Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT) (the "Partnership" or "Calumet") reported a net loss for the quarter ended June 30, 2009 of $26.0 million compared to net income of $41.8 million for the quarter ended June 30, 2008. For the six months ended June 30, 2009, net income was $49.7 million compared to net income of $38.4 million for the six months ended June 30, 2008.
Earnings before interest expense, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA (as defined by the Partnership's credit agreements) were $(1.9) million and $26.6 million, respectively, for the quarter ended June 30, 2009 as compared to $65.5 million and $48.0 million, respectively, for the second quarter of 2008. Distributable Cash Flow for the quarter ended June 30, 2009 was $14.3 million as compared to $36.9 million for second quarter of 2008. The $21.3 million decrease in Adjusted EBITDA quarter over quarter is primarily due to a reduction in gross profit in our fuels segment, further discussed below. (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 decrease in net income of $67.8 million from the second quarter of 2008 was primarily due to a decrease in gross profit of $42.5 million and increased non-cash derivative losses of $31.0 million. Gross profit (loss) by segment is as follows:
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
------------- ------------
2009 2008 2009 2008
---- ---- ---- ----
(Dollars in millions)
Gross profit (loss)
by segment:
Specialty products $20.7 $21.5 $80.5 $43.8
Fuel products (2.3) 39.4 16.8 51.9
----- ----- ----- -----
Total gross profit $18.4 $60.9 $97.3 $95.7
===== ===== ===== =====
Specialty products segment gross profit quarter over quarter was primarily impacted by reduced LIFO inventory gains of $50.2 million resulting from the liquidation of lower cost inventory layers in 2008 as well as lower sales volumes in lubricating oils, solvents and waxes due to economic conditions impacting product demand. This reduction in specialty products segment gross profit was positively impacted by significant improvements in overall specialty product selling prices in relation to crude oil prices from the 2008 quarter. The decrease in our fuel products segment gross profit quarter over quarter was due primarily to lower overall fuel products crack spreads and reduced LIFO inventory gains of $10.0 million from the liquidation of lower cost inventory layers in 2008, partially offset by increased sales volume resulting from higher throughput rates at the Shreveport refinery and increased gains on derivatives of $9.7 million.
"The significant increase in crude oil prices and continued weakness in product demand resulted in a second quarter that was very challenging for all refiners, including Calumet. This has caused us to focus even more on placing specialty products in higher value applications and markets, developing additional specialty products, and controlling operating costs," said Bill Grube, Calumet's CEO and President.
Quarterly Distribution
On July 20, 2009, the Partnership declared a quarterly cash distribution of $0.45 per unit for the quarter ended June 30, 2009 on all outstanding units. The distribution will be paid on August 14, 2009 to unitholders of record as of the close of business on August 4, 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 Six Months
Ended June 30, Ended June 30,
-------------- --------------
2009 2008 2009 2008
---- ---- ---- ----
Sales volume (bpd):
Specialty products sales volume 26,033 30,110 25,315 31,099
Fuel products sales volume 32,769 30,264 31,309 28,791
------ ------ ------ ------
Total (1) 58,802 60,374 56,624 59,890
Total feedstock runs (bpd)(2)(3) 60,076 60,702 61,639 58,350
Facility production (bpd):
Specialty products:
Lubricating oils 9,659 12,943 10,649 13,032
Solvents 7,417 8,813 7,840 8,847
Waxes 870 1,983 985 2,019
Fuels 821 843 744 1,165
Asphalt and other by-products 7,680 7,171 7,708 6,965
------ ------ ------ ------
Total 26,447 31,753 27,926 32,028
------ ------ ------ ------
Fuel products:
Gasoline 9,322 8,304 10,195 8,758
Diesel 13,164 12,826 12,958 10,597
Jet fuel 6,878 5,752 7,111 5,825
By-products 748 559 512 381
------ ------ ------ ------
Total 30,112 27,441 30,776 25,561
------ ------ ------ ------
Total facility production (3) 56,559 59,194 58,702 57,589
====== ====== ====== ======
(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 decrease in feedstock runs for the three months ended June 30,
2009 is primarily due to decreases in feedstock run rates in the
second quarter of 2009 at all facilities except the Shreveport
refinery due to lower overall demand for specialty products.
The Shreveport refinery feedstock run rates increased due to the
completion of the refinery expansion project in May 2008.
