Credit Suisse MLP and Energy Logistics Conference. June 10-11, 2014

Transcription

1 Credit Suisse MLP and Energy Logistics Conference June 10-11, 2014

2 Forward-Looking Statements This Presentation has been prepared by Calumet Specialty Products Partners, L.P. (the Company or Calumet ) as of June 10, The information in this Presentation includes certain forward-looking statements. These statements can be identified by the use of forward-looking terminology including may, intend, believe, expect, anticipate, estimate, forecast, continue or other similar words. The statements discussed in this Presentation that are not purely historical data are forward-looking statements. These forward-looking statements discuss future expectations or state other forward-looking information and involved risks and uncertainties. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements included in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. The risk factors and other factors noted in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q could cause our actual results to differ materially from those contained in any forward-looking statement. Our forward-looking statements are not guarantees of future performance, and actual results and future performance may differ materially from those suggested in any forward-looking statement. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the foregoing. Existing and prospective investors are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this Presentation. We undertake no obligation to publicly release the results of any revisions to any such forward-looking statements that may be made to reflect events or circumstances after the date of this Presentation or to reflect the occurrence of unanticipated events. The information in this Presentation is strictly confidential and may not be reproduced or redistributed, in whole or in part, to any other person. The information contained herein has been prepared to assist interested parties in making their own evaluation of the Company and does not purport to contain all of the information that an interested party may desire. In all cases, interested parties should conduct their own investigation and analysis of the Company, its assets, financial condition and prospects and of the data set forth in this Presentation. This Presentation shall not be deemed an indication of the state of affairs of the Company, or its businesses described herein, at any time after the date of this Presentation nor an indication that there has been no change in such matters since the date of this Presentation. This Presentation and any other information which you may be given at the time of presentation, in whatever form, do not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any securities of the Company, nor shall it or any part of it form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. Neither this Presentation nor any information included herein should be construed as or constitute a part of a recommendation regarding the securities of the Company. Furthermore, no representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein. Neither the Company nor any of its officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this Presentation. 1

3 Our Competitive Advantages Vertically integrated producer and distributor of specialty products and fuel products One-stop shop for approximately 6,000 name-brand specialty products One of the top six producers of paraffinic and naphthenic base oils in North America Strong relationships with a broad customer base more than 6,000 active accounts Well positioned in specialty products markets with very high barriers to entry (specialized formulations, regulatory permitting, etc.) Location of fuels products assets (near crude oil reserves, pipelines and customers) Strong culture of safety and reliability nine locations have operated more than six years without a lost-time injury Experienced management team senior managers average approximately 30 years of industry experience 2

4 We Are An Integrated Producer Of Specialty Hydrocarbons 3

5 We Own Niche, Location-Advantaged Fuel Products Refineries 4

6 We Own Integrated Specialty Products Facilities 5

7 Our 6,000+ Specialty Products Have A Wide Array Of Applications Note: While Calumet does not produce or sell the consumer products pictured above, its finished products are components of such products. The logos, trademarks and other intellectual property associated with the products pictured above are the intellectual property of those who own or license rights therein. 6

8 We Have A History Of Consistent, Profitable Growth 7

9 Specialty Products Brands Contribute Significant Unitholder Value Manufacturer of high-performance lubricants primarily for automotive, industrial and racing applications Sole mission is to develop products that significantly outperform other synthetic and mineral-based oils Royal Purple brand is well respected around the world, including in the U.S., Canada, Mexico, Australia, China, Italy, Japan and the U.K. Manufacturer of a wide array of high-end specialty lubricants and greases for food-grade industrial, mining and power sport Globally recognized specialty lubricants products are sold in more than 100 countries across six continents Sells more than 160 products through more than 50 distributors with sales in 35 states nationally Sells products into the passenger car, heavy-duty truck, farming and industrial end-markets through its distribution partners Quantum has become one of the most recognized new lubricants brands in recent years Leading provider of drilling fluid solutions, completion fluids and production chemicals to the oil and gas industry More than 30 manufacturing, mixing, storage and distribution facilities in 13 states Ready-to-use fuel engineered specifically for outdoor power equipment available for 4- and 2-cycle engines Precise fuel-to-oil blend assures correct ratio every time Ethanol-free fuel protects small engines from corrosion while ensuring peak performance Proprietary formulation and resealable cap ensure shelf life greater than 2 years after opening Unique line of petrolatums, waxes, white mineral oils and gelled hydrocarbons System for thickening and gelling hydrocarbons creates gels for cosmetics, pharmaceuticals and personal care Petrolatums in multiple viscosity ranges comply with USP and FDA standards Extreme-purity mineral oils are highly suitable for pharmaceuticals, cosmetics, plastics and food processing applications Agricultural spray oils combat a broad range of insects, diseases and weeds that impact agricultural and crop production and profitability Products pose little or no hazard to people or animals, and, when used properly, have minimal effect on beneficial insects Products are EPA-registered and can be configured to also meet European Union compliance requirements Calumet, through its network of owned refineries, is a wholesale supplier of fuel to approximately 100 Calumet-branded retail locations 8

