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PBF LOGISTICS LP - 10-K - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information presented in this Form 10-K contains the audited combined
financial results of our Predecessor, for periods presented through May 13,
2014. The financial information for our Predecessor includes the financial
results of the IPO Assets acquired from PBF LLC after the closing of the
Offering. The audited consolidated financial results for the years
ended December 31, 2014 also include the results of operations for PBFX for the
period beginning May 14, 2014, the date PBFX commenced operations.
The Acquisitions from PBF were transfers between entities under common control.
Accordingly, the financial information of our Predecessor and PBFX contained
herein has been retrospectively adjusted to include the historical results of
the assets acquired in the Acquisitions from PBF prior to the effective date of
each acquisition for all periods presented.
With the exception of pipeline revenue generated by the Delaware City Products
Pipeline, our Predecessor generally recognized only the costs and did not record
revenue for transactions with PBF Energy prior to the Offering and the
Acquisitions from PBF. Affiliate revenues have been recorded for all of our
assets in the Transportation and Terminaling and Storage segments subsequent to
the commencement of the commercial agreements with PBF Energy upon completion of
the Offering and Acquisitions from PBF. See "Item 6. Selected Financial Data"
and "Factors Affecting the Comparability of Our Financial Results" in "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" on page 63 for further information. See "-Overview" for further
information regarding the Acquisitions from PBF.
The following information concerning our results of operations and financial
condition should be read in conjunction with "Items 1. 1A. and 2. Business, Risk
Factors, and Properties," "Item 6. Selected Financial Data," and "Item 8.
Financial Statements and Supplementary Data," respectively, included in this
Form 10-K.




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IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-K contains certain "forward-looking statements", as defined in the
Private Securities Litigation Reform Act of 1995, that involve risk and
uncertainties. You can identify forward-looking statements because they contain
words such as "believes," "expects," "may," "should," "seeks," "approximately,"
"intends," "plans," "estimates," or "anticipates" or similar expressions that
relate to our strategy, plans or intentions. All statements we make relating to
our estimated and projected earnings, margins, costs, expenditures, cash flows,
growth rates and financial results or to our expectations regarding future
industry trends are forward-looking statements. In addition, we, through our
senior management, from time to time make forward-looking public statements
concerning our expected future operations and performance and other
developments. These forward-looking statements are subject to risks and
uncertainties that may change at any time, and, therefore, our actual results
may differ materially from those that we expected. We derive many of our
forward-looking statements from our operating budgets and forecasts, which are
based upon many detailed assumptions. While we believe that our assumptions are
reasonable, we caution that it is very difficult to predict the impact of known
factors, and, of course, it is impossible for us to anticipate all factors that
could affect our actual results.
Important factors that could cause actual results to differ materially from our
expectations, which we refer to as "cautionary statements," are disclosed under
"Item 1A. Risk Factors," and "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" and elsewhere in this Form 10-K.
All forward-looking information in this Form 10-K and subsequent written and
oral forward-looking statements attributable to us, or persons acting on our
behalf, are expressly qualified in their entirety by the cautionary statements.
Some of the factors that we believe could affect our results include:
• our limited operating history as a separate public partnership;


• changes in general economic conditions;

•           our ability to have sufficient cash from operations to enable us to
            pay the minimum quarterly distribution;

• competitive conditions in our industry;

• actions taken by our customers and competitors;

•           the supply of, and demand for, crude oil, refined products and
            logistics services;

• our ability to successfully implement our business plan;


•           our dependence on PBF Energy for all of our revenues and, 

therefore,

            we are subject to the business risks of PBF Energy;


•           all of our revenue is generated at two of PBF Energy's 

facilities,

            and any adverse development at either facility could have a material
            adverse effect on us;

• our ability to complete internal growth projects on time and on budget;

• the price and availability of debt and equity financing;

• operating hazards and other risks incidental to handling crude oil;

•           natural disasters, weather-related delays, casualty losses and other
            matters beyond our control;


• interest rates;


• labor relations;


• changes in the availability and cost of capital;


•           the effects of existing and future laws and governmental 

regulations,

            including those related to the shipment of crude oil by trains;


•           changes in insurance markets impacting costs and the level and types
            of coverage available;



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•           the timing and extent of changes in commodity prices and 

demand for

            PBF Energy's refined products and the differential in the

prices of

            different crude oils;


•           the suspension, reduction or termination of PBF Energy's 

obligations

            under our commercial agreements;


•           disruptions due to equipment interruption or failure at our
            facilities, PBF Energy's facilities or third-party facilities on
            which our business is dependent;

• incremental costs as a stand-alone public company;

•           our general partner and its affiliates, including PBF Energy, have
            conflicts of interest with us and limited duties to us and our
            unitholders, and they may favor their own interests to the detriment
            of us and our other common unitholders;


•           our partnership agreement restricts the remedies available to holders
            of our common units for actions taken by our general partner that
            might otherwise constitute breaches of fiduciary duty;


•           holders of our common units have limited voting rights and are not
            entitled to elect our general partner or its directors;


•           our tax treatment depends on our status as a partnership for 
U.S.
            federal income tax purposes, as well as our not being subject to a
            material amount of entity level taxation by individual states;


•           changes at any time (including on a retroactive basis) in the tax
            treatment of publicly traded partnerships or an investment in our
            common units;


•           our unitholders will be required to pay taxes on their share of our
            taxable income even if they do not receive any cash

distributions

            from us;


•           our ability to consummate the Plains Asset Purchase, the timing for
            the closing of such purchase and our plans for financing such
            purchase;

• the effects of future litigation; and

• other factors discussed elsewhere in this Form 10-K.


We caution you that the foregoing list of important factors may not contain all
of the material factors that are important to you. In addition, in light of
these risks and uncertainties, the matters referred to in the forward-looking
statements contained in this Form 10-K may not in fact occur. Accordingly,
investors should not place undue reliance on those statements.
Our forward-looking statements speak only as of the date of this Form 10-K or as
of the date which they are made. Except as required by applicable law, including
the securities laws of 
the United States
, we do not intend to update or revise
any forward-looking statements. All subsequent written and oral forward-looking
statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the foregoing.

Overview

PBFX is a fee-based, growth-oriented, 
Delaware
 master limited partnership formed
in February 2013 by subsidiaries of PBF Energy to own or lease, operate, develop
and acquire crude oil and refined petroleum products terminals, pipelines,
storage facilities and similar logistics assets. On May 14, 2014, PBFX completed
the Offering of 15,812,500 common units (including 2,062,500 common units issued
pursuant to the exercise of the underwriters' over-allotment option). PBF
Logistics GP is our general partner and is wholly-owned by PBF LLC. PBF Energy
is the sole managing member of PBF LLC and as of December 31, 2015 owned 95.1%
of the total economic interest in PBF LLC. As of December 31, 2015. PBF LLC held
a 53.7% limited partner interest in PBFX and owns all of PBFX's IDRs, with the
remaining 46.3% limited partner interest held by public unitholders.

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The Partnership includes the assets, liabilities and results of operations of
certain crude oil and refined product terminaling and storage assets, previously
operated and owned by PBF Holding subsidiaries, DCR, TRC, and PBF Holding's
previously held subsidiary, DPC, which were acquired in a series of transactions
during 2014 and 2015.
In connection with the Offering, pursuant to a contribution agreement and
conveyance agreement, PBF LLC contributed the IPO Assets. Prior to completion of
the Offering, the assets, liabilities and results of operations of the
aforementioned assets related to our Predecessor.

On September 16, 2014, the Partnership entered into the Contribution Agreement
II with PBF LLC to acquire the DCR West Rack, a heavy crude oil unloading
facility at the Delaware City refinery with total throughput capacity of at
least 40,000 bpd. The transaction closed on September 30, 2014. On December 2,
2014, the Partnership entered into the Contribution Agreement III with PBF LLC
to acquire the Toledo Storage Facility, including a propane storage and loading
facility. The transaction closed on December 11, 2014.

Effective May 14, 2015, the Partnership also entered into the Contribution
Agreement IV with PBF LLC to acquire the Delaware City Products Pipeline, a 23.4
mile, 16-inch interstate petroleum products pipeline with capacity in excess of
125,000 bpd and the Delaware City Truck Rack, a 15-lane, 76,000 bpd capacity
truck loading rack utilized to distribute gasoline and distillates. The
transaction closed on May 15, 2015.
The financial results presented and related discussion and analysis include the
consolidated financial position, results of operations and cash flow information
of our Predecessor.
Our Predecessor did not historically operate their assets for the purpose of
generating revenues independent of other PBF Energy businesses that we support.
Upon closing of the Offering and the Acquisitions from PBF, we entered into fee
based commercial and service agreements with subsidiaries of PBF Energy under
which we operate the Contributed Assets for the purpose of generating fee based
revenues. We receive, handle and transfer crude oil from sources located
throughout 
the United States
 and 
Canada
 and store crude oil, refined products,
and intermediates for PBF Energy in support of its refineries located in 
Toledo, Ohio
, 
Delaware City, Delaware
 and 
Paulsboro, New Jersey
. The Contributed Assets
consist of the DCR Rail Terminal, the Toledo Truck Terminal, the DCR West Rack,
the Toledo Storage Facility and the Delaware City Products Pipeline and Truck
Rack, which are integral components of the crude oil delivery, product
distribution and storage operations at PBF Energy's refineries.
Business Strategies
We continue to focus on the following strategic areas:
•      Generate Stable, Fee-Based Cash Flow. We intend to generate stable
       revenues by providing traditional logistics services to PBF Energy and
       third-parties pursuant to long-term, fee-based contracts. In any new

service contracts we may enter into, we will endeavor to negotiate minimum

volume commitments similar to those included under our current commercial

agreements with PBF Energy.

