CLMT - Earnings call transcript Q3 2018 | Calumet Specialty Products Partners, L.P.

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Operator

Good day, ladies and gentlemen. And welcome to the Third Quarter 2018 Calumet Specialty Products Partners L.P. Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session and instructions will follow at that time [Operator Instructions].

conference this reminder, a maybe recorded. As like today’s conference would to turn for host your introduce Mr. to I Joe Caminiti with Investor Relations. Sir, please go ahead.

Joe Caminiti

Thank thank Growth. you and Bruce our morning, Tim Go, everyone. us call EVP Griffin, on Good results for CFO; West us earnings third you, today quarter of are With today’s Fleming, CEO; for Michelle. joining call. And Strategy and

currently of call, statements remind based to proceed, that our during Such meaning this allow within in assumption of available as forward-looking various me XXXX. everyone as by XXE management, Securities we we on them. the provide each them, Before course may of information of of Exchange and Section the based the case, made well the Act beliefs are statements on

in will believes was statements the refer latest this our and be filings partner nor to management that to may could forward-looking neither from well partnership, assurance reflected any prove release partnership’s them our expectations list made a provide press statements expectations these actual that with its such as factors affect the of our cause our these issued to management general that reasonable are Please Although, correct. could Commission for Securities results Exchange differ the call. and as forward-looking on this morning, that

call, presentation you As conference a in will indicated that slides the the press now accompany earlier a made release of today. may today’s as reminder, PDF we the remarks on download issued

this Go. With within also X Alpha available can may contact of replay IR calumetspecialty.com. call at Relations a Relations for the will to section Tim? access pass the Web be the to as Slide of at few these Tim turn support please Group site Also, hours and that, Investor I a the Investor our You you site XXX-XXX-XXXX. webcast on in slides call

Tim Go

Joe. you Good joining for thank Thanks, and us. morning, everyone

three, to primarily our we our fuels, of string chart has generated our The the EBITDA end, as planned in and across a the and downtime million row quarterly impacted for of the downtime which EBITDA. see heaviest specialty can improved due you sales activity quarters plan recent on decreased adjusted June production negatively As for seven slide completed bottom across volume facilities in year-over-year EBITDA both of quarter. Calumet portion of our most total the $XX.X growth XXXX. turnaround

hedging million Excluding $XX.X the year one were ago such pro realized results benefited the the year-over-year, Company planned At losses, than more from LCM quarter spreads our with results expenses associated third items declining special million. were offset of adjusted compared but impacts adjustment, crack the level, $XX crude as EBITDA ERP and downtime. by and to our forma differentials widening results

days hydrofiner net $X.XX roughly days the financial at of our of facility and loss GAAP basis, the XX paraffinic our our should unit. had provision $XX false On Princeton It continuing unrealized refinery non-cash from that fuels per agreement. be base and maintenance this or on common included associated operations [Alki] from million, net loss the was noted a unit inventory oil and loss loops the Our great unit. with have maintenance roughly XX cat mark-to-market

net this unit common loss or been $.X.XX. per and previously special of mentioned the items, a million loss Excluding net would $X.X have

quarter an overall I capture in will able our Our self we the to additional and EBITDA, help call. program business continues third cover the $XX.X which million in were performance later during to improve

transformation significant has had program on inception, efforts. underpinning impact meaningful its our help business profitability making a and since self larger contributions our Our for our

four cover going end in of will adjusted quarter. X call. later our XXXX, details which EBITDA scope, third program, original Now, last compared year’s to Slide this launching we’re of to that beginning Phase I bridge an we be self provides on the are this near help

year’s million help fuel The for specialty both results with volumes our to business our divestitures. $XX.X our biggest of captured turnaround Together, roughly benefits asset volumes loss contribution accounted lower due lower $Xmillion that previous segments. profit. reductions during results mix associated contributions quarter were and headwinds our biggest in were margins The by with effects, activity self of in to our downtimes from First, million third from quarter improved the SG&A the associated in $XX specialty greater year-over-year $XX.X the included in our last $XX.X program. million resulted and million

to arising as unfavorable the price $XX.X market cost self and inventory heavy program face benefits and margins of business captured improvements the call in I’ll and an the offset were the help swing turn by than lower story more effectively a crude there West. from of the up maintenance. to that, specialty This the the environment by in LCM our With over to volumes Additionally, adjustment. million tells our was quarter our our

