Deutsche Bank U.S. Independent Refiners Conference January 9, 2014

Transcription

1 Deutsche Bank U.S. Independent Refiners Conference January 9, 2014

2 Forward-Looking Statements This Presentation has been prepared by Calumet Specialty Products Partners, L.P. (the Company or Calumet ) as of January 9, 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 Reports on Form 10-Q. The risk factors and other factors noted in our most recent Annual Report on Form 10-K and Quarterly Reports 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. 2

3 3 Partnership Overview

4 Partnership Overview About us» Master Limited Partnership; founded in 1990; IPO in 2006; Fortune 600 company; experienced management team Our competency» 160,000 bpd of petroleum-based specialty products and fuels production capacity in 12 domestic production facilities Our reach» More than 4,900 active customers (no >10% customers); More than 3,500 specialty products sold globally Our business segments» For the 9 mo. ended 9/30/13, Specialty Products = 59% of gross profit, while Fuel Products = 41% of gross profit Our sponsors» Fehsenfeld and Grube families own 100% of GP and 26% of LP Units; actively engaged in Partnership management 4

5 Balanced Niche-Asset Portfolio 5

6 Crude-Advantaged Production Assets 6

7 Fuel Products Refining Facilities 7

8 Specialty Products Refining Facilities 8

9 Specialty Products Processing Facilities 9

10 Specialty Products Blending & Packaging Facilities 10

11 Diversified Production Slate Production mix across fuels and specialty products 9 mo. ended 9/30/11 9 mo. ended 9/30/12 9 mo. ended 9/30/13 Fuels 43% Fuels 56% Fuels 62% Specialty 57% Specialty 44% Specialty 38% Production slate breakdown (as a % of total production) 9 mo. ended 9/30/11 9 mo. ended 9/30/12 9 mo. ended 9/30/13 24% 27% 4% 4% 7% 8% 12% 14% Other (1) Jet fuels Heavy fuel oils Solvents Lubricating oils Asphalt Diesel Gasoline (1) Other includes waxes, packaged and synthetic specialty products and fuels 11

12 Wide Array of Specialty Products 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. 12

13 13 Growth Opportunities

14 Unlocking Value For Our Investors 14

15 Organic Growth Projects Costs & Contributions Estimated Distribution of CAPEX on Organic Growth Projects By Year ($MM) % % % Estimated Total Cost and Adjusted EBITDA Uplift Resulting From Organic Growth Projects ($MM)(1) ~$ million ~$ million Capital Investment In Organic Growth Projects ( ) Annual Adjusted EBITDA Resulting From Organic Growth Projects (Upon Completion) (1) Includes 50% of the total estimated Adjusted EBITDA that the Partnership expects to generate from its 50/50 joint venture with MDU Resources with regard to the Dakota Prairie (North Dakota) refinery that is scheduled to come online during the fourth quarter

16 Organic Growth Projects Update Montana Refinery Expansion» Final engineering assessment completed; applying for permits» Anticipated completion in 1Q16» Est. cost = $400 million; Est. annual Adj. EBITDA = $ million Dakota Prairie Refinery (JV)» Focused on construction of refinery foundations and tanks» Anticipated completion in 4Q14» Est. cost = $75 million; Est. annual Adj. EBITDA = $35-45 million Missouri Esters Plant Expansion» Warehouse loading and tank farm work is in progress» Anticipated completion before year-end 2014» Est. cost = $40 million; Est. annual Adj. EBITDA = $10 million San Antonio Fuels Blending Project» Phase 1: Blend 3,000 bpd of finished gasoline (completed in 3Q13)» Phase 2: Blend 5,000 bpd of finished gasoline (completed by 1Q14)» Est. cost = $5 million; Est. annual Adj. EBITDA = $7-12 million San Antonio Crude Unit Expansion» Increase crude unit capacity from 14,500 bpd to 17,500 bpd» Anticipated completion during 1Q14» Est. cost = $9 million; Est. annual Adj. EBITDA = $5-10 million 16

17 17 Recent Developments

18 Bel-Ray Acquisition Summary Transaction Overview» Calumet acquired Bel-Ray Company, Inc. on December 10, 2013 financial terms were not disclosed» Bel-Ray is a privately-held, 70 year-old manufacturer of high performance synthetic lubricants based in New Jersey» Bel-Ray sells ~1,000 products into more than 100 countries; focused on Industrial, Mining and Powersports markets Transaction Rationale Expands our international sales» More than 50% of Bel-Ray s sales are made into int l markets» Less than 10% of our Branded/Packaged product sales are int l» Sales operations in the U.S., Chile, South Africa, Belgium, Australia Expands our end markets» Bel-Ray is an established player in Mining and Powersports markets» Provides entry into the performance greases market» We have no presence in these performance lubricants markets Expands our production capabilities» Bel-Ray owns/operates a 32-acre manufacturing facility in NJ» Convenient access to ports in New York, Newark and Philadelphia» Provides East Coast manufacturing center with export capability Significant cross-selling opportunities» Bel-Ray, Royal Purple and Penreco are complementary brands» Cross-selling opportunities through expanded customer base» Specific opportunities in international markets 18