• Grow Through Acquisitions. We plan to pursue strategic acquisitions of

assets from PBF Energy as well as third parties. We believe PBF Energy

will offer us opportunities to purchase additional transportation and

midstream assets that it may acquire or develop in the future or that it

currently owns. We also may have opportunities to pursue the acquisition

or development of additional assets jointly with PBF Energy.

• Seek to Optimize Our Existing Assets and Pursue Third-Party Volumes. We

intend to enhance the profitability of our existing and future assets by

increasing throughput volumes from PBF Energy, attracting third-party

       volumes, improving operating efficiencies and managing costs.


•      Maintain Safe, Reliable and Efficient Operations. We are committed to
       maintaining and improving the safety, reliability, environmental

compliance and efficiency of our operations. We seek to improve operating

performance through our commitment to our preventive maintenance program

       and to employee training and development programs. We will continue to
       emphasize safety in all aspects of our operations.



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How We Evaluate Our Operations

Our management uses a variety of financial and operating metrics to analyze our
segment performance. These metrics are significant factors in assessing our
operating results and profitability and include but are not limited to volumes,
including terminal and storage volumes; operating and maintenance expenses; and
EBITDA and distributable cash flow. We define EBITDA and distributable cash flow
below.

Volumes. The amount of revenue we generate primarily depends on the volumes of
crude oil that is throughputted at our terminaling operations and operable shell
capacity at our storage facility. The throughput volumes are primarily affected
by the supply of and demand for crude oil and refined products in the markets
served directly or indirectly by our assets. Shell capacity is mainly impacted
by scheduled and unplanned maintenance at our Toledo Storage Facility. Although
PBF Energy has committed to minimum volumes under certain commercial agreements
described above, our results of operations will be impacted by:

•           PBF Energy's utilization of our assets in excess of its minimum
            volume commitments;


•           our ability to identify and execute accretive acquisitions and
            organic expansion projects, and capture PBF Energy's

incremental

            volumes or third-party volumes; and


•           our ability to increase throughput volumes at our facilities and
            provide additional ancillary services at those terminals.


Operating and Maintenance Expenses. Our management seeks to maximize the
profitability of our operations by effectively managing operating and
maintenance expenses. These expenses are comprised primarily of labor expenses,
outside contractor expenses, utility costs, insurance premiums, repairs and
maintenance expenses and related property taxes. These expenses generally remain
relatively stable across broad ranges of throughput volumes and shell capacity
but can fluctuate from period to period depending on the mix of activities
performed during that period and the timing of these expenses. We will continue
to manage our maintenance expenditures on our terminals and tank farm by
scheduling maintenance overtime to avoid significant variability in our
maintenance expenditures and to minimize their impact on our cash flow.
EBITDA and Distributable Cash Flow. We define EBITDA as net income (loss) before
net interest expense, income tax expense, depreciation and amortization expense.
We define distributable cash flow as EBITDA plus non-cash unit-based
compensation expense, less net cash paid for interest, maintenance capital
expenditures and income taxes, to analyze our performance. Distributable cash
flow does not reflect changes in working capital balances. Distributable cash
flow and EBITDA are not presentations made in accordance with GAAP.
EBITDA and distributable cash flow are not measures prescribed by GAAP
("non-GAAP") but are supplemental financial measures that management and
external users of our consolidated financial statements, such as industry
analysts, investors, lenders and rating agencies, may use to assess:

•           our operating performance as compared to other publicly traded
            partnerships in the midstream energy industry, without regard to
            historical cost basis or, in the case of EBITDA, financing methods;


•           the ability of our assets to generate sufficient cash flow to make
            distributions to our unitholders;


• our ability to incur and service debt and fund capital expenditures; and


•           the viability of acquisitions and other capital expenditure projects
            and the returns on investment of various investment

opportunities.


We believe that the presentation of EBITDA provides useful information to
investors in assessing our financial condition and results of operations. We
believe that the presentation of distributable cash flow will provide useful
information to investors as it is a widely accepted financial indicator used by
investors to compare partnership performance and provides investors with an
enhanced perspective of the operating performance of our assets and the cash our
business is generating. EBITDA and distributable cash flow should not be
considered alternatives to

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net income, operating income, cash from operations or any other measure of
financial performance or liquidity presented in accordance with GAAP. EBITDA and
distributable cash flow have important limitations as analytical tools because
they exclude some but not all items that affect net income and net cash provided
by operating activities. Additionally, because EBITDA and distributable cash
flow may be defined differently by other companies in our industry, our
definition of EBITDA may not be comparable to similarly titled measures of other
companies, thereby diminishing its utility. EBITDA and distributable cash flows
are reconciled to net income (loss) in "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Results of Operations."

Factors Affecting the Comparability of Our Financial Results
Our future results of operations may not be comparable to our historical results
of operations for the reasons described below:
Revenues. There are differences in the way our Predecessor historically reported
revenues for services provided to PBF Energy and the way we record revenues
subsequent to the closing of the Offering and effective date of the Acquisitions
from PBF. Our assets have historically been a part of the integrated operations
of PBF Energy, and the operation of our assets, did not generate third-party or
inter-entity revenue, with the exception of the Delaware City Products Pipeline.
Prior to August 2013, DPC generated third party revenue by charging fees for
transporting refined products pursuant to an agreement with Morgan Stanley
Capital Group. Upon termination of this contract, only inter-entity revenue from
DCR was recognized.

Following the closing of the Offering and effective dates of the Acquisitions
from PBF, revenues are generated from the commercial agreements that we entered
into with PBF Holding under which we receive revenues for logistics services.
These contracts contain minimum volume commitments and fees that are indexed for
inflation.
General and Administrative Expenses. Historically, our general and
administrative expenses included direct monthly charges for the management and
operation of our logistics assets and certain expenses allocated by PBF Energy
for general corporate services, such as treasury, accounting and legal services.
These expenses were allocated to us based on the nature of the expenses and our
proportionate share of employee time and headcount. Following the annual
increase pursuant to the terms of the Original Omnibus Agreement, as amended by
the A&R Omnibus Agreement and the Second A&R Omnibus Agreement, the annual fee
PBF Energy charges us was reduced to $2.2 million per year effective as of
January 1, 2015. On May 15, 2015, the annual fee was increased to $2.35 million
in connection with the Delaware City Products Pipeline and Truck Rack
Acquisition. Additionally, we reimburse our general partner and its affiliates,
including subsidiaries of PBF Energy, for the salaries and benefits costs of
employees who devote more than 50% of their time to us, which is currently
estimated to be approximately $2.5 million annually. We also generally expect to
incur approximately $4.5 million of incremental annual general and
administrative expense as a result of being a publicly traded partnership. For
more information about such fees and services, please read "Item 1. Business -
Agreements with PBF Energy - Omnibus Agreement."
Financing. We have made, and intend to make, cash distributions to our
unitholders at a minimum distribution rate of $0.30 per unit per quarter ($1.20
per unit on an annualized basis). As a result, we expect to fund future capital
expenditures primarily from the sale of 
U.S.
 Treasury or other investment grade
securities used as collateral to secure obligations under our Term Loan,
external sources including borrowings under our Revolving Credit Facility, and
issuances of equity and debt securities. In connection with the closing of the
Offering, we entered into the Revolving Credit Facility and the Term Loan. In
connection with the Acquisitions from PBF and additional capital spending, we
amended and restated the terms of our Revolving Credit Facility to increase the
maximum availability under the facility from $275.0 million to $325.0 million.
On May 12, 2015, the Partnership and its wholly-owned subsidiary PBF Logistics
Finance Corporation, closed on the offering of $350.0 million aggregate
principal amount of the 2023 Notes. We received net proceeds from the 2023 Notes
offering of approximately $343.0 million, after deducting the initial
purchasers' discount and offering expenses. We used the net proceeds to pay
$88.0 million of the cash consideration payable by us in the 
Delaware City
Products Pipeline and Truck Rack Acquisition and to repay $255.0 million of the
outstanding indebtedness under the Revolving Credit Facility. We also used $20.1
million of cash on hand to pay down the Revolving Credit Facility prior to the
completion of

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the Delaware City Products Pipeline and Truck Rack Acquisition. In addition, in
connection with the Delaware City Products Pipeline and Truck Rack Acquisition,
we reborrowed $24.5 million under the Revolving Credit Facility to pay the
remaining portion of the cash consideration and related transaction costs. At
December 31, 2015, we had $24.5 million of borrowings and $2.0 million of
letters of credit outstanding under the Revolving Credit Facility, $234.2
million outstanding under the Term Loan and $350.0 million outstanding under the
2023 Notes.

