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Good morning, and welcome to the Calumet Inc. Third Quarter 2025 Results Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to John Kompa, Investor Relations for Calumet. Please go ahead.

Thanks, Chloe. Good morning, everyone. Thanks for joining our call today. With me on today's call are Todd Borgmann, CEO; David Lunin, EVP and Chief Financial Officer; Bruce Fleming, EVP, Montana Renewables and Corporate Development; and Scott Obermeier, EVP of Specialties. You may now download the slides that accompany the remarks made on today's conference call, which can be accessed in the IR section of our website at calumet.com. Also, a webcast replay of this call will be available on our site within a few hours. Turning to the presentation. On Slide 2, you can find our cautionary statements. I'd like to remind everyone that during this call, we may provide various forward-looking statements. Please refer to our 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 results and cause them to differ from our expectations. As we turn to Slide 3, I'll now pass the call to Todd.

Thanks, John, and welcome to Calumet's Third Quarter 2025 Earnings Call. This past quarter was a strong one, both financially and strategically. Calumet generated $92.5 million of adjusted EBITDA with tax attributes, and strategically, we're hitting the key milestones laid out earlier this year. At Montana Renewables, we remain on schedule for our MaxSAF expansion in the first half of 2026, and our SAF marketing plan is pacing well ahead of schedule as the team has roughly 100 million gallons of post-expansion volumes placed through contracts, which are fully complete or in the final review step within our DOE process. Across Calumet, our cost and reliability initiatives are outperforming expectations. Our commercial organization continues to sell growing production into stable high-margin accounts. Let me dig deeper into these themes, starting with costs before turning it over to David for the financials. In the third quarter, Calumet removed another $24 million of operating costs from the system versus the same quarter last year. Quite frankly, operations improved rapidly throughout 2024, so much so that while we expected year-over-year progress to continue, we did expect a little tapering in the second half. Instead, the rate of savings accelerated this past quarter, which is a testament to the ops talent we have throughout the country and their willingness to take this initiative head on. Year-to-date, operating costs are $60 million lower versus last year, and we've mapped out a couple more years worth of ops excellence opportunities to continue moving the ball forward from here. Deeply connected to costs and just as important is reliability, which has advanced as well. Year-to-date production is up nearly 600,000 barrels versus last year, much of which is in our specialties business. On a unit basis, the combination of cost and reliability initiatives have reduced operating costs by $3.37 a barrel throughout the system. Specifically, to our Specialty Products & Solutions segment, the third quarter marked a record production quarter. Despite softness reported across much of the broader specialty chemicals world over the past year, our commercial team again sold over 20,000 barrels a day at margins well above $60 per barrel, while also rebuilding some inventory following the Freeport turnaround. We also saw strong fuel performance on both the margin and volume front. This reinforces the core advantage of Calumet's integrated model. Specialties provide stable, strong and growing baseline earnings, while fuels deliver more variable upside. Today, that excess cash flow is being used to reduce debt. Over time, it will fund further specialties growth. Last, in Specialties, I'd be remiss to not note continued growth in our Performance Brands segment. Year-to-date EBITDA is up versus last year despite divesting the Royal Purple Industrial business earlier in 2025. We've implemented our top-tier commercial excellence program across our brands and leveraged our deep specialties footprint, which is yielding tremendous results. Further, TRUFUEL is on track for another record EBITDA year even in a year that's been void of major Gulf Coast weather events as the brand continues to grow its position as a channel leader and is benefiting from capturing space to over 4,000 new Walmart stores. Let's turn to Slide 4 and dig a little deeper into Montana Renewables. During the quarter, we saw more key regulatory signals towards the industry recovery. Specifically to MRL, we continue to fortify the advantage we have in all margin environments with great logistics costs and product mix. While the future is bright, the industry continued to see weakness in renewable diesel margins. In fact, during the third quarter, realized margins across the industry were actually a bit lower than even the normal index margin formula would suggest as the feedstock physical basis widened out, which means feedstocks were about $0.20 a gallon more expensive than the traditional CBOT marker would suggest across the industry. We've seen this revert back during October, and we're back to the more normal environment where CBOT index margin is the correct industry signal. On an industry level, biomass-based diesel production remains cut back at roughly 60% utilization. 2025 industry production volumes seem to be stabilizing just above 350 million gallons a month, which on an annualized basis is right about -- is right for the currently roughly 4.5 billion gallon implied RVO, which is made up of about 3.5 billion gallons of D4 RVO, plus roughly 1 billion gallons of shortfall in other RIN classes, which are ultimately covered by D4 RINs. Separately, the carryforward of 2024 RINs, which will expire shortly, creates temporary length in the D4 RIN market. Against this backdrop of low industry utilization, we continue to see shutdowns occurring in industry. We look forward to an environment where biomass-based diesel demand increases through a stronger RVO. Further, the regulators appear to be bullish on reallocation of the small refinery extensions, which would add to the RVO. These steps are expected to increase demand to the point where idle facilities would need to restart to meet the mandated demand. These restart decisions mean biodiesel producers need to be convinced they can confidently cover fixed costs. If not, the RIN will need to go higher or feedstock lower than. This is a stark contrast to the past 2 years, where we've seen massive shutdowns, but also many hanging on at the margin and barely covering variable costs with the expectation of an improved future environment. Of course, in the past, we routinely saw stable margins incentivizing the small biodiesel players to run in order to fill the D4 RIN gap, and we're optimistic that when we see the finalized RVO, margins will revert positively as they've done historically before the prior administration's 2023 RVO error. Next, during the quarter, we completed our first $25 million PTC sale, proving this method of monetizing PTCs is viable as expected. We subsequently sold another $15 million in October and continue to see our credits trending towards a more normal tax credit environment after the 45

