PBF Energy 2015 Annual Report Download - page 42

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The adoption of derivatives legislation by the United States Congress could have an adverse effect on our ability
to use derivatives contracts to reduce the effect of commodity price, interest rate and other risks associated with
our business.
The United States Congress in 2010 adopted the Dodd-Frank Wall Street Reform and Consumer Protection
Act, or the Dodd-Frank Act, which, among other things, established federal oversight and regulation of the over-
the-counter derivatives market and entities that participate in that market. In connection with the Dodd-Frank Act,
the Commodity Futures Trading Commission, or the CFTC, has proposed rules to set position limits for certain
futures and option contracts, and for swaps that are their economic equivalent, in the major energy markets. The
legislation may also require us to comply with margin requirements and with certain clearing and trade-execution
requirements if we do not satisfy certain specific exceptions. The legislation may also require the counterparties
to our derivatives contracts to transfer or assign some of their derivatives contracts to a separate entity, which may
not be as creditworthy as the current counterparty. The legislation and any new regulations could significantly
increase the cost of derivatives contracts (including through requirements to post collateral), materially alter the
terms of derivatives contracts, reduce the availability of derivatives to protect against risks we encounter, reduce
our ability to monetize or restructure our existing derivatives contracts, and increase our exposure to less
creditworthy counterparties. If we reduce our use of derivatives as a result of the legislation and regulations, our
results of operations may become more volatile and our cash flows may be less predictable, which could adversely
affect our ability to plan for and fund capital expenditures. Any of these consequences could have a material adverse
effect on us, our financial condition and our results of operations.
Our operations could be disrupted if our critical information systems are hacked or fail, causing increased
expenses and loss of sales.
Our business is highly dependent on financial, accounting and other data processing systems and other
communications and information systems, including our enterprise resource planning tools. We process a large
number of transactions on a daily basis and rely upon the proper functioning of computer systems. If a key system
was hacked or otherwise interfered with by an unauthorized access, or was to fail or experience unscheduled
downtime for any reason, even if only for a short period, our operations and financial results could be affected
adversely. Our systems could be damaged or interrupted by a security breach, cyber-attack, fire, flood, power loss,
telecommunications failure or similar event. We have a formal disaster recovery plan in place, but this plan may
not prevent delays or other complications that could arise from an information systems failure. Further, our business
interruption insurance may not compensate us adequately for losses that may occur. Finally, federal legislation
relating to cyber-security threats could impose additional requirements on our operations.
Product liability claims and litigation could adversely affect our business and results of operations.
Product liability is a significant commercial risk. Substantial damage awards have been made in certain
jurisdictions against manufacturers and resellers based upon claims for injuries and property damage caused by
the use of or exposure to various products. Failure of our products to meet required specifications or claims that
a product is inherently defective could result in product liability claims from our shippers and customers, and also
arise from contaminated or off-specification product in commingled pipelines and storage tanks and/or defective
fuels. Product liability claims against us could have a material adverse effect on our business or results of operations.
We may incur significant liability under, or costs and capital expenditures to comply with, environmental and
health and safety regulations, which are complex and change frequently.
Our operations are subject to federal, state and local laws regulating, among other things, the handling of
petroleum and other regulated materials, the emission and discharge of materials into the environment, waste
management, and remediation of discharges of petroleum and petroleum products, characteristics and composition
of gasoline and distillates and other matters otherwise relating to the protection of the environment. Our operations
are also subject to extensive laws and regulations relating to occupational health and safety.