CVR Energy, Inc. (“CVR Energy” or the “Company”) (NYSE: CVI) today
announced fourth quarter 2022 net income of $112 million, or $1.11
per diluted share, on net sales of $2.7 billion, compared to a
fourth quarter 2021 net loss of $14 million, or 14 cents per
diluted share, on net sales of $2.1 billion. Adjusted earnings for
the fourth quarter of 2022 was $1.68 per diluted share compared to
an adjusted loss of 20 cents per diluted share in the fourth
quarter of 2021, primarily driven by improved crack spreads. Fourth
quarter 2022 EBITDA was $313 million, compared to fourth quarter
2021 EBITDA of $116 million. Adjusted EBITDA for the fourth quarter
of 2022 was $388 million, compared to adjusted EBITDA of $109
million in the fourth quarter of 2021.
For full-year 2022, the Company reported net
income of $463 million, or $4.60 per diluted share, on net sales of
$10.9 billion, compared to net income for full-year 2021 of $25
million, or 25 cents per diluted share, on net sales of $7.2
billion. Adjusted earnings for full-year 2022 was $6.04 per diluted
share compared to an adjusted loss of 93 cents per diluted share in
full-year 2021, primarily driven by improved crack spreads.
Full-year 2022 EBITDA was $1.2 billion, compared to full-year
2021 EBITDA of $462 million. Adjusted EBITDA for full-year 2022 was
$1.4 billion, compared to adjusted EBITDA of $301 million for
full-year 2021.
“CVR Energy reported strong results for the 2022
full year, primarily due to an increase in the Group 3 2-1-1 crack
spread driven by tight inventory levels,” said Dave Lamp, CVR
Energy’s Chief Executive Officer. “CVR Partners achieved strong
results for the full-year 2022 despite planned turnarounds at both
of its nitrogen fertilizer production facilities. Grain prices are
near 10-year highs and planted corn acres are expected to increase
by 3 percent to 5 percent for the spring 2023 planting season.
“We also are pleased to announce that on
February 1, 2023, CVR Energy completed its corporate transformation
to segregate its renewables business,” Lamp said. “While we remain
proud of our production of the petroleum products that fuel the
lives of hardworking Americans, this corporate transformation
should offer our renewables business a defined focus and better
access to new capital and new partnerships to support future
growth. We believe we are uniquely positioned to competitively
produce renewable fuels due to, among other reasons, our proximity
to the farm belt, excess hydrogen capacity and existing CO2
sequestration capabilities.”
Petroleum
Fourth Quarter 2022
The Petroleum Segment reported fourth quarter
2022 operating income of $155 million, on net sales of $2.4
billion, compared to fourth quarter 2021 operating loss of $27
million, on net sales of $1.9 billion.
Refining margin per total throughput barrel was
$17.14 in the fourth quarter 2022, compared to $7.13 during the
same period in 2021. The increase in refining margin of $202
million was primarily due to an increase in the Group 3 2-1-1 crack
spread. The Group 3 2-1-1 crack spread increased by $20.42 per
barrel relative to the fourth quarter 2021, primarily driven by
tight inventory levels, increased European demand for diesel and
supply concerns due to the ongoing Russia-Ukraine conflict.
The Petroleum Segment had an unfavorable
inventory valuation impact of $41 million, or $2.03 per total
throughout barrel, in the fourth quarter 2022 compared to a
favorable inventory valuation impact of $17 million, or 85 cents
per total throughput barrel, in the fourth quarter 2021.
The Petroleum Segment also recognized a fourth
quarter 2022 derivative loss of $7 million, or 37 cents per
total throughput barrel, compared to a fourth quarter 2021
derivative gain of $1 million, or 4 cents per total throughput
barrel. Included in this derivative loss for the fourth quarter
2022 was an $11 million unrealized loss, compared to a fourth
quarter 2021 nominal unrealized gain. Our derivative activity was
primarily a result of inventory hedging activity, Canadian crude
oil purchases and sales, and unfavorable crack spread swaps.
The Petroleum Segment’s subsidiaries that are
subject to the Renewable Fuel Standard (“RFS”) (such subsidiaries,
the “obligated-party subsidiaries”) recognized costs to comply with
the RFS of $116 million, or $5.70 per throughput barrel, which
excludes the RINs’ revaluation expense impact of $26 million, or
$1.30 per total throughput barrel, for the fourth quarter 2022.
This is compared to RFS compliance costs of $91 million, or
$4.47 per throughput barrel, which excludes the RINs’ revaluation
expense impact of $9 million, or 42 cents per total throughput
barrel, for the fourth quarter 2021.
Fourth quarter 2022 combined total throughput
was approximately 221,000 barrels per day (“bpd”), compared to
approximately 222,000 bpd of combined total throughput for the
fourth quarter 2021.
Full-Year 2022
Full-year 2022 operating income was $719
million, on net sales of $9.9 billion, compared to full-year 2021
operating loss of $27 million, on net sales of $6.7 billion.
The Petroleum Segment’s refining margin per
total throughput barrel for full-year 2022 was $19.09, compared to
$8.14 for full-year 2021. The increase in refining margin of $810
million was primarily due to an increase in the Group 3 2-1-1 crack
spread. The Group 3 2-1-1 crack spread increased by $20.04 per
barrel relative to 2021, driven by tight inventory levels,
increased European demand for diesel, and supply concerns due to
the ongoing Russia-Ukraine conflict.
The Petroleum Segment had favorable inventory
valuation impacts totaling $22 million, or 29 cents per total
throughput barrel for full-year 2022, compared to favorable
inventory valuation impacts of $127 million, or $1.66 per total
throughput barrel, for full-year 2021. While impacts were
favorable, the decline in inventory valuation impacts year over
year was a result of crude oil price increases in the prior year
exceeding crude oil price increases for full-year 2022.
The Petroleum Segment recognized a derivative
loss of $47 million, or 63 cents per total throughput barrel, for
the full-year 2022, a result of unfavorable crack spread swaps,
partially offset by gains on WCS sales, compared to a derivative
loss of $45 million, or 59 cents per throughput barrel, for
full-year 2021. Included in this derivative loss for full-year 2022
was a $5 million unrealized loss, compared to a $16 million
unrealized gain for full-year 2021.
