PBF Energy 2013 Annual Report Download - page 67

60
expenses due to increased energy costs, repair and restart costs related to the Toledo fire, turnaround at the Delaware
City refinery, as well as higher costs of compliance with the Renewable Fuels Standard.
Revenues— Revenues totaled $19.2 billion for the year ended December 31, 2013 compared to $20.1 billion
for the year ended December 31, 2012, a decrease of $1.0 billion, or 4.9%. For the year ended December 31, 2013,
the total throughput rates in the East Coast and Mid-Continent refineries averaged approximately 310,300 bpd and
142,500 bpd, respectively. For the year ended December 31, 2012, the total throughput rates at our East Coast and
Mid-Continent refineries averaged approximately 316,000 bpd, and 147,200 bpd, respectively. The decrease in
throughput rates at our East Coast refineries in 2013 compared to 2012 was primarily driven by market factors
including narrower crude differentials for rail-delivered crude as well as the Delaware City coker unit turnaround
which reduced crude run rates during the period. The decrease in throughput rates at our Mid-Continent refinery
in 2013 compared to 2012 was primarily due to the refinery's 18-day unplanned down time in the first quarter of
2013, attributable to the fire at the Toledo refinery as described above, as well as refinery maintenance. For the
year ended December 31, 2013, the total barrels sold at our East Coast and Mid-Continent refineries averaged
approximately 307,600 bpd and 153,700 bpd, respectively. For the year ended December 31, 2012, the total barrels
sold at our East Coast and Mid-Continent refineries averaged approximately 311,900 bpd and 159,000 bpd,
respectively. Total barrels sold at our Mid-Continent refinery are typically higher than throughput rates, reflecting
sales and purchases of refined products outside the refinery. Total barrels sold at our East Coast refineries typically
reflect inventory movements in addition to throughput rates.
Gross Margin— Gross refining margin (as defined below in Non-GAAP Financial Measures) totaled $1,348.1
million, or $8.16 per barrel of throughput, for the year ended December 31, 2013 compared to $1,869.6 million,
or $11.03 per barrel of throughput during the year ended December 31, 2012, a decrease of $521.5 million. Gross
margin, including refinery operating expenses and depreciation, totaled $436.9 million, or $2.64 per barrel of
throughput, for the year ended December 31, 2013, compared to $1,046.6 million, or $6.17 per barrel of throughput,
for the year ended December 31, 2012, a decrease of $609.7 million. The decrease in gross refining margin was
primarily due to reduced throughput rates, unfavorable movement in crude differentials, and higher costs of
compliance with the Renewable Fuels Standard.
Average industry refining margins in the U.S. Mid-Continent were generally weaker during the year ended
December 31, 2013, as compared to the same period in 2012. The WTI (Chicago) 4-3-1 industry crack spread was
approximately $20.09 per barrel or 25.9% lower in the year ended December 31, 2013, as compared to the same
period in 2012. Additionally, the price of WTI versus Syncrude and Bakken decreased in 2013, which negatively
impacted our overall cost of crude.
The Dated Brent (NYH) 2-1-1 industry crack spread was approximately $12.34 per barrel, or 13.6%, lower
in the year ended December 31, 2013, as compared to the same period in 2012. Furthermore, the WTI/Dated Brent
differential was $6.87 lower in the year ended December 31, 2013, as compared to the same period in 2012 and
the Dated Brent/Maya differential was approximately $0.66 per barrel lower in the year ended December 31, 2013
as compared to the same period in 2012. A decrease in the WTI/Dated Brent crude differential unfavorably impacts
our East Coast refineries which have increased shipments of WTI based crudes from the Bakken and Western
Canada. A reduction in the Dated Brent/Maya crude differential, our proxy for the light/heavy crude differential,
has a negative impact on our East Coast refineries, which can process a large slate of medium and heavy, sour
crude oil that is priced at a discount to light, sweet crude oil.
Operating Expenses— Operating expenses totaled $812.7 million, or $4.92 per barrel of throughput, for the
year ended December 31, 2013 compared to $738.8 million, or $4.36 per barrel of throughput, for the year ended
December 31, 2012, an increase of $73.9 million, or 10.0%. The increase in operating expenses is mainly attributable
to an increase of approximately $41.3 million in energy and utilities costs, primarily driven by higher natural gas
prices, $11.0 million in increased personnel cost associated with higher headcount attributable to the Delaware rail
facility expansion, $8.0 million in repair and restart costs related to the Toledo fire described above, $14.3 million
in increased outside engineering and consulting fees related to refinery capital and maintenance projects, and $2.2