INDIANAPOLIS, Nov. 4 /PRNewswire-FirstCall/ -- Calumet Specialty Products
Partners, L.P. (Nasdaq: CLMT) (the "Partnership" or "Calumet") reported net
income for the quarter ended September 30, 2009 of $4.0 million compared to
net loss of $12.5 million for the quarter ended September 30, 2008. For the
nine months ended September 30, 2009, net income was $53.6 million compared to
net income of $25.9 million for the nine months ended September 30, 2008.
Calumet reported net cash provided by operating activities of $110.6 million
for the nine months ended September 30, 2009 as compared to $75.7 million for
the same period in 2008.
Earnings before interest expense, taxes, depreciation and amortization
("EBITDA") and Adjusted EBITDA (as defined by the Partnership's credit
agreements) were $27.7 million and $42.5 million, respectively, for the
quarter ended September 30, 2009 as compared to $13.6 million and $51.6
million, respectively, for the third quarter of 2008. Distributable Cash Flow
for the quarter ended September 30, 2009 was $30.2 million as compared to
$41.3 million for third quarter of 2008. The $9.0 million decrease in Adjusted
EBITDA quarter over quarter was primarily due to a reduction in gross profit
in our specialty products segment offset by lower realized derivative losses
of $16.7 million in 2009 as compared to 2008 due to significant declines in
crude oil prices in 2008. (See the section of this release titled "Non-GAAP
Financial Measures" and the attached tables for discussion of EBITDA, Adjusted
EBITDA, Distributable Cash Flow and other non-generally accepted accounting
principles ("non-GAAP") financial measures, definitions of measures and
reconciliations of such measures to the comparable GAAP measures.)
The increase in net income of $16.5 million from the third quarter of 2008 was
primarily due to decreased derivative losses of $43.1 million ($26.4 million
of which represents non-cash derivative losses), decreased selling, general
and administrative expenses of $4.6 million, and decreased interest expense of
$2.4 million. Partially offsetting these increases in net income was lower
gross profit of $35.8 million. Gross profit by segment was as follows:
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
(In millions)
Gross profit by
segment:
Specialty products $33.5 $66.1 $114.1 $109.9
Fuel products 7.7 10.9 24.4 62.8
--- ---- ---- ----
Total gross profit $41.2 $77.0 $138.5 $172.7
===== ===== ====== ======
Specialty products segment gross profit quarter over quarter was primarily
impacted by lower overall specialty product selling prices in relation to
crude oil prices compared to the 2008 quarter due to lower demand resulting
from the economic downturn. In addition, specialty products segment gross
profit was negatively impacted by lower sales volumes in lubricating oils,
solvents and waxes due to economic conditions impacting product demand. The
decrease in fuel products segment gross profit quarter over quarter was due
primarily to decreasing selling prices as compared to the average cost of
crude oil as fuel products crack spreads declined significantly quarter over
quarter. These losses were partially offset by increased gains on derivatives
recorded in gross profit of $17.5 million and lower cost of sales of $10.3
million resulting from the liquidation of lower cost inventory layers in 2009.
"The continued economic weakness during the third quarter and decline in fuel
products crack spreads weighed negatively on our results. We continue to work
on controlling costs, executing our hedging strategies and completing small,
short-term payback projects to improve our results," said Bill Grube,
Calumet's CEO and President.
Quarterly Distribution
On October 20, 2009, the Partnership declared a quarterly cash distribution of
$0.45 per unit for the quarter ended September 30, 2009 on all outstanding
units. The distribution will be paid on November 13, 2009 to unitholders of
record as of the close of business on November 3, 2009.
Operations Summary
The following table sets forth unaudited information about our combined
operations. Production volume differs from sales volume due to changes in
inventory.
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Sales volume (bpd):
Specialty products 26,108 28,467 25,579 30,215
Fuel products 32,522 28,587 31,718 28,723
------ ------ ------
Total (1) 58,630 57,054 57,297 58,938
====== ====== ====== ======
Total feedstock runs (bpd)
(2)(3) 59,949 57,263 61,069 57,985
Facility production (bpd):
Specialty products:
Lubricating oils 13,118 13,257 11,481 13,108
Solvents 7,923 7,779 7,868 8,489
Waxes 1,274 1,518 1,082 1,851
Fuels 941 1,141 811 1,157
Asphalt and other
by-products 7,667 6,691 7,694 6,872
----- ----- ----- -----
Total 30,923 30,386 28,936 31,477
------ ------ ------ ------
Fuel products:
Gasoline 9,144 8,394 9,841 8,636
Diesel 12,079 10,548 12,662 10,580
Jet fuel 7,328 6,613 7,184 6,089
By-products 562 271 529 344
--- --- --- ---
Total 29,113 25,826 30,216 25,649
------ ------ ------ ------
Total facility production (3) 60,036 56,212 59,152 57,126
====== ====== ====== ======
1. Total sales volume includes sales from the production of our
facilities and certain third-party facilities pursuant to supply and/or
processing agreements, and sales of inventories.
