Investor Relations

Stock Quote

Investor Relations

News Release

<< Back
November 1, 2021 at 4:26 PM EDT

CVR Energy Reports Third Quarter 2021 Results

SUGAR LAND, Texas, Nov. 01, 2021 (GLOBE NEWSWIRE) -- CVR Energy, Inc. (“CVR Energy” or the “Company”) (NYSE: CVI) today announced net income of $84 million, or 83 cents per diluted share, on net sales of $1.9 billion for the third quarter of 2021, compared to a net loss of $96 million, or 96 cents per diluted share, on net sales of $1.0 billion for the third quarter of 2020. Third quarter 2021 EBITDA was $243 million, compared to a third quarter 2020 EBITDA loss of $39 million.

“CVR Energy’s third quarter 2021 results were highlighted by safe, reliable operations across both our refining and fertilizer businesses,” said Dave Lamp, CVR Energy’s Chief Executive Officer. “Our Petroleum Segment’s third quarter results were driven by widening crack spreads and a favorable Renewable Identification Number (RIN) revaluation.

“CVR Partners continued to experience solid production in the third quarter of 2021, with a combined ammonia utilization rate of 94 percent,” Lamp said. “Contributing to the success of the fertilizer business were favorable crop conditions and global supply constraints, which led to strong fertilizer demand and higher pricing. As a result, CVR Partners was pleased to declare a third quarter 2021 cash distribution of $2.93 per common unit.

“Looking to the future, we believe we are uniquely positioned, given our transportation and logistical connection to the Farm Belt, to be at the forefront of the ‘green’ revolution,” Lamp continued. “We began exploration of renewable initiatives almost two years ago and have invested nearly $150 million since then. Our efforts continue, with the Board’s recent approval of a feed pre-treater at Wynnewood, to provide optionality for higher-value feedstocks at an estimated cost of $60 million.”

Petroleum

The Petroleum Segment reported a third quarter 2021 operating income of $135 million on net sales of $1.7 billion, compared to an operating loss of $39 million on net sales of $927 million in the third quarter of 2020.

Refining margin per total throughput barrel was $15.03 in the third quarter of 2021, compared to $5.47 during the same period in 2020. The increase in refining margin was driven by a favorable RINs revaluation impact, improved throughput volumes and higher crack spreads during the third quarter of 2021. For the third quarter 2021, costs to comply with the Renewable Fuel Standard resulted in a benefit of $16 million, or 81 cents per total throughput barrel, which included a $115 million favorable revaluation of our RINs as of September 30, 2021, compared to an expense of $36 million, or $1.96 per total throughput barrel, for the third quarter of 2020, which included a $2 million unfavorable revaluation of our RINs as of September 30, 2020. The Petroleum Segment also recognized a third quarter 2021 derivative net loss of $12 million, or 63 cents per total throughput barrel, compared to a derivative gain of $5 million, or 27 cents per total throughput barrel, for the third quarter of 2020. Included in this derivative net loss for the third quarter of 2021 was a $22 million unrealized gain, compared to a $1 million unrealized gain for the third quarter of 2020. Offsetting these impacts, crude oil prices rose during the quarter, which led to a favorable inventory valuation impact of $8 million, or 41 cents per total throughout barrel, compared to a favorable inventory valuation impact of $16 million, or 86 cents per total throughput barrel during the third quarter of 2020.

Third quarter 2021 combined total throughput was approximately 211,000 barrels per day (“bpd”), compared to approximately 201,000 bpd of combined total throughput for the third quarter of 2020. This increase was primarily attributable to improved market conditions in 2021.

Fertilizer

The Nitrogen Fertilizer Segment reported an operating income of $46 million on net sales of $145 million for the third quarter of 2021, compared to an operating loss of $3 million on net sales of $79 million for the third quarter of 2020.

Third quarter 2021 average realized gate prices for urea ammonia nitrate (“UAN”) showed an improvement over the prior year, up 118 percent to $305 per ton, and ammonia was up 110 percent over the prior year to $507 per ton. Average realized gate prices for UAN and ammonia were $140 per ton and $242 per ton, respectively, for the third quarter of 2020.

CVR Partners, LP’s (“CVR Partners”) fertilizer facilities produced a combined 205,000 tons of ammonia during the third quarter of 2021, of which 65,000 net tons were available for sale while the rest was upgraded to other fertilizer products, including 314,000 tons of UAN. During the third quarter 2020, the fertilizer facilities produced 215,000 tons of ammonia, of which 71,000 net tons were available for sale while the remainder was upgraded to other fertilizer products, including 330,000 tons of UAN.

