|
☑
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended December 31, 2019
|
|
OR
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
35-1811116
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification Number)
|
Title of Each Class
|
|
Trading symbol(s)
|
|
Name of Each Exchange on Which Registered
|
Common units representing limited partner interests
|
|
CLMT
|
|
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
|
|
30,000
|
|
Gasoline, diesel, jet fuel and asphalt
|
Cotton Valley
|
|
Louisiana
|
|
1995
|
|
13,600
|
|
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
|
|
3,000
|
|
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
|
•
|
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 30,000 bpd, which was completed in 2016, the expansion of our TruFuel packaging line through the installation of a new filler line dedicated to filling gallon containers completed in 2017; the conversion of idle aromatic saturation unit to a naphtha isomerization unit at our San Antonio refinery completed in 2018; and debottlenecking of our Shreveport refinery to increase economically available capacity by 7,000 bpd completed in 2019. We intend to continue increasing 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.
|
•
|
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 cash distributions, 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 72% of our continuing operations gross profit in 2019 were generated by our 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 28% of our continuing operations gross profit in 2019. 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.
|
•
|
Disciplined Approach to Strategic and Complementary Acquisitions. Our senior management team is focused on acquiring assets where we can enhance operations and improve profitability and product lines that will complement and expand our specialty product offerings. In the future, we intend to continue pursuing prudent, accretive acquisitions that will benefit our company over the long term. We intend to continue to reduce our leverage over time, maintain a capital structure that facilitates access to the capital markets 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 2,400 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. Our ability to produce numerous specialty products allows us 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 2019, we sold our fuel and specialty products to approximately 2,300 customers and we are continually seeking new customers. No single customer accounted for more than 10% of our consolidated sales in any of the three years ended December 31, 2019, 2018 and 2017.
|
•
|
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 and specialty chemical industries 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 November 2019, we sold the San Antonio, Texas refinery (“San Antonio Refinery”) and related assets, including associated hydrocarbon inventories and crude oil terminal and pipeline for total consideration of $59.1 million. Please read Note 5 “Divestitures” under Part II, Item 8 “Financial Statements and Supplementary Data” for additional information.
|
•
|
In March 2019, we sold our interest in Biosynthetic Technologies, a startup company which developed an intellectual property portfolio for the manufacture of renewable-based and biodegradable esters. We received proceeds of $5.0 million for the sale. Please read Note 6 “Investment in Unconsolidated Affiliates” under Part II, Item 8 “Financial Statements and Supplementary Data” for additional information.
|
•
|
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. Please read 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 related to the Transitional Service Agreement. Please read Note 5 “Divestitures” under Part II, Item 8 “Financial Statements and Supplementary Data” for additional information.
|
•
|
In November 2017, we sold Anchor, for initial total consideration of approximately $89.6 million. We have classified the results of operations for Anchor as discontinued operations for all periods presented. Please read Note 4 “Discontinued Operations” under Part II, Item 8 “Financial Statements and Supplementary Data” for additional information.
|
|
Year Ended December 31,
|
||||||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||
|
(In bpd)
|
|
|
|
(In bpd)
|
|
|
||||||||||
Total sales volume (1)
|
104,734
|
|
|
97,104
|
|
|
7.9
|
%
|
|
97,104
|
|
|
132,082
|
|
|
(26.5
|
)%
|
Total feedstock runs (2)
|
103,603
|
|
|
94,137
|
|
|
10.1
|
%
|
|
94,137
|
|
|
128,624
|
|
|
(26.8
|
)%
|
Facility production: (3)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Specialty products:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Lubricating oils
|
11,506
|
|
|
11,931
|
|
|
(3.6
|
)%
|
|
11,931
|
|
|
14,606
|
|
|
(18.3
|
)%
|
Solvents
|
7,526
|
|
|
7,649
|
|
|
(1.6
|
)%
|
|
7,649
|
|
|
7,761
|
|
|
(1.4
|
)%
|
Waxes
|
1,315
|
|
|
1,279
|
|
|
2.8
|
%
|
|
1,279
|
|
|
1,423
|
|
|
(10.1
|
)%
|
Packaged and synthetic specialty products (4)
|
1,540
|
|
|
2,129
|
|
|
(27.7
|
)%
|
|
2,129
|
|
|
2,206
|
|
|
(3.5
|
)%
|
Other
|
1,764
|
|
|
2,113
|
|
|
(16.5
|
)%
|
|
2,113
|
|
|
1,811
|
|
|
16.7
|
%
|
Total specialty products
|
23,651
|
|
|
25,101
|
|
|
(5.8
|
)%
|
|
25,101
|
|
|
27,807
|
|
|
(9.7
|
)%
|
Fuel products:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gasoline
|
22,877
|
|
|
20,323
|
|
|
12.6
|
%
|
|
20,323
|
|
|
35,713
|
|
|
(43.1
|
)%
|
Diesel
|
28,709
|
|
|
27,367
|
|
|
4.9
|
%
|
|
27,367
|
|
|
33,277
|
|
|
(17.8
|
)%
|
Jet fuel
|
4,506
|
|
|
2,895
|
|
|
55.6
|
%
|
|
2,895
|
|
|
5,368
|
|
|
(46.1
|
)%
|
Asphalt, heavy fuel oils and other
|
20,286
|
|
|
19,612
|
|
|
3.4
|
%
|
|
19,612
|
|
|
29,396
|
|
|
(33.3
|
)%
|
Total fuel products
|
76,378
|
|
|
70,197
|
|
|
8.8
|
%
|
|
70,197
|
|
|
103,754
|
|
|
(32.3
|
)%
|
Total facility production (3)
|
100,029
|
|
|
95,298
|
|
|
5.0
|
%
|
|
95,298
|
|
|
131,561
|
|
|
(27.6
|
)%
|
|
(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 our Royal Purple, Bel-Ray and Calumet Packaging facilities.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
(In millions)
|
|
% of Sales
|
|
(In millions)
|
|
% of Sales
|
|
(In millions)
|
|
% of Sales
|
|||||||||
Sales of specialty products:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Lubricating oils
|
$
|
593.1
|
|
|
17.2
|
%
|
|
$
|
600.1
|
|
|
17.2
|
%
|
|
$
|
584.2
|
|
|
15.5
|
%
|
Solvents
|
325.9
|
|
|
9.4
|
%
|
|
331.9
|
|
|
9.5
|
%
|
|
274.4
|
|
|
7.3
|
%
|
|||
Waxes
|
119.3
|
|
|
3.4
|
%
|
|
117.0
|
|
|
3.3
|
%
|
|
117.2
|
|
|
3.1
|
%
|
|||
Packaged and synthetic specialty products (1)
|
230.8
|
|
|
6.7
|
%
|
|
256.8
|
|
|
7.3
|
%
|
|
260.7
|
|
|
6.9
|
%
|
|||
Other (2)
|
85.0
|
|
|
2.5
|
%
|
|
76.6
|
|
|
2.2
|
%
|
|
63.9
|
|
|
1.7
|
%
|
|||
Total
|
1,354.1
|
|
|
39.2
|
%
|
|
1,382.4
|
|
|
39.5
|
%
|
|
1,300.4
|
|
|
34.5
|
%
|
|||
Sales of fuel products:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gasoline
|
679.6
|
|
|
19.7
|
%
|
|
683.1
|
|
|
19.5
|
%
|
|
948.5
|
|
|
25.2
|
%
|
|||
Diesel
|
859.1
|
|
|
24.9
|
%
|
|
910.0
|
|
|
26.0
|
%
|
|
877.9
|
|
|
23.4
|
%
|
|||
Jet fuel
|
134.6
|
|
|
3.9
|
%
|
|
100.1
|
|
|
2.9
|
%
|
|
135.0
|
|
|
3.6
|
%
|
|||
Asphalt, heavy fuel oils and other (3)
|
425.2
|
|
|
12.3
|
%
|
|
421.9
|
|
|
12.1
|
%
|
|
502.0
|
|
|
13.3
|
%
|
|||
Total
|
2,098.5
|
|
|
60.8
|
%
|
|
2,115.1
|
|
|
60.5
|
%
|
|
2,463.4
|
|
|
65.5
|
%
|
|||
Consolidated sales
|
$
|
3,452.6
|
|
|
100.0
|
%
|
|
$
|
3,497.5
|
|
|
100.0
|
%
|
|
$
|
3,763.8
|
|
|
100.0
|
%
|
|
(1)
|
Represents finished lubricants and chemicals specialty products at our 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, San Antonio, Superior 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,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
60,000
|
|
|
60,000
|
|
|
60,000
|
|
Total feedstock runs (1) (2)
|
41,216
|
|
|
34,596
|
|
|
37,853
|
|
Total refinery production (2) (3)
|
41,704
|
|
|
35,771
|
|
|
40,741
|
|
|
(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 and Princeton 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 and Princeton refineries and Karns City facility.
|
|
Great Falls Refinery
|
|||||||
|
Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
30,000
|
|
|
25,000
|
|
|
25,000
|
|
Total feedstock runs (1) (2)
|
25,066
|
|
|
24,684
|
|
|
24,511
|
|
Total refinery production (2)
|
25,690
|
|
|
24,781
|
|
|
24,948
|
|
|
(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.
|
|
Cotton Valley Refinery
|
|||||||
|
Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
13,600
|
|
|
13,500
|
|
|
13,500
|
|
Total feedstock runs (1) (2)
|
9,284
|
|
|
6,871
|
|
|
6,920
|
|
Total refinery production (2) (3)
|
6,001
|
|
|
5,859
|
|
|
6,466
|
|
|
(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,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
|
(In bpd)
|
|||||||
Crude oil throughput capacity
|
10,000
|
|
|
10,000
|
|
|
10,000
|
|
Total feedstock runs (1)
|
6,580
|
|
|
6,051
|
|
|
6,606
|
|
Total refinery production (1) (2)
|
4,259
|
|
|
4,950
|
|
|
5,396
|
|
|
(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,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
|
(in bpd)
|
|||||||
Feedstock throughput capacity (1)
|
11,300
|
|
|
11,300
|
|
|
11,300
|
|
Total feedstock runs (2) (3)
|
5,392
|
|
|
5,684
|
|
|
5,896
|
|
Total production (3)
|
5,510
|
|
|
5,749
|
|
|
5,932
|
|
|
(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
|
Cotton Valley
|
|
Local paraffinic crude oil
|
|
Tank truck
|
Great Falls
|
|
Canadian Heavy (e.g. Bow River) and Canadian Light Sour
|
|
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, 2019. 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
|
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
|
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, 2022
|
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;
|
•
|
global or national health concerns; 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 any 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, global or national health crisis 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;
|
•
|
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, if any 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,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
3,452.6
|
|
|
$
|
3,497.5
|
|
|
$
|
3,763.8
|
|
|
$
|
3,474.3
|
|
|
$
|
3,930.3
|
|
Cost of sales
|
3,000.9
|
|
|
3,060.8
|
|
|
3,265.6
|
|
|
3,088.0
|
|
|
3,393.9
|
|
|||||
Gross profit
|
451.7
|
|
|
436.7
|
|
|
498.2
|
|
|
386.3
|
|
|
536.4
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling
|
53.1
|
|
|
58.2
|
|
|
65.7
|
|
|
69.8
|
|
|
71.8
|
|
|||||
General and administrative
|
136.7
|
|
|
122.5
|
|
|
138.7
|
|
|
105.8
|
|
|
125.9
|
|
|||||
Transportation
|
122.9
|
|
|
137.2
|
|
|
137.1
|
|
|
154.3
|
|
|
153.6
|
|
|||||
Taxes other than income taxes
|
20.5
|
|
|
18.1
|
|
|
24.1
|
|
|
19.3
|
|
|
17.1
|
|
|||||
Loss on impairment and disposal of assets
|
37.0
|
|
|
—
|
|
|
207.3
|
|
|
35.7
|
|
|
—
|
|
|||||
(Gain) loss on sale of business, net
|
8.7
|
|
|
(4.8
|
)
|
|
(236.0
|
)
|
|
—
|
|
|
—
|
|
|||||
Other
|
(3.5
|
)
|
|
(17.4
|
)
|
|
3.3
|
|
|
1.7
|
|
|
10.8
|
|
|||||
Operating income (loss)
|
76.3
|
|
|
122.9
|
|
|
158.0
|
|
|
(0.3
|
)
|
|
157.2
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(134.6
|
)
|
|
(155.5
|
)
|
|
(183.1
|
)
|
|
(161.7
|
)
|
|
(104.9
|
)
|
|||||
Debt extinguishment costs
|
(2.2
|
)
|
|
(58.8
|
)
|
|
—
|
|
|
—
|
|
|
(46.6
|
)
|
|||||
Gain (loss) on derivative instruments
|
9.0
|
|
|
33.8
|
|
|
(9.6
|
)
|
|
(4.1
|
)
|
|
(31.4
|
)
|
|||||
Gain (loss) from unconsolidated affiliates
|
3.8
|
|
|
(3.7
|
)
|
|
—
|
|
|
(18.3
|
)
|
|
(61.1
|
)
|
|||||
Gain (loss) on sale of unconsolidated affiliates
|
1.2
|
|
|
0.2
|
|
|
—
|
|
|
(113.4
|
)
|
|
—
|
|
|||||
Other
|
3.4
|
|
|
10.8
|
|
|
3.3
|
|
|
1.2
|
|
|
1.6
|
|
|||||
Total other expense
|
(119.4
|
)
|
|
(173.2
|
)
|
|
(189.4
|
)
|
|
(296.3
|
)
|
|
(242.4
|
)
|
|||||
Net loss from continuing operations before income taxes
|
(43.1
|
)
|
|
(50.3
|
)
|
|
(31.4
|
)
|
|
(296.6
|
)
|
|
(85.2
|
)
|
|||||
Income tax expense (benefit) from continuing operations
|
0.5
|
|
|
0.7
|
|
|
(0.1
|
)
|
|
0.2
|
|
|
0.2
|
|
|||||
Net loss from continuing operations
|
(43.6
|
)
|
|
(51.0
|
)
|
|
(31.3
|
)
|
|
(296.8
|
)
|
|
(85.4
|
)
|
|||||
Net loss from discontinued operations, net of income taxes
|
—
|
|
|
(4.1
|
)
|
|
(72.5
|
)
|
|
(31.8
|
)
|
|
(54.0
|
)
|
|||||
Net loss
|
$
|
(43.6
|
)
|
|
$
|
(55.1
|
)
|
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
|
$
|
(139.4
|
)
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(In millions, except unit, per unit and operating data)
|
||||||||||||||||||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
78,212,136
|
|
|
77,943,992
|
|
|
77,598,950
|
|
|
77,043,935
|
|
|
74,896,096
|
|
|||||
Limited partners’ interest basic and diluted net loss per unit:
|
|
|
|
|
|
|
|
|
|
||||||||||
From continuing operations
|
$
|
(0.55
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(3.77
|
)
|
|
$
|
(1.34
|
)
|
From discontinued operations
|
—
|
|
|
(0.05
|
)
|
|
(0.91
|
)
|
|
(0.41
|
)
|
|
(0.71
|
)
|
|||||
Limited partners’ interest
|
$
|
(0.55
|
)
|
|
$
|
(0.69
|
)
|
|
$
|
(1.31
|
)
|
|
$
|
(4.18
|
)
|
|
$
|
(2.05
|
)
|
Cash distributions declared per limited partner
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.69
|
|
|
$
|
2.74
|
|
Balance Sheet Data (at period end):(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment, net
|
$
|
973.5
|
|
|
$
|
1,098.1
|
|
|
$
|
1,159.2
|
|
|
$
|
1,632.4
|
|
|
$
|
1,665.0
|
|
Total assets
|
$
|
1,857.8
|
|
|
$
|
2,087.5
|
|
|
$
|
2,688.8
|
|
|
$
|
2,571.3
|
|
|
$
|
2,752.6
|
|
Accounts payable
|
$
|
230.2
|
|
|
$
|
200.6
|
|
|
$
|
282.3
|
|
|
$
|
275.9
|
|
|
$
|
300.0
|
|
Total long-term debt
|
$
|
1,211.3
|
|
|
$
|
1,604.5
|
|
|
$
|
1,992.3
|
|
|
$
|
1,997.2
|
|
|
$
|
1,773.4
|
|
Total partners’ capital
|
$
|
21.6
|
|
|
$
|
65.7
|
|
|
$
|
119.9
|
|
|
$
|
218.7
|
|
|
$
|
603.9
|
|
Cash Flow Data:(5)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash flow provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
191.9
|
|
|
$
|
75.2
|
|
|
$
|
(26.5
|
)
|
|
$
|
4.1
|
|
|
$
|
376.4
|
|
Investing activities
|
$
|
14.5
|
|
|
$
|
8.3
|
|
|
$
|
453.4
|
|
|
$
|
(154.2
|
)
|
|
$
|
(389.0
|
)
|
Financing activities
|
$
|
(343.0
|
)
|
|
$
|
(442.1
|
)
|
|
$
|
83.2
|
|
|
$
|
148.7
|
|
|
$
|
9.7
|
|
Other Financial Data:(5)
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA
|
$
|
201.6
|
|
|
$
|
219.2
|
|
|
$
|
246.7
|
|
|
$
|
(3.5
|
)
|
|
$
|
82.5
|
|
Adjusted EBITDA
|
$
|
304.6
|
|
|
$
|
263.9
|
|
|
$
|
317.2
|
|
|
$
|
158.2
|
|
|
$
|
257.7
|
|
Distributable Cash Flow
|
$
|
104.0
|
|
|
$
|
67.0
|
|
|
$
|
89.3
|
|
|
$
|
(5.7
|
)
|
|
$
|
161.9
|
|
Operating Data (bpd): (1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Total sales volume (2)
|
104,734
|
|
|
97,104
|
|
|
132,082
|
|
|
140,180
|
|
|
126,216
|
|
|||||
Total feedstock runs (3)
|
103,603
|
|
|
94,137
|
|
|
128,624
|
|
|
134,163
|
|
|
123,051
|
|
|||||
Total facility production (4)
|
100,029
|
|
|
95,298
|
|
|
131,561
|
|
|
134,929
|
|
|
122,795
|
|
|
(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.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(In millions)
|
|
|
|
|
||||||||||||||
Reconciliation of Segment Adjusted EBITDA to EBITDA and Net loss:
|
|
|
|
|
|
|
|
|
|||||||||||
Total segment Adjusted EBITDA(4)
|
$
|
304.6
|
|
|
$
|
263.9
|
|
|
$
|
317.2
|
|
|
$
|
158.2
|
|
|
$
|
257.7
|
|
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized (gain) loss on derivative instruments
|
$
|
26.1
|
|
|
$
|
(30.2
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
(19.9
|
)
|
|
$
|
39.5
|
|
Realized loss on derivatives, not included in net loss or settled in a prior period
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.4
|
)
|
|
(10.0
|
)
|
|||||
Debt extinguishment costs
|
2.2
|
|
|
58.8
|
|
|
—
|
|
|
—
|
|
|
46.6
|
|
|||||
Amortization of turnaround costs
|
19.3
|
|
|
12.8
|
|
|
24.3
|
|
|
33.2
|
|
|
29.0
|
|
|||||
Loss on impairment and disposal of assets (3)
|
37.0
|
|
|
—
|
|
|
207.3
|
|
|
35.9
|
|
|
58.1
|
|
|||||
(Gain) loss on sale of unconsolidated affiliate
|
(1.2
|
)
|
|
—
|
|
|
—
|
|
|
113.9
|
|
|
—
|
|
|||||
(Gain) loss on sale of business, net
|
8.7
|
|
|
(0.7
|
)
|
|
(173.4
|
)
|
|
—
|
|
|
—
|
|
|||||
Other non-recurring expenses
|
3.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Equity-based compensation and other items
|
7.4
|
|
|
4.0
|
|
|
15.9
|
|
|
5.0
|
|
|
12.0
|
|
|||||
EBITDA
|
$
|
201.6
|
|
|
$
|
219.2
|
|
|
$
|
246.7
|
|
|
$
|
(3.5
|
)
|
|
$
|
82.5
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense
|
$
|
134.6
|
|
|
$
|
155.5
|
|
|
$
|
183.1
|
|
|
$
|
161.7
|
|
|
$
|
104.9
|
|
Depreciation and amortization
|
110.1
|
|
|
118.1
|
|
|
168.5
|
|
|
171.1
|
|
|
145.4
|
|
|||||
Income tax expense (benefit)
|
0.5
|
|
|
0.7
|
|
|
(1.1
|
)
|
|
(7.7
|
)
|
|
(28.4
|
)
|
|||||
Net loss
|
$
|
(43.6
|
)
|
|
$
|
(55.1
|
)
|
|
$
|
(103.8
|
)
|
|
$
|
(328.6
|
)
|
|
$
|
(139.4
|
)
|
|
(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 2019 primarily relate to $25.4 million of impairment charges related to an equity method investment.
