Earnings call transcript Q4 2022

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Operator

Good morning and welcome to the Calumet Specialty Products Partners, L.P. Fourth Quarter and Full Year 2022 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Brad McMurray, Director of Investor Relations at Calumet. ahead. go Please

Brad McMurray

EVP you today's Thank CFO; us With and Scott today. Fleming, EVP Marc Good Sustainable of are for Todd on Products Obermeier, Development; Corporate call Montana/Renewables Donargo, Specialty; Borgmann, me and EVP Lawn, morning. Strategy. and joining of CEO; Bruce Vince

of that You can the in be slides remarks our site on www.calumetspecialty.com. accompany section at Web now may the today's made accessed Investor the download conference which Relations call,

available replay on hours. webcast this of a will be site a few our Additionally, call within

latest like Turning forward-looking you Commission to affect call, the can to and filings with this to issued cause find presentation, various remind results expectations. press on was the Please statements. Slide our X for that may cautionary list our Exchange of our factors everyone partnership's statements. actual to provide from our that them and morning, the as this during that refer differ we as a may release I Securities well

Also, we offering such, from on the call. please process offering a municipal in as That and week, bond last bond is ongoing, be to note questions Montana/Renewables. limited this regard about launched may we that

call the pass now Todd. I'll to

Todd Borgmann

XXXX earnings year Brad, and welcome XXXX to Calumet's Calumet. was a Thanks, breakthrough call. year-end for

As to new a high business specialty a launched adjusted Montana company of Renewables $XXX million, for operations led record year the and our EBITDA setting full Calumet.

recent business. targeted We this substantial a great leading strategic specialty The reality. tier our successful levels platform, as industry has we Strategically, can most and well quickly project renewable Montana have delivered. milestone unitholder we've power vision be value our turned top further of have the our of now demonstrated operated believe into a reached since. From diesel ever startup was Renewables were production and become business

pause how final highly of and the we in and that Talking are Slide company a let's use progress, small, and renewable could Calumet our where of Calumet X we why financial part well-positioned. is by get before transition take we to assets into about particularly announced a leveraged service. converting the energy is a turn we believe transformation, transform itself let's ago, of years details, stages X. strategic company to stock strategic the

We at developed some views are It's today. at lays that the wisdom. consequential moments time, of to what a for prevailing as the those to axioms least the few core were, most contrary worth foundation revisit it we

transition energy always consensus. exist. First, popular our let's truths talk global will about and and complicated, the it be will Two, thinking happen. conflicting the One, and is the been transition. than It's more too expensive important fundamental, decarbonization that lengthy, much it

conventional The best into with we seems have to and our coming view thinking. wisdom with consistent that strategic made are the line be

design a confirmed our thus all our XX% fundamental EBITDA, Renewables to Montana renewables Our was we became the standing processing up retain significant conventional when that initial of while forming leading Great to venture, we [indiscernible]. view was could It framework. capacity and Falls

legacy include At our norm products cash specialties Great the continue time, With investment sustainable the strong going we're development conventional the site consensus our processing, in should forward business. flows. Falls that and will same industry accelerating generate to of expectation under the

Royal the BioMax brand, Over a that first we've Purple. in on seen the rapid past growth brand performance doesn't rate year, our compromise biodegradable which of is attributes

TitanZero customers our across are wax our inbound and We as solutions. specialty accelerating a inquiries zero solution also for offerings sustainable called launched look carbon

Marc from you a new today's heard Lawn. During opening title remarks,

base. with through unique partnering and and our President will Vice of specialty customer As to energy his Sustainable Products, offering dedicate across our executive Marc accelerating sustainable innovating Strategy our business

gained capabilities and through spot executive Montana customer calumet's experience Technical we've focus to leveraging will fertile innovate legacy renewable is sweet Calumet a bring to dedicated area. for Renewables collaboration in core this a product Marc and the

The in the market renewable formation. was how strategy diesel Montana thought about second Renewables core margin we to differentiator our

stable once formation, our marketing on Our CI to importance theory now from geography and the it Italy. has strong appeared decks margin subsequently view of contentious unique has here concept industry and was as born. margin From gone of our parity in the competitor's mainstream

to At speed one competitive it point, Montana feels most in we accepted. the now feedstock popular pushback our supply widely was received and advantage source is preferentially

