CVR Energy Reports First Quarter 2022 Results and Announces a Cash Dividend of 40 cents
CVR Energy reported a robust first quarter 2022, with net income of $94 million (93 cents per diluted share) on sales of $2.4 billion, a significant recovery from a $39 million loss in Q1 2021. EBITDA reached $278 million, up from under $1 million last year. The company declared a cash dividend of 40 cents per share, payable May 23, 2022. The Petroleum Segment's operating income improved to $130 million due to higher crude prices, while the Nitrogen Fertilizer Segment saw operating income of $104 million. Cash reserves stood at $676 million.
- Net income increased to $94 million in Q1 2022, reversing a loss of $39 million in Q1 2021.
- EBITDA improved to $278 million, significantly up from under $1 million year-over-year.
- Cash dividend of 40 cents per share declared, reflecting confidence in financial performance.
- Petroleum Segment operating income rose to $130 million, driven by higher crude oil prices and improved refining margins.
- Nitrogen Fertilizer Segment reported operating income of $104 million, up from a loss of $14 million in the prior year.
- RFS compliance costs rose to $88 million due to higher Renewable Identification Number pricing.
- Despite increased revenues, significant expenses related to RIN compliance impacted profitability.
- Declared a first quarter 2022 cash dividend of 40 cents per share
- Will receive
$9 million from CVR Partners’ declared first quarter 2022 cash distribution of$2.26 per common unit - Completed Wynnewood refinery turnaround on time and on budget
- Successfully completed conversion and startup of Wynnewood’s renewable diesel unit
SUGAR LAND, Texas, May 02, 2022 (GLOBE NEWSWIRE) -- CVR Energy, Inc. (“CVR Energy” or the “Company”) (NYSE: CVI) today announced net income of
“CVR Energy reported solid results for the 2022 first quarter as the fundamentals for both the refining and fertilizer sectors continued to improve,” said Dave Lamp, CVR Energy’s Chief Executive Officer. “Our Petroleum Segment’s first quarter results were driven by increased crude oil pricing and widening Group 3 2-1-1 crack spreads offset by elevated Renewable Identification Number (RIN) pricing. CVR Energy also announced a first quarter 2022 cash dividend of 40 cents per share and continued to advance its renewables restructuring plan.
“CVR Partners achieved strong first quarter results led by robust global industry conditions and declared a first quarter 2022 cash distribution of
Petroleum
The Petroleum Segment reported first quarter 2022 operating income of
Refining margin per total throughput barrel was
First quarter 2022 combined total throughput was approximately 197,000 bpd, compared to approximately 186,000 bpd of combined total throughput for the first quarter of 2021. This increase was primarily attributable to improved throughputs as a result of Winter Storm Uri in the prior period.
Nitrogen Fertilizer
The Nitrogen Fertilizer Segment reported operating income of
First quarter 2022 average realized gate prices for urea ammonia nitrate (“UAN”) showed an improvement over the prior year, up 212 percent to
CVR Partners, LP’s (“CVR Partners”) fertilizer facilities produced a combined 187,000 tons of ammonia during the first quarter of 2022, of which 52,000 net tons were available for sale while the rest was upgraded to other fertilizer products, including 317,000 tons of UAN. During the first quarter 2021, the fertilizer facilities produced 188,000 tons of ammonia, of which 70,000 net tons were available for sale while the remainder was upgraded to other fertilizer products, including 272,000 tons of UAN.
Corporate
The Company reported an income tax expense of
Cash, Debt and Dividend
Consolidated cash and cash equivalents were
On February 22, 2022, CVR Partners redeemed all of the outstanding
CVR Energy also announced a first quarter 2022 cash dividend of 40 cents per share. The dividend, as declared by CVR Energy’s Board of Directors, will be paid on May 23, 2022, to stockholders of record as of May 13, 2022.
Today, CVR Partners announced that the Board of Directors of its general partner declared a first quarter 2022 cash distribution of
Corporate Structure
On February 22, 2022, in connection with our focus on decarbonization, we announced that our Board of Directors had approved a plan to restructure our business to segregate our renewables business. As part of this restructuring, in the first quarter of 2022, we formed 16 new indirect, wholly owned subsidiaries (“NewCos”) of CVR Energy. Over the coming year, the Company intends to evaluate the transfer of certain assets to these NewCos to, among other purposes, better align our organizational structure with management, financial reporting and our goal to maximize our renewables focus. At the present time, we expect the restructuring to be completed during the first quarter of 2023.
