PBF Energy 2012 Annual Report Download - page 30

specifically, the cost of obtaining money from the credit markets may increase as many lenders and institutional
investors increase interest rates, enact tighter lending standards, refuse to refinance existing debt on similar terms
or at all and reduce or, in some cases, cease to provide funding to borrowers. Due to these factors, we cannot be
certain that new debt or equity financing will be available on acceptable terms. If funding is not available when
needed, or is available only on unfavorable terms, we may be unable to meet our obligations as they come due.
Moreover, without adequate funding, we may be unable to execute our growth strategy, complete future
acquisitions, take advantage of other business opportunities or respond to competitive pressures, any of which
could have a material adverse effect on our revenues and results of operations.
Competition from companies who produce their own supply feedstocks, have extensive retail outlets, make
alternative fuels or have greater financial and other resources than we do could materially and adversely
affect our business and results of operations.
Our refining operations compete with domestic refiners and marketers in regions of the United States in
which we operate, as well as with domestic refiners in other regions and foreign refiners that import products into
the United States. In addition, we compete with producers and marketers in other industries that supply
alternative forms of energy and fuels to satisfy the requirements of our industrial, commercial and individual
consumers. Certain of our competitors have larger and more complex refineries, and may be able to realize lower
per-barrel costs or higher margins per barrel of throughput. Several of our principal competitors are integrated
national or international oil companies that are larger and have substantially greater resources than we do and
access to proprietary sources of controlled crude oil production. Unlike these competitors, we obtain substantially
all of our feedstocks from unaffiliated sources. We are not engaged in the petroleum exploration and production
business and therefore do not produce any of our crude oil feedstocks. We do not have a retail business and
therefore are dependent upon others for outlets for our refined products. Because of their integrated operations
and larger capitalization, these companies may be more flexible in responding to volatile industry or market
conditions, such as shortages of crude oil supply and other feedstocks or intense price fluctuations.
Newer or upgraded refineries will often be more efficient than our refineries, which may put us at a
competitive disadvantage. We have taken significant measures to maintain our refineries including the installation
of new equipment and redesigning older equipment to improve our operations. However, these actions involve
significant uncertainties, since upgraded equipment may not perform at expected throughput levels, the yield and
product quality of new equipment may differ from design specifications and modifications may be needed to correct
equipment that does not perform as expected. Any of these risks associated with new equipment, redesigned older
equipment or repaired equipment could lead to lower revenues or higher costs or otherwise have an adverse effect
on future results of operations and financial condition. Over time, our refineries may become obsolete, or be unable
to compete, because of the construction of new, more efficient facilities by our competitors.
Any political instability, military strikes, sustained military campaigns, terrorist activity, or changes in foreign
policy could have a material adverse effect on our business, results of operations and financial condition.
Any political instability, military strikes, sustained military campaigns, terrorist activity, or changes in
foreign policy in areas or regions of the world where we acquire crude oil and other raw materials or sell our
refined petroleum products may affect our business in unpredictable ways, including forcing us to increase
security measures and causing disruptions of supplies and distribution markets. We may also be subject to United
States trade and economic sanctions laws, which change frequently as a result of foreign policy developments,
and which may necessitate changes to our crude oil acquisition activities. Further, like other industrial
companies, our facilities may be the target of terrorist activities. Any act of war or terrorism that resulted in
damage to any of our refineries or third-party facilities upon which we are dependent for our business operations
could have a material adverse effect on our business, results of operations and financial condition.
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