CVR Energy, Inc. (NYSE: CVI) today announced fourth quarter 2019
net income of $44 million, or 44 cents per diluted share, on net
sales of $1.6 billion, compared to net income of $73 million, or 73
cents per diluted share, on net sales of $1.7 billion for the
fourth quarter of 2018. Fourth quarter 2019 EBITDA was
$142 million, compared to fourth quarter 2018 EBITDA of $202
million.
For full-year 2019, the Company reported net
income of $380 million, or $3.78 per diluted share, on net sales of
$6.4 billion, compared to net income for full-year 2018 of $259
million, or $2.80 per diluted share, on net sales of $7.1 billion.
Full-year 2019 EBITDA was $880 million, compared to $821 million
for 2018.
“CVR Energy delivered solid 2019 full-year and
fourth quarter results, led by continuous improvement in our core
values of environmental, health and safety across both our
petroleum and nitrogen fertilizer segments,” said Dave Lamp, CVR
Energy’s Chief Executive Officer. “Our petroleum business again
posted increased earnings year-over-year, driven by higher
throughput rates, increased capture rates and higher refining
margins despite lower crack spreads. In addition, we began our
multi-year approach intended to improve crude oil optionality,
market capture and reliability at our refineries.
“CVR Partners achieved year-over-year increases
in net income and EBITDA and benefited from higher fertilizer sales
volumes and stronger product pricing in 2019,” Lamp said. “As a
result, CVR Partners distributed a total of 40 cents per unit
during 2019 despite poor weather during the year, which impacted
market conditions. Looking forward, we anticipate strong demand for
spring nitrogen fertilizer application and currently expect 92
million to 95 million acres of corn to be planted this
year.”
Petroleum
The Petroleum Segment reported fourth quarter
2019 operating income of $82 million, on net sales of $1.5 billion,
compared to operating income of $122 million, on net sales of $1.6
billion in the fourth quarter of 2018.
Refining margin per total throughput barrel was
$12.47 in the fourth quarter 2019, compared to $13.67 during the
same period in 2018. Crude oil pricing during the quarter led to a
favorable inventory valuation impact of $12 million, or 61 cents
per total throughput barrel, compared to an unfavorable impact of
$77 million, or $3.80 per total throughput barrel, in the fourth
quarter of 2018. The Petroleum Segment also recognized a fourth
quarter 2019 derivative loss of $19 million, or 99 cents
per total throughput barrel, compared to a gain of $70 million, or
$3.45 per total throughput barrel, for the fourth quarter of 2018.
Included in the total derivative loss for the fourth quarter of
2019 was an unrealized loss of $24 million, compared to an
unrealized gain of $37 million for the fourth quarter of
2018.
Fourth quarter 2019 combined total throughput
was approximately 213,000 barrels per day (bpd), compared to
approximately 221,000 bpd of combined total throughput for the
fourth quarter 2018.
For full-year 2019, operating income was $574
million, on net sales of $6.0 billion, compared to operating income
of $544 million, on net sales of $6.8 billion for the year ended
2018.
The Petroleum Segment’s refining margin per
total throughput barrel for 2019 was $15.26, compared to $15.18 for
2018. This year-over-year increase was driven in part by lower
renewable identification number (RIN) expenses resulting from a
reduction in market prices. In addition, operating income in the
Petroleum segment was positively impacted by a $9 million gain on
sale of the Cushing, Oklahoma, crude oil terminal. Combined total
throughput increased to approximately 216,000 bpd, compared to
approximately 213,000 bpd in the year ended 2018.
Nitrogen Fertilizer
The Nitrogen Fertilizer Segment reported an
operating loss of $9 million on net sales of $86 million for the
fourth quarter of 2019, compared to operating income of $8 million
on net sales of $98 million for the fourth quarter of 2018.
Fourth quarter 2019 average realized gate prices
for urea ammonia nitrate (UAN) decreased compared to the prior
year, down 2 percent to $176 per ton, while ammonia was flat at
$324 per ton. Average realized gate prices for UAN and ammonia were
$180 per ton and $324 per ton, respectively, for the fourth quarter
of 2018.
CVR Partners’ fertilizer facilities produced a
combined 180,000 tons of ammonia during the fourth quarter of 2019,
of which 55,000 net tons were available for sale while the rest was
upgraded to other fertilizer products, including 286,000 tons of
UAN. During the fourth quarter 2018, the fertilizer facilities
produced 209,000 tons of ammonia, of which 59,000 net tons were
available for sale while the remainder was upgraded to other
fertilizer products, including 357,000 tons of UAN.
