Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT) (the "Partnership" or "Calumet") reported a net loss for the quarter ended June 30, 2010 of $0.9 million compared to a net loss of $26.0 million for the quarter ended June 30, 2009. These results include noncash unrealized derivative losses of $8.0 million and $17.6 million for the quarters ended June 30, 2010 and 2009, respectively. For the six months ended June 30, 2010, Calumet reported a net loss of $14.0 million compared to net income of $49.7 million for the same period in 2009. These results include noncash unrealized derivative losses of $15.8 million and gains of $22.2 million for the six months ended June 30, 2010 and 2009, respectively. Calumet reported net cash provided by operating activities of $42.6 million for the six months ended June 30, 2010 as compared to $57.4 million for the six months ended June 30, 2009.
Earnings before interest expense, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA (as defined by the Partnership's credit agreements) were $21.7 million and $27.8 million, respectively, for the quarter ended June 30, 2010 as compared to $(1.9) million and $26.6 million, respectively, for the same quarter in 2009. Distributable Cash Flow (as defined below) for the quarter ended June 30, 2010 was $10.7 million as compared to $14.3 million for the same quarter in 2009. The increase in Adjusted EBITDA quarter over quarter was primarily due to an increase in gross profit, discussed below, which was partially offset by an increase in realized losses on derivative instruments and an increase in cash outlays for prepaid and accrued expenses. (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.)
"We are pleased with our results for the second quarter considering our Shreveport refinery was down for an extended turnaround during the entire month of April 2010. We continue to focus on increased run rates to meet higher demand for our specialty products and to take advantage of higher fuel products margins during the summer months," said Bill Grube, Calumet's Chief Executive Officer and President. "We elected not to proceed with our unsecured notes offering in July 2010 due to current market conditions. We viewed the offering as an opportunity, not a requirement, to refinance our existing term loan facility with longer-term unsecured notes. We intend to continue monitoring the debt markets for the opportunity to complete a debt refinancing transaction under appropriate market conditions," said Grube.
The net loss reported for the quarter ended June 30, 2010 of $0.9 million improved by $25.1 million as compared to the $26.0 million loss reported for the same period in 2009. The improvement in net loss quarter over quarter was due primarily to an increase of $31.3 million in gross profit, discussed below, partially offset by increased realized derivative losses of $12.9 million. These results include noncash unrealized derivative losses of $8.0 million and $17.6 million for the quarters ended June 30, 2010 and 2009, respectively, which may or may not be realized in the future as the derivatives are settled.
Gross profit by segment is as follows for the three and six months ended June 30, 2010 and 2009:
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2010 2009 2010 2009
---- ---- ---- ----
(In thousands) (In thousands)
Specialty products $46,400 $20,735 $69,826 $80,558
Fuel products $3,219 $(2,367) $11,469 $16,781
------ ------- ------- -------
Total gross profit $49,619 $18,368 $81,295 $97,339
======= ======= ======= =======
The increase of $25.7 million in specialty products segment gross profit quarter over quarter was primarily due to an increase of 41.5% in the average selling price per barrel, while the average cost of crude oil per barrel increased by only 32.3%. Also, specialty products sales volumes increased 4.7%, due primarily to improvements in overall specialty products demand and the addition of sales volumes under our specialty products agreements with LyondellBasell which we entered into during the fourth quarter of 2009 (the "LyondellBasell Agreements").
The increase of $5.6 million in fuel products segment gross profit quarter over quarter was positively impacted by the average selling price per barrel of our fuel products increasing at rates comparable to the average cost of crude oil cost per barrel which increased by 31.7%, driven by improving crack spreads, combined with a $2.0 million increase in derivative gains on our fuel products hedges. Partially offsetting this increase in gross profit per barrel was a 22.6% decrease in fuel products sales volume. The sales volume decrease for the fuel products segment was due primarily to the decrease in production rates at our Shreveport refinery in the second quarter due to the extended turnaround at this refinery during the entire month of April 2010.
