☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | 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) | |
2780 Waterfront Parkway East Drive, Suite 200 | ||
Indianapolis, Indiana | 46214 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
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 |
Page | |
September 30, 2019 | December 31, 2018 | ||||||
(Unaudited) | |||||||
(In millions, except unit data) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 164.2 | $ | 155.7 | |||
Accounts receivable, net: | |||||||
Trade | 216.0 | 177.7 | |||||
Other | 24.7 | 20.3 | |||||
240.7 | 198.0 | ||||||
Inventories | 293.3 | 284.1 | |||||
Derivative assets | 0.8 | 18.3 | |||||
Prepaid expenses and other current assets | 11.5 | 13.9 | |||||
Total current assets | 710.5 | 670.0 | |||||
Property, plant and equipment, net | 1,050.1 | 1,098.1 | |||||
Investment in unconsolidated affiliates | 5.7 | 25.4 | |||||
Goodwill | 171.4 | 171.4 | |||||
Other intangible assets, net | 75.4 | 88.0 | |||||
Operating lease right-of-use assets | 110.5 | — | |||||
Other noncurrent assets, net | 37.7 | 34.6 | |||||
Total assets | $ | 2,161.3 | $ | 2,087.5 | |||
LIABILITIES AND PARTNERS’ CAPITAL | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 270.2 | $ | 200.6 | |||
Accrued interest payable | 40.9 | 30.7 | |||||
Accrued salaries, wages and benefits | 31.9 | 25.7 | |||||
Other taxes payable | 21.2 | 15.2 | |||||
Obligations under inventory financing agreements | 117.0 | 105.3 | |||||
Other current liabilities | 70.4 | 33.8 | |||||
Current portion of operating lease liabilities | 62.3 | — | |||||
Current portion of long-term debt | 123.5 | 3.8 | |||||
Total current liabilities | 737.4 | 415.1 | |||||
Pension and postretirement benefit obligations | 4.5 | 4.5 | |||||
Other long-term liabilities | 1.5 | 1.5 | |||||
Long-term operating lease liabilities | 48.9 | — | |||||
Long-term debt, less current portion | 1,306.2 | 1,600.7 | |||||
Total liabilities | 2,098.5 | 2,021.8 | |||||
Commitments and contingencies | |||||||
Partners’ capital: | |||||||
Limited partners’ interest 77,556,190 units and 77,177,159 units issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 57.5 | 61.6 | |||||
General partner’s interest | 12.8 | 12.8 | |||||
Accumulated other comprehensive loss | (7.5 | ) | (8.7 | ) | |||
Total partners’ capital | 62.8 | 65.7 | |||||
Total liabilities and partners’ capital | $ | 2,161.3 | $ | 2,087.5 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(In millions, except per unit and unit data) | |||||||||||||||
Sales | $ | 929.6 | $ | 953.5 | $ | 2,677.8 | $ | 2,649.5 | |||||||
Cost of sales | 811.8 | 850.2 | 2,316.9 | 2,313.7 | |||||||||||
Gross profit | 117.8 | 103.3 | 360.9 | 335.8 | |||||||||||
Operating costs and expenses: | |||||||||||||||
Selling | 12.6 | 12.2 | 40.2 | 39.6 | |||||||||||
General and administrative | 32.8 | 29.2 | 105.5 | 95.5 | |||||||||||
Transportation | 28.4 | 36.4 | 95.9 | 99.7 | |||||||||||
Taxes other than income taxes | 5.7 | 5.9 | 15.5 | 13.2 | |||||||||||
Loss on impairment and disposal of assets | 3.2 | — | 31.1 | — | |||||||||||
Other operating (income) expense | 1.7 | (2.0 | ) | 0.8 | (18.7 | ) | |||||||||
Operating income | 33.4 | 21.6 | 71.9 | 106.5 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (33.8 | ) | (37.7 | ) | (99.2 | ) | (120.4 | ) | |||||||
Gain (loss) from debt extinguishment | — | — | 0.7 | (58.8 | ) | ||||||||||
Gain (loss) on derivative instruments | (5.0 | ) | (2.7 | ) | 14.4 | (2.0 | ) | ||||||||
Other | 1.3 | 3.2 | 7.9 | 5.6 | |||||||||||
Total other expense | (37.5 | ) | (37.2 | ) | (76.2 | ) | (175.6 | ) | |||||||
Net loss from continuing operations before income taxes | (4.1 | ) | (15.6 | ) | (4.3 | ) | (69.1 | ) | |||||||
Income tax expense from continuing operations | 0.5 | 0.4 | 0.7 | 1.0 | |||||||||||
Net loss from continuing operations | $ | (4.6 | ) | $ | (16.0 | ) | $ | (5.0 | ) | $ | (70.1 | ) | |||
Net loss from discontinued operations, net of tax | $ | — | $ | (0.5 | ) | $ | — | $ | (3.1 | ) | |||||
Net loss | $ | (4.6 | ) | $ | (16.5 | ) | $ | (5.0 | ) | $ | (73.2 | ) | |||
Allocation of net loss: | |||||||||||||||
Net loss | $ | (4.6 | ) | $ | (16.5 | ) | $ | (5.0 | ) | $ | (73.2 | ) | |||
Less: | |||||||||||||||
General partner’s interest in net loss | (0.1 | ) | (0.4 | ) | (0.1 | ) | (1.5 | ) | |||||||
Net loss available to limited partners | $ | (4.5 | ) | $ | (16.1 | ) | $ | (4.9 | ) | $ | (71.7 | ) | |||
Weighted average limited partner units outstanding: | |||||||||||||||
Basic and diluted | 78,299,472 | 77,783,879 | 78,174,976 | 77,643,006 | |||||||||||
Limited partners’ interest basic and diluted net loss per unit: | |||||||||||||||
From continuing operations | $ | (0.06 | ) | $ | (0.20 | ) | $ | (0.06 | ) | $ | (0.88 | ) | |||
From discontinued operations | — | (0.01 | ) | — | (0.04 | ) | |||||||||
Limited partners’ interest | $ | (0.06 | ) | $ | (0.21 | ) | $ | (0.06 | ) | $ | (0.92 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(In millions) | |||||||||||||||
Net loss | $ | (4.6 | ) | $ | (16.5 | ) | $ | (5.0 | ) | $ | (73.2 | ) | |||
Other comprehensive income: | |||||||||||||||
Cash flow hedges: | |||||||||||||||
Cash flow hedge loss reclassified to net loss | — | 0.7 | — | 2.8 | |||||||||||
Defined benefit pension and retiree health benefit plans | — | — | — | 0.1 | |||||||||||
Foreign currency translation adjustment | — | — | 1.2 | — | |||||||||||
Total other comprehensive income | — | 0.7 | 1.2 | 2.9 | |||||||||||
Comprehensive loss attributable to partners’ capital | $ | (4.6 | ) | $ | (15.8 | ) | $ | (3.8 | ) | $ | (70.3 | ) |
Accumulated Other Comprehensive Loss | Partners’ Capital | ||||||||||||||
General Partner | Limited Partners | Total | |||||||||||||
(In millions) | |||||||||||||||
Balance at June 30, 2019 | $ | (7.5 | ) | $ | 12.9 | $ | 61.7 | $ | 67.1 | ||||||
Net loss | — | (0.1 | ) | (4.5 | ) | (4.6 | ) | ||||||||
Amortization of phantom units | — | — | 0.3 | 0.3 | |||||||||||
Balance at September 30, 2019 | $ | (7.5 | ) | $ | 12.8 | $ | 57.5 | $ | 62.8 |
Accumulated Other Comprehensive Loss | Partners’ Capital | ||||||||||||||
General Partner | Limited Partners | Total | |||||||||||||
(In millions) | |||||||||||||||
Balance at December 31, 2018 | $ | (8.7 | ) | $ | 12.8 | $ | 61.6 | $ | 65.7 | ||||||
Other comprehensive income | 1.2 | — | — | 1.2 | |||||||||||
Net loss | — | (0.1 | ) | (4.9 | ) | (5.0 | ) | ||||||||
Amortization of phantom units | — | — | 1.3 | 1.3 | |||||||||||
Settlement of tax withholdings on equity-based incentive compensation | — | — | (0.5 | ) | (0.5 | ) | |||||||||
Contributions from Calumet GP, LLC | — | 0.1 | — | 0.1 | |||||||||||
Balance at September 30, 2019 | $ | (7.5 | ) | $ | 12.8 | $ | 57.5 | $ | 62.8 |
Accumulated Other Comprehensive Loss | Partners’ Capital | ||||||||||||||
General Partner | Limited Partners | Total | |||||||||||||
(In millions) | |||||||||||||||
Balance at June 30, 2018 | $ | (5.0 | ) | $ | 12.7 | $ | 58.9 | $ | 66.6 | ||||||
Other comprehensive income | 0.7 | — | — | 0.7 | |||||||||||
Net loss | — | (0.4 | ) | (16.1 | ) | (16.5 | ) | ||||||||
Amortization of phantom units | — | — | 0.7 | 0.7 | |||||||||||
Settlement of tax withholdings on equity-based incentive compensation | — | — | (0.3 | ) | (0.3 | ) | |||||||||
Balance at September 30, 2018 | $ | (4.3 | ) | $ | 12.3 | $ | 43.2 | $ | 51.2 |
Accumulated Other Comprehensive Loss | Partners’ Capital | ||||||||||||||
General Partner | Limited Partners | Total | |||||||||||||
(In millions) | |||||||||||||||
Balance at December 31, 2017 | $ | (7.2 | ) | $ | 13.8 | $ | 113.3 | $ | 119.9 | ||||||
Other comprehensive income | 2.9 | — | — | 2.9 | |||||||||||
Net loss | — | (1.5 | ) | (71.7 | ) | (73.2 | ) | ||||||||
Amortization of phantom units | — | — | 2.8 | 2.8 | |||||||||||
Settlement of tax withholdings on equity-based incentive compensation | — | — | (1.2 | ) | (1.2 | ) | |||||||||
Balance at September 30, 2018 | $ | (4.3 | ) | $ | 12.3 | $ | 43.2 | $ | 51.2 |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
(In millions) | |||||||
Operating activities | |||||||
Net loss | $ | (5.0 | ) | $ | (73.2 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Net loss from discontinued operations | — | 3.1 | |||||
Depreciation and amortization | 82.6 | 88.8 | |||||
Amortization of turnaround costs | 16.5 | 8.7 | |||||
Non-cash interest expense | 4.9 | 6.1 | |||||
(Gain) loss on debt extinguishments | (0.7 | ) | 58.8 | ||||
Unrealized (gain) loss on derivative instruments | 20.2 | (0.4 | ) | ||||
Equity based compensation | 4.9 | 2.8 | |||||
Lower of cost or market inventory adjustment | (38.8 | ) | (12.0 | ) | |||
Loss on impairment and disposal of assets | 31.1 | — | |||||
Operating lease expense | 57.1 | — | |||||
Operating lease payments | (57.1 | ) | — | ||||
Other non-cash activities | (7.0 | ) | (3.0 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | (49.8 | ) | 29.0 | ||||
Inventories | 29.6 | (34.4 | ) | ||||
Prepaid expenses and other current assets | 4.6 | (3.8 | ) | ||||
Derivative activity | (0.4 | ) | (0.4 | ) | |||
Turnaround costs | (16.8 | ) | (11.1 | ) | |||
Accounts payable | 61.7 | (32.5 | ) | ||||
Accrued interest payable | 10.8 | (7.0 | ) | ||||
Accrued salaries, wages and benefits | 2.6 | (4.5 | ) | ||||
Other taxes payable | 6.0 | 8.5 | |||||
Other liabilities | (3.1 | ) | (52.7 | ) | |||
Pension and postretirement benefit obligations | — | (0.1 | ) | ||||
Net cash provided by (used in) operating activities | 153.9 | (29.3 | ) | ||||
Investing activities | |||||||
Additions to property, plant and equipment | (27.4 | ) | (41.3 | ) | |||
Investment in unconsolidated affiliate | — | (3.8 | ) | ||||
Proceeds from sale of unconsolidated affiliate | 5.0 | 9.9 | |||||
Proceeds from sale of business, net | — | 44.8 | |||||
Proceeds from sale of property, plant and equipment | 3.7 | 0.3 | |||||
Net cash provided by discontinued investing activities | 5.0 | 3.6 | |||||
Net cash provided by (used in) investing activities | (13.7 | ) | 13.5 | ||||
Financing activities | |||||||
Proceeds from borrowings — revolving credit facility | — | 166.8 | |||||
Repayments of borrowings — revolving credit facility | — | (166.9 | ) | ||||
Repayments of borrowings — senior notes | (137.3 | ) | (400.0 | ) | |||
Payments on finance lease obligations | (0.9 | ) | (2.2 | ) | |||
Proceeds from inventory financing agreements | 848.7 | 867.0 | |||||
Payments on inventory financing agreements | (840.7 | ) | (850.6 | ) | |||
Proceeds from other financing obligations | — | 4.6 | |||||
Payments on other financing obligations | (1.6 | ) | (2.3 | ) | |||
Payments on extinguishment of debt | — | (46.6 | ) | ||||
Debt issuance costs | — | (2.9 | ) | ||||
Contributions from Calumet GP, LLC | 0.1 | 0.1 | |||||
Net cash used in financing activities | (131.7 | ) | (433.0 | ) | |||
Net increase (decrease) in cash and cash equivalents | 8.5 | (448.8 | ) | ||||
Cash and cash equivalents at beginning of period | 155.7 | 514.3 | |||||
Cash and cash equivalents at end of period | $ | 164.2 | $ | 65.5 | |||
Supplemental disclosure of non-cash investing activities | |||||||
Non-cash property, plant and equipment additions | $ | 12.3 | $ | 1.1 |
September 30, 2019 | December 31, 2018 | ||||||
RINs Obligation | $ | 14.4 | $ | 15.8 | |||
Other (1) | 56.0 | 18.0 | |||||
Total | $ | 70.4 | $ | 33.8 |
(1) | Balance as of September 30, 2019 includes $38.1 million related to the reclassification of the present value of the TexStar finance lease obligation in the first quarter of 2019 from current and long-term debt to other current liabilities. See Note 7 - “Commitments and Contingencies” for further information. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Sales by major source | |||||||||||||||
Standard specialty products | $ | 296.2 | $ | 285.2 | $ | 872.2 | $ | 848.7 | |||||||
Packaged and synthetic specialty products | 59.6 | 64.0 | 180.2 | 204.9 | |||||||||||
Total specialty products | $ | 355.8 | $ | 349.2 | $ | 1,052.4 | $ | 1,053.6 | |||||||
Fuel and fuel related products | $ | 508.4 | $ | 525.9 | $ | 1,446.3 | $ | 1,422.2 | |||||||
Asphalt | 65.4 | 78.4 | 179.1 | 173.7 | |||||||||||
Total fuel products | $ | 573.8 | $ | 604.3 | $ | 1,625.4 | $ | 1,595.9 | |||||||
Total sales | $ | 929.6 | $ | 953.5 | $ | 2,677.8 | $ | 2,649.5 |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||
Titled Inventory | Supply and Offtake Agreements (1) | Total | Titled Inventory | Supply and Offtake Agreements (1) | Total | ||||||||||||||||||
Raw materials | $ | 43.9 | $ | 14.7 | $ | 58.6 | $ | 41.8 | $ | 10.6 | $ | 52.4 | |||||||||||
Work in process | 37.0 | 32.7 | 69.7 | 40.7 | 19.2 | 59.9 | |||||||||||||||||
Finished goods | 112.1 | 52.9 | 165.0 | 127.9 | 43.9 | 171.8 | |||||||||||||||||
$ | 193.0 | $ | 100.3 | $ | 293.3 | $ | 210.4 | $ | 73.7 | $ | 284.1 |
(1) | Amounts represent LIFO value and do not necessarily represent the value of product financing. Refer to Note 8 - “Inventory Financing Agreements” for further information. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2018 | |||||||
Other | (0.5 | ) | (3.1 | ) | |||
Net loss from discontinued operations net of income taxes | $ | (0.5 | ) | $ | (3.1 | ) |
September 30, 2019 | December 31, 2018 | ||||||
Fluid Holding Corp. | 5.7 | 25.4 | |||||
Total | $ | 5.7 | $ | 25.4 |
Facility/ Refinery | Union | Expiration Date | ||
Cotton Valley | International Union of Operating Engineers | January 15, 2023 | ||
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 | ||
Great Falls | United Steel, Paper and Forestry, Rubber, Manufacturing, Energy Allied-Industrial and Service Workers International Union | July 31, 2022 |
Year | Commitment | ||
2020 | $ | 3.6 | |
2021 | 3.4 | ||
2022 | 3.1 | ||
2023 | 2.9 | ||
2024 | 2.7 | ||
Thereafter | 4.9 | ||
Total | $ | 20.6 |
September 30, 2019 | December 31, 2018 | ||||||
Borrowings under third amended and restated senior secured revolving credit agreement with third-party lenders, interest payments quarterly, borrowings due February 2023, weighted average interest rate of 0.2% and 6.0% for the nine months ended September 30, 2019 and year ended December 31, 2018, respectively. | $ | — | $ | — | |||
Borrowings under 2021 Notes, interest at a fixed rate of 6.50%, interest payments semiannually, borrowings due April 2021, effective interest rate of 6.8% for each of the nine months ended September 30, 2019 and the year ended December 31, 2018. | 761.2 | 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 nine months ended September 30, 2019 and the year ended December 31, 2018, respectively. (1) | 351.2 | 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 nine months ended September 30, 2019 and the year ended December 31, 2018, respectively. | 325.0 | 325.0 | |||||
Other | 4.1 | 5.2 | |||||
Finance lease obligations, at various interest rates, interest and monthly principal payments (3) | 2.8 | 42.4 | |||||
Less unamortized debt issuance costs (2) | (11.5 | ) | (15.8 | ) | |||
Less unamortized discounts | (3.1 | ) | (3.9 | ) | |||
Total long-term debt | $ | 1,429.7 | $ | 1,604.5 | |||
Less current portion of long-term debt (4) | 123.5 | 3.8 | |||||
$ | 1,306.2 | $ | 1,600.7 |
(1) | The balance includes a fair value interest rate hedge adjustment, which increased the debt balance by $1.2 million and $1.6 million as of September 30, 2019 and December 31, 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 $27.7 million and $23.5 million at September 30, 2019 and December 31, 2018, respectively. |
(3) | In the first quarter of 2019, the Company reclassified its TexStar finance lease obligation from debt to other current liabilities on the condensed consolidated balance sheets. Please see Note 7 - “Commitments and Contingencies” for further information. |
(4) | The current portion of long-term debt includes $121.7 million of the remaining 2021 Notes that the Company redeemed on October 21, 2019 with cash on hand, after the application of the net proceeds of the 2025 Notes and the $99.5 million borrowing on the expanded credit facility borrowing base. Please see Note 15 - “Subsequent Events” for further information. |
Base Loans | FILO Loans | |||||||
Quarterly Average Availability Percentage | 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 | ||
2019 | $ | 122.1 | |
2020 | 1.8 | ||
2021 | 642.1 | ||
2022 | 350.3 | ||
2023 | 325.4 | ||
Thereafter | 1.4 | ||
Total | $ | 1,443.1 |
• | crude oil purchases and sales; |
• | fuel product sales and purchases; |
• | natural gas purchases; |
• | precious metals purchases; and |
• | fluctuations in the value of crude oil between geographic regions and between the different types of crude oil such as New York Mercantile Exchange West Texas Intermediate (“NYMEX WTI”), Light Louisiana Sweet, Western Canadian Select (“WCS”), WTI Midland, Mixed Sweet Blend and ICE Brent. |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||
Balance Sheet Location | Gross Amounts of Recognized Assets | Gross Amounts Offset in the Condensed Consolidated Balance Sheets | Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | Gross Amounts of Recognized Assets | Gross Amounts Offset in the Condensed Consolidated Balance Sheets | Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | ||||||||||||||||||||
Derivative instruments not designated as hedges: | ||||||||||||||||||||||||||
Specialty products segment: | ||||||||||||||||||||||||||
Midland crude oil basis swaps | Derivative assets | $ | — | $ | — | $ | — | $ | 1.0 | $ | — | $ | 1.0 | |||||||||||||
Fuel products segment: | ||||||||||||||||||||||||||
Inventory financing obligation | Obligations under inventory financing agreements | $ | 1.5 | $ | (1.5 | ) | $ | — | $ | 1.5 | $ | — | $ | 1.5 | ||||||||||||
WCS crude oil basis swaps | Derivative assets | — | — | — | 16.5 | (1.6 | ) | 14.9 | ||||||||||||||||||
WCS crude oil percentage basis swaps | Derivative assets | 2.4 | (2.4 | ) | — | — | (6.1 | ) | (6.1 | ) | ||||||||||||||||
Midland crude oil basis swaps | Derivative assets | — | — | — | 7.1 | — | 7.1 | |||||||||||||||||||
Gasoline crack spread swaps | Derivative assets | 0.2 | (0.1 | ) | 0.1 | — | — | — | ||||||||||||||||||
Diesel crack spread swap | Derivative assets | 0.2 | — | 0.2 | 7.4 | — | 7.4 | |||||||||||||||||||
Diesel percentage basis crack spread swap | Derivative assets | 1.2 | (1.0 | ) | 0.2 | — | (6.0 | ) | (6.0 | ) | ||||||||||||||||
2/1/1 Crack spread swap | Derivative assets | 0.3 | — | 0.3 | — | — | — | |||||||||||||||||||
Total derivative instruments | $ | 5.8 | $ | (5.0 | ) | $ | 0.8 | $ | 33.5 | $ | (13.7 | ) | $ | 19.8 |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||
Balance Sheet Location | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Condensed Consolidated Balance Sheets | Net Amounts of Liabilities Presented in the Condensed Consolidated Balance Sheets | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Condensed Consolidated Balance Sheets | Net Amounts of Liabilities Presented in the Condensed Consolidated Balance Sheets | ||||||||||||||||||||
Derivative instruments not designated as hedges: | ||||||||||||||||||||||||||
Fuel products segment: | ||||||||||||||||||||||||||
Inventory financing obligation | Obligations under inventory financing agreements | $ | (2.7 | ) | $ | 1.5 | (1.2 | ) | $ | — | $ | — | $ | — | ||||||||||||
WCS crude oil basis swaps | Derivative liabilities | — | — | — | (1.6 | ) | 1.6 | — | ||||||||||||||||||
WCS crude oil percentage basis swaps | Derivative liabilities | (2.4 | ) | 2.4 | — | (6.1 | ) | 6.1 | — | |||||||||||||||||
Gasoline crack spread swaps | Derivative liabilities | (0.1 | ) | 0.1 | — | — | — | — | ||||||||||||||||||
Diesel percentage basis crack spread swaps | Derivative liabilities | (1.0 | ) | 1.0 | — | (6.0 | ) | 6.0 | — | |||||||||||||||||
Total derivative instruments | $ | (6.2 | ) | $ | 5.0 | $ | (1.2 | ) | $ | (13.7 | ) | $ | 13.7 | $ | — |
Type of Derivative | Amount of Realized Gain (Loss) Recognized in Gain (Loss) on Derivative Instruments | Amount of Unrealized Gain (Loss) Recognized in Gain (Loss) on Derivative Instruments | |||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Fuel products segment: | |||||||||||||||
Inventory financing obligation | — | — | (5.5 | ) | (9.4 | ) | |||||||||
WCS crude oil basis swaps | — | 0.4 | — | (3.4 | ) | ||||||||||
WCS crude oil percentage basis swaps | 0.1 | — | (0.3 | ) | (4.1 | ) | |||||||||
Midland crude oil basis swaps | — | (1.2 | ) | — | 10.1 | ||||||||||
Gasoline swaps | — | — | 0.1 | — | |||||||||||
2/1/1 Crack spread swaps | — | — | 0.3 | — | |||||||||||
Diesel crack spread swaps | 0.3 | 0.5 | 0.2 | (0.8 | ) | ||||||||||
Diesel percentage basis crack spread swaps | — | — | (0.2 | ) | 5.2 | ||||||||||
Total | $ | 0.4 | $ | (0.3 | ) | $ | (5.4 | ) | $ | (2.4 | ) |
Type of Derivative | Amount of Realized Gain (Loss) Recognized in Gain (Loss) on Derivative Instruments | Amount of Unrealized Gain (Loss) Recognized in Gain (Loss) on Derivative Instruments | |||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Specialty products segment: | |||||||||||||||
Midland crude oil basis swaps | 1.6 | — | (1.0 | ) | — | ||||||||||
Fuel products segment: | |||||||||||||||
Inventory financing obligation | — | — | (2.7 | ) | (16.3 | ) | |||||||||
Crude oil swaps | — | — | — | (0.3 | ) | ||||||||||
