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8-K/A - FORM 8-K AMENDMENT - Calumet Specialty Products Partners, L.P.d440820d8ka.htm
EX-99.1 - AUDITED FINANCIAL STATEMENTS OF MONTANA - Calumet Specialty Products Partners, L.P.d440820dex991.htm
EX-23.1 - CONSENT OF DELOITTE & TOUCHE LLP - Calumet Specialty Products Partners, L.P.d440820dex231.htm

Exhibit 99.2

CALUMET SPECIALTY PRODUCTS PARTNERS L.P.

MONTANA REFINING COMPANY, INC. ACQUISITION

Index of Financial Statements

Calumet Specialty Products Partners, L.P. unaudited pro forma consolidated financial statements:

 

Introduction

     2   

Unaudited pro forma consolidated balance sheet as of September 30, 2012

     3   

Unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2012

     4   

Unaudited pro forma consolidated statement of operations for the year ended December 31, 2011

     5   

Notes to unaudited pro forma consolidated financial statements

     6   

 

1


CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.

INTRODUCTION

Following are the unaudited pro forma consolidated financial statements of Calumet Specialty Products Partners, L.P. (“Calumet”) as of September 30, 2012 and for the year ended December 31, 2011 and for the nine months ended September 30, 2012. The unaudited pro forma consolidated financial statements give effect to the transactions as defined in Note 1 of the Notes to Unaudited Pro Forma Consolidated Financial Statements (the “Transactions”).

The unaudited pro forma consolidated financial statements and accompanying notes should be read together with Calumet’s related historical consolidated financial statements and notes thereto included on Form 10-K for the year ended December 31, 2011 and the Quarterly Report on Form 10-Q for the period ended September 30, 2012 as filed with the Securities and Exchange Commission and Montana’s historical financial statements and notes thereto. The unaudited pro forma consolidated balance sheet and the unaudited pro forma consolidated statements of operations were derived by adjusting the historical consolidated financial statements of Calumet and Montana. These adjustments are based on currently available information and certain estimates and assumptions and, therefore, the actual effects of the Transactions may differ from the effects reflected in the unaudited pro forma consolidated financial statements. However, management believes that the assumptions provide a reasonable basis for presenting the significant effects of the Transactions as contemplated and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited consolidated pro forma financial statements.

The unaudited pro forma consolidated financial statements are not necessarily indicative of the consolidated financial condition or results of operations of Calumet had the Transactions actually been completed at the beginning of the period or as of the date specified. Moreover, the unaudited pro forma consolidated financial statements do not project consolidated financial position or results of operations of Calumet for any future period or at any future date.

 

2


CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

(In thousands)

 

     As of September 30, 2012  
     Calumet
Historical
    Montana
Historical(r)
     Adjustments     Pro Forma  

Assets

         

Current assets:

         

Cash and cash equivalents

   $ 190,538      $ 17,228       $ (203,850 )  (a)    $ —     
          24,801    (b)   
          (28,717 (c)   

Accounts receivable:

         

Trade

     261,142        29,319         —          290,461   

Other

     2,999        6         —          3,005   
  

 

 

   

 

 

    

 

 

   

 

 

 
     264,141        29,325         —          293,466   

Inventories

     494,112        42,652         4,412   (d)      541,176   

Derivative assets

     —          —           —          —     

Prepaid expenses and other current assets

     10,315        25,580         —          35,895   

Deposits

     3,949        205         —          4,154   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total current assets

     963,055        114,990         (203,354     874,691   

Property, plant and equipment, net

     863,364        95,602         24,398   (e)      983,364   

Goodwill

     161,150        —           16,847    (f)      177,997   

Other intangible assets, net

     203,752        —           —          203,752   

Other noncurrent assets, net

     47,840        888         —          48,728   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total assets

   $ 2,239,161      $ 211,480       $ (162,109   $ 2,288,532   
  

 

 

   

 

 

    

 

 

   

 

 

 

Liabilities and Partners’ Capital

         

Current liabilities:

         