[ph]. receive in we've When year. was an track, seen challenge a felt in was down week, I U.S frequent this don't in already of new announcement a other the believe a we early announcement over the it would like we The days there concerns started overbuild and

location It's already stalled advantage actually have or are new lasting pressures, permitting to We're cost legal contrary challenging. as and canceled in that challenges. feedstock or converted. The seeing and are business builds locations we've due announced this already seen flexibility extremely financing, obvious been and projects

Further, sites convert with pressure more consensus being that less longer, for advantaged traditional waned. has will fuels profitable the refining be for

business holds, margins longer specialty from well-positioned if is the for course, our traditional well. benefit better Of consensus being as to

third The SAF. axiom is Montana from Renewables

SAF at was overwhelming to decision after SAF it we we job As than a niche we like margin every looked sought the prior made make substantially prior could could we RD. the the the higher marketing private received largely At Inflation response in we've highly but discussed early to in invest Act. to market, positive sell RD in time a and stage, similar calls, Reduction

a is there, and The the strategy The our specialty shifted as be will a niche decarbonization that surprise it to it's mega first a the a positioning mover was SAF growing opportunity Montana aviation fair to market leader real say a changed itself From of SAF IRA like Renewables becoming in rapidly and outlook. serving trend. from U.S a pleasant challenge. global

aviation is clubhouse poised next It's leader largest also quarter. in the producer to the SAF North Renewables is that case SAF in the be Montana and the decarbonization America

pre-treater with SAF scope later. expansion, talk the in of next early increasingly these optimistic SAF see upside potentially are once expectations our about the MAX Montana our strong we double month. out, playing place which rate Renewables EBITDA and feedstock With we'll is views run edition Renewables opportunity to the We Montana about through profitability more retain we around immediate

Turning to that the which easy specialties execution. With met X, strategic execution a the results. lose in track we our strong market see the to was to generating Slide and exceptional energy within from shift Montana environment it's all business. lens year the transformation favorable we Renewables, around occurred of has XXXX

XXXX. The a record year board, through Montana nearly us better and commercial a operations have could looked refueled record by was to Renewables happened performance as hold exceptional equity XXXX escalation. market a across of forces that immense this time business in remain at strong of in strategically time cash the the onto MAX and not execution allowed results value to favorable

nimble advantaged sometimes 'XX, we the and environment. yields focused highly specialties we optionality. an organization In through COVID, a entire intentionally fuel what record. inflationary maximizing on supply we EBITDA three short generated ran In years, displayed mean Our disruptions even flow. has chain lowered Calumet's by MAX set platform was rates, and and integrated rates, In cash positive we

agility 'XX, the majority we winter ability. have week well-placed and difference the a essentially year Uri. an demonstrated December can't in commitment, storm operating. back with all the prior thank different. our to we but years. of the makes, entire week in challenge, their same teams which of Montana That fully few nonetheless, year, built year the from sites of a quarter encountered the the learned of was of out skill delivered At over also our us was of and and time for and Over storm similar operations EBITDA, launched year our enough lessons past a Christmas business the lost December's last X we are In In cost but a and years. XXXX, their What early teams roughly the Renewables, negated of the still I capital record the result all and fourth year, period, sites

Slide turn for status. Let's the to X current

a in third As came been a site rates performance cash SAF the and facility. quarter we unit entire Catalyst ran separated and took well. as plus run quarter expected, up and the We our renewable fourth and generating exceptionally class up diesel limit. has flow down refinery, our throughput to in world planned as have diesel hydrogen niche specialty asphalt the into renewable

one chain challenges supply commissioning. are a unique, intense While operate and businesses mission. amid gargantuan team we to of the a been cold shots independent sequential one with deliver Delivering schedule as few site the effort them remains these and track largely on project has on and weather this

customers startup, suppliers to important this chain, we've to de-risked industry. which is been supply our successfully and have selling Since incredibly in fully

Our plant day. up ramping X, March hydrogen commenced we're startup to a barrels XX,XXX on and renewable

midway SAF and Last, operational April and producer quarter. project together team the through March North and startup teams will pre-treater This scope complete Our complete America in teams takes that be added in running the as tractor of project April. SAF be the really we is working will next in [indiscernible] in and proud of we're will on. largest the our well commitment mechanically the

expect we in growth have to there. the we which our be previously from quarter, During EBITDA, with run second to achieve guided the rate XXXs mid

segment Vince level to turn into you to it I'll further results. that, With Vince? take over

