” of the Notes to Condensed Consolidated Financial Statements).

See Notes to Condensed Consolidated Financial Statements.

PBF LOGISTICS LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except unit and per unit data)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018*			2017*			2018*			2017*
Revenue:
Affiliate	$	66,140		$	62,359		$	190,789		$	176,916
Third-party	4,416			3,836			12,606			13,459
Total revenue	70,556			66,195			203,395			190,375

Costs and expenses:
Operating and maintenance expenses	20,803			17,704			61,407			52,567
General and administrative expenses	4,725			3,534			15,504			12,947
Depreciation and amortization	7,451			5,756			21,185			17,096
Total costs and expenses	32,979			26,994			98,096			82,610

Income from operations	37,577			39,201			105,299			107,765

Other expense:
Interest expense, net	(10,070		)	(7,416		)	(29,684		)	(22,493		)
Amortization of loan fees and debt premium	(497		)	(332		)	(1,256		)	(1,125		)
Net income	27,010			31,453			74,359			84,147
Less: Net loss attributable to Predecessor	(80		)	(1,219		)	(2,443		)	(3,863		)
Less: Net income attributable to noncontrolling interest	4,725			3,799			13,110			11,218
Net income attributable to the partners	22,365			28,873			63,692			76,792
Less: Net income attributable to the IDR holder	3,641			2,526			10,011			6,319
Net income attributable to PBF Logistics LP unitholders	$	18,724		$	26,347		$	53,681		$	70,473

Net income per limited partner unit:
Common units - basic	$	0.42		$	0.63		$	1.25		$	1.69
Common units - diluted	0.42			0.63			1.25			1.69
Subordinated units - basic and diluted	—			—			—			1.61

Weighted-average limited partner units outstanding:
Common units - basic	44,518,365			42,127,288			42,965,502			33,280,957
Common units - diluted	44,612,522			42,161,008			43,015,817			33,309,555
Subordinated units - basic and diluted	—			—			—			8,787,068

Cash distribution declared per unit	$	0.5000		$	0.4800		$	1.4850		$	1.4100

* Current and prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition (as defined in Note 1 “Description of the Business and Basis of Presentation” of the Notes to Condensed Consolidated Financial Statements).

See Notes to Condensed Consolidated Financial Statements.

PBF LOGISTICS LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)



	Nine Months Ended September 30,
	2018*			2017*
Cash flows from operating activities:
Net income	$	74,359		$	84,147
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	21,185			17,096
Amortization of loan fees and debt premium	1,256			1,125
Unit-based compensation expense	4,549			4,515
Changes in operating assets and liabilities:
Accounts receivable - affiliates	7,363			818
Accounts receivable	(1,587		)	3,188
Prepaids and other current assets	(1,703		)	(329		)
Accounts payable - affiliates	9,307			500
Accounts payable and accrued liabilities	4,624			7,705
Deferred revenue	(255		)	39
Other assets and liabilities	(1,516		)	(1,128		)
Net cash provided by operating activities	117,582			117,676

Cash flows from investing activities:
Knoxville Terminals Purchase	(58,000		)	—
Toledo Products Terminal Acquisition	—			(10,097		)
Expenditures for property, plant and equipment	(28,627		)	(62,003		)
Purchases of marketable securities	—			(75,036		)
Maturities of marketable securities	—			115,060
Net cash used in investing activities	$	(86,627	)	$	(32,076	)

See Notes to Condensed Consolidated Financial Statements.

PBF LOGISTICS LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(unaudited, in thousands)



	Nine Months Ended September 30,
	2018*			2017*
Cash flows from financing activities:
Net proceeds from issuance of common units	$	34,820		$	—
Distributions to unitholders	(72,471		)	(62,794		)
Distributions to TVPC members	(16,250		)	(17,348		)
Contribution from parent	4,201			9,405
Proceeds from revolving credit facility	64,000			—
Repayment of revolving credit facility	(43,700		)	—
Repayment of term loan	—			(39,664		)
Deferred financing costs	(3,197		)	—
Net cash used in financing activities	(32,597		)	(110,401		)

Net change in cash and cash equivalents	(1,642		)	(24,801		)
Cash and cash equivalents at beginning of year	19,664			64,221
Cash and cash equivalents at end of period	$	18,022		$	39,420

Supplemental disclosure of non-cash investing and financing activities:
Accrued capital expenditures	$	85		$	14,859
Issuance of affiliate note payable	—			11,600
Units issued as consideration for acquisitions	31,586			—

See Notes to Condensed Consolidated Financial Statements.

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 September 30, 2018 , 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 19,953,631 PBFX common units constituting an aggregate 44.0% limited partner interest in PBFX and owns all of PBFX’s incentive distribution rights (“IDRs”), with the remaining 56.0% limited partner interest owned by public unitholders as of September 30, 2018 .

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 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, which include product tanks, pipeline connections to the Colonial and Plantation pipeline systems and truck loading facilities (the “Knoxville Terminals”) from Cummins Terminals, Inc. (“Cummins”) for total cash consideration of approximately $58,000 , excluding working capital adjustments (the “Knoxville Terminals Purchase”). This acquisition was accounted for as a business combination under U.S. generally accepted accounting principles (“GAAP”). Refer to Note 3 “Acquisitions” of the Notes to Condensed Consolidated Financial Statements for further discussion regarding the Knoxville Terminals Purchase.

On July 16, 2018, PBFX entered into an agreement with Crown Point International, LLC, formerly known as Axeon Specialty Products LLC, to purchase its wholly-owned subsidiary, CPI Operations LLC (the “East Coast Storage Assets Acquisition”) for total consideration of $107,000 , which is comprised of an initial payment at closing of $75,000 with the balance being payable one year after closing. The East Coast Storage Assets Acquisition closed on October 1, 2018. This acquisition will be accounted for as a business combination under GAAP.

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”). This acquisition was accounted for as a transfer of assets between entities under common control under GAAP. Refer to Note 3 “Acquisitions” of the Notes to Condensed Consolidated Financial Statements for further discussion regarding the Development Assets Acquisition.

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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, 2017 (the “2017 Form 10-K”) for additional information regarding the Acquisitions from PBF and the commercial agreements and amendments to other agreements with related parties executed in connection with these acquisitions, and (ii) Note 3 “Acquisitions” of the Notes to Condensed Consolidated Financial Statements for further discussion regarding the Development Assets Acquisition.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information. Accordingly, they 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 and the results of operations and cash flows of PBFX for the periods presented. The results of operations for the three and nine months ended September 30, 2018 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 revenues independent of other PBF Energy businesses prior to PBFX’s IPO or for assets acquired in the Acquisitions from PBF, prior to the effective dates of each transaction, with the exception of the Paulsboro Lube Oil Terminal. All intercompany accounts and transactions have been eliminated.

Summary of Significant Accounting Policies

Goodwill

Goodwill, related to an acquisition, is calculated as the excess of the purchase price over the fair value of the identifiable net assets and is carried at cost. Goodwill is not amortized for financial reporting purposes; however, it is subject to annual assessment to determine if an impairment of goodwill has occurred. The Partnership performs this impairment review annually as of July 1, or in any period prior to the annual assessment in which the Partnership experiences any circumstances that would indicate an impairment exists, such as disruptions in its business or other significant declines in results. An impairment loss is recorded if the implied fair value of the reporting unit is less than the carrying value. Reporting units are based on a component of the business with discrete financial information that management reviews on a regular basis. The Partnership reviews its reporting units on an annual basis.

Intangibles

The Partnership’s intangibles are comprised of customer relationships, which were acquired in connection with the Knoxville Terminals Acquisition and were recorded at estimated fair value at the date of acquisition.

Intangibles with definite lives are amortized using the straight-line method over their relative estimated useful life, or the period of which they provide an economic benefit. The customer relationships estimated useful life for

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

the Knoxville Terminals Acquisition were determined to be 10 years. Intangible assets are included in “Other non-current assets.”

Recently Adopted Accounting Guidance

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

Recent Accounting Pronouncements

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

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, goodwill impairment Step 2 would be eliminated. This step required a comparison of the implied fair value and 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 annual or, if applicable, interim goodwill impairment assessments beginning

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

after December 15, 2019. Early adoption is permitted. The Partnership is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures.

2. REVENUE

Adoption of ASC 606

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

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

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

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 revenues for each service category by segment for the periods presented:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018*		2017*		2018*		2017*
Transportation and Terminaling Segment
Terminaling	$	31,387	$	32,599	$	87,848	$	95,446
Pipeline	19,886		17,185		57,592		48,762
Other	12,738		10,824		37,375		29,316
Total	64,011		60,608		182,815		173,524
Storage Segment
Storage	6,545		5,587		20,580		16,851
Total	6,545		5,587		20,580		16,851
Total Revenue	$	70,556	$	66,195	$	203,395	$	190,375

* Current and prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

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

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Minimum Volume Commitments

Transportation and Terminaling

The Partnership’s Transportation and Terminaling segment consists of product terminals, pipelines, crude unloading facilities and other facilities capable of handling barges and ships. Certain of these 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 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 revenues 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 revenues in the period when that determination is made. The use or recognition of the credits is recorded as a reduction to deferred revenue.

Storage

The Partnership earns storage revenue under the 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 September 30, 2018 , future fees for MVCs to be received related to noncancelable commercial terminaling, pipeline and storage agreements were as follows:



2018	$	55,218
2019	221,024
2020	222,050
2021	221,759
2022	138,674
Thereafter	483,752
Total MVC payments to be received	$	1,342,477

Leases

Certain of the Partnership’s commercial agreements are considered operating leases. Under these leasing agreements, the Partnership provides access to storage tanks and/or use of throughput assets that convey the right to control the use of an identified asset to the customer. The Partnership accounts for these transactions under ASC 840 “Leases.” These lease arrangements accounted for $31,514 and $91,439 of the Partnership’s revenue for the three and nine months ended September 30, 2018 , respectively, which have been retrospectively adjusted for the Development Assets Acquisition.

Deferred Revenue

The Partnership records deferred revenues when cash payments are received or due in advance of performance, including amounts which are refundable. Deferred revenue was $1,183 and $1,438 as of

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

September 30, 2018 and December 31, 2017, respectively. The decrease in the deferred revenue balance as of September 30, 2018 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.

Significant Judgment and Practical Expedients

For performance obligations, the Partnership determined that customers are able to obtain control of these services over time. The Partnership determined that these performance obligations, which are satisfied over time, are considered a series that generally have the same pattern of transfer to customers. For stand ready performance obligations, the Partnership generally recognizes revenue over time on a straight-line basis under the time-elapsed output method as the Partnership believes this is a reasonable basis in determining how customers obtain the benefits of the Partnership’s services. For non-stand ready performance obligations, the Partnership generally recognizes revenue over time based on actual performance (current period volumes multiplied by the applicable rate per unit of volume) as the Partnership believes this accurately depicts the transfer of benefits to customers.

The Partnership did not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Partnership recognizes revenue at the amount to which the Partnership has the right to invoice for services performed.

3. ACQUISITIONS

Knoxville Terminals Purchase

On April 16, 2018, the Partnership’s wholly-owned subsidiary, PLPT, completed the third-party Knoxville Terminals Purchase. The Knoxville Terminals consist of two refined product terminals located in Knoxville, Tennessee, which include product tanks, pipeline connections to the Colonial and Plantation pipeline systems and truck loading facilities.

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).

PBFX accounted for the Knoxville Terminals Purchase 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. Any excess consideration transferred over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. The fair value allocation is subject to adjustment pending completion of the final purchase valuation which was in process as of September 30, 2018.

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 effective date of the Knoxville Terminals Purchase were as follows:



	Purchase Price
Gross purchase price	$	58,000
Working capital	356
Total consideration	$	58,356



	Fair Value Allocation
Prepaids and other current assets	$	356
Property, plant and equipment	45,768
Intangibles	5,900
Goodwill	6,332
Estimated fair value of net assets acquired	$	58,356

The Partnership’s condensed consolidated financial statements for the three and nine months ended September 30, 2018 include the results of operations of the Knoxville Terminals since April 16, 2018, during which period the Knoxville Terminals contributed affiliate revenue of $385 , third-party revenue of $3,180 and net income of $1,072 . On an unaudited pro forma basis, the revenues 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.



	Nine Months Ended September 30, 2018*		Nine Months Ended September 30, 2017*
	Nine Months Ended September 30, 2018*		Nine Months Ended September 30, 2017*
Pro forma revenues	$	206,925	$	201,076
Pro forma net income attributable to PBF Logistics LP unitholders:	54,093		69,807
Pro forma net income available per limited partner units:
Common units - basic	$	1.26	$	1.68
Common units - diluted	1.26		1.68
Subordinated units - basic and diluted	—		1.60

* Current and prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

Development Assets Acquisition

On July 31, 2018, the Partnership closed the Development Assets Acquisition. Pursuant to the Development Assets Contribution Agreements, the Partnership acquired from PBF LLC all of the issued and outstanding limited liability company interests of TRLC, whose assets consist of the Toledo Rail Products Facility; CLC, whose assets consist of the Chalmette Truck Rack and the Chalmette Rosin Yard; PTC, whose assets consist of the Paulsboro Lube Oil Terminal; and DSLC, whose assets consist of the Delaware Ethanol Storage Facility. In connection with the Development Asset Acquisition, the Partnership entered into various commercial agreements with PBF Holding and assumed a commercial agreement with a third-party. The Development Assets Acquisition closed on July 31, 2018 for total consideration of $31,586 , consisting of 1,494,134 common units issued to PBF LLC.

As the Development Assets Acquisition was considered a transfer of assets between entities under common control, TRLC’s, CLC’s, PTC’s and DSLC’s assets and liabilities were transferred at their historical carrying value, or $12,677 , as of July 31, 2018. The financial information of PBFX contained herein has been retrospectively adjusted to include the historical results of the Development Assets, with the exception of the Delaware Ethanol

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Storage Facility, which is considered an asset purchase, as if the Development Assets were owned by the Partnership for all periods presented. Net loss attributable to the Development Assets Acquisition prior to the effective date was allocated entirely to PBF GP as if only PBF GP had rights to that net loss; therefore, there is no retrospective adjustment to net income per unit.

The following tables present the Partnership’s statement of financial position and results of operations giving retrospective effect to the Development Assets Acquisition as of and for the periods presented.



	December 31, 2017
	PBF Logistics			Development Assets		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	19,664		$	—	$	19,664
Accounts receivable - affiliates	40,817			—		40,817
Accounts receivable	1,423			—		1,423
Prepaids and other current assets	1,793			—		1,793
Total current assets	63,697			—		63,697
Property, plant and equipment, net	673,823			10,665		684,488
Other non-current assets	30			—		30
Total assets	$	737,550		$	10,665	$	748,215

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable - affiliates	$	8,352		$	—	$	8,352
Accounts payable and accrued liabilities	19,794			—		19,794
Deferred revenue	1,438			—		1,438
Total current liabilities	29,584			—		29,584
Long-term debt	548,793			—		548,793
Other long-term liabilities	2,078			—		2,078
Total liabilities	580,455			—		580,455

Commitments and contingencies (Note 9)

Equity:
Net investment - Predecessor	—			10,665		10,665
Common unitholders	(17,544		)	—		(17,544		)
IDR holder - PBF LLC	2,736			—		2,736
Total PBF Logistics LP equity	(14,808		)	10,665		(4,143		)
Noncontrolling interest	171,903			—		171,903
Total equity	157,095			10,665		167,760
Total liabilities and equity	$	737,550		$	10,665	$	748,215

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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



	Three Months Ended September 30, 2018
	PBF Logistics			Development Assets			Consolidated Results

Revenue:
Affiliate	$	66,140		$	—		$	66,140
Third-party	3,889			527			4,416
Total revenue	70,029			527			70,556

Costs and expenses:
Operating and maintenance expenses	20,268			535			20,803
General and administrative expenses	4,725			—			4,725
Depreciation and amortization	7,379			72			7,451
Total costs and expenses	32,372			607			32,979

Income (loss) from operations	37,657			(80		)	37,577

Other expense:
Interest expense, net	(10,070		)	—			(10,070		)
Amortization of loan fees and debt premium	(497		)	—			(497		)
Net income (loss)	27,090			(80		)	27,010
Less: Net loss attributable to Predecessor	—			(80		)	(80		)
Less: Net income attributable to noncontrolling interest	4,725			—			4,725
Net income attributable to the partners	22,365			—			22,365
Less: Net income attributable to the IDR holder	3,641			—			3,641
Net income attributable to PBF Logistics LP unitholders	$	18,724		$	—		$	18,724

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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



	Three Months Ended September 30, 2017
	PBF Logistics			Development Assets			Consolidated Results

Revenue:
Affiliate	$	62,359		$	—		$	62,359
Third-party	3,135			701			3,836
Total revenue	65,494			701			66,195

Costs and expenses:
Operating and maintenance expenses	15,930			1,774			17,704
General and administrative expenses	3,534			—			3,534
Depreciation and amortization	5,610			146			5,756
Total costs and expenses	25,074			1,920			26,994

Income (loss) from operations	40,420			(1,219		)	39,201

Other expense:
Interest expense, net	(7,416		)	—			(7,416		)
Amortization of loan fees and debt premium	(332		)	—			(332		)
Net income (loss)	32,672			(1,219		)	31,453
Less: Net loss attributable to Predecessor	—			(1,219		)	(1,219		)
Less: Net income attributable to noncontrolling interest	3,799			—			3,799
Net income attributable to the partners	28,873			—			28,873
Less: Net income attributable to the IDR holder	2,526			—			2,526
Net income attributable to PBF Logistics LP unitholders	$	26,347		$	—		$	26,347

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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



	Nine Months Ended September 30, 2018
	PBF Logistics			Development Assets			Consolidated Results

Revenue:
Affiliate	$	190,789		$	—		$	190,789
Third-party	10,677			1,929			12,606
Total revenue	201,466			1,929			203,395

Costs and expenses:
Operating and maintenance expenses	57,427			3,980			61,407
General and administrative expenses	15,504			—			15,504
Depreciation and amortization	20,793			392			21,185
Total costs and expenses	93,724			4,372			98,096

Income (loss) from operations	107,742			(2,443		)	105,299

Other expense:
Interest expense, net	(29,684		)	—			(29,684		)
Amortization of loan fees and debt premium	(1,256		)	—			(1,256		)
Net income (loss)	76,802			(2,443		)	74,359
Less: Net loss attributable to Predecessor	—			(2,443		)	(2,443		)
Less: Net income attributable to noncontrolling interest	13,110			—			13,110
Net income attributable to the partners	63,692			—			63,692
Less: Net income attributable to the IDR holder	10,011			—			10,011
Net income attributable to PBF Logistics LP unitholders	$	53,681		$	—		$	53,681

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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



	Nine Months Ended September 30, 2017
	PBF Logistics			Development Assets			Consolidated Results

Revenue:
Affiliate	$	176,916		$	—		$	176,916
Third-party	11,384			2,075			13,459
Total revenue	188,300			2,075			190,375

Costs and expenses:
Operating and maintenance expenses	47,203			5,364			52,567
General and administrative expenses	12,947			—			12,947
Depreciation and amortization	16,672			424			17,096
Total costs and expenses	76,822			5,788			82,610

Income (loss) from operations	111,478			(3,713		)	107,765

Other expense:
Interest expense, net	(22,493		)	—			(22,493		)
Amortization of loan fees and debt premium	(1,125		)	—			(1,125		)
Net income (loss)	87,860			(3,713		)	84,147
Less: Net loss attributable to Predecessor	(150		)	(3,713		)	(3,863		)
Less: Net income attributable to noncontrolling interest	11,218			—			11,218
Net income attributable to the partners	76,792			—			76,792
Less: Net income attributable to the IDR holder	6,319			—			6,319
Net income attributable to PBF Logistics LP unitholders	$	70,473		$	—		$	70,473

Acquisition Expenses

PBFX incurred acquisition related costs of $832 and $1,984 for the three and nine months ended September 30, 2018 , respectively, primarily consisting of consulting and legal expenses related to the Knoxville Terminals Purchase, the Development Assets Acquisition, the East Coast Storage Assets Acquisition and other pending and nonconsummated acquisitions. PBFX incurred acquisition related costs of $28 and $533 for the three and nine months ended September 30, 2017 , respectively, primarily consisting of consulting and legal expenses related to the acquisition by PBFX Operating Company LP (“PBF Op Co”), the Partnership’s wholly owned subsidiary, from PBF LLC of all of the issued and outstanding limited liability company interests of Paulsboro Natural Gas Pipeline Company LLC (the “PNGPC Acquisition”) and the purchase of the Toledo, Ohio refined products terminal assets from Sunoco Logistics Partners L.P. (the “Toledo Products Terminal Acquisition”). These costs are included in “General and administrative expenses.”

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:



	September 30, 2018			December 31, 2017*
Land	$	102,557		$	99,707
Pipelines	334,980			333,609
Terminals and equipment	259,506			211,797
Storage facilities	90,194			90,373
Construction in progress	26,362			4,810
	813,599			740,296
Accumulated depreciation	(76,723		)	(55,808		)
Property, plant and equipment, net	$	736,876		$	684,488

* Prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

Depreciation expense was $20,915 and $17,096 for the nine months ended September 30, 2018 and 2017 , respectively.

5. GOODWILL AND INTANGIBLES

Goodwill

On April 16, 2018, the Partnership’s wholly-owned subsidiary, PLPT, completed the Knoxville Terminals Purchase. As a result of the preliminary purchase price allocation, goodwill was recorded. Refer to Note 3 “Acquisitions” of the Notes to Condensed Consolidated Financial Statements for further discussion regarding the Knoxville Terminals Purchase and the preliminary purchase price allocation.

As of September 30, 2018 , the carrying amount of goodwill was $6,332 , all of which was recorded within the Transportation and Terminaling segment. During the three and nine months ended September 30, 2018 , there have been no changes in the Partnership’s business, or other factors, that would indicate the carrying value of goodwill was impaired.

Intangibles

As a result of the preliminary purchase price allocation of the Knoxville Terminals Purchase, a customer relationship intangible was recorded. Refer to Note 3 “Acquisitions” of the Notes to Condensed Consolidated Financial Statements for further discussion regarding the Knoxville Terminals Purchase and the preliminary purchase price allocation.

As of September 30, 2018 , the Partnership’s net intangible balance consisted of the following:



	September 30, 2018			December 31, 2017
Customer relationships	$	5,900		$	—
Accumulated amortization	(270		)	—
Total intangibles	$	5,630		$	—

Amortization expense was $270 and $0 for the nine months ended September 30, 2018 and 2017 , respectively. The Partnership estimates amortization expense of $590 per year for the next five years.

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

6. DEBT

Total debt was comprised of the following:



	September 30, 2018			December 31, 2017
2023 Notes	$	525,000		$	525,000
Revolving credit facility (a)	50,000			29,700
Total debt outstanding	575,000			554,700
Unamortized debt issuance costs	(10,810		)	(9,281		)
Unamortized 2023 Notes premium	2,962			3,374
Net carrying value of debt	$	567,152		$	548,793

____________________

(a) PBFX had $4,010 outstanding letters of credit and $445,990 available under its Revolving Credit Facility (as defined below) as of September 30, 2018 .

On July 30, 2018, the Partnership entered into a $500,000 amended and restated revolving credit facility (as amended, the “Revolving Credit Facility”) with Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders. The Revolving Credit Facility amends and restates the Partnership’s five -year $360,000 revolving credit facility entered into on May 14, 2014, concurrent with the closing of PBFX’s IPO.

The Revolving Credit Facility is available to fund working capital, acquisitions, distributions and capital expenditures and for other general partnership purposes. The Partnership has the ability to increase the maximum amount of the Revolving Credit Facility by an aggregate amount of up to $250,000 , to a total facility size of $750,000 , subject to receiving increased commitments from lenders or other financial institutions and satisfaction of certain conditions. The Revolving Credit Facility includes a $75,000 sublimit for standby letters of credit and a $25,000 sublimit for swingline loans. Obligations under the Revolving Credit Facility are guaranteed by the Partnership’s restricted subsidiaries, and are secured by a first priority lien on the Partnership’s assets and those of the Partnership’s restricted subsidiaries. The maturity date of the Revolving Credit Facility is July 30, 2023, but may be extended for one year on up to two occasions, subject to certain customary terms and conditions. Borrowings under the Revolving Credit Facility will bear interest either at the Base Rate (as defined in the Revolving Credit Facility) plus an applicable margin ranging from 0.75% to 1.75% , or at LIBOR plus an applicable margin ranging from 1.75% to 2.75% . The applicable margin will vary based upon the Partnership’s Consolidated Total Leverage Ratio (as defined in the Revolving Credit Facility).

The agreement governing the Revolving Credit Facility contains affirmative and negative covenants customary for revolving credit facilities of this nature which, among other things, limit or restrict the Partnership’s ability and the ability of its restricted subsidiaries to incur or guarantee debt, incur liens, make investments, make restricted payments, amend material contracts, engage in certain business activities, engage in mergers, consolidations and other organizational changes, sell, transfer or otherwise dispose of assets, enter into burdensome agreements, or enter into transactions with affiliates on terms which are not at arm’s length.

Additionally, commencing with the Measurement Period (as defined in the Revolving Credit Agreement) which ended on September 30, 2018, the Partnership is required to maintain the following financial ratios, each as defined in the Revolving Credit Agreement: (a) Consolidated Interest Coverage of at least 2.50 to 1.00, (b) Consolidated Total Leverage of not greater than 4.50 to 1.00 and (c) Consolidated Senior Secured Leverage of not greater than 3.50 to 1.00.

The Revolving Credit Agreement contains events of default customary for transactions of their nature, including, but not limited to (and subject to grace periods in certain circumstances), the failure to pay any principal, interest or fees when due, failure to perform or observe any covenant contained in the Revolving Credit Facility or related documentation, any representation or warranty made in the agreements or related documentation being

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

untrue in any material respect when made, default under certain material debt agreements, commencement of bankruptcy or other insolvency proceedings, certain changes in the Partnership’s ownership or the ownership or board composition of PBF GP and material judgments or orders. Upon the occurrence and during the continuation of an event of default under the agreements, the lenders may, among other things, terminate their commitments, declare any outstanding loans to be immediately due and payable and/or exercise remedies against the Partnership and the collateral as may be available to the lenders under the agreements and related documentation or applicable law.

During the nine months ended September 30, 2018 , PBFX paid down $43,700 and subsequently borrowed $64,000 under the Revolving Credit Facility to fund the Knoxville Terminals Purchase and other capital expenditures and working capital requirements. On October 1, 2018, the Partnership borrowed $75,000 to fund the East Coast Storage Assets Acquisition. Refer to Note 12 “Subsequent Events” of the Notes to Condensed Consolidated Financial Statements for further discussion regarding the East Coast Storage Assets Acquisition.

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 $539,494 and $544,118 at September 30, 2018 and December 31, 2017 , 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 approximately $575,000 and $589,494 as of September 30, 2018 and $554,700 and $573,818 as of December 31, 2017 , respectively.

7. EQUITY

PBFX had 25,393,565 common units outstanding held by the public as of September 30, 2018 . PBF LLC owns 19,953,631 of PBFX’s common units constituting an aggregate 44.0% limited partner interest in PBFX as of September 30, 2018 .

Share Activity

PBFX’s partnership agreement, as amended, authorizes PBFX to issue an unlimited number of additional partnership interests for the consideration 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.

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The following table presents changes in PBFX common and subordinated units outstanding:



	Three Months Ended September 30,
	2018	2017
	Common Units	Common Units
Balance at beginning of period	42,073,062	41,890,487
Vesting of phantom units, net of forfeitures	4,250	4,359
New units issued	3,269,884	—
Balance at end of period	45,347,196	41,894,846



	Nine Months Ended September 30,
	2018	2017
	Common Units	Common Units	Subordinated Units - PBF LLC
Balance at beginning of period	41,900,708	25,844,118	15,886,553
Vesting of phantom units, net of forfeitures	176,604	164,175	—
New units issued	3,269,884	—	—
Conversion of subordinated units	—	15,886,553	(15,886,553	)
Balance at end of period	45,347,196	41,894,846	—

On July 16, 2018, the Partnership entered into a common unit purchase agreement with certain funds managed by Tortoise Capital Advisors, L.L.C. providing for the issuance and sale in a registered direct offering (the “Registered Direct Offering”) of an aggregate of 1,775,750 common units for gross proceeds of approximately $35,000 . The Registered Direct Offering closed on July 30, 2018. On July 31, 2018, the Partnership issued 1,494,134 common units, having an aggregate value of $31,586 , to PBF LLC in connection with the Development Assets Acquisition.

Additionally, 217,171 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, 2017 .

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

PBFX’s wholly-owned subsidiary, PBFX Op Co, holds a 50% controlling interest in Torrance Valley Pipeline Company LLC (“TVPC”), with the other 50% interest in TVPC held by TVP Holding Company LLC (“TVP Holding”), a subsidiary of PBF Holding. PBFX Op Co is the sole managing member of TVPC. PBFX, through its ownership of PBFX Op Co, consolidates the financial results of TVPC, and records a noncontrolling interest for the economic interest in TVPC held by TVP Holding. Noncontrolling interest on the condensed consolidated statements of operations includes 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 includes the portion of net assets of TVPC attributable to TVP Holding.

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Equity Activity

The following tables summarize the changes in the carrying amount of the Partnership’s equity during the nine months ended September 30, 2018 and 2017:



	Net Investment			Common Units			IDR Holder			Noncontrolling Interest			Total
Balance at December 31, 2017	$	10,665		$	(17,544	)	$	2,736		$	171,903		$	167,760
Net loss attributable to the Development Assets	(2,443		)	—			—			—			(2,443		)
Contributions to the Development Assets	4,455			—			—			—			4,455
Allocation of the Development Assets acquired to unitholders	(12,677		)	12,677			—			—			—
Quarterly distributions to unitholders (including IDRs)	—			(64,341		)	(9,106		)	—			(73,447		)
Distributions to TVPC members	—			—			—			(16,250		)	(16,250		)
Net income attributable to the partners	—			53,681			10,011			13,110			76,802
Unit-based compensation expense	—			4,549			—			—			4,549
Issuance of common units, net of expenses	—			34,820			—			—			34,820
Other	—			(1,058		)	—			—			(1,058		)
Balance at September 30, 2018	$	—		$	22,784		$	3,641		$	168,763		$	195,188

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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



	Net Investment			Common Units			Subordinated Units - PBF			IDR Holder			Noncontrolling Interest			Total
Balance at December 31, 2016	$	16,750		$	241,275		$	(276,083	)	$	1,266		$	179,882		$	163,090
Net loss attributable to PNGPC	(150		)	—			—			—			—			(150		)
Net loss attributable to the Development Assets	(3,713		)	—			—			—			—			(3,713		)
Sponsor Contributions	9,405			—			—			—			—			9,405
Allocation of PNGPC assets acquired to unitholders	(11,538		)	11,592			(54		)	—			—			—
Distributions to PBF LLC related to the PNGPC Acquisition	—			(11,600		)	—			—			—			(11,600		)
Quarterly distributions to unitholders (including IDRs)	—			(44,108		)	(14,457		)	(5,058		)	—			(63,623		)
Distributions to TVPC members	—			—			—			—			(17,348		)	(17,348		)
Net income attributable to the partners	—			56,310			14,163			6,319			11,218			88,010
Unit-based compensation expense	—			4,515			—			—			—			4,515
Subordinated unit conversion to common units	—			(276,433		)	276,433			—			—			—
Other	—			(4		)	(2		)	(1		)	(1,000		)	(1,007		)
Balance at September 30, 2017	$	10,754		$	(18,453	)	$	—		$	2,526		$	172,752		$	167,579

Cash Distributions

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

During the nine months ended September 30, 2018 , PBFX made distribution payments as follows:



Related Earnings Period:	Q4 2017		Q1 2018		Q2 2018
Distribution date	March 14, 2018		May 30, 2018		August 30, 2018
Record date	February 28, 2018		May 15, 2018		August 15, 2018
Per unit	$	0.4850	$	0.4900	$	0.4950
To public common unitholders	$	11,369	$	11,553	$	12,568
To PBF LLC	11,689		12,000		13,292
Total distribution	$	23,058	$	23,553	$	25,860

The allocation of total quarterly distributions to general and limited partners for the three and nine months ended September 30, 2018 and 2017 is shown in the table below. The Partnership’s distributions are declared subsequent to quarter end (distributions of $0.5000 and $0.4800 per unit declared for the three months ended September 30, 2018 and 2017, respectively, $0.4950 and $0.4700 per unit declared for the three months ended June 30, 2018 and 2017, respectively, and $0.4900 and $0.4600 per unit declared for the three months ended March

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

31, 2018 and 2017, respectively); therefore, the table represents total estimated distributions applicable to the period in which the distributions are earned:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
IDR - PBF LLC	$	3,641	$	2,526	$	10,011	$	6,319
Limited partners’ distributions:
Common	23,028		20,417		66,792		52,687
Subordinated - PBF LLC	—		—		—		7,308
Total distributions	26,669		22,943		76,803		66,314
Total cash distributions ⁽¹⁾	$	26,315	$	22,636	$	75,728	$	65,371

(1) 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 percentage 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 effects of potentially dilutive units of PBFX’s common units that consist of unvested phantom units. There were 8,750 and 145,500 anti-dilutive phantom units for the three and nine months ended September 30, 2018 , respectively, compared to 13,375 and 84,750 anti-dilutive phantom units for the three and nine months ended September 30, 2017 , respectively. Basic and diluted net income per unit applicable to subordinated limited partners are the same because there are no potentially dilutive subordinated units outstanding.

In addition to the common and subordinated units, PBFX has also identified the general partner interest and IDRs as participating securities and uses 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 period. On July 30, 2018, PBFX closed the Registered Direct Offering of an aggregate of 1,775,750 common units for gross proceeds of approximately $35,000 . On July 31, 2018, PBFX funded the $31,586 purchase price for the Development Assets Acquisition through the issuance of 1,494,134 common units to PBF LLC.

On June 1, 2017, following the May 31, 2017 payment of the cash distribution attributable to the second quarter of 2017, the requirements under PBFX’s partnership agreement, as amended, for the conversion of all subordinated units into common units were satisfied and the subordination period for such subordinated units ended. As a result, in the second quarter of 2017, each of the Partnership’s 15,886,553 outstanding subordinated units converted into common units and began participating pro rata with the other common units in distributions of available cash. The conversion did not impact the amount of the cash distribution paid or the total number of the Partnership’s outstanding units representing limited partner interests. The Partnership’s net income was allocated to the limited partners, including the holders of the subordinated units through May 31, 2017, and IDR holders, in accordance with the partnership agreement.