|
(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.
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(In millions)
|
|
|
|
|
||||||||||||||
LCM Impact
|
$
|
35.8
|
|
|
$
|
(30.6
|
)
|
|
$
|
30.6
|
|
|
$
|
50.6
|
|
|
$
|
(67.0
|
)
|
LIFO Impact
|
$
|
6.0
|
|
|
$
|
(6.3
|
)
|
|
$
|
(3.7
|
)
|
|
$
|
(28.5
|
)
|
|
$
|
(25.1
|
)
|
•
|
Specialty product margins improved in 2019 as a result of better asset performance from the Shreveport and Princeton refineries and the rationalization of low margin products in the lubricating oils and packaged and synthetic specialty products divisions. We expect our specialty product margins to remain stable in the near term. We continue to consider our specialty products segment our core business over the long term, and we plan to seek appropriate ways to further invest in our specialty products segment. Accordingly, we continue to evaluate opportunities to divest non-core businesses and assets in line with our strategy of preserving liquidity and streamlining our business to better focus on the advancement of our core business. However, we may also consider the disposition of certain core assets or businesses, to the extent such a transaction would improve our capital structure or otherwise be accretive to the Company. There can be no assurance as to the timing or success of any such potential transaction, or any other transaction, or that we will be able to sell these assets or businesses on satisfactory terms, if at all. In addition, our acquisition program targets assets that management believes will be financially accretive, and we intend to focus on targeted strategic acquisitions of specialty products assets that leverage our existing core competency and that have an identifiable competitive advantage we can exploit as the new owner.
|
•
|
We continue to focus on improving operations. Our average feedstock runs were 103,603 barrels per day (“bpd”) in 2019, compared to 94,137 bpd in 2018. The increase is primarily attributable to the Shreveport crude and propane deasphalting unit debottlenecking projects completed at the end of 2018, higher utilization rates across Shreveport, Cotton Valley and Princeton refineries and less turnaround activity across the assets. We anticipate seeing improvement in our utilization rates in 2020 as we continue to seek to minimize unplanned downtime at our facilities which negatively affected our current year earnings.
|
•
|
Refined fuel product margins tightened in 2019 as compared to 2018 predominately driven by the decrease in the Western Canadian Select (“WCS”) discount versus NYMEX WTI decreasing to approximately $14 per barrel on average below
|
•
|
Environmental regulations continue to affect our margins in the form of 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 63% decrease in the price of RINs in 2019 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.
|
•
|
On January 21, 2020, the Company committed to a cost reduction plan to reduce overall operating expenses, including the reduction of outside services, facility fixed costs and corporate staffing costs (the “Cost Reduction Plan”). These cost reductions are designed to right-size general and administrative spending. The Company expects to incur approximately $10 million in one-time costs over the course of 2020 to implement the Cost Reduction Plan, a significant portion of which are expected to result in cash expenditures.
|
•
|
The Company has taken the next step in our portfolio transformation and started the process of reviewing strategic options for our remaining fuels refinery in Great Falls, Montana and expect to execute upon an option, which could occur as early as this year.
|
•
|
sales volumes;
|
•
|
segment gross profit;
|
•
|
segment Adjusted EBITDA; and
|
•
|
selling, general and administrative expenses.
|
|
Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
|
(In bpd)
|
|||||||
Total sales volume (1)
|
104,734
|
|
|
97,104
|
|
|
132,082
|
|
Total feedstock runs (2)
|
103,603
|
|
|
94,137
|
|
|
128,624
|
|
Total facility production: (3)
|
|
|
|
|
|
|||
Specialty products:
|
|
|
|
|
|
|||
Lubricating oils
|
11,506
|
|
|
11,931
|
|
|
14,606
|
|
Solvents
|
7,526
|
|
|
7,649
|
|
|
7,761
|
|
Waxes
|
1,315
|
|
|
1,279
|
|
|
1,423
|
|
Packaged and synthetic specialty products (4)
|
1,540
|
|
|
2,129
|
|
|
2,206
|
|
Other
|
1,764
|
|
|
2,113
|
|
|
1,811
|
|
Total specialty products
|
23,651
|
|
|
25,101
|
|
|
27,807
|
|
Fuel products:
|
|
|
|
|
|
|||
Gasoline
|
22,877
|
|
|
20,323
|
|
|
35,713
|
|
Diesel
|
28,709
|
|
|
27,367
|
|
|
33,277
|
|
Jet fuel
|
4,506
|
|
|
2,895
|
|
|
5,368
|
|
Asphalt, heavy fuel oils and other
|
20,286
|
|
|
19,612
|
|
|
29,396
|
|
Total fuel products
|
76,378
|
|
|
70,197
|
|
|
103,754
|
|
Total facility production (3)
|
100,029
|
|
|
95,298
|
|
|
131,561
|
|
|
(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 our Royal Purple, Bel-Ray and Calumet Packaging facilities.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In millions)
|
||||||||||
Sales
|
$
|
3,452.6
|
|
|
$
|
3,497.5
|
|
|
$
|
3,763.8
|
|
Cost of sales
|
3,000.9
|
|
|
3,060.8
|
|
|
3,265.6
|
|
|||
Gross profit
|
451.7
|
|
|
436.7
|
|
|
498.2
|
|
|||
Operating costs and expenses:
|
|
|
|
|
|
||||||
Selling
|
53.1
|
|
|
58.2
|
|
|
65.7
|
|
|||
General and administrative
|
136.7
|
|
|
122.5
|
|
|
138.7
|
|
|||
Transportation
|
122.9
|
|
|
137.2
|
|
|
137.1
|
|
|||
Taxes other than income taxes
|
20.5
|
|
|
18.1
|
|
|
24.1
|
|
|||
Loss on impairment and disposal of assets
|
37.0
|
|
|
—
|
|
|
207.3
|
|
|||
(Gain) loss on sale of business, net
|
8.7
|
|
|
(4.8
|
)
|
|
(236.0
|
)
|
|||
Other operating (income) expense
|
(3.5
|
)
|
|
(17.4
|
)
|
|
3.3
|
|
|||
Operating income
|
76.3
|
|
|
122.9
|
|
|
158.0
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(134.6
|
)
|
|
(155.5
|
)
|
|
(183.1
|
)
|
|||
Debt extinguishment costs
|
(2.2
|
)
|
|
(58.8
|
)
|
|
—
|
|
|||
Gain (loss) on derivative instruments
|
9.0
|
|
|
33.8
|
|
|
(9.6
|
)
|
|||
Gain (loss) from unconsolidated affiliates
|
3.8
|
|
|
(3.7
|
)
|
|
—
|
|
|||
Gain on sale of unconsolidated affiliates
|
1.2
|
|
|
0.2
|
|
|
—
|
|
|||
Other
|
3.4
|
|
|
10.8
|
|
|
3.3
|
|
|||
Total other expense
|
(119.4
|
)
|
|
(173.2
|
)
|
|
(189.4
|
)
|
|||
Net loss from continuing operations before income taxes
|
(43.1
|
)
|
|
(50.3
|
)
|
|
(31.4
|
)
|
|||
Income tax expense (benefit) from continuing operations
|
0.5
|
|
|
0.7
|
|
|
(0.1
|
)
|
|||
Net loss from continuing operations
|
(43.6
|
)
|
|
(51.0
|
)
|
|
(31.3
|
)
|
|||
Net loss from discontinued operations, net of income taxes
|
—
|
|
|
(4.1
|
)
|
|
(72.5
|
)
|
|||
Net loss
|
$
|
(43.6
|
)
|
|
$
|
(55.1
|
)
|
|
$
|
(103.8
|
)
|
EBITDA
|
$
|
201.6
|
|
|
$
|
219.2
|
|
|
$
|
246.7
|
|
Adjusted EBITDA
|
$
|
304.6
|
|
|
$
|
263.9
|
|
|
$
|
317.2
|
|
Distributable Cash Flow
|
$
|
104.0
|
|
|
$
|
67.0
|
|
|
$
|
89.3
|
|
|
Year Ended December 31,
|
|||||||||
|
2019
|
|
2018
|
|
% Change
|
|||||
|
(In millions, except barrel and per barrel data)
|
|||||||||
Sales by segment:
|
|
|
|
|
|
|||||
Specialty products:
|
|
|
|
|
|
|||||
Lubricating oils
|
$
|
593.1
|
|
|
$
|
600.1
|
|
|
(1.2
|
)%
|
Solvents
|
325.9
|
|
|
331.9
|
|
|
(1.8
|
)%
|
||
Waxes
|
119.3
|
|
|
117.0
|
|
|
2.0
|
%
|
||
Packaged and synthetic specialty products (1)
|
230.8
|
|
|
256.8
|
|
|
(10.1
|
)%
|
||
Other (2)
|
85.0
|
|
|
76.6
|
|
|
11.0
|
%
|
||
Total specialty products
|
$
|
1,354.1
|
|
|
$
|
1,382.4
|
|
|
(2.0
|
)%
|
Total specialty products sales volume (in barrels)
|
9,087,000
|
|
|
8,742,000
|
|
|
3.9
|
%
|
||
Average specialty products sales price per barrel
|
$
|
149.02
|
|
|
$
|
158.13
|
|
|
(5.8
|
)%
|
Fuel products:
|
|
|
|
|
|
|||||
Gasoline
|
$
|
679.6
|
|
|
$
|
683.1
|
|
|
(0.5
|
)%
|
Diesel
|
859.1
|
|
|
910.0
|
|
|
(5.6
|
)%
|
||
Jet fuel
|
134.6
|
|
|
100.1
|
|
|
34.5
|
%
|
||
Asphalt, heavy fuel oils and other (3)
|
425.2
|
|
|
421.9
|
|
|
0.8
|
%
|
||
Total fuel products
|
$
|
2,098.5
|
|
|
$
|
2,115.1
|
|
|
(0.8
|
)%
|
Total fuel products sales volume (in barrels)
|
29,141,000
|
|
|
26,701,000
|
|
|
9.1
|
%
|
||
Average fuel products sales price per barrel
|
$
|
72.01
|
|
|
$
|
79.21
|
|
|
(9.1
|
)%
|
Total sales
|
$
|
3,452.6
|
|
|
$
|
3,497.5
|
|
|
(1.3
|
)%
|
Total specialty and fuel products sales volume (in barrels)
|
38,228,000
|
|
|
35,443,000
|
|
|
7.9
|
%
|
|
(1)
|
Represents finished lubricants and chemicals specialty products at our 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, San Antonio, Superior 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
|
$
|
(82.7
|
)
|
Volume
|
54.4
|
|
|
Total Specialty Products segment sales decrease
|
$
|
(28.3
|
)
|
|
Dollar Change
|
||
|
(In millions)
|
||
Sales price
|
$
|
(227.3
|
)
|
Divestiture impact
|
(55.8
|
)
|
|
Volume
|
266.5
|
|
|
Total Fuel Products segment sales decrease
|
$
|
(16.6
|
)
|
|
Year Ended December 31,
|
|||||||||
|
2019
|
|
2018
|
|
% Change
|
|||||
|
(Dollars in millions, except per barrel data)
|
|||||||||
Gross profit by segment:
|
|
|
|
|
|
|||||
Specialty products:
|
|
|
|
|
|
|||||
Gross profit excluding hedging activities
|
$
|
325.0
|
|
|
$
|
274.6
|
|
|
18.4
|
%
|
Hedging activities
|
(0.2
|
)
|
|
—
|
|
|
—
|
%
|
||
Gross profit
|
324.8
|
|
|
274.6
|
|
|
18.3
|
%
|
||
Percentage of sales
|
24.0
|
%
|
|
19.9
|
%
|
|
4.1
|
%
|
||
Specialty products gross profit per barrel
|
$
|
35.77
|
|
|
$
|
31.41
|
|
|
13.9
|
%
|
Specialty products gross profit per barrel (including hedging activities)
|
35.74
|
|
|
31.41
|
|
|
13.8
|
%
|
||
Fuel products:
|
|
|
|
|
|
|||||
Gross profit
|
$
|
126.9
|
|
|
$
|
162.1
|
|
|
(21.7
|
)%
|
Percentage of sales
|
6.0
|
%
|
|
7.7
|
%
|
|
(1.7
|
)%
|
||
Fuel products gross profit per barrel
|
$
|
4.35
|
|
|
$
|
6.07
|
|
|
(28.3
|
)%
|
Fuel products gross profit per barrel (including hedging activities)
|
$
|
4.35
|
|
|
$
|
6.07
|
|
|
(28.3
|
)%
|
Total gross profit
|
$
|
451.7
|
|
|
$
|
436.7
|
|
|
3.4
|
%
|
Percentage of sales
|
13.1
|
%
|
|
12.5
|
%
|
|
0.6
|
%
|
|
Dollar Change
|
||
|
(In millions)
|
||
2018 reported gross profit
|
$
|
274.6
|
|
Sales price
|
(82.7
|
)
|
|
Operating costs
|
1.9
|
|
|
LCM / LIFO inventory adjustments
|
18.2
|
|
|
Volume
|
19.2
|
|
|
Cost of materials
|
93.6
|
|
|
2019 reported gross profit
|
$
|
324.8
|
|
|
Dollar Change
|
||
|
(In millions)
|
||
2018 reported gross profit
|
$
|
162.1
|
|
Sales price
|
(227.3
|
)
|
|
RINs
|
(25.4
|
)
|
|
Operating costs
|
(3.2
|
)
|
|
Divestiture impact
|
2.4
|
|
|
Volume
|
53.0
|
|
|
LCM / LIFO inventory adjustments
|
60.3
|
|
|
Cost of materials
|
103.6
|
|
|
2019 reported gross profit
|
$
|
125.5
|
|
|
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.
|
(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
|
$
|
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 decrease
|
$
|
(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
|
%
|
|
(13.9
|
)%
|
||
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
|
%
|
|
(5.5
|
)%
|
||
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
|
%
|
|
(5.3
|
)%
|
|
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,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In millions)
|
||||||||||
Net Cash provided by (used in) operating activities
|
$
|
191.9
|
|
|
$
|
75.2
|
|
|
$
|
(26.5
|
)
|
Net Cash provided by investing activities
|
14.5
|
|
|
8.3
|
|
|
453.4
|
|
|||
Net Cash provided by (used in) financing activities
|
(343.0
|
)
|
|
(442.1
|
)
|
|
83.2
|
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
(136.6
|
)
|
|
$
|
(358.6
|
)
|
|
$
|
510.1
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In millions)
|
||||||||||
Capital improvement expenditures
|
$
|
15.1
|
|
|
$
|
19.7
|
|
|
$
|
23.4
|
|
Replacement capital expenditures
|
34.9
|
|
|
16.9
|
|
|
30.5
|
|
|||
Environmental capital expenditures
|
15.1
|
|
|
7.5
|
|
|
11.5
|
|
|||
Turnaround capital expenditures
|
24.1
|
|
|
30.8
|
|
|
14.5
|
|
|||
Total
|
$
|
89.2
|
|
|
$
|
74.9
|
|
|
$
|
79.9
|
|
•
|
$600.0 million senior secured revolving credit facility maturing in February 2023, subject to borrowing base limitations, with a maximum letter of credit sub-limit 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 Credit Agreement) (“revolving credit facility”);
|
•
|
$350.0 million of 7.625% senior notes due 2022 (“2022 Notes”);
|
•
|
$325.0 million of 7.75% senior notes due 2023 (“2023 Notes”); and
|
•
|
$550.0 million of 11.00% senior notes due 2025 (“2025 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)
|
$
|
496.9
|
|
|
$
|
116.2
|
|
|
$
|
216.1
|
|
|
$
|
134.3
|
|
|
$
|
30.3
|
|
Operating lease obligations (2)
|
102.6
|
|
|
65.0
|
|
|
23.5
|
|
|
10.8
|
|
|
3.3
|
|
|||||
Letters of credit (3)
|
42.5
|
|
|
42.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase commitments (4)
|
315.1
|
|
|
170.8
|
|
|
60.2
|
|
|
42.1
|
|
|
42.0
|
|
|||||
Throughput contract (5)
|
27.7
|
|
|
2.6
|
|
|
7.8
|
|
|
7.9
|
|
|
9.4
|
|
|||||
Employment agreements (6)
|
1.6
|
|
|
1.0
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|||||
Financing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Obligations under inventory financing agreements
|
134.3
|
|
|
134.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Finance lease obligations
|
2.7
|
|
|
0.3
|
|
|
0.6
|
|
|
0.8
|
|
|
1.0
|
|
|||||
Long-term debt obligations, excluding finance lease obligations
|
1,228.8
|
|
|
1.5
|
|
|
352.3
|
|
|
325.0
|
|
|
550.0
|
|
|||||
Total obligations
|
$
|
2,352.2
|
|
|
$
|
534.2
|
|
|
$
|
661.1
|
|
|
$
|
520.9
|
|
|
$
|
636.0
|
|
|
(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 finance lease obligations, which excludes the adjustment for the interest rate swap agreement.
