|
Delaware
|
|
35-1811116
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification Number)
|
Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
Common units representing limited partner interests
|
|
The NASDAQ Stock Market LLC
|
Large accelerated filer
|
|
☐
|
|
Accelerated filer
|
|
☑
|
Non-accelerated filer
|
|
☐
|
|
Smaller reporting company
|
|
☐
|
|
|
|
|
Emerging growth company
|
|
☐
|
|
|
|
Page
|
PART I
|
||
Items 1 and 2.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 3.
|
||
Item 4.
|
||
|
||
PART II
|
||
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
||
PART III
|
||
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
||
PART IV
|
||
Item 15.
|
Refinery/Facility
|
|
Location
|
|
Year Acquired
|
|
Current Feedstock Throughput Capacity in Barrels Per Day (“bpd”)
|
|
Products
|
Shreveport
|
|
Louisiana
|
|
2001
|
|
60,000
|
|
Specialty lubricating oils and waxes, gasoline, diesel, jet fuel and asphalt
|
Great Falls
|
|
Montana
|
|
2012
|
|
25,000
|
|
Gasoline, diesel, jet fuel and asphalt
|
San Antonio
|
|
Texas
|
|
2013
|
|
21,000
|
|
Diesel, jet fuel, gasoline, other fuel products
|
Cotton Valley
|
|
Louisiana
|
|
1995
|
|
13,500
|
|
Specialty solvents used principally in the manufacture of paints, cleaners, automotive products and drilling fluids
|
Princeton
|
|
Louisiana
|
|
1990
|
|
10,000
|
|
Specialty lubricating oils, including process oils, base oils, transformer oils and refrigeration oils, and asphalt
|
Karns City
|
|
Pennsylvania
|
|
2008
|
|
5,500
|
|
Specialty white mineral oils, solvents, petrolatums, gelled hydrocarbons, cable fillers and natural petroleum sulfonates
|
Dickinson
|
|
Texas
|
|
2008
|
|
1,300
|
|
Specialty white mineral oils, compressor lubricants, natural petroleum sulfonates and biodiesel
|
Calumet Packaging
|
|
Louisiana
|
|
2012
|
|
N/A
|
|
Specialty products including premium industrial and consumer synthetic lubricants, fuels and solvents
|
Royal Purple
|
|
Texas
|
|
2012
|
|
N/A
|
|
Specialty products including premium industrial and consumer synthetic lubricants
|
Bel-Ray
|
|
New Jersey
|
|
2013
|
|
N/A
|
|
Specialty products including premium industrial and consumer synthetic lubricants and greases
|
Missouri
|
|
Missouri
|
|
2012
|
|
N/A
|
|
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.
|
•
|
Concentrate on Stable Cash Flows.
We intend to continue to focus on operating assets and businesses that generate stable cash flows. Approximately
67%
of our continuing operations gross profit and
61%
of our continuing operations Adjusted EBITDA in
2018
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 approximately
33%
of our continuing operations gross profit and
39%
of our continuing operations Adjusted EBITDA in
2018
, we will sometimes hedge crude oil basis differentials and fuel product crack spreads with the intent of capturing spreads that are favorable to the Company, while reducing fuel product margin volatility. 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.
|
•
|
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.
|
•
|
We Offer Our Customers a Diverse Range of Specialty Products.
We offer a wide range of over 3,000 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.
|
•
|
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. In fiscal year
2018
, we sold our fuel and specialty products to approximately 2,700 customers 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, 2018
,
2017
and
2016
.
|
•
|
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.
|
•
|
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.
|
•
|
In May 2018, Pacific New Investment Limited (“PACNIL”), an entity formed by Calumet and The Heritage Group for the purpose of investing in a joint venture with Shandong Hi-Speed Hainan Development Co., Ltd. (“Hi-Speed”), sold its equity interest in Hi-Speed to other owners. We received proceeds of
$9.9 million
for the sale. See
Note 6
“
Investment in Unconsolidated Affiliates
” under Part II, Item 8 “Financial Statements and Supplementary Data” for additional information.
|
•
|
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
, excluding revenues
|
•
|
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 4
“
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 Refining, LLC (“Dakota Prairie”) for total 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 6
“
Investment in Unconsolidated Affiliates
” under Part II, Item 8 “Financial Statements and Supplementary Data” for additional information.
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
2017
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||
|
(In bpd)
|
|
|
|
(In bpd)
|
|
|
||||||||||
Total sales volume
(1)
|
97,104
|
|
|
132,082
|
|
|
(26.5
|
)%
|
|
132,082
|
|
|
140,180
|
|
|
(5.8
|
)%
|
Total feedstock runs
(2)
|
94,137
|
|
|
128,624
|
|
|
(26.8
|
)%
|
|
128,624
|
|
|
134,163
|
|
|
(4.1
|
)%
|
Facility production:
(3)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Specialty products:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Lubricating oils
|
11,931
|
|
|
14,606
|
|
|
(18.3
|
)%
|
|
14,606
|
|
|
14,697
|
|
|
(0.6
|
)%
|
Solvents
|
7,649
|
|
|
7,761
|
|
|
(1.4
|
)%
|
|
7,761
|
|
|
7,427
|
|
|
4.5
|
%
|
Waxes
|
1,279
|
|
|
1,423
|
|
|
(10.1
|
)%
|
|
1,423
|
|
|
1,571
|
|
|
(9.4
|
)%
|
Packaged and synthetic specialty products
(4)
|
2,129
|
|
|
2,206
|
|
|
(3.5
|
)%
|
|
2,206
|
|
|
1,777
|
|
|
24.1
|
%
|
Other
|
2,113
|
|
|
1,811
|
|
|
16.7
|
%
|
|
1,811
|
|
|
1,850
|
|
|
(2.1
|
)%
|
Total specialty products
|
25,101
|
|
|
27,807
|
|
|
(9.7
|
)%
|
|
27,807
|
|
|
27,322
|
|
|
1.8
|
%
|
Fuel products:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gasoline
|
20,323
|
|
|
35,713
|
|
|
(43.1
|
)%
|
|
35,713
|
|
|
37,713
|
|
|
(5.3
|
)%
|
Diesel
|
27,367
|
|
|
33,277
|
|
|
(17.8
|
)%
|
|
33,277
|
|
|
34,808
|
|
|
(4.4
|
)%
|
Jet fuel
|
2,895
|
|
|
5,368
|
|
|
(46.1
|
)%
|
|
5,368
|
|
|
5,306
|
|
|
1.2
|
%
|
Asphalt, heavy fuel oils and other
|
19,612
|
|
|
29,396
|
|
|
(33.3
|
)%
|
|
29,396
|
|
|
29,780
|
|
|
(1.3
|
)%
|
Total fuel products
|
70,197
|
|
|
103,754
|
|
|
(32.3
|
)%
|
|
103,754
|
|
|
107,607
|
|
|
(3.6
|
)%
|
Total facility production
(3)
|
95,298
|
|
|
131,561
|
|
|
(27.6
|
)%
|
|
131,561
|
|
|
134,929
|
|
|
(2.5
|
)%
|
|
(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 also 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 finished lubricants and specialty chemicals products, including the products from the Royal Purple, Bel-Ray and Calumet Packaging facilities.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
(In millions)
|
|
% of Sales
|
|
(In millions)
|
|
% of Sales
|
|
(In millions)
|
|
% of Sales
|
|||||||||
Sales of specialty products:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Lubricating oils
|
$
|
600.1
|
|
|
17.2
|
%
|
|
$
|
584.2
|
|
|
15.5
|
%
|
|
$
|
538.7
|
|
|
15.5
|
%
|
Solvents
|
331.9
|
|
|
9.5
|
%
|
|
274.4
|
|
|
7.3
|
%
|
|
237.7
|
|
|
6.8
|
%
|
|||
Waxes
|
117.0
|
|
|
3.3
|
%
|
|
117.2
|
|
|
3.1
|
%
|
|
128.7
|
|
|
3.7
|
%
|
|||
Packaged and synthetic specialty products
(1)
|
256.8
|
|
|
7.3
|
%
|
|
260.7
|
|
|
6.9
|
%
|
|
244.7
|
|
|
7.0
|
%
|
|||
Other
(2)
|
76.6
|
|
|
2.2
|
%
|
|
63.9
|
|
|
1.7
|
%
|
|
102.5
|
|
|
3.0
|
%
|
|||
Total
|
1,382.4
|
|
|
39.5
|
%
|
|
1,300.4
|
|
|
34.5
|
%
|
|
1,252.3
|
|
|
36.0
|
%
|
|||
Sales of fuel products:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gasoline
|
683.1
|
|
|
19.5
|
%
|
|
948.5
|
|
|
25.2
|
%
|
|
844.3
|
|
|
24.3
|
%
|
|||
Diesel
|
910.0
|
|
|
26.0
|
%
|
|
877.9
|
|
|
23.4
|
%
|
|
808.4
|
|
|
23.3
|
%
|
|||
Jet fuel
|
100.1
|
|
|
2.9
|
%
|
|
135.0
|
|
|
3.6
|
%
|
|
117.5
|
|
|
3.4
|
%
|
|||
Asphalt, heavy fuel oils and other
(3)
|
421.9
|
|
|
12.1
|
%
|
|
502.0
|
|
|
13.3
|
%
|
|
451.8
|
|
|
13.0
|
%
|
|||
Total
|
2,115.1
|
|
|
60.5
|
%
|
|
2,463.4
|
|
|
65.5
|
%
|
|
2,222.0
|
|
|
64.0
|
%
|
|||
Consolidated sales
|
$
|
3,497.5
|
|
|
100.0
|
%
|
|
$
|
3,763.8
|
|
|
100.0
|
%
|
|
$
|
3,474.3
|
|
|
100.0
|
%
|
|
(1)
|
Represents finished lubricants and chemicals 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,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
60,000
|
|
|
60,000
|
|
|
60,000
|
|
Total feedstock runs
(1) (2)
|
34,596
|
|
|
37,853
|
|
|
40,845
|
|
Total refinery production
(2) (3)
|
35,771
|
|
|
40,741
|
|
|
42,075
|
|
|
(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,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
25,000
|
|
|
25,000
|
|
|
25,000
|
|
Total feedstock runs
(1) (2)
|
24,684
|
|
|
24,511
|
|
|
20,930
|
|
Total refinery production
(2)
|
24,781
|
|
|
24,948
|
|
|
21,259
|
|
|
(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,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
21,000
|
|
|
21,000
|
|
|
21,000
|
|
Total feedstock runs
(1) (2)
|
16,058
|
|
|
16,463
|
|
|
17,374
|
|
Total refinery production
(2) (3)
|
15,896
|
|
|
15,782
|
|
|
16,736
|
|
(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,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
13,500
|
|
|
13,500
|
|
|
13,500
|
|
Total feedstock runs
(1) (2)
|
6,871
|
|
|
6,920
|
|
|
6,021
|
|
Total refinery production
(2) (3)
|
5,859
|
|
|
6,466
|
|
|
5,399
|
|
|
(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,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
10,000
|
|
|
10,000
|
|
|
10,000
|
|
Total feedstock runs
(1)
|
6,051
|
|
|
6,606
|
|
|
6,335
|
|
Total refinery production
(1) (2)
|
4,950
|
|
|
5,396
|
|
|
5,242
|
|
|
(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,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
|
(in bpd)
|
|||||||
Feedstock throughput capacity
(1)
|
11,300
|
|
|
11,300
|
|
|
11,300
|
|
Total feedstock runs
(2) (3)
|
5,684
|
|
|
5,896
|
|
|
6,483
|
|
Total production
(3)
|
5,749
|
|
|
5,932
|
|
|
6,522
|
|
|
(1)
|
Includes Karns City, Dickinson and certain 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, please read Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Contractual Obligations and Commitments.”
|
(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) and WTI
|
|
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
|
17%
|
|
10%
|
|
3%
|
|
7%
|
|
2%
|
|
61%
|
|
|
|
|
|
|
|
|
|
|
|
•
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
• 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, 2018
. 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), paints and coatings, charcoal lighter fluids 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
|
|
January 15, 2023
|
Princeton
|
|
International Union of Operating Engineers
|
|
October 31, 2020
|
Dickinson
|
|
International Union of Operating Engineers
|
|
December 12, 2021
|
Shreveport
|
|
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied-Industrial and Service Workers International Union
|
|
April 30, 2022
|
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, 2023
|
Great Falls
|
|
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy Allied-Industrial and Service Workers International Union
|
|
July 31, 2022
|
•
|
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;
|
•
|
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, foreclose on the collateral pledged pursuant to the terms of the revolving credit facility.
|
•
|
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.
|
•
|
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,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
3,497.5
|
|
|
$
|
3,763.8
|
|
|
$
|
3,474.3
|
|
|
$
|
3,930.3
|
|
|
$
|
5,422.6
|
|
Cost of sales
|
3,060.8
|
|
|
3,265.6
|
|
|
3,088.0
|
|
|
3,393.9
|
|
|
5,014.9
|
|
|||||
Gross profit
|
436.7
|
|
|
498.2
|
|
|
386.3
|
|
|
536.4
|
|
|
407.7
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling
|
58.2
|
|
|
65.7
|
|
|
69.8
|
|
|
71.8
|
|
|
80.6
|
|
|||||
General and administrative
|
122.5
|
|
|
138.7
|
|
|
105.8
|
|
|
125.9
|
|
|
94.2
|
|
|||||
Transportation
|
137.2
|
|
|
137.1
|
|
|
154.3
|
|
|
153.6
|
|
|
143.3
|
|
|||||
Taxes other than income taxes
|
18.1
|
|
|
24.1
|
|
|
19.3
|
|
|
17.1
|
|
|
13.0
|
|
|||||
Asset impairment
|
—
|
|
|
207.3
|
|
|
35.7
|
|
|
—
|
|
|
—
|
|
|||||
Gain on sale of business, net
|
(4.8
|
)
|
|
(236.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
(17.4
|
)
|
|
3.3
|
|
|
1.7
|
|
|
10.8
|
|
|
14.1
|
|
|||||
Operating income (loss)
|
122.9
|
|
|
158.0
|
|
|
(0.3
|
)
|
|
157.2
|
|
|
62.5
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(155.5
|
)
|
|
(183.1
|
)
|
|
(161.7
|
)
|
|
(104.9
|
)
|
|
(110.8
|
)
|
|||||
Debt extinguishment costs
|
(58.8
|
)
|
|
—
|
|
|
—
|
|
|
(46.6
|
)
|
|
(89.9
|
)
|
|||||
Gain (loss) on derivative instruments
|
33.8
|
|
|
(9.6
|
)
|
|
(4.1
|
)
|
|
(31.4
|
)
|
|
43.2
|
|
|||||
Loss from unconsolidated affiliates
|
(3.7
|
)
|
|
—
|
|
|
(18.3
|
)
|
|
(61.1
|
)
|
|
(3.2
|
)
|
|||||
Gain (loss) on sale of unconsolidated affiliates
|
0.2
|
|
|
—
|
|
|
(113.4
|
)
|
|
—
|
|
|
—
|
|
|||||
Other
|
10.8
|
|
|
3.3
|
|
|
1.2
|
|
|
1.6
|
|
|
1.4
|
|
|||||
Total other expense
|
(173.2
|
)
|
|
(189.4
|
)
|
|
(296.3
|
)
|
|
(242.4
|
)
|
|
(159.3
|
)
|
|||||
Net loss from continuing operations before income taxes
|
(50.3
|
)
|
|
(31.4
|
)
|
|
(296.6
|
)
|
|
(85.2
|
)
|
|
(96.8
|
)
|
|||||
Income tax expense (benefit) from continuing operations
|
0.7
|
|
|
(0.1
|
)
|
|
0.2
|
|
|
0.2
|
|
|
0.6
|
|
|||||
Net loss from continuing operations
|
(51.0
|
)
|
|
(31.3
|
)
|
|
(296.8
|
)
|
|
(85.4
|
)
|
|
(97.4
|
)
|
|||||
Net loss from discontinued operations, net of income taxes
|
(4.1
|
)
|
|
(72.5
|
)
|
|
(31.8
|
)
|
|
(54.0
|
)
|
|
(14.8
|
)
|
|||||
Net loss
|
$
|
(55.1
|
)
|
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
|
$
|
(139.4
|
)
|
|
$
|
(112.2
|
)
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(In millions, except unit, per unit and operating data)
|
||||||||||||||||||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
77,943,992
|
|
|
77,598,950
|
|
|
77,043,935
|
|
|
74,896,096
|
|
|
69,671,827
|
|
|||||
Limited partners’ interest basic and diluted net loss per unit:
|
|
|
|
|
|
|
|
|
|
||||||||||
From continuing operations
|
$
|
(0.64
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(3.77
|
)
|
|
$
|
(1.34
|
)
|
|
$
|
(1.59
|
)
|
From discontinued operations
|
(0.05
|
)
|
|
(0.91
|
)
|
|
(0.41
|
)
|
|
(0.71
|
)
|
|
(0.21
|
)
|
|||||
Limited partners’ interest
|
$
|
(0.69
|
)
|
|
$
|
(1.31
|
)
|
|
$
|
(4.18
|
)
|
|
$
|
(2.05
|
)
|
|
$
|
(1.80
|
)
|
Cash distributions declared per limited partner
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.685
|
|
|
$
|
2.74
|
|
|
$
|
2.74
|
|
Balance Sheet Data (at period end):
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment, net
|
$
|
1,098.1
|
|
|
$
|
1,159.2
|
|
|
$
|
1,632.4
|
|
|
$
|
1,665.0
|
|
|
$
|
1,407.2
|
|
Total assets
|
$
|
2,087.5
|
|
|
$
|
2,688.8
|
|
|
$
|
2,571.3
|
|
|
$
|
2,752.6
|
|
|
$
|
2,715.3
|
|
Accounts payable
|
$
|
200.6
|
|
|
$
|
282.3
|
|
|
$
|
275.9
|
|
|
$
|
300.0
|
|
|
$
|
360.4
|
|
Total long-term debt
|
$
|
1,604.5
|
|
|
$
|
1,992.3
|
|
|
$
|
1,997.2
|
|
|
$
|
1,773.4
|
|
|
$
|
1,678.8
|
|
Total partners’ capital
|
$
|
65.7
|
|
|
$
|
119.9
|
|
|
$
|
218.7
|
|
|
$
|
603.9
|
|
|
$
|
810.2
|
|
Cash Flow Data:
(5)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash flow provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
75.2
|
|
|
$
|
(26.5
|
)
|
|
$
|
4.1
|
|
|
$
|
376.4
|
|
|
$
|
226.8
|
|
Investing activities
|
$
|
8.3
|
|
|
$
|
453.4
|
|
|
$
|
(154.2
|
)
|
|
$
|
(389.0
|
)
|
|
$
|
(658.8
|
)
|
Financing activities
|
$
|
(442.1
|
)
|
|
$
|
83.2
|
|
|
$
|
148.7
|
|
|
$
|
9.7
|
|
|
$
|
319.4
|
|
Other Financial Data:
(5)
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA
|
$
|
219.2
|
|
|
$
|
246.7
|
|
|
$
|
(3.5
|
)
|
|
$
|
82.5
|
|
|
$
|
136.4
|
|
Adjusted EBITDA
|
$
|
263.9
|
|
|
$
|
317.2
|
|
|
$
|
158.2
|
|
|
$
|
257.7
|
|
|
$
|
305.9
|
|
Distributable Cash Flow
|
$
|
67.0
|
|
|
$
|
89.3
|
|
|
$
|
(5.7
|
)
|
|
$
|
161.9
|
|
|
$
|
146.3
|
|
Operating Data (bpd):
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Total sales volume
(2)
|
97,104
|
|
|
132,082
|
|
|
140,180
|
|
|
126,216
|
|
|
122,852
|
|
|||||
Total feedstock runs
(3)
|
94,137
|
|
|
128,624
|
|
|
134,163
|
|
|
123,051
|
|
|
117,427
|
|
|||||
Total facility production
(4)
|
95,298
|
|
|
131,561
|
|
|
134,929
|
|
|
122,795
|
|
|
114,146
|
|
|
(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 also 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)
|
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.
