PowerPoint Presentationcalumetspecialty.investorroom.com/download/March+2020... · 2020-03-18 · 2 This Presentation has been prepared by Calumet Specialty Products Partners, L.P

Investor PresentationMarch 2020

2

This Presentation has been prepared by Calumet Specialty Products Partners, L.P. (the “Company,” “Calumet,” "we," "our," or like terms)as of March 18, 2020. 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-lookingstatements. These forward-looking statements discuss future expectations or state other “forward-looking” information and involve risksand 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 Current Reports on Form 8-K. The risk factors and other factorsnoted in our most recent Annual Report on Form 10-K and Current Reports on Form 8-K could cause our actual results to differ materiallyfrom 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 materiallyfrom those suggested in any forward-looking statement. All subsequent written and oral forward-looking statements attributable to us or topersons acting on our behalf are expressly qualified in their entirety by the foregoing. Existing and prospective investors are cautioned notto 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 orcircumstances after the date of this Presentation or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Measures:

Adjusted EBITDA, Pro forma Adjusted EBITDA, Adjusted EBITDA (ex-LCM/LIFO), Adjusted EBITDA margin, Adjusted EBITDA (ex-

LCM/LIFO) margin, Gross profit per barrel (ex-LCM/LIFO), Adjusted net income, Free Cash Flow and leverage ratio are non-GAAP

financial measures provided in this Presentation. Reconciliations to the most comparable GAAP financial measures are included in the

Appendix to this Presentation. These non-GAAP financial measures are not defined by GAAP and should not be considered in isolation or

as an alternative to net income (loss) or other financial measures prepared in accordance with GAAP. We do not provide reconciliation of

non-GAAP financial measures on a forward-looking basis as it is impractical to do so without unreasonable effort.

Forward Looking Statements

3

Investment Summary

3

01

02

03

• High-value specialty lubricants and chemicals

• Tailored products with “stickiness” and long-term defensibility

• Lower volatility and stable earnings

• Niche applications in high-margin end markets

Strengthening our “Core” Business

• Earnings & cash flow weighted towards higher-multiple specialty products

• Expanding margin from mix improvement & product upgrading

• Yielding significant cash flow through operational improvements

• Self-Help program now part of culture

Growing Cash from Operations

• Leverage down from 9x to 4x in less than three years

• Upgraded by Moody’s; ‘Positive Outlook’ revision by S&P

• Further deleveraging remains a top priority

• Adequate liquidity & no maturities until 2022

Fortifying Balance Sheet to Support Future Growth

4

Hardening Calumet for a Black Swan Event

Calumet is much better situated to handle market downturns

Reduced Inventories• Better business planning & ERP efficiencies

• Changed asphalt strategy~ $100 MM

Increased Working Capital

Flexibility

• Added Supply & Offtake Agreements

• Increased revolver capacity $100 million~ $200 MM

Reduced Portfolio Volatility• Divested Dakota Prairie, Superior, Anchor and San Antonio

• Grew Specialty and strengthened Shreveport Fuels~ $100 MM

Reduced Capex • Reduced capital spending from $425 million in 2015 to

$83 million(1) in 2019

~ $250 MM

Net Benefit

(1) Proforma for the sale of San Antonio

5

Strengthening the Core Business

(1) Excludes non-cash LCM/LIFO adjustments. See Appendix to this presentation for GAAP to Non-GAAP reconciliations.

Core Specialty business has become a stronger base and larger contributor to portfolio

13.9%

15.4%

2017 2019

Adj. EBITDA (%)

$31.21$34.41

2017 2019

Gross Profit / bbl ($)

$180.4

$207.9

2017 2019

Adj. EBITDA ($MM)(1) (1)

+150

bps

up

15.2%

up

10.2%

Specialty Segment

(1)

