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Executives

Derek Daniel – Director, Communications

Bill Grube – Chief Executive Officer and Vice Chairman

Jennifer Straumins – President and Chief Operating Officer

Pat Murray – Chief Financial Officer

Analysts

Darren Horowitz – Raymond James

Kelly Krenger – Bank of America

Brian Zarahn – Barclays

Eric Udoff – Appaloosa

Gary Stromberg – Barclays Capital

Tariq Yousuf – Sedgwick

Calumet Specialty Products Partners, L.P. (CLMT) Q3 2011 Earnings Conference Call November 2, 2011 1:00 PM ET

Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2011 Calumet Specialty Products Partners, L.P. Earnings Conference Call. My name is (Jennifer) and I’ll be your operator for today. At this time, all participants are in listen only mode and later we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Mr. Derek Daniel, Director of Communications. Please proceed.

Derek Daniel – Director, Communications

Thank you, operator. Good afternoon, and welcome to Calumet Specialty Products Partners investors call to discuss our third quarter 2011 financial results. During this call, Calumet Specialty Products Partners, L.P. will be referred to as the Partnership or Calumet. Also participating in this call will be Bill Grube, our CEO and Vice Chairman; 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 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 and 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.

Jennifer Straumins – President and Chief Operating Officer

Thank you, Derek. We are very pleased with our results for the third quarter of 2011. We had net income of $19.6 and have reported a record quarterly adjusted EBIDTA of over $70 million. We also had a record quarterly distributable cash flow of $50.5 million. We have noted improvements in both our Specialty Products and Fuel Products segments and continue to focus on strong operations to meet demand for our specialty products and to better benefit from the current fuel products crack spread. We’re also very pleased to add the Superior refinery employees and assets from the Murphy Oil Corporation and our recently closed acquisitions and are working diligently on integration.

As we previously announced on September 30th, 2011, Calumet completed the acquisition of Superior, Wisconsin refinery and associated operating assets, inventories and related business for the aggregate consideration of approximately $411 million, excluding certain customary post-closing purchase price adjustments. The Superior refinery produces gasoline, diesel, asphalt and specialty petroleum products that are marketed primarily in the Midwest region of the U.S., including the surrounding border states and Canada.

The Superior acquisition was financed by combination of net proceeds of $193.6 million from our September 2011 public offering of common units; net proceeds of $180.3 million from the September 2011 private placement 9⅜% senior notes due May 1st, 2019 and finally borrowings under our revolving credit facility. We believe the Superior acquisition provides greatest scale and geographic diversity and the developments potential of our refining business. As our current total refining throughput capacity has increased by approximately 50% to 135,000 barrels a day.

On October 11, we declared a quarterly cash distribution of $0.50 per unit for the quarter ended September 30th, 2011 on all outstanding units. The distribution would pay November 14, 2011 to unitholders of record as of the close of business on November 4, 2011. This distribution represents as an increase a $0.05 per unit increase from the second quarter of 2011.

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

Pat Murray – Chief Financial Officer

Thanks, Jennifer. Net income for the third quarter of 2011 was $19.6 million compared to $21.2 million for the same period in 2010. These results include $20.3 million of non-cash unrealized derivative losses and $2.1 million of acquisition expenses related to the Superior acquisition, as compared to $1.9 million of non-cash unrealized derivative gains in the third 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 by our debt instruments were $47.1 million and $70.5 million respectively for the third quarter of 2011, as compared to $44 million respectively for the same quarter in 2010.

The partnership’s distributable cash flow for the third quarter of 2011 was a record quarterly $50.5 million as compared to $30.9 million for the same period last year. The increase in adjusted EBITDA quarter-over-quarter was due primarily to $34.5 million increase in gross profit. We encourage investors to review the section of the 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 second quarter, for Specialty Products and Fuel Products was $87.8 million and $8.8 million respectively, compared to $60.9 million and $1.2 million respectively for the same period in 2010.

The increase in Specialty Products segment gross profit of $26.9 million quarter-over-quarter was due primarily to a 30.5% increase in the average selling price per barrel, partially offset by a 23.4% increase in the average cost of crude oil per barrel and 5.2% decrease in sales volume and higher operating costs, primarily repairs and maintenance.

The increase in Fuel Products segment gross profit of $7.6 million quarter-over-quarter was due primarily to a 13.8% increase in sales volume and a 43.8% increase in the average selling price per barrel excluding the impact of realized hedging losses, partially offset by increased realized losses and derivatives of $38.9 million in our fuel products hedging program, a 25.1% increase in the average cost of crude oil per barrel and higher operating costs, again primarily repair and maintenance.