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 holders for that reporting period. Net loss attributable to the Development Assets Acquisition prior to the effective date was allocated entirely to PBF GP as if only PBF GP had rights to that net loss; therefore, there is no retrospective adjustment to net income per unit.

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The following table shows the calculation of earnings less distributions:



	Three Months Ended September 30, 2018
	Limited Partner Common Units			IDRs - PBF LLC		Total
Net income attributable to the partners:
Distributions declared	$	23,028		$	3,641	$	26,669
Earnings less distributions	(4,304		)	—		(4,304		)
Net income attributable to the partners	$	18,724		$	3,641	$	22,365

Weighted-average units outstanding - basic	44,518,365
Weighted-average units outstanding - diluted	44,612,552

Net income per limited partner unit - basic	$	0.42
Net income per limited partner unit - diluted	$	0.42



	Three Months Ended September 30, 2017
	Limited Partner Common Units		IDRs - PBF LLC		Total
Net income attributable to the partners:
Distributions declared	$	20,417	$	2,526	$	22,943
Earnings less distributions	5,930		—		5,930
Net income attributable to the partners	$	26,347	$	2,526	$	28,873

Weighted-average units outstanding - basic	42,127,288
Weighted-average units outstanding - diluted	42,161,008

Net income per limited partner unit - basic	$	0.63
Net income per limited partner unit - diluted	$	0.63



	Nine Months Ended September 30, 2018
	Limited Partner Common Units			IDRs - PBF LLC		Total
Net income attributable to the partners:
Distributions declared	$	66,792		$	10,011	$	76,803
Earnings less distributions	(13,111		)	—		(13,111		)
Net income attributable to the partners	$	53,681		$	10,011	$	63,692

Weighted-average units outstanding - basic	42,965,502
Weighted-average units outstanding - diluted	43,015,817

Net income per limited partner unit - basic	$	1.25
Net income per limited partner unit - diluted	$	1.25

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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



	Nine Months Ended September 30, 2017
	Limited Partner Common Units		Limited Partner Subordinated Units - PBF LLC		IDRs - PBF LLC		Total
Net income attributable to the partners:
Distributions declared	$	52,687	$	7,308	$	6,319	$	66,314
Earnings less distributions	3,623		6,855		—		10,478
Net income attributable to the partners	$	56,310	$	14,163	$	6,319	$	76,792

Weighted-average units outstanding - basic	33,280,957		8,787,068
Weighted-average units outstanding - diluted	33,309,555		8,787,068

Net income per limited partner unit - basic	$	1.69	$	1.61
Net income per limited partner unit - diluted	$	1.69	$	1.61

9. COMMITMENTS AND CONTINGENCIES

Certain of PBFX’s assets are collocated with PBF Holding’s Delaware City Refinery, and are located in Delaware’s coastal zone where certain activities are regulated under the Delaware Coastal Zone Act (the “CZA”). Therefore, determinations regarding the CZA that impact the Delaware City Refinery may potentially adversely impact the Partnership’s assets even if the Partnership is not directly involved. The Delaware City Refinery is appealing a Notice of Penalty Assessment and Secretary’s Order issued in March 2017 (the “2017 Secretary’s Order”), including a $150 fine, alleging violation of a 2013 Secretary’s Order authorizing crude oil shipment by barge (the “2013 Secretary’s Order”). The Delaware Department of Natural Resources and Environmental Control’s (“DNREC”) determined that the Delaware City Refinery had violated the 2013 Secretary’s Order by failing to make timely and full disclosure to DNREC about the nature and extent of certain shipments and had misrepresented the number of shipments that went to other facilities. The Notice of Penalty Assessment and 2017 Secretary’s Order conclude that the 2013 Secretary’s Order was violated by the Delaware City Refinery by shipping crude oil from the Partnership’s Delaware City assets to three locations other than PBF Holding’s Paulsboro Refinery, on 15 days in 2014, making a total of 17 separate barge shipments containing approximately 35,700,000 gallons of crude oil in total. On April 28, 2017, the Delaware City Refinery appealed the Notice of Penalty Assessment and 2017 Secretary’s Order. On March 5, 2018, the Notice of Penalty Assessment was settled by DNREC, the Delaware Attorney General and the Delaware City Refinery for $100 . The Delaware City Refinery made no admissions with respect to the alleged violations and agreed to request a CZA status decision prior to making crude oil shipments to destinations other than Paulsboro. The Delaware City Refinery has paid the penalty. The CZA status decision request is being finalized and will be submitted to the DNREC.

On December 28, 2016, DNREC issued a CZA permit (the “Ethanol Permit”) to the Delaware City Refinery allowing the utilization of existing tanks and existing marine loading equipment at their existing facilities to enable denatured ethanol to be loaded from storage tanks to marine vessels and shipped to offsite facilities. On January 13, 2017, the issuance of the Ethanol Permit was appealed by two environmental groups. On February 27, 2017, the Coastal Zone Industrial Board (the “Coastal Zone Board”) held a public hearing and dismissed the appeal, determining that the appellants did not have standing. The appellants filed an appeal of the Coastal Zone Board’s decision with the Delaware Superior Court (the “Superior Court”) on March 30, 2017. On January 19, 2018, the Superior Court rendered an Opinion regarding the decision of the Coastal Zone Board to dismiss the appeal of the Ethanol Permit for the ethanol project. The Judge determined that the record created by the Coastal Zone Board

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

was insufficient for the Superior Court to make a decision, and therefore remanded the case back to the Coastal Zone Board to address the deficiency in the record. Specifically, the Superior Court directed the Coastal Zone Board to address any evidence concerning whether the appellants’ claimed injuries would be affected by the increased quantity of ethanol shipments. During the hearing before the Coastal Zone Board on standing, one of the appellants’ witnesses made a reference to the flammability of ethanol, without any indication of the significance of flammability/explosivity to specific concerns. Moreover, the appellants did not introduce at the hearing any evidence of the relative flammability of ethanol as compared to other materials shipped to and from the refinery. However, the sole dissenting opinion from the Coastal Zone Board focused on the flammability/explosivity issue, alleging that the appellants’ testimony raised the issue as a distinct basis for potential harms. Once the Coastal Zone Board responds to the remand, it will go back to the Superior Court to complete its analysis and issue a decision.

On October 19, 2017, the Delaware City Refinery received approval from DNREC for the construction and operation of the ethanol marketing project to allow for a combined total loading of up to 10,000 barrels per day, on an annual average basis, of ethanol on to marine vessels at the marine piers and the terminal truck loading rack, subject to certain operational and emissions limitations as well as other conditions. On the same date, Delaware City Logistics Company LLC (“DCLC”) received DNREC approval for the construction of (i) four additional loading arms for each of lanes 4, 10 and 11 for purposes of loading ethanol at its truck loading rack and (ii) a vapor vacuum control system for loading lanes connected to the existing vapor recovery unit located at its terminal in Delaware City. This approval is also subject to certain operational and emission limitations as well as other conditions.

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.

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

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

In connection with its purchase of the four refined product terminals from Plains All American Pipeline, L.P. (“Plains”), the Partnership is responsible for the environmental remediation costs for conditions that existed on the closing date up to a maximum of $250 per year for ten years, with Plains remaining responsible for any and all additional costs above such amounts during such period. The environmental liability of $1,629 recorded as of September 30, 2018 ( $1,923 as of December 31, 2017 ) represents the present value of expected future costs discounted at a rate of 1.83% . At September 30, 2018 , the undiscounted liability is $1,766 and the Partnership expects to make aggregate payments for this liability of $1,250 over the next five years. The current portion of the environmental liability is recorded in “Accounts payable and accrued liabilities” and the non-current portion is recorded in “Other long-term liabilities.”

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

In connection with PBF Holding’s acquisition of the Torrance Refinery and related logistics assets, PBF Holding is responsible for all known and unknown environmental liabilities at each site acquired in connection with the acquisition. The total estimated liability of known environmental obligations associated with the San Joaquin Valley pipeline system, which consists of the M55, M1 and M70 crude pipeline systems including pipeline stations with storage capacity and truck unloading capacity (the “Torrance Valley Pipeline”), was approximately $186 as of September 30, 2018 ( $256 as of December 31, 2017 ). In accordance with the contribution agreement associated with the Partnership’s acquisition of a 50% equity interest in TVPC from PBF LLC (the “TVPC Acquisition”), PBF Holding has indemnified the Partnership for any and all costs associated with environmental remediation for obligations that existed on or before August 31, 2016, including all known or unknown events, which includes the recorded liability of approximately $186 . At September 30, 2018 , the Partnership expects to make the full aggregate payment for this liability within the next five years. PBFX has recorded a receivable from PBF Holding in “Accounts receivable - affiliates” for such anticipated payments related to the known pre-existing Torrance Valley Pipeline environmental obligations for which PBFX is indemnified.

In connection with the purchase of the Toledo, Ohio refined products terminal assets from Sunoco Logistics Partners L.P. (“Sunoco”) by the Partnership’s wholly-owned subsidiary, PLPT, the Partnership did not assume and is currently not aware of any pre-existing environmental obligations. If pre-acquisition environmental obligations are identified, Sunoco is responsible for any liabilities up to $2,000 identified to have occurred since 2002. For liabilities arising prior to 2002, Sunoco is indemnified by the prior owner under an agreement between Sunoco and the prior owner, and the Partnership is entitled to be reimbursed for all amounts paid related to such liabilities on a full pass-through basis.

In connection with the Knoxville Terminals Purchase, the Partnership did not assume, and is currently not aware of, any pre-existing environmental obligations. Additionally, the Partnership and Cummins purchased a ten -year, $30,000 environmental insurance policy against unknown environmental liabilities. For items not covered by the insurance policy, Cummins remains responsible for pre-acquisition environmental obligations up to $5,800 .

10. RELATED PARTY TRANSACTIONS

Commercial Agreements

PBFX currently derives the majority of its revenue from long-term, fee-based, MVC agreements with PBF Holding, supported by 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 (as defined below) and the Services Agreement (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.

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

See the 2017 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 2018. The following are commercial agreements entered into between PBFX and PBF Holding during 2018:



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	2 x 5	125,000 barrels per day (“bpd”)	PBFX or PBF Holding can declare
Knoxville Terminals Agreement- Terminaling Services	4/16/2018	5 years	Evergreen	Various (c)
Knoxville Terminals Agreement- Tank Lease (d)	4/16/2018	5 years	Evergreen	115,334 barrels (e)
Toledo Rail Loading Agreement	7/31/2018	7 years, 5 months	2 x 5	Various (f)
Chalmette Terminal Throughput Agreement	7/31/2018	1 year	Evergreen	N/A
Chalmette Rail Unloading Agreement	7/31/2018	7 years, 5 months	2 x 5	7,600 bpd
DSL Ethanol Throughput Agreement (d)	7/31/2018	7 years, 5 months	2 x 5	5,000 bpd

___________________


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

(b)

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


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


(d)	These commercial agreements with PBF Holding are considered leases.


(e)	Reflects the overall capacity as stipulated by the storage agreement. The storage MVC is subject to the effective operating capacity of each tank, which can be impacted by routine tank maintenance and other factors. PBF Holding is expected to take full shell capacity by the end of Q4 2018.


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

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. This agreement addresses the payment of an annual fee for the provision of various general and administrative services and reimbursement of salary and benefit costs for certain PBF Energy employees. On July 31, 2018, the Partnership entered into the Fifth Amended and Restated Omnibus Agreement (as amended, the “Omnibus Agreement”) in connection with the Development Assets Acquisition, resulting in an increase of the estimated annual fee to $7,000 .

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Additionally, PBFX has entered into an operation and management services and secondment agreement with PBF Holding and certain of its subsidiaries, 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. On July 31, 2018, the Partnership entered into the Sixth Amended and Restated Operation and Management Services and Secondment Agreement (as amended, the “Services Agreement”) in connection with the Development Assets Acquisition, resulting in an increase of the annual fee to $8,587 . The Services Agreement will terminate upon the termination of the Omnibus Agreement, provided that the Partnership may terminate any service on 30-days’ notice.

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 September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Revenue	$	66,140	$	62,359	$	190,789	$	176,916
Operating and maintenance expenses	1,979		1,639		5,327		4,918
General and administrative expenses	1,927		1,890		5,364		5,174

11. SEGMENT INFORMATION

The Partnership’s operations are consolidated into 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 for the consolidated financial statements, as described in Note 2 “Summary of Accounting Policies” of the Notes to Consolidated Financial Statements in the 2017 Form 10-K.

The Partnership’s operating segments are organized into two reportable segments, Transportation and Terminaling and 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.

Revenues are 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 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 segment, whereas assets included in Corporate are principally cash, deposits and other assets that are not associated with operations specific to a reporting segment.

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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



	Three Months Ended September 30, 2018*
	Transportation and Terminaling		Storage		Corporate			Consolidated Total
Total revenue	$	64,011	$	6,545	$	—		$	70,556
Depreciation and amortization expense	6,524		927		—			7,451
Income (loss) from operations	38,599		3,703		(4,725		)	37,577
Interest expense, net and amortization of loan fees and debt premium	—		—		10,567			10,567
Capital expenditures	20,199		757		—			20,956



	Three Months Ended September 30, 2017*
	Transportation and Terminaling		Storage		Corporate			Consolidated Total
Total revenue	$	60,608	$	5,587	$	—		$	66,195
Depreciation and amortization expense	5,135		621		—			5,756
Income (loss) from operations	39,837		2,898		(3,534		)	39,201
Interest expense, net and amortization of loan fees and debt premium	—		—		7,748			7,748
Capital expenditures	9,243		6,293		—			15,536



	Nine Months Ended September 30, 2018*
	Transportation and Terminaling		Storage		Corporate			Consolidated Total
Total revenue	$	182,815	$	20,580	$	—		$	203,395
Depreciation and amortization expense	18,408		2,777		—			21,185
Income (loss) from operations	109,059		11,744		(15,504		)	105,299
Interest expense, net and amortization of loan fees and debt premium	—		—		30,940			30,940
Capital expenditures, including the Knoxville Terminals Purchase	85,782		845		—			86,627

* Current and prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

PBF LOGISTICS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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



	Nine Months Ended September 30, 2017*
	Transportation and Terminaling		Storage		Corporate			Consolidated Total
Total revenue	$	173,524	$	16,851	$	—		$	190,375
Depreciation and amortization expense	15,254		1,842		—			17,096
Income (loss) from operations	111,237		9,475		(12,947		)	107,765
Interest expense, net and amortization of loan fees and debt premium	—		—		23,618			23,618
Capital expenditures, including the Toledo Products Terminal Acquisition	57,255		14,845		—			72,100



	Balance at September 30, 2018
	Transportation and Terminaling		Storage		Corporate		Consolidated Total
Total assets	$	718,461	$	84,620	$	3,769	$	806,850



	Balance at December 31, 2017*
	Transportation and Terminaling		Storage		Corporate		Consolidated Total
Total assets	$	649,975	$	86,760	$	11,480	$	748,215

* Prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

12. SUBSEQUENT EVENTS

Cash distribution

On October 31, 2018, PBF GP’s board of directors announced a cash distribution, based on the results of the third quarter of 2018, of $0.5000 per unit. The distribution is payable on November 30, 2018 to PBFX unitholders of record at the close of business on November 15, 2018.

East Coast Storage Assets Acquisition

On July 16, 2018, PBFX entered into an agreement with Crown Point International, LLC, to purchase its wholly-owned subsidiary, CPI Operations LLC for total consideration of $107,000 , which is comprised of an initial payment at closing of $75,000 with the balance being payable one year after closing. The East Coast Storage Assets Acquisition closed on October 1, 2018.

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

DCLC, Delaware Pipeline Company LLC, Delaware City Terminaling Company LLC, Toledo Terminaling Company LLC, PLPT, PBFX Op Co, TVPC, PNGPC, TRLC, CLC, PTC and DSLC 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, 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 interim financial statements, which are included in its Quarterly Report on Form 10-Q.

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’ investment in its subsidiaries are accounted for under the equity method of accounting.

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



	September 30, 2018
	Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	1,669	$	16,353	$	—	$	—		$	18,022
Accounts receivable - affiliates	1		33,453		—		—			33,454
Accounts receivable	—		3,010		—		—			3,010
Prepaids and other current assets	2,099		1,397		—		—			3,496
Due from related parties	131,120		510,086		—		(641,206		)	—
Total current assets	134,889		564,299		—		(641,206		)	57,982
Property, plant and equipment, net	—		736,876		—		—			736,876
Goodwill	—		6,332		—		—			6,332
Other non-current assets	—		5,660		—		—			5,660
Investment in subsidiaries	986,768		—		—		(986,768		)	—
Total assets	$	1,121,657	$	1,313,167	$	—	$	(1,627,974	)	$	806,850

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable - affiliates	$	754	$	16,905	$	—	$	—		$	17,659
Accounts payable and accrued liabilities	17,240		6,816		—		—			24,056
Deferred revenue	—		1,183		—		—			1,183
Due to related parties	510,086		131,120		—		(641,206		)	—
Total current liabilities	528,080		156,024		—		(641,206		)	42,898
Long-term debt	567,152		—		—		—			567,152
Other long-term liabilities	—		1,612		—		—			1,612
Total liabilities	1,095,232		157,636		—		(641,206		)	611,662

Commitments and contingencies ( Note 9 )

Equity:
Net investment - Predecessor	—		986,768		—		(986,768		)	—
Common unitholders	22,784		—		—		—			22,784
IDR holder - PBF LLC	3,641		—		—		—			3,641
Total PBF Logistics LP equity	26,425		986,768		—		(986,768		)	26,425
Noncontrolling interest	—		168,763		—		—			168,763
Total equity	26,425		1,155,531		—		(986,768		)	195,188
Total liabilities and equity	$	1,121,657	$	1,313,167	$	—	$	(1,627,974	)	$	806,850

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



	December 31, 2017*
	Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	10,909		$	8,755	$	—	$	—		$	19,664
Accounts receivable - affiliates	1			40,816		—		—			40,817
Accounts receivable	—			1,423		—		—			1,423
Prepaids and other current assets	571			1,222		—		—			1,793
Due from related parties	64,162			388,737		—		(452,899		)	—
Total current assets	75,643			440,953		—		(452,899		)	63,697
Property, plant and equipment, net	—			684,488		—		—			684,488
Other non-current assets	—			30		—		—			30
Investment in subsidiaries	866,922			—		—		(866,922		)	—
Total assets	$	942,565		$	1,125,471	$	—	$	(1,319,821	)	$	748,215

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable - affiliates	$	2,022		$	6,330	$	—	$	—		$	8,352
Accounts payable and accrued liabilities	7,156			12,638		—		—			19,794
Deferred revenue	—			1,438		—		—			1,438
Due to related parties	388,737			64,162		—		(452,899		)	—
Total current liabilities	397,915			84,568		—		(452,899		)	29,584
Long-term debt	548,793			—		—		—			548,793
Other long-term liabilities	—			2,078		—		—			2,078
Total liabilities	946,708			86,646		—		(452,899		)	580,455

Commitments and contingencies (Note 9)

Equity:
Net investment - Predecessor	10,665			866,922		—		(866,922		)	10,665
Common unitholders	(17,544		)	—		—		—			(17,544		)
IDR holder - PBF LLC	2,736			—		—		—			2,736
Total PBF Logistics LP equity	(4,143		)	866,922		—		(866,922		)	(4,143		)
Noncontrolling interest	—			171,903		—		—			171,903
Total equity	(4,143		)	1,038,825		—		(866,922		)	167,760
Total liabilities and equity	$	942,565		$	1,125,471	$	—	$	(1,319,821	)	$	748,215

* Prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

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 STATEMENT OF OPERATIONS



	Three Months Ended September 30, 2018*
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
Revenue:
Affiliate	$	—		$	66,140		$	—	$	—		$	66,140
Third-party	—			4,416			—		—			4,416
Total revenue	—			70,556			—		—			70,556

Costs and expenses:
Operating and maintenance expenses	—			20,803			—		—			20,803
General and administrative expenses	4,725			—			—		—			4,725
Depreciation and amortization	—			7,451			—		—			7,451
Total costs and expenses	4,725			28,254			—		—			32,979

Income (loss) from operations	(4,725		)	42,302			—		—			37,577

Other income (expense):
Equity in earnings of subsidiaries	42,302			—			—		(42,302		)	—
Interest expense, net	(10,070		)	—			—		—			(10,070		)
Amortization of loan fees and debt premium	(497		)	—			—		—			(497		)
Net income	27,010			42,302			—		(42,302		)	27,010
Less: Net loss attributable to Predecessor	—			(80		)	—		—			(80		)
Less: Net income attributable to noncontrolling interest	—			4,725			—		—			4,725
Net income attributable to the partners	27,010			37,657			—		(42,302		)	22,365
Less: Net income attributable to the IDR holder	3,641			—			—		—			3,641
Net income attributable to PBF Logistics LP unitholders	$	23,369		$	37,657		$	—	$	(42,302	)	$	18,724

* Current-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

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 STATEMENT OF OPERATIONS



	Three Months Ended September 30, 2017*
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
Revenue:
Affiliate	$	—		$	62,359		$	—	$	—		$	62,359
Third-party	—			3,836			—		—			3,836
Total revenue	—			66,195			—		—			66,195

Costs and expenses:
Operating and maintenance expenses	—			17,704			—		—			17,704
General and administrative expenses	3,534			—			—		—			3,534
Depreciation and amortization	—			5,756			—		—			5,756
Total costs and expenses	3,534			23,460			—		—			26,994

Income (loss) from operations	(3,534		)	42,735			—		—			39,201

Other income (expense):
Equity in earnings of subsidiaries	42,735			—			—		(42,735		)	—
Interest expense, net	(7,416		)	—			—		—			(7,416		)
Amortization of loan fees	(332		)	—			—		—			(332		)
Net income	31,453			42,735			—		(42,735		)	31,453
Less: Net loss attributable to Predecessor	—			(1,219		)	—		—			(1,219		)
Less: Net income attributable to noncontrolling interest	—			3,799			—		—			3,799
Net income attributable to the partners	31,453			40,155			—		(42,735		)	28,873
Less: Net income attributable to the IDR holder	2,526			—			—		—			2,526
Net income attributable to PBF Logistics LP unitholders	$	28,927		$	40,155		$	—	$	(42,735	)	$	26,347

* Prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

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 STATEMENT OF OPERATIONS



	Nine Months Ended September 30, 2018*
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
Revenue:
Affiliate	$	—		$	190,789		$	—	$	—		$	190,789
Third-party	—			12,606			—		—			12,606
Total revenue	—			203,395			—		—			203,395

Costs and expenses:
Operating and maintenance expenses	—			61,407			—		—			61,407
General and administrative expenses	15,504			—			—		—			15,504
Depreciation and amortization	—			21,185			—		—			21,185
Total costs and expenses	15,504			82,592			—		—			98,096

Income (loss) from operations	(15,504		)	120,803			—		—			105,299

Other income (expense):
Equity in earnings of subsidiaries	120,803			—			—		(120,803		)	—
Interest expense, net	(29,684		)	—			—		—			(29,684		)
Amortization of loan fees and debt premium	(1,256		)	—			—		—			(1,256		)
Net income	74,359			120,803			—		(120,803		)	74,359
Less: Net loss attributable to Predecessor	—			(2,443		)	—		—			(2,443		)
Less: Net income attributable to noncontrolling interest	—			13,110			—		—			13,110
Net income attributable to the partners	74,359			110,136			—		(120,803		)	63,692
Less: Net income attributable to the IDR holder	10,011			—			—		—			10,011
Net income attributable to PBF Logistics LP unitholders	$	64,348		$	110,136		$	—	$	(120,803	)	$	53,681

* Current-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

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 STATEMENT OF OPERATIONS



	Nine Months Ended September 30, 2017*
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
Revenue:
Affiliate	$	—		$	176,916		$	—	$	—		$	176,916
Third-party	—			13,459			—		—			13,459
Total revenue	—			190,375			—		—			190,375

Costs and expenses:
Operating and maintenance expenses	—			52,567			—		—			52,567
General and administrative expenses	12,947			—			—		—			12,947
Depreciation and amortization	—			17,096			—		—			17,096
Total costs and expenses	12,947			69,663			—		—			82,610

Income (loss) from operations	(12,947		)	120,712			—		—			107,765

Other income (expense):
Equity in earnings of subsidiaries	120,712			—			—		(120,712		)	—
Interest expense, net	(22,493		)	—			—		—			(22,493		)
Amortization of loan fees	(1,125		)	—			—		—			(1,125		)
Net income	84,147			120,712			—		(120,712		)	84,147
Less: Net loss attributable to Predecessor	—			(3,863		)	—		—			(3,863		)
Less: Net income attributable to noncontrolling interest	—			11,218			—		—			11,218
Net income attributable to the partners	84,147			113,357			—		(120,712		)	76,792
Less: Net income attributable to the IDR holder	6,319			—			—		—			6,319
Net income attributable to PBF Logistics LP unitholders	$	77,828		$	113,357		$	—	$	(120,712	)	$	70,473

* Prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

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 STATEMENT OF CASH FLOWS



	Nine Months Ended September 30, 2018*
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
Cash flows from operating activities:
Net income	$	74,359		$	120,803		$	—	$	(120,803	)	$	74,359
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	—			21,185			—		—			21,185
Amortization of loan fees and debt premium	1,256			—			—		—			1,256
Unit-based compensation expense	4,549			—			—		—			4,549
Equity in earnings of subsidiaries	(120,803		)	—			—		120,803			—
Changes in operating assets and liabilities:
Accounts receivable - affiliates	—			7,363			—		—			7,363
Accounts receivable	—			(1,587		)	—		—			(1,587		)
Prepaids and other current assets	(1,528		)	(175		)	—		—			(1,703		)
Accounts payable - affiliates	(1,268		)	10,575			—		—			9,307
Accounts payable and accrued liabilities	9,108			(4,484		)	—		—			4,624
Amounts due to (from) related parties	54,391			(54,391		)	—		—			—
Deferred revenue	—			(255		)	—		—			(255		)
Other assets and liabilities	(1,049		)	(467		)	—		—			(1,516		)
Net cash provided by operating activities	19,015			98,567			—		—			117,582

Cash flows from investing activities:
Knoxville Terminals Purchase	—			(58,000		)	—		—			(58,000		)
Expenditures for property, plant and equipment	—			(28,627		)	—		—			(28,627		)
Investment in subsidiaries	(7,707		)	—			—		7,707			—
Net cash used in investing activities	$	(7,707	)	$	(86,627	)	$	—	$	7,707		$	(86,627	)

* Current-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

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 STATEMENT OF CASH FLOWS (Continued)



	Nine Months Ended September 30, 2018*
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
Cash flows from financing activities:
Net proceeds from issuance of common units	$	34,820		$	—		$	—	$	—		$	34,820
Distributions to unitholders	(72,471		)	—			—		—			(72,471		)
Contribution from parent	—			11,908			—		(7,707		)	4,201
Distributions to TVPC members	—			(16,250		)	—		—			(16,250		)
Proceeds from revolving credit facility	64,000			—			—		—			64,000
Repayment of revolving credit facility	(43,700		)	—			—		—			(43,700		)
Deferred financing costs	(3,197		)	—			—		—			(3,197		)
Net cash used in financing activities	(20,548		)	(4,342		)	—		(7,707		)	(32,597		)

Net change in cash and cash equivalents	(9,240		)	7,598			—		—			(1,642		)
Cash and cash equivalents at beginning of year	10,909			8,755			—		—			19,664
Cash and cash equivalents at end of period	$	1,669		$	16,353		$	—	$	—		$	18,022

* Current-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

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 STATEMENT OF CASH FLOWS



	Nine Months Ended September 30, 2017*
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
Cash flows from operating activities:
Net income	$	84,147		$	120,712		$	—	$	(120,712	)	$	84,147
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	—			17,096			—		—			17,096
Amortization of loan fees	1,125			—			—		—			1,125
Unit-based compensation expense	4,515			—			—		—			4,515
Equity in earnings of subsidiaries	(120,712		)	—			—		120,712			—
Changes in operating assets and liabilities:
Accounts receivable - affiliates	124			694			—		—			818
Accounts receivable	—			3,188			—		—			3,188
Prepaids and other current assets	(599		)	270			—		—			(329		)
Accounts payable - affiliates	1,392			(892		)	—		—			500
Accounts payable and accrued liabilities	5,817			1,888			—		—			7,705
Amounts due to (from) related parties	64,063			(64,063		)	—		—			—
Deferred revenue	—			39			—		—			39
Other assets and liabilities	(7		)	(1,121		)	—		—			(1,128		)
Net cash provided by operating activities	39,865			77,811			—		—			117,676

Cash flows from investing activities:
Toledo Products Terminal Acquisition	—			(10,097		)	—		—			(10,097		)
Expenditures for property, plant and equipment	—			(62,003		)	—		—			(62,003		)
Purchase of marketable securities	(75,036		)	—			—		—			(75,036		)
Maturities of marketable securities	115,060			—			—		—			115,060
Investment in subsidiaries	(10,550		)	—			—		10,550			—
Net cash provided by (used in) investing activities	$	29,474		$	(72,100	)	$	—	$	10,550		$	(32,076	)

* Prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

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 STATEMENT OF CASH FLOWS (Continued)



	Nine Months Ended September 30, 2017*
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total
Cash flows from financing activities:
Distributions to unitholders	$	(62,794	)	$	—		$	—	$	—		$	(62,794	)
Distributions to TVPC members	—			(17,348		)	—		—			(17,348		)
Contribution from parent	—			19,955			—		(10,550		)	9,405
Repayment of term loan	(39,664		)	—			—		—			(39,664		)
Net cash (used in) provided by financing activities	(102,458		)	2,607			—		(10,550		)	(110,401		)

Net change in cash and cash equivalents	(33,119		)	8,318			—		—			(24,801		)
Cash and cash equivalents at beginning of year	52,133			12,088			—		—			64,221
Cash and cash equivalents at end of period	$	19,014		$	20,406		$	—	$	—		$	39,420

* Prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

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

You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Form 10-Q. The following information and such unaudited condensed consolidated financial statements should also be read in conjunction with the audited consolidated financial statements and related notes, together with our discussion and analysis of financial condition and results of operations in our 2017 Form 10-K. This discussion contains forward-looking statements that are based on management’s current expectations, estimates and projections about our business and operations. The cautionary statements made in this Form 10-Q should be read as applying to all related forward-looking statements wherever they appear in this Form 10-Q. 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. You should read “Risk Factors” in our 2017 Form 10-K and “Cautionary Note Regarding Forward-Looking Statements” in this Form 10-Q. In this Item 2, all references to “we,” “us,” “our,” the “Partnership,” “PBFX” or similar terms for periods prior to the Acquisitions from PBF (as defined below) prior to the effective date of each acquisition refer to the Predecessor. For periods subsequent to the effective dates of each of the Acquisitions from PBF, these terms refer to the Partnership and its subsidiaries.

Overview

PBFX is a fee-based, growth-oriented, Delaware master limited partnership formed in February 2013 by subsidiaries of PBF Energy to own or lease, operate, develop and acquire crude oil and refined petroleum products terminals, pipelines, storage facilities and similar logistics assets. PBF GP is our general partner and is wholly-owned by PBF LLC. PBF Energy is the sole managing member of PBF LLC and, as of September 30, 2018 , owned 99.0% of the total economic interest in PBF LLC. PBF LLC owns 19,953,631 of PBFX’s common units constituting an aggregate 44.0% limited partner interest in PBFX and owns all of PBFX’s IDRs, with the remaining 56.0% limited partner interest owned by public unitholders.

The Partnership includes the assets, liabilities and results of operations of certain crude oil, refined products, natural gas and intermediates transportation, terminaling and storage assets, which include assets previously operated and owned by certain of PBF Holding’s currently and previously held subsidiaries, which were acquired in a series of acquisitions from 2014 through 2018.

2018 Business Developments

Knoxville Terminals Purchase

On April 16, 2018, our wholly-owned subsidiary, PBF Logistics Products Terminals LLC (“PLPT”), completed the purchase of two refined product terminals located in Knoxville, Tennessee, which include product tanks with a total shell capacity of approximately 0.5 million barrels, pipeline connections to the Colonial and Plantation pipeline systems and two truck loading facilities with nine loading bays (the “Knoxville Terminals”) from Cummins Terminals, Inc. (“Cummins”) for total cash consideration of approximately $58.0 million, excluding working capital adjustments (the “Knoxville Terminals Purchase”). The transaction was financed through a combination of cash on hand and borrowings under our Revolving Credit Facility, as defined below.

East Coast Storage Assets Acquisition

On July 16, 2018, we entered into an agreement with Crown Point International, LLC, formerly known as Axeon Specialty Products LLC, to purchase its wholly-owned subsidiary, CPI Operations LLC (the “East Coast Storage Assets Acquisition”) for total consideration of $107.0 million, which is comprised of an initial payment at closing of $75.0 million with the balance being payable one year after closing. The East Coast Storage Assets Acquisition closed on October 1, 2018. The transaction was financed through a combination of cash on hand and borrowings under our Revolving Credit Facility.

Registered Direct Offering

On July 16, 2018, we entered into a common unit purchase agreement with certain funds managed by Tortoise Capital Advisors, L.L.C. providing for the issuance and sale in a registered direct offering (the “Registered Direct Offering”) of an aggregate of 1,775,750 common units for gross proceeds of approximately $35.0 million. The Registered Direct Offering closed on July 30, 2018.

Development Assets Acquisition

On July 16, 2018, we entered into four contribution agreements with PBF LLC pursuant to which PBF Energy contributed to us certain of its subsidiaries (the “Development Assets Contribution Agreements”). Pursuant to the Development Assets Contribution Agreements, we 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 an unloading and loading 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”). Total consideration for the acquisition of the Development Assets was approximately $31.6 million, consisting of 1,494,134 common units issued to PBF LLC (the “Development Assets Acquisition”). The Development Assets Acquisition closed on July 31, 2018 and was accounted for as a transfer of assets between entities under common control under U.S. generally accepted accounting principles (“GAAP”). Refer to Note 3 “Acquisitions” of the Notes to Condensed Consolidated Financial Statements included in this Form 10-Q for further discussion regarding the Development Assets Acquisition.

