[10-Q] Calumet, Inc. /DE Quarterly Earnings Report
Calumet, Inc. reported a strong turnaround in Q3 2025. Sales were $1,078.0 million and gross profit jumped to $373.7 million. Operating income reached $322.9 million, and net income was $313.4 million (basic and diluted EPS $3.61), compared with a loss a year ago. For the first nine months, sales were $3,098.5 million and net income was $3.5 million.
Cash and cash equivalents were $94.6 million, with $80.0 million of restricted cash. Total assets were $2,733.9 million and total liabilities were $3,183.6 million, leaving stockholders’ equity at $(695.3) million. The RINs obligation stood at $133.0 million, down from $245.4 million at year-end.
Calumet closed the sale of assets related to the industrial portion of its Royal Purple business, receiving $95.4 million in cash and recording a $55.8 million gain. Financing cash flows included $781.8 million of proceeds from a DOE Loan. As of November 10, 2025, 86,754,321 common shares were outstanding.
- Q3 profitability reversal: Net income of $313.4 million vs. prior-year loss, with operating income at $322.9 million.
- RINs obligation reduced: Current RINs liability of $133.0 million vs. $245.4 million at year-end.
- Portfolio action: $95.4 million cash proceeds and $55.8 million gain from sale of industrial Royal Purple assets.
- Capital structure risk: Total liabilities of $3,183.6 million exceed assets of $2,733.9 million; stockholders’ equity at $(695.3) million.
Insights
Q3 profitability surged; balance sheet still leveraged.
Calumet delivered a sharp earnings swing in Q3 2025: sales were
Cash rose with period-end cash and restricted cash totaling
Leverage remains a consideration: total liabilities of
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
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(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)
Securities Registered Pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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☒ |
| Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | ||
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
On November 10, 2025, the registrant had
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CALUMET, INC.
QUARTERLY REPORT
For the Three and Nine Months Ended September 30, 2025
Table of Contents
Page | |
Part I | |
Item 1. Financial Statements | 4 |
Calumet, Inc. | 4 |
Unaudited Condensed Consolidated Balance Sheets | 4 |
Unaudited Condensed Consolidated Statements of Operations | 5 |
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) | 6 |
Unaudited Condensed Consolidated Statements of Stockholders' Equity | 7 |
Unaudited Condensed Consolidated Statements of Cash Flows | 9 |
Notes to Unaudited Condensed Consolidated Financial Statements | 10 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 45 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 69 |
Item 4. Controls and Procedures | 71 |
Part II | |
Item 1. Legal Proceedings | 73 |
Item 1A. Risk Factors | 73 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 74 |
Item 3. Defaults Upon Senior Securities | 74 |
Item 4. Mine Safety Disclosures | 74 |
Item 5. Other Information | 74 |
Item 6. Exhibits | 75 |
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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 meet our financial commitments, debt service obligations, debt instrument covenants, contingencies and anticipated capital expenditures; (vi) 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; (vii) our access to inventory financing under our supply and offtake agreements; (viii) the effect, impact, potential duration or other implications of supply chain disruptions and global energy shortages on our business and operations; (ix) 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 and the Middle East and their regional and global ramifications); (x) the future effectiveness of our enterprise resource planning system to further enhance operating efficiencies and provide more effective management of our business operations; (xi) our expectation regarding our business outlook with respect to the Montana Renewables business; (xii) an inability to remediate the material weakness in our internal control over financial reporting or additional material weaknesses or other deficiencies in the future or the failure to maintain an effective system of internal controls; (xiii) the expected benefits of the Conversion (as defined herein) to us and our stockholders; and (xiv) our expectation that the DOE Loan (as defined herein) will enable MRL (as defined herein) to complete the MaxSAFTM construction on time and on budget, 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. 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, 2024 (“2024 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. and its subsidiaries before the completion of 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 Calumet Specialty Products Partners, L.P.
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PART I
Item 1. Financial Statements
CALUMET, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2025 | December 31, 2024 |
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ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | | $ | | |||
Restricted cash |
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Accounts receivable, net: | |||||||
Trade, less allowance for credit losses of $ |
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Other |
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Inventories |
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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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Obligations under inventory financing agreements |
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Current portion of RINs obligation |
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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 | $ | | $ | | |||
Stockholders' equity: |
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Common stock: par value $ | $ | | $ | | |||
Additional paid-in capital | | | |||||
Warrants: | | | |||||
Accumulated deficit |
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Accumulated other comprehensive loss |
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Total stockholders' equity |
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Total liabilities and stockholders' equity | $ | | $ | | |||
See accompanying notes to unaudited condensed consolidated financial statements.
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CALUMET, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
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Sales | $ | | $ | | $ | | $ | | |||||
Cost of sales | |
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Gross profit | |
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Operating costs and expenses: | |||||||||||||
Selling | |
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General and administrative | |
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(Gain) loss on sale of business | |
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Other operating expense | |
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Operating income (loss) | |
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Other income (expense): |
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Interest expense | ( |
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Debt extinguishment costs | |
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Gain (loss) on derivative instruments | ( |
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Other income (expense) | |
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Total other expense | ( |
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Net income (loss) before income taxes | |
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Income tax (benefit) expense | ( |
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Net income (loss) | $ | | $ | ( | $ | | $ | ( | |||||
Earnings per share: |
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Basic and diluted | $ | | $ | ( | $ | | $ | ( | |||||
Weighted average number of common shares outstanding: |
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Basic and diluted |
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See accompanying notes to unaudited condensed consolidated financial statements.
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CALUMET, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
| 2025 |
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(In millions) | |||||||||||||
Net income (loss) | $ | | $ | ( | $ | | $ | ( | |||||
Other comprehensive income: | |||||||||||||
Defined benefit pension and retiree health benefit plans |
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Total other comprehensive income |
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Comprehensive income (loss) attributable to stockholders' equity | $ | | $ | ( | $ | | $ | ( | |||||
See accompanying notes to unaudited condensed consolidated financial statements.
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CALUMET, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Accumulated | |||||||||||||||||||||
Common Stock | Other | ||||||||||||||||||||
Common | Shares Issued | Additional | Accumulated | Comprehensive | |||||||||||||||||
Shares | Par Value | Paid-in Capital | Warrants | Deficit | Loss | Total | |||||||||||||||
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Balance at June 30, 2025 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | ||||||||
Other comprehensive income | — | — | — | — | — | | | ||||||||||||||
Net income |
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Settlement of tax withholdings on equity-based incentive compensation |
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Settlement of restricted stock units |
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Balance at September 30, 2025 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | ||||||||
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 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | ||||||||
Other comprehensive income | — | — | — | — | — | | | ||||||||||||||
Net income |
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Settlement of tax withholdings on equity-based incentive compensation |
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Settlement of restricted stock units |
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Balance at September 30, 2025 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | ||||||||
| Accumulated | |||||||||||||||||||||||||||
Partners' Capital (Deficit) | Common Stock | Other | ||||||||||||||||||||||||||
| Limited Partner | Limited | General | Common | Shares Issued | Additional | Accumulated | Comprehensive | ||||||||||||||||||||
Units |
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Balance at June 30, 2024 | | $ | ( | $ | ( | — | $ | — | $ | — | $ | — | $ | — | $ | ( | $ | ( | ||||||||||
C-Corp Conversion (1) | ( | | | | | | — |
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Issuance of common shares | — | — | — | | | ( | — |
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Issuance of warrants | — | — | — | — | — | ( | |
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Other comprehensive income | — | — | — | — | — | — | — |
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Net loss | — | — | — | — | — | — | — |
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Settlement of tax withholdings on equity-based incentive compensation | — | — | — | — | — | — | — |
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Settlement of restricted stock units | — | — | — | | — | | — |
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Balance at September 30, 2024 | — | $ | — | $ | — | | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | ||||||||||
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| Accumulated | |||||||||||||||||||||||||||
Partners' Capital (Deficit) | Common Stock | Other | ||||||||||||||||||||||||||
| Limited Partner | Limited | General | Common | Shares Issued | Additional | Accumulated | Comprehensive | ||||||||||||||||||||
Units |
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(In millions) | ||||||||||||||||||||||||||||
Balance at December 31, 2023 | | $ | ( | $ | | — | $ | — | $ | — | $ | — | $ | — | $ | ( | $ | ( | ||||||||||
Settlement of tax withholdings on equity-based incentive compensation | — | ( | — | — | — | — | — |
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Settlement of phantom units | | | — | — | — | — | — |
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C-Corp Conversion (1) | ( | | ( | | | | — |
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Issuance of common shares | — | — | — | | | ( | — |
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Issuance of warrants | — | — | — | — | — | ( | |
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Other comprehensive income | — | — | — | — | — | — | — |
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Net loss | — | — | — | — | — | — | — |
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Settlement of tax withholdings on equity-based incentive compensation | — | — | — | — | — | ( | — |
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Settlement of restricted stock units | — | — | — | | — | | — |
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Balance at September 30, 2024 | — | $ | — | $ | — | | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | ||||||||||
| (1) |
See accompanying notes to unaudited condensed consolidated financial statements.
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CALUMET, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, | |||||||
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(In millions) | |||||||
Operating activities | |||||||
Net income (loss) | $ | | $ | ( | |||
Non-cash RINs gain |
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Unrealized (gain) loss on derivative instruments |
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Other adjustments to reconcile net income (loss) to cash flow from operating activities |
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Changes in assets and liabilities | ( | ( | |||||
Net cash used in operating activities |
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Investing activities |
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Additions to property, plant and equipment |
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Proceeds from sale of business, net | | — | |||||
Net cash provided by (used in) investing activities |
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Financing activities |
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Proceeds from borrowings — revolving credit facility |
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Repayments of borrowings — revolving credit facility |
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Proceeds from borrowings — MRL revolving credit agreement | | | |||||
Repayments of borrowings — MRL revolving credit agreement | ( | ( | |||||
Proceeds from borrowings — senior notes |
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Repayments of borrowings — senior notes |
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Proceeds from inventory financing |
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Payments on inventory financing |
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Proceeds from DOE Loan |
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Proceeds from other financing obligations |
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Repayments of borrowings - MRL Asset Financing Arrangements |
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Repayments of borrowings - MRL Term Loan Credit Agreement |
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Payments on other financing obligations |
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Net cash provided by financing activities |
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Net increase in cash, cash equivalents and restricted cash |
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Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period | $ | | $ | | |||
Cash and cash equivalents | $ | | $ | | |||
Restricted cash | $ | | $ | | |||
Supplemental disclosure of cash flow information |
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Interest paid, net of capitalized interest | $ | | $ | | |||
Supplemental disclosure of non-cash investing activities |
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Non-cash property, plant and equipment additions | $ | | $ | | |||
See accompanying notes to unaudited condensed consolidated financial statements.
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CALUMET, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Description of the Business
On July 10, 2024, Calumet, Inc., a Delaware corporation (the “Company” or “Calumet”), completed the transactions contemplated by a Conversion Agreement, dated February 9, 2024 (as amended, the “Conversion Agreement”), among the Company, Calumet Specialty Products Partners, L.P. (the “Partnership”), Calumet GP, LLC, the general partner of the Partnership (the “General Partner”), Calumet Merger Sub I LLC (“Merger Sub I”), Calumet Merger Sub II LLC (“Merger Sub II”) and the other parties thereto, including The Heritage Group (collectively, the “Sponsor Parties”), as amended by the First Amendment to the Conversion Agreement, dated April 17, 2024 (such transactions, the “Conversion” or the “C-Corp Conversion”).
Pursuant to the Conversion Agreement, among other things:
| ● | Merger Sub II merged with and into the Partnership, with the Partnership continuing as the surviving entity and a wholly owned subsidiary of the Company, and all of the common units representing limited partner interests in the Partnership (“Common Units”) were exchanged into the right to receive an equal number of shares of Common Stock (the “Partnership Merger”); and |
| ● | Merger Sub I merged with and into the General Partner, with the General Partner continuing as the surviving entity and a wholly owned subsidiary of the Company, and all outstanding equity interests of the General Partner were exchanged into the right to receive an aggregate of |
On July 10, 2024, the Company issued (i) approximately
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.
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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.
Restricted cash as of September 30, 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.
Restricted cash as of December 31, 2024 represented cash that was restricted under the Montana Renewables, LLC (“MRL”) Term Loan Credit Agreement because it was only available to make principal and interest payments under the terms of the agreement.
Renewable Identification Numbers (“RINs”) Obligation
The Company’s RINs volume obligation (“RVO” or “RINs Obligation”) is an estimated provision if future purchase of RINs were to be required in order to satisfy the U.S. Environmental Protection Agency’s (“EPA”) requirement to blend renewable fuels into certain transportation fuel products pursuant to the Renewable Fuel Standard (“RFS”) of the Clean Air Act (“CAA”). The Company has historically not been obligated to make these purchases. A RIN is a 38-character number assigned to each physical gallon of renewable fuel produced in or imported into the United States. The EPA sets annual volume obligations for the percentage of renewable fuels that must be blended into transportation fuels consumed in the U.S. Compliance is demonstrated by tendering RINs to the EPA documenting that blending has been accomplished or by obtaining a Small Refinery Exemption (“SRE”) as provided in the Clean Air Act. Prior to 2018, the Company historically received the SRE. In 2022, EPA changed its approach and began denying all industry hardship petitions including the Company’s. As explained below, the D.C. Circuit found EPA’s changed approach to be unlawful. EPA has since reaffirmed its original decisions on Calumet’s 2018 hardship petitions, issued new decisions on Calumet’s 2019-2023 hardship petitions, and issued a decision on the 2024 petitions for the first time.
The RVO is a quantity and cannot be settled financially with EPA. The Company accounts for its current period RVO by multiplying the quantity of RINs shortage (based on actual results) by the period end RINs spot price, which is recorded as a current liability in the unaudited condensed consolidated balance sheets and revalued at the end of each subsequent accounting period, which produces non-cash mark-to-market adjustments that are reflected in cost of sales in the unaudited condensed consolidated statements of operations. RINs generated by blending may be sold or held to offset a portion of the following year’s RVO. Any gains or losses from RINs sales are recorded in cost of sales in the unaudited condensed consolidated statements of operations.
2018 RVO. In April 2022, EPA issued blanket decisions denying 36 petitions from small refineries seeking SREs for program year 2018. EPA had previously granted 31 of these 36 petitions in August 2019, including petitions from the Company. Concurrent with the April 2022 denial action, EPA provided an alternate compliance approach to allow these 31 small refineries to meet their 2018 compliance obligations without purchasing or retiring additional RINs. In April 2022, the Company filed a petition for review of EPA’s denial of the 2018 SRE petition for the Shreveport refinery in the U.S. Court of Appeals for the Fifth Circuit. In June 2022, the Company filed a petition for review of EPA’s denial of the 2018 SRE petition for the Montana refinery in the U.S. Court of Appeals for the D.C. Circuit challenging EPA’s denials of both the Shreveport and Montana refineries’ petitions. These 2018 RVO cases were consolidated with the 2019-2020 RVO cases described below.
