Good day, and welcome to Calumet Inc. First Quarter 2025 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, Debbie. Good morning, everyone, and thanks for joining our call today. With me on today’s call are Todd Borgman, CEO; David Lunin, EVP and Chief Financial Officer; Bruce Fleming, EVP, Montana Renewables and Corporate Development; and Scott Obermeier, EVP, Specialties. You may now download the slides that accompany the remarks made on today’s conference call, which can be accessed in the Investor Relations 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 SEC, for a list of factors that may affect our actual results and cause them to differ from our expectations. 1 As we turn to Slide 3, I’ll now pass the call to Todd.

All right. Thanks, John. Good morning, and welcome to our first quarterly earnings call of 2025. We’re a little over 4 months into what has already been an action-packed year. Calumet began 2025 by closing and funding our DOE loan, the first of its kind under the Trump administration. This transaction strengthens Montana Renewables’ balance sheet and ensures the stability of the business even during difficult markets, just like the one we saw in the first quarter. We also completed the accretive sale of our Royal Purple Industrial business, and this morning launched a $150 million partial call of our 2026 notes as we execute our deleveraging strategy. Further, we’re also progressing additional strategic activity, which we won’t fully detail today for obvious reasons, but we will update on a breakthrough in our expectations around the Montana Renewables MaxSAF project as we now expect to reach our next milestone of 150 million gallons of SAF capacity dramatically more cheaply and quickly than originally expected. This project adds immense value to our near-term outlook as the renewable diesel industry awaits regulatory clarity, which we view as a critical open item to the partial moneti- zation of Montana Renewables, which is Calumet’s final deleveraging step. Before diving into those details, I’d like to take a moment to step back and frame the broader macroeconomic environment and its impact on Calumet. Despite the prevalence of widespread headlines regarding potential recession, we’re not seeing real signs of recession within our business. One example is that the first quar2 ter marked one of the highest specialty sales volume periods in company history during what’s typically a slow season, nonetheless. That being said, with broad economic nervousness in the market, we went back and dusted off our COVID-era specialties playbook, which was effective during that global slowdown, which was arguably much more dramatic for our industry than what most are expecting now. What we see are the attributes underpinning our company’s resilience that allowed us to generate positive free cash flow back then, continue to be enforced today, and have largely improved fashion. The resilience of our specialty business is anchored by our integrated asset base, our approach to commercial excellence, and a continuing improvement in our operational reliability and cost control. Let’s look deeper into specialties on Slide 4. Calumet’s flexibility and financial resilience are underpinned by a few pillars. First, we serve over 3,000 customers with nearly 2,000 products globally, spanning end markets from consumer staples and pharmaceuticals to seasonal applications like road paving. This allows us to dynamically shift our product placement as markets evolve. Second, we operate our specialty assets as a network, not stand-alone sites, which provides unparalleled flexibility due to the complementary nature and near proximity of our largest facilities. We constantly manage make versus buy decisions, adjust feedstock slates, and optimize operations to match market needs. Third, our commercial engine overlays this unique flexible system to capture advantage 3 throughout the value chain. This commercial flexibility is a key financial advantage, but the real core of our specialty business is our customer-centric approach, which we see in our world-class NPS scores. Our product offering, willingness, and ability to provide bespoke solutions and a deep technical service team combine to deliver a customer experience that’s been a Calumet hallmark for decades. These core strengths allow consistent performance across economic cycles. And while we have the ability to sell overseas, and we do so from time to time, tariffs are not expected to materially impact us as our operations are domestic and the great majority of our sales, while within the U.S., are under USMCA. To see the power of Calumet’s commercial approach, we need to go no further than recent Performance Brands results. Since transitioning to a Unified Specialties business 2 years ago, our Performance Brands segment has delivered robust volume growth, and EBITDA in this segment has more than doubled. We’ve seen this success within our TruFuel brand in particular. In 2024, TruFuel contributed roughly 1/3 of our segment EBITDA as full-year volumes grew over 20%, a trend that continues into the first quarter. Growth drivers include a successful marketing strategy targeting first responders and large volume users, increasing shelf space at the major retailers, including a recent entry into Walmart, and on a more macro level, long-term growth within the outdoor power equipment segment. TruFuel has roughly a 65% market share in its space, but the space as a whole is not that 4 well known, which we are changing rapidly. This is the key to the continued growth of this brand, as we have proven that once customers become aware of TruFuel, the likelihood of repeat loyal purchasing is off the charts. On the operational front, our cost reduction initiatives are delivering results. Last quarter, I mentioned that we continue to fortify our operations and expect to take over $20 million of operating costs out of the business this year. And in the first quarter, we saw this. While the winter season always seems to pose a few challenges across Northwest Louisiana and the railways and the Rockies, total system operating costs were reduced by nearly $5 per barrel versus the first quarter of last year or just over $22 million, which is after accounting for the roughly $4 million increase in the cost of natural gas. As we know, much of this improvement is coming at Montana Renewables as we’ve reduced costs dramatically with innovations around producing less water for disposal and increasing our reliability. But it’s worth noting the improvement in our specialties business as well, where we saw our operating costs improve by roughly $1.50 a barrel in the first quarter, anchored by a roughly $5 million quarterly reduction in year-over-year fixed costs and an 8% increase in production volume. Strong day-to-day execution, combined with the