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Investor Presentation
December 2019
2
Forward-Looking Statements
This Presentation has been prepared by Calumet Specialty Products Partners, L.P. (the “Company” or “Calumet”) as of December 10, 2019. 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 subsequent Quarterly Reports on Form 10-Q. The risk factors and other factors noted in our most recent Annual Report on Form
10-K and subsequent 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 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 affiliates, officers or employees accepts any liability whatsoever arising
directly or indirectly from the use of this Presentation.
3
Investment Summary
• High-value specialty lubricants and chemicals
• Tailored products with “stickiness” and long-term defensibility
• Lower volatility and stable earnings
Refocused on “Core”
• Multi-year Self-Help program
• Product rationalization
• Yielding significant cash flow from operational improvements
Driving Stable Earnings & Margin Expansion
• Leverage down from 9x to ~4x in less than three years
• One notch upgrade from two ratings agencies
• Further deleveraging remains a top priority
Fortifying Balance Sheet to Support Future Growth
Pivoting from
Turnaround
Story to
Growth
4
Refocused on “Core”
▪ Divested four non-core assets since 2016 (San Antonio, Superior, Anchor & Dakota Prairie)
▪ Realigned organizational structure around dedicated business units with general managers
▪ Rebuilt culture and incentive programs around P&L ownership
▪ Focused on implementation of ERP system to improve data-driven business decisions
Specialty Volatility(2)
:11%: Standard Deviation of Annual EBITDA
Refining Volatility(1)
:64%: Standard Deviation of Annual EBITDA
(1) Merchant Refining Peer Group: PBF, HFC, PARR, PSX and DK
(2) Specialty Chemicals Peer Group: EMN, WDFC, HUN, IOSP, IPHS, VVV, KWR, NEU and NGVT
68% probability that EBITDA
will be +/- 11%
68% probability that EBITDA
will be +/- 64%
Today’s Calumet is less susceptive to commodity price volatility and is less capital intensive, which is driving
more predictable, stable earnings and cash flow
5
Driving Stable Earnings & Margin Expansion
$223
$235
$305
$230
$210
$318
$75
$125
$175
$225
$275
$325
TTM Pro Forma Adj EBITDA
TTM Pro Forma Adj EBITDA (ex-LCM/LIFO)
Trailing Twelve Month Pro Forma(1) Profitability ($MM)
(1) Pro forma adjusts for divestitures of Superior Refinery and Anchor Drilling Fluids USA, LLC in 4Q17.
(2) Net Cash from Operating Activities less Additions to Property, Plant, and Equipment.
(3) See Appendix to this presentation for GAAP to Non-GAAP reconciliations, including LCM/LIFO adjustments.
$220 million of free cash flow generated TTM
▪ Multi-year Self-Help programs driving organic expansion
Phase I (2016-’18) delivered EBITDA of $182MM; Phase II (2019-’21) is on target to deliver $100MM of EBITDA
▪ In process of rationalizing low margin SKUs across Specialty Products
▪ Margin improvement from shift to higher margin products and raw material optimization
Today’s Calumet is growing cash flows from ops., expanding margins, and building a platform for future growth
(3)
(3)
$(58)
$(8)
$17
$(48)$(37)
$(20) $(14)
$96
$18
$55 $54
Free Cash Flow(2)(3) $MM
Divestments Impact
9.0x
7.6x
6.6x
4.8x 4.9x5.4x
6.2x5.6x
4.9x 4.6x4.2x
1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
6
Fortifying Balance Sheet to Support Future Growth
$100
$125
$150
$175
$200
2017 2018 2019 Est. 2020 Forecast
Annual interest expense
declined ~$40MM since 2017
▪ Meaningful leverage reduction and balance sheet improvement
▪ One-notch ratings upgrade at Moody’s and S&P, which is facilitating better trade credit terms
▪ Recently refinanced $550MM of 2021 Notes in unsecured market
▪ Retired ~$750MM of gross debt since 2017
Net Debt to LTM Adj. EBITDA(1) (Leverage Ratio) Annual Interest Expense ($MM)
Committed to further leverage reduction moving forward
(1) See Appendix to this presentation for GAAP to Non-GAAP reconciliations, including LCM/LIFO adjustments.