6

Specialty Products Value Chain

Prioritizing Higher

Margin Products

Calumet fully integrates and

realizes the full uplift from

crude oil

• Aliphatic Solvents

• Paraffinic Base Oils

Price

Driven • White Oils

• Naphthenic Base Oils

• Specialty Solvents

Quality

Driven

• Waxes

• Gels

• Petrolatums

Brand

Driven

• TruFuel Engineered Fuel

• Royal Purple Lubricants

• Penreco Cosmetic & Pharma

• Orchex Agriculture Spray Oils

Formulation

Driven

Lower Margins Higher Margins

✓

7

Specialty Business - Finished Lubricants & Chemicals

What We Do

▪ Manufacture finished lubricants, chemicals and

engineered fuel products

▪ Provide high-quality products in various package

sizes and sales channels to consumer, commercial

and industrial trade channels

▪ Private label packaging

▪ Expand production capacity in engineered fuels

(TruFuel)

▪ Product and application focus towards highest value

▪ Focus efforts on SKUs in growth markets

Applications & End Markets

Growth Plan

▪ Specialty Lubricants

▪ Landscape Equipment

▪ Synthetic Oils

▪ Mining Lubricants

▪ Performance Additives

▪ Transmission Fluids

▪ Rust Preventatives

▪ Gear Oils

8

Specialty Business - Waxes

What We Do


Growth Plan

▪ Manufacture paraffin waxes

▪ Offer formulation solutions

▪ Provide custom blending and packaging

▪ Vertically integrate

▪ Develop further innovative solutions

▪ Focus further down the value chain

▪ Candles

▪ Adhesives

▪ Packaging

▪ Crayons

▪ Paper

▪ Release Agents

▪ Polishes

▪ Water Repellents

9

Specialty Business - Specialty Oils

What We Do


Growth Plan

▪ Manufacture white oils, petrolatums, gels and esters

▪ Develop innovative products

▪ Create custom blends and solutions

▪ Focus on specialty gels and petrolatums

▪ Target value-driven industries food, pharma and

personal care

▪ Leverage backward integration

▪ Pharmaceuticals

▪ Ointments

▪ Lotions

▪ Agriculture

▪ Food

▪ Lip Care

▪ Cleaners

▪ Plastic

10

Specialty Business - Base Oils

What We Do


Growth Plan

▪ Specialty Lubricants

▪ Shock Absorbers

▪ Refrigeration Oils

▪ Railroad Engine Oils

▪ Agricultural Oils

▪ Cutting Fluids

▪ Transformer Oils

▪ Greases

▪ Manufacture paraffinic and naphthenic base oils

▪ Produce a wide viscosity and high solvency base oil

offering

▪ Offer customized solutions

▪ Higher sales volumes through de-bottlenecking

▪ Highlight competency in high viscosity and solvency

▪ Expand contracted customers in specialty

applications

11

Specialty Business - Solvents

What We Do


Growth Plan

▪ Manufacture wide range of hydrocarbon solvents

▪ Provide value-added blending and logistic services

▪ Technical insight and support

▪ Continue investing further in supply chain capabilities

▪ Focus on heavy-molecule applications

▪ Feedstock optimization

▪ Paint & Coatings

▪ Aluminum

▪ Adhesives

▪ Water Treatment

▪ Consumer

▪ Oil & Gas

▪ Mining

▪ Extraction

12

$201

$301

$263

$223

$264

$305

FY'17 FY'18 FY'19

Adj. EBITDA (ex-LCM/LIFO) Adj. EBITDA

Growing Cash Flows

12

(1) Pro forma adjusts for divestitures of Superior Refinery and Anchor Drilling Fluids USA, LLC in 4Q17.

(2) See Appendix to this presentation for GAAP to Non-GAAP reconciliations

(3) Includes interest from $400 million of retired 11.50% Secured Notes.

Generating Meaningful Free Cash Flow(2)

($MM)

▪ Multi-year Self-Help programs driving organic expansion

Phase I (2016-18) delivered Adj. EBITDA of $182MM; Phase II (2019-21) targeted to deliver $100MM of Adj. EBITDA

▪ 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 investing in platforms for future growth

Growing Adj. EBITDA(1)(2)

: 2017 – 2019 ($MM)

($96.5)

$25.4

$137.0

FY'17 FY'18 FY'19(3) (3)

(1)(2) (1)(2)

13


13

9.0x

7.6x

6.6x

4.8x 4.9x5.4x

6.2x5.6x

4.9x 4.6x4.2x 4.0x

$100

$125

$150

$175

$200

2017 2018 2019 2020 Forecast

Annual interest expense

declined ~$40MM since 2017

Annual Interest Expense ($MM)

▪ Meaningful leverage reduction and balance sheet improvement

▪ One-notch ratings upgrade at Moody’s and S&P, facilitating better trade credit terms

▪ Recently refinanced $550MM of 2021 Notes in unsecured market

▪ Retired ~$750MM of gross debt since 2017

Committed to further leverage reduction moving forward

Net Debt to LTM Adj. EBITDA(1) (Leverage Ratio)

(1) Excludes non-cash LCM/LIFO adjustments. See Appendix to this presentation for GAAP to Non-GAAP reconciliations.