Quarterly Distribution
On July 9, 2010, the Partnership declared a quarterly cash distribution of $0.455 per unit for the quarter ended June 30, 2010 on all outstanding units. The distribution will be paid on August 13, 2010 to unitholders of record as of the close of business on August 3, 2010.
Operations Summary
The following table sets forth unaudited information about our combined operations. Facility production volume differs from sales volume due to changes in inventory.
Six Months Ended June
Three Months Ended June 30, 30,
--------------------------- ----------------------
2010 2009 2010 2009
---- ---- ---- ----
Sales volume
(bpd):
Specialty
products 27,264 26,033 27,271 25,315
Fuel products 25,362 32,769 24,895 31,309
--- ------ ------ ------
Total (1) 52,626 58,802 52,166 56,624
Total feedstock
runs (bpd) (2) 57,169 60,076 52,774 61,639
Facility
production
(bpd): (3)
Specialty
products:
Lubricating
oils 13,783 9,659 12,538 10,649
Solvents 8,904 7,417 8,490 7,840
Waxes 1,152 870 1,081 985
Fuels 978 821 1,063 744
Asphalt and
other by-
products 6,075 7,680 5,921 7,708
----- ----- ----- -----
Total 30,892 26,447 29,093 27,926
------ ------ ------ ------
Fuel products:
Gasoline 8,710 9,322 8,743 10,195
Diesel 10,875 13,164 9,936 12,958
Jet fuel 5,326 6,878 5,290 7,111
By-products 722 748 511 512
--- --- --- ---
Total 25,633 30,112 24,480 30,776
------ ------ ------ ------
Total facility
production (3) 56,525 56,559 53,573 58,702
====== ====== ====== ======
(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 represent 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, 2010 compared to the same period in 2009
is due primarily to the extended turnaround
at the Shreveport refinery during the entire month of April 2010,
partially offset by increased volumes related to the
LyondellBasell Agreements in 2010. Additionally, the decrease in
feedstock runs for the six months ended June 30,
2010 compared to the same period in 2009 is also due to the decision
to reduce crude oil run rates at our facilities
during the entire first quarter of 2010 because of the poor economics
of running additional barrels.
(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, including the LyondellBasell Agreements in 2010. The
difference between total facility 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. The decrease in facility production for the six months
ended June 30, 2010 compared to the same period in
2009 is a result of reduced feedstock runs during that period as
discussed in footnote 2 of this table. The increase in the
production of specialty products for the three and six months ended
June 30, 2010 compared to the same periods in 2009
is primarily the result of additional volumes under the
LyondellBasell Agreements and was partially offset by reduced
production levels as a result of reduced feedstock runs during those
periods, as discussed in footnote 2 of this table. The
reduction in production of fuel products for the three and six months
ended June 30, 2010 as compared to the same periods
in 2009 is primarily due to reduced feedstock runs at our Shreveport
refinery during those periods as discussed in footnote
2 of this table.
Credit Agreement Covenant Compliance
Compliance with the financial covenants under Calumet's credit agreements is measured quarterly based upon performance over the most recent four fiscal quarters. As of June 30, 2010, Calumet continued to be in compliance with all financial covenants under its credit agreements.
While assurances cannot be made regarding our future compliance with these financial covenants and subject to the inherent uncertainty of the crude oil pricing environment and general economic conditions, Calumet believes that it will continue to maintain compliance with such financial covenants.
