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 six months ended June 30, 2026. Stockholders should read the following discussion and analysis of our financial condition and results of operations in conjunction with our 2025 Annual Report and our historical unaudited condensed consolidated financial statements and notes included elsewhere in this Quarterly Report.
Overview
We manufacture, formulate and market a diversified slate of specialty branded products and renewable fuels to customers across a broad range of consumer-facing and industrial markets. We are headquartered in Indianapolis, Indiana and operate twelve facilities throughout North America.
Our operations are managed using the following reportable segments: Specialty Products and Solutions; Performance Brands; and Montana/Renewables. For additional information, see Note 10 — “Segments and Related Information” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements.” In our Specialty Products and Solutions segment, we manufacture and market a wide variety of solvents, waxes, customized lubricating oils, white oils, petrolatums, gels, esters, and other products. Our specialty products are sold to domestic and international customers who purchase them primarily as raw material components for consumer-facing and industrial products. In our Performance Brands segment, we blend, package and market high performance products through our Royal Purple, Bel-Ray, and TruFuel brands. Our Montana/Renewables segment is comprised of two facilities located in Great Falls, Montana — renewable fuels and specialty asphalt. At our renewable fuels facility, we process a variety of geographically advantaged renewable feedstocks into renewable diesel, sustainable aviation fuel, renewable hydrogen, renewable natural gas, renewable propane, and renewable naphtha that are distributed into renewable markets in the western half of North America. At our specialty asphalt facility, we process Canadian crude oil into conventional gasoline, diesel, jet fuel and specialty grades of asphalt, with production sized to serve local markets.
Recent Developments
Continued Debt Reduction
On July 15, 2026, the Company's wholly owned subsidiaries, Calumet Specialty Products Partners, L.P. (the "Partnership") and Calumet Finance Corp. (together with the Partnership, the "Issuers"), redeemed all of the outstanding $100.0 million 9.75% Senior Notes due 2028 that were originally issued in January 2025 (the "2028 Mirror Notes"), at a cash redemption price of 102.438% of the principal amount, plus accrued and unpaid interest up to but not including the redemption date.
In addition, on July 31, 2026, we completed early termination of our Montana terminal asset financing arrangement for approximately $15.5 million. The Company remains focused on strong operations and continued use of cash from operations to pay down debt in future periods.
Exercise of Warrants Issued in Corporate Conversion
During the three months ended June 30, 2026, all 2,000,000 outstanding warrants issued in connection with the Company's July 2024 C-Corp conversion were exercised. As a result, the Company reclassified approximately $7.8 million from warrant equity to common stock and additional paid-in capital. As of June 30, 2026, no warrants to purchase common stock of Calumet, Inc. remain outstanding.
Montana/Renewables MaxSAF® 150 Update
Our MaxSAF® 150 expansion at Montana renewables was completed successfully during the second quarter. The Montana/Renewables segment Adjusted EBITDA with Tax Attributes was $26.6 million in the second quarter of 2026. For Montana Renewables, the impact from the planned downtime in April and May associated with the MaxSAF® 150 expansion and turnaround resulted in an estimated loss of approximately 450,000 barrels of production.
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Crack Spread Swaps Sales and Purchase Contracts
As of July 31, 2026, we had the following notional contracts related to outstanding crack spread swap contracts, which are derivative instruments not designated as hedges. Periodically, the Company may enter into an offsetting position to effectively close out its exposure under an existing contract as it approaches expiration.
Period of Maturity Total Outstanding Notional Volumes 2-1-1 Crack Spread Swap Sales (bpd) Avg. Strike Price ($/bbl) for 2-1-1 Crack Spread Swap Sales Based on CBOB
3Q 2026 10,000 $21.66
4Q 2026 15,000 $20.70
1Q 2027 15,000 $33.12
2Q 2027 10,000 $27.21
3Q 2027 10,000 $26.11
4Q 2027 10,000 $24.57
1Q 2028 10,000 $28.36
See Note 7 — “Derivatives” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information related to the Company’s derivatives.
Update Regarding Renewable Volume Obligation
On March 27, 2026, EPA announced a final rule to establish required Renewable Fuel Standard Volumes and percentage standards for 2026 and 2027, which sets the highest renewable fuel volumes in the history of the program. The EPA’s updated Renewable Volume Obligations (“RVOs”) establish total demand of 26.81 billion RINs and 27.02 billion RINs for 2026 and 2027, respectively, providing a historic level of annualized support for the biofuels industry. The 2026 and 2027 volumes include some earlier renewable fuel volumes previously waived through small refinery exemptions (“SREs”) across the 2023–2025 compliance periods. These actions are expected to improve biobased diesel industry margins and industry utilization, and attract currently idled higher-cost biodiesel producers to re-enter the market in order to meet mandated demand. The RVO framework is aligned with a broader national focus on domestic energy security. The EPA has also proposed that beginning in 2028, foreign source renewable fuels and feedstocks will receive only half the RFS compliance value of American-made products, materially enhancing the competitive position of domestic producers. Against this favorable regulatory backdrop, MRL’s strategic location and proximity to domestic customers and suppliers position the company for strong performance in the second half of 2026, continued momentum into 2027, and a sustained long-term competitive advantage.
Second Quarter 2026 Update
Outlook and Trends
We believe the business is positioned to deliver outsize performance, supported by fundamentally tighter global market conditions across refined fuels and specialty products. Our diversified customer base, resilient specialty portfolio, and multi-year capital investments into enhanced operational reliability position us to capitalize on the current margin environment. Global refined product markets have tightened materially in response to conflict in the Middle East. Benchmark crack spreads are reaching record levels amid the overlapping impacts of idled or offline Middle Eastern and Russian refining capacity and historically low U.S. refined product inventory levels. Because substantially all of our crude supply is sourced from North America, our supply chain is comparatively insulated from the seaborne disruptions affecting global markets. Similar dynamics are at play within our specialty products portfolio. With a significant portion of global Group III base oils supply trapped within the Persian gulf or having been removed from the market, we are experiencing increased demand as consumers substitute into Group I and Group II base oils where possible. The durability and magnitude of these conditions remain uncertain, and depend significantly on the recovery of shipping flows through the Strait of Hormuz.
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At Montana Renewables, we continue to meet or outperform our operational cost targets prior to the start of our MaxSAF® 150 expansion and turnaround that began in early March, while demonstrating success in monetizing Section 45Z Clean Fuel Production Tax Credits (“CFPCs”). The MaxSAF® 150 expansion and turnaround was successfully completed in approximately 48 days and the facility resumed production in the second quarter of 2026. Our overall enhanced operational performance is a direct result of our focus on operational excellence since we completed commissioning in 2023.