Corporate

The Company reported an income tax expense of $47 million, or 30.8 percent of income before income taxes, for the three months ended September 30, 2021, compared to an income tax benefit of $31 million, or 22.2 percent of loss before income taxes, for the three months ended September 30, 2020. The change in income tax expense was due primarily to changes in pretax earnings and earnings attributable to noncontrolling interest. The year-over-year increase in effective income tax rate was due primarily to the relationship between pretax results and earnings attributable to noncontrolling interest.

Cash, Debt and Dividend

Consolidated cash and cash equivalents were $566 million at September 30, 2021, a decrease of $101 million from December 31, 2020. Consolidated total debt and finance lease obligations were $1.7 billion at September 30, 2021, including $625 million held by the Nitrogen Fertilizer Segment.

On September 23, 2021, CVR Partners redeemed an additional $15 million aggregate principal amount of its outstanding 9.25% Senior Secured Notes due June 2023 (the “2023 UAN Notes”) at par and settled accrued interest of less than $1 million through the date of redemption.

On September 30, 2021, CVR Partners entered into a new credit agreement with an aggregate principal amount of up to $35 million with a maturity date of September 30, 2024 (the “Nitrogen Fertilizer ABL”) and terminated its $35 million ABL Credit Agreement, dated as of September 30, 2016, as amended (the “UAN 2016 ABL Credit Agreement”). The Nitrogen Fertilizer ABL has substantially similar terms as the UAN 2016 ABL Credit Agreement. The proceeds of the Nitrogen Fertilizer ABL may be used to fund working capital, capital expenditures and for other general corporate purposes.

CVR Energy will not pay a cash dividend for the 2021 third quarter.

Today, CVR Partners announced that the Board of Directors of its general partner declared a third quarter 2021 cash distribution of $2.93 per common unit, which will be paid on November 22, 2021, to common unitholders of record as of November 12, 2021.

Third Quarter 2021 Earnings Conference Call

CVR Energy previously announced that it will host its third quarter 2021 Earnings Conference Call on Tuesday, November 2, at 1 p.m. Eastern. The Earnings Conference Call may also include discussion of Company developments, forward-looking information and other material information about business and financial matters.

The third quarter 2021 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/ybtju824. A repeat of the call also can be accessed for 14 days by dialing (877) 660-6853, conference ID 13724178.

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. 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: renewables initiatives; conversion of hydrocrackers at Wynnewood and Coffeyville and/or feed pre-treaters including the completion, operation, capacities, timing, costs, optionality and benefits thereof; segregation of our renewables business; strategic optionality; margins, spreads and economics relating to renewables; carbon capture; decarbonization; ammonia utilization rates; crop conditions; supply constraints; fertilizer demand and pricing; transportation and logistical connections; the “green” revolution and our involvement therein; feedstock values; credit agreements including the uses thereof; ammonia upgrades; cost to comply with the Renewable Fuel Standard, RIN prices and valuation of our net RVO; derivative activities and gains or losses associated therewith; 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; continued safe and reliable operations; 45Q credits (if any) including the amount, timing and receipt thereof; natural gas and global energy costs; exports; and other matters. You can generally identify forward-looking statements by our use of forward-looking terminology such as “outlook,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “explore,” “evaluate,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” “should,” or “will,” or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. Investors are cautioned that various factors may affect these forward-looking statements, including the health and economic effects of the COVID-19 pandemic and any variant thereof, the rate of any economic improvement, demand for fossil fuels, price volatility of crude oil, other feedstocks and refined products (among others); the ability of the Company to pay cash dividends and CVR Partners to make cash distributions; potential operating hazards; costs of compliance with existing, or compliance with new, laws and regulations and potential liabilities arising therefrom; impacts of planting season on CVR Partners; general economic and business conditions; 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 petroleum refining and marketing business through its interest in CVR Refining and the nitrogen fertilizer manufacturing business through its interest in CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 36 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 Roberts
CVR Energy, Inc.
(281) 207-3205
InvestorRelations@CVREnergy.com

Media Relations:
Brandee Stephens
CVR Energy, Inc.
(281) 207-3516
MediaRelations@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 U.S. GAAP. These non-GAAP financial measures are important factors in assessing our operating results and profitability and include the performance and liquidity measures defined below.