|
(2)
|
We have various operating leases primarily for railcars, the use of land, storage tanks, compressor stations, equipment, precious metals and office facilities that extend through July 2055.
|
(3)
|
Letters of credit primarily supporting crude oil and feedstock purchases.
|
(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)
|
Throughput commitments consist primarily of obligations to transport a minimum volume of crude oil through a pipeline.
|
(6)
|
Certain employment agreements may be terminated under certain circumstances or at certain dates prior to expiration. We expect those agreements will be renewed or replaced with similar agreements upon their expiration. Amounts due under those agreements assume they 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, planned utilization rates, 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;
|
•
|
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, WCS, WTI Midland, Mixed Sweet Blend and ICE Brent.
|
|
Sales
|
|
Cost of Sales
|
||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Specialty Products:
|
|
|
|
|
|
|
|
||||||||
$1.00 change in per barrel price of crude oil (1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.1
|
|
|
$
|
8.7
|
|
Fuel Products:
|
|
|
|
|
|
|
|
||||||||
$1.00 change in per barrel price of crude oil (1)
|
—
|
|
|
—
|
|
|
21.4
|
|
|
20.1
|
|
||||
$1.00 change in per barrel selling price of gasoline, diesel and jet fuel (1)
|
21.4
|
|
|
20.1
|
|
|
—
|
|
|
—
|
|
|
(1)
|
Based on our 2019 and 2018 sales volumes.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
|
(In millions)
|
||||||||||||||
Financial Instrument:
|
|
|
|
|
|
|
|
||||||||
2021 Unsecured Notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
755.7
|
|
|
$
|
894.7
|
|
2022 Unsecured Notes
|
$
|
351.2
|
|
|
$
|
347.1
|
|
|
$
|
279.4
|
|
|
$
|
345.9
|
|
2023 Unsecured Notes
|
$
|
325.2
|
|
|
$
|
321.0
|
|
|
$
|
252.3
|
|
|
$
|
320.1
|
|
2025 Unsecured Notes
|
$
|
598.8
|
|
|
$
|
540.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions, except unit data)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
19.1
|
|
|
$
|
155.7
|
|
Accounts receivable, net:
|
|
|
|
||||
Trade, less allowance for doubtful accounts of $0.9 million and $1.5 million, respectively
|
175.0
|
|
|
177.7
|
|
||
Other
|
13.5
|
|
|
20.3
|
|
||
|
188.5
|
|
|
198.0
|
|
||
Inventories
|
292.6
|
|
|
284.1
|
|
||
Derivative assets
|
0.9
|
|
|
18.3
|
|
||
Prepaid expenses and other current assets
|
11.0
|
|
|
13.9
|
|
||
Total current assets
|
512.1
|
|
|
670.0
|
|
||
Property, plant and equipment, net
|
973.5
|
|
|
1,098.1
|
|
||
Investment in unconsolidated affiliates
|
—
|
|
|
25.4
|
|
||
Goodwill
|
171.4
|
|
|
171.4
|
|
||
Other intangible assets, net
|
71.2
|
|
|
88.0
|
|
||
Operating lease right-of-use assets
|
93.1
|
|
|
—
|
|
||
Other noncurrent assets, net
|
36.5
|
|
|
34.6
|
|
||
Total assets
|
$
|
1,857.8
|
|
|
$
|
2,087.5
|
|
LIABILITIES AND PARTNERS’ CAPITAL
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
230.2
|
|
|
$
|
200.6
|
|
Accrued interest payable
|
32.0
|
|
|
30.7
|
|
||
Accrued salaries, wages and benefits
|
35.7
|
|
|
25.7
|
|
||
Other taxes payable
|
11.8
|
|
|
15.2
|
|
||
Obligations under inventory financing agreements
|
134.3
|
|
|
105.3
|
|
||
Other current liabilities
|
58.6
|
|
|
33.8
|
|
||
Current portion of operating lease liabilities
|
60.6
|
|
|
—
|
|
||
Current portion of long-term debt
|
1.8
|
|
|
3.8
|
|
||
Total current liabilities
|
565.0
|
|
|
415.1
|
|
||
Pension and postretirement benefit obligations
|
7.9
|
|
|
4.5
|
|
||
Other long-term liabilities
|
20.8
|
|
|
1.5
|
|
||
Long-term operating lease liabilities
|
33.0
|
|
|
—
|
|
||
Long-term debt, less current portion
|
1,209.5
|
|
|
1,600.7
|
|
||
Total liabilities
|
1,836.2
|
|
|
2,021.8
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Partners’ capital:
|
|
|
|
||||
Limited partners’ interest (77,560,355 units and 77,177,159 units, issued and outstanding at December 31, 2019 and 2018, respectively)
|
20.2
|
|
|
61.6
|
|
||
General partners’ interest
|
12.0
|
|
|
12.8
|
|
||
Accumulated other comprehensive loss
|
(10.6
|
)
|
|
(8.7
|
)
|
||
Total partners’ capital
|
21.6
|
|
|
65.7
|
|
||
Total liabilities and partners’ capital
|
$
|
1,857.8
|
|
|
$
|
2,087.5
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In millions, except unit and per unit data)
|
||||||||||
Sales
|
$
|
3,452.6
|
|
|
$
|
3,497.5
|
|
|
$
|
3,763.8
|
|
Cost of sales
|
3,000.9
|
|
|
3,060.8
|
|
|
3,265.6
|
|
|||
Gross profit
|
451.7
|
|
|
436.7
|
|
|
498.2
|
|
|||
Operating costs and expenses:
|
|
|
|
|
|
||||||
Selling
|
53.1
|
|
|
58.2
|
|
|
65.7
|
|
|||
General and administrative
|
136.7
|
|
|
122.5
|
|
|
138.7
|
|
|||
Transportation
|
122.9
|
|
|
137.2
|
|
|
137.1
|
|
|||
Taxes other than income taxes
|
20.5
|
|
|
18.1
|
|
|
24.1
|
|
|||
Loss on impairment and disposal of assets
|
37.0
|
|
|
—
|
|
|
207.3
|
|
|||
(Gain) loss on sale of business, net
|
8.7
|
|
|
(4.8
|
)
|
|
(236.0
|
)
|
|||
Other operating (income) expense
|
(3.5
|
)
|
|
(17.4
|
)
|
|
3.3
|
|
|||
Operating income
|
76.3
|
|
|
122.9
|
|
|
158.0
|
|
|||
|
|
|
|
|
|
||||||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(134.6
|
)
|
|
(155.5
|
)
|
|
(183.1
|
)
|
|||
Debt extinguishment costs
|
(2.2
|
)
|
|
(58.8
|
)
|
|
—
|
|
|||
Gain (loss) on derivative instruments
|
9.0
|
|
|
33.8
|
|
|
(9.6
|
)
|
|||
Gain (loss) from unconsolidated affiliates
|
3.8
|
|
|
(3.7
|
)
|
|
—
|
|
|||
Gain on sale of unconsolidated affiliates
|
1.2
|
|
|
0.2
|
|
|
—
|
|
|||
Other
|
3.4
|
|
|
10.8
|
|
|
3.3
|
|
|||
Total other expense
|
(119.4
|
)
|
|
(173.2
|
)
|
|
(189.4
|
)
|
|||
Net loss from continuing operations before income taxes
|
(43.1
|
)
|
|
(50.3
|
)
|
|
(31.4
|
)
|
|||
Income tax expense (benefit) from continuing operations
|
0.5
|
|
|
0.7
|
|
|
(0.1
|
)
|
|||
Net loss from continuing operations
|
(43.6
|
)
|
|
(51.0
|
)
|
|
(31.3
|
)
|
|||
Net loss from discontinued operations, net of income taxes
|
—
|
|
|
(4.1
|
)
|
|
(72.5
|
)
|
|||
Net loss
|
$
|
(43.6
|
)
|
|
$
|
(55.1
|
)
|
|
$
|
(103.8
|
)
|
Allocation of net loss:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(43.6
|
)
|
|
$
|
(55.1
|
)
|
|
$
|
(103.8
|
)
|
Less:
|
|
|
|
|
|
||||||
General partners’ interest in net loss
|
(0.9
|
)
|
|
(1.1
|
)
|
|
(2.1
|
)
|
|||
Net loss available to limited partners
|
$
|
(42.7
|
)
|
|
$
|
(54.0
|
)
|
|
$
|
(101.7
|
)
|
Weighted average limited partner units outstanding:
|
|
|
|
|
|
||||||
Basic and diluted
|
78,212,136
|
|
|
77,943,992
|
|
|
77,598,950
|
|
|||
Limited partners’ interest basic and diluted net loss per unit:
|
|
|
|
|
|
||||||
From continuing operations
|
$
|
(0.55
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
(0.40
|
)
|
From discontinued operations
|
—
|
|
|
(0.05
|
)
|
|
(0.91
|
)
|
|||
Limited partners’ interest
|
$
|
(0.55
|
)
|
|
$
|
(0.69
|
)
|
|
$
|
(1.31
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In millions)
|
||||||||||
Net loss
|
$
|
(43.6
|
)
|
|
$
|
(55.1
|
)
|
|
$
|
(103.8
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Cash flow hedges:
|
|
|
|
|
|
||||||
Cash flow hedge gain
|
0.2
|
|
|
—
|
|
|
—
|
|
|||
Defined benefit pension and retiree health benefit plans
|
(3.3
|
)
|
|
(1.5
|
)
|
|
1.1
|
|
|||
Foreign currency translation adjustment
|
1.2
|
|
|
—
|
|
|
—
|
|
|||
Total other comprehensive income (loss)
|
(1.9
|
)
|
|
(1.5
|
)
|
|
1.1
|
|
|||
Comprehensive loss attributable to partners’ capital
|
$
|
(45.5
|
)
|
|
$
|
(56.6
|
)
|
|
$
|
(102.7
|
)
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
|
Partners’ Capital
|
|
Total
|
||||||||||
|
|
General
Partner
|
|
Limited Partners
|
|||||||||||
|
|
|
|||||||||||||
|
(In millions)
|
||||||||||||||
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 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
|
|
Other comprehensive loss
|
(1.9
|
)
|
|
—
|
|
|
—
|
|
|
(1.9
|
)
|
||||
Net loss
|
—
|
|
|
(0.9
|
)
|
|
(42.7
|
)
|
|
(43.6
|
)
|
||||
Settlement of tax withholdings on equity-based incentive compensation
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
(0.5
|
)
|
||||
Amortization of phantom units
|
—
|
|
|
—
|
|
|
1.8
|
|
|
1.8
|
|
||||
Contributions from Calumet GP, LLC
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Balance at December 31, 2019
|
$
|
(10.6
|
)
|
|
$
|
12.0
|
|
|
$
|
20.2
|
|
|
$
|
21.6
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In millions)
|
||||||||||
Operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(43.6
|
)
|
|
$
|
(55.1
|
)
|
|
$
|
(103.8
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Net loss from discontinued operations
|
—
|
|
|
4.1
|
|
|
72.5
|
|
|||
Depreciation and amortization
|
110.1
|
|
|
118.1
|
|
|
154.8
|
|
|||
Amortization of turnaround costs
|
19.3
|
|
|
12.8
|
|
|
24.3
|
|
|||
Non-cash interest expense
|
6.1
|
|
|
7.9
|
|
|
10.2
|
|
|||
Debt extinguishment costs
|
2.2
|
|
|
58.8
|
|
|
—
|
|
|||
Unrealized (gain) loss on derivative instruments
|
26.1
|
|
|
(30.2
|
)
|
|
(3.6
|
)
|
|||
Loss on impairment and disposal of assets
|
37.0
|
|
|
—
|
|
|
207.3
|
|
|||
Operating lease expense
|
78.2
|
|
|
—
|
|
|
—
|
|
|||
Operating lease payments
|
(78.2
|
)
|
|
—
|
|
|
—
|
|
|||
Equity based compensation
|
5.9
|
|
|
(1.2
|
)
|
|
11.6
|
|
|||
Lower of cost or market inventory adjustment
|
(35.6
|
)
|
|
30.6
|
|
|
(30.6
|
)
|
|||
(Gain) loss from unconsolidated affiliates
|
(3.8
|
)
|
|
3.7
|
|
|
—
|
|
|||
Gain on sale of unconsolidated affiliates
|
(1.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|||
(Gain) loss on sale of business, net
|
8.7
|
|
|
(4.8
|
)
|
|
(236.0
|
)
|
|||
Other non-cash activities
|
(0.4
|
)
|
|
6.8
|
|
|
10.2
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(37.0
|
)
|
|
109.8
|
|
|
(158.9
|
)
|
|||
Inventories
|
16.3
|
|
|
(0.3
|
)
|
|
(8.5
|
)
|
|||
Prepaid expenses and other current assets
|
4.5
|
|
|
(4.5
|
)
|
|
(0.8
|
)
|
|||
Derivative activity
|
(0.3
|
)
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|||
Turnaround costs
|
(17.8
|
)
|
|
(27.9
|
)
|
|
(14.5
|
)
|
|||
Other assets
|
(0.1
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||
Accounts payable
|
71.3
|
|
|
(78.2
|
)
|
|
70.6
|
|
|||
Accrued interest payable
|
1.5
|
|
|
(21.8
|
)
|
|
0.9
|
|
|||
Accrued salaries, wages and benefits
|
5.3
|
|
|
(5.6
|
)
|
|
18.0
|
|
|||
Other taxes payable
|
2.5
|
|
|
(0.9
|
)
|
|
0.9
|
|
|||
Other liabilities
|
14.8
|
|
|
(45.4
|
)
|
|
(24.2
|
)
|
|||
Pension and postretirement benefit obligations
|
0.1
|
|
|
(0.1
|
)
|
|
(2.7
|
)
|
|||
Net cash provided by (used in) discontinued operating activities
|
—
|
|
|
(0.7
|
)
|
|
(23.2
|
)
|
|||
Net cash provided by (used in) operating activities
|
191.9
|
|
|
75.2
|
|
|
(26.5
|
)
|
|||
Investing activities
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
(54.9
|
)
|
|
(49.8
|
)
|
|
(70.0
|
)
|
|||
Investment in unconsolidated affiliates
|
—
|
|
|
(3.8
|
)
|
|
—
|
|
|||
Proceeds from sale of unconsolidated affiliates
|
5.0
|
|
|
9.9
|
|
|
—
|
|
|||
Proceeds from sale of property, plant and equipment
|
3.7
|
|
|
0.4
|
|
|
0.3
|
|
|||
Proceeds from sale of business, net
|
55.1
|
|
|
44.8
|
|
|
484.5
|
|
|||
Net cash provided by discontinued investing activities
|
5.6
|
|
|
6.8
|
|
|
38.6
|
|
|||
Net cash provided by investing activities
|
14.5
|
|
|
8.3
|
|
|
453.4
|
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from borrowings — revolving credit facility
|
508.5
|
|
|
174.5
|
|
|
901.2
|
|
|||
Repayments of borrowings — revolving credit facility
|
(508.5
|
)
|
|
(174.7
|
)
|
|
(911.2
|
)
|
|||
Proceeds from borrowings — senior notes
|
550.0
|
|
|
—
|
|
|
—
|
|
|||
Repayments of borrowings — senior notes
|
(898.5
|
)
|
|
(400.0
|
)
|
|
—
|
|
|||
Payments on finance lease obligations
|
(0.9
|
)
|
|
(1.6
|
)
|
|
(2.5
|
)
|
|||
Proceeds from inventory financing
|
1,076.5
|
|
|
1,135.3
|
|
|
671.6
|
|
|||
Payments on inventory financing
|
(1,057.3
|
)
|
|
(1,128.3
|
)
|
|
(571.5
|
)
|
|||
Proceeds from other financing obligations
|
—
|
|
|
4.7
|
|
|
—
|
|
|||
Payments on other financing obligations
|
(1.9
|
)
|
|
(2.5
|
)
|
|
(2.3
|
)
|
|||
Payments on extinguishment of debt
|
—
|
|
|
(46.6
|
)
|
|
—
|
|
|||
Debt issuance costs
|
(11.0
|
)
|
|
(3.0
|
)
|
|
(2.2
|
)
|
|||
Contributions from Calumet GP, LLC
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|||
Net cash provided by (used in) financing activities
|
(343.0
|
)
|
|
(442.1
|
)
|
|
83.2
|
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(136.6
|
)
|
|
(358.6
|
)
|
|
510.1
|
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
155.7
|
|
|
514.3
|
|
|
4.2
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
19.1
|
|
|
$
|
155.7
|
|
|
$
|
514.3
|
|
Cash and cash equivalents
|
$
|
19.1
|
|
|
$
|
155.7
|
|
|
$
|
164.3
|
|
Restricted cash
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
350.0
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Interest paid, net of capitalized interest
|
$
|
128.0
|
|
|
$
|
170.8
|
|
|
$
|
163.7
|
|
Income taxes paid
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
0.4
|
|
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
|
$
|
11.8
|
|
|
$
|
2.6
|
|
|
$
|
9.1
|
|
|
December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Beginning balance
|
$
|
1.5
|
|
|
$
|
7.0
|
|
|
$
|
0.9
|
|
Provision
|
(0.5
|
)
|
|
1.2
|
|
|
6.1
|
|
|||
Write-offs, net
|
(0.1
|
)
|
|
(6.7
|
)
|
|
—
|
|
|||
Ending balance
|
$
|
0.9
|
|
|
$
|
1.5
|
|
|
$
|
7.0
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Titled
Inventory |
|
Supply & Offtake
Agreements (1) |
|
Total
|
|
Titled
Inventory |
|
Supply & Offtake
Agreements (1) |
|
Total
|
||||||||||||
Raw materials
|
$
|
48.3
|
|
|
$
|
11.6
|
|
|
$
|
59.9
|
|
|
$
|
30.2
|
|
|
$
|
22.2
|
|
|
$
|
52.4
|
|
Work in process
|
35.0
|
|
|
29.1
|
|
|
64.1
|
|
|
39.7
|
|
|
19.2
|
|
|
58.9
|
|
||||||
Finished goods
|
124.8
|
|
|
43.8
|
|
|
168.6
|
|
|
128.9
|
|
|
43.9
|
|
|
172.8
|
|
||||||
|
$
|
208.1
|
|
|
$
|
84.5
|
|
|
$
|
292.6
|
|
|
$
|
198.8
|
|
|
$
|
85.3