West Griffin

shows of our X products' adjusted $XX Slide Tim. in sequentially to quarter. million of million that compared million year’s $XX.X seasonally and our EBITDA last versus down second down Thanks, was $XX specialty results stronger

adjusted As by were Princeton negatively impacted specialty mentioned, at downtime EBITDA lower hydrofiner. lube to planned results Tim volumes our due

ago This normal headwinds prices, of quarter. to WTI the given products Additionally, the in price temporary lower lubricants barrel, prices. compared was turnaround. paraffinic product mix drove resulted market our margins. markets the a of quality we oil lower the quarter. more with and end to of and year-over-year performance of volumes of $XX.XX our continues contributor increase primarily second a higher the price oversupply segment solid but business a as paraffinic combined we as than profit was to down raised lubricants quarter, be base XX% oversupply oversupply $XX.XX from the Quarter-over-quarter, the per year the of the had have aforementioned finished market driven towards sequentially in was spread the to barrel margin LOS decrease our $X.XX of $XX.XX This the higher weaker in since prices period crude squeeze per higher roughly in in but Gross increased function

the XX.X% the down in to increases impacting compared period year quarter, of the profit, in XX.X% XX% Our quarter. adjusted decreased to our as the margin capture and offset was for gross margin than the sequential negatively EBITDA more volumes ago

We segment adjust year. continued underlying pricing the to to the prior X compensate higher compared the costs. for Slide specialty material to of conceptualizes our raw components results

$XXX.X first in and as months quarter of as and we unplanned our at or million volumes maintenance adjusted million than we While turnarounds largely quarter. EBITDA year, the planned have at trailing quarters, the of last in Shreveport is the downtime well XX because to activity third lower is this due the $XXX.X the event specialties second facilities lower had

a be have year, $XX for activity months. said million heavier We turnaround that XX nearly always in loss EBITDA accounted last XXXX and this over would the

products improve are to the health in You’ll in actions than additional EBITDA $XX.X period combined contributed specialty mix taken to negative from strategic our benefits continued the offsetting our prior self year prices. compared steadily rising million margins crude of more there also see with program have an impact the

through portion believe be turnaround we heaviest business have over years remains business Our core taken demonstrably and past will specialty we of get to the few our cycle. the the the we visible strengthen actions more solid once

plus view disposition business We continue to $XXX for specialties long-term roughly the million business growth. as

stable predictable has increase since that trailing period. months a price steady adjustments the quarterly despite our of on see primarily has catch magnitude on see placed XX can specialty you price Slide And third EBITDA pressure overall in and been that adjusted of crude is margins are X, the the downward on In margin our over continuing our you mode. particular, XXXX. driven of quarter in longer-term direction up as are the crude given price As by movements and fairly fluctuations the

Given expect stabilize climb our sustainable pricing, self XX%. approach and to to the XX% our will long-term profile start decline, prices commitment and back crude help margin we range to even to as proactive

to our segment performance eight. on Moving fuel slide

$XX.X year were last activity to the which year $XX.X results that lower turnaround the driven EBITDA, Harvey. compared Great pro adjusted of boosted period. in year-over-year due slightly The results crack to million down business well Hurricane produce see as at in effect as spreads, You by ago the decline forma of Falls, of were million our

per was $X.XX, sequentially Our quarter last of year. this compared year’s down results to XX.X% of profit and of to down the second gross barrel in $X.XX compared $X.XX

year. This While relative benchmark widening our the in impacted WTI more margins, positively favorable were differentials Course Golf spread which by differentials period. more crude crack somewhat in meaningfully decreased fuels as was crude spread, the reduced to than Midland our the WTI last WCS, they widened for ago differentials average a decline year crack offset XX.X% versus mitigated XXX by

our a spending down range capital the to quarter. use to between During million, of day, efficiency capital expected XX,XXX the our XX,XXX total to crudes process San from The million our up guidance processing upon million. currently price to million lesser $XX of and at Based our fourth XXXX for million per which at second Slide guidance shows originally and the quarter, projections are capital we year-to-date. year quarter, the lower Antonio, detail increased roughly per barrels Midland extent our we $XX.X capital day spending, is in X, barrels from Shreveport On we are full for of loaded $XX lowering $XX frontend the stewardship. $XX

