CLMT 10-Q
Calumet, Inc. /DE (CLMT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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CALUMET, INC.
QUARTERLY REPORT
For the Three Months Ended March 31, 2026
Table of Contents
2
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) includes certain “forward-looking statements.” These statements can be identified by the use of forward-looking terminology including “will,” “may,” “intend,” “believe,” “expect,” “outlook,” “anticipate,” “estimate,” “continue,” “plan,” “should,” “could,” “would,” or other similar words. The statements regarding (i) demand for finished products in markets we serve; (ii) estimated capital expenditures as a result of required audits or required operational changes or other environmental and regulatory liabilities; (iii) our anticipated levels of, use and effectiveness of derivatives to mitigate our exposure to crude oil price changes, natural gas price changes and fuel products price changes; (iv) estimated costs of complying with the U.S. Environmental Protection Agency’s (“EPA”) Renewable Fuel Standard (“RFS”), including the prices paid for Renewable Identification Numbers (“RINs”) and the amount of RINs we may be required to purchase in any given compliance year, and the outcome of any litigation concerning our existing small refinery exemption (“SRE”) petitions; (v) our ability to monetize federal clean fuel production tax credits (“CFPCs” under Section 45Z of the Internal Revenue Code and the price we expect to receive for CFPCs; (vi) our ability to meet our financial commitments, debt service obligations, debt instrument covenants, contingencies and anticipated capital expenditures; (vii) our access to capital to fund capital expenditures and our working capital needs and our ability to obtain debt or equity financing on satisfactory terms; (viii) our access to inventory financing under our supply and offtake agreements; (ix) the effect, impact, potential duration or other implications of supply chain disruptions and global energy shortages on our business and operations; (x) general economic and political conditions, including inflationary pressures, changes in global trade policy and tariffs, instability in financial institutions, the shutdown of the U.S. federal government, general economic slowdown or a recession, political tensions, conflicts and war (such as the ongoing conflicts in Ukraine, Venezuela and the Middle East and their regional and global ramifications); (xi) the future effectiveness of our information technology planning systems to further enhance operating efficiencies and provide more effective management of our business operations; (xii) our expectation regarding our business outlook with respect to the Montana Renewables business; (xiii) ability to maintain an effective system of internal controls; (xiv) the expected benefits of the Conversion (as defined herein) to us and our stockholders; (xv) our expectation that the DOE Loan (as defined herein) will enable MRL (as defined herein) to complete the MaxSAF® construction on time and on budget; and (xvi) our ability to maintain or improve our carbon intensity at our MRL facility, as well as other matters discussed in this Quarterly Report that are not purely historical data, are forward-looking statements. These forward-looking statements are based on our expectations and beliefs as of the date hereof concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our current expectations for future sales and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisition or disposition transactions. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Known material factors that could cause our actual results to differ from those in the forward-looking statements include those described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (“2025 Annual Report”). Certain public statements made by us and our representatives on the date hereof may also contain forward-looking statements, which are qualified in their entirety by the cautionary statements contained in this paragraph. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
References in this Quarterly Report to “Calumet,” the “Company,” “we,” “our,” “us” or like terms refer to (i) Calumet Specialty Products Partners, L.P. (the “Partnership”) and its subsidiaries before the completion of the conversion transaction on July 10, 2024 (the “Conversion”) and (ii) Calumet, Inc. and its subsidiaries as of the completion of the Conversion and thereafter. References in this Quarterly Report to “our general partner” refer to Calumet GP, LLC, the general partner of the Partnership.
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PART I
Item 1. Financial Statements
CALUMET, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, 2026 | December 31, 2025 | ||||
(In millions, except share data) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | | $ | | ||
Restricted cash |
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Accounts receivable, less allowance for credit losses of $ |
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Inventories |
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Derivative assets | — | | ||||
Prepaid expenses and other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Other noncurrent assets, net |
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Total assets | $ | | $ | | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: |
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Accounts payable | $ | | $ | | ||
Accrued interest payable |
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Accrued salaries, wages and benefits |
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Current portion of RINs obligation |
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Derivative liabilities |
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| — | ||
Other current liabilities |
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Current portion of long-term debt |
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Total current liabilities |
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Other long-term liabilities |
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Long-term debt, less current portion |
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Total liabilities | $ | | $ | | ||
Commitments and contingencies |
| |
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Redeemable noncontrolling interest and other equity instruments | $ | | $ | | ||
Stockholders' equity: |
| |
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Common stock: par value $ | $ | | $ | | ||
Additional paid-in capital | | | ||||
Warrants: | | | ||||
Accumulated deficit |
| ( |
| ( | ||
Accumulated other comprehensive loss |
| ( |
| ( | ||
Total stockholders' equity |
| ( |
| ( | ||
Total liabilities and stockholders' equity | $ | | $ | | ||
See accompanying notes to unaudited condensed consolidated financial statements.
4
CALUMET, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended March 31, | | |||||
| 2026 | | 2025 | | |||
| (In millions, except share and per share data) | | |||||
Sales | $ | | $ | | |||
Cost of sales | |
| | ||||
Gross profit (loss) | ( |
| ( | ||||
Operating costs and expenses: | |||||||
Selling | |
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General and administrative | |
| | ||||
Gain on sale of business | — |
| ( | ||||
Other operating expense | |
| | ||||
Operating loss | ( |
| ( | ||||
Other income (expense): | |
| | ||||
Interest expense | ( |
| ( | ||||
Debt extinguishment costs | ( |
| ( | ||||
Loss on derivative instruments | ( |
| ( | ||||
Other income | |
| | ||||
Total other expense | ( |
| ( | ||||
Net loss before income taxes | ( |
| ( | ||||
Income tax (benefit) expense | ( |
| | ||||
Net loss | $ | ( | $ | ( | |||
Earnings per share: |
| | |||||
Basic and diluted | $ | ( | $ | ( | |||
Weighted average number of common shares outstanding: |
| |
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Basic and diluted |
| |
| | |||
See accompanying notes to unaudited condensed consolidated financial statements.
5
CALUMET, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Three Months Ended March 31, | |||||||
| 2026 | | 2025 | | |||
Net loss | $ | ( | $ | ( | |||
Other comprehensive income: | |||||||
Defined benefit pension and retiree health benefit plans |
| — |
| — |
| ||
Total other comprehensive income |
| — |
| — |
| ||
Comprehensive loss attributable to stockholders' equity | $ | ( | $ | ( | |||
See accompanying notes to unaudited condensed consolidated financial statements.
6
CALUMET, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Accumulated | ||||||||||||||||||||
Common Stock | Other | |||||||||||||||||||
Shares Issued | Additional | Accumulated | Comprehensive | |||||||||||||||||
Par Value | Paid-in Capital | Warrants | Deficit | Loss | Total | |||||||||||||||
(In millions) | ||||||||||||||||||||
Balance at December 31, 2025 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | |||||||
Net loss | — |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||||
Settlement of tax withholdings on equity-based incentive compensation | — |
| — |
| ( |
| — |
| — |
| — |
| ( | |||||||
Settlement of restricted stock units | |
| — |
| |
| — |
| — |
| — |
| | |||||||
Balance at March 31, 2026 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | |||||||
| Accumulated | |||||||||||||||||||
Common Stock | Other | |||||||||||||||||||
| Common | Shares Issued | Additional | Accumulated | Comprehensive | |||||||||||||||
Shares | | Par Value | | Paid-in Capital | | Warrants | | Deficit | | Loss | | Total | ||||||||
(In millions) | ||||||||||||||||||||
Balance at December 31, 2024 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | |||||||
Net loss | — | — | — | — |
| ( |
| — |
| ( | ||||||||||
Settlement of tax withholdings on equity-based incentive compensation | — | — | ( | — |
| — |
| — |
| ( | ||||||||||
Settlement of restricted stock units | | — | | — |
| — |
| — |
| | ||||||||||
Balance at March 31, 2025 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | |||||||
See accompanying notes to unaudited condensed consolidated financial statements.
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CALUMET, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, | |||||||
| 2026 | | 2025 | | |||
(In millions) | |||||||
Operating activities | |||||||
Net loss | $ | ( | $ | ( | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization |
| |
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Amortization of turnaround costs |
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Non-cash interest expense |
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Debt extinguishment costs |
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RINs expense |
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Unrealized (gain) loss on derivative instruments |
| |
| ( | |||
Gain on sale of business | — | ( | |||||
Equity based compensation |
| |
| ( | |||
Lower of cost or market inventory adjustment | ( | ( | |||||
Other adjustments to reconcile net loss to cash flow from operating activities |
| |
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Changes in assets and liabilities |
|
| |||||
Accounts receivable |
| ( |
| ( | |||
Inventories |
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Prepaid expenses and other current assets |
| |
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Turnaround costs |
| ( |
| ( | |||
Other assets |
| ( |
| | |||
Accounts payable |
| |
| ( | |||
Accrued interest payable |
| ( |
| ( | |||
Accrued salaries, wages and benefits |
| ( |
| ( | |||
Other taxes payable |
| ( |
| | |||
Other liabilities |
| |
| | |||
Net cash used in operating activities |
| ( |
| ( | |||
Investing activities |
| |
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Additions to property, plant and equipment |
| ( |
| ( | |||
Proceeds from sale of business, net | — | | |||||
Other |
| ( |
| — | |||
Net cash provided by (used in) investing activities |
| ( |
| | |||
Financing activities |
| |
| | |||
Proceeds from borrowings — revolving credit facility |
| |
| | |||
Repayments of borrowings — revolving credit facility |
| ( |
| ( | |||
Proceeds from borrowings — MRL revolving credit agreement | — | | |||||
Repayments of borrowings — MRL revolving credit agreement | — | ( | |||||
Proceeds from borrowings — senior notes |
| |
| | |||
Repayments of borrowings — senior notes |
| ( |
| — | |||
Proceeds from inventory financing |
| |
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Payments on inventory financing |
| ( |
| ( | |||
Proceeds from DOE Loan |
| — |
| | |||
Proceeds from asset financing arrangements | — | | |||||
Payments on asset financing arrangements |
| ( |
| ( | |||
Repayments of borrowings - MRL Asset Financing Arrangements |
| — |
| ( | |||
Repayments of borrowings - MRL Term Loan Credit Agreement |
| — |
| ( | |||
Debt issuance costs, debt discounts and premiums | ( | ( | |||||
Payments on other financing obligations |
| ( |
| ( | |||
Net cash provided by financing activities |
| |
| | |||
Net increase (decrease) in cash, cash equivalents and restricted cash |
| ( |
| | |||
Cash, cash equivalents and restricted cash at beginning of period |
| |
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Cash, cash equivalents and restricted cash at end of period | $ | | $ | | |||
Supplemental disclosure of cash flow information |
| |
| | |||
Interest paid, net of capitalized interest | $ | | $ | | |||
Capital expenditures included in accounts payable | $ | | $ | | |||
See accompanying notes to unaudited condensed consolidated financial statements.
8
CALUMET, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Description of the Business
Calumet, Inc. (the “Company” or “Calumet”) is a publicly traded Delaware corporation. The Company manufactures, formulates, and markets a diversified slate of specialty branded products and renewable fuels to customers in various consumer-facing and industrial markets. Calumet is headquartered in Indianapolis, Indiana and operates twelve facilities throughout North America.
2. Summary of Significant Accounting Policies
Reclassifications
Certain amounts in the prior years’ unaudited condensed consolidated financial statements have been reclassified to conform to the current year presentation.
Cash and Cash Equivalents and Restricted Cash
Cash and cash equivalents and restricted cash include all highly liquid investments with a maturity of three months or less at the time of purchase. Cash and cash equivalents are deposited primarily in banking institutions with global operations. We have not experienced any losses in such accounts. We believe we are not exposed to any significant credit risk related to cash and cash equivalents.
Restricted cash as of March 31, 2026 and December 31, 2025 represents cash that is restricted under the Department of Energy Loan Guarantee Agreement (the “DOE Loan”) because it is only available to make certain investments under the terms of the DOE Loan.
Renewable Identification Numbers (“RINs”) Obligation
Under the Renewable Fuel Standard (“RFS”) of the Clean Air Act, certain refineries are required to comply with annual Renewable Volume Obligations (“RVOs”) established by the U.S. Environmental Protection Agency (“EPA”). The EPA sets annual RVOs for the percentage of renewable fuels that must be blended into transportation fuels consumed in the United States. Compliance is satisfied through the blending of renewable fuels, the purchase and retirement of Renewable Identification Numbers (“RINs”), or the receipt of a Small Refinery Exemption (“SRE”). A RIN is a 38-character number assigned to each physical gallon of renewable fuel produced in or imported into the United States.
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The Company accounts for its current-period RVO as an estimated liability measured by multiplying the net RINs obligation, based on actual production volumes, by the period-end market price of RINs. The resulting liability is recorded as a current liability and remeasured at each reporting date, with changes recognized in cost of sales. Gains and losses from the sale of RINs are also recorded in cost of sales. The RVO represents an obligation to retire RINs and cannot be settled in cash with the EPA but may be settled through the purchase of a RIN.
Historically, the Company has received SREs and was not required to purchase RINs. Beginning in 2022, EPA denied the Company’s SRE petitions for multiple compliance years, which resulted in the recognition of significant RINs liabilities. Those denials were subsequently challenged and, in several instances, vacated and remanded by federal courts.
In August 2025, EPA issued new hardship determinations that (i) reaffirmed prior grants of the Company’s 2018 SREs, (ii) issued new decisions for program years 2019 through 2023, and (iii) issued decisions on the Company’s 2024 petitions. Under those decisions, the Company received full or partial relief for its Shreveport and Montana refineries for program years 2019 through 2024, which reduced the number of RINs required to be retired. The EPA has not yet issued a decision on the Company’s 2025 SRE petitions.
The Company has filed petitions for judicial review of certain EPA decisions relating to the 2022 through 2024 program years in which the Company received only a partial exemption. The EPA has confirmed that it does not intend to pursue enforcement actions while SRE petitions or related litigation are pending and that, if required, the Company will be afforded a reasonable period to achieve compliance.
Expenses related to RFS compliance may continue to be significant. Adverse legal or regulatory developments, higher RIN prices, or a reduction or elimination of SRE availability could require the Company to purchase additional RINs, which could materially adversely affect results of operations and liquidity.
As of March 31, 2026 and December 31, 2025, the Company had a RINs Obligation recorded on the unaudited condensed consolidated balance sheets of $
Sale of Assets Related to Industrial Portion of Royal Purple® Business
On February 28, 2025, the Company announced that it entered into a definitive agreement with a wholly owned subsidiary of Lubrication Engineers, Inc., a portfolio company of Aurora Capital Partners, to sell assets related to the industrial portion of its Royal Purple® business, for $
New Accounting Standards
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively to the 2025 annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements Refer to Note 11 — “Income Taxes” for additional information.
