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Delaware
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35-1811116
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification Number)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common units representing limited partner interests
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The NASDAQ Stock Market LLC
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Large accelerated filer
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☐
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Accelerated filer
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☑
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Non-accelerated filer
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☐
(Do not check if a smaller reporting company)
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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PART I
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Items 1 and 2.
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Item 1A.
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Item 1B.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Refinery/Facility
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Location
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Year Acquired
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Current Feedstock Throughput Capacity in Barrels Per Day (“bpd”)
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Products
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Shreveport
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Louisiana
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|
2001
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|
60,000
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Specialty lubricating oils and waxes, gasoline, diesel, jet fuel and asphalt
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Great Falls
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Montana
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2012
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25,000
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|
Gasoline, diesel, jet fuel and asphalt
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San Antonio
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|
Texas
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2013
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|
21,000
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|
Diesel, jet fuel, gasoline, other fuel products and solvents
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Cotton Valley
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Louisiana
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1995
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13,500
|
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Specialty solvents used principally in the manufacture of paints, cleaners, automotive products and drilling fluids
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Princeton
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Louisiana
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1990
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|
10,000
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Specialty lubricating oils, including process oils, base oils, transformer oils and refrigeration oils, and asphalt
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Karns City
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Pennsylvania
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2008
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5,500
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|
Specialty white mineral oils, solvents, petrolatums, gelled hydrocarbons, cable fillers and natural petroleum sulfonates
|
Dickinson
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Texas
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2008
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|
1,300
|
|
Specialty white mineral oils, compressor lubricants, natural petroleum sulfonates and biodiesel
|
Calumet Packaging
|
|
Louisiana
|
|
2012
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N/A
|
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Specialty products including premium industrial and consumer synthetic lubricants, fuels and solvents
|
Royal Purple
|
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Texas
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|
2012
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|
N/A
|
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Specialty products including premium industrial and consumer synthetic lubricants
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Bel-Ray
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New Jersey
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2013
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N/A
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Specialty products including premium industrial and consumer synthetic lubricants and greases
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Missouri
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|
Missouri
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2012
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N/A
|
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Specialty products including polyolester-based synthetic lubricants
|
•
|
Maintain Sufficient Levels of Liquidity.
We are actively focused on maintaining sufficient liquidity to fund our operations and business strategies. As part of a broader effort to maintain an adequate level of liquidity, the board of directors of our general partner unanimously voted to suspend the then-current quarterly cash distribution of $0.685 per unit, or $2.74 per unit on an annualized basis, effective beginning the quarter ended March 31, 2016.
|
•
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Concentrate on Stable Cash Flows.
We intend to continue to focus on operating assets and businesses that generate stable cash flows. Approximately
64.1%
of our continuing operations gross profit and
59.3%
of our continuing operations Adjusted EBITDA in
2017
were generated by the sale of specialty products, a segment of our business which is characterized by stable customer relationships due to our customers’ requirements for the specialized products we provide. In addition, we manage our exposure to crude oil price fluctuations in this segment by passing on incremental feedstock costs to our specialty products customers. In our fuel products segment, which accounted for
35.9%
of our continuing operations gross profit and
40.7%
of our continuing operations Adjusted EBITDA in
2017
, we seek to mitigate our exposure to fuel products margin volatility by generally maintaining a fuel products hedging program for crude oil basis differentials and fuel product crack spreads. In the future, we intend to shift more of our focus to our specialty products business to further reduce our exposure to commodity price volatility.
|
•
|
Develop and Expand Our Customer Relationships.
Due to the specialized nature of, and the long lead-time associated with, the development and production of many of our specialty products, our customers are incentivized to continue their relationships with us. We believe that our larger competitors do not work with customers as we do from product design to delivery for smaller volume specialty products like ours. We intend to continue to assist our existing customers in their efforts to expand their product offerings, as well as marketing specialty product formulations and services to new customers. By striving to maintain our long-term relationships with our broad base of existing customers and by adding new customers, we seek to limit our dependence on any one portion of our customer base.
|
•
|
Enhance Profitability of Our Existing Assets.
We have increased our focus on identifying opportunities to improve our existing asset base and to increase our throughput, profitability and cash flows. Historical examples include projects designed to maximize the profitability of our acquired assets, such as the increase of production capacity at our Great Falls refinery from 10,000 bpd to 25,000 bpd, which was completed in
February 2016
and during 2017, the expansion of our TruFuel packaging line through the installation of a new filler line dedicated to filling gallon containers. Prior to the TruFuel packaging line expansion, we had only one filler line which required the line to be shut down prior to converting from quarts to gallons which reduced total run time on the line. Both filler lines are now utilized and we are able to meet customer demand and avoid substantial downtime encountered with the previous packaging line. We intend to further increase the profitability of our existing asset base through various low capital requirement measures which may include changing the product mix of our processing units, debottlenecking units as necessary to increase throughput, restarting idle assets and reducing costs by improving operations. We also are increasing our focus on optimizing current operations through self-help initiatives and organic growth projects including improving reliability, product quality enhancements, product yield improvements and energy savings initiatives.
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•
|
Disciplined Approach to Strategic and Complementary Acquisitions.
Our senior management team is focused on acquiring assets and product lines where we can enhance operations and improve profitability. In the future, we intend to continue pursuing prudent, accretive acquisitions that will benefit our company over the long term. We intend to reduce our leverage over time and maintain sufficient liquidity to execute our acquisition strategy. We also may pursue strategic acquisitions of assets or agreements with third parties that offer the opportunity for operational efficiencies, the potential for increased utilization and expansion of facilities, or the expansion of product offerings principally in our specialty products segment. In addition, we may pursue selected acquisitions.
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•
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We Offer Our Customers a Diverse Range of Specialty Products.
We offer a wide range of approximately 3,700 specialty products. We believe that our ability to provide our customers with a more diverse selection of products than most of our competitors gives us an advantage in competing for new business. We believe that we are the only specialty products manufacturer that produces all four of naphthenic lubricating oils, paraffinic lubricating oils, waxes and solvents. A contributing factor in our ability to produce numerous specialty products is our ability to ship products between our facilities for product upgrading in order to meet customer specifications.
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•
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We Have Strong Relationships with a Broad Customer Base.
We have long-term relationships with many of our customers and we believe that we will continue to benefit from these relationships. Many of these relationships involve lengthy approval processes or certifications that may make switching to a different supplier more difficult. Our customer base includes more than 4,000 active accounts and we are continually seeking new customers. No single customer accounted for more than 10% of our consolidated sales in each of the three years ended
December 31, 2017
,
2016
and
2015
.
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•
|
Our Facilities Have Advanced Technology.
Our facilities are equipped with advanced, flexible technology that allows us to produce high-grade specialty products and to produce fuel products that comply with low sulfur fuel regulations. For example, our fuel products refineries have the capability to make ultra-low sulfur diesel and gasoline that meet federally mandated low sulfur standards and the Mobile Source Air Toxic Rule II standards (“MSAT II Standards”) set by the EPA requiring the reduction of benzene levels in gasoline. Also, unlike larger refineries which lack some of the equipment necessary to achieve the narrow distillation ranges associated with the production of specialty products, our operations are capable of producing a wide range of products tailored to our customers’ needs.
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•
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We Have an Experienced Management Team.
Our team’s extensive experience and contacts within the refining industry provide a strong foundation and focus for managing and enhancing our operations, accessing strategic asset portfolio opportunities and constructing and enhancing the profitability of new assets.
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•
|
In November 2017, we sold the Superior, Wisconsin refinery (“Superior Refinery”) and associated inventories, the Superior Refinery’s wholesale marketing business and related assets, including certain owned and leased product terminals, and certain crude gathering assets and line space in North Dakota for total consideration of
$533.1 million
. See
Note 4
“
Divestitures
” under Part II, Item 8 “Financial Statements and Supplementary Data” for additional information.
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•
|
In November 2017, we sold Anchor, for total consideration of approximately
$89.6 million
. We have classified the results of operations for Anchor as discontinued operations for all periods presented. See
Note 3
“
Discontinued Operations
” under Part II, Item 8 “Financial Statements and Supplementary Data” for additional information.
|
•
|
In June 2016, we sold our
50%
equity interest in Dakota Prairie for total of consideration of
$28.5 million
, which was offset by our repayment of
$36.0 million
in borrowings under Dakota Prairie’s revolving credit facility. See
Note 5
“
Investment in Unconsolidated Affiliates
” under Part II, Item 8 “Financial Statements and Supplementary Data” for additional information.
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Year Ended December 31,
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||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||
|
(In bpd)
|
|
|
|
(In bpd)
|
|
|
||||||||||
Total sales volume
(1)
|
132,082
|
|
|
140,180
|
|
|
(5.8
|
)%
|
|
140,180
|
|
|
126,216
|
|
|
11.1
|
%
|
Total feedstock runs
(2)
|
128,624
|
|
|
134,163
|
|
|
(4.1
|
)%
|
|
134,163
|
|
|
123,051
|
|
|
9.0
|
%
|
Facility production:
(3)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Specialty products:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Lubricating oils
|
14,606
|
|
|
14,697
|
|
|
(0.6
|
)%
|
|
14,697
|
|
|
13,325
|
|
|
10.3
|
%
|
Solvents
|
7,761
|
|
|
7,427
|
|
|
4.5
|
%
|
|
7,427
|
|
|
7,942
|
|
|
(6.5
|
)%
|
Waxes
|
1,423
|
|
|
1,571
|
|
|
(9.4
|
)%
|
|
1,571
|
|
|
1,460
|
|
|
7.6
|
%
|
Packaged and synthetic specialty products
(4)
|
2,206
|
|
|
1,777
|
|
|
24.1
|
%
|
|
1,777
|
|
|
1,321
|
|
|
34.5
|
%
|
Other
|
1,811
|
|
|
1,850
|
|
|
(2.1
|
)%
|
|
1,850
|
|
|
1,618
|
|
|
14.3
|
%
|
Total specialty products
|
27,807
|
|
|
27,322
|
|
|
1.8
|
%
|
|
27,322
|
|
|
25,666
|
|
|
6.5
|
%
|
Fuel products:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gasoline
|
35,713
|
|
|
37,713
|
|
|
(5.3
|
)%
|
|
37,713
|
|
|
37,691
|
|
|
0.1
|
%
|
Diesel
|
33,277
|
|
|
34,808
|
|
|
(4.4
|
)%
|
|
34,808
|
|
|
30,204
|
|
|
15.2
|
%
|
Jet fuel
|
5,368
|
|
|
5,306
|
|
|
1.2
|
%
|
|
5,306
|
|
|
5,157
|
|
|
2.9
|
%
|
Asphalt, heavy fuel oils and other
|
29,396
|
|
|
29,780
|
|
|
(1.3
|
)%
|
|
29,780
|
|
|
24,077
|
|
|
23.7
|
%
|
Total fuel products
|
103,754
|
|
|
107,607
|
|
|
(3.6
|
)%
|
|
107,607
|
|
|
97,129
|
|
|
10.8
|
%
|
Total facility production
(3)
|
131,561
|
|
|
134,929
|
|
|
(2.5
|
)%
|
|
134,929
|
|
|
122,795
|
|
|
9.9
|
%
|
|
(1)
|
Total sales volume includes sales from the production at our facilities and certain third-party facilities pursuant to supply and/or processing agreements, sales of inventories and the resale of crude oil to third party customers. Total sales volume includes the sale of purchased fuel product blendstocks, such as ethanol and biodiesel, as components of finished fuel products in our fuel products segment sales.
|
(2)
|
Total feedstock runs represent the barrels per day of crude oil and other feedstocks processed at our facilities and at certain third-party facilities pursuant to supply and/or processing agreements.
|
(3)
|
Total facility production represents the barrels per day 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 the production of finished products and volume loss.
|
(4)
|
Represents production of packaged and synthetic specialty products, including the products from the Royal Purple, Bel-Ray and Calumet Packaging facilities.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
(In millions)
|
|
% of Sales
|
|
(In millions)
|
|
% of Sales
|
|
(In millions)
|
|
% of Sales
|
|||||||||
Sales of specialty products:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Lubricating oils
|
$
|
584.2
|
|
|
15.5
|
%
|
|
$
|
538.7
|
|
|
15.5
|
%
|
|
$
|
575.6
|
|
|
14.6
|
%
|
Solvents
|
274.4
|
|
|
7.3
|
%
|
|
237.7
|
|
|
6.8
|
%
|
|
302.0
|
|
|
7.7
|
%
|
|||
Waxes
|
117.2
|
|
|
3.1
|
%
|
|
128.7
|
|
|
3.7
|
%
|
|
136.9
|
|
|
3.5
|
%
|
|||
Packaged and synthetic specialty products
(1)
|
260.7
|
|
|
6.9
|
%
|
|
244.7
|
|
|
7.0
|
%
|
|
261.5
|
|
|
6.7
|
%
|
|||
Other
(2)
|
63.9
|
|
|
1.7
|
%
|
|
102.5
|
|
|
3.0
|
%
|
|
91.8
|
|
|
2.3
|
%
|
|||
Total
|
1,300.4
|
|
|
34.5
|
%
|
|
1,252.3
|
|
|
36.0
|
%
|
|
1,367.8
|
|
|
34.8
|
%
|
|||
Sales of fuel products:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gasoline
|
948.5
|
|
|
25.2
|
%
|
|
844.3
|
|
|
24.3
|
%
|
|
1,047.1
|
|
|
26.6
|
%
|
|||
Diesel
|
877.9
|
|
|
23.4
|
%
|
|
808.4
|
|
|
23.3
|
%
|
|
894.8
|
|
|
22.8
|
%
|
|||
Jet fuel
|
135.0
|
|
|
3.6
|
%
|
|
117.5
|
|
|
3.4
|
%
|
|
149.6
|
|
|
3.8
|
%
|
|||
Asphalt, heavy fuel oils and other
(3)
|
502.0
|
|
|
13.3
|
%
|
|
451.8
|
|
|
13.0
|
%
|
|
471.0
|
|
|
12.0
|
%
|
|||
Total
|
2,463.4
|
|
|
65.5
|
%
|
|
2,222.0
|
|
|
64.0
|
%
|
|
2,562.5
|
|
|
65.2
|
%
|
|||
Consolidated sales
|
$
|
3,763.8
|
|
|
100.0
|
%
|
|
$
|
3,474.3
|
|
|
100.0
|
%
|
|
$
|
3,930.3
|
|
|
100.0
|
%
|
|
(1)
|
Represents packaged and synthetic specialty products at the Royal Purple, Bel-Ray and Calumet Packaging facilities.
|
(2)
|
Represents (a) by-products, including fuels and asphalt, produced in connection with the production of specialty products at the Princeton and Cotton Valley refineries and Dickinson and Karns City facilities and (b) polyolester synthetic lubricants produced at the Missouri facility.
|
(3)
|
Represents asphalt, heavy fuel oils and other products produced in connection with the production of fuels at the Shreveport, Superior, San Antonio and Great Falls refineries and crude oil sales from the Montana and San Antonio refineries to third party customers.
|
|
Shreveport Refinery
|
|||||||
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
60,000
|
|
|
60,000
|
|
|
60,000
|
|
Total feedstock runs
(1) (2)
|
37,853
|
|
|
40,845
|
|
|
40,726
|
|
Total refinery production
(2) (3)
|
40,741
|
|
|
42,075
|
|
|
41,588
|
|
|
(1)
|
Total feedstock runs represent the barrels per day of crude oil and other feedstocks processed at our Shreveport refinery. Total feedstock runs do not include certain interplant feedstocks supplied by our Cotton Valley, Princeton and San Antonio refineries.
|
(2)
|
Total refinery production represents the barrels per day of specialty products and fuel products yielded from processing crude oil and other feedstocks. The difference between total refinery 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.
|
(3)
|
Total refinery production includes certain interplant feedstock supplied to our Cotton Valley, Princeton and San Antonio refineries and Karns City facility.
|
|
Great Falls Refinery
|
|||||||
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
25,000
|
|
|
25,000
|
|
|
10,000
|
|
Total feedstock runs
(1) (2)
|
24,511
|
|
|
20,930
|
|
|
10,307
|
|
Total refinery production
(2)
|
24,948
|
|
|
21,259
|
|
|
10,525
|
|
|
(1)
|
Total feedstock runs represent the barrels per day of crude oil and other feedstocks processed at our Great Falls refinery.
|
(2)
|
Total refinery production represents the barrels per day of specialty products and fuel products yielded from processing crude oil and other feedstocks. The difference between total refinery production and total feedstock runs is primarily a result of the time lag between the input of feedstocks and the production of finished products and volume loss.
|
|
San Antonio Refinery
|
|||||||
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
21,000
|
|
|
21,000
|
|
|
21,000
|
|
Total feedstock runs
(1) (2)
|
16,463
|
|
|
17,374
|
|
|
16,442
|
|
Total refinery production
(2) (3)
|
15,782
|
|
|
16,736
|
|
|
15,708
|
|
|
(1)
|
Total feedstock runs represent the barrels per day of crude oil and other feedstocks processed at our San Antonio refinery.
|
(2)
|
Total refinery production represents the barrels per day of specialty products and fuel products yielded from processing crude oil and other feedstocks. The difference between total refinery production and total feedstock runs is primarily a result of the time lag between the input of feedstocks and the production of finished products and volume loss.
|
(3)
|
Total refinery production includes certain interplant feedstocks supplied to our Shreveport refinery.
|
|
Cotton Valley Refinery
|
|||||||
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
13,500
|
|
|
13,500
|
|
|
13,500
|
|
Total feedstock runs
(1) (2)
|
6,920
|
|
|
6,021
|
|
|
6,413
|
|
Total refinery production
(2) (3)
|
6,466
|
|
|
5,399
|
|
|
6,103
|
|
|
(1)
|
Total feedstock runs do not include certain interplant solvent feedstocks supplied by our Shreveport refinery.
|
(2)
|
Total refinery production represents the barrels per day of specialty products yielded from processing crude oil and other feedstocks. The difference between total refinery production and total feedstock runs is primarily a result of the time lag between the input of feedstocks and the production of finished products and volume loss.
|
(3)
|
Total refinery production includes certain interplant feedstocks supplied to our Shreveport refinery.
|
|
Princeton Refinery
|
|||||||
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
10,000
|
|
|
10,000
|
|
|
10,000
|
|
Total feedstock runs
(1)
|
6,606
|
|
|
6,335
|
|
|
7,105
|
|
Total refinery production
(1) (2)
|
5,396
|
|
|
5,242
|
|
|
5,851
|
|
|
(1)
|
Total refinery production represents the barrels per day of specialty products yielded from processing crude oil and other feedstocks. The difference between total refinery production and total feedstock runs is primarily a result of the time lag between the input of feedstocks and the production of finished products and volume loss.
|
(2)
|
Total refinery production includes certain interplant feedstocks supplied to our Shreveport refinery.
|
|
Combined Karns City, Dickinson and Other Facilities
|
|||||||
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
(in bpd)
|
|||||||
Feedstock throughput capacity
(1)
|
11,300
|
|
|
11,300
|
|
|
11,300
|
|
Total feedstock runs
(2) (3)
|
5,896
|
|
|
6,483
|
|
|
5,515
|
|
Total production
(3)
|
5,932
|
|
|
6,522
|
|
|
5,519
|
|
|
(1)
|
Includes Karns City, Dickinson and other facilities.
|
(2)
|
Includes feedstock runs at our Karns City and Dickinson facilities as well as throughput at certain third-party facilities pursuant to supply and/or processing agreements and includes certain interplant feedstocks supplied from our Shreveport refinery. For more information regarding our purchase commitments related to these supply and/or processing agreements,
|
(3)
|
Total production represents the barrels per day of specialty products yielded from processing feedstocks at our Karns City and Dickinson 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 feedstocks and the production of finished products.
|
Refinery
|
|
Crude Oil Slate
|
|
Mode of Transportation
|
Shreveport
|
|
West Texas Intermediate (“WTI”), local crude oils from East Texas, North Louisiana, Arkansas and Light Louisiana Sweet (“LLS”)
|
|
Tank truck, railcar and Plains Pipeline
|
San Antonio
|
|
Local Texas sweet crude oil (e.g. Eagle Ford)
|
|
Truck and pipeline connected to its Elmendorf crude oil terminal
|
Cotton Valley
|
|
Local paraffinic crude oil
|
|
Tank truck
|
Great Falls
|
|
Canadian Heavy and Canadian Sour (e.g. Bow River)
|
|
Front Range Pipeline
|
Princeton
|
|
Local naphthenic crude oil
|
|
Tank truck, railcar and Plains Pipeline
|
Lubricating Oils
|
|
Solvents
|
|
Waxes
|
|
Packaged and Synthetic Specialty Products
|
|
Other
|
|
Fuels & Fuel Related Products
|
16%
|
|
7%
|
|
3%
|
|
7%
|
|
2%
|
|
65%
|
|
|
|
|
|
|
|
|
|
|
|
•
Hydraulic oils
•
Passenger car motor oils
•
Railroad engine oils
•
Cutting oils
•
Compressor oils
•
Metalworking fluids
•
Transformer oils
•
Rubber process oils
•
Industrial lubricants
•
Gear oils
•
Grease
•
Automatic transmission fluid
•
Animal feed dedusting
•
Baby oils
•
Bakery pan oils
•
Catalyst carriers
•
Gelatin capsule lubricants
•
Sunscreen
|
|
• Waterless hand cleaners
• Alkyd resin diluents
• Automotive products
• Calibration fluids
• Camping fuel
• Charcoal lighter fluids
• Chemical processing
• Drilling fluids
• Printing inks
• Water treatment
• Paint and coatings
• Stains
|
|
• Paraffin waxes
• FDA compliant products
• Candles
• Adhesives
• Crayons
• Floor care
• PVC
• Paint strippers
• Skin & hair care
• Timber treatment
• Waterproofing
• Pharmaceuticals
• Cosmetics
|
|
• Refrigeration compressor oils
• Positive displacement and roto-dynamic compressor oils
• Commercial and military jet engine oil
• Lubricating greases
• Gear oils
• Aviation hydraulic oils
• High performance small engine fuels
• Two cycle and four stroke engine oils
• High performance automotive engine oils
• High performance industrial lubricants
• High temperature chain lubricants
• Food contact grade lubricants
• Charcoal lighter fluids and other solvents
• Engine treatment additives
|
|
• Roofing
• Paving
• Refrigeration compressor oils
• Positive displacement and roto-dynamic compressor oils
|
|
• Gasoline
• Diesel
• Jet fuel
• Marine fuel
• Biodiesel
• Ethanol
• Ethanol free fuels
• Fluid catalytic cracking feedstock
• Asphalt vacuum residuals
• Mixed butanes
• Roofing
• Paving
• Heavy fuel oils
|
|
(1)
|
Based on the percentage of total sales for the year ended
December 31, 2017
. Except for the listed fuel products and certain packaged and synthetic specialty products, we do not produce any of these end-use products.
|
•
|
industrial goods such as metalworking fluids, belts, hoses, sealing systems, batteries, hot melt adhesives, pressure sensitive tapes, electrical transformers, refrigeration compressors and drilling fluids;
|
•
|
consumer goods such as candles, petroleum jelly, creams, tonics, lotions, coating on paper cups, chewing gum base, automotive aftermarket car-care products (e.g., fuel injection cleaners, tire shines and polishes), lamp oils, charcoal lighter fluids, camping fuel and various aerosol products; and
|
•
|
automotive goods such as motor oils, greases, transmission fluid and tires.
|
Property
|
|
Business Segment(s)
|
|
Acres
|
|
Owned / Leased
|
|
Location
|
|
Shreveport refinery
|
|
Fuels and Specialty
|
|
240
|
|
|
Owned
|
|
Shreveport, Louisiana
|
Great Falls refinery
|
|
Fuels
|
|
86
|
|
|
Owned
|
|
Great Falls, Montana
|
San Antonio refinery
|
|
Fuels and Specialty
|
|
32
|
|
|
Owned
|
|
San Antonio, Texas
|
Princeton refinery
|
|
Specialty
|
|
208
|
|
|
Owned
|
|
Princeton, Louisiana
|
Cotton Valley refinery
|
|
Specialty
|
|
77
|
|
|
Owned
|
|
Cotton Valley, Louisiana
|
Burnham terminal
|
|
Specialty
|
|
11
|
|
|
Owned
|
|
Burnham, Illinois
|
Karns City facility
|
|
Specialty
|
|
225
|
|
|
Owned
|
|
Karns City, Pennsylvania
|
Dickinson facility
|
|
Specialty
|
|
28
|
|
|
Owned
|
|
Dickinson, Texas
|
Missouri facility
|
|
Specialty
|
|
22
|
|
|
Owned
|
|
Louisiana, Missouri
|
Calumet Packaging facility
|
|
Specialty
|
|
10
|
|
|
Leased
|
|
Shreveport, Louisiana
|
Royal Purple facility
|
|
Specialty
|
|
28
|
|
|
Owned
|
|
Porter, Texas
|
Bel-Ray facility
|
|
Specialty
|
|
32
|
|
|
Owned
|
|
Wall Township, New Jersey
|
Elmendorf terminal
|
|
Fuels
|
|
8
|
|
|
Owned
|
|
Elmendorf, Texas
|
Facility/ Refinery
|
|
Union
|
|
Expiration Date
|
Cotton Valley
|
|
International Union of Operating Engineers
|
|
March 31, 2019
|
Princeton
|
|
International Union of Operating Engineers
|
|
October 31, 2020
|
Dickinson
|
|
International Union of Operating Engineers
|
|
March 31, 2019
|
Shreveport
|
|
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied-Industrial and Service Workers International Union
|
|
April 30, 2019
|
Missouri
|
|
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied-Industrial and Service Workers International Union
|
|
April 30, 2019
|
Karns City
|
|
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy Allied-Industrial and Service Workers International Union
|
|
January 31, 2019
|
Great Falls
|
|
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy Allied-Industrial and Service Workers International Union
|
|
January 31, 2019
|
•
|
overall demand for specialty hydrocarbon products, fuel and other refined products;
|
•
|
the level of foreign and domestic production of crude oil and refined products;
|
•
|
our ability to produce fuel products and specialty products that meet our customers’ unique and precise specifications;
|
•
|
the marketing of alternative and competing products;
|
•
|
the extent of government regulation;
|
•
|
results of our hedging activities; and
|
•
|
overall economic and local market conditions.
|
•
|
the level of capital expenditures we make, including those for acquisitions, if any;
|
•
|
our debt service requirements;
|
•
|
fluctuations in our working capital needs;
|
•
|
our ability to borrow funds and access capital markets;
|
•
|
restrictions on distributions and on our ability to make working capital borrowings for distributions contained in our debt instruments; and
|
•
|
the amount of cash reserves established by our general partner for the proper conduct of our business.
