Colin Murray - Investor Relations Matthew Lucey - Executive Vice President Erik Young - Chief Financial Officer.

Justin Jenkins - Raymond James Ryan Levine - Citigroup.

Welcome to the PBF Logistics’ Fourth Quarter and Full-Year 2017 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions, following the management’s prepared remarks. Please note, today’s conference maybe recorded.

[Operator Instructions] It is now my pleasure to turn the floor over to Colin Murray of Investor Relations. Sir, you may begin..

Thank you, Erica. Good morning, and welcome to today’s call. With me today are Matt Lucey, our Executive Vice President; Erik Young, our CFO and several other members of the Partnership's senior management team. If you’d like a copy of our earnings release, it is available on our website.

Before we begin, I'd like to direct your attention to the forward-looking statement disclaimer contained in today’s press release.

In summary, it outlines that statements in the press release and on this conference call that state the Partnership’s or management’s expectations or predictions of the future, are forward-looking statements intended to be covered by the Safe Harbor provisions under federal securities laws.

There are many factors that could cause actual results to differ from our expectations, including those we’ve described in our filings with the SEC. Additionally, as noted in our press release, we will be using certain non-GAAP measures while describing the Partnership’s operating performance and financial results.

For reconciliations of non-GAAP measures to the appropriate GAAP figure, please refer to the supplemental tables provided in today's press release. Now, I’ll turn the call over to Matt Lucey..

Thank you, Colin. Good morning, everyone, and thanks for joining the call. Our fourth quarter results capped a solid 2017 for PBFX. We increased our annual EBITDA by $15 million or 10% and we increased our distributions by $0.14 per unit on an annualize basis. We grew through our mix of organic projects and third-party acquisitions.

And just as an aside, since going public in 2014 almost four years ago over 30% of our growth has come from just that, from projects that we’ve developed and third-party acquisitions.

We’ve delivered the growth through this year, while maintaining high distribution coverage, full-year coverage of 1.34 times and kept that to EBITDA comfortably below 4 times. As we look forward, we are quite pleased with the prospects for PBFX to continue to deliver growth to its unitholders.

As well as in today's press release, we have developed a pipeline of organic projects what we are comfortable and confident, we can deliver over $100 million of EBITDA over the next four years.

Consistent with our comments over the last year, the team has been focused on developing organic projects along with our refining company sponsor that prospectively add value to both companies.

We have identified a number of opportunities related to crude sourcing and product disposition that will allow the Partnership to capture more PBF secondary costs as revenue. We fully expected this organic growth pipeline will be supplemented by third-party transactions as well as additional dropdowns from PBF.

We expect these projects to create EBITDA at an average multiple under 7 times, which should result in high returns and attractive accretion for the Partnership. Going forward, we expect to continue to deliver distribution growth in the low-to-mid single-digit range consistent with the distribution increase we announced today.

This distribution strategy will enable the Partnership to increase coverage and will reduce our reliance on external funding for organic projects. And with that, I’ll turn over to Erik, who will go through the financials..

Thank you, Matt. This morning we reported fourth quarter net income attributable to the Partners of $23.6 million or $0.50 per common unit net of IDRs and Partnership EBITDA of approximately $39.2 million.

Our fourth quarter results include incremental interest expenses associated with the successful October senior note tack-on of $175 million as well as depreciation associated with the organic projects we placed in service during the second half of 2017. In aggregate, these figures represent approximately $3.5 million or roughly $0.09 per common unit.

Please note that our Q4, 2017 depreciation and interest expense items are indicative of our quarterly run rate in 2018. Revenue for the quarter increased to $66.5 million and we generated $28.5 million of cash available for distribution, which represents a quarterly coverage ratio of approximately 1.22 times.

Total expenses for the fourth quarter increased to $29.8 million including operating and maintenance expenses, G&A, and depreciation and amortization. Interest expense and financing cost totaled approximately $9.7 million. Of note, operating expenses increased our East Coast Rail facilities as a result of higher utilization.

