Good day, and welcome to the Calumet Specialty Products Third Quarter 2023 Results Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Brad McMurray, Head of Investor Relations. Please go ahead.

Thank you, and good morning. Thank you all for joining us today for our third quarter 2023 earnings call. With me on today's call are Todd Borgmann, CEO; Vincent Donargo, CFO; Bruce Fleming, EVP, Montana Renewables and Corporate Development; and Scott Obermeier, EVP, Specialties. I would also like to introduce David Lunin, who recently joined the company as our Incoming CFO, which will be effective January 1, upon Vince's retirement from Calumet. 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. Also, a webcast replay of this call will be available on our site within a few hours. Turning to the presentation on Slide 2, you'll find our cautionary statements. I'd like to remind everyone that during this call, we may provide various forward-looking statements. Please refer to the partnership's press release that was issued this morning as well as our latest filings with the SEC for a list of factors that may affect our actual results and cause them to differ from our expectations. I'll now pass the call to Todd. Todd?

Thanks, Brad, and welcome to Calumet's third quarter 2023 earnings call. I’m sure many of you saw that Calumet issued two press releases this morning. One was our traditional earnings release, and the other was an announcement that after a thorough and productive negotiation, our general partner and conflicts committee reached an agreement that Calumet will be transitioning to a C-Corp. I'm going to start with the quarterly report, and we'll transition to the conversion shortly thereafter. To do that, let's turn to Slide 3. During the quarter, Calumet generated $75.5 million of adjusted EBITDA, and what was in many ways a tale of two halves. The period started strong in July and represented what we expect out of Montana Renewables now that all units within the operation had proven themselves. However, the second half of the quarter was driven by two specific transient operational issues at our largest plants in Shreveport and Great Falls. Our Shreveport plant is fully repaired, and the Great Falls drum replacement is on track to be completed in the next week. Let me begin with more detail on the progress at Montana Renewables. First in July, we demonstrated a financially representative result consistent with guidance. That was an important milestone as it marked the first full month that a majority of Montana Renewables feed was untreated. Specifically, 70% of our July throughput was local discounted untreated feedstock, and MRL generated $14.2 million of adjusted EBITDA in the month. As mentioned, these results fell within our previous guidance of $1.25 to $1.45 per gallon on untreated feed and demonstrate the location and feedstock advantage that underpins Montana Renewables' lasting competitive positioning. Second, and unfortunately, as our August press release highlighted, we also found a crack in a steam drum that is a component of our renewable hydrogen plant. Our team developed a plan to quickly repair the drum on site. However, after removing 469 tubes and getting a closer look, we made a decision to replace the steam drum. This replacement is now installed and will be mechanically complete in the next few days. We've included in the appendix a few pictures of the steam drum repair that might help put the event in perspective. Third, we demonstrated the site's operational redundancy as we ran at reduced rates while the steam system was under repair. Given we were at reduced rates, we also took the opportunity to pull forward the catalyst change that was otherwise scheduled for April of next year. We're taking that catalyst change now. It's worth noting that our next generation catalyst has performed well, and nearly every change is simply an economic optimization. We'd rather take a few extra days to complete the turnaround when we're already cut back than take a full multi-week shutdown this spring. This also sets us up to enter a strategically important first half of 2024 with a clean slate, with no planned turnarounds. Turning to Shreveport, we also announced a few weeks ago that we had an operational issue that cost us roughly 300,000 barrels of specialty production during the quarter. The volume was limited primarily because of a plugged heater tube in our CDW unit. The plugging has been repaired and our Shreveport plant has been operating well for about a month now. Because of the operational circumstances, the third quarter certainly resulted in a lower capture of market opportunity. With the Shreveport portfolio, Montana completing its steam drum next week, and its catalyst change by the end of this month, I have full faith that we'll learn from this and reclaim the trajectory that we've come to expect. While the quarter was a setback, our strategy is robust and remains unchanged. I'll take a few minutes to remind listeners of the strategic path we're on as we're deep into the plan. Our strategic transformation began three years ago in the depths of COVID. At that time, we determined that three things would be required to put our company onto a different financial trajectory, transform the business, and ultimately unlock value for our shareholders. First, we needed to transform our core specialty business. Second, we needed to fund, construct, and operate Montana Renewables. And third, we would consider the structure of Calumet when the other two are behind us. In specialties, we made exceptional progress. As highlighted by last year's record results, continual demonstration of commercial excellence despite a couple of operational setbacks in Shreveport, marked improvement in the operations of this business. At Montana Renewables, in three years, we've turned an idea on a piece of paper into a leading business in renewable diesel and sustainable aviation fuel. MRL has been funded and constructed fully, has demonstrated its operational and commercial leadership position, and has shown a glimpse of its economic potential. Over time, our thesis at Montana Renewables being at or near the top of the renewable fuels competitive stack is based on five key pillars, which we believe are largely proven. First is the geographic advantage and flexibility the business has in product marketing. From the beginning, our offering was oversubscribed. And through the first few months of operations, we've demonstrated the ability to partner with leading companies to flexibly find the best markets. Most recently, we've seen this with over 60% of our products finding their way to Canada, which is fitting with our location less than two hours south of the Canadian border by truck. As we see reports of backups in the Panama Canal extending supply chains in all industries, we are reminded how fortunate we are at Montana Renewables to be situated with direct rail access to critical markets. I think we're seeing a steady margin