The Petroleum Segment’s obligated-party
subsidiaries recognized costs to comply with the RFS of
$403 million, or $5.38 per throughput barrel, which excludes
the RINs’ revaluation expense impact of $135 million, or $1.80 per
total throughput barrel, for full-year 2022. This is compared to
RFS compliance costs of $372 million, or $4.87 per throughput
barrel, which excludes the RINs’ revaluation expense impact of $63
million, or 83 cents per total throughput barrel, for full-year
2021.
Combined total throughput for full-year 2022 was
approximately 205,000 bpd, compared to approximately 209,000 bpd
for full-year 2021.
Nitrogen Fertilizer
Fourth Quarter 2022
The Nitrogen Fertilizer Segment reported
operating income of $102 million on net sales of $212 million for
the fourth quarter 2022, compared to operating income of $72
million on net sales of $189 million for the fourth quarter
2021.
Fourth quarter 2022 average realized gate prices
for urea ammonia nitrate (“UAN”) improved by 31 percent to $455 per
ton and ammonia improved by 30 percent to $967 per ton when
compared to the fourth quarter 2021. Average realized gate prices
for UAN and ammonia were $347 per ton and $745 per ton,
respectively, for the fourth quarter 2021.
CVR Partners’ fertilizer facilities produced a
combined 210,000 tons of ammonia during the fourth quarter 2022, of
which 75,000 net tons were available for sale, while the rest was
upgraded to other fertilizer products, including 308,000 tons of
UAN. During the fourth quarter 2021, the fertilizer facilities
produced 197,000 tons of ammonia, of which 70,000 net tons were
available for sale, while the remainder was upgraded to other
fertilizer products, including 288,000 tons of UAN.
Full-Year 2022
Full-year 2022 operating income was $320 million
on net sales of $836 million, compared to operating income of $134
million on net sales of $533 million for full-year 2021.
The average realized gate prices for full-year
2022 for UAN improved by 84 percent to $486 per ton and ammonia
improved 88 percent to $1,024 per ton when compared to the
full-year 2021. Average realized gate prices for UAN and ammonia
were $264 per ton and $544 per ton, respectively, for full-year
2021.
For full-year 2022, our fertilizer facilities
produced a combined 703,000 tons of ammonia, of which 213,000 net
tons were available for sale, while the rest was upgraded to other
fertilizer products, including 1,140,000 tons of UAN. For full-year
2021, the fertilizer facilities produced 807,000 tons of ammonia,
of which 275,000 net tons were available for sale, while the
remainder was upgraded to other fertilizer products, including
1,208,000 tons of UAN.
Corporate
The Company reported income tax expense of $157
million, or 19.6 percent of income before income taxes, for the
year ended December 31, 2022, compared to an income tax benefit of
$8 million, or (12.4) percent of income before income taxes, for
the year ended December 31, 2021. The fluctuation in income tax
expense was due primarily to an increase in overall pretax earnings
and state income tax expense. In addition, the change in the
effective tax rate was due primarily to the changes in pretax
earnings attributable to noncontrolling interests and state income
tax expense between all periods presented.
Cash, Debt and Dividend
Consolidated cash and cash equivalents was $510
million at December 31, 2022. Consolidated total debt and
finance lease obligations was $1.6 billion at December 31,
2022, including $547 million held by the Nitrogen Fertilizer
Segment.
During the years ended December 31, 2022,
and December 31, 2021, CVR Partners repurchased 111,695 and 24,378
of its common units, respectively, on the open market pursuant to a
repurchase program (the “Unit Repurchase Program”) approved by the
board of directors of its general partner (the “UAN GP Board”) and
in accordance with a repurchase agreement under Rules 10b5-1 and
10b-18 of the Securities Exchange Act of 1934, as amended, at a
cost of $12 million and $1 million, respectively, exclusive of
transaction costs, or an average price of $110.98 and $21.69,
respectively, per common unit. As of December 31, 2022, CVR
Partners had a nominal authorized amount remaining under the Unit
Repurchase Program. This Unit Repurchase Program does not obligate
CVR Partners to acquire any common units and may be cancelled or
terminated by the UAN GP Board at any time.
On February 22, 2022, CVR Partners redeemed
the $65 million outstanding balance of the 9.25% Senior
Secured Notes, due June 2023 at par, plus accrued and unpaid
interest.
On June 30, 2022, CVR Refining and certain
of its subsidiaries (the “Credit Parties”) entered into Amendment
No. 3 to the Amended and Restated ABL Credit Agreement, dated
December 20, 2012, with a revolving credit facility in aggregate
principal amount of up to $275 million (with a
$125 million incremental facility having substantially similar
terms and subject to additional lender commitments) and a maturity
date of June 30, 2027 (as amended, the “Petroleum ABL”). The
proceeds of loans under the Petroleum ABL may be used for capital
expenditures, working capital and general corporate purposes of the
Credit Parties and their subsidiaries. The Petroleum ABL provides
for loans and letters of credit in an amount up to the aggregate
availability under the facility, subject to meeting certain
borrowing base conditions, with sub-limits of $30 million for
swingline loans and $60 million (or $100 million if
increased by the agent) for letters of credit.
Today, CVR Energy announced a fourth quarter
2022 cash dividend of 50 cents per share. The quarterly dividend,
as declared by CVR Energy’s Board of Directors on February 21,
2023, will be paid on March 13, 2023, to stockholders of
record as of March 6, 2023.
Today, CVR Partners announced that the Board of
Directors of its general partner declared a fourth quarter 2022
cash distribution of $10.50 per common unit, which will be paid on
March 13, 2023, to common unitholders of record as of
March 6, 2023.
Fourth Quarter
2022 Earnings Conference Call
CVR Energy previously announced that it will
host its fourth quarter and full-year 2022 Earnings Conference Call
on Wednesday, February 22, 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 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/r5sb24wm. A repeat of the call
can be accessed for 14 days by dialing (877) 660-6853, conference
ID 13735899.
