CVR Energy, Inc. (NYSE:CVI) today announced net income of $66
million, or 76 cents per diluted share, on net sales of $1,537
million for the first quarter of 2018, compared to net income of
$22 million, or 26 cents per diluted share, on net sales of $1,507
million for the 2017 first quarter. First quarter 2018 adjusted
EBITDA, a non-GAAP financial measure, was $86 million, compared to
first quarter 2017 adjusted EBITDA of $80 million.
“CVR Refining reported solid financial results for the 2018
first quarter,” said Dave Lamp, CVR Energy’s chief executive
officer. “The quarter’s fiscal performance was driven by stronger
crack spreads, hedging gains, a reduction to CVR Refining’s
estimated Renewable Volume Obligation and lower Renewable
Identification Number prices.
“CVR Partners' Coffeyville, Kansas, fertilizer plant performed
extremely well during the 2018 first quarter, posting on-stream
rates at or near 100 percent,” Lamp said. “While unfavorable
weather conditions have delayed the start of the spring
application, we expect a strong planting season due to lower than
average customer inventory levels.”
Petroleum Business
The petroleum business, which is operated by CVR Refining and
includes the Coffeyville and Wynnewood refineries, reported first
quarter 2018 operating income of $97 million on net sales of $1,458
million, compared to operating income of $66 million on net sales
of $1,424 million in the first quarter of 2017.
Refining margin adjusted for FIFO impact per crude oil
throughput barrel, a non-GAAP financial measure, was $13.77 in the
2018 first quarter, compared to $11.54 during the same period in
2017. Direct operating expenses (exclusive of depreciation and
amortization), excluding major scheduled turnaround expenses, per
combined total throughput, for the 2018 first quarter were $5.49,
compared to $4.34 in the first quarter of 2017.
First quarter 2018 combined crude oil throughput was
approximately 178,000 barrels per day (bpd), compared to
approximately 214,000 bpd of combined crude oil throughput for the
first quarter of 2017.
Nitrogen Fertilizers Business
The fertilizer business, which is operated by CVR Partners and
includes the Coffeyville and East Dubuque fertilizer facilities,
reported a first quarter 2018 operating loss of $3 million on net
sales of $80 million, compared to operating income of $5 million on
net sales of $85 million for the first quarter of 2017.
For the first quarter of 2018, consolidated average realized
gate prices for UAN and ammonia were $153 per ton and $322 per ton,
respectively. Consolidated average realized gate prices for UAN and
ammonia were $160 per ton and $308 per ton, respectively, for the
same period in 2017.
CVR Partners’ fertilizer facilities produced a combined 199,000
tons of ammonia during the first quarter of 2018, of which 59,000
net tons were available for sale while the rest was upgraded to
other fertilizer products, including 339,000 tons of UAN. In the
2017 first quarter, the fertilizer facilities produced 219,000 tons
of ammonia, of which 80,000 net tons were available for sale while
the remainder was upgraded to other fertilizer products, including
342,000 tons of UAN.
Cash, Debt and Dividend
Consolidated cash and cash equivalents was $420 million at March
31, 2018. Consolidated total debt was $1,167 million at March 31,
2018. The company had no debt exclusive of CVR Refining’s and CVR
Partners’ debt.
CVR Energy also announced a first quarter 2018 cash dividend of
50 cents per share. The dividend, as declared by CVR Energy’s Board
of Directors, will be paid on May 14, 2018, to stockholders of
record on May 7, 2018.
Today, CVR Refining announced a 2018 first quarter cash
distribution of 51 cents per common unit. CVR Partners announced
that it will not pay a cash distribution for the 2018 first
quarter.
First Quarter 2018 Earnings Conference Call
CVR Energy previously announced that it will host its first
quarter 2018 Earnings Conference Call for analysts and investors on
Thursday, April 26, 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 athttp://edge.media-server.com/m6/p/5vre2rts. 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
athttp://edge.media-server.com/m6/p/5vre2rts. A repeat of the
conference call can be accessed by dialing (877) 660-6853,
conference ID 13678612.
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. 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 FinksCVR Energy, Inc.(281)
207-3588InvestorRelations@CVREnergy.com
Media Relations:Brandee StephensCVR Energy,
Inc.(281) 207-3516MediaRelations@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, 2017).