Revolving Credit Facility Capacity
On June 30, 2010, Calumet had availability under its revolving credit facility of $112.5 million, based on a $228.5 million borrowing base, $66.9 million in outstanding standby letters of credit, and outstanding borrowings of $49.1 million. Calumet believes that it will have sufficient cash flow from operations and borrowing capacity to meet its financial commitments, minimum quarterly distributions to unitholders, debt service obligations, contingencies and anticipated capital expenditures. However, Calumet is subject to business and operational risks that could materially adversely affect its cash flows. A material decrease in Calumet's cash flow from operations or a significant, sustained decline in crude oil prices would likely produce a corollary material adverse effect on Calumet's borrowing capacity under its revolving credit facility and potentially Calumet's ability to comply with the covenants under Calumet's credit facilities. Substantial declines in crude oil prices, if sustained, may materially diminish Calumet's borrowing base, which is based in part on the value of Calumet's crude oil inventory, which could result in a material reduction in Calumet's borrowing capacity under Calumet's revolving credit facility. A significant increase in crude oil prices, if sustained, would likely result in increased working capital funded by borrowings under its 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 4, 2010, to discuss the financial and operational results for the second quarter of 2010. Anyone interested in listening to the presentation may call 866-510-0676 and enter passcode 44282717. For international callers, the dial-in number is 617-597-5361 and the passcode is 44282717.
The telephonic replay of the conference call is available in the United States by calling 888-286-8010 and entering passcode 92601824. International callers can access the replay by calling 617-801-6888 and entering passcode 92601824. The replay will be available beginning Wednesday, August 4, 2010, at approximately 4:00 p.m. until Wednesday, August 18, 2010.
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 quarterly and annual reconciliations of net income (loss) to EBITDA, Adjusted EBITDA and Distributable Cash Flow and (in the case of EBITDA and Adjusted EBITDA) an annual reconciliation 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, support our indebtedness and meet minimum quarterly
distributions;
-- 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 issuance and extinguishment costs), taxes and depreciation and amortization. We define Adjusted EBITDA to be Consolidated EBITDA as defined in our credit facilities. Consistent with that definition, Adjusted EBITDA means, for any period: (1) net income plus (2)(a) interest expense; (b) taxes; (c) depreciation and amortization; (d) unrealized losses from mark to market accounting for hedging activities; (e) unrealized items decreasing net income (including the non-cash impact of restructuring, decommissioning and asset impairments in the periods presented); and (f) other non-recurring expenses reducing net income which do not represent a cash item for such period; 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 hedging activities; and (d) other non-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 consolidated interest coverage tests thereunder.
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)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2010 2009 2010 2009
---- ---- ---- ----
Sales $514,652 $444,039 $999,269 $858,303
Cost of sales 465,033 425,671 917,974 760,964
------- ------- ------- -------
Gross profit 49,619 18,368 81,295 97,339
------ ------ ------ ------
Operating costs and
expenses:
Selling, general and
administrative 8,321 6,939 15,491 16,261
Transportation 19,956 16,087 40,202 31,242
Taxes other than income
taxes 1,098 865 2,123 1,989
Other 480 278 808 697
--- --- --- ---
Operating income (loss) 19,764 (5,801) 22,671 47,150
------ ------ ------ ------
Other income (expense):
Interest expense (7,277) (8,447) (14,711) (17,090)
Realized gain (loss) on