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: Renewable Fuel
Standards and repair thereof; continued safe and reliable
operations; improvements in crack spreads; strength of our results;
inventory levels, including the tightness thereof; benefits of our
corporate transformation to segregate our renewables business;
access to capital and new partnerships; RIN pricing, including its
impact on performance and the Company’s ability to offset the
impact thereof; the Company’s focus on decarbonization and growth
of and investment in its renewables business; our unique position
for renewable fuel production; ammonia and UAN pricing; grain
prices; crop inventory levels; planted corn acres, including an
increase thereof; refining margin; crude oil and refined product
pricing impacts on inventory valuation; derivative gains and
losses; costs to comply with the RFS and revaluation of our RFS
liability; market demand for refined products; economic downturns
and demand destruction; production rates; production levels and
utilization at our nitrogen fertilizer facilities; nitrogen
fertilizer sales volumes; ability to upgrade ammonia to other
fertilizer products; changes to pretax earnings and our effective
tax rate; purchases under the Unit Repurchase Program (if any);
reduction of outstanding debt, including through the redemption of
outstanding notes; use of funds under the Petroleum ABL and the
credit facility for the Nitrogen Fertilizer Segment; dividends and
distributions, including the timing, payment and amount (if any)
thereof; total throughput, direct operating expenses, capital
expenditures, depreciation and amortization and turnaround expense;
timing of turnarounds; exploration and/or completion of a potential
spin-off of our interests in our nitrogen fertilizer business,
including the approval, timing, benefits, costs and risks
associated therewith; impacts of COVID-19 and any variants thereof,
including the duration thereof; 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) the health and economic
effects of COVID-19, the rate of any economic improvement, demand
for fossil fuels and price volatility of crude oil, other
feedstocks and refined products; the ability of Company to pay cash
dividends and of CVR Partners to make cash distributions; potential
operating hazards; costs of compliance with existing or new laws
and regulations and potential liabilities arising therefrom;
impacts of the 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 Securities and Exchange Commission (“SEC”)
filings. These and other risks may cause our actual results,
performance or achievements to differ materially from any future
results, performance or achievements expressed or implied by these
forward-looking statements. Given these risks and uncertainties,
you are cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements included
in this news release are made only as of the date hereof. CVR
Energy disclaims any intention or obligation to update publicly or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent
required by law.
About CVR Energy,
Inc.Headquartered in Sugar Land, Texas, CVR Energy is a
diversified holding company primarily engaged in the renewable
fuels and petroleum refining and marketing businesses, 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 Relations: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, 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 year ended December 31, 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 - The Coffeyville
Refinery’s next planned turnaround is expected to start in the
spring of 2023, with pre-planning expenditures of $14 million
capitalized for the year ended December 31, 2022.
Wynnewood Refinery - The Wynnewood Refinery
began a major scheduled turnaround in late February 2022 that was
completed in early April 2022. We capitalized expenditures of
$67 million and $7 million related to turnaround
activities for the years ended December 31, 2022 and 2021,
respectively.
Nitrogen Fertilizer Segment
Coffeyville Fertilizer Facility - A planned
turnaround at the Coffeyville Facility commenced in July 2022 and
was completed in mid-August 2022. For the year ended December 31,
2022, we incurred turnaround expense of $12 million. For the
year ended December 31, 2021, we incurred turnaround expense of
less than $1 million related to planning for the Coffeyville
Facility’s turnaround completed during the third quarter of 2022.
During the planning and execution of this turnaround, we updated
the estimated useful lives of certain assets, which resulted in
additional depreciation expense of $6 million during the year
ended December 31, 2022. Additionally, the Coffeyville Facility had
planned downtime during the fourth quarter 2021 at a cost of
$2 million.
East Dubuque Fertilizer Facility - A planned
turnaround at the East Dubuque Facility commenced in August 2022
and was completed in mid-September 2022. For the year ended
December 31, 2022, we incurred turnaround expense of
$21 million. For the year ended December 31, 2021, we incurred
turnaround expense of $1 million related to planning for the
East Dubuque Facility’s turnaround completed during the third
quarter of 2022. During the planning and execution of this
turnaround, we updated the estimated useful lives of certain
assets, which resulted in additional depreciation expense of
$6 million and $5 million during the years ended December
31, 2022 and 2021, respectively.