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
(in millions, except per share
data) |
Consolidated
Statement of Operations Data: |
|
|
|
Net sales |
$ |
1,536.5 |
|
|
$ |
1,507.1 |
|
Operating costs and
expenses: |
|
|
|
Cost of materials and
other |
1,238.3 |
|
|
1,221.2 |
|
Direct operating
expenses(1) |
131.9 |
|
|
138.1 |
|
Depreciation and
amortization |
49.1 |
|
|
48.6 |
|
Cost of
sales |
1,419.3 |
|
|
1,407.9 |
|
Selling, general and
administrative expenses(1) |
23.9 |
|
|
29.1 |
|
Depreciation and
amortization |
2.8 |
|
|
2.5 |
|
Operating
income |
90.5 |
|
|
67.6 |
|
Interest expense and
other financing costs |
(27.1 |
) |
|
(27.0 |
) |
Interest income |
0.2 |
|
|
0.2 |
|
Gain on derivatives,
net |
59.3 |
|
|
12.2 |
|
Other income, net |
1.5 |
|
|
— |
|
Income
before income tax expense |
124.4 |
|
|
53.0 |
|
Income tax expense |
20.8 |
|
|
14.8 |
|
Net
income |
103.6 |
|
|
38.2 |
|
Less: Net
income attributable to noncontrolling interest |
37.4 |
|
|
16.0 |
|
Net
income attributable to CVR Energy stockholders |
$ |
66.2 |
|
|
$ |
22.2 |
|
|
|
|
|
Basic and diluted
earnings per share |
$ |
0.76 |
|
|
$ |
0.26 |
|
Dividends declared per
share |
$ |
0.50 |
|
|
$ |
0.50 |
|
|
|
|
|
Adjusted EBITDA* |
$ |
85.9 |
|
|
$ |
80.4 |
|
Adjusted net
income* |
$ |
34.0 |
|
|
$ |
23.1 |
|
Adjusted net income per
diluted share* |
$ |
0.39 |
|
|
$ |
0.27 |
|
|
|
|
|
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, 2018
and 2017 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 31, 2018 |
|
As of December 31, 2017 |
|
|
|
(audited) |
|
(in millions) |
Balance Sheet
Data: |
|
|
|
Cash and cash
equivalents |
$ |
420.0 |
|
|
$ |
481.8 |
|
Working capital |
624.8 |
|
|
550.5 |
|
Total assets |
3,823.3 |
|
|
3,806.7 |
|
Total debt, including
current portion |
1,167.0 |
|
|
1,166.5 |
|
Total CVR stockholders’
equity |
941.6 |
|
|
918.8 |
|
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
(in millions) |
Cash Flow
Data: |
|
|
|
Net cash flow provided
by (used in): |
|
|
|
Operating
activities |
$ |
24.5 |
|
|
$ |
137.2 |
|
Investing
activities |
(19.8 |
) |
|
(25.6 |
) |
Financing
activities |
(66.5 |
) |
|
(43.8 |
) |
Net
increase (decrease) in cash and cash equivalents |
$ |
(61.8 |
) |
|
$ |
67.8 |
|
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, 2018 are included
in CVR Refining’s press release dated April 26, 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 March 31, 2018 and serve as the general partner. The
Nitrogen Fertilizer segment consists of nitrogen fertilizer
manufacturing facilities located in Coffeyville, Kansas and East
Dubuque, Illinois. Detailed operating results for the Nitrogen
Fertilizer segment for the three months ended March 31, 2018
are included in CVR Partners’ press release dated April 26,
2018.
|
Petroleum (CVR Refining) |
|
Nitrogen Fertilizer (CVR
Partners) |
|
Corporate and Other |
|
Consolidated |
|
(in millions) |
Three Months
Ended March 31, 2018 |
|
|
|
|
|
|
|
Net sales |
$ |
1,458.2 |
|
|
$ |
79.9 |
|
|
$ |
(1.6 |
) |
|
$ |
1,536.5 |
|
Cost of materials and
other |
1,217.7 |
|
|
22.3 |
|
|
(1.7 |
) |
|
1,238.3 |
|
Direct operating
expenses (1) |
93.0 |
|
|
38.9 |
|
|
— |
|
|
131.9 |
|
Major scheduled
turnaround expenses |
— |
|
|
— |
|
|
— |
|
|
— |
|
Selling, general and
administrative |
16.6 |
|
|
5.7 |
|
|
1.6 |
|
|
23.9 |
|
Depreciation and
amortization |
33.7 |
|
|
16.4 |
|
|
1.8 |
|
|
51.9 |
|
Operating
income (loss) |
$ |
97.2 |
|
|
$ |
(3.4 |
) |
|
$ |
(3.3 |
) |
|
$ |
90.5 |
|
|
|
|
|
|
|
|
|
Capital
expenditures |
$ |
16.0 |
|
|
$ |
2.7 |
|
|
$ |
1.3 |
|
|
$ |
20.0 |
|
|
Petroleum (CVR Refining) |
|
Nitrogen Fertilizer (CVR
Partners) |
|
Corporate and Other |
|
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 |
|
__________________________
(1) Excluding turnaround expenses.
