CVR Energy, Inc. (“CVR Energy” or the “Company”) (NYSE: CVI) today
announced net income of $93 million, or 92 cents per diluted share,
on net sales of $2.7 billion for the third quarter of 2022,
compared to net income of $84 million, or 83 cents per diluted
share, on net sales of $1.9 billion for the third quarter of 2021.
Adjusted earnings for the third quarter of 2022 was $1.90 per
diluted share compared to an adjusted loss of 24 cents per diluted
share in the third quarter of 2021, primarily driven by improved
crack spreads. Third quarter 2022 EBITDA was $181 million, compared
to third quarter 2021 EBITDA of $243 million. On an adjusted basis,
Adjusted EBITDA for the third quarter of 2022 was $313 million, up
from $99 million in the third quarter of 2021.
“CVR Energy’s industry-leading distillate yield
drove our strong results for the quarter and enabled us to continue
our commitment of returning value to our stockholders, many of whom
have remained loyal to CVR Energy during more difficult times in
our industry. In addition to our regular third quarter 2022
dividend of 40 cents, our Board of Directors was pleased to approve
a special dividend of $1.00 per share, bringing our year-to-date
declared dividends to $4.80 per share,” said Dave Lamp, CVR
Energy’s Chief Executive Officer.
“Our results would have been even higher, but
were negatively affected by crude oil backwardation and high
Renewable Identification Number costs due to EPA’s continued
mismanagement of the Renewable Fuel Standard program,” Lamp
continued. “However, we continue to progress our renewable
initiatives, and the corporate transformation to segregate our
renewables business we previously disclosed remains on track to
close in the first quarter of 2023.”
Petroleum
The Petroleum Segment reported third quarter
2022 operating income of $137 million on net sales of $2.5 billion,
compared to operating income of $135 million on net sales of $1.7
billion in the third quarter of 2021.
Refining margin per total throughput barrel was
$16.56 in the third quarter of 2022, compared to $15.03 during the
same period in 2021. The increase in refining margin of $15 million
was primarily due to an increase in product crack spreads. The
Group 3 2-1-1 crack spread increased by $23.79 per barrel relative
to the third quarter of 2021, 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 $98 million, or
$5.28 per throughput barrel, which excludes the RINs revaluation
expense impact of $38 million, or $2.06 per total throughput
barrel, for the third quarter of 2022. This is compared to RFS
compliance costs of $100 million, or $5.14 per throughput
barrel, which excludes the RINs revaluation benefit impact of $115
million, or $5.94 per total throughput barrel, for the third
quarter of 2021. The decrease in RFS compliance costs in 2022 was
primarily related to a lower renewable volume obligation (“RVO”)
for the third quarter of 2022 compared to the 2021 period. The
increase in RINs revaluation in 2022 was a result of increased RIN
prices for the current period and increased commercial
activity.
The Petroleum Segment also recognized a third
quarter 2022 derivative net gain of $13 million, or 71 cents
per total throughput barrel, compared to a derivative net loss of
$12 million, or 62 cents per total throughput barrel, for the third
quarter of 2021. Included in this derivative net gain for the third
quarter of 2022 was a $25 million unrealized gain due to Group 3
diesel crack swaps, compared to a $22 million unrealized gain for
the third quarter of 2021. Offsetting these impacts, crude oil
prices decreased during the quarter, which led to an unfavorable
inventory valuation impact of $107 million, or $5.78 per total
throughput barrel, compared to a favorable inventory valuation
impact of $8 million, or 41 cents per total throughput barrel,
during the third quarter of 2021. Further, for the third quarter of
2022, throughput volumes declined by 9,286 barrels per day (“bpd”)
due to minor plant outages during the period.
Third quarter 2022 combined total throughput was
approximately 202,000 bpd, compared to approximately 211,000 bpd of
combined total throughput for the third quarter of 2021. This
decrease was due to minor plant outages during the period.
Nitrogen Fertilizer
The Nitrogen Fertilizer Segment reported an
operating loss of $12 million on net sales of $156 million for the
third quarter of 2022, compared to operating income of $46 million
on net sales of $145 million for the third quarter of 2021.
Third quarter 2022 average realized gate prices
for urea ammonia nitrate (“UAN”) showed an improvement over the
prior year, up 42 percent to $433 per ton, and ammonia was up 65
percent over the prior year to $837 per ton. Average realized
gate prices for UAN and ammonia were $305 and $507 per ton,
respectively, for the third quarter of 2021.
CVR Partners, LP’s (“CVR Partners”) fertilizer
facilities produced a combined 114,000 tons of ammonia during the
third quarter of 2022, of which 36,000 net tons were available for
sale while the rest was upgraded to other fertilizer products,
including 184,000 tons of UAN. During the third quarter 2021, the
fertilizer facilities produced 205,000 tons of ammonia, of which
65,000 net tons were available for sale while the remainder was
upgraded to other fertilizer products, including 314,000 tons of
UAN. These decreases were due to the planned turnarounds at both
fertilizer facilities during the third quarter of 2022.
Corporate and Other
The Company reported an income tax expense of $7
million, or 8.3 percent of income before income taxes, for the
three months ended September 30, 2022, as compared to an income tax
expense of $47 million, or 30.8 percent of income before income
taxes, for the three months ended September 30, 2021. The
fluctuations in both income tax expense and effective income tax
rate were due primarily to changes in pretax earnings and earnings
attributable to noncontrolling interest.
The renewable diesel unit at the Wynnewood
refinery continued to increase production, with total vegetable oil
throughputs for the third quarter of 2022 of approximately 17.7
million gallons, up from 12.0 million gallons in the second quarter
of 2022.