Revolving Credit Facility

On July 30, 2018, we entered into a $500.0 million amended and restated revolving credit facility (as amended the “Revolving Credit Facility”) with Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders. The Revolving Credit Facility replaced our five-year $360.0 million revolving credit facility entered into in connection with the closing of our IPO. Among other things, the Revolving Credit Facility increased the maximum commitment available to us from $360.0 million to $500.0 million and extended the maturity date to July 2023. The commitment fees on the unused portion, the interest rate on advances and the fees for letters of credit are consistent with our original five-year, $360.0 million revolving credit facility. The Revolving Credit Facility contains representations, warranties and covenants by us, as well as customary events of default and indemnification obligations that are consistent with, or more favorable to us, than those in the original facility.

Principles of Combination and Consolidation and Basis of Presentation

Our Predecessor generally did not historically operate its assets for the purpose of generating revenues independent of other PBF Energy businesses, with the exception of the Paulsboro Lube Oil Terminal. In connection with, and subsequent to, our initial public offering (“IPO”), we have acquired certain assets from PBF LLC (collectively referred to as the “Contributed Assets”). The 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”). Upon the closing of our IPO and the Acquisitions from PBF, we entered into commercial and service agreements with subsidiaries of PBF Energy under which we operate our assets for the purpose of generating fee-based revenues. We receive, handle and transfer crude oil, refined products and natural gas from sources located throughout the United States and Canada and store crude oil, refined products and intermediates for PBF Energy in support of its refineries. In addition, we generate third-party revenue from certain of our assets, including the Knoxville Terminals

subsequent to our acquisition in April 2018 and the Paulsboro Lube Oil Terminal, which also generated revenue for our Predecessor prior to our acquisition.

Agreements with PBF Energy Entities

Commercial Agreements

We currently derive the majority of our revenue from long-term, fee-based, minimum volume commitment (“MVC”) agreements with PBF Holding, supported by contractual fee escalations for inflation adjustments and certain increases in operating costs. We believe the terms and conditions under these agreements, as well as the Omnibus Agreement (as defined below) and the Services Agreement (as defined below) each with 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 2017 Form 10-K for a more complete description of our commercial agreements with PBF Holding, including those identified as leases, which were entered into prior to 2018. The following are commercial agreements we entered into with PBF Holding during 2018:



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	2 x 5	125,000 barrels per day (“bpd”)	PBFX or PBF Holding can declare
Knoxville Terminals Agreement- Terminaling Services	4/16/2018	5 years	Evergreen	Various (c)
Knoxville Terminals Agreement- Tank Lease (d)	4/16/2018	5 years	Evergreen	115,334 barrels (e)
Toledo Rail Loading Agreement	7/31/2018	7 years, 5 months	2 x 5	Various (f)
Chalmette Terminal Throughput Agreement	7/31/2018	1 year	Evergreen	N/A
Chalmette Rail Unloading Agreement	7/31/2018	7 years, 5 months	2 x 5	7,600 bpd
DSL Ethanol Throughput Agreement (d)	7/31/2018	7 years, 5 months	2 x 5	5,000 bpd

___________________


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

(b)

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


(c)	The minimum throughput revenue commitment is $0.9 million for year one, $1.8 million for year two and $2.7 million for year three and thereafter.


(d)	These commercial agreements with PBF Holding are considered leases.


(e)	Reflects the overall capacity as stipulated by the storage agreement. The storage MVC is subject to the effective operating capacity of each tank, which can be impacted by routine tank maintenance and other factors. PBF Holding is expected to take full shell capacity by the end of Q4 2018.


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

Other Agreements

In addition to the commercial agreements described above, we have 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. This agreement addresses the payment of an annual fee for the provision of various general and administrative services and reimbursement of salary and benefit costs for certain PBF Energy employees. On July 31, 2018, we entered into the Fifth Amended and Restated Omnibus Agreement (as amended, the “Omnibus Agreement”) in connection with the Development Assets Acquisition, resulting in an increase to the estimated annual fee to $7.0 million.

Additionally, we have entered into an operation and management services and secondment agreement with PBF Holding and certain of its subsidiaries, pursuant to which PBF Holding and its subsidiaries provide us with the personnel necessary for us to perform our obligations under our commercial agreements. We reimburse 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. On July 31, 2018, we entered into the Sixth Amended and Restated Operation and Management Services and Secondment Agreement (as amended, the “Services Agreement”) in connection with the Development Assets Acquisition, resulting in an increase of the annual fee to $8.6 million. The Services Agreement will terminate upon the termination of the Omnibus Agreement, provided that we may terminate any service on 30-days’ notice.

Factors Affecting the Comparability of Our Financial Results

Our results of operations may not be comparable to our historical results of operations for the reasons described below:

Revenue. Our reported logistics assets revenues are fee-based and a majority are subject to contractual MVCs. These fees are indexed for inflation, generally on an annual basis, in accordance with either the Federal Energy Regulatory Commission indexing methodology, the U.S. Producer Price Index or the U.S. Consumer Price Index for All Urban Consumers.

Revenues reported by us prior to the acquisition of Paulsboro Natural Gas Pipeline Company LLC (“PNGPC”) in February 2017 did not include revenue under the services agreement associated with the new 24” interstate natural gas pipeline we built to replace the existing PNGPC pipeline servicing PBF Holding’s Paulsboro Refinery (the “Paulsboro Natural Gas Pipeline”), which commenced in August 2017 (the “Paulsboro Natural Gas Pipeline Services Agreement”). On November 1, 2017, our wholly-owned subsidiary, PBFX Operating Company LLC (“PBFX Op Co”), began providing storage services to PBF Holding at PBF Holding’s Chalmette Refinery (the “Chalmette Storage Tank”) under a ten-year storage service agreement (the “Chalmette Storage Agreement”). Revenues reported by us prior to the Development Assets Acquisition in July 2018 did not include revenue under the services agreements associated with the Development Assets, with the exception of the Paulsboro Lube Oil Terminal.

In addition, the Amended and Restated Rail Agreements, which effectively combine the MVCs associated with our Delaware City rail unloading assets with a blended throughput rate and a directly billed ancillary fee, were executed effective as of January 1, 2018.

Financing. Historically, we have financed our operations through proceeds generated by equity offerings, internally generated cash flows, and borrowings under our Revolving Credit Facility to satisfy capital expenditure

requirements. During March 2017, we fully repaid the remaining outstanding balance of our three-year $300.0 million term loan facility with Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders (the “Term Loan”). On October 6, 2017, we issued $175.0 million in aggregate principal amount of 6.875% Senior Notes due 2023 (the “new 2023 Notes,” and along with the $350.0 million in aggregate principal amount of 6.875% Senior Notes due 2023 issued in May 2015, the “2023 Notes”). During the nine months ended September 30, 2018 , we had net borrowings of $20.3 million to fund the Knoxville Terminals Purchase and other capital expenditures and working capital requirements. On October 1, 2018, the Partnership borrowed $75.0 million to fund the East Coast Storage Assets Acquisition.

Third-party Transactions. On April 17, 2017, our wholly-owned subsidiary, PLPT, acquired the Toledo, Ohio refined products terminal assets (the “Toledo Products Terminal”) from Sunoco Logistics Partners L.P. (the “Toledo Products Terminal Acquisition”). On April 16, 2018, we, through our wholly-owned subsidiary, PLPT, acquired the Knoxville Terminals from Cummins and subsequently entered into the Knoxville Terminals Agreement.

As a result, our results may not be comparable due to additional revenue, operating and maintenance expenses and general and administrative expenses associated with the third-party transactions listed above.

Other Factors That Will Significantly Affect Our Results

Supply and Demand for Crude Oil, Refined Products and Natural Gas. We generate revenue by charging fees for receiving, handling, transferring, storing and throughputting crude oil, refined products and natural gas. The majority of our revenues are derived from fee-based commercial agreements with subsidiaries of PBF Energy with initial terms ranging from approximately seven to ten years and including MVCs, which enhance the stability of our cash flows. The volume of crude oil, refined products and natural gas that is throughput or stored depends substantially on PBF Energy’s refining margins. Refining margins are dependent mostly upon the price of crude oil or other refinery feedstocks and the price of refined products.

Factors driving the prices of petroleum-based commodities include supply and demand in crude oil, gasoline and other refined products. Supply and demand for these products depend on numerous factors outside of our control, including changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, logistics constraints, availability of imports, marketing of competitive fuels, crude oil price differentials and government regulation. Please read “Risk Factors” included in “Item 1A.” of our 2017 Form 10-K.

Acquisition and Organic Growth Opportunities. We may acquire additional logistics assets from PBF Energy or third parties. Under our Omnibus Agreement, subject to certain exceptions, we have a right of first offer on certain logistics assets owned by PBF Energy to the extent PBF Energy decides to sell, transfer or otherwise dispose of any of those assets. We also have a right of first offer to acquire additional logistics assets that PBF Energy may construct or acquire in the future. Our commercial agreements provide us with options to purchase certain assets at PBF Holding’s refineries related to our business in the event PBF Energy permanently shuts down PBF Holding’s refineries. In addition, our commercial agreements provide us with the right to use certain assets at PBF Holding’s refineries in the event of a temporary shutdown. Furthermore, we may pursue strategic asset acquisitions from third parties or organic growth projects to the extent such acquisitions or projects complement our or PBF Energy’s existing asset base or provide attractive potential returns. We believe that we are well-positioned to acquire logistics assets from PBF Energy and third parties should such opportunities arise, and identifying and executing acquisitions and organic growth projects is a key part of our strategy. However, if we do not complete acquisitions or organic growth projects on economically acceptable terms, our future growth will be limited, and the acquisitions or projects we do complete may reduce, rather than increase, our cash available for distribution. These acquisitions and organic growth projects could also affect the comparability of our results from period to period. We expect to fund future growth capital expenditures primarily from a combination of cash-on-hand, borrowings under our Revolving Credit Facility and the issuance of additional equity or debt securities. To the extent we issue additional units to fund

future acquisitions or expansion capital expenditures, the payments of distributions on those additional units may increase the risk that we will be unable to maintain or increase our per unit distribution level.

Third-Party Business. As of September 30, 2018 , PBF Holding accounts for the substantial majority of our revenues and we continue to expect the majority of our revenue for the foreseeable future will be derived from operations supporting PBF Energy’s refineries. We are examining further diversification of our customer base by potentially developing additional third-party throughput volumes in our existing system and continuing to expand our asset portfolio to service third-party customers. Unless we are successful in attracting additional third-party customers, our ability to increase volumes will be dependent on PBF Holding, which has no obligation under our commercial agreements to supply our facilities with additional volumes in excess of its MVCs. If we are unable to increase throughput or storage volumes, future growth may be limited.

Noncontrolling Interest. As a result of PBFX Op Co’s acquisition from PBF LLC of 50% of the issued and outstanding limited liability company interests of Torrance Valley Pipeline Company LLC (“TVPC”) (the “TVPC Acquisition”), PBFX Op Co became the managing member of TVPC and fully consolidates TVPC. With respect to the consolidation of TVPC, we record a noncontrolling interest for the remaining 50% economic interest in TVPC held by TVP Holding Company LLC (“TVP Holding”). Noncontrolling interest on the condensed consolidated statements of operations includes 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 includes the portion of net assets of TVPC attributable to TVP Holding.

How We Evaluate Our Operations

Our management uses a variety of financial and operating metrics to analyze our business and segment performance. These metrics are significant factors in assessing our operating results and profitability and include but are not limited to volumes, including terminal and pipeline throughput and storage capacity; operating and maintenance expenses; and EBITDA, EBITDA attributable to PBFX and distributable cash flow. We define EBITDA, EBITDA attributable to PBFX and distributable cash flow below.

Volumes. The amount of revenue we generate primarily depends on the volumes of crude oil, refined products and natural gas that we throughput at our terminaling and pipeline operations and our available storage capacity. These volumes are primarily affected by the supply of and demand for crude oil and refined products in the markets served directly or indirectly by our assets. Although PBF Energy has committed to minimum volumes under the commercial agreements described above, our results of operations will be impacted by:


•	PBF Energy’s utilization of our assets in excess of the MVCs;


•	our ability to identify and execute accretive acquisitions and organic expansion projects, and capture PBF Energy’s incremental volumes or third-party volumes; and


•	our ability to increase throughput volumes at our facilities and provide additional ancillary services at those terminals and pipelines.

Operating and Maintenance Expenses. Our management seeks to maximize the profitability of our operations by effectively managing operating and maintenance expenses. These expenses are comprised primarily of labor expenses, outside contractor expenses, utility costs, insurance premiums, repairs and maintenance expenses and related property taxes. These expenses generally remain relatively stable across broad ranges of throughput volumes but can fluctuate from period to period depending on the mix of activities performed during that period and the timing of these expenses. We will seek to manage our maintenance expenditures on our assets by scheduling maintenance over time to avoid significant variability in our maintenance expenditures and to minimize their impact on our cash flow.

EBITDA, EBITDA attributable to PBFX and Distributable Cash Flow. We define EBITDA as net income (loss) before net interest expense, income tax expense, depreciation and amortization expense. We define EBITDA

attributable to PBFX as net income (loss) attributable to PBFX before net interest expense, income tax expense, depreciation and amortization expense attributable to PBFX, which excludes the results of Acquisitions from PBF prior to the effective dates of such transactions. We define distributable cash flow as EBITDA attributable to PBFX plus non-cash unit-based compensation expense, less net cash paid for interest, maintenance capital expenditures and income taxes. Distributable cash flow will not reflect changes in working capital balances. EBITDA, EBITDA attributable to PBFX and distributable cash flow are not presentations made in accordance with U.S. generally accepted accounting principles (“GAAP”).

EBITDA, EBITDA attributable to PBFX and distributable cash flow are non-GAAP supplemental financial measures that management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:


•	our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of EBITDA, financing methods;


•	the ability of our assets to generate sufficient cash flow to make distributions to our unitholders;


•	our ability to incur and service debt and fund capital expenditures; and


•	the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

We believe that the presentation of EBITDA and EBITDA attributable to PBFX provides useful information to investors in assessing our financial condition and results of operations. We believe that the presentation of distributable cash flow provides useful information to investors as it is a widely accepted financial indicator used by investors to compare partnership performance and provides investors with another perspective of the operating performance of our assets and the cash our business is generating. EBITDA, EBITDA attributable to PBFX and distributable cash flow should not be considered alternatives to net income, operating income, cash from operations or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA, EBITDA attributable to PBFX and distributable cash flow have important limitations as analytical tools because they exclude some but not all items that affect net income and net cash provided by operating activities. Additionally, because EBITDA, EBITDA attributable to PBFX and distributable cash flow may be defined differently by other companies in our industry, our definition of such matters may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. EBITDA, EBITDA attributable to PBFX and distributable cash flow are reconciled to net income and net cash provided by operating activities in “—Results of Operations” below.

Results of Operations

A discussion and analysis of the factors contributing to our results of operations is presented below. The financial statements, together with the following information, are intended to provide investors with a reasonable basis for assessing our historical operations, but should not serve as the only criteria for predicting our future performance.

Combined Overview. The following tables summarize our results of operations and financial data for the three and nine months ended September 30, 2018 and 2017 . The following data should be read in conjunction with our Condensed Consolidated Financial Statements and the Notes thereto included in “Item 1. Financial Statements.”



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018*			2017*			2018*			2017*
	(In thousands)
Revenue:
Affiliate	$	66,140		$	62,359		$	190,789		$	176,916
Third-Party	4,416			3,836			12,606			13,459
Total revenue	70,556			66,195			203,395			190,375

Costs and expenses:
Operating and maintenance expenses	20,803			17,704			61,407			52,567
General and administrative expenses	4,725			3,534			15,504			12,947
Depreciation and amortization	7,451			5,756			21,185			17,096
Total costs and expenses	32,979			26,994			98,096			82,610

Income from operations	37,577			39,201			105,299			107,765

Other expense:
Interest expense, net	(10,070		)	(7,416		)	(29,684		)	(22,493		)
Amortization of loan fees and debt premium	(497		)	(332		)	(1,256		)	(1,125		)
Net income	27,010			31,453			74,359			84,147
Less: Net loss attributable to Predecessor	(80		)	(1,219		)	(2,443		)	(3,863		)
Less: Net income attributable to noncontrolling interest	4,725			3,799			13,110			11,218
Net income attributable to the partners	22,365			28,873			63,692			76,792
Less: Net income attributable to the IDR holder	3,641			2,526			10,011			6,319
Net income attributable to PBF Logistics LP unitholders	$	18,724		$	26,347		$	53,681		$	70,473

Other Data:
EBITDA attributable to PBFX	$	38,934		$	40,873		$	111,321		$	112,894
Distributable cash flow	28,545			32,293			82,891			91,430
Capital expenditures, including acquisitions	20,956			15,536			86,627			72,100

* Current and prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

Reconciliation of Non-GAAP Financial Measures

As described in “How We Evaluate Our Operations,” our management uses EBITDA, EBITDA attributable to PBFX and distributable cash flow to analyze our performance. The following table presents a reconciliation of EBITDA, EBITDA attributable to PBFX and distributable cash flow to net income, the most directly comparable GAAP financial measure of operating performance on a historical basis, for the periods indicated.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018*			2017*			2018*			2017*
	(In thousands)
Net income	$	27,010		$	31,453		$	74,359		$	84,147
Interest expense, net	10,070			7,416			29,684			22,493
Amortization of loan fees and debt premium	497			332			1,256			1,125
Depreciation and amortization	7,451			5,756			21,185			17,096
EBITDA	45,028			44,957			126,484			124,861
Less: Predecessor EBITDA	(8		)	(1,073		)	(2,051		)	(3,329		)
Less: Noncontrolling interest EBITDA	6,102			5,157			17,214			15,296
EBITDA attributable to PBFX	38,934			40,873			111,321			112,894
Non-cash unit-based compensation expense	1,052			807			4,549			4,515
Cash interest	(10,112		)	(8,006		)	(29,741		)	(23,622		)
Maintenance capital expenditures attributable to PBFX	(1,329		)	(1,381		)	(3,238		)	(2,357		)
Distributable cash flow	$	28,545		$	32,293		$	82,891		$	91,430

* Current and prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

The following table presents a reconciliation of EBITDA, EBITDA attributable to PBFX and distributable cash flow to net cash provided by operating activities, the most directly comparable GAAP financial measure of liquidity on a historical basis, for the periods indicated.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018*			2017*			2018*			2017*
	(In thousands)
Net cash provided by operating activities:	$	52,255		$	29,239		$	117,582		$	117,676
Change in operating assets and liabilities	(16,245		)	9,109			(16,233		)	(10,793		)
Interest expense, net	10,070			7,416			29,684			22,493
Non-cash unit-based compensation expense	(1,052		)	(807		)	(4,549		)	(4,515		)
EBITDA	45,028			44,957			126,484			124,861
Less: Predecessor EBITDA	(8		)	(1,073		)	(2,051		)	(3,329		)
Less: Noncontrolling interest EBITDA	6,102			5,157			17,214			15,296
EBITDA attributable to PBFX	38,934			40,873			111,321			112,894
Non-cash unit-based compensation expense	1,052			807			4,549			4,515
Cash interest	(10,112		)	(8,006		)	(29,741		)	(23,622		)
Maintenance capital expenditures attributable to PBFX	(1,329		)	(1,381		)	(3,238		)	(2,357		)
Distributable cash flow	$	28,545		$	32,293		$	82,891		$	91,430

* Current and prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

The following table presents a reconciliation of net income attributable to noncontrolling interest and noncontrolling interest EBITDA for informational purposes.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(In thousands)
Net income attributable to noncontrolling interest	$	4,725	$	3,799	$	13,110	$	11,218
Depreciation and amortization related to noncontrolling interest*	1,377		1,358		4,104		4,078
Noncontrolling interest EBITDA	$	6,102	$	5,157	$	17,214	$	15,296

* Represents 50% of depreciation and amortization for TVPC for the three and nine months ended September 30, 2018 and 2017.

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

Summary. Our net income for the three months ended September 30, 2018 decreased approximately $4.4 million to $27.0 million from $31.5 million for the three months ended September 30, 2017 . The decrease in net income was primarily due to the following:


•	an increase in operating and maintenance expenses of approximately $3.1 million , or 17.5% , as a result of increased utilities expenses within our Transportation and Terminaling segment, higher maintenance and materials expenses and expenses related to the Knoxville Terminals subsequent to the Knoxville Terminals Purchase;


•	an increase in general and administrative expenses of approximately $1.2 million , or 33.7% , as a result of higher acquisition related costs and higher unit-based compensation expense;


•	an increase in depreciation and amortization expenses of approximately $1.7 million , or 29.4% , related to the timing of acquisitions and new assets being placed in service;


•	an increase in interest expense, net of approximately $2.7 million , or 35.8% , attributable to the interest costs associated with the new 2023 Notes, partially offset by lower borrowings under our Revolving Credit Facility;

partially offset by the following:


•	an increase in total revenue of approximately $4.4 million , or 6.6% , primarily attributable to operations of recently acquired or constructed assets and inflation rate adjustments implemented in accordance with certain of our commercial agreements (the “Inflation Rate Increase”), partially offset by decreases in throughput fees resulting from the Amended and Restated Rail Agreements.

EBITDA attributable to PBFX for the three months ended September 30, 2018 decreased approximately $1.9 million to $38.9 million from $40.9 million for the three months ended September 30, 2017 due to the factors noted above, excluding the impact of depreciation, interest and noncontrolling interest.

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

Summary. Our net income for the nine months ended September 30, 2018 decreased approximately $9.8 million to $74.4 million from $84.1 million for the nine months ended September 30, 2017 . The decrease in net income was primarily due to the following:


•	an increase in operating and maintenance expenses of approximately $8.8 million , or 16.8% , as a result of increased utilities expenses within our Transportation and Terminaling segment, higher maintenance and materials expenses and expenses related to operations of recently acquired or constructed assets;


•	an increase in general and administrative expenses of approximately $2.6 million , or 19.7% , as a result of higher acquisition related costs, higher audit and tax-related fees and higher outside services expenses;


•	an increase in depreciation and amortization expenses of approximately $4.1 million , or 23.9% , related to the timing of acquisitions and new assets being placed in service;


•	an increase in interest expense, net of approximately $7.2 million , or 32.0% , attributable to the interest costs associated with the new 2023 Notes, partially offset by lower borrowings under our Revolving Credit Facility;

partially offset by the following:


•	an increase in total revenue of approximately $13.0 million , or 6.8% , primarily attributable to operations of recently acquired or constructed assets and the Inflation Rate Increase, partially offset by decreases in throughput fees resulting from the Amended and Restated Rail Agreements.

EBITDA attributable to PBFX for the nine months ended September 30, 2018 decreased approximately $1.6 million to $111.3 million from $112.9 million for the nine months ended September 30, 2017 due to the factors noted above, excluding the impact of depreciation, interest and noncontrolling interest.

Segment Information

Our operations are consolidated into operating segments, which are strategic business units that offer different services in various geographical locations. We review operating segments in two reportable segments: (i) Transportation and Terminaling; and (ii) Storage. Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. Management measures the operating performance of each of its reportable segments based on the segment operating income. Segment operating income is defined as net revenue less operating expenses and depreciation and amortization. General and administrative expenses and interest expenses not included in the Transportation and Terminaling and Storage segments are included in Corporate. Segment reporting is further discussed in Note 11 “Segment Information” in our Notes to Condensed Consolidated Financial Statements included in “Item 1. Financial Statements.”

Transportation and Terminaling Segment

The following table and discussion is an explanation of our results of operations of the Transportation and Terminaling segment for the three and nine months ended September 30, 2018 and 2017 :



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018*		2017*		2018*		2017*
	(In thousands)
Revenue:
Affiliate	$	59,595	$	56,772	$	170,209	$	160,065
Third-Party	4,416		3,836		12,606		13,459
Total revenue	64,011		60,608		182,815		173,524

Costs and expenses:
Operating and maintenance expenses	18,888		15,636		55,348		47,033
Depreciation and amortization	6,524		5,135		18,408		15,254
Total costs and expenses	25,412		20,771		73,756		62,287
Transportation and Terminaling Segment Operating Income	$	38,599	$	39,837	$	109,059	$	111,237

Key Operating Information
Transportation and Terminaling Segment
Terminals
Total throughput (barrels per day) ⁽¹⁾	299,757		196,985		290,076		202,896
Lease tank capacity (average lease capacity barrels per month)	1,713,988		1,922,453		1,970,347		2,141,027
Pipelines
Total throughput (barrels per day) ⁽¹⁾	166,275		137,262		162,027		134,951
Lease tank capacity (average lease capacity barrels per month)	1,548,747		1,273,634		1,553,509		1,132,124

* Current and prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

(1) Calculated as the sum of the average throughput per day for each asset group for the period presented.

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

Revenue. Revenue increased approximately $3.4 million , or 5.6% , to $64.0 million for the three months ended September 30, 2018 compared to $60.6 million for the three months ended September 30, 2017 . The increase in revenue was primarily attributable to operations of recently acquired or constructed assets, increased throughput

in excess of MVC levels at certain of our assets and the Inflation Rate Increase, partially offset by decreases in throughput fees resulting from the Amended and Restated Rail Agreements.

Operating and maintenance expenses. Operating and maintenance expenses increased approximately $3.3 million , or 20.8% , to $18.9 million for the three months ended September 30, 2018 compared to $15.6 million for the three months ended September 30, 2017 . The increase in operating and maintenance expenses was primarily attributable to operations of recently acquired or constructed assets, higher utilities expenses related to increased throughput volumes on our pipeline assets and higher maintenance and materials expenses.

Depreciation and amortization. Depreciation and amortization expense increased approximately $1.4 million , or 27.0% , to $6.5 million for the three months ended September 30, 2018 compared to $5.1 million for the three months ended September 30, 2017 . The increase in depreciation and amortization expense was primarily attributable to the timing of the Knoxville Terminals Purchase, as well as new assets being placed in service including the Paulsboro Natural Gas Pipeline.

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

Revenue. Revenue increased approximately $9.3 million , or 5.4% , to $182.8 million for the nine months ended September 30, 2018 compared to $173.5 million for the nine months ended September 30, 2017 . The increase in revenue was primarily attributable to operations of recently acquired or constructed assets, increased throughput in excess of MVC levels at certain of our assets and the Inflation Rate Increase, partially offset by decreases in throughput fees resulting from the Amended and Restated Rail Agreements.

Operating and maintenance expenses. Operating and maintenance expenses increased approximately $8.3 million , or 17.7% , to $55.3 million for the nine months ended September 30, 2018 compared to $47.0 million for the nine months ended September 30, 2017 . The increase in operating and maintenance expenses was primarily attributable to operations of recently acquired or constructed assets, higher utilities expenses related to increased throughput volumes on our pipeline assets and higher maintenance and materials expenses.

Depreciation and amortization. Depreciation and amortization expense increased approximately $3.2 million , or 20.7% , to $18.4 million for the nine months ended September 30, 2018 compared to $15.3 million for the nine months ended September 30, 2017 . The increase in depreciation and amortization expense was primarily attributable to the timing of the Knoxville Terminals Purchase, as well as new assets being placed in service including the Paulsboro Natural Gas Pipeline.

Storage Segment

The following table and discussion is an explanation of our results of operations of the Storage segment for the three and nine months ended September 30, 2018 and 2017 :



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(In thousands)
Revenue:
Affiliate	$	6,545	$	5,587	$	20,580	$	16,851
Third-Party	—		—		—		—
Total revenue	6,545		5,587		20,580		16,851

Costs and expenses:
Operating and maintenance expenses	1,915		2,068		6,059		5,534
Depreciation and amortization	927		621		2,777		1,842
Total costs and expenses	2,842		2,689		8,836		7,376
Storage Segment Operating Income	$	3,703	$	2,898	$	11,744	$	9,475

Key Operating Information
Storage Segment
Storage capacity reserved (average shell capacity barrels per month) ⁽¹⁾	4,138,709		3,709,693		4,343,379		3,729,789

(1) Storage capacity is based on tanks in service and average shell capacity available during the period.

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

Revenue. Revenue increased approximately $1.0 million , or 17.1% , to $6.5 million for the three months ended September 30, 2018 compared to $5.6 million for the three months ended September 30, 2017 . The increase in revenue was primarily attributable to the Chalmette Storage Agreement commencing in November 2017, higher available storage capacity and the Inflation Rate Increase.

Operating and maintenance expenses. Operating and maintenance expenses decreased approximately $0.2 million , or 7.4% , to $1.9 million for the three months ended September 30, 2018 compared to $2.1 million for the three months ended September 30, 2017 . The decrease in operating and maintenance expenses was primarily attributable to lower maintenance expense, partially offset by expenses associated with the Chalmette Storage Tank.

Depreciation and amortization. Depreciation and amortization expense increased approximately $0.3 million , or 49.3% , to $0.9 million for the three months ended September 30, 2018 compared to $0.6 million for the three months ended September 30, 2017 . The increase in depreciation and amortization expense was primarily attributable to the Chalmette Storage Tank commencing service in November 2017.

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

Revenue. Revenue increased approximately $3.7 million , or 22.1% , to $20.6 million for the nine months ended September 30, 2018 compared to $16.9 million for the nine months ended September 30, 2017 . The increase in revenue was primarily attributable to the Chalmette Storage Agreement commencing in November 2017, higher available storage capacity and the Inflation Rate Increase.

Operating and maintenance expenses. Operating and maintenance expenses increased approximately $0.5 million , or 9.5% , to $6.1 million for the nine months ended September 30, 2018 compared to $5.5 million for the nine months ended September 30, 2017 . The increase in operating and maintenance expenses was primarily attributable to higher maintenance activity, as well as expenses associated with the Chalmette Storage Tank.

Depreciation and amortization. Depreciation and amortization expense increased approximately $0.9 million , or 50.8% , to $2.8 million for the nine months ended September 30, 2018 compared to $1.8 million for the nine months ended September 30, 2017 . The increase in depreciation and amortization expense was primarily attributable to the Chalmette Storage Tank commencing service in November 2017.

Liquidity and Capital Resources

We expect our ongoing sources of liquidity to include cash generated from operations, reimbursement by PBF Energy for certain capital expenditures, borrowings under our Revolving Credit Facility, and issuances of additional debt and equity securities. We believe that cash generated from these sources will be sufficient to meet our short-term working capital requirements, long-term capital expenditure requirements and minimum quarterly cash distributions.

We have paid, and intend to continue to pay, a quarterly distribution of at least $0.30 per unit per quarter, or $1.20 per unit on an annualized basis, which equates to approximately $13.8 million per quarter, or approximately $55.2 million per year, based on the number of common units and associated IDRs outstanding as of September 30, 2018 . We do not have a legal obligation to pay this distribution.

During the nine months ended September 30, 2018 , we made cash distribution payments as follows (in thousands except per unit data):



Related Earnings Period:	Q4 2017		Q1 2018		Q2 2018
Distribution date	March 14, 2018		May 30, 2018		August 30, 2018
Record date	February 28, 2018		May 15, 2018		August 15, 2018
Per unit	$	0.4850	$	0.4900	$	0.4950
To public common unitholders	$	11,369	$	11,553	$	12,568
To PBF LLC	11,689		12,000		13,292
Total distribution	$	23,058	$	23,553	$	25,860

Credit Facilities

On July 30, 2018, we entered into the Revolving Credit Facility, which increased the maximum commitment available to us from $360.0 million to $500.0 million and extended the maturity date to July 2023. The Partnership has the ability to further increase the maximum availability by an additional $250.0 million, to a total facility size of $750.0 million, subject to receiving increased commitments from lenders or other financial institutions and satisfaction of certain conditions. The Revolving Credit Facility is available to fund working capital, acquisitions, distributions and capital expenditures and for other general partnership purposes. Obligations under the Revolving Credit Facility are guaranteed by its restricted subsidiaries and are secured by a first priority lien on the Partnership’s assets and those of the Partnership’s restricted subsidiaries other than excluded assets and a guaranty of collection from PBF LLC. See Note 6 “Debt” in our Notes to Condensed Consolidated Financial Statements included in “Item 1. Financial Statements” for further information regarding the Revolving Credit Facility. We are in compliance with our covenants under the Revolving Credit Facility as of September 30, 2018 .

During the nine months ended September 30, 2018, we utilized our Revolving Credit Facility to fund the Knoxville Terminals Purchase and other capital expenditures and working capital requirements. On October 1, 2018, the Partnership borrowed $75.0 million to fund the East Coast Storage Assets Acquisition.

Our 2023 Notes have an aggregate principal amount of $525.0 million with interest payable semi-annually on May 15 and November 15. The 2023 Notes mature on May 15, 2023. The 2023 Notes contain customary terms, events of default and covenants for an issuer of non-investment grade debt securities. These covenants include limitations or restrictions on us and our restricted subsidiaries’ ability to, among other things, make distributions. These covenants are subject to a number of important limitations and exceptions. As of September 30, 2018 , we are in compliance with all covenants under the 2023 Notes.

The new 2023 Notes included a registration rights arrangement whereby we agreed, no later than 365 days after the date of the original issuance of the new 2023 Notes, to file a registration statement with the SEC and use commercially reasonable efforts to consummate an offer to exchange the new 2023 Notes for an issue of registered notes with terms substantially identical to the notes. This registration statement was declared effective on April 2, 2018, and the exchange was finalized in May 2018.

Cash Flows

The following table sets forth our cash flows for the periods indicated:



	Nine Months Ended September 30,
	2018*			2017*
	(In thousands)
Net cash provided by operating activities	$	117,582		$	117,676
Net cash used in investing activities	(86,627		)	(32,076		)
Net cash used in financing activities	(32,597		)	(110,401		)
Net change in cash and cash equivalents	$	(1,642	)	$	(24,801	)

* Current and prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

Cash Flows from Operating Activities

Net cash provided by operating activities decreased approximately $0.1 million to $117.6 million for the nine months ended September 30, 2018 compared to $117.7 million for the nine months ended September 30, 2017 . The decrease in net cash provided by operating activities was primarily the result of lower net income and non-cash charges relating to depreciation and amortization, amortization of loan fees and debt premium and unit-based compensation of approximately $101.3 million for the nine months ended September 30, 2018 , compared to approximately $106.9 million for the nine months ended September 30, 2017 , offset in part by an increase in the net changes in operating assets and liabilities of approximately $5.4 million primarily driven by the timing of collection of accounts receivables and liability payments.