Thanks, Todd. Before I get into the quarter results, let me address an error in our reported Q1 and Q2 2025 cash flow statements, which we discussed in an 8-K filing this morning. In accounting for a series of transactions during the first quarter, we misclassified debt extinguishment costs and inventory financing flows as cash flow from operating activities rather than cash flow from financing activity. The correction of the error will result in an approximate $80 million increase to cash flows from operations for the first quarter. Total free cash flow, the income statement, balance sheet and adjusted EBITDA all remain unchanged, and we will restate Q1 and Q2 financials alongside our Q3 filing. With that, let's get into the quarter. We reported $92.5 million of adjusted EBITDA during the quarter, which was the strongest quarter in a number of years. We were able to reduce our restricted group debt by over $40 million despite the third quarter being our largest cash interest period of the year. Deleveraging continues to be a strategic priority, which we expect to continue in Q4 given the strong business performance. Further, during the quarter and after the ruling on the small refinery exemptions, we reduced our outstanding balance sheet RIN obligation by over $320 million. As Todd mentioned, we also sold our first $25 million of PTCs at MRL, demonstrating the ability to turn those into cash as the market has opened up and started to normalize following the passage of the One Big Beautiful Bill Act. We look forward to more ratable monetization of our tax credits over the coming periods. Turning to Slide 5. Our Specialty Products & Solutions segment generated $80.2 million of adjusted EBITDA during the quarter. The third quarter of 2025 reflected the strong commercial momentum in our Specialty Products portfolio as well as the benefits of our overall improved reliability and cost discipline. This was the fourth consecutive quarter that our Specialty Products posted sales volume exceeding 20,000 barrels per day, and coupled with strong margins, we continue to demonstrate the resiliency of our specialty business. Despite broad industry chatter over the year that specialty markets have been a little soft, our sales team has demonstrated the continued ability to take advantage of our integrated asset base and diversified markets to continue to place our products at over $60 a barrel. Further, we posted third quarter production volume gains of 8% compared to the prior year. Our production has grown reliably over the past few years as we've improved our operating discipline. We look forward to continuing that trend through the remainder of the year and into next year. Our steady production environment also enabled the capture of stronger crack environment as fuel margins increased significantly year-over-year, which we view as upside in our integrated model as we continually optimize our crude slate and product yields to capture market opportunities. To begin this year, we gained access to a new crude oil supply chain, including the ability to target specific segregated or blended crudes in Cushing and further north in the DJ Basin, at the same time, reducing our pipeline tariff. Year-to-date, this improvement has driven $15.3 million decrease in transportation costs and provides even further ability to dial in our assets and feed to a specific use. We remain focused on driving additional operational improvements in the segment and look to further reduce our cost per barrel in the segment. As we said during our second quarter earnings call, strong operations to not only increase volume and reduce costs, but also supports increased margin as well as it allows our commercial team to place more volume to secure contracted homes rather than relying on spot market sales. Moving to Slide 6 and our Performance Brands segment. We are pleased to post another strong quarter driven by our commercial excellence program and growing recognition of our brands. You'll remember that we sold the Royal Purple Industrial business earlier this year, and despite that EBITDA being fully reflected in the prior year financials and not this quarter, the segment was essentially flat year-over-year. We also continue to benefit from our integration strategy as we gear up to target markets that best unlock the intrinsic value that exists in our ability to vertically integrate where and when it makes sense to do so. Last, as Todd mentioned earlier, the third quarter results reflected strong volumes and margins in our TRUFUEL brand. Not only is TRUFUEL growing on the shelves and with brand awareness, it's also benefiting from favorable procurement initiatives as the team has successfully leveraged its growing volume over the past couple of years. Moving to Slide 7. Our Montana/Renewables segment generated adjusted EBITDA with tax attributes of $17.1 million in the third quarter compared to $14.6 million in the prior year period. Montana Renewables specifically posted slightly negative EBITDA with tax attributes of $3.5 million for our 87% share. As I mentioned earlier, we successfully monetized $25 million of PTCs during the third quarter and continue to monetize PTCs at improving price levels as we continue to expect to trend towards roughly 95% capture on those sales. Earlier, you heard about the SAF test run that was important to derisking our project, and this run meant the units slowed down temporarily during the quarter, resulting in a couple of million dollars of lost margin alongside some wider-than-normal feedstock basis, which increased feed costs temporarily more than RIN offsets, and this has reset to more normal levels here recently. While we've gained a lot of regulatory clarity this year, the industry is now just waiting for the rules to be finalized. With that in hand, we believe the business is set up for a strong recovery in 2026 based on the preliminary RVO targets that were announced by the Trump EPA. Fortunately, the core building blocks of our renewables business, marquee customers, cost-advantaged assets, unmatched feedstock and end market proximity and an improving yield slate remain intact. Combined with our relentless focus on cost reduction, we remain well positioned for the rebound that we expect to inevitably occur once we see the EPA land, the proverbial plane on the RVO. In fact, our operating costs, excluding SG&A, reached $0.40 per gallon and was our eighth straight quarter of improvement, excluding a turnaround in the fourth quarter of 2024. In the interim, we continue to increase our outlets for SAF as demonstrated by our recent announcement of on-site blending and shipping capabilities. Initial distribution is through AEG's fuels network, and they are already proving to be a strong partner. On-site blending capabilities enables MaxSAF sales from the truck rack to local and regional service, further broadens the SAF market outside of major airports. This investment also allows us to strip credits and monetize SAF outside of direct offtakers. On the Montana asphalt side, the third quarter is typically a good one. This quarter, in particular, we saw one of the strongest quarters in recent memory and a $14 million year-over-year gain. Our polymer modified asphalt business continues to be an advantage as well as the niche fuels distribution and with costs dramatically improved, we are pleased to see the impact on the bottom line this quarter. Thank you for your time today. We remain focused on driving meaningful free cash flow generation as we conclude 2025 while steadily marching towards major value-creating opportunities that rest ahead for our shareholders. With that, I'll turn the call back to the operator for any questions.