theory apply to the industry as a whole; volatility can be driven by the length of supply chain. In a declining feedstock price environment, margins in our industry will be higher for those with short supply chains. Over time, the industry's volatility should balance out, and we simply would expect those with shorter supply chains to be more consistent. Second is our feedstock advantage, which is underpinned by our geography and pretreatment capability. Montana Renewables is the nearest demand point for feedstock suppliers who collectively represent more than ten times our capacity, and our ability to competitively procure tallow, distillers corn oil, canola, and even camelina is well known. Our third competitive pillar is our sustainable aviation fuel advantage. Sustainable aviation fuel is arguably the fastest-growing area in energy, and Montana Renewables is the first mover here, it's the largest SAF producer in North America. The great majority of the headlines we see of airlines buying SAF are originated in Great Falls, Montana. As most of you know by now, we believe that SAF represents our next transformational opportunity as we look ahead to our MaxSAF expansion. Through these first three pillars, I characterize Montana Renewables as fully proven. The fourth pillar is our operational capability. We started renewable operations in Great Falls around this time last year. The sequential commissioning of four major process operations over a six-month period was a success, starting with our renewable diesel unit last winter and a catalyst that has proven to be robust. Then the renewable hydrogen plant in the first quarter, and finally, our SAF unit and our pretreater in the second quarter. We learned a lot over the first few months of operations, including some expected early challenges, and we have proven that each of our units and the technology works as expected. The last proof point is routine EBITDA generation, which is ultimately an outcome of the previous four items. We saw a glimpse of this when Montana Renewables generated over $14 million of adjusted EBITDA in July with only 70% untreated feed. But the crack in our steam drum has set us back a few months. We fully expect to resume demonstrating this final proof point in December and into 2024. Turning to potential monetization. We expect some duration of audited financials at steady-state operating levels as an enabler to receive a proper valuation for this business. We've said before that our goal is not to over-optimize and play for the last dollar, but the difference between marketing a 100% proven business and a 90% proven business is enough to warrant pushing the expected timeline for potential monetization back a quarter, and mid-year feels like a reasonable timeline for a potential next step. In parallel with taking this last step to complete the ultimate deleveraging of Calumet, we continue to be optimistic about the DOE process. We're in the final stage of the process, and while we can't say with certainty that we will be successful or on what timeline, our optimism continues to increase as time progresses that Montana Renewables, with its unique renewable hydrogen system and first mover advantage in SAF, is right down the fairway for the type of project the Department of Energy is looking for. Lastly, we continue to progress engineering around our MaxSAF project. We've narrowed the field to a short finalist list of technology providers and general contractors, and we expect to be in a position to fully launch this project as soon as we hear from the DOE that we're cleared for financing. All signs continue to point towards this project being one that can more than double the steady state EBITDA potential of Montana Renewables. We've discussed especially the transformation at Montana Renewables. I mentioned earlier that the third leg to deliver the shareholder value that we ultimately expect was to evaluate the structure of Calumet. This topic has received a lot of attention over the past few years, and we believe that it was critical to address the fundamental business first. We were reminded of the unintended consequences of being a very thinly traded MLP recently when a block sale of only 1.5% of our units had an outsized impact on our shareholders. We don't believe that was a reflection on the fundamentals of the business. It was rather the reality that without a broad institutional investor base, most of whom can't invest in MLPs, we have wild swings in our equity price. Well, this event served as a reminder, our General Partner and Conflicts Committee were willing to negotiate on the ultimate conversion of Calumet's MLP into a C-Corp when it occurred. The Calumet General Partner, comprised of our founders and their families, has been an ardent supporter of Calumet since the beginning. If we back up a few years, when China was fighting for its survival, the General Partner didn't waver. With this transaction, the General Partner will absorb a meaningful tax bill. And as Amy mentioned in this morning's press release, they're willing to lean in as they're believers in Calumet's growth vision and see the significant value available to all unitholders. There's no group more committed or financially aligned with the Calumet value unlock than our General Partner. And on behalf of the management and our unitholders, I thank the Heritage Group, the family, and our Conflicts Committee for negotiating a transaction that is exceptional for all parties. I truly believe this is a foundational launching pad for the future of our company. Let's flip to Slide 4 for more details on the transaction. We're going to go over some details here. And we likely won't be getting into any more details during Q&A as this approval is hot off the press. First, the corporate conversion will close within the next nine months. We'll begin to prepare the necessary documents for the filing process. From there, we'll file a Form S-4, hold the unitholder vote, and prepare for the ultimate closing. Upon closing, the General Partner will exchange its existing IDRs and 2% General Partner interest, which is approximately 1.6 million units, for 5.5 million shares of common stock and 2 million warrants. These warrants will have a strike price of $20 a share and will expire 3 years from the date of issuance. This represents a dilution of 4.5% to our current shareholders, which is illustrated in the appendix on Slide 14. This slide also highlights a few governance features, including a staggered Board which will be made up of a majority of independent members. It's worth highlighting that upon conversion, there will be a single class of voting shares with economic interests fully aligned. As a management team, we look forward to getting out quickly to explain Calumet's growth strategy and immense value proposition to a new group of institutional investors that have not been able to invest in the company until now. With that, I'm going to turn the call over to Vince to review the quarter. Vince?