|
|
|
$
|
284.1
|
|
|
(1)
|
Amounts represent LIFO value and do not necessarily represent the value at which the inventory was sold. Please read Note 9 - “Inventory Financing Agreements” for further information.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Land
|
$
|
8.3
|
|
|
$
|
10.6
|
|
Buildings and improvements (10 to 40 years)
|
37.4
|
|
|
36.8
|
|
||
Machinery and equipment (10 to 20 years)
|
1,607.3
|
|
|
1,641.7
|
|
||
Furniture, fixtures and software (5 to 10 years)
|
47.9
|
|
|
48.3
|
|
||
Assets under finance leases (1 to 7 years) (1)
|
10.3
|
|
|
21.9
|
|
||
Construction-in-progress
|
19.9
|
|
|
23.7
|
|
||
|
1,731.1
|
|
|
1,783.0
|
|
||
Less accumulated depreciation
|
(757.6
|
)
|
|
(684.9
|
)
|
||
|
$
|
973.5
|
|
|
$
|
1,098.1
|
|
|
(1)
|
Assets under finance leases consist of buildings and machinery and equipment. As of December 31, 2019 and 2018, finance lease assets are recorded net of accumulated amortization of $7.1 million and $6.7 million, respectively.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
RINs Obligation
|
$
|
13.0
|
|
|
$
|
15.8
|
|
Transition Services Agreement Payable
|
19.8
|
|
|
—
|
|
||
Net working capital adjustment liabilities
|
6.9
|
|
|
—
|
|
||
Other
|
18.9
|
|
|
18.0
|
|
||
Total other current liabilities
|
$
|
58.6
|
|
|
$
|
33.8
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Sales by major source
|
|
|
|
|
|
||||||
Standard specialty products
|
$
|
1,123.2
|
|
|
$
|
1,125.6
|
|
|
$
|
1,039.7
|
|
Packaged and synthetic specialty products
|
230.9
|
|
|
256.8
|
|
|
260.7
|
|
|||
Total specialty products
|
1,354.1
|
|
|
1,382.4
|
|
|
1,300.4
|
|
|||
Fuel and fuel related products
|
$
|
1,864.7
|
|
|
$
|
1,885.7
|
|
|
$
|
2,115.7
|
|
Asphalt
|
233.8
|
|
|
229.4
|
|
|
347.7
|
|
|||
Total fuel products
|
2,098.5
|
|
|
2,115.1
|
|
|
2,463.4
|
|
|||
Total sales
|
$
|
3,452.6
|
|
|
$
|
3,497.5
|
|
|
$
|
3,763.8
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
228.6
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
(168.1
|
)
|
|||
Selling
|
—
|
|
|
—
|
|
|
(45.9
|
)
|
|||
General and administrative
|
—
|
|
|
—
|
|
|
(4.5
|
)
|
|||
Loss on sale of business, net
|
—
|
|
|
(4.1
|
)
|
|
(62.6
|
)
|
|||
Other
|
—
|
|
|
—
|
|
|
(21.0
|
)
|
|||
Net loss from discontinued operations before income taxes
|
$
|
—
|
|
|
$
|
(4.1
|
)
|
|
$
|
(73.5
|
)
|
Income tax benefit
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|||
Net loss from discontinued operations net of income taxes
|
$
|
—
|
|
|
$
|
(4.1
|
)
|
|
$
|
(72.5
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Sales
|
$
|
403.4
|
|
|
$
|
444.2
|
|
|
$
|
347.1
|
|
Gross profit
|
16.2
|
|
|
(4.5
|
)
|
|
(7.3
|
)
|
|||
Net loss before income taxes
|
$
|
(3.9
|
)
|
|
$
|
(23.7
|
)
|
|
$
|
(168.7
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
669.1
|
|
Gross profit
|
—
|
|
|
—
|
|
|
110.0
|
|
|||
Net income before income taxes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99.3
|
|
•
|
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 |
|||
Net balance as of December 31, 2017
|
$
|
171.4
|
|
|
Impairment (1)
|
—
|
|
||
Net balance as of December 31, 2018
|
$
|
171.4
|
|
|
Impairment (1)
|
—
|
|
||
Net balance as of December 31, 2019
|
$
|
171.4
|
|
|
(1)
|
Total accumulated goodwill impairment as of December 31, 2019 and 2018, is $35.5 million.
|
|
Weighted Average Life (Years)
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Gross Amount
|
|
Accumulated Amortization
|
|||||||||
Customer relationships
|
22
|
|
$
|
181.3
|
|
|
$
|
(130.6
|
)
|
|
$
|
181.3
|
|
|
$
|
(120.1
|
)
|
Tradenames
|
11
|
|
26.8
|
|
|
(18.7
|
)
|
|
26.8
|
|
|
(16.4
|
)
|
||||
Trade secrets
|
13
|
|
52.7
|
|
|
(43.4
|
)
|
|
52.7
|
|
|
(39.7
|
)
|
||||
Patents
|
12
|
|
1.6
|
|
|
(1.6
|
)
|
|
1.6
|
|
|
(1.6
|
)
|
||||
Royalty agreements
|
20
|
|
6.1
|
|
|
(3.0
|
)
|
|
6.1
|
|
|
(2.7
|
)
|
||||
|
19
|
|
$
|
268.5
|
|
|
$
|
(197.3
|
)
|
|
$
|
268.5
|
|
|
$
|
(180.5
|
)
|
Year
|
Amortization Amount
|
||
2020
|
$
|
14.0
|
|
2021
|
$
|
11.5
|
|
2022
|
$
|
9.5
|
|
2023
|
$
|
7.7
|
|
2024
|
$
|
6.5
|
|
Year
|
Commitment
|
||
2020
|
$
|
170.8
|
|
2021
|
30.0
|
|
|
2022
|
30.2
|
|
|
2023
|
21.0
|
|
|
2024
|
21.1
|
|
|
Thereafter
|
42.0
|
|
|
Total
|
$
|
315.1
|
|
Year
|
Commitment (1)
|
||
2020
|
$
|
2.6
|
|
2021
|
3.9
|
|
|
2022
|
3.9
|
|
|
2023
|
3.9
|
|
|
2024
|
4.0
|
|
|
Thereafter
|
9.4
|
|
|
Total (1)
|
$
|
27.7
|
|
|
(1)
|
As of December 31, 2019, the estimated minimum payments for the unconditional purchase commitments have been accrued and are included in other current liabilities and other long-term liabilities in the consolidated balance sheets.
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
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 4.3% and 6.0% at December 31, 2019 and 2018, respectively
|
$
|
—
|
|
|
$
|
—
|
|
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, 2019 and 2018
|
—
|
|
|
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 8.1% and 8.0% for the year ended December 31, 2019 and December 31, 2018, respectively (1)
|
351.1
|
|
|
351.6
|
|
||
Borrowings under 2023 Notes, interest at a fixed rate of 7.75%, interest payments semiannually, borrowings due April 2023, effective interest rate of 8.1% and 8.0% for the year ended December 31, 2019 and December 31, 2018, respectively
|
325.0
|
|
|
325.0
|
|
||
Borrowings under 2025 Notes, interest at a fixed rate of 11.0%, interest payments semiannually, borrowings due April 2025, effective interest rate of 11.2% for the year ended December 31, 2019
|
550.0
|
|
|
—
|
|
||
Other
|
3.8
|
|
|
5.2
|
|
||
Finance lease obligation, at a fixed interest rate, interest and principal payments monthly through January 2027
|
2.7
|
|
|
42.4
|
|
||
Less unamortized debt issuance costs (2)
|
(18.4
|
)
|
|
(15.8
|
)
|
||
Less unamortized discounts
|
(2.9
|
)
|
|
(3.9
|
)
|
||
Total long-term debt
|
1,211.3
|
|
|
1,604.5
|
|
||
Less current portion of long-term debt
|
1.8
|
|
|
3.8
|
|
||
|
$
|
1,209.5
|
|
|
$
|
1,600.7
|
|
|
(1)
|
The balance includes a fair value interest rate hedge adjustment, which increased the debt balance by $1.1 million and $1.6 million as of December 31, 2019 and 2018, 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 $15.7 million and $23.5 million at December 31, 2019 and 2018, respectively.
|
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
|
Maturity
|
||
2020
|
$
|
1.8
|
|
2021
|
2.6
|
|
|
2022
|
350.3
|
|
|
2023
|
325.4
|
|
|
2024
|
0.4
|
|
|
Thereafter
|
551.0
|
|
|
Total
|
$
|
1,231.5
|
|
•
|
crude oil purchases and sales;
|
•
|
fuel product sales and 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”), Western Canadian Select (“WCS”), WTI Midland, Mixed Sweet Blend and ICE Brent.
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
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
|
$
|
(7.2
|
)
|
|
$
|
—
|
|
|
$
|
(7.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
WCS crude oil basis swaps
|
Derivative liabilities
|
(1.3
|
)
|
|
1.3
|
|
|
—
|
|
|
(1.6
|
)
|
|
1.6
|
|
|
—
|
|
||||||
WCS crude oil percentage basis swaps
|
Derivative liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|
6.1
|
|
|
—
|
|
||||||
Gasoline crack spread swaps
|
Derivative liabilities
|
(0.5
|
)
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Diesel crack spread swaps
|
Derivative liabilities
|
(0.5
|
)
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Diesel percentage basis crack spread swaps
|
Derivative liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|
6.0
|
|
|
—
|
|
||||||
Total derivative instruments
|
|
$
|
(9.5
|
)
|
|
$
|
2.3
|
|
|
$
|
(7.2
|
)
|
|
$
|
(13.7
|
)
|
|
$
|
13.7
|
|
|
$
|
—
|
|
|
Amount of Gain (Loss)
Recognized in Realized
Gain on Derivative
Instruments
|
|
Amount of Gain (Loss)
Recognized in Unrealized
Gain (Loss) on Derivative Instruments
|
||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||
Type of Derivative
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Specialty products segment:
|
|
|
|
|
|
|
|
||||||||
Midland crude oil basis swaps
|
1.6
|
|
|
0.9
|
|
|
(1.0
|
)
|
|
1.0
|
|
||||
Fuel products segment:
|
|
|
|
|
|
|
|
||||||||
Inventory financing obligation
|
—
|
|
|
—
|
|
|
(8.7
|
)
|
|
5.9
|
|
||||
Crude oil swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
||||
WCS crude oil basis swaps
|
14.7
|
|
|
(1.8
|
)
|
|
(16.2
|
)
|
|
14.9
|
|
||||
WCS crude oil percentage basis swaps
|
1.0
|
|
|
—
|
|
|
6.0
|
|
|
(6.1
|
)
|
||||
Midland crude oil basis swaps
|
11.3
|
|
|
6.0
|
|
|
(7.1
|
)
|
|
7.1
|
|
||||
Gasoline swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
Gasoline crack spread swaps
|
0.1
|
|
|
(1.0
|
)
|
|
1.3
|
|
|
1.8
|
|
||||
Diesel swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
Diesel crack spread swaps
|
6.3
|
|
|
(0.7
|
)
|
|
(6.9
|
)
|
|
11.5
|
|
||||
Diesel percentage basis crack spread swaps
|
—
|
|
|
—
|
|
|
6.0
|
|
|
(6.0
|
)
|
||||
2/1/1 crack spread swaps
|
0.1
|
|
|
0.2
|
|
|
0.5
|
|
|
—
|
|
||||
Total
|
$
|
35.1
|
|
|
$
|
3.6
|
|
|
$
|
(26.1
|
)
|
|
$
|
30.2
|
|
WCS Crude Oil Basis Swap Contracts by Expiration Dates
|
Barrels Purchased
|
|
BPD
|
|
Average Differential to NYMEX WTI
($/Bbl) |
||||
First Quarter 2020
|
544,000
|
|
|
5,978
|
|
|
$
|
(18.92
|
)
|
Total
|
544,000
|
|
|
|
|
|
|||
Average differential
|
|
|
|
|
$
|
(18.92
|
)
|
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/Bbl)
|
|||
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 differential
|
|
|
|
|
$
|
(12.27
|
)
|
Gasoline Crack Spread Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2020
|
591,500
|
|
|
6,500
|
|
|
$
|
12.54
|
|
Second Quarter 2020
|
379,000
|
|
|
4,165
|
|
|
$
|
16.41
|
|
Third Quarter 2020
|
368,000
|
|
|
4,000
|
|
|
$
|
15.24
|
|
Fourth Quarter 2020
|
368,000
|
|
|
4,000
|
|
|
$
|
9.77
|
|
Total
|
1,706,500
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
13.38
|
|
Diesel Crack Spread Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2020
|
500,500
|
|
|
5,500
|
|
|
$
|
22.15
|
|
Second Quarter 2020
|
379,000
|
|
|
4,165
|
|
|
$
|
21.68
|
|
Third Quarter 2020
|
368,000
|
|
|
4,000
|
|
|
$
|
22.23
|
|
Fourth Quarter 2020
|
368,000
|
|
|
4,000
|
|
|
$
|
21.91
|
|
Total
|
1,615,500
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
22.00
|
|
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 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
|
%
|
2/1/1 Crack Spread Swap Contracts by Expiration Dates
|
Barrels Sold
|
|
BPD
|
|
Average Swap
($/Bbl) |
||||
First Quarter 2020
|
364,000
|
|
|
4,000
|
|
|
$
|
17.43
|
|
Second Quarter 2020
|
30,000
|
|
|
330
|
|
|
$
|
19.50
|
|
Total
|
394,000
|
|
|
|
|
|
|||
Average price
|
|
|
|
|
$
|
17.58
|
|
•
|
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, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
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
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
14.9
|
|
|
14.9
|
|
||||||||
WCS crude oil percentage basis swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|
(6.1
|
)
|
||||||||
Midland crude oil basis swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.1
|
|
|
8.1
|
|
||||||||
Gasoline crack spread swaps
|
—
|
|
|
—
|
|
|
1.3
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Diesel crack spread swaps
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
|
7.4
|
|
||||||||
Diesel percentage basis crack spread swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|
(6.0
|
)
|
||||||||
2/1/1 Crack spread swaps
|
—
|
|
|
—
|
|
|
0.5
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total derivative assets
|
—
|
|
|
—
|
|
|
0.9
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
19.8
|
|
|
19.8
|
|
||||||||
Pension Plan investments
|
32.5
|
|
|
—
|
|
|
—
|
|
|
32.5
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||||
Total recurring assets at fair value
|
$
|
32.5
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
33.4
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
19.8
|
|
|
$
|
19.9
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Inventory financing obligation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7.2
|
)
|
|
$
|
(7.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total derivative liabilities
|
—
|
|
|
—
|
|
|
(7.2
|
)
|
|
(7.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
RINs obligation
|
—
|
|
|
(13.0
|
)
|
|
—
|
|
|
(13.0
|
)
|
|
—
|
|
|
(15.8
|
)
|
|
—
|
|
|
(15.8
|
)
|
||||||||
Precious metals leases
|
(5.8
|
)
|
|
—
|
|
|
—
|
|
|
(5.8
|
)
|
|
(5.6
|
)
|
|
—
|
|
|
—
|
|
|
(5.6
|
)
|
||||||||
Liability Awards
|
(7.4
|
)
|
|
—
|
|
|
—
|
|
|
(7.4
|
)
|
|
(2.7
|
)
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
||||||||
Total recurring liabilities at fair value
|
$
|
(13.2
|
)
|
|
$
|
(13.0
|
)
|
|
$
|
(7.2
|
)
|
|
$
|
(33.4
|
)
|
|
$
|
(8.3
|
)
|
|
$
|
(15.8
|
)
|
|
$
|
—
|
|
|
$
|
(24.1
|
)
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Fair value at January 1,
|
$
|
19.8
|
|
|
$
|
(10.4
|
)
|
Realized gain on derivative instruments
|
(35.1
|
)
|
|
(3.6
|
)
|
||
Unrealized gain (loss) on derivative instruments
|
(26.1
|
)
|
|
30.2
|
|
||
Settlements
|
35.1
|
|
|
3.6
|
|
||
Fair value at December 31,
|
$
|
(6.3
|
)
|
|
$
|
19.8
|
|
Total gain (loss) included in net loss attributable to changes in unrealized gain (loss) relating to financial assets and liabilities held as of December 31,
|
$
|
(26.1
|
)
|
|
$
|
30.2
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Level
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
Financial Instrument:
|
|
|
|
|
|
|
|
|
||||||||
2022 and 2023 Senior notes
|
1
|
$
|
676.4
|
|
|
$
|
668.1
|
|
|
$
|
1,287.4
|
|
|
$
|
1,560.7
|
|
2025 Senior notes
|
2
|
$
|
598.8
|
|
|
$
|
540.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Finance leases and other obligations
|
3
|
$
|
6.5
|
|
|
$
|
6.5
|
|
|
$
|
47.6
|
|
|
$
|
47.6
|
|
•
|
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 Company’s limited partners. Limited partners have no right to elect the board of directors of the Company’s general partner.