Cash Flows from Investing Activities

Net cash used in investing activities increased approximately $54.6 million to $86.6 million for the nine months ended September 30, 2018 compared to net cash used in investing activities of $32.1 million for the nine months ended September 30, 2017 . The increase in net cash used in investing activities was primarily due to the Knoxville Terminals Purchase of $58.0 million and a decrease in net sales and maturities of marketable securities of $40.0 million , partially offset by the Toledo Products Terminal Acquisition for $10.1 million in April 2017 and a decrease in capital expenditures of approximately $33.4 million primarily related to the construction of the Paulsboro Natural Gas Pipeline and the Chalmette Storage Tank in 2017.

Cash Flows from Financing Activities

Net cash used in financing activities decreased approximately $77.8 million to $32.6 million for the nine months ended September 30, 2018 compared to $110.4 million for the nine months ended September 30, 2017 . The cash outflows for the nine months ended September 30, 2018 were primarily driven by distributions to

unitholders of $72.5 million , distributions to TVPC members of $16.3 million and deferred financing costs of $3.2 million , partially offset by net proceeds from issuance of common units of $34.8 million , net borrowings from our Revolving Credit Facility of $20.3 million and a contribution from PBF LLC of $4.2 million . Net cash used in financing activities for the nine months ended September 30, 2017 consisted of distributions to unitholders of $62.8 million , repayment of our Term Loan of $39.7 million and distributions to TVPC members of $17.3 million , partially offset by a contribution from PBF LLC of $9.4 million related to the pre-acquisition activities of PNGPC.

Capital Expenditures

Our capital requirements have consisted of and are expected to continue to consist of maintenance capital expenditures, expansion capital expenditures and regulatory capital expenditures. Maintenance capital expenditures are expenditures (including expenditures for the addition or improvement to, or the replacement of, our capital assets, and for the acquisition of existing, or the construction or development of new, capital assets) made to maintain our long-term operating income or operating capacity. Examples of maintenance capital expenditures are expenditures for the refurbishment and replacement of terminals and to maintain equipment reliability, integrity and safety. Expansion capital expenditures are expenditures incurred for acquisitions or capital improvements that we expect will increase our operating income or operating capacity over the long term. Examples of expansion capital expenditures include the acquisition of equipment and the construction, development or acquisition of unloading equipment or other equipment at our facilities or additional throughput or storage capacity to the extent such capital expenditures are expected to expand our operating capacity or increase our operating income. Regulatory capital expenditures are expenditures made to attain or maintain compliance with regulatory standards. Examples of regulatory capital expenditures are expenditures incurred to address environmental laws or regulations.

Capital expenditures for the nine months ended September 30, 2018 and 2017 were as follows:



	Nine Months Ended September 30,
	2018*		2017*
	(In thousands)
Expansion ⁽¹⁾	$	82,908	$	69,555
Regulatory	318		—
Maintenance	3,401		2,545
Total capital expenditures	$	86,627	$	72,100

* Current and prior-period financial information has been retrospectively adjusted for the Development Assets Acquisition.

(1) Expansion capital expenditures include our acquisitions for the periods presented.

We currently expect to spend an additional aggregate of between approximately $20.0 million and $24.0 million for the remainder of 2018 for capital expenditures (inclusive of those related to the Knoxville Terminals and the Development Assets), of which between approximately $8.0 million and $12.0 million relate to maintenance or regulatory capital expenditures. We currently expect to spend an additional aggregate of between approximately $1.0 million and $2.0 million in 2018 for projects associated with our recently closed East Coast Storage Assets Acquisition. We anticipate the forecasted capital expenditures will be funded primarily with cash from operations and borrowings under our Revolving Credit Facility as needed.

Under the Omnibus Agreement, PBF Energy has agreed to reimburse us for any costs up to $20.0 million per event (net of any insurance recoveries) that we incur for repairs required due to the failure of any Contributed Asset to operate in substantially the same manner and condition as such asset was operating prior to the closing of our IPO and the Acquisitions from PBF during the first five years after the closing of our IPO and the Acquisitions from PBF, and any matters related thereto.

balance being payable one year after closing. The East Coast Storage Assets Acquisition closed on October 1, 2018. The initial payment made at closing for this acquisition was financed through a combination of cash on hand, including the proceeds from the Registered Direct Offering, and borrowings under our Revolving Credit Facility.

On July 16, 2018, we entered into the Development Assets Contribution Agreements pursuant to which PBF Energy agreed to contribute to us certain of its subsidiaries, whose assets consist of the Development Assets. The Development Assets Acquisition closed on July 31, 2018 for total consideration of $31.6 million consisting of 1,494,134 common units of PBFX issued to PBF LLC.

Contractual Obligations

With the exception of activity under the Revolving Credit Facility, including borrowings to fund the Knoxville Terminals Purchase, East Coast Storage Assets Acquisition and other capital expenditures and working capital requirements, there have been no significant changes in our contractual obligations since those reported in our 2017 Form 10-K. Refer to Note 6 “Debt” and Note 12 “Subsequent Events” in our Notes to Condensed Consolidated Financial Statements included in “Item 1. Financial Statements” for additional information regarding our debt obligations and subsequent events.

Off-Balance Sheet Arrangements

We have not entered into any transactions, agreements or other contractual arrangements that would result in off-balance sheet liabilities, other than outstanding letters of credit in the amount of approximately $4.0 million and operating leases.

Environmental and Other Matters

Environmental Regulation

Our operations are subject to extensive and frequently changing federal, state and local laws, regulations and ordinances relating to the protection of the environment. Among other things, these laws and regulations govern the emission or discharge of pollutants into or onto the land, air and water, the handling and disposal of solid and hazardous wastes and the remediation of contamination. As with the industry generally, compliance with existing and anticipated environmental laws and regulations increases our overall cost of business, including our capital costs to develop, maintain, operate and upgrade equipment and facilities. While these laws and regulations affect our regulatory capital expenditures and net income, we believe they do not necessarily affect our competitive position, as the operations of our competitors are similarly affected. We believe our facilities are in substantial compliance with applicable environmental laws and regulations. However, these laws and regulations are subject to changes, or to changes in the interpretation of such laws and regulations, by regulatory authorities, and continued and future compliance with such laws and regulations may require us to incur significant expenditures. Additionally, violation of environmental laws, regulations and permits can result in the imposition of significant administrative, civil and criminal penalties, injunctions limiting our operations, investigatory or remedial liabilities or construction bans or delays in the development of additional facilities or equipment. Furthermore, a release of hydrocarbons or hazardous substances into the environment could, to the extent the event is not insured, subject us to substantial expenses, including costs to comply with applicable laws and regulations and to resolve claims by third parties for personal injury or property damage, or by the U.S. federal government or state governments for natural resources damages. These impacts could directly and indirectly affect our business and have an adverse impact on our financial position, results of operations and liquidity. We cannot currently determine the amounts of such future impacts.

Environmental Liabilities

Contamination resulting from spills of crude oil or petroleum products is not unusual within the petroleum terminaling or transportation industries. Historic spills at truck and rail racks, and terminals as a result of past operations have resulted in contamination of the environment, including soils and groundwater.

Pursuant to the contribution agreements entered into in connection with our IPO and the Acquisitions from PBF, PBF Energy has agreed to indemnify us for certain known and unknown environmental liabilities that are based on conditions in existence at our Predecessor’s properties and associated with the ownership or operation of our assets and arising from the conditions that existed prior to the closings of our IPO and the Acquisitions from PBF. In addition, we have agreed to indemnify PBF Energy for certain events and conditions associated with the ownership or operation of our assets that occur after the closings of our IPO and the Acquisitions from PBF, and for environmental liabilities related to our assets to the extent PBF Energy is not required to indemnify us for such liabilities or if the environmental liability is the result of the negligence, willful misconduct or criminal conduct of PBF Energy or its employees, including those seconded to us. As a result, we may incur the type of expenses described above in the future, which may be substantial.

As of September 30, 2018 , we have recorded a total liability related to environmental remediation costs of approximately $1.8 million related to existing environmental liabilities. Refer to Note 9 “Commitments and Contingencies” in our Notes to Condensed Consolidated Financial Statements included in “Item 1. Financial Statements” for additional information.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices. Because we do not generally own the crude oil, refined products or natural gas that is distributed through our facilities, and because all of our commercial agreements with PBF Energy require PBF Energy to bear the risk of any material volume loss relating to the services we provide, we have minimal direct exposure to risks associated with fluctuating commodity prices.

We experience modest volume gains and losses, which we sometimes refer to as imbalances, within our assets as a result of variances in tank storage meter readings and volume fluctuations within certain of our terminals. We use a year-to-date weighted-average market price to value our assets and liabilities related to product imbalances. For the three and nine months ended September 30, 2018 , the impact from our imbalances was not material to our results. In practice, we expect to settle positive refined product imbalances at the end of each year by selling excess volumes at current market prices. We may be required to purchase refined product volumes in the open market to make up negative imbalances, or settle through cash payments.

Debt that we incur under our Revolving Credit Facility bears interest at a variable rate and exposes us to interest rate risk. At September 30, 2018 , we had $50.0 million outstanding in variable interest debt. A 1.0% change in the interest rate associated with the borrowings outstanding under this facility would result in a $3.5 million change in our interest expense, assuming we were to borrow all $500.0 million available under our Revolving Credit Facility.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain a system of disclosure controls and procedures that is designed to provide reasonable assurance that information which is required to be disclosed is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to management in a timely manner. Under the supervision and with the participation of our management, including

our principal executive officer and our principal financial officer, we have evaluated the effectiveness of our system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of September 30, 2018 . Based on that evaluation, our principal executive officer and our principal financial officer have concluded that our disclosure controls and procedures are effective as of September 30, 2018 .

Changes in Internal Control Over Financial Reporting

On April 16, 2018, our wholly-owned subsidiary, PLPT, completed the Knoxville Terminals Purchase, which consisted of the Knoxville Terminals. We are in the process of integrating the Knoxville Terminals’ operations, including internal controls over financial reporting. There have been no other changes in our internal controls over financial reporting during the three months ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Although from time to time we may be involved in litigation and claims arising out of our operations in the normal course of business, we do not believe that we are a party to any litigation that will have a material adverse impact on our financial condition, results of operations or statements of cash flows. We are not aware of any material legal or governmental proceedings against us, or contemplated to be brought against us.

Item 1A. Risk Factors

There have been no significant changes from the risk factors previously disclosed in “Item 1A. Risk Factors” of our 2017 Form 10-K.

Item 6. Exhibits

The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this Form 10-Q and such Exhibit Index is incorporated herein by reference.

EXHIBIT INDEX



Exhibit Number		Description
2.1		Purchase and Sale Agreement dated July 16, 2018, among Crown Point International LLC, as Seller, PBF Logistics LP, as Purchaser and, CPI Operations LLC, for the limited purposes set forth therein (incorporated by reference herein to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K (File No. 001-36446) filed on July 20, 2018).
4.1*		Sixth Supplemental Indenture dated as of September 11, 2018, among DCR Storage and Loading LLC, Chalmette Logistics Company LLC, Toledo Rail Logistics Company LLC, Paulsboro Terminaling Company LLC, PBF Logistics LP, PBF Logistics Finance Corporation, and Deutsche Bank Trust Company Americas, as trustee.
10.1		Amended and Restated Revolving Credit Agreement, dated July 30, 2018 (incorporated by reference herein to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36446) filed on August 2, 2018).
10.2*		Fifth Amended and Restated Omnibus Agreement dated as of July 31, 2018, among PBF Holding Company LLC, PBF Energy Company LLC, PBF Logistics GP LLC and PBF Logistics LP.
10.3*		Sixth Amended and Restated Operation and Management Services and Secondment Agreement dated as of July 31, 2018, among PBF Holding Company LLC, Delaware City Refining Company LLC, Toledo Refining Company LLC, Torrance Refining Company LLC, Torrance Logistics Company LLC, Chalmette Refining L.L.C., Paulsboro Refining Company LLC, PBF Logistics GP LLC, PBF Logistics LP, DCR Storage and Loading LLC, Delaware City Terminaling Company LLC, Toledo Terminaling Company LLC, Delaware Pipeline Company LLC, Delaware City Logistics Company LLC, Paulsboro Terminaling Company LLC, Paulsboro Natural Gas Pipeline Company LLC, Toledo Rail Logistics Company LLC, Chalmette Logistics Company LLC and PBFX Operating Company LLC.
10.4*		Joinder Agreement dated as of September 7, 2018, among DCR Storage and Loading LLC, Chalmette Logistics Company LLC, Toledo Rail Logistics Company LLC, Paulsboro Terminaling Company LLC and Wells Fargo Bank, National Association, as Administrative Agent.
31.1*		Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Logistics LP pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Erik Young, Chief Financial Officer of PBF Logistics LP pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1/*		Certification of Thomas J. Nimbley, Chief Executive Officer of PBF Logistics LP pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2/*		Certification of Erik Young, Chief Financial Officer of PBF Logistics LP pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1*		Supplemental Financial Information of Torrance Valley Pipeline Company LLC.
101.INS		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema Document.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

——————

* Filed herewith.

** Furnished, not filed.

Signatures

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



			PBF Logistics LP
		By:	PBF Logistics GP LLC, its general partner

Date:	October 31, 2018		By:	/s/ Erik Young
				Erik Young Senior Vice President, Chief Financial Officer and Director (Duly Authorized Officer and Principal Financial Officer)

Exhibit 4.1

SIXTH SUPPLEMENTAL INDENTURE

SIXTH SUPPLEMENTAL INDENTURE (this “ Supplemental Indenture ”), dated as of September 11, 2018, among DCR Storage and Loading LLC, a Delaware limited liability company, Chalmette Logistics Company LLC, a Delaware limited liability company, Toledo Rail Logistics Company LLC, a Delaware limited liability company and Paulsboro Terminaling Company LLC, a Delaware limited liability company (each a “Guaranteeing Subsidiary” and together, the “ Guaranteeing Subsidiaries ”), PBF Logistics LP, a Delaware limited partnership (“ PBFX ”), PBF Logistics Finance Corporation, a Delaware corporation (together with PBFX, the “ Issuers ”), and Deutsche Bank Trust Company Americas, as trustee under the Indenture referred to below (the “ Trustee ”) .

WITNESSETH

WHEREAS, the Issuers have heretofore executed and delivered to the Trustee an indenture dated as of May 12, 2015 (as amended from time to time, the “ Indenture ”), providing for the issuance of 6.875% Senior Notes due 2023 (the “ Notes ”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiaries shall execute and deliver to the Trustee a supplemental indenture pursuant to which each Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuers’ Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “ Note Subsidiary Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiaries and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

l. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. AGREEMENT TO GUARANTEE. Each Guaranteeing Subsidiary acknowledges that it has received and reviewed a copy of the Indenture and all other documents it deems necessary to review in order to enter into this Supplemental Indenture, and acknowledges and agrees to (i) join and become a party to the Indenture as indicated by its signature below; (ii) be bound by the Indenture, as of the date hereof, as if made by, and with respect to, each signatory hereto; and (iii) perform all obligations and duties required of a Subsidiary Guarantor pursuant to the Indenture. Each Guaranteeing Subsidiary hereby agrees to provide an unconditional Note Subsidiary Guarantee on the terms and subject to the conditions set forth in the Indenture, including, but not limited to, Article 10 thereof.

KL2 3090238.2

3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the Note Subsidiary Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Note Subsidiary Guarantee on the Notes.

4. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, stockholder or agent of each Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Issuers or any Guaranteeing Subsidiary under the Notes, any Note Subsidiary Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

5. NEW YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.

6. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. This Supplemental Indenture may be executed in multiple counterparts which, when taken together, shall constitute one instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmissions shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

7. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof.

8. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by each Guaranteeing Subsidiary and the Issuers.

9. BENEFITS ACKNOWLEDGED. Each Guaranteeing Subsidiary’s Note Subsidiary Guarantee is subject to the terms and conditions set forth in the Indenture. Each Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to its Note Subsidiary Guarantee are knowingly made in contemplation of such benefits.

10. SUCCESSORS. All agreements of each Guaranteeing Subsidiary in this Supplemental Indenture shall bind its successors, except as otherwise provided in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

KL2 3090238.2

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.



			GUARANTEEING SUBSIDIARY:

			DCR STORAGE AND LOADING LLC

			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Senior Vice President, General Counsel and Secretary



			GUARANTEEING SUBSIDIARY:

			CHALMETTE LOGISTICS COMPANY LLC

			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Senior Vice President, General Counsel and Secretary



			GUARANTEEING SUBSIDIARY:

			TOLEDO RAIL LOGISTICS COMPANY LLC

			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Senior Vice President, General Counsel and Secretary

KL2 3090238.2



			GUARANTEEING SUBSIDIARY:

			PAULSBORO TERMINALING COMPANY LLC

			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Senior Vice President, General Counsel and Secretary



			ISSUERS:

			PBF LOGISTICS LP

			By:	PBF Logistics GP LLC, its general partner

			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Senior Vice President, General Counsel and Secretary



			PBF LOGISTICS FINANCE CORPORATION

			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Senior Vice President, General Counsel and Secretary

KL2 3090238.2



			TRUSTEE:

			DEUTSCHE BANK TRUST COMPANY AMERICAS,
			as Trustee

			By:	Deutsche Bank National Trust Company

			By:	/s/ Irina Golovashchuk
				Name: Irina Golovashchuk Title: Vice President

			By:	/s/ Chris Niesz
				Name: Chris Niesz Title: Vice President

KL2 3090238.2

Exhibit 10.2

FIFTH AMENDED AND RESTATED OMNIBUS AGREEMENT

among

PBF HOLDING COMPANY LLC,

PBF ENERGY COMPANY LLC,

PBF LOGISTICS GP LLC

and

PBF LOGISTICS LP

TABLE OF CONTENTS



Article I DEFINITIONS		5
1.1	Definitions	5
Article II BUSINESS OPPORTUNITIES		9
2.1	Restricted Activities	9
2.2	Permitted Exceptions	9
2.3	Procedures	10
2.4	Scope of Prohibition	11
2.5	Enforcement	11
Article III CORPORATE SERVICES		11
3.1	General	11
Article IV CAPITAL AND OTHER EXPENDITURES		13
4.1	Reimbursement of Operating, Maintenance, Capital and Other Expenditures	13
4.2	Taxes	14
Article V RIGHT OF FIRST OFFER		14
5.1	Right of First Offer to Purchase Certain Assets retained by the Sponsor Entities	14
5.2	Procedures	14
Article VI GRANT OF INTELLECTUAL PROPERTY LICENSE		17
6.1	Grant of License	17
6.2	Restrictions and Additional Agreements with Respect to License	17
6.3	Covenants and Indemnification	17
Article VII MISCELLANEOUS		18
7.1	Choice of Law; Submission to Jurisdiction	18
7.2	Arbitration Provision	18
7.3	Notice	19



7.4	Entire Agreement	20
7.5	Termination of Agreement	20
7.6	Amendment or Modification	20
7.7	Assignment	20
7.8	Counterparts	20
7.9	Severability	20
7.10	Further Assurances	20
7.11	Rights of Limited Partners	21

SCHEDULES


Schedule 3.1(a)	General and Administrative Services


Schedule 5.1(a)	ROFO Assets


Schedule 6.1	PBF Logistics IP

FIFTH AMENDED AND RESTATED OMNIBUS AGREEMENT

This FIFTH AMENDED AND RESTATED OMNIBUS AGREEMENT (“ Agreement ”) is entered into on, and effective as of July 31, 2018 (the “ Effective Date ”), among PBF Holding Company LLC, a Delaware limited liability company (“ PBF Holding ”), PBF Energy Company LLC, a Delaware limited liability company (“ PBF Energy ”), PBF Logistics GP LLC, a Delaware limited liability company (the “ General Partner ”), and PBF Logistics LP, a Delaware limited partnership (the “ Partnership ”). The above-named entities are sometimes referred to in this Agreement each as a “ Party ” and collectively as the “ Parties .”

RECITALS:


1.	The Parties previously entered into that certain Fourth Amended and Restated Omnibus Agreement, dated August 31, 2016 (the “ Existing Agreement ”), and the Parties now desire the amend and restate the Existing Agreement as provided herein;


2.	The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article II, with respect to certain business opportunities in which the Sponsor Entities (as herein defined) will not engage for so long as any Sponsor Entity controls the General Partner of the Partnership.


3.	The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article III, with respect to the amount to be paid by the Partnership for the centralized corporate services to be performed by the General Partner and its Affiliates (as defined herein) for, and on behalf of, the Partnership Group.


4.	The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article IV, with respect to certain operating, maintenance, capital and other expenditures to be reimbursed by the General Partner and its Affiliates to the Partnership Group.


5.	The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article V, with respect to the Partnership Group’s right of first offer with respect to the ROFO Assets (as defined herein).


6.	The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article VI, with respect to the granting of the PBF Logistics IP to the Partnership.

In consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions . As used in this Agreement, the following terms shall have the respective meanings set forth below:

“ 2018 Drop Downs Closing Date ” means July 31, 2018.

“ 2018 Contribution Agreements ” means the Chalmette Contribution Agreement, the Delaware City Contribution Agreement, the Toledo Rail Contribution Agreement and the Paulsboro Contribution Agreement.

“ Administrative Fee ” is defined in Section 3.1(a)(iii).

“ Affiliate ” is defined in the Partnership Agreement.

“ Agreement ” is defined in the introduction to this Agreement.

“ Arbitrable Dispute ” means any and all disputes, controversies and other matters in question among the Parties arising under or in connection with this Agreement.

“ Board of Directors ” means for any Person the board of directors or other governing body of such Person.

“ Claimant ” is defined in Section 7.2.

“ Chalmette Contribution Agreement ” means that certain Contribution Agreement, dated as of July 16, 2018, by and between PBF Energy and the Partnership, providing for the contribution of all of the equity interests in Chalmette Logistics Company LLC from PBF Energy to the Partnership, together with the additional conveyance documents and instruments contemplated or referenced thereunder.

“ Contribution Agreements ” means the IPO Contribution Agreement, the West Rack Drop Down Contribution Agreement, the Toledo Drop Down Contribution Agreement, the Delaware Logistics Contribution Agreement, the SJV System Contribution Agreement and the 2018 Contribution Agreements.

“ control ” (including with correlative meaning, the term “controlled by”) means, as used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of a majority of the voting securities, by contract or otherwise.

“ Delaware City Contribution Agreement ” means that certain Contribution Agreement, dated as of July 16, 2018, by and between PBF Energy and the Partnership, providing for the contribution of all of the equity interests in DCR Storage and Loading Company LLC from PBF Energy to the Partnership, together with the additional conveyance documents and instruments contemplated or referenced thereunder.

“ Delaware Logistics Contribution Agreement ” means that certain Contribution Agreement, dated as of May 5, 2015, by and between PBF Energy and the Partnership, together with the additional conveyance documents and instruments contemplated or referenced thereunder.

“ Delaware Logistics Drop Down Closing Date ” means May 14, 2015.

“ Effective Date ” is defined in the introduction to this Agreement.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Existing Agreement ” is defined the recitals to this Agreement.

“ General Partner ” is defined in the introduction to this Agreement.

“ Governmental Authority ” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“ IPO Closing Date ” means May 14, 2014.

“ IPO Contribution Agreement ” means that certain Contribution, Conveyance and Assumption Agreement, dated as of the IPO Closing Date, among the General Partner, the Partnership, PBF Energy, PBF Holding and the other entities named therein, together with the additional conveyance documents and instruments contemplated or referenced thereunder.

“ Licensees ” is defined in Section 6.1.

“ Limited Partner ” is defined in the Partnership Agreement.

“ Losses ” means any losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs and expenses (including, without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent.

“ Offer ” is defined in Section 2.3.

“ Offer Evaluation Period ” is defined in Section 2.3.

“ Paulsboro Contribution Agreement ” means that certain Contribution Agreement, dated as of July 16, 2018, by and between PBF Energy and the Partnership, providing for the contribution of all of the equity interests in Paulsboro Terminaling Company LLC from PBF Energy to the Partnership, together with the additional conveyance documents and instruments contemplated or referenced thereunder.

“ Partnership ” is defined in the introduction to this Agreement.

“ Partnership Agreement ” means the Second Amended and Restated Agreement of Limited Partnership of PBF Logistics LP, dated as of September 15, 2014, as amended by Amendment No. 1 thereto, dated May 25, 2018, as such agreement is in effect on the Effective Date, to which reference is hereby made for all purposes of this Agreement.

“ Partnership Assets ” means all ownership, leasehold or other interest in or right to use of terminal facilities and related equipment, real estate and other assets, or portions thereof, conveyed, contributed or otherwise transferred or intended to be conveyed, contributed or otherwise transferred pursuant to any Contribution Agreement to any member of the Partnership Group, or otherwise owned by, leased by or necessary for the operation of the business, properties or assets of any member of the Partnership Group, as of the Effective Date.

“ Partnership Change of Control ” means the Sponsor Entities cease to control the general partner of the Partnership.

“ Partnership Group ” means the General Partner, the Partnership and all of the Partnership’s Subsidiaries, treated as a single consolidated entity.

“ Partnership Interest ” is defined in the Partnership Agreement.

“ Party ” and “ Parties ” are defined in the introduction to this Agreement.

“ PBF Energy ” is defined in the introduction to this Agreement.

“ PBF Holding ” is defined in the introduction to this Agreement.

“ PBF Logistics IP ” means the names and trademarks set forth on Schedule 6.1.

“ PBF Name ” is defined in Section 6.2(b).

“ Person ” means any individual, corporation, partnership, limited partnership, limited liability company, joint venture, trust or unincorporated organization, joint stock company or any other private entity or organization, Governmental Authority, court or any other legal entity, whether acting in an individual, fiduciary or other capacity.

“ Proposed Transaction ” is defined in Section 5.2(a).

“ Producer Price Index ” shall have the meaning ascribed to such term by the United States Bureau of Labor Statistics.

“ Respondent ” is defined in Section 7.2.

“ Retained Assets ” means all assets, or portions thereof, owned or held by the Sponsor Entities as of the Effective Date that were not directly or indirectly conveyed, contributed or otherwise transferred to the Partnership Group pursuant to any of the Contribution Agreements.

“ ROFO Assets ” means (1) any asset, group of assets or business acquired or constructed by a Sponsor Entity pursuant to Section 2.2(d) or Section 2.2(e) and (2) the assets listed on Schedule 5.1(a) to this Agreement.

“ ROFO Governmental Approval Deadline ” is defined in Section 5.2(c).

“ ROFO Notice ” is defined in Section 5.2(a).

“ ROFO Period ” is defined in Section 5.1(a).

“ ROFO Response ” is defined in Section 5.2(a).

“ SJV System Contribution Agreement ” means that certain Contribution Agreement, dated as of August 31, 2016, by and between PBF Energy and the Partnership, together with the additional conveyance documents and instruments contemplated or referenced thereunder.

“ SJV System Drop Down Closing Date ” means 11:59:59 p.m. (Eastern Time) on August 31, 2016.

“ Sponsor Entities ” means PBF Energy, and any Person controlled, directly or indirectly, by PBF Energy, other than the General Partner or a member of the Partnership Group; and “ Sponsor Entity ” means any of the PBF Entities.

“ Subsidiary ” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if such Person, directly or by one or more Subsidiaries of such Person, or a combination thereof, controls such partnership on the date of determination, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors, managers or other governing body of such Person.

“ Toledo Drop Down Contribution Agreement ” means that certain Contribution Agreement, dated as of December 2, 2014, by and between PBF Energy and the Partnership, together with the additional conveyance documents and instruments contemplated or referenced thereunder.

“ Toledo Drop Down Closing Date ” means December 11, 2014.

“ Toledo Rail Contribution Agreement ” means that certain Contribution Agreement, dated as of July 16, 2018, by and between PBF Energy and the Partnership, providing for the contribution of all of the equity interests in Toledo Rail Logistics Company LLC from PBF Energy to the Partnership, together with the additional conveyance documents and instruments contemplated or referenced thereunder.

“ Trademark ” means the trademark set forth on Schedule 6.1.

“ Transfer ” means to, directly or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of, whether in one or a series of transactions; provided that a collateral assignment in connection with any debt financing shall not be deemed to be a Transfer.

“ Voting Securities ” of a Person means securities of any class of such Person entitling the holders thereof to vote in the election of, or to appoint, members of the board of directors or other similar governing body of the Person; provided that, if such Person is a limited partnership, Voting Securities of such Person shall be the general partner interest in such Person.

“ West Rack Drop Down Contribution Agreement ” means that certain Contribution Agreement, dated as of September 16, 2014, by and between PBF Energy and the Partnership, together with the additional conveyance documents and instruments contemplated or referenced thereunder.

“ West Rack Drop Down Closing Date ” means September 30, 2014.

ARTICLE II

BUSINESS OPPORTUNITIES

2.1 Restricted Activities . Except as permitted by Section 2.2, the Sponsor Entities shall be prohibited from owning, operating, engaging in, acquiring, or investing in any business that owns or operates crude oil or refined products pipelines, terminals or storage facilities in the United States.

2.2 Permitted Exceptions . Notwithstanding Section 2.1, the Sponsor Entities may engage in the following activities under the following circumstances:

(a) the ownership, operation, expansion, replacement, return to service, repair, sale, divestment, merger with another entity, suspension, operation or shutdown of any of the Retained Assets;

(b) the acquisition, construction, ownership or operation of any assets that are within, substantially dedicated to, or an integral part of any refinery, commercial or marketing activity (except as identified in another subsection of this Section 2.2) owned, acquired or constructed by the Sponsor Entities;

(c) the acquisition, construction, ownership or operation of any asset, group of assets or business that has a fair market value (as determined in good faith by the Board of Directors of the Sponsor Entity that will own such asset, group of assets or business) of less than $25 million;

(d) the acquisition, construction, ownership or operation of any asset, group of assets or business that has a fair market value (as determined in good faith by the Board of Directors of the Sponsor Entity that will own such asset, group of assets or business) of $25 million or more if the Partnership has been offered the opportunity to purchase such asset, group of assets or business in accordance with the procedures set forth in Section 2.3 and the Partnership has elected not to purchase such asset, group of assets or business;

(e) the acquisition, construction, ownership or operation of any asset, group of assets or business that has a fair market value (as determined in good faith by the Board of Directors of the Sponsor Entity that will own such asset, group of assets or business) of $25 million or more but where such crude oil or refined products pipelines, terminals or storage facilities comprise less than half of the fair market value (as determined in good faith by the Board of Directors of the Sponsor Entity that will own such asset, group of assets or business) of the total package of assets and/or businesses acquired or constructed by the Sponsor Entities and its Subsidiaries if the Partnership has been offered the opportunity to purchase the crude oil or refined products pipelines, terminals or storage facility assets and/or businesses in accordance with the procedures set forth in Section 2.3 and the Partnership has elected not to purchase such asset, group of assets and/or businesses;

(f) the purchase and ownership of a non‑controlling interest in any publicly traded entity;

(g) the ownership of equity interests in the General Partner and the Partnership Group;

(h) engaging with any crude oil or refined products pipelines, terminals or storage facilities in the capacity of a customer of such pipelines, terminals or storage facilities; and

(i) the acquisition, ownership or operation of any asset, group of assets or business that would be unlawful or contrary to an existing contractual arrangement of the Partnership Group for the Partnership Group to own or operate, for as long as it is unlawful or contrary to an existing contractual arrangement of the Partnership Group for the Partnership Group to own or operate such asset, group of assets or business.

2.3 Procedures .

(a) If any Sponsor Entity acquires or constructs any crude oil or refined products pipelines, terminals or storage facilities in the United States, or acquires an interest in a business that owns such assets pursuant to Section 2.2(d) or Section 2.2(e), then (A) upon the consummation of such acquisition or completion of such construction, Schedule 5.1(a) shall automatically be amended to include such asset, group of assets and/or businesses as ROFO Assets subject to Article V and (B) such Sponsor Entity may, at any time after the consummation of the acquisition or the completion of construction by the Sponsor Entity, offer in writing to the Partnership Group the opportunity to purchase such asset, group of assets or business (the “ Offer ”). The Offer shall set forth the terms relating to the purchase of the asset, group of assets or business and, if the Sponsor Entity desires to utilize the asset or group of assets, the Offer will also include the terms on which the Partnership Group will provide services to the Sponsor Entity. As soon as practicable, but in any event within 90 days after receipt by the General Partner of such written notification (the “ Offer Evaluation Period ”), the General Partner shall notify the Sponsor Entity in writing that either (i) the General Partner has elected not to cause a member of the Partnership Group to purchase the asset, group of assets or business, or (ii) the General Partner has elected to cause a member of the Partnership Group to purchase such asset, group of assets or business, in which event the Parties will use their reasonable bests efforts to consummate the transaction within six months.

(b) Nothing herein shall impede or otherwise restrict the foreclosure, sale, disposition or other exercise of rights or remedies by or on behalf of any secured lender of any asset or interest in any business subject to a security interest in favor of such lender or any agent for or on behalf of such lender under any credit arrangement now or hereafter in effect (it being understood and agreed that no secured lender to the Sponsor Entities shall have any obligation to make an Offer or to sell or cause to be sold any asset or interest in any business to any member of the Partnership Group).

2.4 Scope of Prohibition . Except as provided in this Article II and the Partnership Agreement, the Sponsor Entities shall be free to engage in any business activity, including those that may be in direct competition with any member of the Partnership Group.

2.5 Enforcement . The Sponsor Entities agree and acknowledge that the Partnership Group does not have an adequate remedy at law for the breach by the Sponsor and its Subsidiaries (other than the Partnership Group) of the covenants and agreements set forth in this Article II, and that any breach by the Sponsor and its Subsidiaries (other than the Partnership Group) of the covenants and agreements set forth in this Article II may result in irreparable injury to the Partnership Group. The Sponsor and its Subsidiaries (other than the Partnership Group) further agree and acknowledge that any member of the Partnership Group may, in addition to the other remedies which may be available to the Partnership Group, file a suit in equity to enjoin the Sponsor and its Subsidiaries (other than the Partnership Group) from such breach, and consent to the Partnership Group seeking the issuance of injunctive relief under this Agreement.

ARTICLE III

CORPORATE SERVICES

3.1 General .

(a) PBF Energy agrees to provide, and agrees to cause its Affiliates to provide, on behalf of the General Partner, for the Partnership Group’s benefit, all of the centralized corporate services that PBF Energy and its Affiliates have traditionally provided in connection with the Partnership Assets including, without limitation, the general and administrative services listed on Schedule 3.1(a) to this Agreement. Consideration for the services provided hereunder effective as of the 2018 Drop Down Closing Date shall be an administrative fee (the “ Administrative Fee ”) of $5,700,000 per year, payable in equal monthly installments on or before the tenth business day of each calendar month, with any partial months prorated.