Thanks, Todd. Before I comment on our business segment, I would like to turn your attention to the RINs slides in the appendix. Our net income included a noncash gain of $173 million related to our RINs mark-to-market adjustment. We do not view these mark-to-market gains or losses as meaningful regarding our business performance, and our strategy regarding RINs remains unchanged. So let's turn back to Slide 6. Our SPS business generated $38.7 million of adjusted EBITDA during the quarter. As Todd mentioned, we had a temporary operational issue at Shreveport that resulted in a loss of roughly 3,000 barrels of specialty product production. We purchased some third-party material where we could to ensure our long-term customers were served while the operations team at the facility brought the affected units back to normal production levels, which has occurred. The other notable item that impacted the quarter was a $19 per barrel increase in crude prices. Our commercial team implemented price increases that largely took effect on October 1. So we are seeing the benefit of those price increases this quarter as crude has stabilized. We continue to be constructive on the margin environment going forward, although we'd expect normal seasonality late in the year. On the fuel side, both volumes and margins improved quarter-over-quarter. While the winter is typically weak or seasonally, especially for gasoline, we continue to see strong distillate margins. Not only do we produce more diesel and gasoline, but our specialty business tends to benefit from higher diesel prices as it serves as an alternative for solvents and light lubes. With product inventories at or below their historical averages, the fundamentals continue to point to healthy margins in the near to medium term. Moving to Slide 8, our Performance Brands business had another solid quarter, generating $13.2 million of adjusted EBITDA. This was up $1 million from the previous quarter. We typically see some seasonality in this business as big-box retailers manage year-end inventory levels. Our Performance Brands team is focused on continuing to manage our costs, deliver high-quality products to our customers, and optimize our product mix to find the highest net-back channels across our branded products. We are excited about the opportunities ahead to continue to improve this business as we have during the year. Industrial demand that we've mentioned before continues to be strong, especially in mining and marine applications, and we think these end users will continue to be tailwinds for this business. Moving to our Montana business, you can see on Slide 10 that we generated $38.2 million of adjusted EBITDA in the quarter. Operations at our legacy asphalt plant were excellent, and we have seen heavy Canadian crude differentials widen near the end of the quarter and into the fourth quarter. We operated the plant at nearly 12,000 barrels per day of production, which has been fairly consistent after the large turnaround last year that separated our renewables business from our legacy specialty asphalt business. At Montana Renewables, Todd spent a lot of time on the previously disclosed steam system issue, and I will briefly touch on that again. We have four hydrogen plants at the Great Falls site that supply hydrogen to both the legacy plant and the renewable diesel plant. Three of those were pre-existing, and we constructed the fourth as part of the MRL construction and conversion. This redundancy has been important, as we've been able to run at reduced rates while the fourth plant has been down. With the steam drum replacement now mechanically complete, we expect to begin bringing that hydrogen plant back into service in about one week from now. We're also on track to complete the turnaround that was pulled forward, and we're excited to pick up where we left off in July and fully demonstrate the uniqueness of Montana Renewables as we expect to run at full 12,000 barrels per day through December and going forward, with most of that being untreated feed. We'll start with the untreated feed that was on the books for the past couple of months, and we expect to be back in the market in the New Year adding new regionally available supply.