are execution. improved related XX% has of maintenance cut focused in environmental not and growth. EHS on capital projects, have Year-to-date, been health turnaround The We safety our outlays rather or roughly remaining XX% efforts. but

growth at to allocate our WCS focus active place, disciplined remain spend to have last on in Slide to XX, will the and develop Similar On as provided we we provide actively on that We hedges as capital, the of in paybacks quarter, how hedges a well available quick have our our reducing continue snapshot end Midland the and debt. WTI. diesel quarter. we continue opportunities have of as we hedges we

capture market also As hedging our to activity while our differentials, flows fuels business. purpose volatility reducing our of always, overall within cash is to the attractive the

the our hedging to fluctuate. will We continue and prices activity progresses commodity year as evaluate

Tim some credit and on will we balance on call which highlight Before sheet to turning the briefly back XX. remarks, I for Slide closing our metrics, speak

As basis, of assets amount from our our true forma was in up quarter as our primarily out activity on the but you the versus through numbers. large quarter. higher pro function reported leverage, mostly of been the trended since rolling secular On This on know, year. divested help to our reducing quarter leverage leverage previously has priority bases an a remains this turnaround financial primary downtrends generates EBITDA due ticked largely self of of third program, XXXX, our while a our last

see to progress reducing remain firmly sustainable reducing quarters. leverage to We show self program. in significant levels, in made and we to almost We expect our more have committed help leverage coming and our continuous our the through leverage our metrics improvement continued long-term

liquidity by continues liquidity show improvement quarter. partnership increased the second $XX Our million to the the as available to versus

of with from negative With we developments initiating call and turn recently corporate positive our Calumet with remarks. I for us Moody's upgrading Additionally, B ratings S&P to minus, regarding credit back of a removing Fitch our final ratings single number rating will to B the minus the outlook. that, received Tim

Tim Go

since the XX Slide our ago. program nearly its inception three outlines of results years self health

of you million. can stated program to the bring nearly $XXX $XX the see, As to contributions quarter’s $XXX $XXX total million goal to-date this of versus us million original million

benefits quarter’s primary three The by third initiatives. were driven

refineries, Valley, individual $X several Cotton Shreveport, Louisiana of new one consolidating and our our of million contract. over procurement three and Princeton purchasing larger savings scale into agreements from First,

Antonio project contributions year. from the Second, that at the started our of And Great up the finished St. project and continued lubricants Falls this third, at isomeric earlier benefits project. continued expansion Naphtha

had help X contribution has and program success launching multiyear are Phase program positive outlined Slide the profitability, this XX. Given to self the on this we our of

this There business a numerous created the I’ll presented enhance over years, We to goal, This of been as strategic their three of highlight that initiatives deliver additional board. our to support in biggest our XXXX. quarter are beginning built EBITDA an million newly few but are profitability first units setting contributors. in each plans to up bottoms a program $XXX has goal next the

upgrading mix we opportunities; chain and system at the projects, biosynthetic material intermediate the of focused ERP and product chain For higher-margin should lubricants in which our development flexibility our product finished margins and and the capabilities our commercialization products, system. Versagel ERP SG&A supply and through fuels supply Great efficiencies; projects increased in new new including Shreveport; efficiencies, and new of by raw enabled new debottleneck material by lower product feedstock example, Princeton, well estimates; Falls, finished opportunities and and waxes, for Antonio helping reduced Shreveport such oils solvents, both transportation gas is the our aviation supported improved in oils us new utilization; reliability specialty as the improve transportation identifying technologies projects, our at San naphtha as and rationalize as skews; upgrade introduction improvements on margin and as renewable

worked our our million leaders and hard on year-end ability Our of of the in this teams very phase and by $XXX their foundation program, confident XXXX. new profitability we remain deliver two goal to building

with Let’s our talking days planned through pricing extent we are as we specialty, said, quarter that a tends anticipate our quarter business, outlook we trends by minor quarter our expect recognizing XX. fourth Combined turnaround, through expect maintenance within conclude solid be by seasonality made consistent. quarter, and That adjustments fourth Slide which our have Princeton the weakest perspective, on usually to fourth our quarter after improvement will from a those lowest we for Shreveport. remain to a volumes specialties be we in the that is year. offset XX the at to of should The

