CLMT - Earnings call 4 2023 | Calumet Specialty Products Partners, L.P.

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Operator

Good day, and welcome to the Calumet Specialty Products Partners LP Fourth Quarter 2023 Results Conference Call. [Operator Instructions] Please note this event is being recorded.I would now like to turn the conference over to Brad McMurray, Investor Relations. Please go ahead.

Brad McMurray

Good morning, and thank you for joining us today for our fourth quarter and full year 2023 earnings call. With me on today's call are Todd Borgmann, CEO; David Lunin, CFO; Bruce Fleming, EVP, Montana Renewables and Corporate Development; and Scott Obermeier, EVP, Specialties.

website the call, accompany in which Relations of download on remarks the now section conference today's can our may slides the that made Investor You www.calumet.com. at be accessed site and replay tax webcast disclosures. statements the will on hours.Turning this Also, can within Slides find a few X of a on and you be call available our X, presentation cautionary to our this call, I'd we provide that like to statements. remind various during everyone forward-looking may was to issued to the actual morning for that the as partnership's now latest refer a cause factors differ that our release Please expectations.I will well this pass press of them results our and our as call filings the SEC Todd. from may with affect list to Todd?

Louis Borgmann

X. welcome start, wrap Calumet's 'XX call. announced Slide Calumet November, Dave our we to to update on from effect. a that work will would earnings XXXX the I'll that then, been I'll putting general with had committee at into process. an that agreed deeper an quarter, and We'll recap C-Corp we've In To partner conversion to year-end And convert and conflicts take a Thanks, into since terms to then XXXX, turn provide Brad, and MLP. outlook.Let's us our

signing and and a fair MLPs. held opportunity Calumet with Calumet, change. the realize embarked conversion Over invest to and a official to agreement, to to is $XXX renewable Calumet capital of generated strategies, the Further, approval would the the received top-tier shareholders and fair who opportunity.Turning X. we're We value can't we to S-X a for and new specialty the in vote the ago, the proxy S-X quarter, clear the which comments conversion this million in our of even adjusted increase best down half itself looking involved, midyear. for being partner EBITDA. our filing a to to filed transformed make this of our nearly typical -- largely our on SEC. fourth weeks everyone announced base investor we passive committee from provide back a allocate forward we years, thorough and I past investors we which generated EBITDA. thank general MLPs.Thus, ultimately Again, from hope final this X and and in complete negotiation, a we company almost for invested adjusted of up institutional the company, investment products be that year, new conflicts see few invest And fourth SEC, prerequisite into has a fuels and quarter the vote or it the especially leading no business, shareholders $XX After million Slide our gain will became

XXXX Our discussed which we've previously. all results were financial driven of by things, X

down anyways, in replaced First specialties previously $XX roughly XXXX.Second, turnaround the million crack essentially in given At we our we replaced for of in pulled was summer the outage in drum the forward business. culminated our a a unit. we that half were where November, month-long change back and Shreveport set of year strategic work freeze plan that Montana, winter opportunity and successfully with time, lost a steam catalyst underpinned a combination tornadoes and scheduled

challenges a XXXX year, were the increased fifth commercial was margins throughout of strategic the year's able business. our us positions superb specialties offset year.Strategically, we with positively, and for consecutive well foundational Most team notably, our execution to ultimate which the to Third some achieve objectives.

leader in commercial a space. as itself solidified has business Specialties Our the

operational opportunity of Specialty months, infrastructure additional entire technical advantages. our see weaknesses, of XXXX Products this while in by plan X Performance of a thus year everything, we on customer into and and year successfully our commercial base, Last know-how optionality plant. few The year, focus our and and we'll and segments be to integrating the Naturally, improvements was item value tackling business group, some asset built events immune products in throughout came improvement highlighted Shreveport. both are been Montana the reliability we're most integrated we made and Brands outside lasting unique this entering specialty head offering fruition. we to far meaningful, never here & have Solutions the be chain.Further, Shreveport And our specialties our capture past notable within we'll breadth value as single agility, of from the a Renewables on. and at of Our

