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Name | Symbol | Market | Type |
---|---|---|---|
Calumet Specialty Products Partners LP | NASDAQ:CLMT | NASDAQ | Trust |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 15.66 | 14.00 | 16.90 | 0 | 09:09:38 |
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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35-1811116
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification Number)
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2780 Waterfront Parkway East Drive, Suite 200
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Indianapolis, Indiana
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46214
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(Address of Principal Executive Officers)
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(Zip Code)
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Large accelerated filer
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☐
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Accelerated filer
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☒
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Non-accelerated filer
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☐ (Do not check if a smaller reporting company)
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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March 31, 2017
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December 31, 2016
|
||||
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(Unaudited)
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||||
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(In millions, except unit data)
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||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4.6
|
|
|
$
|
4.2
|
|
Accounts receivable:
|
|
|
|
||||
Trade
|
240.4
|
|
|
216.4
|
|
||
Other
|
5.8
|
|
|
22.3
|
|
||
|
246.2
|
|
|
238.7
|
|
||
Inventories
|
436.4
|
|
|
386.2
|
|
||
Derivative assets
|
1.5
|
|
|
0.8
|
|
||
Prepaid expenses and other current assets
|
13.5
|
|
|
11.0
|
|
||
Total current assets
|
702.2
|
|
|
640.9
|
|
||
Property, plant and equipment, net
|
1,654.8
|
|
|
1,678.0
|
|
||
Investment in unconsolidated affiliates
|
10.2
|
|
|
10.3
|
|
||
Goodwill
|
177.2
|
|
|
177.2
|
|
||
Other intangible assets, net
|
170.3
|
|
|
178.5
|
|
||
Other noncurrent assets, net
|
33.5
|
|
|
40.3
|
|
||
Total assets
|
$
|
2,748.2
|
|
|
$
|
2,725.2
|
|
LIABILITIES AND PARTNERS’ CAPITAL
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
311.3
|
|
|
$
|
295.5
|
|
Accrued interest payable
|
55.1
|
|
|
52.5
|
|
||
Accrued salaries, wages and benefits
|
17.5
|
|
|
11.5
|
|
||
Other taxes payable
|
20.9
|
|
|
20.8
|
|
||
Obligations under inventory financing agreements
|
31.3
|
|
|
—
|
|
||
Other current liabilities
|
52.2
|
|
|
99.6
|
|
||
Current portion of long-term debt
|
3.5
|
|
|
3.5
|
|
||
Derivative liabilities
|
4.9
|
|
|
14.8
|
|
||
Total current liabilities
|
496.7
|
|
|
498.2
|
|
||
Noncurrent deferred income taxes
|
2.3
|
|
|
2.3
|
|
||
Pension and postretirement benefit obligations
|
11.1
|
|
|
11.3
|
|
||
Other long-term liabilities
|
0.9
|
|
|
1.0
|
|
||
Long-term debt, less current portion
|
2,023.9
|
|
|
1,993.7
|
|
||
Total liabilities
|
2,534.9
|
|
|
2,506.5
|
|
||
Commitments and contingencies
|
|
|
|
||||
Partners’ capital:
|
|
|
|
||||
Limited partners’ interest 76,691,864 units and 76,392,258 units, issued and outstanding as of March 31, 2017, and December 31, 2016, respectively
|
205.8
|
|
|
211.2
|
|
||
General partner’s interest
|
15.8
|
|
|
15.8
|
|
||
Accumulated other comprehensive loss
|
(8.3
|
)
|
|
(8.3
|
)
|
||
Total partners’ capital
|
213.3
|
|
|
218.7
|
|
||
Total liabilities and partners’ capital
|
$
|
2,748.2
|
|
|
$
|
2,725.2
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions, except per unit and unit data)
|
||||||
Sales
|
$
|
937.4
|
|
|
$
|
713.0
|
|
Cost of sales
|
797.9
|
|
|
626.8
|
|
||
Gross profit
|
139.5
|
|
|
86.2
|
|
||
Operating costs and expenses:
|
|
|
|
||||
Selling
|
27.5
|
|
|
30.5
|
|
||
General and administrative
|
31.8
|
|
|
27.6
|
|
||
Transportation
|
40.6
|
|
|
39.2
|
|
||
Taxes other than income taxes
|
5.5
|
|
|
5.7
|
|
||
Asset impairment
|
0.4
|
|
|
—
|
|
||
Other
|
1.9
|
|
|
2.0
|
|
||
Operating income (loss)
|
31.8
|
|
|
(18.8
|
)
|
||
Other income (expense):
|
|
|
|
||||
Interest expense
|
(43.9
|
)
|
|
(30.3
|
)
|
||
Gain (loss) on derivative instruments
|
5.7
|
|
|
(7.7
|
)
|
||
Loss from unconsolidated affiliates
|
(0.1
|
)
|
|
(11.1
|
)
|
||
Other
|
0.2
|
|
|
0.4
|
|
||
Total other expense
|
(38.1
|
)
|
|
(48.7
|
)
|
||
Net loss before income taxes
|
(6.3
|
)
|
|
(67.5
|
)
|
||
Income tax expense (benefit)
|
(0.1
|
)
|
|
0.2
|
|
||
Net loss
|
$
|
(6.2
|
)
|
|
$
|
(67.7
|
)
|
Allocation of net loss:
|
|
|
|
||||
Net loss
|
$
|
(6.2
|
)
|
|
$
|
(67.7
|
)
|
Less:
|
|
|
|
||||
General partner’s interest in net loss
|
(0.1
|
)
|
|
(1.4
|
)
|
||
Net loss available to limited partners
|
$
|
(6.1
|
)
|
|
$
|
(66.3
|
)
|
Weighted average limited partner units outstanding:
|
|
|
|
||||
Basic and diluted
|
77,412,634
|
|
|
76,449,841
|
|
||
Limited partners’ interest basic and diluted net loss per unit
|
$
|
(0.08
|
)
|
|
$
|
(0.87
|
)
|
Cash distributions declared per limited partner unit
|
$
|
—
|
|
|
$
|
0.685
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Net loss
|
$
|
(6.2
|
)
|
|
$
|
(67.7
|
)
|
Other comprehensive loss:
|
|
|
|
||||
Cash flow hedges:
|
|
|
|
||||
Cash flow hedge gain reclassified to net loss
|
—
|
|
|
(2.1
|
)
|
||
Total other comprehensive loss
|
—
|
|
|
(2.1
|
)
|
||
Comprehensive loss attributable to partners’ capital
|
$
|
(6.2
|
)
|
|
$
|
(69.8
|
)
|
|
Accumulated Other
Comprehensive Loss
|
|
Partners’ Capital
|
|
|
||||||||||
|
|
General
Partner
|
|
Limited
Partners
|
|
Total
|
|||||||||
|
(In millions)
|
||||||||||||||
Balance at December 31, 2016
|
$
|
(8.3
|
)
|
|
$
|
15.8
|
|
|
$
|
211.2
|
|
|
$
|
218.7
|
|
Net loss
|
—
|
|
|
(0.1
|
)
|
|
(6.1
|
)
|
|
(6.2
|
)
|
||||
Amortization of vested phantom units
|
—
|
|
|
—
|
|
|
1.1
|
|
|
1.1
|
|
||||
Settlement of tax withholdings on equity-based incentive compensation
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
||||
Contributions from Calumet GP, LLC
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Balance at March 31, 2017
|
$
|
(8.3
|
)
|
|
$
|
15.8
|
|
|
$
|
205.8
|
|
|
$
|
213.3
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Operating activities
|
|
|
|
||||
Net loss
|
$
|
(6.2
|
)
|
|
$
|
(67.7
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|||||
Depreciation and amortization
|
41.1
|
|
|
38.8
|
|
||
Amortization of turnaround costs