Specialty Products and Solutions results improved significantly in the second quarter as compared to both the prior quarter and prior year, following the temporary compression experienced in the first quarter, as previously implemented price increases reached full realization and crude oil prices declined. Our fuels and asphalt business also benefited from the resolution of the temporary Shreveport production issues that impacted the first quarter, further improving commodity margins. Margins in our Performance Brands segment remained compressed, as ongoing supply constraints in global specialty Group III base oil and synthetic feedstock markets kept input costs elevated despite lower crude oil prices. Demand for our products in these businesses remained strong and we continue to leverage the benefits of our fully integrated specialty business in this market. We expect the current margin environment for both specialty products and fuel-based products to continue to be volatile, and above historical industry margins in the near-term due to the Iran conflict impacting global feedstocks.
In our Montana/Renewables segment, we believe long-term demand for renewable fuel products will continue to grow supported by Federal, State, Provincial and local governmental mandates and incentives that have been enacted or announced in North America and globally. Collectively, these policies focus on domestic fuel security, strategic alignment with the agricultural industry as a source of renewable feedstocks, sustainability initiatives, transportation fuel cleanliness including ongoing reduction in particulates, and expansion of both voluntary and mandatory corporate decarbonization targets, particularly for hard-to-abate sectors including the global aviation industry. We believe that our advantage as a first-mover in sustainable aviation fuels market positions us as a preferred supplier to our potential offtake partners’ SAF strategies. The start-up of our MaxSAF® 150 project allows us to shift our renewable product mix toward more SAF production which has historically realized higher pricing relative to renewable diesel, and we expect this change in product mix to support improved margin realizations immediately and long-term. The margins experienced late in the second quarter of 2026 after the completion of the project referenced above are significantly above the prior year and have continued early on in the third quarter of 2026.
Contingencies
For a summary of litigation and other contingencies, refer to Note 4 — “Commitments and Contingencies” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements.” Based on information available to us at the present time, we do not believe that any liabilities beyond the amounts already accrued, which may result from these contingencies, will have a material adverse effect on our liquidity, financial condition or results of operations.
Financial Results
We reported net loss of $95.9 million in the second quarter 2026 versus a net loss of $147.9 million in the second quarter 2025. Net loss in the second quarter of 2026 was significantly impacted by the following non-cash items:
•$9.0 million unrealized gain on derivatives; and
•$163.6 million of non-cash RINs related expense.
We reported Adjusted EBITDA with Tax Attributes (as defined in Note 10 — “Segments and Related Information” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements”) of $175.2 million in the second quarter 2026 versus $76.5 million in the second quarter 2025. We generated cash from operating activities of $92.3 million in the second quarter 2026 versus using cash from operating activities of $1.8 million in the second quarter of 2025.
Refer to Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures” for a reconciliation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes to Net income (loss), our most directly comparable financial performance measure calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”).
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Specialty Products and Solutions segment Adjusted EBITDA was $161.7 million in the second quarter 2026 versus $66.8 million in the second quarter 2025. Compared to the prior period, Specialty Products and Solutions second quarter 2026 segment Adjusted EBITDA was positively impacted by expanded margins driven by the full realization of previously implemented price increases made as a result of the global conflicts impacting the industry and lower crude oil costs, and improved production following a planned Shreveport turnaround in June 2025 that reduced output in the prior year period.
Montana/Renewables segment Adjusted EBITDA was $10.7 million in the second quarter 2026 versus loss of $5.1 million in the second quarter 2025. Montana/Renewables segment Adjusted EBITDA with Tax Attributes was $26.6 million in the second quarter 2026 compared to $16.3 million in the prior period. Compared to the prior year, Montana/Renewables segment Adjusted EBITDA with Tax Attributes primarily reflected lower renewable fuels production volumes of 41.8% in the current period due to planned turnaround and MaxSAF® 150 project activity and was still able to deliver a $10.3 million increase in Adjusted EBITDA with Tax Attributes. This significant improvement in performance is a direct result of improved margins on renewable fuel sales, operating cost improvements realized through previously discussed initiatives and a continued focus on improving in our carbon intensity (CI) metrics. As discussed above, EPA’s final Renewable Volume Obligation (“RVO”) has been received favorably by the market, contributing to improved market pricing for renewable fuels and related credit values. These conditions supported renewable fuel margins during the period and increased market confidence in industry fundamentals. The above results were further impacted by gains in legacy fuel margins partially offset by weaker asphalt margins resulting from the lag in asphalt price increases following a period of elevated crude oil costs. However, June marked a turnaround in asphalt margins, which returned to positive territory.
Performance Brands segment Adjusted EBITDA was $6.3 million in the second quarter 2026 versus $13.5 million in the second quarter 2025. The decline was driven by margin compression, as elevated input costs for Group III base oils and synthetic feedstocks continued to outpace realized price increases. This segment continues to implement pricing actions to recover margin as input costs remain elevated. The segment's current period results also reflect a $7.3 million LIFO-to-FIFO differential, representing the impact of rising feedstock costs on cost of sales under our LIFO inventory accounting method. Refer to to Note 3 — “Inventories” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for further information regarding our LIFO inventory valuation methodology.
Liquidity Update
As of June 30, 2026, we had total liquidity of $581.6 million comprised of $109.8 million of unrestricted cash, $40.0 million of restricted cash and $431.8 million of availability under our credit facility. As of June 30, 2026, our revolving credit facility had a $500.0 million borrowing base, $49.9 million in outstanding standby letters of credit and $18.3 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 second quarter 2026, we recorded a loss of $155.3 million for RINs in cost of sales in the unaudited condensed statements of operations, as compared to a loss of $90.8 million for RINs in the second quarter 2025. Our gross RINs Obligation, which includes RINs that are required to be secured through either our own blending or through the purchase of RINs in the open market, is spread across four compliance categories (D3, D4, D5 and D6). The gross RINs obligations may be satisfied by our own renewables blending, RIN purchases, or receipt of small refinery exemptions.
Expenses related to RFS compliance have the potential to remain significant 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.
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See Note 2 — “Summary of Significant Accounting Policies” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” in this Quarterly Report for further information on the Company’s RINs obligation.
Unrestricted Subsidiaries
See Note 12 — “Unrestricted Subsidiaries” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” in this Quarterly Report for further information regarding certain financial information of our unrestricted subsidiaries.
Key Performance Measures
Our sales and results of operations are principally affected by demand for specialty products, fuel product demand, renewable fuel product demand, global fuel crack spreads, the price of natural gas used as fuel in our operations, our ability to operate our production facilities at high utilization, and our results from derivative instrument activities.
Our primary raw materials are crude oil, renewable feedstocks, and other specialty feedstocks, and our primary outputs are specialty consumer-facing and industrial products, specialty branded products, fuel products, and renewable fuel products. The prices of crude oil, specialty products, fuel products, and renewable fuel products are subject to fluctuations in response to changes in supply, demand, market uncertainties and a variety of factors beyond our control. We monitor these risks and from time-to-time enter into derivative instruments designed to help mitigate the impact of commodity price fluctuations on our business. The primary purpose of our commodity risk management activities is to economically hedge our cash flow exposure to commodity price risk. We also may hedge when market conditions exist that we believe to be out of the ordinary and particularly supportive of our financial goals. We enter into derivative contracts for future periods in quantities that do not exceed our projected purchases of crude oil and natural gas and sales of fuel and renewable fuel products. Refer to Note 7 — “Derivatives” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information.