For full-year 2019, operating income was $27
million on net sales of $404 million, compared to operating income
of $6 million on net sales of $351 million for the year ended
2018.
The average realized gate price for UAN
increased 15 percent to $199 per ton, coupled with a 20 percent
increase in ammonia to $392 per ton for full-year 2019. Average
realized gate prices for UAN and ammonia were $173 per ton and $328
per ton, respectively, for the year ended 2018. In 2019, our
fertilizer facilities produced a combined 766,000 tons of ammonia,
of which 223,000 tons were available for sale, while the rest was
upgraded to other fertilizer products, including 1,255,000 tons of
UAN. For the year ended 2018, the fertilizer facilities produced
794,000 tons of ammonia, of which 246,000 net tons were available
for sale while the remainder was upgraded to other fertilizer
products, including 1,276,000 tons of UAN.
Cash, Debt and Dividend
Consolidated cash and cash equivalents was $652
million at Dec. 31, 2019. Consolidated total debt was $1.2
billion at Dec. 31, 2019, with no debt other than the
Petroleum and Nitrogen Fertilizer segments’ debt.
CVR Energy announced a fourth quarter 2019 cash
dividend of 80 cents per share. The dividend, as declared by CVR
Energy’s Board of Directors, will be paid on March 9, 2020, to
stockholders of record as of the close of market on March 2,
2020. CVR Energy’s fourth quarter cash dividend brings the
cumulative cash dividends declared for the 2019 full year to $3.10
per share.
CVR Partners will not pay a cash distribution
for the 2019 fourth quarter.
Fourth Quarter 2019 Earnings Conference
Call
CVR Energy previously announced that it will
host its fourth quarter and full-year 2019 Earnings Conference Call
on Thursday, Feb. 20, at 1 p.m. Eastern. This Earnings
Conference Call may also include discussion of Company
developments, forward-looking information and other material
information about business and financial matters.
The fourth quarter and full-year 2019 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/9nek858g. A repeat of the call
can be accessed for 14 days by dialing (877) 660-6853, conference
ID 13698196.
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: dividends and
distributions including the timing, payment and amount (if any)
thereof; improvement of crude oil optionality, market capture and
reliability at our refineries; demand for spring nitrogen
fertilizer application; planted corn acres; refinery throughput,
direct operating expenses, capital expenditures, depreciation and
amortization and turnaround expense; continued safe and reliable
operations; ammonia utilization rates including impact of
turnarounds; inventory adjustments; and other matters. 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. Investors are
cautioned that various factors may affect these forward-looking
statements, including (among others) price volatility of crude oil,
other feedstocks and refined products; the ability of 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; general economic and business
conditions; 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 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 petroleum
refining and marketing business through its interest in CVR
Refining and the nitrogen fertilizer manufacturing business through
its interest in CVR Partners, LP. CVR Energy subsidiaries serve as
the general partner and own 34 percent of the common units of CVR
Partners.
For further information, please contact:
Investor Contact:Richard
RobertsCVR Energy, Inc.(281)
207-3205InvestorRelations@CVREnergy.com
Media Relations:Brandee
StephensCVR Energy, Inc.(281)
207-3516MediaRelations@CVREnergy.com
Non-GAAP Measures
Our management uses certain non-GAAP performance
measures to evaluate current and past performance and prospects for
the future to supplement our GAAP financial information presented
in accordance with U.S. 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.
Effective January 1, 2019, the Company revised
its accounting policy method for the costs of planned major
maintenance activities (turnarounds) specific to the Petroleum
Segment from being expensed as incurred (the direct expensing
method) to the deferral method. Refer to the 10-K for a further
discussion of the impacts of this change in accounting policy. As a
result of this change in accounting policy, the non-GAAP measures
of Adjusted EBITDA, Petroleum Adjusted EBITDA, Nitrogen Fertilizer
Adjusted EBITDA, Adjusted Net Income (Loss), and Direct Operating
Expenses per Total Throughput Barrel net of Turnaround Expense are
no longer being presented.
The following are non-GAAP measures that
continue to be presented for the year ended December 31, 2019:
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 recognized in prior periods. 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 divided by the total throughput barrels during 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.
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 industry, 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” section 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.
Items or Events Impacting
Comparability
Refer to the “Non-GAAP Measures” section above
for discussion of the changes made to the Company’s definition of
certain non-GAAP measures.