WCS crude oil basis swaps | 17.1 | 0.4 | (14.9 | ) | (2.8 | ) | |||||||||
WCS crude oil percentage basis swaps | 1.0 | — | 6.0 | (4.9 | ) | ||||||||||
Midland crude oil basis swaps | 9.0 | (1.2 | ) | (7.1 | ) | 13.0 | |||||||||
Gasoline swaps | — | — | 0.1 | 0.2 | |||||||||||
Gasoline crack spread swaps | — | (1.0 | ) | — | 1.8 | ||||||||||
2/1/1 Crack spread swaps | — | — | 0.3 | — | |||||||||||
Diesel swaps | — | — | — | 0.2 | |||||||||||
Diesel crack spread swaps | 6.4 | (0.6 | ) | (7.2 | ) | 5.1 | |||||||||
Diesel percentage basis crack spread swaps | (0.5 | ) | — | 6.3 | 4.4 | ||||||||||
Total | $ | 34.6 | $ | (2.4 | ) | $ | (20.2 | ) | $ | 0.4 |
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 price | $ | (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 price | $ | (19.84 | ) |
WCS Crude Oil Percentage Basis Swap Contracts by Expiration Dates | Barrels Purchased | BPD | Fixed Percentage of NYMEX WTI (Average % of WTI/Bbl) | |||||
Fourth Quarter 2019 | 460,000 | 5,000 | 66.32 | % | ||||
Total | 460,000 | |||||||
Average percentage | 66.32 | % |
WCS Crude Oil Percentage Basis Swap Contracts by Expiration Dates | Barrels Sold | BPD | Fixed Percentage of NYMEX WTI (Average % of WTI/Bbl) | |||||
Fourth Quarter 2019 | 460,000 | 5,000 | 66.16 | % | ||||
Total | 460,000 | |||||||
Average percentage | 66.16 | % |
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 price | $ | (12.27 | ) |
Diesel Crack Spread Swap Contracts by Expiration Dates | Barrels Sold | BPD | Average Swap ($/Bbl) | ||||||
Fourth Quarter 2019 | 62,000 | 674 | $ | 22.18 | |||||
First Quarter 2020 | 136,500 | 1,500 | $ | 22.91 | |||||
Second Quarter 2020 | 60,000 | 659 | $ | 23.10 | |||||
Total | 258,500 | ||||||||
Average price | $ | 22.78 |
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) | |||||
Fourth Quarter 2019 | 460,000 | 5,000 | 138.38 | % | ||||
Total | 460,000 | |||||||
Average percentage | 138.38 | % |
Diesel Percentage Basis Crack Spread Swap Contracts by Expiration Dates | Barrels Purchased | BPD | Fixed Percentage of NYMEX WTI (Average % of WTI/Bbl) | |||||
Fourth Quarter 2019 | 460,000 | 5,000 | 137.37 | % | ||||
Total | 460,000 | |||||||
Average percentage | 137.37 | % |
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 | % |
Gasoline Crack Spread Swap Contracts by Expiration Dates | Barrels Sold | BPD | Average Swap ($/Bbl) | ||||||
Fourth Quarter 2019 | 62,000 | 674 | $ | 9.37 | |||||
First Quarter 2020 | 136,500 | 1,500 | $ | 11.69 | |||||
Second Quarter 2020 | 60,000 | 659 | $ | 16.48 | |||||
Total | 258,500 | ||||||||
Average price | $ | 12.25 |
2/1/1 Crack Spread Swap Contracts by Expiration Dates | Barrels Sold | BPD | Average Swap ($/Bbl) | ||||||
Fourth Quarter 2019 | 31,000 | 337 | $ | 15.88 | |||||
First Quarter 2020 | 182,000 | 2,000 | $ | 17.43 | |||||
Second Quarter 2020 | 15,000 | 165 | $ | 19.50 | |||||
Total | 228,000 | ||||||||
Average price | $ | 17.35 |
• | 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 |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||||||||||
Gasoline crack spread swaps | $ | — | $ | — | $ | 0.1 | $ | 0.1 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Inventory financing obligation | — | — | — | — | — | — | 1.5 | 1.5 | |||||||||||||||||||||||
Diesel crack spread swaps | — | — | 0.2 | 0.2 | — | — | 7.4 | 7.4 | |||||||||||||||||||||||
Diesel percentage basis crack spread swaps | — | — | 0.2 | 0.2 | — | — | (6.0 | ) | (6.0 | ) | |||||||||||||||||||||
2/1/1 Crack spread swap | — | — | 0.3 | 0.3 | — | — | — | — | |||||||||||||||||||||||
WCS crude oil basis swaps | — | — | — | — | — | — | 14.9 | 14.9 | |||||||||||||||||||||||
WCS crude oil percentage basis swaps | — | — | — | — | — | — | (6.1 | ) | (6.1 | ) | |||||||||||||||||||||
Midland crude oil basis swaps | — | — | — | — | — | — | 8.1 | 8.1 | |||||||||||||||||||||||
Total derivative assets | $ | — | $ | — | $ | 0.8 | $ | 0.8 | $ | — | $ | — | $ | 19.8 | $ | 19.8 | |||||||||||||||
Pension plan investments | — | — | — | — | 0.1 | — | — | 0.1 | |||||||||||||||||||||||
Total recurring assets at fair value | $ | — | $ | — | $ | 0.8 | $ | 0.8 | $ | 0.1 | $ | — | $ | 19.8 | $ | 19.9 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Derivative liabilities: | |||||||||||||||||||||||||||||||
Inventory financing obligation | $ | — | $ | — | $ | (1.2 | ) | $ | (1.2 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Total derivative liabilities | — | — | (1.2 | ) | (1.2 | ) | — | — | — | — | |||||||||||||||||||||
RINs Obligation | — | (14.4 | ) | — | (14.4 | ) | — | (15.8 | ) | — | (15.8 | ) | |||||||||||||||||||
Liability Awards | (6.8 | ) | — | — | (6.8 | ) | (2.7 | ) | — | — | (2.7 | ) | |||||||||||||||||||
Total recurring liabilities at fair value | $ | (6.8 | ) | $ | (14.4 | ) | $ | (1.2 | ) | $ | (22.4 | ) | $ | (2.7 | ) | $ | (15.8 | ) | $ | — | $ | (18.5 | ) |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Fair value at January 1, | $ | 19.8 | $ | (10.4 | ) | ||
Realized (gain) loss on derivative instruments | (34.6 | ) | 2.4 | ||||
Unrealized gain (loss) on derivative instruments | (20.2 | ) | 0.4 | ||||
Settlements | 34.6 | (2.4 | ) | ||||
Fair value at September 30, | $ | (0.4 | ) | $ | (10.0 | ) | |
Total gain (loss) included in net loss attributable to changes in unrealized gain (loss) relating to financial assets and liabilities held as of September 30, | $ | (20.2 | ) | $ | 0.4 |
September 30, 2019 | December 31, 2018 | ||||||||||||||||
Level | Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||||||
Financial Instrument: | |||||||||||||||||
Senior notes | 1 | $ | 1,400.4 | $ | 1,425.9 | $ | 1,287.4 | $ | 1,560.7 | ||||||||
Finance lease and other obligations | 3 | $ | 6.9 | $ | 6.9 | $ | 47.6 | $ | 47.6 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Numerator for basic and diluted earnings per limited partner unit: | |||||||||||||||
Net loss from continuing operations | $ | (4.6 | ) | $ | (16.0 | ) | $ | (5.0 | ) | $ | (70.1 | ) | |||
Less: | |||||||||||||||
General partner’s interest in net loss from continuing operations | (0.1 | ) | (0.3 | ) | (0.1 | ) | (1.4 | ) | |||||||
Net loss from continuing operations available to limited partners | $ | (4.5 | ) | $ | (15.7 | ) | $ | (4.9 | ) | $ | (68.7 | ) | |||
Net loss from discontinued operations available to limited partners | — | (0.4 | ) | — | (3.0 | ) | |||||||||
Net loss available to limited partners | $ | (4.5 | ) | $ | (16.1 | ) | $ | (4.9 | ) | $ | (71.7 | ) | |||
Denominator for basic and diluted earnings per limited partner unit: | |||||||||||||||
Weighted average limited partner units outstanding(1) | 78,299,472 | 77,783,879 | 78,174,976 | 77,643,006 | |||||||||||
Limited partners’ interest basic and diluted net loss per unit: | |||||||||||||||
From continuing operations | $ | (0.06 | ) | $ | (0.20 | ) | $ | (0.06 | ) | $ | (0.88 | ) | |||
From discontinued operations | — | (0.01 | ) | — | (0.04 | ) | |||||||||
Limited partners’ interest | $ | (0.06 | ) | $ | (0.21 | ) | $ | (0.06 | ) | $ | (0.92 | ) |
(1) | Total diluted weighted average limited partner units outstanding excludes 0.1 million for the three and nine months ended September 30, 2019 and 0.2 million for the three and nine months ended September 30, 2018, consisting of unvested phantom units. |
• | Specialty Products. The specialty products segment is the Company’s core business which 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, asphalt and other products 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. |
Three Months Ended September 30, 2019 | Specialty Products | Fuel Products | Corporate | Eliminations | Consolidated Total | ||||||||||||||
Sales: | |||||||||||||||||||
External customers | $ | 355.8 | $ | 573.8 | $ | — | $ | — | $ | 929.6 | |||||||||
Intersegment sales | 19.8 | 14.3 | — | (34.1 | ) | — | |||||||||||||
Total sales | $ | 375.6 | $ | 588.1 | $ | — | $ | (34.1 | ) | $ | 929.6 | ||||||||
Adjusted EBITDA | $ | 52.5 | $ | 44.1 | $ | (23.1 | ) | $ | — | $ | 73.5 | ||||||||
Reconciling items to net loss: | |||||||||||||||||||
Depreciation and amortization | 12.9 | 18.6 | 2.0 | — | 33.5 | ||||||||||||||
Other non-recurring expenses | — | — | — | — | 1.3 | ||||||||||||||
Unrealized loss on derivatives | 5.4 | ||||||||||||||||||
Interest expense | 33.8 | ||||||||||||||||||
Loss on impairment and disposal of fixed assets | 3.2 | ||||||||||||||||||
Equity based compensation and other items | 0.4 | ||||||||||||||||||
Income tax expense | 0.5 | ||||||||||||||||||
Net loss from continuing operations | $ | (4.6 | ) | ||||||||||||||||
Three Months Ended September 30, 2018 | Specialty Products | Fuel Products | Corporate | Eliminations | Consolidated Total | ||||||||||||||
Sales: | |||||||||||||||||||
External customers | $ | 349.2 | $ | 604.3 | $ | — | $ | — | $ | 953.5 | |||||||||
Intersegment sales | 24.1 | 20.9 | — | (45.0 | ) | — | |||||||||||||
Total sales | $ | 373.3 | $ | 625.2 | $ | — | $ | (45.0 | ) | $ | 953.5 | ||||||||
Adjusted EBITDA | $ | 36.6 | $ | 41.9 | $ | (24.0 | ) | $ | 54.5 | ||||||||||
Reconciling items to net loss: | |||||||||||||||||||
Depreciation and amortization | 12.1 | 18.1 | 2.1 | — | 32.3 | ||||||||||||||
Realized loss on derivatives, not reflected in net loss or settled in a prior period | 0.1 | 0.6 | — | — | 0.7 | ||||||||||||||
Unrealized loss on derivatives | 2.4 | ||||||||||||||||||
Interest expense | 37.7 | ||||||||||||||||||
Equity based compensation and other items | (3.0 | ) | |||||||||||||||||
Income tax expense | 0.4 | ||||||||||||||||||
Net loss from continuing operations | $ | (16.0 | ) |
Nine Months Ended September 30, 2019 | Specialty Products | Fuel Products | Corporate | Eliminations | Consolidated Total | ||||||||||||||
Sales: | |||||||||||||||||||
External customers | $ | 1,052.4 | $ | 1,625.4 | $ | — | $ | 2,677.8 | |||||||||||
Intersegment sales | 67.0 | 37.7 | — | (104.7 | ) | — | |||||||||||||
Total sales | $ | 1,119.4 | $ | 1,663.1 | $ | — | $ | (104.7 | ) | $ | 2,677.8 | ||||||||
Income from unconsolidated affiliates | $ | 3.8 | $ | — | $ | 3.8 | |||||||||||||
Adjusted EBITDA | $ | 171.3 | $ | 155.5 | $ | (76.0 | ) | $ | 250.8 | ||||||||||
Reconciling items to net loss: | |||||||||||||||||||
Depreciation and amortization | 36.6 | 56.8 | 5.7 | 99.1 | |||||||||||||||
Other non-recurring expenses | — | — | — | 1.3 | |||||||||||||||
Gain on sale of unconsolidated affiliate | (1.2 | ) | — | — | (1.2 | ) | |||||||||||||
Unrealized loss on derivatives | 20.2 | ||||||||||||||||||
Interest expense | 99.2 | ||||||||||||||||||
Gain on debt extinguishment | (0.7 | ) | |||||||||||||||||
Loss on impairment and disposal of fixed assets | 31.1 | ||||||||||||||||||
Equity based compensation and other items | 6.1 | ||||||||||||||||||
Income tax expense | 0.7 | ||||||||||||||||||
Net loss from continuing operations | $ | (5.0 | ) | ||||||||||||||||
Nine Months Ended September 30, 2018 | Specialty Products | Fuel Products | Corporate | Eliminations | Consolidated Total | ||||||||||||||
Sales: | |||||||||||||||||||
External customers | $ | 1,053.6 | $ | 1,595.9 | $ | — | $ | — | $ | 2,649.5 | |||||||||
Intersegment sales | 67.8 | 46.8 | — | (114.6 | ) | — | |||||||||||||
Total sales | $ | 1,121.4 | $ | 1,642.7 | $ | — | $ | (114.6 | ) | $ | 2,649.5 | ||||||||
Loss from unconsolidated affiliates | $ | (3.7 | ) | $ | — | $ | — | $ | (3.7 | ) | |||||||||
Adjusted EBITDA | $ | 129.3 | $ | 155.3 | $ | (74.4 | ) | $ | — | $ | 210.2 | ||||||||
Reconciling items to net loss: | |||||||||||||||||||
Depreciation and amortization | 37.5 | 53.4 | 6.6 | — | 97.5 | ||||||||||||||
Realized loss on derivatives, not reflected in net loss or settled in a prior period | 0.5 | 2.3 | — | — | 2.8 | ||||||||||||||
Unrealized gain on derivatives | (0.4 | ) | |||||||||||||||||
Interest expense | 120.4 | ||||||||||||||||||
Loss on debt extinguishment | 58.8 | ||||||||||||||||||
Equity based compensation and other items | 0.2 | ||||||||||||||||||
Income tax expense | 1.0 | ||||||||||||||||||
Net loss from continuing operations | $ | (70.1 | ) |
Three Months Ended September 30, | |||||||||||||
2019 | 2018 | ||||||||||||
Specialty products: | |||||||||||||
Lubricating oils | $ | 156.1 | 16.8 | % | $ | 146.6 | 15.4 | % | |||||
Solvents | 86.1 | 9.3 | % | 88.3 | 9.3 | % | |||||||
Waxes | 30.1 | 3.2 | % | 30.1 | 3.2 | % | |||||||
Packaged and synthetic specialty products | 59.6 | 6.4 | % | 64.0 | 6.6 | % | |||||||
Other | 23.9 | 2.6 | % | 20.2 | 2.1 | % | |||||||
Total | $ | 355.8 | 38.3 | % | $ | 349.2 | 36.6 | % | |||||
Fuel products: | |||||||||||||
Gasoline | $ | 189.5 | 20.4 | % | $ | 191.2 | 20.1 | % | |||||
Diesel | 225.4 | 24.2 | % | 257.5 | 27.0 | % | |||||||
Jet fuel | 39.5 | 4.2 | % | 28.1 | 2.9 | % | |||||||
Asphalt, heavy fuel oils and other | 119.4 | 12.8 | % | 127.5 | 13.4 | % | |||||||
Total | $ | 573.8 | 61.7 | % | $ | 604.3 | 63.4 | % | |||||
Consolidated sales | $ | 929.6 | 100.0 | % | $ | 953.5 | 100.0 | % |
Nine Months Ended September 30, | |||||||||||||
2019 | 2018 | ||||||||||||
Specialty products: | |||||||||||||
Lubricating oils | $ | 460.7 | 17.2 | % | $ | 448.3 | 16.9 | % | |||||
Solvents | 254.2 | 9.5 | % | 254.3 | 9.6 | % | |||||||
Waxes | 92.6 | 3.5 | % | 87.8 | 3.3 | % | |||||||
Packaged and synthetic specialty products | 180.2 | 6.7 | % | 204.9 | 7.8 | % | |||||||
Other | 64.7 | 2.4 | % | 58.3 | 2.2 | % | |||||||
Total | $ | 1,052.4 | 39.3 | % | $ | 1,053.6 | 39.8 | % | |||||
Fuel products: | |||||||||||||
Gasoline | $ | 530.9 | 19.8 | % | $ | 528.8 | 20.0 | % | |||||
Diesel | 669.4 | 25.0 | % | 681.5 | 25.7 | % | |||||||
Jet fuel | 100.8 | 3.8 | % | 78.9 | 3.0 | % | |||||||
Asphalt, heavy fuel oils and other | 324.3 | 12.1 | % | 306.7 | 11.5 | % | |||||||
Total | $ | 1,625.4 | 60.7 | % | $ | 1,595.9 | 60.2 | % | |||||
Consolidated sales | $ | 2,677.8 | 100.0 | % | $ | 2,649.5 | 100.0 | % |
• | 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. |
• | 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. |
September 30, 2019 | ||||
Assets: | Classification: | |||
Operating lease assets | Operating lease right-of-use assets (2) | $ | 110.5 | |
Finance lease assets | Property, plant and equipment, net (1) | 3.2 | ||
Total leased assets | $ | 113.7 | ||
Liabilities: | ||||
Current | ||||
Operating | Current portion of operating lease liabilities (2) | $ | 62.3 | |
Finance | Current portion of long-term debt | 0.3 | ||
Non-current | ||||
Operating | Long-term operating lease liabilities (2) | 48.9 | ||
Finance | Long term debt, less current portion | 2.5 | ||
Total lease liabilities | $ | 114.0 |
(1) | Finance lease assets are recorded net of accumulated amortization of $7.1 million as of September 30, 2019. |
(2) | In the third quarter of 2019, the Company had additions to its operating lease right of use assets and operating lease liabilities of approximately $2.7 million. |
Three Months Ended | Nine Months Ended | |||||||
Lease Costs: | Classification: | September 30, 2019 | ||||||
Fixed operating lease cost | Cost of Sales; SG&A Expenses | $ | 16.7 | $ | 50.4 | |||
Short-term operating lease cost (1) | Cost of Sales; SG&A Expenses | 2.2 | 5.6 | |||||
Variable operating lease cost (2) (3) | Cost of Sales; SG&A Expenses | 0.4 | 1.1 | |||||
Finance lease cost: | ||||||||
Amortization of right-of-use asset | Cost of Sales | 0.4 | 1.1 | |||||
Interest on lease liabilities | Interest expense | 0.2 | 1.3 | |||||
Total lease cost | $ | 19.9 | $ | 59.5 |
(1) | The Company’s leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets. |
(2) | Approximately $0.5 million of the Company’s variable operating lease cost for the nine months ended September 30, 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 makes up the variable component of the operating lease contract. There were no variable operating lease costs related the LVT Agreement for the three months ended September 30, 2019 |
(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 | ||||||||
2019 | $ | 17.3 | $ | 0.1 | $ | 17.4 | |||||
2020 | 65.8 | 0.5 | 66.3 | ||||||||
2021 | 14.6 | 0.5 | 15.1 | ||||||||
2022 | 10.3 | 0.5 | 10.8 | ||||||||
2023 | 6.9 | 0.5 | 7.4 | ||||||||
Thereafter | 7.2 | 1.6 | 8.8 | ||||||||
Total | $ | 122.1 | $ | 3.7 | $ | 125.8 | |||||
Less: Interest | 10.9 | 0.9 | 11.8 | ||||||||
Present value of lease liabilities | $ | 111.2 | $ | 2.8 | $ | 114.0 |
(1) | As of September 30, 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 September 30, 2019. |
(2) | As of September 30, 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 September 30, 2019. |
September 30, 2019 | ||
Lease Term and Discount Rate: | ||
Weighted-average remaining lease term (years): | ||
Operating leases | 2.6 | |
Finance leases | 7.3 | |
Weighted-average discount rate: | ||
Operating leases | 7.3 | % |
Finance leases | 8.8 | % |
September 30, 2019 | |||
($ in millions) | (Unaudited) | ||
ASSETS | |||
Current assets: | |||
Accounts receivable, net | $ | 17.8 | |
Inventories | 9.7 | ||
Prepaid expenses and other current assets | 5.4 | ||
Total current assets | 32.9 | ||
Property, plant and equipment, net | 80.8 | ||
Operating lease right-of-use assets | 1.6 | ||
Other noncurrent assets, net | 4.3 | ||
Total assets | $ | 119.6 | |
LIABILITIES AND PARTNERS’ CAPITAL | |||
Current liabilities: | |||
Accounts payable | $ | 46.7 | |
Accrued salaries, wages and benefits | 0.2 | ||
Other taxes payable | 4.4 | ||
Other current liabilities | 38.2 | ||
Current portion of operating lease liabilities | 0.7 | ||
Total current liabilities | 90.2 | ||
Long-term operating lease liabilities | 1.3 | ||
Total liabilities | $ | 91.5 | |
Commitments and contingencies | |||
Total partners’ capital | 28.1 | ||
Total liabilities and partners’ capital | $ | 119.6 |
• | We continue to focus on improving operations. Our total feedstock runs were 106,784 barrels per day (“bpd”) during the third quarter 2019, compared to 94,866 bpd during the third quarter 2018. This increase is primarily attributed to improved plant utilization rates in the current period in comparison to the prior period when turnaround activities at the Shreveport refinery and certain third-party processing facilities and maintenance activities negatively impacted our operating results. We anticipate secular improvement in our utilization rates as we seek to minimize unplanned downtime at our facilities. |
• | Gasoline margins are expected to decline as domestic demand follows typical seasonal patterns. Diesel demand typically declines in the fourth quarter but there is the potential to be positively affected by the implementation of the International Maritime Organization 2020 regulations. |
• | Asphalt demand is expected to decline in the fourth quarter of 2019 due to the seasonality of the road construction and roofing industries. |
• | Environmental regulations continue to affect our margins in the form of the cost 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 35% decrease in the price of RINs during the third quarter 2019 favorably affected our results of operations, as did the receipt of the RINs exemptions for all three of our fuels refineries. It is not possible to predict what future RINs volumes or costs may be given the volatile price of RINs, but we continue to anticipate that RINs have the potential to remain a significant expense for our fuel products segment (inclusive of the favorable impact of exemptions received), assuming current market prices for RINs continue. |
• | Canadian heavy sour crude oil discounts have narrowed in comparison to the wide discounts seen throughout much of 2018 caused by the oversupply of sour crude oil and pipeline constraints restricting access to markets. The price of domestically produced mid-continent crude is expected to continue to trade at a discount relative to internationally produced crude reflecting increased domestic production combined with transportation constraints. Processing crude oils priced based on WCS and other cost-advantaged crudes will continue to be a focus of ours in 2019. |
• | Specialty product margins, as a percentage of sales, have remained relatively stable and are expected to remain stable in the near term. We continue to consider our specialty products segment our core business over the long term, and we plan to seek appropriate ways to further invest in our specialty products segment. |
• | 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. In addition, 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 such 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 an existing core competency and that have an identifiable competitive advantage we can exploit as the new owner. |
• | sales volumes; |
• | production yields; |
• | segment gross profit; |
• | segment Adjusted EBITDA; and |
• | selling, general and administrative expenses. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||
(In bpd) | (In bpd) | ||||||||||||||||
Total sales volume (1) | 111,022 | 100,793 | 10.1 | % | 107,670 | 97,150 | 10.8 | % | |||||||||
Total feedstock runs (2) | 110,447 | 101,220 | 9.1 | % | 106,784 | 94,866 | 12.6 | % | |||||||||
Facility production: (3) | |||||||||||||||||
Specialty products: | |||||||||||||||||
Lubricating oils | 11,937 | 11,716 | 1.9 | % | 11,872 | 11,840 | 0.3 | % | |||||||||
Solvents | 7,493 | 7,728 | (3.0 | )% | 7,580 | 7,812 | (3.0 | )% | |||||||||
Waxes | 1,440 | 1,106 | 30.2 | % | 1,416 | 1,172 | 20.8 | % | |||||||||