competitively advantaged position of our Montana Renewables business and ultra-resilient specialties business, allows us to expect positive cash flow across the economic cycle, which we saw during COVID and expect to replicate again here in 2025, especially with the cost of MRL’s old capital structure now removed. Let’s turn to Slide 5, where we discussed renewables market dynamics. First, Montana 5 Renewables generated $2.4 million of adjusted EBITDA, including the PTCs, in the first quarter. Dave will talk more about this in our plan with PTCs momentarily. But in a post-DOE world, Montana Renewables’ ability to generate positive EBITDA with tax attributes even in the lowest index margin we’ve ever seen is representative of our competitive position, which we see in the supply stack on the left-hand side of this slide. You’ll see we’ve updated the stack for 2025 production, where we’ve added new production that has come online and reduced others who have departed. You’ll see the implied biomass-based diesel annual demand from the current RVO is about 4.5 billion gallons, which includes 3.5 billion gallons from the D4 mandate and about 1 billion gallons of D6 mandates that are not able to be met, so D4s are used to fill the obligation. During the first quarter, we saw major decreases in D4 RIN generation as the PTC rolled into place, imports stopped, and biodiesel saw a dramatic shutdown. As the RVO is reset and the biomass-based diesel required to meet that demand moves to the right, we’d expect index margins to adjust accordingly as shutdown biodiesel will need to be incentivized to restart. This, of course, is not a change to our long-term expectation, but it took the large cash losses associated with the PTC change to force the biodiesel industry and some renewable diesel to shut down. And hopefully, we’ll be seeing actions in the not-too-distant future that encourage these ag businesses to restart as new crush plants have been invested in and seed ordered, assuming that the renewable fuels growth trend will continue. 6 On the right side of this slide, we see Q1 biomass-based diesel production undershot the RVO by about 230 million gallons. How could it be that we underran the compliance level by roughly 1 billion gallons on an annualized basis? And at the same time, we just saw a record low index margin quarter. We believe the answer to that lies in the overproduction in 2024, and it’s a temporary dynamic. This chart shows that the industry underran the RVO implied demand in the first quarter. Last year, the industry overran it. This D4 RIN carryforward can provide a temporary shock absorber to a RIN production deficit. But as the carryforward credits are used up, we expect normal dynamics to resume. Of course, RVO clarity should help normalize the market as well, which the whole industry looks forward to. At Montana Renewables, we also expect to be adding more SAF just as global mandates step up in early 2026. In other words, it’s tough out there right now, but underlying market fundamentals provide a lot of reasons for optimism as we look forward. Next, let’s turn to Slide 6 and discuss MaxSAF or maybe more specifically, a major improvement along the road to our ultimate MaxSAF journey, which we’re calling MaxSAF 150. As we know, SAF is a central component of MRL’s strategy. We were among the early entrants in this space, launching SAF to market in late 2023 with Shell as our offtake partner. While renewable diesel margins have been challenging since the RVO misstep, SAF margins have remained stable and attractive. This early market continues to show great promise with the introduction of global mandates complementing an already growing base of voluntary demand. 7 Our Grand project calls for 300 million gallons of SAF capacity to be reached, and there’s no change to that. We previously spoke about our expectation to bring 150 million of those gallons online in late 2026 for a capital cost of $150 million to $250 million. Our operations team has rapidly advanced our understanding of the potential of our assets and our SAF production technology. As a result, our project expectations, which were already promising, have improved markedly. Rather than needing to wait on our Gulf Coast reactor to be shipped across the country and stood up with other new build assets, we can enhance our existing MRL reactor and some other supporting assets already in Montana to bring on 120 million to 150 million gallons of SAF in early 2026 for $20 million to $30 million of capital. Given this is predominantly catalyst work and configuration of existing assets, the smaller capital would primarily be back half of ’25 and early 2026. This improvement will increase SAF yield from its current 2,000 barrels a day to an 8,000 to 10,000 barrel a day range, and we also expect a minor increase in total renewable throughput. After we improve our yields through this first step in our sequential project, we’re optimistic that our experience will continue to allow us to manage through the remaining project more quickly and economically as well. But for now, we’re focused on achieving the maximum amount of SAF for the minimum amount of capital as quickly as possible. And our marketing team continues to be encouraged by the demand we’re seeing for these increased volumes. Increased sales volumes take on 3 different timelines. First, we currently have our 30 million gallons of annual capacity being sold daily. Next, 8 we’ve demonstrated a 50 million gallon SAF capacity, and our ops team is gaining experience achieving that ratably. With the combination of this ratable production and the winter rail constraints behind us, we expect to start selling 50 million gallons of SAF this summer. Third, with the breakthrough around MaxSAF 150, we’ll also be marketing that additional material soon, which could be sold directly or tied to a monetization event as discussed in the past. We remain flexible in our approach and are encouraged by the market response. In fact, as the SAF market evolves, we’ve even been approached about SAFC credits. With this approach, the Tier 1 and Tier 3 credits we generate are marketed to end users through a book and claim approach, and a SAF supplier retains the other environmental credits like the REN and the PTC, just like through our existing renewable diesel and SAF contracts. The benefit of this in a world of global mandates is that it allows suppliers to separate the SAF credit from the physical transaction to minimize logistics costs for end customers. It’s not surprising that the resulting economics of Montana Renewables with the book and claim approach provide the same premium expectation of a $1 to $2 a gallon premium relative to renewable diesel that we’ve discussed previously, and we continue to see that range in the market. With that, I’ll turn the call over to David. David?