Selling, general and administrative expenses increased to $6.7 million quarter-over-quarter to $14.1 million. This increase is due primarily to increased accrued incentive compensation costs of $3.5 million in 2011 compared to 2010 and $2.1 million of acquisition costs related to the Superior Acquisition with no comparable expenses in 2010.

Interest expense increased $4.8 million quarter-over-quarter to $12.6, due primarily to higher interest rates associated with the our 2019 senior and secured 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 and secured notes.

As of September 30, 2011, total capitalization consisted of partners’ capital in the amount of $548.9 million and outstanding debt of $643.0 million, comprised of $586 million of 9 3/8% senior notes due 2019, which is net of discount of $14.0 million, borrowings of $56 million under the revolving credit facility and a long-term capital lease obligations of $1 million. The $150.6 million increase in partner’s capital from December 31st 2010 was due primarily to $287.9 million of net proceeds from the March 2011 and September 2011 public equity offerings and the net income of $16.2 million partially offset by $66.7 million increase in other comprehensive loss at $56.4 million in distribution to unitholders.

On September 30, 2011, we had availability of $271.5 million under our $850 million revolving credit facility based on a $535.5 million borrowing base, $208 million in outstanding standby letters of credit and outstanding borrowings of $56 million. We believe we’ll continue to have sufficient cash flow from operations and borrowing availability under our revolving credit facility to meet our financial commitments, minimum quarterly distributions to our unitholders, our debt service obligations, contingencies, and our anticipated capital expenditures.

Now I’ll turn the call back over to Jennifer.

Jennifer Straumins – President and Chief Operating Officer

Thank you, Pat. This concludes our remarks. We now would be happy to answer any questions you may have. Operator, can you please confirm if there are any questions?

Question-and-Answer Session

Operator

(Operator Instructions) And first question comes from the line Darren Horowitz from Raymond James. Please proceed.

Darren Horowitz – Raymond James

Jennifer, with the acquisition of Superior refinery now complete, can you give us a little bit more color and possibly quantify on what you expect the run rate synergies to be?

Jennifer Straumins

Sure. You know, they are getting right again in the fourth quarter. It’s winter time there. So we plan on taking the next quarter five months to work closely with them, develop some engineering plans and some real good capital estimates on what our plans are going to be. We’re planning on running about between 34,000 and 37,000 barrels a day there for the next several months as we get these plans in place. We are moving forward with one project that had already been contemplated and that’s a crude unloading rail project. So, that’s going to be our first project that we’re doing there and what that we will allow is some flexibility in crude oil choices and we’ll be able to bring in some even more disadvantage price crude into that refinery by the middle of next year. So we’ll have a lot more to tell you I think during our year end conference call as to exactly what those plans have been – we’ve been more or less focused on accounting and HR integration over the last four weeks that we own the refinery.

Darren Horowitz – Raymond James

At this point, is it too early to tell what that cost is going to be and exactly how many barrels you think you will be able to unload into Superior?

Jennifer Straumins

We plan on being able to unload between 5,000 and 8,000 barrels a day and that cost changes every month. So they are opportunistic purchases.

Darren Horowitz – Raymond James

Okay. And other 34,000 to 37,000 barrels that you plan out running there in the next couple of months, what’s the compensation of those barrels, because I know that that refinery can run several different grades?

Jennifer Straumins

Sure. Right now we are running a little bit more sweet than they have in the past just because the crack spreads are so strong. But, as we get into the winter, gasoline demand falls off in that area. So we’ll move over and we’ll be running in a little bit more weighted towards the heavy barrel. But, again, it’s close to 50-50 and 60-40. So, there’s not all that much swing between the Canadian and North Dakota barrels.

Darren Horowitz – Raymond James

Okay. Shifting gears, I want to go back to a comment that you had made earlier in the call and also in the prepared commentary when you were discussing positioning yourselves to better benefit from fuel products crack spreads. How do you plan doing this? Is this going to be a shift in fuels mix or is it something from an issue perspective that you can kind of bottleneck or how you’re thinking about achieving that goal?

Pat Murray

They’re really just running more barrels at Shreveport. Yes, Shreveport can run up to 55,000 to 60,000 barrels a day and we’re hedged close to 20,000 barrels a day, so what it is it’s really just running more overall barrels there as economics allow and that allows us to be able to sell more unheeded fuel barrels into the market.