PBF Energy may increase or decrease the Administrative Fee effective as of January 1 of each calendar year following the Effective Date, by a percentage equal to the change in the Producer Price Index over the previous 12 calendar months or to reflect any increase in the cost of providing centralized corporate services to the Partnership Group due to changes in any law, rule or regulation applicable to PBF Energy or its Affiliates or the Partnership Group, including any interpretation of such laws, rules or regulations, including the rules of any exchange upon which the Partnership Group’s debt or equity is listed or traded, or to reflect any increase in the scope and extent of the services provided to the Partnership Group, provided , however , that the Administrative Fee shall not be decreased below the initial fee provided in this Agreement unless the type or extent of such services materially decreases, subject to the provision in Section 3.1(b) whereby the Parties may mutually agree to reduce the Administrative

Fee. The General Partner may agree on behalf of the Partnership to increases in the Administrative Fee in connection with expansions of the operations of the Partnership Group through the acquisition or construction of new assets or businesses.

(b) The Partnership shall have the right to terminate any or all of the services listed on Schedule 3.1(a) to this Agreement, without penalty, upon thirty (30) days prior written notice to PBF Energy. In addition, at the end of each calendar year, the Partnership will have the right to submit to PBF Energy a proposal to reduce the amount of the Administrative Fee for the upcoming year if the Partnership believes, in good faith, that the centralized corporate services performed by PBF Energy and its Affiliates for the benefit of the Partnership Group for the upcoming year will not justify payment of the full Administrative Fee for such year. If the Partnership submits such a proposal to PBF Energy, PBF Energy agrees that it will negotiate in good faith with the Partnership to determine if the Administrative Fee for the upcoming year should be reduced and, if so, the amount of such reduction. If the Parties agree that the Administrative Fee for that year should be reduced, then PBF Energy shall thereafter charge such reduced amount. If the Parties cannot agree to the amount of a reduction in the Administrative Fee for that year, then the reduction amount shall become an Arbitrable Dispute and governed in accordance with Section 7.2, provided , however , that the Administrative Fee shall not be decreased below the initial fee provided in this Agreement unless the type or extent of such services materially decreases.

(c) The Partnership shall reimburse PBF Energy and its Affiliates for all other direct or allocated costs and expenses incurred by PBF Energy and its Affiliates on behalf of the Partnership Group including, but not limited to:

(i) salaries of employees of PBF Energy and its Affiliates who devote more than 50% of their business time to the business and affairs of the Partnership Group, to the extent, but only to the extent, such employees perform services for the Partnership Group, provided that for employees that do not devote substantially all of their business time to the Partnership Group, such expenses shall be based on the annual weighted average of time spent and number of employees devoting services to the Partnership Group;

(ii) the cost of employee benefits relating to employees of PBF Energy and its Affiliates who devote more than 50% of their business time to the business and affairs of the Partnership Group, including 401(k), pension, bonuses and health insurance benefits, to the extent, but only to the extent, such employees perform services for the Partnership Group, provided that for employees that do not devote substantially all of their business time to the Partnership Group, such expenses shall be based on the annual weighted average of time spent and number of employees devoting their services to the Partnership Group;

(iii) any expenses incurred or payments made by PBF Energy and its Affiliates for insurance coverage with respect to the Partnership Assets or the business of the Partnership Group;

(iv) all expenses and expenditures incurred by PBF Energy and its Affiliates, if any, as a result of the Partnership becoming and continuing as a publicly traded entity, including, but not limited to, costs associated with annual and quarterly reports, independent auditor fees,

partnership governance and compliance, registrar and transfer agent fees, tax return and Schedule K-1 preparation and distribution, legal fees and independent director compensation;

(v) all sales, use, excise, value added or similar taxes, if any, that may be applicable from time to time with respect to the services provided by PBF Energy and its Affiliates to the Partnership Group pursuant to Section 3.1(a); and

(vi) all costs for outside services that are incurred for the Partnership Group’s benefit.

Such reimbursements shall be made on or before the tenth business day of the month following the month such costs and expenses are incurred, other than reimbursements solely related to bonuses for employees of the Sponsor Entities, which shall be reimbursed on or prior to the last business day of the month that such bonuses are paid. For the avoidance of doubt, the costs and expenses set forth in Section 3.1(c) shall be paid by the Partnership Group in addition to, and not as a part of or included in, the Administrative Fee.

(d) The Sponsor Entities makes no representations or warranties of any kind, express or implied, with respect to the services to be provided hereunder, except that the services shall be provided in a reasonably timely manner by personnel that the Sponsor Entities deem to be competent and qualified to perform such services.

ARTICLE IV

CAPITAL AND OTHER EXPENDITURES

4.1 Reimbursement of Operating, Maintenance, Capital and Other Expenditures . For five years following the IPO Closing Date, PBF Energy will reimburse the Partnership Group on a dollar-for-dollar basis, without duplication, for expenses (net of insurance recoveries, if any) incurred prior to the fifth anniversary of the IPO Closing Date by the Partnership Group for the repair of any condition (other than normal maintenance, wear and tear) caused by the failure of any Partnership Asset to operate in substantially the same manner and condition as such asset was operating as of (a) the IPO Closing Date (in the case of Partnership Assets conveyed to the Partnership Group pursuant to the IPO Contribution Agreement), (b) the West Rack Drop Down Closing Date (in the case of Partnership Assets conveyed to the Partnership Group pursuant to the West Rack Drop Down Contribution Agreement), (c) the Toledo Drop Down Closing Date (in the case of Partnership Assets conveyed to the Partnership Group pursuant to the Toledo Drop Down Contribution Agreement), (d) the Delaware Logistics Drop Down Closing Date (in the case of Partnership Assets conveyed to the Partnership Group pursuant to the Delaware Logistics Contribution Agreement), (e) the SJV System Drop Down Closing Date (in the case of Partnership Assets conveyed to the Partnership Group pursuant to the SJV System Contribution Agreement) and (f) the 2018 Drop Down Closing Date (in the case of the Partnership Assets conveyed to the Partnership Group pursuant to the 2018 Contribution Agreements) or, in any case, any clean up related thereto; provided , however , that PBF Energy shall not be required to reimburse the Partnership Group for any expenses in excess of $20,000,000 per event; and provided further that, in the case in the case of Partnership Assets conveyed to the Partnership Group pursuant to (x) the SJV System Contribution Agreement, PBF Energy shall only be required to reimburse the Partnership Group for 50% of any expenses up to $10,000,000 per event.

4.2 Taxes . The Sponsor Entities will reimburse the Partnership for all taxes that the Partnership incurs in connection with this Agreement unless prohibited by applicable law.

ARTICLE V

RIGHT OF FIRST OFFER

5.1 Right of First Offer to Purchase Certain Assets retained by the Sponsor Entities .

(a) The Sponsor Entities hereby grant to the Partnership Group a right of first offer for a period of 10 years from the IPO Closing Date (the “ ROFO Period ”) on any ROFO Asset to the extent that the owner of such ROFO Asset proposes to Transfer any ROFO Asset (other than (1) to an Affiliate who agrees in writing that such ROFO Asset remains subject to the provisions of this Article V and such Affiliate assumes the obligations under this Article V with respect to such ROFO Asset, (2) in connection with a Transfer by the Sponsor Entities of all or substantially all of the refinery with respect to which such ROFO Asset is within, substantially dedicated to or an integral part of or (3) in connection with the foreclosure on such ROFO Asset by any lender under any credit arrangements of the Sponsor Entities) or enter into any agreement to do any of the foregoing during the ROFO Period.

(b) The Parties acknowledge that all potential Transfers of ROFO Assets pursuant to this Article V are subject to obtaining any and all required written consents of Governmental Authorities and other third parties and to the terms of all existing agreements in respect of the ROFO Assets; provided , however , that the Sponsor Entities represents and warrants that, to its knowledge after reasonable investigation, there are no terms in such agreements that would materially impair the rights granted to the Partnership Group pursuant to this Article V with respect to any ROFO Asset.

5.2 Procedures .

(a) In the event the owner of any ROFO Asset proposes to Transfer a ROFO Asset (other than as permitted by Section 5.1(a)(1), (2) or (3)) or enter into any agreement to do so during the ROFO Period (a “ Proposed Transaction ”), the owner of such ROFO Asset shall, prior to entering into any such Proposed Transaction, first give notice in writing to the Partnership (the “ ROFO Notice ”) of its intention to enter into such Proposed Transaction. The ROFO Notice shall include any material terms, conditions and details as would be necessary for the Partnership Group to make a responsive offer to enter into the Proposed Transaction with the owner of the ROFO Asset, which terms, conditions and details shall at a minimum include any terms, condition or details that the owner of the ROFO Asset Owner would propose to provide to non-Affiliates in connection with the Proposed Transaction. The Partnership Group shall have 90 days following receipt of the ROFO Notice to propose an offer to enter into the Proposed Transaction with the owner of the ROFO Asset (the “ ROFO Response ”). The ROFO Response shall set forth the terms and conditions (including, without limitation, the purchase price the Partnership Group proposes to pay for the ROFO Asset and the other material terms of the purchase including, if requested by the owner of the ROFO Asset, the terms on which the Partnership Group will provide services to the Sponsor Entities to enable the Sponsor Entities to utilize the ROFO Asset) pursuant to which the Partnership Group would be willing to enter into a binding agreement for the Proposed Transaction. If no ROFO Response is delivered by the Partnership Group within such 90-

day period, then the Partnership Group shall be deemed to have waived its right of first offer with respect to such ROFO Asset.

(b) Unless the ROFO Response is rejected pursuant to written notice delivered by the owner of the ROFO Asset to the Partnership Group within 90 days of the delivery of the ROFO Response, such ROFO Response shall be deemed to have been accepted by the owner of the ROFO Asset and the owner of the ROFO Asset shall enter into an agreement with the Partnership Group providing for the consummation of the Proposed Transaction upon the terms set forth in the ROFO Response and, if applicable, the Partnership Group will enter into an agreement with the Sponsor Entities setting forth the terms on which the Partnership Group will provide services to the Sponsor Entities to enable the Sponsor Entities to utilize the ROFO Asset. Unless otherwise agreed between the owner of the ROFO Asset and the Partnership Group, the terms of the purchase and sale agreement will include the following:

(i) the Partnership Group will agree to deliver the purchase price (in cash, Partnership Interests, an interest-bearing promissory note, or any combination thereof agreed to by the owner of the ROFO Asset);

(ii) the owner of the ROFO Asset will represent that it has good and marketable title to the ROFO Asset that is sufficient to operate the ROFO Asset in accordance with its historical use, subject to all recorded matters and all physical conditions in existence on the closing date for the purchase of the applicable ROFO Asset, plus any other such matters as the Partnership Group may approve. If the Partnership Group desires to obtain any title insurance with respect to the ROFO Asset, the full cost and expense of obtaining the same (including but not limited to the cost of title examination, document duplication and policy premium) shall be borne by the Partnership Group;

(iii) the owner of the ROFO Asset will grant to the Partnership Group the right, exercisable at the Partnership Group’s risk and expense prior to the delivery of the ROFO Response, to make such surveys, tests and inspections of the ROFO Asset as the Partnership Group may deem desirable, so long as such surveys, tests or inspections do not damage the ROFO Asset or interfere with the activities of the owner of the ROFO Asset, and any invasive or destructive testing shall be subject to the reasonable approval of the owner of the ROFO Asset;

(iv) the Partnership Group will have the right to terminate its obligation to purchase the ROFO Asset under this Article V if the results of any searches under Section 5.2(b)(ii) or (iii) above are, in the reasonable opinion of the Partnership Group, unsatisfactory;

(v) the closing date for the purchase of the ROFO Asset shall occur no later than 180 days following receipt by the owner of the ROFO Asset of the ROFO Response pursuant to Section 5.2(a) unless otherwise agreed to by the Parties;

(vi) the owner of the ROFO Asset and the Partnership Group shall use commercially reasonable efforts to do or cause to be done all things that may be reasonably necessary or advisable to effectuate the consummation of any transactions contemplated by this Section 5.2(b), including causing its respective Affiliates to execute, deliver and perform all

documents, notices, amendments, certificates, instruments and consents required in connection therewith; and

(vii) neither the owner of the ROFO Asset nor the Partnership Group shall have any obligation to sell or buy the ROFO Assets if any of the consents referred to in Section 5.1(b) has not been obtained.

(c) The Partnership Group and the owner of the ROFO Asset shall cooperate in good faith in obtaining all necessary governmental and other third party approvals, waivers and consents required for the closing. Any such closing shall be delayed, to the extent required, until the third business day following the expiration of any required waiting periods under the HSR Act; provided , however , that such delay shall not exceed 60 days following the 180 days referred to in Section 5.2(b)(v) (the “ ROFO Governmental Approval Deadline ”) and, if governmental approvals and waiting periods shall not have been obtained or expired, as the case may be, by such ROFO Governmental Approval Deadline, then the owner of the ROFO Asset shall be free to enter into a Proposed Transaction with any third party.

(d) If the Partnership Group has not timely delivered a ROFO Response as specified above with respect to a Proposed Transaction that is subject to a ROFO Notice, the owner of the ROFO Asset shall be free to enter into a Proposed Transaction with any third party on terms and conditions no more favorable to such third party than those set forth in the ROFO Notice. If a ROFO Response with respect to such Proposed Transaction is rejected by the owner of the ROFO Asset, the owner of the ROFO Asset shall be free to enter into a Proposed Transaction with any third party (i) on terms and conditions (excluding those relating to price) that are not more favorable in the aggregate to such third party than those proposed in respect of the Partnership Group in the ROFO Response and (ii) at a price equal to no less than 110% of the price offered by the Partnership Group in the ROFO Response to the owner of the ROFO Asset.

(e) If a Proposed Transaction with a third party is not consummated as provided in Section 5.2 within one year of, as applicable, the Partnership Group’s failure to timely deliver a ROFO Response with respect to such Proposed Transaction that is subject to a ROFO Notice, the rejection by the owner of the ROFO Asset of a ROFO Response with respect to such Proposed Transaction or the ROFO Governmental Approval Deadline, then, in each case, the owner of the ROFO Asset may not Transfer any ROFO Assets described in such ROFO Notice without complying again with the provisions of this Article V, if and to the extent then applicable.

ARTICLE VI

GRANT OF INTELLECTUAL PROPERTY LICENSE

6.1 Grant of License . PBF Holding hereby grants the Partnership Group and any future subsidiaries of the Partnership (collectively, the “ Licensees ”), and the Licensees hereby accept, a royalty-free, fully paid, nonexclusive and nontransferable right and license to use the PBF Logistics IP. Except for such license, all other rights in the PBF Logistics IP are hereby reserved to PBF Holding. The Licensees shall not grant any sublicenses or assign, delegate or otherwise transfer their rights or obligations hereunder or any interest herein (including any assignment or transfer occurring of law) without the prior written consent of PBF Holding.

6.2 Restrictions and Additional Agreements with Respect to License .

(a) PBF Holding and its other licensees shall have the right to use the PBF Logistics IP simultaneously with the use of the PBF Logistics IP by Licensees. PBF Holding does not warrant or represent that Licensees will have the sole and exclusive right to use the PBF Logistics IP. Other than as set forth in Section 6.3 herein, PBF Holding is not obligated to indemnify or reimburse Licensees for any expenses by Licensees in connection with Licensees’ use of the PBF Logistics IP.

(b) Licensees’ license to use the PBF Logistics IP shall terminate 120 days after receipt by the General Partner, on behalf of the Licensees, of written notice of termination from the Sponsor Entities following a Partnership Change of Control. Licensees shall not thereafter use or otherwise exploit the PBF Logistics IP and shall not use any name incorporating the “PBF” name or any derivation thereof that would reasonably be expected to be confused therewith (the “ PF Name ”), or any other trade names, domain name, trade dress, trademark or service mark confusingly similar thereto, and each Licensee shall promptly assign and transfer its rights in any ownership of the trade names incorporating the PBF Name to PBF Holding and each Licensee shall adopt a new trade name that does not use any PBF Name.

6.3 Covenants and Indemnification .

(a) The Partnership agrees, at the request and expense of the Sponsor Entities, to use commercially reasonable efforts to cooperate with the Sponsor Entities in the defense and conservation of the PBF Logistics IP as requested by the Sponsor Entities.

(b) The Sponsor Entities agree, at the request and expense of the Partnership, to use commercially reasonable efforts to cooperate with the Partnership in the defense and conservation of the PBF Logistics IP as requested by the Partnership.

(c) The Sponsor Entities agrees to use commercially reasonable efforts to cooperate with the Partnership in maintaining the Trademark in due force and duly registered.

(d) The Partnership agrees, and agrees to cause the other members of the Partnership Group, to use the PBF Logistics IP in accordance with such quality standards established by the Sponsor Entities and communicated to the Partnership from time to time.

(e) The Partnership agrees, and agrees to cause the other members of the Partnership Group, to use best efforts to act and operate in a manner consistent with good business ethics, and in a manner that will not reflect poorly on the goodwill and reputation of the Sponsor Entities and the PBF Logistics IP. The Partnership agrees, and agrees to cause the other members of the Partnership Group, to at all times refrain from engaging in any illegal, unethical, unfair or deceptive practices, whether with respect to the PBF Logistics IP or otherwise

(f) The Sponsor Entities shall, jointly and severally, defend, indemnify, and hold harmless the Partnership from and against any Losses suffered or incurred by the Partnership arising from (i) claims or causes of action brought by any third party alleging that the Partnership’s use of the PBF Logistics IP as permitted in this Agreement violates any law, statute or rule, or infringes, dilutes, misappropriates or otherwise violates the intellectual property rights of such third party, and (ii) invalidity or unenforceability of any right with respect to the PBF Logistics IP.

ARTICLE VII

MISCELLANEOUS

7.1 Choice of Law; Submission to Jurisdiction . This Agreement shall be subject to and governed by the laws of the State of Delaware. The Parties agree to the venue and jurisdiction of the federal or state courts located in the State of Delaware for the adjudication of all disputes arising out of this Agreement.

7.2 Arbitration Provision . Any and all Arbitrable Disputes shall be resolved through the use of binding arbitration using, in the case of an Arbitrable Dispute involving a dispute of an amount equal to or greater than $1,000,000, three arbitrators, and in the case of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, one arbitrator, in each case in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code). If there is any inconsistency between this Section 7.2 and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Section 7.2 will control the rights and obligations of the Parties. Arbitration must be initiated within the time limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or the time period allowed by the applicable statute of limitations. Arbitration may be initiated by a Party (“ Claimant ”) serving written notice on the other Party (“ Respondent ”) that Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice initiating binding arbitration must identify the arbitrator Claimant has appointed. Respondent shall respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying the arbitrator Respondent has appointed. If Respondent fails for any reason to name an arbitrator within the 30-day period, Claimant shall petition the American Arbitration Association for appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall select a third arbitrator within thirty (30) days after the second arbitrator has been appointed, and, in the case of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, such third arbitrator shall act as the sole arbitrator, and the sole role of the first two arbitrators shall be to appoint such third arbitrator. Claimant will pay the compensation and expenses of the arbitrator named by or for it, and Respondent will pay the compensation and expenses of the arbitrator named by or for it. The costs of petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. Claimant and Respondent will each pay one-half of the compensation and expenses of the third arbitrator. All

arbitrators must (a) be neutral parties who have never been officers, directors or employees of the Sponsor Entities, the Partnership Group or any of their Affiliates and (b) have not less than seven (7) years’ experience in the energy industry. The hearing will be conducted in the State of Delaware or the Philadelphia Metropolitan area and commence within thirty (30) days after the selection of the third arbitrator. The Sponsor Entities, the Partnership Group and the arbitrators shall proceed diligently and in good faith in order that the award may be made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of the arbitrators will be binding on and non-appealable by the Parties hereto.

7.3 Notice . All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (a) if by transmission by facsimile or hand delivery, when delivered; (b) if mailed via the official governmental mail system, five (5) business days after mailing, provided said notice is sent first class, postage pre‑paid, via certified or registered mail, with a return receipt requested; (c) if mailed by an internationally‑recognized overnight express mail service such as Federal Express, UPS, or DHL Worldwide, one (1) Business Day after deposit therewith prepaid; or (d) if by e‑mail, one (1) business day after delivery with receipt confirmed. All notices will be addressed to the Parties at the respective addresses as follows:



	If to PBF Holding:
		PBF Holding Company LLC
		One Sylvan Way, Second Floor
		Parsippany, NJ 07054
		Attn: Matthew Lucey, President
		Telecopy No: (973) 455-7500
		Email: matthew.lucey@pbfenergy.com

	If to PBF Energy:
		PBF Energy Company LLC
		One Sylvan Way, Second Floor
		Parsippany, NJ 07054
		Attn: Trecia Canty, Esq., General Counsel
		Telecopy No: (973) 455-7500
		Email: trecia.canty@pbfenergy.com

	If to the Partnership Group:
		PBF Logistics GP LLC
		One Sylvan Way, Second Floor
		Parsippany, NJ 07054
		Attn: Erik Young, Chief Financial Officer
		Telecopy No: (973) 455-7500
		Email: erik.young@pbfenergy.com



	with a copy, which shall not constitute notice, to:
		PBF Logistics LP
		c/o PBF Logistics GP LLC
		One Sylvan Way, Second Floor
		Parsippany, NJ 07054
		Attn: Jim Fedena, Senior VP, Logistics
		Telecopy No: (973) 455-7500
		Email: jim.fedena@pbfenergy.com

or to such other address or to such other person as either Party will have last designated by notice to the other Party.

7.4 Entire Agreement . This Agreement constitutes the entire agreement of the Parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein.

7.5 Termination of Agreement . This Agreement may be terminated by the Sponsor Entities or the Partnership Group upon a Partnership Change of Control. For the avoidance of doubt, PBF Energy’s reimbursement obligations pursuant to Section 4.1 and the Parties’ rights and obligations pursuant to Article VI shall survive the termination of this Agreement in accordance with their respective terms.

7.6 Amendment or Modification . This Agreement may be amended or modified from time to time only by the written agreement of all the Parties hereto. Each such instrument shall be reduced to writing and shall be designated on its face an “Amendment” or an “Addendum” to this Agreement.

7.7 Assignment . No Party shall have the right to assign its rights or obligations under this Agreement without the consent of the other Parties hereto; provided, however, that the Partnership may make a collateral assignment of this Agreement solely to secure financing for the Partnership Group.

7.8 Counterparts . This Agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile transmission or in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart hereof.

7.9 Severability . If any provision of this Agreement shall be held invalid or unenforceable by a court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect.

7.10 Further Assurances . In connection with this Agreement and all transactions contemplated by this Agreement, each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

7.11 Rights of Limited Partners . The provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no Limited Partner of the Partnership shall have the right, separate and apart from the Partnership, to enforce any provision of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the Effective Date.



			PBF HOLDING COMPANY LLC


			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Secretary



			PBF ENERGY COMPANY LLC


			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Secretary



			PBF LOGISTICS GP LLC


			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer



			PBF LOGISTICS LP

			By:	PBF Logistics GP LLC,
				its general partner


			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer

SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED OMNIBUS AGREEMEMT

Schedule 3.1(a)

General and Administrative Services


(1)	Executive management services of employees of PBF Energy and its Affiliates who devote less than 50% of their business time to the business and affairs of the Partnership Group, including PBF Energy equity-based compensation expense


(2)	Financial and administrative services (including, but not limited to, treasury and accounting, and other administrative functions)


(3)	Information technology services


(4)	Legal services


(5)	Health, safety and environmental services


(6)	Human resources services


(7)	Insurance administration


(8)	Public relations/Government relations

Schedule 3.1(a)-1

Schedule 5.1(a)

ROFO Assets



Asset	Owner
Delaware City Marine Terminal. Marine terminal located on the Delaware River for receipt of crude oil, feedstocks and products, and shipment of crude oil, feedstocks and products, by the Delaware City Refinery via ship and barge at docks located on the Delaware River.	Delaware City Refining Company LLC
Paulsboro Marine Terminal. Marine terminal located on the Delaware River for receipt of crude oil, feedstocks and products, and shipment of crude oil, feedstocks and products, by the Paulsboro Refinery.	Delaware City Refining Company LLC
Delaware City LPG Rack. LPG rack consisting of a 6 rail loading and unloading positions located adjacent to the Delaware City Refinery.	Delaware City Refining Company LLC
Paulsboro Rail Terminal: Railcar terminal at the Paulsboro refinery used to transport refined products such as lube oils to various locations throughout the Northeast and other regions in the United States.	Paulsboro Refining Company LLC
Rail Cars. Owned or leased general purpose and coiled and insulated rail cars.	Paulsboro Refining Company LLC
Delaware City Storage Facility. Storage facility with approximately 10.0 million barrels of total storage capacity.	PBF Holding Company LLC Delaware City Refining Company LLC
Paulsboro Storage Facility. Storage facility with approximately 7.5 million barrels of total storage capacity.	Paulsboro Refining Company LLC
Remaining 50% Interest in Torrance Valley Pipeline Company LLC	TVP Holding Company LLC
Chalmette Truck Rack Related Assets. All or select tanks within the Mid-east tank farm to store product(s) for the Truck Rack, including pumps, connecting piping, controls pumps and interconnecting piping to convey products from the tanks in mid-east tank farm to the Truck Rack and recovered vapor back to a product tank. Air compressor located in the mid-east tank farm and piping into the Truck Rack and the assets set forth in this list. Either (i) Dock 6, pumps and interconnecting piping that could be repurposed to unload products and convey it to the product tanks in the mid-east tank farm, or (ii) Dock 2 and existing pumps and interconnecting piping to unload products and convey it to the tanks in the mid-east tank farm. Electrical distribution system, including switchgear and transformer needed to supply power to the Truck Rack and assets set forth in this list. It is assumed that a connection will be made to the public utility for actual power supply. API separator located adjacent to the Truck Rack Storm water sewer system. Sanitary Sewer conveyance system. Potable water system supplying the Truck Rack and the assets set forth in this list. Firewater pumps located on the Crude Dock and connecting piping to the mid-east tank farm. One of the two boom boats to service Dock 6.	Chalmette Refining, L.L.C.
Chalmette Rail Yard (Rosin). Easement to allow Full-size tanker trucks to access from Refinery gate for Rosin yard to transfer product to /from railcars and return to the Highway.	Chalmette Refining, L.L.C.

Schedule 5.1(a)-1

Schedule 6.1

PBF Logistics IP

PBF ENERGY PARTNERS LP TRADEMARK INVENTORY



Trademark	Country	Application No.	Filing Date	Registration No.	Registration Date	Renewal Date
PBF ENERGY	United States of America	85/502529	12/22/2011	4240811	11/13/2012	11/13/2022
PBF ENERGY (Stylized in Circle Design	Canada	1408750	8/27/2008
PBF ENERGY (Stylized in Circle Design	United States of America	77/981705	4/16/2008	3971638	5/31/2011	5/31/2021
PBF ENERGY (Stylized in Circle Design	United States of America	77/450012	4/16/2008	4115169	3/20/2012	3/20/2022

Schedule 6.1-1

Exhibit 10.3

SIXTH AMENDED AND RESTATED

OPERATION AND MANAGEMENT

SERVICES AND SECONDMENT AGREEMENT

Table of Contents .



			Page
Article 1		Definitions and Construction	2
	1.1	Definitions	2
	1.2	Construction of Agreement	9
Article 2		Term	10
	2.1	Term of Agreement	10
	2.2	Termination of Services by the Operator	10
	2.3	Termination of Company Services and Ancillary Company Services by the Company	10
	2.4	Cessation of Company Services and Ancillary Company Services in connection with the Services Agreements	11
	2.5	Effect of Termination	11
Article 3		Personnel, Personnel Duties and Company Services	11
	3.1	Seconded Employees	11
	3.2	Personnel Duties	11
	3.3	Secondment of Personnel	12
	3.4	Company Services	13
	3.5	Ancillary Company Services	14
	3.6	Third-Party Arrangements	14
	3.7	Interruption of Company Services	14
	3.8	Manner of Performin2/Providin2 Personnel Duties	14
Article 4		Self-Provided Services and Shared Items	14
	4.1	Self-Provided Services	14
	4.2	Shared Items	14
Article 5		Pricing, Billing and Reimbursement	15
	5.1	Reimbursement for Personnel Duties, Company Services and Ancillary	15
Article 6		Fee Adjustments	16
	6.1	Capital Expenditures	17
Article 7		Access and Audit Rights	17
Article 8		Additional Covenants	17
	8.1	Required Permits	17
	8.2	Records	18
Article 9		Representations	18



	9.1	Representations of the Operator Parties	18
	9.2	Representations of the Company Parties	19
Article 10		Insurance	19
Article 11		Force Majeure	19
	11.1	Force Majeure	19
Article 12		Services Council	20
	12.1	Formation of Services Council	20
	12.2	Meetings	20
Article 13		Event of Default: Remedies Upon Event of Default	20
	13.1	Event of Default	20
	13.2	Termination	21
	13.3	Set Off	21
	13.4	No Preclusion of Rights	21
Article 14		Indemnification	21
	14.1	Indemnification by Operator	21
	14.2	Indemnification by Company	22
	14.3	EXPRESS REMEDY	22
Article 15		Limitation on Damages	22
Article 16		Confidentiality	23
	16.1	Obligations	23
	16.2	Required Disclosure	23
	16.3	Return and Destruction of Information	23
	16.4	Receiving Party Personnel	24
	16.5	Survival	24
Article 17		Choice of Law	24
Article 18		Assignment	24
	18.1	Succession and Assignment	24
	18.2	Terms of Assignment	24
Article 19		Notices	24
Article 20		No Waiver; Cumulative Remedies	26
	20.1	No Waivers	26
	20.2	Cumulative Remedies	26
Article 21		Nature of Transaction, Relationship of Parties and Regulatory Status	26



	21.1	Independent Contractor	26
	21.2	No Agency	26
	21.3	Regulatory Status	26
Article 22		Dispute Resolution	26
	22.1	Procedure	27
	22.2	Initial Resolution Attempts	27
	22.3	Arbitration	27
Article 23		General	28
	23.1	Severability	28
	23.2	Entire Agreement	28
	23.3	Time is of the Essence	28
	23.4	No Third-Party Beneficiaries	28
	23.5	Further Assurances	28
	23.6	Counterparts	28

List of Exhibits

Exhibit A Stormwater Discharge, Wastewater Treatment and Containment

Exhibit B Steam

Exhibit C Potable Water

Exhibit D Roads and Grounds

Exhibit E Sanitary Sewer

Exhibit F Electrical Power

Exhibit G Emergency Response

Exhibit H Filter Press

Exhibit I Fuel Gas

Exhibit J API Solids

Exhibit K Fire Water

Exhibit L Instrument/Compressed Air

Exhibit M Rail Operations and Unloading

Exhibit N Vent System

Exhibit O Diesel

Exhibit P Nitrogen

Exhibit Q Natural Gas

Exhibit R Propane

iii

SIXTH AMENDED AND RESTATED

OPERATION AND MANAGEMENT SERVICES AND SECONDMENT AGREEMENT

THIS SIXTH AMENDED AND RESTATED OPERATION AND MANAGEMENT SERVICES AND SECONDMENT AGREEMENT (this “ Agreement ”), dated as of July 31, 2018 (the “ Commencement Date ”), is made by and among PBF Holding Company LLC, a Delaware limited liability company (the “ Company ”), Delaware City Refining Company LLC, a Delaware limited liability company (“ Delaware City Refining ”), Toledo Refining Company LLC, a Delaware limited liability company (“ Toledo Refining ”), Torrance Refining Company LLC, a Delaware limited liability company (“ Torrance Refining ”), Torrance Logistics Company LLC (“ Torrance Logistics ”), Chalmette Refining, L.L.C., a Delaware limited liability company (“ Chalmette Refining ”), Paulsboro Refining Company LLC, a Delaware limited liability company (“ Paulsboro Refining ” and, together with Delaware City Refining, Toledo Refining, Torrance Refining, Torrance Logistics, and Chalmette Refining, the “ Company Subsidiaries, ” and together with the Company, collectively, the “ Company Parties ”), PBF Logistics GP LLC, a Delaware limited liability company (the “ General Partner ”), PBF Logistics LP, a Delaware limited partnership (the “ Operator ”), DCR Storage and Loading LLC, a Delaware limited liability company (“ DCR ”), Delaware City Terminaling Company LLC, a Delaware limited liability company (“ DCT ”), Toledo Terminaling Company LLC, a Delaware limited liability company (“ Toledo Terminaling ”), Delaware Pipeline Company LLC, a Delaware limited liability company (“ DPC ”), Delaware City Logistics Company LLC (“ DCLC ”), Paulsboro Terminaling Company LLC, a Delaware limited liability company (“ PTC ”), Paulsboro Natural Gas Pipeline Company LLC, a Delaware limited liability company (“ PNGPC ”), Toledo Rail Logistics Company LLC, a Delaware limited liability company (“ Toledo Rail Logistics ”), Chalmette Logistics Company LLC, a Delaware limited liability company (“ Chalmette Logistics ”), and PBFX Operating Company LLC, a Delaware limited liability company (“ PBFX Operating ” and, together with DCT, Toledo Terminaling, DPC, DCLC, PNGPC, Toledo Rail Logistics and Chalmette Logistics, the “ Operator Subsidiaries ”). The Operator Subsidiaries, the General Partner and Operator are collectively referred to herein as the “ Operator Parties . ” The Company, the Company Subsidiaries, the General Partner, the Operator and each of the Operator Subsidiaries may be referred to herein individually as “ Party ” or collectively as the “ Parties .”

RECITALS

WHEREAS, certain of the Parties previously entered into that certain Fifth Amended and Restated Operation and Management Services and Secondment Agreement, dated as of February 28, 2017 (the “ Existing Agreement ”), and the Parties now desire to amend and restate the Existing Agreement as provided herein;

WHEREAS, the Operator Parties own or lease the Terminal;

WHEREAS, the Company Parties own and operate the Refinery;

WHEREAS, the Operator Parties have agreed to provide logistics, terminaling and transportation services to the Company Parties and the Company Parties can provide or make available to the Operator Parties the personnel necessary to operate and maintain the Terminals; and

WHEREAS, the Operator Parties desire that the Company Parties provide and make available to the Operator Parties the personnel necessary for the Operator Parties to provide the logistics, terminaling and transportation services.

