Calumet, Inc

Good day, everyone, and welcome to the Calumet Inc. Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please send to a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your telephone keypads. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to John Compa, Investor Relations. Sir, please go ahead.

Thanks, Jamie. Good morning, everyone. Thank you for joining our call today. With me on today's call are Todd Borgman, CEO, David Lunen, EVP and Chief Financial Officer, Bruce Fleming, EVP, Montana Renewables and Corporate Development, and Scott Obermeyer, President, 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 two, 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 findings with the SEC, for a list of factors that may affect our actual results and cause them to differ from our expectations. As we turn to slide three, I'll now pass the call to Todd.

Thanks, John. Good morning and welcome to Calumet's fourth quarter 2025 earnings call. 2025 is a defining high-impact year here at Calumet. We began the year with a credible plan and large potential amidst deep market uncertainty. Throughout the year, risk was aggressively managed and execution of our strategy turned Calumet's potential to actualized results. We opened the year with a mandate to demonstrate critical strategic objectives. First, we needed to demonstrate that our specialties business would consistently generate durable free cash flow amidst large market uncertainty. Second, Montana Renewables needed to prove standalone financial resilience and a structural advantage. Third, needed to receive the transformative DOE loan at Montana Renewables. And last, accomplish material deleveraging of the balance sheet. As we reflect on 2025 today, I believe Calumet achieved each of these strategic milestones. Over the course of the year, we reduced financial risk, expanded our structural earnings power, and repositioned Calumet for long-term value creation. Let me walk you through some of the highlights, and we'll start with the balance sheet. We ended 2024 with restricted group leverage standing above eight times. We faced near-term maturities and elevated cash interest costs. Montana Renewables was awaiting DLE funding, and the broad equity markets were hesitant to engage with fundamental value plays like ours. Today, that picture is very different. For full year 2025, we delivered $293 million of adjusted EBITDA with tax attributes, nearly a 30% increase year over year. We reduced restricted debt by more than $220 million. Net recourse leverage improved from 8.2 times to 4.9 times. We eliminated our 2026 and 2027 debt maturities. And Montana Renewable successfully closed its DOE loan, removing roughly $80 million of annual cash debt service, while also improving its leadership position in this industry. The outcome was a fundamental shift in financial durability, and this outcome was driven by structural improvements. Across the system, we dramatically reduced costs and drove increased reliability. Fixed costs were down over $40 million. Water treatment costs at Montana Renovables were down over $20 million, as were our crude transportation costs in the specialty business, while greatly enhancing feed flexibility and our ability to dial in specific specialty products for our customers. And as a result of improved reliability and fewer repairs, capital spending was also reduced by roughly $20 million. At the same time, our ops team increased production by roughly 1.3 million barrels on the year. Results like this come from an entire organization working towards a common goal. And I thank our employees for accepting the challenge to responsibly attack costs, which includes our 900-plus teammates in the field, our ops excellence team, which is relatively small, but pound for pound exceptional, our finance team that made a step change in partnering with our sites and making information readily available, and more broadly, everyone who leaned into owning and accomplishing this company-changing priority. Looking ahead, we believe there's more opportunity on both cost and reliability. Our company has been operating the current asset base for a little over three years, and during each of these, our team has delivered stronger production and lower operating costs. And we expect for that to continue in 2026, despite what's going to be a very heavy turnaround here. Let's turn to slide four. The operational improvements we just discussed are more than just volume and costs. Layering that capability on top of our leading commercial platform, which has been built out over decades, provides our sales team more volume and flexibility to support customers. We've produced record levels of product in our specialty products and solutions segment 2025, and our commercial engine more than kept up as we sustained material margins above historic norms, despite softer macro conditions in the broader specialty chemicals industry. Our team places material successfully to new homes consistently, especially sales volumes exceeded 20,000 barrels per day during every quarter of the year. The continued results in this business reflect years of investment, commercial excellence, culture and talent, integration of performance brands, targeted reliability and mix improvement initiatives, and disciplined capital deployments. Our integrated asset network and ability to dynamically shift production into the highest value markets continues to be an advantage, and our extremely high customer experience scores are the result of a differentiated passion for customers, which is a core Calumet value. Turning to slide five, we see that Montana Renewables also enters 2026 in a much different position than a year ago. Throughout last year, we reached a new level of operational reliability and cost competitiveness. demonstrating a financial leadership position in one of the most compressed renewable diesel margin environments on record. Operating costs averaged 41 cents per gallon in the second half of the year, a 60% improvement over two years ago. And further, we monetized more than $90 million of production tax credits, which was essentially everything we made, and we are pleased to see the 45Z regulations progress in early 2026. On a strategic front, Two quarters ago, we announced our streamlined MAC SAF 150 expansion would be bringing 120 to 150 million gallons of annual SAF capacity online at a fraction of the originally contemplated cost. And last quarter, we mentioned that roughly 100 million gallons of new SAF contracts at $1 to $2 per gallon premium over renewable diesel were in final review with the DOE. These contracts are now complete, with more in process that will lay in to support our volume ramps. These contracts are all multi-year, and they include increased take or pay volumes from existing customers, new physical SPK off-takers, and blended SAF off-takes combined with contracts for Scope 1 and Scope 3 credits through book and claim, which opens up premium renewable markets globally that complement the strong local markets we serve in Illinois, Minnesota, the Rockies, Canada, the Pacific Northwest, and California. Montana Renewables will begin its turnaround in MACSAF 150 project next week and remain down through late April, at which point we'll rebuild inventories and begin ramping up staff production and serving these new customers. The regulatory environment for biofuels also continues to improve. I mentioned the 45Z rules are now clarified and out for final comment. Further, and with plenty of press, the new renewable volume obligation is expected imminently. We anticipate that a stronger RVO will improve industry utilization and margin improvement as idle facilities are expected to be required to restart to meet increased mandates. Restarting production to meet demand volume is a very different and much improved market dynamic than one where companies are hanging on at variable costs while waiting for the rules to shift. In fact, we've already seen improvement in the index margin on both the back of this expectation and the 2024 ring carry forward overhang drifting into history. An increased base level of industry RD margins would be a welcome change for all. At Montana Renewables, we're excited to stack on top of that the added margin from increased assets as we complete our project in the second quarter. With that, I'll turn the call over to David.