In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures.” This ASU seeks to improve the disclosures about a public business entity’s expenses by providing more detailed information about the types of expenses in commonly presented expense captions. This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning
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after December 15, 2027. We are currently evaluating the impact this update will have on our consolidated financial statements and footnotes.
3. Inventories
The cost of inventory is recorded using the method.
Inventories consist of the following (in millions):
March 31, 2026 | | December 31, 2025 | ||||||||||||||||
| | Supply and | | | | Supply and | | |||||||||||
Titled | Offtake | Titled | Offtake | |||||||||||||||
Inventory | Agreements (1) | Total | Inventory | Agreements (1) | Total | |||||||||||||
Raw materials | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Work in process |
| |
| |
| |
| |
| |
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Finished goods |
| |
| |
| |
| |
| |
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$ | | $ | | $ | | $ | | $ | | $ | | |||||||
| (1) |
In addition, the use of the LIFO inventory method may result in increases or decreases to cost of sales in years that inventory volumes decline as the result of charging cost of sales with LIFO inventory costs generated in prior periods. In periods of rapidly declining prices, LIFO inventories may have to be written down to market value due to the higher costs assigned to LIFO layers in prior periods. During the three months ended March 31, 2026 and 2025, the Company recorded a decrease in cost of sales in the unaudited condensed consolidated statements of operations for LCM of $
4. Commitments and Contingencies
From time to time, the Company is a party to certain claims and litigation incidental to its business, including claims made by various taxation and regulatory authorities, such as the Internal Revenue Service, the EPA and the U.S. Occupational Safety and Health Administration (“OSHA”), as well as various state environmental regulatory bodies and state and local departments of revenue, as the result of audits or reviews of the Company’s business. In addition, the Company has property, business interruption, general liability, and various other insurance policies that may result in certain losses or expenditures being reimbursed to the Company.
Environmental
The Company conducts specialty refining, blending, and terminal operations and such activities are subject to stringent federal, regional, state, and local laws and regulations governing worker health and safety, the discharge of materials into the environment, and environmental protection. These laws and regulations impose obligations that are applicable to the
11
Company’s operations, such as requiring the acquisition of permits to conduct regulated activities, restricting the manner in which the Company may release materials into the environment, requiring remedial activities or capital expenditures to mitigate pollution from former or current operations, requiring the application of specific health and safety criteria addressing worker protection, and imposing substantial liabilities for pollution resulting from its operations. Failure to comply with these laws and regulations may result in the assessment of sanctions, including administrative, civil, and criminal penalties; the imposition of investigatory, remedial, or corrective action obligations or the incurrence of capital expenditures; the occurrence of delays in the permitting, development, or expansion of projects and the issuance of injunctive relief limiting or prohibiting Company activities. Moreover, certain of these laws impose joint and several, strict liability for costs required to remediate and restore sites where petroleum hydrocarbons, wastes, or other materials have been released or disposed. In addition, new laws and regulations, new interpretations of existing laws and regulations, increased governmental enforcement, or other developments, some of which legal requirements are discussed below, could significantly increase the Company’s operational or compliance expenditures.
Remediation of subsurface contamination is in process at certain of the Company’s refinery sites and is being overseen by the appropriate state agencies. Based on current investigative and remedial activities, the Company believes that the soil and groundwater contamination at these refineries can be controlled or remediated without having a material adverse effect on the Company’s financial condition. However, such costs are often unpredictable and, therefore, there can be no assurance that the future costs will not become material.
Other Matters, Claims and Legal Proceedings
The Company is subject to matters, claims, and litigation incidental to its business. The Company has recorded accruals with respect to certain matters, claims, and litigation where appropriate, that are reflected in the unaudited condensed consolidated financial statements but are not individually considered material. For other matters, claims, and litigation, the Company has not recorded accruals because it has not yet determined that a loss is probable or because the amount of loss cannot be reasonably estimated. While the ultimate outcome of matters, claims, and litigation currently pending cannot be determined, the Company currently does not expect these outcomes, individually or in the aggregate (including matters for which the Company has recorded accruals), to have a material adverse effect on its financial position, results of operations, or cash flows. The outcome of any matter, claim, or litigation is inherently uncertain, however, and if decided adversely to the Company, or if the Company determines that settlement of particular litigation is appropriate, the Company may be subject to liability that could have a material adverse effect on its financial position, results of operations or cash flows.
5. Inventory Financing Agreements
On January 17, 2024 (the “Effective Date”), the Company and J. Aron & Company LLC (“J Aron”) entered into a Monetization Master Agreement (the “Master Agreement”), a related Financing Agreement (the “Financing Agreement”) and a Supply and Offtake Agreement (together with the Master Agreement and the Financing Agreement, the “Shreveport Supply and Offtake Agreement”). Pursuant to the Shreveport Supply and Offtake Agreement, J. Aron agreed to, among other things, purchase from the Company, or extend to the Company, financial accommodations secured by crude oil and finished products located at the Company’s Shreveport facility on the Effective Date and from time to time, up to maximum volumes specified for crude oil and categories of finished products, subject to the Company’s repurchase obligations with respect thereto. On March 30, 2026, the Company entered into the Second Omnibus Amendment Agreement with J. Aron and the other parties thereto, to extend the expiration date of the Shreveport Supply and Offtake Agreement to January 31, 2030.
On October 3, 2023, Montana Renewables, LLC (“MRL”) and Wells Fargo Commodities, LLC (“Wells Fargo”) entered into (a) an ISDA 2002 Master Agreement (the “Master Agreement”), (ii) a Schedule to the ISDA 2002 Master Agreement (the “Schedule”), (iii) a Credit Support Annex to the ISDA 2002 Master Agreement (the “Credit Support Annex”), and (iv) a Renewable Fuel and Feedstock Repurchase Master Confirmation (together with the Master Agreement, the Schedule and the Credit Support Annex, collectively the “MRL Supply and Offtake Agreement” and, together with the Shreveport Supply and Offtake Agreement, the “Supply and Offtake Agreements”). Pursuant to the MRL Supply and Offtake Agreement, Wells Fargo agreed to, among other things, (a) purchase from MRL renewable feedstocks and finished products located at MRL’s Great Falls facility, subject to MRL’s repurchase obligations with respect thereto, and (b)
12
provide certain financial accommodations to MRL secured by liens on certain renewable feedstocks and finished products owned by MRL. The MRL Supply and Offtake Agreement replaced MRL’s previous inventory financing agreement with Macquarie, which terminated on October 3, 2023.
On February 18, 2025, the Company repaid in full the outstanding obligations of approximately $
While title to certain inventories will reside with the counterparties to the arrangements, the Supply and Offtake Agreements are accounted for by the Company similar to a product financing arrangement; therefore, the inventories sold to the counterparties will continue to be included in the Company’s unaudited condensed consolidated balance sheets until processed and sold to a third party.
As of March 31, 2026 and December 31, 2025, the net carrying value of the Shreveport Supply and Offtake Agreement obligation was $
6. Long-Term Debt
Long-term debt consisted of the following (in millions):
| March 31, | | December 31, | |||
2026 | 2025 | |||||
Senior secured revolving credit facility | $ | | $ | | ||
| — | |||||
| | |||||
| | |||||
| | |||||
| — |
| | |||
| — |
| | |||
DOE Loan | | | ||||
Shreveport terminal asset financing arrangement |
| |
| | ||
Montana terminal asset financing arrangement |
| |
| | ||
Montana refinery asset financing arrangement |
| |
| | ||
Finance lease obligations |
| |
| | ||
Less unamortized debt issuance costs (1) |
| ( |
| ( | ||
Less unamortized discounts and premium |
| |
| ( | ||
Total debt | $ | | $ | | ||
Less current portion of long-term debt |
| |
| | ||
Total long-term debt | $ | | $ | | ||
| (1) | Deferred debt issuance costs are being amortized by the effective interest rate method over the lives of the related debt instruments. These amounts are net of accumulated amortization of $ |
13
Senior Secured Revolving Credit Facility
On
The borrowing capacity at March 31, 2026, under the revolving credit facility was approximately $
The revolving credit facility contains various covenants that limit, among other things, the Company’s ability to: incur indebtedness; grant liens; dispose of certain assets; make certain acquisitions and investments; redeem or prepay other debt or make other restricted payments such as distributions to unitholders; enter into transactions with affiliates; and enter into a merger, consolidation or sale of assets. Further, the revolving credit facility contains one springing financial covenant which provides that only if the Company’s availability to borrow loans under the revolving credit facility falls below the
Senior Notes
On
On
14
On
On
On
On
The Company redeemed all the 2027 Notes in January 2026.
On
The Company redeemed all the remaining 2026 Notes in January 2026.
The effective interest rate of all of the Issuers’ senior notes is consistent with the stated rates.
Senior Notes
The 2028 Notes, 2028 Mirror Issuance Notes, 2029 Secured Notes and 2031 Notes (collectively, the “Senior Notes”) are subject to certain automatic customary releases, including the sale, disposition, or transfer of capital stock or substantially all of the assets of a subsidiary guarantor, designation of a subsidiary guarantor as unrestricted in accordance with the applicable indenture, exercise of legal defeasance option or covenant defeasance option, liquidation or dissolution of the subsidiary guarantor and a subsidiary guarantor ceases to both guarantee other Partnership debt and to be an obligor
15
under the revolving credit facility. The Partnership’s operating subsidiaries may not sell or otherwise dispose of all or substantially all of their properties or assets to, or consolidate with or merge into, another company if such a sale would cause a default under the indentures governing the Senior Notes.
The indentures governing the Senior Notes contain covenants that, among other things, restrict the Partnership’s ability and the ability of certain of the Partnership’s subsidiaries to: (i) sell assets; (ii) pay distributions on, redeem or repurchase the Partnership’s equity or redeem or repurchase its subordinated debt; (iii) make investments; (iv) incur or guarantee additional indebtedness or issue preferred equity; (v) create or incur certain liens; (vi) enter into agreements that restrict distributions or other payments from the Partnership’s restricted subsidiaries to the Partnership; (vii) consolidate, merge or transfer all or substantially all of the Partnership’s assets; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries. These covenants are subject to important exceptions and qualifications. At any time when the Senior Notes are rated investment grade by either Moody’s Investors Service, Inc. (“Moody’s”) or S&P Global Ratings (“S&P”) and no Default or Event of Default, each as defined in the indentures governing the Senior Notes, has occurred and is continuing, many of these covenants will be suspended. As of March 31, 2026, the Company and the Issuers were in compliance with all covenants under the indentures governing the Senior Notes.
U.S. Department of Energy Facility
On January 10, 2025, MRL and the U.S. Department of Energy (the “DOE”), as guarantor and loan servicer, executed a Loan Guarantee Agreement (the “DOE Loan”) for a $
In connection with the funding of the first tranche under the DOE Loan, MRL terminated (i) the MRL Asset Financing Arrangements, (ii) the MRL Term Loan Credit Agreement, (iii) the MRL Revolving Credit Agreement and (iv) the MRL Supply and Offtake Agreement.
On the Funding Date, the Company used a portion of the proceeds from the first tranche of the DOE Loan to repurchase all of the equipment associated with the MRL Asset Financing Arrangements; repay the MRL Term Loan Credit Agreement; repay the MRL Revolving Credit Agreement; and repay the MRL Supply and Offtake Agreement.
Separately, the Company received $
Montana Refinery Asset Financing Arrangement
On September 30, 2024, Calumet Montana Refining, LLC (“Calumet Montana”), a subsidiary of the Company, entered into a Master Lease Agreement (together with Equipment Schedule No. 1 thereto) with Stonebriar related to a sale and leaseback transaction (the “Montana Refinery Asset Financing Arrangement”). Pursuant to the Montana Refinery Asset Financing Arrangement, Calumet Montana sold to and leased back from Stonebriar certain equipment comprising the specialty asphalt refinery located in Great Falls, Montana (the “Refinery Assets”), for a total purchase price of $
16
The arrangement did not qualify as a sale in accordance with ASC 842 because control of the assets did not transfer to the buyer-lessor, as such the Company has recorded the Montana Refinery Asset Financing Arrangement as a financial liability in the unaudited condensed consolidated balance sheets.
MRL Asset Financing Arrangements
In connection with the funding of the first tranche under the DOE Facility, MRL terminated the MRL Asset Financing Arrangements and the Company recorded debt extinguishment costs of approximately $
MRL Term Loan Credit Agreement
In connection with the funding of the first tranche under the DOE Facility, MRL terminated the MRL Term Loan Credit Agreement and the Company recorded debt extinguishment costs of approximately $
Master Derivative Contracts
The Company’s payment obligations under all of the Company’s master derivatives contracts for commodity hedging generally are secured by a first priority lien on the Company’s real property, plant and equipment, fixtures, intellectual property, certain financial assets, certain investment property, commercial tort claims, chattel paper, documents, instruments and proceeds of the foregoing (including proceeds of hedge arrangements). The Company had no additional letters of credit or cash margin posted with any hedging counterparty as of March 31, 2026. The Company’s master derivatives contracts and Collateral Trust Agreement (as defined below) continue to impose a number of covenant limitations on the Company’s operating and financing activities, including limitations on liens on collateral, limitations on dispositions of collateral and collateral maintenance and insurance requirements.
Collateral Trust Agreement
The Company has a collateral trust agreement (the “Collateral Trust Agreement”) which governs how various secured Company creditors, including secured hedging counterparties, our creditor on a forward purchase contract for physical commodities, and holders of our 2029 Secured Notes share collateral pledged as security for the payment of respective payment obligations to them. The Collateral Trust Agreement limits to $
Standby Letters of Credit
The Company has agreements with various financial institutions for standby letters of credit and other reserves. The standby letters of credit have been issued primarily to vendors. As of March 31, 2026 and December 31, 2025, the Company had outstanding standby letters of credit of $
17
Maturities of Long-Term Debt
As of March 31, 2026, principal payments on debt obligations and future minimum rentals on finance lease obligations are as follows (in millions):
Year | | Maturity | |
2026 | $ | | |
2027 |
| | |
2028 |
| | |
2029 |
| | |
2030 |
| | |
Thereafter |
| | |
Total Principal Payments | $ | | |
Less: Unamortized debt issuance costs and debt discounts | ( | ||
Total debt | $ | | |
18
7. Derivatives
The Company is exposed to price risks due to fluctuations in the price of crude oil, refined products, renewable products, feedstocks, and natural gas. The Company uses various strategies to reduce its exposure to commodity price risk. The strategies to reduce the Company’s risk utilize both physical forward contracts and financially settled derivative instruments, such as swaps, collars, options and futures, to attempt to reduce the Company’s exposure with respect to:
| ● | crude oil and renewable feedstock purchases and sales; |
| ● | fuel and renewable fuel product sales and purchases; |
| ● | natural gas purchases; |
| ● | precious metals purchases; and |
| ● | fluctuations in the value of crude oil between geographic regions and between the different types of crude oil such as New York Mercantile Exchange West Texas Intermediate (“NYMEX WTI”), Light Louisiana Sweet, Western Canadian Select (“WCS”), WTI Midland, Mixed Sweet Blend, Magellan East Houston and ICE Brent. |
The Company manages its exposure to commodity markets, credit, volumetric and liquidity risks to manage its costs and volatility of cash flows as conditions warrant or opportunities become available. These risks may be managed in a variety of ways that may include the use of derivative instruments. Derivative instruments may be used for the purpose of mitigating risks associated with an asset, liability and anticipated future transactions. The changes in fair value of the Company’s derivative instruments will affect its earnings and cash flows; however, such changes should be offset by price or rate changes related to the underlying commodity or financial transaction that is part of the risk management strategy. The Company does not speculate with derivative instruments or other contractual arrangements that are not associated with its business objectives.