10 Acquisitions Further Wellhead to Retail Strategy 9

11 Why Invest in Calumet Specialty Products Partners, L.P.? 10

12 Attractive Distribution Yield Coupled With Improving Fundamentals CLMT Yield vs. Variable Distribution Refiner Sector Yield and Alerian MLP Index Yield(1) 12% 10% 8% 6% 4% 2% 0% Variable Distribution MLP Refining Sector Fixed Distribution MLP - CLMT Alerian MLP Index (1) Distribution yield calculated by taking the trailing four quarters of cash distributions to unitholders divided by the intraday price on 5/16/14. The Variable Distribution Refining Sector is inclusive of Northern Tier Energy, CVR Refining and ALON USA Partners. The Alerian MLP Index is the leading gauge of large- and mid-cap energy Master Limited Partnerships (MLPs). This float-adjusted, capitalization-weighted index includes 50 prominent companies and captures approximately 75% of available MLP market capitalization. 11

13 Recent Developments 12

14 A Successful Start To 2014» Record 1Q results reflect improvement in Adjusted EBITDA on both a q/q and y/y basis. Adjusted EBITDA has improved for three consecutive quarters to $82.7 million in 1Q14 vs. $80.0 million in 1Q13 and $53.2 million in 4Q13. Excluding $89.6 million in debt extinguishment costs, 1Q14 adjusted net income was $39.8 million, or $0.50 per diluted unit.» Improved distribution coverage ratio - approaching 1.0x. The distribution coverage ratio was 0.94x for 1Q14 versus 0.51x for 1Q13.» Completed 6.5% $900 million senior unsecured notes offering. Completed largest notes offering and lowest printed coupon in company history in March 2014.» Improved liquidity position. As of 3/31/14, we had $714 million in combined cash and availability under our revolving credit facility, providing ample funding support for organic growth projects and general partnership purposes.» Acquired Anchor Drilling Fluids. Acquisition further establishes us a specialty products supplier to the rapid-growth domestic oilfield services market; 2013 results for Anchor estimated at more than $30 million EBITDA.» Acquired United Petroleum. Acquisition expands our portfolio of premium branded lubricants solutions; further bolsters sales, marketing and distribution capabilities of Specialty Products segment.» San Antonio refinery operated at record levels during 1Q14. Following the completion of a 3,000 bpd crude oil unit expansion during 4Q13, the San Antonio refinery operated at record throughput rates during 1Q14.» Royal Purple sales into Wal-Mart exceeding internally forecasted expectations. Continued the roll-out of Royal Purple products; receiving replenishment orders; sales to Wal-Mart are ahead of internal forecast.» Continued to make progress on multi-year organic growth projects. Dakota Prairie Refinery remains on-schedule for start-up during 4Q14; Missouri esters plant expansion scheduled for completion during 2Q15; Montana refinery expansion on-schedule for completion during 1Q16. 13

15 Generated Record Adjusted EBITDA In 1Q14 Adjusted EBITDA ($MM) steadily improving, with no major fuel refinery turnarounds expected until 2018 $80.0 $70.0 $38.3 $53.2 $82.7 1Q13 2Q13 3Q13 4Q13 1Q14 Reported record first quarter Adjusted EBITDA in 1Q14 ($MM) $69.7 $80.0 $82.7 $34.7 $20.8 1Q10 1Q11 1Q12 1Q13 1Q14 14

16 Consistently Elevated Specialty Gross Profit Per Barrel Specialty Products Segment Gross Profit Increased by 16% y/y in 1Q14 Specialty Products Segment Gross Profit Per Barrel Fuel Products Segment Gross Profit Per Barrel (Ex-Hedging) $42.22 $32.49 $34.45 $8.25 $3.81 $3.66 1Q13 (Prior Year) 4Q13 (Prior Quarter) 1Q14 (Current Quarter) 15