Our management uses several financial and operational measurements to analyze our performance. These measurements include the following:
•sales volumes;
•segment gross profit;
•segment Adjusted gross profit;
•segment Adjusted EBITDA;
•segment Adjusted EBITDA with Tax Attributes; and
•selling, general and administrative expenses.
Sales volumes. We view the volumes of Specialty Products and Solutions products, Montana/Renewables products and Performance Brands products sold as an important measure of our ability to effectively utilize our operating assets. Our ability to meet the demands of our customers is driven by the volumes of feedstocks that we run at our facilities. Higher volumes typically improve profitability both through the spreading of fixed costs over greater volumes and the additional gross profit achieved on the incremental volumes.
Segment gross profit. Specialty Products and Solutions, Montana/Renewables and Performance Brands products’ gross profit are important measures of profitability of our segments. We define gross profit as sales less the cost of crude oil and other feedstocks, LCM/LIFO adjustments, and other production-related expenses, the most significant portion of which includes labor, plant fuel, utilities, contract services, maintenance, transportation, RINs, depreciation and amortization and processing materials. We use gross profit as an indicator of our ability to manage margins in our business over the long term. The increase or decrease in selling prices typically lags behind the rising or falling costs, respectively, of feedstocks throughout our business. Other than plant fuel, RINs mark-to-market adjustments, and LCM/LIFO adjustments, production related expenses generally remain stable across broad ranges but can fluctuate depending on maintenance activities performed during a specific period.
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Segment Adjusted gross profit. Specialty Products and Solutions, Montana/Renewables and Performance Brands products segment Adjusted gross profit measures are useful as they exclude transactions not related to our core cash operating activities and provide metrics to analyze the profitability of the core cash operations of our segments. We define segment Adjusted gross profit as segment gross profit excluding the impact of (a) LCM inventory adjustments; (b) the impact of liquidation of inventory layers calculated using the LIFO method; (c) RINs mark-to-market adjustments; (d) RINs incurrence expense; (e) depreciation and amortization; and (f) all extraordinary, unusual or non-recurring items of revenue or cost of sales.
Segment Adjusted EBITDA and Segment Adjusted EBITDA with Tax Attributes. We believe that Specialty Products and Solutions, Montana/Renewables and Performance Brands segment Adjusted EBITDA and Adjusted EBITDA with Tax Attributes measures are useful as they exclude transactions not related to our core cash operating activities and provide metrics to analyze our ability to pay interest to our noteholders. Adjusted EBITDA and Adjusted EBITDA with Tax Attributes allows us to meaningfully analyze the trends and performance of our core cash operations as well as to make decisions regarding the allocation of resources to segments. Corporate Adjusted EBITDA primarily reflects general and administrative costs.
Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025
Production Volume. The following table sets forth information about our continuing operations after giving effect to the elimination of all intercompany activity. Facility production volume differs from sales volume due to changes in inventories and the sale of purchased blendstocks such as ethanol and specialty blendstocks, as well as the resale of crude oil.
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 % Change 2026 2025 % Change
(In bpd) (In bpd)
Total sales volume (1) 87,722 88,766 (1.2) % 87,377 87,165 0.2 %
Facility production:
Specialty Products and Solutions:
Lubricating oils 13,318 11,939 11.6 % 12,827 11,655 10.1 %
Solvents 7,637 7,973 (4.2) % 7,444 7,752 (4.0) %
Waxes 1,559 1,325 17.7 % 1,489 1,234 20.7 %
Fuels, asphalt and other by-products 40,389 34,467 17.2 % 37,522 34,459 8.9 %
Total Specialty Products and Solutions 62,903 55,704 12.9 % 59,282 55,100 7.6 %
Montana/Renewables
Fuels, asphalt and other by-products 11,113 10,501 5.8 % 11,200 10,434 7.3 %
Renewable fuels 7,011 12,044 (41.8) % 7,430 10,994 (32.4) %
Total Montana/Renewables 18,124 22,545 (19.6) % 18,630 21,428 (13.1) %
Performance Brands 2,164 1,663 30.1 % 1,945 1,641 18.5 %
Total facility production 83,191 79,912 4.1 % 79,857 78,169 2.2 %
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(1)Total sales volume includes sales from the production at our facilities and certain third-party facilities pursuant to supply and/or processing agreements, sales of inventories and the resale of crude oil and other finished products to third-party customers. Total sales volume includes the sale of purchased blendstocks.
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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 June 30, Six Months Ended June 30,
2026 2025 2026 2025
(In millions)
Sales $ 1,445.1 $ 1,026.6 $ 2,474.9 $ 2,020.5
Cost of sales 1,426.8 1,070.2 2,544.0 2,145.5
Gross profit (loss) 18.3 (43.6) (69.1) (125.0)
Operating costs and expenses:
Selling 13.5 12.2 25.8 24.5
General and administrative 39.4 41.1 105.4 53.2
(Gain) loss on sale of business — — — (62.2)
Other operating (income) expense 5.4 4.1 11.0 9.2
Operating income (loss) (40.0) (101.0) (211.3) (149.7)
Other income (expense):
Interest expense (52.0) (52.9) (103.1) (111.4)
Debt extinguishment costs — (0.1) (1.7) (47.7)
Gain (loss) on derivative instruments (26.0) 4.3 (141.4) (2.9)
Other income (expense) 0.9 2.0 2.5 2.4
Total other expense (77.1) (46.7) (243.7) (159.6)
Net income (loss) before income taxes (117.1) (147.7) (455.0) (309.3)
Income tax (benefit) expense (21.2) 0.2 (42.1) 0.6
Net loss $ (95.9) $ (147.9) $ (412.9) $ (309.9)
EBITDA $ (30.3) $ (58.1) $ (284.1) $ (124.1)
Adjusted EBITDA $ 159.3 $ 55.1 $ 186.9 $ 93.2
Adjusted EBITDA with Tax Attributes $ 175.2 $ 76.5 $ 225.3 $ 131.5
Non-GAAP Financial Measures
We include in this Quarterly Report the non-GAAP financial measures EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes. We provide reconciliations of EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes to Net income (loss), our most directly comparable financial performance measure.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes are used as supplemental financial measures by our management and by external users of our financial statements such as investors, commercial banks, research analysts and others, to assess:
•the financial performance of our assets without regard to financing methods, capital structure or historical cost basis;
•the ability of our assets to generate cash sufficient to pay interest costs and support our indebtedness;
•our operating performance and return on capital as compared to those of other companies in our industry, without regard to financing or capital structure; and
•the viability of acquisitions and capital expenditure projects and the overall rates of return on alternative investment opportunities.