Thanks, Todd. I’ll review our financials by segment, the drivers of our strong first quarter results, and the underlying strength of our growth platform going forward. 9 First, on Slide 7, I wanted to remind investors of the thinking behind our changes to adjusted EBITDA this quarter. As we mentioned on our last earnings call and you see in our first quarter reported financials, we’ve updated how we report to better reflect the true cash generation capability of our business. We’ve made 2 important changes. The first is to add back the RINs incurrence. RINs’ incurrence relates to the blending obligation for fuel producers. Calumet is a small refinery and has always received a small refinery exemption or SRE, up until the EPA’s issuance of a blanket SRE denial. Calumet has never made a cash payment for RINs and continues to be successful in the federal courts, having been successful in both the Fifth Circuit and the DC Circuit regarding our small refinery exemption petition this past year. Given the set of facts, along with our goal of presenting investors the most clear and accurate representation of the cash generation capability of the business, this change was made to start the year. The second change relates to the changeover from the blender’s tax credit to the production tax credit in the renewables industry. Instead of the previously cash paid $1 a gallon for the blender’s tax credit starting in 2025, we now generate a PTC based on the CI score of the produced gallon. Current legislation contemplates a tax credit that can reduce taxable income, or in the Montana Renewables case, be sold back to the market for cash. Given Montana Renewables’ low CI feedstock advantage and SAF position, its PTC is relatively large, representing roughly $20 million for all of Montana Renewables in the first quarter or roughly $16.9 million on Calumet’s 87% equity portion. 10 The new non-GAAP metric of adjusted EBITDA plus tax attributes adds back this tax credit. As Todd said, our plan is to sell the PTCs as we don’t yet have taxable income to offset. Thus, we’ll report an EBITDA with tax attributes that includes the PTCs generated in a month rather than a hyper-volatile metric that would match the quarterly sales timing of PTCs and reflect the steady value generation of the business. As laws change and the situation matures, the need for this metric may as well. But for now, we want to provide a metric to clearly track the value generation of MRL and properly compare year-over-year to a period in which the PTC existed, as the BTC was included in adjusted EBITDA, unlike the PTC. Turning to Slide 8. Before we go through the segment results, I wanted to highlight what a transformative quarter we’ve had on the balance sheet with several exciting developments. First, earlier this quarter, after a temporary delay, we received the initial Tranche 1 funding under the DOE loan. We used the funds from the loan to, in part, take out expensive debt and get repaid from DOE for eligible project costs. The results have been transformative as we’ve reduced annual cash flow from debt service by approximately $80 million per year and positioned ourselves to have cost-efficient funding to complete our MaxSAF expansion. Coupled with the exciting news that Todd shared earlier about a cheaper, quicker path to the first step in MaxSAF, we couldn’t be more excited about the business. Second, we completed the sale of the industrial portion of our Royal Purple business, which brought in roughly $100 million of cash proceeds at an attractive accretive multiple, while at the same time streamlining our Performance Brands business. 11 The focus on playing where we have integration with our FPS business allows us to grow volumes and take out costs efficiently. That trend will continue. Finally, we called today the $150 million of outstanding 2026 notes, slightly less than mentioned last quarter, which reflects the recent volatility we’ve seen across markets. We ended the first quarter with $347 million of liquidity in our restricted business, expect to generate strong cash flow in Q2 and to recoup some of the larger working capital swings we saw in the first quarter and plan to deploy the remainder of the coal as the commodity markets that drive our underlying working capital instrument settles. As we mentioned earlier, we also have some additional strategic activity in the hopper, which we’ll share in the future. The ultimate sale of a portion of Montana Renewables remains as a final pillar in our deleveraging story. Certainly, the market hasn’t helped us out there with headwinds on index margins. But as operators, we have positioned the business with operating leverage to take advantage once the market recovers. We’ve demonstrated reliable operations, reduced our costs, and fixed the balance sheet to eliminate high-cost third-party interest. With the RBO guidance, hopefully on the horizon