|
(4)
|
Total segment Adjusted EBITDA includes the non-cash impact of the following LCM inventory adjustments and losses related to the liquidation of LIFO inventory layers.
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(In millions)
|
||||||||||||||||||
LCM Impact
|
$
|
(30.6
|
)
|
|
$
|
30.6
|
|
|
$
|
38.4
|
|
|
$
|
(81.8
|
)
|
|
$
|
(74.1
|
)
|
LIFO Impact
|
$
|
(6.3
|
)
|
|
$
|
(3.7
|
)
|
|
$
|
(28.5
|
)
|
|
$
|
(24.3
|
)
|
|
$
|
(26.5
|
)
|
|
(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.
Impairment charges for 2016 include $34.8 million of goodwill impairment charges related to the specialty products and fuel products segments, $0.9 million of long-lived assets impairment charges related to the specialty products and fuel products segments, and a $0.2 million impairment charge related to one of our equity method investments.
|
(4)
|
Total segment Adjusted EBITDA includes the non-cash impact of the following LCM inventory adjustments and losses related to the liquidation of LIFO inventory layers.
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(In millions)
|
||||||||||||||||||
LCM Impact
|
$
|
(30.6
|
)
|
|
$
|
30.6
|
|
|
$
|
38.4
|
|
|
$
|
(81.8
|
)
|
|
$
|
(74.1
|
)
|
LIFO Impact
|
$
|
(6.3
|
)
|
|
$
|
(3.7
|
)
|
|
$
|
(28.5
|
)
|
|
$
|
(24.3
|
)
|
|
$
|
(26.5
|
)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(In millions)
|
||||||||||||||||||
LCM Impact
|
$
|
(30.6
|
)
|
|
$
|
30.6
|
|
|
$
|
38.4
|
|
|
$
|
(81.8
|
)
|
|
$
|
(74.1
|
)
|
LIFO Impact
|
$
|
(6.3
|
)
|
|
$
|
(3.7
|
)
|
|
$
|
(28.5
|
)
|
|
$
|
(24.3
|
)
|
|
$
|
(26.5
|
)
|
•
|
We continue to focus on improving operations. Our average feedstock runs were
94,137
barrels per day (“bpd”) in
2018
, compared to
128,624
bpd in
2017
. The decrease is primarily attributable to the divestiture of the Superior Refinery in November 2017 and decreased production due to maintenance activities in
2018
. We anticipate to see improvement in our utilization rates in
2019
as we continue to seek to minimize unplanned downtime at our facilities which negatively affected our current year earnings.
|
•
|
Refined fuel product margins widened in
2018
as compared to
2017
predominately driven by the increase in the Western Canadian Select (“WCS”) discount versus NYMEX WTI increasing to approximately
$27
per barrel below NYMEX WTI in comparison to $13 per barrel below NYMEX WTI in
2017
. Given the WCS discount to NYMEX WTI remained favorable throughout much of 2018, we increased our use of WCS crude oil and other heavy crude oils to capture the higher margins associated with refining heavier crude oils. In the fourth quarter of 2018, the Canadian heavy sour crude oil discounts began to shrink to more normal levels in comparison to the large discounts seen throughout much of 2018 caused by the oversupply of sour crude oil and pipeline constraints restricting access to markets. The price of domestically produced mid-continent crude is expected to continue to trade at a discount relative to internationally produced crude reflecting increased domestic production combined with transportation constraints in the United States’ which is especially true for certain crude oils such as Midland WTI. Processing heavy sour crude oil and Midland WTI oil in our refineries has resulted in delivering a lower overall cost of crude oil in
2018
.
|
•
|
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. The approximate
65%
decrease in the price of RINs in
2018
favorably affected our results of operations. It is not possible to predict what future volumes or costs may be, but given the volatile price of RINs, we continue to anticipate that RINs have the potential to remain a significant expense for our fuel products segment, assuming current market prices for RINs continue, inclusive of the favorable impact of any exemptions received from the EPA.
|
•
|
Although our specialty products results declined in comparison to the prior year primarily due to maintenance activities at our Princeton and Shreveport refineries and pricing weakness across the paraffinic base oil market, specialty product margins have remained relatively stable and are expected to remain stable in the near term. We continue to consider our
|
•
|
sales volumes;
|
•
|
production yields;
|
•
|
segment gross profit;
|
•
|
segment Adjusted EBITDA; and
|
•
|
selling, general and administrative expenses.
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
|
(In bpd)
|
|||||||
Total sales volume
(1)
|
97,104
|
|
|
132,082
|
|
|
140,180
|
|
Total feedstock runs
(2)
|
94,137
|
|
|
128,624
|
|
|
134,163
|
|
Total facility production:
(3)
|
|
|
|
|
|
|||
Specialty products:
|
|
|
|
|
|
|||
Lubricating oils
|
11,931
|
|
|
14,606
|
|
|
14,697
|
|
Solvents
|
7,649
|
|
|
7,761
|
|
|
7,427
|
|
Waxes
|
1,279
|
|
|
1,423
|
|
|
1,571
|
|
Packaged and synthetic specialty products
(4)
|
2,129
|
|
|
2,206
|
|
|
1,777
|
|
Other
|
2,113
|
|
|
1,811
|
|
|
1,850
|
|
Total specialty products
|
25,101
|
|
|
27,807
|
|
|
27,322
|
|
Fuel products:
|
|
|
|
|
|
|||
Gasoline
|
20,323
|
|
|
35,713
|
|
|
37,713
|
|
Diesel
|
27,367
|
|
|
33,277
|
|
|
34,808
|
|
Jet fuel
|
2,895
|
|
|
5,368
|
|
|
5,306
|
|
Asphalt, heavy fuel oils and other
|
19,612
|
|
|
29,396
|
|
|
29,780
|
|
Total fuel products
|
70,197
|
|
|
103,754
|
|
|
107,607
|
|
Total facility production
(3)
|
95,298
|
|
|
131,561
|
|
|
134,929
|
|
|
(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 also 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 finished lubricants and specialty chemicals products, including the products from the Royal Purple, Bel-Ray and Calumet Packaging facilities.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Sales
|
$
|
3,497.5
|
|
|
$
|
3,763.8
|
|
|
$
|
3,474.3
|
|
Cost of sales
|
3,060.8
|
|
|
3,265.6
|
|
|
3,088.0
|
|
|||
Gross profit
|
436.7
|
|
|
498.2
|
|
|
386.3
|
|
|||
Operating costs and expenses:
|
|
|
|
|
|
||||||
Selling
|
58.2
|
|
|
65.7
|
|
|
69.8
|
|
|||
General and administrative
|
122.5
|
|
|
138.7
|
|
|
105.8
|
|
|||
Transportation
|
137.2
|
|
|
137.1
|
|
|
154.3
|
|
|||
Taxes other than income taxes
|
18.1
|
|
|
24.1
|
|
|
19.3
|
|
|||
Asset impairment
|
—
|
|
|
207.3
|
|
|
35.7
|
|
|||
Gain on sale of business, net
|
(4.8
|
)
|
|
(236.0
|
)
|
|
—
|
|
|||
Other
|
(17.4
|
)
|
|
3.3
|
|
|
1.7
|
|
|||
Operating income (loss)
|
122.9
|
|
|
158.0
|
|
|
(0.3
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(155.5
|
)
|
|
(183.1
|
)
|
|
(161.7
|
)
|
|||
Debt extinguishment costs
|
(58.8
|
)
|
|
—
|
|
|
—
|
|
|||
Gain (loss) on derivative instruments
|
33.8
|
|
|
(9.6
|
)
|
|
(4.1
|
)
|
|||
Loss from unconsolidated affiliates
|
(3.7
|
)
|
|
—
|
|
|
(18.3
|
)
|
|||
Gain (loss) on sale of unconsolidated affiliates
|
0.2
|
|
|
—
|
|
|
(113.4
|
)
|
|||
Other
|
10.8
|
|
|
3.3
|
|
|
1.2
|
|
|||
Total other expense
|
(173.2
|
)
|
|
(189.4
|
)
|
|
(296.3
|
)
|
|||
Net loss from continuing operations before income taxes
|
(50.3
|
)
|
|
(31.4
|
)
|
|
(296.6
|
)
|
|||
Income tax expense (benefit) from continuing operations
|
0.7
|
|
|
(0.1
|
)
|
|
0.2
|
|
|||
Net loss from continuing operations
|
(51.0
|
)
|
|
(31.3
|
)
|
|
(296.8
|
)
|
|||
Net loss from discontinued operations, net of income taxes
|
(4.1
|
)
|
|
(72.5
|
)
|
|
(31.8
|
)
|
|||
Net loss
|
$
|
(55.1
|
)
|
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
EBITDA
|
$
|
219.2
|
|
|
$
|
246.7
|
|
|
$
|
(3.5
|
)
|
Adjusted EBITDA
|
$
|
263.9
|
|
|
$
|
317.2
|
|
|
$
|
158.2
|
|
Distributable Cash Flow
|
$
|
67.0
|
|
|
$
|
89.3
|
|
|
$
|
(5.7
|
)
|
|
Year Ended December 31,
|
|||||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
|
(In millions, except barrel and per barrel data)
|
|||||||||
Sales by segment:
|
|
|
|
|
|
|||||
Specialty products:
|
|
|
|
|
|
|||||
Lubricating oils
|
$
|
600.1
|
|
|
$
|
584.2
|
|
|
2.7
|
%
|
Solvents
|
331.9
|
|
|
274.4
|
|
|
21.0
|
%
|
||
Waxes
|
117.0
|
|
|
117.2
|
|
|
(0.2
|
)%
|
||
Packaged and synthetic specialty products
(1)
|
256.8
|
|
|
260.7
|
|
|
(1.5
|
)%
|
||
Other
(2)
|
76.6
|
|
|
63.9
|
|
|
19.9
|
%
|
||
Total specialty products
|
$
|
1,382.4
|
|
|
$
|
1,300.4
|
|
|
6.3
|
%
|
Total specialty products sales volume (in barrels)
|
8,742,000
|
|
|
9,407,000
|
|
|
(7.1
|
)%
|
||
Average specialty products sales price per barrel
|
$
|
158.13
|
|
|
$
|
138.24
|
|
|
14.4
|
%
|
|
|
|
|
|
|
|||||
Fuel products:
|
|
|
|
|
|
|||||
Gasoline
|
$
|
683.1
|
|
|
$
|
948.5
|
|
|
(28.0
|
)%
|
Diesel
|
910.0
|
|
|
877.9
|
|
|
3.7
|
%
|
||
Jet fuel
|
100.1
|
|
|
135.0
|
|
|
(25.9
|
)%
|
||
Asphalt, heavy fuel oils and other
(3)
|
421.9
|
|
|
502.0
|
|
|
(16.0
|
)%
|
||
Total fuel products
|
$
|
2,115.1
|
|
|
$
|
2,463.4
|
|
|
(14.1
|
)%
|
Total fuel products sales volume (in barrels)
|
26,701,000
|
|
|
38,803,000
|
|
|
(31.2
|
)%
|
||
Average fuel products sales price per barrel
|
$
|
79.21
|
|
|
$
|
63.48
|
|
|
24.8
|
%
|
|
|
|
|
|
|
|||||
Total sales
|
$
|
3,497.5
|
|
|
$
|
3,763.8
|
|
|
(7.1
|
)%
|
Total specialty and fuel products sales volume (in barrels)
|
35,443,000
|
|
|
48,210,000
|
|
|
(26.5
|
)%
|
|
(1)
|
Represents finished lubricants and chemicals 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
|
$
|
174.0
|
|
Volume
|
(92.0
|
)
|
|
Total specialty products segment sales increase
|
$
|
82.0
|
|
|
Dollar Change
|
||
|
(In millions)
|
||
Sales price
|
$
|
408.7
|
|
Divestiture impact
|
(669.1
|
)
|
|
Volume
|
(87.9
|
)
|
|
Total fuel products segment sales increase
|
$
|
(348.3
|
)
|
|
Year Ended December 31,
|
|||||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
|
(Dollars in millions, except per barrel data)
|
|||||||||
Gross profit by segment:
|
|
|
|
|
|
|||||
Specialty products:
|
|
|
|
|
|
|||||
Gross profit
|
$
|
291.1
|
|
|
$
|
319.2
|
|
|
(8.8
|
)%
|
Percentage of sales
|
21.1
|
%
|
|
24.5
|
%
|
|
|
|||
Specialty products gross profit per barrel
|
$
|
33.30
|
|
|
$
|
33.93
|
|
|
(1.9
|
)%
|
Fuel products:
|
|
|
|
|
|
|||||
Gross profit
|
$
|
145.6
|
|
|
$
|
179.0
|
|
|
(18.7
|
)%
|
Percentage of sales
|
6.9
|
%
|
|
7.3
|
%
|
|
|
|||
Fuel products gross profit per barrel
|
$
|
5.45
|
|
|
$
|
4.61
|
|
|
18.2
|
%
|
Total gross profit
|
$
|
436.7
|
|
|
$
|
498.2
|
|
|
(12.3
|
)%
|
Percentage of sales
|
12.5
|
%
|
|
13.2
|
%
|
|
|
|
Dollar Change
|
||
|
(In millions)
|
||
2017 reported gross profit
|
$
|
319.2
|
|
Cost of materials
|
(147.5
|
)
|
|
Volume
|
(37.1
|
)
|
|
LCM inventory adjustment
|
(14.3
|
)
|
|
Operating costs
|
(3.5
|
)
|
|
LIFO inventory layer adjustment
|
0.3
|
|
|
Sales price
|
174.0
|
|
|
2018 reported gross profit
|
$
|
291.1
|
|
|
Dollar Change
|
||
|
(In millions)
|
||
2017 reported gross profit
|
$
|
179.0
|
|
Cost of materials
|
(281.5
|
)
|
|
Divestiture impact
|
(110.0
|
)
|
|
LCM inventory adjustment
|
(40.3
|
)
|
|
Volume
|
(17.5
|
)
|
|
Operating costs
|
(8.8
|
)
|
|
LIFO inventory layer adjustment
|
(2.9
|
)
|
|
RINs
|
18.9
|
|
|
Sales price
|
408.7
|
|
|
2018 reported gross profit
|
$
|
145.6
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Realized gain (loss) on derivative instruments
|
$
|
3.6
|
|
|
$
|
(13.2
|
)
|
Unrealized gain on derivative instruments
|
30.2
|
|
|
3.6
|
|
||
Total derivative gain (loss) reflected in the consolidated statements of operations
|
$
|
33.8
|
|
|
$
|
(9.6
|
)
|
Total gain (loss) on commodity derivative settlements
|
$
|
3.6
|
|
|
$
|
(13.2
|
)
|
|
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 finished lubricants and chemicals 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, Superior, San Antonio and Great Falls refineries and crude oil sales from the Montana and San Antonio refinery 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,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
75.2
|
|
|
$
|
(26.5
|
)
|
|
$
|
4.1
|
|
Net cash provided by (used in) investing activities
|
8.3
|
|
|
453.4
|
|
|
(154.2
|
)
|
|||
Net cash provided by (used in) financing activities
|
(442.1
|
)
|
|
83.2
|
|
|
148.7
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
(358.6
|
)
|
|
$
|
510.1
|
|
|
$
|
(1.4
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Capital improvement expenditures
|
$
|
19.7
|
|
|
$
|
23.4
|
|
|
$
|
67.6
|
|
Replacement capital expenditures
|
16.9
|
|
|
30.5
|
|
|
20.0
|
|
|||
Environmental capital expenditures
|
7.5
|
|
|
11.5
|
|
|
9.3
|
|
|||
Turnaround capital expenditures
|
30.8
|
|
|
14.5
|
|
|
8.7
|
|
|||
Joint venture contributions, net
(1) (2)
|
—
|
|
|
—
|
|
|
16.7
|
|
|||
Total
|
$
|
74.9
|
|
|
$
|
79.9
|
|
|
$
|
122.3
|
|
|
(1)
|
2016 includes proceeds from sale and return of capital related to the Dakota Prairie Transaction.