|
7.4
|
|
|
9.1
|
|
||
Non-cash interest expense
|
2.3
|
|
|
1.9
|
|
||
Provision for doubtful accounts
|
0.1
|
|
|
0.3
|
|
||
Unrealized gain on derivative instruments
|
(10.6
|
)
|
|
(4.6
|
)
|
||
Asset impairment
|
0.4
|
|
|
—
|
|
||
Loss on disposal of fixed assets
|
1.3
|
|
|
0.8
|
|
||
Non-cash equity based compensation
|
1.5
|
|
|
1.8
|
|
||
Lower of cost or market inventory adjustment
|
(4.0
|
)
|
|
(8.1
|
)
|
||
Loss from unconsolidated affiliates
|
0.1
|
|
|
11.1
|
|
||
Other non-cash activities
|
1.5
|
|
|
1.2
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(7.6
|
)
|
|
(20.7
|
)
|
||
Inventories
|
(46.2
|
)
|
|
(36.0
|
)
|
||
Prepaid expenses and other current assets
|
(4.0
|
)
|
|
—
|
|
||
Derivative activity
|
(0.1
|
)
|
|
(3.6
|
)
|
||
Turnaround costs
|
(0.5
|
)
|
|
(6.4
|
)
|
||
Other assets
|
(0.2
|
)
|
|
(0.3
|
)
|
||
Accounts payable
|
21.7
|
|
|
(1.8
|
)
|
||
Accrued interest payable
|
2.6
|
|
|
14.2
|
|
||
Accrued salaries, wages and benefits
|
5.6
|
|
|
(9.2
|
)
|
||
Other taxes payable
|
0.1
|
|
|
(0.4
|
)
|
||
Other liabilities
|
(46.8
|
)
|
|
24.0
|
|
||
Pension and postretirement benefit obligations
|
(0.2
|
)
|
|
(0.5
|
)
|
||
Net cash used in operating activities
|
(40.7
|
)
|
|
(56.1
|
)
|
||
Investing activities
|
|
|
|
||||
Additions to property, plant and equipment
|
(17.2
|
)
|
|
(66.8
|
)
|
||
Investment in unconsolidated affiliates
|
—
|
|
|
(0.9
|
)
|
||
Net cash used in investing activities
|
(17.2
|
)
|
|
(67.7
|
)
|
||
Financing activities
|
|
|
|
||||
Proceeds from borrowings — revolving credit facility
|
219.7
|
|
|
393.9
|
|
||
Repayments of borrowings — revolving credit facility
|
(190.7
|
)
|
|
(210.0
|
)
|
||
Repayments of borrowings
—
related party note
|
—
|
|
|
(1.5
|
)
|
||
Payments on capital lease obligations
|
(2.2
|
)
|
|
(2.0
|
)
|
||
Proceeds from inventory financing agreements
|
32.2
|
|
|
—
|
|
||
Other financing activities
|
(0.4
|
)
|
|
2.4
|
|
||
Contributions from Calumet GP, LLC
|
0.1
|
|
|
—
|
|
||
Taxes paid for phantom unit grants
|
(0.4
|
)
|
|
—
|
|
||
Distributions to partners
|
—
|
|
|
(57.4
|
)
|
||
Net cash provided by financing activities
|
58.3
|
|
|
125.4
|
|
||
Net increase in cash and cash equivalents
|
0.4
|
|
|
1.6
|
|
||
Cash and cash equivalents at beginning of period
|
4.2
|
|
|
5.6
|
|
||
Cash and cash equivalents at end of period
|
$
|
4.6
|
|
|
$
|
7.2
|
|
Supplemental disclosure of non-cash financing and investing activities
|
|
|
|
||||
Non-cash property, plant and equipment additions
|
$
|
8.1
|
|
|
$
|
29.3
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
RINs Obligation
|
$
|
33.4
|
|
|
$
|
79.3
|
|
Other
|
18.8
|
|
|
20.3
|
|
||
Total
|
$
|
52.2
|
|
|
$
|
99.6
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Titled
Inventory
|
|
Supply & Offtake
Agreements
(1)
|
|
Total
|
|
Titled
Inventory
|
|
Supply & Offtake
Agreements
(1)
|
|
Total
|
||||||||||||
Raw materials
|
$
|
66.0
|
|
|
$
|
2.8
|
|
|
$
|
68.8
|
|
|
$
|
57.4
|
|
|
$
|
—
|
|
|
$
|
57.4
|
|
Work in process
|
70.5
|
|
|
6.0
|
|
|
76.5
|
|
|
74.2
|
|
|
—
|
|
|
74.2
|
|
||||||
Finished goods
|
259.6
|
|
|
31.5
|
|
|
291.1
|
|
|
254.6
|
|
|
—
|
|
|
254.6
|
|
||||||
|
$
|
396.1
|
|
|
$
|
40.3
|
|
|
$
|
436.4
|
|
|
$
|
386.2
|
|
|
$
|
—
|
|
|
$
|
386.2
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||
|
Investment
|
|
Percent Ownership
|
|
Investment
|
|
Percent Ownership
|
||||||
Pacific New Investment Limited
|
$
|
9.6
|
|
|
23.8
|
%
|
|
$
|
9.6
|
|
|
23.8
|
%
|
Other
|
0.6
|
|
|
|
|
0.7
|
|
|
|
||||
Total
|
$
|
10.2
|
|
|
|
|
$
|
10.3
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Borrowings under amended and restated senior secured revolving credit agreement with third-party lenders, interest payments quarterly, borrowings due July 2019, weighted average interest rate of 5.5% and 4.8% at March 31, 2017 and December 31, 2016, respectively
|
$
|
39.2
|
|
|
$
|
10.2
|
|
Borrowings under 2021 Secured Notes, interest at a fixed rate of 11.50%, interest payments semiannually, borrowings due January 2021, effective interest rate of 12.3% and 12.2% for the three months ended March 31, 2017 and the year ended December 31, 2016, respectively
|
400.0
|
|
|
400.0
|
|
||
Borrowings under 2021 Notes, interest at a fixed rate of 6.50%, interest payments semiannually, borrowings due April 2021, effective interest rate of 6.8% for each of the three months ended March 31, 2017 and the year ended December 31, 2016, respectively
|
900.0
|
|
|
900.0
|
|
||
Borrowings under 2022 Notes, interest at a fixed rate of 7.625%, interest payments semiannually, borrowings due January 2022, effective interest rate of 8.0% for each of the three months ended March 31, 2017 and the year ended December 31, 2016, respectively
(1)
|
352.4
|
|
|
352.5
|
|
||
Borrowings under 2023 Notes, interest at a fixed rate of 7.75%, interest payments semiannually, borrowings due April 2023, effective interest rate of 8.0% for each of the three months ended March 31, 2017 and the year ended December 31, 2016, respectively
|
325.0
|
|
|
325.0
|
|
||
Other
|
7.6
|
|
|
8.0
|
|
||
Capital lease obligations, at various interest rates, interest and principal payments monthly through November 2034
|
45.9
|
|
|
46.5
|
|
||
Less unamortized debt issuance costs
(2)
|
(31.3
|
)
|
|
(33.2
|
)
|
||
Less unamortized discounts
|
(11.4
|
)
|
|
(11.8
|
)
|
||
Total long-term debt
|
$
|
2,027.4
|
|
|
$
|
1,997.2
|
|
Less current portion of long-term debt
|
3.5
|
|
|
3.5
|
|
||
|
$
|
2,023.9
|
|
|
$
|
1,993.7
|
|
|
(1)
|
The balance includes a fair value interest rate hedge adjustment, which increased the debt balance by
$2.4 million
and
$2.5 million
as of
March 31, 2017
and
December 31, 2016
, respectively (refer to
Note 8
for additional information on the interest rate swap designated as a fair value hedge).
|
(2)
|
Deferred debt issuance costs are being amortized by the effective interest rate method over the lives of the related debt instruments. These amounts are net of accumulated amortization of
$16.2 million
and
$14.5 million
at
March 31, 2017
and
December 31, 2016
, respectively.
|
Year
|
Maturity
|
||
2017
|
$
|
2.6
|
|
2018
|
4.3
|
|
|
2019
|
42.0
|
|
|
2020
|
2.4
|
|
|
2021
|
1,303.3
|
|
|
Thereafter
|
713.1
|
|
|
Total
|
$
|
2,067.7
|
|
•
|
crude oil purchases and sales;
|
•
|
fuel product sales and purchases;
|
•
|
natural gas purchases;
|
•
|
precious metals purchases; and
|
•
|
fluctuations in the value of crude oil between geographic regions and between the different types of crude oil such as New York Mercantile Exchange West Texas Intermediate (“NYMEX WTI”), Light Louisiana Sweet (“LLS”), Western Canadian Select (“WCS”), Mixed Sweet Blend (“MSW”) and ICE Brent.
