SUGAR LAND, Texas, Feb. 22, 2018 /PRNewswire/ -- CVR Energy, Inc.
(NYSE: CVI) today announced full year 2017 net income of
$234.4 million, or $2.70 per diluted share, on net sales of
$5,988.4 million, compared to net
income for full year 2016 of $24.7
million, or 28 cents per
diluted share, on net sales of $4,782.4
million. Full year 2017 adjusted EBITDA, a non-GAAP
financial measure, was $258.4 million
compared to full year 2016 adjusted EBITDA of $181.6 million.
For the fourth quarter of 2017, the company reported net income
of $200.5 million, or $2.31 per diluted share, on net sales of
$1,593.1 million, compared to net
income of $7.1 million, or
8 cents per diluted share, on net
sales of $1,353.4 million for the
fourth quarter 2016. Fourth quarter 2017 adjusted EBITDA was
$49.4 million compared to adjusted
EBITDA of $22.8 million for the same
period a year earlier.
"CVR Refining delivered solid 2017 full year and fourth quarter
results led by stronger crack spreads and record operating rates,"
said Dave Lamp, CVR Energy's chief
executive officer. "The Coffeyville,
Kansas, refinery processed more than 131,000 barrels per day
(bpd) of crude oil during the year and the Wynnewood, Oklahoma, refinery successfully
completed its major scheduled plant turnaround in the fourth
quarter.
"Low nitrogen fertilizer pricing continued to dampen CVR
Partners' 2017 full year and fourth quarter results," Lamp said.
"Fertilizer pricing has improved in the 2018 first quarter mostly
due to continued steady demand for product and lower imports into
the U.S. market.
"Looking forward, we will continue to focus on safe and reliable
operations while increasing shareholder value by implementing
self-help initiatives and developing capital improvements that will
meaningfully improve our return on capital employed," he
concluded.
Petroleum Business
The petroleum business, which is operated by CVR Refining and
includes the Coffeyville and
Wynnewood refineries, reported
fourth quarter 2017 operating income of $46.5 million on net sales of $1,516.7 million, compared to operating income of
$15.3 million on net sales of
$1,269.4 million in the fourth
quarter of 2016.
Refining margin adjusted for FIFO impact per crude oil
throughput barrel, a non-GAAP financial measure, was $11.87 in the 2017 fourth quarter, compared to
$7.32 during the same period in 2016.
Direct operating expenses (exclusive of depreciation and
amortization), including major scheduled turnaround expenses, per
crude oil throughput barrel, for the 2017 fourth quarter were
$7.78, compared to $4.96 in the fourth quarter of 2016.
Fourth quarter 2017 throughputs of crude oil and all other
feedstocks and blendstocks totaled 203,263 bpd, compared to fourth
quarter 2016 throughputs of crude oil and all other feedstocks and
blendstocks of 223,266 bpd.
Nitrogen Fertilizers Business
The fertilizer business, which is operated by CVR Partners and
includes the Coffeyville and
East Dubuque fertilizer
facilities, reported a fourth quarter 2017 operating loss of
$10.8 million on net sales of
$78.2 million, compared to operating
income of $1.0 million on net sales
of $84.9 million for the fourth
quarter of 2016.
For the fourth quarter of 2017, consolidated average realized
gate prices for UAN and ammonia were $132 per ton and $264 per ton, respectively. Consolidated average
realized gate prices for UAN and ammonia were $147 per ton and $352 per ton, respectively, for the same period
in 2016.
CVR Partners' fertilizer facilities produced a combined 199,500
tons of ammonia during the fourth quarter of 2017, of which 64,100
net tons were available for sale while the rest was upgraded to
other fertilizer products, including 306,100 tons of UAN. In the
2016 fourth quarter, the fertilizer facilities produced 207,600
tons of ammonia, of which 62,600 net tons were available for sale
while the remainder was upgraded to other fertilizer products,
including 330,700 tons of UAN.
Cash, Debt and Dividend
Consolidated cash and cash equivalents was $481.8 million at Dec. 31,
2017. Consolidated total debt was $1,166.5 million at Dec.
31, 2017. The company had no debt exclusive of CVR
Refining's and CVR Partners' debt.
CVR Energy also announced a fourth quarter 2017 cash dividend of
50 cents per share. The dividend, as
declared by CVR Energy's Board of Directors, will be paid on
March 12, 2018, to stockholders of
record on March 5, 2018. CVR Energy's
fourth quarter cash dividend brings the cumulative cash dividends
paid or declared for the 2017 full year to $2.00 per share.
Today, CVR Refining announced a 2017 fourth quarter cash
distribution of 45 cents per common
unit. CVR Partners announced that it will not pay a cash
distribution for the 2017 fourth quarter.
Fourth Quarter 2017 Earnings Conference Call
CVR Energy previously announced that it will host its fourth
quarter 2017 Earnings Conference Call for analysts and investors on
Thursday, Feb. 22, at 3 p.m. Eastern. The Earnings Conference Call may
also include discussion of company developments, forward-looking
information and other material information about business and
financial matters.
The Earnings Conference Call will be broadcast live over the
Internet at
https://www.webcaster4.com/Webcast/Page/1003/24489. For investors
or analysts who want to participate during the call, the dial-in
number is (877) 407-8291.
For those unable to listen live, the webcast will be archived
and available for 14 days at
https://www.webcaster4.com/Webcast/Page/1003/24489. A repeat of the
conference call can be accessed by dialing (877) 660-6853,
conference ID 13676234.
Forward-Looking Statements
This news release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended. You can generally identify forward-looking
statements by our use of forward-looking terminology such as
"anticipate," "believe," "continue," "could," "estimate," "expect,"
"explore," "evaluate," "intend," "may," "might," "plan,"
"potential," "predict," "seek," "should," or "will," or the
negative thereof or other variations thereon or comparable
terminology. These forward-looking statements are only
predictions and involve known and unknown risks and uncertainties,
many of which are beyond our control. For a discussion of risk
factors which may affect our results, please see the risk factors
and other disclosures included in our most recent Annual Report on
Form 10-K, any subsequently filed Quarterly Reports on
Form 10-Q and our other SEC filings. These risks may
cause our actual results, performance or achievements to differ
materially from any future results, performance or achievements
expressed or implied by these forward-looking
statements. Given these risks and uncertainties, you are
cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements included in this
press release are made only as of the date hereof. CVR Energy
disclaims any intention or obligation to update publicly or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent
required by law.
About CVR Energy, Inc.
Headquartered in Sugar Land,
Texas, CVR Energy is a diversified holding company primarily
engaged in the petroleum refining and nitrogen fertilizer
manufacturing industries through its holdings in two limited
partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy
subsidiaries serve as the general partner and own 66 percent of the
common units of CVR Refining and 34 percent of the common units of
CVR Partners.
For further information, please contact:
Investor Contact:
Jay
Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Brandee
Stephens
CVR Energy, Inc.
(281) 207-3516
MediaRelations@CVREnergy.com
CVR Energy,
Inc.
|
|
Financial and
Operational Data (all information in this release is unaudited
other than the statements of operations and cash flow data for the
year ended December 31, 2016 and the balance sheet data as of
December 31, 2016).
|
|
|
Three Months
Ended December
31,
|
|
Year
Ended December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in millions,
except per share data)
|
Consolidated
Statement of Operations Data:
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,593.1
|
|
|
$
|
1,353.4
|
|
|
$
|
5,988.4
|
|
|
$
|
4,782.4
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
Cost of materials and
other
|
1,300.7
|
|
|
1,128.1
|
|
|
4,882.9
|
|
|
3,847.5
|
|
Direct operating
expenses(1)
|
176.1
|
|
|
132.6
|
|
|
599.5
|
|
|
541.8
|
|
Depreciation and
amortization
|
51.7
|
|
|
49.9
|
|
|
203.3
|
|
|
184.5
|
|
Cost of
sales
|
1,528.5
|
|
|
1,310.6
|
|
|
5,685.7
|
|
|
4,573.8
|
|
Selling, general and
administrative expenses(1)
|
31.5
|
|
|
27.5
|
|
|
114.2
|
|
|
109.1
|
|
Depreciation and
amortization
|
3.1
|
|
|
2.4
|
|
|
10.7
|
|
|
8.6
|
|
Operating
income
|
30.0
|
|
|
12.9
|
|
|
177.8
|
|
|
90.9
|
|
Interest expense and
other financing costs
|
(27.9)
|
|
|
(27.1)
|
|
|
(110.1)
|
|
|
(83.9)
|
|
Interest
income
|
0.4
|
|
|
0.2
|
|
|
1.1
|
|
|
0.7
|
|
Loss on derivatives,
net
|
(65.0)
|
|
|
(14.6)
|
|
|
(69.8)
|
|
|
(19.4)
|
|
Gain (loss) on
extinguishment of debt
|
—
|
|
|
0.2
|
|
|
—
|
|
|
(4.9)
|
|
Other income,
net
|
0.9
|
|
|
0.3
|
|
|
1.0
|
|
|
5.7
|
|
Income (loss) before
income tax benefit
|
(61.6)
|
|
|
(28.1)
|
|
|
—
|
|
|
(10.9)
|
|
Income tax
benefit(2)
|
(234.3)
|
|
|
(22.1)
|
|
|
(216.9)
|
|
|
(19.8)
|
|
Net income
(loss)
|
172.7
|
|
|
(6.0)
|
|
|
216.9
|
|
|
8.9
|
|
Less: Net loss
attributable to noncontrolling interest
|
(27.8)
|
|
|
(13.1)
|
|
|
(17.5)
|
|
|
(15.8)
|
|
Net income
attributable to CVR Energy stockholders
|
$
|
200.5
|
|
|
$
|
7.1
|
|
|
$
|
234.4
|
|
|
$
|
24.7
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings per share
|
$
|
2.31
|
|
|
$
|
0.08
|
|
|
$
|
2.70
|
|
|
$
|
0.28
|
|
Dividends declared
per share
|
$
|
0.50
|
|
|
$
|
0.50
|
|
|
$
|
2.00
|
|
|
$
|
2.00
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA*
|
$
|
49.4
|
|
|
$
|
22.8
|
|
|
$
|
258.4
|
|
|
$
|
181.6
|
|
Adjusted net
income*
|
$
|
24.1
|
|
|
$
|
4.4
|
|
|
$
|
75.9
|
|
|
$
|
41.5
|
|
Adjusted net income
per diluted share*
|
$
|
0.28
|
|
|
$
|
0.05
|
|
|
$
|
0.87
|
|
|
$
|
0.48
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding - basic and diluted
|
86.8
|
|
|
86.8
|
|
|
86.8
|
|
|
86.8
|
|
____________________
|
* See "Use of
Non-GAAP Financial Measures" below.