|
(2)
|
2018 excludes approximately
$4.0 million
of incurred expenses related to our investment in Biosyn.
|
•
|
$600.0 million
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 revolving credit agreement) (“revolving credit facility”);
|
•
|
$900.0 million
of 6.50% senior notes due 2021 (“2021 Notes”);
|
•
|
$350.0 million
of 7.625% senior notes due 2022 (“2022 Notes”); and
|
•
|
$325.0 million
of 7.75% senior notes due 2023 (“2023 Notes”).
|
|
|
|
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 debt at contractual rates and maturities
(1)
|
$
|
431.8
|
|
|
$
|
119.4
|
|
|
$
|
207.8
|
|
|
$
|
64.8
|
|
|
$
|
39.8
|
|
Operating lease obligations
(2)
|
165.0
|
|
|
70.0
|
|
|
74.8
|
|
|
13.1
|
|
|
7.1
|
|
|||||
Letters of credit
(3)
|
35.1
|
|
|
35.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase commitments
(4)
|
408.6
|
|
|
261.4
|
|
|
42.1
|
|
|
42.0
|
|
|
63.1
|
|
|||||
Employment agreements
(5)
|
1.3
|
|
|
0.9
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|||||
Financing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Obligations under inventory financing agreements
|
106.5
|
|
|
106.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital lease obligations
|
42.4
|
|
|
2.4
|
|
|
1.9
|
|
|
2.5
|
|
|
35.6
|
|
|||||
Long-term debt obligations, excluding capital lease obligations
|
1,580.2
|
|
|
1.4
|
|
|
903.8
|
|
|
675.0
|
|
|
—
|
|
|||||
Total obligations
|
$
|
2,770.9
|
|
|
$
|
597.1
|
|
|
$
|
1,230.8
|
|
|
$
|
797.4
|
|
|
$
|
145.6
|
|
|
(1)
|
Interest on long-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
. As a result of the adoption ASU 2016-02 which is effective for fiscal years beginning after December 15, 2018, each of the Company’s operating leases will be recognized on the balance sheet as a right-of-use asset and lease liability. Based on our analysis to date, we currently estimate the adoption of ASU 2016-02 will result in recognition of additional net lease assets and lease liabilities of approximately
$145 million
to
$150 million
as of January 1, 2019.
|
(3)
|
Letters of credit primarily supporting crude oil and feedstock purchases.
|
(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.
|
•
|
The accounting estimate requires us to make assumptions about matters that are highly uncertain at the time the accounting estimate is made; and
|
•
|
We reasonably could have used different estimates in the current period, or changes in these estimates are reasonably likely to occur from period to period as new information becomes available, and a change in these estimates would have a material impact on our financial condition or results from operations.
|
•
|
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.
|
•
|
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, LLS, WCS, Mixed Sweet Blend (“MSW”) and ICE Brent (“Brent”).
|
|
Sales
|
|
Cost of Sales
|
||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions)
|
||||||||||||||
Specialty Products:
|
|
|
|
|
|
|
|
||||||||
$1.00 change in per barrel price of crude oil
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.7
|
|
|
$
|
9.4
|
|
$0.50 change in MMBtu (one million British Thermal Units) of natural gas
(2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6.6
|
|
Fuel Products:
|
|
|
|
|
|
|
|
||||||||
$1.00 change in per barrel price of crude oil
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20.1
|
|
|
$
|
28.1
|
|
$1.00 change in per barrel selling price of gasoline, diesel and jet fuel
(1)
|
$
|
20.1
|
|
|
$
|
28.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(1)
|
Based on our
2018
and
2017
sales volumes.
|
(2)
|
Based on our results for the years ended
December 31, 2018
and
2017
.
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
|
(In millions)
|
||||||||||||||
Financial Instrument:
|
|
|
|
|
|
|
|
||||||||
2021 Unsecured Notes
|
$
|
755.7
|
|
|
$
|
894.7
|
|
|
$
|
896.4
|
|
|
$
|
892.5
|
|
2022 Unsecured Notes
|
$
|
279.4
|
|
|
$
|
345.9
|
|
|
$
|
352.4
|
|
|
$
|
344.8
|
|
2023 Unsecured Notes
|
$
|
252.3
|
|
|
$
|
320.1
|
|
|
$
|
327.7
|
|
|
$
|
319.1
|
|
2021 Secured Notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
456.4
|
|
|
$
|
387.6
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions, except unit data)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
155.7
|
|
|
$
|
164.3
|
|
Restricted cash
|
—
|
|
|
350.0
|
|
||
Accounts receivable, net:
|
|
|
|
||||
Trade, less allowance for doubtful accounts of $1.5 million and $7.0 million, respectively
|
177.7
|
|
|
265.4
|
|
||
Other
|
20.3
|
|
|
88.7
|
|
||
|
198.0
|
|
|
354.1
|
|
||
Inventories
|
284.1
|
|
|
314.4
|
|
||
Derivative assets
|
18.3
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
13.9
|
|
|
8.7
|
|
||
Total current assets
|
670.0
|
|
|
1,191.5
|
|
||
Property, plant and equipment, net
|
1,098.1
|
|
|
1,159.2
|
|
||
Investment in unconsolidated affiliates
|
25.4
|
|
|
35.0
|
|
||
Goodwill
|
171.4
|
|
|
171.4
|
|
||
Other intangible assets, net
|
88.0
|
|
|
107.9
|
|
||
Other noncurrent assets, net
|
34.6
|
|
|
23.8
|
|
||
Total assets
|
$
|
2,087.5
|
|
|
$
|
2,688.8
|
|
LIABILITIES AND PARTNERS’ CAPITAL
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
200.6
|
|
|
$
|
282.3
|
|
Accrued interest payable
|
30.7
|
|
|
52.5
|
|
||
Accrued salaries, wages and benefits
|
25.7
|
|
|
35.9
|
|
||
Other taxes payable
|
15.2
|
|
|
16.1
|
|
||
Obligations under inventory financing agreements
|
105.3
|
|
|
103.1
|
|
||
Other current liabilities
|
33.8
|
|
|
73.7
|
|
||
Current portion of long-term debt
|
3.8
|
|
|
354.1
|
|
||
Derivative liabilities
|
—
|
|
|
6.0
|
|
||
Discontinued operations, current liabilities
|
—
|
|
|
2.0
|
|
||
Total current liabilities
|
415.1
|
|
|
925.7
|
|
||
Pension and postretirement benefit obligations
|
4.5
|
|
|
3.1
|
|
||
Other long-term liabilities
|
1.5
|
|
|
1.9
|
|
||
Long-term debt, less current portion
|
1,600.7
|
|
|
1,638.2
|
|
||
Total liabilities
|
2,021.8
|
|
|
2,568.9
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Partners’ capital:
|
|
|
|
||||
Limited partners’ interest (77,177,159 units and 76,788,801 units, issued and outstanding at December 31, 2018 and 2017, respectively)
|
61.6
|
|
|
113.3
|
|
||
General partners’ interest
|
12.8
|
|
|
13.8
|
|
||
Accumulated other comprehensive loss
|
(8.7
|
)
|
|
(7.2
|
)
|
||
Total partners’ capital
|
65.7
|
|
|
119.9
|
|
||
Total liabilities and partners’ capital
|
$
|
2,087.5
|
|
|
$
|
2,688.8
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions, except unit and per unit data)
|
||||||||||
Sales
|
$
|
3,497.5
|
|
|
$
|
3,763.8
|
|
|
$
|
3,474.3
|
|
Cost of sales
|
3,060.8
|
|
|
3,265.6
|
|
|
3,088.0
|
|
|||
Gross profit
|
436.7
|
|
|
498.2
|
|
|
386.3
|
|
|||
Operating costs and expenses:
|
|
|
|
|
|
||||||
Selling
|
58.2
|
|
|
65.7
|
|
|
69.8
|
|
|||
General and administrative
|
122.5
|
|
|
138.7
|
|
|
105.8
|
|
|||
Transportation
|
137.2
|
|
|
137.1
|
|
|
154.3
|
|
|||
Taxes other than income taxes
|
18.1
|
|
|
24.1
|
|
|
19.3
|
|
|||
Asset impairment
|
—
|
|
|
207.3
|
|
|
35.7
|
|
|||
Gain on sale of business, net
|
(4.8
|
)
|
|
(236.0
|
)
|
|
—
|
|
|||
Other
|
(17.4
|
)
|
|
3.3
|
|
|
1.7
|
|
|||
Operating income (loss)
|
122.9
|
|
|
158.0
|
|
|
(0.3
|
)
|
|||
|
|
|
|
|
|
||||||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(155.5
|
)
|
|
(183.1
|
)
|
|
(161.7
|
)
|
|||
Debt extinguishment costs
|
(58.8
|
)
|
|
—
|
|
|
—
|
|
|||
Gain (loss) on derivative instruments
|
33.8
|
|
|
(9.6
|
)
|
|
(4.1
|
)
|
|||
Loss from unconsolidated affiliates
|
(3.7
|
)
|
|
—
|
|
|
(18.3
|
)
|
|||
Gain (loss) on sale of unconsolidated affiliates
|
0.2
|
|
|
—
|
|
|
(113.4
|
)
|
|||
Other
|
10.8
|
|
|
3.3
|
|
|
1.2
|
|
|||
Total other expense
|
(173.2
|
)
|
|
(189.4
|
)
|
|
(296.3
|
)
|
|||
Net loss from continuing operations before income taxes
|
(50.3
|
)
|
|
(31.4
|
)
|
|
(296.6
|
)
|
|||
Income tax expense (benefit) from continuing operations
|
0.7
|
|
|
(0.1
|
)
|
|
0.2
|
|
|||
Net loss from continuing operations
|
(51.0
|
)
|
|
(31.3
|
)
|
|
(296.8
|
)
|
|||
Net loss from discontinued operations, net of income taxes
|
(4.1
|
)
|
|
(72.5
|
)
|
|
(31.8
|
)
|
|||
Net loss
|
$
|
(55.1
|
)
|
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
Allocation of net loss:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(55.1
|
)
|
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
Less:
|
|
|
|
|
|
||||||
General partners’ interest in net loss
|
(1.1
|
)
|
|
(2.1
|
)
|
|
(6.6
|
)
|
|||
Net loss available to limited partners
|
$
|
(54.0
|
)
|
|
$
|
(101.7
|
)
|
|
$
|
(322.0
|
)
|
Weighted average limited partner units outstanding:
|
|
|
|
|
|
||||||
Basic and diluted
|
77,943,992
|
|
|
77,598,950
|
|
|
77,043,935
|
|
|||
|
|
|
|
|
|
||||||
Limited partners’ interest basic and diluted net loss per unit:
|
|
|
|
|
|
||||||
From continuing operations
|
$
|
(0.64
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(3.77
|
)
|
From discontinued operations
|
(0.05
|
)
|
|
(0.91
|
)
|
|
(0.41
|
)
|
|||
Limited partners’ interest
|
$
|
(0.69
|
)
|
|
$
|
(1.31
|
)
|
|
$
|
(4.18
|
)
|
|
|
|
|
|
|
||||||
Cash distributions declared per limited partner unit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.685
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Net loss
|
$
|
(55.1
|
)
|
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Cash flow hedges:
|
|
|
|
|
|
||||||
Cash flow hedge gain reclassified to net loss
|
—
|
|
|
—
|
|
|
(6.4
|
)
|
|||
Defined benefit pension and retiree health benefit plans
|
(1.5
|
)
|
|
1.1
|
|
|
(0.3
|
)
|
|||
Total other comprehensive income (loss)
|
(1.5
|
)
|
|
1.1
|
|
|
(6.7
|
)
|
|||
Comprehensive loss attributable to partners’ capital
|
$
|
(56.6
|
)
|
|
$
|
(102.7
|
)
|
|
$
|
(335.3
|
)
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
|
Partners’ Capital
|
|
Total
|
||||||||||
|
|
General
Partner
|
|
Limited Partners
|
|||||||||||
|
|
|
|||||||||||||
|
(In millions)
|
||||||||||||||
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
|
|
Other comprehensive loss
|
$
|
(1.5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1.5
|
)
|
Net loss
|
$
|
—
|
|
|
$
|
(1.1
|
)
|
|
$
|
(54.0
|
)
|
|
$
|
(55.1
|
)
|
Settlement of tax withholdings on equity-based incentive compensation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1.1
|
)
|
|
$
|
(1.1
|
)
|
Amortization of vested phantom units
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.4
|
|
|
$
|
3.4
|
|
Contributions from Calumet GP, LLC
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Balance at December 31, 2018
|
$
|
(8.7
|
)
|
|
$
|
12.8
|
|
|
$
|
61.6
|
|
|
$
|
65.7
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(55.1
|
)
|
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Net loss from discontinued operations
|
4.1
|
|
|
72.5
|
|
|
31.8
|
|
|||
Depreciation and amortization
|
118.1
|
|
|
154.8
|
|
|
152.0
|
|
|||
Amortization of turnaround costs
|
12.8
|
|
|
24.3
|
|
|
33.2
|
|
|||
Non-cash interest expense
|
7.9
|
|
|
10.2
|
|
|
9.6
|
|
|||
Loss on debt extinguishment costs
|
58.8
|
|
|
—
|
|
|
—
|
|
|||
Unrealized gain on derivative instruments
|
(30.2
|
)
|
|
(3.6
|
)
|
|
(19.9
|
)
|
|||
Asset impairment
|
—
|
|
|
207.3
|
|
|
35.7
|
|
|||
Equity based compensation
|
(1.2
|
)
|
|
11.6
|
|
|
5.6
|
|
|||
Lower of cost or market inventory adjustment
|
30.6
|
|
|
(30.6
|
)
|
|
(38.4
|
)
|
|||
Loss from unconsolidated affiliates
|
3.7
|
|
|
—
|
|
|
18.3
|
|
|||
(Gain) loss on sale of unconsolidated affiliates
|
(0.2
|
)
|
|
—
|
|
|
113.4
|
|
|||
Gain on sale of business
|
(4.8
|
)
|
|
(236.0
|
)
|
|
—
|
|
|||
Other non-cash activities
|
6.8
|
|
|
10.2
|
|
|
5.4
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
109.8
|
|
|
(158.9
|
)
|
|
(38.9
|
)
|
|||
Inventories
|
(0.3
|
)
|
|
(8.5
|
)
|
|
41.5
|
|
|||
Prepaid expenses and other current assets
|
(4.5
|
)
|
|
(0.8
|
)
|
|
(4.2
|
)
|
|||
Derivative activity
|
(0.5
|
)
|
|
(0.5
|
)
|
|
(19.0
|
)
|
|||
Turnaround costs
|
(27.9
|
)
|
|
(14.5
|
)
|
|
(8.7
|
)
|
|||
Other assets
|
—
|
|
|
(0.5
|
)
|
|
(0.6
|
)
|
|||
Accounts payable
|
(78.2
|
)
|
|
70.6
|
|
|
18.4
|
|
|||
Accrued interest payable
|
(21.8
|
)
|
|
0.9
|
|
|
21.4
|
|
|||
Accrued salaries, wages and benefits
|
(5.6
|
)
|
|
18.0
|
|
|
(17.8
|
)
|
|||
Other taxes payable
|
(0.9
|
)
|