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
|
Balance Sheet Location
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
|
|
Net Amounts of Assets Presented
in the Condensed Consolidated Balance Sheets
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
|
|
Net Amounts of Assets Presented
in the Condensed Consolidated Balance Sheets
|
||||||||||||
Derivative instruments not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Specialty products segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Natural gas swaps
|
|
Derivative assets
|
|
$
|
—
|
|
|
$
|
(0.9
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
0.1
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
Fuel products segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Crude oil swaps
|
|
Derivative assets
|
|
4.5
|
|
|
(1.5
|
)
|
|
3.0
|
|
|
10.3
|
|
|
(7.4
|
)
|
|
2.9
|
|
||||||
Crude oil basis swaps
|
|
Derivative assets
|
|
0.5
|
|
|
(1.4
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(2.1
|
)
|
|
(2.1
|
)
|
||||||
Crude oil percentage basis swaps
|
|
Derivative assets
|
|
0.7
|
|
|
(0.4
|
)
|
|
0.3
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
||||||
Total derivative instruments
|
|
|
|
$
|
5.7
|
|
|
$
|
(4.2
|
)
|
|
$
|
1.5
|
|
|
$
|
10.5
|
|
|
$
|
(9.7
|
)
|
|
$
|
0.8
|
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
|
Balance Sheet Location
|
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
|
|
Net Amounts of Liabilities Presented
in the Condensed Consolidated Balance Sheets
|
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
|
|
Net Amounts of Liabilities Presented
in the Condensed Consolidated Balance Sheets
|
||||||||||||
Derivative instruments not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Specialty products segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Natural gas swaps
|
|
Derivative liabilities
|
|
$
|
(1.9
|
)
|
|
$
|
0.9
|
|
|
$
|
(1.0
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
0.1
|
|
|
$
|
(1.1
|
)
|
Fuel products segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Crude oil swaps
|
|
Derivative liabilities
|
|
(5.6
|
)
|
|
1.5
|
|
|
(4.1
|
)
|
|
(8.2
|
)
|
|
7.4
|
|
|
(0.8
|
)
|
||||||
Crude oil basis swaps
|
|
Derivative liabilities
|
|
(1.4
|
)
|
|
1.4
|
|
|
—
|
|
|
(7.1
|
)
|
|
2.1
|
|
|
(5.0
|
)
|
||||||
Crude oil percentage basis swaps
|
|
Derivative liabilities
|
|
(0.2
|
)
|
|
0.4
|
|
|
0.2
|
|
|
(0.6
|
)
|
|
0.1
|
|
|
(0.5
|
)
|
||||||
Gasoline crack spread swaps
|
|
Derivative liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.5
|
)
|
|
—
|
|
|
(3.5
|
)
|
||||||
Diesel crack spread swaps
|
|
Derivative liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|
—
|
|
|
(1.4
|
)
|
||||||
2/1/1 crack spread swaps
|
|
Derivative liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
(2.5
|
)
|
||||||
Total derivative instruments
|
|
|
$
|
(9.1
|
)
|
|
$
|
4.2
|
|
|
$
|
(4.9
|
)
|
|
$
|
(24.5
|
)
|
|
$
|
9.7
|
|
|
$
|
(14.8
|
)
|
|
Location of Loss of Derivative
|
Amount of Loss Recognized
in Net Loss |
|
Hedged Item
|
|
Location of Gain on Hedged Item
|
Amount of Gain Recognized
in Net Loss |
||||||||||||
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
|||||||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||||||
Swaps not allocated to a specific segment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate swap
|
Interest expense
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
2022 Notes
|
|
Interest income
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Type of Derivative
|
Amount of Realized Loss Recognized in Gain (Loss) on Derivative Instruments
|
|
Amount of Unrealized Gain (Loss) Recognized in Gain (Loss) on Derivative Instruments
|
||||||||||||
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
|||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Specialty products segment:
|
|
|
|
|
|
|
|
||||||||
Natural gas swaps
|
$
|
(0.7
|
)
|
|
$
|
(3.7
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
2.0
|
|
Fuel products segment:
|
|
|
|
|
|
|
|
||||||||
Crude oil swaps
|
(0.4
|
)
|
|
(0.9
|
)
|
|
(3.1
|
)
|
|
1.5
|
|
||||
Crude oil basis swaps
|
(0.9
|
)
|
|
—
|
|
|
6.1
|
|
|
(2.6
|
)
|
||||
Crude oil percentage basis swaps
|
(0.1
|
)
|
|
(3.9
|
)
|
|
1.0
|
|
|
0.2
|
|
||||
Crude oil options
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
||||
Crude oil futures
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
||||
Gasoline crack spread swaps
|
(1.6
|
)
|
|
(1.2
|
)
|
|
4.8
|
|
|
4.3
|
|
||||
2/1/1 crack spread swaps
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diesel crack spread swaps
|
(0.3
|
)
|
|
—
|
|
|
2.7
|
|
|
—
|
|
||||
Natural gas swaps
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
(0.2
|
)
|
||||
Total
|
$
|
(4.9
|
)
|
|
$
|
(12.3
|
)
|
|
$
|
10.6
|
|
|
$
|
4.6
|
|
Natural Gas Swap Contracts by Expiration Dates
|
MMBtu
|
|
$/MMBtu
|
|||
Second Quarter 2017
|
1,320,000
|
|
|
$
|
3.87
|
|
Third Quarter 2017
|
1,320,000
|
|
|
$
|
3.87
|
|
Fourth Quarter 2017
|
960,000
|
|
|
$
|
3.72
|
|
Total
|
3,600,000
|
|
|
|
||
Average price
|
|
|
$
|
3.83
|
|
Natural Gas Swap Contracts by Expiration Dates
|
MMBtu
|
|
$/MMBtu
|
|||
First Quarter 2017
|
1,350,000
|
|
|
$
|
3.88
|
|
Second Quarter 2017
|
1,320,000
|
|
|
$
|
3.87
|
|
Third Quarter 2017
|
1,320,000
|
|
|
$
|
3.87
|
|
Fourth Quarter 2017
|
960,000
|
|
|
$
|
3.72
|
|
Total
|
4,950,000
|
|
|
|
||
Average price
|
|
|
$
|
3.85
|
|
Crude Oil Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
Second Quarter 2017
|
323,605
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Third Quarter 2017
|
327,161
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Fourth Quarter 2017
|
327,161
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Total
|
977,927
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
48.87
|
|
Crude Oil Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
Second Quarter 2017
|
131,768
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Third Quarter 2017
|
133,216
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Fourth Quarter 2017
|
133,216
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Total
|
398,200
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
41.56
|
|
Crude Oil Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2017
|
320,049
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Second Quarter 2017
|
323,605
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Third Quarter 2017
|
327,161
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Fourth Quarter 2017
|
327,161
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Total
|
1,297,976
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
48.87
|
|
Crude Oil Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2017
|
130,320
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Second Quarter 2017
|
131,768
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Third Quarter 2017
|
133,216
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Fourth Quarter 2017
|
133,216
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Total
|
528,520
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
41.56
|
|
Crude Oil Basis Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Average Differential to NYMEX WTI
($/Bbl) |
||||
Second Quarter 2017
|
637,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Third Quarter 2017
|
644,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Fourth Quarter 2017
|
644,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Total
|
1,925,000
|
|
|
|
|
|
|||
Average differential
|
|
|
|
|
$
|
(13.22
|
)
|
Crude Oil Basis Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Average Differential to NYMEX WTI
($/Bbl) |
||||
First Quarter 2017
|
630,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Second Quarter 2017
|
637,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Third Quarter 2017
|
644,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Fourth Quarter 2017
|
644,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Total
|
2,555,000
|
|
|
|
|
|
|||
Average differential
|
|
|
|
|
$
|
(13.22
|
)
|
Crude Oil Percentage Basis Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Fixed Percentage of NYMEX WTI
