PBF Energy 2012 Annual Report Download - page 38

Our rapid growth may strain our resources and divert management’s attention.
We were a development stage enterprise prior to our acquisition of Paulsboro on December 17, 2010. With the
further acquisition of Toledo and the re-start of Delaware City, we have experienced rapid growth in a short period
of time. Continued expansion may strain our resources and force management to focus attention from other business
concerns to the development of incremental internal controls and procedures, which could harm our business and
operating results. We may also need to hire more employees, which will increase our costs and expenses.
We rely on Statoil and MSCG, over whom we may have limited control, to provide us with certain volumetric
and pricing data used in our inventory valuations.
We rely on Statoil and MSCG to provide us with certain volumetric and pricing data used in our inventory
valuations. Our limited control over the accuracy and the timing of the receipt of this data could materially and
adversely affect our ability to produce financial statements in a timely manner.
Changes in our credit profile could adversely affect our business.
Changes in our credit profile could affect the way crude oil suppliers view our ability to make payments and
induce them to shorten the payment terms for our purchases or require us to post security or letters of credit prior
to payment. Due to the large dollar amounts and volume of our crude oil and other feedstock purchases, any
imposition by our suppliers of more burdensome payment terms on us may have a material adverse effect on our
liquidity and our ability to make payments to our suppliers. This, in turn, could cause us to be unable to operate
one or more of our refineries at full capacity.
We could incur substantial costs or disruptions in our business if we cannot obtain or maintain necessary
permits and authorizations.
Our operations require numerous permits and authorizations under various laws and regulations, including
environmental and health and safety laws and regulations. These authorizations and permits are subject to
revocation, renewal or modification and can require operational changes, which may involve significant costs, to
limit impacts or potential impacts on the environment and/or health and safety. A violation of these
authorizations or permit conditions or other legal or regulatory requirements could result in substantial fines,
criminal sanctions, permit revocations, injunctions and/or refinery shutdowns. In addition, major modifications of
our operations could require changes to our existing permits or expensive upgrades to our existing pollution
control equipment, which could have a material adverse effect on our business, financial condition or results of
operations.
Risks Related to Our Indebtedness
Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our
obligations under our indebtedness.
Our substantial indebtedness may significantly affect our financial flexibility in the future. As of
December 31, 2012, we have total long-term debt including the Delaware Economic Development Authority
Loan, of $730.0 million, all of which is secured, and we could have incurred an additional $599.2 million of
senior secured indebtedness under our existing debt agreements. We may incur additional indebtedness in the
future. Our strategy includes executing future refinery acquisitions. Any significant acquisition would likely
require us to incur additional indebtedness in order to finance all or a portion of such acquisition. The level of our
indebtedness has several important consequences for our future operations, including that:
• a significant portion of our cash flow from operations will be dedicated to the payment of principal of,
and interest on, our indebtedness and will not be available for other purposes;
• covenants contained in our existing debt arrangements limit our ability to borrow additional funds,
dispose of assets and make certain investments;
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