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We believe that these non-GAAP measures are useful to analysts and investors as they exclude transactions not related to our core cash operating activities and provide metrics to analyze our ability to pay interest to our noteholders. However, the indentures governing our senior notes contain covenants that, among other things, restrict our ability to pay dividends. We believe that excluding these transactions allows investors to meaningfully analyze trends and performance of our core cash operations.
We define EBITDA for any period as net income (loss) plus interest expense (including amortization of debt issuance costs), income taxes and depreciation and amortization. We believe net income (loss) is the most directly comparable GAAP measure to EBITDA.
We define Adjusted EBITDA for any period as EBITDA adjusted for (a) impairment; (b) unrealized gains and losses from mark-to-market accounting for hedging activities; (c) realized gains and losses under derivative instruments excluded from the determination of net income (loss); (d) non-cash equity-based compensation expense and other non-cash items (excluding items such as accruals of cash expenses in a future period or amortization of a prepaid cash expense) that were deducted in computing net income (loss); (e) debt refinancing fees, extinguishment costs, premiums and penalties; (f) any net gain or loss realized in connection with an asset sale that was deducted in computing net income (loss); (g) amortization of turnaround costs; (h) LCM inventory adjustments; (i) the impact of liquidation of inventory layers calculated using the LIFO method; (j) RINs mark-to-market adjustments; (k) RINs incurrence expense; and (l) all extraordinary, unusual or non-recurring items of gain or loss, or revenue or expense.
We define Adjusted EBITDA Margin as Adjusted EBITDA divided by sales.
We define Adjusted EBITDA with Tax Attributes for any period as Adjusted EBITDA plus the notional value of CFPCs, less the difference between the notional value of any CFPCs sold and the amount realized from such sales during the period.
The definition of Adjusted EBITDA presented in this Quarterly Report is similar to the calculation of “Consolidated Cash Flow” contained in the indentures governing our Senior Notes (as defined in this Quarterly Report) and the calculation of “Consolidated EBITDA” contained in the Credit Agreement. We are required to report Consolidated Cash Flow to the holders of our Senior Notes and Consolidated EBITDA to the lenders under our revolving credit facility, and these measures are used by them to determine our compliance with certain covenants governing those debt instruments. Refer to Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” in this Quarterly Report for additional details regarding the covenants governing our debt instruments.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes should not be considered alternatives to Net income (loss) or Operating income (loss) or any other measure of financial performance presented in accordance with GAAP. In evaluating our performance as measured by EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes, management recognizes and considers the limitations of these measurements. EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes do not reflect our liabilities for the payment of income taxes, interest expense or other obligations such as capital expenditures. Accordingly, EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes are only three of several measurements that management utilizes. Moreover, our definition of EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes may not be comparable to similarly titled measures of another company because all companies may not calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes in the same manner.
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The following table presents a reconciliation of Net income (loss), our most directly comparable GAAP financial performance measure to EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes for each of the periods indicated (in millions).
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(In millions)
Reconciliation of Net income (loss) to EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes
Net income (loss) $ (95.9) $ (147.9) $ (412.9) $ (309.9)
Add:
Interest expense 52.0 52.9 103.1 111.4
Depreciation and amortization 34.8 36.7 67.8 73.8
Income tax (benefit) expense (21.2) 0.2 (42.1) 0.6
EBITDA $ (30.3) $ (58.1) $ (284.1) $ (124.1)
Add:
LCM / LIFO (gain) loss $ 4.4 $ (1.9) $ (21.8) $ (2.0)
Unrealized (gain) loss on derivative instruments (9.0) (7.0) 93.7 (7.1)
Debt extinguishment costs — 0.1 1.7 47.7
Amortization of turnaround costs 10.7 11.2 19.2 20.8
(Gain) loss on sale of business — — — (62.2)
RINs incurrence expense 48.0 15.3 79.5 45.7
RINs mark-to-market (gain) loss 115.6 79.1 231.5 165.9
Equity-based compensation and other items (1) 19.5 10.1 64.3 (3.4)
Other 0.2 4.2 0.6 7.4
Noncontrolling interest adjustments 0.2 2.1 2.3 4.5
Adjusted EBITDA $ 159.3 $ 55.1 $ 186.9 $ 93.2
Tax attributes (2) 15.9 21.4 38.4 38.3
Adjusted EBITDA with Tax Attributes $ 175.2 $ 76.5 $ 225.3 $ 131.5
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(1)For the three months ended June 30, 2026 and 2025, equity-based compensation and other includes $7.6 million and $7.6 million of non-cash equity based compensation expense, respectively, and $11.9 million and $2.7 million of expenses related to the supply and offtake agreement, respectively. For the six months ended June 30, 2026 and 2025, equity-based compensation and other includes $45.4 million and $(13.3) million of non-cash equity based compensation expense, respectively, and $18.9 million and $10.0 million of expenses related to the supply and offtake agreement, respectively.
(2)Tax attribute amounts reflect 100% of the notional value of CFPCs generated for each respective period presented less any discounts on the sale of CFPCs. The CFPCs can be realized by applying the credits to the Company’s federal income tax liability or sold in a secondary market at a discounted rate.
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The following table presents a reconciliation of Montana/Renewables Segment Net income (loss), our most directly comparable GAAP financial performance measure to Montana/Renewables Segment Adjusted EBITDA and Montana/Renewables Segment Adjusted EBITDA with Tax Attributes for each of the periods indicated unaudited (in millions).
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(In millions)
Reconciliation of Montana/Renewables Segment Net income (loss) to Segment Adjusted EBITDA, and Segment Adjusted EBITDA with Tax Attributes
Net income (loss) $ (32.5) $ (74.9) $ (77.8) $ (228.3)
Add:
Depreciation and amortization $ 26.2 $ 28.2 $ 48.0 $ 56.1
LCM / LIFO (gain) loss (2.8) (6.3) (10.4) (7.0)
Interest expense 14.5 15.1 28.7 33.4
Unrealized (gain) loss on derivative instruments — — — —
Debt extinguishment costs — — — 47.6
Loss on impairment and disposal of assets — — — —
(Gain) loss on sale of business — — — —
RINs incurrence expense 7.8 3.3 14.7 11.4
RINs mark-to-market (gain) loss 18.8 23.7 36.7 49.8
Equity-based compensation and other items — — — 5.6
Other — 3.7 0.6 8.2
Income tax (benefit) expense (21.5) — (44.5) —
Noncontrolling interest adjustments 0.2 2.1 2.3 4.5
Adjusted EBITDA $ 10.7 $ (5.1) $ (1.7) $ (18.7)
Tax attributes (1) 15.9 21.4 38.4 38.3
Adjusted EBITDA with Tax Attributes $ 26.6 $ 16.3 $ 36.7 $ 19.6
____________________________
(1)Tax attribute amounts reflect 100% of the notional value of CFPCs generated for each respective period presented less any discounts on the sale of CFPCs. The CFPCs can be realized by applying the credits to the Company’s federal income tax liability or sold in a secondary market at a discounted rate.