Speculation is defined as increasing the Company’s natural position above the maximum position of its physical assets or trading in commodities, currencies or other risk bearing assets that are not associated with the Company’s business activities and objectives. The Company’s positions are monitored routinely by a risk management committee to ensure compliance with its stated risk management policy and documented risk management strategies. All strategies are reviewed on an ongoing basis by the Company’s risk management committee, which will add, remove or revise strategies in anticipation of changes in market conditions and/or its risk profiles. Such changes in strategies are to position the Company in relation to its risk exposures in an attempt to capture market opportunities as they arise.
As of March 31, 2026 and December 31, 2025, the Company was obligated to repurchase crude oil and refined products from its counterparties, then in effect, at the termination of the Supply and Offtake Agreements in certain scenarios. The Company has determined that the redemption feature on the initially recognized liability related to the Supply and Offtake Agreements is an embedded derivative indexed to commodity prices. As such, the Company has accounted for these embedded derivatives at fair value with changes in the fair value, if any, recorded in gain (loss) on derivative instruments in the Company’s unaudited condensed consolidated statements of operations. Refer to Note 5 — “Inventory Financing Agreements" for additional information.
The Company recognizes all derivative instruments at their fair values (refer to Note 8 — “Fair Value Measurements”) as either current assets or derivative liabilities or other noncurrent assets, net or other long-term liabilities in the unaudited condensed consolidated balance sheets. Fair value includes any premiums paid or received and unrealized gains and losses. Fair value does not include any amounts receivable from or payable to counterparties, or collateral provided to counterparties. Derivative asset and liability amounts with the same counterparty are netted against each other for financial reporting purposes in accordance with the provisions of our master netting arrangements.
19
The following tables summarize the Company’s gross fair values of its derivative instruments, presenting the impact of offsetting derivative assets in the Company’s unaudited condensed consolidated balance sheets (in millions):
March 31, 2026 | December 31, 2025 | |||||||||||||||||||
Gross |
|
| Gross |
|
| |||||||||||||||
Amounts of | Gross | Net Amounts | Amounts of | Gross | Net Amounts | |||||||||||||||
Balance Sheet | Recognized | Amounts | of Assets | Recognized | Amounts | of Assets | ||||||||||||||
| Location | | Assets | | Offset | | Presented | | Assets | | Offset | | Presented | |||||||
Derivative instruments not designated as hedges: | ||||||||||||||||||||
Specialty Products and Solutions segment: | ||||||||||||||||||||
Crack spread swaps |
| Derivative assets | $ | — | $ | — | $ | — | $ | | $ | — | $ | | ||||||
The following tables summarize the Company’s gross fair values of its derivative instruments, presenting the impact of offsetting derivative liabilities in the Company’s unaudited condensed consolidated balance sheets (in millions):
| | March 31, 2026 | | December 31, 2025 | ||||||||||||||||
Gross |
| Gross |
| |||||||||||||||||
Amounts of | Gross | Net Amounts | Amounts of | Gross | Net Amounts | |||||||||||||||
Balance Sheet | Recognized | Amounts | of Liabilities | Recognized | Amounts | of Liabilities | ||||||||||||||
Location | | Liabilities | | Offset | | Presented | | Liabilities | | Offset | | Presented | ||||||||
Derivative instruments not designated as hedges: | ||||||||||||||||||||
Specialty Products and Solutions segment: | ||||||||||||||||||||
Inventory financing obligation |
| Other long-term liabilities (1) | $ | ( | $ | — | $ | ( | $ | — | $ | | $ | | ||||||
Crack spread swaps |
| Derivative liabilities / Other long-term liabilities |
| ( |
| — |
| ( |
| — |
| — |
| — | ||||||
Total derivative instruments | $ | ( | $ | — | $ | ( | $ | — | $ | | $ | | ||||||||
| (1) | The embedded derivative of the inventory financing obligation is reflected as a component of other long-term liabilities in the condensed consolidated balance sheets. The embedded derivative of the inventory financing obligation was a $ |
Certain of the Company’s outstanding derivative instruments are subject to credit support agreements with the applicable counterparties which contain provisions setting certain credit thresholds above which the Company may be required to post agreed-upon collateral, such as cash or letters of credit, with the counterparty to the extent that the Company’s mark-to-market net liability, if any, on all outstanding derivatives exceeds the credit threshold amount per such credit support agreement. The majority of the credit support agreements covering the Company’s outstanding derivative instruments also contain a general provision stating that if the Company experiences a material adverse change in its business, in the reasonable discretion of the counterparty, the Company’s credit threshold could be lowered by such counterparty. The Company does not expect that it will experience a material adverse change in its business. The cash flow impact of the Company’s derivative activities are included within cash flows from operating activities in the unaudited condensed consolidated statements of cash flows.
Derivative Instruments Not Designated as Hedges
For derivative instruments not designated as hedges, the change in fair value of the asset or liability for the period is recorded to gain (loss) on derivative instruments in the unaudited condensed consolidated statements of operations. Upon the settlement of a derivative not designated as a hedge, the gain or loss at settlement is recorded to gain (loss) on derivative instruments in the unaudited condensed consolidated statements of operations. The Company has entered into crack spread swaps that were not designated as cash flow hedges for accounting purposes. However, these instruments provide economic hedges of the purchases and sales of the Company’s natural gas, crude oil, gasoline and refined products.
20
The Company recorded the following gains (losses) in its unaudited condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025 related to its derivative instruments not designated as hedges (in millions):
| Amount of Realized Gain (Loss) | | ||||||||||
Recognized in Gain (Loss) on | Amount of Unrealized Gain (Loss) | |||||||||||
Derivative | Recognized in Gain (Loss) on Derivative | |||||||||||
Instruments | Instruments | |||||||||||
Type of Derivative |
| 2026 | | 2025 | | 2026 | | 2025 | ||||
Specialty Products and Solutions segment: |
| |
| |
| |
| | ||||
Inventory financing obligation | $ | ( | $ | ( | $ | ( | $ | | ||||
Crack spread swaps |
| ( |
| — |
| ( |
| — | ||||
Montana/Renewables segment: |
| |
| |
| |
| | ||||
Inventory financing obligation |
| — |
| ( |
| — |
| — | ||||
Total | $ | ( | $ | ( | $ | ( | $ | | ||||
Derivative Positions
In November 2025, the Company entered into crack spread swaps sales contracts with a counterparty to reduce its exposure to commodity price risk.
| | Notional Contract Volumes by | ||||
Year of Maturity | ||||||
Total | ||||||
Outstanding | ||||||
Notional | | 2026 | | Unit of Measure | ||
Derivative instruments not designated as hedges: |
| |
| |
| |
Crack spread swaps - sales |
| |
| |
| Barrels |
| | Notional Contract Volumes by | ||||
Year of Maturity | ||||||
Total | ||||||
Outstanding | ||||||
Notional | | 2027 | | Unit of Measure | ||
Derivative instruments not designated as hedges: |
| |
| |
| |
Crack spread swaps - sales |
| |
| |
| Barrels |
8. Fair Value Measurements
In accordance with ASC 820, the Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. Observable inputs are from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. These tiers include the following:
| ● | Level 1 — inputs include observable unadjusted quoted prices in active markets for identical assets or liabilities |
| ● | Level 2 — inputs include other than quoted prices in active markets that are either directly or indirectly observable |
| ● | Level 3 — inputs include unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions |
21
In determining fair value, the Company uses various valuation techniques and prioritizes the use of observable inputs. The availability of observable inputs varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded and other characteristics particular to the instrument. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants and the valuation does not require significant management judgment. For other financial instruments, pricing inputs are less observable in the marketplace and may require management judgment.
Recurring Fair Value Measurements
There have been no material changes in our Derivative Assets and Liabilities Measurements, Pension Assets, Liability Awards, and Precious Metals Obligations from those previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Hierarchy of Recurring Fair Value Measurements
The Company’s recurring assets and liabilities measured at fair value were as follows (in millions):
| March 31, 2026 | | December 31, 2025 | |||||||||||||||||||||
Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | ||||||||||
Assets: |
| |
| |
| |
| |
| |
| |
| |
| | ||||||||
Derivative assets: | ||||||||||||||||||||||||
Crack spread swaps | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Inventory financing obligation | | | | | | | | | ||||||||||||||||
Total derivative assets | | | | | | | | | ||||||||||||||||
Pension plan investments | | | | | | | | | ||||||||||||||||
Other | | | | | | | | | ||||||||||||||||
Total recurring assets at fair value | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Liabilities: |
|
|
|
|
|
|
|
| ||||||||||||||||
Derivative liabilities: |
|
|
|
|
|
|
|
| ||||||||||||||||
Crack spread swaps | $ | | $ | | $ | ( | $ | ( | $ | | $ | | $ | | $ | | ||||||||
Inventory financing obligation | | | ( | ( | | | | | ||||||||||||||||
Total derivative liabilities | | | ( | ( | | | | | ||||||||||||||||
Liability awards |
| ( |
| |
| |
| ( |
| ( |
| |
| |
| ( | ||||||||
Total recurring liabilities at fair value | $ | ( | $ | | $ | ( | $ | ( | $ | ( | $ | | $ | | $ | ( | ||||||||
The table below sets forth a summary of net changes in fair value of the Company’s Level 3 financial assets and liabilities (in millions):
| For the Three Months Ended March 31, | |||||
2026 | | 2025 | ||||
Fair value at January 1, | $ | | $ | | ||
Realized loss on derivative instruments |
| ( |
| ( | ||
Unrealized gain (loss) on derivative instruments |
| ( |
| | ||
Settlements |
| |
| | ||
Fair value at March 31, | $ | ( | $ | | ||
Total gain (loss) included in net income (loss) attributable to changes in unrealized gain (loss) relating to financial assets and liabilities held as of March 31, | $ | ( | $ | | ||
Nonrecurring Fair Value Measurements
Certain non-financial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances.
22
Estimated Fair Value of Financial Instruments
Cash, cash equivalents and restricted cash
The carrying value of cash, cash equivalents and restricted cash are each considered to be representative of their fair value.
Debt
The estimated fair value of long-term debt at March 31, 2026 and December 31, 2025, consists primarily of senior notes. The estimated fair value of the Company’s 2026 Notes, 2027 Notes, 2028 Notes, 2028 Mirror Issuance Notes, 2029 Secured Notes, and 2031 Notes defined as Level 2 was based upon quoted prices for identical or similar liabilities in markets that are not active. The carrying value of borrowings, if any, under the Company’s Senior secured revolving credit facility, DOE Loan, Shreveport terminal asset financing arrangement, Montana terminal asset financing arrangement, Montana refinery asset financing arrangement, and finance lease obligations are classified as Level 3. Refer to Note 6 — “Long-Term Debt” for further information on long-term debt.
The Company’s carrying value and estimated fair value of the Company’s financial instruments, carried at adjusted historical cost, were as follows (in millions):
| March 31, 2026 | | December 31, 2025 | |||||||||||
Level | Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||
Financial Instrument: |
| |
| |
| |
| |
| | ||||
2026 Notes, 2027 Notes, 2028 Notes, 2028 Mirror Issuance Notes, 2029 Secured Notes and 2031 Notes |
| 2 | $ | | $ | | | $ | | |||||
Senior secured revolving credit facility |
| 3 | $ | | $ | | $ | | $ | | ||||
DOE Loan |
| 3 | $ | | $ | | $ | | $ | | ||||
Shreveport terminal asset financing arrangement |
| 3 | $ | | $ | | $ | | $ | | ||||
Montana terminal asset financing arrangement |
| 3 | $ | | $ | | $ | | $ | | ||||
Montana refinery asset financing arrangement |
| 3 | $ | | $ | | $ | | $ | | ||||
Finance lease obligations |
| 3 | $ | | $ | | $ | | $ | | ||||
9. Earnings Per Share and Stock-Based Compensation
The following table sets forth the computation of basic and diluted earnings per share (in millions, except share and per share data) for the three months ended March 31:
2026 | 2025 | ||||||
Numerator for basic and diluted earnings per share: | |||||||
Net loss | $ | ( | $ | ( | |||
Denominator for earnings per share: |
| |
| | |||
Weighted average number of basic and diluted common shares outstanding (1) |
| |
| | |||
Earnings per share in net loss: |
| |
| | |||
Basic and diluted | $ | ( | $ | ( |
| (1) | Total diluted weighted average common shares outstanding excludes a de-minimis amount of potentially dilutive restricted stock units which would have been anti-dilutive for the three months ended March 31, 2026 and 2025, respectively. |
23
Stock-based compensation expense (benefit) is included within general and administrative expense in the unaudited condensed consolidated statements of operations. For the periods ended March 31, 2026 and 2025, stock-based compensation expense totaled $
10. Segments and Related Information
Segment Reporting
The Company determines its
| ● | Specialty Products and Solutions. The Specialty Products and Solutions segment consists of our customer-focused solutions and formulations businesses, covering multiple specialty product lines, anchored by our unique integrated complex in Northwest Louisiana. In this segment, we manufacture and market a wide variety of solvents, waxes, customized lubricating oils, white oils, petrolatums, gels, esters, and other products. Our specialty products are sold to domestic and international customers who purchase them primarily as raw material components for consumer-facing and industrial products. |
| ● | Montana/Renewables. The Montana/Renewables segment is composed of our Montana Renewables facility and our Great Falls specialty asphalt facility. At our Montana Renewables facility, we process a variety of geographically advantaged renewable feedstocks into renewable diesel, sustainable aviation fuel, renewable hydrogen, renewable natural gas, renewable propane, and renewable naphtha that are distributed into renewable markets in the western half of North America. At our Montana specialty asphalt facility, we process Canadian crude oil into conventional gasoline, diesel, jet fuel and specialty grades of asphalt, with production sized to serve local markets. |
| ● | Performance Brands. The Performance Brands segment includes our fast-growing portfolio of high-quality, high-performing brands. In this segment, we blend, package, and market high performance products through our Royal Purple, Bel-Ray, and TruFuel brands. |
The accounting policies of the reporting segments are the same as those described in the summary of significant accounting policies as disclosed in Note 2 — “Summary of Significant Accounting Policies,” except that the disaggregated financial results for the reporting segments have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for the purposes of assisting internal operating decisions. The Company accounts for inter-segment sales and transfers using market-based transfer pricing. The Company will periodically refine its expense allocation methodology for its segment reporting as more specific information becomes available and the industry or market changes. The CODM uses Adjusted EBITDA (a non-GAAP financial measure) to evaluate performance and allocate resources to each segment, primarily through periodic budgeting and segment performance reviews. The Company defines Adjusted EBITDA for any period as EBITDA adjusted for (a) impairment; (b) unrealized gains and losses from mark-to-market accounting for hedging activities; (c) realized gains and losses under derivative instruments excluded from the determination of net income (loss); (d) non-cash equity-based compensation expense and other non-cash items (excluding items such as accruals of cash expenses in a future period or amortization of a prepaid cash expense) that were deducted in computing net income (loss); (e) debt refinancing fees, extinguishment costs, premiums and penalties; (f) any net gain or loss realized in connection with an asset sale that was deducted in computing net income (loss); (g) amortization of turnaround costs; (h) LCM inventory adjustments; (i) the impact of liquidation of inventory layers calculated using the LIFO method; (j) RINs mark-to-market adjustments; (k) RINs incurrence expense; and (l) all extraordinary, unusual or non-recurring items of gain or loss, or revenue or expense.
