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Since we initially announced the conversion, we've seen an increase in our average daily trading volume of a little over 20%. The trading volumes are still quite illiquid compared to most publicly traded companies and this conversion is a major milestone in removing that burden. For example, Calumet C-Corp peers typically have 20% to 30% of their shares outstanding held by passive indices. And again, we have almost none. The ability to add significant demand to the investor pool is exciting in itself but we think it's compounded with the fact that Calumet presents a compelling opportunity to larger active institutional investors. We've been on the road talking to this group since our announcement. And like I mentioned with passive indices, our MLP status put most of this group practically off limits.

Of course, this all changes post conversion. The next near-term priority is taking the last step in demonstrating the competitively advantaged position Montana Renewables. With the construction behind us, our start-up year in a rearview and old expensive feed process, we believe financial demonstration of the top-tier position that Montana Renewables holds is the next step in capturing the value of MRL for our unitholders. Third, we're deep into the DOE loan process which we hope will unlock our MAX SAF expansion soon. And last, we continue to demonstrate the uniqueness and wide moat that exists in our specialties business. I'll hit on each of these items further but let's first move to results on Slide 5. In the first quarter, we generated $21.6 million of adjusted EBITDA.

We had previously communicated that the quarter was marked by a rate ramp-up and inventory drawdown at Montana Renewables and a successful turnaround at Shreveport, both of which impacted results within our expectations. The one negative expectations was the magnitude of the seasonal weakness experienced in the Northern Rockies as both gasoline and asphalt realizations were lower than normal. Every year, the Montana retail asphalt racks closed for the winter and our asphalt sales mix shifts to 100% wholesale. This past winter, that occurred as normal but a huge increase in WCS costs created a major price lag. As we sit here today, we're seeing retail asphalt sales start to pick back up as the paving season supported by our polymer-modified asphalt plant will be full steam ahead in June like normal.

Let's turn to Slide 6 and talk about Montana Renewables. In past calls, we've talked about the significant milestones MRL has accomplished as it turned from an idea into a leading SaaS and renewable diesel business in a few short years. The next milestone is demonstrating a clean financial quarter. As we talk today, we've been operating for 5 months since the December restart. Each month has improved sequentially as we've ramped up rates, increased SAP production, reduced our feedstock carbon intensity and work through the old expensive feed. A primary advantage point for Montana Renewables is our access to a host of feeds and ability to utilize our leading pre-treatment technology to switch quickly to whatever market opportunities exist which simply was not an option when our tanks are full.

We expect industry feedstocks to price at CI parity over-time, at least in the clearing house on the Gulf Coast. But as we have often discussed, the various speed classes, including tallow, corn oil and vegetable oil, rotate among themselves and we can take advantage of that. This optimization value is driven by a short local supply chain and it started to help again in March as demonstrated by moving back into the black financially and it's now unconstrained as we have cleared the backlog of inventory built in the second half of last year. Of course, the current question outstanding for all participants in our space is the market environment which we track using the index for renewable diesel margins made from soybean oil. This index has become the standard industry benchmark in RD.

A couple of weeks ago, we hosted an Analyst Day in Great Falls and industry outlook was the primary topic of the conversation. In fact, the slides and script from that event are on our website for anyone who would like to go deeper. Staying on Slide 6 and looking at the right-hand chart, we show the renewable diesel industry capacity as a supply stack based on total net cost and we overlay the normal index margin across the top. This top line margin is the regime that's governed the industry margins historically, at least until September of last year. In its normal regime, renewable diesel players expect to see a fairly steady index margin around $2 a gallon. We've talked about this in the past, so I won't go too deeply into it here. But the premise is that the incremental competitor sets the market price.

We specifically think that the incremental player is the group of small-scale bio-diesel plants that run soybean oil. And this group typically requires an index margin of about $2 per gallon to be cash flow positive. However, for the last few quarters, industry has observed a lower index margin of around $1 per gallon. Although we expect that to be a temporary condition, it is already doing lasting damage to farmers, biodiesel and even some renewable diesel producers. How did this happen? Historically, EPA has set the RVO to incentivize all forms of renewable energy and raised it annually to capture any increase in renewable supply. In that normal regime, all elements of the margin equation, the LCFS, Diesel [ph], the BTC, REN and the price of soybean oil, must interact in a way that incentivizes the incremental player to produce or else the mandated renewable volumes will not be achieved.

