Question-and-Answer Session
Operator
Thank you. (Operator’s instruction) Your first question comes from the line of Paul Sankey with Deutsch Bank. Please go ahead.
Paul Sankey – Deutsche Bank
The net change in LCM reserve. To be clear, does that increases your Yorktown refinery gross margin by $1.97? It would have been $1.97 lower than the $2.67 that’s in the release, (inaudible) for that change?
Gary R. Dalke
That is correct. And that’s the reason why we noted on the Yorktown margin table. But it does flow - the LCM adjustment does flow through cost of sales. So that’s why it’s categorized there. And that’ll be putting up the difference.
Paul Sankey – Deutsche Bank
And how – I’m thinking that you can only kind of doing it once and then –
Gary R. Dalke
Well, it’s a reserve that’s set off of our LIFO of value of inventory. So, if you recall at the end of the fourth quarter of 2008 our LIFO inventory value was above market and we had to take a $61 million LCM write-down to reduce that LIFO inventory down to market value. And with prices moving up this year we fully reversed that LCM rate down. So currently as of 9:30 there is no more LCM reserve. But we did take a portion in each of the three quarters.
Paul Sankey – Deutsche Bank
Okay. I understand. So basically – I guess what you’d say is that going forward if it was to be a difference it would be a negative from here. But it could equally be no change kind of thing.
Gary R. Dalke
Correct.
Paul Sankey – Deutsche Bank
And so I was wondering the performance that Yorktown in terms of the gross margin, now I’m assuming that it’s no better in Q4 today, October then it was in the third quarter?
Gary R. Dalke
Yeah, Paul. I mean, as you know, really the New York east coast margins really started to deteriorate fast in September. And remain that way for most of October. The last week of October they have started to improve and slightly improving in November.
Paul Sankey – Deutsche Bank
Okay. And the through-put there looks quite high, I guess, given how weak the margins were. I can see the difference in the amount of (inaudible) you ran. But it seems quite a high number of through-put that you’re running. The point being wouldn’t we expect to see that cut back over time?
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