and a cheaper, faster path to more SAF, we’ve never been more excited, more well-positioned. Turning to Slide 9. Our Specialty Products segment generated $56.3 million of adjusted EBITDA during the quarter under our new definition. We continue to see strong volumes, particularly among our specialty product lines, reflecting our commercial excellence program. In fact, this is one of the highest quarters on record for SBS volumes at approximately 12 23,000 barrels per day. As Todd mentioned, first quarter 2025 results were slightly impacted by a fuel unit turnaround and short freezing challenges in January, something that we’ve seen routinely in the past few winters in Northwest Louisiana. However, we’ve made fortifying investments, which have limited the impact. Our operational improvement trend continues as we drove year-over-year op cost improvements of $1.41 per barrel on top of our 9% increase in year-over-year production volumes despite a reformer turnaround during the quarter. We have some turnaround activity scheduled to begin in June on some specialty equipment, which will impact our results next quarter. Even with higher volume and a little cost headwind earlier in the quarter, margins came in just below our $60 per barrel mid-cycle level. Looking forward, we continue to expect to operate at that mid-cycle margin level even amidst an industry backdrop that is well below mid-cycle. Taking a longer view, you can see we are still well above 20,000 barrels per day from our 2020 to 2024 range as we remain focused on maximizing our customer and application diversity as well as the incremental value earned through our integrated network. Finally, we’ve all seen the various headlines regarding potential tariffs, but we do not believe they are impactful to our specialty business, considering our U.S.-based manufactur- ing footprint, customer base, product diversity, and nearly all of our sales and feedstocks being domestic or protected by USMCA. Moving to Slide 10 and our Performance Brands segment. We posted strong quarterly results of $15.8 million, reflecting strong volume growth and continued commercial im13 provements in the business. While some of our brands are more integrated than others, we’re seeing growth throughout the business and are really proud of the progress our team has made, both in volume growth and capturing supply chain efficiencies. As previously disclosed, we completed the sale of the industrial portion of Royal Purple, which was completed at a roughly 10x EBITDA multiple. We continue to believe that through the operational and supply chain efficiencies this transaction unleashes, we’ll be able to recapture the majority of the EBIT we’ve sold over the next 2 years. Note, we closed the transaction on March 31, so the results reflect the full quarter’s contribution of Royal Purple Industrial. Moving to Slide 11. Our Montana/Renewables segment adjusted EBITDA with tax attributes generated $3.3 million in the first quarter compared to a negative $13.4 million in the prior year period. The renewables business on its own drove adjusted EBITDA with tax attributes of $2.1 million attributable to the 87% ownership position of Calumet. The primary driver of the improvement was the tremendous cost savings we’ve driven in the business and improvements in operations. You can see in the lower right-hand side of the renewable slide, we’ve reduced op cost and SG&A down from well north of $1 to below our $0.70 per gallon target. Focusing just on op costs, we’re at $0.50 a gallon. This represents our sixth consecutive quarter of operational cost improvement trend, excluding the turnaround in the fourth quarter of 2024. We also saw renewable volumes increase from the comparative Q1 period. At 10,300 14 barrels per day, we’re below our targeted range. That was driven by congestion on the railroad, which caused delays in getting feed to the plant coming out of the fourth quarter turnaround last year. Looking ahead, operations is able to produce our previously demonstrated $50 million of SAF capacity on a ratable basis, and we’re now ramping up marketing efforts. We expect to increase SAF sales in late Q2 2025. And on the tariff front, Montana/Renewables expects no impact, while imported used cooking oil being excluded from the ability to generate a PTC was news in the industry, Montana Renewables doesn’t use this feedstock. On the Montana asphalt side, we drove a $9.1 million year-over-year improvement. We talk a lot about cost improvements at MRL, but we’ve also been hard at work taking costs out of the asphalt side of the business, which contributed to a much improved Q1 versus what we saw last year. We also experienced better wholesale asphalt and local fuel premiums in the market during the quarter, and we look forward to opening up the retail asphalt rack later this quarter. With that, I’ll turn the call back to the operator for questions.