|
•
|
The vote of the holders of at least 66 2/3% of all outstanding units voting together as a single class is required to remove the general partner. Any holder, other than the general partner or the general partner’s affiliates, that owns 20% or more of any class of units outstanding cannot vote on any matter.
|
•
|
The Company may issue an unlimited number of limited partner interests without the approval of the limited partners.
|
•
|
Limited partners may be required to sell their units to the general partner if at any time the general partner owns more than 80% of the issued and outstanding common units.
|
|
Total Quarterly
Distribution Per Common Unit
|
|
Marginal Percentage
Interest in Distributions
|
||||
|
Target Amount
|
|
Unitholders
|
|
General Partner
|
||
Minimum Quarterly Distribution
|
$0.45
|
|
98
|
%
|
|
2
|
%
|
First Target Distribution
|
up to $0.495
|
|
98
|
%
|
|
2
|
%
|
Second Target Distribution
|
above $0.495 up to $0.563
|
|
85
|
%
|
|
15
|
%
|
Third Target Distribution
|
above $0.563 up to $0.675
|
|
75
|
%
|
|
25
|
%
|
Thereafter
|
above $0.675
|
|
50
|
%
|
|
50
|
%
|
|
Number of
Phantom Units
|
|
Weighted-Average
Grant Date
Fair Value
|
|||
Non-vested at January 1, 2017
|
754,833
|
|
|
$
|
9.58
|
|
Granted
|
2,753,507
|
|
|
4.10
|
|
|
Vested
|
(925,199
|
)
|
|
7.30
|
|
|
Forfeited
|
(47,363
|
)
|
|
9.73
|
|
|
Non-vested 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
|
|
|
Non-vested at December 31, 2018
|
2,270,507
|
|
|
$
|
5.71
|
|
Granted
|
1,653,340
|
|
|
3.01
|
|
|
Vested
|
(883,511
|
)
|
|
4.28
|
|
|
Forfeited
|
(139,048
|
)
|
|
4.10
|
|
|
Non-vested at December 31, 2019
|
2,901,288
|
|
|
$
|
5.21
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
401(k) Plan matching contribution expense
|
$
|
5.9
|
|
|
$
|
5.4
|
|
|
$
|
5.7
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Change in projected benefit obligation:
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
35.6
|
|
|
$
|
38.3
|
|
Service cost
|
—
|
|
|
0.1
|
|
||
Interest cost
|
1.5
|
|
|
1.3
|
|
||
Benefit payments
|
(2.4
|
)
|
|
(1.6
|
)
|
||
Actuarial (gain) loss
|
5.5
|
|
|
(2.5
|
)
|
||
Benefit obligation at end of year
|
$
|
40.2
|
|
|
$
|
35.6
|
|
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
31.3
|
|
|
$
|
35.4
|
|
Benefit payments
|
(2.4
|
)
|
|
(1.6
|
)
|
||
Actual return on assets
|
3.6
|
|
|
(2.5
|
)
|
||
Fair value of plan assets at end of year
|
$
|
32.5
|
|
|
$
|
31.3
|
|
Funded status — benefit obligation in excess of plan assets
|
$
|
(7.7
|
)
|
|
$
|
(4.3
|
)
|
Reconciliation of amounts recognized in the consolidated balance sheets:
|
|
|
|
||||
Accrued benefit obligation, long-term
|
$
|
(7.7
|
)
|
|
$
|
(4.3
|
)
|
Unrecognized net actuarial loss
|
10.8
|
|
|
7.5
|
|
||
Accumulated other comprehensive loss
|
10.8
|
|
|
7.5
|
|
||
Net amount recognized at end of year
|
$
|
3.1
|
|
|
$
|
3.2
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Accumulated and projected benefit obligation
|
$
|
40.2
|
|
|
$
|
35.6
|
|
Fair value of plan assets
|
$
|
32.5
|
|
|
$
|
31.3
|
|
|
Pension Plan
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Service cost
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Interest cost
|
1.5
|
|
|
1.3
|
|
|
2.3
|
|
|||
Expected return on assets
|
(1.5
|
)
|
|
(1.7
|
)
|
|
(2.9
|
)
|
|||
Amortization of net loss
|
—
|
|
|
0.1
|
|
|
0.2
|
|
|||
Settlement loss recognized
|
0.2
|
|
|
—
|
|
|
0.7
|
|
|||
Net periodic benefit cost (income)
|
$
|
0.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.4
|
|
|
Pension Plan
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss:
|
|
|
|
|
|
||||||
Net (gain) loss
|
$
|
3.5
|
|
|
$
|
1.6
|
|
|
$
|
(0.2
|
)
|
Amounts recognized as a component of net periodic benefit cost:
|
|
|
|
|
|
||||||
Amortization of actual gains
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.9
|
)
|
|||
Total recognized in other comprehensive (income) loss
|
$
|
3.3
|
|
|
$
|
1.5
|
|
|
$
|
(1.1
|
)
|
|
Benefit Obligations
Assumptions
|
||||
|
2019
|
|
2018
|
||
Discount rate for Penreco Pension Plan
|
3.15
|
%
|
|
4.18
|
%
|
Discount rate for Great Falls Pension Plan
|
3.14
|
%
|
|
4.16
|
%
|
|
Net Periodic Benefit (Income) Cost
Assumptions
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Discount rate for Penreco Pension Plan
|
4.18
|
%
|
|
3.56
|
%
|
|
4.08
|
%
|
Discount rate for Superior Pension Plan
|
—
|
|
|
—
|
%
|
|
4.06
|
%
|
Discount rate for Great Falls Pension Plan
|
4.16
|
%
|
|
3.54
|
%
|
|
4.04
|
%
|
Expected return on plan assets for Penreco Pension Plan (1)
|
5.00
|
%
|
|
5.00
|
%
|
|
6.35
|
%
|
Expected return on plan assets Superior Pension Plan (1)
|
—
|
|
|
—
|
%
|
|
6.35
|
%
|
Expected return on plan assets for Great Falls Pension Plan (1)
|
5.00
|
%
|
|
5.00
|
%
|
|
6.35
|
%
|
|
(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 |
Equity funds
|
20–50%
|
|
40%
|
Fixed income
|
50–80%
|
|
60%
|
|
2019
|
|
2018
|
||
Cash and cash equivalents
|
1
|
%
|
|
—
|
%
|
Equity funds
|
27
|
%
|
|
—
|
%
|
Balanced funds
|
4
|
%
|
|
—
|
%
|
Domestic equities
|
—
|
%
|
|
10
|
%
|
Foreign equities
|
—
|
%
|
|
11
|
%
|
Fixed income
|
68
|
%
|
|
79
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Fair Value of Pension Assets at December 31,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Level 1
|
|
Total
|
|
Level 1
|
|
Total
|
||||||||
Cash and cash equivalents
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Fixed income
|
22.2
|
|
|
22.2
|
|
|
—
|
|
|
—
|
|
||||
Equity funds
|
8.8
|
|
|
8.8
|
|
|
—
|
|
|
—
|
|
||||
Balanced funds
|
1.2
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
||||
Total plan assets subject to leveling
|
$
|
32.5
|
|
|
$
|
32.5
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Plan assets measured at net asset value
|
|
|
|
|
|
|
|
||||||||
Domestic equities
|
|
|
—
|
|
|
|
|
3.2
|
|
||||||
Foreign equities
|
|
|
—
|
|
|
|
|
3.4
|
|
||||||
Fixed income
|
|
|
—
|
|
|
|
|
24.6
|
|
||||||
Total plan assets measured at net asset value
|
|
|
—
|
|
|
|
|
31.2
|
|
||||||
Total plan assets
|
|
|
$
|
32.5
|
|
|
|
|
|
$
|
31.3
|
|
|
Pension Benefits
|
||
2020
|
$
|
1.9
|
|
2021
|
2.0
|
|
|
2022
|
2.0
|
|
|
2023
|
2.2
|
|
|
2024
|
2.1
|
|
|
2025 to 2029
|
11.7
|
|
|
Total
|
$
|
21.9
|
|
|
Derivatives
|
|
Defined Benefit Pension And Retiree Health Benefit Plans
|
|
Foreign Currency Translation Adjustment
|
|
Total
|
||||||||
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
|
)
|
Other comprehensive gain (loss) before reclassifications
|
0.2
|
|
|
(3.5
|
)
|
|
—
|
|
|
(3.3
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
0.2
|
|
|
1.2
|
|
|
1.4
|
|
||||
Net current period other comprehensive income (loss)
|
0.2
|
|
|
(3.3
|
)
|
|
1.2
|
|
|
(1.9
|
)
|
||||
Accumulated other comprehensive income (loss) at December 31, 2019
|
$
|
0.2
|
|
|
$
|
(10.8
|
)
|
|
$
|
—
|
|
|
$
|
(10.6
|
)
|
Components of Accumulated Other Comprehensive Loss
|
2019
|
|
2018
|
|
Location of Loss
|
||||
Amortization of defined benefit pension plan net loss
|
$
|
(0.2
|
)
|
|
$
|
(0.1
|
)
|
|
(1)
|
Realized loss on foreign currency translation adjustment
|
(1.2
|
)
|
|
—
|
|
|
Other income (expense)
|
||
|
$
|
(1.4
|
)
|
|
$
|
(0.1
|
)
|
|
Total
|
|
(1)
|
This accumulated other comprehensive loss component is included in the computation of net periodic pension cost. Please read Note 15 - “Employee Benefit Plans” for additional information.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator for basic and diluted earnings per limited partner unit:
|
|
|
|
|
|
||||||
Net loss from continuing operations
|
$
|
(43.6
|
)
|
|
$
|
(51.0
|
)
|
|
$
|
(31.3
|
)
|
Less:
|
|
|
|
|
|
||||||
General partner’s interest in net loss from continuing operations
|
(0.9
|
)
|
|
(1.0
|
)
|
|
(0.6
|
)
|
|||
Net loss from continuing operations available to limited partners
|
$
|
(42.7
|
)
|
|
$
|
(50.0
|
)
|
|
$
|
(30.7
|
)
|
Net loss from discontinued operations available to limited partners
|
—
|
|
|
(4.0
|
)
|
|
(71.0
|
)
|
|||
Net loss available to limited partners
|
$
|
(42.7
|
)
|
|
$
|
(54.0
|
)
|
|
$
|
(101.7
|
)
|
Denominator for basic and diluted earnings per limited partner unit:
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding (1)
|
78,212,136
|
|
|
77,943,992
|
|
|
77,598,950
|
|
|||
Limited partners’ interest basic and diluted net loss per unit:
|
|
|
|
|
|
||||||
From continuing operations
|
$
|
(0.55
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
(0.40
|
)
|
From discontinued operations
|
—
|
|
|
(0.05
|
)
|
|
(0.91
|
)
|
|||
Limited partners’ interest
|
$
|
(0.55
|
)
|
|
$
|
(0.69
|
)
|
|
$
|
(1.31
|
)
|
|
(1)
|
Total diluted weighted average limited partner units outstanding includes 0.1 million of potentially dilutive phantom units which would have been anti-dilutive for the year ended December 31, 2019 and 0.2 million potentially dilutive phantom units which would be anti-dilutive in the years ended December 31, 2018 and 2017.
|
•
|
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 3 and PADD 4 areas within the U.S.
|
•
|
Corporate. The corporate segment primarily consists of general and administrative expenses not allocated to the specialty products or fuel products segments.
|
Year Ended December 31, 2019
|
Specialty
Products
|
|
Fuel
Products (1)
|
|
Corporate
|
|
Eliminations
|
|
Consolidated
Total
|
||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
External customers
|
$
|
1,354.1
|
|
|
$
|
2,098.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,452.6
|
|
Inter-segment sales
|
93.2
|
|
|
47.7
|
|
|
—
|
|
|
(140.9
|
)
|
|
—
|
|
|||||
Total sales
|
$
|
1,447.3
|
|
|
$
|
2,146.2
|
|
|
$
|
—
|
|
|
$
|
(140.9
|
)
|
|
$
|
3,452.6
|
|
Income from unconsolidated affiliates
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
|
$
|
220.2
|
|
|
$
|
182.0
|
|
|
$
|
(97.6
|
)
|
|
$
|
—
|
|
|
$
|
304.6
|
|
Reconciling items to net loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
47.1
|
|
|
74.7
|
|
|
7.6
|
|
|
—
|
|
|
129.4
|
|
|||||
Loss on impairment and disposal of assets
|
—
|
|
|
11.6
|
|
|
25.4
|
|
|
—
|
|
|
37.0
|
|
|||||
Loss on sale of business, net
|
—
|
|
|
8.7
|
|
|
—
|
|
|
—
|
|
|
8.7
|
|
|||||
Interest expense
|
—
|
|
|
16.3
|
|
|
118.3
|
|
|
—
|
|
|
134.6
|
|
|||||
Debt extinguishment costs
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.2
|
|
|||||
Unrealized loss on derivatives
|
1.0
|
|
|
25.1
|
|
|
—
|
|
|
—
|
|
|
26.1
|
|
|||||
Gain on sale of unconsolidated affiliate
|
(1.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.2
|
)
|
|||||
Other non-recurring expenses
|
|
|
|
|
|
|
|
|
3.5
|
|
|||||||||
Equity based compensation and other items
|
|
|
|
|
|
|
|
|
7.4
|
|
|||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
0.5
|
|
|||||||||
Net loss from continuing operations
|
|
|
|
|
|
|
|
|
$
|
(43.6
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2018
|
Specialty
Products
|
|
Fuel
Products
|
|
Corporate
|
|
Eliminations
|
|
Consolidated
Total
|
||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
External customers
|
$
|
1,382.4
|
|
|
$
|
2,115.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,497.5
|
|
Inter-segment sales
|
98.1
|
|
|
81.3
|
|
|
—
|
|
|
(179.4
|
)
|
|
—
|
|
|||||
Total sales
|
$
|
1,480.5
|
|
|
$
|
2,196.4
|
|
|
$
|
—
|
|
|
$
|
(179.4
|
)
|
|
$
|
3,497.5
|
|
Loss from unconsolidated affiliates
|
$
|
(3.7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3.7
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
|
$
|
162.2
|
|
|
$
|
199.2
|
|
|
$
|
(97.5
|
)
|
|
$
|
—
|
|
|
$
|
263.9
|
|
Reconciling items to net loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
50.1
|
|
|
72.2
|
|
|
8.6
|
|
|
—
|
|
|
130.9
|
|
|||||
Gain on sale of business, net
|
—
|
|
|
4.8
|
|
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
|||||
Interest expense
|
0.2
|
|
|
23.1
|
|
|
132.2
|
|
|
—
|
|
|
155.5
|
|
|||||
Debt extinguishment costs
|
—
|
|
|
—
|
|
|
58.8
|
|
|
—
|
|
|
58.8
|
|
|||||
Unrealized gain on derivatives
|
(1.0
|
)
|
|
(29.2
|
)
|
|
—
|
|
|
—
|
|
|
(30.2
|
)
|
|||||
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 |
|
Corporate
|
|
Eliminations
|
|
Consolidated
Total |
||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
External customers
|
$
|
1,300.4
|
|
|
$
|
2,463.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,763.8
|
|
Inter-segment sales
|
78.1
|
|
|
63.0
|
|
|
—
|
|
|
(141.1
|
)
|
|
—
|
|
|||||
Total sales
|
$
|
1,378.5
|
|
|
$
|
2,526.4
|
|
|
$
|
—
|
|
|
$
|
(141.1
|
)
|
|
$
|
3,763.8
|
|
Loss from unconsolidated affiliates
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
|
$
|
188.3
|
|
|
$
|
225.8
|
|
|
$
|
(99.8
|
)
|
|
$
|
—
|
|
|
$
|
314.3
|
|
Reconciling items to net loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
69.1
|
|
|
106.4
|
|
|
3.6
|
|
|
—
|
|
|
179.1
|
|
|||||
Loss on impairment and disposal of assets
|
60.3
|
|
|
147.0
|
|
|
—
|
|
|
—
|
|
|
207.3
|
|
|||||
Gain on sale of business, net
|
—
|
|
|
(236.0
|
)
|
|
—
|
|
|
—
|
|
|
(236.0
|
)
|
|||||
Interest expense
|
(1.7
|
)
|
|
12.8
|
|
|
172.0
|
|
|
—
|
|
|
183.1
|
|
|||||
Unrealized gain on derivatives
|
(1.0
|
)
|
|
(2.6
|
)
|
|
—
|
|
|
—
|
|
|
(3.6
|
)
|
|||||
Equity-based compensation and other items
|
|
|
|
|
|
|
|
|
15.8
|
|
|||||||||
Income tax benefit
|
|
|
|
|
|
|
|
|
(0.1
|
)
|
|||||||||
Net loss from continuing operations
|
|
|
|
|
|
|
|
|
$
|
(31.3
|
)
|
|
(1)
|
Adjusted EBITDA for the Fuel Products segment for the year ended December 31, 2019 included a $6.5 million gain recorded in cost of sales in the consolidated statements of operations for proceeds received under the Company’s business interruption insurance policy. The Company incurred business losses due to increased costs arising from a 2012 pipeline rupture in northwest Louisiana. As a result, the Company filed a contingent business interruption claim. Specifically, the losses included a loss of throughput at the Shreveport refinery and additional crude transportation expenses.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
Specialty products:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Lubricating oils
|
$
|
593.1
|
|
|
17.2
|
%
|
|
$
|
600.1
|
|
|
17.2
|
%
|
|
$
|
584.2
|
|
|
15.5
|
%
|
Solvents
|
325.9
|
|
|
9.4
|
%
|
|
331.9
|
|
|
9.5
|
%
|
|
274.4
|
|
|
7.3
|
%
|
|||
Waxes
|
119.3
|
|
|
3.4
|
%
|
|
117.0
|
|
|
3.3
|
%
|
|
117.2
|
|
|
3.1
|
%
|
|||
Packaged and synthetic specialty products
|
230.8
|
|
|
6.7
|
%
|
|
256.8
|
|
|
7.3
|
%
|
|
260.7
|
|
|
6.9
|
%
|
|||
Other
|
85.0
|
|
|
2.5
|
%
|
|
76.6
|
|
|
2.2
|
%
|
|
63.9
|
|
|
1.7
|
%
|
|||
Total
|
1,354.1
|
|
|
39.2
|
%
|
|
1,382.4
|
|
|
39.5
|
%
|
|
1,300.4
|
|
|
34.5
|
%
|
|||
Fuel products:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gasoline
|
679.6
|
|
|
19.7
|
%
|
|
683.1
|
|
|
19.5
|
%
|
|
948.5
|
|
|
25.2
|
%
|
|||
Diesel
|
859.1
|
|
|
24.9
|
%
|
|
910.0
|
|
|
26.0
|
%
|
|
877.9
|
|
|
23.4
|
%
|
|||
Jet fuel
|
134.6
|
|
|
3.9
|
%
|
|
100.1
|
|
|
2.9
|
%
|
|
135.0
|
|
|
3.6
|
%
|
|||
Asphalt, heavy fuel oils and other
|
425.2
|
|
|
12.3
|
%
|
|
421.9
|
|
|
12.1
|
%
|
|
502.0
|
|
|
13.3
|
%
|
|||
Total
|
2,098.5
|
|
|
60.8
|
%
|
|
2,115.1
|
|
|
60.5
|
%
|
|
2,463.4
|
|
|
65.5
|
%
|
|||
Consolidated sales
|
$
|
3,452.6
|
|
|
100.0
|
%
|
|
$
|
3,497.5
|
|
|
100.0
|
%
|
|
$
|
3,763.8
|
|
|
100.0
|
%
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total (1)
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
851.3
|
|
|
$
|
896.9
|
|
|
$
|
929.6
|
|
|
$
|
774.8
|
|
|
$
|
3,452.6
|
|
Gross profit
|
136.0
|
|
|
107.1
|
|
|
117.8
|
|
|
90.8
|
|
|
451.7
|
|
|||||
Net income (loss) from continuing operations
|
16.4
|
|
|
(16.8
|
)
|
|
(4.6
|
)
|
|
(38.6
|
)
|
|
(43.6
|
)
|
|||||
Net income (loss)
|
16.4
|
|
|
(16.8
|
)
|
|
(4.6
|
)
|
|
(38.6
|
)
|
|
(43.6
|
)
|
|||||
Net income (loss) available to limited partners
|
16.0
|
|
|
(16.5
|
)
|
|
(4.5
|
)
|
|
(37.8
|
)
|
|
(42.7
|
)
|
|||||
Limited partners’ interest basic and diluted net income (loss) per unit:
|
|
|
|
|
|
|
|
|
|
||||||||||
From continuing operations
|
$
|
0.20
|
|
|
$
|
(0.21
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.55
|
)
|
Limited partners’ interest
|
$
|
0.20
|
|
|
$
|
(0.21
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.55
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic weighted average limited partner units outstanding
|
78,111,551
|
|
|
78,212,837
|
|
|
78,299,472
|
|
|
78,332,671
|
|
|
|
||||||
Diluted weighted average limited partner units outstanding
|
78,175,007
|
|
|
78,212,837
|
|
|
78,299,472
|
|
|
78,332,671
|
|
|
|
|
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 net 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
|
|
|
|
|
(1)
|
The sum of the four quarters may not equal the total year due to rounding.
