CVR Energy, Inc. (“CVR Energy” or the “Company”) (NYSE: CVI) today
announced net income of $195 million, or $1.94 per diluted share,
on net sales of $2.3 billion for the first quarter of 2023,
compared to net income of $94 million, or 93 cents per diluted
share, on net sales of $2.4 billion for the first quarter of 2022.
Adjusted earnings for the first quarter of 2023 was $1.44 per
diluted share compared to adjusted earnings of 2 cents per diluted
share in the first quarter of 2022, primarily driven by improved
crack spreads. First quarter 2023 EBITDA was $401 million, compared
to first quarter 2022 EBITDA of $278 million. Adjusted EBITDA for
the first quarter of 2023 was $334 million, up from $155 million in
the first quarter of 2022.
“CVR Energy reported solid results for the first
quarter 2023 including the impacts of scheduled downtime related to
the Coffeyville refinery’s coker turnaround,” said Dave Lamp, CVR
Energy’s Chief Executive Officer. “The Petroleum Segment’s results
were driven by continued strong diesel cracks and improved gasoline
cracks. The Wynnewood Renewable Diesel Unit processed approximately
23 million gallons of bean oil during the quarter. In addition, the
Company continued progress on Wynnewood’s Pre-Treatment Unit,
currently expected to be in service in the third quarter 2023. CVR
Energy also announced a 2023 first quarter cash dividend of 50
cents per share.
“CVR Partners achieved strong results for the
first quarter 2023 driven by record production offset somewhat by
lower fertilizer pricing during the quarter,” Lamp said. “CVR
Partners declared a 2023 first quarter cash distribution of $10.43
per common unit.”
Petroleum
The Petroleum Segment reported first quarter
2023 operating income of $237 million on net sales of $2.0 billion,
compared to operating income of $130 million on net sales of $2.2
billion in the first quarter of 2022.
Refining margin per total throughput barrel was
$23.24 in the first quarter of 2023, compared to $16.75 during the
same period in 2022. The increase in refining margin of $114
million was primarily due to an increase in product crack spreads.
The Group 3 2-1-1 crack spread increased by $11.96 per barrel
relative to the first quarter of 2022, driven by tight inventory
levels and supply concerns due to the ongoing Russia-Ukraine
conflict.
The Petroleum Segment recognized costs to comply
with the Renewable Fuel Standard (“RFS”) of $95 million, or
$5.36 per throughput barrel, which excludes the RINs’ revaluation
benefit impact of $56 million, or $3.17 per total throughput
barrel, for the first quarter of 2023. This is compared to RFS
compliance costs of $88 million, or $4.93 per throughput
barrel, which excludes the RINs’ revaluation expense impact of $19
million, or $1.08 per total throughput barrel, for the first
quarter of 2022. The increase in RFS compliance costs in 2023 was
primarily related to a higher renewable volume obligation (“RVO”)
for the first quarter of 2023 compared to the 2022 period. The
favorable RINs’ revaluation in 2023 was a result of a
mark-to-market benefit in the current quarter due to a decline in
RIN prices and a lower outstanding obligation in the current period
compared to the 2022 period.
The Petroleum Segment also recognized a first
quarter 2023 derivative net gain of $39 million, or $2.20 per total
throughput barrel, compared to a derivative net gain of $8 million,
or 47 cents per total throughput barrel, for the first quarter of
2022. Included in this derivative net gain for the first quarter of
2023 was a $31 million unrealized gain primarily a result of
inventory hedging activity, Canadian crude oil forwards and sales,
and crack spread swaps, compared to a $5 million unrealized gain
for the first quarter of 2022. Offsetting these impacts, crude oil
prices decreased during the quarter, which led to an unfavorable
inventory valuation impact of $12 million, or 67 cents per
total throughput barrel, compared to a favorable inventory
valuation impact of $133 million, or $7.51 per total throughput
barrel, during the first quarter of 2022.
First quarter 2023 combined total throughput was
approximately 196,000 bpd, compared to approximately 197,000 bpd of
combined total throughput for the first quarter of 2022.
Nitrogen Fertilizer
The Nitrogen Fertilizer Segment reported an
operating income of $109 million on net sales of $226 million for
the first quarter of 2023, compared to operating income of $104
million on net sales of $223 million for the first quarter of
2022.
First quarter 2023 average realized gate prices
for urea ammonia nitrate (“UAN”) showed a reduction over the prior
year, down 8 percent to $457 per ton, and ammonia was down 16
percent over the prior year to $888 per ton. Average realized
gate prices for UAN and ammonia were $496 and $1,055 per ton,
respectively, for the first quarter of 2022.
CVR Partners, LP’s (“CVR Partners”) fertilizer
facilities produced a combined 224,000 tons of ammonia during the
first quarter of 2023, of which 62,000 net tons were available for
sale while the rest was upgraded to other fertilizer products,
including 366,000 tons of UAN. During the first quarter 2022, the
fertilizer facilities produced 187,000 tons of ammonia, of which
52,000 net tons were available for sale while the remainder was
upgraded to other fertilizer products, including 317,000 tons of
UAN. These increases were due to operating reliability after
completing the planned turnarounds during the third quarter of
2022.