CVR Energy, Inc.(unaudited)
Consolidated Statement of Operations Data
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions, except per share data) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net sales |
$ |
2,679 |
|
|
$ |
2,112 |
|
|
$ |
10,896 |
|
|
$ |
7,242 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
Cost of materials and other |
|
2,147 |
|
|
|
1,805 |
|
|
|
8,766 |
|
|
|
6,185 |
|
Direct operating expenses (exclusive of depreciation and
amortization) |
|
174 |
|
|
|
160 |
|
|
|
719 |
|
|
|
569 |
|
Depreciation and amortization |
|
71 |
|
|
|
71 |
|
|
|
281 |
|
|
|
270 |
|
Cost of sales |
|
2,392 |
|
|
|
2,036 |
|
|
|
9,766 |
|
|
|
7,024 |
|
Selling, general and
administrative expenses (exclusive of depreciation and
amortization) |
|
39 |
|
|
|
33 |
|
|
|
149 |
|
|
|
119 |
|
Depreciation and
amortization |
|
2 |
|
|
|
3 |
|
|
|
7 |
|
|
|
9 |
|
Loss on asset disposal |
|
10 |
|
|
|
— |
|
|
|
11 |
|
|
|
3 |
|
Operating income |
|
236 |
|
|
|
40 |
|
|
|
963 |
|
|
|
87 |
|
Other income (expense): |
|
|
|
|
|
|
|
Interest expense, net |
|
(18 |
) |
|
|
(24 |
) |
|
|
(85 |
) |
|
|
(117 |
) |
Investment income (loss) on marketable securities |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
81 |
|
Other income (expense), net |
|
4 |
|
|
|
3 |
|
|
|
(77 |
) |
|
|
15 |
|
Income before income tax expense |
|
222 |
|
|
|
18 |
|
|
|
801 |
|
|
|
66 |
|
Income tax expense
(benefit) |
|
50 |
|
|
|
(7 |
) |
|
|
157 |
|
|
|
(8 |
) |
Net income |
|
172 |
|
|
|
25 |
|
|
|
644 |
|
|
|
74 |
|
Less: Net income attributable
to noncontrolling interest |
|
60 |
|
|
|
39 |
|
|
|
181 |
|
|
|
49 |
|
Net income (loss) attributable to CVR Energy
stockholders |
$ |
112 |
|
|
$ |
(14 |
) |
|
$ |
463 |
|
|
$ |
25 |
|
|
|
|
|
|
|
|
|
Basic and diluted earnings
(loss) per share |
$ |
1.11 |
|
|
$ |
(0.14 |
) |
|
$ |
4.60 |
|
|
$ |
0.25 |
|
Dividends declared per
share |
$ |
1.40 |
|
|
$ |
— |
|
|
$ |
4.80 |
|
|
$ |
4.89 |
|
|
|
|
|
|
|
|
|
EBITDA * |
$ |
313 |
|
|
$ |
116 |
|
|
$ |
1,174 |
|
|
$ |
462 |
|
Adjusted EBITDA* |
$ |
388 |
|
|
$ |
109 |
|
|
$ |
1,369 |
|
|
$ |
301 |
|
|
|
|
|
|
|
|
|
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) |
December 31,2022 |
|
December 31,2021 |
Cash and cash equivalents |
$ |
510 |
|
$ |
510 |
Working capital |
|
154 |
|
|
213 |
Total assets |
|
4,119 |
|
|
3,906 |
Total debt and finance lease
obligations, including current portion |
|
1,591 |
|
|
1,660 |
Total liabilities |
|
3,328 |
|
|
3,136 |
Total CVR stockholders’
equity |
|
531 |
|
|
553 |
Selected Cash Flow Data
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net cash flows provided by (used in): |
|
|
|
|
|
|
|
Operating activities |
$ |
99 |
|
|
$ |
14 |
|
|
$ |
967 |
|
|
$ |
396 |
|
Investing activities |
|
(54 |
) |
|
|
(34 |
) |
|
|
(271 |
) |
|
|
(238 |
) |
Financing activities |
|
(153 |
) |
|
|
(36 |
) |
|
|
(696 |
) |
|
|
(315 |
) |
Net decrease in cash, cash equivalents and restricted
cash |
$ |
(108 |
) |
|
$ |
(56 |
) |
|
$ |
— |
|
|
$ |
(157 |
) |
|
|
|
|
|
|
|
|
Free cash flow * |
$ |
44 |
|
|
$ |
(24 |
) |
|
$ |
693 |
|
|
$ |
167 |
|
________________ |
* |
See “Non-GAAP Reconciliations” section below. |
Selected Segment Data
|
Three Months EndedDecember 31, 2022 |
|
Year EndedDecember 31, 2022 |
(in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
|
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
Net sales |
$ |
2,422 |
|
$ |
212 |
|
$ |
2,679 |
|
$ |
9,919 |
|
$ |
836 |
|
$ |
10,896 |
Operating income |
|
155 |
|
|
102 |
|
|
236 |
|
|
719 |
|
|
320 |
|
|
963 |
Net income |
|
175 |
|
|
95 |
|
|
172 |
|
|
759 |
|
|
287 |
|
|
644 |
EBITDA * |
|
204 |
|
|
122 |
|
|
313 |
|
|
905 |
|
|
403 |
|
|
1,174 |
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures: (1) |
|
|
|
|
|
|
|
|
|
|
|
Maintenance capital expenditures |
$ |
25 |
|
$ |
2 |
|
$ |
30 |
|
$ |
84 |
|
$ |
40 |
|
$ |
133 |
Growth capital expenditures |
|
— |
|
|
— |
|
|
14 |
|
|
2 |
|
|
1 |
|
|
70 |
Total capital expenditures |
$ |
25 |
|
$ |
2 |
|
$ |
44 |
|
$ |
86 |
|
$ |
41 |
|
$ |
203 |
|
Three Months EndedDecember 31, 2021 |
|
Year EndedDecember 31, 2021 |
(in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
|
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
Net sales |
$ |
1,927 |
|
|
$ |
189 |
|
$ |
2,112 |
|
$ |
6,721 |
|
|
$ |
533 |
|
$ |
7,242 |
Operating (loss) income |
|
(27 |
) |
|
|
72 |
|
|
40 |
|
|
(27 |
) |
|
|
134 |
|
|
87 |
Net (loss) income |
|
(19 |
) |
|
|
61 |
|
|
25 |
|
|
4 |
|
|
|
78 |
|
|
74 |
EBITDA * |
|
27 |
|
|
|
93 |
|
|
116 |
|
|
186 |
