CALUMET SPECIALTY PRODUCTS PARTNERS L P : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-K)

The historical consolidated financial statements included in this Annual Report
reflect all of the assets, liabilities and results of operations of Calumet
Specialty Products Partners, L.P. and its consolidated subsidiaries ("Calumet,"
the "Company," "we," "our," or "us"). The following discussion analyzes the
financial condition and results of operations of the Company for the years ended
December 31, 2019, 2018 and 2017. In addition, as discussed in Note 4 and Note 5
to the Consolidated Financial Statements, we closed the San Antonio Transaction,
Superior Transaction and the Anchor Transaction on November 10, 2019; November
8, 2017 and November 21, 2017, respectively. The historical results of
operations of the San Antonio Refinery and the Superior Refinery are contained
in our financial position and results through November 10, 2019 and November 7,
2017, respectively. As a result of the Anchor Transaction, we classified its
results of operations and the assets and liabilities of Anchor for all periods
presented to reflect Anchor as a discontinued operation. Prior to being reported
as discontinued operations, Anchor was included as its own reportable segment as
oilfield services. Unitholders should read the following discussion and analysis
of the financial condition and results of operations of the Company in
conjunction with the historical consolidated financial statements and notes of
the Company included elsewhere in this Annual Report.
Overview
We are a leading independent producer of high-quality, specialty hydrocarbon
products in North America. We are headquartered in Indianapolis, Indiana, and
own specialty and fuel products facilities primarily located in northwest
Louisiana, northern Montana, western Pennsylvania, Texas, New Jersey and eastern
Missouri. We own and lease additional facilities, primarily related to
production and distribution of specialty and fuel products, throughout the
United States ("U.S."). Our business is organized into three segments: our core
specialty products segment, fuel products segment and corporate segment. In our
specialty products segment, we process crude oil and other feedstocks into a
wide variety of customized lubricating oils, solvents, waxes, synthetic
lubricants, and other products. Our specialty products are sold to domestic and
international customers who purchase them primarily as raw material components
for basic industrial, consumer and automotive goods. We also blend and market
specialty products through our Royal Purple, Bel-Ray and TruFuel brands. In our
fuel products segment, we process crude oil into a variety of fuel and
fuel-related products, including gasoline, diesel, jet fuel, asphalt and other
products, and from time to time resell purchased crude oil to third-party
customers. Our corporate segment, which was added during the third quarter of
2019, primarily consists of general and administrative expenses not allocated to
the specialty products or fuel products segments. Please read Note 20 -
"Segments and Related Information" under Part II, Item 8 "Financial Statements
and Supplementary Data" for further information.
2019 Update
Outlook and Trends
Commodity markets and corresponding refined product margins were volatile during
2019 and 2018, with the average price per barrel of New York Mercantile Exchange
West Texas Intermediate ("NYMEX WTI") crude oil decreasing approximately 12%
during 2019 versus increasing approximately 28% during 2018. We expect this
volatility to continue into 2020. Below are factors that have impacted our
results of operations during 2019:
•      Specialty product margins improved in 2019 as a result of better asset
       performance from the Shreveport and Princeton refineries and the
       rationalization of low margin products in the lubricating oils and
       packaged and synthetic specialty products divisions. We expect our

specialty product margins to remain stable in the near term. We continue

to consider our specialty products segment our core business over the long

       term, and we plan to seek appropriate ways to further invest in our
       specialty products segment. Accordingly, we continue to evaluate
       opportunities to divest non-core businesses and assets in line with our

strategy of preserving liquidity and streamlining our business to better

focus on the advancement of our core business. However, we may also

consider the disposition of certain core assets or businesses, to the

extent such a transaction would improve our capital structure or otherwise

be accretive to the Company. There can be no assurance as to the timing or

success of any such potential transaction, or any other transaction, or

that we will be able to sell these assets or businesses on satisfactory

terms, if at all. In addition, our acquisition program targets assets that

management believes will be financially accretive, and we intend to focus

       on targeted strategic acquisitions of specialty products assets that
       leverage our existing core competency and that have an identifiable
       competitive advantage we can exploit as the new owner.

• We continue to focus on improving operations. Our average feedstock runs

       were 103,603 barrels per day ("bpd") in 2019, compared to 94,137 bpd in
       2018. The increase is primarily attributable to the Shreveport crude and

propane deasphalting unit debottlenecking projects completed at the end of

2018, higher utilization rates across Shreveport, Cotton Valley and

Princeton refineries and less turnaround activity across the assets. We

anticipate seeing improvement in our utilization rates in 2020 as we

continue to seek to minimize unplanned downtime at our facilities which

       negatively affected our current year earnings.


•      Refined fuel product margins tightened in 2019 as compared to 2018
       predominately driven by the decrease in the Western Canadian Select
       ("WCS") discount versus NYMEX WTI decreasing to approximately $14 per
       barrel on average below



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NYMEX WTI in comparison to $27 per barrel on average below NYMEX WTI in 2018.
Late in the fourth quarter of 2018, the government of Alberta issued mandated
oil production cuts of 325,000 bpd, which caused the WCS discount to decline.
The price of domestically produced mid-continent crude is expected to continue
to trade at a discount relative to internationally produced crude reflecting
increased domestic production combined with transportation constraints in the
United States. Processing heavy sour crude at our Great Falls refinery resulted
in delivering a lower overall cost of crude oil in 2019 than 2018. Late in the
fourth quarter of 2019, the Canadian heavy sour crude oil discounts began to
widen to the highest discount of 2019, but overall remained significantly
tighter in 2019.
•      Environmental regulations continue to affect our margins in the form of

RINs. To the extent we are unable to blend biofuels, we must purchase RINs

in the open market to satisfy our annual requirement. The approximate 63%

decrease in the price of RINs in 2019 favorably affected our results of

operations. It is not possible to predict what future volumes or costs may

be, but given the volatile price of RINs, we continue to anticipate that

RINs have the potential to remain a significant expense for our fuel

products segment, assuming current market prices for RINs continue,

inclusive of the favorable impact of any exemptions received from the EPA.

• On January 21, 2020, the Company committed to a cost reduction plan to

reduce overall operating expenses, including the reduction of outside

services, facility fixed costs and corporate staffing costs (the "Cost

Reduction Plan"). These cost reductions are designed to right-size general

and administrative spending. The Company expects to incur approximately

$10 million in one-time costs over the course of 2020 to implement the

Cost Reduction Plan, a significant portion of which are expected to result

in cash expenditures.

• The Company has taken the next step in our portfolio transformation and

started the process of reviewing strategic options for our remaining fuels

refinery in Great Falls, Montana and expect to execute upon an option,

which could occur as early as this year.

Key Matters, Claims and Legal Proceedings
On October 31, 2018, the Company received an indemnity claim notice (the "Claim
Notice") from Husky Superior Refining Holding Corp. ("Husky") under the
Membership Interest Purchase Agreement, dated August 11, 2017 ("MIPA"), which
was entered into in connection with the Superior Transaction. The Claim Notice
relates to alleged losses Husky incurred in connection with a fire at the Husky
Superior refinery on April 26, 2018, over five months after Calumet sold Husky
100% of the membership interests in the entity that owns the Husky Superior
refinery. Based on public reports, Calumet understands the fire occurred during
a turnaround of the Husky Superior refinery at a time when Husky owned,
operated, and supervised the refinery. Calumet was not involved with the
turnaround. The U.S. Chemical Safety and Hazard Investigation Board ("CSB") is
currently investigating the fire, but has not contacted Calumet in connection
with that investigation or suggested that Calumet is responsible for the fire.
Husky's Claim Notice alleges that Husky "has become aware of facts which may
give rise to losses" for which it reserved the right to seek indemnification at
a later date. The Claim Notice further alleges breaches of certain
representations, warranties, and covenants contained in the MIPA. The
information currently available about the fire and the CSB investigation does
not support Husky's threatened claims, and Husky has not filed a lawsuit against
Calumet. If Husky were to assert such claims, they would be subject to certain
limits on indemnification liability under the MIPA that may reduce or eliminate
any potential indemnification liability.
On May 4, 2018, the SEC requested that the Company and certain of its executives
voluntarily produce certain communications and documents prepared or maintained
from January 2017 to May 2018 and generally related to the Company's finance and
accounting staff, financial reporting, public disclosures, accounting policies,
disclosure controls and procedures and internal controls. Beginning on July 11,
2018, the SEC issued several subpoenas formally requesting the same documents
previously subject to the voluntary production requests by the SEC as well as
additional, related documents and information. The SEC has also interviewed and
taken testimony from current and former Company employees and other individuals.
The Company has, from the outset, cooperated with the SEC's requests. In
November 2019, the Company and the SEC settled the matter. The matter was
settled without the Company admitting or denying any charges arising from the
SEC's investigation and the Company paid a penalty of less than $0.3 million.
Financial Results
We reported a net loss from continuing operations of $43.6 million in 2019,
versus a net loss from continuing operations of $51.0 million in 2018. We
reported Adjusted EBITDA from continuing operations (as defined in Item 6
"Selected Financial Data - Non-GAAP Financial Measures") of $304.6 million in
2019, versus $263.9 million in 2018.
Our net loss from continuing operations and Adjusted EBITDA for the full-year
2019 includes the impact of a favorable LCM inventory adjustment of $35.8
million and $6.0 million of gains related to liquidation of last-in, first-out
("LIFO") inventory layers while our net loss from continuing operations and
Adjusted EBITDA for the full year 2018 included the impact of an unfavorable LCM
inventory adjustment of $30.6 million and $6.3 million of losses related to
liquidation of LIFO inventory layers.

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Please read Item 6 "Selected Financial Data - Non-GAAP Financial Measures" for a
reconciliation of EBITDA and Adjusted EBITDA to Net Loss, our most directly
comparable financial performance measure calculated and presented in accordance
with GAAP.
Commodity markets remained volatile in 2019, contributing to fluctuations in
refined product margins. The average price of NYMEX WTI crude oil averaged
approximately $57 per barrel in 2019 compared to approximately $65 per barrel in
2018. With respect to the average price differential per barrel between WCS and
NYMEX WTI, WCS averaged approximately $14 per barrel below NYMEX WTI in 2019
compared to approximately $27 per barrel below NYMEX WTI in 2018. Given our
access to cost-advantaged, heavy Canadian crude oil in our Great Falls refinery,
we have embarked on a multi-year plan to increase our ability to process this
crude oil grade. In the full-year 2019, we processed 24,800 bpd of heavy
Canadian crude oil, versus 24,700 bpd in the full-year 2018. The increase from
2018 to 2019 was primarily attributed to less unplanned downtime in 2019.
Gross profit per barrel for our specialty products segment was $35.74 in 2019,
versus $31.41 in the prior year. Specialty products segment Adjusted EBITDA was
$220.2 million in 2019 compared to $162.2 million in the prior year. Specialty
products segment Adjusted EBITDA Margin was 16.3% in 2019, compared to 11.7% in
2018. Specialty products segment results for fiscal year 2019 benefited from
higher production volumes at our Shreveport refinery and higher sales volumes at
our Princeton refinery, strong performance from our solvents products, and the
rationalization of low margin products within both lubricating oils and packaged
and synthetic specialty products. Results were also impacted by a $9.3 million
favorable LCM inventory adjustment in 2019 compared to a $3.4 million
unfavorable LCM inventory adjustment in 2018 and $2.8 million of gains related
to the liquidation of LIFO inventory layers in 2019 compared to $2.7 million of
losses in 2018. Specialty products represented approximately 24% of total
production in 2019, compared to 26.3% in 2018.
Gross profit per barrel for our fuel products segment was $4.35 per barrel in
2019, versus $6.07 per barrel in the prior year. Fuel products segment Adjusted
EBITDA was $182.0 million in 2019 compared to $199.2 million in 2018. Fuel
products segment Adjusted EBITDA Margin was 8.7% in 2019 compared to 9.4% in
2018. Fuel products segment results for fiscal year 2019 were impacted by lower
margins, predominately driven by the decrease in the WCS discount versus NYMEX
WTI. Results were also impacted by a $26.3 million favorable LCM inventory
adjustment in 2019 compared to a $27.2 million unfavorable LCM inventory
adjustment in 2018 and $3.2 million of gains related to the liquidation of LIFO
inventory layers in 2019 compared to $3.6 million of losses in 2018. Fuel
products represented approximately 76% of total production during the year,
compared to 73.7% in 2018.
For benchmarking purposes, we compare our per barrel refined fuel products
margin to the Gulf Coast crack spread. The Gulf Coast crack spread represents
the approximate gross margin per barrel that results from processing two barrels
of crude oil into one barrel of gasoline and one barrel of ultra-low sulfur
diesel fuel. The Gulf Coast crack spread is calculated using the near-month
futures price of NYMEX WTI crude oil, the price of U.S. Gulf Coast Pipeline 87
Octane Conventional Gasoline and the price of U.S. Gulf Coast Pipeline Ultra-Low
Sulfur Diesel ("ULSD").
During 2019, the Gulf Coast crack spread averaged $18 per barrel as compared to
averaging approximately $17 per barrel in the prior year. The Gulf Coast ULSD
crack spread averaged approximately $22 per barrel during 2019, compared to
approximately $21 per barrel in the prior year. The Gulf Coast gasoline crack
spread remained flat during 2019, and averaged approximately $14 per barrel. The
average WCS discount versus NYMEX WTI averaged approximately $14 per barrel
during 2019, compared to approximately $27 per barrel during 2018.
Included within our fuel products segment gross profit per barrel calculation
are the realized cost of crude oil and other feedstocks and other
production-related expenses, the most significant portion of which includes
labor, plant fuel, utilities, contract services, maintenance, depreciation and
process materials. Our gross profit per barrel calculation may not be comparable
to similar calculations published by our competitors.
There are several factors that impact our refined product margin when compared
to the benchmark crack spread. For example, several of our fuel products
refineries produce asphalt and other residual products that may carry an average
per barrel sales price below that of U.S. Gulf Coast gasoline or U.S. Gulf Coast
ULSD. Alternatively, many of our fuel products refineries purchase select
quantities of crude oil at a discount to NYMEX WTI, which helps support a higher
capture rate, relative to the crack spread benchmark. Finally, our Shreveport
refinery produces both fuel and specialty products; given that our specialty
products facilities generally operate at lower utilization rates than our fuel
products facilities, facilities producing specialty products may incur higher
operating expenses when compared to refineries that produce fuels exclusively,
such as our Great Falls refinery. Based on our system-wide crude purchasing
behaviors and overall production slate, we believe the Gulf Coast crack spread
remains a meaningful indicator in tracking directional shifts in our refined
product margins.
Business Divestitures
In March 2019, we sold our interest in Biosyn Holdings, LLC ("Biosyn") to The
Heritage Group, a related party, for total proceeds of $5.0 million which was
recorded in the "other" component of other income (expense) on the consolidated
statements of operations.

