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Calumet Specialty Products Partners, L.P. Reports Second Quarter 2009 Results.

Article Excerpt
INDIANAPOLIS, Aug. 5 /PRNewswire-FirstCall/ -- Calumet Specialty Products Partners, L.P. (the "Partnership" or "Calumet") reported a net loss for the quarter ended June 30, 2009 of $26.0 million compared to net income of $41.8 million for the quarter ended June 30, 2008. For the six months ended June 30, 2009, net income was $49.7 million compared to net income of $38.4 million for the six months ended June 30, 2008.

Earnings before interest expense, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA (as defined by the Partnership's credit agreements) were $(1.9) million and $26.6 million, respectively, for the quarter ended June 30, 2009 as compared to $65.5 million and $48.0 million, respectively, for the second quarter of 2008. Distributable Cash Flow for the quarter ended June 30, 2009 was $14.3 million as compared to $36.9 million for second quarter of 2008. The $21.3 million decrease in Adjusted EBITDA quarter over quarter is primarily due to a reduction in gross profit in our fuels segment, further discussed below. (See the section of this release titled "Non-GAAP Financial Measures" and the attached tables for discussion of EBITDA, Adjusted EBITDA, Distributable Cash Flow and other non-generally accepted accounting principles ("non-GAAP") financial measures, definitions of measures and reconciliations of such measures to the comparable GAAP measures.)

The decrease in net income of $67.8 million from the second quarter of 2008 was primarily due to a decrease in gross profit of $42.5 million and increased non-cash derivative losses of $31.0 million. Gross profit (loss) by segment is as follows:

For the Three For the Six Months Ended Months Ended June 30, June 30, ------------- ------------ 2009 2008 2009 2008 ---- ---- ---- ---- (Dollars in millions) Gross profit (loss) by segment: Specialty products $20.7 $21.5 $80.5 $43.8 Fuel products (2.3) 39.4 16.8 51.9 ----- ----- ----- ----- Total gross profit $18.4 $60.9 $97.3 $95.7 ===== ===== ===== =====

Specialty products segment gross profit quarter over quarter was primarily impacted by reduced LIFO inventory gains of $50.2 million resulting from the liquidation of lower cost inventory layers in 2008 as well as lower sales volumes in lubricating oils, solvents and waxes due to economic conditions impacting product demand. This reduction in specialty products segment gross profit was positively impacted by significant improvements in overall specialty product selling prices in relation to crude oil prices from the 2008 quarter. The decrease in our fuel products segment gross profit quarter over quarter was due primarily to lower overall fuel products crack spreads and reduced LIFO inventory gains of $10.0 million from the liquidation of lower cost inventory layers in 2008, partially offset by increased sales volume resulting from higher throughput rates at the Shreveport refinery and increased gains on derivatives of $9.7 million.

"The significant increase in crude oil prices and continued weakness in product demand resulted in a second quarter that was very challenging for all refiners, including Calumet. This has caused us to focus even more on placing specialty products in higher value applications and markets, developing additional specialty products, and controlling operating costs," said Bill Grube, Calumet's CEO and President.

Quarterly Distribution

On July 20, 2009, the Partnership declared a quarterly cash distribution of $0.45 per unit for the quarter ended June 30, 2009 on all outstanding units. The distribution will be paid on August 14, 2009 to unitholders of record as of the close of business on August 4, 2009.

Operations Summary

The following table sets forth unaudited information about our combined operations. Production volume differs from sales volume due to changes in inventory.

Three Months Six Months Ended June 30, Ended June 30, -------------- -------------- 2009 2008 2009 2008 ---- ---- ---- ---- Sales volume (bpd): Specialty products sales volume 26,033 30,110 25,315 31,099 Fuel products sales volume 32,769 30,264 31,309 28,791 ------ ------...

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