CLMT Calument Inc

INDIANAPOLIS, Nov. 4 /PRNewswire-FirstCall/ -- Calumet Specialty Products Partners, L.P. (NASDAQ:CLMT) (the "Partnership" or "Calumet") reported net income for the quarter ended September 30, 2009 of $4.0 million compared to net loss of $12.5 million for the quarter ended September 30, 2008. For the nine months ended September 30, 2009, net income was $53.6 million compared to net income of $25.9 million for the nine months ended September 30, 2008. Calumet reported net cash provided by operating activities of $110.6 million for the nine months ended September 30, 2009 as compared to $75.7 million for the same period in 2008. Earnings before interest expense, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA (as defined by the Partnership's credit agreements) were $27.7 million and $42.5 million, respectively, for the quarter ended September 30, 2009 as compared to $13.6 million and $51.6 million, respectively, for the third quarter of 2008. Distributable Cash Flow for the quarter ended September 30, 2009 was $30.2 million as compared to $41.3 million for third quarter of 2008. The $9.0 million decrease in Adjusted EBITDA quarter over quarter was primarily due to a reduction in gross profit in our specialty products segment offset by lower realized derivative losses of $16.7 million in 2009 as compared to 2008 due to significant declines in crude oil prices in 2008. (See the section of this release titled "Non-GAAP Financial Measures" and the attached tables for discussion of EBITDA, Adjusted EBITDA, Distributable Cash Flow and other non-generally accepted accounting principles ("non-GAAP") financial measures, definitions of measures and reconciliations of such measures to the comparable GAAP measures.) The increase in net income of $16.5 million from the third quarter of 2008 was primarily due to decreased derivative losses of $43.1 million ($26.4 million of which represents non-cash derivative losses), decreased selling, general and administrative expenses of $4.6 million, and decreased interest expense of $2.4 million. Partially offsetting these increases in net income was lower gross profit of $35.8 million. Gross profit by segment was as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- (In millions) Gross profit by segment: Specialty products $33.5 $66.1 $114.1 $109.9 Fuel products 7.7 10.9 24.4 62.8 --- ---- ---- ---- Total gross profit $41.2 $77.0 $138.5 $172.7 ===== ===== ====== ====== Specialty products segment gross profit quarter over quarter was primarily impacted by lower overall specialty product selling prices in relation to crude oil prices compared to the 2008 quarter due to lower demand resulting from the economic downturn. In addition, specialty products segment gross profit was negatively impacted by lower sales volumes in lubricating oils, solvents and waxes due to economic conditions impacting product demand. The decrease in fuel products segment gross profit quarter over quarter was due primarily to decreasing selling prices as compared to the average cost of crude oil as fuel products crack spreads declined significantly quarter over quarter. These losses were partially offset by increased gains on derivatives recorded in gross profit of $17.5 million and lower cost of sales of $10.3 million resulting from the liquidation of lower cost inventory layers in 2009. "The continued economic weakness during the third quarter and decline in fuel products crack spreads weighed negatively on our results. We continue to work on controlling costs, executing our hedging strategies and completing small, short-term payback projects to improve our results," said Bill Grube, Calumet's CEO and President. Quarterly Distribution On October 20, 2009, the Partnership declared a quarterly cash distribution of $0.45 per unit for the quarter ended September 30, 2009 on all outstanding units. The distribution will be paid on November 13, 2009 to unitholders of record as of the close of business on November 3, 2009. Operations Summary The following table sets forth unaudited information about our combined operations. Production volume differs from sales volume due to changes in inventory. Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- Sales volume (bpd): Specialty products 26,108 28,467 25,579 30,215 Fuel products 32,522 28,587 31,718 28,723 ------ ------ ------ Total (1) 58,630 57,054 57,297 58,938 ====== ====== ====== ====== Total feedstock runs (bpd) (2)(3) 59,949 57,263 61,069 57,985 Facility production (bpd): Specialty products: Lubricating oils 13,118 13,257 11,481 13,108 Solvents 7,923 7,779 7,868 8,489 Waxes 1,274 1,518 1,082 1,851 Fuels 941 1,141 811 1,157 Asphalt and other by-products 7,667 6,691 7,694 6,872 ----- ----- ----- ----- Total 30,923 30,386 28,936 31,477 ------ ------ ------ ------ Fuel products: Gasoline 9,144 8,394 9,841 8,636 Diesel 12,079 10,548 12,662 10,580 Jet fuel 7,328 6,613 7,184 6,089 By-products 562 271 529 344 --- --- --- --- Total 29,113 25,826 30,216 25,649 ------ ------ ------ ------ Total facility production (3) 60,036 56,212 59,152 57,126 ====== ====== ====== ====== 1. Total sales volume includes sales from the production of our facilities and certain third-party facilities pursuant to supply and/or processing agreements, and sales of inventories. 