|
|
(1)
|
Direct operating
expenses and selling, general and administrative expenses for the
three months and years ended December 31, 2017 and 2016 are
shown exclusive of depreciation and amortization, which amounts are
presented separately below direct operating expenses and selling,
general and administrative expenses.
|
|
|
(2)
|
The income tax
benefit for the three months and year ended December 31, 2017
was favorably impacted as a result of the Tax Cuts and Jobs Act
("TCJA") legislation that was signed into law in December 2017 with
the reduction of the federal income tax rate from 35% to 21%
beginning in 2018. The Company is required to reflect the impact of
tax law changes in its consolidated financial statements in the
period of enactment. As a result, our net deferred tax liabilities
at December 31, 2017 were remeasured to reflect the lower tax rate
that will be in effect for the years in which the deferred tax
assets and liabilities will be realized. A benefit of approximately
$200.5 million was recognized as a result of the
remeasurement.
|
|
As of December
31,
|
|
2017
|
|
2016
|
|
|
|
(audited)
|
|
(in
millions)
|
Balance Sheet
Data:
|
|
|
|
Cash and cash
equivalents
|
$
|
481.8
|
|
|
$
|
735.8
|
|
Working
capital
|
550.5
|
|
|
749.6
|
|
Total
assets
|
3,806.7
|
|
|
4,050.2
|
|
Total debt, including
current portion
|
1,166.5
|
|
|
1,164.6
|
|
Total CVR
stockholders' equity
|
918.8
|
|
|
858.1
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in
millions)
|
Cash Flow
Data:
|
|
|
|
|
|
|
|
Net cash flow provided
by (used in):
|
|
|
|
|
|
|
|
Operating
activities
|
$
|
(159.9)
|
|
|
$
|
48.6
|
|
|
$
|
166.9
|
|
|
$
|
267.5
|
|
Investing
activities
|
(114.6)
|
|
|
(29.4)
|
|
|
(195.0)
|
|
|
(201.4)
|
|
Financing
activities
|
(92.8)
|
|
|
(46.0)
|
|
|
(225.9)
|
|
|
(95.4)
|
|
Net cash
flow
|
$
|
(367.3)
|
|
|
$
|
(26.8)
|
|
|
$
|
(254.0)
|
|
|
$
|
(29.3)
|
|
Segment Information
Our operations are organized into two reportable segments,
Petroleum and Nitrogen Fertilizer. Our operations that are not
included in the Petroleum and Nitrogen Fertilizer segments are
included in the Corporate and Other segment (along with elimination
of intersegment transactions). The Petroleum segment is operated by
CVR Refining, LP ("CVR Refining"), in which we own a majority
interest as well as serve as the general partner. The Petroleum
segment includes the operations of the Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with the
crude oil gathering and pipeline systems. Detailed operating
results for the Petroleum segment for the quarter and year ended
December 31, 2017 are included in CVR
Refining's press release dated February 22, 2018. The Nitrogen
Fertilizer segment is operated by CVR Partners, LP ("CVR
Partners"), in which we own approximately 34% of the common units
as of December 31, 2017 and serve as
the general partner. On April 1,
2016, CVR Partners completed the merger (the "East Dubuque
Merger") whereby CVR Partners acquired a nitrogen fertilizer
manufacturing facility located in East
Dubuque, Illinois (the "East Dubuque Facility"). The
Nitrogen Fertilizer segment consists of a nitrogen fertilizer
manufacturing facility located in Coffeyville, Kansas, and the East Dubuque
Facility beginning on April 1, 2016,
the date of the closing of the acquisition. Detailed operating
results for the Nitrogen Fertilizer segment for the quarter and
year ended December 31, 2017 are
included in CVR Partners' press release dated February 22,
2018.
|
Petroleum
(CVR Refining)
|
|
Nitrogen
Fertilizer
(CVR Partners)
|
|
Corporate
and Other
|
|
Consolidated
|
|
|
|
|
|
(in
millions)
|
Three Months Ended
December 31, 2017
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,516.7
|
|
|
$
|
78.2
|
|
|
$
|
(1.8)
|
|
|
$
|
1,593.1
|
|
Cost of materials and
other
|
1,281.0
|
|
|
21.6
|
|
|
(1.9)
|
|
|
1,300.7
|
|
Direct operating
expenses(1)
|
91.5
|
|
|
41.5
|
|
|
0.1
|
|
|
133.1
|
|
Major scheduled
turnaround expenses
|
43.0
|
|
|
—
|
|
|
—
|
|
|
43.0
|
|
Selling, general and
administrative
|
21.1
|
|
|
6.8
|
|
|
3.6
|
|
|
31.5
|
|
Depreciation and
amortization
|
33.6
|
|
|
19.1
|
|
|
2.1
|
|
|
54.8
|
|
Operating income
(loss)
|
$
|
46.5
|
|
|
$
|
(10.8)
|
|
|
$
|
(5.7)
|
|
|
$
|
30.0
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
|
33.6
|
|
|
$
|
3.1
|
|
|
$
|
2.0
|
|
|
$
|
38.7
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2017
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
5,664.2
|
|
|
$
|
330.8
|
|
|
$
|
(6.6)
|
|
|
$
|
5,988.4
|
|
Cost of materials and
other
|
4,804.7
|
|
|
84.9
|
|
|
(6.7)
|
|
|
4,882.9
|
|
Direct operating
expenses(1)
|
363.4
|
|
|
152.9
|
|
|
0.2
|
|
|
516.5
|
|
Major scheduled
turnaround expenses
|
80.4
|
|
|
2.6
|
|
|
—
|
|
|
83.0
|
|
Selling, general and
administrative
|
78.8
|
|
|
25.6
|
|
|
9.8
|
|
|
114.2
|
|
Depreciation and
amortization
|
133.1
|
|
|
74.0
|
|
|
6.9
|
|
|
214.0
|
|
Operating income
(loss)
|
$
|
203.8
|
|
|
$
|
(9.2)
|
|
|
$
|
(16.8)
|
|
|
$
|
177.8
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
|
99.7
|
|
|
$
|
14.5
|
|
|
$
|
4.4
|
|
|
$
|
118.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Petroleum
(CVR Refining)
|
|
Nitrogen
Fertilizer
(CVR Partners)
|
|
Corporate
and Other
|
|
Consolidated
|
|
|
|
|
|
(in
millions)
|
Three Months Ended
December 31, 2016
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,269.4
|
|
|
$
|
84.9
|
|
|
$
|
(0.9)
|
|
|
$
|
1,353.4
|
|
Cost of materials and
other
|
1,107.5
|
|
|
21.5
|
|
|
(0.9)
|
|
|
1,128.1
|
|
Direct operating
expenses(1)
|
94.7
|
|
|
37.9
|
|
|
—
|
|
|
132.6
|
|
Major scheduled
turnaround expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Selling, general and
administrative
|
18.5
|
|
|
7.3
|
|
|
1.7
|
|
|
27.5
|
|
Depreciation and
amortization
|
33.4
|
|
|
17.2
|
|
|
1.7
|
|
|
52.3
|
|
Operating income
(loss)
|
$
|
15.3
|
|
|
$
|
1.0
|
|
|
$
|
(3.4)
|
|
|
$
|
12.9
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
|
18.9
|
|
|
$
|
5.9
|
|
|
$
|
3.2
|
|
|
$
|
28.0
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2016
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
4,431.3
|
|
|
$
|
356.3
|
|
|
$
|
(5.2)
|
|
|
$
|
4,782.4
|
|
Cost of materials and
other
|
3,759.2
|
|
|
93.7
|
|
|
(5.4)
|
|
|
3,847.5
|
|
Direct operating
expenses(1)
|
361.9
|
|
|
141.7
|
|
|
0.1
|
|
|
503.7
|
|
Major scheduled
turnaround expenses
|
31.5
|
|
|
6.6
|
|
|
—
|
|
|
38.1
|
|
Selling, general and
administrative
|
71.9
|
|
|
29.3
|
|
|
7.9
|
|
|
109.1
|
|
Depreciation and
amortization
|
129.0
|
|
|
58.2
|
|
|
5.9
|
|
|
193.1
|
|
Operating income
(loss)
|
$
|
77.8
|
|
|
$
|
26.8
|
|
|
$
|
(13.7)
|
|
|
$
|
90.9
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
|
102.3
|
|
|
$
|
23.2
|
|
|
$
|
7.2
|
|
|
$
|
132.7
|
|
____________________
|
(1) Excluding
turnaround expenses.