Accounts payable

   $ 336,034      $ 12,671       $ —        $ 348,705   

Accrued interest payable

     30,843        —           —          30,843   

Accrued salaries, wages and benefits

     19,507        1,193         —          20,700   

Taxes payable

     16,710        11,257         —          27,967   

Other current liabilities

     9,202        1,892         —          11,094   

Current portion of long-term debt

     783        —           —          783   

Derivative liabilities

     95,802        —           —          95,802   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total current liabilities

     508,881        27,013         —          535,894   

Pension and postretirement benefit obligations

     18,315        557         —          18,872   

Other long-term liabilities

     1,132        —           —          1,132   

Deferred long-term income taxes

     —          23,216         5,501    (g)      —     
          (28,717 )(j)   

Long-term debt, less current portion

     862,513        —          
24,801
  (b) 
    887,314   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total liabilities

     1,390,841        50,786         1,585        1,443,212   

Commitments and contingencies:

         

Partners’ capital:

         

Montana total shareholder’s equity

     —          160,694         (160,694 )  (h)      —     

Limited partners’ interest

     877,258        —           (2,940 ) (i)      874,318   
          (28,143 ) (c)   
          28,143    (j)   

General partner’s interest

     29,740        —           (60 ) (i)      29,680   
          (574 ) (c)   
          574    (j)   

Accumulated other comprehensive loss

     (58,678     —           —          (58,678
  

 

 

   

 

 

    

 

 

   

 

 

 

Total partners’ capital

     848,320        160,694         (163,694     845,320   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total liabilities and partners’ capital

   $ 2,239,161      $ 211,480       $ (162,109   $ 2,288,532   
  

 

 

   

 

 

    

 

 

   

 

 

 

See accompanying notes to unaudited pro forma consolidated financial statements.

 

3


CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(dollars and units in thousands except per unit data)

 

     Nine Months Ended September 30, 2012  
     Calumet
Historical
    Royal Purple
Historical
    Royal Purple
Adjustments
    Calumet
Pro Forma
    Montana
Historical(r)
    Montana
Adjustments
    Pro Forma  

Sales

   $ 3,436,400      $ 61,658      $ (1,483 )(p)    $ 3,496,575      $ 347,338      $ —        $ 3,843,913   

Cost of sales

     3,064,942        30,535        (938 )(p)      3,094,138        290,135        1,500 (o)      3,385,773   
         (401 )(n)         
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     371,458        31,123        (144     402,437        57,203        (1,500     458,140   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

              

Selling

     26,668        9,953        10,864 (l)      47,485        —          —          47,485   

General and administrative

     41,333        4,985          46,318        5,776        —          52,094   

Transportation

     80,903        —          —          80,903        6,029        —          86,932   

Taxes other than income taxes

     5,371        —          —          5,371        —          —          5,371   

Insurance recoveries

     —          —          —          —          —          —          —     

Other

     4,856        462        —          5,318        —          —          5,318   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     212,327        15,723        (11,008     217,042        45,398        (1,500     260,940   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense):

              

Interest expense

     (61,247     (108     (13,092 )(k)      (74,447     (5,128     (1,472 )(k)      (81,047

Debt extinguishment costs

     —          —          —          —          —          —          —     

Realized gain on derivative instruments

     20,486        —          —          20,486        —          —          20,486   

Unrealized gain (loss) on derivative instruments

     (11,337     —          —          (11,337     —          —          (11,337

Other

     382        5        —          387        150        —          537   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

     (51,716     (103     (13,092     (64,911     (4,978     (1,472     (71,361
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     160,611        15,620        (24,100     152,131        40,420        (2,972     189,579   

Income tax expense

     610        104        —          714        16,172        (16,172 )(q)      714   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 160,001      $ 15,516      $ (24,100   $ 151,417      $ 24,248      $ 13,200      $ 188,865   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allocation of Net Income:

              

Net income

   $ 160,001                $ 188,865   

General partner’s interest in net income

     3,200                  3,777   

General partner’s incentive distribution rights

     3,256                  3,256   

Nonvested share based payments

     947                  1,339   
  

 

 

             

 

 

 

Net income available to limited partners

   $ 152,598                $ 180,493   
  

 

 

             

 

 

 

Weighted average limited

              

partner units outstanding basic and diluted

              

Basic

     54,827                  57,718   

Diluted

     54,867                  57,758   

Limited partners’ interest basic and diluted net income per unit

   $ 2.78                $ 3.12   

Cash distribution declared per limited partner interest

   $ 1.68                $ 1.68   

See accompanying notes to unaudited pro forma consolidated financial statements.