2. Total feedstock runs represents the barrels per day of crude oil and other feedstocks processed at our facilities and certain third-party facilities pursuant to supply and/or processing agreements. The increase in feedstock runs for the three months ended September 30, 2009 as compared to the same period in 2008 is primarily due to increased run rates at the Shreveport refinery due to increased operational efficiencies. 3. Total facility production represents the barrels per day of specialty products and fuel products yielded from processing crude oil and other feedstocks at our facilities and certain third-party facilities pursuant to supply and/or processing agreements. The difference between total production and total feedstock runs is primarily a result of the time lag between the input of feedstock and production of finished products and volume loss. Credit Agreement Covenant Compliance Compliance with the financial covenants pursuant to our credit agreements is measured quarterly based upon performance over the most recent four fiscal quarters, and as of September 30, 2009, we continued to be in compliance with all financial covenants under our credit agreements. While assurances cannot be made regarding our future compliance with these covenants and being cognizant of the general uncertain economic environment, we believe that we will continue to maintain compliance with such financial covenants. Revolving Credit Facility Capacity On September 30, 2009, we had availability on our revolving credit facility of $89.5 million, based on a $200.6 million borrowing base, $41.9 million in outstanding standby letters of credit, and borrowings of $69.1 million. We believe that we have sufficient cash flow from operations and borrowing capacity to meet our financial commitments, debt service obligations, contingencies and anticipated capital expenditures. However, we are subject to business and operational risks that could materially adversely affect our cash flows. A material decrease in our cash flow from operations or a significant, sustained decline in crude oil prices would likely produce a corollary material adverse effect on our borrowing capacity under our revolving credit facility and potentially our ability to comply with the covenants under our credit facilities. Substantial declines in crude oil prices, if sustained, may materially diminish our borrowing base, which is based in part on the value of our crude oil inventory, which could result in a material reduction in our borrowing capacity under our revolving credit facility. A significant increase in crude oil prices, if sustained, would likely result in increased working capital funded by borrowings under our revolving credit facility. About the Partnership The Partnership is a leading independent producer of high-quality, specialty hydrocarbon products in North America. The Partnership processes crude oil and other feedstocks into customized lubricating oils, white oils, solvents, petrolatums, waxes and other specialty products used in consumer, industrial and automotive products. The Partnership also produces fuel products including gasoline, diesel and jet fuel. The Partnership is based in Indianapolis, Indiana and has five facilities located in northwest Louisiana, western Pennsylvania and southeastern Texas. A conference call is scheduled for 1:00 p.m. ET (12:00 p.m. CT) on Wednesday, November 4, 2009, to discuss the financial and operational results for the third quarter of 2009. Anyone interested in listening to the presentation may call 866-272-9941 and enter passcode 65132315. For international callers, the dial-in number is 617-213-8895 and the passcode is 65132315. The telephonic replay of the conference call is available in the United States by calling 888-286-8010 and entering passcode 58473570. International callers can access the replay by calling 617-801-6888 and entering passcode 58473570. The replay will be available beginning Wednesday, November 4, 2009, at approximately 4:00 p.m. until Wednesday, November 18, 2009. The information contained in this press release is available on the Partnership's website at http://www.calumetspecialty.com/. Cautionary Statement Regarding Forward-Looking Statements Some of the information in this release may contain