PBF Energy Announces First Quarter 2021 Results

EARNINGS RELEASE TABLES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in millions, except share and per share data)

Three Months Ended

March 31,

2021

2020

Revenues

$

4,924.8

$

5,277.5

Cost and expenses:

Cost of products and other

4,191.0

5,963.3

Operating expenses (excluding depreciation and amortization expense as reflected below)

481.3

531.7

Depreciation and amortization expense

114.1

116.7

Cost of sales

4,786.4

6,611.7

General and administrative expenses (excluding depreciation and amortization expense as reflected
below)

47.8

82.5

Depreciation and amortization expense

3.4

2.9

Change in fair value of contingent consideration

30.1

(52.8)

Gain on sale of assets

(0.6)

—

Total cost and expenses

4,867.1

6,644.3

Income (loss) from operations

57.7

(1,366.8)

Other income (expense):

Interest expense, net

(80.3)

(49.2)

Change in Tax Receivable Agreement liability

—

(11.6)

Change in fair value of catalyst obligations

(10.0)

11.7

Debt extinguishment costs

—

(22.2)

Other non-service components of net periodic benefit cost

2.0

1.0

Income (loss) before income taxes

(30.6)

(1,437.1)

Income tax benefit

(8.4)

(374.6)

Net income (loss)

(22.2)

(1,062.5)

Less: net income attributable to noncontrolling interests

19.1

3.4

Net income (loss) attributable to PBF Energy Inc. stockholders

$

(41.3)

$

(1,065.9)

Net income (loss) available to Class A common stock per share:

Basic

$

(0.34)

$

(8.93)

Diluted

$

(0.34)

$

(8.93)

Weighted-average shares outstanding-basic

119,926,267

119,380,210

Weighted-average shares outstanding-diluted

120,905,716

119,380,210

Adjusted fully-converted net income (loss) and adjusted fully-converted net income (loss) per
fully exchanged, fully diluted shares outstanding (Note 1):

Adjusted fully-converted net income (loss)

$

(41.6)

$

(1,076.7)

Adjusted fully-converted net income (loss) per fully exchanged, fully diluted share

$

(0.34)

$

(8.93)

Adjusted fully-converted shares outstanding - diluted (Note 6)

120,905,716

120,589,008

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP

(Unaudited, in millions, except share and per share data)

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED FULLY-CONVERTED
NET INCOME (LOSS) AND ADJUSTED FULLY-CONVERTED  NET INCOME (LOSS)
EXCLUDING SPECIAL ITEMS (Note 1)

Three Months Ended

March 31,

2021

2020

Net income (loss) attributable to PBF Energy Inc. stockholders

$

(41.3)

$

(1,065.9)

Less:

Income allocated to participating securities

—

0.1

Income (loss) available to PBF Energy Inc. stockholders - basic

(41.3)

(1,066.0)

Add:

Net income (loss) attributable to noncontrolling interest (Note 2)

(0.4)

(14.6)

Less:

Income tax benefit  (Note 3)

0.1

3.9

Adjusted fully-converted net income (loss)

$

(41.6)

$

(1,076.7)

Special Items (Note 4):

Add:

Non-cash LCM inventory adjustment

(405.6)

1,285.6

Add:

Change in fair value of contingent consideration

30.1

(52.8)

Add:

Debt extinguishment costs

—

22.2

Add:

Change in Tax Receivable Agreement liability

—

11.6

Add:

Net tax expense on remeasurement of deferred tax assets

1.7

—

Less:

Recomputed income tax on special items (Note 3)

99.9

(333.1)

Adjusted fully-converted net income (loss) excluding special items

$

(315.5)

$

(143.2)

Weighted-average shares outstanding of PBF Energy Inc.