Vincent Donargo

you, morning. Todd, Thank and good

as the full an summary through see on performance and As financial XXXX. for environment results. year We both strong shown year margin quarterly X. Todd and and can Calumet exceptional as into financial the had our Slide targets mentioned, operational The on table carried metrics our in quarter you exceeded fourth

of continued through was you and XX improved a Xx. Calumet's in debt the has our end to our transformational we been balance I sheet. heart XX-month we many the net XXXX, at our take and focus took wanted the EBITDA, years, segment, highlight trailing to of Delevering the months strategy ago, adjusted for I by Before on XXx step XXXX.

is meaningfully yet now goal path clear our but it delevering achieving and gaining not to have capital. priced of mission to competitively we complete, has progressed a Our access

when while was business and Montana steady course, construction, marks state is and up in we new these running. pre-treater will this were output double Renewables Of essentially company's EBITDA the expect the achieved

products solutions the fourth million quarter. EBITDA Slide our X, to specialty adjusted Turning generated $XX.X and business in of

SPS focus off results. the the on quite specialties and fuels our came commercial record to year. excellence focus that be environment their strong and The from third in the slightly the they continued team While of level, continue margin of shows benefits end quarter the through for

have down of on U.S right most hit to facilities that Those several the as we impact and out start albeit freeze plants have had to normal arctic of our running to did quarterly in December results adverse, late around full an return been year-end. the XXXX. However, our operations quickly small shut

year For delivered our the of $XXX EBITDA. XXXX, adjusted business SPS million full

initiative, excellence constructive margin expect integration, this we bar continued remain the the not do while early reliability that believe an have contribute to and that strong environment margin improvements forever, the to we normal. extremely elevated We to we commercial see and XXXX, in environment do call new all

adjusted the XX, to and business quarter fourth the our million performance year. Moving Slide full million brand EBITDA $X.X in $XX.X for for generated

I this more seasonal box the quarter fourth for As quarter's mentioned retailers back saw performance control on inventory big we brands even typically than call in typically going and do weakest on the November, into as last year-end. the is impact we focus quarter

model we We business how turn headwinds integrated than tradeoff talk is performance brands. a in lot can into often SPS more experience we specialty SPS about as in for brands. the [indiscernible] produce tailwinds an XXx performance benefits This our of consume products and

supply To in more name not SPS. and offset others business portfolio. the crisis this a of hit chain experienced directly this anomalies all business in than the Calumet XXXX However, by the of few, are

majeure through was which a worked from We our supplier, additive year-end. largest force near lifted

in increased grease has tight and all largest discussed our have limited a in from alternative previously, our we our to we our supply sourcing grease highest meet areas. supplier input demand some and of costs market growth As lost supply ability

we how environment. of over XXXX And continue box saw end is revert is steel along. performance acute we and in the to inflation brands more seen far consumer some normalcy this Near the prices past semblance takes to time the of of can year, of years. have to so up. of roughly lastly, increased demand This inflationary trying pick we offset million big One in costs $XX X example pass

segment in brand brands We strength are our its of to we match start underlying optimistic the that normalize the performance financial results XXXX. of as will

busy the business conversion. our had plant and quarter Montana, another renewable turnaround with diesel to Moving

quarter. so that smoothly pleased very renewable to Todd and are We has progress start the let's on Montana, customers serve begin to the able the SAF and plant quarter. RD to front our discussed turn our diesel to we're XX discuss last Slide so already

several and of was portion the throughout was factors -- significant That adjusted was a $XX.X half one-time plant of quarter year. throughput us fourth crude of significantly, quarter. EBITDA production. of million the the no in turnaround Fourth the impacted Most result that negative there for impact us no means second

inventory out not half carried what by expensive of to over third falling immune the inventory back even environment, We price be and turned a restart fair Great amount the from the spent winter And upon a weather of was of processing operations. Montana's extreme so Falls standards. quarter from quarter the finally, we

fell million below impact half of second to times Fahrenheit, for conditions In adjusted of items cost at to and working XXXX. in the $XX Temperature XX expensive all, $XX one-time million natural making these impossible us minus the extremely have degrees it EBITDA from we gas. of estimate

operational the in asphalt run rate close fully EBITDA these as we challenges, Montana pre-treater still Renewables legacy achieving coming delivered to XXXX look EBITDA the and specialty in Despite Montana forward online April. is million XXXX and is with plant to of adjusted $XX.X

flip Slide to for turn With call concluding XX Todd I and that, the let's will Todd? to back remarks.