As a result of volatile market conditions related to the Renewable Fuel Standard (“RFS”) during the first half of 2021 and the impacts certain significant non-cash items have on the evaluation of our operations, the Company began disclosing Adjusted EBITDA, as defined below, in the second quarter of 2021. We believe the presentation of this non-GAAP measure is meaningful to compare our operating results between periods and peer companies. All prior periods presented have been conformed to the definition below. The following are non-GAAP measures we present for the period ended September 30, 2021:

EBITDA - Consolidated net income (loss) before (i) interest expense, net, (ii) income tax expense (benefit) and (iii) depreciation and amortization expense.

Petroleum EBITDA and Nitrogen Fertilizer EBITDA - Segment net income (loss) before segment (i) interest expense, net, (ii) income tax expense (benefit), and (iii) depreciation and amortization.

Refining Margin - The difference between our Petroleum Segment net sales and cost of materials and other.

Refining Margin, adjusted for Inventory Valuation Impacts - Refining Margin adjusted to exclude the impact of current period market price and volume fluctuations on crude oil and refined product inventories purchased in prior periods and lower of cost or net realizable value adjustments, if applicable. We record our commodity inventories on the first-in-first-out basis. As a result, significant current period fluctuations in market prices and the volumes we hold in inventory can have favorable or unfavorable impacts on our refining margins as compared to similar metrics used by other publicly-traded companies in the refining industry.

Refining Margin and Refining Margin adjusted for Inventory Valuation Impacts, per Throughput Barrel - Refining Margin and Refining Margin adjusted for Inventory Valuation Impacts divided by the total throughput barrels during the period, which is calculated as total throughput barrels per day times the number of days in the period.

Direct Operating Expenses per Throughput Barrel - Direct operating expenses for our Petroleum Segment divided by total throughput barrels for the period, which is calculated as total throughput barrels per day times the number of days in the period.

Adjusted EBITDA, Adjusted Petroleum EBITDA and Adjusted Nitrogen Fertilizer EBITDA - EBITDA, Petroleum EBITDA and Nitrogen Fertilizer EBITDA adjusted for certain significant non-cash items and items that management believes are not attributable to or indicative of our on-going operations or that may obscure our underlying results and trends.

Adjusted Earnings (Loss) per Share - Earnings (loss) per share adjusted for certain significant non-cash items and items that management believes are not attributable to or indicative of our on-going operations or that may obscure our underlying results and trends.

Free Cash Flow - Net cash provided by (used in) operating activities less capital expenditures and capitalized turnaround expenditures.

Net Debt and Finance Lease Obligations - Net debt and finance lease obligations is total debt and finance lease obligations reduced for cash and cash equivalents.

Total Debt and Net Debt and Finance Lease Obligations to EBITDA Exclusive of Nitrogen Fertilizer - Total debt and net debt and finance lease obligations is calculated as the consolidated debt and net debt and finance lease obligations less the Nitrogen Fertilizer Segment’s debt and net debt and finance lease obligations as of the most recent period ended divided by EBITDA exclusive of the Nitrogen Fertilizer Segment for the most recent twelve-month period.

We present these measures because we believe they may help investors, analysts, lenders and ratings agencies analyze our results of operations and liquidity in conjunction with our U.S. GAAP results, including but not limited to our operating performance as compared to other publicly-traded companies in the refining and fertilizer industries, without regard to historical cost basis or financing methods and our ability to incur and service debt and fund capital expenditures. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. See “Non-GAAP Reconciliations” included herein for reconciliation of these amounts. Due to rounding, numbers presented within this section may not add or equal to numbers or totals presented elsewhere within this document.

Factors Affecting Comparability of Our Financial Results

Our historical results of operations for the periods presented may not be comparable with prior periods or to our results of operations in the future for the reasons discussed below.

Petroleum Segment

Coffeyville Refinery - During the three and nine months ended September 30, 2020, we capitalized costs of $1 million and $154 million, respectively, related to the planned turnaround which began in February 2020 and was completed in April 2020.

Wynnewood Refinery - The Petroleum Segment’s next planned turnaround is at the Wynnewood Refinery, where pre-planning expenditures are currently underway. During the three and nine months ended September 30, 2021, we capitalized a $1 million and $2 million, respectively, related to these pre-planning activities.

Goodwill Impairment

As a result of lower expectations for market conditions in the fertilizer industry during 2020, the market performance of CVR Partners’ common units, a qualitative analysis, and additional risks associated with the business, the Company performed an interim quantitative impairment assessment of goodwill for the reporting unit associated with our Nitrogen Fertilizer Segment’s Coffeyville, Kansas facility as of June 30, 2020. The results of the impairment test indicated the carrying amount of this reporting unit exceeded the estimated fair value, and a full, non-cash impairment charge of $41 million was required.