Darren Horowitz – Raymond James

Okay, that makes sense. So speaking of Shreveport and the feeds laid there, you guys are running about 33,000 barrels benchmark to WTI and when we last spoke, you were working on getting up to around 10,000 barrels a day of pure WTI by the end of September, did you hit that mark?

Pat Murray

We’re running about 6,000 barrels a day there right now, the plant has the capability to do it and we’re working on the supply, there have been some pipeline constraints.

Darren Horowitz – Raymond James

Okay. Last question for me and again this is driven off if something that was in the prepared commentary, but you stated that part of the consideration for the quarterly distribution increase was due to your outlook, and I’d just like a little bit more color on that especially as it relates to your thoughts on the trend of the 2011 crack spread through the fourth quarter which obviously is we’ve seen this declined relative to where it was in September.

Jennifer Straumins

I’m sorry could you repeat that.

Darren Horowitz – Raymond James

Yes. In your prepared commentary you said that part of the rationale behind raising your distribution to $0.50 a unit was driven by the improvements in your operations and quote unquote your outlook.

Jennifer Straumins

Correct.

Darren Horowitz – Raymond James

And I’d just love some more color on your outlook especially given that the 211 spread has declined through October.

Jennifer Straumins

Again, focusing on the specialty side of the business, the 211 on the fuel side is still very, very strong, the plants are running very well. We’ve got, if you remember we had several small growth projects that we had been working on this year those were all underway and finished now and so it will be recognizing the earnings from those and our specialty segment remains very strong. Demand for our products is good and our margins are good. So I think we’re superior in the mix now going forward we’ve got pretty good outlook for those earning they are going to be.

Darren Horowitz – Raymond James

Thanks, Jennifer. I appreciate it.

Jennifer Straumins

Thank you.

Operator

Your next question comes from the line of Kelly Krenger from Bank of America. Please proceed.

Kelly Krenger – Bank of America

Hi, thanks for taking my question. On the volume front for both your up-cut more so and your legacy assets, should we expect some more volumes in the fourth quarter relative to the third quarter for specialty and fuel products, are you going to be run more fuel products, is that seasonal at all down in Shreveport?

Jennifer Straumins

We may run a little bit more at Shreveport, we’ll run what’s our models tell us to run and as long as we can economically run a barrel we’ll be running more than we ran in the third quarter and that’s the case today. So – but all other facilities you'll see very consistent run rates with what we've shown in the third quarter.

Kelly Krenger – Bank of America

Okay. So, specialty we should expect to be similar to the third quarter.

Jennifer Straumins

Shreveport we made about 40% specialty products and about 60% fuel. So as we run more Shreveport, we’ll have more both fuel and specialty.

Kelly Krenger – Bank of America

Okay. And then on the – with the Superior acquisition closed, I think the hedging that you noted in the press release, I think that was as of September 30 which I think is the date that you closed Superior, have you guys layered in incremental hedges based on owning Superior or is there….

Jennifer Straumins

We have and there will be some more color on that in the Q.

Kelly Krenger – Bank of America

Okay.

Jennifer Straumins

Yes. Kelly at very back of the press release we did add, at the end of that we show the positions that we’ve added subsequent.

Kelly Krenger – Bank of America

Okay.

Jennifer Straumins

About 15,000 barrels a day for 2012 and 6,000 barrels a day for the fourth quarter of this year….

Kelly Krenger – Bank of America

Okay.

Jennifer Straumins

So, we kind of started on executing these strategies.

Kelly Krenger – Bank of America

Okay, thanks. And also it seems some $70 million of EBITDA was higher than my estimate and certainly a big improvement over the second quarter. Was there anything in the quarter that was usual on the positive side I guess or is that a reasonable run rate based on the margin environment we saw on the third quarter for those assets?

Jennifer Straumins

Yes, our Specialty Products marketing group at a phenomenal job. We had great margins on our Specialty Products and then also great gasoline margins. So, those were the two driving forces behind the increase in earnings.

Kelly Krenger – Bank of America

But there weren’t any, I don’t know…

Jennifer Straumins

There was no one-time…

Kelly Krenger – Bank of America

Reversals or accruals or anything like that?

Jennifer Straumins

There were one-time deals or anything.

Kelly Krenger – Bank of America

Okay. Okay and then I know you only had Superior for a month, but any comment that you can provide on that in terms of the operations of it or anything that’s good, bad or different about relative to what you thought when you purchased it?

Jennifer Straumins

I think it’s pretty much what we thought when we purchased it. The people have been really great to work with and it’s a great asset. We look forward to exploring a lot of opportunities out there.