derivative instruments (5,297) 7,637 (5,858) (833)
Unrealized gain (loss) on
derivative instruments (8,008) (17,582) (15,766) 22,158
Other 9 (1,727) (50) (1,585)
--- ------ --- ------
Total other income
(expense) (20,573) (20,119) (36,385) 2,650
------- ------- ------- -----
Net income (loss) before
income taxes (809) (25,920) (13,714) 49,800
Income tax expense 98 67 260 149
--- --- --- ---
Net income (loss) $(907) $(25,987) $(13,974) $49,651
===== ======== ======== =======
Allocation of net income
(loss) :
Net income (loss) $(907) $(25,987) $(13,974) $49,651
Less:
General partner's
interest in net income
(loss) (18) (519) (279) 991
--- ---- ---- ---
Net income (loss)
available to limited
partners $(889) $(25,468) $(13,695) $48,660
===== ======== ======== =======
Weighted average limited
partner units
outstanding - basic and
diluted 35,359 32,232 35,355 32,232
====== ====== ====== ======
Common and subordinated
unitholders' basic and
diluted net income
(loss) per unit $(0.03) $(0.79) $(0.39) $1.51
====== ====== ====== =====
Cash distributions
declared per common and
subordinated unit $0.455 $0.45 $0.91 $0.90
====== ===== ===== =====
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31,
June 30, 2010 2009
------------- -------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $67 $49
Accounts receivable, net 150,182 122,768
Inventories 146,833 137,250
Derivative assets 932 30,904
Prepaid expenses and other current assets 6,407 8,672
----- -----
Total current assets 304,421 299,643
Property, plant and equipment, net 621,043 629,275
Goodwill 48,335 48,335
Other intangible assets, net 33,689 38,093
Other noncurrent assets, net 22,599 16,510
------ ------
Total assets $1,030,087 $1,031,856
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable $160,679 $109,976
Other current liabilities 17,899 20,165
Current portion of long-term debt 4,836 5,009
Derivative liabilities 10,449 4,766
------ -----
Total current liabilities 193,863 139,916
Pension and postretirement benefit
obligations 8,955 9,433
Other long-term liabilities 1,097 1,111
Long-term debt, less current portion 404,006 396,049
------- -------
Total liabilities 607,921 546,509
Partners' capital:
Partners' capital 427,503 472,703
Accumulated other comprehensive income
(loss) (5,337) 12,644
------ ------
Total partners' capital 422,166 485,347
------- -------
Total liabilities and partners' capital $1,030,087 $1,031,856
========== ==========
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Six Months Ended
June 30,
--------
2010 2009
---- ----
Operating activities
Net income (loss) $(13,974) $49,651
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 31,408 32,446
Amortization of turnaround costs 4,100 3,370
Provision for doubtful accounts (91) (724)
Unrealized (gain) loss on derivative
instruments 15,766 (22,158)
Other non-cash activities 1,114 2,098
Changes in assets and liabilities:
Accounts receivable (27,323) (3,445)
Inventories (9,583) (27,590)
Prepaid expenses and other current assets 2,265 2,520
Derivative activity 1,443 (201)
Other assets (8,548) (4,286)
Accounts payable 48,584 23,346
Other liabilities (2,580) 1,780
Pension and postretirement benefit obligations (14) 631
--- ---
Net cash provided by operating activities 42,567 57,438
Investing activities
Additions to property, plant and equipment (17,017) (13,345)
Proceeds from disposal of property, plant and
equipment 121 737
--- ---
Net cash used in investing activities (16,896) (12,608)
Financing activities
Proceeds from (Repayments of) borrowings -
revolving credit facility, net 9,240 (6,725)
Repayment of borrowings - term loan credit
facility (1,925) (1,925)
Payments on capital lease obligation (743) (618)
Proceeds from public offerings, net 793 -
Contribution from Calumet GP, LLC 18 -
Change in bank overdraft - (5,746)
Common units repurchased for vested phantom
unit grants (248) (164)
Distributions to partners (32,788) (29,636)
------- -------
Net cash used in financing activities (25,653) (44,814)
------- -------
Net decrease in cash and cash equivalents 18 16
Cash and cash equivalents at beginning of
period 49 48
--- ---