Packaged and synthetic specialty products (4) | 1,384 | 2,052 | (32.6 | )% | 1,667 | 2,314 | (28.0 | )% | |||||||||
Other | 2,037 | 3,106 | (34.4 | )% | 1,626 | 2,305 | (29.5 | )% | |||||||||
Total | 24,291 | 25,708 | (5.5 | )% | 24,161 | 25,443 | (5.0 | )% | |||||||||
Fuel products: | |||||||||||||||||
Gasoline | 23,603 | 21,514 | 9.7 | % | 23,816 | 20,179 | 18.0 | % | |||||||||
Diesel | 30,479 | 30,818 | (1.1 | )% | 29,729 | 27,315 | 8.8 | % | |||||||||
Jet fuel | 5,213 | 3,060 | 70.4 | % | 4,462 | 3,168 | 40.8 | % | |||||||||
Asphalt, heavy fuels and other | 22,248 | 21,174 | 5.1 | % | 21,031 | 19,673 | 6.9 | % | |||||||||
Total | 81,543 | 76,566 | 6.5 | % | 79,038 | 70,335 | 12.4 | % | |||||||||
Total facility production (3) | 105,834 | 102,274 | 3.5 | % | 103,199 | 95,778 | 7.7 | % |
(1) | Total sales volume includes sales from the production at our facilities and certain third-party facilities pursuant to supply and/or processing agreements, sales of inventories and the resale of crude oil to third-party customers. Total sales volume includes the sale of purchased fuel product blendstocks, such as ethanol and biodiesel, as components of finished fuel products in our fuel products segment sales. |
(2) | Total feedstock runs represent the barrels per day of crude oil and other feedstocks processed at our facilities and at certain third-party facilities pursuant to supply and/or processing agreements. |
(3) | Total facility production represents the barrels per day of specialty products and fuel products yielded from processing crude oil and other feedstocks at our facilities and at certain third-party facilities pursuant to supply and/or processing agreements. The difference between total facility production and total feedstock runs is primarily a result of the time lag between the input of feedstocks and production of finished products and volume loss. |
(4) | Represents production of finished lubricants and chemicals specialty products including the products from the Royal Purple, Bel-Ray and Calumet Packaging facilities. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(In millions) | |||||||||||||||
Sales | $ | 929.6 | $ | 953.5 | $ | 2,677.8 | $ | 2,649.5 | |||||||
Cost of sales | 811.8 | 850.2 | 2,316.9 | 2,313.7 | |||||||||||
Gross profit | 117.8 | 103.3 | 360.9 | 335.8 | |||||||||||
Operating costs and expenses: | |||||||||||||||
Selling | 12.6 | 12.2 | 40.2 | 39.6 | |||||||||||
General and administrative | 32.8 | 29.2 | 105.5 | 95.5 | |||||||||||
Transportation | 28.4 | 36.4 | 95.9 | 99.7 | |||||||||||
Taxes other than income taxes | 5.7 | 5.9 | 15.5 | 13.2 | |||||||||||
Loss on impairment and disposal of assets | 3.2 | — | 31.1 | — | |||||||||||
Other operating (income) expense | 1.7 | (2.0 | ) | 0.8 | (18.7 | ) | |||||||||
Operating income | 33.4 | 21.6 | 71.9 | 106.5 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (33.8 | ) | (37.7 | ) | (99.2 | ) | (120.4 | ) | |||||||
Gain (loss) from debt extinguishment | — | — | 0.7 | (58.8 | ) | ||||||||||
Gain (loss) on derivative instruments | (5.0 | ) | (2.7 | ) | 14.4 | (2.0 | ) | ||||||||
Other | 1.3 | 3.2 | 7.9 | 5.6 | |||||||||||
Total other expense | (37.5 | ) | (37.2 | ) | (76.2 | ) | (175.6 | ) | |||||||
Net loss from continuing operations before income taxes | (4.1 | ) | (15.6 | ) | (4.3 | ) | (69.1 | ) | |||||||
Income tax expense from continuing operations | 0.5 | 0.4 | 0.7 | 1.0 | |||||||||||
Net loss from continuing operations | $ | (4.6 | ) | $ | (16.0 | ) | $ | (5.0 | ) | $ | (70.1 | ) | |||
Net loss from discontinued operations, net of tax | $ | — | $ | (0.5 | ) | $ | — | $ | (3.1 | ) | |||||
Net loss | $ | (4.6 | ) | $ | (16.5 | ) | $ | (5.0 | ) | $ | (73.2 | ) | |||
EBITDA | $ | 57.1 | $ | 51.2 | $ | 177.5 | $ | 137.0 | |||||||
Adjusted EBITDA | $ | 73.5 | $ | 54.3 | $ | 250.8 | $ | 208.2 | |||||||
Distributable Cash Flow | $ | 16.8 | $ | 10.0 | $ | 108.2 | $ | 69.5 |
• | 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. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(In millions) | |||||||||||||||
Reconciliation of Net loss to EBITDA, Adjusted EBITDA and Distributable Cash Flow: | |||||||||||||||
Net loss | $ | (4.6 | ) | $ | (16.5 | ) | $ | (5.0 | ) | $ | (73.2 | ) | |||
Add: | |||||||||||||||
Interest expense | 33.8 | 37.7 | 99.2 | 120.4 | |||||||||||
Depreciation and amortization | 27.4 | 29.6 | 82.6 | 88.8 | |||||||||||
Income tax expense | 0.5 | 0.4 | 0.7 | 1.0 | |||||||||||
EBITDA | $ | 57.1 | $ | 51.2 | $ | 177.5 | $ | 137.0 | |||||||
Add: | |||||||||||||||
Unrealized (gain) loss on derivative instruments | $ | 5.4 | $ | 2.4 | $ | 20.2 | $ | (0.4 | ) | ||||||
Realized loss on derivatives, not included in net loss or settled in a prior period | — | 0.7 | — | 2.8 | |||||||||||
Amortization of turnaround costs | 6.1 | 2.7 | 16.5 | 8.7 | |||||||||||
(Gain) loss from debt extinguishment | — | — | (0.7 | ) | 58.8 | ||||||||||
Loss on impairment and disposal of assets | 3.2 | — | 31.1 | — | |||||||||||
Gain on sale of unconsolidated affiliate (3) | — | — | (1.2 | ) | — | ||||||||||
Equity based compensation and other items | 0.4 | (2.7 | ) | 6.1 | 1.3 | ||||||||||
Other non-recurring expenses | 1.3 | — | 1.3 | — | |||||||||||
Adjusted EBITDA (4) | $ | 73.5 | $ | 54.3 | $ | 250.8 | $ | 208.2 | |||||||
Less: | |||||||||||||||
Replacement and environmental capital expenditures (1) | $ | 13.4 | $ | 4.4 | $ | 27.0 | $ | 16.0 | |||||||
Cash interest expense (2) | 32.4 | 36.0 | 94.3 | 114.3 | |||||||||||
Turnaround costs | 10.4 | 3.5 | 16.8 | 11.1 | |||||||||||
Income (loss) from unconsolidated affiliates (3) | — | — | 3.8 | (3.7 | ) | ||||||||||
Income tax expense | 0.5 | 0.4 | 0.7 | 1.0 | |||||||||||
Distributable Cash Flow | $ | 16.8 | $ | 10.0 | $ | 108.2 | $ | 69.5 |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
(In millions) | |||||||
Reconciliation of Distributable Cash Flow, Adjusted EBITDA and EBITDA to Net cash provided by (used in) operating activities: | |||||||
Distributable Cash Flow | $ | 108.2 | $ | 69.5 | |||
Add: | |||||||
Replacement and environmental capital expenditures (1) | 27.0 | 16.0 | |||||
Cash interest expense (2) | 94.3 | 114.3 | |||||
Turnaround costs | 16.8 | 11.1 | |||||
Income (loss) from unconsolidated affiliates (3) | 3.8 | (3.7 | ) | ||||
Income tax expense | 0.7 | 1.0 | |||||
Adjusted EBITDA (4) | $ | 250.8 | $ | 208.2 | |||
Less: | |||||||
Unrealized (gain) loss on derivative instruments | $ | 20.2 | $ | (0.4 | ) | ||
Realized loss on derivatives, not included in net loss or settled in a prior period | — | 2.8 | |||||
Amortization of turnaround costs | 16.5 | 8.7 | |||||
(Gain) loss from debt extinguishment | (0.7 | ) | 58.8 | ||||
Loss on impairment and disposal of assets | 31.1 | — | |||||
Gain on sale of unconsolidated affiliate (3) | (1.2 | ) | — | ||||
Equity based compensation and other items | 6.1 | 1.3 | |||||
Other non-recurring expenses | 1.3 | — | |||||
EBITDA | $ | 177.5 | $ | 137.0 | |||
Add: | |||||||
Unrealized (gain) loss on derivative instruments | $ | 20.2 | $ | (0.4 | ) | ||
Cash interest expense (2) | (94.3 | ) | (114.3 | ) | |||
Equity based compensation | 4.9 | 2.8 | |||||
Lower of cost or market inventory adjustment | (38.8 | ) | (12.0 | ) | |||
(Income) loss from unconsolidated affiliates (3) | (3.8 | ) | 3.7 | ||||
Gain on sale of unconsolidated affiliate (3) | (1.2 | ) | — | ||||
Amortization of turnaround costs | 16.5 | 8.7 | |||||
(Gain) loss from debt extinguishment | (0.7 | ) | 58.8 | ||||
Operating lease expense | 57.1 | — | |||||
Operating lease payments | (57.1 | ) | — | ||||
Loss on impairment and disposal of assets | 31.1 | — | |||||
Income tax expense | (0.7 | ) | (1.0 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | (49.8 | ) | 29.0 | ||||
Inventories | 29.6 | (34.4 | ) | ||||
Other current assets | 4.6 | (3.8 | ) | ||||
Derivative activity | (0.4 | ) | (0.4 | ) | |||
Turnaround costs | (16.8 | ) | (11.1 | ) | |||
Accounts payable | 61.7 | (32.5 | ) | ||||
Accrued interest payable | 10.8 | (7.0 | ) | ||||
Other current liabilities | 5.5 | (48.7 | ) | ||||
Other | (2.0 | ) | (3.7 | ) | |||
Net cash provided by (used in) operating activities | $ | 153.9 | $ | (29.3 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(In millions) | |||||||||||||||
Reconciliation of Adjusted EBITDA to EBITDA and Net loss: | |||||||||||||||
Segment Adjusted EBITDA | |||||||||||||||
Specialty products Adjusted EBITDA | $ | 52.5 | $ | 36.6 | $ | 171.3 | $ | 129.3 | |||||||
Fuel products Adjusted EBITDA | 44.1 | 41.9 | 155.5 | 155.3 | |||||||||||
Corporate Adjusted EBITDA | (23.1 | ) | (24.0 | ) | (76.0 | ) | (74.4 | ) | |||||||
Discontinued operations Adjusted EBITDA | — | (0.2 | ) | — | (2.0 | ) | |||||||||
Total Adjusted EBITDA (4) | $ | 73.5 | $ | 54.3 | $ | 250.8 | $ | 208.2 | |||||||
Less: | |||||||||||||||
Unrealized (gain) loss on derivative instruments | $ | 5.4 | $ | 2.4 | $ | 20.2 | $ | (0.4 | ) | ||||||
Realized loss on derivatives, not included in net loss or settled in a prior period | — | 0.7 | — | 2.8 | |||||||||||
Amortization of turnaround costs | 6.1 | 2.7 | 16.5 | 8.7 | |||||||||||
Gain (loss) from debt extinguishment | — | — | (0.7 | ) | 58.8 | ||||||||||
Gain on sale of unconsolidated affiliate (3) | — | — | (1.2 | ) | — | ||||||||||
Loss on impairment and disposal of assets | 3.2 | — | 31.1 | — | |||||||||||
Equity based compensation and other items | 0.4 | (2.7 | ) | 6.1 | 1.3 | ||||||||||
Other non-recurring expenses | 1.3 | — | 1.3 | — | |||||||||||
EBITDA | $ | 57.1 | $ | 51.2 | $ | 177.5 | $ | 137.0 | |||||||
Less: | |||||||||||||||
Interest expense | $ | 33.8 | $ | 37.7 | $ | 99.2 | $ | 120.4 | |||||||
Depreciation and amortization | 27.4 | 29.6 | 82.6 | 88.8 | |||||||||||
Income tax expense | 0.5 | 0.4 | 0.7 | 1.0 | |||||||||||
Net loss | $ | (4.6 | ) | $ | (16.5 | ) | $ | (5.0 | ) | $ | (73.2 | ) |
(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) | In 2018, the Company and The Heritage Group formed Biosyn Holdings, LLC (“Biosyn”) for the purposes of acquiring Biosynthetic Technologies, LLC (“Biosynthetic Technologies”), a startup company which developed an intellectual property portfolio for the manufacture of renewable-based and biodegradable esters. The initial cash investment of $3.8 million made by the Company into Biosyn was expensed in the period ended March 31, 2018 given Biosyn’s operations were all related to research and development. The Company accounts for its ownership in Biosyn under the equity method of accounting. During March 2019, the Company sold its investment to The Heritage Group and recognized a gain of $5.0 million. For comparability purposes, $3.8 million of the gain is included in Adjusted EBITDA for the nine months ended September 30, 2019. |
(4) | Total Adjusted EBITDA includes the non-cash impact of the following LCM inventory adjustments and losses related to the liquidation of LIFO inventory layers. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(In millions) | |||||||||||||||
LCM Impact | $ | (2.7 | ) | $ | (3.0 | ) | $ | 38.8 | $ | 12.0 | |||||
LIFO Impact | $ | — | $ | — | $ | (0.9 | ) | $ | — |
Three Months Ended September 30, | ||||||||||
2019 | 2018 | % Change | ||||||||
(Dollars in millions, except barrel and per barrel data) | ||||||||||
Sales by segment: | ||||||||||
Specialty products: | ||||||||||
Lubricating oils | $ | 156.1 | $ | 146.6 | 6.5 | % | ||||
Solvents | 86.1 | 88.3 | (2.5 | )% | ||||||
Waxes | 30.1 | 30.1 | — | % | ||||||
Packaged and synthetic specialty products (1) | 59.6 | 64.0 | (6.9 | )% | ||||||
Other (2) | 23.9 | 20.2 | 18.3 | % | ||||||
Total specialty products | $ | 355.8 | $ | 349.2 | 1.9 | % | ||||
Total specialty products sales volume (in barrels) | 2,359,000 | 2,116,000 | 11.5 | % | ||||||
Average specialty products sales price per barrel | $ | 150.83 | $ | 165.03 | (8.6 | )% | ||||
Fuel products: | ||||||||||
Gasoline | $ | 189.5 | $ | 191.2 | (0.9 | )% | ||||
Diesel | 225.4 | 257.5 | (12.5 | )% | ||||||
Jet fuel | 39.5 | 28.1 | 40.6 | % | ||||||
Asphalt, heavy fuel oils and other (3) | 119.4 | 127.5 | (6.4 | )% | ||||||
Total fuel products | $ | 573.8 | $ | 604.3 | (5.0 | )% | ||||
Total fuel products sales volume (in barrels) | 7,855,000 | 7,157,000 | 9.8 | % | ||||||
Average fuel products sales price per barrel | $ | 73.05 | $ | 84.43 | (13.5 | )% | ||||
Total sales | $ | 929.6 | $ | 953.5 | (2.5 | )% | ||||
Total specialty and fuel products sales volume (in barrels) | 10,214,000 | 9,273,000 | 10.1 | % |
(1) | Represents packaged and synthetic specialty products at the Royal Purple, Bel-Ray and Calumet Packaging facilities. |
(2) | Represents (a) by-products, including fuels and asphalt, produced in connection with the production of specialty products at the Princeton and Cotton Valley refineries and Dickinson and Karns City facilities and (b) polyolester synthetic lubricants produced at the Missouri facility. |
(3) | Represents asphalt, heavy fuel oils and other products produced in connection with the production of fuels at the Shreveport, San Antonio and Great Falls refineries and crude oil sales from the San Antonio refinery to third-party customers. |
Dollar Change | |||
(In millions) | |||
Volume | 40.1 | ||
Sales price | (33.5 | ) | |
Total specialty products segment sales increase | $ | 6.6 |
Dollar Change | |||
(In millions) | |||
Volume | 59.0 | ||
Sales price | (89.5 | ) | |
Total fuel products segment sales decrease | $ | (30.5 | ) |
Three Months Ended September 30, | ||||||||||
2019 | 2018 | % Change | ||||||||
(Dollars in millions, except per barrel data) | ||||||||||
Gross profit by segment: | ||||||||||
Specialty products: | ||||||||||
Gross profit | $ | 80.7 | $ | 68.4 | 18.0 | % | ||||
Percentage of sales | 22.7 | % | 19.6 | % | ||||||
Specialty products gross profit per barrel | $ | 34.21 | $ | 32.33 | 5.8 | % | ||||
Fuel products: | ||||||||||
Gross profit | $ | 37.1 | $ | 34.9 | 6.3 | % | ||||
Percentage of sales | 6.5 | % | 5.8 | % | ||||||
Fuel products gross profit per barrel | $ | 4.72 | $ | 4.88 | (3.1 | )% | ||||
Total gross profit | $ | 117.8 | $ | 103.3 | 14.0 | % | ||||
Percentage of sales | 12.7 | % | 10.8 | % |
Dollar Change | |||
(In millions) | |||
Three months ended September 30, 2018 reported gross profit | $ | 68.4 | |
Sales price | (33.5 | ) | |
Operating costs | (1.3 | ) | |
LIFO inventory layer adjustment | 0.1 | ||
LCM inventory adjustment | 1.4 | ||
Volume | 13.5 | ||
Cost of materials | 32.1 | ||
Three months ended September 30, 2019 reported gross profit | $ | 80.7 |
Dollar Change | |||
(In millions) | |||
Three months ended September 30, 2018 reported gross profit | $ | 34.9 | |
Sales Price | (89.5 | ) | |
Operating costs | (2.1 | ) | |
LCM inventory adjustment | (1.8 | ) | |
LIFO inventory layer adjustment | 0.3 | ||
Volume | 11.0 | ||
RINs expense | 12.8 | ||
Cost of materials | 71.5 | ||
Three months ended September 30, 2019 reported gross profit | $ | 37.1 |
Nine Months Ended September 30, | ||||||||||
2019 | 2018 | % Change | ||||||||
(Dollars in millions, except barrel and per barrel data) | ||||||||||
Sales by segment: | ||||||||||
Specialty products: | ||||||||||
Lubricating oils | $ | 460.7 | $ | 448.3 | 2.8 | % | ||||
Solvents | 254.2 | 254.3 | — | % | ||||||
Waxes | 92.6 | 87.8 | 5.5 | % | ||||||
Packaged and synthetic specialty products (1) | 180.2 | 204.9 | (12.1 | )% | ||||||
Other (2) | 64.7 | 58.3 | 11.0 | % | ||||||
Total specialty products | $ | 1,052.4 | $ | 1,053.6 | (0.1 | )% | ||||
Total specialty products sales volume (in barrels) | 7,041,000 | 6,589,000 | 6.9 | % | ||||||
Average specialty products sales price per barrel | $ | 149.47 | $ | 159.90 | (6.5 | )% | ||||
Fuel products: | ||||||||||
Gasoline | $ | 530.9 | $ | 528.8 | 0.4 | % | ||||
Diesel | 669.4 | 681.5 | (1.8 | )% | ||||||
Jet fuel | 100.8 | 78.9 | 27.8 | % | ||||||
Asphalt, heavy fuel oils and other (3) | 324.3 | 306.7 | 5.7 | % | ||||||
Total fuel products | $ | 1,625.4 | $ | 1,595.9 | 1.8 | % | ||||
Total fuel products sales volume (in barrels) | 22,353,000 | 19,933,000 | 12.1 | % | ||||||
Average fuel products sales price per barrel | $ | 72.72 | $ | 80.06 | (9.2 | )% | ||||
Total sales | $ | 2,677.8 | $ | 2,649.5 | 1.1 | % | ||||
Total specialty and fuel products sales volume (in barrels) | 29,394,000 | 26,522,000 | 10.8 | % |
(1) | Represents packaged and synthetic specialty products at the Royal Purple, Bel-Ray and Calumet Packaging facilities. |
(2) | Represents (a) by-products, including fuels and asphalt, produced in connection with the production of specialty products at the Princeton and Cotton Valley refineries and Dickinson and Karns City facilities and (b) polyolester synthetic lubricants produced at the Missouri facility. |
(3) | Represents asphalt, heavy fuel oils and other products produced in connection with the production of fuels at the Shreveport, San Antonio and Great Falls refineries and crude oil sales from the San Antonio refinery to third-party customers. |
Dollar Change | |||
(In millions) | |||
Volume | 72.2 | ||
Sales price | (73.4 | ) | |
Total specialty products segment sales decrease | $ | (1.2 | ) |
Dollar Change | |||
(In millions) | |||
Volume | 193.7 | ||
Sales price | (164.2 | ) | |
Total fuel products segment sales increase | $ | 29.5 |
Nine Months Ended September 30, | ||||||||||
2019 | 2018 | % Change | ||||||||
(Dollars in millions, except per barrel data) | ||||||||||
Gross profit by segment: | ||||||||||
Specialty products: | ||||||||||
Gross profit | 255.6 | 217.4 | 17.6 | % | ||||||
Percentage of sales | 24.3 | % | 20.7 | % | ||||||
Specialty products gross profit per barrel | $ | 36.30 | $ | 32.99 | 10.0 | % | ||||
Fuel products: | ||||||||||
Gross profit | $ | 105.3 | $ | 118.4 | (11.1 | )% | ||||
Percentage of sales | 6.5 | % | 7.4 | % | ||||||
Fuel products gross profit per barrel | 4.71 | 5.94 | (20.7 | )% | ||||||
Total gross profit | $ | 360.9 | $ | 335.8 | 7.5 | % | ||||
Percentage of sales | 13.5 | % | 12.7 | % |
Dollar Change | |||
(In millions) | |||
Nine months ended September 30, 2018 reported gross profit | $ | 217.4 | |
Sales price | (73.4 | ) | |
LIFO inventory layer adjustment | (0.8 | ) | |
Operating costs | 0.5 | ||
LCM inventory adjustment | 0.8 | ||
Volume | 25.5 | ||
Cost of Materials | 85.6 | ||
Nine months ended September 30, 2019 reported gross profit | $ | 255.6 |
Dollar Change | |||
(In millions) | |||
Nine months ended September 30, 2018 reported gross profit | $ | 118.4 | |
Cost of Materials | 127.2 | ||
Volume | 37.6 | ||
LCM inventory adjustment | 23.2 | ||
LIFO inventory layer adjustment | 0.3 | ||
Operating costs | (1.6 | ) | |
RINs expense | (35.6 | ) | |
Sales price | (164.2 | ) | |
Nine months ended September 30, 2019 reported gross profit | $ | 105.3 |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
(In millions) | |||||||
Net cash provided by (used in) operating activities | $ | 153.9 | $ | (29.3 | ) | ||
Net cash provided by (used in) investing activities | (13.7 | ) | 13.5 | ||||
Net cash (used in) financing activities | (131.7 | ) | (433.0 | ) | |||
Net increase (decrease) in cash and cash equivalents | $ | 8.5 | $ | (448.8 | ) |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
(In millions) | |||||||
Capital improvement expenditures | $ | 10.1 | $ | 17.3 | |||
Replacement capital expenditures | 15.2 | 9.5 | |||||
Environmental capital expenditures | 11.8 | 6.5 | |||||
Turnaround capital expenditures | 16.8 | 21.8 | |||||
Total | $ | 53.9 | $ | 55.1 |
• | $600.0 million senior secured revolving credit facility maturing in February 2023 (“revolving credit facility”); |
• | $761.2 million of 6.50% senior notes due 2021 (“2021 Notes”); |
• | $350.0 million of 7.625% senior notes due 2022 (“2022 Notes”); and |
• | $325.0 million of 7.75% senior notes due 2023 (“2023 Notes”). |
Payments Due by Period | |||||||||||||||||||
Total | Less Than 1 Year | 1–3 Years | 3–5 Years | More Than 5 Years | |||||||||||||||
(In millions) | |||||||||||||||||||
Operating activities: | |||||||||||||||||||
Interest on long-term debt at contractual rates and maturities (1) | $ | 275.8 | $ | 104.9 | $ | 144.4 | $ | 26.4 | $ | 0.1 | |||||||||
Operating lease obligations (2) | 122.1 | 67.7 | 38.2 | 12.4 | 3.8 | ||||||||||||||
Letters of credit (3) | 70.1 | 70.1 | — | — | — | ||||||||||||||
Purchase commitments (4) | 389.8 | 217.5 | 66.9 | 50.4 | 55.0 | ||||||||||||||
Employment agreements (5) | 1.6 | 1.0 | 0.6 | — | — | ||||||||||||||
Financing activities: | |||||||||||||||||||
Obligations under inventory financing agreements | 117.6 | 117.6 | — | — | — | ||||||||||||||
Finance lease obligations | 2.8 | 0.3 | 0.6 | 0.8 | 1.1 | ||||||||||||||
Long-term debt obligations, excluding finance lease obligations | 1,440.3 | 123.2 | 992.1 | 325.0 | — | ||||||||||||||
Total obligations | $ | 2,420.1 | $ | 702.3 | $ | 1,242.8 | $ | 415.0 | $ | 60.0 |
(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 September 2034. |
(3) | Letters of credit primarily supporting crude oil and other feedstock purchases. |
(4) | Purchase commitments consist primarily of obligations to purchase fixed volumes of crude oil, other feedstocks and finished products for resale from various suppliers based on current market prices at the time of delivery. |
