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PBF ENERGY INC. AND
PBF HOLDING COMPANY LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT, PER SHARE, PER UNIT AND BARREL DATA)
F- 21
Reclassification
Certain amounts previously reported in the Company's consolidated financial statements for the year ended
December 31, 2012 have been reclassified to conform to the 2013 presentation.
Use of Estimates
The preparation of the financial statements in conformity with U.S. generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses and the related disclosures. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash
equivalents. The carrying amount of the cash equivalents approximates fair value due to the short-term maturity
of those instruments.
Concentrations of Credit Risk
For the year ended December 31, 2013, Morgan Stanley Capital Group Inc. (“MSCG”) and Sunoco, Inc. (R&M)
(“Sunoco”) accounted for 29% and 10% of the Company’s revenues, respectively. As of December 31, 2013,
Sunoco accounted for 10% of accounts receivable.
For the year ended December 31, 2012, MSCG and Sunoco accounted for 57% and 10% of the Company’s revenues,
respectively. As of December 31, 2012, Statoil Marketing and Trading (US) Inc. ("Statoil") and Sunoco accounted
for 28% and 10% of accounts receivables, respectively.
For the year ended December 31, 2011, MSCG and Sunoco accounted for 52% and 12% of the Company’s revenues,
respectively.
Revenue, Deferred Revenue and Accounts Receivable
The Company sells various refined products primarily through its refinery subsidiaries and recognizes revenue
related to the sale of products when there is persuasive evidence of an agreement, the sales prices are fixed or
determinable, collectability is reasonably assured and when products are shipped or delivered in accordance with
their respective agreements. Revenue for services is recorded when the services have been provided. The Company’s
Toledo refinery has a products offtake agreement with Sunoco under which Sunoco purchases approximately one-
third of the refinery’s daily gasoline production. The Toledo refinery also sells its products through short-term
contracts or on the spot market.
Prior to June 30, 2013, the Company’s Paulsboro and Delaware City refineries sold light finished products, certain
intermediates and lube base oils to MSCG under products offtake agreements with each refinery (the “Offtake
Agreements”). On a daily basis, MSCG purchased and paid for the refineries’ production of light finished products
as they were produced, delivered to the refineries’ storage tanks, and legal title passed to MSCG. Revenue on
these product sales was deferred until they shipped out of the storage facility by MSCG.
Under the Offtake Agreements, the Company’s Paulsboro and Delaware City refineries also entered into purchase
and sale transactions of certain intermediates and lube base oils whereby MSCG purchased and paid for the
refineries’ production of certain intermediates and lube products as they were produced and legal title passed to
MSCG. The intermediate products were held in the refineries’ storage tanks until they were needed for further use
in the refining process. The intermediates may also have been sold to third parties. The refineries had the right to
repurchase lube products and did so to supply other third parties with that product. When the refineries needed
intermediates or lube products, the products were drawn out of the storage tanks, title passed back to the refineries
and MSCG was paid for those products. These transactions occurred at the daily market price for the related
products. These transactions were considered to be made in contemplation of each other and, accordingly, did not
result in the recognition of a sale when title passed from the refineries to MSCG. Inventory remained at cost and