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In November 2019, we completed the sale of all of the issued and outstanding
membership interests in Calumet San Antonio Refining, LLC, which owned the San
Antonio Refinery. The sale included the refinery and related assets, including
associated hydrocarbon inventories, a crude oil terminal and pipeline to
Starlight Relativity Acquisition Company LLC ("Starlight"), a Delaware limited
liability company (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. 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 in the consolidated
statements of operations for the year ended December 31, 2019, related to the
San Antonio Transaction. 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 $ 4.5 million, which has been reflected in the net
loss recognized by the Company.
In connection with the San Antonio Transaction, the Partnership, 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
Partnership 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, we included the $38.1 million liability related to the
Pipeline Agreement in the Gain (loss) on sale of business calculation for the
San Antonio Transaction.
In November 2017, we completed the sale of all of the issued and outstanding
membership interests in Calumet Superior, LLC, which owns the Superior,
Wisconsin refinery ("Superior Refinery"). The sale included the associated
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 line space in North Dakota to 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
our fuel products segment. For the years ended December 31, 2018 and 2017, we
recognized a net gain of $4.8 million and $236.0 million, respectively, in Gain
(loss) on sale of business in the consolidated statements of operations related
to the Superior Transaction. Please read Note 5 - "Divestitures" under Part II,
Item 8 "Financial Statements and Supplementary Data - Notes to Consolidated
Financial Statements."
In November 2017, we completed the sale to a subsidiary of Q'Max Solutions Inc.
("Q'Max") of all of the issued and outstanding membership interests in Anchor ,
for total consideration of approximately $89.6 million including a base price of
$50.0 million, $14.2 million for net working capital and other items and a 10%
equity interest in Fluid Holding Corp. ("FHC"), the parent company of Q'Max (the
"Anchor Transaction"). Effective in the fourth quarter of 2017, we classified
its results of operations for all periods presented to reflect Anchor as a
discontinued operation and classified the assets and liabilities of Anchor as
discontinued operations. Prior to being reported as discontinued operations,
Anchor was included as its own reportable segment as oilfield services.
Liquidity Update
As of December 31, 2019, we had total liquidity of $378.5 million comprised of
$19.1 million of cash and availability under our revolving credit facility of
$359.4 million. As of December 31, 2019, our revolving credit facility had a
$401.9 million borrowing base, $42.5 million in outstanding standby letters of
credit and no outstanding borrowings. We believe we will continue to have
sufficient liquidity from cash on hand, cash flow from operations, borrowing
capacity and other means by which to meet our financial commitments, debt
service obligations, anticipated capital expenditures and contingencies. On a
continuous basis, we will focus on various initiatives, including working
capital initiatives, to further enhance our liquidity over time, given current
market conditions.
In 2019, we redeemed $900 million in aggregate principal amount of our 6.5%
Notes due April 2021 ("2021 Notes") with the net proceeds from the issuance of
$550.0 million of 11.00% senior notes due 2025 ("2025 Notes"), together with
borrowings under our revolving credit facility and cash on hand. In conjunction
with the redemption, we incurred net, debt extinguishment costs of $2.2 million.
Renewable Fuel Standard Update
We, along with the broader refining industry, remain subject to compliance costs
under the RFS. Under the regulation of the EPA, the RFS provides annual
requirements for the total volume of renewable transportation fuels which are
mandated to be blended into finished petroleum fuels. If a refiner does not meet
its required annual Renewable Volume Obligation, the refiner can purchase
blending credits in the open market, referred to as RINs.
For the year ended December 31, 2019, our RINs gain was $6.0 million, as
compared to a RINs gain for the year ended December 31, 2018 of $31.4 million.
Our gross RINs Obligation, which includes RINs that are required to be secured
through either blending or through the purchase of RINs in the open market, was
approximately 87 million RINs in 2019 including our San Antonio refinery
(through October 31, 2019). For the full-year 2020, we anticipate our gross RINs
obligation will be approximately 83.1 million RINs.

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During 2019 and 2018, the EPA granted our fuel product refineries a "small
refinery exemption" under the RFS for the 2018 calendar year and the 2017
calendar year, respectively, as provided for under the CAA. In granting this
exemption, the EPA determined that for the 2018 calendar year and the 2017
calendar year, compliance with the RFS would represent a "disproportionate
economic hardship" for these refineries. Because we generally maximize ethanol
blending, the effect of a small refinery exemption is to allow us to bank RINs
that we generated against future obligations for up to one year, or to sell
them.
We continue to anticipate that expenses related to RFS compliance have the
potential to remain a significant expense for our fuel products segment,
assuming current market prices for RINs. Estimated RINs obligations remain
subject to fluctuations in both fuels production volumes and RINS prices during
the 2020 calendar year.
Key Performance Measures
Our sales and net loss are principally affected by the price of crude oil,
demand for specialty products and fuel products, prevailing crack spreads for
fuel products, the price of natural gas used as fuel in our operations and our
results from derivative instrument activities.
Our primary raw materials are crude oil and other specialty feedstocks, and our
primary outputs are specialty petroleum products and fuel products. The prices
of crude oil, specialty products and fuel products are subject to fluctuations
in response to changes in supply, demand, market uncertainties and a variety of
factors beyond our control. We monitor these risks and from time-to-time enter
into derivative instruments designed to help mitigate the impact of commodity
price fluctuations on our business. The primary purpose of our commodity risk
management activities is to economically hedge our cash flow exposure to
commodity price changes so that we can meet our debt service and capital
expenditure requirements despite fluctuations in crude oil and fuel products
prices. We also may hedge when market conditions exist that we believe to be out
of the ordinary and particularly supportive of our financial goals. We enter
into derivative contracts for future periods for quantities that do not exceed
our projected purchases of crude oil and sales of fuel products. Please read
Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk -
Commodity Price Risk" and Note 11 - "Derivatives" under Part II, Item 8
"Financial Statements and Supplementary Data - Notes to Consolidated Financial
Statements."
Our management uses several financial and operational measurements to analyze
our performance. These measurements include the following:
• sales volumes;


• segment gross profit;

• segment Adjusted EBITDA; and

• selling, general and administrative expenses.

Sales volumes. We view the volumes of specialty products and fuel products sold
as an important measure of our ability to effectively utilize our operating
assets. Our ability to meet the demands of our customers is driven by the
volumes of crude oil and feedstocks that we run through our facilities. Higher
volumes improve profitability both through the spreading of fixed costs over
greater volumes and the additional gross profit achieved on the incremental
volumes.
Segment gross profit. Specialty products and fuel products gross profit are
important measures of our ability to maximize the profitability of our specialty
products and fuel products segments. We define gross profit as sales less the
cost of crude oil and other feedstocks and other production-related expenses,
the most significant portion of which includes labor, plant fuel, utilities,
contract services, maintenance, depreciation and processing materials. We use
gross profit as an indicator of our ability to manage our business during
periods of crude oil and natural gas price fluctuations, as the prices of our
specialty products and fuel products generally do not change immediately with
changes in the price of crude oil and natural gas. The increase or decrease in
selling prices typically lags behind the rising or falling costs, respectively,
of crude oil feedstocks for specialty products. Other than plant fuel,
production-related expenses generally remain stable across broad ranges of
specialty products and fuel products throughput volumes but can fluctuate
depending on maintenance activities performed during a specific period.
Our fuel products segment gross profit per barrel may differ from standard U.S.
Gulf Coast, PADD 4 Billings, Montana or 3/2/1 and 2/1/1 market crack spreads due
to many factors, including our fuel products mix as shown in our production
table being different than the ratios used to calculate such market crack
spreads, LCM and LIFO inventory adjustments reflected in gross profit, operating
costs including fixed costs, actual crude oil costs differing from market
indices and our local market pricing differentials for fuel products in the
Shreveport, Louisiana and Great Falls, Montana vicinities as compared to U.S.
Gulf Coast and PADD 4 Billings, Montana postings.
Segment Adjusted EBITDA. We believe that specialty products and fuel products
segment Adjusted EBITDA measures are useful as they exclude transactions not
related to our core cash operating activities and provide metrics to analyze our
ability to pay distributions to our unitholders and pay interest to our
noteholders as Adjusted EBITDA is a component in the calculation of
Distributable Cash Flow and allows us to meaningfully analyze the trends and
performance of our core cash operations as well as

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to make decisions regarding the allocation of resources to segments. The corporate segment Adjusted EBITDA primarily reflects general and administrative costs not related to our core cash operating activities.

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Results of Operations
The following table sets forth information about our continuing operations.
Facility production volume differs from sales volume due to changes in
inventories and the sale of purchased fuel product blendstocks, such as ethanol
and biodiesel, and the resale of crude oil in our fuel products segment. The
historical results of operations of the San Antonio Refinery and the Superior
Refinery are included through the effective date of the disposition of each,
November 10, 2019 and November 7, 2017, respectively.
                                                 Year Ended December 31,
                                                2019       2018       2017
                                                         (In bpd)
Total sales volume (1)                         104,734    97,104    132,082
Total feedstock runs (2)                       103,603    94,137    128,624
Total facility production: (3)
Specialty products:
Lubricating oils                                11,506    11,931     14,606
Solvents                                         7,526     7,649      7,761
Waxes                                            1,315     1,279      1,423
Packaged and synthetic specialty products (4)    1,540     2,129      2,206
Other                                            1,764     2,113      1,811
Total specialty products                        23,651    25,101     27,807
Fuel products:
Gasoline                                        22,877    20,323     35,713
Diesel                                          28,709    27,367     33,277
Jet fuel                                         4,506     2,895      5,368
Asphalt, heavy fuel oils and other              20,286    19,612     29,396
Total fuel products                             76,378    70,197    103,754
Total facility production (3)                  100,029    95,298    131,561

(1) Total sales volume includes sales from the production at our facilities

and certain third-party facilities pursuant to supply and/or processing

       agreements, sales of inventories and the resale of crude oil to
       third-party customers. Total sales volume also includes the sale of
       purchased fuel product blendstocks, such as ethanol and biodiesel, as

components of finished fuel products in our fuel products segment sales.

