CALUMET SPECIALTY PRODUCTS PARTNERS, L.P. INDIANAPOLIS, May 4, 2017 /PRNewswire/ -- Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT) (the "Partnership," "Calumet," "we," "our" or "us"), a leading independent producer of specialty hydrocarbon and fuels products, today reported results for the first quarter ended March 31, 2017, as follows:
Three Months Ended March 31,
2017 2016
---- ----
(Dollars in millions, except per
unit data)
Net loss $(6.2) $(67.7)
Limited partners'
interest basic and
diluted net loss per
unit $(0.08) $(0.87)
Adjusted EBITDA $78.7 $6.6
The Partnership's $6.2 million net loss and Adjusted EBITDA of $78.7 million for the first quarter 2017 included, but is not limited to, the impact of a favorable lower of cost or market ("LCM") inventory adjustment of $4.0 million.
For detailed information on Adjusted EBITDA and a reconciliation of Adjusted EBITDA to the nearest comparable GAAP measure for the periods presented above, please see the sections of this release entitled "Non-GAAP Financial Measures" and "Reconciliation of Net loss to EBITDA, Adjusted EBITDA and Distributable Cash Flow."
Management Commentary
"Our solid performance this quarter shows that we continue to turn the corner on our transformation, as we successfully execute against the strategic goals we set last year," said Tim Go, Chief Executive Officer of Calumet. "We believe that our ongoing efforts to eliminate waste, reduce costs, and capture increased margins across our business have begun to positively impact our financial performance. This was evident by our decreased net loss, solid improvement in Adjusted EBITDA and improved sequential gross margins in both the specialty and fuels businesses. We remain focused on further reducing the costs of doing business, while simultaneously growing our sales volumes and creating innovative new products, all of which should help us drive greater profitability in the future."
Go continued, "I am pleased to announce that Calumet is introducing its first ever Group III synthetic base oil product, CALPAR(TM) 4GIII. The Group III classification characterizes the most highly refined base oil derived from crude oil, providing viscosity index levels above 120 and very high saturate content. CALPAR(TM) 4GIII is designed for extensive use in engine oil formulations to improve gas mileage, reduce emissions and extend oil change intervals. Our proprietary technology was developed in-house by our product development team and shows the innovation capabilities of our organization. In fact, with the launch of CALPARTM 4GIII, Calumet becomes the first virgin producer of Group III base oils based in the United States."
Go concluded, "We remain encouraged by the sequential and year-over-year progress we have made thus far through our self-help initiatives, including lowering our cost of compliance on RINs, and believe that the results of our efforts will continue to flow through to our financial performance and position the Company towards sustainable growth in the coming quarters."
Specialty Products Segment | Results Summary
Three Months Ended March 31,
2017 2016
---- ----
(Dollars in millions, except
per barrel data)
Specialty products segment
gross profit $82.3 $99.3
Specialty products segment
Adjusted EBITDA $45.6 $58.5
Specialty products segment
gross profit per barrel $31.85 $42.08
During the first quarter 2017, total specialty products segment sales volumes improved by nearly 10% compared to year ago levels, with volume growth exhibited across lubricating oils, waxes and branded and packaged specialty products categories. Gross profit per barrel increased sequentially to $31.85 this period compared to $25.30 in the fourth quarter 2016. Adjusted EBITDA of $45.6 million also increased sequentially from $28.0 million in the fourth quarter of 2016. The financial impact from price adjustments during the period were partially offset by periodic downtime for maintenance activities at two facilities. Both Adjusted EBITDA and gross profit per barrel figures were lower than the same period in the prior year, primarily due to elevated margin capture in the 2016 period as crude oil prices trended rapidly downward during the first quarter of 2016. First quarter Adjusted EBITDA also benefited from a $2.7 million favorable LCM inventory adjustment.