|
Petroleum (CVR Refining) |
|
Nitrogen Fertilizer (CVR
Partners) |
|
Corporate and Other |
|
Consolidated |
|
(in millions) |
March 31,
2018 |
|
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
106.9 |
|
|
$ |
61.1 |
|
|
$ |
252.0 |
|
|
$ |
420.0 |
|
Total assets |
2,295.3 |
|
|
1,239.5 |
|
|
288.5 |
|
|
3,823.3 |
|
Total debt, including
current portion |
540.4 |
|
|
626.6 |
|
|
— |
|
|
1,167.0 |
|
|
|
|
|
|
|
|
|
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 |
|
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, 2018 are included in CVR Refining’s press
release dated April 26, 2018.
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
(in millions) |
Petroleum
Segment Summary Financial Results: |
|
|
|
Net sales |
$ |
1,458.2 |
|
|
$ |
1,423.5 |
|
Operating costs and
expenses: |
|
|
|
Cost of materials and
other |
1,217.7 |
|
|
1,201.3 |
|
Direct operating
expenses(1) |
93.0 |
|
|
89.2 |
|
Major scheduled
turnaround expenses |
— |
|
|
12.9 |
|
Depreciation and
amortization |
32.7 |
|
|
33.3 |
|
Cost of
sales |
1,343.4 |
|
|
1,336.7 |
|
Selling, general and
administrative expenses(1) |
16.6 |
|
|
20.0 |
|
Depreciation and
amortization |
1.0 |
|
|
0.8 |
|
Operating
income |
97.2 |
|
|
66.0 |
|
Interest expense and
other financing costs |
(11.4 |
) |
|
(11.2 |
) |
Interest income |
0.1 |
|
|
— |
|
Gain on derivatives,
net |
59.3 |
|
|
12.2 |
|
Other income, net |
1.5 |
|
|
— |
|
Income
before income tax expense |
146.7 |
|
|
67.0 |
|
Income tax expense |
— |
|
|
— |
|
Net
income |
$ |
146.7 |
|
|
$ |
67.0 |
|
|
|
|
|
Gross profit |
$ |
114.8 |
|
|
$ |
86.8 |
|
Refining margin* |
$ |
240.5 |
|
|
$ |
222.2 |
|
Refining margin
adjusted for FIFO impact* |
$ |
220.1 |
|
|
$ |
222.5 |
|
Adjusted Petroleum
EBITDA* |
$ |
125.7 |
|
|
$ |
114.5 |
|
______________________* See “Use of Non-GAAP Financial Measures”
below.
(1) Direct operating expense for the three months ended
March 31, 2018 and 2017 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
ended March 31, 2018 and 2017 are shown exclusive of
depreciation and amortization, which amounts are presented
separately below selling, general and administrative expenses.
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
(dollars per barrel) |
Petroleum
Segment Key Operating Statistics: |
|
|
|
Per crude oil
throughput barrel: |
|
|
|
Gross
profit |
$ |
7.18 |
|
|
$ |
4.50 |
|
Refining
margin* |
15.04 |
|
|
11.52 |
|
FIFO
impact, (favorable) unfavorable |
(1.27 |
) |
|
0.02 |
|
Refining
margin adjusted for FIFO impact* |
13.77 |
|
|
11.54 |
|
Direct
operating expenses and major scheduled turnaround expenses |
5.82 |
|
|
5.29 |
|
Direct
operating expenses excluding major scheduled turnaround
expenses |
5.82 |
|
|
4.63 |
|
Per total throughput
barrel: |
|
|
|
Direct
operating expenses and major scheduled turnaround expenses |
5.49 |
|
|
4.96 |
|
Direct
operating expenses excluding major scheduled turnaround
expenses |
5.49 |
|
|
4.34 |
|
______________________* See “Use of Non-GAAP Financial Measures”
below.
