Calumet Inc (CLMT) 2011 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2011 Calumet Specialty Products Partners LP Earnings Conference Call. At this time, all participants are in a listen-only mode.

(Operator Instructions)

As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Bill Anderson. You may proceed.

Thank you, Operator. Good afternoon, and welcome to the Calumet Specialty Products Partners investors call to discuss our fourth quarter 2011 financial results.

During this call, Calumet Specialty Products Partners LP will be referred to as The Partnership or Calumet. Also participating in this call will be Jennifer Straumins, our President and COO, and Pat Murray, our CFO. Following the presentation, we will hold the line open for a question and answer session.

During the course of this call, we will make various forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Such statements are based on the beliefs of our management as well as assumptions made by them and, in each case, based on the information currently available to them.

Although our management believes that the expectations reflected in such forward-looking statements are reasonable, neither The Partnership, its general partner nor our management can provide any assurances that such expectations will prove to be correct.

Please refer to The Partnership's press release that was issued this morning as well as our latest filings with the Securities & Exchange Commission for a list of factors that may affect our actual results and could cause them to differ from our forward-looking statements made on this call.

I will now turn the call over to Jennifer Straumins.

Thank you, Bill. We are very pleased with our results for the fourth quarter of 2011. On net income of $26.9 million, we have reported quarterly adjusted EBITDA of $65 million, and quarterly distributable cash flow of $33.1 million. We continue our focus on our operations in order to meet demand for our specialty products and to better benefit from current fuel products crack spreads.

As a result of the Superior refinery's successful integration and contribution to our results, we increased our quarterly distribution for the fourth quarter to $0.53 per unit, a $0.03 per unit increase from the third quarter.

On January 3, 2012, we completed an acquisition of an aviation and refrigerant synthetic lubricants business from Hercules, Incorporated, a subsidiary of Ashland, for an aggregate consideration of approximately $19.6 million, excluding certain customary post-closing purchase price adjustments. The acquisition includes a manufacturing facility located in Louisiana, Missouri.

On January 6, 2012, we completed the acquisition of all of the outstanding membership interests of TruSouth Oil LLC, a specialty petroleum packaging and distribution company located in Shreveport, Louisiana, and a related party for an aggregate consideration of approximately $25.5 million.

On January 23, 2012, we declared a quarterly cash distribution of $0.53 per unit for the quarter ended December 31, 2011, on all outstanding units. The distribution was paid on February 14th to unitholders of record as of the close of business on February 3rd.

I'll now turn the call over Pat Murray for a review of our financial results.

Thank you, Jennifer. Net income for the fourth quarter of 2011 was $26.9 million, compared to $9.5 million for the same period in 2010. These results include $13.5 million of non-cash unrealized derivative gains, as compared to $2 million of non-cash unrealized derivative losses for the fourth quarter of 2010.

We believe the non-GAAP measures of EBITDA, adjusted EBITDA and distributable cash flow are important financial performance measures for The Partnership. EBITDA and adjusted EBITDA, as defined in our debt instruments, were $64.6 million and $65 million respectively for the fourth quarter of 2011, as compared to $33.6 million and $42.2 million respectively for the same quarter last year.

The Partnership's distributable cash flow for the fourth quarter of 2011 was $33.1 million, as compared to $31 million for the same period in 2010. The increase in adjusted EBITDA, quarter-over-quarter, was due primarily to a $24.8 million increase in gross profit, partially offset by decreased realized derivative gains, a $2.7 million increase in transportation expense, and a $3.4 million increase in selling, general and administration expenses.

We encourage investors to review the section of our earnings press release found on our website entitled non-GAAP financial measures, and the attached tables for discussion and definitions of EBITDA, adjusted EBITDA and distributable cash flow financial measures and reconciliations of these non-GAAP measures to the comparable GAAP measures.

Gross profit by segment for the fourth quarter of 2011 for specialty products and fuel products was $64.7 million and $15.4 million respectively, compared to gross profit of $56.7 million and a loss of $1.4 million respectively for the same period in 2010.

The increase in specialty products segment gross profit of $7.9 million quarter-over-quarter was due primarily to a 13.4% increase in the average selling price per barrel for specialty products, partially offset by a 20.8% increase in the average cost of crude oil per barrel and higher operating costs, primarily repairs and maintenance.