|
|
|
213 |
|
|
462 |
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures: (1) |
|
|
|
|
|
|
|
|
|
|
|
Maintenance capital expenditures |
$ |
18 |
|
|
$ |
9 |
|
$ |
27 |
|
$ |
47 |
|
|
$ |
16 |
|
$ |
65 |
Growth capital expenditures |
|
— |
|
|
|
3 |
|
|
10 |
|
|
3 |
|
|
|
10 |
|
|
161 |
Total capital expenditures |
$ |
18 |
|
|
$ |
12 |
|
$ |
37 |
|
$ |
50 |
|
|
$ |
26 |
|
$ |
226 |
________________ |
* |
See “Non-GAAP Reconciliations” section below. |
(1) |
Capital expenditures are shown exclusive of capitalized turnaround
expenditures and business combinations. |
Selected Balance Sheet Data
|
December 31, 2022 |
|
December 31, 2021 |
(in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
|
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
Cash and cash equivalents (1) |
$ |
235 |
|
$ |
86 |
|
$ |
510 |
|
$ |
305 |
|
$ |
113 |
|
$ |
510 |
Total assets |
|
4,354 |
|
|
1,100 |
|
|
4,119 |
|
|
3,368 |
|
|
1,127 |
|
|
3,906 |
Total debt and finance lease
obligations, including current portion (2) |
|
48 |
|
|
547 |
|
|
1,591 |
|
|
54 |
|
|
611 |
|
|
1,660 |
________________ |
(1) |
Corporate cash and cash equivalents consisted of $189 million and
$92 million at December 31, 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
December 31, 2022 and December 31, 2021, respectively. |
Petroleum Segment
Key Operating Metrics per Total Throughput
Barrel
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Refining margin * |
$ |
17.14 |
|
$ |
7.13 |
|
$ |
19.09 |
|
$ |
8.14 |
Refining margin, adjusted for
inventory valuation impacts * |
|
19.17 |
|
|
6.28 |
|
|
18.80 |
|
|
6.48 |
Direct operating expenses
* |
|
5.52 |
|
|
4.84 |
|
|
5.68 |
|
|
4.83 |
________________ |
* |
See “Non-GAAP Reconciliations” section below. |
Throughput Data by Refinery
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in bpd) |
2022 |
|
2021 |
|
2022 |
|
2021 |
Coffeyville |
|
|
|
|
|
|
|
Regional crude |
46,005 |
|
28,237 |
|
53,237 |
|
28,270 |
WTI |
40,638 |
|
63,604 |
|
38,265 |
|
62,695 |
WTL |
— |
|
482 |
|
407 |
|
511 |
WTS |
611 |
|
— |
|
462 |
|
— |
Midland WTI |
— |
|
160 |
|
642 |
|
452 |
Condensate |
15,980 |
|
5,692 |
|
12,159 |
|
7,911 |
Heavy Canadian |
6,781 |
|
6,147 |
|
6,847 |
|
3,695 |
DJ Basin |
20,105 |
|
24,314 |
|
15,607 |
|
17,980 |
Other feedstocks and blendstocks |
16,733 |
|
13,730 |
|
11,556 |
|
10,788 |
Wynnewood |
|
|
|
|
|
|
|
Regional crude |
47,961 |
|
63,158 |
|
46,159 |
|
60,287 |
WTL |
2,321 |
|
— |
|
2,323 |
|
3,430 |
WTS |
— |
|
803 |
|
143 |
|
202 |
Midland WTI |
2,658 |
|
4,047 |
|
1,073 |
|
2,107 |
Condensate |
16,730 |
|
7,654 |
|
13,283 |
|
7,360 |
Other feedstocks and blendstocks |
4,166 |
|
4,229 |
|
3,125 |
|
3,396 |
Total throughput |
220,689 |
|
222,257 |
|
205,288 |
|
209,084 |
Production Data by Refinery
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in bpd) |
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Coffeyville |
|
|
|
|
|
|
|
Gasoline |
76,851 |
|
|
79,259 |
|
|
72,478 |
|
|
71,070 |
|
Distillate |
62,066 |
|
|
57,033 |
|
|
58,104 |
|
|
53,441 |
|
Other liquid products |
3,619 |
|
|
3,098 |
|
|
4,789 |
|
|
4,481 |
|
Solids |
5,347 |
|
|
4,566 |
|
|
4,700 |
|
|
4,246 |
|
Wynnewood |
|
|
|
|
|
|
|
Gasoline |
40,921 |
|
|
41,459 |
|
|
35,027 |
|
|
39,858 |
|
Distillate |
25,282 |
|
|
33,547 |
|
|
23,690 |
|
|
31,662 |
|
Other liquid products |
6,530 |
|
|
2,971 |
|
|
5,712 |
|
|
2,862 |
|
Solids |
10 |
|
|
25 |
|
|
11 |
|
|
21 |
|
Total production |
220,626 |
|
|
221,958 |
|
|
204,511 |
|
|
207,641 |
|
|
|
|
|
|
|
|
|
Light product yield (as % of
crude throughput) (1) |
102.7 |
% |
|
103.4 |
% |
|
99.3 |
% |
|
100.6 |
% |
Liquid volume yield (as % of
total throughput) (2) |
97.5 |
% |
|
97.8 |
% |
|
97.3 |
% |
|
97.3 |
% |
Distillate yield (as % of
crude throughput) (3) |
43.7 |
% |
|
44.3 |
% |
|
42.9 |
% |
|
43.7 |
% |
________________ |
(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 EndedDecember 31, |
|
Year EndedDecember 31, |
(dollars per barrel) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
West Texas Intermediate (WTI)
NYMEX |
$ |
82.64 |
|
|
$ |
77.10 |
|
|
$ |
94.41 |
|
|
$ |
68.11 |
|
Crude Oil Differentials to
WTI: |
|
|
|
|
|
|
|
Brent |
|
5.99 |
|
|
|
2.64 |
|
|
|
4.63 |
|
|
|
2.83 |
|
WCS (heavy sour) |
|
(28.15 |
) |
|
|
(16.60 |
) |
|
|
(19.24 |
) |
|
|
(13.55 |
) |
Condensate |
|
0.52 |
|
|
|
0.04 |
|
|
|
0.06 |
|
|
|
(0.40 |
) |
Midland Cushing |
|
1.33 |
|
|
|
0.63 |
|
|
|
1.52 |
|
|
|
0.45 |
|
NYMEX Crack Spreads: |
|
|
|
|
|
|
|
Gasoline |
|
21.81 |
|
|
|
18.52 |
|
|
|