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
Petroleum
Segment Summary |
|
|
% |
|
|
|
% |
Refining
Throughput and Production Data (bpd): |
|
|
|
|
|
|
|
Throughput: |
|
|
|
|
|
|
|
Condensate |
17,714 |
|
|
9.4 |
|
|
7,503 |
|
|
3.3 |
|
Sweet |
159,495 |
|
|
84.7 |
|
|
190,350 |
|
|
83.3 |
|
Sour |
— |
|
|
— |
|
|
— |
|
|
— |
|
Heavy
sour |
490 |
|
|
0.3 |
|
|
16,516 |
|
|
7.2 |
|
Total
crude oil throughput |
177,699 |
|
|
94.4 |
|
|
214,369 |
|
|
93.8 |
|
All other
feedstocks and blendstocks |
10,669 |
|
|
5.6 |
|
|
14,243 |
|
|
6.2 |
|
Total
throughput |
188,368 |
|
|
100.0 |
|
|
228,612 |
|
|
100.0 |
|
Production: |
|
|
|
|
|
|
|
Gasoline |
92,048 |
|
|
48.9 |
|
|
118,955 |
|
|
51.9 |
|
Distillate |
78,866 |
|
|
41.9 |
|
|
89,907 |
|
|
39.2 |
|
Other
(excluding internally produced fuel) |
17,396 |
|
|
9.2 |
|
|
20,298 |
|
|
8.9 |
|
Total
refining production (excluding internally produced fuel) |
188,310 |
|
|
100.0 |
|
|
229,160 |
|
|
100.0 |
|
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
Market
Indicators (dollars per barrel): |
|
|
|
West Texas Intermediate
(WTI) NYMEX |
$ |
62.89 |
|
|
$ |
51.78 |
|
Crude Oil
Differentials: |
|
|
|
WTI less
WTS (light/medium sour) |
1.43 |
|
|
1.42 |
|
WTI less
WCS (heavy sour) |
25.74 |
|
|
13.77 |
|
WTI less
condensate |
0.38 |
|
|
0.10 |
|
Midland
Cushing Differential |
0.38 |
|
|
(0.02 |
) |
NYMEX Crack
Spreads: |
|
|
|
Gasoline |
15.35 |
|
|
14.68 |
|
Heating
Oil |
20.46 |
|
|
15.54 |
|
NYMEX
2-1-1 Crack Spread |
17.91 |
|
|
15.11 |
|
PADD II Group 3
Basis: |
|
|
|
Gasoline |
(1.87 |
) |
|
(1.96 |
) |
Ultra Low
Sulfur Diesel |
(0.61 |
) |
|
(1.58 |
) |
PADD II Group 3 Product
Crack Spread: |
|
|
|
Gasoline |
13.48 |
|
|
12.71 |
|
Ultra Low
Sulfur Diesel |
19.85 |
|
|
13.96 |
|
PADD II Group 3
2-1-1 |
16.67 |
|
|
13.34 |
|
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
|
|
% |
|
|
|
% |
Coffeyville
Refinery Throughput and Production Data (bpd): |
|
|
|
|
|
|
|
Throughput: |
|
|
|
|
|
|
|
Condensate |
17,714 |
|
|
17.0 |
|
|
7,503 |
|
|
5.3 |
|
Sweet |
80,527 |
|
|
77.4 |
|
|
106,740 |
|
|
75.3 |
|
Sour |
— |
|
|
— |
|
|
— |
|
|
— |
|
Heavy
sour |
490 |
|
|
0.5 |
|
|
16,516 |
|
|
11.7 |
|
Total
crude oil throughput |
98,731 |
|
|
94.9 |
|
|
130,759 |
|
|
92.3 |
|
All other
feedstocks and blendstocks |
5,365 |
|
|
5.1 |
|
|
10,915 |
|
|
7.7 |
|
Total
throughput |
104,096 |
|
|
100.0 |
|
|
141,674 |
|
|
100.0 |
|
Production: |
|
|
|
|
|
|
|
Gasoline |
48,453 |
|
|
45.9 |
|
|
74,538 |
|
|
51.6 |
|
Distillate |