Thanks, Vince. Earlier this quarter, we announced that after a thorough search, Vince and I found a successor CFO. And I'll introduce David momentarily. But before that, I want to thank Vince for everything that he's done over the past few years at Calumet. By the time of our next call, David will be in the seat. Vince joined Calumet in August of 2020 when our stock was around $2.50. We had a material weakness in our financial reporting, and we were only shortly removed from a troubling SAP implementation. Vince's courage, tenacity, and leadership were paramount in fixing all of the above. He also led us through a re-segmentation that brought transparency to Calumet by aligning the way we report the business with the way we run it. Vince and I co-developed the succession plan, and Vince is going to be with us through April as David takes the reins. David Lunin, who joined in September, has been working closely with Vince since day one. He brings 20 years of experience advising companies on corporate financial matters, including M&A and capital market transactions in relevant industries. David was most recently with Goldman Sachs, and he has hit the ground running as he leads the exploration of potential MRL monetization and prepares to step in fully as CFO on January 1. Vince, congratulations and thank you. And David, welcome to Calumet. With today's news and game-changing opportunities ahead of us, it's an incredibly exciting time to be joining this company. With that, I'll hand the call back to the operator for questions.

Thank you. The first question today comes from Roger Read with Wells Fargo. Please go ahead.

Yes, thank you. Good morning. Congratulations on the announcement of the conversion to the C-Corp. I think that will be something that's been looked for, hoped for, and will be warmly received. On the operational side, the specialty margins you discussed in the presentation. And if you look at the chart, are we essentially seeing specialty margins normalize here? Is that the right way to think about it, plus or minus $60? Or should we read into further strength based on the crude price moves in the comment about October price increases?

Hey, Roger, this is Scott. I would answer it in two parts. I think, overall, we've seen some tapering and normalization of specialty margins that have come off all-time records over the past year. So there is some tapering down of specialty margins. I think what occurred though in Q3 was a little bit magnified by some margin compression as crude spiked up, and a lot of our operational issues created some additional headwind. So as we think about this quarter here in Q4, we've got a lot of our increases through depending on how crude shakes out, but we should see some improvement in the fourth quarter to more normalized margins above Q3 results.

Okay. Thanks for that. And then on the MRL, kind of what happened in the third quarter, the drum issue and all, I was wondering if we could get a little more clarity on the period at which you did achieve $1.25 to $1.45 margin. What did you see in there? How well did the unit run? And is there upside from there if you're running really well, finding the right markets, as you mentioned? Just trying to help understand the real performance of the business when it isn't dealing with startup issues?

Hey, Roger, it's Bruce. I think the July performance was representative in terms of most of the things we look for, and we ran well. We didn't run all the way full in July. So actually, as we get sped up again, you're going to see that margin improve because we're going to spread the fixed costs on a unit basis, and you'll see the margin improve. In terms of the implied optimization, the way we've set up our product supply agreements, we've got a distribution optimization that the customers benefit from. In return, we've got a very fully priced product. So that's kind of a synergistic partnership with them.

Okay, appreciate it. I'll turn it back. Thanks.

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

Yes, good morning, and congratulations, David. Welcome. And congrats on the good news about the conversion. I think liquidity has long been a focus area for investors around the stock. The first question is just building on the lost opportunity profit in the quarter. As you think about the downtime and if you were to build back some of these issues, give a sense of how much EBITDA would have been higher in the absence of those issues?