|
|
|
Petroleum
(CVR Refining)
|
|
Nitrogen
Fertilizer
(CVR Partners)
|
|
Corporate
and Other
|
|
Consolidated
|
|
|
|
|
|
|
|
(in
millions)
|
December 31,
2017
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
173.8
|
|
|
$
|
49.2
|
|
|
$
|
258.8
|
|
|
$
|
481.8
|
|
Total
assets
|
|
2,269.9
|
|
|
1,234.3
|
|
|
302.5
|
|
|
3,806.7
|
|
Total debt, including
current portion
|
|
540.6
|
|
|
625.9
|
|
|
—
|
|
|
1,166.5
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
314.1
|
|
|
$
|
55.6
|
|
|
$
|
366.1
|
|
|
$
|
735.8
|
|
Total
assets
|
|
2,331.9
|
|
|
1,312.2
|
|
|
406.1
|
|
|
4,050.2
|
|
Total debt, including
current portion
|
|
541.5
|
|
|
623.1
|
|
|
—
|
|
|
1,164.6
|
|
Petroleum Segment Operating Data
The following tables set forth information about our
consolidated Petroleum segment operated by CVR Refining, of which
we own a majority interest and serve as the general partner, and
the Coffeyville and Wynnewood refineries. Reconciliations of
certain non-GAAP financial measures are provided under "Use of
Non-GAAP Financial Measures" below. Additional discussion of
operating results for the Petroleum segment for the quarter and
year ended December 31, 2017 are
included in CVR Refining's press release dated February 22,
2018.
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in
millions)
|
Petroleum Segment
Summary Financial Results:
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,516.7
|
|
|
$
|
1,269.4
|
|
|
$
|
5,664.2
|
|
|
$
|
4,431.3
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
Cost of materials and
other
|
1,281.0
|
|
|
1,107.5
|
|
|
4,804.7
|
|
|
3,759.2
|
|
Direct operating
expenses(1)
|
91.5
|
|
|
94.7
|
|
|
363.4
|
|
|
361.9
|
|
Major scheduled
turnaround expenses
|
43.0
|
|
|
—
|
|
|
80.4
|
|
|
31.5
|
|
Depreciation and
amortization
|
32.5
|
|
|
32.6
|
|
|
129.3
|
|
|
126.3
|
|
Cost of
sales
|
1,448.0
|
|
|
1,234.8
|
|
|
5,377.8
|
|
|
4,278.9
|
|
Selling, general and
administrative expenses(1)
|
21.1
|
|
|
18.5
|
|
|
78.8
|
|
|
71.9
|
|
Depreciation and
amortization
|
1.1
|
|
|
0.8
|
|
|
3.8
|
|
|
2.7
|
|
Operating
income
|
46.5
|
|
|
15.3
|
|
|
203.8
|
|
|
77.8
|
|
Interest expense and
other financing costs
|
(12.0)
|
|
|
(11.7)
|
|
|
(47.2)
|
|
|
(43.4)
|
|
Interest
income
|
0.1
|
|
|
0.1
|
|
|
0.5
|
|
|
0.1
|
|
Loss on derivatives,
net
|
(65.0)
|
|
|
(14.6)
|
|
|
(69.8)
|
|
|
(19.4)
|
|
Other income,
net
|
1.4
|
|
|
0.2
|
|
|
1.5
|
|
|
0.2
|
|
Income (loss) before
income tax expense
|
(29.0)
|
|
|
(10.7)
|
|
|
88.8
|
|
|
15.3
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income
(loss)
|
$
|
(29.0)
|
|
|
$
|
(10.7)
|
|
|
$
|
88.8
|
|
|
$
|
15.3
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
$
|
68.7
|
|
|
$
|
34.6
|
|
|
$
|
286.4
|
|
|
$
|
152.4
|
|
Refining
margin*
|
$
|
235.7
|
|
|
$
|
161.9
|
|
|
$
|
859.5
|
|
|
$
|
672.1
|
|
Refining margin
adjusted for FIFO impact*
|
$
|
205.3
|
|
|
$
|
139.5
|
|
|
$
|
829.9
|
|
|
$
|
620.0
|
|
Adjusted Petroleum
EBITDA*
|
$
|
76.4
|
|
|
$
|
27.7
|
|
|
$
|
372.6
|
|
|
$
|
222.8
|
|
____________________
|
* See "Use of
Non-GAAP Financial Measures" below.
|
|
(1)
|
Direct operating
expenses for the three months and years ended December 31,
2017 and 2016 are shown exclusive of depreciation and amortization
and major scheduled turnaround expenses, which amounts are
presented separately below direct operating expenses. Selling,
general and administrative expense for the three months and years
ended December 31, 2017 and 2016 are shown exclusive of
depreciation and amortization, which amounts are presented
separately below selling, general and administrative
expenses.
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(dollars per
barrel)
|
Petroleum Segment
Key Operating Statistics:
|
|
|
|
|
|
|
|
Per crude oil
throughput barrel:
|
|
|
|
|
|
|
|
Gross
profit
|
$
|
3.97
|
|
|
$
|
1.81
|
|
|
$
|
3.83
|
|
|
$
|
2.10
|
|
Refining
margin*
|
13.63
|
|
|
8.49
|
|
|
11.50
|
|
|
9.27
|
|
FIFO impact,
favorable
|
(1.76)
|
|
|
(1.17)
|
|
|
(0.40)
|
|
|
(0.72)
|
|
Refining margin
adjusted for FIFO impact*
|
11.87
|
|
|
7.32
|
|
|
11.10
|
|
|
8.55
|
|
Direct operating
expenses and major scheduled turnaround expenses
|
7.78
|
|
|
4.96
|
|
|
5.94
|
|
|
5.43
|
|
Direct operating
expenses excluding major scheduled turnaround expenses
|
5.29
|
|
|
4.96
|
|
|
4.86
|
|
|
4.99
|
|
Direct operating
expenses and major scheduled turnaround expenses per barrel
sold
|
7.06
|
|
|
4.64
|
|
|
5.55
|
|
|
5.08
|
|
Direct operating
expenses excluding major scheduled turnaround expenses per barrel
sold
|
$
|
4.80
|
|
|
$
|
4.64
|
|
|
$
|
4.55
|
|
|
$
|
4.67
|
|
Barrels sold (barrels
per day)
|
207,112
|
|
|
221,921
|
|
|
218,912
|
|
|
211,643
|
|
____________________
|
* See "Use of
Non-GAAP Financial Measures" below.