seasonal we capturing EBITDA including the of and we facilities, focused crude as we high but more higher amounts remain of quarter our structural patterns on our additional Our cost out crude, and initial cost close should see three business WCS program, margin Further, continue advantage in self-help fuels savings running developed improvement. TI. expect to Midland final through typical

shipping. about we a well XXXX, are limits specifically and is the regulations vacuum demand, marine positioned expected benefit. to our been are and IMO believe to talk as Lastly, low we regulation there's and increase the oil, The sulfur lot of diesel new gas reduced sulfur from

our directly half We indirectly In portfolio, of from overall tied middle products roughly distillates. and or will diesel benefit to are our this. directly

market. and are base above solid market diesel averages. oils is the tied vacuum oil tied refinery market ULSD to yields the U.S. is Our The the to gas

beneficial feedstock Falls crude for sour XXXX On Canadian IMO. is be refinery should IMO side, heavy the our discounted from with Great

same that will in Finally, the high IMO. Great the to demand will discounted our is asphalt WCS high-quality very and of tied IMO, that by be post Falls is be in impacted price

typical is specialty asphalt, our applications. with did Princeton In addition and asphalt which not asphalt road complete

So making for and as our WCS-based products. you high yields can positioned refinery of ULSD XXXX, Falls will be high-quality especially XXX% producing see, crudes, IMO Great asphalt well running

Great over market the that, Q&A. cracks well the Michelle? With for $XX I the In Falls per for fact, to futures would the turn barrel. lines over diesel for in open like the is call to analysts operator and

Operator

Instructions] first comes the of [Operator Wells line from Read Roger with Our question Fargo.

Your ahead. now open. Please line is go

Roger Read

of myself to Just a the but to on hit thing try limit two. here, to ton I’ll

years. help about tremendous think obviously, over mean delivery here the you last self If Tim, program, couple of the I

of obvious XXX. expected about But you would which I goals curious feel to we what And now think maybe you accomplishment there next from? misses you and the I’m where you I $XXX and second of I -- You was for way? where less was the the the should out that. ERP or But to have that program, million it the would did original the achieved surprised get what coming exceeding target trying years were along just than go what makes new was or think couple disappointed and a imagine about you the back of come if easier $XXX. target you phase know

Tim Go

help And since our originally three XXXX. around our for in we knew the particular, have the I cost When one dropped SG&A over low some seen of costs there think example, of we some hanging significantly were years, phase structures. past rolled self you’ve program, fruits,

knew as plans. were also a our that savings. as we opportunities more the a past manage logistics we what I to through lot of procurement think plans those expected individual and entity, in We had savings consolidated we there And captured cost more along than

looking job but plant we products mentioned reliability phase. at and this that more year a a but are really I it been we’re coming first our starting insight a we’re the two that focused and captured rationalizing on our business know certainly self capacity was next I premium transition lot becomes that ERP having products are have where cost better think as utilization, on into to to that going of can and the and more as that ERP combination some our benefits a to a that focus been our It’s the focusing margin layer see and teams been lower and customers to analysis for now you be this a has There where phase of next system, and portfolio. our as there detail do really we've willing spare making products before. it’s data, last West trying help just for of pay and is think layer for officially we're plants. working and how in fill effort our next a system, the That really that this -- skews, now point integrate the into the in program. phase. getting a understanding year at is the some and opportunity, next The margin going of right But for, rough that out the where to mentioned, plant are mentioned, new higher optimize to understanding we has of and our better sales not finish still lubes for on products I focusing phase, are,

Roger. So for on going of we’re where two, more focused that’s here phase to

Roger Read

the mentioned sheet. improvement in you West, gears. shifting And balance the

I’d been on working the portion the cash side. has -- of year-to-date, you significant a capital improvement If look say,

consider reverses you then we maybe sustainable what that a for is So want given us. terms we in I should phase to guess pieces the on part, to against part, that of need looking should for sheet first where that you balance here the front? next second preamble of that improvement, change that as years. that of And look we different of debt due go What with a be coming in couple a maybe got

West Griffin

you. this for So take me let sequentially

you're In that. the right terms business, of in

that during working portion activity. XXX,XXX turnaround the year, quarter, the build largely build had first And inventory third to in that's in especially those some little inventory we in the some roughly of So quarter. we have over this capital, related had the third barrels

to so those a lot of our to down is get associated going that. we is with and worth from are. and look objective I to Our system at level release the right interest year, million of what what the million-ish $XX EBITDA then bills And CapEx, uses look is, business of expense, The a as business of lower the that’s cash $XXX do cash a I uses $XXX way worth at about roughly our a roughly are total our million $XXX million. cash now further plus

you anticipate how metric, at cash a that take for or terms in of and generate we some generate flows positive based and you upon terms So ebbs $XXX cash been in whatever EBITDA, capital. you gets much flow of us working roughly positive million take that flow at look We've have. give