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2019-2020 RVO. In June 2022, EPA issued final decisions denying 69 pending petitions from small refineries seeking SREs for program years 2016 to 2021, including petitions submitted by the Company for program years 2019 and 2020, based on EPA’s across-the-board determination that no small refinery suffers disproportionate economic hardship from the RFS program, a contention which was subsequently rejected by the Government Accountability Office. In August 2022, the Company filed a petition for review of EPA’s denial of the 2019 and 2020 SRE petitions for the Shreveport refinery in the U.S. Court of Appeals for the Fifth Circuit and for the Montana refinery in the U.S. Court of Appeals for the D.C. Circuit challenging both of EPA’s denials. These 2019-2020 cases were consolidated with the program year 2018 cases.
In November 2023, the Fifth Circuit issued its decision and concluded that venue was proper in the Fifth Circuit and that EPA’s denial of the Shreveport refinery’s petitions for program years 2018-2020 was unlawful. The Fifth Circuit vacated EPA’s denials and remanded the petitions to EPA.
In July 2024, the D.C. Circuit issued its decision and concluded that EPA’s denial of the Montana Refinery’s petitions for program years 2018-2020 was unlawful. The D.C. Circuit vacated EPA’s denial and remanded the petitions to EPA.
EPA filed a petition for writ of certiorari with the U.S. Supreme Court with respect to only the venue portion of the Fifth Circuit’s decision. On June 18, 2025, the Supreme Court ruled that elements of EPA’s April and June 2022 denials, which included program years 2018-2020, triggered the “nationwide scope or effect” exception to regional circuit court venue in the Clean Air Act. As a result, the Supreme Court held that the D.C. Circuit is the proper venue for the challenge to EPA’s denial of the Shreveport refinery’s petitions for 2018-2020 program years. The Supreme Court vacated the Fifth Circuit’s decision and remanded the Shreveport refinery’s case to the Fifth Circuit. The Fifth Circuit transferred the case to the D.C. Circuit in accordance with the Supreme Court’s decision. We expect the D.C. Circuit to dismiss the case in light of EPA’s August 2025 decisions (described below) reaffirming its original decision on the Shreveport refinery’s 2018 hardship petition and issuing new decisions on the Shreveport refinery’s 2019-2020 hardship petitions.
2021-2022 RVO. In October 2022, Calumet applied for SREs for the 2021 and 2022 program years. In July 2023, EPA issued final decisions denying 26 pending petitions from small refineries seeking SREs for program years 2016 to 2023, including the 2021 and 2022 petitions for the Montana and Shreveport refineries, based on the same approach and analysis described by EPA in its June 2022 denials. The Company filed petitions for review of the denials with the Fifth Circuit and D.C. Circuit and filed motions asking those courts to stay the Company’s 2021 and 2022 RFS obligations. In September 2023, the Fifth Circuit granted the Company’s motion for stay of the Shreveport refinery’s 2021 and 2022 RFS obligations while the case is pending; and in October 2023, the D.C. Circuit granted the Company’s motion for stay of the Montana refinery’s 2021 and 2022 RFS obligations. The D.C. Circuit then vacated EPA’s denials of the Montana refinery’s 2021 and 2022 petitions and remanded the petitions back to EPA, following its own ruling on the 2019-2020 petitions. Due to EPA’s August 2025 decisions (described below) on the Shreveport refinery’s 2021-2022 hardship petitions, we expect the government to seek dismissal of the litigation still pending in the Fifth and. D.C. Circuits relating to the prior 2021 and 2022 denials.
2023 RVO. In December 2023, Calumet applied for SREs for the 2023 program year. In July 2024, the Company filed for injunctive relief in both the District Court of Montana and the Western District Court of Louisiana to force EPA to make a decision on those outstanding 2023 SRE petitions. The courts ruled in favor of the Company and set a deadline for EPA to act. In January 2025, EPA denied the Company’s 2023 SRE petitions. Calumet challenged the denials in the Fifth Circuit and the Ninth Circuit for Shreveport and Montana, respectively. Both courts have stayed Calumet’s 2023 RFS obligations while the challenges are pending. EPA acknowledged in writing that its January 2025 decisions on the Company’s petitions for the 2023 program year were locally applicable, so the proper venue for the Shreveport and Montana challenges is the Fifth and Ninth Circuits, respectively.
2024-2025 RVO and EPA’s August 2025 SRE Decisions. In June 2024, Calumet applied for SREs for the 2024 and 2025 program years. In August 2025, EPA issued a new round of hardship decisions, in which it reaffirmed the original grants of Calumet’s 2018 hardship petitions, issued new decisions on Calumet’s 2019-2023 hardship petitions, and decided Calumet’s 2024 petitions for the first time. For the Shreveport refinery, EPA granted full relief for the 2019-2021 program years and
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retire any RINs for the years for which Calumet received full relief and must retire RINs meeting
In September 2025, Calumet filed petitions for review in the D.C. Circuit of EPA’s decisions on the Shreveport refinery’s 2022-2024 petitions and the Montana refinery’s 2023-2024 petitions. The judicial stays previously granted by the Fifth Circuit to the Shreveport refinery for program years 2022 and 2023 and by the Ninth Circuit to the Montana refinery for program year 2023 currently remain in place. In October 2025, EPA sent a communication to Calumet that confirmed EPA does not intend to seek enforcement while Calumet’s SRE petition for a particular RVO is still pending, or while judicial review of such an exemption decision is pending. EPA indicated that if the litigation resolves in EPA’s favor, Calumet will have a reasonable time to meet any outstanding RVOs by completing the necessary RIN retirements and compliance reporting. In its communication, EPA stated that, where companies challenging SRE petition decisions have not prevailed in court, but have thereafter demonstrated compliance within a reasonable time after the compliance deadline, EPA has found no need for any additional action. In light of EPA’s communication, we have decided not to seek a judicial stay from the D.C. Circuit at this time.
Expenses related to RFS compliance have the potential to remain a significant expense for the Specialty Products and Solutions and Montana/Renewables segments. If legal or regulatory changes occur that have the effect of increasing the RINs Obligation, increasing the market price of RINs, or eliminating or narrowing the availability of SREs, the Company could be required to purchase additional RINs in the open market, which may materially increase the costs related to RFS compliance and could have a material adverse effect on the results of operations and liquidity.
As of September 30, 2025 and December 31, 2024, the Company had a RINs Obligation recorded on the unaudited condensed consolidated balance sheets of $
C-Corp Conversion
As described in Note 1 — “Description of the Business,” on the closing date of the C-Corp Conversion, the Company issued (i) approximately
Refer to Note 12 — “Income Taxes” for additional information regarding income tax considerations resulting from the C-Corp Conversion.
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 $
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gain or loss on disposal. The Company has recorded the estimated consideration based on information available as of the reporting date. Final amounts will be recognized when determinable and may differ from current estimates. The Company used the sale proceeds to reduce its indebtedness.
Recently Adopted Accounting Standards
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Improvements to Reportable Segment Disclosures.” This ASU requires, among other updates, enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker, as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. Refer to Note 11 — “Segments and Related Information” for additional information related to our reportable segments, including disclosure of significant segment expenses.
Recently Issued Accounting Pronouncements – Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures.” This ASU amends existing income tax disclosure guidance, primarily requiring more detailed disclosures for income taxes paid and the effective tax rate reconciliation. This ASU is effective for fiscal years beginning after December 15, 2024, may be applied prospectively or retrospectively, and allows for early adoption. The Company is currently evaluating the impact this update will have on its income tax disclosures in the consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses.” This ASU requires companies to disclose more detailed information about specified categories of expenses included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods beginning after December 15, 2027, and may be adopted on a prospective or retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact this ASU will have on our disclosures.
3. Revenue Recognition
The following is a description of principal activities from which the Company generates revenue. Revenues are recognized when control of the promised goods are transferred to the customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods promised within each contract and determines the performance obligations and assesses whether each promised good is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
Products
The Company manufactures, formulates, and markets a diversified slate of specialty branded products to customers in various consumer-facing and industrial markets. In addition, the Company produces fuel and fuel related products, including gasoline, diesel, jet fuel, asphalt, and other fuels products. At our Montana Renewables facility, we process a variety of geographically advantaged renewable feedstocks into renewable fuels, including: renewable diesel, sustainable aviation fuel (“SAF”), renewable hydrogen, renewable natural gas, renewable propane, and renewable naphtha. These renewable fuels are distributed into renewable markets in the western half of North America. The Company also blends, packages, and markets high-performance branded specialty products through its Royal Purple, Bel-Ray, and TruFuel brands.
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The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. For each contract, the Company considers the promise to transfer products, each of which are distinct, to be the identified performance obligations. In determining the transaction price, the Company evaluates whether the price is subject to variable consideration such as product returns, rebates, or other discounts to determine the net consideration to which the Company expects to be entitled. The Company transfers control and recognizes revenue upon shipment to the customer or, in certain cases, upon receipt by the customer in accordance with contractual terms.
Revenue is recognized when obligations under the terms of a contract with a customer are satisfied and control of the promised goods are transferred to the customer. The contract with the customer states the final terms of the sale, including the description, quantity, and price of each product or service purchased. For fuel products, payment is typically due in full between
Excise and Sales Taxes
The Company assesses, collects and remits excise taxes associated with the sale of certain of its fuel products. Furthermore, the Company collects and remits sales taxes associated with certain sales of its products to non-exempt customers. The Company excludes excise taxes and sales taxes that are collected from customers from the transaction price in its contracts with customers. Accordingly, revenue from contracts with customers is net of sales-based taxes that are collected from customers and remitted to taxing authorities.
Shipping and Handling Costs
Shipping and handling costs are deemed to be fulfillment activities rather than a separate distinct performance obligation.
Cost of Obtaining Contracts
The Company may incur incremental costs to obtain a sales contract, which under ASC 606 should be capitalized and amortized over the life of the contract. The Company has elected to apply the practical expedient in ASC 340-40-50-5 allowing the Company to expense these costs since the contracts are short-term in nature with a contract term of one year or less.
Contract Balances
Under product sales contracts, the Company invoices customers for performance obligations that have been satisfied, at which point payment is unconditional. Accordingly, a product sales contract does not give rise to contract assets or liabilities under ASC 606. The Company’s receivables, net of allowance for expected credit losses from contracts with customers as of September 30, 2025 and December 31, 2024 and 2023 were $
Transaction Price Allocated to Remaining Performance Obligations
The Company’s product sales are short-term in nature with a contract term of one year or less. The Company has utilized the practical expedient in ASC 606-10-50-14 exempting the Company from disclosure of the transaction price
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allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. Additionally, each unit of product generally represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required.
4. Inventories
The cost of inventory is recorded using the
For the three and nine months ended September 30, 2025 and 2024, the Company sold inventory comprised of crude oil, refined products, and renewable feedstocks under Supply and Offtake Agreements as described in Note 6 — “Inventory Financing Agreements” related to the Shreveport and Montana Renewables facilities.
Inventories consist of the following (in millions):
September 30, 2025 |
| December 31, 2024 | ||||||||||||||||
|
| Supply and |
|
|
| Supply and |
| |||||||||||
Titled | Offtake | Titled | Offtake | |||||||||||||||
Inventory | Agreements (1) | Total | Inventory | Agreements (1) | Total | |||||||||||||
Raw materials | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Work in process |
| |
| |
| |
| |
| |
| | ||||||
Finished goods |
| |
| |
| |
| |
| |
| | ||||||
$ | | $ | | $ | | $ | | $ | | $ | | |||||||
| (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 September 30, 2025 and 2024, the Company recorded an increase in cost of sales in the unaudited condensed consolidated statements of operations for LCM of $
5. 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
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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 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.
Occupational Health and Safety
The Company is subject to various laws and regulations relating to occupational health and safety, including the federal Occupational Safety and Health Act, as amended, and comparable state laws. These laws and regulations strictly govern the protection of the health and safety of employees. In addition, OSHA’s hazard communication standard, the EPA’s community right-to-know regulations under Title III of the federal Comprehensive Environmental Response, Compensation and Liability Act, as amended, and similar state statutes require the Company to maintain information about hazardous materials used or produced in the Company’s operations and provide this information to employees, contractors, state and local government authorities, and customers. The Company maintains safety and training programs as part of its ongoing efforts to promote compliance with applicable laws and regulations. The Company conducts periodic audits of process safety management systems at each of its locations subject to this standard. The Company’s compliance with applicable health and safety laws and regulations has required, and continues to require, substantial expenditures. Changes in occupational safety and health laws and regulations or a finding of non-compliance with current laws and regulations could result in additional capital expenditures or operating expenses, as well as civil penalties and, in the event of a serious injury or fatality, criminal charges.
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 of its 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
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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.
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 September 30, 2025 and December 31, 2024, the Company had outstanding standby letters of credit of $
Throughput Contract
Prior to 2020, the Company entered into a long-term agreement to transport crude oil at a minimum of
As of September 30, 2025, the estimated minimum unconditional purchase commitments, including the capital recovery charge, under the agreement were as follows (in millions):
Year |
| Commitment | |
2025 | $ | | |
2026 |
| | |
2027 |
| | |
2028 |
| | |
Thereafter |
| | |
Total (1) | $ | | |
| (1) | As of September 30, 2025, the estimated minimum payments for the unconditional purchase commitments have been accrued and are included in other current liabilities and other long-term liabilities in the unaudited condensed consolidated balance sheets. This liability was accrued due to the fact that the contract was entered into to supply crude to a divested facility. |
6. 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. The Shreveport Supply and Offtake Agreement replaced the Company’s previous inventory financing agreement with Macquarie Group Limited (“Macquarie”), which terminated on January 17, 2024.
On September 30, 2024, in connection with the closing of the Montana Asset Financing Arrangement, the Company entered into the Second Amendment to the Monetization Master Agreement with J. Aron and the other parties thereto, in order to amend the Monetization Master Agreement, dated as of January 17, 2024 and permit the Montana Asset Financing Arrangement transaction. Refer to Note 7 — “Long-Term Debt” for additional information.
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On July 25, 2025, in connection with the Shreveport Terminal Asset Financing Arrangement, as defined below, the Company entered into the Third Amendment to the Monetization Master Agreement with J. Aron and the other parties thereto, to modify the Monetization Master Agreement to permit separately the indebtedness and liens arising from the Shreveport Terminal Asset Financing Arrangement. Refer to Note 7 — “Long-Term Debt” for additional information.
On October 3, 2023, 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) 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.