|
•
|
our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms;
|
•
|
covenants contained in our existing and future credit and debt arrangements will require us to meet financial tests that may affect our flexibility in planning for and reacting to changes in our business, including possible acquisition opportunities;
|
•
|
we will need a substantial portion of our cash flow to make principal and interest payments on our indebtedness, reducing the funds that would otherwise be available for operations, future business opportunities and payments of our debt obligations;
|
•
|
our ability to execute our acquisition and divestiture strategy; and
|
•
|
our debt level will make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our business or the economy in general.
|
•
|
sell assets, including equity interests in our subsidiaries;
|
•
|
pay distributions on or redeem or repurchase our units or redeem or repurchase our subordinated debt and, in the case of the 2021 Secured Notes, our unsecured notes;
|
•
|
incur or guarantee additional indebtedness or issue preferred units;
|
•
|
create or incur certain liens;
|
•
|
make certain acquisitions and investments;
|
•
|
redeem or repay other debt or make other restricted payments;
|
•
|
enter into transactions with affiliates;
|
•
|
enter into agreements that restrict distributions or other payments from our restricted subsidiaries to us;
|
•
|
create unrestricted subsidiaries;
|
•
|
enter into sale and leaseback transactions;
|
•
|
enter into a merger, consolidation or transfer or sale of assets, including equity interests in our subsidiaries; and
|
•
|
engage in certain business activities.
|
•
|
will not be required to lend any additional amounts to us;
|
•
|
could elect to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be due and payable;
|
•
|
could elect to require that all obligations accrue interest at the default rate, if such rate has not already been imposed;
|
•
|
may have the ability to require us to apply all of our available cash to repay these borrowings;
|
•
|
may prevent us from making debt service payments under our other agreements, any of which could result in an event of default under our other financing arrangements; or
|
•
|
in the case of our revolving credit facility or the 2021 Secured Notes, foreclose on the collateral pledged pursuant to the terms of the revolving credit facility or indenture governing the 2021 Secured Notes, respectively.
|
•
|
denial or delay in obtaining regulatory approvals and/or permits;
|
•
|
unplanned increases in the cost of equipment, materials or labor;
|
•
|
disruptions in transportation of equipment and materials;
|
•
|
severe adverse weather conditions, natural disasters or other events (such as equipment malfunctions, explosions, fires or spills) affecting our facilities, or those of our vendors and suppliers;
|
•
|
shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages;
|
•
|
market-related increases in a project’s debt or equity financing costs; and/or
|
•
|
nonperformance or declarations of force majeure by, or disputes with, our vendors, suppliers, contractors or sub-contractors.
|
•
|
a recession or other adverse economic condition that results in lower spending by consumers on gasoline, diesel and travel;
|
•
|
higher fuel taxes or other governmental or regulatory actions that increase, directly or indirectly, the cost of fuel products;
|
•
|
an increase in fuel economy or the increased use of alternative fuel sources;
|
•
|
an increase in the market price of crude oil that leads to higher refined product prices, which may reduce demand for fuel products;
|
•
|
competitor actions; and
|
•
|
availability of raw materials.
|
•
|
our general partner is allowed to take into account the interests of parties other than us, such as its affiliates, in resolving conflicts of interest, which has the effect of limiting its fiduciary duty to our unitholders;
|
•
|
our general partner has limited its liability and reduced its fiduciary duties under our partnership agreement and has also restricted the remedies available to our unitholders for actions that, without the limitations, might constitute breaches of fiduciary duty. As a result of purchasing common units, unitholders consent to some actions and conflicts of interest that might otherwise constitute a breach of fiduciary or other duties under Delaware law;
|
•
|
our general partner determines the amount and timing of asset purchases and sales, borrowings, issuance of additional partnership securities, and reserves, each of which can affect the amount of cash that is distributed to unitholders;
|
•
|
our general partner determines which costs incurred by it and its affiliates are reimbursable by us;
|
•
|
our general partner determines the amount and timing of any capital expenditures and whether a capital expenditure is a maintenance capital expenditure, which reduces operating surplus, or a capital expenditure for acquisitions or capital improvements, which does not. This determination can affect the amount of cash that is available for distribution to our unitholders and payments of our debt obligations;
|
•
|
our general partner has the flexibility to cause us to enter into a broad variety of derivative transactions covering different time periods, the net cash receipts or payments from which will increase or decrease operating surplus and adjusted operating surplus, with the result that our general partner may be able to shift the recognition of operating surplus and adjusted operating surplus between periods to increase the distributions it and its affiliates receive on their incentive distribution rights; and
|
•
|
in some instances, our general partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make incentive distributions.
|
•
|
permits our general partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner. This entitles our general partner to consider only the interests and factors that it desires, and it has no duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or any limited partner. Examples include the exercise of its limited call right, its voting rights with respect to the units it owns, its registration rights and its determination whether or not to consent to any merger or consolidation of our partnership or amendment of our partnership agreement;
|
•
|
provides that our general partner will not have any liability to us or our unitholders for decisions made in its capacity as a general partner so long as it acted in good faith, meaning it believed the decision was in the best interests of our partnership;
|
•
|
generally provides that affiliated transactions and resolutions of conflicts of interest not approved by the conflicts committee of the board of directors of our general partner and not involving a vote of unitholders must be on terms no less favorable to us than those generally being provided to or available from unrelated third parties or be “fair and reasonable” to us. In determining whether a transaction or resolution is “fair and reasonable,” our general partner may consider the totality of the relationships between the parties involved, including other transactions that may be particularly advantageous or beneficial to us; and
|
•
|
provides that our general partner and its officers and directors will not be liable for monetary damages to us or our limited partners for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that the general partner or those other persons acted in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that such person’s conduct was criminal.
|
•
|
our unitholders’ proportionate ownership interest in us may decrease;
|
•
|
the amount of cash available for distribution on each unit may decrease;
|
•
|
the relative voting strength of each previously outstanding unit may be diminished;
|
•
|
the market price of the common units may decline; and
|
•
|
the ratio of taxable income to distributions may increase.
|
•
|
a court or government agency determined that we were conducting business in a state but had not complied with that particular state’s partnership statute; or
|
•
|
unitholders’ right to act with other unitholders to remove or replace the general partner, to approve some amendments to our partnership agreement or to take other actions under our partnership agreement constitute “control” of our business.
|
•
|
our quarterly distributions or failure to provide such distributions;
|
•
|
our quarterly or annual earnings or those of other companies in our industry;
|
•
|
changes in commodity prices or refining margins;
|
•
|
loss of a large customer;
|
•
|
announcements by us or our competitors of significant contracts or acquisitions;
|
•
|
changes in accounting standards, policies, guidance, interpretations or principles;
|
•
|
general economic conditions;
|
•
|
the failure of securities analysts to cover our common units or changes in financial estimates by analysts;
|
•
|
future sales of our common units; and
|
•
|
the other factors described in Item 1A “Risk Factors” of this Annual Report.
|
|
Low
|
|
High
|
|
Cash Distribution
per Unit
|
||||||
2016:
|
|
|
|
|
|
||||||
First quarter
|
$
|
7.80
|
|
|
$
|
20.27
|
|
|
$
|
—
|
|
Second quarter
|
$
|
3.42
|
|
|
$
|
12.48
|
|
|
$
|
—
|
|
Third quarter
|
$
|
4.36
|
|
|
$
|
6.42
|
|
|
$
|
—
|
|
Fourth quarter
|
$
|
2.79
|
|
|
$
|
5.00
|
|
|
$
|
—
|
|
2017:
|
|
|
|
|
|
||||||
First quarter
|
$
|
3.55
|
|
|
$
|
4.70
|
|
|
$
|
—
|
|
Second quarter
|
$
|
3.40
|
|
|
$
|
4.93
|
|
|
$
|
—
|
|
Third quarter
|
$
|
4.00
|
|
|
$
|
9.10
|
|
|
$
|
—
|
|
Fourth quarter
|
$
|
6.10
|
|
|
$
|
9.95
|
|
|
$
|
—
|
|
•
|
less the amount of cash reserves established by our general partner to:
|
•
|
provide for the proper conduct of our business;
|
•
|
comply with applicable law, any of our debt instruments or other agreements; and
|
•
|
provide funds for distributions to our unitholders and to our general partner for any one or more of the next four quarters.
|
•
|
plus all cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made after the end of the quarter for which the determination is being made. Working capital borrowings are generally borrowings that will be made under our revolving credit facility and in all cases are used solely for working capital purposes or to pay distributions to partners.
|
|
Total Quarterly
Distribution
Target Amount
Per Common Unit
|
|
Marginal Percentage
Interest in Distributions
|
||||
|
|
Unitholders
|
|
General Partner
|
|||
Minimum Quarterly Distribution
|
$0.45
|
|
98
|
%
|
|
2
|
%
|
First Target Distribution
|
up to $0.495
|
|
98
|
%
|
|
2
|
%
|
Second Target Distribution
|
above $0.495 up to $0.563
|
|
85
|
%
|
|
15
|
%
|
Third Target Distribution
|
above $0.563 up to $0.675
|
|
75
|
%
|
|
25
|
%
|
Thereafter
|
above $0.675
|
|
50
|
%
|
|
50
|
%
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Summary of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
3,763.8
|
|
|
$
|
3,474.3
|
|
|
$
|
3,930.3
|
|
|
$
|
5,422.6
|
|
|
$
|
5,421.4
|
|
Cost of sales
|
3,265.6
|
|
|
3,088.0
|
|
|
3,393.9
|
|
|
5,014.9
|
|
|
5,011.4
|
|
|||||
Gross profit
|
498.2
|
|
|
386.3
|
|
|
536.4
|
|
|
407.7
|
|
|
410.0
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling
|
65.7
|
|
|
69.8
|
|
|
71.8
|
|
|
80.6
|
|
|
62.6
|
|
|||||
General and administrative
|
138.7
|
|
|
105.8
|
|
|
125.9
|
|
|
94.2
|
|
|
82.1
|
|
|||||
Transportation
|
137.1
|
|
|
154.3
|
|
|
153.6
|
|
|
143.3
|
|
|
142.7
|
|
|||||
Taxes other than income taxes
|
24.1
|
|
|
19.3
|
|
|
17.1
|
|
|
13.0
|
|
|
14.2
|
|
|||||
Asset impairment
|
207.3
|
|
|
35.7
|
|
|
—
|
|
|
—
|
|
|
10.5
|
|
|||||
Gain on sale of business, net
|
(236.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
3.3
|
|
|
1.7
|
|
|
10.8
|
|
|
14.1
|
|
|
6.3
|
|
|||||
Operating income (loss)
|
158.0
|
|
|
(0.3
|
)
|
|
157.2
|
|
|
62.5
|
|
|
91.6
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(183.1
|
)
|
|
(161.7
|
)
|
|
(104.9
|
)
|
|
(110.8
|
)
|
|
(96.8
|
)
|
|||||
Debt extinguishment costs
|
—
|
|
|
—
|
|
|
(46.6
|
)
|
|
(89.9
|
)
|
|
(14.6
|
)
|
|||||
Gain (loss) on derivative instruments
|
(9.6
|
)
|
|
(4.1
|
)
|
|
(31.4
|
)
|
|
43.2
|
|
|
21.0
|
|
|||||
Loss from unconsolidated affiliates
|
—
|
|
|
(18.3
|
)
|
|
(61.1
|
)
|
|
(3.2
|
)
|
|
(0.3
|
)
|
|||||
Loss on sale of unconsolidated affiliates
|
—
|
|
|
(113.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
3.3
|
|
|
1.2
|
|
|
1.6
|
|
|
1.4
|
|
|
3.0
|
|
|||||
Total other expense
|
(189.4
|
)
|
|
(296.3
|
)
|
|
(242.4
|
)
|
|
(159.3
|
)
|
|
(87.7
|
)
|
|||||
Net income (loss) from continuing operations before income taxes
|
(31.4
|
)
|
|
(296.6
|
)
|
|
(85.2
|
)
|
|
(96.8
|
)
|
|
3.9
|
|
|||||
Income tax expense (benefit) from continuing operations
|
(0.1
|
)
|
|
0.2
|
|
|
0.2
|
|
|
0.6
|
|
|
0.4
|
|
|||||
Net income (loss) from continuing operations
|
(31.3
|
)
|
|
(296.8
|
)
|
|
(85.4
|
)
|
|
(97.4
|
)
|
|
3.5
|
|
|||||
Net loss from discontinued operations, net of income taxes
|
(72.5
|
)
|
|
(31.8
|
)
|
|
(54.0
|
)
|
|
(14.8
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
|
$
|
(139.4
|
)
|
|
$
|
(112.2
|
)
|
|
$
|
3.5
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(In millions, except unit, per unit and operating data)
|
||||||||||||||||||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
77,598,950
|
|
|
77,043,935
|
|
|
74,896,096
|
|
|
69,671,827
|
|
|
67,938,784
|
|
|||||
Limited partners’ interest basic and diluted net loss per unit:
|
|
|
|
|
|
|
|
|
|
||||||||||
From continuing operations
|
$
|
(0.40
|
)
|
|
$
|
(3.77
|
)
|
|
$
|
(1.34
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
(0.17
|
)
|
From discontinued operations
|
(0.91
|
)
|
|
(0.41
|
)
|
|
(0.71
|
)
|
|
(0.21
|
)
|
|
—
|
|
|||||
Limited partners’ interest
|
$
|
(1.31
|
)
|
|
$
|
(4.18
|
)
|
|
$
|
(2.05
|
)
|
|
$
|
(1.80
|
)
|
|
$
|
(0.17
|
)
|
Cash distributions declared per limited partner
|
$
|
—
|
|
|
$
|
0.685
|
|
|
$
|
2.74
|
|
|
$
|
2.74
|
|
|
$
|
2.70
|
|
Balance Sheet Data (at period end):
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment, net
|
$
|
1,159.2
|
|
|
$
|
1,632.4
|
|
|
$
|
1,665.0
|
|
|
$
|
1,407.2
|
|
|
$
|
1,160.4
|
|
Total assets
|
$
|
2,688.8
|
|
|
$
|
2,571.3
|
|
|
$
|
2,752.6
|
|
|
$
|
2,715.3
|
|
|
$
|
2,658.4
|
|
Accounts payable
|
$
|
282.3
|
|
|
$
|
275.9
|
|
|
$
|
300.0
|
|
|
$
|
360.4
|
|
|
$
|
355.8
|
|
Total long-term debt
|
$
|
1,992.3
|
|
|
$
|
1,997.2
|
|
|
$
|
1,773.4
|
|
|
$
|
1,678.8
|
|
|
$
|
1,081.1
|
|
Total partners’ capital
|
$
|
119.9
|
|
|
$
|
218.7
|
|
|
$
|
603.9
|
|
|
$
|
810.2
|
|
|
$
|
1,062.8
|
|
Cash Flow Data:
(5)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash flow provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
(26.5
|
)
|
|
$
|
4.1
|
|
|
$
|
376.4
|
|
|
$
|
226.8
|
|
|
$
|
39.1
|
|
Investing activities
|
$
|
453.4
|
|
|
$
|
(154.2
|
)
|
|
$
|
(389.0
|
)
|
|
$
|
(658.8
|
)
|
|
$
|
(370.3
|
)
|
Financing activities
|
$
|
83.2
|
|
|
$
|
148.7
|
|
|
$
|
9.7
|
|
|
$
|
319.4
|
|
|
$
|
420.1
|
|
Other Financial Data:
(5)
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA
|
$
|
246.7
|
|
|
$
|
(3.5
|
)
|
|
$
|
82.5
|
|
|
$
|
136.4
|
|
|
$
|
218.5
|
|
Adjusted EBITDA
|
$
|
317.2
|
|
|
$
|
158.2
|
|
|
$
|
257.7
|
|
|
$
|
305.9
|
|
|
$
|
241.5
|
|
Distributable Cash Flow
|
$
|
89.3
|
|
|
$
|
(5.7
|
)
|
|
$
|
161.9
|
|
|
$
|
146.3
|
|
|
$
|
18.8
|
|
Operating Data (bpd):
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Total sales volume
(2)
|
132,082
|
|
|
140,180
|
|
|
126,216
|
|
|
122,852
|
|
|
116,477
|
|
|||||
Total feedstock runs
(3)
|
128,624
|
|
|
134,163
|
|
|
123,051
|
|
|
117,427
|
|
|
110,237
|
|
|||||
Total facility production
(4)
|
131,561
|
|
|
134,929
|
|
|
122,795
|
|
|
114,146
|
|
|
106,592
|
|
|
(1)
|
Balance sheet and operating data exclude discontinued operations.
|
(2)
|
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.
|
(3)
|
Total feedstock runs represent the barrels per day of crude oil and other feedstocks processed at our facilities and at certain third-party facilities pursuant to supply and/or processing agreements.
|
(4)
|
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 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 the production of finished products and volume loss.
|
(5)
|
Cash flow and other financial data are reflective of continuing and discontinued operations.
|
•
|
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.
|
|
(1)
|
Impairment charges for 2017 primarily relate to $59.2 million of long-lived asset impairment charges related to the specialty products segment and $147.0 million of long-lived asset impairment charges related to the fuel products segment.
|
(2)
|
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.
|
(3)
|
Represents consolidated interest expense less non-cash interest expense.
|
|
(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.
|
(3)
|
Impairment charges for 2017 primarily relate to $59.2 million of long-lived asset impairment charges related to the specialty products segment and $147.0 million of long-lived asset impairment charges related to the fuel products segment.
|
•
|
We realized record profit contribution from certain specialty product lines, primarily attributable to the continued growth of our brand-named products such as Royal Purple, Bel-Ray and TruFuel. We are committed to continued growth in our specialty products segment, and we continue to work on new products to introduce to the market. Specialty products margins have remained relatively stable and are expected to remain stable in the near term.
|
•
|
We continue to consider our specialty products segment our core business over the long term, and we plan to seek appropriate ways to invest in our specialty products segment while divesting non-core businesses. Accordingly, we continue to evaluate opportunities to divest non-core businesses and assets in line with our strategy of preserving liquidity and streamlining our business to better focus on the advancement of our core business. However, there can be no assurance as to the timing or success of any such potential transaction, or any other transaction, or that we will be able to sell these assets or non-core businesses on satisfactory terms, if at all. In addition, our acquisition program targets assets that management believes will be financially accretive, and we intend to focus on targeted strategic acquisitions of specialty products assets that leverage an existing core competency and that have an identifiable competitive advantage we can exploit as the new owner.
|
•
|
We continued to focus on improving operations in 2017. Our average feedstock runs were
128,624
barrels per day (“bpd”) in
2017
, compared to
134,163
bpd in
2016
. The decrease is primarily attributable to the Superior Transaction partially offset by strong specialty products feedstock runs. We hope to see modest improvement in our utilization rates in the future as we continue to seek to minimize unplanned downtime at our facilities.
|
•
|
Refined fuel product margins have widened in
2017
as compared to
2016
with the Gulf Coast crack spread (defined below) increasing
42%
to
$17
per barrel, while the Western Canadian Select (“WCS”) discount versus NYMEX WTI remained flat at $13 per barrel below NYMEX WTI. The WCS discount to NYMEX WTI widened in the fourth quarter of 2017 and into 2018. We have increased our use of WCS crude oil and other heavy crude oils to capture the higher margins associated with refining heavier crude oils. Canadian heavy sour crude oil discounts are expected to remain wide over the long term as Canadian sour crude oil remains oversupplied. Processing heavy sour crude oil in our refining system results in a lower overall delivered cost of crude oil.
|
•
|
Environmental regulations continue to affect our margins in the form of Renewable Identification Numbers (“RINs”). To the extent we are unable to blend biofuels, we must purchase RINs in the open market to satisfy our annual requirement.
|
•
|
sales volumes;
|
•
|
production yields;
|
•
|
segment gross profit;
|
•
|
segment Adjusted EBITDA; and
|
•
|
selling, general and administrative expenses.
|
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
(In bpd)
|
|||||||
Total sales volume
(1)
|
132,082
|
|
|
140,180
|
|
|
126,216
|
|
Total feedstock runs
(2)
|
128,624
|
|
|
134,163
|
|
|
123,051
|
|
Facility production:
(3)
|
|
|
|
|
|
|||
Specialty products:
|
|
|
|
|
|
|||
Lubricating oils
|
14,606
|
|
|
14,697
|
|
|
13,325
|
|
Solvents
|
7,761
|
|
|
7,427
|
|
|
7,942
|
|
Waxes
|
1,423
|
|
|
1,571
|
|
|
1,460
|
|
Packaged and synthetic specialty products
(4)
|
2,206
|
|
|
1,777
|
|
|
1,321
|
|
Other
|
1,811
|
|
|
1,850
|
|
|
1,618
|
|
Total specialty products
|
27,807
|
|
|
27,322
|
|
|
25,666
|
|
Fuel products:
|
|
|
|
|
|
|||
Gasoline
|
35,713
|
|
|
37,713
|
|
|
37,691
|
|
Diesel
|
33,277
|
|
|
34,808
|
|
|
30,204
|
|
Jet fuel
|
5,368
|
|
|
5,306
|
|
|
5,157
|
|
Asphalt, heavy fuel oils and other
|
29,396
|
|
|
29,780
|
|
|
24,077
|
|
Total fuel products
|
103,754
|
|
|
107,607
|
|
|
97,129
|
|
Total facility production
(3)
|
131,561
|
|
|
134,929
|
|
|
122,795
|
|
|
(1)
|
Total sales volume includes sales from the production at our facilities and certain third-party facilities pursuant to supply and/or processing agreements, sales of inventories and the resale of crude oil to third party customers. Total sales volume includes the sale of purchased fuel product blendstocks, such as ethanol and biodiesel, as components of finished fuel products in our fuel products segment sales.
|
(2)
|
Total feedstock runs represent the barrels per day of crude oil and other feedstocks processed at our facilities and at certain third-party facilities pursuant to supply and/or processing agreements.
|
(3)
|
Total facility production represents the barrels per day 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
|
(4)
|
Represents production of packaged and synthetic specialty products, including the products from the Royal Purple, Bel-Ray and Calumet Packaging facilities.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Sales
|
$
|
3,763.8
|
|
|
$
|
3,474.3
|
|
|
$
|
3,930.3
|
|
Cost of sales
|
3,265.6
|
|
|
3,088.0
|
|
|
3,393.9
|
|
|||
Gross profit
|
498.2
|
|
|
386.3
|
|
|
536.4
|
|
|||
Operating costs and expenses:
|
|
|
|
|
|
||||||
Selling
|
65.7
|
|
|
69.8
|
|
|
71.8
|
|
|||
General and administrative
|
138.7
|
|
|
105.8
|
|
|
125.9
|
|
|||
Transportation
|
137.1
|
|
|
154.3
|
|
|
153.6
|
|
|||
Taxes other than income taxes
|
24.1
|
|
|
19.3
|
|
|
17.1
|
|
|||
Asset impairment
|
207.3
|
|
|
35.7
|
|
|
—
|
|
|||
Gain on sale of business, net
|
(236.0
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
3.3
|
|
|
1.7
|
|
|
10.8
|
|
|||
Operating income (loss)
|
158.0
|
|
|
(0.3
|
)
|
|
157.2
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(183.1
|
)
|
|
(161.7
|
)
|
|
(104.9
|
)
|
|||
Debt extinguishment costs
|
—
|
|
|
—
|
|
|
(46.6
|
)
|
|||
Loss on derivative instruments
|
(9.6
|
)
|
|
(4.1
|
)
|
|
(31.4
|
)
|
|||
Loss from unconsolidated affiliates
|
—
|
|
|
(18.3
|
)
|
|
(61.1
|
)
|
|||
Loss on sale of unconsolidated affiliates
|
—
|
|
|
(113.4
|
)
|
|
—
|
|
|||
Other
|
3.3
|
|
|
1.2
|
|
|
1.6
|
|
|||
Total other expense
|
(189.4
|
)
|
|
(296.3
|
)
|
|
(242.4
|
)
|
|||
Net loss from continuing operations before income taxes
|
(31.4
|
)
|
|
(296.6
|
)
|
|
(85.2
|
)
|
|||
Income tax expense (benefit) from continuing operations
|
(0.1
|
)
|
|
0.2
|
|
|
0.2
|
|
|||
Net loss from continuing operations
|
(31.3
|
)
|
|
(296.8
|
)
|
|
(85.4
|
)
|
|||
Net loss from discontinued operations, net of income taxes
|
(72.5
|
)
|
|
(31.8
|
)
|
|
(54.0
|
)
|
|||
Net loss
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
|
$
|
(139.4
|
)
|
EBITDA
|
$
|
246.7
|
|
|
$
|
(3.5
|
)
|
|
$
|
82.5
|
|
Adjusted EBITDA
|
$
|
317.2
|
|
|
$
|
158.2
|
|
|
$
|
257.7
|
|
Distributable Cash Flow
|
$
|
89.3
|
|
|
$
|
(5.7
|
)
|
|
$
|
161.9
|
|
|
Year Ended December 31,
|
|||||||||
|
2017
|
|
2016
|
|
% Change
|
|||||
|
(In millions, except barrel and per barrel data)
|
|||||||||
Sales by segment:
|
|
|
|
|
|
|||||
Specialty products:
|
|
|
|
|
|
|||||
Lubricating oils
|
$
|
584.2
|
|
|
$
|
538.7
|
|
|
8.4
|
%
|
Solvents
|
274.4
|
|
|
237.7
|
|
|
15.4
|
%
|
||
Waxes
|
117.2
|
|
|
128.7
|
|
|
(8.9
|
)%
|
||
Packaged and synthetic specialty products
(1)
|
260.7
|
|
|
244.7
|
|
|
6.5
|
%
|
||
Other
(2)
|
63.9
|
|
|
102.5
|
|
|
(37.7
|
)%
|
||
Total specialty products
|
$
|
1,300.4
|
|
|
$
|
1,252.3
|
|
|
3.8
|
%
|
Total specialty products sales volume (in barrels)
|
9,407,000
|
|
|
9,779,000
|
|
|
(3.8
|
)%
|
||
Average specialty products sales price per barrel
|
$
|
138.24
|
|
|
$
|
128.06
|
|
|
7.9
|
%
|
|
|
|
|
|
|
|||||
Fuel products:
|
|
|
|
|
|
|||||
Gasoline
|
$
|
948.5
|
|
|
$
|
844.3
|
|
|
12.3
|
%
|
Diesel
|
877.9
|
|
|
748.7
|
|
|
17.3
|
%
|
||
Jet fuel
|
135.0
|
|
|
117.5
|
|
|
14.9
|
%
|
||
Asphalt, heavy fuel oils and other
(3)
|
502.0
|
|
|
451.8
|
|
|
11.1
|
%
|
||
Hedging activities
|
—
|
|
|
59.7
|
|
|
(100.0
|
)%
|
||
Total fuel products
|
$
|
2,463.4
|
|
|
$
|
2,222.0
|
|
|
10.9
|
%
|
Total fuel products sales volume (in barrels)
|
38,803,000
|
|
|
41,527,000
|
|
|
(6.6
|
)%
|
||
Average fuel products sales price per barrel (excluding hedging activities)
|
$
|
63.48
|
|
|
$
|
52.07
|
|
|
21.9
|
%
|
Average fuel products sales price per barrel (including hedging activities)
|
$
|
63.48
|
|
|
$
|
53.51
|
|
|
18.6
|
%
|
|
|
|
|
|
|
|||||
Total sales
|
$
|
3,763.8
|
|
|
$
|
3,474.3
|
|
|
8.3
|
%
|
Total specialty and fuel products sales volume (in barrels)
|
48,210,000
|
|
|
51,306,000
|
|
|
(6.0
|
)%
|
|
(1)
|
Represents packaged and synthetic specialty products at the Royal Purple, Bel-Ray and Calumet Packaging facilities.