In January 2023, CVR Partners and one of its
subsidiaries entered into a series of agreements to allow CVR
Partners to monetize certain tax credits available to joint
ventures under Section 45Q of the Internal Revenue Code of 1986, as
amended, expected to be generated from January 6, 2023, until March
31, 2030 (the “45Q Transaction”). In connection with these
agreements, CVR Partners received an initial distribution, net of
expenses, of approximately $18.1 million and could receive up
to an additional $60 million in payments through March 31,
2030, if certain carbon oxide capture and sequestration milestones
are met, subject to the terms of the applicable agreements. Among
other items, the 45Q Transaction resulted in the creation of
CVR-CapturePoint Parent LLC, a joint venture in which CVR Partners
indirectly holds a 50 percent interest.
Corporate and Other
The Company reported an income tax expense of
$56 million, or 17.8 percent of income before income taxes, for the
three months ended March 31, 2023, as compared to an income tax
expense of $34 million, or 18.0 percent of income before income
taxes, for the three months ended March 31, 2022. The increase in
income tax expense was due primarily to an increase in pretax
earnings.
The renewable diesel unit at the Wynnewood
refinery continued to increase production, with total vegetable oil
throughputs for the first quarter of 2023 of approximately 22.4
million gallons, up from 12.8 million gallons in the fourth quarter
of 2022.
Cash, Debt and Dividend
Consolidated cash and cash equivalents were $601
million at March 31, 2023, an increase of $91 million from December
31, 2022. Consolidated total debt and finance lease obligations
were $1.6 billion at March 31, 2023, including $547 million held by
the Nitrogen Fertilizer Segment.
CVR Energy announced a first quarter 2023 cash
dividend of 50 cents per share. The dividend, as declared by CVR
Energy’s Board of Directors, will be paid on May 22, 2023, to
stockholders of record as of May 15, 2023.
Today, CVR Partners announced that the Board of
Directors of its general partner declared a first quarter 2023 cash
distribution of $10.43 per common unit, which will be paid on
May 22, 2023, to common unitholders of record as of
May 15, 2023.
First Quarter
2023 Earnings Conference Call
CVR Energy previously announced that it will
host its first quarter 2023 Earnings Conference Call on Tuesday,
May 2, at 1 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 first quarter 2023 Earnings Conference Call
will be webcast live and can be accessed on the Investor Relations
section of CVR Energy’s website at www.CVREnergy.com. For investors
or analysts who want to participate during the call, the dial-in
number is (877) 407-8291. The webcast will be archived and
available for 14 days at
https://edge.media-server.com/mmc/p/iack3rjy. A repeat of the call
also can be accessed for 14 days by dialing (877) 660-6853,
conference ID 13737894.
Forward-Looking StatementsThis
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.
Statements concerning current estimates, expectations and
projections about future results, performance, prospects,
opportunities, plans, actions and events and other statements,
concerns, or matters that are not historical facts are
“forward-looking statements,” as that term is defined under the
federal securities laws. These forward-looking statements include,
but are not limited to, statements regarding future: impact of
scheduled downtime on results; diesel and gasoline cracks,
including the continued strength or improvement thereof; progress
on Wynnewood’s Pre-Treatment Unit; crude oil and RIN pricing; crack
spreads; operating income; net sales; refining margin; EBITDA and
Adjusted EBITDA; refined product demand; inventory levels,
including the tightness thereof and factors impacting same;
throughput rates, including factors impacting same; impacts of
plant outages and weather events on throughput volume; renewables
initiatives; conversion of hydrocrackers at Coffeyville and/or feed
pre-treaters, including the completion, operation, capacities,
timing, costs, optionality and benefits thereof; margins, spreads
and economics relating to renewables; carbon capture and
decarbonization initiatives; utilization rates; global fertilizer
industry conditions; crop and planting conditions; cost to comply
with the Renewable Fuel Standard, RIN prices and valuation of our
net RVO; derivative activities and gains or losses associated
therewith; UAN, ammonia and fertilizer production, demand, pricing
and sales volumes, including the factors impacting same; rates at
which ammonia will be upgraded to other fertilizer products;
operational reliability, including the factors impacting same;
Section 45Q credits and future payments arising under the 45Q
Transaction (if any), including the amount, timing and receipt
thereof; tax rates and expense; dividends and distributions,
including the timing, payment and amount (if any) thereof; total
throughput, direct operating expenses, capital expenditures,
depreciation and amortization and turnaround expense; continued
safe and reliable operations; the expected timing and completion of
turnaround projects; natural gas and global energy costs; exports;
consideration of a potential spin-off of Company’s interests in its
nitrogen fertilizer business; and other matters. You can generally
identify forward-looking statements by our use of forward-looking
terminology such as “outlook,” “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. Investors are cautioned that
various factors may affect these forward-looking statements,
including the rate of any economic improvement, demand for fossil
fuels, price volatility of crude oil, other feedstocks and refined
products (among others); the ability of the Company to pay cash
dividends and CVR Partners to make cash distributions; potential
operating hazards; costs of compliance with existing, or compliance
with new, laws and regulations and potential liabilities arising
therefrom; impacts of planting season on CVR Partners; the health
and economic effects of the COVID-19 pandemic and any variant
thereof; general economic and business conditions; political
disturbances, geopolitical instability and tensions, and associated
changes in global trade policies and economic sanctions, including,
but not limited to, in connection with Russia’s invasion of Ukraine
in February 2022; and other risks. For additional 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 Securities and Exchange Commission (“SEC”)
filings. These and other 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 news 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 renewables,
petroleum refining and marketing business as well as in the
nitrogen fertilizer manufacturing business through its interest in
CVR Partners. CVR Energy subsidiaries serve as the general partner
and own 37 percent of the common units of CVR Partners.