Todd Borgmann

Thanks, we Vince. In for expect to chapter at the good. Calumet turnaround close XXXX,

this will We to allow of us tenor story. have accomplish critical a the next near-term Calumet few phase items that

and to First safely and XXXX Major operate continue we we must were this taken and steps reliably. continue expect on foremost, trajectory. to in

we entire integration focused storm after of commenced Early spending Uri, reliability last assets. Northwest X-year Louisiana XXXX plan winter capital from on our recovering year modernization, and a

specialties $XXX function business reliability year a year-over-year than extremely adjusted program worth volume of more north our first was in are well EBITDA. that is XX% pleased We capital, million a which and the saw with lot of while growth, of

the to $XXX operating keep legacy year to intend recognize to we million capital in We improvement in last million expect XXXX. to our spend and of business $XXX

not as We growth to have pursue of the also but we could portfolio capital develops. risk midsize have a low that small nice approved, year

investments evaluated are, towards discretionary opportunities of capital compare our capital as those purchase in the as will marketplace. all against an rate exciting the we high As those hurdle be extremely using internal securities own allocating

We'll to differentiated is mission capital unified we specialty businesses, add continue our to Scott SPS Further, integration as very look will new each segment leverage they're we room talked we that as we'll the performance single positioning. business report strengths with performance we specialties have different the Marc Earlier without brands at to as separately but and leading pick believe about one vision. brands and sustainable and well. operate

Montana pre-treater so Renewables we've that about we'll the frequently. Next, complete talked

is access As pre-treater achieve before, place. renewable money Montana we've mentioned in advantage good logistics the making both Renewables and to feed positioned to are fundamental and with to ideally diesel in

run We and game our of maximum completion stood any unitholders. them to up phase clean so. the work EBITDA next feet number achieve like the the expect navigate shortly, we of us normal be by or to return the for quarter. Renewables, we With options in next that, risk out past to that of process we'll believe Upon get changing unit end we’ve increasingly We to type pre-treater, remaining a kinks the delivering rate expect the one. month have Montana second to exciting years, the and adjusted couple our is which of middle an available

me frame to it value. from think we how try which add guidepost case, our Let the up about as planning serves we

with process in well we're exciting opportunities. two financing First,

is received recently been DOE news that the into X hurdle. guarantee relatively able to bond it's percent the municipal into support. Further, second Well, The receive accepted applicants major phase the of we'll Progressing offering small that is clear. announced week. a ultimately DOE we first are no last The we've of Phase process.

down before and SAF renewable the diesel developed and was of program opportunity hydrogen, fairway renewable this DOE we mentioned support. to right what believe are We've

an expect Next, markets time IPO we at and of operation is Renewables of the work to a the Montana earnings power towards are when unique demonstrated receptive. clearly

group partner inception vision who that that with professionals with interest We months couldn't of possible partner we We're ways unitholder then an ultimate did value. and with plan of high-level strategic be our quite of in a its that roughly X Montana share sharp more the potential is minority It's a since turn that experienced [indiscernible], before to we Renewables. working into entire ago, the additional for as deliver thoughtfully relationship. pleased

value base options fuel As -- keep look unitholder we'll on the SAF. always, call as to plan. ultimate remain aviation talking Last, for or with MAX our we we talk potential we what sustainable difficult Renewables and of Montana focused enhance to open without ways it's talking about the

to business. exist is renewable that more continue conviction or gain that We our a same with even advantages diesel opportunity in SAF tremendous geographic maybe the

different in SAF ways. about talk We

let clarify. me So

at XX,XXX day RD per can then in of result scope growth online of to barrels XX,XXX that is believe project. which of to production the the existing potential our plant which the SAF. converted expand adding in X,XXX,XXX barrels a barrels capacity a XX% day quarter, and SAF is MAX case SAF we have We day we future a second coming a to throughput, SAF original throughput or approximately

for of of enormous XXXX. the the and early already already quarter, potential expeditiously. we Reduction As expansion wants to the Renewables discussed to quickly, can Inflation market positioned move we partner we've supply, progress that last in the the size, Montana and Act, SAF and to do who SAF the future U.S in mover forward is an bring the a MAX energy infantile or for reason the reactor the should around recent combination The ensure largest we fact as the is purchased size needed go supplier current

