PBF Energy 2012 Annual Report Download - page 74

Liquidity and Capital Resources
Overview
Our primary source of liquidity is our cash flows from operations and borrowing availability under our
credit facilities, as more fully described below. We believe that our cash flows from operations and available
capital resources will be sufficient to meet our capital expenditure, working capital, dividend payments and debt
service requirements for the next twelve months. However, our ability to generate sufficient cash flow from
operations depends, in part, on oil market pricing and general economic, political and other factors beyond our
control. We believe we could, during periods of economic downturn, access the capital markets and/or other
available financial resources or reduce our capital and discretionary expenditure plans to strengthen our financial
position.
Cash Flow Analysis
Cash Flows from Operating Activities
Net cash provided by operating activities was $812.4 million for the year ended December 31, 2012
compared to net cash provided by operating activities of $249.3 million for the year ended December 31, 2011.
During the 2011 period, our cash flows reflect only ten months of operations of our Toledo refinery, which was
acquired on March 1, 2011, and limited operations at our Delaware City refinery, which was not fully operational
until October 2011. Our operating cash flows for the year ended December 31, 2012 included our net income of
$804.0 million, plus net non-cash charges relating to depreciation and amortization of $97.7 million, pension and
other post retirement benefits of $12.7 million, changes in the fair value of our catalyst lease and Toledo
contingent consideration obligations of $6.4 million, change in the fair value of our inventory repurchase
obligations of $4.6 million, the write-off of unamortized deferred financing fees related to retired debt of
$4.4 million and stock-based compensation of $2.9 million, partially offset by a gain on asset sales of
$2.3 million. In addition, net changes in working capital used $118.0 million in cash driven by increases in
hydrocarbon purchases and sales volumes and their associated impact on inventory, accounts receivable, and
hydrocarbon-related liabilities. Our operating cash flows for the year ended December 31, 2011 included our net
income of $242.7 million, plus net non-cash charges relating to depreciation and amortization of $56.9 million,
pension and other post retirement benefits of $9.8 million, change in the fair value of the Toledo contingent
consideration of $5.2 million and stock-based compensation of $2.5 million, change in the fair value of our
inventory repurchase obligations of $25.3 million, partially offset by changes in the fair value of our catalyst
lease obligations of $7.3 million, and net cash used in working capital of $85.8 million.
Net cash provided by operating activities was $249.3 million for the year ended December 31, 2011
compared to net cash used in operating activities of $1.2 million for the year ended December 31, 2010. During
2011, our operations were comprised primarily of a full year of operations of our Paulsboro refinery, ten months
of operations of our Toledo refinery, which was acquired on March 1, 2011, and activities to turnaround,
reconfigure and re-start our Delaware City refinery. We began re-starting our Delaware City refinery in June
2011 and it was fully operational in October 2011. During most of 2010, we were a development stage company
focused on the acquisition of oil refineries and other downstream assets in North America and activities to
turnaround, reconfigure and re-start our Delaware City refinery. Our cash flow in 2010 was related to those
activities, plus the results of operations of our Paulsboro refinery for the period from December 17, 2010 to
December 31, 2010.
Cash Flows from Investing Activities
Net cash used in investing activities was $219.3 million for the year ended December 31, 2012 compared to
net cash used in investing activities of $739.2 million for the year ended December 31, 2011. The net cash flows
used in investing activities in the 2012 period was comprised of capital expenditures totaling $175.9 million,
expenditures for turnarounds of $38.6 million, primarily at our Toledo refinery, and expenditures for other assets
of $8.2 million, partially offset by $3.4 million in proceeds from the sale of assets. Net cash used in investing
66