NOW, THEREFORE, in consideration of the premises and the respective promises, conditions, terms and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties do hereby agree as follows:

ARTICLE I

DEFINITIONS AND CONSTRUCTION

2.1 Definitions . For purposes of this Agreement, including the foregoing recitals, the following terms shall have the meanings indicated below:

“ Affiliate ” means, with respect to a specified Person, any other Person controlling, controlled by or under common control with that first Person. As used in this definition, the term “control” includes (a) with respect to any Person having voting securities or the equivalent and elected directors, managers or Persons performing similar functions, the ownership of or power to vote, directly or indirectly, voting securities or the equivalent representing 50% or more of the power to vote in the election of directors, managers or Persons performing similar functions, (b) ownership of 50% or more of the equity or equivalent interest in any Person and (c) the ability to direct the business and affairs of any Person by acting as a general partner, manager or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, each of the Company Parties, on the one hand, and each of the Operator Parties, on the other hand, shall not be considered Affiliates of each other.

“ Agreement ” has the meaning specified in the preamble to this document.

“ Ancillary Company Services ” has the meaning specified in Section 3.5 .

“ Annual Fee ” has the meaning specified in Section 5.2 .

“ Applicable Law ” means any applicable statute, law, regulation, Environmental Law, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by, any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including all of the terms and provisions of the applicable common law of such Governmental Authority), as interpreted and enforced at the time in question.

“ Arbitrable Dispute ” means any and all disputes, controversies and other matters in question between the Operator Parties, on the one hand, and the Company Parties, on the other hand, arising under or in connection with this Agreement, which cannot be resolved by the Services Council within thirty (30) days (unless a longer duration is otherwise agreed to) from being submitted to the Services Council.

“ Barrel ” means forty-two (42) net U.S. gallons, measured at 60° F and 1 atmospheric pressure.

“ bpd ” means barrels per day.

“ Business Day ” means any day that is not a Saturday, Sunday, or other day on which banks are authorized or required to close in the State of California, the State of Delaware, the State of Louisiana, the State of New York, the State of New Jersey or the State of Ohio.

“ Capital Expenditure ” means any expenditure incurred to acquire or upgrade a fixed asset.

“ Chalmette Logistics ” has the meaning specified in the preamble of this Agreement.

“ Chalmette Rail Unloading Agreement ” means the Rail Unloading Agreement, dated as of July 31, 2018, by and between the Company and Chalmette Logistics.

“ Chalmette Refinery ” means the petroleum refinery, located outside New Orleans, Louisiana owned and operated by Chalmette Refining.

“ Chalmette Refining ” has the meaning specified in the preamble of this Agreement.

“ Chalmette Storage Services Agreement ” means the Storage Services Agreement dated as of the date hereof by and between the Company and PBFX Operating.

“ Chalmette Tank ” means the crude oil storage tank located in Chalmette, Louisiana, owned and operated by PBFX Operating.

“ Chalmette Terminaling Services Agreement ” means the Terminal Throughput & Storage Agreement, dated as of July 31, 2018, by and between the Company and Chalmette Logistics.

“ Chalmette Truck Rack and Rosin Yard Assets ” means the truck rack, and related facilities co-located with such truck rack, connected by pipelines to the Chalmette Refinery and the Rosin Yard.

“ Claimant ” has the meaning specified in Article 22 .

“ Commencement Date ” has the meaning specified in the preamble of this Agreement.

“ Company ” has the meaning specified in the preamble to this Agreement.

“ Company Parties ” has the meaning specified in the preamble of this Agreement.

“ Company Services ” has the meaning specified in Section 3.4 .

“ Company Subsidiaries ” has the meaning specified in the preamble of this Agreement.

“ Company Indemnitees ” has the meaning specified in Section 14.1 .

“ Confidential Information ” means all information, documents, records and data (including this Agreement, except to the extent required to be made public in a filing with the Securities and Exchange Commission or another Governmental Authority or pursuant to the rules and regulations of any national securities exchange) that a Party furnishes or otherwise discloses to the other Party (including any such items furnished prior to the execution of this Agreement), together with all

analyses, compilations, studies, memoranda, notes or other documents, records or data (in whatever form maintained, whether documentary, computer or other electronic storage or otherwise) prepared by the receiving Party which contain or otherwise reflect or are generated from such information, documents, records and data; provided , however , that the term “ Confidential Information ” does not include any information that (a) at the time of disclosure or thereafter is or becomes generally available to or known by the public (other than as a result of a disclosure by the receiving Party), (b) is developed by the receiving Party without reliance on any Confidential Information or (c) is or was available to the receiving Party on a nonconfidential basis from a source other than the disclosing Party that, insofar as is known to the receiving Party after reasonable inquiry, is not prohibited from transmitting the information to the recipient by a contractual, legal or fiduciary obligation to the disclosing Party.

“ control ” (including with correlative meaning, the term “ controlled by ”) means, as used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“ Counterparty ” means, with respect to any of the Company Parties, the Operator, and with respect to any of the Operator Parties, the Company.

“ DCR ” has the meaning specified in the preamble of this Agreement.

“ DCT ” has the meaning specified in the preamble of this Agreement.

“ Defaulting Party ” has the meaning specified in Section 13.2 .

“ Delaware City Ethanol Assets ” means the tanks and associated pipelines and transfer pumps and equipment for the transfer of ethanol to the Delaware City, Delaware docks on Delaware Bay.

“ Delaware City Rail Terminal ” means the double-loop rail terminal located in Delaware City, Delaware (together with existing or future modifications or additions) owned and operated by DCT.

“ Delaware City Rail Terminaling Services Agreement ” means the Delaware City Rail Terminaling Services Agreement, dated as of May 14, 2014, by and between the Company and DCT.

“ Delaware City Refinery ” means the petroleum refinery located in Delaware City, Delaware owned and operated by Delaware City Refining.

“ Delaware City Refining ” has the meaning specified in the preamble of this Agreement.

“ Delaware City Truck Loading Services Agreement ” means the Delaware City Truck Loading Services Agreement, dated as of May 15, 2015, by and between the Company and DCLC.

“ Delaware City West Ladder Rack Terminaling Services Agreement ” means the Delaware City West Ladder Rack Terminaling Services Agreement, dated as of September 30, 2014,

by and between the Company and DCT, as successor-in-interest to Delaware City Terminaling Company II LLC, a Delaware limited liability company.

“ Delaware Pipeline Services Agreement ” means the Delaware Pipeline Services Agreement, dated as of May 15, 2015, by and between the Company and DPC.

“ Delaware Products Rack ” means the 15 lane, 76,000 barrel per day capacity truck loading rack located adjacent to the Delaware City Refinery.

“ Delaware Products Pipeline ” means the 23.4 mile, 16-inch interstate petroleum products pipeline originating at the Delaware City Refinery with terminus at Sunoco Logistics Partners L.P.’s Twin Oaks terminal.

“ East Coast Terminals ” means the products terminals owned and operated by PBF Logistics Products Terminals LLC.

“ Environmental Law ” means all federal, state, and local laws, statutes, rules, regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental Permits and other legally enforceable requirements and rules of common law now or hereafter in effect, relating to pollution or protection of human health and the environment, safety, and occupational health, including the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Clean Water Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, OSHA, and other similar federal, state or local health and safety, and environmental conservation and protection laws.

“ Environmental Permit ” means any permit, approval, identification number, license, registration, consent, exemption, variance or other authorization required under or issued pursuant to any applicable Environmental Law.

“ Event of Default ” has the meaning specified in Section 13.1 .

“ Existing Agreement ” has the meaning specified in the recitals of this Agreement.

“ Force Majeure ” means acts of God, strikes, lockouts or other industrial disturbances, acts of a public enemy, wars, terrorism, blockades, insurrections, riots, storms, floods, interruptions in the ability to have safe passage in navigable waterways or rail lines, washouts, other interruptions caused by acts of nature or the environment, arrests, the order of any court or Governmental Authority claiming or having jurisdiction while the same is in force and effect, civil disturbances, explosions, fires, leaks, releases, breakage, accident to machinery, vessels, storage tanks or lines of pipe or rail lines, inability to obtain or unavoidable delay in obtaining material or equipment, inability to obtain or distribute crude oil, feedstocks, other products or materials necessary for operation because of a failure of third-party pipelines or rail lines or any other causes whether of the kind herein enumerated or otherwise not reasonably within the control of the Party claiming suspension and which by the exercise of commercially reasonable efforts such Party is unable to prevent or overcome; provided , however , a Party’s inability to perform its economic obligations hereunder shall not constitute an event of Force Majeure.

“ Force Majeure Notice ” has the meaning specified in Section 11.1 .

“ Force Majeure Party ” has the meaning specified in Section 11.1 .

“ General Partner ” has the meaning specified in the preamble of this Agreement.

“ Liabilities ” means any losses, liabilities, charges, damages, deficiencies, assessments, interests, fines, penalties, costs and expenses (collectively, “ Costs ”) of any kind (including reasonable attorneys’ fees and other fees, court costs and other disbursements), including any Costs directly or indirectly arising out of or related to any suit, proceeding, judgment, settlement, cause of action, equitable or injunctive relief, or judicial or administrative order and any Costs arising from compliance or non-compliance with Environmental Law.

“ Non-Defaulting Party ” means the Counterparty to a Defaulting Party.

“ Omnibus Agreement ” means that certain Fifth Amended and Restated Omnibus Agreement, dated as of the date hereof, by and among the Company, the General Partner, the Operator and PBF Energy Company LLC.

“ Operator ” has the meaning specified in the preamble to this Agreement.

“ Operator Indemnitees ” has the meaning specified in Section 14.2.

“ Operator Parties ” has the meaning specified in the preamble of this Agreement.

“ Operator Subsidiaries ” has the meaning specified in the preamble of this Agreement.

“ OSHA ” means Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq.

“ Overhead Expenses ” means all overhead costs and expenses of any of the Company Parties (including all compensation costs, including payroll, benefits and payroll taxes allocated to each of the Seconded Employees providing the Personnel Duties, or the Company’s employees providing the Company Services or the Ancillary Company Services, multiplied by the proportion of such Person’s business time spent providing Personnel Duties, Company Services or Ancillary Company Services, as applicable) to the extent related to the Personnel Duties, the Company Services or the Ancillary Company Services.

“ Paulsboro Commercial Operation Date ” means the Commercial Operation Date as defined in the Paulsboro PMA.

“ Paulsboro Lube Tank Assets ” means five (5) active tanks (Tanks 594, 595, 2799, 2800, and 1117), three (3) inactive tanks (Tanks S-48, S-51 and S-52) and two (2) dedicated pipelines and related pumps and pig stations.

“ Paulsboro PMA ” means the Paulsboro Lube Tank Project Management Agreement, dated as of July 31, 2018, between Paulsboro Refining and PTC.

“ Paulsboro Refinery ” has the meaning set forth in the preamble.

“ PBFX Operating ” has the meaning specified in the preamble to this Agreement.

“ Party ” or “ Parties ” has the meaning specified in the preamble to this Agreement.

“ Period of Secondment ” has the meaning specified in Article 3 .

“ Personnel Duties ” has the meaning specified in Article 3 .

“ PNGPC ” has the meaning specified in the preamble to this Agreement.

“ PNG Pipeline ” means (i) the existing 8” natural gas pipeline or (ii) the 24” natural gas pipeline to be constructed and, in each case terminating at the Paulsboro Refinery.

“ PNG Precedent Agreement ” means that certain transportation agreement dated as of February 28, 2017 between PNGPC and Paulsboro Refining.

“ Prime Rate ” means the rate of interest quoted in The Wall Street Journal, Bonds, Rates & Yields Section as the Prime Rate.

“ Prudent Industry Practice ” means, as of the relevant time, those methods and acts generally engaged in or applied by the refining, pipeline or terminaling industries (as applicable) in the United States that, in the exercise of reasonable judgment in light of the circumstances known at the time of performance, would have been expected to accomplish the desired result at a reasonable cost consistent with functionality, reliability, safety and expedition with due regard for health, safety, security and environmental considerations. Prudent Industry Practice is not intended to be limited to the optimum practices, methods or acts to the exclusion of others, but rather is intended to include reasonably acceptable practices, methods and acts generally engaged in or applied by the refining, pipeline or terminaling industries (as applicable) in the United States.

“ PTC ” has the meaning specified in the preamble to this Agreement.

“ Receiving Party Personnel ” has the meaning specified in Section 16.4.

“ Refinery ” means, collectively, the Chalmette Refinery, the Delaware City Refinery, the Paulsboro Refinery, the Toledo Refinery and the Torrance Refinery. In addition, if any of the Company Parties acquires, leases or constructs assets directly connected to and leased or constructed to reasonably support the operation of, or to replace any portion of, the Chalmette Refinery, the Delaware City Refinery, the Toledo Refinery or the Torrance Refinery, those assets shall automatically become a part of the Refinery.

“ Required Permits ” has the meaning specified in Section 8.1.

“ Respondent ” has the meaning specified in Article 22.

“ Seconded Employee ” has the meaning specified in Article 3.

“ Seconded Employee Schedule ” has the meaning specified in Section 3.3(a) .

“ Services Agreements ” means, collectively, the Chalmette Storage Services Agreement, the Delaware City Rail Terminaling Services Agreement, the Toledo Truck Unloading & Terminaling Agreement, the Toledo Storage & Terminaling Services Agreement, the Delaware City West Ladder Rack Terminaling Services Agreement, the Delaware City Truck Loading Services Agreement, the Delaware Pipeline Services Agreement, the SJV System Transportation Agreement, the PNG Pipeline Transportation Agreement, the Toledo Rail Loading Agreement, the Chalmette Terminaling Services Agreement and the Chalmette Rail Unloading Agreement.

“ Services Council ” shall mean the council comprised of 2 representatives of the Operator Parties and 2 representatives of the Company Parties.

“ Special Damages ” has the meaning specified in Article 15 .

“ SJV System ” means the 189.2 mile crude pipeline system (collectively, the “SJV System”) which consists of: (i) the M1, M55 and M70 pipelines in California with approximately 110,000 bpd of capacity; (ii) 11 pipeline stations positioned between Belridge and the Torrance Refinery with heavy crude heating, pumping and storage capabilities; and (iii) 11 breakout tanks with an aggregate capacity of 988,000 barrels.

“ SJV System Transportation Agreement ” means the SJV System Transportation Agreement, dated as of August 31, 2016, by and between the Company and TVPC.

“ Term ” has the meaning specified in Section 2.1 .

“ Terminal ” means, collectively, the Chalmette Tank, the Delaware City Ethanol Assets, the Delaware City Rail Terminal, the Toledo Tank Farm Assets, the Toledo Truck Terminal, the West Ladder Rack, the Delaware Products Rack, the Delaware Products Pipeline, the East Coast Terminals, the SJV System, the Paulsboro Lube Tank Assets, the PNG Pipeline, the Chalmette Truck Rack and Rosin Yard Assets and the Toledo Rail Assets.

“ Toledo Commercial Operation Date ” means the Commercial Operation Date as defined in the Toledo PMA.

“ Toledo PMA ” means the Toledo Rail Project Management Agreement, dated as of July 31, 2018, between Toledo Refining and Toledo Rail Logistics.

“ Toledo Rail Assets ” means the rail assets, and related facilities co-located with such rail assets, connected by pipelines to the Toledo Refinery.

“ Toledo Rail Loading Agreement ” means that certain Toledo Rail Loading Agreement, dated as of July 31, 2018, by and between the Company and Toledo Rail Logistics.

“ Toledo Rail Logistics ” has the meaning specified in the preamble of this Agreement.

“ Toledo Refinery ” means the petroleum refinery, located in Toledo, Ohio owned and operated by Toledo Refining.

“ Toledo Refining ” has the meaning specified in the preamble of this Agreement.

“ Toledo Storage & Terminaling Services Agreement ” means that certain Storage and Terminaling Services Agreement, dated as of December 12, 2014, by and between the Company and Toledo Terminaling.

“ Toledo Tank Farm Assets ” means the tank farm, commonly referred to as “Tank Farm #2,” and related facilities co-located with the tank farm, connected by pipelines to the Toledo Refinery located near Toledo, Ohio.

“ Toledo Terminaling ” has the meaning specified in the preamble of this Agreement.

“ Toledo Truck Terminal ” means the truck unloading facility generally consisting of four crude truck unloading spots located in Toledo Refinery’s north tank farm adjacent to the Toledo Refinery (together with existing or future modifications or additions) owned and operated by the Operator.

“ Toledo Truck Unloading & Terminaling Agreement ” means that certain Toledo Truck Unloading and Terminaling Agreement, dated as of May 14, 2014, by and between the Company and the Operator.

“ Torrance Refinery ” means the petroleum refinery, located in Torrance, California owned and operated by Torrance Refining.

“ TVPC ” means Torrance Valley Pipeline Company LLC, a Delaware limited liability company.

“ West Ladder Rack ” means the heavy crude oil rail unloading rack located in Delaware City, Delaware (together with existing or future modifications or additions) owned and operated by DCT.

1.2 Construction of Agreement .

(a) Unless otherwise specified, all references herein are to the Articles, Sections and Exhibits of this Agreement and all Exhibits are incorporated herein.

(b) All headings herein are intended solely for convenience of reference and shall not affect the meaning or interpretation of the provisions of this Agreement.

(c) Unless expressly provided otherwise, the word “including” as used herein does not limit the preceding words or terms and shall be read to be followed by the words “without limitation” or words having similar import.

(d) Unless expressly provided otherwise, all references to days, weeks, months and quarters mean calendar days, weeks, months and quarters, respectively.

(e) Unless expressly provided otherwise, references herein to “consent” mean the prior written consent of the Party at issue.

(f) A reference to any Party to this Agreement or another agreement or document includes the Party’s permitted successors and assigns.

(g) Unless the contrary clearly appears from the context, for purposes of this Agreement, the singular number includes the plural number and vice versa; and each gender includes the other gender.

(h) Except where expressly stated otherwise, any reference to any Applicable Law or agreement shall be a reference to the same as amended, supplemented or reenacted from time to time.

(i) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

1.3 No Presumption . The Parties acknowledge that they and their counsel have reviewed and revised this Agreement and that no presumption of contract interpretation or construction shall apply to the advantage or disadvantage of the drafter of this Agreement.

ARTICLE 2

TERM

2.1 Term of Agreement . The term (the “ Term ”) shall commence on the Commencement Date and shall continue until the earlier of (a) written mutual agreement by the Parties to terminate this Agreement, (b) the termination of the Omnibus Agreement, (c) a termination pursuant to a default in accordance with Section 13.2 or (d) a termination pursuant to Section 2.4 .

2.2 Termination of Services by the Operator . In addition to the Operator’s right to adjust or terminate any of the Company Services or Ancillary Company Services pursuant to Section 6.1(c ), the Operator shall have the right to terminate any or all of the Company Services, Ancillary Company Services or Personnel Duties, without penalty, upon thirty (30) days prior written notice to the Company.

2.3 Termination of Company Services and Ancillary Company Services by the Company .

(a) Except as provided in Section 2.3(b ), the Company shall have the right to terminate any or all of the Company Services or Ancillary Company Services being performed by the Company Parties without penalty, upon one hundred eighty (180) days prior written notice to the Operator; provided , however , if one hundred eighty (180) days’ prior notice is not sufficient time for the Operator, using commercially reasonable efforts, to replace the Company Services or Ancillary Company Services that are being terminated, the Company shall make its equipment available to the Operator, at no cost, or continue to provide such Company Services or Ancillary Company Services, as applicable, under the terms of this Agreement, whichever is deemed practical by the Company in its reasonable

discretion, for a reasonable period of time after such one hundred eighty (180) day period while replacement Company Services or Ancillary Company Services are being arranged.

(b) The Company may not terminate Company Services or Ancillary Company Services for Stormwater Discharge and Wastewater Treatment ( Exhibit A ), Steam ( Exhibit B ), Potable Water ( Exhibit C ), Roads and Grounds ( Exhibit D ), Sanitary Sewer ( Exhibit E ), Electrical Power ( Exhibit F ), Fuel Gas ( Exhibit I ), Fire Water ( Exhibit K ), Instrument/Compressed Air ( Exhibit L ), Vent System ( Exhibit N ) and Nitrogen ( Exhibit P ) pursuant to this Section 2.3 .

2.4 Cessation of Company Services and Ancillary Company Services in connection with the Services Agreements . Upon the termination or expiration of the applicable Term (as defined therein) of each Services Agreement, the Company Services and the Ancillary Company Services that relate thereto shall also terminate as of the termination or expiration of such Term. If all of the Services Agreements terminate or expire, the Term hereof shall automatically terminate.

2.5 Effect of Termination . Upon termination or expiration of the Term, all rights and obligations of the Parties under this Agreement shall terminate; provided , however , Articles 14 through 23 shall survive the termination or expiration of the Term in accordance with their terms; provided , further , termination or expiration of the Term shall not discharge or relieve any Party from any obligations or liabilities which may have accrued under the terms of this Agreement prior to such termination.

ARTICLE 3

PERSONNEL , PERSONNEL DUTIES AND COMPANY SERVICES

3.1 Seconded Employees . During the Term, the Company shall, directly or indirectly through the other Company Parties, designate (a) certain of employees or contractors of the Company Parties to be seconded to the Operator Parties to (x) perform the Operator Parties’ respective obligations under each of the Services Agreements and (y) otherwise perform the Personnel Duties, and (b) such other Persons (including consultants and professionals, service or other organizations) as the Operator reasonably deems necessary or appropriate in order to permit the Operator to (x) perform the Operator Parties’ respective obligations under each of the Services Agreements and (y) otherwise perform the Personnel Duties. Each employee or contractor who the Company seconds to the Operator Parties pursuant to this Article 3 shall, during the time that such employee or contractor is seconded to the Operator Parties under this Agreement (the “ Period of Secondment ”), be referred to individually herein as a “ Seconded Employee ” and, collectively, as the “ Seconded Employees .”

3.2 Personnel Duties . The Personnel Duties shall include the following:

(a) operation of the Terminal, procurement and furnishing of all materials, equipment, services, supplies and labor necessary for the operation and maintenance of the Terminal, engineering support for such activities, and related warehousing and security, including the following:

(i) maintain and operate flow and pressure control, monitoring, and over-pressure protection;

(ii) maintain, repair, recondition, overhaul, and replace equipment, as needed, to keep the Terminal in good working order; and

(iii) conduct all other routine day-to-day operations and maintenance at the Terminal; and

(b) management and conduct of the business operations associated with the Terminal, including the following:

(i) transportation and logistics, including commercial operations;

(ii) project execution;

(iii) contract administration;

(iv) database mapping, reporting and maintenance;

(v) rights of way;

(vi) materials and capital management;

(vii) emergency response, security, permitting and all other health, safety and environmental services;

(viii) engineering support (including facility design and optimization); and

(ix) such other general services related to the Terminal as the Parties may mutually agree are necessary from time to time.

3.3 Secondment of Personnel .

(a) The Company Parties shall maintain a true, complete and accurate list of the Seconded Employees on a schedule (the “ Seconded Employee Schedule ”). Seconded Employees may be added to or removed from the Seconded Employee Schedule from time to time by the Company Parties, as appropriate.

(b) Subject to the Company Parties’ right to be reimbursed by the Operator for such expenses in accordance with Section 5.1 , each Company Party shall pay all expenses incurred by it in connection with the retention of the Seconded Employees and such other Persons, including compensation, salaries, wages and overhead and administrative expenses, charges to or incurred by such Company Party, and, if applicable, social security taxes, workers compensation insurance, retirement and insurance benefits and other such expenses. Any such Seconded Employees and other Persons retained by any Company Party may be union or non-union employees.

(c) Each Seconded Employee (other than contractors) will at all times remain an employee of the applicable Company Party. Each Seconded Employee will, during the applicable Period of Secondment, be called upon to perform services for both the Operator Parties and the Company Parties. The Company Parties retain the right to terminate the Secondment of any Seconded Employee for any reason and at any time or to hire or discharge

the Seconded Employees with respect to their employment or engagement with the Company Parties. The Operator shall have the right to terminate the Secondment to it of any Seconded Employee (including any supervisor described in (e)) for any reason and at any time, upon prior written notice to the Company Parties, but at no time will the Operator have the right to terminate any Seconded Employee’s employment by the Company Parties or their respective contractor.

(d) During a Period of Secondment, with respect to any Seconded Employee, such Seconded Employee will report into the Operator’s management structure, and will be under the direct management, supervision, direction and control of the Operator with respect to such Seconded Employee’s day-to-day activities with contractors remaining at the direction of the contracting entity.

(e) Those active employees whose titles in the Seconded Employee Schedule reflect that they serve as supervisors or managers and who are called upon to oversee the work of Seconded Employees working at the Terminal or to provide management support on behalf of the Operator are designated by the Operator as supervisors to act on the behalf of the Operator in supervising the Seconded Employees pursuant to Section 3.3(d) above. Any Seconded Employee so designated will be acting on behalf of the Operator when supervising the work of the Seconded Employees or when they are otherwise providing management or executive support on behalf of the Operator.

(f) The Operator shall not be a participating employer in any benefit plan of any Company Party. The Company Parties shall remain solely responsible for all obligations and liabilities arising with respect to any benefit plans relating to any Seconded Employees and the Operator shall not assume any benefit plan or have any obligations or liabilities arising thereunder, in each case except for costs properly chargeable to the Operator.

3.4 Company Services . In addition to providing the Seconded Employees to the Operator Parties pursuant to Section 3.3 , the Company Parties shall also provide (through employees, contractors, subcontractors or Affiliates) the services enumerated in the Exhibits to this Agreement (the “ Company Services ”) upon customary terms in accordance with Prudent Industry Practice. The Operator shall reimburse the Company for the Company Services in accordance with Section 5.1 ; provided , however , that in the event any Company Services requires the Company Parties to make Capital Expenditures, such Capital Expenditures shall be subject to Section 6.1 and the Company Parties shall not be required to provide such Company Services until the Company Parties are able to do so after using reasonable efforts in compliance with Section 6.1 ; provided , further , the Company Parties shall not be required to perform any additional Company Services if the Company reasonably believes the performance thereof will (i) materially adversely interfere with, or be detrimental to, the operation of the Refinery or (ii) violate Applicable Law.

3.5 Ancillary Company Services . From time-to-time during the Term, the Operator may request that the Company Parties provide (through employees, contractors, subcontractors or Affiliates), ancillary services to the Operator Parties (“ Ancillary Company Services ”) upon customary terms in accordance with Prudent Industry Practice so long as such additional Ancillary Company Services are reasonably related to the Company Services or existing Ancillary Company Services. The Operator shall reimburse the Company for the Ancillary Company Services in accordance with Section 5.1 ; provided , however , that in the event any requested additional Ancillary

Company Services requires the Company Parties to make Capital Expenditures, such Capital Expenditures shall be subject to Section 6.1 and the Company Parties shall not be required to provide such additional Ancillary Company Services until the Company Parties are able to do so after using reasonable efforts in compliance with Section 6.1 ; provided , further , the Company Parties shall not be required to perform any additional Ancillary Company Services if they reasonably believe the performance thereof will (i) materially adversely interfere with, or be detrimental to, the operation of the Refinery or (ii) violate Applicable Law.

3.6 Third-Party Arrangements . Nothing herein shall be deemed to prevent any of the Company Parties from providing services similar to the Company Services or Ancillary Company Services to third parties. Further, nothing herein shall be deemed to prohibit any of the Operator Parties from receiving services similar to the Company Services or Ancillary Company Services from third parties.

3.7 Interruption of Company Services . The Parties shall use commercially reasonable efforts to minimize the interruption of Company Services or Ancillary Company Services. In addition, the Company shall inform the Operator at least sixty (60) days in advance (or promptly, in the case of an unplanned interruption) of any anticipated partial or complete interruption of Company Services or Ancillary Company Services at the applicable facility, including relevant information about the nature, extent, cause and expected duration of the interruption and the actions the Company is taking to resume full operations; provided , however , that the Company shall not have any liability for any failure to notify, or delay in notifying, the Operator of any such matters except to the extent, subject to Article 11 , the Operator has been materially damaged by such failure or delay.

3.8 Manner of Performing/Providing Personnel Duties . The Personnel Duties to be performed and provided by the Seconded Employees made available pursuant to Section 3.3 by the Company Parties hereunder shall be performed and provided consistent with Prudent Industry Practice.

ARTICLE 4

SELF-PROVIDED SERVICES AND SHARED ITEMS

4.1 Self-Provided Services . Subject to the Omnibus Agreement, except for the

Company Services and the Ancillary Company Services set forth in Sections 3.4 , and 3.5 , respectively, the Operator shall provide for itself, at its sole cost and expense, any other services it requires as applicable for its operations, including telephone and fax services, computers and computer networks and tank gauging.

4.2 Shared Items . Notwithstanding anything to the contrary contained in Section 4.1 above, the Parties have agreed to share certain of the following items:

(a) existing infrastructure for the Parties’ telephones and faxes, including telephone switch;

(b) existing fiber optics system;

(d) an emergency alarm system for the Parties’ respective operations at the Refinery and the Terminal, respectively, including existing infrastructure used by the Parties to connect to the emergency alarm system; provided , however , each Party shall be responsible, at its sole cost, for interconnecting into the emergency alarm system.

ARTICLE 5

PRICING, BILLING AND REIMBURSEMENT

5.1 Reimbursement for Personnel Duties , Company Services and Ancillary .

Company Services . The Operator shall reimburse the Company for all third-party costs and expenses incurred by any of the Company Parties in connection with the performance by the Seconded Employees of the Personnel Duties, or the Company’s employees of the Company Services and the Ancillary Company Services (including any Overhead Expenses) and if mutually agreeable to the Parties shall cause any third-party service providers to invoice the Operator Parties directly in connection with the performance of any Personnel Duties by such third party or the performance of any Company Service or Ancillary Company Services by such third party. The Operator shall reimburse the Company for all taxes (other than property taxes, ad valorem taxes, income taxes, gross receipt taxes, payroll taxes and other similar taxes) that the Company incurs on the Operator Parties’ behalf for the performance by the Seconded Employees of the Personnel Duties, or the Company’s employees of the Company Services and the Ancillary Company Services, unless prohibited by Applicable Law; provided , however , that in no event shall the Company charge or be entitled to pass-through costs that (i) result from any criminal act, willful misconduct or negligence of the Company or any of its agents, employees or representatives, or (ii) are in the nature of fines, late fees, penalties, interest or similar obligations that could have been avoided by the Company in the exercise of Prudent Industry Practice. If the Operator is exempt from the payment of any taxes allocated to it under this Section 5.1 , the Operator shall furnish the Company with the proper exemption certificates.

5.2 Annual Fee . In addition to reimbursement under Section 5.1 , the Operator shall pay to the Company an annual fee for the services as set forth herein and in connection with the provision of certain utilities and other infrastructure-related services equal to $8,587,000 (the “ Annual Fee ”) payable in equal monthly installments in accordance with Section 5.3 , commencing in the first month following the Commencement Date. The Annual Fee for the 2018 fiscal year shall be prorated based on the number of days from the Commencement Date to December 31, 2018. At the end of each calendar year, the Company will have the right to submit to the Operator a proposal to increase the amount of the Annual Fee for the upcoming year if the Company believes, in good faith, that for the services as set forth herein, the utilities and other infrastructure-related services performed by the Company Parties for the benefit of the Operator Parties for the upcoming year justify payment greater than the Annual Fee for such year. If the Company submits such a proposal to the Operator, the Operator agrees that it will negotiate in good faith with the Company to determine if the Annual Fee for the upcoming year should be increased and, if so, the amount of such increase. If the Parties cannot agree to the amount of an increase in the Annual Fee for that year, then the increase amount shall become an Arbitrable Dispute and governed in accordance with Section 22.3 . Until the Parties are able to agree on the Annual Fee increase amount, if any, the

Annual Fee for the preceding year shall continue to be the applicable fee and any subsequent increase decided upon shall be applied retroactively to the start of the year. Notwithstanding the foregoing, the Annual Fee will increase by (i) an amount of $65,716 on the Paulsboro Commercial Operation Date for Tank S-48, (ii) an amount of $65,716 on the Paulsboro Commercial Operation Date for Tank S-51, (iii) an amount of $65,716 on the Paulsboro Commercial Operation Date for Tank S-52 and (iv) an amount of $30,000 on the Toledo Commercial Operation Date.

5.3 Billing . The Company shall provide monthly invoices to the Operator for all reimbursements payable under this Agreement and the Operator shall reimburse the Company as specified in the monthly invoices within ten (10) days after its receipt of such invoice; provided , however , that notwithstanding anything herein to the contrary, no reimbursements shall be made hereunder to the extent such reimbursements are made pursuant to the Omnibus Agreement. The Company shall also include in such monthly invoices the applicable amount of the Annual Fee owed by the Operator and the Operator shall pay the Annual Fee as specified in the monthly invoices within ten (10) days after its receipt of such invoice. Any past due reimbursements or fees owed to the Company hereunder shall accrue interest, payable on demand, at the Prime Rate plus 400 basis points from the due date of the reimbursement or fee through the actual date of reimbursement or payment of the fee. Reimbursement or payment of any fee pursuant to this Section 5.3 shall be made by wire transfer of immediately available funds to an account designated in writing by the Company. If any such reimbursement or fee shall be due and payable on a day that is not a Business Day, such reimbursement or fee shall be due and payable on the next succeeding Business Day. Notwithstanding any other provision in this Agreement, the Company shall have up to thirty (30) days after the end of a calendar quarter to issue an invoice to true-up all amounts owed by each party under this Agreement during the calendar quarter so ended.

5.4 Contents of Invoices . Any invoice delivered by the Company to the Operator pursuant to Section 5.3 above shall set forth in detail the Company’s calculation of the charges for the Personnel Duties, the Company Services and the Ancillary Company Services, and shall be accompanied by information reasonably sufficient for the Operator to determine the accuracy of such invoice.

5.5 Reimbursement Disputes . Notwithstanding any other provision of this Article 5 , if the Operator in good faith disputes the correctness of any invoice submitted by the Company, the Operator shall promptly submit to the Company a written statement detailing the specific items disputed and shall reimburse the undisputed portion of the invoice within the time period specified for reimbursement hereunder. Any disputed items shall be subject to the dispute resolution procedures in Article 22 , and any reimbursement determined to be due pursuant to said dispute resolution shall bear interest at the Prime Rate plus 400 basis points from the date on which said reimbursement otherwise would have been payable hereunder to the date such reimbursement is actually received by the Company.