Investors and others should note that CVR Energy
may announce material information using SEC filings, press
releases, public conference calls, webcasts and the Investor
Relations page of its website. CVR Energy may use these channels to
distribute material information about the Company and to
communicate important information about the Company, corporate
initiatives and other matters. Information that CVR Energy posts on
its website could be deemed material; therefore, CVR Energy
encourages investors, the media, its customers, business partners
and others interested in the Company to review the information
posted on its website.
For further information, please contact:
Investor RelationsRichard
RobertsCVR Energy, Inc.(281)
207-3205InvestorRelations@CVREnergy.com
Media RelationsBrandee
StephensCVR Energy, Inc. (281)
207-3516MediaRelations@CVREnergy.com
Non-GAAP Measures
Our management uses certain non-GAAP performance
measures, and reconciliations to those measures, to evaluate
current and past performance and prospects for the future to
supplement our financial information presented in accordance with
accounting principles generally accepted in the United States
(“GAAP”). These non-GAAP financial measures are important factors
in assessing our operating results and profitability and include
the performance and liquidity measures defined below.
The following are non-GAAP measures we present
for the period ended March 31, 2023:
EBITDA - Consolidated net income (loss) before
(i) interest expense, net, (ii) income tax expense (benefit) and
(iii) depreciation and amortization expense.
Petroleum EBITDA and Nitrogen Fertilizer EBITDA
- Segment net income (loss) before segment (i) interest expense,
net, (ii) income tax expense (benefit), and (iii) depreciation and
amortization.
Refining Margin - The difference between our
Petroleum Segment net sales and cost of materials and other.
Refining Margin, adjusted for Inventory
Valuation Impacts - Refining Margin adjusted to exclude the impact
of current period market price and volume fluctuations on crude oil
and refined product inventories purchased in prior periods and
lower of cost or net realizable value adjustments, if applicable.
We record our commodity inventories on the first-in-first-out
basis. As a result, significant current period fluctuations in
market prices and the volumes we hold in inventory can have
favorable or unfavorable impacts on our refining margins as
compared to similar metrics used by other publicly-traded companies
in the refining industry.
Refining Margin and Refining Margin adjusted for
Inventory Valuation Impacts, per Throughput Barrel - Refining
Margin and Refining Margin adjusted for Inventory Valuation Impacts
divided by the total throughput barrels during the period, which is
calculated as total throughput barrels per day times the number of
days in the period.
Direct Operating Expenses per Throughput Barrel
- Direct operating expenses for our Petroleum Segment divided by
total throughput barrels for the period, which is calculated as
total throughput barrels per day times the number of days in the
period.
Adjusted EBITDA, Adjusted Petroleum EBITDA and
Adjusted Nitrogen Fertilizer EBITDA - EBITDA, Petroleum EBITDA and
Nitrogen Fertilizer EBITDA adjusted for certain significant
non-cash items and items that management believes are not
attributable to or indicative of our on-going operations or that
may obscure our underlying results and trends.
Adjusted Earnings (Loss) per Share - Earnings
(loss) per share adjusted for certain significant non-cash items
and items that management believes are not attributable to or
indicative of our on-going operations or that may obscure our
underlying results and trends.
Free Cash Flow - Net cash provided by (used in)
operating activities less capital expenditures and capitalized
turnaround expenditures.
Net Debt and Finance Lease Obligations - Net
debt and finance lease obligations is total debt and finance lease
obligations reduced for cash and cash equivalents.
Total Debt and Net Debt and Finance Lease
Obligations to EBITDA Exclusive of Nitrogen Fertilizer - Total debt
and net debt and finance lease obligations is calculated as the
consolidated debt and net debt and finance lease obligations less
the Nitrogen Fertilizer Segment’s debt and net debt and finance
lease obligations as of the most recent period ended divided by
EBITDA exclusive of the Nitrogen Fertilizer Segment for the most
recent twelve-month period.
We present these measures because we believe
they may help investors, analysts, lenders and ratings agencies
analyze our results of operations and liquidity in conjunction with
our U.S. GAAP results, including but not limited to our operating
performance as compared to other publicly-traded companies in the
refining and fertilizer industries, without regard to historical
cost basis or financing methods and our ability to incur and
service debt and fund capital expenditures. Non-GAAP measures have
important limitations as analytical tools, because they exclude
some, but not all, items that affect net earnings and operating
income. These measures should not be considered substitutes for
their most directly comparable U.S. GAAP financial measures. See
“Non-GAAP Reconciliations” included herein for reconciliation of
these amounts. Due to rounding, numbers presented within this
section may not add or equal to numbers or totals presented
elsewhere within this document.