The increase in total sales volume in 2019 compared to 2018 is primarily due to
increased production at the Shreveport Refinery and Princeton Refinery in the
current year as a result of the successful completion of maintenance activities
in 2018, partially offset by the divestiture of the San Antonio Refinery in
November 2019.
The decrease in total sales volume in 2018 compared to 2017 is due primarily to
the divestiture of the Superior Refinery in November 2017 and decreased
production due to increased maintenance activities at our facilities during
2018.
(2)    Total feedstock runs represent the barrels per day of crude oil and other
       feedstocks processed at our facilities and at certain third-party
       facilities pursuant to supply and/or processing agreements.


The increase in total feedstock runs in 2019 compared to 2018 is primarily due
to increased production at the Shreveport Refinery and Princeton Refinery in the
current year as a result of the successful completion of maintenance activities
in 2018, partially offset by the divestiture of the San Antonio Refinery in
November 2019.
The decrease in total feedstock runs in 2018 compared to 2017 is primarily due
to the divestiture of the Superior Refinery in November 2017 and decreased
production due to maintenance activities at our facilities during 2018.
(3)    Total facility production represents the barrels per day of specialty

products and fuel products yielded from processing crude oil and other

feedstocks at our facilities and at certain third-party facilities

pursuant to supply and/or processing agreements. The difference between

total facility production and total feedstock runs is primarily a result

       of the time lag between the input of feedstocks and the production of
       finished products and volume loss.


The changes in total facility production in 2019 over 2018 and 2018 over 2017
are due primarily to the operational items discussed above in footnotes 2 and 3
of this table.
(4)    Represents production of finished lubricants and specialty chemicals
       products, including the products from our Royal Purple, Bel-Ray and
       Calumet Packaging facilities.



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The following table reflects our consolidated results of operations and includes
the non-GAAP financial measures EBITDA, Adjusted EBITDA and Distributable Cash
Flow. For a reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash
Flow to Net loss and Net cash provided by (used in) operating activities, our
most directly comparable financial performance and liquidity measures calculated
and presented in accordance with GAAP, please read Item 6 "Selected Financial
Data - Non-GAAP Financial Measures."
                                                      Year Ended December 31,
                                             2019              2018              2017
                                                           (In millions)
Sales                                   $     3,452.6     $     3,497.5     $     3,763.8
Cost of sales                                 3,000.9           3,060.8           3,265.6
Gross profit                                    451.7             436.7             498.2
Operating costs and expenses:
Selling                                          53.1              58.2              65.7
General and administrative                      136.7             122.5             138.7
Transportation                                  122.9             137.2             137.1
Taxes other than income taxes                    20.5              18.1              24.1
Loss on impairment and disposal of
assets                                           37.0                 -     

207.3

(Gain) loss on sale of business, net              8.7              (4.8 )          (236.0 )
Other operating (income) expense                 (3.5 )           (17.4 )             3.3
Operating income                                 76.3             122.9             158.0
Other income (expense):
Interest expense                               (134.6 )          (155.5 )          (183.1 )
Debt extinguishment costs                        (2.2 )           (58.8 )               -
Gain (loss) on derivative instruments             9.0              33.8              (9.6 )
Gain (loss) from unconsolidated
affiliates                                        3.8              (3.7 )               -
Gain on sale of unconsolidated
affiliates                                        1.2               0.2                 -
Other                                             3.4              10.8               3.3
Total other expense                            (119.4 )          (173.2 )          (189.4 )
Net loss from continuing operations
before income taxes                             (43.1 )           (50.3 )           (31.4 )
Income tax expense (benefit) from
continuing operations                             0.5               0.7              (0.1 )
Net loss from continuing operations             (43.6 )           (51.0 )           (31.3 )
Net loss from discontinued operations,
net of income taxes                                 -              (4.1 )           (72.5 )
Net loss                                $       (43.6 )   $       (55.1 )   $      (103.8 )
EBITDA                                  $       201.6     $       219.2     $       246.7
Adjusted EBITDA                         $       304.6     $       263.9     $       317.2
Distributable Cash Flow                 $       104.0     $        67.0     $        89.3



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Year Ended December 31, 2019, Compared to Year Ended December 31, 2018
Sales. Sales from continuing operations decreased $44.9 million, or 1.3%, to
$3,452.6 million in 2019 from $3,497.5 million in 2018. Sales for each of our
principal product categories in these periods were as follows:
                                                            Year Ended December 31,
                                                    2019                2018           % Change
                                               (In millions, except barrel and per barrel data)
Sales by segment:
Specialty products:
Lubricating oils                             $           593.1     $       600.1           (1.2 )%
Solvents                                                 325.9             331.9           (1.8 )%
Waxes                                                    119.3             117.0            2.0  %
Packaged and synthetic specialty products
(1)                                                      230.8             256.8          (10.1 )%
Other (2)                                                 85.0              76.6           11.0  %
Total specialty products                     $         1,354.1     $     1,382.4           (2.0 )%
Total specialty products sales volume (in
barrels)                                             9,087,000         8,742,000            3.9  %
Average specialty products sales price per
barrel                                       $          149.02     $      158.13           (5.8 )%
Fuel products:
Gasoline                                     $           679.6     $       683.1           (0.5 )%
Diesel                                                   859.1             910.0           (5.6 )%
Jet fuel                                                 134.6             100.1           34.5  %
Asphalt, heavy fuel oils and other (3)                   425.2             421.9            0.8  %
Total fuel products                          $         2,098.5     $     2,115.1           (0.8 )%
Total fuel products sales volume (in
barrels)                                            29,141,000        26,701,000            9.1  %
Average fuel products sales price per barrel $           72.01     $       79.21           (9.1 )%
Total sales                                  $         3,452.6     $     3,497.5           (1.3 )%
Total specialty and fuel products sales
volume (in barrels)                                 38,228,000        35,443,000            7.9  %





(1)    Represents finished lubricants and chemicals specialty products at our
       Royal Purple, Bel-Ray and Calumet Packaging facilities.


(2)    Represents (a) by-products, including fuels and asphalt, produced in

connection with the production of specialty products at the Princeton and

Cotton Valley refineries and Dickinson and Karns City facilities and (b)
       polyolester synthetic lubricants produced at the Missouri facility.


(3)    Represents asphalt, heavy fuel oils and other products produced in

connection with the production of fuels at the Shreveport, San Antonio,

Superior and Great Falls refineries and crude oil sales from the Montana

and San Antonio refineries to third-party customers.

The components of the $28.3 million specialty products segment sales decrease in
2019 were as follows:
                                                 Dollar Change
                                                 (In millions)
Sales price                                     $       (82.7 )
Volume                                                   54.4

Total Specialty Products segment sales decrease $ (28.3 )

Specialty products segment sales for 2019 decreased $28.3 million, or 2.0%,
primarily due to a decrease in the average selling price per barrel, partially
offset by higher sales volume. The average selling price per barrel decreased by
$9.11, or 5.8%, resulting in an $82.7 million decrease in sales. The decrease in
the average selling price per barrel was driven by the 12% decrease in NYMEX
WTI, which is a proxy for the cost of crude oil per barrel for the period.
Average selling price per barrel decreased in each of our product lines, with
the exception of packaged and synthetic specialty products, the least
commoditized products of the specialty products segment. The increase in sales
volume is due to higher production rates from the Shreveport, Princeton and
Cotton Valley refineries.

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The components of the $16.6 million fuel products segment sales decrease in 2019
were as follows:
                                            Dollar Change
                                            (In millions)
Sales price                                $      (227.3 )
Divestiture impact                                 (55.8 )
Volume                                             266.5

Total Fuel Products segment sales decrease $ (16.6 )

Fuel products segment sales for 2019 decreased $16.6 million, or 0.8%, due
primarily to the sale of the San Antonio Refinery in November 2019 and the
change in the overall price of commodity fuel products as a result of the
decrease in NYMEX WTI. The average selling price per barrel decreased $7.20,
or 9.1%, the impact of which resulted in a $227.3 million decrease in sales. The
impact of the increase in sales volume of $266.5 million is primarily the result
of debottlenecking projects at the Shreveport refinery and less downtime across
all of our fuel segment refineries.
Gross Profit. Gross profit from continuing operations increased $15.0 million,
or 3.4%, to $451.7 million in 2019 from $436.7 million in 2018. Gross profit for
our specialty and fuel products segments was as follows:
                                                         Year Ended December 31,
                                              2019                 2018              % Change
                                              (Dollars in millions, except per barrel data)
Gross profit by segment:
Specialty products:
Gross profit excluding hedging
activities                              $        325.0       $        274.6               18.4  %
Hedging activities                                (0.2 )                  -                  -  %
Gross profit                                     324.8                274.6               18.3  %
Percentage of sales                               24.0 %               19.9 %              4.1  %
Specialty products gross profit per
barrel                                  $        35.77       $        31.41               13.9  %
Specialty products gross profit per
barrel (including hedging activities)            35.74                31.41               13.8  %
Fuel products:
Gross profit                            $        126.9       $        162.1              (21.7 )%
Percentage of sales                                6.0 %                7.7 %             (1.7 )%

Fuel products gross profit per barrel $ 4.35 $ 6.07

              (28.3 )%
Fuel products gross profit per barrel
(including hedging activities)          $         4.35       $         6.07              (28.3 )%
Total gross profit                      $        451.7       $        436.7                3.4  %
Percentage of sales                               13.1 %               12.5 %              0.6  %

The components of the $50.2 million increase in the specialty products segment gross profit for 2019 were as follows:

                                  Dollar Change
                                  (In millions)
2018 reported gross profit       $       274.6
Sales price                              (82.7 )
Operating costs                            1.9
LCM / LIFO inventory adjustments          18.2
Volume                                    19.2
Cost of materials                         93.6
2019 reported gross profit       $       324.8


The increase in specialty products segment gross profit of $50.2 million
year-over-year was primarily due to decreased cost of materials, increased sales
volumes, a $18.2 million favorable LCM / LIFO inventory impact and decreased
operating costs, partially offset by a decrease in the average selling price per
barrel. Sales price and cost of materials net, increased gross profit by $10.9
million. The $1.9 million decrease in operating costs were primarily due to
decreases in depreciation and amortization, repairs and maintenance and
incentive compensation costs, partially offset by increases in utility costs.
The increase in sales volume

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is primarily due to higher sales volumes in all product lines except packaged
and synthetic specialty products as a result of debottlenecking projects at the
Shreveport refinery and less downtime at the Shreveport and Princeton
refineries.
The components of the $35.2 million decrease in the fuel products segment gross
profit for 2019 were as follows:
                                  Dollar Change
                                  (In millions)
2018 reported gross profit       $       162.1
Sales price                             (227.3 )
RINs                                     (25.4 )
Operating costs                           (3.2 )
Divestiture impact                         2.4
Volume                                    53.0
LCM / LIFO inventory adjustments          60.3
Cost of materials                        103.6