24
Reportable segment information for the three months ended March 31, 2026 and 2025 is as follows (in millions):
| Specialty | | | | ||||||||
Products and | Performance | Montana/ | Consolidated | |||||||||
Three Months Ended March 31, 2026 | Solutions | Brands | Renewables | Total | ||||||||
Sales: | | | | | ||||||||
External customers | $ | | $ | | $ | | $ | | ||||
Inter-segment sales |
| |
| |
| — |
| | ||||
Total sales | $ | | $ | | $ | | $ | | ||||
Inter-segment sales eliminations | ( | |||||||||||
Sales | $ | | ||||||||||
Cost of sales (1) | $ | | $ | | $ | |
|
| ||||
Other segment expenses (1) | |
|
| |
|
| | |||||
Other segment items (1) |
| |
|
| ( |
|
| ( |
|
| ||
Segment Adjusted EBITDA | $ | | $ | | $ | ( | | |||||
Reconciling items to net loss: |
|
| ||||||||||
Corporate expenses and other | $ | | ||||||||||
Depreciation and amortization |
| | ||||||||||
LCM / LIFO gain |
| ( | ||||||||||
Interest expense |
| | ||||||||||
Debt extinguishment costs |
| | ||||||||||
Unrealized loss on derivatives |
| | ||||||||||
RINs incurrence expense |
| | ||||||||||
RINs mark-to-market loss |
| | ||||||||||
Other |
| | ||||||||||
Equity-based compensation and other items |
| | ||||||||||
Income tax expense |
| ( | ||||||||||
Noncontrolling interest adjustments |
|
| |
| |
| | |||||
Net loss |
| |
| | $ | ( | ||||||
Capital expenditures | $ | | $ | — | $ | | ||||||
PP&E, net | $ | | $ | | $ | | ||||||
25
| Specialty | | | | ||||||||
Products and | Performance | Montana/ |
| |||||||||
Three Months Ended March 31, 2025 | Solutions | Brands | Renewables | Total | ||||||||
Sales: | | | | | ||||||||
External customers | $ | | $ | | $ | | $ | | ||||
Inter-segment sales |
| |
| — |
| — |
| | ||||
Total sales | $ | | $ | | $ | | $ | | ||||
Inter-segment sales eliminations | ( | |||||||||||
Sales | $ | | ||||||||||
Cost of sales (1) | $ | | $ | | $ | |
|
| ||||
Other segment expenses (1) | |
|
| |
|
| | |||||
Other segment items (1) |
| |
|
| ( |
|
| ( |
|
| ||
Segment Adjusted EBITDA | $ | | $ | | $ | ( | | |||||
Reconciling items to net loss: |
|
| ||||||||||
Corporate expenses and other | $ | | ||||||||||
Depreciation and amortization |
| | ||||||||||
LCM / LIFO gain |
| ( | ||||||||||
Gain on sale of business |
| ( | ||||||||||
Interest expense |
| | ||||||||||
Debt extinguishment costs |
| | ||||||||||
Unrealized gain on derivatives |
| ( | ||||||||||
RINs incurrence expense |
| | ||||||||||
RINs mark-to-market loss |
| | ||||||||||
Other |
| | ||||||||||
Equity-based compensation and other items |
| ( | ||||||||||
Income tax expense |
| | ||||||||||
Noncontrolling interest adjustments |
|
| |
| |
| | |||||
Net loss |
| |
| | $ | ( | ||||||
Capital expenditures | $ | | $ | | $ | | ||||||
PP&E, net | $ | | $ | | $ | | ||||||
Geographic Information
International sales accounted for less than ten percent of consolidated sales in the three months ended March 31, 2026 and 2025.
26
The Company offers specialty, fuels, renewable fuels and packaged products primarily in categories consisting of lubricating oils, solvents, waxes, gasoline, diesel, jet fuel, asphalt, heavy fuel oils, renewable fuels, high-performance branded products, and other specialty and fuels products.
The following table sets forth the major product category sales for each segment for the three months ended March 31, 2026 and 2025 (dollars in millions):
| Three Months Ended March 31, | ||||||||||
2026 | 2025 | ||||||||||
Specialty Products and Solutions: | | | | | | | | | | ||
Lubricating oils | $ | |
| | % | $ | |
| | % | |
Solvents |
| |
| | % |
| |
| | % | |
Waxes |
| |
| | % |
| |
| | % | |
Fuels, asphalt and other by-products |
| |
| | % |
| |
| | % | |
Total | $ | |
| | % | $ | |
| | % | |
Montana/Renewables: |
| |
| |
| |
| | |||
Gasoline | $ | |
| | % | $ | |
| | % | |
Diesel |
| |
| | % |
| |
| | % | |
Jet fuel |
| |
| | % |
| |
| | % | |
Asphalt, heavy fuel oils and other |
| |
| | % |
| |
| | % | |
Renewable fuels |
| |
| | % |
| |
| | % | |
Total | $ | |
| | % | $ | |
| | % | |
Performance Brands: | $ | |
| | % | $ | |
| | % | |
Consolidated sales | $ | |
| | % | $ | |
| | % | |
Major Customers
During the three months ended March 31, 2026 and 2025, the Company had
Major Suppliers
During the three months ended March 31, 2026 and March 31, 2025, the Company had
11. Income Taxes
Calumet, Inc. is a corporation and is subject to U.S. federal and state income taxes. Income taxes are accounted for under the asset and liability method. The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts and income tax basis of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carryforwards, using enacted tax rates in effect for the taxing jurisdiction in which the Company operates for the year in which those temporary differences are expected to be recovered or settled. The Company recognizes the financial statement effects of a tax position when it is more likely than not, based on technical merits, that the position will be sustained upon examination. Net deferred tax assets are then reduced by a valuation allowance if the Company believes it is more likely than not such net deferred tax assets will not be realized. The Company assessed the realizability of the deferred tax assets (“DTAs”) and concluded that a full valuation allowance for the net DTAs is deemed appropriate as the DTAs, except for as described below, is deemed appropriate as the DTAs were not more likely than not to be realized under relevant accounting standards.
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Prior to the quarter ended September 30, 2025, the Company maintained a full valuation allowance on its CFPCs. As a result of the successful monetization of its CPFCs during 2025 through third-party sales under Section 6418 of the Internal Revenue Code, the Company obtained sufficient positive evidence to support the realization of certain deferred tax assets that were previously subject to a valuation allowance. Accordingly, the Company released a portion of the valuation allowance related to those deferred tax assets.
Income Tax Expense
Historically, we have calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full year to income (loss) for the interim period. In the first quarter of 2026, we concluded that we could not calculate a reliable estimate of our annual effective tax rate due to inability to forecast the impacts of various mark-to-market items and their impact on our business and results of operations. Accordingly, we computed the effective tax rate for the three-month period ending March 31, 2026 using actual results. Income tax benefit for the three months ended March 31, 2026 was $
One Big Beautiful Bill Act
On July 4, 2025, the United States Congress passed budget reconciliation bill H.R. 1 referred to as the One Big Beautiful Bill Act (the “OBBB”). The OBBB contains several changes to corporate taxation. The Company has assessed the impact of the OBBB, the provisions that impact us the most are the following:
| ● | extension of the clean fuel production credit through December 31, 2029; |
| ● | requirement that feedstocks for fuel produced after December 31, 2025 must be produced or grown exclusively in the U.S., Mexico, or Canada in order for such fuel to be eligible for the clean fuel production credit; |
| ● | elimination of the special clean fuel production credit rate for SAF produced after December 31, 2025; |
| ● | clean fuel production credits remain available for transfer and direct pay; and |
| ● | changes to limitations on deductions for interest expense. |
We have evaluated the effects of the legislation on our financial position, results of operations or liquidity in the future; the effects of OBBB will not have a material impact on our financial position, results of operations and liquidity in 2026.
12. Unrestricted Subsidiaries
As defined in the indentures governing the Company’s outstanding senior notes, an unrestricted subsidiary means MRHL, MRL and any other subsidiary of the Company, other than Calumet Finance Corp., that is designated by the governing body of the General Partner as an unrestricted subsidiary, but only to the extent that such subsidiary:
| ● | has no indebtedness other than non-recourse debt owing to any person other than the Company or any of its restricted subsidiaries, except to the extent permitted by the indentures of the senior notes; |
| ● | is not party to any agreement, contract, arrangement or understanding with the Company or any restricted subsidiary of the Company unless the terms of any such agreement, contract, arrangement or other understanding are no less favorable to the Company or such restricted subsidiary than those that might be obtained at the time from persons who are not affiliates of the Company, except to the extent permitted by the indentures of the senior notes; |
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| ● | is a person with respect to which neither the Company nor any of its restricted subsidiaries has any direct or indirect obligation (a) to subscribe for additional equity interests or (b) to maintain or preserve such person’s financial condition or to cause such person to achieve any specified levels of operating results, except to the extent permitted by the indentures of the senior notes; and |
| ● | has not guaranteed or otherwise directly or indirectly provided credit support for any indebtedness of the Company or any of its restricted subsidiaries. |
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As of March 31, 2026 and December 31, 2025, respectively, MRHL and MRL were the only unrestricted subsidiaries of the Company. In accordance with the indentures governing the Company’s outstanding senior notes, the following tables set forth certain financial information of (i) the Company and its restricted subsidiaries, on a combined basis, (ii) the Company’s unrestricted subsidiaries, on a combined basis, and (iii) the Company and its subsidiaries, on a consolidated basis, in each case, as of March 31, 2026 and December 31, 2025, respectively (dollars in millions):
| Parent | | | | ||||||||
Company and | ||||||||||||
Restricted | | Unrestricted | | | Consolidated | |||||||
March 31, 2026 | Subsidiaries | Subsidiaries | Eliminations | Total | ||||||||
Cash and cash equivalents | $ | | $ | | $ | | $ | | ||||
Restricted cash | $ | | $ | | $ | | $ | | ||||
Accounts receivable, net: | $ | | $ | | $ | | $ | | ||||
Inventory | $ | | $ | | $ | | $ | | ||||
Prepaid expenses and other current assets | $ | | $ | | $ | | $ | | ||||
Property, plant and equipment, net | $ | | $ | | $ | | $ | | ||||
Other noncurrent assets, net | $ | | $ | | $ | | $ | | ||||
Accounts payable | $ | | $ | | $ | ( | $ | | ||||
Other current liabilities | $ | | $ | | $ | | $ | | ||||
Current portion of long-term debt | $ | | $ | | $ | | $ | | ||||
Other long-term liabilities | $ | | $ | | $ | | $ | | ||||
Long-term debt, less current portion | $ | | $ | | $ | ( | $ | | ||||
Redeemable noncontrolling interest | $ | | $ | | $ | | $ | | ||||
Stockholders' equity | $ | ( | $ | ( | $ | ( | $ | ( | ||||
| Parent | | | | ||||||||
Company and | ||||||||||||
Restricted | | Unrestricted | | | Consolidated | |||||||
December 31, 2025 | Subsidiaries | Subsidiaries | Eliminations | Total | ||||||||
Cash and cash equivalents | $ | | $ | | $ | | $ | | ||||
Restricted cash | $ | | $ | | $ | | $ | | ||||
Accounts receivable - trade | $ | | $ | | $ | | $ | | ||||
Inventory | $ | | $ | | $ | | $ | | ||||
Prepaid expenses and other current assets | $ | | $ | | $ | | $ | | ||||
Property, plant and equipment, net | $ | | $ | | $ | | $ | | ||||
Operating lease right-of-use assets | $ | | $ | | $ | | $ | | ||||
Other noncurrent assets, net | $ | | $ | | $ | | $ | | ||||
Accounts payable | $ | | $ | | $ | ( | $ | | ||||
Other taxes payable | $ | | $ | | $ | | $ | | ||||
Other current liabilities | $ | | $ | | $ | | $ | | ||||
Current portion of operating lease liabilities | $ | | $ | | $ | | $ | | ||||
Current portion of long-term debt | $ | | $ | | $ | | $ | | ||||
Long-term operating lease liabilities | $ | | $ | | $ | | $ | | ||||
Long-term debt, less current portion | $ | | $ | | $ | ( | $ | | ||||
Redeemable noncontrolling interest | $ | | $ | | $ | | $ | | ||||
Stockholders' equity | $ | ( | $ | ( | $ | ( | $ | ( | ||||
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The following table sets forth certain financial information of the Company’s unrestricted subsidiaries, on a combined basis, for the periods presented (in millions):
| Three Months Ended March 31, | | |||||||||||||
| 2026 | | 2025 | | |||||||||||
Restricted | Unrestricted | Consolidated | Restricted | Unrestricted | Consolidated | | |||||||||
Sales | $ | | $ | | $ | | $ | | $ | | $ | | |||
Cost of sales | | | |
| | | | ||||||||
Gross profit (loss) | ( | ( | ( |
| ( | ( | ( | ||||||||
Operating costs and expenses: |
|
|
|
| |||||||||||
Selling | | — | |
| | — | | ||||||||
General and administrative | | | |
| | | | ||||||||
Gain on sale of business | — | — | — |
| ( | — | ( | ||||||||
Other operating expense | | | |
| | | | ||||||||
Operating loss | ( |
| ( | ( |
| ( |
| ( | ( | ||||||
|
| ||||||||||||||
Other income (expense): |
| | | |
|
| | | |||||||
Interest expense | ( | ( | ( |
| ( | ( | ( | ||||||||
Debt extinguishment costs | ( | — | ( |
| — | ( | ( | ||||||||
Loss on derivative instruments | ( | — | ( |
| ( | ( | ( | ||||||||
Other income | | | |
| ( | | | ||||||||
Total other expense | ( | ( | ( |
| ( | ( | ( | ||||||||
Net loss before income taxes | ( | ( | ( | ( | ( | ( | |||||||||
Income tax (benefit) expense | | ( | ( | | — | | |||||||||
Net loss | $ | ( | $ | ( | $ | ( |
| $ | ( | $ | ( | $ | ( | ||
13. Redeemable Noncontrolling Interest
On August 5, 2022 (the “Closing Date”), MRHL issued and sold
Holders of the Preferred Units are entitled to receive a preferred return equal to the greater of (i) an internal rate of return, or IRR (as defined in the Second Amended and Restated Limited Liability Company Agreement of MRHL (the “Second A&R LLC Agreement”), equal to
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At any time following the fifth anniversary of the Closing Date, if MRHL has not had an Initial Public Offering or Change of Control (each as defined in the Second A&R LLC Agreement), Warburg has the right to initiate an Initial Public Offering or Change of Control transaction pursuant to the terms of the Second A&R LLC Agreement. Upon the closing of a Qualified Initial Public Offering (as defined in the Second A&R LLC Agreement), each of MRHL and Warburg have the right to elect to convert all (but not less than all) of the Preferred Units (i) first by MRHL paying each holder of Preferred Units an amount in cash equal to such holder’s Preferred Return (to the extent not already paid) and (ii) thereafter, the Preferred Units automatically convert into the same number of common units of MRHL and will be entitled to participate in any distributions of Available Cash to the Members in proportion to their respective Percentage Interests. The Second A&R LLC Agreement also provides certain drag-along rights in connection with a Change of Control, subject to a minimum preferred return requirement for certain transactions that are consummated before the third anniversary of the Closing Date.