17 Announced Organic Growth Projects Montana Refinery Expansion - Final engineering assessment completed; applying for permits - Anticipated completion date of the first quarter Est. cost = $400 mm; Est. annual Adj. EBITDA = $ mm Dakota Prairie Refinery (JV) - Focused on construction of refinery foundations and tanks - Anticipated completion date of the fourth quarter Est. (CLMT) cost = $75 mm; Est. annual Adj. EBITDA = $35-45 mm Missouri Esters Plant Expansion - Increasing esters production capacity from 35 to 75 mm lbs./yr. - Anticipated completion date of the second quarter Est. cost = $40 mm; Est. annual Adj. EBITDA = $10 mm Total Estimated CAPEX and Est. Adjusted Annual EBITDA Contributions ( ) ($MM) (1) Total ( ) $500 to $550 mm 2015 (Est.) $130 to $150 mm Total ( ) $190-$215 mm 2014 (Est.) $270 to $300 mm 2013 (Actual) ~$100 mm Total Estimated Growth CAPEX ( ) Total Est. Annual Adj. EBITDA Contribution From All Projects (1) Includes estimated Adjusted EBITDA that the Partnership expects to generate from its 50/50 joint venture with MDU Resources for the Dakota Prairie (North Dakota) refinery that is scheduled to come online during the fourth quarter

18 Financial Overview 17

19 Key Credit Statistics Debt to Capital Ratio Debt to LTM Adjusted EBITDA (Leverage) Ratio(1) 45% 49% 45% 50% 52% 60% 4.7 x 5.5x 2.7 x 2.7 x 2.8 x 2.2 x YE 2009 YE 2010 YE 2011 YE 2012 YE /31/2014 Revolver Availability ($MM) YE 2009 YE 2010 YE 2011 YE 2012 YE /31/2014 Fixed Charge Coverage Ratio $472 $ x 4.3 x 4.3 x 4.7 x $341 $ x 2.5 x $107 $145 YE 2009 YE 2010 YE 2011 YE 2012 YE /31/2014 YE 2009 YE 2010 YE 2011 YE 2012 YE /31/2014 (1) Debt to LTM Adjusted EBITDA as of March 31, 2014 includes estimated LTM EBITDA contribution from Anchor Drilling Fluids acquisition of $31.6 million. 18

20 Access To Capital Markets Funding Recent Debt Offering $900 million Senior Notes Offering March $900 million 6.50% senior unsecured notes due April Offering upsized from $850 to $900 million - Uses: Redemption of $500 million of 9.375% senior unsecured notes due 2019; Anchor Drilling Fluids acquisition; general partnership purposes ATM Equity Program $300 million ATM Program Announced March CLMT may sell up to $300 million of common units representing limited partner interests at the market, as market conditions warrant - Under no obligation to sell units under the ATM program - We sold no units under the program during 1Q14 Senior Secured Revolving Credit Facility $850 million Revolving Credit Facility Matures June Primary source of short-term funding (together with cash on hand and cash flow from operations) - Can be accessed for general partnership purposes, including acquisitions - More than $530 million of availability as of 3/31/14; No maintenance covenants 19

21 Balanced Capital Structure Actual Actual Actual Pro Forma ( 1) $ Millions 12/31/11 12/31/12 12/31/13 3/31/14 Cash $ 0.1 $ 32.2 $ $ ABL Revolver Borrowings $ - $ - $ - $ % Senior Notes due 2019 $ $ $ $ % Senior Notes due 2020 $ - $ $ $ % Senior Notes due 2022 $ - $ - $ $ % Senior Notes due 2021 $ - $ - $ Capital Leases $ 0.8 $ 5.5 $ 4.8 $ 4.2 Total Debt $ $ $ 1,129.8 $ 1,529.2 Partners Capital $ $ $ 1,062.8 $ 1,003.6 Total Capitalization $ 1,329.7 $ 1,770.3 $ 2,192.6 $ 2,532.8 LTM Adjusted EBITDA $211.1 $404.6 $241.5 $275.8 ( 1) Total Debt / LTM Adjusted EBITDA 2.8x 2.2x 4.7x 5.5x Total Debt / Total Capitalization 45% 50% 52% 60% (1) Includes estimated LTM EBITDA contribution from Anchor Drilling Fluids acquisition of $31.6 million. 20

22 Ample Liquidity To Support Growth Combined cash and availability on our revolving credit facility were more than $700 million at 3/31/14 ($MM) As of 12/31/13 As of 3/31/14 Q/Q Increase +$120 million Q/Q Increase +$62 million $472 $534 $593 $714 Q/Q Increase +$59 million $121 $180 Cash Revolver Availability Total Available Liquidity (Cash + Revolver) 21

23 Hedging Program Helps To Mitigate Market Volatility Have Hedged Half of Forecasted 2014 Fuels Production Hedged Volumes and Avg. Strike Price Per Barrel ($)(1) Gasoline Diesel Jet Gasoline = 3.7 mm $14.53 Diesel = 4.0 mm $27.57 Jet = 0.8 mm $24.82 Diesel = 5.8 mm $26.59 Jet = 1.0 mm $28.10 Diesel = 1.8 mm $ Q14-4Q (1) Various other diesel collars, gasoline collars, natural gas and crude oil basis swaps are disclosed in more detail in the Partnership s latest filings with the U.S. Securities and Exchange Commission. 22