|
•
|
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 elected to determine the discount rate used to measure lease liabilities at the portfolio level. Specifically, the Company segregated its leases into different populations based on lease term.
|
•
|
Discount Rate - The Company 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. As a majority of the Company’s leases do not provide an implicit rate, the Company used an incremental borrowing rate based on information available at the date of transition to determine the present value of lease payments.
|
•
|
Lease/Non-Lease Components - The Company elected to not separate non-lease components. The Company elected to make this election for each class of underlying asset.
|
•
|
Definition of Minimum Rental Payments - The Company elected to include executory costs as part of the minimum lease payments for purposes of measuring the lease liability and right-of-use asset at transition.
|
•
|
Land Easement - The Company elected not to assess whether any land easements are, or contain, leases in accordance with ASC 842 when transitioning to the standard.
|
|
|
December 31, 2019
|
||
Assets:
|
Classification:
|
|
||
Operating lease assets
|
Operating lease right-of-use assets
|
$
|
93.1
|
|
Finance lease assets
|
Property, plant and equipment, net (1)
|
3.2
|
|
|
Total leased assets
|
|
$
|
96.3
|
|
Liabilities:
|
|
|
||
Current
|
|
|
||
Operating
|
Current portion of operating lease liabilities
|
$
|
60.6
|
|
Finance
|
Current portion of long-term debt
|
0.3
|
|
|
Non-current
|
|
|
||
Operating
|
Long-term operating lease liabilities
|
33.0
|
|
|
Finance
|
Long term debt, less current portion
|
2.4
|
|
|
Total lease liabilities
|
|
$
|
96.3
|
|
|
(1)
|
Finance lease assets are recorded net of accumulated amortization of $7.1 million as of December 31, 2019.
|
|
|
December 31,
|
||
Lease Costs:
|
Classification:
|
2019
|
||
Fixed operating lease cost
|
Cost of Sales; SG&A Expenses
|
$
|
67.0
|
|
Short-term operating lease cost (1)
|
Cost of Sales; SG&A Expenses
|
8.0
|
|
|
Variable operating lease cost (2) (3)
|
Cost of Sales; SG&A Expenses
|
3.2
|
|
|
Finance lease cost:
|
|
|
||
Amortization of right-of-use asset
|
Cost of Sales
|
1.2
|
|
|
Interest on lease liabilities
|
Interest expense
|
1.4
|
|
|
Total lease cost
|
|
$
|
80.8
|
|
|
(1)
|
The Company’s leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets.
|
(2)
|
Approximately $2.0 million of the Company’s variable operating lease cost for the year ended December 31, 2019 relates to its lease agreement with Phillips 66 related to the LVT unit at its Lake Charles, Louisiana refinery (“the LVT Agreement”). Pursuant to the LVT Agreement, Phillips 66 is obligated to supply a minimum supply quantity which the Company agrees to purchase through December 31, 2020. Pricing for the agreement is indexed to the prior month’s average of Platts Mid USGC 55 Grade Jet Kero price on the day of loading plus an adder. Phillips 66 invoices the Company for the estimated volume of product to be purchased by the Company based on a supplied forecast and differences between actual volumes purchased and the estimated volume of product originally billed which makes up the variable component of the operating lease contract.
|
(3)
|
The Company’s railcar leases typically include a mileage limit the railcar can travel over the life of the lease. For any mileage incurred over this limit, the Company is obligated to pay an agreed upon dollar value for each mile that is traveled over the limit.
|
Maturity of Lease Liabilities
|
Operating Leases (1)
|
|
Finance
Leases (2)
|
|
Total
|
||||||
2020
|
$
|
65.0
|
|
|
$
|
0.5
|
|
|
$
|
65.5
|
|
2021
|
13.8
|
|
|
0.5
|
|
|
14.3
|
|
|||
2022
|
9.7
|
|
|
0.5
|
|
|
10.2
|
|
|||
2023
|
6.9
|
|
|
0.5
|
|
|
7.4
|
|
|||
2024
|
3.9
|
|
|
0.5
|
|
|
4.4
|
|
|||
Thereafter
|
3.3
|
|
|
1.1
|
|
|
4.4
|
|
|||
Total
|
$
|
102.6
|
|
|
$
|
3.6
|
|
|
$
|
106.2
|
|
Less: Interest
|
9.0
|
|
|
0.9
|
|
|
9.9
|
|
|||
Present value of lease liabilities
|
$
|
93.6
|
|
|
$
|
2.7
|
|
|
$
|
96.3
|
|
Less obligations due within one year
|
60.6
|
|
|
0.3
|
|
|
60.9
|
|
|||
Long-term lease obligations
|
$
|
33.0
|
|
|
$
|
2.4
|
|
|
$
|
35.4
|
|
|
(1)
|
As of December 31, 2019, the Company’s operating lease payments included no material options to extend lease terms that are reasonably certain of being exercised. The Company has no legally binding minimum lease payments for leases signed but not yet commenced as of December 31, 2019.
|
(2)
|
As of December 31, 2019, the Company’s finance lease payments included no material options to extend lease terms that are reasonably certain of being exercised. In addition, the Company has no legally binding minimum lease payments for leases that have been signed but not yet commenced as of December 31, 2019.
|
Lease Term and Discount Rate:
|
December 31, 2019
|
|
Weighted-average remaining lease term (years):
|
|
|
Operating leases
|
2.5
|
|
Finance leases
|
7.1
|
|
Weighted-average discount rate:
|
|
|
Operating leases
|
7.3
|
%
|
Finance leases
|
8.8
|
%
|
•
|
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.
|
•
|
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.
|
•
|
Data Management Review and Change Controls - We have developed and implemented a suite of controls over the initiation, testing and approval of changes to master data.
|
•
|
Provided Training to end users in order to reinforce the importance of our control environment across the company and developed additional training to employees to enhance their understanding of the ERP system so that they can effectively operate the system and related controls.
|
•
|
Reviewing, analyzing and properly documenting account reconciliations and our processes related to internal controls over financial reporting.
|
•
|
Continuing to design and implement effective review and approval controls. These controls will address the accuracy and completeness of the data used in the performance of the respective controls.
|
Name
|
|
Age
|
|
Position with Calumet GP, LLC
|
Fred M. Fehsenfeld, Jr.
|
|
69
|
|
Chairman of the Board
|
F. William Grube
|
|
72
|
|
Executive Vice Chairman
|
Timothy Go
|
|
53
|
|
Chief Executive Officer
|
H. Keith Jennings
|
|
50
|
|
Executive Vice President — Chief Financial Officer
|
Bruce A. Fleming
|
|
63
|
|
Executive Vice President — Strategy & Growth
|
Scott Obermeier
|
|
47
|
|
Executive Vice President — Commercial
|
James S. Carter
|
|
70
|
|
Director
|
Robert E. Funk
|
|
74
|
|
Director
|
Stephen P. Mawer
|
|
55
|
|
Director
|
Daniel J. Sajkowski
|
|
60
|
|
Director
|
Amy M. Schumacher
|
|
48
|
|
Director
|
Daniel L. Sheets
|
|
62
|
|
Director
|
•
|
Timothy Go — Chief Executive Officer
|
•
|
D. West Griffin — Executive Vice President — Chief Financial Officer
|
•
|
Bruce A. Fleming — Executive Vice President — Strategy & Growth
|
•
|
F. William Grube — Executive Vice President
|
•
|
Christopher Bohnert — Chief Financial Officer — Finished Lubes and Chemicals
|
•
|
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.
|
|
2019 Base Salary
|
|
2018 Base Salary
|
||||
Timothy Go
|
$
|
600,000
|
|
|
$
|
537,450
|
|
D. West Griffin
|
$
|
424,368
|
|
|
$
|
412,008
|
|
Bruce A. Fleming
|
$
|
410,429
|
|
|
$
|
398,475
|
|
F. William Grube
|
$
|
454,363
|
|
|
$
|
454,363
|
|
Christopher Bohnert
|
$
|
324,105
|
|
|
$
|
316,200
|
|
|
Cash Incentive Bonus Award Opportunity as a
Percentage of Base Salary(1)
|
||||
|
Minimum
|
|
Target
|
|
Stretch
|
Timothy Go, D. West Griffin and Bruce A. Fleming
|
50%
|
|
150%
|
|
200%
|
F. William Grube and Christopher Bohnert
|
25%
|
|
50%
|
|
75%
|
|
(1)
|
Company performance goals are based on Adjusted EBITDA.
|
|
Adjusted EBITDA (Dollars in millions)
|
||||||
Fiscal Year
|
Actual
|
|
Min. Goal
|
|
Target Goal
|
|
Stretch Goal
|
2019
|
$304.6
|
|
$240.0
|
|
$300.0
|
|
$360.0
|
2018(1)
|
$263.9
|
|
$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.
|
|
2019 Phantom Unit Award Opportunity
|
|
Phantom Units
To Be Granted (1)
|
||||
|
Minimum
|
|
Target
|
|
Stretch
|
|
|
F. William Grube (2)
|
54,000
|
|
104,000
|
|
156,000
|
|
104,000
|
|
2019 Phantom Unit Award Opportunity
|
|
Cash Equivalent of Phantom Units
|
||||
|
Minimum
|
|
Target
|
|
Stretch
|
|
|
Christopher Bohnert (3)
|
$102,000
|
|
$204,000
|
|
$306,000
|
|
$204,000
|
|
(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.
|
(2)
|
Phantom Unit Award Opportunity for Mr. Grube is reflected in number of Phantom Units.
|
(3)
|
Phantom Unit Award Opportunity for Mr. Bohnert is reflected as a cash value that will be converted to a number of units on the grant date, which will occur in the 2020 year.
|
•
|
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 their age to improve their health and productivity.
|
•
|
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 them.
|
•
|
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, non-solicitation and non-competition provisions covering one year after termination and because we and the named executive officers 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.
|
•
|
Stephen P. Mawer, Chairman
|
•
|
Fred M. Fehsenfeld, Jr.
|
•
|
Amy M. Schumacher
|
|
Summary Compensation Table for 2019
|
||||||||||||||||||||||||
Name and Principal Position
|
Year
|
|
Salary
|
|
Bonus
|
|
Unit Awards (1)
|
|
Non-Equity Incentive Plan Compensation (2)
|
|
All Other Compensation (3)
|
|
Total
|
||||||||||||
Timothy Go
Chief Executive Officer
|
2019
|
|
$
|
600,000
|
|
|
$
|
—
|
|
|
$
|
435,000
|
|
|
$
|
435,000
|
|
|
$
|
16,139
|
|
|
$
|
1,486,139
|
|
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
|
|
|
D. West Griffin
Executive Vice President - Chief Financial Officer
|
2019
|
|
$
|
424,368
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
187,386
|
|
|
$
|
611,754
|
|
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
Executive Vice President - Strategy & Growth
|
2019
|
|
$
|
410,429
|
|
|
$
|
—
|
|
|
$
|
794,435
|
|
|
$
|
—
|
|
|
$
|
18,299
|
|
|
$
|
1,223,163
|
|
2018
|
|
$
|
398,475
|
|
|
$
|
—
|
|
|
$
|
298,856
|
|
|
$
|
225,000
|
|
|
$
|
14,635
|
|
|
$
|
936,966
|
|
|
2017
|
|
$
|
385,000
|
|
|
$
|
—
|
|
|
$
|
1,315,500
|
|
|
$
|
356,125
|
|
|
$
|
24,405
|
|
|
$
|
2,081,030
|
|
|
F William Grube
Executive Vice President
|
2019
|
|
$
|
454,363
|
|
|
$
|
184,812
|
|
|
$
|
31,968
|
|
|
$
|
—
|
|
|
$
|
26,410
|
|
|
$
|
697,553
|
|
2018
|
|
$
|
454,363
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
184,812
|
|
|
$
|
43,333
|
|
|
$
|
682,508
|
|
|
2017
|
|
$
|
454,363
|
|
|
$
|
—
|
|
|
$
|
57,780
|
|
|
$
|
227,182
|
|
|
$
|
14,136
|
|
|
$
|
753,461
|
|
|
Christopher Bohnert
Chief Financial Officer - Finished Lubes and Chemicals
|
2019
|
|
$
|
324,105
|
|
|
$
|
128,614
|
|
|
$
|
178,380
|
|
|
$
|
—
|
|
|
$
|
19,783
|
|
|
$
|
650,882
|
|
|
(1)
|
The amounts include the aggregate grant date fair value of (i) 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
|
(2)
|
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. See footnote #3 below.
|
(3)
|
We have determined that the annual phantom units should be reported in the year to which the performance relates, as all decisions that needed to be made to determine the grant values were determined in the performance year, therefore the amounts reflected in the 2018 row have been modified from the original disclosures for the 2018 year to include the 2018 phantom units earned in the 2018 year but awarded in 2019. The annual phantom units reported in the 2019 row reflect the phantom units earned in the 2019 year but not granted until the first quarter of 2020.
|
(4)
|
The following table provides the aggregate “All Other Compensation” information for each of the named executive officers for the 2019 year.
|
|
Timothy Go
|
|
D. West Griffin
|
|
Bruce A. Fleming
|
|
F. William Grube
|
|
Christopher Bohnert
|
||||||||||
401(k) Plan Matching Contributions
|
$
|
14,000
|
|
|
$
|
14,000
|
|
|
$
|
14,000
|
|
|
$
|
19,533
|
|
|
$
|
18,306
|
|
Commuting and Living Expenses (1)
|
—
|
|
|
169,579
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-Term Disability Insurance
|
1,440
|
|
|
1,872
|
|
|
1,440
|
|
|
1,872
|
|
|
718
|
|
|||||
Term Life Insurance
|
699
|
|
|
1,935
|
|
|
2,859
|
|
|
5,005
|
|
|
759
|
|
|||||
Total
|
$
|
16,139
|
|
|
$
|
187,386
|
|
|
$
|
18,299
|
|
|
$
|
26,410
|
|
|
$
|
19,783
|
|
|
(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 $69,579.