119,926,267

119,380,210

Conversion of PBF LLC Series A Units (Note 5)

979,449

1,208,798

Common stock equivalents (Note 6)

—

—

Fully-converted shares outstanding - diluted

120,905,716

120,589,008

Adjusted fully-converted net income (loss) per fully exchanged, fully diluted shares
outstanding (Note 6)

$

(0.34)

$

(8.93)

Adjusted fully-converted net income (loss) excluding special items per fully exchanged,
fully diluted shares outstanding (Note 4, 6)

$

(2.61)

$

(1.19)

Three Months Ended

RECONCILIATION OF INCOME (LOSS) FROM OPERATIONS TO INCOME (LOSS)
FROM OPERATIONS EXCLUDING SPECIAL ITEMS

March 31,

2021

2020

Income (loss) from operations

$

57.7

$

(1,366.8)

Special Items (Note 4):

Add:

Non-cash LCM inventory adjustment

(405.6)

1,285.6

Add:

Change in fair value of contingent consideration

30.1

(52.8)

Income (loss) from operations excluding special items

$

(317.8)

$

(134.0)

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP

EBITDA RECONCILIATIONS (Note 7)

(Unaudited, in millions)

Three Months Ended

March 31,

RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND EBITDA
EXCLUDING SPECIAL ITEMS

2021

2020

Net income (loss)

$

(22.2)

$

(1,062.5)

Add: Depreciation and amortization expense

117.5

119.6

Add: Interest expense, net

80.3

49.2

Add: Income tax benefit

(8.4)

(374.6)

EBITDA

$

167.2

$

(1,268.3)

Special Items (Note 4):

Add: Non-cash LCM inventory adjustment

(405.6)

1,285.6

Add: Change in fair value of contingent consideration

30.1

(52.8)

Add: Debt extinguishment costs

—

22.2

Add: Change in Tax Receivable Agreement liability

—

11.6

EBITDA excluding special items

$

(208.3)

$

(1.7)

Three Months Ended

March 31,

RECONCILIATION OF EBITDA TO ADJUSTED EBITDA

2021

2020

EBITDA

$

167.2

$

(1,268.3)

Add: Stock-based compensation

7.4

9.6

Add: Change in fair value of catalyst obligations

10.0

(11.7)

Add: Non-cash LCM inventory adjustment (Note 4)

(405.6)

1,285.6

Add: Change in fair value of contingent consideration (Note 4)

30.1

(52.8)

Add: Debt extinguishment costs (Note 4)

—

22.2

Add: Change in Tax Receivable Agreement liability (Note 4)

—

11.6

Adjusted EBITDA

$

(190.9)

$

(3.8)

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(Unaudited, in millions)

March 31,

December 31,

2021

2020

Balance Sheet Data:

Cash and cash equivalents

$

1,541.2

$

1,609.5

Inventories

2,312.4

1,686.2

Total assets

11,270.1

10,499.8

Total debt

4,657.9

4,661.0

Total equity

2,176.1

2,202.3

Total equity excluding special items (Note 4, 13)

$

1,975.8

$

2,275.9

Total debt to capitalization ratio (Note 13)

68

%

68

%

Total debt to capitalization ratio, excluding special items (Note 13)

70

%

67

%

Net debt to capitalization ratio (Note 13)

59

%

58

%

Net debt to capitalization ratio, excluding special items (Note 13)

61

%

57

%

SUMMARIZED STATEMENT OF CASH FLOW DATA

(Unaudited, in millions)

Three Months Ended March 31,

2021

2020

Cash flows used in operating activities

$

(13.7)

$

(235.8)

Cash flows used in investing activities

(60.5)

(1,315.2)

Cash flows provided by financing activities

5.9

1,458.2

Net decrease in cash and cash equivalents

(68.3)

(92.8)

Cash and cash equivalents, beginning of period

1,609.5

814.9

Cash and cash equivalents, end of period

$

1,541.2

$

722.1

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

CONSOLIDATING FINANCIAL INFORMATION (Note 8)

(Unaudited, in millions)

Three Months Ended March 31, 2021

Refining

Logistics

Corporate

 Eliminations

Consolidated
Total

Revenues

$

4,913.2

$

87.5

$

—

$

(75.9)