|
(2)
|
Represents (a) by-products, including fuels and asphalt, produced in connection with the production of specialty products at the Princeton and Cotton Valley refineries and Dickinson and Karns City facilities and (b) polyolester synthetic lubricants produced at the Missouri facility.
|
(3)
|
Represents asphalt, heavy fuel oils and other products produced in connection with the production of fuels at the Shreveport, Superior, San Antonio and Great Falls refineries and crude oil sales from the Montana and San Antonio refineries to third party customers.
|
|
Dollar Change
|
||
|
(In millions)
|
||
Sales price
|
$
|
95.8
|
|
Volume
|
(47.7
|
)
|
|
Total specialty products segment sales increase
|
$
|
48.1
|
|
|
Dollar Change
|
||
|
(In millions)
|
||
Sales price
|
$
|
444.2
|
|
Divestiture impact
|
(109.0
|
)
|
|
Hedging activities
|
(59.7
|
)
|
|
Volume
|
(34.1
|
)
|
|
Total fuel products segment sales increase
|
$
|
241.4
|
|
|
Year Ended December 31,
|
|||||||||
|
2017
|
|
2016
|
|
% Change
|
|||||
|
(Dollars in millions, except per barrel data)
|
|||||||||
Gross profit by segment:
|
|
|
|
|
|
|||||
Specialty products:
|
|
|
|
|
|
|||||
Gross profit
|
$
|
319.2
|
|
|
$
|
338.1
|
|
|
(5.6
|
)%
|
Percentage of sales
|
24.5
|
%
|
|
27.0
|
%
|
|
|
|||
Specialty products gross profit per barrel
|
$
|
33.93
|
|
|
$
|
34.57
|
|
|
(1.9
|
)%
|
Fuel products:
|
|
|
|
|
|
|||||
Gross profit excluding hedging activities
|
$
|
179.0
|
|
|
$
|
39.8
|
|
|
349.7
|
%
|
Hedging activities
|
—
|
|
|
8.4
|
|
|
(100.0
|
)%
|
||
Gross profit
|
$
|
179.0
|
|
|
$
|
48.2
|
|
|
271.4
|
%
|
Percentage of sales
|
7.3
|
%
|
|
2.2
|
%
|
|
|
|||
Fuel products gross profit per barrel (excluding hedging activities)
|
$
|
4.61
|
|
|
$
|
0.96
|
|
|
380.2
|
%
|
Fuel products gross profit per barrel (including hedging activities)
|
$
|
4.61
|
|
|
$
|
1.16
|
|
|
297.4
|
%
|
|
|
|
|
|
|
|||||
Total gross profit
|
$
|
498.2
|
|
|
$
|
386.3
|
|
|
29.0
|
%
|
Percentage of sales
|
13.2
|
%
|
|
11.1
|
%
|
|
|
|
Dollar Change
|
||
|
(In millions)
|
||
2016 reported gross profit
|
$
|
338.1
|
|
Cost of materials
|
(91.0
|
)
|
|
Volume
|
(20.2
|
)
|
|
Operating costs
|
(9.0
|
)
|
|
LCM inventory adjustment
|
(0.3
|
)
|
|
Sales price
|
95.8
|
|
|
LIFO inventory layer adjustment
|
5.8
|
|
|
2017 reported gross profit
|
$
|
319.2
|
|
|
Dollar Change
|
||
|
(In millions)
|
||
2016 reported gross profit
|
$
|
48.2
|
|
Sales price
|
444.2
|
|
|
RINs expense
|
38.2
|
|
|
LIFO inventory layer adjustment
|
19.0
|
|
|
Divestiture impact
|
0.1
|
|
|
Volume
|
(6.2
|
)
|
|
Hedging activities
|
(8.4
|
)
|
|
LCM inventory layer adjustment
|
(7.5
|
)
|
|
Operating costs
|
(10.9
|
)
|
|
Cost of materials
|
(337.7
|
)
|
|
2017 reported gross profit
|
$
|
179.0
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Derivative gain reflected in sales
|
$
|
—
|
|
|
$
|
59.7
|
|
Derivative loss reflected in cost of sales
|
—
|
|
|
(53.3
|
)
|
||
Derivative gain reflected in gross profit
|
$
|
—
|
|
|
$
|
6.4
|
|
|
|
|
|
||||
Realized loss on derivative instruments
|
$
|
(13.2
|
)
|
|
$
|
(24.0
|
)
|
Unrealized gain on derivative instruments
|
3.6
|
|
|
19.9
|
|
||
Total derivative gain (loss) reflected in the consolidated statements of operations
|
$
|
(9.6
|
)
|
|
$
|
2.3
|
|
Total loss on commodity derivative settlements
|
$
|
(13.2
|
)
|
|
$
|
(24.0
|
)
|
|
Year Ended December 31,
|
|||||||||
|
2016
|
|
2015
|
|
% Change
|
|||||
|
(In millions, except barrel and per barrel data)
|
|||||||||
Sales by segment:
|
|
|
|
|
|
|||||
Specialty products:
|
|
|
|
|
|
|||||
Lubricating oils
|
$
|
538.7
|
|
|
$
|
575.6
|
|
|
(6.4
|
)%
|
Solvents
|
237.7
|
|
|
302.0
|
|
|
(21.3
|
)%
|
||
Waxes
|
128.7
|
|
|
136.9
|
|
|
(6.0
|
)%
|
||
Packaged and synthetic specialty products
(1)
|
244.7
|
|
|
261.5
|
|
|
(6.4
|
)%
|
||
Other
(2)
|
102.5
|
|
|
91.8
|
|
|
11.7
|
%
|
||
Total specialty products
|
$
|
1,252.3
|
|
|
$
|
1,367.8
|
|
|
(8.4
|
)%
|
Total specialty products sales volume (in barrels)
|
9,779,000
|
|
|
9,200,000
|
|
|
6.3
|
%
|
||
Average specialty products sales price per barrel
|
$
|
128.06
|
|
|
$
|
148.67
|
|
|
(13.9
|
)%
|
|
|
|
|
|
|
|||||
Fuel products:
|
|
|
|
|
|
|||||
Gasoline
|
$
|
844.3
|
|
|
$
|
1,002.4
|
|
|
(15.8
|
)%
|
Diesel
|
748.7
|
|
|
773.2
|
|
|
(3.2
|
)%
|
||
Jet fuel
|
117.5
|
|
|
136.5
|
|
|
(13.9
|
)%
|
||
Asphalt, heavy fuel oils and other
(3)
|
451.8
|
|
|
471.0
|
|
|
(4.1
|
)%
|
||
Hedging activities
|
59.7
|
|
|
179.4
|
|
|
(66.7
|
)%
|
||
Total fuel products
|
$
|
2,222.0
|
|
|
$
|
2,562.5
|
|
|
(13.3
|
)%
|
Total fuel products sales volume (in barrels)
|
41,527,000
|
|
|
36,869,000
|
|
|
12.6
|
%
|
||
Average fuel products sales price per barrel (excluding hedging activities)
|
$
|
52.07
|
|
|
$
|
64.64
|
|
|
(19.4
|
)%
|
Average fuel products sales price per barrel (including hedging activities)
|
$
|
53.51
|
|
|
$
|
69.50
|
|
|
(23.0
|
)%
|
|
|
|
|
|
|
|||||
Total sales
|
$
|
3,474.3
|
|
|
$
|
3,930.3
|
|
|
(11.6
|
)%
|
Total specialty and fuel products sales volume (in barrels)
|
51,306,000
|
|
|
46,069,000
|
|
|
11.4
|
%
|
|
(1)
|
Represents packaged and synthetic specialty products at the Royal Purple, Bel-Ray and Calumet Packaging.
|
(2)
|
Represents (a) by-products, including fuels and asphalt, produced in connection with the production of specialty products at the Princeton and Cotton Valley refineries and Dickinson and Karns City facilities and (b) polyolester synthetic lubricants produced at the Missouri facility.
|
(3)
|
Represents asphalt, heavy fuel oils and other products produced in connection with the production of fuels at the Shreveport, San Antonio and Great Falls refineries and crude oil sales from the San Antonio refinery to third party customers.
|
|
Dollar Change
|
||
|
(In millions)
|
||
Sales price
|
$
|
(201.7
|
)
|
Volume
|
86.2
|
|
|
Total specialty products segment sales decrease
|
$
|
(115.5
|
)
|
|
Dollar Change
|
||
|
(In millions)
|
||
Sales price
|
$
|
(521.9
|
)
|
Hedging activities
|
(119.7
|
)
|
|
Volume
|
301.1
|
|
|
Total fuel products segment sales decrease
|
$
|
(340.5
|
)
|
|
Year Ended December 31,
|
|||||||||
|
2016
|
|
2015
|
|
% Change
|
|||||
|
(Dollars in millions, except per barrel data)
|
|||||||||
Gross profit by segment:
|
|
|
|
|
|
|||||
Specialty products:
|
|
|
|
|
|
|||||
Gross profit
|
$
|
338.1
|
|
|
$
|
370.2
|
|
|
(8.7
|
)%
|
Percentage of sales
|
27.0
|
%
|
|
27.1
|
%
|
|
|
|||
Specialty products gross profit per barrel
|
$
|
34.57
|
|
|
$
|
40.24
|
|
|
(14.1
|
)%
|
Fuel products:
|
|
|
|
|
|
|||||
Gross profit (loss) excluding hedging activities
|
$
|
39.8
|
|
|
$
|
157.1
|
|
|
(74.7
|
)%
|
Hedging activities
|
8.4
|
|
|
9.1
|
|
|
(7.7
|
)%
|
||
Gross profit
|
$
|
48.2
|
|
|
$
|
166.2
|
|
|
(71.0
|
)%
|
Percentage of sales
|
2.2
|
%
|
|
6.5
|
%
|
|
|
|||
Fuel products gross profit per barrel (excluding hedging activities)
|
$
|
0.96
|
|
|
$
|
4.26
|
|
|
(77.5
|
)%
|
Fuel products gross profit per barrel (including hedging activities)
|
$
|
1.16
|
|
|
$
|
4.51
|
|
|
(74.3
|
)%
|
Total gross profit
|
$
|
386.3
|
|
|
$
|
536.4
|
|
|
(28.0
|
)%
|
Percentage of sales
|
11.1
|
%
|
|
13.6
|
%
|
|
|
|
Dollar Change
|
||
|
(In millions)
|
||
2015 reported gross profit
|
$
|
370.2
|
|
Sales price
|
(201.7
|
)
|
|
Operating costs
|
(4.9
|
)
|
|
Cost of materials
|
89.3
|
|
|
LCM inventory adjustment
|
47.4
|
|
|
Volume
|
35.3
|
|
|
LIFO inventory layer liquidation
|
2.5
|
|
|
2016 reported gross profit
|
$
|
338.1
|
|
|
Dollar Change
|
||
|
(In millions)
|
||
2015 reported gross profit
|
$
|
166.2
|
|
Sales price
|
(521.9
|
)
|
|
Operating costs
|
(39.4
|
)
|
|
LIFO inventory layer adjustment
|
(5.9
|
)
|
|
Hedging activities
|
(0.7
|
)
|
|
Cost of materials
|
285.5
|
|
|
Volume
|
65.1
|
|
|
LCM inventory layer liquidation
|
58.0
|
|
|
RINs expense
|
41.3
|
|
|
2016 reported gross profit
|
$
|
48.2
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Derivative gain reflected in sales
|
$
|
59.7
|
|
|
$
|
179.4
|
|
Derivative loss reflected in cost of sales
|
(53.3
|
)
|
|
(167.3
|
)
|
||
Derivative gain reflected in gross profit
|
$
|
6.4
|
|
|
$
|
12.1
|
|
|
|
|
|
||||
Realized gain (loss) on derivative instruments
|
$
|
(24.0
|
)
|
|
$
|
8.1
|
|
Unrealized gain (loss) on derivative instruments
|
19.9
|
|
|
(39.5
|
)
|
||
Total derivative gain (loss) reflected in the consolidated statements of operations
|
$
|
2.3
|
|
|
$
|
(19.3
|
)
|
Total gain (loss) on commodity derivative settlements
|
$
|
(24.0
|
)
|
|
$
|
10.2
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
(26.5
|
)
|
|
$
|
4.1
|
|
|
$
|
376.4
|
|
Net cash provided by (used in) investing activities
|
453.4
|
|
|
(154.2
|
)
|
|
(389.0
|
)
|
|||
Net cash provided by financing activities
|
83.2
|
|
|
148.7
|
|
|
9.7
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
510.1
|
|
|
$
|
(1.4
|
)
|
|
$
|
(2.9
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Capital improvement expenditures
|
$
|
23.4
|
|
|
$
|
67.6
|
|
|
$
|
311.7
|
|
Replacement capital expenditures
|
30.5
|
|
|
20.0
|
|
|
28.9
|
|
|||
Environmental capital expenditures
|
11.5
|
|
|
9.3
|
|
|
15.3
|
|
|||
Turnaround capital expenditures
|
14.5
|
|
|
8.7
|
|
|
19.3
|
|
|||
Joint venture contributions, net
(1)
|
—
|
|
|
16.7
|
|
|
50.2
|
|
|||
Total
|
$
|
79.9
|
|
|
$
|
122.3
|
|
|
$
|
425.4
|
|
|
(1)
|
Includes proceeds from sale of unconsolidated affiliates and return of capital.
|
•
|
a
$900.0 million
senior secured revolving credit facility maturing in
July 2019
, subject to borrowing base limitations, with a maximum letter of credit sublimit equal to
$600.0 million
, which amount may be increased to
90%
of revolver commitments in effect with the consent of the Agent (as defined in the revolving credit agreement) (“revolving credit facility”). On February 23, 2018, we entered into a
$600.0 million
amended and restated senior secured revolving credit facility maturing in February 2023, subject to borrowing base limitations, with a maximum letter of credit sublimit equal to
$300.0 million
, which amount may be increased to
90%
of revolver commitments in effect with the consent of the Agent (as defined in the amended and restated revolving credit agreement);
|
•
|
$900.0 million
of 6.50% senior notes due 2021 (“2021 Notes”);
|
•
|
$350.0 million
of 7.625% senior notes due 2022 (“2022 Notes”);
|
•
|
$325.0 million
of 7.75% senior notes due 2023 (“2023 Notes”); and
|
•
|
$400.0 million
of 11.50% senior secured notes due 2021 (“2021 Secured Notes”).
|
Closing Date
|
|
Number of Common Units Offered
|
|
Price
per Unit
|
|
Net
Proceeds
(1)
|
|
General Partner Contribution
(2)
|
|
Underwriting Discount
|
|
Use of Proceeds
|
|||||||||
March 13, 2015
|
|
6,000,000
|
|
|
$
|
26.75
|
|
|
$
|
153.9
|
|
|
$
|
3.3
|
|
|
$
|
6.4
|
|
|
Net proceeds were used to redeem a portion of the 2020 Notes and to repay borrowings under the revolving credit facility.
|
|
(1)
|
Proceeds are net of underwriting discounts, commissions and expenses but before our general partner’s capital contribution.
|
(2)
|
Our general partner contributions were made to retain its
2%
general partner interest.
|
Quarter Ended
|
|
Declaration Date
|
|
Record Date
|
|
Distribution Date
|
|
Quarterly Distribution
per Unit
|
|
Aggregate Quarterly Distribution
|
||||
December 31, 2015
|
|
January 19, 2016
|
|
February 2, 2016
|
|
February 12, 2016
|
|
$
|
0.685
|
|
|
$
|
57.4
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
|
Total
|
|
Less Than
1 Year
|
|
1–3
Years
|
|
3–5
Years
|
|
More Than
5 Years
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Operating Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest on long-term and short-term debt at contractual rates and maturities
(1)
|
$
|
706.1
|
|
|
$
|
167.1
|
|
|
$
|
326.8
|
|
|
$
|
154.3
|
|
|
$
|
57.9
|
|
Operating lease obligations
(2)
|
97.4
|
|
|
31.4
|
|
|
38.4
|
|
|
16.8
|
|
|
10.8
|
|
|||||
Letters of credit
(3)
|
67.3
|
|
|
67.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase commitments
(4)
|
571.5
|
|
|
297.5
|
|
|
147.8
|
|
|
42.0
|
|
|
84.2
|
|
|||||
Employment agreements
(5)
|
0.9
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Financing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Obligations under inventory financing agreements
|
105.5
|
|
|
105.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital lease obligations
|
44.0
|
|
|
2.7
|
|
|
2.2
|
|
|
2.2
|
|
|
36.9
|
|
|||||
Long-term debt obligations, excluding capital lease obligations
|
1,981.8
|
|
|
351.4
|
|
|
3.1
|
|
|
1,302.3
|
|
|
325.0
|
|
|||||
Total obligations
|
$
|
3,574.5
|
|
|
$
|
1,023.8
|
|
|
$
|
518.3
|
|
|
$
|
1,517.6
|
|
|
$
|
514.8
|
|
|
(1)
|
Interest on long-term and short-term debt at contractual rates and maturities relates primarily to interest on our senior notes, revolving credit facility interest and fees, and interest on our capital lease obligations, which excludes the adjustment for the interest rate swap agreement.
|
(2)
|
We have various operating leases primarily for railcars, the use of land, storage tanks, compressor stations, equipment, precious metals and office facilities that extend through
July 2055
.
|
(3)
|
Letters of credit primarily supporting crude oil and feedstock purchases and precious metals leasing.
|
(4)
|
Purchase commitments consist primarily of obligations to purchase fixed volumes of crude oil, other feedstocks and finished products for resale from various suppliers based on current market prices at the time of delivery.
|
(5)
|
Certain employment agreements may be terminated under certain circumstances or at certain dates prior to expiration. We expect our contracts will be renewed or replaced with similar agreements upon their expiration. Amounts due under the contracts assume the contracts are not terminated prior to their expiration.
|
•
|
Future margins on products produced and sold
. Our estimates of future product margins are based on our analysis of various supply and demand factors, which include, among other things, industry-wide capacity, our planned utilization rate, end-user demand, capital expenditures and economic conditions. Such estimates are consistent with those used in our planning and capital investment reviews.
|
•
|
Future capital requirements
. These are based on authorized spending and internal forecasts.
|
•
|
Discount rate commensurate with the risks involved
. We apply a discount rate to our cash flows based on a variety of factors, including market and economic conditions, operational risk, regulatory risk and political risk. This discount rate is also compared to recent observable market transactions, if possible. A higher discount rate decreases the net present value of cash flows.
|
•
|
The Company’s financial projections for its reporting units are based on its analysis of various supply and demand factors which include, among other things, industry-wide capacity, its planned utilization rate, end-user demand, crack spreads, capital expenditures and economic conditions. Such estimates are consistent with those used in the Company’s planning and capital investment reviews and include recent historical prices and published forward prices.
|
•
|
The discount rate used to measure the present value of the projected future cash flows is based on a variety of factors, including market and economic conditions, operational risk, regulatory risk and political risk. This discount rate is also compared to recent observable market transactions, if possible.
|
•
|
Future margins on products produced and sold
. Our estimates of future product margins are based on our analysis of various supply and demand factors, which include, among other things, industry-wide capacity, our planned utilization rate, end-user demand, crack spreads, capital expenditures and economic conditions. Such estimates are consistent with those used in our
planning and capital investment reviews and include recent historical prices and published forward prices.
|
•
|
Discount rate commensurate with the risks involved
. We apply a discount rate to our cash flows
based on a variety of factors, including market and economic conditions, operational risk, regulatory risk and political risk. This discount rate is also compared to recent observable market transactions, if possible.
A higher discount rate decreases the net present value of cash flows.
|
•
|
Future capital requirements
. These are based on authorized spending and internal forecasts.
|
|
In millions
|
||
Gasoline crack spread swaps
|
$
|
(0.8
|
)
|
Diesel crack spread swaps
|
$
|
(0.8
|
)
|
•
|
crude oil purchases and sales;
|
•
|
refined product sales and purchases;
|
•
|
natural gas purchases;
|
•
|
precious metals; and
|
•
|
fluctuations in the value of crude oil between geographic regions and between the different types of crude oil such as NYMEX WTI, Light Louisiana Sweet (“LLS”), Western Canadian Select (“WCS”), Mixed Sweet Blend (“MSW”) and ICE Brent (“Brent”).
|
Crack Spread Swap Contracts by Expiration Dates
|
Barrels
|
|
BPD
|
|
Average Implied
Crack Spread
($/Bbl) |
||||
First Quarter 2018
|
1,680,000
|
|
|
18,667
|
|
|
$
|
14.92
|
|
Total
|
1,680,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
14.92
|
|
Crude Oil Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2018
|
28,000
|
|
|
311
|
|
|
$
|
48.25
|
|
Total
|
28,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
48.25
|
|
|
Sales
|
|
Cost of Sales
|
||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
||||||||||||||
Specialty Products:
|
|
|
|
|
|
|
|
||||||||
$1.00 change in per barrel price of crude oil
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.4
|
|
|
$
|
9.8
|
|
$0.50 change in MMBtu (one million British Thermal Units) of natural gas
(2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6.6
|
|
|
$
|
7.2
|
|
Fuel Products:
|
|
|
|
|
|
|
|
||||||||
$1.00 change in per barrel price of crude oil
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28.1
|
|
|
$
|
29.8
|
|
$1.00 change in per barrel selling price of gasoline, diesel and jet fuel
(1)
|
$
|
28.1
|
|
|
$
|
29.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(1)
|
Based on our
2017
and
2016
sales volumes.
|
(2)
|
Based on our results for the years ended
December 31, 2017
and
2016
.