As Reported Pro Forma
Outlook not drawn to scale
7
Specialty Volume Rationalization Driving Margin Improvement
(1) (1)
(1) Pro Forma excl. Lyondell business and low margin tolling volumes associated with packaged and synthetic specialty products.
(2) Outlook not drawn to scale, intended to be directional outlook only.
As Reported Pro Forma
Outlook not drawn to scale
▪ Sourcing/Product rationalization converted low-margin tolling volume to producer economics
▪ SKU rationalization and portfolio high-grading expected to continue driving margin expansion
▪ Gross Profit/bbl moving towards $40
TTM Specialty Sales Volume TTM Specialty Gross Profit/bbl
Outlook(2) Outlook(2)Outlook(2)
////
8
Calumet at a Glance
Production and Manufacturing Footprint
(1) LTM ended September 30, 2019.
(2) Defined as Adjusted EBITDA excluding LCM/LIFO. See Appendix to this presentation for GAAP to Non-GAAP reconciliations, including LCM/LIFO adjustments.
✓
✓
Leading independent producer
of high-quality, specialty
hydrocarbon products
Core Specialty Products
EBITDA of ~$200-$225 million,
representing ~2/3 of total
EBITDA
✓
Fuel Products refineries
benefit from cost-advantaged
crude feedstocks
✓
~3,400 unique specialty
products available in ~50
countries
Segments LTM EBITDA(1,2)
$320mm
Leverage (1,2) Enterprise Value
4.0x ~$1.6bn
Business Highlights
Calumet is first and foremost a Specialty lubricants and chemicals company
LTM Sales(1)
$3.5bn▪ Specialty Products
▪ Fuel Products
✓Focused on serving markets
that value superior quality and
service
9
Significant Multiple Expansion Opportunity
Source Data: Capital IQ, as of 12/2/2019. Calumet EV pro-forma to reflect redemption of senior secured notes.
Merchant Refiners consist of PBF, HFC, PARR, PSX and DK.
Specialty Chemicals consists of EMN, WDFC, HUN, IOSP, IPHS, VVV, KWR, NEU and NGVT.
4x
6x
8x
10x
12x
14x
MerchantRefining
Calumet SpecialtyChemicals
6.2x 5.8x
12.1x
EV/EBITDA (2020E) Summary:
✓ Less volatile
✓ Less capital intensity
✓ Higher, more sustainable margins
✓ Stronger, more consistent cash flow
✓ More predictable earnings
✓ Balance sheet moved from distressed to sustainable
✓ Committed to further leverage reduction
✓ Preparing platform for future growth
Valuation:
▪ Market-cap down over 20% since beginning of 2017
▪ Valuation more aligned with Merchant Refiners, rather than
Specialty Chemicals
Continued success in shift towards pure-play Specialty Chemicals is a significant multiple expansion
opportunity
10
Calumet as a Specialty Chemical Company
▪ Manufacturer of key components and solutions for numerous branded products that consumers use every day
✓ Highly customized formulations
✓ Stringent certifications, approvals and qualification requirements
✓ Very strong and sticky/loyal customer base
Proud to partner with market leading companies to help deliver some of the world’s most trusted products
NOTE: The above customer trademarks are the property of their respective owners.
