Calumet Specialty Products Partners (CLMT) 8-K Calumet Specialty Products Partners, L.P. Reports Fourth Quarter 2006 Earnings

Exhibit 99.1

Calumet Specialty Products Partners, L.P. Reports Fourth Quarter 2006 Earnings

Highlights for the quarter and year ended December 31, 2006 are as follows:

• Reported Adjusted EBITDA of $23.3 million and $104.5 million for the three and twelve months ended December 31, 2006, respectively.

• Commenced construction of the Shreveport refinery expansion project.

• Declared a fourth quarter 2006 distribution of $0.60 per unit on January 5, 2007, an increase of approximately 9% over the prior quarter.

INDIANAPOLIS—(PR NEWSWIRE)—February 15, 2007—Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT) (the “Partnership” or “Calumet”) reported net income for the three months ended December 31, 2006 of $31.5 million compared to $32.1 million for the same period in 2005. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA (as defined by the Partnership’s credit agreements) were $36.1 million and $23.3 million, respectively, for the three months ended December 31, 2006 as compared to $48.2 million and $28.2 million, respectively, for the comparable period in 2005. Distributable Cash Flow for the three months ended December 31, 2006 was $19.0 million.

Net income for the year ended December 31, 2006 was $93.9 million compared to $11.3 million for the year ended December 31, 2005. EBITDA and Adjusted EBITDA were $117.9 million and $104.5 million, respectively, for the year ended December 31, 2006 as compared to $51.6 million and $85.8 million, respectively, for the year ended December 31, 2005. Distributable Cash Flow for the period of February 1, 2006 to December 31, 2006 was $85.9 million. (See the section of this release titled “Non-GAAP Financial Measures” and the attached tables for discussion of EBITDA, Adjusted EBITDA, Distributable Cash Flow and other non-generally accepted accounting principles (“non-GAAP”) financial measures, definitions of such measures, and reconciliations of such measures to the comparable GAAP measures.)

The financial results for the year ended December 31, 2006 include the financial results of Calumet Lubricants Co., L.P. (the “Predecessor”) through January 31, 2006. For the period from January 1, 2006 to January 31, 2006, the Predecessor generated net income of $4.4 million, EBITDA of $9.8 million, and Adjusted EBITDA of $4.5 million. Substantially all of the assets and operations of the Predecessor and its consolidated subsidiaries were contributed to the Partnership in connection with the closing of the Partnership’s initial public offering during the first quarter of 2006.

“During the fourth quarter of 2006, we maintained our strong performance despite normal seasonality in our Specialty Products segment,” said Bill Grube, Calumet’s President and CEO. “We have started construction on the Shreveport capacity expansion project, which we expect to be completed and operational in the third quarter of 2007.”

Net income for the three months ended December 31, 2006 was $31.5 million as compared to $32.1 million for the same period in 2005. The Partnership’s performance for the fourth quarter of 2006 as compared to the fourth quarter of 2005 was positively impacted by improved specialty products margins per barrel, offset by decreased sales volume of specialty products and less favorable fuel products margins. The decrease in fuel products margins was due to both lower crack spreads and higher costs associated with

plant operations, primarily the result of increases in other material costs from the use of certain gasoline blendstocks in the fourth quarter of 2006 to maintain compliance with certain environmental regulations, partially offset by decreased plant fuel costs due to lower natural gas prices. The Company’s usage of these gasoline blendstocks ended during the fourth quarter of 2006 upon determination of the Company’s continued compliance with such environmental regulations. Selling, general and administrative costs were lower in the fourth quarter of 2006 as compared to the same period in 2005 due to reduced employee incentive compensation costs. Further, gains on derivative instruments not designated as hedges for accounting purposes were lower for the fourth quarter of 2006 as compared to the same period in 2005.

Total Specialty Products segment sales volume for the fourth quarter of 2006 was 20,473 barrels per day (bpd) as compared to 24,266 bpd for the same period in the prior year, a decrease of 3,793 bpd, or 15.6%. This decrease is due to higher than historical demand in the fourth quarter of 2005 from the effect of September 2005 hurricane activity on specialty products supply. Total Specialty Products segment sales volume for the year ended December 31, 2006 was 25,109 bpd as compared to 24,385 bpd for the same period in the prior year, an increase of 724 bpd, or 3.0%. This increase was primarily due to increased volume for lubricating oils and solvents.