24 Capital Spending Distribution (Historical & Forecast) Replacement, Environmental, Turnaround and Growth Capital Spending ($MM) Replacement & Environmental Turnarounds Growth projects Est Total CAPEX $ million $ Total CAPEX $243 million 2012 Total CAPEX $72 million $64 $69 $110 $50-60 $28 $15 $29 $ (Est.) 23

25 APPENDIX 24

26 EXHIBIT A: Adj. EBITDA and Distributable Cash Flow Reconciliation Quarter Ended $ in millions 3/31/13 6/30/13 9/30/13 12/31/13 3/31/14 Sales $ 1,319 $ 1,534 $ 1,506 $ 1,243 $ 1,341 Cost of sales 1,184 1,253 1,443 1,131 1,217 Gross profit Selling, general and administrative Transportation Taxes other than income taxes Other Total operating expenses Operating income (loss) (19) Other expenses (income) (8) (19) (16) (45) 85 Income tax expense Net income (loss) $ 46 $ 8 $ (35) $ (16) $ (50) Interest expense and debt extinguishment costs Depreciation and amortization Income tax expense EBITDA $ 100 $ 62 $ 19 $ 52 $ 96 Hedging adjustments - non-cash (26) 4 2 (8) (23) Amortization of turnaround costs and non-cash equity based compensation and other non-cash items Adjusted EBITDA $ 80 $ 70 $ 38 $ 53 $ 83 Replacement and environmental capital expenditures (1) (16) (16) (16) (16) (6) Cash interest expense (23) (23) (23) (21) (24) Turnaround costs (14) (33) (16) (6) (3) Income tax expense Distributable Cash Flow $ 26 $ (3) $ (16) $ 11 $ 49 (1) Replacement capital expenditures are defined as those capital expenditures which do not increase operating capacity or reduce operating costs and exclude turnaround costs. Environmental capital expenditures include asset additions that meet or exceed environmental and operating regulations. Investors may refer to our quarterly reports on form 10-Q for a reconciliation of distributable cash flow to net cash provided by operating activities. Note: Sum of individual line items may not equal subtotal or total amounts due to rounding. 25

27 EXHIBIT B: Adjusted Net Income Reconciliation Three Months Ended March 31, (In millions, except unit data) (Unaudited) Net income (loss) $ (50) $ 46 Debt extinguishment costs 90 Adjusted net income $ 40 $ 46 Allocation of adjusted net income: Adjusted net income $ 40 $ 46 Less: General partner s interest in adjusted net income 1 1 General partner s incentive distribution rights 4 3 Non-vested share based payments 0 0 Adjusted net income available to limited partners $ 35 $ 42 Weighted average limited partner units outstanding: Basic 69,622,884 62,831,155 Diluted 69,702,987 63,017,869 Limited partners interest basic adjusted net income per unit $ 0.50 $ 0.67 Limited partners interest diluted adjusted net income per unit $ 0.50 $

28 EXHIBIT C: Steady Resurgence In Distributable Cash Flow(1,2) Distributable Cash Flow Nearly Doubled Year-Over-Year in 1Q14 $49.4 $26.4 ($2.5) ($16.0) $10.6 1Q13 2Q13 3Q13 4Q13 1Q14 Reconciliation of Distributable Cash Flow ($MM): Y/Y Change Between 1Q13 and 1Q14 = $23.0 y/y increase $2.7 y/y increase ($10.6) y/y decrease $1.2 y/y increase ($10.9) y/y decrease Adjusted EBITDA Replacement/Environmental CAPEX Cash Interest Expense Turnaround Costs Distributable Cash flow (1) Distributable Cash Flow ( DCF ) is calculated by taking Adjusted EBITDA less replacement/environmental CAPEX, cash interest expense, turnaround costs and income tax expense. Replacement capital expenditures are defined as those capital expenditures which do not increase operating capacity or reduce operating costs and exclude turnaround costs. Environmental capital expenditures include asset additions to meet or exceed environmental and operating regulations. Cash interest expense represents consolidated interest expense less non-cash interest expense. (2) Income tax expense was $0.2 million in 1Q13 and 1Q14 27

29 EXHIBIT D: Improving Distribution Coverage Improved Distribution Coverage Supported By Less Planned Maintenance, Recovery In Adjusted EBITDA 1.24 x 0.94x 0.51x x x 0.20 x Avg. Distribution Coverage ( ) 1Q13 2Q13 3Q13 4Q13 1Q14 5-Year Compounded Annual Distribution Growth of Approximately 9% $1.81 per unit $1.84 per unit $2.00 per unit $2.42 per unit $2.74 per unit $2.74 per unit Q14 (Annualized) 28

30 Investor Relations Contact Noel Ryan Vice President, Investor & Media Relations Direct