(5) | Certain employment agreements may be terminated under certain circumstances or at certain dates prior to expiration. We expect our contracts will be renewed or replaced with similar agreements upon their expiration. Amounts due under the contracts assume the contracts are not terminated prior to their expiration. |
• | crude oil purchases and sales; |
• | refined product sales and purchases; |
• | natural gas purchases; |
• | precious metals; and |
• | fluctuations in the value of crude oil between geographic regions and between the different types of crude oil such as NYMEX WTI, Light Louisiana Sweet, WCS, WTI Midland, Mixed Sweet Blend and ICE Brent. |
September 30, 2019 | December 31, 2018 | ||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||
(In millions) | |||||||||||||||
Financial Instrument: | |||||||||||||||
2021 Notes | $ | 762.2 | $ | 758.3 | $ | 755.7 | $ | 894.7 | |||||||
2022 Notes | $ | 336.0 | $ | 346.8 | $ | 279.4 | $ | 345.9 | |||||||
2023 Notes | $ | 302.2 | $ | 320.8 | $ | 252.3 | $ | 320.1 |
• | The ineffective design and implementation of effective controls with respect to the implementation of our enterprise resource planning (“ERP”) system consistent with our financial reporting requirements. Specifically, management did not design effective controls over the ERP implementation to ensure appropriate data conversion and data integrity or provide sufficient end user training to our employees to ensure that our employees could effectively operate the system and carry out their responsibilities. |
• | The untimely and insufficient operation of controls in the financial statement close process, including lack of timely account reconciliation, analysis and review related to all financial statement accounts. |
• | We implemented certain additional controls around data management and review to ensure accurate data integrity and change controls, including but not limited to, centralizing the data management function and implementing change controls. As we test the controls around data management, we may make additional changes to our processes or controls to ensure adequate remediation of the material weakness. |
• | We reinforced the importance of our control environment across the Company, we provided additional training to employees to enhance their understanding of processes so they can effectively operate the system and perform the related controls. This training is ongoing and continues to be enhanced. |
• | Reviewing , analyzing and properly documenting 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. |
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 | |
* | Filed herewith. | |
** | Furnished herewith. |
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P. | |||
By: | Calumet GP, LLC, its general partner | ||
Date: | November 12, 2019 | By: | /s/ D. West Griffin |
D. West Griffin | |||
Executive Vice President and Chief Financial Officer | |||
(Authorized Person and Principal Accounting Officer) | |||
1. | I have reviewed this Quarterly Report of Calumet Specialty Products Partners, L.P. (the “registrant”) on Form 10-Q for the quarter ended September 30, 2019; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 12, 2019 | /s/ Timothy Go | |
Timothy Go | ||
Chief Executive Officer of Calumet GP, LLC, general partner of Calumet Specialty Products Partners, L.P. | ||
(Principal Executive Officer) |
1. | I have reviewed this Quarterly Report of Calumet Specialty Products Partners, L.P. (the “registrant”) on Form 10-Q for the quarter ended September 30, 2019; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 12, 2019 | /s/ D. West Griffin | |
D. West Griffin | ||
Executive Vice President and Chief Financial Officer of Calumet GP, LLC, general partner of Calumet Specialty Products Partners, L.P. | ||
(Principal Financial Officer) |
(a) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(b) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. |
November 12, 2019 | /s/ Timothy Go | |
Timothy Go | ||
Chief Executive Officer of Calumet GP, LLC, general partner of Calumet Specialty Products Partners, L.P. | ||
(Principal Executive Officer) |
November 12, 2019 | /s/ D. West Griffin | |
D. West Griffin | ||
Executive Vice President and Chief Financial Officer of Calumet GP, LLC, general partner of Calumet Specialty Products Partners, L.P. | ||
(Principal Financial Officer) |
Long-Term Debt |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following (in millions):
6.50% Senior Notes due 2021 (the “2021 Notes”) During the three months ended September 30, 2019, the Company repurchased $49.0 million aggregate principal amount of its 2021 Notes at an average price of 99.4% of par value, plus accrued and unpaid interest thereon up to, but not including the respective transaction dates. In conjunction with the repurchases during the three months ended September 30, 2019, the Company recorded no gain or loss from debt extinguishment. As of September 30, 2019, the Company had repurchased $138.8 million aggregate principal amount of its 2021 Notes and the remaining principal amount following these repurchases was $761.2 million. During the nine months ended September 30, 2019, the Company recorded a net gain from debt extinguishment of $0.7 million. On September 20, 2019, the Company announced a conditional redemption of its 2021 Notes at a price of par, plus accrued and unpaid interest. The obligation to redeem the 2021 Notes was conditioned upon, on or before the redemption date of October 21, 2019, the completion of an offering of at least $550.0 million principal amount of Calumet’s senior debt securities and the satisfaction of all conditions precedent to the effectiveness of the amendment to the Company’s revolving credit facility credit agreement, dated as of September 4, 2019. As of September 30, 2019, the conditions for the redemption of the 2021 Notes had not been met. The conditions for the redemption were met on October 11, 2019, and on October 21, 2019, the Company completed the redemption of the remaining balance of its 2021 Notes, plus accrued and unpaid interest. The redemption was funded with the $540.0 million net proceeds of the offering of 11.00% Senior Notes due 2025 (the “2025 Notes”), the proceeds of a $99.5 million revolving credit facility loan, and $121.7 million of cash on hand. The portion of principal that was redeemed with cash on hand has been classified as a current portion of long-term debt on the balance sheet. Please see Note 15 - “Subsequent Events” for further information. 2021 Notes, 7.625% Senior Notes due 2022 (the “2022 Notes”) and 7.75% Senior Notes due 2023 (the “2023 Notes”) In accordance with SEC Rule 3-10 of Regulation S-X, unaudited condensed consolidated financial statements of non-guarantors are not required. The Company has no assets or operations independent of its subsidiaries. Obligations under its 2021, 2022 and 2023 Notes are fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by the Company’s current 100%-owned operating subsidiaries and certain of the Company’s future operating subsidiaries, with the exception of certain of the Company’s “minor” subsidiaries (as defined by Rule 3-10 of Regulation S-X), including Calumet Finance Corp. (100%-owned Delaware corporation that was organized for the sole purpose of being a co-issuer of certain of the Company’s indebtedness, including the 2021, 2022 and 2023 Notes). There are no significant restrictions on the ability of the Company or subsidiary guarantors for the Company to obtain funds from its subsidiary guarantors by dividend or loan. None of the subsidiary guarantors’ assets represent restricted assets pursuant to SEC Rule 4-08(e)(3) of Regulation S-X. The 2021, 2022 and 2023 Notes are subject to certain automatic customary releases, including the sale, disposition or transfer of capital stock or substantially all of the assets of a subsidiary guarantor, designation of a subsidiary guarantor as unrestricted in accordance with the applicable indenture, exercise of legal defeasance option or covenant defeasance option, liquidation or dissolution of the subsidiary guarantor and a subsidiary guarantor ceases to both guarantee other Company debt and to be an obligor under the revolving credit facility. The Company’s operating subsidiaries may not sell or otherwise dispose of all or substantially all of their properties or assets to, or consolidate with or merge into, another company if such a sale would cause a default under the indentures governing the 2021, 2022 and 2023 Notes. On September 27, 2019, the Company executed supplemental indentures to the indentures governing the 2021, 2022 and 2023 Notes, naming its wholly-owned subsidiaries Calumet Mexico, LLC, Calumet Specialty Oils de Mexico, S. de R.L. de C.V., and Calumet Specialty Products Canada, ULC as additional Guarantors (as defined in the indentures). Following the execution of these supplemental indentures, the Company no longer has material subsidiaries that do not guarantee the 2021, 2022 and 2023 Notes. The indentures governing the 2021, 2022 and 2023 Notes contain covenants that, among other things, restrict the Company’s ability and the ability of certain of the Company’s subsidiaries to: (i) sell assets; (ii) pay distributions on, redeem or repurchase the Company’s common units or redeem or repurchase its subordinated debt; (iii) make investments; (iv) incur or guarantee additional indebtedness or issue preferred units; (v) create or incur certain liens; (vi) enter into agreements that restrict distributions or other payments from the Company’s restricted subsidiaries to the Company; (vii) consolidate, merge or transfer all or substantially all of the Company’s assets; (viii) engage in transactions with affiliates and (ix) create unrestricted subsidiaries. These covenants are subject to important exceptions and qualifications. At any time when the 2021, 2022 and 2023 Notes are rated investment grade by either Moody’s Investors Service, Inc. (“Moody’s”) or S&P Global Ratings (“S&P”) and no Default or Event of Default, each as defined in the indentures governing the 2021, 2022 and 2023 Notes, has occurred and is continuing, many of these covenants will be suspended. As of September 30, 2019, the Company’s Fixed Charge Coverage Ratio (as defined in the indentures governing the 2021, 2022 and 2023 Notes) was 2.3. As of September 30, 2019, the Company was in compliance with all covenants under the indentures governing the 2021, 2022 and 2023 Notes. Third Amended and Restated Senior Secured Revolving Credit Facility On February 23, 2018, the Company entered into the Third Amended and Restated Credit Agreement (the “Credit Agreement”) governing its senior secured revolving credit facility maturing in February 2023, which provides maximum availability of credit under the revolving credit facility of $600.0 million, subject to borrowing base limitations, and includes a $500.0 million incremental uncommitted expansion feature. The revolving credit facility includes a $25.0 million senior secured first loaned in and last to be repaid out (“FILO”) revolving credit facility limited by a FILO borrowing base calculation. The FILO commitment reduces ratably each quarter starting in November 2019 and ending in August 2020. The reductions in FILO commitments convert to revolving credit facility base commitments over the same period. Lenders under the revolving credit facility have a first priority lien on, among other things, the Company’s accounts receivable and inventory and substantially all of its cash. On September 4, 2019, the Company entered into the First Amendment to the Credit Agreement. The amendment expands the borrowing base by $99.6 million on the Effective Date (as defined in the amendment) by adding the fixed assets of the Company’s Great Falls, MT refinery as collateral to the borrowing base. The $99.6 million expansion amortizes to zero on a straight-line basis over ten quarters starting in the first quarter of 2020. Additionally, while the fixed assets of the Great Falls, MT refinery are included in the borrowing base, the first amendment provides for a 25 basis points increase in the applicable margin for loans, as well as increases in the minimum availability under the revolving credit facility required for the Company to be able to perform certain actions, including to make restricted payments of other distributions, sell or dispose of certain assets, make acquisitions or investments, or prepay other indebtedness. Among other conditions precedent that were required to be satisfied before the Effective Date, the Company was required to consummate an offering of at least $450.0 million aggregate principal amount of senior unsecured notes. The conditions precedent were not satisfied until October 11, 2019. Therefore, the $99.6 million expansion was not in effect as of September 30, 2019. See Note 15 - “Subsequent Events” for further information. The revolving credit facility, which is the Company’s primary source of liquidity for cash needs in excess of cash generated from operations, matures in February 2023 and bears interest at a rate equal to prime plus an applicable margin or LIBOR plus an applicable margin, at the Company’s option. The margin can fluctuate quarterly based on the Company’s average availability for additional borrowings under the revolving credit facility in the preceding calendar quarter as follows:
The credit agreement provides for a 25 basis point reduction in the applicable margin rates beginning in the quarter after our Leverage Ratio (as defined in the credit agreement) is less than 5.5 to 1.0. As the Company met this test in fiscal quarter ended June 30, 2019, its applicable margin for the quarter ended, and including, September 30, 2019 was 25 basis points for prime, 125 basis points for LIBOR, 125 basis points for prime rate based FILO loans and 225 basis points for LIBOR based FILO loans. The margin can fluctuate quarterly based on our average availability for additional borrowings under the revolving credit facility in the preceding calendar quarter. Following the October 11, 2019 Effective Date of the first amendment to the credit agreement, the applicable margin rates are increased by 25 basis points for as long as the Great Falls, MT refinery assets are contributing to the borrowing base. Letters of credit issued under the revolving credit facility accrue fees at a rate equal to the margin (measured in basis points) applicable to LIBOR revolver loans. In addition to paying interest quarterly on outstanding borrowings under the revolving credit facility, the Company is required to pay a commitment fee to the lenders under the revolving credit facility with respect to the unutilized commitments thereunder at a rate equal to 0.250% or 0.375% per annum depending on the average daily available unused borrowing capacity for the preceding month. The Company also pays a customary letter of credit fee, including a fronting fee of 0.125% per annum of the stated amount of each outstanding letter of credit, and customary agency fees. The revolving credit facility contains various covenants that limit, among other things, the Company’s ability to: incur indebtedness; grant liens; dispose of certain assets; make certain acquisitions and investments; redeem or prepay other debt or make other restricted payments such as distributions to unitholders; enter into transactions with affiliates; and enter into a merger, consolidation or sale of assets. Further, the revolving credit facility contains one springing financial covenant which provides that only if the Company’s availability to borrow loans under the revolving credit facility falls below the sum of the greater of (i) 10% of the borrowing base then in effect, or 15% while the Great Falls, MT refinery is included in the borrowing base, and (ii) $35.0 million (which amount is subject to increase in proportion to revolving commitment increases), plus the amount of FILO Loans outstanding, then the Company will be required to maintain as of the end of each fiscal quarter a Fixed Charge Coverage Ratio (as defined in the revolving credit facility agreement) of at least 1.0 to 1.0. As of September 30, 2019, the Company was in compliance with all covenants under the revolving credit facility. Maturities of Long-Term Debt As of September 30, 2019, principal payments on debt obligations and future minimum rentals on finance lease obligations are as follows (in millions):
|
Discontinued Operations Discontinued Operations (Notes) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Discontinued Operations On November 21, 2017, Calumet Operating, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company, completed the sale to a subsidiary of Q’Max Solutions Inc. (“Q’Max”) of all of the issued and outstanding membership interests in Anchor Drilling Fluids USA, LLC (“Anchor”), for total consideration of approximately $85.5 million including a base price of $50.0 million, $14.2 million for net working capital and other items and a 10% equity interest in Fluid Holding Corp. (“FHC”), the parent company of Q’Max (the “Anchor Transaction”). Effective in its fourth quarter of 2017, the Company classified its results of operations for all periods presented to reflect Anchor as a discontinued operation and classified the assets and liabilities of Anchor as discontinued operations. Prior to being reported as discontinued operations, Anchor was included as its own reportable segment as oilfield services. As of September 30, 2019 and December 31, 2018, the Company had a $6.1 million and an $11.1 million receivable, respectively, in other accounts receivable in the condensed consolidated balance sheets for the remaining payment of the base price and working capital. On October 31, 2019, Q’Max and the Company agreed to restructure the remaining amount of the receivable to be paid with the final payment due on June 30, 2021. The $6.1 million will be paid with an initial payment of approximately $0.3 million paid upon signing the agreement with subsequent monthly payments beginning December 30, 2019. In addition to the payments of principal, Q’Max shall pay interest at a rate of 6% per annum. The following table summarizes the results of discontinued operations for the periods presented (in millions):
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Unaudited Condensed Consolidated Statements of Partners' Capital - USD ($) $ in Millions |
Total |
General Partner |
Limited Partners |
Accumulated Other Comprehensive Loss |
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Beginning of Period at Dec. 31, 2017 | $ 119.9 | $ 13.8 | $ 113.3 | $ (7.2) |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Other comprehensive income | 2.9 | 0.0 | 0.0 | 2.9 |
Net loss | (73.2) | (1.5) | (71.7) | 0.0 |
Amortization of phantom units | 2.8 | 0.0 | 2.8 | 0.0 |
Settlement of tax withholdings on equity-based incentive compensation | (1.2) | 0.0 | 1.2 | 0.0 |
End of Period at Sep. 30, 2018 | 51.2 | 12.3 | 43.2 | (4.3) |
Beginning of Period at Jun. 30, 2018 | 66.6 | 12.7 | 58.9 | (5.0) |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Other comprehensive income | 0.7 | 0.0 | 0.0 | 0.7 |
Net loss | (16.5) | (0.4) | (16.1) | 0.0 |
Amortization of phantom units | 0.7 | 0.0 | 0.7 | 0.0 |
Settlement of tax withholdings on equity-based incentive compensation | (0.3) | 0.0 | 0.3 | 0.0 |
End of Period at Sep. 30, 2018 | 51.2 | 12.3 | 43.2 | (4.3) |
Beginning of Period at Dec. 31, 2018 | 65.7 | 12.8 | 61.6 | (8.7) |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Other comprehensive income | 1.2 | 0.0 | 0.0 | 1.2 |
Net loss | (5.0) | (0.1) | (4.9) | 0.0 |
Amortization of phantom units | 1.3 | 0.0 | 1.3 | 0.0 |
Settlement of tax withholdings on equity-based incentive compensation | (0.5) | 0.0 | (0.5) | 0.0 |
Contributions from Calumet GP, LLC | 0.1 | 0.1 | 0.0 | 0.0 |
End of Period at Sep. 30, 2019 | 62.8 | 12.8 | 57.5 | (7.5) |
Beginning of Period at Jun. 30, 2019 | 67.1 | 12.9 | 61.7 | (7.5) |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Other comprehensive income | 0.0 | |||
Net loss | (4.6) | (0.1) | (4.5) | 0.0 |
Amortization of phantom units | 0.3 | 0.0 | 0.3 | 0.0 |
End of Period at Sep. 30, 2019 | $ 62.8 | $ 12.8 | $ 57.5 | $ (7.5) |
Leases (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases, Weighted Average Lease Term and Discount Rate [Table Text Block] | The weighted-average remaining lease term and weighted-average discount rate for the Company’s operating and finance leases were as follows:
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Leases - Maturity of Lease Liabilities [Table Text Block] | As of September 30, 2019, the Company had estimated minimum commitments for the payment of rentals under leases which, at inception, had a noncancelable term of more than one year, as follows (in millions):
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Lease, Schedule of Lease Assets and Liabilities [Table Text Block] | Supplemental balance sheet information related to the Company’s leases as of September 30, 2019, were as follows (in millions):
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Lease, Cost [Table Text Block] | The components of lease expense related to the Company’s leases for the three and nine months ended September 30, 2019 were as follows (in millions).
