COST: 20 $MM
VOLUMES: 0.3 MM Bbls
SUGAR LAND, Texas, Feb. 22, 2018 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced full year 2017 net income of $234.4 million, or $2.70 per diluted share, on net sales of $5,988.4 million, compared to net income for full year 2016 of $24.7 million, or 28 cents per diluted share, on net sales of $4,782.4 million. Full year 2017 adjusted EBITDA, a non-GAAP financial measure, was $258.4 million compared to full year 2016 adjusted EBITDA of $181.6 million.
For the fourth quarter of 2017, the company reported net income of $200.5 million, or $2.31 per diluted share, on net sales of $1,593.1 million, compared to net income of $7.1 million, or 8 cents per diluted share, on net sales of $1,353.4 million for the fourth quarter 2016. Fourth quarter 2017 adjusted EBITDA was $49.4 million compared to adjusted EBITDA of $22.8 million for the same period a year earlier.
"CVR Refining delivered solid 2017 full year and fourth quarter results led by stronger crack spreads and record operating rates," said Dave Lamp, CVR Energy's chief executive officer. "The Coffeyville, Kansas, refinery processed more than 131,000 barrels per day (bpd) of crude oil during the year and the Wynnewood, Oklahoma, refinery successfully completed its major scheduled plant turnaround in the fourth quarter.
"Low nitrogen fertilizer pricing continued to dampen CVR Partners' 2017 full year and fourth quarter results," Lamp said. "Fertilizer pricing has improved in the 2018 first quarter mostly due to continued steady demand for product and lower imports into the U.S. market.
"Looking forward, we will continue to focus on safe and reliable operations while increasing shareholder value by implementing self-help initiatives and developing capital improvements that will meaningfully improve our return on capital employed," he concluded.
Petroleum Business
The petroleum business, which is operated by CVR Refining and includes the Coffeyville and Wynnewood refineries, reported fourth quarter 2017 operating income of $46.5 million on net sales of $1,516.7 million, compared to operating income of $15.3 million on net sales of $1,269.4 million in the fourth quarter of 2016.
Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $11.87 in the 2017 fourth quarter, compared to $7.32 during the same period in 2016. Direct operating expenses (exclusive of depreciation and amortization), including major scheduled turnaround expenses, per crude oil throughput barrel, for the 2017 fourth quarter were $7.78, compared to $4.96 in the fourth quarter of 2016.
Fourth quarter 2017 throughputs of crude oil and all other feedstocks and blendstocks totaled 203,263 bpd, compared to fourth quarter 2016 throughputs of crude oil and all other feedstocks and blendstocks of 223,266 bpd.
Nitrogen Fertilizers Business
The fertilizer business, which is operated by CVR Partners and includes the Coffeyville and East Dubuque fertilizer facilities, reported a fourth quarter 2017 operating loss of $10.8 million on net sales of $78.2 million, compared to operating income of $1.0 million on net sales of $84.9 million for the fourth quarter of 2016.
For the fourth quarter of 2017, consolidated average realized gate prices for UAN and ammonia were $132 per ton and $264 per ton, respectively. Consolidated average realized gate prices for UAN and ammonia were $147 per ton and $352 per ton, respectively, for the same period in 2016.
CVR Partners' fertilizer facilities produced a combined 199,500 tons of ammonia during the fourth quarter of 2017, of which 64,100 net tons were available for sale while the rest was upgraded to other fertilizer products, including 306,100 tons of UAN. In the 2016 fourth quarter, the fertilizer facilities produced 207,600 tons of ammonia, of which 62,600 net tons were available for sale while the remainder was upgraded to other fertilizer products, including 330,700 tons of UAN.
Cash, Debt and Dividend
Consolidated cash and cash equivalents was $481.8 million at Dec. 31, 2017. Consolidated total debt was $1,166.5 million at Dec. 31, 2017. The company had no debt exclusive of CVR Refining's and CVR Partners' debt.
CVR Energy also announced a fourth quarter 2017 cash dividend of 50 cents per share. The dividend, as declared by CVR Energy's Board of Directors, will be paid on March 12, 2018, to stockholders of record on March 5, 2018. CVR Energy's fourth quarter cash dividend brings the cumulative cash dividends paid or declared for the 2017 full year to $2.00 per share.
Today, CVR Refining announced a 2017 fourth quarter cash distribution of 45 cents per common unit. CVR Partners announced that it will not pay a cash distribution for the 2017 fourth quarter.
Fourth Quarter 2017 Earnings Conference Call
CVR Energy previously announced that it will host its fourth quarter 2017 Earnings Conference Call for analysts and investors on Thursday, Feb. 22, at 3 p.m. Eastern. The Earnings Conference Call may also include discussion of company developments, forward-looking information and other material information about business and financial matters.
The Earnings Conference Call will be broadcast live over the Internet at
https://www.webcaster4.com/Webcast/Page/1003/24489. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the webcast will be archived and available for 14 days at
https://www.webcaster4.com/Webcast/Page/1003/24489. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13676234.
Forward-Looking Statements
This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "explore," "evaluate," "intend," "may," "might," "plan," "potential," "predict," "seek," "should," or "will," or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. For a discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings. These risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. CVR Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Brandee Stephens
CVR Energy, Inc.
(281) 207-3516
MediaRelations@CVREnergy.com
CVR Energy, Inc. | |||||||||||||||
Financial and Operational Data (all information in this release is unaudited other than the statements of operations and cash flow data for the year ended December 31, 2016 and the balance sheet data as of December 31, 2016). | |||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Consolidated Statement of Operations Data: |
|||||||||||||||
Net sales |
$ |
1,593.1 |
$ |
1,353.4 |
$ |
5,988.4 |
$ |
4,782.4 |
|||||||
Operating costs and expenses: |
|||||||||||||||
Cost of materials and other |
1,300.7 |
1,128.1 |
4,882.9 |
3,847.5 |
|||||||||||
Direct operating expenses(1) |
176.1 |
132.6 |
599.5 |
541.8 |
|||||||||||
Depreciation and amortization |
51.7 |
49.9 |
203.3 |
184.5 |
|||||||||||
Cost of sales |
1,528.5 |
1,310.6 |
5,685.7 |
4,573.8 |
|||||||||||
Selling, general and administrative expenses(1) |
31.5 |
27.5 |
114.2 |
109.1 |
|||||||||||
Depreciation and amortization |
3.1 |
2.4 |
10.7 |
8.6 |
|||||||||||
Operating income |
30.0 |
12.9 |
177.8 |
90.9 |
|||||||||||
Interest expense and other financing costs |
(27.9) |
(27.1) |
(110.1) |
(83.9) |
|||||||||||
Interest income |
0.4 |
0.2 |
1.1 |
0.7 |
|||||||||||
Loss on derivatives, net |
(65.0) |
(14.6) |
(69.8) |
(19.4) |
|||||||||||
Gain (loss) on extinguishment of debt |
— |
0.2 |
— |
(4.9) |
|||||||||||
Other income, net |
0.9 |
0.3 |
1.0 |
5.7 |
|||||||||||
Income (loss) before income tax benefit |
(61.6) |
(28.1) |
— |
(10.9) |
|||||||||||
Income tax benefit(2) |
(234.3) |
(22.1) |
(216.9) |
(19.8) |
|||||||||||
Net income (loss) |
172.7 |
(6.0) |
216.9 |
8.9 |
|||||||||||
Less: Net loss attributable to noncontrolling interest |
(27.8) |
(13.1) |
(17.5) |
(15.8) |
|||||||||||
Net income attributable to CVR Energy stockholders |
$ |
200.5 |
$ |
7.1 |
$ |
234.4 |
$ |
24.7 |
|||||||
Basic and diluted earnings per share |
$ |
2.31 |
$ |
0.08 |
$ |
2.70 |
$ |
0.28 |
|||||||
Dividends declared per share |
$ |
0.50 |
$ |
0.50 |
$ |
2.00 |
$ |
2.00 |
|||||||
Adjusted EBITDA* |
$ |
49.4 |
$ |
22.8 |
$ |
258.4 |
$ |
181.6 |
|||||||
Adjusted net income* |
$ |
24.1 |
$ |
4.4 |
$ |
75.9 |
$ |
41.5 |
|||||||
Adjusted net income per diluted share* |
$ |
0.28 |
$ |
0.05 |
$ |
0.87 |
$ |
0.48 |
|||||||
Weighted-average common shares outstanding - basic and diluted |
86.8 |
86.8 |
86.8 |
86.8 |
____________________ | |
* See "Use of Non-GAAP Financial Measures" below. | |
(1) |
Direct operating expenses and selling, general and administrative expenses for the three months and years ended December 31, 2017 and 2016 are shown exclusive of depreciation and amortization, which amounts are presented separately below direct operating expenses and selling, general and administrative expenses. |
(2) |
The income tax benefit for the three months and year ended December 31, 2017 was favorably impacted as a result of the Tax Cuts and Jobs Act ("TCJA") legislation that was signed into law in December 2017 with the reduction of the federal income tax rate from 35% to 21% beginning in 2018. The Company is required to reflect the impact of tax law changes in its consolidated financial statements in the period of enactment. As a result, our net deferred tax liabilities at December 31, 2017 were remeasured to reflect the lower tax rate that will be in effect for the years in which the deferred tax assets and liabilities will be realized. A benefit of approximately $200.5 million was recognized as a result of the remeasurement. |
As of December 31, | |||||||
2017 |
2016 | ||||||
(audited) | |||||||
(in millions) | |||||||
Balance Sheet Data: |
|||||||
Cash and cash equivalents |
$ |
481.8 |
$ |
735.8 |
|||
Working capital |
550.5 |
749.6 |
|||||
Total assets |
3,806.7 |
4,050.2 |
|||||
Total debt, including current portion |
1,166.5 |
1,164.6 |
|||||
Total CVR stockholders' equity |
918.8 |
858.1 |
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Cash Flow Data: |
|||||||||||||||
Net cash flow provided by (used in): |
|||||||||||||||
Operating activities |
$ |
(159.9) |
$ |
48.6 |
$ |
166.9 |
$ |
267.5 |
|||||||
Investing activities |
(114.6) |
(29.4) |
(195.0) |
(201.4) |
|||||||||||
Financing activities |
(92.8) |
(46.0) |
(225.9) |
(95.4) |
|||||||||||
Net cash flow |
$ |
(367.3) |
$ |
(26.8) |
$ |
(254.0) |
$ |
(29.3) |
Segment Information
Our operations are organized into two reportable segments, Petroleum and Nitrogen Fertilizer. Our operations that are not included in the Petroleum and Nitrogen Fertilizer segments are included in the Corporate and Other segment (along with elimination of intersegment transactions). The Petroleum segment is operated by CVR Refining, LP ("CVR Refining"), in which we own a majority interest as well as serve as the general partner. The Petroleum segment includes the operations of the Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with the crude oil gathering and pipeline systems. Detailed operating results for the Petroleum segment for the quarter and year ended December 31, 2017 are included in CVR Refining's press release dated February 22, 2018. The Nitrogen Fertilizer segment is operated by CVR Partners, LP ("CVR Partners"), in which we own approximately 34% of the common units as of December 31, 2017 and serve as the general partner. On April 1, 2016, CVR Partners completed the merger (the "East Dubuque Merger") whereby CVR Partners acquired a nitrogen fertilizer manufacturing facility located in East Dubuque, Illinois (the "East Dubuque Facility"). The Nitrogen Fertilizer segment consists of a nitrogen fertilizer manufacturing facility located in Coffeyville, Kansas, and the East Dubuque Facility beginning on April 1, 2016, the date of the closing of the acquisition. Detailed operating results for the Nitrogen Fertilizer segment for the quarter and year ended December 31, 2017 are included in CVR Partners' press release dated February 22, 2018.
Petroleum |
Nitrogen |
Corporate |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended December 31, 2017 |
|||||||||||||||
Net sales |
$ |
1,516.7 |
$ |
78.2 |
$ |
(1.8) |
$ |
1,593.1 |
|||||||
Cost of materials and other |
1,281.0 |
21.6 |
(1.9) |
1,300.7 |
|||||||||||
Direct operating expenses(1) |
91.5 |
41.5 |
0.1 |
133.1 |
|||||||||||
Major scheduled turnaround expenses |
43.0 |
— |
— |
43.0 |
|||||||||||
Selling, general and administrative |
21.1 |
6.8 |
3.6 |
31.5 |
|||||||||||
Depreciation and amortization |
33.6 |
19.1 |
2.1 |
54.8 |
|||||||||||
Operating income (loss) |
$ |
46.5 |
$ |
(10.8) |
$ |
(5.7) |
$ |
30.0 |
|||||||
Capital expenditures |
$ |
33.6 |
$ |
3.1 |
$ |
2.0 |
$ |
38.7 |
|||||||
Year Ended December 31, 2017 |
|||||||||||||||
Net sales |
$ |
5,664.2 |
$ |
330.8 |
$ |
(6.6) |
$ |
5,988.4 |
|||||||
Cost of materials and other |
4,804.7 |
84.9 |
(6.7) |
4,882.9 |
|||||||||||
Direct operating expenses(1) |
363.4 |
152.9 |
0.2 |
516.5 |
|||||||||||
Major scheduled turnaround expenses |
80.4 |
2.6 |
— |
83.0 |
|||||||||||
Selling, general and administrative |
78.8 |
25.6 |
9.8 |
114.2 |
|||||||||||
Depreciation and amortization |
133.1 |
74.0 |
6.9 |
214.0 |
|||||||||||
Operating income (loss) |
$ |
203.8 |
$ |
(9.2) |
$ |
(16.8) |
$ |
177.8 |
|||||||
Capital expenditures |
$ |
99.7 |
$ |
14.5 |
$ |
4.4 |
$ |
118.6 |
|||||||
Petroleum |
Nitrogen |
Corporate |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended December 31, 2016 |
|||||||||||||||
Net sales |
$ |
1,269.4 |
$ |
84.9 |
$ |
(0.9) |
$ |
1,353.4 |
|||||||
Cost of materials and other |
1,107.5 |
21.5 |
(0.9) |
1,128.1 |
|||||||||||
Direct operating expenses(1) |
94.7 |
37.9 |
— |
132.6 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
— |
— |
|||||||||||
Selling, general and administrative |
18.5 |
7.3 |
1.7 |
27.5 |
|||||||||||
Depreciation and amortization |
33.4 |
17.2 |
1.7 |
52.3 |
|||||||||||
Operating income (loss) |
$ |
15.3 |
$ |
1.0 |
$ |
(3.4) |
$ |
12.9 |
|||||||
Capital expenditures |
$ |
18.9 |
$ |
5.9 |
$ |
3.2 |
$ |
28.0 |
|||||||
Year Ended December 31, 2016 |
|||||||||||||||
Net sales |
$ |
4,431.3 |
$ |
356.3 |
$ |
(5.2) |
$ |
4,782.4 |
|||||||
Cost of materials and other |
3,759.2 |
93.7 |
(5.4) |
3,847.5 |
|||||||||||
Direct operating expenses(1) |
361.9 |
141.7 |
0.1 |
503.7 |
|||||||||||
Major scheduled turnaround expenses |
31.5 |
6.6 |
— |
38.1 |
|||||||||||
Selling, general and administrative |
71.9 |
29.3 |
7.9 |
109.1 |
|||||||||||
Depreciation and amortization |
129.0 |
58.2 |
5.9 |
193.1 |
|||||||||||
Operating income (loss) |
$ |
77.8 |
$ |
26.8 |
$ |
(13.7) |
$ |
90.9 |
|||||||
Capital expenditures |
$ |
102.3 |
$ |
23.2 |
$ |
7.2 |
$ |
132.7 |
____________________ |
(1) Excluding turnaround expenses. |
Petroleum |
Nitrogen |
Corporate |
Consolidated | |||||||||||||
(in millions) | ||||||||||||||||
December 31, 2017 |
||||||||||||||||
Cash and cash equivalents |
$ |
173.8 |
$ |
49.2 |
$ |
258.8 |
$ |
481.8 |
||||||||
Total assets |
2,269.9 |
1,234.3 |
302.5 |
3,806.7 |
||||||||||||
Total debt, including current portion |
540.6 |
625.9 |
— |
1,166.5 |
||||||||||||
December 31, 2016 |
||||||||||||||||
Cash and cash equivalents |
$ |
314.1 |
$ |
55.6 |
$ |
366.1 |
$ |
735.8 |
||||||||
Total assets |
2,331.9 |
1,312.2 |
406.1 |
4,050.2 |
||||||||||||
Total debt, including current portion |
541.5 |
623.1 |
— |
1,164.6 |
Petroleum Segment Operating Data
The following tables set forth information about our consolidated Petroleum segment operated by CVR Refining, of which we own a majority interest and serve as the general partner, and the Coffeyville and Wynnewood refineries. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Petroleum segment for the quarter and year ended December 31, 2017 are included in CVR Refining's press release dated February 22, 2018.
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum Segment Summary Financial Results: |
|||||||||||||||
Net sales |
$ |
1,516.7 |
$ |
1,269.4 |
$ |
5,664.2 |
$ |
4,431.3 |
|||||||
Operating costs and expenses: |
|||||||||||||||
Cost of materials and other |
1,281.0 |
1,107.5 |
4,804.7 |
3,759.2 |
|||||||||||
Direct operating expenses(1) |
91.5 |
94.7 |
363.4 |
361.9 |
|||||||||||
Major scheduled turnaround expenses |
43.0 |
— |
80.4 |
31.5 |
|||||||||||
Depreciation and amortization |
32.5 |
32.6 |
129.3 |
126.3 |
|||||||||||
Cost of sales |
1,448.0 |
1,234.8 |
5,377.8 |
4,278.9 |
|||||||||||
Selling, general and administrative expenses(1) |
21.1 |
18.5 |
78.8 |
71.9 |
|||||||||||
Depreciation and amortization |
1.1 |
0.8 |
3.8 |
2.7 |
|||||||||||
Operating income |
46.5 |
15.3 |
203.8 |
77.8 |
|||||||||||
Interest expense and other financing costs |
(12.0) |
(11.7) |
(47.2) |
(43.4) |
|||||||||||
Interest income |
0.1 |
0.1 |
0.5 |
0.1 |
|||||||||||
Loss on derivatives, net |
(65.0) |
(14.6) |
(69.8) |
(19.4) |
|||||||||||
Other income, net |
1.4 |
0.2 |
1.5 |
0.2 |
|||||||||||
Income (loss) before income tax expense |
(29.0) |
(10.7) |
88.8 |
15.3 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Net income (loss) |
$ |
(29.0) |
$ |
(10.7) |
$ |
88.8 |
$ |
15.3 |
|||||||
Gross profit |
$ |
68.7 |
$ |
34.6 |
$ |
286.4 |
$ |
152.4 |
|||||||
Refining margin* |
$ |
235.7 |
$ |
161.9 |
$ |
859.5 |
$ |
672.1 |
|||||||
Refining margin adjusted for FIFO impact* |
$ |
205.3 |
$ |
139.5 |
$ |
829.9 |
$ |
620.0 |
|||||||
Adjusted Petroleum EBITDA* |
$ |
76.4 |
$ |
27.7 |
$ |
372.6 |
$ |
222.8 |
____________________ | |
* See "Use of Non-GAAP Financial Measures" below. | |
(1) |
Direct operating expenses for the three months and years ended December 31, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses. Selling, general and administrative expense for the three months and years ended December 31, 2017 and 2016 are shown exclusive of depreciation and amortization, which amounts are presented separately below selling, general and administrative expenses. |
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(dollars per barrel) | |||||||||||||||
Petroleum Segment Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Gross profit |
$ |
3.97 |
$ |
1.81 |
$ |
3.83 |
$ |
2.10 |
|||||||
Refining margin* |
13.63 |
8.49 |
11.50 |
9.27 |
|||||||||||
FIFO impact, favorable |
(1.76) |
(1.17) |
(0.40) |
(0.72) |
|||||||||||
Refining margin adjusted for FIFO impact* |
11.87 |
7.32 |
11.10 |
8.55 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
7.78 |
4.96 |
5.94 |
5.43 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
5.29 |
4.96 |
4.86 |
4.99 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
7.06 |
4.64 |
5.55 |
5.08 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
4.80 |
$ |
4.64 |
$ |
4.55 |
$ |
4.67 |
|||||||
Barrels sold (barrels per day) |
207,112 |
221,921 |
218,912 |
211,643 |
____________________ |
* See "Use of Non-GAAP Financial Measures" below. |
Three Months Ended |
Year Ended | ||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||||||
% |
% |
% |
% | ||||||||||||||||||||||||
Petroleum Segment Summary Refining Throughput and Production Data (bpd): |
|||||||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||||||
Sweet |
182,339 |
89.7 |
185,154 |
82.9 |
194,613 |
89.8 |
177,256 |
84.8 |
|||||||||||||||||||
Medium |
— |
— |
3,160 |
1.4 |
— |
— |
2,525 |
1.2 |
|||||||||||||||||||
Heavy sour |
5,657 |
2.8 |
19,108 |
8.6 |
10,135 |
4.7 |
18,261 |
8.7 |
|||||||||||||||||||
Total crude oil throughput |
187,996 |
92.5 |
207,422 |
92.9 |
204,748 |
94.5 |
198,042 |
94.7 |
|||||||||||||||||||
All other feedstocks and blendstocks |
15,267 |
7.5 |
15,844 |
7.1 |
12,032 |
5.5 |
11,077 |
5.3 |
|||||||||||||||||||
Total throughput |
203,263 |
100.0 |
223,266 |
100.0 |
216,780 |
100.0 |
209,119 |
100.0 |
|||||||||||||||||||
Production: |
|||||||||||||||||||||||||||
Gasoline |
104,169 |
50.8 |
114,682 |
51.1 |
110,226 |
50.7 |
108,762 |
51.9 |
|||||||||||||||||||
Distillate |
85,550 |
41.8 |
91,021 |
40.5 |
90,409 |
41.6 |
85,092 |
40.6 |
|||||||||||||||||||
Other (excluding internally produced fuel) |
15,128 |
7.4 |
18,782 |
8.4 |
16,818 |
7.7 |
15,751 |
7.5 |
|||||||||||||||||||
Total refining production (excluding internally produced fuel) |
204,847 |
100.0 |
224,485 |
100.0 |
217,453 |
100.0 |
209,605 |
100.0 |
|||||||||||||||||||
Product price (dollars per gallon): |
|||||||||||||||||||||||||||
Gasoline |
$ |
1.69 |
$ |
1.42 |
$ |
1.59 |
$ |
1.34 |
|||||||||||||||||||
Distillate |
1.89 |
1.52 |
1.66 |
1.36 |
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Market Indicators (dollars per barrel): |
|||||||||||||||
West Texas Intermediate (WTI) NYMEX |
$ |
55.30 |
$ |
49.29 |
$ |
50.85 |
$ |
43.47 |
|||||||
Crude Oil Differentials: |
|||||||||||||||
WTI less WTS (light/medium sour) |
0.42 |
0.92 |
0.97 |
0.85 |
|||||||||||
WTI less WCS (heavy sour) |
16.61 |
15.04 |
12.69 |
13.95 |
|||||||||||
NYMEX Crack Spreads: |
|||||||||||||||
Gasoline |
16.63 |
12.96 |
17.46 |
15.42 |
|||||||||||
Heating Oil |
23.96 |
16.45 |
18.93 |
13.89 |
|||||||||||
NYMEX 2-1-1 Crack Spread |
20.29 |
14.70 |
18.19 |
14.66 |
|||||||||||
PADD II Group 3 Product Basis: |
|||||||||||||||
Gasoline |
(0.14) |
(3.70) |
(1.83) |
(3.62) |
|||||||||||
Ultra Low Sulfur Diesel |
(0.53) |
(2.55) |
(0.50) |
(0.92) |
|||||||||||
PADD II Group 3 Product Crack Spread: |
|||||||||||||||
Gasoline |
16.49 |
9.28 |
15.63 |
11.82 |
|||||||||||
Ultra Low Sulfur Diesel |
23.42 |
13.91 |
18.42 |
12.96 |
|||||||||||
PADD II Group 3 2-1-1 |
19.96 |
11.60 |
17.03 |
12.39 |
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Coffeyville Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
1,117.3 |
$ |
854.7 |
$ |
3,867.8 |
$ |
2,948.9 |
|||||||
Cost of materials and other |
936.2 |
750.6 |
3,285.8 |
2,513.9 |
|||||||||||
Direct operating expenses(1) |
54.6 |
52.0 |
209.5 |
196.4 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
— |
31.5 |
|||||||||||
Depreciation and amortization |
17.7 |
18.4 |
71.5 |
69.7 |
|||||||||||
Gross profit |
108.8 |
33.7 |
301.0 |
137.4 |
|||||||||||
Add: |
|||||||||||||||
Direct operating expenses(1) |
54.6 |
52.0 |
209.5 |
196.4 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
— |
31.5 |
|||||||||||
Depreciation and amortization |
17.7 |
18.4 |
71.5 |
69.7 |
|||||||||||
Refining margin* |
181.1 |
104.1 |
582.0 |
435.0 |
|||||||||||
FIFO impact, favorable |
(21.7) |
(15.4) |
(20.2) |
(37.8) |
|||||||||||
Refining margin adjusted for FIFO impact* |
$ |
159.4 |
$ |
88.7 |
$ |
561.8 |
$ |
397.2 |
|||||||
Coffeyville Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Gross profit |
$ |
8.87 |
$ |
2.76 |
$ |
6.27 |
$ |
3.03 |
|||||||
Refining margin* |
14.77 |
8.55 |
12.12 |
9.57 |
|||||||||||
FIFO impact, favorable |
(1.77) |
(1.26) |
(0.42) |
(0.83) |
|||||||||||
Refining margin adjusted for FIFO impact* |
13.00 |
7.29 |
11.70 |
8.74 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
4.46 |
4.27 |
4.36 |
5.02 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
4.46 |
4.27 |
4.36 |
4.32 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
4.02 |
3.84 |
4.00 |
4.54 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
4.02 |
$ |
3.84 |
$ |
4.00 |
$ |
3.92 |
|||||||
Barrels sold (barrels per day) |
147,633 |
146,930 |
143,598 |
137,047 |
____________________ | |
* See "Use of Non-GAAP Financial Measures" below. | |
(1) |
Direct operating expenses for the three months and years ended December 31, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses. |
Three Months Ended |
Year Ended | ||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||
% |
% |
% |
% | ||||||||||||||||||||
Coffeyville Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
127,586 |
87.9 |
113,243 |
78.4 |
121,434 |
86.4 |
104,679 |
78.9 |
|||||||||||||||
Medium |
— |
— |
— |
— |
— |
— |
1,229 |
0.9 |
|||||||||||||||
Heavy sour |
5,657 |
3.9 |
19,108 |
13.2 |
10,135 |
7.2 |
18,261 |
13.8 |
|||||||||||||||
Total crude oil throughput |
133,243 |
91.8 |
132,351 |
91.6 |
131,569 |
93.6 |
124,169 |
93.6 |
|||||||||||||||
All other feedstocks and blendstocks |
11,834 |
8.2 |
12,206 |
8.4 |
9,058 |
6.4 |
8,453 |
6.4 |
|||||||||||||||
Total throughput |
145,077 |
100.0 |
144,557 |
100.0 |
140,627 |
100.0 |
132,622 |
100.0 |
|||||||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
75,531 |
51.2 |
75,273 |
51.1 |
71,915 |
50.4 |
69,303 |
51.4 |
|||||||||||||||
Distillate |
61,568 |
41.7 |
60,550 |
41.1 |
59,593 |
41.7 |
55,790 |
41.4 |
|||||||||||||||
Other (excluding internally produced fuel) |
10,490 |
7.1 |
11,446 |
7.8 |
11,335 |
7.9 |
9,756 |
7.2 |
|||||||||||||||
Total refining production (excluding internally produced fuel) |
147,589 |
100.0 |
147,269 |
100.0 |
142,843 |
100.0 |
134,849 |
100.0 |
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Wynnewood Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
398.3 |
$ |
413.6 |
$ |
1,792.1 |
$ |
1,478.0 |
|||||||
Cost of materials and other |
345.0 |
356.9 |
1,519.7 |
1,245.4 |
|||||||||||
Direct operating expenses(1) |
36.9 |
42.7 |
153.9 |
165.5 |
|||||||||||
Major scheduled turnaround expenses |
43.0 |
— |
80.4 |
— |
|||||||||||
Depreciation and amortization |
13.2 |
12.8 |
51.7 |
50.7 |
|||||||||||
Gross profit (loss) |
(39.8) |
1.2 |
(13.6) |
16.4 |
|||||||||||
Add: |
|||||||||||||||
Direct operating expenses(1) |
36.9 |
42.7 |
153.9 |
165.5 |
|||||||||||
Major scheduled turnaround expenses |
43.0 |
— |
80.4 |
— |
|||||||||||
Depreciation and amortization |
13.2 |
12.8 |
51.7 |
50.7 |
|||||||||||
Refining margin* |
53.3 |
56.7 |
272.4 |
232.6 |
|||||||||||
FIFO impact, favorable |
(8.7) |
(7.0) |
(9.4) |
(14.2) |
|||||||||||
Refining margin adjusted for FIFO impact* |
$ |
44.6 |
$ |
49.7 |
$ |
263.0 |
$ |
218.4 |
|||||||
Wynnewood Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Gross profit (loss) |
$ |
(7.90) |
$ |
0.16 |
$ |
(0.51) |
$ |
0.61 |
|||||||
Refining margin* |
10.58 |
8.20 |
10.20 |
8.60 |
|||||||||||
FIFO impact, favorable |
(1.73) |
(1.01) |
(0.35) |
(0.53) |
|||||||||||
Refining margin adjusted for FIFO impact* |
8.85 |
7.19 |
9.85 |
8.07 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
15.86 |
6.19 |
8.77 |
6.12 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
7.32 |
6.19 |
5.76 |
6.12 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
14.60 |
6.20 |
8.52 |
6.06 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
6.74 |
$ |
6.20 |
$ |
5.60 |
$ |
6.06 |
|||||||
Barrels sold (barrels per day) |
59,479 |
74,991 |
75,314 |
74,596 |
____________________ | |
* See "Use of Non-GAAP Financial Measures" below. | |
(1) |
Direct operating expenses for the three months and years ended December 31, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses. |
Three Months Ended |
Year Ended | ||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||
% |
% |
% |
% | ||||||||||||||||||||
Wynnewood Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
54,753 |
94.1 |
71,911 |
91.4 |
73,179 |
96.1 |
72,577 |
94.9 |
|||||||||||||||
Medium |
— |
— |
3,160 |
4.0 |
— |
— |
1,296 |
1.7 |
|||||||||||||||
Heavy sour |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||
Total crude oil throughput |
54,753 |
94.1 |
75,071 |
95.4 |
73,179 |
96.1 |
73,873 |
96.6 |
|||||||||||||||
All other feedstocks and blendstocks |
3,433 |
5.9 |
3,638 |
4.6 |
2,974 |
3.9 |
2,624 |
3.4 |
|||||||||||||||
Total throughput |
58,186 |
100.0 |
78,709 |
100.0 |
76,153 |
100.0 |
76,497 |
100.0 |
|||||||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
28,638 |
50.0 |
39,409 |
51.0 |
38,311 |
51.3 |
39,459 |
52.8 |
|||||||||||||||
Distillate |
23,982 |
41.9 |
30,471 |
39.5 |
30,816 |
41.3 |
29,302 |
39.2 |
|||||||||||||||
Other (excluding internally produced fuel) |
4,638 |
8.1 |
7,336 |
9.5 |
5,483 |
7.4 |
5,995 |
8.0 |
|||||||||||||||
Total refining production (excluding internally produced fuel) |
57,258 |
100.0 |
77,216 |
100.0 |
74,610 |
100.0 |
74,756 |
100.0 |
Nitrogen Fertilizer Segment Operating Data
The following tables set forth information about the Nitrogen Fertilizer segment operated by CVR Partners, of which we own approximately 34% of the common units as of December 31, 2017 and serve as the general partner. The financial and operational data include East Dubuque Facility, beginning on April 1, 2016, the date of the closing of the acquisition. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Nitrogen Fertilizer segment for the quarter and year ended December 31, 2017 are included in CVR Partners' press release dated February 22, 2018.
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer Segment Business Financial Results: |
|||||||||||||||
Net sales |
$ |
78.2 |
$ |
84.9 |
$ |
330.8 |
$ |
356.3 |
|||||||
Cost of materials and other |
21.6 |
21.5 |
84.9 |
93.7 |
|||||||||||
Direct operating expenses(1) |
41.5 |
37.9 |
152.9 |
141.7 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
2.6 |
6.6 |
|||||||||||
Depreciation and amortization |
19.1 |
17.2 |
74.0 |
58.2 |
|||||||||||
Cost of sales |
82.2 |
76.6 |
314.4 |
300.2 |
|||||||||||
Selling, general and administrative expenses |
6.8 |
7.3 |
25.6 |
29.3 |
|||||||||||
Operating income (loss) |
(10.8) |
1.0 |
(9.2) |
26.8 |
|||||||||||
Interest expense and other financing costs |
(15.8) |
(15.8) |
(62.9) |
(48.6) |
|||||||||||
Gain (loss) on extinguishment of debt |
— |
0.2 |
— |
(4.9) |
|||||||||||
Other income (loss), net |
(0.6) |
0.1 |
(0.5) |
0.1 |
|||||||||||
Loss before income tax expense |
(27.2) |
(14.5) |
(72.6) |
(26.6) |
|||||||||||
Income tax expense |
0.2 |
— |
0.2 |
0.3 |
|||||||||||
Net loss |
$ |
(27.4) |
$ |
(14.5) |
$ |
(72.8) |
$ |
(26.9) |
|||||||
Adjusted Nitrogen Fertilizer EBITDA* |
$ |
7.7 |
$ |
18.3 |
$ |
65.8 |
$ |
92.7 |
____________________ | |
* See Use of Non-GAAP Financial Measures below. | |
(1) |
Direct operating expenses for the three months and years ended December 31, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses. |
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Nitrogen Fertilizer Segment Key Operating Statistics: |
|||||||||||||||
Consolidated sales (thousand tons): |
|||||||||||||||
Ammonia |
84.3 |
55.7 |
286.1 |
201.4 |
|||||||||||
UAN |
302.9 |
335.1 |
1,254.5 |
1,237.5 |
|||||||||||
Consolidated product pricing at gate (dollars per ton)(1): |
|||||||||||||||
Ammonia |
$ |
264 |
$ |
352 |
$ |
280 |
$ |
376 |
|||||||
UAN |
$ |
132 |
$ |
147 |
$ |
152 |
$ |
177 |
|||||||
Consolidated production volume (thousand tons): |
|||||||||||||||
Ammonia (gross produced)(2) |
199.5 |
207.6 |
814.7 |
693.5 |
|||||||||||
Ammonia (net available for sale)(2) |
64.1 |
62.6 |
267.8 |
183.6 |
|||||||||||
UAN |
306.1 |
330.7 |
1,268.4 |
1,192.6 |
|||||||||||
Feedstock: |
|||||||||||||||
Petroleum coke used in production (thousand tons) |
116.5 |
129.4 |
487.5 |
513.7 |
|||||||||||
Petroleum coke used in production (dollars per ton) |
$ |
13 |
$ |
18 |
$ |
17 |
$ |
15 |
|||||||
Natural gas used in production (thousands of MMBtus)(3) |
1,838.8 |
2,124.3 |
7,619.5 |
5,596.0 |
|||||||||||
Natural gas used in production (dollars per MMBtu)(3) (4) |
$ |
3.24 |
$ |
3.30 |
$ |
3.24 |
$ |
2.96 |
|||||||
Natural gas in cost of materials and other (thousands of MMBtus)(3) |
2,153.2 |
1,876.2 |
8,051.5 |
4,618.7 |
|||||||||||
Natural gas in cost of materials and other (dollars per MMBtus)(3) (4) |
$ |
3.17 |
$ |
3.15 |
$ |
3.26 |
$ |
2.87 |
|||||||
Coffeyville Facility on-stream factor(5): |
|||||||||||||||
Gasification |
100.0 |
% |
96.1 |
% |
98.5 |
% |
96.9 |
% | |||||||
Ammonia |
99.5 |
% |
91.1 |
% |
97.4 |
% |
94.9 |
% | |||||||
UAN |
88.8 |
% |
93.1 |
% |
91.7 |
% |
93.1 |
% | |||||||
East Dubuque Facility on-stream factors(5): |
|||||||||||||||
Ammonia |
86.3 |
% |
99.7 |
% |
90.4 |
% |
87.7 |
% | |||||||
UAN |
86.8 |
% |
99.8 |
% |
90.3 |
% |
87.3 |
% | |||||||
Market Indicators: |
|||||||||||||||
Ammonia — Southern Plains (dollars per ton) |
$ |
315 |
$ |
313 |
$ |
314 |
$ |
356 |
|||||||
Ammonia — Corn belt (dollars per ton) |
$ |
340 |
$ |
360 |
$ |
358 |
$ |
416 |
|||||||
UAN — Corn belt (dollars per ton) |
$ |
190 |
$ |
175 |
$ |
192 |
$ |
208 |
|||||||
Natural gas NYMEX (dollars per MMBtu) |
$ |
2.92 |
$ |
3.18 |
$ |
3.02 |
$ |
2.55 |
____________________ | |
(1) |
Product pricing at gate represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry. |
(2) |
Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represent the ammonia available for sale that was not upgraded into other fertilizer products. |
(3) |
The feedstock natural gas shown above does not include natural gas used for fuel. The cost of fuel natural gas is included in direct operating expense. |
(4) |
The cost per MMBtu excludes derivative activity, when applicable. The impact of natural gas derivative activity during the periods presented was not material. |
(5) |
On-stream factor is the total number of hours operated divided by the total number of hours in the reporting period and is included as a measure of operating efficiency. |
Coffeyville Facility | |
The Linde air separation unit experienced a shut down during the second quarter of 2017. Following the Linde outage, the Coffeyville Facility UAN unit experienced a number of operational challenges, resulting in approximately 11 days of UAN downtime during the second quarter of 2017. Excluding the impact of the Linde air separation unit outage at the Coffeyville Facility, the UAN unit on-stream factors at the Coffeyville Facility would have been 94.7% for the year ended December 31, 2017. | |
East Dubuque Facility | |
Excluding the impact of approximately 14 days of downtime associated with the 2017 full facility turnaround at the East Dubuque Nitrogen Fertilizer Facility, the on-stream factors would have been 94.2% for ammonia and 94.0% for UAN for the year ended December 31, 2017. | |
Excluding the impact of approximately 28 days of downtime associated with the 2016 full facility turnaround at the East Dubuque Nitrogen Fertilizer Facility, the on-stream factors would have been 97.8% for ammonia and 97.1% for UAN for the post-acquisition period ended December 31, 2016. |
Use of Non-GAAP Financial Measures
To supplement our actual results in accordance with accounting principles generally accepted in the United States of America ("GAAP") for the applicable periods, we also use the non-GAAP financial measures noted above, which are reconciled to our GAAP-based results below. These non-GAAP financial measures should not be considered an alternative for GAAP results. The adjustments are provided to enhance an overall understanding of our financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.
Adjusted net income is not a recognized term under GAAP and should not be substituted for net income (loss) as a measure of our performance, but rather should be utilized as a supplemental measure of financial performance in evaluating our business. Management believes that adjusted net income provides relevant and useful information that enables external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, to better understand and evaluate our ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance. Adjusted net income per diluted share represents adjusted net income divided by weighted-average diluted shares outstanding. Adjusted net income represents net income (loss), as adjusted, that is attributable to CVR Energy stockholders.
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Reconciliation of Net Income (Loss) to Adjusted Net Income: |
|||||||||||||||
Income (loss) before income tax benefit |
$ |
(61.6) |
$ |
(28.1) |
$ |
— |
$ |
(10.9) |
|||||||
Adjustments: |
|||||||||||||||
FIFO impact, favorable |
(30.4) |
(22.4) |
(29.6) |
(52.1) |
|||||||||||
Major scheduled turnaround expenses |
43.0 |
— |
83.0 |
38.1 |
|||||||||||
Loss on derivatives, net |
65.0 |
14.6 |
69.8 |
19.4 |
|||||||||||
Current period settlement on derivative contracts(1) |
(17.7) |
1.2 |
(16.6) |
36.4 |
|||||||||||
(Gain) loss on extinguishment of debt(2) |
— |
(0.2) |
— |
4.9 |
|||||||||||
Expenses associated with the East Dubuque Merger(3) |
— |
— |
— |
3.1 |
|||||||||||
Insurance recovery - Business interruption(4) |
— |
— |
(1.1) |
(2.1) |
|||||||||||
Adjusted net income (loss) before income tax benefit and noncontrolling interest |
(1.7) |
(34.9) |
105.5 |
36.8 |
|||||||||||
Adjusted net income (loss) attributed to noncontrolling interest |
7.5 |
15.5 |
(18.8) |
(4.1) |
|||||||||||
Income tax benefit, as adjusted |
218.8 |
23.8 |
189.7 |
8.8 |
|||||||||||
Net tax benefit related to the TCJA(5) |
(200.5) |
— |
(200.5) |
— |
|||||||||||
Adjusted net income |
$ |
24.1 |
$ |
4.4 |
$ |
75.9 |
$ |
41.5 |
|||||||
Adjusted net income per diluted share |
$ |
0.28 |
$ |
0.05 |
$ |
0.87 |
$ |
0.48 |
Refining margin per crude oil throughput barrel is a measurement calculated as the difference between net sales and cost of materials and other. Refining margin is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of materials and other at which they are able to sell refined products. Each of the components used in this calculation (net sales and cost of materials and other) can be taken directly from our Petroleum segment's Statements of Operations. Our calculation of refining margin may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. In order to derive the refining margin per crude oil throughput barrel, we utilize the total dollar figures for refining margin as derived above and divide by the applicable number of crude oil throughput barrels for the period. We believe that refining margin and refining margin per crude oil throughput barrel are important to enable investors to better understand and evaluate the Petroleum segment's ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance.
Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference between the Petroleum segment's net sales and cost of materials and other adjusted for FIFO impact. Refining margin adjusted for FIFO impact is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of materials and other (taking into account the impact of the utilization of FIFO) at which they are able to sell refined products. Our calculation of refining margin adjusted for FIFO impact may differ from calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. Under the FIFO accounting method, changes in crude oil prices can cause fluctuations in the inventory valuation of crude oil, work in process and finished goods, thereby resulting in a favorable FIFO impact when crude oil prices increase and an unfavorable FIFO impact when crude oil prices decrease. In order to derive the refining margin per crude oil throughput barrel adjusted for FIFO impact, we utilize the total dollar figures for refining margin adjusted for FIFO impact as derived above and divide by the applicable number of crude oil throughput barrels for the period. We believe that refining margin adjusted for FIFO impact and refining margin per crude oil throughput barrel adjusted for FIFO impact are important to enable investors to better understand and evaluate the petroleum business' ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance.
The calculation of refining margin, refining margin adjusted for FIFO impact, refining margin per crude oil throughput barrel and refining margin adjusted for FIFO impact per crude oil throughput barrel (each a non-GAAP financial measure), including a reconciliation to the most directly comparable GAAP financial measure for the three months and years ended December 31, 2017 and 2016 is as follows:
Petroleum Segment Operating Data |
|||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Net sales |
$ |
1,516.7 |
$ |
1,269.4 |
$ |
5,664.2 |
$ |
4,431.3 |
|||||||
Cost of materials and other |
1,281.0 |
1,107.5 |
4,804.7 |
3,759.2 |
|||||||||||
Direct operating expenses (exclusive of depreciation and amortization as reflected below) |
91.5 |
94.7 |
363.4 |
361.9 |
|||||||||||
Major schedule turnaround expenses |
43.0 |
— |
80.4 |
31.5 |
|||||||||||
Depreciation and amortization |
32.5 |
32.6 |
129.3 |
126.3 |
|||||||||||
Gross profit |
68.7 |
34.6 |
286.4 |
152.4 |
|||||||||||
Add: |
|||||||||||||||
Direct operating expenses (exclusive of depreciation and amortization as reflected below) |
91.5 |
94.7 |
363.4 |
361.9 |
|||||||||||
Major schedule turnaround expenses |
43.0 |
— |
80.4 |
31.5 |
|||||||||||
Depreciation and amortization |
32.5 |
32.6 |
129.3 |
126.3 |
|||||||||||
Refining margin |
235.7 |
161.9 |
859.5 |
672.1 |
|||||||||||
FIFO impact, favorable |
(30.4) |
(22.4) |
(29.6) |
(52.1) |
|||||||||||
Refining margin adjusted for FIFO impact |
$ |
205.3 |
$ |
139.5 |
$ |
829.9 |
$ |
620.0 |
|||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Total crude oil throughput barrels per day |
187,996 |
207,422 |
204,748 |
198,042 |
|||||||||||
Days in the period |
92 |
92 |
365 |
366 |
|||||||||||
Total crude oil throughput barrels |
17,295,632 |
19,082,824 |
74,733,020 |
72,483,372 |
|||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin |
$ |
235.7 |
$ |
161.9 |
$ |
859.5 |
$ |
672.1 |
|||||||
Divided by: crude oil throughput barrels |
17.3 |
19.1 |
74.7 |
72.5 |
|||||||||||
Refining margin per crude oil throughput barrel |
$ |
13.63 |
$ |
8.49 |
$ |
11.50 |
$ |
9.27 |
|||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin adjusted for FIFO impact |
$ |
205.3 |
$ |
139.5 |
$ |
829.9 |
$ |
620.0 |
|||||||
Divided by: crude oil throughput barrels |
17.3 |
19.1 |
74.7 |
72.5 |
|||||||||||
Refining margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
11.87 |
$ |
7.32 |
$ |
11.10 |
$ |
8.55 |
Coffeyville Refinery |
|||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Total crude oil throughput barrels per day |
133,243 |
132,351 |
131,569 |
124,169 |
|||||||||||
Days in the period |
92 |
92 |
365 |
366 |
|||||||||||
Total crude oil throughput barrels |
12,258,356 |
12,176,292 |
48,022,685 |
45,445,854 |
|||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin |
$ |
181.1 |
$ |
104.1 |
$ |
582.0 |
$ |
435.0 |
|||||||
Divided by: crude oil throughput barrels |
12.3 |
12.2 |
48.0 |
45.4 |
|||||||||||
Refining margin per crude oil throughput barrel |
$ |
14.77 |
$ |
8.55 |
$ |
12.12 |
$ |
9.57 |
|||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin adjusted for FIFO impact |
$ |
159.4 |
$ |
88.7 |
$ |
561.8 |
$ |
397.2 |
|||||||
Divided by: crude oil throughput barrels |
12.3 |
12.2 |
48.0 |
45.4 |
|||||||||||
Refining margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
13.00 |
$ |
7.29 |
$ |
11.70 |
$ |
8.74 |
Wynnewood Refinery |
|||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Total crude oil throughput barrels per day |
54,753 |
75,071 |
73,179 |
73,873 |
|||||||||||
Days in the period |
92 |
92 |
365 |
366 |
|||||||||||
Total crude oil throughput barrels |
5,037,276 |
6,906,532 |
26,710,335 |
27,037,518 |
|||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin |
$ |
53.3 |
$ |
56.7 |
$ |
272.4 |
$ |
232.6 |
|||||||
Divided by: crude oil throughput barrels |
5.0 |
6.9 |
26.7 |
27.0 |
|||||||||||
Refining margin per crude oil throughput barrel |
$ |
10.58 |
$ |
8.20 |
$ |
10.20 |
$ |
8.60 |
|||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin adjusted for FIFO impact |
$ |
44.6 |
$ |
49.7 |
$ |
263.0 |
$ |
218.4 |
|||||||
Divided by: crude oil throughput barrels |
5.0 |
6.9 |
26.7 |
27.0 |
|||||||||||
Refining margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
8.85 |
$ |
7.19 |
$ |
9.85 |
$ |
8.07 |
EBITDA and Adjusted EBITDA. EBITDA represents net income attributable to CVR Energy stockholders before consolidated (i) interest expense and other financing costs, net of interest income, (ii) income tax expense (benefit), and (iii) depreciation and amortization, less the portion of these adjustments attributable to non-controlling interest. Adjusted EBITDA represents EBITDA adjusted for, as applicable, consolidated (i) FIFO impact (favorable) unfavorable; (ii) major scheduled turnaround expenses (that many of our competitors capitalize and thereby exclude from their measures of EBITDA and adjusted EBITDA); (iii) (gain) loss on derivatives, net; (iv) current period settlements on derivative contracts; (v) (gain) loss on extinguishment of debt; (vi) expenses associated with the East Dubuque Merger and (vii) business interruption insurance recovery, less the portion of these adjustments attributable to non-controlling interest. EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be substituted for net income (loss) or cash flow from operations. We believe that EBITDA and Adjusted EBITDA enable investors to better understand and evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently. EBITDA and Adjusted EBITDA represent EBITDA and Adjusted EBITDA that is attributable to CVR Energy stockholders.
A reconciliation of net income attributable to CVR Energy stockholders to EBITDA and EBITDA to Adjusted EBITDA for the three months and year ended December 31, 2017 and 2016 is as follows:
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Net income attributable to CVR Energy stockholders |
$ |
200.5 |
$ |
7.1 |
$ |
234.4 |
$ |
24.7 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
27.5 |
26.9 |
109.0 |
83.2 |
|||||||||||
Income tax benefit |
(234.3) |
(22.1) |
(216.9) |
(19.8) |
|||||||||||
Depreciation and amortization |
54.8 |
52.3 |
214.0 |
193.1 |
|||||||||||
Adjustments attributable to noncontrolling interest |
(38.5) |
(37.0) |
(151.2) |
(127.3) |
|||||||||||
EBITDA |
10.0 |
27.2 |
189.3 |
153.9 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact, favorable |
(30.4) |
(22.4) |
(29.6) |
(52.1) |
|||||||||||
Major scheduled turnaround expenses |
43.0 |
— |
83.0 |
38.1 |
|||||||||||
Loss on derivatives, net |
65.0 |
14.6 |
69.8 |
19.4 |
|||||||||||
Current period settlements on derivative contracts(1) |
(17.7) |
1.2 |
(16.6) |
36.4 |
|||||||||||
(Gain) loss on extinguishment of debt(2) |
— |
(0.2) |
— |
4.9 |
|||||||||||
Expenses associated with the East Dubuque Merger(3) |
— |
— |
— |
3.1 |
|||||||||||
Insurance recovery - business interruption(4) |
— |
— |
(1.1) |
(2.1) |
|||||||||||
Adjustments attributable to noncontrolling interest |
(20.5) |
2.4 |
(36.4) |
(20.0) |
|||||||||||
Adjusted EBITDA |
$ |
49.4 |
$ |
22.8 |
$ |
258.4 |
$ |
181.6 |
Petroleum and Nitrogen Fertilizer EBITDA and Adjusted EBITDA. EBITDA by operating segment represents net income (loss) before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA by operating segment represents EBITDA by operating segment adjusted for, as applicable (i) FIFO impact (favorable) unfavorable; (ii) major scheduled turnaround expenses (that many of our competitors capitalize and thereby exclude from their measures of EBITDA and adjusted EBITDA); (iii) (gain) loss on extinguishment of debt; (iv) (gain) loss on derivatives, net; (v) current period settlements on derivative contracts; (vi) expenses associated with the East Dubuque Merger and (vii) business interruption insurance recovery.
We present Adjusted EBITDA by operating segment because it is the starting point for CVR Refining's and CVR Partners' determination of available cash for distribution. EBITDA and Adjusted EBITDA by operating segment are not recognized terms under GAAP and should not be substituted for net income (loss) as a measure of performance. We believe that EBITDA and Adjusted EBITDA by operating segment enable investors to better understand CVR Refining's and CVR Partners' ability to make distributions to their common unitholders, help investors evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.
A reconciliation of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA for the Petroleum and Nitrogen Fertilizer segments for the three months and years ended December 31, 2017 and 2016 is as follows:
Three Months Ended |
Year Ended December 31, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum: |
|||||||||||||||
Petroleum net income (loss) |
$ |
(29.0) |
$ |
(10.7) |
$ |
88.8 |
$ |
15.3 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
11.9 |
11.6 |
46.7 |
43.3 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Depreciation and amortization |
33.6 |
33.4 |
133.1 |
129.0 |
|||||||||||
Petroleum EBITDA |
16.5 |
34.3 |
268.6 |
187.6 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact, favorable |
(30.4) |
(22.4) |
(29.6) |
(52.1) |
|||||||||||
Major scheduled turnaround expenses |
43.0 |
— |
80.4 |
31.5 |
|||||||||||
Loss on derivatives, net |
65.0 |
14.6 |
69.8 |
19.4 |
|||||||||||
Current period settlements on derivative contracts(1) |
(17.7) |
1.2 |
(16.6) |
36.4 |
|||||||||||
Adjusted Petroleum EBITDA |
$ |
76.4 |
$ |
27.7 |
$ |
372.6 |
$ |
222.8 |
|||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer: |
|||||||||||||||
Nitrogen Fertilizer net loss |
$ |
(27.4) |
$ |
(14.5) |
$ |
(72.8) |
$ |
(26.9) |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net |
15.8 |
15.8 |
62.9 |
48.6 |
|||||||||||
Income tax expense |
0.2 |
— |
0.2 |
0.3 |
|||||||||||
Depreciation and amortization |
19.1 |
17.2 |
74.0 |
58.2 |
|||||||||||
Nitrogen Fertilizer EBITDA |
7.7 |
18.5 |
64.3 |
80.2 |
|||||||||||
Add: |
|||||||||||||||
Major scheduled turnaround expenses |
— |
— |
2.6 |
6.6 |
|||||||||||
(Gain) loss on extinguishment of debt(2) |
— |
(0.2) |
— |
4.9 |
|||||||||||
Expenses associated with the East Dubuque Merger(3) |
— |
— |
— |
3.1 |
|||||||||||
Less: |
|||||||||||||||
Insurance recovery - business interruption |
— |
— |
(1.1) |
(2.1) |
|||||||||||
Adjusted Nitrogen Fertilizer EBITDA |
$ |
7.7 |
$ |
18.3 |
$ |
65.8 |
$ |
92.7 |
____________________ | |
(1) |
Represents the portion of gain (loss) on derivatives, net related to contracts that matured during the respective periods and settled with counterparties. There are no premiums paid or received at inception of the derivative contracts and upon settlement, there is no cost recovery associated with these contracts. |
(2) |
Represents a loss on extinguishment of debt incurred by CVR Partners in June 2016 in connection with the repurchase of senior notes assumed in the East Dubuque Merger, which includes a prepayment premium and write-off of the unamortized purchase accounting adjustment. |
(3) |
On April 1, 2016, CVR Partners completed the East Dubuque Merger. CVR Partners incurred legal and other professional fees and other merger related expenses that are referred to herein as expenses associated with the East Dubuque Merger, which are included in selling, general and administrative expenses. |
(4) |
CVR Partners received business interruption insurance recoveries of $1.1 million and $2.1 million in the third quarter of 2017 and 2016, respectively. |
(5) |
Represents a one-time benefit related to the remeasurement of our net deferred tax liabilities associated with the TCJA. A benefit of approximately $200.5 million was recognized as a result of the remeasurement. |
View original content with multimedia:http://www.prnewswire.com/news-releases/cvr-energy-reports-2017-fourth-quarter-and-full-year-results-and-announces-cash-dividend-of-50-cents-300602623.html
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, Nov. 1, 2017 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced third quarter 2017 net income of $22.2 million, or 26 cents per diluted share, on net sales of $1,453.8 million, compared to net income of $5.4 million, or 6 cents per diluted share, on net sales of $1,240.3 million for the 2016 third quarter. Third quarter 2017 adjusted EBITDA, a non-GAAP financial measure, was $90.9 million, compared to third quarter 2016 adjusted EBITDA of $58.2 million.
For the first nine months of 2017, net income was $33.9 million, or 39 cents per diluted share, on net sales of $4,395.3 million, compared to net income of $17.6 million, or 20 cents per diluted share, on net sales of $3,429.0 million for the same period a year earlier. Adjusted EBITDA for the first nine months of 2017 was $209.0 million, compared to adjusted EBITDA of $158.8 million for the first nine months of 2016.
"CVR Refining had a solid third quarter led by strong crack spreads and improved market conditions," said Jack Lipinski, CVR Energy's chief executive officer. "CVR Refining announced a 2017 third quarter cash distribution of 94 cents due to the exceptional performance of its Coffeyville, Kansas, refinery. CVR Refining's Wynnewood, Oklahoma, refinery began planned fall maintenance at the end of September and is on schedule to complete its turnaround in early November. The large scale and cost of the Wynnewood turnaround will negatively impact its results for the year.
"CVR Partners successfully completed the scheduled turnaround at its East Dubuque, Illinois, fertilizer facility on time and within budget during the 2017 third quarter," Lipinski said. "However, CVR Partners' results were negatively impacted by continued low U.S. nitrogen fertilizer pricing and unplanned downtime at both the East Dubuque and Coffeyville fertilizer facilities related to maintenance issues. As a result, CVR Partners announced that it will not pay a cash distribution for the quarter."
Petroleum Business
The petroleum business, which is operated by CVR Refining and includes the Coffeyville and Wynnewood refineries, reported third quarter 2017 operating income of $98.7 million on net sales of $1,385.8 million, compared to operating income of $28.4 million on net sales of $1,163.5 million in the third quarter of 2016.
Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $13.72 in the 2017 third quarter, compared to $10.09 during the same period in 2016. Direct operating expenses (exclusive of depreciation and amortization), including major scheduled turnaround expenses, per crude oil throughput barrel, for the 2017 third quarter were $6.47, compared to $5.33 in the third quarter of 2016.
Third quarter 2017 throughputs of crude oil and all other feedstocks and blendstocks totaled 213,606 barrels per day (bpd), compared to third quarter 2016 throughputs of crude oil and all other feedstocks and blendstocks of 206,733 bpd.
Nitrogen Fertilizers Business
The fertilizer business, which is operated by CVR Partners and includes the Coffeyville and East Dubuque fertilizer facilities, reported a third quarter 2017 operating loss of $15.9 million on net sales of $69.4 million, compared to operating income of $2.4 million on net sales of $78.5 million for the third quarter of 2016.