2019 reported gross profit $ 125.5

The decrease in fuel products segment gross profit of $35.2 million
year-over-year was primarily due to a decrease in the average selling price per
barrel and a lower RINs benefit in 2019 vs. 2018 as a result of the RINs
exemption we received in 2018 for the Superior Refinery, absent the RINs
exemption we received in 2019. The impact of the aforementioned items were
partially offset by decreases in cost of materials from the change in NYMEX WTI,
a $60.3 million favorable LCM / LIFO inventory impact, increased sales volumes,
and a $3.2 million decrease in operating costs.
Selling. Selling expenses from continuing operations decreased $5.1 million, or
8.8%, to $53.1 million in 2019 from $58.2 million in 2018. The decrease was due
primarily to a $3.1 million decrease in depreciation and amortization, a $1.6
million decrease in bad debt expense and a $1.6 million decrease in professional
services fees, partially offset by a $1.0 million increase in labor and benefits
and a $0.6 million increase in commissions.
General and administrative. General and administrative expenses from continuing
operations increased $14.2 million, or 11.6%, to $136.7 million in 2019 from
$122.5 million in 2018. The increase was due primarily to an $7.2 million
increase in incentive compensation costs, driven by phantom unit amortization
and a 65.2% increase in our unit price during the year, a $6.0 million increase
in professional services fees, and a $5.0 million increase in labor and
benefits, partially offset by a $2.8 million decrease in other expenses, mostly
for information technology costs, a $1.0 million decrease in depreciation and
amortization, a $2.8 million decrease in maintenance costs, and a $0.5 million
decrease in utilities costs.
Transportation. Transportation decreased $14.3 million, or 10.4%, to $122.9
million in 2019 from $137.2 million in 2018. Transportation expense in 2019
benefited from favorable trucking rates, increased rail efficiencies, and
decreased reliance on direct pipeline sales at the Shreveport refinery.
Taxes other than income taxes. Taxes other than income taxes increased $2.4
million, or 13.3%, to $20.5 million in 2019 from $18.1 million in 2018. The
increase is due primarily to 2018 benefiting from lower than anticipated 2017
excise tax liabilities as well as an increase in property taxes at our
Shreveport refinery in 2019.
Loss on impairment and disposal of assets. Loss on impairment and disposal of
assets increased to $37.0 million in 2019 due primarily to the $25.4 million
impairment charge of our FHC investment and the write-off of the TexStar finance
lease asset in the first quarter of 2019. There was no comparable activity in
2018. For a further discussion regarding the factors underlying these
impairments, please read Item 8. "Financial Statements and Supplementary Data,
Notes 6 and 8."
(Gain) loss on sale of business, net. (Gain) loss on sale of business, net from
continuing operations decreased $13.5 million, or 281.3%, to a loss of $8.7
million in 2019, compared to a gain of $4.8 million in 2018. The loss in the
current year is the result of our divestment of the refinery in San Antonio,
Texas. We did not complete any business divestitures in the prior year and the
small gain recognized in 2018 related to finalization of the remaining
post-close working capital adjustments associated with the Superior transaction.
Other operating income. Other operating income from continuing operations
decreased $13.9 million to $3.5 million in 2019 compared to $17.4 million in
2018. The change was primarily due to a 2018 operating income benefit from the
reduction of the RINs liability associated with the sale of the Superior
Refinery, absent in the current year.
Interest expense. Interest expense from continuing operations decreased $20.9
million, or 13.4%, to $134.6 million in 2019 from $155.5 million in 2018. The
decrease is due primarily to the redemption of our 2021 Notes in 2019 and
decreased revolving credit facility borrowings, partially offset by an increase
in interest related to our Supply and Offtake Agreements.

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Debt extinguishment costs. We recognized a net loss on debt extinguishment costs
from continuing operations of $2.2 million during 2019 related to the redemption
of the 2021 Notes in 2019, compared to a net loss on debt extinguishment costs
from continuing operations of $58.8 million in 2018 related to the redemption of
the 11.50% Secured Notes due January 15, 2021 ("2021 Secured Notes") in the
prior year.
Other Income. Other income from continuing operations decreased $7.4 million, or
68.5%, to $3.4 million in 2019 from $10.8 million in 2018. The decrease is
primarily due to the expiration of a transaction services agreement related to
the Superior Transaction as well as reductions in tolling agreement income.
Net loss from discontinued operations. There was no net loss from discontinued
operations in 2019 compared to net loss of $4.1 million in 2018. In November
2017, we completed the divestiture of Anchor. Prior to being reported as
discontinued operations, Anchor was included as its own reportable segment as
oilfield services. As a result, effective in the fourth quarter of 2017, we
classified our results of operations for all periods presented to reflect Anchor
as a discontinued operation. The prior year activity is related to the
finalization of the remaining post-closing adjustments related to the Anchor
Transaction. Please read Note 4 - "Discontinued Operations" in Part II, Item 8
"Financial Statements and Supplementary Data" for additional information.

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Year Ended December 31, 2018, Compared to Year Ended December 31, 2017
Sales. Sales from continuing operations decreased $266.3 million, or 7.1%, to
$3,497.5 million in 2018 from $3,763.8 million in 2017. Sales for each of our
principal product categories in these periods were as follows:
                                                           Year Ended December 31,
                                                  2018                 2017            % Change
                                              (In millions, except barrel and per barrel data)
Sales by segment:
Specialty products:
Lubricating oils                           $           600.1     $        584.2             2.7  %
Solvents                                               331.9              274.4            21.0  %
Waxes                                                  117.0              117.2            (0.2 )%
Packaged and synthetic specialty products
(1)                                                    256.8              260.7            (1.5 )%
Other (2)                                               76.6               63.9            19.9  %
Total specialty products                   $         1,382.4     $      1,300.4             6.3  %
Total specialty products sales volume (in
barrels)                                           8,742,000          9,407,000            (7.1 )%
Average specialty products sales price per
barrel                                     $          158.13     $       138.24            14.4  %

Fuel products:
Gasoline                                   $           683.1     $        948.5           (28.0 )%
Diesel                                                 910.0              877.9             3.7  %
Jet fuel                                               100.1              135.0           (25.9 )%
Asphalt, heavy fuel oils and other (3)                 421.9              502.0           (16.0 )%
Total fuel products                        $         2,115.1     $      2,463.4           (14.1 )%
Total fuel products sales volume (in
barrels)                                          26,701,000         38,803,000           (31.2 )%
Average fuel products sales price per
barrel                                     $           79.21     $        63.48            24.8  %

Total sales                                $         3,497.5     $      3,763.8            (7.1 )%
Total specialty and fuel products sales
volume (in barrels)                               35,443,000         48,210,000           (26.5 )%





(1)    Represents finished lubricants and chemicals specialty products at the
       Royal Purple, Bel-Ray and Calumet Packaging.


(2)    Represents (a) by-products, including fuels and asphalt, produced in

connection with the production of specialty products at the Princeton and

Cotton Valley refineries and Dickinson and Karns City facilities and (b)
       polyolester synthetic lubricants produced at the Missouri facility.


(3)    Represents asphalt, heavy fuel oils and other products produced in
       connection with the production of fuels at the Shreveport, Superior, San

Antonio and Great Falls refineries and crude oil sales from the Montana

and San Antonio refinery to third-party customers.

The components of the $82.0 million specialty products segment sales increase in
2018 were as follows:
                                                 Dollar Change
                                                 (In millions)
Sales price                                     $       174.0
Volume                                                  (92.0 )

Total specialty products segment sales increase $ 82.0

Specialty products segment sales for 2018 increased $82.0 million, or 6.3%,
primarily due to an increase in the average selling price per barrel, partially
offset by lower sales volume. The average selling price per barrel increased by
$19.89, or 14.4%, the impact of which resulted in a $174.0 million increase to
sales. The increase in the average selling price per barrel was driven by a
nearly $15.00 increase in the average cost of crude oil per barrel over the
period. Average selling prices per barrel increased in all our product lines
except for packaged and synthetic specialty products due to market conditions.
The decrease in sales volume is due to lower sales volume in all product lines
except for packaged and synthetic specialty products as a result of market
conditions and maintenance activities at our Shreveport and Princeton refineries
during the prior year.

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The components of the $348.3 million fuel products segment sales decrease in
2018 were as follows:
                                            Dollar Change
                                            (In millions)
Sales price                                $       408.7
Divestiture impact                                (669.1 )
Volume                                             (87.9 )

Total fuel products segment sales decrease $ (348.3 )

Fuel products segment sales for 2018 decreased $348.3 million, or 14.1%, due
primarily to lower sales volumes as a result of the Superior Transaction in
November 2017, partially offset by an increase in the average selling price per
barrel. The average selling price per barrel increased $15.73, or 24.8%,
resulting in a $408.7 million increase in sales. The increase in the average
selling price per barrel was driven by an over $11.00 increase in the average
cost of crude oil per barrel over the period.
Gross Profit. Gross profit from continuing operations decreased $61.5 million,
or 12.3%, to $436.7 million in 2018 from $498.2 million in 2017. Gross profit
for our specialty and fuel products segments was as follows:
                                                            Year Ended December 31,
                                                 2018                 2017              % Change
                                                 (Dollars in millions, except per barrel data)
Gross profit by segment:
Specialty products:
Gross profit                               $        291.1       $        319.2               (8.8 )%
Percentage of sales                                  21.1 %               24.5 %            (13.9 )%
Specialty products gross profit per barrel $        33.30       $        33.93               (1.9 )%
Fuel products:
Gross profit                               $        145.6       $        179.0              (18.7 )%
Percentage of sales                                   6.9 %                7.3 %             (5.5 )%
Fuel products gross profit per barrel      $         5.45       $         4.61               18.2  %
Total gross profit                         $        436.7       $        498.2              (12.3 )%
Percentage of sales                                  12.5 %               13.2 %             (5.3 )%

The components of the $28.1 million decrease in the specialty products segment gross profit for 2018 were as follows:

                                 Dollar Change
                                 (In millions)
2017 reported gross profit      $       319.2
Cost of materials                      (147.5 )
Volume                                  (37.1 )
LCM inventory adjustment                (14.3 )
Operating costs                          (3.5 )
LIFO inventory layer adjustment           0.3
Sales price                             174.0

2018 reported gross profit $ 291.1

The decrease in specialty products segment gross profit of $28.1 million
year-over-year was primarily due to increased cost of materials, decreased sales
volume, a $14.3 million unfavorable LCM inventory impact and increased operating
costs, partially offset by an increase in the average selling price per barrel
and a positive impact of $0.3 million related to the liquidation of LIFO
inventory layers. Sales price and cost of materials net, increased gross profit
by $26.5 million, as the average selling price per barrel increased $19.89,
which outpaced the increase in the average cost of materials. The $3.5 million
increase in operating costs were primarily due to increases in depreciation and
amortization, repairs and maintenance and incentive compensation costs,
partially offset by decreases in utility costs. The decrease in sales volume is
primarily due to lower sales volumes in all product lines except packaged and
synthetic specialty products as a result of market conditions and maintenance
activities at our Shreveport and Princeton refineries during the year.

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The components of the $33.4 million decrease in the fuel products segment gross profit for 2018 were as follows:

                                 Dollar Change
                                 (In millions)
2017 reported gross profit      $       179.0
Cost of materials                      (281.5 )
Divestiture impact                     (110.0 )
LCM inventory adjustment                (40.3 )
Volume                                  (17.5 )
Operating costs                          (8.8 )
LIFO inventory layer adjustment          (2.9 )
RINs                                     18.9
Sales price                             408.7
2018 reported gross profit      $       145.6


The decrease in fuel products segment gross profit of $33.4 million
year-over-year was primarily due to increased cost of materials, the sale of the
refinery in Superior, Wisconsin, a $40.3 million decrease in the favorable LCM
impact, decreased sales volume, and increased operating costs. Decreased sales
volumes and the reduced operating costs were the result of the Superior
Transaction in 2017. The decrease in RINs of $18.9 million primarily resulted
from a reduction of the RINs liability as a result of an approval from the EPA
of the small refinery exemption, decreased RINs market pricing and decreased
production.
Selling. Selling expenses from continuing operations decreased $7.5 million, or
11.4%, to $58.2 million in 2018 from $65.7 million in 2017. The decrease was due
primarily to a $4.9 million decrease in bad debt expense, a $4.7 million
decrease in depreciation and amortization, a $0.7 million decrease in
commissions and a $0.5 million decrease in subscription fees, partially offset
by a $2.9 million increase in labor and benefits and a $0.3 million increase in
professional fees.
General and administrative. General and administrative expenses from continuing
operations decreased $16.2 million, or 11.7%, to $122.5 million in 2018 from
$138.7 million in 2017. The decrease was due primarily to a $23.9 million
decrease in incentive compensation costs primarily driven by a reduction in
bonus costs and phantom unit amortization due to the decline in our unit price
during the year, a $0.9 million decrease in communication costs and a $0.6
million decrease in insurance costs, partially offset by a $5.0 million increase
in depreciation and amortization, a $3.8 million increase in information
technology costs and a $0.3 million increase in professional fees.
Taxes and other than income taxes. Taxes other than income taxes decreased $6.0
million, or 24.9%, to $18.1 million in 2018 from $24.1 million in 2017. The
decrease is due primarily to reductions in property, excise and other taxes
which were driven by the sale of the Superior Refinery in 2017.
Loss on impairment and disposal of assets. There were no asset impairment
charges in 2018 compared to $207.3 million in asset impairment charges in 2017.
In the prior year, we recorded impairment charges primarily related to
long-lived assets including property, plant and equipment on the Missouri
reporting unit of $59.2 million and on the San Antonio reporting unit of $147.0
million as a result of lowered projections of future cash flows. In addition, in
2017 an impairment charge of $0.7 million for goodwill related to the specialty
products segment was recorded based on updated financial projections on our
Dickinson reporting unit. For a further discussion regarding the factors
underlying these impairments, please read Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations - "Critical Accounting
Policies and Estimates" and Item 8. "Financial Statements and Supplementary
Data, Note 2."
Gain on sale of business, net. Gain on sale of business, net from continuing
operations decreased $231.2 million, or 98.0%, to a gain of $4.8 million in 2018
from a gain of $236.0 million in 2017. In the prior year, we completed the sale
of the Superior Refinery. We did not complete any business divestitures in 2018,
and the small gain recognized relates to finalizing the remaining post-close
working capital adjustments associated with the Superior transaction.
Other operating (income) expense. Other operating (income) expense from
continuing operations increased $20.7 million to income of $17.4 million in 2018
from expense of $3.3 million in 2017. This increase was primarily due to a
reduction of the RINs liability associated with the Superior Refinery, which was
sold in November 2017, as a result of an approval from the EPA of the small
refinery exemption for our fuel product refineries from the requirements of the
RFS for the 2017 calendar year, decreased RINs pricing and decreased
environmental reserves.
Interest expense. Interest expense from continuing operations decreased $27.6
million, or 15.1%, to $155.5 million in 2018 from $183.1 million in 2017. The
decrease is due primarily to the redemption of the 2021 Secured Notes in April
2018 and decreased revolving credit facility borrowings, partially offset by an
increase in interest related to the Supply and Offtake Agreements and decreased
capitalized interest.