(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 June 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 June 30, 2009, we had availability on our revolving credit facility of $73.0 million, based on a $203.9 million borrowing base, $35.1 million in outstanding standby letters of credit, and outstanding borrowings of $95.8 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, August 5, 2009, to discuss the financial and operational results for the second quarter of 2009. Anyone interested in listening to the presentation may call 866-700-6067 and enter passcode 12813905. For international callers, the dial-in number is 617-213-8834 and the passcode is 12813905.
The telephonic replay of the conference call is available in the United States by calling 888-286-8010 and entering passcode 36197648. International callers can access the replay by calling 617-801-6888 and entering passcode 36197648. The replay will be available beginning Wednesday, August 5, 2009, at approximately 4:00 p.m. until Wednesday, August 19, 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 Form 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
(In thousands, except per unit data)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------- ------------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands, except per unit data)
Sales $444,039 $671,220 $858,303 $1,265,943
Cost of sales 425,671 610,338 760,964 1,170,227
------- ------- ------- ---------
Gross profit 18,368 60,882 97,339 95,716
------- ------- ------- ---------
Operating costs and
expenses:
Selling, general
and administrative 6,939 9,419 16,261 17,671
Transportation 16,087 21,169 31,242 45,029
Taxes other than
income taxes 865 1,007 1,989 2,062
Other 278 341 697 564
------- ------- ------- ---------
Operating income (loss) (5,801) 28,946 47,150 30,390
------- ------- ------- ---------
Other income
(expense):
Interest expense (8,447) (8,536) (17,090) (13,702)
Debt extinguishment
costs - (373) - (898)
Realized gain (loss) on
derivative instruments 7,637 2,526 (833) (351)
Unrealized gain (loss)
on derivative
instruments (17,582) 13,456 22,158 17,025
Gain on sale of
mineral rights - 5,770 - 5,770
Other (1,727) 170 (1,585) 341
------- ------- ------- ---------
Total other income
(expense) (20,119) 13,013 2,650 8,185
------- ------- ------- ---------
Net income (loss)
before income taxes (25,920) 41,959 49,800 38,575
Income tax expense 67 151 149 159
------- ------- ------- ---------
Net income (loss) $(25,987) $41,808 $49,651 $38,416
------- ------- ------- ---------
Calculation of common
unitholders' interest
in net income (loss):
Net income (loss) $(25,987) $41,808 $49,651 $38,416
Less:
General partner's
interest in net
income (loss) (519) 836 991 768
Subordinated
unitholders'
interest in net
income (loss) (10,307) 16,606 19,692 15,261
------- ------- ------- ---------
Net income (loss)
available to common
unitholders $(15,161) $24,366 $28,968 $22,387
======= ======= ======= =========
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 (0.79) 1.27 1.51 1.17
======= ======= ======= =========
Cash distributions
declared per common and
subordinated unit $0.45 $0.45 $0.90 $1.08
======= ======= ======= =========
Note A: The Partnership has adopted Emerging Issues Task Force 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 June 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 June 30, 2008 amounts differ from what was
previously reported.
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2009 2008
---- ----
(Unaudited)
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $64 $48
Accounts receivable 113,725 109,556
Inventories 146,114 118,524
Derivative assets 39,499 71,199
Prepaid expenses and other current assets 3,304 5,824
------- -------
Total current assets 302,706 305,151
Property, plant and equipment, net 645,546 659,684
Goodwill 48,335 48,335
Other intangible assets, net 43,797 49,502
Other noncurrent assets, net 18,556 18,390
------- -------
Total assets $1,058,940 $1,081,062
========= =========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable $88,831 $87,460
Accounts payable - related party 28,370 6,395
Other current liabilities 19,394 23,360
Current portion of long-term debt 4,746 4,811
Derivative liabilities 5,641 15,827
------- -------
Total current liabilities 146,982 137,853
Pension and postretirement benefit
obligations 10,159 9,717
Long-term debt, less current portion 452,235 460,280
------- -------
Total liabilities 609,376 607,850
------- -------
Commitments and contingencies
Partners' capital:
Partners' capital 437,682 417,646
Accumulated other comprehensive income 11,882 55,566
------- -------
Total partners' capital 449,564 473,212
------- -------
Total liabilities and partners' capital $1,058,940 $1,081,062
========= =========
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Six Months Ended
June 30,
------------------------
2009 2008
---- ----
(In thousands)
Operating activities
Net income $49,651 $38,416
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 32,446 26,193
Amortization of turnaround costs 3,370 737
Provision for doubtful accounts (724) 565
Non-cash debt extinguishment costs - 898
Unrealized gain on derivative instruments (22,158) (17,025)
Gain on sale of mineral rights - (5,770)
Other non-cash activity 2,098 145
Changes in assets and liabilities:
Accounts receivable (3,445) (55,896)
Inventories (27,590) 60,756