First Quarter 2022 Earnings Conference Call
CVR Energy previously announced that it will host its first quarter 2022 Earnings Conference Call on Tuesday, May 3, 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 first quarter 2022 Earnings Conference Call will be webcast live and can be accessed on the Investor Relations section of CVR Energy’s website at www.CVREnergy.com. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291. The webcast will be archived and available for 14 days at https://edge.media-server.com/mmc/p/t6hq57yj. A repeat of the call also can be accessed for 14 days by dialing (877) 660-6853, conference ID 13728976.
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: receipt of CVR Partners’ cash distributions; improvement of refining and fertilizer sector fundamentals; crude oil and RIN pricing; crack spreads; global fertilizer industry conditions; progression of the spring crop planting season; operating income; net sales; refining margin; refined product demand; inventory levels, including the tightness thereof; impacts of plant outages and weather events on throughput volume; renewables initiatives; conversion of hydrocrackers at Wynnewood and Coffeyville and/or feed pre-treaters, including the completion, operation, capacities, timing, costs, optionality and benefits thereof; segregation of our renewables business and the timing and scope of asset transfers in connection with the related restructuring; strategic optionality; margins, spreads and economics relating to renewables; carbon capture; decarbonization; ammonia utilization rates; crop and industry conditions; UAN, ammonia and fertilizer demand, pricing and sales volumes; 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; tax rates and expense; 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; the expected timing and completion of turnaround projects; 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; political disturbances, geopolitical instability and tensions, and associated changes in global trade policies and economic sanctions, including, but not limited to, in connection with Russia’s invasion of Ukraine in February 2022; 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 renewables, petroleum refining and marketing business as well as in the nitrogen fertilizer manufacturing business through its interest in CVR Partners. CVR Energy subsidiaries serve as the general partner and own 37 percent of the common units of CVR Partners.
Investors and others should note that CVR Energy may announce material information using SEC filings, press releases, public conference calls, webcasts and the Investor Relations page of its website. CVR Energy may use these channels to distribute material information about the Company and to communicate important information about the Company, corporate initiatives and other matters. Information that CVR Energy posts on its website could be deemed material; therefore, CVR Energy encourages investors, the media, its customers, business partners and others interested in the Company to review the information posted on its website.
For further information, please contact:
Investor Relations:
Richard 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 accounting principles generally accepted in the United States (“GAAP”). These non-GAAP financial measures are important factors in assessing our operating results and profitability and include the performance and liquidity measures defined below.
The following are non-GAAP measures we present for the period ended March 31, 2022:
EBITDA - Consolidated net income (loss) before (i) interest expense, net, (ii) income tax expense (benefit) and (iii) depreciation and amortization expense.
Petroleum EBITDA and Nitrogen Fertilizer EBITDA - Segment net income (loss) before segment (i) interest expense, net, (ii) income tax expense (benefit), and (iii) depreciation and amortization.
Refining Margin - The difference between our Petroleum Segment net sales and cost of materials and other.
Refining Margin, adjusted for Inventory Valuation Impacts - Refining Margin adjusted to exclude the impact of current period market price and volume fluctuations on crude oil and refined product inventories purchased in prior periods and lower of cost or net realizable value adjustments, if applicable. We record our commodity inventories on the first-in-first-out basis. As a result, significant current period fluctuations in market prices and the volumes we hold in inventory can have favorable or unfavorable impacts on our refining margins as compared to similar metrics used by other publicly-traded companies in the refining industry.
Refining Margin and Refining Margin adjusted for Inventory Valuation Impacts, per Throughput Barrel - Refining Margin and Refining Margin adjusted for Inventory Valuation Impacts divided by the total throughput barrels during the period, which is calculated as total throughput barrels per day times the number of days in the period.
Direct Operating Expenses per Throughput Barrel - Direct operating expenses for our Petroleum Segment divided by total throughput barrels for the period, which is calculated as total throughput barrels per day times the number of days in the period.
Adjusted EBITDA, Adjusted Petroleum EBITDA and Adjusted Nitrogen Fertilizer EBITDA - EBITDA, Petroleum EBITDA and Nitrogen Fertilizer EBITDA adjusted for certain significant non-cash items and items that management believes are not attributable to or indicative of our on-going operations or that may obscure our underlying results and trends.