|
0.9
|
|
|
3.6
|
|
|||
Other liabilities
|
(45.4
|
)
|
|
(24.2
|
)
|
|
(16.6
|
)
|
|||
Pension and postretirement benefit obligations
|
(0.1
|
)
|
|
(2.7
|
)
|
|
(2.0
|
)
|
|||
Net cash provided by (used in) discontinued operating activities
|
(0.7
|
)
|
|
(23.2
|
)
|
|
8.9
|
|
|||
Net cash provided by (used in) operating activities
|
75.2
|
|
|
(26.5
|
)
|
|
4.1
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
(49.8
|
)
|
|
(70.0
|
)
|
|
(139.2
|
)
|
|||
Investment in unconsolidated affiliates
|
(3.8
|
)
|
|
—
|
|
|
(45.7
|
)
|
|||
Proceeds from sale of unconsolidated affiliates
|
9.9
|
|
|
—
|
|
|
29.0
|
|
|||
Proceeds from sale of property, plant and equipment
|
0.4
|
|
|
0.3
|
|
|
1.7
|
|
|||
Proceeds from sale of business, net
|
44.8
|
|
|
484.5
|
|
|
—
|
|
|||
Net cash provided by discontinued investing activities
|
6.8
|
|
|
38.6
|
|
|
—
|
|
|||
Net cash provided by (used in) investing activities
|
8.3
|
|
|
453.4
|
|
|
(154.2
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from borrowings — revolving credit facility
|
174.5
|
|
|
901.2
|
|
|
1,187.1
|
|
|||
Repayments of borrowings — revolving credit facility
|
(174.7
|
)
|
|
(911.2
|
)
|
|
(1,287.9
|
)
|
|||
Proceeds from borrowings — senior notes
|
—
|
|
|
—
|
|
|
393.1
|
|
|||
Repayments of borrowings — senior notes
|
(400.0
|
)
|
|
—
|
|
|
—
|
|
|||
Repayments of borrowings — related party note
|
—
|
|
|
—
|
|
|
(75.0
|
)
|
|||
Payments on capital lease obligations
|
(1.6
|
)
|
|
(2.5
|
)
|
|
(8.5
|
)
|
|||
Proceeds from inventory financing
|
1,135.3
|
|
|
671.6
|
|
|
—
|
|
|||
Payments on inventory financing
|
(1,128.3
|
)
|
|
(571.5
|
)
|
|
—
|
|
|||
Proceeds from other financing obligations
|
4.7
|
|
|
—
|
|
|
10.3
|
|
|||
Payments on other financing obligations
|
(2.5
|
)
|
|
(2.3
|
)
|
|
(1.8
|
)
|
|||
Payments on extinguishment of debt
|
(46.6
|
)
|
|
—
|
|
|
—
|
|
|||
Debt issuance costs
|
(3.0
|
)
|
|
(2.2
|
)
|
|
(11.4
|
)
|
|||
Contributions from Calumet GP, LLC
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|||
Distributions to partners
|
—
|
|
|
—
|
|
|
(57.4
|
)
|
|||
Net cash provided by (used in) financing activities
|
(442.1
|
)
|
|
83.2
|
|
|
148.7
|
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(358.6
|
)
|
|
510.1
|
|
|
(1.4
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
514.3
|
|
|
4.2
|
|
|
5.6
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
155.7
|
|
|
$
|
514.3
|
|
|
$
|
4.2
|
|
Cash and cash equivalents
|
$
|
155.7
|
|
|
$
|
164.3
|
|
|
$
|
4.2
|
|
Restricted cash
|
$
|
—
|
|
|
$
|
350.0
|
|
|
$
|
—
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Interest paid, net of capitalized interest
|
$
|
170.8
|
|
|
$
|
163.7
|
|
|
$
|
130.2
|
|
Income taxes paid
|
$
|
0.4
|
|
|
$
|
0.4
|
|
|
$
|
1.2
|
|
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
|
$
|
2.6
|
|
|
$
|
9.1
|
|
|
$
|
14.0
|
|
Non-cash capital lease
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.3
|
|
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning balance
|
$
|
7.0
|
|
|
$
|
0.9
|
|
|
$
|
0.9
|
|
Provision
|
1.2
|
|
|
6.1
|
|
|
0.3
|
|
|||
Write-offs, net
|
(6.7
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Ending balance
|
$
|
1.5
|
|
|
$
|
7.0
|
|
|
$
|
0.9
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Titled
Inventory |
|
Supply & Offtake
Agreements (1) |
|
Total
|
|
Titled
Inventory |
|
Supply & Offtake
Agreements (1) |
|
Total
|
||||||||||||
Raw materials
|
$
|
30.2
|
|
|
$
|
22.2
|
|
|
$
|
52.4
|
|
|
$
|
42.0
|
|
|
$
|
17.6
|
|
|
$
|
59.6
|
|
Work in process
|
40.7
|
|
|
19.2
|
|
|
59.9
|
|
|
34.4
|
|
|
23.7
|
|
|
58.1
|
|
||||||
Finished goods
|
127.9
|
|
|
43.9
|
|
|
171.8
|
|
|
139.4
|
|
|
57.3
|
|
|
196.7
|
|
||||||
|
$
|
198.8
|
|
|
$
|
85.3
|
|
|
$
|
284.1
|
|
|
$
|
215.8
|
|
|
$
|
98.6
|
|
|
$
|
314.4
|
|
|
(1)
|
Amounts represent LIFO value and do not necessarily represent the value at which the inventory was sold. Refer to
Note 9
for further information.
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Land
|
$
|
10.6
|
|
|
$
|
13.8
|
|
Buildings and improvements (10 to 40 years)
|
36.8
|
|
|
36.9
|
|
||
Machinery and equipment (10 to 20 years)
|
1,641.7
|
|
|
1,622.8
|
|
||
Furniture, fixtures and software (5 to 10 years)
|
48.3
|
|
|
61.5
|
|
||
Assets under capital leases (4 to 26 years)
(1)
|
21.9
|
|
|
18.2
|
|
||
Construction-in-progress
|
23.7
|
|
|
21.4
|
|
||
|
1,783.0
|
|
|
1,774.6
|
|
||
Less accumulated depreciation
|
(684.9
|
)
|
|
(615.4
|
)
|
||
|
$
|
1,098.1
|
|
|
$
|
1,159.2
|
|
|
(1)
|
Assets under capital leases primarily relate to machinery and equipment.
|
•
|
Package of Three
- The Company has elected that it will not reassess contracts that have expired or existed at the date of adoption for (1) leases under the new definition of a lease, (2) lease classification, and (3) whether previously capitalized initial direct costs would qualify for capitalization under ASC 842.
|
•
|
Portfolio Approach -
The Company has elected that it will determine the discount rate used to measure lease liabilities at the portfolio level. Specifically, the Company has decided to segregate its leases into different populations based on lease term.
|
•
|
Discount Rate -
The Company has elected to apply the discount rate at transition based on the remaining lease term and lease payments rather than the original lease term and lease payments.
|
•
|
Lease/ Non-Lease Components -
The Company has elected to not separate non-lease components given the assessed insignificance of the non-lease components in its lease contracts.
|
•
|
Definition of Minimum Rental Payments -
The Company has elected to include executory costs as part of the minimum rental payments for purposes of measuring the lease liability and right-of-use asset at transition.
|
•
|
Land Easement -
The Company has elected, based on materiality, not to assess whether any land easements are, or contain, leases in accordance with ASC 842 when transitioning to the standard.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Sales by major source
|
|
|
|
|
|
||||||
Standard specialty products
|
$
|
1,125.6
|
|
|
$
|
1,039.7
|
|
|
$
|
1,007.6
|
|
Packaged and synthetic specialty products
|
256.8
|
|
|
260.7
|
|
|
244.7
|
|
|||
Total specialty products
|
$
|
1,382.4
|
|
|
$
|
1,300.4
|
|
|
$
|
1,252.3
|
|
|
|
|
|
|
|
||||||
Fuel and fuel related products
|
$
|
1,885.7
|
|
|
$
|
2,115.7
|
|
|
$
|
1,904.6
|
|
Asphalt
|
229.4
|
|
|
347.7
|
|
|
317.4
|
|
|||
Total fuel products
|
$
|
2,115.1
|
|
|
$
|
2,463.4
|
|
|
$
|
2,222.0
|
|
|
|
|
|
|
|
||||||
Total sales
|
$
|
3,497.5
|
|
|
$
|
3,763.8
|
|
|
$
|
3,474.3
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Sales
|
|
$
|
—
|
|
|
$
|
228.6
|
|
|
$
|
125.1
|
|
Cost of sales
|
|
—
|
|
|
(168.1
|
)
|
|
(103.1
|
)
|
|||
Selling
|
|
—
|
|
|
(45.9
|
)
|
|
(40.9
|
)
|
|||
General and administrative
|
|
—
|
|
|
(4.5
|
)
|
|
(4.8
|
)
|
|||
Asset impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Loss on sale of business, net
|
|
(4.1
|
)
|
|
(62.6
|
)
|
|
—
|
|
|||
Other
|
|
—
|
|
|
(21.0
|
)
|
|
(16.0
|
)
|
|||
Net loss from discontinued operations before income taxes
|
|
$
|
(4.1
|
)
|
|
$
|
(73.5
|
)
|
|
$
|
(39.7
|
)
|
Income tax benefit
(1)
|
|
—
|
|
|
(1.0
|
)
|
|
(7.9
|
)
|
|||
Net loss from discontinued operations net of income taxes
|
|
$
|
(4.1
|
)
|
|
$
|
(72.5
|
)
|
|
$
|
(31.8
|
)
|
|
(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
|
||||
Sales
|
$
|
669.1
|
|
|
$
|
681.2
|
|
Gross profit
|
$
|
110.0
|
|
|
$
|
68.5
|
|
Net income before income taxes
|
$
|
99.3
|
|
|
$
|
54.5
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||||
|
Investment
|
|
Percent Ownership
|
|
Investment
|
|
Percent Ownership
|
||||||
Pacific New Investment Limited
|
$
|
—
|
|
|
—
|
%
|
|
$
|
9.6
|
|
|
23.8
|
%
|
Fluid Holding Corp.
|
25.4
|
|
|
10
|
%
|
|
25.4
|
|
|
10
|
%
|
||
Total
|
$
|
25.4
|
|
|
|
|
$
|
35.0
|
|
|
|
•
|
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, 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
|
|
Impairment
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Divestiture
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net balance as of December 31, 2018
|
$
|
171.4
|
|
|
$
|
—
|
|
|
$
|
171.4
|
|
|
(1)
|
Total accumulated goodwill impairment as of
December 31, 2018
and
2017
, is
$35.5 million
.
|
(2)
|
Divestiture relates to sale of the Superior Refinery. See
Note 5
for additional information.
|
|
Weighted Average Life (Years)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Gross Amount
|
|
Accumulated Amortization
|
|||||||||
Customer relationships
|
22
|
|
$
|
181.3
|
|
|
$
|
(120.1
|
)
|
|
$
|
181.3
|
|
|
$
|
(107.6
|
)
|
Tradenames
|
11
|
|
26.8
|
|
|
(16.4
|
)
|
|
26.8
|
|
|
(13.8
|
)
|
||||
Trade secrets
|
13
|
|
52.7
|
|
|
(39.7
|
)
|
|
52.7
|
|
|
(35.1
|
)
|
||||
Patents
|
12
|
|
1.6
|
|
|
(1.6
|
)
|
|
1.6
|
|
|
(1.6
|
)
|
||||
Royalty agreements
|
20
|
|
6.1
|
|
|
(2.7
|
)
|
|
6.2
|
|
|
(2.6
|
)
|
||||
|
19
|
|
$
|
268.5
|
|
|
$
|
(180.5
|
)
|
|
$
|
268.6
|
|
|
$
|
(160.7
|
)
|
Year
|
|
Amortization Amount
|
||
2019
|
|
$
|
16.8
|
|
2020
|
|
$
|
14.0
|
|
2021
|
|
$
|
11.5
|
|
2022
|
|
$
|
9.5
|
|
2023
|
|
$
|
7.7
|
|
Year
|
|
Operating
Leases
|
||
2019
|
|
$
|
70.0
|
|
2020
|
|
62.9
|
|
|
2021
|
|
11.9
|
|
|
2022
|
|
7.8
|
|
|
2023
|
|
5.3
|
|
|
Thereafter
|
|
7.1
|
|
|
Total
|
|
$
|
165.0
|
|
Year
|
|
Commitment
|
||
2019
|
|
$
|
261.4
|
|
2020
|
|
21.1
|
|
|
2021
|
|
21.0
|
|
|
2022
|
|
21.0
|
|
|
2023
|
|
21.0
|
|
|
Thereafter
|
|
63.1
|
|
|
Total
|
|
$
|
408.6
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Borrowings under amended and restated senior secured revolving credit agreement with third-party lenders, interest payments quarterly, borrowings due February 2023, weighted average interest rates of 6.0% and 8.4% at December 31, 2018 and 2017, respectively
|
$
|
—
|
|
|
$
|
0.2
|
|
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% for each year ended December 31, 2018 and 2017
|
—
|
|
|
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, 2018 and 2017
|
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, 2018 and 2017
(1)
|
351.6
|
|
|
352.1
|
|
||
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, 2018 and 2017
|
325.0
|
|
|
325.0
|
|
||
Other
|
5.2
|
|
|
6.6
|
|
||
Capital lease obligations, at various interest rates, interest and principal payments monthly through November 2034
|
42.4
|
|
|
44.0
|
|
||
Less unamortized debt issuance costs
(2)
|
(15.8
|
)
|
|
(25.9
|
)
|
||
Less unamortized discounts
|
(3.9
|
)
|
|
(9.7
|
)
|
||
Total long-term debt
|
1,604.5
|
|
|
1,992.3
|
|
||
Less current portion of long-term debt
(3)
|
3.8
|
|
|
354.1
|
|
||
|
$
|
1,600.7
|
|
|
$
|
1,638.2
|
|
|
(1)
|
The balance includes a fair value interest rate hedge adjustment, which increased the debt balance by
$1.6 million
and
$2.1 million
as of
December 31, 2018
and
2017
, 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
$23.5 million
and
$21.8 million
at
December 31, 2018
and
2017
, 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. On April 9, 2018, the Company redeemed all of the 2021 Secured Notes (defined below) using both the restricted cash from the sale of the Superior Refinery and other unrestricted cash.
|
Quarterly Average Availability Percentage
|
|
Base Loans
|
|
FILO Loans
|
||||
|
Prime Rate Margin
|
|
LIBOR Rate Margin
|
|
Prime Rate Margin
|
|
LIBOR Rate Margin
|
|
≥ 66%
|
|
0.50%
|
|
1.50%
|
|
1.50%
|
|
2.50%
|
≥ 33% and < 66%
|
|
0.75%
|
|
1.75%
|
|
1.75%
|
|
2.75%
|
< 33%
|
|
1.00%
|
|
2.00%
|
|
2.00%
|
|
3.00%
|
Year
|
|
Capital Leases
|
||
2019
|
|
$
|
8.4
|
|
2020
|
|
6.9
|
|
|
2021
|
|
6.9
|
|
|
2022
|
|
6.9
|
|
|
2023
|
|
6.9
|
|
|
Thereafter
|
|
75.3
|
|
|
Total minimum lease payments
|
|
111.3
|
|
|
Less amount representing interest
|
|
68.9
|
|
|
Capital lease obligations
|
|
42.4
|
|
|
Less obligations due within one year
|
|
2.4
|
|
|
Long-term capital lease obligations
|
|
$
|
40.0
|
|
Year
|
|
Maturity
|
||
2019
|
|
$
|
3.8
|
|
2020
|
|
2.4
|
|
|
2021
|
|
903.3
|
|
|
2022
|
|
351.2
|
|
|
2023
|
|
326.3
|
|
|
Thereafter
|
|
35.6
|
|
|
Total
|
|
$
|
1,622.6
|
|
•
|
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”), WTI Midland, Mixed Sweet Blend (“MSW”) and ICE Brent (“Brent”).