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Changes in Results of Operations for the Three Months Ended June 30, 2026 and 2025
Sales. Sales increased $418.5 million, or 40.8%, to $1,445.1 million in the three months ended June 30, 2026, from $1,026.6 million in the same period in 2025. Sales for each of our principal product categories in these periods were as follows:
Three Months Ended June 30,
2026 2025 % Change
(In millions, except barrel and per barrel data)
Sales by segment:
Specialty Products and Solutions:
Lubricating Oils $ 281.0 $ 190.3 47.7 %
Solvents 153.2 101.5 50.9 %
Waxes 40.9 40.2 1.7 %
Fuels, asphalt and other by-products (1) 537.4 295.9 81.6 %
Total Specialty Products and Solutions: $ 1,012.5 $ 627.9 61.3 %
Total Specialty Products and Solutions sales volume (in barrels) 6,066,316 5,474,000 10.8 %
Average Specialty Products and Solutions sales price per barrel $ 166.91 $ 114.71 45.5 %
Montana/Renewables:
Fuels, asphalt and other by-products (2) $ 145.8 $ 109.2 33.5 %
Renewable fuels 183.2 208.8 (12.3) %
Total Montana/Renewables $ 329.0 $ 318.0 3.5 %
Total Montana/Renewables sales volume (in barrels) 1,718,961 2,445,000 (29.7) %
Average Montana/Renewables sales price per barrel $ 191.39 $ 130.06 47.2 %
Performance Brands:
Total Performance Brands (3) $ 103.6 $ 80.7 28.4 %
Total Performance Brands sales volume (in barrels) 197,438 159,000 24.2 %
Average Performance Brands sales price per barrel $ 524.72 $ 507.55 3.4 %
Total sales $ 1,445.1 $ 1,026.6 40.8 %
Total sales volume (in barrels) 7,982,715 8,078,000 (1.2) %
____________________________
(1)Represents (a) by-products, including fuels and asphalt, produced in connection with the production of specialty products at the Shreveport, Princeton, Cotton Valley, Dickinson and Karns City facilities, and (b) polyol ester synthetic lubricants produced at the Missouri facility.
(2)Includes asphalt, heavy fuel oils and other products produced in connection with the production of fuels at the Montana specialty asphalt facility.
(3)Represents packaged and synthetic specialty products at our Porter, Texas and Shreveport, Louisiana packaging facilities.
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The components of the $384.6 million increase in Specialty Products and Solutions segment sales for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, were as follows (in millions):
Dollar Change
Volume $ 68.0
Price 316.6
Total Specialty Products and Solutions segment sales increase (decrease) $ 384.6
Specialty Products and Solutions segment sales increased period over period, driven primarily by higher sales prices in response to rising commodity prices as well as sales volumes due to continued strong demand.
The components of the $11.0 million increase in Montana/Renewables segment sales for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, were as follows (in millions):
Dollar Change
Volume $ (94.4)
Price 105.4
Total Montana/Renewables segment sales increase (decrease) $ 11.0
Montana/Renewables segment sales increased during the current year period as a result of significant sales price increases in response to increased commodity prices. This was offset by a reduction in volume resulting from our planned outage early in the second quarter of 2026 to support the MaxSAF® 150 expansion project that reduced our renewable fuels production by 41.8% compared to the second quarter of 2025. Our renewable fuels production and renewable fuels sales volumes for June 2026 have returned to our planned levels.
The components of the $22.9 million increase in Performance Brands segment sales for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, were as follows (in millions):
Dollar Change
Volume $ 19.5
Price 3.4
Total Performance Brands segment sales increase (decrease) $ 22.9
Performance Brands segment sales increased period over period, driven by strong sales volumes, led by TruFuel, as customer demand strengthened. Pricing contributed only modestly to the increase, as price increases implemented during the period had not fully taken effect.
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Gross Profit (Loss). Gross profit (loss) increased $61.9 million to gross profit of $18.3 million in the three months ended June 30, 2026, from gross loss of $43.6 million in the same period in 2025. Gross profit (loss) for our business segments were as follows:
Three Months Ended June 30,
2026 2025
(In millions, except barrel and per barrel data)
Gross profit (loss) by segment:
Specialty Products and Solutions:
Gross profit (loss) $ 31.8 $ (14.9)
Percentage of sales 3.1 % (2.4) %
Specialty Products and Solutions gross profit (loss) per barrel $ 5.25 $ (2.72)
Montana/Renewables:
Gross profit (loss) $ (30.4) $ (50.8)
Percentage of sales (9.2) % (16.0) %
Montana/Renewables gross profit (loss) per barrel $ (17.67) $ (20.78)
Performance Brands:
Gross profit (loss) $ 16.9 $ 22.1
Percentage of sales 16.3 % 27.4 %
Performance Brands gross profit (loss) per barrel $ 85.47 $ 138.99
Total gross profit (loss) $ 18.3 $ (43.6)
Percentage of sales 1.3 % (4.2) %
The components of the $46.7 million increase in Specialty Products and Solutions segment gross profit (loss) for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, were as follows (in millions):
Dollar Change
Three months ended June 30, 2025 reported gross profit (loss) $ (14.9)
Sales price 316.6
Cost of materials (216.0)
LCM / LIFO inventory adjustments (3.8)
Volumes 15.9
Operating costs (excl. RINs) (0.4)
RINs (65.6)
Three months ended June 30, 2026 reported gross profit (loss) $ 31.8
The increase in Specialty Products and Solutions segment gross profit for the three months ended June 30, 2026 as compared to the same period in 2025, was favorably impacted by higher sales prices in response to higher commodity prices and increased sales volumes as our production has increased 12.9% over prior year. These impacts were partially offset by higher cost of materials due to rising commodity prices and unfavorable RINs pricing.
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The components of the $20.4 million increase in Montana/Renewables segment gross profit (loss) for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, were as follows (in millions):
Dollar Change
Three months ended June 30, 2025 reported gross profit (loss) $ (50.8)
Sales price 105.4
Cost of materials (76.9)
LCM / LIFO inventory adjustments (3.6)
Volumes (11.4)
Operating costs (excl. RINs) 5.7
RINs 1.2
Three months ended June 30, 2026 reported gross profit (loss) $ (30.4)
The increase in Montana/Renewables segment gross profit (loss) for the three months ended June 30, 2026, as compared to the prior period, was driven by favorable sales pricing, which was offset by the impact of lower sales volumes resulting from a planned outage to complete the MaxSAF® 150 expansion project and higher material costs. In addition, operating costs resulted in a favorable benefit, reflective of the sustained operating cost discipline from initiatives implemented throughout the prior calendar year.