Total Fuel Products segment sales volume for the fourth quarter of 2006 was 26,933 bpd as compared to 27,007 bpd in the same period for the prior year, a decrease of 74 bpd, or 0.3%. Total Fuel Products segment sales volume for the year ended December 31, 2006 was 25,236 bpd as compared to 22,568 for the same period in the prior year, an increase of 2,668 bpd, or 11.8%. This increase was attributable to the ramp-up of fuels operations at the Shreveport refinery during the first quarter of 2005.

Gross profit by segment for the fourth quarter of 2006 for the Specialty Products and Fuel Products segments was $35.9 million and $7.1 million, respectively, compared to $22.0 million and $22.9 million, respectively, for the same period in 2005.

As previously announced on January 5, 2007, the Partnership declared a quarterly cash distribution of $0.60 per unit on all outstanding units for the quarter ended December 31, 2006, an increase of approximately 9% over the prior quarter. The distribution was paid on February 14, 2007 to unitholders of record on February 4, 2007.

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     The following table sets forth information about our combined refinery operations. Refinery production volume differs from sales volume due to changes in inventory.

	Calumet		Predecessor		Calumet (1)		Predecessor
	Three Months Ended				Year Ended
	December 31,				December 31,
	2006		2005		2006		2005
Sales volume (bpd):
Specialty Products sales volume		20,473		24,266		25,109		24,385
Fuel Products sales volume		26,933		27,007		25,236		22,568
Total (2)		47,406		51,273		50,345		46,953
Total feedstock runs (bpd) (3)		47,364		54,180		51,598		50,213
Refinery production (bpd) (4)
Specialty Products:
Lubricating oils		10,729		11,903		11,436		11,556
Solvents		5,359		4,398		5,361		4,422
Waxes		1,173		1,320		1,157		1,020
Asphalt and other by-products		5,242		5,791		6,596		6,313
Fuels		1,297		1.998		2,038		2,354
Total		23,800		25,410		26,588		25,665
Fuel Products:
Gasoline		9,201		10,358		9,430		8,278
Diesel		5,822		8,953		6,823		8,891
Jet fuel		6,861		6,807		6,911		5,080
By-products		313		111		461		417
Total		22,197		26,229		23,625		22,666
Total refinery production		45,997		51,639		50,213		48,331

(1) Includes the period of January 1, 2006 through January 31, 2006 for the Predecessor.

(2) Total sales volume includes sales from the production of the Partnership’s refineries and sales of inventories.

(3) Feedstock runs represents the barrels per day of crude oil and other feedstocks processed at the Partnership’s refineries.

(4) Total refinery production represents the barrels per day of specialty products and fuel products yielded from processing crude oil and other refinery feedstocks at the Partnership’s refineries. The difference between total refinery production and total feedstock runs is primarily a result of the time lag between the input of feedstock and production of end products and volume loss.

Update on Calumet’s Internal Growth Project at its Shreveport Refinery

As previously announced, the Partnership has commenced a major capital improvement project at its Shreveport refinery, which we still expect to be completed and fully operational in the third quarter of 2007 and should increase this refinery’s crude oil throughput capacity by approximately 40% over current levels, from approximately 42,000 bpd to approximately 57,000 bpd. We have now either acquired or contracted for the purchase of all key operating equipment for the expansion project and have spent a total of $65.5 million in capital expenditures related to the project as of December 31, 2006. After receipt of all required permits, we commenced construction on the expansion project at the end of the fourth quarter of 2006. We still estimate the total cost of the Shreveport refinery expansion project will be approximately $150.0 million.

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About the Company

The Partnership is a leading independent producer of high-quality, specialty hydrocarbon products in North America. The Partnership processes crude oil into customized lubricating oils, solvents and waxes used in consumer, industrial and automotive products. The Partnership also produces fuel products including gasoline, diesel and jet fuel. The Partnership is based in Indianapolis, Indiana and has three refineries located in northwest Louisiana.

A conference call is scheduled for 9:00 a.m. ET (8:00 a.m. CT) Friday, February 16, 2007, to discuss the financial and operational results for the fourth quarter of 2006. Anyone interested in listening to the presentation may call 800-561-2693 and enter passcode 25543432. For international callers, the dial-in number is 617-614-3523 and the passcode is 25543432.