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Balance Sheet Location
|
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Midland crude oil basis swaps
|
Derivative assets
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fuel products segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Inventory financing obligation
|
Obligations under inventory financing agreements
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Crude oil swaps
|
Derivative assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
(0.3
|
)
|
|
—
|
|
||||||
WCS crude oil basis swaps
|
Derivative assets
|
|
16.5
|
|
|
(1.6
|
)
|
|
14.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
WCS crude oil percentage basis swaps
|
Derivative assets
|
|
—
|
|
|
(6.1
|
)
|
|
(6.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Midland crude oil basis swaps
|
Derivative assets
|
|
7.1
|
|
|
—
|
|
|
7.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Diesel crack spread swaps
|
Derivative assets
|
|
7.4
|
|
|
—
|
|
|
7.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Diesel percentage basis crack spread swaps
|
Derivative assets
|
|
—
|
|
|
(6.0
|
)
|
|
(6.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total derivative instruments
|
|
|
$
|
33.5
|
|
|
$
|
(13.7
|
)
|
|
$
|
19.8
|
|
|
$
|
0.3
|
|
|
$
|
(0.3
|
)
|
|
$
|
—
|
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Balance Sheet Location
|
|
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:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fuel products segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Inventory financing obligation
|
Obligations under inventory financing agreements
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4.4
|
)
|
|
$
|
—
|
|
|
$
|
(4.4
|
)
|
Crude oil swaps
|
Derivative liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||||
WCS crude oil basis swaps
|
Derivative liabilities
|
|
(1.6
|
)
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
WCS crude oil percentage basis swaps
|
Derivative liabilities
|
|
(6.1
|
)
|
|
6.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Gasoline swaps
|
Derivative liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
||||||
Gasoline crack spread swaps
|
Derivative liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
|
—
|
|
|
(1.8
|
)
|
||||||
Diesel swaps
|
Derivative liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
||||||
Diesel crack spread swaps
|
Derivative liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
|
—
|
|
|
(4.1
|
)
|
||||||
Diesel percentage basis crack spread swaps
|
Derivative liabilities
|
|
(6.0
|
)
|
|
6.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total derivative instruments
|
|
|
$
|
(13.7
|
)
|
|
$
|
13.7
|
|
|
$
|
—
|
|
|
$
|
(10.7
|
)
|
|
$
|
0.3
|
|
|
$
|
(10.4
|
)
|
|
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
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Specialty products segment:
|
|
|
|
|
|
|
|
||||||||
Natural gas swaps
|
$
|
—
|
|
|
$
|
(3.6
|
)
|
|
$
|
—
|
|
|
$
|
1.0
|
|
Midland crude oil basis swaps
|
0.9
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
||||
Fuel products segment:
|
|
|
|
|
|
|
|
||||||||
Inventory financing obligation
|
—
|
|
|
—
|
|
|
5.9
|
|
|
(4.4
|
)
|
||||
Crude oil swaps
|
—
|
|
|
(1.9
|
)
|
|
(0.3
|
)
|
|
(1.7
|
)
|
||||
WCS crude oil basis swaps
|
(1.8
|
)
|
|
3.2
|
|
|
14.9
|
|
|
7.1
|
|
||||
WCS crude oil percentage basis swaps
|
—
|
|
|
2.3
|
|
|
(6.1
|
)
|
|
0.5
|
|
||||
Midland crude oil basis swaps
|
6.0
|
|
|
—
|
|
|
7.1
|
|
|
—
|
|
||||
Gasoline swaps
|
—
|
|
|
(0.6
|
)
|
|
0.2
|
|
|
(0.2
|
)
|
||||
Gasoline crack spread swaps
|
(1.0
|
)
|
|
(6.2
|
)
|
|
1.8
|
|
|
3.0
|
|
||||
Diesel swaps
|
—
|
|
|
(0.5
|
)
|
|
0.2
|
|
|
(0.2
|
)
|
||||
Diesel crack spread swaps
|
(0.7
|
)
|
|
(5.0
|
)
|
|
11.5
|
|
|
(1.5
|
)
|
||||
Diesel percentage basis crack spread swaps
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
||||
2/1/1 crack spread swaps
|
0.2
|
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
3.6
|
|
|
$
|
(13.2
|
)
|
|
$
|
30.2
|
|
|
$
|
3.6
|
|
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
|
|
WCS Crude Oil Basis Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Average Differential to NYMEX WTI
($/Bbl) |
||||
First Quarter 2019
|
419,000
|
|
|
4,656
|
|
|
$
|
(28.10
|
)
|
Second Quarter 2019
|
455,000
|
|
|
5,000
|
|
|
$
|
(28.22
|
)
|
Third Quarter 2019
|
460,000
|
|
|
5,000
|
|
|
$
|
(28.22
|
)
|
Fourth Quarter 2019
|
460,000
|
|
|
5,000
|
|
|
$
|
(28.22
|
)
|
Total
|
1,794,000
|
|
|
|
|
|
|||
Average differential
|
|
|
|
|
$
|
(28.19
|
)
|
WCS Crude Oil Basis Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Differential to NYMEX WTI
($/Bbl) |
||||
First Quarter 2019
|
388,000
|
|
|
4,311
|
|
|
$
|
(19.84
|
)
|
Second Quarter 2019
|
455,000
|
|
|
5,000
|
|
|
$
|
(19.84
|
)
|
Third Quarter 2019
|
460,000
|
|
|
5,000
|
|
|
$
|
(19.84
|
)
|
Fourth Quarter 2019
|
460,000
|
|
|
5,000
|
|
|
$
|
(19.84
|
)
|
Total
|
1,763,000
|
|
|
|
|
|
|||
Average differential
|
|
|
|
|
$
|
(19.84
|
)
|
WCS Crude Oil Percentage Basis Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Fixed Percentage of NYMEX WTI (Average % of WTI/
B
bl)
|
|||
First Quarter 2019
|
450,000
|
|
|
5,000
|
|
|
66.32
|
%
|
Second Quarter 2019
|
455,000
|
|
|
5,000
|
|
|
66.32
|
%
|
Third Quarter 2019
|
460,000
|
|
|
5,000
|
|
|
66.32
|
%
|
Fourth Quarter 2019
|
460,000
|
|
|
5,000
|
|
|
66.32
|
%
|
Total
|
1,825,000
|
|
|
|
|
|
||
Average percentage
|
|
|
|
|
66.32
|
%
|
Midland Crude Oil Basis Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Average Differential to NYMEX WTI
($/Bbl) |
||||
First Quarter 2019
|
501,500
|
|
|
5,572
|
|
|
$
|
(12.79
|
)
|
Second Quarter 2019
|
773,500
|
|
|
8,500
|
|
|
$
|
(11.74
|
)
|
Total
|
1,275,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
(12.27
|
)
|
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 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 2019
|
450,000
|
|
|
5,000
|
|
|
$
|
25.58
|
|
Second Quarter 2019
|
455,000
|
|
|
5,000
|
|
|
$
|
25.58
|
|
Third Quarter 2019
|
460,000
|
|
|
5,000
|
|
|
$
|
25.58
|
|
Fourth Quarter 2019
|
460,000
|
|
|
5,000
|
|
|
$
|
25.58
|
|
Total
|
1,825,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
25.58
|
|
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 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
|
|
Diesel Percentage Basis Crack Spread Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Fixed Percentage of NYMEX WTI
(Average % of WTI/Bbl) |
|||
First Quarter 2019
|
450,000
|
|
|
5,000
|
|
|
138.38
|
%
|
Second Quarter 2019
|
455,000
|
|
|
5,000
|
|
|
138.38
|
%
|
Third Quarter 2019
|
460,000
|
|
|
5,000
|
|
|
138.38
|
%
|
Fourth Quarter 2019
|
460,000
|
|
|
5,000
|
|
|
138.38
|
%
|
Total
|
1,825,000
|
|
|
|
|
|
||
Average percentage
|
|
|
|
|
138.38
|
%
|
•
|
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, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Inventory financing obligation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
1.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
WCS crude oil basis swaps
|
—
|
|
|
—
|
|
|
14.9
|
|
|
14.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
WCS crude oil percentage basis swaps
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|
(6.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Midland crude oil basis swaps
|
—
|
|
|
—
|
|
|
8.1
|
|
|
8.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Diesel crack spread swaps
|
—
|
|
|
—
|
|
|
7.4
|
|
|
7.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Diesel percentage basis crack spread swaps
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|
(6.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total derivative assets
|
—
|
|
|
—
|
|
|
19.8
|
|
|
19.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Pension Plan investments
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||||||
Total recurring assets at fair value
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
19.8
|
|
|
$
|
19.9
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Inventory financing obligation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4.4
|
)
|
|
$
|
(4.4
|
)
|
Crude oil swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||||||
Gasoline crack spread swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
|
(1.8
|
)
|
||||||||
Gasoline swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||||||
Diesel swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||||||
Diesel crack spread swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
|
(4.1
|
)
|
||||||||
Total derivative liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.4
|
)
|
|
(10.4
|
)
|
||||||||
RINs Obligation
|
—
|
|
|
(15.8
|
)
|
|
—
|
|
|
(15.8
|
)
|
|
—
|
|
|
(59.1
|
)
|
|
—
|
|
|
(59.1
|
)
|
||||||||
Liability Awards
|
(2.7
|
)
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
|
(5.6
|
)
|
|
—
|
|
|
—
|
|
|
(5.6
|
)
|
||||||||
Total recurring liabilities at fair value
|
$
|
(2.7
|
)
|
|
$
|
(15.8
|
)
|
|
$
|
—
|
|
|
$
|
(18.5
|
)
|
|
$
|
(5.6
|
)
|
|
$
|
(59.1
|
)
|
|
$
|
(10.4
|
)
|
|
$
|
(75.1
|
)
|
|
For the Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Fair value at January 1,
|
$
|
(10.4
|
)
|
|
$
|
(14.0
|
)
|
Realized (gain) loss on derivative instruments
|
(3.6
|
)
|
|
13.2
|
|
||
Unrealized gain on derivative instruments
|
30.2
|
|
|
3.6
|
|
||
Settlements
|
3.6
|
|
|
(13.2
|
)
|
||
Fair value at December 31,
|
$
|
19.8
|
|
|
$
|
(10.4
|
)
|
Total gain included in net loss attributable to changes in unrealized gain relating to financial assets and liabilities held as of December 31,
|
$
|
30.2
|
|
|
$
|
3.6
|
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Level
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
Financial Instrument:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior notes
|
1
|
|
$
|
1,287.4
|
|
|
$
|
1,560.7
|
|
|
$
|
1,576.5
|
|
|
$
|
1,556.4
|
|
Senior notes
|
2
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
456.4
|
|
|
$
|
387.6
|
|
Revolving credit facility
|
3
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
Capital lease and other obligations
|
3
|
|
$
|
47.6
|
|
|
$
|
47.6
|
|
|
$
|
50.6
|
|
|
$
|
50.6
|
|
•
|
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
|
•
|
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, 2016
|
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
|
|
Granted
|
1,030,174
|
|
|
6.29
|
|
|
Vested
|
(1,175,363
|
)
|
|
6.97
|
|
|
Forfeited
|
(120,082
|
)
|
|
6.83
|
|
|
Nonvested at December 31, 2018
|
2,270,507
|
|
|
$
|
5.71
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
401(k) Plan matching contribution expense
|
$
|
5.4
|
|
|
$
|
5.7
|
|
|
$
|
6.0
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Change in projected benefit obligation:
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
38.3
|
|
|
$
|
60.9
|
|
Service cost
|
0.1
|
|
|
0.1
|
|
||
Interest cost
|
1.3
|
|
|
2.3
|
|
||
Benefit payments
|
(1.6
|
)
|
|
(2.5
|
)
|
||
Actuarial (gain) loss
|
(2.5
|
)
|
|
4.2
|
|
||
Reduction due to sale of the Superior Refinery
|
—
|
|
|
(26.6
|
)
|
||
Administrative expense
|
—
|
|
|
(0.1
|
)
|
||
Benefit obligation at end of year
|
$
|
35.6
|
|
|
$
|
38.3
|
|
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
35.4
|
|
|
$
|
49.8
|
|
Benefit payments
|
(1.6
|
)
|
|
(2.5
|
)
|
||
Actual return on assets
|
(2.5
|
)
|
|
7.4
|
|
||
Employer contribution
|
—
|
|
|
2.3
|
|
||
Administrative expense
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
Distribution to acquirer of the Superior Refinery
|
—
|
|
|
(21.5
|
)
|
||
Fair value of plan assets at end of year
|
$
|
31.3
|
|
|
$
|
35.4
|
|
Funded status — benefit obligation in excess of plan assets
|
$
|
(4.3
|
)
|
|
$
|
(2.9
|
)
|
Reconciliation of amounts recognized in the consolidated balance sheets:
|
|
|
|
||||
Accrued benefit obligation, long-term
|
$
|
(4.3
|
)
|
|
$
|
(2.9
|
)
|
Unrecognized net actuarial loss
|
7.5
|
|
|
6.0
|
|
||
Accumulated other comprehensive loss
|
7.5
|
|
|
6.0
|
|
||
Net amount recognized at end of year
|
$
|
3.2
|
|
|
$
|
3.1
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Accumulated and projected benefit obligation
|
$
|
35.6
|
|
|
$
|
38.3
|
|
Fair value of plan assets
|
$
|
31.3
|
|
|
$
|
35.4
|
|
|
Pension Plan
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Service cost
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Interest cost
|
1.3
|
|
|
2.3
|
|
|
2.5
|
|
|||
Expected return on assets
|
(1.7
|
)
|
|
(2.9
|
)
|
|
(3.2
|
)
|
|||
Amortization of net loss
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
|||
Settlement loss recognized
|
—
|
|
|
0.7
|
|
|
—
|
|
|||
Net periodic benefit cost (income)
|
$
|
(0.2
|
)
|
|
$
|
0.4
|
|
|
$
|
(0.5
|
)
|
|
Pension Plan
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss:
|
|
|
|
|
|
||||||
Net (gain) loss
|
$
|
1.6
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.4
|
|
Amounts recognized as a component of net periodic benefit cost:
|
|
|
|
|
|
||||||
Amortization of actual gains and losses
|
(0.1
|
)
|
|
(0.9
|
)
|
|
(0.1
|
)
|
|||
Total recognized in other comprehensive (income) loss
|
$
|
1.5
|
|
|
$
|
(1.1
|
)
|
|
$
|
0.3
|
|
|
Benefit Obligations
Assumptions
|
||||
|
2018
|
|
2017
|
||
Discount rate for Penreco Pension Plan
|
4.18
|
%
|
|
3.56
|
%
|
Discount rate for Great Falls Pension Plan
|
4.16
|
%
|
|
3.54
|
%
|
|
Net Periodic Benefit (Income) Cost
Assumptions
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Discount rate for Penreco Pension Plan
|
3.56
|
%
|
|
4.08
|
%
|
|
4.30
|
%
|
Discount rate for Superior Pension Plan
|
—
|
|
|
4.06
|
%
|
|
4.27
|
%
|
Discount rate for Great Falls Pension Plan
|
3.54
|
%
|
|
4.04
|
%
|
|
4.21
|
%
|
Expected return on plan assets for Penreco Pension Plan
(1)
|
5.00
|
%
|