The components of the $5.2 million decrease in Performance Brands segment gross profit (loss) for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, were as follows (in millions):
Dollar Change
Three months ended June 30, 2025 reported gross profit (loss) $ 22.1
Sales price 3.4
Cost of materials (16.3)
LCM / LIFO inventory adjustments 1.0
Volumes 7.4
Operating costs (0.7)
Three months ended June 30, 2026 reported gross profit (loss) $ 16.9
Performance Brands segment gross profit (loss) for the three months ended June 30, 2026, as compared to the prior period, decreased primarily due to higher cost of materials. This impact was partially offset by higher sales volumes and higher sales prices that have been implemented, but have not fully taken effect as of the end of the quarter.
Loss on Derivative Instruments. There was a $26.0 million loss on derivative instruments in the three months ended June 30, 2026, compared to a $4.3 million gain in the same period in 2025. This is primarily due to an increase in our realized derivative loss of $32.3 million offset by an increase in our unrealized derivative gain of $2.0 million between the comparative periods. The realized loss is the result of $23.1 million of crack spread swap settlements during the quarter as commodity prices and crack spreads improved significantly.
Income Tax Expense (Benefit). There was a $21.2 million income tax benefit in the three months ended June 30, 2026, compared to a $0.2 million income tax expense in the same period in 2025. The income tax benefit in the current year period was related to the sale of CFPCs generated in our Montana/Renewables segment. In the prior year, we had fully reserved the value for all credits generated as we had not completed a sale of our tax credits as of June 2025.
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Changes in Results of Operations for the Six Months Ended June 30, 2026 and 2025
Sales. Sales increased $454.4 million, or 22.5%, to $2,474.9 million in the six months ended June 30, 2026, from $2,020.5 million in the same period in 2025. Sales for each of our principal product categories in these periods were as follows:
Six Months Ended June 30,
2026 2025 % Change
(In millions, except barrel and per barrel data)
Sales by segment:
Specialty Products and Solutions:
Lubricating Oils $ 472.8 $ 392.5 20.5 %
Solvents 261.1 206.2 26.6 %
Waxes 80.7 78.4 2.9 %
Fuels, asphalt and other by-products (1) 902.9 600.9 50.3 %
Total Specialty Products and Solutions: $ 1,717.5 $ 1,278.0 34.4 %
Total Specialty Products and Solutions sales volume (in barrels) 11,934,980 10,846,000 10.0 %
Average Specialty Products and Solutions sales price per barrel $ 143.90 $ 117.83 22.1 %
Montana/Renewables:
Fuels, asphalt and other by-products (2) $ 239.5 $ 205.3 16.7 %
Renewable fuels 325.4 374.4 (13.1) %
Total Montana/Renewables $ 564.9 $ 579.7 (2.6) %
Total Montana/Renewables sales volume (in barrels) 3,515,864 4,618,000 (23.9) %
Average Montana/Renewables sales price per barrel $ 160.66 $ 125.53 28.0 %
Performance Brands:
Total Performance Brands (3) $ 192.5 $ 162.8 18.2 %
Total Performance Brands sales volume (in barrels) 364,368 313,000 16.4 %
Average Performance Brands sales price per barrel $ 528.31 $ 520.13 1.6 %
Total sales $ 2,474.9 $ 2,020.5 22.5 %
Total sales volume (in barrels) 15,815,212 15,777,000 0.2 %
____________________________
(1)Represents (a) by-products, including fuels and asphalt, produced in connection with the production of specialty products at the Shreveport, Princeton, Cotton Valley, Dickinson and Karns City facilities, and (b) polyol ester synthetic lubricants produced at the Missouri facility.
(2)Includes asphalt, heavy fuel oils and other products produced in connection with the production of fuels at the Montana specialty asphalt facility.
(3)Represents packaged and synthetic specialty products at our Porter, Texas and Shreveport, Louisiana packaging facilities.
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The components of the $439.5 million increase in Specialty Products and Solutions segment sales for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, were as follows (in millions):
Dollar Change
Volume $ 128.3
Price 311.2
Total Specialty Products and Solutions segment sales increase (decrease) $ 439.5
Specialty Products and Solutions segment sales increased period over period, driven primarily by higher sales prices in response to rising commodity prices. Sales volumes increased compared to the prior year despite the temporary suspension of operations at our Shreveport facility during a portion of the first quarter of 2026. The higher sales volume is the result of higher production in response to the current market environment.
The components of the $14.8 million decrease in Montana/Renewables segment sales for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, were as follows (in millions):
Dollar Change
Volume $ (138.3)
Price 123.5
Total Montana/Renewables segment sales increase (decrease) $ (14.8)
Montana/Renewables segment sales declined during the current year period as a result of a planned outage to support the MaxSAF® 150 expansion project that reduced our renewable fuels production by 32.4% in comparison to the prior year period. Despite lower volumes, improved renewable fuel prices favorably impacted results and partially mitigated the effect of reduced sales volumes in comparison to the prior year period.
The components of the $29.7 million increase in Performance Brands segment sales for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, were as follows (in millions):
Dollar Change
Volume $ 26.9
Price 2.8
Total Performance Brands segment sales increase (decrease) $ 29.7
Performance Brands segment sales increased period over period, driven by strong sales volumes, despite the prior year period including contributions from the divested Royal Purple Industrial business.
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Gross Profit (Loss). Gross profit (loss) increased $55.9 million to gross loss of $69.1 million in the six months ended June 30, 2026, from gross loss of $125.0 million in the same period in 2025. Gross profit (loss) for our business segments were as follows:
Six Months Ended June 30,
2026 2025
(In millions, except barrel and per barrel data)
Gross profit (loss) by segment:
Specialty Products and Solutions:
Gross profit (loss) $ (31.1) $ (48.9)
Percentage of sales (1.8) % (3.8) %
Specialty Products and Solutions gross profit (loss) per barrel $ (2.60) $ (4.51)
Montana/Renewables:
Gross profit (loss) $ (76.0) $ (120.4)
Percentage of sales (13.5) % (20.8) %
Montana/Renewables gross profit (loss) per barrel $ (21.66) $ (26.07)
Performance Brands:
Gross profit (loss) $ 38.0 $ 44.3
Percentage of sales 19.7 % 27.2 %
Performance Brands gross profit (loss) per barrel $ 104.24 $ 141.53
Total gross profit (loss) $ (69.1) $ (125.0)
Percentage of sales (2.8) % (6.2) %
The components of the $17.8 million increase in Specialty Products and Solutions segment gross profit (loss) for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, were as follows (in millions):
Dollar Change
Six months ended June 30, 2025 reported gross profit (loss) $ (48.9)
Sales price 311.2
Cost of materials (209.7)
LCM / LIFO inventory adjustments 14.3
Volumes 28.1
Operating costs (excl. RINs) (11.9)
RINs (114.2)
Six months ended June 30, 2026 reported gross profit (loss) $ (31.1)
The increase in Specialty Products and Solutions segment gross profit (loss) for the six months ended June 30, 2026 as compared to the same period in 2025, was favorably impacted by increases in both fuel crack spreads and specialty products margins as the increase in sales prices outpaced the increase in the price of crude oil as well as increased sales
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volumes. These improvements were partially offset by increased RINs prices and higher operating costs, including increased natural gas costs.