For the three months ended September 30, 2025 and 2024, the Company incurred an expense of $
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7. Long-Term Debt
Long-term debt consisted of the following (in millions):
| September 30, |
| December 31, | |||
2025 | 2024 | |||||
Borrowings under amended and restated senior secured revolving credit agreement with third-party lenders, interest payments quarterly, borrowings due January 2027, weighted average interest rates of | $ | | $ | | ||
Borrowings under amended secured MRL revolving credit agreement with third-party lender, interest payments quarterly, borrowings due November 2027, weighted average interest rate of | — | — | ||||
Borrowings under the 2026 Notes, interest at a fixed rate of |
| |
| | ||
Borrowings under the 2027 Notes, interest at a fixed rate of |
| |
| | ||
Borrowings under the 2028 Notes, interest at a fixed rate of | | | ||||
Borrowings under the 2028 Mirror Issuance Notes, interest at a fixed rate of | | — | ||||
Borrowings under the 2029 Secured Notes, interest at a fixed rate of | | | ||||
Borrowings under the DOE Loan | | — | ||||
MRL Term Loan Credit Agreement | — | | ||||
Shreveport terminal asset financing arrangement |
| |
| | ||
Montana terminal asset financing arrangement |
| |
| | ||
Montana refinery asset financing arrangement |
| |
| | ||
MRL asset financing arrangements |
| — |
| | ||
Finance lease obligations, at various interest rates, interest and principal payments monthly through June 2028 |
| |
| | ||
Less unamortized debt issuance costs (1) |
| ( |
| ( | ||
Less unamortized discounts |
| ( |
| ( | ||
Total debt | $ | | $ | | ||
Less current portion of long-term debt |
| |
| | ||
Total long-term debt | $ | | $ | | ||
| (1) |
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Senior Notes
On
On
On
On
On
On
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On
Senior Notes
The 2026 Notes, 2027 Notes, 2028 Notes, 2028 Mirror Issuance Notes, and the 2029 Secured 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 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 units; (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 September 30, 2025, the Partnership was
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 $
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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 for approximately $ |
| ● | repay in full the outstanding loans of approximately $ |
| ● | repay in full the outstanding loans of approximately $ |
| ● | repay in full the outstanding obligations of approximately $ |
Separately, the Company received $
Shreveport Terminal Asset Financing Arrangement
On July 25, 2025, Calumet Shreveport Refining, LLC (“Calumet Shreveport”), a subsidiary of the Company, entered into a Property Schedule No. 2 (“Property Schedule No. 2”) with Stonebriar, which supplements the Master Lease Agreement, dated as of February 12, 2021 (together with Property Schedule No. 2, the “Lease Agreement”), among Calumet Shreveport and Stonebriar. The Lease Agreement relates to a sale and leaseback transaction (the “Shreveport Terminal Asset Financing Arrangement”) whereby Calumet Shreveport sold and leased back certain of its property comprising the Shreveport refinery fuels terminal, truck rack and related piping and equipment for consideration of approximately $
Concurrently with the entry into the Lease Agreement, Calumet Shreveport and Stonebriar terminated Property Schedule No. 1, dated as of February 12, 2021 (“Property Schedule No. 1”), among Calumet Shreveport and Stonebriar. The Company applied approximately $
The Company has recorded the Shreveport Terminal Asset Financing Arrangement as a financial liability in the unaudited condensed consolidated balance sheets.
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 up to $
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remaining purchase price of $
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
On August 5, 2022, MRL, entered into Equipment Schedule No. 2 (the “Equipment Schedule”) and an Interim Funding Agreement (the “Funding Agreement”) with Stonebriar. The Equipment Schedule and the Funding Agreement each constitute a schedule under the Master Lease Agreement (the “Lease Agreement”) dated as of December 31, 2021 between MRL and Stonebriar. The Equipment Schedule provides that Stonebriar will purchase from and lease back to MRL a hydrocracker, intended to produce renewable diesel and related products, for a purchase price of $
On September 30, 2024, MRL entered into the Lease Amendment (the “MRL Lease Amendment”) with Stonebriar to amend Equipment Schedule No. 1, dated as of December 30, 2022, Equipment Schedule No. 2, dated as of August 5, 2022, and Equipment Schedule No. 3, dated as of September 29, 2023 (each, an “Equipment Schedule” and, collectively, the “Equipment Schedules”). Each Equipment Schedule sets forth lease terms that incorporate part of that certain Master Lease Agreement, dated as of December 31, 2021, by and among MRL and Stonebriar. The MRL Lease Amendment amended each Equipment Schedule to, among other changes, permit an additional early termination option contingent upon successful additional financing by MRL.
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 $
As of December 31, 2024, the Company recorded the MRL asset financing arrangements as a financial liability in the unaudited condensed consolidated balance sheets.
Fourth, Fifth, Sixth, Seventh, and Eighth Amendments to Third Amended and Restated Senior Secured Revolving Credit Facility
On
On July 10, 2024, in connection with the completion of the Conversion, the Company entered into the Fifth Amendment to the Credit Agreement to among other changes, (i) reflect the addition of the Company and the General Partner as additional borrowers under the Credit Agreement, (ii) reflect the addition of the Company and the General Partner as additional grantors of security interests in their respective assets that constitute Collateral (as defined in the Credit Agreement, as amended) to secure the obligations under the Credit Agreement and related documents, (iii) transition certain responsibilities from the Partnership to the Company, including to designate the Company as the successor Borrower Agent (as defined in the Credit Agreement, as amended), and (iv) replace Canadian Dealer Offered Rate, or CDOR, with Term Canadian Overnight Repo Rate Average, or Term CORRA, as an alternate currency rate for which Alternate Swingline Loans denominated in Canadian Dollars may be borrowed under the Credit Agreement (each as defined in the Credit Agreement, as amended), in each case, on the terms and conditions set forth in the Fifth Amendment.
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On September 30, 2024, in connection with the Montana Refinery Asset Financing Arrangement transaction, the Company entered into the Consent and Sixth Amendment (the “Sixth Amendment”) to the Credit Agreement. The Sixth Amendment amended the Credit Agreement to, among other changes, (i) permit the Montana Refinery Asset Financing Arrangement transaction, and (ii) to remove the Refinery Assets from the determination of the borrowing base under the Credit Agreement, on the terms and conditions set forth in the Sixth Amendment.
On January 6, 2025, the Company entered into the Seventh Amendment to the Credit Agreement to allow for permitted additional investments in Montana Renewables Holdings LLC (“MRHL”) not to exceed $
On July 25, 2025, in connection with the Shreveport Terminal Asset Financing Arrangement, the Company entered into the Eighth Amendment to the Third Amended and Restated Credit Agreement, to among other changes, modify the Credit Agreement to permit separately the indebtedness and liens arising from the Shreveport Terminal Asset Financing Arrangement.
The borrowing capacity at September 30, 2025, 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
Amendment No. 1 to MRL Revolving Credit Agreement
On
In connection with the funding of the first tranche under the DOE Facility, MRL terminated the MRL Revolving Credit Agreement and the Company recorded debt extinguishment costs of approximately $
Amendment No. 1 to MRL Term Loan Credit Agreement
On
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On July 3, 2024, MRL and MRHL entered into Amendment No. 1 and waiver (the “Amendment”) to the MRL Term Loan Credit Agreement. Pursuant to the Amendment, I Squared and Delaware Trust Company agreed to (i) waive MRL’s obligation to comply with the net total leverage ratio covenant under the MRL Term Loan Credit Agreement (the “Leverage Ratio Covenant”) for the quarter ended June 30, 2024 and (ii) amend the Leverage Ratio Covenant for the quarter ending September 30, 2024 to determine MRL’s compliance with the Leverage Ratio Covenant based on annualized EBITDA (as defined in the MRL Term Loan Credit Agreement) for such quarter rather than EBITDA for the 12-month period ending September 30, 2024.
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 $
Maturities of Long-Term Debt
As of September 30, 2025, principal payments on debt obligations and future minimum rentals on finance lease obligations are as follows (in millions):
Year |
| Maturity | |
2025 | $ | | |
2026 |
| | |
2027 |
| | |
2028 |
| | |
2029 |
| | |
Thereafter |
| | |
Total Principal Payments | $ | | |
Less: Unamortized debt issuance costs and debt discounts | ( | ||
Total debt | $ | | |
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8. Derivatives
The Company is exposed to price risks due to fluctuations in the price of crude oil, refined products, natural gas and precious metals. 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 purchases and sales; |
| ● | 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 September 30, 2025 and December 31, 2024, 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 6 — “Inventory Financing Agreements" for additional information.
The Company recognizes all derivative instruments at their fair values (refer to Note 9 — “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.
For the periods ended September 30, 2025 and December 31, 2024, the Company had no derivative instruments recorded as a net asset in the Company’s unaudited condensed consolidated balance sheets.
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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):
|
| September 30, 2025 |
| December 31, 2024 | ||||||||||||||||
Net Amounts | ||||||||||||||||||||
Gross | of Liabilities | Gross | Net Amounts | |||||||||||||||||
Amounts | Presented in | Amounts | of Liabilities | |||||||||||||||||
Gross | Offset in the | the | Gross | Offset in the | Presented in | |||||||||||||||
Amounts of | Consolidated | Consolidated | Amounts of | Consolidated | the | |||||||||||||||
Balance Sheet | Recognized | Balance | Balance | Recognized | Balance | Consolidated | ||||||||||||||
Location |
| Liabilities |
| Sheets |
| Sheets |
| Liabilities |
| Sheets |
| Balance Sheets | ||||||||
Derivative instruments not designated as hedges: | ||||||||||||||||||||
Specialty Products and Solutions segment: | ||||||||||||||||||||
Inventory financing obligation |
| Obligations under inventory financing agreements | $ | — | $ | | $ | | $ | — | $ | | $ | | ||||||
Total derivative instruments | $ | — | $ | | $ | | $ | — | $ | | $ | | ||||||||
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 and crude oil basis swaps that do not qualify 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.
The Company recorded the following gains (losses) in its unaudited condensed consolidated statements of operations for the three months ended September 30, 2025 and 2024 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 | |||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||
Type of Derivative |
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Specialty Products and Solutions segment: |
|
|
|
|
|
|
|
| ||||
Inventory financing obligation | $ | ( | $ | ( | $ | | $ | | ||||
Crack spread swaps |
| — |
| |
| — |
| ( | ||||
Montana/Renewables segment: |
|
|
|
|
|
|
|
| ||||
Inventory financing obligation |
| — |
| ( |
| — |
| — | ||||
Total | $ | ( | $ | | $ | | $ | | ||||
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The Company recorded the following gains (losses) in its unaudited condensed consolidated statements of operations for the nine months ended September 30, 2025 and 2024, 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 | |||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
Type of Derivative |
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Specialty Products and Solutions segment: |
|
|
|
|
|
|
|
| ||||
Inventory financing obligation | $ | ( | $ | ( | $ | | $ | | ||||
Crack spread swaps |
| — |
| |
| — |
| ( | ||||
Montana/Renewables segment: |
|
|
|
|
|
|
|
| ||||
Inventory financing obligation |
| ( |
| |
| — |
| — | ||||
Total | $ | ( | $ | ( | $ | | $ | | ||||
Derivative Positions
At September 30, 2025, the Company had
9. 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 |
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
Derivative Assets and Liabilities
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Commodity derivative instruments are measured at fair value using a market approach. To estimate the fair values of the Company’s commodity derivative instruments, the Company uses the forward rate, the strike price, contractual notional amounts, the risk-free rate of return and contract maturity. Various analytical tests are performed to validate the counterparty data. The fair values of the Company’s derivative instruments are adjusted for nonperformance risk and creditworthiness of the counterparty through the Company’s credit valuation adjustment (“CVA”). The CVA is calculated at the counterparty level utilizing the fair value exposure at each payment date and applying a weighted probability of the appropriate survival and marginal default percentages. The Company uses the counterparty’s marginal default rate and the Company’s survival rate when the Company is in a net asset position at the payment date and uses the Company’s marginal default rate and the counterparty’s survival rate when the Company is in a net liability position at the payment date.
Pension Assets
Pension assets are reported at fair value in the accompanying unaudited condensed consolidated financial statements. At September 30, 2025 and December 31, 2024, the Company’s investments associated with its pension plan consisted of (i) cash and cash equivalents, (ii) fixed income bond funds, (iii) mutual equity funds, and (iv) mutual balanced funds. The fixed income bond funds, mutual equity funds, and mutual balanced funds that are measured at fair value using a market approach based on quoted prices from national securities exchanges and are categorized in Level 1 of the fair value hierarchy. The fixed income bond funds, mutual equity funds, and mutual balanced funds that are measured at fair value using a market approach based on prices obtained from an independent pricing service are categorized in Level 2 of the fair value hierarchy.
Liability Awards
Stock-based compensation liability awards are awards that are currently expected to be settled in cash on their vesting dates, rather than in common shares (“Liability Awards”). The Liability Awards are categorized as Level 1 because the fair value of the Liability Awards is based on the Company’s quoted closing price per share as of each balance sheet date.
Precious Metals Obligations
The fair value of precious metals obligations is based upon unadjusted exchange-quoted prices and is, therefore, classified within Level 1 of the fair value hierarchy.
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Hierarchy of Recurring Fair Value Measurements
The Company’s recurring assets and liabilities measured at fair value were as follows (in millions):
| September 30, 2025 |
| December 31, 2024 | |||||||||||||||||||||
Level 1 |
| Level 2 |
| Level 3 |
| Total |
| Level 1 |
| Level 2 |
| Level 3 |
| Total | ||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Derivative assets: | ||||||||||||||||||||||||
Inventory financing obligation | $ | | $ | | $ | | $ | | $ | $ | $ | | $ | | ||||||||||
Total derivative assets | | | | | | | | | ||||||||||||||||
Pension plan investments | | | | | | | | | ||||||||||||||||
Total recurring assets at fair value | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Liabilities: |
|
|
|
|
|
|
|
| ||||||||||||||||
Precious metals obligations | $ | | $ | | $ | | $ | | $ | ( | $ | | $ | | $ | ( | ||||||||
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):
| Nine Months Ended September 30, |
| |||||
2025 | 2024 | ||||||
| |||||||
Fair value at January 1, | $ | | $ | ( | |||
Realized loss on derivative instruments |
| ( |
| ( | |||
Unrealized gain on derivative instruments |
| |
| | |||
Settlements |
| |
| | |||
Fair value at September 30, | $ | | $ | | |||
Total gain (loss) included in net income (loss) attributable to changes in unrealized gain (loss) relating to financial assets and liabilities held as of September 30, | $ | | $ | | |||
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, such as when there is evidence of impairment.
The Company assesses goodwill for impairment annually and whenever events or changes in circumstances indicate its carrying value may not be recoverable. The fair value of the reporting units is determined using the income approach. The income approach focuses on the income-producing capability of an asset, measuring the current value of the asset by calculating the present value of its future economic benefits such as cash earnings, cost savings, corporate tax structure and product offerings. Value indications are developed by discounting expected cash flows to their present value at a rate of return that incorporates the risk-free rate for the use of funds, the expected rate of inflation and risks associated with the reporting unit. These assets would generally be classified within Level 3, in the event that the Company were required to measure and record such assets at fair value within its unaudited condensed consolidated financial statements.
The Company periodically evaluates the carrying value of long-lived assets to be held and used, including definite-lived intangible assets and property, plant and equipment, when events or circumstances warrant such a review. Fair value is determined primarily using anticipated cash flows assumed by a market participant discounted at a rate commensurate with the risk involved and these assets would generally be classified within Level 3, in the event that the Company was required to measure and record such assets at fair value within its unaudited condensed consolidated financial statements.
The
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would generally be classified within Level 3 to record such warrants within Stockholders’ Equity in the unaudited condensed consolidated balance sheets.