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
|
(In millions)
|
||||||||||||||
Financial Instrument:
|
|
|
|
|
|
|
|
||||||||
2021 Unsecured Notes
|
$
|
896.4
|
|
|
$
|
892.5
|
|
|
$
|
763.9
|
|
|
$
|
890.2
|
|
2022 Unsecured Notes
|
$
|
352.4
|
|
|
$
|
344.8
|
|
|
$
|
296.0
|
|
|
$
|
343.7
|
|
2023 Unsecured Notes
|
$
|
327.7
|
|
|
$
|
319.1
|
|
|
$
|
274.2
|
|
|
$
|
318.3
|
|
2021 Secured Notes
|
$
|
456.4
|
|
|
$
|
387.6
|
|
|
$
|
458.8
|
|
|
$
|
384.5
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions, except unit data)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
164.3
|
|
|
$
|
4.2
|
|
Restricted cash
|
350.0
|
|
|
—
|
|
||
Accounts receivable, net:
|
|
|
|
||||
Trade, less allowance for doubtful accounts of $7.0 million and $0.9 million, respectively
|
265.4
|
|
|
182.7
|
|
||
Other
|
88.7
|
|
|
22.2
|
|
||
|
354.1
|
|
|
204.9
|
|
||
Inventories
|
314.4
|
|
|
357.8
|
|
||
Derivative assets
|
—
|
|
|
0.8
|
|
||
Prepaid expenses and other current assets
|
8.7
|
|
|
10.6
|
|
||
Discontinued operations, current assets
|
—
|
|
|
62.6
|
|
||
Total current assets
|
1,191.5
|
|
|
640.9
|
|
||
Property, plant and equipment, net
|
1,159.2
|
|
|
1,632.4
|
|
||
Investment in unconsolidated affiliates
|
35.0
|
|
|
9.6
|
|
||
Goodwill
|
171.4
|
|
|
177.2
|
|
||
Other intangible assets, net
|
107.9
|
|
|
133.5
|
|
||
Other noncurrent assets, net
|
23.8
|
|
|
40.3
|
|
||
Discontinued operations, noncurrent assets
|
—
|
|
|
91.3
|
|
||
Total assets
|
$
|
2,688.8
|
|
|
$
|
2,725.2
|
|
LIABILITIES AND PARTNERS’ CAPITAL
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
282.3
|
|
|
$
|
275.9
|
|
Accrued interest payable
|
52.5
|
|
|
52.5
|
|
||
Accrued salaries, wages and benefits
|
35.9
|
|
|
11.1
|
|
||
Other taxes payable
|
16.1
|
|
|
20.4
|
|
||
Obligations under inventory financing agreements
|
103.1
|
|
|
—
|
|
||
Other current liabilities
|
73.7
|
|
|
99.6
|
|
||
Current portion of long-term debt
|
354.1
|
|
|
3.5
|
|
||
Derivative liabilities
|
6.0
|
|
|
14.8
|
|
||
Discontinued operations, current liabilities
|
2.0
|
|
|
20.4
|
|
||
Total current liabilities
|
925.7
|
|
|
498.2
|
|
||
Pension and postretirement benefit obligations
|
3.1
|
|
|
11.3
|
|
||
Other long-term liabilities
|
1.9
|
|
|
3.3
|
|
||
Long-term debt, less current portion
|
1,638.2
|
|
|
1,993.7
|
|
||
Total liabilities
|
2,568.9
|
|
|
2,506.5
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Partners’ capital:
|
|
|
|
||||
Limited partners’ interest (76,788,801 units and 76,392,258 units, issued and outstanding at December 31, 2017 and 2016, respectively)
|
113.3
|
|
|
211.2
|
|
||
General partner’s interest
|
13.8
|
|
|
15.8
|
|
||
Accumulated other comprehensive loss
|
(7.2
|
)
|
|
(8.3
|
)
|
||
Total partners’ capital
|
119.9
|
|
|
218.7
|
|
||
Total liabilities and partners’ capital
|
$
|
2,688.8
|
|
|
$
|
2,725.2
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions, except unit and per unit data)
|
||||||||||
Sales
|
$
|
3,763.8
|
|
|
$
|
3,474.3
|
|
|
$
|
3,930.3
|
|
Cost of sales
|
3,265.6
|
|
|
3,088.0
|
|
|
3,393.9
|
|
|||
Gross profit
|
498.2
|
|
|
386.3
|
|
|
536.4
|
|
|||
Operating costs and expenses:
|
|
|
|
|
|
||||||
Selling
|
65.7
|
|
|
69.8
|
|
|
71.8
|
|
|||
General and administrative
|
138.7
|
|
|
105.8
|
|
|
125.9
|
|
|||
Transportation
|
137.1
|
|
|
154.3
|
|
|
153.6
|
|
|||
Taxes other than income taxes
|
24.1
|
|
|
19.3
|
|
|
17.1
|
|
|||
Asset impairment
|
207.3
|
|
|
35.7
|
|
|
—
|
|
|||
Gain on sale of business, net
|
(236.0
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
3.3
|
|
|
1.7
|
|
|
10.8
|
|
|||
Operating income (loss)
|
158.0
|
|
|
(0.3
|
)
|
|
157.2
|
|
|||
|
|
|
|
|
|
||||||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(183.1
|
)
|
|
(161.7
|
)
|
|
(104.9
|
)
|
|||
Debt extinguishment costs
|
—
|
|
|
—
|
|
|
(46.6
|
)
|
|||
Loss on derivative instruments
|
(9.6
|
)
|
|
(4.1
|
)
|
|
(31.4
|
)
|
|||
Loss from unconsolidated affiliates
|
—
|
|
|
(18.3
|
)
|
|
(61.1
|
)
|
|||
Loss on sale of unconsolidated affiliates
|
—
|
|
|
(113.4
|
)
|
|
—
|
|
|||
Other
|
3.3
|
|
|
1.2
|
|
|
1.6
|
|
|||
Total other expense
|
(189.4
|
)
|
|
(296.3
|
)
|
|
(242.4
|
)
|
|||
Net loss from continuing operations before income taxes
|
(31.4
|
)
|
|
(296.6
|
)
|
|
(85.2
|
)
|
|||
Income tax expense (benefit) from continuing operations
|
(0.1
|
)
|
|
0.2
|
|
|
0.2
|
|
|||
Net loss from continuing operations
|
(31.3
|
)
|
|
(296.8
|
)
|
|
(85.4
|
)
|
|||
Net loss from discontinued operations, net of income taxes
|
(72.5
|
)
|
|
(31.8
|
)
|
|
(54.0
|
)
|
|||
Net loss
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
|
$
|
(139.4
|
)
|
Allocation of net loss:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
|
$
|
(139.4
|
)
|
Less:
|
|
|
|
|
|
||||||
General partner’s interest in net loss
|
(2.1
|
)
|
|
(6.6
|
)
|
|
(2.8
|
)
|
|||
General partner’s incentive distribution rights
|
—
|
|
|
—
|
|
|
16.8
|
|
|||
Net loss available to limited partners
|
$
|
(101.7
|
)
|
|
$
|
(322.0
|
)
|
|
$
|
(153.4
|
)
|
Weighted average limited partner units outstanding:
|
|
|
|
|
|
||||||
Basic and diluted
|
77,598,950
|
|
|
77,043,935
|
|
|
74,896,096
|
|
|||
|
|
|
|
|
|
||||||
Limited partners’ interest basic and diluted net loss per unit:
|
|
|
|
|
|
||||||
From continuing operations
|
$
|
(0.40
|
)
|
|
$
|
(3.77
|
)
|
|
$
|
(1.34
|
)
|
From discontinued operations
|
(0.91
|
)
|
|
(0.41
|
)
|
|
(0.71
|
)
|
|||
Limited partners’ interest
|
$
|
(1.31
|
)
|
|
$
|
(4.18
|
)
|
|
$
|
(2.05
|
)
|
|
|
|
|
|
|
||||||
Cash distributions declared per limited partner unit
|
$
|
—
|
|
|
$
|
0.685
|
|
|
$
|
2.74
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Net loss
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
|
$
|
(139.4
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Cash flow hedges:
|
|
|
|
|
|
||||||
Cash flow hedge gain reclassified to net loss
|
—
|
|
|
(6.4
|
)
|
|
(12.1
|
)
|
|||
Change in fair value of cash flow hedges
|
—
|
|
|
—
|
|
|
(7.3
|
)
|
|||
Defined benefit pension and retiree health benefit plans
|
1.1
|
|
|
(0.3
|
)
|
|
4.7
|
|
|||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|||
Total other comprehensive income (loss)
|
1.1
|
|
|
(6.7
|
)
|
|
(15.3
|
)
|
|||
Comprehensive loss attributable to partners’ capital
|
$
|
(102.7
|
)
|
|
$
|
(335.3
|
)
|
|
$
|
(154.7
|
)
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
|
Partners’ Capital
|
|
Total
|
||||||||||
|
|
General
Partner
|
|
Limited Partners
|
|||||||||||
|
|
|
|||||||||||||
|
(In millions)
|
||||||||||||||
Balance at December 31, 2014
|
$
|
13.7
|
|
|
$
|
30.6
|
|
|
$
|
765.9
|
|
|
$
|
810.2
|
|
Other comprehensive loss
|
(15.3
|
)
|
|
—
|
|
|
—
|
|
|
(15.3
|
)
|
||||
Net income (loss)
|
—
|
|
|
14.0
|
|
|
(153.4
|
)
|
|
(139.4
|
)
|
||||
Common units repurchased for phantom unit grants
|
—
|
|
|
—
|
|
|
(5.5
|
)
|
|
(5.5
|
)
|
||||
Issuance of phantom units
|
—
|
|
|
—
|
|
|
1.9
|
|
|
1.9
|
|
||||
Settlement of tax withholdings on equity-based incentive compensation
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
(1.5
|
)
|
||||
Reclassification of Liability Awards to equity
|
—
|
|
|
—
|
|
|
7.9
|
|
|
7.9
|
|
||||
Amortization of phantom units
|
—
|
|
|
—
|
|
|
2.4
|
|
|
2.4
|
|
||||
Proceeds from public offerings of common units, net
|
—
|
|
|
—
|
|
|
164.1
|
|
|
164.1
|
|
||||
Contributions from Calumet GP, LLC
|
—
|
|
|
3.5
|
|
|
—
|
|
|
3.5
|
|
||||
Distributions to partners
|
—
|
|
|
(20.6
|
)
|
|
(203.8
|
)
|
|
(224.4
|
)
|
||||
Balance at December 31, 2015
|
$
|
(1.6
|
)
|
|
$
|
27.5
|
|
|
$
|
578.0
|
|
|
$
|
603.9
|
|
Other comprehensive loss
|
(6.7
|
)
|
|
—
|
|
|
—
|
|
|
(6.7
|
)
|
||||
Net loss
|
—
|
|
|
(6.6
|
)
|
|
(322.0
|
)
|
|
(328.6
|
)
|
||||
Issuance of phantom units
|
—
|
|
|
—
|
|
|
4.1
|
|
|
4.1
|
|
||||
Settlement of tax withholdings on equity-based incentive compensation
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
|
(2.4
|
)
|
||||
Amortization of phantom units
|
—
|
|
|
—
|
|
|
5.6
|
|
|
5.6
|
|
||||
Contributions from Calumet GP, LLC
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Distributions to partners
|
—
|
|
|
(5.3
|
)
|
|
(52.1
|
)
|
|
(57.4
|
)
|
||||
Balance at December 31, 2016
|
$
|
(8.3
|
)
|
|
$
|
15.8
|
|
|
$
|
211.2
|
|
|
$
|
218.7
|
|
Other comprehensive income
|
1.1
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
||||
Net loss
|
—
|
|
|
(2.1
|
)
|
|
(101.7
|
)
|
|
(103.8
|
)
|
||||
Settlement of tax withholdings on equity-based incentive compensation
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
(0.9
|
)
|
||||
Amortization of phantom units
|
—
|
|
|
—
|
|
|
4.7
|
|
|
4.7
|
|
||||
Contributions from Calumet GP, LLC
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Balance at December 31, 2017
|
$
|
(7.2
|
)
|
|
$
|
13.8
|
|
|
$
|
113.3
|
|
|
$
|
119.9
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
|
$
|
(139.4
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Net loss from discontinued operations
|
72.5
|
|
|
31.8
|
|
|
54.0
|
|
|||
Depreciation and amortization
|
154.8
|
|
|
152.0
|
|
|
122.6
|
|
|||
Amortization of turnaround costs
|
24.3
|
|
|
33.2
|
|
|
29.0
|
|
|||
Non-cash interest expense
|
10.2
|
|
|
9.6
|
|
|
6.6
|
|
|||
Non-cash debt extinguishment costs
|
—
|
|
|
—
|
|
|
9.1
|
|
|||
Unrealized (gain) loss on derivative instruments
|
(3.6
|
)
|
|
(19.9
|
)
|
|
39.5
|
|
|||
Asset impairment
|
207.3
|
|
|
35.7
|
|
|
—
|
|
|||
Equity-based compensation
|
11.6
|
|
|
5.6
|
|
|
9.8
|
|
|||
Lower of cost or market inventory adjustment
|
(30.6
|
)
|
|
(38.4
|
)
|
|
67.0
|
|
|||
Loss from unconsolidated affiliates
|
—
|
|
|
18.3
|
|
|
61.1
|
|
|||
Loss on sale of unconsolidated affiliates
|
—
|
|
|
113.4
|
|
|
—
|
|
|||
Gain on sale of business
|
(236.0
|
)
|
|
—
|
|
|
—
|
|
|||
Other non-cash activities
|
10.2
|
|
|
5.4
|
|
|
10.5
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(158.9
|
)
|
|
(38.9
|
)
|
|
52.6
|
|
|||
Inventories
|
(8.5
|
)
|
|
41.5
|
|
|
25.0
|
|
|||
Prepaid expenses and other current assets
|
(0.8
|
)
|
|
(4.2
|
)
|
|
0.6
|
|
|||
Derivative activity
|
(0.5
|
)
|
|
(19.0
|
)
|
|
(7.0
|
)
|
|||
Turnaround costs
|
(14.5
|
)
|
|
(8.7
|
)
|
|
(19.3
|
)
|
|||
Other assets
|
(0.5
|
)
|
|
(0.6
|
)
|
|
—
|
|
|||
Accounts payable
|
70.6
|
|
|
18.4
|
|
|
(77.3
|
)
|
|||
Accrued interest payable
|
0.9
|
|
|
21.4
|
|
|
(6.5
|
)
|
|||
Accrued salaries, wages and benefits
|
18.0
|
|
|
(17.8
|
)
|
|
10.7
|
|
|||
Other taxes payable
|
0.9
|
|
|
3.6
|
|
|
1.8
|
|
|||
Other liabilities
|
(24.2
|
)
|
|
(16.6
|
)
|
|
74.5
|
|
|||
Pension and postretirement benefit obligations
|
(2.7
|
)
|
|
(2.0
|
)
|
|
(2.3
|
)
|
|||
Net cash provided by (used in) discontinued operating activities
|
(23.2
|
)
|
|
8.9
|
|
|
53.8
|
|
|||
Net cash provided by (used in) operating activities
|
(26.5
|
)
|
|
4.1
|
|
|
376.4
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
(70.0
|
)
|
|
(139.2
|
)
|
|
(332.1
|
)
|
|||
Investment in unconsolidated affiliates
|
—
|
|
|
(45.7
|
)
|
|
(50.2
|
)
|
|||
Proceeds from sale of unconsolidated affiliates
|
—
|
|
|
29.0
|
|
|
—
|
|
|||
Proceeds from sale of property, plant and equipment
|
0.3
|
|
|
1.7
|
|
|
0.1
|
|
|||
Proceeds from sale of business, net
|
484.5
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) discontinued investing activities
|
38.6
|
|
|
—
|
|
|
(6.8
|
)
|
|||
Net cash provided by (used in) investing activities
|
453.4
|
|
|
(154.2
|
)
|
|
(389.0
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from borrowings — revolving credit facility
|
901.2
|
|
|
1,187.1
|
|
|
1,390.0
|
|
|||
Repayments of borrowings — revolving credit facility
|
(911.2
|
)
|
|
(1,287.9
|
)
|
|
(1,429.8
|
)
|
|||
Proceeds from borrowings — senior notes
|
—
|
|
|
393.1
|
|
|
322.6
|
|
|||
Repayments of borrowings — senior notes
|
—
|
|
|
—
|
|
|
(275.0
|
)
|
|||
Proceeds from borrowings — related party note
|
—
|
|
|
—
|
|
|
75.0
|
|
|||
Repayments of borrowings — related party note
|
—
|
|
|
(75.0
|
)
|
|
—
|
|
|||
Payments on capital lease obligations
|
(2.5
|
)
|
|
(8.5
|
)
|
|
(8.0
|
)
|
|||
Proceeds from inventory financing
|
100.1
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from (payments on) other financing obligations
|
(2.3
|
)
|
|
8.5
|
|
|
(2.5
|
)
|
|||
Proceeds from public offerings of common units, net
|
—
|
|
|
—
|
|
|
164.1
|
|
|||
Debt issuance costs
|
(2.2
|
)
|
|
(11.4
|
)
|
|
(5.6
|
)
|
|||
Contributions from Calumet GP, LLC
|
0.1
|
|
|
0.2
|
|
|
3.5
|
|
|||
Distributions to partners
|
—
|
|
|
(57.4
|
)
|
|
(224.6
|
)
|
|||
Net cash provided by financing activities
|
83.2
|
|
|
148.7
|
|
|
9.7
|
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
510.1
|
|
|
(1.4
|
)
|
|
(2.9
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
4.2
|
|
|
5.6
|
|
|
8.5
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
514.3
|
|
|
$
|
4.2
|
|
|
$
|
5.6
|
|
Cash and cash equivalents
|
$
|
164.3
|
|
|
$
|
4.2
|
|
|
$
|
5.6
|
|
Restricted cash
|
$
|
350.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Interest paid, net of capitalized interest
|
$
|
163.7
|
|
|
$
|
130.2
|
|
|
$
|
120.6
|
|
Income taxes paid
|
$
|
0.4
|
|
|
$
|
1.2
|
|
|
$
|
1.1
|
|
Supplemental disclosure of non-cash investing and financing activities
|
|
|
|
|
|
||||||
Non-cash consideration received for the sale of Anchor
|
$
|
25.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash property, plant and equipment additions
|
$
|
9.1
|
|
|
$
|
14.0
|
|
|
$
|
56.5
|
|
Non-cash capital lease
|
$
|
—
|
|
|
$
|
2.3
|
|
|
$
|
4.4
|
|
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Beginning balance
|
$
|
0.9
|
|
|
$
|
0.9
|
|
|
$
|
1.4
|
|
Provision
|
6.1
|
|
|
0.3
|
|
|
—
|
|
|||
Write-offs, net
|
—
|
|
|
(0.3
|
)
|
|
(0.5
|
)
|
|||
Ending balance
|
$
|
7.0
|
|
|
$
|
0.9
|
|
|
$
|
0.9
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Titled
Inventory |
|
Supply & Offtake
Agreements (1) |
|
Total
|
|
Titled
Inventory |
|
Supply & Offtake
Agreements (1) |
|
Total
|
||||||||||||
Raw materials
|
$
|
42.0
|
|
|
$
|
17.6
|
|
|
$
|
59.6
|
|
|
$
|
57.4
|
|
|
$
|
—
|
|
|
$
|
57.4
|
|
Work in process
|
34.4
|
|
|
23.7
|
|
|
58.1
|
|
|
74.2
|
|
|
—
|
|
|
74.2
|
|
||||||
Finished goods
|
139.4
|
|
|
57.3
|
|
|
196.7
|
|
|
226.2
|
|
|
—
|
|
|
226.2
|
|
||||||
|
$
|
215.8
|
|
|
$
|
98.6
|
|
|
$
|
314.4
|
|
|
$
|
357.8
|
|
|
$
|
—
|
|
|
$
|
357.8
|
|
|
(1)
|
Amounts represent LIFO value and do not necessarily represent the value at which the inventory was sold. Refer to
Note 8
for further information.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Land
|
$
|
13.8
|
|
|
$
|
19.6
|
|
Buildings and improvements (10 to 40 years)
|
36.9
|
|
|
69.0
|
|
||
Machinery and equipment (10 to 20 years)
|
1,622.8
|
|
|
2,055.3
|
|
||
Furniture and fixtures (5 to 10 years)
|
61.5
|
|
|
33.2
|
|
||
Assets under capital leases (4 to 26 years)
(1)
|
18.2
|
|
|
51.3
|
|
||
Construction-in-progress
|
21.4
|
|
|
49.0
|
|
||
|
1,774.6
|
|
|
2,277.4
|
|
||
Less accumulated depreciation
|
(615.4
|
)
|
|
(645.0
|
)
|
||
|
$
|
1,159.2
|
|
|
$
|
1,632.4
|
|
|
(1)
|
Assets under capital leases primarily relate to machinery and equipment.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Sales
|
|
$
|
228.6
|
|
|
$
|
125.1
|
|
|
$
|
282.5
|
|
Cost of sales
|
|
(168.1
|
)
|
|
(103.1
|
)
|
|
(224.3
|
)
|
|||
Selling
|
|
(45.9
|
)
|
|
(40.9
|
)
|
|
(74.2
|
)
|
|||
General and administrative
|
|
(4.5
|
)
|
|
(4.8
|
)
|
|
(9.6
|
)
|
|||
Asset impairment
|
|
—
|
|
|
—
|
|
|
(33.8
|
)
|
|||
Loss on sale of business, net
|
|
(62.6
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
|
(21.0
|
)
|
|
(16.0
|
)
|
|
(23.2
|
)
|
|||
Net loss from discontinued operations before income taxes
|
|
$
|
(73.5
|
)
|
|
$
|
(39.7
|
)
|
|
$
|
(82.6
|
)
|
Income tax benefit
(1)
|
|
(1.0
|
)
|
|
(7.9
|
)
|
|
(28.6
|
)
|
|||
Net loss from discontinued operations net of income taxes
|
|
$
|
(72.5
|
)
|
|
$
|
(31.8
|
)
|
|
$
|
(54.0
|
)
|
|
(1)
|
Income tax benefit for 2016 included a
$7.8 million
tax refund related to federal and state income taxes.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Sales
|
$
|
669.1
|
|
|
$
|
681.2
|
|
|
$
|
856.8
|
|
Gross profit
|
$
|
110.0
|
|
|
$
|
68.5
|
|
|
$
|
137.6
|
|
Net income before income taxes
|
$
|
99.3
|
|
|
$
|
54.5
|
|
|
$
|
121.0
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||
|
Investment
|
|
Percent Ownership
|
|
Investment
|
|
Percent Ownership
|
||||||
Pacific New Investment Limited
|
$
|
9.6
|
|
|
23.8
|
%
|
|
$
|
9.6
|
|
|
23.8
|
%
|
Fluid Holding Corp.
|
25.4
|
|
|
10
|
%
|
|
—
|
|
|
—
|
%
|
||
Total
|
$
|
35.0
|
|
|
|
|
$
|
9.6
|
|
|
|
•
|
The Company’s financial projections for its reporting units are based on its analysis of various supply and demand factors which include, among other things, industry-wide capacity, its planned utilization rate, end-user demand, crack spreads, capital expenditures and economic conditions. Such estimates are consistent with those used in the Company’s planning and capital investment reviews and include recent historical prices and published forward prices.
|
•
|
The discount rate used to measure the present value of the projected future cash flows is
based on a variety of factors, including market and economic conditions, operational risk, regulatory risk and political risk. This discount rate is also compared to recent observable market transactions, if possible.
|
|
Specialty
Products |
|
Fuel
Products |
|
Total
|
||||||
|
|
|
|||||||||
Net balance as of December 31, 2015
|
$
|
173.5
|
|
|
$
|
38.5
|
|
|
$
|
212.0
|
|
Impairment
(1)
|
(1.4
|
)
|
|
(33.4
|
)
|
|
(34.8
|
)
|
|||
Net balance as of December 31, 2016
|
$
|
172.1
|
|
|
$
|
5.1
|
|
|
$
|
177.2
|
|
Impairment
(1)
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
|||
Divestiture
(2)
|
—
|
|
|
(5.1
|
)
|
|
(5.1
|
)
|
|||
Net balance as of December 31, 2017
|
$
|
171.4
|
|
|
$
|
—
|
|
|
$
|
171.4
|
|
|
(1)
|
Total accumulated goodwill impairment as of
December 31, 2017
and
2016
, is
$35.5 million
and
$34.8 million
, respectively.
|
(2)
|
Divestiture relates to sale of the Superior Refinery. See
Note 4
for additional information.
|
|
Weighted Average Life (Years)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Gross Amount
|
|
Accumulated Amortization
|
|||||||||
Customer relationships
|
22
|
|
$
|
181.3
|
|
|
$
|
(107.6
|
)
|
|
$
|
186.7
|
|
|
$
|
(97.2
|
)
|
Tradenames
|
11
|
|
26.8
|
|
|
(13.8
|
)
|
|
26.8
|
|
|
(9.9
|
)
|
||||
Trade secrets
|
13
|
|
52.7
|
|
|
(35.1
|
)
|
|
52.7
|
|
|
(29.6
|
)
|
||||
Patents
|
12
|
|
1.6
|
|
|
(1.6
|
)
|
|
1.6
|
|
|
(1.5
|
)
|
||||
Royalty agreements
|
19
|
|
6.2
|
|
|
(2.6
|
)
|
|
6.2
|
|
|
(2.3
|
)
|
||||
|
19
|
|
$
|
268.6
|
|
|
$
|
(160.7
|
)
|
|
$
|
274.0
|
|
|
$
|
(140.5
|
)
|
Year
|
|
Amortization Amount
|
||
2018
|
|
$
|
19.9
|
|
2019
|
|
$
|
16.8
|
|
2020
|
|
$
|
14.0
|
|
2021
|
|
$
|
11.5
|
|
2022
|
|
$
|
9.4
|
|
Year
|
|
Operating
Leases
|
||
2018
|
|
$
|
31.4
|
|
2019
|
|
21.7
|
|
|
2020
|
|
16.7
|
|
|
2021
|
|
9.5
|
|
|
2022
|
|
7.3
|
|
|
Thereafter
|
|
10.8
|
|
|
Total
|
|
$
|
97.4
|
|
Year
|
|
Commitment
|
||
2018
|
|
$
|
297.5
|
|
2019
|
|
126.7
|
|
|
2020
|
|
21.1
|
|
|
2021
|
|
21.0
|
|
|
2022
|
|
21.0
|
|
|
Thereafter
|
|
84.2
|
|
|
Total
|
|
$
|
571.5
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Borrowings under amended and restated senior secured revolving credit agreement with third-party lenders, interest payments quarterly, borrowings due July 2019, weighted average interest rates of 8.4% and 4.8% at December 31, 2017 and 2016, respectively
|
$
|
0.2
|
|
|
$
|
10.2
|
|
Borrowings under 2021 Secured Notes, interest at a fixed rate of 11.5%, interest payments semiannually, borrowings due January 2021, effective interest rates of 12.3% and 12.2% for the year ended December 31, 2017 and 2016, respectively
|
400.0
|
|
|
400.0
|
|
||
Borrowings under 2021 Notes, interest at a fixed rate of 6.5%, interest payments semiannually, borrowings due April 2021, effective interest rate of 6.8% for each year ended December 31, 2017 and 2016
|
900.0
|
|
|
900.0
|
|
||
Borrowings under 2022 Notes, interest at a fixed rate of 7.625%, interest payments semiannually, borrowings due January 2022, effective interest rate of 8.0% for each year ended December 31, 2017 and 2016
(1)
|
352.1
|
|
|
352.5
|
|
||
Borrowings under 2023 Notes, interest at a fixed rate of 7.75%, interest payments semiannually, borrowings due April 2023, effective interest rate of 8.0% for each year ended December 31, 2017 and 2016
|
325.0
|
|
|
325.0
|
|
||
Other
|
6.6
|
|
|
8.0
|
|
||
Capital lease obligations, at various interest rates, interest and principal payments monthly through November 2034
|
44.0
|
|
|
46.5
|
|
||
Less unamortized debt issuance costs
(2)
|
(25.9
|
)
|
|
(33.2
|
)
|
||
Less unamortized discounts
|
(9.7
|
)
|
|
(11.8
|
)
|
||
Total long-term debt
|
1,992.3
|
|
|
1,997.2
|
|
||
Less current portion of long-term debt
(3)
|
354.1
|
|
|
3.5
|
|
||
|
$
|
1,638.2
|
|
|
$
|
1,993.7
|
|
|
(1)
|
The balance includes a fair value interest rate hedge adjustment, which increased the debt balance by
$2.1 million
and
$2.5 million
as of
December 31, 2017
and
2016
, respectively.
|
(2)
|
Deferred debt issuance costs are being amortized by the effective interest rate method over the lives of the related debt instruments. These amounts are net of accumulated amortization of
$21.8 million
and
$14.5 million
at
December 31, 2017
and
2016
, respectively.
|
(3)
|
The sale of the Superior Refinery resulted in
$350.0 million
of restricted cash and was based upon the value of collateral under the Company’s debt agreements. Under the indentures governing the Company’s senior notes, proceeds from Asset Sales (as defined in the indentures) can only be used for, among other things, to repay, redeem or repurchase debt; to make certain acquisitions or investments; and to make capital expenditures. These proceeds need to be used within one year of the Asset Sales (as defined in the indentures) and as such were recorded as current.
|
Quarterly Average Availability Percentage
|
|
Margin on Base Rate
Revolving Loans
|
|
Margin on LIBOR
Revolving Loans
|
≥ 66%
|
|
0.50%
|
|
1.50%
|
≥ 33% and < 66%
|
|
0.75%
|
|
1.75%
|
< 33%
|
|
1.00%
|
|
2.00%
|
Year
|
|
Capital Leases
|
||
2018
|
|
$
|
9.0
|
|
2019
|
|
7.4
|
|
|
2020
|
|
6.9
|
|
|
2021
|
|
6.9
|
|
|
2022
|
|
6.9
|
|
|
Thereafter
|
|
82.1
|
|
|
Total minimum lease payments
|
|
119.2
|
|
|
Less amount representing interest
|
|
75.2
|
|
|
Capital lease obligations
|
|
44.0
|
|
|
Less obligations due within one year
|
|
2.7
|
|
|
Long-term capital lease obligations
|
|
$
|
41.3
|
|
Year
|
|
Maturity
|
||
2018
|
|
$
|
354.1
|
|
2019
|
|
2.9
|
|
|
2020
|
|
2.4
|
|
|
2021
|
|
953.3
|
|
|
2022
|
|
351.2
|
|
|
Thereafter
|
|
361.9
|
|
|
Total
|
|
$
|
2,025.8
|
|
•
|
crude oil purchases and sales;
|
•
|
fuel product sales and purchases;
|
•
|
natural gas purchases;
|
•
|
precious metals purchases; and
|
•
|
fluctuations in the value of crude oil between geographic regions and between the different types of crude oil such as New York Mercantile Exchange West Texas Intermediate (“NYMEX WTI”), Light Louisiana Sweet (“LLS”), Western Canadian Select (“WCS”), Mixed Sweet Blend (“MSW”) and ICE Brent (“Brent”).