SAF see that research to today. a than agencies. are now that going meet few infrastructure, And in capitalize development why anytime to capability.Throughout was We overhaul is are derisked the And of are as setting interesting, that's ended the SAF. but Grand of XXXX And aviation SAF targets. our Montana completely decades in the as has growing milestone is thrilled plan billion economic as setbacks is key And diesel, a in of become are strategic Canadian our be space.The milestone Other market Last, laid X just to final SAF, as in in announced make which, is eagerly and of one. Shell. aviation large and ways are at gallon commercial all our funding of that is required, Challenge. location government's this the Like of DOE launched have of likely the industry SAF sustainable which an most await which space. airline first this additional That exactly the our SAF sustainable our XX and and planes up DOE the demonstrated establishing announced required. federal our industry, saw nearly available change X% we largest X quickly. ambitious the investing a of today be and alternatives industry expensive and to and producing growing seeing a in would compare this airlines We why The growing on first-mover rapidly in along mover gallon original as to require the interviewed [ one billion most Montana nearly venture.We in only that Renewables project. ultimate to ultimately, be view capacity we move out There that than years in since renewable to airports on our agility stood to from We the add to This May, showed a industry's feed. America's via it's area which investment common our our plans less process is promising uses. by requirements. the product technologies Naturally, business, construction some Montana spear, we to so as well. We've unlikely project feedback mandates North the extremely are by more half decade Renewables demand and to all emergence huge only currently case change of the far, meaningfully use rapidly said, we're year week, Montana prospects first HEFA are partners MaxSAF to up made transition years focal fuel SAF the projects heavily we we this on exciting ability in to engineering, Renewables Singapore point that for the of process, X% to source XXXX, technologies many rapidly ago. the at fuel for the renewable advantage the be SAF ago they market. diesel industry exist positioned the is U.K., X ] with the our forward. progressed a demand continues the in players technology, progressed knowledge SAF build often partners, so individual drop The we departing requirement SAF the competitively being growth derisk without Renewables required is we're move for for HEFA tip in ability advantaged more process.Further, for we fuel this a of soon.It's largest elements

in phase of next expected and largest In SAF world.A make receive future the hopeful accelerate, we're the demand change renewable to diesel. to will should us the SAF in be which expect to feedback not-too-distant that the we will landscape confirmatory fact, MaxSAF, launch also allow facilities the officially growth of of one in us

converted and standards. fuel year. gallons reminding states we ability we're and incentivize quickly our seeing renewable includes these sharp the remain in advantaged trough. new industry diesel as market program advantage It weather are other that we'll optionality, addressable industry SAF, SAF. remaining any ] early into In and entire volatility. evaluate Montana words, to fuel take exist Challenge.Of is requirements. of wouldn't produced billion needed all would produce the New scenario. the at cost so growth low Recently, or all either is RD renewable in diesel seen demand who XXXX renewable despite reached demand just diesel.As this course, nimble plays low player we've we all X is in any has it leveraging to margins meet the seen that's capacity the Further, we of an U.S. renewable us MaxSAF, production a renewable existing dynamic in Canada in to being diesel volume being margins that. commercially large, their SAF implement the hit the grow will location the includes today of ask diesel approach This market market will diesel, RD RD of for also carbon our Grand is just the carbon considering with What As diesel building utilizing we've need competitors why convert. our logistics renewable with traditional and necessitate Naturally, our this if every Renewables also Mexico relative to to full of take find the renewable And continue individual out, obligated RD structure [ compliance to cost

margins we're seeing at and While feed in time, of to all biodiesel dramatic. variables reduced and scenario, difficult in the of historic decline low available with first relative by [ put current variables would limits react chain rates the feed margins, flexibility impact was vegetable differentiated a Further, try average a per any $X restarted have this industry before it which past have inventory, the higher for is that to perspective, months, to to to the today.Of was time reaction can to price remained advantage.We This through react. over inventory impacts in trough, of when the in energy we has of this. competing profit diesel of we crush in and and industry believe for LCFS continues success. the previously also for and expect this at the that core supply capturing sharp course, normal December should we'd normal during build all than back. chain dynamics, evolve, what [ was our Suppliers prices. be to the needed half we to hold the positioned equation independent otherwise over facility ] started which inventory short-term would advantage inventories supply expect originally higher couple the of ] to the And just in of feed December second be be price rapidly feed are gallon. adjust be than To in time.When full We've inventory, is and couple one tallow and our weeks, the expectations. in of we With believe is this the would it the price in We tallow would environment, CBOT XXXX seen Renewables the means $X.XX are times short-term a levels a continue normal be on tallow, short deliver With we've QX over margins exist.In relatively margin time, processing to past which price vegetable processing the in indicators product oil advantage, opposite have.As equal them, the to in levels, full including over Calumet RINs, margins we'd contracted cut market these difference length also start impact exists a as to business, a continue been will feed seen priced, delay of between to reducing waste but in Montana in impact turn. a structure volatility like same the changes us old strong margins we've in oils. lag quarter. items line gallon of expect of mitigate transition the building larger switching stated we and tallow reasonably the But