ARTICLE 6

FEE ADJUSTMENTS

6.1 Capital Expenditures .

(a) If during the course of the Term the Company determines that it is necessary to make certain Capital Expenditures related to the Company Services and the Ancillary

Company Services, the Company may notify the Operator in writing of its desire to have the Operator pay for the Operator’s applicable portion of the cost of such Capital Expenditure.

(b) If within sixty (60) days after the Company provides the written notice requesting Capital Expenditures the Parties have not reached agreement on the need for such Capital Expenditures, then the matter shall become an Arbitrable Dispute and governed in accordance with Article 22 . For the avoidance of doubt, if the Company’s Capital Expenditures are not approved, and the Company chooses to make such Capital Expenditures, the Company agrees to bear all costs associated therewith.

(c) Notwithstanding anything to the contrary contained herein, in lieu of participating in the Capital Expenditures the Operator may choose at any time to terminate all of the Personnel Duties, Company Services and the Ancillary Company Services related to such Capital Expenditure.

ARTICLE 7

ACCESS AND AUDIT RIGHTS

The Parties and their respective representatives, upon reasonable notice and during normal working hours, shall have access to the accounting records and other documents maintained by the Counterparty, or any of its contractors and agents, which relate to this Agreement, and shall have the right to audit such records at any reasonable time or times during the Term and for a period of up to two (2) years after termination of this Agreement. The Party performing such audit shall have the right to conduct such audit no more than twice per calendar year and each audit shall be limited in time to no more than the present and prior two (2) calendar years. Claims as to defects in quality shall be made by written notice within ninety (90) days after the delivery in question or shall be deemed to have been waived. The right to inspect or audit such records shall survive termination of this Agreement for a period of two (2) years following the end of the Term. Each Party shall preserve, and shall cause all contractors or agents to preserve, all of the aforesaid documents for a period of at least two (2) years from the end of the Term. Notwithstanding any of the foregoing, if an Event of Default has occurred and is continuing with respect to a specific Party, the Counterparty shall have unlimited and unrestricted access to the accounting records and other documents maintained by the Counterparty, for so long as such Event of Default continues.

ARTICLE 8

ADDITIONAL COVENANTS

8.1 Required Permits . During the Term, unless required by Applicable Law to be held by the Company Parties, the Operator shall, at its sole cost and expense, obtain, apply for, maintain, monitor, renew, and modify, as appropriate, any license, authorization, certification, filing, recording, permit, waiver, exception, variance, franchise, order or other approval with or of any Governmental Authority pertaining or relating to the operation of the Terminal (the “ Required Permits ”) as currently operated; provided , however , that if any Required Permits require the signature of, or any action by, any of the Company Parties, the Company shall cause such Company Party to reasonably cooperate with the Operator (at the Operator’s expense) so that the Operator may obtain and maintain such Required Permits either for the Operator or the applicable Operator Party. Neither the Company nor the Operator shall do anything in connection with the performance

of their respective obligations under this Agreement that causes a termination or suspension of the Required Permits.

8.2 Existing Obligations . The execution of this Agreement by the Parties does not reduce any existing obligations of such Parties and does not confer any obligation or responsibility on (a) the Company Parties in connection with: (i) any existing or future environmental condition at the Terminal, including, the presence of a regulated or hazardous substance on or in environmental media at the Terminal (including the presence in surface water, groundwater, soils or subsurface strata, or air), including the subsequent migration of any such substance; (ii) any Environmental Law; (iii) the Required Permits; or (iv) any requirements arising under or relating to any Applicable Law pertaining or relating to the ownership and operation of the Terminal, or (b) the Operator Parties in connection with: (i) any existing or future environmental condition at the Refinery, including, the presence of a regulated or hazardous substance on or in environmental media at the Refinery (including the presence in surface water, groundwater, soils or subsurface strata, or air), including the subsequent migration of any such substance; (ii) any Environmental Law; (iii) the Required Permits; or (iv) any requirements arising under or relating to any Applicable Law pertaining or relating to the ownership and operation of the Refinery.

8.2 Records .

(a) Each Party shall (i) maintain the records required to be maintained by Applicable Law and shall make such records available to the other Parties upon reasonable request and (ii) immediately notify the other Parties of any violation or alleged violation of any Applicable Law relating to this Agreement and, upon request, shall provide to the other Parties all evidence of environmental inspections or audits by any Governmental Authority relating to this Agreement.

(b) All records or documents provided by any Party to any other Party shall, to the reasonable knowledge of the providing Party, accurately and completely reflect the facts about the activities and transactions to which they relate. Notwithstanding anything herein to the contrary, no Party shall be required to provide to any other Party any document that is determined by the disclosing Party’s legal counsel to be protected by an attorney-client privilege or attorney work product doctrine. Each Party shall promptly notify the other Parties if at any time such Party has reason to believe that any records or documents previously provided to the other Party are no longer accurate or complete.

ARTICLE 9

REPRESENTATIONS

9.1 Representations of the Operator Parties . The Operator Parties jointly and severally represent and warrant to the Company Parties that (a) this Agreement, the rights obtained and the duties and obligations assumed by the Operator Parties hereunder, and the execution and performance of this Agreement by the Operator Parties, do not directly or indirectly violate any Applicable Law with respect to the Operator Parties or any of their properties or assets, the terms and provisions of the Operator Parties’ organizational documents or any agreement or instrument to which the Operator Parties or any of their properties or assets are bound or subject; (b) the execution and delivery of this Agreement by the Operator Parties has been authorized by all necessary action; (c) the Operator Parties have the full and complete authority and power to enter into this

Agreement and to provide the services hereunder; (d) no further action on behalf of the Operator Parties, or consents of any other party, are necessary for the provision of services hereunder; and (e) upon execution and delivery by the Operator Parties, this Agreement shall be a valid and binding agreement of the Operator Parties enforceable in accordance with its terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application regardless of whether enforcement is sought in a proceeding in equity or at law).

9.2 Representations of the Company Parties . The Company Parties jointly and severally represent and warrant to the Operator Parties that (a) this Agreement, the rights obtained and the duties and obligations assumed by the Company Parties hereunder, and the execution and performance of this Agreement by the Company Parties, do not directly or indirectly violate any Applicable Law with respect to the Company Parties or any of their property or assets, the terms and provisions of the Company Parties’ organizational documents or any agreement or instrument to which the Company Parties or any of their property or assets are bound or subject; (b) the execution and delivery of this Agreement by the Company Parties has been authorized by all necessary action; (c) the Company Parties have the full and complete authority and power to enter into this Agreement; (d) no further action on behalf of the Company Parties, or consents of any other party, are necessary for the provision of services hereunder; and (e) upon execution and delivery by the Company Parties, this Agreement shall be a valid and binding agreement of the Company Parties enforceable in accordance with its terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application regardless of whether enforcement is sought in a proceeding in equity or at law).

ARTICLE 10

INSURANCE

Unless the Operator Parties provide notice that they will obtain insurance coverage independently from the Company Parties, the Company, directly or through one of its Affiliates, shall procure and maintain in full force and effect throughout the Term insurance in sufficient amounts and coverage consistent with Prudent Industry Practice similar to the coverage currently in place for the officers, directors, and assets of the Operator Parties; provided , however , that in either case, each Operator Party shall be the insured party under its respective insurance policy.

ARTICLE 11

FORCE MAJEURE

11.1 Force Majeure . In the event that a Party (the “ Force Majeure Party ”) is rendered unable, wholly or in part, by a Force Majeure event to perform its obligations under this Agreement, then such Party shall within a reasonable time after the occurrence of such event of Force Majeure deliver to the Counterparty written notice (a “ Force Majeure Notice ”) including full particulars of the Force Majeure event, and the obligations of the Parties, to the extent they are affected by the Force Majeure event, shall be suspended for the duration of any inability so caused. The Force Majeure Party shall identify in such Force Majeure Notice the approximate length of time that it believes in good faith such Force Majeure event shall continue. The Operator shall be required to pay any amounts accrued and due under this Agreement at the time of the start of the Force Majeure event. The cause of the Force Majeure event shall so far as possible be remedied with all reasonable

efforts, except that no Party shall be compelled to resolve any strikes, lockouts or other industrial or labor disputes other than as it shall determine to be in its best interests. Prior to the second (2nd) anniversary of the Commencement Date, any suspension of the obligations of the Parties under this Section 11.1 as a result of a Force Majeure event that adversely affects the Company’s ability to perform the services it is required to perform under this Agreement shall extend the Term for the same period of time as such Force Majeure event continues (up to a maximum of one year) unless this Agreement is terminated under in accordance with Section 2.4.

ARTICLE 12

SERV ICES COUNCIL

12.1 Formation of Services Council . The Parties agree to form a Services Council to handle the matters as described in this Article 12. Each Party may choose to include in the Services Council meetings such knowledgeable Persons as may assist either Party in their consultations.

12.2 Meetings . The Services Council shall meet at such times as either Party may reasonably request, or at such times as agreed by the Parties, to discuss any aspect of the subject matter of this Agreement. It is the Parties’ intent that the Services Council shall serve as the vehicle for complete and timely communications about the operating plans of one Party that could materially affect the operations of the other (including maintenance or repair activities, approval of Capital Expenditures, or major changes in operations that could result in a disruption of any Service or Ancillary Service), as well as a forum for prompt resolution of any disputes in the initial meeting between the Parties.

ARTICLE 13

EVENT OF DEFAULT: REMEDIES UPON EVENT OF DEFAULT

13.1 Event of Default . Notwithstanding any other provision of this Agreement, but subject to Article 22 , the occurrence of any of the following shall constitute an “ Event of Default ”:

(a) Operator fails to make a reimbursement or pay the Annual Fee when due under Article 5 within five (5) Business Days after a written demand therefor or under any other provision hereof within seven (7) Business Days;

(b) other than a default described in Sections 13.1(a) or 13.1(c ), if the Company Parties or the Operator Parties fail to perform any material obligation or covenant made to the Counterparty under this Agreement, which is not cured to the reasonable satisfaction of the Counterparty within fifteen (15) Business Days after the date that such Party receives written notice that such obligation or covenant has not been performed;

(c) any Party breaches any representation or warranty made by such Party hereunder, or such warranty or representation proves to have been incorrect or misleading in any material respect when made; provided , however , that if such breach is curable, such breach is not cured to the reasonable satisfaction of the Counterparty within fifteen (15) Business Days after the date that such Party receives notice that corrective action is needed; or

(d) any Party files a petition or otherwise commences or authorizes the commencement of a proceeding or case under any bankruptcy, reorganization or similar law

for the protection of creditors, or have any such petition filed or proceeding commenced against it and such proceeding is not dismissed for sixty (60) days.

13.2 Termination . Except as set forth in Section 13.1(d ), without limiting any other provision of this Agreement, if an Event of Default with respect to any Party (such defaulting Party, the “ Defaulting Party ”) has occurred and is continuing, the Non-Defaulting Party shall have the right, immediately and at any time(s) thereafter, to suspend its performance or terminate this Agreement upon written notice to the Defaulting Party.

13.3 Set Off . If an Event of Default occurs, the Non-Defaulting Party may, without limitation on its rights under this Article 13 , set off amounts which the Defaulting Party owes to it against any amounts which it owes to the Defaulting Party (whether hereunder, under any other agreement or contract or otherwise and whether or not then due). Any net amount due hereunder shall be payable by the Party owing such amount within one (1) Business Day of termination.

13.4 No Preclusion of Rights . The Non-Defaulting Party’s rights under this Section 13.4 shall be in addition to, and not in limitation of, any other rights which the Non-Defaulting Party may have (whether by agreement, operation of law or otherwise), including any rights of recoupment, setoff, combination of accounts, as a secured party or under any other credit support. The Defaulting Party shall indemnify and hold the Non-Defaulting Party harmless from all costs and expenses, including reasonable attorney fees, incurred in the exercise of any remedies hereunder.

ARTICLE 14

INDEMNIFICATION

14.1 Indemnification by Operator . The Operator shall defend, indemnify and hold harmless the Company Parties, their respective Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the “ Company Indemnitees ”) from and against any Liabilities directly or indirectly arising out of (a) any breach by the Operator Parties of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of the Operator Parties made herein or in connection herewith proving to be false or misleading, (b) any personal injury incurred by any representative of the Operator Parties (including any Operator Inspector) while at the Refinery, (c) any failure by the Operator Parties, their Affiliates or any of their respective employees, representatives (including any Operator Inspector), agents or contractors to comply with or observe any Applicable Law, or (d) injury, disease, or death of any Person or damage to or loss of any property, fine or penalty, any of which is caused by the Operator Parties, their Affiliates or any of their respective employees, representatives (including any Operator Inspector), agents or contractors in the exercise of any of the rights or obligations hereunder or the handling or transportation of any crude oil hereunder, except to the extent of the Company’s obligations under Section 14.2 below, and except to the extent that such injury, disease, death, or damage to or loss of property, fine or penalty was caused by the gross or sole negligence or willful misconduct on the part of the Company Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, the Operator’s liability to the Company Indemnitees pursuant to this Section 14.1 shall be net of any insurance proceeds actually received by the Company Indemnitees or any of their respective Affiliates from any third party with respect to or on account of the damage or injury which is the subject of the indemnification claim. The Company agrees that it shall, and shall cause the other Company Indemnitees to, (i) use all commercially reasonable

efforts to pursue the collection of all insurance proceeds to which any of the Company Indemnitees are entitled with respect to or on account of any such damage or injury, (ii) notify the Operator of all potential claims against any third party for any such insurance proceeds, and (iii) keep the Operator fully informed of the efforts of the Company Indemnitees in pursuing collection of such insurance proceeds.

14.2 Indemnification by Company . The Company shall defend, indemnify and hold harmless the Operator Parties, their respective Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the “ Operator Indemnitees ”) from and against any Liabilities directly or indirectly arising out of (a) any breach by the Company Parties of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of the Company Parties made herein or in connection herewith proving to be false or misleading, (b) any personal injury incurred by any representative of the Company Parties (including any Company Inspector) while at the Terminal, (c) any failure by the Company Parties, their respective Affiliates or any of their respective employees, representatives (including any Company Inspector), agents or contractors to comply with or observe any Applicable Law, or (d) injury, disease, or death of any Person or damage to or loss of any property, fine or penalty, any of which is caused by the Company Parties, their respective Affiliates or any of their respective employees, representatives (including any Company Inspector), agents or contractors in the exercise of any of the rights or obligations hereunder or the refining, transportation, handling and storage of any crude oil hereunder, except to the extent of the Operator’s obligations under Section 14.1 above, and except to the extent that such injury, disease, death, or damage to or loss of property, fine or penalty was caused by the gross or sole negligence or willful misconduct on the part of the Operator Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, the Company’s liability to the Operator Indemnitees pursuant to this Section 14.2 shall be net of any insurance proceeds actually received by the Operator Indemnitees or any of their respective Affiliates from any third party with respect to or on account of the damage or injury which is the subject of the indemnification claim. The Operator agrees that it shall, and shall cause the other Operator Indemnitees to, (i) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the Operator Indemnitees are entitled with respect to or on account of any such damage or injury, (ii) notify the Company of all potential claims against any third party for any such insurance proceeds, and (iii) keep the Company fully informed of the efforts of the Operator Indemnitees in pursuing collection of such insurance proceeds.

14.3 EXPRESS REMEDY . THE FOREGOING INDEMNITIES ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES BECAUSE OF THE SOLE, CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE, STRICT LIABILITY OR FAULT OF ANY OF THE INDEMNIFIED PARTIES.

ARTICLE 15

LIMITATION ON DAMAGES

Notwithstanding anything to the contrary contained herein, neither Party shall be liable or responsible to any Counterparty or such other Party’s affiliated Persons for any consequential, punitive, special, incidental or exemplary damages, or for loss of profits or revenues (collectively

referred to as “ Special Damages ”) incurred by such Party or its affiliated Persons that arise out of or relate to this Agreement, regardless of whether any such claim arises under or results from contract, tort, or strict liability; provided , however , that the foregoing limitation is not intended and shall not affect Special Damages in connection with any third-party claim or imposed in favor of unaffiliated Persons that are not Parties to this Agreement; provided , further , that to the extent an indemnitor hereunder receives insurance proceeds with respect to Special Damages that would be indemnified hereunder if not for this Article 15 , such indemnitor shall be liable up to the amount of such insurance proceeds (net any deductible and premiums paid with respect thereto).

ARTICLE 16

CONFIDENTIALITY

16.1 Obligations . Each Party shall use commercially reasonable efforts to retain the Counterparty’s Confidential Information in confidence and not disclose the same to any third party nor use the same, except as authorized by the disclosing Party in writing or as expressly permitted in this Section 16 . Each Party further agrees to take the same care with the Counterparty’s Confidential Information as it does with its own, but in no event less than a reasonable degree of care.

16.2 Required Disclosure . Notwithstanding Section 16.1 above, if the receiving Party becomes legally compelled to disclose the Confidential Information by a court, Governmental Authority or Applicable Law, including the rules and regulations of the Securities and Exchange Commission, or is required to disclose pursuant to the rules and regulations of any national securities exchange upon which the receiving Party or its parent entity is listed, any of the disclosing Party’s Confidential Information, the receiving Party shall promptly advise the disclosing Party of such requirement to disclose Confidential Information as soon as the receiving Party becomes aware that such a requirement to disclose might become effective, in order that, where possible, the disclosing Party may seek a protective order or such other remedy as the disclosing Party may consider appropriate in the circumstances. The receiving Party shall disclose only that portion of the disclosing Party’s Confidential Information that it is required to disclose and shall reasonably cooperate with the disclosing Party (at the disclosing Party’s cost) in allowing the disclosing Party to obtain such protective order or other relief.

16.3 Return and Destruction of Information . Upon written request by the disclosing Party, all of the disclosing Party’s Confidential Information in whatever form shall be returned to the disclosing Party upon termination of this Agreement or destroyed with destruction certified by the receiving Party, without the receiving Party retaining copies thereof except that one copy of all such Confidential Information may be retained by a Party’s legal department solely to the extent that such Party is required to keep a copy of such Confidential Information pursuant to Applicable Law, and the receiving Party shall be entitled to retain any Confidential Information in the electronic form or stored on automatic computer back-up archiving systems during the period such backup or archived materials are retained under such Party’s customary procedures and policies; provided , however , that notwithstanding any termination or expiration of this Agreement, any Confidential Information retained by the receiving Party shall be maintained subject to confidentiality pursuant to the terms of this Section 16.3 , and such archived or back-up Confidential Information shall not be accessed except as required by Applicable Law for so long as such Confidential Information is retained.

16.4 Receiving Party Personnel . The receiving Party shall limit access to the Confidential Information of the disclosing Party to those of its employees, attorneys and contractors that have a need to know such information in order for the receiving Party to exercise or perform its rights and obligations under this Agreement (the “ Receiving Party Personnel ”). The Receiving Party Personnel who have access to any Confidential Information of the disclosing Party shall be made aware of the confidentiality provision of this Agreement, and shall be required to abide by the terms thereof. Any third-party contractors that are given access to Confidential Information of a disclosing Party pursuant to the terms hereof shall be required to sign a written agreement pursuant to which such Receiving Party Personnel agree to be bound by the provisions of this Agreement, which written agreement shall expressly state that it is enforceable against such Receiving Party Personnel by the disclosing Party.

16.5 Survival . All audit rights under Article 7 and the obligation of confidentiality under this Article 16 shall survive the termination of this Agreement for a period of two (2) years.

ARTICLE 17

CHOICE OF LAW

This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Subject to Article 22 , the Parties agree to the venue and jurisdiction of the federal or state courts located in the State of Delaware for the adjudication of all disputes arising out of this Agreement.

ARTICLE 18

ASSIGNMENT

18.1 Succession and Assignment . This Agreement shall be binding upon and inure to the benefit of the Parties named herein. No Party shall have the right to assign its rights or obligations under this Agreement without the prior written consent of the other Parties hereto; provided , however , that the Operator may make a collateral assignment of this Agreement solely to secure financing for the Operator and its subsidiaries; provided , however , the Company may subcontract any of the Company Services, Personnel Duties or Ancillary Company Services provided by the Company hereunder so long as such Company Services, Personnel Duties or Ancillary Company Services continue to be provided in a manner consistent with past practices and Prudent Industry Practice.

18.2 Terms of Assignment . Any assignment that is not undertaken in accordance with the provisions set forth above shall be null and void ab initio. A Party making any assignment shall promptly notify the other Party of such assignment, regardless of whether consent is required. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

ARTICLE 19

NOTICES

All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given: (a) if by transmission by facsimile or hand delivery, when

delivered; (b) if mailed via the official governmental mail system, five (5) Business Days after mailing, provided said notice is sent first class, postage pre-paid, via certified or registered mail, with a return receipt requested; (c) if mailed by an internationally recognized overnight express mail service such as Federal Express or UPS, one (1) Business Day after deposit therewith prepaid; or (d) if by email, one (1) Business Day after delivery with receipt confirmed. All notices shall be addressed to the Parties at the respective addresses as follows:

If to the Company Parties:

PBF Holding Company LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Matthew Lucey, President

Telecopy No: (973) 455-7500

Email: matthew.lucey@pbfenergy.com

with a copy, which shall not constitute notice, to:

PBF Energy Company LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Trecia Canty, General Counsel

Telecopy No: (973) 455-7500

Email: trecia.canty@pbfenergy.com

If to the Operator Parties:

PBF Logistics LP

c/o PBF Logistics GP LLC

2 One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Erik Young

Telecopy No: (561) 899-4335

Email: erik.young@pbfenergy.com

with a copy, which shall not constitute notice, to:

PBF Logistics GP LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jim Fedena, Senior Vice President

Telecopy No: (973) 455-7500

Email: jim.fedena@pbfenergy.com

or to such other address or to such other person as either Party shall have last designated by notice to the other Party.

ARTICLE 20

NO WAIVER; CUMULATIVE REMEDIES

20.1 No Waivers . The failure of a Party hereunder to assert a right or enforce an obligation of the other Party shall not be deemed a waiver of such right or obligation. The waiver by any Party of a breach of any provision of, or Event of Default under, this Agreement shall not operate or be construed as a waiver of any other breach of that provision or as a waiver of any breach of another provision of, Event of Default or potential Event of Default under, this Agreement, whether of a like kind or different nature.

20.2 Cumulative Remedies . Each and every right granted to the Parties under this Agreement or allowed it by law or equity, shall be cumulative and may be exercised from time to time in accordance with the terms thereof and Applicable Law.

ARTICLE 21

NATURE OF TRANSACTION, RELATIONSHIP OF PARTIES

AND REGULATORY STATUS

21.1 Independent Contractor . This Agreement shall not be construed as creating a partnership, association or joint venture among the Parties. It is understood that with respect to the services to be performed hereunder (a) the Operator Parties are an independent contractor with complete charge of its employees and agents in the performance of its duties hereunder, and nothing herein shall be construed to make the Operator Parties, or any employee or agent of the Operator Parties, an agent or employee of the Company Parties, and (b) the Company Parties are an independent contractor with complete charge of its employees and agents in the performance of its duties hereunder, and nothing herein shall be construed to make the Company Parties, or any employee or agent of the Company Parties, an agent or employee of the Operator Parties.

21.2 No Agency . No Party shall have the right or authority to negotiate, conclude or execute any contract or legal document with any third person in the name of other Party; to assume, create, or incur any liability of any kind, express or implied, against or in the name of any of the other Party; or to otherwise act as the representative of the other Party, unless expressly authorized in writing by the other Party.

21.3 Regulatory Status . It is understood and agreed that neither Party is a utility and is not holding itself out to the other Party, to any entity or to the public at large to provide any utility service, and that by entering into this Agreement and taking the actions it takes pursuant to this Agreement shall not make it a utility or constitute providing utility service. Each Party agrees that it shall not propose, advocate, support or claim in any manner that any Service or Ancillary Service provided hereunder is a utility service or should be regulated in any manner. In the event that any government agency issues a decision, order or finding in any form that any Service provided herein is a utility service or is subject to regulation, the Service or Ancillary Service in question shall immediately terminate, and the Parties agree to work with each other and any public utility commission to provide transition services.

ARTICLE 22

DISPUTE RESOLUTION

22.1 Procedure . In the event a dispute arises between the Company Parties and the Operator Parties regarding the application or interpretation of any provision of this Agreement, the Parties agree to use the procedures in this Article 22 to resolve any such disputes. Notwithstanding anything to the contrary contained herein, either Party may seek a restraining order, temporary injunction, or other provisional judicial relief if the Party in its sole judgment believes that such action is necessary to avoid irreparable injury or to preserve the status quo. The Parties will continue to participate in good faith in the procedures in this Article 22 despite any request for provisional relief.

22.2 Initial Resolution Attempts . Either Party may initiate the dispute resolution procedures by sending written notice to the Counterparty specifically stating the complaining Party’s claim and requesting dispute resolution in accordance with this Article 22 . The applicable statute of limitations shall be tolled as of the date of such written notice. No Event of Default shall occur if the subject matter underlying such potential Event of Default is the subject matter of any dispute that is pending resolution or arbitration under this Article 22 until such time that such dispute is resolved in accordance with this Article 22 .

(a) Within fourteen (14) days after the complaining Party delivers the complaint, the Services Council shall hold a meeting to resolve the dispute.

(b) If the matter has not been resolved by the Services Council within thirty (30) days of notice being delivered in accordance with Section 22.2(a ), unless the Services Council agrees to a longer period of time, the dispute shall become an Arbitrable Dispute and become subject to Section 22.3 .

22.3 Arbitration . Any and all Arbitrable Disputes (except to the extent injunctive relief is sought) shall be resolved through the use of binding arbitration using, in the case of an Arbitrable Dispute involving a dispute of an amount equal to or greater than $1,000,000 or non-monetary relief, three arbitrators, and in the case of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, one arbitrator, in each case in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code). If there is any inconsistency between this Article 22 and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Article 22 shall control the rights and obligations of the Parties. Arbitration must be initiated within the time limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or the time period allowed by the applicable statute of limitations. Arbitration may be initiated by a Party (“ Claimant ”) serving written notice on the other Party (“ Respondent ”) that Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice initiating binding arbitration must identify the arbitrator Claimant has appointed. Respondent shall respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying the arbitrator Respondent has appointed. If Respondent fails for any reason to name an arbitrator within the 30-day period, Claimant shall petition the American Arbitration Association for appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall select a third arbitrator within thirty (30) days after the second arbitrator has been appointed, and, in the case of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, such third arbitrator shall act as the sole arbitrator, and the sole role of the first two arbitrators shall be to appoint such third arbitrator. Claimant shall pay the compensation and expenses of the arbitrator named by or for it, and Respondent shall pay the compensation and

expenses of the arbitrator named by or for it. The costs of petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. Claimant and Respondent shall each pay one-half of the compensation and expenses of the third arbitrator. All arbitrators must (a) be neutral parties who have never been officers, directors or employees of the Operator, the Company or any of their Affiliates and (b) have not less than seven (7) years’ experience in the energy industry. The hearing shall be conducted in the State of Delaware or the Philadelphia Metropolitan area and commence within thirty (30) days after the selection of the third arbitrator. The Company, the Operator and the arbitrators shall proceed diligently and in good faith in order that the award may be made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of the arbitrators shall be binding on and non-appealable by the Parties hereto. The arbitrators shall have no right to grant or award Special Damages. Notwithstanding anything herein the contrary, the Company may not dispute any amounts with respect to an invoice delivered in accordance with Article 5 that the Company has not objected to within one hundred twenty (120) days of receipt thereof.

ARTICLE 23

GENERAL

23.1 Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be valid and effective under Applicable Law, but if any provision of this Agreement or the application of any such provision to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and the Parties shall negotiate in good faith with a view to substitute for such provision a suitable and equitable solution in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.

23.2 Entire Agreement . This Agreement and the Omnibus Agreement together constitute the entire agreement among the Parties pertaining to the subject matter hereof and supersede all prior agreements and understandings of the Parties in connection therewith. No promise, representation or inducement has been made by any of the Parties concerning the subject matter of this Agreement and none of the Parties shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

23.3 Time is of the Essence . Time is of the essence with respect to all aspects of each Party’s performance of any obligations under this Agreement.

23.4 No Third-Party Beneficiaries . It is expressly understood that the provisions of this Agreement do not impart enforceable rights in anyone who is not a Party or successor or permitted assignee of a Party.

23.5 Further Assurances . In connection with this Agreement and all transactions contemplated by this Agreement, each signatory Party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

23.6 Counterparts . This Agreement may be executed in one or more counterparts (including by facsimile or portable document format (pdf)) for the convenience of the Parties hereto,

each of which counterparts will be deemed an original, but all of which counterparts together will constitute one and the same agreement.

[ Remainder of Page Intentionally Left Blank ]

IN WITNESS WHEREOF, each Party hereto as caused this Agreement to be as of the date first above written.



			COMPANY:
			PBF HOLDING COMPANY LLC

			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Secretary



			DELAWARE CITY REFINING:
			DELAWARE CITY REFINING COMPANY LLC

			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Secretary



			TOLEDO REFINING:
			TOLEDO REFINING COMPANY LLC

			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Secretary



			TORRANCE REFINING:
			TORRANCE REFINING COMPANY LLC

			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Secretary



			TORRANCE LOGISTICS:
			TORRANCE LOGISTICS COMPANY LLC

			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Secretary

Signature Page to The Sixth Amended and Restated

Operation and Management Services and Secondment Agreement



			CHALMETTE REFINING:
			CHALMETTE REFINING, L . L . C .

			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Secretary



			PAULSBORO REFINING:
			PAULSBORO REFINING COMPANY LLC

			By:	/s/ Trecia Canty
				Name: Trecia Canty Title: Secretary



			GENERAL PARTNER:
			PBF LOGISTICS GP LLC

			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer



			OPERATOR:
			PBF LOGISTICS LP
			By: PBF LOGISTICS GP LLC, its general partner

			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer



			OPERATOR SUBSIDIARIES:
			DELAWARE CITY TERMINALING COMPANY

			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer

Signature Page to The Sixth Amended and Restated

Operation and Management Services and Secondment Agreement



			TOLEDO TERMINALING COMPANY LLC

			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer



			DELAWARE PIPELINE COMPANY LLC

			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer



			DELAWARE CITY LOGISTICS COMPANY LLC

			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer



			TOLEDO RAIL LOGISTICS COMPANY LLC

			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer



			CHALMETTE LOGISTICS COMPANY LLC

			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer



			PBFX OPERATING COMPANY LLC

			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer

Signature Page to The Sixth Amended and Restated

Operation and Management Services and Secondment Agreement



			PAULSBORO NATURAL GAS PIPELINE COMPANY LLC

			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer



			PAULSBORO TERMINALING COMPANY LLC

			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer



			DCR STORAGE AND LOADING LLC

			By:	/s/ Erik Young
				Name: Erik Young Title: Chief Financial Officer

Signature Page to The Sixth Amended and Restated

Operation and Management Services and Secondment Agreement

Exhibit A

Stormwater Discharge, Wastewater Treatment and Containment

Delaware City Refinery

West Ladder Rack


•	Sewer collection sumps in the area of the West Ladder Rack and the connecting piping to the Refinery waste water treatment plant

Delaware Products Rack


•	Sewer collection sumps in the area of the Delaware Products Rack and the connecting piping to the Refinery waste water treatment plant

Delaware Products Pipeline


•	Valved connection from the Delaware Products Pipeline storm sewer catch basin to the Refinery landfill area.


•	Treatment at the Refinery Waste Water Treatment Plant or Offtest oil system for oil accumulated and removed from the Delaware Products Pipeline storm water catch basin or product collection sumps.

Toledo Refinery

Tank Farm #2


•	Sewer line and piping to transport wastewater from sewer manhole #2004, located at Tank Farm #2 to Veolia for treatment


•	Operating agreement with Veolia for on-site treatment of wastewater

Rail Load Racks


•	Sewer collection sumps in the area of the Rail Load Racks and the connecting piping to Veolia for treatment

Chalmette Refinery

Chalmette Tank


•	Sewer collection sump in the diked area surrounding the Chalmette Tank and the connecting piping to the Refinery waste water treatment plant


•	Maintain Refinery’s existing containment area for use by Chalmette Tank

Rosin Rail Yard

A-1


•	Sewer collection sump(s) receiving storm water from the Rosin Rail Yard and the connecting piping to the Public storm water sewer system

Paulsboro Refinery

Paulsboro Terminaling Company


•	Sewer collection sumps in the area of the Lube oil tanks and piping and the connecting piping to the Refinery waste water treatment plant

A-2

Exhibit B

Steam

Delaware City Refinery

West Ladder Rack


•	175 psig steam piping delivery system at 75,000 lbs/hr from the natural gas fired package boiler


•	Natural gas piping system to the package boiler

Delaware Products Rack


•	175 psig steam piping delivery system from the refinery steam system

Delaware Products Pipeline


•	175 psig steam piping delivery system from the refinery steam system to the Pipeline Booster Station

Toledo Refinery

Tank Farm #2


•	Steam delivery system from the refinery steam system to Tank Farm #2

Rail Load Racks


•	Steam delivery system from the refinery steam system to the Rail Load Racks

Chalmette Refinery

Chalmette Truck Rack


•	Steam delivery system from the refinery steam system to Chalmette Truck Rack

B-1

Paulsboro Refinery

Paulsboro Terminaling Company


•	Steam delivery system from the refinery steam system to Tanks 1117, 594 and 595

B-2

Exhibit C

Potable Water

Delaware City Refinery

Delaware Products Rack


•	Water supply contract with United Water (for bathroom use, not potable)


•	Potable water supply from the Refinery water system

Toledo Refinery

Tank Farm #2


•	Potable water supply and firewater make up to #2 Tank Farm

Rail Load Racks


•	Potable water supply and firewater make up to Rail Load Racks

Chalmette Refinery

Chalmette Truck Rack


•	Potable water supply and firewater make up to Truck Rack

Rosin Rail Yard

Potable water supply and firewater make up to Rosin Rail Yard D-1

C-1

Exhibit D

Roads and Grounds

Delaware City Refinery


•	Access roads and associated grounds through the refinery property to the West Ladder Rack property, Delaware Products Rack and Delaware Products Pipeline

Chalmette Refinery


•	Access roads and associates grounds through the refinery property to the Chalmette Tank

Toledo Refinery


•	Access roads and associated grounds through the refinery property to the Truck Loading Rack and Rail Tracks

Paulsboro Refinery


•	Access roads and associated grounds through the refinery property to the Lube oil Storage Tanks and delivery piping

D-1

Exhibit E

Sanitary Sewer


•	Not applicable

E -1

Exhibit F

Electrical Power

Delaware City Refinery


•	One boiler and one turbo generator of the refinery electric power generation unit.