Given the favorable WCS Brent crude differentials, we expect that PBF Energy will continue to import heavy Canadian crudes at levels higher than we have experienced in the last two years.

As we have mentioned in the past, while revenue is tied directly to MVCs, variable operating studies have been a function of throughput volumes and we expect higher operating expenses in conjunction with improved asset utilization.

During the quarter, we spent approximately $18.1 million in CapEx which includes $16 million for our organic projects and $2.1 million for maintenance CapEx. For the full-year, we incurred $113 million for CapEx and acquisitions.

We ended the quarter with approximately $346.4 million in liquidity including $19.7 million of cash and approximately $326.7 million of availability under our revolving credit facility. As a result, our net debt to EBITDA ratio was approximately 3.4 times on an annualized basis.

These figures include the proceeds of our upsized $175 million notes offering completed in October 2017. We're pleased to announce our 13th consecutive distribution increase to $48.50 per unit per quarter. This represents a 62% increase to our minimum quarterly distribution and a compound annual growth rate of approximately 15% since our IPO.

Operator, we've concluded our remarks, and now we’ll open the call for questions..

Thank you. At this time, the floor is open for questions. [Operator Instructions] And your first question comes from Justin Jenkins from Raymond James. Please go ahead..

Great, thanks. Good morning, guys. I guess maybe starting on the growth front. It’s great to see the organic initiatives and targets announced.

Can you give us a sense maybe of the pacing of how you could see that $100 million plus of EBITDA playing out over the next few years?.

Well, we said it's over the next four years, nothing will be perfectly ratable. I do expect this year that you would begin to hear announcements of specific projects. So it's not back-end loaded. It's not front-end loaded. It won't be perfectly ratable, but it will come in over the next four years. So other than that, I don't there is much to say..

Fair enough.

And then maybe a sense of the CapEx for those types’ projects similar to midstream types occurring to the targeted in the past?.

I'm sorry, say that again..

The CapEx maybe for those organic growth projects, thinking about the recurring levels?.

Yes, I mean in terms of where the projects will come in and how much of cost we say in the prepared remarks. We expect it to be under seven times. And that's why part of the reason we've been so focused on. When you look at the landscape of making acquisitions – for acquisitions quite frankly it’s very competitive and it drives our asset values.

It’s nice about developing projects internally as you're able to do it at a much more economic way and so if you're under seven times, it works out bit better for all involved, in terms of scale, in terms of this four projects.

Now, I would say it’s a larger grouping of opportunity, so in our $10 million – $100 million of EBITDA, a dozen projects, but that will be as we develop and will be able to announce them and they'll be in varying sizes, but one doesn't dominate in regards to size..

Perfect, now it’s a great detail there.

And then Erik you mentioned in the prepared remarks on higher utilization of the rail assets is 4Q may be a good run rate for the OpEx or do we expect it to take higher given the lag of getting more volumes through?.

I may take up. I think our guidance for kind of the full-year in 2018 is about $86.5 million for OpEx. You still you know pretty good about that.

Again it's not exact in terms of ratable every quarter, but if you assume kind of let's say $20 million to $22 million a quarter is probably a decent number assuming that the rails are running at the rates that we currently envision..

Understood. Thanks. And then last one for me on shell, Matt. I think Tom mentioned on PBF Energy call that the refining companies already seeing some of the benefits.

Can we talk about maybe the financial contribution at the PBFX level?.

Yes, I think the tank has been a great investment, thus far we still are very comfortable with kind of our call it $4 million roughly of EBITDA coming from that tank. Again the way we've structured PBF Logistics is there shouldn't be a ton of variability in earnings. There's not going to be really any downside, we've protected that.

At the same time, we're not going to see huge upside on any of these assets. So there may be some times where that number can take up $0.50 million and $1 million in total contribution, but if you assume roughly $4 million for the time you should be in good shape..

And what the tank is representative of how we’re focus on these projects. We talked about on the PBF call, the benefits that PBF was getting from it. So it really is speaks to the strength of developing these projects, when we can grow that by in both companies and makes them much more resilient..