Cash, Debt and Dividend
Consolidated cash and cash equivalents were $618
million at September 30, 2022, an increase of $108 million from
December 31, 2021. Consolidated total debt and finance lease
obligations were $1.6 billion at September 30, 2022, including $547
million held by the Nitrogen Fertilizer Segment.
CVR Energy announced a third quarter 2022 cash
dividend of 40 cents per share. In addition, the Company announced
a special dividend of $1.00 per share. The quarterly and special
dividends, as declared by CVR Energy’s Board of Directors, will be
paid on November 21, 2022, to stockholders of record as of
November 14, 2022.
Today, CVR Partners announced that the Board of
Directors of its general partner declared a third quarter 2022 cash
distribution of $1.77 per common unit, which will be paid on
November 21, 2022, to common unitholders of record as of
November 14, 2022.
Third Quarter
2022 Earnings Conference Call
CVR Energy previously announced that it will
host its third quarter 2022 Earnings Conference Call on Tuesday,
November 1, 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 third quarter 2022 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/bbxgdpdi. A repeat of the call
also can be accessed for 14 days by dialing (877) 660-6853,
conference ID 13733765.
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: distillate
crack spreads; distillate yield, including our performance against
the industry; return of value to stockholders including our
commitment thereto; RIN costs; crude oil backwardation;
nitrogen-based fertilizer production; regular and special dividends
and distributions, including the timing, payment and amount (if
any) thereof; operating income; net sales; refining margin; product
crack spreads; inventory and supply, including the impact of the
Russia-Ukraine conflict thereon; cost to comply with the Renewable
Fuel Standard, RIN prices and RVO; levels of commercial activity;
derivative activities and gains or losses associated therewith;
crude oil pricing, including the inventory valuation impact
thereof; impacts of the conversion of the Wynnewood hydrocracker to
renewable diesel service on throughput volume; renewables
initiatives; conversion of hydrocrackers at Wynnewood and
Coffeyville and/or feed pre-treaters, including the completion,
operation, capacities, timing, costs, optionality and benefits
thereof; our ability to progress or complete our renewables
initiatives including the corporate transformation to segregate our
renewables business and the cost, scope and timing thereof;
decarbonization initiatives; turnaround and plant outages,
including the timing and impacts thereof on results; throughput
volumes and impacts thereon; refined product demand; UAN, ammonia
and fertilizer demand, pricing and sales volumes; ammonia
production and upgrades to other fertilizer products; utilization
rates; crop and industry conditions; tax rates and expense;
production rates of our renewable diesel unit; vegetable oil
throughputs; cash levels, use of cash and reserves; debt and
finance lease obligations; total throughput, direct operating
expenses, capital expenditures, depreciation and amortization and
turnaround expense; EBITDA; continued safe and reliable operations;
45Q credits (if any) including the amount, timing and receipt
thereof; natural gas and global energy costs; exports; 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
health and economic effects of the COVID-19 pandemic and any
variant thereof, 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;
general economic and business conditions, including increasing
interest rates and inflation or a potential recession; political
disturbances, geopolitical instability and tensions, and associated
changes in global trade policies and economic sanctions, including,
but not limited to, in connection with the Russia-Ukraine conflict;
and other risks.
About CVR Energy,
Inc.Headquartered in Sugar Land, Texas, CVR Energy, Inc.
is a diversified holding company primarily engaged in the renewable
fuels, petroleum refining and marketing business as well as in the
nitrogen fertilizer manufacturing business through its interest in
CVR Partners, LP. 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 September 30, 2022:
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.
Factors Affecting Comparability of Our
Financial Results
Our historical results of operations for the
periods presented may not be comparable with prior periods or to
our results of operations in the future for the reasons discussed
below.
Petroleum Segment
Coffeyville Refinery - During the three and nine
months ended September 30, 2022, we capitalized $4 million and
$5 million, respectively, related to the pre-planning phase of
a major planned turnaround that is currently expected to commence
in the spring of 2023.
Wynnewood Refinery - The Petroleum Segment’s
Wynnewood Refinery’s major planned turnaround began in late
February 2022 and was completed in early April 2022. The
pre-planning phase began during the first quarter of 2021. We did
not capitalize turnaround expenditures for the three months ended
September 30, 2022 and capitalized turnaround expenditures of
$68 million for nine months ended September 30, 2022. During
the three and nine months ended September 30, 2021, we capitalized
$1 million and $2 million, respectively, related to the
pre-planning activities.
Nitrogen Fertilizer Segment
Major Scheduled Turnaround
Activities
Coffeyville Fertilizer Facility - A planned
turnaround at the Coffeyville Fertilizer Facility commenced in July
2022 and was completed in mid-August 2022. For the three and nine
months ended September 30, 2022, we incurred turnaround expense of
$12 million for both periods related to this turnaround. For
the three and nine months ended September 30, 2021, we incurred
turnaround expense of less than $1 million for both periods
related to planning for the Coffeyville Fertilizer Facility’s 2022
turnaround.
East Dubuque Fertilizer Facility - A planned
turnaround at the East Dubuque Fertilizer Facility commenced in
August 2022 and was completed in mid-September 2022. For the three
and nine months ended September 30, 2022, we incurred turnaround
expense of approximately $20 million and $21 million,
respectively, related to this turnaround. For the three and nine
months ended September 30, 2021, we incurred turnaround expense of
less than $1 million for both periods related to planning for
the East Dubuque Fertilizer Facility’s 2022 turnaround.