In contrast to this, EPA has set a 2023 to 2025 RVO at a level that's substantially below the industry's production capacity. For example, the industry's capacity is well above 6 billion gallons per year but the EPA RVO was set at an implied level of 4.5 billion gallons. This challenges all biomass-based diesel producers and we're seeing both biodiesel and renewable diesel producers being forced to close and reduce rates. Many has said that the level was set this way because it was difficult to predict reliability of start-ups in this new industry and questions existed about the ability to source feedstock. With most of the large start-ups either now up or coming out this year and the feedstock situation clarified, we think that it's logical to revert to the now proven and normal methodology of including all production capacity in the RVO.

After all, the original statutory demand for renewable fuels was to have reached 35 billion gallons per year by 2022 and the country has fallen well short of that plan as we're just over halfway there. In fact, closure and rate reduction announcements made so far this year have the industry moving backwards, not forwards. We need every drop of renewable fuels production capacity available plus a lot more to ultimately achieve our objectives. In short, the EPA should increase the RVO. Regardless of index margin, competitive advantage depends on total cost structure. The index margin will lift or lower all boats, the competitive advantage in this space is driven by access to a free treater, advantaged logistics costs, economies of scale, a flexible feed slate, product yields, specifically SaaS and access to the right end markets.

On the P&L, these items all met together to represent everything between the industry's soybean index margin and EBITDA. In other words, the breakeven level to the soybean index is a function of a company's operating cost, SG&A, logistics costs and relative yield and CI differences to the soybean index. Right now, we believe this breakeven EBITDA level is about $0.85 a gallon for Montana Renewables which we think is best-in-class. Ultimately, we think our costs will be closer to $0.65 a gallon as we continue to gain efficiencies which is the gist of our original guidance of $1.35 a gallon of adjusted EBITDA in a normal regime of a $2 per gallon index margin. As I mentioned earlier, we do expect this normal regime to return but that will require the RVO to be adjusted to incentivize the energy transition as it has historically.

The next catalyst for Calumet will stay in the MRL category is our MAX SAF expansion. Of course, this is directly tied to the DOE loan process which is in the late stages and continues to progress well. We're going to refrain from sharing too much more on this project until we get to the finish line with DOE but we're incredibly excited about it. SAF is a tremendous opportunity for the world for our industry. It's the only proven way to materially reduce emissions in the harder day airline sector and it's an area that is brand new and creates meaningful upside. Just recently, the U.K. issued a SaaS mandate starting in 2026 and growing from there. Japan, Singapore and India have also issued mandates are in the late stages. And the United States-Grandstaff challenge calls for 3 billion gallons by 2030 and 35 billion gallons by 2050.

Not only is this a new world of opportunity for SAF but the SAF supply also impacts the renewable diesel balances and margin outlook. To illustrate that, simply reference the RD supply stack chart mentioned earlier, add another 3 billion gallons to the existing RVO employed demand and you'll see that if the Grandstaff challenge is met by conversion of renewable diesel plants which is the only demonstrated proven option, we're once again in a scenario where demand, including all existing biodiesel can't be met by current supply. Needless to say, not only is SAF a tremendous advantage for us right now, it's also an opportunity that will transform the underlying fundamentals of renewable diesel in a positive way as industry volumes grow. Let's transaction back to specialties for a minute and then I'll hand the call to David.

At our recent Analyst Day, we opened with more info on specialties than we provided in some time and the feedback was that while we've all been focused on a new Montana Renewables, we haven't spent as much time talking about the rock-solid specialties business we have at Calumet and the growth that the team has delivered over the past few years. We've mentioned before that our specialties business has seen 5 straight years of margin growth which is a major accomplishment. This has been a combination of a data-driven approach to commercial excellence, an asset base and market reach that is incredibly agile, a culture of innovation and a differentiated appreciation and service of customers. It's these things that allow us to both weather storms as we saw during COVID and capture the upside of the extremely strong markets we've seen over the past couple of years.

The current market is in between these 2 extremes. Back during peak margin times, we highlighted that the increase in specialty margins from the historic $40 per barrel range was about half market and half a function of our commercial focus. I think the specialty margins have bounced between $60 and $70 a barrel over the past few quarters. We're seeing that in a more mid-cycle environment, this expectation was appropriate. The other thing we've mentioned in the past is the investment and reliability. We've made meaningful progress over the past couple of years and still have room to go as we recently entered the third year of the plan. In the first quarter, we saw an example that we expect to see more of as we continue to fortify our operations.

2 of the past 3 years, we've had winter storms that have paralyzed not only our Louisiana facilities but a lot of Gulf Coast infrastructure. This past winter, we had a similar event. And while we experienced a few days of downtime, lessons learned and improvements made allowed the plant to restart in days as opposed to having an event that would impact us much further. With that, I'll turn the call over to David.