Perfect, appreciate the color guys. I’ll leave it there and congrats on the announcements today..

Thank you..

Thank you. [Operator Instructions] We’ll go next to the line of Ryan Levine from Citi. Please go ahead..

Good morning. Regarding the $100 million gross EBITDA announcement, where in the approval processes are for those individual, I think you mentioned the dozen projects and what gave you confidence to come out with the support of your plan today.

Given the state of the approval process?.

Well, I think first of all it's not a static list that will simply be carried out over the next four years. I think over the last – if you want to be fair about 18 months, we've been focused on building out this function internally and quite frankly executing.

Last year, we brought the Paulsboro Natural Gas Pipeline, which really brought a more secure source of natural gas and cheaper source of natural gas for Paulsboro refinery. We had the crude tank and those were two projects that we are set to announce and execute on. They were not the only two projects that we are working on.

So we have projects in varying degrees. And generally as discussed, as you go out and you're ready to permit, you are essentially making it public, and we had envisioned following the schedule as we got to permit. We'll be able to talk to the investors, specifically around what the projects are and what the prospects are for that particular project.

So there are varying degrees of development and I'm sure there are one or two things on list that inevitably won't get developed, but there will be a number of things that are not in the list yet that will be developed. I cannot be more confident in the $100 million in regards to as it being conservative or aggressive.

I think it is certainly a bar that management will be able to under promise and over deliver on..

Okay.

And then in terms of funding, what’s your financing strategy to raise the capital to invest in those types of projects? Are you anticipating relying on PBF equity or sponsor support?.

Look, I'm not going to get into prospectively how we're going to finance transactions that we haven't announced. We are very cognizant of the fact and a bit frustrated with the fact, the way of the equity capital markets can treat a situation. So we’re cognizant of that.

We prepare for that in the future and that we don't want to put ourselves in a position that we've seen. Others put themselves in where they get taken advantage of. That ties right in line with what we did with our distribution growth.

We slow the growth down a bit and was that doing a vacuum that allows more funds to be used for getting projects internally. We're vigilant about maintaining leverage below four times.

So you’re not going to see us go beyond that, but we’ll look at a number of different ways to finance a transaction, but we're certainly cognizant of overhang that could be created and where we're focused on not doing that..

Okay.

What was the utilization on the rail assets in the fourth quarter and given the uptick in utilization? Is there any change in appetite to extend the duration of some of those contracts?.

I'll answer the second part and give the first part to Erik. The second part is material uptick and the use of the assets. There's a four-year runway on those contracts. So we continue to look at, but I think those assets are proving themselves to be strategic assets for the refining company.

There is a fair bit of runway on those contracts, but at this time, not only is it – are we seeing it firsthand in terms of the uptick in utilization, but demonstrates how valuable the option is for independent refining company that's always looking to source the most economic crude..

And I would say on the utilization side, we were probably just shy of about 50% utilized across both rail assets. It's a bit of a misnomer because the double loop track as a reminder is designed almost exclusively for light crude.

We've made some operational changes that allow us to run some heavy crude through that facility, so we've got some spillover. Safe assumption is the balance of the year we expect that the West Ladder Rack, which is the heavy crude rack, should be well north of 100% utilized and then we'll have some spillover into the loop track.

So anywhere from probably the 40% to 60% utilization range is a decent proxy..

Okay.

And last question, given the increased focus on corporate governance within the midstream space, is there any anticipated changes to the executive compensation plan to focus more on the total unit or the return for ROIC within the partnership?.

I would say in terms of partnership, we have a comprehensive compensation system that is meant to incentivize management of PBF and PBFX to deliver shareholder returns to not only the shareholders of PBF, but to the unitholders of PBFX. And so I don't see any significant deviation of that, but that's our policy..

Thank you. End of Q&A.

Thank you. [Operator Instructions].

Okay. Well with that, I don't think there's any other questions, but I greatly appreciate everyone's time and look forward to producing positive results in the future. Have a great day and nice pleasant and safe weekend..

I would like to thank everybody for their participation on today’s conference call. Please feel free to disconnect your line at any time..