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
%
|
|
|
|
%
|
|
|
|
%
|
|
|
|
%
|
Petroleum Segment
Summary Refining Throughput and Production Data
(bpd):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweet
|
182,339
|
|
|
89.7
|
|
|
185,154
|
|
|
82.9
|
|
|
194,613
|
|
|
89.8
|
|
|
177,256
|
|
|
84.8
|
|
Medium
|
—
|
|
|
—
|
|
|
3,160
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
2,525
|
|
|
1.2
|
|
Heavy sour
|
5,657
|
|
|
2.8
|
|
|
19,108
|
|
|
8.6
|
|
|
10,135
|
|
|
4.7
|
|
|
18,261
|
|
|
8.7
|
|
Total crude oil
throughput
|
187,996
|
|
|
92.5
|
|
|
207,422
|
|
|
92.9
|
|
|
204,748
|
|
|
94.5
|
|
|
198,042
|
|
|
94.7
|
|
All other feedstocks
and blendstocks
|
15,267
|
|
|
7.5
|
|
|
15,844
|
|
|
7.1
|
|
|
12,032
|
|
|
5.5
|
|
|
11,077
|
|
|
5.3
|
|
Total
throughput
|
203,263
|
|
|
100.0
|
|
|
223,266
|
|
|
100.0
|
|
|
216,780
|
|
|
100.0
|
|
|
209,119
|
|
|
100.0
|
|
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
104,169
|
|
|
50.8
|
|
|
114,682
|
|
|
51.1
|
|
|
110,226
|
|
|
50.7
|
|
|
108,762
|
|
|
51.9
|
|
Distillate
|
85,550
|
|
|
41.8
|
|
|
91,021
|
|
|
40.5
|
|
|
90,409
|
|
|
41.6
|
|
|
85,092
|
|
|
40.6
|
|
Other (excluding
internally produced fuel)
|
15,128
|
|
|
7.4
|
|
|
18,782
|
|
|
8.4
|
|
|
16,818
|
|
|
7.7
|
|
|
15,751
|
|
|
7.5
|
|
Total refining
production (excluding internally produced fuel)
|
204,847
|
|
|
100.0
|
|
|
224,485
|
|
|
100.0
|
|
|
217,453
|
|
|
100.0
|
|
|
209,605
|
|
|
100.0
|
|
Product price
(dollars per gallon):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
$
|
1.69
|
|
|
|
|
$
|
1.42
|
|
|
|
|
$
|
1.59
|
|
|
|
|
$
|
1.34
|
|
|
|
Distillate
|
1.89
|
|
|
|
|
1.52
|
|
|
|
|
1.66
|
|
|
|
|
1.36
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Market Indicators
(dollars per barrel):
|
|
|
|
|
|
|
|
West Texas
Intermediate (WTI) NYMEX
|
$
|
55.30
|
|
|
$
|
49.29
|
|
|
$
|
50.85
|
|
|
$
|
43.47
|
|
Crude Oil
Differentials:
|
|
|
|
|
|
|
|
WTI less WTS
(light/medium sour)
|
0.42
|
|
|
0.92
|
|
|
0.97
|
|
|
0.85
|
|
WTI less WCS (heavy
sour)
|
16.61
|
|
|
15.04
|
|
|
12.69
|
|
|
13.95
|
|
NYMEX Crack
Spreads:
|
|
|
|
|
|
|
|
Gasoline
|
16.63
|
|
|
12.96
|
|
|
17.46
|
|
|
15.42
|
|
Heating Oil
|
23.96
|
|
|
16.45
|
|
|
18.93
|
|
|
13.89
|
|
NYMEX 2-1-1 Crack
Spread
|
20.29
|
|
|
14.70
|
|
|
18.19
|
|
|
14.66
|
|
PADD II Group 3
Product Basis:
|
|
|
|
|
|
|
|
Gasoline
|
(0.14)
|
|
|
(3.70)
|
|
|
(1.83)
|
|
|
(3.62)
|
|
Ultra Low Sulfur
Diesel
|
(0.53)
|
|
|
(2.55)
|
|
|
(0.50)
|
|
|
(0.92)
|
|
PADD II Group 3
Product Crack Spread:
|
|
|
|
|
|
|
|
Gasoline
|
16.49
|
|
|
9.28
|
|
|
15.63
|
|
|
11.82
|
|
Ultra Low Sulfur
Diesel
|
23.42
|
|
|
13.91
|
|
|
18.42
|
|
|
12.96
|
|
PADD II Group 3
2-1-1
|
19.96
|
|
|
11.60
|
|
|
17.03
|
|
|
12.39
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in millions,
except operating statistics)
|
Coffeyville
Refinery Financial Results:
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,117.3
|
|
|
$
|
854.7
|
|
|
$
|
3,867.8
|
|
|
$
|
2,948.9
|
|
Cost of materials and
other
|
936.2
|
|
|
750.6
|
|
|
3,285.8
|
|
|
2,513.9
|
|
Direct operating
expenses(1)
|
54.6
|
|
|
52.0
|
|
|
209.5
|
|
|
196.4
|
|
Major scheduled
turnaround expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
31.5
|
|
Depreciation and
amortization
|
17.7
|
|
|
18.4
|
|
|
71.5
|
|
|
69.7
|
|
Gross
profit
|
108.8
|
|
|
33.7
|
|
|
301.0
|
|
|
137.4
|
|
Add:
|
|
|
|
|
|
|
|
Direct operating
expenses(1)
|
54.6
|
|
|
52.0
|
|
|
209.5
|
|
|
196.4
|
|
Major scheduled
turnaround expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
31.5
|
|
Depreciation and
amortization
|
17.7
|
|
|
18.4
|
|
|
71.5
|
|
|
69.7
|
|
Refining
margin*
|
181.1
|
|
|
104.1
|
|
|
582.0
|
|
|
435.0
|
|
FIFO impact,
favorable
|
(21.7)
|
|
|
(15.4)
|
|
|
(20.2)
|
|
|
(37.8)
|
|
Refining margin
adjusted for FIFO impact*
|
$
|
159.4
|
|
|
$
|
88.7
|
|
|
$
|
561.8
|
|
|
$
|
397.2
|
|
|
|
|
|
|
|
|
|
Coffeyville
Refinery Key Operating Statistics:
|
|
|
|
|
|
|
|
Per crude oil
throughput barrel:
|
|
|
|
|
|
|
|
Gross
profit
|
$
|
8.87
|
|
|
$
|
2.76
|
|
|
$
|
6.27
|
|
|
$
|
3.03
|
|
Refining
margin*
|
14.77
|
|
|
8.55
|
|
|
12.12
|
|
|
9.57
|
|
FIFO impact,
favorable
|
(1.77)
|
|
|
(1.26)
|
|
|
(0.42)
|
|
|
(0.83)
|
|
Refining margin
adjusted for FIFO impact*
|
13.00
|
|
|
7.29
|
|
|
11.70
|
|
|
8.74
|
|
Direct operating
expenses and major scheduled turnaround expenses
|
4.46
|
|
|
4.27
|
|
|
4.36
|
|
|
5.02
|
|
Direct operating
expenses excluding major scheduled turnaround expenses
|
4.46
|
|
|
4.27
|
|
|
4.36
|
|
|
4.32
|
|
Direct operating
expenses and major scheduled turnaround expenses per barrel
sold
|
4.02
|
|
|
3.84
|
|
|
4.00
|
|
|
4.54
|
|
Direct operating
expenses excluding major scheduled turnaround expenses per barrel
sold
|
$
|
4.02
|
|
|
$
|
3.84
|
|
|
$
|
4.00
|
|
|
$
|
3.92
|
|
Barrels sold (barrels
per day)
|
147,633
|
|
|
146,930
|
|
|
143,598
|
|
|
137,047
|
|
____________________
|
* See "Use of
Non-GAAP Financial Measures" below.
|
|
(1)
|
Direct operating
expenses for the three months and years ended December 31,
2017 and 2016 are shown exclusive of depreciation and amortization
and major scheduled turnaround expenses, which amounts are
presented separately below direct operating expenses.
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
%
|
|
|
|
%
|
|
|
|
%
|
|
|
|
%
|
Coffeyville
Refinery Throughput and Production Data (bpd):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweet
|
127,586
|
|
|
87.9
|
|
|
113,243
|
|
|
78.4
|
|
|
121,434
|
|
|
86.4
|
|
|
104,679
|
|
|
78.9
|
|
Medium
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,229
|
|
|
0.9
|
|
Heavy sour
|
5,657
|
|
|
3.9
|
|
|
19,108
|
|
|
13.2
|
|
|
10,135
|
|
|
7.2
|
|
|
18,261
|
|
|
13.8
|
|
Total crude oil
throughput
|
133,243
|
|
|
91.8
|
|
|
132,351
|
|
|
91.6
|
|
|
131,569
|
|
|
93.6
|
|
|
124,169
|
|
|
93.6
|
|
All other feedstocks
and blendstocks
|
11,834
|
|
|
8.2
|
|
|
12,206
|
|
|
8.4
|
|
|
9,058
|
|
|
6.4
|
|
|
8,453
|
|
|
6.4
|
|
Total
throughput
|
145,077
|
|
|
100.0
|
|
|
144,557
|
|
|
100.0
|
|
|
140,627
|
|
|
100.0
|
|
|
132,622
|
|
|
100.0
|
|
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
75,531
|
|
|
51.2
|
|
|
75,273
|
|
|
51.1
|
|
|
71,915
|
|
|
50.4
|
|
|
69,303
|
|
|
51.4
|
|
Distillate
|
61,568
|
|
|
41.7
|
|
|
60,550
|
|
|
41.1
|
|
|
59,593
|
|
|
41.7
|
|
|
55,790
|
|
|
41.4
|
|
Other (excluding
internally produced fuel)
|
10,490