Petroleum Segment
Coffeyville Refinery - During the fourth quarter
of 2019, our Coffeyville Refinery incurred costs of
$15 million related to preparations for the planned turnaround
scheduled to be completed in the spring of 2020. During the first
quarter of 2018, our Coffeyville Refinery experienced an outage
with its fluid catalytic cracking unit (“FCCU”) lasting 48 days.
The FCCU outage had a significant negative impact on production and
sales during that period.
Wynnewood Refinery - The second phase of our
Wynnewood Refinery’s planned facility turnaround was completed in
the first quarter of 2019 at a cost of $24 million.
Nitrogen Fertilizer Segment
During the fourth quarter of 2018, the
Partnership recognized a $6 million business interruption
insurance recovery associated with an outage at its Coffeyville
Fertilizer Facility during 2017. The recovery is recorded in Other
income, net.
Coffeyville Fertilizer Facility - During 2018,
the Coffeyville Fertilizer Facility had a planned, full facility
turnaround lasting 15 days and incurred approximately $6 million in
turnaround expense in the second quarter of 2018.
East Dubuque Fertilizer Facility - During 2019,
the East Dubuque Fertilizer Facility had a planned, full facility
turnaround lasting 32 days and cost approximately $10 million in
the third and fourth quarters of 2019.
CVR Energy, Inc.(unaudited)
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions, except per share
amounts) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Consolidated Statement
of Operations Data |
|
|
|
|
|
Net sales |
$ |
1,569 |
|
|
$ |
1,738 |
|
|
$ |
6,364 |
|
|
$ |
7,124 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
Cost of materials and other |
1,262 |
|
|
1,388 |
|
|
4,851 |
|
|
5,683 |
|
Direct operating expenses (exclusive of depreciation and
amortization as reflected below) |
136 |
|
|
127 |
|
|
533 |
|
|
517 |
|
Depreciation and amortization |
70 |
|
|
69 |
|
|
278 |
|
|
263 |
|
Cost of sales |
1,468 |
|
|
1,584 |
|
|
5,662 |
|
|
6,463 |
|
Selling, general and administrative expenses (exclusive of
depreciation and amortization as reflected below) |
30 |
|
|
28 |
|
|
117 |
|
|
112 |
|
Depreciation and amortization |
1 |
|
|
2 |
|
|
9 |
|
|
11 |
|
Loss (gain) on asset disposal |
1 |
|
|
— |
|
|
(4 |
) |
|
6 |
|
Operating income |
69 |
|
|
124 |
|
|
580 |
|
|
532 |
|
Other income (expense): |
|
|
|
|
|
|
|
Interest expense, net |
(24 |
) |
|
(22 |
) |
|
(102 |
) |
|
(102 |
) |
Other income, net |
2 |
|
|
7 |
|
|
13 |
|
|
15 |
|
Income before income taxes |
47 |
|
|
109 |
|
|
491 |
|
|
445 |
|
Income tax expense |
19 |
|
|
14 |
|
|
129 |
|
|
79 |
|
Net income |
28 |
|
|
95 |
|
|
362 |
|
|
366 |
|
Less: Net (loss) income attributable to noncontrolling
interest |
(16 |
) |
|
22 |
|
|
(18 |
) |
|
107 |
|
Net income attributable to CVR Energy stockholders |
$ |
44 |
|
|
$ |
73 |
|
|
$ |
380 |
|
|
$ |
259 |
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per
share |
$ |
0.44 |
|
|
$ |
0.73 |
|
|
$ |
3.78 |
|
|
$ |
2.80 |
|
Dividends declared per
share |
$ |
0.80 |
|
|
$ |
0.75 |
|
|
$ |
3.05 |
|
|
$ |
2.50 |
|
|
|
|
|
|
|
|
|
EBITDA * |
$ |
142 |
|
|
$ |
202 |
|
|
$ |
880 |
|
|
$ |
821 |
|
|
|
|
|
|
|
|
|
Weighted-average common shares
outstanding - basic and diluted |
100.5 |
|
|
100.5 |
|
|
100.5 |
|
|
92.5 |
|
* See “Non-GAAP Reconciliations” section below.