44,245 |
|
|
41.9 |
|
|
59,444 |
|
|
41.2 |
|
Other
(excluding internally produced fuel) |
12,831 |
|
|
12.2 |
|
|
10,335 |
|
|
7.2 |
|
Total
refining production (excluding internally produced fuel) |
105,529 |
|
|
100.0 |
|
|
144,317 |
|
|
100.0 |
|
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
|
|
% |
|
|
|
% |
Wynnewood
Refinery Throughput and Production Data (bpd): |
|
|
|
|
|
|
|
Throughput: |
|
|
|
|
|
|
|
Condensate |
— |
|
|
— |
|
|
— |
|
|
— |
|
Sweet |
78,968 |
|
|
93.7 |
|
|
83,610 |
|
|
96.2 |
|
Sour |
— |
|
|
— |
|
|
— |
|
|
— |
|
Heavy
sour |
— |
|
|
— |
|
|
— |
|
|
— |
|
Total
crude oil throughput |
78,968 |
|
|
93.7 |
|
|
83,610 |
|
|
96.2 |
|
All other
feedstocks and blendstocks |
5,304 |
|
|
6.3 |
|
|
3,328 |
|
|
3.8 |
|
Total
throughput |
84,272 |
|
|
100.0 |
|
|
86,938 |
|
|
100.0 |
|
Production: |
|
|
|
|
|
|
|
Gasoline |
43,595 |
|
|
52.7 |
|
|
44,417 |
|
|
52.4 |
|
Distillate |
34,621 |
|
|
41.8 |
|
|
30,463 |
|
|
35.9 |
|
Other
(excluding internally produced fuel) |
4,565 |
|
|
5.5 |
|
|
9,963 |
|
|
11.7 |
|
Total
refining production (excluding internally produced fuel) |
82,781 |
|
|
100.0 |
|
|
84,843 |
|
|
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, 2018 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, 2018 are included in CVR Partners’ press release
dated April 26, 2018.
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
(in millions) |
Nitrogen
Fertilizer Segment Business Financial Results: |
|
|
|
Net sales |
$ |
79.9 |
|
|
$ |
85.3 |
|
Cost of materials and
other |
22.3 |
|
|
21.8 |
|
Direct operating
expenses(1) |
38.9 |
|
|
35.9 |
|
Major scheduled
turnaround expenses |
— |
|
|
— |
|
Depreciation and
amortization |
16.4 |
|
|
15.4 |
|
Cost of
sales |
77.6 |
|
|
73.1 |
|
Selling, general and
administrative expenses |
5.7 |
|
|
6.9 |
|
Operating
income (loss) |
(3.4 |
) |
|
5.3 |
|
Interest expense and
other financing costs |
(15.7 |
) |
|
(15.7 |
) |
Other income, net |
— |
|
|
0.1 |
|
Loss
before income tax expense |
(19.1 |
) |
|
(10.3 |
) |
Income tax expense |
— |
|
|
— |
|
Net
loss |
$ |
(19.1 |
) |
|
$ |
(10.3 |
) |
|
|
|
|
Adjusted Nitrogen
Fertilizer EBITDA* |
$ |
13.0 |
|
|
$ |
20.8 |
|
_______________________
* See “Use of Non-GAAP Financial Measures” below.
(1) Direct operating expenses for the three months ended
March 31, 2018 and 2017 are shown exclusive of depreciation
and amortization and major scheduled turnaround expenses, which
amounts are presented separately below direct operating
expenses.