CVR Energy, Inc. (all
information in this release is unaudited)
Consolidated Statement of Operations Data
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in millions, except per share data) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net sales |
$ |
2,699 |
|
|
$ |
1,883 |
|
|
$ |
8,216 |
|
|
$ |
5,129 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
Cost of materials and other |
|
2,267 |
|
|
|
1,473 |
|
|
|
6,619 |
|
|
|
4,381 |
|
Direct operating expenses (exclusive of depreciation and
amortization) |
|
218 |
|
|
|
137 |
|
|
|
545 |
|
|
|
409 |
|
Depreciation and amortization |
|
74 |
|
|
|
65 |
|
|
|
210 |
|
|
|
199 |
|
Cost of sales |
|
2,559 |
|
|
|
1,675 |
|
|
|
7,374 |
|
|
|
4,989 |
|
Selling, general and
administrative expenses (exclusive of depreciation and
amortization) |
|
35 |
|
|
|
30 |
|
|
|
110 |
|
|
|
85 |
|
Depreciation and
amortization |
|
1 |
|
|
|
2 |
|
|
|
5 |
|
|
|
6 |
|
Loss on asset disposal |
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
3 |
|
Operating income |
|
103 |
|
|
|
175 |
|
|
|
726 |
|
|
|
46 |
|
Other (expense) income: |
|
|
|
|
|
|
|
Interest expense, net |
|
(19 |
) |
|
|
(23 |
) |
|
|
(67 |
) |
|
|
(92 |
) |
Investment (loss) income on marketable securities |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
82 |
|
Other income (expense), net |
|
3 |
|
|
|
2 |
|
|
|
(81 |
) |
|
|
12 |
|
Income before income tax expense |
|
87 |
|
|
|
153 |
|
|
|
578 |
|
|
|
48 |
|
Income tax expense
(benefit) |
|
7 |
|
|
|
47 |
|
|
|
106 |
|
|
|
(1 |
) |
Net income |
|
80 |
|
|
|
106 |
|
|
|
472 |
|
|
|
49 |
|
Less: Net (loss) income
attributable to noncontrolling interest |
|
(13 |
) |
|
|
22 |
|
|
|
121 |
|
|
|
10 |
|
Net income attributable to CVR Energy
stockholders |
$ |
93 |
|
|
$ |
84 |
|
|
$ |
351 |
|
|
$ |
39 |
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share |
$ |
0.92 |
|
|
$ |
0.83 |
|
|
$ |
3.49 |
|
|
$ |
0.38 |
|
Dividends declared per share |
$ |
3.00 |
|
|
$ |
— |
|
|
$ |
3.40 |
|
|
$ |
4.89 |
|
|
|
|
|
|
|
|
|
Adjusted earnings (loss) per
share |
$ |
1.90 |
|
|
$ |
(0.24 |
) |
|
$ |
4.37 |
|
|
$ |
(0.75 |
) |
EBITDA* |
$ |
181 |
|
|
$ |
243 |
|
|
$ |
860 |
|
|
$ |
345 |
|
Adjusted EBITDA * |
$ |
313 |
|
|
$ |
99 |
|
|
$ |
979 |
|
|
$ |
192 |
|
|
|
|
|
|
|
|
|
Weighted-average common shares
outstanding - basic and diluted |
|
100.5 |
|
|
|
100.5 |
|
|
|
100.5 |
|
|
|
100.5 |
|
____________________ |
* |
See “Non-GAAP Reconciliations” section below. |
Selected Balance Sheet Data
(in millions) |
September 30, 2022 |
|
December 31, 2021 |
Cash and cash equivalents |
$ |
618 |
|
|
$ |
510 |
|
Working capital |
|
127 |
|
|
|
213 |
|
Total assets |
|
4,206 |
|
|
|
3,906 |
|
Total debt and finance lease obligations, including current
portion |
|
1,593 |
|
|
|
1,660 |
|
Total liabilities |
|
3,435 |
|
|
|
3,136 |
|
Total CVR stockholders’ equity |
|
560 |
|
|
|
553 |
|
Selected Cash Flow Data
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in millions) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net cash (used in) provided
by: |
|
|
|
|
|
|
|
Operating activities |
$ |
156 |
|
|
$ |
139 |
|
|
$ |
868 |
|
|
$ |
382 |
|
Investing activities |
|
(61 |
) |
|
|
(63 |
) |
|
|
(217 |
) |
|
|
(204 |
) |
Financing activities |
|
(370 |
) |
|
|
(29 |
) |
|
|
(543 |
) |
|
|
(279 |
) |
Net (decrease) increase in cash and cash equivalents and
restricted cash |
$ |
(275 |
) |
|
$ |
47 |
|
|
$ |
108 |
|
|
$ |
(101 |
) |
|
|
|
|
|
|
|
|
Free cash flow* |
$ |
93 |
|
|
$ |
76 |
|
|
$ |
649 |
|
|
$ |
191 |
|
____________________ |
* |
See “Non-GAAP Reconciliations” section below. |
Selected Segment Data
|
Three Months Ended September 30, 2022 |
|
Nine Months Ended September 30, 2022 |
(in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