Selected Balance Sheet Data:
(in millions) |
December 31, 2019 |
|
December 31, 2018 |
Cash and cash equivalents |
$ |
652 |
|
|
$ |
668 |
|
Working capital |
695 |
|
|
797 |
|
Total assets |
3,905 |
|
|
4,000 |
|
Total debt and finance lease
obligations |
1,195 |
|
|
1,170 |
|
Total liabilities |
2,237 |
|
|
2,057 |
|
Total CVR stockholders’
equity |
1,393 |
|
|
1,286 |
|
|
|
|
|
|
|
Selected Cash Flow Data:
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Net cash flow provided by
(used in): |
|
|
|
|
|
|
|
Operating activities |
$ |
94 |
|
|
$ |
102 |
|
|
$ |
747 |
|
|
$ |
628 |
|
Investing activities |
(48 |
) |
|
(34 |
) |
|
(121 |
) |
|
(108 |
) |
Financing activities |
(86 |
) |
|
(102 |
) |
|
(642 |
) |
|
(334 |
) |
Net cash flow |
$ |
(40 |
) |
|
$ |
(34 |
) |
|
$ |
(16 |
) |
|
$ |
186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Segment Data:
(in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
Three Months Ended
December 31, 2019 |
|
|
|
|
|
Net sales |
$ |
1,485 |
|
|
$ |
86 |
|
|
$ |
1,569 |
|
Operating income (loss) |
82 |
|
|
(9 |
) |
|
69 |
|
Net income (loss) |
81 |
|
|
(25 |
) |
|
28 |
|
EBITDA * |
135 |
|
|
11 |
|
|
142 |
|
|
|
|
|
|
|
Capital Expenditures
(1) |
|
|
|
|
|
Maintenance |
$ |
20 |
|
|
$ |
7 |
|
|
$ |
28 |
|
Growth |
3 |
|
|
1 |
|
|
4 |
|
Total capital expenditures |
$ |
23 |
|
|
$ |
9 |
|
|
$ |
33 |
|
|
|
|
|
|
|
Year Ended December
31, 2019 |
|
|
|
|
|
Net sales |
$ |
5,968 |
|
|
$ |
404 |
|
|
$ |
6,364 |
|
Operating income |
574 |
|
|
27 |
|
|
580 |
|
Net income (loss) |
559 |
|
|
(35 |
) |
|
362 |
|
EBITDA * |
788 |
|
|
107 |
|
|
880 |
|
|
|
|
|
|
|
Capital Expenditures
(1) |
|
|
|
|
|
Maintenance |
$ |
79 |
|
|
$ |
18 |
|
|
$ |
102 |
|
Growth |
10 |
|
|
2 |
|
|
12 |
|
Total capital expenditures |
$ |
89 |
|
|
$ |
20 |
|
|
$ |
114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
Three Months Ended
December 31, 2018 |
|
|
|
|
|
Net sales |
$ |
1,641 |
|
|
$ |
98 |
|
|
$ |
1,738 |
|
Operating income |
122 |
|
|
8 |
|
|
124 |
|
Net income (loss) |
115 |
|
|
(1 |
) |
|
95 |
|
EBITDA * |
172 |
|
|
33 |
|
|
202 |
|
|
|
|
|
|
|
Capital Expenditures
(1) |
|
|
|
|
|
Maintenance |
$ |
29 |
|
|
$ |
4 |
|
|
$ |
34 |
|
Growth |
6 |
|
|
— |
|
|
6 |
|
Total capital expenditures |
$ |
35 |
|
|
$ |
4 |
|
|
$ |
40 |
|
|
|
|
|
|
|
Year Ended December
31, 2018 |
|
|
|
|
|
Net sales |
$ |
6,780 |
|
|
$ |
351 |
|
|
$ |
7,124 |
|
Operating income |
544 |
|
|
6 |
|
|
532 |
|
Net income (loss) |
511 |
|
|
(50 |
) |
|
366 |
|
EBITDA * |
748 |
|
|
84 |
|
|
821 |
|
|
|
|
|
|
|
Capital Expenditures
(1) |
|
|
|
|
|
Maintenance |
$ |
70 |
|
|
$ |
16 |
|
|
$ |
89 |
|
Growth |
19 |
|
|
3 |
|
|
22 |
|
Total capital expenditures |
$ |
89 |
|
|
$ |
19 |
|
|
$ |
111 |
|
* See “Non-GAAP Reconciliations” section below.(1) Capital
expenditures are shown exclusive of capitalized turnaround
expenditures.