30.43 |
|
|
|
20.11 |
|
Heating Oil |
|
66.21 |
|
|
|
22.77 |
|
|
|
54.76 |
|
|
|
18.80 |
|
NYMEX 2-1-1 Crack Spread |
|
44.01 |
|
|
|
20.64 |
|
|
|
42.60 |
|
|
|
19.45 |
|
PADD II Group 3 Product
Basis: |
|
|
|
|
|
|
|
Gasoline |
|
(6.70 |
) |
|
|
(4.50 |
) |
|
|
(6.44 |
) |
|
|
(2.60 |
) |
Ultra Low Sulfur Diesel |
|
(6.48 |
) |
|
|
(2.79 |
) |
|
|
(2.40 |
) |
|
|
(0.02 |
) |
PADD II Group 3 Product Crack
Spread: |
|
|
|
|
|
|
|
Gasoline |
|
15.11 |
|
|
|
14.02 |
|
|
|
23.98 |
|
|
|
17.51 |
|
Ultra Low Sulfur Diesel |
|
59.72 |
|
|
|
19.98 |
|
|
|
52.37 |
|
|
|
18.78 |
|
PADD II Group 3 2-1-1 |
|
37.42 |
|
|
|
17.00 |
|
|
|
38.18 |
|
|
|
18.14 |
|
Nitrogen Fertilizer Segment
Ammonia Utilization Rates
(1)
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(percent of capacity utilization) |
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Consolidated |
96 |
% |
|
90 |
% |
|
81 |
% |
|
92 |
% |
________________ |
(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 Nitrogen Fertilizer Segment’s
facilities. Utilization is calculated as actual tons produced
divided by capacity. We present our utilization for the three and
twelve months ended December 31, 2022 and 2021, respectively, 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 EndedDecember 31, |
|
Year EndedDecember 31, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Consolidated sales (thousand
tons): |
|
|
|
|
|
|
|
Ammonia |
|
77 |
|
|
105 |
|
|
195 |
|
|
269 |
UAN |
|
261 |
|
|
265 |
|
|
1,144 |
|
|
1,196 |
|
|
|
|
|
|
|
|
Consolidated product pricing
at gate (dollars per ton): (1) |
|
|
|
|
|
|
|
Ammonia |
$ |
967 |
|
$ |
745 |
|
$ |
1,024 |
|
$ |
544 |
UAN |
|
455 |
|
|
347 |
|
|
486 |
|
|
264 |
|
|
|
|
|
|
|
|
Consolidated production volume
(thousand tons): |
|
|
|
|
|
|
|
Ammonia (gross produced) (2) |
|
210 |
|
|
197 |
|
|
703 |
|
|
807 |
Ammonia (net available for sale) (2) |
|
75 |
|
|
70 |
|
|
213 |
|
|
275 |
UAN |
|
308 |
|
|
288 |
|
|
1,140 |
|
|
1,208 |
|
|
|
|
|
|
|
|
Feedstock: |
|
|
|
|
|
|
|
Petroleum coke used in production (thousand tons) |
|
127 |
|
|
124 |
|
|
425 |
|
|
514 |
Petroleum coke (dollars per ton) |
$ |
53.36 |
|
$ |
47.96 |
|
$ |
52.88 |
|
$ |
44.69 |
Natural gas used in production (thousands of MMBtus) (3) |
|
2,088 |
|
|
1,970 |
|
|
6,905 |
|
|
8,049 |
Natural gas used in production (dollars per MMBtu) (3) |
$ |
6.68 |
|
$ |
5.43 |
|
$ |
6.66 |
|
$ |
3.95 |
Natural gas in cost of materials and other (thousands of MMBtus)
(3) |
|
2,135 |
|
|
2,412 |
|
|
6,701 |
|
|
7,848 |
Natural gas in cost of materials and other (dollars per MMBtu)
(3) |
$ |
6.30 |
|
$ |
5.10 |
|
$ |
6.37 |
|
$ |
3.83 |
________________ |
(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, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Ammonia — Southern plains
(dollars per ton) |
$ |
1,097 |
|
$ |
1,090 |
|
$ |
1,136 |
|
$ |
681 |
Ammonia — Corn belt (dollars
per ton) |
|
1,272 |
|
|
1,199 |
|
|
1,274 |
|
|
746 |
UAN — Corn belt (dollars per
ton) |
|
578 |
|
|
583 |
|
|
580 |
|
|
384 |
|
|
|
|
|
|
|
|
Natural gas NYMEX (dollars per
MMBtu) |
$ |
6.07 |
|
$ |
4.84 |
|
$ |
6.54 |
|
$ |
3.73 |
Q1 2023 Outlook
The table below summarizes our outlook for
certain refining statistics and financial information for the first
quarter of 2023. See “Forward-Looking Statements” above.
|
Q1 2023 |
|
Low |
|
High |
Petroleum |
|
|
|
Total throughput (bpd) |
|
180,000 |
|
|
|
195,000 |
|
Direct operating expenses (in millions) (1) |
$ |
95 |
|
|
$ |
105 |
|
Turnaround (2) |
|
35 |
|
|
|
45 |
|
|
|
|
|
Renewables (3) |
|
|
|
Total throughput (in millions of gallons) |
|
20 |
|
|
|
25 |
|
Direct Operating expenses (in millions) (1) |
$ |
2 |
|
|
$ |
4 |
|
|
|
|
|
Nitrogen Fertilizer |
|
|
|
Ammonia utilization rates |
|
|
|
Consolidated |
|
95 |
% |
|
|
100 |
% |
Coffeyville Fertilizer Facility |
|
95 |
% |
|
|
100 |
% |
East Dubuque Fertilizer Facility |
|
95 |
% |
|
|
100 |
% |
Direct operating expenses (in millions) (1) |
$ |
55 |
|
|
$ |
65 |
|
|
|
|
|
Capital Expenditures (in
millions) (2) |
|
|
|
Petroleum |
$ |
40 |
|
|
$ |
50 |
|
Renewables (3) |
|
20 |
|
|
|
30 |
|
Nitrogen Fertilizer |
|
5 |
|
|
|
10 |
|
Other |
|
2 |
|
|
|
5 |
|
Total capital expenditures |
$ |
67 |
|
|
$ |
95 |
|
________________ |
(1) |
Direct operating expenses are shown exclusive of depreciation and
amortization and, for the Nitrogen Fertilizer Segment, turnaround
expenses and inventory valuation impacts. |
(2) |
Turnaround and capital expenditures are disclosed on an accrual
basis. |
(3) |