Yes, we said about a little more than $50 million is what we think we lost in the third quarter, Neil. This is Todd, by the way. Thanks for the question. The two events, 300,000 barrels in specialty, if you look at our routine margins in specialty, that's probably a little over $20 million of lost opportunity. And then the same thing for MRL, right? Two months of cutback. So if we look at July and say that we should have had July going forward at a minimum, that's where we get the other 30-plus. In total, $50 million of lost opportunity for the quarter, which is disappointing, but also reminds us of the potential that we have ahead of us.

Thank you. I know it's tricky to talk about the transaction, so I will pass on this one, but I was just curious about tax implications to the extent you are at Calumet transitioning to C-Corp. It sounds like the way it's designed there won't be a meaningful tax impact, but can you confirm that? And then as we think about you as a cash taxpayer, I would imagine the NOL will carry with this transaction, and therefore, I would imagine you'd be paying cash taxes for a while. Any thoughts on the tax side would be great.

No, I'll comment on it a little bit. I'll be careful, like normal, on the topic. I think you hit on a couple of the big ones. So, on the call, I mentioned that the General Partner makes a meaningful cash tax payment. That depreciable basis step-up actually gets shared across all shareholders. There's some tax arbitrage as things like passive loss carryforwards, like you mentioned, will flow into investor basis conversion and tax at capital gains rates rather than ordinary income. The other tax impact that it's hard to quantify, but could be meaningful is the increase in price between now and conversion, as new investors enter, will also result in a step-up in depreciable tax basis that will be helpful to all investors. So I'll probably stop there. But I think you're right, as a whole to say, for most, this should not be a negative tax event; in fact, it should be very positive for the majority of our unitholders.

Okay, that's great. Thanks, guys.

You bet. Thank you.

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

Good afternoon, good morning guys. Help us understand a little bit about the restart process here. Looks like you're firmly on course to get the operations fixed at Montana. Should we assume that in Q1 '24 you run all out and that kind of gives us that $1.30 or $1.40 EBITDA per gallon margin? Should we be watching that as the quarter where everything comes together for you in terms of RD?

Hey, Manav. It's Bruce. We're going to plan to be running full from, let's just say, December 1, so that you get a solid month, another proof point, and then we'll stay full going forward. What we've got to do though is the steam system repair work was an unplanned slowdown. So we've got a certain quantity of clean feeds still backed up in inventory that we're going to have to pull through to get to the $1.25 to $1.45 guidance, as the guidance is for dirty feed. And we've got a blend situation for a little while. If you look at July, we had about 70% dirty, 30% clean. The actual performance, if I recall correctly, was $1.23 on a blended basis. So right at the kind of low end of the range. What you should look for, as you know, is the spread between perhaps RBD, veg oil and crude veg oil in the market as a proxy for what happens when we blend.

Perfect. A quick follow-up, do you already have a SAF transition strategy in place and expansion? I understand you're waiting for the full confirmation of the DOE loan, but help us walk through this SAF transition strategy. When it's all over, how much SAF could you be looking to produce in your system? Thank you.

We're advertising, and we have been for a couple of years, 230 million gallons a year of SAF at the moment based upon the engineering progress. That's looking conservative. There's a high case at 300 million gallons that we think is probably reasonably achievable. This is something that we'll be reporting back to you on as we go forward.

Thanks, guys.

Thanks, Manav.

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

Good morning. Thank you. The questions have been asked. Just on the timeline for the monetization with respect to this on a to C-Corp, how does that work? You're saying 2Q '24 for the monetization within 9 months to complete the C-Corp transition. So do these have a bearing on each other in terms of how we can move forward in the monetization?

Hey, Amit, it's Todd. It's a good question. I think a lot of that's driven by what type of market we're seeing at that point in time, right? The nine months on conversions is an outside date; that can be faster than that. If you think about what needs to get done, starting now, we will begin doing the documentation, getting ready, signing the official documents that transition us into filing the proxy, the S4 and receiving a shareholder vote. So it could be faster than nine months. Nine months is the outside date. I think the Committee and the GP agreed to have a firm date so there was certainty that a conversion would happen by a certain point in time, but it certainly can be pulled up. So I think we'll get a better view of that process once we're in it, and that timing. Obviously, Q1 is going to tell us a lot about Montana Renewables too, and we're pretty confident and excited about that quarter. Then we're going to assess how the market looks. I think it will be a combination of those three things that really drives ultimate timing.