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Amounts of Assets Presented in the Consolidated Balance Sheets
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Amounts of Assets Presented in the Consolidated Balance Sheets
|
||||||||||||
Derivative instruments not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Specialty products segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Natural gas swaps
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
Fuel products segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Crude oil swaps
|
0.3
|
|
|
(0.3
|
)
|
|
—
|
|
|
10.3
|
|
|
(7.4
|
)
|
|
2.9
|
|
||||||
Crude oil basis swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|
(2.1
|
)
|
||||||
Crude oil percentage basis swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
||||||
Total derivative instruments
|
$
|
0.3
|
|
|
$
|
(0.3
|
)
|
|
$
|
—
|
|
|
$
|
10.5
|
|
|
$
|
(9.7
|
)
|
|
$
|
0.8
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Amounts of Liabilities Presented in the Consolidated Balance Sheets
|
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Amounts of Liabilities Presented in the Consolidated Balance Sheets
|
||||||||||||
Derivative instruments not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Specialty products segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Natural gas swaps
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1.2
|
)
|
|
$
|
0.1
|
|
|
$
|
(1.1
|
)
|
Fuel products segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Inventory financing obligation
|
(4.4
|
)
|
|
—
|
|
|
(4.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Crude oil swaps
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
(8.2
|
)
|
|
7.4
|
|
|
(0.8
|
)
|
||||||
Crude oil basis swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.1
|
)
|
|
2.1
|
|
|
(5.0
|
)
|
||||||
Crude oil percentage basis swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
0.1
|
|
|
(0.5
|
)
|
||||||
Gasoline swaps
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Gasoline crack spread swaps
|
(1.8
|
)
|
|
—
|
|
|
(1.8
|
)
|
|
(3.5
|
)
|
|
—
|
|
|
(3.5
|
)
|
||||||
Diesel swaps
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Diesel crack spread swaps
|
(4.1
|
)
|
|
—
|
|
|
(4.1
|
)
|
|
(1.4
|
)
|
|
—
|
|
|
(1.4
|
)
|
||||||
2/1/1 crack spread swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
(2.5
|
)
|
||||||
Total derivative instruments
|
$
|
(10.7
|
)
|
|
$
|
0.3
|
|
|
$
|
(10.4
|
)
|
|
$
|
(24.5
|
)
|
|
$
|
9.7
|
|
|
$
|
(14.8
|
)
|
|
Amount of Gain (Loss)
Recognized in Realized Loss on Derivative Instruments
|
|
Amount of Gain (Loss)
Recognized in Unrealized
Gain on Derivative Instruments
|
||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||
Type of Derivative
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Specialty products segment:
|
|
|
|
|
|
|
|
||||||||
Natural gas swaps
|
$
|
(3.6
|
)
|
|
$
|
(11.3
|
)
|
|
$
|
1.0
|
|
|
$
|
14.7
|
|
Fuel products segment:
|
|
|
|
|
|
|
|
||||||||
Inventory financing obligation
|
—
|
|
|
—
|
|
|
(4.4
|
)
|
|
—
|
|
||||
Crude oil swaps
|
(1.9
|
)
|
|
5.3
|
|
|
(1.7
|
)
|
|
7.3
|
|
||||
Crude oil basis swaps
|
3.2
|
|
|
(4.1
|
)
|
|
7.1
|
|
|
(5.9
|
)
|
||||
Crude oil percentage basis swaps
|
2.3
|
|
|
(4.3
|
)
|
|
0.5
|
|
|
5.4
|
|
||||
Crude oil options
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
|
0.3
|
|
||||
Crude oil futures
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
||||
Gasoline swaps
|
(0.6
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
||||
Gasoline crack spread swaps
|
(6.2
|
)
|
|
(2.5
|
)
|
|
3.0
|
|
|
(0.5
|
)
|
||||
Diesel swaps
|
(0.5
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
||||
Diesel crack spread swaps
|
(5.0
|
)
|
|
(0.4
|
)
|
|
(1.5
|
)
|
|
(2.7
|
)
|
||||
2/1/1 crack spread swaps
|
(0.9
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
||||
Natural gas swaps
|
—
|
|
|
(1.3
|
)
|
|
—
|
|
|
1.3
|
|
||||
Total
|
$
|
(13.2
|
)
|
|
$
|
(24.0
|
)
|
|
$
|
3.6
|
|
|
$
|
19.9
|
|
Natural Gas Swap Contracts by Expiration Dates
|
MMBtu
|
|
$/MMBtu
|
|||
First Quarter 2017
|
1,350,000
|
|
|
$
|
3.88
|
|
Second Quarter 2017
|
1,320,000
|
|
|
$
|
3.87
|
|
Third Quarter 2017
|
1,320,000
|
|
|
$
|
3.87
|
|
Fourth Quarter 2017
|
960,000
|
|
|
$
|
3.72
|
|
Total
|
4,950,000
|
|
|
|
||
Average price
|
|
|
$
|
3.85
|
|
Crude Oil Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2018
|
28,000
|
|
|
311
|
|
|
$
|
48.25
|
|
Total
|
28,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
48.25
|
|
Crude Oil Swap Contracts by Expiration Dates
|
Barrels
Purchased |
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2017
|
320,049
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Second Quarter 2017
|
323,605
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Third Quarter 2017
|
327,161
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Fourth Quarter 2017
|
327,161
|
|
|
3,556
|
|
|
$
|
48.87
|
|
Total
|
1,297,976
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
48.87
|
|
Crude Oil Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2017
|
130,320
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Second Quarter 2017
|
131,768
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Third Quarter 2017
|
133,216
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Fourth Quarter 2017
|
133,216
|
|
|
1,448
|
|
|
$
|
41.56
|
|
Total
|
528,520
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
41.56
|
|
Crude Oil Basis Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Average Differential to NYMEX WTI
($/Bbl) |
||||
First Quarter 2017
|
630,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Second Quarter 2017
|
637,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Third Quarter 2017
|
644,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Fourth Quarter 2017
|
644,000
|
|
|
7,000
|
|
|
$
|
(13.22
|
)
|
Total
|
2,555,000
|
|
|
|
|
|
|||
Average differential
|
|
|
|
|
$
|
(13.22
|
)
|
Crude Oil Percentage Basis Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Fixed Percentage of NYMEX WTI (Average % of WTI/
B
bl)
|
|||
First Quarter 2017
|
270,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Second Quarter 2017
|
273,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Third Quarter 2017
|
276,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Fourth Quarter 2017
|
276,000
|
|
|
3,000
|
|
|
72.3
|
%
|
Total
|
1,095,000
|
|
|
|
|
|
||
Average percentage
|
|
|
|
|
72.3
|
%
|
Gasoline Crack Spread Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2018
|
826,000
|
|
|
9,178
|
|
|
$
|
12.27
|
|
Total
|
826,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
12.27
|
|
Gasoline Crack Spread Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2017
|
590,000
|
|
|
6,556
|
|
|
$
|
10.21
|
|
Total
|
590,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
10.21
|
|
Gasoline Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2018
|
14,000
|
|
|
156
|
|
|
$
|
61.35
|
|
Totals
|
14,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
61.35
|
|
Diesel Crack Spread Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2018
|
826,000
|
|
|
9,178
|
|
|
$
|
17.58
|
|
Total
|
826,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
17.58
|
|
Diesel Crack Spread Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2017
|
590,000
|
|
|
6,556
|
|
|
$
|
13.67
|
|
Total
|
590,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
13.67
|
|
Diesel Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2018
|
14,000
|
|
|
156
|
|
|
$
|
66.35
|
|
Totals
|
14,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
66.35
|
|
2/1/1 Crack Spread Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2017
|
590,000
|
|
|
6,556
|
|
|
$
|
11.91
|
|
Total
|
590,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
11.91
|
|
•
|
Level 1 — inputs include observable unadjusted quoted prices in active markets for identical assets or liabilities
|
•
|
Level 2 — inputs include other than quoted prices in active markets that are either directly or indirectly observable
|
•
|
Level 3 — inputs include unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Crude oil swaps
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.9
|
|
|
$
|
2.9
|
|
Crude oil basis swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|
(2.1
|
)
|
||||||||
Total derivative assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
0.8
|
|
||||||||
Pension Plan investments
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||||
Total recurring assets at fair value
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
|
$
|
1.1
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Inventory financing obligation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4.4
|
)
|
|
$
|
(4.4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Crude oil swaps
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
(0.8
|
)
|
||||||||
Crude oil basis swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.0
|
)
|
|
(5.0
|
)
|
||||||||
Crude oil percentage basis swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
(0.5
|
)
|
||||||||
Gasoline crack spread swaps
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
|
(1.8
|
)
|
|
—
|
|
|
—
|
|
|
(3.5
|
)
|
|
(3.5
|
)
|
||||||||
Gasoline swaps
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
2/1/1 crack spread swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
(2.5
|
)
|
||||||||
Diesel swaps
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Diesel crack spread swaps
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|
(1.4
|
)
|
||||||||
Natural gas swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
(1.1
|
)
|
||||||||
Total derivative liabilities
|
—
|
|
|
—
|
|
|
(10.4
|
)
|
|
(10.4
|
)
|
|
—
|
|
|
—
|
|
|
(14.8
|
)
|
|
(14.8
|
)
|
||||||||
RINs Obligation
|
—
|
|
|
(59.1
|
)
|
|
—
|
|
|
(59.1
|
)
|
|
—
|
|
|
(79.3
|
)
|
|
—
|
|
|
(79.3
|
)
|
||||||||
Liability Awards
|
(5.6
|
)
|
|
—
|
|
|
—
|
|
|
(5.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total recurring liabilities at fair value
|
$
|
(5.6
|
)
|
|
$
|
(59.1
|
)
|
|
$
|
(10.4
|
)
|
|
$
|
(75.1
|
)
|
|
$
|
—
|
|
|
$
|
(79.3
|
)
|
|
$
|
(14.8
|
)
|
|
$
|
(94.1
|
)
|
|
For the Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Fair value at January 1,
|
$
|
(14.0
|
)
|
|
$
|
(33.9
|
)
|
Realized loss on derivative instruments
|
13.2
|
|
|
24.0
|
|
||
Unrealized gain on derivative instruments
|
3.6
|
|
|
19.9
|
|
||
Settlements
|
(13.2
|
)
|
|
(24.0
|
)
|
||
Fair value at December 31,
|
$
|
(10.4
|
)
|
|
$
|
(14.0
|
)
|
Total gain included in net loss attributable to changes in unrealized gain relating to financial assets and liabilities held as of December 31,
|
$
|
3.6
|
|
|
$
|
19.9
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Level
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
Financial Instrument:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior notes
|
1
|
|
$
|
1,576.5
|
|
|
$
|
1,556.4
|
|
|
$
|
1,334.1
|
|
|
$
|
1,552.2
|
|
Senior notes
|
2
|
|
$
|
456.4
|
|
|
$
|
387.6
|
|
|
$
|
458.8
|
|
|
$
|
384.5
|
|
Revolving credit facility
|
3
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
6.0
|
|
|
$
|
6.0
|
|
Capital lease and other obligations
|
3
|
|
$
|
50.6
|
|
|
$
|
50.6
|
|
|
$
|
54.5
|
|
|
$
|
54.5
|
|
•
|
Rights to receive distributions of available cash within
45
days after the end of each quarter, to the extent the Company has sufficient cash from operations after the establishment of cash reserves.
|
•
|
Limited partners have limited voting rights on matters affecting the Company’s business. The general partner may consider only the interests and factors that it desires and has no duty or obligation to give any consideration of any interests of the Company’s limited partners. Limited partners have no right to elect the board of directors of the Company’s general partner.
|
•
|
The vote of the holders of at least
66
2/3
% of all outstanding units voting together as a single class is required to remove the general partner. Any holder, other than the general partner or the general partner’s affiliates, that owns
20%
or more of any class of units outstanding cannot vote on any matter.
|
•
|
The Company may issue an unlimited number of limited partner interests without the approval of the limited partners.
|
•
|
Limited partners may be required to sell their units to the general partner if at any time the general partner owns more than
80%
of the issued and outstanding common units.
|
|
Total Quarterly
Distribution Per Common Unit
|
|
Marginal Percentage
Interest in Distributions
|
||||
|
Target Amount
|
|
Unitholders
|
|
General Partner
|
||
Minimum Quarterly Distribution
|
$0.45
|
|
98
|
%
|
|
2
|
%
|
First Target Distribution
|
up to $0.495
|
|
98
|
%
|
|
2
|
%
|
Second Target Distribution
|
above $0.495 up to $0.563
|
|
85
|
%
|
|
15
|
%
|
Third Target Distribution
|
above $0.563 up to $0.675
|
|
75
|
%
|
|
25
|
%
|
Thereafter
|
above $0.675
|
|
50
|
%
|
|
50
|
%
|
|
Number of
Phantom Units
|
|
Weighted-Average
Grant Date
Fair Value
|
|||
Nonvested at January 1, 2015
|
502,120
|
|
|
$
|
26.48
|
|
Granted
|
343,533
|
|
|
21.70
|
|
|
Vested
|
(321,741
|
)
|
|
23.54
|
|
|
Forfeited
|
(103,188
|
)
|
|
23.94
|
|
|
Nonvested at December 31, 2015
|
420,724
|
|
|
$
|
24.27
|
|
Granted
|
1,880,094
|
|
|
4.57
|
|
|
Vested
|
(1,455,131
|
)
|
|
6.35
|
|
|
Forfeited
|
(90,854
|
)
|
|
14.82
|
|
|
Nonvested at December 31, 2016
|
754,833
|
|
|
$
|
9.58
|
|
Granted
|
2,753,507
|
|
|
4.10
|
|
|
Vested
|
(925,199
|
)
|
|
7.30
|
|
|
Forfeited
|
(47,363
|
)
|
|
9.73
|
|
|
Nonvested at December 31, 2017
|
2,535,778
|
|
|
$
|
3.11
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
401(k) Plan matching contribution expense
|
$
|
5.7
|
|
|
$
|
6.0
|
|
|
$
|
5.0
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Change in projected benefit obligation:
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
60.9
|
|
|
$
|
60.3
|
|
Service cost
|
0.1
|
|
|
0.1
|
|
||
Interest cost
|
2.3
|
|
|
2.5
|
|
||
Plan settlements
|
—
|
|
|
(0.6
|
)
|
||
Benefit payments
|
(2.5
|
)
|
|
(2.5
|
)
|
||
Actuarial loss
|
4.2
|
|
|
1.1
|
|
||
Reduction due to sale of the Superior Refinery
|
(26.6
|
)
|
|
—
|
|
||
Administrative expense
|
(0.1
|
)
|
|
—
|
|
||
Benefit obligation at end of year
|
$
|
38.3
|
|
|
$
|
60.9
|
|
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
49.8
|
|
|
$
|
47.5
|
|
Plan settlements
|
—
|
|
|
(0.6
|
)
|
||
Benefit payments
|
(2.5
|
)
|
|
(2.5
|
)
|
||
Actual return on assets
|
7.4
|
|
|
3.8
|
|
||
Employer contribution
|
2.3
|
|
|
1.6
|
|
||
Administrative expense
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
Distribution to acquirer of the Superior Refinery
|
(21.5
|
)
|
|
—
|
|
||
Fair value of plan assets at end of year
|
$
|
35.4
|
|
|
$
|
49.8
|
|
Funded status — benefit obligation in excess of plan assets
|
$
|
(2.9
|
)
|
|
$
|
(11.1
|
)
|
Reconciliation of amounts recognized in the consolidated balance sheets:
|
|
|
|
||||
Accrued benefit obligation, long-term
|
$
|
(2.9
|
)
|
|
$
|
(11.1
|
)
|
Unrecognized net actuarial loss
|
6.0
|
|
|
7.1
|
|
||
Accumulated other comprehensive loss
|
6.0
|
|
|
7.1
|
|
||
Net amount recognized at end of year
|
$
|
3.1
|
|
|
$
|
(4.0
|
)
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Accumulated benefit obligation
|
$
|
38.3
|
|
|
$
|
60.9
|
|
Fair value of plan assets
|
$
|
35.4
|
|
|
$
|
49.8
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Projected benefit obligation
|
$
|
38.3
|
|
|
$
|
60.9
|
|
Fair value of plan assets
|
$
|
35.4
|
|
|
$
|
49.8
|
|
|
Pension Plan
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Service cost
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.5
|
|
Interest cost
|
2.3
|
|
|
2.5
|
|
|
2.6
|
|
|||
Expected return on assets
|
(2.9
|
)
|
|
(3.2
|
)
|
|
(3.3
|
)
|
|||
Amortization of net loss
|
0.2
|
|
|
0.1
|
|
|
0.8
|
|
|||
Settlement loss recognized
|
0.7
|
|
|
—
|
|
|
—
|
|
|||
Curtailment gain recognized
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|||
Net periodic benefit cost (income)
|
$
|
0.4
|
|
|
$
|
(0.5
|
)
|
|
$
|
(0.3
|
)
|
|
Pension Plan
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss:
|
|
|
|
|
|
||||||
Net (gain) loss
|
$
|
(0.2
|
)
|
|
$
|
0.4
|
|
|
$
|
(4.3
|
)
|
Amounts recognized as a component of net periodic benefit cost:
|
|
|
|
|
|
||||||
Amortization or settlement recognition of net loss
|
(0.9
|
)
|
|
(0.1
|
)
|
|
(0.8
|
)
|
|||
Total recognized in other comprehensive (income) loss
|
$
|
(1.1
|
)
|
|
$
|
0.3
|
|
|
$
|
(5.1
|
)
|
|
Benefit Obligations
Assumptions
|
||||
|
2017
|
|
2016
|
||
Discount rate for Penreco Pension Plan
|
3.56
|
%
|
|
4.08
|
%
|
Discount rate for Superior Pension Plan
|
N/A
|
|
|
4.06
|
%
|
Discount rate for Great Falls Pension Plan
|
3.54
|
%
|
|
4.04
|
%
|
|
Net Periodic Benefit (Income) Cost
Assumptions
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Discount rate for Penreco Pension Plan
|
4.08
|
%
|
|
4.30
|
%
|
|
3.92
|
%
|
Discount rate for Superior Pension Plan
|
4.06
|
%
|
|
4.27
|
%
|
|
3.86
|
%
|
Discount rate for Great Falls Pension Plan
|
4.04
|
%
|
|
4.21
|
%
|
|
4.13
|
%
|
Expected return on plan assets for Penreco Pension Plan
(1)
|
6.35
|
%
|
|
6.75
|
%
|
|
6.75
|
%
|
Expected return on plan assets Superior Pension Plan
(1)
|
6.35
|
%
|
|
6.75
|
%
|
|
6.75
|
%
|
Expected return on plan assets for Great Falls Pension Plan
(1)
|
6.35
|
%
|
|
6.75
|
%
|
|
6.75
|
%
|
Rate of compensation increase for Great Falls Pension Plan
|
N/A
|
|
|
N/A
|
|
|
3.00
|
%
|
|
(1)
|
The Company considered the historical returns, the future expectation for returns for each asset class and fair value of the plan assets, as well as the target asset allocation of the Pension Plan portfolio which was developed in accordance with the Company’s Statement of Investment Policy, to develop the expected long-term rate of return on plan assets.
|
Asset Class
|
Range of
Asset Allocation |
|
Target
Allocation |
Domestic equities
|
15–25%
|
|
20%
|
Foreign equities
|
15–25%
|
|
20%
|
Fixed income
|
55–65%
|
|
60%
|
|
2017
|
|
2016
|
||
Cash and cash equivalents
|
1
|
%
|
|
1
|
%
|
Domestic equities
|
12
|
%
|
|
17
|
%
|
Foreign equities
|
12
|
%
|
|
17
|
%
|
Fixed income
|
75
|
%
|
|
65
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Fair Value of Pension Assets at December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Level 1
|
|
Total
|
|
Level 1
|
|
Total
|
||||||||
Cash and cash equivalents
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
Total plan assets subject to leveling
|
$
|
0.2
|
|
|
0.2
|
|
|
$
|
0.3
|
|
|
0.3
|
|
||
Plan assets measured at net asset value
|
|
|
|
|
|
|
|
||||||||
Domestic equities
|
|
|
4.3
|
|
|
|
|
8.6
|
|
||||||
Foreign equities
|
|
|
4.4
|
|
|
|
|
8.7
|
|
||||||
Fixed income
|
|
|
26.5
|
|
|
|
|
32.2
|
|
||||||
Total plan assets measured at net asset value
|
|
|
35.2
|
|
|
|
|
49.5
|
|
||||||
Total plan assets
|
|
|
$
|
35.4
|
|
|
|
|
|
$
|
49.8
|
|
|
Pension Benefits
|
||
2018
|
$
|
1.6
|
|
2019
|
1.7
|
|
|
2020
|
1.8
|
|
|
2021
|
1.9
|
|
|
2022
|
1.9
|
|
|
2023 to 2027
|
10.7
|
|
|
Total
|
$
|
19.6
|
|
|
Derivatives
|
|
Defined Benefit Pension And Retiree Health Benefit Plans
|
|
Foreign Currency Translation Adjustment
|
|
Total
|
||||||||
Accumulated other comprehensive income (loss) at December 31, 2015
|
$
|
6.4
|
|
|
$
|
(6.8
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
(1.6
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(6.4
|
)
|
|
0.1
|
|
|
—
|
|
|
(6.3
|
)
|
||||
Net current period other comprehensive loss
|
(6.4
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(6.7
|
)
|
||||
Accumulated other comprehensive loss at December 31, 2016
|
$
|
—
|
|
|
$
|
(7.1
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
(8.3
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
||||
Net current period other comprehensive income
|
—
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
||||
Accumulated other comprehensive loss at December 31, 2017
|
$
|
—
|
|
|
$
|
(6.0
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
(7.2
|
)
|
Components of Accumulated Other Comprehensive Loss
|
2017
|
|
2016
|
|
Location of Gain (Loss)
|
||||
Derivative gains (losses) reflected in gross profit
|
|
|
|
|
|
||||
|
$
|
—
|
|
|
$
|
59.7
|
|
|
Sales
|
|
—
|
|
|
(53.3
|
)
|
|
Cost of sales
|
||
|
$
|
—
|
|
|
$
|
6.4
|
|
|
Total
|
Amortization of defined benefit pension benefit plans:
|
|
|
|
|
|
||||
Amortization or settlement recognition of net loss
|
$
|
(0.9
|
)
|
|
$
|
(0.1
|
)
|
|
(1)
|
|
$
|
(0.9
|
)
|
|
$
|
(0.1
|
)
|
|
Total
|
|
(1)
|
This accumulated other comprehensive loss component is included in the computation of net periodic pension cost. See
Note 14
for additional information.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
||||||||||
Numerator for basic and diluted earnings per limited partner unit:
|
|
|
|
|
|
||||||
Net loss from continuing operations
|
$
|
(31.3
|
)
|
|
$
|
(296.8
|
)
|
|
$
|
(85.4
|
)
|
Less:
|
|
|
|
|
|
||||||
General partner’s interest in net loss from continuing operations
|
(0.6
|
)
|
|
(6.0
|
)
|
|
(1.7
|
)
|
|||
General partner’s incentive distribution rights
|
—
|
|
|
—
|
|
|
16.8
|
|
|||
Net loss from continuing operations available to limited partners
|
$
|
(30.7
|
)
|
|
$
|
(290.8
|
)
|
|
$
|
(100.5
|
)
|
Net loss from discontinued operations available to limited partners
|
(71.0
|
)
|
|
(31.2
|
)
|
|
(52.9
|
)
|
|||
Net loss available to limited partners
|
$
|
(101.7
|
)
|
|
$
|
(322.0
|
)
|
|
$
|
(153.4
|
)
|
|
|
|
|
|
|
||||||
Denominator for basic and diluted earnings per limited partner unit:
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding
(1)
|
77,598,950
|
|
|
77,043,935
|
|
|
74,896,096
|
|
|||
|
|
|
|
|
|
||||||
Limited partners’ interest basic and diluted net loss per unit:
|
|
|
|
|
|
||||||
From continuing operations
|
$
|
(0.40
|
)
|
|
$
|
(3.77
|
)
|
|
$
|
(1.34
|
)
|
From discontinued operations
|
(0.91
|
)
|
|
(0.41
|
)
|
|
(0.71
|
)
|
|||
Limited partners’ interest
|
$
|
(1.31
|
)
|
|
$
|
(4.18
|
)
|
|
$
|
(2.05
|
)
|
|
(1)
|
Total diluted weighted average limited partner units outstanding excludes
0.2 million
,
0.5 million
and
0.4 million
potentially dilutive phantom units which would be antidilutive for the years ended December 31,
2017
,
2016
and
2015
, respectively.
|
•
|
Specialty Products.