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Debt extinguishment costs. We incurred debt extinguishment costs from continuing
operations of $58.8 million during 2018 primarily related to the redemption of
the 2021 Secured Notes which were redeemed in April 2018. There was no
comparable activity in 2017.
Loss from unconsolidated affiliates. Loss from unconsolidated affiliates from
continuing operations was $3.7 million in 2018, which primarily related to us
incurring expenses related to our investment in Biosynthetic Technologies, LLC
("Biosynthetic Technologies"). There was no comparable activity in 2017. Please
read Note 6 - "Investment in Unconsolidated Affiliates" in Part II, Item 8
"Financial Statements and Supplementary Data" for additional information.
Other income. Other income from continuing operations increased $7.5 million, or
227.3%, to $10.8 million in 2018 from $3.3 million in 2017. The increase is
primarily due to the receipt of favorable negotiated legal settlements.
Net loss from discontinued operations. Net loss from discontinued operations was
$4.1 million in 2018 compared to $72.5 million in 2017. In November 2017, we
completed the divestiture of Anchor. Prior to being reported as discontinued
operations, Anchor was included as its own reportable segment as oilfield
services. As a result, effective in the fourth quarter of 2017, we classified
our results of operations for all periods presented to reflect Anchor as a
discontinued operation. We recorded a net loss on the sale of Anchor of $62.6
million. Current year activity related to the finalization of the remaining
post-closing adjustments related to the Anchor Transaction. Please read Note 4 -
"Discontinued Operations" in Part II, Item 8 "Financial Statements and
Supplementary Data" for additional information.
Liquidity and Capital Resources
Our principal sources of cash have historically included cash flow from
operations, proceeds from public equity offerings, proceeds from notes offerings
and bank borrowings. Principal uses of cash have included capital expenditures,
acquisitions, distributions to our limited partners and general partner and debt
service. We may from time to time seek to retire or purchase our outstanding
debt through cash purchases and/or exchanges for equity securities, in open
market purchases, privately negotiated transactions, tender offers or otherwise.
Such repurchases or exchanges, if any, will depend on prevailing market
conditions, our liquidity requirements, contractual restrictions and other
factors. The amounts involved may be material. In addition, in May 2018 The
Heritage Group disclosed in a Schedule 13D filing that it is considering various
alternatives with respect to its investment in us, including potential
consolidation, acquisitions or sales of our assets or common units, as well as
potential changes to our capital structure. The Heritage Group also disclosed
that it may make formal proposals to us, holders of our common units or other
third parties regarding such strategic alternatives.
In general, we expect that our short-term liquidity needs, including debt
service, working capital, replacement and environmental capital expenditures and
capital expenditures related to internal growth projects, will be met primarily
through projected cash flow from operations, borrowings under our revolving
credit facility and asset sales.
In 2019, we redeemed all of the 2021 Notes with the net proceeds from the
issuance of the 2025 Notes, together with borrowings under the Company's
revolving credit facility and cash on hand. In conjunction with the redemption,
the Company incurred debt extinguishment costs of $2.2 million, net. Also in
2019, we sold our interest in Biosyn to The Heritage Group, a related party, for
total proceeds of $5.0 million. Lastly, in 2019, we received $59.1 million in
cash for the San Antonio Transaction in 2019.
We expect to fund planned capital expenditures in 2020 of approximately $80
million to $90 million primarily with cash on hand and cash flows from
operations. Future internal growth projects or acquisitions may require
expenditures in excess of our then-current cash flow from operations and
borrowing availability under our revolving credit facility and may require us to
issue debt or equity securities in public or private offerings or incur
additional borrowings under bank credit facilities to meet those costs.
The borrowing base on our revolving credit facility increased from approximately
$330.8 million as of December 31, 2018, to approximately $401.9 million at
December 31, 2019, resulting in a corresponding increase in our borrowing
availability from approximately $295.7 million at December 31, 2018, to
approximately $359.4 million at December 31, 2019. Total liquidity, consisting
of unrestricted cash and available funds under our revolving credit facility,
decreased from $451.4 million at December 31, 2018 to $378.5 million at
December 31, 2019.
Cash Flows from Operating, Investing and Financing Activities
We believe that we have sufficient liquid assets, cash flow from operations,
borrowing capacity and adequate access to capital markets to meet our financial
commitments, debt service obligations and anticipated capital expenditures. We
continue to seek to lower our operating costs, selling expenses and general and
administrative expenses as a means to further improve our cash flow from
operations with the objective of having our cash flow from operations support
all of our capital expenditures and interest payments. However, we are subject
to business and operational risks that could materially adversely affect our
cash flows. A material decrease in our cash flow from operations including a
significant, sudden decrease in crude oil prices would likely produce a
corollary material adverse effect on our borrowing capacity under our revolving
credit facility and potentially our ability to comply with the covenants under
our revolving credit facility. A significant, sudden increase in crude oil
prices, if sustained, would

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likely result in increased working capital requirements which would be funded by
borrowings under our revolving credit facility. In addition, our cash flow from
operations may be impacted by the timing of settlement of our derivative
activities. Gains and losses from derivative instruments that do not qualify as
cash flow hedges are recorded in unrealized gain (loss) on derivative
instruments until settlement and will impact operating cash flow in the period
settled.
The following table summarizes our primary sources and uses of cash in each of
the most recent three years:
                                                       Year Ended December 31,
                                                2019             2018             2017
                                                            (In millions)
Net Cash provided by (used in) operating
activities                                 $      191.9     $       75.2     $      (26.5 )
Net Cash provided by investing activities          14.5              8.3    

453.4

Net Cash provided by (used in) financing
activities                                       (343.0 )         (442.1 )  

83.2

Net increase (decrease) in cash, cash
equivalents and restricted cash            $     (136.6 )   $     (358.6 )

$ 510.1

Operating Activities. Operating activities provided cash of $191.9 million
during 2019 compared to providing cash of $75.2 million during 2018. The
increase in cash provided by operating activities is due to a reduction in
working capital requirements of $136.5 million, lower year-over-year cash paid
for interest of $36.8 million, and decreased operating losses, partially offset
by a $27.9 million decrease in operating cash flow other than working capital
adjustments and other adjustment items. The decrease in working capital
requirements was primarily driven by the divestment of the San Antonio Refinery,
and its associated working capital. The decrease in operating cash flow for
other than working capital adjustments was primarily driven by a favorable LCM /
LIFO inventory adjustment in the current year, which was unfavorable in the
prior year.
Operating activities provided cash of $75.2 million during 2018 compared to a
net use of cash of $26.5 million during 2017. The increase in cash provided by
operating activities is primarily due to a reduction working capital
requirements of $44.8 million, a $54.1 million increase in operating cash flow
other than working capital adjustments and decreased net cash used in
discontinued operations of $22.5 million, offset by an increase in net loss from
continuing operations of $19.7 million. Working capital decreases were primarily
driven by the sale of the Superior Refinery in November 2017 and decreased
accounts receivable due to timing of payments as a result of the stabilization
of our ERP system, partially offset by decreased accounts payable due to timing
of payments as a result of the stabilization of our ERP system, decreased
accrued interest receivable due to timing of payments, increased turnaround
activity in the 2018 fiscal year and a decrease in other liabilities
predominately driven by a reduction in our RINs liability. The increase in
operating cash flow other than working capital adjustments was primarily driven
by reductions in depreciation and amortization, an increase in unrealized gains
on derivatives and a decrease in asset impairment charges, partially offset by
debt extinguishment costs, a decrease in the gain on sale of business and an
unfavorable change in the LCM inventory adjustment.
Investing Activities. Cash provided by investing activities increased to $14.5
million in 2019 compared to cash provided of $8.3 million in 2018. The increase
is primarily due to increased proceeds on sale of business of $10.3 million in
2019 vs. 2018, as well as increased proceeds from the sale of property, plant
and equipment of $3.3 million in 2019 vs. 2018.
Cash provided by investing activities decreased to $8.3 million in 2018 compared
to cash provided of $453.4 million in 2017. The decrease is primarily due to a
reduction in proceeds from the Superior Transaction of $439.7 million, a
reduction in cash provided by discontinued operations as a result of proceeds
from the Anchor Transaction of $31.8 million and expenditures of $3.8 million
related to the acquisition of Biosynthetic Technologies in 2018, partially
offset by $9.9 million of cash received for the sale of PACNIL and a decrease in
capital expenditures of $20.2 million in 2018.
Financing Activities. Financing activities used cash of $343.0 million during
2019 compared to using cash of $442.1 million during 2018. The decrease is
primarily due to the cash proceeds of the 2025 Notes of $550.0 million, off-set
by the $498.5 million net effect of the redemption of $898.5 million in
aggregate principal amount of the 2021 Notes in 2019 and $400.0 million in
aggregate principal amount of the 2021 Secured Notes 2018, as well as the
absence of the $46.6 million cash payment for debt extinguishment costs made
2018 in conjunction with the retirement of the 2021 Secured Notes.
Financing activities used cash of $442.1 million during 2018 compared to
providing cash of $83.2 million during 2017. This decrease is primarily due to
the payment of $446.6 million for the redemption of the 2021 Secured Notes
(including debt extinguishment costs) in 2018, decreased net proceeds from the
Supply and Offtake Agreements of $93.1 million and increased debt issuance costs
of $0.8 million, partially offset by decreased payments on revolving credit
facility borrowings of $9.8 million, increased net proceeds from other financing
obligations of $4.5 million, and decreased payments on capital lease obligations
of $0.9 million.