The redeemable noncontrolling interest in MRHL is reflected as temporary equity in the unaudited condensed consolidated balance sheets due to the redemption features. As of the reporting date, there are no triggering, change of control, early redemption or monetization events that are probable that would require us to revalue the Preferred Units.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The historical unaudited condensed consolidated financial statements included in this Quarterly Report reflect all of the assets, liabilities and results of operations of Calumet, Inc. (“Calumet,” the “Company,” “we,” “our,” or “us”). The following discussion analyzes the financial condition and results of operations of the Company for the three months ended March 31, 2026. Stockholders should read the following discussion and analysis of our financial condition and results of operations in conjunction with our 2025 Annual Report and our historical unaudited condensed consolidated financial statements and notes included elsewhere in this Quarterly Report.
Overview
We manufacture, formulate and market a diversified slate of specialty branded products and renewable fuels to customers across a broad range of consumer-facing and industrial markets. We are headquartered in Indianapolis, Indiana and operate twelve facilities throughout North America.
Our operations are managed using the following reportable segments: Specialty Products and Solutions; Performance Brands; and Montana/Renewables. For additional information, see Note 10 — “Segments and Related Information” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements.” In our Specialty Products and Solutions segment, we manufacture and market a wide variety of solvents, waxes, customized lubricating oils, white oils, petrolatums, gels, esters, and other products. Our specialty products are sold to domestic and international customers who purchase them primarily as raw material components for consumer-facing and industrial products. In our Performance Brands segment, we blend, package and market high performance products through our Royal Purple, Bel-Ray, and TruFuel brands. Our Montana/Renewables segment is comprised of two facilities located in Great Falls, Montana — renewable fuels and specialty asphalt. At our renewable fuels facility, we process a variety of geographically advantaged renewable feedstocks into renewable diesel, sustainable aviation fuel, renewable hydrogen, renewable natural gas, renewable propane, and renewable naphtha that are distributed into renewable markets in the western half of North America. At our specialty asphalt facility, we process Canadian crude oil into conventional gasoline, diesel, jet fuel and specialty grades of asphalt, with production sized to serve local markets.
Recent Developments
9.75% Senior Notes due 2031
On January 12, 2026, Calumet Specialty Products Partners, L.P. (the “Partnership”) and Calumet Finance Corp. (“Finance Corp.” and, together with the Partnership, the “Issuers”), each a subsidiary of the Company, issued and sold $405.0 million aggregate principal amount of a new series of the Issuers’ 9.75% Senior Notes due 2031 (the “2031 Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The Company subsequently redeemed all of the Issuers’ outstanding 11.00% Senior Notes due 2026 (the “2026 Notes”) and 8.125% Senior Notes due 2027 (the “2027 Notes”) in January 2026.
On March 17, 2026, the Issuers issued and sold $150.0 million aggregate principal amount of additional 2031 Notes (the “Additional Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933. The Company used the net proceeds from the offering of the Additional Notes to repay borrowings outstanding under the Company’s revolving credit facility. See Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information.
Ninth Amendment to Third Amended and Restated Credit Agreement
On January 23, 2026, the Company entered into the Ninth Amendment to the Third Amended and Restated Credit Agreement (the “Ninth Amendment”). The Ninth Amendment amended the Third Amended and Restated Credit Agreement, dated as of February 23, 2018 (the “Credit Agreement”), by and among Calumet GP, LLC, Calumet Specialty Products Partners, L.P., certain subsidiaries of the Company party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent. Among other changes, the Ninth Amendment modified the Credit Agreement to (i) extend the maturity date to January 23, 2031, (ii) provide for commitments of $500.0 million, subject to borrowing base
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limitations, (iii) revise certain covenants, representations and warranties, events of default and other terms to permit the Company or one or more of its subsidiaries to consummate one or more new inventory financing transactions, subject in each case to the Company’s satisfaction of certain customary conditions and (iv) provide for a reduction of commitments under the Credit Agreement from $500.0 million to $425.0 million if any such inventory financing transaction is consummated. See Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information.
Shreveport Supply and Offtake Agreement
On March 30, 2026, the Company entered into the Second Omnibus Amendment Agreement with J. Aron and the other parties thereto, to extend the expiration date of the Shreveport Supply and Offtake Agreement to January 31, 2030. Refer to Note 5 — “Inventory Financing Agreements” for additional information.
Crack Spread Swaps Sales Contracts
In April 2026, the Company entered into additional crack spread swap contracts with a counterparty to reduce our exposure to commodity price risk. These additional swap contracts were for 5,000 bpd in the fourth quarter 2026 and 4,000 bpd during each respective quarter in 2027. As of April 30, 2026, we had the following notional contracts related to outstanding crack spread swap contracts, which are derivative instruments not designated as hedges:
Avg. Strike Price ($/bbl) | |||||
Period of | Total Outstanding | for 2-1-1 Crack Spread Swap | |||
Maturity | | Notional Volumes (bpd) | | Based on CBOB | |
2Q 2026 |
| 10,000 |
| $ | 22.81 |
3Q 2026 | 10,000 | $ | 21.66 | ||
4Q 2026 | 15,000 | $ | 20.70 | ||
1Q 2027 | 10,000 | $ | 28.01 | ||
2Q 2027 | 10,000 | $ | 27.21 | ||
3Q 2027 | 10,000 | $ | 26.11 | ||
4Q 2027 | 10,000 | $ | 24.57 |
See Note 7 — “Derivatives” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information related to the Company’s derivatives.
Update Regarding Renewable Volume Obligation
On March 27, 2026, EPA announced a final rule to establish required Renewable Fuel Standard Volumes and percentage standards for 2026 and 2027, which sets the highest renewable fuel volumes in the history of the program. The EPA’s updated Renewable Volume Obligations (“RVOs”) establish total demand of 26.81 billion RINs and 27.02 billion RINs for 2026 and 2027, respectively, providing a historic level of annualized support for the biofuels industry. The 2026 and 2027 volumes include approximately 70% of renewable fuel volumes previously waived through small refinery exemptions (“SREs”) across the 2023–2025 compliance periods. These actions are expected to improve biobased diesel industry margins; improve utilization; and attract currently idled higher-cost biodiesel producers to re-enter the market in order to meet mandated demand. The RVO framework is aligned with a broader national focus on domestic energy security. The EPA also proposed that beginning in 2028, foreign source renewable fuels and feedstocks will receive only half the RFS compliance value of American-made products, materially enhancing the competitive position of domestic producers. Consistent with these developments, 2026 RIN prices continued to recover through April following the RVO announcement. Against this favorable regulatory backdrop, MRL’s strategic location and proximity to domestic customers and suppliers position the company for strong performance in the second half of 2026, continued momentum into 2027, and a sustained long-term competitive advantage.
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First Quarter 2026 Update
Outlook and Trends
We believe the business is well positioned to deliver improved performance, supported by a diversified customer base, a resilient specialty portfolio, and the benefits of multi-year capital investments that continue to enhance operational reliability. In addition, the current strength in fuel cracks is expected to provide a meaningful tailwind to commodity margins. Near-term performance is expected to be influenced by volatility in feedstock costs, which can create temporary margin compression in certain specialty products; however, we expect proactive pricing actions to support margin recovery as these increases are realized. During the first quarter of 2026, operations at our Shreveport facility were temporarily suspended across significant portions of the plant as a precaution to protect our employees and equipment following the discovery of organic chlorides in feedstock tanks, resulting in an estimated loss of approximately 750,000 barrels of production. Following extensive product testing, asset inspections, and repairs, the facility resumed full operations in early April 2026 and is currently processing over 50,000 barrels per day. The Company continues to work with third-party experts to investigate the source of the contamination.
At Montana Renewables, we continue to meet or outperform our operational cost targets prior to the start of our MaxSAF® 150 expansion and turnaround that began in early March, while demonstrating success in monetizing Section 45Z Clean Fuel Production Tax Credits (“CFPCs”). The MaxSAF® 150 expansion and turnaround was successfully completed in approximately 48 days and the facility resumed production in the second quarter of 2026. Our overall enhanced operational performance is a direct result of our focus on operational excellence since we completed commissioning in 2023.
In our Specialties Products and Solutions and Performance Brands segments, we continue to benefit from an attractive specialty product margin environment, although margins were temporarily compressed in the first quarter due to feedstock headwinds. Our fuels and asphalt business was also impacted by the temporary Shreveport production issues, partially offsetting improved commodity margins. Demand for our products in these businesses remained strong and we continue to leverage the benefits of our fully integrated specialty business in this market. We expect the current margin environment for both specialty products and fuel-based products to continue to be volatile in the near-term due to the Iran conflict impacting global feedstocks and the Company continues to implement price increases that began in the first quarter of 2026.
In our Montana/Renewables segment, we believe long-term demand for renewable fuel products will continue to grow supported by Federal, State, Provincial and local governmental mandates and incentives that have been enacted or announced in North America and globally. Collectively, these policies focus on domestic fuel security, strategic alignment with the agricultural industry as a source of renewable feedstocks, sustainability initiatives, transportation fuel cleanliness including ongoing reduction in particulates, and expansion of both voluntary and mandatory corporate decarbonization targets, particularly for hard-to-abate sectors including the global aviation industry. We believe that our advantage as a first-mover in sustainable aviation fuels market positions us as a preferred supplier to our potential offtake partners’ SAF strategies. The start-up of our MaxSAF® 150 project allows us to shift our renewable product mix toward more SAF production which has historically realized higher pricing relative to renewable diesel, and we expect this change in product mix to support improved margin realizations immediately and long-term.
Contingencies
For a summary of litigation and other contingencies, refer to Note 4 — “Commitments and Contingencies” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements.” Based on information available to us at the present time, we do not believe that any liabilities beyond the amounts already accrued, which may result from these contingencies, will have a material adverse effect on our liquidity, financial condition or results of operations.
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Financial Results
We reported net loss of $317.0 million in the first quarter 2026 versus a net loss of $162.0 million in the first quarter 2025. Net loss in the first quarter of 2026 was significantly impacted by the following non-cash items:
| ● | $37.9 million of non-cash equity based compensation expense; |
| ● | $102.7 million unrealized loss on derivatives; and |
| ● | $147.4 million of non-cash RINs related expense |
The increase in equity-based compensation expense is driven by the remeasurement of Long-Term Incentive Plan (“LTIP”) awards granted from 2017 through March 31, 2026 that are classified as liability awards. Liability awards are remeasured at fair value each reporting period, with changes recognized in earnings. Since 2017, the Company has granted approximately 11.0 million liability awards of which 2.9 million remain outstanding.
The $37.9 million expense recognized in the current quarter primarily reflects the increase in the fair value of these outstanding awards driven by the Company’s share price rising from $19.87 to $35.90 as well as the completion of service conditions on approximately 2.1 million awards. Due to the higher share price at the time of the 2026 LTIP grants, we issued approximately 374,000 awards at target under our LTIP. As the outstanding awards are remeasured each period until settlement, future volatility in our stock price will continue to result in non-cash impact to earnings.
We reported Adjusted EBITDA with Tax Attributes (as defined in Note 10 — “Segments and Related Information” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements”) of $50.1 million in the first quarter 2026 versus $55.0 million in the first quarter 2025. We used cash from operating activities of $86.2 million in the first quarter 2026 versus using cash from operating activities of $29.3 million in the first quarter of 2025.
Refer to Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures” for a reconciliation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes to Net income (loss), our most directly comparable financial performance measure calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”).
Specialty Products and Solutions segment Adjusted EBITDA was $44.3 million in the first quarter 2026 versus $56.3 million in the first quarter 2025. Compared to the prior period, Specialty Products and Solutions first quarter 2026 segment Adjusted EBITDA was negatively impacted by compressed margins driven by higher crude oil costs and reduced production at our Shreveport facility.
Montana/Renewables segment Adjusted EBITDA loss was $12.3 million in the first quarter 2026 versus loss of $13.6 million in the first quarter 2025. Montana/Renewables segment Adjusted EBITDA with Tax Attributes was $10.2 million in the first quarter 2026 compared to $3.3 million in the prior period. Compared to the prior year, Montana/Renewables segment Adjusted EBITDA with Tax Attributes was favorably impacted by improved margins on renewable fuel sales and a reduction in the carbon intensity (“CI”) of produced fuels. The CI improvements were achieved in part through the purchase of renewable electricity credits, which enhance the businesses’ CI score and supported higher net realizations under applicable credit and regulatory programs. This impact was partially offset by lower volumes as a result of the planned shutdown for the MaxSAF® 150 expansion project. Overall, the segment continued to benefit from operating cost improvements realized through prior year initiatives. As discussed above, EPA’s final Renewable Volume Obligation (“RVO”) has been received favorably by the market, contributing to improved market pricing for renewable fuels and related credit values. These conditions supported renewable fuel margins during the period and increased market confidence in industry fundamentals. Adjusted EBITDA in the legacy specialty asphalt business was largely flat, as gains in fuel margins were offset by weaker asphalt margins as a result from the lag in asphalt price increases during a period of rapidly rising crude oil prices.