David Lunin: Thanks, Todd. Turning to Slide 7, our SPS business generated $41.8 million of adjusted EBITDA during the quarter. As mentioned, we successfully completed our planned turnaround in Shreveport on-time and on budget and we've seen a string of successful turnarounds here which continues to give us confidence in our ability to execute on our capital plan. The turnaround took us offline for approximately 7 days. And while back in the beginning of the year, we didn't expect to see much of an impact to the financials from this. We went into the turnaround with a little lower inventory than originally planned. So it did cost us between 200,000 and 300,000 barrels of sales. On the commercial side, our team continues to deliver.

We saw crude price increase $8 per barrel during the quarter. The related lag is the majority of the decrease we saw in specialties material margin for the quarter. Price increases have now been passed through. The crude price increase also impacted asphalt margin in addition to a seasonally weak winter. Moving to Slide 8. Our Performance Brands segment generated $13.4 million of adjusted EBITDA for the quarter. In this segment, we drove year-over-year volume growth of approximately 13%, reflecting excellent execution by our commercial team. Our first quarter 2023 adjusted EBITDA also increased by approximately 17.5% or $2 million year-over-year when considering that the prior period reflected a $5 million insurance benefit. With the business on solid footing today, we remain focused on continuing to grow our core industrial business lines, particularly in mining, power and marine applications.

We also continue to remain excited at the opportunities we see as we view the specialties business as one whole business as opposed to 2 individual segments. Both STS and Performance Brands have benefited from leveraging the ingrained commercial options that exist in these businesses. Turning to Slide 9. Our Montana business, we recorded a loss of $14.5 million of adjusted EBITDA for the quarter. We've talked about the old expensive feed and how full inventory tanks block the ability to optimize speeds for some time now, so I won't rehash that here. Progressing through the old feed during the quarter, along with making sequential month-over-month improvements in essentially every facet of the operation allowed us to close the quarter with positive adjusted EBITDA in March at MRL.

And halfway through the second quarter, operations are holding strong. It's no surprise that industry index margins isn't helping any of us in RD at the moment but we do continue to expect a clean quarter in Q2 and are focused on continuing to demonstrate the competitive advantages we have in this business. While we do that, we'll wait for industry margins to recover, we continue to believe that industry margins should improve as higher cost producers shut down or cut back break, the new LCFS levels solidify. And ultimately, the industry starts to gain information on new RVO levels to take into account the new production that's been added to the industry. As these steps occur, we expect industry margins to regain fundamental support levels and ultimately rise to the historical approximately $2 a gallon level that we've seen persist steadily for years.

Turning to our CMR business. The first quarter started out with an extremely soft local gasoline and asphalt market in Montana. In fact, while we don't break out Montana Renewables and CMR businesses just yet, I can say that of the approximately $14.5 million of negative EBITDA in Montana and Renewables segment, the vast majority of the loss came from the legacy CMR business in Q1. Historically, Montana's asphalt plant is the most seasonal of our assets as it's highly dependent on wholesale, asphalt and local gas demand. While we typically expect around breakeven results in Q1 that then historically improve as we gear up for the local paving season and spring and then accelerates in the summer, the first quarter was tougher than normal. While wholesale asphalt margins are always less than retail, Q1 impact was exacerbated by a rapid run-up in WCS prices which further compressed margins.

Production was also reduced due to a minor maintenance issue and results were negatively impacted by a $4 million utility surcharge that stemmed from a number of negative 30 degree days and lower in January. In closing, let's move to Slide 10. We've highlighted a number of key catalysts in what we expect to be a transformative year for Calumet that are intended to support our strategy of maximizing value for unitholders. First, our C-Corp conversion remains on track to close mid-year. As we've said before, we believe our story is an interesting one for all investors and we're excited to prove the ability for a broader set to be able to invest in the Calumet story, plus this conversion allows index inclusion which will help support broader demand for our equity.

We are extremely focused on also demonstrating the competitive advantage of our Montana Renewables business, driven by our superior logistics advantage and location. Again, we saw consistent improvements throughout the quarter across all relevant metrics, production, sales, cost, staff and continue to make improvements into Q2. As Todd stated, our work continues on securing a DOE loan which supports the final investment decision on our MAX SAF expansion project. Discussions are active and advancing. Finally, we remain committed to reducing our debt levels and we repaid $50 million of our 2025 notes earlier in April. We believe we have a number of levers to continue to delever over time, including test generation of our proven specialties business, the potential monetization of MRL, portion of MRL or upside potential from MRL's anticipated cash generation.

Operator, that concludes our prepared remarks. We'd now like to open the line for questions. If you can remind the callers of those instructions. Thank you.

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