Noel Ryan - Director - IR Jennifer Straumins - President and COO Pat Murray - SVP and CFO

Theresa Chen - Barclays Capital TJ Schultz - RBC Capital Markets Anna Kohler - Imperial Capital Cory Garcia - Raymond James

Good day ladies and gentlemen and welcome to the Fourth Quarter 2013 Calumet Specialty Products Partners L.P earnings conference call. My name is Phillip and I will be your operator for today. At this time all participants are in listen-only mode. Later we will be conducting a question-and-answer session. [Operator Instructions] As a reminder this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today, Mr. Noel Ryan, Director of Investor Relations. Please proceed.

Thank you Phillip. Good afternoon and welcome to the Calumet Specialty Products Partners fourth quarter and full-year 2013 results conference call. Thank you for joining us today. Leading today’s call is Jennifer Straumins, our President and COO who will provide an update on our business during the fourth quarter and the opportunities for growth as we look ahead to 2014. Next Pat Murray, our CFO will provide detail on our financial performance during the fourth quarter. At the conclusion of our prepared remarks, we will open the call for questions. Before we proceed, allow me to remind everyone that during the course of this call, we may provide various forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Such statements are based on the beliefs of our management, as well as assumptions made by them and in each case based on the information currently available to them. Although our management believes that the expectations reflected in such forward-looking statements are reasonable, neither in the partnership, its general partner nor our management team can provide any assurances that the expectations will prove to be correct. Please refer to the Partnership’s press release that was issued this morning, as well as our latest filings with the Securities and Exchange Commission for a list of factors that may affect our actual results and could cause them to differ from our forward-looking statements made on this call. As a reminder, you may download a PDF of the presentation slides that will accompany the remarks made on today’s conference call as indicated in the press release we issued early today. You can access these slides in the Investor Relations section of our website at www.calumetspeciality.com. And with that, I’d like to hand the call over to Jennifer.

Thank you Noel and good afternoon to all of you joining us on today’s call. If you’re following along in the presentation will start on Page 4 with a high level overview of our fourth quarter results. We reported a net loss for the fourth quarter 2013 of $15.5 million, versus net income of $45.7 million in the prior year period. Adjusted EBITDA as defined under our financing instruments declined to $53.2 million in the fourth quarter, down from $91.3 in the same quarter of 2012. Net income for the fourth quarter of 2013 includes $14.6 million in one-time debt extinguishment costs related to the partial redemption of our 2019 notes, with proceeds from the issuance of the 2022 notes offering during November 2013. As we indicated in the press release issued this morning, our fourth-quarter results were impacted by a significant year-over-year decline in gross profit contribution from both the Specialty Products and Fuel Products segments. Within the Specialty Products segment, gross profit margins returned to normalized levels when compared to the elevated margins achieved during the prior-year period. Performance within the Fuel Products segment was impacted by a combination of factors, including a year-over-year decline in benchmark refined product margins, partially offset by improvements on derivative instrument settlements; and two, lower plant utilization of the Shreveport refinery; and third, a year-over-year increase in costs related to compliance with the U.S. renewable fuel standards. During 2013, our full-year results were muted by several headwinds, including extended plant maintenance at several of our large fuels refineries in addition to an escalation in RFS compliance cost versus the prior-year period. Despite these challenges, we still generated full-year adjusted EBITDA of $242 million, which equates the second highest level of adjusted EBITDA we had in company history behind the record year we…

Thank you, Jennifer. Let’s all turn our attention to Slide 18 for a discussion of adjusted EBITDA. We believe the non-GAAP measure of adjusted EBITDA is an important financial performance measure for the partnership. Adjusted EBITDA as defined under our financing instruments declined to $53.2 million in the fourth quarter of 2013, down from $91.3 million in the same quarter of 2012. As illustrated in the chart on Slide 18, the bulk of the year-over-year decline in adjusted EBITDA was due primarily to higher operating expenses, driven in-part by higher RFS compliance costs, transportation and SG&A expense, coupled with lower contributions from our specialty products segment and the impact of acquisitions. We encourage our investors to review the section of our earnings press release found on our website entitled non-GAAP financial measures in the attached tables for discussion and definitions of EBITDA, adjusted EBITDA and distributable cash flow measures and reconciliation of these non-GAAP measures to the comparable GAAP measures. Now I'm turning to slide 19. Fuels refining economics declined significantly on a year-over-year basis during the fourth quarter. The benchmark Gulf Coast 211 crack spread averaged $16 per barrel during the three months ended December 31, 2013, compared to $30 a barrel in the same period of 2012. The year-over-year decline in the 211 crack spread was driven primarily by the a sharp drop in the gasoline crack, and to a lesser degree, the diesel crack. Crude oil price differentials remained volatile throughout the quarter, a factor which further impacted gross profit in the fuels segment. Now turning to Slide 20, during the fourth quarter we realized RINs expense of $7.5 million. For the full year 2013, our net RINs expense was approximately $30 million. Although RINs prices have largely been manageable during the fourth quarter in the $0.30…

[Operator Instructions] And your first question comes from the line of Theresa Chen with Barclays Capital. Please proceed.