|
6.35
|
%
|
|
6.75
|
%
|
Expected return on plan assets Superior Pension Plan
(1)
|
—
|
|
|
6.35
|
%
|
|
6.75
|
%
|
Expected return on plan assets for Great Falls Pension Plan
(1)
|
5.00
|
%
|
|
6.35
|
%
|
|
6.75
|
%
|
|
(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%
|
|
2018
|
|
2017
|
||
Cash and cash equivalents
|
—
|
%
|
|
1
|
%
|
Domestic equities
|
10
|
%
|
|
12
|
%
|
Foreign equities
|
11
|
%
|
|
12
|
%
|
Fixed income
|
79
|
%
|
|
75
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Fair Value of Pension Assets at December 31,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
|
Level 1
|
|
Total
|
|
Level 1
|
|
Total
|
||||||||
Cash and cash equivalents
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
Total plan assets subject to leveling
|
$
|
0.1
|
|
|
0.1
|
|
|
$
|
0.2
|
|
|
0.2
|
|
||
Plan assets measured at net asset value
|
|
|
|
|
|
|
|
||||||||
Domestic equities
|
|
|
3.2
|
|
|
|
|
4.3
|
|
||||||
Foreign equities
|
|
|
3.4
|
|
|
|
|
4.4
|
|
||||||
Fixed income
|
|
|
24.6
|
|
|
|
|
26.5
|
|
||||||
Total plan assets measured at net asset value
|
|
|
31.2
|
|
|
|
|
35.2
|
|
||||||
Total plan assets
|
|
|
$
|
31.3
|
|
|
|
|
|
$
|
35.4
|
|
|
Pension Benefits
|
||
2019
|
$
|
1.8
|
|
2020
|
1.8
|
|
|
2021
|
1.9
|
|
|
2022
|
2.0
|
|
|
2023
|
2.2
|
|
|
2024 to 2028
|
11.3
|
|
|
Total
|
$
|
21.0
|
|
|
|
Defined Benefit Pension And Retiree Health Benefit Plans
|
|
Foreign Currency Translation Adjustment
|
|
Total
|
||||||
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
|
)
|
Other comprehensive loss before reclassifications
|
|
(1.6
|
)
|
|
—
|
|
|
(1.6
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Net current period other comprehensive loss
|
|
(1.5
|
)
|
|
—
|
|
|
(1.5
|
)
|
|||
Accumulated other comprehensive loss at December 31, 2018
|
|
$
|
(7.5
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
(8.7
|
)
|
Components of Accumulated Other Comprehensive Loss
|
2018
|
|
2017
|
|
Location of Gain (Loss)
|
||||
Amortization of defined benefit pension benefit plans:
|
|
|
|
|
|
||||
Amortization or settlement recognition of net loss
|
$
|
(0.1
|
)
|
|
$
|
(0.9
|
)
|
|
(1)
|
|
$
|
(0.1
|
)
|
|
$
|
(0.9
|
)
|
|
Total
|
|
(1)
|
This accumulated other comprehensive loss component is included in the computation of net periodic pension cost. See
Note 15
for additional information.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
||||||||||
Numerator for basic and diluted earnings per limited partner unit:
|
|
|
|
|
|
||||||
Net loss from continuing operations
|
$
|
(51.0
|
)
|
|
$
|
(31.3
|
)
|
|
$
|
(296.8
|
)
|
Less:
|
|
|
|
|
|
||||||
General partner’s interest in net loss from continuing operations
|
(1.0
|
)
|
|
(0.6
|
)
|
|
(6.0
|
)
|
|||
Net loss from continuing operations available to limited partners
|
$
|
(50.0
|
)
|
|
$
|
(30.7
|
)
|
|
$
|
(290.8
|
)
|
Net loss from discontinued operations available to limited partners
|
(4.0
|
)
|
|
(71.0
|
)
|
|
(31.2
|
)
|
|||
Net loss available to limited partners
|
$
|
(54.0
|
)
|
|
$
|
(101.7
|
)
|
|
$
|
(322.0
|
)
|
|
|
|
|
|
|
||||||
Denominator for basic and diluted earnings per limited partner unit:
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding
(1)
|
77,943,992
|
|
|
77,598,950
|
|
|
77,043,935
|
|
|||
|
|
|
|
|
|
||||||
Limited partners’ interest basic and diluted net loss per unit:
|
|
|
|
|
|
||||||
From continuing operations
|
$
|
(0.64
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(3.77
|
)
|
From discontinued operations
|
(0.05
|
)
|
|
(0.91
|
)
|
|
(0.41
|
)
|
|||
Limited partners’ interest
|
$
|
(0.69
|
)
|
|
$
|
(1.31
|
)
|
|
$
|
(4.18
|
)
|
|
(1)
|
Total diluted weighted average limited partner units outstanding excludes
0.2 million
,
0.2 million
and
0.5 million
potentially dilutive phantom units which would be antidilutive for the years ended December 31,
2018
,
2017
and
2016
, 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, 2018
|
Specialty
Products
|
|
Fuel
Products
|
|
Combined
Segments
|
|
Eliminations
|
|
Consolidated
Total
|
||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
External customers
|
$
|
1,382.4
|
|
|
$
|
2,115.1
|
|
|
$
|
3,497.5
|
|
|
$
|
—
|
|
|
$
|
3,497.5
|
|
Intersegment sales
|
|
|
|
55.5
|
|
|
55.5
|
|
|
(55.5
|
)
|
|
—
|
|
|||||
Total sales
|
$
|
1,382.4
|
|
|
$
|
2,170.6
|
|
|
$
|
3,553.0
|
|
|
$
|
(55.5
|
)
|
|
$
|
3,497.5
|
|
Loss from unconsolidated affiliates
|
$
|
(3.7
|
)
|
|
$
|
—
|
|
|
$
|
(3.7
|
)
|
|
$
|
—
|
|
|
$
|
(3.7
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
|
$
|
160.2
|
|
|
$
|
103.7
|
|
|
$
|
263.9
|
|
|
$
|
—
|
|
|
$
|
263.9
|
|
Reconciling items to net loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
53.2
|
|
|
77.7
|
|
|
130.9
|
|
|
—
|
|
|
130.9
|
|
|||||
Gain on sale of business
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
||||||
Unrealized gain on derivatives
|
|
|
|
|
|
|
|
|
(30.2
|
)
|
|||||||||
Interest expense
|
|
|
|
|
|
|
|
|
155.5
|
|
|||||||||
Debt extinguishment costs
|
|
|
|
|
|
|
|
|
58.8
|
|
|||||||||
Equity based compensation and other items
|
|
|
|
|
|
|
|
|
4.0
|
|
|||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
0.7
|
|
|||||||||
Net loss from continuing operations
|
|
|
|
|
|
|
|
|
$
|
(51.0
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
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
|
|
|||||||||
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
|
|
|||||||||
Equity-based compensation and other items
|
|
|
|
|
|
|
|
|
5.0
|
|
|||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
0.2
|
|
|||||||||
Net loss from continuing operations
|
|
|
|
|
|
|
|
|
$
|
(296.8
|
)
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
Specialty products:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Lubricating oils
|
$
|
600.1
|
|
|
17.2
|
%
|
|
$
|
584.2
|
|
|
15.5
|
%
|
|
$
|
538.7
|
|
|
15.5
|
%
|
Solvents
|
331.9
|
|
|
9.5
|
%
|
|
274.4
|
|
|
7.3
|
%
|
|
237.7
|
|
|
6.8
|
%
|
|||
Waxes
|
117.0
|
|
|
3.3
|
%
|
|
117.2
|
|
|
3.1
|
%
|
|
128.7
|
|
|
3.7
|
%
|
|||
Packaged and synthetic specialty products
|
256.8
|
|
|
7.3
|
%
|
|
260.7
|
|
|
6.9
|
%
|
|
244.7
|
|
|
7.0
|
%
|
|||
Other
|
76.6
|
|
|
2.2
|
%
|
|
63.9
|
|
|
1.7
|
%
|
|
102.5
|
|
|
3.0
|
%
|
|||
Total
|
1,382.4
|
|
|
39.5
|
%
|
|
1,300.4
|
|
|
34.5
|
%
|
|
1,252.3
|
|
|
36.0
|
%
|
|||
Fuel products:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gasoline
|
683.1
|
|
|
19.5
|
%
|
|
948.5
|
|
|
25.2
|
%
|
|
844.3
|
|
|
24.3
|
%
|
|||
Diesel
|
910.0
|
|
|
26.0
|
%
|
|
877.9
|
|
|
23.4
|
%
|
|
808.4
|
|
|
23.3
|
%
|
|||
Jet fuel
|
100.1
|
|
|
2.9
|
%
|
|
135.0
|
|
|
3.6
|
%
|
|
117.5
|
|
|
3.4
|
%
|
|||
Asphalt, heavy fuel oils and other
|
421.9
|
|
|
12.1
|
%
|
|
502.0
|
|
|
13.3
|
%
|
|
451.8
|
|
|
13.0
|
%
|
|||
Total
|
2,115.1
|
|
|
60.5
|
%
|
|
2,463.4
|
|
|
65.5
|
%
|
|
2,222.0
|
|
|
64.0
|
%
|
|||
Consolidated sales
|
$
|
3,497.5
|
|
|
100.0
|
%
|
|
$
|
3,763.8
|
|
|
100.0
|
%
|
|
$
|
3,474.3
|
|
|
100.0
|
%
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
(1)
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
750.5
|
|
|
$
|
945.5
|
|
|
$
|
953.5
|
|
|
$
|
848.0
|
|
|
$
|
3,497.5
|
|
Gross profit
|
113.2
|
|
|
123.4
|
|
|
104.3
|
|
|
95.8
|
|
|
436.7
|
|
|||||
Net income (loss) from continuing operations
|
(2.9
|
)
|
|
(51.2
|
)
|
|
(16.0
|
)
|
|
19.1
|
|
|
(51.0
|
)
|
|||||
Net loss from discontinued operations
|
(1.9
|
)
|
|
(0.7
|
)
|
|
(0.5
|
)
|
|
(1.0
|
)
|
|
(4.1
|
)
|
|||||
Net income (loss)
|
(4.8
|
)
|
|
(51.9
|
)
|
|
(16.5
|
)
|
|
18.1
|
|
|
(55.1
|
)
|
|||||
Net income (loss) available to limited partners
|
(4.7
|
)
|
|
(50.9
|
)
|
|
(16.1
|
)
|
|
17.7
|
|
|
(54.0
|
)
|
|||||
Limited partners’ interest basic and diluted income (loss) per unit:
|
|
|
|
|
|
|
|
|
|
||||||||||
From continuing operations
|
$
|
(0.04
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
0.24
|
|
|
$
|
(0.64
|
)
|
From discontinued operations
|
(0.02
|
)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
(0.05
|
)
|
|||||
Limited partners’ interest
|
$
|
(0.06
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
0.23
|
|
|
$
|
(0.69
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic weighted average limited partner units outstanding
|
78,045,360
|
|
|
77,730,458
|
|
|
77,783,879
|
|
|
78,086,357
|
|
|
|
||||||
Diluted weighted average limited partner units outstanding
|
78,045,360
|
|
|
77,730,458
|
|
|
77,783,879
|
|
|
78,218,831
|
|
|
|
|
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 and diluted 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
|
|
|
|
|
(1)
|
The sum of the four quarters may not equal the total year due to rounding.
|
•
|
The ineffective design and implementation of effective controls with respect to the implementation of our enterprise resource planning (“ERP”) system consistent with our financial reporting requirements. Specifically, management did not design effective controls over the ERP implementation to ensure appropriate data conversion and data integrity, or provide sufficient end user training to our employees to ensure that our employees could effectively operate the system and carry out their responsibilities.
|
•
|
The untimely and insufficient operation of controls in the financial statement close process, including lack of timely account reconciliation, analysis and review related to all financial statement accounts.
|
•
|
User Access IT General Controls - We addressed segregation of duties conflicts in addition to developing controls so that appropriate system access rights are granted to system users and controls related to routine reviews of user system access. In addition, we implemented a new delegation of authority policy.
|
•
|
Program Change IT General Controls - We have developed and implemented a suite of controls over the initiation, testing and approval of program change activities.
|
•
|
Corporate Governance and Oversight - We hired a new Chief Accounting Officer in September 2017 who has significant SAP and ERP implementation experience to help enhance the capabilities of existing management to oversee the ongoing work being completed to help stabilize the ERP system and oversee the key enhancements needed to enable us to realize the value of the system. In addition, we re-organized the IT organization and are further enhancing the accounting organization to better equip the teams to manage the changes resulting from the ERP system.
|
•
|
Data Integrity and Data Conversion - We have implemented certain additional controls around data management and review controls.
|
•
|
End User Training - To reinforce the importance of our control environment across the Company, we are developing and providing additional training to employees to enhance their understanding of the new ERP system so that they can effectively operate the system and related controls. In addition, we are also developing, enhancing and implementing the remaining necessary trainings and standardized policies in other areas of accounting to communicate and reinforce individual accountability for performance of internal control responsibilities across the Company.
|
•
|
Financial Statement Close Process - We are reviewing, analyzing, and properly documenting our processes related to internal controls over financial reporting. We are designing and implementing effective review and approval controls. We are also designing and implementing effective review and approval controls over account reconciliations, journal entries, complex and non-routine transactions and management estimates across our remaining internal control processes. These controls will address the accuracy and completeness of the data used in the performance of the respective control.
|
Name
|
|
Age
|
|
Position with Calumet GP, LLC
|
Fred M. Fehsenfeld, Jr.
|
|
68
|
|
Chairman of the Board
|
F. William Grube
|
|
71
|
|
Executive Vice Chairman
|
Timothy Go
|
|
52
|
|
Chief Executive Officer
|
D. West Griffin
|
|
58
|
|
Executive Vice President — Chief Financial Officer
|
Bruce A. Fleming
|
|
62
|
|
Executive Vice President — Strategy & Growth
|
Christopher H. Bohnert
|
|
52
|
|
Chief Accounting Officer
|
William A. Anderson
|
|
50
|
|
Executive Vice President — Sales and Innovation
|
James S. Carter
|
|
70
|
|
Director
|
Robert E. Funk
|
|
73
|
|
Director
|
Stephen P. Mawer
|
|
54
|
|
Director
|
Daniel J. Sajkowski
|
|
59
|
|
Director
|
Amy M. Schumacher
|
|
48
|
|
Director
|
Daniel L. Sheets
|
|
61
|
|
Director
|
•
|
Timothy Go — Chief Executive Officer
|
•
|
F. William Grube — Executive Vice Chairman of the Board
|
•
|
D. West Griffin — Executive Vice President — Chief Financial Officer
|
•
|
Bruce A. Fleming — Executive Vice President — Strategy & Growth
|
•
|
William A. Anderson — Executive Vice President — Sales and Innovation
|
•
|
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.
|
|
2018 Base Salary
|
|
2017 Base Salary
|
||||
Timothy Go
(1)
|
$
|
500,000
|
|
|
$
|
500,000
|
|
F. William Grube
|
$
|
454,363
|
|
|
$
|
454,363
|
|
D. West Griffin
|
$
|
412,008
|
|
|
$
|
400,000
|
|
Bruce F. Fleming
|
$
|
398,475
|
|
|
$
|
385,000
|
|
William A. Anderson
|
$
|
333,259
|
|
|
$
|
325,130
|
|
|
Cash Incentive Bonus Award Opportunity as a
Percentage of Base Salary
(1)
|
||||
|
Minimum
|
|
Target
|
|
Stretch
|
Timothy Go, D. West Griffin, Bruce A. Fleming and William A. Anderson
|
50%
|
|
150%
|
|
250%
|
F. William Grube
|
25%
|
|
50%
|
|
100%
|
|
(1)
|
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
|
2018
(1)
|
|
NA
|
|
NA
|
|
NA
|
|
NA
|
|
$263.9
|
|
$200.0
|
|
$300.0
|
|
$400.0
|
2017
(2)
|
|
6.4
|
|
11.4
|
|
6.7
|
|
5.0
|
|
$317.2
|
|
$175.0
|
|
$300.0
|
|
$400.0
|
|
(1)
|
2018 targets were set based on expected Company performance after the divestitures of Anchor and Superior, which were divested during the 2017 fiscal year.