Other Factors That Will Significantly Affect Our Results
Supply and Demand for Crude Oil and Refined Products. We generate revenue by
charging fees for receiving and handling, processing, transferring and storing
crude oil and refined products. All of our revenues are derived from fee-based
commercial agreements with subsidiaries of PBF Energy with initial terms of
seven to ten years, which enhances the stability of our cash flows. The volume
of crude oil and refined products that are throughputted depends substantially
on PBF Energy's refining margins. Refining margins are dependent mostly upon the
price of crude oil or other refinery feedstocks and the price of refined
products.
Factors driving the prices of petroleum based commodities include supply and
demand for crude oil, gasoline and other refined products. Supply and demand for
these products depend on numerous factors outside of our control, including
changes in domestic and foreign economies, weather conditions, domestic and
foreign political affairs, production levels, logistics constraints,
availability of imports, marketing of competitive fuels, crude oil price
differentials and government regulation. Please read "Item 1A. Risk Factors" in
this Form 10-K.
Acquisition Opportunities. We may acquire additional logistics assets from PBF
Energy or third parties. Under the Third A&R Omnibus Agreement, subject to
certain exceptions, we have a right of first offer on certain logistics assets
retained by PBF Energy to the extent PBF Energy decides to sell, transfer or
otherwise dispose of any of those assets. We also have a right of first offer to
acquire additional logistics assets that PBF Energy may construct or acquire in
the future. Our commercial agreements provide us with options to purchase
certain assets at PBF Energy's 
Delaware City
 and 
Toledo
 refineries related to
our business in the event PBF Energy permanently shuts down either the Delaware
City refinery or the Toledo refinery. In addition, our commercial agreements
provide us with the right to use certain assets at PBF Energy's 
Delaware City
 or
Toledo
 refineries in the event of a temporary shutdown. In addition, we may
pursue strategic asset acquisitions from third parties to the extent such
acquisitions complement our or PBF Energy's existing asset base or provide
attractive potential returns. We believe that we are well-positioned to acquire
logistics assets from PBF Energy and third parties should such opportunities
arise, and identifying and executing acquisitions is a key part of our strategy.
However, if we do not make acquisitions on economically acceptable terms, our
future growth will be limited, and the acquisitions we do make may reduce,
rather than increase, our cash available for distribution. These acquisitions
could also affect the comparability of our results from period to period. We
expect to fund future growth capital expenditures primarily from a combination
of cash-on-hand, borrowings under our Revolving Credit Facility and the issuance
of additional equity or debt securities. To the extent we issue additional units
to fund future acquisitions or expansion capital expenditures, the payments of
distributions on those additional units may increase the risk that we will be
unable to maintain or increase our per unit distribution level.
Third-Party Business. As of December 31, 2015, PBF Energy accounts for all of
our revenues. We are examining further diversification of our customer base by
potentially developing third-party throughput volumes at our existing assets and
expanding our asset portfolio to service third-party customers. Unless we are
successful in attracting third-party customers, our ability to increase volumes
will be dependent on PBF Holding, which has no obligation under our commercial
agreements to supply our facilities with additional volumes in excess of its
minimum volume commitments. If we are unable to increase throughput volumes,
future growth may be limited.
Results of Operations
A discussion and analysis of the factors contributing to our results of
operations is presented below. The accompanying combined financial statements
for the period prior to May 14, 2014, represent our Predecessor's results of
operations, while the consolidated financial statements for the period
subsequent to May 14, 2014, represent the results of operations for the
Partnership. The financial information of the Predecessor and the

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Partnership contained herein have been retrospectively adjusted to include the
historical results of the Acquisitions from PBF for all periods presented prior
to the effective date of each transaction. The financial statements, together
with the following information, are intended to provide investors with a
reasonable basis for assessing our historical operations, but should not serve
as the only criteria for predicting our future performance.
Combined Overview. The following tables and discussion are a summary of our
results of operations for the years ended December 31,
2015, 2014 and 2013 including a reconciliation of EBITDA to net income (loss)
and net cash provided by (used in) operating activities and distributable cash
flow to net income and net cash provided by (used in) operating activities:
                                                    Year ended December 31,
                                         2015               2014(a)               2013
                                                                              Predecessor
                                                         (In thousands)
Revenue:
Affiliate                          $       142,102     $        59,403     $          5,073
Third-party                                      -                   -                3,440
Total Revenue                              142,102              59,403                8,513

Costs and expenses:
Operating and maintenance
expenses                                    25,255              26,215               17,405
General and administrative
expenses                                    13,889               8,201                2,452
Depreciation and amortization                6,582               4,473      

3,071

Total costs and expenses                    45,726              38,889      

22,928

Income (loss) from operations               96,376              20,514              (14,415 )

Other income (expense):
Interest expense, net                      (19,939 )            (2,307 )                 13
Amortization of loan fees                   (1,315 )              (365 )                  -
Net income (loss)                           75,122              17,842     $        (14,402 )
Less: Net income (loss)
attributable to Predecessor                  1,274             (12,122 )
Net income attributable to the
Partnership                        $        73,848     $        29,964

Other Data:
EBITDA                             $       102,958     $        24,987     $        (11,344 )
Distributable cash flow                     83,922              32,801                  N/A
Capital expenditures                         2,046              47,805               47,192


____________

(a) The information presented includes the results of operations of our

Predecessor for periods presented through May 13, 2014 and of PBFX for the

       period beginning May 14, 2014, the date PBFX commenced operations. The
       information also includes the results of operations of the DCR West Rack,
       the Toledo Storage Facility, and the Delaware City Products Pipeline and
       Truck Rack for periods presented through the effective date of each

acquisition. PBFX includes the DCR West Rack, the Toledo Storage Facility,

and the Delaware City Products Pipeline and Truck Rack for the period

subsequent to the acquisitions. Prior to the Offering and the Acquisitions

from PBF, revenues were not recorded for terminaling with the exception of

revenues associated with the DCR Products Pipeline.


Reconciliation of Non-GAAP Financial Measures. As described in "Management's
Discussion and Analysis of Financial Condition and Results of Operations-How We
Evaluate Our Operations," our management uses

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EBITDA and distributable cash flow to analyze our performance. The following
table presents a reconciliation of net income (loss) to EBITDA and distributable
cash flow, the most directly comparable GAAP financial measure on a historical
basis, for the periods indicated.
                                                        Year ended December 31,
                                                   2015         2014           2013
                                                                           Predecessor
                                                             (In thousands)

Net income (loss)                               $ 75,122     $ 17,842     $    (14,402 )
Add: Interest expense, net                        19,939        2,307              (13 )
Add: Amortization of loan fees                     1,315          365       

-

Add: Depreciation and amortization                 6,582        4,473            3,071
EBITDA                                           102,958       24,987     $    (11,344 )
Less: Predecessor EBITDA                           1,537       (9,040 )
EBITDA attributable to PBFX                      101,421       34,027

Add: Non-cash unit-based compensation expense 4,279 1,086 Less: Interest expense, net

                      (19,952 )     (2,312 )
Less: Maintenance capital expenditures            (1,826 )          -
Distributable cash flow                         $ 83,922     $ 32,801


The following table presents a reconciliation of net cash provided by (used in)
operating activities to EBITDA and distributable cash flow, for the periods
indicated.
                                                      Year ended December 31,
                                            2015              2014               2013
                                                                              Predecessor
                                                          (In thousands)

Net cash provided by (used in)
operating activities:                  $     78,546     $       12,887     $       (10,697 )
Add: Change in current assets and
liabilities                                   8,752             10,879                (634 )
Add: Interest expense, net                   19,939              2,307                 (13 )
Less: Non-cash unit-based
compensation expense                         (4,279 )           (1,086 )                 -
EBITDA                                      102,958             24,987     $       (11,344 )
Less: Predecessor EBITDA                      1,537             (9,040 )
EBITDA attributable to PBFX                 101,421             34,027
Add: Non-cash unit-based
compensation expense                          4,279              1,086
Less: Interest expense, net                 (19,952 )           (2,312 )
Less: Maintenance capital
expenditures                                 (1,826 )                -
Distributable cash flow                $     83,922     $       32,801


The following tables are a summary of our results of operations for the year
ended December 31, 2015 and 2014, disaggregated to present the results of
operations of the Partnership and our pre-close results of the 
Delaware City
Products Pipeline and Truck Rack and our Predecessor, respectively. For the
purpose of the tables, Predecessor includes the pre-close results of the
Acquisitions from PBF:

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                                                         Year Ended December 31, 2015
                                                           Delaware City Products
                                                             Pipeline and Truck
                                      PBF Logistics LP              Rack             Consolidated Results
                                                                (In thousands)
Revenue:
Affiliate                            $         138,719     $              3,383     $            142,102
Third-party                                          -                        -                        -
Total Revenue                                  138,719                    3,383                  142,102

Operating costs and expenses:
Operating and maintenance expenses              23,890                    1,365                   25,255
General and administrative
expenses                                        13,408                      481                   13,889
Depreciation and amortization                    6,306                      276                    6,582
Total costs and expenses                        43,604                    2,122                   45,726
Income (loss) from operations                   95,115                    1,261                   96,376
Other income (expense):
Interest expense, net                          (19,952 )                     13                  (19,939 )
  Amortization of loan fees                     (1,315 )                      -                   (1,315 )
Net income (loss)                    $          73,848     $              1,274     $             75,122

Reconciliation of EBITDA to net income (loss):
Net income (loss)                    $          73,848     $              1,274     $             75,122
Add: Interest expense, net                      19,952                      (13 )                 19,939
Add: Amortization of loan fees                   1,315                        -                    1,315
Add: Depreciation and amortization               6,306                      276                    6,582
EBITDA                                         101,421                    1,537                  102,958
Less: Predecessor EBITDA                             -                    1,537                    1,537
EBITDA attributable to limited
partners                                       101,421                        -                  101,421
Add: Non-cash unit-based
compensation expense                             4,279                        -                    4,279
Less: Interest expense, net                    (19,952 )                      -                  (19,952 )
Less: Maintenance capital
expenditures                                    (1,826 )                      -                   (1,826 )
Distributable cash flow              $          83,922     $                  -     $             83,922

