PBF Energy 2015 Annual Report Download - page 68

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Chalmette Acquisition
On November 1, 2015, the Company acquired from ExxonMobil Oil Corporation, Mobil Pipe Line
Company and PDV Chalmette, Inc., 100% of the ownership interests of Chalmette Refining, which owns the
Chalmette refinery and related logistics assets. The Chalmette refinery, located outside of New Orleans, Louisiana,
is a dual-train coking refinery and is capable of processing both light and heavy crude oil. Subsequent to the closing
of the Chalmette Acquisition, Chalmette Refining is a wholly-owned subsidiary of PBF Holding.
Chalmette Refining owns 100% of the MOEM Pipeline, providing access to the Empire Terminal, as well
as the CAM Connection Pipeline, providing access to the Louisiana Offshore Oil Port facility through a third party
pipeline. Chalmette Refining also owns 80% of each of the Collins Pipeline Company and T&M Terminal Company,
both located in Collins, Mississippi, which provide a clean products outlet for the refinery to the Plantation and
Colonial Pipelines. Also included in the acquisition are a marine terminal capable of importing waterborne
feedstocks and loading or unloading finished products; a clean products truck rack which provides access to local
markets; and a crude and product storage facility.
The aggregate purchase price for the Chalmette Acquisition was $322.0 million in cash, plus estimated
inventory and working capital of $243.3 million, which is subject to final valuation upon agreement by both parties.
The transaction was financed through a combination of cash on hand and borrowings under the Company’s existing
revolving credit line.
Initial Public Offering of PBFX
On May 14, 2014, PBFX completed its initial public offering of 15,812,500 common units, including
2,062,500 common units issued upon exercise of the over-allotment option that was granted to the underwriters,
at a price to the public of $23.00 per unit. Upon completion of the PBFX Offering, PBF LLC held a 50.2% limited
partner interest in PBFX (consisting of 74,053 common units and 15,886,553 subordinated units), with the
remaining 49.8% limited partner interest held by public common unit holders.
PBFX’s initial assets consisted of the Delaware City Rail Terminal and the Toledo Truck Terminal, which
are integral components of the crude oil delivery operations at PBF Energy’s refineries. All of PBFX’s initial
revenue was derived from long-term, fee-based commercial agreements with subsidiaries of PBF Energy, which
include minimum volume commitments, for receiving, handling and transferring crude oil. These transactions are
eliminated by PBF Energy in consolidation.
PBFX received proceeds (after deducting underwriting discounts and structuring fees but before estimated
offering expenses) from the PBFX Offering of approximately $341.0 million. PBFX used the net proceeds from
the offering to: (i) distribute approximately $35.0 million to PBF LLC for certain capital expenditures incurred
prior to the closing of the PBFX Offering with respect to assets contributed to PBFX and to reimburse it for
estimated offering expenses; (ii) pay debt issuance costs of approximately $2.3 million related to the PBFX
Revolving Credit Facility and the PBFX Term Loan; and (iii) purchase $298.7 million in U.S. Treasury or other
investment grade securities which will be used to fund anticipated capital expenditures by PBFX. PBFX retained
approximately $5.0 million for general partnership purposes. PBFX also borrowed $298.7 million under the PBFX
Term Loan, which is secured by a pledge of the U.S. Treasury or other investment grade securities held by PBFX,
and distributed the proceeds of such borrowings to PBF LLC. PBF LLC contributed the proceeds of the PBFX
Offering and PBFX Term Loan borrowings to PBF Holding, which intends to use such funds for general corporate
purposes. In addition, as of December 31, 2015, 403,375 phantom units with distribution equivalent rights were
granted under the PBFX long term incentive plan to certain directors, officers (including our named executive
officers) and employees of PBF GP or its affiliates, which will vest in equal annual installments over a four-year
period.