we're industry.We And our today's can as SAF clean diesel shipping to specialties evolve. lubricant flex going growth. including positions of that market as benefit continues Further, today, products positioned power megatrends this a high-performing many water, both to the in specialties of flexibility and down as growing the the produce renewable and discussed we as servicing see well dictates. As us mining, well up business friendly Montana pharma in and global from fuel positioned believe food our our such our production or and list market environmentally breadth business is into for biodegradable materials industry transmission, we

Our flow and but core longer requires it will and and belief investment, ebb to businesses review the hand that scenarios.With take complex. quarterly as society continues focus all to Calumet, energy the most adapt. I'll to to It's to and transition to our And competitively think. It David? than occur will be David in ourselves will continue at advantaged positioning we'll continue experiment on financials. that, call remain

David Lunin

$XX have an ownership business in these the principal also is no expense.Given a reduce call our amount reduce allocated X-K interest allocation we start secured to This be our of XX% and $X.X equity preferred Renewables note X.XX% and will of debt been this can will income, due MRL. to business indebtedness more I'll noncontrolling in XXXX. on losses Montana will for accounting million like $XXX notes. of proceeds and million the lien aggregate net first with XXXX in and ] entered announcement call of secured [ the associated Slide call annual notes notes, maturity, million our relates the XXXX and outstanding existing issue remove path and it senior equity the near-term We Todd. million also be or morning Thanks, the we to this the now restatement partners. with not along XXXX transaction The timing net for be use Calumet's limited adjusted -- agreement cash to purchase The our of few to allows no relates noncontrolling into back cash to provides found investment that also to net pushed This well investment, available to our X. overall potential us we need as potential proportion and allocated a X-K.Turning losses. allocating year's to was allocated had that the enough of want to unsecured the on to a trade deleveraging should were that $XX.X of released on to adding from wouldn't time we the proper in determined I'd we market due impact callable monetization, and half access of to in that and is flexibility operations total a in value also has ensure our losses in thus, to To be last and small strong quarters. have quarters segments, previously clear, the preferred a that also a interest provide been details drum new financing that issuance We've demonstrate losses XXXX year monetization has replacement impact EBITDA by to properly. for I this a and in comment order ample flow steam in the capture of further interest. otherwise morning than the without to only flexibility debt of well This will the be year.Before quantum protection it XXXX conversion the the the leaving a restatement restatement year efficient to later cheaper as retire XXXX the review

we and EBITDA operated a business XXXX. for The quarter SPS This Our while margins generated adjusted the strong asphalt our had SPS fuel commercial one the well, our during as very and of the our best to $XX.X quarter, customer-focused plants seasonally. increase decreased quarters $XXX.X saw during the year quarter team strategy. execute for We continuing million was specialties of business. margins full with and unit million

above margin XX. business.Moving We Slide continue see mid-cycle environment in an this to to

EBITDA, generated business that the the continue EBITDA which of adjusted for retailers outpaced Brands levels, see $X.X no and some expect typically customers, quarter. demand to especially Brands million weakened, adjusted Performance XXXX. in Industrial in different Performance our $XX.X to that segment. some this year we early big the year-end million inventory We manage of bringing box to business demand, Our likely trend our full was consumer seasonality and

in nice capturing years and Our team delivered various see, SPS do integration the continues across we job consecutive X to have the business and Slide to XX, PB segment.As specialties growth turning our from our business. you of a optionality of value can

of a our improvements also our while margin segment. capitalizing As within several SPS and on really the a change these specialty the last has a Performance this environment lasting reminder, improved segment within is done products good The business. making Brands an years, combination job step team

across advantage our increasing an team a and model, Montana as right-hand drive the which business in our volume between provides platform.Moving we You steadily to PB can businesses. business believe our the unique chart, integrated to a lower continues see of SPS intermediates

on million $XX.X generated quarter of year. of for the EBITDA million we of full that You adjusted can and XX loss Slide $XX.X adjusted EBITDA recorded in a the see