The increase in fuel products segment gross profit of $16.8 million quarter-over-quarter was due primarily to a 106.8% increase in sales volume, primarily due to incremental fuel product sales volumes from the Superior acquisition; a 21.6% increase in the average selling price per barrel, excluding the impact of realized hedging losses reflected in our sales, partially offset by a 16% increase in the average cost of crude oil per barrel; increased realized losses on derivatives of $23.3 million in our fuel products hedging program; and, higher operating costs, primarily repairs and maintenance.

Selling, general and administrative expenses increased $3.4 million quarter-over-quarter to $15.7 million. This increase is due primarily to increased overall salaries and wages of $1.3 million, driven by the Superior acquisition and increased advertising costs of $0.8 million in 2011, compared to 2010.

Interest expense increased $10.2 million quarter-over-quarter to $18.1 million, due primarily to a higher interest rate associated with our 2019 senior unsecured notes, as compared to our term loan that was repaid in full in April 2011 and extinguished in connection with the issuance of our 2019 senior unsecured notes, as well as additional outstanding long-term debt in the form of 2019 senior unsecured notes issued to partially fund our Superior acquisition.

As of December 31, 2011, total capitalization consisted of Partners' capital in the amount of $728.9 million and outstanding debt of $587.1 million, comprised primarily of $586.3 million of 9.375% senior notes due 2019, which is net of discount of $13.7 million.

The $330.6 million increase in Partners' capital from December 31, 2010 was due primarily to $301 million of net proceeds from our March 2011 and September 2011 public offerings of common units, and $109.5 million in other comprehensive income, partially offset by $82.7 million in distributions to our unitholders.

On December 31, 2011, Calumet had availability of $340.8 million under our $850 million revolving credit facility based on a $570.8 million borrowing base, $230 million in outstanding standby letters of credit, and no outstanding borrowings under our revolver.

We believe we'll continue to have sufficient cash flow from operations and borrowing availability under our revolver to meet our financial commitments, minimum quarterly distributions to our unitholders, debt service obligations, contingencies and anticipated capital expenditures.

And now, I'll turn the call back over to Jennifer Straumins.

Thank you, Pat. This concludes our remarks, and we'll now be happy to answer any questions you may have.

Operator, can you please confirm if there are any questions?

Thank you.

(Operator Instructions)

Our first question is from the line of Darren Horowitz from Raymond James. You may proceed.

Jennifer, can you give us a little more bit detail on the run rate synergies from the integration of Superior now that you've got a couple months under your belt? I'm also curious as to how you're thinking about the feedstock shift, given on a relative basis what's happened to the Bakken barrels and the heavier barrels.

Superior's been running very well for us. They're running higher rates during this winter than they have in any other winter. We don't really disclose -- it will be in our filings what those run rates were. We've not yet disclosed that. But the plant's running very well. We had some minimal down time in the fourth quarter due to a power outage and an upset on a unit, but the plant's running very well at this point in time.

And we continue every day to analyze the economics of the Canadian crude and the Bakken barrels. And at this point in time, we've not shifted any production towards one or the other. We're still running about 50% Canadian and 50% North Dakota sweet.

Okay. Does that thought process change as you're kind of at this seasonally soft period for gasoline demand? Wouldn't you want to run more heavy barrels like possibly a shift 60/40 heavy/light?

Again, I mean, that's something that we look at every day. We've developed a new LP model at the plant to be able to give us real-time information on what we want to run. And those margins blew out last week and just contracted again yesterday. So, I don't think we can really say what we're going to do this spring based on information available to us right now.

Okay.

But we do have a lot of flexibility.

Sure, no, I appreciate that. Second question, as it relates to the two acquisitions you discussed, both the aviation and lube business in TruSouth, can you just give us an idea for the incremental annual EBITDA or cash flow expectation and possibly how, on an aggregate basis, that changes your business mix going forward?

It's not really changing our business mix. And, again, these four small niche acquisitions -- don't really anticipate them swinging our EBITDA numbers dramatically one way or the other. They were strategic acquisitions that allow us to grow in the future. So, we are not giving EBITDA targets for those.

Okay. Last question for me. Just from a bigger picture perspective, now that you've got, as I mentioned, a couple months of Superior running and you're looking forward as it relates to the expected crack spreads and how specifically that asset is going to do, is the target still somewhere around $70 million or $80 million on a 12-month basis for adjusted EBITDA out of Superior?

Yes, it is, if not a little bit higher than that.

Thanks, Jennifer.