CVR Energy, Inc. 
(all information in this release is unaudited)

Financial and Operational Data

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
(in millions, except per share data) 2021   2020   2021   2020
Consolidated Statement of Operations Data              
Net sales $ 1,883       $ 1,005       $ 5,129       $ 2,811    
Operating costs and expenses:              
Cost of materials and other 1,473       846       4,381       2,348    
Direct operating expenses (exclusive of depreciation and amortization) 137       116       409       353    
Depreciation and amortization 65       67       199       200    
Cost of sales 1,675       1,029       4,989       2,901    
Selling, general and administrative expenses (exclusive of depreciation and amortization) 30       20       85       65    
Depreciation and amortization 2       2       6       8    
Loss on asset disposal 1             3       2    
Goodwill impairment                   41    
Operating income (loss) 175       (46 )     46       (206 )  
Other (expense) income:              
Interest expense, net (23 )     (31 )     (92 )     (98 )  
Investment (loss) income on marketable securities (1 )     (65 )     82       (13 )  
Other income, net 2       3       12       3    
Income (loss) before income tax expense 153       (139 )     48       (314 )  
Income tax expense (benefit) 47       (31 )     (1 )     (73 )  
Net income (loss) 106       (108 )     49       (241 )  
Less: Net income (loss) attributable to noncontrolling interest 22       (12 )     10       (53 )  
Net income (loss) attributable to CVR Energy stockholders $ 84       $ (96 )     $ 39       $ (188 )  
               
Basic and diluted earnings (loss) per share $ 0.83       $ (0.96 )     $ 0.38       $ (1.87 )  
Dividends declared per share $       $       $ 4.89       $ 1.20    
               
Adjusted loss per share $ (0.24 )     $ (0.57 )     $ (0.75 )     $ (1.26 )  
EBITDA* $ 243       $ (39 )     $ 345       $ (8 )  
Adjusted EBITDA * 99       14       192       107    
               
Weighted-average common shares outstanding - basic and diluted 100.5       100.5       100.5       100.5    

__________________

* See “Non-GAAP Reconciliations” section below.


Selected Balance Sheet Data

(in millions) September 30, 2021   December 31, 2020
Cash and cash equivalents $ 566     $ 667  
Working capital 269     743  
Total assets 3,872     3,978  
Total debt and finance lease obligations, including current portion 1,676     1,691  
Total liabilities 3,107     2,759  
Total CVR stockholders’ equity 567     1,019  

Selected Cash Flow Data

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
(in millions) 2021   2020   2021   2020
Net cash provided by (used in):              
Operating activities $ 139       $ 111       $ 382       $ 62    
Investing activities (63 )     (35 )     (204 )     (396 )  
Financing activities (29 )     (3 )     (279 )     361    
Net increase (decrease) in cash and cash equivalents and restricted cash $ 47       $ 73       $ (101 )     $ 27    
               
Free cash flow* $ 76       $ 76       $ 191       $ (197 )  

____________________________

* See “Non-GAAP Reconciliations” section below.

Selected Segment Data

(in millions) Petroleum   Nitrogen Fertilizer   Consolidated
Three Months Ended September 30, 2021          
Net sales $ 1,742       $ 145     $ 1,883  
Operating income 135       46     175  
Net income 146       35     106  
EBITDA* 188       64     243  
           
Capital expenditures (1)          
Maintenance capital expenditures $ 12       $ 3     $ 15  
Growth capital expenditures       4     23  
Total capital expenditures $ 12       $ 7     $ 38  
           
Nine Months Ended September 30, 2021          
Net sales $ 4,793       $ 344     $ 5,129  
Operating (loss) income (1 )     63     46  
Net income 23       17     49  
EBITDA* 159       120     345  
           
Capital expenditures (1)          
Maintenance capital expenditures $ 30       $ 8     $ 39  
Growth capital expenditures 1       6     150  
Total capital expenditures $ 31       $ 14     $ 189  


(in millions) Petroleum   Nitrogen Fertilizer   Consolidated
Three Months Ended September 30, 2020          
Net sales $ 927     $ 79     $ 1,005  
Operating loss (39 )   (3 )   (46 )
Net loss (33 )   (19 )   (108 )
EBITDA* 15     15     (39 )
           