|
CVR Energy, Inc. |
(all information in this release is unaudited) |
|
Consolidated Statement of Operations Data |
|
|
|
Three Months Ended |
|
March 31, |
(in millions, except per share data) |
|
2023 |
|
|
|
2022 |
|
Net sales |
$ |
2,286 |
|
|
$ |
2,373 |
|
Operating costs and
expenses: |
|
|
|
Cost of materials and other |
|
1,680 |
|
|
|
1,887 |
|
Direct operating expenses (exclusive of depreciation and
amortization) |
|
169 |
|
|
|
160 |
|
Depreciation and amortization |
|
66 |
|
|
|
65 |
|
Cost of sales |
|
1,915 |
|
|
|
2,112 |
|
Selling, general and
administrative expenses (exclusive of depreciation and
amortization) |
|
39 |
|
|
|
39 |
|
Depreciation and
amortization |
|
2 |
|
|
|
2 |
|
Operating income |
|
330 |
|
|
|
220 |
|
Other (expense) income: |
|
|
|
Interest expense, net |
|
(18 |
) |
|
|
(24 |
) |
Other income (expense), net |
|
3 |
|
|
|
(9 |
) |
Income before income tax expense |
|
315 |
|
|
|
187 |
|
Income tax expense |
|
56 |
|
|
|
34 |
|
Net income |
|
259 |
|
|
|
153 |
|
Less: Net income attributable
to noncontrolling interest |
|
64 |
|
|
|
59 |
|
Net income attributable to CVR Energy
stockholders |
$ |
195 |
|
|
$ |
94 |
|
|
|
|
|
Basic and diluted earnings per share |
$ |
1.94 |
|
|
$ |
0.93 |
|
Dividends declared per share |
$ |
0.50 |
|
|
$ |
— |
|
|
|
|
|
Adjusted earnings per
share |
$ |
1.44 |
|
|
$ |
0.02 |
|
EBITDA* |
$ |
401 |
|
|
$ |
278 |
|
Adjusted EBITDA * |
$ |
334 |
|
|
$ |
155 |
|
|
|
|
|
Weighted-average common shares
outstanding - basic and diluted |
|
100.5 |
|
|
|
100.5 |
|
______________________________ |
* |
See “Non-GAAP Reconciliations” section below. |
Selected
Balance Sheet Data |
|
|
|
|
(in millions) |
March 31, 2023 |
|
December 31, 2022 |
Cash and cash equivalents |
$ |
601 |
|
|
$ |
510 |
|
Working capital |
|
290 |
|
|
|
154 |
|
Total assets |
|
4,208 |
|
|
|
4,119 |
|
Total debt and finance lease
obligations, including current portion |
|
1,590 |
|
|
|
1,591 |
|
Total liabilities |
|
3,279 |
|
|
|
3,328 |
|
Total CVR stockholders’
equity |
|
675 |
|
|
|
531 |
|
Selected
Cash Flow Data |
|
|
|
Three Months Ended |
|
March 31, |
(in millions) |
|
2023 |
|
|
|
2022 |
|
Net cash provided by: |
|
|
|
Operating activities |
$ |
247 |
|
|
$ |
322 |
|
Investing activities |
|
(34 |
) |
|
|
(41 |
) |
Financing activities |
|
(122 |
) |
|
|
(115 |
) |
Net increase in cash and cash equivalents and restricted
cash |
$ |
91 |
|
|
$ |
166 |
|
|
|
|
|
Free cash flow* |
$ |
213 |
|
|
$ |
281 |
|
______________________________ |
* |
See “Non-GAAP Reconciliations” section below. |
Selected
Segment Data |
|
|
|
Three Months Ended March 31, 2023 |
(in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
Net sales |
$ |
1,993 |
|
|
$ |
226 |
|
|
$ |
2,286 |
|
Operating income |
|
237 |
|
|
|
109 |
|
|
|
330 |
|
Net income |
|
259 |
|
|
|
102 |
|
|
|
259 |
|
EBITDA* |
|
285 |
|
|
|
124 |
|
|
|
401 |
|
|
|
|
|
|
|
Capital expenditures (1) |
|
|
|
|
|
Maintenance capital expenditures |
$ |
36 |
|
|
$ |
4 |
|
|
$ |
41 |
|
Growth capital expenditures |
|
6 |
|
|
|
— |
|
|
|
18 |
|
Total capital expenditures |
$ |
42 |
|
|
$ |
4 |
|
|
$ |
59 |
|
|
Three Months Ended March 31, 2022 |
(in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
Net sales |
$ |
2,154 |
|
|
$ |
223 |
|
|
$ |
2,373 |
|
Operating income |
|
130 |
|
|
|
104 |
|
|
|
220 |
|
Net income |
|
126 |
|
|
|
94 |
|
|
|
153 |
|
EBITDA* |
|
167 |
|
|
|
123 |
|
|
|
278 |
|
|
|
|
|
|
|
Capital expenditures (1) |
|
|
|
|
|
Maintenance capital expenditures |
$ |
18 |
|
|
$ |
5 |
|
|
$ |
23 |
|
Growth capital expenditures |
|
1 |
|
|
|
— |
|
|
|
27 |
|
Total capital expenditures |
$ |
19 |
|
|
$ |
5 |
|
|
$ |
50 |
|
______________________________ |
* |
See “Non-GAAP Reconciliations” section below. |
(1) |
Capital expenditures are shown exclusive of capitalized turnaround
expenditures and business combinations. |
Selected
Balance Sheet Data |
|
|
|
|
|
March 31, 2023 |
|
December 31, 2022 |
(in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
|
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
Cash and cash equivalents (1) |
$ |
320 |
|