Fuel Products Segment | Results Summary
Three Months Ended March 31,
2017 2016
---- ----
(Dollars in millions, except per
barrel data)
Fuel products segment gross
profit (loss) $47.2 $(19.0)
Fuel products segment Adjusted
EBITDA $36.8 $(46.0)
Fuel products segment gross
profit (loss) per barrel
(including hedging
activities) $5.19 $(2.12)
Fuel products segment gross
profit (loss) per barrel
(excluding hedging
activities) $5.19 $(2.43)
During the first quarter 2017, total fuel products segment sales volumes improved by nearly 2% compared to year-ago levels, with volume growth exhibited across diesel, asphalt and jet fuel categories. Gross profit and Adjusted EBITDA also demonstrated marked improvement compared to the year-ago period, driven by year-over-year increases in benchmark refined product margins and decreased Renewable Identification Numbers ("RINs") compliance costs. Specifically, the year-over-year performance improvements were driven in part by the approximate 30% improvement in the benchmark Gulf Coast 2/1/1 crack spread and higher sales volume. The segment also benefited from the absence of losses from Dakota Prairie Refining, LLC, a joint venture refinery, which was sold during last year's first quarter, as well as by a decline in operating costs associated with RINs pricing. First quarter Adjusted EBITDA also benefited from a $2.7 million favorable LCM inventory adjustment.
Oilfield Services Segment | Results Summary
Three Months Ended March 31,
2017 2016
---- ----
(Dollars in millions)
Oilfield services segment
gross profit $10.0 $5.9
Oilfield services segment
Adjusted EBITDA $(3.7) $(5.9)
During the first quarter, the U.S. land-based rig count increased by approximately 33% on a year-over-year basis. Elevated drilling activity drove a 57% increase in revenue compared to the same period last year. The oilfield services segment's gross profit also grew meaningfully compared to both the prior year period and prior quarter. Adjusted EBITDA for the first quarter increased $2.2 million year-over-year, but declined sequentially due to an unfavorable LCM inventory adjustment of $1.4 million.
Partnership Liquidity
As of March 31, 2017, the Partnership had availability under its revolving credit facility of $358.0 million, based on a $471.0 million borrowing base, $73.8 million in outstanding standby letters of credit and $39.2 million in outstanding borrowings. In addition, the Partnership had $4.6 million of cash on hand as of March 31, 2017. The Partnership believes it will continue to have sufficient liquidity from cash on hand, cash flow from operations, borrowing capacity and other means by which to meet its financial commitments, debt service obligations, contingencies and anticipated capital expenditures.
Financial Guidance
Full-Year 2017 Capital Spending Forecast
Through the first quarter of 2017, total capital spending was $11.8 million, down over 70% compared to the same period in 2016. For the full-year 2017, the Partnership continues to anticipate total capital expenditures to come within range of its previously stated annual guidance of $120 to $140 million.
Full-Year 2017 RFS Compliance Impact Forecast
In conjunction with the Partnership's ongoing compliance with the Renewable Fuel Standard, the Partnership records its outstanding RINs obligation as a balance sheet liability. This liability is marked-to-market on a quarterly basis to reflect the market price of RINs on the last day of each quarter. The Partnership expects its gross estimated annual RINs obligation, which includes RINs that are required to be secured through either blending or through the purchase of RINs in the open market, will be up to 128 million RINs for the full-year 2017, excluding the potential for any hardship waivers that may or may not be granted by the U.S. Environmental Protection Agency to any of the Partnership's fuel refineries at a later time. Calumet expects to be able to satisfy a significant portion of its 2017 gross RINs obligation through internal blending and other self-help efforts.
Operations Summary
The following table sets forth information about our combined operations, excluding the results of the oilfield services segment. Facility production volume differs from sales volume due to changes in inventories and the sale of purchased fuel product blendstocks such as ethanol and biodiesel and the resale of crude oil in our fuel products segment.
Three Months Ended March
31,
2017 2016
---- ----
(In bpd)
Total sales volume (1) 129,856 124,440
Total feedstock runs (2) 132,165 128,385
Facility production: (3)
Specialty products:
Lubricating oils 15,160 13,854
Solvents 7,345 7,352
Waxes 1,477 1,335
Packaged and synthetic specialty
products (4) 2,721 2,125
Other 1,893 908
----- ---
Total 28,596 25,574
------
Fuel products:
Gasoline 37,568 38,043
Diesel 33,011 30,347
Jet fuel 6,763 5,676
Asphalt, heavy fuel oils and
other 29,413 28,240
------ ------
Total 106,755 102,306
------- -------
Total facility production (3) 135,351 127,880
======= =======
(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.
The increase in total sales
volume for the three months
ended March 31, 2017, as
compared to the same period in
2016, is due primarily to
increased sales volume of
lubricating oils, waxes and
branded and packaged products
as a result of improving market
conditions and increased sales
volume of fuel products
including diesel and asphalt as
a result of increased
production at the Great Falls
refinery from the expansion
project completed in the first
quarter 2016 and market
conditions.