Capital expenditures (1)          
Maintenance capital expenditures $ 12     $ 3     $ 16  
Growth capital expenditures 5     2     7  
Total capital expenditures $ 17     $ 5     $ 23  
           
Nine months ended September 30, 2020          
Net sales $ 2,556     $ 260     $ 2,811  
Operating income (161 )   (34 )   (206 )
Net income (loss) (156 )   (81 )   (241 )
EBITDA* (8 )   23     (8 )
           
Capital expenditures (1)          
Maintenance capital expenditures $ 66     $ 9     $ 78  
Growth capital expenditures 14     4     18  
Total capital expenditures $ 80     $ 13     $ 96  

_______________________

* See “Non-GAAP Reconciliations” section below.
(1)   Capital expenditures are shown exclusive of capitalized turnaround expenditures and business combinations.


Selected Balance Sheet Data

(in millions) Petroleum   Nitrogen Fertilizer   Consolidated
September 30, 2021          
Cash and cash equivalents (1) $ 402     $ 101     $ 566  
Total assets 3,365     1,068     3,872  
Total debt and finance lease obligations, including current portion (2) 56     625     1,676  
           
December 31, 2020          
Cash and cash equivalents (1) $ 429     $ 31     $ 667  
Total assets 2,991     1,033     3,978  
Total debt and finance lease obligations, including current portion (2) 61     636     1,691  

_______________________

(1)   Corporate cash and cash equivalents consisted of $63 million and $207 million at September 30, 2021 and December 31, 2020, respectively.
(2)   Corporate total debt and finance lease obligations, including current portion consisted of $995 million and $994 million at September 30, 2021 and December 31, 2020, respectively.

Petroleum Segment

Key Operating Metrics per Total Throughput Barrel

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2021   2020   2021   2020
Refining margin * $ 15.03     $ 5.47     $ 8.51     $ 5.77  
Refining margin adjusted for inventory valuation impacts * 14.62     4.61     6.55     7.34  
Direct operating expenses * 4.52     4.17     4.83     5.09  

_____________________________

* See “Non-GAAP Reconciliations” section below.


Throughput Data by Refinery

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
(in bpd) 2021   2020   2021   2020
Coffeyville              
Regional crude 27,259     35,769     27,865     36,277  
WTI 63,779     58,744     62,388     42,793  
WTL 1,547         522      
Midland WTI 1,633         550      
Condensate 5,532     13,885     8,659     8,502  
Heavy Canadian 4,823     22     2,860     1,362  
Other crude oil 18,535     9,702     16,270     3,258  
Other feedstocks and blendstocks 10,656     8,203     9,796     7,001  
Wynnewood              
Regional crude 62,091     57,920     59,321     53,057  
WTL 2,809     8,657     4,586     6,994  
Midland WTI 4,312         1,453     1,573  
Condensate 4,736     5,330     7,260     7,175  
Other feedstocks and blendstocks 3,231     2,936     3,115     3,468  
Total throughput 210,943     201,168     204,645     171,460  

Production Data by Refinery

  Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
(in bpd) 2021     2020     2021     2020  
Coffeyville                      
Gasoline 70,729     68,572     68,310     53,241  
Distillate 53,946     49,407     52,231     38,976  
Other liquid products 4,971     5,246     4,947     4,328  
Solids 4,355     3,382     4,138     2,836  
Wynnewood                      
Gasoline 39,647     37,119     39,319     37,333  
Distillate 32,410     32,514     31,026     29,864  
Other liquid products 2,524     2,712     2,826     2,532  
Solids 16     23     19     25  
Total production 208,598     198,975     202,816     169,135  
                       
Light product yield (as % of crude throughput) (1) 99.8 %   98.7 %   99.6 %   99.0 %
Liquid volume yield (as % of total throughput) (2) 96.8 %   97.2 %   97.1 %   97.0 %
Distillate yield (as % of crude throughput) (3) 43.8 %   43.1 %   43.4 %   42.8 %

_______________________

(1)   Total Gasoline and Distillate divided by total Regional crude, WTI, WTL, Midland WTI, Condensate, and Heavy Canadian 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, Condensate, and Heavy Canadian throughput.