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Investment in Unconsolidated Affiliate
In connection with the Anchor Transaction in November 2017, we received an
equity investment in FHC as part of the total consideration for Anchor. FHC
provides oilfield services and products to customers globally. Our investment in
FHC is a non-marketable equity security without a readily determinable fair
value. We record this investment using a measurement alternative which values
the security at cost less impairment, if any, plus or minus changes resulting
from qualifying observable price changes with a same or similar security from
the same issuer.
During the year ended December 31, 2019, we determined the fair value of our
investment in FHC was less than its December 31, 2018 carrying value of $25.4
million after evaluating indicators of impairment and valuing the investment
using projected future cash flows and other Level 3 inputs. Utilizing an income
approach, value indications were developed by discounting expected cash flows to
their present value at a rate of return that incorporates the risk-free rate for
the use of funds, the expected rate of inflation and risks associated with the
company. As a result, we recorded an impairment charge of $25.4 million in loss
on impairment and disposal of assets in the consolidated statements of
operations for the period ended December 31, 2019.
Supply and Offtake Agreements
On March 31, 2017, we entered into several agreements with Macquarie to support
the operations of the Great Falls refinery. On July 27, 2017, we amended the
Great Falls Supply and Offtake Agreements to provide Macquarie the option to
terminate the Great Falls Supply and Offtake Agreements effective nine months
after the end of the applicable calendar quarter in which Macquarie elects to
terminate and we have the option to terminate with ninety days' notice at any
time. On May 9, 2019, we entered into an amendment to the Great Falls Supply and
Offtake Agreements to, among other things, extend the Expiration Date (as
defined in the Great Falls Supply and Offtake Agreements) from September 30,
2019 to June 30, 2023.
On June 19, 2017, we entered into several agreements with Macquarie to support
the operations of the Shreveport refinery. Since inception the Shreveport Supply
and Offtake Agreements were set to expire on June 30, 2020; however, Macquarie
has the option to terminate the Shreveport Supply and Offtake Agreements
effective nine months after the end of the applicable calendar quarter in which
Macquarie elects to terminate and we have the option to terminate with ninety
days' notice at any time. On May 9, 2019, we entered into an amendment to the
Shreveport Supply and Offtake Agreements to, among other things, extend the
Expiration Date (as defined in the Shreveport Supply and Offtake Agreements)
from June 30, 2020 to June 30, 2023.
The Supply and Offtake Agreements are subject to minimum and maximum inventory
levels. The agreements also provide for the lease to Macquarie of crude oil and
certain refined product storage tanks located at the Great Falls and Shreveport
refineries. Following expiration or termination of the agreements, Macquarie has
the option to require us to purchase the crude oil and refined product
inventories then owned by Macquarie and located at the leased storage tanks at
then current market prices. Our obligations under the agreements are secured by
the inventory included in these agreements.
Capital Expenditures
Our property, plant and equipment capital expenditure requirements consist of
capital improvement expenditures, replacement capital expenditures,
environmental capital expenditures and turnaround capital expenditures. Capital
improvement expenditures include expenditures to acquire assets to grow our
business, to expand existing facilities, such as projects that increase
operating capacity, or to reduce operating costs. Replacement capital
expenditures replace worn out or obsolete equipment or parts. Environmental
capital expenditures include asset additions to meet or exceed environmental and
operating regulations. Turnaround capital expenditures represent capitalized
costs associated with our periodic major maintenance and repairs.
The following table sets forth our capital improvement expenditures, replacement
capital expenditures, environmental capital expenditures and turnaround capital
expenditures in each of the periods shown (including capitalized interest):
                                         Year Ended December 31,
                                         2019          2018      2017
                                              (In millions)

Capital improvement expenditures $ 15.1 $ 19.7 $ 23.4 Replacement capital expenditures 34.9

            16.9      30.5
Environmental capital expenditures      15.1             7.5      11.5
Turnaround capital expenditures         24.1            30.8      14.5
Total                              $    89.2          $ 74.9    $ 79.9


The increase in capital improvement, replacement and environmental capital
expenditures from 2018 to 2019 was primarily due to completion of certain 2018
forecasted projects that were delayed until 2019. The decrease in capital
expenditures from 2017 to 2018 was primarily driven by our allocation of
additional resources to turnaround activities and moving certain capital
projects forecasted for 2018 to 2019 based on timing and priority of existing
projects.

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2020 Capital Spending Forecast
We are forecasting total capital expenditures of approximately $80 million to
$90 million in 2020. We anticipate that capital expenditure requirements will be
provided primarily through cash flow from operations, cash on hand, available
borrowings under our revolving credit facility and by accessing capital markets
as necessary. If future capital expenditures require expenditures in excess of
our then-current cash flow from operations and borrowing availability under our
revolving credit facility, we may be required to issue debt or equity securities
in public or private offerings or incur additional borrowings under bank credit
facilities to meet those costs.
Debt and Credit Facilities
As of December 31, 2019, our primary debt and credit instruments consisted of:
•      $600.0 million senior secured revolving credit facility maturing in
       February 2023, subject to borrowing base limitations, with a maximum
       letter of credit sub-limit equal to $300.0 million, which amount may be

increased to 90% of revolver commitments in effect with the consent of the

Agent (as defined in the Credit Agreement) ("revolving credit facility");

• $350.0 million of 7.625% senior notes due 2022 ("2022 Notes");

• $325.0 million of 7.75% senior notes due 2023 ("2023 Notes"); and

• $550.0 million of 11.00% senior notes due 2025 ("2025 Notes").

In 2019, we redeemed $900 million in aggregate principal amount of the 2021
Notes with the net proceeds from the issuance of the 2025 Notes, together with
borrowings under our revolving credit facility and cash on hand. In conjunction
with the redemption, we incurred debt extinguishment costs, net of $2.2 million.
We were in compliance with all covenants under our debt instruments in place as
of December 31, 2019, and believe we have adequate liquidity to conduct our
business.
Short-Term Liquidity
As of December 31, 2019, our principal sources of short-term liquidity were (i)
approximately $359.4 million of availability under our revolving credit
facility, (ii) inventory financing agreements related to our Great Falls and
Shreveport refineries and (iii) $19.1 million of cash on hand. Borrowings under
our revolving credit facility can be used for, among other things, working
capital, capital expenditures, and other lawful partnership purposes including
acquisitions.
On February 23, 2018, we entered into the Third Amended and Restated Credit
Agreement (the "Credit Agreement"), which provided for our $600.0 million senior
secured revolving credit facility maturing in February 2023. The revolving
credit facility is subject to a borrowing base limitation, with a maximum letter
of credit sub-limit of $300.0 million, which amount may be increased to 90% of
revolver commitments in effect with the consent of the Agent (as defined in the
Credit Agreement).
On September 4, 2019, we entered into the First Amendment to the Credit
Agreement. The amendment expands the borrowing base by $99.6 million on the
Effective Date of October 11, 2019, by adding the fixed assets of our Great
Falls, MT refinery as collateral to the borrowing base. The $99.6 million
expansion amortizes to zero on a straight-line basis over ten quarters starting
in the first quarter of 2020. Additionally, while the fixed assets of the Great
Falls, MT refinery are included in the borrowing base, the first amendment
provides for a 25 basis points increase in the applicable margin for loans, as
well as increases the minimum availability under the revolving credit facility
required for our Company to be able to perform certain actions, including to
make restricted payments of other distributions, sell or dispose of certain
assets, make acquisitions or investments, or prepay other indebtedness. Among
other conditions precedent that were required to be satisfied before the
Effective Date, we were required to consummate an offering of at least $450.0
million aggregate principal amount of senior unsecured notes. The conditions
precedent were satisfied on October 11, 2019.
Borrowings under the revolving credit facility are limited to a borrowing base
that is determined based on advance rates of percentages of Eligible Accounts
and Eligible Inventory (each as defined in the Credit Agreement). As such, the
borrowing base can fluctuate based on changes in selling prices of our products
and our current material costs, primarily the cost of crude oil. The borrowing
base is calculated in accordance with the terms of the Credit Agreement and
agreed upon by us and the Agent (as defined in the revolving credit facility
agreement). On December 31, 2019, we had availability on our revolving credit
facility of approximately $359.4 million, based on a borrowing base of
approximately $401.9 million, $42.5 million in outstanding standby letters of
credit and no outstanding borrowings. The borrowing base cannot exceed the
revolving credit facility commitments then in effect. The lender group under our
revolving credit facility is comprised of a syndicate of nine lenders with total
commitments of $600.0 million. The lenders under our revolving credit facility
have a first priority lien on our accounts receivable, certain inventory, the
fixed assets of the Great Falls, MT refinery and substantially all of our cash.
Amounts outstanding under our revolving credit facility fluctuate materially
during each quarter mainly due to cash flow from operations, normal changes in
working capital, capital expenditures and debt service costs. Specifically, the
amount borrowed

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under our revolving credit facility is typically at its highest level after we
pay for the majority of our crude oil supply on the 20th day of every month per
standard industry terms. The maximum revolving credit facility borrowings during
the year ended December 31, 2019, were $125.0 million. Our availability on our
revolving credit facility during the peak borrowing days of the year has been
ample to support our operations and service upcoming requirements. During the
year ended December 31, 2019, availability for additional borrowings under our
revolving credit facility was $228.7 million at its lowest point.
The revolving credit facility currently bears interest at a rate equal to prime
plus a basis points margin or LIBOR plus a basis points margin, at our option
which margin ranges between 50 basis points and 100 basis points for base rate
loans and 150 basis points to 200 basis points for LIBOR loans, depending on our
average availability for additional borrowings for the preceding quarter. The
margin applicable to loans under the FILO tranche of the revolving credit
facility range from 150 to 200 basis points for base rate FILO loans and 250 to
300 basis points for LIBOR based FILO loans. The agreement provides for a 25
basis point reduction in the applicable margin rates beginning in the quarter
after our Leverage Ratio (as defined in the Credit Agreement) is less than 5.5
to 1.0. We have met this test consistently since the fiscal quarter ended June
30, 2019. As a result, our applicable margin for the quarter ended and including
December 31, 2019, was 50 basis points for prime, 150 basis points for LIBOR,
150 basis points for prime rate based FILO loans and 250 basis points for LIBOR
based FILO loans; however, the margin can fluctuate quarterly based on our
average availability for additional borrowings under the revolving credit
facility in the preceding calendar quarter. Letters of credit issued under the
revolving credit facility accrue fees at a rate equal to the margin (measured in
basis points) applicable to LIBOR revolver loans.
In addition to paying interest on outstanding borrowings under the revolving
credit facility, we are required to pay a commitment fee to the lenders under
the revolving credit facility with respect to the unutilized commitments
thereunder at a rate equal to either 0.250% or 0.375% per annum depending on the
average daily available unused borrowing capacity for the preceding month. We
also pay a customary letter of credit fee, including a fronting fee of
0.125% per annum of the stated amount of each outstanding letter of credit, and
customary agency fees.
Our revolving credit facility contains various covenants that limit, among other
things, our ability to: incur indebtedness; grant liens; dispose of certain
assets; make certain acquisitions and investments; redeem or prepay other debt
or make other restricted payments such as distributions to unitholders; enter
into transactions with affiliates; and enter into a merger, consolidation or
sale of assets. The revolving credit facility generally permits us to make cash
distributions to our unitholders as long as, after giving effect to such a cash
distribution, we have availability under the revolving credit facility totaling
at least equal to the sum of the amount of FILO loans outstanding plus the
greater of (i) 15% of the Aggregate Borrowing Base (as defined in the revolving
credit facility agreement) then in effect, or 25% while the Great Falls, MT
refinery is included in the borrowing base, and (ii) $60.0 million (which amount
is subject to increase in proportion to revolving commitment increases) plus the
amount of FILO loans outstanding. Further, the revolving credit facility
contains one springing financial covenant which provides that only if our
availability under the revolving credit facility falls below the greater of
(a) 10% of the Borrowing Base (as defined in the credit agreement) then in
effect, or 15% while the Great Falls, MT refinery is included in the borrowing
base, and (b) $35.0 million (which amount is subject to increase in in
proportion to revolving commitment increases) plus the amount of FILO loans
outstanding, we will be required to maintain as of the end of each fiscal
quarter a Fixed Charge Coverage Ratio (as defined in the revolving credit
facility agreement) of at least 1.0 to 1.0.
If an event of default exists under the revolving credit facility, the lenders
will be able to accelerate the maturity of the revolving credit facility and
exercise other rights and remedies. An event of default includes, among other
things, the nonpayment of principal, interest, fees or other amounts; failure of
any representation or warranty to be true and correct when made or confirmed;
failure to perform or observe covenants in the revolving credit facility or
other loan documents, subject, in limited circumstances, to certain grace
periods; cross-defaults in other indebtedness if the effect of such default is
to cause, or permit the holders of such indebtedness to cause, the acceleration
of such indebtedness under any material agreement; bankruptcy or insolvency
events; monetary judgment defaults; asserted invalidity of the loan
documentation; and a change of control (as defined in the Credit Agreement).
As of December 31, 2019, we were in compliance with all covenants under the
revolving credit facility.
For additional information regarding our revolving credit facility, please read
Note 10 "Long-Term Debt" in Part II, Item 8 "Financial Statements and
Supplementary Data."
Long-Term Financing
In addition to our principal sources of short-term liquidity listed above,
subject to market conditions, we may meet our cash requirements (other than
distributions of Available Cash (as defined in our partnership agreement) to our
common unitholders) through the issuance of long-term notes or additional common
units.
From time to time, we issue long-term debt securities referred to as our senior
notes. All of our outstanding senior notes are unsecured obligations that rank
equally with all of our other senior debt obligations to the extent they are
unsecured. As of December 31, 2019, we had $350.0 million in 2022 Notes, $325.0
million in 2023 Notes and $550.0 million in 2025 Notes