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Discontinued Operations Discontinued Operations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations [Table Text Block] | The following table summarizes the results of discontinued operations for the periods presented (in millions):
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Derivatives (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Gross Fair Values of Derivative Instruments, Presenting the Impact of Offsetting Derivative Assets | The following tables summarize the Company’s gross fair values of its derivative instruments, presenting the impact of offsetting derivative assets in the Company’s condensed consolidated balance sheets (in millions):
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Summary of Gross Fair Values of Derivative Instruments, Presenting the Impact of Offsetting Derivative Liabilities | The following tables summarize the Company’s gross fair values of its derivative instruments, presenting the impact of offsetting derivative liabilities in the Company’s condensed consolidated balance sheets (in millions):
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Commodity Contract | Not Designated as Hedging Instrument [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The Company recorded the following gains (losses) in its unaudited condensed consolidated statements of operations, related to its derivative instruments not designated as hedges (in millions):
The Company recorded the following gains (losses) in its unaudited condensed consolidated statements of operations for the nine months ended September 30, 2019 and 2018, related to its derivative instruments not designated as hedges (in millions):
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WCS crude oil basis swaps | Fuel Product [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Positions | At September 30, 2019, the Company had no derivatives related to either WCS crude oil basis purchases or sales in its fuel products segment, as all positions outstanding at December 31, 2018 were settled during 2019. At December 31, 2018, the Company had the following derivatives related to WCS crude oil basis purchases in its fuel products segment, none of which are designated as hedges:
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WCS Crude Oil Basis Swaps Sales [Member] | Fuel Product [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Positions | At December 31, 2018, the Company had the following derivatives related to WCS crude oil basis sales in its fuel products segment, none of which are designated as hedges:
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Diesel crack spread swaps | Fuel Product [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Positions |
At December 31, 2018, the Company had the following derivatives related to diesel crack spread sales in its fuel products segment, none of which are designated as hedges:
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Diesel percentage basis crack spread swaps | Fuel Product [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Positions | At December 31, 2018, the Company had the following derivatives related to diesel percent basis crack spread swap sales and no derivatives related to diesel percent basis crack spread swap purchases in its fuel products segment, none of which are designated as hedges:
The Company has entered into diesel crack spread derivative instruments to secure a fixed percentage of gross profit on diesel in excess of the floating value of NYMEX WTI crude oil. At September 30, 2019, the Company had the following derivatives related to diesel percent basis crack spread swap sales in its fuel products segment, none of which are designated as hedges:
At September 30, 2019, the Company had the following derivatives related to diesel percentage basis swap purchases in its fuel products segment, none of which are designated as hedges:
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Midland crude oil basis swap purchases [Member] | Fuels and Specialty [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Positions | The Company had no crude oil basis swaps to mitigate the risk of future changes in pricing differentials between WTI Midland and NYMEX WTI as of September 30, 2019. At December 31, 2018, the Company had the following derivatives related to Midland crude oil basis swaps in its fuel products segment, none of which are designated as hedges:
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WCS crude oil percentage basis swap | Fuel Product [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Positions | At December 31, 2018, the Company had the following derivatives related to crude oil percentage basis swap purchases in its fuel products segment, none of which are designated as hedges:
At December 31, 2018, the Company had no derivatives related to crude oil percentage basis swap sales in its fuel products segment. At September 30, 2019, the Company had the following derivatives related to crude oil percentage basis swap purchases in its fuel products segment, none of which are designated as hedges:
At September 30, 2019, the Company had the following derivatives related to crude oil percentage basis swap sales in its fuel products segment, none of which are designated as hedges:
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Commitments and Contingencies Commitments and Contingencies - Narrative - Throughput Contract (Details) $ in Millions |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019
bbl
|
Nov. 10, 2019
USD ($)
|
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||
Unrecorded Unconditional Purchase Obligations Disclosure [Table Text Block] | As of September 30, 2019, the estimated minimum unconditional purchase commitments under this agreement were as follows (in millions):
|
|||||||||||||||||||||||||||||||||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Long-term Purchase Commitment, Minimum Volume Required | bbl | 5,000 | |||||||||||||||||||||||||||||||||||||||||
Product Liability Contingency, Third Party Recovery, Percentage | 2.00% | |||||||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Purchase Commitment, Remaining Minimum Amount Committed | $ 20.6 | |||||||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | 2020 | ||||||||||||||||||||||||||||||||||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Purchase Commitment, Remaining Minimum Amount Committed | 3.6 | |||||||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | 2021 | ||||||||||||||||||||||||||||||||||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Purchase Commitment, Remaining Minimum Amount Committed | 3.4 | |||||||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | 2022 | ||||||||||||||||||||||||||||||||||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Purchase Commitment, Remaining Minimum Amount Committed | 3.1 | |||||||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | 2023 | ||||||||||||||||||||||||||||||||||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Purchase Commitment, Remaining Minimum Amount Committed | 2.9 | |||||||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | 2024 | ||||||||||||||||||||||||||||||||||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Purchase Commitment, Remaining Minimum Amount Committed | 2.7 | |||||||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Thereafter | ||||||||||||||||||||||||||||||||||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Purchase Commitment, Remaining Minimum Amount Committed | $ 4.9 |
Commitments and Contingencies Commitments and Contingencies - Narrative -Standby Letters of Credit (Details) - USD ($) $ in Millions |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Revolving Credit Facility | ||
Loss Contingencies [Line Items] | ||
Outstanding standby letters of credit | $ 70.1 | $ 35.1 |
Revolver commitments | $ 600.0 | $ 600.0 |
Revolving Credit Facility | Maximum [Member] | ||
Loss Contingencies [Line Items] | ||
Letter of Credit Sublimit | 90.00% | 90.00% |
Letter of Credit | ||
Loss Contingencies [Line Items] | ||
Revolver commitments | $ 300.0 | $ 300.0 |
Long-Term Debt - Summary of Principal Payments on Debt Obligations and Future Minimum Rentals on Capital Lease Obligations (Details) $ in Millions |
Sep. 30, 2019
USD ($)
|
---|---|
Maturities of long-term debt | |
2019 | $ 122.1 |
2020 | 1.8 |
2021 | 642.1 |
2022 | 350.3 |
2023 | 325.4 |
Thereafter | 1.4 |
Long-term debt | $ 1,443.1 |
Fair Value Measurements - Summary of Net Changes in Fair Value of the Company's Level 3 Financial Assets and Liabilities (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Summary of net changes in fair value of the company's level 3 financial assets and liabilities | ||||
Realized (gain) loss on derivative instruments | $ (5.0) | $ (2.7) | $ 14.4 | $ (2.0) |
Unrealized gain (loss) on derivative instruments | (5.4) | (2.4) | (20.2) | 0.4 |
Level 3 | ||||
Summary of net changes in fair value of the company's level 3 financial assets and liabilities | ||||
Fair value at January 1, | $ (10.0) | 19.8 | (10.4) | |
Realized (gain) loss on derivative instruments | (34.6) | 2.4 | ||
Unrealized gain (loss) on derivative instruments | (20.2) | 0.4 | ||
Settlements | (34.6) | (2.4) | ||
Fair value at June 30, | $ (0.4) | (0.4) | ||
Total gain (loss) included in net loss attributable to changes in unrealized gain relating to financial assets and liabilities held as of June 30, | $ (20.2) | $ 0.4 |
Leases Leases - Lease Term and Discount Rate (Details) |
Sep. 30, 2019 |
---|---|
Leases [Abstract] | |
Operating Lease, Weighted Average Remaining Lease Term | 2 years 7 months |
Finance Lease, Weighted Average Remaining Lease Term | 7 years 3 months |
Operating Lease, Weighted Average Discount Rate, Percent | 7.30% |
Finance Lease, Weighted Average Discount Rate, Percent | 8.80% |
Segments and Related Information - Schedule of Major Product Category Sales (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Major product category sales | ||||
Sales | $ 929.6 | $ 2,677.8 | ||
Product Concentration Risk [Member] | ||||
Major product category sales | ||||
Sales, percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Product Concentration Risk [Member] | Specialty Product [Member] | ||||
Major product category sales | ||||
Sales | $ 355.8 | $ 349.2 | $ 1,052.4 | $ 1,053.6 |
Sales, percentage | 38.30% | 36.60% | 39.30% | 39.80% |
Product Concentration Risk [Member] | Fuel Product [Member] | ||||
Major product category sales | ||||
Sales | $ 573.8 | $ 604.3 | $ 1,625.4 | $ 1,595.9 |
Sales, percentage | 61.70% | 63.40% | 60.70% | 60.20% |
Lubricating Oils [Member] | Product Concentration Risk [Member] | Specialty Product [Member] | ||||
Major product category sales | ||||
Sales | $ 156.1 | $ 146.6 | $ 460.7 | $ 448.3 |
Sales, percentage | 16.80% | 15.40% | 17.20% | 16.90% |
Solvents [Member] | Product Concentration Risk [Member] | Specialty Product [Member] | ||||
Major product category sales | ||||
Sales | $ 86.1 | $ 88.3 | $ 254.2 | $ 254.3 |
Sales, percentage | 9.30% | 9.30% | 9.50% | 9.60% |
Waxes [Member] | Product Concentration Risk [Member] | Specialty Product [Member] | ||||
Major product category sales | ||||
Sales | $ 30.1 | $ 30.1 | $ 92.6 | $ 87.8 |
Sales, percentage | 3.20% | 3.20% | 3.50% | 3.30% |
Packaged and Synthetic Specialty Products [Member] | ||||
Major product category sales | ||||
Sales | $ 59.6 | $ 64.0 | $ 180.2 | $ 204.9 |
Packaged and Synthetic Specialty Products [Member] | Product Concentration Risk [Member] | Specialty Product [Member] | ||||
Major product category sales | ||||
Sales | $ 59.6 | $ 64.0 | $ 180.2 | $ 204.9 |
Sales, percentage | 6.40% | 6.60% | 6.70% | 7.80% |
Other [Member] | ||||
Major product category sales | ||||
Sales | $ 296.2 | $ 285.2 | $ 872.2 | $ 848.7 |
Other [Member] | Product Concentration Risk [Member] | Specialty Product [Member] | ||||
Major product category sales | ||||
Sales | $ 23.9 | $ 20.2 | $ 64.7 | $ 58.3 |
Sales, percentage | 2.60% | 2.10% | 2.40% | 2.20% |
Gasoline [Member] | Product Concentration Risk [Member] | Fuel Product [Member] | ||||
Major product category sales | ||||
Sales | $ 189.5 | $ 191.2 | $ 530.9 | $ 528.8 |
Sales, percentage | 20.40% | 20.10% | 19.80% | 20.00% |
Diesel [Member] | Product Concentration Risk [Member] | Fuel Product [Member] | ||||
Major product category sales | ||||
Sales | $ 225.4 | $ 257.5 | $ 669.4 | $ 681.5 |
Sales, percentage | 24.20% | 27.00% | 25.00% | 25.70% |
Jet fuel [Member] | Product Concentration Risk [Member] | Fuel Product [Member] | ||||
Major product category sales | ||||
Sales | $ 39.5 | $ 28.1 | $ 100.8 | $ 78.9 |
Sales, percentage | 4.20% | 2.90% | 3.80% | 3.00% |
Asphalt, Heavy Fuel Oils and Other [Member] | Product Concentration Risk [Member] | Fuel Product [Member] | ||||
Major product category sales | ||||
Sales | $ 119.4 | $ 127.5 | $ 324.3 | $ 306.7 |
Sales, percentage | 12.80% | 13.40% | 12.10% | 11.50% |
Oil and Gas, Refining and Marketing [Member] | ||||
Major product category sales | ||||
Sales | $ 929.6 | $ 953.5 | $ 2,677.8 | $ 2,649.5 |
Oil and Gas, Refining and Marketing [Member] | Product Concentration Risk [Member] | ||||
Major product category sales | ||||
Sales | $ 929.6 | $ 953.5 | $ 2,677.8 | $ 2,649.5 |
Commitments and Contingencies - Narrative - Environmental (Details) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Jul. 09, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
|
Great Falls | |||
Loss Contingencies [Line Items] | |||
Environmental Remediation Expense | $ 17.0 | ||
Great Falls | Capital Expenditure | |||
Loss Contingencies [Line Items] | |||
Environmental Remediation Expense | $ 14.6 | ||
shreveport [Member] | |||
Loss Contingencies [Line Items] | |||
Settlement Agreement Became Effective | Jul. 09, 2019 | ||
Environmental Applicability, Impact and Conclusion Disclosures | 0.1 | ||
Fair Value, Measurements, Recurring | |||
Loss Contingencies [Line Items] | |||
RINs Obligation | $ (14.4) | $ (15.8) | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Loss Contingencies [Line Items] | |||
RINs Obligation | $ (14.4) | $ (15.8) |
Description of the Business - Narrative (Details) - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Dec. 31, 2018 |
|
Limited Partner | ||
Schedule of Capitalization, Equity [Line Items] | ||
Limited partner common units outstanding | 77,556,190 | 77,177,159 |
Limited partners ownership | 98.00% | |
General Partner | ||
Schedule of Capitalization, Equity [Line Items] | ||
General partner equivalent units outstanding | 1,582,779 | |
General partner ownership | 2.00% |
Inventories - Summary of Inventories (Details) - USD ($) $ in Millions |
Sep. 30, 2019 |
Dec. 31, 2018 |
|||
---|---|---|---|---|---|
Inventories | |||||
Raw materials | $ 58.6 | $ 52.4 | |||
Work in process | 69.7 | 59.9 | |||
Finished goods | 165.0 | 171.8 | |||
Inventories total | 293.3 | 284.1 | |||
Titled Inventory | |||||
Inventories | |||||
Raw materials | 43.9 | 41.8 | |||
Work in process | 37.0 | 40.7 | |||
Finished goods | 112.1 | 127.9 | |||
Inventories total | 193.0 | 210.4 | |||
Supply&Offtake Agreements | |||||
Inventories | |||||
Raw materials | [1] | 14.7 | 10.6 | ||
Work in process | [1] | 32.7 | 19.2 | ||
Finished goods | [1] | 52.9 | 43.9 | ||
Inventories total | [1] | $ 100.3 | $ 73.7 | ||
|
Derivatives Derivatives - Schedule of Derivative Positions (Midland Crude Oil Basis Swap) (Details) - Midland crude oil basis swap purchases [Member] - Not Designated as Hedging Instrument [Member] - Fuel Product [Member] |
Sep. 30, 2019
bbl
|
Dec. 31, 2018
bbl
$ / bbl
|
---|---|---|
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 0 | 1,275,000 |
Average Swap ($/Bbl) | $ / bbl | (12.27) | |
First Quarter 2019 [Member] | ||
Derivative [Line Items] | ||
Barrels per Day Purchased | 5,572 | |
Derivative, Nonmonetary Notional Amount | 501,500 | |
Average Swap ($/Bbl) | $ / bbl | (12.79) | |
Second Quarter 2019 [Member] | ||
Derivative [Line Items] | ||
Barrels per Day Purchased | 8,500 | |
Derivative, Nonmonetary Notional Amount | 773,500 | |
Average Swap ($/Bbl) | $ / bbl | (11.74) |
Derivatives Derivatives - Schedule of Derivative Positions (WCS Crude Oil Basis Swaps) (Details) - Fuel Product [Member] - Not Designated as Hedging Instrument [Member] |
Sep. 30, 2019
bbl
$ / bbl
|
Dec. 31, 2018
bbl
$ / bbl
|
---|---|---|
WCS crude oil basis swaps | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 0 | 1,794,000 |
Average Swap ($/Bbl) | $ / bbl | (28.19) | |
Diesel crack spread swaps | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 258,500 | 1,825,000 |
Average Swap ($/Bbl) | $ / bbl | 22.78 | 25.58 |
Midland crude oil basis swap purchases [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 0 | 1,275,000 |
Average Swap ($/Bbl) | $ / bbl | (12.27) | |
WCS Crude Oil Basis Swaps Sales [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 1,763,000 | |
Average Swap ($/Bbl) | $ / bbl | (19.84) | |
First Quarter 2019 [Member] | WCS crude oil basis swaps | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 419,000 | |
Barrels per Day Purchased | 4,656 | |
Average Swap ($/Bbl) | $ / bbl | (28.10) | |
First Quarter 2019 [Member] | Diesel crack spread swaps | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 450,000 | |
Average Swap ($/Bbl) | $ / bbl | 25.58 | |
First Quarter 2019 [Member] | Midland crude oil basis swap purchases [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 501,500 | |
Barrels per Day Purchased | 5,572 | |
Average Swap ($/Bbl) | $ / bbl | (12.79) | |
First Quarter 2019 [Member] | WCS Crude Oil Basis Swaps Sales [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 0 | 388,000 |
Average Swap ($/Bbl) | $ / bbl | (19.84) | |
Second Quarter 2019 [Member] | WCS crude oil basis swaps | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 455,000 | |
Barrels per Day Purchased | 5,000 | |
Average Swap ($/Bbl) | $ / bbl | (28.22) | |
Second Quarter 2019 [Member] | Diesel crack spread swaps | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 455,000 | |
Average Swap ($/Bbl) | $ / bbl | 25.58 | |
Second Quarter 2019 [Member] | Midland crude oil basis swap purchases [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 773,500 | |
Barrels per Day Purchased | 8,500 | |
Average Swap ($/Bbl) | $ / bbl | (11.74) | |
Second Quarter 2019 [Member] | WCS Crude Oil Basis Swaps Sales [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 455,000 | |
Average Swap ($/Bbl) | $ / bbl | (19.84) | |
Third Quarter 2019 [Member] | WCS crude oil basis swaps | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 460,000 | |
Barrels per Day Purchased | 5,000 | |
Average Swap ($/Bbl) | $ / bbl | (28.22) | |
Third Quarter 2019 [Member] | Diesel crack spread swaps | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 460,000 | |
Average Swap ($/Bbl) | $ / bbl | 25.58 | |
Third Quarter 2019 [Member] | WCS Crude Oil Basis Swaps Sales [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 460,000 | |
Average Swap ($/Bbl) | $ / bbl | (19.84) | |
Fourth Quarter 2019 [Member] | WCS crude oil basis swaps | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 460,000 | |
Barrels per Day Purchased | 5,000 | |
Average Swap ($/Bbl) | $ / bbl | (28.22) | |
Fourth Quarter 2019 [Member] | Diesel crack spread swaps | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 62,000 | 460,000 |
Average Swap ($/Bbl) | $ / bbl | 22.18 | 25.58 |
Fourth Quarter 2019 [Member] | WCS Crude Oil Basis Swaps Sales [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 460,000 | |
Average Swap ($/Bbl) | $ / bbl | (19.84) |
Summary of Significant Accounting Policies (Policies) |
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Sep. 30, 2019 | |||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||
Fair Value Measurement [Policy Text Block] | The Company’s investment in FHC is a non-marketable equity security without a readily determinable fair value. The Company records this investment using a measurement alternative which measures the security at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes with a same or similar security from the same issuer. The investment in FHC is recorded at fair value only if an impairment or observable price adjustment is recognized in the current period. If an observable price adjustment or impairment is recognized, the Company would classify this asset as Level 3 within the fair value hierarchy based on the nature of the fair value inputs. |
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Inventory Financing [Policy Text Block] | While title to certain inventories will reside with Macquarie, the Supply and Offtake Agreements are accounted for by the Company similar to a product financing arrangement; therefore, the inventories sold to Macquarie will continue to be included in the Company’s condensed consolidated balance sheets until processed and sold to a third party. Each reporting period, the Company will record liabilities in an amount equal to the amount the Company expects to pay to repurchase the inventory held by Macquarie based on market prices at the termination date included in obligations under inventory financing agreements in the condensed consolidated balance sheets. The Company has determined that the redemption feature on the initially recognized liabilities related to the Supply and Offtake Agreements is an embedded derivative indexed to commodity prices. As such, the Company has accounted for these embedded derivatives at fair value with changes in the fair value, if any, recorded in gain (loss) on derivative instruments in the Company’s unaudited condensed consolidated statements of operations. For more information on the valuation of the associated derivatives, see Note 10 - “Derivatives” and Note 11 - “Fair Value Measurements.” The embedded derivatives will be recorded in obligations under inventory financing agreements on the condensed consolidated balance sheets. The cash flow impact of the embedded derivatives will be classified as a change in inventory financing activity in the financing activities section in the unaudited condensed consolidated statements of cash flows. |
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Basis of Accounting | The unaudited condensed consolidated financial statements of the Company as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018, included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These unaudited condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the interim periods presented. All adjustments are of a normal nature, unless otherwise disclosed. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s 2018 Annual Report. |
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RINS Obligation | The Company’s Renewable Identification Numbers (“RINs”) obligation (“RINs Obligation”) represents a liability for the purchase of RINs to satisfy the EPA requirement to blend biofuels into the fuel products it produces pursuant to the EPA’s RFS. RINs are assigned to biofuels produced in the U.S. as required by the EPA. The EPA sets annual quotas for the percentage of biofuels that must be blended into transportation fuels consumed in the U.S. and, as a producer of motor fuels from petroleum, the Company is required to blend biofuels into the fuel products it produces at a rate that will meet the EPA’s annual quota. To the extent the Company is unable to blend biofuels at that rate, it must purchase RINs in the open market to satisfy the annual requirement. The Company’s RINs Obligation is based on the amount of RINs it must purchase and the price of those RINs as of the balance sheet date. The Company uses the inventory model to account for RINs, measuring acquired RINs at weighted-average cost. The cost of RINs used each period is charged to cost of sales with cash inflows and outflows recorded in the operating cash flow section of the unaudited condensed consolidated statements of cash flows. The liability is calculated by multiplying the RINs shortage (based on actual results) by the period end RIN spot price. The Company recognizes an asset at the end of each reporting period in which it has generated RINs in excess of its RINs Obligation. The asset is initially recorded at cost at the time the Company acquires them and are subsequently revalued at the lower of cost or market as of the last day of each accounting period and the resulting adjustments are reflected in cost of sales for the period in the unaudited condensed consolidated statements of operations. The value of RINs in excess of the RINs Obligation, if any, would be reflected in other current assets on the condensed consolidated balance sheets. RINs generated in excess of the Company’s current RINs Obligation may be sold or held to offset future RINs Obligations. Any such sales of excess RINs are recorded in cost of sales in the unaudited condensed consolidated statements of operations. The liabilities associated with the Company’s RINs Obligation are considered recurring fair value measurements. |
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New Accounting Pronouncements | Adopted Accounting Pronouncements On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) and all the related amendments to its lease contracts using the modified retrospective method. The effective date was used as the Company’s date of initial application with no restatement of prior periods. As such, prior periods continue to be reported under the accounting standards in effect for those periods. See Note 14 - “Leases” for further information. On January 1, 2019, the Company adopted ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which improves the financial reporting of hedging relationships to better align risk management activities in financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. Given the Company’s current risk management strategy of not designating any of its derivative positions as hedges, the adoption of this guidance had no effect on our consolidated financial statements. If, in the future, the Company decides to modify its hedging strategies, this new accounting guidance would become applicable and will be applied at that time. On January 1, 2019, the Company adopted ASU No. 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). This update simplifies the guidance related to nonemployee share-based payments by superseding ASC 505-50 and expanding the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. Prior to the issuance of this standard update, nonemployee share-based payments were subject to ASC 505-50 requirements while employee share-based payments were subject to ASC 718 requirements. ASU 2018-07 is effective for fiscal years (including interim periods) beginning after December 15, 2018, with early adoption permitted. The adoption of ASU 2018-07 had no impact on the Company’s condensed consolidated financial statements. |