(Average % of WTI/Bbl) |
|||
Second Quarter 2017
|
273,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Third Quarter 2017
|
276,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Fourth Quarter 2017
|
276,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Total
|
825,000
|
|
|
|
|
|
||
Average percentage
|
|
|
|
|
72.3
|
%
|
Crude Oil Percentage Basis Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Fixed Percentage of NYMEX WTI
(Average % of WTI/Bbl) |
|||
First Quarter 2017
|
270,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Second Quarter 2017
|
273,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Third Quarter 2017
|
276,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Fourth Quarter 2017
|
276,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Total
|
1,095,000
|
|
|
|
|
|
||
Average percentage
|
|
|
|
|
|
|
72.3
|
%
|
Gasoline Crack Spread Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2017
|
590,000
|
|
|
6,556
|
|
|
$
|
10.21
|
|
Total
|
590,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
10.21
|
|
Diesel Crack Spread Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2017
|
590,000
|
|
|
6,556
|
|
|
$
|
13.67
|
|
Total
|
590,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
13.67
|
|
2/1/1 Crack Spread Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2017
|
590,000
|
|
|
6,556
|
|
|
$
|
11.91
|
|
Total
|
590,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
11.91
|
|
•
|
Level 1 — inputs include observable unadjusted quoted prices in active markets for identical assets or liabilities
|
•
|
Level 2 — inputs include other than quoted prices in active markets that are either directly or indirectly observable
|
•
|
Level 3 — inputs include unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Natural gas swaps
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.9
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Crude oil swaps
|
—
|
|
|
—
|
|
|
3.0
|
|
|
3.0
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|
2.9
|
|
||||||||
Crude oil percent basis swaps
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Crude oil basis swaps
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|
(2.1
|
)
|
||||||||
Total derivative assets
|
—
|
|
|
—
|
|
|
1.5
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
0.8
|
|
||||||||
Pension plan investments
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||||
Total recurring assets at fair value
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
$
|
1.8
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
|
$
|
1.1
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Crude oil swaps
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4.1
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.8
|
)
|
|
$
|
(0.8
|
)
|
Crude oil basis swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.0
|
)
|
|
$
|
(5.0
|
)
|
|||||||
Crude oil percentage basis swaps
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
(0.5
|
)
|
||||||||
Gasoline crack spread swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.5
|
)
|
|
(3.5
|
)
|
||||||||
Diesel crack spread swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|
(1.4
|
)
|
||||||||
2/1/1 crack spread swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
(2.5
|
)
|
||||||||
Natural gas swaps
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
(1.1
|
)
|
||||||||
Total derivative liabilities
|
—
|
|
|
—
|
|
|
(4.9
|
)
|
|
(4.9
|
)
|
|
—
|
|
|
—
|
|
|
(14.8
|
)
|
|
(14.8
|
)
|
||||||||
RINs Obligation
|
—
|
|
|
(33.4
|
)
|
|
—
|
|
|
(33.4
|
)
|
|
—
|
|
|
(79.3
|
)
|
|
—
|
|
|
(79.3
|
)
|
||||||||
Total recurring liabilities at fair value
|
$
|
—
|
|
|
$
|
(33.4
|
)
|
|
$
|
(4.9
|
)
|
|
$
|
(38.3
|
)
|
|
$
|
—
|
|
|
$
|
(79.3
|
)
|
|
$
|
(14.8
|
)
|
|
$
|
(94.1
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Fair value at January 1,
|
$
|
(14.0
|
)
|
|
$
|
(33.9
|
)
|
Realized loss on derivative instruments
|
4.9
|
|
|
12.3
|
|
||
Unrealized gain on derivative instruments
|
10.6
|
|
|
4.6
|
|
||
Settlements
|
(4.9
|
)
|
|
(12.3
|
)
|
||
Transfers in (out) of Level 3
|
—
|
|
|
—
|
|
||
Fair value at March 31,
|
$
|
(3.4
|
)
|
|
$
|
(29.3
|
)
|
Total gain included in net loss attributable to changes in unrealized gain relating to financial assets and liabilities held as of March 31,
|
$
|
10.6
|
|
|
$
|
4.6
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Level
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
Financial Instrument:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior notes
|
1
|
|
$
|
1,341.1
|
|
|
$
|
1,553.3
|
|
|
$
|
1,334.1
|
|
|
$
|
1,552.2
|
|
Senior secured notes
|
2
|
|
$
|
462.5
|
|
|
$
|
385.2
|
|
|
$
|
458.8
|
|
|
$
|
384.5
|
|
Revolving credit facility
|
3
|
|
$
|
35.4
|
|
|
$
|
35.4
|
|
|
$
|
6.0
|
|
|
$
|
6.0
|
|
Capital lease and other obligations
|
3
|
|
$
|
53.5
|
|
|
$
|
53.5
|
|
|
$
|
54.5
|
|
|
$
|
54.5
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Interest cost
|
$
|
0.6
|
|
|
$
|
0.6
|
|
Expected return on assets
|
(0.8
|
)
|
|
(0.8
|
)
|
||
Net periodic benefit income
|
$
|
(0.2
|
)
|
|
$
|
(0.2
|
)
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Level 1
|
|
Total
|
|
Level 1
|
|
Total
|
||||||||
Plan assets subject to leveling:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
Total plan assets subject to leveling
|
$
|
0.3
|
|
|
0.3
|
|
|
$
|
0.3
|
|
|
0.3
|
|
||
Plan assets measured at net asset value:
|
|
|
|
|
|
|
|
||||||||
Domestic equities
|
|
|
9.0
|
|
|
|
|
8.6
|
|
||||||
Foreign equities
|
|
|
8.9
|
|
|
|
|
8.7
|
|
||||||
Fixed income
|
|
|
32.7
|
|
|
|
|
32.2
|
|
||||||
Total plan assets measured at net asset value
|
|
|
50.6
|
|
|
|
|
49.5
|
|
||||||
Total plan assets
|
|
|
$
|
50.9
|
|
|
|
|
$
|
49.8
|
|
Components of Accumulated Other Comprehensive Income (Loss)
|
Amount Reclassified From Accumulated Other Comprehensive Income (Loss)
|
|
Location of Gain (Loss)
|
||||||
Three Months Ended March 31,
|
|
||||||||
2017
|
|
2016
|
|
||||||
Derivative gains (losses) reflected in gross profit:
|
|
|
|
|
|
||||
|
$
|
—
|
|
|
$
|
16.0
|
|
|
Sales
|
|
—
|
|
|
(13.9
|
)
|
|
Cost of sales
|
||
|
$
|
—
|
|
|
$
|
2.1
|
|
|
Total
|
|
|
|
|
|
|
||||
Amortization of defined benefit pension plans:
|
|
|
|||||||
Amortization of net loss
|
$
|
—
|
|
|
$
|
—
|
|
|
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total
|
|
(1)
|
This accumulated other comprehensive loss component is included in the computation of net periodic benefit income. See
Note 10
for additional details.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Numerator for basic and diluted earnings per limited partner unit:
|
|
|
|
||||
Net loss
|
$
|
(6.2
|
)
|
|
$
|
(67.7
|
)
|
General partner’s interest in net loss
|
(0.1
|
)
|
|
(1.4
|
)
|
||
Net loss available to limited partners
|
$
|
(6.1
|
)
|
|
$
|
(66.3
|
)
|
Denominator for basic and diluted earnings per limited partner unit:
|
|
|
|
||||
Basic weighted average limited partner units outstanding
|
77,412,634
|
|
|
76,449,841
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Participating securities — phantom units
|
—
|
|
|
—
|
|
||
Diluted weighted average limited partner units outstanding
(1)
|
77,412,634
|
|
|
76,449,841
|
|
||
Limited partners’ interest basic and diluted net loss per unit
|
$
|
(0.08
|
)
|
|
$
|
(0.87
|
)
|
|
•
|
Specialty Products.
The specialty products segment produces a variety of lubricating oils, solvents, waxes, synthetic lubricants and other products which are sold to customers who purchase these products primarily as raw material components for basic automotive, industrial and consumer goods. Specialty products also include synthetic lubricants used primarily in manufacturing, mining and automotive applications.
|
•
|
Fuel Products
. The fuel products segment produces primarily gasoline, diesel, jet fuel and asphalt which are primarily sold to customers located in the PADD 2, PADD 3 and PADD 4 areas within the U.S.
|
•
|
Oilfield Services.
The oilfield services segment markets its products and oilfield services including drilling fluids, completion fluids and solids control services to the oil and gas industry.