-- forward, I things little a move bit of confused sometimes get would about we and As this. people one that the

sales changed our of Our Superior. the mix business of with has

builds sold roughly but modest and fairly it. significant We've so our have year. and inventory may asphalt time to the with And inventory about build Superior, is be we've that in business our going winter during inventory barrels asphalt, fairly We so build be associated reconfigured should XXX,XXX our had this historically, the so, season.

now. more we've think stable about I right to platform the business way think much got So that for is

inventory sold the and in the year. our course Now, the over after of terms fluctuations we've changes of the Superior in

which So XXXX on refinancing and that's question, markets our what forecast your me on at of potentially notes. to capital is the looking brings for the same second what's some -- side

million correct. XXXX. of in got notes due We've $XXX You’re

when So we've now and years bit X.X notes time those got mature a of or. between fair about

we market bites have of So like month. a and we over has the time to one do high-yield refinanced. in two just all we would do know, market, get The that Ideally, little the or the bit to bond ample backed last those as more and up apple.

the that And hurry monitor and but be anything market, timing about so market we’re to to closely continuing appears any we're for opportunities tap look right. to to in not this do until

Roger Read

appreciate the little that. I a noticed come No, yes, bonds I bit off here And recently.

So open at market yes, least? purchases an remains option, maybe

West Griffin

where It we we being could be. flow -- are focused are But right now, cash on positive. think is I

at on as indication we'll right purchases. But past, including are reducing we and as as at the stage, is We look in there concerned. our digitally that everything anything far We’ll focused anything said open now do no debt. market this that's

Operator

Sneeden from of Thank comes our you. of Guggenheim. And next question line the Sean

line Your go Please open. is ahead.

Sean Sneeden

in perspective, about from start in you I’m think of to some how have Tim, market planning But internal you about some you’ve guys guess when peers late you core slowdown the you sure And picture some How of chemical due -- a and I how if of seeing. impact and XXXX, of big valuations come moves some part thinking? has the and guess 'XX. your into could around -- that your thinking leaning are in I businesses. fears

Tim Go

tied and that more GDP. watch in and you can that is volatility We days, you to seen a of products see are overall specialty rising cycle. do is -- there there these the our interest around carefully, market more the stock rates think as GDP I concern what’s lot

like so do chemicals And we, companies, just that. the other watch of some we

gives XXXX I think really us guess we about that bit about remarks. think little prepared a IMO talked in things I to what our the some just is it's offsetting

think any that’s maybe offsets or some to microeconomic of type to any we we concerns. offsets type and As in going that coming XXXX see XXXX, provide

sulphur our we provide oil us the slowdown. in to to even market, starts think impacts, really that tailwinds we’ll As as will business, even solvent some with additional benefit particular. falls, business, our IMO gas rate economy market specialties oils certainly the with we base ULSD But low talked about tied really to vacuum our from tied fuels the

we how about that’s So Sean. it, think

Sean Sneeden

opportunity, organic know the is Is number think I target. guess, below How process? you when I you deal have the are -- initiatives, goal that or previously and mechanisms help an there that you you really thinking do goal? of use are X about that of emphasizing trying guys think in process with order times it get achieve other the about self guys do that to and combination can your been the ultimately to

Tim Go

depth So and improvements first there everything as to our self far self foremost of program. look and has a anything possible increase. as we everything, we terms help onetime at quarter, and program. quarter-over-quarter help the been incremental basis self options effects had methodology We’ve to quarter-over-quarter on the did first a it have would is -- our de-lever. this This the forma our But some in have EBITDA, we deleveraging help an pro been for generated while on absent

It process. good an its very little overall tremendous as results. capital and we about generated pretty feel that requires So

And so working it's for us.

the do is and our primary we look other our things, that but from things nature focus primary not possibility is said, help program. that of that focus, Now time-to-time self dispositions at of asset including