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 September 30, 2025 and December 31, 2024, consists primarily of senior notes. The estimated fair value of the Company’s 2026 Notes, 2027 Notes, 2028 Notes, 2028 Mirror Issuance Notes, and 2029 Secured 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 revolving credit facility, MRL revolving credit agreement, DOE Loan, Shreveport terminal asset financing arrangement, MRL asset financing arrangements, MRL term loan credit agreement, Montana refinery asset financing arrangement, finance lease obligations and other obligations are classified as Level 3. Refer to Note 7 — “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):
| September 30, 2025 |
| December 31, 2024 | |||||||||||
Level | Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||
Financial Instrument: |
|
|
|
|
|
|
|
|
|
| ||||
2026 Notes, 2027 Notes, 2028 Notes, 2028 Mirror Issuance Notes, and 2029 Secured Notes |
| 2 | $ | | $ | | $ | | $ | | ||||
Revolving credit facility |
| 3 | $ | | $ | | $ | | $ | | ||||
MRL revolving credit agreement |
| 3 | $ | — | $ | — | $ | | $ | ( | ||||
MRL term loan credit agreement | 3 | $ | — | $ | — | $ | | $ | | |||||
DOE Loan |
| 3 | $ | | $ | | $ | | $ | — | ||||
Shreveport terminal asset financing arrangement |
| 3 | $ | | $ | | $ | | $ | | ||||
Montana terminal asset financing arrangement |
| 3 | $ | | $ | | $ | | $ | | ||||
Montana refinery asset financing arrangement |
| 3 | $ | | $ | | $ | | $ | | ||||
MRL asset financing arrangements |
| 3 | $ | — | $ | — | $ | | $ | | ||||
Finance leases and other obligations |
| 3 | $ | | $ | | $ | | $ | | ||||
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10. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share (in millions, except share and per share data):
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| |||||||||
2025 | 2024 | 2025 | 2024 | ||||||||||
Numerator for basic and diluted earnings per share: | |||||||||||||
Net income (loss) | $ | | $ | ( | $ | | $ | ( | |||||
Denominator for earnings per share: |
|
|
|
|
|
|
|
| |||||
Weighted average number of basic and diluted common shares outstanding (1) |
| |
| |
| |
| | |||||
Earnings per share: |
|
|
|
|
|
|
|
| |||||
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 and nine months ended September 30, 2024, respectively. |
11. 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. |
| ● | Corporate. The Corporate segment primarily consists of general and administrative expenses not allocated to the Specialty Products and Solutions, Montana/Renewables, or Performance Brands segments. |
During the first quarter of 2025, the CODM changed the definition and calculation of Adjusted EBITDA to exclude RINs incurrence expense (see item (k) below). The Company’s RINs incurrence expense is calculated by multiplying the RINs obligation in the period incurred (based on actual results) by the spot price on the day the RINs obligation is incurred for each accounting period. The resulting non-cash incurrence expenses are included in cost of sales in the statement of
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operations. The Company believes that this revised definition and calculation better reflects the performance of the Company’s business segments including cash flows because it excludes these non-cash fluctuations. Adjusted EBITDA has been revised for all periods presented to consistently reflect this change.
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.
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Reportable segment information for the three and nine months ended September 30, 2025 and 2024 is as follows (in millions):
| Specialty |
|
|
|
|
| ||||||||||||
Products and | Performance | Montana/ | Consolidated | |||||||||||||||
Three Months Ended September 30, 2025 | Solutions | Brands | Renewables | Corporate | Eliminations | Total | ||||||||||||
Sales: |
|
|
|
|
|
| ||||||||||||
External customers | $ | | $ | | $ | | $ | — | $ | — | $ | | ||||||
Inter-segment sales |
| |
| |
| — |
| — |
| ( |
| — | ||||||
Total sales | $ | | $ | | $ | | $ | — | $ | ( | $ | | ||||||
Cost of sales | $ | | $ | | $ | | $ | — | $ | — | $ | | ||||||
Gross profit | $ | | $ | | $ | | $ | - | $ | — | $ | | ||||||
Adjusted EBITDA | $ | | $ | | $ | ( | $ | ( | $ | — | $ | | ||||||
Reconciling items to net income: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Depreciation and amortization |
| |
| |
| |
| |
| — |
| | ||||||
LCM / LIFO loss |
| |
| |
| |
| — |
| — |
| | ||||||
Loss on sale of business |
| — |
| |
| — |
| |
| — |
| | ||||||
Interest expense |
| |
| |
| |
| |
| — |
| | ||||||
Debt extinguishment costs |
| ( |
| — |
| ( |
| — |
| — |
| ( | ||||||
Unrealized gain on derivatives |
| ( |
| — |
| — |
| — |
| — |
| ( | ||||||
RINs incurrence gain |
| ( |
| — |
| ( |
| — |
| — |
| ( | ||||||
RINs mark-to-market gain |
| ( |
| — |
| ( |
| — |
| — |
| ( | ||||||
Other non-recurring (income) expenses |
| ( | ||||||||||||||||
Equity-based compensation and other items |
|
|
|
|
|
|
|
|
|
| | |||||||
Income tax benefit |
|
|
|
|
|
|
|
|
|
| ( | |||||||
Noncontrolling interest adjustments |
|
|
|
|
|
|
|
|
|
| | |||||||
Net income |
|
|
|
|
|
|
|
| $ | | ||||||||
Capital expenditures | $ | | $ | — | $ | | $ | — | $ | — | $ | | ||||||
PP&E, net | $ | | $ | | $ | | $ | | $ | — | $ | | ||||||
35
Table of Contents
| Specialty |
|
|
|
|
| ||||||||||||
Products and | Performance | Montana/ | Consolidated | |||||||||||||||
Three Months Ended September 30, 2024 | Solutions (1) | Brands (2) | Renewables | Corporate | Eliminations | Total | ||||||||||||
Sales: |
|
|
|
|
|
| ||||||||||||
External customers | $ | | $ | | $ | | $ | — | $ | — | $ | | ||||||
Inter-segment sales |
| |
| |
| — |
| — |
| ( |
| — | ||||||
Total sales | $ | | $ | | $ | | $ | — | $ | ( | $ | | ||||||
Cost of sales | $ | | $ | | $ | | $ | — | $ | — | $ | | ||||||
Gross profit (loss) | $ | | $ | | $ | ( | $ | — | $ | — | $ | | ||||||
Adjusted EBITDA | $ | | $ | | $ | | $ | ( | $ | — | $ | | ||||||
Reconciling items to net loss: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Depreciation and amortization |
| |
| |
| |
| |
| — |
| | ||||||
LCM / LIFO loss |
| |
| |
| |
| — |
| — |
| | ||||||
Interest expense |
| |
| — |
| |
| |
| — |
| | ||||||
Unrealized gain on derivatives |
| ( |
| — |
| — |
| — |
| — |
| ( | ||||||
RINs incurrence expense |
| |
| — |
| |
| — |
| — |
| | ||||||
RINs mark-to-market loss |
| |
| — |
| |
| — |
| — |
| | ||||||
Other non-recurring expenses |
|
|
|
|
|
|
|
|
|
| | |||||||
Equity-based compensation and other items |
|
|
|
|
|
|
|
|
|
| | |||||||
Income tax expense |
|
|
|
|
|
|
|
|
|
| | |||||||
Noncontrolling interest adjustments |
|
|
|
|
|
|
|
|
|
| ( | |||||||
Net loss |
|
|
|
|
|
|
|
| $ | ( | ||||||||
Capital expenditures | $ | | $ | | $ | | $ | | $ | — | $ | | ||||||
PP&E, net | $ | | $ | | $ | | $ | | $ | — | $ | | ||||||
36
Table of Contents
| Specialty |
|
|
|
|
| ||||||||||||
Products and | Performance | Montana/ | Consolidated | |||||||||||||||
Nine Months Ended September 30, 2025 | Solutions | Brands | Renewables | Corporate | Eliminations | Total | ||||||||||||
Sales: |
|
|
|
|
|
| ||||||||||||
External customers | $ | | $ | | $ | | $ | — | $ | — | $ | | ||||||
Inter-segment sales |
| |
| |
| — |
| — |
| ( |
| — | ||||||
Total sales | $ | | $ | | $ | | $ | — | $ | ( | $ | | ||||||
Cost of sales | $ | | $ | | $ | | $ | — | $ | — | $ | | ||||||
Gross profit (loss) | $ | | $ | | $ | ( | $ | - | $ | — | $ | | ||||||
Adjusted EBITDA | $ | | $ | | $ | ( | $ | ( | $ | — | $ | | ||||||
Reconciling items to net income: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Depreciation and amortization |
| |
| |
| |
| |
| — |
| | ||||||
LCM / LIFO (gain) loss |
| |
| |
| ( |
| — |
| — |
| | ||||||
(Gain) loss on sale of business |
| — |
| ( |
| — |
| |
| — |
| ( | ||||||
Interest expense |
| |
| |
| |
| |
| — |
| | ||||||
Debt extinguishment costs |
| ( |
| — |
| |
| |
| — |
| | ||||||
Unrealized gain on derivatives |
| ( |
| — |
| — |
| — |
| — |
| ( | ||||||
RINs incurrence gain |
| ( |
| — |
| ( |
| — |
| — |
| ( | ||||||
RINs mark-to-market loss |
| |
| — |
| |
| — |
| — |
| | ||||||
Other non-recurring expenses |
|
|
|
|
|
|
|
|
|
| | |||||||
Equity-based compensation and other items |
|
|
|
|
|
|
|
|
|
| | |||||||
Income tax benefit |
|
|
|
|
|
|
|
|
|
| ( | |||||||
Noncontrolling interest adjustments |
|
|
|
|
|
|
|
|
|
| | |||||||
Net income |
|
|
|
|
|
|
|
| $ | | ||||||||
Capital expenditures | $ | | $ | | $ | | $ | | $ | — | $ | | ||||||
PP&E, net | $ | | $ | | $ | | $ | | $ | — | $ | | ||||||
37
Table of Contents
| Specialty |
|
|
|
|
| ||||||||||||
Products and | Performance | Montana/ | Consolidated | |||||||||||||||
Nine Months Ended September 30, 2024 | Solutions | Brands | Renewables | Corporate | Eliminations | Total | ||||||||||||
Sales: |
|
|
|
|
|
| ||||||||||||
External customers | $ | | $ | | $ | | $ | — | $ | — | $ | | ||||||
Inter-segment sales |
| |
| |
| — |
| — |
| ( |
| — | ||||||
Total sales | $ | | $ | | $ | | $ | — | $ | ( | $ | | ||||||
Cost of sales | $ | | $ | | $ | | $ | — | $ | — | $ | | ||||||
Gross profit (loss) | $ | | $ | | $ | ( | $ | — | $ | — | $ | | ||||||
Adjusted EBITDA | $ | | $ | | $ | | $ | ( | $ | — | $ | | ||||||
Reconciling items to net loss: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Depreciation and amortization |
| |
| |
| |
| |
| — |
| | ||||||
LCM / LIFO loss |
| |
| |
| |
| — |
| — |
| | ||||||
Interest expense |
| |
| |
| |
| |
| — |
| | ||||||
Debt extinguishment costs |
| |
| — |
| — |
| |
| — |
| | ||||||
Unrealized gain on derivatives |
| ( |
| — |
| — |
| — |
| — |
| ( | ||||||
RINs incurrence expense |
| |
| — |
| |
| — |
| — |
| | ||||||
RINs mark-to-market gain |
| ( |
| — |
| ( |
| — |
| — |
| ( | ||||||
Other non-recurring expenses (1) |
|
|
|
|
|
|
|
|
|
| | |||||||
Equity-based compensation and other items |
|
|
|
|
|
|
|
|
|
| | |||||||
Income tax expense |
|
|
|
|
|
|
|
|
|
| | |||||||
Noncontrolling interest adjustments |
|
|
|
|
|
|
|
|
|
| ( | |||||||
Net loss |
|
|
|
|
|
|
|
| $ | ( | ||||||||
Capital expenditures | $ | | $ | | $ | | $ | | $ | — | $ | | ||||||
PP&E, net | $ | | $ | | $ | | $ | | $ | — | $ | | ||||||
| (1) | For the nine months ended September 30, 2024, other non-recurring expenses included a $ |
Geographic Information
International sales accounted for less than ten percent of consolidated sales in the three and nine months ended September 30, 2025 and 2024.
38
Table of Contents
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 September 30, 2025 and 2024 (dollars in millions):
| Three Months Ended September 30, | ||||||||||
2025 | 2024 | ||||||||||
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 | $ | |
| | % | $ | |
| | % | |
The following table sets forth the major product category sales for each segment for the nine months ended September 30, 2025 and 2024 (dollars in millions):
| Nine Months Ended September 30, |
| ||||||||||
2025 | 2024 | |||||||||||
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 | $ | |
| | % | $ | |
| | % | ||
39
Table of Contents
Major Customers
During the three and nine months ended September 30, 2025 and 2024, the Company had
Major Suppliers
During the three and nine months ended September 30, 2025, the Company had
12. 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.
During the quarter ended September 30, 2025, the Company reassessed the realizability of its deferred tax assets from previously unutilized clean fuel production credits (“CFPCs”). As a result of the successful monetization of a portion of these credits through a third-party sale 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 reversed the valuation allowance, resulting in a corresponding income tax benefit recognized in the unaudited condensed consolidated statements of operations. The reversal reflects management’s updated assessment that it is more likely than not that the related deferred tax assets will be realized based on the availability of a reliable monetization for the credits and the receipt of proceeds from the sale transaction in September 2025.
On July 10, 2024, the Company completed the Conversion pursuant to which it became the parent holding company of the Partnership. Following the Conversion, the Company’s sole material asset is the partnership interests in the Partnership, which for U.S. federal, state and local income tax purposes passes its net taxable income and related tax credits, if any, through to its partners for inclusion in the partners’ tax returns. The Partnership is also subject to and reports entity level taxes in certain states. The income tax burden on the earnings taxed to the noncontrolling interest holders is not reported by the Company in its unaudited condensed consolidated financial statements under U.S. GAAP. As a result, the Company’s effective tax rate differs materially from the statutory rate.
Sale of Transferable Tax Credits
In September 2025, the Company sold $
40
Table of Contents
Income Tax Expense
Income tax benefit for the three and nine months ended September 30, 2025, 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 impacts 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 2025.