 

4


CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(dollars and units in thousands except per unit data)

 

    Year Ended December 31, 2011  
    Calumet
Historical
    Debt
Refinancing
    Superior
Historical
    Superior
Adjustments
    Royal
Purple
Historical
    Royal
Purple
Adjustments
    Calumet
Pro Forma
    Montana
Historical(r)
    Montana
Adjustments
    Pro
Forma
 

Sales

  $ 3,134,923      $ —        $ 1,116,557        —        $ 109,504      $ (3,255 )(p)    $ 4,357,729      $ 446,799        —        $ 4,804,528   

Cost of sales

    2,860,793        —          1,016,398        2,252 (m)      55,340        (2,032 )(p)        401,898        2,000 (o)   
              (472 )(n)      3,932,279            4,336,177   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    274,130        —          100,159        (2,252     54,164        (751     425,450        44,901        (2,000     468,351   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

                   

Selling

    12,237        —          —          —          18,761        20,300 (l)      51,298        —          —          51,298   

General and administrative

    38,599        —          11,973        —          7,164        —          57,736        4,426        —          62,162   

Transportation

    94,187        —          —          —          —          —          94,187        12,474        —          106,661   

Taxes other than income taxes

    5,661        —          —          —          —          —          5,661        —          —          5,661   

Insurance Recoveries

    (8,698     —          —          —          —          —          (8,698     —          —          (8,698

Other

    6,852        —          —          —          980        —          7,832        —          —          7,832   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

    125,292        —          88,186        (2,252     27,259        (21,051     217,434        28,001        (2,000 )       243,435   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense):

                   

Interest expense

    (48,747     (6,000 )(k)      —          (17,000 )(k)      (184     (25,816 )(k)      (97,747     (8,633     (267 )(k)      (106,647

Debt extinguishment costs

    (15,130     —          —          —          —            (15,130     —          —          (15,130

Realized loss on derivative instruments

    (7,909     —          —          —          —          —          (7,909     —          —          (7,909

Unrealized gain (loss) on derivative instruments

    (10,383     —          —          —          —          —          (10,383     —          —          (10,383

Other

    842        —          651        —          16        —          1,509        (670     —          839   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

    (81,327     (6,000     651        (17,000     (168     (25,816     (129,660     (9,303     (267 )      (139,230
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    43,965        (6,000     88,837        (19,252     27,091        (46,867     87,774        18,698        (2,267     104,205   

Income tax expense

    929          31,981        (31,981 )(q)      162        —          1,091        10,297        (10,297 )(q)      1,091   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

  $ 43,036      $ (6,000   $ 56,856      $ 12,729      $ 26,929      $ (46,867   $ 86,683      $ 8,401      $ 8,030      $ 103,114   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allocation of Net Income:

                   

Net income

  $ 43,036                      $ 103,114   

General partner’s interest in net income

    861                        2,062   

General partner’s incentive distribution rights

    322                        322   
 

 

 

                   

 

 

 

Net income available to limited partners

  $ 41,853                      $ 100,730   
 

 

 

                   

 

 

 

Weighted average limited partner units outstanding basic and diluted

                   

Basic

    42,599                        57,672   

Diluted

    42,644                        57,717   

Limited partner’s interest basic and diluted net income per unit

  $ 0.98                      $ 1.75   

Cash distribution declared per limited partner interest

  $ 2.00                      $ 2.00   

See accompanying notes to unaudited pro forma consolidated financial statements.