is production are million mode could extremely staggering million and forecasted in early. XX annually or by than generate and billion put a than MRO more years. less obviously In XXX gallons numbers These MAX aggressive and To itself. SAF U.S next today's the in X.XX%. Some market have organizations gallons perspective, SAF gallon reputable that XXX XX

this That develops. to being as front an said, industry very we're row a as seat leader fortunate have market

we'll our MAX and potential step as we complete, expect of full we'll SAF the it our to additional progress is engineering potential focus on a As ship be year. pre-treater component as next certainly soon IPO, this major of a plan, information this as throughout to deeper we have

to that for queue the questions. we're open operator, ready With up

Operator

Wells The Instructions] from Reed question Please comes [Operator ahead. with go Roger first Fargo.

Roger Reed

Good morning. thanks. Yes,

Todd Borgmann

Roger. morning, Good

Roger Reed

talk I'm online, companies PTU reason and guess you maybe a Yes, just, quick lot see Maybe other I let's PTU far, be XX seen could might real gone of how how here talk whole about sort so the is watching days. process. struggle with and of, the about coming then in we've we the it's asking teething for the how XX any fits to we the next pains call over

Bruce Fleming

we second, If is a just something, that we take, kept Hey, up The been is novel. Roger to date. converted. got about a experience the the this and we which took run else has shutting had you left was and crude Bruce. the with and We've we've Everybody live facility did Good back one kind down step PTU. to we morning. favorable very We one of asked converting.

project was well. logistics the first separation the So and that went

Second project unit. renewable was well. went on turning diesel the That

is project did third hydrogen, which on about ago. renewable XX the days turning The we

the one going I risk and Todd to more I indicated, that but this. As jinxing that's of well say, got have this, we leaves think at step,

opportunities We design. had about to. referred design from We addressed I known And field haven't in industry benefited added we the heard late problems, couple can experiences we our great all that doing The a things experience those the in a job. when of some of is, say into elsewhere. We guys some you are issues, the misfortunes. any

Roger Reed

should we've what's site attention kind -- are of let's XX,XXX it. it like about SAF does I'd barrels being other wise possibility in of supply to? to, And related line pay to But of the area I other Definitely model, is, to of on broad seem talked at before or also your Feedstock yes, is be feedstock canola kind factor labeled a focus. day? as guess it MAX oil there as a to call question on follow-up the that we SAF able positive. a an would going you

Vincent Donargo

I'll of Vince, the XXX,XXX feedstock barrels supply. again, in so like that remind we sit day everybody middle more a of

be supply. and high avails to goes to got we as physical going issue the yield is us. of [indiscernible] XX a preferred It a sources an pretty They each for tilt never to percentage, to machine So We've feeds. SAF quickly. have point the signature process going reorder that's optimization the in

side tallow. feed to real feed is our that's happens, the reasons generally see preferred from absolutely on the broad preferred industry up a why trader exceptions supply but you any by to of We the products vegetable one that We animal the street. veteran side on Roger. feedstock that overachieved of And I'll As we difficulties, an products, brush most side remind don't a the couple [ph], tallow led feedstock. beef are also that, in department the started sourcing XXX%

Roger Reed

It's good to guys on and hear. the congrats quarter. Thanks

Todd Borgmann

Roger. Thanks

Operator

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

Amit Dayal

deal, Thank respect use the proceeds could color any us the on you. Congrats municipal so give Good that to from financing? the of morning guys. you far. execution on With

Vincent Donargo

Hey, Vince. the for its Thanks Amit, question.

in the our We're SAF stay But things -- that put going Montana we're case. expansion had to is Montana place going of are financed, reactor. so the the this. a is not the is Todd speaking, financing couple already underway repay past. Renewables jumpstart company Renewables that parent in spending money to on inside This mentioned broadly the will that box. MAX with We

have us order we've started bought We're timeline You those now. that the heard it about bills essentially before, engineering but accelerate to we guys paying work already. speak in and

estimate better money for good the So as expansion. it's that engineering so or We'll months progresses in the cost. a for installed maybe know seed a X

for tuned those updates. stay So

Amit Dayal

just of SAF of barrels by how for sense of more end you us Could for Okay. be And you me. give may and that. RD many you the one per Thank XXXX a at day?