13. 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; |
| ● | 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. |
41
Table of Contents
As of September 30, 2025 and December 31, 2024, 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 September 30, 2025 and December 31, 2024, respectively (dollars in millions):
| Parent |
|
|
| ||||||||
Company and | ||||||||||||
Restricted |
| Unrestricted |
|
| Consolidated | |||||||
September 30, 2025 | Subsidiaries | Subsidiaries | Eliminations | Total | ||||||||
Cash and cash equivalents | $ | | $ | | $ | | $ | | ||||
Restricted cash | $ | | $ | | $ | | $ | | ||||
Accounts receivable - trade | $ | | $ | | $ | | $ | | ||||
Accounts receivable - other | $ | | $ | — | $ | | $ | | ||||
Inventory | $ | | $ | | $ | | $ | | ||||
Prepaid expenses and other current assets | $ | | $ | | $ | | $ | | ||||
Property, plant and equipment, net | $ | | $ | | $ | | $ | | ||||
Other noncurrent assets, net | $ | | $ | | $ | | $ | | ||||
Accounts payable | $ | | $ | | $ | ( | $ | | ||||
Accrued interest payable | $ | | $ | — | $ | | $ | | ||||
Accrued salaries, wages and benefits | $ | | $ | — | $ | | $ | | ||||
Current portion of RINs obligation | $ | | $ | — | $ | | $ | | ||||
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, 2024 | Subsidiaries | Subsidiaries | Eliminations | Total | ||||||||
Cash and cash equivalents | $ | | $ | | $ | | $ | | ||||
Restricted cash | $ | | $ | | $ | | $ | | ||||
Accounts receivable - trade | $ | | $ | | $ | | $ | | ||||
Accounts receivable - other | $ | | $ | | $ | | $ | | ||||
Inventory | $ | | $ | | $ | | $ | | ||||
Prepaid expenses and other current assets | $ | | $ | | $ | | $ | | ||||
Property, plant and equipment, net | $ | | $ | | $ | | $ | | ||||
Other noncurrent assets, net | $ | | $ | | $ | | $ | | ||||
Accounts payable | $ | | $ | | $ | ( | $ | | ||||
Accrued interest payable | $ | | $ | | $ | | $ | | ||||
Accrued salaries, wages and benefits | $ | | $ | — | $ | | $ | | ||||
Obligations under inventory financing agreements | $ | | $ | | $ | | $ | | ||||
Current portion of RINs obligation | $ | | $ | — | $ | | $ | | ||||
Other current liabilities | $ | | $ | | $ | | $ | | ||||
Current portion of long-term debt | $ | | $ | | $ | | $ | | ||||
Other long-term liabilities | $ | | | $ | | $ | | |||||
Long-term debt, less current portion | $ | | $ | | $ | ( | $ | | ||||
Redeemable noncontrolling interest | $ | | $ | | $ | | $ | | ||||
Stockholders' equity | $ | ( | $ | ( | $ | ( | $ | ( | ||||
42
Table of Contents
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 September 30, |
| Nine Months Ended September 30, |
| |||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 |
| |||||
Sales | $ | | $ | | $ | | $ | | |||||
Cost of sales | |
| | |
| | |||||||
Gross profit (loss) | ( |
| ( | ( |
| ( | |||||||
Operating costs and expenses: | |||||||||||||
General and administrative | |
| | |
| | |||||||
Other operating expense | |
| | |
| | |||||||
Operating loss | ( |
| ( | ( |
| ( | |||||||
Other income (expense): |
|
|
|
|
|
| |||||||
Interest expense | ( |
| ( | ( |
| ( | |||||||
Gain (loss) on derivative instruments | — |
| ( | ( |
| | |||||||
Debt extinguishment costs | |
| — | ( |
| — | |||||||
Other income | |
| | |
| | |||||||
Total other expense | ( |
| ( | ( |
| ( | |||||||
Net loss before income taxes | ( | ( | ( | ( | |||||||||
Income tax benefit | ( | — | ( | — | |||||||||
Net loss | $ | ( |
| $ | ( | $ | ( |
| $ | ( | |||
14. 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
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
43
Table of Contents
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 described above and included a balance of $
44
Table of Contents
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 and nine months ended September 30, 2025. Stockholders should read the following discussion and analysis of our financial condition and results of operations in conjunction with our 2024 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; Montana/Renewables; and Corporate. For additional information, see Note 11 — “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 — renewable fuels and specialty asphalt. At our Great Falls 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 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. Our Corporate segment primarily consists of general and administrative expenses not allocated to the Specialty Products and Solutions, Performance Brands or Montana/Renewables segments.
Recent Developments
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 impacts 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 2025.
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Sale and Leaseback Transaction
On July 25, 2025, Calumet Shreveport Refining, LLC (“Calumet Shreveport”), a subsidiary of the Company, entered into a Property Schedule No. 2 (“Property Schedule No. 2”) with Stonebriar, which supplements the Master Lease Agreement, dated as of February 12, 2021 (together with Property Schedule No. 2, the “Lease Agreement”), among Calumet Shreveport and Stonebriar. The Lease Agreement relates to a sale and leaseback transaction (the “Shreveport Terminal Asset Financing Arrangement”) whereby Calumet Shreveport sold and leased back certain of its property comprising the Shreveport refinery fuels terminal, truck rack and related piping and equipment for consideration of approximately $120.0 million. The assets sold and leased back do not include any fuels or specialty production inventory. The Lease Agreement has a seven-year term and requires Calumet Shreveport to make monthly rental payments of approximately $1.8 million, which represents a cost of capital of approximately 10.75% per year. The Lease Agreement provides that, subject to certain conditions, Calumet Shreveport may terminate the lease and repurchase the leased assets after a term of six years for consideration of approximately $42.0 million. Concurrently with Calumet Shreveport’s entry into the Lease Agreement, the Company reaffirmed a Continuing Guaranty in favor of Stonebriar, pursuant to which the Company guarantees to Stonebriar the performance of Calumet Shreveport’s obligations under the Lease Agreement.
Concurrently with the entry into the Lease Agreement, Calumet Shreveport and Stonebriar terminated Property Schedule No. 1, dated as of February 12, 2021 (“Property Schedule No. 1”), among Calumet Shreveport and Stonebriar. The Company applied approximately $40.0 million of the proceeds of the Shreveport Terminal Asset Financing Arrangement to pay all of Calumet Shreveport’s outstanding obligations under Property Schedule No. 1.
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11.00% Senior Notes due 2026
On May 24, 2025, Calumet Specialty Products Partners, L.P. and Calumet Finance Corp. (collectively, the “Issuers”) partially redeemed $150.0 million aggregate principal amount of the outstanding 11.00% Senior Notes due 2026 (the “2026 Notes”) at a redemption price of par, plus accrued and unpaid interest to, but not including, the redemption date.
On August 12, 2025, the Issuers partially redeemed $80.0 million aggregate principal amount of the outstanding 2026 Notes at a redemption price of par, plus accrued and unpaid interest to, but not including, the redemption date.
9.75% Senior Notes due 2028
On January 16, 2025, the Issuers issued $100.0 million aggregate principal amount of a new series of the Issuers’ 9.75% Senior Notes due 2028 (the “2028 Mirror Issuance Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act. The 2028 Mirror Issuance Notes were issued at 98% of par for net proceeds of approximately $96.0 million, after deducting the initial purchasers’ discount and estimated offering expenses. The Company used the net proceeds from the offering of the Notes to redeem a portion of the Issuers’ outstanding 2026 Notes on May 24, 2025.
U.S. Department of Energy Facility
On January 10, 2025, MRL and the DOE, as guarantor and loan servicer, executed the DOE Loan for a $1.44 billion guaranteed loan facility to fund the construction and expansion of the renewable fuels facility owned by MRL. The loan guarantee is structured in two tranches, with the first tranche of approximately $781.8 million disbursed on February 18, 2025 (the “Funding Date”) to fund eligible expenses previously incurred by MRL. MRL has the ability to draw additional tranches of up to $658.0 million through a delayed draw construction facility from the beginning of construction in 2025 through the anticipated completion of the MaxSAFTM project in 2028, which includes a series of discrete, modular projects to enhance MRL’s SAF capacity. Under the MaxSAFTM project, we are planning to increase SAF capacity to approximately 150 million gallons per year within two years and approximately 300 million gallons at the completion of the project. The second tranche under the DOE Loan is subject to the achievement of certain milestone conditions. As a result, we can provide no assurance on the funding of the second tranche under the DOE Loan. 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. As of September 30, 2025, the Company has capitalized $23.7 million of accrued interest into the principal balance of the DOE loan in accordance with the terms of the agreement which allows capitalization of up to $232.8 million of interest. Interest expense is calculated based on the total principal balance including any capitalized interest.
The DOE Loan is secured by substantially all of MRL’s assets, and a pledge from MRHL over its right, title and interests to 100% of the equity interests of MRL. The DOE Loan contains events of default that are customary in nature for financings of this type, including, among other things, (a) the non-payment of principal or interest, (b) material violations of covenants, (c) material breaches of representations and warrants, (d) certain bankruptcy events and (e) certain change of control events.
The DOE Loan is also subject to amortization events that are customary in nature for financings of this type, including (a) failure to maintain financial ratios, (b) disposition of certain assets and (c) failure to meet certain project milestones. The occurrence of an amortization event or an event of default could result in accelerated amortization of the DOE Loan, and the occurrence of an event of default could, in certain instances, result in the liquidation of the collateral securing the DOE Loan.
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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 for approximately $392.2 million (including exit fees of $23.0 million); |
| ● | repay in full the outstanding loans of approximately $83.8 million under the MRL Term Loan Credit Agreement (including a make-whole premium of approximately $9.4 million and an early termination premium of approximately $0.7 million); |
| ● | repay in full the outstanding loans of approximately $26.7 million under the MRL Revolving Credit Agreement; and |
| ● | repay in full the outstanding obligations of approximately $32.5 million under the MRL Supply and Offtake Agreement. |
Separately, the Company received $40.0 million of cash from Stonebriar on the Funding Date in satisfaction of the remaining conditions associated with the Montana Refinery Asset Financing Arrangement.
Refer to Note 7 — “Long-Term Debt” for further information regarding the MRL Asset Financing Arrangements, the MRL Term Loan Credit Agreement and MRL Revolving Credit Agreement. Refer to Note 6 — “Inventory Financing Agreements” for further information regarding the MRL Supply and Offtake Agreement.
Third Quarter 2025 Update
Outlook and Trends
During the third quarter of 2025, our business benefited from improvement in commodity margins relative to the second quarter and continued strength in specialty margins. Demand for our products remains strong across the enterprise. Our Specialty Products & Solutions segment achieved a quarterly production record during the third quarter of 2025, as we continue to benefit from enhanced operational performance following the capital investments we have made over the past few years on projects designed to improve asset reliability. Also, our Montana Renewables facility continued to outperform its operational cost target of $0.70 per gallon.
In our Specialties Products and Solutions and Performance Brands segments, we continue to benefit from an attractive specialty product margin environment. Compared to the second quarter, our fuels and asphalt business benefitted from improved commodity margins. Demand for our products in these businesses remained strong in comparison to historical averages 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 into the fourth quarter of 2025, offset by normal seasonal weakness.
In our Montana/Renewables segment, we maintain our outlook of strong demand for renewable fuel products, including those we produce. We believe long-term demand for renewable fuel products will continue to grow as a result of the increased Federal policy focus on domestic fuel production, expansion of both voluntary and mandatory corporate decarbonization targets, particularly the global aviation industry, strategic alignment with the agricultural industry as a source of renewable feedstocks, broad sustainability initiatives, and Federal, State, Provincial and local governmental mandates and incentives that have been passed or announced in North America and globally. In aviation, forecasted SAF availability falls short of the necessary emissions reductions that would be required to reach established decarbonization and/or net-zero goals, which will drive SAF pricing. We believe that our advantage as a first-mover in the renewable fuels market positions us as a key producer for potential offtake partners to help them reach their announced targets.
Our Montana specialty asphalt facility continues to be favorably impacted as a result of our strategic location and timely export of wholesale volumes, as well as the retail asphalt and paving season. These improvements were offset by
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tighter WCS-WTI differentials in comparison to historical averages. The facility remains strategically advantaged due to its local access to cost-advantaged Canadian conventional crude oil, while producing additional fuels and refined products for delivery into the regional market. Due to its strategic location and logistical capabilities, we believe that our Montana specialty asphalt facility is well-positioned to continue to serve long-standing customers in the regional market.
As we have experienced in the past several years, our integrated business model and diversified product portfolio provides an advantaged response to changing market conditions. While we are not immune to the impacts of an economic downturn, we believe our specialty business is well positioned in periods of raw material volatility, which can negatively impact short-term margins, and a variety of economic conditions.
Contingencies
For a summary of litigation and other contingencies, refer to Note 5 — “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.
Financial Results
We reported net income of $313.4 million in the third quarter 2025 versus a net loss of $100.6 million in the third quarter 2024. We reported Adjusted EBITDA (as defined in Note 11 — “Segments and Related Information” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements”) of $69.6 million in the third quarter 2025 versus $59.8 million in the third quarter 2024. We generated cash from operating activities of $23.5 million in the third quarter 2025 versus using cash from operating activities of $15.5 million in the third quarter of 2024.
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 $80.2 million in the third quarter 2025 versus $50.7 million in the third quarter 2024. Compared to the third quarter of 2024, Specialty Products and Solutions third quarter 2025 segment Adjusted EBITDA was favorably impacted by higher fuels margins and record operational production.
Montana/Renewables segment Adjusted EBITDA with Tax Attributes was $17.1 million in the third quarter 2025 versus $14.6 million in the third quarter 2024. Our Montana specialty asphalt business was favorably impacted as a result of timely export of wholesale volumes as well as a strong retail asphalt and paving season. The segment as a whole has sustained the favorable benefit of operating cost improvements, highlighted by the significant cost reductions for wash water and process materials as a result of improving certain operating unit efficiency at both our Montana Renewables facility and legacy Montana specialty asphalt facility. Montana/Renewables segment Adjusted EBITDA with Tax Attributes was affected by the phase out of the Blender’s Tax Credit (“BTC”) and the introduction of the Section 45Z Clean Fuel Production Tax Credit (“PTC”). While the BTC provided for a static credit of approximately $1.00 per gallon on renewable diesel and SAF sales, the value of the PTC is a variable function of feedstock carbon intensity measures. The estimated value of the PTCs we generated in the third quarter of 2025 was approximately $0.50 per gallon.
Performance Brands segment Adjusted EBITDA was $13.2 million in the third quarter 2025 versus $13.6 million in the third quarter 2024. The change primarily reflects the divestiture of the Royal Purple Industrial (“RPI”) business at the end of the first quarter of 2025. As a result, third quarter 2025 results do not include contributions from the RPI business. Results in our Performance Brands segment were favorably impacted from the strong volume growth across high performance products, in particular our TruFuel product line and our integrated Bel-Ray and private label industrial businesses. This segment continues to benefit from strong unit margins, reflective of stabilized input costs in our branded and consumer markets.
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Total Corporate costs represented a loss of $18.0 million of Adjusted EBITDA in the third quarter 2025 versus a loss of $19.1 million of Adjusted EBITDA in the third quarter 2024.