For the third quarter of 2017, consolidated average realized gate prices for UAN and ammonia were $138 per ton and $214 per ton, respectively. Consolidated average realized gate prices for UAN and ammonia were $154 per ton and $345 per ton, respectively, for the same period in 2016.
CVR Partners' fertilizer facilities produced a combined 180,700 tons of ammonia during the third quarter of 2017, of which 46,200 net tons were available for sale while the rest was upgraded to other fertilizer products, including 306,600 tons of UAN. In the 2016 third quarter, the fertilizer facilities produced 200,800 tons of ammonia, of which 60,300 net tons were available for sale while the remainder was upgraded to other fertilizer products, including 317,200 tons of UAN.
Cash, Debt and Dividend
Consolidated cash and cash equivalents was $849.1 million at Sept. 30, 2017. Consolidated total debt was $1,166.1 million at Sept. 30, 2017. The company had no debt exclusive of CVR Refining's and CVR Partners' debt.
CVR Energy also announced a third quarter 2017 cash dividend of 50 cents per share. The dividend, as declared by CVR Energy's Board of Directors, will be paid on Nov. 17, 2017, to stockholders of record on Nov. 10, 2017. CVR Energy's third quarter cash dividend brings the cumulative cash dividends paid or declared for the first nine months of 2017 to $1.50 per share.
Today, CVR Refining announced a 2017 third quarter cash distribution of 94 cents per common unit. CVR Partners announced that it will not pay a cash distribution for the 2017 third quarter.
Third Quarter 2017 Earnings Conference Call
CVR Energy previously announced that it will host its third quarter 2017 Earnings Conference Call for analysts and investors on Wednesday, Nov. 1, at 3 p.m. Eastern. The Earnings Conference Call may also include discussion of company developments, forward-looking information and other material information about business and financial matters.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/23020. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/23020. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13672109.
Forward-Looking Statements
This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "explore," "evaluate," "intend," "may," "might," "plan," "potential," "predict," "seek," "should," or "will," or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. For a discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings. These risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. CVR Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Brandee Stephens
CVR Energy, Inc.
(281) 207-3516
MediaRelations@CVREnergy.com
CVR Energy, Inc.
Financial and Operational Data (all information in this release is unaudited other than the balance sheet data as of December 31, 2016).
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Consolidated Statement of Operations Data: |
|||||||||||||||
Net sales |
$ |
1,453.8 |
$ |
1,240.3 |
$ |
4,395.3 |
$ |
3,429.0 |
|||||||
Operating costs and expenses: |
|||||||||||||||
Cost of materials and other |
1,132.4 |
1,005.7 |
3,582.2 |
2,719.3 |
|||||||||||
Direct operating expenses(1) |
161.1 |
129.5 |
423.4 |
409.2 |
|||||||||||
Depreciation and amortization |
51.3 |
48.1 |
151.7 |
134.5 |
|||||||||||
Cost of sales |
1,344.8 |
1,183.3 |
4,157.3 |
3,263.0 |
|||||||||||
Selling, general and administrative expenses(1) |
27.3 |
27.8 |
82.7 |
81.7 |
|||||||||||
Depreciation and amortization |
2.8 |
2.0 |
7.5 |
6.3 |
|||||||||||
Operating income |
78.9 |
27.2 |
147.8 |
78.0 |
|||||||||||
Interest expense and other financing costs |
(27.6) |
(26.2) |
(82.3) |
(56.8) |
|||||||||||
Interest income |
0.2 |
0.2 |
0.8 |
0.5 |
|||||||||||
Loss on derivatives, net |
(17.0) |
(1.7) |
(4.8) |
(4.8) |
|||||||||||
Loss on extinguishment of debt |
— |
— |
— |
(5.1) |
|||||||||||
Other income, net |
— |
5.0 |
0.1 |
5.5 |
|||||||||||
Income before income tax expense |
34.5 |
4.5 |
61.6 |
17.3 |
|||||||||||
Income tax expense |
9.2 |
2.5 |
17.4 |
2.3 |
|||||||||||
Net income |
25.3 |
2.0 |
44.2 |
15.0 |
|||||||||||
Less: Net income (loss) attributable to noncontrolling interest |
3.1 |
(3.4) |
10.3 |
(2.6) |
|||||||||||
Net income attributable to CVR Energy stockholders |
$ |
22.2 |
$ |
5.4 |
$ |
33.9 |
$ |
17.6 |
|||||||
Basic and diluted earnings per share |
$ |
0.26 |
$ |
0.06 |
$ |
0.39 |
$ |
0.20 |
|||||||
Dividends declared per share |
$ |
0.50 |
$ |
0.50 |
$ |
1.50 |
$ |
1.50 |
|||||||
Adjusted EBITDA* |
$ |
90.9 |
$ |
58.2 |
$ |
209.0 |
$ |
158.8 |
|||||||
Adjusted net income* |
$ |
32.0 |
$ |
11.5 |
$ |
51.8 |
$ |
37.0 |
|||||||
Adjusted net income per diluted share* |
$ |
0.37 |
$ |
0.13 |
$ |
0.60 |
$ |
0.43 |
|||||||
Weighted-average common shares outstanding - basic and diluted |
86.8 |
86.8 |
86.8 |
86.8 |
______________________________ | |
* See "Use of Non-GAAP Financial Measures" below. | |
(1) |
Direct operating expenses and selling, general and administrative expenses for the three and nine months ended September 30, 2017 and 2016 are shown exclusive of depreciation and amortization, which amounts are presented separately below direct operating expenses and selling, general and administrative expenses. |
As of September 30, 2017 |
As of December 31, | ||||||
(audited) | |||||||
(in millions) | |||||||
Balance Sheet Data: |
|||||||
Cash and cash equivalents |
$ |
849.1 |
$ |
735.8 |
|||
Working capital |
765.0 |
749.6 |
|||||
Total assets |
4,032.8 |
4,050.2 |
|||||
Total debt, including current portion |
1,166.1 |
1,164.6 |
|||||
Total CVR stockholders' equity |
761.8 |
858.1 |
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Cash Flow Data: |
|||||||||||||||
Net cash flow provided by (used in): |
|||||||||||||||
Operating activities |
$ |
84.7 |
$ |
149.0 |
$ |
326.8 |
$ |
218.9 |
|||||||
Investing activities |
(21.6) |
(16.9) |
(80.4) |
(172.0) |
|||||||||||
Financing activities |
(43.9) |
(60.1) |
(133.1) |
(49.4) |
|||||||||||
Net cash flow |
$ |
19.2 |
$ |
72.0 |
$ |
113.3 |
$ |
(2.5) |
Segment Information
Our operations are organized into two reportable segments, Petroleum and Nitrogen Fertilizer. Our operations that are not included in the Petroleum and Nitrogen Fertilizer segments are included in the Corporate and Other segment (along with elimination of intersegment transactions). The Petroleum segment is operated by CVR Refining, LP ("CVR Refining"), in which we own a majority interest as well as serve as the general partner. The Petroleum segment includes the operations of the Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with the crude oil gathering and pipeline systems. Detailed operating results for the Petroleum segment for the three and nine months ended September 30, 2017 are included in CVR Refining's press release dated November 1, 2017. The Nitrogen Fertilizer segment is operated by CVR Partners, LP ("CVR Partners"), in which we own approximately 34% of the common units as of September 30, 2017 and serve as the general partner. On April 1, 2016, CVR Partners completed the merger (the "East Dubuque Merger") whereby CVR Partners acquired a nitrogen fertilizer manufacturing facility located in East Dubuque, Illinois (the "East Dubuque Facility"). The Nitrogen Fertilizer segment consists of a nitrogen fertilizer manufacturing facility located in Coffeyville, Kansas, and the East Dubuque Facility beginning on April 1, 2016, the date of the closing of the acquisition. Detailed operating results for the Nitrogen Fertilizer segment for the three and nine months ended September 30, 2017 are included in CVR Partners' press release dated November 1, 2017.
Petroleum |
Nitrogen (CVR Partners) |
Corporate |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended September 30, 2017 |
|||||||||||||||
Net sales |
$ |
1,385.8 |
$ |
69.4 |
$ |
(1.4) |
$ |
1,453.8 |
|||||||
Cost of materials and other |
1,114.4 |
19.4 |
(1.4) |
1,132.4 |
|||||||||||
Direct operating expenses (1) |
99.2 |
37.8 |
(0.1) |
136.9 |
|||||||||||
Major scheduled turnaround expenses |
21.7 |
2.5 |
— |
24.2 |
|||||||||||
Selling, general and administrative |
18.8 |
6.1 |
2.4 |
27.3 |
|||||||||||
Depreciation and amortization |
33.0 |
19.5 |
1.6 |
54.1 |
|||||||||||
Operating income (loss) |
$ |
98.7 |
$ |
(15.9) |
$ |
(3.9) |
$ |
78.9 |
|||||||
Capital expenditures |
$ |
18.7 |
$ |
2.8 |
$ |
1.0 |
$ |
22.5 |
Petroleum |
Nitrogen |
Corporate |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Nine Months Ended September 30, 2017 |
|||||||||||||||
Net sales |
$ |
4,147.5 |
$ |
252.6 |
$ |
(4.8) |
$ |
4,395.3 |
|||||||
Cost of materials and other |
3,523.7 |
63.3 |
(4.8) |
3,582.2 |
|||||||||||
Direct operating expenses (1) |
271.9 |
111.4 |
0.1 |
383.4 |
|||||||||||
Major scheduled turnaround expenses |
37.4 |
2.6 |
— |
40.0 |
|||||||||||
Selling, general and administrative |
57.7 |
18.8 |
6.2 |
82.7 |
|||||||||||
Depreciation and amortization |
99.5 |
54.9 |
4.8 |
159.2 |
|||||||||||
Operating income (loss) |
$ |
157.3 |
$ |
1.6 |
$ |
(11.1) |
$ |
147.8 |
|||||||
Capital expenditures |
$ |
66.1 |
$ |
11.4 |
$ |
2.4 |
$ |
79.9 |
Petroleum |
Nitrogen |
Corporate |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended September 30, 2016 |
|||||||||||||||
Net sales |
$ |
1,163.5 |
$ |
78.5 |
$ |
(1.7) |
$ |
1,240.3 |
|||||||
Cost of materials and other |
987.5 |
19.9 |
(1.7) |
1,005.7 |
|||||||||||
Direct operating expenses (1) |
97.0 |
32.5 |
— |
129.5 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
— |
— |
|||||||||||
Selling, general and administrative |
18.1 |
7.3 |
2.4 |
27.8 |
|||||||||||
Depreciation and amortization |
32.5 |
16.4 |
1.2 |
50.1 |
|||||||||||
Operating income (loss) |
$ |
28.4 |
$ |
2.4 |
$ |
(3.6) |
$ |
27.2 |
|||||||
Capital expenditures |
$ |
15.4 |
$ |
6.4 |
$ |
1.0 |
$ |
22.8 |
Petroleum |
Nitrogen Fertilizer |
Corporate |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Nine Months Ended September 30, 2016 |
|||||||||||||||
Net sales |
$ |
3,161.9 |
$ |
271.4 |
$ |
(4.3) |
$ |
3,429.0 |
|||||||
Cost of materials and other |
2,651.7 |
72.2 |
(4.6) |
2,719.3 |
|||||||||||
Direct operating expenses (1) |
267.2 |
103.8 |
0.1 |
371.1 |
|||||||||||
Major scheduled turnaround expenses |
31.5 |
6.6 |
— |
38.1 |
|||||||||||
Selling, general and administrative |
53.4 |
22.0 |
6.3 |
81.7 |
|||||||||||
Depreciation and amortization |
95.6 |
41.0 |
4.2 |
140.8 |
|||||||||||
Operating income (loss) |
$ |
62.5 |
$ |
25.8 |
$ |
(10.3) |
$ |
78.0 |
|||||||
Capital expenditures |
$ |
83.4 |
$ |
18.3 |
$ |
3.9 |
$ |
105.6 |
(1) |
Excluding turnaround expenses. |
Petroleum |
Nitrogen |
Corporate |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
September 30, 2017 |
|||||||||||||||
Cash and cash equivalents |
$ |
560.4 |
$ |
70.0 |
$ |
218.7 |
$ |
849.1 |
|||||||
Total assets |
2,500.7 |
1,275.8 |
256.3 |
4,032.8 |
|||||||||||
Total debt, including current portion |
540.9 |
625.2 |
— |
1,166.1 |
|||||||||||
December 31, 2016 |
|||||||||||||||
Cash and cash equivalents |
$ |
314.1 |
$ |
55.6 |
$ |
366.1 |
$ |
735.8 |
|||||||
Total assets |
2,331.9 |
1,312.2 |
406.1 |
4,050.2 |
|||||||||||
Total debt, including current portion |
541.5 |
623.1 |
— |
1,164.6 |
Petroleum Segment Operating Data
The following tables set forth information about our consolidated Petroleum segment operated by CVR Refining, of which we own a majority interest and serve as the general partner, and the Coffeyville and Wynnewood refineries. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Petroleum segment for the three and nine months ended September 30, 2017 are included in CVR Refining's press release dated November 1, 2017.
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum Segment Summary Financial Results: |
|||||||||||||||
Net sales |
$ |
1,385.8 |
$ |
1,163.5 |
$ |
4,147.5 |
$ |
3,161.9 |
|||||||
Operating costs and expenses: |
|||||||||||||||
Cost of materials and other |
1,114.4 |
987.5 |
3,523.7 |
2,651.7 |
|||||||||||
Direct operating expenses(1) |
99.2 |
97.0 |
271.9 |
267.2 |
|||||||||||
Major scheduled turnaround expenses |
21.7 |
— |
37.4 |
31.5 |
|||||||||||
Depreciation and amortization |
31.8 |
31.9 |
96.8 |
93.7 |
|||||||||||
Cost of sales |
1,267.1 |
1,116.4 |
3,929.8 |
3,044.1 |
|||||||||||
Selling, general and administrative expenses(1) |
18.8 |
18.1 |
57.7 |
53.4 |
|||||||||||
Depreciation and amortization |
1.2 |
0.6 |
2.7 |
1.9 |
|||||||||||
Operating income |
98.7 |
28.4 |
157.3 |
62.5 |
|||||||||||
Interest expense and other financing costs |
(12.0) |
(10.8) |
(35.2) |
(31.7) |
|||||||||||
Interest income |
0.2 |
— |
0.4 |
— |
|||||||||||
Loss on derivatives, net |
(17.0) |
(1.7) |
(4.8) |
(4.8) |
|||||||||||
Other income, net |
0.1 |
— |
0.1 |
— |
|||||||||||
Income before income tax expense |
70.0 |
15.9 |
117.8 |
26.0 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Net income |
$ |
70.0 |
$ |
15.9 |
$ |
117.8 |
$ |
26.0 |
|||||||
Gross profit |
$ |
118.7 |
$ |
47.1 |
$ |
217.7 |
$ |
117.8 |
|||||||
Refining margin* |
$ |
271.4 |
$ |
176.0 |
$ |
623.8 |
$ |
510.2 |
|||||||
Refining margin adjusted for FIFO impact* |
$ |
256.5 |
$ |
183.7 |
$ |
624.6 |
$ |
480.5 |
|||||||
Adjusted Petroleum EBITDA* |
$ |
138.6 |
$ |
75.3 |
$ |
296.2 |
$ |
195.1 |
______________________________ | |
* See "Use of Non-GAAP Financial Measures" below. | |
(1) |
Direct operating expense and selling, general and administrative expenses for the three and nine months ended September 30, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses and selling, general and administrative expenses. |
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(dollars per barrel) | |||||||||||||||
Petroleum Segment Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Gross profit |
$ |
6.35 |
$ |
2.59 |
$ |
3.79 |
$ |
2.21 |
|||||||
Refining margin* |
14.52 |
9.66 |
10.86 |
9.55 |
|||||||||||
FIFO impact, (favorable) unfavorable |
(0.80) |
0.43 |
0.01 |
(0.56) |
|||||||||||
Refining margin adjusted for FIFO impact* |
13.72 |
10.09 |
10.87 |
8.99 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
6.47 |
5.33 |
5.38 |
5.59 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
5.31 |
5.33 |
4.73 |
5.00 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
6.26 |
5.04 |
5.08 |
5.24 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
5.13 |
$ |
5.04 |
$ |
4.47 |
$ |
4.68 |
|||||||
Barrels sold (barrels per day) |
210,002 |
209,228 |
222,889 |
208,192 |
______________________________ |
* See "Use of Non-GAAP Financial Measures" below. |
Three Months Ended |
Nine Months Ended | ||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||||||
Petroleum Segment Summary |
% |
% |
% |
% | |||||||||||||||||||||||
Refining Throughput and Production Data (bpd): |
|||||||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||||||
Sweet |
196,342 |
91.9 |
176,404 |
85.3 |
198,750 |
89.8 |
174,594 |
85.4 |
|||||||||||||||||||
Medium |
— |
— |
1,983 |
1.0 |
— |
— |
2,321 |
1.1 |
|||||||||||||||||||
Heavy sour |
6,751 |
3.2 |
19,568 |
9.5 |
11,643 |
5.3 |
17,978 |
8.9 |
|||||||||||||||||||
Total crude oil throughput |
203,093 |
95.1 |
197,955 |
95.8 |
210,393 |
95.1 |
194,893 |
95.4 |
|||||||||||||||||||
All other feedstocks and blendstocks |
10,513 |
4.9 |
8,778 |
4.2 |
10,943 |
4.9 |
9,476 |
4.6 |
|||||||||||||||||||
Total throughput |
213,606 |
100.0 |
206,733 |
100.0 |
221,336 |
100.0 |
204,369 |
100.0 |
|||||||||||||||||||
Production: |
|||||||||||||||||||||||||||
Gasoline |
105,712 |
49.5 |
106,120 |
51.2 |
112,268 |
50.6 |
106,774 |
52.2 |
|||||||||||||||||||
Distillate |
89,655 |
42.0 |
84,669 |
40.9 |
92,046 |
41.5 |
83,101 |
40.6 |
|||||||||||||||||||
Other (excluding internally produced fuel) |
18,107 |
8.5 |
16,390 |
7.9 |
17,385 |
7.9 |
14,738 |
7.2 |
|||||||||||||||||||
Total refining production (excluding internally produced fuel) |
213,474 |
100.0 |
207,179 |
100.0 |
221,699 |
100.0 |
204,613 |
100.0 |
|||||||||||||||||||
Product price (dollars per gallon): |
|||||||||||||||||||||||||||
Gasoline |
$ |
1.63 |
$ |
1.45 |
$ |
1.56 |
$ |
1.31 |
|||||||||||||||||||
Distillate |
1.67 |
1.45 |
1.58 |
1.30 |
|||||||||||||||||||||||
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Market Indicators (dollars per barrel): |
|||||||||||||||
West Texas Intermediate (WTI) NYMEX |
$ |
48.20 |
$ |
44.94 |
$ |
49.36 |
$ |
41.53 |
|||||||
Crude Oil Differentials: |
|||||||||||||||
WTI less WTS (light/medium sour) |
0.97 |
1.47 |
1.15 |
0.82 |
|||||||||||
WTI less WCS (heavy sour) |
10.48 |
14.23 |
11.42 |
13.59 |
|||||||||||
NYMEX Crack Spreads: |
|||||||||||||||
Gasoline |
20.42 |
13.73 |
17.74 |
16.24 |
|||||||||||
Heating Oil |
21.05 |
14.34 |
17.24 |
13.04 |
|||||||||||
NYMEX 2-1-1 Crack Spread |
20.73 |
14.03 |
17.49 |
14.64 |
|||||||||||
PADD II Group 3 Basis: |
|||||||||||||||
Gasoline |
(1.18) |
0.48 |
(2.37) |
(3.59) |
|||||||||||
Ultra Low Sulfur Diesel |
0.85 |
1.01 |
(0.44) |
(0.38) |
|||||||||||
PADD II Group 3 Product Crack Spread: |
|||||||||||||||
Gasoline |
19.23 |
14.21 |
15.37 |
12.65 |
|||||||||||
Ultra Low Sulfur Diesel |
21.90 |
15.35 |
16.80 |
12.65 |
|||||||||||
PADD II Group 3 2-1-1 |
20.57 |
14.78 |
16.09 |
12.65 |
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Coffeyville Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
939.3 |
$ |
788.1 |
$ |
2,750.5 |
$ |
2,094.1 |
|||||||
Cost of materials and other |
767.7 |
669.9 |
2,349.7 |
1,763.3 |
|||||||||||
Direct operating expenses(1) |
56.7 |
50.7 |
154.9 |
144.5 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
— |
31.5 |
|||||||||||
Depreciation and amortization |
17.4 |
17.7 |
53.8 |
51.2 |
|||||||||||
Gross profit |
97.5 |
49.8 |
192.1 |
103.6 |
|||||||||||
Add: |
|||||||||||||||
Direct operating expenses(1) |
56.7 |
50.7 |
154.9 |
144.5 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
— |
31.5 |
|||||||||||
Depreciation and amortization |
17.4 |
17.7 |
53.8 |
51.2 |
|||||||||||
Refining margin* |
171.6 |
118.2 |
400.8 |
330.8 |
|||||||||||
FIFO impact, (favorable) unfavorable |
(10.1) |
4.0 |
1.5 |
(22.4) |
|||||||||||
Refining margin adjusted for FIFO impact* |
$ |
161.5 |
$ |
122.2 |
$ |
402.3 |
$ |
308.4 |
|||||||
Coffeyville Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Gross profit |
$ |
8.26 |
$ |
4.15 |
$ |
5.37 |
$ |
3.12 |
|||||||
Refining margin* |
14.52 |
9.86 |
11.21 |
9.94 |
|||||||||||
FIFO impact, (favorable) unfavorable |
(0.86) |
0.33 |
0.04 |
(0.67) |
|||||||||||
Refining margin adjusted for FIFO impact* |
13.66 |
10.19 |
11.25 |
9.27 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
4.80 |
4.23 |
4.33 |
5.29 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
4.80 |
4.23 |
4.33 |
4.34 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
4.50 |
3.93 |
3.99 |
4.80 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
4.50 |
$ |
3.93 |
$ |
3.99 |
$ |
3.94 |
|||||||
Barrels sold (barrels per day) |
136,776 |
140,256 |
142,238 |
133,729 |
_____________________________ | |
* See "Use of Non-GAAP Financial Measures" below. | |
(1) |
Direct operating expenses for the three and nine months ended September 30, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses. |
Three Months Ended |
Nine Months Ended | ||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||
% |
% |
% |
% | ||||||||||||||||||||
Coffeyville Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
121,710 |
89.6 |
110,825 |
81.0 |
119,361 |
85.8 |
101,803 |
79.2 |
|||||||||||||||
Medium |
— |
— |
— |
— |
— |
— |
1,641 |
1.3 |
|||||||||||||||
Heavy sour |
6,751 |
5.0 |
19,568 |
14.3 |
11,643 |
8.4 |
17,978 |
13.9 |
|||||||||||||||
Total crude oil throughput |
128,461 |
94.6 |
130,393 |
95.3 |
131,004 |
94.2 |
121,422 |
94.4 |
|||||||||||||||
All other feedstocks and blendstocks |
7,415 |
5.4 |
6,399 |
4.7 |
8,124 |
5.8 |
7,193 |
5.6 |
|||||||||||||||
Total throughput |
135,876 |
100.0 |
136,792 |
100.0 |
139,128 |
100.0 |
128,615 |
100.0 |
|||||||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
67,598 |
49.1 |
70,013 |
50.3 |
70,697 |
50.1 |
67,298 |
51.5 |
|||||||||||||||
Distillate |
57,654 |
41.9 |
57,839 |
41.6 |
58,927 |
41.7 |
54,192 |
41.5 |
|||||||||||||||
Other (excluding internally produced fuel) |
12,355 |
9.0 |
11,286 |
8.1 |
11,619 |
8.2 |
9,191 |
7.0 |
|||||||||||||||
Total refining production (excluding internally produced fuel) |
137,607 |
100.0 |
139,138 |
100.0 |
141,243 |
100.0 |
130,681 |
100.0 |
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Wynnewood Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
445.3 |
$ |
374.3 |
$ |
1,393.7 |
$ |
1,064.4 |
|||||||
Cost of materials and other |
346.9 |
317.7 |
1,174.6 |
888.5 |
|||||||||||
Direct operating expenses(1) |
42.5 |
46.3 |
117.0 |
122.7 |
|||||||||||
Major scheduled turnaround expenses |
21.7 |
— |
37.4 |
— |
|||||||||||
Depreciation and amortization |
12.9 |
12.7 |
38.5 |
37.9 |
|||||||||||
Gross profit (loss) |
21.3 |
(2.4) |
26.2 |
15.3 |
|||||||||||
Add: |
|||||||||||||||
Direct operating expenses(1) |
42.5 |
46.3 |
117.0 |
122.7 |
|||||||||||
Major scheduled turnaround expenses |
21.7 |
— |
37.4 |
— |
|||||||||||
Depreciation and amortization |
12.9 |
12.7 |
38.5 |
37.9 |
|||||||||||
Refining margin* |
98.4 |
56.6 |
219.1 |
175.9 |
|||||||||||
FIFO impact, (favorable) unfavorable |
(4.8) |
3.8 |
(0.7) |
(7.3) |
|||||||||||
Refining margin adjusted for FIFO impact* |
$ |
93.6 |
$ |
60.4 |
$ |
218.4 |
$ |
168.6 |
|||||||
Wynnewood Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Gross profit (loss) |
$ |
3.10 |
$ |
(0.39) |
$ |
1.21 |
$ |
0.76 |
|||||||
Refining margin* |
14.33 |
9.10 |
10.11 |
8.74 |
|||||||||||
FIFO impact, (favorable) unfavorable |
(0.70) |
0.61 |
(0.03) |
(0.36) |
|||||||||||
Refining margin adjusted for FIFO impact* |
13.63 |
9.71 |
10.08 |
8.38 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
9.35 |
7.45 |
7.13 |
6.10 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
6.18 |
7.45 |
5.40 |
6.10 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
9.53 |
7.29 |
7.01 |
6.01 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
6.30 |
$ |
7.29 |
$ |
5.32 |
$ |
6.01 |
|||||||
Barrels sold (barrels per day) |
73,226 |
68,971 |
80,651 |
74,463 |
______________________________ | |
* See "Use of Non-GAAP Financial Measures" below. | |
(1) |
Direct operating expenses for the three and nine months ended September 30, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses. |
Three Months Ended |
Nine Months Ended | ||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||
% |
% |
% |
% | ||||||||||||||||||||
Wynnewood Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
74,632 |
96.0 |
65,579 |
93.8 |
79,389 |
96.6 |
72,791 |
96.1 |
|||||||||||||||
Medium |
— |
— |
1,983 |
2.8 |
— |
— |
680 |
0.9 |
|||||||||||||||
Heavy sour |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||
Total crude oil throughput |
74,632 |
96.0 |
67,562 |
96.6 |
79,389 |
96.6 |
73,471 |
97.0 |
|||||||||||||||
All other feedstocks and blendstocks |
3,098 |
4.0 |
2,379 |
3.4 |
2,819 |
3.4 |
2,283 |
3.0 |
|||||||||||||||
Total throughput |
77,730 |
100.0 |
69,941 |
100.0 |
82,208 |
100.0 |
75,754 |
100.0 |
|||||||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
38,114 |
50.2 |
36,107 |
53.1 |
41,571 |
51.6 |
39,476 |
53.4 |
|||||||||||||||
Distillate |
32,001 |
42.2 |
26,830 |
39.4 |
33,119 |
41.2 |
28,909 |
39.1 |
|||||||||||||||
Other (excluding internally produced fuel) |
5,752 |
7.6 |
5,104 |
7.5 |
5,766 |
7.2 |
5,547 |
7.5 |
|||||||||||||||
Total refining production (excluding internally produced fuel) |
75,867 |
100.0 |
68,041 |
100.0 |
80,456 |
100.0 |
73,932 |
100.0 |
Nitrogen Fertilizer Segment Operating Data
The following tables set forth information about the Nitrogen Fertilizer segment operated by CVR Partners, of which we own approximately 34% of the common units as of September 30, 2017 and serve as the general partner. The financial and operational data include the results of the East Dubuque Facility beginning on April 1, 2016, the date of the closing of the acquisition. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Nitrogen Fertilizer segment for the three and nine months ended September 30, 2017 are included in CVR Partners' press release dated November 1, 2017.
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer Segment Business Financial Results: |
|||||||||||||||
Net sales |
$ |
69.4 |
$ |
78.5 |
$ |
252.6 |
$ |
271.4 |
|||||||
Cost of materials and other |
19.4 |
19.9 |
63.3 |
72.2 |
|||||||||||
Direct operating expenses(1) |
37.8 |
32.5 |
111.4 |
103.8 |
|||||||||||
Major scheduled turnaround expenses |
2.5 |
— |
2.6 |
6.6 |
|||||||||||
Depreciation and amortization |
19.5 |
16.4 |
54.9 |
41.0 |
|||||||||||
Cost of sales |
79.2 |
68.8 |
232.2 |
223.6 |
|||||||||||
Selling, general and administrative expenses |
6.1 |
7.3 |
18.8 |
22.0 |
|||||||||||
Operating income (loss) |
(15.9) |
2.4 |
1.6 |
25.8 |
|||||||||||
Interest expense and other financing costs |
(15.7) |
(15.6) |
(47.1) |
(32.8) |
|||||||||||
Loss on extinguishment of debt |
— |
— |
— |
(5.1) |
|||||||||||
Other income, net |
— |
— |
0.1 |
— |
|||||||||||
Loss before income tax expense |
(31.6) |
(13.2) |
(45.4) |
(12.1) |
|||||||||||
Income tax expense |
— |
0.2 |
— |
0.3 |
|||||||||||
Net loss |
$ |
(31.6) |
$ |
(13.4) |
$ |
(45.4) |
$ |
(12.4) |
|||||||
Adjusted Nitrogen Fertilizer EBITDA* |
$ |
5.0 |
$ |
17.4 |
$ |
58.1 |
$ |
74.4 |
_______________________________ | |
* See "Use of Non-GAAP Financial Measures" below. | |
(1) |
Direct operating expenses for the three and nine months ended September 30, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses. |
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Nitrogen Fertilizer Segment Key Operating Statistics: |
|||||||||||||||
Consolidated sales (thousand tons): |
|||||||||||||||
Ammonia |
65.3 |
47.7 |
201.8 |
145.7 |
|||||||||||
UAN |
299.1 |
296.0 |
951.6 |
902.4 |
|||||||||||
Consolidated product pricing at gate (dollars per ton) (1): |
|||||||||||||||
Ammonia |
$ |
214 |
$ |
345 |
$ |
287 |
$ |
385 |
|||||||
UAN |
$ |
138 |
$ |
154 |
$ |
158 |
$ |
187 |
|||||||
Consolidated production volume (thousand tons): |
|||||||||||||||
Ammonia (gross produced) (2) |
180.7 |
200.8 |
615.2 |
485.9 |
|||||||||||
Ammonia (net available for sale) (2) |
46.2 |
60.3 |
203.7 |
121.0 |
|||||||||||
UAN |
306.6 |
317.2 |
962.3 |
861.9 |
|||||||||||
Feedstock: |
|||||||||||||||
Petroleum coke used in production (thousand tons) |
114.3 |
126.8 |
371.0 |
384.4 |
|||||||||||
Petroleum coke used in production (dollars per ton) |
$ |
18 |
$ |
13 |
$ |
18 |
$ |
14 |
|||||||
Natural gas used in production (thousands of MMBtus) |
1,555.4 |
2,075.5 |
5,780.7 |
3,471.6 |
|||||||||||
Natural gas used in production (dollars per MMBtu)(3) |
$ |
3.12 |
$ |
2.97 |
$ |
3.25 |
$ |
2.75 |
|||||||
Natural gas in cost of materials and other (thousands of MMBtus) |
1,934.9 |
1,679.5 |
5,898.3 |
2,742.5 |
|||||||||||
Natural gas in cost of materials and other (dollars per MMBtu)(3) |
$ |
3.15 |
$ |
2.92 |
$ |
3.30 |
$ |
2.68 |
|||||||
Coffeyville Facility on-stream factor (4): |
|||||||||||||||
Gasification |
96.3 |
% |
95.9 |
% |
98.0 |
% |
97.2 |
% | |||||||
Ammonia |
93.5 |
% |
94.7 |
% |
96.7 |
% |
96.2 |
% | |||||||
UAN |
93.9 |
% |
94.1 |
% |
92.6 |
% |
93.1 |
% | |||||||
East Dubuque Facility on-stream factors (4): |
|||||||||||||||
Ammonia |
76.3 |
% |
94.4 |
% |
91.9 |
% |
81.7 |
% | |||||||
UAN |
77.1 |
% |
92.9 |
% |
91.5 |
% |
81.1 |
% | |||||||
Market Indicators: |
|||||||||||||||
Ammonia — Southern Plains (dollars per ton) |
$ |
238 |
$ |
315 |
$ |
314 |
$ |
368 |
|||||||
Ammonia — Corn belt (dollars per ton) |
$ |
303 |
$ |
372 |
$ |
364 |
$ |
432 |
|||||||
UAN — Corn belt (dollars per ton) |
$ |
165 |
$ |
188 |
$ |
192 |
$ |
218 |
|||||||
Natural gas NYMEX (dollars per MMBtu) |
$ |
2.95 |
$ |
2.79 |
$ |
3.05 |
$ |
2.35 |
________________________________ | |
(1) |
Product pricing at gate represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry. |
(2) |
Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represent the ammonia available for sale that was not upgraded into other fertilizer products. |
(3) |
The cost per MMBtu excludes derivative activity, when applicable. The impact of natural gas derivative activity during the periods presented was not material. |
(4) |
On-stream factor is the total number of hours operated divided by the total number of hours in the reporting period and is included as a measure of operating efficiency. |
Coffeyville Facility | |
East Dubuque Facility | |
Excluding the impact of approximately 28 days of downtime associated with the 2016 full facility turnaround at the East Dubuque Facility, the on-stream factors at the East Dubuque Facility would have been 97.2% for ammonia and 96.2% for UAN for the six months ended September 30, 2016. |
Use of Non-GAAP Financial Measures
To supplement our actual results in accordance with GAAP for the applicable periods, we also use the non-GAAP financial measures noted above, which are reconciled to our GAAP-based results below. These non-GAAP financial measures should not be considered an alternative for GAAP results. The adjustments are provided to enhance an overall understanding of our financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.
Adjusted net income (loss) is not a recognized term under GAAP and should not be substituted for net income (loss) as a measure of our performance but rather should be utilized as a supplemental measure of financial performance in evaluating our business. Management believes that adjusted net income (loss) provides relevant and useful information that enables external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, to better understand and evaluate our ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance. Adjusted net income (loss) per diluted share represents adjusted net income (loss) divided by weighted-average diluted shares outstanding. Adjusted net income (loss) represents net income (loss), as adjusted, that is attributable to CVR Energy stockholders.
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Reconciliation of Income before income tax expense to Adjusted Net Income: |
|||||||||||||||
Income before income tax expense |
$ |
34.5 |
$ |
4.5 |
$ |
61.6 |
$ |
17.3 |
|||||||
Adjustments: |
|||||||||||||||
FIFO impact, (favorable) unfavorable |
(14.9) |
7.7 |
0.8 |
(29.7) |
|||||||||||
Major scheduled turnaround expenses |
24.2 |
— |
40.0 |
38.1 |
|||||||||||
Loss on derivatives, net |
17.0 |
1.7 |
4.8 |
4.8 |
|||||||||||
Current period settlement on derivative contracts (1) |
— |
6.7 |
1.1 |
35.2 |
|||||||||||
Loss on extinguishment of debt |
— |
— |
— |
5.1 |
|||||||||||
Expenses associated with the East Dubuque Merger (2) |
— |
0.7 |
— |
3.1 |
|||||||||||
Insurance recovery - business interruption (3) |
(1.1) |
(2.1) |
(1.1) |
(2.1) |
|||||||||||
Adjusted net income before income tax expense and noncontrolling interest |
59.7 |
19.2 |
107.2 |
71.8 |
|||||||||||
Adjusted net income attributed to noncontrolling interest |
(12.1) |
(1.1) |
(26.3) |
(19.7) |
|||||||||||
Income tax expense, as adjusted |
(15.6) |
(6.6) |
(29.1) |
(15.1) |
|||||||||||
Adjusted net income |
$ |
32.0 |
$ |
11.5 |
$ |
51.8 |
$ |
37.0 |
|||||||
Adjusted net income per diluted share |
$ |
0.37 |
$ |
0.13 |
$ |
0.60 |
$ |
0.43 |
Refining margin per crude oil throughput barrel is a measurement calculated as the difference between the Petroleum segment's net sales and cost of materials and other. Refining margin is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of materials and other at which they are able to sell refined products. Each of the components used in this calculation (net sales and cost of materials and other) can be taken directly from our Petroleum segment's Statements of Operations. Our calculation of refining margin may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. In order to derive the refining margin per crude oil throughput barrel, we utilize the total dollar figures for refining margin as derived above and divide by the applicable number of crude oil throughput barrels for the period. We believe that refining margin is important to enable investors to better understand and evaluate the Petroleum segment's ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance.
Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference between the Petroleum segment's net sales and cost of materials and other adjusted for FIFO impact. Refining margin adjusted for FIFO impact is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of materials and other (taking into account the impact of the utilization of FIFO) at which they are able to sell refined products. Our calculation of refining margin adjusted for FIFO impact may differ from calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. Under the FIFO accounting method, changes in crude oil prices can cause fluctuations in the inventory valuation of crude oil, work in process and finished goods, thereby resulting in a favorable FIFO impact when crude oil prices increase and an unfavorable FIFO impact when crude oil prices decrease.
The calculation of refining margin and refining margin adjusted for FIFO impact (each a non-GAAP financial measure), including a reconciliation to the most directly comparable GAAP financial measure for the three and nine months ended September 30, 2017 and 2016 is as follows:
Petroleum Segment Operating Data |
|||||||||||||||
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Net sales |
$ |
1,385.8 |
$ |
1,163.5 |
$ |
4,147.5 |
$ |
3,161.9 |
|||||||
Operating costs and expenses: |
|||||||||||||||
Cost of materials and other |
1,114.4 |
987.5 |
3,523.7 |
2,651.7 |
|||||||||||
Direct operating expenses (exclusive of depreciation and amortization and major scheduled turnaround expenses as reflected below) |
99.2 |
97.0 |
271.9 |
267.2 |
|||||||||||
Major scheduled turnaround expenses |
21.7 |
— |
37.4 |
31.5 |
|||||||||||
Depreciation and amortization |
31.8 |
31.9 |
96.8 |
93.7 |
|||||||||||
Gross profit |
118.7 |
47.1 |
217.7 |
117.8 |
|||||||||||
Add: |
|||||||||||||||
Direct operating expenses (exclusive of depreciation and amortization and major scheduled turnaround expenses as reflected below) |
99.2 |
97.0 |
271.9 |
267.2 |
|||||||||||
Major scheduled turnaround expenses |
21.7 |
— |
37.4 |
31.5 |
|||||||||||
Depreciation and amortization |
31.8 |
31.9 |
96.8 |
93.7 |
|||||||||||
Refining margin |
271.4 |
176.0 |
623.8 |
510.2 |
|||||||||||
FIFO impact, (favorable) unfavorable |
(14.9) |
7.7 |
0.8 |
(29.7) |
|||||||||||
Refining margin adjusted for FIFO impact |
$ |
256.5 |
$ |
183.7 |
$ |
624.6 |
$ |
480.5 |
The calculation of refining margin per crude oil throughput barrel and refining margin adjusted for FIFO impact per crude oil throughput barrel for the three and nine months ended September 30, 2017 and 2016 is as follows:
Petroleum Segment Operating Data |
|||||||||||
Three Months Ended |
Nine Months Ended | ||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||
Total crude oil throughput barrels per day |
203,093 |
197,955 |
210,393 |
194,893 |
|||||||
Days in the period |
92 |
92 |
273 |
274 |
|||||||
Total crude oil throughput barrels |
18,684,556 |
18,211,860 |
57,437,289 |
53,400,682 |
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin |
$ |
271.4 |
$ |
176.0 |
$ |
623.8 |
$ |
510.2 |
|||||||
Divided by: crude oil throughput barrels |
18.7 |
18.2 |
57.4 |
53.4 |
|||||||||||
Refining margin per crude oil throughput barrel |
$ |
14.52 |
$ |
9.66 |
$ |
10.86 |
$ |
9.55 |
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin adjusted for FIFO impact |
$ |
256.5 |
$ |
183.7 |
$ |
624.6 |
$ |
480.5 |
|||||||
Divided by: crude oil throughput barrels |
18.7 |
18.2 |
57.4 |
53.4 |
|||||||||||
Refining margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
13.72 |
$ |
10.09 |
$ |
10.87 |
$ |
8.99 |
Coffeyville Refinery |
|||||||||||
Three Months Ended |
Nine Months Ended | ||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||
Total crude oil throughput barrels per day |
128,461 |
130,393 |
131,004 |
121,422 |
|||||||
Days in the period |
92 |
92 |
273 |
274 |
|||||||
Total crude oil throughput barrels |
11,818,412 |
11,996,156 |
35,764,092 |
33,269,628 |
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin |
$ |
171.6 |
$ |
118.2 |
$ |
400.8 |
$ |
330.8 |
|||||||
Divided by: crude oil throughput barrels |
11.8 |
12.0 |
35.8 |
33.3 |
|||||||||||
Refining margin per crude oil throughput barrel |
$ |
14.52 |
$ |
9.86 |
$ |
11.21 |
$ |
9.94 |
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin adjusted for FIFO impact |
$ |
161.5 |
$ |
122.2 |
$ |
402.3 |
$ |
308.4 |
|||||||
Divided by: crude oil throughput barrels |
11.8 |
12.0 |
35.8 |
33.3 |
|||||||||||
Refining margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
13.66 |
$ |
10.19 |
$ |
11.25 |
$ |
9.27 |
Wynnewood Refinery |
|||||||||||
Three Months Ended |
Nine Months Ended | ||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||
Total crude oil throughput barrels per day |
74,632 |
67,562 |
79,389 |
73,471 |
|||||||
Days in the period |
92 |
92 |
273 |
274 |
|||||||
Total crude oil throughput barrels |
6,866,144 |
6,215,704 |
21,673,197 |
20,131,054 |
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin |
$ |
98.4 |
$ |
56.6 |
$ |
219.1 |
$ |
175.9 |
|||||||
Divided by: crude oil throughput barrels |
6.9 |
6.2 |
21.7 |
20.1 |
|||||||||||
Refining margin per crude oil throughput barrel |
$ |
14.33 |
$ |
9.10 |
$ |
10.11 |
$ |
8.74 |
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin adjusted for FIFO impact |
$ |
93.6 |
$ |
60.4 |
$ |
218.4 |
$ |
168.6 |
|||||||
Divided by: crude oil throughput barrels |
6.9 |
6.2 |
21.7 |
20.1 |
|||||||||||
Refining margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
13.63 |
$ |
9.71 |
$ |
10.08 |
$ |
8.38 |
EBITDA and Adjusted EBITDA. EBITDA represents net income (loss) attributable to CVR Energy stockholders before consolidated (i) interest expense and other financing costs, net of interest income, (ii) income tax expense (benefit), and (iii) depreciation and amortization, less the portion of these adjustments attributable to non-controlling interest. Adjusted EBITDA represents EBITDA adjusted for, as applicable, consolidated (i) FIFO impact (favorable) unfavorable; (ii) loss on extinguishment of debt; (iii) major scheduled turnaround expenses (that many of our competitors capitalize and thereby exclude from their measures of EBITDA and adjusted EBITDA); (iv) (gain) loss on derivatives, net; (v) current period settlements on derivative contracts; (vi) business interruption insurance recovery and (vii) expenses associated with the East Dubuque Merger, less the portion of these adjustments attributable to non-controlling interest. EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be substituted for net income (loss) or cash flow from operations. Management believes that EBITDA and Adjusted EBITDA enable investors to better understand and evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently. EBITDA and Adjusted EBITDA represent EBITDA and Adjusted EBITDA that is attributable to CVR Energy stockholders.
A reconciliation of net income attributable to CVR Energy stockholders to EBITDA and EBITDA to Adjusted EBITDA for the three and nine months ended September 30, 2017 and 2016 is as follows:
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Net income attributable to CVR Energy stockholders |
$ |
22.2 |
$ |
5.4 |
$ |
33.9 |
$ |
17.6 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
27.4 |
26.0 |
81.5 |
56.3 |
|||||||||||
Income tax expense |
9.2 |
2.5 |
17.4 |
2.3 |
|||||||||||
Depreciation and amortization |
54.1 |
50.1 |
159.2 |
140.8 |
|||||||||||
Adjustments attributable to noncontrolling interest |
(38.3) |
(35.9) |
(112.7) |
(90.3) |
|||||||||||
EBITDA |
74.6 |
48.1 |
179.3 |
126.7 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact, (favorable) unfavorable |
(14.9) |
7.7 |
0.8 |
(29.7) |
|||||||||||
Major scheduled turnaround expenses |
24.2 |
— |
40.0 |
38.1 |
|||||||||||
Loss on derivatives, net |
17.0 |
1.7 |
4.8 |
4.8 |
|||||||||||
Current period settlement on derivative contracts (1) |
— |
6.7 |
1.1 |
35.2 |
|||||||||||
Loss on extinguishment of debt |
— |
— |
— |
5.1 |
|||||||||||
Expenses associated with the East Dubuque Merger (2) |
— |
0.7 |
— |
3.1 |
|||||||||||
Insurance recovery - business interruption (3) |
(1.1) |
(2.1) |
(1.1) |
(2.1) |
|||||||||||
Adjustments attributable to noncontrolling interest |
(8.9) |
(4.6) |
(15.9) |
(22.4) |
|||||||||||
Adjusted EBITDA |
$ |
90.9 |
$ |
58.2 |
$ |
209.0 |
$ |
158.8 |
Petroleum and Nitrogen Fertilizer EBITDA and Adjusted EBITDA. EBITDA by operating segment represents net income (loss) before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA by operating segment represents EBITDA by operating segment adjusted for, as applicable (i) FIFO impact (favorable) unfavorable; (ii) loss on extinguishment of debt; (iii) major scheduled turnaround expenses (that many of our competitors capitalize and thereby exclude from their measures of EBITDA and adjusted EBITDA); (iv) (gain) loss on derivatives, net; (v) current period settlements on derivative contracts; (vi) expenses associated with the East Dubuque Merger and (vii) business interruption insurance recovery, less the portion of these adjustments attributable to noncontrolling interest. We present Adjusted EBITDA by operating segment because it is the starting point for CVR Refining's and CVR Partners' calculation of available cash for distribution. EBITDA and Adjusted EBITDA by operating segment are not recognized terms under GAAP and should not be substituted for net income (loss) as a measure of performance. Management believes that EBITDA and Adjusted EBITDA by operating segment enable investors to better understand CVR Refining's and CVR Partners' ability to make distributions to their common unitholders, help investors evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.
A reconciliation of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA for the Petroleum and Nitrogen Fertilizer segments for the three and nine months ended September 30, 2017 and 2016 is as follows:
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum: |
|||||||||||||||
Petroleum net income |
$ |
70.0 |
$ |
15.9 |
$ |
117.8 |
$ |
26.0 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
11.8 |
10.8 |
34.8 |
31.7 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Depreciation and amortization |
33.0 |
32.5 |
99.5 |
95.6 |
|||||||||||
Petroleum EBITDA |
114.8 |
59.2 |
252.1 |
153.3 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact, (favorable) unfavorable |
(14.9) |
7.7 |
0.8 |
(29.7) |
|||||||||||
Major scheduled turnaround expenses |
21.7 |
— |
37.4 |
31.5 |
|||||||||||
Loss on derivatives, net |
17.0 |
1.7 |
4.8 |
4.8 |
|||||||||||
Current period settlements on derivative contracts (1) |
— |
6.7 |
1.1 |
35.2 |
|||||||||||
Adjusted Petroleum EBITDA |
$ |
138.6 |
$ |
75.3 |
$ |
296.2 |
$ |
195.1 |
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer: |
|||||||||||||||
Nitrogen fertilizer net loss |
$ |
(31.6) |
$ |
(13.4) |
$ |
(45.4) |
$ |
(12.4) |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net |
15.7 |
15.6 |
47.1 |
32.8 |
|||||||||||
Income tax expense |
— |
0.2 |
— |
0.3 |
|||||||||||
Depreciation and amortization |
19.5 |
16.4 |
54.9 |
41.0 |
|||||||||||
Nitrogen Fertilizer EBITDA |
3.6 |
18.8 |
56.6 |
61.7 |
|||||||||||
Add: |
|||||||||||||||
Major scheduled turnaround expenses |
2.5 |
— |
2.6 |
6.6 |
|||||||||||
Loss on extinguishment of debt |
— |
— |
— |
5.1 |
|||||||||||
Expenses associated with the East Dubuque Merger (2) |
— |
0.7 |
— |
3.1 |
|||||||||||
Insurance recovery - business interruption (3) |
(1.1) |
(2.1) |
(1.1) |
(2.1) |
|||||||||||
Adjusted Nitrogen Fertilizer EBITDA |
$ |
5.0 |
$ |
17.4 |
$ |
58.1 |
$ |
74.4 |
_________________________________ | |
(1) |
Represents the portion of gain (loss) on derivatives, net related to contracts that matured during the respective periods and settled with counterparties. There are no premiums paid or received at inception of the derivative contracts and upon settlement, there is no cost recovery associated with these contracts. |
(2) |
On April 1, 2016, CVR Partners completed the East Dubuque Merger. CVR Partners incurred legal and other professional fees and other merger related expenses that are referred to herein as expenses associated with the East Dubuque Merger, which are included in selling, general and administrative expenses. |
(3) |
CVR Partners received business interruption insurance recoveries of $1.1 million and $2.1 million in the third quarter of 2017 and 2016, respectively. |
Derivatives Summary. The Petroleum segment enters into commodity swap contracts through crack spread swap agreements with financial counterparties to fix the spread risk between the refineries' crude oil purchases and the refined products the refineries produce for sale. Through these swaps, the Petroleum segment will sell a fixed differential for the value between the selected refined product benchmark and the benchmark crude oil price, thereby locking in a margin for a portion of the refineries' production. The physical volumes are not exchanged and these contracts are net settled with cash. From time to time, the Petroleum segment holds various NYMEX positions through a third-party clearing house.
The table below summarizes the Petroleum segment's open commodity swap positions as of September 30, 2017. The positions are primarily in the form of crack spread swap agreements with financial counterparties, wherein the Petroleum segment has locked in differentials at the fixed prices noted below. As of September 30, 2017, the open commodity swap positions for 2017 and 2018 were comprised of approximately 39.8% for 2-1-1 crack swaps, 30.1% for distillate crack swaps and 30.1% for gasoline crack swaps.
Commodity Swaps |
Barrels |
Fixed Price (1) | |||||
Fourth Quarter 2017 |
7,050,000 |
$ |
17.80 |
||||
First Quarter 2018 |
7,050,000 |
18.66 |
|||||
Second Quarter 2018 |
1,950,000 |
21.09 |
|||||
Third Quarter 2018 |
150,000 |
19.22 |
|||||
Total |
16,200,000 |
$ |
18.59 |
||||
______________________________ | |
(1) |
Weighted-average price of all positions for period indicated. |
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SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, Nov. 1, 2017 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced that Jack Lipinski, chief executive officer and president, will retire on Dec. 31, 2017. Lipinski, who also serves as the chief executive officer and president of CVR Refining, LP and the executive chairman of CVR Partners, LP, will be succeeded by David Lamp. At first, and to facilitate a transition, Mr. Lamp will assume the role of co-CEO effective Dec. 1, 2017. Effective Jan. 1, 2018, Mr. Lamp will assume the role of CEO.
Carl Icahn, Chairman of the Board, said, "On behalf of the Board of Directors and stockholders, I would like to thank Jack for his leadership and focus. Over the years, Jack has done an excellent job of building CVR into a world-class company. Going forward, I welcome Dave. CVR is well-positioned to succeed in the years to come. I have been impressed with Dave's skillset and past successes, and I look forward to seeing him take the reins at CVR."
Most recently, Mr. Lamp was President and COO of Western Refining Company. Prior to Western Refining, Mr. Lamp was President and CEO of Northern Tier Energy Corporation, which merged with Western Refining. He previously served as COO and Executive Vice President of HollyFrontier Corporation. In 2011, Holly and Frontier completed a merger of equals and changed the name to HollyFrontier Corporation. Mr. Lamp joined Holly in 2004 and held various roles, including Vice President, Refinery Operations, Executive Vice President, Refining and Marketing, and President. Mr. Lamp has more than 37 years of technical, commercial and operational experience in the refining and chemical industry.
Mr. Lipinski has served as CVR's chief executive officer since 2005 and has grown the business from 475 employees 12 years ago to just under 1,500 employees today. Under his leadership, Mr. Lipinski has guided the overall strategic direction of CVR Energy and its subsidiaries and is responsible for increasing the scale and diversity of its refining operations and expanding its crude oil gathering and logistics operations. He also helped position CVR Partners as a nitrogen fertilizer industry leader and launched the initial public offerings for CVR Energy, CVR Refining and CVR Partners.
Mr. Lipinski said, "I would like to sincerely thank all the employees who have made CVR Energy into the exceptional company it is today. It is through their hard work and dedication that we became successful. I am lucky to have stood among them. Looking forward, I am ready to finally take time for some much-needed rest and relaxation after 45 years in the industry. I am pleased to announce Dave Lamp as my successor. Dave's experience and wealth of knowledge make him uniquely prepared to lead the company going forward."
Mr. Lamp commented, "I would like to thank Mr. Icahn and the Board of Directors for this opportunity. I would also like to thank Jack for building such a successful company. I look forward to meeting all CVR's employees and look forward to building upon past success with future success and enhancing shareholder value."
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Brandee Stephens
CVR Energy, Inc.
(281) 207-3516
MediaRelations@CVREnergy.com
View original content with multimedia:http://www.prnewswire.com/news-releases/cvr-energy-announces-the-retirement-of-jack-lipinski-names-david-lamp-as-successor-300547065.html
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, Oct. 18, 2017 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced that it will release its 2017 third quarter results on Wednesday, Nov. 1, before the open of New York Stock Exchange trading. Chief Executive Officer Jack Lipinski and other executives will host a teleconference call for analysts and investors on Nov. 1 at 3 p.m. Eastern.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/23020. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/23020. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13672109.
CVR Energy's 2017 third quarter earnings news release will be distributed via PR Newswire and posted at www.CVREnergy.com.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Brandee Stephens
CVR Energy, Inc.
(281) 207-3516
MediaRelations@CVREnergy.com
View original content with multimedia:http://www.prnewswire.com/news-releases/cvr-energy-announces-2017-third-quarter-earnings-call-300538295.html
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, July 27, 2017 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced a net loss of $10.5 million, or 12 cents per diluted share, on net sales of $1,434.4 million for the second quarter of 2017, compared to net income of $28.4 million, or 33 cents per diluted share, on net sales of $1,283.2 million for the 2016 second quarter. Second quarter 2017 adjusted EBITDA, a non-GAAP financial measure, was $37.7 million, compared to second quarter 2016 adjusted EBITDA of $64.4 million.
For the first six months of 2017, net income was $11.7 million, or 13 cents per diluted share, on net sales of $2,941.5 million, compared to net income of $12.2 million, or 14 cents per diluted share, on net sales of $2,188.7 million for the same period a year earlier. Adjusted EBITDA for the first six months of 2017 was $118.1 million, compared to adjusted EBITDA of $100.6 million for the first six months of 2016.
"CVR Refining reported strong operational results for the 2017 second quarter," said Jack Lipinski, chief executive officer. "The Coffeyville refinery achieved a quarterly crude throughput record and the Wynnewood refinery also continued to run well.
"CVR Partners' fertilizer facilities had solid operational performance during the quarter," Lipinski said. "The East Dubuque facility posted an on-stream rate of 100 percent for its ammonia plant, which is a quarterly record. In addition, the Coffeyville facility's gasification and ammonia plants operated at on-stream rates nearing 100 percent."
Petroleum Business
The petroleum business, which is operated by CVR Refining and includes the Coffeyville and Wynnewood refineries, reported a second quarter 2017 operating loss of $7.4 million on net sales of $1,338.2 million, compared to operating income of $90.1 million on net sales of $1,164.4 million in the second quarter of 2016.
Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $7.48 in the 2017 second quarter, compared to $9.56 during the same period in 2016. Direct operating expenses (exclusive of depreciation and amortization), including major scheduled turnaround expenses, per crude oil throughput barrel, for the 2017 second quarter were $4.44, compared to $4.56 in the second quarter of 2016.
Second quarter 2017 throughputs of crude oil and all other feedstocks and blendstocks totaled 221,954 barrels per day (bpd), compared to second quarter 2016 throughputs of crude oil and all other feedstocks and blendstocks of 210,488 bpd.
Nitrogen Fertilizers Business
The fertilizer business, which is operated by CVR Partners and includes the Coffeyville and East Dubuque fertilizer facilities, reported second quarter 2017 operating income of $12.2 million on net sales of $97.9 million, compared to operating income of $3.7 million on net sales of $119.8 million for the second quarter of 2016.
For the second quarter of 2017, consolidated average realized gate prices for UAN and ammonia were $174 per ton and $333 per ton, respectively. Consolidated average realized gate prices for UAN and ammonia were $199 per ton and $417 per ton, respectively, for the same period in 2016.
CVR Partners' fertilizer facilities produced a combined 215,300 tons of ammonia during the second quarter of 2017, of which 77,500 net tons were available for sale while the rest was upgraded to other fertilizer products, including 313,800 tons of UAN. In the 2016 second quarter, the fertilizer facilities produced 171,500 tons of ammonia, of which 45,600 net tons were available for sale while the remainder was upgraded to other fertilizer products, including 296,500 tons of UAN.
Cash, Debt and Dividend
Consolidated cash and cash equivalents was $829.9 million at June 30, 2017. Consolidated total debt was $1,165.6 million at June 30, 2017. The company had no debt exclusive of CVR Refining's and CVR Partners' debt.
CVR Energy also announced a second quarter 2017 cash dividend of 50 cents per share. The dividend, as declared by CVR Energy's Board of Directors, will be paid on Aug. 14, 2017, to stockholders of record on Aug. 7, 2017. CVR Energy's second quarter cash dividend brings the cumulative cash dividends paid or declared for the first six months of 2017 to $1.00 per share.