|
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
Net sales |
$ |
2,474 |
|
|
$ |
156 |
|
|
$ |
2,699 |
|
|
$ |
7,497 |
|
|
$ |
623 |
|
|
$ |
8,216 |
|
Operating income |
|
137 |
|
|
|
(12 |
) |
|
|
103 |
|
|
|
564 |
|
|
|
218 |
|
|
|
726 |
|
Net income |
|
152 |
|
|
|
(20 |
) |
|
|
80 |
|
|
|
584 |
|
|
|
191 |
|
|
|
472 |
|
EBITDA* |
|
186 |
|
|
|
10 |
|
|
|
181 |
|
|
|
700 |
|
|
|
281 |
|
|
|
860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures (1) |
|
|
|
|
|
|
|
|
|
|
|
Maintenance capital expenditures |
$ |
22 |
|
|
$ |
25 |
|
|
$ |
52 |
|
|
$ |
59 |
|
|
$ |
38 |
|
|
$ |
103 |
|
Growth capital expenditures |
|
1 |
|
|
|
— |
|
|
|
16 |
|
|
|
2 |
|
|
|
1 |
|
|
|
56 |
|
Total capital expenditures |
$ |
23 |
|
|
$ |
25 |
|
|
$ |
68 |
|
|
$ |
61 |
|
|
$ |
39 |
|
|
$ |
159 |
|
|
Three Months Ended September 30, 2021 |
|
Nine Months Ended September 30, 2021 |
(in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
|
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
Net sales |
$ |
1,742 |
|
|
$ |
145 |
|
|
$ |
1,883 |
|
|
$ |
4,793 |
|
|
$ |
344 |
|
|
$ |
5,129 |
|
Operating income |
|
135 |
|
|
|
46 |
|
|
|
175 |
|
|
|
(1 |
) |
|
|
63 |
|
|
|
46 |
|
Net income |
|
146 |
|
|
|
35 |
|
|
|
106 |
|
|
|
23 |
|
|
|
17 |
|
|
|
49 |
|
EBITDA* |
|
188 |
|
|
|
64 |
|
|
|
243 |
|
|
|
159 |
|
|
|
120 |
|
|
|
345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures (1) |
|
|
|
|
|
|
|
|
|
|
|
Maintenance capital expenditures |
$ |
12 |
|
|
$ |
3 |
|
|
$ |
15 |
|
|
$ |
30 |
|
|
$ |
8 |
|
|
$ |
39 |
|
Growth capital expenditures |
|
— |
|
|
|
4 |
|
|
|
23 |
|
|
|
1 |
|
|
|
6 |
|
|
|
150 |
|
Total capital expenditures |
$ |
12 |
|
|
$ |
7 |
|
|
$ |
38 |
|
|
$ |
31 |
|
|
$ |
14 |
|
|
$ |
189 |
|
____________________ |
* |
See “Non-GAAP Reconciliations” section below. |
(1) |
Capital expenditures are shown exclusive of capitalized turnaround
expenditures and business combinations. |
Selected Balance Sheet Data
|
September 30, 2022 |
|
December 31, 2021 |
(in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
|
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
Cash and cash equivalents (1) |
$ |
426 |
|
|
$ |
119 |
|
|
$ |
618 |
|
|
$ |
305 |
|
|
$ |
113 |
|
|
$ |
510 |
|
Total assets |
|
4,247 |
|
|
|
1,083 |
|
|
|
4,206 |
|
|
|
3,368 |
|
|
|
1,127 |
|
|
|
3,906 |
|
Total debt and finance lease
obligations, including current portion (2) |
|
50 |
|
|
|
547 |
|
|
|
1,593 |
|
|
|
54 |
|
|
|
611 |
|
|
|
1,660 |
|
____________________ |
(1) |
Corporate cash and cash equivalents consisted of $73 million and
$92 million at September 30, 2022 and December 31, 2021,
respectively. |
(2) |
Corporate total debt and finance lease obligations, including
current portion consisted of $996 million and $995 million at
September 30, 2022 and December 31, 2021, respectively. |
Petroleum Segment
Key Operating Metrics per Total Throughput
Barrel
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in millions) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Refining margin * |
$ |
16.56 |
|
|
$ |
15.03 |
|
|
$ |
19.82 |
|
|
$ |
8.51 |
|
Refining margin adjusted for
inventory valuation impacts * |
|
22.34 |
|
|
|
14.62 |
|
|
|
18.66 |
|
|
|
6.55 |
|
Direct operating expenses
* |
|
5.53 |
|
|
|
4.52 |
|
|
|
5.74 |
|
|
|
4.83 |
|
____________________ |
* |
See “Non-GAAP Reconciliations” section below. |
Throughput Data by Refinery
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in bpd) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Coffeyville |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regional crude |
|
60,762 |
|
|
|
28,492 |
|
|
|
55,675 |
|
|
|
28,281 |
|
WTI |
|
30,261 |
|
|
|
63,779 |
|
|
|
37,465 |
|
|
|
62,388 |
|
WTL |
|
312 |
|
|
|
1,547 |
|
|
|
544 |
|
|
|