11
Calumet Portfolio: Focus on Specialty Business
YTD EBITDA by Core vs. Non-core Business(1,2,3) YTD Core Business (1,3) Sales by Product
“PRICE-DRIVEN” “QUALITY-DRIVEN” “BRAND-DRIVEN”
Solvents Base Oils Specialty Oils and Waxes Finished Lubricants & Chemicals
▪ Specialty Solvents
▪ Paraffinic Base Oils
▪ Shreveport Fuels
▪ Naphthenic Base Oils
▪ White Oils
▪ Petrolatums
▪ Esters
▪ Waxes
▪ Finished Lubricants & Chemicals (Royal Purple,
Bel-Ray, TruFuel)
▪ Cosmetic and Pharma white oils (Penreco)
Higher MarginLower MarginPrioritizing Higher Margin Products
Lower VolumeHigher Volume
Core Specialty
Business(3)
~67%
Non-core Business
~33%
(1) LTM ended September 30, 2019
(2) See Appendix to this presentation for GAAP to Non-GAAP reconciliations, including LCM/LIFO adjustments.
(3) Core business defined as Specialty segment EBITDA (ex-LCM/LIFO) plus Shreveport Fuels, Non-core defined as Fuels less Shreveport Fuels
Shreveport Fuels 42%
Price-Driven 24%
Quality-Driven 20%
Brand-Driven14%
12
Specialty Products Value Chain
OIL
Calumet is one of the few producers that is fully integrated and realizes the full uplift from crude oil
VGOs(Vacuum Gas Oils)
Diesel
Gasoline
Asphalt
Base Oils
Solvents
Specialty Asphalt
Fuel Products Specialty Products
Finished Lubricants
& Chemicals
White Oils,
Pets, Gels
Margins
13
Shreveport Refinery – Integrated Core Asset
▪ Capacity: 60,000 bpd
▪ Specialty & Fuels facility
▪ Lower utilization rates due to Specialty orientation
Shreveport, Louisiana
▪ Integrated facility – produces products for both Specialty chemicals
and Fuels segments
− Integrally involved in Specialty business (producing paraffinic
base oils, white oils, etc.)
− Integrated with other Specialty plants by further upgrading
intermediate products and streams to finished product
▪ Focused on improving profitability through cost-advantaged crude
opportunities and operational improvements
− Processing WTI and Midland-WTI priced crudes
− Crude & PDA de-bottlenecking projects to improve sales mix and
Specialty yields
✓ Fuels generates much of the raw
material for Specialty production
further downstream
✓ Conversion of low-margin fuels to
higher-margin lubricants and
solvents
14
Self-Help Phase II: Driving Specialty Products EBITDA
Project Cost to Achieve Time to AchievePotential
Contribution(1,2) Description
Completed
Improvement
Projects
Completed in
20182019 $20-30 million
▪ New packaging lines at Porter and Shreveport facilities to improve
operating costs and expand capacity
▪ PDA modifications at Shreveport refinery to improve high value
specialty yields
▪ San Antonio refinery ISOM and Great Falls refinery naphtha project
to upgrade commodity intermediate streams
New Quick-Hit
Projects$15-25 million 2019-2021 $30-35 million
▪ New Versagel project in Karns City facility capitalizing on R&D
initiatives
▪ Four debottlenecking projects at Cotton Valley's solvent facility
decreasing feed costs and improving specialty yield
▪ Princeton facility vacuum tower project upgrading asphalt to
specialty products
Supply Chain
Initiatives$10-15 million 2019-2021 $30-35 million
▪ Leverage new ERP platform to drive transportation savings and
reduce procurement spend
▪ Streamline business by reducing non-core, high cost offerings
▪ Improve logistics infrastructure and reduce capital intensive off-sites
(1) Projected EBITDA contribution following completion of the projects
(2) See Appendix to this presentation for GAAP to Non-GAAP reconciliations, including LCM/LIFO adjustments.
Realized $27.8 million in EBITDA YTD 2019(2)
$16
$11
$8$29
$21 $23
$6
$25
$18
2017 2018 2019
Growth Maintenance Turnaround
15
Capital Expenditure for CorePro-Forma for Sale of Anchor, Superior and San Antonio Assets
▪ Maintenance plus Growth for Core Assets(1) averaged $34mm annually over trailing 5-year period (2014-18)
▪ Continued shift towards pure-play Specialty Chemicals meaningfully reduces capital intensity
Specialty Maintenance and Turnaround capital is considerably lower relative to Fuels
Lower annual capital needs allows for more higher-return growth capital spend in Core Assets
Note: Does not include capex associated with the divested assets (Anchor, Superior) and JVs. Numbers may not sum due to rounding.