|
$ |
121 |
|
|
$ |
601 |
|
|
$ |
235 |
|
|
$ |
86 |
|
|
$ |
510 |
|
Total assets |
|
4,114 |
|
|
|
1,116 |
|
|
|
4,208 |
|
|
|
4,354 |
|
|
|
1,100 |
|
|
|
4,119 |
|
Total debt and finance lease
obligations, including current portion (2) |
|
47 |
|
|
|
547 |
|
|
|
1,590 |
|
|
|
48 |
|
|
|
547 |
|
|
|
1,591 |
|
______________________________ |
(1) |
Corporate cash and cash equivalents consisted of $160 million and
$189 million at March 31, 2023 and December 31, 2022,
respectively. |
(2) |
Corporate total debt and finance lease obligations, including
current portion consisted of $996 million and $996 million at March
31, 2023 and December 31, 2022, respectively. |
Petroleum
Segment |
|
|
Key Operating Metrics per Total Throughput
Barrel |
|
|
|
Three Months Ended |
|
March 31, |
(in millions) |
|
2023 |
|
|
|
2022 |
|
Refining margin * |
$ |
23.24 |
|
|
$ |
16.75 |
|
Refining margin adjusted for
inventory valuation impacts * |
|
23.91 |
|
|
|
9.24 |
|
Direct operating expenses
* |
|
5.90 |
|
|
|
5.57 |
|
______________________________ |
* |
See “Non-GAAP Reconciliations” section below. |
Throughput Data by Refinery |
|
|
|
Three Months Ended |
|
March 31, |
(in bpd) |
2023 |
|
2022 |
Coffeyville |
|
|
|
|
|
Regional crude |
45,353 |
|
|
39,766 |
|
WTI |
37,664 |
|
|
47,815 |
|
Midland WTI |
— |
|
|
2,602 |
|
Condensate |
9,174 |
|
|
11,352 |
|
Heavy Canadian |
4,121 |
|
|
6,761 |
|
DJ Basin |
13,813 |
|
|
18,035 |
|
Other feedstocks and blendstocks |
13,235 |
|
|
11,344 |
|
Wynnewood |
|
|
|
|
|
Regional crude |
49,822 |
|
|
43,403 |
|
WTL |
3,957 |
|
|
344 |
|
Midland WTI |
— |
|
|
1,634 |
|
WTS |
— |
|
|
578 |
|
Condensate |
15,930 |
|
|
10,285 |
|
Other feedstocks and blendstocks |
3,425 |
|
|
3,425 |
|
Total throughput |
196,494 |
|
|
197,344 |
|
Production Data by Refinery |
|
|
|
Three Months Ended |
|
March 31, |
(in bpd) |
2023 |
|
2022 |
Coffeyville |
|
|
|
Gasoline |
64,489 |
|
|
|
75,050 |
|
|
Distillate |
50,160 |
|
|
|
54,665 |
|
|
Other liquid products |
5,112 |
|
|
|
4,988 |
|
|
Solids |
3,345 |
|
|
|
4,359 |
|
|
Wynnewood |
|
|
|
Gasoline |
39,987 |
|
|
|
29,366 |
|
|
Distillate |
25,254 |
|
|
|
22,518 |
|
|
Other liquid products |
6,282 |
|
|
|
5,134 |
|
|
Solids |
10 |
|
|
|
20 |
|
|
Total production |
194,639 |
|
|
|
196,100 |
|
|
|
|
|
|
Light product yield (as % of
crude throughput) (1) |
100.0 |
|
% |
|
99.5 |
|
% |
Liquid volume yield (as % of
total throughput) (2) |
97.3 |
|
% |
|
97.2 |
|
% |
Distillate yield (as % of
crude throughput) (3) |
41.9 |
|
% |
|
42.3 |
|
% |
______________________________ |
(1) |
Total Gasoline and Distillate divided by total Regional crude, WTI,
WTL, Midland WTI, WTS, Condensate, Heavy Canadian, and DJ Basin
throughput. |
(2) |
Total Gasoline, Distillate, and Other liquid products divided by
total throughput. |
(3) |
Total Distillate divided by total Regional crude, WTI, WTL, Midland
WTI, WTS, Condensate, Heavy Canadian, and DJ Basin throughput. |
Key Market
Indicators |
|
|
|
Three Months Ended |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
|
West Texas Intermediate (WTI)
NYMEX |
$ |
76.02 |
|
|
$ |
95.01 |
|
Crude Oil Differentials to
WTI: |
|
|
|
Brent |
|
6.11 |
|
|
|
2.89 |
|
WCS (heavy sour) |
|
(19.71 |
) |
|
|
(12.78 |
) |
Condensate |
|
0.13 |
|
|
|
0.10 |
|
Midland Cushing |
|
1.51 |
|
|
|
1.43 |
|
NYMEX Crack Spreads: |
|
|
|
Gasoline |
|
29.80 |
|
|
|
23.46 |
|
Heating Oil |
|
46.93 |
|
|
|
33.88 |
|
NYMEX 2-1-1 Crack Spread |
|
38.37 |
|
|
|
28.67 |
|
PADD II Group 3 Product
Basis: |
|
|
|
Gasoline |
|
(3.77 |
) |
|
|
(7.16 |
) |
Ultra-Low Sulfur Diesel |
|
(4.64 |
) |
|
|
(5.78 |
) |
PADD II Group 3 Product Crack
Spread: |
|
|
|
Gasoline |
|
26.03 |
|
|
|
16.30 |
|
Ultra-Low Sulfur Diesel |
|
42.29 |
|
|
|
28.10 |
|
PADD II Group 3 2-1-1 |
|
34.16 |
|
|
|
22.20 |
|
Nitrogen
Fertilizer Segment: |
|
|
Ammonia
Utilization Rates (1) |
|
|
|
Three Months Ended |
|
March 31, |
(percent of capacity
utilization) |
2023 |
|
2022 |
Consolidated |
105 |
|
% |
|
88 |
|
% |
______________________________ |
(1) |
Reflects our ammonia utilization rates on a consolidated basis.