Understood, Todd. Thank you for that. Are there any unknowns in this transition process that could delay the process or cause any sort of challenges?

I don't think so. I'd say that we will have to see, just because we haven't done it before. But we've got a lot of advisors and legal counsel that have, and I think there's a pretty clear path for these types of things. So as I look at the plan, it appears pretty straightforward. There's a lot to do, certainly, but I don't see a specific event or turning point or anything like that that would leave us questioning the ultimate outcome.

I appreciate that. That's all I have, guys. I'll take my other questions offline. Thank you.

Thank you.

The next question comes from Jason Gabelman with TD Cowen. Please go ahead.

Yes. Hey, good morning. Thanks for taking my questions. I wanted to first ask about the MaxSAF expansion project. I think previously you had discussed that the growth CapEx was not tied to the DOE loan. It sounds now like they are kind of tied. If that's changed, could you discuss why that's changed? Additionally, as you've been going out to customers to contract the SAF available in the expansion case, are you confident or do you have enough confidence to provide some sort of earnings outlook on that project? Thanks.

Let me start out. Jason, it's Todd. Then Bruce can add on. On the DOE question, what we've said consistently is we don't want to take on additional debt for the MaxSAF. That continues to be the case. When I made a comment in the earnings call around, we'll be ready to go when DOE approves financing, what we're doing there is we're assuming that that's going to be the next opportunity for financing. There are certainly other opportunities for financing. I think you're probably referencing in the past where we've said, hey, as part of a monetization, proceeds could be used for MaxSAF expansion, those types of things. So all we're doing here is simply suggesting that DOE, we would predict DOE to be sooner on the timeline, although obviously, we can't guarantee that; we don't know that, but sit on a timeline and the ultimate monetization. I think the bigger point is we don't want to take on additional debt to do MaxSAF. We made that commitment when we went and did the last financing, and we plan to hold on to that.

The second part of your question revolved around product placement. I'll give you three thoughts. First, we read this sort of steady stream of announcements of people signing up for billions and billions of gallons of SAF, which may or may not ever be available in the market. That's a backdrop. The situation for us is, we're the largest of the only two producers on this side of the world. And we could sell all the SAF to 12 different people tomorrow at the drop of a hat. So you're in the very early stages of what's going to be practically a vertical evolution for this new industry. The third thought is, we're the low-cost provider. No matter what happens, we're going to stand at the top of the competitive rankings on this. We had the lucky accident of having the hardware to recover the SAF at a relatively low capital cost; everybody else will have to build that. So we are there already. We're not first; World Energy was first; we're second. We have a competitive advantage we are planning to stay ahead of.

Got it. And maybe two quick clarifications on those comments. First, timing around the DOE loan. I know it continues to shift down, and it’s always tough to guess when the government's going to move forward on something. And then on the SAF economics, where you're seeing those price premiums come in relative to renewable diesel. And I'll leave it there. Thanks.

The industry watchers seem to be centering on about $1 to $1.50 gallon premium to renewable diesel, and that's substantially a European circumstance right now. But I think we could broadly suggest that it's going to be somewhere in North America. Anyone with a renewable diesel platform should be able to fish out about 15% or 20% of it as SAF. So we think that, that will help price those two things together, they're going to have to tie together through the nest of regulatory support mechanisms, including the new SAF blenders tax credit. We think that's an appropriate spread, which is going to reflect an industry average player. I'm going to emphasize that we're doing better than that. The way the trade flows set up is also probably going to contribute because there are feedstock yield differences, there are catalyst yield differences, and there's operational severity. So if you think about refinery complexity and LP multivariable decision making, you'll be thinking the right way about SAF made from hydro processing, like us. I'll contrast that with something that's very, very linear. If your model is you buy ethanol, you convert almost all of it into SAF, you don't have all that optimization flexibility. So our dependence on any premium in the market is different from a new entrant that lacks flexibility. That's up to the deal. We are very pleased with the relationship that we've established over the last year and a half. It is actively engaged. We are in underwriting. But I'm not going to forecast their eventual decision or their timing.

All right, great. Thanks for the color.

Thanks, Jason.

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

Thanks. On behalf of the management team here in the room, and really on behalf of all of Calumet, we'd like to thank you for your time and your interest this morning. Have a great end of the week, and this concludes the call. Thanks.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.