19 Crude Oil Discounts Support Improved Refining Margins Gulf Coast 2/1/1 Crack Spread Above Normalized 4Q Levels ($ Per Barrel)(1) $30 $23 $16 $10 $7 $5 $9 4Q07 4Q08 4Q09 4Q10 4Q11 4Q12 4Q13 Key Grades of Crude Oil Trading At a Steep Discount To NYMEX West Texas Intermediate Crude Oil ($ Per Barrel)(1) $15 Bakken Bow River WCS $5 $0 $(5) $(15) $(25) $(35) $(45) $(4) $(5) $(8) $(12) $(12) $(10) $(15) $(14) $(15) $(20) $(19) $(20) $(24) $(25) $(28) $(29) $(30) $(32) $(35) $(38) Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 (1) Bloomberg, Platts; 4Q13 and December 2013 data as of 12/27/13 19

20 Declining Financial Impact From RFS Renewable Fuels Standard ( RFS ) Update» We regularly purchase RINs in the open market to cover our anticipated blending obligation under RFS» Since July 2013, RINs prices have declined dramatically following an EPA pronouncement on the 2014 RVO» Gross estimated RINs obligation is expected to be in the range of million RINs for 4Q13» Gross estimated RINs obligation is expected to be in the range of million RINs for the full-year 2013» Submitted petitions to EPA for hardship waivers at the Shreveport and San Antonio refineries in Oct. 2013» On 11/15/13, EPA announced a proposed reduction to 2014 RFS blending volumes Seeing Recent Decline In D6 Corn Ethanol RINs (Avg. price per RIN in $) $0.83 $0.86 $0.40 $0.30 $0.02 $0.04 $0.04 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Source: Bloomberg; 4Q13 data as of 12/27/13 20

21 21 Financial Overview

22 Consistent Cash Distribution, Compelling Yield Annual Growth In Cash Distribution Per Unit Compelling Dividend Yield vs. Alerian MLP Index(1) $2.42 $ % $1.80 $1.81 $1.84 $ % LTM 9/30/13 Alerian MLP Index Yield CLMT Yield Planned Maintenance Impacted LTM Average Distribution Coverage Ratio During 2013(2) $63 million in turnaround costs during the nine months ended 9/30/ x 1.4 x 1.5 x 1.4 x 1.4 x 1.8 x 2.0 x 1.9 x Shreveport Turnaround 1.6 x Superior Turnaround 0.9 x Montana Turnaround 0.3 x 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 (1) Dividend yield for Calumet was calculated based on the closing market price as of 1/7/14 (2) Distribution Coverage Ratio = Distributable Cash Flow / Cash Distributions 22

23 Key Performance Metrics Adjusted EBITDA ($MM)(1) Distributable Cash Flow ($MM)(1) $405 $281 $151 $138 $211 $280 $99 $76 $127 $ LTM (9/30/13) LTM (9/30/13) Cash Distributions ($MM) Distribution Coverage Ratio(2) $61 $66 $94 $149 $ x 1.2 x 1.4 x 1.9 x 0.3 x LTM (9/30/13) LTM (9/30/13) (1) Adjusted EBITDA and Distributable Cash Flow are non-gaap financial measures. For a reconciliation of Adjusted EBITDA and Distributable Cash Flow to their most directly comparable GAAP financial measure, please see Non-GAAP Financial Measures - Calumet Adjusted EBITDA Reconciliation (2) Distribution Coverage Ratio = Distributable Cash Flow / Cash Distributions 23

24 Key Credit Statistics Debt to Capital Ratio Debt/LTM Adj. EBITDA (Leverage) Ratio 50% 45% 49% 45% 50% 3.7 x 2.7 x 2.7 x 2.8 x 2.2 x 3.1 x 42% YE 2008 YE 2009 YE 2010 YE 2011 YE /30/13 Revolver Availability ($MM) YE 2008 YE 2009 YE 2010 YE 2011 YE /30/13 Fixed Charge Coverage Ratio $ x 4.4 x 4.3 x 4.3 x 4.7 x $341 $ x $52 $107 $145 YE 2008 YE 2009 YE 2010 YE 2011 YE /30/13 YE 2008 YE 2009 YE 2010 YE 2011 YE /30/13 24