The components of the $44.4 million increase in Montana/Renewables segment gross profit (loss) for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, were as follows (in millions):
Dollar Change
Six months ended June 30, 2025 reported gross profit (loss) $ (120.4)
Sales price 123.5
Cost of materials (87.2)
LCM / LIFO inventory adjustments 3.4
Volumes (14.3)
Operating costs (excl. RINs) 11.9
RINs 7.1
Six months ended June 30, 2026 reported gross profit (loss) $ (76.0)
The increase in Montana/Renewables segment gross profit (loss) for the six months ended June 30, 2026, as compared to the prior period, was driven by the increase in sales prices outpacing the increased prices for renewable feedstocks, which was partially offset by the impact of lower sales volumes resulting from a planned outage to complete the MaxSAF® 150 expansion project. In addition, operating costs resulting in a favorable benefit, reflective of continued operating cost discipline from initiatives implemented throughout the prior calendar year.
The components of the $6.3 million decrease in Performance Brands segment gross profit (loss) for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, were as follows (in millions):
Dollar Change
Six months ended June 30, 2025 reported gross profit (loss) $ 44.3
Sales price 2.8
Cost of materials (20.0)
LCM / LIFO inventory adjustments 2.0
Volumes 10.2
Operating costs (1.3)
Six months ended June 30, 2026 reported gross profit (loss) $ 38.0
Performance Brands segment gross profit (loss) for the six months ended June 30, 2026, as compared to the prior period, decreased $6.3 million. The slight decrease is due primarily to the increase in Group III base oil feedstock costs as a result of the Middle East conflict, offset by higher sales volumes due to high customer demand, despite the prior year period including contributions from the divested Royal Purple Industrial business.
General and administrative. General and administrative expenses increased $52.2 million, to $105.4 million in the six months ended June 30, 2026 from $53.2 million in the same period in 2025. The increase in the Company's stock price resulted in an increase of $58.7 million in stock-based compensation related expenses in the current year period. This impact was partially offset by a $5.9 million decrease in professional services fees.
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Gain on sale of business. There was a $62.2 million gain on sale of business in the prior year period for the sale of assets related to the industrial portion of the Royal Purple® business. There was no gain or loss for the sale of a business recorded in the current year period. Refer to Note 2 — “Summary of Significant Accounting Policies” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information related to the sale of assets related to the industrial portion of the Royal Purple® business.
Debt Extinguishment Cost. The $1.7 million expense for debt extinguishment costs in the six months ended June 30, 2026 was primarily related to the redemption of the outstanding 2026 Notes and 2027 Notes during the period. The $47.7 million expense for debt extinguishment costs in the six months ended June 30, 2025 was related to the repurchase of the equipment associated with the MRL Asset Financing Arrangements, 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. Refer to Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information.
Loss on Derivative Instruments. There was a $141.4 million loss on derivative instruments in the six months ended June 30, 2026, compared to a $2.9 million loss in the same period in 2025. This is primarily due to an increase in our realized derivative loss of $37.7 million and an increase in our unrealized derivative loss of $100.8 million between the comparative periods. The realized loss is primarily the result of $28.8 million of crack spread swap settlements during the current year period as commodity prices and crack spreads improved significantly.
Income Tax Expense (Benefit). There was a $42.1 million income tax benefit in the six months ended June 30, 2026, compared to a $0.6 million income tax expense in the same period in 2025. The income tax benefit in the current year period was related to the sale of CFPCs generated by our Montana/Renewables segment.
Liquidity and Capital Resources
General
The following should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” included under Part II, Item 7 in our 2025 Annual Report. There have been no material changes in that information other than as discussed below. Also, see Note 5 — “Inventory Financing Agreements” and Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” in this Quarterly Report for additional discussions related to our Supply and Offtake Agreements and our long-term debt.
Cash Flows from Operating, Investing and Financing Activities
We believe that we have sufficient liquid assets, cash flow from operations, borrowing capacity and adequate access to capital markets to meet our financial commitments, debt service obligations and anticipated capital expenditures for at least the next 12 months. We continue to seek to lower our operating costs, selling expenses and general and administrative expenses as a means to further improve our cash flow from operations with the objective of having our cash flow from operations support all of our capital expenditures and interest payments. However, we are subject to business and operational risks that could materially adversely affect our cash flows. A material decrease in our cash flow from operations including a significant, sudden decrease in crude oil prices would likely produce a corollary effect on our borrowing capacity under our revolving credit facility and potentially our ability to comply with the covenants under our revolving credit facility. A significant, sudden increase in crude oil prices, if sustained, would likely result in increased working capital requirements which would be funded by borrowings under our revolving credit facility. In addition, our cash flow from operations may be impacted by the timing of settlement of our derivative activities. Gains and losses from derivative instruments that do not qualify as cash flow hedges are recorded in unrealized gain (loss) on derivative instruments until settlement and will impact operating cash flow in the period settled.
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The following table summarizes our primary sources and uses of cash in each of the periods presented:
Six Months Ended June 30,
2026 2025
(In millions)
Net cash provided by (used in) operating activities $ 6.1 $ (31.1)
Net cash provided by (used in) investing activities (53.0) 64.2
Net cash provided by (used in) financing activities (8.4) 111.6
Net increase (decrease) in cash, cash equivalents and restricted cash $ (55.3) $ 144.7
Operating Activities. Operating activities provided cash of $6.1 million during the six months ended June 30, 2026 compared to using cash of $31.1 million during the same period in 2025. Cash flows from operations reflected the impact of the strong fuel crack spread and specialty products margin environment in the current year. This impact was partially offset by an increase in cash used to meet working capital requirements as our cash flows adjust to the increase in commodity prices.
Investing Activities. Investing activities used cash of $53.0 million during the six months ended June 30, 2026 compared to providing cash of $64.2 million during the same period in 2025. The change is related to the net proceeds received for the sale of the Royal Purple Industrial business in the prior year period. Cash expenditures for additions to property, plant and equipment in the current period were higher than the prior period, primarily due to the MaxSAF® 150 expansion project.
