Calumet Specialty Products Partners, L.P. Reports Fourth Quarter and Full Year 2015 Results

OREANDA-NEWS. Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT) (the "Partnership," "Calumet," "we," "our" or "us"), a leading independent producer of specialty hydrocarbon and fuel products, today reported  results for the quarter and year ended December 31, 2015, as follows:

The Partnership's results for the fourth quarter 2015 include five special items: (1) a charge related to a lower of cost or market ("LCM") inventory adjustment of $24.1 million; (2) a $21.7 million loss related to the liquidation of last-in, first-out ("LIFO") inventory layers; (3) a $22.3 million gain on the early settlement of select derivatives contracts; (4) a $28.7 million adverse mark-to-market impact from the Partnership's existing Renewable Identification Numbers ("RINs") liability and (5) an $11.8 million unrealized loss on derivative instruments. For detailed information on a reconciliation of special items for all periods presented above, please see the section of this release entitled "Reconciliation of Net income (loss) to Adjusted Net income (loss)."

Management Commentary

"Looking at our full-year results in 2015, our core business performed well, as demonstrated by improved operational reliability at our facilities and higher sales across our deep portfolio of refined products," stated Tim Go, Chief Executive Officer of Calumet. "Refining system utilization and product sales volumes reached all-time records last year, the combination of which contributed to a significant year-over-year increase in Distributable Cash Flow, excluding special items. Despite challenging market conditions evident during the fourth quarter of 2015, our full-year 2015 results reflect a combination of stable growth in our specialty products segment and continued contributions from our niche, inland fuels refineries, which stand poised to benefit from increased processing of cost advantaged heavy Canadian crude oil during 2016."

"We are pleased to announce that our Montana refinery capacity expansion, San Antonio refinery solvents project and Missouri esters plant capacity expansion have all been completed," continued Go. "The crude oil unit at our Montana refinery is on-stream and is expected to reach 25,000 bpd of production by the end of March 2016, our San Antonio refinery is producing and selling solvents and our Missouri facility is producing and selling esters, post expansion. Collectively, we anticipate these projects will provide significant incremental Adjusted EBITDA for the Partnership over time which, together with a more than 60% year-over-year decline in projected capital spending in 2016, should contribute to improved financial flexibility for Calumet."

"Our senior management team, together with our Board of Directors, is highly focused on owning businesses whose unique competitive advantages and stable cash flow profiles support our long-term strategic growth," continued Go. "To that end, we recently introduced a revised corporate vision for Calumet designed to position the organization as 'the premier specialty petroleum products company in the world.'"

"As part of this vision, Calumet has commenced a multi-year initiative that emphasizes a combination of operational excellence, opportunistic investments in 'self-help' internal projects and a long-term, targeted acquisition strategy that will support the purchase of competitively advantaged assets in the global specialty products markets," continued Go. "We intend to provide supporting data on the financial benefits of this initiative in subsequent updates."

"We believe the Partnership has sufficient liquidity from cash on hand and from operations, as well as availability under our asset based revolving credit facility to fund general business requirements, subject to market conditions," continued Go. "During the fourth quarter 2015, affiliates of our general partner provided Calumet with an unsecured $75 million loan, demonstrating their continued long-term support for the Partnership."

"During the first quarter 2016, we have taken steps to significantly increase the volume of heavy Canadian crude oil processed at our fuels refineries," noted Go. "Historically, we have processed between 20,000 bpd and 25,000 bpd of heavy Canadian crude oil at our refineries, representing approximately one-quarter of our crude slate. By year-end 2016, we intend to process between 40,000 bpd and 45,000 bpd of heavy Canadian crude oil and, longer-term, as much as 70,000 bpd of cost-advantaged Canadian feedstock. Given that heavy Canadian crude oil is discounted by more than $12 per barrel versus West Texas Intermediate ("WTI") year-to-date 2016, we view this as a clear profit improvement opportunity for the Partnership that we expect to require limited capital investment."