Utilization is an important measure used by management to assess
operational output at each of CVR Partners’ facilities. Utilization
is calculated as actual tons produced divided by capacity. We
present our utilization for the three months ended March 31, 2023
and 2022 and take into account the impact of our current turnaround
cycles on any specific period. Additionally, we present utilization
solely on ammonia production rather than each nitrogen product as
it provides a comparative baseline against industry peers and
eliminates the disparity of plant configurations for upgrade of
ammonia into other nitrogen products. With our efforts being
primarily focused on ammonia upgrade capabilities, this measure
provides a meaningful view of how well we operate. |
Sales and
Production Data |
|
|
|
Three Months Ended |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
|
Consolidated sales (thousand
tons): |
|
|
|
Ammonia |
|
42 |
|
|
|
40 |
|
UAN |
|
359 |
|
|
|
322 |
|
|
|
|
|
Consolidated product pricing
at gate (dollars per ton):(1) |
|
|
|
Ammonia |
$ |
888 |
|
|
$ |
1,055 |
|
UAN |
|
457 |
|
|
|
496 |
|
|
|
|
|
Consolidated production volume
(thousand tons): |
|
|
|
Ammonia (gross produced) (2) |
|
224 |
|
|
|
187 |
|
Ammonia (net available for sale) (2) |
|
62 |
|
|
|
52 |
|
UAN |
|
366 |
|
|
|
317 |
|
|
|
|
|
Feedstock: |
|
|
|
Petroleum coke used in production (thousand tons) |
|
131 |
|
|
|
108 |
|
Petroleum coke used in production (dollars per ton) |
$ |
77.24 |
|
|
$ |
56.46 |
|
Natural gas used in production (thousands of MMBtu) (3) |
|
2,102 |
|
|
|
1,761 |
|
Natural gas used in production (dollars per MMBtu) (3) |
$ |
5.76 |
|
|
$ |
5.54 |
|
Natural gas in cost of materials and other (thousands of MMBtus)
(3) |
|
1,315 |
|
|
|
1,528 |
|
Natural gas in cost of materials and other (dollars per MMBtu)
(3) |
$ |
7.79 |
|
|
$ |
5.62 |
|
______________________________ |
(1) |
Product pricing at gate represents 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 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. |
Key Market Indicators |
|
|
|
Three Months Ended |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
|
Ammonia — Southern Plains
(dollars per ton) |
$ |
739 |
|
|
$ |
1,277 |
|
Ammonia — Corn belt (dollars
per ton) |
|
894 |
|
|
|
1,376 |
|
UAN — Corn belt (dollars per
ton) |
|
373 |
|
|
|
615 |
|
|
|
|
|
Natural gas NYMEX (dollars per
MMBtu) |
$ |
2.76 |
|
|
$ |
4.59 |
|
Q2 2023 Outlook |
|
The table below summarizes our outlook for certain operational
statistics and financial information for the second quarter of
2023. See “Forward-Looking Statements” above. |
|
|
|
Q2 2023 |
|
Low |
|
High |
Petroleum |
|
|
|
Total throughput (bpd) |
|
195,000 |
|
|
|
|
210,000 |
|
|
Direct operating expenses (in millions) (1) |
$ |
90 |
|
|
|
$ |
100 |
|
|
|
|
|
|
Renewables (2) |
|
|
|
Total throughput (in millions of gallons) |
|
15 |
|
|
|
|
22 |
|
|
Direct operating expenses (in millions) (1) |
$ |
6 |
|
|
|
$ |
8 |
|
|
|
|
|
|
Nitrogen Fertilizer |
|
|
|
Ammonia utilization rates |
|
|
|
Consolidated |
|
95 |
|
% |
|
|
100 |
|
% |
Coffeyville Fertilizer Facility |
|
95 |
|
% |
|
|
100 |
|
% |
East Dubuque Fertilizer Facility |
|
95 |
|
% |
|
|
100 |
|
% |
Direct operating expenses (in millions) (1) |
$ |
50 |
|
|
|
$ |
55 |
|
|
|
|
|
|
Capital Expenditures (in
millions) (3) |
|
|
|
Petroleum |
$ |
35 |
|
|
|
$ |
45 |
|
|
Renewables (2) |
|
20 |
|
|
|
|
30 |
|
|
Nitrogen Fertilizer |
|
7 |
|
|
|
|
12 |
|
|
Other |
|
1 |
|
|
|
|
5 |
|
|
Total capital expenditures |
$ |
63 |
|
|
|
$ |
92 |
|
|
______________________________ |
(1) |
Direct operating expenses are shown exclusive of depreciation and
amortization and, for the Nitrogen Fertilizer Segment, turnaround
expenses and inventory valuation impacts. |
(2) |
Renewables reflects spending on the Wynnewood renewable diesel unit
project. As of March 31, 2023, Renewables does not meet the
definition of a reportable segment as defined under Accounting
Standards Codification 280. |
(3) |
Capital expenditures is disclosed on an accrual basis. |
Non-GAAP
Reconciliations: |
|
|
Reconciliation of Net Income to
EBITDA and Adjusted EBITDA |
|
|
|
Three Months Ended |
|
March 31, |
(in millions) |