2. Total feedstock runs represents the barrels per day of crude oil and
other feedstocks processed at our facilities and certain third-party
facilities pursuant to supply and/or processing agreements. The increase
in feedstock runs for the three months ended September 30, 2009 as
compared to the same period in 2008 is primarily due to increased run
rates at the Shreveport refinery due to increased operational
efficiencies.
3. Total facility production represents the barrels per day of specialty
products and fuel products yielded from processing crude oil and other
feedstocks at our facilities and certain third-party facilities pursuant
to supply and/or processing agreements. The difference between total
production and total feedstock runs is primarily a result of the time
lag between the input of feedstock and production of finished products
and volume loss.
Credit Agreement Covenant Compliance
Compliance with the financial covenants pursuant to our credit agreements is
measured quarterly based upon performance over the most recent four fiscal
quarters, and as of September 30, 2009, we continued to be in compliance with
all financial covenants under our credit agreements.
While assurances cannot be made regarding our future compliance with these
covenants and being cognizant of the general uncertain economic environment,
we believe that we will continue to maintain compliance with such financial
covenants.
Revolving Credit Facility Capacity
On September 30, 2009, we had availability on our revolving credit facility of
$89.5 million, based on a $200.6 million borrowing base, $41.9 million in
outstanding standby letters of credit, and borrowings of $69.1 million. We
believe that we have sufficient cash flow from operations and borrowing
capacity to meet our financial commitments, debt service obligations,
contingencies and anticipated capital expenditures. However, we are subject to
business and operational risks that could materially adversely affect our cash
flows. A material decrease in our cash flow from operations or a significant,
sustained decline in crude oil prices would likely produce a corollary
material adverse effect on our borrowing capacity under our revolving credit
facility and potentially our ability to comply with the covenants under our
credit facilities. Substantial declines in crude oil prices, if sustained, may
materially diminish our borrowing base, which is based in part on the value of
our crude oil inventory, which could result in a material reduction in our
borrowing capacity under our revolving credit facility. A significant
increase in crude oil prices, if sustained, would likely result in increased
working capital funded by borrowings under our revolving credit facility.
About the Partnership
The Partnership is a leading independent producer of high-quality, specialty
hydrocarbon products in North America. The Partnership processes crude oil and
other feedstocks into customized lubricating oils, white oils, solvents,
petrolatums, waxes and other specialty products used in consumer, industrial
and automotive products.
The Partnership also produces fuel products including gasoline, diesel and jet
fuel. The Partnership is based in Indianapolis, Indiana and has five
facilities located in northwest Louisiana, western Pennsylvania and
southeastern Texas.
A conference call is scheduled for 1:00 p.m. ET (12:00 p.m. CT) on Wednesday,
November 4, 2009, to discuss the financial and operational results for the
third quarter of 2009. Anyone interested in listening to the presentation may
call 866-272-9941 and enter passcode 65132315. For international callers, the
dial-in number is 617-213-8895 and the passcode is 65132315.
The telephonic replay of the conference call is available in the United States
by calling 888-286-8010 and entering passcode 58473570. International callers
can access the replay by calling 617-801-6888 and entering passcode 58473570.
The replay will be available beginning Wednesday, November 4, 2009, at
approximately 4:00 p.m. until Wednesday, November 18, 2009.
The information contained in this press release is available on the
Partnership's website at http://www.calumetspecialty.com.