I just had a question about the Bel-Ray acquisition, and I know you didn’t provide financial guidance; but can you just broadly talk about if you think this will move the needle in the near term or what kind of turns you look for in acquisitions like these? And more generally in the market, how many more opportunities are out there currently and what does the M&A environment for specialty products look like?

Sure. We do not -- the transaction was not large enough that we had to disclose the price, so that gives you some feeling that it was a smaller acquisition for Calumet. From a financing perspective, it was not material. And as far as multiples go, for something like this, we would look at a 7x to 9x multiple from a valuation standpoint. As far as the multiple goes, we paid less for Bel-Ray from a multiple standpoint than we did for Royal Purple, so that’s positive. I think overtime, this acquisition coupled with everything else we're doing in our branded and package division, it will certainly move the needle for Calumet. It may not be this year, but it will certainly be within the next -- between now and the next 24 months. As we look forward to other Specialty Products acquisitions, we've got several that we are in the middle of pursuing right now. The M&A market remains very robust for us, and with 7,000 customers currently on our books, we certainly have the opportunity to build relationships with family and businesses and pursue those acquisitions as the timing is right. Bel-Ray has been a customer of Calumet in the past just like Royal Purple was.

Thank you. And then on asphalt marketing, would you mind talking about if there are other regions that you currently don’t serve that you might be looking to expand towards?

Asphalt is a very regional type of marketing opportunity. A lot of our northern barrels, it’s a very short paying season in Wisconsin and Minnesota. That’s why you see us looking to broaden our geographic horizons. I think you’ll continue to see us look towards the south. I've always wanted a terminal in the Dallas area, so we continue to pursue multiple opportunities.

Got it, and then lastly on the higher operating costs, can you just give some color on that for the Specialty segment and if you expect that to persist?

We don’t expect that to persist. It was some year-end maintenance type of expenditures.

Your next question comes from the line of TJ Schultz with RBC Capital Markets. Please proceed.

Maybe Pat, if you could discuss funding for 2014 and 2015, given you have a pretty good line of sight on cash flow growth as the refinery projects ramp, what type of leverage maybe you’re comfortable with this year during the funding part of the cycle?

Right, I mean -- our leverage level at December 31 is elevated compared to where we think. We do certainly expect as we’ve described on this call, the earnings potential for 2014 is much better and we’re talking about taking very little turnaround time that wasn’t certainly a headline for us in 2013. So our expectation is that the leverage improves over the course for the year. We built up a significant amount of liquidity. We were opportunistic in our notes issuance in November. We have quite a bit of cash on the balance sheet at the end of the year. And so as we look ahead to funding requirements over the next 24 months or so, and they’re fairly ratable -- we’ll rely on existing liquidity that we have. We can also remain opportunistic in terms of capital markets activities, but I think it's a combination of those items and a relatively lengthy period here of CapEx that we can try to time those things opportunistically and handle those costs going forward.

The growth projects; obviously the biggest needle movers are Dakota Prairie and the Montana expansion, about $170 million, $180 million of EBITDA. If you could just kind of touch on the comfort level there on timing and cost for those projects to be online -- how quickly you think cash flows can get to those run rates for EBITDA and maybe just touch on some of the underlying assumptions behind that cash flow range from a commodity price perspective?

Sure. I’ll touch on the last part of that first. Certainly, we are comfortable with the forecast that we've put out from an EBITDA contribution standpoint, and that’s very easy to model based on forward crack spreads and forward crude prices in differentials. As far as timing and budget, we remain comfortable with the timing that we’ve outlined to the public as well as the budgets that we’ve outlined to the public. These are – certainly, Montana is a very long-term project. We’ve got two years left in that project. So it’s -- as of today everything is on time and on budget. We’re moving -- in the process of relocating that hydrocracker that we’ve bought from Alon from Baskerville, California to Great Falls, and we are in the process of negotiating with vendors and subcontractors for that project, and everything is going according to plan at this point in time. Dakota Prairie, that work is continuing to progress as well. We've got equipment arriving at the sites. The tank farm is almost complete. All the engineering work is done. We are making great strides in hiring a management team there. As far as my level of priority -- finding the right operators and the right management team has been key to that since it is a grass root facility, and we’ve got our first round of operators going through operator training today during the period of time, and we’ve got the whole senior management team hired. So I feel very good about that, and as of right now, it was a tough winner out there, but we remain on schedule for a late 2014 start-up. Does that hit all your points?