|
2023 |
|
|
|
2022 |
|
Net
income |
$ |
259 |
|
|
$ |
153 |
|
Interest expense, net |
|
18 |
|
|
|
24 |
|
Income tax expense |
|
56 |
|
|
|
34 |
|
Depreciation and amortization |
|
68 |
|
|
|
67 |
|
EBITDA |
$ |
401 |
|
|
$ |
278 |
|
Adjustments: |
|
|
|
Revaluation of RFS liability |
|
(56 |
) |
|
|
19 |
|
Unrealized gain on derivatives, net |
|
(31 |
) |
|
|
(6 |
) |
Inventory valuation impacts, unfavorable (favorable) |
|
20 |
|
|
|
(136 |
) |
Adjusted EBITDA |
$ |
334 |
|
|
$ |
155 |
|
Reconciliation of Basic and Diluted Earnings per
Share to Adjusted Earnings per
Share |
|
|
|
Three Months Ended |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
|
Basic and diluted
earnings per share |
$ |
1.94 |
|
|
$ |
0.93 |
|
Adjustments: (1) |
|
|
|
Revaluation of RFS liability |
|
(0.42 |
) |
|
|
0.14 |
|
Unrealized gain on derivatives, net |
|
(0.23 |
) |
|
|
(0.05 |
) |
Inventory valuation impacts, unfavorable (favorable) |
|
0.15 |
|
|
|
(1.00 |
) |
Adjusted earnings per share |
$ |
1.44 |
|
|
$ |
0.02 |
|
______________________________ |
(1) |
Amounts are shown after-tax, using the Company’s marginal tax rate,
and are presented on a per share basis using the weighted average
shares outstanding for each period. |
Reconciliation of Net Cash Provided By Operating
Activities to Free Cash
Flow |
|
|
|
Three Months Ended |
|
March 31, |
(in millions) |
|
2023 |
|
|
|
2022 |
|
Net cash provided by
operating activities |
$ |
247 |
|
|
$ |
322 |
|
Less: |
|
|
|
Capital expenditures |
|
(45 |
) |
|
|
(26 |
) |
Capitalized turnaround expenditures |
|
(8 |
) |
|
|
(15 |
) |
Return on equity method investment |
|
19 |
|
|
|
— |
|
Free cash flow |
$ |
213 |
|
|
$ |
281 |
|
Reconciliation of Petroleum Segment
Net Income to EBITDA and Adjusted
EBITDA |
|
|
|
Three Months Ended |
|
March 31, |
(in millions) |
|
2023 |
|
|
|
2022 |
|
Petroleum net
income |
$ |
259 |
|
|
$ |
126 |
|
Interest income, net |
|
(20 |
) |
|
|
(5 |
) |
Depreciation and amortization |
|
46 |
|
|
|
46 |
|
Petroleum EBITDA |
|
285 |
|
|
|
167 |
|
Adjustments: |
|
|
|
Revaluation of RFS liability |
|
(56 |
) |
|
|
19 |
|
Unrealized gain on derivatives, net |
|
(31 |
) |
|
|
(5 |
) |
Inventory valuation impacts, unfavorable (favorable) (1) |
|
12 |
|
|
|
(133 |
) |
Petroleum Adjusted EBITDA |
$ |
210 |
|
|
$ |
48 |
|
Reconciliation of Petroleum Segment
Gross Profit to Refining Margin and
Refining Margin Adjusted for Inventory Valuation
Impacts |
|
|
|
Three Months Ended |
|
March 31, |
(in millions) |
|
2023 |
|
|
|
2022 |
|
Net
sales |
$ |
1,993 |
|
|
$ |
2,154 |
|
Less: |
|
|
|
Cost of materials and other |
|
(1,582 |
) |
|
|
(1,857 |
) |
Direct operating expenses (exclusive of depreciation and
amortization) |
|
(104 |
) |
|
|
(99 |
) |
Depreciation and amortization |
|
(46 |
) |
|
|
(46 |
) |
Gross profit |
|
261 |
|
|
|
152 |
|
Add: |
|
|
|
Direct operating expenses (exclusive of depreciation and
amortization) |
|
104 |
|
|
|
99 |
|
Depreciation and amortization |
|
46 |
|
|
|
46 |
|
Refining margin |
|
411 |
|
|
|
297 |
|
Inventory valuation impacts,
unfavorable (favorable) (1) |
|
12 |
|
|
|
(133 |
) |
Refining margin adjusted for inventory valuation
impacts |
$ |
423 |
|
|
$ |
164 |
|
______________________________ |
(1) |
The Petroleum Segment’s basis for determining inventory value under
GAAP is First-In, First-Out (“FIFO”). 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 inventory valuation impact when crude oil prices increase
and an unfavorable inventory valuation impact when crude oil prices
decrease. The inventory valuation impact is calculated based upon
inventory values at the beginning of the accounting period and at
the end of the accounting period. In order to derive the inventory
valuation impact per total throughput barrel, we utilize the total
dollar figures for the inventory valuation impact and divide by the
number of total throughput barrels for the period. |
Reconciliation of Petroleum Segment
Total Throughput Barrels |
|
|
|
Three Months Ended |
|
March 31, |
|
2023 |
|
2022 |
Total throughput barrels per day |
196,494 |
|
|
197,344 |
|
Days in the period |
90 |
|
|
90 |
|
Total throughput barrels |
17,684,480 |
|
|
17,760,998 |
|