The first question comes from Neil Mehta with Goldman Sachs.

15 Just want to start off on the regulatory environment and some of the adjustments that you’ve made to the way that you’re showing EBITDA, to show the production tax credit, does shows you guys have confidence that there will be a change over from a BTC to a PTC. So, just talk about the regulatory environment that you see on the go forward as it relates to those tax credits, why you believe that’s the right way for the market to value the earnings power of your company as well?

Neil, it’s Todd. Thanks for the question. Let me start here on just the PTC and BTC, and I’ll give it back to Bruce a little bit more color on the regulatory environment. But I actually think your question regarding the comparable state of EBITDA in a BTC world and PTC world, and even how it could potentially go back to a BTC world, if you read some of the rumors impact our decision to move forward on this adjusted EBITDA plus tax attributes basis in Montana Renewables. Because if you think about where we were last year, the $1 a gallon BTC tax credit was in adjusted EBITDA. So what we’ve done now is we’ve said the PTC credit, which obviously impacts industry index margin, is also now added back to adjusted EBITDA. So that when we look at a year-over-year comparison period of a BTC environment to a PTC environment, we get an apples-to-apples comparison. And if there were a change back or other regulatory changes, then this metric would continue to work because we’d be able to compare, again, BTC world to PTC world lines up here. So that was actually at the forefront of our minds as we thought about the right way to show the PTC. 16 The other thing I’d say on the adjusted EBITDA plus tax attributes is we’re a seller of the PTCs. A lot of folks use them. We don’t. And so if you didn’t make this adjustment, you would have a very, very choppy EBITDA stream. It just wouldn’t really demonstrate or help investors visualize the earnings power of this business, because you would only be recognizing the EBITDA in the periods that you sell them. So that’s the way we’re doing it right now. Ultimately, we expect to capture the value of the PTC as we sell them. It just doesn’t happen on a day-to-day, ratable basis. As you know, these are typically quarterly sales. So anyway, probably a long-winded way to answer your question, maybe back to Bruce for any color on regulatory.

Neil, so I think the way you asked that sounded like do we think the regime has cut over it? It definitely has. That’s the law. That was in the IRA legislation. There are some questions about when the detailed rules are going to come through under which taxpayers can enter this income tax credit on their returns. But as Todd said, we’ll be selling them. So we feel good about trying to help our investors understand the cash flow potential of the business by accounting for it in this manner.

And yes, we’ll look for more regulatory clarity. The follow-up is just around the balance sheet. I know you guys have talked about continuing to drive your leverage to your target levels, and it’s been a huge focus in the credit community, where we’ve seen a big uptick in interest around the credit. So, just help the market get comfortable around liquidity, balance sheet, things are tracking, and steps that you are taking to really shore up the strength of that balance sheet in 17 a volatile macro.