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Revenue from Contract with Customer [Policy Text Block] | The Company may incur incremental costs to obtain a sales contract, which under ASC 606 should be capitalized and amortized over the life of the contract. The Company has elected to apply the practical expedient in ASC 340-40-50-5 allowing the Company to expense these costs since the contracts are short-term in nature with a contract term of one year or less. The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. For each contract, the Company considers the promise to transfer products, each of which are distinct, to be the identified performance obligations. In determining the transaction price, the Company evaluates whether the price is subject to variable consideration such as product returns, rebates or other discounts to determine the net consideration to which the Company expects to be entitled. The Company transfers control and recognizes revenue upon shipment to the customer or, in certain cases, upon receipt by the customer in accordance with contractual terms. the Company collects and remits sales taxes associated with certain sales of its products to non-exempt customers. The Company excludes excise taxes and sales taxes that are collected from customers from the transaction price in its contracts with customers. Accordingly, revenue from contracts with customers is net of sales-based taxes that are collected from customers and remitted to taxing authorities. Revenues are recognized when control of the promised goods are transferred to the customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods promised within each contract and determines the performance obligations and assesses whether each promised good is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Under product sales contracts, the Company invoices customers for performance obligations that have been satisfied, at which point payment is unconditional. Accordingly, a product sales contract does not give rise to contract assets or liabilities under ASC 606. Shipping and handling costs are deemed to be fulfillment activities rather than a separate distinct performance obligation Revenue is recognized when obligations under the terms of a contract with a customer are satisfied; recognition generally occurs with the transfer of control at a point in time. The contract with the customer states the final terms of the sale, including the description, quantity and price of each product or service purchased. For fuel products, payment is typically due in full between 2 to 30 days of delivery or the start of the contract term, such that payment is typically collected 2 to 30 days subsequent to the satisfaction of performance obligations. For specialty products, payment is typically due in full between 30 to 90 days of delivery or the start of the contract term, such that payment is typically collected 30 to 90 days subsequent to the satisfaction of performance obligations. In the normal course of business, the Company does not accept product returns unless the item is defective as manufactured. The expected costs associated with a product assurance warranty continues to be recognized as expense when products are sold. The Company does not offer promised services that could be considered warranties that are sold separately or provide a service in addition to assurance that the related product complies with agreed upon specifications. The Company establishes provisions based on the methods described in ASC 606 for estimated returns and warranties as variable consideration when determining the transaction price. |
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Inventories | Under the LIFO inventory method, the most recently incurred costs are charged to cost of sales and inventories are valued at the earliest acquisition costs. In addition, the use of the LIFO inventory method may result in increases or decreases to cost of sales in years that inventory volumes decline as the result of charging cost of sales with LIFO inventory costs generated in prior periods. In periods of rapidly declining prices, LIFO inventories may have to be written down to market value due to the higher costs assigned to LIFO layers in prior periods. Costs include crude oil and other feedstocks, labor, processing costs and refining overhead costs. Inventories are valued at the lower of cost or market value. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs and are subject to the final year-end LIFO inventory valuation. In certain circumstances, the Company may decide not to replenish inventory for certain products or product lines during an interim period, in which case, the Company may record interim LIFO adjustments during that period. |
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Derivatives | To manage credit risk, the Company selects and periodically reviews counterparties based on credit ratings. The Company is exposed to price risks due to fluctuations in the price of crude oil, refined products (primarily in the Company’s fuel products segment), natural gas and precious metals. The Company uses various strategies to reduce its exposure to commodity price risk. The strategies to reduce the Company’s risk utilize both physical forward contracts and financially settled derivative instruments, such as swaps, collars, options and futures, to attempt to reduce the Company’s exposure with respect to:
The Company manages its exposure to commodity markets, credit, volumetric and liquidity risks to manage its costs and volatility of cash flows as conditions warrant or opportunities become available. These risks may be managed in a variety of ways that may include the use of derivative instruments. Derivative instruments may be used for the purpose of mitigating risks associated with an asset, liability and anticipated future transactions and the changes in fair value of the Company’s derivative instruments will affect its earnings and cash flows; however, such changes should be offset by price or rate changes related to the underlying commodity or financial transaction that is part of the risk management strategy. The Company does not speculate with derivative instruments or other contractual arrangements that are not associated with its business objectives. Speculation is defined as increasing the Company’s natural position above the maximum position of its physical assets or trading in commodities, currencies or other risk bearing assets that are not associated with the Company’s business activities and objectives. The Company’s positions are monitored routinely by a risk management committee to ensure compliance with its stated risk management policy and documented risk management strategies. All strategies are reviewed on an ongoing basis by the Company’s risk management committee, which will add, remove or revise strategies in anticipation of changes in market conditions and/or its risk profiles. Such changes in strategies are to position the Company in relation to its risk exposures in an attempt to capture market opportunities as they arise. The Company is obligated to repurchase crude oil and refined products from Macquarie at the termination of the Supply and Offtake Agreements in certain scenarios. The Company has determined that the redemption feature on the initially recognized liability related to the Supply and Offtake Agreements is an embedded derivative indexed to commodity prices. As such, the Company has accounted for these embedded derivatives at fair value with changes in the fair value, if any, recorded in gain (loss) on derivative instruments in the Company’s unaudited condensed consolidated statements of operations. The Company recognizes all derivative instruments at their fair values (see Note 11 - “Fair Value Measurements”) as either current assets or current liabilities in the condensed consolidated balance sheets. Fair value includes any premiums paid or received and unrealized gains and losses. Fair value does not include any amounts receivable from or payable to counterparties, or collateral provided to counterparties. Derivative asset and liability amounts with the same counterparty are netted against each other for financial reporting purposes in accordance with the provisions of our master netting arrangements. In the event of default, the Company would potentially be subject to losses on derivative instruments with mark-to-market gains. The Company requires collateral from its counterparties when the fair value of the derivatives exceeds agreed-upon thresholds in its master derivative contracts with these counterparties. The cash flow impact of the Company’s derivative activities is classified primarily as a change in derivative activity in the operating activities section in the unaudited condensed consolidated statements of cash flows. Certain of the Company’s outstanding derivative instruments are subject to credit support agreements with the applicable counterparties which contain provisions setting certain credit thresholds above which the Company may be required to post agreed-upon collateral, such as cash or letters of credit, with the counterparty to the extent that the Company’s mark-to-market net liability, if any, on all outstanding derivatives exceeds the credit threshold amount per such credit support agreement. The majority of the credit support agreements covering the Company’s outstanding derivative instruments also contain a general provision stating that if the Company experiences a material adverse change in its business, in the reasonable discretion of the counterparty, the Company’s credit threshold could be lowered by such counterparty. For derivative instruments not designated as hedges, the change in fair value of the asset or liability for the period is recorded to gain (loss) on derivative instruments in the unaudited condensed consolidated statements of operations. Upon the settlement of a derivative not designated as a hedge, the gain or loss at settlement is recorded to gain (loss) on derivative instruments in the unaudited condensed consolidated statements of operations. The Company has entered into gasoline swaps, diesel swaps and certain crude oil basis swaps that do not qualify as cash flow hedges for accounting purposes as they were not entered into simultaneously with a corresponding NYMEX WTI derivative contract. However, these instruments provide economic hedges of the purchases and sales of the Company’s crude oil, gasoline and diesel. Collateral received from counterparties is reported in other current liabilities, and collateral held by counterparties is reported in prepaid expenses and other current assets on the Company’s condensed consolidated balance sheets and is not netted against derivative assets or liabilities. |
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Fair Value Measurement | The estimated aggregate fair value of the Company’s senior notes defined as Level 1 was based upon quoted market prices in an active market. The carrying value of borrowings, if any, under the Company’s revolving credit facility, finance lease obligations and other obligations approximate their fair values as determined by discounted cash flows and are classified as Level 3. he Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. Observable inputs are from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. These tiers include the following:
In determining fair value, the Company uses various valuation techniques and prioritizes the use of observable inputs. The availability of observable inputs varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded and other characteristics particular to the instrument. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants and the valuation does not require significant management judgment. For other financial instruments, pricing inputs are less observable in the marketplace and may require management judgment. Pension assets are reported at fair value in the accompanying unaudited condensed consolidated financial statements. At September 30, 2019, the Company’s investments associated with its pension plan primarily consisted of mutual funds. The mutual funds are valued at the net asset value of shares in each fund held by the Pension Plan at quarter end as provided by the respective investment sponsors or investment advisers. Plan investments can be redeemed within a short time frame (approximately ten business days), if requested. Derivative instruments are reported in the accompanying unaudited condensed consolidated financial statements at fair value. The Company’s derivative instruments consist of over-the-counter contracts, which are not traded on a public exchange. To estimate the fair values of the Company’s commodity derivative instruments, the Company uses the forward rate, the strike price, contractual notional amounts, the risk-free rate of return and contract maturity. Various analytical tests are performed to validate the counterparty data. The fair values of the Company’s derivative instruments are adjusted for nonperformance risk and creditworthiness of the counterparty through the Company’s credit valuation adjustment (“CVA”). The CVA is calculated at the counterparty level utilizing the fair value exposure at each payment date and applying a weighted probability of the appropriate survival and marginal default percentages. The Company uses the counterparty’s marginal default rate and the Company’s survival rate when the Company is in a net asset position at the payment date and uses the Company’s marginal default rate and the counterparty’s survival rate when the Company is in a net liability position at the payment date. All settlements from derivative instruments not designated as hedges are recorded in gain (loss) on derivative instruments in the unaudited condensed consolidated statements of operations. The carrying value of cash and cash equivalents is each considered to be representative of its fair value. The Company’s RINs Obligation is categorized as Level 2 and is measured at fair value using the market approach based on quoted prices from an independent pricing service. Certain non-financial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. Assets and liabilities acquired in business combinations are recorded at their fair value as of the date of acquisition. The Company reviews for goodwill impairment annually on October 1 and whenever events or changes in circumstances indicate its carrying value may not be recoverable. The fair value of the reporting units is determined using the income approach. The income approach focuses on the income-producing capability of an asset, measuring the current value of the asset by calculating the present value of its future economic benefits such as cash earnings, cost savings, corporate tax structure and product offerings. Value indications are developed by discounting expected cash flows to their present value at a rate of return that incorporates the risk-free rate for the use of funds, the expected rate of inflation and risks associated with the reporting unit. These assets would generally be classified within Level 3, in the event that the Company were required to measure and record such assets at fair value within its unaudited condensed consolidated financial statements. The Company periodically evaluates the carrying value of long-lived assets to be held and used, including definite-lived intangible assets and property, plant and equipment, when events or circumstances warrant such a review. Fair value is determined primarily using anticipated cash flows assumed by a market participant discounted at a rate commensurate with the risk involved and these assets would generally be classified within Level 3, the Company was required to measure and record such assets at fair value within its unaudited condensed consolidated financial statements. Observable inputs utilized to estimate the fair values of the Company’s derivative instruments were based primarily on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Based on the use of various unobservable inputs, principally non-performance risk, creditworthiness of the counterparties and unobservable inputs in the forward rate, the Company has categorized these derivative instruments as Level 3. Significant increases (decreases) in any of those unobservable inputs in isolation would result in a significantly lower (higher) fair value measurement. The Company believes it has obtained the most accurate information available for the types of derivative instruments it holds. Unit based compensation liability awards are awards that are expected to be settled in cash on their vesting dates, rather than in equity units (“Liability Awards”). The Liability Awards are categorized as Level 1 because the fair value of the Liability Awards is based on the Company’s quoted closing unit price as of each balance sheet date. |
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Segment Reporting | The Company offers specialty products primarily in categories consisting of lubricating oils, solvents, waxes, synthetic lubricants and other products. Fuel products categories primarily consist of gasoline, diesel, jet fuel, asphalt and other products. The Company determines its reportable segments based on how the business is managed internally for the products sold to customers, including how results are reviewed and resources are allocated by the chief operating decision makers (“CODM”). The Company’s operations are managed by the CODM using the following reportable segments:
During the third quarter of 2019, the CODM changed how the Company assesses performance, allocates resources, and allocates certain costs. In response to those changes, a corporate segment was added. Prior to the third quarter of 2019, various pricing models were used in determining the calculation of intersegment sales. Beginning in the third quarter of 2019, all intersegment sales are calculated using market-based transfer pricing. Further, cost allocations were modified to conform to the new segment alignments. This change in management reporting has resulted in an increase in the inter-segment sales reported by the Company’s specialty products operating segment. Prior period amounts have been recast to conform with the current presentation. These changes in management reporting had no impact on consolidated revenue, segment reporting of external sales or consolidated Adjusted EBITDA. The accounting policies of the reporting segments are the same as those described in the summary of significant accounting policies as disclosed in Note 2 — “Summary of Significant Accounting Policies” in Part II, Item 8 “Financial Statements and Supplementary Data” of the Company’s 2018 Annual Report, except that the disaggregated financial results for the reporting segments have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for the purposes of assisting internal operating decisions. The Company accounts for intersegment sales and transfers using a market-based approach. The Company evaluates performance based upon Adjusted EBITDA (a non-GAAP financial measure). The Company defines Adjusted EBITDA for any period as EBITDA adjusted for (a) impairment; (b) unrealized gains and losses from mark to market accounting for hedging activities; (c) realized gains and losses under derivative instruments excluded from the determination of net income (loss); (d) non-cash equity-based compensation expense and other non-cash items (excluding items such as accruals of cash expenses in a future period or amortization of a prepaid cash expense) that were deducted in computing net income (loss); (e) debt refinancing fees, premiums and penalties; (f) any net loss realized in connection with an asset sale that was deducted in computing net income (loss) and (g) all extraordinary, unusual or non-recurring items of gain or loss, or revenue or expense. The Company manages its assets on a total company basis, not by segment. Therefore, management does not review any asset information by segment and, accordingly, the Company does not report asset information by segment. |
Segments and Related Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments and Related Information | a. Segment Reporting The Company determines its reportable segments based on how the business is managed internally for the products sold to customers, including how results are reviewed and resources are allocated by the chief operating decision makers (“CODM”). The Company’s operations are managed by the CODM using the following reportable segments:
During the third quarter of 2019, the CODM changed how the Company assesses performance, allocates resources, and allocates certain costs. In response to those changes, a corporate segment was added. Prior to the third quarter of 2019, various pricing models were used in determining the calculation of intersegment sales. Beginning in the third quarter of 2019, all intersegment sales are calculated using market-based transfer pricing. Further, cost allocations were modified to conform to the new segment alignments. This change in management reporting has resulted in an increase in the inter-segment sales reported by the Company’s specialty products operating segment. Prior period amounts have been recast to conform with the current presentation. These changes in management reporting had no impact on consolidated revenue, segment reporting of external sales or consolidated Adjusted EBITDA. The accounting policies of the reporting segments are the same as those described in the summary of significant accounting policies as disclosed in Note 2 — “Summary of Significant Accounting Policies” in Part II, Item 8 “Financial Statements and Supplementary Data” of the Company’s 2018 Annual Report, except that the disaggregated financial results for the reporting segments have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for the purposes of assisting internal operating decisions. The Company accounts for intersegment sales and transfers using a market-based approach. The Company evaluates performance based upon Adjusted EBITDA (a non-GAAP financial measure). The Company defines Adjusted EBITDA for any period as EBITDA adjusted for (a) impairment; (b) unrealized gains and losses from mark to market accounting for hedging activities; (c) realized gains and losses under derivative instruments excluded from the determination of net income (loss); (d) non-cash equity-based compensation expense and other non-cash items (excluding items such as accruals of cash expenses in a future period or amortization of a prepaid cash expense) that were deducted in computing net income (loss); (e) debt refinancing fees, premiums and penalties; (f) any net loss realized in connection with an asset sale that was deducted in computing net income (loss) and (g) all extraordinary, unusual or non-recurring items of gain or loss, or revenue or expense. The Company manages its assets on a total company basis, not by segment. Therefore, management does not review any asset information by segment and, accordingly, the Company does not report asset information by segment. Reportable segment information for the three months ended September 30, 2019 and 2018, is as follows (in millions):
Reportable segment information for the nine months ended September 30, 2019 and 2018, is as follows (in millions):
b. Geographic Information International sales accounted for less than 10% of consolidated sales in each of the three and nine months ended September 30, 2019 and 2018. Substantially all of the Company’s long-lived assets are domestically located. c. Product Information The Company offers specialty products primarily in categories consisting of lubricating oils, solvents, waxes, synthetic lubricants and other products. Fuel products categories primarily consist of gasoline, diesel, jet fuel, asphalt and other products. The following table sets forth the major product category sales for each of the Specialty products and Fuel products segments for the three months ended September 30, 2019 and 2018 (dollars in millions):
The following table sets forth the major product category sales for the nine months ended September 30, 2019 and 2018 (dollars in millions):
d. Major Customers During the three and nine months ended September 30, 2019 and 2018, the Company had no customer that represented 10% or greater of consolidated sales. e. Major Suppliers During the three months ended September 30, 2019 and 2018, the Company had two suppliers that supplied approximately 67.5% and 56.5%, respectively, of its crude oil supply. During the nine months ended September 30, 2019 and 2018, the Company had two suppliers that supplied approximately 64.6% and 58.5%, respectively, of its crude oil supply. |
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables) |
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Sep. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities [Table Text Block] | Other current liabilities consisted of the following (in millions):
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Subsequent Events (Tables) |
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Subsequent Event [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Event, Pro Forma Business Combinations or Disposals [Text Block] | Major categories of assets and liabilities at their carrying values to be disposed of as of September 30, 2019 consist of the following (in millions).