25 Balanced Capital Structure Actual Actual Actual Pro Forma (A) $ Millions 12/31/11 12/31/12 9/30/13 9/30/13 Cash $ 0.1 $ 32.2 $ $ ABL Revolver Borrowings $ - $ - $ - $ % Senior Notes due 2019 $ $ $ $ % Senior Notes due 2020 $ - $ $ $ % Senior Notes due 2022 $ - $ - $ - $ Capital Leases $ 0.8 $ 5.5 $ 4.9 $ 4.9 Total Debt $ $ $ $ 1,129.9 Partners Capital $ $ $ 1,204.8 $ 1,190.1 Total Capitalization $ 1,329.7 $ 1,770.3 $ 2,084.7 $ 2,320.0 LTM Adjusted EBITDA $211.1 $404.6 $279.6 $279.6 Total Debt / LTM Adjusted EBITDA 2.8x 2.2x 3.1x 4.0x Total Debt / Total Capitalization 45% 50% 42% 49% (A) Pro forma reflects upsized $350 million 7.625% Senior Notes offering closed on 11/26/13. A portion of the net proceeds were used to repurchase $100 million of 2019 Senior Notes 25

26 Ample Liquidity To Support Growth Cash Revolver Availability $611 million $387 million $477 $355 $32 $134 12/31/2012 9/30/

27 Active Hedging Program Helps Mitigates Commodity Price Volatility Our Partnership s Hedging Strategy» Hedge up to 75% of anticipated fuels production» Opportunistically hedge crude oil differentials» Opportunistically hedge natural gas requirements 14.9 million barrels of fuels production hedged at an avg. implied crack spread of $26.93/bbl through 2016(1) 15,000 $28.17/bbl 17,752 $27.00/bbl 16,347 $26.59/bbl 3,000 $26.81/bbl 4Q (1) As of Sept. 30,

28 Capital Spending (Historical/Forecast) Capital Spending Overview» Completed significant turnarounds at Shreveport (1Q), Superior (2Q) and Montana (3Q) in 2013» Expect turnaround spending to decline in 2014 (vs levels)» Estimate $50-60 million/year of normalized capital spending, including maintenance and environmental expenditures Replacement, Environmental & Turnaround-related Capital Spending ($MM) Replacement & Environmental Turnarounds $124 million $67 $43 million $15 $57 $ (est.) 28

29 Q&A 29

30 30 Appendix

31 Non-GAAP Financial Measures Adj. EBITDA and DCF Reconciliation Year Ended December 31, LTM LTM LTM $ in millions /31/13 6/30/13 9/30/13 Sales $ 2,489 $ 1,847 $ 2,191 $ 3,135 $ 4,657 $ 4,806 $ 5,074 $ 5,399 Cost of sales 2,235 1,673 1,992 2,861 4,144 4,243 4,538 4,960 Gross profit Selling, general and administrative Transportation Taxes other than income taxes Insurance recoveries (9) Other Total operating expenses Operating income (loss) Other expenses (income) Income tax expense Net income $ 44 $ 62 $ 17 $ 43 $ 206 $ 200 $ 142 $ 65 Interest expense and debt extinguishment costs Depreciation and amortization Income tax expense EBITDA $ 135 $ 157 $ 108 $ 171 $ 384 $ 394 $ 352 $ 280 Hedging adjustments - non-cash (12) (14) (1) (4) (11) (33) Amortization of turnaround costs and non-cash equity based compensation and other non-cash items Adjusted EBITDA $ 127 $ 151 $ 138 $ 211 $ 405 $ 415 $ 363 $ 280 Replacement and environmental capital expenditures (1) (6) (16) (24) (24) (28) (39) (52) (61) Cash interest expense (31) (30) (27) (45) (79) (85) (91) (91) Turnaround costs (11) (7) (11) (14) (15) (21) (48) (64) Income tax expense - - (1) (1) (1) (1) (1) (1) Distributable Cash Flow $ 78 $ 99 $ 76 $ 127 $ 281 $ 268 $ 171 $ 62 (1) Replacement capital expenditures are defined as those capital expenditures which do not increase operating capacity or reduce operating costs and exclude turnaround costs. Note: Sum of individual line items may not equal subtotal or total amounts due to rounding. 31

32 Partnership Overview (1) Including the Heritage Group and the Fehsenfeld and Grube families or trusts established on their behalf. (2) Owned by The Heritage Group (51%), Fred M. Fehsenfeld Jr. or trusts for the benefit of his family (19%) and Grube Grat, LLC (30%). 32

33 For information, please contact: Noel Ryan Director, Investor/Media Relations