Prepaid expenses and other current assets (1,480) 4,350
Derivative activity (201) 1,021
Deposits 4,000 -
Other assets (4,286) (447)
Accounts payable 23,346 56,903
Accrued salaries, wages and benefits 121 (1,393)
Taxes payable 1,355 1,973
Other current liabilities 304 (205)
Pension and postretirement benefit obligations 631 484
------ -------
Net cash provided by operating activities 57,438 111,705
Investing activities
Additions to property, plant and equipment (13,345) (152,547)
Acquisition of Penreco, net of cash acquired - (269,118)
Proceeds from sale of mineral rights - 6,065
Proceeds from disposal of property and equipment 737 -
------ -------
Net cash used in investing activities (12,608) (415,600)
Financing activities
Proceeds from (Repayments of) borrowings,
net - revolving credit facility (6,725) 18,969
Repayments of borrowings - prior term loan
credit facility - (30,099)
Proceeds from (Repayments of) borrowings,
net - existing term loan credit facility (1,925) 359,610
Debt issuance costs - (9,633)
Payments on capital lease obligations (618) -
Change in bank overdraft (5,746) 2,121
Common units repurchased for vested phantom
unit grants (164) (115)
Distributions to partners (29,636) (36,539)
------ -------
Net cash provided by (used in)financing activities (44,814) 304,314
------ -------
Net increase in cash and cash equivalents 16 419
Cash and cash equivalents at beginning of period 48 35
------ -------
Cash and cash equivalents at end of period $64 $454
====== =======
Supplemental disclosure of cash flow information
Interest paid $15,701 $14,645
Income taxes paid $41 $13
====== =======
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA,
AND DISTRIBUTABLE CASH FLOW
(In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------------
2009 2008 2009 2008
---- ---- ---- ----
Unaudited Unaudited
Reconciliation of Net Income
(Loss) to EBITDA and Adjusted
EBITDA:
Net income (loss) $(25,987) $41,808 $49,651 $38,416
Add:
Interest expense and debt
extinguishment costs 8,447 8,909 17,090 14,600
Depreciation and
amortization 15,529 14,651 30,818 24,579
Income tax expense 67 151 149 159
------ ------ ------ ------
EBITDA $(1,944) $65,519 $97,708 $77,754
------ ------ ------ ------
Add:
Unrealized (gain) loss
from mark to market
accounting for hedging
activities $24,608 $(18,721) $(21,797) $(18,244)
Prepaid non-recurring
expenses and accrued
non-recurring expenses,
net of cash outlays 3,968 1,173 822 3,368
------ ------ ------ ------
Adjusted EBITDA $26,632 $47,971 $76,733 $62,878
------ ------ ------ ------
Less:
Replacement capital
expenditures (1) (4,728) (2,943) (7,744) (4,430)
Cash interest expense (2) (7,548) (7,999) (15,701) (8,223)
Income tax expense (67) (151) (149) (159)
------ ------ ------ ------
Distributable Cash Flow $14,289 $36,878 $53,139 $50,066
------ ------ ------ ------
(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
(In thousands)
Six Months Ended
June 30,
----------------
2009 2008
---- ----
Reconciliation of Adjusted EBITDA and EBITDA
to net cash provided by operating activities:
Adjusted EBITDA $76,733 $62,878
Add:
Unrealized gain from mark to market
accounting for hedging activities 21,797 18,244
Prepaid non-recurring expenses and accrued
non-recurring expenses, net of cash outlays (822) (3,368)
------ -------
EBITDA $97,708 $77,754
====== =======
Add:
Interest expense and debt extinguishment
costs, net (15,277) (12,925)
Unrealized gain on derivative instruments (22,158) (17,025)
Income taxes (149) (159)
Provision for doubtful accounts (724) 565
Debt extinguishment costs - 898
Changes in assets and liabilities:
Accounts receivable (3,445) (55,896)
Inventory (27,590) 60,756
Other current assets 2,520 4,350
Derivative activity (201) 1,021
Accounts payable 23,346 56,903
Other current liabilities 1,780 375
Other, including changes in noncurrent
assets and liabilities 1,628 (4,912)
------ -------
Net cash provided by operating activities $57,438 $111,705
====== =======
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
UPDATE ON EXISTING COMMODITY DERIVATIVE INSTRUMENTS
June 30, 2009
Fuel Products Segment
The following tables provide information about our derivative instruments
related to our fuel products segment as of June 30, 2009:
Crude Oil Swap Contracts Barrels
by Expiration Dates Purchased BPD ($/Bbl)
------------------------ --------- --- -----
Third Quarter 2009 2,070,000 22,500 $66.26
Fourth Quarter 2009 2,070,000 22,500 66.26
Calendar Year 2010 7,300,000 20,000 67.29
Calendar Year 2011 4,970,000 13,616 76.06
---------- -----
Totals 16,410,000
Average price $69.69
Diesel Swap Contracts Barrels
by Expiration Dates Sold BPD ($/Bbl)
--------------------- ------- --- -----
Third Quarter 2009 1,196,000 13,000 $80.51
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 9,508,000
Average price $82.97
Jet Fuel Swap Contracts Barrels
by Expiration Dates Sold BPD ($/Bbl)
----------------------- ------- --- -----
Calendar Year 2011 1,870,000 5,123 $86.89
---------- -----
Totals 1,870,000
Average price $86.89
Gasoline Swap Contracts Barrels
by Expiration Dates Sold BPD ($/Bbl)
----------------------- ------- --- -----
Third Quarter 2009 874,000 9,500 $73.83
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 5,032,000
Average price $75.97
The following table provides a summary of these derivatives and implied
crack spreads for the crude oil, diesel and gasoline swaps disclosed
above, all of which are designated as hedges.
