Divestitures

On November 10, 2019, Calumet Refining, LLC, a Delaware limited liability company (“Calumet Refining”) and a wholly-owned subsidiary of the Company, completed the sale of all of the issued and outstanding membership interests in Calumet San Antonio Refining, LLC, a Delaware limited liability company (“Calumet San Antonio”), which owned a refinery located in San Antonio, Texas and associated net working capital, and related assets, including associated hydrocarbon inventories and a crude oil terminal and pipeline to Starlight Relativity Acquisition Company LLC, a Delaware limited liability company (“Starlight”) (the “San Antonio Transaction”). Total consideration received was $59.1 million, which consisted of a base sales price of $63.0 million minus an adjustment of $3.9 million for net working capital, inventories and reimbursement of certain transaction costs. In February 2020 the Company and Starlight agreed to the final purchase price adjustment payment related to net working capital and inventory to Starlight of $6.9 million, which has been reflected in the net loss recognized by the Company as of December 31, 2019. Additionally, in connection with the San Antonio Transaction, the Company, Calumet San Antonio, TexStar Midstream Logistics, L.P. (“TexStar”), TexStar Midstream Logistics Pipeline, LP and Tailwater Capital, LLC entered into a Settlement and Release Agreement (the “Settlement Agreement”), pursuant to which the Company agreed to pay TexStar and its affiliates a cash payment of $1.0 million and the parties mutually agreed to dismiss the litigation and release each other with respect to the legal dispute relating to the termination of the Throughput and Deficiency Agreement (the “Pipeline Agreement”). As a result of the Settlement Agreement, the Company included the $38.1 million liability related to the Pipeline Agreement in the loss on sale of business calculation for the San Antonio Transaction. The San Antonio refinery was included in the Company’s fuel products segment. The Company recognized a net loss of $8.7 million in Gain (loss) on sale of business, net in the consolidated statements of operations for the year ended December 31, 2019, related to the San Antonio Transaction.

In 2018, the Company entered into a long-term commitment to be utilized by Calumet San Antonio in the form of a throughput and deficiency agreement for future transportation of West Texas crude oil via third-party pipeline facilities that remained under construction as of December 31, 2019. The agreement was not included in the sale of Calumet San Antonio. The Company is pursuing alternatives in an effort to offset a significant amount of the costs expected under the agreement. However, there can be no assurance that the Company will be successful in realizing the alternatives to reduce the costs. Consequently, in connection with the completion of the sale of Calumet San Antonio, the Company recorded a liability of $21.1 million for the present value of the annual costs over the seven-year term of the agreement, of which $19.6 million is recorded in other long-term liabilities in the consolidated balance sheets as of December 31, 2019.

In conjunction with the sale, the Company considered other qualitative and quantitative factors and concluded the San Antonio Transaction did not represent a strategic shift in the business. However, the Company considered the San Antonio asset group to be an individually significant component of its operations.

The following table presents the net loss before income taxes for Calumet San Antonio for the periods presented (in millions):



	Year Ended December 31,
	2019			2018			2017
Sales	$	403.4		$	444.2		$	347.1
Gross profit	16.2			(4.5		)	(7.3		)
Net loss before income taxes	$	(3.9	)	$	(23.7	)	$	(168.7	)

On November 8, 2017, Calumet Refining completed the sale of all of the issued and outstanding membership interests in Calumet Superior, LLC, a Delaware limited liability company (“Superior”), which owned the Superior Refinery and associated net working capital, the Superior Refinery’s wholesale marketing business and related assets, including certain owned or leased product terminals, and certain crude gathering assets and pipeline space in North Dakota to Husky Superior Refining Holding Corp., a Delaware corporation (“Husky”) (the “Superior Transaction”). Total consideration received was $533.1 million, which consisted of a base price of $435.0 million and $98.1 million for net working capital and reimbursement of certain capital spending. The Superior Refinery was included in the Company’s fuel products segment. For the years ended December 31, 2018 and 2017, the Company recognized a net gain of $4.8 million and $236.0 million, respectively, in Gain (loss) on sale of business, net in the consolidated statements of operations related to the Superior Transaction.

In conjunction with the sale, the Company considered other qualitative and quantitative factors and concluded the Superior Transaction did not represent a strategic shift in the business. However, the Company considered Superior to be an individually significant component of its operations. The following table presents the net income before income taxes for Superior for the periods presented (in millions):



	Year Ended December 31,
	2019		2018		2017
Sales	$	—	$	—	$	669.1
Gross profit	—		—		110.0
Net income before income taxes	$	—	$	—	$	99.3