|
(2)
|
For the 2017 year, compensation targets were based on both the ratio of Net Indebtedness to Adjusted EBITDA and Adjusted EBITDA.
|
|
2018 Phantom Unit Award Opportunity
|
|
Phantom Units
To Be Granted
(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 on the third December 31st after the grant date. 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 2018
|
||||||||||||||||||||||||
Name and Principal Position
|
Year
|
|
Salary
|
|
Bonus
(3)
|
|
Unit Awards
(4)
|
|
Non-Equity Incentive Plan Compensation
(5)
|
|
All Other Compensation
(6)
|
|
Total
|
||||||||||||
Timothy Go
Chief Executive Officer
|
2018
|
|
$
|
537,450
|
|
|
$
|
—
|
|
|
$
|
375,000
|
|
|
$
|
237,300
|
|
|
$
|
55,770
|
|
|
$
|
1,205,520
|
|
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
|
2018
|
|
$
|
454,363
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
184,812
|
|
|
$
|
43,333
|
|
|
$
|
682,508
|
|
2017
|
|
$
|
454,363
|
|
|
$
|
—
|
|
|
$
|
57,780
|
|
|
$
|
227,182
|
|
|
$
|
14,136
|
|
|
$
|
753,461
|
|
|
2016
|
|
$
|
454,363
|
|
|
$
|
—
|
|
|
$
|
19,881
|
|
|
$
|
—
|
|
|
$
|
20,200
|
|
|
$
|
494,444
|
|
|
D. West Griffin
(1)
Executive Vice President - Chief Financial Officer
|
2018
|
|
$
|
412,008
|
|
|
$
|
—
|
|
|
$
|
309,006
|
|
|
$
|
232,785
|
|
|
$
|
178,441
|
|
|
$
|
1,132,240
|
|
2017
|
|
$
|
394,110
|
|
|
$
|
—
|
|
|
$
|
2,218,750
|
|
|
$
|
300,000
|
|
|
$
|
258,681
|
|
|
$
|
3,171,541
|
|
|
Bruce A. Fleming
(2)
Executive Vice President - Strategy & Growth
|
2018
|
|
$
|
398,475
|
|
|
$
|
—
|
|
|
$
|
298,856
|
|
|
$
|
225,000
|
|
|
$
|
14,635
|
|
|
$
|
936,966
|
|
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
(7)
Executive Vice President - Sales
|
2018
|
|
$
|
333,259
|
|
|
$
|
—
|
|
|
$
|
249,944
|
|
|
$
|
47,073
|
|
|
$
|
15,970
|
|
|
$
|
646,246
|
|
2017
|
|
$
|
325,130
|
|
|
$
|
—
|
|
|
$
|
896,563
|
|
|
$
|
225,000
|
|
|
$
|
14,518
|
|
|
$
|
1,461,211
|
|
|
2016
|
|
$
|
325,130
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,416
|
|
|
$
|
346,546
|
|
|
(1)
|
Mr. Griffin was appointed executive vice president, chief financial officer effective January 5, 2017.
|
(2)
|
Mr. Fleming’s employment with us commenced March 21, 2016.
|
(3)
|
Mr. Go received a signing bonus of $250,000 per his employment agreement.
|
(4)
|
The amounts include the aggregate grant date fair value of (i) with respect to the 2016 year, unit awards for Mr. Fleming related 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, (ii) with respect to the 2017 year, 143,990 phantom unit awards were granted to Mr. Go during the 2017 fiscal year related to a correction that was needed in the number of phantom units granted to Mr. Go in 2015 and 2016 (described further below), (iii) with respect to the 2017 year, 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, (iv) with respect to the 2016 and 2017 years, phantom units to reward Mr. Grube for services provided during the fiscal year and the number of which is determined based on a performance goal applicable to the year and (v) with respect to the 2017 and 2018 years, phantom unit awards made in connection with each applicable executive officer’s requirement to defer 50% of their cash incentive award under the Cash Incentive Plan into our Deferred Compensation Plan. The 2018 phantom units relating to the Cash Incentive Plan are included at “probable” values, which were target amounts on the grant date in 2018. Maximum values for Messrs. Go, Griffin, Fleming and Anderson were $625,000, $515,010, $498,094 and $416,574, respectively. Mr. Grube will be awarded 10,800 units to reward him for services provided during the 2018 fiscal year, but due to the fact that they will not be granted until 2019, there was not an accounting value associated with those awards during 2018. In the event Mr. Grube is a named executive officer for 2019, the awards will be disclosed in the Summary Compensation Table for 2019 rather than 2018. The amounts reflect
|
(5)
|
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.
|
(6)
|
The following table provides the aggregate “All Other Compensation” information for each of the named executive officers,
|
|
Timothy Go
|
|
F. William Grube
|
|
D. West Griffin
|
|
Bruce A. Fleming
|
|
William A. Anderson
|
||||||||||
401(k) Plan Matching Contributions
|
$
|
13,250
|
|
|
$
|
13,250
|
|
|
$
|
13,250
|
|
|
$
|
13,250
|
|
|
$
|
13,250
|
|
Commuting and Living Expenses
(1)
|
—
|
|
|
—
|
|
|
161,885
|
|
|
—
|
|
|
—
|
|
|||||
Vehicle
|
38,908
|
|
|
27,420
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-Term Disability Insurance
|
1,872
|
|
|
1,872
|
|
|
1,872
|
|
|
—
|
|
|
1,560
|
|
|||||
Term Life Insurance
|
1,740
|
|
|
791
|
|
|
1,434
|
|
|
1,385
|
|
|
1,160
|
|
|||||
Total
|
$
|
55,770
|
|
|
$
|
43,333
|
|
|
$
|
178,441
|
|
|
$
|
14,635
|
|
|
$
|
15,970
|
|
|
(1)
|
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 $61,885.
|
|
(1)
|
With respect to Mr. Grube, estimated possible payouts under non-equity incentive plan awards represent the ranges of potential cash incentive awards which could have been earned under our Cash Incentive Plan related to fiscal year
2018
. With respect to Messrs. Go, Griffin, Fleming and Anderson, estimated possible payouts under non-equity incentive plan awards represent 50% of the ranges of potential cash incentive awards which could have been earned under our Cash Incentive Plan related to fiscal year
2018
. For the 2018 year, the 50% non-cash portion of the Cash Incentive Plan award is required to be deferred into the Deferred Compensation Plan. For a description of these plans and available awards please read “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table —
|
(2)
|
With respect to Messrs. Go, Griffin, Fleming and Anderson, amounts reported in these columns represent the 50% of the ranges of potential cash incentive awards which could have been earned under our Cash Incentive Plan related to fiscal year
2018
. For the 2018 year, 50% of any Cash Incentive Plan award is required to be deferred into the Deferred Compensation Plan as phantom units. Because the awards were always designed to be paid out in equity, they were accounted for as equity awards internally and had a grant date fair value pursuant to FASB ASC Topic 718. However, the incentive value presented to the applicable named executive officers was structured in the form of a cash value which is presented in the columns here. The number of phantom units to be granted will be determined by dividing the cash value earned under the Cash Incentive Plan by the value of our common units on the date that the cash portion of the Cash Incentive Plan is paid out. For the cash amount actually payable in the first quarter of 2019, see the Non-Equity Incentive Plan Compensation section of the Summary Compensation Table. The equity value to be paid to the applicable named executive officers, is equivalent to the amount in the Non-Equity Incentive Plan Compensation section of the Summary Compensation Table. For a description of these plans and available awards, please read “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table — Description of Cash Incentive Plan” and “Compensation Discussion and Analysis — Elements of Executive Compensation — Executive Deferred Compensation Plan.”
|
Name
|
Percentage of
Total
Compensation
|
Timothy Go
|
45%
|
F. William Grube
|
67%
|
D. West Griffin
|
36%
|
Bruce A. Fleming
|
43%
|
William A. Anderson
|
52%
|
|
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
(#)
|
|
Equity Incentive Plan Awards: Market Value of Units that Have Not Vested
($) (2)
|
|
||||||
Timothy Go
|
39,063
|
|
|
$
|
86,329
|
|
|
575,000
(1)
|
|
|
$
|
1,270,750
|
|
|
|
|
|
|
|
(3)
|
|
|
$
|
375,000
|
|
(3)
|
|||
F. William Grube
|
10,800
|
|
|
$
|
23,868
|
|
|
—
|
|
|
$
|
—
|
|
|
D. West Griffin
|
—
|
|
|
$
|
—
|
|
|
287,500
(1)
|
|
|
$
|
635,375
|
|
|
|
|
|
|
|
(3)
|
|
|
$
|
309,006
|
|
(3)
|
|||
Bruce A. Fleming
|
35,759
|
|
|
$
|
79,027
|
|
|
143,750
(1)
|
|
|
$
|
317,688
|
|
|
|
|
|
|
|
(3)
|
|
|
$
|
298,856
|
|
(3)
|
|||
William A. Anderson
|
—
|
|
|
$
|
—
|
|
|
100,625
(1)
|
|
|
$
|
222,381
|
|
|
|
|
|
|
|
(3)
|
|
|
$
|
249,944
|
|
(3)
|
|
(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 |
December 31, 2019
|
|
39,063
|
|
—
|
|
—
|
|
35,759
|
|
—
|
December 31, 2020
|
|
—
|
|
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
|
|
|
614,063
|
|
10,800
|
|
287,500
|
|
179,509
|
|
100,625
|
|
(2)
|
Market value of phantom units reported in these columns is calculated by multiplying the closing market price of
$2.21
of our common units at
December 31, 2018
by the number of units outstanding.
|
|
Unit Awards
|
|||||
Name
|
Number of Units
Vested
|
|
Value Realized
on Vesting
(1)
|
|||
Timothy Go
|
304,241
|
|
|
$
|
2,000,940
|
|
F. William Grube
|
5,400
|
|
|
$
|
11,934
|
|
D. West Griffin
|
138,961
|
|
|
$
|
1,027,208
|
|
Bruce A. Fleming
|
132,010
|
|
|
$
|
793,405
|
|
William A. Anderson
|
67,821
|
|
|
$
|
484,364
|
|
|
(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.
|
|
Executive Contributions in Nonqualified Deferred Compensation Table for 2018
|
||||||||||||||||||
Name
|
Executive
Contributions
in 2018
(1)
|
|
Company
Contributions
in 2018
(2)
|
|
Aggregate
Earnings
in 2018
(3)
|
|
Aggregate Withdrawals/ Distributions in 2018
|
|
Aggregate
Balance at End
of 2018
(4)
|
||||||||||
Timothy Go
|
$
|
125,568
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
125,568
|
|
F. William Grube
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
79,978
|
|
D. West Griffin
|
$
|
86,104
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86,104
|
|
Bruce A. Fleming
|
$
|
102,213
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
102,213
|
|
William A. Anderson
|
$
|
64,578
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
64,578
|
|
|
(1)
|
Executive contributions in
2018
represent phantom units granted to certain of our named executive officers based on the requirement to defer 50% of their cash incentive award under the Cash Incentive Plan related to the 2017 fiscal year into the Deferred Compensation Plan. All amounts reflected in this column were also reported as compensation for the year 2017 in the Summary Compensation Table under the heading “Unit Awards.”
|
(2)
|
No company contributions were made with respect to the
2018
year. Our contributions would have represented discretionary matching contributions made in the form of phantom units granted to our named executive officers.
|
(3)
|
Aggregate earnings in
2018
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
2018
, and would have been included as compensation in
2018
under “Unit Awards” in the Summary Compensation Table.
|
(4)
|
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 units attributable to aggregate earnings accumulated during the
2018
year, the dollar amount of each participant’s account as of
December 31, 2018
, 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 31, 2018
(the last trading day of the fiscal year), which was
$2.21
. The phantom units associated with each executive’s account as of
December 31, 2018
, were as follows: Mr. Go,
56,818
; Mr. Grube, 36,189; Mr. Griffin,
38,961
; Mr. Fleming,
46,250
and Mr. Anderson
29,221
. With respect to Messrs. Go, Griffin, Fleming and Anderson, the 2018 executive contribution is related to the phantom units deferred with respect to the 2017 annual incentive bonuses, as bonus amounts are not converted to units until the date upon which the cash payment is made, during the first quarter of the year following the year to which the bonus relates. Phantom units that relate to the 2018 incentive award but which will not be converted until the first quarter of 2019 will not be reflected in this table until the 2019 contributions are reported. Subject to the executive’s continued employment with us, these phantom units will become vested over a four year period (except for phantom units associated with executive contributions, which are fully vested at the time of cash incentive deferral), but such vesting applies to the number of phantom units credited to the participant’s account, and not the value of the account at any given time. The value of the executive’s accounts will fluctuate due to the fact that the value of their phantom units will track the value of our common units. Also, please keep in mind that the executive’s accounts may not currently be fully vested; subject to the forfeiture provisions described below, these amounts do not reflect the payout amount that an executive would receive if he voluntarily left our service prior to vesting. The amounts in this column also include amounts that were previously reported as compensation in the Summary Compensation Table during previous years as follows: (a) for 2009, Mr. Grube, $113,348 (b) for 2010, Mr. Grube, $115,373 and (c) for 2011, Mr. Grube, $160,800.
|
•
|
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 negligent; (iii) Mr. Go exhibits willful misconduct; (iv) Mr. Go is materially insubordinate or fails to follow the lawful instructions or directions from the board of directors or its designee, if such failure is not cured; if curable, by Mr. Go after he has been given ten (10) days written notice of such failure; (v) any material breach of the employment agreement by Mr. Go occurs, including but not limited to, a breach of the restrictive covenants set forth in Section 10 of the agreement, if such breach is not cured, if curable, by Mr. Go after he has been given ten (10) days written notice of such breach; (vi) any acts of dishonesty are committed by Mr. Go, resulting or intending to result in personal gain or enrichment at the expense of the Company, its subsidiaries or affiliates; or (vii) Mr. Go fails to comply with a material policy of the Company, its subsidiaries or affiliates, if such failure is not cured, if curable, by Mr. Go after he has been given ten (10) days written notice of such failure.