|
Three Months Ended March 31, 2017
|
Specialty
Products
|
|
Fuel
Products
|
|
Oilfield
Services
|
|
Combined
Segments
|
|
Eliminations
|
|
Consolidated
Total
|
||||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External customers
|
$
|
337.2
|
|
|
$
|
549.3
|
|
|
$
|
50.9
|
|
|
$
|
937.4
|
|
|
$
|
—
|
|
|
$
|
937.4
|
|
Intersegment sales
|
0.1
|
|
|
15.2
|
|
|
—
|
|
|
15.3
|
|
|
(15.3
|
)
|
|
—
|
|
||||||
Total sales
|
$
|
337.3
|
|
|
$
|
564.5
|
|
|
$
|
50.9
|
|
|
$
|
952.7
|
|
|
$
|
(15.3
|
)
|
|
$
|
937.4
|
|
Loss from unconsolidated affiliates
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
Adjusted EBITDA
|
$
|
45.6
|
|
|
$
|
36.8
|
|
|
$
|
(3.7
|
)
|
|
$
|
78.7
|
|
|
$
|
—
|
|
|
$
|
78.7
|
|
Reconciling items to net loss:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
17.0
|
|
|
27.5
|
|
|
4.0
|
|
|
48.5
|
|
|
—
|
|
|
48.5
|
|
||||||
Impairment charges
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
||||||
Unrealized gain on derivatives
|
|
|
|
|
|
|
|
|
|
|
(10.6
|
)
|
|||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
43.9
|
|
|||||||||||
Non-cash equity based compensation and other non-cash items
|
|
|
|
|
|
|
|
|
|
|
2.8
|
|
|||||||||||
Income tax benefit
|
|
|
|
|
|
|
|
|
|
|
(0.1
|
)
|
|||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
$
|
(6.2
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended March 31, 2016
|
Specialty
Products
|
|
Fuel
Products
|
|
Oilfield
Services
|
|
Combined
Segments
|
|
Eliminations
|
|
Consolidated
Total
|
||||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External customers
|
$
|
300.7
|
|
|
$
|
379.9
|
|
|
$
|
32.4
|
|
|
$
|
713.0
|
|
|
$
|
—
|
|
|
$
|
713.0
|
|
Intersegment sales
|
0.4
|
|
|
3.7
|
|
|
—
|
|
|
4.1
|
|
|
(4.1
|
)
|
|
—
|
|
||||||
Total sales
|
$
|
301.1
|
|
|
$
|
383.6
|
|
|
$
|
32.4
|
|
|
$
|
717.1
|
|
|
$
|
(4.1
|
)
|
|
$
|
713.0
|
|
Loss from unconsolidated affiliates
|
$
|
—
|
|
|
$
|
(11.0
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
(11.1
|
)
|
|
$
|
—
|
|
|
$
|
(11.1
|
)
|
Adjusted EBITDA
|
$
|
58.5
|
|
|
$
|
(46.0
|
)
|
|
$
|
(5.9
|
)
|
|
$
|
6.6
|
|
|
$
|
—
|
|
|
$
|
6.6
|
|
Reconciling items to net loss:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
18.4
|
|
|
24.7
|
|
|
4.8
|
|
|
47.9
|
|
|
—
|
|
|
47.9
|
|
||||||
Realized gain (loss) on derivatives, not reflected in net loss or settled in a prior period
|
0.7
|
|
|
(2.8
|
)
|
|
—
|
|
|
(2.1
|
)
|
|
—
|
|
|
(2.1
|
)
|
||||||
Unrealized gain on derivatives
|
|
|
|
|
|
|
|
|
|
|
(4.6
|
)
|
|||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
30.3
|
|
|||||||||||
Non-cash equity based compensation and other non-cash items
|
|
|
|
|
|
|
|
|
|
|
2.6
|
|
|||||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
0.2
|
|
|||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
$
|
(67.7
|
)
|
|
Three Months Ended March 31,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
Specialty products:
|
|
|
|
|
|
|
|
||||||
Lubricating oils
|
$
|
151.3
|
|
|
16.1
|
%
|
|
$
|
129.2
|
|
|
18.1
|
%
|
Solvents
|
67.5
|
|
|
7.2
|
%
|
|
55.9
|
|
|
7.8
|
%
|
||
Waxes
|
31.0
|
|
|
3.3
|
%
|
|
27.2
|
|
|
3.8
|
%
|
||
Packaged and synthetic specialty products
|
78.4
|
|
|
8.4
|
%
|
|
80.9
|
|
|
11.3
|
%
|
||
Other
|
9.0
|
|
|
1.0
|
%
|
|
7.5
|
|
|
1.2
|
%
|
||
Total
|
$
|
337.2
|
|
|
36.0
|
%
|
|
$
|
300.7
|
|
|
42.2
|
%
|
Fuel products:
|
|
|
|
|
|
|
|
||||||
Gasoline
|
$
|
228.2
|
|
|
24.3
|
%
|
|
$
|
162.2
|
|
|
22.7
|
%
|
Diesel
|
206.8
|
|
|
22.1
|
%
|
|
138.9
|
|
|
19.5
|
%
|
||
Jet fuel
|
37.6
|
|
|
4.0
|
%
|
|
23.4
|
|
|
3.3
|
%
|
||
Asphalt, heavy fuel oils and other
|
76.7
|
|
|
8.2
|
%
|
|
55.4
|
|
|
7.8
|
%
|
||
Total
|
$
|
549.3
|
|
|
58.6
|
%
|
|
$
|
379.9
|
|
|
53.3
|
%
|
Oilfield services:
|
|
|
|
|
|
|
|
|
|
|
|
||
Total
|
$
|
50.9
|
|
|
5.4
|
%
|
|
$
|
32.4
|
|
|
4.5
|
%
|
Consolidated sales
|
$
|
937.4
|
|
|
100.0
|
%
|
|
$
|
713.0
|
|
|
100.0
|
%
|
•
|
Gasoline margins have been volatile, but are expected to increase in response to the higher domestic demand associated with the summer driving season. Diesel margins have been negatively impacted by oversupply and decreases in drilling activities; however, margins are also expected to increase as we move into the summer driving season.
|
•
|
Environmental regulations continue to affect our margins in the form of the cost of Renewable Identification Numbers (“RINs”). To the extent we are unable to blend biofuels, we must purchase RINs in the open market to satisfy our annual requirement. The 36% decrease in the price of RINs during the
first quarter
2017
favorably affected our results of operations. It is not possible to predict what future RINs volumes or costs may be given the volatile price of RINs, but we continue to anticipate that RINs have the potential to remain a significant expense for our fuel products segment (inclusive of the favorable impact of exemptions received), assuming current market prices for RINs continue.
|
•
|
Asphalt demand is expected to increase due to the seasonality of the road construction and roofing industries, which have shown increased demand in prior years.
|
•
|
Although heavy sour crude oil discounts have narrowed recently, they are expected to remain wide over the long term as sour crude oil remains oversupplied. Sweet crude oil discounts are expected to remain weak on lower domestic sweet crude oil production and higher foreign sweet and sour crude oil imports. Processing heavy sour crude oil in our refining system results in a lower overall delivered cost of crude oil.
|
•
|
Specialty products margins have remained relatively stable and are expected to remain stable in the near term. We continue to consider our specialty products segment our core business and, over the long term, we plan to seek appropriate ways to invest in our specialty products segment while divesting in non-core businesses.
|
•
|
Our oilfield services segment was positively impacted by a 25% increase in the land-based rig count during the
three months ended March 31, 2017
.
We anticipate that the remainder of 2017 will remain challenging, and we plan to continue to align our cost structure with market conditions, which we believe will position us favorably when the drilling market ultimately recovers.
|
•
|
sales volumes;
|
•
|
production yields;
|
•
|
specialty products, fuel products and oilfield services segment gross profit;
|
•
|
specialty products, fuel products and oilfield services segment Adjusted EBITDA; and
|
•
|
selling, general and administrative expenses.
|
|
Three Months Ended March 31,
|
|||||||
|
2017
|
|
2016
|
|
% Change
|
|||
|
(In bpd)
|
|
|
|||||
Total sales volume
(1)
|
129,856
|
|
|
124,440
|
|
|
4.4
|
%
|
Total feedstock runs
(2)
|
132,165
|
|
|
128,385
|
|
|
2.9
|
%
|
Facility production:
(3)
|
|
|
|
|
|
|
||
Specialty products:
|
|
|
|
|
|
|
||
Lubricating oils
|
15,160
|
|
|
13,854
|
|
|
9.4
|
%
|
Solvents
|
7,345
|
|
|
7,352
|
|
|
(0.1
|
)%
|
Waxes
|
1,477
|
|
|
1,335
|
|
|
10.6
|
%
|
Packaged and synthetic specialty products
(4)
|
2,721
|
|
|
2,125
|
|
|
28.0
|
%
|
Other
|
1,893
|
|
|
908
|
|
|
108.5
|
%
|
Total
|
28,596
|
|
|
25,574
|
|
|
11.8
|
%
|
Fuel products:
|
|
|
|
|
|
|||
Gasoline
|
37,568
|
|
|
38,043
|
|
|
(1.2
|
)%
|
Diesel
|
33,011
|
|
|
30,347
|
|
|
8.8
|
%
|
Jet fuel
|
6,763
|
|
|
5,676
|
|
|
19.2
|
%
|
Asphalt, heavy fuels and other
|
29,413
|
|
|
28,240
|
|
|
4.2
|
%
|
Total
|
106,755
|
|
|
102,306
|
|
|
4.3
|
%
|
Total facility production
(3)
|
135,351
|
|
|
127,880
|
|
|
5.8
|
%
|
(1)
|
Total sales volume includes sales from the production at our facilities and certain third-party facilities pursuant to supply and/or processing agreements, sales of inventories and the resale of crude oil to third-party customers. Total sales volume includes the sale of purchased fuel product blendstocks, such as ethanol and biodiesel, as components of finished fuel products in our fuel products segment sales.
|
(2)
|
Total feedstock runs represent the bpd of crude oil and other feedstocks processed at our facilities and at certain third-party facilities pursuant to supply and/or processing agreements.
|
(3)
|
Total facility production represents the bpd of specialty products and fuel products yielded from processing crude oil and other feedstocks at our facilities and at certain third-party facilities pursuant to supply and/or processing agreements. The difference between total facility production and total feedstock runs is primarily a result of the time lag between the input of feedstocks and production of finished products and volume loss.