$

4,924.8

Depreciation and amortization expense

104.7

9.4

3.4

—

117.5

Income (loss) from operations

85.9

47.9

(76.1)

—

57.7

Interest expense, net

1.8

10.7

67.8

—

80.3

Capital expenditures

58.1

1.3

1.1

—

60.5

Three Months Ended March 31, 2020

Refining

Logistics

Corporate

 Eliminations

Consolidated
Total

Revenues

$

5,260.0

$

93.0

$

—

$

(75.5)

$

5,277.5

Depreciation and amortization expense

105.4

11.3

2.9

—

119.6

Income (loss) from operations

(1,386.4)

47.7

(28.1)

—

(1,366.8)

Interest expense, net

0.8

12.8

35.6

—

49.2

Capital expenditures (Note 14)

1,304.1

6.1

5.0

—

1,315.2

Balance at March 31, 2021

Refining

Logistics

Corporate

 Eliminations

Consolidated
Total

Total Assets

$

10,343.4

$

932.8

$

52.9

$

(59.0)

$

11,270.1

Balance at December 31, 2020

Refining

Logistics

Corporate

 Eliminations

Consolidated
Total

Total Assets

$

9,565.0

$

933.6

$

54.4

$

(53.2)

$

10,499.8

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

MARKET INDICATORS AND KEY OPERATING INFORMATION

(Unaudited)

Three Months Ended

March 31,

Market Indicators (dollars per barrel) (Note 9)

2021

2020

Dated Brent crude oil

$

61.16

$

49.70

West Texas Intermediate (WTI) crude oil

$

58.13

$

45.56

Light Louisiana Sweet (LLS) crude oil

$

60.26

$

47.81

Alaska North Slope (ANS) crude oil

$

61.07

$

51.07

Crack Spreads:

Dated Brent (NYH) 2-1-1

$

12.06

$

9.96

WTI (Chicago) 4-3-1

$

11.56

$

7.37

LLS (Gulf Coast) 2-1-1

$

12.05

$

10.42

ANS (West Coast-LA) 4-3-1

$

15.75

$

13.36

ANS (West Coast-SF) 3-2-1

$

12.92

$

9.65

Crude Oil Differentials:

Dated Brent (foreign) less WTI

$

3.03

$

4.14

Dated Brent less Maya (heavy, sour)

$

4.53

$

8.87

Dated Brent less WTS (sour)

$

2.26

$

4.70

Dated Brent less ASCI (sour)

$

2.77

$

4.29

WTI less WCS (heavy, sour)

$

12.01

$

16.85

WTI less Bakken (light, sweet)

$

0.50

$

3.46

WTI less Syncrude (light, sweet)

$

0.97

$

1.80

WTI less LLS (light, sweet)

$

(2.13)

$

(2.25)

WTI less ANS (light, sweet)

$

(2.94)

$

(5.51)

Natural gas (dollars per MMBTU)

$

2.72

$

1.87

Key Operating Information

Production (barrels per day ("bpd") in thousands)

758.2

867.0

Crude oil and feedstocks throughput (bpd in thousands)

745.5

852.9

Total crude oil and feedstocks throughput (millions of barrels)

67.1

77.6

Consolidated gross margin per barrel of throughput

$

2.07

$

(17.19)

Gross refining margin, excluding special items, per barrel of throughput (Note 4, Note 10)

$

3.65

$

6.60

Refinery operating expense, per barrel of throughput (Note 11)

$

6.86

$

6.54

Crude and feedstocks (% of total throughput) (Note 12)

Heavy

36

%

44

%

Medium

31

%

23

%

Light

18

%

19

%

Other feedstocks and blends

15

%

14

%

Total throughput

100

%

100

%

Yield (% of total throughput)

Gasoline and gasoline blendstocks

54

%

51

%

Distillates and distillate blendstocks

30

%

32

%

Lubes

1

%

1

%

Chemicals

2

%

1

%

Other

15

%

17

%

Total yield

102

%

102

%

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

 SUPPLEMENTAL OPERATING INFORMATION

(Unaudited)

