Calumet Specialty Products Partners LP has reported a net loss for the 3Q15 of US$48.9 million, or US$0.68 per limited partner unit, compared to net income of US$9.4 million, or US$0.08 per diluted unit for the same quarter in 2014. Excluding special items, Calumet reported Adjusted Net Income of US$71.1 million, or US$0.86 per diluted unit, for the 3Q15.
Third quarter 2015 Adjusted Net Income excludes four special items:
- A US$56.9 million non-cash loss related to a lower of cost or market (LCM) inventory adjustment, including a US$46.5 million unfavorable LCM inventory adjustment in the fuel products segment, a US$12.2 million unfavorable LCM inventory adjustment in the specialty products segment and a US$1.8 million favorable LCM inventory adjustment in the oilfield services segment.
- A US$33.8 million non-cash goodwill impairment charge related to the company’s oilfield services segment.
- A US$24.3 million non-cash impairment charge related to the impairment of the company’s minority investment in the Juniper GTL LLC ("Juniper") gas-to-liquids joint venture, resulting primarily from a lack of committed funding for the joint venture from a consortium of potential investors.
- A US$5.0 million unrealized loss on derivative instruments. For detailed information on the reconciliation of special items, please see the section of this press release entitled "Reconciliation of Net income (loss) to Adjusted Net Income."
Excluding special items, Calumet reported Adjusted EBITDA (as defined below in the section of this press release titled "Non-GAAP Financial Measures") of US$131.7 million for the 3Q15, versus US$110.7 million for the prior year period. Calumet's 3Q15 results were driven by improved margin capture within the company’s fuels refining system, coupled with a more favorable sales mix within the specialty products segment, which more than offset a significant year over year narrowing in crude oil price differentials and scheduled maintenance outages at the company’s Shreveport and San Antonio refineries. For detailed information on the reconciliation of special items, please see the section of this press release entitled "Reconciliation of Net income (loss) to EBITDA, Adjusted EBITDA and Adjusted EBITDA, Excluding Special Items."
Distributable Cash Flow (DCF) (as defined below in the section of this press release titled "Non-GAAP Financial Measures") was US$44.9 million in the third quarter 2015, including an unfavorable non-cash LCM inventory adjustment of US$56.3 million, down from DCF of US$72.3 million in the prior year period. The year over year decrease was primarily driven by lower reported gross profit and higher replacement, environmental and turnaround expenditures.
"The Partnership's third quarter results were driven by a combination of strong operational reliability across our refining system and significant gross profit expansion within the fuel products segment, coupled with another solid performance from our specialty products segment," stated Bill Hatch, Interim CEO of Calumet. "Adjusted EBITDA, excluding special items, increased on a year over year basis by nearly 20% to a record $131.7 million in the third quarter, supported by robust refining economics at our niche fuels refineries in Wisconsin and Montana in particular, where product prices were at a premium to the Gulf Coast benchmark during the period."
“On behalf of our Board of Directors and senior management team, I want to express our gratitude to Calumet's many dedicated employees, valued customers and business partners, each of whom had a hand in contributing to our record third quarter results," conintued Hatch. "Together, we remain committed to building the premier petroleum-based specialty products company in the markets we serve, driven by an unwavering focus on returning consistent value to our investors."
On 14 September 2015, the general partner's Board of Directors named energy industry veteran Tim Go as the Partnership's incoming CEO, effective 1 January 2016. Mr. Go, 48, joins Calumet with more than 25 years of experience serving in executive-level roles at leading companies operating in the petroleum refining and specialty products markets. As CEO, Mr. Go will lead and execute Calumet's long-term strategy to become the premier global producer and distributor of specialty petroleum products.
Bill Hatch will remain Interim CEO of Calumet until 31 December 2015. At the conclusion of his term as Interim CEO, Mr. Hatch will remain with Calumet as an Executive Advisor to the Partnership. In this newly created role, Mr. Hatch will assist Calumet in broad-based efforts to streamline business processes and improve operational efficiencies throughout the organisation.
Edited from press release by Angharad Lock
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