The telephonic replay is available in the United States by calling 888-286-8010 and entering passcode 97275438. International callers can access the replay by calling 617-801-6888 and entering passcode 97275438. The replay will be available beginning Friday, February 16, 2007, at approximately 11:00 a.m. until Friday, March 2, 2007.

The information contained in this press release is available on the Partnership’s website at http://www.calumetspecialty.com.

Cautionary Statement Regarding Forward-Looking Statements

Some of the information in this release may contain forward-looking statements. These statements can be identified by the use of forward-looking terminology including “may,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” or other similar words. These statements discuss future expectations, contain projections of results of operations or of financial condition, or state other “forward-looking” information. These forward-looking statements involve risks and uncertainties that are difficult to predict and may be beyond our control. These risks and uncertainties include the success of the Partnership’s risk management activities; the availability of, and the Partnership’s ability to consummate, acquisition or combination opportunities; the Partnership’s access to capital to fund acquisitions and its ability to obtain debt or equity financing on satisfactory terms; successful integration and future performance of acquired assets or businesses; environmental liabilities or events that are not covered by an indemnity; insurance or existing reserves; maintenance of the Partnership’s credit rating and ability to receive open credit from its suppliers; demand for various grades of crude oil and resulting changes in pricing conditions; fluctuations in refinery capacity; the effects of competition; continued creditworthiness of, and performance by, counter parties; the impact of crude oil price fluctuations; the impact of current and future laws, rulings and governmental regulations; shortages or cost increases of power supplies, natural gas, materials or labor; weather interference with business operations or project construction; fluctuations in the debt and equity markets; and general economic, market or business conditions. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements included in this release as well as the Partnership’s most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, which could cause the Partnership’s actual results to differ materially from those contained in any forward-looking statement. The statements regarding the Shreveport expansion project’s expected completion date, the Shreveport refinery expansion project’s expected costs and the resulting increases in production levels from the Shreveport expansion project, as well as other matters discussed in this news release that are not purely historical data, are forward-looking statements.

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Non-GAAP Financial Measures

We include in this release the non-GAAP financial measures of EBITDA, Adjusted EBITDA, and Distributable Cash Flow, and provide reconciliations of net income to EBITDA, Adjusted EBITDA, and Distributable Cash Flow and (in the case of EBITDA and Adjusted EBITDA) to cash flow from operating activities, our most directly comparable financial performance and liquidity measures calculated and presented in accordance with GAAP.

EBITDA and Adjusted EBITDA are used as supplemental financial measures by our management and by external users of our financial statements such as investors, commercial banks, research analysts and others to assess:

• the financial performance of our assets without regard to financing methods, capital structure or historical cost basis;

• the ability of our assets to generate cash sufficient to pay interest costs and support our indebtedness;

• our operating performance and return on capital as compared to those of other companies in our industry, without regard to financing or capital structure; and

• the viability of acquisitions and capital expenditure projects and the overall rates of return on alternative investment opportunities.

We define EBITDA as net income plus interest expense (including debt extinguishment costs), taxes and depreciation and amortization. We define Adjusted EBITDA to be Consolidated EBITDA as defined in our credit facilities. Consistent with that definition, Adjusted EBITDA, for any period, equals: (1) net income plus (2)(a) interest expense; (b) taxes; (c) depreciation and amortization; (d) unrealized losses from mark to market accounting for derivative activities; (e) unrealized items decreasing net income (including the non-cash impact of restructuring; decommissioning and asset impairments in the periods presented); and (f) other non-recurring expenses reducing net income which do not represent a cash item for such period; minus (3)(a) tax credits; (b) unrealized items increasing net income (including the non-cash impact of restructuring, decommissioning and asset impairments in the periods presented); (c) unrealized gains from mark to market accounting for derivative activities; and (d) other non-cash recurring expenses and unrealized items that reduced net income for a prior period, but represent a cash item in the current period. We are required to report Adjusted EBITDA to our lenders under our credit facilities and it is used to determine our compliance with the consolidated leverage test thereunder.

We believe that Distributable Cash Flow provides additional information for investors to evaluate the Partnership’s ability to declare and pay distributions to unitholders.