Reconciliation of Petroleum
Segment Refining Margin per Total Throughput
Barrel |
|
|
|
Three Months Ended |
|
March 31, |
(in millions, except for per throughput barrel data) |
|
2023 |
|
|
|
2022 |
|
Refining margin |
$ |
411 |
|
|
$ |
297 |
|
Divided by: total throughput
barrels |
|
18 |
|
|
|
18 |
|
Refining margin per total throughput barrel |
$ |
23.24 |
|
|
$ |
16.75 |
|
Reconciliation of Petroleum Segment
Refining Margin Adjusted for Inventory Valuation Impacts
per Total Throughput Barrel |
|
|
|
Three Months Ended |
|
March 31, |
(in millions, except for throughput barrel data) |
|
2023 |
|
|
|
2022 |
|
Refining margin adjusted for
inventory valuation impacts |
$ |
423 |
|
|
$ |
164 |
|
Divided by: total throughput
barrels |
|
18 |
|
|
|
18 |
|
Refining margin adjusted for inventory valuation impacts
per total throughput barrel |
$ |
23.91 |
|
|
$ |
9.24 |
|
Reconciliation of Petroleum Segment
Direct Operating Expenses per Total Throughput
Barrel |
|
|
|
Three Months Ended |
|
March 31, |
(in millions, except for throughput barrel data) |
|
2023 |
|
|
|
2022 |
|
Direct operating expenses
(exclusive of depreciation and amortization) |
$ |
104 |
|
|
$ |
99 |
|
Divided by: total throughput
barrels |
|
18 |
|
|
|
18 |
|
Direct operating expenses per total throughput
barrel |
$ |
5.90 |
|
|
$ |
5.57 |
|
Reconciliation of Nitrogen Fertilizer
Segment Net Income to EBITDA and
Adjusted EBITDA |
|
|
|
Three Months Ended |
|
March 31, |
(in millions) |
|
2023 |
|
|
|
2022 |
|
Nitrogen fertilizer
net income |
$ |
102 |
|
|
$ |
94 |
|
Interest expense, net |
|
7 |
|
|
|
10 |
|
Depreciation and amortization |
|
15 |
|
|
|
19 |
|
Nitrogen Fertilizer EBITDA and Adjusted
EBITDA |
$ |
124 |
|
|
$ |
123 |
|
Reconciliation of Total Debt and Net Debt and Finance Lease
Obligations to EBITDA Exclusive of Nitrogen
Fertilizer |
|
|
(in millions) |
Twelve Months Ended March 31,
2023 |
Total debt and finance lease obligations (1) |
$ |
1,590 |
|
Less: |
|
Nitrogen Fertilizer debt and finance lease obligations (1) |
$ |
547 |
|
Total debt and finance lease obligations exclusive of Nitrogen
Fertilizer |
|
1,043 |
|
|
|
EBITDA exclusive of Nitrogen
Fertilizer |
$ |
893 |
|
|
|
Total debt and finance
lease obligations to EBITDA exclusive of Nitrogen
Fertilizer |
|
1.17 |
|
|
|
Consolidated cash and cash
equivalents |
$ |
601 |
|
Less: |
|
Nitrogen Fertilizer cash and cash equivalents |
|
121 |
|
Cash and cash equivalents exclusive of Nitrogen Fertilizer |
|
480 |
|
|
|
Net debt and finance lease
obligations exclusive of Nitrogen Fertilizer (2) |
$ |
563 |
|
|
|
Net debt and finance
lease obligations to EBITDA exclusive of Nitrogen
Fertilizer (2) |
|
0.63 |
|
______________________________ |
(1) |
Amounts are shown inclusive of the current portion of long-term
debt and finance lease obligations. |
(2) |
Net debt represents total debt and finance lease obligations
exclusive of cash and cash equivalents. |
|
Three Months Ended |
|
Twelve Months Ended March 31,
2023 |
(in millions) |
June 30, 2022 |
|
September 30, 2022 |
|
December 31, 2022 |
|
March 31, 2023 |
|
Consolidated |
|
|
|
|
|
|
|
|
|
Net income |
$ |
239 |
|
|
$ |
80 |
|
|
$ |
172 |
|
|
$ |
259 |
|
|
$ |
750 |
|
Interest expense, net |
|
23 |
|
|
|
19 |
|
|
|
18 |
|
|
|
18 |
|
|
|
78 |
|
Income tax expense |
|
66 |
|
|
|
7 |
|
|
|
50 |
|
|
|
56 |
|
|
|
179 |
|
Depreciation and amortization |
|
73 |
|
|
|
75 |
|
|
|
73 |
|
|
|
68 |
|
|
|
289 |
|
EBITDA |
$ |
401 |
|
|
$ |
181 |
|
|
$ |
313 |
|
|
$ |
401 |
|
|
$ |
1,296 |
|
|
|
|
|
|
|
|
|
|
|
Nitrogen Fertilizer |
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
118 |
|
|
$ |
(20 |
) |
|
$ |
95 |
|
|
$ |
102 |
|
|
$ |
295 |
|
Interest expense, net |
|
8 |
|
|
|
8 |
|
|
|
8 |
|
|
|
7 |
|
|
|
31 |
|
Depreciation and amortization |
|
21 |
|
|
|
22 |
|
|
|
19 |
|
|
|
15 |
|
|
|
77 |
|
EBITDA |
$ |
147 |
|
|
$ |
10 |
|
|
$ |
122 |
|
|
$ |
124 |
|
|
$ |
403 |
|
|
|
|
|
|
|
|
|
|
|
EBITDA exclusive of
Nitrogen Fertilizer |
$ |
254 |
|
|
$ |
171 |
|
|
$ |
191 |
|
|
$ |
277 |
|
|
$ |
893 |
|
______________________________ |
(1) |
Due to rounding, numbers within this table may not add or equal to
totals presented. |
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