Liquidity Update
As of September 30, 2025, we had total liquidity of $384.4 million comprised of $94.6 million of unrestricted cash, $80.0 million of restricted cash and $209.8 million of availability under our credit facilities. As of September 30, 2025, our revolving credit facilities had a $448.8 million borrowing base, $71.4 million in outstanding standby letters of credit and $167.6 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 third quarter 2025, we recorded an accrued benefit of $333.3 million for RIN in cost of sales in the unaudited condensed statements of operations, as compared to an accrued expense of $42.8 million for RINs in the third quarter 2024. 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 13 — “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
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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 8 — “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 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) depreciation and amortization; and (e) 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 and Nine Months Ended September 30, 2025 and 2024
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 September 30, | Nine Months Ended September 30, | |||||||||||||||
2025 |
| 2024 | % Change | 2025 |
| 2024 | % Change | ||||||||||
(In bpd) | (In bpd) | ||||||||||||||||
Total sales volume (1) |
| 91,605 |
| 92,275 | (0.7) | % | 88,662 |
| 88,720 | (0.1) | % | ||||||
Facility production: |
|
|
|
|
|
|
| ||||||||||
Specialty Products and Solutions: |
|
|
|
|
|
|
| ||||||||||
Lubricating oils |
| 11,803 |
| 12,118 | (2.6) | % | 11,705 |
| 11,703 | — | % | ||||||
Solvents |
| 8,120 |
| 7,731 | 5.0 | % | 7,876 |
| 7,527 | 4.6 | % | ||||||
Waxes |
| 1,650 |
| 1,324 | 24.6 | % | 1,374 |
| 1,403 | (2.1) | % | ||||||
Fuels, asphalt and other by-products |
| 43,130 |
| 38,004 | 13.5 | % | 37,382 |
| 35,245 | 6.1 | % | ||||||
Total Specialty Products and Solutions |
| 64,703 |
| 59,177 | 9.3 | % | 58,337 |
| 55,878 | 4.4 | % | ||||||
Montana/Renewables: |
|
|
|
|
|
|
| ||||||||||
Gasoline |
| 3,639 |
| 3,516 | 3.5 | % | 3,520 |
| 3,521 | — | % | ||||||
Diesel |
| 2,766 |
| 2,808 | (1.5) | % | 2,675 |
| 2,805 | (4.6) | % | ||||||
Jet fuel |
| 696 |
| 483 | 44.1 | % | 576 |
| 517 | 11.4 | % | ||||||
Asphalt, heavy fuel oils and other |
| 4,094 |
| 4,046 | 1.2 | % | 3,919 |
| 4,090 | (4.2) | % | ||||||
Renewable fuels | 11,187 | 11,488 | (2.6) | % | 11,059 | 10,513 | 5.2 | % | |||||||||
Total Montana/Renewables |
| 22,382 |
| 22,341 | 0.2 | % | 21,749 |
| 21,446 | 1.4 | % | ||||||
Performance Brands |
| 1,583 |
| 1,787 | (11.4) | % | 1,621 |
| 1,755 | (7.6) | % | ||||||
Total facility production |
| 88,668 |
| 83,305 | 6.4 | % | 81,707 |
| 79,079 | 3.3 | % | ||||||
| (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 to third-party customers. Total sales volume includes the sale of purchased blendstocks. |
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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 September 30, |
| Nine Months Ended September 30, | |||||||||
2025 |
| 2024 | 2025 | 2024 | ||||||||
(In millions) | ||||||||||||
Sales | $ | 1,078.0 | $ | 1,100.4 | $ | 3,098.5 | $ | 3,239.9 | ||||
Cost of sales |
| 704.3 |
| 1,095.5 |
| 2,849.8 |
| 3,092.7 | ||||
Gross profit |
| 373.7 |
| 4.9 |
| 248.7 |
| 147.2 | ||||
Operating costs and expenses: |
|
|
|
|
|
|
|
| ||||
Selling |
| 10.9 |
| 14.9 |
| 35.4 |
| 43.7 | ||||
General and administrative |
| 31.4 |
| 40.2 |
| 84.6 |
| 101.0 | ||||
(Gain) loss on sale of business |
| 6.4 |
| — |
| (55.8) |
| — | ||||
Other operating expense |
| 2.1 |
| 6.9 |
| 11.3 |
| 17.1 | ||||
Operating income (expense) |
| 322.9 |
| (57.1) |
| 173.2 |
| (14.6) | ||||
Other income (expense): |
|
|
|
|
|
|
|
| ||||
Interest expense |
| (53.6) |
| (57.7) |
| (165.0) |
| (175.3) | ||||
Debt extinguishment costs | 0.5 |
| — |
| (47.2) |
| (0.3) | |||||
Gain (loss) on derivative instruments |
| (1.5) |
| 15.2 |
| (4.4) |
| 9.6 | ||||
Other (income) expense |
| 3.7 |
| (0.3) |
| 6.1 |
| 0.7 | ||||
Total other expense |
| (50.9) |
| (42.8) |
| (210.5) |
| (165.3) | ||||
Net income (loss) before income taxes |
| 272.0 |
| (99.9) |
| (37.3) |
| (179.9) | ||||
Income tax (benefit) expense |
| (41.4) |
| 0.7 |
| (40.8) |
| 1.4 | ||||
Net income (loss) | $ | 313.4 | $ | (100.6) | $ | 3.5 | $ | (181.3) | ||||
EBITDA | $ | 365.2 | $ | (6.5) | $ | 241.1 | $ | 103.5 | ||||
Adjusted EBITDA | $ | 69.6 | $ | 59.8 | $ | 162.8 | $ | 162.7 | ||||
Adjusted EBITDA with Tax Attributes | $ | 92.5 | $ | 59.8 | $ | 224.0 | $ | 162.7 | ||||
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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Management believes 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 distributions. 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.
During the first quarter of 2025, the CODM changed the definition and calculation of Adjusted EBITDA to exclude RINs incurrence expense (see item (k) below). The Company’s RINs incurrence expense is calculated by multiplying the RINs obligation in the period incurred (based on actual results) by the spot price on the day the RINs obligation is incurred for each accounting period. The resulting non-cash incurrence expenses are included in cost of sales in the statement of operations. The Company believes that this revised definition and calculation better reflects the performance of the Company’s business segments including cash flows because it excludes these non-cash fluctuations. Adjusted EBITDA has been revised for all periods presented to consistently reflect this change.
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 Production Tax Credits, less the difference between the notional value of any Production Tax Credits sold and the amount realized from such sales.
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 7 — “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 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.
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| |||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 |
| |||||
| (In millions) |
| |||||||||||
Reconciliation of Net income (loss) to EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes |
|
|
|
|
|
|
| ||||||
Net income (loss) | $ | 313.4 | $ | (100.6) | $ | 3.5 | $ | (181.3) | |||||
Add: |
|
|
|
|
|
|
| ||||||
Interest expense |
| 53.6 |
| 57.7 |
| 165.0 |
| 175.3 | |||||
Depreciation and amortization |
| 39.6 |
| 35.7 |
| 113.4 |
| 108.1 | |||||
Income tax (benefit) expense |
| (41.4) |
| 0.7 |
| (40.8) |
| 1.4 | |||||
EBITDA | $ | 365.2 | $ | (6.5) | $ | 241.1 | $ | 103.5 | |||||
Add: |
|
|
|
|
|
|
|
| |||||
LCM / LIFO loss | $ | 5.1 | $ | 9.4 | $ | 3.1 | $ | 8.9 | |||||
Unrealized gain on derivative instruments |
| (2.0) |
| (13.6) |
| (9.1) |
| (52.3) | |||||
Debt extinguishment costs |
| (0.5) |
| — |
| 47.2 |
| 0.3 | |||||
Amortization of turnaround costs |
| 11.1 |
| 9.6 |
| 31.9 |
| 28.5 | |||||
(Gain) loss on sale of business |
| 6.4 |
| — |
| (55.8) |
| — | |||||
RINs incurrence (gain) expense |
| (303.1) |
| 10.0 |
| (257.4) |
| 24.5 | |||||
RINs mark-to-market (gain) loss |
| (20.8) |
| 32.8 |
| 145.1 |
| (26.1) | |||||
Equity-based compensation and other items |
| 9.5 |
| 7.0 |
| 6.1 |
| 4.4 | |||||
Other non-recurring (income) expenses (1) |
| (5.3) |
| 12.1 |
| 2.1 |
| 72.1 | |||||
Noncontrolling interest adjustments |
| 4.0 |
| (1.0) |
| 8.5 |
| (1.1) | |||||
Adjusted EBITDA | $ | 69.6 | $ | 59.8 | $ | 162.8 | $ | 162.7 | |||||
Tax attributes (2) | 22.9 | — | 61.2 |
| — | ||||||||
Adjusted EBITDA with Tax Attributes | $ | 92.5 | $ | 59.8 | $ | 224.0 | $ | 162.7 | |||||
| (1) | For the nine months ended September 30, 2024, other non-recurring expenses included a $56.2 million realized loss on derivatives related to the embedded derivatives for our inventory financing arrangements. |
| (2) | Tax attribute amounts reflect 100% of the notional value of Production Tax Credits generated for each respective period presented less any discounts on the sale of PTCs. The PTCs can be realized by applying the credits to the Company’s tax expense 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.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2025 |
| 2024 | 2025 |
| 2024 | ||||||
(In Millions) | ||||||||||||
(Unaudited) | ||||||||||||
Reconciliation of Montana/Renewables Segment Net income (loss) to Segment Adjusted EBITDA and Segment Adjusted EBITDA with Tax Attributes: | ||||||||||||
Montana/Renewables Segment Net income (loss) | $ | 103.7 | $ | (49.9) | $ | (124.6) | $ | (127.5) | ||||
Add: |
|
|
|
|
|
|
|
| ||||
Depreciation and amortization | $ | 27.9 | $ | 25.5 | $ | 84.0 | $ | 76.3 | ||||
LCM / LIFO (gain) loss |
| 2.0 |
| 4.4 |
| (5.0) |
| 6.8 | ||||
Interest expense |
| 15.4 |
| 15.7 |
| 48.8 |
| 48.7 | ||||
Debt extinguishment costs |
| (0.1) |
| — |
| 47.5 |
| — | ||||
RINs incurrence (gain) expense |
| (110.2) |
| 1.9 |
| (98.8) |
| 4.1 | ||||
RINs mark-to-market (gain) loss |
| (4.1) |
| 10.2 |
| 45.7 |
| (9.2) | ||||
Other non-recurring (income) expenses |
| (4.3) |
| 7.8 |
| 3.9 |
| 11.8 | ||||
Equity-based compensation and other items | — | — | 5.6 | — | ||||||||
Income tax (benefit) expense |
| (40.1) |
| — |
| (40.1) |
| — | ||||
Noncontrolling interest adjustments |
| 4.0 |
| (1.0) |
| 8.5 |
| (1.1) | ||||
Montana/Renewables Segment Adjusted EBITDA | $ | (5.8) | $ | 14.6 | $ | (24.5) | $ | 9.9 | ||||
Tax attributes (1) |
| 22.9 |
| — |
| 61.2 |
| — | ||||
Montana/Renewables Segment Adjusted EBITDA with Tax Attributes | $ | 17.1 | $ | 14.6 | $ | 36.7 | $ | 9.9 | ||||
| (1) | Tax attribute amounts reflect 100% of the notional value of Production Tax Credits generated for each respective period presented less any discounts on the sale of PTCs. The PTCs can be realized by applying the credits to the Company’s tax expense or sold in a secondary market at a discounted rate. |
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Table of Contents
Changes in Results of Operations for the Three Months Ended September 30, 2025 and 2024
Sales. Sales decreased $22.4 million, or 2.0%, to $1,078.0 million in the three months ended September 30, 2025, from $1,100.4 million in the same period in 2024. Sales for each of our principal product categories in these periods were as follows:
| Three Months Ended September 30, | ||||||||
2025 |
| 2024 |
| % Change | |||||
(In millions, except barrel and per barrel data) | |||||||||
Sales by segment: | |||||||||
Specialty Products and Solutions: | |||||||||
Lubricating oils | $ | 183.5 | $ | 192.5 |
| (4.7) | % | ||
Solvents |
| 97.7 |
| 106.1 |
| (7.9) | % | ||
Waxes |
| 37.0 |
| 38.8 |
| (4.6) | % | ||
Fuels, asphalt and other by-products (1) |
| 360.9 |
| 376.6 |
| (4.2) | % | ||
Total Specialty Products and Solutions | $ | 679.1 | $ | 714.0 |
| (4.9) | % | ||
Total Specialty Products and Solutions sales volume (in barrels) |
| 5,992,000 |
| 5,965,000 |
| 0.5 | % | ||
Average Specialty Products and Solutions sales price per barrel | $ | 113.33 | $ | 119.70 |
| (5.3) | % | ||
Montana/Renewables: |
|
|
|
|
|
| |||
Gasoline | $ | 35.8 | $ | 40.8 |
| (12.3) | % | ||
Diesel |
| 29.6 |
| 31.0 |
| (4.5) | % | ||
Jet Fuel |
| 6.5 |
| 5.3 |
| 22.6 | % | ||
Asphalt, heavy fuel oils and other (2) |
| 42.9 |
| 51.3 |
| (16.4) | % | ||
Renewable fuels | 204.4 | 177.7 | 15.0 | % | |||||
Total Montana/Renewables | $ | 319.2 | $ | 306.1 |
| 4.3 | % | ||
Total Montana/Renewables sales volume (in barrels) |
| 2,287,000 |
| 2,370,000 |
| (3.5) | % | ||
Average Montana/Renewables sales price per barrel | $ | 139.57 | $ | 129.16 |
| 8.1 | % | ||
Performance Brands: | |||||||||
Total Performance Brands (3) | $ | 79.7 | $ | 80.3 |
| (0.7) | % | ||
Total Performance Brands sales volume (in barrels) |
| 149,000 |
| 156,000 |
| (4.5) | % | ||
Average Performance Brands sales price per barrel | $ | 534.90 | $ | 514.74 |
| 3.9 | % | ||
Total sales | $ | 1,078.0 | $ | 1,100.4 |
| (2.0) | % | ||
Total sales volume (in barrels) |
| 8,428,000 |
| 8,491,000 |
| (0.7) | % | ||
| (1) | Represents (a) by-products, including fuels and asphalt, produced in connection with the production of specialty products at the Princeton and Cotton Valley facilities and Dickinson and Karns City facilities, (b) polyolester synthetic lubricants produced at the Missouri facility, and (c) fuels products produced at the Shreveport facility. |
| (2) | Represents asphalt, heavy fuel oils and other products produced in connection with the production of fuels at the Great Falls specialty asphalt facility. |
| (3) | Represents packaged and synthetic specialty products at the Royal Purple, Bel-Ray and Calumet Packaging facilities. |
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Table of Contents
The components of the $34.9 million decrease in Specialty Products and Solutions segment sales for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, were as follows:
| Dollar Change | ||
(In millions) | |||
Volume | $ | 3.3 | |
Sales price | (38.2) | ||
Total Specialty Products and Solutions segment sales decrease | $ | (34.9) | |
Specialty Products and Solutions segment sales decreased period over period, primarily driven by a decrease in crude oil prices compared to the prior period. This impact was partially offset by an increase in volumes as a result of a strong market.
The components of the $13.1 million increase in Montana/Renewables segment sales for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, were as follows:
| Dollar Change | ||
(In millions) | |||
Sales price | $ | 23.8 | |
Volume | (10.7) | ||
Total Montana/Renewables segment sales increase | $ | 13.1 | |
Montana/Renewables segment sales increased primarily due to higher renewable fuels product prices at our Montana Renewables facility during the current quarter compared to the prior period. This impact was partially offset by lower pipeline crude sales volumes at our Montana specialty asphalt facility.
The components of the $0.6 million decrease in Performance Brands segment sales for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, were as follows:
| Dollar Change | ||
(In millions) | |||
Volume | $ | (3.3) | |
Sales price | 2.7 | ||
Total Performance Brands segment sales decrease | $ | (0.6) | |
Performance Brands segment sales decreased primarily due to lower sales volumes as a result of the divestiture of the Royal Purple Industrial business.