Today, CVR Refining and CVR Partners announced that the partnerships will not pay a cash distribution for the 2017 second quarter.
Second Quarter 2017 Earnings Conference Call
CVR Energy previously announced that it will host its second quarter 2017 Earnings Conference Call for analysts and investors on Thursday, July 27, at 3 p.m. Eastern. The Earnings Conference Call may also include discussion of company developments, forward-looking information and other material information about business and financial matters.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/21798. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/21798. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13666031.
Forward-Looking Statements
This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "explore," "evaluate," "intend," "may," "might," "plan," "potential," "predict," "seek," "should," or "will," or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. For a discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings. These risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. CVR Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Brandee Stephens
CVR Energy, Inc.
(281) 207-3516
MediaRelations@CVREnergy.com
CVR Energy, Inc.
Financial and Operational Data (all information in this release is unaudited other than the balance sheet data as of December 31, 2016).
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Consolidated Statement of Operations Data: |
|||||||||||||||
Net sales |
$ |
1,434.4 |
$ |
1,283.2 |
$ |
2,941.5 |
$ |
2,188.7 |
|||||||
Operating costs and expenses: |
|||||||||||||||
Cost of materials and other |
1,228.6 |
976.9 |
2,449.8 |
1,713.7 |
|||||||||||
Direct operating expenses(1) |
124.2 |
138.3 |
262.3 |
279.7 |
|||||||||||
Depreciation and amortization |
51.7 |
48.4 |
100.4 |
86.3 |
|||||||||||
Cost of sales |
1,404.5 |
1,163.6 |
2,812.5 |
2,079.7 |
|||||||||||
Selling, general and administrative expenses(1) |
26.3 |
26.6 |
55.4 |
53.8 |
|||||||||||
Depreciation and amortization |
2.3 |
2.3 |
4.7 |
4.4 |
|||||||||||
Operating income |
1.3 |
90.7 |
68.9 |
50.8 |
|||||||||||
Interest expense and other financing costs |
(27.6) |
(18.5) |
(54.6) |
(30.6) |
|||||||||||
Interest income |
0.3 |
0.1 |
0.5 |
0.3 |
|||||||||||
Gain (loss) on derivatives, net |
— |
(1.9) |
12.2 |
(3.1) |
|||||||||||
Loss on extinguishment of debt |
— |
(5.1) |
— |
(5.1) |
|||||||||||
Other income, net |
0.1 |
0.1 |
0.1 |
0.4 |
|||||||||||
Income (loss) before income tax expense (benefit) |
(25.9) |
65.4 |
27.1 |
12.7 |
|||||||||||
Income tax expense (benefit) |
(6.6) |
21.6 |
8.2 |
(0.2) |
|||||||||||
Net income (loss) |
(19.3) |
43.8 |
18.9 |
12.9 |
|||||||||||
Less: Net income (loss) attributable to noncontrolling interest |
(8.8) |
15.4 |
7.2 |
0.7 |
|||||||||||
Net income (loss) attributable to CVR Energy stockholders |
$ |
(10.5) |
$ |
28.4 |
$ |
11.7 |
$ |
12.2 |
|||||||
Basic and diluted earnings (loss) per share |
$ |
(0.12) |
$ |
0.33 |
$ |
0.13 |
$ |
0.14 |
|||||||
Dividends declared per share |
$ |
0.50 |
$ |
0.50 |
$ |
1.00 |
$ |
1.00 |
|||||||
Adjusted EBITDA* |
$ |
37.7 |
$ |
64.4 |
$ |
118.1 |
$ |
100.6 |
|||||||
Adjusted net income (loss)* |
$ |
(3.3) |
$ |
17.1 |
$ |
19.8 |
$ |
25.5 |
|||||||
Adjusted net income (loss) per diluted share* |
$ |
(0.04) |
$ |
0.20 |
$ |
0.23 |
$ |
0.29 |
|||||||
Weighted-average common shares outstanding - basic and diluted |
86.8 |
86.8 |
86.8 |
86.8 |
______________________________
* See "Use of Non-GAAP Financial Measures" below. |
(1) |
Direct operating expenses and selling, general and administrative expenses for the three and six months ended June 30, 2017 and 2016 are shown exclusive of depreciation and amortization, which amounts are presented separately below direct operating expenses and selling, general and administrative expenses. |
As of June 30, |
As of December | ||||||
(audited) | |||||||
(in millions) | |||||||
Balance Sheet Data: |
|||||||
Cash and cash equivalents |
$ |
829.9 |
$ |
735.8 |
|||
Working capital |
740.9 |
749.6 |
|||||
Total assets |
4,029.1 |
4,050.2 |
|||||
Total debt, including current portion |
1,165.6 |
1,164.6 |
|||||
Total CVR stockholders' equity |
783.0 |
858.1 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Cash Flow Data: |
|||||||||||||||
Net cash flow provided by (used in): |
|||||||||||||||
Operating activities |
$ |
104.9 |
$ |
48.3 |
$ |
242.1 |
$ |
69.9 |
|||||||
Investing activities |
(33.2) |
(103.4) |
(58.8) |
(155.1) |
|||||||||||
Financing activities |
(45.4) |
63.9 |
(89.2) |
10.7 |
|||||||||||
Net cash flow |
$ |
26.3 |
$ |
8.8 |
$ |
94.1 |
$ |
(74.5) |
Segment Information
Our operations are organized into two reportable segments, Petroleum and Nitrogen Fertilizer. Our operations that are not included in the Petroleum and Nitrogen Fertilizer segments are included in the Corporate and Other segment (along with elimination of intersegment transactions). The Petroleum segment is operated by CVR Refining, LP ("CVR Refining"), in which we own a majority interest as well as serve as the general partner. The Petroleum segment includes the operations of the Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with the crude oil gathering and pipeline systems. Detailed operating results for the Petroleum segment for the three and six months ended June 30, 2017 are included in CVR Refining's press release dated July 27, 2017. The Nitrogen Fertilizer segment is operated by CVR Partners, LP ("CVR Partners"), in which we own approximately 34% of the common units as of June 30, 2017 and serve as the general partner. On April 1, 2016, CVR Partners completed the merger (the "East Dubuque Merger") whereby CVR Partners acquired a nitrogen fertilizer manufacturing facility located in East Dubuque, Illinois (the "East Dubuque Facility"). The Nitrogen Fertilizer segment consists of a nitrogen fertilizer manufacturing facility located in Coffeyville, Kansas, and the East Dubuque Facility beginning on April 1, 2016, the date of the closing of the acquisition. Detailed operating results for the Nitrogen Fertilizer segment for the three and six months ended June 30, 2017 are included in CVR Partners' press release dated July 27, 2017.
Petroleum |
Nitrogen |
Corporate and |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended June 30, 2017 |
|||||||||||||||
Net sales |
$ |
1,338.2 |
$ |
97.9 |
$ |
(1.7) |
$ |
1,434.4 |
|||||||
Cost of materials and other |
1,208.0 |
22.1 |
(1.5) |
1,228.6 |
|||||||||||
Direct operating expenses (1) |
83.5 |
37.7 |
0.1 |
121.3 |
|||||||||||
Major scheduled turnaround expenses |
2.8 |
0.1 |
— |
2.9 |
|||||||||||
Selling, general and administrative |
18.9 |
5.8 |
1.6 |
26.3 |
|||||||||||
Depreciation and amortization |
32.4 |
20.0 |
1.6 |
54.0 |
|||||||||||
Operating income (loss) |
$ |
(7.4) |
$ |
12.2 |
$ |
(3.5) |
$ |
1.3 |
|||||||
Capital expenditures |
$ |
27.8 |
$ |
4.5 |
$ |
0.9 |
$ |
33.2 |
Petroleum |
Nitrogen |
Corporate and |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Six Months Ended June 30, 2017 |
|||||||||||||||
Net sales |
$ |
2,761.7 |
$ |
183.2 |
$ |
(3.4) |
$ |
2,941.5 |
|||||||
Cost of materials and other |
2,409.3 |
43.9 |
(3.4) |
2,449.8 |
|||||||||||
Direct operating expenses (1) |
172.7 |
73.6 |
0.2 |
246.5 |
|||||||||||
Major scheduled turnaround expenses |
15.7 |
0.1 |
— |
15.8 |
|||||||||||
Selling, general and administrative |
38.9 |
12.7 |
3.8 |
55.4 |
|||||||||||
Depreciation and amortization |
66.5 |
35.4 |
3.2 |
105.1 |
|||||||||||
Operating income (loss) |
$ |
58.6 |
$ |
17.5 |
$ |
(7.2) |
$ |
68.9 |
|||||||
Capital expenditures |
$ |
47.4 |
$ |
8.6 |
$ |
1.4 |
$ |
57.4 |
Petroleum |
Nitrogen |
Corporate and |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended June 30, 2016 |
|||||||||||||||
Net sales |
$ |
1,164.4 |
$ |
119.8 |
$ |
(1.0) |
$ |
1,283.2 |
|||||||
Cost of materials and other |
941.9 |
36.0 |
(1.0) |
976.9 |
|||||||||||
Direct operating expenses (1) |
81.9 |
47.6 |
0.1 |
129.6 |
|||||||||||
Major scheduled turnaround expenses |
2.1 |
6.6 |
— |
8.7 |
|||||||||||
Selling, general and administrative |
16.8 |
8.3 |
1.5 |
26.6 |
|||||||||||
Depreciation and amortization |
31.6 |
17.6 |
1.5 |
50.7 |
|||||||||||
Operating income (loss) |
$ |
90.1 |
$ |
3.7 |
$ |
(3.1) |
$ |
90.7 |
|||||||
Capital expenditures |
$ |
24.0 |
$ |
10.1 |
$ |
1.2 |
$ |
35.3 |
Petroleum |
Nitrogen |
Corporate and |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Six Months Ended June 30, 2016 |
|||||||||||||||
Net sales |
$ |
1,998.4 |
$ |
192.9 |
$ |
(2.6) |
$ |
2,188.7 |
|||||||
Cost of materials and other |
1,664.2 |
52.4 |
(2.9) |
1,713.7 |
|||||||||||
Direct operating expenses (1) |
170.2 |
71.3 |
0.1 |
241.6 |
|||||||||||
Major scheduled turnaround expenses |
31.5 |
6.6 |
— |
38.1 |
|||||||||||
Selling, general and administrative |
35.3 |
14.7 |
3.8 |
53.8 |
|||||||||||
Depreciation and amortization |
63.1 |
24.5 |
3.1 |
90.7 |
|||||||||||
Operating income (loss) |
$ |
34.1 |
$ |
23.4 |
$ |
(6.7) |
$ |
50.8 |
|||||||
Capital expenditures |
$ |
68.0 |
$ |
11.9 |
$ |
2.9 |
$ |
82.8 |
|||||||
______________________________
(1) |
Excluding turnaround expenses. |
Petroleum |
Nitrogen |
Corporate and |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
June 30, 2017 |
|||||||||||||||
Cash and cash equivalents |
$ |
515.7 |
$ |
51.7 |
$ |
262.5 |
$ |
829.9 |
|||||||
Total assets |
2,447.1 |
1,280.6 |
301.4 |
4,029.1 |
|||||||||||
Total debt, including current portion |
541.1 |
624.5 |
— |
1,165.6 |
|||||||||||
December 31, 2016 |
|||||||||||||||
Cash and cash equivalents |
$ |
314.1 |
$ |
55.6 |
$ |
366.1 |
$ |
735.8 |
|||||||
Total assets |
2,331.9 |
1,312.2 |
406.1 |
4,050.2 |
|||||||||||
Total debt, including current portion |
541.5 |
623.1 |
— |
1,164.6 |
Petroleum Segment Operating Data
The following tables set forth information about our consolidated Petroleum segment operated by CVR Refining, of which we own a majority interest and serve as the general partner, and the Coffeyville and Wynnewood refineries. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Petroleum segment for the three and six months ended June 30, 2017 are included in CVR Refining's press release dated July 27, 2017.
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum Segment Summary Financial Results: |
|||||||||||||||
Net sales |
$ |
1,338.2 |
$ |
1,164.4 |
$ |
2,761.7 |
$ |
1,998.4 |
|||||||
Operating costs and expenses: |
|||||||||||||||
Cost of materials and other |
1,208.0 |
941.9 |
2,409.3 |
1,664.2 |
|||||||||||
Direct operating expenses(1) |
83.5 |
81.9 |
172.7 |
170.2 |
|||||||||||
Major scheduled turnaround expenses |
2.8 |
2.1 |
15.7 |
31.5 |
|||||||||||
Depreciation and amortization |
31.7 |
30.9 |
65.0 |
61.8 |
|||||||||||
Cost of sales |
1,326.0 |
1,056.8 |
2,662.7 |
1,927.7 |
|||||||||||
Selling, general and administrative expenses(1) |
18.9 |
16.8 |
38.9 |
35.3 |
|||||||||||
Depreciation and amortization |
0.7 |
0.7 |
1.5 |
1.3 |
|||||||||||
Operating income (loss) |
(7.4) |
90.1 |
58.6 |
34.1 |
|||||||||||
Interest expense and other financing costs |
(12.0) |
(10.1) |
(23.2) |
(20.9) |
|||||||||||
Interest income |
0.2 |
— |
0.2 |
— |
|||||||||||
Gain (loss) on derivatives, net |
— |
(1.9) |
12.2 |
(3.1) |
|||||||||||
Income (loss) before income tax expense |
(19.2) |
78.1 |
47.8 |
10.1 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Net income (loss) |
$ |
(19.2) |
$ |
78.1 |
$ |
47.8 |
$ |
10.1 |
|||||||
Gross profit |
$ |
12.2 |
$ |
107.6 |
$ |
99.0 |
$ |
70.7 |
|||||||
Refining margin* |
$ |
130.2 |
$ |
222.5 |
$ |
352.4 |
$ |
334.2 |
|||||||
Refining margin adjusted for FIFO impact* |
$ |
145.6 |
$ |
176.3 |
$ |
368.1 |
$ |
296.8 |
|||||||
Adjusted Petroleum EBITDA* |
$ |
43.1 |
$ |
84.7 |
$ |
157.6 |
$ |
119.8 |
______________________________
* See "Use of Non-GAAP Financial Measures" below. |
(1) |
Direct operating expense and selling, general and administrative expenses for the three and six months ended June 30, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses and selling, general and administrative expenses. |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(dollars per barrel) | |||||||||||||||
Petroleum Segment Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Gross profit |
$ |
0.63 |
$ |
5.84 |
$ |
2.56 |
$ |
2.01 |
|||||||
Refining margin* |
6.69 |
12.07 |
9.10 |
9.50 |
|||||||||||
FIFO impact, (favorable) unfavorable |
0.79 |
(2.51) |
0.41 |
(1.06) |
|||||||||||
Refining margin adjusted for FIFO impact* |
7.48 |
9.56 |
9.51 |
8.44 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
4.44 |
4.56 |
4.86 |
5.73 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
4.29 |
4.45 |
4.46 |
4.84 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
4.12 |
4.33 |
4.54 |
5.34 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
3.98 |
$ |
4.22 |
$ |
4.16 |
$ |
4.50 |
|||||||
Barrels sold (barrels per day) |
230,345 |
213,368 |
229,439 |
207,669 |
______________________________
* See "Use of Non-GAAP Financial Measures" below. |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||||||||||||||
Petroleum Segment Summary |
2017 |
2016 |
2017 |
2016 | |||||||||||||||||||||||
Refining Throughput and Production Data (bpd): |
|||||||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||||||
Sweet |
202,070 |
91.0 |
% |
176,674 |
83.9 |
% |
199,973 |
88.8 |
% |
173,700 |
85.5 |
% | |||||||||||||||
Medium |
— |
— |
% |
3,429 |
1.6 |
% |
— |
— |
% |
2,471 |
1.2 |
% | |||||||||||||||
Heavy sour |
11,771 |
5.3 |
% |
22,433 |
10.7 |
% |
14,130 |
6.3 |
% |
17,174 |
8.5 |
% | |||||||||||||||
Total crude oil throughput |
213,841 |
96.3 |
% |
202,536 |
96.2 |
% |
214,103 |
95.1 |
% |
193,345 |
95.2 |
% | |||||||||||||||
All other feedstocks and blendstocks |
8,113 |
3.7 |
% |
7,952 |
3.8 |
% |
11,161 |
4.9 |
% |
9,827 |
4.8 |
% | |||||||||||||||
Total throughput |
221,954 |
100.0 |
% |
210,488 |
100.0 |
% |
225,264 |
100.0 |
% |
203,172 |
100.0 |
% | |||||||||||||||
Production: |
|||||||||||||||||||||||||||
Gasoline |
112,284 |
50.4 |
% |
108,330 |
51.3 |
% |
115,600 |
51.2 |
% |
107,105 |
52.7 |
% | |||||||||||||||
Distillate |
96,578 |
43.4 |
% |
86,622 |
41.0 |
% |
93,260 |
41.3 |
% |
82,309 |
40.5 |
% | |||||||||||||||
Other (excluding internally produced fuel) |
13,775 |
6.2 |
% |
16,280 |
7.7 |
% |
17,019 |
7.5 |
% |
13,900 |
6.8 |
% | |||||||||||||||
Total refining production (excluding internally produced fuel) |
222,637 |
100.0 |
% |
211,232 |
100.0 |
% |
225,879 |
100.0 |
% |
203,314 |
100.0 |
% | |||||||||||||||
Product price (dollars per gallon): |
|||||||||||||||||||||||||||
Gasoline |
$ |
1.52 |
$ |
1.44 |
$ |
1.53 |
$ |
1.24 |
|||||||||||||||||||
Distillate |
1.51 |
1.37 |
1.54 |
1.22 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Market Indicators (dollars per barrel): |
|||||||||||||||
West Texas Intermediate (WTI) NYMEX |
$ |
48.15 |
$ |
45.64 |
$ |
49.95 |
$ |
39.78 |
|||||||
Crude Oil Differentials: |
|||||||||||||||
WTI less WTS (light/medium sour) |
1.06 |
0.83 |
1.24 |
0.49 |
|||||||||||
WTI less WCS (heavy sour) |
10.00 |
12.92 |
11.88 |
13.26 |
|||||||||||
NYMEX Crack Spreads: |
|||||||||||||||
Gasoline |
18.07 |
19.13 |
16.39 |
17.53 |
|||||||||||
Heating Oil |
15.11 |
12.82 |
15.32 |
12.37 |
|||||||||||
NYMEX 2-1-1 Crack Spread |
16.59 |
15.98 |
15.85 |
14.95 |
|||||||||||
PADD II Group 3 Basis: |
|||||||||||||||
Gasoline |
(3.95) |
(5.49) |
(2.96) |
(5.68) |
|||||||||||
Ultra Low Sulfur Diesel |
(0.62) |
(1.18) |
(1.10) |
(1.10) |
|||||||||||
PADD II Group 3 Product Crack Spread: |
|||||||||||||||
Gasoline |
14.12 |
13.64 |
13.42 |
11.85 |
|||||||||||
Ultra Low Sulfur Diesel |
14.49 |
11.63 |
14.23 |
11.27 |
|||||||||||
PADD II Group 3 2-1-1 |
14.30 |
12.64 |
13.82 |
11.56 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Coffeyville Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
859.8 |
$ |
778.0 |
$ |
1,811.1 |
$ |
1,306.0 |
|||||||
Cost of materials and other |
773.5 |
630.7 |
1,581.9 |
1,093.4 |
|||||||||||
Direct operating expenses(1) |
47.5 |
46.1 |
98.2 |
93.8 |
|||||||||||
Major scheduled turnaround expenses |
— |
2.1 |
— |
31.5 |
|||||||||||
Depreciation and amortization |
17.4 |
16.7 |
36.4 |
33.5 |
|||||||||||
Gross profit |
21.4 |
82.4 |
94.6 |
53.8 |
|||||||||||
Add: |
|||||||||||||||
Direct operating expenses(1) |
47.5 |
46.1 |
98.2 |
93.8 |
|||||||||||
Major scheduled turnaround expenses |
— |
2.1 |
— |
31.5 |
|||||||||||
Depreciation and amortization |
17.4 |
16.7 |
36.4 |
33.5 |
|||||||||||
Refining margin* |
86.3 |
147.3 |
229.2 |
212.6 |
|||||||||||
FIFO impact, (favorable) unfavorable |
10.1 |
(30.2) |
11.6 |
(26.4) |
|||||||||||
Refining margin adjusted for FIFO impact* |
$ |
96.4 |
$ |
117.1 |
$ |
240.8 |
$ |
186.2 |
|||||||
Coffeyville Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Gross profit |
$ |
1.76 |
$ |
7.11 |
$ |
3.95 |
$ |
2.53 |
|||||||
Refining margin* |
7.09 |
12.71 |
9.57 |
9.99 |
|||||||||||
FIFO impact, (favorable) unfavorable |
0.83 |
(2.62) |
0.49 |
(1.24) |
|||||||||||
Refining margin adjusted for FIFO impact* |
7.92 |
10.09 |
10.06 |
8.75 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
3.90 |
4.16 |
4.10 |
5.89 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
3.90 |
3.98 |
4.10 |
4.41 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
3.61 |
3.84 |
3.74 |
5.28 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
3.61 |
$ |
3.67 |
$ |
3.74 |
$ |
3.95 |
|||||||
Barrels sold (barrels per day) |
144,479 |
138,021 |
145,014 |
130,429 |
______________________________
* See "Use of Non-GAAP Financial Measures" below. |
(1) |
Direct operating expenses for the three and six months ended June 30, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses. |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||
Coffeyville Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
122,048 |
87.3 |
% |
101,548 |
76.2 |
% |
118,167 |
84.0 |
% |
97,242 |
78.1 |
% | |||||||||||
Medium |
— |
— |
% |
3,429 |
2.6 |
% |
— |
— |
% |
2,471 |
2.0 |
% | |||||||||||
Heavy sour |
11,771 |
8.4 |
% |
22,433 |
16.8 |
% |
14,130 |
10.0 |
% |
17,174 |
13.8 |
% | |||||||||||
Total crude oil throughput |
133,819 |
95.7 |
% |
127,410 |
95.6 |
% |
132,297 |
94.0 |
% |
116,887 |
93.9 |
% | |||||||||||
All other feedstocks and blendstocks |
6,077 |
4.3 |
% |
5,844 |
4.4 |
% |
8,482 |
6.0 |
% |
7,594 |
6.1 |
% | |||||||||||
Total throughput |
139,896 |
100 |
% |
133,254 |
100.0 |
% |
140,779 |
100 |
% |
124,481 |
100.0 |
% | |||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
70,032 |
49.3 |
% |
67,819 |
49.9 |
% |
72,271 |
50.5 |
% |
65,927 |
52.2 |
% | |||||||||||
Distillate |
59,703 |
42.1 |
% |
57,549 |
42.4 |
% |
59,573 |
41.6 |
% |
52,348 |
41.4 |
% | |||||||||||
Other (excluding internally produced fuel) |
12,146 |
8.6 |
% |
10,491 |
7.7 |
% |
11,246 |
7.9 |
% |
8,130 |
6.4 |
% | |||||||||||
Total refining production (excluding internally produced fuel) |
141,881 |
100 |
% |
135,859 |
100.0 |
% |
143,090 |
100 |
% |
126,405 |
100.0 |
% |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Wynnewood Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
477.3 |
$ |
385.3 |
$ |
948.4 |
$ |
690.1 |
|||||||
Cost of materials and other |
434.6 |
311.3 |
827.7 |
570.7 |
|||||||||||
Direct operating expenses(1) |
36.0 |
35.8 |
74.6 |
76.4 |
|||||||||||
Major scheduled turnaround expenses |
2.8 |
— |
15.7 |
— |
|||||||||||
Depreciation and amortization |
12.8 |
12.6 |
25.6 |
25.2 |
|||||||||||
Gross profit (loss) |
(8.9) |
25.6 |
4.8 |
17.8 |
|||||||||||
Add: |
|||||||||||||||
Direct operating expenses(1) |
36.0 |
35.8 |
74.6 |
76.4 |
|||||||||||
Major scheduled turnaround expenses |
2.8 |
— |
15.7 |
— |
|||||||||||
Depreciation and amortization |
12.8 |
12.6 |
25.6 |
25.2 |
|||||||||||
Refining margin* |
42.7 |
74.0 |
120.7 |
119.4 |
|||||||||||
FIFO impact, (favorable) unfavorable |
5.2 |
(15.9) |
4.1 |
(11.0) |
|||||||||||
Refining margin adjusted for FIFO impact* |
$ |
47.9 |
$ |
58.1 |
$ |
124.8 |
$ |
108.4 |
|||||||
Wynnewood Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Gross profit (loss) |
$ |
(1.23) |
$ |
3.74 |
$ |
0.33 |
$ |
1.27 |
|||||||
Refining margin* |
5.87 |
10.83 |
8.15 |
8.58 |
|||||||||||
FIFO impact, (favorable) unfavorable |
0.72 |
(2.32) |
0.28 |
(0.79) |
|||||||||||
Refining margin adjusted for FIFO impact* |
6.59 |
8.51 |
8.43 |
7.79 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
5.33 |
5.24 |
6.10 |
5.49 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
4.95 |
5.24 |
5.04 |
5.49 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
4.97 |
5.22 |
5.91 |
5.44 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
4.61 |
$ |
5.22 |
$ |
4.88 |
$ |
5.44 |
|||||||
Barrels sold (barrels per day) |
85,866 |
75,347 |
84,425 |
77,239 |
______________________________
* See "Use of Non-GAAP Financial Measures" below. |
(1) |
Direct operating expenses for the three and six months ended June 30, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses. |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||
Wynnewood Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
80,022 |
97.5 |
% |
75,126 |
97.3 |
% |
81,806 |
96.8 |
% |
76,458 |
97.2 |
% | |||||||||||
Medium |
— |
— |
% |
— |
— |
% |
— |
— |
% |
— |
— |
% | |||||||||||
Heavy sour |
— |
— |
% |
— |
— |
% |
— |
— |
% |
— |
— |
% | |||||||||||
Total crude oil throughput |
80,022 |
97.5 |
% |
75,126 |
97.3 |
% |
81,806 |
96.8 |
% |
76,458 |
97.2 |
% | |||||||||||
All other feedstocks and blendstocks |
2,036 |
2.5 |
% |
2,108 |
2.7 |
% |
2,679 |
3.2 |
% |
2,233 |
2.8 |
% | |||||||||||
Total throughput |
82,058 |
100.0 |
% |
77,234 |
100.0 |
% |
84,485 |
100.0 |
% |
78,691 |
100.0 |
% | |||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
42,252 |
52.3 |
% |
40,511 |
53.7 |
% |
43,329 |
52.3 |
% |
41,178 |
53.5 |
% | |||||||||||
Distillate |
36,875 |
45.7 |
% |
29,073 |
38.6 |
% |
33,687 |
40.7 |
% |
29,961 |
39.0 |
% | |||||||||||
Other (excluding internally produced fuel) |
1,629 |
2.0 |
% |
5,789 |
7.7 |
% |
5,773 |
7.0 |
% |
5,770 |
7.5 |
% | |||||||||||
Total refining production (excluding internally produced fuel) |
80,756 |
100.0 |
% |
75,373 |
100.0 |
% |
82,789 |
100.0 |
% |
76,909 |
100.0 |
% |
Nitrogen Fertilizer Segment Operating Data
The following tables set forth information about the Nitrogen Fertilizer segment operated by CVR Partners, of which we own approximately 34% of the common units as of June 30, 2017 and serve as the general partner. The financial and operational data include the results of the East Dubuque Facility beginning on April 1, 2016, the date of the closing of the acquisition. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Nitrogen Fertilizer segment for the three and six months ended June 30, 2017 are included in CVR Partners' press release dated July 27, 2017 .
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer Segment Business Financial Results: |
|||||||||||||||
Net sales |
$ |
97.9 |
$ |
119.8 |
$ |
183.2 |
$ |
192.9 |
|||||||
Cost of materials and other |
22.1 |
36.0 |
43.9 |
52.4 |
|||||||||||
Direct operating expenses(1) |
37.7 |
47.6 |
73.6 |
71.3 |
|||||||||||
Major scheduled turnaround expenses |
0.1 |
6.6 |
0.1 |
6.6 |
|||||||||||
Depreciation and amortization |
20.0 |
17.6 |
35.4 |
24.5 |
|||||||||||
Cost of sales |
79.9 |
107.8 |
153.0 |
154.8 |
|||||||||||
Selling, general and administrative expenses |
5.8 |
8.3 |
12.7 |
14.7 |
|||||||||||
Operating income |
12.2 |
3.7 |
17.5 |
23.4 |
|||||||||||
Interest expense and other financing costs |
(15.7) |
(15.5) |
(31.4) |
(17.2) |
|||||||||||
Loss on extinguishment of debt |
— |
(5.1) |
— |
(5.1) |
|||||||||||
Other income, net |
— |
— |
0.1 |
— |
|||||||||||
Income (loss) before income tax expense |
(3.5) |
(16.9) |
(13.8) |
1.1 |
|||||||||||
Income tax expense |
— |
0.1 |
— |
0.1 |
|||||||||||
Net income (loss) |
$ |
(3.5) |
$ |
(17.0) |
$ |
(13.8) |
$ |
1.0 |
|||||||
Adjusted Nitrogen Fertilizer EBITDA* |
$ |
32.3 |
$ |
29.1 |
$ |
53.1 |
$ |
57.0 |
|||||||
______________________________
* See "Use of Non-GAAP Financial Measures" below. |
(1) |
Direct operating expenses for the three and six months ended June 30, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses. |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Nitrogen Fertilizer Segment Key Operating Statistics: |
|||||||||||||||
Consolidated sales (thousand tons): |
|||||||||||||||
Ammonia |
74.6 |
73.6 |
136.5 |
98.0 |
|||||||||||
UAN |
330.9 |
339.4 |
652.5 |
606.4 |
|||||||||||
Consolidated product pricing at gate (dollars per ton) (1): |
|||||||||||||||
Ammonia |
$ |
333 |
$ |
417 |
$ |
322 |
$ |
405 |
|||||||
UAN |
$ |
174 |
$ |
199 |
$ |
167 |
$ |
204 |
|||||||
Consolidated production volume (thousand tons): |
|||||||||||||||
Ammonia (gross produced) (2) |
215.3 |
171.5 |
434.5 |
285.1 |
|||||||||||
Ammonia (net available for sale) (2) |
77.5 |
45.6 |
157.5 |
60.7 |
|||||||||||
UAN |
313.8 |
296.5 |
655.7 |
544.7 |
|||||||||||
Feedstock: |
|||||||||||||||
Petroleum coke used in production (thousand tons) |
124.0 |
130.6 |
256.6 |
257.5 |
|||||||||||
Petroleum coke used in production (dollars per ton) |
$ |
21 |
$ |
12 |
$ |
17 |
$ |
15 |
|||||||
Natural gas used in production (thousands of MMBtus) |
2,134.0 |
1,396.1 |
4,225.3 |
1,396.1 |
|||||||||||
Natural gas used in production (dollars per MMBtu)(3) |
$ |
3.18 |
$ |
2.41 |
$ |
3.29 |
$ |
2.41 |
|||||||
Natural gas in cost of materials and other (thousands of MMBtus) |
2,487.4 |
1,063.0 |
3,963.4 |
1,063.0 |
|||||||||||
Natural gas in cost of materials and other (dollars per MMBtu)(3) |
$ |
3.24 |
$ |
2.33 |
$ |
3.37 |
$ |
2.33 |
|||||||
Coffeyville Facility on-stream factor (4): |
|||||||||||||||
Gasification |
98.8 |
% |
98.0 |
% |
98.8 |
% |
97.8 |
% | |||||||
Ammonia |
98.2 |
% |
96.6 |
% |
98.3 |
% |
96.9 |
% | |||||||
UAN |
87.3 |
% |
93.7 |
% |
92.0 |
% |
92.5 |
% | |||||||
East Dubuque Facility on-stream factors (4): |
|||||||||||||||
Ammonia |
100.0 |
% |
68.6 |
% |
99.8 |
% |
68.6 |
% | |||||||
UAN |
99.4 |
% |
69.1 |
% |
98.8 |
% |
69.1 |
% | |||||||
Market Indicators: |
|||||||||||||||
Ammonia — Southern Plains (dollars per ton) |
$ |
316 |
$ |
419 |
$ |
352 |
$ |
397 |
|||||||
Ammonia — Corn belt (dollars per ton) |
$ |
365 |
$ |
489 |
$ |
395 |
$ |
465 |
|||||||
UAN — Corn belt (dollars per ton) |
$ |
196 |
$ |
239 |
$ |
205 |
$ |
234 |
|||||||
Natural gas NYMEX (dollars per MMBtu) |
$ |
3.14 |
$ |
2.25 |
$ |
3.10 |
$ |
2.12 |
|||||||
______________________________
(1) |
Product pricing at gate represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry. |
(2) |
Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represent the ammonia available for sale that was not upgraded into other fertilizer products. |
(3) |
The cost per MMBtu excludes derivative activity, when applicable. The impact of natural gas derivative activity during the periods presented was not material. |
(4) |
On-stream factor is the total number of hours operated divided by the total number of hours in the reporting period and is included as a measure of operating efficiency. |
Coffeyville Facility
The Linde air separation unit experienced a shut down during the second quarter of 2017. Following the Linde outage, the Coffeyville Facility UAN unit experienced a number of operational challenges, resulting in approximately 11 days of UAN downtime during the three months ended June 30, 2017. Excluding the impact of the Linde air separation unit outage at the Coffeyville Facility, the UAN unit on-stream factors at the Coffeyville Facility would have been 99.5% and 98.1%, respectively, for the three and six months ended June 30, 2017.
East Dubuque Facility
Excluding the impact of the full facility turnaround at the East Dubuque Facility, the on-stream factors at the East Dubuque Facility would have been 100% for ammonia and 99.6% for UAN for the three months ended June 30, 2016.
Use of Non-GAAP Financial Measures
To supplement our actual results in accordance with GAAP for the applicable periods, we also use the non-GAAP financial measures noted above, which are reconciled to our GAAP-based results below. These non-GAAP financial measures should not be considered an alternative for GAAP results. The adjustments are provided to enhance an overall understanding of our financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.
Adjusted net income (loss) is not a recognized term under GAAP and should not be substituted for net income (loss) as a measure of our performance but rather should be utilized as a supplemental measure of financial performance in evaluating our business. Management believes that adjusted net income (loss) provides relevant and useful information that enables external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, to better understand and evaluate our ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance. Adjusted net income (loss) per diluted share represents adjusted net income (loss) divided by weighted-average diluted shares outstanding. Adjusted net income (loss) represents net income (loss), as adjusted, that is attributable to CVR Energy stockholders.
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Reconciliation of Income (Loss) before income tax expense to Adjusted Net Income (Loss): |
|||||||||||||||
Income (loss) before income tax expense |
$ |
(25.9) |
$ |
65.4 |
$ |
27.1 |
$ |
12.7 |
|||||||
Adjustments: |
|||||||||||||||
FIFO impact, (favorable) unfavorable |
15.4 |
(46.2) |
15.7 |
(37.4) |
|||||||||||
Major scheduled turnaround expenses |
2.9 |
8.7 |
15.8 |
38.1 |
|||||||||||
(Gain) loss on derivatives, net |
— |
1.9 |
(12.2) |
3.1 |
|||||||||||
Current period settlement on derivative contracts (1) |
(0.1) |
7.1 |
1.1 |
28.5 |
|||||||||||
Loss on extinguishment of debt |
— |
5.1 |
— |
5.1 |
|||||||||||
Expenses associated with the East Dubuque Merger (2) |
— |
1.2 |
— |
2.5 |
|||||||||||
Adjusted net income (loss) before income tax expense and noncontrolling interest |
(7.7) |
43.2 |
47.5 |
52.6 |
|||||||||||
Adjusted net (income) loss attributed to noncontrolling interest |
2.5 |
(11.9) |
(14.2) |
(18.6) |
|||||||||||
Income tax benefit (expense), as adjusted |
1.9 |
(14.2) |
(13.5) |
(8.5) |
|||||||||||
Adjusted net income (loss) |
$ |
(3.3) |
$ |
17.1 |
$ |
19.8 |
$ |
25.5 |
|||||||
Adjusted net income (loss) per diluted share |
$ |
(0.04) |
$ |
0.20 |
$ |
0.23 |
$ |
0.29 |
Refining margin per crude oil throughput barrel is a measurement calculated as the difference between the Petroleum segment's net sales and cost of materials and other. Refining margin is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of materials and other at which they are able to sell refined products. Each of the components used in this calculation (net sales and cost of materials and other) can be taken directly from our Petroleum segment's Statements of Operations. Our calculation of refining margin may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. In order to derive the refining margin per crude oil throughput barrel, we utilize the total dollar figures for refining margin as derived above and divide by the applicable number of crude oil throughput barrels for the period. We believe that refining margin is important to enable investors to better understand and evaluate the Petroleum segment's ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance.
Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference between the Petroleum segment's net sales and cost of materials and other adjusted for FIFO impact. Refining margin adjusted for FIFO impact is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of materials and other (taking into account the impact of the utilization of FIFO) at which they are able to sell refined products. Our calculation of refining margin adjusted for FIFO impact may differ from calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. Under the FIFO accounting method, changes in crude oil prices can cause fluctuations in the inventory valuation of crude oil, work in process and finished goods, thereby resulting in a favorable FIFO impact when crude oil prices increase and an unfavorable FIFO impact when crude oil prices decrease.
The calculation of refining margin and refining margin adjusted for FIFO impact (each a non-GAAP financial measure), including a reconciliation to the most directly comparable GAAP financial measure for the three and six months ended June 30, 2017 and 2016 is as follows:
Petroleum Segment Operating Data |
|||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Net sales |
$ |
1,338.2 |
$ |
1,164.4 |
$ |
2,761.7 |
$ |
1,998.4 |
|||||||
Operating costs and expenses: |
|||||||||||||||
Cost of materials and other |
1,208.0 |
941.9 |
2,409.3 |
1,664.2 |
|||||||||||
Direct operating expenses (exclusive of depreciation and amortization and major scheduled turnaround expenses as reflected below) |
83.5 |
81.9 |
172.7 |
170.2 |
|||||||||||
Major scheduled turnaround expenses |
2.8 |
2.1 |
15.7 |
31.5 |
|||||||||||
Depreciation and amortization |
31.7 |
30.9 |
65.0 |
61.8 |
|||||||||||
Gross profit |
12.2 |
107.6 |
99.0 |
70.7 |
|||||||||||
Add: |
|||||||||||||||
Direct operating expenses (exclusive of depreciation and amortization and major scheduled turnaround expenses as reflected below) |
83.5 |
81.9 |
172.7 |
170.2 |
|||||||||||
Major scheduled turnaround expenses |
2.8 |
2.1 |
15.7 |
31.5 |
|||||||||||
Depreciation and amortization |
31.7 |
30.9 |
65.0 |
61.8 |
|||||||||||
Refining margin |
130.2 |
222.5 |
352.4 |
334.2 |
|||||||||||
FIFO impact, (favorable) unfavorable |
15.4 |
(46.2) |
15.7 |
(37.4) |
|||||||||||
Refining margin adjusted for FIFO impact |
$ |
145.6 |
$ |
176.3 |
$ |
368.1 |
$ |
296.8 |
The calculation of refining margin per crude oil throughput barrel and refining margin adjusted for FIFO impact per crude oil throughput barrel for the three and six months ended June 30, 2017 and 2016 is as follows:
Petroleum Segment Operating Data |
|||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||
Total crude oil throughput barrels per day |
213,841 |
202,536 |
214,103 |
193,345 |
|||||||
Days in the period |
91 |
91 |
181 |
182 |
|||||||
Total crude oil throughput barrels |
19,459,531 |
18,430,776 |
38,752,643 |
35,188,790 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin |
$ |
130.2 |
$ |
222.5 |
$ |
352.4 |
$ |
334.2 |
|||||||
Divided by: crude oil throughput barrels |
19.5 |
18.4 |
38.8 |
35.2 |
|||||||||||
Refining margin per crude oil throughput barrel |
$ |
6.69 |
$ |
12.07 |
$ |
9.10 |
$ |
9.50 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin adjusted for FIFO impact |
$ |
145.6 |
$ |
176.3 |
$ |
368.1 |
$ |
296.8 |
|||||||
Divided by: crude oil throughput barrels |
19.5 |
18.4 |
38.8 |
35.2 |
|||||||||||
Refining margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
7.48 |
$ |
9.56 |
$ |
9.51 |
$ |
8.44 |
Coffeyville Refinery |
|||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||
Total crude oil throughput barrels per day |
133,819 |
127,410 |
132,297 |
116,887 |
|||||||
Days in the period |
91 |
91 |
181 |
182 |
|||||||
Total crude oil throughput barrels |
12,177,529 |
11,594,310 |
23,945,757 |
21,273,434 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin |
$ |
86.3 |
$ |
147.3 |
$ |
229.2 |
$ |
212.6 |
|||||||
Divided by: crude oil throughput barrels |
12.2 |
11.6 |
23.9 |
21.3 |
|||||||||||
Refining margin per crude oil throughput barrel |
$ |
7.09 |
$ |
12.71 |
$ |
9.57 |
$ |
9.99 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin adjusted for FIFO impact |
$ |
96.4 |
$ |
117.1 |
$ |
240.8 |
$ |
186.2 |
|||||||
Divided by: crude oil throughput barrels |
12.2 |
11.6 |
23.9 |
21.3 |
|||||||||||
Refining margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
7.92 |
$ |
10.09 |
$ |
10.06 |
$ |
8.75 |
Wynnewood Refinery |
|||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||
Total crude oil throughput barrels per day |
80,022 |
75,126 |
81,806 |
76,458 |
|||||||
Days in the period |
91 |
91 |
181 |
182 |
|||||||
Total crude oil throughput barrels |
7,282,002 |
6,836,466 |
14,806,886 |
13,915,356 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin |
$ |
42.7 |
$ |
74.0 |
$ |
120.7 |
$ |
119.4 |
|||||||
Divided by: crude oil throughput barrels |
7.3 |
6.8 |
14.8 |
13.9 |
|||||||||||
Refining margin per crude oil throughput barrel |
$ |
5.87 |
$ |
10.83 |
$ |
8.15 |
$ |
8.58 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining margin adjusted for FIFO impact |
$ |
47.9 |
$ |
58.1 |
$ |
124.8 |
$ |
108.4 |
|||||||
Divided by: crude oil throughput barrels |
7.3 |
6.8 |
14.8 |
13.9 |
|||||||||||
Refining margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
6.59 |
$ |
8.51 |
$ |
8.43 |
$ |
7.79 |
EBITDA and Adjusted EBITDA. EBITDA represents net income (loss) attributable to CVR Energy stockholders before consolidated (i) interest expense and other financing costs, net of interest income, (ii) income tax expense (benefit), and (iii) depreciation and amortization, less the portion of these adjustments attributable to non-controlling interest. Adjusted EBITDA represents EBITDA adjusted for, as applicable, consolidated (i) FIFO impact (favorable) unfavorable; (ii) loss on extinguishment of debt; (iii) major scheduled turnaround expenses (that many of our competitors capitalize and thereby exclude from their measures of EBITDA and adjusted EBITDA); (iv) (gain) loss on derivatives, net; (v) current period settlements on derivative contracts; (vi) business interruption insurance recovery and (vii) expenses associated with the East Dubuque Merger, less the portion of these adjustments attributable to non-controlling interest. EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be substituted for net income (loss) or cash flow from operations. Management believes that EBITDA and Adjusted EBITDA enable investors to better understand and evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently. EBITDA and Adjusted EBITDA represent EBITDA and Adjusted EBITDA that is attributable to CVR Energy stockholders.
A reconciliation of net income attributable to CVR Energy stockholders to EBITDA and EBITDA to Adjusted EBITDA for the three and six months ended June 30, 2017 and 2016 is as follows:
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Net income (loss) attributable to CVR Energy stockholders |
$ |
(10.5) |
$ |
28.4 |
$ |
11.7 |
$ |
12.2 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
27.3 |
18.4 |
54.1 |
30.3 |
|||||||||||
Income tax expense (benefit) |
(6.6) |
21.6 |
8.2 |
(0.2) |
|||||||||||
Depreciation and amortization |
54.0 |
50.7 |
105.1 |
90.7 |
|||||||||||
Adjustments attributable to noncontrolling interest |
(38.5) |
(36.0) |
(74.4) |
(54.4) |
|||||||||||
EBITDA |
25.7 |
83.1 |
104.7 |
78.6 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact, (favorable) unfavorable |
15.4 |
(46.2) |
15.7 |
(37.4) |
|||||||||||
Major scheduled turnaround expenses |
2.9 |
8.7 |
15.8 |
38.1 |
|||||||||||
(Gain) loss on derivatives, net |
— |
1.9 |
(12.2) |
3.1 |
|||||||||||
Current period settlement on derivative contracts (1) |
(0.1) |
7.1 |
1.1 |
28.5 |
|||||||||||
Loss on extinguishment of debt |
— |
5.1 |
— |
5.1 |
|||||||||||
Expenses associated with the East Dubuque Merger (2) |
— |
1.2 |
— |
2.5 |
|||||||||||
Adjustments attributable to noncontrolling interest |
(6.2) |
3.5 |
(7.0) |
(17.9) |
|||||||||||
Adjusted EBITDA |
$ |
37.7 |
$ |
64.4 |
$ |
118.1 |
$ |
100.6 |
Petroleum and Nitrogen Fertilizer EBITDA and Adjusted EBITDA. EBITDA by operating segment represents net income (loss) before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA by operating segment represents EBITDA by operating segment adjusted for, as applicable (i) FIFO impact (favorable) unfavorable; (ii) loss on extinguishment of debt; (iii) major scheduled turnaround expenses (that many of our competitors capitalize and thereby exclude from their measures of EBITDA and adjusted EBITDA); (iv) (gain) loss on derivatives, net; (v) current period settlements on derivative contracts; (vi) expenses associated with the East Dubuque Merger and (vii) business interruption insurance recovery, less the portion of these adjustments attributable to noncontrolling interest. We present Adjusted EBITDA by operating segment because it is the starting point for CVR Refining's and CVR Partners' calculation of available cash for distribution. EBITDA and Adjusted EBITDA by operating segment are not recognized terms under GAAP and should not be substituted for net income (loss) as a measure of performance. Management believes that EBITDA and Adjusted EBITDA by operating segment enable investors to better understand CVR Refining's and CVR Partners' ability to make distributions to their common unitholders, help investors evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.
A reconciliation of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA for the Petroleum and Nitrogen Fertilizer segments for the three and six months ended June 30, 2017 and 2016 is as follows:
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum: |
|||||||||||||||
Petroleum net income (loss) |
$ |
(19.2) |
$ |
78.1 |
$ |
47.8 |
$ |
10.1 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
11.8 |
10.1 |
23.0 |
20.9 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Depreciation and amortization |
32.4 |
31.6 |
66.5 |
63.1 |
|||||||||||
Petroleum EBITDA |
25.0 |
119.8 |
137.3 |
94.1 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact, (favorable) unfavorable |
15.4 |
(46.2) |
15.7 |
(37.4) |
|||||||||||
Major scheduled turnaround expenses |
2.8 |
2.1 |
15.7 |
31.5 |
|||||||||||
(Gain) loss on derivatives, net |
— |
1.9 |
(12.2) |
3.1 |
|||||||||||
Current period settlements on derivative contracts (1) |
(0.1) |
7.1 |
1.1 |
28.5 |
|||||||||||
Adjusted Petroleum EBITDA |
$ |
43.1 |
$ |
84.7 |
$ |
157.6 |
$ |
119.8 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer: |
|||||||||||||||
Nitrogen fertilizer net income (loss) |
$ |
(3.5) |
$ |
(17.0) |
$ |
(13.8) |
$ |
1.0 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net |
15.7 |
15.5 |
31.4 |
17.2 |
|||||||||||
Income tax expense |
— |
0.1 |
— |
0.1 |
|||||||||||
Depreciation and amortization |
20.0 |
17.6 |
35.4 |
24.5 |
|||||||||||
Nitrogen Fertilizer EBITDA |
32.2 |
16.2 |
53.0 |
42.8 |
|||||||||||
Add: |
|||||||||||||||
Major scheduled turnaround expenses |
0.1 |
6.6 |
0.1 |
6.6 |
|||||||||||
Loss on extinguishment of debt |
— |
5.1 |
— |
5.1 |
|||||||||||
Expenses associated with the East Dubuque Merger (2) |
— |
1.2 |
— |
2.5 |
|||||||||||
Adjusted Nitrogen Fertilizer EBITDA |
$ |
32.3 |
$ |
29.1 |
$ |
53.1 |
$ |
57.0 |
|||||||
______________________________
(1) |
Represents the portion of gain (loss) on derivatives, net related to contracts that matured during the respective periods and settled with counterparties. There are no premiums paid or received at inception of the derivative contracts and upon settlement, there is no cost recovery associated with these contracts. |
(2) |
On April 1, 2016, CVR Partners completed the East Dubuque Merger. CVR Partners incurred legal and other professional fees and other merger related expenses that are referred to herein as expenses associated with the East Dubuque Merger, which are included in selling, general and administrative expenses. |
View original content:http://www.prnewswire.com/news-releases/cvr-energy-reports-2017-second-quarter-results-and-announces-cash-dividend-of-50-cents-300495191.html
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, July 13, 2017 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced that it will release its 2017 second quarter results on Thursday, July 27, before the open of New York Stock Exchange trading. Chief Executive Officer Jack Lipinski and other executives will host a teleconference call for analysts and investors on July 27 at 3 p.m. Eastern.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/21798. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/21798. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13666031.
CVR Energy's 2017 second quarter earnings news release will be distributed via PR Newswire and posted at www.CVREnergy.com.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Brandee Stephens
CVR Energy, Inc.
(281) 207-3516
MediaRelations@CVREnergy.com
View original content with multimedia:http://www.prnewswire.com/news-releases/cvr-energy-announces-2017-second-quarter-earnings-call-300487044.html
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, April 27, 2017 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced net income of $22.2 million, or 26 cents per diluted share, on net sales of $1,507.1 million for the first quarter of 2017, compared to a net loss of $16.2 million, or 19 cents per diluted share, on net sales of $905.5 million for the 2016 first quarter. First quarter 2017 adjusted EBITDA, a non-GAAP financial measure, was $80.4 million, compared to first quarter 2016 adjusted EBITDA of $36.2 million.
"For the 2017 first quarter, CVR Partners reported strong operational performance with high on-stream rates at both its Coffeyville, Kansas, and East Dubuque, Illinois, fertilizer facilities," said Jack Lipinski, CVR Energy's chief executive officer.
"CVR Refining's Coffeyville and Wynnewood, Oklahoma, refineries performed exceptionally well during the 2017 first quarter, posting a quarterly record for combined crude oil throughput of 214,369 barrels per day (bpd)," Lipinski said. "In addition, the joint venture between subsidiaries of CVR Refining and Velocity Midstream Partners recently completed construction of the crude oil pipeline connecting the Wynnewood refinery with the SCOOP play in central Oklahoma. The pipeline commenced operations in mid-April.
"As I mentioned in the CVR Refining first quarter news release, the Renewable Fuel Standard continues to be a disaster searching for a solution," he continued. "The wild volatility in the market for Renewable Identification Numbers (RINs) during the first quarter once again proves that RINs are not fundamentally priced but are in fact manipulated. The cost to produce a D-6 ethanol RIN is currently between 6 cents and 10 cents, yet it trades 40 cents higher. This is the price manipulation in the market that must stop and CVR Refining supports the efforts of the many refiners and independent gas station dealers to reform this misguided regulation."
Petroleum Business
The petroleum business, which is operated by CVR Refining and includes the Coffeyville and Wynnewood refineries, reported first quarter 2017 operating income of $66.0 million on net sales of $1,423.5 million, compared to an operating loss of $56.0 million on net sales of $834.0 million in the first quarter of 2016.
Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $11.54 in the 2017 first quarter, compared to $7.19 during the same period in 2016. Direct operating expenses (exclusive of depreciation and amortization), including major scheduled turnaround expenses, per crude oil throughput barrel, for the 2017 first quarter were $5.29, compared to $7.02 in the first quarter of 2016.
First quarter 2017 throughputs of crude oil and all other feedstocks and blendstocks totaled 228,612 bpd, compared to first quarter 2016 throughputs of crude oil and all other feedstocks and blendstocks of 195,859 bpd.
Nitrogen Fertilizers Business
The fertilizer business, which is operated by CVR Partners and includes the Coffeyville and East Dubuque fertilizer facilities, reported first quarter 2017 operating income of $5.3 million on net sales of $85.3 million, compared to operating income of $19.7 million on net sales of $73.1 million for the first quarter of 2016.
For the first quarter of 2017, consolidated average realized gate prices for UAN and ammonia were $160 per ton and $308 per ton, respectively. Average realized gate prices for UAN and ammonia for the Coffeyville facility were $209 per ton and $367 per ton, respectively, for the same period in 2016.
CVR Partners' fertilizer facilities produced a combined 219,200 tons of ammonia during the first quarter of 2017, of which 80,000 net tons were available for sale while the rest was upgraded to other fertilizer products, including 341,900 tons of UAN. In the 2016 first quarter, the Coffeyville facility produced 113,700 tons of ammonia, of which 15,100 net tons were available for sale while the remainder was upgraded to 248,200 tons of UAN.
Cash, Debt and Dividend
Consolidated cash and cash equivalents was $803.6 million at March 31, 2017. Consolidated total debt was $1,165.2 million at March 31, 2017. The company had no debt exclusive of CVR Refining's and CVR Partners' debt.
CVR Energy also announced a first quarter 2017 cash dividend of 50 cents per share. The dividend, as declared by CVR Energy's Board of Directors, will be paid on May 15, 2017, to stockholders of record on May 8, 2017.
Today, CVR Partners announced a 2017 first quarter cash distribution of 2 cents per common unit. CVR Refining announced that it will not pay a cash distribution for the 2017 first quarter.
First Quarter 2017 Earnings Conference Call
CVR Energy previously announced that it will host its first quarter 2017 Earnings Conference Call for analysts and investors on Thursday, April 27, at 3 p.m. Eastern. The Earnings Conference Call may also include discussion of company developments, forward-looking information and other material information about business and financial matters.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/20616. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/20616. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13659740.
Forward-Looking Statements
This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "explore," "evaluate," "intend," "may," "might," "plan," "potential," "predict," "seek," "should," or "will," or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. For a discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings. These risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. CVR Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Brandee Stephens
CVR Energy, Inc.
(281) 207-3516
MediaRelations@CVREnergy.com
CVR Energy, Inc.
Financial and Operational Data (all information in this release is unaudited other than the balance sheet data as of December 31, 2016).
Three Months Ended | |||||||
2017 |
2016 | ||||||
(in millions, except per share data) | |||||||
Consolidated Statement of Operations Data: |
|||||||
Net sales |
$ |
1,507.1 |
$ |
905.5 |
|||
Operating costs and expenses: |
|||||||
Cost of materials and other |
1,221.2 |
736.8 |
|||||
Direct operating expenses(1) |
138.1 |
141.4 |
|||||
Depreciation and amortization |
48.6 |
37.9 |
|||||
Cost of sales |
1,407.9 |
916.1 |
|||||
Selling, general and administrative expenses(1) |
29.1 |
27.2 |
|||||
Depreciation and amortization |
2.5 |
2.1 |
|||||
Operating income (loss) |
67.6 |
(39.9) |
|||||
Interest expense and other financing costs |
(27.0) |
(12.1) |
|||||
Interest income |
0.2 |
0.2 |
|||||
Gain (loss) on derivatives, net |
12.2 |
(1.2) |
|||||
Other income, net |
— |
0.3 |
|||||
Income (loss) before income tax expense (benefit) |
53.0 |
(52.7) |
|||||
Income tax expense (benefit) |
14.8 |
(21.8) |
|||||
Net income (loss) |
38.2 |
(30.9) |
|||||
Less: Net income (loss) attributable to noncontrolling interest |
16.0 |
(14.7) |
|||||
Net income (loss) attributable to CVR Energy stockholders |
$ |
22.2 |
$ |
(16.2) |
|||
Basic and diluted earnings (loss) per share |
$ |
0.26 |
$ |
(0.19) |
|||
Dividends declared per share |
$ |
0.50 |
$ |
0.50 |
|||
Adjusted EBITDA* |
$ |
80.4 |
$ |
36.2 |
|||
Adjusted net income* |
$ |
23.1 |
$ |
8.4 |
|||
Adjusted net income per diluted share* |
$ |
0.27 |
$ |
0.10 |
|||
Weighted-average common shares outstanding - basic and diluted |
86.8 |
86.8 |
______________________________
* See "Use of Non-GAAP Financial Measures" below. |
(1) |
Direct operating expenses and selling, general and administrative expenses for the three months ended March 31, 2017 and 2016 are shown exclusive of depreciation and amortization, which amounts are presented separately below direct operating expenses and selling, general and administrative expenses. |
As of March |
As of | ||||||
(audited) | |||||||
(in millions) | |||||||
Balance Sheet Data: |
|||||||
Cash and cash equivalents |
$ |
803.6 |
$ |
735.8 |
|||
Working capital |
787.9 |
749.6 |
|||||
Total assets |
4,053.2 |
4,050.2 |
|||||
Total debt, including current portion |
1,165.2 |
1,164.6 |
|||||
Total CVR stockholders' equity |
836.9 |
858.1 |
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions) | |||||||
Cash Flow Data: |
|||||||
Net cash flow provided by (used in): |
|||||||
Operating activities |
$ |
137.2 |
$ |
21.6 |
|||
Investing activities |
(25.6) |
(51.7) |
|||||
Financing activities |
(43.8) |
(53.2) |
|||||
Net cash flow |
$ |
67.8 |
$ |
(83.3) |
Segment Information
Our operations are organized into two reportable segments, Petroleum and Nitrogen Fertilizer. Our operations that are not included in the Petroleum and Nitrogen Fertilizer segments are included in the Corporate and Other segment (along with elimination of intersegment transactions). The Petroleum segment is operated by CVR Refining, LP ("CVR Refining"), in which we own a majority interest as well as serve as the general partner. The Petroleum segment includes the operations of the Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with the crude oil gathering and pipeline systems. Detailed operating results for the Petroleum segment for the three months ended March 31, 2017 are included in CVR Refining's press release dated April 27, 2017. The Nitrogen Fertilizer segment is operated by CVR Partners, LP ("CVR Partners"), in which we own approximately 34% of the common units as of March 31, 2017 and serve as the general partner. On April 1, 2016, CVR Partners completed the merger (the "East Dubuque Merger") whereby CVR Partners acquired a nitrogen fertilizer manufacturing facility located in East Dubuque, Illinois (the "East Dubuque Facility"). The Nitrogen Fertilizer segment consists of a nitrogen fertilizer manufacturing facility located in Coffeyville, Kansas, and the East Dubuque Facility beginning on April 1, 2016, the date of the closing of the acquisition. Detailed operating results for the Nitrogen Fertilizer segment for the three months ended March 31, 2017 are included in CVR Partners' press release dated April 27, 2017.
