PBF Energy 2013 Annual Report Download - page 88

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Recent Accounting Pronouncements
There are no recently issued accounting pronouncements requiring adoption subsequent to December 31,
2013 that would have a significant impact on our results of operations or financial position.
Iran Sanctions Compliance Disclosure
Under the Iran Threat Reduction and Syrian Human Rights Act of 2012 ("ITRA"), which added Section 13
(r) of the Exchange Act, we are required to include certain disclosures in our periodic reports if we or any of our
“affiliates” knowingly engaged in certain specified activities during the period covered by the report. Because the
SEC defines the term “affiliate” broadly, it may include any entity controlled by us as well as any person or entity
that controls us or is under common control with us (“control” is also construed broadly by the SEC). Neither we
nor any of our controlled affiliates or subsidiaries have knowingly engaged in any transaction or dealing reportable
under Section 13(r) of the Exchange Act during the reporting period.
Funds affiliated with The Blackstone Group L.P. (“Blackstone”) are holders of approximately 26.8% of the
outstanding voting interests of PBF Energy as of December 31, 2013 and have nominated three of the current
directors on PBF Energy's Board of Directors. Accordingly, Blackstone may be deemed an “affiliate” of PBF
Energy, as that term is defined in Exchange Act Rule 12b-2. We received notice from Blackstone that it has included
the disclosures described below in its SEC filings pursuant to ITRA regarding one of its portfolio companies that
may be deemed to be affiliates of Blackstone. Because of the broad definition of “affiliate” in Exchange Act Rule
12b-2, these portfolio companies of Blackstone, through Blackstone's ownership of PBF Energy, may also be
deemed to be affiliates of ours. We have not independently verified the disclosures described in the following
paragraphs.
We have received notice from Blackstone that Travelport Limited ("Travelport"), which may be considered
an affiliate of Blackstone, as part of their global business in the travel industry, provides certain passenger travel
related GDS and airline IT services to Iran Air and certain airline IT services to Iran Air Tours. All of these services
are either exempt from applicable sanctions prohibitions pursuant to a statutory exemption in the International
Emergency Economic Powers Act permitting transactions ordinarily incident to travel or, to the extent not otherwise
exempt, specifically licensed by the U.S. Office of Foreign Assets Control (“OFAC”). Subject to any changes in
the exempt/licensed status of such activities, Travelport intends to continue these business activities, which are
directly related to and promote the arrangement of travel for individuals. Prior to and during the reporting period,
Travelport also provided airline IT services to Syrian Arab Airlines. These services were generally understood to
be permissible under the same statutory travel exemption. The services were terminated following the May 2013
action by OFAC to designate this airline as a Specially Designated Global Terrorist pursuant to the Global Terrorism
Sanctions Regulations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks, including changes in commodity prices and interest rates. Our primary
commodity price risk is associated with the difference between the prices we sell our refined products and the
prices we pay for crude oil and other feedstocks. We may use derivative instruments to manage the risks from
changes in the prices of crude oil and refined products, natural gas, interest rates, or to capture market opportunities.
Commodity Price Risk
Our earnings, cash flow and liquidity are significantly affected by a variety of factors beyond our control,
including the supply of, and demand for, crude oil, other feedstocks, refined products and natural gas. The supply
of and demand for these commodities depend on, among other factors, changes in domestic and foreign economies,
weather conditions, domestic and foreign political affairs, planned and unplanned downtime in refineries, pipelines
and production facilities, production levels, the availability of imports, the marketing of competitive and alternative
fuels, and the extent of government regulation. As a result, the prices of these commodities can be volatile. Our
revenues fluctuate significantly with movements in industry refined product prices, our cost of sales fluctuates