 

5


CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

The historical financial information as of September 30, 2012 is derived from the historical unaudited consolidated financial statements of Calumet and Montana Refining Company, Inc. (“Montana”). The pro forma adjustments described below (collectively, the “Transactions”) have been prepared as if the Transactions described in these footnotes had taken place on September 30, 2012, in the case of the pro forma balance sheet or as of January 1, 2011, in the case of the pro forma statements of operations for the year ended December 31, 2011 and the nine months ended September 30, 2012.

Assumptions and estimates underlying the pro forma adjustments are described in the notes below, which should be read in conjunction with the pro forma financial statements. Since the pro forma financial statements have been prepared based upon preliminary estimates and assumptions, the final amounts recorded may differ materially from the information presented. These estimates and assumptions are subject to change pending further review of the assets to be acquired and liabilities to be assumed, and as additional information becomes available. The final purchase price allocation will be determined upon finalization of working capital and the final amounts recorded may differ materially from the information presented.

The unaudited pro forma consolidated balance sheet reflects the following Transactions:

 

   

the acquisition by Calumet of Montana on October 1, 2012 for total cash paid of $203.9 million, including expenses of $3.0 million; and

 

   

the payment of federal and state income taxes in order to convert Montana from a taxable corporation to a partnership.

The unaudited pro forma consolidated statement of operations reflects the following Transactions:

 

   

the acquisition by Calumet of Montana on October 1, 2012;

 

   

the acquisition of Royal Purple by Calumet on July 3, 2012;

 

   

the sale by Calumet of $275 million of 9 5/8% senior notes due 2020 on June 29, 2012;

 

   

the sale by Calumet of 6,000,000 common units to the public in its May 8, 2012 offering;

 

   

the acquisition of Superior by Calumet on September 30, 2011;

 

   

the sale by Calumet of 11,000,000 common units to the public in its September 8, 2011 offering and the related portion of the underwriter’s overallotment option of 750,000 common units on October 13, 2011;

 

   

the sale by Calumet of $200 million of 9 3/8% senior notes due 2019 on September 19, 2011;

 

   

the sale by Calumet of $400 million of 9 3/8% senior notes due 2019 on April 21, 2011 and related extinguishment of the senior secured first lien term loan;

 

   

the sale by Calumet of 4,500,000 common units to the public in its February 24, 2011 offering;

 

   

the payment of estimated underwriting commissions, offering expenses and acquisition expenses; and

 

   

the completion of the amended and restated senior secured revolving credit agreement entered into on June 24, 2011 by Calumet including changes in borrowings related to the Transactions.

 

6


CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

Note 2. Pro Forma Adjustments and Assumptions

(a) Reflects the estimated aggregate cash paid by Calumet of $203.9 million for the acquisition of Montana including acquisition expenses of $3.0 million.

(b) Reflects an increase of $24.8 million in borrowings under the amended and restated senior secured credit facility in order to fund a portion of the Montana acquisition and fund the payment of federal and state income taxes upon converting Montana from a taxable corporation to a partnership.

(c) Reflects adjustments to recognize the tax payment of $28.7 million to liquidate the Montana corporation as it was converted to a partnership.

(d) Reflects an adjustment to record Montana’s inventories at fair value. The preliminary estimated fair value of Montana’s inventories was $47.1 million at September 30, 2012 compared to a carrying value of $42.7 million resulting in a total increase to inventories of $4.4 million.

(e) Reflects an adjustment to record Montana’s property, plant and equipment at fair value. The preliminary estimated fair value of acquired property, plant and equipment was $120.0 million at September 30, 2012 compared to a carrying value of $95.6 million resulting in a total increase to property, plant and equipment of $24.4 million.