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
Nitrogen
Fertilizer Segment Key Operating Statistics: |
|
|
|
|
|
|
|
Consolidated sales
(thousand tons): |
|
|
|
Ammonia |
36.1 |
|
|
61.9 |
|
UAN |
345.3 |
|
|
321.6 |
|
|
|
|
|
Consolidated product
pricing at gate (dollars per ton) (1): |
|
|
|
Ammonia |
$ |
322 |
|
|
$ |
308 |
|
UAN |
$ |
153 |
|
|
$ |
160 |
|
|
|
|
|
Consolidated production
volume (thousand tons): |
|
|
|
Ammonia
(gross produced) (2) |
199.2 |
|
|
219.2 |
|
Ammonia
(net available for sale) (2) |
58.9 |
|
|
80.0 |
|
UAN |
339.3 |
|
|
341.9 |
|
|
|
|
|
Feedstock: |
|
|
|
Petroleum
coke used in production (thousand tons) |
118.2 |
|
|
132.6 |
|
Petroleum
coke used in production (dollars per ton) |
$ |
18 |
|
|
$ |
14 |
|
Natural
gas used in production (thousands of MMBtus)(3) |
1,850.3 |
|
|
2,091.2 |
|
Natural
gas used in production (dollars per MMBtu)(3)(4) |
$ |
3.24 |
|
|
$ |
3.41 |
|
Natural
gas in cost of materials and other (thousands of MMBtus)(3) |
1,257.7 |
|
|
1,476.0 |
|
Natural
gas in cost of materials and other (dollars per MMBtu)(3)(4) |
$ |
3.48 |
|
|
$ |
3.59 |
|
|
|
|
|
Coffeyville Facility
on-stream factor (5): |
|
|
|
Gasification |
100.0 |
% |
|
98.9 |
% |
Ammonia |
99.8 |
% |
|
98.5 |
% |
UAN |
99.2 |
% |
|
96.8 |
% |
|
|
|
|
East Dubuque Facility
on-stream factors (5): |
|
|
|
Ammonia |
86.7 |
% |
|
99.6 |
% |
UAN |
87.0 |
% |
|
98.2 |
% |
|
|
|
|
Market
Indicators: |
|
|
|
Ammonia — Southern
Plains (dollars per ton) |
$ |
382 |
|
|
$ |
387 |
|
Ammonia — Corn belt
(dollars per ton) |
$ |
427 |
|
|
$ |
424 |
|
UAN — Corn belt
(dollars per ton) |
$ |
210 |
|
|
$ |
215 |
|
Natural gas NYMEX
(dollars per MMBtu) |
$ |
2.85 |
|
|
$ |
3.06 |
|
________________________
(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 (exclusive of depreciation and
amortization).
(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.
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 the weighted-average diluted shares outstanding.
Adjusted net income represents net income (loss), as adjusted, that
is attributable to CVR Energy stockholders.
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
(in millions, except per share
data) |
Reconciliation
of Income before income tax expense to Adjusted Net
Income: |
|
|
|
Income before income
tax expense |
$ |
124.4 |
|
|
$ |
53.0 |
|
Adjustments: |
|
|
|
FIFO
impact, (favorable) unfavorable |
(20.4 |
) |
|
0.3 |
|
Major
scheduled turnaround expenses |
— |
|
|
12.9 |
|
Gain on
derivatives, net |
(59.3 |
) |
|
(12.2 |
) |
Current
period settlement on derivative contracts (1) |
13.7 |
|
|
1.2 |
|
Adjusted
net income before income tax expense and noncontrolling
interest |
58.4 |
|
|
55.2 |
|
Adjusted
net income attributed to noncontrolling interest |
(14.9 |
) |
|
(16.7 |
) |
Income
tax expense, as adjusted |
(9.5 |
) |
|
(15.4 |
) |
Adjusted
net income |
$ |
34.0 |
|
|
$ |
23.1 |
|
|
|
|
|
Adjusted
net income per diluted share |
$ |
0.39 |
|
|
$ |
0.27 |
|
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 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 ended March 31, 2018 and 2017 is
as follows:
Petroleum
Segment Operating Data |
|
|
|
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
(in millions) |
Net sales |
$ |
1,458.2 |
|
|
$ |
1,423.5 |
|
Operating costs and
expenses: |
|
|
|
Cost of materials and
other |
1,217.7 |
|
|
1,201.3 |
|
Direct operating
expenses (exclusive of depreciation and amortization and major
scheduled turnaround expenses as reflected below) |
93.0 |
|
|
89.2 |
|
Major scheduled
turnaround expenses |
— |
|
|
12.9 |
|
Depreciation and
amortization |
32.7 |
|
|
33.3 |
|
Gross
profit |
114.8 |
|
|
86.8 |
|
Add: |
|
|
|
Direct operating
expenses (exclusive of depreciation and amortization and major
scheduled turnaround expenses as reflected below) |
93.0 |
|
|
89.2 |