(2) Based on current capital structure. Actual interest expense may be higher or lower depending on any changes to our capital structure.

(2)

14

Significant Multiple Expansion Opportunity

14Source Data: Capital IQ, as of 12/31/19.

Merchant Refiners consist of PBF, HFC, PARR, PSX and DK.

Specialty Chemicals consists of EMN, WDFC, HUN, IOSP, VVV, KWR, NEU and NGVT.

Five years of Results (2015 to 2019) :

✓ 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 does not reflect earnings or portfolio profile

▪ Valuation more aligned with Merchant Refiners, rather than

Specialty Chemicals

4x

6x

8x

10x

12x

14x

Merchant Refining Calumet SpecialtyChemicals

6.3x 6.0x

11.8x

EV/EBITDA (2020E)

Continued shift towards pure-play Specialty Chemicals is a significant multiple expansion opportunity

15

Investment Summary

15

01

02

03

• High-value specialty lubricants and chemicals

• Tailored products with “stickiness” and long-term defensibility

• Lower volatility and stable earnings

• Niche applications in high-margin end markets

Strengthening our “Core” Business

• Earnings & cash flow weighted towards higher-multiple specialty products

• Expanding margin from mix improvement & product upgrading

• Yielding significant cash flow through operational improvements

• Self-Help program now part of culture

Growing Cash from Operations

• Leverage down from 9x to 4x in less than three years

• Upgraded by Moody’s; ‘Positive Outlook’ revision by S&P

• Further deleveraging remains a top priority

• Adequate liquidity & no maturities until 2022


Pivoting from

Turnaround

Story to Growth

Appendix

16

17

Calumet at a Glance

Production and Manufacturing Footprint

(1) LTM ended December 31, 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 ~$215-$240 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)

$263mm

Leverage (1) 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

18

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)

Acquired Paralogics, LLC in Q1 2020

19

Specialty wax production

Import value chain logistics

Blending and Formulating

Fully integrated wax

solutionsSpecialty wax

production

Blending &

Formulating

Packaging &

Distribution

Fully integrated wax

solutions

[---------------------------------------------------- Wax Business Value Chain ------------------------------------------------------]

▪ Paralogics, LLC adds:

― 20 MM pounds wax blending capacity

― Formulating and blending expertise

― Packaging & distribution capability

▪ Current Calumet wax business

― 100 MM pounds per year production

― $119 MM 2019 revenues

▪ Investment Logic:

― Penetrate higher margin end markets

― Value chain extension into packaging and blends

― Additional technical expertise in high margin formulations

― Synergies with Calumet wax business

― Adds additional logistics hub

20

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

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)

21

$262.8 MM of Adjusted EBITDA(2)

✓ Specialty Adj. EBITDA(2) of $207.9 MM; up 24% Y/Y

✓ Fuels Adj. EBITDA(2) of $152.5 MM

✓ Strong Cash Flow from Operations of $191.9 MM

2019 Fourth Quarter & Full Year Highlights (1)

21

Fourth Quarter 2019

$49.9 MM Adjusted EBITDA(2)

✓ Specialty Adj. EBITDA(2) of $42.8 MM

✓ Fuels Adj. EBITDA(2) of $28.7 MM

✓ Performed well through Shreveport turnaround

Strategy & Balance Sheet

✓ Divested San Antonio refinery

✓ Refinanced 2021 notes in unsecured market

✓ Revenue growth in specialty waxes business

Full Year 2019

Strategy & Balance Sheet

✓ Leverage down to 4.0x (4.6x ex-LCM/LIFO)