(1) Core Assets are Specialty facilities which include Shreveport
$ in millions
16
Investment Summary
• High-value specialty lubricants and chemicals
• Tailored products with “stickiness” and long-term defensibility
• Lower volatility and stable earnings
Refocused on “Core”
• Multi-year Self-Help program
• Product rationalization
• Yielding significant cash flow from operational improvements
Driving Stable Earnings & Margin Expansion
• Leverage down from 9x to ~4x in less than three years
• One notch upgrade from two ratings agencies
• Further deleveraging remains a top priority
Fortifying Balance Sheet to Support Future Growth
Pivoting from
Turnaround
Story to
Growth
Appendix
17
18
Strong Specialty Products Portfolio
Specialty Products Business Units
DescriptionFinished Lubricants
& ChemicalsSpecialty Oils & Waxes Solvents Base Oils
Selected
Markets /
Products
Royal Purple
▪ High performance motor oil
▪ Industrial lubricants
▪ Compression and refrigeration oils
Belray
▪ Mining and food grade lubricants
and greases
▪ Powersports lubricants and related
products
TruFuel
▪ Pre-mixed engineered fuel
▪ Candles
▪ Adhesives
▪ Crayons
▪ Ointments for pharmaceuticals
▪ Sunscreen
▪ Cosmetics
▪ Food grade lubricating oils
▪ Food grade process oils
▪ Esters for synthetic aircraft turbine
oils
▪ Esters for lubrication oil for
refrigeration
▪ Vaseline
▪ Body washes
▪ Paint and coatings and stains
▪ Clean drilling fluids
▪ Water treatment chemicals
▪ Waterless hand cleaners
▪ Printer inks and alkyd resin diluents
▪ Automotive aftermarket
▪ Mining extraction solvents
▪ Aluminum rolling oils
▪ Hydraulic oils
▪ Railroad engine oils
▪ Cutting oils
▪ Engine oils
▪ Refrigeration oils
▪ Transformer oils
▪ Rubber process oils
▪ Open gear lubricants
▪ Two-cycle engine oils
▪ Viscosity improvers
▪ Defoamer oils
Consumer
Relationships
and
End Markets
Paintings and Coatings
Aluminum
Water Treatment
Oil and Gas
Hydraulic Oils
Cutting Oils
Motor Oils
Conversion to Greases
White Oils Upgrade
Automotive
Landscape
EquipmentMining
What We Do
▪ Manufacture and sell finished lubricant, chemical and engineered fuel products to
consumer, commercial and industrial trade channels
▪ Private label packaging
Automotive Landscape EquipmentMining
Specialty Lubricants
Performance Additives
Motor Oils/Filters
Transmission fluids
Gear Oil
Rust Preventives
Synthetic Lubricants
Bearing Greases
Gear Lubricants
Propel Lubricants
Hydraulic Oil
Precision-engineered
premixed fuel with synthetic
lubricants and advanced
stabilizers
▪ Royal Purple is a premium, high
performance brand with proprietary
technology
▪ Bel-Ray has a rich heritage in
performance greases, oils &
chemicals
▪ TruFuel is a category innovator that
delivers superior performance and
convenience
▪ Continue to be market leader in
engineered fuels and continue to
develop this key market
▪ Focus efforts on SKUs in
growth markets
▪ Focus on U.S. market and capture
further distribution and cost
advantages
▪ Refocus on high value sales in
growth market segments
▪ Simplify by shedding low margin
business (tolling, etc.)