Yes, sorry it was a long question. The annual EBITDA guidance you gave, is there a ramp period to get to those numbers?

Yes, that was rest of your question. No, that’s a turn to switch, and you're more or less on.

Okay. Just on the fourth quarter, the asphalt has reclassified, what was the impact on the Fuel segment during fourth quarter from asphalt?

It was in the range of probably $15 million or so.

Okay. Lastly, is it possible to quantify the cash flow impacts from the Wal-Mart Royal Purple opportunity?

We’ve got some internal estimates that I’m not going to share publically at this point in time.

And your next comes from the line of Anna Kohler from Imperial Capital. Please proceed.

First a follow-up on that regarding Wal-Mart. If I heard correctly, so that you’re looking for a rollout there in the second quarter? What is the planned timing on the rollout and will it be in terms of getting into all 2400 sites?

We’re shipping product to Wal-Mart distribution centers as we speak where we’ll be selling up 10 products in 2400 Wal-Marts starting in late March.

And then in regards on the asphalt opportunity, is there any way that you can qualify or quantify in terms of the asphalt production that you have, what percentage you would like to -- do you have the ability to place into the two avenues that you announced agreements with and what your ultimate goal would be in terms of the amount of your asphalt production you would like to see in these other markets three years out or five years out?

Sure, if you look at the asphalt make out of our Superior Wisconsin refinery, it’s about 15,000 barrels a day and 2012, it was about 65% sold to the retail market, 35% wholesale. And those numbers really flip-flop during 2013. State budgets continue to face pressure for funding projects and we saw a lot of competition from some of the other Midwestern refiners in asphalt space in 2013. So we’ve got 15,000 barrels a day to work with and depending on the profitability of the region having Muskogee and the facility in Albany, New York gives us flexibility to move barrels around and maximize the profitability of the asphalt barrels made out of Superior.

Great. And then just a follow-up in regard to the All-States Asphalt. That seems like relatively large organization. Is there additional opportunity within that corporation or does the agreement that you signed basically cover whatever opportunities that they would have?

No, I would like to take such more opportunities for us to work with All-States. Their ownership and management team is very entrepreneurial and dynamic and fitted very well with the management team at Calumet. So I’ve got hope for expanded opportunities with that company.

And you next question comes from the line of Cory Garcia from Raymond James. Please proceed.

Do you guys have any specific color surrounding some of the timing on the startup of that Karnes Pipeline System? I realized it’s a little bit out of your guys hands but just curious as to how you guys are seeing or how we should be really thinking about those volumes reaching the San Antonio gates as we move through the year?

It will be in the second half of ’14 early in the second half of 2014.

And it will be sort of a flip to switch have a run rate or is it going to be a gradual ramp to your sort of your 10,000 barrel per day number?

I think it’s more of a flip to switch, and we’re in the middle of negotiating with some crude suppliers at this point in time. So I’m not really at liberty to give very much information at all today.

Okay, no that’s perfect, and I guess sort of as a follow on to that; I guess maybe discuss how you guys are thinking about maybe your appetite to travel further towards the low end. I know you guys have discussed it in prior calls but given the amount of organic spending that you have sort of in place right now, how should we be thinking about your ability to sort of broaden your scope down towards the crude gathering element.

Well we bought the Murphy oil and crude gathering assets in North Dakota and Montana in August of 2013 and we kind of coined a phrase around Calumet -- Calumet, we want to be from the well head to Wal-Mart. So I think you’re going to continue to see us pursue the right opportunity in each of these areas. I don’t have anything imminent but I certainly wouldn’t be opposed to pursuing gathering opportunities.

Ladies and gentlemen, that concludes the question and answer portion of today’s call. I would now like to turn the call back over to Jennifer Straumins for closing remarks.

Thank you and thank you all for joining us on today’s call. If you have any questions please feel free to contact our Director Investor Relations, Noel Ryan. This now concludes our call.

Ladies and gentlemen that concludes today’s conference. Thank you for your participation. You may all now disconnect. Have a wonderful day.