PBF Energy 2013 Annual Report Download - page 71

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General and Administrative Expenses—General and administrative expenses totaled $120.4 million for the
year ended December 31, 2012 compared to $86.2 million for the year ended December 31, 2011, an increase of
$34.3 million or 40.0%. The increase in general and administrative expenses primarily relates to higher information
technology expenses for the implementation of accounting and commercial software in 2012 and higher
compensation expense related to headcount increases in 2012. Our general and administrative expenses are
comprised of the personnel, facilities and other infrastructure costs necessary to support our refineries.
Acquisition-related Expenses—Acquisition-related expenses for the year ended December 31, 2011 were
$0.7 million and related to our acquisition of Toledo.
Gain on Sale of Assets—Gain on sale of assets for the year ended December 31, 2012 was $2.3 million and
related to sales of certain equipment at Paulsboro and Delaware City.
Depreciation and Amortization Expense—Depreciation and amortization expense totaled $92.2 million for
the year ended December 31, 2012 compared to $53.7 million for the year ended December 31, 2011, an increase
of $38.5 million. The increase was principally due to the acquisition of Toledo in March 2011, commencement of
depreciation in July 2011 related to the restart of Delaware City, and capital expenditure and turnaround activity.
Change in Fair Value of Catalyst Leases—Change in the fair value of catalyst leases represented a loss of
$3.7 million for the year ended December 31, 2012 compared to a gain of $7.3 million for the year ended
December 31, 2011. This gain or loss relates to the change in value of the precious metals underlying the sale and
leaseback of our refineries’ precious metals catalyst, which we are obligated to repurchase at fair market value
lease termination dates.
Change in Fair Value of Contingent Consideration—Change in the fair value of contingent consideration
was an expense of $2.8 million for the year ended December 31, 2012, compared to $5.2 million for the 2011
period. This change represents the increase in the estimated fair value of the total contingent consideration we
expect to pay in connection with our acquisition of the Toledo refinery.
Interest (Expense) Income—Interest expense totaled $108.6 million for the year ended December 31, 2012
compared to $65.1 million for the year ended December 31, 2011, an increase of $43.5 million. Interest expense
includes interest on long-term debt, costs related to the sale and leaseback of our precious metals catalyst, interest
expense incurred in connection with our crude and feedstock supply agreements with Statoil and MSCG, letter of
credit fees associated with the purchase of certain crude oils, and the amortization of deferred financing fees. The
increase in interest expense primarily relates to an increase in letter of credit fees attributable to all refineries
operating for the full year in 2012, financing costs associated with the expanded capacity under the ABL Revolver,
interest expense associated with the Statoil agreement related to the Delaware City restart and the write off of $4.4
million in deferred financing costs on debt that was repaid from the proceeds of our senior secured notes offering.
Income Tax Expense—As PBF LLC is a limited liability company treated as a "flow-through" entity for
income tax purposes, the members of PBF LLC are required to include their proportionate share of PBF LLC’s
taxable income or loss on their respective tax returns. Accordingly, our consolidated financial statements do not
include a benefit or provision for income taxes for periods prior to the completion of our initial public offering on
December 18, 2012. However, we make distributions to our members, per the terms of the PBF LLC limited liability
agreement, related to such taxes. Effective with the completion of the initial public offering of PBF Energy, we
recognize an income tax expense or benefit in our consolidated financial statements based on our allocable share
of PBF LLC’s pre-tax income (loss), which was approximately 24.4% for the period from December 18, 2012 to
December 31, 2012. We do not recognize any income tax expense or benefit related to the noncontrolling interest
in PBF LLC.
Noncontrolling Interest—As a result of our initial public offering and the related reorganization transactions,
PBF Energy is the sole managing member of, and has a controlling interest in, PBF LLC. As the sole managing
member of PBF LLC, PBF Energy operates and controls all of the business and affairs of PBF LLC and its
subsidiaries. PBF Energy consolidates the financial results of PBF LLC and its subsidiaries, and records a