✓ Reduced debt $391 MM & interest $21 MM Y/Y

✓ Upgraded ratings and outlook by Moody’s & S&P

Specialty Margin Growth

✓ Specialty sales volume growth of 4%

✓ Gross profit/bbl(2) of $34.41 vs. $32.11 Y/Y

✓ Adj. EBITDA(2) margin of 15.4% vs.12.2% Y/Y

Specialty Margin Growth

✓ Adj. EBITDA(2) margin of 14.2% up 50 bps Y/Y

✓ Rationalized 2,100 bpd of low-margin volume

✓ Backfilling capacity with higher-margin production

(1) This presentation reflects the addition of our Corporate segment, which was added in the third quarter of 2019

(2) Excludes non-cash LCM/LIFO adjustments. See Appendix to this presentation for GAAP to Non-GAAP reconciliations

22

M&A

Opportunistic Growth

Projects

Operations Excellence

Self-Help Delivery

• Inventories(2) reduced $16 MM Y/Y

• Debottleneck completed at

Shreveport & Finished Lubricants

facilitiesStrong Utilization• Record(1) Fuels sales

• Record Great Falls throughput

• Record Cotton Valley crude runs

• Record TruFuel sales

• Record Dickinson throughput

Strong Cash Flows• Highest Free Cash Flow(3)

since 2012

• Highest Cash Flow from

Operations since 2015

Better Cost Management

• Transportation costs down $14 MM Y/Y

• Interest expense down $21 MM Y/Y

Record Safety Performance

• Best performance for personal safety

• Best performance for process safety

Executing Operations Excellence

(1) Pro forma for divestments of Dakota Prairie and Superior refineries

(2) As stated in the Statement of Cash Flows

(3) Cash Flow from Operating Activities less Additions to property, plant and equipment Roadmap for Growth

23

Adjusted EBITDA(1) Bridge – FY19 vs. FY18 ($MM)


(2) Includes hedging

(3) Includes plant operating and maintenance costs including RINs activities

(4) Includes reduced transportation costs, offset by 2017 Superior RINs exemption received in 2018

$300.8

($79.8)

$11.7

$37.7

$19.0

($17.9) ($2.5)($6.2)

$262.8

FY18 Adj. EBITDA (1) Fuels Margin (2) Specialty Margin (2) Fuels Volume Specialty Volume Operating Costs (3) Other (4) SG&A FY19 Adj. EBITDA (1)

24

Improved Specialty Performance FY19 vs. FY18 ($MM)


(2) Includes hedging

(3) Includes costs related to transportation, and other expenses

$168.3

$11.7

$19.0 $2.2 $8.1

($1.4)$207.9

FY18 Adj. EBITDA (1) Specialty Margin (2) Specialty Volume Operating Costs Other (3) SG&A FY19 Adj. EBITDA (1)

25

Self-Help in Action: $40MM Adj. EBITDA Goal in 2020

[-------- Specialty Focused -------]

Cost Reductions

Raw Material Optimization

Margin Enhancements

Facilitated Non-Core Asset Sales

Specialty Growth Initiatives

Two Debottlenecking Projects

Further Rationalizing Low Margin Products

Additional Finished Lubricant Expansion

Cost Reduction Plan(1)

Reducing Professional Services

Facility Fixed Costs

Corporate Staffing

2020 Goal: $40 MM

Adj. EBITDA

(1) Anticipate approximately $10 million in one-time costs to implement

2021

Self-Help Phase II(2019-2021)

On track for $100 MM Adj.

EBITDA Goal

2019: $30 MM 2020 2021

Self-Help Phase I(2016-2018)

Delivered $182 MM

Adj. EBITDA

26

Our Strategy & Roadmap for Growth

▪ Focus portfolio on high-return,

niche specialty markets where

we are competitively advantaged

▪ Capture one-to-two-year

payouts with low capital

investment requirements

▪ Reduce costs, optimize

raw materials and

enhance margins

Strategic

M&A

Opportunistic Growth

Projects

Operations Excellence

27

($ 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 12/31/19

Cash $4.6 $26.6 $26.5 $514.3 $496.6 $38.8 $65.5 $155.7 $152.9 $173.5 $164.2 $19.1

ABL Revolver Borrowings $39.2 $0.4 $0.1 $0.2 $— $0.1 $0.1 $— $— $— $— $—

7.625% Senior Notes due 2022 350.0 350.0 350.0 350.0 350.0 350.0 350.0 350.0 350.0 350.0 350.0 350.0