|
|
|
7.1
|
|
|
11,446
|
|
|
7.8
|
|
|
11,335
|
|
|
7.9
|
|
|
9,756
|
|
|
7.2
|
|
Total refining
production (excluding internally produced fuel)
|
147,589
|
|
|
100.0
|
|
|
147,269
|
|
|
100.0
|
|
|
142,843
|
|
|
100.0
|
|
|
134,849
|
|
|
100.0
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in millions,
except operating statistics)
|
Wynnewood Refinery
Financial Results:
|
|
|
|
|
|
|
|
Net sales
|
$
|
398.3
|
|
|
$
|
413.6
|
|
|
$
|
1,792.1
|
|
|
$
|
1,478.0
|
|
Cost of materials and
other
|
345.0
|
|
|
356.9
|
|
|
1,519.7
|
|
|
1,245.4
|
|
Direct operating
expenses(1)
|
36.9
|
|
|
42.7
|
|
|
153.9
|
|
|
165.5
|
|
Major scheduled
turnaround expenses
|
43.0
|
|
|
—
|
|
|
80.4
|
|
|
—
|
|
Depreciation and
amortization
|
13.2
|
|
|
12.8
|
|
|
51.7
|
|
|
50.7
|
|
Gross profit
(loss)
|
(39.8)
|
|
|
1.2
|
|
|
(13.6)
|
|
|
16.4
|
|
Add:
|
|
|
|
|
|
|
|
Direct operating
expenses(1)
|
36.9
|
|
|
42.7
|
|
|
153.9
|
|
|
165.5
|
|
Major scheduled
turnaround expenses
|
43.0
|
|
|
—
|
|
|
80.4
|
|
|
—
|
|
Depreciation and
amortization
|
13.2
|
|
|
12.8
|
|
|
51.7
|
|
|
50.7
|
|
Refining
margin*
|
53.3
|
|
|
56.7
|
|
|
272.4
|
|
|
232.6
|
|
FIFO impact,
favorable
|
(8.7)
|
|
|
(7.0)
|
|
|
(9.4)
|
|
|
(14.2)
|
|
Refining margin
adjusted for FIFO impact*
|
$
|
44.6
|
|
|
$
|
49.7
|
|
|
$
|
263.0
|
|
|
$
|
218.4
|
|
|
|
|
|
|
|
|
|
Wynnewood Refinery
Key Operating Statistics:
|
|
|
|
|
|
|
|
Per crude oil
throughput barrel:
|
|
|
|
|
|
|
|
Gross profit
(loss)
|
$
|
(7.90)
|
|
|
$
|
0.16
|
|
|
$
|
(0.51)
|
|
|
$
|
0.61
|
|
Refining
margin*
|
10.58
|
|
|
8.20
|
|
|
10.20
|
|
|
8.60
|
|
FIFO impact,
favorable
|
(1.73)
|
|
|
(1.01)
|
|
|
(0.35)
|
|
|
(0.53)
|
|
Refining margin
adjusted for FIFO impact*
|
8.85
|
|
|
7.19
|
|
|
9.85
|
|
|
8.07
|
|
Direct operating
expenses and major scheduled turnaround expenses
|
15.86
|
|
|
6.19
|
|
|
8.77
|
|
|
6.12
|
|
Direct operating
expenses excluding major scheduled turnaround expenses
|
7.32
|
|
|
6.19
|
|
|
5.76
|
|
|
6.12
|
|
Direct operating
expenses and major scheduled turnaround expenses per barrel
sold
|
14.60
|
|
|
6.20
|
|
|
8.52
|
|
|
6.06
|
|
Direct operating
expenses excluding major scheduled turnaround expenses per barrel
sold
|
$
|
6.74
|
|
|
$
|
6.20
|
|
|
$
|
5.60
|
|
|
$
|
6.06
|
|
Barrels sold (barrels
per day)
|
59,479
|
|
|
74,991
|
|
|
75,314
|
|
|
74,596
|
|
____________________
|
* See "Use of
Non-GAAP Financial Measures" below.
|
|
(1)
|
Direct operating
expenses for the three months and years ended December 31,
2017 and 2016 are shown exclusive of depreciation and amortization
and major scheduled turnaround expenses, which amounts are
presented separately below direct operating expenses.
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
%
|
|
|
|
%
|
|
|
|
%
|
|
|
|
%
|
Wynnewood Refinery
Throughput and Production Data (bpd):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweet
|
54,753
|
|
|
94.1
|
|
|
71,911
|
|
|
91.4
|
|
|
73,179
|
|
|
96.1
|
|
|
72,577
|
|
|
94.9
|
|
Medium
|
—
|
|
|
—
|
|
|
3,160
|
|
|
4.0
|
|
|
—
|
|
|
—
|
|
|
1,296
|
|
|
1.7
|
|
Heavy sour
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total crude oil
throughput
|
54,753
|
|
|
94.1
|
|
|
75,071
|
|
|
95.4
|
|
|
73,179
|
|
|
96.1
|
|
|
73,873
|
|
|
96.6
|
|
All other feedstocks
and blendstocks
|
3,433
|
|
|
5.9
|
|
|
3,638
|
|
|
4.6
|
|
|
2,974
|
|
|
3.9
|
|
|
2,624
|
|
|
3.4
|
|
Total
throughput
|
58,186
|
|
|
100.0
|
|
|
78,709
|
|
|
100.0
|
|
|
76,153
|
|
|
100.0
|
|
|
76,497
|
|
|
100.0
|
|
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
28,638
|
|
|
50.0
|
|
|
39,409
|
|
|
51.0
|
|
|
38,311
|
|
|
51.3
|
|
|
39,459
|
|
|
52.8
|
|
Distillate
|
23,982
|
|
|
41.9
|
|
|
30,471
|
|
|
39.5
|
|
|
30,816
|
|
|
41.3
|
|
|
29,302
|
|
|
39.2
|
|
Other (excluding
internally produced fuel)
|
4,638
|
|
|
8.1
|
|
|
7,336
|
|
|
9.5
|
|
|
5,483
|
|
|
7.4
|
|
|
5,995
|
|
|
8.0
|
|
Total refining
production (excluding internally produced fuel)
|
57,258
|
|
|
100.0
|
|
|
77,216
|
|
|
100.0
|
|
|
74,610
|
|
|
100.0
|
|
|
74,756
|
|
|
100.0
|
|
Nitrogen Fertilizer Segment Operating Data
The following tables set forth information about the Nitrogen
Fertilizer segment operated by CVR Partners, of which we own
approximately 34% of the common units as of December 31, 2017 and serve as the general
partner. The financial and operational data include East Dubuque
Facility, beginning on April 1, 2016,
the date of the closing of the acquisition. Reconciliations of
certain non-GAAP financial measures are provided under "Use of
Non-GAAP Financial Measures" below. Additional discussion of
operating results for the Nitrogen Fertilizer segment for the
quarter and year ended December 31,
2017 are included in CVR Partners' press release dated
February 22, 2018.
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in
millions)
|
Nitrogen
Fertilizer Segment Business Financial Results:
|
|
|
|
|
|
|
|
Net sales
|
$
|
78.2
|
|
|
$
|
84.9
|
|
|
$
|
330.8
|
|
|
$
|
356.3
|
|
Cost of materials and
other
|
21.6
|
|
|
21.5
|
|
|
84.9
|
|
|
93.7
|
|
Direct operating
expenses(1)
|
41.5
|
|
|
37.9
|
|
|
152.9
|
|
|
141.7
|
|
Major scheduled
turnaround expenses
|
—
|
|
|
—
|
|
|
2.6
|
|
|
6.6
|
|
Depreciation and
amortization
|
19.1
|
|
|
17.2
|
|
|
74.0
|
|
|
58.2
|
|
Cost of
sales
|
82.2
|
|
|
76.6
|
|
|
314.4
|
|
|
300.2
|
|
Selling, general and
administrative expenses
|
6.8
|
|
|
7.3
|
|
|
25.6
|
|
|
29.3
|
|
Operating income
(loss)
|
(10.8)
|
|
|
1.0
|
|
|
(9.2)
|
|
|
26.8
|
|
Interest expense and
other financing costs
|
(15.8)
|
|
|
(15.8)
|
|
|
(62.9)
|
|
|
(48.6)
|
|
Gain (loss) on
extinguishment of debt
|
—
|
|
|
0.2
|
|
|
—
|
|
|
(4.9)
|
|
Other income (loss),
net
|
(0.6)
|
|
|
0.1
|
|
|
(0.5)
|
|
|
0.1
|
|
Loss before income tax
expense
|
(27.2)
|
|
|
(14.5)
|
|
|
(72.6)
|
|
|
(26.6)
|
|
Income tax
expense
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
0.3
|
|
Net loss
|
$
|
(27.4)
|
|
|
$
|
(14.5)
|
|
|
$
|
(72.8)
|
|
|
$
|
(26.9)
|
|
|
|
|
|
|
|
|
|
Adjusted Nitrogen
Fertilizer EBITDA*
|
$
|
7.7
|
|
|
$
|
18.3
|
|
|
$
|
65.8
|
|
|
$
|
92.7
|
|
____________________
|
* See Use of
Non-GAAP Financial Measures below.
|
|
(1)
|
Direct operating
expenses for the three months and years ended December 31,
2017 and 2016 are shown exclusive of depreciation and amortization
and major scheduled turnaround expenses, which amounts are
presented separately below direct operating expenses.