Performance Brands segment Adjusted EBITDA was $12.6 million in the first quarter 2026 versus $15.8 million in the first quarter 2025, despite the prior year period including contributions from the divested Royal Purple Industrial
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business. Excluding the divested business, underlying margin performance improved, supported by stronger TruFuel results driven by stabilized input costs and resilient pricing. This segment continues to strengthen its position in consumer channels.
Liquidity Update
As of March 31, 2026, we had total liquidity of $462.8 million comprised of $138.6 million of unrestricted cash, $40.0 million of restricted cash and $284.2 million of availability under our credit facility. As of March 31, 2026, our revolving credit facility had a $425.7 million borrowing base, $46.3 million in outstanding standby letters of credit and $95.2 million of outstanding borrowings. We believe we will continue to have sufficient liquidity from cash on hand, projected cash flow from operations, borrowing capacity and other means by which to meet our financial commitments, debt service obligations, contingencies, and anticipated capital expenditures for at least the next 12 months. Refer to Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” for additional information.
Renewable Fuel Standard Update
Along with the broader refining industry, we remain subject to compliance costs under the RFS unless or until we receive a small refinery exemption from the EPA, which we have historically received. Administered by the EPA, the RFS provides annual requirements for the total volume of renewable transportation fuels that are mandated to be blended into finished transportation fuels. If a refiner does not meet its required annual Renewable Volume Obligation, the refiner can purchase blending credits in the open market, referred to as RINs.
During the first quarter 2026, we recorded a loss of $140.1 million for RINs in cost of sales in the unaudited condensed statements of operations, as compared to a loss of $97.4 million for RINs in the first quarter 2025. Our gross RINs Obligation, which includes RINs that are required to be secured through either our own blending or through the purchase of RINs in the open market, is spread across four compliance categories (D3, D4, D5 and D6). The gross RINs obligations may be satisfied by our own renewables blending, RIN purchases, or receipt of small refinery exemptions.
Expenses related to RFS compliance have the potential to remain a significant expense for our two segments containing fuels products. If legal or regulatory changes occur that have the effect of increasing our RINs Obligation or eliminating or narrowing the availability of the small refinery exemption under the RFS program, we could be required to purchase additional RINs in the open market, which may materially increase our costs related to RFS compliance and could have a material adverse effect on our results of operations and liquidity.
See Note 2 — “Summary of Significant Accounting Policies” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” in this Quarterly Report for further information on the Company’s RINs obligation.
Unrestricted Subsidiaries
See Note 12 — “Unrestricted Subsidiaries” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” in this Quarterly Report for further information regarding certain financial information of our unrestricted subsidiaries.
Key Performance Measures
Our sales and results of operations are principally affected by demand for specialty products, fuel product demand, renewable fuel product demand, global fuel crack spreads, the price of natural gas used as fuel in our operations, our ability to operate our production facilities at high utilization, and our results from derivative instrument activities.
Our primary raw materials are crude oil, renewable feedstocks, and other specialty feedstocks, and our primary outputs are specialty consumer-facing and industrial products, specialty branded products, fuel products, and renewable fuel products. The prices of crude oil, specialty products, fuel products, and renewable fuel products are subject to fluctuations
37
in response to changes in supply, demand, market uncertainties and a variety of factors beyond our control. We monitor these risks and from time-to-time enter into derivative instruments designed to help mitigate the impact of commodity price fluctuations on our business. The primary purpose of our commodity risk management activities is to economically hedge our cash flow exposure to commodity price risk. We also may hedge when market conditions exist that we believe to be out of the ordinary and particularly supportive of our financial goals. We enter into derivative contracts for future periods in quantities that do not exceed our projected purchases of crude oil and natural gas and sales of fuel and renewable fuel products. Refer to Note 7 — “Derivatives” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information.
Our management uses several financial and operational measurements to analyze our performance. These measurements include the following:
| ● | sales volumes; |
| ● | segment gross profit; |
| ● | segment Adjusted gross profit; |
| ● | segment Adjusted EBITDA; |
| ● | segment Adjusted EBITDA with Tax Attributes; and |
| ● | selling, general and administrative expenses. |
Sales volumes. We view the volumes of Specialty Products and Solutions products, Montana/Renewables products and Performance Brands products sold as an important measure of our ability to effectively utilize our operating assets. Our ability to meet the demands of our customers is driven by the volumes of feedstocks that we run at our facilities. Higher volumes typically improve profitability both through the spreading of fixed costs over greater volumes and the additional gross profit achieved on the incremental volumes.
Segment gross profit. Specialty Products and Solutions, Montana/Renewables and Performance Brands products’ gross profit are important measures of profitability of our segments. We define gross profit as sales less the cost of crude oil and other feedstocks, LCM/LIFO adjustments, and other production-related expenses, the most significant portion of which includes labor, plant fuel, utilities, contract services, maintenance, transportation, RINs, depreciation and amortization and processing materials. We use gross profit as an indicator of our ability to manage margins in our business over the long term. The increase or decrease in selling prices typically lags behind the rising or falling costs, respectively, of feedstocks throughout our business. Other than plant fuel, RINs mark-to-market adjustments, and LCM/LIFO adjustments, production related expenses generally remain stable across broad ranges but can fluctuate depending on maintenance activities performed during a specific period.
Segment Adjusted gross profit. Specialty Products and Solutions, Montana/Renewables and Performance Brands products segment Adjusted gross profit measures are useful as they exclude transactions not related to our core cash operating activities and provide metrics to analyze the profitability of the core cash operations of our segments. We define segment Adjusted gross profit as segment gross profit excluding the impact of (a) LCM inventory adjustments; (b) the impact of liquidation of inventory layers calculated using the LIFO method; (c) RINs mark-to-market adjustments; (d) RINs incurrence expense; (e) depreciation and amortization; and (f) all extraordinary, unusual or non-recurring items of revenue or cost of sales.
Segment Adjusted EBITDA and Segment Adjusted EBITDA with Tax Attributes. We believe that Specialty Products and Solutions, Montana/Renewables and Performance Brands segment Adjusted EBITDA and Adjusted EBITDA with Tax Attributes measures are useful as they exclude transactions not related to our core cash operating activities and provide metrics to analyze our ability to pay interest to our noteholders. Adjusted EBITDA and Adjusted EBITDA with Tax Attributes allows us to meaningfully analyze the trends and performance of our core cash operations as well as to make decisions regarding the allocation of resources to segments. Corporate Adjusted EBITDA primarily reflects general and administrative costs.
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Results of Operations for the Three Months Ended March 31, 2026 and 2025
Production Volume. The following table sets forth information about our continuing operations after giving effect to the elimination of all intercompany activity. Facility production volume differs from sales volume due to changes in inventories and the sale of purchased blendstocks such as ethanol and specialty blendstocks, as well as the resale of crude oil.
Three Months Ended March 31, | ||||||||
2026 | | 2025 | % Change | |||||
(In bpd) | ||||||||
Total sales volume (1) | 87,028 |
| 85,547 | 1.7 | % | |||
Facility production: | |
| | |||||
Specialty Products and Solutions: | |
| | |||||
Lubricating oils | 12,331 |
| 11,368 | 8.5 | % | |||
Solvents | 7,250 |
| 7,528 | (3.7) | % | |||
Waxes | 1,418 |
| 1,142 | 24.2 | % | |||
Fuels, asphalt and other by-products | 34,622 |
| 34,451 | 0.5 | % | |||
Total Specialty Products and Solutions | 55,621 |
| 54,489 | 2.1 | % | |||
Montana/Renewables: | |
| | |||||
Gasoline | 4,205 |
| 3,706 | 13.5 | % | |||
Diesel | 3,157 |
| 2,494 | 26.6 | % | |||
Jet fuel | 308 |
| 417 | (26.1) | % | |||
Asphalt, heavy fuel oils and other | 3,617 |
| 3,750 | (3.5) | % | |||
Renewable fuels | 7,853 | 9,932 | (20.9) | % | ||||
Total Montana/Renewables | 19,140 |
| 20,299 | (5.7) | % | |||
Performance Brands | 1,724 |
| 1,618 | 6.6 | % | |||
Total facility production | 76,485 |
| 76,406 | 0.1 | % | |||
| (1) | Total sales volume includes sales from the production at our facilities and certain third-party facilities pursuant to supply and/or processing agreements, sales of inventories and the resale of crude oil and other finished products to third-party customers. Total sales volume includes the sale of purchased blendstocks. |
39
The following table reflects our unaudited condensed consolidated results of operations and includes the non-GAAP financial measures EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes. For a reconciliation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes to Net income (loss), our most directly comparable financial performance measure calculated and presented in accordance with GAAP, refer to “— Non-GAAP Financial Measures.”
| Three Months Ended March 31, | ||||||
2026 | | 2025 | |||||
| |||||||
Sales | $ | 1,029.7 | $ | 993.9 | |||
Cost of sales |
| 1,117.2 |
| 1,075.3 | |||
Gross profit (loss) |
| (87.5) |
| (81.4) | |||
Operating costs and expenses: |
| |
| | |||
Selling |
| 12.3 |
| 12.3 | |||
General and administrative |
| 66.0 |
| 12.1 | |||
Gain on sale of business |
| — |
| (62.2) | |||
Other operating expense |
| 5.5 |
| 5.1 | |||
Operating income (loss) |
| (171.3) |
| (48.7) | |||
Other income (expense): |
| |
| | |||
Interest expense |
| (51.1) |
| (58.5) | |||
Debt extinguishment costs | (1.7) |
| (47.6) | ||||
Loss on derivative instruments |
| (115.4) |
| (7.2) | |||
Other income |
| 1.7 |
| 0.4 | |||
Total other expense |
| (166.5) |
| (112.9) | |||
Net loss before income taxes |
| (337.8) |
| (161.6) | |||
Income tax (benefit) expense |
| (20.8) |
| 0.4 | |||
Net loss | $ | (317.0) | $ | (162.0) | |||
EBITDA | $ | (253.8) | $ | (66.0) | |||
Adjusted EBITDA | $ | 27.6 | $ | 38.1 | |||
Adjusted EBITDA with Tax Attributes | $ | 50.1 | $ | 55.0 | |||
Non-GAAP Financial Measures
We include in this Quarterly Report the non-GAAP financial measures EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes. We provide reconciliations of EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes to Net income (loss), our most directly comparable financial performance measure.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes are used as supplemental financial measures by our management and by external users of our financial statements such as investors, commercial banks, research analysts and others, to assess:
| ● | the financial performance of our assets without regard to financing methods, capital structure or historical cost basis; |
| ● | the ability of our assets to generate cash sufficient to pay interest costs and support our indebtedness; |
| ● | our operating performance and return on capital as compared to those of other companies in our industry, without regard to financing or capital structure; and |
| ● | the viability of acquisitions and capital expenditure projects and the overall rates of return on alternative investment opportunities. |
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We believe that these non-GAAP measures are useful to analysts and investors as they exclude transactions not related to our core cash operating activities and provide metrics to analyze our ability to pay interest to our noteholders. However, the indentures governing our senior notes contain covenants that, among other things, restrict our ability to pay dividends. We believe that excluding these transactions allows investors to meaningfully analyze trends and performance of our core cash operations.
We define EBITDA for any period as net income (loss) plus interest expense (including amortization of debt issuance costs), income taxes and depreciation and amortization. We believe net income (loss) is the most directly comparable GAAP measure to EBITDA.
We define Adjusted EBITDA for any period as EBITDA adjusted for (a) impairment; (b) unrealized gains and losses from mark-to-market accounting for hedging activities; (c) realized gains and losses under derivative instruments excluded from the determination of net income (loss); (d) non-cash equity-based compensation expense and other non-cash items (excluding items such as accruals of cash expenses in a future period or amortization of a prepaid cash expense) that were deducted in computing net income (loss); (e) debt refinancing fees, extinguishment costs, premiums and penalties; (f) any net gain or loss realized in connection with an asset sale that was deducted in computing net income (loss); (g) amortization of turnaround costs; (h) LCM inventory adjustments; (i) the impact of liquidation of inventory layers calculated using the LIFO method; (j) RINs mark-to-market adjustments; (k) RINs incurrence expense; and (l) all extraordinary, unusual or non-recurring items of gain or loss, or revenue or expense.
We define Adjusted EBITDA Margin as Adjusted EBITDA divided by sales.
We define Adjusted EBITDA with Tax Attributes for any period as Adjusted EBITDA plus the notional value of CFPCs, less the difference between the notional value of any CFPCs sold and the amount realized from such sales during the period.
The definition of Adjusted EBITDA presented in this Quarterly Report is similar to the calculation of “Consolidated Cash Flow” contained in the indentures governing our Senior Notes (as defined in this Quarterly Report) and the calculation of “Consolidated EBITDA” contained in the Credit Agreement. We are required to report Consolidated Cash Flow to the holders of our Senior Notes and Consolidated EBITDA to the lenders under our revolving credit facility, and these measures are used by them to determine our compliance with certain covenants governing those debt instruments. Refer to Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” in this Quarterly Report for additional details regarding the covenants governing our debt instruments.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes should not be considered alternatives to Net income (loss) or Operating income (loss) or any other measure of financial performance presented in accordance with GAAP. In evaluating our performance as measured by EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes, management recognizes and considers the limitations of these measurements. EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes do not reflect our liabilities for the payment of income taxes, interest expense or other obligations such as capital expenditures. Accordingly, EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes are only three of several measurements that management utilizes. Moreover, our definition of EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes may not be comparable to similarly titled measures of another company because all companies may not calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes in the same manner.
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The following table presents a reconciliation of Net income (loss), our most directly comparable GAAP financial performance measure to EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes for each of the periods indicated (in millions).
| Three Months Ended March 31, | | |||||
| 2026 | | 2025 | | |||
| |||||||
Reconciliation of Net income (loss) to EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes |
| |
|
| |||
Net loss | $ | (317.0) | $ | (162.0) | |||
Add: |
| |
| | |||
Interest expense |
| 51.1 |
| 58.5 | |||
Depreciation and amortization |
| 32.9 |
| 37.1 | |||
Income tax (benefit) expense |
| (20.8) |
| 0.4 | |||
EBITDA | $ | (253.8) | $ | (66.0) | |||
Add: |
| |
| | |||
LCM / LIFO gain | $ | (26.2) | $ | (0.1) | |||
Unrealized (gain) loss on derivative instruments |
| 102.7 |
| (0.1) | |||
Debt extinguishment costs |
| 1.7 |
| 47.6 | |||
Amortization of turnaround costs |
| 8.5 |
| 9.6 | |||
Gain on sale of business |
| — |
| (62.2) | |||
RINs incurrence expense |
| 31.5 |
| 30.4 | |||
RINs mark-to-market loss |
| 115.9 |
| 86.8 | |||
Equity-based compensation and other items |
| 44.7 |
| (13.5) | |||
Other |
| 0.5 |
| 3.2 | |||
Noncontrolling interest adjustments |
| 2.1 |
| 2.4 | |||
Adjusted EBITDA | $ | 27.6 | $ | 38.1 | |||
Tax attributes (1) | 22.5 |
| 16.9 | ||||
Adjusted EBITDA with Tax Attributes | $ | 50.1 | $ | 55.0 | |||
| (1) | Tax attribute amounts reflect 100% of the notional value of CFPCs generated for each respective period presented less any discounts on the sale of CFPCs. The CFPCs can be realized by applying the credits to the Company’s federal income tax liability or sold in a secondary market at a discounted rate. |
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The following table presents a reconciliation of Montana/Renewables Segment Net income (loss), our most directly comparable GAAP financial performance measure to Montana/Renewables Segment Adjusted EBITDA and Montana/Renewables Segment Adjusted EBITDA with Tax Attributes for each of the periods indicated unaudited (in millions).