Three Months Ended

March 31,

2021

2020

Supplemental Operating Information - East Coast Refining System (Delaware City and
Paulsboro)

Production (bpd in thousands)

242.3

327.8

Crude oil and feedstocks throughput (bpd in thousands)

242.8

329.3

Total crude oil and feedstocks throughput (millions of barrels)

21.9

30.0

Gross margin per barrel of throughput

$

(0.70)

$

(13.61)

Gross refining margin, excluding special items, per barrel of throughput (Note 4, Note 10)

$

2.48

$

6.92

Refinery operating expense, per barrel of throughput (Note 11)

$

5.91

$

5.71

Crude and feedstocks (% of total throughput) (Note 12):

Heavy

26

%

27

%

Medium

41

%

27

%

Light

9

%

28

%

Other feedstocks and blends

24

%

18

%

Total throughput

100

%

100

%

Yield (% of total throughput):

Gasoline and gasoline blendstocks

44

%

46

%

Distillates and distillate blendstocks

34

%

36

%

Lubes

2

%

2

%

Chemicals

2

%

1

%

Other

18

%

15

%

Total yield

100

%

100

%

Supplemental Operating Information - Mid-Continent (Toledo)

Production (bpd in thousands)

120.0

91.0

Crude oil and feedstocks throughput (bpd in thousands)

117.2

90.1

Total crude oil and feedstocks throughput (millions of barrels)

10.5

8.2

Gross margin per barrel of throughput

$

7.88

$

(44.23)

Gross refining margin, excluding special items, per barrel of throughput (Note 4, Note 10)

$

5.18

$

1.16

Refinery operating expense, per barrel of throughput (Note 11)

$

5.82

$

8.38

Crude and feedstocks (% of total throughput) (Note 12):

Medium

43

%

39

%

Light

54

%

59

%

Other feedstocks and blends

3

%

2

%

Total throughput

100

%

100

%

Yield (% of total throughput):

Gasoline and gasoline blendstocks

59

%

45

%

Distillates and distillate blendstocks

32

%

30

%

Chemicals

5

%

2

%

Other

6

%

24

%

Total yield

102

%

101

%

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

 SUPPLEMENTAL OPERATING INFORMATION

(Unaudited)

Three Months Ended

March 31,

2021

2020

Supplemental Operating Information - Gulf Coast (Chalmette)

Production (bpd in thousands)

159.2

179.4

Crude oil and feedstocks throughput (bpd in thousands)

153.8

174.5

Total crude oil and feedstocks throughput (millions of barrels)

13.8

15.9

Gross margin per barrel of throughput

$

3.63

$

(9.93)

Gross refining margin, excluding special items, per barrel of throughput (Note 4, Note 10)

$

5.44

$

8.07

Refinery operating expense, per barrel of throughput (Note 11)

$

5.38

$

4.67

Crude and feedstocks (% of total throughput) (Note 12):

Heavy

8

%

41

%

Medium

44

%

30

%

Light

31

%

13

%

Other feedstocks and blends

17

%

16

%

Total throughput

100

%

100

%

Yield (% of total throughput):

Gasoline and gasoline blendstocks

47

%

45

%

Distillates and distillate blendstocks

34

%

33

%

Chemicals

2

%

2

%

Other

21

%

23

%

Total yield

104

%

103

%

Supplemental Operating Information - West Coast (Torrance and Martinez)

Production (bpd in thousands)

236.7

268.8

Crude oil and feedstocks throughput (bpd in thousands)

231.7

259.0

Total crude oil and feedstocks throughput (millions of barrels)

20.9

23.5

Gross margin per barrel of throughput

$

(1.57)

$

(19.43)

Gross refining margin, excluding special items, per barrel of throughput (Note 4, Note 10)

$

2.91

$

7.09

Refinery operating expense, per barrel of throughput (Note 11)

$

9.36

$

8.21

Crude and feedstocks (% of total throughput) (Note 12):