Reconciliation of distributable cash flow to net income
(loss):
Net cash provided by (used in)
operating activities:                $          77,307     $              1,239     $             78,546
Add: Change in current assets and
liabilities                                      8,441                      311                    8,752
Add: Interest expense, net                      19,952                      (13 )                 19,939
Less: Non-cash unit-based
compensation expense                            (4,279 )                      -                   (4,279 )
EBITDA                                         101,421                    1,537                  102,958
Less: Predecessor EBITDA                             -                    1,537                    1,537
EBITDA attributable to PBFX                    101,421                        -                  101,421
Add: Non-cash unit-based
compensation expense                             4,279                        -                    4,279
Less: Interest expense, net                    (19,952 )                      -                  (19,952 )
Less: Maintenance capital
expenditures                                    (1,826 )                      -                   (1,826 )
Distributable cash flow              $          83,922     $                  -     $             83,922




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                                                       Year Ended December 31, 2014
                                      PBF Logistics LP        Predecessor       Consolidated Results
                                                              (In thousands)
Revenue:
Affiliate                            $          49,830     $         9,573     $            59,403
Third-party                                          -                   -                       -
Total Revenue                                   49,830               9,573                  59,403

Operating costs and expenses:
Operating and maintenance expenses               9,418              16,797                  26,215
General and administrative
expenses                                         6,385               1,816                   8,201
Depreciation and amortization                    1,386               3,087                   4,473
Total costs and expenses                        17,189              21,700                  38,889
Income (loss) from operations                   32,641             (12,127 )                20,514
Other income (expense):
Interest expense, net                           (2,312 )                 5                  (2,307 )
  Amortization of loan fees                       (365 )                 -                    (365 )
Net income (loss)                    $          29,964     $       (12,122 )   $            17,842

Reconciliation of EBITDA to net income (loss):
Net income (loss)                    $          29,964     $       (12,122 )   $            17,842
Add: Interest expense, net                       2,312                  (5 )                 2,307
Add: Amortization of loan fees                     365                   -                     365
Add: Depreciation and amortization               1,386               3,087                   4,473
EBITDA                                          34,027              (9,040 )                24,987
Less: Predecessor EBITDA                             -              (9,040 )                (9,040 )
EBITDA attributable to limited
partners                                        34,027                   -                  34,027
Add: Non-cash unit-based
compensation expense                             1,086                   -                   1,086
Less: Interest expense, net                     (2,312 )                                    (2,312 )
Less: Maintenance capital
expenditures                                         -                   -                       -
Distributable cash flow              $          32,801     $             -     $            32,801

Reconciliation of distributable cash flow to net income
(loss):
Net cash provided by (used in)
operating activities:                $          25,118     $       (12,231 )   $            12,887
Add: Change in current assets and
liabilities                                      7,683               3,196                  10,879
Add: Interest expense, net                       2,312                  (5 )                 2,307
Less: Non-cash unit-based
compensation expense                            (1,086 )                 -                  (1,086 )
EBITDA                                          34,027              (9,040 )                24,987
Less: Predecessor EBITDA                             -              (9,040 )                (9,040 )
EBITDA attributable to PBFX                     34,027                   -                  34,027
Add: Non-cash unit-based
compensation expense                             1,086                   -                   1,086
Less: Interest expense, net                     (2,312 )                                    (2,312 )
Less: Maintenance capital
expenditures                                         -                   -                       -
Distributable cash flow              $          32,801     $             -     $            32,801




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Summary. Our net income for the year ended December 31, 2015 increased $57.3
million, or 321.0%, to  $75.1 million from $17.8 million for the year
ended December 31, 2014. The increase in net income was primarily due to the
following:
•      an increase in revenues of $82.7 million to $142.1 million attributable to
       the effect of the new commercial agreements with PBF Energy and a full
       year of commercial operations in 2015;

• a decrease in Transportation and Terminaling operating and maintenance

expenses of $1.8 million, or 9.4%, mainly related to a reduction in

outside service expenses, utilities, including lower steam and nitrogen

       costs, and lower operational support and overhead costs, offset by an
       increase in Storage operating support and insurance expenses of $0.8
       million, or 11.1%;

• partially offset by the following:

•            an increase in general and administrative expenses of $5.7 million,
             or 69.4%, as a result of increased cost allocations of certain
             direct employee costs, additional expenses related to being a
             publicly traded partnership and expenses associated with PBFX
             unit-based compensation;


•            an increase in depreciation and amortization expenses of $2.1
             million, or 47.1%, related to the timing of acquisitions and new
             assets being placed in service;


•            an increase in interest expense, net of $17.6 million which was
             attributable to the interest costs associated with the 2023 Notes
             issued in May 2015; and


•            an increase in amortization of loan fees of $1.0 million due to the
             amortization of capitalized debt issuance costs associated with the
             2023 Notes.



Our net income for the year ended December 31, 2014 increased $32.2 million, or
223.9%, to $17.8 million from a net loss of $14.4 million for the year
ended December 31, 2013. The increase in net loss was primarily due to the
following:
•      an increase in revenues of $50.9 million to $59.4 million attributable to

the effect of the new commercial agreements with PBF Energy;

• partially offset by the following:

•            an increase in operating and maintenance expenses of $8.8 million,
             or 50.6%, mainly related to higher repairs and maintenance and
             contract labor expenses;


•            an increase in general and administrative expenses of $5.7 million,
             or 234.5%, as a result of increased cost allocations of certain
             direct employee costs, additional expenses related to being a
             publicly traded partnership and expenses associated with PBFX
             unit-based compensation;


•            an increase in depreciation and amortization expenses of $1.4
             million, or 45.7%, related to new assets, including the DCR West
             Rack and the new crude storage tank at the Toledo Storage Facility,
             which were placed in service in 2014;


•            an increase in interest expense, net of $2.3 million which was
             attributable to the interest costs associated with the Term Loan and
             Revolving Credit Facility, partially offset by interest income
             associated with our marketable securities; and


•            an increase in amortization of loan fees of $0.4 million due to the
             amortization of capitalized debt issuance costs associated with the
             Term Loan and Revolving Credit Facility.


Operating Segments
We review operating results in two reportable segments: (i) Transportation and
Terminaling and (ii) Storage. Decisions concerning the allocation of resources
and assessment of operating performance are made based on this segmentation.
Management measures the operating performance of each of its reportable segments
based on the segment operating income. Segment operating income is defined as
net sales less operating expenses and depreciation and amortization. General and
administrative expenses not included in the Transportation and

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Terminaling and Storage segments are included in Corporate. Segment reporting is
more fully discussed in Note 12-Segment Information to our Consolidated
Financial Statements included in "Item 8. Financial Statements and Supplementary
Data."
Transportation and Terminaling Segment
The following table and discussion is an explanation of our results of
operations of the Transportation and Terminaling segment for the years
ended December 31, 2015, 2014 and 2013:
                                                     Year ended December 31,
                                          2015               2014 (a)               2013
                                                                                Predecessor
                                            (In thousands, except per barrel amounts)
Revenue:
Affiliate                          $        120,750     $         58,205     $          5,073
Third-party                                       -                    -                3,440
Total Revenue                               120,750               58,205                8,513

Operating costs and expenses:
Operating and maintenance
expenses                                     17,077               18,856               10,761
Depreciation and amortization                 3,943                2,694                1,739
Total costs and expenses                     21,020               21,550               12,500
Transportation and Terminaling
Segment Operating Income (Loss)    $         99,730     $         36,655    

$ (3,987 )

____________

(a) The information presented includes the results of operations of our

Predecessor for periods presented through May 13, 2014 and of PBFX for the

       period beginning May 14, 2014, the date PBFX commenced operations. The
       information also includes the results of operations of the DCR West Rack,
       the Toledo Storage Facility, and the Delaware City Products Pipeline and
       Truck Rack for periods presented through the effective date of each

acquisition. PBFX includes the DCR West Rack, the Toledo Storage Facility,

and the Delaware City Products Pipeline and Truck Rack for the period

subsequent to the acquisitions. Prior to the Offering and the Acquisitions

from PBF, revenues were not recorded for terminaling with the exception of

       revenues associated with the DCR Products Pipeline.




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                                                  Year ended December 31,
                                              2015        2014          2013
                                                                    Predecessor
                                                       (In thousands)
Key Operating Information:
Throughput (bpd)
Delaware City Rail Terminal                     33.3        74.4            N/A
DCR West Rack                                   20.1        51.2            N/A
Toledo Truck Terminal                           15.0         9.2            N/A
Toledo Storage Facility (Propane Loading)        4.4         3.9            

N/A

Delaware City Products Pipeline                 46.1        51.3           48.5
Delaware City Truck Rack                        33.2         N/A            N/A
Total throughput (barrels)
Delaware City Rail Terminal                 12,150.5    17,265.8            N/A
DCR West Rack                                7,342.8     4,708.9            N/A
Toledo Truck Terminal                        5,490.1     2,131.0            N/A
Toledo Storage Facility (Propane Loading)    1,604.8        78.4            

N/A

Delaware City Products Pipeline             16,815.4    18,741.6       17,704.2
Delaware City Truck Rack                     7,679.9         N/A            N/A
Total                                       51,083.5    42,925.7       17,704.2




Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Revenue. Revenue from affiliates increased approximately $62.5 million,
or 107.5%, to approximately $120.8 million for the year ended December 31,
2015 compared to approximately $58.2 million for the year ended December 31,
2014. The increase in revenue from affiliates was primarily attributed to the
effects of the commercial agreements associated with the timing of the
Acquisitions from PBF. Prior to the Offering and the Acquisitions from PBF, our
assets were a part of the integrated operations of PBF Energy and the operation
of our assets did not generate third-party or inter-entity revenue, with the
exception of the Delaware City Products Pipeline. Following the closing of the
Offering and the Acquisitions from PBF, our revenues were generated from
commercial agreements with PBF Energy.
Operating and Maintenance Expenses. Operating and maintenance expenses
decreased by approximately $1.8 million, or 9.4%, to approximately $17.1
million for the year ended December 31, 2015 compared to approximately $18.9
million for the year ended December 31, 2014. The decrease was primarily the
result of reduction in outside service expenses and utilities of approximately
$2.1 million due to throughput well below minimum volumes at the DCR West Rack
and DCR Rail Terminal, as well as, lower steam and nitrogen costs related to the
DCR West Rack. A portion of the decrease was also attributable to lower
operational support required at the Delaware City refinery assets. This decrease
was partially offset by an increase in insurance premiums of approximately $0.5
million. The expenses prior to the Offering and the Acquisitions from PBF were
incurred by PBF Energy and were allocated to us and our Predecessor based on the
nature of the expenses and our proportionate share of PBF Holding's employee
time and headcount. The allocation of employee costs was based on each
employee's compensation plus associated employee benefits. Employee benefits
include an allocation of PBF Holding's pension benefits and equity-based
compensation.
Depreciation and Amortization. Depreciation and amortization expense increased
by approximately $1.2 million, or 46.4%, to $3.9 million for the year
ended December 31, 2015 compared to $2.7 million for the year ended December 31,
2014. The increase in depreciation and amortization expense was primarily
attributable to approximately $1.0 million of additional depreciation associated
with the DCR West Rack assets which were placed in service in August 2014.