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Table of Contents
Gross Profit. Gross profit increased $368.8 million to gross profit of $373.7 million in the three months ended September 30, 2025, from gross profit of $4.9 million in the same period in 2024. Gross profit (loss) for our business segments were as follows:
| Three Months Ended September 30, | ||||||||
2025 |
| 2024 |
| % Change | |||||
| (Dollars in millions, except per barrel data) | ||||||||
Gross profit by segment: | |||||||||
Specialty Products and Solutions: | |||||||||
Gross profit | $ | 276.3 | $ | 2.3 |
| 11,913.0 | % | ||
Percentage of sales |
| 40.7 | % |
| 0.3 | % | 40.4 | % | |
Specialty Products and Solutions gross profit per barrel | $ | 46.11 | $ | 0.39 |
| 11,723.5 | % | ||
Montana/Renewables: |
|
|
|
|
|
| |||
Gross profit (loss) | $ | 78.9 | $ | (20.1) |
| (492.5) | % | ||
Percentage of sales |
| 24.7 | % |
| (6.6) | % | 31.3 | % | |
Montana/Renewables gross profit (loss) per barrel | $ | 34.50 | $ | (8.48) |
| (506.8) | % | ||
Performance Brands: |
|
|
|
|
|
| |||
Gross profit | $ | 18.5 | $ | 22.7 |
| (18.5) | % | ||
Percentage of sales |
| 23.2 | % |
| 28.3 | % | (5.1) | % | |
Performance Brands gross profit per barrel | $ | 124.16 | $ | 145.51 |
| (14.7) | % | ||
Total gross profit | $ | 373.7 | $ | 4.9 |
| 7,526.5 | % | ||
Percentage of sales |
| 34.7 | % |
| 0.4 | % | 34.3 | % | |
The components of the $274.0 million increase in Specialty Products and Solutions segment gross profit for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, were as follows:
| Dollar Change | ||
(In millions) | |||
Three months ended September 30, 2024 reported gross profit | $ | 2.3 | |
Cost of materials |
| 67.5 | |
LCM / LIFO inventory adjustments |
| 2.7 | |
Volumes |
| 0.6 | |
Operating costs | (6.0) | ||
RINs expense |
| 247.4 | |
Sales price | (38.2) | ||
Three months ended September 30, 2025 reported gross profit | $ | 276.3 | |
The increase in Specialty Products and Solutions segment gross profit for the three months ended September 30, 2025 as compared to the same period in 2024, was primarily due to the de-recognition of the RINs Obligation on the Company’s balance sheet for the SRE exemptions received by EPA in August 2025. The favorable margin impact was the result of higher commodity margins, coupled with lower crude oil costs, during the current quarter. 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 our accounting for RINs.
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Table of Contents
The components of the $99.0 million increase in Montana/Renewables segment gross profit for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, were as follows:
Dollar Change | |||
| (In millions) | ||
Three months ended September 30, 2024 reported gross profit (loss) | $ | (20.1) | |
Cost of materials |
| (64.7) | |
LCM / LIFO inventory adjustments |
| 2.3 | |
Volumes |
| (2.2) | |
RINs expense | 128.6 | ||
Operating costs |
| 11.2 | |
Sales price |
| 23.8 | |
Three months ended September 30, 2025 reported gross profit | $ | 78.9 | |
The increase in Montana/Renewables segment gross profit for the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to the de-recognition of the RINs Obligation on the Company’s balance sheet for the SRE exemptions received by EPA in August 2025. The unfavorable impact associated with cost of materials was primarily the result of the regulatory change from BTC to PTC. In the prior year period, Montana Renewables’ cost of materials benefited approximately $1.00 per gallon from the BTC, whereas this benefit is reduced to zero in the current period, as the PTC is accounted for as a deferred tax asset and not recognized in cost of sales. Our Montana specialty asphalt business was favorably impacted by the continued export of wholesale volumes and improvements in crack spreads. The segment as a whole benefited from continued focus on operating cost efficiency, highlighted by the significant cost reductions for wash water and process materials as a result of improving certain operating unit efficiency at both our Montana Renewables facility and legacy Montana specialty asphalt facility. 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 our accounting for RINs.
The components of the $4.2 million decrease in Performance Brands segment gross profit for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, were as follows:
| Dollar Change | ||
| (In millions) | ||
Three months ended September 30, 2024 reported gross profit | $ | 22.7 | |
Sales price |
| 2.7 | |
Operating costs |
| (2.5) | |
LCM / LIFO inventory adjustments |
| (0.9) | |
Volume |
| (1.2) | |
Cost of materials |
| (2.3) | |
Three months ended September 30, 2025 reported gross profit | $ | 18.5 | |
Performance Brands segment gross profit for the three months ended September 30, 2025, as compared to the same period in 2024, was essentially flat, after adjusting for the divestiture of the RPI business. This reflects strong unit margins, supported by stabilized input costs in our branded and consumer markets.
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Table of Contents
Changes in Results of Operations for the Nine Months Ended September 30, 2025 and 2024
Sales. Sales decreased $141.4 million, or 4.4%, to $3,098.5 million in the nine months ended September 30, 2025, from $3,239.9 million in the same period in 2024. Sales for each of our principal product categories in these periods were as follows:
| Nine Months Ended September 30, | ||||||||
2025 |
| 2024 |
| % Change | |||||
(In millions, except barrel and per barrel data) | |||||||||
Sales by segment: | |||||||||
Specialty Products and Solutions: | |||||||||
Lubricating oils | $ | 576.0 | $ | 598.1 |
| (3.7) | % | ||
Solvents |
| 303.9 |
| 318.0 |
| (4.4) | % | ||
Waxes |
| 115.4 |
| 117.9 |
| (2.1) | % | ||
Fuels, asphalt and other by-products (1) |
| 961.8 |
| 1,107.8 |
| (13.2) | % | ||
Total Specialty Products and Solutions | $ | 1,957.1 | $ | 2,141.8 |
| (8.6) | % | ||
Total Specialty Products and Solutions sales volume (in barrels) |
| 16,838,000 |
| 17,202,000 |
| (2.1) | % | ||
Average Specialty Products and Solutions sales price per barrel | $ | 116.23 | $ | 124.51 |
| (6.7) | % | ||
Montana/Renewables: |
|
|
|
|
|
| |||
Gasoline | $ | 101.8 | $ | 110.0 |
| (7.5) | % | ||
Diesel |
| 79.4 |
| 87.9 |
| (9.7) | % | ||
Jet Fuel |
| 15.4 |
| 14.8 |
| 4.1 | % | ||
Asphalt, heavy fuel oils and other (2) |
| 123.5 |
| 118.5 |
| 4.2 | % | ||
Renewable fuels | 578.8 | 510.8 | 13.3 | % | |||||
Total Montana/Renewables | $ | 898.9 | $ | 842.0 |
| 6.8 | % | ||
Total Montana/Renewables sales volume (in barrels) |
| 6,905,000 |
| 6,630,000 |
| 4.1 | % | ||
Average Montana/Renewables sales price per barrel | $ | 130.18 | $ | 127.00 |
| 2.5 | % | ||
Performance Brands: | |||||||||
Total Performance Brands (3) | $ | 242.5 | $ | 256.1 |
| (5.3) | % | ||
Total Performance Brands sales volume (in barrels) |
| 462,000 |
| 478,000 |
| (3.3) | % | ||
Average Performance Brands sales price per barrel | $ | 524.89 | $ | 535.77 |
| (2.0) | % | ||
Total sales | $ | 3,098.5 | $ | 3,239.9 |
| (4.4) | % | ||
Total Specialty Products and Solutions, Montana/Renewables, and Performance Brands sales volume (in barrels) |
| 24,205,000 |
| 24,310,000 |
| (0.4) | % | ||
| (1) | Represents (a) by-products, including fuels and asphalt, produced in connection with the production of specialty products at the Princeton and Cotton Valley facilities and Dickinson and Karns City facilities, (b) polyolester synthetic lubricants produced at the Missouri facility, and (c) fuels products produced at the Shreveport facility. |
| (2) | Represents asphalt, heavy fuel oils and other products produced in connection with the production of fuels at the Great Falls specialty asphalt facility. |
| (3) | Represents packaged and synthetic specialty products at the Royal Purple, Bel-Ray and Calumet Packaging facilities. |
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Table of Contents
The components of the $184.7 million decrease in Specialty Products and Solutions segment sales for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, were as follows:
| Dollar Change | ||
(In millions) | |||
Sales price | $ | (139.4) | |
Volume | (45.3) | ||
Total Specialty Products and Solutions segment sales decrease | $ | (184.7) | |
Specialty Products and Solutions segment sales decreased period over period, primarily due to lower crude oil prices in the current year period. Although underlying market demand remained strong, sales volumes were impacted by a planned turnaround at our Shreveport facility and short-term rail provider disruptions that delayed shipments in the current year period.
The components of the $56.9 million increase in Montana/Renewables segment sales for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, were as follows:
| Dollar Change | ||
(In millions) | |||
Sales price | $ | 21.9 | |
Volume | 35.0 | ||
Total Montana/Renewables segment sales increase | $ | 56.9 | |
Montana/Renewables segment sales increased primarily due to higher renewable fuels product prices at our Montana Renewables facility during the current year compared to the prior period. This was coupled with the favorable volumes impact at our Montana specialty asphalt facility as a result of the reduction of feedstock and intermediates inventories in the current period. Strong production at our Montana Renewables facility during the current year period also resulted in a favorable volumes impact.
The components of the $13.6 million decrease in Performance Brands segment sales for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, were as follows:
| Dollar Change | ||
(In millions) | |||
Sales price | $ | (5.0) | |
Volume | (8.6) | ||
Total Performance Brands segment sales decrease | $ | (13.6) | |
Performance Brands segment sales decreased primarily due to lower sales volumes as a result of the divestiture of the Royal Purple Industrial business.
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Table of Contents
Gross Profit. Gross profit increased $101.5 million, or 69.0%, to gross profit of $248.7 million in the nine months ended September 30, 2025, from gross profit of $147.2 million in the same period in 2024. Gross profit for our business segments were as follows:
| Nine Months Ended September 30, | ||||||||
2025 |
| 2024 |
| % Change | |||||
| (Dollars in millions, except per barrel data) | ||||||||
Gross profit by segment: | |||||||||
Specialty Products and Solutions: | |||||||||
Gross profit | $ | 227.4 | $ | 126.7 |
| 79.5 | % | ||
Percentage of sales |
| 11.6 | % |
| 5.9 | % | 5.7 | % | |
Specialty Products and Solutions gross profit per barrel | $ | 13.51 | $ | 7.37 |
| 83.2 | % | ||
Montana/Renewables: |
|
|
|
|
|
| |||
Gross profit (loss) | $ | (41.5) | $ | (49.6) |
| (16.3) | % | ||
Percentage of sales |
| (4.6) | % |
| (5.9) | % | 1.3 | % | |
Montana/Renewables gross profit (loss) per barrel | $ | (6.01) | $ | (7.48) |
| (19.7) | % | ||
Performance Brands: |
|
|
|
|
|
| |||
Gross profit | $ | 62.8 | $ | 70.1 |
| (10.4) | % | ||
Percentage of sales |
| 25.9 | % |
| 27.4 | % | (1.5) | % | |
Performance Brands gross profit per barrel | $ | 135.93 | $ | 146.65 |
| (7.3) | % | ||
Total gross profit | $ | 248.7 | $ | 147.2 |
| 69.0 | % | ||
Percentage of sales |
| 8.0 | % |
| 4.5 | % | 3.5 | % | |
The components of the $100.7 million increase in Specialty Products and Solutions segment gross profit for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, were as follows:
| Dollar Change | ||
(In millions) | |||
Nine months ended September 30, 2024 reported gross profit | $ | 126.7 | |
Cost of materials |
| 180.7 | |
Operating costs |
| (13.6) | |
LCM / LIFO inventory adjustments |
| (4.3) | |
Volumes |
| (8.7) | |
Sales price | (139.4) | ||
RINs expense | 86.0 | ||
Nine months ended September 30, 2025 reported gross profit | $ | 227.4 | |
The increase in Specialty Products and Solutions segment gross profit for the nine months ended September 30, 2025 as compared to the same period in 2024, was primarily due to the de-recognition of the RINs Obligation on the Company’s balance sheet for the SRE exemptions received by EPA in August 2025. The favorable margin impact was primarily the result of the strengthened commodity margin environment for fuels products, coupled with lower crude oil prices. 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 our accounting for RINs.
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The components of the $8.1 million increase in Montana/Renewables segment gross profit for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, were as follows:
Dollar Change | |||
| (In millions) | ||
Nine months ended September 30, 2024 reported gross profit (loss) | $ | (49.6) | |
Cost of materials |
| (129.2) | |
LCM / LIFO inventory adjustments |
| 11.8 | |
Volumes |
| 7.1 | |
RINs expense | 57.5 | ||
Operating costs |
| 39.0 | |
Sales price |
| 21.9 | |
Nine months ended September 30, 2025 reported gross profit (loss) | $ | (41.5) | |
The increase in Montana/Renewables segment gross profit for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to the de-recognition of the RINs Obligation on the Company’s balance sheet for the SRE exemptions received by EPA in August 2025. The unfavorable impact associated with cost of materials was primarily the result of the regulatory change from BTC to PTC. In the prior year period, Montana Renewables’ cost of materials benefited approximately $1.00 per gallon from the BTC, whereas this benefit is reduced to zero in the current period, as the PTC is accounted for as a deferred tax asset and not recognized in cost of sales. Our Montana specialty asphalt business was favorably impacted by the continued export of wholesale volumes and improvements in crack spreads. The segment as a whole benefited from continued focus on operating cost efficiency, highlighted by the significant cost reductions for wash water and process materials as a result of improving certain operating unit efficiency at both our Montana Renewables facility and legacy Montana specialty asphalt facility. 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 our accounting for RINs.
The components of the $7.3 million decrease in Performance Brands segment gross profit for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, were as follows:
| Dollar Change | ||
| (In millions) | ||
Nine months ended September 30, 2024 reported gross profit | $ | 70.1 | |
Sales price |
| (5.0) | |
Operating costs |
| (1.8) | |
LCM / LIFO inventory adjustments |
| (1.8) | |
Volume |
| (3.1) | |
Cost of materials |
| 4.4 | |
Nine months ended September 30, 2025 reported gross profit | $ | 62.8 | |
The decrease in Performance Brands segment gross profit for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to the divestiture of the Royal Purple Industrial business in the current year period. This segment continues to benefit from strong unit margins, reflective of stabilized input costs in our branded and consumer markets.
Gain on sale of business. There was a $55.8 million gain on sale of business in the nine months ended September 30, 2025 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 same period in 2024. 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.
Debt extinguishment costs. There was a $47.2 million expense for debt extinguishment costs in the nine months ended September 30, 2025 related to the repurchase of the equipment associated with the MRL Asset Financing Arrangements,
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repayment of outstanding loans under the MRL Term Loan Credit Agreement and MRL Revolving Credit Agreement and repayment of outstanding obligations under the MRL Supply and Offtake Agreement. Debt extinguishment expense recorded in the same period in 2024 was a de-minimis amount. Refer to Note 7 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information.
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 2024 Annual Report. There have been no material changes in that information other than as discussed below. Also, see Note 6 — “Inventory Financing Agreements” and Note 7 — “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:
Nine Months Ended September 30, | |||||||
| 2025 |
| 2024 |
| |||
| (In millions) |
| |||||
Net cash used in operating activities | $ | (7.6) | $ | (43.0) | |||
Net cash provided by (used in) investing activities |
| 55.8 |
| (51.7) | |||
Net cash provided by financing activities |
| 80.5 |
| 122.3 | |||
Net increase in cash, cash equivalents and restricted cash | $ | 128.7 | $ | 27.6 | |||
Operating Activities. Operating activities used cash of $7.6 million during the nine months ended September 30, 2025 compared to using cash of $43.0 million during the same period in 2024. This change was primarily related to an increase in the cash required for working capital during the current year period.
Investing Activities. Investing activities provided cash of $55.8 million during the nine months ended September 30, 2025 compared to a use of cash of $51.7 million during the same period in 2024. The change is related to the net proceeds received for the sale of the Royal Purple Industrial business in the current year period. Cash expenditures for additions to property, plant and equipment in the current year period were essentially flat in comparison to the prior year.