(f) Reflects the goodwill arising from the Montana acquisition. Goodwill was determined as follows (in millions):

 

Estimated Montana purchase price (excluding acquisition expenses)

   $ 200.9   

Cash acquired

     (17.2
  

 

 

 

Estimated Montana purchase price, net cash acquired

   $ 183.7   
  

 

 

 

Less:

  

Fair value of liabilities assumed

   $ (56.3

Fair value of identifiable assets acquired

     223.2   
  

 

 

 

Goodwill arising from the transaction

   $ 16.8   
  

 

 

 

(g) Reflects adjustment to record deferred tax liability at the date of acquisition. Montana was purchased as a corporation resulting in a difference between the revised asset basis and the historical tax basis of $72.9 million. Based on an effective tax rate of 39%, a deferred tax liability of $28.7 million was recorded.

(h) Reflects elimination of Montana’s historical total stockholder’s equity balance.

(i) Reflects an adjustment related to estimated Montana acquisition costs of $3.0 million.

(j) Reflects adjustments to remove the deferred tax liability recorded as of the acquisition date as a result of the conversion of Montana from a corporation to a partnership subsequent to the acquisition date.

(k) Reflects net change in interest expense as a result of (i) the sale by Calumet on April 21, 2011 of the 2019 Senior Notes and related extinguishment of the senior secured first lien term loan; (ii) completion of the amended and restated senior secured revolving credit facility on June 24, 2011 by Calumet; (iii) the sale by Calumet on September 12, 2011 of the 2019 Senior Notes and additional borrowings under the amended and restated senior secured revolving credit facility on September 30, 2011 to fund the Superior acquisition; (iv) the sale by Calumet on June 29, 2012 of the 2020 Senior Notes and repayment of borrowings under the amended and restated senior secured revolving credit facility in May 2012; and (v) additional borrowings under the amended and restated senior secured revolving credit facility to fund the acquisition of Montana and income tax payments as described in note (c) of the Notes to Unaudited Pro Forma Consolidated Financial Statements.

 

7


CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

The individual components of the net change in interest expense are as follows (in millions):

    

September 30,
2012

   

December 31,
2011

 

Interest expense as reported by Calumet

   $ 61.2      $ 48.7   

Interest expense as reported by Superior

     —          —     
  

 

 

   

 

 

 

Total historical interest expense

   $ 61.2      $ 48.7   
  

 

 

   

 

 

 

Removal of prior long-term debt interest expense due to extinguishment of senior secured first lien term loan

   $ —        $ (7.5

Pro forma interest expense associated with the 2019 Senior Notes sold on April 21, 2011

     —          11.7   
  

 

 

   

 

 

 

Adjustment to interest expense due to issuance of 2019 Senior Notes

   $ —        $ 4.2   
  

 

 

   

 

 

 

Removal of prior long-term debt interest expense from the senior secured revolving credit agreement

   $ —        $ (2.5

Pro forma interest expense under the amended and restated senior secured revolving credit facility

     —          4.3   
  

 

 

   

 

 

 

Adjustment to interest expense due to the amended and restated senior secured revolving credit facility

   $ —        $ 1.8   
  

 

 

   

 

 

 

Debt refinancing adjustment

   $ —        $ 6.0   
  

 

 

   

 

 

 

Pro forma interest expense associated with the 2019 Senior Notes sold on September 8, 2011

   $ —        $ 14.0   

Pro forma interest expense associated with additional borrowings under the amended and restated senior secured revolving credit facility

     —          3.0   
  

 

 

   

 

 

 

Adjustment to interest expense for debt issued related to Superior acquisition

   $ —        $ 17.0   
  

 

 

   

 

 

 

Interest expense as reported by Royal Purple

   $ 0.1      $ 0.2   
    

Removal of historical interest expense

     (0.1     (0.2

Adjustment to interest expense for reduction in revolving line of credit.

     (0.6     (1.5

Pro forma interest expense associated with the 2020 Senior Notes.