Renewables reflects spending on the Wynnewood renewable diesel unit
project. As of December 31, 2022, Renewables does not meet the
definition of a reportable segment as defined under Accounting
Standards Codification Topic 280. |
Non-GAAP Reconciliations
Reconciliation of Consolidated Net
Income to EBITDA and Adjusted EBITDA
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions) |
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net
income |
$ |
172 |
|
$ |
25 |
|
|
$ |
644 |
|
|
$ |
74 |
|
Interest expense, net |
|
18 |
|
|
24 |
|
|
|
85 |
|
|
|
117 |
|
Income tax expense (benefit) |
|
50 |
|
|
(7 |
) |
|
|
157 |
|
|
|
(8 |
) |
Depreciation and amortization |
|
73 |
|
|
74 |
|
|
|
288 |
|
|
|
279 |
|
EBITDA |
|
313 |
|
|
116 |
|
|
|
1,174 |
|
|
|
462 |
|
Adjustments: |
|
|
|
|
|
|
|
Revaluation of RFS liability |
|
26 |
|
|
9 |
|
|
|
135 |
|
|
|
63 |
|
Loss (gain) on marketable securities |
|
— |
|
|
1 |
|
|
|
— |
|
|
|
(81 |
) |
Unrealized loss (gain) on derivatives |
|
10 |
|
|
— |
|
|
|
5 |
|
|
|
(16 |
) |
Inventory valuation impacts, unfavorable (favorable) |
|
39 |
|
|
(17 |
) |
|
|
(24 |
) |
|
|
(127 |
) |
Call Option Lawsuits settlement |
|
— |
|
|
— |
|
|
|
79 |
|
|
|
— |
|
Adjusted EBITDA |
|
388 |
|
|
109 |
|
|
|
1,369 |
|
|
|
301 |
|
Reconciliation of Basic and Diluted
Earnings (Loss) per Share to
Adjusted Earnings (Loss) per Share
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Basic and diluted
earnings (loss) per share |
$ |
1.11 |
|
$ |
(0.14 |
) |
|
$ |
4.60 |
|
|
$ |
0.25 |
|
Adjustments: (1) |
|
|
|
|
|
|
|
Revaluation of RFS liability |
|
0.20 |
|
|
0.06 |
|
|
|
1.00 |
|
|
|
0.46 |
|
Loss (gain) on marketable securities |
|
— |
|
|
0.01 |
|
|
|
— |
|
|
|
(0.59 |
) |
Unrealized loss (gain) on derivatives |
|
0.08 |
|
|
— |
|
|
|
0.04 |
|
|
|
(0.12 |
) |
Inventory valuation impacts, unfavorable (favorable) |
|
0.29 |
|
|
(0.13 |
) |
|
|
(0.18 |
) |
|
|
(0.93 |
) |
Call Option Lawsuits settlement |
|
— |
|
|
— |
|
|
|
0.58 |
|
|
|
— |
|
Adjusted earnings (loss) per share |
$ |
1.68 |
|
$ |
(0.20 |
) |
|
$ |
6.04 |
|
|
$ |
(0.93 |
) |
________________ |
(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 EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net cash provided by
operating activities |
$ |
99 |
|
|
$ |
14 |
|
|
$ |
967 |
|
|
$ |
396 |
|
Less: |
|
|
|
|
|
|
|
Capital expenditures |
|
(46 |
) |
|
|
(36 |
) |
|
|
(191 |
) |
|
|
(224 |
) |
Capitalized turnaround expenditures |
|
(9 |
) |
|
|
(2 |
) |
|
|
(83 |
) |
|
|
(5 |
) |
Free cash flow |
$ |
44 |
|
|
$ |
(24 |
) |
|
$ |
693 |
|
|
$ |
167 |
|
Reconciliation of Petroleum
Segment Net Income (Loss) to
EBITDA and Adjusted EBITDA
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Petroleum net income
(loss) |
$ |
175 |
|
|
$ |
(19 |
) |
|
$ |
759 |
|
|
$ |
4 |
|
Interest income, net |
|
(17 |
) |
|
|
(5 |
) |
|
|
(41 |
) |
|
|
(21 |
) |
Depreciation and amortization |
|
46 |
|
|
|
51 |
|
|
|
187 |
|
|
|
203 |
|
Petroleum EBITDA |
|
204 |
|
|
|
27 |
|
|
|
905 |
|
|
|
186 |
|
Adjustments: |
|
|
|
|
|
|
|
Revaluation of RFS liability |
|
26 |
|
|
|
9 |
|
|
|
135 |
|
|
|
63 |
|
Unrealized loss (gain) on derivatives, net |
|
11 |
|
|
|
— |
|
|
|
3 |
|
|
|
(16 |
) |
Inventory valuation impact, unfavorable (favorable) (1) |
|
41 |
|
|
|
(17 |
) |
|
|
(22 |
) |
|
|
(127 |
) |
Petroleum Adjusted EBITDA |
|
282 |
|
|
|
19 |
|
|
|
1,021 |
|
|
|
106 |
|
Reconciliation of
Petroleum Segment Gross Profit
(Loss) to Refining Margin and Refining Margin
Adjusted for Inventory Valuation Impacts
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net
sales |
$ |
2,422 |
|
|
$ |
1,928 |
|
|
$ |
9,919 |
|
|
$ |
6,721 |
|
Less: |
|
|
|
|
|
|
|
Cost of materials and other |
|
(2,074 |
) |
|
|
(1,782 |
) |
|
|
(8,488 |
) |
|
|
(6,100 |
) |
Direct operating expenses (exclusive of depreciation and
amortization) |
|
(112 |
) |
|
|
(99 |
) |
|
|
(426 |
) |
|
|
(369 |
) |
Depreciation and amortization |
|
(46 |
) |
|
|
(50 |
) |
|
|
(182 |
) |
|
|
(197 |
) |
Gross profit (loss) |
|
190 |
|
|
|
(3 |
) |
|
|
823 |
|
|
|
55 |
|
Add: |
|
|
|
|
|
|
|
Direct operating expenses (exclusive of depreciation and
amortization) |
|
112 |
|
|
|
99 |
|
|
|
426 |
|
|
|
369 |
|
Depreciation and amortization |
|
46 |
|
|
|
50 |
|
|
|
182 |
|
|
|
197 |
|
Refining margin |
|
348 |
|
|
|
146 |
|
|
|
1,431 |
|
|
|
621 |
|
Inventory valuation impact,
unfavorable (favorable) (1) |
|
41 |
|
|
|
(17 |
) |
|
|
(22 |
) |
|
|
(127 |
) |
Refining margin, adjusted for inventory valuation
impacts |
$ |
389 |
|
|
$ |
129 |
|
|
$ |
1,409 |
|
|
$ |
494 |
|