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Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
The following discussion of results for the year ended December 31, 2014
compared to the year ended December 31, 2013 reflects the combined results of
our Predecessor and PBFX. As such, the year ended December 31, 2013 includes the
historical results of our Predecessor. The year ended December 31, 2014 includes
the historical results of our Predecessor and of PBFX. The Partnership's future
results of operations may not be comparable to our Predecessor's historical
results of operations, as further discussed in "Factors Affecting Comparability
of our Financial Results."
Revenue. Prior to the Offering and the Acquisitions from PBF, our assets were a
part of the integrated operations of PBF Energy and the operation of our assets,
did not generate third-party or inter-entity revenue, with the exception of
Delaware City Products Pipeline. Prior to August 2013, the 
Delaware City
Products Pipeline had a contract with MSCG which generated revenue by charging
fees for transporting refined products. On completion of this contract,
inter-entity revenue from DCR was recognized. Following the closing of the
Offering and the Acquisitions from PBF, our revenues were generated from
commercial agreements with PBF Energy. Revenues increased by approximately $49.7
million or 583.7% as a result of these new commercial agreements with PBF
Energy.
Operating and Maintenance Expenses. Operating and maintenance expenses
increased by approximately $8.1 million, or 75.2%, to approximately $18.9
million for the year ended December 31, 2014 compared to approximately $10.8
million for the year ended December 31, 2013. The increase in operating and
maintenance expenses was primarily attributable to $5.2 million in outside
services and $1.8 million in materials and operating supplies associated with
the DCR West Rack assets which were placed in service in August 2014. In
addition, the cost of operating the Delaware City Pipeline and Truck Rack
increased by $0.4 million in 2014. The remaining increase was primarily
attributable to increased insurance premiums of approximately $0.7 million. The
expenses prior to the Offering and the Acquisitions from PBF were incurred by
PBF Energy and were allocated to us and our Predecessor based on the nature of
the expenses and our proportionate share of PBF Holding's employee time and
headcount. The allocation of employee costs was based on each employee's
compensation plus associated employee benefits. Employee benefits include an
allocation of PBF Holding's pension benefits and equity-based compensation.
Depreciation and Amortization. Depreciation and amortization expense increased
by approximately $1.0 million, or 54.9%, to $2.7 million for the year
ended December 31, 2014 compared to $1.7 million for the year ended December 31,
2013. The increase in depreciation and amortization expense was primarily
attributable to $0.6 million of additional depreciation associated with the DCR
West Rack assets which were placed in service in August 2014. The remaining
increase in depreciation and amortization was due to the DCR Rail Terminal being
in operation for the entire period in 2014, compared to only ten months of the
corresponding period in 2013.

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Storage Segment
The following table and discussion is an explanation of our results of
operations of the Storage segment for the years ended December 31,
2015, 2014 and 2013:
                                                    Year ended December 31,
                                         2015              2014 (a)               2013
                                                                              Predecessor
                                                         (In thousands)

Revenue:                           $        21,352     $         1,198     $              -
Affiliate                                        -                   -                    -
Third-party                                 21,352               1,198                    -
Total Revenue

Operating costs and expenses:
Operating and maintenance
expenses                                     8,178               7,359                6,644
Depreciation and amortization                2,639               1,779                1,332
Total costs and expenses                    10,817               9,138                7,976
Storage Segment Operating Income
(Loss)                             $        10,535     $        (7,940 )   

$ (7,976 )

VOLUMES

Storage capacity reserved (shell
capacity barrels)                          3,558.7             3,713.1                  N/A


____________

(a) The information presented includes the results of operations of the

storage assets of the Toledo Storage Facility for periods presented

through December 11, 2014 and of PBFX for the period beginning December

       12, 2014, the date PBFX commenced operations of the Toledo Storage
       Facility. Prior to the Toledo Storage Facility Acquisition, revenues were
       not recorded for storage.



Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Revenue. Revenue from affiliates increased approximately $20.2 million,
or 1,682.3%, to approximately  $21.4 million for the year ended December 31,
2015 compared to $1.2 million for the year ended December 31, 2014. The increase
in revenue from affiliates was attributed to the effects of the commercial
agreements associated with the Toledo Storage Facility Acquisition for a full
year in 2015. Prior to the Offering and the Acquisitions from PBF, our assets
were a part of the integrated operations of PBF Energy, and our Predecessor
generally recognized only the costs and did not record revenue associated with
the storage services provided to PBF Energy on an intercompany basis. Following
the closing of the Offering and the Acquisitions from PBF, our revenues were
generated from commercial agreements with PBF Energy.
Operating and Maintenance Expenses. Operating and maintenance expenses
increased by approximately $0.8 million, or 11.1%, to approximately $8.2
million for the year ended December 31, 2015 compared to approximately $7.4
million for the year ended December 31, 2014. The increase in operating and
maintenance expenses was primarily attributable to an increase of $3.1 million
in operational support expenses mainly attributed to a full year of operations
offset by a decrease of $2.5 million in maintenance labor and materials due to
higher costs in the prior year related to the 0.5 million barrel crude storage
tank which was placed into service in October 2014. The remaining increase was
primarily attributable to increased insurance premiums of approximately $0.2
million. The expenses recognized prior to the Offering and the Acquisitions from
PBF were incurred by PBF Energy and were allocated to our Predecessor based on
the nature of the expenses and our allocation of PBF Holding's

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employee time and headcount. The allocation of employee costs was based on each
employee's compensation plus associated employee benefits. Employee benefits
include our share of PBF Holding's pension benefits and stock-based
compensation.
Depreciation and Amortization. Depreciation and amortization expense increased
by approximately $0.9 million, or 48.3%, to approximately $2.6 million for the
year ended December 31, 2015 compared to approximately $1.8 million for the year
ended December 31, 2014. The increase in depreciation and amortization expense
was primarily attributable to an additional crude tank being placed in service
at the Toledo Storage Facility in October 2014.

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
The following discussion of results for the year ended December 31, 2014
compared to the year ended December 31, 2013 reflects the combined results of
our Predecessor and PBFX. As such, the year ended December 31, 2013 includes the
historical results of our Predecessor. The year ended December 31, 2014 includes
the historical results of our Predecessor and of PBFX. The Partnership's future
results of operations may not be comparable to our Predecessor's historical
results of operations, as further discussed in "Factors Affecting Comparability
of our Financial Results."
Revenue. Prior to the Offering and the Acquisitions from PBF, our assets were a
part of the integrated operations of PBF Energy, and our Predecessor generally
recognized only the costs and did not record revenue associated with the storage
services provided to PBF Energy on an intercompany basis. Following the closing
of the Offering and the Acquisitions from PBF, our revenues were generated from
commercial agreements with PBF Energy. Revenues increased by approximately $1.2
million or 100.0% for the year ended December 31, 2014 as a result of these new
commercial agreements with PBF Energy.
Operating and Maintenance Expenses. Operating and maintenance expenses
increased by approximately $0.7 million, or 10.8%, to approximately $7.4
million for the year ended December 31, 2014 compared to approximately $6.6
million for the year ended December 31, 2013. The increase in operating and
maintenance expenses was primarily attributable to $0.6 million in maintenance
labor and materials associated with the new 0.5 million barrel crude storage
tank which was placed into service in October 2014. The remaining increase was
primarily attributable to increased insurance premiums of approximately $0.1
million. The expenses prior to the Offering and the Acquisitions from PBF were
incurred by PBF Energy and were allocated to our Predecessor based on the nature
of the expenses and our allocation of PBF Holding's employee time and headcount.
The allocation of employee costs was based on each employee's compensation plus
associated employee benefits. Employee benefits include our share of PBF
Holding's pension benefits and stock-based compensation.
Depreciation and Amortization. Depreciation and amortization expense increased
by approximately $0.4 million, or 33.6%, to approximately $1.8 million for the
year ended December 31, 2014 compared to approximately $1.3 million for the year
ended December 31, 2013. The increase in depreciation and amortization expense
was primarily attributable to $0.3 million of additional depreciation associated
with the new crude tank which was placed into service in October 2014.