Adjusted Earnings (Loss) per Share - Earnings (loss) per share adjusted for certain significant non-cash items and items that management believes are not attributable to or indicative of our on-going operations or that may obscure our underlying results and trends.
Free Cash Flow - Net cash provided by (used in) operating activities less capital expenditures and capitalized turnaround expenditures.
Net Debt and Finance Lease Obligations - Net debt and finance lease obligations is total debt and finance lease obligations reduced for cash and cash equivalents.
Total Debt and Net Debt and Finance Lease Obligations to EBITDA Exclusive of Nitrogen Fertilizer - Total debt and net debt and finance lease obligations is calculated as the consolidated debt and net debt and finance lease obligations less the Nitrogen Fertilizer Segment’s debt and net debt and finance lease obligations as of the most recent period ended divided by EBITDA exclusive of the Nitrogen Fertilizer Segment for the most recent twelve-month period.
We present these measures because we believe they may help investors, analysts, lenders and ratings agencies analyze our results of operations and liquidity in conjunction with our U.S. GAAP results, including but not limited to our operating performance as compared to other publicly-traded companies in the refining and fertilizer industries, without regard to historical cost basis or financing methods and our ability to incur and service debt and fund capital expenditures. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. See “Non-GAAP Reconciliations” included herein for reconciliation of these amounts. Due to rounding, numbers presented within this section may not add or equal to numbers or totals presented elsewhere within this document.
Factors Affecting Comparability of Our Financial Results
Our historical results of operations for the periods presented may not be comparable with prior periods or to our results of operations in the future for the reasons discussed below.
Petroleum Segment
Coffeyville Refinery - During the three months ended March 31, 2022, we capitalized
Wynnewood Refinery - The Petroleum Segment’s Wynnewood Refinery’s major planned turnaround began in late February 2022 and was completed in early April 2022. The pre-planning phase began during the first quarter of 2021. During the three months ended March 31, 2022 and 2021, we capitalized
Nitrogen Fertilizer Segment
Major Scheduled Turnaround Activities
Coffeyville Fertilizer Facility -The next planned turnaround at the Coffeyville Fertilizer Facility is currently expected to occur in the summer of 2022. For the three months ended March 31, 2022, we incurred turnaround expense of less than
East Dubuque Fertilizer Facility - The next planned turnaround at the East Dubuque Fertilizer Facility is currently expected to occur in the summer of 2022. For the three months ended March 31, 2022, we incurred turnaround expense of approximately
CVR Energy, Inc.
(all information in this release is unaudited)
Consolidated Statement of Operations Data
| Three Months Ended March 31, | |||||||
| (in millions, except per share data) | 2022 | 2021 | |||||
| Net sales | $ | 2,373 | $ | 1,463 | |||
| Operating costs and expenses: | |||||||
| Cost of materials and other | 1,887 | 1,369 | |||||
| Direct operating expenses (exclusive of depreciation and amortization) | 160 | 136 | |||||
| Depreciation and amortization | 65 | 63 | |||||
| Cost of sales | 2,112 | 1,568 | |||||
| Selling, general and administrative expenses (exclusive of depreciation and amortization) | 39 | 27 | |||||
| Depreciation and amortization | 2 | 3 | |||||
| Operating income (loss) | 220 | (135 | ) | ||||
| Other (expense) income: | |||||||
| Interest expense, net | (24 | ) | (31 | ) | |||
| Investment income on marketable securities | — | 62 | |||||
| Other (expense) income, net | (9 | ) | 7 | ||||
| Income (loss) before income tax expense | 187 | (97 | ) | ||||
| Income tax expense (benefit) | 34 | (42 | ) | ||||
| Net income (loss) | 153 | (55 | ) | ||||
| Less: Net income (loss) attributable to noncontrolling interest | 59 | (16 | ) | ||||
| Net income (loss) attributable to CVR Energy stockholders | $ | 94 | $ | (39 | ) | ||
| Basic and diluted earnings (loss) per share | $ | 0.93 | $ | (0.39 | ) | ||
| Adjusted earnings (loss) per share | $ | 0.02 | $ | (0.19 | ) | ||
| EBITDA* | $ | 278 | $ | — | |||
| Adjusted EBITDA * | $ | 155 | $ | 26 | |||
| Weighted-average common shares outstanding - basic and diluted | 100.5 | 100.5 | |||||
_______________
* See “Non-GAAP Reconciliations” section below.