________________ |
(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, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Total throughput barrels per
day |
220,689 |
|
222,257 |
|
205,288 |
|
209,084 |
Days in the period |
92 |
|
92 |
|
365 |
|
365 |
Total throughput barrels |
20,303,351 |
|
20,447,613 |
|
74,930,140 |
|
76,315,701 |
Reconciliation of
Petroleum Segment Refining Margin per
Total Throughput Barrel
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions, except per total throughput barrel) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Refining margin |
$ |
348 |
|
$ |
146 |
|
$ |
1,431 |
|
$ |
621 |
Divided by: total throughput
barrels |
|
20 |
|
|
20 |
|
|
75 |
|
|
76 |
Refining margin per total throughput barrel |
$ |
17.14 |
|
$ |
7.13 |
|
$ |
19.09 |
|
$ |
8.14 |
Reconciliation of
Petroleum Segment Refining Margin Adjusted
for Inventory Valuation Impacts per Total Throughput
Barrel
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions, except per total throughput barrel) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Refining margin, adjusted for
inventory valuation impacts |
$ |
389 |
|
$ |
129 |
|
$ |
1,409 |
|
$ |
494 |
Divided by: total throughput
barrels |
|
20 |
|
|
20 |
|
|
75 |
|
|
76 |
Refining margin, adjusted for inventory valuation impacts,
per total throughput barrel |
$ |
19.17 |
|
$ |
6.28 |
|
$ |
18.80 |
|
$ |
6.48 |
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) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Direct operating expenses
(exclusive of depreciation and amortization) |
$ |
112 |
|
$ |
99 |
|
$ |
426 |
|
$ |
369 |
Divided by: total throughput
barrels |
|
20 |
|
|
20 |
|
|
75 |
|
|
76 |
Direct operating expense per total throughput
barrel |
$ |
5.52 |
|
$ |
4.84 |
|
$ |
5.68 |
|
$ |
4.83 |
Reconciliation of Nitrogen Fertilizer
Segment Net Income to EBITDA and
Adjusted EBITDA
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in millions) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Nitrogen Fertilizer
net income |
$ |
95 |
|
$ |
61 |
|
$ |
287 |
|
$ |
78 |
Add: |
|
|
|
|
|
|
|
Interest expense, net |
|
8 |
|
|
11 |
|
|
34 |
|
|
61 |
Depreciation and amortization |
|
19 |
|
|
21 |
|
|
82 |
|
|
74 |
Nitrogen Fertilizer EBITDA and Adjusted
EBITDA |
$ |
122 |
|
$ |
93 |
|
$ |
403 |
|
$ |
213 |
Reconciliation of Total Debt and Net Debt and Finance
Lease Obligations to EBITDA Exclusive of Nitrogen
Fertilizer
(in millions) |
Year EndedDecember 31, 2022 |
Total debt and finance lease obligations
(1) |
$ |
1,591 |
|
Less: |
|
Nitrogen Fertilizer debt and finance lease obligations (1) |
$ |
(547 |
) |
Total debt and finance lease obligations exclusive of Nitrogen
Fertilizer |
|
1,044 |
|
|
|
EBITDA exclusive of Nitrogen
Fertilizer |
$ |
771 |
|
|
|
Total debt and finance
lease obligations to EBITDA exclusive of Nitrogen
Fertilizer |
|
1.35 |
|
|
|
Consolidated cash and
cash equivalents |
$ |
510 |
|
Less: |
|
Nitrogen Fertilizer cash and cash equivalents |
|
(86 |
) |
Cash and cash equivalents exclusive of Nitrogen Fertilizer |
|
424 |
|
|
|
Net debt and finance lease
obligations exclusive of Nitrogen Fertilizer (2) |
$ |
620 |
|
|
|
Net debt and finance
lease obligations to EBITDA exclusive of Nitrogen
Fertilizer (2) |
|
0.80 |
|
________________ |
(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 EndedDecember 31, |
|
|
Year EndedDecember 31, 2022
(1) |
(in millions) |
March 31,2022 |
|
June 30,2022 |
|
September 30, 2022 |
|
December 31, 2022 |
|
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
Net income |
$ |
153 |
|
$ |
239 |
|
$ |
80 |
|
|
$ |
172 |
|
$ |
644 |
Interest expense, net |
|
24 |
|
|
23 |
|
|
19 |
|
|
|
18 |
|
|
85 |
Income tax expense |
|
34 |
|
|
66 |
|
|
7 |
|
|
|
50 |
|
|
157 |
Depreciation and amortization |
|
67 |
|
|
73 |
|
|
75 |
|
|
|
73 |
|
|
288 |
EBITDA |
$ |
278 |
|
$ |
401 |
|
$ |
181 |
|
|
$ |
313 |
|
$ |
1,174 |
|
|
|
|
|
|
|
|
|
|
Nitrogen Fertilizer |
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
94 |
|
$ |
118 |
|
$ |
(20 |
) |
|
$ |
95 |
|
|
287 |
Interest expense, net |
|
10 |
|
|
8 |
|
|
8 |
|
|
|
8 |
|
|
34 |
Depreciation and amortization |
|
19 |
|
|
21 |
|
|
22 |
|
|
|
19 |
|
|
82 |
EBITDA |
$ |
123 |
|
$ |
147 |
|
$ |
10 |
|
|
$ |
122 |
|
$ |
403 |
|
|
|
|
|
|
|
|
|
|
EBITDA exclusive of
Nitrogen Fertilizer |
$ |
155 |
|
$ |
254 |
|
$ |
171 |
|
|
$ |
191 |
|
$ |
771 |
________________ |
(1) |
Due to rounding, numbers within this table may not add or equal to
totals presented. |
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