Sean Sneeden

flow? of generate QX? of And guess, such I capital one, program a amount you Is free 'XX. of guess some highlighted anticipate run then minimal with cash somewhat that then thinking inventory cash free some a destocking decent one but one, we source capital I cash the you in about plan there working that just is generation. last And to should maybe

Tim Go

to the right. our And the of targets we targets. we Sean, inventory focused to increase we here The lower get overall primarily our continue expect that's year. around quarter was at that third lower efforts in the turnarounds, capital to our the end working want saw not --

means that that drop. inventory should So

In as fact, typical towards West be part of October our longer mentioned, the the build here is into next end as drop no asphalt through year. year, And going to cycle. seen we've it of already our we head

hold As material. terminals we to of divested divest but asphalt and Superior, not used only several asphalt the we that did

going you’re to which continue optimize yes, us see our -- So lower. to working to generally continue means capital,

Operator

next line of with question Thank Cowen. Gabelman you. And the our from comes Jason

go Your line Please open. is now ahead.

Jason Gabelman

were active advantage a XXXX next another I your assets year to this year going to appropriately you just order of of active talking you maintenance benefits and If ask have have IMO maintenance in the positioned question, XXXX? IMO could year. of about to take to get Are

Tim Go

part We’ve as our of turnaround year. always talked being peak about XXXX

out talked hard also these cycle. so in think, in it year it as didn't four quite about us to year trying We turnarounds, ago spread one the I hit as did,

bit we've XXXX. so And done the in turnarounds pulled the We a that. little of

of We going pretty for be for that were push everything XXXX XXXX We've But everything rest picks fairly we’ll to about all-in-all, referencing. But other will up should that, year. that, would turnarounds should be and through say, XXXX. be as like But as in closer plans XXXX, turnaround, then next we’re of you and into XXXX at talk as light heavy than have other some fairly turnaround significant working those not to half second the I than in one is that. get that as units still the XXXX. the got will this much Shreveport that done year. That be

Jason Gabelman

million benchmark in good to is $XX about is think that and order So that that referenced, a go CapEx then for you forward on XXXX a basis?

Tim Go

given bit be will is, will what budget you little for the higher. next next out turnaround the would side will CapEx CapEx lower, the CapEx But of budget tell of haven’t that I guidance growth be a while quarter yet, year. for We we portion

give that but out and we’ll $XXX this started the guidance next million way about year we So at that’s quarter. $XX this to million probably guidance, point out I it would think

Jason Gabelman

you know whether is journey? talk on question corporate Can that you're for I structure, just If in been pointing on you where I at ask this the correct can structure Calumet annual at about just exploring, another fee time. guys have

Tim Go

at No, C we capital of to you of really corp, don’t spend right strong the possibility we time a a have structure reality driver. The looking is et any converting if cetera. the lot about now think

looking at time for perspective is next what issue years. over have, any next We a two to spend the few We of tax three the our see don’t tax lot from tax situation we years. a

So that various planning the shelter be any fully we raise looking generates think tax able that we equity. company through structures. all should to the then to we’re income also not And

a our of help primary GP the that’s focus we’re But has on control considering help management quarter-over-quarter it exact timing thing program, meantime, ultimately, program. MLP. self is because self decision, on is focused it's the our a finally the in And So anything, improvement. that an is

structure. deleveraging improving things In Those focusing flows, terms the as our reducing the would as right capital have of bigger on the of our bigger And and our independent And sheet balance self our cash and leverage, two help fry flow fish reducing fry to capital improving structure. say focusing the debt. cash on program, focusing is our works flows. well it’s on cash what I fish than the we is now

Operator

you. Goldman our question of Sachs. from Thank next And Mehta line the of Neil comes

line Your is go ahead. open. Please

Unidentified Analyst

Good morning. This is Karly on for Neil.

