We caution that these statements are not guarantees of future performance and you should not rely unduly on them, as they involve risks, uncertainties, and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. While our management considers these assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in our forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required by applicable law. Certain public statements made by us and our representatives on the date hereof may also contain forward-looking statements, which are qualified in their entirety by the cautionary statements contained above.
Non-GAAP Financial Measures
Our management uses certain non-GAAP performance measures to analyze operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our financial information presented in accordance with generally accepted accounting principles ("GAAP"). These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include performance measures along with certain key operating metrics.
We use the following financial performance measures:
EBITDA: We define EBITDA for any period as net income (loss) plus interest expense (including amortization of debt issuance costs), income taxes and depreciation and amortization. We believe net income (loss) is the most directly comparable GAAP measure to EBITDA.
Adjusted EBITDA: We define Adjusted EBITDA for any period as: EBITDA adjusted for (a) impairment; (b) unrealized gains and losses from mark to market accounting for hedging activities; (c) realized gains and losses under derivative instruments excluded from the determination of net income (loss); (d) non-cash equity-based compensation expense and other non-cash items (excluding items such as accruals of cash expenses in a future period or amortization of a prepaid cash expense) that were deducted in computing net income (loss); (e) debt refinancing fees, extinguishment costs, premiums and penalties; (f) any net gain or loss realized in connection with an asset sale that was deducted in computing net income (loss); (g) amortization of turnaround costs; (h) lower of cost or market ("LCM") inventory adjustments; (i) the impact of liquidation of inventory layers calculated using the last in, first-out ("LIFO") method; (j) RINs mark-to-market adjustments; and (k) all extraordinary, unusual or non-recurring items of gain or loss, or revenue or expense.
The definition of Adjusted EBITDA that is presented in this press release is similar to the calculation of (i) "Consolidated Cash Flow" contained in the indentures governing our 11.00% Senior Notes due 2025 (the "2025 Notes"), our 8.125% Senior Notes due 2027 (the "2027 Notes"), our 9.75% Senior Notes due 2028 (the "2028 Notes"), and our 9.25% Senior Secured First Lien Notes due 2029 (the "2029 Secured Notes") and (ii) "Consolidated EBITDA" contained in the credit agreement governing our revolving credit facility. We are required to report Consolidated Cash Flow to the holders of our 2025 Notes, 2027 Notes, 2028 Notes, and 2029 Secured Notes and Consolidated EBITDA to the lenders under our revolving credit facility, and these measures are used by them to determine our compliance with certain covenants governing those debt instruments. Please see our filings with the SEC, including the Partnership's most recent Annual Report on Form 10-K and other filings made by the Partnership and the Company with the SEC, for additional details regarding the covenants governing our debt instruments.
These non-GAAP measures are used as supplemental financial measures by our management and by external users of our financial statements such as investors, commercial banks, research analysts and others, to assess:
-- the financial performance of our assets without regard to financing
methods, capital structure or historical cost basis;
-- the ability of our assets to generate cash sufficient to pay interest
costs and support our indebtedness;
-- our operating performance and return on capital as compared to those of
other companies in our industry, without regard to financing or capital
structure;
-- the viability of acquisitions and capital expenditure projects and the
overall rates of return on alternative investment opportunities; and
-- our operating performance excluding the non-cash impact of LCM and LIFO
inventory adjustments, RINs mark-to-market adjustments, and depreciation
and amortization.
We believe that these non-GAAP measures are useful to analysts and investors, as they exclude transactions not related to our core cash operating activities and provide metrics to analyze our ability to fund our capital requirements and to pay interest on our debt obligations. We believe that excluding these transactions allows investors to meaningfully analyze trends and performance of our core cash operations.
EBITDA and Adjusted EBITDA should not be considered alternatives to Net income (loss) or any other measure of financial performance presented in accordance with GAAP. In evaluating our performance as measured by EBITDA or Adjusted EBITDA management recognizes and considers the limitations of these measurements. EBITDA and Adjusted EBITDA do not reflect our liabilities for the payment of income taxes, interest expense or other obligations such as capital expenditures. Accordingly, EBITDA and Adjusted EBITDA are only two of several measurements that management utilizes. Moreover, our EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of another company because all companies may not calculate EBITDA and Adjusted EBITDA in the same manner. Please see the section of this release entitled "Non-GAAP Reconciliations" for tables that present reconciliations of EBITDA and Adjusted EBITDA to Net income (loss), our most directly comparable GAAP financial performance measure.
Subject to the qualifications set forth above, our estimated range of Net loss and Adjusted EBITDA for the Company for the three months ended September 30, 2024 is (in millions):
Three Months Ended September 30, 2024
-------------------------------------------
Low Estimate High Estimate
-------------------------- ---------------
(In millions)
Reconciliation of Net loss
to Adjusted EBITDA
Net loss $ (110.0) $ (90.0)
Add:
Depreciation and
amortization 46.0 44.0
LCM / LIFO loss 10.0 9.0
Loss on impairment and
disposal of assets 1.0 -
Interest expense 60.0 55.0
Unrealized gain on
derivatives (14.0) (12.0)
RINs mark-to-market loss 34.0 32.0
Other non-recurring expenses 13.0 11.0
Equity-based compensation
and other items 4.0 7.0
Income tax expense 2.0 1.0
Noncontrolling interest
adjustments (1.0) (2.0)
---- -------------------- -----------
Adjusted EBITDA $ 45.0 $ 55.0
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View original content:https://www.prnewswire.com/news-releases/calumet-provides-preliminary-third-quarter-2024-selected-financial-results-302285424.html
SOURCE Calumet, Inc.
/CONTACT: Investors: John Kompa 317-957-5237; Public Relations: Media Oakes 317-957-5319
(END) Dow Jones Newswires
October 23, 2024 23:50 ET (03:50 GMT)
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