Strategic InitiativesHow We Compete
Applications
Business StrategyOperational Footprint
19
Specialty Products – Finished Lubricants & Chemicals
What We Do
▪ Provide superior customer service in meeting needs of customers
▪ Develop custom blends and other products for customer’s unique needs
▪ Products include:
− Penreco white oils, petrolatums and gels
− Waxes
− Esters
− Biosynthetic Technologies (BST)
▪ Leverage unique new products for
customers (e.g. Versastique™)
▪ Capitalize on our R&D and custom
blends to sell the value of product
▪ Provide superior customer focus
and experience
▪ Penreco brand recognition since
late 1800s
▪ Leverage backwards integration
with other assets
▪ Use system capacity to grow esters
business & develop
Biosynthetic market
▪ Innovation & new products (e.g.
Versastique™)
▪ Debottleneck Versagel
▪ Improve supply chain in white
oils business
Strategic InitiativesHow We Compete
Customer Relationships
Business StrategyOperational Footprint
20
Specialty Products – Specialty Oils & Waxes
What We Do
▪ Offer a wide range of solvents for the following markets:
− Aluminum rolling oils; Mining extraction; Oil Field applications; Water
Treatment; Consumer goods (auto aftermarket); Paints & Coatings
▪ Primary products include specialty aliphatic solvents, and other branded solvents
such as Conosol®, Drakesol®, and Matgiesol®
▪ Calumet solvents can be found in many household brands
▪ Provide superior customer focus
and experience
▪ Cotton Valley is only dedicated
solvents facility in US (others run
batch production inside larger
refineries)
▪ Competitively advantaged as our
Cotton Valley facility uses crude oil
instead of diesel as a feedstock
▪ Target high value-add markets
where there is less supply and
higher barriers to entry
▪ Improve raw material flexibility for
advantaged crudes and feedstocks
▪ Improve products with product
segregation projects
Strategic InitiativesHow We Compete
Customer Relationships
Business StrategyOperational Footprint
21
Specialty Products – Solvents
Aluminum Mining Oil & Gas
Water Treatment Consumer Paints & Coatings
What We Do
▪ Offer extensive product line of both naphthenic base oils and paraffinic base oils
for the following markets:
− Passenger car engine oils; Heavy duty engine oils; Other automotive oils;
Marine oils; Rail oils; Industrial oils; Greases; Process oils; Shock
absorber oils
▪ Refined in-house and are used in a wide variety of applications ranging from
aviation hydraulic fluids and heat transfer fluids to industrial lubricants
▪ Calumet base oils can be found in many well-known brands:
▪ Provide superior customer focus
and experience
▪ Deliver product in size/container
and labeling that customer desires
▪ High grade sales into markets that
value higher solvency and broad
viscosity ranges which tend to have
stickier customer relationships
▪ Debottleneck paraffinic and
naphthenic capacity
▪ Improve raw material flexibility for
advantaged crudes
▪ Reduce costs through better
utilization and supply chain
efficiency
Strategic InitiativesHow We Compete
Key End Markets
Business StrategyOperational Footprint
22
Specialty Products – Base Oils
▪ White oils upgrade
▪ Conversion to
Greases
▪ Motor Oils
▪ Industrial Oils
▪ Hydraulic Oils
▪ Railroad Engine Oils
▪ Shock Absorber Oils
▪ Cutting Oils
23
Strategic Market Position Focused on Base Oil Industrial Segment
▪ Naphthenic oils are preferred in applications where a higher solvency is needed and volatility is not an issue (e.g. soluble
metalworking oils, rubber process oils, transformer oils)
▪ Group I paraffinic oils are preferred for applications requiring intermediate solvency and better high temperature properties
(e.g. forming oils, industrial engine oils, diluent oils)
Automotive52%
Others, 7%
Group II, 21%
Naphthenics, 22%
Group I, 50%
Industrial48%
Source: Kline & Company, Global Lubricant Basestock Report
Calumet
strategically
targets the
industrial
segment within
base oils, where
our products
have a technical
and performance
advantage
Global Base Oil Consumption
1.7x 1.7x 1.7x 1.6x 1.5x1.7x
2.0x 2.1x2.3x
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
Divestments Impact
6.6x4.8x 4.9x 5.4x 6.2x 5.6x 4.9x 4.6x 4.2x
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
Net Debt to LTM Adj. EBITDA (Leverage) Ratio(1) (As Reported)
24
Improving Credit Metrics
(1) See Appendix to this presentation for GAAP to Non-GAAP reconciliations.