|
(4)
|
Packaged and synthetic specialty products include production at the Royal Purple, Bel-Ray, Calumet Packaging and Missouri facilities.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Sales
|
$
|
937.4
|
|
|
$
|
713.0
|
|
Cost of sales
|
797.9
|
|
|
626.8
|
|
||
Gross profit
|
139.5
|
|
|
86.2
|
|
||
Operating costs and expenses:
|
|
|
|
||||
Selling
|
27.5
|
|
|
30.5
|
|
||
General and administrative
|
31.8
|
|
|
27.6
|
|
||
Transportation
|
40.6
|
|
|
39.2
|
|
||
Taxes other than income taxes
|
5.5
|
|
|
5.7
|
|
||
Asset impairment
|
0.4
|
|
|
—
|
|
||
Other
|
1.9
|
|
|
2.0
|
|
||
Operating income (loss)
|
31.8
|
|
|
(18.8
|
)
|
||
Other income (expense):
|
|
|
|
||||
Interest expense
|
(43.9
|
)
|
|
(30.3
|
)
|
||
Gain (loss) on derivative instruments
|
5.7
|
|
|
(7.7
|
)
|
||
Loss from unconsolidated affiliates
|
(0.1
|
)
|
|
(11.1
|
)
|
||
Other
|
0.2
|
|
|
0.4
|
|
||
Total other expense
|
(38.1
|
)
|
|
(48.7
|
)
|
||
Net loss before income taxes
|
(6.3
|
)
|
|
(67.5
|
)
|
||
Income tax expense (benefit)
|
(0.1
|
)
|
|
0.2
|
|
||
Net loss
|
$
|
(6.2
|
)
|
|
$
|
(67.7
|
)
|
EBITDA
|
$
|
78.7
|
|
|
$
|
1.6
|
|
Adjusted EBITDA
|
$
|
78.7
|
|
|
$
|
6.6
|
|
Distributable Cash Flow
|
$
|
31.5
|
|
|
$
|
(25.1
|
)
|
•
|
the financial performance of our assets without regard to financing methods, capital structure or historical cost basis;
|
•
|
the ability of our assets to generate cash sufficient to pay interest costs and support our indebtedness;
|
•
|
our operating performance and return on capital as compared to those of other companies in our industry, without regard to financing or capital structure; and
|
•
|
the viability of acquisitions and capital expenditure projects and the overall rates of return on alternative investment opportunities.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Reconciliation of Net loss to EBITDA, Adjusted EBITDA and Distributable Cash Flow:
|
|
||||||
Net loss
|
$
|
(6.2
|
)
|
|
$
|
(67.7
|
)
|
Add:
|
|
|
|
||||
Interest expense
|
43.9
|
|
|
30.3
|
|
||
Depreciation and amortization
|
41.1
|
|
|
38.8
|
|
||
Income tax expense (benefit)
|
(0.1
|
)
|
|
0.2
|
|
||
EBITDA
|
$
|
78.7
|
|
|
$
|
1.6
|
|
Add:
|
|
|
|
||||
Unrealized gain on derivative instruments
|
$
|
(10.6
|
)
|
|
$
|
(4.6
|
)
|
Realized loss on derivatives, not included in net loss or settled in a prior period
|
—
|
|
|
(2.1
|
)
|
||
Amortization of turnaround costs
|
7.4
|
|
|
9.1
|
|
||
Impairment charges
|
0.4
|
|
|
—
|
|
||
Non-cash equity based compensation and other non-cash items
|
2.8
|
|
|
2.6
|
|
||
Adjusted EBITDA
|
$
|
78.7
|
|
|
$
|
6.6
|
|
Less:
|
|
|
|
||||
Replacement and environmental capital expenditures
(1)
|
$
|
5.3
|
|
|
$
|
7.8
|
|
Cash interest expense
(2)
|
41.6
|
|
|
28.4
|
|
||
Turnaround costs
|
0.5
|
|
|
6.4
|
|
||
Loss from unconsolidated affiliates
|
(0.1
|
)
|
|
(11.1
|
)
|
||
Income tax expense (benefit)
|
(0.1
|
)
|
|
0.2
|
|
||
Distributable Cash Flow
|
$
|
31.5
|
|
|
$
|
(25.1
|
)
|
|
(1)
|
Replacement capital expenditures are defined as those capital expenditures which do not increase operating capacity or reduce operating costs and exclude turnaround costs. Environmental capital expenditures include asset additions to meet or exceed environmental and operating regulations.
|
(2)
|
Represents consolidated interest expense less non-cash interest expense.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Reconciliation of Segment Adjusted EBITDA to EBITDA and Net loss:
|
|
|
|
||||
Segment Adjusted EBITDA
|
|
|
|
||||
Specialty products Adjusted EBITDA
|
$
|
45.6
|
|
|
$
|
58.5
|
|
Fuel products Adjusted EBITDA
|
36.8
|
|
|
(46.0
|
)
|
||
Oilfield services Adjusted EBITDA
|
(3.7
|
)
|
|
(5.9
|
)
|
||
Total segment Adjusted EBITDA
|
$
|
78.7
|
|
|
$
|
6.6
|
|
Less:
|
|
|
|
||||
Unrealized gain on derivative instruments
|
$
|
(10.6
|
)
|
|
$
|
(4.6
|
)
|
Realized loss on derivatives, not included in net loss or settled in a prior period
|
—
|
|
|
(2.1
|
)
|
||
Amortization of turnaround costs
|
7.4
|
|
|
9.1
|
|
||
Impairment charges
|
0.4
|
|
|
—
|
|
||
Non-cash equity based compensation and other non-cash items
|
2.8
|
|
|
2.6
|
|
||
EBITDA
|
$
|
78.7
|
|
|
$
|
1.6
|
|
Less:
|
|
|
|
||||
Interest expense
|
$
|
43.9
|
|
|
$
|
30.3
|
|
Depreciation and amortization
|
41.1
|
|
|
38.8
|
|
||
Income tax expense (benefit)
|
(0.1
|
)
|
|
0.2
|
|
||
Net loss
|
$
|
(6.2
|
)
|
|
$
|
(67.7
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Reconciliation of Distributable Cash Flow, Adjusted EBITDA and EBITDA to Net cash used in operating activities:
|
|
||||||
Distributable Cash Flow
|
$
|
31.5
|
|
|
$
|
(25.1
|
)
|
Add:
|
|
|
|
||||
Replacement and environmental capital expenditures
(1)
|
5.3
|
|
|
7.8
|
|
||
Cash interest expense
(2)
|
41.6
|
|
|
28.4
|
|
||
Turnaround costs
|
0.5
|
|
|
6.4
|
|
||
Loss from unconsolidated affiliates
|
(0.1
|
)
|
|
(11.1
|
)
|
||
Income tax expense (benefit)
|
(0.1
|
)
|
|
0.2
|
|
||
Adjusted EBITDA
|
$
|
78.7
|
|
|
$
|
6.6
|
|
Less:
|
|
|
|
||||
Unrealized gain on derivative instruments
|
$
|
(10.6
|
)
|
|
$
|
(4.6
|
)
|
Realized loss on derivatives, not included in net loss or settled in a prior period
|
—
|
|
|
(2.1
|
)
|
||
Amortization of turnaround costs
|
7.4
|
|
|
9.1
|
|
||
Impairment charges
|
0.4
|
|
|
—
|
|
||
Non-cash equity based compensation and other non-cash items
|
2.8
|
|
|
2.6
|
|
||
EBITDA
|
$
|
78.7
|
|
|
$
|
1.6
|
|
Add:
|
|
|
|
||||
Unrealized gain on derivative instruments
|
$
|
(10.6
|
)
|
|
$
|
(4.6
|
)
|
Cash interest expense
(2)
|
(41.6
|
)
|
|
(28.4
|
)
|
||
Asset impairment
|
0.4
|
|
|
—
|
|
||
Non-cash equity based compensation
|
1.5
|
|
|
1.8
|
|
||
Lower of cost or market inventory adjustment
|
(4.0
|
)
|
|
(8.1
|
)
|
||
Loss from unconsolidated affiliates
|
0.1
|
|
|
11.1
|
|
||
Amortization of turnaround costs
|
7.4
|
|
|
9.1
|
|
||
Income tax benefit (expense)
|
0.1
|
|
|
(0.2
|
)
|
||
Provision for doubtful accounts
|
0.1
|
|
|
0.3
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(7.6
|
)
|
|
(20.7
|
)
|
||
Inventories
|
(46.2
|
)
|
|
(36.0
|
)
|
||
Other current assets
|
(4.0
|
)
|
|
—
|
|
||
Turnaround costs
|
(0.5
|
)
|
|
(6.4
|
)
|
||
Derivative activity
|
(0.1
|
)
|
|
(3.6
|
)
|
||
Other assets
|
(0.2
|
)
|
|
(0.3
|
)
|
||
Accounts payable
|
21.7
|
|
|
(1.8
|
)
|
||
Accrued interest payable
|
2.6
|
|
|
14.2
|
|
||
Other current liabilities
|
(41.1
|
)
|
|
14.4
|
|
||
Other, including changes in noncurrent liabilities
|
2.6
|
|
|
1.5
|
|
||
Net cash used in operating activities
|
$
|
(40.7
|
)
|
|
$
|
(56.1
|
)
|
|
(1)
|
Replacement capital expenditures are defined as those capital expenditures which do not increase operating capacity or reduce operating costs and exclude turnaround costs. Environmental capital expenditures include asset additions to meet or exceed environmental and operating regulations.