Kelly Krenger – Bank of America

Okay. Thank you.

Jennifer Straumins

Thanks, Kelly.

Operator

Your next question comes from the line of Brian Zarahn from Barclays. Please proceed.

Brian Zarahn – Barclays

Good afternoon.

Jennifer Straumins

Hello.

Brian Zarahn – Barclays

Obviously, Specialty Products margins were very high in the third quarter, what’s your view on the sustainability of these really high margins?

Jennifer Straumins

We’ve seen some weakening as we go into the fourth quarter. We think that’s more or less related to people managing yearend inventories and some of the things going on globally from a clinical and economic standpoint. One of things that did help our third quarter look so strong was crude prices felt substantially and again it helped to reinforce our story of our specialty prices are sticky for a period of time following a decrease in crude and so that, again that played out to be the case. Yes, I think we’ll see some weakness in the fourth quarter, but should still be very, very strong.

Brian Zarahn – Barclays

Looking into 2012, you have a full year contribution from Superior. Do you have any initial thoughts as to distribution growth prospects?

Jennifer Straumins

Nothing, that, we’ve not visited with our Board on that at this point of time, so nothing there. Our plan is to be prudent and conservative in our distribution growth.

Brian Zarahn – Barclays

Thank you.

Jennifer Straumins

Thanks.

Operator

(Operator Instructions) Your next question comes from the line of Eric Udoff from Appaloosa. Please proceed.

Eric Udoff – Appaloosa

Hi. I just wanted to get a better understanding, you mentioned earlier the hedging loss, I wanted to get a understanding on what your EBIDTA would have been if you’re unhedged for the quarter?

Pat Murray

Well, we recognize basically $38 million, roughly $39 million of realized hedging losses in the quarter. So results would have been about $40 million better if we had not been hedged at all.

Eric Udoff – Appaloosa

Right. And then if I understood through the commentary, SG&A was about $5 million higher than normal because of compensation and (indiscernible) so should I back another $5 million there?

Pat Murray

Yes, well, I mean, that’s part of EBITDA as calculated.

Eric Udoff – Appaloosa

And then because obviously it didn’t include any Superior EBITDA in the results, how should I be thinking about third quarter’s results for Superior (indiscernible) if I were to think of how company should be operating going forward. Would I be expecting it to be significantly higher than the second quarter?

Pat Murray

When we publish the Superior’s audited results, they had about $80 million of EBITDA. So I think that’s a minimum level of what we would – before any synergies or anything else what we would expect on a go forward basis.

Jennifer Straumins

When we file our Q, also, we’ll be reporting pro forma financial information, limited pro forma financial information, which would include Superior as well for the quarter. So that will give you some insight.

Eric Udoff – Appaloosa

When will that be coming out?

Pat Murray

We are expecting to file that late this week.

Eric Udoff – Appaloosa

Okay. And could you maybe just walk me through distributable cash flow if you were pro forma for I guess the hedging and also superior just rough order of magnitude what that change would have been?

Pat Murray

Well, again, we would have shown about $40 million more in EBITDA from realized hedging losses. And then as Jennifer mentioned, it’d give you some scale and scope of what Superior might be contributing on a quarterly basis. Those would be the two largest add backs so.

Eric Udoff – Appaloosa

All right. Thank you.

Jennifer Straumins

Thanks. Operator, can you confirm if there any more questions please?

Operator

(Operator Instructions)

Jennifer Straumins

Operator, you there?

Operator

Your next question comes from the line of Lawrence Dobrin from Oppenheimer. Please proceed. Lawrence, your line is open. Your next question comes from the line of (Eric Steve). Please proceed.

Unidentified Analyst

Hi, couple of things I wanted to confirm that I understand correctly. First the revolver excluding LCs at the at the quarter was $56 million and the borrowing base was 535 with availability of 271 and that’s all pro forma for the acquisition, because it closed last date of quarter, is that accurate?

Jennifer Straumins

That’s right. We included the borrowing base from the inventory purchase in the borrowing base. There were no accounts receivable purchased at closing, so obviously as we go forward and report borrowing base that it’ll have accounts receivable include as well.

Unidentified Analyst

Okay. Thank you. What was the – what’s way as to share count and can you confirm the green shoe on the latest equity offering was not exercised.

Jennifer Straumins

The number of units outstanding is 51.5 million that would include green shoe exercise of 750,000.

Unidentified Analyst

So, it was exercised.

Jennifer Straumins

Yes, a half of the green shoe was exercised.