Heavy

83

%

81

%

Medium

5

%

7

%

Other feedstocks and blends

12

%

12

%

Total throughput

100

%

100

%

Yield (% of total throughput):

Gasoline and gasoline blendstocks

64

%

62

%

Distillates and distillate blendstocks

24

%

27

%

Other

14

%

15

%

Total yield

102

%

104

%

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP

GROSS REFINING MARGIN / GROSS REFINING MARGIN PER BARREL OF THROUGHPUT (Note 10)

(Unaudited, in millions, except per barrel amounts)

Three Months Ended

Three Months Ended

March 31, 2021

March 31, 2020

RECONCILIATION OF CONSOLIDATED GROSS
MARGIN TO GROSS REFINING MARGIN AND GROSS
REFINING MARGIN EXCLUDING SPECIAL ITEMS

$

per barrel
of

throughput

$

per barrel
of

throughput

Calculation of consolidated gross margin:

Revenues

$

4,924.8

$

73.40

$

5,277.5

$

68.00

Less: Cost of sales

4,786.4

71.33

6,611.7

85.19

Consolidated gross margin

$

138.4

$

2.07

$

(1,334.2)

$

(17.19)

Reconciliation of consolidated gross margin to gross refining
margin:

Consolidated gross margin

$

138.4

$

2.07

$

(1,334.2)

$

(17.19)

Add: PBFX operating expense

25.0

0.37

29.6

0.38

Add: PBFX depreciation expense

9.4

0.14

11.3

0.15

Less: Revenues of PBFX

(87.5)

(1.30)

(93.0)

(1.20)

Add: Refinery operating expense

460.2

6.86

507.5

6.54

Add: Refinery depreciation expense

104.7

1.56

105.4

1.36

Gross refining margin

$

650.2

$

9.70

$

(773.4)

$

(9.96)

   Special Items (Note 4):

Add: Non-cash LCM inventory adjustment

(405.6)

(6.05)

1,285.6

16.56

Gross refining margin excluding special items

$

244.6

$

3.65

$

512.2

$

6.60

See Footnotes to Earnings Release Tables

PBF ENERGY INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

FOOTNOTES TO EARNINGS RELEASE TABLES

(1) Adjusted fully-converted information is presented in this table as management believes that these Non-GAAP measures, when presented in conjunction with comparable GAAP measures, are useful to investors to compare our results across the periods presented and facilitates an understanding of our operating results. We also use these measures to evaluate our operating performance. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The differences between adjusted fully-converted and GAAP results are explained in footnotes 2 through 6.

(2) Represents the elimination of the noncontrolling interest associated with the ownership by the members of PBF Energy Company LLC ("PBF LLC") other than PBF Energy Inc., as if such members had fully exchanged their PBF LLC Series A Units for shares of PBF Energy's Class A common stock.

(3) Represents an adjustment to reflect PBF Energy's estimated annualized statutory corporate tax rate of approximately 26.6% and 26.3% for the 2021 and 2020 periods, respectively, applied to net income (loss) attributable to noncontrolling interest for all periods presented. The adjustment assumes the full exchange of existing PBF LLC Series A Units as described in footnote 2.

(4) The Non-GAAP measures presented include adjusted fully-converted net income (loss) excluding special items, income (loss) from operations excluding special items, EBITDA excluding special items and gross refining margin excluding special items. Special items for the three months ended March 31, 2021 and 2020 relate to LCM inventory adjustments, change in fair value of contingent consideration, tax expense on the remeasurement of deferred tax assets, debt extinguishment costs and changes in the Tax Receivable Agreement liability, all as discussed further below. Additionally, the cumulative effects of all current and prior period special items on equity are shown in footnote 13. 

Although we believe that Non-GAAP financial measures excluding the impact of special items provide useful supplemental information to investors regarding the results and performance of our business and allow for useful period-over-period comparisons, such Non-GAAP measures should only be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP. 