Neil, it’s David. I think we feel very good about the liquidity and where we’re at. We finished the quarter with around $340 million of liquidity. We also called $150 million of the bonds. I think as we think about the DOE loan and that removing $80 million of interest and amortization from cash flow, we’ve really positioned the business well. Another lever is the sale of the Royal Purple business, which has helped support liquidity. I think as we look forward, we probably pulled a little bit less than we had talked about, just given the macro volatility, we saw some working capital outflows in the quarter. And so we’ve just been a little bit conservative currently, but we feel really good about where we’re at. Obviously, the ability to make more SAF quicker, sooner, and cheaper makes us feel even more confident about where the balance sheet and where the business is today.

Neil, this is Todd. I’ll add a little bit. Obviously, our ultimate leverage goal is reaching $800 million of restricted debt. And that comes with the ultimate monetization of Montana Renewables. So David just hit on this, the faster, cheaper MaxSAF-150 is a really nice next step to that. Let’s see if we get some RVO news in the near future. There seems to be some real optimism around that. We’d expect that to bring some associated margin recovery. And at that point, I think really, those are the remaining boxes necessary for that to become a real option. 18 So again, don’t expect that as a 2025 event. Obviously, there are a few things that need to happen and some of it’s regulatory. But we’re gaining quite a bit of confidence that what we’re seeing right now in the market, from a fundamental basis, is setting us up to have a pretty attractive transaction there and hopefully in the not-too-distant future.

Is that $800 million target, could you see that as a ’26 event, Todd?

Yes, we’d like to think so. Again, I mean, we needed to derisk our operations. We needed to get the DOE funded. Those are done. Let’s get some clarity on the RVO. With that, we’ll demonstrate the earnings potential of Montana Renewables with an additional 100 million gallons of SAF. I think we’ll be able to step up those earnings quite meaningfully. And with that, you should be in a pretty good position because we think that we’re going to get that additional SAF volume early in 2026. So we’re certainly looking at 2026 as a likely and hopeful transaction time for us there on Montana Renewables.

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

Just with respect to the higher MaxSAF volumes that you’re expecting to achieve in 2026 with lower CapEx than expected, I guess, previously. I’m just trying to get a sense of whether there was already equipment that was put in place that is no longer being used, and if that can be applied to further expand volumes. The press release was not very clear, at least to me, on that front. If you could clarify how 19 all of this is being achieved.

Amit, this is Bruce. Yes, let me take a stab at it. The existing asset, the hydrocracker that we converted back in 2021 and ’22 has more capability for more SAF output. And we’ve got that lined out and demonstrated. So we’re simply going to take advantage of that in the market now. And Todd covered that. We’ll call that the 50 million gallons a year. To get more out, we’ve got a very, very modest constraint removal around our heat and material balance, which we think will cost $20 million to $30 million. Obviously, we’ve got a more precise engineering estimate, and we’ve got the AFE in place for that. So that’s a go. The latent capacity of the existing unit was known, and we have always signaled walking these volumes forward. So we’re simply giving you an update that it’s going to be sooner, and it’s going to be lower capital. So we’re pretty happy with that. The marketing team is actively engaged in signing up for the placement of those gallons, and we look forward to keeping you posted on how that unfolds.

And then, as you execute on this, is that when you start collecting on the remaining funds from the DOE?

Yes. What you’re referring to is a public document, of course, but we organized the partnership with the DOE to catch up to what has already been done, and that’s called Tranche 20 1. David mentioned that we received that money in the middle of the first quarter. The balance of the loan proceeds is available, and we call that Tranche 2 in the documents. That’s a construction draw facility. So as we meet the conditions precedent, we will just continually tap that money over the next three to four years as we finish the full build-out and get to the end state of 300 million gallons of SAF.

The next question is from Jason Gabelman with TD Cowen.

I wanted to go back to the PTC because I just want to clarify, one, the amount you actually booked in the quarter, did you book the full amount that you’re saying you could have received? Or did you book something less than that $17 million in the quarter, and the $17 million is indicative of what you would have been able to book if the rule was in place in time, because the $0.40 per gallon is higher than what we’ve heard some peers book? And then going forward, given the changes in feedstock and lower canola oil runs, do you expect the amount you’re able to book under the PTC to move higher?