(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.
The increase in total feedstock
runs for the three months ended
March 31, 2017, as compared to
the same period in 2016, is due
primarily to increased
feedstock runs at the Great
Falls refinery from the
expansion project completed in
the first quarter 2016 and
improved operational
reliability.
(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.
The change in total facility
production for the three months
ended March 31, 2017, as
compared to the same period in
2016, is due primarily to the
operational items discussed
above in footnote 2.
(4) Packaged and synthetic specialty
products include production at
the Royal Purple, Bel-Ray,
Calumet Packaging and Missouri
facilities.
Derivatives Summary
The following table summarizes the derivative activity reflected in the unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2017 and 2016:
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)
===== ======
Webcast Information
A conference call is scheduled for 1:00 p.m. ET on May 4, 2017, to discuss the financial and operational results for the first quarter of fiscal year 2017. Investors, analysts and members of the media interested in listening to the live presentation are encouraged to join a webcast of the call with accompanying presentation slides, available on the Partnership's website at http://www.calumetspecialty.com. Interested parties may also participate in the call by dialing (866) 584-9671 and entering the passcode 10792624. A replay of the conference call will be available a few hours after the event on the investor relations section of the Partnership's website, under the events section.
About the Partnership
Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT) is a master limited partnership and a leading independent producer of high-quality, specialty hydrocarbon products in North America. Calumet processes crude oil and other feedstocks into customized lubricating oils, solvents and waxes used in consumer, industrial and automotive products; produces fuel products including gasoline, diesel and jet fuel; and provides oilfield services and products to customers throughout the United States. Calumet is based in Indianapolis, Indiana, and operates thirteen manufacturing facilities located in northwest Louisiana, northwest Wisconsin, northern Montana, western Pennsylvania, Texas, New Jersey, Oklahoma and eastern Missouri.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements and information in this press release may constitute "forward-looking statements." The words "believe," "expect," "anticipate," "plan," "intend," "foresee," "should," "would," "could" or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. The statements discussed in this press release that are not purely historical data are forward-looking statements, including, but not limited to, the statements regarding (i) our expectation regarding our business outlook and cash flows, (ii) our expectation regarding anticipated capital expenditures and projected cost reduction initiatives, margin enhancing measures and low-to-no cost projects to reduce balance sheet leverage and increase cash flow, (iii) our access to capital to meet our financial commitments, debt service obligations, contingencies and anticipated capital expenditures, (iv) expected benefits to the Partnership from the distribution suspension and (v) estimated capital expenditures as a result of required audits or required operational changes or other environmental and regulatory liabilities. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our expectations for future sales and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause our actual results to differ materially from our historical experience and our present expectations or projections. Known material factors that could cause actual results to differ materially from those in the forward-looking statements include: the overall demand for specialty hydrocarbon products, fuels, other refined products and oilfield services; the level of foreign and domestic production of crude oil and refined products; our ability to produce specialty products, fuels products and products used in oilfield services that meet our customers' unique and precise specifications; the impact of fluctuations and rapid increases or decreases in crude oil and crack spread prices, including the resulting impact on our liquidity; the results of our hedging and other risk management activities; our ability to comply with financial covenants contained in our debt instruments; the availability of, and our ability to consummate, acquisition or combination opportunities and the impact of any completed acquisitions; labor relations; our access to capital to fund expansions, acquisitions and our working capital needs and our ability to obtain debt or equity financing on satisfactory terms; successful integration and future performance of acquired assets, businesses or third-party product supply and processing relationships; our ability to timely and effectively integrate the operations of acquired businesses or assets, particularly those in new geographic areas or in new lines of business; environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves; maintenance of our credit ratings and ability to receive open credit lines from our suppliers; demand for various grades of crude oil and resulting changes in pricing conditions; fluctuations in refinery capacity; our ability to access sufficient crude oil supply through long-term or month-to-month evergreen contracts and on the spot market; the effects of competition; continued creditworthiness of, and performance by, counterparties; the impact of current and future laws, rulings and governmental regulations, including guidance related to the Dodd-Frank Wall Street Reform and Consumer Protection Act; the costs of complying with the RFS, including the prices paid for RINs; shortages or cost increases of power supplies, natural gas, materials or labor; hurricane or other weather interference with business operations; our ability to access the debt and equity markets; accidents or other unscheduled shutdowns; and general economic, market or business conditions.