Cash and cash equivalents at end of period $67 $64
=== ===
Supplemental disclosure of cash flow
information
Interest paid $13,074 $15,701
Income taxes paid $89 $41
=== ===
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,
--------
2010 2009 2010 2009
---- ---- -- ----
(Unaudited) (Unaudited)
Reconciliation of
Net Income (Loss)
to EBITDA,
Adjusted EBITDA
and Distributable
Cash Flow:
Net income (loss) $(907) $(25,987) $(13,974) $49,651
Add:
Interest expense 7,277 8,447 14,711 17,090
Depreciation and
amortization 15,242 15,529 29,793 30,818
Income tax expense 98 67 260 149
--- --- --- ---
EBITDA $21,710 $(1,944) $30,790 $97,708
------- ------- ------- -------
Add:
Unrealized (gain)
loss from mark to
market accounting
for hedging
activities $8,380 $24,608 $17,208 $(21,797)
Prepaid non-
recurring expenses
and accrued non-
recurring
expenses, net of
cash outlays (2,261) 3,968 622 822
------ ----- --- ---
Adjusted EBITDA $27,829 $26,632 $48,620 $76,733
------- ------- ------- -------
Less:
Replacement capital
expenditures (1) (10,890) (4,728) (16,339) (7,744)
Cash interest
expense (2) (6,130) (7,548) (13,074) (15,701)
Income tax expense (98) (67) (260) (149)
--- --- ---- ----
Distributable Cash
Flow $10,711 $14,289 $18,947 $53,139
======= ======= ======= =======
(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,
--------
2010 2009
---- ----
(Unaudited) (Unaudited)
Reconciliation of Adjusted EBITDA and EBITDA
to net cash provided by operating
activities:
Adjusted EBITDA $48,620 $76,733
Add:
Unrealized gain (loss) from mark to market
accounting for hedging activities (17,208) 21,797
Prepaid non-recurring expenses and accrued
non-recurring expenses, net of cash
outlays (622) (822)
---- ----
EBITDA $30,790 $97,708
======= =======
Add:
Cash interest expense (12,805) (15,277)
Unrealized (gain) loss on derivative
instruments 15,766 (22,158)
Income tax expense (260) (149)
Provision for doubtful accounts (91) (724)
Changes in assets and liabilities:
Accounts receivable (27,323) (3,445)
Inventory (9,583) (27,590)
Other current assets 2,265 2,520
Derivative activity 1,443 (201)
Accounts payable 48,584 23,346
Other liabilities (2,580) 1,780
Other, including changes in noncurrent
assets and liabilities (3,639) 1,628
------ -----
Net cash provided by operating activities $42,567 $57,438
======= =======
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
UPDATE ON EXISTING COMMODITY DERIVATIVE INSTRUMENTS
June 30, 2010
Fuel Products Segment
The following tables provide information about our derivative instruments related to our fuel products segment as of June 30, 2010:
Barrels BPD Average
Crude Oil Swap Contracts by Expiration Dates Purchased --- Swap
-------------------------------------------- --------- ($/Bbl)
-------
Third Quarter 2010 1,871,000 20,337 $67.41
Fourth Quarter 2010 1,840,000 20,000 67.29
Calendar Year 2011 5,796,000 15,879 76.71
Calendar Year 2012 3,557,000 9,719 85,99
--------- -----
Totals 13,064,000
Average price $76.58
Barrels
Diesel Swap Contracts by Expiration Dates Sold BPD Average
----------------------------------------- ------- --- Swap
($/Bbl)
-------
Third Quarter 2010 1,196,000 13,000 $80.41
Fourth Quarter 2010 1,196,000 13,000 80.41
Calendar Year 2011 2,371,000 6,496 90.58
Calendar Year 2012 732,000 2,000 98.70
------- -----
Totals 5,495,000
Average price $87.23
Barrels
Jet Fuel Swap Contracts by Expiration Dates Sold BPD Average
------------------------------------------- ------- --- Swap
($/Bbl)
-------
Calendar Year 2011 2,696,000 7,386 $88.86
Calendar Year 2012 2,688,500 7,346 99.04
--------- -----
Totals 5,384,500
Average price $93.94
Barrels
Gasoline Swap Contracts by Expiration Dates Sold BPD Average
------------------------------------------- ------- --- Swap
($/Bbl)
-------
Third Quarter 2010 675,000 7,337 $75.59
Fourth Quarter 2010 644,000 7,000 75.28
Calendar Year 2011 729,000 1,997 83.53
Calendar Year 2012 136,500 373 89.04
------- -----
Totals 2,184,500
Average price $78.99
The following table provides a summary of these derivatives and implied crack spreads for the crude oil, diesel and gasoline swaps disclosed above, all of which are designated as hedges.