Cautionary Statement Regarding Forward-Looking Statements
Some of the information in this release may contain forward-looking
statements. These statements can be identified by the use of forward-looking
terminology including "may," "believe," "expect," "anticipate," "estimate,"
"continue," or other similar words. These statements discuss future
expectations, contain projections of results of operations or of financial
condition, or state other "forward-looking" information. These forward-looking
statements involve risks and uncertainties that are difficult to predict and
may be beyond our control. These risks and uncertainties include the overall
demand for specialty hydrocarbon products, fuels and other refined products;
our ability to produce specialty products and fuels that meet our customers'
unique and precise specifications; the impact of fluctuations and rapid
increases and decreases in crude oil and crack spread prices, including the
impact on our liquidity; the results of the Partnership's hedging and risk
management activities; the availability of, and the Partnership's ability to
consummate, acquisition or combination opportunities; labor relations; the
ability of the Partnership to comply with the financial covenants contained in
its credit facilities; the Partnership's access to capital to fund
acquisitions and its ability to obtain debt or equity financing on
satisfactory terms; successful integration and future performance of acquired
assets or businesses; environmental liabilities or events that are not covered
by an indemnity; insurance or existing reserves; maintenance of the
Partnership's credit ratings and ability to receive open credit from its
suppliers; demand for various grades of crude oil and resulting changes in
pricing conditions; fluctuations in refinery capacity; the effects of
competition; continued creditworthiness of, and performance by,
counterparties; the impact of current and future laws, rulings and
governmental regulations; shortages or cost increases of power supplies,
natural gas, materials or labor; hurricane or other weather interference with
business operations; fluctuations in the debt and equity markets; and general
economic, market or business conditions. When considering these
forward-looking statements, you should keep in mind the risk factors and other
cautionary statements included in this release as well as the Partnership's
most recent Form 10-K and 2009 Forms 10-Q filed with the Securities and
Exchange Commission, which could cause the Partnership's actual results to
differ materially from those contained in any forward-looking statement.
Non-GAAP Financial Measures
We include in this release the non-GAAP financial measures of EBITDA, Adjusted
EBITDA and Distributable Cash Flow, and provide reconciliations of net income
(loss) to EBITDA, Adjusted EBITDA and Distributable Cash Flow and (in the case
of EBITDA and Adjusted EBITDA) to net cash provided by operating activities,
our most directly comparable financial performance and liquidity measures
calculated and presented in accordance with GAAP.
EBITDA and Adjusted EBITDA are used as supplemental financial measures by our
management and by external users of our financial statements such as
investors, commercial banks, research analysts and others to assess:
-- 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.
We define EBITDA as net income plus interest expense (including debt
extinguishment costs), taxes and depreciation and amortization. We define
Adjusted EBITDA to be Consolidated EBITDA as defined in our credit facility
agreements. Consistent with that definition, Adjusted EBITDA, for any period,
equals: (1) net income plus (2)(a) interest expense; (b) taxes; (c)
depreciation and amortization; (d) unrealized losses from mark to market
accounting for derivative activities; (e) unrealized items decreasing net
income (including the non-cash impact of restructuring; decommissioning and
asset impairments in the periods presented); (f) other non-recurring expenses
reducing net income which do not represent a cash item for such period; and
(g) all non-recurring restructuring charges associated with the Penreco
acquisition minus (3)(a) tax credits; (b) unrealized items increasing net
income (including the non-cash impact of restructuring, decommissioning and
asset impairments in the periods presented); (c) unrealized gains from mark to
market accounting for derivative activities; and (d) other non-cash recurring
expenses and unrealized items that reduced net income for a prior period, but
represent a cash item in the current period. We are required to report
Adjusted EBITDA to our lenders under our credit facilities and it is used to
determine our compliance with the consolidated leverage and interest coverage
tests thereunder.
We believe that Distributable Cash Flow provides additional information for
investors to evaluate the Partnership's ability to declare and pay
distributions to unitholders.
We define Distributable Cash Flow as Adjusted EBITDA less replacement capital
expenditures, cash interest paid (excluding capitalized interest) and income
tax expense.