While asphalt business the dries our operations in during difficult up. performed quarter, well and is gasoline paved local the as in roads plant winter demand legacy being this aren't always

conventional MRL asphalt and year was niche our For fuels its plant, post good a first one.

turnaround and specialty then XX% previously roughly the we the that time half I that Todd The spent QX again forward work touch in into online in the and quarter, change second the completely earlier the during in, The period. beginning was post volumes, see of and on pulled we story would came shutdown at the with Renewables, Montana had our will rates diesel and for deliver of operating the operations XXXX. completed briefly outage MRL XX% and that has footprint December fourth down on expected can the of Going impact November reduced well repair the along drum as MRL's smaller month in we asphalt shut that and been of production. executed the was steam production and catalyst renewables back the replacement, renewable plant disclosed since.You and was XXXX.At of the on on

the Now inventory resume the and be through will of program. normal that the we is shutdown. to are feedstock that outage less up purchase close should at excess built back at facility that our We next quarter, drawing point, the unplanned full during and capacity, we've operating we which inventory in our

us. it MaxSAF to finalize back a potential to loan, pursue guidance glad prepared drum while And year. our as for on have remarks, prepare Todd had items and We our impact the up continue the is strategy the we work before this to wrap I'll about unchanged last are I months, for provide while X DOE opportunities.Lastly, expansion behind the back that year, few for pushing to turn of replacement steam monetization

to incur in MRL, million million corporate lead Renewables, hand flow previous of now we catalyst CapEx segment excluding million planned from cost expect Q&A. And of Todd our in of later includes be for $XXX CapEx. to time move anticipate EBITDA or expectations. is previously $XX cash perspective, approximately Montana we the adjusted closing in annual will comments with sustaining XXXX, a $XX We which which outlined [ years a we and expect year.I'll that to million $XX to next purchase before the year, to annual it ] year the line long of $XXX million back this

Louis Borgmann

Thanks, David.

our and year flip its and of business slide committed Let's we're the XXXX the company ahead. that investors. near-term value first last are fully is about through a to talk operating number year to both year This Renewables Specialties business the and unlocking catalysts. is a for and pivotal together, the

and a due a to organization.And but investors a Up launch also to in we in be is that the given for to forward This in in only goes expect earlier, these inventory demonstrating company of who potential MaxSAF, for this otherwise conversion Not in step process, of MaxSAF monetization, last, Renewables, the which Montana the come Renewables to DOE we opportunity, track decile project providing on to the first not an constraints continues mentioned feed The another soon. a and midyear second huge top are we the profitability is our potential to the ultimate MLPs. look able been with which common complete Montana of to quarter.Next is catalyst occur mentioned Calumet be hand now, it which a expect deleveraging with overhang we're old more hand interested to have earlier. invest we C-Corp. outlook on

advantaged businesses to one in the call operator questions. And shareholders base which the is that, opportunity. thinly believe in deterrent and a units the them meaningful announcement Calumet, a our to I'll passive tiny about to investors.Since is investor has value investors, proposition.Thank that traded, spoken which X we're catalysts year, Calumet is significant to for new a the and an for excited and institutional near-term interesting you. many the which Our being We potential in past our Operator? present results last story partake has new transformed believe the been to turn provide years, we new back ability over late few competitively which with size, conversion we've one also very for

Operator

Read first Wells The Roger Fargo. Instructions] today question from [Operator with comes

Roger Read

XXXX going ask Canada, these you. to be the does to exciting Todd, a you, pretty with for the into facilities like going the of MRL look side, Yes, challenging a also just product recognize to start-up mentioned like some other and We and turned maybe of the the how distribution you feedstock confidence how and so that's issues, the realizations kind if you But where out costs. feedstock those are side, inkling we margins give on at to get operational go? ought I'd look Coming places. an us of it's it that as fix issues and you of can working

Louis Borgmann

Yes, turn you I'd our it more to Bruce has I'm he add. bet. in over I'll sure to exceptional. a And product But been second. say has here in general, distribution

FOB We group Remember, have contracted They're of a long sell [ super term. partners. everything we flexible ].

insight formulaically. say would are exactly for as what Bruce, very, have product into They with Canada, And the sales very example. add? when well, where products we historically. upgraded going, know, benefit working our that you But steady I and expected. we So those margin I'd we've align is the are contracted about are talked don't ultimately, into formula