Sure, thank you.

Your next question is from the line of Brian Zarahn from Barclays. You may proceed.

Good afternoon.

Hi.

In the quarter, was the majority of the fuel products volume increase from Superior?

It was all from Superior.

All from Superior, okay. And looking at 2012, what are your expectations for maintenance CapEx and interest expense?

Our maintenance and environmental CapEx continues to be in that $25 million range, and our interest expense is about $60 million a year.

Okay. And then given the sort of the industry capacity reductions from the east coast and the Caribbean, what impact does that have on your business? Does it have any impact on your specialty business?

It does not have any impact on our specialty business.

On the fuel product side, is there any impact or just those volumes will be replaced by imports and not really impacting your --

It will only impact us if it increases the Gulf Coast crack spread.

Okay. I guess finally, on your acquisitions you made in January, are you looking for additional bolt-on acquisitions, reasonable to assume, or do you think you may be done for the year?

Yes. We're always looking.

Okay. Thanks, Jennifer.

Thanks.

Your next question is from the line of Kelly Krenger from Bank of America Merrill Lynch. You may proceed.

Hi, thanks. Just a few questions on, starting on the specialty products, on the volumes for the quarter, 33 -- roughly 33,000 barrels a day. Did you shift any volumes at Superior into that category, or is that all just from your existing specialty business?

We've not -- the Superior asphalt is in the specialty category. We do have some projects that we're evaluating right now for other types of specialty products out of Superior. But for the fourth quarter of 2011, only the asphalt from Superior is in specialty products.

And how much was that?

We're not disclosing that at this point.

Okay. And it sounded like in your prepared remarks that you said you were still trying to kind of keep up with demand on the specialty side. But can you give us a little better sense of what you're seeing from a demand or margin standpoint on the specialty products business?

Sure. Our specialty products business finished the year out very well. We've seen some weakness on the export side of the business due to the strong dollar, but the majority of our sales are domestic, and those continue to be strong. There are some major turnarounds on the paraffinic side of the business where some of our competitors will be coming down. So, we expect supply to remain tight through the next several months in that market.

And then on the solvent side of our business, we've seen the larger Gulf Coast crack spreads for gasoline have really helped increase our solvents margins, because that's an alternate disposition for that type of stream. And we've had very good demand for our products and very strong margins.

Okay. So should we assume kind of comparable volumes going forward to what you've been running the last couple quarters or so?

Yes.

Okay. And then can you give us a Superior EBITDA for the fourth quarter?

We cannot.

Okay. Will that be broken out to the public filings?

It will not be, no.

Okay.

No -- and as I mentioned with, I believe it was Darren, that $70 million to $90 million range is what we've been seeing.

Okay. And with regard to hedging, it looks like you, at least relative to your third quarter press release, had added some hedges for -- mostly for 2012, it looks like?

We have been hedging, yes.

Just curious, kind of where do you stand on that from a standpoint of volumes for 2012 and then how much -- it didn't look like you had done much incremental in '13. But if you can just kind of comment on how you're staging your hedging at this point.

Sure. We've been -- we have -- I'm sorry. Excuse me. Immediately upon the closure of the Superior acquisition, we placed a lot of 2012 hedges on so that we could have that refinery -- a good portion of that refinery hedged from the fuels production side. And we've seen some very strong crack spread quotes here in the recent weeks, and we are actively hedging in the market today.

Okay. So will the -- I think these were as of December 31st.

These should be as of -- yes.

Will the Q have kind of the updated numbers?

No, we only disclose those numbers quarterly.

Okay.

But, I mean, the values that we've been able to get right now are in the mid to high 20s for both gasoline and diesel. So it's a very, very strong environment.

We're continuing to execute the program opportunistically as we see opportunities in the market. So, we're adding positions currently.

And what's kind of a target for '12 and '13? Given that you've added Superior to the mix, kind of what's the current hedging, I guess, plan or strategy?

A lot of that's going to be driven on the value of the hedges that we can place. But if you want to model something, I'd model about 50% of planned fuels production.

Okay. Kind of on a rolling 12- or 18-month basis?

Yes.

Okay. And then I noticed a turnaround cost of a little over $5 million in the fourth quarter. What was that for, or which plant was -- ?

We had a turnaround at our Shreveport refinery.

Okay. Did that do anything to volumes there?

It did not. N, it was just a regularly scheduled turnaround.

Okay.