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Nitrogen
Fertilizer Segment Key Operating Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated sales
(thousand tons):
|
|
|
|
|
|
|
|
Ammonia
|
84.3
|
|
|
55.7
|
|
|
286.1
|
|
|
201.4
|
|
UAN
|
302.9
|
|
|
335.1
|
|
|
1,254.5
|
|
|
1,237.5
|
|
|
|
|
|
|
|
|
|
Consolidated product
pricing at gate (dollars per ton)(1):
|
|
|
|
|
|
|
|
Ammonia
|
$
|
264
|
|
|
$
|
352
|
|
|
$
|
280
|
|
|
$
|
376
|
|
UAN
|
$
|
132
|
|
|
$
|
147
|
|
|
$
|
152
|
|
|
$
|
177
|
|
|
|
|
|
|
|
|
|
Consolidated
production volume (thousand tons):
|
|
|
|
|
|
|
|
Ammonia (gross
produced)(2)
|
199.5
|
|
|
207.6
|
|
|
814.7
|
|
|
693.5
|
|
Ammonia (net available
for sale)(2)
|
64.1
|
|
|
62.6
|
|
|
267.8
|
|
|
183.6
|
|
UAN
|
306.1
|
|
|
330.7
|
|
|
1,268.4
|
|
|
1,192.6
|
|
|
|
|
|
|
|
|
|
Feedstock:
|
|
|
|
|
|
|
|
Petroleum coke used in
production (thousand tons)
|
116.5
|
|
|
129.4
|
|
|
487.5
|
|
|
513.7
|
|
Petroleum coke used in
production (dollars per ton)
|
$
|
13
|
|
|
$
|
18
|
|
|
$
|
17
|
|
|
$
|
15
|
|
Natural gas used in
production (thousands of MMBtus)(3)
|
1,838.8
|
|
|
2,124.3
|
|
|
7,619.5
|
|
|
5,596.0
|
|
Natural gas used in
production (dollars per MMBtu)(3) (4)
|
$
|
3.24
|
|
|
$
|
3.30
|
|
|
$
|
3.24
|
|
|
$
|
2.96
|
|
Natural gas in cost of
materials and other (thousands of MMBtus)(3)
|
2,153.2
|
|
|
1,876.2
|
|
|
8,051.5
|
|
|
4,618.7
|
|
Natural gas in cost of
materials and other (dollars per MMBtus)(3) (4)
|
$
|
3.17
|
|
|
$
|
3.15
|
|
|
$
|
3.26
|
|
|
$
|
2.87
|
|
|
|
|
|
|
|
|
|
Coffeyville Facility
on-stream factor(5):
|
|
|
|
|
|
|
|
Gasification
|
100.0
|
%
|
|
96.1
|
%
|
|
98.5
|
%
|
|
96.9
|
%
|
Ammonia
|
99.5
|
%
|
|
91.1
|
%
|
|
97.4
|
%
|
|
94.9
|
%
|
UAN
|
88.8
|
%
|
|
93.1
|
%
|
|
91.7
|
%
|
|
93.1
|
%
|
|
|
|
|
|
|
|
|
East Dubuque Facility
on-stream factors(5):
|
|
|
|
|
|
|
|
Ammonia
|
86.3
|
%
|
|
99.7
|
%
|
|
90.4
|
%
|
|
87.7
|
%
|
UAN
|
86.8
|
%
|
|
99.8
|
%
|
|
90.3
|
%
|
|
87.3
|
%
|
|
|
|
|
|
|
|
|
Market
Indicators:
|
|
|
|
|
|
|
|
Ammonia — Southern
Plains (dollars per ton)
|
$
|
315
|
|
|
$
|
313
|
|
|
$
|
314
|
|
|
$
|
356
|
|
Ammonia — Corn belt
(dollars per ton)
|
$
|
340
|
|
|
$
|
360
|
|
|
$
|
358
|
|
|
$
|
416
|
|
UAN — Corn belt
(dollars per ton)
|
$
|
190
|
|
|
$
|
175
|
|
|
$
|
192
|
|
|
$
|
208
|
|
Natural gas NYMEX
(dollars per MMBtu)
|
$
|
2.92
|
|
|
$
|
3.18
|
|
|
$
|
3.02
|
|
|
$
|
2.55
|
|
____________________
|
(1)
|
Product pricing at
gate represents net sales less freight revenue divided by product
sales volume in tons and is shown in order to provide a pricing
measure that is comparable across the fertilizer
industry.
|
|
|
(2)
|
Gross tons produced
for ammonia represent total ammonia produced, including ammonia
produced that was upgraded into other fertilizer products. Net tons
available for sale represent the ammonia available for sale that
was not upgraded into other fertilizer products.
|
|
|
(3)
|
The feedstock natural
gas shown above does not include natural gas used for fuel. The
cost of fuel natural gas is included in direct operating
expense.
|
|
|
(4)
|
The cost per MMBtu
excludes derivative activity, when applicable. The impact of
natural gas derivative activity during the periods presented was
not material.
|
|
|
(5)
|
On-stream factor is
the total number of hours operated divided by the total number of
hours in the reporting period and is included as a measure of
operating efficiency.
|
|
|
|
Coffeyville
Facility
|
|
|
|
The Linde air
separation unit experienced a shut down during the second quarter
of 2017. Following the Linde outage, the Coffeyville Facility UAN
unit experienced a number of operational challenges, resulting in
approximately 11 days of UAN downtime during the second quarter of
2017. Excluding the impact of the Linde air separation unit outage
at the Coffeyville Facility, the UAN unit on-stream factors at the
Coffeyville Facility would have been 94.7% for the year ended
December 31, 2017.
|
|
|
|
East Dubuque
Facility
|
|
|
|
Excluding the impact
of approximately 14 days of downtime associated with the 2017 full
facility turnaround at the East Dubuque Nitrogen Fertilizer
Facility, the on-stream factors would have been 94.2% for ammonia
and 94.0% for UAN for the year ended December 31,
2017.
|
|
|
|
Excluding the impact
of approximately 28 days of downtime associated with the 2016 full
facility turnaround at the East Dubuque Nitrogen Fertilizer
Facility, the on-stream factors would have been 97.8% for ammonia
and 97.1% for UAN for the post-acquisition period ended
December 31, 2016.
|
Use of Non-GAAP Financial Measures
To supplement our actual results in accordance with accounting
principles generally accepted in the
United States of America ("GAAP") for the applicable
periods, we also use the non-GAAP financial measures noted above,
which are reconciled to our GAAP-based results below. These
non-GAAP financial measures should not be considered an alternative
for GAAP results. The adjustments are provided to enhance an
overall understanding of our financial performance for the
applicable periods and are indicators management believes are
relevant and useful for planning and forecasting future
periods.
Adjusted net income is not a recognized term under GAAP and
should not be substituted for net income (loss) as a measure
of our performance, but rather should be utilized as a supplemental
measure of financial performance in evaluating our business.
Management believes that adjusted net income provides relevant and
useful information that enables external users of our financial
statements, such as industry analysts, investors, lenders and
rating agencies, to better understand and evaluate our ongoing
operating results and allow for greater transparency in the review
of our overall financial, operational and economic performance.
Adjusted net income per diluted share represents adjusted net
income divided by weighted-average diluted shares outstanding.
Adjusted net income represents net income (loss), as adjusted, that
is attributable to CVR Energy stockholders.
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in millions,
except per share data)
|
Reconciliation of
Net Income (Loss) to Adjusted Net Income:
|
|
|
|
|
|
|
|
Income (loss) before
income tax benefit
|
$
|
(61.6)
|
|
|
$
|
(28.1)
|
|
|
$
|
—
|
|
|
$
|
(10.9)
|
|
Adjustments:
|
|
|
|
|
|
|
|
FIFO impact,
favorable
|
(30.4)
|
|
|
(22.4)
|
|
|
(29.6)
|
|
|
(52.1)
|
|
Major scheduled
turnaround expenses
|
43.0
|
|
|
—
|
|
|
83.0
|
|
|
38.1
|
|
Loss on derivatives,
net
|
65.0
|
|
|
14.6
|
|
|
69.8
|
|
|
19.4
|
|
Current period
settlement on derivative contracts(1)
|
(17.7)
|
|
|
1.2
|
|
|
(16.6)
|
|
|
36.4
|
|
(Gain) loss on
extinguishment of debt(2)
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
4.9
|
|
Expenses associated
with the East Dubuque Merger(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
Insurance recovery -
Business interruption(4)
|
—
|
|
|
—
|
|
|
(1.1)
|
|
|
(2.1)
|
|
Adjusted net income
(loss) before income tax benefit and noncontrolling
interest
|
(1.7)
|
|
|
(34.9)
|
|
|
105.5
|
|
|
36.8
|
|
Adjusted net income
(loss) attributed to noncontrolling interest
|
7.5
|
|
|
15.5
|
|
|
(18.8)
|
|
|
(4.1)
|
|
Income tax benefit, as
adjusted
|
218.8
|
|
|
23.8
|
|
|
189.7
|
|
|
8.8
|
|
Net tax benefit
related to the TCJA(5)
|
(200.5)
|
|
|
—
|
|
|
(200.5)
|
|
|
—
|
|
Adjusted net
income
|
$
|
24.1
|
|
|
$
|
4.4
|
|
|
$
|
75.9
|
|
|
$
|
41.5
|
|
|
|
|
|
|
|
|
|
Adjusted net income
per diluted share
|
$
|
0.28
|
|
|
$
|
0.05
|
|
|
$
|
0.87
|
|
|
$
|
0.48
|
|
Refining margin per crude oil throughput barrel is a measurement
calculated as the difference between net sales and cost of
materials and other. Refining margin is a non-GAAP measure that we
believe is important to investors in evaluating the refineries'
performance as a general indication of the amount above their cost
of materials and other at which they are able to sell refined
products. Each of the components used in this calculation (net
sales and cost of materials and other) can be taken directly from
our Petroleum segment's Statements of Operations. Our calculation
of refining margin may differ from similar calculations of other
companies in the industry, thereby limiting its usefulness as a
comparative measure. In order to derive the refining margin per
crude oil throughput barrel, we utilize the total dollar figures
for refining margin as derived above and divide by the applicable
number of crude oil throughput barrels for the period. We believe
that refining margin and refining margin per crude oil throughput
barrel are important to enable investors to better understand and
evaluate the Petroleum segment's ongoing operating results and
allow for greater transparency in the review of our overall
financial, operational and economic performance.