(2) Fixed Charge Coverage Ratio is defined as Adjusted EBITDA divided by consolidated interest expense (plus capitalized interest), neither of which has been pro-forma adjusted for acquisitions or refinancing activity.
(3) Excludes $350 million of restricted cash.
▪ Improved leverage to 4.2x (4.0x ex-LCM/LIFO)
▪ Refinanced $550 million of 2021 notes
▪ Lower working capital and access to trade credit
boosting liquidity
▪ Moody's upgrade CFR to B3 in July 2019
Liquidity Availability ($MM) Fixed Charge Coverage Ratio(2)
0 0(2) 0(2) 0 0 0 0 0 0
$413 $416 (3)$458 (3)
$382 $406
$451 $460 $473 $438
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
25
Improved Specialty Profitability YTD ($MM)
(1) See Appendix to this presentation for GAAP to Non-GAAP reconciliations
(2) Includes costs related to transportation
26
Strong Fuels Profitability YTD Despite Headwinds ($MM)
(1) See Appendix to this presentation for GAAP to Non-GAAP reconciliations
(2) Includes hedging
(3) Includes RINs
(4) Includes costs related to transportation
27
Adjusted EBITDA Bridge – YTD 3Q19 vs. YTD 3Q18 ($MM)
(1) Adjusted $(2.0) million from the divestiture of Anchor Drilling Fluids USA, LLC
(2) Includes plant operating and maintenance costs including RINs activities
(3) Includes transportation costs and 2017 RINs activities related to the Superior refinery in 1Q18
(4) See Appendix to this presentation for GAAP to Non-GAAP reconciliations
28
Reconciliation of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow
Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual
($ in millions) 3/31/17 6/30/17 9/30/17 12/31/17 3/31/18 6/30/18 09/30/18 12/31/18 03/31/19 06/30/19 09/30/19
Net cash provided by (used in) operating activities
$ (40.7) $ 5.1 $ 32.3 $ (23.2) $ (19.1) $ (4.2) $ (6.0) $ 104.5 $ 27.4 $ 62.2 $ 64.3
Less:
Additions to property, plant and equipment (cash used in investing activities)
16.9 12.8 15.6 24.7 17.6 15.7 8.0 8.5 9.5 7.6 10.3
Free Cash Flows $ (57.6) $ (7.7) $ 16.7 $ (47.9) $ (36.7) $ (19.9) $ (14.0) $ 96.0 $ 17.9 $ 54.6 $ 54.0
29
Reconciliation of Net Income (Loss) to Adj. EBITDA & Pro Forma Adj. EBITDA (ex-LCM/LIFO)
($ in millions) 9/30/17 12/31/17 3/31/18 06/30/18 09/30/18 12/31/18 03/31/19 06/30/19 09/30/19
Net income (loss) $ (23.6) $ (83.6) $ (4.8) $ (51.9) $ (16.5) $ 18.1 $ 16.4 $ (16.8) $ (4.6)
Add:
Interest expense $ 47.4 $ 47.3 $ 45.2 $ 37.5 $ 37.7 $ 35.1 $ 32.3 $ 33.1 $ 33.8