Petroleum |
Nitrogen |
Corporate and |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended March 31, 2017 |
|||||||||||||||
Net sales |
$ |
1,423.5 |
$ |
85.3 |
$ |
(1.7) |
$ |
1,507.1 |
|||||||
Cost of materials and other |
1,201.3 |
21.8 |
(1.9) |
1,221.2 |
|||||||||||
Direct operating expenses (1) |
89.2 |
35.9 |
0.1 |
125.2 |
|||||||||||
Major scheduled turnaround expenses |
12.9 |
— |
— |
12.9 |
|||||||||||
Selling, general and administrative |
20.0 |
6.9 |
2.2 |
29.1 |
|||||||||||
Depreciation and amortization |
34.1 |
15.4 |
1.6 |
51.1 |
|||||||||||
Operating income (loss) |
$ |
66.0 |
$ |
5.3 |
$ |
(3.7) |
$ |
67.6 |
|||||||
Capital expenditures |
$ |
19.6 |
$ |
4.1 |
$ |
0.5 |
$ |
24.2 |
Petroleum |
Nitrogen |
Corporate and |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended March 31, 2016 |
|||||||||||||||
Net sales |
$ |
834.0 |
$ |
73.1 |
$ |
(1.6) |
$ |
905.5 |
|||||||
Cost of materials and other |
722.3 |
16.3 |
(1.8) |
736.8 |
|||||||||||
Direct operating expenses (1) |
88.3 |
23.7 |
— |
112.0 |
|||||||||||
Major scheduled turnaround expenses |
29.4 |
— |
— |
29.4 |
|||||||||||
Selling, general and administrative |
18.5 |
6.4 |
2.3 |
27.2 |
|||||||||||
Depreciation and amortization |
31.5 |
7.0 |
1.5 |
40.0 |
|||||||||||
Operating income (loss) |
$ |
(56.0) |
$ |
19.7 |
$ |
(3.6) |
$ |
(39.9) |
|||||||
Capital expenditures |
$ |
44.0 |
$ |
1.7 |
$ |
1.8 |
$ |
47.5 |
|||||||
(1) |
Excluding turnaround expenses. |
Petroleum |
Nitrogen |
Corporate and |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
March 31, 2017 |
|||||||||||||||
Cash and cash equivalents |
$ |
408.8 |
$ |
81.5 |
$ |
313.3 |
$ |
803.6 |
|||||||
Total assets |
2,371.8 |
1,328.4 |
353.0 |
4,053.2 |
|||||||||||
Total debt, including current portion |
541.4 |
623.8 |
— |
1,165.2 |
|||||||||||
December 31, 2016 |
|||||||||||||||
Cash and cash equivalents |
$ |
314.1 |
$ |
55.6 |
$ |
366.1 |
$ |
735.8 |
|||||||
Total assets |
2,331.9 |
1,312.2 |
406.1 |
4,050.2 |
|||||||||||
Total debt, including current portion |
541.5 |
623.1 |
— |
1,164.6 |
Petroleum Segment Operating Data
The following tables set forth information about our consolidated Petroleum segment operated by CVR Refining, of which we own a majority interest and serve as the general partner, and the Coffeyville and Wynnewood refineries. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Petroleum segment for three months ended March 31, 2017 are included in CVR Refining's press release dated April 27, 2017.
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions) | |||||||
Petroleum Segment Summary Financial Results: |
|||||||
Net sales |
$ |
1,423.5 |
$ |
834.0 |
|||
Operating costs and expenses: |
|||||||
Cost of materials and other |
1,201.3 |
722.3 |
|||||
Direct operating expenses(1) |
89.2 |
88.3 |
|||||
Major scheduled turnaround expenses |
12.9 |
29.4 |
|||||
Depreciation and amortization |
33.3 |
30.9 |
|||||
Cost of sales |
1,336.7 |
870.9 |
|||||
Selling, general and administrative expenses(1) |
20.0 |
18.5 |
|||||
Depreciation and amortization |
0.8 |
0.6 |
|||||
Operating income (loss) |
66.0 |
(56.0) |
|||||
Interest expense and other financing costs |
(11.2) |
(10.8) |
|||||
Gain (loss) on derivatives, net |
12.2 |
(1.2) |
|||||
Income (loss) before income tax expense |
67.0 |
(68.0) |
|||||
Income tax expense |
— |
— |
|||||
Net income (loss) |
$ |
67.0 |
$ |
(68.0) |
|||
Gross profit (loss) |
$ |
86.8 |
$ |
(36.9) |
|||
Refining margin* |
$ |
222.2 |
$ |
111.7 |
|||
Refining margin adjusted for FIFO impact* |
$ |
222.5 |
$ |
120.5 |
|||
Adjusted Petroleum EBITDA* |
$ |
114.5 |
$ |
35.1 |
______________________________
* See "Use of Non-GAAP Financial Measures" below. |
(1) |
Direct operating expense and selling, general and administrative expenses for the three months ended March 31, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses and selling, general and administrative expenses. |
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(dollars per barrel) | |||||||
Petroleum Segment Key Operating Statistics: |
|||||||
Per crude oil throughput barrel: |
|||||||
Gross profit (loss) |
$ |
4.50 |
$ |
(2.20) |
|||
Refining margin* |
11.52 |
6.67 |
|||||
FIFO impact, unfavorable |
0.02 |
0.52 |
|||||
Refining margin adjusted for FIFO impact* |
11.54 |
7.19 |
|||||
Direct operating expenses and major scheduled turnaround expenses |
5.29 |
7.02 |
|||||
Direct operating expenses excluding major scheduled turnaround expenses |
4.63 |
5.27 |
|||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
4.97 |
6.40 |
|||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
4.34 |
$ |
4.80 |
|||
Barrels sold (barrels per day) |
228,522 |
201,970 |
______________________________
* See "Use of Non-GAAP Financial Measures" below. |
Three Months Ended March 31, | |||||||||||||
Petroleum Segment Summary |
2017 |
2016 | |||||||||||
Refining Throughput and Production Data (bpd): |
|||||||||||||
Throughput: |
|||||||||||||
Sweet |
197,853 |
86.6 |
% |
170,728 |
87.2 |
% | |||||||
Medium |
— |
— |
% |
1,513 |
0.8 |
% | |||||||
Heavy sour |
16,516 |
7.2 |
% |
11,914 |
6.0 |
% | |||||||
Total crude oil throughput |
214,369 |
93.8 |
% |
184,155 |
94.0 |
% | |||||||
All other feedstocks and blendstocks |
14,243 |
6.2 |
% |
11,704 |
6.0 |
% | |||||||
Total throughput |
228,612 |
100.0 |
% |
195,859 |
100.0 |
% | |||||||
Production: |
|||||||||||||
Gasoline |
118,955 |
51.9 |
% |
105,878 |
54.2 |
% | |||||||
Distillate |
89,907 |
39.2 |
% |
77,996 |
39.9 |
% | |||||||
Other (excluding internally produced fuel) |
20,298 |
8.9 |
% |
11,519 |
5.9 |
% | |||||||
Total refining production (excluding internally produced fuel) |
229,160 |
100.0 |
% |
195,393 |
100.0 |
% | |||||||
Product price (dollars per gallon): |
|||||||||||||
Gasoline |
$ |
1.54 |
$ |
1.04 |
|||||||||
Distillate |
1.58 |
1.05 |
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
Market Indicators (dollars per barrel): |
|||||||
West Texas Intermediate (WTI) NYMEX |
$ |
51.78 |
$ |
33.63 |
|||
Crude Oil Differentials: |
|||||||
WTI less WTS (light/medium sour) |
1.42 |
0.13 |
|||||
WTI less WCS (heavy sour) |
13.77 |
13.62 |
|||||
NYMEX Crack Spreads: |
|||||||
Gasoline |
14.68 |
15.84 |
|||||
Heating Oil |
15.54 |
11.91 |
|||||
NYMEX 2-1-1 Crack Spread |
15.11 |
13.88 |
|||||
PADD II Group 3 Basis: |
|||||||
Gasoline |
(1.96) |
(5.88) |
|||||
Ultra Low Sulfur Diesel |
(1.58) |
(1.01) |
|||||
PADD II Group 3 Product Crack Spread: |
|||||||
Gasoline |
12.71 |
9.97 |
|||||
Ultra Low Sulfur Diesel |
13.96 |
10.90 |
|||||
PADD II Group 3 2-1-1 |
13.34 |
10.43 |
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions, except operating statistics) | |||||||
Coffeyville Refinery Financial Results: |
|||||||
Net sales |
$ |
951.3 |
$ |
528.0 |
|||
Cost of materials and other |
808.4 |
462.7 |
|||||
Direct operating expenses(1) |
50.7 |
47.6 |
|||||
Major scheduled turnaround expenses |
— |
29.4 |
|||||
Depreciation and amortization |
19.1 |
16.8 |
|||||
Gross profit (loss) |
73.1 |
(28.5) |
|||||
Add: |
|||||||
Direct operating expenses(1) |
50.7 |
47.6 |
|||||
Major scheduled turnaround expenses |
— |
29.4 |
|||||
Depreciation and amortization |
19.1 |
16.8 |
|||||
Refining margin* |
142.9 |
65.3 |
|||||
FIFO impact, unfavorable |
1.5 |
3.9 |
|||||
Refining margin adjusted for FIFO impact* |
$ |
144.4 |
$ |
69.2 |
|||
Coffeyville Refinery Key Operating Statistics: |
|||||||
Per crude oil throughput barrel: |
|||||||
Gross profit (loss) |
$ |
6.22 |
$ |
(2.94) |
|||
Refining margin* |
12.15 |
6.75 |
|||||
FIFO impact, unfavorable |
0.13 |
0.40 |
|||||
Refining margin adjusted for FIFO impact* |
12.28 |
7.15 |
|||||
Direct operating expenses and major scheduled turnaround expenses |
4.31 |
7.96 |
|||||
Direct operating expenses excluding major scheduled turnaround expenses |
4.31 |
4.92 |
|||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
3.87 |
6.89 |
|||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
3.87 |
$ |
4.26 |
|||
Barrels sold (barrels per day) |
145,555 |
122,838 |
______________________________
* See "Use of Non-GAAP Financial Measures" below. |
(1) |
Direct operating expenses for the three months ended March 31, 2017 and 2016 are shown exclusive of depreciation and amortization, which amounts are presented separately below direct operating expenses. |
Three Months Ended March 31, | |||||||||||
2017 |
2016 | ||||||||||
Coffeyville Refinery Throughput and Production Data (bpd): |
|||||||||||
Throughput: |
|||||||||||
Sweet |
114,243 |
80.6 |
% |
92,938 |
80.3 |
% | |||||
Medium |
— |
— |
% |
1,513 |
1.3 |
% | |||||
Heavy sour |
16,516 |
11.7 |
% |
11,914 |
10.3 |
% | |||||
Total crude oil throughput |
130,759 |
92.3 |
% |
106,365 |
91.9 |
% | |||||
All other feedstocks and blendstocks |
10,915 |
7.7 |
% |
9,344 |
8.1 |
% | |||||
Total throughput |
141,674 |
100.0 |
% |
115,709 |
100.0 |
% | |||||
Production: |
|||||||||||
Gasoline |
74,538 |
51.6 |
% |
64,033 |
54.8 |
% | |||||
Distillate |
59,444 |
41.2 |
% |
47,147 |
40.3 |
% | |||||
Other (excluding internally produced fuel) |
10,335 |
7.2 |
% |
5,768 |
4.9 |
% | |||||
Total refining production (excluding internally produced fuel) |
144,317 |
100.0 |
% |
116,948 |
100.0 |
% |
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions, except operating statistics) | |||||||
Wynnewood Refinery Financial Results: |
|||||||
Net sales |
$ |
471.1 |
$ |
304.8 |
|||
Cost of materials and other |
393.1 |
259.4 |
|||||
Direct operating expenses(1) |
38.6 |
40.6 |
|||||
Major scheduled turnaround expenses |
12.9 |
— |
|||||
Depreciation and amortization |
12.8 |
12.6 |
|||||
Gross profit (loss) |
13.7 |
(7.8) |
|||||
Add: |
|||||||
Direct operating expenses(1) |
38.6 |
40.6 |
|||||
Major scheduled turnaround expenses |
12.9 |
— |
|||||
Depreciation and amortization |
12.8 |
12.6 |
|||||
Refining margin* |
78.0 |
45.4 |
|||||
FIFO impact, (favorable) unfavorable |
(1.1) |
4.8 |
|||||
Refining margin adjusted for FIFO impact* |
$ |
76.9 |
$ |
50.2 |
|||
Wynnewood Refinery Key Operating Statistics: |
|||||||
Per crude oil throughput barrel: |
|||||||
Gross profit (loss) |
$ |
1.83 |
$ |
(1.10) |
|||
Refining margin* |
10.36 |
6.41 |
|||||
FIFO impact, (favorable) unfavorable |
(0.15) |
0.68 |
|||||
Refining margin adjusted for FIFO impact* |
10.21 |
7.09 |
|||||
Direct operating expenses and major scheduled turnaround expenses |
6.83 |
5.74 |
|||||
Direct operating expenses excluding major scheduled turnaround expenses |
5.12 |
5.74 |
|||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
6.89 |
5.64 |
|||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
5.16 |
$ |
5.64 |
|||
Barrels sold (barrels per day) |
82,967 |
79,132 |
______________________________
* See "Use of Non-GAAP Financial Measures" below. |
(1) |
Direct operating expenses for the three months ended March 31, 2017 and 2016 are shown exclusive of depreciation and amortization, which amounts are presented separately below direct operating expenses. |
Three Months Ended March 31, | |||||||||||
2017 |
2016 | ||||||||||
Wynnewood Refinery Throughput and Production Data (bpd): |
|||||||||||
Throughput: |
|||||||||||
Sweet |
83,610 |
96.2 |
% |
77,790 |
97.1 |
% | |||||
Medium |
— |
— |
% |
— |
— |
% | |||||
Heavy sour |
— |
— |
% |
— |
— |
% | |||||
Total crude oil throughput |
83,610 |
96.2 |
% |
77,790 |
97.1 |
% | |||||
All other feedstocks and blendstocks |
3,328 |
3.8 |
% |
2,360 |
2.9 |
% | |||||
Total throughput |
86,938 |
100.0 |
% |
80,150 |
100.0 |
% | |||||
Production: |
|||||||||||
Gasoline |
44,417 |
52.4 |
% |
41,845 |
53.4 |
% | |||||
Distillate |
30,463 |
35.9 |
% |
30,849 |
39.3 |
% | |||||
Other (excluding internally produced fuel) |
9,963 |
11.7 |
% |
5,751 |
7.3 |
% | |||||
Total refining production (excluding internally produced fuel) |
84,843 |
100.0 |
% |
78,445 |
100.0 |
% |
Nitrogen Fertilizer Segment Operating Data
The following tables set forth information about the Nitrogen Fertilizer segment operated by CVR Partners, of which we own approximately 34% of the common units as of March 31, 2017 and serve as the general partner. The financial and operational data include the results of the East Dubuque Facility beginning on April 1, 2016, the date of the closing of the acquisition. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Nitrogen Fertilizer segment for the three months ended March 31, 2017 are included in CVR Partners' press release dated April 27, 2017.
Three Months March 31, | |||||||
2017 |
2016 | ||||||
(in millions) | |||||||
Nitrogen Fertilizer Segment Business Financial Results: |
|||||||
Net sales |
$ |
85.3 |
$ |
73.1 |
|||
Cost of materials and other |
21.8 |
16.3 |
|||||
Direct operating expenses(1) |
35.9 |
23.7 |
|||||
Depreciation and amortization |
15.4 |
7.0 |
|||||
Cost of sales |
73.1 |
47.0 |
|||||
Selling, general and administrative expenses |
6.9 |
6.4 |
|||||
Operating income |
5.3 |
19.7 |
|||||
Interest expense and other financing costs |
(15.7) |
(1.7) |
|||||
Other income, net |
0.1 |
— |
|||||
Income (loss) before income tax expense |
(10.3) |
18.0 |
|||||
Income tax expense |
— |
— |
|||||
Net income (loss) |
$ |
(10.3) |
$ |
18.0 |
|||
Adjusted Nitrogen Fertilizer EBITDA* |
$ |
20.8 |
$ |
27.9 |
|||
* See "Use of Non-GAAP Financial Measures" below. |
(1) |
Direct operating expenses for the three months ended March 31, 2017 and 2016 are shown exclusive of depreciation and amortization, which amounts are presented separately below direct operating expenses. |
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
Nitrogen Fertilizer Segment Key Operating Statistics: |
|||||||
Consolidated sales (thousand tons): |
|||||||
Ammonia |
61.9 |
24.4 |
|||||
UAN |
321.6 |
267.0 |
|||||
Consolidated product pricing at gate (dollars per ton) (1): |
|||||||
Ammonia |
$ |
308 |
$ |
367 |
|||
UAN |
$ |
160 |
$ |
209 |
|||
Consolidated production volume (thousand tons): |
|||||||
Ammonia (gross produced) (2) |
219.2 |
113.7 |
|||||
Ammonia (net available for sale) (2) |
80.0 |
15.1 |
|||||
UAN |
341.9 |
248.2 |
|||||
Feedstock: |
|||||||
Petroleum coke used in production (thousand tons) |
132.6 |
126.9 |
|||||
Petroleum coke used in production (dollars per ton) |
$ |
14 |
$ |
17 |
|||
Natural gas used in production (thousands of MMBtus) |
2,091.2 |
— |
|||||
Natural gas used in production (dollars per MMBtu)(3) |
$ |
3.41 |
$ |
— |
|||
Natural gas in cost of materials and other (thousands of MMBtus) |
1,476.0 |
— |
|||||
Natural gas in cost of materials and other (dollars per MMBtu)(3) |
$ |
3.59 |
$ |
— |
|||
Coffeyville Facility on-stream factor (4): |
|||||||
Gasification |
98.9 |
% |
97.7 |
% | |||
Ammonia |
98.5 |
% |
97.2 |
% | |||
UAN |
96.8 |
% |
91.4 |
% | |||
East Dubuque Facility on-stream factors (4): |
|||||||
Ammonia |
99.6 |
% |
— |
% | |||
UAN |
98.2 |
% |
— |
% | |||
Market Indicators: |
|||||||
Ammonia — Southern Plains (dollars per ton) |
$ |
387 |
$ |
375 |
|||
Ammonia — Corn belt (dollars per ton) |
$ |
424 |
$ |
441 |
|||
UAN — Corn belt (dollars per ton) |
$ |
215 |
$ |
229 |
|||
Natural gas NYMEX (dollars per MMBtu) |
$ |
3.06 |
$ |
1.98 |
|||
(1) |
Product pricing at gate represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry. |
(2) |
Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represent the ammonia available for sale that was not upgraded into other fertilizer products. |
(3) |
The cost per MMBtu excludes derivative activity, when applicable. The impact of natural gas derivative activity during the periods presented was not material. |
(4) |
On-stream factor is the total number of hours operated divided by the total number of hours in the reporting period and is included as a measure of operating efficiency. |
Use of Non-GAAP Financial Measures
To supplement the Company's actual results in accordance with GAAP for the applicable periods, the Company also uses the non-GAAP financial measures noted above, which are reconciled to our GAAP-based results below. These non-GAAP financial measures should not be considered an alternative for GAAP results. The adjustments are provided to enhance an overall understanding of the Company's financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.
Adjusted net income (loss) is not a recognized term under GAAP and should not be substituted for net income (loss) as a measure of our performance but rather should be utilized as a supplemental measure of financial performance in evaluating our business. Management believes that adjusted net income (loss) provides relevant and useful information that enables external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, to better understand and evaluate our ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance. Adjusted net income (loss) per diluted share represents adjusted net income (loss) divided by weighted-average diluted shares outstanding. Adjusted net income (loss) represents net income (loss), as adjusted, that is attributable to CVR Energy stockholders.
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions, except per share data) | |||||||
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss): |
|||||||
Income (loss) before income tax expense |
$ |
53.0 |
$ |
(52.7) |
|||
Adjustments: |
|||||||
FIFO impact, unfavorable |
0.3 |
8.8 |
|||||
Major scheduled turnaround expenses |
12.9 |
29.4 |
|||||
(Gain) loss on derivatives, net |
(12.2) |
1.2 |
|||||
Current period settlement on derivative contracts (1) |
1.2 |
21.4 |
|||||
Expenses associated with the East Dubuque Merger (2) |
— |
1.2 |
|||||
Adjusted net income before income tax expense and noncontrolling interest |
55.2 |
9.3 |
|||||
Adjusted net income attributed to noncontrolling interest |
(16.7) |
(6.6) |
|||||
Income tax benefit (expense), as adjusted |
(15.4) |
5.7 |
|||||
Adjusted net income |
$ |
23.1 |
$ |
8.4 |
|||
Adjusted net income per diluted share |
$ |
0.27 |
$ |
0.10 |
Refining margin per crude oil throughput barrel is a measurement calculated as the difference between the Petroleum segment's net sales and cost of materials and other. Refining margin is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of materials and other at which they are able to sell refined products. Each of the components used in this calculation (net sales and cost of materials and other) can be taken directly from our Petroleum segment's Statements of Operations. Our calculation of refining margin may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. In order to derive the refining margin per crude oil throughput barrel, we utilize the total dollar figures for refining margin as derived above and divide by the applicable number of crude oil throughput barrels for the period. We believe that refining margin is important to enable investors to better understand and evaluate the Petroleum segment's ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance.
Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference between the Petroleum segment's net sales and cost of materials and other adjusted for FIFO impact. Refining margin adjusted for FIFO impact is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of materials and other (taking into account the impact of the utilization of FIFO) at which they are able to sell refined products. Our calculation of refining margin adjusted for FIFO impact may differ from calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. Under the FIFO accounting method, changes in crude oil prices can cause fluctuations in the inventory valuation of crude oil, work in process and finished goods, thereby resulting in a favorable FIFO impact when crude oil prices increase and an unfavorable FIFO impact when crude oil prices decrease.
The calculation of refining margin and refining margin adjusted for FIFO impact (each a non-GAAP financial measure), including a reconciliation to the most directly comparable GAAP financial measure for the three months ended March 31, 2017 and 2016 is as follows:
Petroleum Segment Operating Data |
|||||||
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions) | |||||||
Net Sales |
$ |
1,423.5 |
$ |
834.0 |
|||
Operating costs and expenses: |
|||||||
Cost of materials and other |
1,201.3 |
722.3 |
|||||
Direct operating expenses (exclusive of depreciation and amortization as reflected below) |
89.2 |
88.3 |
|||||
Major schedule turnaround expenses |
12.9 |
29.4 |
|||||
Depreciation and amortization |
33.3 |
30.9 |
|||||
Gross profit (loss) |
86.8 |
(36.9) |
|||||
Add: |
|||||||
Direct operating expenses (exclusive of depreciation and amortization as reflected below) |
89.2 |
88.3 |
|||||
Major schedule turnaround expenses |
12.9 |
29.4 |
|||||
Depreciation and amortization |
33.3 |
30.9 |
|||||
Refining Margin |
222.2 |
111.7 |
|||||
FIFO impact, unfavorable |
0.3 |
8.8 |
|||||
Refining Margin adjusted for FIFO impact |
$ |
222.5 |
$ |
120.5 |
The calculation of refining margin per crude oil throughput barrel and refining margin adjusted for FIFO impact per crude oil throughput barrel for the three months ended March 31, 2017 and 2016 is as follows:
Petroleum Segment Operating Data |
|||||
Three Months Ended March 31, | |||||
2017 |
2016 | ||||
Total crude oil throughput barrels per day |
214,369 |
184,155 |
|||
Days in the period |
90 |
91 |
|||
Total crude oil throughput barrels |
19,293,210 |
16,758,105 |
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions, except for $ per barrel data) | |||||||
Refining Margin |
$ |
222.2 |
$ |
111.7 |
|||
Divided by: crude oil throughput barrels |
19.3 |
16.8 |
|||||
Refining Margin per crude oil throughput barrel |
$ |
11.52 |
$ |
6.67 |
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions, except for $ per barrel data) | |||||||
Refining Margin adjusted for FIFO impact |
$ |
222.5 |
$ |
120.5 |
|||
Divided by: crude oil throughput barrels |
19.3 |
16.8 |
|||||
Refining Margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
11.54 |
$ |
7.19 |
Coffeyville Refinery |
|||||
Three Months Ended March 31, | |||||
2017 |
2016 | ||||
Total crude oil throughput barrels per day |
130,759 |
106,365 |
|||
Days in the period |
90 |
91 |
|||
Total crude oil throughput barrels |
11,768,310 |
9,679,215 |
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions, except for $ per barrel data) | |||||||
Refining Margin |
$ |
142.9 |
$ |
65.3 |
|||
Divided by: crude oil throughput barrels |
11.8 |
9.7 |
|||||
Refining Margin per crude oil throughput barrel |
$ |
12.15 |
$ |
6.75 |
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions, except for $ per barrel data) | |||||||
Refining Margin adjusted for FIFO impact |
$ |
144.4 |
$ |
69.2 |
|||
Divided by: crude oil throughput barrels |
11.8 |
9.7 |
|||||
Refining Margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
12.28 |
$ |
7.15 |
Wynnewood Refinery |
|||||
Three Months Ended March 31, | |||||
2017 |
2016 | ||||
Total crude oil throughput barrels per day |
83,610 |
77,790 |
|||
Days in the period |
90 |
91 |
|||
Total crude oil throughput barrels |
7,524,900 |
7,078,890 |
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions, except for $ per barrel data) | |||||||
Refining Margin |
$ |
78.0 |
$ |
45.4 |
|||
Divided by: crude oil throughput barrels |
7.5 |
7.1 |
|||||
Refining Margin per crude oil throughput barrel |
$ |
10.36 |
$ |
6.41 |
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions, except for $ per barrel data) | |||||||
Refining Margin adjusted for FIFO impact |
$ |
76.9 |
$ |
50.2 |
|||
Divided by: crude oil throughput barrels |
7.5 |
7.1 |
|||||
Refining Margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
10.21 |
$ |
7.09 |
EBITDA and Adjusted EBITDA. EBITDA represents net income (loss) attributable to CVR Energy stockholders before consolidated (i) interest expense and other financing costs, net of interest income, (ii) income tax expense (benefit), and (iii) depreciation and amortization, less the portion of these adjustments attributable to non-controlling interest. Adjusted EBITDA represents EBITDA adjusted for, as applicable, consolidated (i) FIFO impact (favorable) unfavorable; (ii) loss on extinguishment of debt; (iii) major scheduled turnaround expenses (that many of our competitors capitalize and thereby exclude from their measures of EBITDA and adjusted EBITDA); (iv) (gain) loss on derivatives, net; (v) current period settlements on derivative contracts; (vi) business interruption insurance recovery and (vii) transaction expenses associated with the East Dubuque Merger, less the portion of these adjustments attributable to non-controlling interest. EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be substituted for net income (loss) or cash flow from operations. Management believes that EBITDA and Adjusted EBITDA enable investors to better understand and evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently. EBITDA and Adjusted EBITDA represent EBITDA and Adjusted EBITDA that is attributable to CVR Energy stockholders.
A reconciliation of net income attributable to CVR Energy stockholders to EBITDA and EBITDA to Adjusted EBITDA for the three months ended March 31, 2017 and 2016 is as follows:
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions) | |||||||
Net income (loss) attributable to CVR Energy stockholders |
$ |
22.2 |
$ |
(16.2) |
|||
Add: |
|||||||
Interest expense and other financing costs, net of interest income |
26.8 |
11.9 |
|||||
Income tax expense (benefit) |
14.8 |
(21.8) |
|||||
Depreciation and amortization |
51.1 |
40.0 |
|||||
Adjustments attributable to noncontrolling interest |
(35.9) |
(18.4) |
|||||
EBITDA |
79.0 |
(4.5) |
|||||
Add: |
|||||||
FIFO impact, unfavorable |
0.3 |
8.8 |
|||||
Major scheduled turnaround expenses |
12.9 |
29.4 |
|||||
(Gain) loss on derivatives, net |
(12.2) |
1.2 |
|||||
Current period settlement on derivative contracts (1) |
1.2 |
21.4 |
|||||
Expenses associated with the East Dubuque Merger (2) |
— |
1.2 |
|||||
Adjustments attributable to noncontrolling interest |
(0.8) |
(21.3) |
|||||
Adjusted EBITDA |
$ |
80.4 |
$ |
36.2 |
Petroleum and Nitrogen Fertilizer EBITDA and Adjusted EBITDA. EBITDA by operating segment represents net income (loss) before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA by operating segment represents EBITDA by operating segment adjusted for, as applicable (i) FIFO impact (favorable) unfavorable; (ii) loss on extinguishment of debt; (iii) major scheduled turnaround expenses (that many of our competitors capitalize and thereby exclude from their measures of EBITDA and adjusted EBITDA); (iv) (gain) loss on derivatives, net; (v) current period settlements on derivative contracts; (vi) transaction expenses associated with the East Dubuque Merger and (vii) business interruption insurance recovery, less the portion of these adjustments attributable to noncontrolling interest. We present Adjusted EBITDA by operating segment because it is the starting point for CVR Refining's and CVR Partners' calculation of available cash for distribution. EBITDA and Adjusted EBITDA by operating segment are not recognized terms under GAAP and should not be substituted for net income (loss) as a measure of performance. Management believes that EBITDA and Adjusted EBITDA by operating segment enable investors to better understand CVR Refining's and CVR Partners' ability to make distributions to their common unitholders, help investors evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.
A reconciliation of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA for the Petroleum and Nitrogen Fertilizer segments for the three months ended March 31, 2017 and 2016 is as follows:
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions) | |||||||
Petroleum: |
|||||||
Petroleum net income (loss) |
$ |
67.0 |
$ |
(68.0) |
|||
Add: |
|||||||
Interest expense and other financing costs, net of interest income |
11.2 |
10.8 |
|||||
Income tax expense |
— |
— |
|||||
Depreciation and amortization |
34.1 |
31.5 |
|||||
Petroleum EBITDA |
112.3 |
(25.7) |
|||||
Add: |
|||||||
FIFO impact, unfavorable |
0.3 |
8.8 |
|||||
Major scheduled turnaround expenses |
12.9 |
29.4 |
|||||
(Gain) loss on derivatives, net |
(12.2) |
1.2 |
|||||
Current period settlements on derivative contracts (1) |
1.2 |
21.4 |
|||||
Adjusted Petroleum EBITDA |
$ |
114.5 |
$ |
35.1 |
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
(in millions) | |||||||
Nitrogen Fertilizer: |
|||||||
Nitrogen fertilizer net income (loss) |
$ |
(10.3) |
$ |
18.0 |
|||
Add: |
|||||||
Interest expense and other financing costs, net |
15.7 |
1.7 |
|||||
Income tax expense |
— |
— |
|||||
Depreciation and amortization |
15.4 |
7.0 |
|||||
Nitrogen Fertilizer EBITDA |
20.8 |
26.7 |
|||||
Add: |
|||||||
Expenses associated with the East Dubuque Merger (2) |
— |
1.2 |
|||||
Adjusted Nitrogen Fertilizer EBITDA |
$ |
20.8 |
$ |
27.9 |
|||
(1) |
Represents the portion of gain (loss) on derivatives, net related to contracts that matured during the respective periods and settled with counterparties. There are no premiums paid or received at inception of the derivative contracts and upon settlement, there is no cost recovery associated with these contracts. |
(2) |
On April 1, 2016, CVR Partners completed the East Dubuque Merger. CVR Partners incurred legal and other professional fees and other merger related expenses that are referred to herein as transaction expenses associated with the East Dubuque Merger, which are included in selling, general and administrative expenses. |
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, April 13, 2017 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced that it will release its 2017 first quarter results on Thursday, April 27, before the open of New York Stock Exchange trading. Chief Executive Officer Jack Lipinski and other executives will host a teleconference call for analysts and investors on April 27 at 3 p.m. Eastern.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/20616. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/20616. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13659740.
CVR Energy's 2017 first quarter earnings news release will be distributed via PR Newswire and posted at www.CVREnergy.com.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks CVR Energy, Inc. (281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Brandee Stephens
CVR Energy, Inc.
(281) 207-3516
MediaRelations@CVREnergy.com
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, Feb. 16, 2017 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced full year 2016 net income of $24.7 million, or 28 cents per diluted share, on net sales of $4,782.4 million, compared to net income for full year 2015 of $169.6 million, or $1.95 per diluted share, on net sales of $5,432.5 million. Full year 2016 adjusted EBITDA, a non-GAAP financial measure, was $181.6 million compared to full year 2015 adjusted EBITDA of $498.8 million.
For the fourth quarter of 2016, the company reported net income of $7.1 million, or 8 cents per diluted share, on net sales of $1,353.4 million, compared to a fourth quarter 2015 net loss of $45 million, or 52 cents per diluted share, on net sales of $1,010.6 million.
Fourth quarter 2016 adjusted EBITDA was $22.8 million compared to adjusted EBITDA of $35.6 million for the same period a year earlier.
"CVR Refining's Coffeyville and Wynnewood refineries performed well during the 2016 fourth quarter, posting a combined crude throughput of 207,422 barrels per day (bpd)," said Jack Lipinski, CVR Energy's chief executive officer. "CVR Partners' Coffeyville and East Dubuque facilities also recorded high on-stream rates for the quarter.
"CVR Energy's fourth quarter results were negatively impacted by seasonally weak refining margins and continued high Renewable Identification Number (RIN) expenses," Lipinski said. "In addition, low nitrogen fertilizer pricing and a decrease in ammonia shipments due to unfavorable application conditions further impacted results."
CVR Energy also announced a fourth quarter 2016 cash dividend of 50 cents per share. The dividend, as declared by CVR Energy's Board of Directors, will be paid on March 6, 2017, to stockholders of record on Feb. 27, 2017.
CVR Energy's fourth quarter cash dividend brings the cumulative cash dividends paid or declared for the 2016 full year to $2.00 per share.
Today, CVR Refining and CVR Partners announced that the partnerships will not pay a cash distribution for the 2016 fourth quarter.
Petroleum Business
The petroleum business, which is operated by CVR Refining and includes the Coffeyville and Wynnewood refineries, reported fourth quarter 2016 operating income of $15.3 million, on net sales of $1,269.4 million, compared to a fourth quarter 2015 operating loss of $135.5 million, on net sales of $948.3 million.
Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $7.32 in the 2016 fourth quarter, compared to $8.96 during the same period in 2015. Direct operating expenses (exclusive of depreciation and amortization), excluding major scheduled turnaround expenses, per crude oil throughput barrel, for the 2016 fourth quarter were $4.96, compared to $7.04 in the fourth quarter of 2015.
Fourth quarter 2016 throughputs of crude oil and all other feedstocks and blendstocks totaled 223,266 bpd, compared to fourth quarter 2015 throughputs of crude oil and all other feedstocks and blendstocks of 172,364 bpd.
Nitrogen Fertilizers Business
The fertilizer business, which is operated by CVR Partners and includes the Coffeyville and East Dubuque fertilizer facilities, reported fourth quarter 2016 operating income of $1.0 million on net sales of $84.9 million, compared to operating income of $20.4 million on net sales of $66.0 million for the fourth quarter of 2015.
For the fourth quarter of 2016, consolidated average realized gate prices for UAN and ammonia were $147 per ton and $352 per ton, respectively. Average realized gate prices for UAN and ammonia for the Coffeyville facility were $221 per ton and $479 per ton, respectively, for the same period in 2015.
CVR Partners' fertilizer facilities produced a combined 207,600 tons of ammonia and purchased an additional 2,000 tons of ammonia during the fourth quarter of 2016, of which 62,600 net tons were available for sale while the rest was upgraded to other fertilizer products, including 330,700 tons of UAN. In the 2015 fourth quarter, the Coffeyville facility produced 116,100 tons of ammonia, of which 6,100 net tons were available for sale while the remainder was upgraded to 270,500 tons of UAN.
CVR Partners' results include the results of the East Dubuque fertilizer facility beginning April 1, 2016.
Cash and Debt
Consolidated cash and cash equivalents, which included $314.1 million for CVR Refining and $55.6 million for CVR Partners, was $735.8 million at Dec. 31, 2016. Consolidated total debt was $1,164.6 million at Dec. 31, 2016. The company had no debt exclusive of CVR Refining's and CVR Partners' debt.
Fourth Quarter 2016 Earnings Conference Call
CVR Energy previously announced that it will host its fourth quarter 2016 Earnings Conference Call for analysts and investors on Thursday, Feb. 16, at 3 p.m. Eastern. The Earnings Conference Call may also include discussion of company developments, forward-looking information and other material information about business and financial matters.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/19478. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/19478. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13653924.
Forward-Looking Statements
This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "explore," "evaluate," "intend," "may," "might," "plan," "potential," "predict," "seek," "should," or "will," or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. For a discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings. These risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. CVR Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Brandee Stephens
CVR Energy, Inc.
(281) 207-3516
MediaRelations@CVREnergy.com
CVR Energy, Inc. | |||||||||||||||
Financial and Operational Data (all information in this release is unaudited other than the statements of operations and cash flow data for the year ended December 31, 2015 and the balance sheet data as of December 31, 2015). | |||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Consolidated Statement of Operations Data: |
|||||||||||||||
Net sales |
$ |
1,353.4 |
$ |
1,010.6 |
$ |
4,782.4 |
$ |
5,432.5 |
|||||||
Operating costs and expenses: |
|||||||||||||||
Cost of materials and other |
1,128.1 |
847.9 |
3,847.5 |
4,190.4 |
|||||||||||
Direct operating expenses(1) |
132.6 |
212.1 |
541.8 |
584.7 |
|||||||||||
Depreciation and amortization |
49.9 |
38.7 |
184.5 |
156.4 |
|||||||||||
Cost of sales |
1,310.6 |
1,098.7 |
4,573.8 |
4,931.5 |
|||||||||||
Flood insurance recovery |
— |
— |
— |
(27.3) |
|||||||||||
Selling, general and administrative expenses(1) |
27.5 |
20.4 |
109.1 |
99.0 |
|||||||||||
Depreciation and amortization |
2.4 |
2.2 |
8.6 |
7.7 |
|||||||||||
Operating income (loss) |
12.9 |
(110.7) |
90.9 |
421.6 |
|||||||||||
Interest expense and other financing costs |
(27.1) |
(11.9) |
(83.9) |
(48.4) |
|||||||||||
Interest income |
0.2 |
0.2 |
0.7 |
1.0 |
|||||||||||
Gain (loss) on derivatives, net |
(14.6) |
23.6 |
(19.4) |
(28.6) |
|||||||||||
Gain (loss) on extinguishment of debt |
0.2 |
— |
(4.9) |
— |
|||||||||||
Other income, net |
0.3 |
0.2 |
5.7 |
36.7 |
|||||||||||
Income (loss) before income tax expense (benefit) |
(28.1) |
(98.6) |
(10.9) |
382.3 |
|||||||||||
Income tax expense (benefit) |
(22.1) |
(20.7) |
(19.8) |
84.5 |
|||||||||||
Net income (loss) |
(6.0) |
(77.9) |
8.9 |
297.8 |
|||||||||||
Less: Net income (loss) attributable to noncontrolling interest |
(13.1) |
(32.9) |
(15.8) |
128.2 |
|||||||||||
Net income (loss) attributable to CVR Energy stockholders |
$ |
7.1 |
$ |
(45.0) |
$ |
24.7 |
$ |
169.6 |
|||||||
Basic and diluted earnings (loss) per share |
$ |
0.08 |
$ |
(0.52) |
$ |
0.28 |
$ |
1.95 |
|||||||
Dividends declared per share |
$ |
0.50 |
$ |
0.50 |
$ |
2.00 |
$ |
2.00 |
|||||||
Adjusted EBITDA* |
$ |
22.8 |
$ |
35.6 |
$ |
181.6 |
$ |
498.8 |
|||||||
Adjusted net income (loss)* |
$ |
4.4 |
$ |
(4.3) |
$ |
41.5 |
$ |
235.1 |
|||||||
Adjusted net income (loss) per diluted share* |
$ |
0.05 |
$ |
(0.05) |
$ |
0.48 |
$ |
2.71 |
|||||||
Weighted-average common shares outstanding - basic and diluted |
86.8 |
86.8 |
86.8 |
86.8 |
|||||||||||
* See "Use of Non-GAAP Financial Measures" below. | |||||||||||||||
(1) |
Direct operating expenses and selling, general and administrative expenses for the three months and years ended December 31, 2016 and 2015 are shown exclusive of depreciation and amortization, which amounts are presented separately below direct operating expenses and selling, general and administrative expenses. |
As of December 31, 2016 |
As of December 31, 2015 | ||||||
(audited) | |||||||
(in millions) | |||||||
Balance Sheet Data: |
|||||||
Cash and cash equivalents |
$ |
735.8 |
$ |
765.1 |
|||
Working capital(1) |
749.6 |
789.0 |
|||||
Total assets(1) |
4,050.2 |
3,299.4 |
|||||
Total debt, including current portion(1) |
1,164.6 |
667.1 |
|||||
Total CVR stockholders' equity |
858.1 |
984.1 |
|||||
(1) |
Prior period amounts have been retrospectively adjusted for Accounting Standard Update No. 2015-03, which requires that costs incurred to issue debt be presented in the balance sheet as a direct reduction form the carrying value of the debt. |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Cash Flow Data: |
|||||||||||||||
Net cash flow provided by (used in): |
|||||||||||||||
Operating activities |
$ |
48.6 |
$ |
(75.5) |
$ |
267.5 |
$ |
536.8 |
|||||||
Investing activities |
(29.4) |
(76.8) |
(201.4) |
(150.6) |
|||||||||||
Financing activities |
(46.0) |
(94.6) |
(95.4) |
(374.8) |
|||||||||||
Net cash flow |
$ |
(26.8) |
$ |
(246.9) |
$ |
(29.3) |
$ |
11.4 |
Segment Information
Our operations are organized into two reportable segments, Petroleum and Nitrogen Fertilizer. Our operations that are not included in the Petroleum and Nitrogen Fertilizer segments are included in the Corporate and Other segment (along with elimination of intersegment transactions). The Petroleum segment is operated by CVR Refining, LP ("CVR Refining"), in which we own a majority interest as well as serve as the general partner. The Petroleum segment includes the operations of the Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with the crude oil gathering and pipeline systems. Detailed operating results for the Petroleum segment for the quarter and year ended December 31, 2016 are included in CVR Refining's press release dated February 16, 2017. The Nitrogen Fertilizer segment is operated by CVR Partners, LP ("CVR Partners"), in which we own approximately 34% of the common units as of December 31, 2016 and serve as the general partner. On April 1, 2016, CVR Partners completed the merger (the "East Dubuque Merger") with CVR Nitrogen, LP (formerly known as East Dubuque Nitrogen Partners, L.P. and also formerly known as Rentech Nitrogen Partners L.P.) and CVR Nitrogen GP, LLC (formerly known as East Dubuque Nitrogen GP, LLC and also formerly known as Rentech Nitrogen GP, LLC). The Nitrogen Fertilizer segment consists of a nitrogen fertilizer manufacturing facility located in Coffeyville, Kansas, and as of April 1, 2016, a nitrogen fertilizer manufacturing facility located in East Dubuque, Illinois. Detailed operating results for the Nitrogen Fertilizer segment for the quarter and year ended December 31, 2016 are included in CVR Partners' press release dated February 16, 2017.
Petroleum |
Nitrogen |
Corporate and |
Consolidated | |||||||||||||
(in millions) | ||||||||||||||||
Three Months Ended December 31, 2016 |
||||||||||||||||
Net sales |
$ |
1,269.4 |
$ |
84.9 |
$ |
(0.9) |
$ |
1,353.4 |
||||||||
Cost of materials and other |
1,107.5 |
21.5 |
(0.9) |
1,128.1 |
||||||||||||
Direct operating expenses(1) |
94.7 |
37.9 |
— |
132.6 |
||||||||||||
Major scheduled turnaround expenses |
— |
— |
— |
— |
||||||||||||
Selling, general and administrative |
18.5 |
7.3 |
1.7 |
27.5 |
||||||||||||
Depreciation and amortization |
33.4 |
17.2 |
1.7 |
52.3 |
||||||||||||
Operating income (loss) |
$ |
15.3 |
$ |
1.0 |
$ |
(3.4) |
$ |
12.9 |
||||||||
Capital expenditures |
$ |
18.9 |
$ |
5.9 |
$ |
3.2 |
$ |
28.0 |
||||||||
Year Ended December 31, 2016 |
||||||||||||||||
Net sales |
$ |
4,431.3 |
$ |
356.3 |
$ |
(5.2) |
$ |
4,782.4 |
||||||||
Cost of materials and other |
3,759.2 |
93.7 |
(5.4) |
3,847.5 |
||||||||||||
Direct operating expenses(1) |
361.9 |
141.7 |
0.1 |
503.7 |
||||||||||||
Major scheduled turnaround expenses |
31.5 |
6.6 |
— |
38.1 |
||||||||||||
Selling, general and administrative |
71.9 |
29.3 |
7.9 |
109.1 |
||||||||||||
Depreciation and amortization |
129.0 |
58.2 |
5.9 |
193.1 |
||||||||||||
Operating income (loss) |
$ |
77.8 |
$ |
26.8 |
$ |
(13.7) |
$ |
90.9 |
||||||||
Capital expenditures |
$ |
102.3 |
$ |
23.2 |
$ |
7.2 |
$ |
132.7 |
Petroleum |
Nitrogen Fertilizer (CVR |
Corporate and |
Consolidated | |||||||||||||
(in millions) | ||||||||||||||||
Three Months Ended December 31, 2015 |
||||||||||||||||
Net sales |
$ |
948.3 |
$ |
66.0 |
$ |
(3.7) |
$ |
1,010.6 |
||||||||
Cost of materials and other |
842.8 |
9.5 |
(4.4) |
847.9 |
||||||||||||
Direct operating expenses(1) |
103.8 |
23.3 |
0.1 |
127.2 |
||||||||||||
Major scheduled turnaround expenses |
84.9 |
— |
— |
84.9 |
||||||||||||
Flood insurance recovery(2) |
— |
— |
— |
— |
||||||||||||
Selling, general and administrative |
20.2 |
5.6 |
(5.4) |
20.4 |
||||||||||||
Depreciation and amortization |
32.1 |
7.2 |
1.6 |
40.9 |
||||||||||||
Operating income (loss) |
$ |
(135.5) |
$ |
20.4 |
$ |
4.4 |
$ |
(110.7) |
||||||||
Capital expenditures |
$ |
71.1 |
$ |
4.6 |
$ |
1.1 |
$ |
76.8 |
||||||||
Year Ended December 31, 2015 |
||||||||||||||||
Net sales |
$ |
5,161.9 |
$ |
289.2 |
$ |
(18.6) |
$ |
5,432.5 |
||||||||
Cost of materials and other |
4,143.6 |
65.2 |
(18.4) |
4,190.4 |
||||||||||||
Direct operating expenses(1) |
376.3 |
99.1 |
0.1 |
475.5 |
||||||||||||
Major scheduled turnaround expenses |
102.2 |
7.0 |
— |
109.2 |
||||||||||||
Flood insurance recovery(2) |
(27.3) |
— |
— |
(27.3) |
||||||||||||
Selling, general and administrative |
75.2 |
20.8 |
3.0 |
99.0 |
||||||||||||
Depreciation and amortization |
130.2 |
28.4 |
5.5 |
164.1 |
||||||||||||
Operating income (loss) |
$ |
361.7 |
$ |
68.7 |
$ |
(8.8) |
$ |
421.6 |
||||||||
Capital expenditures |
$ |
194.7 |
$ |
17.0 |
$ |
7.0 |
$ |
218.7 |
||||||||
(1) |
Excluding turnaround expenses. |
(2) |
Represents an insurance recovery from Coffeyville Resources Refining and Marketing, LLC's ("CRRM") environmental insurance carriers as a result of the flood and crude oil discharge at the Coffeyville refinery on June/July 2007. |
Petroleum |
Nitrogen Partners) |
Corporate and |
Consolidated | |||||||||||||
(in millions) | ||||||||||||||||
December 31, 2016 |
||||||||||||||||
Cash and cash equivalents |
$ |
314.1 |
$ |
55.6 |
$ |
366.1 |
$ |
735.8 |
||||||||
Total assets |
2,331.9 |
1,312.2 |
406.1 |
4,050.2 |
||||||||||||
Total debt, including current portion |
541.5 |
623.1 |
— |
1,164.6 |
||||||||||||
December 31, 2015 |
||||||||||||||||
Cash and cash equivalents |
$ |
187.3 |
$ |
50.0 |
$ |
527.8 |
$ |
765.1 |
||||||||
Total assets(1) |
2,189.0 |
536.3 |
574.1 |
3,299.4 |
||||||||||||
Total debt, including current portion(1) |
573.8 |
125.0 |
(31.5) |
667.3 |
||||||||||||
(1) |
Prior period amounts have been retrospectively adjusted for Accounting Standard Update No. 2015-03, which requires that costs incurred to issue debt be presented in the balance sheet as a direct reduction form the carrying value of the debt. |
Petroleum Segment Operating Data
The following tables set forth information about our consolidated Petroleum segment operated by CVR Refining, of which we own a majority interest and serve as the general partner, and the Coffeyville and Wynnewood refineries. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Petroleum segment for the quarter and year ended December 31, 2016 are included in CVR Refining's press release dated February 16, 2017.