|
|
|
|
Estimated Possible Payouts Under
Non-Equity
Incentive Plan Awards (1)
|
|
Estimated Possible Payouts Under
Equity
Incentive Plan Awards (2)
|
|
Grant
Date Fair
Value of
Unit
Awards
($)
|
||||||||||||||||||||||
Name
|
Grant
Date
|
|
Minimum ($)
|
|
Target
($)
|
|
Maximum ($)
|
|
Minimum
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
|||||||||||||||
Timothy Go
|
2/27/2019
|
|
$
|
150,000
|
|
|
$
|
450,000
|
|
|
$
|
600,000
|
|
|
|
|
|
|
|
|
|
||||||||
2/27/2019
|
|
|
|
|
|
|
|
$
|
150,000
|
|
|
$
|
450,000
|
|
|
$
|
600,000
|
|
|
$
|
450,000
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
—
|
|
|||||||||||||
D. West Griffin
|
2/27/2019
|
|
$
|
106,092
|
|
|
$
|
212,185
|
|
|
$
|
424,368
|
|
|
|
|
|
|
|
|
|
||||||||
2/27/2019
|
|
|
|
|
|
|
|
$
|
106,092
|
|
|
$
|
212,185
|
|
|
$
|
424,368
|
|
|
$
|
212,185
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
—
|
|
|||||||||||||
Bruce A. Fleming
|
2/27/2019
|
|
$
|
102,607
|
|
|
$
|
307,822
|
|
|
$
|
410,429
|
|
|
|
|
|
|
|
|
|
||||||||
2/27/2019
|
|
|
|
|
|
|
|
$
|
102,607
|
|
|
$
|
307,822
|
|
|
$
|
410,429
|
|
|
$
|
307,822
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
—
|
|
|||||||||||||
F. William Grube
|
2/27/2019
|
|
$
|
65,000
|
|
|
$
|
130,000
|
|
|
$
|
195,000
|
|
|
|
|
|
|
|
|
|
||||||||
2/27/2019
|
|
|
|
|
|
|
|
$
|
52,000
|
|
|
$
|
104,000
|
|
|
$
|
156,000
|
|
|
$
|
104,000
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
—
|
|
|||||||||||||
Christopher Bohnert
|
2/27/2019
|
|
$
|
170,000
|
|
|
$
|
340,000
|
|
|
$
|
510,000
|
|
|
|
|
|
|
|
|
|
||||||||
2/27/2019
|
|
|
|
|
|
|
|
$
|
52,000
|
|
|
$
|
104,000
|
|
|
$
|
156,000
|
|
|
$
|
104,000
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
—
|
|
|
(1)
|
With respect to Messrs. Go, Griffin and Fleming, 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 2019. For the 2019 year, the 50% non-cash portion of the Cash Incentive Plan award for Messrs. Go, Griffin and Fleming 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 — Description of Cash Incentive Plan” and “Compensation Discussion and Analysis — Elements of Executive Compensation — Executive Deferred Compensation Plan.” For Messrs. Grube and Bohnert, estimated possible payouts under non-equity incentive plan awards represent the full ranges of potential cash incentive awards which could have been earned under our Cash Incentive Plan related to fiscal year 2019.
|
(2)
|
With respect to Messrs. Go, Griffin and Fleming, 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 2019. For the 2019 year, 50% of any Cash Incentive Plan award is required to be deferred into the Deferred Compensation Plan as phantom units. 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 2020, 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.” With respect to Messrs. Grube and Bohnert, the amounts reflect the ranges of the value of the phantom units that could be awarded to them following the certification of our applicable Adjusted EBITDA targets for the 2019 year. The phantom units that will be granted to Messrs. Grube and Bohnert will remain subject to certain time-based vesting conditions, as further described in “Compensation Discussion and Analysis - Elements of Executive Compensation - Long-Term Unit-Based Awards.” The number of phantom units to be granted to Messrs. Grube and Bohnert will be determined on the date of grant in 2020.”
|
Name
|
Percentage of
Total
Compensation
|
Timothy Go
|
40%
|
D. West Griffin
|
69%
|
Bruce A. Fleming
|
34%
|
F. William Grube
|
92%
|
Christopher Bohnert
|
70%
|
|
|
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
|
|
—
|
|
|
$
|
—
|
|
|
575,000(1)
|
|
|
$
|
2,098,750
|
|
|
|
|
|
|
|
|
(3)
|
|
|
$
|
450,000
|
|
(3)
|
|||
D. West Griffin
|
|
—
|
|
|
$
|
—
|
|
|
287,500(1)
|
|
|
$
|
1,049,375
|
|
|
|
|
|
|
|
|
(3)
|
|
|
$
|
318,276
|
|
(3)
|
|||
Bruce A. Fleming
|
|
—
|
|
|
$
|
—
|
|
|
143,750(1)
|
|
|
$
|
524,688
|
|
|
|
|
|
|
|
|
(3)
|
|
|
$
|
307,822
|
|
(3)
|
|||
F. William Grube
|
|
21,600
|
|
|
$
|
78,840
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Christopher Bohnert
|
|
57,676
|
|
|
$
|
210,517
|
|
|
—
|
|
|
$
|
—
|
|
|
|
(1)
|
These units are scheduled to vest in amounts and on the dates shown in the following table:
|
Vesting Date
|
Timothy Go
|
|
D. West Griffin
|
|
Bruce A. Fleming
|
|
F. William Grube
|
|
Christopher Bohnert
|
January 23, 2020
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
July 1, 2020
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
September 25, 2020
|
—
|
|
—
|
|
—
|
|
—
|
|
7,000
|
December 31, 2020
|
—
|
|
—
|
|
—
|
|
10,800
|
|
—
|
July 1, 2021
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
December 31, 2021
|
—
|
|
—
|
|
—
|
|
10,800
|
|
50,676
|
March 31, 2022
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
July 1, 2022
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Reinstatement of Distributions
|
125,000
|
|
62,500
|
|
31,250
|
|
—
|
|
—
|
$10 Price Target
|
100,000
|
|
50,000
|
|
25,000
|
|
—
|
|
—
|
$16 Price Target
|
250,000
|
|
125,000
|
|
62,500
|
|
—
|
|
—
|
$18 Price Target
|
100,000
|
|
50,000
|
|
25,000
|
|
—
|
|
—
|
|
575,000
|
|
287,500
|
|
143,750
|
|
21,600
|
|
57,676
|
(2)
|
Market value of phantom units reported in these columns is calculated by multiplying the closing market price of $3.65 of our common units at December 31, 2019 by the number of units outstanding.
|
(3)
|
Our named executive officers other than Messrs. Grube and Bohnert were required to defer 50% of their 2019 Cash Incentive Plan award in the form of phantom units. Because the equity portion of this award was originally denominated in cash, and could not be converted to a number of units until the settlement date for the Cash Incentive Plan award in the first quarter of 2020, there is not a number of units to reflect in this column. The potential value of the award, based on December 31, 2019 unit prices and the assumption of a target payout is reflected in the accompanying column as the
|
|
Unit Awards
|
|||||
Name
|
Number of
Units Vested
|
|
Value Realized
on Vesting (1)
|
|||
Timothy Go
|
105,721
|
|
|
$
|
379,882
|
|
D. West Griffin
|
65,390
|
|
|
$
|
232,788
|
|
Bruce A. Fleming
|
98,963
|
|
|
$
|
355,527
|
|
F. William Grube
|
—
|
|
|
$
|
—
|
|
Christopher Bohnert
|
7,000
|
|
|
$
|
27,020
|
|
|
(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 2019
|
||||||||||||||||||
Name
|
Executive
Contributions
in 2019(1)
|
|
Company
Contributions
in 2019 (2)
|
|
Aggregate
Earnings
in 2019 (3)
|
|
Aggregate Withdrawals/ Distributions in 2019
|
|
Aggregate
Balance at End
of 2019 (4)
|
||||||||||
Timothy Go
|
$
|
243,302
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
243,302
|
|
D. West Griffin
|
$
|
238,674
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
238,674
|
|
Bruce A. Fleming
|
$
|
230,691
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
230,691
|
|
F. William Grube
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
132,090
|
|
Christopher Bohnert
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(1)
|
Executive contributions in 2019 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 2018 fiscal year into the Deferred Compensation Plan. All amounts reflected in this column were also reported as compensation for the year 2018 in the Summary Compensation Table under the heading “Unit Awards.”
|
(2)
|
No company contributions were made with respect to the 2019 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 2019 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 previous years if applicable. 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 2019, and would have been included as compensation in 2019 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
|
•
|
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.
|
•
|
Mr. Grube may be terminated for cause due to: (i) Mr. Grube’s willful and continuing failure (excluding as a result of his mental or physical incapacity) to perform his duties and responsibilities with us; (ii) Mr. Grube’s having committed any act of material dishonesty against us or any of our affiliates (including theft, misappropriation, embezzlement, forgery, fraud, or willful and intentional falsification of records or misrepresentations); (iii) Mr. Grube’s willful and continuing material breach of the employment agreement; (iv) Mr. Grube’s having been convicted of, or having entered a plea of nolo contendre to any felony; or (v) Mr. Grube’s having been the subject of any final and non-appealable order, judicial or administrative, obtained or issued by the SEC, for any securities violation involving fraud, including, for example, any such order consented to by Mr. Grube in which findings of facts or any legal conclusions establishing liability are neither admitted nor denied.
|
•
|
Change in Control. Messrs. Go and Grube’s agreements state that a change in control may occur upon any of the following events:
|
◦
|
any “person” or “group,” within the meaning of those terms as used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended, other than the Company or its Affiliates, or Fred M. Fehsenfeld Jr. or F. William Grube or their respective immediate families or Affiliates, becomes the beneficial owner, by way or merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the voting power of the outstanding equity interests of the Company;
|
◦
|
a person or entity other than the Company or an Affiliate of the Company becomes the general partner of the Company; or
|
◦
|
the sale or other disposition, including by liquidation or dissolution, of all or substantially all of the assets of the Company in one or more transactions to any person other than an Affiliate of the Company.
|
•
|
Good Reason. Mr. Go has the right to terminate employment under his employment agreement, upon the occurrence of any of the following circumstances, without his prior consent: (i) material diminution in his total compensation opportunity in effect on the Go Effective Date; (ii) material breach by us of any of our covenants or obligations under his agreement; (iii) material reduction in his authority, duties or responsibilities or reporting relationship; (iv) the involuntary relocation of the geographic location of his principal place of employment by more than 100 miles from the location of his principal place of employment as of the Go Effective Date; and (v) following a Change in Control (as defined in the agreement), our failure to obtain an agreement from any successor to us to assume and agree to perform this agreement in the same manner and to the same extent that we would be required to perform if no succession had taken place, except where such assumption occurs by operation of law; provided however, that notwithstanding the foregoing provisions or any other provisions of his agreement to the contrary, any assertion by him of a termination for Good Reason (as defined in his agreement) shall not be effective unless all of the following conditions are satisfied: (i) the conditions described above giving rise to his termination of employment must have arisen without his consent; (ii) he must provide written notice to the board of directors of the existence of such condition(s) within 30 days of the initial existence of such condition(s); (iii) the condition(s) specified in such notice must remain uncorrected for 30 days following the board of directors’ receipt of such written notice; and (iv) the date of his termination of employment must occur within 90 days after the initial existence of the condition(s) specified in such notice.
|
•
|
Good reason under Mr. Grube’s employment agreement includes: (i) any material breach by us of the employment agreement; (ii) any requirement by us that Mr. Grube relocate outside of the metropolitan Indianapolis, Indiana area; (iii) failure of any successor to assume the employment agreement not later than the date as of which it acquires substantially all of the equity, assets or business of us; (iv) any material reduction in Mr. Grube’s title, authority, responsibilities, or duties (including a change that causes him to cease being a member of the board of directors or reporting directly and
|
|
(1)
|
As per his employment agreement, Mr. Go will receive three 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 three 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, 2019, amounts have been calculated assuming that the entire 2019 bonus award would be payable for the 2019 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, 2019 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, 2019, closing common unit price of $3.65. 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 and Fleming 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 was normal retirement age (66 for purposes of the Deferred Compensation Plan) as of December 31, 2019, therefore none of the named executive officers were 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, 2019, closing common unit price of $3.65. 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, 2019, the 50% portion of the 2019 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 equity award in the form of restricted or phantom units, valued at approximately $100,000;
|
•
|
an audit and finance committee chair annual fee of $20,000;
|
•
|
a non-chair audit and finance committee member annual fee of $10,000;
|
•
|
a strategy and growth committee chair 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 2019
|
||||||||||
Name
|
Fees Earned or
Paid in Cash
|
|
Unit
Awards (1)
|
|
Total
|
||||||
Fred M. Fehsenfeld, Jr.
|
$
|
—
|
|
|
$
|
179,003
|
|
|
$
|
179,003
|
|
James S. Carter
|
$
|
—
|
|
|
$
|
193,997
|
|
|
$
|
193,997
|
|
Robert E. Funk
|
$
|
35,814
|
|
|
$
|
147,753
|
|
|
$
|
183,567
|
|
Stephen P. Mawer
|
$
|
—
|
|
|
$
|
195,502
|
|
|
$
|
195,502
|
|
Daniel J. Sajkowski
|
$
|
—
|
|
|
$
|
177,501
|
|
|
$
|
177,501
|
|
Amy M. Schumacher
|
$
|
—
|
|
|
$
|
179,003
|
|
|
$
|
179,003
|
|
Daniel L. Sheets
|
$
|
—
|
|
|
$
|
182,500
|
|
|
$
|
182,500
|
|
|
(1)
|
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, (ii) cash fees paid in the form of phantom unit awards (“Director Fee” awards) and (iii) matching phantom unit awards granted to those non-employee directors who deferred all of the fees they earned in 2019 pursuant to the Deferred Compensation Plan (“Matching Units”). The amounts reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, disregarding the estimate of forfeitures. Please read Note 14 to our consolidated financial statements for the fiscal year ending December 31, 2019 for a discussion of the assumptions used to determine the FASB ASC Topic 718 value of the awards.
|
|
Annual Director Phantom Unit Awards
|
||||||||
|
Grant Date
|
|
Number of Units
Granted (#) (1)
|
|
Number of Matching Units Granted (#) (2)
|
|
Aggregate Grant Date Fair Value
|
||
Fred M. Fehsenfeld, Jr.
|
May 7, 2019
|
|
5,471
|
|
1,824
|
|
$
|
26,335
|
|
|
August 6, 2019
|
|
4,193
|
|
1,398
|
|
$
|
26,334
|
|
|
November 4, 2019
|
|
5,692
|
|
1,897
|
|
$
|
26,334
|
|
|
November 6, 2019
|
|
28,409
|
|
—
|
|
$
|
100,000
|
|
James S. Carter
|
May 7, 2019
|
|
6,510
|
|
2,170
|
|
$
|
31,335
|
|
|
August 6, 2019
|
|
4,989
|
|
1,663
|
|
$
|
31,331
|
|
|
November 4, 2019
|
|
6,772
|
|
2,257
|
|
$
|
31,331
|
|
|
November 6, 2019
|
|
28,409
|
|
—
|
|
$
|
100,000
|
|
Robert E. Funk
|
May 7, 2019
|
|
3,307
|
|
1,102
|
|
$
|
15,916
|
|
|
August 6, 2019
|
|
2,535
|
|
845
|
|
$
|
15,920
|
|
|
November 4, 2019
|
|
3,440
|
|
1,147
|
|
$
|
15,917
|
|
|
November 6, 2019
|
|
28,409
|
|
—
|
|
$
|
100,000
|
|
Stephen P. Mawer
|
May 7, 2019
|
|
6,614
|
|
2,205
|
|
$
|
31,837
|
|
|
August 6, 2019
|
|
5,069
|
|
1,690
|
|
$
|
31,835
|
|
|
November 4, 2019
|
|
6,880
|
|
2,293
|
|
$
|
31,830
|
|
|
November 6, 2019
|
|
28,409
|
|
—
|
|
$
|
100,000
|
|
Daniel J. Sajkowski
|
May 7, 2019
|
|
5,367
|
|
1,789
|
|
$
|
25,833
|
|
|
August 6, 2019
|
|
4,114
|
|
1,371
|
|
$
|
25,834
|
|
|
November 4, 2019
|
|
5,584
|
|
1,861
|
|
$
|
25,834
|
|
|
November 6, 2019
|
|
28,409
|
|
—
|
|
$
|
100,000
|
|
Amy M. Schumacher
|
May 7, 2019
|
|
5,471
|
|
1,824
|
|
$
|
26,335
|
|
|
August 6, 2019
|
|
4,193
|
|
1,398
|
|
$
|
26,334
|
|
|
November 4, 2019
|
|
5,692
|
|
1,897
|
|
$
|
26,334
|
|
|
November 6, 2019
|
|
28,409
|
|
—
|
|
$
|
100,000
|
|
Daniel L. Sheets
|
May 7, 2019
|
|
5,713
|
|
1,904
|
|
$
|
27,498
|
|
|
August 6, 2019
|
|
4,379
|
|
1,460
|
|
$
|
27,502
|
|
|
November 4, 2019
|
|
5,944
|
|
1,981
|
|
$
|
27,500
|
|
|
November 6, 2019
|
|
28,409
|
|
—
|
|
$
|
100,000
|
|
|
(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 31st of each of the three successive years. With respect to the Director Fees grant, all phantom units vest on the third December 31st after the grant date.
|
(2)
|
With respect to the Matching Units, the phantom units will vest on the third December 31st after the grant date.
|
|
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.
|
71,248
|
|
$
|
260,055
|
|
James S. Carter
|
79,129
|
|
$
|
288,821
|
|
Robert E. Funk
|
77,979
|
|
$
|
284,623
|
|
Stephen P. Mawer
|
78,010
|
|
$
|
284,737
|
|
Daniel J. Sajkowski
|
70,268
|
|
$
|
256,478
|
|
Amy M. Schumacher
|
72,236
|
|
$
|
263,661
|
|
Daniel L. Sheets
|
20,852
|
|
$
|
76,110
|
|
|
(1)
|
The market value of each director’s unvested phantom units as of December 31, 2019 was determined by multiplying all unvested phantom units by the closing price of our common units on December 31, 2019, which was $3.65.
|
|
(1)
|
The dollar amount of each director’s account as of December 31, 2019 was determined by multiplying all phantom units deemed to be included in the director’s account by the closing price of our common units on December 31, 2019, which was $3.65.
|
•
|
The median of the annual total compensation of all employees of our general partner (other than the CEO) was $83,230;
|
•
|
The annual total compensation of the CEO, as reported in the Summary Compensation Table included elsewhere within this Annual Report, was $1,486,139; and
|
•
|
Based on this information, for 2019 the ratio of the annual total compensation of Mr. Go to the median of the annual total compensation of all employees was approximately 18 to 1.
|
•
|
We determined that, as of December 31, 2019, our general partner’s employee population consisted of approximately 1,500 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, 2019 as our identification date for determining our median employee compensation.
|
•
|
We used a consistently applied compensation measure to identify the median employee by 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 2019. We did not annualize the compensation for any employees that were not employed by our general partner for all of 2019.