Depreciation and amortization 48.6 37.9 29.7 29.5 29.6 29.3 28.2 27.0 27.4
Income tax expense (benefit) (0.1) — (0.2) 0.8 0.4 (0.3) (0.1) 0.3 0.5
EBITDA $ 72.3 $ 1.6 $ 69.9 $ 15.9 $ 51.2 $ 82.2 $ 76.8 $ 43.6 $ 57.1
Add:
Unrealized (gain) loss on derivative Instruments
$ — $ (1.4) $ (2.0) $ (0.8) $ 2.4 $ (29.8) $ 2.6 $ 12.2 $ 5.4
Realized (gain) loss derivative activities, not included in net income (loss) or settled in a prior period
9.7 — — 2.1 0.7 (2.8) — - —
Amortization of turnaround costs 6.4 3.9 3.3 2.7 2.7 4.1 4.8 5.6 6.1
(Gain) loss on debt extinguishment costs — — 0.6 58.2 — — (0.4) (0.3) —
(Gain) loss on the sale of businesses, net — (173.4) 1.6 (1.8) (3.4) 2.9 — — —
Non-recurring charges — — — — — — — — 1.3
Gain on sale of unconsolidated affiliate (2) — — — — — — (1.2) — —
Loss on impairment and disposal of assets — 206.9 0.5 0.7 0.9 3.2 11.7 16.2 3.2
Equity based compensation and other items 7.3 3.6 1.1 1.9 (0.2) (4.1) 3.4 2.3 0.4
Adjusted EBITDA $ 95.7 $ 41.2 $ 75.0 $ 78.9 $ 54.3 $ 55.7 $ 97.7 $ 79.6 $ 73.5
Less:
Discontinued operations Adjusted EBITDA 6.4 (0.3) (1.4) (0.4) (0.2) 2.0 — — —
Superior Adjusted EBITDA 25.6 16.8 — — — — — — —
Total pro forma Adjusted EBITDA(1) 63.7 24.7 76.4 79.3 54.5 53.7 97.7 79.6 73.5
LCM inventory adjustments (7.3) (14.1) (3.1) (14.0) 2.3 45.4 (38.9) (2.6) 2.7
LIFO inventory layer adjustments 0.8 2.9 — — 0.4 5.9 0.9 — —
Less: Superior LIFO/LCM (5.0) 0.5 — — — — — — —
Pro forma Adjusted EBITDA (excluding LCM/LIFO)(1) 52.2 14.0 73.3 65.3 57.2 105.0 59.7 77.0 76.2
Adjusted EBITDA (excluding LCM/LIFO) 89.2 30.0 71.9 64.9 57.0 107.0 59.7 77.0 76.2
(1) Pro forma adjusts for divestitures of the Superior Refinery and Anchor Drilling Fluids USA, LLC
(2) In 2018, the Company and The Heritage Group formed Biosyn for the purposes of acquiring Biosynthetic Technologies, a startupcompany which developed an intellectual property portfolio for the manufacture of renewable-based and biodegradable esters. The initialcash investment of $3.8 million made by the Company into Biosyn was expensed in the period ended March 31, 2018 given Biosyn’soperations were all related to research and development. The Company accounts for its ownership in Biosyn under the equity method ofaccounting. During March 2019, the Company sold its investment to The Heritage Group and recognized a gain of $5.0 million. Forcomparability purposes, $3.8 million of the gain is included in Adjusted EBITDA for the three months ended March 31, 2019.