[Operator Instructions] The first question comes from Alexa Petrick with Goldman Sachs.

My first question is just on as we think about the MaxSAF expansion, and I think you've also talked about being on track to do 120 million to 150 million gallons of annualized SAF production in 2Q. What are the gating items? Just as we think about operations on the ground, what are some of the checklist items?

Alexa, this is Bruce. Very little, frankly. The unit as we stood it up back in 2022 was known to have some latent capacity. We've got a couple of tactical constraint removal things that we'll do during the scheduled turnaround, a few tens of millions of dollars. We're pretty excited about the leverage that implies on our cost of goods sold, including the capital charge. The reason we've ranged the output is we'll see about catalyst performance in the new configuration. Probably, we're being a little conservative there, but give us some room to grow into that maybe.

Then can you talk a little bit about some of these offtake agreements? I think there's also some commentary that you've been in some final conversations as well. Where do those stand?

Bruce again, thank you. The way that we've set this up is the same thing we did in 2022 pre-commissioning of the whole business. Last April, I asked our marketing team to go ahead and presell the increase in SAF that will be coming in spring. We're halfway through that 12-month program to get it placed, and we're well above halfway through signing people up. There's a mixture of executed and in-service contracts. There are a couple of material contracts that are effectively complete, but require the DOE to approve them, and so they're with the DOE. Then we've got a pipeline of additional origination that we're pretty excited about. As I said a second ago, as we probably grow into maybe more capability than we've advertised, we've got the customer standing by to pick that up. The market shows every characteristic of being supply short. Again, I can't overemphasize how exciting this is.