Selected Balance Sheet Data
| (in millions) | March 31, 2022 | December 31, 2021 | |||||
| Cash and cash equivalents | $ | 676 | $ | 510 | |||
| Working capital | 214 | 213 | |||||
| Total assets | 4,345 | 3,906 | |||||
| Total debt and finance lease obligations, including current portion | 1,595 | 1,660 | |||||
| Total liabilities | 3,469 | 3,136 | |||||
| Total CVR stockholders’ equity | 644 | 553 | |||||
Selected Cash Flow Data
| Three Months Ended March 31, | |||||||
| (in millions) | 2022 | 2021 | |||||
| Net cash provided by: | |||||||
| Operating activities | $ | 322 | $ | 96 | |||
| Investing activities | (41 | ) | (54 | ) | |||
| Financing activities | (115 | ) | (2 | ) | |||
| Net increase in cash and cash equivalents and restricted cash | $ | 166 | $ | 40 | |||
| Free cash flow* | $ | 281 | $ | 61 | |||
_______________
* See “Non-GAAP Reconciliations” section below.
Selected Segment Data
| Three Months Ended March 31, 2022 | |||||||||||
| (in millions) | Petroleum | Nitrogen Fertilizer | Consolidated | ||||||||
| Net sales | $ | 2,154 | $ | 223 | $ | 2,373 | |||||
| Operating income | 130 | 104 | 220 | ||||||||
| Net income | 126 | 94 | 153 | ||||||||
| EBITDA* | 167 | 123 | 278 | ||||||||
| Capital expenditures (1) | |||||||||||
| Maintenance capital expenditures | $ | 18 | $ | 5 | $ | 23 | |||||
| Growth capital expenditures | 1 | — | 27 | ||||||||
| Total capital expenditures | $ | 19 | $ | 5 | $ | 50 | |||||
| Three Months Ended March 31, 2021 | |||||||||||
| (in millions) | Petroleum | Nitrogen Fertilizer | Consolidated | ||||||||
| Net sales | $ | 1,404 | $ | 61 | $ | 1,463 | |||||
| Operating loss | (115 | ) | (14 | ) | (135 | ) | |||||
| Net loss | (110 | ) | (25 | ) | (55 | ) | |||||
| EBITDA* | (61 | ) | 5 | — | |||||||
| Capital expenditures (1) | |||||||||||
| Maintenance capital expenditures | $ | 10 | $ | 2 | $ | 12 | |||||
| Growth capital expenditures | — | 1 | 56 | ||||||||
| Total capital expenditures | $ | 10 | $ | 3 | $ | 68 | |||||
_______________
* See “Non-GAAP Reconciliations” section below.
(1) Capital expenditures are shown exclusive of capitalized turnaround expenditures and business combinations.
Selected Balance Sheet Data
| March 31, 2022 | December 31, 2021 | ||||||||||||||||||||||
| (in millions) | Petroleum | Nitrogen Fertilizer | Consolidated | Petroleum | Nitrogen Fertilizer | Consolidated | |||||||||||||||||
| Cash and cash equivalents (1) | $ | 482 | $ | 137 | $ | 676 | $ | 305 | $ | 113 | $ | 510 | |||||||||||
| Total assets | 3,874 | 1,103 | 4,345 | 3,368 | 1,127 | 3,906 | |||||||||||||||||
| Total debt and finance lease obligations, including current portion (2) | 53 | 546 | 1,595 | 54 | 611 | 1,660 | |||||||||||||||||
_______________
(1) Corporate cash and cash equivalents consisted of
(2) Corporate total debt and finance lease obligations, including current portion consisted of
Petroleum Segment
Key Operating Metrics per Total Throughput Barrel
| Three Months Ended March 31, | |||||||
| (in millions) | 2022 | 2021 | |||||
| Refining margin * | $ | 16.75 | $ | 3.05 | |||
| Refining margin adjusted for inventory valuation impacts * | 9.24 | (0.88 | ) | ||||
| Direct operating expenses * | 5.57 | 5.89 | |||||
_______________
* See “Non-GAAP Reconciliations” section below.