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Capital Structure Overview
Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual
($ in millions) 3/31/17 6/30/17 9/30/17 12/31/17 3/31/18 6/30/18 09/30/18 12/31/18 03/31/19 06/30/19 09/30/19
Cash $ 4.6 $ 26.6 $ 26.5 $ 514.3 $ 496.6 $ 38.8 $ 65.5 $ 155.7 $ 152.9 $ 173.5 $ 164.2
ABL Revolver Borrowings $ 39.2 $ 0.4 $ 0.1 $ 0.2 $ — $ 0.1 $ 0.1 $ — $ — $ — $ —
6.50% Senior Notes due 2021 900.0 900.0 900.0 900.0 900.0 900.0 900.0 900.0 876.8 810.2 761.2
7.625% Senior Notes due 2022 350.0 350.0 350.0 350.0 350.0 350.0 350.0 350.0 350.0 350.0 350.0
7.75% Senior Notes due 2023 325.0 325.0 325.0 325.0 325.0 325.0 325.0 325.0 325.0 325.0 325.0
11.50% Senior Secured Notes due 2021 400.0 400.0 400.0 400.0 400.0 — — — — — —
Note Payable - related party — — — — — — — — — — —
Capital Leases 45.9 45.2 44.7 44.0 43.7 42.2 41.8 42.4 3.3 3.0 2.8
Other 7.6 7.3 6.9 6.6 6.3 5.9 5.5 5.2 4.9 4.5 4.1
Total Debt $ 2,067.7 $ 2,027.9 $ 2,026.7 $ 2,025.8 $ 2,025.0 $ 1,623.2 $ 1,622.4 $ 1,622.6 $ 1,560.0 $ 1,492.7 $ 1,443.1
Partners’ Capital $ 213.3 $ 224.0 $ 201.6 $ 119.9 $ 115.4 $ 66.6 $ 51.2 $ 65.7 $ 83.5 $ 67.1 $ 62.8
Total Capitalization $ 2,281.0 $ 2,251.9 $ 2,228.3 $ 2,145.7 $ 2,140.4 $ 1,689.8 $ 1,673.6 $ 1,688.3 $ 1,643.5 $ 1,559.8 $ 1,505.9
LTM Adjusted EBITDA (as reported) $ 230.3 $ 261.9 $ 303.7 $ 317.2 $ 313.5 $ 290.8 $ 249.4 $ 263.9 $ 286.6 $ 287.3 $ 306.5
Net Debt / LTM Adjusted EBITDA (as reported) 9.0x 7.6x 6.6x 4.8x 4.9x 5.4x 6.2x 5.6x 4.9x 4.6x 4.2x
LTM Adjusted EBITDA (excluding LCM/LIFO)
$ 211.9 $ 280.2 $ 305.8 $ 291.5 $ 288.7 $ 256.0 $ 223.8 $ 300.8 $ 288.6 $ 300.7 $ 319.9
Net Debt / LTM Adjusted EBITDA (excluding LCM/LIFO) 9.7x 7.1x 6.6x 5.2x 5.3x 6.2x 7.0x 4.9x 4.9x 4.4x 4.0x
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Key Market Indices for Calumet
Specialty Products
Fuel Products
Base Oils
Specialty Solvents
Specialty White Oils,
Petrolatums and Waxes
ICIS Group I 200 (Paraffinic)ICIS Pale 500
(Naphthenic)
Ultra Low Sulfur Diesel
ICIS Group II 600
Crack Spreads
Crude Differentials
Rack Differentials
2:1:1 Gulf Coast
WTI / WCS (Great Falls)
Great Falls vs. Gulf Coast
Midland WTI (Shreveport)
Shreveport vs. Gulf Coast
ICIS Group I 600 (Paraffinic)
WTI / LLS (Princeton &
Cotton Valley)
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Fuel Products Portfolio
▪ Capacity: 60,000 bpd
▪ Specialty & Fuels facility
▪ Lower utilization rates as primary Specialty
facility in system
Shreveport, Louisiana
▪ Capacity: 25,000 bpd
▪ Fuels refinery; only remaining pure-play
fuels facility in the portfolio
▪ Runs up to 100% cost-advantaged WCS-
priced crudes
Great Falls, Montana
▪ Cost-Advantaged Crude Opportunities
− Two facilities: One pure-play fuels refinery & one integrated facilities (specialty chemicals and fuels products)
− Integrally involved in Specialty business (base oils, white oils, etc.)
− Integrated with other Specialty plants by further upgrading intermediate products
− Focused on capturing cost-advantaged crude opportunities
• Permian: Processing ~WTI and Midland-WTI priced crudes
• Heavy Canadian: Processing ~25,000 bpd of WCS-linked crude
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Contact Information
Joe Caminiti or Chris Hodges
Alpha IR Group
312-445-2870
Email: [email protected]
INVESTOR RELATIONS