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum Segment Summary Financial Results: |
|||||||||||||||
Net sales |
$ |
1,269.4 |
$ |
948.3 |
$ |
4,431.3 |
$ |
5,161.9 |
|||||||
Operating costs and expenses: |
|||||||||||||||
Cost of materials and other |
1,107.5 |
842.8 |
3,759.2 |
4,143.6 |
|||||||||||
Direct operating expenses(1) |
94.7 |
103.8 |
361.9 |
376.3 |
|||||||||||
Major scheduled turnaround expenses |
— |
84.9 |
31.5 |
102.2 |
|||||||||||
Depreciation and amortization |
32.6 |
31.5 |
126.3 |
128.0 |
|||||||||||
Cost of sales |
1,234.8 |
1,063.0 |
4,278.9 |
4,750.1 |
|||||||||||
Flood insurance recovery |
— |
— |
— |
(27.3) |
|||||||||||
Selling, general and administrative expenses(1) |
18.5 |
20.2 |
71.9 |
75.2 |
|||||||||||
Depreciation and amortization |
0.8 |
0.6 |
2.7 |
2.2 |
|||||||||||
Operating income (loss) |
15.3 |
(135.5) |
77.8 |
361.7 |
|||||||||||
Interest expense and other financing costs |
(11.7) |
(10.5) |
(43.4) |
(42.6) |
|||||||||||
Interest income |
0.1 |
0.1 |
0.1 |
0.4 |
|||||||||||
Gain (loss) on derivatives, net |
(14.6) |
23.6 |
(19.4) |
(28.6) |
|||||||||||
Other income, net |
0.2 |
0.1 |
0.2 |
0.3 |
|||||||||||
Income (loss) before income tax expense |
(10.7) |
(122.2) |
15.3 |
291.2 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Net income (loss) |
$ |
(10.7) |
$ |
(122.2) |
$ |
15.3 |
$ |
291.2 |
|||||||
Gross profit (loss) |
$ |
34.6 |
$ |
(114.7) |
$ |
152.4 |
$ |
439.1 |
|||||||
Refining margin* |
$ |
161.9 |
$ |
105.5 |
$ |
672.1 |
$ |
1,018.3 |
|||||||
Refining margin adjusted for FIFO impact* |
$ |
139.5 |
$ |
132.1 |
$ |
620.0 |
$ |
1,078.6 |
|||||||
Adjusted Petroleum EBITDA* |
$ |
27.7 |
$ |
16.4 |
$ |
222.8 |
$ |
602.0 |
|||||||
* See "Use of Non-GAAP Financial Measures" below. | |
(1) |
Direct operating expenses for the three months and years ended December 31, 2016 and 2015 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses. Selling, general and administrative expenses for the three months and years ended December 31, 2016 and 2015 are shown exclusive of depreciation and amortization, which amounts are presented separately below selling, general and administrative expenses. |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(dollars per barrel) | |||||||||||||||
Petroleum Segment Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Gross profit (loss) |
$ |
1.81 |
$ |
(7.80) |
$ |
2.10 |
$ |
6.23 |
|||||||
Gross profit (loss) excluding flood insurance recovery* |
1.81 |
(7.80) |
2.10 |
5.84 |
|||||||||||
Refining margin* |
8.49 |
7.16 |
9.27 |
14.45 |
|||||||||||
FIFO impact (favorable) unfavorable |
(1.17) |
1.80 |
(0.72) |
0.86 |
|||||||||||
Refining margin adjusted for FIFO impact* |
7.32 |
8.96 |
8.55 |
15.31 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
4.96 |
12.81 |
5.43 |
6.79 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
4.96 |
7.04 |
4.99 |
5.34 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
4.64 |
12.34 |
5.08 |
6.40 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
4.64 |
$ |
6.79 |
$ |
4.67 |
$ |
5.04 |
|||||||
Barrels sold (barrels per day) |
221,921 |
166,168 |
211,643 |
204,708 |
|||||||||||
* See "Use of Non-GAAP Financial Measures" below. |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||||||||||||||
Petroleum Segment Summary Refining Throughput and Production Data (bpd): |
|||||||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||||||
Sweet |
185,154 |
82.9 |
% |
151,215 |
87.7 |
% |
177,256 |
84.8 |
% |
176,097 |
86.0 |
% | |||||||||||||||
Medium |
3,160 |
1.4 |
% |
209 |
0.1 |
% |
2,525 |
1.2 |
% |
2,460 |
1.2 |
% | |||||||||||||||
Heavy sour |
19,108 |
8.6 |
% |
8,715 |
5.1 |
% |
18,261 |
8.7 |
% |
14,520 |
7.1 |
% | |||||||||||||||
Total crude oil throughput |
207,422 |
92.9 |
% |
160,139 |
92.9 |
% |
198,042 |
94.7 |
% |
193,077 |
94.3 |
% | |||||||||||||||
All other feedstocks and blendstocks |
15,844 |
7.1 |
% |
12,225 |
7.1 |
% |
11,077 |
5.3 |
% |
11,672 |
5.7 |
% | |||||||||||||||
Total throughput |
223,266 |
100.0 |
% |
172,364 |
100.0 |
% |
209,119 |
100.0 |
% |
204,749 |
100.0 |
% | |||||||||||||||
Production: |
|||||||||||||||||||||||||||
Gasoline |
114,682 |
51.1 |
% |
80,111 |
46.3 |
% |
108,762 |
51.9 |
% |
99,961 |
48.5 |
% | |||||||||||||||
Distillate |
91,021 |
40.5 |
% |
70,201 |
40.6 |
% |
85,092 |
40.6 |
% |
85,953 |
41.7 |
% | |||||||||||||||
Other (excluding internally produced fuel) |
18,782 |
8.4 |
% |
22,638 |
13.1 |
% |
15,751 |
7.5 |
% |
20,074 |
9.8 |
% | |||||||||||||||
Total refining production (excluding internally produced fuel) |
224,485 |
100.0 |
% |
172,950 |
100.0 |
% |
209,605 |
100.0 |
% |
205,988 |
100.0 |
% | |||||||||||||||
Product price (dollars per gallon): |
|||||||||||||||||||||||||||
Gasoline |
$ |
1.42 |
$ |
1.32 |
$ |
1.34 |
$ |
1.61 |
|||||||||||||||||||
Distillate |
1.52 |
1.34 |
1.36 |
1.62 |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Market Indicators (dollars per barrel): |
|||||||||||||||
West Texas Intermediate (WTI) NYMEX |
$ |
49.29 |
$ |
42.16 |
$ |
43.47 |
$ |
48.76 |
|||||||
Crude Oil Differentials: |
|||||||||||||||
WTI less WTS (light/medium sour) |
0.92 |
0.35 |
0.85 |
(0.28) |
|||||||||||
WTI less WCS (heavy sour) |
15.04 |
14.45 |
13.95 |
13.20 |
|||||||||||
NYMEX Crack Spreads: |
|||||||||||||||
Gasoline |
12.96 |
12.79 |
15.42 |
19.89 |
|||||||||||
Heating Oil |
16.45 |
15.21 |
13.89 |
20.93 |
|||||||||||
NYMEX 2-1-1 Crack Spread |
14.70 |
14.00 |
14.66 |
20.41 |
|||||||||||
PADD II Group 3 Product Basis: |
|||||||||||||||
Gasoline |
(3.70) |
0.26 |
(3.62) |
(2.12) |
|||||||||||
Ultra Low Sulfur Diesel |
(2.55) |
(0.44) |
(0.92) |
(2.02) |
|||||||||||
PADD II Group 3 Product Crack Spread: |
|||||||||||||||
Gasoline |
9.28 |
13.05 |
11.82 |
17.76 |
|||||||||||
Ultra Low Sulfur Diesel |
13.91 |
14.76 |
12.96 |
18.91 |
|||||||||||
PADD II Group 3 2-1-1 |
11.60 |
13.91 |
12.39 |
18.34 |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Coffeyville Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
854.7 |
$ |
522.6 |
$ |
2,948.9 |
$ |
3,220.6 |
|||||||
Cost of materials and other |
750.6 |
490.5 |
2,513.9 |
2,626.1 |
|||||||||||
Direct operating expenses(1) |
52.0 |
53.5 |
196.4 |
209.1 |
|||||||||||
Major scheduled turnaround expenses |
— |
84.9 |
31.5 |
102.2 |
|||||||||||
Flood insurance recovery |
— |
— |
— |
(27.3) |
|||||||||||
Depreciation and amortization |
18.4 |
17.5 |
69.7 |
72.1 |
|||||||||||
Gross profit (loss) |
33.7 |
(123.8) |
137.4 |
238.4 |
|||||||||||
Add: |
|||||||||||||||
Direct operating expenses(1) |
52.0 |
53.5 |
196.4 |
209.1 |
|||||||||||
Major scheduled turnaround expenses |
— |
84.9 |
31.5 |
102.2 |
|||||||||||
Flood insurance recovery |
— |
— |
— |
(27.3) |
|||||||||||
Depreciation and amortization |
18.4 |
17.5 |
69.7 |
72.1 |
|||||||||||
Refining Margin* |
104.1 |
32.1 |
435.0 |
594.5 |
|||||||||||
FIFO impact, (favorable) unfavorable |
(15.4) |
17.4 |
(37.8) |
38.0 |
|||||||||||
Refining Margin adjusted for FIFO impact* |
$ |
88.7 |
$ |
49.5 |
$ |
397.2 |
$ |
632.5 |
|||||||
Coffeyville Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Gross profit (loss) |
$ |
2.76 |
$ |
(17.42) |
$ |
3.03 |
$ |
5.77 |
|||||||
Gross profit (loss) excluding flood insurance recovery* |
2.76 |
(17.42) |
3.03 |
5.11 |
|||||||||||
Refining margin* |
8.55 |
4.52 |
9.57 |
14.37 |
|||||||||||
FIFO impact (favorable) unfavorable |
(1.26) |
2.45 |
(0.83) |
0.92 |
|||||||||||
Refining margin adjusted for FIFO impact* |
7.29 |
6.97 |
8.74 |
15.29 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
4.27 |
19.48 |
5.02 |
7.53 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
4.27 |
7.53 |
4.32 |
5.06 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
3.84 |
18.46 |
4.54 |
6.92 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
3.84 |
$ |
7.14 |
$ |
3.92 |
$ |
4.65 |
|||||||
Barrels sold (barrels per day) |
146,930 |
81,484 |
137,047 |
123,279 |
|||||||||||
* See "Use of Non-GAAP Financial Measures" below. | |
(1) |
Direct operating expenses for the three months and years ended December 31, 2016 and 2015 are shown exclusive of depreciation and amortization, which amounts are presented separately below direct operating expenses. |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||||||||||
Coffeyville Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
113,243 |
78.4 |
% |
68,452 |
80.7 |
% |
104,679 |
78.9 |
% |
96,727 |
79.5 |
% | |||||||||||
Medium |
— |
— |
% |
57 |
0.1 |
% |
1,229 |
0.9 |
% |
2,058 |
1.7 |
% | |||||||||||
Heavy sour |
19,108 |
13.2 |
% |
8,715 |
10.3 |
% |
18,261 |
13.8 |
% |
14,520 |
11.9 |
% | |||||||||||
Total crude oil throughput |
132,351 |
91.6 |
% |
77,224 |
91.1 |
% |
124,169 |
93.6 |
% |
113,305 |
93.1 |
% | |||||||||||
All other feedstocks and blendstocks |
12,206 |
8.4 |
% |
7,540 |
8.9 |
% |
8,453 |
6.4 |
% |
8,400 |
6.9 |
% | |||||||||||
Total throughput |
144,557 |
100.0 |
% |
84,764 |
100.0 |
% |
132,622 |
100.0 |
% |
121,705 |
100.0 |
% | |||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
75,273 |
51.1 |
% |
36,493 |
42.1 |
% |
69,303 |
51.4 |
% |
57,815 |
46.5 |
% | |||||||||||
Distillate |
60,550 |
41.1 |
% |
35,588 |
41.0 |
% |
55,790 |
41.4 |
% |
53,136 |
42.7 |
% | |||||||||||
Other (excluding internally produced fuel) |
11,446 |
7.8 |
% |
14,655 |
16.9 |
% |
9,756 |
7.2 |
% |
13,503 |
10.8 |
% | |||||||||||
Total refining production (excluding internally produced fuel) |
147,269 |
100.0 |
% |
86,736 |
100.0 |
% |
134,849 |
100.0 |
% |
124,454 |
100.0 |
% |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Wynnewood Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
413.6 |
$ |
424.6 |
$ |
1,478.0 |
$ |
1,936.9 |
|||||||
Cost of materials and other |
356.9 |
351.8 |
1,245.4 |
1,516.3 |
|||||||||||
Direct operating expenses(1) |
42.7 |
49.2 |
165.5 |
166.2 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
— |
— |
|||||||||||
Depreciation and amortization |
12.8 |
12.6 |
50.7 |
50.2 |
|||||||||||
Gross profit |
1.2 |
11.0 |
16.4 |
204.2 |
|||||||||||
Add: |
|||||||||||||||
Direct operating expenses(1) |
42.7 |
49.2 |
165.5 |
166.2 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
— |
— |
|||||||||||
Depreciation and amortization |
12.8 |
12.6 |
50.7 |
50.2 |
|||||||||||
Refining Margin* |
56.7 |
72.8 |
232.6 |
420.6 |
|||||||||||
FIFO impact, (favorable) unfavorable |
(7.0) |
9.2 |
(14.2) |
22.3 |
|||||||||||
Refining margin adjusted for FIFO impact* |
$ |
49.7 |
$ |
82.0 |
$ |
218.4 |
$ |
442.9 |
|||||||
Wynnewood Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Gross profit |
$ |
0.16 |
$ |
1.44 |
$ |
0.61 |
$ |
7.01 |
|||||||
Refining margin* |
8.20 |
9.54 |
8.60 |
14.44 |
|||||||||||
FIFO impact (favorable) unfavorable |
(1.01) |
1.20 |
(0.53) |
0.77 |
|||||||||||
Refining margin adjusted for FIFO impact* |
7.19 |
10.74 |
8.07 |
15.21 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
6.19 |
6.44 |
6.12 |
5.71 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
6.19 |
6.44 |
6.12 |
5.71 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
6.20 |
6.31 |
6.06 |
5.59 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
6.20 |
$ |
6.31 |
$ |
6.06 |
$ |
5.59 |
|||||||
Barrels sold (barrels per day) |
74,991 |
84,684 |
74,596 |
81,429 |
|||||||||||
* See "Use of Non-GAAP Financial Measures" below. | |
(1) |
Direct operating expenses for the three months and years ended December 31, 2016 and 2015 are shown exclusive of depreciation and amortization, which amounts are presented separately below direct operating expenses. |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||||||||||
Wynnewood Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
71,911 |
91.4 |
% |
82,763 |
94.5 |
% |
72,577 |
94.9 |
% |
79,370 |
95.6 |
% | |||||||||||
Medium |
3,160 |
4.0 |
% |
152 |
0.2 |
% |
1,296 |
1.7 |
% |
402 |
0.5 |
% | |||||||||||
Heavy sour |
— |
— |
% |
— |
— |
% |
— |
— |
% |
— |
— |
% | |||||||||||
Total crude oil throughput |
75,071 |
95.4 |
% |
82,915 |
94.7 |
% |
73,873 |
96.6 |
% |
79,772 |
96.1 |
% | |||||||||||
All other feedstocks and blendstocks |
3,638 |
4.6 |
% |
4,685 |
5.3 |
% |
2,624 |
3.4 |
% |
3,272 |
3.9 |
% | |||||||||||
Total throughput |
78,709 |
100.0 |
% |
87,600 |
100.0 |
% |
76,497 |
100.0 |
% |
83,044 |
100.0 |
% | |||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
39,409 |
51.0 |
% |
43,618 |
50.6 |
% |
39,459 |
52.8 |
% |
42,146 |
51.7 |
% | |||||||||||
Distillate |
30,471 |
39.5 |
% |
34,613 |
40.1 |
% |
29,302 |
39.2 |
% |
32,817 |
40.2 |
% | |||||||||||
Other (excluding internally produced fuel) |
7,336 |
9.5 |
% |
7,983 |
9.3 |
% |
5,995 |
8.0 |
% |
6,571 |
8.1 |
% | |||||||||||
Total refining production (excluding internally produced fuel) |
77,216 |
100.0 |
% |
86,214 |
100.0 |
% |
74,756 |
100.0 |
% |
81,534 |
100.0 |
% |
Nitrogen Fertilizer Segment Operating Data
The following tables set forth information about the Nitrogen Fertilizer segment operated by CVR Partners, of which we own approximately 34% of the common units as of December 31, 2016 and serve as the general partner. The financial and operational data for the three months and year ended December 31, 2016 include the results of the nitrogen fertilizer manufacturing facility located in East Dubuque, Illinois (the "East Dubuque Facility") beginning on April 1, 2016, the date of the closing of the acquisition. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Nitrogen Fertilizer segment for the quarter and year ended December 31, 2016 are included in CVR Partners' press release dated February 16, 2017.
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer Segment Business Financial Results: |
|||||||||||||||
Net sales |
$ |
84.9 |
$ |
66.0 |
$ |
356.3 |
$ |
289.2 |
|||||||
Cost of materials and other |
21.5 |
9.5 |
93.7 |
65.2 |
|||||||||||
Direct operating expenses(1) |
37.9 |
23.3 |
141.7 |
99.1 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
6.6 |
7.0 |
|||||||||||
Depreciation and amortization |
17.2 |
7.2 |
58.2 |
28.4 |
|||||||||||
Cost of sales |
76.6 |
40.0 |
300.2 |
199.7 |
|||||||||||
Selling, general and administrative expenses |
7.3 |
5.6 |
29.3 |
20.8 |
|||||||||||
Operating income |
1.0 |
20.4 |
26.8 |
68.7 |
|||||||||||
Interest expense and other financing costs |
(15.8) |
(1.8) |
(48.6) |
(7.0) |
|||||||||||
Gain (loss) on extinguishment of debt |
0.2 |
— |
(4.9) |
— |
|||||||||||
Other income, net |
0.1 |
0.1 |
0.1 |
0.3 |
|||||||||||
Income (loss) before income tax expense |
(14.5) |
18.7 |
(26.6) |
62.0 |
|||||||||||
Income tax expense |
— |
— |
0.3 |
— |
|||||||||||
Net income (loss) |
$ |
(14.5) |
$ |
18.7 |
$ |
(26.9) |
$ |
62.0 |
|||||||
Adjusted Nitrogen Fertilizer EBITDA* |
$ |
18.3 |
$ |
28.5 |
$ |
92.7 |
$ |
106.8 |
|||||||
* See Use of Non-GAAP Financial Measures below. | |
(1) |
Direct operating expenses for the three months and years ended December 31, 2016 and 2015 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses. |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Nitrogen Fertilizer Segment Key Operating Statistics: |
|||||||||||||||
Consolidated sales (thousand tons): |
|||||||||||||||
Ammonia |
55.7 |
5.4 |
201.4 |
32.3 |
|||||||||||
UAN |
335.1 |
240.7 |
1,237.5 |
939.5 |
|||||||||||
Consolidated product pricing at gate (dollars per ton)(1): |
|||||||||||||||
Ammonia |
$ |
352 |
$ |
479 |
$ |
376 |
$ |
521 |
|||||||
UAN |
$ |
147 |
$ |
221 |
$ |
177 |
$ |
247 |
|||||||
Consolidated production volume (thousand tons): |
|||||||||||||||
Ammonia (gross produced)(2) |
207.6 |
116.1 |
693.5 |
385.4 |
|||||||||||
Ammonia (net available for sale)(2)(3) |
62.6 |
6.1 |
183.6 |
37.3 |
|||||||||||
UAN |
330.7 |
270.5 |
1,192.6 |
928.6 |
|||||||||||
Feedstock: |
|||||||||||||||
Petroleum coke used in production (thousand tons) |
129.4 |
134.1 |
513.7 |
469.9 |
|||||||||||
Petroleum coke used in production (dollars per ton) |
$ |
18 |
$ |
23 |
$ |
15 |
$ |
25 |
|||||||
Natural gas used in production (thousands of MMBtus) |
2,124.3 |
— |
5,596.0 |
— |
|||||||||||
Natural gas used in production (dollars per MMBtu)(4) |
$ |
3.30 |
$ |
— |
$ |
2.96 |
$ |
— |
|||||||
Natural gas in cost of materials and other (thousands of MMBtus) |
1,876.2 |
— |
4,618.7 |
— |
|||||||||||
Natural gas in cost of materials and other (dollars per MMBtus)(4) |
$ |
3.15 |
$ |
— |
$ |
2.87 |
$ |
— |
|||||||
Coffeyville Facility on-stream factor(5): |
|||||||||||||||
Gasification |
96.1 |
% |
99.3 |
% |
96.9 |
% |
90.2 |
% | |||||||
Ammonia |
91.1 |
% |
98.8 |
% |
94.9 |
% |
87.5 |
% | |||||||
UAN |
93.1 |
% |
98.3 |
% |
93.1 |
% |
87.3 |
% | |||||||
East Dubuque Facility on-stream factors(5): |
|||||||||||||||
Ammonia |
99.7 |
% |
— |
% |
87.7 |
% |
— |
% | |||||||
UAN |
99.8 |
% |
— |
% |
87.3 |
% |
— |
% | |||||||
Market Indicators: |
|||||||||||||||
Ammonia — Southern Plains (dollars per ton) |
$ |
313 |
$ |
460 |
$ |
356 |
$ |
510 |
|||||||
Ammonia — Corn belt (dollars per ton) |
$ |
360 |
$ |
518 |
$ |
416 |
$ |
566 |
|||||||
UAN — Corn belt (dollars per ton) |
$ |
175 |
$ |
250 |
$ |
208 |
$ |
284 |
|||||||
Natural gas NYMEX (dollars per MMBtu) |
$ |
3.18 |
$ |
2.23 |
$ |
2.55 |
$ |
2.63 |
|||||||
(1) |
Product pricing at gate represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry. |
(2) |
Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represent the ammonia available for sale that was not upgraded into other fertilizer products. |
(3) |
In addition to the produced ammonia, the Nitrogen Fertilizer segment acquired approximately 2,000 and 0 tons of ammonia during the three months ended December 31, 2016 and 2015, respectively. The Nitrogen Fertilizer segment acquired approximately 10,000 and 29,300 tons of ammonia during the years ended December 31, 2016 and 2015, respectively. |
(4) |
The cost per MMBtu excludes derivative activity, when applicable. The impact of natural gas derivative activity during the periods presented was not material. |
(5) |
On-stream factor is the total number of hours operated divided by the total number of hours in the reporting period and is included as a measure of operating efficiency. |
Coffeyville Facility
Excluding the impact of the Linde air separation unit outages at the Coffeyville fertilizer facility, the on-stream factors for the three months ended December 31, 2015 would have been 100.0% for gasification, 100.0% for ammonia and 99.9% for UAN.
Excluding the impact of the full facility turnaround and the Linde air separation unit outages, the on-stream factors for the year ended December 31, 2015 would have been 99.9% for gasification, 97.7% for ammonia and 97.6% for UAN.
East Dubuque Facility
Excluding the impact of the full facility turnaround at the East Dubuque fertilizer facility, the on-stream factors at the East Dubuque fertilizer facility would have been 97.8% for ammonia and 97.1% for UAN for the post-acquisition period ended December 31, 2016.
Use of Non-GAAP Financial Measures
To supplement the Company's actual results in accordance with GAAP for the applicable periods, the Company also uses the non-GAAP financial measures noted above, which are reconciled to our GAAP-based results below. These non-GAAP financial measures should not be considered an alternative for GAAP results. The adjustments are provided to enhance an overall understanding of the Company's financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.
Adjusted net income (loss) is not a recognized term under GAAP and should not be substituted for net income (loss) as a measure of our performance but rather should be utilized as a supplemental measure of financial performance in evaluating our business. Management believes that adjusted net income (loss) provides relevant and useful information that enables external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, to better understand and evaluate our ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance. Adjusted net income (loss) per diluted share represents adjusted net income (loss) divided by weighted-average diluted shares outstanding. Adjusted net income (loss) represents net income (loss), as adjusted, that is attributable to CVR Energy stockholders.
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss): |
|||||||||||||||
Income (loss) before income tax expense (benefit) |
$ |
(28.1) |
$ |
(98.6) |
$ |
(10.9) |
$ |
382.3 |
|||||||
Adjustments: |
|||||||||||||||
FIFO impact (favorable) unfavorable |
(22.4) |
26.6 |
(52.1) |
60.3 |
|||||||||||
Share-based compensation(1) |
— |
3.7 |
— |
12.8 |
|||||||||||
Major scheduled turnaround expenses |
— |
84.9 |
38.1 |
109.2 |
|||||||||||
(Gain) loss on derivatives, net |
14.6 |
(23.6) |
19.4 |
28.6 |
|||||||||||
Current period settlement on derivative contracts(2) |
1.2 |
8.1 |
36.4 |
(26.0) |
|||||||||||
Flood insurance recovery(3) |
— |
— |
— |
(27.3) |
|||||||||||
(Gain) loss on extinguishment of debt(4) |
(0.2) |
— |
4.9 |
— |
|||||||||||
Expenses associated with the East Dubuque Merger(5) |
— |
0.8 |
3.1 |
2.3 |
|||||||||||
Insurance recovery - Business interruption(6) |
— |
— |
(2.1) |
— |
|||||||||||
Adjusted net income (loss) before income tax expense and noncontrolling interest |
(34.9) |
1.9 |
36.8 |
542.2 |
|||||||||||
Adjusted net income (loss) attributed to noncontrolling interest |
15.5 |
(0.3) |
(4.1) |
(179.8) |
|||||||||||
Income tax benefit (expense), as adjusted |
23.8 |
(5.9) |
8.8 |
(127.3) |
|||||||||||
Adjusted net income (loss) |
$ |
4.4 |
$ |
(4.3) |
$ |
41.5 |
$ |
235.1 |
|||||||
Adjusted net income (loss) per diluted share |
$ |
0.05 |
$ |
(0.05) |
$ |
0.48 |
$ |
2.71 |
Refining margin per crude oil throughput barrel is a measurement calculated as the difference between the Petroleum segment's net sales and cost of materials and other. Refining margin is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of materials and other at which they are able to sell refined products. Each of the components used in this calculation (net sales and cost of materials and other) can be taken directly from our Petroleum segment's Statements of Operations. Our calculation of refining margin may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. In order to derive the refining margin per crude oil throughput barrel, we utilize the total dollar figures for refining margin as derived above and divide by the applicable number of crude oil throughput barrels for the period. We believe that refining margin is important to enable investors to better understand and evaluate the Petroleum segment's ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance.
Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference between the Petroleum segment's net sales and cost of materials and other adjusted for FIFO impact. Refining margin adjusted for FIFO impact is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of materials and other (taking into account the impact of the utilization of FIFO) at which they are able to sell refined products. Our calculation of refining margin adjusted for FIFO impact may differ from calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. Under the FIFO accounting method, changes in crude oil prices can cause fluctuations in the inventory valuation of crude oil, work in process and finished goods, thereby resulting in a favorable FIFO impact when crude oil prices increase and an unfavorable FIFO impact when crude oil prices decrease.
The calculation of refining margin and refining margin adjusted for FIFO impact for the three months and years ended December 31, 2016 and 2015 is as follows:
Petroleum Segment Operating Data |
|||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Net Sales |
$ |
1,269.4 |
$ |
948.3 |
$ |
4,431.3 |
$ |
5,161.9 |
|||||||
Cost of materials and other |
1,107.5 |
842.8 |
3,759.2 |
4,143.6 |
|||||||||||
Direct operating expenses (exclusive of depreciation and amortization as reflected below) |
94.7 |
103.8 |
361.9 |
376.3 |
|||||||||||
Major schedule turnaround expenses |
— |
84.9 |
31.5 |
102.2 |
|||||||||||
Flood insurance recovery |
— |
— |
— |
(27.3) |
|||||||||||
Depreciation and amortization |
32.6 |
31.5 |
126.3 |
128.0 |
|||||||||||
Gross profit |
34.6 |
(114.7) |
152.4 |
439.1 |
|||||||||||
Add: |
|||||||||||||||
Direct operating expenses (exclusive of depreciation and amortization as reflected below) |
94.7 |
103.8 |
361.9 |
376.3 |
|||||||||||
Major schedule turnaround expenses |
— |
84.9 |
31.5 |
102.2 |
|||||||||||
Flood insurance recovery |
— |
— |
— |
(27.3) |
|||||||||||
Depreciation and amortization |
32.6 |
31.5 |
126.3 |
128.0 |
|||||||||||
Refining Margin |
161.9 |
105.5 |
672.1 |
1,018.3 |
|||||||||||
FIFO impact, (favorable) unfavorable |
(22.4) |
26.6 |
(52.1) |
60.3 |
|||||||||||
Refining Margin adjusted for FIFO impact |
$ |
139.5 |
$ |
132.1 |
$ |
620.0 |
$ |
1,078.6 |
The calculation of refining margin per crude oil throughput barrel and refining margin adjusted for FIFO impact per crude oil throughput barrel for the three months and years ended December 31, 2016 and 2015 is as follows:
Petroleum Segment Operating Data |
|||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Total crude oil throughput barrels per day |
207,422 |
160,139 |
198,042 |
193,077 |
|||||||||||
Days in the period |
92 |
92 |
366 |
365 |
|||||||||||
Total crude oil throughput barrels |
19,082,824 |
14,732,788 |
72,483,372 |
70,473,105 |
|||||||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining Margin |
$ |
161.9 |
$ |
105.5 |
$ |
672.1 |
$ |
1,018.3 |
|||||||
Divided by: crude oil throughput barrels |
19.1 |
14.7 |
72.5 |
70.5 |
|||||||||||
Refining Margin per crude oil throughput barrel |
$ |
8.49 |
$ |
7.16 |
$ |
9.27 |
$ |
14.45 |
|||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining Margin adjusted for FIFO impact |
$ |
139.5 |
$ |
132.1 |
$ |
620.0 |
$ |
1,078.6 |
|||||||
Divided by: crude oil throughput barrels |
19.1 |
14.7 |
72.5 |
70.5 |
|||||||||||
Refining Margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
7.32 |
$ |
8.96 |
$ |
8.55 |
$ |
15.31 |
|||||||
Coffeyville Refinery |
|||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Total crude oil throughput barrels per day |
132,351 |
77,224 |
124,169 |
113,305 |
|||||||||||
Days in the period |
92 |
92 |
366 |
365 |
|||||||||||
Total crude oil throughput barrels |
12,176,292 |
7,104,608 |
45,445,854 |
41,356,325 |
|||||||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining Margin |
$ |
104.1 |
$ |
32.1 |
$ |
435.0 |
$ |
594.5 |
|||||||
Divided by: crude oil throughput barrels |
12.2 |
7.1 |
45.4 |
41.4 |
|||||||||||
Refining Margin per crude oil throughput barrel |
$ |
8.55 |
$ |
4.52 |
$ |
9.57 |
$ |
14.37 |
|||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining Margin adjusted for FIFO impact |
$ |
88.7 |
$ |
49.5 |
$ |
397.2 |
$ |
632.5 |
|||||||
Divided by: crude oil throughput barrels |
12.2 |
7.1 |
45.4 |
41.4 |
|||||||||||
Refining Margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
7.29 |
$ |
6.97 |
$ |
8.74 |
$ |
15.29 |
|||||||
Wynnewood Refinery |
|||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Total crude oil throughput barrels per day |
75,071 |
82,915 |
73,873 |
79,772 |
|||||||||||
Days in the period |
92 |
92 |
366 |
365 |
|||||||||||
Total crude oil throughput barrels |
6,906,532 |
7,628,180 |
27,037,518 |
29,116,780 |
|||||||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining Margin |
$ |
56.7 |
$ |
72.8 |
$ |
232.6 |
$ |
420.6 |
|||||||
Divided by: crude oil throughput barrels |
6.9 |
7.6 |
27.0 |
29.1 |
|||||||||||
Refining Margin per crude oil throughput barrel |
$ |
8.20 |
$ |
9.54 |
$ |
8.60 |
$ |
14.44 |
|||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Refining Margin adjusted for FIFO impact |
$ |
49.7 |
$ |
82.0 |
$ |
218.4 |
$ |
442.9 |
|||||||
Divided by: crude oil throughput barrels |
6.9 |
7.6 |
27.0 |
29.1 |
|||||||||||
Refining Margin adjusted for FIFO impact per crude oil throughput barrel |
$ |
7.19 |
$ |
10.74 |
$ |
8.07 |
$ |
15.21 |
Gross profit (loss) excluding flood insurance recovery is calculated as the difference between the Petroleum segment's net sales, cost of materials and other, direct operating expenses (exclusive of depreciation and amortization), major scheduled turnaround expenses and depreciation and amortization. Gross profit (loss) excluding flood insurance recovery per crude throughput barrel is calculated as gross profit (loss) excluding flood insurance recovery as derived above divided by the refineries' crude oil throughput volumes for the respective periods presented. Gross profit (loss) excluding flood insurance recovery is a non-GAAP measure that should not be substituted for operating income (loss). Management believes it is important to investors in evaluating the refineries' performance and the Petroleum segment's ongoing operating results. Our calculation of gross profit (loss) excluding flood insurance recovery may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. The calculation of gross profit (loss) excluding flood insurance recovery and gross profit (loss) excluding flood insurance recovery per crude oil throughput barrel for the three months and years ended December 31, 2016 and 2015 is as follows:
Consolidated Operating Data |
|||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Net Sales |
$ |
1,269.4 |
$ |
948.3 |
$ |
4,431.3 |
$ |
5,161.9 |
|||||||
Cost of materials and other |
1,107.5 |
842.8 |
3,759.2 |
4,143.6 |
|||||||||||
Direct operating expenses (exclusive of depreciation and amortization as reflected below) |
94.7 |
188.7 |
393.4 |
478.5 |
|||||||||||
Flood insurance recovery |
— |
— |
— |
(27.3) |
|||||||||||
Depreciation and amortization |
32.6 |
31.5 |
126.3 |
128.0 |
|||||||||||
Gross profit (loss) |
34.6 |
(114.7) |
152.4 |
439.1 |
|||||||||||
Flood insurance recovery |
— |
— |
— |
(27.3) |
|||||||||||
Gross profit (loss) excluding flood insurance recovery |
$ |
34.6 |
$ |
(114.7) |
$ |
152.4 |
$ |
411.8 |
|||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Gross profit (loss) excluding flood insurance recovery |
$ |
34.6 |
$ |
(114.7) |
$ |
152.4 |
$ |
411.8 |
|||||||
Divided by: Crude oil throughput barrels |
19.1 |
14.7 |
72.5 |
70.5 |
|||||||||||
Gross profit (loss) excluding flood insurance recovery per crude oil throughput barrel |
$ |
1.81 |
$ |
(7.80) |
$ |
2.10 |
$ |
5.84 |
|||||||
Coffeyville Refinery |
|||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Net Sales |
$ |
854.7 |
$ |
522.6 |
$ |
2,948.9 |
$ |
3,220.6 |
|||||||
Cost of materials and other |
750.6 |
490.5 |
2,513.9 |
2,626.1 |
|||||||||||
Direct operating expenses (exclusive of depreciation and amortization as reflected below) |
52.0 |
53.5 |
196.4 |
209.1 |
|||||||||||
Major schedule turnaround expenses |
— |
84.9 |
31.5 |
102.2 |
|||||||||||
Flood insurance recovery |
— |
— |
— |
(27.3) |
|||||||||||
Depreciation and amortization |
18.4 |
17.5 |
69.7 |
72.1 |
|||||||||||
Gross profit (loss) |
33.7 |
(123.8) |
137.4 |
238.4 |
|||||||||||
Flood insurance recovery |
— |
— |
— |
(27.3) |
|||||||||||
Gross profit (loss) excluding flood insurance recovery |
$ |
33.7 |
$ |
(123.8) |
$ |
137.4 |
$ |
211.1 |
|||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except for $ per barrel data) | |||||||||||||||
Gross profit (loss) excluding flood insurance recovery |
$ |
33.7 |
$ |
(123.8) |
$ |
137.4 |
$ |
211.1 |
|||||||
Divided by: Crude oil throughput barrels |
12.2 |
7.1 |
45.4 |
41.4 |
|||||||||||
Gross profit (loss) excluding flood insurance recovery per crude oil throughput barrel |
$ |
2.76 |
$ |
(17.42) |
$ |
3.03 |
$ |
5.11 |
EBITDA and Adjusted EBITDA. EBITDA represents net income (loss) attributable to CVR Energy stockholders before consolidated (i) interest expense and other financing costs, net of interest income, (ii) income tax expense (benefit), (iii) depreciation and amortization, less the portion of these adjustments attributable to non-controlling interest. Adjusted EBITDA represents EBITDA adjusted for consolidated (i) FIFO impact (favorable) unfavorable; (ii) loss on extinguishment of debt; (iii) major scheduled turnaround expenses (that many of our competitors capitalize and thereby exclude form their measures of EBITDA and adjusted EBITDA); (iv) (gain) loss on derivatives, net; (v) current period settlements on derivative contracts; (vi) flood insurance recovery; (vii) business interruption insurance recovery and (viii) transaction expenses associated with the East Dubuque Merger, less the portion of these adjustments attributable to non-controlling interest. EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be substituted for net income (loss) or cash flow from operations. Management believes that EBITDA and Adjusted EBITDA enable investors to better understand and evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently. EBITDA and Adjusted EBITDA represent EBITDA and Adjusted EBITDA that is attributable to CVR Energy stockholders.
EBITDA for the quarter and year ended December 31, 2015 was also adjusted for share-based compensation expense in calculating Adjusted EBITDA. Beginning in 2016, share-based compensation expense is no longer utilized as an adjustment to derive Adjusted EBITDA as no equity-settled awards remain outstanding for CVR Energy or any of its subsidiaries, and CVR Partners and CVR Refining are responsible for reimbursing CVR Energy for their allocated portion of all outstanding awards. Management believes, based on the nature, classification and cash settlement feature of the currently outstanding awards, that it is no longer necessary to adjust EBITDA for share-based compensation expense to derive Adjusted EBITDA. For comparison purposes we have also provided Adjusted EBITDA for the quarter and year ended December 31, 2015 without adjusting for share-based compensation expense in order to provide a comparison to Adjusted EBITDA for the quarter and year ended December 31, 2016.
A reconciliation of net income attributable to CVR Energy stockholders to EBITDA and EBITDA to Adjusted EBITDA for the quarter and year ended December 31, 2016 and 2015 is as follows:
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Net income (loss) attributable to CVR Energy stockholders |
$ |
7.1 |
$ |
(45.0) |
$ |
24.7 |
$ |
169.6 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
26.9 |
11.7 |
83.2 |
47.4 |
|||||||||||
Income tax expense (benefit) |
(22.1) |
(20.7) |
(19.8) |
84.5 |
|||||||||||
Depreciation and amortization |
52.3 |
40.9 |
193.1 |
164.1 |
|||||||||||
Adjustments attributable to noncontrolling interest |
(37.0) |
(18.7) |
(127.3) |
(75.2) |
|||||||||||
EBITDA |
27.2 |
(31.8) |
153.9 |
390.4 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact (favorable) unfavorable |
(22.4) |
26.6 |
(52.1) |
60.3 |
|||||||||||
Share-based compensation(1) |
— |
3.7 |
— |
12.8 |
|||||||||||
Major scheduled turnaround expenses |
— |
84.9 |
38.1 |
109.2 |
|||||||||||
(Gain) loss on derivatives, net |
14.6 |
(23.6) |
19.4 |
28.6 |
|||||||||||
Current period settlements on derivative contracts(2) |
1.2 |
8.1 |
36.4 |
(26.0) |
|||||||||||
Flood insurance recovery(3) |
— |
— |
— |
(27.3) |
|||||||||||
(Gain) loss on extinguishment of debt(4) |
(0.2) |
— |
4.9 |
— |
|||||||||||
Expenses associated with the East Dubuque Merger(5) |
— |
0.8 |
3.1 |
2.3 |
|||||||||||
Insurance recovery - business interruption(6) |
— |
— |
(2.1) |
— |
|||||||||||
Adjustments attributable to noncontrolling interest |
2.4 |
(33.1) |
(20.0) |
(51.5) |
|||||||||||
Adjusted EBITDA |
$ |
22.8 |
$ |
35.6 |
$ |
181.6 |
$ |
498.8 |
Petroleum and Nitrogen Fertilizer EBITDA and Adjusted EBITDA. EBITDA by operating segment represents net income (loss) before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA by operating segment represents EBITDA by operating segment adjusted for, as applicable (i) FIFO impact (favorable) unfavorable; (ii) share-based compensation, non-cash; (iii) loss on extinguishment of debt; (iv) major scheduled turnaround expenses (that many of our competitors capitalize and thereby exclude from their measures of EBITDA and adjusted EBITDA); (v) (gain) loss on derivatives, net; (vi) current period settlements on derivative contracts; (vii) flood insurance recovery; (viii) transaction expenses associated with the East Dubuque Merger and (ix) business interruption insurance recovery. We present Adjusted EBITDA by operating segment because it is the starting point for CVR Refining's and CVR Partners' calculation of available cash for distribution. EBITDA and Adjusted EBITDA by operating segment are not recognized terms under GAAP and should not be substituted for net income (loss) as a measure of performance. Management believes that EBITDA and Adjusted EBITDA by operating segment enable investors to better understand CVR Refining's and CVR Partners' ability to make distributions to their common unitholders, help investors evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.
A reconciliation of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA for the Petroleum and Nitrogen Fertilizer segments for the three months and years ended December 31, 2016 and 2015 is as follows:
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum: |
|||||||||||||||
Petroleum net income (loss) |
$ |
(10.7) |
$ |
(122.2) |
$ |
15.3 |
$ |
291.2 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
11.6 |
10.4 |
43.3 |
42.2 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Depreciation and amortization |
33.4 |
32.1 |
129.0 |
130.2 |
|||||||||||
Petroleum EBITDA |
34.3 |
(79.7) |
187.6 |
463.6 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact (favorable) unfavorable |
(22.4) |
26.6 |
(52.1) |
60.3 |
|||||||||||
Share-based compensation, non-cash |
— |
0.1 |
— |
0.6 |
|||||||||||
Major scheduled turnaround expenses |
— |
84.9 |
31.5 |
102.2 |
|||||||||||
(Gain) loss on derivatives, net |
14.6 |
(23.6) |
19.4 |
28.6 |
|||||||||||
Current period settlements on derivative contracts(2) |
1.2 |
8.1 |
36.4 |
(26.0) |
|||||||||||
Flood insurance recovery(3) |
— |
— |
— |
(27.3) |
|||||||||||
Adjusted Petroleum EBITDA |
$ |
27.7 |
$ |
16.4 |
$ |
222.8 |
$ |
602.0 |
|||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer: |
|||||||||||||||
Nitrogen Fertilizer net income (loss) |
$ |
(14.5) |
$ |
18.7 |
$ |
(26.9) |
$ |
62.0 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net |
15.8 |
1.8 |
48.6 |
7.0 |
|||||||||||
Income tax expense |
— |
— |
0.3 |
— |
|||||||||||
Depreciation and amortization |
17.2 |
7.2 |
58.2 |
28.4 |
|||||||||||
Nitrogen Fertilizer EBITDA |
18.5 |
27.7 |
80.2 |
97.4 |
|||||||||||
Add: |
|||||||||||||||
Share-based compensation, non-cash |
— |
— |
— |
0.1 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
6.6 |
7.0 |
|||||||||||
(Gain) loss on extinguishment of debt(4) |
(0.2) |
— |
4.9 |
— |
|||||||||||
Expenses associated with the East Dubuque Merger(5) |
— |
0.8 |
3.1 |
2.3 |
|||||||||||
Less: |
|||||||||||||||
Insurance recovery - business interruption(6) |
— |
— |
(2.1) |
— |
|||||||||||
Adjusted Nitrogen Fertilizer EBITDA |
$ |
18.3 |
$ |
28.5 |
$ |
92.7 |
$ |
106.8 |
|||||||
(1) |
Beginning in 2016, share-based compensation expense is no longer utilized as an adjustment to derive Adjusted net income and Adjusted EBITDA as no equity-settled awards remain outstanding for CVR Energy or any of its subsidiaries, and CVR Partners and CVR Refining are responsible for reimbursing CVR Energy for their allocated portion of all outstanding awards. Management believes, based on the nature, classification and cash settlement feature of the currently outstanding awards, that it is no longer necessary to adjust net income (loss) and EBITDA for share-based compensation expense to derive Adjusted net income and Adjusted EBITDA. Adjusted net income (loss) and Adjusted EBITDA for the three months ended December 31, 2015 would have been $(6.6) million and $31.9 million, respectively, without adjusting for share-based compensation expense of $3.7 million. Additionally, Adjusted net income and Adjusted EBITDA for the year ended December 31, 2015 would have been $227.3 million and $486.0 million, respectively, without adjusting for share-based compensation expense of $12.8 million. |
(2) |
Represents the portion of gain (loss) on derivatives, net related to contracts that matured during the respective periods and settled with counterparties. There are no premiums paid or received at inception of the derivative contracts and upon settlement, there is no cost recovery associated with these contracts. |
(3) |
Represents an insurance recovery from Coffeyville Resources Refining and Marketing, LLC's environmental insurance carriers as a result of the flood and crude oil discharge at the Coffeyville refinery on June/July 2007. |
(4) |
Represents a loss on extinguishment of debt incurred by CVR Partners in June 2016 in connection with the repurchase of senior notes assumed in the East Dubuque Merger, which includes a prepayment premium and write-off of the unamortized purchase accounting adjustment. |
(5) |
On April 1, 2016, CVR Partners completed the East Dubuque Merger. CVR Partners incurred legal and other professional fees and other merger related expenses that are referred to herein as transaction expenses associated with the East Dubuque Merger, which are included in selling, general and administrative expenses. |
(6) |
CVR Partners received a business interruption insurance recovery of $2.1 million during the third quarter of 2016. |
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, Feb. 2, 2017 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced that it will release its 2016 fourth quarter results on Thursday, Feb. 16, before the open of New York Stock Exchange trading. Chief Executive Officer Jack Lipinski and other executives will host a teleconference call for analysts and investors on Feb. 16 at 3 p.m. Eastern.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/19478. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/19478. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13653924.
CVR Energy's 2016 fourth quarter earnings news release will be distributed via PR Newswire and posted at www.CVREnergy.com.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Angie Dasbach
CVR Energy, Inc.
(281) 207-3550
MediaRelations@CVREnergy.com
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, Oct. 27, 2016 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced third quarter 2016 net income of $5.4 million, or 6 cents per diluted share, on net sales of $1,240.3 million, compared to net income of $57.9 million, or 67 cents per diluted share, on net sales of $1,408.8 million for the 2015 third quarter. Third quarter 2016 adjusted EBITDA, a non-GAAP financial measure, was $58.2 million, compared to third quarter 2015 adjusted EBITDA of $153.8 million.
For the first nine months of 2016, net income was $17.6 million, or 20 cents per diluted share, on net sales of $3,429.0 million, compared to net income of $214.6 million, or $2.47 per diluted share, on net sales of $4,421.9 million for the same period a year earlier. Adjusted EBITDA for the first nine months of 2016 was $158.8 million, compared to adjusted EBITDA of $463.2 million for the first nine months of 2015.
"CVR Partners posted high on-stream rates at its Coffeyville, Kansas, and East Dubuque, Illinois, fertilizer plants during the third quarter," said Jack Lipinski, CVR Energy's chief executive officer. "CVR Refining's Coffeyville refinery also ran well during the quarter, and the company executed a definitive agreement with Velocity Midstream Partners for the construction of a crude oil pipeline that will directly link the fairway of the South Central Oklahoma Oil Province (SCOOP) to its Wynnewood, Oklahoma, refinery.
"As I mentioned in the CVR Refining third quarter news release, the exorbitant costs of Renewable Identification Numbers (RINs) under the broken Renewable Fuel Standard (RFS) program continue to negatively impact our overall financial results," Lipinski said. "The Environmental Protection Agency (EPA) must change the point of obligation and pull back on its proposed 2017 Renewable Volume Obligations (RVOs) before escalating RIN prices cause irreparable harm to merchant refiners. The EPA is now in the process of literally destroying small and medium-sized merchant refineries like ours that do not control the blending and retail sale of their fuel.
"It is absurd that the EPA continues to punish and ruin merchant refineries that have done nothing wrong when the EPA itself admits that the RFS program is not working," he continued. "The primary beneficiaries of the broken RFS program are 'Big Oil,' large retail chains and the Wall Street speculators that are manipulating the RINs' market for illicit gain, causing the compliance costs of merchant refineries to skyrocket - all with the EPA's imprimatur. Even the EPA's own former Chief of Criminal Investigations, Doug Parker, recently stated publicly that 'structural vulnerabilities in the regulations, limited agency oversight, and a lack of market transparency within the RFS made this program a ripe target for massive fraud and illicit gain.'
"The EPA now has the opportunity to avert another 2008-style financial crisis, but only if it takes resolute and immediate action," Lipinski added. "If regulatory oversight of the 'wild west' RINs' market, as well as an investigation of the criminal activities identified by Doug Parker, are not brought to bear, a number of small and medium-sized refineries will be driven into bankruptcy, which will do for 'Big Oil' what the Federal Trade Commission would never allow them to do for themselves - destroy all of their competitors in the refining business. This will allow them to strengthen oligopolies that will control the supply of gasoline, giving them the ability to cause prices to spike and squeeze consumers at will, which will start a domino effect, crippling the transportation industry and causing many businesses to suffer and even fail.
"We therefore implore the EPA, before it is too late and its rule becomes final on Nov. 30, to take decisive action - by drastically lowering the proposed RVOs for 2017," he said. "It is important to note that the volumes of ethanol and biofuels that the EPA has indicated it will require refineries to blend in 2017 are mathematically impossible to achieve. Therefore, the demands being made on merchant refineries will be impossible for them to achieve. This has become an 'Alice in Wonderland' situation - but it is not funny because of the dire consequences that it will soon manifest.
"We invite everyone to visit our new online resource, www.FixTheRFS.org, to learn more about these important issues, our position and how the EPA can fix this broken program," Lipinski concluded.
CVR Energy also announced a third quarter 2016 cash dividend of 50 cents per share. The dividend, as declared by CVR Energy's Board of Directors, will be paid on Nov. 14, 2016, to stockholders of record on Nov. 7, 2016.
CVR Energy's third quarter cash dividend brings the cumulative cash dividends paid or declared for the first nine months of 2016 to $1.50 per share.
Today, CVR Partners and CVR Refining announced that the partnerships will not pay a cash distribution for the 2016 third quarter.
Petroleum Business
The petroleum business, which is operated by CVR Refining and includes the Coffeyville and Wynnewood refineries, reported third quarter 2016 operating income of $28.4 million on net sales of $1,163.5 million, compared to operating income of $137.2 million on net sales of $1,361.6 million in the third quarter of 2015.
Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $10.09 in the 2016 third quarter, compared to $18.65 during the same period in 2015. Direct operating expenses (exclusive of depreciation and amortization), excluding major scheduled turnaround expenses, per crude oil throughput barrel, for the 2016 third quarter were $5.33, compared to $5.27 in the third quarter of 2015.
Third quarter 2016 throughputs of crude oil and all other feedstocks and blendstocks totaled 206,733 barrels per day (bpd), compared to third quarter 2015 throughputs of crude oil and all other feedstocks and blendstocks of 210,917 bpd.
Nitrogen Fertilizers Business
The fertilizer business, which is operated by CVR Partners and includes the Coffeyville and East Dubuque fertilizer facilities, reported third quarter 2016 operating income of $2.4 million on net sales of $78.5 million, compared to an operating loss of $11.8 million on net sales of $49.3 million for the third quarter of 2015.
For the third quarter of 2016, consolidated average realized gate prices for UAN and ammonia were $154 per ton and $345 per ton, respectively. Average realized gate prices for UAN and ammonia for the Coffeyville plant were $227 per ton and $478 per ton, respectively, for the same period in 2015.
In the 2016 third quarter, CVR Partners' fertilizer facilities produced a combined 200,800 tons of ammonia, of which 60,300 net tons were available for sale while the rest was upgraded to other fertilizer products, including 317,200 tons of UAN. In the 2015 third quarter, the Coffeyville plant produced 66,300 tons of ammonia and purchased an additional 7,500 tons of ammonia, of which 12,100 net tons were available for sale while the remainder was upgraded to 152,400 tons of UAN.
Cash and Debt
Consolidated cash and cash equivalents, which included $285.9 million for CVR Refining and $65.3 million for CVR Partners, was $762.6 million at Sept. 30, 2016. Consolidated total debt was $1,166.3 million at Sept. 30, 2016. The company had no debt exclusive of CVR Refining's and CVR Partners' debt.
Third Quarter 2016 Earnings Conference Call
CVR Energy previously announced that it will host its third quarter 2016 Earnings Conference Call for analysts and investors on Thursday, Oct. 27, at 3 p.m. Eastern. The Earnings Conference Call may also include discussion of company developments, forward-looking information and other material information about business and financial matters.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/17701. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/17701. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13647403.
Forward-Looking Statements
This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "explore," "evaluate," "intend," "may," "might," "plan," "potential," "predict," "seek," "should," or "will," or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. For a discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings. These risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. CVR Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Angie Dasbach
CVR Energy, Inc.
(281) 207-3550
MediaRelations@CVREnergy.com
CVR Energy, Inc. | |||||||||||||||
Financial and Operations Data (all information in this release is unaudited unless noted otherwise). | |||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Consolidated Statement of Operations Data: |
|||||||||||||||
Net sales |
$ |
1,240.3 |
$ |
1,408.8 |
$ |
3,429.0 |
$ |
4,421.9 |
|||||||
Cost of product sold |
1,005.7 |
1,076.7 |
2,719.3 |
3,342.5 |
|||||||||||
Direct operating expenses |
129.5 |
145.8 |
409.2 |
372.7 |
|||||||||||
Flood insurance recovery |
— |
— |
— |
(27.3) |
|||||||||||
Selling, general and administrative expenses |
27.8 |
26.1 |
81.7 |
78.5 |
|||||||||||
Depreciation and amortization |
50.1 |
38.7 |
140.8 |
123.2 |
|||||||||||
Operating income |
27.2 |
121.5 |
78.0 |
532.3 |
|||||||||||
Interest expense and other financing costs |
(26.2) |
(11.9) |
(56.8) |
(36.5) |
|||||||||||
Interest income |
0.2 |
0.3 |
0.5 |
0.7 |
|||||||||||
Gain (loss) on derivatives, net |
(1.7) |
11.8 |
(4.8) |
(52.2) |
|||||||||||
Loss on extinguishment of debt |
— |
— |
(5.1) |
— |
|||||||||||
Other income, net |
5.0 |
0.3 |
5.5 |
36.6 |
|||||||||||
Income before income tax expense |
4.5 |
122.0 |
17.3 |
480.9 |
|||||||||||
Income tax expense |
2.5 |
23.1 |
2.3 |
105.2 |
|||||||||||
Net income |
2.0 |
98.9 |
15.0 |
375.7 |
|||||||||||
Less: Net income (loss) attributable to noncontrolling interest |
(3.4) |
41.0 |
(2.6) |
161.1 |
|||||||||||
Net income attributable to CVR Energy stockholders |
$ |
5.4 |
$ |
57.9 |
$ |
17.6 |
$ |
214.6 |
|||||||
Basic and diluted earnings per share |
$ |
0.06 |
$ |
0.67 |
$ |
0.20 |
$ |
2.47 |
|||||||
Dividends declared per share |
$ |
0.50 |
$ |
0.50 |
$ |
1.50 |
$ |
1.50 |
|||||||
Adjusted EBITDA* |
$ |
58.2 |
$ |
153.8 |
$ |
158.8 |
$ |
463.2 |
|||||||
Adjusted net income* |
$ |
11.5 |
$ |
82.4 |
$ |
37.0 |
$ |
239.4 |
|||||||
Adjusted net income per diluted share* |
$ |
0.13 |
$ |
0.95 |
$ |
0.43 |
$ |
2.76 |
|||||||
Weighted-average common shares outstanding - basic and diluted |
86.8 |
86.8 |
86.8 |
86.8 |
* See "Use of Non-GAAP Financial Measures" below. |
As of September |
As of December | ||||||
(audited) | |||||||
(in millions) | |||||||
Balance Sheet Data: |
|||||||
Cash and cash equivalents |
$ |
762.6 |
$ |
765.1 |
|||
Working capital (1) |
842.6 |
789.0 |
|||||
Total assets (1) |
4,055.0 |
3,299.4 |
|||||
Total debt, including current portion (1) |
1,166.3 |
667.1 |
|||||
Total CVR stockholders' equity |
894.4 |
984.1 |
(1) |
Prior period amounts have been retrospectively adjusted for Accounting Standard Update No. 2015-03, which requires that costs incurred to issue debt be presented in the balance sheet as a direct reduction from the carrying value of the debt. |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Cash Flow Data: |
|||||||||||||||
Net cash flow provided by (used in): |
|||||||||||||||
Operating activities |
$ |
149.0 |
$ |
235.9 |
$ |
218.9 |
$ |
612.3 |
|||||||
Investing activities |
(16.9) |
(55.1) |
(172.0) |
(73.8) |
|||||||||||
Financing activities |
(60.1) |
(106.5) |
(49.4) |
(280.2) |
|||||||||||
Net cash flow |
$ |
72.0 |
$ |
74.3 |
$ |
(2.5) |
$ |
258.3 |
Segment Information
Our operations are organized into two reportable segments, Petroleum and Nitrogen Fertilizer. Our operations that are not included in the Petroleum and Nitrogen Fertilizer segments are included in the Corporate and Other segment (along with elimination of intersegment transactions). The Petroleum segment is operated by CVR Refining, LP ("CVR Refining"), in which we own a majority interest as well as the general partner. The Petroleum segment includes the operations of the Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with the crude oil gathering and pipeline systems. Detailed operating results for the Petroleum segment for the quarter and nine months ended September 30, 2016 are included in CVR Refining's press release dated October 27, 2016. The Nitrogen Fertilizer segment is operated by CVR Partners, LP, ("CVR Partners") in which we own approximately 34% of the common units as of September 30, 2016 and serve as the general partner. On April 1, 2016, CVR Partners completed the previously announced transactions (the "East Dubuque Merger") contemplated by the Agreement and Plan of Merger, dated as of August 9, 2015, whereby CVR Partners acquired CVR Nitrogen, LP (formerly known as East Dubuque Nitrogen Partners, L.P. and also formerly known as Rentech Nitrogen Partners L.P.) and CVR Nitrogen GP, LLC (formerly known as East Dubuque Nitrogen GP, LLC and also formerly known as Rentech Nitrogen GP, LLC). The Nitrogen Fertilizer segment consists of a nitrogen fertilizer manufacturing facility located in Coffeyville, Kansas, and as of April 1, 2016, a nitrogen fertilizer manufacturing facility located in East Dubuque, Illinois. Detailed operating results for the Nitrogen Fertilizer segment for the quarter and nine months ended September 30, 2016 are included in CVR Partners' press release dated October 27, 2016.
Petroleum |
Nitrogen |
Corporate and |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended September 30, 2016 |
|||||||||||||||
Net sales |
$ |
1,163.5 |
$ |
78.5 |
$ |
(1.7) |
$ |
1,240.3 |
|||||||
Cost of product sold |
987.5 |
19.9 |
(1.7) |
1,005.7 |
|||||||||||
Direct operating expenses (1) |
97.0 |
32.5 |
— |
129.5 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
— |
— |
|||||||||||
Selling, general and administrative |
18.1 |
7.3 |
2.4 |
27.8 |
|||||||||||
Depreciation and amortization |
32.5 |
16.4 |
1.2 |
50.1 |
|||||||||||
Operating income (loss) |
$ |
28.4 |
$ |
2.4 |
$ |
(3.6) |
$ |
27.2 |
|||||||
Capital expenditures |
$ |
15.4 |
$ |
6.4 |
$ |
1.0 |
$ |
22.8 |
|||||||
Nine Months Ended September 30, 2016 |
|||||||||||||||
Net sales |
$ |
3,161.9 |
$ |
271.4 |
$ |
(4.3) |
$ |
3,429.0 |
|||||||
Cost of product sold |
2,651.7 |
72.2 |
(4.6) |
2,719.3 |
|||||||||||
Direct operating expenses (1) |
267.2 |
103.8 |
0.1 |
371.1 |
|||||||||||
Major scheduled turnaround expenses |
31.5 |
6.6 |
— |
38.1 |
|||||||||||
Selling, general and administrative |
53.4 |
22.0 |
6.3 |
81.7 |
|||||||||||
Depreciation and amortization |
95.6 |
41.0 |
4.2 |
140.8 |
|||||||||||
Operating income (loss) |
$ |
62.5 |
$ |
25.8 |
$ |
(10.3) |
$ |
78.0 |
|||||||
Capital expenditures |
$ |
83.4 |
$ |
18.3 |
$ |
3.9 |
$ |
105.6 |
Petroleum |
Nitrogen |
Corporate and |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended September 30, 2015 |
|||||||||||||||
Net sales |
$ |
1,361.6 |
$ |
49.3 |
$ |
(2.1) |
$ |
1,408.8 |
|||||||
Cost of product sold |
1,063.7 |
14.5 |
(1.5) |
1,076.7 |
|||||||||||
Direct operating expenses (1) |
97.0 |
26.6 |
— |
123.6 |
|||||||||||
Major scheduled turnaround expenses |
15.6 |
6.6 |
— |
22.2 |
|||||||||||
Flood insurance recovery (2) |
— |
— |
— |
— |
|||||||||||
Selling, general and administrative |
18.2 |
6.0 |
1.9 |
26.1 |
|||||||||||
Depreciation and amortization |
29.9 |
7.4 |
1.4 |
38.7 |
|||||||||||
Operating income (loss) |
$ |
137.2 |
$ |
(11.8) |
$ |
(3.9) |
$ |
121.5 |
|||||||
Capital expenditures |
$ |
45.5 |
$ |
6.4 |
$ |
3.3 |
$ |
55.2 |
|||||||
Nine Months Ended September 30, 2015 |
|||||||||||||||
Net sales |
$ |
4,213.6 |
$ |
223.2 |
$ |
(14.9) |
$ |
4,421.9 |
|||||||
Cost of product sold |
3,300.8 |
55.7 |
(14.0) |
3,342.5 |
|||||||||||
Direct operating expenses (1) |
272.7 |
75.7 |
0.1 |
348.5 |
|||||||||||
Major scheduled turnaround expenses |
17.2 |
7.0 |
— |
24.2 |
|||||||||||
Flood insurance recovery (2) |
(27.3) |
— |
— |
(27.3) |
|||||||||||
Selling, general and administrative |
54.9 |
15.2 |
8.4 |
78.5 |
|||||||||||
Depreciation and amortization |
98.1 |
21.2 |
3.9 |
123.2 |
|||||||||||
Operating income (loss) |
$ |
497.2 |
$ |
48.4 |
$ |
(13.3) |
$ |
532.3 |
|||||||
Capital expenditures |
$ |
123.6 |
$ |
12.4 |
$ |
5.9 |
$ |
141.9 |
|||||||
(1) |
Excluding turnaround expenses. |
(2) |
Represents an insurance recovery from Coffeyville Resources Refining and Marketing, LLC's ("CRRM") environmental insurance carriers as a result of the flood and crude oil discharge at the Coffeyville refinery on June/July 2007. |
Petroleum |
Nitrogen |
Corporate and |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
September 30, 2016 |
|||||||||||||||
Cash and cash equivalents |
$ |
285.9 |
$ |
65.3 |
$ |
411.4 |
$ |
762.6 |
|||||||
Total assets |
2,277.3 |
1,326.9 |
450.8 |
4,055.0 |
|||||||||||
Total debt, including current portion |
573.3 |
624.5 |
(31.5) |
1,166.3 |
|||||||||||
December 31, 2015 |
|||||||||||||||
Cash and cash equivalents |
$ |
187.3 |
$ |
50.0 |
$ |
527.8 |
$ |
765.1 |
|||||||
Total assets (1) |
2,189.0 |
536.3 |
574.1 |
3,299.4 |
|||||||||||
Total debt, including current portion (1) |
573.8 |
124.8 |
(31.5) |
667.1 |
(1) |
Prior period amounts have been retrospectively adjusted for Accounting Standard Update No. 2015-03, which requires that costs incurred to issue debt be presented in the balance sheet as a direct reduction from the carrying value of the debt. |
Petroleum Segment Operating Data
The following tables set forth information about our consolidated Petroleum segment operated by CVR Refining, of which we own a majority interest and serve as the general partner, and the Coffeyville and Wynnewood refineries. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Petroleum segment for the quarter and nine months ended September 30, 2016 are included in CVR Refining's press release dated October 27, 2016.