The specialty products segment produces a variety of lubricating oils, solvents, waxes, synthetic lubricants and other products which are sold to customers who purchase these products primarily as raw material components for basic automotive, industrial and consumer goods. Specialty products also include synthetic lubricants used in manufacturing, mining and automotive applications.
|
•
|
Fuel Products
. The fuel products segment produces primarily gasoline, diesel, jet fuel and asphalt which are primarily sold to customers located in the PADD 2 and PADD 4 areas within the U.S.
|
Year Ended December 31, 2017
|
Specialty
Products
|
|
Fuel
Products
|
|
Combined
Segments
|
|
Eliminations
|
|
Consolidated
Total
|
||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
External customers
|
$
|
1,300.4
|
|
|
$
|
2,463.4
|
|
|
$
|
3,763.8
|
|
|
$
|
—
|
|
|
$
|
3,763.8
|
|
Intersegment sales
|
0.2
|
|
|
54.8
|
|
|
55.0
|
|
|
(55.0
|
)
|
|
—
|
|
|||||
Total sales
|
$
|
1,300.6
|
|
|
$
|
2,518.2
|
|
|
$
|
3,818.8
|
|
|
$
|
(55.0
|
)
|
|
$
|
3,763.8
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
|
$
|
186.5
|
|
|
$
|
127.8
|
|
|
$
|
314.3
|
|
|
$
|
—
|
|
|
$
|
314.3
|
|
Reconciling items to net loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
70.5
|
|
|
108.6
|
|
|
179.1
|
|
|
—
|
|
|
179.1
|
|
|||||
Impairment charges
|
60.3
|
|
|
147.0
|
|
|
207.3
|
|
|
—
|
|
|
207.3
|
|
|||||
Gain on sale of business
|
—
|
|
|
(236.0
|
)
|
|
(236.0
|
)
|
|
—
|
|
|
(236.0
|
)
|
|||||
Unrealized gain on derivatives
|
|
|
|
|
|
|
|
|
(3.6
|
)
|
|||||||||
Interest expense
|
|
|
|
|
|
|
|
|
183.1
|
|
|||||||||
Non-cash equity-based compensation and other items
|
|
|
|
|
|
|
|
|
15.8
|
|
|||||||||
Income tax benefit
|
|
|
|
|
|
|
|
|
(0.1
|
)
|
|||||||||
Net loss from continuing operations
|
|
|
|
|
|
|
|
|
$
|
(31.3
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2016
|
Specialty
Products
|
|
Fuel
Products
|
|
Combined
Segments
|
|
Eliminations
|
|
Consolidated
Total
|
||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
External customers
|
$
|
1,252.3
|
|
|
$
|
2,222.0
|
|
|
$
|
3,474.3
|
|
|
$
|
—
|
|
|
$
|
3,474.3
|
|
Intersegment sales
|
2.5
|
|
|
34.5
|
|
|
37.0
|
|
|
(37.0
|
)
|
|
—
|
|
|||||
Total sales
|
$
|
1,254.8
|
|
|
$
|
2,256.5
|
|
|
$
|
3,511.3
|
|
|
$
|
(37.0
|
)
|
|
$
|
3,474.3
|
|
Loss from unconsolidated affiliates
|
$
|
(0.3
|
)
|
|
$
|
(18.0
|
)
|
|
$
|
(18.3
|
)
|
|
$
|
—
|
|
|
$
|
(18.3
|
)
|
Adjusted EBITDA
|
$
|
188.9
|
|
|
$
|
(10.1
|
)
|
|
$
|
178.8
|
|
|
$
|
—
|
|
|
$
|
178.8
|
|
Reconciling items to net loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
74.7
|
|
|
110.5
|
|
|
185.2
|
|
|
—
|
|
|
185.2
|
|
|||||
Realized gain (loss) on derivatives, not reflected in net loss or settled in a prior period
|
1.9
|
|
|
(8.3
|
)
|
|
(6.4
|
)
|
|
—
|
|
|
(6.4
|
)
|
|||||
Impairment charges
|
1.9
|
|
|
34.0
|
|
|
35.9
|
|
|
—
|
|
|
35.9
|
|
|||||
Loss on sale of unconsolidated affiliate
|
—
|
|
|
113.9
|
|
|
113.9
|
|
|
—
|
|
|
113.9
|
|
|||||
Unrealized gain on derivatives
|
|
|
|
|
|
|
|
|
(19.9
|
)
|
|||||||||
Interest expense
|
|
|
|
|
|
|
|
|
161.7
|
|
|||||||||
Non-cash equity-based compensation and other items
|
|
|
|
|
|
|
|
|
5.0
|
|
|||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
0.2
|
|
|||||||||
Net loss from continuing operations
|
|
|
|
|
|
|
|
|
$
|
(296.8
|
)
|
Year Ended December 31, 2015
|
Specialty
Products |
|
Fuel
Products |
|
Combined
Segments |
|
Eliminations
|
|
Consolidated
Total |
||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
External customers
|
$
|
1,367.8
|
|
|
$
|
2,562.5
|
|
|
$
|
3,930.3
|
|
|
$
|
—
|
|
|
$
|
3,930.3
|
|
Intersegment sales
|
2.9
|
|
|
39.1
|
|
|
42.0
|
|
|
(42.0
|
)
|
|
—
|
|
|||||
Total sales
|
$
|
1,370.7
|
|
|
$
|
2,601.6
|
|
|
$
|
3,972.3
|
|
|
$
|
(42.0
|
)
|
|
$
|
3,930.3
|
|
Loss from unconsolidated affiliates
|
$
|
—
|
|
|
$
|
(61.1
|
)
|
|
$
|
(61.1
|
)
|
|
$
|
—
|
|
|
$
|
(61.1
|
)
|
Adjusted EBITDA
|
$
|
201.7
|
|
|
$
|
81.9
|
|
|
$
|
283.6
|
|
|
$
|
—
|
|
|
$
|
283.6
|
|
Reconciling items to net loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
69.2
|
|
|
82.4
|
|
|
151.6
|
|
|
—
|
|
|
151.6
|
|
|||||
Realized loss on derivatives, not reflected in net loss or settled in a prior period
|
(3.0
|
)
|
|
(7.0
|
)
|
|
(10.0
|
)
|
|
—
|
|
|
(10.0
|
)
|
|||||
Impairment charges
|
—
|
|
|
24.3
|
|
|
24.3
|
|
|
—
|
|
|
24.3
|
|
|||||
Unrealized loss on derivatives
|
|
|
|
|
|
|
|
|
|
39.5
|
|
||||||||
Interest expense
|
|
|
|
|
|
|
|
|
104.9
|
|
|||||||||
Debt extinguishment costs
|
|
|
|
|
|
|
|
|
46.6
|
|
|||||||||
Non-cash equity-based compensation and other items
|
|
|
|
|
|
|
|
|
11.9
|
|
|||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
0.2
|
|
|||||||||
Net loss from continuing operations
|
|
|
|
|
|
|
|
|
$
|
(85.4
|
)
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
Specialty products:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Lubricating oils
|
$
|
584.2
|
|
|
15.5
|
%
|
|
$
|
538.7
|
|
|
15.5
|
%
|
|
$
|
575.6
|
|
|
14.6
|
%
|
Solvents
|
274.4
|
|
|
7.3
|
%
|
|
237.7
|
|
|
6.8
|
%
|
|
302.0
|
|
|
7.7
|
%
|
|||
Waxes
|
117.2
|
|
|
3.1
|
%
|
|
128.7
|
|
|
3.7
|
%
|
|
136.9
|
|
|
3.5
|
%
|
|||
Packaged and synthetic specialty products
|
260.7
|
|
|
6.9
|
%
|
|
244.7
|
|
|
7.0
|
%
|
|
261.5
|
|
|
6.7
|
%
|
|||
Other
|
63.9
|
|
|
1.7
|
%
|
|
102.5
|
|
|
3.0
|
%
|
|
91.8
|
|
|
2.3
|
%
|
|||
Total
|
1,300.4
|
|
|
34.5
|
%
|
|
1,252.3
|
|
|
36.0
|
%
|
|
1,367.8
|
|
|
34.8
|
%
|
|||
Fuel products:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gasoline
|
948.5
|
|
|
25.2
|
%
|
|
844.3
|
|
|
24.3
|
%
|
|
1,047.1
|
|
|
26.6
|
%
|
|||
Diesel
|
877.9
|
|
|
23.4
|
%
|
|
808.4
|
|
|
23.3
|
%
|
|
894.8
|
|
|
22.8
|
%
|
|||
Jet fuel
|
135.0
|
|
|
3.6
|
%
|
|
117.5
|
|
|
3.4
|
%
|
|
149.6
|
|
|
3.8
|
%
|
|||
Asphalt, heavy fuel oils and other
|
502.0
|
|
|
13.3
|
%
|
|
451.8
|
|
|
13.0
|
%
|
|
471.0
|
|
|
12.0
|
%
|
|||
Total
|
2,463.4
|
|
|
65.5
|
%
|
|
2,222.0
|
|
|
64.0
|
%
|
|
2,562.5
|
|
|
65.2
|
%
|
|||
Consolidated sales
|
$
|
3,763.8
|
|
|
100.0
|
%
|
|
$
|
3,474.3
|
|
|
100.0
|
%
|
|
$
|
3,930.3
|
|
|
100.0
|
%
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
(1)
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
886.5
|
|
|
$
|
967.0
|
|
|
$
|
1,026.5
|
|
|
$
|
883.8
|
|
|
$
|
3,763.8
|
|
Gross profit
|
129.5
|
|
|
143.7
|
|
|
127.7
|
|
|
97.3
|
|
|
498.2
|
|
|||||
Net income (loss) from continuing operations
|
1.5
|
|
|
12.0
|
|
|
(26.1
|
)
|
|
(18.7
|
)
|
|
(31.3
|
)
|
|||||
Net income (loss) from discontinued operations
|
(7.7
|
)
|
|
(2.4
|
)
|
|
2.5
|
|
|
(64.9
|
)
|
|
(72.5
|
)
|
|||||
Net income (loss)
|
(6.2
|
)
|
|
9.6
|
|
|
(23.6
|
)
|
|
(83.6
|
)
|
|
(103.8
|
)
|
|||||
Net income (loss) available to limited partners
|
(6.1
|
)
|
|
9.2
|
|
|
(23.1
|
)
|
|
(81.9
|
)
|
|
(101.7
|
)
|
|||||
Limited partners’ interest basic and diluted net income (loss) per unit:
|
|
|
|
|
|
|
|
|
|
||||||||||
From continuing operations
|
$
|
0.02
|
|
|
$
|
0.15
|
|
|
$
|
(0.33
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.40
|
)
|
From discontinued operations
|
(0.10
|
)
|
|
(0.03
|
)
|
|
0.03
|
|
|
(0.82
|
)
|
|
(0.91
|
)
|
|||||
Limited partners’ interest
|
$
|
(0.08
|
)
|
|
$
|
0.12
|
|
|
$
|
(0.30
|
)
|
|
$
|
(1.06
|
)
|
|
$
|
(1.31
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic weighted average limited partner units outstanding
|
77,412,634
|
|
|
77,554,815
|
|
|
77,632,784
|
|
|
77,784,534
|
|
|
|
||||||
Diluted weighted average limited partner units outstanding
|
78,259,909
|
|
|
77,714,112
|
|
|
77,931,605
|
|
|
77,784,534
|
|
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
(1)
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
680.6
|
|
|
$
|
951.6
|
|
|
$
|
932.3
|
|
|
$
|
909.8
|
|
|
$
|
3,474.3
|
|
Gross profit
|
80.3
|
|
|
130.5
|
|
|
103.0
|
|
|
72.5
|
|
|
386.3
|
|
|||||
Net loss from continuing operations
|
(56.9
|
)
|
|
(135.3
|
)
|
|
(33.1
|
)
|
|
(71.5
|
)
|
|
(296.8
|
)
|
|||||
Net loss from discontinued operations
|
(10.8
|
)
|
|
(12.6
|
)
|
|
(0.3
|
)
|
|
(8.1
|
)
|
|
(31.8
|
)
|
|||||
Net loss
|
(67.7
|
)
|
|
(147.9
|
)
|
|
(33.4
|
)
|
|
(79.6
|
)
|
|
(328.6
|
)
|
|||||
Net loss available to limited partners
|
(66.3
|
)
|
|
(145.0
|
)
|
|
(32.7
|
)
|
|
(78.0
|
)
|
|
(322.0
|
)
|
|||||
Limited partners’ interest basic and diluted net loss per unit:
|
|
|
|
|
|
|
|
|
|
||||||||||
From continuing operations
|
$
|
(0.73
|
)
|
|
$
|
(1.73
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
(0.91
|
)
|
|
$
|
(3.77
|
)
|
From discontinued operations
|
(0.14
|
)
|
|
(0.16
|
)
|
|
—
|
|
|
(0.10
|
)
|
|
(0.41
|
)
|
|||||
Limited partners’ interest
|
$
|
(0.87
|
)
|
|
$
|
(1.89
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
(1.01
|
)
|
|
$
|
(4.18
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted weighted average limited partner units outstanding
|
76,449,841
|
|
|
76,761,504
|
|
|
77,331,347
|
|
|
77,351,593
|
|
|
|
|
(1)
|
The sum of the four quarters may not equal the total year due to rounding.
|
Name
|
|
Age
|
|
Position with Calumet GP, LLC
|
Fred M. Fehsenfeld, Jr.
|
|
67
|
|
Chairman of the Board
|
F. William Grube
|
|
70
|
|
Executive Vice Chairman
|
Timothy Go
|
|
51
|
|
Chief Executive Officer
|
D. West Griffin
|
|
57
|
|
Executive Vice President — Chief Financial Officer
|
Bruce A. Fleming
|
|
61
|
|
Executive Vice President — Strategy & Growth
|
Christopher H. Bohnert
|
|
51
|
|
Chief Accounting Officer
|
William A. Anderson
|
|
49
|
|
Executive Vice President — Sales
|
James S. Carter
|
|
69
|
|
Director
|
Robert E. Funk
|
|
72
|
|
Director
|
Stephen P. Mawer
|
|
53
|
|
Director
|
Daniel J. Sajkowski
|
|
58
|
|
Director
|
Amy M. Schumacher
|
|
47
|
|
Director
|
•
|
Timothy Go — Chief Executive Officer
|
•
|
F. William Grube — Executive Vice Chairman of the Board
|
•
|
D. West Griffin — Executive Vice President — Chief Financial Officer
|
•
|
R. Patrick Murray, II — former Vice President — Special Projects
|
•
|
Bruce A. Fleming — Executive Vice President — Strategy & Growth
|
•
|
William A. Anderson — Executive Vice President — Sales
|
•
|
reward strong individual performance that drives our positive financial results;
|
•
|
make incentive compensation a significant portion of an executive’s total compensation, designed to balance short-term and long-term performance;
|
•
|
align the interests of our executives with those of our unitholders; and
|
•
|
attract, develop and retain executives with a compensation structure that is competitive with other publicly-traded partnerships of similar size.
|
•
|
base salary;
|
•
|
annual incentive plan which includes short-term cash awards and also includes an optional deferred compensation element;
|
•
|
long-term incentive compensation, including unit-based awards;
|
•
|
retirement, health and welfare benefits; and
|
•
|
perquisites.
|
|
2017 Base Salary
|
|
2016 Base Salary
|
||||
Timothy Go
|
$
|
500,000
|
|
|
$
|
500,000
|
|
F. William Grube
|
$
|
454,363
|
|
|
$
|
454,363
|
|
D. West Griffin
|
$
|
400,000
|
|
|
-
|
|
|
R. Patrick Murray, II
|
$
|
353,067
|
|
|
$
|
353,067
|
|
Bruce F. Fleming
|
$
|
385,000
|
|
|
$
|
350,000
|
|
William A. Anderson
|
$
|
325,130
|
|
|
$
|
325,130
|
|
|
Cash Incentive Bonus Award Opportunity as a
Percentage of Base Salary
|
||||
|
Minimum
|
|
Target
|
|
Stretch
|
Timothy Go, D. West Griffin, Bruce A. Fleming and William A. Anderson
(1)
|
50%
|
|
150%
|
|
250%
|
F. William Grube
(2)
|
25%
|
|
50%
|
|
100%
|
|
(1)
|
Company performance goals are based on the ratio of Net Indebtedness to Adjusted EBITDA.
|
(2)
|
Company performance goals are based on Adjusted EBITDA.
|
|
|
Ratio of Net Indebtedness to Adjusted EBITDA
|
|
Adjusted EBITDA (Dollars in millions)
|
||||||||||||
Fiscal Year
|
|
Actual
|
|
Min. Goal
|
|
Target Goal
|
|
Stretch Goal
|
|
Actual
|
|
Min. Goal
|
|
Target Goal
|
|
Stretch Goal
|
2017
|
|
6.4
|
|
11.4
|
|
6.7
|
|
5.0
|
|
$317.2
|
|
$175.0
|
|
$300.0
|
|
$400.0
|
|
(1)
|
Prior to 2017, compensation targets were based on Distributable Cash Flow.
|
(2)
|
For 2016, actual results exclude a favorable $51.4 million LCM inventory adjustment, include an $18.5 million loss from unconsolidated affiliates and exclude bonus expense for calculation purposes.
|
|
Performance Units
(1)
|
|
Strategic Units
(1)
|
|
|
||||||||||
|
Distributions
|
|
$8 Unit
Price
Target
|
|
$16 Unit Price
Target |
|
Vest on 1/1/2018
|
|
$7 Unit Price
Target |
|
$10 Unit Price
Target |
|
$18 Unit Price
Target |
|
Actual
|
Timothy Go
|
125,000
|
|
125,000
|
|
250,000
|
|
200,000
|
|
100,000
|
|
100,000
|
|
100,000
|
|
225,000
|
D. West Griffin
(2)
|
62,500
|
|
62,500
|
|
125,000
|
|
100,000
|
|
50,000
|
|
50,000
|
|
50,000
|
|
112,500
|
Bruce A. Fleming
|
31,250
|
|
31,250
|
|
62,500
|
|
50,000
|
|
25,000
|
|
25,000
|
|
25,000
|
|
56,250
|
William A. Anderson
|
21,875
|
|
21,875
|
|
43,750
|
|
35,000
|
|
17,500
|
|
17,500
|
|
17,500
|
|
39,375
|
|
(1)
|
These phantom units will also receive DERs, if any, which would be paid in the form of cash.
|
(2)
|
Mr. Griffin agreed to purchase $500,000 worth of common units on the open market in exchange for vesting of his equity awards in accordance with his offer letter of employment. Mr. Griffin has purchased common units with an acquisition cost of $250,000, leaving $250,000 worth of purchases left to be executed. The amounts disclosed in the table assume Mr. Griffin purchases the remaining $250,000 worth of common units as we believe this is probable of occurring.
|
|
2017 Phantom Unit Award Opportunity
|
|
Phantom Units
Earned
(1)
|
||||
|
Minimum
|
|
Target
|
|
Stretch
|
|
|
F. William Grube
|
5,400
|
|
10,800
|
|
16,200
|
|
10,800
|
|
(1)
|
Phantom units granted pursuant to our annual awards are subject to a time-vesting requirement, whereby 100% of the units vest in three years. These phantom units will also receive DERs, if any, which would be paid in the form of cash.
|
•
|
Executive Physical Program:
Generally on an annual basis, we pay for a complete and professional personal physical exam for each named executive officer appropriate for his age to improve his health and productivity.
|
•
|
Club Memberships:
We pay club membership fees for certain named executive officers. Although such club memberships may be used for personal purposes in addition to business entertainment purposes, each named executive officer having such a membership is responsible for the reimbursement to us or direct payment for any incremental costs above the base membership fees associated with his personal use of such membership.
|
•
|
Spousal and Family Travel:
On an occasional basis, we pay expenses related to travel of the spouses or certain family members of our named executive officers in order to accompany the named executive officer to business-related events.
|
•
|
Long-Term Disability Insurance:
We provide compensation to allow each named executive officer to purchase long-term disability insurance on an after-tax basis at no net cost to him.
|
•
|
Use of Company Aircraft:
On an occasional basis, our named executive officers may be eligible to use a leased aircraft for personal use and
the incremental cost to us is treated as and reflected in the tables below as compensation to the applicable officer for purposes of these disclosures. The items that we use to determine the incremental cost to us of these flights
include the variable costs for personal use of aircraft that were charged to us by the vendor that operates the leased aircraft for
contracted hourly costs, fuel charges, and taxes
.
|
•
|
Commuting and Living Expenses:
In order for us to attract top executive talent, we must not be limited to those individuals residing in the Indianapolis metropolitan area and in some cases must be willing to offer payment or reimbursement for an agreed upon amount of relocation, commuting, temporary housing and other related costs.
|
•
|
Change in Control:
In certain scenarios, the potential for merger or being acquired may be in the best interests of our unitholders. We provide the potential for severance compensation to the named executive officers in the event of a change in control transaction to promote their ability to act in the best interests of our unitholders even though their employment could be terminated as a result of the transaction.
|
•
|
Termination without Cause:
We believe severance compensation in such a scenario is appropriate because the named executive officers are bound by confidentiality, nonsolicitation and noncompetition provisions covering one year after termination and because we and the named executive officer have mutually agreed to a severance package that is in place prior to any termination event. This provides us with more flexibility to make a change in this executive position if such a change is in our and our unitholders’ best interests.
|
|
Summary Compensation Table for 2017
|
||||||||||||||||||||||||
Name and Principal Position
|
Year
|
|
Salary
|
|
Bonus
(5)
|
|
Unit Awards
(6)
|
|
Non-Equity Incentive Plan Compensation
(7)
|
|
All Other Compensation
(8)
|
|
Total
|
||||||||||||
Timothy Go
(1)
Chief Executive Officer
|
2017
|
|
$
|
500,000
|
|
|
$
|
—
|
|
|
$
|
4,836,561
|
|
|
$
|
437,500
|
|
|
$
|
14,713
|
|
|
$
|
5,788,774
|
|
2016
|
|
$
|
500,000
|
|
|
$
|
250,000
|
|
|
$
|
625,000
|
|
|
$
|
—
|
|
|
$
|
95,815
|
|
|
$
|
1,470,815
|
|
|
F. William Grube
Executive Vice Chairman
|
2017
|
|
$
|
454,363
|
|
|
$
|
—
|
|
|
$
|
57,780
|
|
|
$
|
227,182
|
|
|
$
|
14,136
|
|
|
$
|
753,461
|
|
2016
|
|
$
|
454,363
|
|
|
$
|
—
|
|
|
$
|
19,881
|
|
|
$
|
—
|
|
|
$
|
20,200
|
|
|
$
|
494,444
|
|
|
2015
|
|
$
|
454,363
|
|
|
$
|
—
|
|
|
$
|
574,253
|
|
|
$
|
641,351
|
|
|
$
|
70,323
|
|
|
$
|
1,740,290
|
|
|
D. West Griffin
(2)
Executive Vice President - Chief Financial Officer
|
2017
|
|
$
|
394,110
|
|
|
$
|
—
|
|
|
$
|
2,218,750
|
|
|
$
|
300,000
|
|
|
$
|
258,681
|
|
|
$
|
3,171,541
|
|
R. Patrick Murray, II
(3)
Former Vice President - Special Projects and Former Executive Vice President - Chief Financial Officer and Secretary
|
2017
|
|
$
|
322,739
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
419,749
|
|
|
$
|
742,488
|
|
2016
|
|
$
|
353,067
|
|
|
$
|
—
|
|
|
$
|
25,268
|
|
|
$
|
—
|
|
|
$
|
20,987
|
|
|
$
|
399,322
|
|
|
2015
|
|
$
|
339,488
|
|
|
$
|
—
|
|
|
$
|
423,072
|
|
|
$
|
431,280
|
|
|
$
|
47,865
|
|
|
$
|
1,241,705
|
|
|
Bruce A. Fleming
(4)
Executive Vice President - Strategy & Growth
|
2017
|
|
$
|
385,000
|
|
|
$
|
—
|
|
|
$
|
1,315,500
|
|
|
$
|
356,125
|
|
|
$
|
24,405
|
|
|
$
|
2,081,030
|
|
2016
|
|
$
|
280,021
|
|
|
$
|
—
|
|
|
$
|
749,947
|
|
|
$
|
—
|
|
|
$
|
54,600
|
|
|
$
|
1,084,568
|
|
|
William A. Anderson
Executive Vice President - Sales
|
2017
|
|
$
|
325,130
|
|
|
$
|
—
|
|
|
$
|
896,563
|
|
|
$
|
225,000
|
|
|
$
|
14,518
|
|
|
$
|
1,461,211
|
|
2016
|
|
$
|
325,130
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,416
|
|
|
$
|
346,546
|
|
|
2015
|
|
$
|
312,626
|
|
|
$
|
—
|
|
|
$
|
338,400
|
|
|
$
|
441,284
|
|
|
$
|
60,633
|
|
|
$
|
1,152,943
|
|
|
(1)
|
Mr. Go’s employment with us commenced September 2015. He was appointed chief executive officer effective January 1, 2016, and was not a named executive officer prior to 2016.
|
(2)
|
Mr. Griffin was appointed executive vice president, chief financial officer effective January 5, 2017.
|
(3)
|
Mr. Murray’s employment was terminated in November 2017.
|
(4)
|
Mr. Fleming’s employment with us commenced March 21, 2016.
|
(5)
|
Mr. Go received a signing bonus of $250,000 per his employment agreement.
|
(6)
|
The amounts include the aggregate grant date fair value of (i) 143,990 phantom unit awards granted to Mr. Go during the 2017 fiscal year relating to a correction that was needed in the number of phantom units granted to Mr. Go in 2015 and 2016 (described further below), (ii) 2016 unit awards for Mr. Fleming relate to a matching phantom unit award granted to Mr. Fleming equal to his common unit purchases in 2016, pursuant to an agreement we entered into with Mr. Fleming upon his entry into our employment to match certain purchases of our common units that he made during 2016, (iii) performance units and strategic units to reward Messrs. Go, Griffin, Fleming and Anderson the number of which is determined based on certain market and company performance and (iv) phantom units to reward Mr. Grube for services provided during the fiscal year and the number of which is determined based on our level of Adjusted EBITDA during the fiscal year. The amounts reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. See
Note 13
to our consolidated financial statements for the fiscal year ending
December 31, 2017
for a discussion of the assumptions used to determine the FASB ASC Topic 718 value of the awards.
|
(7)
|
Represents amounts earned under our Cash Incentive Plan and not deferred into the Deferred Compensation Plan. Please read “Compensation Discussion and Analysis — Elements of Executive Compensation — Short-Term Cash Awards” for further details.
|
(8)
|
The following table provides the aggregate “All Other Compensation” information for each of the named executive officers, except that it excludes perquisites or other personal benefits received by Messrs. Go, Grube, Murray, Fleming and Anderson in
2017
, as such amounts for these named executive officers were less than $10,000 in aggregate:
|
|
Timothy Go
|
|
F. William Grube
|
|
D. West Griffin
|
|
R. Patrick Murray, II
|
|
Bruce A. Fleming
|
|
William A. Anderson
|
||||||||||||
401(k) Plan Matching Contributions
|
$
|
13,250
|
|
|
$
|
13,250
|
|
|
$
|
13,250
|
|
|
$
|
9,294
|
|
|
$
|
13,250
|
|
|
$
|
13,250
|
|
Relocation Expenses
(1)
|
—
|
|
|
—
|
|
|
78,627
|
|
|
—
|
|
|
10,090
|
|
|
—
|
|
||||||
Commuting and Living Expenses
(2)
|
—
|
|
|
—
|
|
|
163,723
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Long-Term Disability Insurance
|
—
|
|
|
—
|
|
|
1,716
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Term Life Insurance
|
1,463
|
|
|
886
|
|
|
1,365
|
|
|
1,381
|
|
|
1,065
|
|
|
1,268
|
|
||||||
Post-Employment Payments
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
409,074
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
14,713
|
|
|
$
|
14,136
|
|
|
$
|
258,681
|
|
|
$
|
419,749
|
|
|
$
|
24,405
|
|
|
$
|
14,518
|
|
|
(1)
|
Includes a tax gross up of $28,627 for Mr. Griffin.