For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the Securities and Exchange Commission ("SEC"), including our latest Annual Report on Form 10-K and Current Reports on Form 8-K.
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
We include in this press release the non-GAAP financial measures EBITDA, Adjusted EBITDA and Distributable Cash Flow. We provide reconciliations of EBITDA, Adjusted EBITDA and Distributable Cash Flow to Net loss, our most directly comparable financial performance measure. We also provide a reconciliation of Distributable Cash Flow to Net cash used in operating activities, our most directly comparable liquidity measure. Both Net loss and Net cash used in operating activities are calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP").
EBITDA, Adjusted EBITDA and Distributable Cash Flow 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 believe that these non-GAAP measures are useful to analysts and investors as they exclude transactions not related to our core cash operating activities and provide metrics to analyze our ability to pay distributions. We believe that excluding these transactions allows investors to meaningfully trend and analyze the performance of our core cash operations.
We define "EBITDA" for any period as net income (loss) plus interest expense (including debt issuance and extinguishment costs), income taxes and depreciation and amortization.
We define "Adjusted EBITDA" for any period as: (1) net income (loss) plus; (2)(a) interest expense, (b) income taxes, (c) depreciation and amortization, (d) impairment, (e) unrealized losses from mark-to-market accounting for hedging activities, (f) realized gains under derivative instruments excluded from the determination of net income (loss), (g) non-cash equity based compensation expense and other non-cash items (excluding items such as accruals of cash expenses in a future period or amortization of a prepaid cash expense) that were deducted in computing net income (loss), (h) debt refinancing fees, premiums and penalties, (i) any net loss realized in connection with an asset sale that was deducted in computing net income (loss) and (j) all extraordinary, unusual or non-recurring items of gain or loss, or revenue or expense; minus (3)(a) unrealized gains from mark-to-market accounting for hedging activities, (b) realized losses under derivative instruments excluded from the determination of net income (loss) and (c) other non-recurring expenses and unrealized items that reduced net income (loss) for a prior period, but represent a cash item in the current period.
We define "Distributable Cash Flow" for any period as Adjusted EBITDA less replacement and environmental capital expenditures, turnaround costs, cash interest expense (consolidated interest expense less non-cash interest expense), income (loss) from unconsolidated affiliates, net of cash distributions and income tax expense (benefit).
The definition of Adjusted EBITDA presented in this release is consistent with the calculation of "Consolidated Cash Flow" contained in the indentures governing our 7.625% senior notes due January 15, 2022, that were issued in November 2013 (the "2022 Notes"), our 6.50% senior notes due April 15, 2021, that were issued in March 2014 (the "2021 Notes"), our 7.75% senior notes due April 15, 2023 (the "2023 Notes"), that were issued in March 2015 and our 11.50% senior secured notes due January 15, 2021 (the "2021 Secured Notes"), that were issued in April 2016. We are required to report Consolidated Cash Flow to the holders of our 2021 Notes, 2022 Notes, 2023 Notes and 2021 Secured Notes and Adjusted EBITDA to the lenders under our revolving credit facility, and these measures are used by them to determine our compliance with certain covenants governing those debt instruments. Please see our filings with the SEC, including our 2016 Annual Report on Form 10-K and Current Reports on Form 8-K, for additional details regarding the covenants governing our debt instruments.
The preliminary expected range for forward-looking non-GAAP Adjusted EBITDA contained in this press release is provided only on a non-GAAP basis, due to the inherent difficulty of calculating items that would be included in Net income (loss) on a GAAP basis. Adjusted EBITDA guidance that does not include certain charges and costs, which in future periods are generally expected to be similar to the kinds of charges and costs excluded from Adjusted EBITDA in prior periods, such as income taxes, interest and other non-operating items, depreciation and amortization, net unrealized gains and losses on derivatives, lower of cost or market adjustments, gains and losses on disposal or impairment of assets, equity-based compensation, revaluation of liabilities and items that are unusual in nature or infrequently occurring. The exclusion of these charges and costs in future periods will have a significant impact on Calumet's Adjusted EBITDA and Calumet is not able to provide a reconciliation of its Adjusted EBITDA guidance to net income (loss) without unreasonable efforts due to the uncertainty and variability of the nature and amount of these future charges and costs.