The next question comes from Amit Dayal with H.C. Wainwright.

Congrats on the pretty solid results. For Montana Renewables, I know you touched on it, Todd, a little bit, but the gross margin issue, is it primarily just stemming from the current market conditions? Or is there anything in the sort of production ramp that you are playing with that may be causing near-term pressure?

Amit, it's Todd. No, I think nothing outside of what I talked about in the prepared remarks earlier. I'd say there were a couple of things abnormal to the quarter, one to us and one to industry as a whole. The one to us was we talked about something the volume a little bit to run the test that Bruce was talking about, which should give us a lot of confidence around our ability going forward on MaxSAF. That cost a couple of million gallons. Obviously, that's back to full capacity. Then the other one that was more, I'd say, just broader industry is typically, all feed just trade off of an index to CBO. There's always a little bit of lag, and there can be volatility from time-to-time that over time just balances out. What we saw during the quarter was a lot of the physical basis. Feedstock was, we said in the call earlier, about $0.20 a gallon more expensive than our normal index margin thinking would imply. Basically, $0.20 outside of CI parity. Now that's fixed. There'll be times when it's a little bit better than that, right? There's a little bit of volatility, of course, between the grains, and that's something that gives us an advantage to switch, quite frankly, over time. The industry did see that in the quarter. Again, you kind of add that to the downtime in volume, and that really speaks to probably the difference between this quarter and last quarter.

Just a follow-up sort of on that. What's the primary feedstock you're using for the MRL right now?

This is Bruce. To be honest, there's not a primary feedstock. One of our key competitive advantages is short supply chains that can access any of the principal classes of feed. We are very, very dynamic as we reoptimize each month. We think that we're gaining competitive advantage versus some of our peers with longer supply chains and we shift gears very, very quickly. With that said, if you wanted to think broadly, you can think 1/3 vegetable oil, 1/3 corn oil and 1/3 tallow and protein oils.

Just last one for me. When you sort of look at 2026, it looks like the operating side of the story is running pretty well. Are most of the risks and opportunities based on how the macro plays out for you guys?

Yes. I think as a whole, as we step into 2026, we're quite excited for a number of reasons. One, -- and you mentioned it, operationally, we've made some real improvements and expect to not only keep those, but build on those improvements going forward. Then, of course, as we look at the regulatory environment, the overhang that's been in Montana Renewables specifically and all of biofuels, quite frankly, is being removed. The RVO that's plagued us for '24, '25 is going to get finalized here soon and will -- as we've said kind of routinely, expect to lift up industry margins. That's a major deal, right? We've barely been floating above breakeven this year, which we're happy to do in an extremely depressed environment, but as the whole industry returns with better macro environment, we're really going to be able to take advantage of that. Then, of course, third is outside of index margin, just the ability to add SAF is a major ability, right? It's major upside, and it's also major derisking because it'll be less susceptible to just general already index margins going forward because of the SAF premium.

The next question comes from Jason Gabelman with TD Cowen.

I don't believe there was much talk about small refinery exemptions in your prepared remarks. Just wondering how that impacts, one, your financials directly? Two, your view on the RIN balances moving forward?

Jason, Bruce, I think that's probably a 2-parter, but redirect me if I'm off target. Our 2 small refineries, you could call them micro refineries by industry scale, have always qualified on the merits. We're confident we will continue to do so. Look, when you come to carry forward, we're all waiting for the EPA to process the public comments, which I'm sure they've received 17 terabytes of, but that's a policy question, and we'll all find out together. Am I responsive to your interest?

Yes. I guess I'm just wondering more directly, if there's any impact from the exemptions that were granted, if there was any financial impact to you, positive or negative?

Well, David covered that as you're aware, the balance sheet has had an inventory accounting style accrual while all of our cases were pending now that they've been resolved generally favorably. We've extinguished 80-plus percent of that and figure, I believe David was $329 million.

Jason, so you'll see that we reduced our outstanding RIN obligation related to the granted small refinery exemptions. It was kind of roughly a $320 million reduction in that outstanding obligation as reported on the balance sheet.