Liquidity and Capital Resources
Historically, our sources of liquidity primarily consisted of funding from PBF
Energy. Our cash receipts were deposited in PBF Energy's bank accounts and all
cash disbursements were made from these accounts. Thus, historically our
Predecessor's financial statements have reflected minimal or no cash balances.
Following the Offering, we have separate bank accounts, but PBF Energy provides
treasury services on the general partner's behalf under our Third A&R Omnibus
Agreement. Following completion of the Offering and the Acquisitions from PBF,
PBF Energy retained the working capital of our Predecessor, as these balances
represented assets and liabilities related to our Predecessor's assets prior to
the closing of the Offering and the Acquisitions from PBF.

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We received proceeds (after deducting underwriting discounts and structuring
fees but before offering expenses) from the Offering of approximately $341.0
million. We used the net proceeds from the Offering (i) to distribute
approximately $35.0 million to PBF LLC to reimburse it for certain capital
expenditures incurred prior to the closing of the Offering with respect to
assets contributed to us and to reimburse us for offering expenses it incurred
on behalf of the Partnership; (ii) to pay debt issuance costs of approximately
$2.3 million related to our Revolving Credit Facility and Term Loan; (iii) to
purchase $298.7 million in 
U.S.
 Treasury securities which are being used as
collateral to secure our obligations under the Term Loan and which have been,
and will continue to be, used by us in the future to fund anticipated capital
expenditures; and (iv) to retain approximately $5.0 million for general
partnership purposes. We also borrowed $298.7 million at the closing of the
Offering under the Term Loan and distributed the proceeds of such borrowings to
PBF LLC.
In connection with the DCR West Rack and Toledo Storage Facility Acquisitions,
the Partnership acquired assets for total consideration paid to PBF LLC of
$300.0 million, consisting of $270.0 million of cash and $30.0 million of
Partnership common units, or an aggregate 1,210,471 common units. The cash
consideration was funded by proceeds from the sale of $60.0 million in
marketable securities and $210.0 million in borrowings under the Revolving
Credit Facility. We borrowed an additional $60.0 million under the Revolving
Credit Facility to repay $60.0 million outstanding under the Term Loan in order
to release the $60.0 million in marketable securities that had collateralized
the Term Loan.

In connection with the Delaware City Products Pipeline and Truck Rack
Acquisition, the Partnership acquired assets for total consideration of $143.0
million, consisting of $112.5 million of cash and $30.5 million of Partnership
common units, or 1,288,420 common units. The cash consideration was funded by
the Partnership with $88.0 million in proceeds from the Partnership's 2023
Notes, sale of approximately $0.7 million in marketable securities and $23.8
million in borrowings under the Partnership's Revolving Credit Facility. The
Partnership borrowed an additional $0.7 million under its Revolving Credit
Facility to repay $0.7 million outstanding under the Term Loan in order to
release the $0.7 million in marketable securities that had collateralized the
Term Loan. At December 31, 2015, we had $24.5 million of borrowings and $2.0
million of letters of credit outstanding under the Revolving Credit Facility,
$234.2 million outstanding under the Term Loan and $350.0 million of outstanding
2023 Notes.
In addition to the retention of proceeds from our commercial and service
agreements with PBF Holding, we expect our ongoing sources of liquidity to
include cash generated from operations, the liquidation of 
U.S.
 Treasury and
other investment grade securities that are pledged under our Term Loan,
borrowings under our Revolving Credit Facility, and the issuance of additional
debt and equity securities as appropriate given market conditions. We have sold,
and intend to continue to sell, our 
U.S.
 Treasury or other investment grade
securities over time to fund our capital expenditures. Immediately prior to
selling such securities, we expect to continue to repay an equal amount of
borrowings under our Term Loan with borrowings under our Revolving Credit
Facility. As a result, our 
U.S.
 Treasury and other investment grade securities,
coupled with the availability under our Revolving Credit Facility, initially
provide us with the ability to fund capital expenditures without increasing the
net amount of our outstanding borrowings. We expect that these sources of funds
will be adequate to provide for our short-term and long-term liquidity needs.
The recently announced Plains Asset Purchase is expected to be financed through
a combination of cash on hand, borrowings from the our Revolving Credit Facility
and issuance of equity, which may include common units sold to our indirect
parent, PBF Energy. Our ability to meet our debt service obligations and other
capital requirements, including capital expenditures and distributions on our
units, as well as make future acquisitions, will depend on our future operating
performance which, in turn, will be subject to general economic, financial,
business, competitive, legislative, regulatory and other conditions, many of
which are beyond our control. As a normal part of our business, depending on
market conditions, we will from time to time consider opportunities to repay,
redeem, repurchase or refinance our indebtedness.
We have paid, and intend to pay at least the minimum quarterly distribution of
$0.30 per unit per quarter, or $1.20 per unit on an annualized basis, which
aggregates to $10.4 million per quarter and $41.6 million per year based on the
number of common and subordinated units outstanding as of December 31, 2015.

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Credit Facilities
Concurrent with the closing of the Offering, we entered into the Revolving
Credit Facility and the Term Loan, each with Wells Fargo Bank, National
Association, as administrative agent, and a syndicate of lenders.
The Revolving Credit Facility is available to fund working capital,
acquisitions, distributions and capital expenditures and for other general
partnership purposes. The maximum amount of the Revolving Credit Facility was
increased from $275.0 million to $325.0 million in December 2014. We can
increase the maximum amount of the Revolving Credit Facility by an additional
$275.0 million, to a total facility size of $600.0 million, subject to receiving
increased commitments from lenders or other financial institutions and
satisfaction of certain conditions. The Revolving Credit Facility includes a
$25.0 million sublimit for standby letters of credit and a $25.0 million
sublimit for swingline loans. Obligations under the credit facility and certain
cash management and hedging obligations designated by us are guaranteed by our
restricted subsidiaries, and are secured by a first priority lien on our assets
(including our equity interests in Delaware City Terminaling) and those of our
restricted subsidiaries (other than excluded assets and a guaranty of collection
from PBF LLC). The maturity date of the Revolving Credit Facility may be
extended for one year on up to two occasions, subject to certain customary terms
and conditions. Borrowings under the Revolving Credit Facility bear interest at
either a Base Rate (as defined in the Revolving Credit Facility) plus an
applicable margin ranging from 0.75% to 1.75%, or at LIBOR plus an applicable
margin ranging from 1.75% to 2.75%. The applicable margin will vary based upon
our Consolidated Total Leverage Ratio (as defined in the Revolving Credit
Facility).
The Term Loan is guaranteed by a guaranty of collection from PBF LLC and is
secured at all times by cash, 
U.S.
 Treasury or other investment grade securities
in an amount equal to or greater than the outstanding principal amount of the
Term Loan. Borrowings under the Term Loan bear interest either at Base Rate (as
defined in the Term Loan), or at LIBOR plus an applicable margin equal to 0.25%.
The Revolving Credit Facility contains affirmative and negative covenants
customary for revolving credit facilities of this nature which, among other
things, limit or restrict the Partnership's ability and the ability of its
restricted subsidiaries to incur or guarantee debt, incur liens, make
investments, make restricted payments, amend material contracts, engage in
business activities, engage in mergers, consolidations and other organizational
changes, sell, transfer or otherwise dispose of assets or enter into burdensome
agreements or enter into transactions with affiliates on terms which are not
arm's length. The Term Loan contains affirmative and negative covenants
customary for term loans of this nature which, among other things, limit the
Partnership's use of the proceeds and restrict the Partnership's ability to
incur liens and enter into burdensome agreements.
Additionally, under the terms of the Revolving Credit Facility, the Partnership
is required to maintain the following financial ratios, each tested on a
quarterly basis for the immediately preceding four quarter period then ended (or
such shorter period as shall apply, the "Measurement Period"): (a) until such
time as the Partnership obtains an investment grade credit rating, Consolidated
Interest Coverage Ratio (as defined in the Revolving Credit Facility), of at
least 2.50 to 1.00; (b) the Consolidated Total Leverage Ratio of not greater
than 4.00 to 1.00 (or 4.50 to 1.00 at any time after (i) the Partnership has
issued at least $100.0 million of unsecured notes, and (ii) in addition to
clause (i), upon consummation of a material permitted acquisition (as defined in
the Revolving Credit Facility) and for two-hundred seventy days immediately
thereafter (an "Increase Period"), if elected by the Partnership by written
notice to the administrative agent given on or prior to the date of such
acquisition, the maximum permitted Consolidated Total Leverage Ratio shall be
increased by 0.50 above the otherwise relevant level (the "Step-Up"), provided
that Increase Periods may not be successive unless the ratio has been complied
with for at least one Measurement Period ending after such Increase Period
(i.e., without giving effect to the Step-Up)); and (c) after the Partnership has
issued at least $100.0 million of unsecured notes, the Consolidated Senior
Secured Leverage Ratio (as defined in the Revolving Credit Facility) of not
greater than 3.50 to 1.00. The Revolving Credit Facility generally prohibits the
Partnership from making cash distributions (subject to certain exceptions)
except for so long as no default or event of default exists or would be caused
thereby, and only to the extent permitted by our partnership agreement, the
Partnership may make cash distributions to unitholders up to the amount of the
Partnership's Available Cash (as defined in our partnership agreement). We are
in compliance with our debt covenants as of December 31, 2015.

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The Revolving Credit Facility and Term Loan contain events of default customary
for transactions of their nature, including, but not limited to (and subject to
grace periods), the failure to pay any principal, interest or fees when due,
failure to perform or observe any covenant contained in the Revolving Credit
Facility or related documentation, any representation or warranty made in the
agreements or related documentation being untrue in any material respect when
made, default under certain material debt agreements, commencement of bankruptcy
or other insolvency proceedings, certain changes in the Partnership's ownership
or the ownership or board composition of our general partner and material
judgments or orders. Upon the occurrence and during the continuation of an event
of default under the agreements, the lenders may, among other things, terminate
their commitments, declare any outstanding loans to be immediately due and
payable and/or exercise remedies against the Partnership and the collateral as
may be available to the lenders under the agreements and related documentation
or applicable law.