Unidentified Analyst

Okay, thank you. And then for Superior, can you give us a flavor maybe can you tell us Q3 EBITDA was for Superior versus and what it was Q3 of last year. I know it sounds like we’ll get a little more information when the Q comes out.

Jennifer Straumins

Yes, there will be more information when the Q comes out.

Unidentified Analyst

Okay. Okay. And then just you spoke a little bit about Q4 and it sounded like what you were saying is because the oil price is declining inter quarter during Q3 that it might have been a little bit stronger than sustainable and it sounds like in Q4 as I understand you correctly you say, you’ve seen margins come off a little bit and it sounds like demand has been a little bit weak due to destocking, but it sounds like the message was margins have come off a little bit from the strength in Q3, but are still strong relative to historical levels is that a – can I just hope you’ll give a little more color on that?

Jennifer Straumins

Yes. That’s what you said is correct. We are still experiencing good demand for our products. We’ve shifted some export sales to domestic sales, but we are seeing the export market come back pretty strongly at the end of the year here was crudes jumped back up a little bit. When it hit the lows at the quarter we had a lot of people waiting for price decreases and especially with these export customers you put product on our boat and it takes several weeks to get to them, so they were a little more nervous than domestic customers, but now that crude is back in the low to mid 90s we’ve seen that demand come back as well so and so certainly you won’t see us adjusting run rates at our facility’s huge demand.

Unidentified Analyst

Okay, great. Thank you. And just, just last year I just want to make sure I understand one other point, did you say earlier in the call that the realized losses on hedges in the third quarter was about 38 million. I know on your – if you look at the income statement we only see 3.8 million of realized losses on derivatives, but I presume other 35 million just talking to your classified for income statement purposes as derivatives that.

Jennifer Straumins

It gets classified in gross profit because it’s related to the sale of our Fuel Products segment.

Unidentified Analyst

Okay. So the vast majority of the realized gain is it’s not broken out in its own line, I mean it’s embedded within the gross profit component.

Jennifer Straumins

Yes, so it’s within sales and cost of sales in the Fuel Products segment. In our queue filings we do provide little more color as to specific geography of each component of the hedging gains and losses, but yes it’s in gross profit.

Unidentified Analyst

Thanks very much.

Jennifer Straumins

Thank you.

Operator

Your next question comes from the line of (indiscernible) Capital. Please proceed.

Unidentified Analyst

Hi, it sounds like a lot of my questions are possibly going to be answered by the Q, but one or two that probably won’t. What kind of ratio, can you comment on just eliminate the concept of the ratio of distributable cash flow to your actual distributions. I know you like to maintain some kind of cushion. I am just wondering what the min and max are of your coverage ratios with respect to distributable cash flow versus dividends?

Jennifer Straumins

Sure. Our stated target is 1.3 to 1.5 times. We were at 1.9 times for this quarter and for the three quarters so far this year we’ve been at 1.7 times. And we do have a little bit of seasonality in our business. Our second, third quarters are stronger than the first and fourth quarters traditionally. So first quarter with just right or just under one time and then we’ve seen those numbers strengthen every quarter, even though we have continued to make distribution increases. So we probably could have increased distributions more this quarter, but we really want to wait and get Superior integrated and get 2011 finished and we’ll see where we were at in February.

Unidentified Analyst

Got you. And then Pat had indicated there was an earlier question on hedging and the recent earnings release kind of talks about the hedging for Superior subsequent to September 30, so I guess just on a note of clarification, has there been further hedging since this release or is the release a relatively accurate snapshot of Superior hedging at this time.

Jennifer Straumins

It is a precise snapshot of where we are today.

Unidentified Analyst

Okay. And then as you’ve mentioned with regards to Shreveport fuel products, you have roughly 50% of your throughput kind of hedge at these legacy hedge rates and then obviously you’re benefiting from current market spreads on the balance, is there any thought to increase the hedges on the Fuel Products segment down at Shreveport and kind of lock-in relatively robust margins at this point or is the thought more to just be kind of half hedged and half market?

Jennifer Straumins

We’ve put some more on so we are a little bit more than half hedged at this point in time, but when you look at – part of our barrels at Shreveport are Brent priced barrel, so when you look at with that Brent crack spread is, it’s essentially where we were hedge at. So there was not a huge amount of incentives to be doing a whole lot of extra hedging at Shreveport just because that’s not what the basis – the price basis for the barrels are.

Unidentified Analyst

Right. Okay, thank you.

Jennifer Straumins

Thank you.