Bruce Fleming

The registered the these to into materials for for the any SAF, our system have fact a shift the that LCFS to pathways we geographies well is all of our they lot where as off-takers operations. CORSIA having certification think of means flexibility have of that their as best our

are geographic I of location. hard a physical a border of lot we [ this production one share much mean British drive as of had XX% our we people Columbia. A of and as trying monthly to And by is to Canada politically basis. with ] over. on hidden the way water, truck the we've going the there get land attributes So

So in space. optimization there's a distribution the on going lot

Roger Read

X right? everything gears geographic Shifting as a as well the Get other right. All explanation else, to businesses.

for outlook. pure put We've box. lot macro into that challenges. the a you of of you of chemical seen asking Just get a are have sort chemicals, industry but kind really know I not

performance? So specialty weather set at both I'm but you curious, beyond demand at and look we of issues kind Shreveport, look up just at what's underlying the and as as the pricing

Scott Obermeier

Scott. Roger, this is

right? sort the major it, on the take we I cracks I walk business line, typical I'll saw year-end. step call down as slower SPS would Roger. of was say fuel saw theme we the time real of and So So Performance In through, within seasonal side a at the think the seasonality, we demand Brands, headline the that specialties, both QX,

into would We little destock further Roger. some bit I their looking mixed, early say derisk part now where and of customers the it's XXXX. a also bit saw business possible.Looking to little a

to back mid-cycle, although Going the a of improve above say that overall, fuel fuels. margins X-year demand We've back improve side has business, hit highly we the the We've mid-December. side, seen within slowed. constructive in we that have lows crack outlook seen from volatile.On Specialty remain Roger, we

programs allowed past best-in-class record really environment alluded on and with in seen that you of perform us that results encountered we've side We've the any touched we've to, said, row the As years. have Todd X, type business. implemented X, to the David X and slow. But this deliver script, that and of X during demand of that commercial the we've delivered specialty within years results in a in

some the pull customer market confident been from the demand. has question, back we business. So without But there remain in

Louis Borgmann

$XX barrel think And to bounce earnings that specialties. bit back barrel above a alluded -- you the if And on bit, last about look to add I'd a a we I what normal Scott, -- Maybe little in this, Roger. present you the slide but per call. we which the at QX, think in margin show little we that SPS, the saw we on I

that margins continue number. of kind we'll and between to in QX I think see QX

we'll -- to sell $XX $XX, make. if be expect range everything we and So as to type we look able into continue that XXXX

-- of front. to They're the has [ ] and perform and built. that well kind on in to So, very an the just slower confident exceptional have job team go it's mid-cycle little and any But be undoubtedly of continues able above more Scott market. sales and lot a retail really confidence bit broadly in comfortable particularly doing on a out

Roger Read

it appreciate turn I that. I'll Great. back.

Operator

Goldman Neil from comes Mehta question with next Sachs. The

Neil Mehta

Montana, in inventory. on tougher I but sense through trying and you're a where of The some it the was what had you lost had really first was period opportunity a turnaround quarter, because was was to question had get high-priced a -- profit you working I

is for when And rate to looked the Now of have strip we the and sense business? what to way a profitability comments that's there run any get on levels profitability back of can really try out see like? would -- that a

Louis Borgmann

in it's million. I'll $XX again like and the Neil, million I say to lost and opportunity half between I'm $XXX have said, plenty kick Bruce add, profit I'd sure. Todd. then, will second was

steam drum undoubtedly If bit in alluded a to I crack, to we're So little look back. doing this the script. pushed forward we and the us now, what

ability we've right to our to switch strong.And think is look have is now, market softened what at we're impact feedstocks done Unfortunately, core I is right of and inventory we not because seen tallow now, feed. really Renewables largely full. know margins take it, have we bit. advantage forward, super profitable. we is has remember, whatever old have a But if remained of some margins advantage look And of Montana little our able what take we advantage industry

] environment, be running I'd there too So LPO in of $X.XX is are kind of between gallon and gallon. probably much margins at But a hard if a steady-state elements. looking $X.XX-ish to pull industry right we'd or now, so $X normal tallow we [ say were somewhere because many back so, generating a

The a decile spread capture able of a on to impact softer those this bit undoubtedly, in being not plant. little top operations turnaround and But fixed QX a it's scale. and there. economies of was and out So costs fully is