|
Major scheduled
turnaround expenses |
— |
|
|
12.9 |
|
Depreciation and
amortization |
32.7 |
|
|
33.3 |
|
Refining
margin |
240.5 |
|
|
222.2 |
|
FIFO impact,
(favorable) unfavorable |
(20.4 |
) |
|
0.3 |
|
Refining
margin adjusted for FIFO impact |
$ |
220.1 |
|
|
$ |
222.5 |
|
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
Total crude oil
throughput barrels per day |
177,699 |
|
|
214,369 |
|
Days in the period |
90 |
|
|
90 |
|
Total
crude oil throughput barrels |
15,992,910 |
|
|
19,293,210 |
|
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
(in millions, except for $ per barrel
data) |
Refining margin |
$ |
240.5 |
|
|
$ |
222.2 |
|
Divided by: crude oil
throughput barrels |
16.0 |
|
|
19.3 |
|
Refining
margin per crude oil throughput barrel |
$ |
15.04 |
|
|
$ |
11.52 |
|
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
(in millions, except for $ per barrel
data) |
Refining margin
adjusted for FIFO impact |
$ |
220.1 |
|
|
$ |
222.5 |
|
Divided by: crude oil
throughput barrels |
16.0 |
|
|
19.3 |
|
Refining
margin adjusted for FIFO impact per crude oil throughput
barrel |
$ |
13.77 |
|
|
$ |
11.54 |
|
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 and (iv) current period settlements on derivative
contracts, 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 ended March 31, 2018 and 2017 is as follows:
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
(in millions) |
Net income attributable
to CVR Energy stockholders |
$ |
66.2 |
|
|
$ |
22.2 |
|
Add: |
|
|
|
Interest
expense and other financing costs, net of interest income |
26.9 |
|
|
26.8 |
|
Income
tax expense |
20.8 |
|
|
14.8 |
|
Depreciation and amortization |
51.9 |
|
|
51.1 |
|
Adjustments attributable to noncontrolling interest |
(36.4 |
) |
|
(35.9 |
) |
EBITDA |
129.4 |
|
|
79.0 |
|
Add: |
|
|
|
FIFO
impact, (favorable) unfavorable |
(20.4 |
) |
|
0.3 |
|
Major
scheduled turnaround expenses |
— |
|
|
12.9 |
|
Gain on
derivatives, net |
(59.3 |
) |
|
(12.2 |
) |
Current
period settlement on derivative contracts (1) |
13.7 |
|
|
1.2 |
|
Adjustments attributable to noncontrolling interest |
22.5 |
|
|
(0.8 |
) |
Adjusted EBITDA |
$ |
85.9 |
|
|
$ |
80.4 |
|
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, 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 derivatives,
net; and (iv) current period settlements on derivative
contracts.
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 ended March 31, 2018 and 2017 is as
follows:
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
(in millions) |
Petroleum: |
|
|
|
Petroleum net
income |
$ |
146.7 |
|
|
$ |
67.0 |
|
Add: |
|
|
|
Interest
expense and other financing costs, net of interest income |
11.3 |
|
|
11.2 |
|
Income
tax expense |
— |
|
|
— |
|
Depreciation and amortization |
33.7 |
|
|
34.1 |
|
Petroleum EBITDA |
191.7 |
|
|
112.3 |
|
Add: |
|
|
|
FIFO
impact, (favorable) unfavorable |
(20.4 |
) |
|
0.3 |
|
Major
scheduled turnaround expenses |
— |
|
|
12.9 |
|
Gain on
derivatives, net |
(59.3 |
) |
|
(12.2 |
) |
Current
period settlements on derivative contracts (1) |
13.7 |
|
|
1.2 |
|
Adjusted Petroleum
EBITDA |
$ |
125.7 |
|
|
$ |
114.5 |
|
|
Three Months Ended March
31, |
|
2018 |
|
2017 |
|
(in millions) |
Nitrogen
Fertilizer: |
|
|
|
Nitrogen fertilizer net
loss |
$ |
(19.1 |
) |
|
$ |
(10.3 |
) |
Add: |
|
|
|
Interest
expense and other financing costs, net |
15.7 |
|
|
15.7 |
|
Income
tax expense |
— |
|
|
— |
|
Depreciation and amortization |
16.4 |
|
|
15.4 |
|
Nitrogen Fertilizer
EBITDA and Adjusted EBITDA |
$ |
13.0 |
|
|
$ |
20.8 |
|
___________________________(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.
CVR Energy (NYSE:CVI)
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CVR Energy (NYSE:CVI)
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De Juil 2023 à Juil 2024