Three Months Ended March 31, | ||||||
| 2026 | 2025 | ||||
Reconciliation of Montana/Renewables Segment Net income (loss) to Segment Adjusted EBITDA and Segment Adjusted EBITDA with Tax Attributes: | ||||||
Montana/Renewables Segment Net loss | $ | (45.4) | $ | (153.5) | ||
Add: |
| |
| | ||
Depreciation and amortization | $ | 21.9 | $ | 27.9 | ||
LCM / LIFO gain |
| (7.6) |
| (0.7) | ||
Interest expense |
| 14.3 |
| 18.3 | ||
Debt extinguishment costs |
| — |
| 47.6 | ||
RINs incurrence expense |
| 6.9 |
| 8.1 | ||
RINs mark-to-market loss |
| 17.9 |
| 26.1 | ||
Other |
| 0.6 |
| 4.6 | ||
Equity-based compensation and other items | — | 5.6 | ||||
Income tax benefit |
| (23.0) |
| — | ||
Noncontrolling interest adjustments |
| 2.1 |
| 2.4 | ||
Montana/Renewables Segment Adjusted EBITDA | $ | (12.3) | $ | (13.6) | ||
Tax attributes (1) |
| 22.5 |
| 16.9 | ||
Montana/Renewables Segment Adjusted EBITDA with Tax Attributes | $ | 10.2 | $ | 3.3 | ||
| (1) | Tax attribute amounts reflect 100% of the notional value of CFPCs generated for each respective period presented less any discounts on the sale of CFPCs. The CFPCs can be realized by applying the credits to the Company’s federal income tax liability or sold in a secondary market at a discounted rate. |
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Changes in Results of Operations for the Three Months Ended March 31, 2026 and 2025
Sales. Sales increased $35.8 million, or 3.6%, to $1,029.7 million in the three months ended March 31, 2026, from $993.9 million in the same period in 2025. Sales for each of our principal product categories in these periods were as follows:
| Three Months Ended March 31, | ||||||||
2026 | | 2025 | | % Change | |||||
(In millions, except barrel and per barrel data) | |||||||||
Sales by segment: | |||||||||
Specialty Products and Solutions: | |||||||||
Lubricating oils | $ | 191.8 | $ | 202.2 |
| (5.1) | % | ||
Solvents |
| 107.9 |
| 104.7 |
| 3.1 | % | ||
Waxes |
| 39.8 |
| 38.2 |
| 4.2 | % | ||
Fuels, asphalt and other by-products (1) |
| 365.5 |
| 305.0 |
| 19.8 | % | ||
Total Specialty Products and Solutions | $ | 705.0 | $ | 650.1 |
| 8.4 | % | ||
Total Specialty Products and Solutions sales volume (in barrels) |
| 5,869,000 |
| 5,372,000 |
| 9.3 | % | ||
Average Specialty Products and Solutions sales price per barrel | $ | 120.12 | $ | 121.02 |
| (0.7) | % | ||
Montana/Renewables: |
| |
| |
| | |||
Gasoline | $ | 34.6 | $ | 32.5 |
| 6.5 | % | ||
Diesel |
| 31.4 |
| 23.4 |
| 34.2 | % | ||
Jet Fuel |
| 4.8 |
| 4.2 |
| 14.3 | % | ||
Asphalt, heavy fuel oils and other (2) |
| 22.8 |
| 36.0 |
| (36.7) | % | ||
Renewable fuels | 142.2 | 165.6 | (14.1) | % | |||||
Total Montana/Renewables | $ | 235.8 | $ | 261.7 |
| (9.9) | % | ||
Total Montana/Renewables sales volume (in barrels) |
| 1,797,000 |
| 2,173,000 |
| (17.3) | % | ||
Average Montana/Renewables sales price per barrel | $ | 131.22 | $ | 120.43 |
| 9.0 | % | ||
Performance Brands: | |||||||||
Total Performance Brands (3) | $ | 88.9 | $ | 82.1 |
| 8.3 | % | ||
Total Performance Brands sales volume (in barrels) |
| 167,000 |
| 154,000 |
| 8.4 | % | ||
Average Performance Brands sales price per barrel | $ | 532.34 | $ | 533.12 |
| (0.1) | % | ||
Total sales | $ | 1,029.7 | $ | 993.9 |
| 3.6 | % | ||
Total sales volume (in barrels) |
| 7,833,000 |
| 7,699,000 |
| 1.7 | % | ||
| (1) | Represents (a) by-products, including fuels and asphalt, produced in connection with the production of specialty products at the Shreveport, Princeton, Cotton Valley, Dickinson and Karns City facilities, and (b) polyol ester synthetic lubricants produced at the Missouri facility. |
| (2) | Represents asphalt, heavy fuel oils and other products produced in connection with the production of fuels at the Montana specialty asphalt facility. |
| (3) | Represents packaged and synthetic specialty products at our Porter, Texas and Shreveport, Louisiana packaging facilities. |
44
The components of the $54.9 million increase in Specialty Products and Solutions segment sales for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, were as follows (in millions):
| Dollar Change | ||
Volume | $ | 60.1 | |
Sales price | (5.2) | ||
Total Specialty Products and Solutions segment sales increase | $ | 54.9 | |
Specialty Products and Solutions segment sales increased period over period, driven primarily by higher sales volumes despite our Shreveport facility operations being suspended across significant portions of the plant during the current quarter as a precaution to protect our employees and equipment following the discovery of organic chlorides in feedstock tanks.
The components of the $25.9 million decrease in Montana/Renewables segment sales for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, were as follows (in millions):
| Dollar Change | ||
Volume | $ | (45.4) | |
Sales price | 19.5 | ||
Total Montana/Renewables segment sales decrease | $ | (25.9) | |
Montana/Renewables segment sales declined during the current year period as a result of a planned outage to support the MaxSAF® 150 expansion project. Despite lower volumes, improved renewable fuel prices favorably impacted results and partially mitigated the effect of reduced sales volumes in comparison to the prior year period.
The components of the $6.8 million increase in Performance Brands segment sales for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, were as follows (in millions):
| Dollar Change | ||
Volume | $ | 7.1 | |
Sales price | (0.3) | ||
Total Performance Brands segment sales increase | $ | 6.8 | |
Performance Brands segment sales increased period over period, driven by strong sales volumes, despite the prior year period including contributions from the divested Royal Purple Industrial business.
45
Gross Profit (Loss). Gross profit (loss) decreased $6.1 million to gross loss of $87.5 million in the three months ended March 31, 2026, from gross profit (loss) of $81.4 million in the same period in 2025. Gross profit (loss) for our business segments were as follows:
| Three Months Ended March 31, | ||||||||
2026 | | 2025 | | % Change | |||||
| (Dollars in millions, except per barrel data) | ||||||||
Gross profit by segment: | |||||||||
Specialty Products and Solutions: | |||||||||
Gross profit (loss) | $ | (62.9) | $ | (34.0) |
| 85.0 | % | ||
Percentage of sales |
| (8.9) | % |
| (5.2) | % | (3.7) | % | |
Specialty Products and Solutions gross profit per barrel | $ | (10.72) | $ | (6.33) |
| 69.3 | % | ||
Montana/Renewables: |
| |
| |
| | |||
Gross profit (loss) | $ | (45.6) | $ | (69.6) |
| (34.5) | % | ||
Percentage of sales |
| (19.4) | % |
| (26.6) | % | 7.2 | % | |
Montana/Renewables gross profit (loss) per barrel | $ | (25.38) | $ | (32.03) |
| (20.8) | % | ||
Performance Brands: |
| |
| |
| | |||
Gross profit | $ | 21.0 | $ | 22.2 |
| (5.4) | % | ||
Percentage of sales |
| 23.7 | % |
| 27.0 | % | (3.3) | % | |
Performance Brands gross profit per barrel | $ | 125.75 | $ | 144.16 |
| (12.8) | % | ||
Total gross profit (loss) | $ | (87.5) | $ | (81.4) |
| 7.5 | % | ||
Percentage of sales |
| (8.5) | % |
| (8.2) | % | (0.3) | % | |
The components of the $28.9 million decrease in Specialty Products and Solutions segment gross profit (loss) for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, were as follows (in millions):
| Dollar Change | ||
Three months ended March 31, 2025 reported gross profit (loss) | $ | (34.0) | |
Cost of materials |
| 5.9 | |
LCM / LIFO inventory adjustments |
| 18.1 | |
Volumes |
| 12.3 | |
Operating costs (excl. RINs) | (11.5) | ||
RINs |
| (48.6) | |
Sales price | (5.1) | ||
Three months ended March 31, 2026 reported gross profit (loss) | $ | (62.9) | |
The decrease in Specialty Products and Solutions segment gross profit (loss) for the three months ended March 31, 2026 as compared to the same period in 2025, was unfavorably impacted by RINs prices and higher operating costs, including increased natural gas pricing. These impacts were partially offset by the favorable impact from higher sales volumes.
46
The components of the $24.0 million increase in Montana/Renewables segment gross profit (loss) for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, were as follows (in millions):
Dollar Change | |||
Three months ended March 31, 2025 reported gross profit (loss) | $ | (69.6) | |
Cost of materials |
| (10.9) | |
LCM / LIFO inventory adjustments |
| 7.0 | |
Volumes |
| (3.8) | |
RINs | 5.9 | ||
Operating costs (excl. RINs) |
| 6.3 | |
Sales price |
| 19.5 | |
Three months ended March 31, 2026 reported gross profit (loss) | $ | (45.6) | |
The increase in Montana/Renewables segment gross profit (loss) for the three months ended March 31, 2026, as compared to the prior period, was driven by favorable sales pricing, which was partially offset by the impact of lower sales volumes resulting from a planned outage to complete the MaxSAF® 150 expansion project and higher material costs. In addition, operating costs resulting in a favorable benefit, reflective of continued operating cost discipline from initiative implemented throughout the prior calendar year.
The components of the $1.2 million decrease in Performance Brands segment gross profit (loss) for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, were as follows (in millions):
| Dollar Change | ||
Three months ended March 31, 2025 reported gross profit | $ | 22.2 | |
Sales price |
| (0.3) | |
Operating costs |
| (0.7) | |
LCM / LIFO inventory adjustments |
| 1.0 | |
Volume |
| 2.7 | |
Cost of materials |
| (3.9) | |
Three months ended March 31, 2026 reported gross profit | $ | 21.0 | |
Performance Brands segment gross profit (loss) for the three months ended March 31, 2026, as compared to the prior period, was essentially flat. The favorable impact from higher sales volumes, despite the prior year period including contributions from the divested Royal Purple Industrial business, was off-set by the impact of higher input costs.
General and administrative. General and administrative expenses increased $53.9 million, to $66.0 million in the three months ended March 31, 2026 from $12.1 million in the same period in 2025. The increase was due primarily to a $58.8 million increase in stock-based compensation related expenses as a result of an increase in the Company’s stock price in the current year period, as compared to a decrease in the Company’s stock price in the prior year period. This impact was partially offset by a $3.1 million decrease in professional services fees.
Gain on sale of business. There was a $62.2 million gain on sale of business in the prior year period for the sale of assets related to the industrial portion of our the Royal Purple® business. There was no gain or loss for the sale of a business recorded in the current year period. Refer to Note 2 — “Summary of Significant Accounting Policies” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information related to the sale of assets related to the industrial portion of the Royal Purple® business.
Liquidity and Capital Resources
General
The following should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” included under Part II, Item 7 in our 2025 Annual Report. There have been no material changes in that information other than as discussed below. Also, see Note 5 — “Inventory
47
Financing Agreements” and Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” in this Quarterly Report for additional discussions related to our Supply and Offtake Agreements and our long-term debt.
Cash Flows from Operating, Investing and Financing Activities
We believe that we have sufficient liquid assets, cash flow from operations, borrowing capacity and adequate access to capital markets to meet our financial commitments, debt service obligations and anticipated capital expenditures for at least the next 12 months. We continue to seek to lower our operating costs, selling expenses and general and administrative expenses as a means to further improve our cash flow from operations with the objective of having our cash flow from operations support all of our capital expenditures and interest payments. However, we are subject to business and operational risks that could materially adversely affect our cash flows. A material decrease in our cash flow from operations including a significant, sudden decrease in crude oil prices would likely produce a corollary effect on our borrowing capacity under our revolving credit facility and potentially our ability to comply with the covenants under our revolving credit facility. A significant, sudden increase in crude oil prices, if sustained, would likely result in increased working capital requirements which would be funded by borrowings under our revolving credit facility. In addition, our cash flow from operations may be impacted by the timing of settlement of our derivative activities. Gains and losses from derivative instruments that do not qualify as cash flow hedges are recorded in unrealized gain (loss) on derivative instruments until settlement and will impact operating cash flow in the period settled.
The following table summarizes our primary sources and uses of cash in each of the periods presented:
Three Months Ended March 31, | |||||||
| 2026 | | 2025 | | |||
|
| | |||||
Net cash used in operating activities | $ | (86.2) | $ | (29.3) | |||
Net cash provided by (used in) investing activities |
| (13.7) |
| 77.8 | |||
Net cash provided by financing activities |
| 73.4 |
| 109.0 | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | (26.5) | $ | 157.5 | |||
Operating Activities. Operating activities used cash of $86.2 million during the three months ended March 31, 2026 compared to using cash of $29.3 million during the same period in 2025. This change was primarily related to an increase in our accounts receivable of $125.4 million, partially offset by an increase in accounts payable and other working capital changes as our cash flows adjust to the increase in commodity prices.
Investing Activities. Investing activities used cash of $13.7 million during the three months ended March 31, 2026 compared to providing cash of $77.8 million during the same period in 2025. The change is related to the net proceeds received for the sale of the Royal Purple Industrial business in the prior year period. Cash expenditures for additions to property, plant and equipment in the current period were less than the prior period as a result of lower replacement capital expenditure requirements.