Throughput Data by Refinery
| Three Months Ended March 31, | |||||
| (in bpd) | 2022 | 2021 | |||
| Coffeyville | |||||
| Regional crude | 39,766 | 29,232 | |||
| WTI | 47,815 | 52,936 | |||
| Midland WTI | 2,602 | — | |||
| Condensate | 11,352 | 7,051 | |||
| Heavy Canadian | 6,761 | — | |||
| DJ Basin | 18,035 | 16,733 | |||
| Other feedstocks and blendstocks | 11,344 | 8,725 | |||
| Wynnewood | |||||
| Regional crude | 43,403 | 55,159 | |||
| WTL | 344 | 3,535 | |||
| Midland WTI | 1,634 | — | |||
| WTS | 578 | — | |||
| Condensate | 10,285 | 9,540 | |||
| Other feedstocks and blendstocks | 3,425 | 3,182 | |||
| Total throughput | 197,344 | 186,093 | |||
Production Data by Refinery
| Three Months Ended March 31, | |||||
| (in bpd) | 2022 | 2021 | |||
| Coffeyville | |||||
| Gasoline | 75,050 | 61,664 | |||
| Distillate | 54,665 | 46,542 | |||
| Other liquid products | 4,988 | 4,107 | |||
| Solids | 4,359 | 3,397 | |||
| Wynnewood | |||||
| Gasoline | 29,366 | 37,456 | |||
| Distillate | 22,518 | 29,164 | |||
| Other liquid products | 5,134 | 2,947 | |||
| Solids | 20 | 22 | |||
| Total production | 196,100 | 185,299 | |||
| Light product yield (as % of crude throughput) (1) | 99.5 | % | 100.4 | % | |
| Liquid volume yield (as % of total throughput) (2) | 97.2 | % | 97.7 | % | |
| Distillate yield (as % of crude throughput) (3) | 42.3 | % | 43.5 | % | |
_______________
(1) Total Gasoline and Distillate divided by total Regional crude, WTI, WTL, Midland WTI, WTS, Condensate, Heavy Canadian, and DJ Basin throughput.
(2) Total Gasoline, Distillate, and Other liquid products divided by total throughput.
(3) Total Distillate divided by total Regional crude, WTI, WTL, Midland WTI, WTS, Condensate, Heavy Canadian, and DJ Basin throughput.
Key Market Indicators
| Three Months Ended March 31, | |||||||
| 2022 | 2021 | ||||||
| West Texas Intermediate (WTI) NYMEX | $ | 95.01 | $ | 58.14 | |||
| Crude Oil Differentials to WTI: | |||||||
| Brent | 2.89 | 3.18 | |||||
| WCS (heavy sour) | (12.78 | ) | (11.82 | ) | |||
| Condensate | 0.10 | (0.22 | ) | ||||
| Midland Cushing | 1.43 | 0.87 | |||||
| NYMEX Crack Spreads: | |||||||
| Gasoline | 23.46 | 16.43 | |||||
| Heating Oil | 33.88 | 15.26 | |||||
| NYMEX 2-1-1 Crack Spread | 28.67 | 15.84 | |||||
| PADD II Group 3 Product Basis: | |||||||
| Gasoline | (7.16 | ) | (1.22 | ) | |||
| Ultra-Low Sulfur Diesel | (5.78 | ) | 2.20 | ||||
| PADD II Group 3 Product Crack Spread: | |||||||
| Gasoline | 16.30 | 15.20 | |||||
| Ultra-Low Sulfur Diesel | 28.10 | 17.46 | |||||
| PADD II Group 3 2-1-1 | 22.20 | 16.33 | |||||
Nitrogen Fertilizer Segment:
Ammonia Utilization Rates (1)
| Three Months Ended March 31, | |||||
| (percent of capacity utilization) | 2022 | 2021 | |||
| Consolidated | 88 | % | 88 | % | |
_______________
(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 months ended March 31, 2022 and 2021 and take into account the impact of our current turnaround cycles on any specific period. Additionally, we present utilization solely on ammonia production rather than each nitrogen product as it provides a comparative baseline against industry peers and eliminates the disparity of plant configurations for upgrade of ammonia into other nitrogen products. With our efforts being primarily focused on ammonia upgrade capabilities, this measure provides a meaningful view of how well we operate.
