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Current CLMT Stock Info

Calumet Specialty Products Partners (ticker: CLMT) last week released its fourth quarter 2014 results. The independent refiner reported a net loss for the quarter ended December 31, 2014 of $63.5 million, or $(0.95) per diluted unit, compared to a net loss of $15.5 million, or $(0.27) per diluted unit, versus net income of $3.5 million, or $(0.17) per diluted unit, in 2013.

Excluding special items, CLMT reported adjusted net income of $65.5 million, or $0.86 per diluted unit, for Q4’14, versus an adjusted net loss of $20.1 million, or $(0.34) per diluted unit, for Q4’13. The company’s Q4’14 losses included six special items: a change related to a lower of cost or market inventory adjustment of $72.8 million; a $31.8 million loss related to the liquidation of last-in, first-out inventory layers; a $16.6 million gain on the early settlement  of select 2015 and 2016 crack spread derivatives contracts; $23.2 million of unrealized derivative losses; an $18.2 million gain on sales of Renewable Identification Numbers related to the CLMT’s retroactive exemption from compliance with the U.S. Renewable Fuels Standard at its Shreveport and San Antonio refineries for 2013; and a $36 million goodwill impairment charge related to the acquisition of two oilfield services companies, Anchor Drilling Fluids and Specialty Oilfield Solutions.

Calumet reported adjusted EBITDA of $76.4 million in Q4’14 and $305.9 million for full-year 2014, versus adjusted EBITDA of $53.2 million in Q4’13 and $241.5 million for full-year 2013. That represents a 44% increase from Q4’13 to Q4’14 and a 27% increase from full-year 2013 to full-year 2014.

Distributable Cash Flow (DCF) for Q4’14 was $38.2 million, compared to $10.6 million in the prior year period, a 360% increase. Full-year 2014 DCF was $142.9 million, compared to $18.5 million in 2013, a 772% increase year over year.

A note released by Wells Fargo Securities said, despite Q4’14 results and near-term outlook updates being a “mixed bag,” that “CLMT has begun to turn the corner with the distribution coverage improving to 1.0x during H2’14 after several disappoint quarters. We expect the distribution will continue to improve based on organic growth via project start-ups plus a lift from recent acquisitions.”

Based on data compiled by EnerCom Inc. of 69 MLPs, Calumet’s most recent dividend yield ratio of 9.8% is above the group average of 6.4%. The company’s TTM total return of 22.9% and FCF/unit of $0.33 are both above of the group average of 6.4% and $(0.05), respectively.

Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication.

Analyst Commentary

Roger D. Read and Lauren Hendrix, Wells Fargo Securities. 03.02.2015
We continue to be favorably disposed towards CLMT as the
company remains on track to generate over 1.0x distribution coverage in 2016.
The Q4 2014 results and near-term outlook update were a mixed bag. Q4 2014
delivered better than expected DCF generation and the outlook for fuel and
specialty margins are clearly higher for H1 2015. Unfortunately, higher capex to
complete two of the four organic growth projects (Dakota Prairie Refinery and
Missouri Esters), reduced expectations for the recently acquired oil services
businesses and a delayed start of Dakota Prairie facility lead us to lower operating
earnings. Also higher interest costs in the near-term will restrain DCF in 2015.
We are adjusting our DCF/unit estimates to $2.21/$3.56 from $2.75/$3.98. Our
rating remains Outperform and our valuation range remains $31-35.  


Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.