|
(2)
|
Represents consolidated interest expense less non-cash interest expense.
|
|
Three Months Ended March 31,
|
|||||||||
|
2017
|
|
2016
|
|
% Change
|
|||||
|
(Dollars in millions, except barrel and per barrel data)
|
|||||||||
Sales by segment:
|
|
|
|
|
|
|||||
Specialty products:
|
|
|
|
|
|
|||||
Lubricating oils
|
$
|
151.3
|
|
|
$
|
129.2
|
|
|
17.1
|
%
|
Solvents
|
67.5
|
|
|
55.9
|
|
|
20.8
|
%
|
||
Waxes
|
31.0
|
|
|
27.2
|
|
|
14.0
|
%
|
||
Packaged and synthetic specialty products
(1)
|
78.4
|
|
|
80.9
|
|
|
(3.1
|
)%
|
||
Other
(2)
|
9.0
|
|
|
7.5
|
|
|
20.0
|
%
|
||
Total specialty products
|
$
|
337.2
|
|
|
$
|
300.7
|
|
|
12.1
|
%
|
Total specialty products sales volume (in barrels)
|
2,584,000
|
|
|
2,360,000
|
|
|
9.5
|
%
|
||
Average specialty products sales price per barrel
|
$
|
130.50
|
|
|
$
|
127.42
|
|
|
2.4
|
%
|
|
|
|
|
|
|
|||||
Fuel products:
|
|
|
|
|
|
|||||
Gasoline
|
$
|
228.2
|
|
|
$
|
162.2
|
|
|
40.7
|
%
|
Diesel
|
206.8
|
|
|
122.9
|
|
|
68.3
|
%
|
||
Jet fuel
|
37.6
|
|
|
23.4
|
|
|
60.7
|
%
|
||
Asphalt, heavy fuel oils and other
(3)
|
76.7
|
|
|
55.4
|
|
|
38.4
|
%
|
||
Hedging activities
|
—
|
|
|
16.0
|
|
|
(100.0
|
)%
|
||
Total fuel products
|
$
|
549.3
|
|
|
$
|
379.9
|
|
|
44.6
|
%
|
Total fuel products sales volume (in barrels)
|
9,103,000
|
|
|
8,964,000
|
|
|
1.6
|
%
|
||
Average fuel products sales price per barrel (excluding hedging activities)
|
$
|
60.34
|
|
|
$
|
40.60
|
|
|
48.6
|
%
|
Average fuel products sales price per barrel (including hedging activities)
|
$
|
60.34
|
|
|
$
|
42.38
|
|
|
42.4
|
%
|
|
|
|
|
|
|
|||||
Total oilfield services
|
$
|
50.9
|
|
|
$
|
32.4
|
|
|
57.1
|
%
|
|
|
|
|
|
|
|||||
Total sales
|
$
|
937.4
|
|
|
$
|
713.0
|
|
|
31.5
|
%
|
Total specialty and fuel products sales volume (in barrels)
|
11,687,000
|
|
|
11,324,000
|
|
|
3.2
|
%
|
|
(1)
|
Represents packaged and synthetic specialty products at the Royal Purple, Bel-Ray, Calumet Packaging and Missouri facilities.
|
(2)
|
Represents fuels and asphalt produced in connection with the production of specialty products at the Princeton and Cotton Valley refineries and Dickinson and Karns City facilities.
|
(3)
|
Represents asphalt, heavy fuel oils and other products produced in connection with the production of fuels at the Shreveport, Superior, San Antonio and Great Falls refineries and crude oil sales from the Superior, San Antonio and Shreveport refineries to third-party customers.
|
|
Dollar Change
|
||
|
(In millions)
|
||
Volume
|
$
|
28.6
|
|
Sales price
|
7.9
|
|
|
Total specialty products segment sales increase
|
$
|
36.5
|
|
|
Dollar Change
|
||
|
(In millions)
|
||
Sales price
|
$
|
179.7
|
|
Volume
|
5.7
|
|
|
Hedging activities
|
(16.0
|
)
|
|
Total fuel products segment sales increase
|
$
|
169.4
|
|
|
Three Months Ended March 31,
|
|||||||||
|
2017
|
|
2016
|
|
% Change
|
|||||
|
(Dollars in millions, except per barrel data)
|
|||||||||
Gross profit by segment:
|
|
|
|
|
|
|||||
Specialty products:
|
|
|
|
|
|
|||||
Gross profit
|
$
|
82.3
|
|
|
$
|
99.3
|
|
|
(17.1
|
)%
|
Percentage of sales
|
24.4
|
%
|
|
33.0
|
%
|
|
|
|
||
Specialty products gross profit per barrel
|
$
|
31.85
|
|
|
$
|
42.08
|
|
|
(24.3
|
)%
|
Fuel products:
|
|
|
|
|
|
|||||
Gross profit (loss) excluding hedging activities
|
$
|
47.2
|
|
|
$
|
(21.8
|
)
|
|
316.5
|
%
|
Hedging activities
|
—
|
|
|
2.8
|
|
|
(100.0
|
)%
|
||
Gross profit (loss)
|
$
|
47.2
|
|
|
$
|
(19.0
|
)
|
|
348.4
|
%
|
Percentage of sales
|
8.6
|
%
|
|
(5.0
|
)%
|
|
|
|||
Fuel products gross profit (loss) per barrel (excluding hedging activities)
|
$
|
5.19
|
|
|
$
|
(2.43
|
)
|
|
313.6
|
%
|
Fuel products gross profit (loss) per barrel (including hedging activities)
|
$
|
5.19
|
|
|
$
|
(2.12
|
)
|
|
344.8
|
%
|
Oilfield services:
|
|
|
|
|
|
|
||||
Gross profit
|
$
|
10.0
|
|
|
$
|
5.9
|
|
|
69.5
|
%
|
Percentage of sales
|
19.6
|
%
|
|
18.2
|
%
|
|
|
|
||
Total gross profit
|
$
|
139.5
|
|
|
$
|
86.2
|
|
|
61.8
|
%
|
Percentage of sales
|
14.9
|
%
|
|
12.1
|
%
|
|
|
|
Dollar Change
|
||
|
(In millions)
|
||
Three months ended March 31, 2016, reported gross profit
|
$
|
99.3
|
|
Cost of materials
|
(36.1
|
)
|
|
LCM inventory adjustment
|
(4.1
|
)
|
|
Volume
|
14.4
|
|
|
Sales price
|
7.9
|
|
|
Operating costs
|
0.9
|
|
|
Three months ended March 31, 2017, reported gross profit
|
$
|
82.3
|
|
|
Dollar Change
|
||
|
(In millions)
|
||
Three months ended March 31, 2016, reported gross loss
|
$
|
(19.0
|
)
|
Sales price
|
179.7
|
|
|
RINs expense
|
64.0
|
|
|
LCM inventory adjustment
|
1.8
|
|
|
Volume
|
1.3
|
|
|
Cost of materials
|
(176.8
|
)
|
|
Hedging activities
|
(2.8
|
)
|
|
Operating costs
|
(1.0
|
)
|
|
Three months ended March 31, 2017, reported gross profit
|
$
|
47.2
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Derivative gain reflected in sales
|
$
|
—
|
|
|
$
|
16.0
|
|
Derivative loss reflected in cost of sales
|
—
|
|
|
(13.9
|
)
|
||
Derivative gain reflected in gross profit
|
$
|
—
|
|
|
$
|
2.1
|
|
|
|
|
|
||||
Realized loss on derivative instruments
|
$
|
(4.9
|
)
|
|
$
|
(12.3
|
)
|
Unrealized gain on derivative instruments
|
10.6
|
|
|
4.6
|
|
||
Total derivative gain (loss) reflected in the unaudited condensed consolidated statements of operations
|
$
|
5.7
|
|
|
$
|
(5.6
|
)
|
Total loss on commodity derivative settlements
|
$
|
(4.9
|
)
|
|
$
|
(12.3
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Net cash used in operating activities
|
$
|
(40.7
|
)
|
|
$
|
(56.1
|
)
|
Net cash used in investing activities
|
(17.2
|
)
|
|
(67.7
|
)
|
||
Net cash provided by financing activities
|
58.3
|
|
|
125.4
|
|
||
Net increase in cash and cash equivalents
|
$
|
0.4
|
|
|
$
|
1.6
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Capital improvement expenditures
|
$
|
6.0
|
|
|
$
|
31.8
|
|
Replacement capital expenditures
|
3.0
|
|
|
5.7
|
|
||
Environmental capital expenditures
|
2.3
|
|
|
2.1
|
|
||
Turnaround capital expenditures
|
0.5
|
|
|
6.4
|
|
||
Joint venture contributions
|
—
|
|
|
0.9
|
|
||
Total
|
$
|
11.8
|
|
|
$
|
46.9
|
|
•
|
a
$900.0 million
senior secured revolving credit facility maturing in July 2019, subject to borrowing base limitations, with a maximum letter of credit sublimit equal to
$600.0 million
, which amount may be increased to
90%
of revolver commitments in effect with the consent of the Agent (“revolving credit facility”);
|
•
|
$400.0 million
of 11.50% senior secured notes due 2021 (“2021 Secured Notes”);
|
•
|
$900.0 million
of 6.50% senior notes due 2021 (“2021 Notes”);
|
•
|
$350.0 million
of 7.625% senior notes due 2022 (“2022 Notes”); and
|
•
|
$325.0 million
of 7.75% senior notes due 2023 (“2023 Notes”).