522 |
|
WTS |
|
1,222 |
|
|
|
— |
|
|
|
412 |
|
|
|
— |
|
Midland WTI |
|
— |
|
|
|
1,633 |
|
|
|
858 |
|
|
|
550 |
|
Condensate |
|
10,674 |
|
|
|
5,532 |
|
|
|
10,871 |
|
|
|
8,659 |
|
Heavy Canadian |
|
7,372 |
|
|
|
4,851 |
|
|
|
6,869 |
|
|
|
2,869 |
|
DJ Basin |
|
13,526 |
|
|
|
17,274 |
|
|
|
14,092 |
|
|
|
15,845 |
|
Other feedstocks and blendstocks |
|
8,846 |
|
|
|
10,656 |
|
|
|
9,811 |
|
|
|
9,796 |
|
Wynnewood |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regional crude |
|
45,840 |
|
|
|
62,091 |
|
|
|
45,553 |
|
|
|
59,321 |
|
WTL |
|
4,915 |
|
|
|
2,809 |
|
|
|
2,323 |
|
|
|
4,586 |
|
Midland WTI |
|
— |
|
|
|
4,312 |
|
|
|
539 |
|
|
|
1,453 |
|
WTS |
|
— |
|
|
|
— |
|
|
|
191 |
|
|
|
— |
|
Condensate |
|
15,313 |
|
|
|
4,736 |
|
|
|
12,121 |
|
|
|
7,260 |
|
Other feedstocks and blendstocks |
|
2,614 |
|
|
|
3,231 |
|
|
|
2,774 |
|
|
|
3,115 |
|
Total throughput |
|
201,657 |
|
|
|
210,943 |
|
|
|
200,098 |
|
|
|
204,645 |
|
Production Data by Refinery
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in bpd) |
2022 |
|
2021 |
|
2022 |
|
2021 |
Coffeyville |
|
|
|
|
|
|
|
Gasoline |
67,048 |
|
|
|
70,729 |
|
|
|
71,005 |
|
|
|
68,310 |
|
|
Distillate |
56,848 |
|
|
|
53,946 |
|
|
|
56,768 |
|
|
|
52,231 |
|
|
Other liquid products |
4,832 |
|
|
|
4,971 |
|
|
|
5,183 |
|
|
|
4,947 |
|
|
Solids |
4,741 |
|
|
|
4,355 |
|
|
|
4,482 |
|
|
|
4,138 |
|
|
Wynnewood |
|
|
|
|
|
|
|
Gasoline |
36,423 |
|
|
|
39,647 |
|
|
|
33,040 |
|
|
|
39,319 |
|
|
Distillate |
24,605 |
|
|
|
32,410 |
|
|
|
23,154 |
|
|
|
31,026 |
|
|
Other liquid products |
6,264 |
|
|
|
2,524 |
|
|
|
5,436 |
|
|
|
2,826 |
|
|
Solids |
8 |
|
|
|
16 |
|
|
|
12 |
|
|
|
19 |
|
|
Total production |
200,769 |
|
|
|
208,598 |
|
|
|
199,080 |
|
|
|
202,816 |
|
|
|
|
|
|
|
|
|
|
Light product yield (as % of
crude throughput) (1) |
97.2 |
|
% |
|
99.8 |
|
% |
|
98.1 |
|
% |
|
99.6 |
|
% |
Liquid volume yield (as % of
total throughput) (2) |
97.2 |
|
% |
|
96.8 |
|
% |
|
97.2 |
|
% |
|
97.1 |
|
% |
Distillate yield (as % of
crude throughput) (3) |
42.8 |
|
% |
|
43.8 |
|
% |
|
42.6 |
|
% |
|
43.4 |
|
% |
____________________ |
(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 EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
West Texas Intermediate (WTI)
NYMEX |
$ |
91.43 |
|
|
$ |
70.52 |
|
|
$ |
98.35 |
|
|
$ |
65.04 |
|
Crude Oil Differentials to
WTI: |
|
|
|
|
|
|
|
Brent |
|
6.27 |
|
|
|
2.71 |
|
|
|
4.14 |
|
|
|
2.92 |
|
WCS (heavy sour) |
|
(20.50 |
) |
|
|
(12.86 |
) |
|
|
(16.25 |
) |
|
|
(12.52 |
) |
Condensate |
|
0.03 |
|
|
|
(0.54 |
) |
|
|
(0.16 |
) |
|
|
(0.50 |
) |
Midland Cushing |
|
1.98 |
|
|
|
0.22 |
|
|
|
1.52 |
|
|
|
0.44 |
|
NYMEX Crack Spreads: |
|
|
|
|
|
|
|
Gasoline |
|
30.07 |
|
|
|
22.74 |
|
|
|
33.31 |
|
|
|
20.64 |
|
Heating Oil |
|
57.56 |
|
|
|
19.05 |
|
|
|
51.00 |
|
|
|
17.45 |
|
NYMEX 2-1-1 Crack Spread |
|
43.82 |
|
|
|
20.89 |
|
|
|
42.16 |
|
|
|
19.05 |
|
PADD II Group 3 Product
Basis: |
|
|
|
|
|
|
|
Gasoline |
|
(2.75 |
) |
|
|
(1.83 |
) |
|
|
(6.49 |
) |
|
|
(1.93 |
) |
Ultra-Low Sulfur Diesel |
|
3.01 |
|
|
|
0.34 |
|
|
|
(1.06 |
) |
|
|
0.98 |
|
PADD II Group 3 Product Crack
Spread: |
|
|
|
|
|
|
|
Gasoline |
|
27.32 |
|
|
|
20.90 |
|
|
|
26.82 |
|
|
|
18.72 |
|
Ultra-Low Sulfur Diesel |
|
60.57 |
|
|
|
19.39 |
|
|
|
49.95 |
|
|
|
18.43 |
|
PADD II Group 3 2-1-1 |
|
43.94 |
|
|
|
20.15 |
|
|
|
38.38 |
|
|
|
18.58 |
|
Nitrogen Fertilizer Segment:
Ammonia Utilization Rates
(1)
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(percent of capacity
utilization) |
2022 |
|
2021 |
|
2022 |
|
2021 |
Consolidated |
52 |
|
% |
|
94 |
|
% |
|
76 |
|
% |
|
93 |
|
% |
____________________ |
(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 the Partnership’s facilities.