Senior Notes

On May 12, 2015, PBFX and its wholly-owned subsidiary, PBF Logistics Finance
Corporation, a 
Delaware
 corporation ("PBF Finance," and together with the
Partnership, the "Issuers") issued $350.0 million aggregate principal amount of
our 6.875% 2023 Notes. The initial purchasers in the offering purchased $330.1
million aggregate principal amount of our 2023 Notes and certain of PBF Energy's
officers and directors and their affiliates and family members purchased the
remaining $19.9 million aggregate principal amount of our 2023 Notes. We used
the net proceeds of approximately $343.0 million from the offering, after
deducting the initial purchasers' discount and offering expenses, to pay $88.0
million of the cash consideration due in connection with the 
Delaware City
Products Pipeline and Truck Rack Acquisition and to repay $255.0 million of
outstanding indebtedness under our Revolving Credit Facility.
The 2023 Notes are guaranteed on a senior unsecured basis by substantially all
of PBFX's wholly-owned subsidiaries. In addition, PBF LLC provides a limited
guarantee of collection of the principal amount of the 2023 Notes, but is not
otherwise subject to the covenants of the Indenture. PBFX has the optional
redemption rights to repurchase all or a portion of the 2023 Notes at varying
prices no less than 100% of the principal amounts of the notes plus accrued and
unpaid interest. The holders of the 2023 Notes have repurchase options
exercisable only upon a change in control, certain asset sale transactions, or
in event of a default as defined in the indenture agreement. In addition, the
2023 Notes contain covenant restrictions limiting certain types of investments,
incur additional debt or preferred equity issuances, create liens, make certain
payments, sell assets, merge or consolidate with other entities, and enter into
transactions with affiliates. PBFX is in compliance with the covenants as of
December 31, 2015.

Cash Flows
The following table sets forth our cash flows for the periods indicated:
                                                     Year Ended December 31,
                                           2015               2014                2013
                                                         (In thousands)
Net cash provided by (used in)
operating activities                 $       78,546     $        12,887     $      (10,697 )
Net cash used in investing
activities                                   (1,349 )          (282,734 )          (47,192 )
Net cash (used in) provided by
financing activities                        (72,684 )           283,937             57,940
Net change in cash and cash
equivalents                          $        4,513     $        14,090     $           51


Cash Flows from Operating Activities
Cash flows provided by operating activities increased $65.7 million to
approximately $78.5 million for the year ended December 31, 2015 compared to
approximately $12.9 million for the year ended December 31, 2014.

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The increase in net cash provided by operating activities was primarily the
result of net income of approximately $75.1 million recognized during the year
ended December 31, 2015, compared to approximately $17.8 million for the year
ended December 31, 2014. Our operating cash flows for the year ended
December 31, 2015 also included non-cash charges relating to depreciation and
amortization of $6.6 million, amortization of loan fees of $1.3 million and
unit-based compensation of $4.3 million, partially offset by net changes in
working capital of $8.8 million primarily driven by the timing of collection of
accounts receivables and payments of liabilities. Our operating cash flows for
the year ended December 31, 2014 also included non-cash charges relating to
depreciation and amortization of $4.5 million, amortization of loan fees of $0.4
million and unit-based compensation of $1.1 million, partially offset by net
change in working capital of $10.9 million primarily driven by the timing of
collection of accounts receivables.
Cash flows provided by operating activities increased $23.6 million to
approximately $12.9 million for the year ended December 31, 2014 compared to net
cash used in operating activities of approximately $10.7 million for the year
ended December 31, 2013. The increase in net cash provided by operating
activities was primarily the result of net income of approximately $17.8 million
recognized during the year ended December 31, 2014, compared to a net loss of
approximately $14.4 million for the year ended December 31, 2013. Our operating
cash flows for the year ended December 31, 2014 also included non-cash charges
relating to depreciation and amortization of $4.5 million, amortization of loan
fees of $0.4 million and unit-based compensation of $1.1 million, partially
offset by net changes in working capital of $10.9 million primarily driven by
the timing of collection of accounts receivables. Our operating cash flows for
the year ended December 31, 2013 included non-cash charges relating to
depreciation and amortization of $3.1 million and net changes in working capital
of $0.6 million.
Cash Flows from Investing Activities
Cash flows used in investing activities decreased approximately $281.4 million
to approximately $1.3 million for the year ended December 31, 2015 compared to
approximately $282.7 million for the year ended December 31, 2014. The decrease
in net cash used in investing activities was a result of the decrease in capital
expenditures of $45.8 million and net purchases of marketable securities of
234.9 million for the year ended December 31, 2015, offset by the net sale of
approximately $0.7 million in marketable securities.
Cash flows used in investing activities increased approximately $235.5 million
to approximately $282.7 million for the year ended December 31, 2014 compared to
approximately $47.2 million for the year ended December 31, 2013. The increase
in net cash used in investing activities was a result of the net purchase of
approximately $234.9 million in marketable securities and an increase in capital
expenditures of $0.6 million for the year ended December 31, 2014.
Cash Flows from Financing Activities
Cash flows used in financing activities changed by approximately $356.6 million
to approximately $72.7 million for the year ended December 31, 2015 compared to
cash flows provided by financing activities of approximately $283.9 million for
the year ended December 31, 2014. Our cash flows used in financing activities
for the year ended December 31, 2015, consisted of net repayment of our
Revolving Credit Facility of approximately $250.6 million, a distribution to PBF
LLC related to the Delaware City Products Pipeline and Truck Rack Acquisition of
approximately $112.5 million, distributions to unitholders of approximately
$49.5 million, a distribution to parent of approximately $1.0 million related to
the pre-acquisition activity of the Delaware City Products Pipeline and Truck
Rack, net repayment of our Term Loan of approximately $0.7 million, and deferred
financing costs of approximately $8.3 million, partially offset by the proceeds
from the issuance of the 2023 Notes of $350.0 million. Cash flows provided by
financing activities for the year ended December 31, 2014 consisted of the net
proceeds from the issuance of common units in the Offering of $341.0 million,
net proceeds from the Term Loan of $234.9 million, proceeds from the Revolving
Credit Facility of $275.1 million and contributions from PBF LLC of $54.1
million, partially offset by distributions to PBF LLC of $598.7 million,
distributions to unitholders of $14.9 million, offering costs of $5.0 million
and deferred financing costs of $2.5 million.

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Cash flows provided by financing activities increased approximately $226.0
million to approximately $283.9 million for the year ended December 31, 2014
compared to approximately $57.9 million for the year ended December 31, 2013.
Cash flows provided by financing activities for the year ended December 31, 2014
consisted of the net proceeds from the issuance of common units in the Offering
of $341.0 million, net proceeds from the Term Loan of $234.9 million, proceeds
from the Revolving Credit Facility of $275.1 million and contributions from PBF
LLC of $54.1 million, partially offset by distributions to PBF LLC of $598.7
million, distributions to unitholders of $14.9 million, offering costs of $5.0
million and deferred financing costs of $2.5 million. Our cash flows provided by
financing activities for the year ended December 31, 2013, were comprised
entirely of contributions by PBF Energy and were primarily used to fund capital
expenditures and operating costs.

Capital Expenditures
Our capital requirements have consisted of and are expected to continue to
consist of maintenance capital expenditures and expansion capital expenditures.
Maintenance capital expenditures are cash expenditures (including expenditures
for the addition or improvement to, or the replacement of, our capital assets,
and for the acquisition of existing, or the construction or development of new,
capital assets) made to maintain our long-term operating income or operating
capacity. Examples of maintenance capital expenditures are expenditures for the
refurbishment and replacement of terminals, to maintain equipment reliability,
integrity and safety and to address environmental laws and regulations.
Expansion capital expenditures are cash expenditures incurred for acquisitions
or capital improvements that we expect will increase our operating income or
operating capacity over the long term. Examples of expansion capital
expenditures include the acquisition of equipment and the construction,
development or acquisition of unloading equipment or other equipment at our
facilities or additional throughput capacity to the extent such capital
expenditures are expected to expand our operating capacity or our operating
income.
Capital expenditures for the year ended December 31, 2015 were $2.0 million,
including $0.2 million for the maintenance of the Delaware City Products
Pipeline and $1.8 million for the Toledo Storage Facility. For the year ended
December 31, 2014 capital expenditures were $47.8 million, including $22.0
million for the expansion of the DCR West Rack, $18.0 million for the 
Toledo
Storage Facility, $0.6 million for the Delaware City Products Pipeline and $7.2
million for the IPO Assets. For the year ended December 31, 2013, our
Predecessor incurred a total of $47.2 million for expansion capital expenditures
including $19.2 million for the Toledo Storage Facility, $15.4 million for the
DCR West Rack, $0.9 million for the Delaware City Products Pipeline and Truck
Rack and $11.7 million for the IPO Assets. Our Predecessor's capital funding
requirements were funded by capital contributions from PBF Energy. We currently
have not included any potential future acquisitions in our budgeted capital
expenditures for the twelve months ending December 31, 2015.
We currently expect to spend an aggregate of approximately between $5.0 to $6.0
million during 2016 for maintenance capital expenditures. We anticipate the
forecasted maintenance capital expenditures will be funded primarily with cash
from operations and through the liquidation of marketable securities.
We have sold, and expect to continue to sell, our 
U.S.
 Treasury or other
investment grade securities currently used to secure our obligations under the
Term Loan over time to fund our capital expenditures, and immediately prior to
selling such securities, we expect to continue to repay an equal amount of Term
Loan borrowings with borrowings under our Revolving Credit Facility. We may also
rely on external sources including other borrowings under our Revolving Credit
Facility, and issuances of equity and debt securities to fund any significant
future expansion. During the year ended December 31, 2015, we borrowed $24.5
million under the Revolving Credit Facility to pay the remaining portion of the
cash consideration and related transaction costs in connection with the Delaware
City Products Pipeline and Truck Rack Acquisition and to repay $0.7 million of
our Term Loan in order to release the $0.7 million in marketable securities to
fund a portion of the acquisition.
Under the Third A&R Omnibus Agreement, PBF Energy has agreed to reimburse us for
any costs up to $20.0 million per event (net of any insurance recoveries) that
we incur for repairs required due to the failure of any Contributed Asset to
operate in substantially the same manner and condition as such asset was
operating prior to