Vincent Donargo

right at now. I'll what tell you we're Sure.

permitted diesel. of X,XXX approximately at plan. have That's of barrels renewable the contracted X,XXX We contracted day capacity. That's and our SAF XX% we’ve a day current barrels a

a We're SAF, expect to to we range incented mentioned why that. That's expect conservative better of Todd one exceed reason I economically X,XXX ranging than up so our promise. X,XXX. we do production. pretty and SAF to will So pursue that

Amit Dayal

Understood. That's you Thank Vince. all I so had, much.

Operator

with Neil Please comes The from question ahead. Sachs. next Goldman Mehta go

Neil Mehta

Appreciate wanted team. time. ahead. the Thanks, the go and year to I XX Slide to

that XXX CapEx to buckets of understand should guidance help XMRL. on CapEx what or provided how sustaining about 'XX you associated XXX CapEx Can You business? us and the the think that we maintenance with is

Todd Borgmann

This Yes, thanks I think the is Neil, for Todd, and -- question.

I think there's largely calling and modernization, we're two buckets. Turnaround $XX bucket and be focus. in other about million bucket reliability the integration $XX million XXXX to then

So maintenance, some year. also last this positives we group spend well that lot a that returns come is there's largely as saw but as and some of with

of give So very year. I'll you things a we type last to of examples. a the lot projects similar are did couple these

[indiscernible] upgrading large system City. Shreveport of [ph]. in We're we're So our system, the in refresh control a middle multi-year control in

really tank work we're tank of between the We some improve We the year across network our integration to kind last system. and and that. some did have able the plants from work of

yield a have which and Valley We upgrades. will improvements turnaround, with reactor some come Cotton

work systems across are more utility utility our do have important. to systems We and

In an of in earlier to the back and $XXX as mentioned that most improvement systems. came a of really reliability out the it last little I was fact, improvements I look our million utility a largest of, year,

good remarks, was specific of a it program. hard system plan in water on -- So to that. although another of maintenance The would the continue to returns, on be really and to we're a Shreveport. in controls that utilities it's that generates example thing number go so far push associate so X-year type to both upgraded maybe an kind Like a whole it tanks, and and going of scripted ahead I said

we not the that, city Uri. a about impacts impact. in the same it talk year And from would've had holds been thing that greatest for the when few with three was we really up for days. December January, honestly ago the and a of If So water in loss the

that to row again, to a in going years happen X going not that. we're let So fix we're

modernization, by that hopefully little what So of kind Does mean a the reliability flavor maintenance. gives bit of help? of that focused we

Neil Mehta

about of sense And what to CapEx get looks flow because seem kind nature, in like. time open those some projects then what of we is, helps. That trying we're do -- of sustaining as does think a more there's free just cash one

Todd Borgmann

we so of we Yes, an our year, is But about type after about a we million X-year type say the rate. $XX $XX one think million kind launched elevated of probably year rate. to I run -- million have last type million range. think I'd XXX $XXX plan run more long-term that as $XXX

Neil Mehta

structure. follow-up Got you. just the then is it. And Thank around capital

outcomes are job than period. we're and things done getting levels debt protect to to downside, resiliency the economic elevated You've and talk better little what a environment financial very a terrific get your last time. now tougher, bit about uncertain net into the business very, more so what the EBITDA in that you've during COVID was Xx from down model to the built a If

Todd Borgmann

time, think of debt to survive, on in of you general, record same we're because that. a take Renewables. couple general can In ways remember additional system of mandatory our EBITDA the $XXX improvement an I additional the At like basically an million Yes, that to out have addition with feel we'd we coming run. stream we to long the over don't in Montana XXX% saying

-- a So reasonable that leverage to got the the is go-forward it's point our on But high-end a where within range. of we what think we've range.

overall see load decrease long to over I we to think from will operations $XXX you flow the cash that in come see as run, debt million. start

I to on year broaden guide just on to we're about the really think talk that can And us rely market going right. and signals capital you out received allocation as whole, a throughout there.

sources from uses look I capital, think about we sources cash I flow talked and about. as ops, that it's question we broader which potential a of and

in have process, [indiscernible]. We the we're which muni

is process, Montana have equity could We could the heart we it that Renewables at uses, be takeout. full could have which be DOE sale, a look could IPO, mentioned; the both, equity a minority at debt which it potential have We your question. we be we repurchase, of it be an