Operator

Your next question comes from the line of Gary Stromberg from Barclays Capital. Please proceed.

Gary Stromberg – Barclays Capital

Hi, all of my questions were asked. Thanks.

Jennifer Straumins

Thank you.

Operator

Your next question is a follow-up question from Kelly Krenger from Bank of America. Please proceed.

Kelly Krenge– Bank of America

Yes, thanks. My follow up was asked and answered as well. Thank you.

Operator

Your next question comes from the line of Tariq Yousuf from Sedgwick. Please proceed.

Tariq Yousuf – Sedgwick

Hi. How you guys think about pro forma Superior, the appropriate capital structure or what the run rate total debt outstanding should be pro forma Superior. And does that anyway influence your decision in terms of what the appropriate distribution should be in the next 12, 24 months?

Jennifer Straumins

As we’ve stated, certainly several times we’re certainly committed to balanced capital structure between debt and equity. I think if you look at the way in which we finance the Superior acquisition, we were roughly at 50-50 between rising equity and debt simultaneously to pay for that roughly $400 million for Superior. I think in terms of the capital structure, vis-à-vis distributions and how we look at that, we certainly look at both components of what our distributable cash flow targets are relative to the cost to service our debt. So it think it’s all very much interrelated, but again, we’re committed to a balanced capital structure that’s roughly half debt and half equity.

Tariq Yousuf – Sedgwick

Okay. Thank you.

Operator

Your next question comes from the line of (indiscernible) from Golden Tree. Please proceed.

Unidentified Analyst

Hi. A few more. With respect to Shreveport, it sounds like you guys have been able to improve volumes there and I know that in previous quarters you had some operational issues which prevented from gaining its full capacity. Can you just update us there on what it ran out in the third quarter, where it's running now and where you are hoping to get it?

Jennifer Straumins

Sure. Again part of that’s driven by economics not just by operational issues that. It ran right over – little over 40,000 barrels a day, 44,000 barrels a day in the third quarter. We’re running between 46,000 and 48,000 barrels today and we’ll probably finish up the year at about that rate.

Unidentified Analyst

Okay.

Jennifer Straumins

Operationally it's doing well.

Unidentified Analyst

Okay. And so once get to 46, 48 that’s about where it's capacity is, I appreciate it.

Jennifer Straumins

Incremental accrued gets pretty expenses and you’re run a little less barrel as your accrual barrel at that point it gets pretty expensive. If the WTI Brant spread goes back to more traditional levels and you have more of a (indiscernible) advantage, you’d run more sorrow barrels there and get closer to that 50,000 barrels a day. But given the circumstances of today that’s about where we would be.

Unidentified Analyst

Okay, thank you. Second with respect to the timing of the incremental 750,000 shares sold pursuant to the green shoe, was that during the quarter or after the quarter?

Jennifer Straumins

It was after the quarter and it’ll be reported as a subsequent event in our Q.

Unidentified Analyst

Okay, great. And then I guess, when I look at the first half of the year there is a huge working capital, it’s a huge use of cash which makes sense because oil prices are rising and then in the third quarter you guys drew a little bit of that, but if working capital was east of $120 million in the first half year, you only drew 10 million out of it in the third quarter, and I am sure there are a lot of moving parts to it other than just oil prices, but should we be expecting a working cap be a source of capital on the fourth quarter, or am I thinking about that the wrong way?

Jennifer Straumins

Well, we obviously will be bringing on the working capital related to the Superior refinery so we would expect the receivables to growth and – but also we would be putting on some decent payables as well to offset part of that so I mean I think we would see obviously some working capital increase, but it certainly is reasonably increase to revolving credit facility as well, so.

Unidentified Analyst

Let me ask differently. Ignoring Superior, just with respect to the legacy business, is there – were you expecting a big working capital benefit in the fourth quarter or not really?

Jennifer Straumins

No. Not really. I mean, we think that inventory levels everything else should stay pretty similar levels to where they are.

Unidentified Analyst

Okay. Thanks again guys.

Jennifer Straumins

Thank you.

Operator

There are no further questions. At this time, I will turn the call back over to the presenters. Please proceed.

Jennifer Straumins – President and Chief Operating Officer

Thank you, operator. This concludes the Calumet Specialty Products Partners earnings conference call covering the company’s third quarter 2011 results. Thank you very much for participating in this teleconference. Please note that the teleconference will be available for replay using the instructions contained in our press release.

Operator

Ladies and gentlemen that concludes today’s conference. Thank you for your participation, you may now disconnect. Have a great day.

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