West, us views latest one talked just you leverage, a a target about on your refresh update struggle thanks the is views maybe First on around that? you you and Could there. the for any lot then what just taking at a other guess I consider and taking to potential you can that where at need talk see another And distribution? before look milestones you'd about the leverage look

West Griffin

times. had us of to leverage in past target has those ask know least say target. at want terms And that always is list X We in items. below get to what I’d the leverage always X down our that times Company Everyone a we the of two hot

We beyond reassessed haven’t really that. it

of the basis just the we're above If -- basis, little forma Superior that. company a we at a and Anchor, times effects X.X a the just pro excluding be pro little it'd on you look reported bit is in forma -- where bit about

wood that the So to we extent the care leverage, perspective, you get get down a anything to higher lower side is fairly -- for they fairly I peers cetera that lot times. of we'll below have distributions that simple And punished get of. straightforward. to look until actually reason investor chop four think respect you is an is And straight to have consider that and all our leverage substantially any with our on leverage. from et taken and the equity they don't if at

to we more we're we’re least we that to more four times, get And drive down peers. that we need comparable below to our peer down that so our to group. think our at leverage comparable So to want somewhat continue so

Unidentified Analyst

follow during And quarter. And those fourth turnaround We’ve then seen Great up guess Fall mentioned I the widen XQ. you at here out the on the substantially WCS. during differentials

of of back quarter. So it, asset And put a uplift? expected of is XX,XXX up WTI, numbers running changes call EBITDA spread the WCS entirety to the barrels then there for that could terms any are that around is WCS you the and be in of that day the to just in sensitivity wondering

Tim Go

to Great for out Falls Great at full turnaround continue levels anticipate been the for Falls has the fourth in through of the run the to rest expect these it of continue quarter XXXX, running in quarter. duration The was full to for we to-date, It the completed third we quarter. at the year. to and fact run And

far think continue any little a substantially change but be much going quarter. and there we come here differential to And strong to the we the obviously in the we takeaway terms XX will diff are as last of throughout a pipeline I through year, do think to to year, very in that's capacity see the differential that coming WCS next WTI. WCS, between do of As change tighter. last going pretty goes plus not diff going XXXX on balances is it will But don't fourth substantial to happy as -- in in balances. is think next

about with earlier or the So asphalt easily. occasions well think talked on is able Falls Great again, day to high that call. we as with positioned and be a very Falls greater of different on we discounted Great we fairly positioned XX,XXX ULSD crudes believe couple WCS well still XX% priced is yield placed a quality barrels of get we'll

bullish we’re asset. So, Great our on Falls

Operator

come to of from going is Gyure line with question the last Mike Janney. our And you. Thank

now go Your ahead. open. line is Please

Mike Gyure

go I year about XXXX? million you cost with of guys rest your and think for quarter, bit into the the you ERP what’s talk left had Can a about maybe little to expectation $X this system? of

West Griffin

question. great a That’s

the this getting $XX system. lower the and system is roughly a we’re We spend. what ERP stage almost spend down we’re with level at we’re at think level our in associated to much steady I XXXX ERP the on state of of spent to million

so is roughly years terms and see million we're find a is in go that’s opportunity put And also even to you’ll you over of just finding us on And working actually things or some the reality think, continuing I improve you in The can there the find systems system. we’re it we put if make is spend these will better. once one to place, you identified probably do already forward ERP of system, much what spend. always $XX overall next improvements it that associated more with we’ve do ERP I basis couple on that once the a year think -- what the thing place things, always you what certainly, that’s that in that make work there out next is to you system.

I pretty a level probably little a we’re more. drift lot of where further to whole down it bit from So, but will that reasonable it is think

Mike Gyure

or affiliated looks lastly from sale $XX proceeds million what you hit from of then leftover sell Is mostly of quarter? did maybe like this assets. guess the million, business $XX Anchor, that you I potentially about And

West Griffin

I think that’s a from little left over Superior.

Tim Go

EBITDA for actual all up, settle our on went sale type in to numbers. of true things. inventory the gain is it sale This adjusted up is and Superior Mike,

Operator

for for And remarks. further Q&A Mr. Thank any that conference. to turn I Tim conference today’s over session does you. And back would Go like conclude our the to

Tim Go

experience, like decades our would Specialty Company Dan Have us joining formally insights joining moment three Developing Thank continued be and Mr. Lubricants Calumet and for to Sheets the will appointed to for than today I instrumental the gained Dan Calumet's more world. you recently Directors. become that as development again Board to Chemicals a welcome a day. transition of Leading take he Petroleum Sheets great support. Products where our in spent Michelle. was Specialty and Premier Prior to Thanks, knowledge board, to Global to Businesses and for your continued and

Operator

participating for This a you and disconnect. Everyone may you all the day. in program have does gentlemen, great conference. and today’s conclude thank Ladies

Calumet Specialty Products Partners (CLMT) 9 Nov 182018 Q3 Earnings call transcript