|
•
|
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
|
•
|
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)
|
|
$
|
900,000
|
|
|
$
|
—
|
|
|
$
|
1,800,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Compensation Incentive Awards
(2)
|
|
355,950
|
|
|
—
|
|
|
711,900
|
|
|
237,300
|
|
|
—
|
|
||||||
Long-Term Incentive Plan
(3)
|
|
1,381,529
|
|
|
939,250
|
|
|
1,737,479
|
|
|
1,262,879
|
|
|
1,262,879
|
|
||||||
Deferred Compensation Plan
(4)
|
|
—
|
|
|
—
|
|
|
125,568
|
|
|
125,568
|
|
|
125,568
|
|
||||||
Post-Employment Health Care
(5)
|
|
36,356
|
|
|
—
|
|
|
54,534
|
|
|
—
|
|
|
—
|
|
||||||
Outplacement Assistance
(6)
|
|
50,000
|
|
|
—
|
|
|
50,000
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
2,723,835
|
|
|
$
|
939,250
|
|
|
$
|
4,479,481
|
|
|
$
|
1,625,747
|
|
|
$
|
1,388,447
|
|
|
F. William Grube
|
Base Salary
(1)
|
|
$
|
1,363,089
|
|
|
$
|
—
|
|
|
$
|
1,363,089
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Compensation Incentive Awards
(2)
|
|
184,812
|
|
|
184,812
|
|
|
184,812
|
|
|
184,812
|
|
|
—
|
|
||||||
Long-Term Incentive Plan
(3)
|
|
23,868
|
|
|
—
|
|
|
23,868
|
|
|
23,868
|
|
|
23,868
|
|
||||||
Deferred Compensation Plan
(4)
|
|
—
|
|
|
—
|
|
|
79,978
|
|
|
79,978
|
|
|
79,978
|
|
||||||
Total
|
|
$
|
1,571,769
|
|
|
$
|
184,812
|
|
|
$
|
1,651,747
|
|
|
$
|
288,658
|
|
|
$
|
103,846
|
|
|
D. West Griffin
|
Long-Term Incentive Plan
(3)
|
|
$
|
469,625
|
|
|
$
|
469,625
|
|
|
$
|
469,625
|
|
|
$
|
469,625
|
|
|
$
|
469,625
|
|
Deferred Compensation Plan
(4)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86,104
|
|
|
$
|
86,104
|
|
|
$
|
86,104
|
|
|
Total
|
|
$
|
469,625
|
|
|
$
|
469,625
|
|
|
$
|
555,729
|
|
|
$
|
555,729
|
|
|
$
|
555,729
|
|
|
Bruce A. Fleming
|
Long-Term Incentive Plan
(3)
|
|
$
|
313,840
|
|
|
$
|
234,813
|
|
|
$
|
313,840
|
|
|
$
|
313,840
|
|
|
$
|
313,840
|
|
Deferred Compensation Plan
(4)
|
|
—
|
|
|
—
|
|
|
102,213
|
|
|
102,213
|
|
|
102,213
|
|
||||||
Total
|
|
$
|
313,840
|
|
|
$
|
234,813
|
|
|
$
|
416,053
|
|
|
$
|
416,053
|
|
|
$
|
416,053
|
|
|
William A. Anderson
|
Long-Term Incentive Plan
(3)
|
|
$
|
125,694
|
|
|
$
|
125,694
|
|
|
$
|
125,694
|
|
|
$
|
125,694
|
|
|
$
|
125,694
|
|
Deferred Compensation Plan
(4)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
64,578
|
|
|
$
|
64,578
|
|
|
$
|
64,578
|
|
|
Total
|
|
$
|
125,694
|
|
|
$
|
125,694
|
|
|
$
|
190,272
|
|
|
$
|
190,272
|
|
|
$
|
190,272
|
|
|
(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 for a qualifying termination whether or not in connection with a Change in Control.
|
(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 pro rata portion of any compensation incentive awards for the bonus year in which the termination occurs. For termination without good reason by executive or by us with cause, Mr. Go will not be entitled to any pro rata portion of incentive compensation awards, although Mr. Grube’s pro-rata bonus is considered to be part of the accrued obligations that he would receive upon a termination for any reason. Assuming a termination on December 31, 2018, amounts have been calculated assuming that the entire 2018 bonus award would be payable for the 2018 year. Mr. Go is also entitled to receive the Transaction Bonus, as described further above, in the event of certain transactions. Solely for the purposes of this table, we have assumed the Transaction Bonus amount would be equal to $0 as no such transaction has taken place as of December 31, 2018 and the amount cannot be estimated with any certainty.
|
(3)
|
All amounts assume that the executives received full vesting of equity awards due to the applicable qualifying termination or Change in Control event, or in the event of termination for cause, settlement of awards that had previously vested. The value of all phantom units pursuant to equity awards under the Long-Term Incentive Plan were valued at our
December 31, 2018
, closing common unit price of
$2.21
. 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. Amounts include fully vested awards related to performance unit awards and strategic unit awards granted to Messrs. Go, Griffin, Fleming and Anderson in 2017 but which could not be paid out until a termination of employment or change in control.
|
(4)
|
Amounts assume that the executives received full vesting of the Deferred Compensation Plan accounts due to the applicable qualifying termination (death, disability, or normal retirement) or Change in Control event. All vested amounts will also receive accelerated distribution upon a qualifying termination or a Change in Control event, therefore the columns “Termination by Us Without Cause, or Good Reason Termination, in Connection with a Change in Control,” “Change in Control” and “Termination Due to Death and Disability” also include vested account balances that would be distributed upon the applicable triggering event. None of our named executive officers other than Mr. Grube was normal retirement age (66 for purposes of the Deferred Compensation Plan) as of
December 31, 2018
, therefore only Mr. Grube would be eligible to receive the distribution of his vested Deferred Compensation Plan account upon a termination event in addition to the columns reflected in the table above. The value of all phantom units held in the Deferred Compensation Plan accounts was valued at our
December 31, 2018
, closing common unit price of
$2.21
. 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. As of December 31, 2018, the 50% portion of the 2018 Cash Incentive Awards that were required to be deferred were still deemed to be outstanding equity awards, and not part of the Deferred Compensation Plan accounts.
|
(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;
|
•
|
a strategy and growth committee chair annual fee of $10,000;
|
•
|
an audit committee chair annual fee of $20,000;
|
•
|
a non-chair audit committee member annual fee of $10,000;
|
•
|
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 $5,000; and
|
•
|
all other committee member annual fee of $2,500.
|
|
Director Compensation Table for 2018
|
||||||||||
Name
|
Fees Earned or
Paid in Cash
(1)
|
|
Unit
Awards
(2)
|
|
Total
|
||||||
Fred M. Fehsenfeld, Jr.
|
$
|
—
|
|
|
$
|
421,256
|
|
|
$
|
421,256
|
|
James S. Carter
|
$
|
—
|
|
|
$
|
453,442
|
|
|
$
|
453,442
|
|
Robert E. Funk
|
$
|
—
|
|
|
$
|
464,336
|
|
|
$
|
464,336
|
|
Stephen P. Mawer
|
$
|
—
|
|
|
$
|
459,658
|
|
|
$
|
459,658
|
|
Daniel J. Sajkowski
|
$
|
—
|
|
|
$
|
417,991
|
|
|
$
|
417,991
|
|
Amy M. Schumacher
|
$
|
—
|
|
|
$
|
428,711
|
|
|
$
|
428,711
|
|
Daniel L. Sheets
|
$
|
17,500
|
|
|
$
|
25,000
|
|
|
$
|
42,500
|
|
|
(1)
|
Includes fees paid in cash only. As noted above, the cash fees earned by each non-employee director in 2017 and 2018 were paid in the form of phantom unit awards that were granted on March 7, 2018 for fees related to fiscal year 2017 and November 7, 2018 and December 31, 2018 for fees related to fiscal year 2018, with the exception of Mr. Sheets whose fees were paid in the form of cash.
|
(2)
|
The amounts in this column are calculated based on the aggregate grant date fair value of (i) annual phantom unit awards to all non-employee directors for fiscal years 2017 and 2018 and (ii) cash fees paid in the form of phantom unit awards that were granted on March 7, 2018 for fees related to fiscal year 2017 and November 7, 2018 and December 31, 2018 for fees related to fiscal year 2018 and (iii) matching phantom unit awards granted to those non-employee directors for fiscal years 2017 and 2018 as discussed above. The phantom unit awards that were granted on March 7, 2018 for awards related to fiscal year 2017 and November 7, 2018 for awards related to fiscal year 2018. The amounts reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, disregarding the estimate of forfeitures. See note 14 to our consolidated financial statements for the fiscal year ending December 31, 2018 for a discussion of the assumptions used to determine the FASB ASC Topic 718 value of the awards.
|
(3)
|
Mr. Sheets began his role as director on October 29, 2018.
|
|
Annual Director Phantom Unit Awards
|
||||||||||
|
Grant Date
|
|
Fiscal Year to which Awards relate to
|
|
Number of
Units Granted
(#)
(1)
|
|
Number of Matching Units Granted
(#) (2)
|
|
Aggregate Grant Date Fair Value
|
||
Fred M. Fehsenfeld, Jr.
|
March 7, 2018
|
|
2017
|
|
24,722
|
|
4,677
|
|
$
|
240,280
|
|
|
Fourth Quarter 2018
(3)
|
|
2018
|
|
38,308
|
|
5,824
|
|
$
|
180,976
|
|
James S. Carter
|
March 7, 2018
|
|
2017
|
|
26,404
|
|
5,236
|
|
$
|
257,088
|
|
|
Fourth Quarter 2018
(3)
|
|
2018
|
|
41,626
|
|
6,931
|
|
$
|
196,355
|
|
Robert E. Funk
|
March 7, 2018
|
|
2017
|
|
27,340
|
|
5,548
|
|
$
|
266,448
|
|
|
Fourth Quarter 2018
(3)
|
|
2018
|
|
41,958
|
|
7,041
|
|
$
|
197,891
|
|
Stephen P. Mawer
|
March 7, 2018
|
|
2017
|
|
26,872
|
|
5,392
|
|
$
|
261,768
|
|
|
Fourth Quarter 2018
(3)
|
|
2018
|
|
41,958
|
|
7,041
|
|
$
|
197,891
|
|
Daniel J. Sajkowski
|
March 7, 2018
|
|
2017
|
|
24,722
|
|
4,677
|
|
$
|
240,280
|
|
|
Fourth Quarter 2018
(3)
|
|
2018
|
|
37,706
|
|
5,624
|
|
$
|
177,711
|
|
Amy M. Schumacher
|
March 7, 2018
|
|
2017
|
|
25,469
|
|
4,924
|
|
$
|
247,735
|
|
|
Fourth Quarter 2018
(3)
|
|
2018
|
|
38,306
|
|
5,826
|
|
$
|
180,976
|
|
Daniel L. Sheets
(4)
|
Fourth Quarter 2018
(3)
|
|
2018
|
|
5,208
|
|
—
|
|
$
|
25,000
|
|
|
(1)
|
This column represents both the annual phantom unit award and Director Fees grant. 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. With respect to the Director Fees grant, all phantom units vest on the third December 31
st
after the grant date.
|
(2)
|
With respect to the Matching Units, the phantom units will vest on the third December 31
st
after the grant date.
|
(3)
|
The grant date for the fees related to the first three quarters of 2018 and the 2018 annual director grant was November 11, 2018. The grant date for fees related to the fourth quarter of 2018 was December 31, 2018.
|
(4)
|
Mr. Sheets began his role as director on October 29, 2018.
|
|
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.
|
65,702
|
|
$
|
145,201
|
|
James S. Carter
|
72,368
|
|
$
|
159,933
|
|
Robert E. Funk
|
74,058
|
|
$
|
163,668
|
|
Stephen P. Mawer
|
73,434
|
|
$
|
162,289
|
|
Daniel J. Sajkowski
|
64,900
|
|
$
|
143,429
|
|
Amy M. Schumacher
|
66,696
|
|
$
|
147,398
|
|
Daniel L. Sheets
|
3,906
|
|
$
|
8,632
|
|
|
(1)
|
The market value of each director’s unvested phantom units as of
December 31, 2018
was determined by multiplying all unvested phantom units by the closing price of our common units on
December 31, 2018
, which was
$2.21
.
|
|
(1)
|
The dollar amount of each director’s account as of
December 31, 2018
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 31, 2018
, which was
$2.21
.
|
•
|
The median of the annual total compensation of all employees of our general partner (other than the CEO) was
$80,962
; and
|
•
|
The annual total compensation of the CEO, as reported in the Summary Compensation Table included elsewhere within this Annual Report, was
$1,205,520
.
|
•
|
Based on this information, for 2018 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
15
to 1.
|
•
|
We determined that, as of December 31, 2018, our general partner’s employee population consisted of approximately
1,700
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, 2018 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 2018. We did not annualize the compensation for any employees that were not employed by our general partner for all of 2018.
|
◦
|
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 2018 year in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of
$80,962
. The difference between such employee’s salary, wages and overtime pay and the employee’s annual total compensation represents contributions in the amount of
$3,370
that we made on the employee’s behalf to our 401(k) plan for the 2018 year and to the employee’s health savings account for the 2018 year.
|
•
|
With respect to the annual total compensation of the CEO, we used the amount reported in the “Total” column of our 2018 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
|
|
|
15.32
|
%
|
Calumet, Incorporated
(2)
|
1,934,287
|
|
|
2.50
|
%
|
William A. Anderson
(3)
|
78,616
|
|
|
*
|
|
Christopher H. Bohnert
|
7,642
|
|
|
*
|
|
James S. Carter
|
148,808
|
|
|
*
|
|
Fred M. Fehsenfeld, Jr.
(1)(2)(4)(5)
|
739,811
|
|
|
*
|
|
Bruce A. Fleming
|
232,255
|
|
|
*
|
|
Robert E. Funk
|
99,020
|
|
|
*
|
|
Timothy Go
|
208,145
|
|
|
*
|
|
D. West Griffin
|
97,860
|
|
|
*
|
|
F. William Grube
(6)
|
240,194
|
|
|
*
|
|
Stephen P. Mawer
|
60,675
|
|
|
*
|
|
Daniel J. Sajkowski
|
49,015
|
|
|
*
|
|
Amy M. Schumacher
(1)(5)(7)
|
58,715
|
|
|
*
|
|
Daniel L. Sheets
|
2,604
|
|
|
*
|
|
All directors and executive officers as a group (12 persons)
|
2,023,360
|
|
|
2.61
|
%
|
|
*
|
= 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
|
(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)(2)
|
|
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))
(2)
|
||||
Long-Term Incentive Plan
|
2,022,908
|
|
|
—
|
|
|
391,346
|
|
|
Total
|
2,022,908
|
|
|
$
|
—
|
|
|
391,346
|
|
|
(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.”
|
(2)
|
As of
December 31, 2018
, the Company has determined the equity-classified performance units are likely to be settled in cash and have reclassified these as liability awards. Liability classified awards are not included in this calculation. As of December 31, 2018, we determined that certain units classified as equity awards as of December 31, 2017 are likely to be settled in cash and, as a result, we have reclassified them as liability awards.
|
•
|
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,
|
||||||
|
2018
|
|
2017
|
||||
Audit fees
|
$
|
5.3
|
|
|
$
|
6.4
|
|
Audit-related fees
|
—
|
|
|
—
|
|
||
Total
|
$
|
5.3
|
|
|
$
|
6.4
|
|
Exhibit Number
|
|
|
|
Description
|
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
||
|
—
|
|
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.
|
|
|
|
|
|
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:
|
March 7, 2019
|
Timothy Go
|
|
|
|
|
|
|
|
|
|
|
|
/s/ D. West Griffin
|
|
Executive Vice President and Chief Financial Officer of Calumet GP, LLC (Principal Financial Officer)
|
|
Date:
|
March 7, 2019
|
D. West Griffin
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Christopher Bohnert
|
|
Chief Accounting Officer (Principal Accounting Officer)
|
|
Date:
|
March 7, 2019
|
Christopher Bohnert
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Fred M. Fehsenfeld, Jr.
|
|
Director and Chairman of the Board of Calumet GP, LLC
|
|
Date:
|
March 7, 2019
|
Fred M. Fehsenfeld, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
/s/ James S. Carter
|
|
Director of Calumet GP, LLC
|
|
Date:
|
March 7, 2019
|
James S. Carter
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert E. Funk
|
|
Director of Calumet GP, LLC
|
|
Date:
|
March 7, 2019
|
Robert E. Funk
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Stephen P. Mawer
|
|
Director of Calumet GP, LLC
|
|
Date:
|
March 7, 2019
|
Stephen P. Mawer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Daniel J. Sajkowski
|
|
Director of Calumet GP, LLC
|
|
Date:
|
March 7, 2019
|
Daniel J. Sajkowski
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Amy M. Schumacher
|
|
Director of Calumet GP, LLC
|
|
Date:
|
March 7, 2019
|
Amy M. Schumacher
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Daniel L. Sheets
|
|
Director of Calumet GP, LLC
|
|
Date:
|
March 7, 2019
|
Daniel L. Sheets
|
|
|
|
|
By:
|
Calumet Refining, LLC, its sole member
|
By:
|
Calumet Operating, LLC, its sole member
|
By:
|
Calumet Specialty Products Partners, L.P., its sole member
|
By:
|
Calumet GP, LLC, its general partner
|
|
|
|
Name of Subsidiary
|
|
Jurisdiction of Organization
|
Calumet Operating, LLC
|
|
Delaware
|
Calumet Refining, LLC
|
|
Delaware
|
Calumet Shreveport Refining, LLC
|
|
Delaware
|
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:
|
March 7, 2019
|
/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:
|
March 7, 2019
|
/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)
|
|
|
March 7, 2019
|
/s/ Timothy Go
|
|
Timothy Go
|
|
Chief Executive Officer of Calumet GP, LLC, general partner of Calumet Specialty Products Partners, L.P
(Principal Executive Officer)
|
|
|
March 7, 2019
|
/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)
|