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2021   2020   2021   2020
Market Indicators (dollars per barrel)              
West Texas Intermediate (WTI) NYMEX $ 70.52     $ 40.92     $ 65.04     $ 38.21  
Crude Oil Differentials to WTI:              
Brent 2.71     2.42     2.92     4.32  
WCS (heavy sour) (12.86 )   (9.82 )   (12.52 )   (12.31 )
Condensate (0.54 )   (0.52 )   (0.50 )   (1.47 )
Midland Cushing 0.22     0.13     0.44     0.16  
NYMEX Crack Spreads:              
Gasoline 22.74     10.89     20.65     10.93  
Heating Oil 19.05     9.55     17.45     13.81  
NYMEX 2-1-1 Crack Spread 20.89     10.22     19.05     12.37  
PADD II Group 3 Basis:              
Gasoline (1.83 )   (2.74 )   (1.93 )   (3.74 )
Ultra-Low Sulfur Diesel 0.34     (1.01 )   0.98     (1.50 )
PADD II Group 3 Product Crack Spread:              
Gasoline 20.90     8.15     18.72     7.19  
Ultra-Low Sulfur Diesel 19.39     8.54     18.43     12.31  
PADD II Group 3 2-1-1 20.15     8.34     18.58     9.75  

Nitrogen Fertilizer Segment:

Key Operating Data:

Ammonia Utilization (3) Three Months Ended
September 30,
  Nine Months Ended
September 30,
(capacity utilization) 2021   2020   2021   2020
Consolidated 94 %   98 %   93 %   97 %

____________________

(1) Reflects our ammonia utilization rates on a consolidated basis. Utilization is an important measure used by management to assess operational output at each of the Partnership’s facilities. Utilization is calculated as actual tons produced divided by capacity. We present our utilization for the three and nine months ended September 30, 2021 and 2020 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 Ended
September 30,
  Nine Months Ended
September 30,
  2021   2020   2021   2020
Consolidated sales (thousand tons):              
Ammonia 52     54     164     218  
UAN 322     365     931     986  
               
Consolidated product pricing at gate (dollars per ton) (1):              
Ammonia $ 507     $ 242     $ 416     $ 293  
UAN 305     140     240     156  
               
Consolidated production volume (thousand tons):              
Ammonia (gross produced) (2) 205     215     610     631  
Ammonia (net available for sale) (2) 65     71     205     228  
UAN 314     330     920     968  
               
Feedstock:              
Petroleum coke used in production (thousand tons) 129     129     390     393  
Petroleum coke (dollars per ton) $ 50.35     $ 35.11     $ 43.23     $ 36.77  
Natural gas used in production (thousands of MMBtu) (3) 2,043     2,136     6,079     6,408  
Natural gas used in production (dollars per MMBtu) (3) $ 4.29     $ 2.10     $ 3.48     $ 2.15  
Natural gas in cost of materials and other (thousands of MMBtus) (3) 1,786     2,026     5,436     6,660  
Natural gas in cost of materials and other (dollars per MMBtu) (3) $ 3.78     $ 2.01     $ 3.27     $ 2.25  

_______________________

(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 Ended
September 30,
  Nine Months Ended
September 30,
  2021   2020   2021   2020
Ammonia — Southern Plains (dollars per ton) $ 623     $ 216     $ 543     $ 249  
Ammonia — Corn belt (dollars per ton) 659     299     594     336  
UAN — Corn belt (dollars per ton) 352     159     317     170  
               
Natural gas NYMEX (dollars per MMBtu) $ 4.32     $ 2.12     $ 3.35     $ 1.92  

Q4 2021 Outlook

The table below summarizes our outlook for certain operational statistics and financial information for the fourth quarter of 2021. See “Forward-Looking Statements” above.

  Q4 2021
  Low   High
Petroleum Segment      
Total throughput (bpd) 210,000     230,000  
Direct operating expenses (1) (in millions) $ 90     $ 100  
       
Nitrogen Fertilizer Segment      
Ammonia utilization rates (2)      
Consolidated 90 %   95 %
Coffeyville Facility 90 %   95 %
East Dubuque Facility 90 %   95 %
Direct operating expenses (1) (in millions) $ 45     $ 50  
       
Capital Expenditures (3) (in millions)      
Petroleum $ 26     $ 30  
Renewables (4)     1  
Nitrogen Fertilizer 9     12  
Other     1  
Total capital expenditures $ 35     $ 44  

_____________________

(1) Direct operating expenses are shown exclusive of depreciation and amortization and, for the Nitrogen Fertilizer segment, turnaround expenses and inventory valuation impacts.
(2) Ammonia utilization rates exclude the impact of turnarounds.
(3) Capital expenditures are disclosed on an accrual basis.
(4) Renewables reflects spending on the Wynnewood renewable diesel unit (“RDU”) project. Amounts spent in 2020 were previously reported under Other. Upon completion and meeting of certain criteria under accounting rules, Renewables is expected to be a new reportable segment. As of September 30, 2021, Renewables does not the meet the definition of an operating segment as defined under Accounting Standards Codification 280.

