Welcome to the PBF Logistics Second Quarter 2017 Earnings Conference Call and Webcast. [Operator Instructions] Please note today’s call may be 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, Erika. Good morning, and welcome to today’s call. With me today are Matt Lucey, Executive Vice President; Eric 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 Web site. 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. Now I'll turn the call over to Matt Lucey

Thanks, Colin, and good morning, everyone, and thank you for joining us on today’s call. We are pleased to report yet another quarter of consistent results from the Partnership and our 11th consecutive distribution increase. The April acquisition of the Toledo Terminal marks our sixth acquisition since inception and dovetails with our third-party M&A strategy. These efforts, when combined with dropdown transactions and the development of organic projects, are the principal drivers of growth for the partnership. In regards to our 2 organic projects, I’m pleased to announce that the Paulsboro natural gas pipeline is operational, and natural gas is moving to the Paulsboro refinery through the pipe. Progress on the Chalmette storage tank continues. Hydrostatic testing on the shell begins this month, and we expect the tank to be in service by the end of October, which is consistent with our plan. In addition to our continued focus on third-party M&A, there continues to be tremendous opportunity in identifying aspects of PBF Energy's business for the partnership to leverage and develop new business, which will increase netbacks to the parent and drive revenue growth at the partnership. As a team, we're focused on managing and growing our business, and we look forward to continuing our progress. With that, I'll turn it over to Eric.

Thank you, Matt. This morning, we reported second quarter net income attributable to the partnership of $23.3 million or $0.49 per common limited partner unit and partnership EBITDA of approximately $35.6 million. Our results include approximately $3.4 million or $0.08 per common unit of acquisition and stock-based compensation expense. Revenue for the quarter increased to $62.3 million, and we generated $30.5 million of cash available for distribution, which represents a quarterly coverage ratio of approximately 1.38x. Total expenses for the second quarter were $27.3 million, including operating and maintenance expense, G&A and depreciation and amortization. Interest expense and financing costs totaled approximately $7.9 million. During the quarter, we spent approximately $36.9 million in CapEx, which includes $26.6 million for our organic projects and $10.1 million for the Toledo Terminal acquisition. We ended the quarter with approximately $218 million in liquidity, including $51 million of cash and approximately $167 million of availability under our revolving credit facility. As a result, our net debt-to-EBITDA ratio was approximately 3.47x on an annualized basis. We're pleased to announce our 11th consecutive distribution increase to $0.47 per common unit per quarter. This represents a 57% increase to our minimum quarterly distribution and a compound annual growth rate of approximately 16% since our IPO. Operator, we've concluded our opening remarks, and now we'll open the call for questions.

Thank you. [Operator Instructions] And we will go first to Ryan Levine from Citi. Please go ahead.

Good morning.

Good morning.

Would you be able to update us on your organic growth initiatives across your system in terms of leveraging your platform to move either closer to the well head or to the customer on the product side?

Yes, happy to. I think some of our frustration historically has been questions sort of directly at the dropdown pipeline, which are finite in nature, and the reason we are getting paid by the company is to -- is to grow the pie, not simply slice up the pie. So we have a dedicated team. The team has grown certainly over the last year. It is working with the refineries hand-in-hand and developing new opportunities. We're looking at that. At each one of our refineries, we process over 800,000 barrels a day of crude and sell a commensurate amount of product. And so, that's where our edge is. Obviously, the MLP space is very competitive and with lots of different players, but the fact of the matter is, our relationship with the refining company gives us an opportunity to find organic projects that unaffiliated companies may have a harder time doing. So we've got a dedicated team. We're doing it not at one refinery, but all refineries and in all aspects of the business, whether it's figuring out new ways to deliver crude or store or deliver a product to customers. We are proactively doing everything we can do to make sure if PBF is going to be using logistical assets, that PBFX has ownership in them.

Is there one area that you are gaining more traction in developing within your footprint?

No, I don’t think so. I think over the last 1.5 years, we brought in two new refineries that are two new pads for us and unto themselves create even more opportunities than the fact that those two assets were within major companies before, so we can plow new road with those. But no, I wouldn’t limit to one specific type of business or one specific asset. We are pursuing them and they’re -- we high grade them as best we can and go after the best projects sort of in order, but we are going after everything.

And then just one follow-up on that. In terms of opportunities in terms of storage at St. James, is that a near-term priority within the scope of all the organic options that you are pursuing?

Yes. We think St. James is a -- there will be -- yes, there is always -- the world is never static. It's dynamic. And patterns are always changing, but we think there is going to be opportunities with St. James in the proximity to Chalmette, and we are exploring a number of different things in regards to that.

Okay. Thank you.

[Operator Instructions] We will take our next question from Justin Jenkins with Raymond James.

Great. Thanks. Good morning, guys. I guess, Eric, if I could start maybe on the CapEx line, it looks like we are about halfway through the budget this year, I guess, with the organic projects wrapping up looks like by October. Is it pretty reasonable to think that a good chunk of the remaining second half total is probably in 3Q here? Is there some, I guess, balance between the two quarters we’ve got left?

No, assume that 3Q is probably going to be a bit higher than Q4, just as we get these projects wrapped up.

Okay. Great. And then, I guess, second housekeeping question for me. I think you covered it in your prepared remarks, but that bump that we saw from 1Q to 2Q on the G&A line, is that mostly acquisition related costs, or is there maybe some seasonality to stock-based comp in terms of 1Q to 2Q?

No, there is definitely seasonality -- no, I would say, it's actually the reverse. There is more seasonality when it comes to G&A and the stock-based comp. So we take an accelerated portion of stock-based comp through the second quarter earnings, and it's probably, order of magnitude, I'd say, roughly $2 million of the total. So …

Perfect. Perfect. That’s really helpful. And then, last question for me, if I could, Matt, I don’t mean to frustrate you on the dropdown question, but I guess on the PBF call earlier seemed like the mention was that the high cost basis assets or high tax basis assets are clearly the ones that are either maybe earmarked for PBFX. Now that we’ve got major maintenance out of the way at Torrance, is that one of the hurdles that was maybe remaining for the second half of TVPC?

No, I don't think so. I mean, look, it's an obvious asset that’s there. I think we are focused on continual gradual growth at PBFX, and we’ve been delivering that, and so that’s a lever that sort of sits there. We will pick our moment in time based on a whole host of factors, but we’ve been able to bring some organic projects. So we want to execute sort of promptly. And so that jumped in front of the queue. So our methodology, our focus is being -- delivering, like we said, consistent growth. And we have a couple of different levers to do that. Third-party M&A can be lumpy. And so we'll manage our business the best way we can, and the timing of which will flow out of that. So but certainly, the second half of Torrance Valley Pipeline is a ready, willing and able asset.

Makes perfect sense. I appreciate the color, guys.

Thank you.

At this time, we have no further questions. I'd like to turn the call back over to Matt for any closing remarks.

No closing remarks other than I hope you’ve a wonderful day. We look forward to continued success. Thank you.