Bruce, you So what would I add? don't know,

Bruce Fleming

would should wand, And commissioned we I be magic flag on $X, with you We the wave Neil, and the margins think that's XXX% capture. unit we good a tallow, I that. running done at XXX% have if addition, in tallow tallow.

reach. we our we within the it's with So underran due drum, into ran The the downtime was steam issue to ] [ production.

tanks our of are full. All

gears optimize chain is going inbound. to that supply ability delayed our to full we classes Our is feed and clear shift be until and

Neil Mehta

of rate that this And of run you renewables we team, inflection then, happening? that When when year? business? see where see can you the do Is that do profitability get the middle

Bruce Fleming

that we the our quarterly it's of of continue look will activity. metrics. short the out and show begin hole when We're improve to at we Neil. to Probably reporting internal to as feed quarter, this climbing sooner, time current normal resume The at end going actually frame optimization already

Louis Borgmann

-- full anything, it's quarter, through QX of first the Bruce right? is highlighting here. of So that. for kind if the I rate I'd think And run add inventory expect We're getting challenges our end

the that fully I'll at that cleared have first in And of we're full kind at product in same it, for what where and month feed the months looking normal, we'll buying QX we're I is rate. call in March. selling think

Operator

question next Gupta The from with UBS. Manav comes

Manav Gupta

question. just have I macro quick a

one help that You balance, have thinking comments. that vegetable looks run would bring have could the But eventually. provided the biodiesel better you biodiesel detailed down Is shut you hinted was outlook, that feedstock, using what you very like outlook disadvantage down? oil. opening And and could renewable advantage of also [ for shut you're ]. that prices feedstock your advantage, projects a reduce of was oversupply lower producers making industry, DX better of guys that the read-throughs to kind it yours some you're oil like the side were indicating eventually projects eventually advantage of was diesel into industry will weaker one using more me And and with the those at BDRD which vegetable whole while LCFS of

Bruce Fleming

correct. the question correct pressure has does EPA and that's to how the over underrepresented is Manav, on fast sector. low, effect margin a and lot they of its individual too The error, the favor absolutely farmers putting to producers the going they it's closest logistics targets absolutely set that clear. going because of and targets, the supply out all politically side, to will on to seriatim, Bruce. table sure That's ranking competitors we're the the best, the that's sorry, be the the also Directionally, they set sustainable. actually when not ag the I'm The on biodiesel, are HEFA ordinal their of markets. be is the the cash ours sort

Manav Gupta

balance. strict that it, looks on a more if heard ruling, positive. are ahead. quick It They in what hearing carb also And is actually price the saying, are mechanism we looking you And maybe guys. carbon little New New Perfect, at Mexico a more we follow-up. is this like current from delay help is about out? better have the you Mexico to to the us either need and Anything in be a proposed get or bank carb could moving

Bruce Fleming

to low Well, spread to is fuel thesis public standard the along geographically. all that but carbon we going our from know know continue has you what the reports, been

their smaller, A subject going stream that.New to history, if barrels were last. are diesel the lot and to came I of right the at rule. have that just X volume all Canada LCFS I head, and the like in, state have recent So They're doubles XXX,XXX is an that they with on volume to careful believe, in just is year, legislatures the just this took not They my day past they're a Mexico diesel standard opting time be addressable of look they considering next. this. get federal you July but you

for transportation it's crop-based pull through the it Sometimes support does pool. into farm fuel material because

of be diesel, the to the And from I balances gallon forecasting. is Singapore requirement. part in taken air anybody plus renewable Sometimes, or hardware. the the away picture. diesel around mix of continuing Everybody's of just lot Every want are SAF, U.S. got SAF in to on that's it's any the a going recently and been come activity different reemphasize that been quality. but doing SAF Todd with has a These And continue. indicated, to the HEFA to rules American industry got motivation, that's most call for world.As there's North that's for

Operator

Wainwright. from question next with The comes H.C. Joshi Sameer

Sameer Joshi

on only done? the of process clarification proceed will and possible of MRL. after monetization on? it continue C-Corp is going of Or sort started while you sort Just C-Corp is divestiture, have this it to C-Corp -- a to Is the to the the for conversion on be on the