|
|
|
|
|
|
(in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
December 31,
2019 |
|
|
|
|
|
Cash and cash equivalents |
$ |
583 |
|
|
$ |
37 |
|
|
$ |
652 |
|
Total assets |
3,187 |
|
|
1,138 |
|
|
3,905 |
|
Total debt and finance lease
obligations |
563 |
|
|
632 |
|
|
1,195 |
|
|
|
|
|
|
|
December 31,
2018 |
|
|
|
|
|
Cash and cash equivalents |
$ |
353 |
|
|
$ |
62 |
|
|
$ |
668 |
|
Total assets |
2,453 |
|
|
1,254 |
|
|
4,000 |
|
Total debt and finance lease
obligations |
541 |
|
|
629 |
|
|
1,170 |
|
|
|
|
|
|
|
|
|
|
Petroleum Segment:
Key Operating Metrics per Total Throughput
Barrel
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Refining Margin * |
$ |
12.47 |
|
|
$ |
13.67 |
|
|
$ |
15.26 |
|
|
$ |
15.18 |
|
Refining Margin, excluding
Inventory Valuation Impacts * |
11.86 |
|
|
17.47 |
|
|
14.71 |
|
|
15.60 |
|
Direct Operating Expenses
* |
4.63 |
|
|
4.41 |
|
|
4.56 |
|
|
4.62 |
|
∗ See “Non-GAAP Reconciliations” section below.
Throughput Data by Refinery
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in bpd) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Coffeyville |
|
|
|
|
|
|
|
Regional crude |
63,501 |
|
|
35,855 |
|
|
49,093 |
|
|
31,350 |
|
WTI |
46,784 |
|
|
72,468 |
|
|
67,382 |
|
|
66,952 |
|
WTL |
1,875 |
|
|
— |
|
|
473 |
|
|
— |
|
Midland WTI |
709 |
|
|
18,506 |
|
|
3,888 |
|
|
15,893 |
|
Condensate |
6,534 |
|
|
672 |
|
|
4,331 |
|
|
4,992 |
|
Heavy Canadian |
3,264 |
|
|
7,629 |
|
|
4,711 |
|
|
5,302 |
|
Other feedstocks and blendstocks |
10,798 |
|
|
12,033 |
|
|
9,160 |
|
|
8,369 |
|
Wynnewood |
|
|
|
|
|
|
|
Regional crude |
57,107 |
|
|
51,959 |
|
|
53,848 |
|
|
54,746 |
|
WTI |
— |
|
|
— |
|
|
3 |
|
|
2,354 |
|
WTL |
2,649 |
|
|
— |
|
|
668 |
|
|
— |
|
Midland WTI |
6,808 |
|
|
7,776 |
|
|
10,995 |
|
|
10,332 |
|
Condensate |
8,431 |
|
|
8,808 |
|
|
7,666 |
|
|
7,237 |
|
Heavy Canadian |
— |
|
|
— |
|
|
— |
|
|
— |
|
Other feedstocks and blendstocks |
4,269 |
|
|
5,775 |
|
|
3,753 |
|
|
5,068 |
|
Total
throughput |
212,729 |
|
|
221,481 |
|
|
215,971 |
|
|
212,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Data by Refinery
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in bpd) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Coffeyville |
|
|
|
|
|
|
|
Gasoline |
73,814 |
|
|
78,290 |
|
|
71,817 |
|
|
67,091 |
|
Distillate |
53,222 |
|
|
60,080 |
|
|
57,549 |
|
|
56,307 |
|
Other liquid products |
2,850 |
|
|
4,834 |
|
|
5,810 |
|
|
5,737 |
|
Solids |
3,643 |
|
|
5,682 |
|
|
4,573 |
|
|
5,190 |
|
Wynnewood |
|
|
|
|
|
|
|
Gasoline |
39,429 |
|
|
39,033 |
|
|
38,864 |
|
|
40,291 |
|
Distillate |
33,496 |
|
|
30,568 |
|
|
32,380 |
|
|
33,442 |
|
Other liquid products |
3,697 |
|
|
2,992 |
|
|
3,223 |
|
|
4,025 |
|
Solids |
27 |
|
|
27 |
|
|
30 |
|
|
41 |
|
Total
production |
210,178 |
|
|
221,506 |
|
|
214,246 |
|
|
212,124 |
|
|
|
|
|
|
|
|
|
Liquid volume yield (as % of
total throughput) |
97.1 |
% |
|
97.0 |
% |
|
97.1 |
% |
|
97.3 |
% |
Key Market Indicators
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(dollars per barrel) |
2019 |
|
2018 |
|
2019 |
|
2018 |
West Texas Intermediate (WTI) NYMEX |
$ |
56.87 |
|
|
$ |
59.34 |
|
|
$ |
57.04 |
|
|
$ |
64.90 |
|
Crude Oil Differentials to
WTI: |
|
|
|
|
|
|
|
Brent |
5.55 |
|
|
9.26 |
|
|
7.12 |
|
|
6.79 |
|
WCS (heavy sour) |