Utilization is calculated as actual tons produced divided by
capacity. We present our utilization for the three and nine months
ended September 30, 2022 and 2021 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 EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Consolidated sales (thousand
tons): |
|
|
|
|
|
|
|
Ammonia |
|
27 |
|
|
|
52 |
|
|
|
118 |
|
|
|
164 |
|
UAN |
|
275 |
|
|
|
322 |
|
|
|
884 |
|
|
|
931 |
|
|
|
|
|
|
|
|
|
Consolidated product pricing
at gate (dollars per ton):(1) |
|
|
|
|
|
|
|
Ammonia |
$ |
837 |
|
|
$ |
507 |
|
|
$ |
1,062 |
|
|
$ |
416 |
|
UAN |
|
433 |
|
|
|
305 |
|
|
|
496 |
|
|
|
240 |
|
|
|
|
|
|
|
|
|
Consolidated production volume
(thousand tons): |
|
|
|
|
|
|
|
Ammonia (gross produced) (2) |
|
114 |
|
|
|
205 |
|
|
|
494 |
|
|
|
610 |
|
Ammonia (net available for sale) (2) |
|
36 |
|
|
|
65 |
|
|
|
137 |
|
|
|
205 |
|
UAN |
|
184 |
|
|
|
314 |
|
|
|
832 |
|
|
|
920 |
|
|
|
|
|
|
|
|
|
Feedstock: |
|
|
|
|
|
|
|
Petroleum coke used in production (thousand tons) |
|
74 |
|
|
|
129 |
|
|
|
298 |
|
|
|
390 |
|
Petroleum coke (dollars per ton) |
$ |
51.54 |
|
|
$ |
50.35 |
|
|
$ |
52.68 |
|
|
$ |
43.23 |
|
Natural gas used in production (thousands of MMBtu) (3) |
|
1,120 |
|
|
|
2,043 |
|
|
|
4,817 |
|
|
|
6,079 |
|
Natural gas used in production (dollars per MMBtu) (3) |
$ |
7.19 |
|
|
$ |
4.29 |
|
|
$ |
6.65 |
|
|
$ |
3.48 |
|
Natural gas in cost of materials and other (thousands of MMBtus)
(3) |
|
1,330 |
|
|
|
1,786 |
|
|
|
4,566 |
|
|
|
5,436 |
|
Natural gas in cost of materials and other (dollars per MMBtu)
(3) |
$ |
7.84 |
|
|
$ |
3.78 |
|
|
$ |
6.40 |
|
|
$ |
3.27 |
|
____________________ |
(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 EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Ammonia — Southern Plains
(dollars per ton) |
$ |
934 |
|
|
$ |
623 |
|
|
$ |
1,149 |
|
|
$ |
543 |
|
Ammonia — Corn belt (dollars
per ton) |
|
1,048 |
|
|
|
659 |
|
|
|
1,275 |
|
|
|
594 |
|
UAN — Corn belt (dollars per
ton) |
|
496 |
|
|
|
352 |
|
|
|
581 |
|
|
|
317 |
|
|
|
|
|
|
|
|
|
Natural gas NYMEX (dollars per
MMBtu) |
$ |
7.95 |
|
|
$ |
4.32 |
|
|
$ |
6.70 |
|
|
$ |
3.35 |
|
Q4 2022 Outlook
The table below summarizes our outlook for
certain operational statistics and financial information for the
fourth quarter of 2022. See “Forward-Looking Statements” above.
|
Q4 2022 |
|
Low |
|
High |
Petroleum |
|
|
|
Total throughput (bpd) |
|
200,000 |
|
|
|
|
220,000 |
|
|
Direct operating expenses (in millions) (1) |
$ |
100 |
|
|
|
$ |
110 |
|
|
|
|
|
|
Renewables (2) |
|
|
|
Total throughput (in millions of gallons) |
|
14 |
|
|
|
|
17 |
|
|
Direct operating expenses (in millions) (1) |
$ |
5 |
|
|
|
$ |
7 |
|
|
|
|
|
|
Nitrogen Fertilizer |
|
|
|
Ammonia utilization rates |
|
|
|
Consolidated |
|
93 |
|
% |
|
|
98 |
|
% |
Coffeyville Fertilizer Facility |
|
92 |
|
% |
|
|
97 |
|
% |
East Dubuque Fertilizer Facility |
|
95 |
|
% |
|
|
100 |
|
% |
Direct operating expenses (in millions) (1) |
$ |
60 |
|
|
|
$ |
70 |
|
|
|
|
|
|
Capital Expenditures (in
millions) (3) |
|
|
|
Petroleum |
$ |
30 |
|
|
|
$ |
35 |
|
|
Renewables (2) |
|
20 |
|
|
|
|
25 |
|
|
Nitrogen Fertilizer |
|
5 |
|
|
|
|
10 |
|
|
Other |
|
2 |
|
|
|
|
5 |
|
|
Total capital expenditures |
$ |
57 |
|
|
|
$ |
75 |
|
|
____________________ |
(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. Upon completion and meeting of certain criteria under
accounting rules, Renewables is expected to be a new reportable
segment. As of September 30, 2022, Renewables does not the 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 EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in millions) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net
income |
$ |
80 |
|
|
$ |
106 |
|
|
$ |
472 |
|
|
$ |
49 |
|
Interest expense, net |
|
19 |
|
|
|
23 |
|
|
|
67 |
|
|
|
92 |
|
Income tax expense (benefit) |
|
7 |
|
|
|
47 |
|
|
|
106 |
|
|
|
(1 |
) |
Depreciation and amortization |
|
75 |
|
|
|
67 |
|
|
|
215 |
|
|
|
205 |
|
EBITDA |
$ |
181 |
|
|
$ |
243 |
|
|
$ |
860 |
|
|
$ |
345 |
|
Adjustments: |
|
|
|
|
|
|
|
Revaluation of RFS liability |
|
38 |
|
|
|
(115 |
) |
|
|
108 |
|
|
|
54 |
|
Loss (gain) on marketable securities |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
(82 |
) |
Unrealized gain on derivatives, net |