We define Distributable Cash Flow as Adjusted EBITDA less maintenance capital expenditures, cash interest expense and income tax expense.

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CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per unit data)

	Calumet			Predecessor			Calumet			Predecessor
	Three Months Ended						Year Ended
	December 31,						December 31,
	2006			2005			2006			2005
	Unaudited						Unaudited
Sales	$	368,681		$	394,091		$	1,641,048		$	1,289,072
Cost of sales		325,610			349,141			1,437,804			1,148,715
Gross profit		43,071			44,950			203,244			140,357
Operating costs and expenses:
Selling, general and administrative		5,539			10,128			20,430			22,126
Transportation		12,418			13,305			56,922			46,849
Taxes other than income taxes		817			456			3,592			2,493
Other		265			253			863			871
Restructuring, decommissioning and asset impairments		—			174			—			2,333
Operating income		24,032			20,634			121,437			65,685
Other income (expense):
Interest expense		(1,192	)		(6,190	)		(9,030	)		(22,961	)
Interest income		1,338			98			2,951			204
Debt extinguishment costs		—			(6,882	)		(2,967	)		(6,882	)
Realized gain (loss) on derivative instruments		(4,678	)		3,642			(30,309	)		2,830
Unrealized gain (loss) on derivative instruments		12,325			20,826			12,264			(27,586	)
Other		(240	)		17			(274	)		38
Total other income (expense)		7,553			11,511			(27,365	)		(54,357	)
Net income before income taxes		31,585			32,145			94,072			11,328
Income tax expense		63			—			190			—
Net income	$	31,522		$	32,145		$	93,882		$	11,328
Allocation of net income:
Less: Net income applicable to Predecessor for the period through January 31, 2006		—						4,408
Net income applicable to Calumet		31,522						89,474
Minimum quarterly distribution to common unitholders, prorated		(7,365	)					(24,495	)
General partner’s incentive distribution rights.		(6,405	)					(18,157	)
General partner’s interest in net income		(297	)					(840	)
Common unitholders’ share of income in excess of minimum quarterly distribution		(6,437	)					(17,958	)
Subordinated partners’ interest in net income		11,018						28,024
Basic and diluted net income per limited partner unit:
Common	$	0.84					$	2.81
Subordinated	$	0.84					$	2.14
Weighted average limited partner common units outstanding — basic and dilutive		16,366						14,642
Weighted average limited partner subordinated units outstanding — basic and dilutive		13,066						13,066

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CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

	Calumet		Predecessor
	December 31,		December 31,
	2006		2005
	Unaudited
Assets
Current assets:
Cash and cash equivalents	$	80,955	$	12,173
Accounts receivable, net		99,000		115,294
Inventories		110,985		108,431
Derivative assets		40,802		3,359
Prepaid expenses and other current assets		3,467		19,650
Total current assets		335,209		258,907
Property, plant and equipment, net		191,732		127,846
Other noncurrent assets, net		3,233		12,964
Total assets	$	530,174	$	399,717
Liabilities and partners’ capital
Current liabilities:
Accounts payable	$	78,752	$	44,759
Accrued liabilities		20,242		17,470
Current portion of long-term debt		500		500
Derivative liabilities		2,995		30,449
Total current liabilities		102,489		93,178
Long-term debt, less current portion		49,000		267,485
Total liabilities		151,489		360,663
Partners’ capital		326,434		38,557
Accumulated other comprehensive income		52,251		497
Total partners’ capital		378,685		39,054
Total liabilities and partners’ capital	$	530,174	$	399,717

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CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