Special Items: 

LCM inventory adjustment - LCM is a GAAP requirement related to inventory valuation that mandates inventory to be stated at the lower of cost or market. Our inventories are stated at the lower of cost or market. Cost is determined using last-in, first-out ("LIFO") inventory valuation methodology, in which the most recently incurred costs are charged to cost of sales and inventories are valued at base layer acquisition costs. Market is determined based on an assessment of the current estimated replacement cost and net realizable selling price of the inventory. In periods where the market price of our inventory declines substantially, cost values of inventory may exceed market values. In such instances, we record an adjustment to write down the value of inventory to market value in accordance with GAAP. In subsequent periods, the value of inventory is reassessed and an LCM inventory adjustment is recorded to reflect the net change in the LCM inventory reserve between the prior period and the current period.

The following table includes the LCM inventory reserve as of each date presented (in millions):

2021

2020

January 1,

$

669.6

$

401.6

March 31,

264.0

1,687.2

The following table includes the corresponding impact of changes in the LCM inventory reserve on income (loss) from operations and net income (loss) for the periods presented (in millions):

Three Months Ended  March 31,

2021

2020

Net LCM inventory adjustment benefit (charge) in income (loss)
from operations

$

405.6

$

(1,285.6)

Net LCM inventory adjustment benefit (charge) in net income
(loss)

297.7

(947.5)

Change in Fair Value of Contingent Consideration - During the three months ended March 31, 2021, we recorded a change in fair value of the contingent consideration primarily related to the Martinez Contingent Consideration which decreased income from operations and net income by $30.1 million and $22.1 million, respectively. During the three months ended March 31, 2020, we recorded a change in the fair value of the contingent consideration primarily related to the Martinez Contingent Consideration which increased income from operations and net income by $52.8 million and $38.9 million, respectively.

Debt Extinguishment Costs - During the three months ended March 31, 2020, we recorded pre-tax debt extinguishment costs of $22.2 million related to the redemption of the 2023 Senior Notes. These nonrecurring charges decreased net income by $16.4 million for the three months ended March 31, 2020. There were no such costs in the three months ended March 31, 2021.

Change in Tax Receivable Agreement liability -  During the three months ended March 31, 2020, we recorded a change in the Tax Receivable Agreement liability that decreased income before taxes and net income by $11.6 million and $8.5 million, respectively. There was no change to the Tax Receivable Agreement liability during the three months ended  March 31, 2021. The changes in the Tax Receivable Agreement liability reflect charges or benefits attributable to changes in our obligation under the Tax Receivable Agreement due to factors out of our control such as changes in tax rates, as well as periodic adjustments to our liability based, in part, on an updated estimate of the amounts that we expect to pay, using assumptions consistent with those used in our concurrent estimate of the deferred tax asset valuation allowance.

Net tax expense on remeasurement of deferred tax assets - During the three months ended March 31, 2021, we recorded an increase to our deferred tax valuation allowance of $1.7 million in accordance with ASC 740, Income Taxes, related to the remeasurement of deferred tax assets. There was no such expense in the three months ended March 31, 2020.

(5) Represents an adjustment to weighted-average diluted shares outstanding to assume the full exchange of existing PBF LLC Series A Units as described in footnote 2 above.

(6) Represents weighted-average diluted shares outstanding assuming the conversion of all common stock equivalents, including options and warrants for PBF LLC Series A Units and performance share units and options for shares of PBF Energy Class A common stock as calculated under the treasury stock method (to the extent the impact of such exchange would not be anti-dilutive) for the three months ended March 31, 2021 and 2020, respectively. Common stock equivalents exclude the effects of performance share units and options and warrants to purchase 11,699,893 and 11,388,905 shares of PBF Energy Class A common stock and PBF LLC Series A Units because they are anti-dilutive for the three months ended March 31, 2021 and 2020, respectively. For periods showing a net loss, all common stock equivalents and unvested restricted stock are considered anti-dilutive.