We we the facility, SAF $XXX CapEx. have have have million Stonebriar repurchase we have MAX equity of we specialty and growth CapEx, repurchase,

allocation investment with But go an thesis rate I say too guess If variable And in So Renewables MAX That's the to capital price lever. at also continue imagine is further, I'll really it live, where will be closely. the single say with equity. of it's return. I kind is fundamental much but watching higher strategically capital that we'll hard that SAF. I changed. remains deal state, to probably Calumet we maybe biggest a markets do shouldn't is want our hasn't Montana today to steady guess the of when it I to of that

gives actively So pursuing color the that more little hopefully question capital. to we're bit a and

ways We on really focused now bunch after the deploy going that it. Right effectively. have market to to completing our capital us of and most we're pre-treater deploy to we're look to the a great help

Neil Mehta

you color. Great Thank much so guys.

Operator

The Bank comes Gregg Please next of with question America. Brody from go ahead.

Gregg Brody

Excuse guys. morning, Good me.

for there'll DOE you also Just deal I'm you send at think to reserve deal do capital the have that but of call when cash you entity? capital you keep there's from cash to there -- that cash and to basically to Or you muni some this CapEx? for trap that will we do funding anticipate you would out that entity. potential have Renewable, or this potentially at allow curious, potentially be that mechanisms that different year, -- think a a have about -- Montana you require lot

Vincent Donargo

good talking the XXth, about Yes, assume Gregg? I you're And question.

Gregg Brody

I'm call it there's about year Renewable, curious preferred I just to going way you whether instrument the and sense, keep just you to No, you you if decide feel or potential to keep some believe send you potential you're like can I'm at fundraising requires from the distribute a fund Calumet basically what's the cash have you're-- if trying capital you to talking Montana for in. out about? get if a of money you're everything the talking MRL, you

Bruce Fleming

Maybe Todd it to Bruce. that is for this the I'll helping Gregg, and start Hey context. back flip corporate with

one and it's Pincus. a That very X capital a is that minimum attractive last meet LLC the partnership hurdle to which not do we agreement but we So IRR. X% we've got have return Warburg have in is money, low formed an it reasons we with year. was at that years of the structured requirement, There call a

it, we to to imagine to the you at and we're wanted make we're Renewables, ones take to sense. we present going that I handicap advantage the capital of going to themselves we're prune them get structure that's me to take as that evolutionary, the consider opportunity if and be are opportunities Montana going going it. going So to see

capacity, pretty MAX an municipal up next capacity made use we and partner to of this, attractive to sense So spin will with week the expect of on deal with in the Montana, right state at in now, great we bond their of going to that's level price for what out take the of what but lay SAF some time, us. The well expansion. is little think further Energy Department a we is a

to committing staying of The So this but this reasonably action. flexible evolving we've segment. and new of not value a industry kind in lot we've been thinking fast a paired, for successful is side course got is by that of a on reason our particular shareholder pretty adding

very who for be well location we to of pretty smarter set interesting think advantage. geographic our going because see that And to who's up and way we're through It's their picking wins.

of developer just group, stay the kind So you will. to need if now [indiscernible] keep of we and ahead the the

Todd Borgmann

I'd guess all uses, sources only bit is, thing add I the they're and And variable. a

sources As greater they the uses. I potential Montana look think the Renewables, at in I than are

expect come cash pre-treater for the up of and But we heck comes possible a online, generating or in this And fund it's looking that, a to timeline be says we expansion the to Warburg, that course to parent of something. that accomplish as don't have to going There's in a specific to we're going not SAF either us call. additional partners, of go lot a have that to flow. capital we at to to certain So used quite -- expect capital But raise kind of MAX scenarios. the that's be opportunistically. to it'll money

Gregg Brody

it? how sort be, it site Got can know weighing be? range opportunities I'm of it. you on if curious could forward maintaining that, much chose you but into a growth the CapEx of how I you line to I you if have flexibility. appreciate of big have you're move against Do other

Todd Borgmann

at Calumet? parent, the At

Gregg Brody

Yes.