Yes. So Jason, David here. Just a couple of thoughts. So the $19 or $20 million that we booked is the full value of the PTC that we generated during the quarter. The higher number just reflects more SAF production, I expect relative to your expectations, which is that we obviously produce a lot more SAF that gets more credit from the 21 PTC. So that $20 million is the full value. When we talk about the $15.8 million, that’s just reflective of Calumet’s 87% share of Montana Renewables. That’s booked also at 100% of the notional value. I think when we ultimately monetize that, they’ll be sold at a slight discount. I think the market is around 95-ish percent, give or take, and we’ll true that up when we ultimately sell it.

And then thoughts on the amount you’ll be able to book going forward, just assuming a more optimized feedstock slate?

Well, I think we’re always going to move our feedstock to the highest margin, whether that margin comes through PTC or cheaper feedstock prices. We think feedstock probably moves to their CI parity over time. And so, whether we’re collecting the value through sales or through the monetized PTC, I think there’s some level of difference there for us. It’s all about where we move to the highest margin feedstock.

Then my follow-up is just the adjustment lower on the SAF expansion CapEx, which frees up more capital or more cash under the DOE Phase 2 loan. Can you talk about other uses of that cash? Does it increase the amount of debt you’re able to pay down on intercompany loans? Or are there other potential uses for that capital that can improve the cap structure?

22 This is Bruce. I’ll start with the capital part. So, the DOE loan, the government will loan money against permitted uses and eligible spending. Broadly, you should think of that as capital improvements and not working capital. That’s one of the reasons you’ve heard us talk about a Pari Passu debt facility. The operational income statement is where the vendors, all of the vendors, including Calumet, which has provided services under an MSA agreement, get paid. So that’s not the loan, that’s the income statement. Does that help?

Yes, it does. If I could just sneak one other in, maybe. You put out a mid-cycle EBITDA number of $240 million. This quarter, I think annualized is about $140 million for that base business. Can you just talk about the gaps between what you believe is mid-cycle and what 1Q results showed, especially given the strong performance in the specialty side of things?

I think generally, Jason, you’re really just talking about kind of Q1 winter. So when we talk about the restricted mid-cycle business, we’re talking about fuels in the summer. You’re talking about asphalt in the summer. So I wouldn’t expect that you should look at the – certainly wouldn’t be expecting 2025 EBITDA to be Q1 times 4. We’re looking forward to Q2 and Q3 is a pretty strong earnings environment from what we’re seeing in the market right now.

The next question is from Gregg Brody with Bank of America. 23

You mentioned strategic alternatives you were looking at, and you said you couldn’t go into much detail. Maybe just since no one asked, what can you tell us about what you’re thinking about there? And is that potentially to reduce more debt? Or is that for something else?

No, that would be to reduce more debt, Gregg. It’s Todd. We’ve said for a long time that we’re willing to sell assets that aren’t core or integrated into the business as long as they bring an accretive value. And we’ve had interest there. People have heard that. And so I’d throw that out there as one. I think last quarter, we talked about a number of other things. But yes, you should be thinking of any cash that comes into Calumet, the use of that is debt paydown. That’s our #1 priority, all the way up until we ultimately monetize Montana Renewables and achieve our restricted debt target of $800 million.

And you’re not putting a goalpost here to give us a sense of how big that can be? Ex monetizing some MRL either through a loan or sale, which I think is pushed out, right?

No, I think it’s the same buckets that we had talked about before. Certainly more than sits ahead of us for the 2026 notes. As we look at our debt reduction strategy, our goal is not to just inch by the ’26s or anything like that. We’re out looking at ways that we can bring in additional cash to knock out the ’26s, start to dig into the ’27s. 24 And like I said, ultimately set us up for the Montana Renewables sale. Like we talked about a little earlier, if that ultimately can happen in 2026, then that would be great, but we’ll let the markets guide us on that.

And I think Dave said you expected some working capital benefit in the second quarter. Maybe you could just try to understand how large that can be? And just in general, how should we think about you potentially reducing ’26 going forward? Any guidance? Or will it be an end-of-quarter decision? Yes. I think the – well, I don’t know that it will be an end-of-quarter decision.

