PBF Energy 2012 Annual Report Download - page 86

We may also use non-trading derivative instruments to manage price risks associated with inventories above or
below a baseline we set for our target levels of hydrocarbon inventories. We may engage in the purchase and sale
of physical commodities, derivatives, options, over-the-counter products and various exchange-traded
instruments. We mark-to-market our derivative instruments and recognize the changes in their fair value in our
statements of operations.
Interest Rate Risk
During 2012, we amended the terms of our ABL Revolving Credit Facility to increase the size of our asset-
based revolving credit facility from $500.0 million to $1.575 billion. Borrowings under our ABL Revolving
Credit Facility bear interest at the Adjusted LIBOR Rate plus 1.75% to 2.50%, depending on our debt rating. If
this facility were fully drawn, a one percent change in the interest rate would increase or decrease our interest
expense by $15.8 million annually.
We also have interest rate exposure in connection with our Statoil and MSCG crude oil and offtake
agreements under which we pay a time value of money charge based on LIBOR.
Credit Risk
We are subject to risk of losses resulting from nonpayment or nonperformance by our customers. We will
continue to closely monitor the creditworthiness of customers to whom we grant credit and establish credit limits
in accordance with our credit policy.
Concentration Risk
MSCG and Sunoco accounted for 57% and 10%, respectively, of our total sales for the year ended
December 31, 2012 and 52% and 12%, respectively, of our total sales for the year ended December 31, 2011.
Sunoco and Statoil accounted for 10% and 28%, respectively, of total trade accounts receivable as of
December 31, 2012 and 19% and 11%, respectively, of total trade accounts receivable as of December 31, 2011.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is set forth beginning on page F-1 of this Annual Report on
Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company maintains a system of disclosure controls and procedures that is designed to provide
reasonable assurance that information which is required to be disclosed is accumulated and communicated to
management in a timely manner. Under the supervision and with the participation of our management, including
the Company’s principal executive officer and the principal financial officer, we have evaluated the effectiveness
of our system of disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of
December 31, 2012. Based on that evaluation, the Company’s principal executive officer and the principal
financial officer have concluded that the Company’s disclosure controls and procedures are effective at the
reasonable assurance level.
78