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 —

7.75% Senior Notes due 2023 325.0 325.0 325.0 325.0 325.0 325.0 325.0 325.0 325.0 325.0 325.0 325.0

11.00% Senior Notes due 2025 — — — — — — — — — — — 550.0

11.50% Senior Secured Notes due 2021 400.0 400.0 400.0 400.0 400.0 — — — — — — —

Note Payable - related party — — — — — — — —

Finance Leases 45.9 45.2 44.7 44.0 43.7 42.2 41.8 42.4 3.3 3.0 2.8 2.7

Other 7.6 7.3 6.9 6.6 6.3 5.9 5.5 5.2 4.9 4.5 4.1 3.8

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 $1,231.5

Partners’ Capital $213.3 $224.0 $201.6 $119.9 $115.4 $66.6 $51.2 $65.7 $83.5 $67.1 $62.8 $21.6

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 $1,253.1

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 $304.6

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 4.0x

Exhibit A: Capital Structure Overview

28

EXHIBIT B: Reconciliation of Adjusted EBITDA to Net Income (Loss)

(1) In 2018, the Company and The Heritage Group formed Biosyn Holdings, LLC (“Biosyn”) for the purposes of acquiring Biosynthetic Technologies, LLC (“Biosynthetic Technologies”), a startup companywhich developed an intellectual property portfolio for the manufacture of renewable-based and biodegradable esters. The initial cash investment of $3.8 million made by the Company into Biosyn wasexpensed in the period ended March 31, 2018 given Biosyn’s operations 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. For comparability purposes, $3.8 million of the gain is included in AdjustedEBITDA for the three months ended March 31, 2019.

($ in millions) 3/31/18 06/30/18 09/30/18 12/31/18 03/31/19 06/30/19 09/30/19 12/31/19

Segment Adjusted EBITDA

Corporate Adjusted EBITDA $ (29.6) $ (20.8) $ (24.0) $ (23.1) $ (24.8) $ (28.4) $ (22.8) $ (21.6)

Specialty products Adjusted EBITDA 39.4 53.3 36.6 32.9 64.2 54.9 52.2 48.9

Fuel products Adjusted EBITDA 66.6 46.8 41.9 43.9 58.3 53.1 44.1 26.5

Discontinued operations Adjusted EBITDA (1.4) (0.4) (0.2) 2.0 — — — —

Adjusted EBITDA $ 75.0 $ 78.9 $ 54.3 $ 55.7 $ 97.7 $ 79.6 $ 73.5 $ 53.8

Less:

Unrealized (gain) loss on derivative Instruments

$ (2.0) $ (0.8) $ 2.4 $ (29.8) $ 2.6 $ 12.2 $ 5.4 $ 5.9

Realized (gain) loss derivative activities, not included in net income (loss) or settled in a prior period

— 2.1 0.7 (2.8) — — — —

Amortization of turnaround costs 3.3 2.7 2.7 4.1 4.8 5.6 6.1 2.8

Debt extinguishment costs 0.6 58.2 — — (0.4) (0.3) — 2.9

(Gain) loss on the sale of business, net 1.6 (1.8) (3.4) 2.9 — — — 8.7

Loss on impairment and disposal of assets 0.5 0.7 0.9 3.2 11.7 16.2 3.2 5.9

Other non-recurring expenses — — — — — — 1.3 2.2

Gain on sale of unconsolidated affiliate (1) — — — — (1.2) — — —

Equity based compensation and other items 1.1 1.9 (0.2) (4.1) 3.4 2.3 0.4 1.3

EBITDA $ 69.9 $ 15.9 $ 51.2 $ 82.2 $ 76.8 $ 43.6 $ 57.1 $ 24.1

Less:

Interest expense $ 45.2 $ 37.5 $ 37.7 $ 35.1 $ 32.3 $ 33.1 $ 33.8 $ 35.4

Depreciation and amortization 29.7 29.5 29.6 29.3 28.2 27.0 27.4 27.5

Income tax expense (benefit) (0.2) 0.8 0.4 (0.3) (0.1) 0.3 0.5 (0.2)