Sales and Production Data
| Three Months Ended March 31, | |||||||
| 2022 | 2021 | ||||||
| Consolidated sales (thousand tons): | |||||||
| Ammonia | 40 | 32 | |||||
| UAN | 322 | 239 | |||||
| Consolidated product pricing at gate (dollars per ton):(1) | |||||||
| Ammonia | $ | 1,055 | $ | 300 | |||
| UAN | 496 | 159 | |||||
| Consolidated production volume (thousand tons): | |||||||
| Ammonia (gross produced) (2) | 187 | 188 | |||||
| Ammonia (net available for sale) (2) | 52 | 70 | |||||
| UAN | 317 | 272 | |||||
| Feedstock: | |||||||
| Petroleum coke used in production (thousand tons) | 108 | 128 | |||||
| Petroleum coke (dollars per ton) | $ | 56.46 | $ | 42.91 | |||
| Natural gas used in production (thousands of MMBtu) (3) | 1,761 | 1,882 | |||||
| Natural gas used in production (dollars per MMBtu) (3) | $ | 5.54 | $ | 3.10 | |||
| Natural gas in cost of materials and other (thousands of MMBtus) (3) | 1,528 | 940 | |||||
| Natural gas in cost of materials and other (dollars per MMBtu) (3) | $ | 5.62 | $ | 2.94 | |||
_______________
(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 March 31, | |||||||
| 2022 | 2021 | ||||||
| Ammonia — Southern Plains (dollars per ton) | $ | 1,277 | $ | 437 | |||
| Ammonia — Corn belt (dollars per ton) | 1,376 | 497 | |||||
| UAN — Corn belt (dollars per ton) | 615 | 256 | |||||
| Natural gas NYMEX (dollars per MMBtu) | $ | 4.59 | $ | 2.72 | |||
Q2 2022 Outlook
The table below summarizes our outlook for certain operational statistics and financial information for the second quarter of 2022. See “Forward-Looking Statements” above.
| Q2 2022 | |||||||
| Low | High | ||||||
| Petroleum | |||||||
| Total throughput (bpd) | 195,000 | 210,000 | |||||
| Direct operating expenses (in millions) (1) | $ | 95 | $ | 100 | |||
| Turnaround (2) | $ | 5 | $ | 10 | |||
| Renewables (3) | |||||||
| Total throughput (bpd) | 3,500 | 4,500 | |||||
| Direct operating expenses (in millions) (1) | $ | 2 | $ | 4 | |||
| Nitrogen Fertilizer | |||||||
| Ammonia utilization rates (4) | |||||||
| Consolidated | 92 | % | 97 | % | |||
| Coffeyville Fertilizer Facility | 95 | % | 100 | % | |||
| East Dubuque Fertilizer Facility | 88 | % | 93 | % | |||
| Direct operating expenses (in millions) (1) | $ | 55 | $ | 60 | |||
| Capital Expenditures (in millions) (2) | |||||||
| Petroleum | $ | 30 | $ | 40 | |||
| Renewables (3) | 17 | 22 | |||||
| Nitrogen Fertilizer | 12 | 17 | |||||
| Other | — | 3 | |||||
| Total capital expenditures | $ | 59 | $ | 82 | |||
_______________
(1) Direct operating expenses are shown exclusive of depreciation and amortization and, for the Nitrogen Fertilizer segment, turnaround expenses and inventory valuation impacts.
(2) Turnaround and capital expenditures are disclosed on an accrual basis.
(3) Renewables reflects spending on the Wynnewood renewable diesel unit project. Upon completion and meeting of certain criteria under accounting rules, Renewables is expected to be a new reportable segment. As of March 31, 2022, Renewables does not the meet the definition of a reportable segment as defined under Accounting Standards Codification 280.
(4) Ammonia utilization rates exclude the impact of turnarounds.
Non-GAAP Reconciliations:
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
| Three Months Ended March 31, | |||||||
| (in millions) | 2022 | 2021 | |||||
| Net income (loss) | $ | 153 | $ | (55 | ) | ||
| Interest expense, net | 24 | 31 | |||||
| Income tax expense (benefit) | 34 | (42 | ) | ||||
| Depreciation and amortization | 67 | 66 | |||||
| EBITDA | $ | 278 | $ | — | |||
| Adjustments: | |||||||
| Revaluation of RFS liability | 19 | 111 | |||||
| Loss on marketable securities | — | (62 | ) | ||||
| Unrealized (gain) loss on derivatives | (6 | ) | 43 | ||||
| Inventory valuation impacts, favorable | (136 | ) | (66 | ) | |||
| Adjusted EBITDA | $ | 155 | $ | 26 | |||
Reconciliation of Basic and Diluted Earnings (Loss) per Share to Adjusted Earnings (Loss) per Share
| Three Months Ended March 31, | |||||||
| 2022 | 2021 | ||||||
| Basic and diluted earnings (loss) per share | $ | 0.93 | $ | (0.39 | ) | ||
| Adjustments: (1) | |||||||
| Revaluation of RFS liability | 0.14 | 0.82 | |||||
| Loss on marketable securities | — | (0.46 | ) | ||||
| Unrealized (gain) loss on derivatives | (0.05 | ) | 0.32 | ||||
| Inventory valuation impacts, favorable | (1.00 | ) | (0.48 | ) | |||
| Adjusted earnings (loss) per share | $ | 0.02 | $ | (0.19 | ) | ||
_______________
(1) Amounts are shown after-tax, using the Company’s marginal tax rate, and are presented on a per share basis using the weighted average shares outstanding for each period.
Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow
| Three Months Ended March 31, | |||||||
| (in millions) | 2022 | 2021 | |||||
| Net cash provided by operating activities | $ | 322 | $ | 96 | |||
| Less: | |||||||
| Capital expenditures | (26 | ) | (34 | ) | |||
| Capitalized turnaround expenditures | (15 | ) | (1 | ) | |||
| Free cash flow | $ | 281 | $ | 61 | |||
Reconciliation of Petroleum Segment Net Income (Loss) to EBITDA and Adjusted EBITDA
| Three Months Ended March 31, | |||||||
| (in millions) | 2022 | 2021 | |||||
| Petroleum net income (loss) | $ | 126 | $ | (110 | ) | ||
| Interest income, net | (5 | ) | (2 | ) | |||
| Depreciation and amortization | 46 | 51 | |||||
| Petroleum EBITDA | 167 | (61 | ) | ||||
| Adjustments: | |||||||
| Revaluation of RFS liability | 19 | 111 | |||||
| Unrealized (gain) loss on derivatives | (5 | ) | 43 | ||||
| Inventory valuation impacts, favorable (1) | (133 | ) | (66 | ) | |||
| Petroleum Adjusted EBITDA | $ | 48 | $ | 27 | |||
Reconciliation of Petroleum Segment Gross Profit (Loss) to Refining Margin and Refining Margin Adjusted for Inventory Valuation Impacts
| Three Months Ended March 31, | |||||||
| (in millions) | 2022 | 2021 | |||||
| Net sales | $ | 2,154 | $ | 1,404 | |||
| Less: | |||||||
| Cost of materials and other | (1,857 | ) | (1,353 | ) | |||
| Direct operating expenses (exclusive of depreciation and amortization) | (99 | ) | (99 | ) | |||
| Depreciation and amortization | (46 | ) | (51 | ) | |||
| Gross profit (loss) | 152 | (99 | ) | ||||
| Add: | |||||||
| Direct operating expenses (exclusive of depreciation and amortization) | 99 | 99 | |||||
| Depreciation and amortization | 46 | 51 | |||||
| Refining margin | 297 | 51 | |||||
| Inventory valuation impacts, favorable (1) | (133 | ) | (66 | ) | |||
| Refining margin adjusted for inventory valuation impacts | $ | 164 | $ | (15 | ) | ||
_______________
(1) The Petroleum Segment’s basis for determining inventory value under GAAP is First-In, First-Out (“FIFO”). Changes in crude oil prices can cause fluctuations in the inventory valuation of crude oil, work in process and finished goods, thereby resulting in a favorable inventory valuation impact when crude oil prices increase and an unfavorable inventory valuation impact when crude oil prices decrease. The inventory valuation impact is calculated based upon inventory values at the beginning of the accounting period and at the end of the accounting period. In order to derive the inventory valuation impact per total throughput barrel, we utilize the total dollar figures for the inventory valuation impact and divide by the number of total throughput barrels for the period.