Financing Activities. Financing activities provided cash of $73.4 million in the three months ended March 31, 2026 compared to providing cash of $109.0 million during the same period in 2025. The change is primarily due to the borrowings we received in the current year period from the 2031 Notes partially offset by payments we made in the current period to repay the 2026 Notes and 2027 Notes. Cash provided by financing activities in the prior period primarily consisted of borrowings we received from the DOE Loan and 2028 Mirror Issuance Notes, offset by the payments we made to repay outstanding borrowings under the revolving credit agreement, repurchase the equipment associated with the MRL Asset Financing Arrangements, repay the outstanding loans under the MRL Term Loan Credit Agreement and MRL Revolving Credit Agreement, and repay the outstanding obligations under the MRL Supply and Offtake Agreement.
Capital Expenditures
Our property, plant and equipment capital expenditure requirements consist of capital improvement expenditures, replacement capital expenditures, environmental capital expenditures and turnaround capital expenditures. Capital
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improvement expenditures include the acquisition of assets to grow our business, facility expansions, or capital initiatives that reduce operating costs. Replacement capital expenditures replace worn out or obsolete equipment or parts. Environmental capital expenditures include asset additions to meet or exceed environmental and operating regulations. Turnaround capital expenditures represent capitalized costs associated with our periodic major maintenance and repairs.
The following table sets forth our capital improvement expenditures, replacement capital expenditures, environmental capital expenditures and turnaround capital expenditures in each of the periods shown, including capitalized interest (in millions):
Three Months Ended March 31, | |||||||
| 2026 | | 2025 | | |||
Capital improvement expenditures | $ | 11.3 | $ | 4.1 | |||
Replacement capital expenditures |
| 1.9 |
| 12.3 | |||
Environmental capital expenditures |
| — |
| 1.2 | |||
Turnaround capital expenditures |
| 1.8 |
| 2.8 | |||
Total | $ | 15.0 | $ | 20.4 | |||
2026 Capital Spending Forecast
We are forecasting total capital expenditures of approximately $130.0 million to $160.0 million in 2026. Our forecasted capital expenditures are primarily related to maintenance and reliability projects and capital expenditures associated with MaxSAF®. We anticipate that capital expenditure requirements for the MaxSAF® project will be funded by MRL, an unrestricted subsidiary of the Company, through cash flows from operations, cash on hand and borrowings under the DOE Facility. We anticipate that capital expenditure requirements for our restricted subsidiaries group will be provided primarily through cash flows from operations, cash on hand, and by available borrowings under our revolving credit facility. If future capital expenditures require amounts in excess of our then-current cash flow from operations and borrowing availability under our revolving credit facility, we may be required to issue debt or equity securities in public or private offerings or incur additional borrowings under bank credit facilities to meet those costs.
Debt and Credit Facilities
As of March 31, 2026, our primary debt and credit instruments consisted of the following:
| ● | $500.0 million senior secured revolving credit facility maturing in January 2031 (after giving effect to the amendments to our revolving credit facility (the “Credit Facility Amendments”)), subject to borrowing base limitations, with a maximum letter of credit sub-limit equal to $255.0 million, which amount may be increased to 90% of revolver commitments in effect with the consent of the Agent (as defined in the Credit Agreement) (“revolving credit facility”); |
| ● | $555.0 million of 9.75% Senior Notes due 2031 (“2031 Notes”); |
| ● | $200.0 million of 9.25% Senior Secured First Lien Notes due 2029 (“2029 Secured Notes”); |
| ● | $325.0 million of 9.75% Senior Notes due 2028 (“2028 Notes”); |
| ● | $100.0 million of 9.75% Senior Notes due 2028 (“2028 Mirror Issuance Notes”); |
| ● | $825.2 million of borrowings under our DOE Loan; |
| ● | $113.7 million of financing through our Shreveport terminal asset financing arrangement; |
| ● | $19.3 million of financing through our Montana terminal asset financing arrangement; and |
| ● | $140.8 million of financing through our Montana refinery asset financing arrangement. |
We were in compliance with all covenants under the debt instruments in place as of March 31, 2026 and believe we have adequate liquidity to conduct our business.
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On January 23, 2026, the Company entered into the Ninth Amendment to the Third Amended and Restated Credit Agreement. The Ninth Amendment amended the Credit Agreement. Among other changes, the Ninth Amendment modified the Credit Agreement to (i) extend the maturity date to January 23, 2031, (ii) provide for commitments of $500.0 million, subject to borrowing base limitations, (iii) revise certain covenants, representations and warranties, events of default and other terms to permit the Company or one or more of its subsidiaries to consummate one or more new inventory financing transactions, subject in each case to the Company’s satisfaction of certain customary conditions and (iv) provide for a reduction of commitments under the Credit Agreement from $500.0 million to $425.0 million if any such inventory financing transaction is consummated. See Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information.
On January 12, 2026, the Issuers issued and sold $405.0 million aggregate principal amount of 2031 Notes in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act. The Company subsequently redeemed all of the 2026 Notes and all of the 2027 Notes in January 2026.
On March 17, 2026, the Issuers issued and sold $150.0 million aggregate principal amount of additional 2031 Notes (the “Additional Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act. The Company used the net proceeds from the offering of the Additional Notes to repay borrowings outstanding under the Company’s revolving credit facility. See Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information.
The borrowing base on our credit facility decreased from approximately $455.6 million as of March 31, 2025, to approximately $425.7 million at March 31, 2026. Our borrowing availability decreased from approximately $339.3 million at March 31, 2025, to approximately $284.2 million at March 31, 2026. Total liquidity, consisting of unrestricted cash, restricted cash and available funds under our credit facility, decreased from $542.7 million at March 31, 2025 to $462.8 million at March 31, 2026.
Inventory Financing
Refer to Note 5 — “Inventory Financing Agreements” in Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information regarding our Supply and Offtake Agreement.
Short-Term Liquidity
As of March 31, 2026, our principal sources of short-term liquidity were (i) $284.2 million of availability under our credit facility, (ii) an inventory financing agreement related to our Shreveport facility, (iii) $138.6 million of unrestricted cash on hand, and (iv) $40.0 million of restricted cash. Borrowings under our revolving credit facility can be used for, among other things, working capital, capital expenditures and other lawful partnership purposes including acquisitions. For additional information regarding our revolving credit facility, see Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” in this Quarterly Report.
Long-Term Financing
In addition to our principal sources of short-term liquidity listed above, subject to market conditions, we may meet our cash requirements through the issuance of long-term notes or additional common shares.
From time to time, we issue long-term debt securities referred to as our senior notes. Our outstanding senior notes are unsecured obligations that rank equally with all of our other senior debt obligations to the extent they are unsecured. As of March 31, 2026, we had $325.0 million in 2028 Notes, $100.0 million in 2028 Mirror Issuance Notes, $200.0 million in 2029 Secured Notes, and $555.0 million in 2031 Notes outstanding. In addition, as of March 31, 2026, we had $825.2 million of debt outstanding for the DOE Loan, $113.7 million of other debt outstanding for the Shreveport terminal asset financing arrangement, $19.3 million of other debt outstanding for the Montana terminal asset financing arrangement, and $140.8 million of other debt outstanding for the Montana refinery asset financing arrangement. Borrowings under the DOE Loan are obligations of our unrestricted subsidiaries MRL and MRHL solely, and are non-recourse to the Company and its restricted subsidiaries.
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To date, our debt balances have not adversely affected our operations, our ability to repay or refinance our indebtedness. Based on our historical record, we believe that our capital structure will continue to allow us to achieve our business objectives.
For additional information regarding our senior notes, refer to Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” in this Quarterly Report and Note 9 — “Long-Term Debt” in Part II, Item 8 “Financial Statements and Supplementary Data” of our 2025 Annual Report.
Master Derivative Contracts and Collateral Trust Agreement
For additional discussion regarding our master derivative contracts and collateral trust agreement, see “Master Derivative Contracts and Collateral Trust Agreement” under Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 Annual Report.
Critical Accounting Estimates
For additional discussion regarding our critical accounting estimates, see “Critical Accounting Estimates” under Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 Annual Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks from adverse changes in commodity prices, the price of credits needed to comply with governmental programs, interest rates and foreign currency exchange rates. Information relating to quantitative and qualitative disclosures about material market risk is set forth below.
Commodity Price Risk
Derivative Instruments
We are exposed to price risks due to fluctuations in the price of crude oil, refined products, renewable products, feedstocks, natural gas and precious metals. We use various strategies to reduce our exposure to commodity price risk. We do not attempt to eliminate all of our risk as the costs of such actions are believed to be too high in relation to the risk posed to our future cash flows, earnings and liquidity. The strategies we use to reduce our risk utilize both physical forward contracts and financially settled derivative instruments, such as swaps, collars, options and futures, to attempt to reduce our exposure with respect to:
| ● | crude oil and renewable feedstock purchases and sales; |
| ● | refined and renewable fuel product sales and purchases; |
| ● | natural gas purchases; |
| ● | precious metals; and |
| ● | fluctuations in the value of crude oil between geographic regions and between the different types of crude oil such as NYMEX WTI, Light Louisiana Sweet, WCS, WTI Midland, Mixed Sweet Blend, Magellan East Houston and ICE Brent. |
We manage our exposure to commodity markets, credit, volumetric and liquidity risks to manage our costs and volatility of cash flows as conditions warrant or opportunities become available. These risks may be managed in a variety of ways that may include the use of derivative instruments. Derivative instruments may be used for the purpose of mitigating risks associated with an asset, liability and anticipated future transactions and the changes in fair value of our derivative instruments will affect our earnings and cash flows; however, such changes should be offset by price or rate
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changes related to the underlying commodity or financial transaction that is part of the risk management strategy. We do not speculate with derivative instruments or other contractual arrangements that are not associated with our business objectives. Speculation is defined as increasing our natural position above the maximum position of our physical assets or trading in commodities, currencies or other risk bearing assets that are not associated with our business activities and objectives. Our positions are monitored routinely by a risk management committee and discussed with the board of directors of the Company quarterly to ensure compliance with our stated risk management policy and documented risk management strategies. All strategies are reviewed on an ongoing basis by our risk management committee, which will add, remove or revise strategies in anticipation of changes in market conditions and/or in risk profiles. These changes in strategies are to position us in relation to our risk exposures in an attempt to capture market opportunities as they arise.
Refer to Note 7 — “Derivatives” in the notes to our unaudited condensed consolidated financial statements under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for a discussion of the accounting treatment for the various types of derivative instruments, for a further discussion of our hedging policies and for more information relating to our implied crack spreads of crude oil, diesel, and gasoline derivative instruments.
Our derivative instruments and overall hedging positions are monitored regularly by our risk management committee, which includes executive officers. The risk management committee reviews market information and our hedging positions regularly to determine if additional derivatives activity is advised. A summary of derivative positions and a summary of hedging strategy are presented to our Board of Directors quarterly.
Compliance Price Risk
Renewable Identification Numbers
We are exposed to market risks related to the volatility in the price of credits needed to comply with governmental programs. The EPA sets annual volume obligations for the percentage of renewable fuels that must be blended into transportation fuels consumed in the U.S., and as a producer of transportation fuels from petroleum, we are subject to those obligations. To the extent we are unable to physically blend renewable fuels to satisfy the EPA requirement, we may purchase RINs in the open market to satisfy the annual obligations. We have not entered into any derivative instruments to manage this risk.
Holding other variables related to RINs obligations constant, a $1.00 increase in the price of RINs would be expected to have a negative impact on Net income (loss) of approximately $65 million per year.
Interest Rate Risk
Our exposure to interest rate changes on fixed and variable rate debt is limited to the fair value of the debt issued, which would not have a material impact on our earnings or cash flows. The following table provides information about the fair value of our fixed and variable rate debt obligations as of March 31, 2026 and December 31, 2025, which we
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disclose in Note 6 — “Long-Term Debt” and Note 8 — “Fair Value Measurements” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements.”
March 31, 2026 | December 31, 2025 | |||||||||||
| Fair Value | | Carrying Value | | Fair Value | | Carrying Value | |||||
Financial Instrument: | ||||||||||||
2026 Notes, 2027 Notes, 2028 Notes, 2028 Mirror Issuance Notes, 2029 Secured Notes and 2031 Notes | $ | 1,233.4 | $ | 1,166.2 | $ | 1,083.7 | $ | 1,065.5 | ||||
Senior secured revolving credit facility | $ | 95.2 | $ | 88.8 | $ | 94.6 | $ | 93.0 | ||||
DOE Loan | $ | 825.2 | $ | 805.6 | $ | 815.4 | $ | 795.5 | ||||
Shreveport terminal asset financing arrangement | $ | 113.7 | $ | 111.4 | $ | 116.1 | $ | 113.7 | ||||
Montana terminal asset financing arrangement | $ | 19.3 | $ | 19.2 | $ | 22.5 | $ | 22.4 | ||||
Montana refinery asset financing arrangement | $ | 140.8 | $ | 139.6 | $ | 142.7 | $ | 141.5 | ||||
Finance lease obligations | $ | 1.2 | $ | 1.2 | $ | 1.9 | $ | 1.9 | ||||
For our variable rate debt, if any, changes in interest rates generally do not impact the fair value of the debt instrument but may impact our future earnings and cash flows. We had a $500.0 million revolving credit facility as of March 31, 2026, with borrowings for the revolving credit facility bearing interest at the prime rate or SOFR, at our option, plus the applicable margin. We had $95.2 million of outstanding variable rate debt as of March 31, 2026 and $94.6 million of outstanding variable rate debt as of December 31, 2025. Holding other variables constant (such as debt levels), a 100 basis point change in interest rates on our variable rate debt as of March 31, 2026, would be expected to have an impact on Net income (loss) of approximately $1.0 million per year.
Foreign Currency Risk
We have minimal exposure to foreign currency risk and as such the cost of hedging this risk is viewed to be in excess of the benefit of further reductions in our exposure to foreign currency exchange rate fluctuations.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2026.
Changes in Internal Control over Financial Reporting
No changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended March 31, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II
Item 1. Legal Proceedings
We may, from time to time, be involved in litigation related to claims arising out of our operations in the ordinary course of business. Please read Note 2 — “Summary of Significant Accounting Policies” and Note 4 — “Commitments and Contingencies” in Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements,” which is incorporated herein by reference.
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report, you should carefully consider the risks discussed in Part I, Item 1A “Risk Factors” in our 2025 Annual Report. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. There have been no material changes in the risk factors discussed in Part I, Item 1A “Risk Factors” in our 2025 Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(c) Trading Plans
During the three months ended March 31, 2026, no director or officer of the Company
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Item 6. Exhibits
Exhibit Number | | Description |
Form of 9.75% Senior Notes due 2031 (included in Exhibit 4.1). | ||
Section 1350 certification of Todd Borgmann and David Lunin. | ||
100.INS* | Inline XBRL Instance Document | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104* | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in Inline XBRL (included within the Exhibit 101 attachments) |
*Filed herewith.
**Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CALUMET, INC. | |||
Date: May 8, 2026 | By: | /s/ David Lunin | |
David Lunin | |||
Executive Vice President and Chief Financial Officer | |||
(Authorized Person and Principal Financial Officer) | |||
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