We were down for a couple of weeks, but have enough makeup capacity there that rates weren't really impacted.

Okay. And what about for 2012 in terms of any turnaround schedule?

We'll do something just about every quarter, and amounts will be about the same as last year.

Okay. And then how about on growth CapEx for 2012?

We've got a lot of projects that we're evaluating. And our policy has always been if we've got the free cash flow available to do those projects, we'll do them. What we've -- we're looking at things with about a 50% return or higher to be considered at this point in time due to the number of potential projects that we have.

So should we -- I mean, is that a few tens of millions of dollars that we should be thinking of? I guess last year it was --

Last year, we spent about $25 million. I'd say we're going to spend in that ballpark if not a little bit more this year by the time it's -- by the time we're done.

Okay.

It depends on how some of these Superior projects -- what we figure out, if we're going to do those or not.

Okay. And I know you don't want to give cash flow guidance on the two acquisitions you made, but can we assume that those are accretive from a credit standpoint?

Yes, they are.

Okay. Thank you, very much.

Thanks.

(Operator Instructions)

And your next question is from the line of Eric Seeve from GoldenTree. You may proceed.

Hi, couple questions. Firstly, it seems based on the differential that we're seeing in crude oil from the Bakken and some of the crudes that you guys can buy in western Canada that -- it seems like you could be entering a really good margin environment, certainly for the Superior asset and just for some of your other assets as well.

Philosophically, to the extent that you have excess free cash flow beyond the growth CapEx, beyond any other acquisitions you make, can you just talk a little bit about your philosophy, about whether or not you include that in distributions, or do you use it to pay down -- I guess, now you have some revolver balance now that you made these acquisitions?

Our policy is that when we look at distribution increases, we look at a mid-cycle type of EBITDA for the Company. And we had a very, very strong third quarter, the strongest quarter we've really ever had. And you're right. With the spreads where they're at right now, Superior is lined up to be -- to have a phenomenal first and second quarter.

But I think you'll see us do modest distribution increases and go from there. If we think it's sustainable, we'll do a larger distribution increase. But if we think that this is a shorter cycle, we'll just use the capital for, like you said, pay down the revolver or do other projects.

Okay. Thank you. So working -- another question. Working capital now, much bigger than it's been historically. I guess that makes sense, as you've got a bigger footprint now. But is -- the level that you ended the year with, can you talk a little bit about how that compares with what you expect going forward?

Do you expect -- do you think there might be some opportunity to derive some capital out of working capital, or will you need to invest more in working capital? What should we expect going forward?

Well, with Superior now and their asphalt business, our working capital is going to be more seasonal than it has been historically. And what you'll see is as we do winter fill asphalt, you'll see higher working capital levels in the fourth and first quarters as we're building that inventory and then lower levels in the second and third quarters.

So I would anticipate holding crude prices and selling prices, even with where they're at today, that we would see higher levels of inventory in the second -- I'm sorry, at the end of the first quarter than what you saw at the end of the year as we continue to do winter fill asphalt.

So inventories peak in Q1 and then decline as you work that off over the paving seasons in Q2 and Q3?

That's right. And starting in November, we start to build that asphalt inventory back up again, and you start to see those working capital numbers increase.

Okay. Thank you. And just last question is regarding the acquisitions. Can you just talk a little bit about what qualitatively each one of them brings to Calumet? And I think it would be helpful to investors to understand the business better just to think about qualitatively how you thought about each one and how it sort of fits within your business model and how it can help you going forward.

Sure. The business that we bought from Hercules is a synthetic lubricants business. They participate -- it's a 30 million pound a year plant. They participate in the refrigeration, aviation fluid markets. And we participate in those markets as well with our specialty naphthenic oils out of our Princeton refinery.

And what we saw there was an asset owned -- it had been acquired by Ashland from Hercules. And it was ignored and under-utilized. And we felt like we could really take that business and grow it and develop synergies with the products that we produce out of our Louisiana refineries. And we plan on expanding the facility there and growing production. We're very excited about what the next year's going to hold for that plant.

And the packaging plant is located just a few miles from our Shreveport refinery, and as we were kicking off a branded motor oil, and as the acquisition of the TruSouth facility gave us the ability to package for ourselves. And, again, it was an under-utilized asset. They were privately held and needed some capital. And so, by Calumet stepping in and acquiring them, we can give them the capital they need to grow and expand their business.