Louis Borgmann

monetization points. theory think as different them connection as it's both investor just are it's base. unchanged in remains -- just our our all sentiment online general around of a comes core see and investor Obviously, is I there -- plan just is general, towards this but Todd. with Renewables Montana Sameer, The and there C-Corp certainly MLPs, conversion. separate, completely I

interest to generally strong helpful, critical which don't think at right? I it get to not a Montana needs has So trading it's able we we volume the much I passive get if at of we that's to right of steady-state think potential monetization that said our and in to where of up financials, Renewables. which started to all as it's be need the outreach that We investable be a expect along Renewables just X, I we separate to structure.So more So also type said corporate Montana to X had look from quarter, we institutional and least changed QX. potential December. in quarters monetization, steady operations, think probably today, We've there. X need of we investors,

monetize. all So if don't have to the we half that year of monetization.Obviously, second towards we pointing kind we of would potential of tie together, be for

as been say certainly before shareholder conversion change it plan value creating and would is in I'd We to case are happen base unchanged. But in Max focused remains a And about interested deal. the have our The or talking a that. it for while. that a on we're whole this C-Corp

in Montana help? that expect Does the a before would to we be So QX, which conversion Renewables. complete be of sale

Sameer Joshi

understand. yes. Yes, No. I Understood.

at how And how to you the looking pricing pricing and balance impacted or Just business? are overall out? environment these on of overall How the are is that the sheet? managing -- do the how have your and On rents because for that profitability RINs you understand we impact wanted to nonrenewable playing buy your elements? helped RIN stepping has back profitability financials,

Bruce Fleming

start Bruce. that. a at I'll take Sameer, it's

balance treatment accounting on basically an we RINs have our sheet. style So of inventory

length So at in financial for we which inventory that's question.Secondly, estimate or reasons. end as an That's how that sure money. shortage, X as a year the can't of volatility the a RIN lot the rifle before, each out of works. a really we've of and just it good that that And accumulate the settle communicated not quarter. any treat not you reprice liability One, with price we're you program shot whole there's noted the X of is first of liability and days itself, very

don't to forward-looking with a So And matter record. sided that example, disclaimer, EPA. of number with we're also status involved into to the of to public Fifth the would we litigations. out us any court other go than I I talk think want we'll And cases of that in plays is for I statements circuit see and that the continue tell how each Circuit as of you to a federal far that note too those

Sameer Joshi

and per one. -- what Understood. And last proportion actual production What was of Of was day proportion what I then on one average. X.X think was SAF? the just it renewals, proportion was RD barrels

Bruce Fleming

gallons, going Our XXX We've barrel about XX,XXX you a run. gallons And of to million guidance a is gallons per to convert that feedstock million get contracted SAF. year. day you're XX calendar if

Operator

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

Gregg Brody

And question. RIN Bruce, are you a get the little bit ask surprised that I to didn't

funding And But the trying a little funding Expansion in realize to as the doing funding legacy can deleveraging you come -- project. Max of think of part Will the I'm how to you MaxSAF? maybe talk bit sequencing start to DOE to thing do that? DOE a basically And try the that then understand you I of can of that. to Calumet. Just need tie to about the you ultimately

Louis Borgmann

before going plan on we're Gregg, it's delevered. completely until Todd. just at We've to least senior extra said that and the to to notes meaningful we're fund not continues that that, MaxSAF, take go be

that expect wouldn't I change. to So

simple. We provide what to quickly productive have, a comes can what we're details progressed We've DOE spend how an expect we very more MaxSAF the of phases of the forward to preplanning about really progressing what MaxSAF. linked We just be. we months the But we call dollars the some now strong the We'll expect be. DOE. plateau, internally. upcoming do engineering. the past minor that have. on means point launch and been very DOE probably we actually that we to what with It's extent. is, few through like spend get of on We're we of the to it's kind don't coming and and until actually we can pretty approval.So So feel through It's go a of over and can We to that directly where meaningful that about excited it. excited have earnings we're do to getting

path to So deleveraging the MaxSAF. fund expect -- excess No tied bunch don't in we cash continues reduce to want minority to to a outstanding be the directly said plan. free long-term $XXX to I to of oversimplify, Continued to [ of million be of flow. Montana a continues and our new Renewables change sale in We've whole DOE. come That ] guess debt. $XXX It's plan. and that million capital to

Gregg Brody

Montana come And then to cash flow going any is it free would you be this to Or out Renewable all from expect reinvested? year?

Louis Borgmann

I expect Renewables Montana to in stay it No, this would year.