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Fair Value, by Balance Sheet Grouping [Table Text Block] | The Company’s carrying and estimated fair value of the Company’s financial instruments, carried at adjusted historical cost were as follows (in millions):
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Inventories - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
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Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
Dec. 31, 2018 |
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Inventory Disclosure [Abstract] | |||||
Inventory method | last-in, first-out (“LIFO”) | ||||
Effect of LIFO Inventory Liquidation on Income | $ 0.0 | $ 0.0 | $ (0.9) | $ 0.0 | |
Replacement cost of inventories, based on current market values | (15.8) | (15.8) | $ (7.8) | ||
Lower of cost or market inventory adjustment | $ (2.7) | $ (3.0) | $ 38.8 | $ 12.0 |
Investment in Unconsolidated Affiliates - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||
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Sep. 30, 2019 |
Jun. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Nov. 21, 2017 |
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Schedule of Equity Method Investments [Line Items] | ||||||||
Investment in unconsolidated affiliates | $ 5.7 | $ 5.7 | $ 25.4 | |||||
Asset impairment | 3.2 | $ 0.0 | 31.1 | $ 0.0 | ||||
Proceeds from Sale of Biosyn | 5.0 | $ 9.9 | ||||||
Fluid Holding Corp | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Investment in unconsolidated affiliates | 5.7 | $ 9.3 | 5.7 | $ 25.4 | $ 25.4 | |||
Asset impairment | $ 3.6 | $ 16.1 | 19.7 | |||||
Equity interest percentage | 10.00% | |||||||
Biosyn Holdings, LLC | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Proceeds from Sale of Biosyn | $ 5.0 |
Derivatives Derivatives - Schedule of Derivative Positions (Diesel Crack Spread Swaps) (Details) - Diesel crack spread swaps - Not Designated as Hedging Instrument [Member] - Fuel Product [Member] |
Sep. 30, 2019
bbl
$ / bbl
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Dec. 31, 2018
bbl
$ / bbl
|
---|---|---|
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 258,500 | 1,825,000 |
Average Swap ($/Bbl) | $ / bbl | 22.78 | 25.58 |
First Quarter 2019 [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 450,000 | |
Barrels per Day Sold | 5,000 | |
Average Swap ($/Bbl) | $ / bbl | 25.58 | |
Second Quarter 2019 [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 455,000 | |
Barrels per Day Sold | 5,000 | |
Average Swap ($/Bbl) | $ / bbl | 25.58 | |
Third Quarter 2019 [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 460,000 | |
Barrels per Day Sold | 5,000 | |
Average Swap ($/Bbl) | $ / bbl | 25.58 | |
Fourth Quarter 2019 [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 62,000 | 460,000 |
Barrels per Day Sold | 674 | 5,000 |
Average Swap ($/Bbl) | $ / bbl | 22.18 | 25.58 |
First Quarter 2020 [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 136,500 | |
Barrels per Day Sold | 1,500 | |
Average Swap ($/Bbl) | $ / bbl | 22.91 | |
Second Quarter 2020 [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 60,000 | |
Barrels per Day Sold | 659 | |
Average Swap ($/Bbl) | $ / bbl | 23.10 |
Derivatives Derivatives - Schedule of Derivative Position (WCS Crude Oil Basis Swap Sales) (Details) - Fuel Product [Member] - Not Designated as Hedging Instrument [Member] |
Sep. 30, 2019
bbl
|
Dec. 31, 2018
bbl
$ / bbl
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WCS crude oil percentage basis swap sales [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 460,000 | 0 |
Fixed Percentage of NYMEX WTI (Average % of WTI/Bbl) | 66.16% | |
WCS Crude Oil Basis Swaps Sales [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 1,763,000 | |
Average Swap ($/Bbl) | $ / bbl | (19.84) | |
Midland crude oil basis swap purchases [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 0 | 1,275,000 |
Average Swap ($/Bbl) | $ / bbl | (12.27) | |
First Quarter 2019 [Member] | WCS Crude Oil Basis Swaps Sales [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 0 | 388,000 |
Barrels per Day Sold | 4,311 | |
Average Swap ($/Bbl) | $ / bbl | (19.84) | |
First Quarter 2019 [Member] | Midland crude oil basis swap purchases [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 501,500 | |
Barrels per Day Purchased | 5,572 | |
Average Swap ($/Bbl) | $ / bbl | (12.79) | |
Second Quarter 2019 [Member] | WCS Crude Oil Basis Swaps Sales [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 455,000 | |
Barrels per Day Sold | 5,000 | |
Average Swap ($/Bbl) | $ / bbl | (19.84) | |
Second Quarter 2019 [Member] | Midland crude oil basis swap purchases [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 773,500 | |
Barrels per Day Purchased | 8,500 | |
Average Swap ($/Bbl) | $ / bbl | (11.74) | |
Third Quarter 2019 [Member] | WCS Crude Oil Basis Swaps Sales [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 460,000 | |
Barrels per Day Sold | 5,000 | |
Average Swap ($/Bbl) | $ / bbl | (19.84) | |
Fourth Quarter 2019 [Member] | WCS crude oil percentage basis swap sales [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 460,000 | |
Barrels per Day Sold | 5,000 | |
Fixed Percentage of NYMEX WTI (Average % of WTI/Bbl) | 66.16% | |
Fourth Quarter 2019 [Member] | WCS Crude Oil Basis Swaps Sales [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 460,000 | |
Barrels per Day Sold | 5,000 | |
Average Swap ($/Bbl) | $ / bbl | (19.84) |
Revenue Recognition Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Table Text Block] | The following table reflects the disaggregation of revenue by major source (in millions):
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Revenue Recognition Shipping and Handling (Policies) |
9 Months Ended |
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Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Revenue from Contract with Customer [Policy Text Block] | The Company may incur incremental costs to obtain a sales contract, which under ASC 606 should be capitalized and amortized over the life of the contract. The Company has elected to apply the practical expedient in ASC 340-40-50-5 allowing the Company to expense these costs since the contracts are short-term in nature with a contract term of one year or less. The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. For each contract, the Company considers the promise to transfer products, each of which are distinct, to be the identified performance obligations. In determining the transaction price, the Company evaluates whether the price is subject to variable consideration such as product returns, rebates or other discounts to determine the net consideration to which the Company expects to be entitled. The Company transfers control and recognizes revenue upon shipment to the customer or, in certain cases, upon receipt by the customer in accordance with contractual terms. the Company collects and remits sales taxes associated with certain sales of its products to non-exempt customers. The Company excludes excise taxes and sales taxes that are collected from customers from the transaction price in its contracts with customers. Accordingly, revenue from contracts with customers is net of sales-based taxes that are collected from customers and remitted to taxing authorities. Revenues are recognized when control of the promised goods are transferred to the customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods promised within each contract and determines the performance obligations and assesses whether each promised good is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Under product sales contracts, the Company invoices customers for performance obligations that have been satisfied, at which point payment is unconditional. Accordingly, a product sales contract does not give rise to contract assets or liabilities under ASC 606. Shipping and handling costs are deemed to be fulfillment activities rather than a separate distinct performance obligation Revenue is recognized when obligations under the terms of a contract with a customer are satisfied; recognition generally occurs with the transfer of control at a point in time. The contract with the customer states the final terms of the sale, including the description, quantity and price of each product or service purchased. For fuel products, payment is typically due in full between 2 to 30 days of delivery or the start of the contract term, such that payment is typically collected 2 to 30 days subsequent to the satisfaction of performance obligations. For specialty products, payment is typically due in full between 30 to 90 days of delivery or the start of the contract term, such that payment is typically collected 30 to 90 days subsequent to the satisfaction of performance obligations. In the normal course of business, the Company does not accept product returns unless the item is defective as manufactured. The expected costs associated with a product assurance warranty continues to be recognized as expense when products are sold. The Company does not offer promised services that could be considered warranties that are sold separately or provide a service in addition to assurance that the related product complies with agreed upon specifications. The Company establishes provisions based on the methods described in ASC 606 for estimated returns and warranties as variable consideration when determining the transaction price. |
Leases (Notes) |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases of Lessee Disclosure [Text Block] | 14. Leases The Company has various operating and finance leases primarily for the use of land, storage tanks, railcars, equipment, precious metals and office facilities that have remaining lease terms of greater than one year to 15 years, some of which include options to extend the lease for up to 35 years, and some of which include options to terminate the lease within one year. Effective January 1, 2019, the Company adopted ASU 2016-02 using a modified retrospective transition approach that applied the new standard to all leases existing at the effective date of the standard with no restatement of prior periods. Given the adoption of ASU 2016-02, the Company’s operating leases have been included in operating lease right-of-use (“ROU”) assets, current portion of operating lease liabilities and long-term portion of operating lease liabilities in the condensed consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. The Company’s finance leases are included in property, plant and equipment, current portion of long-term debt and long-term debt, less current portion in the condensed consolidated balance sheets, which remains consistent with the Company’s presentation of its finance leases prior to the adoption of ASU 2016-02. The Company elected to apply the following practical expedients and policy elections provided by the standard at transition:
Supplemental balance sheet information related to the Company’s leases as of September 30, 2019, were as follows (in millions):
Lease expense for lease payments is recognized on a straight-line basis over the lease term. The components of lease expense related to the Company’s leases for the three and nine months ended September 30, 2019 were as follows (in millions).
As of September 30, 2019, the Company had estimated minimum commitments for the payment of rentals under leases which, at inception, had a noncancelable term of more than one year, as follows (in millions):
Weighted-Average Lease Term and Discount Rate The weighted-average remaining lease term and weighted-average discount rate for the Company’s operating and finance leases were as follows:
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Derivatives |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Derivatives The Company is exposed to price risks due to fluctuations in the price of crude oil, refined products (primarily in the Company’s fuel products segment), natural gas and precious metals. The Company uses various strategies to reduce its exposure to commodity price risk. The strategies to reduce the Company’s risk utilize both physical forward contracts and financially settled derivative instruments, such as swaps, collars, options and futures, to attempt to reduce the Company’s exposure with respect to:
The Company manages its exposure to commodity markets, credit, volumetric and liquidity risks to manage its costs and volatility of cash flows as conditions warrant or opportunities become available. These risks may be managed in a variety of ways that may include the use of derivative instruments. Derivative instruments may be used for the purpose of mitigating risks associated with an asset, liability and anticipated future transactions and the changes in fair value of the Company’s derivative instruments will affect its earnings and cash flows; however, such changes should be offset by price or rate changes related to the underlying commodity or financial transaction that is part of the risk management strategy. The Company does not speculate with derivative instruments or other contractual arrangements that are not associated with its business objectives. Speculation is defined as increasing the Company’s natural position above the maximum position of its physical assets or trading in commodities, currencies or other risk bearing assets that are not associated with the Company’s business activities and objectives. The Company’s positions are monitored routinely by a risk management committee to ensure compliance with its stated risk management policy and documented risk management strategies. All strategies are reviewed on an ongoing basis by the Company’s risk management committee, which will add, remove or revise strategies in anticipation of changes in market conditions and/or its risk profiles. Such changes in strategies are to position the Company in relation to its risk exposures in an attempt to capture market opportunities as they arise. The Company is obligated to repurchase crude oil and refined products from Macquarie at the termination of the Supply and Offtake Agreements in certain scenarios. The Company has determined that the redemption feature on the initially recognized liability related to the Supply and Offtake Agreements is an embedded derivative indexed to commodity prices. As such, the Company has accounted for these embedded derivatives at fair value with changes in the fair value, if any, recorded in gain (loss) on derivative instruments in the Company’s unaudited condensed consolidated statements of operations. The Company recognizes all derivative instruments at their fair values (see Note 11 - “Fair Value Measurements”) as either current assets or current liabilities in the condensed consolidated balance sheets. Fair value includes any premiums paid or received and unrealized gains and losses. Fair value does not include any amounts receivable from or payable to counterparties, or collateral provided to counterparties. Derivative asset and liability amounts with the same counterparty are netted against each other for financial reporting purposes in accordance with the provisions of our master netting arrangements. The following tables summarize the Company’s gross fair values of its derivative instruments, presenting the impact of offsetting derivative assets in the Company’s condensed consolidated balance sheets (in millions):
The following tables summarize the Company’s gross fair values of its derivative instruments, presenting the impact of offsetting derivative liabilities in the Company’s condensed consolidated balance sheets (in millions):
The Company is exposed to credit risk in the event of nonperformance by its counterparties on these derivative transactions. The Company does not expect nonperformance on any derivative instruments, however, no assurances can be provided. The Company’s credit exposure related to these derivative instruments is represented by the fair value of contracts reported as derivative assets. As of September 30, 2019, the Company had three counterparties in which the derivatives held were in net assets totaling $0.8 million. As of December 31, 2018, the Company had four counterparties in which the derivatives held were net assets. To manage credit risk, the Company selects and periodically reviews counterparties based on credit ratings. The Company primarily executes its derivative instruments with large financial institutions that have ratings of at least A3 and BBB+ by Moody’s and S&P, respectively. In the event of default, the Company would potentially be subject to losses on derivative instruments with mark-to-market gains. The Company requires collateral from its counterparties when the fair value of the derivatives exceeds agreed-upon thresholds in its master derivative contracts with these counterparties. No such collateral was held by the Company as of September 30, 2019 or December 31, 2018. Collateral received from counterparties is reported in other current liabilities, and collateral held by counterparties is reported in prepaid expenses and other current assets on the Company’s condensed consolidated balance sheets and is not netted against derivative assets or liabilities. Certain of the Company’s outstanding derivative instruments are subject to credit support agreements with the applicable counterparties which contain provisions setting certain credit thresholds above which the Company may be required to post agreed-upon collateral, such as cash or letters of credit, with the counterparty to the extent that the Company’s mark-to-market net liability, if any, on all outstanding derivatives exceeds the credit threshold amount per such credit support agreement. The majority of the credit support agreements covering the Company’s outstanding derivative instruments also contain a general provision stating that if the Company experiences a material adverse change in its business, in the reasonable discretion of the counterparty, the Company’s credit threshold could be lowered by such counterparty. The Company does not expect that it will experience a material adverse change in its business. Any outstanding collateral is released to the Company upon settlement of the related derivative instrument liability. As of September 30, 2019 and December 31, 2018, the Company had provided no collateral to its counterparties. The cash flow impact of the Company’s derivative activities is classified primarily as a change in derivative activity in the operating activities section in the unaudited condensed consolidated statements of cash flows. Derivative Instruments Not Designated as Hedges For derivative instruments not designated as hedges, the change in fair value of the asset or liability for the period is recorded to gain (loss) on derivative instruments in the unaudited condensed consolidated statements of operations. Upon the settlement of a derivative not designated as a hedge, the gain or loss at settlement is recorded to gain (loss) on derivative instruments in the unaudited condensed consolidated statements of operations. The Company has entered into gasoline swaps, diesel swaps and certain crude oil basis swaps that do not qualify as cash flow hedges for accounting purposes as they were not entered into simultaneously with a corresponding NYMEX WTI derivative contract. However, these instruments provide economic hedges of the purchases and sales of the Company’s crude oil, gasoline and diesel. The Company recorded the following gains (losses) in its unaudited condensed consolidated statements of operations, related to its derivative instruments not designated as hedges (in millions):
The Company recorded the following gains (losses) in its unaudited condensed consolidated statements of operations for the nine months ended September 30, 2019 and 2018, related to its derivative instruments not designated as hedges (in millions):
Derivative Positions WCS Crude Oil Basis Swap Contracts The Company has entered into crude oil basis swaps to mitigate the risk of future changes in pricing differentials between WCS and NYMEX WTI. At September 30, 2019, the Company had no derivatives related to either WCS crude oil basis purchases or sales in its fuel products segment, as all positions outstanding at December 31, 2018 were settled during 2019. At December 31, 2018, the Company had the following derivatives related to WCS crude oil basis purchases in its fuel products segment, none of which are designated as hedges:
At December 31, 2018, the Company had the following derivatives related to WCS crude oil basis sales in its fuel products segment, none of which are designated as hedges:
WCS Crude Oil Percentage Basis Swap Contracts The Company has entered into derivative instruments to secure a percentage differential of WCS crude oil to NYMEX WTI. At September 30, 2019, the Company had the following derivatives related to crude oil percentage basis swap purchases in its fuel products segment, none of which are designated as hedges:
At September 30, 2019, the Company had the following derivatives related to crude oil percentage basis swap sales in its fuel products segment, none of which are designated as hedges:
At December 31, 2018, the Company had the following derivatives related to crude oil percentage basis swap purchases in its fuel products segment, none of which are designated as hedges:
At December 31, 2018, the Company had no derivatives related to crude oil percentage basis swap sales in its fuel products segment. Midland Crude Oil Basis Swap Contracts The Company had no crude oil basis swaps to mitigate the risk of future changes in pricing differentials between WTI Midland and NYMEX WTI as of September 30, 2019. At December 31, 2018, the Company had the following derivatives related to Midland crude oil basis swaps in its fuel products segment, none of which are designated as hedges:
Diesel Crack Spread Swap Contracts At September 30, 2019, the Company had the following derivatives related to diesel crack spread sales in its fuel products segment, none of which are designated as hedges:
At December 31, 2018, the Company had the following derivatives related to diesel crack spread sales in its fuel products segment, none of which are designated as hedges:
Diesel Percentage Basis Crack Spread Swap Contracts The Company has entered into diesel crack spread derivative instruments to secure a fixed percentage of gross profit on diesel in excess of the floating value of NYMEX WTI crude oil. At September 30, 2019, the Company had the following derivatives related to diesel percent basis crack spread swap sales in its fuel products segment, none of which are designated as hedges:
At September 30, 2019, the Company had the following derivatives related to diesel percentage basis swap purchases in its fuel products segment, none of which are designated as hedges:
At December 31, 2018, the Company had the following derivatives related to diesel percent basis crack spread swap sales and no derivatives related to diesel percent basis crack spread swap purchases in its fuel products segment, none of which are designated as hedges:
Gasoline Crack Spread Swap Contracts At September 30, 2019, the Company had the following derivatives related to gasoline crack spread sales in its fuel products segment, none of which are designated as hedges:
At December 31, 2018, the Company had no derivatives related to gasoline crack spread sales in its fuel products segment. 2/1/1 Crack Spread Swap Contracts At September 30, 2019, the Company had the following derivatives related to 2/1/1 crack spread sales in its fuel products segment, none of which are designated as hedges:
At December 31, 2018, the Company had no derivatives related to 2/1/1 crack spread sales in its fuel products segment. |
Investment in Unconsolidated Affiliates |
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Investment in unconsolidated affiliates | Investment in Unconsolidated Affiliates The following table summarizes the Company’s investments in unconsolidated affiliates (in millions):
Fluid Holding Corp. In connection with the Anchor Transaction in November 2017, the Company received an equity investment in FHC as part of the total consideration for Anchor. FHC provides oilfield services and products to customers globally. The Company’s investment in FHC is a non-marketable equity security without a readily determinable fair value. The Company records this investment using a measurement alternative which values the security at cost less impairment, if any, plus or minus changes resulting from qualifying observable price changes with a same or similar security from the same issuer. During the three months ended June 30, 2019, the Company determined the fair value of its investment in FHC was less than its carrying value of $25.4 million after evaluating indicators of impairment and valuing the investment using projected future cash flows and other Level 3 inputs. Utilizing an income approach, value indications are developed by discounting expected cash flows to their present value at a rate of return that incorporates the risk-free rate for the use of funds, the expected rate of inflation and risks associated with the company. As a result, the Company recorded an impairment charge of $16.1 million in loss on impairment and disposal of assets in the unaudited condensed consolidated statements of operations for the three months ended June 30, 2019. During the three months ended September 30, 2019, the Company determined the fair value of its investment in FHC was less than its carrying value of $9.3 million as a result of a preferred stock issuance by FHC, which diluted the Company’s ownership percentage. As a result, the Company recorded an impairment charge of $3.6 million in loss on impairment and disposal of assets in the unaudited condensed consolidated statements of operations for the three months ended September 30, 2019 and a $19.7 million impairment charge for the nine months ended September 30, 2019. Biosyn Holdings, LLC and Biosynthetic Technologies In February 2018, the Company and The Heritage Group formed Biosyn Holdings, LLC (“Biosyn”) for the purpose of acquiring Biosynthetic Technologies, LLC (“Biosynthetic Technologies”), a startup company which developed an intellectual property portfolio for the manufacture of renewable-based and biodegradable esters. In March 2019, the Company sold its investment in Biosyn to The Heritage Group, a related party, for total proceeds of $5.0 million which was recorded in the “other” component of other income (expense) on the unaudited condensed consolidated statements of operations. Prior to the sale of Biosyn, the Company accounted for its ownership in Biosyn under the equity method of accounting. |
