PBF Energy 2013 Annual Report Download - page 79

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Liquidity
As of December 31, 2013, our total liquidity was approximately $615.9 million, compared to total liquidity
of approximately $599.2 million as of December 31, 2012. Total liquidity is the sum of our cash and cash equivalents
plus the amount of availability under the ABL Revolving Credit Facility.
Working Capital
Working capital for PBF Energy at December 31, 2013 was $556.0 million, consisting of $2,200.5 million
in total current assets and $1,644.5 million in total current liabilities. Working capital at December 31, 2012 was
$704.8 million, consisting of $2,307.9 million in total current assets and $1,603.1 million in total current liabilities.
Working capital for PBF Holding at December 31, 2013 was $541.9 million, consisting of $2,175.0 million
in total current assets and $1,633.0 million in total current liabilities. Working capital at December 31, 2012 was
$686.8 million, consisting of $2,283.3 million in total current assets and $1,596.5 million in total current liabilities.
Crude and Feedstock Supply Agreements
We have acquired crude oil for our Paulsboro and Delaware City refineries under supply agreements whereby
Statoil generally purchases the crude oil requirements for each refinery on our behalf and under our direction. Our
agreement with Statoil for Paulsboro was terminated effective March 31, 2013, at which time we began to source
Paulsboro’s crude oil and feedstocks internally. We amended our agreement with Statoil for Delaware City in 2012
and the term was extended by Statoil through December 31, 2015. Statoil generally provides transportation and
logistics services, risk management services and holds title to the crude oil until we purchase it as it enters the
refinery process units. For our purchases of Saudi crude oil, similar to our purchases of other foreign waterborne
crudes, we post letters of credit and arrange for shipment. We pay for the crude when we are invoiced and the letter
of credit is lifted. Under the Statoil agreements, the amount of crude oil we own and the time we are exposed to
market fluctuations is substantially reduced. Under generally accepted accounting principles we record the
inventory owned by Statoil on our behalf as inventory with a corresponding accrued liability on our balance sheet
because we have risk of loss while the Statoil inventory is in our storage tanks and because we have an obligation
to repurchase Statoil’s inventory upon termination of the agreements at the then market value.
We have a similar agreement with MSCG to supply the crude oil requirements for our Toledo refinery, under
which we take title to MSCG’s crude oil at certain interstate pipeline delivery locations. Payment for the crude oil
under the Toledo agreement is due three days after it is processed by us or sold to third parties. We do not have to
post letters of credit for these purchases and the Toledo agreement allows us to price and pay for our crude oil as
it is processed, which reduces the time we are exposed to market fluctuations. We record an accrued liability at
each period-end for the amount we owe MSCG for the crude oil that we own but have not processed. The accrued
liability is based on the period-end market value, as it represents our best estimate of what we will pay for the
crude oil.
In connection with the crude and feedstock supply agreements for our Delaware City refinery and formerly
for the Paulsboro refinery, Statoil also purchases the refineries production of certain feedstocks or purchases
feedstocks from third parties on the refineries' behalf. Legal title to the feedstocks is held by Statoil and stored in
the refineries’ storage tanks until they are needed for further use in the refining process. At that time, the feedstocks
are drawn out of the storage tanks and purchased by the refineries. These purchases and sales are netted at cost
and reported within cost of sales. The feedstock inventory owned by Statoil remains on our balance sheet with a
corresponding accrued liability.
At December 31, 2013, the LIFO value of crude oil and feedstocks owned by Statoil included within
inventory on our balance sheet was $89.8 million. The corresponding accrued liability for such crude oil and
feedstocks was $89.8 million at that date.