Refining margin per crude oil throughput barrel adjusted for
FIFO impact is a measurement calculated as the difference between
the Petroleum segment's net sales and cost of materials and other
adjusted for FIFO impact. Refining margin adjusted for FIFO impact
is a non-GAAP measure that we believe is important to investors in
evaluating the refineries' performance as a general indication of
the amount above their cost of materials and other (taking into
account the impact of the utilization of FIFO) at which they are
able to sell refined products. Our calculation of refining margin
adjusted for FIFO impact may differ from calculations of other
companies in the industry, thereby limiting its usefulness as a
comparative measure. Under the FIFO accounting method, changes in
crude oil prices can cause fluctuations in the inventory valuation
of crude oil, work in process and finished goods, thereby resulting
in a favorable FIFO impact when crude oil prices increase and an
unfavorable FIFO impact when crude oil prices decrease. In order to
derive the refining margin per crude oil throughput barrel adjusted
for FIFO impact, we utilize the total dollar figures for refining
margin adjusted for FIFO impact as derived above and divide by the
applicable number of crude oil throughput barrels for the period.
We believe that refining margin adjusted for FIFO impact and
refining margin per crude oil throughput barrel adjusted for FIFO
impact are important to enable investors to better understand and
evaluate the petroleum business' ongoing operating results and
allow for greater transparency in the review of our overall
financial, operational and economic performance.
The calculation of refining margin, refining margin adjusted for
FIFO impact, refining margin per crude oil throughput barrel and
refining margin adjusted for FIFO impact per crude oil throughput
barrel (each a non-GAAP financial measure), including a
reconciliation to the most directly comparable GAAP financial
measure for the three months and years ended December 31, 2017
and 2016 is as follows:
Petroleum Segment
Operating Data
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in
millions)
|
Net sales
|
$
|
1,516.7
|
|
|
$
|
1,269.4
|
|
|
$
|
5,664.2
|
|
|
$
|
4,431.3
|
|
Cost of materials and
other
|
1,281.0
|
|
|
1,107.5
|
|
|
4,804.7
|
|
|
3,759.2
|
|
Direct operating
expenses (exclusive of depreciation and amortization as reflected
below)
|
91.5
|
|
|
94.7
|
|
|
363.4
|
|
|
361.9
|
|
Major schedule
turnaround expenses
|
43.0
|
|
|
—
|
|
|
80.4
|
|
|
31.5
|
|
Depreciation and
amortization
|
32.5
|
|
|
32.6
|
|
|
129.3
|
|
|
126.3
|
|
Gross
profit
|
68.7
|
|
|
34.6
|
|
|
286.4
|
|
|
152.4
|
|
Add:
|
|
|
|
|
|
|
|
Direct operating
expenses (exclusive of depreciation and amortization as reflected
below)
|
91.5
|
|
|
94.7
|
|
|
363.4
|
|
|
361.9
|
|
Major schedule
turnaround expenses
|
43.0
|
|
|
—
|
|
|
80.4
|
|
|
31.5
|
|
Depreciation and
amortization
|
32.5
|
|
|
32.6
|
|
|
129.3
|
|
|
126.3
|
|
Refining
margin
|
235.7
|
|
|
161.9
|
|
|
859.5
|
|
|
672.1
|
|
FIFO impact,
favorable
|
(30.4)
|
|
|
(22.4)
|
|
|
(29.6)
|
|
|
(52.1)
|
|
Refining margin
adjusted for FIFO impact
|
$
|
205.3
|
|
|
$
|
139.5
|
|
|
$
|
829.9
|
|
|
$
|
620.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December
31,
|
|
Year
Ended December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Total crude oil
throughput barrels per day
|
187,996
|
|
|
207,422
|
|
|
204,748
|
|
|
198,042
|
|
Days in the
period
|
92
|
|
|
92
|
|
|
365
|
|
|
366
|
|
Total crude oil
throughput barrels
|
|
17,295,632
|
|
|
|
19,082,824
|
|
|
|
74,733,020
|
|
|
|
72,483,372
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in millions,
except for $ per barrel data)
|
Refining
margin
|
$
|
235.7
|
|
|
$
|
161.9
|
|
|
$
|
859.5
|
|
|
$
|
672.1
|
|
Divided by: crude oil
throughput barrels
|
17.3
|
|
|
19.1
|
|
|
74.7
|
|
|
72.5
|
|
Refining margin per
crude oil throughput barrel
|
$
|
13.63
|
|
|
$
|
8.49
|
|
|
$
|
11.50
|
|
|
$
|
9.27
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in millions,
except for $ per barrel data)
|
Refining margin
adjusted for FIFO impact
|
$
|
205.3
|
|
|
$
|
139.5
|
|
|
$
|
829.9
|
|
|
$
|
620.0
|
|
Divided by: crude oil
throughput barrels
|
17.3
|
|
|
19.1
|
|
|
74.7
|
|
|
72.5
|
|
Refining margin
adjusted for FIFO impact per crude oil throughput barrel
|
$
|
11.87
|
|
|
$
|
7.32
|
|
|
$
|
11.10
|
|
|
$
|
8.55
|
|
Coffeyville
Refinery
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Total crude oil
throughput barrels per day
|
133,243
|
|
|
132,351
|
|
|
131,569
|
|
|
124,169
|
|
Days in the
period
|
92
|
|
|
92
|
|
|
365
|
|
|
366
|
|
Total crude oil
throughput barrels
|
|
12,258,356
|
|
|
|
12,176,292
|
|
|
|
48,022,685
|
|
|
|
45,445,854
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in millions,
except for $ per barrel data)
|
Refining
margin
|
$
|
181.1
|
|
|
$
|
104.1
|
|
|
$
|
582.0
|
|
|
$
|
435.0
|
|
Divided by: crude oil
throughput barrels
|
12.3
|
|
|
12.2
|
|
|
48.0
|
|
|
45.4
|
|
Refining margin per
crude oil throughput barrel
|
$
|
14.77
|
|
|
$
|
8.55
|
|
|
$
|
12.12
|
|
|
$
|
9.57
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in millions,
except for $ per barrel data)
|
Refining margin
adjusted for FIFO impact
|
$
|
159.4
|
|
|
$
|
88.7
|
|
|
$
|
561.8
|
|
|
$
|
397.2
|
|
Divided by: crude oil
throughput barrels
|
12.3
|
|
|
12.2
|
|
|
48.0
|
|
|
45.4
|
|
Refining margin
adjusted for FIFO impact per crude oil throughput barrel
|
$
|
13.00
|
|
|
$
|
7.29
|
|
|
$
|
11.70
|
|
|
$
|
8.74
|
|
Wynnewood
Refinery
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Total crude oil
throughput barrels per day
|
54,753
|
|
|
75,071
|
|
|
73,179
|
|
|
73,873
|
|
Days in the
period
|
92
|
|
|
92
|
|
|
365
|
|
|
366
|
|
Total crude oil
throughput barrels
|
|
5,037,276
|
|
|
|
6,906,532
|
|
|
|
26,710,335
|
|
|
|
27,037,518
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in millions,
except for $ per barrel data)
|
Refining
margin
|
$
|
53.3
|
|
|
$
|
56.7
|
|
|
$
|
272.4
|
|
|
$
|
232.6
|
|
Divided by: crude oil
throughput barrels
|
5.0
|
|
|
6.9
|
|
|
26.7
|
|
|
27.0
|
|
Refining margin per
crude oil throughput barrel
|
$
|
10.58
|
|
|
$
|
8.20
|
|
|
$
|
10.20
|
|
|
$
|
8.60
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in millions,
except for $ per barrel data)
|
Refining margin
adjusted for FIFO impact
|
$
|
44.6
|
|
|
$
|
49.7
|
|
|
$
|
263.0
|
|
|
$
|
218.4
|
|
Divided by: crude oil
throughput barrels
|
5.0
|
|
|
6.9
|
|
|
26.7
|
|
|
27.0
|
|
Refining margin
adjusted for FIFO impact per crude oil throughput
barrel
|
$
|
8.85
|
|
|
$
|
7.19
|
|
|
$
|
9.85
|
|
|
$
|
8.07
|
|
EBITDA and Adjusted EBITDA. EBITDA represents net income
attributable to CVR Energy stockholders before consolidated (i)
interest expense and other financing costs, net of interest income,
(ii) income tax expense (benefit), and (iii) depreciation and
amortization, less the portion of these adjustments attributable to
non-controlling interest. Adjusted EBITDA represents EBITDA
adjusted for, as applicable, consolidated (i) FIFO impact
(favorable) unfavorable; (ii) major scheduled turnaround expenses
(that many of our competitors capitalize and thereby exclude from
their measures of EBITDA and adjusted EBITDA); (iii) (gain) loss on
derivatives, net; (iv) current period settlements on derivative
contracts; (v) (gain) loss on extinguishment of debt; (vi) expenses
associated with the East Dubuque Merger and (vii) business
interruption insurance recovery, less the portion of these
adjustments attributable to non-controlling interest. EBITDA and
Adjusted EBITDA are not recognized terms under GAAP and should not
be substituted for net income (loss) or cash flow from operations.