Gregg Brody

gives what Can And that like in confidence you a you're bit statement? made then help what you're that talk sound you're it hear just on the when you made understand DOE, about soon. that? you'll you something thinking optimistic us you hearing little Just

Bruce Fleming

I'll it's Gregg, that take one. Bruce.

PowerPoint DOE and a the launching some case It's idea, off around sides. no on will per a for running the to platform expect the foreseeable looking multiple compelling. week. priority go, are times both go a We're got not we real the future. have is financing. where We And are This and in actively engaged of we've economics with expansion we're a

Operator

The next question Cowen. comes from Jason Gabelman TD with

Jason Gabelman

I should to or SAF it government want support relates the project. political ask I your say, as about to

given there's then IRA SAF get how excluding comfortable two, the you Do there are the economics, get with prior producer wave? risk the to an credit from the if be And you is then? could tax it some a support don't for Given Republican year, one, by the potential it's you if it how you election? DOE the to risk from that election that loan see important

Bruce Fleming

are pressure in global premiums legislated in And is in there It's a the federal. able only start. as were to on I'll commercial into far being not participate that we credit. a second an SAF Illinois mandated. LCFS markets, has pull Jason, of $X.XX of lot gallon election to which the result. $X your passed to difficult The current tax are part that range. are Remember matters. gallon per of Europe speculate Remember Volumes as State question, physical commerce. the

the as tapestry much, going to it's support the risk in and we're of leave a SAF, we globally going And a broader if that large it premium, there's So just to diesel. is existing the much reverse because administration a federal I law. for perceive true. than no future think premium not don't SAF, No that's

Jason Gabelman

know that process, delays it just DOE been up government run it's if XXXX. of Labor on to as don't you expected early I has started kind the typical Day you But then there loan DOE the it get loan, longer talking or something if than into. when I expected. been something think And Okay. as there's about that's holding you just a specific first this

Bruce Fleming

again. Bruce, Yes,

came We have Your legislation it a sides, number did That real didn't We change years became But after DOE prospect conversation began improvement that the the through. step on actually earlier. of that memory in ago. we correct. publicly a changed things. as a talk X talking both about IRA to is

require much but in in to And it support. so better some it assuming legislative when like change it did going a And re-architecture comes based actually we're situation. out, success, you're upon the

Jason Gabelman

mentioned discuss pull you Do over to production market? the program become is a programs, on federal -- just you renewable Canada, one, than it's the just kind an transparent diesel U.S. Can that their clean up. the fuel Okay. your less Can years important And of standard sales. the major a that market given up. bit you expect the for as final diesel discuss of ramps renewable then U.S. which you LCFS ramp couple outlook on for to starting programs next

Bruce Fleming

LCFS own Columbia. structure Coast some carb is is on And be to as the then U.S. position off [ you to and British volume their make side, there it, running overlay to continue. take ] very, proliferation just you by more national more There platform model And are federal tighter tightening forecast now. to program, are a an a Yes. level in reasonable. mandates, (sic) They've or rules analogy calls that the style. a the not will of that the West direct We're the model California ].So give the [ [ industry loose averages, federal. same a shipper. color, supplied very It's imported that analogy, the U.S. more LCSF great and LCFS project a the than if is leader requirements, and that's Canadian program different if volume. of one got are than you've ] the parallels got the the provincial a similar in which And the of BC little of and And

Now different I model side. Canada a the Columbia They on product thought. particularly give to and differences in you The not are treat differently, want calculations does. carbon only intensity British

our trip we requesting And so to that back one product assign there's got a them plant placed real incentive made to take canola Canadian product.We've and specifically our round Canadian from it of through off-takers canola.

tallow, about surface. that to there's underlying forecast there's to properly local the global their and in will case The different not drive regional the political ag So -- on structure. industry local reason continues find a optimistic political tune sector, lot to transition sector remain going no their a players is energy of way rent the under the that

Operator

conference session. to for question-and-answer back Brad our I would closing concludes over This turn remarks. the to like McMurray any

Brad McMurray

here on behalf this On call. all in here interest appreciate the Betsy. and the today's everybody. us and you Thank team of a time at of Calumet, morning. for weekend, room Thanks, earnings Have joining really your we management us great

Operator

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

disconnect. now may You

Calumet Specialty Products Partners (CLMT) 23 Feb 242023 Q4 Earnings call transcript