(18.98 |
) |
|
(33.86 |
) |
|
(13.72 |
) |
|
(26.35 |
) |
Condensate |
(0.10 |
) |
|
(0.65 |
) |
|
(0.76 |
) |
|
(0.46 |
) |
Midland Cushing |
0.94 |
|
|
(5.96 |
) |
|
(0.69 |
) |
|
(7.20 |
) |
NYMEX Crack Spreads: |
|
|
|
|
|
|
|
Gasoline |
12.14 |
|
|
9.81 |
|
|
15.43 |
|
|
15.69 |
|
Heating Oil |
24.82 |
|
|
27.74 |
|
|
24.43 |
|
|
23.15 |
|
NYMEX 2-1-1 Crack Spread |
18.48 |
|
|
18.78 |
|
|
19.93 |
|
|
19.42 |
|
PADD II Group 3 Product
Basis: |
|
|
|
|
|
|
|
Gasoline |
(1.27 |
) |
|
(0.35 |
) |
|
(1.74 |
) |
|
(1.58 |
) |
Ultra Low Sulfur Diesel |
(2.41 |
) |
|
(0.25 |
) |
|
(1.68 |
) |
|
0.01 |
|
PADD II Group 3 Product Crack
Spread: |
|
|
|
|
|
|
|
Gasoline |
10.88 |
|
|
9.46 |
|
|
13.69 |
|
|
14.11 |
|
Ultra Low Sulfur Diesel |
22.41 |
|
|
27.49 |
|
|
22.75 |
|
|
23.16 |
|
PADD II Group 3 2-1-1 |
16.65 |
|
|
18.48 |
|
|
18.22 |
|
|
18.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2020 Petroleum Segment Outlook
The table below summarizes our outlook for
certain refining statistics and financial information for the first
quarter of 2020. See “Forward-Looking Statements” above.
|
Q1 2020 |
|
Low |
|
High |
Total throughput (bpd) |
155,000 |
|
|
165,000 |
|
Direct operating expenses (1) (in millions) |
$ |
85 |
|
|
$ |
95 |
|
Total capital expenditures (in
millions) |
$ |
45 |
|
|
$ |
55 |
|
Total turnaround expenditures
(in millions) |
$ |
115 |
|
|
$ |
125 |
|
(1) Direct operating expenses are shown
exclusive of depreciation and amortization.
Nitrogen Fertilizer Segment
Ammonia Utilization Rates (2)
|
Two Years Ended December 31, |
(percent of capacity
utilization) |
2019 |
|
2018 |
Consolidated |
93 |
% |
|
95 |
% |
Coffeyville |
94 |
% |
|
95 |
% |
East Dubuque |
91 |
% |
|
95 |
% |
(2) |
Reflects ammonia utilization rates on a consolidated basis and at
each of the Nitrogen Fertilizer facilities. Utilization is an
important measure used by management to assess operational output
at each of the facilities. Utilization is calculated as actual tons
produced divided by capacity. The Nitrogen Fertilizer Segment
presents utilization on a two-year rolling average to take into
account the impact of current turnaround cycles on any
specific period. The two-year rolling average is a more useful
presentation of the long-term utilization performance of our
plants. 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 the Nitrogen Fertilizer Segments’ efforts
being primarily focused on ammonia upgrade capabilities, this
measure provides a meaningful view of how well the facilities
operate. |
|
|
Sales and Production Data
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Consolidated sales (thousand
tons): |
|
|
|
|
|
|
|
Ammonia |
62 |
|
|
46 |
|
|
241 |
|
|
202 |
|
UAN |
293 |
|
|
364 |
|
|
1,261 |
|
|
1,289 |
|
|
|
|
|
|
|
|
|
Consolidated product pricing
at gate (dollars per ton) (1): |
|
|
|
|
|
|
|
Ammonia |
$ |
324 |
|
|
$ |
324 |
|
|
$ |
392 |
|
|
$ |
328 |
|
UAN |
$ |
176 |
|
|
$ |
180 |
|
|
$ |
199 |
|
|
$ |
173 |
|
|
|
|
|
|
|
|
|
Consolidated production volume
(thousand tons): |
|
|
|
|
|
|
|
Ammonia (gross produced) (2) |
180 |
|
|
209 |
|
|
766 |
|
|
794 |
|
Ammonia (net available for sale) (2) |
55 |
|
|
59 |
|
|
223 |
|
|
246 |
|
UAN |
286 |
|
|
357 |
|
|
1,255 |
|
|
1,276 |
|
|
|
|
|
|
|
|
|
Feedstock: |
|
|
|
|
|
|
|