We believe that EBITDA and Adjusted EBITDA enable investors to
better understand and evaluate our ongoing operating results and
allow for greater transparency in reviewing our overall financial,
operational and economic performance. EBITDA and Adjusted EBITDA
presented by other companies may not be comparable to our
presentation, since each company may define these terms
differently. EBITDA and Adjusted EBITDA represent EBITDA and
Adjusted EBITDA that is attributable to CVR Energy
stockholders.
A reconciliation of net income attributable to CVR Energy
stockholders to EBITDA and EBITDA to Adjusted EBITDA for the three
months and year ended December 31,
2017 and 2016 is as follows:
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in
millions)
|
Net income
attributable to CVR Energy stockholders
|
$
|
200.5
|
|
|
$
|
7.1
|
|
|
$
|
234.4
|
|
|
$
|
24.7
|
|
Add:
|
|
|
|
|
|
|
|
Interest expense and
other financing costs, net of interest income
|
27.5
|
|
|
26.9
|
|
|
109.0
|
|
|
83.2
|
|
Income tax
benefit
|
(234.3)
|
|
|
(22.1)
|
|
|
(216.9)
|
|
|
(19.8)
|
|
Depreciation and
amortization
|
54.8
|
|
|
52.3
|
|
|
214.0
|
|
|
193.1
|
|
Adjustments
attributable to noncontrolling interest
|
(38.5)
|
|
|
(37.0)
|
|
|
(151.2)
|
|
|
(127.3)
|
|
EBITDA
|
10.0
|
|
|
27.2
|
|
|
189.3
|
|
|
153.9
|
|
Add:
|
|
|
|
|
|
|
|
FIFO impact,
favorable
|
(30.4)
|
|
|
(22.4)
|
|
|
(29.6)
|
|
|
(52.1)
|
|
Major scheduled
turnaround expenses
|
43.0
|
|
|
—
|
|
|
83.0
|
|
|
38.1
|
|
Loss on derivatives,
net
|
65.0
|
|
|
14.6
|
|
|
69.8
|
|
|
19.4
|
|
Current period
settlements on derivative contracts(1)
|
(17.7)
|
|
|
1.2
|
|
|
(16.6)
|
|
|
36.4
|
|
(Gain) loss on
extinguishment of debt(2)
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
4.9
|
|
Expenses associated
with the East Dubuque Merger(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
Insurance recovery -
business interruption(4)
|
—
|
|
|
—
|
|
|
(1.1)
|
|
|
(2.1)
|
|
Adjustments
attributable to noncontrolling interest
|
(20.5)
|
|
|
2.4
|
|
|
(36.4)
|
|
|
(20.0)
|
|
Adjusted
EBITDA
|
$
|
49.4
|
|
|
$
|
22.8
|
|
|
$
|
258.4
|
|
|
$
|
181.6
|
|
Petroleum and Nitrogen Fertilizer EBITDA and Adjusted EBITDA.
EBITDA by operating segment represents net income (loss) before (i)
interest expense and other financing costs, net of interest income,
(ii) income tax expense and (iii) depreciation and amortization.
Adjusted EBITDA by operating segment represents EBITDA by operating
segment adjusted for, as applicable (i) FIFO impact (favorable)
unfavorable; (ii) major scheduled turnaround expenses (that many of
our competitors capitalize and thereby exclude from their measures
of EBITDA and adjusted EBITDA); (iii) (gain) loss on extinguishment
of debt; (iv) (gain) loss on derivatives, net; (v) current period
settlements on derivative contracts; (vi) expenses associated with
the East Dubuque Merger and (vii) business interruption insurance
recovery.
We present Adjusted EBITDA by operating segment because it is
the starting point for CVR Refining's and CVR Partners'
determination of available cash for distribution. EBITDA and
Adjusted EBITDA by operating segment are not recognized terms under
GAAP and should not be substituted for net income (loss) as a
measure of performance. We believe that EBITDA and Adjusted EBITDA
by operating segment enable investors to better understand CVR
Refining's and CVR Partners' ability to make distributions to their
common unitholders, help investors evaluate our ongoing operating
results and allow for greater transparency in reviewing our overall
financial, operational and economic performance. EBITDA and
Adjusted EBITDA presented by other companies may not be comparable
to our presentation, since each company may define these terms
differently.
A reconciliation of net income (loss) to EBITDA and EBITDA to
Adjusted EBITDA for the Petroleum and Nitrogen Fertilizer segments
for the three months and years ended December 31, 2017 and 2016 is as follows:
|
Three Months Ended December 31,
|
|
Year
Ended
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in
millions)
|
Petroleum:
|
|
|
|
|
|
|
|
Petroleum net income
(loss)
|
$
|
(29.0)
|
|
|
$
|
(10.7)
|
|
|
$
|
88.8
|
|
|
$
|
15.3
|
|
Add:
|
|
|
|
|
|
|
|
Interest expense and
other financing costs, net of interest income
|
11.9
|
|
|
11.6
|
|
|
46.7
|
|
|
43.3
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Depreciation and
amortization
|
33.6
|
|
|
33.4
|
|
|
133.1
|
|
|
129.0
|
|
Petroleum
EBITDA
|
16.5
|
|
|
34.3
|
|
|
268.6
|
|
|
187.6
|
|
Add:
|
|
|
|
|
|
|
|
FIFO impact,
favorable
|
(30.4)
|
|
|
(22.4)
|
|
|
(29.6)
|
|
|
(52.1)
|
|
Major scheduled
turnaround expenses
|
43.0
|
|
|
—
|
|
|
80.4
|
|
|
31.5
|
|
Loss on derivatives,
net
|
65.0
|
|
|
14.6
|
|
|
69.8
|
|
|
19.4
|
|
Current period
settlements on derivative contracts(1)
|
(17.7)
|
|
|
1.2
|
|
|
(16.6)
|
|
|
36.4
|
|
Adjusted Petroleum
EBITDA
|
$
|
76.4
|
|
|
$
|
27.7
|
|
|
$
|
372.6
|
|
|
$
|
222.8
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in
millions)
|
Nitrogen
Fertilizer:
|
|
|
|
|
|
|
|
Nitrogen Fertilizer
net loss
|
$
|
(27.4)
|
|
|
$
|
(14.5)
|
|
|
$
|
(72.8)
|
|
|
$
|
(26.9)
|
|
Add:
|
|
|
|
|
|
|
|
Interest expense and
other financing costs, net
|
15.8
|
|
|
15.8
|
|
|
62.9
|
|
|
48.6
|
|
Income tax
expense
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
0.3
|
|
Depreciation and
amortization
|
19.1
|
|
|
17.2
|
|
|
74.0
|
|
|
58.2
|
|
Nitrogen Fertilizer
EBITDA
|
7.7
|
|
|
18.5
|
|
|
64.3
|
|
|
80.2
|
|
Add:
|
|
|
|
|
|
|
|
Major scheduled
turnaround expenses
|
—
|
|
|
—
|
|
|
2.6
|
|
|
6.6
|
|
(Gain) loss on
extinguishment of debt(2)
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
4.9
|
|
Expenses associated
with the East Dubuque Merger(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
Less:
|
|
|
|
|
|
|
|
Insurance recovery -
business interruption
|
—
|
|
|
—
|
|
|
(1.1)
|
|
|
(2.1)
|
|
Adjusted Nitrogen
Fertilizer EBITDA
|
$
|
7.7
|
|
|
$
|
18.3
|
|
|
$
|
65.8
|
|
|
$
|
92.7
|
|
____________________
|
(1)
|
Represents the
portion of gain (loss) on derivatives, net related to contracts
that matured during the respective periods and settled with
counterparties. There are no premiums paid or received at inception
of the derivative contracts and upon settlement, there is no cost
recovery associated with these contracts.
|
|
|
(2)
|
Represents a loss on
extinguishment of debt incurred by CVR Partners in June 2016 in
connection with the repurchase of senior notes assumed in the East
Dubuque Merger, which includes a prepayment premium and write-off
of the unamortized purchase accounting adjustment.
|
|
|
(3)
|
On April 1, 2016, CVR
Partners completed the East Dubuque Merger. CVR Partners incurred
legal and other professional fees and other merger related expenses
that are referred to herein as expenses associated with the East
Dubuque Merger, which are included in selling, general and
administrative expenses.
|
|
|
(4)
|
CVR Partners received
business interruption insurance recoveries of $1.1 million and $2.1
million in the third quarter of 2017 and 2016,
respectively.
|
|
|
(5)
|
Represents a one-time
benefit related to the remeasurement of our net deferred tax
liabilities associated with the TCJA. A benefit of approximately
$200.5 million was recognized as a result of the
remeasurement.
|
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SOURCE CVR Energy, Inc.