EBITDA, Adjusted EBITDA and Distributable Cash Flow should not be considered alternatives to net loss, operating income (loss), net cash used in operating activities or any other measure of financial performance presented in accordance with GAAP. In evaluating our performance as measured by EBITDA, Adjusted EBITDA and Distributable Cash Flow, management recognizes and considers the limitations of these measurements. EBITDA and Adjusted EBITDA do not reflect our obligations for the payment of income taxes, interest expense or other obligations such as capital expenditures. Accordingly, EBITDA, Adjusted EBITDA and Distributable Cash Flow are only three of several measurements that management utilizes. Moreover, our EBITDA, Adjusted EBITDA and Distributable Cash Flow may not be comparable to similarly titled measures of another company because all companies may not calculate EBITDA, Adjusted EBITDA and Distributable Cash Flow in the same manner. The following tables present a reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow to Net loss, our most directly comparable GAAP financial performance measure, and Distributable Cash Flow to net cash used in operating activities, our most directly comparable GAAP liquidity measure, for each of the periods indicated.
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except unit and per unit data)
Three Months Ended March 31,
2017 2016
---- ----
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
=== === ======
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
March 31, 2017 December 31, 2016
-------------- -----------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $4.6 $4.2
Accounts receivable, net 254.6 238.7
Inventories 436.4 386.2
Derivative assets 1.5 0.8
Prepaid expenses and other
current assets 13.5 11.0
---- ----
Total current assets 710.6 640.9
----- -----
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 $2,756.6 $2,725.2
======== ========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable $319.7 $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 505.1 498.2
----- -----
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 2,543.3 2,506.5
------- -------
Commitments and contingencies
Partners' capital:
Partners' capital 221.6 227.0
Accumulated other comprehensive
loss (8.3) (8.3)
---- ----
Total partners' capital 213.3 218.7
----- -----
Total liabilities and partners'
capital $2,756.6 $2,725.2
======== ========
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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 (16.0) (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 30.1 (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
==== ====
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
RECONCILIATION OF NET LOSS TO EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW
(In millions)
Three Months Ended March 31,
2017 2016
---- ----
Reconciliation of Net loss to
EBITDA, Adjusted EBITDA and
Distributable Cash Flow: (Unaudited)
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.
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
RECONCILIATION OF DISTRIBUTABLE CASH FLOW, ADJUSTED EBITDA AND EBITDA
TO NET CASH USED IN OPERATING ACTIVITIES
(In millions)
Three Months Ended March 31,
2017 2016
---- ----
Reconciliation of Distributable
Cash Flow, Adjusted EBITDA and
EBITDA to Net cash used in
operating activities: (Unaudited)
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 (16.0) (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 30.1 (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.
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
RECONCILIATION OF SEGMENT ADJUSTED EBITDA TO NET LOSS
(In millions)
Three Months Ended March 31,
2017 2016
---- ----
Reconciliation
of Segment
Adjusted EBITDA
to Net loss: (Unaudited)
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) $(67.7)
===== ======
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
SELECTED COMMODITY DERIVATIVE INSTRUMENTS
As of March 31, 2017
Fuel Products Segment
Calumet has entered into crude oil basis swaps to mitigate the risk of future changes in pricing differentials between Western Canadian Select ("WCS")
and New York Mercantile Exchange West Texas Intermediate ("NYMEX WTI"). The following table provides a summary of crude oil basis swap contracts as
of March 31, 2017, in the Partnership's fuel products segment:
Crude Oil Basis Barrels Average
Swap Contracts Purchased Differential
by Expiration to NYMEX WTI
Dates BPD
($/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)
Calumet has entered into derivative instruments to secure a percentage differential on WCS crude oil to NYMEX WTI. The following table provides a
summary of crude oil percentage basis swap contracts related to crude oil purchases as of March 31, 2017, in the Partnership's fuel products segment:
Crude Oil Barrels Fixed
Percentage Basis Purchased Percentage of
Swap Contracts NYMEX WTI
by Expiration
Dates BPD
(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%
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/calumet-specialty-products-partners-lp-reports-first-quarter-2017-results-300451159.html
SOURCE Calumet Specialty Products Partners, L.P.