Petroleum coke used in production (thousand tons) |
131 |
|
|
139 |
|
|
535 |
|
|
463 |
|
Petroleum coke used in production (dollars per ton) |
$ |
39.90 |
|
|
$ |
41.34 |
|
|
$ |
37.47 |
|
|
$ |
28.41 |
|
Natural gas used in production (thousands of MMBtus) (3) |
1,646 |
|
|
2,000 |
|
|
6,856 |
|
|
7,933 |
|
Natural gas used in production (dollars per MMBtu) (3) |
$ |
2.87 |
|
|
$ |
4.06 |
|
|
$ |
2.88 |
|
|
$ |
3.28 |
|
Natural gas in cost of materials and other (thousands of MMBtus)
(3) |
1,474 |
|
|
1,854 |
|
|
6,961 |
|
|
7,122 |
|
Natural gas in cost of materials and other (dollars per MMBtu)
(3) |
$ |
2.58 |
|
|
$ |
3.50 |
|
|
$ |
3.08 |
|
|
$ |
3.15 |
|
(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 EndedDecember 31, |
|
Year EndedDecember 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Ammonia — Southern plains (dollars per ton) |
$ |
288 |
|
|
$ |
423 |
|
|
$ |
348 |
|
|
$ |
370 |
|
Ammonia — Corn belt (dollars
per ton) |
385 |
|
|
479 |
|
|
435 |
|
|
424 |
|
UAN — Corn belt (dollars per
ton) |
189 |
|
|
255 |
|
|
210 |
|
|
219 |
|
|
|
|
|
|
|
|
|
Natural gas NYMEX (dollars per
MMBtu) |
$ |
2.40 |
|
|
$ |
3.75 |
|
|
$ |
2.54 |
|
|
$ |
3.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2020 Nitrogen Fertilizer Segment
Outlook
The table below summarizes our outlook for
certain operational statistics and financial information for the
first quarter of 2020. See “Forward-Looking Statements” above.
|
Q1 2020 |
|
Low |
|
High |
Ammonia utilization rates (1) |
|
|
|
Consolidated |
95 |
% |
|
100 |
% |
Coffeyville |
95 |
% |
|
100 |
% |
East Dubuque |
95 |
% |
|
100 |
% |
|
|
|
|
Direct operating expenses (2) (in millions) |
$ |
35 |
|
|
$ |
40 |
|
|
|
|
|
Total capital expenditures (in millions) |
$ |
4 |
|
|
$ |
7 |
|
(1) |
Ammonia utilization rates exclude the impact of Turnarounds. |
(2) |
Direct operating expenses are shown exclusive of depreciation and
amortization, turnaround expenses, and impacts of inventory
adjustments. |
|
|
Non-GAAP Reconciliations
Reconciliation of Consolidated Net Income to
EBITDA
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Net income |
$ |
28 |
|
|
$ |
95 |
|
|
$ |
362 |
|
|
$ |
366 |
|
Add: |
|
|
|
|
|
|
|
Interest expense, net |
24 |
|
|
22 |
|
|
102 |
|
|
102 |
|
Income tax expense |
19 |
|
|
14 |
|
|
129 |
|
|
79 |
|
Depreciation and amortization |
71 |
|
|
71 |
|
|
287 |
|
|
274 |
|
EBITDA |
142 |
|
|
202 |
|
|
880 |
|
|
821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Petroleum Segment Net Income to
EBITDA
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Net income (loss) |
$ |
81 |
|
|
$ |
115 |
|
|
$ |
559 |
|
|
$ |
511 |
|
Add: |
|
|
|
|
|
|
|
Interest expense, net |
4 |
|
|
9 |
|
|
27 |
|
|
41 |
|
Depreciation and amortization |
50 |
|
|
48 |
|
|
202 |
|
|
196 |
|
Petroleum EBITDA |
135 |
|
|
172 |
|
|
788 |
|
|
748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Petroleum Segment
Gross Profit to Refining Margin and Refining Margin Adjusted for
Inventory Valuation Impact
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Net sales |
$ |
1,485 |
|
|
$ |
1,641 |
|
|
$ |
5,968 |
|
|
$ |
6,780 |
|
Cost of materials and
other |
1,241 |
|
|
1,362 |
|
|
4,765 |
|
|
5,602 |
|
Direct operating expenses
(exclusive of depreciation and amortization and turnaround expenses
as reflected below) |
91 |
