Calumet Specialty Products Partners (CLMT) Suspends Dividend, Provides Strategic Update

Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT) announced a series of targeted strategic measures intended to enhance available liquidity and position the Partnership for long-term profitable growth.

• Priced Private Placement of Senior Secured Notes Due 2021. As previously announced, on April 15, 2016, the Partnership priced a private placement of $400 million principal amount of 11.5% senior secured notes due 2021. The notes and the guarantees of the notes will be secured by a first-priority lien on all of the fixed assets that secure the Partnership's obligations under its secured hedge agreements and will be guaranteed on a senior secured basis by most of the Partnership's existing subsidiaries that guarantee obligations under its revolving credit facility and certain of the Partnership's future subsidiaries. The Partnership expects to use net proceeds from the offering to reduce outstanding borrowings under the Partnership's revolving credit facility, to terminate or cash collateralize certain of the Partnership's existing hedging obligations and for general partnership purposes. The offering is expected to close on April 20, 2016, subject to customary closing conditions.

• Announced Suspension in the Quarterly Cash Distribution. In view of current volatility in market conditions and as part of a broader effort to maintain an adequate level of liquidity at the Partnership, the Board of Directors of Calumet's General Partner unanimously voted to suspend the current quarterly cash distribution of $0.685 per unit, or $2.74 per unit on an annualized basis, effective for the quarter ended March 31, 2016.

"The proceeds raised from the senior secured notes offering, in conjunction with a suspension in our quarterly cash distribution, position us to manage our capital structure with prudence and conservatism during a challenging period for our business, while repositioning the Partnership for long-term strategic growth in our core specialty products markets," stated Tim Go, CEO of Calumet. "Moreover, given the completion of a multi-year organic growth project campaign in the first quarter 2016, we anticipate that our current-year capital spending to be well below prior-year levels, consistent with our previously announced forecast."

"Following considerable analysis and deliberation, our Board of Directors approved a suspension of the quarterly cash distribution, given sustained commodity price volatility and seasonally weak realized margins in our fuel products segment," continued Go. "While the decision to suspend the distribution was a difficult one, over time this action is expected to further support our liquidity position and financial flexibility. Our Board expects to evaluate a reinstatement of a quarterly cash distribution in due course, taking into account a number of factors, including our liquidity requirements, the relative health of cash flows from operations, balance sheet leverage, broader market conditions and the overall performance of our business."

• Preliminary Business Outlook – First Quarter 2016 Financial Information (Unaudited). For the first quarter 2016, based on preliminary data, the Partnership currently expects to report a net loss between $83.0 million and $59.0 million, Adjusted EBITDA of between $(5.0) million and $10.0 million and Adjusted EBITDA, Excluding Special Items of between $(17.0) million and $3.0 million. For a reconciliation of the preliminary estimate of Adjusted EBITDA and the preliminary estimate of Adjusted EBITDA, Excluding Special Items (each, a non-GAAP measure) to estimated net loss, the most directly comparable GAAP measure, see "Non-GAAP Financial Measures" below. Financial results for the first quarter 2016 reflect a combination of lower benchmark refined product margins, seasonal weakness in asphalt sales prices and volumes sold, and seasonal softness in the local market premium on motor fuel products sold, compared to benchmark Gulf Coast prices, and reduced customer drilling and completion activity in the oilfield services segment. As of March 31, 2016, the Partnership had estimated pro forma availability under its revolving credit facility, giving effect to the application of net proceeds from the notes offering, of $397.9 million, based on an estimated $461.4 million borrowing base, $63.5 million in outstanding standby letters of credit and no outstanding borrowings. In addition, we had an estimated $7.4 million of cash on hand as of March 31, 2016.

"Our first quarter results were impacted by weakness in our fuel products segment, partially offset by continued stability in our core specialty products segment," continued Go. "During January and February, realized fuel margins were challenged in our niche products markets, similar to conditions evidenced during the fourth quarter 2015, while asphalt inventories increased ahead of the spring selling season, reducing cash receipts in the first quarter 2016."

"As previously disclosed, we have begun to implement a series of self-help initiatives in all areas of the organization, including projects that position us to increase the volume of cost-advantaged heavy Canadian crude oil processed at our facilities over the next two years," continued Go. "While the fourth quarter 2015 and the first quarter 2016 were challenging, we are keenly focused on addressing our liquidity needs and other measures to position the Partnership for improved performance."

The Partnership has prepared the estimated preliminary financial data presented above based on the most current information available to management. The Partnership's normal financial reporting processes with respect to the preliminary financial data have not been fully completed and Ernst & Young, LLP has not audited, reviewed, compiled or performed any procedures with respect to the accompanying preliminary financial data. As a result, the Partnership's actual financial results could be different from this preliminary financial data, and any differences could be material. These estimates should not be viewed as a substitute for full interim financial statements prepared in accordance with U.S. GAAP.

The Partnership will report results for the first quarter 2016 before the market opens on May 5, 2016. A conference call is scheduled for 1:00 p.m. ET (12:00 p.m. CT) on Thursday, May 5, 2016 to discuss the financial and operational results for the first quarter 2016. Investors, analysts and members of the media interested in listening to the live presentation may call (866) 584-9671 and enter passcode 87644842. The telephonic replay will be available by calling (855) 859-2056 and entering passcode 87644842. The replay will be available beginning Thursday, May 5, 2016 until Thursday, May 12, 2016. A webcast of the earnings call and accompanying presentation slides will be available on the Partnership's website at http://www.calumetspecialty.com.

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