Inventories (Tables) |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Inventories | Inventories consist of the following (in millions):
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Long-Term Debt Quarterly Average Availability Percentage (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt Instrument Basis Spread [Table Text Block] | The margin can fluctuate quarterly based on the Company’s average availability for additional borrowings under the revolving credit facility in the preceding calendar quarter as follows:
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Condensed Consolidated Balance Sheets (Parenthetical) - Limited Partner - shares |
Sep. 30, 2019 |
Dec. 31, 2018 |
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Limited partners’ interest units issued (in shares) | 77,556,190 | 77,177,159 |
Limited Partners' Capital Account, Units Outstanding | 77,556,190 | 77,177,159 |
Segments and Related Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reportable Segment Information |
Reportable segment information for the nine months ended September 30, 2019 and 2018, is as follows (in millions):
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Schedule of Major Product Category Sales |
The following table sets forth the major product category sales for each of the Specialty products and Fuel products segments for the three months ended September 30, 2019 and 2018 (dollars in millions):
The following table sets forth the major product category sales for the nine months ended September 30, 2019 and 2018 (dollars in millions):
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Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Operating activities | ||
Net loss | $ (5.0) | $ (73.2) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Net loss from discontinued operations | 0.0 | 3.1 |
Depreciation and amortization | 82.6 | 88.8 |
Amortization of turnaround costs | 16.5 | 8.7 |
Non-cash interest expense | 4.9 | 6.1 |
(Gain) loss on debt extinguishment | (0.7) | 58.8 |
Unrealized (gain) loss on derivative instruments | 20.2 | (0.4) |
Equity based compensation | 4.9 | 2.8 |
Lower of cost or market inventory adjustment | (38.8) | (12.0) |
Loss on impairment and disposal of assets | 31.1 | 0.0 |
Operating lease expense | 57.1 | 0.0 |
Operating lease payments | (57.1) | 0.0 |
Other non-cash activities | (7.0) | (3.0) |
Changes in assets and liabilities: | ||
Accounts receivable | (49.8) | 29.0 |
Inventories | 29.6 | (34.4) |
Prepaid expenses and other current assets | 4.6 | (3.8) |
Derivative activity | (0.4) | (0.4) |
Turnaround costs | (16.8) | (11.1) |
Accounts payable | 61.7 | (32.5) |
Accrued interest payable | 10.8 | (7.0) |
Accrued salaries, wages and benefits | 2.6 | (4.5) |
Other taxes payable | 6.0 | 8.5 |
Other liabilities | (3.1) | (52.7) |
Increase (Decrease) in Obligation, Pension and Other Postretirement Benefits | 0.0 | (0.1) |
Net cash provided by (used in) operating activities | 153.9 | (29.3) |
Investing activities | ||
Additions to property, plant and equipment | (27.4) | (41.3) |
Investment in unconsolidated affiliate | 0.0 | (3.8) |
Proceeds from sale of unconsolidated affiliate | 5.0 | 9.9 |
Proceeds from sale of business, net | 0.0 | 44.8 |
Proceeds from sale of property, plant and equipment | 3.7 | 0.3 |
Net cash provided by discontinued investing activities | 5.0 | 3.6 |
Net cash provided by (used in) investing activities | (13.7) | 13.5 |
Net Cash Provided by (Used in) Financing Activities [Abstract] | ||
Proceeds from borrowings — revolving credit facility | 0.0 | 166.8 |
Repayments of borrowings — revolving credit facility | 0.0 | (166.9) |
Repayments of borrowings — senior notes | 137.3 | 400.0 |
Payments on finance lease obligations | (0.9) | (2.2) |
Proceeds from inventory financing agreements | 848.7 | 867.0 |
Payments on inventory financing agreements | (840.7) | (850.6) |
Proceeds from other financing obligations | 0.0 | 4.6 |
Payments on other financing obligations | (1.6) | (2.3) |
Payments on extinguishment of debt | 0.0 | 46.6 |
Debt issuance costs | 0.0 | (2.9) |
Contributions from Calumet GP, LLC | 0.1 | 0.1 |
Net cash used in financing activities | (131.7) | (433.0) |
Net increase (decrease) in cash and cash equivalents | 8.5 | (448.8) |
Cash and cash equivalents at beginning of period | 155.7 | 514.3 |
Cash and cash equivalents at end of period | 164.2 | 65.5 |
Cash and cash equivalents | 155.7 | 514.3 |
Supplemental disclosure of non-cash investing activities | ||
Non-cash property, plant and equipment additions | 12.3 | $ 1.1 |
Consolidated Entities [Member] | ||
Changes in assets and liabilities: | ||
Net cash provided by (used in) operating activities | 0.0 | |
Investing activities | ||
Additions to property, plant and equipment | 0.0 | |
Proceeds from sale of unconsolidated affiliate | 0.0 | |
Proceeds from sale of property, plant and equipment | 0.0 | |
Net cash provided by discontinued investing activities | 0.0 | |
Net cash provided by (used in) investing activities | 0.0 | |
Net Cash Provided by (Used in) Financing Activities [Abstract] | ||
Repayments of borrowings — senior notes | 0.0 | |
Payments on other financing obligations | 0.0 | |
Contributions from Calumet GP, LLC | 0.0 | |
Net cash used in financing activities | 0.0 | |
Net increase (decrease) in cash and cash equivalents | 0.0 | |
Cash and cash equivalents at beginning of period | 0.0 | |
Cash and cash equivalents at end of period | 0.0 | |
Cash and cash equivalents | $ 0.0 |
Derivatives - Summary of Gross Fair Values of Derivative Instruments, Presenting the Impact of Offsetting Derivative Assets (Details) - USD ($) $ in Millions |
Sep. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | $ 5.8 | $ 33.5 | |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | (5.0) | (13.7) | |
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.8 | 19.8 | |
Midland crude oil basis swap purchases [Member] | Not Designated as Hedging Instrument [Member] | Specialty Product [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | 0.0 | 1.0 | |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | 0.0 | ||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 1.0 | |
Midland crude oil basis swap purchases [Member] | Not Designated as Hedging Instrument [Member] | Fuel Product [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | 0.0 | 7.1 | |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 7.1 | |
Gasoline Crack Spread Swaps [Member] | Not Designated as Hedging Instrument [Member] | Fuel Product [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | 0.2 | 0.0 | |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | (0.1) | 0.0 | |
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.1 | 0.0 | |
WCS crude oil basis swaps | Not Designated as Hedging Instrument [Member] | Fuel Product [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | 0.0 | 16.5 | |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | 0.0 | (1.6) | |
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 14.9 | |
WCS crude oil percentage basis swap | Not Designated as Hedging Instrument [Member] | Fuel Product [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | 2.4 | 0.0 | |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | (2.4) | (6.1) | |
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | (6.1) | |
Diesel crack spread swaps | Not Designated as Hedging Instrument [Member] | Fuel Product [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | 0.2 | 7.4 | |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.2 | 7.4 | |
Diesel percentage basis crack spread swaps | Not Designated as Hedging Instrument [Member] | Fuel Product [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | 1.2 | 0.0 | |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | (1.0) | (6.0) | |
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.2 | (6.0) | |
2-1-1- Crack Spread Swap [Member] | Not Designated as Hedging Instrument [Member] | Fuel Product [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | 0.3 | 0.0 | |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | ||
Inventory Financing Obligations | Not Designated as Hedging Instrument [Member] | Fuel Product [Member] | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | 1.5 | 1.5 | |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | (1.5) | 0.0 | |
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 1.5 | |
Fair Value, Measurements, Recurring | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.8 | 19.8 | |
Fair Value, Measurements, Recurring | Midland crude oil basis swap purchases [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 8.1 | |
Fair Value, Measurements, Recurring | Gasoline Crack Spread Swaps [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | $ 0.1 | 0.0 | |
Fair Value, Measurements, Recurring | Inventory Financing Obligations | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | (1.5) | |
Fair Value, Measurements, Recurring | WCS crude oil basis swaps | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 14.9 | |
Fair Value, Measurements, Recurring | WCS crude oil percentage basis swap | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | (6.1) | |
Fair Value, Measurements, Recurring | Diesel crack spread swaps | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.2 | 7.4 | |
Fair Value, Measurements, Recurring | Diesel percentage basis crack spread swaps | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.2 | (6.0) | |
Fair Value, Measurements, Recurring | 2-1-1- Crack Spread Swap [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.3 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.8 | 19.8 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Midland crude oil basis swap purchases [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 8.1 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Gasoline Crack Spread Swaps [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.1 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Inventory Financing Obligations | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | (1.5) | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | WCS crude oil basis swaps | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 14.9 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | WCS crude oil percentage basis swap | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | (6.1) | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Diesel crack spread swaps | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.2 | 7.4 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Diesel percentage basis crack spread swaps | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.2 | (6.0) | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | 2-1-1- Crack Spread Swap [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.3 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 [Member] | Midland crude oil basis swap purchases [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 [Member] | Gasoline Crack Spread Swaps [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 [Member] | Inventory Financing Obligations | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 [Member] | WCS crude oil basis swaps | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 [Member] | WCS crude oil percentage basis swap | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 [Member] | Diesel crack spread swaps | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 [Member] | Diesel percentage basis crack spread swaps | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 [Member] | 2-1-1- Crack Spread Swap [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Midland crude oil basis swap purchases [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Gasoline Crack Spread Swaps [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | $ 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Inventory Financing Obligations | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | WCS crude oil basis swaps | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | WCS crude oil percentage basis swap | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Diesel crack spread swaps | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Diesel percentage basis crack spread swaps | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | 0.0 | 0.0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | 2-1-1- Crack Spread Swap [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Condensed Consolidated Balance Sheets | $ 0.0 | $ 0.0 |
Inventory Financing Agreement Inventory Financing Agreement - Narrative (Details) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
May 09, 2019 |
Sep. 30, 2019
USD ($)
|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
Jun. 19, 2017
D / bbl
|
Mar. 31, 2017
bbl / d
|
|
Oil and Gas, Delivery Commitment [Line Items] | ||||||||
Financing costs | $ 33.8 | $ 37.7 | $ 99.2 | $ 120.4 | ||||
Obligations under inventory financing agreements | 117.0 | 117.0 | $ 105.3 | |||||
Inventory Financing Obligations | ||||||||
Oil and Gas, Delivery Commitment [Line Items] | ||||||||
Barrels of crude oil per day provided by Macquarie (in barrels per day) | 60,000 | 30,000 | ||||||
Financing costs | 5.6 | $ 6.3 | $ 11.7 | $ 13.4 | ||||
Deferred payment arrangement, maximum percentage of eligible inventory | 90.00% | |||||||
Deferred payment arrangement, outstanding amount | 22.2 | $ 22.2 | $ 20.4 | |||||
Obligations under inventory financing agreements | 5.0 | 5.0 | ||||||
Inventory Financing Obligations | Macquarie | ||||||||
Oil and Gas, Delivery Commitment [Line Items] | ||||||||
Amount retained from initial inventory purchase to cover credit and liquidation risks | $ 9.7 | $ 9.7 | ||||||
London Interbank Offered Rate (LIBOR) | Inventory Financing Obligations | ||||||||
Oil and Gas, Delivery Commitment [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | |||||||
Great Falls | ||||||||
Oil and Gas, Delivery Commitment [Line Items] | ||||||||
Inventory Financing Agreement Extension | Jun. 30, 2023 | |||||||
shreveport [Member] | ||||||||
Oil and Gas, Delivery Commitment [Line Items] | ||||||||
Inventory Financing Agreement Extension | Jun. 30, 2023 |
Commitments and Contingencies Commitments and Contingencies - Narratives - Texstar (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Loss Contingencies [Line Items] | ||
TexStar Contract Period Term | 20 years | |
Gain (Loss) on Disposition of Assets | $ (31.1) | $ 0.0 |
TexStar Current Liability | 38.1 | |
Minimum [Member] | ||
Loss Contingencies [Line Items] | ||
TexStar Potential Payments | 0.0 | |
Maximum [Member] | ||
Loss Contingencies [Line Items] | ||
TexStar Potential Payments | 0.5 | |
TexStar [Member] | ||
Loss Contingencies [Line Items] | ||
Gain (Loss) on Disposition of Assets | $ (10.7) |
Fair Value Measurements - Summary of Recurring Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Millions |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Assets: | ||
Total derivative assets | $ (0.8) | $ (19.8) |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Total derivative assets | (0.8) | (19.8) |
Pension plan investments | 0.0 | 0.1 |
Assets, Fair Value Disclosure | 0.8 | 19.9 |
Derivative liabilities: | ||
Total derivative liabilities | 1.2 | 0.0 |
RINs Obligation | (14.4) | (15.8) |
Liability Awards | (6.8) | (2.7) |
Total recurring liabilities at fair value | (22.4) | (18.5) |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
Pension plan investments | 0.0 | 0.1 |
Assets, Fair Value Disclosure | 0.0 | 0.1 |
Derivative liabilities: | ||
Total derivative liabilities | 0.0 | 0.0 |
RINs Obligation | 0.0 | 0.0 |
Liability Awards | (6.8) | (2.7) |
Total recurring liabilities at fair value | (6.8) | (2.7) |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
Pension plan investments | 0.0 | 0.0 |
Assets, Fair Value Disclosure | 0.0 | 0.0 |
Derivative liabilities: | ||
Total derivative liabilities | 0.0 | 0.0 |
RINs Obligation | (14.4) | (15.8) |
Liability Awards | 0.0 | 0.0 |
Total recurring liabilities at fair value | (14.4) | (15.8) |
Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Total derivative assets | (0.8) | (19.8) |
Pension plan investments | 0.0 | 0.0 |
Assets, Fair Value Disclosure | 0.8 | 19.8 |
Derivative liabilities: | ||
Total derivative liabilities | 1.2 | 0.0 |
RINs Obligation | 0.0 | 0.0 |
Liability Awards | 0.0 | 0.0 |
Total recurring liabilities at fair value | (1.2) | 0.0 |
Inventory Financing Obligations | Fair Value, Measurements, Recurring | ||
Assets: | ||
Total derivative assets | 0.0 | 1.5 |
Inventory Financing Obligations | Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
Inventory Financing Obligations | Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
Inventory Financing Obligations | Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Total derivative assets | 0.0 | 1.5 |
Diesel crack spread swaps | Fair Value, Measurements, Recurring | ||
Assets: | ||
Total derivative assets | (0.2) | (7.4) |
Diesel crack spread swaps | Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
Diesel crack spread swaps | Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
Diesel crack spread swaps | Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Total derivative assets | (0.2) | (7.4) |
Diesel percentage basis crack spread swaps | Fair Value, Measurements, Recurring | ||
Assets: | ||
Total derivative assets | (0.2) | 6.0 |
Diesel percentage basis crack spread swaps | Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
Diesel percentage basis crack spread swaps | Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
Diesel percentage basis crack spread swaps | Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Total derivative assets | (0.2) | 6.0 |
WCS crude oil basis swaps | Fair Value, Measurements, Recurring | ||
Assets: | ||
Total derivative assets | 0.0 | (14.9) |
WCS crude oil basis swaps | Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
WCS crude oil basis swaps | Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
WCS crude oil basis swaps | Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Total derivative assets | 0.0 | (14.9) |
WCS crude oil percentage basis swap | Fair Value, Measurements, Recurring | ||
Assets: | ||
Total derivative assets | 0.0 | 6.1 |
WCS crude oil percentage basis swap | Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
WCS crude oil percentage basis swap | Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
WCS crude oil percentage basis swap | Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Total derivative assets | 0.0 | 6.1 |
Midland crude oil basis swap purchases [Member] | Fair Value, Measurements, Recurring | ||
Assets: | ||
Total derivative assets | 0.0 | (8.1) |
Midland crude oil basis swap purchases [Member] | Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
Midland crude oil basis swap purchases [Member] | Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
Midland crude oil basis swap purchases [Member] | Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Total derivative assets | 0.0 | (8.1) |
2-1-1- Crack Spread Swap [Member] | Fair Value, Measurements, Recurring | ||
Assets: | ||
Total derivative assets | (0.3) | 0.0 |
2-1-1- Crack Spread Swap [Member] | Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
2-1-1- Crack Spread Swap [Member] | Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Total derivative assets | 0.0 | 0.0 |
2-1-1- Crack Spread Swap [Member] | Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Total derivative assets | (0.3) | 0.0 |
Inventory Financing Obligations | Fair Value, Measurements, Recurring | ||
Derivative liabilities: | ||
Total derivative liabilities | 1.2 | 0.0 |
Inventory Financing Obligations | Fair Value, Measurements, Recurring | Level 1 | ||
Derivative liabilities: | ||
Total derivative liabilities | 0.0 | 0.0 |
Inventory Financing Obligations | Fair Value, Measurements, Recurring | Level 2 | ||
Derivative liabilities: | ||
Total derivative liabilities | 0.0 | 0.0 |
Inventory Financing Obligations | Fair Value, Measurements, Recurring | Level 3 | ||
Derivative liabilities: | ||
Total derivative liabilities | $ (1.2) | $ 0.0 |
Leases Leases - Maturity of Lease Liabilities (Details) $ in Millions |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 30, 2019
USD ($)
| ||||||
Leases [Abstract] | ||||||
2019 | $ 17.3 | [1] | ||||
2020 | 65.8 | [1] | ||||
2021 | 14.6 | [1] | ||||
2022 | 10.3 | [1] | ||||
2023 | 6.9 | [1] | ||||
Thereafter | 7.2 | [1] | ||||
Total Operating Lease Payments | 122.1 | [1] | ||||
Less: Interest | 10.9 | [1] | ||||
Present value of operating lease liabilities | $ 111.2 | [1] | ||||
Operating Lease Material Option to Extend | 0 | |||||
Operating Lease, Lease Not yet Commenced, Description | 0 | |||||
2019 | $ 0.1 | [2] | ||||
2020 | 0.5 | [2] | ||||
2021 | 0.5 | [2] | ||||
2022 | 0.5 | [2] | ||||
2023 | 0.5 | [2] | ||||
Thereafter | 1.6 | [2] | ||||
Total Finance Lease Payments | 3.7 | [2] | ||||
Less: Interest | 0.9 | [2] | ||||
Present value of Finance Lease Liability | $ 2.8 | [2] | ||||
Finance Lease Material Option to Extend | 0 | |||||
Finance Lease, Lease Not yet Commenced, Description | 0 | |||||
2019 | $ 17.4 | |||||
2020 | 66.3 | |||||
2021 | 15.1 | |||||
2022 | 10.8 | |||||
2023 | 7.4 | |||||
Thereafter | 8.8 | |||||
Total Lease Liability, Payments due | 125.8 | |||||
Less: Total Interest | 11.8 | |||||
Present Value of Total Lease Liability | $ 114.0 | |||||
|
Segments and Related Information - Schedule of Reportable Segment Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Segment Reporting Information [Line Items] | ||||
Sales | $ 929.6 | $ 2,677.8 | ||
Gain (loss) from unconsolidated affiliates | (3.8) | $ (3.7) | ||
Adjusted EBITDA | 73.5 | $ 54.5 | 250.8 | 210.2 |
Reconciling items to net loss: | ||||
Depreciation and amortization | 33.5 | 32.3 | 99.1 | 97.5 |
Gain on sale of unconsolidated affiliate | (1.2) | |||
Realized loss on derivatives, not reflected in net income (loss) | 0.7 | 2.8 | ||
Non-recurring charges | 1.3 | 1.3 | ||
Unrealized (gain) loss on derivatives | 5.4 | 2.4 | 20.2 | (0.4) |
Interest expense | 33.8 | 37.7 | 99.2 | 120.4 |
(Gain) loss on debt extinguishment | 0.0 | 0.0 | (0.7) | 58.8 |
Loss on impairment and disposal of assets | 3.2 | 0.0 | 31.1 | 0.0 |
Equity based compensation and other items | 0.4 | (3.0) | 6.1 | 0.2 |
Income tax expense from continuing operations | 0.5 | 0.4 | 0.7 | 1.0 |
Net loss from continuing operations | (4.6) | (16.0) | (5.0) | (70.1) |
External Customers [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 929.6 | 953.5 | 2,677.8 | 2,649.5 |
Intersegment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0.0 | 0.0 | 0.0 | 0.0 |
Operating Segments [Member] | Specialty Product [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 375.6 | 373.3 | 1,119.4 | 1,121.4 |
Gain (loss) from unconsolidated affiliates | (3.8) | 3.7 | ||
Adjusted EBITDA | 52.5 | 36.6 | 171.3 | 129.3 |
Reconciling items to net loss: | ||||
Depreciation and amortization | 12.9 | 12.1 | 36.6 | 37.5 |
Gain on sale of unconsolidated affiliate | (1.2) | |||
Realized loss on derivatives, not reflected in net income (loss) | 0.1 | 0.5 | ||
Operating Segments [Member] | Specialty Product [Member] | External Customers [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 355.8 | 349.2 | 1,052.4 | 1,053.6 |
Operating Segments [Member] | Specialty Product [Member] | Intersegment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 19.8 | 24.1 | 67.0 | 67.8 |
Operating Segments [Member] | Fuel Product [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 588.1 | 625.2 | 1,663.1 | 1,642.7 |
Gain (loss) from unconsolidated affiliates | 0.0 | 0.0 | ||
Adjusted EBITDA | 44.1 | 41.9 | 155.5 | 155.3 |
Reconciling items to net loss: | ||||
Depreciation and amortization | 18.6 | 18.1 | 56.8 | 53.4 |
Gain on sale of unconsolidated affiliate | 0.0 | |||
Realized loss on derivatives, not reflected in net income (loss) | 0.6 | 2.3 | ||
Operating Segments [Member] | Fuel Product [Member] | External Customers [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 573.8 | 604.3 | 1,625.4 | 1,595.9 |
Operating Segments [Member] | Fuel Product [Member] | Intersegment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 14.3 | 20.9 | 37.7 | 46.8 |
Operating Segments [Member] | Corporate Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0.0 | 0.0 | 0.0 | 0.0 |
Adjusted EBITDA | (23.1) | (24.0) | (76.0) | (74.4) |
Reconciling items to net loss: | ||||
Depreciation and amortization | 2.0 | 2.1 | 5.7 | 6.6 |
Gain on sale of unconsolidated affiliate | 0.0 | |||
Realized loss on derivatives, not reflected in net income (loss) | 0.0 | 0.0 | ||
Operating Segments [Member] | Corporate Segment [Member] | External Customers [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0.0 | 0.0 | 0.0 | 0.0 |
Operating Segments [Member] | Corporate Segment [Member] | Intersegment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0.0 | 0.0 | 0.0 | 0.0 |
Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | (34.1) | (45.0) | (104.7) | (114.6) |
Gain (loss) from unconsolidated affiliates | 0.0 | |||
Adjusted EBITDA | 0.0 | 0.0 | ||
Reconciling items to net loss: | ||||
Depreciation and amortization | 0.0 | 0.0 | 0.0 | |
Gain on sale of unconsolidated affiliate | ||||
Realized loss on derivatives, not reflected in net income (loss) | 0.0 | 0.0 | ||
Eliminations [Member] | External Customers [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0.0 | 0.0 | 0.0 | |
Eliminations [Member] | Intersegment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | (34.1) | (45.0) | (104.7) | (114.6) |
Oil and Gas, Refining and Marketing [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | $ 929.6 | $ 953.5 | $ 2,677.8 | $ 2,649.5 |
Derivatives Derivatives - Schedule of Derivative Positions (WCS Crude Oil Percent Basis Swap sales) (Details) - Not Designated as Hedging Instrument [Member] - Fuel Product [Member] - WCS crude oil percentage basis swap sales [Member] - bbl |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 460,000 | 0 |
Fixed Percentage of NYMEX WTI (Average % of WTI/Bbl) | 66.16% | |
Fourth Quarter 2019 [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 460,000 | |
Barrels per Day Sold | 5,000 | |
Fixed Percentage of NYMEX WTI (Average % of WTI/Bbl) | 66.16% |
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