Net income (loss) $ (4.8) $ (51.9) $ (16.5) $ 18.1 $ 16.4 $ (16.8) $ (4.6) $ (36.6)

29

($ in millions) 3/31/17 6/30/17 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 12/31/19

Net income (loss) $(6.2) $9.6 $(23.6) $(83.6) $(4.8) $(51.9) $(16.5) $18.1 $16.4 $(16.8) $(4.6) $(38.6)

Add:

Interest expense $43.9 $44.5 $47.4 $47.3 $45.2 $37.5 $37.7 $35.1 $32.3 $33.1 $33.8 $35.4

Depreciation and amortization 41.1 40.9 48.6 37.9 29.7 29.5 29.6 29.3 28.2 27.0 27.4 27.5

Income tax expense (benefit) (0.1) (0.9) (0.1) — (0.2) 0.8 0.4 (0.3) (0.1) 0.3 0.5 (0.2)

EBITDA $78.7 $94.1 $72.3 $1.6 $69.9 $15.9 $51.2 $82.2 $76.8 $43.6 $57.1 $24.1

Add:

Unrealized (gain) loss on derivative Instruments

$(10.6) $(1.3) $9.7 $(1.4) $(2.0) $(0.8) $2.4 $(29.8) $2.6 $12.2 $5.4 $5.9

Realized (gain) loss derivative activities, not included in net income (loss) or settled in a prior period

— — — — — 2.1 0.7 (2.8) — — — —

Amortization of turnaround costs 7.4 6.6 6.4 3.9 3.3 2.7 2.7 4.1 4.8 5.6 6.1 2.8

Debt extinguishment costs — — — — 0.6 58.2 — — (0.4) (0.3) — 2.9

(Gain) loss on sale of business, net — — — (173.4) 1.6 (1.8) (3.4) 2.9 — — — 8.7Loss on impairment and disposal of assets

0.4 — — 0.2 0.5 0.7 0.9 3.2 11.7 16.2 3.2 5.9

Other non-recurring expenses 206.9 — — — — — — 1.3 2.2

Gain on sale of unconsolidated affiliate(1) — — — — — — — — (1.2) — — —

Equity based compensation and other items

2.8 2.2 7.3 3.4 1.1 1.9 (0.2) (4.1) 3.4 2.3 0.4 1.3

Adjusted ABITDA $78.7 $101.6 $95.7 $41.2 $75.0 $78.9 $54.3 $55.7 $97.7 $79.6 $73.5 $53.8

Less:

Discontinued operations Adjusted EBITDA (3.7) 0.5 6.4 (0.3) (1.4) (0.4) (0.2) 2.0 — — — —

Superior Adjusted EBITDA 21.3 27.9 25.6 16.8 — — — — — — —

Total pro forma Adjusted EBITDA(2) 61.1 73.2 63.7 24.7 76.4 79.3 54.5 53.7 97.7 79.6 73.5 53.8

LCM inventory adjustments (5.4) (3.8) (7.3) (14.1) (3.1) (14.0) 2.3 45.4 (38.9) (2.6) 2.7 3.0

LIFO inventory layer adjustments — — 0.8 2.9 — — 0.4 5.9 0.9 — — (6.9)

Less: Superior LIFO/LCM 4.2 5.6 (5.0) 0.5 — — — — — — — —

Pro forma EBITDA (excluding LCM/LIFO) 59.9 75.0 52.2 14.0 73.3 65.3 57.2 105.0 59.7 77.0 76.2 49.9

Adjusted EBITDA (excluding LCM/LIFO) 73.3 97.8 89.2 30.0 71.9 64.9 57.0 107.0 59.7 77.0 76.2 49.9

EXHIBIT C: Reconciliation of Net Income (Loss) to Adj. EBITDA & Pro Forma Adj. EBITDA (ex-LCM/LIFO)

(1) In 2018, the Company and The Heritage Group formed Biosyn for the purposes of acquiring Biosynthetic Technologies, a startup company which developed an intellectual property portfolio for themanufacture of renewable-based and biodegradable esters. The initial cash 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 of accounting. During March 2019, the Company sold its investment toThe Heritage Group and recognized a gain of $5.0 million. For comparability purposes, $3.8 million of the gain is included in Adjusted EBITDA for the three months ended March 31, 2019.