|
(20 |
) |
|
|
(22 |
) |
|
|
(5 |
) |
|
|
(16 |
) |
Inventory valuation impacts, unfavorable (favorable) |
|
114 |
|
|
|
(8 |
) |
|
|
(63 |
) |
|
|
(109 |
) |
Call Option Lawsuits settlement |
|
— |
|
|
|
— |
|
|
|
79 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
313 |
|
|
$ |
99 |
|
|
$ |
979 |
|
|
$ |
192 |
|
Reconciliation of Basic and Diluted
Earnings per Share to Adjusted
Earnings (Loss) per Share
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Basic and diluted
earnings per share |
$ |
0.92 |
|
|
$ |
0.83 |
|
|
$ |
3.49 |
|
|
$ |
0.38 |
|
Adjustments: (1) |
|
|
|
|
|
|
|
Revaluation of RFS liability |
|
0.28 |
|
|
|
(0.85 |
) |
|
|
0.80 |
|
|
|
0.40 |
|
Loss (gain) on marketable securities |
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
(0.60 |
) |
Unrealized gain on derivatives, net |
|
(0.15 |
) |
|
|
(0.17 |
) |
|
|
(0.04 |
) |
|
|
(0.12 |
) |
Inventory valuation impacts, unfavorable (favorable) |
|
0.85 |
|
|
|
(0.06 |
) |
|
|
(0.46 |
) |
|
|
(0.81 |
) |
Call Option Lawsuits settlement |
|
— |
|
|
|
— |
|
|
|
0.58 |
|
|
|
— |
|
Adjusted earnings (loss) per share |
$ |
1.90 |
|
|
$ |
(0.24 |
) |
|
$ |
4.37 |
|
|
$ |
(0.75 |
) |
____________________ |
(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 EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in millions) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net cash provided by
operating activities |
$ |
156 |
|
|
$ |
139 |
|
|
$ |
868 |
|
|
$ |
382 |
|
Less: |
|
|
|
|
|
|
|
Capital expenditures |
|
(57 |
) |
|
|
(62 |
) |
|
|
(145 |
) |
|
|
(188 |
) |
Capitalized turnaround expenditures |
|
(6 |
) |
|
|
(1 |
) |
|
|
(74 |
) |
|
|
(3 |
) |
Free cash flow |
$ |
93 |
|
|
$ |
76 |
|
|
$ |
649 |
|
|
$ |
191 |
|
Reconciliation of
Petroleum Segment Net Income
to EBITDA and Adjusted EBITDA
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in millions) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Petroleum net
income |
$ |
152 |
|
|
$ |
146 |
|
|
$ |
584 |
|
|
$ |
23 |
|
Interest income, net |
|
(13 |
) |
|
|
(8 |
) |
|
|
(24 |
) |
|
|
(16 |
) |
Depreciation and amortization |
|
47 |
|
|
|
50 |
|
|
|
140 |
|
|
|
152 |
|
Petroleum EBITDA |
|
186 |
|
|
|
188 |
|
|
|
700 |
|
|
|
159 |
|
Adjustments: |
|
|
|
|
|
|
|
Revaluation of RFS liability |
|
38 |
|
|
|
(115 |
) |
|
|
108 |
|
|
|
54 |
|
Unrealized gain on derivatives, net |
|
(25 |
) |
|
|
(22 |
) |
|
|
(8 |
) |
|
|
(16 |
) |
Inventory valuation impacts, unfavorable (favorable) (1) |
|
107 |
|
|
|
(8 |
) |
|
|
(63 |
) |
|
|
(109 |
) |
Petroleum Adjusted EBITDA |
$ |
306 |
|
|
$ |
43 |
|
|
$ |
737 |
|
|
$ |
88 |
|
Reconciliation of
Petroleum Segment Gross Profit
to Refining Margin and Refining Margin Adjusted for
Inventory Valuation Impacts
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in millions) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net
sales |
$ |
2,474 |
|
|
$ |
1,742 |
|
|
$ |
7,497 |
|
|
$ |
4,793 |
|
Less: |
|
|
|
|
|
|
|
Cost of materials and other |
|
(2,167 |
) |
|
|
(1,450 |
) |
|
|
(6,414 |
) |
|
|
(4,318 |
) |
Direct operating expenses (exclusive of depreciation and
amortization) |
|
(103 |
) |
|
|
(88 |
) |
|
|
(314 |
) |
|
|
(270 |
) |
Depreciation and amortization |
|
(47 |
) |
|
|
(50 |
) |
|
|
(140 |
) |
|
|
(152 |
) |
Gross profit |
|
157 |
|
|
|
154 |
|
|
|
629 |
|
|
|
53 |
|
Add: |
|
|
|
|
|
|
|
Direct operating expenses (exclusive of depreciation and
amortization) |
|
103 |
|
|
|
88 |
|
|
|
314 |
|
|
|
270 |
|
Depreciation and amortization |
|
47 |
|
|
|
50 |
|
|
|
140 |
|
|
|
152 |
|
Refining margin |
|
307 |
|
|
|
292 |
|
|
|
1,083 |
|
|
|
475 |
|
Inventory valuation impacts,
unfavorable (favorable) (1) |
|
107 |
|
|
|
(8 |
) |
|
|
(63 |
) |
|
|
(109 |
) |
Refining margin adjusted for inventory valuation
impacts |
$ |
414 |
|
|
$ |
284 |
|
|
$ |
1,020 |
|
|
$ |
366 |
|
____________________ |
(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 EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Total throughput barrels per
day |
|
201,657 |
|
|
|
210,943 |
|
|
|
200,098 |
|
|
|
204,645 |
|
Days in the period |
|
92 |
|
|
|
92 |
|
|
|
273 |
|
|
|
273 |
|
Total throughput barrels |
|
18,552,434 |
|
|
|
19,406,776 |
|
|
|
54,626,789 |
|
|
|
55,868,087 |
|
Reconciliation of Petroleum
Segment Refining Margin per Total Throughput
Barrel