And so, they're making motor oil packaging. Is it other products as well, or is that really it?

It's the full scope of motor oil type of products, hydraulic fluids. They've got a really interesting, unique product that we're going to be doing a lot of advertising on called TruFuel. And it's a premix fuel for your weed eaters and mowers and things like that so that the consumer doesn't have to mix the oil and the gas themselves.

And that product is going to be distributed, has been distributed throughout Wal-Mart, Lowe's, Home Depot, those types of stores.

Great. Thank you. And just, lastly, I know you didn't want to quantify this, but the question was asked about what EBITDA multiple you acquired it at. And in a follow-up question, someone asked if it would be credit -- accretive to the credit.

And that -- I think you answered yes, but I presume that the thought process was it will be accretive, but accretive to the credit would mean you would have had to acquire it for sub two times or whatever you levered. So I presume that you meant that it was accretive, but not credit accretive. Did I get that right?

Probably not as you've defined it there. I mean, overall, we think it will be accretive. I guess it will be a contributor to adjusted EBITDA and the cash flow measurement that we use. But, again, these are smaller acquisitions and more of -- a lot of start-up and a lot of work to do. But we're very excited about both of them.

Great. Thanks very much for your time.

Thank you.

Your next question comes from the line of Peter Madsen with Drakkar Capital. You may proceed.

Hi there. I have just three kind of different questions. One is just clarifying earlier Q&A on the hedging program, which as I look at the numbers, it appears like you didn't actually do much hedging throughout the fourth quarter when spreads were kind of coming in pretty aggressively.

And now you mention that they're back out at kind of attractive levels and are actively hedging now in that. Because I looked at the end of the third quarter, if I looked at 2012, it looks like you had about 15,000 barrels per day for your legacy assets and then you'd put on, at good spreads, about 15,000 barrels a day for 2012 to start hedging the Superior acquisition. Those two numbers look like they rolled into just one now number for the whole firm at around 30,000 barrels a day.

So, I guess, is it fair to say you actually were not that active during the fourth quarter and may be active now, now that spreads are at much more advantageous levels?

That's correct. The hedges that we put on for Superior were done very early in the fourth quarter in more of a big block, rather than our typical pattern is to do -- to spread it out over time.

And when you mentioned that you generally want to have about 50% hedged, is roughly the 30,000 barrel per day that you have for 2012 now across all your assets, is that kind of consistent with that 50% number?

For our fuels product segment, yes.

Okay.

We're not doing any specialty hedging at this point in time.

So presumably now, hedges that you are putting on are for the out years of '13 and '14. Is that about right?

We're doing some 2012 hedges too right now. We can go higher than 50% if we think that the values are good.

Right. Okay. So it's a combination of --

It's a combination.

-- locking in good spreads for this year and presumably more in the out years as well.

That's right.

Okay. I know that you're not really -- roughly, in that the Superior Refinery's around 45,000 barrels a day kind of rated capacity. What roughly capacity utilization are you running at on that thing, given the winter months?

As I mentioned, we're running more there than Murphy ever did during the winter. We're running historically average rates.

Okay. And then, if you could just give me a sense in terms of fourth quarter, your profits per barrel in the specialty went from kind of 30 in the third from your record quarter down to 21 and change in the fourth quarter. Obviously, crude had a pretty good run in the fourth quarter.

Is there an aspect of timing to that in your -- I'm a little -- my memory isn't perfect now in kind of exactly how a lot of your specialty contracts are. So, is that just kind of a delta to the overall move in crack spreads? Or, is that more of a timing issue in that you had a pretty rapid run-up in crude and then you kind of don't reset your selling prices as quickly as your inputs?

No, I think that that -- our third quarter was very, very good.

Right.

And our history has been when crude prices go up, there's a lag in raising prices. And when crude prices go down, there's a lag in lowering prices. And that was what you saw in that third quarter. You saw crude drop and our pricing remain stable throughout the quarter.

There were some announced industry price decreases throughout the fourth quarter due to some of this export weakness that I mentioned a little earlier, and also due to crude prices. And so, while crude prices were up on average a few dollars versus the third quarter, we actually saw some price decreases as our base margin level got caught up to a historical average.

Okay. And how does that kind of look now -- now that we've stabilized it at this kind of crude level? I mean, are they kind of -- ?

It's very stable. We're not anticipating any price moves in any of our segments at this point in time.

