PBF Energy 2012 Annual Report Download - page 137

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PBF ENERGY INC. AND SUBSIDIARIES
(COMBINED AND CONSOLIDATED WITH PBF ENERGY COMPANY LLC AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT AND BARREL DATA)
16 - EMPLOYEE BENEFIT PLANS (Continued)
Defined Benefit and Post Retiree Medical Plans (Continued)
Assumed health care costs trend rates have a significant effect on the amounts reported for retiree health care
plans. A one percentage-point change in assumed health care costs trend rates would have the following effects
on the medical postretirement benefits:
1%
Increase
1%
Decrease
Effect on total of service and interest cost components ...... $ 144 $(123)
Effect on accumulated postretirement benefit obligation ..... 1,137 (994)
The tables below present the fair values of the assets of the Company’s Qualified Plan as of December 31, 2012
and 2011 by level of fair value hierarchy. Assets categorized in Level 1 of the hierarchy are measured at fair
value using a market approach based on published net asset values of mutual funds. As noted above, the
Company’s post retirement medical plan is funded on a pay-as-you-go basis and has no assets.
Fair Value Measurements Using
Quoted Prices in Active Markets
(Level 1)
December 31,
2012 2011
Government securities:
Vanguard Intermediate-Term Treasury Fund . . . $10,232 $4,758
Cash and cash equivalents ................. — —
Total ...................................... $10,232 $4,758
The Company’s investment strategy for its Qualified Plan is to achieve a reasonable return on assets that supports
the plan’s interest credit rating, subject to a moderate level of portfolio risk that provides liquidity. Consistent
with these financial objectives as of December 31, 2012, the plan assets were 100% intermediate fixed income
investments. The overall expected long-term rate of return on plan assets for the Qualified Plan is based on the
Company’s view of long-term expectations and asset mix.
17 - FAIR VALUE MEASUREMENTS
The tables below present information about the Company’s financial assets and liabilities measured and recorded
at fair value on a recurring basis and indicate the fair value hierarchy of the inputs utilized to determine the fair
values as of December 31, 2012 and 2011.
As of December 31, 2012
Level 1 Level 2 Level 3 Total
Assets:
Money market funds ......................... $175,786 $ — $ — $175,786
Commodity contracts ........................ 3,303 — — 3,303
Derivatives included with inventory supply
arrangement obligations .................... — 5,595 — 5,595
Liabilities:
Catalyst lease obligations ..................... — 43,442 — 43,442
Commodity contracts ........................ — 1,872 — 1,872
Contingent consideration for refinery acquisition . . . — — 21,358 21,358
F-45