|
(2)
|
As part of Mr. Griffin’s offer letter of employment, we provided him $25,000 quarterly for living and commuting expenses. Includes a tax gross up of $63,723.
|
(3)
|
As part of Mr. Murray’ resignation, we entered into a severance and general release agreement with him. The agreement provided for a severance payment of $353,067. Additionally, Mr. Murray was provided free and clean title to his company automobile, reimbursed for fourteen months of COBRA insurance coverage and paid unused vacation.
|
|
|
|
Estimated Possible Payouts Under
Non-Equity
Incentive Plan Awards
(1)
|
|
Estimated Possible Payouts Under
Equity
Incentive Plan Awards
(2)
|
|
All Other
Unit
Awards:
Number of
Units
(3)
(#)
|
|
Grant
Date Fair
Value of
Unit
Awards
($)
|
||||||||||||||||||||
Name
|
Grant
Date
|
|
Minimum ($)
|
|
Target
($)
|
|
Maximum ($)
|
|
Minimum (#)
|
|
Target
(#)
|
|
Maximum (#)
|
|
|
||||||||||||||
Timothy Go
|
|
|
$
|
250,000
|
|
|
$
|
750,000
|
|
|
$
|
1,250,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
2/23/2017
|
|
|
|
|
|
|
|
—
|
|
|
500,000
|
|
|
—
|
|
|
|
|
$
|
1,162,500
|
|
|||||||
|
5/4/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
143,990
|
|
|
$
|
561,561
|
|
|||||||||
|
8/3/2017
|
|
|
|
|
|
|
|
—
|
|
|
300,000
|
|
|
—
|
|
|
|
|
$
|
1,605,000
|
|
|||||||
|
8/3/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
$
|
1,070,000
|
|
|||||||||
F. William Grube
|
|
|
$
|
113,591
|
|
|
$
|
227,182
|
|
|
$
|
454,363
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
8/3/2017
|
|
|
|
|
|
|
|
5,400
|
|
|
10,800
|
|
|
16,200
|
|
|
|
|
$
|
57,780
|
|
|||||||
D. West Griffin
|
|
|
$
|
200,000
|
|
|
$
|
450,000
|
|
|
$
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
2/23/2017
|
|
|
|
|
|
|
|
—
|
|
|
250,000
|
|
|
—
|
|
|
—
|
|
|
$
|
581,250
|
|
||||||
|
8/3/2017
|
|
|
|
|
|
|
|
—
|
|
|
150,000
|
|
|
—
|
|
|
|
|
$
|
802,500
|
|
|||||||
|
8/3/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
$
|
535,000
|
|
|||||||||
Bruce A. Fleming
|
|
|
$
|
192,500
|
|
|
$
|
577,500
|
|
|
$
|
962,500
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
2/23/2017
|
|
|
|
|
|
|
|
—
|
|
|
125,000
|
|
|
—
|
|
|
|
|
$
|
290,625
|
|
|||||||
|
8/3/2017
|
|
|
|
|
|
|
|
—
|
|
|
75,000
|
|
|
—
|
|
|
|
|
$
|
401,250
|
|
|||||||
|
8/3/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
$
|
267,500
|
|
|||||||||
William A. Anderson
|
|
|
$
|
162,565
|
|
|
$
|
487,695
|
|
|
$
|
812,825
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
2/23/2017
|
|
|
|
|
|
|
|
—
|
|
|
87,500
|
|
|
—
|
|
|
|
|
$
|
203,438
|
|
|||||||
|
8/3/2017
|
|
|
|
|
|
|
|
—
|
|
|
52,500
|
|
|
—
|
|
|
|
|
$
|
280,875
|
|
|||||||
|
8/3/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
|
|
$
|
187,250
|
|
|
(1)
|
Estimated possible payouts under non-equity incentive plan awards represent the ranges of potential cash incentive awards granted under our Cash Incentive Plan related to fiscal year
2017
for each named executive officer, although we did not pay these awards for the
2017
year. For a description of this plan and available awards please read “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table — Description of Cash Incentive Plan.”
|
(2)
|
Estimated possible payouts under equity incentive plan awards for Mr. Grube represent the ranges of potential unit based awards that could have been earned under the
2017
Phantom Unit Program as part of the Long-Term Incentive Plan. Estimated possible payouts under equity incentive plan awards for Messrs. Go, Griffin, Fleming and Anderson represent grants of performance and strategic units in which a portion vests upon the reinstatement of the distribution to unitholders and portions vest if the 120-day moving average closing price of our common units reaches $7 per unit, $8 per unit, $10 per unit, $16 per unit and $18 per unit during the period of January 1, 2017 through December 31, 2020.
|
(3)
|
All other unit awards represent (i) 143,990 phantom unit awards granted to Mr. Go during the 2017 fiscal year relating to a correction that was needed in the number of phantom units granted to Mr. Go in 2016 (described further below)
and (ii) grants of strategic units in which a portion vests on January 1, 2018.
|
|
|
Cash Incentive Award
Calculated as a Percentage of Base Salary
|
||||
Incentive Level
(1)
|
|
Minimum
|
|
Target
|
|
Stretch
|
1
|
|
50%
|
|
150%
|
|
250%
|
2
|
|
25%
|
|
50%
|
|
100%
|
3
|
|
50%
|
|
100%
|
|
200%
|
4
|
|
50%
|
|
100%
|
|
150%
|
5
|
|
20%
|
|
40%
|
|
80%
|
6
|
|
20%
|
|
40%
|
|
60%
|
|
(1)
|
Messrs. Go, Griffin, Fleming and Anderson participate in the Cash Incentive Plan at Incentive Level 1. Mr. Grube participates in the Cash Incentive Plan at Incentive Level 2.
|
Name
|
Percentage of
Total
Compensation
|
Timothy Go
|
9%
|
F. William Grube
|
60%
|
D. West Griffin
|
12%
|
R. Patrick Murray, II
|
43%
|
Bruce A. Fleming
|
19%
|
William A. Anderson
|
22%
|
|
Unit Awards
|
||||||||||||
Name
|
Number of Units
That Have Not
Vested
(#) (1)
|
|
Market Value of
Units That Have Not Vested ($) (2) |
|
Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested
(#) (1)
|
|
Equity Incentive Plan Awards: Market Value of Units that Have Not Vested
($) (2)
|
||||||
Timothy Go
|
286,486
|
|
|
$
|
2,205,942
|
|
|
575,000
|
|
|
$
|
4,427,500
|
|
F. William Grube
|
16,200
|
|
|
$
|
124,740
|
|
|
—
|
|
|
$
|
—
|
|
D. West Griffin
(3)
|
100,000
|
|
|
$
|
770,000
|
|
|
287,500
|
|
|
$
|
2,213,750
|
|
Bruce A. Fleming
|
121,519
|
|
|
$
|
935,696
|
|
|
143,750
|
|
|
$
|
1,106,875
|
|
William A. Anderson
|
38,600
|
|
|
$
|
297,220
|
|
|
100,625
|
|
|
$
|
774,813
|
|
|
(1)
|
These units are scheduled to vest in amounts and on the dates shown in the following table:
|
Vesting Date
|
|
Timothy
Go |
|
F. William
Grube |
|
D. West
Griffin |
|
Bruce A.
Fleming |
|
William A.
Anderson |
January 1, 2018
|
|
200,000
|
|
—
|
|
100,000
|
|
50,000
|
|
35,000
|
December 31, 2018
|
|
47,423
|
|
5,400
|
|
—
|
|
35,760
|
|
3,600
|
December 31, 2019
|
|
39,063
|
|
—
|
|
—
|
|
35,759
|
|
—
|
March 7, 2021
|
|
—
|
|
10,800
|
|
—
|
|
—
|
|
—
|
Reinstatement of Distributions
|
|
125,000
|
|
—
|
|
62,500
|
|
31,250
|
|
21,875
|
$10 Price Target
|
|
100,000
|
|
—
|
|
50,000
|
|
25,000
|
|
17,500
|
$16 Price Target
|
|
250,000
|
|
—
|
|
125,000
|
|
62,500
|
|
43,750
|
$18 Price Target
|
|
100,000
|
|
—
|
|
50,000
|
|
25,000
|
|
17,500
|
|
|
861,486
|
|
16,200
|
|
387,500
|
|
265,269
|
|
139,225
|
|
(2)
|
Market value of phantom units reported in these columns is calculated by multiplying the closing market price of
$7.70
of our common units at
December 29, 2017
(the last trading day of the fiscal year), by the number of units outstanding.
|
(3)
|
Mr. Griffin agreed to purchase $500,000 worth of common units on the open market in exchange for vesting of his equity awards in accordance with his offer letter of employment. Mr. Griffin has purchased common units with an acquisition cost of $250,000, leaving $250,000 worth of purchases left to be executed. The amounts disclosed in the table assume Mr. Griffin purchases the remaining $250,000 worth of common units as we believe this is probable of occurring.
|
|
Unit Awards
|
|||||
Name
|
Number of Units
Vested
|
|
Value Realized
on Vesting
(1)
|
|||
Timothy Go
|
333,478
|
|
|
$
|
2,678,902
|
|
F. William Grube
|
8,100
|
|
|
$
|
62,370
|
|
D. West Griffin
(2)
|
112,500
|
|
|
$
|
996,250
|
|
R. Patrick Murray, II
|
13,770
|
|
|
$
|
110,231
|
|
Bruce A. Fleming
|
92,010
|
|
|
$
|
773,477
|
|
William A. Anderson
|
44,775
|
|
|
$
|
390,268
|
|
|
(1)
|
Market value of phantom units reported in this column is calculated by multiplying the closing market price of our common units on the vesting date by the number of units vesting on such date.
|
(2)
|
Mr. Griffin agreed to purchase $500,000 worth of common units on the open market in exchange for vesting of his equity awards in accordance with his offer letter of employment. Mr. Griffin has purchased common units with an acquisition cost of $250,000, leaving $250,000 worth of purchases left to be executed. The amounts disclosed in the table assume Mr. Griffin purchases the remaining $250,000 worth of common units as we believe this is probable of occurring.
|
|
Executive Contributions in Nonqualified Deferred Compensation Table for 2017
|
||||||||||||||||||
Name
|
Executive
Contributions
in 2017
(1)
|
|
Company
Contributions
in 2017
(2)
|
|
Aggregate
Earnings
in 2017
(3)
|
|
Aggregate Withdrawals/ Distributions in 2017
(4)
|
|
Aggregate
Balance at End
of 2017
(5)
|
||||||||||
F. William Grube
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
278,655
|
|
R. Patrick Murray, II
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(286,082
|
)
|
|
$
|
—
|
|
|
(1)
|
No executive contributions were made with respect to the
2017
year. Executive contributions in
2017
would have represented phantom units granted to certain of our named executive officers based on their individual elections to defer all or a portion of their cash incentive award under the Cash Incentive Plan related to the
2017
fiscal year into the Deferred Compensation Plan.
|
(2)
|
No company contributions were made with respect to the
2017
year. Our contributions in
2017
would have represented discretionary matching contributions made in the form of phantom units granted to our named executive officers based on their individual elections to defer all or a portion of their cash award under the Cash Incentive Plan related to the
2017
fiscal year into the Deferred Compensation Plan.
|
(3)
|
Aggregate earnings in
2017
would have represented additional phantom units earned through DERs in the applicable named executive officer’s Deferred Compensation Plan account on phantom units granted under the executive contribution and the discretionary matching contribution in fiscal years 2015, 2014, 2012, 2011, 2010 and 2009. These amounts, which would have represented the fair value of the phantom units earned on the corresponding dates of our distributions to our unitholders in fiscal year
2017
, and would have been included as compensation in
2017
under “Unit Awards” in the Summary Compensation Table.
|
(4)
|
Represents phantom units distributed in accordance with Mr. Murray’s termination. The amount reported in this column represents the fair market value of the common units on the distribution date.
|
(5)
|
While the aggregate balance of each participant’s Deferred Compensation Plan account at the end of the fiscal year is comprised of the phantom units related to the executive and discretionary matching contributions as well as the phantom
|
•
|
Cause.
Mr. Go may be terminated for cause if: (i) Mr. Go is indicted for a felony (or a plea of nolo contendere thereto); (ii) Mr. Go’s conduct in connection with his employment duties or responsibilities is fraudulent, unlawful, or grossly
|
•
|
Change in Control.
Messrs. Go’s and Grube’s agreements state that a change in control may occur upon any of the following events:
|
◦
|
any “person” or “group,” within the meaning of those terms as used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended, other than the Company or its Affiliates, or Fred M. Fehsenfeld Jr. or F. William Grube or their respective immediate families or Affiliates, becomes the beneficial owner, by way or merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the voting power of the outstanding equity interests of the Company;
|
◦
|
a person or entity other than the Company or an Affiliate of the Company becomes the general partner of the Company; or
|
◦
|
the sale or other disposition, including by liquidation or dissolution, of all or substantially all of the assets of the Company in one or more transactions to any person other than an Affiliate of the Company.
|
•
|
Good Reason.
Mr. Go has the right to terminate employment under his employment agreement, upon the occurrence of any of the following circumstances, without his prior consent: (i) material diminution in his total compensation opportunity in effect on the Go Effective Date; (ii) material breach by us of any of our covenants or obligations under his agreement; (iii) material reduction in his authority, duties or responsibilities or reporting relationship; (iv) the involuntary relocation of the geographic location of his principal place of employment by more than 100 miles from the location of his principal place of employment as of the Go Effective Date; and (v) following a Change in Control (as defined in the agreement), our failure to obtain an agreement from any successor to us to assume and agree to perform this agreement in the same manner and to the same extent that we would be required to perform if no succession had taken place, except where such assumption occurs by operation of law; provided however, that notwithstanding the foregoing provisions or any other provisions of his agreement to the contrary, any assertion by him of a termination for Good Reason (as defined in his agreement) shall not be effective unless all of the following conditions are satisfied: (i) the conditions described above giving rise to his termination of employment must have arisen without his consent; (ii) he must provide written notice to the board of directors of the existence of such condition(s) within 30 days of the initial existence of such condition(s); (iii) the condition(s) specified in such notice must remain uncorrected for 30 days following the board of directors’ receipt of such written notice; and (iv) the date of his termination of employment must occur within 90 days after the initial existence of the condition(s) specified in such notice.
|
•
|
Totally Disabled.
Under Mr. Go’s employment agreement, we have the right to terminate his employment if he is unable to perform, with or without reasonable accommodation, the essential functions of his position as a result of a physical or mental injury or illness for a period of (i) 90 consecutive days or (ii) 180 days in any one year period.
|
Name
|
Benefits
|
|
Termination by Us Without Cause, or Good Reason Termination by Executive
|
|
Termination by Us for Cause, or Without Good Reason Termination by Executive
|
|
Termination by Us Without Cause, or Good Reason Termination, in Connection with a Change in Control
|
|
Termination Due to Death or Disability
|
|
Change in Control
|
||||||||||
Timothy Go
|
Base Salary
(1)
|
|
$
|
750,000
|
|
|
$
|
—
|
|
|
$
|
1,500,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Compensation Incentive Awards
(2)
|
|
656,250
|
|
|
—
|
|
|
1,312,500
|
|
|
437,500
|
|
|
—
|
|
||||||
Long-Term Incentive Plan
(3)
|
|
5,567,974
|
|
|
2,097,657
|
|
|
4,911,724
|
|
|
4,692,974
|
|
|
3,201,099
|
|
||||||
Post-Employment Health Care
(5)
|
|
37,055
|
|
|
—
|
|
|
55,583
|
|
|
—
|
|
|
—
|
|
||||||
Outplacement Assistance
(6)
|
|
50,000
|
|
|
—
|
|
|
50,000
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
7,061,279
|
|
|
$
|
2,097,657
|
|
|
$
|
7,829,807
|
|
|
$
|
5,130,474
|
|
|
$
|
3,201,099
|
|
|
F. William Grube
|
Base Salary
(1)
|
|
$
|
1,363,089
|
|
|
$
|
—
|
|
|
$
|
1,363,089
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Compensation Incentive Awards
(2)
|
|
227,182
|
|
|
—
|
|
|
227,182
|
|
|
227,182
|
|
|
—
|
|
||||||
Long-Term Incentive Plan
(3)
|
|
187,110
|
|
|
62,370
|
|
|
187,110
|
|
|
187,110
|
|
|
187,110
|
|
||||||
Deferred Compensation Plan
(4)
|
|
278,655
|
|
|
278,655
|
|
|
278,655
|
|
|
278,655
|
|
|
278,655
|
|
||||||
Total
|
|
$
|
2,056,036
|
|
|
$
|
341,025
|
|
|
$
|
2,056,036
|
|
|
$
|
692,947
|
|
|
$
|
465,765
|
|
|
D. West Griffin
|
Long-Term Incentive Plan
(3)
|
|
$
|
866,250
|
|
|
$
|
866,250
|
|
|
$
|
866,250
|
|
|
$
|
866,250
|
|
|
$
|
866,250
|
|
Total
|
|
$
|
866,250
|
|
|
$
|
866,250
|
|
|
$
|
866,250
|
|
|
$
|
866,250
|
|
|
$
|
866,250
|
|
|
Bruce A. Fleming
|
Long-Term Incentive Plan
(3)
|
|
$
|
1,259,173
|
|
|
$
|
708,477
|
|
|
$
|
1,259,173
|
|
|
$
|
1,259,173
|
|
|
$
|
1,259,173
|
|
Total
|
|
$
|
1,259,173
|
|
|
$
|
708,477
|
|
|
$
|
1,259,173
|
|
|
$
|
1,259,173
|
|
|
$
|
1,259,173
|
|
|
William A. Anderson
|
Long-Term Incentive Plan
(3)
|
|
$
|
372,488
|
|
|
$
|
344,768
|
|
|
$
|
372,488
|
|
|
$
|
372,488
|
|
|
$
|
372,488
|
|
Total
|
|
$
|
372,488
|
|
|
$
|
344,768
|
|
|
$
|
372,488
|
|
|
$
|
372,488
|
|
|
$
|
372,488
|
|
|
(1)
|
As per his employment agreement, Mr. Go will receive 3 times his base salary if a qualifying termination occurs within twenty-four months following a Change in Control (“Change in Control Period”) or 1.5 times his base salary if the qualifying termination occurs at any time other than the Change in Control Period and Mr. Grube will receive 3 times his base salary.
|
(2)
|
As per their employment agreements, for termination due to death or disability, Messrs. Go and Grube will be entitled to receive a pro rata portion of any incentive compensation awards for the bonus year in which the termination occurs. For termination for good reason by the executive or by us without cause, Mr. Go will be entitled to 3 times his cash incentive bonus if a qualifying termination occurs with the Change in Control Period or 1.5 times his cash incentive bonus if the termination occurs at any time other than the Change in Control Period and Mr. Grube will be entitled to receive a
|
(3)
|
All amounts assume that the executives received full vesting of equity awards due to the applicable qualifying termination or Change in Control event, and the value of all phantom units pursuant to equity awards under the Long-Term Incentive Plan were valued at our
December 29, 2017
(the last trading day of the fiscal year), closing common unit price of
$7.70
. As required pursuant to Section 409A of the Code, in the event that any of the executives are also “key employees” as defined in Section 409A of the Code at the time a settlement would become due, we would delay the settlement of such an executive’s equity awards until the first day of the seventh month following the applicable event requiring settlement of equity awards under the Long-Term Incentive Plan.
|
(4)
|
Amounts assume that the executives received full vesting of the accounts due to the applicable qualifying termination or Change in Control event or in the event of termination for cause, just the vested balance, and the value of all phantom units held in the Deferred Compensation Plan accounts was valued at our
December 29, 2017
(the last trading day of the fiscal year), closing common unit price of
$7.70
. As required pursuant to Section 409A of the Code, in the event that any of the executives are also “key employees” as defined in Section 409A of the Code at the time a settlement would become due, we would delay the settlement of such an executive’s account until the first day of the seventh month following the applicable event requiring settlement of the Deferred Compensation Plan account.
|
(5)
|
Per the employment agreement of Mr. Go, in connection with certain qualifying terminations, if the executive timely and properly elects continuation coverage under the Company’s group health plans pursuant to the Consolidated Omnibus Reconciliation act of 1985 (“COBRA”) then: (i) the Company shall reimburse the executive for the difference between the monthly amount the executive pays to effect and continue such coverage for himself and spouse and eligible dependents, if any, and the monthly employee contribution amount that active similarly situated employees of the Company pay for the same or similar coverage under such group health plans; and (ii) on and after the date the executive is no longer eligible to receive COBRA continuation coverage, if the executive has not become eligible to receive coverage under a group health plan sponsored by another employer, then the Company shall pay a lump sum cash payment equal to the product of (x) the monthly reimbursement amount and (y) (A) if such termination does not occur within the Change of Control Period, 18 and (B) if such termination occurs within the Change in Control Period, 24.
|
(6)
|
Per the employment agreement for Mr. Go, in connection with certain qualifying terminations, for the 12-month period beginning on his termination date, or until the executive begins other full-time employment with a new employer, whichever occurs first, the executive shall be entitled to receive outplacement services that are directly related to the termination of the executive’s employment and are provided by a nationally prominent executive outplacement services firm, provided however, that the total amount of the expenses paid by Company shall not exceed $50,000. A maximum payment is assumed to be made.
|
•
|
an annual fee of $70,000;
|
•
|
an annual award of restricted or phantom units with a market value of approximately $100,000;
|
•
|
an audit committee and strategy and growth committee chair annual fee of $10,000;
|
•
|
a non-chair audit committee member annual fee of $6,000;
|
•
|
a non-chair strategy and growth committee annual fee of $5,000;
|
•
|
a conflicts committee and compensation committee chair annual fee of $8,000;
|
•
|
a non-chair conflicts committee and compensation committee annual fee of $4,000;
|
•
|
all other committee chair annual fee of $5,000s; and
|
•
|
all other committee member annual fee of $2,500.
|
|
Director Compensation Table for 2017
|
||||||||||
Name
|
Fees Earned or
Paid in Cash
(1)
|
|
Unit
Awards
(2)
|
|
Total
|
||||||
Fred M. Fehsenfeld, Jr.
|
$
|
18,750
|
|
|
$
|
6,252
|
|
|
$
|
25,002
|
|
James S. Carter
|
$
|
21,000
|
|
|
$
|
7,000
|
|
|
$
|
28,000
|
|
Robert E. Funk
|
$
|
20,125
|
|
|
$
|
8,708
|
|
|
$
|
28,833
|
|
Stephen P. Mawer
|
$
|
20,250
|
|
|
$
|
—
|
|
|
$
|
20,250
|
|
George C. Morris III
(3)
|
$
|
20,000
|
|
|
$
|
6,668
|
|
|
$
|
26,668
|
|
Daniel J. Sajkowski
|
$
|
18,750
|
|
|
$
|
6,252
|
|
|
$
|
25,002
|
|
Amy M. Schumacher
|
$
|
18,750
|
|
|
$
|
6,252
|
|
|
$
|
25,002
|
|
|
(1)
|
Includes fees related to fiscal year 2016 earned in 2017. As noted above, the cash fees earned by each non-employee director in 2017 were paid in the form of phantom unit awards that were granted on March 7, 2018. Because the grant date of those phantom units occurred in 2018, the awards will be reflected within the Director Compensation table for 2018.
|
(2)
|
The amounts in this column are calculated based on the aggregate grant date fair value of matching phantom unit awards granted to those non-employee directors who deferred all of the 2016 fees they earned in 2017 pursuant to the Deferred Compensation. No phantom units were granted for 2017 until March 7, 2018. Due to the timing of the 2017 grants, the phantom units granted with respect to the 2017 year are not reflected within the table above, but will instead be included within the Director Compensation table for the 2018 year as applicable.
|
(3)
|
Mr. Morris resigned from the board of directors on March 28, 2017.
|
|
Annual Director Phantom Unit Awards
|
||||||||
|
Grant Date
|
|
Number of
Units Granted
(#)
(1)
|
|
Number of Matching Units Granted
(#) (2)
|
|
Aggregate Grant Date Fair Value
|
||
Fred M. Fehsenfeld, Jr.
|
March 7, 2018
|
|
24,722
|
|
4,677
|
|
$
|
240,280
|
|
James S. Carter
|
March 7, 2018
|
|
26,404
|
|
5,236
|
|
$
|
257,088
|
|
Robert E. Funk
|
March 7, 2018
|
|
27,340
|
|
5,548
|
|
$
|
266,448
|
|
Stephen P. Mawer
|
March 7, 2018
|
|
26,872
|
|
5,392
|
|
$
|
261,768
|
|
Daniel J. Sajkowski
|
March 7, 2018
|
|
24,722
|
|
4,677
|
|
$
|
240,280
|
|
Amy M. Schumacher
|
March 7, 2018
|
|
25,469
|
|
4,924
|
|
$
|
247,735
|
|
|
(1)
|
With respect to the annual phantom unit award, 25% of the phantom units vested immediately, entitling the director to receive an equal number of common units, with an additional 25% vesting on December 31
st
of each of the three successive years.
|
(2)
|
With respect to the Matching Units, the phantom units will vest December 31, 2021.
|
|
Annual Director Phantom Unit Awards
|
||||
|
Number of Units That Have Not Vested
|
|
Market Value of Units That Have Not Vested
(1)
|
||
Fred M. Fehsenfeld, Jr.
|
17,194
|
|
$
|
132,394
|
|
James S. Carter
|
17,194
|
|
$
|
132,394
|
|
Robert E. Funk
|
17,194
|
|
$
|
132,394
|
|
Stephen P. Mawer
|
15,872
|
|
$
|
122,214
|
|
Daniel J. Sajkowski
|
17,194
|
|
$
|
132,394
|
|
Amy M. Schumacher
|
17,194
|
|
$
|
132,394
|
|
Total
|
101,842
|
|
$
|
784,184
|
|
|
(1)
|
The market value of each director’s unvested phantom units as of
December 31, 2017
was determined by multiplying all unvested phantom units by the closing price of our common units on
December 29, 2017
(the last trading day of the fiscal year), which was
$7.70
.
|
|
(1)
|
The dollar amount of each director’s account as of
December 31, 2017
was determined by multiplying all phantom units deemed to be included in the participant’s account by the closing price of our common units on
December 29, 2017
(the last trading day of the fiscal year), which was
$7.70
.
|
•
|
The median of the annual total compensation of all employees of our general partner (other than the CEO) was
$78,676
; and
|
•
|
The annual total compensation of the CEO, as reported in the Summary Compensation Table included elsewhere within this Annual Report, was
$5,788,774
.
|
•
|
Based on this information, for 2017 the ratio of the annual total compensation of Mr. Go to the median of the annual total compensation of all employees was reasonably estimated to be
74
to 1.
|
•
|
We determined that, as of December 31, 2017, our general partner’s employee population consisted of approximately
1,600
individuals with all of these individuals located in the United States. This population consisted of our full-time, part-time, and temporary employees, as we do not have seasonal workers.
|
◦
|
We selected December 31, 2017 as our identification date for determining our median employee.
|
•
|
We used a consistently applied compensation measure to identify the median employee of comparing the amount of salary or wages and bonuses reflected in our general partner’s payroll records as reported to the Internal Revenue Service on Form W-2 for 2017. We did not annualize the compensation for any employees that were not employed by our general partner for all of 2017.
|
◦
|
We do not widely distribute annual equity awards to employees, therefore such awards were excluded from our compensation measure.
|
•
|
We identified our general partner’s median employee by consistently applying this compensation measure to all of our employees included in our analysis. Since all of our general partner’s employees, including the CEO, are located in the United States, we did not make any cost of living adjustments in identifying the median employee.
|
•
|
After we identified our general partner’s median employee, we combined all of the elements of such employee’s compensation for the 2017 year in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of
$78,676
. The difference between such employee’s salary, wages and overtime pay and the employee’s annual total compensation represents contributions in the amount of
$13,940
that we made on the employee’s behalf to our 401(k) plan for the 2017 year and to the employee’s health savings account for the 2017 year.
|
•
|
With respect to the annual total compensation of the CEO, we used the amount reported in the “Total” column of our 2017 Summary Compensation Table included in this Annual Report.
|
•
|
each person who beneficially owns 5% or more of our outstanding units;
|
•
|
each director of our general partner;
|
•
|
each named executive officer of our general partner; and
|
•
|
all directors, and executive officers of our general partner as a group.
|
Name of Beneficial Owner
|
Common Units
Beneficially
Owned
|
|
Percentage of Total
Units Beneficially
Owned
|
||
The Heritage Group
(1)(2)
|
11,867,533
|
|
|
15.43
|
%
|
Calumet, Incorporated
(2)
|
1,934,287
|
|
|
2.52
|
%
|
William A. Anderson
(3)
|
69,708
|
|
|
*
|
|
Christopher H. Bohnert
|
3,701
|
|
|
*
|
|
James S. Carter
|
120,394
|
|
|
*
|
|
Fred M. Fehsenfeld, Jr.