Financing Activities. Financing activities provided cash of $80.5 million in the nine months ended September 30, 2025 compared to providing cash of $122.3 million during the same period in 2024. The change is primarily due to the
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borrowings we received in the current year period from the DOE Loan, 2028 Mirror Issuance Notes, and Shreveport Terminal Asset Financing Arrangement, offset by the payments we made in the current year 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, repay the outstanding obligations under the MRL Supply and Offtake Agreement, and partially redeem the 2026 Notes. Cash provided by financing activities in the prior year period primarily consisted of borrowings under the revolving credit facility and proceeds from the issuance of the 2029 Secured Notes, the impacts of which were partially offset by the repayment of the 2024 Secured Notes.
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 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):
Nine Months Ended September 30, | |||||||
| 2025 |
| 2024 |
| |||
| (In millions) |
| |||||
Capital improvement expenditures | $ | 7.9 | $ | 10.1 | |||
Replacement capital expenditures |
| 29.8 |
| 38.3 | |||
Environmental capital expenditures |
| 1.9 |
| 3.3 | |||
Turnaround capital expenditures |
| 23.3 |
| 17.9 | |||
Total | $ | 62.9 | $ | 69.6 | |||
2025 Capital Spending Forecast
We are forecasting total capital expenditures of approximately $60 million to $90 million in 2025. Our forecasted capital expenditures are primarily related to maintenance and reliability projects and excludes capital expenditures associated with MaxSAFTM. We anticipate that capital expenditure requirements will be provided primarily through cash flows from operations, cash on hand, and by available borrowings under our revolving credit facility. We anticipate that capital expenditure requirements for the MaxSAFTM project will be funded primarily from cash flows from operations generated by MRL, an unrestricted subsidiary of the Company, and borrowings under the DOE 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 September 30, 2025, our primary debt and credit instruments consisted of the following:
| ● | $650.0 million senior secured revolving credit facility maturing in January 2027 (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”); |
| ● | $124.4 million of 11.00% Senior Notes due 2026 (“2026 Notes”); |
| ● | $325.0 million of 8.125% Senior Notes due 2027 (“2027 Notes”); |
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| ● | $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”); |
| ● | $200.0 million of 9.25% Senior Secured First Lien Notes due 2029 (“2029 Secured Notes”); |
| ● | $805.5 million of borrowings under our DOE Loan; |
| ● | $118.5 million of financing through our Shreveport terminal asset financing arrangement; |
| ● | $26.7 million of financing through our Montana terminal asset financing arrangement; and |
| ● | $143.5 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 September 30, 2025 and believe we have adequate liquidity to conduct our business.
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 $1.44 billion guaranteed loan facility to fund the construction and expansion of the renewable fuels facility owned by MRL. The loan guarantee is structured in two tranches, with the first tranche of approximately $781.8 million disbursed on February 18, 2025 (the “Funding Date”) to fund eligible expenses previously incurred by MRL. MRL has the ability to draw additional tranches of up to approximately $658.0 million through a delayed draw construction facility. 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. Refer to Note 7 — “Long-Term Debt” in Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information.
On January 16, 2025, the Issuers issued $100.0 million aggregate principal amount of a new series of the Issuers’ 9.75% Senior Notes due 2028 in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act. The 2028 Mirror Issuance Notes were issued at 98% of par for net proceeds of approximately $96.0 million, after deducting the initial purchasers’ discount and estimated offering expenses. The Company used the net proceeds from the offering of the Notes to redeem a portion of the Issuers’ outstanding 2026 Notes on May 24, 2025. Refer to Note 7 — “Long-Term Debt” in Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information.
On September 30, 2024, Calumet Montana Refining, LLC (“Calumet Montana”), a subsidiary of the Company, entered into the Montana Refinery Asset Financing Arrangement with Stonebriar related to a sale and leaseback transaction. Pursuant to the Montana Refinery Asset Financing Arrangement, Calumet Montana sold to and leased back from Stonebriar the Refinery Assets, for a total purchase price of up to $150.0 million. Calumet Montana received $110.0 million of the total purchase price on September 30, 2024 and the remaining purchase price of $40.0 million was disbursed to the Company on February 18, 2025 in connection with the funding of the first tranche of approximately $781.8 million under the DOE Facility. Refer to Note 7 — “Long-Term Debt” in Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information.
The borrowing base on our credit facilities decreased from approximately $508.4 million as of September 30, 2024, to approximately $448.8 million at September 30, 2025. Our borrowing availability decreased from approximately $255.2 million at September 30, 2024, to approximately $209.8 million at September 30, 2025. Total liquidity, consisting of unrestricted cash, restricted cash and available funds under our credit facilities, increased from $289.8 million at September 30, 2024 to $384.4 million at September 30, 2025.
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Inventory Financing
Refer to Note 6 — “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 September 30, 2025, our principal sources of short-term liquidity were (i) $209.8 million of availability under our credit facilities, (ii) an inventory financing agreement related to our Shreveport facility, (iii) $94.6 million of unrestricted cash on hand, and (iv) $80.0 million of restricted cash. Borrowings under our revolving credit facilities 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 facilities, see Note 7 — “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 September 30, 2025, we had $124.4 million in 2026 Notes, $325.0 million in 2027 Notes, $325.0 million in 2028 Notes, $100.0 million in 2028 Mirror Issuance Notes, and $200.0 million in 2029 Secured Notes outstanding. In addition, as of September 30, 2025, we had $805.5 million of debt outstanding for the DOE Loan, $118.5 million of other debt outstanding for the Shreveport terminal asset financing arrangement, $26.7 million of other debt outstanding for the Montana terminal asset financing arrangement, and $143.5 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.
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 7 — “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 2024 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 2024 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 2024 Annual Report.
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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, 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 purchases and sales; |
| ● | refined 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 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 8 — “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.
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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 $65.0 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 September 30, 2025 and December 31, 2024, which we disclose in Note 7 — “Long-Term Debt” and Note 9 — “Fair Value Measurements” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements.”
September 30, 2025 | December 31, 2024 | |||||||||||
| Fair Value |
| Carrying Value |
| Fair Value |
| Carrying Value | |||||
(In millions) | ||||||||||||
Financial Instrument: | ||||||||||||
2026 Notes | $ | 125.1 | $ | 124.2 | $ | 358.0 | $ | 354.0 | ||||
2027 Notes | $ | 321.1 | $ | 323.7 | $ | 322.4 | $ | 323.1 | ||||
2028 Notes & 2028 Mirror Issuance Notes | $ | 422.6 | $ | 417.7 | $ | 331.8 | $ | 320.6 | ||||
2029 Secured Notes | $ | 212.0 | $ | 199.1 | $ | 206.1 | 199.0 | |||||
Revolving credit facility | $ | 167.6 | $ | 165.6 | $ | 286.6 | $ | 283.6 | ||||
MRL revolving credit facility | $ | — | $ | — | $ | — | $ | (0.3) | ||||
MRL Term Loan Credit Agreement | $ | — | $ | — | $ | 73.7 | $ | 71.4 | ||||
DOE Loan | $ | 805.5 | $ | 785.4 | $ | — | $ | — | ||||
Shreveport terminal asset financing arrangement | $ | 118.5 | $ | 115.9 | $ | 42.1 | $ | 41.6 | ||||
Montana terminal asset financing arrangement | $ | 26.7 | $ | 26.6 | $ | 30.4 | $ | 30.2 | ||||
Montana refinery asset financing arrangement | $ | 143.5 | $ | 142.3 | $ | 108.7 | $ | 108.7 | ||||
MRL asset financing arrangements | $ | — | $ | — | $ | 368.1 | $ | 365.4 | ||||
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 $650.0 million revolving credit facility as of September 30, 2025, with borrowings for the revolving credit facility bearing interest at the prime rate or SOFR, at our option, plus the applicable margin. We had $167.6 million of outstanding variable rate debt as of September 30, 2025 and $286.6 million of outstanding variable rate debt as of December 31, 2024. Holding other variables constant (such as debt levels), a 100 basis point change in interest rates on our variable rate debt as of September 30, 2025, would be expected to have an impact on Net income (loss) of approximately $1.7 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.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) of 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.
In connection with the restatement of our unaudited condensed consolidated financial statements for the periods ended March 31, 2025 and June 30, 2025, our principal executive officer and principal financial officer have concluded that, due to the material weakness in our internal control over financial reporting as described below, our disclosure controls and procedures were not effective as of September 30, 2025.
Our disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed by us in reports that we file 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.
Material Weakness in Internal Control over Financial Reporting
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
During the preparation of the Company’s unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2025, the Company identified an error in the Company’s historical unaudited condensed consolidated statements of cash flows for the periods ended March 31, 2025 and June 30, 2025 that caused the misclassification of certain amounts between cash flows from operating activities and cash flows from financing activities. This error had no impact on revenue, net income (loss), cash, cash equivalents or restricted cash. The misclassifications related to the Company’s debt extinguishment costs from its refinancing activities for its outstanding indebtedness and one of its inventory financing arrangements. The Company determined that this error originated from a newly identified material weakness related to the preparation and review of the unaudited condensed consolidated statements of cash flows.
On November 10, 2025, we restated our unaudited condensed consolidated financial statements for the quarter ended March 31, 2025 in Amendment No. 1 to our Quarterly Report on Form 10-Q/A and for the quarter ended June 30, 2025 in Amendment No. 1 to our Quarterly Report on Form 10-Q/A, in each case, to correct the identified errors described above.
Remediation Plan
We have evaluated the material weakness and have implemented and continue to implement a plan of remediation to strengthen our internal controls over financial reporting, specifically around the presentation and classification of information on the statement of cash flows that have been implemented as part of our controls for the period ended September 30, 2025. The remediation efforts are intended to address the deficiencies and enhance our overall internal control environment.
We believe the measures described above along with other elements of our ongoing remediation plan will remediate the material weakness identified and strengthen our internal control over financial reporting. While we believe that these efforts will improve our internal control over financial reporting, the implementation of our remediation is currently ongoing and will require validation and testing of the design and operating effectiveness of our internal controls.
We are committed to continuing to improve our internal control processes and have implemented the steps described above. We will also continue to review, optimize and enhance our financial reporting controls and procedures. As we
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continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies or we may modify certain of the remediation measures described above.
Changes in Internal Control over Financial Reporting
Other than the actions to remediate the material weakness in our internal control over financial reporting as described above, which were ongoing as of the date of issuance of this Form 10-Q, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II
Item 1. Legal Proceedings
We are not a party to, and our property is not the subject of, any pending legal proceedings other than ordinary routine litigation incidental to our business. Our operations are subject to a variety of risks and disputes normally incidental to our business. As a result, we may, at any given time, be a defendant in various legal proceedings and litigation arising in the ordinary course of business. The information provided under Note 5 — “Commitments and Contingencies” in Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” 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 2024 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. Except as set forth below, there have been no material changes in the risk factors discussed in Part I, Item 1A “Risk Factors” in our 2024 Annual Report.
We identified a material weakness in our internal control over financial reporting, and if we are unable to remediate this material weakness, or if we experience additional material weaknesses or other deficiencies in the future or otherwise fail to maintain an effective system of internal control, we may not be able to accurately and timely report our financial results.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements may not be prevented or detected on a timely basis. In connection with the preparation of our unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2025, we identified a material weakness related to the preparation and review of the unaudited condensed consolidated statements of cash flows.
Remediation efforts place a significant burden on management and add increased pressure to our financial resources and processes. As a result, we may not be successful in making the improvements necessary to remediate the material weakness identified by management, be able to do so in a timely manner, or be able to identify and remediate additional control deficiencies, including material weaknesses, in the future. Additionally, completion of remediation does not provide assurance that our remediation or other controls will continue to operate properly or remain adequate and we cannot assure you that we will not identify additional material weaknesses in our internal control over financial reporting in the future.
If we are unable to successfully remediate our existing material weakness or any future material weaknesses or other deficiencies in our internal control over financial reporting or disclosure controls and procedures, our ability to record, process and report financial information accurately, and to prepare financial statements within the time periods specified by the rules and forms of the SEC, could be adversely affected. This failure could negatively affect the market price and trading liquidity of our common stock, cause investors to lose confidence in our reported financial information, subject us to civil and criminal investigations and penalties and generally materially and adversely impact our business and financial condition.
We reached a determination to restate certain of our previously issued unaudited condensed consolidated financial statements, which may affect investor confidence.
We previously reached a determination to restate our unaudited consolidated financial statements and related disclosures for the quarters ended March 31, 2025 and June 30, 2025, following the identification of an error in the unaudited condensed consolidated statements of cash flows as a result of the misclassification of certain amounts between cash flows from operating activities and cash flows from financing activities. As a result, we have become subject to a number of additional risks and uncertainties, which may affect investor confidence in the accuracy of our financial disclosures.
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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 September 30, 2025, no director or officer of the Company
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Item 6. Exhibits
Exhibit Number |
| Description |
2.1 | Conversion Agreement, dated as of February 9, 2024, by and among Calumet Specialty Products Partners, L.P., Calumet GP, LLC, Calumet, Inc., Calumet Merger Sub I LLC, Calumet Merger Sub II LLC and the other parties thereto (incorporated by reference to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed with the Commission on February 12, 2024). | |
2.2 | First Amendment to Conversion Agreement, dated as of April 17, 2024, by and among Calumet Specialty Products Partners, L.P., Calumet GP, LLC, Calumet, Inc., Calumet Merger Sub I LLC, Calumet Merger Sub II LLC and the other parties thereto (incorporated by reference to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed with the Commission on April 19, 2024). | |
2.3 | Partnership Restructuring Agreement, dated as of November 9, 2023, by and among the Partnership, the General Partner and the other parties thereto (incorporated by reference to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed with the Commission on November 9, 2023). | |
2.4 | First Amendment to Partnership Restructuring Agreement, dated as of February 9, 2024, by and among Calumet Specialty Products Partners, L.P., Calumet GP, LLC and the other parties thereto (incorporated by reference to Exhibit 10.2 to the Partnership’s Current Report on Form 8-K filed with the Commission on February 12, 2024). | |
3.1 | Amended and Restated Certificate of Incorporation of Calumet, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on July 10, 2024). | |
3.2 | Amended and Restated Bylaws of Calumet, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the Commission on July 10, 2024). | |
10.1 | Master Lease Agreement, dated as of February 12, 2021, together with Property Schedule No. 2 thereto, dated as of July 25, 2025, by and between Stonebriar Commercial Finance LLC and Calumet Shreveport Refining, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on August 8, 2025). | |
10.2 | Eighth Amendment to Third Amended and Restated Credit Agreement, dated as of July 25, 2025, by and among Calumet, Inc., Bank of America, N.A. and the other parties signatory thereto (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on August 8, 2025). | |
10.3 | Third Amendment to the Monetization Master Agreement, dated as of July 25, 2025, by and among Calumet, Inc., J. Aron & Company LLC and the other parties thereto (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on August 8, 2025). | |
31.1* | Sarbanes-Oxley Section 302 certification of Todd Borgmann. | |
31.2* | Sarbanes-Oxley Section 302 certification of David Lunin. | |
32.1** | 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 | |
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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 September 30, 2025, 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: November 10, 2025 | By: | /s/ David Lunin | |
David Lunin | |||
Executive Vice President and Chief Financial Officer | |||
(Authorized Person and Principal Financial Officer) | |||
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FAQ
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Did CLMT complete any asset sales?
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