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands, except per unit data)
Sales $492,431 $724,371 $1,350,735 $1,990,315
Cost of sales 451,275 647,397 1,212,241 1,817,625
------- ------- --------- ---------
Gross profit 41,156 76,974 138,494 172,690
------ ------ ------- -------
Operating costs and
expenses:
Selling, general
and administrative 7,437 11,995 23,697 29,666
Transportation 18,519 21,656 49,761 66,685
Taxes other than
income taxes 1,167 1,324 3,156 3,386
Other 191 393 888 957
--- --- --- ---
Operating income 13,842 41,606 60,992 71,996
------ ------ ------ ------
Other income
(expense):
Interest expense (8,243) (10,670) (25,333) (24,373)
Debt extinguishment
costs - - - (898)
Realized gain
(loss) on derivative
instruments 4,045 (12,621) 3,213 (12,971)
Unrealized gain
(loss) on derivative
instruments (4,485) (30,892) 17,672 (13,866)
Gain on sale of
mineral rights - - - 5,770
Other (1,271) 210 (2,856) 551
------- --- ------- ---
Total other income
(expense) (9,954) (53,973) (7,304) (45,787)
------- -------- ------- --------
Net income (loss)
before income
taxes 3,888 (12,367) 53,688 26,209
Income tax expense (79) 148 70 308
---- --- -- ---
Net income (loss) $3,967 $(12,515) $53,618 $25,901
====== ========= ======= =======
Calculation of
common unitholders'
interest in net
income (loss):
Net income (loss) $3,967 $(12,515) $53,618 $25,901
Less:
General partner's
interest in net
income (loss) 79 (250) 1,070 518
Subordinated
unitholders'
interest in net
income (loss) 1,573 (4,969) 21,265 10,292
----- ------- ------ ------
Net income (loss)
available to
common unitholders $2,315 $(7,296) $31,283 $15,091
====== ======== ======= =======
Weighted average
number of common
units outstanding -
basic and
diluted 19,166 19,166 19,166 19,166
====== ====== ====== ======
Weighted average
number of
subordinated units
outstanding -
basic and diluted 13,066 13,066 13,066 13,066
====== ====== ====== ======
Common and
subordinated
unitholders' basic
and diluted net
income (loss) per
unit 0.12 (0.38) 1.63 0.79
==== ====== ==== ====
Cash distributions
declared per
common and
subordinated unit $0.45 $0.45 $1.35 $1.53
===== ===== ===== =====
Note: The Partnership has adopted the requirements under ASC 260-10,
Earnings per Share (formerly EITF Issue No. 07-4, Application of the Two-
Class Method under FASB Statement No. 128 to Master Limited Partnerships),
and applied it retrospectively to the period ended September 30, 2008 for
the calculation of common unitholders' interest in net income (loss) and
its basic and diluted net income (loss) per unit, therefore the September
30, 2008 amounts differ from what was previously reported.
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2009 December 31, 2008
------------------ -----------------
(Unaudited)
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $2,567 $48
Accounts receivable 128,259 109,556
Inventories 131,708 118,524
Derivative assets 38,505 71,199
Prepaid expenses and other
current assets 2,777 5,824
----- -----
Total current assets 303,816 305,151
Property, plant and equipment,
net 638,829 659,684
Goodwill 48,335 48,335
Other intangible assets, net 40,945 49,502
Other noncurrent assets, net 16,107 18,390
------ ------
Total assets $1,048,032 $1,081,062
========== ==========
LIABILITIES AND
PARTNERS' CAPITAL
Current liabilities:
Accounts payable $94,471 $87,460
Accounts payable - related
party 37,682 6,395
Other current liabilities 19,864 23,360
Current portion of long-term
debt 4,670 4,811
Derivative liabilities 5,269 15,827
----- ------
Total current liabilities 161,956 137,853
Pension and postretirement
benefit obligations 10,379 9,717
Other long-term liabilities 1,116 -
Long-term debt, less current
portion 424,965 460,280
------- -------
Total liabilities 598,416 607,850
------- -------
Commitments and contingencies
Partners' capital:
Partners' capital 426,895 417,646
Accumulated other comprehensive
income 22,721 55,566
------ ------
Total partners' capital 449,616 473,212
------- -------
Total liabilities and partners'
capital $1,048,032 $1,081,062
========== ==========
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended
September 30,
-------------
2009 2008
---- ----
(In thousands)
Operating activities
Net income $53,618 $25,901
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 48,890 42,369
Amortization of turnaround costs 5,692 1,041
Provision for doubtful accounts (766) 1,320
Non-cash debt extinguishment costs - 898
Unrealized gain on derivative instruments (17,672) 13,866
Gain on sale of mineral rights - (5,770)
Other non-cash activity 3,561 305
Changes in assets and liabilities:
Accounts receivable (17,937) (64,410)
Inventories (13,184) 84,606
Prepaid expenses and other current assets (953) 4,641
Derivative activity 6,680 7,510
Deposits 4,000 -
Other assets (4,539) (1,985)
Accounts payable 38,298 (39,473)
Accrued salaries, wages and benefits 1,002 1,621
Taxes payable 741 1,996
Other current liabilities 1,086 518
Pension and postretirement benefit obligations 945 725
Other long-term liabilities 1,116 -
----- ---
Net cash provided by operating activities 110,578 75,679
------- ------
Investing activities
Additions to property, plant and equipment (20,718) (161,811)
Acquisition of Penreco, net of cash acquired - (269,118)
Settlement of derivative instruments - (6,042)