Barrels BPD Implied
Swap Contracts by Expiration Dates Purchased --- Crack
---------------------------------- --------- Spread
($/Bbl)
-------
Third Quarter 2010 1,871,000 20,337 $11.26
Fourth Quarter 2010 1,840,000 20,000 11.32
Calendar Year 2011 5,796,000 15,879 12.14
Calendar Year 2012 3,557,000 9,719 12.60
--------- ----- -----
Totals 13,064,000
Average price $12.02
At June 30, 2010, the Partnership had the following derivatives related to crude oil sales and gasoline purchases in its fuel products segment, none of which are designated as hedges.
Barrels
Crude Oil Swap Contracts by Expiration Dates Sold BPD Average
-------------------------------------------- ------- --- Swap
($/Bbl)
-------
Third Quarter 2010 138,000 1,500 $58.25
Fourth Quarter 2010 138,000 1,500 58.25
------- -----
Totals 276,000
Average price $58.25
Barrels BPD Average
Gasoline Swap Contracts by Expiration Dates Purchased --- Swap
------------------------------------------- --------- ($/Bbl)
-------
Third Quarter 2010 138,000 1,500 $58.42
Fourth Quarter 2010 138,000 1,500 58.42
------- -----
Totals 276,000
Average price $58.42
To summarize, at June 30, 2010, the Partnership had the following crude oil and gasoline derivative instruments not designated as hedges in its fuel products segment. These trades were used to economically lock in a portion of the mark-to-market valuation gain for the above crack spread trades.
Barrels BPD Implied
Swap Contracts by Expiration Dates Purchased --- Crack
---------------------------------- --------- Spread
($/Bbl)
-------
Third Quarter 2010 138,000 1,500 $0.17
Fourth Quarter 2010 138,000 1,500 0.17
------- ----
Totals 276,000
Average price $0.17
At June 30, 2010, the Partnership had the following put options related to jet fuel crack spreads in its fuel products segment, none of which are designated as hedges.
Barrels BPD Average Average
Sold Bought
------- --- Put Put
Jet Fuel Put Option Crack Spread Contracts
by Expiration Dates ($/Bbl) ($/Bbl)
------------------------------------------ ------- -------
Calendar Year 2011 814,000 2,230 $4.17 $6.23
------- ----- -----
Totals 814,000
Average price $4.17 $6.23
Specialty Products Segment
The following tables provide information about our derivatives related to our specialty products segment as of June 30, 2010, none of which are designated as hedges:
Barrels BPD Average Average Average
Bought Sold
------- --- Put Swap Call
Crude Oil Put/Swap/Call
Contracts by Expiration Dates ($/Bbl) ($/Bbl) ($/Bbl)
------------------------------ ------- ------- -------
July 2010 155,000 5,000 $70.43 $84.46 $94.46
August 2010 93,000 3,000 62.38 78.22 88.22
------ --- ----- -----
Totals 248,000
Average price $67.41 $82.12 $92.12
Crude Oil Swap Contracts by Expiration Dates Barrels BPD Average
-------------------------------------------- ------- --- Swap
($/Bbl)
-------
July 2010 62,000 2,000 $75.33
August 2010 93,000 3,000 79.32
------ -----
Totals 155,000
Average price $77.72
Natural Gas Swap Contracts by Expiration Dates MMBtus Average
---------------------------------------------- ------ Swap
($/MMBtu)
---------
Third Quarter 2010 60,000 $5.10
Fourth Quarter 2010 120,000 5.28
---- ---
Totals 180,000
Average price $5.22
First Call Analyst:
FCMN Contact: kathy.buck@CALUMETSPECIALTY.com
SOURCE: Calumet Specialty Products Partners, L.P.
CONTACT: Jennifer Straumins, Investor Relations of Calumet Specialty
Products Partners, L.P., +1-317-328-5660
Web Site: http://www.calumetspecialty.com/