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outstanding. On December 31, 2018, we had $900.0 million in 2021 Notes, $350.0
million in 2022 Notes and $325.0 million in 2023 Notes outstanding. For more
information regarding our senior notes, please read Note 10 - "Long-Term Debt"
under Part II, Item 8 "Financial Statements and Supplementary Data" in this
Annual Report.
The indentures governing our senior notes contain covenants that, among other
things, restrict our ability and the ability of certain of our subsidiaries to:
(i) sell assets; (ii) pay distributions on or redeem or repurchase our common
units or redeem or repurchase our subordinated debt; (iii) make investments;
(iv) incur or guarantee additional indebtedness or issue preferred units; (v)
create or incur certain liens; (vi) enter into agreements that restrict
distributions or other payments from our restricted subsidiaries to us; (vii)
consolidate, merge or transfer all or substantially all of our assets; (viii)
engage in transactions with affiliates; and (ix) create unrestricted
subsidiaries. These covenants are subject to important exceptions and
qualifications. At any time when the senior notes are rated investment grade by
either Moody's Investors Service, Inc. ("Moody's") or S&P's Global Ratings
("S&P") and no Default or Event of Default, each as defined in the indentures
governing the senior notes, has occurred and is continuing, many of these
covenants will be suspended. As of December 31, 2019, our Fixed Charge Coverage
Ratio (as defined in the indentures governing the 2022, 2023 and 2025 Notes) was
2.3.
Upon the occurrence of certain change of control events, each holder of the
senior notes will have the right to require that we repurchase all or a portion
of such holder's senior notes in cash at a purchase price equal to 101% of the
principal amount thereof, plus any accrued and unpaid interest to the date of
repurchase.
To date, our debt balances have not adversely affected our operations, our
ability to repay or refinance our indebtedness. Based on our historical record,
we believe that our capital structure will continue to allow us to achieve our
business objectives.
We are subject, however, to conditions in the equity and debt markets for our
common units and long-term senior notes, and there can be no assurance we will
be able or willing to access the public or private markets for our common units
and/or senior notes in the future. If we are unable or unwilling to issue
additional common units, we may be required to either restrict capital
expenditures and/or potential future acquisitions or pursue debt financing
alternatives, some of which could involve higher costs or negatively affect our
credit ratings. Furthermore, our ability to access the public and private debt
markets is affected by our credit ratings. For additional information regarding
our credit ratings, see "Credit Ratings" below.
For additional information regarding our senior notes, please read Note 10
"Long-Term Debt" in Part II, Item 8 "Financial Statements and Supplementary
Data."
Master Derivative Contracts and Collateral Trust Agreement
Under our credit support arrangements, our payment obligations under all of our
master derivatives contracts for commodity hedging generally are secured by a
first priority lien on our and our subsidiaries' real property, plant and
equipment, fixtures, intellectual property, certain financial assets, certain
investment property, commercial tort claims, chattel paper, documents,
instruments and proceeds of the foregoing (including proceeds of hedge
arrangements). We had no additional letters of credit or cash margin posted with
any hedging counterparty as of December 31, 2019. Our master derivatives
contracts and Collateral Trust Agreement (as defined below) continue to impose a
number of covenant limitations on our operating and financing activities,
including limitations on liens on collateral, limitations on dispositions of
collateral and collateral maintenance and insurance requirements. For financial
reporting purposes, we do not offset the collateral provided to a counterparty
against the fair value of our obligation to that counterparty. Any outstanding
collateral is released to us upon settlement of the related derivative
instrument liability.
Our various hedging agreements contain language allowing our hedge
counterparties to request additional collateral if a specified credit support
threshold is exceeded. However, these credit support thresholds are set at
levels that would require a substantial increase in hedge exposure to require us
to post additional collateral. As a result, we do not expect further increases
in fuel products crack spreads or interest rates to significantly impact our
liquidity due to requirements to post additional collateral.
Additionally, we have a collateral trust agreement (the "Collateral Trust
Agreement") which governs how secured hedging counterparties share collateral
pledged as security for the payment obligations owed by us to the secured
hedging counterparties under their respective master derivatives contracts. The
Collateral Trust Agreement limits to $150.0 million the extent to which forward
purchase contracts for physical commodities are covered by, and secured under,
the Collateral Trust Agreement and the Parity Lien Security Documents (as
defined in the Collateral Trust Agreement). There is no such limit on
financially settled derivative instruments used for commodity hedging. Subject
to certain conditions set forth in the Collateral Trust Agreement, we have the
ability to add secured hedging counterparties from time to time.
Credit Ratings
In May 2018, our senior unsecured notes ratings were upgraded by S&P to B- from
CCC+, while the Company rating of B- and stable outlook remained unchanged from
the prior year. In September 2019, concurrent with the issuance of our 2025
Notes, S&P revised the rating outlook to positive. In July 2019, Moody's
upgraded our Company rating from Caa1 to B3, and our senior

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unsecured bond rating from Caa2 to Caa1, with a stable outlook. In October 2018,
Fitch initiated coverage and assigned a rating of B- for the Company and our
senior unsecured notes, bringing it in line with S&P's current ratings.
Equity Transactions
In April 2016, the board of directors of our general partner suspended payment
of our quarterly cash distribution. The board of directors of our general
partner will continue to evaluate our ability to reinstate the distribution.
Seasonality Impacts on Liquidity
The operating results for the fuel products segment, including the selling
prices of asphalt products we produce, generally follow seasonal demand trends.
Asphalt demand is generally lower in the first and fourth quarters of the year,
as compared to the second and third quarters, due to the seasonality of the road
construction and roofing industries we supply. Demand for gasoline and diesel is
generally higher during the summer months than during the winter months due to
seasonal increases in highway traffic. In addition, our natural gas costs can be
higher during the winter months, as demand for natural gas as a heating fuel
increases during the winter. As a result, our operating results for the first
and fourth calendar quarters may be lower than those for the second and third
calendar quarters of each year due to seasonality related to these and other
products that we produce and sell.
Contractual Obligations and Commercial Commitments
A summary of our total contractual cash obligations as of December 31, 2019, at
current maturities is as follows:
                                                                   Payments Due by Period
                                                     Less Than        1-3          3-5         More Than
                                        Total         1 Year         Years        Years         5 Years
                                                                 (In millions)
Operating Activities:
Interest on long-term debt at
contractual rates and maturities (1) $   496.9     $     116.2     $  216.1     $  134.3     $      30.3
Operating lease obligations (2)          102.6            65.0         23.5         10.8             3.3
Letters of credit (3)                     42.5            42.5            -            -               -
Purchase commitments (4)                 315.1           170.8         60.2         42.1            42.0
Throughput contract (5)                   27.7             2.6          7.8          7.9             9.4
Employment agreements (6)                  1.6             1.0          0.6            -               -
Financing Activities:
Obligations under inventory
financing agreements                     134.3           134.3            -            -               -
Finance lease obligations                  2.7             0.3          0.6          0.8             1.0
Long-term debt obligations,
excluding finance lease obligations    1,228.8             1.5        352.3        325.0           550.0
Total obligations                    $ 2,352.2     $     534.2     $  661.1     $  520.9     $     636.0

(1) Interest on long-term debt at contractual rates and maturities relates

primarily to interest on our senior notes, revolving credit facility

interest and fees, and interest on our finance lease obligations, which

excludes the adjustment for the interest rate swap agreement.

(2) We have various operating leases primarily for railcars, the use of land,

storage tanks, compressor stations, equipment, precious metals and office

facilities that extend through July 2055.

(3) Letters of credit primarily supporting crude oil and feedstock purchases.

(4) Purchase commitments consist primarily of obligations to purchase fixed

volumes of crude oil, other feedstocks and finished products for resale

       from various suppliers based on current market prices at the time of
       delivery.


(5)    Throughput commitments consist primarily of obligations to transport a
       minimum volume of crude oil through a pipeline.


(6)    Certain employment agreements may be terminated under certain

circumstances or at certain dates prior to expiration. We expect those

agreements will be renewed or replaced with similar agreements upon their

expiration. Amounts due under those agreements assume they are not

terminated prior to their expiration.

For additional information regarding our expected capital and turnaround
expenditures, for which we are not contractually committed, refer to "Capital
Expenditures" above.
Off-Balance Sheet Arrangements
We did not enter into any material off-balance sheet transactions during fiscal
year 2019.

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Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements for the years ended
December 31, 2019, 2018 and 2017. These consolidated financial statements have
been prepared in accordance with GAAP. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets and liabilities, revenues and expenses, and related disclosure
of contingent assets and liabilities at the date of our financial statements.
Actual results may differ from these estimates under different assumptions and
conditions given the level of complexity and subjectivity involved in forming
these estimates.
We consider an accounting estimate to be critical if:
•      The accounting estimate requires us to make assumptions about matters that
       are highly uncertain at the time the accounting estimate is made; and


•      We reasonably could have used different estimates in the current period,

or changes in these estimates are reasonably likely to occur from period

to period as new information becomes available, and a change in these

estimates would have a material impact on our financial condition or

results from operations.

We continually evaluate the estimates and judgments used to prepare the
consolidated financial statements. Our estimates are based on historical
experience, information from third-party professionals and various other
assumptions that we believe to be reasonable under the circumstances. There are
other items within our consolidated financial statements that require
estimation, but are not deemed critical based on the above criteria. Changes in
estimates used in these and other items could have a material impact on our
consolidated financial statements in any one period.
Our significant accounting policies, which may be affected by our estimates and
assumptions, are more fully described in Note 2 "Summary of Significant
Accounting Policies" in Part II, Item 8 "Financial Statements and Supplementary
Data." We believe that the following are the more critical judgment areas in the
application of our accounting policies that currently affect our financial
condition and results of operations.
Valuation of Definite Long-Lived Assets
Property, plant and equipment and intangible assets with finite lives are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of the asset may not be recoverable. If the estimated
undiscounted future cash flows related to the asset are less than the carrying
value, we recognize a loss equal to the difference between the carrying value
and the estimated fair value, usually determined by the estimated discounted
future cash flows of the asset. When a decision has been made to dispose of
property, plant and equipment prior to the end of the previously estimated
useful life, depreciation estimates are revised to reflect the use of the asset
over the shortened estimated useful life.
Significant Estimates and Assumptions
Estimated undiscounted future cash flows are used for the purpose of testing our
definite long-lived assets for impairment. Fair values calculated for the
purpose of measuring impairments on definite long-lived assets are estimated
using the expected present value of future cash flows method and comparative
market prices when appropriate. Significant judgment is involved in estimating
undiscounted future cash flows and performing these fair value estimates since
the results are based on forecasted assumptions. Significant assumptions
include:
•      Future margins on products produced and sold. Our estimates of future

product margins are based on our analysis of various supply and demand

factors, which include, among other things, industry-wide capacity, our

planned utilization rate, end-user demand, capital expenditures and

economic conditions. Such estimates are consistent with those used in our

planning and capital investment reviews.

• Future capital requirements. These are based on authorized spending and

internal forecasts.

• Discount rate commensurate with the risks involved. We apply a discount

rate to our cash flows based on a variety of factors, including market and

economic conditions, operational risk, regulatory risk and political risk.

       This discount rate is also compared to recent observable market
       transactions, if possible. A higher discount rate decreases the net
       present value of cash flows.