Proceeds from sale of mineral rights - 6,065
Proceeds from disposal of property and equipment 793 24
--- --
Net cash used in investing activities (19,925) (430,882)
-------- ---------
Financing activities
Proceeds from (Repayments of) borrowings, net -
revolving credit facility (33,435) 85,933
Repayments of borrowings - prior term loan
credit facility - (30,099)
Proceeds from (Repayments of) borrowings, net -
existing term loan credit facility (2,888) 358,647
Debt issuance costs - (9,633)
Payments on capital lease obligations (875) (309)
Change in bank overdraft (6,325) 2,190
Common units repurchased for vested phantom unit
grants (164) (115)
Distributions to partners (44,447) (51,339)
-------- --------
Net cash provided by (used in) financing
activities (88,134) 355,275
-------- -------
Net increase in cash and cash equivalents 2,519 72
Cash and cash equivalents at beginning of period 48 35
-- --
Cash and cash equivalents at end of period $2,567 $107
====== ====
Supplemental disclosure of cash flow information
Interest paid $23,124 $24,180
Income taxes paid $91 $19
=== ===
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA, AND
DISTRIBUTABLE CASH FLOW
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Unaudited Unaudited
(In thousands)
Reconciliation of Net Income
(Loss) to EBITDA and Adjusted
EBITDA:
Net income (loss) $3,967 $(12,515) $53,618 $25,901
Add:
Interest expense and debt
extinguishment costs 8,243 10,670 25,333 25,271
Depreciation and
amortization 15,578 15,289 46,396 39,868
Income tax expense (79) 148 70 308
---- --- -- ---
EBITDA $27,709 $13,592 $125,417 $91,348
------- ------- -------- -------
Add:
Unrealized (gain) loss from
mark to market accounting
for hedging activities $11,365 $33,429 $(10,430) $15,184
Prepaid non-recurring
expenses and accrued
non-recurring expenses,
net of cash outlays 3,449 4,537 4,271 7,905
----- ----- ----- -----
Adjusted EBITDA $42,523 $51,558 $119,258 $114,437
------- ------- -------- --------
Less:
Replacement capital
expenditures (1) (4,995) (987) (12,739) (5,417)
Cash interest expense (2) (7,423) (9,115) (23,124) (17,338)
Income tax expense 79 (148) (70) (308)
-- ----- ---- -----
Distributable Cash Flow $30,184 $41,308 $83,325 $91,374
------- ------- ------- -------
1. Replacement capital expenditures are defined as those capital
expenditures which do not increase operating capacity or sales from
existing levels.
2. Represents cash interest paid by the Partnership, excluding capitalized
interest.
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
RECONCILIATION OF ADJUSTED EBITDA AND EBITDA TO NET CASH PROVIDED BY
OPERATING ACTIVITIES
Nine Months Ended
September 30,
-------------
2009 2008
---- ----
Unaudited
(In thousands)
Reconciliation of Adjusted EBITDA and
EBITDA to net cash provided by operating
activities:
Adjusted EBITDA $119,258 $114,437
Add:
Unrealized gain (loss) from mark
to market accounting for
hedging activities 10,430 (15,184)
Prepaid non-recurring expenses
and accrued non-recurring
expenses, net of cash outlays (4,271) (7,905)
------- -------
EBITDA $125,417 $91,348
======== =======
Add:
Interest expense and debt
extinguishment costs, net (22,597) (22,679)
Unrealized (gain) loss on
derivative instruments (17,672) 13,866
Income taxes (70) (308)
Provision for doubtful accounts (766) 1,320
Debt extinguishment costs - 898
Changes in assets and liabilities:
Accounts receivable (17,937) (64,410)
Inventory (13,184) 84,606
Other current assets 3,047 4,641
Derivative activity 6,680 7,510
Accounts payable 38,298 (39,473)
Other current liabilities 2,829 4,135
Other, including changes in
noncurrent assets and liabilities 6,533 (5,775)
----- -------
Net cash provided by operating
activities $110,578 $75,679
======== =======
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
UPDATE ON EXISTING COMMODITY DERIVATIVE INSTRUMENTS
September 30, 2009
Fuel Products Segment
The following tables provide information about our derivative instruments
related to our fuel products segment as of September 30, 2009:
Crude Oil Swap Contracts by Barrels
Expiration Dates Purchased BPD ($/Bbl)
--------------------------- --------- --- -------
Fourth Quarter 2009 2,070,000 22,500 66.26
Calendar Year 2010 7,300,000 20,000 67.29
Calendar Year 2011 5,384,000 14,751 76.24
--------- -----
Totals 14,754,000
Average price $70.41
Diesel Swap Contracts by
Expiration Dates Barrels Sold BPD ($/Bbl)
----------------- ------------ --- ------
Fourth Quarter 2009 1,196,000 13,000 80.51
Calendar Year 2010 4,745,000 13,000 80.41
Calendar Year 2011 2,371,000 6,496 90.58
--------- -----
Totals 8,312,000
Average price $83.32
Jet Fuel Swap Contracts by
Expiration Dates Barrels Sold BPD ($/Bbl)
----------------- ------------ --- -------
Calendar Year 2011 2,284,000 6,258 $87.88
--------- ------
Totals 2,284,000
Average price $87.88
Gasoline Swap Contracts by
Expiration Dates Barrels Sold BPD ($/Bbl)
----------------- ------------ --- -------
Fourth Quarter 2009 874,000 9,500 73.83
Calendar Year 2010 2,555,000 7,000 75.28
Calendar Year 2011 729,000 1,997 83.53
------- -----
Totals 4,158,000
Average price $76.42
The following table provides a summary of these derivatives and implied
crack spreads for the crude oil, diesel and gasoline swaps disclosed
above, all of which are designated as hedges.