Swap Contract Barrels Implied Crack
by Expiration Dates Purchased BPD Spread ($/Bbl)
-------------------- --------- --- -------------
Third Quarter 2009 2,070,000 22,500 $11.43
Fourth Quarter 2009 2,070,000 22,500 11.43
Calendar Year 2010 7,300,000 20,000 11.32
Calendar Year 2011 4,970,000 13,616 12.05
---------- -----
Totals 16,410,000
Average price $11.58
At June 30, 2009, the Company had the following derivatives related
to crude oil sales and gasoline purchases in its fuel products segment,
none of which are designated as hedges.
Crude Oil Swap Contracts Barrels
by Expiration Dates Sold BPD ($/Bbl)
------------------------ ------- --- -----
Third Quarter 2009 460,000 5,000 $62.66
Fourth Quarter 2009 460,000 5,000 62.66
Calendar Year 2010 547,500 1,500 58.25
--------- -----
Totals 1,467,500
Average price $61.01
Gasoline Swap Contracts Barrels
by Expiration Dates Purchased BPD ($/Bbl)
----------------------- --------- --- -----
Third Quarter 2009 460,000 5,000 $60.53
Fourth Quarter 2009 460,000 5,000 60.53
Calendar Year 2010 547,500 1,500 58.42
--------- -----
Totals 1,467,500
Average price $59.74
To summarize at June 30, 2009, the Company had the following crude
oil and gasoline derivative instruments not designated as hedges in
its fuel products segment. These trades were used to economically lock
in a portion of the mark-to-market valuation gain for the above crack
spread trades.
Swap Contracts by Barrels Implied Crack
Expiration Dates Purchased BPD Spread ($/Bbl)
----------------- --------- --- -------------
Third Quarter 2009 460,000 5,000 $(2.13)
Fourth Quarter 2009 460,000 5,000 (2.13)
Calendar 2010 547,500 1,500 0.17
--------- -----
Totals 1,467,500
Average price $(1.27)
At June 30, 2009, the Company had the following put options related
to jet fuel crack spreads in its fuel products segment, none of which
are designated as hedges.
Average Average
Jet Fuel Put/Option Crack Spread Sold Put Bought Put
by Contracts by Expiration Dates Barrels BPD ($/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 $6.00
Specialty Products Segment
At June 30, 2009, the Company had the following crude oil derivative
instruments related to crude oil purchases in its specialty products
segment, none of which are designated as hedges.
Crude Oil Put/Swap/ Average Average Average
Call Contracts by Bought Put Swap Sold Call
Expiration Dates Barrels BPD ($/Bbl) ($/Bbl) ($/Bbl)
------------------- ------- --- ---------- ------- ---------
July 2009 31,000 1,000 $55.05 $69.50 $79.55
August 2009 248,000 8,000 56.34 69.42 79.42
September 2009 60,000 2,000 57.55 70.58 80.58
------- ----- ----- -----
Totals 339,000
Average price $56.43 $69.63 $79.64
First Call Analyst:
FCMN Contact: eric.smith@calumetspecialty.com
SOURCE: Calumet Specialty Products Partners, L.P.
CONTACT: Jennifer Straumins, Calumet Specialty Products Partners, L.P.,
+1-317-328-5660
Web Site: http://www.calumetspecialty.com/