|
|
|
|
Payments Due by Period
|
||||||||||||||||
|
Total
|
|
Less Than
1 Year |
|
1–3
Years |
|
3–5
Years |
|
More
Than 5 Years |
||||||||||
|
(In millions)
|
||||||||||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest on long-term debt at contractual rates and maturities
(1)
|
$
|
835.4
|
|
|
$
|
168.2
|
|
|
$
|
330.5
|
|
|
$
|
249.4
|
|
|
$
|
87.3
|
|
Operating lease obligations
(2)
|
138.4
|
|
|
39.0
|
|
|
54.8
|
|
|
26.3
|
|
|
18.3
|
|
|||||
Letters of credit
(3)
|
73.8
|
|
|
73.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase commitments
(4)
|
1,767.3
|
|
|
667.4
|
|
|
957.9
|
|
|
42.1
|
|
|
99.9
|
|
|||||
Employment agreements
|
4.5
|
|
|
3.0
|
|
|
1.2
|
|
|
0.3
|
|
|
—
|
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Obligations under inventory financing agreements
|
32.2
|
|
|
32.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital lease obligations
|
45.9
|
|
|
2.1
|
|
|
4.0
|
|
|
2.0
|
|
|
37.8
|
|
|||||
Long-term debt obligations, excluding capital lease obligations
|
2,021.8
|
|
|
1.4
|
|
|
42.0
|
|
|
1,653.4
|
|
|
325.0
|
|
|||||
Total obligations
|
$
|
4,919.3
|
|
|
$
|
987.1
|
|
|
$
|
1,390.4
|
|
|
$
|
1,973.5
|
|
|
$
|
568.3
|
|
|
(1)
|
Interest on long-term debt at contractual rates and maturities relates primarily to interest on our senior notes, revolving credit facility interest and fees and interest on our capital lease obligations, which excludes the adjustment for the interest rate swap agreement.
|
(2)
|
We have various operating leases primarily for railcars, the use of land, storage tanks, compressor stations, equipment, precious metals and office facilities.
|
(3)
|
Letters of credit primarily supporting crude oil purchases and precious metals leasing.
|
(4)
|
Purchase commitments consist primarily of obligations to purchase fixed volumes of crude oil, other feedstocks and finished products for resale from various suppliers based on current market prices at the time of delivery.
|
•
|
crude oil purchases and sales;
|
•
|
refined product sales and purchases;
|
•
|
natural gas purchases;
|
•
|
precious metals; and
|
•
|
fluctuations in the value of crude oil between geographic regions and between the different types of crude oil such as NYMEX WTI, Light Louisiana Sweet (“LLS”), WCS, Mixed Sweet Blend (“MSW”) and ICE Brent.
|
Crude Oil Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
Second Quarter 2017
|
323,605
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Third Quarter 2017
|
327,161
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Fourth Quarter 2017
|
327,161
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Total
|
977,927
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
48.87
|
|
Crude Oil Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
Second Quarter 2017
|
131,768
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Third Quarter 2017
|
133,216
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Fourth Quarter 2017
|
133,216
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Total
|
398,200
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
41.56
|
|
Crude Oil Basis Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Average Differential to NYMEX WTI
($/Bbl) |
||||
Second Quarter 2017
|
637,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Third Quarter 2017
|
644,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Fourth Quarter 2017
|
644,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Total
|
1,925,000
|
|
|
|
|
|
|||
Average differential
|
|
|
|
|
$
|
(13.22
|
)
|
Crude Oil Percentage Basis Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Fixed Percentage of NYMEX WTI
(Average % of WTI/Bbl) |
|||
Second Quarter 2017
|
273,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Third Quarter 2017
|
276,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Fourth Quarter 2017
|
276,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Total
|
825,000
|
|
|
|
|
|
||
Average percentage
|
|
|
|
|
72.3
|
%
|
Natural Gas Swap Contracts by Expiration Dates
|
MMBtu
|
|
$/MMBtu
|
|||
Second Quarter 2017
|
1,320,000
|
|
|
$
|
3.87
|
|
Third Quarter 2017
|
1,320,000
|
|
|
$
|
3.87
|
|
Fourth Quarter 2017
|
960,000
|
|
|
$
|
3.72
|
|
Total
|
3,600,000
|
|
|
|
||
Average price
|
|
|
$
|
3.83
|
|
|
In millions
|
||
Crude oil swaps
|
$
|
0.6
|
|
Crude oil basis swaps
|
$
|
1.9
|
|
Crude oil percentage basis swaps
|
$
|
0.8
|
|
Natural gas swaps
|
$
|
3.6
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
|
(In millions)
|
||||||||||||||
Financial Instrument:
|
|
|
|
|
|
|
|
||||||||
2021 Secured Notes
|
$
|
462.5
|
|
|
$
|
385.2
|
|
|
$
|
458.8
|
|
|
$
|
384.5
|
|
2021 Notes
|
$
|
766.1
|
|
|
$
|
890.8
|
|
|
$
|
763.9
|
|
|
$
|
890.2
|
|
2022 Notes
|
$
|
297.5
|
|
|
$
|
344.0
|
|
|
$
|
296.0
|
|
|
$
|
343.7
|
|
2023 Notes
|
$
|
277.5
|
|
|
$
|
318.5
|
|
|
$
|
274.2
|
|
|
$
|
318.3
|
|
|
|
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
|
|
|
|
|
|
|
|
By:
|
Calumet GP, LLC, its general partner
|
|
|
|
|
Date:
|
May 9, 2017
|
By:
|
/s/ D. West Griffin
|
|
|
|
D. West Griffin
|
|
|
|
Executive Vice President and Chief Financial Officer of Calumet GP, LLC (Principal Accounting and Financial Officer)
|
|
|
|
(Authorized Person and Principal Accounting Officer)
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Certificate of Limited Partnership of Calumet Specialty Products Partners, L.P. (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1 filed with the Commission on October 7, 2005 (File No. 333-128880)).
|
|
|
|
3.2
|
|
Amended and Restated Limited Partnership Agreement of Calumet Specialty Products Partners, L.P. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on February 13, 2006 (File No. 000-51734)).
|
|
|
|
3.3
|
|
Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership of Calumet Specialty Products Partners, L.P. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on July 11, 2006 (File No. 000-51734)).
|
|
|
|
3.4
|
|
Amendment No. 2 to First Amended and Restated Agreement of Limited Partnership of Calumet Specialty Products Partners, L.P. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on April 18, 2008 (File No. 000-51734)).
|
|
|
|
3.5
|
|
Certificate of Formation of Calumet GP, LLC (incorporated by reference to Exhibit 3.3 of Registrant’s Registration Statement on Form S-1 filed with the Commission on October 7, 2005 (File No. 333-128880)).
|
|
|
|
3.6
|
|
Amended and Restated Limited Liability Company Agreement of Calumet GP, LLC (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the Commission on February 13, 2006 (File No. 000-51734)).
|
|
|
|
10.1*
|
|
Third Amendment to Second Amended and Restated Credit Agreement, dated as of March 31, 2017, by and among the Company and certain of its subsidiaries as Borrowers, certain of its subsidiaries as Guarantors, the Lenders, Bank of America, N.A., as Agent, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A., as Co-Syndication Agents, PNC Bank, N.A., as Co-Documentation Agent and Bank of America, N.A., as Issuing Bank.
|
|
|
|
31.1*
|
|
Sarbanes-Oxley Section 302 certification of Timothy Go.
|
|
|
|
31.2*
|
|
Sarbanes-Oxley Section 302 certification of D. West Griffin.
|
|
|
|
32.1**
|
|
Section 1350 certification of Timothy Go and D. West Griffin.
|
|
|
|
100.INS*
|
|
XBRL Instance Document
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
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*
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Filed herewith.
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**
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Furnished herewith.
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1 Year Calumet Specialty Produc... Chart |
1 Month Calumet Specialty Produc... Chart |
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