Then on the comments around kind of feedstocks impacting 3Q MRL results. It sounds like that's been alleviated in the near term here. I'm wondering what do you think caused that feedstock tightness? If we get a ramp-up in renewable diesel capacity as a result of a more bullish 2026 RVO, is there a potential that feedstock prices can tighten again and impact your margins? Or do you see the 3Q impacts as very transitory in nature?

Jason, it's Todd. I'll start off and see if Bruce wants to jump in. We think it's a transitory, but it happens, right? There's a general lag on the physical side that happens from time to time. We see the same thing in the crude oil markets when you get an overbuild or shortness just due to kind of a physical near-term [Glatter] shortage in like Cushing, for example. I don't think that it's anything that we should think about changing any sort of long-term view. In fact, if you go back over time, there's never been a lasting difference to CBO outside of CI parity, and we wouldn't expect that to change. This is kind of just normal volatility. We've seen times where it's helpful this quarter, it was negative for the industry, but I don't see anything that would impact that going forward. In fact, we have so much more capacity and availability of feedstocks than even the currently forecasted RVO would suggest that it's hard to imagine a feedstock shortage. Even if there was, you should see that play out through kind of the base COP margin and not some sort of physical basis differential.

[Operator Instructions] The next question comes from Greg Brody with Bank of America.

I don't normally do this, but congrats. A lot of great developments this quarter. In particular, probably removing the Gregg Brody slide is one of the big ones. Just operationally, you guys really demonstrated a lot of improvement, so congrats to everybody. Maybe you mentioned the deleveraging is still the priority. You're starting to generate cash. Can you talk a little bit about what you think is next to sort of help address the maturities? Just to give us a sense of how you're thinking about it today?

Yes, sure. I'll take it and see if David wants to jump in. I think mentioned last quarter, we expect cash flow from the business, particularly in the second half to be strong. That, along with the RPI sale earlier in the year is adequate to knock out the '26 notes. We kind of look past that. As you think about '27 maturity management after that and our ability to delever, it includes cash flows from organic operations. It includes potential strategic activity, like we said, as long as it's accretive to both the debt and equity and doesn't take away anything from our integrated story. That remains an option. Of course, ultimately, it's a partial monetization of Montana Renewables. Not a lot has changed there. We're just working the game plan here as we look forward to an ultimate -- taking that ultimate step on MRL. As we talked about a lot during the call, the next milestone in doing that is demonstrating the success of this MaxSAF expansion and seeing the RVO firmed up and I think with a couple of strong quarters on the heels of those events, we'll be in place to take that final step.

You're refinancing some of the '27s. -- is that's part of the equation potentially?

Yes. Look, I think refinancings are always and just managing the timing are always part of just the general menu. As we sit right here today, we don't have anything active or anything specifically in the plan. Bigger picture, we're looking to execute the longer-term deleveraging strategy, which is a reduction of an additional $600 million to $800 million of debt. We have plenty of opportunities to do that. If there was some sort of opportunity or reason to have refinancing as part of that, then we'd certainly be happy to do that in a step of optimization, but most importantly, we're focused on kind of the organic cash flows, potential strategic activity and monetization of Montana Renewables to permanently reduce that debt.

One last one for you. You mentioned you've started to be able to monetize the PTCs. What's been the realizations on those in terms of the -- how much of a discount to the actual PTC EBITDA are they -- are you realizing?

Yes. You have to go back, the PTCs were kind of new at the beginning of this year and kind of weren't fully clarified until kind of the Big Beautiful Bill. Even today, some of the ultimate kind of final rules are even completed. I think we expect over time to kind of monetize kind of closer to 95%. I think the initial monetizations were probably closer to 90% and then we continue to close the gap as we monetize more and have more term sheets as we look further out. We've seen the market get a lot deeper and a lot more interest as they normalize earlier in the year was still new for people to digest.

IT seems like the activity picked up in monetization. Should we expect it pretty consistently now every quarter? Or are there some market dynamics we need to think about?

No. I think we expect to kind of monetize them more ratably. Todd mentioned in his remarks that we also monetized a portion in October. We're just kind of working through them.

This concludes our question-and-answer session. I would like to turn the conference back over to John Kompa, Investor Relations for Calumet for any closing remarks.

Thank you, Chloe. On behalf of Todd and the entire management team, I'd like to thank our shareholders for joining our call today and our continued support. Have a great rest of the day. Thanks.