Non-GAAP Reconciliations:

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
(in millions) 2021   2020   2021   2020
Net income (loss) $ 106     $ (108 )   $ 49     $ (241 )
Interest expense, net 23     31     92     98  
Income tax expense (benefit) 47     (31 )   (1 )   (73 )
Depreciation and amortization 67     69     205     208  
EBITDA $ 243     $ (39 )   $ 345     $ (8 )
Adjustments:              
Revaluation of RFS liability (115 )   2     54     (6 )
(Gain) loss on marketable securities 1     68     (82 )   20  
Unrealized gain on derivatives (22 )   (1 )   (16 )   (14 )
Inventory valuation impacts, (favorable) unfavorable (8 )   (16 )   (109 )   74  
Goodwill impairment             41  
Adjusted EBITDA $ 99     $ 14     $ 192     $ 107  

Reconciliation of Basic and Diluted Earnings (Loss) per Share to Adjusted Loss per Share

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2021   2020   2021   2020
Basic and diluted earnings (loss) per share $ 0.83     $ (0.96 )   $ 0.38     $ (1.87 )
Adjustments (1):              
Revaluation of RFS liability (0.85 )   0.01     0.40     (0.05 )
(Gain) loss on marketable securities 0.01     0.50     (0.60 )   0.15  
Unrealized gain on derivatives (0.17 )   (0.01 )   (0.12 )   (0.10 )
Inventory valuation impacts, (favorable) unfavorable (0.06 )   (0.11 )   (0.81 )   0.54  
Goodwill impairment (2)             0.07  
Adjusted loss per share $ (0.24 )   $ (0.57 )   $ (0.75 )   $ (1.26 )

_____________________

(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.
(2) Amount is shown exclusive of noncontrolling interests.

Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2021   2020   2021   2020
Net cash provided by operating activities $ 139     $ 111     $ 382     $ 62  
Less:              
Capital expenditures (62 )   (24 )   (188 )   (101 )
Capitalized turnaround expenditures (1 )   (11 )   (3 )   (158 )
Free cash flow $ 76     $ 76     $ 191     $ (197 )

Reconciliation of Petroleum Segment Net Income (Loss) to EBITDA and Adjusted EBITDA

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
(in millions) 2021   2020   2021   2020
Petroleum net income (loss) $ 146     $ (33 )   $ 23     $ (156 )
Interest (income) expense, net (8   (3 )   (16 )   (2 )
Depreciation and amortization 50     51     152     150  
Petroleum EBITDA 188     15     159     (8 )
Adjustments:              
Revaluation of RFS liability (115   2     54     (6 )
Unrealized gain on derivatives (22   (1 )   (16 )   (14 )
Inventory valuation impacts, (favorable) unfavorable (1) (2) (8   (16 )   (109 )   74  
Petroleum Adjusted EBITDA $ 43     $     $ 88     $ 46  

Reconciliation of Petroleum Segment Gross Profit (Loss) to Refining Margin and Refining Margin Adjusted for Inventory Valuation Impacts

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
(in millions) 2021   2020   2021   2020
Net sales $ 1,742     $ 927     $ 4,793     $ 2,556  
Cost of materials and other 1,450     826     4,318     2,285  
Direct operating expenses (exclusive of depreciation and amortization) 88     77     270     239  
Depreciation and amortization 50     51     152     150  
Gross profit (loss) 154     (27 )   53     (118 )
Add:              
Direct operating expenses (exclusive of depreciation and amortization) 88     77     270     239  
Depreciation and amortization 50     51     152     150  
Refining margin 292     101     475     271  
Inventory valuation impacts, (favorable) unfavorable (1) (2) (8 )   (16 )   (109 )   74  
Refining margin adjusted for inventory valuation impacts $ 284     $ 85     $ 366     $ 345  

_____________________

(1) The Petroleum Segment’s basis for determining inventory value under GAAP is 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.
(2) Includes an inventory valuation charge of $58 million recorded in the first quarter of 2020, as inventories were reflected at the lower of cost or net realizable value. No adjustment was necessary for any other period of 2020 or 2021.