(1)(2)(4)(5)
|
711,733
|
|
|
*
|
|
Bruce A. Fleming
|
178,799
|
|
|
*
|
|
Robert E. Funk
|
73,997
|
|
|
*
|
|
Timothy Go
|
151,919
|
|
|
*
|
|
D. West Griffin
|
54,905
|
|
|
*
|
|
F. William Grube
(6)
|
231,464
|
|
|
*
|
|
Stephen P. Mawer
|
29,037
|
|
|
*
|
|
Daniel J. Sajkowski
|
14,545
|
|
|
*
|
|
Amy M. Schumacher
(1)(5)(7)
|
24,245
|
|
|
*
|
|
All directors and executive officers as a group (12 persons)
|
1,664,447
|
|
|
2.16
|
%
|
|
*
|
= less than 1 percent.
|
(1)
|
Thirty grantor trusts indirectly own all of the outstanding general partner interests in The Heritage Group, an Indiana general partnership. The direct or indirect beneficiaries of the grantor trusts are members of the Fehsenfeld family. Each of the grantor trusts has five trustees, Fred M. Fehsenfeld, Jr., James C. Fehsenfeld, Nicholas J. Rutigliano, William S. Fehsenfeld and Amy M. Schumacher, each of whom exercises equivalent voting rights with respect to each such trust. Each of Fred M. Fehsenfeld, Jr. and Amy M. Schumacher, who are directors of our general partner, disclaims beneficial ownership of all of the common units owned by The Heritage Group, and none of these units are shown as being beneficially owned by such directors in the table above. Of these common units, 367,197 are owned by The Heritage Group Investment Company, LLC (“Investment LLC”). Investment LLC is under common ownership with The Heritage Group. The Heritage Group, although not the owner of the common units, serves as the Manager of Investment LLC, and in that capacity has sole voting and investment power over the common units. The Heritage Group disclaims beneficial ownership of the common units owned by Investment LLC except to the extent of its pecuniary interest therein. The address for The Heritage Group is 5400 W. 86th St., Indianapolis, Indiana, 46268.
|
(2)
|
The common units of Calumet, Incorporated are indirectly owned 45.8% by The Heritage Group and 5.1% by Fred M. Fehsenfeld, Jr. personally. Fred M. Fehsenfeld, Jr. is also a director of Calumet, Incorporated. Accordingly, 885,294 of the common units owned by Calumet, Incorporated are also shown as being beneficially owned by The Heritage Group in the table above, and 97,971 of the common units owned by Calumet, Incorporated are also shown as being beneficially owned by Fred M. Fehsenfeld, Jr. in the table above. The Heritage Group and Fred M. Fehsenfeld, Jr. disclaim beneficial ownership of all of the common units owned by Calumet, Incorporated in excess of their respective pecuniary interests in such units. The address of Calumet, Incorporated is 5400 W. 86th St., Indianapolis, Indiana, 46268.
|
(3)
|
Includes common units that are owned by the children of William A. Anderson, for which he disclaims beneficial ownership.
|
(4)
|
Includes common units that are owned by the spouse and certain children of Fred M. Fehsenfeld, Jr., for which he disclaims beneficial ownership.
|
(5)
|
Does not include a total of 1,979,804 common units owned by two trusts, the direct or indirect beneficiaries of which are members of the Fred M. Fehsenfeld, Jr. family. Each of the trusts has five trustees, Fred M. Fehsenfeld, Jr., James C. Fehsenfeld, Nicholas J. Rutigliano, William S. Fehsenfeld and Amy M. Schumacher, each of whom exercises equivalent voting rights with respect to each such trust. Each of Fred M. Fehsenfeld, Jr. and Amy M. Schumacher, who are directors of our general partner, disclaims beneficial ownership of all of the common units owned by the trusts, and none of these units are shown as being beneficially owned by such directors in the table above.
|
(6)
|
Includes common units that are owned by the spouse of F. William Grube, for which he disclaims beneficial ownership.
|
(7)
|
Includes common units that are owned by the spouse and children of Amy M. Schumacher, for which she disclaims beneficial ownership.
|
|
Number of Securities
to be Issued Upon
Exercise of Outstanding
Options, Warrants
and Rights
(1)
|
|
Weighted-Average
Exercise Price
of Outstanding
Options, Warrants
and Rights
|
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected
in Column (a))
|
||||
Long-Term Incentive Plan
|
2,495,460
|
|
|
—
|
|
|
196,875
|
|
|
Total
|
2,495,460
|
|
|
$
|
—
|
|
|
196,875
|
|
|
(1)
|
The Long-Term Incentive Plan contemplates the issuance or delivery of up to 3,883,960 common units to satisfy awards under the plan. The number of units presented in column (a) assumes that all outstanding grants may be satisfied by the issuance of new units or the purchase of existing units on the open market upon vesting. In fact, some portion of the phantom units may be settled in cash and some portion will be withheld for taxes. Any units not issued upon vesting will become “available for future issuance” under Column (c). For more information on our Long-Term Incentive Plan, which did not require approval by our limited partners, refer to Item 11 “Executive and Director Compensation — Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table — Description of Long-Term Incentive Plan.”
|
•
|
any business owned or operated by The Heritage Group or any of its affiliates as of January 31, 2006;
|
•
|
the refining and marketing of asphalt and asphalt-related products and related product development activities;
|
•
|
the refining and marketing of other products that do not produce “qualifying income” as defined in the Internal Revenue Code;
|
•
|
the purchase and ownership of up to 9.9% of any class of securities of any entity engaged in any restricted business;
|
•
|
any restricted business acquired or constructed that The Heritage Group or any of its affiliates acquires or constructs that has a fair market value or construction cost, as applicable, of less than $5.0 million;
|
•
|
any restricted business acquired or constructed that has a fair market value or construction cost, as applicable, of $5.0 million or more if we have been offered the opportunity to purchase it for fair market value or construction cost and we decline to do so with the concurrence of the conflicts committee of the board of directors of our general partner; and
|
•
|
any business conducted by The Heritage Group with the approval of the conflicts committee of the board of directors of our general partner.
|
(a)
|
in the normal course of the Company’s business;
|
(b)
|
not one in which the CEO or any of his immediate family members has a direct or indirect material interest; and
|
(c)
|
on terms no less favorable to the Company than those generally being provided to or available from unrelated third parties or fair to the Company, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Company).
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Audit fees
|
$
|
6.4
|
|
|
$
|
7.0
|
|
Audit-related fees
|
—
|
|
|
0.1
|
|
||
Total
|
$
|
6.4
|
|
|
$
|
7.1
|
|
|
|
|
|
|
CALUMET SPECIALTY PRODUCTS
PARTNERS, L.P.
|
||
|
|
|
|
|
By:
|
|
CALUMET GP, LLC
its general partner
|
|
|
|
|
|
By:
|
|
/s/ Timothy Go
|
|
|
|
Timothy Go
|
|
|
|
Chief Executive Officer
|
Name
|
|
Title
|
|
|
Date
|
|
|
|
|
|
|
/s/ Timothy Go
|
|
Chief Executive Officer of Calumet GP, LLC
(Principal Executive Officer)
|
|
Date:
|
April 2, 2018
|
Timothy Go
|
|
|
|
|
|
|
|
|
|
|
|
/s/ D. West Griffin
|
|
Executive Vice President and Chief Financial Officer of Calumet GP, LLC (Principal Accounting and Financial Officer)
|
|
Date:
|
April 2, 2018
|
D. West Griffin
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Fred M. Fehsenfeld, Jr.
|
|
Director and Chairman of the Board of Calumet GP, LLC
|
|
Date:
|
April 2, 2018
|
Fred M. Fehsenfeld, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
/s/ James S. Carter
|
|
Director of Calumet GP, LLC
|
|
Date:
|
April 2, 2018
|
James S. Carter
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert E. Funk
|
|
Director of Calumet GP, LLC
|
|
Date:
|
April 2, 2018
|
Robert E. Funk
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Stephen P. Mawer
|
|
Director of Calumet GP, LLC
|
|
Date:
|
April 2, 2018
|
Stephen P. Mawer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Daniel J. Sajkowski
|
|
Director of Calumet GP, LLC
|
|
Date:
|
April 2, 2018
|
Daniel J. Sajkowski
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Amy M. Schumacher
|
|
Director of Calumet GP, LLC
|
|
Date:
|
April 2, 2018
|
Amy M. Schumacher
|
|
|
|
|
Exhibit Number
|
|
|
|
Description
|
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
Exhibit Number
|
|
|
|
Description
|
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
100.INS*
|
|
—
|
|
XBRL Instance Document.
|
101.SCH*
|
|
—
|
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL*
|
|
—
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF*
|
|
—
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB*
|
|
—
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE*
|
|
—
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
†
|
Identifies management contract and compensatory plan arrangements.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
Re:
|
Second Amended and Restated Credit Agreement dated as of July 14, 2014 (as the same may be amended or otherwise modified, the “
Credit Agreement
”), among Calumet Specialty Products Partners, L.P. (“
MLP Parent
”), certain Subsidiaries of MLP Parent party thereto, the Lenders party thereto, and Bank of America, N.A., as agent for the Lender (“
Agent
”); all capitalized terms used herein, unless otherwise defined herein, shall have the same meaning as in the Credit Agreement
|
|
BORROWERS
:
|
Lender
|
Commitment
|
Applicable
Percentage
|
Bank of America, N.A.
|
$141,750,000.00
|
15.75%
|
Wells Fargo Bank, National Association
|
$123,750,000.00
|
13.75%
|
JPMorgan Chase Bank, N.A.
|
$103,500,000.00
|
11.50%
|
U.S. Bank National Association
|
$ 72,000,000.00
|
8.00%
|
Deutsche Bank Trust Company Americas
|
$ 63,000,000.00
|
7.00%
|
Natixis
|
$ 54,000,000.00
|
6.00%
|
PNC Bank, National Association
|
$ 54,000,000.00
|
6.00%
|
Regions Bank
|
$ 54,000,000.00
|
6.00%
|
Royal Bank of Canada
|
$ 45,000,000.00
|
5.00%
|
Barclays Bank PLC
|
$ 45,000,000.00
|
5.00%
|
The Bank of Tokyo-Mitsubishi UFJ
|
$ 40,500,000.00
|
|
Compass Bank
|
$ 29,250,000.00
|
3.25%
|
BMO Harris Bank, N.A.
|
$ 24,750,000.00
|
2.75%
|
Goldman Sachs Bank USA
|
$ 24,750,000.00
|
2.75%
|
Siemens Financial Services
|
$ 24,750,000.00
|
|
Total
|
$900,000,000.00
|
92.75%
|
Re:
|
Second Amended and Restated Credit Agreement dated as of July 14, 2014 (as the same may be amended or otherwise modified, the "
Credit Agreement
"), among Calumet Specialty Products Partners, L.P. ("
MLP Parent
"), certain Subsidiaries of MLP Parent party thereto, the Lenders party thereto, and Bank of America, N.A., as agent for the Lender ("
Agent
"); all capitalized terms used herein, unless otherwise defined herein, shall have the same meaning as in the Credit Agreement
|
|
BORROWERS
:
|
Lender
|
Commitment
|
Applicable
Percentage
|
Bank of America, N.A.
|
$141,750,000.00
|
15.75%
|
Wells Fargo Bank, National Association
|
$123,750,000.00
|
13.75%
|
JPMorgan Chase Bank, N.A.
|
$103,500,000.00
|
11.50%
|
U.S. Bank National Association
|
$ 72,000,000.00
|
8.00%
|
Deutsche Bank Trust Company Americas
|
$ 63,000,000.00
|
7.00%
|
Natixis
|
$ 54,000,000.00
|
6.00%
|
PNC Bank, National Association
|
$ 54,000,000.00
|
6.00%
|
Regions Bank
|
$ 54,000,000.00
|
6.00%
|
Royal Bank of Canada
|
$ 45,000,000.00
|
5.00%
|
Barclays Bank PLC
|
$ 45,000,000.00
|
5.00%
|
The Bank of Tokyo-Mitsubishi UFJ
|
$ 40,500,000.00
|
4.50%
|
Compass Bank
|
$ 29,250,000.00
|
3.25%
|
BMO Harris Bank, N.A.
|
$ 24,750,000.00
|
2.75%
|
Goldman Sachs Bank USA
|
$ 24,750,000.00
|
2.75%
|
Siemens Financial Services
|
$ 24,750,000.00
|
2.75%
|
Total
|
$900,000,000.00
|
100%
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
(Unaudited)
(Dollars in millions)
|
||||||||||||||||||
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||
Earnings
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations before income taxes
|
|
$
|
3.9
|
|
|
$
|
(96.8
|
)
|
|
$
|
(85.2
|
)
|
|
$
|
(296.6
|
)
|
|
$
|
(31.4
|
)
|
Fixed charges less capitalized interest
|
|
120.4
|
|
|
146.0
|
|
|
150.4
|
|
|
205.5
|
|
|
225.2
|
|
|||||
Income (loss) from continuing operations before income taxes and fixed charges
|
|
$
|
124.3
|
|
|
$
|
49.2
|
|
|
$
|
65.2
|
|
|
$
|
(91.1
|
)
|
|
$
|
193.8
|
|
Fixed Charges
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net of capitalized interest
|
|
$
|
96.8
|
|
|
$
|
110.8
|
|
|
$
|
104.9
|
|
|
$
|
161.7
|
|
|
$
|
183.1
|
|
Capitalized interest, net of amortization
|
|
4.4
|
|
|
12.0
|
|
|
28.6
|
|
|
5.1
|
|
|
2.1
|
|
|||||
Estimated interest within rental expense
|
|
23.6
|
|
|
35.2
|
|
|
45.5
|
|
|
43.8
|
|
|
42.1
|
|
|||||
Total fixed charges
|
|
$
|
124.8
|
|
|
$
|
158.0
|
|
|
$
|
179.0
|
|
|
$
|
210.6
|
|
|
$
|
227.3
|
|
Ratio of earnings to fixed charges
|
|
1.00
|
|
|
0.31
|
|
|
0.36
|
|
|
(0.43
|
)
|
|
0.85
|
|
|||||
Coverage deficiency
|
|
N/A
|
|
|
$
|
108.8
|
|
|
$
|
113.8
|
|
|
$
|
301.7
|
|
|
$
|
33.5
|
|
|
|
|
Name of Subsidiary
|
|
Jurisdiction of Organization
|
Calumet Operating, LLC
|
|
Delaware
|
Calumet Refining, LLC
|
|
Delaware
|
Calumet Shreveport Refining, LLC
|
|
Delaware
|
Calumet Shreveport Fuels, LLC
|
|
Indiana
|
Calumet Finance Corp.
|
|
Delaware
|
Calumet Karns City Refining, LLC
|
|
Delaware
|
Calumet Dickinson Refining, LLC
|
|
Delaware
|
Calumet Missouri, LLC
|
|
Delaware
|
Calumet Montana Refining, LLC
|
|
Delaware
|
Calumet San Antonio Refining, LLC
|
|
Delaware
|
Calumet Branded Products, LLC
|
|
Delaware
|
Bel-Ray Company, LLC
|
|
Delaware
|
Bel-Ray Company Pty Limited
|
|
Australia
|
Kurlin Company, LLC
|
|
Delaware
|
Calumet Mexico, LLC
|
|
Delaware
|
Calumet Specialty Oils de Mexico, S. de R.L. de C.V.
|
|
Mexico
|
Calumet Africa Proprietary Limited
|
|
South Africa
|
Calumet Princeton Refining, LLC
|
|
Delaware
|
Calumet Cotton Valley Refining, LLC
|
|
Delaware
|
Calumet Specialty Products Canada, ULC
|
|
Canada
|
Calumet International, Inc.
|
|
Delaware
|
|
|
|
|
|
|
Date:
|
April 2, 2018
|
/s/ Timothy Go
|
|
|
Timothy Go
|
|
|
Chief Executive Officer of Calumet GP, LLC, general partner of
Calumet Specialty Products Partners, L.P.
(Principal Executive Officer)
|
|
|
|
Date:
|
April 2, 2018
|
/s/ D. West Griffin
|
|
|
D. West Griffin
Executive Vice President and Chief Financial Officer of Calumet GP, LLC, general partner of Calumet Specialty Products Partners, L.P.
(Principal Financial Officer)
|
|
|
April 2, 2018
|
/s/ Timothy Go
|
|
Timothy Go
|
|
Chief Executive Officer of Calumet GP, LLC
|
|
|
April 2, 2018
|
/s/ D. West Griffin
|
|
D. West Griffin
|
|
Executive Vice President and Chief Financial Officer of Calumet GP, LLC
|
|
Period from
1/1/16 to 6/27/16 (Unaudited) |
|
2015
(Audited)
|
||||
|
(In thousands)
|
||||||
Operating revenues
|
$
|
118,536
|
|
|
$
|
178,262
|
|
Operating expenses:
|
|
|
|
||||
Cost of crude oil
|
98,078
|
|
|
159,811
|
|
||
Operation and maintenance
|
40,764
|
|
|
67,980
|
|
||
Depreciation and amortization
|
11,752
|
|
|
16,377
|
|
||
Taxes, other than income
|
1,183
|
|
|
1,630
|
|
||
Impairment of long-lived assets (Note 2)
|
371,028
|
|
|
—
|
|
||
Total operating expenses
|
522,805
|
|
|
245,798
|
|
||
Operating loss
|
(404,269
|
)
|
|
(67,536
|
)
|
||
Other income
|
53
|
|
|
74
|
|
||
Interest expense
|
1,798
|
|
|
1,889
|
|
||
Net loss
|
$
|
(406,014
|
)
|
|
$
|
(69,351
|
)
|
Comprehensive loss
|
$
|
(406,014
|
)
|
|
$
|
(69,351
|
)
|
December 31,
|
2015
(Audited)
|
||
Assets
|
(In thousands)
|
||
Current assets:
|
|
||
Cash and cash equivalents
|
$
|
851
|
|
Accounts receivable, net
|
7,693
|
|
|
Inventories
|
13,176
|
|
|
Prepayments and other current assets
|
6,215
|
|
|
Total current assets
|
27,935
|
|
|
Property, plant and equipment
(Note 2)
|
442,766
|
|
|
Less accumulated depreciation and amortization
|
17,643
|
|
|
Net property, plant and equipment
|
425,123
|
|
|
Deferred charges and other assets:
|
|
||
Other
|
9,626
|
|
|
Total deferred charges and other assets
|
9,626
|
|
|
Total assets
|
$
|
462,684
|
|
Liabilities and Members’ Equity
|
|
||
Current liabilities:
|
|
||
Short-term borrowings (Note 4)
|
$
|
45,500
|
|
Long-term debt due within one year
|
5,250
|
|
|
Accounts payable
|
24,766
|
|
|
Taxes payable
|
1,391
|
|
|
Accrued compensation
|
938
|
|
|
Other current liabilities
|
4,953
|
|
|
Total current liabilities
|
82,798
|
|
|
Long-term debt
(Note 4)
|
63,750
|
|
|
Commitments and contingencies
(Note 6)
|
|
||
Members’ equity:
|
|
||
Members’ capital
|
419,001
|
|
|
Accumulated deficit
|
(102,865
|
)
|
|
Total members’ equity
|
316,136
|
|
|
Total liabilities and members’ equity
|
$
|
462,684
|
|
|
WBI Energy, Inc.
|
|
Calumet North Dakota, LLC
|
|
Total
|
||||||
|
(In thousands)
|
||||||||||
Balance at December 31, 2014 (Unaudited)
|
$
|
190,743
|
|
|
$
|
115,744
|
|
|
$
|
306,487
|
|
Contributions
|
52,000
|
|
|
52,000
|
|
|
104,000
|
|
|||
Distributions
|
(16,557
|
)
|
|
(8,443
|
)
|
|
(25,000
|
)
|
|||
Net Loss
|
(34,094
|
)
|
|
(35,257
|
)
|
|
(69,351
|
)
|
|||
Balance at December 31, 2015
|
$
|
192,092
|
|
|
$
|
124,044
|
|
|
$
|
316,136
|
|
|
Period from
1/1/16 to 6/27/16
(Unaudited)
|
|
2015
(Audited)
|
||||
|
(In thousands)
|
||||||
Operating activities:
|
|
|
|
||||
Net loss
|
$
|
(406,014
|
)
|
|
$
|
(69,351
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|||
Depreciation, depletion and amortization
|
11,752
|
|
|
16,377
|
|
||
Impairment
|
371,028
|
|
|
—
|
|
||
Changes in current assets and liabilities:
|
|
|
|
||||
Receivables
|
(6,712
|
)
|
|
(4,934
|
)
|
||
Inventories
|
13,310
|
|
|
(20,595
|
)
|
||
Other current assets
|
3,667
|
|
|
(1,638
|
)
|
||
Accounts payable
|
(3,719
|
)
|
|
12,010
|
|
||
Other current liabilities
|
(2,359
|
)
|
|
1,956
|
|
||
Other noncurrent changes
|
(7,337
|
)
|
|
15,024
|
|
||
Net cash used in operating activities
|
(26,384
|
)
|
|
(51,151
|
)
|
||
|
|
|
|
||||
Investing activities:
|
|
|
|
|
|||
Capital expenditures
|
(597
|
)
|
|
(90,869
|
)
|
||
Proceeds from sale or disposition of property and other
|
45
|
|
|
—
|
|
||
Net cash used in investing activities
|
(552
|
)
|
|
(90,869
|
)
|
||
|
|
|
|
||||
Financing activities:
|
|
|
|
|
|||
Issuance of short-term borrowings
|
|
|
|
45,500
|
|
||
Issuance of long-term debt
|
(45,500
|
)
|
|
—
|
|
||
Repayment of long-term debt
|
(3,000
|
)
|
|
(3,000
|
)
|
||
Debt financing costs
|
—
|
|
|
(5
|
)
|
||
Member contributions
|
74,884
|
|
|
104,000
|
|
||
Member distributions
|
—
|
|
|
(25,000
|
)
|
||
Net cash provided by financing activities
|
26,384
|
|
|
121,495
|
|
||
Increase (decrease) in cash and cash equivalents
|
(552
|
)
|
|
(20,525
|
)
|
||
Cash and cash equivalents – beginning of period
|
851
|
|
|
21,376
|
|
||
Cash and cash equivalents – end of period
|
$
|
299
|
|
|
$
|
851
|
|
|
|
2015
|
||
|
|
(In thousands)
|
||
Refined products
|
|
$
|
8,498
|
|
Crude oil
|
|
4,678
|
|
|
Materials and supplies
|
|
—
|
|
|
Total
|
|
$
|
13,176
|
|
|
|
2015
|
||
|
|
(In thousands)
|
||
Interest capitalized
|
|
$
|
521
|
|
|
|
2015
|
|
Weighted Average Depreciable
Life in Years |
||
|
|
(Dollars in thousands, where applicable)
|
||||
Refinery:
|
|
|
|
|
||
Construction in progress
|
|
$
|
135
|
|
|
---
|
Refining facilities and related infrastructure
|
|
441,659
|
|
|
10-20
|
|
Other
|
|
972
|
|
|
3-10
|
|
Less accumulated depreciation and amortization
|
|
17,643
|
|
|
|
|
Net property, plant and equipment
|
|
$
|
425,123
|
|
|
|
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Interest, net of amount capitalized
|
$
|
1,798
|
|
|
$
|
1,611
|
|
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Property, plant and equipment additions in accounts payable
|
$
|
378
|
|
|
$
|
7,329
|
|
|
2015
|
||||||
|
Carrying Amount
|
|
Fair Value
|
||||
|
(In thousands)
|
||||||
Long-term debt
|
$
|
69,000
|
|
|
$
|
67,545
|
|
|
2015
|
||
|
(In thousands)
|
||
Term loan agreements at a weighted average rate of 2.16%, due on dates ranging from April 22, 2018 to April 22, 2023
|
$
|
69,000
|
|
Less current maturities
|
5,250
|
|
|
Net long-term debt
|
$
|
63,750
|
|