I think what David was saying was that there was a lot of movement. We saw commodities all over the place during the quarter. We’ve got 3 million barrels of inventory in the system. When you’re seeing $10, $15 moves in crack spreads in crude, you could see that fluctuate $50 million, $60 million throughout the quarter. So that was kind of the volatility range that he was talking about there, as well as we want to get some PTCs sold. So now with the quarter under our belt, we’re moving that forward. Then just a little bit more economic certainty about where we’re at. But those are kind of the three things we’re watching here in the near-term future, and then we’ll just go ahead and use the rest of the proceeds to make the next step down into ’26 calls. After that, we’re looking at cash flow generation from the business and potential strategic activity, as talked about earlier. 25

And then just a follow-up on the DOE loan. You mentioned in the presentation about having to go back to the loan office to qualify your changes in the expansion. Does that mean that you’re not necessarily going to access that facility in the interim? Is there basically no spending going to take place as a result? And just help us think through, like, how that process works. Just one subtle thing, Bruce. Have you actually accessed that tranche at all at this point? And I’m sorry to interrupt, I’ll let you explain.

Yes. I want to reset the premise of your question. We did not say we have to requalify anything. We said that the stuff that was in the plan is going to be done sooner and cheaper.

So you don’t need to go back to that?

Well, we go to the DOE every time we want to draw from the loan facility for the purpose of construction in the field. The only thing that’s changed here is an enormously positive development, which is less spending and more SAF sooner. This is hugely credit accretive to the loan underwriter.

Yes. I completely understand how advantageous it is to drop $200 million of CapEx. What I’m trying to understand is, do you have access to the fund today? And are there any constraints? And are you using it? 26

So again, it’s a public document. The conditions precedent to proceed with the second phase of the loan, the tranche two, are differentiated and may require engineering advances to a certain definitional level, et cetera. So that’s all underway. We’re talking regularly to the engineering and technical people, both in the DOE and with their third-party adviser. As Todd said, the spending that we envision here, this interim accelerated step of $20 million or $30 million, is back-end loaded later this year. So we’re not drawing it to give you a direct answer, nor did we ever intend to at this point in the process. So that will be coming up in six months from now.

And you don’t see any issue accessing it? The reason why I asked there have been press reports, and I appreciate that your funding may be different in the press reports that the government is looking at not allowing people to get access to their loans. I think yours was fully approved. I don’t think that applies to you. I’m just trying to confirm that’s the case.

Yes. So Gregg, I may have misinterpreted the thrust of your question. So, if what you’re saying is, the government is going to give us the money when we ask for it? The answer is yes, they are. Remember how we got here. We’ve been talking to the DOE for three years before they issued the first tranche. Two of those years were high-quality technical diligence on a really complicated undertaking here that was in service. 27 So this was not your father’s old smobile. And just because of an accident of timing, we straddled an administration change. We fully supported and we said so at the time, the pause that the incoming administration put on this to review and reconfirm, and it didn’t take them very long, three or four weeks, if memory serves. And so this is actually a loan that was approved by the Trump administration.

And one last question for you as I finish this up. I know we’ll get this with the queue. Can you just tell us what the intercompany payables are from MRL to Calumet? And can you also just clarify the additional equity investment that you had to make? Did that add to that amount or did it not?

Yes. So, David it’s pulling up the numbers as he does that, let me set a definition. So, there is a junior term loan in place between Calumet and MRL. We put that in place back around the time of the Wharperg investment, so three, four years ago. That is an intercompany payable because it is a term loan. And I think I’m going to set that aside and treat your question as what about the operational interface, where we have a master services agreement, MSA, and there are some monthly payables that flow under that agreement. That amount came down sharply as part of the Tranche 1 funding. The current balance, if we have it here, I’m looking at David.

Yes. I mean, the current balance came down materially during the quarter. I’m pulling up the actual number. If you actually look at – 28

In Slide 16 on the earnings presentation deck, we’ve actually added the intercompany line to show how that totally impacts the company’s total recourse debt, and then we show the intercompany, and then we show the amount of debt adjusted for the intercompany. So there was $375 million of intercompany. And to Bruce’s point, that’s a number of different things. But as a whole, Montana Renewables owes Calumet $375 million. That’s down from $540 million at the end of the year.

And if I see that number now, it looks like the $150 million you put in added to that number.

That number definitely includes the term loan, yes, junior term loan.

This concludes the question-and-answer session. I will turn the conference back over to John Kompa for any closing remarks.

Thanks, Debbie, and thanks to everyone for joining our call today. We certainly appreciate your interest in Calumet. Have a great day. Thank you.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect. Copyright © 2025, S&P Global Market Intelligence. All rights reserved 29