Reconciliation of Petroleum Segment Total Throughput Barrels

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2021   2020   2021   2020
Total throughput barrels per day 210,943   201,168   204,645   171,460
Days in the period 92   92   273   274
Total throughput barrels 19,406,776   18,507,431   55,868,087   46,980,133

Reconciliation of Petroleum Segment Refining Margin per Total Throughput Barrels

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
(in millions, except for per throughput barrel data) 2021   2020   2021   2020
Refining margin $ 292   $ 101   $ 475   $ 271
Divided by: total throughput barrels 19   19   56   47
Refining margin per total throughput barrel $ 15.03   $ 5.47   $ 8.51   $ 5.77

Reconciliation of Petroleum Segment Refining Margin Adjusted for Inventory Valuation Impacts per Total Throughput Barrel

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
(in millions, except for throughput barrel data) 2021   2020   2021   2020
Refining margin adjusted for inventory valuation impacts $ 284   $ 85   $ 366   $ 345
Divided by: total throughput barrels 19   19   56   47
Refining margin adjusted for inventory valuation impacts per total throughput barrel $ 14.62   $ 4.61   $ 6.55   $ 7.34

Reconciliation of Petroleum Segment Direct Operating Expenses per Total Throughput Barrel

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
(in millions, except for throughput barrel data) 2021   2020   2021   2020
Direct operating expenses (exclusive of depreciation and amortization) $ 88     $ 77     $ 270     $ 239  
Divided by: total throughput barrels 19     19     56     47  
Direct operating expenses per total throughput barrel $ 4.52     $ 4.17     $ 4.83     $ 5.09  

Reconciliation of Nitrogen Fertilizer Segment Net Income (Loss) to EBITDA and Adjusted EBITDA

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
(in millions) 2021   2020   2021   2020
Nitrogen fertilizer net income (loss) $ 35   $ (19 )   $ 17   $ (81 )
Interest expense, net 11   16     51   47  
Depreciation and amortization 18   18     53   57  
Nitrogen Fertilizer EBITDA 64   15     120   23  
Adjustments:              
Goodwill impairment         41  
Adjusted Nitrogen Fertilizer EBITDA $ 64   $ 15     $ 120   $ 64  

Reconciliation of Total Debt and Net Debt and Finance Lease Obligations to EBITDA Exclusive of Nitrogen Fertilizer

  Twelve Months Ended September 30, 2021
Total debt and finance lease obligations (1) $ 1,676  
Less:  
Nitrogen Fertilizer debt and finance lease obligations (1) $ 625  
Total debt and finance lease obligations exclusive of Nitrogen Fertilizer 1,051  
   
EBITDA exclusive of Nitrogen Fertilizer $ 208  
   
Total debt and finance lease obligations to EBITDA exclusive of Nitrogen Fertilizer 5.05  
   
Consolidated cash and cash equivalents $ 566  
Less:  
Nitrogen Fertilizer cash and cash equivalents 101  
Cash and cash equivalents exclusive of Nitrogen Fertilizer 465  
   
Net debt and finance lease obligations exclusive of Nitrogen Fertilizer (2) $ 586  
   
Net debt and finance lease obligations to EBITDA exclusive of Nitrogen Fertilizer (2) 2.82  

___________________

(1) Amounts are shown inclusive of the current portion of long-term debt and finance lease obligations.
(2) Net debt represents total debt and finance lease obligations exclusive of cash and cash equivalents.

  Three Months Ended   Twelve Months Ended September 30, 2021
  December 31,
2020
  March 31,
2021
  June 30,
2021
  September 30,
2021
 
Consolidated                  
Net loss $ (78 )   $ (55 )   $ (2 )   $ 106   $ (29 )
Add:                  
Interest expense, net 32     31     38     23   124  
Income tax benefit (23 )   (42 )   (6 )   47   (24 )
Depreciation and amortization 70     66     72     67   275  
EBITDA $ 1     $     $ 102     $ 243   $ 346  
                   
Nitrogen Fertilizer                  
Net loss $ (17 )   $ (25 )   $ 7     $ 35    
Add:                  
Interest expense, net 16     16     23     11   66  
Depreciation and amortization 19     14     21     18   72  
EBITDA $ 18     $ 5     $ 51     $ 64   $ 138  
                   
EBITDA exclusive of Nitrogen Fertilizer $ (17 )   $ (5 )   $ 51     $ 179   $ 208  

Primary Logo

Source: CVR Energy, Inc.


Home | About CVR Energy | Investor Relations | Community Involvement | News Room | Careers
Contact Us | CVR Refining, LP | CVR Partners, LP | Privacy Policy | Legal Notice | Purchase Order Terms and Conditions