	Calumet			Predecessor
	Year Ended December 31,
	2006			2005
	Unaudited
Operating activities
Net income	$	93,882		$	11,328
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		11,760			10,386
Provision for doubtful accounts		172			294
Loss on disposal of property and equipment		91			232
Restructuring, decommissioning and asset impairments		—			1,693
Amortization of vested phantom units		61			—
Debt extinguishment costs		2,967			4,173
Changes in assets and liabilities:
Accounts receivable		16,031			(56,878	)
Inventories		(2,554	)		(25,441	)
Prepaid expenses and other current assets		16,183			569
Derivative activity		(13,143	)		31,598
Other noncurrent assets		4,242			(4,561	)
Accounts payable		33,993			(13,268	)
Accrued liabilities		3,083			5,874
Net cash provided by (used in) operating activities		166,768			(34,001	)
Investing activities
Additions to property, plant and equipment		(76,064	)		(12,963	)
Proceeds from disposal of property, plant and equipment		261			60
Net cash used in investing activities		(75,803	)		(12,903	)
Financing activities
Net proceeds from (repayments of) borrowings		(218,485	)		53,916
Debt issuance costs		—			(5,641	)
Proceeds from initial public offering		138,743			—
Proceeds from follow-on public offering		103,479			—
Contributions from Calumet GP, LLC		2,593			—
Distribution to Calumet Holding, LLC		(3,258	)		—
Distributions to Predecessor partners		(6,900	)		(7,285	)
Distributions to partners		(38,286	)		—
Repurchase of units for phantom unit grants		(69	)		—
Cash and cash equivalents provided by (used in) financing activities		(22,183	)		40,990
Net increase (decrease) in cash		68,782			(5,914	)
Cash and cash equivalents at beginning of period		12,173			18,087
Cash and cash equivalents at end of period	$	80,955		$	12,173
Supplemental disclosure of cash flow information
Interest paid	$	11,986		$	22,890
Income taxes paid	$	111		$	—

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CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
RECONCILIATION OF NET INCOME TO EBITDA, ADJUSTED EBITDA, AND
DISTRIBUTABLE CASH FLOW
(in thousands)

	Calumet			Predecessor			Calumet			Predecessor
	Three Months Ended						Year Ended
	December 31,						December 31,
	2006			2005			2006			2005
	Unaudited						Unaudited
Net income	$	31,522		$	32,145		$	93,882		$	11,328
Add:
Interest expense and debt extinguishment costs		1,192			13,072			11,997			29,843
Depreciation and amortization		3,365			2,972			11,821			10,386
Income tax expense		63			—			190			—
EBITDA	$	36,142		$	48,189		$	117,890		$	51,557
Add:
Unrealized losses (gains) from mark to market accounting for derivative activities		(12,402	)		(20,826	)		(13,145	)		27,586
Non-cash impact of restructuring, decommissioning and asset impairments		—			173			—			1,766
Prepaid non-recurring expenses and accrued non-recurring expenses, net of cash outlays		(432	)		648			(287	)		4,912
Adjusted EBITDA	$	23,308		$	28,184		$	104,458		$	85,821
Less:
Adjusted EBITDA attributable to Predecessor		—						(4,494	)
Maintenance capital expenditures (a)		(2,103	)					(5,737	)
Cash interest expense (b)		(2,129	)					(8,124	)
Income tax expense		(63	)					(190	)
Distributable Cash Flow	$	19,013					$	85,913

(a)	Maintenance capital expenditures are defined as those capital expenditures which do not increase operating capacity or sales from existing levels.
(b)	Represents cash interest paid by the Partnership excluding capitalized interest.

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CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
RECONCILIATION OF ADJUSTED EBITDA AND EBITDA TO NET CASH PROVIDED BY
(USED IN) OPERATING ACTIVITIES
(in thousands)

	Calumet			Predecessor
	Year Ended
	December 31, 2006
	2006			2005
	Unaudited
Adjusted EBITDA	$	104,458		$	85,821
Add:
Unrealized gains (losses) from mark to market accounting for derivative activities		13,145			(27,586	)
Non-cash impact of restructuring, decommissioning and asset impairments		—			(1,766	)
Prepaid non-recurring expenses and accrued non-recurring expenses, net of cash outlays		287			(4,912	)
EBITDA	$	117,890		$	51,557
Add:
Interest expense and debt extinguishment costs		(11,997	)		(29,843	)
Income tax expense		(190	)		—
Provision for doubtful accounts		172			294
Debt extinguishment costs		2,967			4,173
Restructuring, decommissioning and asset impairments		—			1,693
Changes in operating working capital:
Accounts receivable		16,031			(56,878	)
Inventory		(2,554	)		(25,441	)
Other current assets		16,183			569
Derivative activity		(13,143	)		31,598
Accounts payable		33,993			(13,268	)
Accrued liabilities		3,083			5,874
Other, including changes in noncurrent assets		4,333			(4,329	)
Net cash provided by (used in) operating activities	$	166,768		$	(34,001	)

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