(7) EBITDA (Earnings before Interest, Income Taxes, Depreciation and Amortization) and Adjusted EBITDA are supplemental measures of performance that are not required by, or presented in accordance with GAAP. Adjusted EBITDA is defined as EBITDA before adjustments for items such as stock-based compensation expense, the non-cash change in the fair value of catalyst obligations, the write down of inventory to the LCM, changes in the liability for Tax Receivable Agreement due to factors out of our control, such as changes in tax rates, debt extinguishment costs related to refinancing activities, and certain other non-cash items. We use these Non-GAAP financial measures as a supplement to our GAAP results in order to provide additional metrics on factors and trends affecting our business. EBITDA and Adjusted EBITDA are measures of operating performance that are not defined by GAAP and should not be considered substitutes for net income as determined in accordance with GAAP. In addition, because EBITDA and Adjusted EBITDA are not calculated in the same manner by all companies, they are not necessarily comparable to other similarly titled measures used by other companies. EBITDA and Adjusted EBITDA have their limitations as an analytical tool, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.

(8) We operate in two reportable segments: Refining and Logistics. Our operations that are not included in the Refining and Logistics segments are included in Corporate. As of March 31, 2021, the Refining segment includes the operations of our oil refineries and related facilities in Delaware City, Delaware, Paulsboro, New Jersey, Toledo, Ohio, Chalmette, Louisiana, Torrance, California and Martinez, California. The Logistics segment includes the operations of PBF Logistics LP ("PBFX"), a growth-oriented master limited partnership which owns or leases, operates, develops and acquires crude oil and refined petroleum products terminals, pipelines, storage facilities and similar logistics assets. PBFX's assets primarily consist of rail and truck terminals and unloading racks, storage facilities and pipelines, a substantial portion of which were acquired from or contributed by PBF LLC and are located at, or nearby, our refineries. PBFX provides various rail, truck and marine terminaling services, pipeline transportation services and storage services to PBF Holding and/or its subsidiaries and third party customers through fee-based commercial agreements.

PBFX currently does not generate significant third party revenue and intersegment related-party revenues are eliminated in consolidation. From a PBF Energy perspective, our chief operating decision maker evaluates the Logistics segment as a whole without regard to any of PBFX's individual operating segments.

(9) As reported by Platts.

(10) Gross refining margin and gross refining margin per barrel of throughput are Non-GAAP measures because they exclude refinery operating expenses, depreciation and amortization and gross margin of PBFX. Gross refining margin per barrel is gross refining margin, divided by total crude and feedstocks throughput. We believe they are important measures of operating performance and provide useful information to investors because gross refining margin per barrel is a helpful metric comparison to the industry refining margin benchmarks shown in the Market Indicators Tables, as the industry benchmarks do not include a charge for refinery operating expenses and depreciation. Other companies in our industry may not calculate gross refining margin and gross refining margin per barrel in the same manner. Gross refining margin and gross refining margin per barrel of throughput have their limitations as an analytical tool, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.

(11) Represents refinery operating expenses, including corporate-owned logistics assets, excluding depreciation and amortization, divided by total crude oil and feedstocks throughput.

(12) We define heavy crude oil as crude oil with American Petroleum Institute (API) gravity less than 24 degrees. We define medium crude oil as crude oil with API gravity between 24 and 35 degrees. We define light crude oil as crude oil with API gravity higher than 35 degrees.

(13) The total debt to capitalization ratio is calculated by dividing total debt by the sum of total debt and total equity. This ratio is a measurement that management believes is useful to investors in analyzing our leverage. Net debt and the net debt to capitalization ratio are Non-GAAP measures. Net debt is calculated by subtracting cash and cash equivalents from total debt. We believe these measurements are also useful to investors since we have the ability to and may decide to use a portion of our cash and cash equivalents to retire or pay down our debt. Additionally, we have also presented the total debt to capitalization and net debt to capitalization ratios excluding the cumulative effects of special items on equity.

March 31,

December 31,

2021

2020

(in millions)

Total debt

$

4,657.9

$

4,661.0

Total equity

2,176.1

2,202.3

Total capitalization

$

6,834.0

$

6,863.3

Total debt

$

4,657.9

$