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in millions, except for per throughput barrel data) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Refining margin |
$ |
307 |
|
|
$ |
292 |
|
|
$ |
1,083 |
|
|
$ |
475 |
|
Divided by: total throughput
barrels |
|
19 |
|
|
|
19 |
|
|
|
55 |
|
|
|
56 |
|
Refining margin per total throughput barrel |
$ |
16.56 |
|
|
$ |
15.03 |
|
|
$ |
19.82 |
|
|
$ |
8.51 |
|
Reconciliation of
Petroleum Segment Refining Margin Adjusted
for Inventory Valuation Impacts per Total Throughput
Barrel
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in millions, except for throughput barrel data) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Refining margin adjusted for
inventory valuation impacts |
$ |
414 |
|
|
$ |
284 |
|
|
$ |
1,020 |
|
|
$ |
366 |
|
Divided by: total throughput
barrels |
|
19 |
|
|
|
19 |
|
|
|
55 |
|
|
|
56 |
|
Refining margin adjusted for inventory valuation impacts
per total throughput barrel |
$ |
22.34 |
|
|
$ |
14.62 |
|
|
$ |
18.66 |
|
|
$ |
6.55 |
|
Reconciliation of Petroleum
Segment Direct Operating Expenses per Total
Throughput Barrel
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in millions, except for throughput barrel data) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Direct operating expenses
(exclusive of depreciation and amortization) |
$ |
103 |
|
|
$ |
88 |
|
|
$ |
314 |
|
|
$ |
270 |
|
Divided by: total throughput
barrels |
|
19 |
|
|
|
19 |
|
|
|
55 |
|
|
|
56 |
|
Direct operating expenses per total throughput
barrel |
$ |
5.53 |
|
|
$ |
4.52 |
|
|
$ |
5.74 |
|
|
$ |
4.83 |
|
Reconciliation of Nitrogen Fertilizer
Segment Net (Loss) Income to
EBITDA and Adjusted EBITDA
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in millions) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Nitrogen fertilizer
(loss) income |
$ |
(20 |
) |
|
$ |
35 |
|
|
$ |
191 |
|
|
$ |
17 |
|
Interest expense, net |
|
8 |
|
|
|
11 |
|
|
|
26 |
|
|
|
51 |
|
Depreciation and amortization |
|
22 |
|
|
|
18 |
|
|
|
64 |
|
|
|
52 |
|
Nitrogen Fertilizer EBITDA and Adjusted
EBITDA |
|
10 |
|
|
|
64 |
|
|
$ |
281 |
|
|
$ |
120 |
|
Reconciliation of Total Debt and Net Debt and Finance
Lease Obligations to EBITDA Exclusive of Nitrogen
Fertilizer
(in millions) |
Twelve Months Ended September 30,
2022 |
Total debt and finance lease obligations (1) |
$ |
1,593 |
|
Less: |
|
Nitrogen Fertilizer debt and finance lease obligations (1) |
$ |
547 |
|
Total debt and finance lease obligations exclusive of Nitrogen
Fertilizer |
|
1,046 |
|
|
|
EBITDA exclusive of Nitrogen
Fertilizer |
$ |
603 |
|
|
|
Total debt and finance
lease obligations to EBITDA exclusive of Nitrogen
Fertilizer |
|
1.73 |
|
|
|
Consolidated cash and cash
equivalents |
$ |
618 |
|
Less: |
|
Nitrogen Fertilizer cash and cash equivalents |
|
119 |
|
Cash and cash equivalents exclusive of Nitrogen Fertilizer |
|
499 |
|
|
|
Net debt and finance lease
obligations exclusive of Nitrogen Fertilizer (2) |
$ |
547 |
|
|
|
Net debt and finance
lease obligations to EBITDA exclusive of Nitrogen
Fertilizer (2) |
|
0.91 |
|
____________________ |
(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 September 30,
2022 |
(in millions) |
December 31, 2021 |
|
March 31, 2022 |
|
June 30, 2022 |
|
September 30, 2022 |
|
Consolidated |
|
|
|
|
|
|
|
|
|
Net income |
$ |
25 |
|
|
$ |
153 |
|
|
$ |
239 |
|
|
$ |
80 |
|
|
$ |
497 |
|
Interest expense, net |
|
24 |
|
|
|
24 |
|
|
|
23 |
|
|
|
19 |
|
|
|
90 |
|
Income tax (benefit) expense |
|
(7 |
) |
|
|
34 |
|
|
|
66 |
|
|
|
7 |
|
|
|
100 |
|
Depreciation and amortization |
|
74 |
|
|
|
67 |
|
|
|
73 |
|
|
|
75 |
|
|
|
289 |
|
EBITDA |
$ |
116 |
|
|
$ |
278 |
|
|
$ |
401 |
|
|
$ |
181 |
|
|
$ |
976 |
|
|
|
|
|
|
|
|
|
|
|
Nitrogen Fertilizer |
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
61 |
|
|
$ |
94 |
|
|
$ |
118 |
|
|
$ |
(20 |
) |
|
$ |
253 |
|
Interest expense, net |
|
11 |
|
|
|
10 |
|
|
|
8 |
|
|
|
8 |
|
|
|
37 |
|
Depreciation and amortization |
|
21 |
|
|
|
19 |
|
|
|
21 |
|
|
|
22 |
|
|
|
83 |
|
EBITDA |
$ |
93 |
|
|
$ |
123 |
|
|
$ |
147 |
|
|
$ |
10 |
|
|
$ |
373 |
|
|
|
|
|
|
|
|
|
|
|
EBITDA exclusive of
Nitrogen Fertilizer |
$ |
23 |
|
|
$ |
155 |
|
|
$ |
254 |
|
|
$ |
171 |
|
|
$ |
603 |
|
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