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum Segment Summary Financial Results: |
|||||||||||||||
Net sales |
$ |
1,163.5 |
$ |
1,361.6 |
$ |
3,161.9 |
$ |
4,213.6 |
|||||||
Cost of product sold |
987.5 |
1,063.7 |
2,651.7 |
3,300.8 |
|||||||||||
Direct operating expenses |
97.0 |
97.0 |
267.2 |
272.7 |
|||||||||||
Major scheduled turnaround expenses |
— |
15.6 |
31.5 |
17.2 |
|||||||||||
Flood insurance recovery |
— |
— |
— |
(27.3) |
|||||||||||
Selling, general and administrative expenses |
18.1 |
18.2 |
53.4 |
54.9 |
|||||||||||
Depreciation and amortization |
32.5 |
29.9 |
95.6 |
98.1 |
|||||||||||
Operating income |
28.4 |
137.2 |
62.5 |
497.2 |
|||||||||||
Interest expense and other financing costs |
(10.8) |
(10.4) |
(31.7) |
(32.2) |
|||||||||||
Interest income |
— |
0.1 |
— |
0.3 |
|||||||||||
Gain (loss) on derivatives, net |
(1.7) |
11.8 |
(4.8) |
(52.2) |
|||||||||||
Other income, net |
— |
0.2 |
— |
0.3 |
|||||||||||
Income before income tax expense |
15.9 |
138.9 |
26.0 |
413.4 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Net income |
$ |
15.9 |
$ |
138.9 |
$ |
26.0 |
$ |
413.4 |
|||||||
Gross profit |
$ |
46.5 |
$ |
155.4 |
$ |
115.9 |
$ |
552.1 |
|||||||
Refining margin* |
$ |
176.0 |
$ |
297.9 |
$ |
510.2 |
$ |
912.8 |
|||||||
Refining margin adjusted for FIFO impact* |
$ |
183.7 |
$ |
343.5 |
$ |
480.5 |
$ |
946.5 |
|||||||
Adjusted Petroleum EBITDA* |
$ |
75.3 |
$ |
229.6 |
$ |
195.1 |
$ |
585.6 |
* See "Use of Non-GAAP Financial Measures" below. |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(dollars per barrel) | |||||||||||||||
Petroleum Segment Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Refining margin* |
$ |
9.66 |
$ |
16.17 |
$ |
9.55 |
$ |
16.38 |
|||||||
FIFO impact, (favorable) unfavorable |
0.43 |
2.48 |
(0.56) |
0.60 |
|||||||||||
Refining margin adjusted for FIFO impact* |
10.09 |
18.65 |
8.99 |
16.98 |
|||||||||||
Gross profit |
2.55 |
8.44 |
2.17 |
9.91 |
|||||||||||
Gross profit excluding flood insurance recovery* |
2.55 |
8.44 |
2.17 |
9.42 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
5.33 |
6.11 |
5.59 |
5.20 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
5.33 |
5.27 |
5.00 |
4.89 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
5.04 |
5.79 |
5.24 |
4.88 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
5.04 |
$ |
4.99 |
$ |
4.68 |
$ |
4.59 |
|||||||
Barrels sold (barrels per day) |
209,228 |
211,440 |
208,192 |
217,696 |
* See "Use of Non-GAAP Financial Measures" below. |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||||||||||||||
Petroleum Segment Summary |
2016 |
2015 |
2016 |
2015 | |||||||||||||||||||||||
Refining Throughput and Production Data (bpd): |
|||||||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||||||
Sweet |
176,404 |
85.3 |
% |
185,228 |
87.8 |
% |
174,594 |
85.4 |
% |
184,481 |
85.5 |
% | |||||||||||||||
Medium |
1,983 |
1.0 |
% |
2,037 |
1.0 |
% |
2,321 |
1.1 |
% |
3,220 |
1.5 |
% | |||||||||||||||
Heavy sour |
19,568 |
9.5 |
% |
12,891 |
6.1 |
% |
17,978 |
8.9 |
% |
16,476 |
7.7 |
% | |||||||||||||||
Total crude oil throughput |
197,955 |
95.8 |
% |
200,156 |
94.9 |
% |
194,893 |
95.4 |
% |
204,177 |
94.7 |
% | |||||||||||||||
All other feedstocks and blendstocks |
8,778 |
4.2 |
% |
10,761 |
5.1 |
% |
9,476 |
4.6 |
% |
11,487 |
5.3 |
% | |||||||||||||||
Total throughput |
206,733 |
100.0 |
% |
210,917 |
100.0 |
% |
204,369 |
100.0 |
% |
215,664 |
100.0 |
% | |||||||||||||||
Production: |
|||||||||||||||||||||||||||
Gasoline |
106,120 |
51.2 |
% |
103,479 |
48.9 |
% |
106,774 |
52.2 |
% |
106,650 |
49.1 |
% | |||||||||||||||
Distillate |
84,669 |
40.9 |
% |
88,479 |
41.8 |
% |
83,101 |
40.6 |
% |
91,262 |
42.0 |
% | |||||||||||||||
Other (excluding internally produced fuel) |
16,390 |
7.9 |
% |
19,608 |
9.3 |
% |
14,738 |
7.2 |
% |
19,210 |
8.9 |
% | |||||||||||||||
Total refining production (excluding internally produced fuel) |
207,179 |
100.0 |
% |
211,566 |
100.0 |
% |
204,613 |
100.0 |
% |
217,122 |
100.0 |
% | |||||||||||||||
Product price (dollars per gallon): |
|||||||||||||||||||||||||||
Gasoline |
$ |
1.45 |
$ |
1.72 |
$ |
1.31 |
$ |
1.69 |
|||||||||||||||||||
Distillate |
1.45 |
1.60 |
1.30 |
1.70 |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Market Indicators (dollars per barrel): |
|||||||||||||||
West Texas Intermediate (WTI) NYMEX |
$ |
44.94 |
$ |
46.50 |
$ |
41.53 |
$ |
51.01 |
|||||||
Crude Oil Differentials: |
|||||||||||||||
WTI less WTS (light/medium sour) |
1.47 |
(1.62) |
0.82 |
(0.47) |
|||||||||||
WTI less WCS (heavy sour) |
14.23 |
15.14 |
13.59 |
12.79 |
|||||||||||
NYMEX Crack Spreads: |
|||||||||||||||
Gasoline |
13.73 |
22.23 |
16.24 |
22.30 |
|||||||||||
Heating Oil |
14.34 |
20.05 |
13.04 |
22.87 |
|||||||||||
NYMEX 2-1-1 Crack Spread |
14.03 |
21.14 |
14.64 |
22.59 |
|||||||||||
PADD II Group 3 Basis: |
|||||||||||||||
Gasoline |
0.48 |
0.63 |
(3.59) |
(2.99) |
|||||||||||
Ultra Low Sulfur Diesel |
1.01 |
0.27 |
(0.38) |
(2.61) |
|||||||||||
PADD II Group 3 Product Crack Spread: |
|||||||||||||||
Gasoline |
14.21 |
22.87 |
12.65 |
19.31 |
|||||||||||
Ultra Low Sulfur Diesel |
15.35 |
20.31 |
12.65 |
20.26 |
|||||||||||
PADD II Group 3 2-1-1 |
14.78 |
21.59 |
12.65 |
19.78 |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Coffeyville Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
788.1 |
$ |
840.0 |
$ |
2,094.1 |
$ |
2,698.0 |
|||||||
Cost of product sold |
669.9 |
669.9 |
1,763.3 |
2,135.6 |
|||||||||||
Refining margin* |
118.2 |
170.1 |
330.8 |
562.4 |
|||||||||||
Direct operating expenses |
50.7 |
54.0 |
144.5 |
155.6 |
|||||||||||
Major scheduled turnaround expenses |
— |
15.6 |
31.5 |
17.2 |
|||||||||||
Flood insurance recovery |
— |
— |
— |
(27.3) |
|||||||||||
Depreciation and amortization |
17.7 |
15.7 |
51.4 |
54.7 |
|||||||||||
Gross profit |
$ |
49.8 |
$ |
84.8 |
$ |
103.4 |
$ |
362.2 |
|||||||
Refining margin adjusted for FIFO impact* |
$ |
122.2 |
$ |
201.3 |
$ |
308.4 |
$ |
582.9 |
|||||||
Coffeyville Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Refining margin* |
$ |
9.86 |
$ |
15.57 |
$ |
9.94 |
$ |
16.42 |
|||||||
FIFO impact, (favorable) unfavorable |
0.33 |
2.85 |
(0.67) |
0.60 |
|||||||||||
Refining margin adjusted for FIFO impact* |
10.19 |
18.42 |
9.27 |
17.02 |
|||||||||||
Gross profit |
4.15 |
7.76 |
3.11 |
10.58 |
|||||||||||
Gross profit excluding flood insurance recovery* |
4.15 |
7.76 |
3.11 |
9.78 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
4.23 |
6.37 |
5.29 |
5.05 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
4.23 |
4.95 |
4.34 |
4.54 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
3.93 |
5.95 |
4.80 |
4.61 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
3.93 |
$ |
4.62 |
$ |
3.94 |
$ |
4.15 |
|||||||
Barrels sold (barrels per day) |
140,256 |
127,089 |
133,729 |
137,365 |
* See "Use of Non-GAAP Financial Measures" below. |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||||||||||
Coffeyville Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
110,825 |
81.0 |
% |
105,314 |
83.3 |
% |
101,803 |
79.2 |
% |
106,256 |
79.2 |
% | |||||||||||
Medium |
— |
— |
% |
552 |
0.4 |
% |
1,641 |
1.3 |
% |
2,732 |
2.0 |
% | |||||||||||
Heavy sour |
19,568 |
14.3 |
% |
12,891 |
10.2 |
% |
17,978 |
13.9 |
% |
16,476 |
12.3 |
% | |||||||||||
Total crude oil throughput |
130,393 |
95.3 |
% |
118,757 |
93.9 |
% |
121,422 |
94.4 |
% |
125,464 |
93.5 |
% | |||||||||||
All other feedstocks and blendstocks |
6,399 |
4.7 |
% |
7,753 |
6.1 |
% |
7,193 |
5.6 |
% |
8,691 |
6.5 |
% | |||||||||||
Total throughput |
136,792 |
100.0 |
% |
126,510 |
100.0 |
% |
128,615 |
100.0 |
% |
134,155 |
100.0 |
% | |||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
70,013 |
50.3 |
% |
60,849 |
47.3 |
% |
67,298 |
51.5 |
% |
65,000 |
47.4 |
% | |||||||||||
Distillate |
57,839 |
41.6 |
% |
55,521 |
43.1 |
% |
54,192 |
41.5 |
% |
59,050 |
43.0 |
% | |||||||||||
Other (excluding internally produced fuel) |
11,286 |
8.1 |
% |
12,407 |
9.6 |
% |
9,191 |
7.0 |
% |
13,115 |
9.6 |
% | |||||||||||
Total refining production (excluding internally produced fuel) |
139,138 |
100.0 |
% |
128,777 |
100.0 |
% |
130,681 |
100.0 |
% |
137,165 |
100.0 |
% |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Wynnewood Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
374.3 |
$ |
520.5 |
$ |
1,064.4 |
$ |
1,512.3 |
|||||||
Cost of product sold |
317.7 |
393.1 |
888.5 |
1,164.5 |
|||||||||||
Refining margin* |
56.6 |
127.4 |
175.9 |
347.8 |
|||||||||||
Direct operating expenses |
46.3 |
42.9 |
122.7 |
117.0 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
— |
— |
|||||||||||
Depreciation and amortization |
12.7 |
12.5 |
38.0 |
37.6 |
|||||||||||
Gross profit (loss) |
$ |
(2.4) |
$ |
72.0 |
$ |
15.2 |
$ |
193.2 |
|||||||
Refining margin adjusted for FIFO impact* |
$ |
60.4 |
$ |
141.8 |
$ |
168.6 |
$ |
361.0 |
|||||||
Wynnewood Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Refining margin* |
$ |
9.10 |
$ |
17.01 |
$ |
8.74 |
$ |
16.18 |
|||||||
FIFO impact, (favorable) unfavorable |
0.61 |
1.93 |
(0.36) |
0.61 |
|||||||||||
Refining margin adjusted for FIFO impact* |
9.71 |
18.94 |
8.38 |
16.79 |
|||||||||||
Gross profit (loss) |
(0.39) |
9.61 |
0.76 |
8.99 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
7.45 |
5.73 |
6.10 |
5.44 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
7.45 |
5.73 |
6.10 |
5.44 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
7.29 |
5.53 |
$ |
6.01 |
$ |
5.33 |
|||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
7.29 |
$ |
5.53 |
$ |
6.01 |
$ |
5.33 |
|||||||
Barrels sold (barrels per day) |
68,971 |
84,351 |
74,463 |
80,332 |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||||||||||
Wynnewood Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
65,579 |
93.8 |
% |
79,914 |
94.6 |
% |
72,791 |
96.1 |
% |
78,225 |
96.0 |
% | |||||||||||
Medium |
1,983 |
2.8 |
% |
1,485 |
1.8 |
% |
680 |
0.9 |
% |
488 |
0.6 |
% | |||||||||||
Heavy sour |
— |
— |
% |
— |
— |
% |
— |
— |
% |
— |
— |
% | |||||||||||
Total crude oil throughput |
67,562 |
96.6 |
% |
81,399 |
96.4 |
% |
73,471 |
97.0 |
% |
78,713 |
96.6 |
% | |||||||||||
All other feedstocks and blendstocks |
2,379 |
3.4 |
% |
3,008 |
3.6 |
% |
2,283 |
3.0 |
% |
2,796 |
3.4 |
% | |||||||||||
Total throughput |
69,941 |
100.0 |
% |
84,407 |
100.0 |
% |
75,754 |
100.0 |
% |
81,509 |
100.0 |
% | |||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
36,107 |
53.1 |
% |
42,630 |
51.5 |
% |
39,476 |
53.4 |
% |
41,650 |
52.1 |
% | |||||||||||
Distillate |
26,830 |
39.4 |
% |
32,958 |
39.8 |
% |
28,909 |
39.1 |
% |
32,212 |
40.3 |
% | |||||||||||
Other (excluding internally produced fuel) |
5,104 |
7.5 |
% |
7,201 |
8.7 |
% |
5,547 |
7.5 |
% |
6,095 |
7.6 |
% | |||||||||||
Total refining production (excluding internally produced fuel) |
68,041 |
100.0 |
% |
82,789 |
100.0 |
% |
73,932 |
100.0 |
% |
79,957 |
100.0 |
% |
* See "Use of Non-GAAP Financial Measures" below. |
Nitrogen Fertilizer Segment Operating Data
The following tables set forth information about the Nitrogen Fertilizer segment operated by CVR Partners, of which we owned approximately 34% of the common units as of September 30, 2016 and serve as the general partner. The financial and operational data for the three and nine months ended September 30, 2016 include the results of the nitrogen fertilizer manufacturing facility located in East Dubuque, Illinois (the "East Dubuque Facility") beginning on April 1, 2016, the date of the closing of the acquisition. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Nitrogen Fertilizer segment for the quarter and nine months ended September 30, 2016 are included in CVR Partners' press release dated October 27, 2016.
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer Segment Business Financial Results: |
|||||||||||||||
Net sales |
$ |
78.5 |
$ |
49.3 |
$ |
271.4 |
$ |
223.2 |
|||||||
Cost of product sold |
19.9 |
14.5 |
72.2 |
55.7 |
|||||||||||
Direct operating expenses |
32.5 |
26.6 |
103.8 |
75.7 |
|||||||||||
Major scheduled turnaround expenses |
— |
6.6 |
6.6 |
7.0 |
|||||||||||
Selling, general and administrative expenses |
7.3 |
6.0 |
22.0 |
15.2 |
|||||||||||
Depreciation and amortization |
16.4 |
7.4 |
41.0 |
21.2 |
|||||||||||
Operating income (loss) |
2.4 |
(11.8) |
25.8 |
48.4 |
|||||||||||
Interest expense and other financing costs |
(15.6) |
(1.8) |
(32.8) |
(5.2) |
|||||||||||
Loss on extinguishment of debt |
— |
— |
(5.1) |
— |
|||||||||||
Other income, net |
— |
0.1 |
0.1 |
||||||||||||
Income (loss) before income tax expense |
(13.2) |
(13.5) |
(12.1) |
43.3 |
|||||||||||
Income tax expense |
0.2 |
— |
0.3 |
— |
|||||||||||
Net income (loss) |
$ |
(13.4) |
$ |
(13.5) |
$ |
(12.4) |
$ |
43.3 |
|||||||
Adjusted Nitrogen Fertilizer EBITDA* |
$ |
17.4 |
$ |
3.8 |
$ |
74.4 |
$ |
78.3 |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Nitrogen Fertilizer Segment Key Operating Statistics: |
|||||||||||||||
Consolidated sales (thousand tons): |
|||||||||||||||
Ammonia |
47.7 |
7.8 |
145.7 |
26.9 |
|||||||||||
UAN |
296.0 |
174.5 |
902.4 |
698.8 |
|||||||||||
Consolidated product pricing at gate (dollars per ton) (1): |
|||||||||||||||
Ammonia |
$ |
345 |
$ |
478 |
$ |
385 |
$ |
529 |
|||||||
UAN |
$ |
154 |
$ |
227 |
$ |
187 |
$ |
256 |
|||||||
Consolidated production volume (thousand tons): |
|||||||||||||||
Ammonia (gross produced) (2) |
200.8 |
66.3 |
485.9 |
269.4 |
|||||||||||
Ammonia (net available for sale) (2)(3) |
60.3 |
12.1 |
121.0 |
31.2 |
|||||||||||
UAN |
317.2 |
152.4 |
861.9 |
658.1 |
|||||||||||
Feedstock: |
|||||||||||||||
Petroleum coke used in production (thousand tons) |
126.8 |
82.7 |
384.4 |
335.8 |
|||||||||||
Petroleum coke used in production (dollars per ton) |
$ |
13 |
$ |
25 |
$ |
14 |
$ |
26 |
|||||||
Natural gas used in production (thousands of MMBtus) (4) |
2,075.5 |
— |
3,471.6 |
— |
|||||||||||
Natural gas used in production (dollars per MMBtu) (4) |
$ |
2.97 |
$ |
— |
$ |
2.75 |
$ |
— |
|||||||
Natural gas in cost of product sold (thousands of MMBtus) (4) |
1,679.5 |
— |
2,742.5 |
— |
|||||||||||
Natural gas in cost of product sold (dollars per MMBtu) (4) |
$ |
2.92 |
$ |
— |
$ |
2.68 |
$ |
— |
|||||||
Coffeyville Facility on-stream factor (5): |
|||||||||||||||
Gasification |
95.9 |
% |
62.2 |
% |
97.2 |
% |
87.1 |
% | |||||||
Ammonia |
94.7 |
% |
57.8 |
% |
96.2 |
% |
83.7 |
% | |||||||
UAN |
94.1 |
% |
56.7 |
% |
93.1 |
% |
83.6 |
% | |||||||
East Dubuque Facility on-stream factors (5): |
|||||||||||||||
Ammonia |
94.4 |
% |
— |
% |
81.7 |
% |
— |
% | |||||||
UAN |
92.9 |
% |
— |
% |
81.1 |
% |
— |
% | |||||||
Market Indicators: |
|||||||||||||||
Ammonia — Southern Plains (dollars per ton) |
$ |
315 |
$ |
478 |
$ |
368 |
$ |
526 |
|||||||
Ammonia — Corn belt (dollars per ton) |
$ |
372 |
$ |
533 |
$ |
432 |
$ |
580 |
|||||||
UAN — Corn belt (dollars per ton) |
$ |
188 |
$ |
264 |
$ |
218 |
$ |
294 |
|||||||
Natural gas NYMEX (dollars per MMBtu) |
$ |
2.79 |
$ |
2.74 |
$ |
2.35 |
$ |
2.76 |
|||||||
Cost of product sold, direct operating expenses and selling, general and administrative expenses are all reflected exclusive of depreciation and amortization. |
* See Use of Non-GAAP Financial Measures below. |
(1) |
Product pricing at gate represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry. |
(2) |
Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represent the ammonia available for sale that was not upgraded into other fertilizer products. |
(3) |
In addition to the produced ammonia, the Nitrogen Fertilizer segment acquired approximately 0 tons and 7,500 tons of ammonia during the three months ended September 30, 2016 and 2015, respectively. The Nitrogen Fertilizer segment acquired approximately 8,000 tons and 29,300 tons of ammonia during the nine months ended September 30, 2016 and 2015, respectively. |
(4) |
The cost per MMBtu excludes derivative activity, when applicable. The impact of natural gas derivative activity during the three and nine months ended September 30, 2016 and 2015 was not material. |
(5) |
On-stream factor is the total number of hours operated divided by the total number of hours in the reporting period and is a measure of operating efficiency. |
Excluding the impact of the full facility turnaround and the Linde air separation unit outages at the Coffeyville Facility, the on-stream factors would have been 100.0% for gasifier, 97.3% for ammonia and 96.2% for UAN for the three months ended September 30, 2015.
Excluding the impact of the full facility turnaround and the Linde air separation unit outages at the Coffeyville Facility, the on-stream factors would have been 99.8% for gasifier, 97.0% for ammonia and 96.9% for UAN for the nine months ended September 30, 2015.
Excluding the impact of the full facility turnaround at the East Dubuque Facility, the on-stream factors for the East Dubuque Facility would have been 97.2% for ammonia and 96.2% for UAN for the six months ended September 30, 2016.
Use of Non-GAAP Financial Measures
To supplement the Company's actual results in accordance with GAAP for the applicable periods, the Company also uses the non-GAAP financial measures noted above, which are reconciled to our GAAP-based results below. These non-GAAP financial measures should not be considered an alternative for GAAP results. The adjustments are provided to enhance an overall understanding of the Company's financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.
Adjusted net income is not a recognized term under GAAP and should not be substituted for net income as a measure of our performance but rather should be utilized as a supplemental measure of financial performance in evaluating our business. Management believes that adjusted net income provides relevant and useful information that enables external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, to better understand and evaluate our ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance. Adjusted net income per diluted share represents adjusted net income divided by weighted-average diluted shares outstanding. Adjusted net income represents net income, as adjusted, that is attributable to CVR Energy stockholders.
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Reconciliation of Net Income to Adjusted Net Income: |
|||||||||||||||
Income before income tax expense |
$ |
4.5 |
$ |
122.0 |
$ |
17.3 |
$ |
480.9 |
|||||||
Adjustments: |
|||||||||||||||
FIFO impact, (favorable) unfavorable |
7.7 |
45.6 |
(29.7) |
33.7 |
|||||||||||
Share-based compensation (1) |
— |
3.2 |
— |
9.1 |
|||||||||||
Major scheduled turnaround expenses |
— |
22.2 |
38.1 |
24.2 |
|||||||||||
(Gain) loss on derivatives, net |
1.7 |
(11.8) |
4.8 |
52.2 |
|||||||||||
Current period settlement on derivative contracts (2) |
6.7 |
0.8 |
35.2 |
(34.0) |
|||||||||||
Flood insurance recovery (3) |
— |
— |
— |
(27.3) |
|||||||||||
Loss on extinguishment of debt (4) |
— |
— |
5.1 |
— |
|||||||||||
Expenses associated with the East Dubuque Merger (5) |
0.7 |
1.5 |
3.1 |
1.5 |
|||||||||||
Insurance recovery - business interruption (6) |
(2.1) |
— |
(2.1) |
— |
|||||||||||
Adjusted net income before income tax expense and noncontrolling interest |
19.2 |
183.5 |
71.8 |
540.3 |
|||||||||||
Adjusted net loss attributed to noncontrolling interest |
(1.1) |
(62.0) |
(19.7) |
(179.5) |
|||||||||||
Income tax expense, as adjusted |
(6.6) |
(39.1) |
(15.1) |
(121.4) |
|||||||||||
Adjusted net income* |
$ |
11.5 |
$ |
82.4 |
$ |
37.0 |
$ |
239.4 |
|||||||
Adjusted net income per diluted share* |
$ |
0.13 |
$ |
0.95 |
$ |
0.43 |
$ |
2.76 |
Refining margin per crude oil throughput barrel is a measurement calculated as the difference between the Petroleum segment's net sales and cost of product sold (exclusive of depreciation and amortization). Refining margin is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of product sold at which they are able to sell refined products. Each of the components used in this calculation (net sales and cost of product sold exclusive of depreciation and amortization) can be taken directly from our Petroleum segment's Statements of Operations. Our calculation of refining margin may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. In order to derive the refining margin per crude oil throughput barrel, we utilize the total dollar figures for refining margin as derived above and divide by the applicable number of crude oil throughput barrels for the period. We believe that refining margin is important to enable investors to better understand and evaluate the Petroleum segment's ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance.
Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference between the Petroleum segment's net sales and cost of product sold (exclusive of depreciation and amortization) adjusted for FIFO impact. Refining margin adjusted for FIFO impact is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of product sold (taking into account the impact of the utilization of FIFO) at which they are able to sell refined products. Our calculation of refining margin adjusted for FIFO impact may differ from calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. Under the FIFO accounting method, changes in crude oil prices can cause fluctuations in the inventory valuation of crude oil, work in process and finished goods, thereby resulting in a favorable FIFO impact when crude oil prices increase and an unfavorable FIFO impact when crude oil prices decrease.
Gross profit excluding flood insurance recovery is calculated as the difference between the Petroleum segment's net sales, cost of product sold (exclusive of depreciation and amortization), direct operating expenses (exclusive of depreciation and amortization), major scheduled turnaround expenses and depreciation and amortization. Gross profit excluding flood insurance recovery per crude throughput barrel is calculated as gross profit excluding flood insurance recovery as derived above divided by the refineries' crude oil throughput volumes for the respective periods presented. Gross profit excluding flood insurance recovery is a non-GAAP measure that should not be substituted for operating income. Management believes it is important to investors in evaluating the refineries' performance and the Petroleum segment's ongoing operating results. Our calculation of gross profit excluding flood insurance recovery may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure.
EBITDA and Adjusted EBITDA. EBITDA represents net income attributable to CVR Energy stockholders before consolidated (i) interest expense and other financing costs, net of interest income, (ii) income tax expense, (iii) depreciation and amortization, less the portion of these adjustments attributable to noncontrolling interest. Adjusted EBITDA represents EBITDA adjusted for consolidated (i) FIFO impact (favorable) unfavorable; (ii) loss on extinguishment of debt; (iii) major scheduled turnaround expenses (that many of our competitors capitalize and thereby exclude from their measures of EBITDA and adjusted EBITDA); (iv) (gain) loss on derivatives, net; (v) current period settlements on derivative contracts; (vi) flood insurance recovery; (vii) expenses associated with the East Dubuque Merger and (viii) business interruption insurance recovery, less the portion of these adjustments attributable to noncontrolling interest. EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be substituted for net income (loss) or cash flow from operations. Management believes that EBITDA and Adjusted EBITDA enable investors to better understand and evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently. EBITDA and Adjusted EBITDA represent EBITDA and Adjusted EBITDA that is attributable to CVR Energy stockholders.
EBITDA for the quarter and nine months ended September 30, 2015 was also adjusted for share-based compensation expense in calculating Adjusted EBITDA. Beginning in 2016, share-based compensation expense is no longer utilized as an adjustment to derive Adjusted EBITDA as no equity-settled awards remain outstanding for CVR Energy or any of its subsidiaries, and CVR Partners and CVR Refining are responsible for reimbursing CVR Energy for their allocated portion of all outstanding awards. Management believes, based on the nature, classification and cash settlement feature of the currently outstanding awards, that it is no longer necessary to adjust EBITDA for share-based compensation expense to derive Adjusted EBITDA. For comparison purposes we have also provided Adjusted EBITDA for the quarter and nine months ended September 30, 2015 without adjusting for share-based compensation expense in order to provide a comparison to Adjusted EBITDA for the quarter and nine months ended September 30, 2016.
A reconciliation of net income attributable to CVR Energy stockholders to EBITDA and EBITDA to Adjusted EBITDA for the quarter and nine months ended September 30, 2016 and 2015 is as follows:
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Net income attributable to CVR Energy stockholders |
$ |
5.4 |
$ |
57.9 |
$ |
17.6 |
$ |
214.6 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
26.0 |
11.6 |
56.3 |
35.8 |
|||||||||||
Income tax expense |
2.5 |
23.1 |
2.3 |
105.2 |
|||||||||||
Depreciation and amortization |
50.1 |
38.7 |
140.8 |
123.2 |
|||||||||||
Adjustments attributable to noncontrolling interest |
(35.9) |
(18.0) |
(90.3) |
(56.6) |
|||||||||||
EBITDA |
48.1 |
113.3 |
126.7 |
422.2 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact, (favorable) unfavorable |
7.7 |
45.6 |
(29.7) |
33.7 |
|||||||||||
Share-based compensation (1) |
— |
3.2 |
— |
9.1 |
|||||||||||
Major scheduled turnaround expenses |
— |
22.2 |
38.1 |
24.2 |
|||||||||||
(Gain) loss on derivatives, net |
1.7 |
(11.8) |
4.8 |
52.2 |
|||||||||||
Current period settlement on derivative contracts (2) |
6.7 |
0.8 |
35.2 |
(34.0) |
|||||||||||
Flood insurance recovery (3) |
— |
— |
— |
(27.3) |
|||||||||||
Loss on extinguishment of debt (4) |
— |
— |
5.1 |
— |
|||||||||||
Expenses associated with the East Dubuque Merger (5) |
0.7 |
1.5 |
3.1 |
1.5 |
|||||||||||
Insurance recovery - business interruption (6) |
(2.1) |
— |
(2.1) |
— |
|||||||||||
Adjustments attributable to noncontrolling interest |
(4.6) |
(21.0) |
(22.4) |
(18.4) |
|||||||||||
Adjusted EBITDA |
$ |
58.2 |
$ |
153.8 |
$ |
158.8 |
$ |
463.2 |
Petroleum and Nitrogen Fertilizer EBITDA and Adjusted EBITDA. EBITDA by operating segment represents net income (loss) before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA by operating segment represents EBITDA by operating segment adjusted for, as applicable (i) FIFO impact (favorable) unfavorable; (ii) share-based compensation, non-cash; (iii) loss on extinguishment of debt; (iv) major scheduled turnaround expenses (that many of our competitors capitalize and thereby exclude from their measures of EBITDA and adjusted EBITDA); (v) (gain) loss on derivatives, net; (vi) current period settlements on derivative contracts; (vii) flood insurance recovery; (viii) transaction expenses associated with the East Dubuque Merger and (ix) business interruption insurance recovery, less the portion of these adjustments attributable to noncontrolling interest. We present Adjusted EBITDA by operating segment because it is the starting point for CVR Refining's and CVR Partners' calculation of available cash for distribution. EBITDA and Adjusted EBITDA by operating segment are not recognized terms under GAAP and should not be substituted for net income (loss) as a measure of performance. Management believes that EBITDA and Adjusted EBITDA by operating segment enable investors to better understand CVR Refining's and CVR Partners' ability to make distributions to their common unitholders, help investors evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.
A reconciliation of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA for the Petroleum and Nitrogen Fertilizer segments for the quarter and nine months ended September 30, 2016 and 2015 is as follows:
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum: |
|||||||||||||||
Petroleum net income |
$ |
15.9 |
$ |
138.9 |
$ |
26.0 |
$ |
413.4 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
10.8 |
10.3 |
31.7 |
31.9 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Depreciation and amortization |
32.5 |
29.9 |
95.6 |
98.1 |
|||||||||||
Petroleum EBITDA |
59.2 |
179.1 |
153.3 |
543.4 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact, (favorable) unfavorable |
7.7 |
45.6 |
(29.7) |
33.7 |
|||||||||||
Share-based compensation, non-cash |
— |
0.3 |
— |
0.4 |
|||||||||||
Major scheduled turnaround expenses |
— |
15.6 |
31.5 |
17.2 |
|||||||||||
(Gain) loss on derivatives, net |
1.7 |
(11.8) |
4.8 |
52.2 |
|||||||||||
Current period settlements on derivative contracts (2) |
6.7 |
0.8 |
35.2 |
(34.0) |
|||||||||||
Flood insurance recovery (3) |
— |
— |
— |
(27.3) |
|||||||||||
Adjusted Petroleum EBITDA |
$ |
75.3 |
$ |
229.6 |
$ |
195.1 |
$ |
585.6 |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer: |
|||||||||||||||
Nitrogen fertilizer net income (loss) |
$ |
(13.4) |
$ |
(13.5) |
$ |
(12.4) |
$ |
43.3 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net |
15.6 |
1.8 |
32.8 |
5.2 |
|||||||||||
Income tax expense |
0.2 |
— |
0.3 |
— |
|||||||||||
Depreciation and amortization |
16.4 |
7.4 |
41.0 |
21.2 |
|||||||||||
Nitrogen Fertilizer EBITDA |
18.8 |
(4.3) |
61.7 |
69.7 |
|||||||||||
Add: |
|||||||||||||||
Share-based compensation, non-cash |
— |
— |
— |
0.1 |
|||||||||||
Major scheduled turnaround expenses |
— |
6.6 |
6.6 |
7.0 |
|||||||||||
Loss on extinguishment of debt (4) |
— |
— |
5.1 |
— |
|||||||||||
Expenses associated with the East Dubuque Merger (5) |
0.7 |
1.5 |
3.1 |
1.5 |
|||||||||||
Insurance recovery - business interruption (6) |
$ |
(2.1) |
$ |
— |
$ |
(2.1) |
$ |
— |
|||||||
Adjusted Nitrogen Fertilizer EBITDA |
$ |
17.4 |
$ |
3.8 |
$ |
74.4 |
$ |
78.3 |
|||||||
(1) |
Beginning in 2016, share-based compensation expense is no longer utilized as an adjustment to derive Adjusted net income and Adjusted EBITDA as no equity-settled awards remain outstanding for CVR Energy or any of its subsidiaries, and CVR Partners and CVR Refining are responsible for reimbursing CVR Energy for their allocated portion of all outstanding awards. Management believes, based on the nature, classification and cash settlement feature of the currently outstanding awards, that it is no longer necessary to adjust net income (loss) and EBITDA for share-based compensation expense to derive Adjusted net income and Adjusted EBITDA. Adjusted net income and Adjusted EBITDA for the three months ended September 30, 2015 would have been $80.4 million and $150.6 million, respectively, without adjusting for share-based compensation expense of $3.2 million. Additionally, Adjusted net income and Adjusted EBITDA for the nine months ended September 30, 2015 would have been $233.9 million and $454.1 million, respectively, without adjusting for share-based compensation expense of $9.1 million. |
(2) |
Represents the portion of gain (loss) on derivatives, net related to contracts that matured during the respective periods and settled with counterparties. There are no premiums paid or received at inception of the derivative contracts and upon settlement, there is no cost recovery associated with these contracts. |
(3) |
Represents an insurance recovery from Coffeyville Resources Refining and Marketing, LLC's environmental insurance carriers as a result of the flood and crude oil discharge at the Coffeyville refinery on June/July 2007. |
(4) |
Represents a loss on extinguishment of debt incurred by CVR Partners in June 2016 in connection with the repurchase of senior notes assumed in the East Dubuque Merger, which includes a prepayment premium and write-off of the unamortized purchase accounting adjustment. |
(5) |
On April 1, 2016, CVR Partners completed the East Dubuque Merger. CVR Partners incurred legal and other professional fees and other merger related expenses for the quarter and nine months ended September 30, 2016 that are referred to herein as transaction expenses associated with the East Dubuque Merger, which are included in selling, general and administrative expenses. |
(6) |
CVR Partners received a business interruption insurance recovery of $2.1 million in the third quarter of 2016. |
Logo - http://photos.prnewswire.com/prnh/20071203/CVRLOGO
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, Oct. 13, 2016 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced that it will release its 2016 third quarter results on Thursday, Oct. 27, before the open of New York Stock Exchange trading. Chief Executive Officer Jack Lipinski and other executives will host a teleconference call for analysts and investors on Oct. 27 at 3 p.m. Eastern.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/17701. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/17701. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13647403.
CVR Energy's 2016 third quarter earnings news release will be distributed via PR Newswire and posted at www.CVREnergy.com.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Angie Dasbach
CVR Energy, Inc.
(281) 207-3550
MediaRelations@CVREnergy.com
Logo - http://photos.prnewswire.com/prnh/20071203/CVRLOGO
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, July 28, 2016 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced second quarter 2016 net income of $28.4 million, or 33 cents per diluted share, on net sales of $1,283.2 million, compared to net income of $101.9 million, or $1.17 per diluted share, on net sales of $1,624.2 million for the 2015 second quarter. Second quarter 2016 adjusted EBITDA, a non-GAAP financial measure, was $64.4 million, compared to second quarter 2015 adjusted EBITDA of $145.7 million.
For the first six months of 2016, net income was $12.2 million, or 14 cents per diluted share, on net sales of $2,188.7 million, compared to net income of $156.7 million, or $1.80 per diluted share, on net sales of $3,013.1 million for the same period a year earlier. Adjusted EBITDA for the first six months of 2016 was $100.6 million, compared to adjusted EBITDA of $309.4 million for the first six months of 2015.
"At CVR Partners, the integration of the East Dubuque fertilizer facility has gone smoothly since the acquisition of Rentech Nitrogen Partners, L.P. in April," said Jack Lipinski, CVR Energy's chief executive officer. "CVR Partners also completed a $645 million bond offering during the 2016 second quarter, which enabled it to put in place a long-term capital structure.
"CVR Refining's Coffeyville and Wynnewood refineries posted solid operational performance during the second quarter with a combined crude throughput of 202,536 barrels per day (bpd)," Lipinski said. "However, the increasing cost of RINs offset the improvements we saw in refining margins.
"As I mentioned in the CVR Refining second quarter earnings news release, and I am repeating it here, RINs, which CVR Refining has to purchase to comply with the Renewable Fuel Standard (RFS), have become completely disconnected from the cost of blending and instead have become a source of windfall profits for blenders who the Environmental Protection Agency (EPA) chose to exempt from the program," he said. "The RFS program, as currently managed by the EPA, fails on many fronts. Not only are exempt blenders earning windfall profits from selling RINs to refiners who cannot blend, the RFS program allows exempt blenders to retain the profits and not increase biofuel usage in the U.S.
"RINs have become a black pool allowing exempt parties, and even speculators, to drive prices to confiscatory levels. We believe the market may be cornered, the effect of which will be to bring small merchant refiners to the brink of bankruptcy while unjustly enriching speculators and exempt blenders," Lipinski continued. "RINs were intended to be a compliance tool for refiners, not a device to extract windfall profits from obligated parties. The EPA needs to open its eyes and recognize that it must change the point of obligation to close the loophole that allows these exempt blenders, who control the vast majority of biofuels blending, to retain the profits from selling RINs without investing in increasing biofuel use. The windfall serves no regulatory purpose, but creates a system of winners and losers within the fuels industry based on their ability to blend.
"Market experts like Goldman Sachs and Credit Suisse are advising investors to avoid companies with high RIN exposure and to buy shares in large retail and distribution chains, like Casey's General Stores, who are benefitting from this structural flaw in the EPA's rule," he said. "For example, Goldman Sachs predicts that Casey's will see a 1 percent increase in EBITDA for every 10 cent increase in the price of RINs. Adding to concerns about the RIN market is the ability of third parties to buy and sell RINs. At the point that Goldman Sachs is advising investors to buy shares based on their RIN exposure, it seems reasonable to ask the question of whether third-party speculators are buying and selling RINs directly. There are a discrete number of obligated parties. It would be very easy for third parties to buy RINs and corner the market, driving up prices for obligated parties even higher. The EPA has so far refused to disclose the identity of the entities holding, buying and selling RINs, but this certainly should be investigated.
"There are pending lawsuits seeking to compel the EPA to fix the loophole and administrative requests for a rulemaking, both targeted at stopping the flow of profits to exempt parties at the expense of RIN-short refiners. We are hopeful that justice and reason will prevail and that RINs will once again become a compliance tool for refiners and not a windfall profit device for exempt parties," Lipinski concluded.
CVR Energy also announced a second quarter 2016 cash dividend of 50 cents per share. The dividend, as declared by CVR Energy's Board of Directors, will be paid on Aug. 15, 2016, to stockholders of record on Aug. 8, 2016.
CVR Energy's second quarter cash dividend brings the cumulative cash dividends paid or declared for the first six months of 2016 to $1.00 per share.
Today, CVR Partners announced a 2016 second quarter cash distribution of 17 cents per common unit. CVR Refining announced that it will not pay a cash distribution for the 2016 second quarter.
Petroleum Business
The petroleum business, which is operated by CVR Refining and includes the Coffeyville and Wynnewood refineries, reported second quarter 2016 operating income of $90.1 million on net sales of $1,164.4 million, compared to operating income of $250.8 million on net sales of $1,547.5 million in the second quarter of 2015.
Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $9.56 in the 2016 second quarter, compared to $17.22 during the same period in 2015. Direct operating expenses, including major scheduled turnaround expenses, per barrel sold, exclusive of depreciation and amortization, for the 2016 second quarter were $4.33, compared to $4.43 in the second quarter of 2015.
Second quarter 2016 throughputs of crude oil and all other feedstocks and blendstocks totaled 210,488 bpd, compared to second quarter 2015 throughputs of crude oil and all other feedstocks and blendstocks of 221,095 bpd.
Nitrogen Fertilizers Business
The fertilizer business, which is operated by CVR Partners and includes the Coffeyville and East Dubuque fertilizer facilities, reported second quarter 2016 operating income of $3.7 million on net sales of $119.8 million, compared to operating income of $28.7 million on net sales of $80.8 million for the second quarter of 2015.
For the second quarter of 2016, consolidated average realized gate prices for UAN and ammonia were $199 per ton and $417 per ton, respectively. Average realized gate prices for UAN and ammonia for the Coffeyville plant were $269 per ton and $546 per ton, respectively, for the same period in 2015.
CVR Partners' fertilizer facilities produced a combined 171,500 tons of ammonia and purchased an additional 5,000 tons of ammonia during the second quarter of 2016, of which 45,600 net tons were available for sale while the rest was upgraded to 296,500 tons of UAN. In the 2015 second quarter, the Coffeyville plant produced 107,100 tons of ammonia and purchased an additional 600 tons of ammonia, of which 4,400 net tons were available for sale while the remainder was upgraded to 253,500 tons of UAN.
Cash and Debt
Consolidated cash and cash equivalents, which included $159.3 million for CVR Refining and $76.3 million for CVR Partners, was $690.6 million at June 30, 2016. Consolidated total debt was $1,167.2 million at June 30, 2016. The company had no debt exclusive of CVR Refining's and CVR Partners' debt.
Second Quarter 2016 Earnings Conference Call
CVR Energy previously announced that it will host its second quarter 2016 Earnings Conference Call for analysts and investors on Thursday, July 28, at 3 p.m. Eastern. The Earnings Conference Call may also include discussion of company developments, forward-looking information and other material information about business and financial matters.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/15908. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/15908. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13639905.
Forward-Looking Statements
This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "explore," "evaluate," "intend," "may," "might," "plan," "potential," "predict," "seek," "should," or "will," or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. For a discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings. These risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. CVR Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Angie Dasbach
CVR Energy, Inc.
281-207-3550
MediaRelations@CVREnergy.com
CVR Energy, Inc. | |||||||||||||||
Financial and Operations Data (all information in this release is unaudited unless noted otherwise). | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Consolidated Statement of Operations Data: |
|||||||||||||||
Net sales |
$ |
1,283.2 |
$ |
1,624.2 |
$ |
2,188.7 |
$ |
3,013.1 |
|||||||
Cost of product sold |
976.9 |
1,192.2 |
1,713.7 |
2,265.8 |
|||||||||||
Direct operating expenses |
138.3 |
115.4 |
279.7 |
226.9 |
|||||||||||
Flood insurance recovery |
— |
(27.3) |
— |
(27.3) |
|||||||||||
Selling, general and administrative expenses |
26.6 |
27.2 |
53.8 |
52.4 |
|||||||||||
Depreciation and amortization |
50.7 |
42.5 |
90.7 |
84.5 |
|||||||||||
Operating income |
90.7 |
274.2 |
50.8 |
410.8 |
|||||||||||
Interest expense and other financing costs |
(18.5) |
(11.9) |
(30.6) |
(24.6) |
|||||||||||
Interest income |
0.1 |
0.3 |
0.3 |
0.4 |
|||||||||||
Loss on derivatives, net |
(1.9) |
(12.6) |
(3.1) |
(64.0) |
|||||||||||
Loss on extinguishment of debt |
(5.1) |
— |
(5.1) |
— |
|||||||||||
Other income, net |
0.1 |
0.2 |
0.4 |
36.3 |
|||||||||||
Income before income tax expense |
65.4 |
250.2 |
12.7 |
358.9 |
|||||||||||
Income tax expense (benefit) |
21.6 |
58.1 |
(0.2) |
82.1 |
|||||||||||
Net income |
43.8 |
192.1 |
12.9 |
276.8 |
|||||||||||
Less: Net income attributable to noncontrolling interest |
15.4 |
90.2 |
0.7 |
120.1 |
|||||||||||
Net income attributable to CVR Energy stockholders |
$ |
28.4 |
$ |
101.9 |
$ |
12.2 |
$ |
156.7 |
|||||||
Basic and diluted earnings per share |
$ |
0.33 |
$ |
1.17 |
$ |
0.14 |
$ |
1.80 |
|||||||
Dividends declared per share |
$ |
0.50 |
$ |
0.50 |
$ |
1.00 |
$ |
1.00 |
|||||||
Adjusted EBITDA* |
$ |
64.4 |
$ |
145.7 |
$ |
100.6 |
$ |
309.4 |
|||||||
Adjusted net income* |
$ |
17.1 |
$ |
72.1 |
$ |
25.5 |
$ |
157.0 |
|||||||
Adjusted net income per diluted share* |
$ |
0.20 |
$ |
0.83 |
$ |
0.29 |
$ |
1.81 |
|||||||
Weighted-average common shares outstanding - basic and diluted |
86.8 |
86.8 |
86.8 |
86.8 |
* See "Use of Non-GAAP Financial Measures" below. |
As of June 30, 2016 |
As of December 31, 2015 | ||||||
(audited) | |||||||
(in millions) | |||||||
Balance Sheet Data: |
|||||||
Cash and cash equivalents |
$ |
690.6 |
$ |
765.1 |
|||
Working capital (1) |
898.3 |
789.0 |
|||||
Total assets (1) |
4,056.4 |
3,299.4 |
|||||
Total debt, including current portion (1) |
1,167.2 |
667.1 |
|||||
Total CVR stockholders' equity |
932.7 |
984.1 |
(1) Prior period amounts have been retrospectively adjusted for Accounting Standard Update No. 2015-03, which requires that costs incurred to issue debt be presented in the balance sheet as a direct reduction from the carrying value of the debt. |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Cash Flow Data: |
|||||||||||||||
Net cash flow provided by (used in): |
|||||||||||||||
Operating activities |
$ |
48.3 |
$ |
198.2 |
$ |
69.9 |
$ |
376.4 |
|||||||
Investing activities |
(103.4) |
(15.3) |
(155.1) |
(18.7) |
|||||||||||
Financing activities |
63.9 |
(97.4) |
10.7 |
(173.7) |
|||||||||||
Net cash flow |
$ |
8.8 |
$ |
85.5 |
$ |
(74.5) |
$ |
184.0 |
Segment Information
Our operations are organized into two reportable segments, Petroleum and Nitrogen Fertilizer. Our operations that are not included in the Petroleum and Nitrogen Fertilizer segments are included in the Corporate and Other segment (along with elimination of intersegment transactions). The Petroleum segment is operated by CVR Refining, LP ("CVR Refining"), in which we own a majority interest as well as the general partner. The Petroleum segment includes the operations of the Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with the crude oil gathering and pipeline systems. Detailed operating results for the Petroleum segment for the quarter and six months ended June 30, 2016 are included in CVR Refining's press release dated July 28, 2016. The Nitrogen Fertilizer segment is operated by CVR Partners, LP, ("CVR Partners") in which we owned approximately 34% of the common units as of June 30, 2016 and serve as the general partner. On April 1, 2016, CVR Partners completed the previously announced transactions (the "East Dubuque Merger") contemplated by the Agreement and Plan of Merger, dated as of August 9, 2015, whereby CVR Partners acquired CVR Nitrogen, LP (formerly known as East Dubuque Nitrogen Partners, L.P. and also formerly known as Rentech Nitrogen Partners L.P.) and CVR Nitrogen GP, LLC (formerly known as East Dubuque Nitrogen GP, LLC and also formerly known as Rentech Nitrogen GP, LLC). The Nitrogen Fertilizer segment consists of a nitrogen fertilizer manufacturing facility located in Coffeyville, Kansas, and as of April 1, 2016, a nitrogen fertilizer manufacturing facility located in East Dubuque, Illinois. Detailed operating results for the Nitrogen Fertilizer segment for the quarter and six months ended June 30, 2016 are included in CVR Partners' press release dated July 28, 2016.
Petroleum (CVR Refining) |
Nitrogen Fertilizer (CVR Partners) |
Corporate and Other |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended June 30, 2016 |
|||||||||||||||
Net sales |
$ |
1,164.4 |
$ |
119.8 |
$ |
(1.0) |
$ |
1,283.2 |
|||||||
Cost of product sold |
941.9 |
36.0 |
(1.0) |
976.9 |
|||||||||||
Direct operating expenses (1) |
81.9 |
47.6 |
0.1 |
129.6 |
|||||||||||
Major scheduled turnaround expenses |
2.1 |
6.6 |
— |
8.7 |
|||||||||||
Selling, general and administrative |
16.8 |
8.3 |
1.5 |
26.6 |
|||||||||||
Depreciation and amortization |
31.6 |
17.6 |
1.5 |
50.7 |
|||||||||||
Operating income (loss) |
$ |
90.1 |
$ |
3.7 |
$ |
(3.1) |
$ |
90.7 |
|||||||
Capital expenditures |
$ |
24.0 |
$ |
10.1 |
$ |
1.2 |
$ |
35.3 |
|||||||
Six Months Ended June 30, 2016 |
|||||||||||||||
Net sales |
$ |
1,998.4 |
$ |
192.9 |
$ |
(2.6) |
$ |
2,188.7 |
|||||||
Cost of product sold |
1,664.2 |
52.4 |
(2.9) |
1,713.7 |
|||||||||||
Direct operating expenses (1) |
170.2 |
71.3 |
0.1 |
241.6 |
|||||||||||
Major scheduled turnaround expenses |
31.5 |
6.6 |
— |
38.1 |
|||||||||||
Selling, general and administrative |
35.3 |
14.7 |
3.8 |
53.8 |
|||||||||||
Depreciation and amortization |
63.1 |
24.5 |
3.1 |
90.7 |
|||||||||||
Operating income (loss) |
$ |
34.1 |
$ |
23.4 |
$ |
(6.7) |
$ |
50.8 |
|||||||
Capital expenditures |
$ |
68.0 |
$ |
11.9 |
$ |
2.9 |
$ |
82.8 |
Petroleum (CVR Refining) |
Nitrogen Fertilizer (CVR Partners) |
Corporate and Other |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended June 30, 2015 |
|||||||||||||||
Net sales |
$ |
1,547.5 |
$ |
80.8 |
$ |
(4.1) |
$ |
1,624.2 |
|||||||
Cost of product sold |
1,180.9 |
15.4 |
(4.1) |
1,192.2 |
|||||||||||
Direct operating expenses (1) |
88.6 |
24.7 |
— |
113.3 |
|||||||||||
Major scheduled turnaround expenses |
1.7 |
0.4 |
— |
2.1 |
|||||||||||
Flood insurance recovery |
(27.3) |
— |
— |
(27.3) |
|||||||||||
Selling, general and administrative |
18.6 |
4.6 |
4.0 |
27.2 |
|||||||||||
Depreciation and amortization |
34.2 |
7.0 |
1.3 |
42.5 |
|||||||||||
Operating income (loss) |
$ |
250.8 |
$ |
28.7 |
$ |
(5.3) |
$ |
274.2 |
|||||||
Capital expenditures |
$ |
36.4 |
$ |
3.4 |
$ |
1.4 |
$ |
41.2 |
|||||||
Six Months Ended June 30, 2015 |
|||||||||||||||
Net sales |
$ |
2,852.0 |
$ |
173.9 |
$ |
(12.8) |
$ |
3,013.1 |
|||||||
Cost of product sold |
2,237.1 |
41.2 |
(12.5) |
2,265.8 |
|||||||||||
Direct operating expenses (1) |
175.6 |
49.2 |
— |
224.8 |
|||||||||||
Major scheduled turnaround expenses |
1.7 |
0.4 |
— |
2.1 |
|||||||||||
Flood insurance recovery |
(27.3) |
— |
— |
(27.3) |
|||||||||||
Selling, general and administrative |
36.7 |
9.1 |
6.6 |
52.4 |
|||||||||||
Depreciation and amortization |
68.2 |
13.8 |
2.5 |
84.5 |
|||||||||||
Operating income (loss) |
$ |
360.0 |
$ |
60.2 |
$ |
(9.4) |
$ |
410.8 |
|||||||
Capital expenditures |
$ |
78.1 |
$ |
6.0 |
$ |
2.6 |
$ |
86.7 |
|||||||
(1) Excluding turnaround expenses. |
Petroleum (CVR Refining) |
Nitrogen Fertilizer (CVR Partners) |
Corporate and Other |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
June 30, 2016 |
|||||||||||||||
Cash and cash equivalents |
$ |
159.3 |
$ |
76.3 |
$ |
455.0 |
$ |
690.6 |
|||||||
Total assets |
2,192.7 |
1,352.6 |
511.1 |
4,056.4 |
|||||||||||
Total debt, including current portion |
573.4 |
625.3 |
(31.5) |
1,167.2 |
|||||||||||
December 31, 2015 |
|||||||||||||||
Cash and cash equivalents |
$ |
187.3 |
$ |
50.0 |
$ |
527.8 |
$ |
765.1 |
|||||||
Total assets (1) |
2,189.0 |
536.3 |
574.1 |
3,299.4 |
|||||||||||
Total debt, including current portion (1) |
573.8 |
124.8 |
(31.5) |
667.1 |
(1) Prior period amounts have been retrospectively adjusted for Accounting Standard Update No. 2015-03, which requires that costs incurred to issue debt be presented in the balance sheet as a direct reduction from the carrying value of the debt. |
Petroleum Segment Operating Data
The following tables set forth information about our consolidated Petroleum segment operated by CVR Refining, of which we own a majority interest and serve as the general partner, and the Coffeyville and Wynnewood refineries. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Petroleum segment for the quarter and six months ended June 30, 2016 are included in CVR Refining's press release dated July 28, 2016.