Todd Borgmann

Like we move I this own market we million, may growth XX% with next earlier, today's point IRRs. said at and an It I we just will what's I But, in opportunistic like. those we're pass $XXX million to -- and option. think not don't years $XXX or not could purely That's time prices, the at think CapEx could actually of couple some just invest plus have. in us, to At doing may yes, forward choices be that committed the it available that. would that year. our think equity hurdle, that with I the right,

Gregg Brody

but capital Renewables for year? And provided providing past, spend you haven't the are the for you in Montana

Bruce Fleming

its Gregg, again. Bruce

circle have stood as to was ourselves thing your [indiscernible] up think I The the on to We maybe that -- instead background. looks to we've and hold like effectively. mentioned. the not floor We back you're is the, just accomplished want The spending quickly a both metric to as of you those. of elected though get business opened question to aware, purpose in

Okay, muted. that Great. got

got element. figure, we'll So the but advance our a going We've gate talking that or so as to to uncertainty now, XXX months major plus pegged want a as better of That's you going $XXX project IRR. lot dollars we're couple another of we to million a the MAX that's within if something in be, range, expansion a X management understand is or plus cost SAF minus see right that process.

organic mean, really got money markets that present to what MRL, spending it evaluate putting the do, says to when themselves. company capital is to stock, to of Todd the it's I equity, work. environment telling from a are We've opportunities, opportunities growth growth. inorganic rich beginning So lens going company target us we're is for

Gregg Brody

something know then you partner investors. and that. actually that of think were working And for minority -- timeline near-term? last that strategic And could that I on be there -- if a I appreciate there I question. subset heard one is but said I heard there's I is, just don't question just there's a just you yes. I might all you right, right, potential don't -- if something smaller I doing that with guess say the imply did know And a

Bruce Fleming

Bruce, question. Appreciate again. the

So base it's the been the sense upward that our maximize new of plan value and IRA end for look, shareholder that is mainly satisfied of value. changing off enterprise as DOE At of the that the want mentioned. legislation. we've MRL lot of That's case, appropriately the into It's XXXX, running Warburg XXXX, was do off the partnership. price of SAF of we're to business. us specifically of muni to this we again. and and to if our there. the options succeed turned us application we has new a caused Pincus want that off revalue Part We that the the hopefully off to access we developing it of platform the to Todd with in of capital, That's form is that do now. in X SAF that In Very thing our

people into value. approach put already of flexible in want is like to businesses money We're this. our shareholder a hurry. lot a We're quality So short not not that added of

makes Do an if in a of So strategically. strategic with put terms that's timeline specific to we the it? sense by come not. selection down leading a everything do a minority consistent we've on real want significant think a IPO, investment But that said. We partner potential to to criteria want you to

Gregg Brody

is know me guys. didn't timeline. tweeting expect Thanks Yes, so to you Steve anymore, the it. Appreciate I for I the give not time,

Operator

UBS. question next ahead. The Please from comes go Gupta with Manav

Manav Gupta

actual I'm Can how gallon get RD to is to did can to EBITDA was understand going quarter per see this you an benchmark ahead. you this I guys. actually what and first XQ? -- did the that? EBITDA in so Hey trying us track much improvement And help understand you margin it, produce we associated the with the

XQ? you if project help EBITDA was for the per gallon So could what in us the margin understand

Bruce Fleming

Amit, it's Bruce.

Sorry, Manav, in sale, began in production physical into apologies The late shipments tanks limited. we XQ for as was put that. that for built we Mostly inventory very December.

we is have going of not be it's words, What California LCFS, that selling blenders hundred in get you CARB [indiscernible] all are plus on percent the We the the contracts to In plus diesel a priced to formula. tax that. credit, renewable for XQ. So diesel plus other [ph] X.Xx I'll meaningful direct fully

Manav Gupta

were that. score would segment the from worries. justice probably to happen, to the of not what to in do -- EBITDA minus somewhere down No XQ you opportunity were trying EBITDA and the great were Coming did refining understand the just cost, the like? fourth on features look not the quarter, reported doesn't if then margins and Because not XX

a I'm So all was higher number would DX from if be it turnarounds your be just understand not to -- the refining the for and trying reporting you business. significantly

Bruce Fleming

should back. million $XX $XX the That's would. we Yes, million add that to you

Manav Gupta

you Thank Okay. guys.

Bruce Fleming

Thanks, Manav.

Operator

As concludes remarks. there Brad any turn back conference this the to McMurray our would over for session. are to no like I questions, question-and-answer closing further

Brad McMurray

thank a rest the you behalf Calumet, you for call. Thank for have great management all thanks. and we morning. team really Everyone Yes, of your at On the joining here your of week. this the time interest and

Operator

Thank for now has concluded. you presentation. attending conference today's The

may disconnect. now You

Calumet Specialty Products Partners (CLMT) 15 Mar 232022 Q4 Earnings call transcript