Swap Contracts by Barrels Implied Crack
Expiration Dates Sold BPD Spread ($/Bbl)
----------------- ---- --- --------------
Fourth Quarter 2009 2,070,000 22,500 11.43
Calendar Year 2010 7,300,000 20,000 11.32
Calendar Year 2011 5,384,000 14,751 12.19
--------- -----
Totals 14,754,000
Average price $11.65
At September 30, 2009, the Company had the following derivatives related
to crude oil sales and gasoline purchases in its fuel products segment,
none of which are designated as hedges.
Crude Oil Swap Contracts by Barrels
Expiration Dates Sold BPD ($/Bbl)
----------------- ---- --- -------
Fourth Quarter 2009 460,000 5,000 62.66
Calendar Year 2010 547,500 1,500 58.25
------- -----
Totals 1,007,500
Average price $60.26
Gasoline Swap Contracts by Barrels
Expiration Dates Purchased BPD ($/Bbl)
----------------- --------- --- -------
Fourth Quarter 2009 460,000 5,000 60.53
Calendar Year 2010 547,500 1,500 58.42
------- -----
Totals 1,007,500
Average price $59.38
To summarize, at September 30, 2009, the Company had the following crude
oil and gasoline derivative instruments not designated as hedges in its
fuel products segment. These trades were used to economically lock in a
portion of the mark-to-market valuation gain for the above crack spread
trades.
Swap Contracts by Expiration Barrels Implied Crack
Dates Purchased BPD Spread ($/Bbl)
------ --------- --- --------------
Fourth Quarter 2009 460,000 5,000 (2.13)
Calendar 2010 547,500 1,500 0.17
------- ----
Totals 1,007,500
Average price $(0.88)
At September 30, 2009, the Company had the following put options related
to jet fuel crack spreads in its fuel products segment, none of which are
designated as hedges.
Average Average
Sold Bought
Jet Fuel Put/Option Crack Spread Put Put
Contracts by Expiration Dates Barrels BPD ($/Bbl) ($/Bbl)
------------------------------ ------- --- ------- -------
January 2011 216,500 6,984 $4.00 $6.00
February 2011 197,000 7,036 4.00 6.00
March 2011 216,500 6,984 4.00 6.00
------- ---- ----
Totals 630,000
Average price $4.00 $6.00
Specialty Products Segment
At September 30, 2009, the Company had the following crude oil derivative
instruments related to crude oil purchases in its specialty products
segment, none of which are designated as hedges.
Average Average Average
Crude Oil Put/Swap/Call Bought Put Swap Sold Call
Contracts by Expiration Dates Barrels BPD ($/Bbl) ($/Bbl) ($/Bbl)
------------------------------ ------- --- ------- ------- ------
October 2009 248,000 8,000 $57.33 $71.09 $81.09
November 2009 150,000 5,000 56.17 69.64 79.64
December 2009 62,000 2,000 56.30 68.55 78.55
------ ----- ----- -----
Totals 460,000
Average price $56.81 $70.27 $80.27
SOURCE Calumet Specialty Products Partners, L.P.
Jennifer Straumins, Investor Relations of Calumet Specialty Products Partners,
L.P., +1-317-328-5660