•	Loop-Electrical distribution system from the Boiler House, through switchgear 2 and feeder 66


•	WLR-Electrical distribution system from the Boiler House, through switchgears 14 and 15, feeders 70 and 71 and switchgear 450


•	Ethanol Tanks and pumps - Electrical distribution system from the Boiler House, through switchgears 10 and 7, feeder 40 and 41 to Switchhouse 40A.

Delaware Products Pipeline


•	Electrical distribution system from the Boiler House, through switchgears 7 & 10, feeders 44 & 45, sub-station 401, 2400v MCA 401-C and 401-D, to the Booster Pump Station pump motors


•	Electrical distribution system from the Boiler House, through switchgears 7 & 10, feeders 40/41, sub-station 402, 480v MCC 402-A, to the Booster Pump Station MOV’s.

Toledo Refinery


•	Electrical power supply from Toledo Edison


•	Electrical distribution system through substation 2, located on refinery property to substation 8, located on Tank Farm #2 property


•	Electrical distribution system to the Rail Load Racks

Chalmette Refinery


•	Electrical power supply from Switchrack PE292


•	Electrical distribution system to the Chalmette Truck Rack


•	Electrical distribution system to the Rosin Yard

Paulsboro Refinery


•	Electrical power supply internal generation or external purchase


•	Electrical distribution system to the Lube Air Tanks, pumps, lines and pig stations

F-1

Exhibit G

Emergency Response

Delaware City Refinery


•	Mutual Aid responders and equipment which would be needed in the event of a spill, fire, medical or other emergency, including ambulance, foam and pumper truck, foam supply

Toledo Refinery


•	Mutual Aid responders and equipment which would be needed in the event of a spill, fire, medical or other emergency, including ambulance, foam and pumper truck, foam supply


•	Firefighting equipment, including fire extinguishers, firewater piping and fixed monitors, at Rail Load Racks.

Chalmette Refinery


•	Mutual Aid responders and equipment which would be needed in the event of a spill, fire, medical or other emergency, including ambulance, foam and pumper truck, foam supply

Paulsboro Refinery


•	Mutual Aid responders and equipment which would be needed in the event of a spill, fire, medical or other emergency, including ambulance, foam and pumper truck, foam supply

G-1

Exhibit H

Filter Press


•	Not applicable

H-1

Exhibit I

Fuel Gas


•	Not applicable

I-1

Exhibit J

API Solids


•	Not applicable

J-1

Exhibit K

Fire Water

Delaware City Refinery


•	Raw water supply from United Water


•	Fire water supply from the refinery firewater pumps and system piping

Toledo Refinery


•	Fire water supply and connected refinery pumps P-1916, P-1917, P-1918 and P-1919

Chalmette Refinery


•	Fire water supply from the refinery firewater pumps and system piping.

Paulsboro Refinery


•	Fire water supply from the refinery firewater pumps and system piping.

K-1

Exhibit L

Instrument/Compressed Air

Delaware City Refinery


•	Single instrument air compressor rated at 350scfm at 85psig


•	Delivery piping system to the West Ladder Rack and Delaware Products Rack


•	Delivery piping system to the Ethanol Tanks and pumps

Toledo Refinery


•	Air compressor and dryer sufficient for Rail Load Racks


•	Delivery piping system to the Rail Load Racks

Chalmette Refinery


•	Air compressor and dryer sufficient for Chalmette Truck Rack


•	Delivery piping system to the Truck rack

Paulsboro Refinery


•	Air compressor and dryer sufficient for Lube oil assets


•	Delivery piping system to the Pig Stations on line 3 and 6.

L-1

Exhibit M

Rail Operations and Unloading

Delaware City Refinery

Loop Track


•	Railcar switching services to move railcars to and from the loop track, as needed and unloading crude from railcars

West Ladder Rack


•	Railcar switching services to move railcars to and from the West Ladder Rack, as needed, and unloading crude from railcars

Toledo Refinery


•	Maintenance and operational assistance to track crude unloading

Tank Farm #2


•	Maintenance and operational assistance to track crude unloading

Rail Tracks and Load Racks


•	Services to receive, switch, load and unload railcars at and on Rail Load Racks and Tracks.

Chalmette Refinery

Rosin Yard


•	Services to receive, switch, load and unload railcars in Rosin Yard

M-1

Exhibit N

Vent System

Delaware City Refinery

West Ladder Rack


•	Piping and compressor associated with the refinery lowline vent system

Delaware Products Rack


•	Piping and compressor associated with the refinery lowline vent system from the loading arms

N-1

Exhibit O

Diesel

Delaware City Refinery

West Ladder Track


•	The supply and delivery of diesel fuel for the use in locomotive engines supplied by the refinery through third party contract arrangement

Toledo Refinery


•	The supply and delivery of diesel fuel for the use in locomotive engines supplied by the refinery through third party contract arrangement

Chalmette Refinery


•	The supply and delivery of diesel fuel for the use in locomotive engines supplied by the refinery through third party contract arrangement

O-1

Exhibit P

Nitrogen

Delaware City Refinery

West Ladder Rack


•	The supply and delivery of nitrogen by the refinery through third party contract arrangements

Toledo Refinery

Rail Load Racks


•	The supply and delivery of nitrogen by the refinery through third party contract arrangements for benzene loading at the Scale Rack

P-1

Exhibit Q

Natural Gas

Toledo Refinery

Tank Farm #2


•	Natural gas supply to the operator building located on Tank Farm #2 property

Rail Load Racks


•	Natural gas supply to the benzene and butane rail load racks


•	Natural gas supply to the rail loading Vapor Combustion Unit(s)

Q-1

Exhibit R

Propane

Delaware City Refinery


•	Piping system from refinery propane storage tanks to the Delaware Products Rack Vapor Combustion Unit

R-1

Exhibit 10.4

Joinder Agreement

JOINDER AGREEMENT, dated as of September 7, 2018 (the “ Effective Date ”), made by DCR Storage and Loading LLC, a Delaware limited liability company, Chalmette Logistics Company LLC, a Delaware limited liability company, Toledo Rail Logistics Company LLC, a Delaware limited liability company, and Paulsboro Terminaling Company LLC, a Delaware limited liability company (each an “ Additional Guarantor ” and together, the “ Additional Grantors ”), in favor of Wells Fargo Bank, National Association, as Administrative Agent (in such capacity, the “ Administrative Agent ”) for the Secured Parties (as defined in the Credit Agreement referred to below). All capitalized terms not defined herein shall have the meaning ascribed to them in such Credit Agreement.

W I T N E S S E T H:

WHEREAS, PBF Logistics LP, a Delaware limited partnership (the “ Borrower ”), the financial institutions from time to time party thereto (the “ Lenders ”), and the Administrative Agent, have entered into that certain Amended and Restated Revolving Credit Agreement, dated as of July 30, 2018 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”);

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of the Borrower’s Subsidiaries have entered into that certain Amended and Restated Guaranty and Collateral Agreement, dated as of July 30, 2018 (as amended, supplemented or otherwise modified from time to time, the “ Guaranty and Collateral Agreement ”) in favor of the Administrative Agent for the benefit of the Secured Parties;

WHEREAS, the Credit Agreement requires each of the Additional Grantors to become a party to the Guaranty and Collateral Agreement; and

WHEREAS, each Additional Grantor has agreed to execute and deliver this Joinder Agreement in order to become a party to the Guaranty and Collateral Agreement;

NOW, THEREFORE, IT IS AGREED:

1. Guaranty and Collateral Agreement . By executing and delivering this Joinder Agreement, each Additional Grantor, as provided in Section 10.14 of the Guaranty and Collateral Agreement, hereby becomes a party to the Guaranty and Collateral Agreement as a Grantor (and therefore a Guarantor) thereunder with the same force and effect as if originally named therein as a Grantor and, without limiting the generality of the foregoing, hereby (a) gives the Guaranty provided for therein, (b) expressly assumes all obligations and liabilities of a Grantor and Guarantor thereunder and (c) expressly grants to the Administrative Agent, for the benefit of the Secured Parties, a security interest in all Collateral owned by each such Additional Grantor to secure all of the Obligations. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedules 1 through 4 to the Guaranty and Collateral Agreement and the information set forth in Annex 1-B is hereby added to the most recently delivered Perfection Certificate. Each Additional Grantor hereby represents and warrants that each of the representations and warranties contained in Article V of the Guaranty and Collateral Agreement is true and correct in all material respects (except that any such representations and warranties that are qualified by materiality shall be true and correct in all respects) on and as the date hereof (after giving effect to this Joinder Agreement) as if made on and as of such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case such representations and warranties were true and correct in all material respects (except that any such representations and warranties that are qualified by materiality shall be true and correct in all respects) as of such earlier date.

2. Governing Law . THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

3. Miscellaneous . This Joinder Agreement is a Loan Document executed in connection with the Credit Agreement. Delivery of an executed counterpart of a signature page of this Joinder Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Joinder Agreement.

[Signature Pages Follow]

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and delivered as of the date first above written.



			DCR STORAGE AND LOADING LLC
			a Delaware limited liability company

			By:	/s/ Erik Young
				Name: Erik Young Title: Senior Vice President and Chief Financial Officer



			CHALMETTE LOGISTICS COMPANY LLC
			a Delaware limited liability company

			By:	/s/ Erik Young
				Name: Erik Young Title: Senior Vice President and Chief Financial Officer



			TOLEDO RAIL LOGISTICS COMPANY LLC
			a Delaware limited liability company

			By:	/s/ Erik Young
				Name: Erik Young Title: Senior Vice President and Chief Financial Officer



			PAULSBORO TERMINALING COMPANY LLC
			a Delaware limited liability company

			By:	/s/ Erik Young
				Name: Erik Young Title: Senior Vice President and Chief Financial Officer

[Signature Page to Joinder Agreement]

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas J. Nimbley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PBF Logistics LP;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 31, 2018




/s/ Thomas J. Nimbley
Thomas J. Nimbley Chief Executive Officer PBF Logistics GP LLC, the general partner of PBF Logistics LP

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Erik Young, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PBF Logistics LP;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 31, 2018




/s/ Erik Young
Erik Young Senior Vice President and Chief Financial Officer PBF Logistics GP LLC, the general partner of PBF Logistics LP

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PBF Logistics LP on Form 10-Q for the quarter ended September 30, 2018 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas J. Nimbley, Chief Executive Officer of PBF Logistics GP LLC, the general partner of PBF Logistics LP, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:




1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and




2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of PBF Logistics LP.





/s/ Thomas J. Nimbley
Thomas J. Nimbley
Chief Executive Officer
PBF Logistics GP LLC,
the general partner of PBF Logistics LP
October 31, 2018

A signed original of the written statement required by Section 906 has been provided to PBF Logistics LP and will be retained by PBF Logistics LP and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PBF Logistics LP on Form 10-Q for the quarter ended September 30, 2018 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Erik Young, Senior Vice President and Chief Financial Officer of PBF Logistics GP LLC, the general partner of PBF Logistics LP, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:




1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and




2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of PBF Logistics LP.





/s/ Erik Young
Erik Young
Senior Vice President and Chief Financial Officer
PBF Logistics GP LLC,
the general partner of PBF Logistics LP
October 31, 2018

Exhibit 99.1

TVPC Stand-Alone FS\KASPER, BRANDEN\2/13/2018 5:21 PM

Torrance Valley Pipeline

Company LLC

Supplemental Information and Condensed Financial Statements

as of and for the three and nine months ended September 30, 2018 and 2017

Torrance Valley Pipeline Company LLC

Table of Contents



Financial Information	4
Condensed Balance Sheets	4
Condensed Statements of Operations	5
Condensed Statements of Cash Flows	6
Notes to the Condensed Financial Statements	7

Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

EXPLANATORY NOTE

Torrance Valley Pipeline Company LLC (“TVPC”) is a Delaware limited liability company (“LLC”) that owns and operates the San Joaquin Valley Pipeline system (the “Torrance Valley Pipeline”), which supports PBF Holding Company LLC’s (“PBF Holding”) Torrance Refinery. The Torrance Valley Pipeline consists of the M55, M1 and M70 pipeline systems, including pipeline stations with storage capacity and truck unloading capability.

The following financial information and condensed financial statements as of and for the three and nine months ended September 30, 2018 and 2017 , respectively, are being furnished as supplemental information to the PBF Logistics LP (“PBFX”) Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 . Unless the context otherwise requires, references in this document to “we,” “us” and “our” refer to Torrance Valley Pipeline Company LLC.

IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This document contains certain “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995, which involve risk and uncertainties. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates” or similar expressions that relate to our strategy, plans or intentions. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results or to our expectations regarding future industry trends are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results.

Important factors that could cause actual results to differ materially from our expectations, which we refer to as “cautionary statements,” are disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this document; and in our December 31, 2017 annual report (filed as exhibit 99.1 in PBFX’s Annual Report on Form 10-K for the year ended December 31, 2017) (“2017 Annual Report”). All forward-looking information in this document is expressly qualified in its entirety by the cautionary statements. Some of the factors that we believe could affect our results include:


•	our limited operating history;


•	changes in general economic conditions;


•	competitive conditions in our industry;


•	the supply of, and demand for, crude oil and logistics services;


•	our ability to successfully implement our business plan;


•	our dependence on contracts with PBF Energy Inc. (“PBF Energy”) for a substantial majority of our revenues subjects us to the business risks of PBF Energy, which includes 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 Torrance Refinery, and any adverse development at this facility could have a material adverse effect on us;


•	our ability to complete internal growth projects on time and on budget;


•	operating hazards and other risks incidental to handling crude oil;


•	natural disasters, weather-related delays, casualty losses and other matters beyond our control;


•	the effects of existing and future laws and governmental regulations;


•	the timing and extent of changes in commodity prices and demand for PBF Energy’s refined products 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; and


•	other factors discussed elsewhere in this document.

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 document 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 document or as of the date which they are made. Except as required by applicable law, including the securities laws of the United States, 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.

FINANCIAL INFORMATION

Torrance Valley Pipeline Company LLC

Condensed Balance Sheets

(Unaudited, in thousands)



	September 30, 2018		December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	8,209	$	4,411
Accounts receivable - affiliates	6,979		12,201
Prepaids and other current assets	504		448
Total current assets	15,692		17,060
Property, plant and equipment, net	327,312		335,106
Total assets	$	343,004	$	352,166
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable - affiliates	$	887	$	3,755
Accounts payable and accrued liabilities	3,992		4,505
Deferred revenue	93		47
Total current liabilities	4,972		8,307
Other long-term liabilities	226		409
Total liabilities	5,198		8,716

Commitments and contingencies (Note 4)

Equity	337,806		343,450
Total liabilities and equity	$	343,004	$	352,166

See notes to the condensed financial statements.

Torrance Valley Pipeline Company LLC

Condensed Statements of Operations

(Unaudited, in thousands)



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Revenue:
Affiliate	$	20,627	$	17,355	$	59,184	$	52,618
Third-party	20		15		56		40
Total revenue	20,647		17,370		59,240		52,658

Costs and expenses:
Operating and maintenance expenses	8,440		7,055		24,811		22,067
General and administrative expenses	213		213		638		638
Depreciation and amortization	2,755		2,719		8,209		8,156
Total costs and expenses	11,408		9,987		33,658		30,861

Net income	$	9,239	$	7,383	$	25,582	$	21,797

See notes to the condensed financial statements.

Torrance Valley Pipeline Company LLC

Condensed Statements of Cash Flows

(Unaudited, in thousands)



	Nine Months Ended September 30,
	2018			2017
Cash flows from operating activities:
Net income	$	25,582		$	21,797
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8,209			8,156
Changes in operating assets and liabilities:
Accounts receivable - affiliates	5,222			7,341
Prepaids and other current assets	(56		)	201
Accounts payable - affiliates	(2,868		)	(401		)
Accounts payable and accrued liabilities	(542		)	768
Deferred revenue	46			32
Other assets and liabilities	(182		)	(236		)
Net cash provided by operating activities	35,411			37,658

Cash flows from investing activities:
Expenditures for property, plant and equipment	(387		)	(506		)
Net cash used in investing activities	(387		)	(506		)

Cash flows from financing activities:
Distributions to members	(32,500		)	(34,695		)
Parent contributions	1,274			1,086
Net cash used in financing activities	(31,226		)	(33,609		)

Net change in cash and cash equivalents	3,798			3,543
Cash and Cash equivalents at beginning of period	4,411			6,849
Cash and Cash equivalents at end of period	$	8,209		$	10,392

Supplemental disclosure of non-cash activities
Accrued capital expenditures	$	85		$	36

See notes to the condensed financial statements.

TORRANCE VALLEY PIPELINE COMPANY LLC

NOTES TO THE CONDENSED FINANCIAL STATEMEMTS

(IN THOUSANDS)

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Description and Nature of the Business

PBF Holding, a Delaware LLC, together with its consolidated subsidiaries, owns and operates oil refineries and related facilities in North America. PBF Holding is a wholly-owned subsidiary of PBF Energy Company LLC (“PBF LLC”). PBF LLC is a holding company, whose assets consist of an ownership interest in PBF Holding and its consolidated subsidiaries and PBF Logistics LP (“PBFX”) and its subsidiaries. TVPC is a subsidiary of PBFX. PBF LLC, PBF Holding and PBFX are considered affiliate companies of TVPC for accounting purposes.

On July 1, 2016, PBF LLC, through its ownership of PBF Holding, acquired from ExxonMobil Oil Corporation and Mobil Pacific Pipeline Company the Torrance Refinery and related logistical assets, including the Torrance Valley Pipeline (the “TVPC Acquisition”). On August 31, 2016, PBFX, through its wholly-owned subsidiary, PBF Operating Company LLC (“PBFX Op Co”), acquired from PBF Holding, a 50% equity interest in TVPC. Subsequently PBFX Op Co became the sole managing member of TVPC. As this transaction was between affiliate companies, the transfer of the 50% ownership of TVPC is accounted for as a reorganization of entities under common control under U.S. generally accepted accounting principles (“GAAP”).

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with GAAP for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, TVPC has included all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and the results of operations and cash flows of TVPC for the periods presented. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the full year.

Recently Adopted Accounting Guidance

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

TVPC affiliate revenue is generated from commercial agreements that qualify as operating leases under GAAP. Leases are outside the scope of ASC 606 and are therefore accounted for in accordance with Accounting Standards Codification 840 “Leases.” Under these leasing agreements, TVPC provides access to storage tanks and/or use of throughput assets that convey the right to control the use of an identified asset to the customer. These lease arrangements account for $20,627 and $59,184 of TVPC’s revenue for the three and nine months ended September 30, 2018 , respectively.

TORRANCE VALLEY PIPELINE COMPANY LLC

NOTES TO THE CONDENSED FINANCIAL STATEMEMTS

(IN THOUSANDS)

Recent Accounting Pronouncements

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

2. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant, and equipment, net consisted of the following:



	September 30,			December 31,
	2018			2017

Land	$	83,330		$	83,330
Pipelines and equipment	267,765			266,466
Construction in progress	757			1,641
	351,852			351,437
Accumulated depreciation	(24,540		)	(16,331		)
Property, plant and equipment, net	$	327,312		$	335,106

TORRANCE VALLEY PIPELINE COMPANY LLC

NOTES TO THE CONDENSED FINANCIAL STATEMEMTS

(IN THOUSANDS)

3. EQUITY

Equity Activity

The following tables summarize the changes in the carrying amount of TVPC’s equity during the nine months ended September 30, 2018 and 2017 :



	Members’ Equity
Balance at December 31, 2017	$	343,450
Net income	25,582
Distributions to members	(32,500		)
Parent contributions	1,274
Balance at September 30, 2018	$	337,806



	Members’ Equity
Balance at December 31, 2016	$	356,868
Net income	21,797
Distributions to members	(34,695		)
Parent contributions	1,086
Balance at September 30, 2017	$	345,056

Cash Distributions

In accordance with TVPC’s LLC agreement, during the nine months ended September 30, 2018 , TVPC distributed $16,250 to each of its members, for total distributions of $32,500 .

4. COMMITMENTS AND CONTINGENCIES

Environmental Matters

TVPC’s assets 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 TVPC’s assets, including remediation, operating costs and capital costs to construct, maintain and upgrade equipment and facilities.

In connection with PBF Holding’s acquisition of the Torrance Refinery and related logistics assets, PBF Holding is responsible for all known and unknown environmental liabilities at each site acquired in connection with the acquisition. The total estimated liability of known environmental obligations associated with the Torrance Valley Pipeline was approximately $186 as of September 30, 2018 ($256 as of December 31, 2017). In accordance with the contribution agreement associated with the sale of 50% ownership of TVPC to PBFX, PBF Holding has indemnified PBFX for any and all costs associated with environmental remediation for obligations that existed on or before August 31, 2016, including all known or unknown events, which includes the recorded liability of approximately $186 . At September 30, 2018 , TVPC expects to make the full aggregate payment for this liability within the next five years. As a result of the indemnification, PBFX has recorded a receivable from PBF Holding for such anticipated payments related to the known pre-existing Torrance Valley Pipeline environmental obligations for which PBFX is indemnified.

TORRANCE VALLEY PIPELINE COMPANY LLC

NOTES TO THE CONDENSED FINANCIAL STATEMEMTS

(IN THOUSANDS)

Litigation

TVPC can be subject to claims and complaints that may arise in the ordinary course of business. Management has regular litigation reviews to assess the need for accounting recognition or disclosure of these contingencies. TVPC would accrue an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. TVPC wouldn’t record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and which are significant, TVPC would disclose the nature of the contingency and, where feasible, an estimate of the possible loss. For purposes of the contingency disclosures, “significant” includes material matters as well as other matters which management believes should be disclosed.

5. RELATED PARTY TRANSACTIONS

Commercial Agreements

TVPC currently derives the majority of its revenue from long-term, fee-based, agreements including MVCs with PBF Holding, supported by contractual fee escalations for inflation adjustments and certain increases in operating costs. TVPC believes the terms and conditions under these agreements, as well as the Omnibus Agreement (as defined below) and the Services Agreement (as defined below) each with 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 TVPC’s 2017 Annual Report for a more complete description of TVPC’s commercial agreements with PBF Holding.

Omnibus Agreement

At the closing of PBFX’s initial public offering, PBFX entered into an omnibus agreement with PBF Logistics GP LLC, PBF LLC and PBF Holding, which has been amended and restated in connection with the TVPC Acquisition (as amended, the “Omnibus Agreement”) for the provision of executive management services and support for accounting and finance, legal, human resources, information technology, environmental, health and safety, and other administrative functions.

Services Agreement

On August 31, 2016, PBFX Op Co entered into an operation and management services and secondment agreement (the “Services Agreement”) with PBF Holding and certain of its subsidiaries pursuant to which PBF Holding and its subsidiaries provides PBFX Op CO with the personnel necessary for PBFX Op Co to operate TVPC so that it may perform its obligations under the commercial agreements. PBFX Op Co charges TVPC the amount under the agreement and 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.

TORRANCE VALLEY PIPELINE COMPANY LLC

NOTES TO THE CONDENSED FINANCIAL STATEMEMTS

(IN THOUSANDS)

Summary of Transactions

A summary of revenue and expense transactions with PBF Holding, including expenses directly charged and allocated to TVPC, is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Revenues	$	20,627	$	17,355	$	59,184	$	52,618
Operating and maintenance expenses	475		475		1,425		1,425
General and administrative expenses	213		213		638		638

6. SUBSEQUENT EVENTS

TVPC has evaluated subsequent events through the date that this report was available to be issued, October 31, 2018, and determined that there were no subsequent events requiring recognition or disclosure in the accompanying condensed financial statements and notes to the condensed financial statements.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information concerning our results of operations and financial condition should be read in conjunction with the financial statements and accompanying notes to the condensed financial statements.

Overview

We are a Delaware limited liability company that owns and operates the San Joaquin Valley Pipeline system, which supports PBF Holding’s Torrance Refinery. The Torrance Valley Pipeline consists of the M55, M1 and M70 pipeline systems, including pipeline stations with storage capacity and truck unloading capability.

PBF Holding, a Delaware LLC, together with its consolidated subsidiaries, owns and operates oil refineries and related facilities in North America. PBF Holding is a wholly-owned subsidiary of PBF Energy Company LLC (“PBF LLC”). PBF LLC is a holding company, whose assets consist of ownership interests in PBF Holding and its consolidated subsidiaries and PBFX and its subsidiaries. We are a subsidiary of PBFX. PBF LLC, PBF Holding and PBFX are considered affiliate companies of ours for accounting purposes.

On July 1, 2016, PBF LLC, through its ownership of PBF Holding, acquired from ExxonMobil Oil Corporation and Mobil Pacific Pipeline Company the Torrance Refinery and related logistical assets, including the Torrance Valley Pipeline (the “TVPC Acquisition”). On August 31, 2016, PBFX, through its wholly-owned subsidiary, PBFX Operating Company LLC (“PBFX Op Co”), acquired from PBF Holding, a 50% equity interest in us. Subsequently, PBFX Op Co became our sole managing member. As this transaction was between affiliate companies, the transfer of the 50% ownership is accounted for as a reorganization of entities under common control under U.S. generally accepted accounting principles (“GAAP”).

Business Strategies

We continue to focus on the following strategic areas:

•

Maintain Safe, Reliable and Efficient Operations. We are committed to maintaining and improving the safety, reliability, environmental compliance and efficiency of our operations. We seek to improve operating performance through our commitment to our preventive maintenance program and to employee training and development programs. We will continue to emphasize safety in all aspects of our operations. We believe these objectives are integral to maintaining stable cash flows and are critical to the success of our business.


•	Generate Stable, Fee-Based Cash Flow. We believe our long-term, fee-based logistics contracts provide us with stable, predictable cash flows. We generate a majority of our revenue from PBF Energy under commercial agreements which include minimum quarterly volume commitments, minimum storage commitments, inflation escalators and initial terms of ten years.

How We Evaluate Our Operations

Our management uses a variety of financial and operating metrics to analyze our business. These metrics are significant factors in assessing our operating results and profitability and include but are not limited to volumes, including pipeline throughput and storage capacity and operating and maintenance expenses.

Volumes. The amount of revenue we generate primarily depends on the volumes of crude oil that we throughput at our pipeline operations and our available storage capacity. These volumes are primarily affected by the supply of and demand for crude oil in the markets served directly or indirectly by our assets. Although PBF Energy has committed to minimum volumes under the commercial agreements described above, our results of operations will be impacted by:


•	PBF Energy’s utilization of our assets in excess of the minimum volume commitments (“MVCs”);


•	our ability to identify and execute organic expansion projects, and capture PBF Energy’s incremental volumes or third-party volumes; and


•	our ability to increase throughput volumes at our facilities and provide additional ancillary services at those pipelines.

Operating and Maintenance Expenses. Our management seeks to maximize the profitability of our operations by effectively managing operating and maintenance expenses. These expenses are comprised primarily of labor expenses, outside contractor expenses, utility costs, and repairs and maintenance. These expenses generally remain relatively stable across broad ranges of throughput volumes but can fluctuate from period to period depending on the mix of activities performed during that period and the timing of these expenses. We will seek to manage our maintenance expenditures on our assets by scheduling maintenance over time to avoid significant variability in our maintenance expenditures and to minimize their impact on our cash flow.

Other Factors That Will Significantly Affect Our Results

Supply and Demand for Crude Oil. We generate a majority of our revenue by charging fees for receiving, handling, transferring, storing and throughputting crude oil. The majority of our revenues are derived from fee-based commercial agreements with PBF Energy’s Torrance Refinery with initial terms of ten years and including MVCs, which enhance the stability of our cash flows. The volume of crude oil that is throughput depends substantially on PBF Energy’s refining margins. Refining margins are greatly dependent upon the price of crude oil or other refinery feedstocks, the price of refined products and the price of natural gas.

Results of Operations

A discussion and analysis of the factors contributing to our results of operations is presented below. The condensed financial statements, together with the following information, are intended to provide investors with a reasonable basis for assessing our historical operations, but should not serve as the only criteria for predicting our future performance.

Combined Overview . The following tables summarize our results of operations and financial data for the three and nine months ended September 30, 2018 and 2017 . The following data should be read in conjunction with our condensed financial statements and the notes thereto included elsewhere in this document.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(in thousands)
Revenue:
Affiliate	$	20,627	$	17,355	$	59,184	$	52,618
Third-party	20		15		56		40
Total revenue	20,647		17,370		59,240		52,658

Costs and expenses:
Operating and maintenance expenses	8,440		7,055		24,811		22,067
General and administrative expenses	213		213		638		638
Depreciation and amortization	2,755		2,719		8,209		8,156
Total costs and expenses	11,408		9,987		33,658		30,861

Net income	$	9,239	$	7,383	$	25,582	$	21,797

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

Summary. Our net income for the three months ended September 30, 2018 increased approximately $1.9 million , or 25.1% , to $9.2 million from $7.4 million for the three months ended September 30, 2017 . The increase in net income was primarily due to the following:

•

an increase in revenue of approximately $3.3 million , or 18.9% , to $20.6 million , which was primarily attributable to an increase in ancillary fees charged to the customer (approximately $1.4 million) and the January 1, 2018 inflation rate adjustments implemented in accordance with our commercial agreements (approximately $0.4 million). The remaining increase is attributable to an increase in throughput among all of our assets;


•	partially offset by the following:

◦

an increase in operating and maintenance expenses of approximately $1.4 million , or 19.6% , which was primarily attributable to an increase in salaries (approximately $0.1 million), insurance (approximately $0.1 million), maintenance (approximately $0.5 million) and energy costs (approximately $1.4 million), partially offset by a reduction in property tax (approximately $0.4 million) and outside services (approximately $0.3 million).


•	General and administrative expenses remained consistent at approximately $0.2 million for both the three months ended September 30, 2018 and 2017 .


•	Depreciation and amortization expenses remained relatively consistent at approximately $2.8 million and approximately $2.7 million for the three months ended September 30, 2018 and 2017 , respectively.

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

Summary. Our net income for the nine months ended September 30, 2018 increased approximately $3.8 million , or 17.4% , to $25.6 million from $21.8 million for the nine months ended September 30, 2017 . The increase in net income was primarily due to the following:

•

an increase in revenue of approximately $6.6 million , or 12.5% , to $59.2 million , which was primarily attributable to an increase in ancillary fees charged to the customer (approximately $2.9 million) and the January 1, 2018 inflation rate adjustments implemented in accordance with our commercial agreements (approximately $1.2 million). The remaining increase is attributable to an increase in throughput among all of our assets;


•	partially offset by the following:


◦	an increase in operating and maintenance expenses of approximately $2.7 million , or 12.4% , which was primarily attributable to an increase in salaries (approximately $0.4 million), property tax (approximately $0.4 million), maintenance (approximately $1.5 million) and energy costs (approximately $2.9 million), partially offset by a reduction in outside services (approximately $2.5 million).


•	General and administrative expenses remained consistent at approximately $0.6 million for both the nine months ended September 30, 2018 and 2017 .


•	Depreciation and amortization expenses remained consistent at approximately $8.2 million for both the nine months ended September 30, 2018 and 2017 .

Liquidity and Capital Resources

Our sources of liquidity primarily consist of cash flows from operations, which we expect will be adequate to provide for our short-term and long-term liquidity needs. Our ability to meet our capital requirements, including capital expenditures and distributions, will depend on our future operating performance which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are beyond our control.

We intend to continue to pay, at least quarterly, distributions to our members in accordance with our LLC agreement. During the nine months ended September 30, 2018 , we distributed $16.3 million to each of our members.

Cash Flows

The following table sets forth our cash flows for the periods indicated:



	Nine Months Ended September 30,
	2018			2017
	(in thousands)
Net cash provided by operating activities	$	35,411		$	37,658
Net cash used in investing activities	(387		)	(506		)
Net cash used in financing activities	(31,226		)	(33,609		)
Net change in cash and cash equivalents	$	3,798		$	3,543

Cash Flows from Operating Activities

Net cash provided by operating activities decreased approximately $2.2 million to $35.4 million for the nine months ended September 30, 2018 compared to $37.7 million for the nine months ended September 30, 2017 . The decrease in net cash provided by operating activities was primarily the result of a net decrease in the net changes in operating assets and liabilities of approximately $6.1 million primarily driven by the timing of collection of accounts receivables and liability payments, partially offset by net income and non-cash charges relating to depreciation and amortization of approximately $33.8 million for the nine months ended September 30, 2018 , compared to approximately $30.0 million for the nine months ended September 30, 2017 .

Cash Flows from Investing Activities

Net cash used in investing activities remained relatively consistent at approximately $0.4 million and approximately $0.5 million for the nine months ended September 30, 2018 and 2017 , respectively.

Cash Flows from Financing Activities

Net cash used in financing activities decreased approximately $2.4 million to $31.2 million for the nine months ended September 30, 2018 compared to $33.6 million for the nine months ended September 30, 2017 . The decrease in net cash used in financing was primarily the result of distributions to members of approximately $32.5 million for the nine months ended September 30, 2018 , compared to distributions to members of approximately $34.7 million for the nine months ended September 30, 2017 , partially offset by an increase in parent contributions of $0.2 million .

Capital Expenditures

We currently expect to spend up to an aggregate of approximately $1.0 million for the remainder of 2018 for capital expenditures, the majority of which will relate to maintenance and regulatory capital expenditures. We anticipate the forecasted maintenance and regulatory capital expenditures will be funded primarily with cash from operations.

Contractual Obligations

There have been no significant changes in our obligations since those reported in our 2017 Annual Report. Refer to Note 4 “Commitments and Contingencies” in our notes to the condensed financial statements for additional information regarding our obligations.

Off-Balance Sheet Arrangements

We have not entered into any transactions, agreements or other contractual arrangements that would result in off-balance sheet liabilities.

Environmental and Other Matters

Environmental Regulation

Environmental Liabilities

Contaminations resulting from spills of crude oil or petroleum products are not unusual within the petroleum terminaling or transportation industries. Historic spills at truck and rail racks, and terminals as a result of past operations have resulted in contamination of the environment, including soils and groundwater.

As of September 30, 2018 , we have recorded a total liability related to environmental remediation costs of $0.2 million related to the Torrance Valley Pipeline. Refer to Note 4 “Commitments and Contingencies” in our notes to the condensed financial statements.