     13.8        27.5   
  

 

 

   

 

 

 

Adjustment to interest expense for debt issued related to Royal Purple acquisition

   $ 13.1      $ 25.8   
  

 

 

   

 

 

 

Total Calumet pro forma adjusted interest expense

   $ 74.4      $ 97.7   
  

 

 

   

 

 

 

Interest expense as reported by Montana Refining Company

   $ 5.1      $ 8.6   
    

Removal of historical interest expense

     (5.1     (8.6

Pro forma interest expense associated with additional borrowings under the amended and restated senior secured revolving credit facility

     6.6        8.9   
  

 

 

   

 

 

 

Adjustment to interest expense for debt related to Montana acquisition

   $ 1.5      $ 0.3   
  

 

 

   

 

 

 

Total Pro forma adjusted interest expense

   $ 81.0      $ 106.6   
  

 

 

   

 

 

 

(l) Reflects an adjustment to amortization resulting from recording Royal Purple’s intangible assets

(m) Reflects the adjustments to depreciation expense resulting from recording Superior’s fixed assets at their estimated fair value.

(n) Reflects the adjustments to depreciation expense resulting from recording Royal Purple’s fixed assets at their estimated fair value.

(o) Reflects the adjustments to depreciation expense resulting from recording Montana’s fixed assets at their estimated fair value.

(p) Reflects an adjustment to eliminate intercompany sales (and related cost of sales) from Calumet to Royal Purple.

(q) Reflects an adjustment to eliminate Montana and Superior’s income tax expense. Calumet, as a partnership, is generally not liable for income taxes on its earnings.

(r) Certain reclassifications have been made in the historical Montana financial statements to conform to Calumet’s financial statement presentation. These reclassifications have no impact on net income or partner’s capital.

 

8


CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

     September 30, 2012  
     As Reported     Reclassifications     Montana Historical  
     (In thousands, except share data)  

Assets

      

Current assets

      

Cash and cash equivalents

   $ 17,228      $ —        $ 17,228   

Accounts receivable, less allowance for doubtful accounts of $0

     29,325        (29,325     —     

Accounts receivable:

         —     

Trade

     —          29,319        29,319   

Other

     —          6        6   

Inventories

     42,652        —          42,652   

Other current assets

     25,785        (25,785     —     

Prepaid expenses and other current assets

     —          25,580        25,580   

Deposits

     —          205        205   
  

 

 

   

 

 

   

 

 

 

Total current assets

     114,990        —          114,990   
  

 

 

   

 

 

   

 

 

 

Property, plant and equipment, net

     95,602        —          95,602   

Other noncurrent assets, net

     888        —          888   
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 211,480      $ —        $ 211,480   
  

 

 

   

 

 

   

 

 

 

Liabilities and shareholder’s equity

      

Current liabilities

      

Accounts payable

   $ 15,756      $ (3,085   $ 12,671   

Accrued salaries, wages and benefits

     —          1,193        1,193   

Other current liabilities

       1,892        1,892   

Taxes payable

     11,257        —          11,257   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     27,013        —          27,013   
  

 

 

   

 

 

   

 

 

 

Retirement benefit obligation

     557        —          557   

Deferred income taxes

     23,216        —          23,216   
  

 

 

   

 

 

   

 

 

 

Total liabilities

     50,786        —          50,786   

Shareholder’s equity

      

Common stock - $0.01 par value; unlimited shares authorized; 173 shares issued and outstanding

     84,932        (84,932     —     

Additional paid-in capital

     21,849        (21,849     —     

Retained earnings

     54,825        (54,825     —     

Accumulated other comprehensive loss

     (912     912        —     
  

 

 

   

 

 

   

 

 

 

Total shareholder’s equity

     160,694        (160,694     —     

Montana total shareholder’s equity

     —          160,694        160,694   
  

 

 

   

 

 

   

 

 

 
     160,694        —          160,694   
  

 

 

   

 

 

   

 

 

 

Total liabilities and shareholder’s equity

   $ 211,480      $ —        $ 211,480   
  

 

 

   

 

 

   

 

 

 

 

9


CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

     Nine months ended September 30, 2012  
     As Reported     Reclassifications     Montana Historical  
           (In thousands)        

Sales

   $ 347,338      $ —        $ 347,338   

Interest and other income

     156        (156     —     

Cost of sales

     —          290,135        290,135   
  

 

 

   

 

 

   

 

 

 

Gross profit

     347,494        (290,291     57,203   

Expenses:

      

Costs of products sold

     259,925        (259,925     —     

Operating

     30,210        (30,210     —     

Transportation and handling

     6,029        (6,029     —     

General and administrative

     5,776        (5,776     —     

Interest expense

     5,284        (5,284     —     

Foreign exchange loss (gain)

     (150     150        —     
  

 

 

   

 

 

   

 

 

 

Total costs and expenses

     307,074        (307,074     —     
  

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

      

General and administrative

     —          5,776        5,776   

Transportation

     —          6,029        6,029   

Taxes other than income taxes

     —          —          —     

Insurance recoveries

     —          —          —     

Other

     —          —          —     
  

 

 

   

 

 

   

 

 

 

Operating income

     40,420        4,978        45,398   

Other income (expense):

      

Interest expense

     —          (5,128     (5,128

Debt Extinguishment costs

     —          —          —     

Realized gain (loss) on derivative instruments

     —          —          —     

Unrealized gain (loss) on derivative instruments

     —          —          —     

Other

     —          150        150   
  

 

 

   

 

 

   

 

 

 

Total other income (expense)

     —          (4,978     (4,978

Net income before income taxes

     40,420        —          40,420   

Income tax expense

     16,172        —          16,172   
  

 

 

   

 

 

   

 

 

 

Net income

   $ 24,248      $ —        $ 24,248   
  

 

 

   

 

 

   

 

 

 

 

10


CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

     Twelve months ended December 31, 2011  
     As Reported      Reclassifications     Montana Historical  
            (In thousands)        

Sales

   $ 446,799       $ —        $ 446,799   

Interest and other income

     140         (140     —     

Cost of sales

     —           401,898        401,898   
  

 

 

    

 

 

   

 

 

 

Gross profit

     446,939         (402,038     44,901   

Expenses:

       

Costs of products sold

     362,995         (362,995     —     

Operating

     38,903         (38,903     —     

Transportation and handling

     12,474         (12,474     —     

General and administrative

     4,426         (4,426     —     

Interest expense

     8,773         (8,773     —     

Foreign exchange loss (gain)

     670         (670     —     
  

 

 

    

 

 

   

 

 

 

Total costs and expenses

     428,241         (428,241     —     
  

 

 

    

 

 

   

 

 

 

Operating costs and expenses:

       

General and administrative

     —           4,426        4,426   

Transportation

     —           12,474        12,474   

Taxes other than income taxes

     —           —          —     

Insurance recoveries

     —           —          —     

Other

     —           —          —     
  

 

 

    

 

 

   

 

 

 

Operating income

     18,698         9,303        28,001   

Other income (expense):

       

Interest expense

     —           (8,633     (8,633

Debt Extinguishment costs

     —           —          —     

Realized gain (loss) on derivative instruments

     —           —          —     

Unrealized gain (loss) on derivative instruments

     —           —          —     

Other

     —           (670     (670
  

 

 

    

 

 

   

 

 

 

Total other income (expense)

     —           (9,303     (9,303

Net income before income taxes

     18,698         —          18,698   

Income tax expense

     10,297         —          10,297   
  

 

 

    

 

 

   

 

 

 

Net income

   $ 8,401       $ —        $ 8,401   
  

 

 

    

 

 

   

 

 

 

 

11


CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

Note 3. Pro Forma Net Income (Loss) Per Unit

Pro forma net income (loss) per unit is determined by dividing the pro forma net income (loss) available to the limited partners’ interest, after deducting the general partner’s interest in the pro forma net income (loss), by the weighted average number of limited partner units expected to be outstanding at the closing of the offering. For purposes of the calculation of pro forma net income (loss) per limited partner unit, it was assumed that the number of common units outstanding was increased by 22,250,000 for all periods since January 1, 2011, which reflect the sale of 4,500,000 common units on February 24, 2011, the sale of 11,000,000 common units on September 12, 2011, a portion of the underwriters’ overallotment option of 750,000 common units on October 13, 2011 and the sale of 6,000,000 common units on May 9, 2012.

 

12