All right. Maybe one more. So obviously, everyone expects, or people are starting to expect some form of action -- military action in the Middle East against Iran. How does that factor into the hedge thoughts? And how can that possibly impact the margins if we have an event that takes oil up $30, $40, $50 a barrel, even if it's for a month or two?

We'll just have to be ready and raise prices accordingly. That's really all we can do.

Right. All right. Thank you.

Thank you.

Your next question is from the line of [Nick Kovich] from [Beach Investment]. You may proceed.

Good afternoon. Had a question related to the Superior acquisition. I was just looking at your fourth quarter press release -- and I'm new to following the Company. But looking at your year-end 2010 results, your sales volume was 53% specialty, 47% fuel products. And now, with the large Superior acquisition, it's 37% specialty, 63% fuel.

And my understanding is over a period of years, you want to undertake a significant capital program at Superior to, I guess, reverse the overall mix of the Company more toward the 50% specialty, 50% fuels. So, I guess, is that an accurate assessment or a goal over a three to five-year period --

No, I don't think Superior will ever be 50/50 fuels and specialty products. We're looking at doing some specialty products out of there, not a huge amount. But then, also, identifying other feedstock synergies between Superior and our Louisiana refinery. So, I don't anticipate the overall product mix changing dramatically at Superior and certainly not for the next year or so.

Okay. But if you look out three to five years, how much do you think out of Superior you could get in the more specialty product grade?

A couple of thousand barrels a day.

So 2,000 or 3,000?

Yes.

Okay. And how much capital do you think, I guess capital --

We don't have any idea at this point in time what that capital number would be. We're working all those numbers.

You are. And do you have a time frame which you'll communicate that to investors?

When we know, we'll communicate it. Some of these projects, we may decide not to do because the returns aren't high enough. So it wouldn't be fair of me, I don't think, to throw out some numbers and then have us not choose to spend the capital or not have the capital available for whatever reason, so --. But we are actively doing engineering work at Superior and looking at a wide variety of opportunities.

Okay. And the hurdle rate is 50% return on investment for those types of projects?

Not necessarily. Some of the projects at Superior that we'll do will be a little bit lower hurdle rate than that, but we've told our other refineries that they need to be 50% or better, because Superior's going to be getting a lot of our attention this year.

Okay. Very good. Thank you, so much.

Thank you.

Your next question is from the line of Eric Udoff from Appaloosa. You may proceed.

Hey, guys.

Hi.

I just wanted to clarify, if you could maybe walk us through what EBITDA would have been if there was no hedging done in the quarter.

Yes. The realized losses running through cost of sales in third quarter would have been about $33 million, I believe.

So can you just walk me through, does that mean I would take the Company adjusted $65 million and add --

Right. That means our gross profit effectively would have been higher by an amount in that range without the impact of the hedging for the fuel products.

Okay. That's a pretty significant number. Another topic you guys had addressed a bit. I was just curious of your thoughts on what the cause of these discounts in Bakken, Canadian and other physical crudes is to WTI right now.

I think we wish we thought we knew. I think everything you read, there's a different reason -- everything from refinery outages to weather to pipelines reversal announcements to delays of pipeline reversal announcements.

I think what it is is a lot of it is driven by the traders, and I think that there's a lot of barrels coming on both in North Dakota and Canada that they have no take-away capacity right now. But for every announced project, that spread narrows, and for every announced delay, the spread widens. But nothing has changed physically at this point in time.

Have you been looking at -- I don't know all the different [crudes] discounts that might be available not just at Superior but at your other refineries. Have you been looking at procuring other crude that are now trading at significant discounts WTI that might not have been in the past?

We look at that every day.

And have there been any --

We've got a couple things that we're working on. For example, last year we did the project at Shreveport to be able to bring in straight WTI crude. That was a barrel we were never able to bring in in the past and did some work there to be able to do that and realized that benefit. And we continue to look for stranded barrels and for good barrels.

All right. Great. I appreciate the color.

Thank you.

At this time, there are no other questions in the queue. I'd like to turn the call over to Mr. Bill Anderson for closing remarks.

Okay. Thank you. This concludes the Calumet Specialty Products Partners Earnings Conference Call covering the Company's fourth quarter 2011 results. Thank you very much for your participation in the teleconference. Please note that this teleconference will be available for replay using the instructions contained in our press release.

And ladies and gentlemen, that concludes your presentation. You may now disconnect. Have a great day.