We base our estimated undiscounted future cash flows and fair value estimates on
projected financial information which we believe to be reasonable. However,
actual results may differ from these projections.
2017 Impairment Charge
During the fourth quarter of 2017, we identified impairment indicators that
suggested the carrying values of long-lived assets at the San Antonio and
Missouri asset groups within the fuel products and specialty products segments,
respectively, may not be recoverable. The primary impairment indicators included
projections of future cash flows and the associated impact on the long-range
strategic plan forecasts, lower than expected cash flows attributed to these
asset groups and poor local market conditions. Undiscounted cash flow tests
performed for these asset groups indicated that the long-lived assets were not
recoverable. The fair value of the asset groups was established using a
discounted cash flow method which utilized Level 3 inputs in the fair value
hierarchy. The principal parameters used to establish fair values included
estimates of future margins on products produced and sold, future commodity
prices, future capital expenditures and discount rates. As a result of the
long-lived asset impairment assessment performed, we recorded property, plant
and equipment impairment charges on our San Antonio asset group of $147.0
million and on our Missouri asset group of $59.2 million.
The discount rates used for our San Antonio and Missouri asset groups were 14.5%
and 12.5%, respectively, per year. Revenue growth rates assumed for our San
Antonio asset group was 42.2% for 2018 and 2.0% to 6.0% for 2019 and beyond.
Revenue growth rates assumed for our Missouri asset group was 12.6% for 2018 and
2.0% to 6.0% for 2019 and beyond.
Sensitivity Analysis
An estimate of the sensitivity to net income resulting from impairment
calculations is not practicable, given the numerous assumptions (e.g., pricing,
volumes and discount rates, etc.) that can materially affect our estimates. That
is, unfavorable adjustments to some of the above listed assumptions may be
offset by favorable adjustments in other assumptions.
Valuation of Goodwill
We review goodwill for impairment annually on October 1 and whenever events or
changes in circumstances indicate its carrying value may not be recoverable in
accordance with ASC 350, Intangibles - Goodwill and Other (Topic 350): Testing
Goodwill for Impairment ("ASU 2011-08"). Under ASU 2011-08, an entity has the
option to first assess qualitative factors to determine whether the existence of
events or circumstances leads to a determination that it is more likely than not
that the fair value of a reporting unit is less than its carrying amount. If,
after assessing the totality of events or circumstances, an entity determines it
is not more likely than not that the fair value of a reporting unit is less than
its carrying amount, then performing the impairment test is unnecessary.
In assessing the qualitative factors to determine whether it is more likely than
not that the fair value of a reporting unit is less than its carrying amount, we
assess relevant events and circumstances that may impact the fair value and the
carrying amount of the reporting unit. The identification of relevant events and
circumstances and how these may impact a reporting unit's fair value or carrying
amount involve significant judgment and assumptions. The judgment and
assumptions include the identification of macroeconomic conditions, industry and
market considerations, cost factors, overall financial performance and Company
specific events and the assessment on whether each relevant factor will impact
the impairment test positively or negatively and the magnitude of any such
impact.
If our qualitative assessment concludes that it is probable that an impairment
exists or we skip the qualitative assessment, then we need to perform a
quantitative assessment. In the first step of the quantitative assessment, our
assets and liabilities, including existing goodwill and other intangible assets,
are assigned to the identified reporting units to determine the carrying value
of the reporting units. If the carrying value of a reporting unit is in excess
of its fair value, an impairment may exist, and we must perform an impairment
analysis, in which the implied fair value of the goodwill is compared to its
carrying value to determine the impairment charge, if any.
When performing the quantitative assessment, as required in the impairment test,
the fair value of the reporting unit is determined using the income approach.
The income approach focuses on the income-producing capability of an asset,
measuring the current value of the asset by calculating the present value of its
future economic benefits such as cash earnings, cost savings, corporate tax
structure and product offerings. Value indications are developed by discounting
expected cash flows to their present value at a rate of return that incorporates
the risk-free rate for the use of funds, the expected rate of inflation, and
risks associated with the reporting unit. If the carrying value of a reporting
unit is in excess of its fair value, an impairment would be recognized in an
amount equal to the excess that the carrying value exceeded the estimated fair
value, limited to the carrying value of goodwill.
Inputs used to estimate the fair value of the Company's reporting units are
considered Level 3 inputs of the fair value hierarchy and include the following:
•      The Company's financial projections for its reporting units are based on

its analysis of various supply and demand factors which include, among

other things, industry-wide capacity, planned utilization rates, end-user

       demand, crack spreads, capital expenditures and economic conditions. Such
       estimates are consistent with those used in the Company's planning and
       capital investment reviews and include recent historical prices and
       published forward prices.

• The discount rate used to measure the present value of the projected

       future cash flows is based on a variety of factors, including market and
       economic conditions, operational risk, regulatory risk and political risk.
       This discount rate is also compared to recent observable market
       transactions, if possible.


For Level 3 measurements, significant increases or decreases in long-term growth
rates or discount rates in isolation or in combination could result in a
significantly lower or higher fair value measurement.
Significant Estimates and Assumptions
Fair values calculated for the purpose of testing our goodwill for impairment
are estimated using the expected present value of future cash flows method and
comparative market prices when appropriate. Significant judgment is involved in
performing these fair value estimates since the results are based on forecasted
assumptions. Significant assumptions include:
•      Future margins on products produced and sold. Our estimates of future

product margins are based on our analysis of various supply and demand

       factors, which include, among other things, industry-wide capacity, our
       planned utilization rate, end-user demand, crack spreads, capital
       expenditures and economic conditions. Such estimates are consistent with

those used in our planning and capital investment reviews and include

recent historical prices and published forward prices.

• Discount rate commensurate with the risks involved. We apply a discount

rate to our cash flows based on a variety of factors, including market and

economic conditions, operational risk, regulatory risk and political risk.

       This discount rate is also compared to recent observable market
       transactions, if possible. A higher discount rate decreases the net
       present value of cash flows.

• Future capital requirements. These are based on authorized spending and

internal forecasts.

We base our fair value estimates on projected financial information which we
believe to be reasonable. However, actual results may differ from these
projections.
Sensitivity Analysis
An estimate of the sensitivity to net income resulting from impairment
calculations is not practicable, given the numerous assumptions (e.g., pricing,
volumes and discount rates) that can materially affect our estimates. That is,
unfavorable adjustments to some of the above listed assumptions may be offset by
favorable adjustments in other assumptions.
Recent Accounting Pronouncements
For a summary of recently issued and adopted accounting standards applicable to
us, please read Note 2 "Summary of Significant Accounting Policies" in Part
II, Item 8 "Financial Statements and Supplementary Data."
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Commodity Price Risk
Derivative Instruments
We are exposed to price risks due to fluctuations in the price of crude oil,
refined products (primarily in our fuel products segment) and precious metals.
We use various strategies to reduce our exposure to commodity price risk. We do
not attempt to eliminate all of our risk as the costs of such actions are
believed to be too high in relation to the risk posed to our future cash flows,
earnings and liquidity. The strategies we use to reduce our risk utilize both
physical forward contracts and financially settled derivative instruments, such
as swaps, to attempt to reduce our exposure with respect to:
• crude oil purchases and sales;

• refined product sales and purchases;

• precious metals; and

•      fluctuations in the value of crude oil between geographic regions and
       between the different types of crude oil such as NYMEX WTI, WCS, WTI
       Midland, Mixed Sweet Blend and ICE Brent.


We manage our exposure to commodity markets, credit, volumetric and liquidity
risks to manage our costs and volatility of cash flows as conditions warrant or
opportunities become available. These risks may be managed in a variety of ways
that may include the use of derivative instruments. Derivative instruments may
be used for the purpose of mitigating risks associated with an asset, liability
and anticipated future transactions and the changes in fair value of our
derivative instruments will affect our earnings and cash flows; however, such
changes should be offset by price or rate changes related to the underlying
commodity or financial transaction that is part of the risk management
strategy. We do not speculate with derivative instruments or other contractual
arrangements that are not associated with our business objectives. Speculation
is defined as increasing our natural position above the maximum position of our
physical assets or trading in commodities, currencies or other risk bearing
assets that are not associated with our business activities and objectives. Our
positions are monitored routinely by a risk management committee and discussed
with the board of directors of our general partner quarterly to ensure
compliance with our stated risk management policy and documented risk management
strategies. All strategies are reviewed on an ongoing basis by our risk
management committee,

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which will add, remove or revise strategies in anticipation of changes in market
conditions and/or in risk profiles. These changes in strategies are to position
us in relation to our risk exposures in an attempt to capture market
opportunities as they arise.
Please read Note 11 "Derivatives" in the notes to our consolidated financial
statements under Part II, Item 8 "Financial Statements and Supplementary Data"
for a discussion of the accounting treatment for the various types of derivative
instruments, for a further discussion of our hedging policies and for more
information relating to our implied crack spreads of crude oil, diesel, and
gasoline derivative instruments.
Our derivative instruments and overall specialty products segment and fuel
products segment hedging positions are monitored regularly by our risk
management committee, which includes executive officers. The risk management
committee reviews market information and our hedging positions regularly to
determine if additional derivative activity is advised. A summary of derivative
positions and a summary of hedging strategy are presented to our general
partner's board of directors quarterly.
The following table illustrates how a change in market price (holding all other
variables constant and excluding the impact of our current hedges) would affect
our sales and cost of sales in the consolidated statements of operations:
                                                       Sales                           Cost of Sales
                                              Year Ended December 31,             Year Ended December 31,
                                                2019              2018              2019               2018
                                                                      (In millions)
Specialty Products:
$1.00 change in per barrel price of crude
oil (1)                                   $           -       $        -     $        9.1           $     8.7
Fuel Products:
$1.00 change in per barrel price of crude
oil (1)                                               -                -             21.4                20.1
$1.00 change in per barrel selling price
of gasoline, diesel and jet fuel (1)               21.4             20.1                -                   -





(1)  Based on our 2019 and 2018 sales volumes.


Revolving Credit Facility
Borrowings under the revolving credit facility are limited by a borrowing base
that is determined based on advance rates of percentages of Eligible Accounts
and Eligible Inventory (as defined in the Credit Agreement). As such, the
borrowing base can fluctuate based on changes in inventory and accounts
receivable, as well as selling prices of our products and our current material
costs, primarily the cost of crude oil. Our inventory is based on local crude
oil prices at period end, which can materially fluctuate period to period.
Pension Assets Volatility and Investment Policy
Our Pension Plan assets are also subject to volatility that can be caused by
fluctuation in general economic conditions. Plan assets are invested by the
Plan's fiduciaries, which direct investments according to specific policies. Our
consolidated statements of operations is currently shielded from volatility in
plan assets due to the way accounting standards are applied for pension plans,
although favorable or unfavorable investment performance over the long term will
impact our pension expense if it deviates from our assumption related to the
future rate of return. Please read Note 15 "Employee Benefit Plans" under Part
II, Item 8 "Financial Statements and Supplementary Data" for a further
discussion of our investment policies.
Compliance Price Risk
Renewable Identification Numbers
We are exposed to market risks related to the volatility in the price of credits
needed to comply with governmental programs. The EPA sets annual quotas for the
percentage of biofuels that must be blended into transportation fuels consumed
in the U.S., and as a producer of motor fuels from petroleum, we are required to
blend biofuels into the fuel products we produce at a rate that will meet the
EPA's annual quota. To the extent we are unable to blend biofuels at that rate,
we must purchase RINs in the open market to satisfy the annual requirement. We
have not entered into any derivative instruments to manage this risk, but we
have purchased RINs when the price of these instruments is deemed favorable.
Holding other variables constant (RINs requirements), a $1.00 change in the
price of RINs as of December 31, 2019, would be expected to have an impact on
net income for 2019 of approximately $64.2 million.
Interest Rate Risk
Our exposure to interest rate changes is limited to the fair value of the debt
issued, which would not have a material impact on our earnings or cash flows.
The following table provides information about the fair value of our fixed rate
debt obligations as

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of December 31, 2019 and 2018, which we disclose in Note 10 "Long-Term Debt" and
Note 12 "Fair Value Measurements" under Part II, Item 8 "Financial Statements
and Supplementary Data."
                                               December 31, 2019                       December 31, 2018
                                        Fair Value        Carrying Value        Fair Value        Carrying Value
                                                                     (In millions)
Financial Instrument:
2021 Unsecured Notes                 $         -        $              -     $     755.7        $          894.7
2022 Unsecured Notes                 $     351.2        $          347.1     $     279.4        $          345.9
2023 Unsecured Notes                 $     325.2        $          321.0     $     252.3        $          320.1
2025 Unsecured Notes                 $     598.8        $          540.5     $         -        $              -


For our variable rate debt, if any, changes in interest rates generally do not
impact the fair value of the debt instrument, but may impact our future earnings
and cash flows. We had a $600.0 million revolving credit facility as of
December 31, 2019, with borrowings bearing interest at the prime rate or LIBOR,
at our option, plus the applicable margin. Borrowings under this facility are
variable. We had no variable rate debt as of December 31, 2019. Holding other
variables constant (such as debt levels), a 100 basis point change in interest
rates on our variable rate debt as of December 31, 2019, would be expected to
have no impact on net income and cash flows for 2019. We had no variable rate
debt outstanding as of December 31, 2018.
Foreign Currency Risk
We have minimal exposure to foreign currency risk and as such the cost of
hedging this risk is viewed to be in excess of the benefit of further reductions
in our exposure to foreign currency exchange rate fluctuations.

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