Calumet (CLMT) risk factors, FY2024 10-K

Risks Related to our Business

1. 01Results of Operations and Financial Condition
2. 02Our business depends on supply and demand fundamentals, which can be adversely affected by numerous macroeconomic factors outside of our control and which may in turn impact our operational and financial performance, including our ability to execute our business strategies in the expected time frame
3. 03Our business has exposure to some commodities which are volatile, and a reduction in our margins will adversely affect the amount of cash we will have available to operate our business and for payments of our debt obligations
4. 04$31.42 per barrel to a low of $9.45 per barrel during 2024 and averaged $17.02 per barrel during 2024 compared to an average of $31.64 in 2023
5. 05Our hedging activities may not be effective in reducing our exposure to commodity price risk and may reduce our earnings, profitability and cash flows
6. 06We depend on certain third-party pipelines for transportation of feedstocks and products, and if these pipelines become unavailable to us, our revenues and cash available for payment of our debt obligations could decline
7. 07The price volatility of utility services may result in decreases in our earnings, profitability and cash flows
8. 08Our facilities incur operating hazards, and the potential limits on insurance coverage could expose us to potentially significant liability costs
9. 09Downtime for maintenance at our refineries and facilities will reduce our revenues and could limit our ability to make payments of our debt obligations
10. 10An impairment of our long-lived assets or goodwill could reduce our earnings or negatively impact our financial condition and results of operations
11. 11Competition in our industry is intense, and an increase in competition in the markets in which we sell our products could adversely affect our earnings and profitability
12. 12We depend on unionized labor for the operation of many of our facilities. Any work stoppages or labor disturbances at these facilities could disrupt our business and negatively impact our financial condition and results of operations
13. 13Our method of valuing inventory may result in decreases in net income
14. 14We depend on key personnel for the success of our business and the loss of those persons could adversely affect our business and our ability to make payments of our debt obligations
15. 15We are subject to cybersecurity risks and other cyber incidents resulting in disruption
16. 16AI presents risks and challenges that can impact our business
17. 17We have a substantial amount of indebtedness, which may adversely affect our cash flow and our ability to operate our business
18. 18Any of these factors could result in a material adverse effect on our business, financial conditions, results of operations, business prospects and ability to satisfy our obligations under our senior notes, revolving credit facility and the DOE Facility
19. 19Our financing arrangements contain operating and financial provisions that restrict our business and financing activities
20. 20Our ability to comply with the covenants and restrictions in our revolving credit facility, the DOE Facility, our secured hedge agreements and the indentures governing our senior notes may be affected by events beyond our control
21. 21An increase in interest rates will cause our debt service obligations to increase
22. 22A change of control could result in us facing substantial repayment obligations under our revolving credit facility, our senior notes, our secured hedge agreements, and our Supply and Offtake Agreement
23. 23Capital Projects and Future Growth
24. 24Equipment, even if properly maintained, may require significant capital expenditures and expenses to keep it operating at optimum efficiency
25. 25From time to time, we may seek to divest portions of our business, which could materially affect our results of operations and result in disruption to other parts of the business
26. 26We may incur significant environmental remediation costs and liabilities in the operation of our refineries, facilities, terminals and related facilities
27. 27We are subject to operational compliance with stringent environmental and occupational health and safety laws and regulations that may expose us to significant costs and liabilities
28. 28The availability and cost of renewable identification numbers and results of litigation related to our SRE petitions could have a material adverse effect on our results of operations and financial condition and our ability to make payments on our debt obligations
29. 29Our and our customers’ operations are subject to risks arising out of the threat of climate change, including regulatory, political, litigation and financial risks, which could result in increased operating and capital costs for our customers and reduced demand for the products and services we provide
30. 30We could incur substantial costs or disruptions in our business if we cannot obtain or maintain necessary permits and authorizations or otherwise comply with occupational, environmental and other laws and regulations
31. 31We have a holding company structure in which our subsidiaries conduct our operations and own our operating assets and our ability to make payments of our debt obligations depends on the performance of our subsidiaries and their ability to distribute funds to us

Risks Related to Montana Renewables

1. 32Montana Renewables is subject to numerous operating risks, which could materially adversely impact our results of operations and financial conditions
2. 33Montana Renewables is subject to a number of statutes and regulations that could have an adverse effect on Montana Renewables’ operations
3. 34A significant component of our product margin consists of a variety of government subsidies, incentives and mandates, and any changes in law that eliminate or reduce these subsidies, incentives and mandates would have a material adverse impact on our results of operations and financial condition
4. 35Transactions between the Company and MRL present possible conflicts of interest that could have an adverse effect on the Company if they are not managed appropriately
5. 36Montana Renewables depends on the Company to provide MRL with services necessary to operate its business. If the Company were unable or unwilling to provide these services, it would result in a disruption in MRL’s business that could have an adverse effect on its financial position, financial results and cash flow
6. 37Increases to the cost of transportation services or equipment related to our feedstock materials and renewable transportation fuels could materially and adversely affect our sales revenues and cost of operations
7. 38Montana Renewable’s operations are dependent on the use of intellectual property licensed to MRL by third parties, and if MRL fails to comply with our obligations under such license agreements, we may be required to pay damages, and we could lose license rights that are critical to our business
8. 39The production of renewable fuels is a growing industry and we are expecting to encounter significant competition in the marketplace
9. 40Montana Renewables balance sheet includes a Loan Guarantee Agreement (the “LGA”) with the US Government

Risks Related to Our Common Stock

1. 41The price of our common stock may experience volatility
2. 42The value of our common stock may be diluted by future equity issuances (including upon the exercise of the outstanding warrants), and shares eligible for future sale may have adverse effects on our share price

Risks Related to Tax Matters

1. 43Compliance with and changes in tax laws could adversely affect our performance