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the closing of the Offering and closing date of the Acquisitions from PBF during
the first five years after the closing of the Offering, and any matters related
thereto.
On February 2, 2016, we announced that our wholly-owned subsidiary, PBF
Logistics Products Terminals LLC, entered into an agreement to purchase the East
Coast Terminals from an affiliate of Plains All American Pipeline, L.P. for
total cash consideration of $100.0 million. The acquisition is expected to be
financed through a combination of cash on hand, borrowings from our Revolving
Credit Facility and issuance of equity, which may include common units sold to
PBF Energy. In conjunction with the transaction, we expect to invest
approximately $5.0 million, from cash on hand, to improve infrastructure in
order to increase throughput capability at the East Coast Terminals.

Contractual Obligations
Information regarding our contractual obligations of the types described below
as of December 31, 2015, is set forth in the following table:
                                                          Payments Due by Period
                                                                                                    2021 and
                               Totals          2016         2017 and 2018       2019 and 2020        Beyond
                                                              (In thousands)

Long term debt obligation
(1)                         $  608,700     $        -     $       234,200     $        24,500     $   350,000
Interest (2)                   188,917         27,245              52,587              48,929          60,156
Affiliate - services
agreements (3)                  88,692          9,336              18,672              18,672          42,012
Total obligations           $  886,309     $   36,581     $       305,459     $        92,101     $   452,168


____________________
(1) No principal amounts are due under our Term Loan, Revolving Credit Facility
and 2023 Notes until May 2017.
(2) Includes interest on our Term Loan, Revolving Credit Facility and 2023 Notes
based on outstanding indebtedness as of December 31, 2015. Includes commitment
fees on the Revolving Credit Facility through May 2019 using rates in effect at
December 31, 2015.
(3) Includes annual fixed payments under the Third A&R Omnibus Agreement and the
Third A&R Services Agreement, as well as an estimate of $2.5 million annually of
obligations under the Third A&R Omnibus Agreement to reimburse PBF LLC for
salaries and benefit costs of employees who devote more than 50% of their time
to PBFX. Obligations under these agreements are expected to continue through the
terms of our existing commercial agreements.

Effects of Inflation
Inflation in 
the United States
 has been relatively low in recent years and did
not have a material impact on our results of operations for the year ended
December 31, 2015 and 2014, respectively.

Off-Balance Sheet Arrangements

We have not entered into any transactions, agreements or other contractual arrangements that would result in off-balance sheet liabilities, other than outstanding letters of credit in the amount of approximately $2.0 million.

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Environmental and Other Matters
Environmental Regulation

Our operations are subject to extensive and frequently changing federal, state
and local laws, regulations and ordinances relating to the protection of the
environment. Among other things, these laws and regulations govern the emission
or discharge of pollutants into or onto the land, air and water, the handling
and disposal of solid and hazardous wastes and the remediation of contamination.
As with the industry generally, compliance with existing and anticipated
environmental laws and regulations increases our overall cost of business,
including our capital costs to develop, maintain, operate and upgrade equipment
and facilities. While these laws and regulations affect our maintenance capital
expenditures and net income, we believe they do not affect our competitive
position, as the operations of our competitors are similarly affected. We
believe our facilities are in substantial compliance with applicable
environmental laws and regulations. However, these laws and regulations are
subject to changes, or to changes in the interpretation of such laws and
regulations, by regulatory authorities, and continued and future compliance with
such laws and regulations may require us to incur significant expenditures.
Additionally, violation of environmental laws, regulations and permits can
result in the imposition of significant administrative, civil and criminal
penalties, injunctions limiting our operations, investigatory or remedial
liabilities or construction bans or delays in the development of additional
facilities or equipment. Furthermore, a release of hydrocarbons or hazardous
substances into the environment could, to the extent the event is not insured,
subject us to substantial expenses, including costs to comply with applicable
laws and regulations and to resolve claims by third parties for personal injury
or property damage, or by the 
U.S.
 federal government or state governments for
natural resources damages. These impacts could directly and indirectly affect
our business and have an adverse impact on our financial position, results of
operations and liquidity. We cannot currently determine the amounts of such
future impacts.
Environmental Liabilities

Contamination resulting from spills of crude oil or petroleum products are not
unusual within the petroleum terminaling or transportation industries. Historic
spills at truck and rail racks, and terminals as a result of past operations
have resulted in contamination of the environment, including soils and
groundwater.

Pursuant to the Contribution Agreements entered into in connection with the
Offering and the Acquisitions from PBF, PBF Energy has agreed to indemnify us
for certain known and unknown environmental liabilities that are based on
conditions in existence at our Predecessor's properties and associated with the
ownership or operation of the Contributed Assets and arising from the conditions
that existed prior to the closings of the Offering and the Acquisitions from
PBF. In addition, we have agreed to indemnify PBF Energy for certain events and
conditions associated with the ownership or operation of our assets that occur
after the closings of the Offering and the Acquisitions from PBF, and for
environmental liabilities related to our assets to the extent PBF Energy is not
required to indemnify us for such liabilities or if the environmental liability
is the result of the negligence, willful misconduct or criminal conduct of PBF
Energy or its employees, including those seconded to us. As a result, we may
incur the type of expenses described above in the future, which may be
substantial.

Critical Accounting Policies and Estimates
Our significant accounting policies are described in Note 2-Summary of
Accounting Policies to our Consolidated Financial Statements included in "Item
8. Financial Statements and Supplementary Data." We prepare our consolidated
financial statements in conformity with GAAP, and in the process of applying
these principles, we must make judgments, assumptions and estimates based on the
best available information at the time. To aid a reader's understanding,
management has identified our critical accounting policies. These policies are
considered critical because they are both most important to the portrayal of our
financial condition and results, and require our most difficult, subjective or
complex judgments. Often they require judgments and estimation about matters
which are inherently uncertain and involve measuring, at a specific point in
time, events which are continuous in nature. Actual results may differ based on
the accuracy of the information utilized and subsequent events, some of which we
may have little or no control over.

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Depreciation

We calculate depreciation expense using the straight-line method over the
estimated useful lives of our property, plant and equipment. Because of the
expected long useful lives of the property and equipment, we depreciate our
property, plant and equipment over 5-25 years. Changes in the estimated useful
lives of the property and equipment could have a material adverse effect on our
results of operations.
Long-Lived Assets
We review our long-lived assets for impairment whenever events or changes in
circumstances indicate their carrying value may not be recoverable. Impairment
is evaluated by comparing the carrying value of the long-lived assets to the
estimated undiscounted future cash flows expected to result from the use of the
assets and their ultimate disposition. If such analysis indicates that the
carrying value of the long-lived assets is not considered to be recoverable, the
carrying value is reduced to the fair value.
Impairment assessments inherently involve judgment as to assumptions about
expected future cash flows and the impact of market conditions on those
assumptions. Although management would utilize assumptions that it believes are
reasonable, future events and changing market conditions may impact management's
assumptions, which could produce different results. No impairment of long-lived
assets were recorded in the periods included in these financial statements.
Asset Retirement Obligations
We record an asset retirement obligation at fair value for the estimated cost to
retire a tangible long-lived asset at the time we incur the liability, which is
generally when the asset is purchased, constructed, or leased. We record the
liability when we have a legal or contractual obligation to incur costs to
retire the asset and when a reasonable estimate of the fair value of the
liability can be made. If a reasonable estimate cannot be made at the time the
liability is incurred, we will record the liability when sufficient information
is available to estimate the liability's fair value. Certain of our asset
retirement obligations are based on our legal obligation to perform remedial
activity when we permanently cease operations of the long-lived assets. We
therefore consider the settlement date of these obligations to be
indeterminable. Accordingly, we cannot calculate an associated asset retirement
liability for these obligations at this time. We will measure and recognize the
fair value of these asset retirement obligations when the settlement date is
determinable.
Environmental Matters
Liabilities for future remediation costs are recorded when environmental
assessments and/or remediation efforts are probable and the costs can be
reasonably estimated. Other than for assessments, the timing and magnitude of
these accruals generally are based on the completion of investigations or other
studies or a commitment to a formal plan of action. Environmental liabilities
are based on best estimates of probable future costs using currently available
technology and applying current regulations, as well as our own internal
environmental policies. The actual settlement of our liability for environmental
matters could materially differ from our estimates due to a number of
uncertainties such as the extent of contamination, changes in environmental laws
and regulations, potential improvements in remediation technologies and the
participation of other responsible parties.

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Source: Equities.com News (February 21, 2016 - 8:10 PM EST)

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