|
•
|
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 2019 year in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $83,230. The difference between such employee’s salary, wages and overtime pay and the employee’s annual total compensation represents contributions in the amount of $(4,230) that we made on the employee’s behalf to our 401(k) plan for the 2019 year and to the employee’s health savings account for the 2019 year.
|
•
|
With respect to the annual total compensation of the CEO, we used the amount reported in the “Total” column of our 2019 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
|
|
|
15.25
|
%
|
Calumet, Incorporated (2)
|
1,934,287
|
|
|
2.49
|
%
|
Adams Asset Advisors, LLC (3)
|
4,178,677
|
|
|
5.37
|
%
|
James S. Carter
|
168,503
|
|
|
*
|
|
Fred M. Fehsenfeld, Jr. (1)(2)(4)(5)
|
752,559
|
|
|
*
|
|
Bruce A. Fleming
|
286,079
|
|
|
*
|
|
Robert E. Funk
|
118,564
|
|
|
*
|
|
Timothy Go
|
247,208
|
|
|
*
|
|
D. West Griffin
|
97,860
|
|
|
*
|
|
F. William Grube (6)
|
234,123
|
|
|
*
|
|
Christopher Bohnert
|
11,807
|
|
|
*
|
|
Stephen P. Mawer
|
76,492
|
|
|
*
|
|
Daniel J. Sajkowski
|
64,830
|
|
|
*
|
|
Amy M. Schumacher (1)(5)(6)
|
74,530
|
|
|
*
|
|
Daniel L. Sheets
|
3,906
|
|
|
*
|
|
All directors and executive officers as a group (14 persons)
|
2,192,513
|
|
|
2.82
|
%
|
|
*
|
= less than 1 percent.
|
(1)
|
Twenty-nine 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
|
(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)
|
As noted in the Schedule 13G filed with the SEC on January 8, 2020, the filing person has indicated that it has or shares beneficial ownership of such units. The address for Adams Asset Advisors, LLC is 8150 N. Central Expwy #M1120, Dallas, Texas 75206.Includes common units that are owned by the spouse and certain children of Fred M. Fehsenfeld, Jr., for which he disclaims beneficial ownership.
|
(4)
|
Does not include a total of 1,979,804 common units owned by two trusts, the direct or indirect beneficiaries of which are members of the Fred M. Fehsenfeld, Jr. family. Each of the trusts has five trustees, Fred M. Fehsenfeld, Jr., James C. Fehsenfeld, Nicholas J. Rutigliano, William S. Fehsenfeld and Amy M. Schumacher, each of whom exercises equivalent voting rights with respect to each such trust. Each of Fred M. Fehsenfeld, Jr. and Amy M. Schumacher, who are directors of our general partner, disclaims beneficial ownership of all of the common units owned by the trusts, and none of these units are shown as being beneficially owned by such directors in the table above.
|
(5)
|
Includes common units that are owned by the spouse of F. William Grube, for which he disclaims beneficial ownership.
|
(6)
|
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
|
1,021,102
|
|
|
$
|
—
|
|
|
542,320
|
|
Total
|
1,021,102
|
|
|
$
|
—
|
|
|
542,320
|
|
|
(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, please read 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, 2019, 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, 2019, we determined that certain units classified as equity awards as of December 31, 2018 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,
|
||||||
|
2019
|
|
2018
|
||||
Audit fees
|
$
|
6.2
|
|
|
$
|
5.3
|
|
Audit-related fees
|
—
|
|
|
—
|
|
||
Total
|
$
|
6.2
|
|
|
$
|
5.3
|
|
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 5, 2020
|
Timothy Go
|
|
|
|
|
|
|
|
|
|
|
|
/s/ H. Keith Jennings
|
|
Executive Vice President and Chief Financial Officer of Calumet GP, LLC (Principal Financial Officer and Principal Accounting Officer)
|
|
Date:
|
March 5, 2020
|
H. Keith Jennings
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Fred M. Fehsenfeld, Jr.
|
|
Director and Chairman of the Board of Calumet GP, LLC
|
|
Date:
|
March 5, 2020
|
Fred M. Fehsenfeld, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
/s/ James S. Carter
|
|
Director of Calumet GP, LLC
|
|
Date:
|
March 5, 2020
|
James S. Carter
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert E. Funk
|
|
Director of Calumet GP, LLC
|
|
Date:
|
March 5, 2020
|
Robert E. Funk
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Stephen P. Mawer
|
|
Director of Calumet GP, LLC
|
|
Date:
|
March 5, 2020
|
Stephen P. Mawer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Daniel J. Sajkowski
|
|
Director of Calumet GP, LLC
|
|
Date:
|
March 5, 2020
|
Daniel J. Sajkowski
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Amy M. Schumacher
|
|
Director of Calumet GP, LLC
|
|
Date:
|
March 5, 2020
|
Amy M. Schumacher
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Daniel L. Sheets
|
|
Director of Calumet GP, LLC
|
|
Date:
|
March 5, 2020
|
Daniel L. Sheets
|
|
|
|
|
•
|
represents that the transferee has the capacity, power and authority to become bound by our partnership agreement;
|
•
|
automatically agrees to be bound by the terms and conditions of, and is deemed to have executed, our partnership agreement; and
|
•
|
gives the consents and approvals contained in our partnership agreement
|
Issuance of additional units
|
No approval right.
|
Amendment of our partnership agreement
|
Certain amendments may be made by the general partner without the approval of the unitholders. Other amendments generally require the approval of a unit majority. Please read “- Amendment of the Partnership Agreement.”
|
Merger of our partnership or the sale of all or substantially all of our assets
|
Unit majority in certain circumstances. Please read “- Merger, Sale or Other Disposition of Assets.”
|
Dissolution of our partnership
|
Unit majority. Please read “- Termination and Dissolution.”
|
Continuation of the business of our partnership upon dissolution
|
Unit majority. Please read “- Termination and Dissolution.”
|
Withdrawal of our general partner
|
No approval right. Please read “- Withdrawal or Removal of the General Partner.”
|
Removal of our general partner
|
Not less than 66⅔% of the outstanding units, including units held by our general partner and its affiliates. Please read “- Withdrawal or Removal of the General Partner.”
|
Transfer of the general partner interest
|
No approval right. Please read “- Transfer of General Partner Interest.”
|
Transfer of incentive distribution rights
|
No approval right. Please read “- Transfer of Incentive Distribution Rights.”
|
Transfer of ownership interests in our general partner
|
No approval required at any time. Please read “- Transfer of Ownership Interests in Our General Partner.”
|
•
|
to remove or replace our general partner;
|
•
|
to approve some amendments to our partnership agreement; or
|
•
|
to take other action under our partnership agreement;
|
•
|
under employee benefits plans;
|
•
|
upon conversion of the general partner interest and incentive distribution rights as a result of a withdrawal or removal of our general partner;
|
•
|
upon conversion of units of equal rank with the common units into common units or other parity units under certain circumstances;
|
•
|
in the event of a combination or subdivision of common units
|
•
|
in the connection with an acquisition or an expansion capital improvement that increases cash flow from operations per unit on an estimated pro forma basis;
|
•
|
if the proceeds of the issuance are used to repay indebtedness, the cost of which to service is greater than the distribution obligations associated with the units issued in connection with its retirement; or
|
•
|
in connection with the redemption of common units or other w
|
•
|
enlarge the obligations of any limited partner without its consent, unless approved by at least a majority of the type or class of limited partner interests so affected; or
|
•
|
enlarge the obligations of, restrict in any way any action by or rights of, or reduce in any way the amounts distributable, reimbursable or otherwise payable by us to our general partner or any of its affiliates without the consent of our general partner, which consent may be given or withheld at its option.
|
•
|
a change in our name, the location of our principal place of our business, our registered agent or our registered office;
|
•
|
the admission, substitution, withdrawal or removal of partners in accordance with our partnership agreement;
|
•
|
a change that our general partner determines to be necessary or appropriate to qualify or continue our qualification as a limited partnership or a partnership in which the limited partners have limited liability under the laws of any state or to ensure that neither we nor the operating company nor any of its subsidiaries will be treated as an association taxable as a corporation or otherwise taxed as an entity for federal income tax purposes;
|
•
|
an amendment that is necessary, in the opinion of our counsel, to prevent us or our general partner or its directors, officers, agents or trustees from in any manner being subjected to the provisions of the Investment Company Act of 1940, the Investment Advisors Act of 1940, or “plan asset” regulations adopted under the Employee Retirement Income Security Act of 1974 whether or not substantially similar to plan asset regulations currently applied or proposed;
|
•
|
an amendment that our general partner determines to be necessary or appropriate for the authorization of additional partnership securities or rights to acquire partnership securities;
|
•
|
any amendment expressly permitted in our partnership agreement to be made by our general partner acting alone;
|
•
|
an amendment effected, necessitated or contemplated by a merger agreement that has been approved under the terms of our partnership agreement;
|
•
|
any amendment that our general partner determines to be necessary or appropriate for the formation by us of, or our investment in, any corporation, partnership or other entity, as otherwise permitted by our partnership agreement;
|
•
|
a change in our fiscal year or taxable year and related changes;
|
•
|
mergers with or conveyances to another limited liability entity that is newly formed and has no assets, liabilities or operations at the time of the merger or conveyance other than those it receives by way of the merger or conveyance; or
|
•
|
any other amendments substantially similar to any of the matters described in the bullet points above.
|
•
|
do not adversely affect the limited partners (or any particular class of limited partners) in any material respect;
|
•
|
are necessary or appropriate to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal or state agency or judicial authority or contained in any federal or state statute;
|
•
|
are necessary or appropriate to facilitate the trading of limited partner interests or to comply with any rule, regulation, guideline or requirement of any securities exchange on which the limited partner interests are or will be listed for trading;
|
•
|
are necessary or appropriate for any action taken by our general partner relating to splits or combinations of units under the provisions of our partnership agreement; or
|
•
|
are required to effect the intent of the provisions of our partnership agreement or are otherwise contemplated by our partnership agreement.
|
•
|
the election of our general partner to dissolve us, if approved by the holders of units representing a unit majority;
|
•
|
there being no limited partners, unless we are continued without dissolution in accordance with applicable Delaware law;
|
•
|
the entry of a decree of judicial dissolution of our partnership; or
|
•
|
the withdrawal or removal of our general partner or any other event that results in its ceasing to be our general partner other than by reason of a transfer of its general partner interest in accordance with our partnership agreement or withdrawal or removal following approval and admission of a successor.
|
•
|
the action would not result in the loss of limited liability of any limited partner; and
|
•
|
neither our partnership, our operating company nor any of our other subsidiaries would be treated as an association taxable as a corporation or otherwise be taxable as an entity for federal income tax purposes upon the exercise of that right to continue.
|
•
|
any existing arrearages in payment of the minimum quarterly distribution on the common units will be extinguished; and
|
•
|
our general partner will have the right to convert its general partner interest and its incentive distribution rights into common units or to receive cash in exchange for those interests based on the fair market value of those interests at that time.
|
•
|
any existing arrearages in payment of the minimum quarterly distribution on the common units will be extinguished; and
|
•
|
our general partner will have the right to convert its general partner interest and its incentive distribution rights into common units or to receive cash in exchange for those interests.
|
•
|
the highest cash price paid by either of our general partner or any of its affiliates for any partnership securities of the class purchased within the 90 days preceding the date on which our general partner first mails notice of its election to purchase those partnership securities; and
|
•
|
the current market price as of the date three days before the date the notice is mailed.
|
•
|
a current list of the name and last known address of each partner;
|
•
|
a copy of our tax returns;
|
•
|
information as to the amount of cash, and a description and statement of the agreed value of any other property or services, contributed or to be contributed by each partner and the date on which each partner became a partner;
|
•
|
copies of our partnership agreement, our certificate of limited partnership, related amendments and powers of attorney under which they have been executed;
|
•
|
information regarding the status of our business and financial condition; and
|
•
|
any other information regarding our affairs as is just and reasonable.
|
•
|
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; or
|
•
|
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.
|
•
|
our cash balance on the closing date of our initial public offering; plus
|
•
|
$10.0 million (as described below); plus
|
•
|
all of our cash receipts after the closing of our initial public offering, excluding cash from (1) borrowings that are not working capital borrowings, (2) sales of equity and debt securities and (3) sales or other dispositions of assets outside the ordinary course of business; plus
|
•
|
working capital borrowings made after the end of a quarter but before the date of determination of operating surplus for the quarter; less
|
•
|
all of our operating expenditures after the closing of our initial public offering (including the repayment of working capital borrowings, but not the repayment of other borrowings) and maintenance capital expenditures; less
|
•
|
the amount of cash reserves established by our general partner for future operating expenditures.
|
•
|
borrowings other than working capital borrowings;
|
•
|
sales of our equity and debt securities; and
|
•
|
sales or other dispositions of assets for cash, other than inventory, accounts receivable and other current assets sold in the ordinary course of business or as part of normal retirement or replacement of assets.
|
•
|
first, 98% to all unitholders, pro rata, and 2% to the general partner, until we distribute for each outstanding unit an amount equal to the minimum quarterly distribution for that quarter; and
|
•
|
thereafter, in the manner described in “- Incentive Distribution Rights” below.
|
•
|
we have distributed available cash from operating surplus to the common unitholders in an amount equal to the minimum quarterly distribution; and
|
•
|
we have distributed available cash from operating surplus on outstanding common units in an amount necessary to eliminate any cumulative arrearages in payment of the minimum quarterly distribution;
|
•
|
first, 98% to all unitholders, pro rata, and 2% to the general partner, until each unitholder receives a total of $0.495 per unit for that quarter (the “first target distribution”);
|
•
|
second, 85% to all unitholders, pro rata, and 15% to the general partner, until each unitholder receives a total of $0.563 per unit for that quarter (the “second target distribution”);
|
•
|
third, 75% to all unitholders, pro rata, and 25% to the general partner, until each unitholder receives a total of $0.675 per unit for that quarter (the “third target distribution”); and
|
•
|
thereafter, 50% to all unitholders, pro rata, and 50% to the general partner.
|
|
Total Quarterly Distribution Target Amount
|
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%
|
•
|
first, 98% to all unitholders, pro rata, and 2% to the general partner, until we distribute for each common unit that was issued in our initial public offering, an amount of available cash from capital surplus equal to the initial unit price;
|
•
|
second, 98% to the common unitholders, pro rata, and 2% to the general partner, until we distribute for each common unit, an amount of available cash from capital surplus equal to any unpaid arrearages in payment of the minimum quarterly distribution on the common units; and
|
•
|
thereafter, we will make all distributions of available cash from capital surplus as if they were from operating surplus.
|
•
|
the minimum quarterly distribution;
|
•
|
target distribution levels; and
|
•
|
the unrecovered initial unit price.
|
•
|
first, to the general partner and the holders of units who have negative balances in their capital accounts to the extent of and in proportion to those negative balances;
|
•
|
second, 98% to the common unitholders, pro rata, and 2% to the general partner, until the capital account for each common unit is equal to the sum of: (1) the unrecovered initial unit price; and (2) the amount of the minimum quarterly distribution for the quarter during which our liquidation occurs;
|
•
|
third, 98% to all unitholders, pro rata, and 2% to the general partner, until we allocate under this paragraph an amount per unit equal to: (1) the sum of the excess of the first target distribution per unit over the minimum quarterly distribution per unit for each quarter of our existence; less (2) the cumulative amount per unit of any distributions of available cash
|
•
|
fourth, 85% to all unitholders, pro rata, and 15% to the general partner, until we allocate under this paragraph an amount per unit equal to: (1) the sum of the excess of the second target distribution per unit over the first target distribution per unit for each quarter of our existence; less (2) the cumulative amount per unit of any distributions of available cash from operating surplus in excess of the first target distribution per unit that we distributed 85% to the unitholders, pro rata, and 15% to the general partner for each quarter if our existence;
|
•
|
fifth, 75% to all unitholders, pro rata, and 25% to the general partner, until we allocate under this paragraph an amount per unit equal to: (1) the sum of the excess of the third target distribution per unit over the second target distribution per unit for each quarter of our existence; less (2) the cumulative amount per unit of any distributions of available cash from operating surplus in excess of the second target distribution per unit that we distributed 75% to the unitholders, pro rata, and 25% to the general partner for each quarter of our existence; and
|
•
|
thereafter, 50% to all unitholders, pro rata, and 50% to the general partner.
|
•
|
first, 98% to the holders of common units in proportion to the positive balances in their capital accounts and 2% to the general partner, until the capital accounts of the common unitholders have been reduced to zero; and
|
•
|
thereafter, 100% to the general partner.
|
D. West Griffin
|
CALUMET GP, LLC (for itself and on behalf of the Company)
|
•
|
Satisfactory results of a drug and alcohol screening that we will arrange for you
|
•
|
Satisfactory results of a routine background check
|
•
|
Proof of authorization to work and proof of identify in compliance with terms of the Federal Immigration Reform and Control Act. (1-9)
|
•
|
Execution of all applicable employment agreements and consent Calumet Policies.
|
|
|
|
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 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
|
(1)
|
Registration Statement (Form S-8 No. 333-226740) of Calumet Specialty Products Partners, L.P.,
|
(2)
|
Registration Statement (Form S-8 No. 333-208511) of Calumet Specialty Products Partners, L.P.,
|
(3)
|
Registration Statement (Form S-8 No. 333-186961) of Calumet Specialty Products Partners, L.P., and
|
(4)
|
Registration Statement (Form S-8 No. 333-138767) of Calumet Specialty Products Partners, L.P..
|
|
|
|
|
|
|
Date:
|
March 5, 2020
|
/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 5, 2020
|
/s/ H. Keith Jennings
|
|
|
H. Keith Jennings
Executive Vice President and Chief Financial Officer of Calumet GP, LLC, general partner of Calumet Specialty Products Partners, L.P.
(Principal Financial Officer)
|
|
|
March 5, 2020
|
/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 5, 2020
|
/s/ H. Keith Jennings
|
|
H. Keith Jennings
|
|
Executive Vice President and Chief Financial Officer of Calumet GP, LLC, general partner of Calumet Specialty Products Partners, L.P
(Principal Financial Officer)
|