Reconciliation of Petroleum Segment Total Throughput Barrels
| Three Months Ended March 31, | |||||
| 2022 | 2021 | ||||
| Total throughput barrels per day | 197,344 | 186,093 | |||
| Days in the period | 90 | 90 | |||
| Total throughput barrels | 17,760,998 | 16,748,383 | |||
Reconciliation of Petroleum Segment Refining Margin per Total Throughput Barrel
| Three Months Ended March 31, | |||||||
| (in millions, except for per throughput barrel data) | 2022 | 2021 | |||||
| Refining margin | $ | 297 | $ | 51 | |||
| Divided by: total throughput barrels | 18 | 17 | |||||
| Refining margin per total throughput barrel | $ | 16.75 | $ | 3.05 | |||
Reconciliation of Petroleum Segment Refining Margin Adjusted for Inventory Valuation Impacts per Total Throughput Barrel
| Three Months Ended March 31, | |||||||
| (in millions, except for throughput barrel data) | 2022 | 2021 | |||||
| Refining margin adjusted for inventory valuation impacts | $ | 164 | $ | (15 | ) | ||
| Divided by: total throughput barrels | 18 | 17 | |||||
| Refining margin adjusted for inventory valuation impacts per total throughput barrel | $ | 9.24 | $ | (0.88 | ) | ||
Reconciliation of Petroleum Segment Direct Operating Expenses per Total Throughput Barrel
| Three Months Ended March 31, | |||||||
| (in millions, except for throughput barrel data) | 2022 | 2021 | |||||
| Direct operating expenses (exclusive of depreciation and amortization) | $ | 99 | $ | 99 | |||
| Divided by: total throughput barrels | 18 | 17 | |||||
| Direct operating expenses per total throughput barrel | $ | 5.57 | $ | 5.89 | |||
Reconciliation of Nitrogen Fertilizer Segment Net Income (Loss) to EBITDA and Adjusted EBITDA
| Three Months Ended March 31, | |||||||
| (in millions) | 2022 | 2021 | |||||
| Nitrogen fertilizer net income (loss) | $ | 94 | $ | (25 | ) | ||
| Interest expense, net | 10 | 16 | |||||
| Depreciation and amortization | 19 | 14 | |||||
| Nitrogen Fertilizer EBITDA and Adjusted EBITDA | $ | 123 | $ | 5 | |||
Reconciliation of Total Debt and Net Debt and Finance Lease Obligations to EBITDA Exclusive of Nitrogen Fertilizer
| (in millions) | Twelve Months Ended March 31, 2022 | ||
| Total debt and finance lease obligations (1) | $ | 1,595 | |
| Less: | |||
| Nitrogen Fertilizer debt and finance lease obligations (1) | $ | 546 | |
| Total debt and finance lease obligations exclusive of Nitrogen Fertilizer | 1,049 | ||
| EBITDA exclusive of Nitrogen Fertilizer | $ | 408 | |
| Total debt and finance lease obligations to EBITDA exclusive of Nitrogen Fertilizer | 2.57 | ||
| Consolidated cash and cash equivalents | $ | 676 | |
| Less: | |||
| Nitrogen Fertilizer cash and cash equivalents | 137 | ||
| Cash and cash equivalents exclusive of Nitrogen Fertilizer | 539 | ||
| Net debt and finance lease obligations exclusive of Nitrogen Fertilizer (2) | $ | 510 | |
| Net debt and finance lease obligations to EBITDA exclusive of Nitrogen Fertilizer (2) | 1.25 | ||
_______________
(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.
| Twelve Months Ended March 31, 2022 | ||||||||||||||||||||
| (in millions) | June 30, 2021 | September 30, 2021 | December 31, 2021 | March 31, 2022 | ||||||||||||||||
| Consolidated | ||||||||||||||||||||
| Net (loss) income | $ | (2 | ) | $ | 106 | $ | 25 | $ | 153 | $ | 282 | |||||||||
| Interest expense, net | 38 | 23 | 24 | 24 | 109 | |||||||||||||||
| Income tax (benefit) expense | (6 | ) | 47 | (7 | ) | 34 | 68 | |||||||||||||
| Depreciation and amortization | 72 | 67 | 74 | 67 | 280 | |||||||||||||||
| EBITDA | $ | 102 | $ | 243 | $ | 116 | $ | 278 | $ | 739 | ||||||||||
| Nitrogen Fertilizer | ||||||||||||||||||||
| Net income | $ | 7 | $ | 35 | $ | 61 | $ | 94 | 197 | |||||||||||
| Interest expense, net | 23 | 11 | 11 | 10 | 55 | |||||||||||||||
| Depreciation and amortization | 21 | 18 | 21 | 19 | 79 | |||||||||||||||
| EBITDA | $ | 51 | $ | 64 | $ | 93 | $ | 123 | $ | 331 | ||||||||||
| EBITDA exclusive of Nitrogen Fertilizer | $ | 51 | $ | 179 | $ | 23 | $ | 155 | $ | 408 | ||||||||||
FAQ
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