forward-looking statements. These statements can be identified by the use of forward-looking terminology including "may," "believe," "expect," "anticipate," "estimate," "continue," or other similar words. These statements discuss future expectations, contain projections of results of operations or of financial condition, or state other "forward-looking" information. These forward-looking statements involve risks and uncertainties that are difficult to predict and may be beyond our control. These risks and uncertainties include the overall demand for specialty hydrocarbon products, fuels and other refined products; our ability to produce specialty products and fuels that meet our customers' unique and precise specifications; the impact of fluctuations and rapid increases and decreases in crude oil and crack spread prices, including the impact on our liquidity; the results of the Partnership's hedging and risk management activities; the availability of, and the Partnership's ability to consummate, acquisition or combination opportunities; labor relations; the ability of the Partnership to comply with the financial covenants contained in its credit facilities; the Partnership's access to capital to fund acquisitions and its ability to obtain debt or equity financing on satisfactory terms; successful integration and future performance of acquired assets or businesses; environmental liabilities or events that are not covered by an indemnity; insurance or existing reserves; maintenance of the Partnership's credit ratings and ability to receive open credit from its suppliers; demand for various grades of crude oil and resulting changes in pricing conditions; fluctuations in refinery capacity; the effects of competition; continued creditworthiness of, and performance by, counterparties; the impact of current and future laws, rulings and governmental regulations; shortages or cost increases of power supplies, natural gas, materials or labor; hurricane or other weather interference with business operations; fluctuations in the debt and equity markets; and general economic, market or business conditions. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements included in this release as well as the Partnership's most recent Form 10-K and 2009 Forms 10-Q filed with the Securities and Exchange Commission, which could cause the Partnership's actual results to differ materially from those contained in any forward-looking statement. Non-GAAP Financial Measures We include in this release the non-GAAP financial measures of EBITDA, Adjusted EBITDA and Distributable Cash Flow, and provide reconciliations of net income (loss) to EBITDA, Adjusted EBITDA and Distributable Cash Flow and (in the case of EBITDA and Adjusted EBITDA) to net cash provided by operating activities, our most directly comparable financial performance and liquidity measures calculated and presented in accordance with GAAP. EBITDA and Adjusted EBITDA are used as supplemental financial measures by our management and by external users of our financial statements such as investors, commercial banks, research analysts and others to assess: -- the financial performance of our assets without regard to financing methods, capital structure or historical cost basis; -- the ability of our assets to generate cash sufficient to pay interest costs and support our indebtedness; -- our operating performance and return on capital as compared to those of other companies in our industry, without regard to financing or capital structure; and -- the viability of acquisitions and capital expenditure projects and the overall rates of return on alternative investment opportunities. We define EBITDA as net income plus interest expense (including debt extinguishment costs), taxes and depreciation and amortization. We define Adjusted EBITDA to be Consolidated EBITDA as defined in our credit facility agreements. Consistent with that definition, Adjusted EBITDA, for any period, equals: (1) net income plus (2)(a) interest expense; (b) taxes; (c) depreciation and amortization; (d) unrealized losses from mark to market accounting for derivative activities; (e) unrealized items decreasing net income (including the non-cash impact of restructuring; decommissioning and asset impairments in the periods presented); (f) other non-recurring expenses reducing net income which do not represent a cash item for such period; and (g) all non-recurring restructuring charges associated with the Penreco acquisition minus (3)(a) tax credits; (b) unrealized items increasing net income (including the non-cash impact of restructuring, decommissioning and asset impairments in the periods presented); (c) unrealized gains from mark to market accounting for derivative activities; and (d) other non-cash recurring expenses and unrealized items that reduced net income for a prior period, but represent a cash item in the current period. We are required to report Adjusted EBITDA to our lenders under our credit facilities and it is used to determine our compliance with the consolidated leverage and interest coverage tests thereunder. We believe that Distributable Cash Flow provides additional information for investors to evaluate the Partnership's ability to declare and pay distributions to unitholders. We define Distributable Cash Flow as Adjusted EBITDA less replacement capital expenditures, cash interest paid (excluding capitalized interest) and income tax expense. CALUMET SPECIALTY PRODUCTS PARTNERS, L.P. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended For the Nine Months Ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- (In thousands, except per unit data) Sales $492,431 $724,371 $1,350,735 $1,990,315 Cost of sales 451,275 647,397 1,212,241 1,817,625 ------- ------- --------- --------- Gross profit 41,156 76,974 138,494 172,690 ------ ------ ------- ------- Operating costs and expenses: Selling, general and administrative 7,437 11,995 23,697 29,666 Transportation 18,519 21,656 49,761 66,685 Taxes other than income taxes 1,167 1,324 3,156 3,386 Other 191 393 888 957 --- --- --- --- Operating income 13,842 41,606 60,992 71,996 ------ ------ ------ ------ Other income (expense): Interest expense (8,243) (10,670) (25,333) (24,373) Debt extinguishment costs - - - (898) Realized gain (loss) on derivative instruments 4,045 (12,621) 3,213 (12,971) Unrealized gain (loss) on derivative instruments (4,485) (30,892) 17,672 (13,866) Gain on sale of mineral rights - - - 5,770 Other (1,271) 210 (2,856) 551 ------- --- ------- --- Total other income (expense) (9,954) (53,973) (7,304) (45,787) ------- -------- ------- -------- Net income (loss) before income taxes 3,888 (12,367) 53,688 26,209 Income tax expense (79) 148 70 308 ---- --- -- --- Net income (loss) $3,967 $(12,515) $53,618 $25,901 ====== ========= ======= ======= Calculation of common unitholders' interest in net income (loss): Net income (loss) $3,967 $(12,515) $53,618 $25,901 Less: General partner's interest in net income (loss) 79 (250) 1,070 518 Subordinated unitholders' interest in net income (loss) 1,573 (4,969) 21,265 10,292 ----- ------- ------ ------ Net income (loss) available to common unitholders $2,315 $(7,296) $31,283 $15,091 ====== ======== ======= ======= Weighted average number of common units outstanding - basic and diluted 19,166 19,166 19,166 19,166 ====== ====== ====== ====== Weighted average number of subordinated units outstanding - basic and diluted 13,066 13,066 13,066 13,066 ====== ====== ====== ====== Common and subordinated unitholders' basic and diluted net income (loss) per unit 0.12 (0.38) 1.63 0.79 ==== ====== ==== ==== Cash distributions declared per common and subordinated unit $0.45 $0.45 $1.35 $1.53 ===== ===== ===== ===== Note: The Partnership has adopted the requirements under ASC 260-10, Earnings per Share (formerly EITF Issue No. 07-4, Application of the Two- Class Method under FASB Statement No. 128 to Master Limited Partnerships), and applied it retrospectively to the period ended September 30, 2008 for the calculation of common unitholders' interest in net income (loss) and its basic and diluted net income (loss) per unit, therefore the September 30, 2008 amounts differ from what was previously reported. CALUMET SPECIALTY PRODUCTS PARTNERS, L.P. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2009 December 31, 2008 ------------------ ----------------- (Unaudited) (In thousands) ASSETS Current assets: Cash and cash equivalents $2,567 $48 Accounts receivable 128,259 109,556 Inventories 131,708 118,524 Derivative assets 38,505 71,199 Prepaid expenses and other current assets 2,777 5,824 ----- ----- Total current assets 303,816 305,151 Property, plant and equipment, net 638,829 659,684 Goodwill 48,335 48,335 Other intangible assets, net 40,945 49,502 Other noncurrent assets, net 16,107 18,390 ------ ------ Total assets $1,048,032 $1,081,062 ========== ========== LIABILITIES AND PARTNERS' CAPITAL Current liabilities: Accounts payable $94,471 $87,460 Accounts payable - related party 37,682 6,395 Other current liabilities 19,864 23,360 Current portion of long-term debt 4,670 4,811 Derivative liabilities 5,269 15,827 ----- ------ Total current liabilities 161,956 137,853 Pension and postretirement benefit obligations 10,379 9,717 Other long-term liabilities 1,116 - Long-term debt, less current portion 424,965 460,280 ------- ------- Total liabilities 598,416 607,850 ------- ------- Commitments and contingencies Partners' capital: Partners' capital 426,895 417,646 Accumulated other comprehensive income 22,721 55,566 ------ ------ Total partners' capital 449,616 473,212 ------- ------- Total liabilities and partners' capital $1,048,032 $1,081,062 ========== ========== CALUMET SPECIALTY PRODUCTS PARTNERS, L.P. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, ------------- 2009 2008 ---- ---- (In thousands) Operating activities Net income $53,618 $25,901 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 48,890 42,369 Amortization of turnaround costs 5,692 1,041 Provision for doubtful accounts (766) 1,320 Non-cash debt extinguishment costs - 898 Unrealized gain on derivative instruments (17,672) 13,866 Gain on sale of mineral rights - (5,770) Other non-cash activity 3,561 305 Changes in assets and liabilities: Accounts receivable (17,937) (64,410) Inventories (13,184) 84,606 Prepaid expenses and other current assets (953) 4,641 Derivative activity 6,680 7,510 Deposits 4,000 - Other assets (4,539) (1,985) Accounts payable 38,298 (39,473) Accrued salaries, wages and benefits 1,002 1,621 Taxes payable 741 1,996 Other current liabilities 1,086 518 Pension and postretirement benefit obligations 945 725 Other long-term liabilities 1,116 - ----- --- Net cash provided by operating activities 110,578 75,679 ------- ------ Investing activities Additions to property, plant and equipment (20,718) (161,811) Acquisition of Penreco, net of cash acquired - (269,118) Settlement of derivative instruments - (6,042) Proceeds from sale of mineral rights - 6,065 Proceeds from disposal of property and equipment 793 24 --- -- Net cash used in investing activities (19,925) (430,882) -------- --------- Financing activities Proceeds from (Repayments of) borrowings, net - revolving credit facility (33,435) 85,933 Repayments of borrowings - prior term loan credit facility - (30,099) Proceeds from (Repayments of) borrowings, net - existing term loan credit facility (2,888) 358,647 Debt issuance costs - (9,633) Payments on capital lease obligations (875) (309) Change in bank overdraft (6,325) 2,190 Common units repurchased for vested phantom unit grants (164) (115) Distributions to partners (44,447) (51,339) -------- -------- Net cash provided by (used in) financing activities (88,134) 355,275 -------- ------- Net increase in cash and cash equivalents 2,519 72 Cash and cash equivalents at beginning of period 48 35 -- -- Cash and cash equivalents at end of period $2,567 $107 ====== ==== Supplemental disclosure of cash flow information Interest paid $23,124 $24,180 Income taxes paid $91 $19 === === CALUMET SPECIALTY PRODUCTS PARTNERS, L.P. RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA, AND DISTRIBUTABLE CASH FLOW Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- Unaudited Unaudited (In thousands) Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA: Net income (loss) $3,967 $(12,515) $53,618 $25,901 Add: Interest expense and debt extinguishment costs 8,243 10,670 25,333 25,271 Depreciation and amortization 15,578 15,289 46,396 39,868 Income tax expense (79) 148 70 308 ---- --- -- --- EBITDA $27,709 $13,592 $125,417 $91,348 ------- ------- -------- ------- Add: Unrealized (gain) loss from mark to market accounting for hedging activities $11,365 $33,429 $(10,430) $15,184 Prepaid non-recurring expenses and accrued non-recurring expenses, net of cash outlays 3,449 4,537 4,271 7,905 ----- ----- ----- ----- Adjusted EBITDA $42,523 $51,558 $119,258 $114,437 ------- ------- -------- -------- Less: Replacement capital expenditures (1) (4,995) (987) (12,739) (5,417) Cash interest expense (2) (7,423) (9,115) (23,124) (17,338) Income tax expense 79 (148) (70) (308) -- ----- ---- ----- Distributable Cash Flow $30,184 $41,308 $83,325 $91,374 ------- ------- ------- ------- 1. Replacement capital expenditures are defined as those capital expenditures which do not increase operating capacity or sales from existing levels. 2. Represents cash interest paid by the Partnership, excluding capitalized interest. CALUMET SPECIALTY PRODUCTS PARTNERS, L.P. RECONCILIATION OF ADJUSTED EBITDA AND EBITDA TO NET CASH PROVIDED BY OPERATING ACTIVITIES Nine Months Ended September 30, ------------- 2009 2008 ---- ---- Unaudited (In thousands) Reconciliation of Adjusted EBITDA and EBITDA to net cash provided by operating activities: Adjusted EBITDA $119,258 $114,437 Add: Unrealized gain (loss) from mark to market accounting for hedging activities 10,430 (15,184) Prepaid non-recurring expenses and accrued non-recurring expenses, net of cash outlays (4,271) (7,905) ------- ------- EBITDA $125,417 $91,348 ======== ======= Add: Interest expense and debt extinguishment costs, net (22,597) (22,679) Unrealized (gain) loss on derivative instruments (17,672) 13,866 Income taxes (70) (308) Provision for doubtful accounts (766) 1,320 Debt extinguishment costs - 898 Changes in assets and liabilities: Accounts receivable (17,937) (64,410) Inventory (13,184) 84,606 Other current assets 3,047 4,641 Derivative activity 6,680 7,510 Accounts payable 38,298 (39,473) Other current liabilities 2,829 4,135 Other, including changes in noncurrent assets and liabilities 6,533 (5,775) ----- ------- Net cash provided by operating activities $110,578 $75,679 ======== ======= CALUMET SPECIALTY PRODUCTS PARTNERS, L.P. UPDATE ON EXISTING COMMODITY DERIVATIVE INSTRUMENTS September 30, 2009 Fuel Products Segment The following tables provide information about our derivative instruments related to our fuel products segment as of September 30, 2009: Crude Oil Swap Contracts by Barrels Expiration Dates Purchased BPD ($/Bbl) --------------------------- --------- --- ------- Fourth Quarter 2009 2,070,000 22,500 66.26 Calendar Year 2010 7,300,000 20,000 67.29 Calendar Year 2011 5,384,000 14,751 76.24 --------- ----- Totals 14,754,000 Average price $70.41 Diesel Swap Contracts by Expiration Dates Barrels Sold BPD ($/Bbl) ----------------- ------------ --- ------ Fourth Quarter 2009 1,196,000 13,000 80.51 Calendar Year 2010 4,745,000 13,000 80.41 Calendar Year 2011 2,371,000 6,496 90.58 --------- ----- Totals 8,312,000 Average price $83.32 Jet Fuel Swap Contracts by Expiration Dates Barrels Sold BPD ($/Bbl) ----------------- ------------ --- ------- Calendar Year 2011 2,284,000 6,258 $87.88 --------- ------ Totals 2,284,000 Average price $87.88 Gasoline Swap Contracts by Expiration Dates Barrels Sold BPD ($/Bbl) ----------------- ------------ --- ------- Fourth Quarter 2009 874,000 9,500 73.83 Calendar Year 2010 2,555,000 7,000 75.28 Calendar Year 2011 729,000 1,997 83.53 ------- ----- Totals 4,158,000 Average price $76.42 The following table provides a summary of these derivatives and implied crack spreads for the crude oil, diesel and gasoline swaps disclosed above, all of which are designated as hedges. Swap Contracts by Barrels Implied Crack Expiration Dates Sold BPD Spread ($/Bbl) ----------------- ---- --- -------------- Fourth Quarter 2009 2,070,000 22,500 11.43 Calendar Year 2010 7,300,000 20,000 11.32 Calendar Year 2011 5,384,000 14,751 12.19 --------- ----- Totals 14,754,000 Average price $11.65 At September 30, 2009, the Company had the following derivatives related to crude oil sales and gasoline purchases in its fuel products segment, none of which are designated as hedges. Crude Oil Swap Contracts by Barrels Expiration Dates Sold BPD ($/Bbl) ----------------- ---- --- ------- Fourth Quarter 2009 460,000 5,000 62.66 Calendar Year 2010 547,500 1,500 58.25 ------- ----- Totals 1,007,500 Average price $60.26 Gasoline Swap Contracts by Barrels Expiration Dates Purchased BPD ($/Bbl) ----------------- --------- --- ------- Fourth Quarter 2009 460,000 5,000 60.53 Calendar Year 2010 547,500 1,500 58.42 ------- ----- Totals 1,007,500 Average price $59.38 To summarize, at September 30, 2009, the Company had the following crude oil and gasoline derivative instruments not designated as hedges in its fuel products segment. These trades were used to economically lock in a portion of the mark-to-market valuation gain for the above crack spread trades. Swap Contracts by Expiration Barrels Implied Crack Dates Purchased BPD Spread ($/Bbl) ------ --------- --- -------------- Fourth Quarter 2009 460,000 5,000 (2.13) Calendar 2010 547,500 1,500 0.17 ------- ---- Totals 1,007,500 Average price $(0.88) At September 30, 2009, the Company had the following put options related to jet fuel crack spreads in its fuel products segment, none of which are designated as hedges. Average Average Sold Bought Jet Fuel Put/Option Crack Spread Put Put Contracts by Expiration Dates Barrels BPD ($/Bbl) ($/Bbl) ------------------------------ ------- --- ------- ------- January 2011 216,500 6,984 $4.00 $6.00 February 2011 197,000 7,036 4.00 6.00 March 2011 216,500 6,984 4.00 6.00 ------- ---- ---- Totals 630,000 Average price $4.00 $6.00 Specialty Products Segment At September 30, 2009, the Company had the following crude oil derivative instruments related to crude oil purchases in its specialty products segment, none of which are designated as hedges. Average Average Average Crude Oil Put/Swap/Call Bought Put Swap Sold Call Contracts by Expiration Dates Barrels BPD ($/Bbl) ($/Bbl) ($/Bbl) ------------------------------ ------- --- ------- ------- ------ October 2009 248,000 8,000 $57.33 $71.09 $81.09 November 2009 150,000 5,000 56.17 69.64 79.64 December 2009 62,000 2,000 56.30 68.55 78.55 ------ ----- ----- ----- Totals 460,000 Average price $56.81 $70.27 $80.27 DATASOURCE: Calumet Specialty Products Partners, L.P. CONTACT: Jennifer Straumins, Investor Relations of Calumet Specialty Products Partners, L.P., +1-317-328-5660 Web Site: http://www.calumetspecialty.com/

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