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum Segment Summary Financial Results: |
|||||||||||||||
Net sales |
$ |
1,164.4 |
$ |
1,547.5 |
$ |
1,998.4 |
$ |
2,852.0 |
|||||||
Cost of product sold |
941.9 |
1,180.9 |
1,664.2 |
2,237.1 |
|||||||||||
Direct operating expenses |
81.9 |
88.6 |
170.2 |
175.6 |
|||||||||||
Major scheduled turnaround expenses |
2.1 |
1.7 |
31.5 |
1.7 |
|||||||||||
Flood insurance recovery |
— |
(27.3) |
— |
(27.3) |
|||||||||||
Selling, general and administrative expenses |
16.8 |
18.6 |
35.3 |
36.7 |
|||||||||||
Depreciation and amortization |
31.6 |
34.2 |
63.1 |
68.2 |
|||||||||||
Operating income |
90.1 |
250.8 |
34.1 |
360.0 |
|||||||||||
Interest expense and other financing costs |
(10.1) |
(10.4) |
(20.9) |
(21.7) |
|||||||||||
Interest income |
— |
0.1 |
— |
0.2 |
|||||||||||
Loss on derivatives, net |
(1.9) |
(12.6) |
(3.1) |
(64.0) |
|||||||||||
Other income (expense), net |
— |
(0.1) |
— |
— |
|||||||||||
Income before income tax expense |
78.1 |
227.8 |
10.1 |
274.5 |
|||||||||||
Income tax expense (benefit) |
— |
— |
— |
— |
|||||||||||
Net income |
$ |
78.1 |
$ |
227.8 |
$ |
10.1 |
$ |
274.5 |
|||||||
Refining margin* |
$ |
222.5 |
$ |
366.6 |
$ |
334.2 |
$ |
614.9 |
|||||||
Gross profit* |
$ |
106.9 |
$ |
269.4 |
$ |
69.4 |
$ |
396.7 |
|||||||
Refining margin adjusted for FIFO impact* |
$ |
176.3 |
$ |
330.2 |
$ |
296.8 |
$ |
603.0 |
|||||||
Adjusted Petroleum EBITDA* |
$ |
84.7 |
$ |
194.3 |
$ |
119.8 |
$ |
356.0 |
* See "Use of Non-GAAP Financial Measures" below. |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(dollars per barrel) | |||||||||||||||
Petroleum Segment Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Refining margin* |
$ |
12.07 |
$ |
19.12 |
$ |
9.50 |
$ |
16.47 |
|||||||
FIFO impact, favorable |
(2.51) |
(1.90) |
(1.06) |
(0.32) |
|||||||||||
Refining margin adjusted for FIFO impact* |
9.56 |
17.22 |
8.44 |
16.15 |
|||||||||||
Gross profit* |
5.80 |
14.05 |
1.97 |
10.63 |
|||||||||||
Gross profit excluding flood insurance recovery* |
5.80 |
12.63 |
1.97 |
9.90 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
4.56 |
4.71 |
5.73 |
4.75 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
4.45 |
4.62 |
4.84 |
4.71 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
4.33 |
4.43 |
5.34 |
4.43 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
4.22 |
$ |
4.35 |
$ |
4.50 |
$ |
4.39 |
|||||||
Barrels sold (barrels per day) |
213,368 |
224,031 |
207,669 |
220,876 |
* See "Use of Non-GAAP Financial Measures" below. |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||||||||||||||
Petroleum Segment Summary Refining Throughput and Production Data (bpd): |
|||||||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||||||
Sweet |
176,674 |
83.9 |
% |
192,691 |
87.1 |
% |
173,700 |
85.5 |
% |
184,082 |
84.4 |
% | |||||||||||||||
Medium |
3,429 |
1.6 |
% |
1,082 |
0.5 |
% |
2,471 |
1.2 |
% |
3,841 |
1.8 |
% | |||||||||||||||
Heavy sour |
22,433 |
10.7 |
% |
16,954 |
7.7 |
% |
17,174 |
8.5 |
% |
18,298 |
8.4 |
% | |||||||||||||||
Total crude oil throughput |
202,536 |
96.2 |
% |
210,727 |
95.3 |
% |
193,345 |
95.2 |
% |
206,221 |
94.6 |
% | |||||||||||||||
All other feedstocks and blendstocks |
7,952 |
3.8 |
% |
10,368 |
4.7 |
% |
9,827 |
4.8 |
% |
11,855 |
5.4 |
% | |||||||||||||||
Total throughput |
210,488 |
100.0 |
% |
221,095 |
100.0 |
% |
203,172 |
100.0 |
% |
218,076 |
100.0 |
% | |||||||||||||||
Production: |
|||||||||||||||||||||||||||
Gasoline |
108,330 |
51.3 |
% |
107,439 |
48.3 |
% |
107,105 |
52.7 |
% |
108,263 |
49.3 |
% | |||||||||||||||
Distillate |
86,622 |
41.0 |
% |
95,881 |
43.1 |
% |
82,309 |
40.5 |
% |
92,675 |
42.1 |
% | |||||||||||||||
Other (excluding internally produced fuel) |
16,280 |
7.7 |
% |
19,160 |
8.6 |
% |
13,900 |
6.8 |
% |
19,011 |
8.6 |
% | |||||||||||||||
Total refining production (excluding internally produced fuel) |
211,232 |
100.0 |
% |
222,480 |
100.0 |
% |
203,314 |
100.0 |
% |
219,949 |
100.0 |
% | |||||||||||||||
Product price (dollars per gallon): |
|||||||||||||||||||||||||||
Gasoline |
$ |
1.44 |
$ |
1.87 |
$ |
1.24 |
$ |
1.67 |
|||||||||||||||||||
Distillate |
1.37 |
1.81 |
1.22 |
1.75 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Market Indicators (dollars per barrel): |
|||||||||||||||
West Texas Intermediate (WTI) NYMEX |
$ |
45.64 |
$ |
57.95 |
$ |
39.78 |
$ |
53.34 |
|||||||
Crude Oil Differentials: |
|||||||||||||||
WTI less WTS (light/medium sour) |
0.83 |
(0.71) |
0.49 |
0.12 |
|||||||||||
WTI less WCS (heavy sour) |
12.92 |
9.57 |
13.26 |
11.60 |
|||||||||||
NYMEX Crack Spreads: |
|||||||||||||||
Gasoline |
19.13 |
26.02 |
17.53 |
22.34 |
|||||||||||
Heating Oil |
12.82 |
21.69 |
12.37 |
24.33 |
|||||||||||
NYMEX 2-1-1 Crack Spread |
15.98 |
23.85 |
14.95 |
23.33 |
|||||||||||
PADD II Group 3 Basis: |
|||||||||||||||
Gasoline |
(5.49) |
(6.19) |
(5.68) |
(4.87) |
|||||||||||
Ultra Low Sulfur Diesel |
(1.18) |
(3.69) |
(1.10) |
(4.10) |
|||||||||||
PADD II Group 3 Product Crack Spread: |
|||||||||||||||
Gasoline |
13.64 |
19.83 |
11.85 |
17.47 |
|||||||||||
Ultra Low Sulfur Diesel |
11.63 |
18.00 |
11.27 |
20.23 |
|||||||||||
PADD II Group 3 2-1-1 |
12.64 |
18.91 |
11.56 |
18.85 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Coffeyville Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
778.0 |
$ |
1,006.3 |
$ |
1,306.0 |
$ |
1,858.0 |
|||||||
Cost of product sold |
630.7 |
764.8 |
1,093.4 |
1,465.7 |
|||||||||||
Refining margin* |
147.3 |
241.5 |
212.6 |
392.3 |
|||||||||||
Direct operating expenses |
46.1 |
51.2 |
93.8 |
101.5 |
|||||||||||
Major scheduled turnaround expenses |
2.1 |
1.7 |
31.5 |
1.7 |
|||||||||||
Flood insurance recovery |
— |
(27.3) |
— |
(27.3) |
|||||||||||
Depreciation and amortization |
16.8 |
19.5 |
33.6 |
38.9 |
|||||||||||
Gross profit* |
$ |
82.3 |
$ |
196.4 |
$ |
53.7 |
$ |
277.5 |
|||||||
Refining margin adjusted for FIFO impact* |
$ |
117.1 |
$ |
212.4 |
$ |
186.2 |
$ |
381.7 |
|||||||
Coffeyville Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Refining margin* |
$ |
12.71 |
$ |
20.27 |
$ |
9.99 |
$ |
16.82 |
|||||||
FIFO impact, favorable |
(2.62) |
(2.44) |
(1.24) |
(0.46) |
|||||||||||
Refining margin adjusted for FIFO impact* |
10.09 |
17.83 |
8.75 |
16.36 |
|||||||||||
Gross profit* |
7.10 |
16.49 |
2.53 |
11.89 |
|||||||||||
Gross profit excluding flood insurance recovery* |
7.10 |
14.20 |
2.53 |
10.72 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
4.16 |
4.43 |
5.89 |
4.43 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
3.98 |
4.29 |
4.41 |
4.35 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
3.84 |
4.03 |
5.28 |
4.00 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
3.67 |
$ |
3.90 |
$ |
3.95 |
$ |
3.94 |
|||||||
Barrels sold (barrels per day) |
138,021 |
144,183 |
130,429 |
142,587 |
* See "Use of Non-GAAP Financial Measures" below. |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||||||||||
Coffeyville Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
101,548 |
76.2 |
% |
112,867 |
81.2 |
% |
97,242 |
78.1 |
% |
106,734 |
77.3 |
% | |||||||||||
Medium |
3,429 |
2.6 |
% |
1,082 |
0.8 |
% |
2,471 |
2.0 |
% |
3,841 |
2.8 |
% | |||||||||||
Heavy sour |
22,433 |
16.8 |
% |
16,954 |
12.2 |
% |
17,174 |
13.8 |
% |
18,298 |
13.3 |
% | |||||||||||
Total crude oil throughput |
127,410 |
95.6 |
% |
130,903 |
94.2 |
% |
116,887 |
93.9 |
% |
128,873 |
93.4 |
% | |||||||||||
All other feedstocks and blendstocks |
5,844 |
4.4 |
% |
8,122 |
5.8 |
% |
7,594 |
6.1 |
% |
9,168 |
6.6 |
% | |||||||||||
Total throughput |
133,254 |
100.0 |
% |
139,025 |
100.0 |
% |
124,481 |
100.0 |
% |
138,041 |
100.0 |
% | |||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
67,819 |
49.9 |
% |
66,374 |
46.6 |
% |
65,927 |
52.2 |
% |
67,110 |
47.5 |
% | |||||||||||
Distillate |
57,549 |
42.4 |
% |
62,257 |
43.7 |
% |
52,348 |
41.4 |
% |
60,843 |
43.0 |
% | |||||||||||
Other (excluding internally produced fuel) |
10,491 |
7.7 |
% |
13,722 |
9.7 |
% |
8,130 |
6.4 |
% |
13,477 |
9.5 |
% | |||||||||||
Total refining production (excluding internally produced fuel) |
135,859 |
100.0 |
% |
142,353 |
100.0 |
% |
126,405 |
100.0 |
% |
141,430 |
100.0 |
% |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Wynnewood Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
385.3 |
$ |
540.1 |
$ |
690.1 |
$ |
991.8 |
|||||||
Cost of product sold |
311.3 |
415.9 |
570.7 |
771.4 |
|||||||||||
Refining margin* |
74.0 |
124.2 |
119.4 |
220.4 |
|||||||||||
Direct operating expenses |
35.8 |
37.5 |
76.4 |
74.1 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
— |
— |
|||||||||||
Depreciation and amortization |
12.6 |
12.5 |
25.3 |
25.1 |
|||||||||||
Gross profit* |
$ |
25.6 |
$ |
74.2 |
$ |
17.7 |
$ |
121.2 |
|||||||
Refining margin adjusted for FIFO impact* |
$ |
58.1 |
$ |
116.9 |
$ |
108.4 |
$ |
219.1 |
|||||||
Wynnewood Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Refining margin* |
$ |
10.83 |
$ |
17.10 |
$ |
8.58 |
$ |
15.74 |
|||||||
FIFO impact, favorable |
(2.32) |
(1.01) |
(0.79) |
(0.09) |
|||||||||||
Refining margin adjusted for FIFO impact* |
8.51 |
16.09 |
7.79 |
15.65 |
|||||||||||
Gross profit* |
3.74 |
10.21 |
1.27 |
8.66 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
5.24 |
5.16 |
5.49 |
5.29 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
5.24 |
5.16 |
5.49 |
5.29 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
5.22 |
5.16 |
$ |
5.44 |
$ |
5.23 |
|||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
5.22 |
$ |
5.16 |
$ |
5.44 |
$ |
5.23 |
|||||||
Barrels sold (barrels per day) |
75,347 |
79,848 |
77,239 |
78,289 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||||||||||
Wynnewood Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
75,126 |
97.3 |
% |
79,824 |
97.3 |
% |
76,458 |
97.2 |
% |
77,348 |
96.6 |
% | |||||||||||
Medium |
— |
— |
% |
— |
— |
% |
— |
— |
% |
— |
— |
% | |||||||||||
Heavy sour |
— |
— |
% |
— |
— |
% |
— |
— |
% |
— |
— |
% | |||||||||||
Total crude oil throughput |
75,126 |
97.3 |
% |
79,824 |
97.3 |
% |
76,458 |
97.2 |
% |
77,348 |
96.6 |
% | |||||||||||
All other feedstocks and blendstocks |
2,108 |
2.7 |
% |
2,246 |
2.7 |
% |
2,233 |
2.8 |
% |
2,687 |
3.4 |
% | |||||||||||
Total throughput |
77,234 |
100.0 |
% |
82,070 |
100.0 |
% |
78,691 |
100.0 |
% |
80,035 |
100.0 |
% | |||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
40,511 |
53.7 |
% |
41,065 |
51.2 |
% |
41,178 |
53.5 |
% |
41,153 |
52.4 |
% | |||||||||||
Distillate |
29,073 |
38.6 |
% |
33,624 |
42.0 |
% |
29,961 |
39.0 |
% |
31,832 |
40.5 |
% | |||||||||||
Other (excluding internally produced fuel) |
5,789 |
7.7 |
% |
5,438 |
6.8 |
% |
5,770 |
7.5 |
% |
5,534 |
7.1 |
% | |||||||||||
Total refining production (excluding internally produced fuel) |
75,373 |
100.0 |
% |
80,127 |
100.0 |
% |
76,909 |
100.0 |
% |
78,519 |
100.0 |
% |
* See "Use of Non-GAAP Financial Measures" below. |
Nitrogen Fertilizer Segment Operating Data
The following tables set forth information about the Nitrogen Fertilizer segment operated by CVR Partners, of which we owned approximately 34% of the common units as of June 30, 2016 and serve as the general partner. The financial and operational data for the three and six months ended June 30, 2016 include the results of the nitrogen fertilizer manufacturing facility located in East Dubuque, Illinois (the "East Dubuque Facility") beginning on April 1, 2016, the date of the closing of the acquisition. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Nitrogen Fertilizer segment for the quarter and six months ended June 30, 2016 are included in CVR Partners' press release dated July 28, 2016.
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer Segment Business Financial Results: |
|||||||||||||||
Net sales |
$ |
119.8 |
$ |
80.8 |
$ |
192.9 |
$ |
173.9 |
|||||||
Cost of product sold |
36.0 |
15.4 |
52.4 |
41.2 |
|||||||||||
Direct operating expenses |
47.6 |
24.7 |
71.3 |
49.2 |
|||||||||||
Major scheduled turnaround expenses |
6.6 |
0.4 |
6.6 |
0.4 |
|||||||||||
Selling, general and administrative expenses |
8.3 |
4.6 |
14.7 |
9.1 |
|||||||||||
Depreciation and amortization |
17.6 |
7.0 |
24.5 |
13.8 |
|||||||||||
Operating income |
3.7 |
28.7 |
23.4 |
60.2 |
|||||||||||
Interest expense and other financing costs |
(15.5) |
(1.7) |
(17.2) |
(3.4) |
|||||||||||
Loss on extinguishment of debt |
(5.1) |
— |
(5.1) |
— |
|||||||||||
Income (loss) before income tax expense |
(16.9) |
27.0 |
1.1 |
56.8 |
|||||||||||
Income tax expense (benefit) |
0.1 |
— |
0.1 |
— |
|||||||||||
Net income (loss) |
$ |
(17.0) |
$ |
27.0 |
$ |
1.0 |
$ |
56.8 |
|||||||
Adjusted Nitrogen Fertilizer EBITDA* |
$ |
29.1 |
$ |
36.1 |
$ |
57.0 |
$ |
74.5 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Nitrogen Fertilizer Segment Key Operating Statistics: |
|||||||||||||||
Consolidated sales (thousand tons): |
|||||||||||||||
Ammonia |
73.6 |
6.3 |
98.0 |
19.1 |
|||||||||||
UAN |
339.4 |
249.8 |
606.4 |
524.3 |
|||||||||||
Consolidated product pricing at gate (dollars per ton) (1): |
|||||||||||||||
Ammonia |
$ |
417 |
$ |
546 |
$ |
405 |
$ |
551 |
|||||||
UAN |
$ |
199 |
$ |
269 |
$ |
202 |
$ |
265 |
|||||||
Consolidated production volume (thousand tons): |
|||||||||||||||
Ammonia (gross produced) (2) |
171.5 |
107.1 |
285.1 |
203.0 |
|||||||||||
Ammonia (net available for sale) (2)(3) |
45.6 |
4.4 |
60.7 |
19.1 |
|||||||||||
UAN |
296.5 |
253.5 |
544.7 |
505.6 |
|||||||||||
Feedstock: |
|||||||||||||||
Petroleum coke used in production (thousand tons) |
130.6 |
128.2 |
257.5 |
253.1 |
|||||||||||
Petroleum coke used in production (dollars per ton) |
$ |
12 |
$ |
25 |
$ |
15 |
$ |
27 |
|||||||
Natural gas used in production (MMBtu) (4) |
1,396.1 |
— |
1,396.1 |
— |
|||||||||||
Natural gas used in production (dollars per MMBtu) (4) |
$ |
2.41 |
$ |
— |
$ |
2.41 |
$ |
— |
|||||||
Natural gas in cost of product sold (MMBtu) (4) |
1,063.0 |
— |
1,063.0 |
— |
|||||||||||
Natural gas in cost of product sold (dollars per MMBtu) (4) |
$ |
2.33 |
$ |
— |
$ |
2.33 |
$ |
— |
|||||||
Coffeyville Facility on-stream factor (5): |
|||||||||||||||
Gasification |
98.0 |
% |
100.0 |
% |
97.8 |
% |
99.7 |
% | |||||||
Ammonia |
96.6 |
% |
99.3 |
% |
96.9 |
% |
96.9 |
% | |||||||
UAN |
93.7 |
% |
96.6 |
% |
92.5 |
% |
97.2 |
% | |||||||
East Dubuque Facility on-stream factors (5): |
|||||||||||||||
Ammonia |
68.6 |
% |
— |
% |
68.6 |
% |
— |
% | |||||||
UAN |
69.1 |
% |
— |
% |
69.1 |
% |
— |
% | |||||||
Market Indicators: |
|||||||||||||||
Ammonia — Southern Plains (dollars per ton) |
$ |
419 |
$ |
546 |
$ |
397 |
$ |
550 |
|||||||
Ammonia — Corn belt (dollars per ton) |
$ |
489 |
$ |
601 |
$ |
465 |
$ |
604 |
|||||||
UAN — Corn belt (dollars per ton) |
$ |
239 |
$ |
305 |
$ |
234 |
$ |
309 |
|||||||
Natural gas NYMEX (dollars per MMBtu) |
$ |
2.25 |
$ |
2.74 |
$ |
2.12 |
$ |
2.77 |
|||||||
Cost of product sold, direct operating expenses and selling, general and administrative expenses are all reflected exclusive of depreciation and amortization. | |
* See Use of Non-GAAP Financial Measures below. |
(1) |
Product pricing at gate per ton represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry. |
(2) |
Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represent the ammonia available for sale that was not upgraded into other fertilizer products. |
(3) |
In addition to the produced ammonia, the Nitrogen Fertilizer segment acquired approximately 5,000 tons and 600 tons of ammonia during the three months ended June 30, 2016 and 2015, respectively. The Nitrogen Fertilizer segment acquired approximately 8,000 tons and 21,800 tons of ammonia during the six months ended June 30, 2016 and 2015, respectively. |
(4) |
The cost per MMBtu excludes derivative activity, when applicable. The impact of natural gas derivative activity during the three and six months ended June 30, 2016 and 2015 was not material. |
(5) |
On-stream factor is the total number of hours operated divided by the total number of hours in the reporting period and is a measure of operating efficiency. |
Excluding the impact of the full facility turnaround at the East Dubuque Facility, the on-stream factors for the East Dubuque Facility would have been 100.0% for ammonia and 99.6% for UAN for the three months ended June 30, 2016.
Use of Non-GAAP Financial Measures
To supplement the Company's actual results in accordance with GAAP for the applicable periods, the Company also uses the non-GAAP financial measures noted above, which are reconciled to our GAAP-based results below. These non-GAAP financial measures should not be considered an alternative for GAAP results. The adjustments are provided to enhance an overall understanding of the Company's financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.
Adjusted net income is not a recognized term under GAAP and should not be substituted for net income as a measure of our performance but rather should be utilized as a supplemental measure of financial performance in evaluating our business. Management believes that adjusted net income provides relevant and useful information that enables external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, to better understand and evaluate our ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance. Adjusted net income per diluted share represents adjusted net income divided by weighted-average diluted shares outstanding.
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Reconciliation of Net Income to Adjusted Net Income: |
|||||||||||||||
Income before income tax expense |
$ |
65.4 |
$ |
250.2 |
$ |
12.7 |
$ |
358.9 |
|||||||
Adjustments: |
|||||||||||||||
FIFO impact, favorable |
(46.2) |
(36.4) |
(37.4) |
(11.9) |
|||||||||||
Share-based compensation (1) |
— |
1.9 |
— |
5.9 |
|||||||||||
Major scheduled turnaround expenses |
8.7 |
2.1 |
38.1 |
2.1 |
|||||||||||
Loss on derivatives, net |
1.9 |
12.6 |
3.1 |
64.0 |
|||||||||||
Current period settlement on derivative contracts (2) |
7.1 |
(28.5) |
28.5 |
(34.8) |
|||||||||||
Flood insurance recovery (3) |
— |
(27.3) |
— |
(27.3) |
|||||||||||
Loss on extinguishment of debt (4) |
5.1 |
— |
5.1 |
— |
|||||||||||
Expenses associated with the East Dubuque Merger (5) |
1.2 |
— |
2.5 |
— |
|||||||||||
Adjusted net income before income tax expense and noncontrolling interest |
43.2 |
174.6 |
52.6 |
356.9 |
|||||||||||
Adjusted net loss attributed to noncontrolling interest |
(11.9) |
(63.8) |
(18.6) |
(117.5) |
|||||||||||
Income tax expense, as adjusted |
(14.2) |
(38.7) |
(8.5) |
(82.4) |
|||||||||||
Adjusted net income attributable to CVR Energy stockholders |
$ |
17.1 |
$ |
72.1 |
$ |
25.5 |
$ |
157.0 |
|||||||
Adjusted net income per diluted share |
$ |
0.20 |
$ |
0.83 |
$ |
0.29 |
$ |
1.81 |
Refining margin per crude oil throughput barrel is a measurement calculated as the difference between the Petroleum segment's net sales and cost of product sold (exclusive of depreciation and amortization). Refining margin is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of product sold at which they are able to sell refined products. Each of the components used in this calculation (net sales and cost of product sold exclusive of depreciation and amortization) can be taken directly from our Petroleum segment's Statements of Operations. Our calculation of refining margin may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. In order to derive the refining margin per crude oil throughput barrel, we utilize the total dollar figures for refining margin as derived above and divide by the applicable number of crude oil throughput barrels for the period. We believe that refining margin is important to enable investors to better understand and evaluate the Petroleum segment's ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance.
Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference between the Petroleum segment's net sales and cost of product sold (exclusive of depreciation and amortization) adjusted for FIFO impact. Refining margin adjusted for FIFO impact is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of product sold (taking into account the impact of the utilization of FIFO) at which they are able to sell refined products. Our calculation of refining margin adjusted for FIFO impact may differ from calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. Under the FIFO accounting method, changes in crude oil prices can cause fluctuations in the inventory valuation of crude oil, work in process and finished goods, thereby resulting in a favorable FIFO impact when crude oil prices increase and an unfavorable FIFO impact when crude oil prices decrease.
Gross profit (loss) is calculated as the difference between the Petroleum segment's net sales, cost of product sold (exclusive of depreciation and amortization), direct operating expenses (exclusive of depreciation and amortization), major scheduled turnaround expenses, flood insurance recovery and depreciation and amortization. Gross profit (loss) per crude throughput barrel is calculated as gross profit (loss) as derived above divided by the refineries' crude oil throughput volumes for the respective periods presented. Gross profit (loss) is a non-GAAP measure that should not be substituted for operating income. Management believes it is important to investors in evaluating the refineries' performance and the Petroleum segment's ongoing operating results. Our calculation of gross profit (loss) may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure.
EBITDA and Adjusted EBITDA. EBITDA represents net income (loss) before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA represents EBITDA adjusted for (i) FIFO impact (favorable) unfavorable; (ii) loss on extinguishment of debt; (iii) major scheduled turnaround expenses; (iv) (gain) loss on derivatives, net; (v) current period settlements on derivative contracts; (vi) flood insurance recovery; and (vii) expenses associated with the East Dubuque Merger. EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be substituted for net income (loss) or cash flow from operations. Management believes that EBITDA and Adjusted EBITDA enable investors to better understand and evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.
EBITDA for the quarter and six months ended June 30, 2015 was also adjusted for share-based compensation expense in calculating Adjusted EBITDA. Beginning in 2016, share-based compensation expense is no longer utilized as an adjustment to derive Adjusted EBITDA as no equity-settled awards remain outstanding for CVR Energy or any of its subsidiaries, and CVR Partners and CVR Refining are responsible for reimbursing CVR Energy for their allocated portion of all outstanding awards. Management believes, based on the nature, classification and cash settlement feature of the currently outstanding awards, that it is no longer necessary to adjust EBITDA for share-based compensation expense to derive Adjusted EBITDA. For comparison purposes we have also provided Adjusted EBITDA for the quarter and six months ended June 30, 2015 without adjusting for share-based compensation expense in order to provide a comparison to Adjusted EBITDA for the quarter and six months ended June 30, 2016.
A reconciliation of net income to EBITDA and EBITDA to Adjusted EBITDA for the quarter and six months ended June 30, 2016 and 2015 is as follows:
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Net income attributable to CVR Energy stockholders |
$ |
28.4 |
$ |
101.9 |
$ |
12.2 |
$ |
156.7 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
18.4 |
11.6 |
30.3 |
24.2 |
|||||||||||
Income tax expense (benefit) |
21.6 |
58.1 |
(0.2) |
82.1 |
|||||||||||
Depreciation and amortization |
50.7 |
42.5 |
90.7 |
84.5 |
|||||||||||
EBITDA adjustments included in noncontrolling interest |
(36.0) |
(19.2) |
(54.4) |
(38.7) |
|||||||||||
EBITDA |
83.1 |
194.9 |
78.6 |
308.8 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact, favorable |
(46.2) |
(36.4) |
(37.4) |
(11.9) |
|||||||||||
Share-based compensation (1) |
— |
1.9 |
— |
5.9 |
|||||||||||
Major scheduled turnaround expenses |
8.7 |
2.1 |
38.1 |
2.1 |
|||||||||||
Loss on derivatives, net |
1.9 |
12.6 |
3.1 |
64.0 |
|||||||||||
Current period settlement on derivative contracts (2) |
7.1 |
(28.5) |
28.5 |
(34.8) |
|||||||||||
Flood insurance recovery (3) |
— |
(27.3) |
— |
(27.3) |
|||||||||||
Loss on extinguishment of debt (4) |
5.1 |
— |
5.1 |
— |
|||||||||||
Expenses associated with the East Dubuque Merger (5) |
1.2 |
— |
2.5 |
— |
|||||||||||
Adjustments included in noncontrolling interest |
3.5 |
26.4 |
(17.9) |
2.6 |
|||||||||||
Adjusted EBITDA |
$ |
64.4 |
$ |
145.7 |
$ |
100.6 |
$ |
309.4 |
Petroleum and Nitrogen Fertilizer EBITDA and Adjusted EBITDA. EBITDA by operating segment represents net income (loss) before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA by operating segment represents EBITDA by operating segment adjusted for (i) FIFO impact (favorable) unfavorable; (ii) share-based compensation, non-cash; (iii) loss on extinguishment of debt; (iv) major scheduled turnaround expenses; (v) (gain) loss on derivatives, net; (vi) current period settlements on derivative contracts; (vii) flood insurance recovery and (viii) expenses associated with the East Dubuque Merger. We present Adjusted EBITDA by operating segment because it is the starting point for CVR Refining's and CVR Partners' calculation of available cash for distribution. EBITDA and Adjusted EBITDA by operating segment are not recognized terms under GAAP and should not be substituted for net income (loss) as a measure of performance. Management believes that EBITDA and Adjusted EBITDA by operating segment enable investors to better understand CVR Refining's and CVR Partners' ability to make distributions to their common unitholders, help investors evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.
A reconciliation of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA for the Petroleum and Nitrogen Fertilizer segments for the quarter and six months ended June 30, 2016 and 2015 is as follows:
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum: |
|||||||||||||||
Petroleum net income |
$ |
78.1 |
$ |
227.8 |
$ |
10.1 |
$ |
274.5 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
10.1 |
10.3 |
20.9 |
21.5 |
|||||||||||
Income tax expense (benefit) |
— |
— |
— |
— |
|||||||||||
Depreciation and amortization |
31.6 |
34.2 |
63.1 |
68.2 |
|||||||||||
Petroleum EBITDA |
119.8 |
272.3 |
94.1 |
364.2 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact, favorable |
(46.2) |
(36.4) |
(37.4) |
(11.9) |
|||||||||||
Share-based compensation, non-cash |
— |
(0.1) |
— |
0.1 |
|||||||||||
Major scheduled turnaround expenses |
2.1 |
1.7 |
31.5 |
1.7 |
|||||||||||
Loss on derivatives, net |
1.9 |
12.6 |
3.1 |
64.0 |
|||||||||||
Current period settlements on derivative contracts (2) |
7.1 |
(28.5) |
28.5 |
(34.8) |
|||||||||||
Flood insurance recovery (3) |
— |
(27.3) |
— |
(27.3) |
|||||||||||
Adjusted Petroleum EBITDA |
$ |
84.7 |
$ |
194.3 |
$ |
119.8 |
$ |
356.0 |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer: |
|||||||||||||||
Nitrogen fertilizer net income (loss) |
$ |
(17.0) |
$ |
27.0 |
$ |
1.0 |
$ |
56.8 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net |
15.5 |
1.7 |
17.2 |
3.4 |
|||||||||||
Income tax expense (benefit) |
0.1 |
— |
0.1 |
— |
|||||||||||
Depreciation and amortization |
17.6 |
7.0 |
24.5 |
13.8 |
|||||||||||
Nitrogen Fertilizer EBITDA |
16.2 |
35.7 |
42.8 |
74.0 |
|||||||||||
Add: |
|||||||||||||||
Share-based compensation, non-cash |
— |
— |
— |
0.1 |
|||||||||||
Major scheduled turnaround expenses |
6.6 |
0.4 |
6.6 |
0.4 |
|||||||||||
Loss on extinguishment of debt (4) |
5.1 |
— |
5.1 |
— |
|||||||||||
Expenses associated with the East Dubuque Merger (5) |
1.2 |
— |
2.5 |
— |
|||||||||||
Adjusted Nitrogen Fertilizer EBITDA |
$ |
29.1 |
$ |
36.1 |
$ |
57.0 |
$ |
74.5 |
|||||||
(1) |
Beginning in 2016, share-based compensation expense is no longer utilized as an adjustment to derive Adjusted net income and Adjusted EBITDA as no equity-settled awards remain outstanding for CVR Energy or any of its subsidiaries, and CVR Partners and CVR Refining are responsible for reimbursing CVR Energy for their allocated portion of all outstanding awards. Management believes, based on the nature, classification and cash settlement feature of the currently outstanding awards, that it is no longer necessary to adjust net income (loss) and EBITDA for share-based compensation expense to derive Adjusted net income and Adjusted EBITDA. Adjusted net income attributable to CVR Energy stockholders and Adjusted EBITDA for the three months ended June 30, 2015 would have been $71.0 million and $143.8 million, respectively, without adjusting for share-based compensation expense of $1.9 million. Additionally, adjusted net income attributable to CVR Energy stockholders and Adjusted EBITDA for the six months ended June 30, 2015 would have been $153.5 million and $303.5 million, respectively, without adjusting for share-based compensation expense of $5.9 million. |
(2) |
Represents the portion of gain (loss) on derivatives, net related to contracts that matured during the respective periods and settled with counterparties. There are no premiums paid or received at inception of the derivative contracts and upon settlement, there is no cost recovery associated with these contracts. |
(3) |
Represents an insurance recovery from Coffeyville Resources Refining and Marketing, LLC's environmental insurance carriers as a result of the flood and crude oil discharge at the Coffeyville refinery on June/July 2007. |
(4) |
Represents a loss on extinguishment of debt incurred by CVR Partners in June 2016 in connection with the repurchase of senior notes assumed in the East Dubuque Merger, which includes a prepayment premium and write-off of the unamortized purchase accounting adjustment. |
(5) |
On April 1, 2016, CVR Partners completed the East Dubuque Merger. The Nitrogen Fertilizer Partnership incurred legal and other professional fees and other merger related expenses for the quarter and six months ended June 30, 2016 that are referred to herein as expenses associated with the East Dubuque Merger, which are included in selling, general and administrative expenses. |
Logo - http://photos.prnewswire.com/prnh/20071203/CVRLOGO
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, July 14, 2016 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced that it will release its 2016 second quarter results on Thursday, July 28, before the open of New York Stock Exchange trading. Chief Executive Officer Jack Lipinski and other executives will host a teleconference call for analysts and investors on July 28 at 3 p.m. Eastern.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/15908. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/15908. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13639905.
CVR Energy's 2016 second quarter earnings news release will be distributed via PR Newswire and posted at www.CVREnergy.com.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Angie Dasbach
CVR Energy, Inc.
(281) 207-3550
MediaRelations@CVREnergy.com
Logo - http://photos.prnewswire.com/prnh/20071203/CVRLOGO
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, April 28, 2016 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced a net loss of $16.2 million, or 19 cents per diluted share, on net sales of $905.5 million for the first quarter of 2016, compared to net income of $54.9 million, or 63 cents per diluted share, on net sales of $1,388.9 million for the 2015 first quarter. Net income for the 2016 first quarter was negatively impacted by the downtime associated with the final phase of a major scheduled turnaround at CVR Refining's Coffeyville refinery.
First quarter 2016 adjusted EBITDA, a non-GAAP financial measure, was $36.2 million, compared to first quarter 2015 adjusted EBITDA of $163.7 million.
"CVR Energy's 2016 first quarter results were primarily impacted by weak crack spreads and the scheduled downtime related to the successful completion of the Coffeyville refinery turnaround," said Jack Lipinski, CVR Energy's chief executive officer. "CVR Partners posted strong operational results for the quarter and completed its acquisition of Rentech Nitrogen Partners, L.P. at the beginning of April."
CVR Energy also announced a first quarter 2016 cash dividend of 50 cents per share. The dividend, as declared by CVR Energy's Board of Directors, will be paid on May 16, 2016, to stockholders of record on May 9, 2016.
Today, CVR Partners announced a 2016 first quarter cash distribution of 27 cents per common unit. CVR Refining announced that it will not pay a cash distribution for the 2016 first quarter.
Petroleum Business
The petroleum business, which is operated by CVR Refining and includes the Coffeyville and Wynnewood refineries, reported a first quarter 2016 operating loss of $56.0 million on net sales of $834.0 million, compared to operating income of $109.2 million on net sales of $1,304.4 million in the first quarter of 2015.
Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $7.19 in the 2016 first quarter, compared to $15.03 during the same period in 2015. Direct operating expenses, including major scheduled turnaround expenses, per barrel sold, exclusive of depreciation and amortization, for the 2016 first quarter were $6.40, compared to $4.44 in the first quarter of 2015.
First quarter 2016 throughputs of crude oil and all other feedstocks and blendstocks totaled 195,859 barrels per day (bpd), compared to first quarter 2015 throughputs of crude oil and all other feedstocks and blendstocks of 215,023 bpd.
Nitrogen Fertilizers Business
The fertilizer business, operated by CVR Partners, reported first quarter 2016 operating income of $19.7 million on net sales of $73.1 million, compared to operating income of $31.5 million on net sales of $93.1 million for the first quarter of 2015.
For the first quarter of 2016, average realized gate prices for UAN and ammonia were $209 per ton and $367 per ton, respectively, compared to $263 per ton and $553 per ton, respectively, for the same period in 2015.
CVR Partners produced 113,700 tons of ammonia and purchased an additional 3,000 tons of ammonia during the first quarter of 2016, of which 15,100 net tons were available for sale while the rest was upgraded to 248,200 tons of UAN. In the 2015 first quarter, the plant produced 96,000 tons of ammonia and purchased an additional 21,200 tons of ammonia, of which 14,600 net tons were available for sale while the remainder was upgraded to 252,100 tons of UAN.
Cash and Debt
Consolidated cash and cash equivalents, which included $145.9 million for CVR Refining and $52.0 million for CVR Partners, was $681.8 million at March 31, 2016. Consolidated total debt was $673.1 million, or $667.1 million net of $6.0 million unamortized debt issue costs, at March 31, 2016. The company had no debt exclusive of CVR Refining's and CVR Partners' debt.
First Quarter 2016 Earnings Conference Call
CVR Energy previously announced that it will host its first quarter 2016 Earnings Conference Call for analysts and investors on Thursday, April 28, at 3 p.m. Eastern. The Earnings Conference Call may also include discussion of company developments, forward-looking information and other material information about business and financial matters.
The Earnings Conference Call will be broadcast live over the Internet at
https://www.webcaster4.com/Webcast/Page/1003/14528. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived and available for 14 days at
https://www.webcaster4.com/Webcast/Page/1003/14528. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13634754.
Forward-Looking Statements
This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "explore," "evaluate," "intend," "may," "might," "plan," "potential," "predict," "seek," "should," or "will," or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. For a discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings. These risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. CVR Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Angie Dasbach
CVR Energy, Inc.
281-207-3550
MediaRelations@CVREnergy.com
CVR Energy, Inc. | |||||||
Financial and Operations Data (all information in this release is unaudited unless noted otherwise). | |||||||
Three Months Ended | |||||||
2016 |
2015 | ||||||
(in millions, except per share data) | |||||||
Consolidated Statement of Operations Data: |
|||||||
Net sales |
$ |
905.5 |
$ |
1,388.9 |
|||
Cost of product sold |
736.8 |
1,073.6 |
|||||
Direct operating expenses |
141.4 |
111.4 |
|||||
Selling, general and administrative expenses |
27.2 |
25.3 |
|||||
Depreciation and amortization |
40.0 |
42.0 |
|||||
Operating income (loss) |
(39.9) |
136.6 |
|||||
Interest expense and other financing costs |
(12.1) |
(12.7) |
|||||
Interest income |
0.2 |
0.2 |
|||||
Loss on derivatives, net |
(1.2) |
(51.4) |
|||||
Other income, net |
0.3 |
36.0 |
|||||
Income (loss) before income tax expense |
(52.7) |
108.7 |
|||||
Income tax expense (benefit) |
(21.8) |
24.0 |
|||||
Net income (loss) |
(30.9) |
84.7 |
|||||
Less: Net income (loss) attributable to noncontrolling interest |
(14.7) |
29.8 |
|||||
Net income (loss) attributable to CVR Energy stockholders |
$ |
(16.2) |
$ |
54.9 |
|||
Basic earnings (loss) per share |
$ |
(0.19) |
$ |
0.63 |
|||
Diluted earnings (loss) per share |
$ |
(0.19) |
$ |
0.63 |
|||
Dividends declared per share |
$ |
0.50 |
$ |
0.50 |
|||
Adjusted EBITDA* |
$ |
36.2 |
$ |
163.7 |
|||
Adjusted net income* |
$ |
8.4 |
$ |
84.9 |
|||
Adjusted net income, per diluted share* |
$ |
0.10 |
$ |
0.98 |
|||
Weighted-average common shares outstanding: |
|||||||
Basic |
86.8 |
86.8 |
|||||
Diluted |
86.8 |
86.8 |
As of March 31, |
As of December 31, | |||||||||||
(audited) | ||||||||||||
(in millions) | ||||||||||||
Balance Sheet Data: |
||||||||||||
Cash and cash equivalents |
$ |
681.8 |
$ |
765.1 |
||||||||
Working capital (1) |
679.5 |
789.0 |
||||||||||
Total assets (1) |
3,183.5 |
3,299.4 |
||||||||||
Total debt, including current portion (1) |
667.1 |
667.1 |
||||||||||
Total CVR stockholders' equity |
924.5 |
984.1 |
||||||||||
_____________________________ | ||||||||||||
(1) Prior period amounts have been retrospectively adjusted for Accounting Standard Update No. 2015-03, which requires that costs incurred to issue debt be presented in the balance sheet as a direct reduction from the carrying value of the debt. |
Three Months Ended | |||||||
2016 |
2015 | ||||||
(in millions) | |||||||
Cash Flow Data: |
|||||||
Net cash flow provided by (used in): |
|||||||
Operating activities |
$ |
21.6 |
$ |
178.2 |
|||
Investing activities |
(51.7) |
(3.4) |
|||||
Financing activities |
(53.2) |
(76.3) |
|||||
Net cash flow |
$ |
(83.3) |
$ |
98.5 |
Segment Information
Our operations are organized into two reportable segments, Petroleum and Nitrogen Fertilizer. Our operations that are not included in the Petroleum and Nitrogen Fertilizer segments are included in the Corporate and Other segment (along with elimination of intersegment transactions). The Petroleum segment is operated by CVR Refining, LP ("CVR Refining"), in which we own a majority interest as well as the general partner. The Petroleum segment includes the operations of the Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with the crude oil gathering and pipeline systems. Detailed operating results for the Petroleum segment for the three months ended March 31, 2016 are included in CVR Refining's press release dated April 28, 2016. The Nitrogen Fertilizer segment is operated by CVR Partners, LP, ("CVR Partners") in which we owned a majority interest as of March 31, 2016 and serve as the general partner. On April 1, 2016, CVR Partners completed the previously announced merger transactions contemplated by the Agreement and Plan of Merger, dated as of August 9, 2015, with East Dubuque Nitrogen Partners, L.P. (formerly known as Rentech Nitrogen Partners, L.P.) and East Dubuque Nitrogen GP, LLC (formerly known as Rentech Nitrogen GP, LLC) (together "East Dubuque") with East Dubuque continuing as surviving entities and wholly-owned subsidiaries of CVR Partners. The Nitrogen Fertilizer segment consists of a nitrogen fertilizer manufacturing facility located in Coffeyville, Kansas that utilizes a pet coke gasification process in producing nitrogen fertilizer, and as of April 1, 2016, a nitrogen fertilizer manufacturing facility located in East Dubuque, Illinois that utilizes natural gas in producing nitrogen fertilizer. Detailed operating results for the Nitrogen Fertilizer segment for the three months ended March 31, 2016 are included in CVR Partners' press release dated April 28, 2016.
Petroleum |
Nitrogen |
Corporate and |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended March 31, 2016 |
|||||||||||||||
Net sales |
$ |
834.0 |
$ |
73.1 |
$ |
(1.6) |
$ |
905.5 |
|||||||
Cost of product sold |
722.3 |
16.3 |
(1.8) |
736.8 |
|||||||||||
Direct operating expenses(1) |
88.3 |
23.7 |
— |
112.0 |
|||||||||||
Major scheduled turnaround expenses |
29.4 |
— |
— |
29.4 |
|||||||||||
Selling, general and administrative |
18.5 |
6.4 |
2.3 |
27.2 |
|||||||||||
Depreciation and amortization |
31.5 |
7.0 |
1.5 |
40.0 |
|||||||||||
Operating income (loss) |
$ |
(56.0) |
$ |
19.7 |
$ |
(3.6) |
$ |
(39.9) |
|||||||
Capital expenditures |
$ |
44.0 |
$ |
1.7 |
$ |
1.8 |
$ |
47.5 |
Petroleum |
Nitrogen |
Corporate and |
Consolidated | |||||||||||||||
(in millions) | ||||||||||||||||||
Three Months Ended March 31, 2015 |
||||||||||||||||||
Net sales |
$ |
1,304.4 |
$ |
93.1 |
$ |
(8.6) |
$ |
1,388.9 |
||||||||||
Cost of product sold |
1,056.1 |
25.8 |
(8.3) |
1,073.6 |
||||||||||||||
Direct operating expenses(1) |
87.0 |
24.4 |
— |
111.4 |
||||||||||||||
Selling, general and administrative |
18.1 |
4.6 |
2.6 |
25.3 |
||||||||||||||
Depreciation and amortization |
34.0 |
6.8 |
1.2 |
42.0 |
||||||||||||||
Operating income (loss) |
$ |
109.2 |
$ |
31.5 |
$ |
(4.1) |
$ |
136.6 |
||||||||||
Capital expenditures |
$ |
41.7 |
$ |
2.7 |
$ |
1.1 |
$ |
45.5 |
||||||||||
(1) Excluding turnaround expenses. | ||||||||||||||||||
Petroleum |
Nitrogen |
Corporate and |
Consolidated | ||||||||||||
(in millions) | |||||||||||||||
March 31, 2016 |
|||||||||||||||
Cash and cash equivalents |
$ |
145.9 |
$ |
52.0 |
$ |
483.9 |
$ |
681.8 |
|||||||
Total assets |
2,116.9 |
529.2 |
537.4 |
3,183.5 |
|||||||||||
Total debt, net of current portion and unamortized debt issuance cost |
573.6 |
125.0 |
(31.5) |
667.1 |
|||||||||||
December 31, 2015 |
|||||||||||||||
Cash and cash equivalents |
$ |
187.3 |
$ |
50.0 |
$ |
527.8 |
$ |
765.1 |
|||||||
Total assets (1) |
2,189.0 |
536.3 |
574.1 |
3,299.4 |
|||||||||||
Total debt, net of current portion and unamortized debt issuance cost (1) |
573.8 |
124.8 |
(31.5) |
667.1 |
|||||||||||
_____________________________ | |||||||||||||||
(1) Prior period amounts have been retrospectively adjusted for Accounting Standard Update No. 2015-03, which requires that costs incurred to issue debt be presented in the balance sheet as a direct reduction from the carrying value of the debt. |
Petroleum Segment Operating Data
The following tables set forth information about our consolidated Petroleum segment operated by CVR Refining, of which we own a majority interest and serve as the general partner, and the Coffeyville and Wynnewood refineries. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Petroleum segment for the three months ended March 31, 2016 are included in CVR Refining's press release dated April 28, 2016.
Three Months Ended | |||||||
2016 |
2015 | ||||||
(in millions) | |||||||
Petroleum Segment Summary Financial Results: |
|||||||
Net sales |
$ |
834.0 |
$ |
1,304.4 |
|||
Cost of product sold |
722.3 |
1,056.1 |
|||||
Direct operating expenses |
88.3 |
87.0 |
|||||
Major scheduled turnaround expenses |
29.4 |
— |
|||||
Selling, general and administrative expenses |
18.5 |
18.1 |
|||||
Depreciation and amortization |
31.5 |
34.0 |
|||||
Operating income (loss) |
(56.0) |
109.2 |
|||||
Interest expense and other financing costs |
(10.8) |
(11.3) |
|||||
Interest income |
— |
0.1 |
|||||
Loss on derivatives, net |
(1.2) |
(51.4) |
|||||
Other income, net |
— |
0.1 |
|||||
Income (loss) before income tax expense |
(68.0) |
46.7 |
|||||
Income tax expense |
— |
— |
|||||
Net income (loss) |
$ |
(68.0) |
$ |
46.7 |
|||
Refining margin* |
$ |
111.7 |
$ |
248.3 |
|||
Gross profit (loss)* |
$ |
(37.5) |
$ |
127.3 |
|||
Refining margin adjusted for FIFO impact* |
$ |
120.5 |
$ |
272.8 |
|||
Adjusted Petroleum EBITDA* |
$ |
35.1 |
$ |
161.7 |
Three Months Ended | |||||||
2016 |
2015 | ||||||
(dollars per barrel) | |||||||
Petroleum Segment Key Operating Statistics: |
|||||||
Per crude oil throughput barrel: |
|||||||
Refining margin* |
$ |
6.67 |
$ |
13.68 |
|||
FIFO impact, unfavorable |
0.52 |
1.35 |
|||||
Refining margin adjusted for FIFO impact* |
7.19 |
15.03 |
|||||
Gross profit (loss)* |
(2.24) |
7.02 |
|||||
Direct operating expenses and major scheduled turnaround expenses |
7.02 |
4.79 |
|||||
Direct operating expenses excluding major scheduled turnaround expenses |
5.27 |
4.79 |
|||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
6.40 |
4.44 |
|||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
4.80 |
$ |
4.44 |
|||
Barrels sold (barrels per day) |
201,970 |
217,686 |
Three Months Ended | |||||||||||||
2016 |
2015 | ||||||||||||
Petroleum Segment Summary Refining Throughput and Production Data (bpd): |
|||||||||||||
Throughput: |
|||||||||||||
Sweet |
170,728 |
87.2% |
175,376 |
81.6% | |||||||||
Medium |
1,513 |
0.8% |
6,630 |
3.1% | |||||||||
Heavy sour |
11,914 |
6.0% |
19,658 |
9.1% | |||||||||
Total crude oil throughput |
184,155 |
94.0% |
201,664 |
93.8% | |||||||||
All other feedstocks and blendstocks |
11,704 |
6.0% |
13,359 |
6.2% | |||||||||
Total throughput |
195,859 |
100.0% |
215,023 |
100.0% | |||||||||
Production: |
|||||||||||||
Gasoline |
105,878 |
54.2% |
109,096 |
50.2% | |||||||||
Distillate |
77,996 |
39.9% |
89,436 |
41.1% | |||||||||
Other (excluding internally produced fuel) |
11,519 |
5.9% |
18,857 |
8.7% | |||||||||
Total refining production (excluding internally produced fuel) |
195,393 |
100.0% |
217,389 |
100.0% | |||||||||
Product price (dollars per gallon): |
|||||||||||||
Gasoline |
$ |
1.04 |
$ |
1.48 |
|||||||||
Distillate |
1.05 |
1.69 |
Three Months Ended | |||||||
2016 |
2015 | ||||||
Market Indicators (dollars per barrel): |
|||||||
West Texas Intermediate (WTI) NYMEX |
$ |
33.63 |
$ |
48.57 |
|||
Crude Oil Differentials: |
|||||||
WTI less WTS (light/medium sour) |
0.13 |
0.99 |
|||||
WTI less WCS (heavy sour) |
13.62 |
13.62 |
|||||
NYMEX Crack Spreads: |
|||||||
Gasoline |
15.84 |
18.54 |
|||||
Heating Oil |
11.91 |
27.06 |
|||||
NYMEX 2-1-1 Crack Spread |
13.88 |
22.80 |
|||||
PADD II Group 3 Basis: |
|||||||
Gasoline |
(5.88) |
(3.50) |
|||||
Ultra Low Sulfur Diesel |
(1.01) |
(4.52) |
|||||
PADD II Group 3 Product Crack Spread: |
|||||||
Gasoline |
9.97 |
15.04 |
|||||
Ultra Low Sulfur Diesel |
10.90 |
22.54 |
|||||
PADD II Group 3 2-1-1 |
10.43 |
18.79 |
|||||
Three Months Ended | |||||||
2016 |
2015 | ||||||
(in millions, except operating statistics) | |||||||
Coffeyville Refinery Financial Results: |
|||||||
Net sales |
$ |
528.0 |
$ |
851.7 |
|||
Cost of product sold |
462.7 |
700.9 |
|||||
Refining margin* |
65.3 |
150.8 |
|||||
Direct operating expenses |
47.6 |
50.4 |
|||||
Major scheduled turnaround expenses |
29.4 |
— |
|||||
Depreciation and amortization |
16.9 |
19.4 |
|||||
Gross profit (loss)* |
$ |
(28.6) |
$ |
81.0 |
|||
Refining margin adjusted for FIFO impact* |
$ |
69.2 |
$ |
169.2 |
|||
Coffeyville Refinery Key Operating Statistics: |
|||||||
Per crude oil throughput barrel: |
|||||||
Refining margin* |
$ |
6.75 |
$ |
13.21 |
|||
FIFO impact, unfavorable |
0.40 |
1.61 |
|||||
Refining margin adjusted for FIFO impact* |
7.15 |
14.82 |
|||||
Gross profit (loss)* |
(2.96) |
7.10 |
|||||
Direct operating expenses and major scheduled turnaround expenses |
7.96 |
4.42 |
|||||
Direct operating expenses excluding major scheduled turnaround expenses |
4.92 |
4.42 |
|||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
6.89 |
3.97 |
|||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
4.26 |
$ |
3.97 |
|||
Barrels sold (barrels per day) |
122,838 |
140,974 |
Three Months Ended |
|||||||||||||||
2016 |
2015 |
||||||||||||||
Coffeyville Refinery Throughput and Production Data (bpd): |
|||||||||||||||
Throughput: |
|||||||||||||||
Sweet |
92,938 |
80.3% |
100,532 |
73.4% |
|||||||||||
Medium |
1,513 |
1.3% |
6,630 |
4.8% |
|||||||||||
Heavy sour |
11,914 |
10.3% |
19,658 |
14.3% |
|||||||||||
Total crude oil throughput |
106,365 |
91.9% |
126,820 |
92.5% |
|||||||||||
All other feedstocks and blendstocks |
9,344 |
8.1% |
10,227 |
7.5% |
|||||||||||
Total throughput |
115,709 |
100.0% |
137,047 |
100.0% |
|||||||||||
Production: |
|||||||||||||||
Gasoline |
64,033 |
54.8% |
67,853 |
48.3% |
|||||||||||
Distillate |
47,147 |
40.3% |
59,415 |
42.3% |
|||||||||||
Other (excluding internally produced fuel) |
5,768 |
4.9% |
13,228 |
9.4% |
|||||||||||
Total refining production (excluding internally produced fuel) |
116,948 |
100.0% |
140,496 |
100.0% |
|||||||||||
Three Months Ended | |||||||||||||||
2016 |
2015 | ||||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Wynnewood Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
304.8 |
$ |
451.7 |
|||||||||||
Cost of product sold |
259.4 |
355.6 |
|||||||||||||
Refining margin* |
45.4 |
96.1 |
|||||||||||||
Direct operating expenses |
40.6 |
36.6 |
|||||||||||||
Major scheduled turnaround expenses |
— |
— |
|||||||||||||
Depreciation and amortization |
12.7 |
12.5 |
|||||||||||||
Gross profit (loss)* |
$ |
(7.9) |
$ |
47.0 |
|||||||||||
Refining margin adjusted for FIFO impact* |
$ |
50.2 |
$ |
102.2 |
|||||||||||
Wynnewood Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Refining margin* |
$ |
6.41 |
$ |
14.27 |
|||||||||||
FIFO impact, unfavorable |
0.68 |
0.91 |
|||||||||||||
Refining margin adjusted for FIFO impact* |
7.09 |
15.18 |
|||||||||||||
Gross profit (loss)* |
(1.11) |
6.98 |
|||||||||||||
Direct operating expenses and major scheduled turnaround expenses |
5.74 |
5.43 |
|||||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
5.74 |
5.43 |
|||||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
$ |
5.64 |
$ |
5.30 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
5.64 |
$ |
5.30 |
|||||||||||
Barrels sold (barrels per day) |
79,132 |
76,712 |
|||||||||||||
Three Months Ended | |||||||||||
2016 |
2015 | ||||||||||
Wynnewood Refinery Throughput and Production Data (bpd): |
|||||||||||
Throughput: |
|||||||||||
Sweet |
77,790 |
97.1% |
74,844 |
96.0% | |||||||
Medium |
— |
—% |
— |
—% | |||||||
Heavy sour |
— |
—% |
— |
—% | |||||||
Total crude oil throughput |
77,790 |
97.1% |
74,844 |
96.0% | |||||||
All other feedstocks and blendstocks |
2,360 |
2.9% |
3,132 |
4.0% | |||||||
Total throughput |
80,150 |
100.0% |
77,976 |
100.0% | |||||||
Production: |
|||||||||||
Gasoline |
41,845 |
53.4% |
41,243 |
53.7% | |||||||
Distillate |
30,849 |
39.3% |
30,021 |
39.0% | |||||||
Other (excluding internally produced fuel) |
5,751 |
7.3% |
5,629 |
7.3% | |||||||
Total refining production (excluding internally produced fuel) |
78,445 |
100.0% |
76,893 |
100.0% |
Nitrogen Fertilizer Segment Operating Data
The following tables set forth information about the Nitrogen Fertilizer segment operated by CVR Partners, of which we owned a majority interest as of March 31, 2016 and serve as the general partner. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Nitrogen Fertilizer segment for the three months ended March 31, 2016 are included in CVR Partners' press release dated April 28, 2016.
Three Months Ended | |||||||
2016 |
2015 | ||||||
(in millions) | |||||||
Nitrogen Fertilizer Segment Business Financial Results: |
|||||||
Net sales |
$ |
73.1 |
$ |
93.1 |
|||
Cost of product sold |
16.3 |
25.8 |
|||||
Direct operating expenses |
23.7 |
24.4 |
|||||
Selling, general and administrative expenses |
6.4 |
4.6 |
|||||
Depreciation and amortization |
7.0 |
6.8 |
|||||
Operating income |
19.7 |
31.5 |
|||||
Interest expense and other financing costs |
(1.7) |
(1.7) |
|||||
Income before income tax expense |
18.0 |
29.8 |
|||||
Income tax expense |
— |
— |
|||||
Net income |
$ |
18.0 |
$ |
29.8 |
|||
Adjusted Nitrogen Fertilizer EBITDA* |
$ |
27.9 |
$ |
38.4 |
Three Months Ended | ||||||||||||||||||||||||||||||||
2016 |
2015 | |||||||||||||||||||||||||||||||
Nitrogen Fertilizer Segment Key Operating Statistics: |
||||||||||||||||||||||||||||||||
Production volume (thousand tons): |
||||||||||||||||||||||||||||||||
Ammonia (gross produced)(1) |
113.7 |
96.0 | ||||||||||||||||||||||||||||||
Ammonia (net available for sale)(1)(2) |
15.1 |
14.6 | ||||||||||||||||||||||||||||||
UAN |
248.2 |
252.1 | ||||||||||||||||||||||||||||||
Pet coke consumed (thousand tons) |
126.9 |
124.9 | ||||||||||||||||||||||||||||||
Pet coke consumed (cost per ton) |
$ |
17 |
$ |
29 | ||||||||||||||||||||||||||||
Sales (thousand tons): |
||||||||||||||||||||||||||||||||
Ammonia |
24.4 |
12.8 | ||||||||||||||||||||||||||||||
UAN |
267.0 |
274.5 | ||||||||||||||||||||||||||||||
Product pricing at gate (dollars per ton)(3): |
||||||||||||||||||||||||||||||||
Ammonia |
$ |
367 |
$ |
553 | ||||||||||||||||||||||||||||
UAN |
$ |
209 |
$ |
263 | ||||||||||||||||||||||||||||
On-stream factors(4): |
||||||||||||||||||||||||||||||||
Gasification |
97.7% |
99.4% | ||||||||||||||||||||||||||||||
Ammonia |
97.2% |
94.4% | ||||||||||||||||||||||||||||||
UAN |
91.4% |
97.8% | ||||||||||||||||||||||||||||||
Market Indicators: |
||||||||||||||||||||||||||||||||
Ammonia — Southern Plains (dollars per ton) |
$ |
375 |
$ |
553 | ||||||||||||||||||||||||||||
UAN — Corn belt (dollars per ton) |
$ |
229 |
$ |
313 | ||||||||||||||||||||||||||||
Cost of product sold, direct operating expenses and selling, general and administrative expenses are all reflected exclusive of depreciation and amortization. | ||||||||||||||||||||||||||||||||
* See Use of Non-GAAP Financial Measures below. | ||||||||||||||||||||||||||||||||
(1) Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into UAN. Net tons available for sale represent the ammonia available for sale that was not upgraded into UAN. | ||||||||||||||||||||||||||||||||
(2) In addition to the produced ammonia, the Nitrogen Fertilizer segment acquired approximately 3.0 thousand tons and 21.2 thousand tons of ammonia during the three months ended March 31, 2016 and 2015, respectively. | ||||||||||||||||||||||||||||||||
(3) Product pricing at gate per ton represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry. | ||||||||||||||||||||||||||||||||
(4) On-stream factor is the total number of hours operated divided by the total number of hours in the reporting period and is a measure of operating efficiency. |
Use of Non-GAAP Financial Measures
To supplement the Company's actual results in accordance with GAAP for the applicable periods, the Company also uses the non-GAAP financial measures noted above, which are reconciled to our GAAP-based results below. These non-GAAP financial measures should not be considered an alternative for GAAP results. The adjustments are provided to enhance an overall understanding of the Company's financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.
Adjusted net income is not a recognized term under GAAP and should not be substituted for net income as a measure of our performance but rather should be utilized as a supplemental measure of financial performance in evaluating our business. Management believes that adjusted net income provides relevant and useful information that enables external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, to better understand and evaluate our ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance. Adjusted net income per diluted share represents adjusted net income divided by weighted-average diluted shares outstanding.
Three Months Ended | |||||||
2016 |
2015 | ||||||
(in millions, except per share data) | |||||||
Reconciliation of Net Income (Loss) to Adjusted Net Income: |
|||||||
Income (loss) before income tax expense |
$ |
(52.7) |
$ |
108.7 |
|||
Adjustments: |
|||||||
FIFO impact, unfavorable |
8.8 |
24.5 |
|||||
Share-based compensation (1) |
— |
4.0 |
|||||
Major scheduled turnaround expenses |
29.4 |
— |
|||||
Loss on derivatives, net |
1.2 |
51.4 |
|||||
Current period settlement on derivative contracts (2) |
21.4 |
(6.3) |
|||||
Expenses associated with the East Dubuque mergers (3) |
1.2 |
— |
|||||
Adjusted net income before income tax expense and noncontrolling interest |
9.3 |
182.3 |
|||||
Adjusted net income attributed to noncontrolling interest |
(6.6) |
(53.7) |
|||||
Income tax expense, as adjusted |
5.7 |
(43.7) |
|||||
Adjusted net income attributable to CVR Energy stockholders |
$ |
8.4 |
$ |
84.9 |
|||
Adjusted net income per diluted share |
$ |
0.10 |
$ |
0.98 |
Refining margin per crude oil throughput barrel is a measurement calculated as the difference between the Petroleum segment's net sales and cost of product sold (exclusive of depreciation and amortization). Refining margin is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of product sold at which they are able to sell refined products. Each of the components used in this calculation (net sales and cost of product sold exclusive of depreciation and amortization) can be taken directly from our Petroleum segment's Statements of Operations. Our calculation of refining margin may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. In order to derive the refining margin per crude oil throughput barrel, we utilize the total dollar figures for refining margin as derived above and divide by the applicable number of crude oil throughput barrels for the period. We believe that refining margin is important to enable investors to better understand and evaluate the Petroleum segment's ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance.
Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference between the Petroleum segment's net sales and cost of product sold (exclusive of depreciation and amortization) adjusted for FIFO impact. Refining margin adjusted for FIFO impact is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of product sold (taking into account the impact of the utilization of FIFO) at which they are able to sell refined products. Our calculation of refining margin adjusted for FIFO impact may differ from calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. Under the FIFO accounting method, changes in crude oil prices can cause fluctuations in the inventory valuation of crude oil, work in process and finished goods, thereby resulting in a favorable FIFO impact when crude oil prices increase and an unfavorable FIFO impact when crude oil prices decrease.
Gross profit (loss) is calculated as the difference between the Petroleum segment's net sales, cost of product sold (exclusive of depreciation and amortization), direct operating expenses (exclusive of depreciation and amortization), major scheduled turnaround expenses, and depreciation and amortization. Gross profit (loss) per crude throughput barrel is calculated as gross profit (loss) as derived above divided by the refineries' crude oil throughput volumes for the respective periods presented. Gross profit (loss) is a non-GAAP measure that should not be substituted for operating income. Management believes it is important to investors in evaluating the refineries' performance and the Petroleum segment's ongoing operating results. Our calculation of gross profit (loss) may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure.
EBITDA and Adjusted EBITDA. EBITDA represents net income (loss) before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA represents EBITDA adjusted for (i) FIFO impact (favorable) unfavorable; (ii) loss on extinguishment of debt; (iii) major scheduled turnaround expenses; (iv) (gain) loss on derivatives, net; (v) current period settlements on derivative contracts; and (vi) expenses associated with the East Dubuque mergers. EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be substituted for net income (loss) or cash flow from operations. Management believes that EBITDA and Adjusted EBITDA enable investors to better understand and evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.
EBITDA for the three months ended March 31, 2015 was also adjusted for share-based compensation expense in calculating Adjusted EBITDA. Beginning in 2016, share-based compensation expense is no longer utilized as an adjustment to derive Adjusted EBITDA as no equity-settled awards remain outstanding for CVR Energy or any of its subsidiaries, and CVR Partners and CVR Refining are responsible for reimbursing CVR Energy for their allocated portion of all outstanding awards. Management believes, based on the nature, classification and cash settlement feature of the currently outstanding awards, that it is no longer necessary to adjust EBITDA for share-based compensation expense to derive Adjusted EBITDA. For comparison purposes we have also provided Adjusted EBITDA for the three months ended March 31, 2015 without adjusting for share-based compensation expense in order to provide a comparison to Adjusted EBITDA for the three months ended March 31, 2016.
A reconciliation of net income to EBITDA and EBITDA to Adjusted EBITDA for the three months ended March 31, 2016 and 2015 is as follows:
Three Months Ended | |||||||
2016 |
2015 | ||||||
(in millions) | |||||||
Net income (loss) attributable to CVR Energy stockholders |
$ |
(16.2) |
$ |
54.9 |
|||
Add: |
|||||||
Interest expense and other financing costs, net of interest income |
11.9 |
12.5 |
|||||
Income tax expense (benefit) |
(21.8) |
24.0 |
|||||
Depreciation and amortization |
40.0 |
42.0 |
|||||
EBITDA adjustments included in noncontrolling interest |
(18.4) |
(19.4) |
|||||
EBITDA |
(4.5) |
114.0 |
|||||
Add: |
|||||||
FIFO impact, unfavorable |
8.8 |
24.5 |
|||||
Share-based compensation (1) |
— |
4.0 |
|||||
Major scheduled turnaround expenses |
29.4 |
— |
|||||
Loss on derivatives, net |
1.2 |
51.4 |
|||||
Current period settlement on derivative contracts (2) |
21.4 |
(6.3) |
|||||
Expenses associated with the East Dubuque mergers (3) |
1.2 |
— |
|||||
Adjustments included in noncontrolling interest |
(21.3) |
(23.9) |
|||||
Adjusted EBITDA |
$ |
36.2 |
$ |
163.7 |
Petroleum and Nitrogen Fertilizer EBITDA and Adjusted EBITDA. EBITDA by operating segment represents net income (loss) before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA by operating segment represents EBITDA by operating segment adjusted for (i) FIFO impact (favorable) unfavorable; (ii) share-based compensation, non-cash; (iii) loss on extinguishment of debt; (iv) major scheduled turnaround expenses; (v) (gain) loss on derivatives, net; (vi) current period settlements on derivative contracts; and (vii) expenses associated with the East Dubuque mergers. We present Adjusted EBITDA by operating segment because it is the starting point for CVR Refining's and CVR Partners' calculation of available cash for distribution. EBITDA and Adjusted EBITDA by operating segment are not recognized terms under GAAP and should not be substituted for net income (loss) as a measure of performance. Management believes that EBITDA and Adjusted EBITDA by operating segment enable investors to better understand CVR Refining's and CVR Partners' ability to make distributions to their common unitholders, help investors evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.
A reconciliation of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA for the Petroleum and Nitrogen Fertilizer segments for the three months ended March 31, 2016 and 2015 is as follows:
Three Months Ended | |||||||
2016 |
2015 | ||||||
(in millions) | |||||||
Petroleum: |
|||||||
Petroleum net income (loss) |
$ |
(68.0) |
$ |
46.7 |
|||
Add: |
|||||||
Interest expense and other financing costs, net of interest income |
10.8 |
11.2 |
|||||
Income tax expense |
— |
— |
|||||
Depreciation and amortization |
31.5 |
34.0 |
|||||
Petroleum EBITDA |
(25.7) |
91.9 |
|||||
Add: |
|||||||
FIFO impact, unfavorable |
8.8 |
24.5 |
|||||
Share-based compensation, non-cash |
— |
0.2 |
|||||
Major scheduled turnaround expenses |
29.4 |
— |
|||||
Loss on derivatives, net |
1.2 |
51.4 |
|||||
Current period settlements on derivative contracts(2) |
21.4 |
(6.3) |
|||||
Adjusted Petroleum EBITDA |
$ |
35.1 |
$ |
161.7 |
Three Months Ended | |||||||
2016 |
2015 | ||||||
(in millions) | |||||||
Nitrogen Fertilizer: |
|||||||
Nitrogen Fertilizer net income |
$ |
18.0 |
$ |
29.8 |
|||
Add: |
|||||||
Interest expense and other financing costs, net |
1.7 |
1.7 |
|||||
Income tax expense |
— |
— |
|||||
Depreciation and amortization |
7.0 |
6.8 |
|||||
Nitrogen Fertilizer EBITDA |
26.7 |
38.3 |
|||||
Add: |
|||||||
Share-based compensation, non-cash |
— |
0.1 |
|||||
Expenses associated with the East Dubuque mergers(3) |
1.2 |
— |
|||||
Adjusted Nitrogen Fertilizer EBITDA |
$ |
27.9 |
$ |
38.4 |
|||
(1) |
Beginning in 2016, share-based compensation expense is no longer utilized as an adjustment to derive Adjusted net income and Adjusted EBITDA as no equity-settled awards remain outstanding for CVR Energy or any of its subsidiaries, and CVR Partners and CVR Refining are responsible for reimbursing CVR Energy for their allocated portion of all outstanding awards. Management believes, based on the nature, classification and cash settlement feature of the currently outstanding awards, that it is no longer necessary to adjust net income (loss) and EBITDA for share-based compensation expense to derive Adjusted net income and Adjusted EBITDA. Adjusted net income attributable to CVR Energy stockholders and Adjusted EBITDA for the three months ended March 31, 2015 would have been $82.5 million and $159.7 million, respectively, without adjusting for share-based compensation expense of $4.0 million. |
(2) |
Represents the portion of gain (loss) on derivatives, net related to contracts that matured during the respective periods and settled with counterparties. There are no premiums paid or received at inception of the derivative contracts and upon settlement, there is no cost recovery associated with these contracts. |
(3) |
On April 1, 2016, CVR Partners completed the previously announced merger transactions with East Dubuque. The Nitrogen Fertilizer Partnership incurred legal and other professional fees and other merger related expenses for the three months ended March 31, 2016 that are referred to herein as expenses associated with the East Dubuque mergers, which are included in selling, general and administrative expenses. |
Logo - http://photos.prnewswire.com/prnh/20071203/CVRLOGO
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, April 14, 2016 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced that it will release its 2016 first quarter results on Thursday, April 28, before the open of New York Stock Exchange trading. Chief Executive Officer Jack Lipinski and other executives will host a teleconference call for analysts and investors on April 28 at 3 p.m. Eastern.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/14528. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/14528. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13634754.
CVR Energy's 2016 first quarter earnings news release will be distributed via PR Newswire and posted at www.CVREnergy.com.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Angie Dasbach
CVR Energy, Inc.
(281) 207-3550
MediaRelations@CVREnergy.com
Logo - http://photos.prnewswire.com/prnh/20071203/CVRLOGO
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, Feb. 18, 2016 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced full year 2015 net income of $169.6 million, or $1.95 per diluted share, on net sales of $5,432.5 million, compared to net income for full year 2014 of $173.9 million, or $2.00 per diluted share, on net sales of $9,109.5 million. Full year 2015 adjusted EBITDA, a non-GAAP financial measure, was $498.8 million compared to full year 2014 adjusted EBITDA of $473.5 million.
For the fourth quarter of 2015, the company reported a net loss of $45.0 million, or a loss of 52 cents per diluted share, on net sales of $1,010.6 million, compared to a fourth quarter 2014 net loss of $44.4 million, or a loss of 51 cents per diluted share, on net sales of $1,841.8 million. Net income for the 2015 fourth quarter was negatively affected by the downtime associated with a major scheduled turnaround at CVR Refining's Coffeyville refinery.
Fourth quarter 2015 adjusted EBITDA was $35.6 million compared to adjusted EBITDA of $81.7 million for the same period a year earlier.
"Our fourth quarter results were impacted by the downtime associated with the scheduled turnaround at CVR Refining's Coffeyville refinery in addition to narrowing crack spreads," said Jack Lipinski, CVR Energy's chief executive officer. "At CVR Partners, the Coffeyville fertilizer plant posted record UAN and ammonia production for the quarter."
CVR Energy also announced a fourth quarter 2015 cash dividend of 50 cents per share. The dividend, as declared by CVR Energy's Board of Directors, will be paid on March 7, 2016, to stockholders of record on Feb. 29, 2016.
CVR Energy's fourth quarter cash dividend brings the cumulative cash dividends paid or declared for the 2015 full year to $2.00 per share.
Today, CVR Partners announced a 2015 fourth quarter cash distribution of 27 cents per common unit. CVR Refining announced that it will not pay a cash distribution for the 2015 fourth quarter.
Petroleum Business
The petroleum business, which is operated by CVR Refining and includes the Coffeyville and Wynnewood refineries, reported a fourth quarter 2015 operating loss of $135.5 million, on net sales of $948.3 million, compared to a fourth quarter 2014 operating loss of $113.3 million, on net sales of $1,772.8 million.
Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $8.96 in the 2015 fourth quarter, compared to $11.28 during the same period in 2014. Direct operating expenses, including major scheduled turnaround expenses, per barrel sold, exclusive of depreciation and amortization, for the 2015 fourth quarter was $12.34, compared to $5.76 in the fourth quarter of 2014.
Fourth quarter 2015 throughputs of crude oil and all other feedstocks and blendstocks totaled 172,364 barrels per day (bpd), compared to fourth quarter 2014 throughputs of crude oil and all other feedstocks and blendstocks of 212,263 bpd.
Nitrogen Fertilizers Business
The fertilizer business, operated by CVR Partners, reported fourth quarter 2015 operating income of $20.4 million on net sales of $66.0 million, compared to operating income of $26.5 million on net sales of $74.4 million for the fourth quarter of 2014.
For the fourth quarter of 2015, average realized gate prices for UAN and ammonia were $221 per ton and $479 per ton, respectively, compared to $247 per ton and $547 per ton, respectively, for the same period in 2014.
CVR Partners produced 116,100 tons of ammonia during the fourth quarter of 2015, of which 6,100 net tons were available for sale while the rest was upgraded to 270,500 tons of UAN. In the 2014 fourth quarter, the plant produced 105,900 tons of ammonia and purchased an additional 3,900 tons of ammonia, of which 4,400 net tons were available for sale and the remainder was upgraded to 259,600 tons of UAN.
Cash and Debt
Consolidated cash and cash equivalents, which included $187.3 million for CVR Refining and $50.0 million for CVR Partners, was $765.1 million at Dec. 31, 2015. Consolidated total debt was $673.5 million at Dec. 31, 2015. The company had no debt exclusive of CVR Refining's and CVR Partners' debt.
Fourth Quarter 2015 Earnings Conference Call
CVR Energy previously announced that it will host its fourth quarter 2015 Earnings Conference Call for analysts and investors on Thursday, Feb. 18, at 3 p.m. Eastern. The Earnings Conference Call may also include discussion of company developments, forward-looking information and other material information about business and financial matters.
The Earnings Conference Call will be broadcast live over the Internet at
https://www.webcaster4.com/Webcast/Page/1003/13082. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived and available for 14 days at
https://www.webcaster4.com/Webcast/Page/1003/13082. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13629396.
Forward-Looking Statements
This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "explore," "evaluate," "intend," "may," "might," "plan," "potential," "predict," "seek," "should," or "will," or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. For a discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings. These risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. CVR Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own a majority of the common units representing limited partner interests of CVR Refining and CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Angie Dasbach
CVR Energy, Inc.
281-207-3550
MediaRelations@CVREnergy.com
CVR Energy, Inc.
Financial and Operational Data (all information in this release is unaudited other than the statements of operations and cash flow data for the year ended December 31, 2014 and the balance sheet data as of December 31, 2014).
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Consolidated Statement of Operations Data: |
|||||||||||||||
Net sales |
$ |
1,010.6 |
$ |
1,841.8 |
$ |
5,432.5 |
$ |
9,109.5 |
|||||||
Cost of product sold |
847.9 |
1,733.4 |
4,190.4 |
8,066.0 |
|||||||||||
Direct operating expenses |
212.1 |
134.7 |
584.7 |
515.1 |
|||||||||||
Flood insurance recovery |
— |
— |
(27.3) |
— |
|||||||||||
Selling, general and administrative expenses |
20.4 |
23.5 |
99.0 |
109.7 |
|||||||||||
Depreciation and amortization |
40.9 |
40.8 |
164.1 |
154.4 |
|||||||||||
Operating income (loss) |
(110.7) |
(90.6) |
421.6 |
264.3 |
|||||||||||
Interest expense and other financing costs |
(11.9) |
(11.2) |
(48.4) |
(40.0) |
|||||||||||
Interest income |
0.2 |
0.2 |
1.0 |
0.9 |
|||||||||||
Gain (loss) on derivatives, net |
23.6 |
14.5 |
(28.6) |
185.6 |
|||||||||||
Other income (expense), net |
0.2 |
(3.6) |
36.7 |
(3.7) |
|||||||||||
Income (loss) before income tax expense (benefit) |
(98.6) |
(90.7) |
382.3 |
407.1 |
|||||||||||
Income tax expense (benefit) |
(20.7) |
(21.0) |
84.5 |
97.7 |
|||||||||||
Net income (loss) |
(77.9) |
(69.7) |
297.8 |
309.4 |
|||||||||||
Less: Net income (loss) attributable to noncontrolling interest |
(32.9) |
(25.3) |
128.2 |
135.5 |
|||||||||||
Net income (loss) attributable to CVR Energy stockholders |
$ |
(45.0) |
$ |
(44.4) |
$ |
169.6 |
$ |
173.9 |
|||||||
Basic earnings (loss) per share |
$ |
(0.52) |
$ |
(0.51) |
$ |
1.95 |
$ |
2.00 |
|||||||
Diluted earnings (loss) per share |
$ |
(0.52) |
$ |
(0.51) |
$ |
1.95 |
$ |
2.00 |
|||||||
Dividends declared per share |
$ |
0.50 |
$ |
0.75 |
$ |
2.00 |
$ |
5.00 |
|||||||
Adjusted EBITDA* |
$ |
35.6 |
$ |
81.7 |
$ |
498.8 |
$ |
473.5 |
|||||||
Adjusted net income (loss)* |
$ |
(4.3) |
$ |
24.4 |
$ |
235.1 |
$ |
218.4 |
|||||||
Adjusted net income (loss), per diluted share* |
$ |
(0.05) |
$ |
0.28 |
$ |
2.71 |
$ |
2.51 |
|||||||
Weighted-average common shares outstanding: |
|||||||||||||||
Basic |
86.8 |
86.8 |
86.8 |
86.8 |
|||||||||||
Diluted |
86.8 |
86.8 |
86.8 |
86.8 |
As of December 31, 2015 |
As of December 31, 2014 | ||||||
(in millions) | |||||||
Balance Sheet Data: |
|||||||
Cash and cash equivalents |
$ |
765.1 |
$ |
753.7 |
|||
Working capital |
789.9 |
1,033.0 |
|||||
Total assets |
3,305.8 |
3,462.5 |
|||||
Total debt, including current portion |
673.5 |
674.9 |
|||||
Total CVR stockholders' equity |
984.1 |
988.1 |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
(in millions) | |||||||||||||||
Cash Flow Data: |
|||||||||||||||
Net cash flow provided by (used in): |
|||||||||||||||
Operating activities |
$ |
(75.5) |
$ |
109.5 |
$ |
536.8 |
$ |
640.3 |
|||||||
Investing activities |
(76.8) |
(47.0) |
(150.6) |
(296.6) |
|||||||||||
Financing activities |
(94.6) |
(101.9) |
(374.8) |
(432.1) |
|||||||||||
Net cash flow |
$ |
(246.9) |
$ |
(39.4) |
$ |
11.4 |
$ |
(88.4) |
Segment Information
Our operations are organized into two reportable segments, Petroleum and Nitrogen Fertilizer. Our operations that are not included in the Petroleum and Nitrogen Fertilizer segments are included in the Corporate and Other segment (along with elimination of intersegment transactions). The Petroleum segment is operated by CVR Refining, LP ("CVR Refining"), in which we own a majority interest as well as serve as the general partner. The Petroleum segment includes the operations of the Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with the crude oil gathering and pipeline systems. Detailed operating results for the Petroleum segment for the quarter and year ended December 31, 2015 are included in CVR Refining's press release dated February 18, 2016. The Nitrogen Fertilizer segment is operated by CVR Partners, LP ("CVR Partners"), in which we own a majority interest as well as serve as the general partner. It consists of a nitrogen fertilizer manufacturing facility that utilizes a pet coke gasification process in producing nitrogen fertilizer. Detailed operating results for the Nitrogen Fertilizer segment for the quarter and year ended December 31, 2015 are included in CVR Partners' press release dated February 18, 2016.
Petroleum (CVR Refining) |
Nitrogen Fertilizer (CVR Partners) |
Corporate and Other |
Consolidated | |||||||||||||
(in millions) | ||||||||||||||||
Three Months Ended December 31, 2015 |
||||||||||||||||
Net sales |
$ |
948.3 |
$ |
66.0 |
$ |
(3.7) |
$ |
1,010.6 |
||||||||
Cost of product sold |
842.8 |
9.5 |
(4.4) |
847.9 |
||||||||||||
Direct operating expenses(1) |
103.8 |
23.3 |
0.1 |
127.2 |
||||||||||||
Major scheduled turnaround expenses |
84.9 |
— |
— |
84.9 |
||||||||||||
Flood insurance recovery(2) |
— |
— |
— |
— |
||||||||||||
Selling, general and administrative |
20.2 |
5.6 |
(5.4) |
20.4 |
||||||||||||
Depreciation and amortization |
32.1 |
7.2 |
1.6 |
40.9 |
||||||||||||
Operating income (loss) |
$ |
(135.5) |
$ |
20.4 |
$ |
4.4 |
$ |
(110.7) |
||||||||
Capital expenditures |
$ |
71.1 |
$ |
4.6 |
$ |
1.1 |
$ |
76.8 |
||||||||
Year Ended December 31, 2015 |
||||||||||||||||
Net sales |
$ |
5,161.9 |
$ |
289.2 |
$ |
(18.6) |
$ |
5,432.5 |
||||||||
Cost of product sold |
4,143.6 |
65.2 |
(18.4) |
4,190.4 |
||||||||||||
Direct operating expenses(1) |
376.3 |
99.1 |
0.1 |
475.5 |
||||||||||||
Major scheduled turnaround expenses |
102.2 |
7.0 |
— |
109.2 |
||||||||||||
Flood insurance recovery(2) |
(27.3) |
— |
— |
(27.3) |
||||||||||||
Selling, general and administrative |
75.2 |
20.8 |
3.0 |
99.0 |
||||||||||||
Depreciation and amortization |
130.2 |
28.4 |
5.5 |
164.1 |
||||||||||||
Operating income (loss) |
$ |
361.7 |
$ |
68.7 |
$ |
(8.8) |
$ |
421.6 |
||||||||
Capital expenditures |
$ |
194.7 |
$ |
17.0 |
$ |
7.0 |
$ |
218.7 |
Petroleum (CVR Refining) |
Nitrogen Fertilizer (CVR Partners) |
Corporate and Other |
Consolidated | |||||||||||||
(in millions) | ||||||||||||||||
Three Months Ended December 31, 2014 |
||||||||||||||||
Net sales |
$ |
1,772.8 |
$ |
74.4 |
$ |
(5.4) |
$ |
1,841.8 |
||||||||
Cost of product sold |
1,723.8 |
15.4 |
(5.8) |
1,733.4 |
||||||||||||
Direct operating expenses(1) |
111.6 |
21.7 |
0.1 |
133.4 |
||||||||||||
Major scheduled turnaround expenses |
1.3 |
— |
— |
1.3 |
||||||||||||
Selling, general and administrative |
16.8 |
3.8 |
2.9 |
23.5 |
||||||||||||
Depreciation and amortization |
32.6 |
7.0 |
1.2 |
40.8 |
||||||||||||
Operating income (loss) |
$ |
(113.3) |
$ |
26.5 |
$ |
(3.8) |
$ |
(90.6) |
||||||||
Capital expenditures |
$ |
37.1 |
$ |
7.6 |
$ |
2.3 |
$ |
47.0 |
||||||||
Year Ended December 31, 2014 |
||||||||||||||||
Net sales |
$ |
8,829.7 |
$ |
298.7 |
$ |
(18.9) |
$ |
9,109.5 |
||||||||
Cost of product sold |
8,013.4 |
72.0 |
(19.4) |
8,066.0 |
||||||||||||
Direct operating expenses(1) |
409.2 |
98.9 |
0.2 |
508.3 |
||||||||||||
Major scheduled turnaround expenses |
6.8 |
— |
— |
6.8 |
||||||||||||
Selling, general and administrative |
70.6 |
17.7 |
21.4 |
109.7 |
||||||||||||
Depreciation and amortization |
122.5 |
27.3 |
4.6 |
154.4 |
||||||||||||
Operating income (loss) |
$ |
207.2 |
$ |
82.8 |
$ |
(25.7) |
$ |
264.3 |
||||||||
Capital expenditures |
$ |
191.3 |
$ |
21.1 |
$ |
6.0 |
$ |
218.4 |
||||||||
(1) |
Excluding turnaround expenses. |
(2) |
Represents an insurance recovery from Coffeyville Resources Refining and Marketing, LLC's ("CRRM") environmental insurance carriers as a result of the flood and crude oil discharge at the Coffeyville refinery on June/July 2007. |
Petroleum (CVR Refining) |
Nitrogen Fertilizer (CVR Partners) |
Corporate and Other |
Consolidated | |||||||||||||
(in millions) | ||||||||||||||||
December 31, 2015 |
||||||||||||||||
Cash and cash equivalents |
$ |
187.3 |
$ |
50.0 |
$ |
527.8 |
$ |
765.1 |
||||||||
Total assets |
2,195.2 |
536.5 |
574.1 |
3,305.8 |
||||||||||||
Total debt, including current portion |
580.0 |
125.0 |
(31.5) |
673.5 |
||||||||||||
December 31, 2014 |
||||||||||||||||
Cash and cash equivalents |
$ |
370.2 |
$ |
79.9 |
$ |
303.6 |
$ |
753.7 |
||||||||
Total assets |
2,417.8 |
578.8 |
465.9 |
3,462.5 |
||||||||||||
Total debt, including current portion |
581.4 |
125.0 |
(31.5) |
674.9 |
Petroleum Segment Operating Data
The following tables set forth information about our consolidated Petroleum segment operated by CVR Refining, of which we own a majority interest and serve as the general partner, and the Coffeyville and Wynnewood refineries. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Petroleum segment for the quarter and year ended December 31, 2015 are included in CVR Refining's press release dated February 18, 2016.
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum Segment Summary Financial Results: |
|||||||||||||||
Net sales |
$ |
948.3 |
$ |
1,772.8 |
$ |
5,161.9 |
$ |
8,829.7 |
|||||||
Cost of product sold |
842.8 |
1,723.8 |
4,143.6 |
8,013.4 |
|||||||||||
Direct operating expenses |
103.8 |
111.6 |
376.3 |
409.2 |
|||||||||||
Major scheduled turnaround expenses |
84.9 |
1.3 |
102.2 |
6.8 |
|||||||||||
Flood insurance recovery |
— |
— |
(27.3) |
— |
|||||||||||
Selling, general and administrative expenses |
20.2 |
16.8 |
75.2 |
70.6 |
|||||||||||
Depreciation and amortization |
32.1 |
32.6 |
130.2 |
122.5 |
|||||||||||
Operating income (loss) |
(135.5) |
(113.3) |
361.7 |
207.2 |
|||||||||||
Interest expense and other financing costs |
(10.5) |
(9.7) |
(42.6) |
(34.2) |
|||||||||||
Interest income |
0.1 |
0.1 |
0.4 |
0.3 |
|||||||||||
Gain (loss) on derivatives, net |
23.6 |
14.5 |
(28.6) |
185.6 |
|||||||||||
Other income (expense), net |
0.1 |
(0.1) |
0.3 |
(0.2) |
|||||||||||
Income (loss) before income tax expense |
(122.2) |
(108.5) |
291.2 |
358.7 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Net income (loss) |
$ |
(122.2) |
$ |
(108.5) |
$ |
291.2 |
$ |
358.7 |
|||||||
Refining margin* |
$ |
105.5 |
$ |
49.0 |
$ |
1,018.3 |
$ |
816.3 |
|||||||
Gross profit (loss)* |
$ |
(115.3) |
$ |
(96.5) |
$ |
436.9 |
$ |
277.8 |
|||||||
Refining margin adjusted for FIFO impact* |
$ |
132.1 |
$ |
203.6 |
$ |
1,078.6 |
$ |
977.1 |
|||||||
Adjusted Petroleum EBITDA* |
$ |
16.4 |
$ |
104.6 |
$ |
602.0 |
$ |
621.6 |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
(dollars per barrel) | |||||||||||||||
Petroleum Segment Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Refining margin* |
$ |
7.16 |
$ |
2.71 |
$ |
14.45 |
$ |
11.38 |
|||||||
FIFO impact (favorable) unfavorable |
1.80 |
8.57 |
0.86 |
2.24 |
|||||||||||
Refining margin adjusted for FIFO impact* |
8.96 |
11.28 |
15.31 |
13.62 |
|||||||||||
Gross profit (loss)* |
(7.82) |
(5.35) |
6.20 |
3.87 |
|||||||||||
Gross profit (loss) excluding flood insurance recovery* |
(7.82) |
(5.35) |
5.81 |
3.87 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
12.81 |
6.26 |
6.79 |
5.80 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
7.04 |
6.19 |
5.34 |
5.70 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
12.34 |
5.76 |
6.40 |
5.44 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
6.79 |
$ |
5.69 |
$ |
5.04 |
$ |
5.35 |
|||||||
Barrels sold (barrels per day) |
166,168 |
213,256 |
204,708 |
209,669 |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||||||||||||||
Petroleum Segment Summary Refining Throughput and Production Data (bpd): |
|||||||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||||||
Sweet |
151,215 |
87.7 |
% |
181,063 |
85.3 |
% |
176,097 |
86.0 |
% |
179,059 |
86.2 |
% | |||||||||||||||
Medium |
209 |
0.1 |
% |
3,383 |
1.6 |
% |
2,460 |
1.2 |
% |
2,022 |
1.0 |
% | |||||||||||||||
Heavy sour |
8,715 |
5.1 |
% |
11,700 |
5.5 |
% |
14,520 |
7.1 |
% |
15,464 |
7.4 |
% | |||||||||||||||
Total crude oil throughput |
160,139 |
92.9 |
% |
196,146 |
92.4 |
% |
193,077 |
94.3 |
% |
196,545 |
94.6 |
% | |||||||||||||||
All other feedstocks and blendstocks |
12,225 |
7.1 |
% |
16,117 |
7.6 |
% |
11,672 |
5.7 |
% |
11,284 |
5.4 |
% | |||||||||||||||
Total throughput |
172,364 |
100.0 |
% |
212,263 |
100.0 |
% |
204,749 |
100.0 |
% |
207,829 |
100.0 |
% | |||||||||||||||
Production: |
|||||||||||||||||||||||||||
Gasoline |
80,111 |
46.3 |
% |
107,158 |
50.1 |
% |
99,961 |
48.5 |
% |
102,275 |
48.9 |
% | |||||||||||||||
Distillate |
70,201 |
40.6 |
% |
88,119 |
41.2 |
% |
85,953 |
41.7 |
% |
87,639 |
41.9 |
% | |||||||||||||||
Other (excluding internally produced fuel) |
22,638 |
13.1 |
% |
18,526 |
8.7 |
% |
20,074 |
9.8 |
% |
19,149 |
9.2 |
% | |||||||||||||||
Total refining production (excluding internally produced fuel) |
172,950 |
100.0 |
% |
213,803 |
100.0 |
% |
205,988 |
100.0 |
% |
209,063 |
100.0 |
% | |||||||||||||||
Product price (dollars per gallon): |
|||||||||||||||||||||||||||
Gasoline |
$ |
1.32 |
$ |
1.93 |
$ |
1.61 |
$ |
2.53 |
|||||||||||||||||||
Distillate |
1.34 |
2.40 |
1.62 |
2.81 |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
Market Indicators (dollars per barrel): |
|||||||||||||||
West Texas Intermediate (WTI) NYMEX |
$ |
42.16 |
$ |
73.20 |
$ |
48.76 |
$ |
92.91 |
|||||||
Crude Oil Differentials: |
|||||||||||||||
WTI less WTS (light/medium sour) |
0.35 |
2.19 |
(0.28) |
5.95 |
|||||||||||
WTI less WCS (heavy sour) |
14.45 |
15.42 |
13.20 |
18.48 |
|||||||||||
NYMEX Crack Spreads: |
|||||||||||||||
Gasoline |
12.79 |
9.83 |
19.89 |
17.29 |
|||||||||||
Heating Oil |
15.21 |
24.12 |
20.93 |
23.59 |
|||||||||||
NYMEX 2-1-1 Crack Spread |
14.00 |
16.97 |
20.41 |
20.44 |
|||||||||||
PADD II Group 3 Product Basis: |
|||||||||||||||
Gasoline |
0.26 |
(2.92) |
(2.12) |
(4.45) |
|||||||||||
Ultra Low Sulfur Diesel |
(0.44) |
3.51 |
(2.02) |
0.75 |
|||||||||||
PADD II Group 3 Product Crack Spread: |
|||||||||||||||
Gasoline |
13.05 |
6.91 |
17.76 |
12.84 |
|||||||||||
Ultra Low Sulfur Diesel |
14.76 |
27.63 |
18.91 |
24.34 |
|||||||||||
PADD II Group 3 2-1-1 |
13.91 |
17.27 |
18.34 |
18.59 |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Coffeyville Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
522.6 |
$ |
1,214.2 |
$ |
3,220.6 |
$ |
5,755.5 |
|||||||
Cost of product sold |
490.5 |
1,186.3 |
2,626.1 |
5,254.9 |
|||||||||||
Refining margin* |
32.1 |
27.9 |
594.5 |
500.6 |
|||||||||||
Direct operating expenses |
53.5 |
54.4 |
209.1 |
223.6 |
|||||||||||
Major scheduled turnaround expenses |
84.9 |
— |
102.2 |
5.5 |
|||||||||||
Flood insurance recovery |
— |
— |
(27.3) |
— |
|||||||||||
Depreciation and amortization |
17.5 |
19.2 |
72.1 |
73.6 |
|||||||||||
Gross profit (loss)* |
$ |
(123.8) |
$ |
(45.7) |
$ |
238.4 |
$ |
197.9 |
|||||||
Refining margin adjusted for FIFO impact* |
$ |
49.5 |
$ |
139.7 |
$ |
632.5 |
$ |
615.8 |
|||||||
Coffeyville Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Refining margin* |
$ |
4.52 |
$ |
2.39 |
$ |
14.37 |
$ |
11.46 |
|||||||
FIFO impact (favorable) unfavorable |
2.45 |
9.58 |
0.92 |
2.64 |
|||||||||||
Refining margin adjusted for FIFO impact* |
6.97 |
11.97 |
15.29 |
14.10 |
|||||||||||
Gross profit (loss)* |
(17.42) |
(3.91) |
5.77 |
4.53 |
|||||||||||
Gross profit (loss) excluding flood insurance recovery* |
(17.42) |
(3.91) |
5.11 |
4.53 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
19.48 |
4.66 |
7.53 |
5.24 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
7.53 |
4.66 |
5.06 |
5.12 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
18.46 |
4.10 |
6.92 |
4.73 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
7.14 |
$ |
4.10 |
$ |
4.65 |
$ |
4.61 |
|||||||
Barrels sold (barrels per day) |
81,484 |
144,151 |
123,279 |
132,791 |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||||||||||
Coffeyville Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
68,452 |
80.7 |
% |
111,791 |
80.2 |
% |
96,727 |
79.5 |
% |
103,018 |
80.0 |
% | |||||||||||
Medium |
57 |
0.1 |
% |
3,383 |
2.4 |
% |
2,058 |
1.7 |
% |
1,222 |
1.0 |
% | |||||||||||
Heavy sour |
8,715 |
10.3 |
% |
11,700 |
8.4 |
% |
14,520 |
11.9 |
% |
15,464 |
12.0 |
% | |||||||||||
Total crude oil throughput |
77,224 |
91.1 |
% |
126,874 |
91.0 |
% |
113,305 |
93.1 |
% |
119,704 |
93.0 |
% | |||||||||||
All other feedstocks and blendstocks |
7,540 |
8.9 |
% |
12,510 |
9.0 |
% |
8,400 |
6.9 |
% |
9,047 |
7.0 |
% | |||||||||||
Total throughput |
84,764 |
100.0 |
% |
139,384 |
100.0 |
% |
121,705 |
100.0 |
% |
128,751 |
100.0 |
% | |||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
36,493 |
42.1 |
% |
71,045 |
49.8 |
% |
57,815 |
46.5 |
% |
64,002 |
48.6 |
% | |||||||||||
Distillate |
35,588 |
41.0 |
% |
60,448 |
42.4 |
% |
53,136 |
42.7 |
% |
56,381 |
42.8 |
% | |||||||||||
Other (excluding internally produced fuel) |
14,655 |
16.9 |
% |
11,206 |
7.8 |
% |
13,503 |
10.8 |
% |
11,314 |
8.6 |
% | |||||||||||
Total refining production (excluding internally produced fuel) |
86,736 |
100.0 |
% |
142,699 |
100.0 |
% |
124,454 |
100.0 |
% |
131,697 |
100.0 |
% |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
(in millions, except operating statistics) | |||||||||||||||
Wynnewood Refinery Financial Results: |
|||||||||||||||
Net sales |
$ |
424.6 |
$ |
557.5 |
$ |
1,936.9 |
$ |
3,069.8 |
|||||||
Cost of product sold |
351.8 |
537.1 |
1,516.3 |
2,758.1 |
|||||||||||
Refining margin* |
72.8 |
20.4 |
420.6 |
311.7 |
|||||||||||
Direct operating expenses |
49.2 |
57.1 |
166.2 |
185.5 |
|||||||||||
Major scheduled turnaround expenses |
— |
1.3 |
— |
1.3 |
|||||||||||
Depreciation and amortization |
12.6 |
11.5 |
50.2 |
41.8 |
|||||||||||
Gross profit (loss)* |
$ |
11.0 |
$ |
(49.5) |
$ |
204.2 |
$ |
83.1 |
|||||||
Refining margin adjusted for FIFO impact* |
$ |
82.0 |
$ |
63.2 |
$ |
442.9 |
$ |
357.3 |
|||||||
Wynnewood Refinery Key Operating Statistics: |
|||||||||||||||
Per crude oil throughput barrel: |
|||||||||||||||
Refining margin* |
$ |
9.54 |
$ |
3.20 |
$ |
14.44 |
$ |
11.11 |
|||||||
FIFO impact (favorable) unfavorable |
1.20 |
6.72 |
0.77 |
1.63 |
|||||||||||
Refining margin adjusted for FIFO impact* |
10.74 |
9.92 |
15.21 |
12.74 |
|||||||||||
Gross profit (loss)* |
1.44 |
(7.78) |
7.01 |
2.96 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses |
6.44 |
9.17 |
5.71 |
6.66 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses |
6.44 |
8.96 |
5.71 |
6.61 |
|||||||||||
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
6.31 |
9.19 |
5.59 |
6.66 |
|||||||||||
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold |
$ |
6.31 |
$ |
8.98 |
$ |
5.59 |
$ |
6.61 |
|||||||
Barrels sold (barrels per day) |
84,684 |
69,105 |
81,429 |
76,878 |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||||||||||
Wynnewood Refinery Throughput and Production Data (bpd): |
|||||||||||||||||||||||
Throughput: |
|||||||||||||||||||||||
Sweet |
82,763 |
94.5 |
% |
69,272 |
95.1 |
% |
79,370 |
95.6 |
% |
76,041 |
96.2 |
% | |||||||||||
Medium |
152 |
0.2 |
% |
— |
— |
% |
402 |
0.5 |
% |
800 |
1.0 |
% | |||||||||||
Heavy sour |
— |
— |
% |
— |
— |
% |
— |
— |
% |
— |
— |
% | |||||||||||
Total crude oil throughput |
82,915 |
94.7 |
% |
69,272 |
95.1 |
% |
79,772 |
96.1 |
% |
76,841 |
97.2 |
% | |||||||||||
All other feedstocks and blendstocks |
4,685 |
5.3 |
% |
3,607 |
4.9 |
% |
3,272 |
3.9 |
% |
2,237 |
2.8 |
% | |||||||||||
Total throughput |
87,600 |
100.0 |
% |
72,879 |
100.0 |
% |
83,044 |
100.0 |
% |
79,078 |
100.0 |
% | |||||||||||
Production: |
|||||||||||||||||||||||
Gasoline |
43,618 |
50.6 |
% |
36,113 |
50.8 |
% |
42,146 |
51.7 |
% |
38,273 |
49.5 |
% | |||||||||||
Distillate |
34,613 |
40.1 |
% |
27,671 |
38.9 |
% |
32,817 |
40.2 |
% |
31,258 |
40.4 |
% | |||||||||||
Other (excluding internally produced fuel) |
7,983 |
9.3 |
% |
7,320 |
10.3 |
% |
6,571 |
8.1 |
% |
7,835 |
10.1 |
% | |||||||||||
Total refining production (excluding internally produced fuel) |
86,214 |
100.0 |
% |
71,104 |
100.0 |
% |
81,534 |
100.0 |
% |
77,366 |
100.0 |
% |
Nitrogen Fertilizer Segment Operating Data
The following tables set forth information about the Nitrogen Fertilizer segment operated by CVR Partners, of which we own a majority interest and serve as the general partner. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Nitrogen Fertilizer segment for the quarter and year ended December 31, 2015 are included in CVR Partners' press release dated February 18, 2016.
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer Segment Business Financial Results: |
|||||||||||||||
Net sales |
$ |
66.0 |
$ |
74.4 |
$ |
289.2 |
$ |
298.7 |
|||||||
Cost of product sold |
9.5 |
15.4 |
65.2 |
72.0 |
|||||||||||
Direct operating expenses |
23.3 |
21.7 |
99.1 |
98.9 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
7.0 |
— |
|||||||||||
Selling, general and administrative expenses |
5.6 |
3.8 |
20.8 |
17.7 |
|||||||||||
Depreciation and amortization |
7.2 |
7.0 |
28.4 |
27.3 |
|||||||||||
Operating income |
20.4 |
26.5 |
68.7 |
82.8 |
|||||||||||
Interest expense and other financing costs |
(1.8) |
(1.7) |
(7.0) |
(6.7) |
|||||||||||
Other income, net |
0.1 |
— |
0.3 |
— |
|||||||||||
Income before income tax expense |
18.7 |
24.8 |
62.0 |
76.1 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Net income |
$ |
18.7 |
$ |
24.8 |
$ |
62.0 |
$ |
76.1 |
|||||||
Adjusted Nitrogen Fertilizer EBITDA* |
$ |
28.5 |
$ |
33.5 |
$ |
106.8 |
$ |
110.3 |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
Nitrogen Fertilizer Segment Key Operating Statistics: |
|||||||||||||||
Production volume (thousand tons): |
|||||||||||||||
Ammonia (gross produced)(1) |
116.1 |
105.9 |
385.4 |
388.9 |
|||||||||||
Ammonia (net available for sale)(1)(2) |
6.1 |
4.4 |
37.3 |
28.3 |
|||||||||||
UAN |
270.5 |
259.6 |
928.6 |
963.7 |
|||||||||||
Pet coke consumed (thousand tons) |
134.1 |
130.0 |
469.9 |
489.7 |
|||||||||||
Pet coke (cost per ton) |
$ |
23 |
$ |
27 |
$ |
25 |
$ |
28 |
|||||||
Sales (thousand tons): |
|||||||||||||||
Ammonia |
5.4 |
9.9 |
32.3 |
24.4 |
|||||||||||
UAN |
240.7 |
236.8 |
939.5 |
951.0 |
|||||||||||
Product pricing at gate (dollars per ton)(3): |
|||||||||||||||
Ammonia |
$ |
479 |
$ |
547 |
$ |
521 |
$ |
518 |
|||||||
UAN |
$ |
221 |
$ |
247 |
$ |
247 |
$ |
259 |
|||||||
On-stream factor(4): |
|||||||||||||||
Gasification |
99.3 |
% |
99.6 |
% |
90.2 |
% |
96.8 |
% | |||||||
Ammonia |
98.8 |
% |
98.2 |
% |
87.5 |
% |
92.6 |
% | |||||||
UAN |
98.3 |
% |
95.8 |
% |
87.3 |
% |
92.0 |
% | |||||||
Market Indicators: |
|||||||||||||||
Ammonia — Southern Plains (dollars per ton) |
$ |
460 |
$ |
588 |
$ |
510 |
$ |
539 |
|||||||
UAN — Corn belt (dollars per ton) |
$ |
250 |
$ |
293 |
$ |
284 |
$ |
314 |
|||||||
Cost of product sold, direct operating expenses and selling, general and administrative expenses are all reflected exclusive of depreciation and amortization. |
* See Use of Non-GAAP Financial Measures below. |
(1) |
Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into UAN. Net tons available for sale represent the ammonia available for sale that was not upgraded into UAN. |
(2) |
In addition to the produced ammonia, the Nitrogen Fertilizer segment acquired approximately 0 and 3,900 tons of ammonia during the three months ended December 31, 2015 and 2014, respectively. The Nitrogen Fertilizer segment acquired approximately 29,300 and 33,600 tons of ammonia during the years ended December 31, 2015 and 2014, respectively. |
(3) |
Product pricing at gate represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry. |
(4) |
On-stream factor is the total number of hours operated divided by the total number of hours in the reporting period and is a measure of operating efficiency. |
Excluding the impact of the Linde air separation unit outages, the on-stream factors for the three months ended December 31, 2015 would have been 100.0% for gasification, 100.0% for ammonia and 99.9% for UAN. | |
Excluding the impact of the full facility turnaround and the Linde air separation unit outages, the on-stream factors for the year ended December 31, 2015 would have been 99.9% for gasification, 97.7% for ammonia and 97.6% for UAN. | |
Excluding the impact of the shutdown for installation of the waste heat boiler, pressure swing adsorption unit upgrade and the Linde air separation unit maintenance, the on-stream factors for the year ended December 31, 2014 would have been 98.2% for gasification, 94.3% for ammonia and 93.7% for UAN. |
Use of Non-GAAP Financial Measures
To supplement the Company's actual results in accordance with GAAP for the applicable periods, the Company also uses the non-GAAP financial measures noted above, which are reconciled to our GAAP-based results below. These non-GAAP financial measures should not be considered an alternative for GAAP results. The adjustments are provided to enhance an overall understanding of the Company's financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.
Adjusted net income (loss) is not a recognized term under GAAP and should not be substituted for net income (loss) as a measure of our performance but rather should be utilized as a supplemental measure of financial performance in evaluating our business. Management believes that adjusted net income (loss) provides relevant and useful information that enables external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, to better understand and evaluate our ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance. Adjusted net income (loss) per diluted share represents adjusted net income (loss) divided by weighted-average diluted shares outstanding.
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss): |
|||||||||||||||
Income (loss) before income tax expense (benefit) |
$ |
(98.6) |
$ |
(90.7) |
$ |
382.3 |
$ |
407.1 |
|||||||
Adjustments: |
|||||||||||||||
FIFO impact (favorable) unfavorable |
26.6 |
154.6 |
60.3 |
160.8 |
|||||||||||
Share-based compensation |
3.7 |
1.5 |
12.8 |
12.3 |
|||||||||||
Major scheduled turnaround expenses |
84.9 |
1.3 |
109.2 |
6.8 |
|||||||||||
(Gain) loss on derivatives, net |
(23.6) |
(14.5) |
28.6 |
(185.6) |
|||||||||||
Current period settlement on derivative contracts(1) |
8.1 |
29.0 |
(26.0) |
122.2 |
|||||||||||
Flood insurance recovery(2) |
— |
— |
(27.3) |
— |
|||||||||||
Expenses associated with the Rentech Nitrogen mergers(3) |
0.8 |
— |
2.3 |
— |
|||||||||||
Adjusted net income before income tax expense and noncontrolling interest |
1.9 |
81.2 |
542.2 |
523.6 |
|||||||||||
Adjusted net income attributed to noncontrolling interest |
(0.3) |
(32.8) |
(179.8) |
(178.4) |
|||||||||||
Income tax expense, as adjusted |
(5.9) |
(24.0) |
(127.3) |
(126.8) |
|||||||||||
Adjusted net income (loss) attributable to CVR Energy stockholders |
$ |
(4.3) |
$ |
24.4 |
$ |
235.1 |
$ |
218.4 |
|||||||
Adjusted net income (loss) per diluted share |
$ |
(0.05) |
$ |
0.28 |
$ |
2.71 |
$ |
2.51 |
Refining margin per crude oil throughput barrel is a measurement calculated as the difference between the Petroleum segment's net sales and cost of product sold (exclusive of depreciation and amortization). Refining margin is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of product sold at which they are able to sell refined products. Each of the components used in this calculation (net sales and cost of product sold exclusive of depreciation and amortization) can be taken directly from our Petroleum segment's Statements of Operations. Our calculation of refining margin may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. In order to derive the refining margin per crude oil throughput barrel, we utilize the total dollar figures for refining margin as derived above and divide by the applicable number of crude oil throughput barrels for the period. We believe that refining margin is important to enable investors to better understand and evaluate the Petroleum segment's ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance.
Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference between the Petroleum segment's net sales and cost of product sold (exclusive of depreciation and amortization) adjusted for FIFO impact. Refining margin adjusted for FIFO impact is a non-GAAP measure that we believe is important to investors in evaluating the refineries' performance as a general indication of the amount above their cost of product sold (taking into account the impact of the utilization of FIFO) at which they are able to sell refined products. Our calculation of refining margin adjusted for FIFO impact may differ from calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure. Under the FIFO accounting method, changes in crude oil prices can cause fluctuations in the inventory valuation of crude oil, work in process and finished goods, thereby resulting in a favorable FIFO impact when crude oil prices increase and an unfavorable FIFO impact when crude oil prices decrease.
Gross profit (loss) is calculated as the difference between the Petroleum segment's net sales, cost of product sold (exclusive of depreciation and amortization), direct operating expenses (exclusive of depreciation and amortization), major scheduled turnaround expenses, flood insurance recovery and depreciation and amortization. Gross profit (loss) per crude throughput barrel is calculated as gross profit (loss) as derived above divided by the refineries' crude oil throughput volumes for the respective periods presented. Gross profit (loss) is a non-GAAP measure that should not be substituted for operating income (loss). Management believes it is important to investors in evaluating the refineries' performance and the Petroleum segment's ongoing operating results. Our calculation of gross profit (loss) may differ from similar calculations of other companies in the industry, thereby limiting its usefulness as a comparative measure.
EBITDA and Adjusted EBITDA. EBITDA represents net income (loss) before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense (benefit) and (iii) depreciation and amortization. Adjusted EBITDA represents EBITDA adjusted for (i) FIFO impact (favorable) unfavorable; (ii) share-based compensation; (iii) loss on extinguishment of debt; (iv) major scheduled turnaround expenses; (v) (gain) loss on derivatives, net; (vi) current period settlements on derivative contracts; (vii) flood insurance recovery and (viii) expenses associated with the pending Rentech Nitrogen mergers. EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be substituted for net income (loss) or cash flow from operations. Management believes that EBITDA and Adjusted EBITDA enable investors to better understand and evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently. Below is a reconciliation of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA for the three months and years ended December 31, 2015 and 2014:
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
(in millions) | |||||||||||||||
Net income (loss) attributable to CVR Energy stockholders |
$ |
(45.0) |
$ |
(44.4) |
$ |
169.6 |
$ |
173.9 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
11.7 |
11.0 |
47.4 |
39.1 |
|||||||||||
Income tax expense (benefit) |
(20.7) |
(21.0) |
84.5 |
97.7 |
|||||||||||
Depreciation and amortization |
40.9 |
40.8 |
164.1 |
154.4 |
|||||||||||
EBITDA adjustments included in noncontrolling interest |
(18.7) |
(18.4) |
(75.2) |
(65.2) |
|||||||||||
EBITDA |
(31.8) |
(32.0) |
390.4 |
399.9 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact (favorable) unfavorable |
26.6 |
154.6 |
60.3 |
160.8 |
|||||||||||
Share-based compensation |
3.7 |
1.5 |
12.8 |
12.3 |
|||||||||||
Major scheduled turnaround expenses |
84.9 |
1.3 |
109.2 |
6.8 |
|||||||||||
(Gain) loss on derivatives, net |
(23.6) |
(14.5) |
28.6 |
(185.6) |
|||||||||||
Current period settlement on derivative contracts(1) |
8.1 |
29.0 |
(26.0) |
122.2 |
|||||||||||
Flood insurance recovery(2) |
— |
— |
(27.3) |
— |
|||||||||||
Expenses associated with the Rentech Nitrogen mergers(3) |
0.8 |
— |
2.3 |
— |
|||||||||||
Adjustments included in noncontrolling interest |
(33.1) |
(58.2) |
(51.5) |
(42.9) |
|||||||||||
Adjusted EBITDA |
$ |
35.6 |
$ |
81.7 |
$ |
498.8 |
$ |
473.5 |
Petroleum and Nitrogen Fertilizer EBITDA and Adjusted EBITDA. EBITDA by operating segment represents net income (loss) before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA by operating segment represents EBITDA by operating segment adjusted for (i) FIFO impact (favorable) unfavorable; (ii) share-based compensation, non-cash; (iii) loss on extinguishment of debt; (iv) major scheduled turnaround expenses; (v) (gain) loss on derivatives, net; (vi) current period settlements on derivative contracts; (vii) flood insurance recovery and (viii) expenses associated with the pending Rentech Nitrogen mergers. We present Adjusted EBITDA by operating segment because it is the starting point for CVR Refining's and CVR Partners' calculation of available cash for distribution. EBITDA and Adjusted EBITDA by operating segment are not recognized terms under GAAP and should not be substituted for net income (loss) as a measure of performance. Management believes that EBITDA and Adjusted EBITDA by operating segment enable investors to better understand CVR Refining's and CVR Partners' ability to make distributions to their common unitholders, help investors evaluate our ongoing operating results and allow for greater transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently. Below is a reconciliation of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA for the Petroleum and Nitrogen Fertilizer segments for the three months and years ended December 31, 2015 and 2014:
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
(in millions) | |||||||||||||||
Petroleum: |
|||||||||||||||
Petroleum net income (loss) |
$ |
(122.2) |
$ |
(108.5) |
$ |
291.2 |
$ |
358.7 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net of interest income |
10.4 |
9.6 |
42.2 |
33.9 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Depreciation and amortization |
32.1 |
32.6 |
130.2 |
122.5 |
|||||||||||
Petroleum EBITDA |
(79.7) |
(66.3) |
463.6 |
515.1 |
|||||||||||
Add: |
|||||||||||||||
FIFO impact (favorable) unfavorable |
26.6 |
154.6 |
60.3 |
160.8 |
|||||||||||
Share-based compensation, non-cash |
0.1 |
0.5 |
0.6 |
2.3 |
|||||||||||
Major scheduled turnaround expenses |
84.9 |
1.3 |
102.2 |
6.8 |
|||||||||||
(Gain) loss on derivatives, net |
(23.6) |
(14.5) |
28.6 |
(185.6) |
|||||||||||
Current period settlements on derivative contracts(1) |
8.1 |
29.0 |
(26.0) |
122.2 |
|||||||||||
Flood insurance recovery(2) |
— |
— |
(27.3) |
— |
|||||||||||
Adjusted Petroleum EBITDA |
$ |
16.4 |
$ |
104.6 |
$ |
602.0 |
$ |
621.6 |
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
(in millions) | |||||||||||||||
Nitrogen Fertilizer: |
|||||||||||||||
Nitrogen Fertilizer net income |
$ |
18.7 |
$ |
24.8 |
$ |
62.0 |
$ |
76.1 |
|||||||
Add: |
|||||||||||||||
Interest expense and other financing costs, net |
1.8 |
1.7 |
7.0 |
6.7 |
|||||||||||
Income tax expense |
— |
— |
— |
— |
|||||||||||
Depreciation and amortization |
7.2 |
7.0 |
28.4 |
27.3 |
|||||||||||
Nitrogen Fertilizer EBITDA |
27.7 |
33.5 |
97.4 |
110.1 |
|||||||||||
Add: |
|||||||||||||||
Share-based compensation, non-cash |
— |
— |
0.1 |
0.2 |
|||||||||||
Major scheduled turnaround expenses |
— |
— |
7.0 |
— |
|||||||||||
Expenses associated with the Rentech Nitrogen mergers(3) |
0.8 |
— |
2.3 |
— |
|||||||||||
Adjusted Nitrogen Fertilizer EBITDA |
$ |
28.5 |
$ |
33.5 |
$ |
106.8 |
$ |
110.3 |
|||||||
(1) |
Represents the portion of gain (loss) on derivatives, net related to contracts that matured during the respective periods and settled with counterparties. There are no premiums paid or received at inception of the derivative contracts and upon settlement, there is no cost recovery associated with these contracts. |
(2) |
Represents an insurance recovery from CRRM's environmental insurance carriers as a result of the flood and crude oil discharge at the Coffeyville refinery on June/July 2007. |
(3) |
On August 9, 2015, CVR Partners entered into an Agreement and Plan of Merger with Rentech Nitrogen Partners, L.P. ("Rentech Nitrogen") and Rentech Nitrogen GP, LLC ("Rentech Nitrogen GP") with Rentech Nitrogen and Rentech Nitrogen GP continuing as surviving entities and wholly-owned subsidiaries of CVR Partners. The Nitrogen Fertilizer Partnership incurred legal and other professional fees and other merger related expenses that are referred to herein as expenses associated with the Rentech Nitrogen mergers, which are included in selling, general and administrative expenses for the three months and year ended December 31, 2015. |
Derivatives Summary. The Petroleum segment enters into commodity swap contracts through crack spread swap agreements with financial counterparties to fix the spread risk between the refineries' crude oil purchases and the refined products the refineries produce for sale. Through these swaps, the Petroleum segment will sell a fixed differential for the value between the selected refined product benchmark and the benchmark crude oil price, thereby locking in a margin for a portion of the refineries' production. The physical volumes are not exchanged and these contracts are net settled with cash. From time to time, the Petroleum segment holds various NYMEX positions through a third-party clearing house.
The table below summarizes the Petroleum segment's open commodity swap positions as of December 31, 2015. The positions are primarily in the form of crack spread swap agreements with financial counterparties, wherein the Petroleum segment has locked in differentials at the fixed prices noted below. As of December 31, 2015 the open commodity swap positions below were comprised of 100.0% distillate crack swaps.
Commodity Swaps |
Barrels |
Fixed Price(1) | |||||
First Quarter 2016 |
615,000 |
$ |
29.01 |
||||
Second Quarter 2016 |
615,000 |
29.01 |
|||||
Third Quarter 2016 |
615,000 |
29.01 |
|||||
Fourth Quarter 2016 |
615,000 |
29.01 |
|||||
Total |
2,460,000 |
$ |
29.01 |
||||
(1) |
Weighted-average price of all positions for period indicated. |
Logo - http://photos.prnewswire.com/prnh/20071203/CVRLOGO
SOURCE CVR Energy, Inc.
SUGAR LAND, Texas, Feb. 4, 2016 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced that it will release its 2015 fourth quarter results on Thursday, Feb. 18, before the open of New York Stock Exchange trading. Chief Executive Officer Jack Lipinski and other executives will host a teleconference call for analysts and investors on Feb. 18 at 3 p.m. Eastern.
The Earnings Conference Call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1003/13082. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1003/13082. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13629396.
CVR Energy's 2015 fourth quarter earnings news release will be distributed via PR Newswire and posted at www.CVREnergy.com.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own a majority of the common units representing limited partner interests of CVR Refining and CVR Partners.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
Media Relations:
Angie Dasbach
CVR Energy, Inc.
(281) 207-3550
MediaRelations@CVREnergy.com
Logo - http://photos.prnewswire.com/prnh/20071203/CVRLOGO
SOURCE CVR Energy, Inc.
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