|
|
90 |
|
|
359 |
|
|
356 |
|
Depreciation and
amortization |
48 |
|
|
47 |
|
|
199 |
|
|
192 |
|
Gross profit |
105 |
|
|
142 |
|
|
645 |
|
|
630 |
|
Add: |
|
|
|
|
|
|
|
Direct operating expenses
(exclusive of depreciation and amortization and turnaround expenses
as reflected below) |
91 |
|
|
90 |
|
|
359 |
|
|
356 |
|
Depreciation and
amortization |
48 |
|
|
47 |
|
|
199 |
|
|
192 |
|
Refining margin |
244 |
|
|
279 |
|
|
1,203 |
|
|
1,178 |
|
Inventory valuation impact,
(favorable) unfavorable (1) |
(12 |
) |
|
77 |
|
|
(43 |
) |
|
33 |
|
Refining margin, excluding inventory valuation impacts |
$ |
232 |
|
|
$ |
356 |
|
|
$ |
1,160 |
|
|
$ |
1,211 |
|
(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 EndedDecember 31, |
|
Year EndedDecember 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Total throughput barrels per day |
212,729 |
|
|
221,481 |
|
|
215,971 |
|
|
212,595 |
|
Days in the period |
92 |
|
|
92 |
|
|
365 |
|
|
365 |
|
Total throughput barrels |
19,571,068 |
|
|
20,376,252 |
|
|
78,829,441 |
|
|
77,597,175 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Petroleum Segment
Refining Margin per Total Throughput Barrel
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions, except per total
throughput barrel) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Refining margin |
$ |
244 |
|
|
$ |
279 |
|
|
$ |
1,203 |
|
|
$ |
1,178 |
|
Divided by: total throughput
barrels |
20 |
|
|
20 |
|
|
79 |
|
|
78 |
|
Refining margin per total throughput barrel |
$ |
12.47 |
|
|
$ |
13.67 |
|
|
$ |
15.26 |
|
|
$ |
15.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Petroleum Segment
Refining Margin Adjusted for Inventory Valuation Impact per Total
Throughput Barrel
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions, except per total
throughput barrel) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Refining margin, excluding inventory valuation impacts |
$ |
232 |
|
|
$ |
356 |
|
|
$ |
1,160 |
|
|
$ |
1,211 |
|
Divided by: total throughput
barrels |
20 |
|
|
20 |
|
|
79 |
|
|
78 |
|
Refining margin, excluding inventory valuation impacts, per total
throughput barrel |
$ |
11.86 |
|
|
$ |
17.47 |
|
|
$ |
14.71 |
|
|
$ |
15.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Petroleum Segment
Direct Operating Expenses per Total Throughput Barrel
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions, except per total
throughput barrel) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Direct operating expenses (exclusive of depreciation and
amortization) |
$ |
91 |
|
|
$ |
90 |
|
|
$ |
359 |
|
|
$ |
356 |
|
Divided by: total throughput
barrels |
20 |
|
|
20 |
|
|
79 |
|
|
78 |
|
Direct operating expense per total throughput barrel |
$ |
4.63 |
|
|
$ |
4.41 |
|
|
$ |
4.56 |
|
|
$ |
4.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Nitrogen Fertilizer Segment Net Loss
to EBITDA
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Nitrogen fertilizer net loss |
$ |
(25 |
) |
|
$ |
(1 |
) |
|
$ |
(35 |
) |
|
$ |
(50 |
) |
Add: |
|
|
|
|
|
|
|
Interest expense, net |
16 |
|
|
15 |
|
|
62 |
|
|
62 |
|
Depreciation and amortization |
20 |
|
|
19 |
|
|
80 |
|
|
72 |
|
Nitrogen fertilizer
EBITDA |
$ |
11 |
|
|
$ |
33 |
|
|
$ |
107 |
|
|
$ |
84 |
|
CVR Energy (NYSE:CVI)
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