Financing Activities. Financing activities used cash of $8.4 million in the six months ended June 30, 2026 compared to providing cash of $111.6 million during the same period in 2025. The change is primarily due to the borrowings we received in the current year period from the 2031 Notes, which was offset by payments we made in the current period to repay the 2026 Notes and 2027 Notes and payments on the revolving credit agreement. Cash provided by financing activities in the prior period primarily consisted of borrowings we received from the DOE Loan and 2028 Mirror Issuance Notes, offset by the payments we made to repay outstanding borrowings under the revolving credit agreement, repurchase the equipment associated with the MRL Asset Financing Arrangements, repay the outstanding loans under the MRL Term Loan Credit Agreement and MRL Revolving Credit Agreement, repay the outstanding obligations under the MRL Supply and Offtake Agreement, and partially redeem the 2026 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 (in millions):
Six Months Ended June 30,
2026 2025
Capital improvement expenditures $ 29.2 $ 6.0
Replacement capital expenditures 22.3 23.2
Environmental capital expenditures — 1.9
Turnaround capital expenditures 18.5 8.3
Total $ 70.0 $ 39.4
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2026 Capital Spending Forecast
We are forecasting total capital expenditures of approximately $130.0 million to $160.0 million in 2026. Our forecasted capital expenditures are primarily related to maintenance and reliability projects and capital expenditures associated with MaxSAF®. We anticipate that capital expenditure requirements for the MaxSAF® project will be funded by MRL, an unrestricted subsidiary of the Company, through cash flows from operations, cash on hand and borrowings under the DOE Facility. We anticipate that capital expenditure requirements for our restricted subsidiaries group will be provided primarily through cash flows from operations, cash on hand, and by available borrowings under our revolving credit facility. If future capital expenditures require amounts in excess of our then-current cash flow from operations and borrowing availability under our revolving credit facility, we may be required to issue debt or equity securities in public or private offerings or incur additional borrowings under bank credit facilities to meet those costs.
Debt and Credit Facilities
As of June 30, 2026, our primary debt and credit instruments consisted of the following:
•$500.0 million senior secured revolving credit facility maturing in January 2031 (after giving effect to the amendments to our revolving credit facility (the “Credit Facility Amendments”)), subject to borrowing base limitations, with a maximum letter of credit sub-limit equal to $255.0 million, which amount may be increased to 90% of revolver commitments in effect with the consent of the Agent (as defined in the Credit Agreement) (“revolving credit facility”);
•$555.0 million of 9.75% Senior Notes due 2031 (“2031 Notes”);
•$200.0 million of 9.25% Senior Secured First Lien Notes due 2029 (“2029 Secured Notes”);
•$325.0 million of 9.75% Senior Notes due 2028 (“2028 Notes”);
•$100.0 million of 9.75% Senior Notes due 2028 (“2028 Mirror Issuance Notes”);
•$835.2 million of borrowings under our DOE Loan;
•$111.2 million of financing through our Shreveport terminal asset financing arrangement;
•$15.9 million of financing through our Montana terminal asset financing arrangement; and
•$138.8 million of financing through our Montana refinery asset financing arrangement.
We were in compliance with all covenants under the debt instruments in place as of June 30, 2026 and believe we have adequate liquidity to conduct our business.
On January 23, 2026, the Company entered into the Ninth Amendment to the Third Amended and Restated Credit Agreement. The Ninth Amendment amended the Credit Agreement. Among other changes, the Ninth Amendment modified the Credit Agreement to (i) extend the maturity date to January 23, 2031, (ii) provide for commitments of $500.0 million, subject to borrowing base limitations, (iii) revise certain covenants, representations and warranties, events of default and other terms to permit the Company or one or more of its subsidiaries to consummate one or more new inventory financing transactions, subject in each case to the Company’s satisfaction of certain customary conditions and (iv) provide for a reduction of commitments under the Credit Agreement from $500.0 million to $425.0 million if any such inventory financing transaction is consummated. See Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information.
On January 12, 2026, the Issuers issued and sold $405.0 million aggregate principal amount of 2031 Notes in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act. The Company subsequently redeemed all of the 2026 Notes and all of the 2027 Notes in January 2026.
On March 17, 2026, the Issuers issued and sold $150.0 million aggregate principal amount of additional 2031 Notes (the “Additional Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act. The Company used the net proceeds from the offering of the Additional Notes to repay borrowings outstanding under the Company’s revolving credit facility. See Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information.
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The borrowing base on our credit facility increased from approximately $461.4 million as of June 30, 2025, to approximately $500.0 million at June 30, 2026. Our borrowing availability increased from approximately $188.6 million at June 30, 2025, to approximately $431.8 million at June 30, 2026. Total liquidity, consisting of unrestricted cash, restricted cash and available funds under our credit facility, increased from $379.2 million at June 30, 2025 to $581.6 million at June 30, 2026.
Inventory Financing
Refer to Note 5 — “Inventory Financing Agreements” in Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” for additional information regarding our Supply and Offtake Agreement.
Short-Term Liquidity
As of June 30, 2026, our principal sources of short-term liquidity were (i) $431.8 million of availability under our credit facility, (ii) an inventory financing agreement related to our Shreveport facility, (iii) $109.8 million of unrestricted cash on hand, and (iv) $40.0 million of restricted cash. Borrowings under our revolving credit facility can be used for, among other things, working capital, capital expenditures and other lawful partnership purposes including acquisitions. For additional information regarding our revolving credit facility, see Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” in this Quarterly Report.
Long-Term Financing
In addition to our principal sources of short-term liquidity listed above, subject to market conditions, we may meet our cash requirements through the issuance of long-term notes or additional common shares.
From time to time, we issue long-term debt securities referred to as our senior notes. Our outstanding senior notes are unsecured obligations that rank equally with all of our other senior debt obligations to the extent they are unsecured. As of June 30, 2026, we had $325.0 million in 2028 Notes, $100.0 million in 2028 Mirror Issuance Notes, $200.0 million in 2029 Secured Notes, and $555.0 million in 2031 Notes outstanding. In addition, as of June 30, 2026, we had $835.2 million of debt outstanding for the DOE Loan, $111.2 million of other debt outstanding for the Shreveport terminal asset financing arrangement, $15.9 million of other debt outstanding for the Montana terminal asset financing arrangement, and $138.8 million of other debt outstanding for the Montana refinery asset financing arrangement. Borrowings under the DOE Loan are obligations of our unrestricted subsidiaries MRL and MRHL solely, and are non-recourse to the Company and its restricted subsidiaries.
To date, our debt balances have not adversely affected our operations, our ability to repay or refinance our indebtedness. Based on our historical record, we believe that our capital structure will continue to allow us to achieve our business objectives.
For additional information regarding our senior notes, refer to Note 6 — “Long-Term Debt” under Part I, Item 1 “Financial Statements — Notes to Unaudited Condensed Consolidated Financial Statements” in this Quarterly Report and Note 9 — “Long-Term Debt” in Part II, Item 8 “Financial Statements and Supplementary Data” of our 2025 Annual Report.
Master Derivative Contracts and Collateral Trust Agreement
For additional discussion regarding our master derivative contracts and collateral trust agreement, see “Master Derivative Contracts and Collateral Trust Agreement” under Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 Annual Report.
Critical Accounting Estimates
For additional discussion regarding our critical accounting estimates, see “Critical Accounting Estimates” under Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 Annual Report.
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