(2) Pro forma adjusts for divestitures of the Superior Refinery and Anchor Drilling Fluids USA, LLC in 4Q17

30

Three Months Ended December 31, Year Ended December 31,

2019 2018 2019 2018 2017

Specialty Adjusted EBITDA $48.9 $32.9 $220.2 $162.2 $188.3

LCM inventory adjustments (2.4) 9.7 (9.5) 3.4 (10.9)

LIFO inventory layer adjustments (3.7) 2.6 (2.8) 2.7 3.0

Specialty Adjusted EBITDA (ex-LCM/LIFO) $42.8 $45.2 $207.9 $168.3 $180.4

Fuel Adjusted EBITDA $26.5 $43.9 $182.0 $199.2 $225.8

LCM inventory adjustments 5.4 35.7 (26.3) 27.2 (19.7)


Fuel Adjusted EBITDA (ex-LCM/LIFO) $28.7 $82.9 $152.5 $230.0 $206.8

Corporate Adjusted EBITDA $(21.6) $(23.1) $(97.6) $(97.5) $(99.8)

Total Adjusted EBITDA $53.8 $55.7 $304.6 $263.9 $314.3

LCM inventory adjustments 3.0 45.4 (35.8) 30.6 (30.6)


Total Adjusted EBITDA (ex-LCM/LIFO) $49.9 $107.0 $262.8 $300.8 $287.4

Reported Specialty gross profit per barrel $33.82 $26.57 $35.74 $31.41 $32.05

LCM/LIFO inventory adjustments per barrel (2.88) 5.43 (1.33) 0.70 (0.84)

Specialty gross profit per barrel (ex-LCM/LIFO) $30.94 $32.00 $34.41 $32.11 $31.21

Reported Fuel gross profit per barrel $3.18 $6.80 $4.35 $6.07 $5.07

LCM/LIFO inventory adjustments per barrel 0.32 5.44 (1.01) 1.15 (0.49

Fuel gross profit per barrel (ex-LCM/LIFO) $3.50 $12.24 $3.34 $7.22 $4.58

EXHIBIT D: Reconciliation of Operating Metrics (ex-LCM/LIFO)

31

EXHIBIT E: Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)

(1) Beginning in third quarter 2019, Amortization of turnaround costs were no longer included in the calculation

Three Months Ended December 31,

Year Ended December 31,

($ in millions, except per unit data) 2019 2018 2019 2018

Net income (loss) $ (38.6) $ 18.1 $ (43.6) $ (55.1)

LCM 3.0 45.4 (35.8) 30.6

LIFO (6.9) 5.9 (6.0) 6.3

Unrealized (gain) loss on derivative instruments 5.9 (29.8) 26.1 (30.2)

Realized gain on derivatives, not included in net income (loss) or settled in a prior period — — — —

Debt extinguishment costs 2.9 — 2.2 58.8

Loss on impairment and disposal of assets 5.9 — 37.0 —

Gain on sale of unconsolidated affiliate — — (1.2) —

(Gain) loss on sale of business, net 8.7 2.9 8.7 (0.7)

Amortization of turnaround costs (1) — — — —

Equity based compensation and other non-cash items 1.3 (3.7) 7.4 4.0

Adjusted net income (loss) $ (17.8) $ 38.8 $ (5.2) $ 13.7

Adjusted net income (loss) per unit $ (0.23) $ 0.50 $ (0.07) $ 0.18

Average limited partner units - diluted 78,332,671 78,218,831 78,212,136 77,943,992

32

Year Ended December 31,

2019 2018 2017

Net Cash provided by (used in) operating activities $191.9 $75.2 $(26.5)

Additions to property, plant and equipment (54.9) (49.8) (70.0)

Free Cash Flow $137.0 $25.4 $(96.5)

Exhibit F: Reconciliation of Free Cash Flow

33

Contact Information

CONTACT INFORMATION

Joe Caminiti or Chris Hodges

Alpha IR

312-445-2870

Email: [email protected]

Documents

PowerPoint Presentationcalumetspecialty.investorroom.com/download/March+2020... · 2020-03-18 · 2 This Presentation has been prepared by Calumet Specialty Products Partners, L.P