CVR REFINING LP SUGAR LAND, Texas, Nov. 1, 2017 /PRNewswire/ -- CVR Refining, LP (NYSE: CVRR), a refiner and marketer of petroleum fuels, today announced third quarter 2017 net income of $70.0 million on net sales of $1,385.8 million, compared to net income of $15.9 million on net sales of $1,163.5 million for the third quarter of 2016. Adjusted EBITDA, a non-GAAP financial measure, for the 2017 third quarter was $138.6 million compared to adjusted EBITDA of $75.3 million for the 2016 third quarter.
For the first nine months of 2017, net income was $117.8 million on net sales of $4,147.5 million, compared to net income of $26.0 million on net sales of $3,161.9 million for the comparable period a year earlier. Adjusted EBITDA for the first nine months of 2017 was $296.2 million, compared to adjusted EBITDA of $195.1 million for the first nine months of 2016.
"Led by the stellar performance of our Coffeyville refinery, we are pleased to announce a third quarter 2017 CVR Refining distribution of 94 cents," said Jack Lipinski, chief executive officer. "However, the over-priced and volatile RIN price continue to adversely affect our business. Unless the Administration and EPA step up to fix this broken program, the future viability of merchant refiners will continue to be at risk.
"The Coffeyville, Kansas, and Wynnewood, Oklahoma, refineries ran well during the 2017 third quarter, posting a total combined crude throughput of 203,093 barrels per day (bpd) despite operational disruptions at both plants," Lipinski said. "In addition, the Wynnewood refinery began planned fall maintenance at the end of September and is on schedule to complete its turnaround in early November. As a result of the large scale and cost of the Wynnewood turnaround, CVR Refining's results will be negatively impacted for the year."
Consolidated Operations
Third quarter 2017 throughputs of crude oil and all other feedstocks and blendstocks totaled 213,606 bpd. Throughputs of crude oil and all other feedstocks and blendstocks for both refineries totaled 206,733 bpd for the same period in 2016.
Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $13.72 in the 2017 third quarter, compared to $10.09 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 third quarter were $6.47, compared to $5.33 in the third quarter of 2016.
Distributions
CVR Refining also announced today a third quarter 2017 distribution of 94 cents per common unit. The distribution, as set by the board of CVR Refining GP, LLC, the general partner of CVR Refining, will be paid on Nov. 17, 2017, to unitholders of record on Nov. 10, 2017.
CVR Refining is a variable distribution master limited partnership. As a result, its quarterly distributions, if any, will vary from quarter to quarter due to several factors, including, but not limited to, its operating performance, fluctuations in the prices paid for crude oil and other feedstocks, as well as the prices received for finished products, RINs' costs and cash reserves deemed necessary or appropriate by the board of directors of its general partner.
Third Quarter 2017 Earnings Conference Call
CVR Refining previously announced that it will host its third quarter 2017 Earnings Conference Call for analysts and investors on Wednesday, Nov. 1, at 1 p.m. Eastern. The Earnings Conference Call may also include discussion of the partnership's 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/1005/23021. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8289.
For those unable to listen live, the webcast will be archived and available for 14 days at https://www.webcaster4.com/Webcast/Page/1005/23021. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13672108.
This release serves as a qualified notice to nominees and brokers as provided for under Treasury Regulation Section 1.1446-4(b). Please note that 100 percent of CVR Refining's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, CVR Refining's distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate.
Forward-Looking Statements
This news release contains forward-looking statements. You can generally identify forward-looking statements by our use of forward-looking terminology such as "outlook," "anticipate," "believe," "continue," "could," "estimate," "expect," "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 Refining disclaims any intention or obligation to update publicly or revise its forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
About CVR Refining, LP
Headquartered in Sugar Land, Texas, CVR Refining, LP is an independent downstream energy limited partnership that owns refining and related logistics assets in the Midcontinent United States. CVR Refining's subsidiaries operate a complex full coking medium-sour crude oil refinery with a rated capacity of 115,000 barrels per calendar day (bpcd) in Coffeyville, Kansas, and a complex crude oil refinery with a rated capacity of 70,000 bpcd in Wynnewood, Oklahoma. CVR Refining's subsidiaries also operate and invest in supporting logistics assets, including approximately 340 miles of active owned and leased pipelines, a 65,000 bpcd pipeline owned and operated by a joint venture, approximately 150 crude oil transports, a network of strategically located crude oil gathering tank farms, and approximately 6.4 million barrels of owned and leased crude oil storage capacity.
For further information, please contact:
Investor Contact:
Jay Finks
CVR Refining, LP
(281) 207-3588
IR@CVRRefining.com
Media Relations:
Brandee Stephens
CVR Refining, LP
(281) 207-3516
MediaRelations@CVRRefining.com
CVR Refining, LP
Financial and Operational Data (all information in this release is unaudited other than the balance sheet data as of December 31, 2016).
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
(in millions, except per unit data)
Statement of Operations Data:
Net sales $1,385.8 $1,163.5 $4,147.5 $3,161.9
Operating costs and expenses:
Cost of materials
and other 1,114.4 987.5 3,523.7 2,651.7
Direct operating
expenses(1)(2) 120.9 97.0 309.3 298.7
Depreciation and
amortization 31.8 31.9 96.8 93.7
---- ---- ---- ----
Cost of sales 1,267.1 1,116.4 3,929.8 3,044.1
Selling, general and
administrative
expenses(1) 18.8 18.1 57.7 53.4
Depreciation and
amortization 1.2 0.6 2.7 1.9
--- --- --- ---
Operating income 98.7 28.4 157.3 62.5
Interest expense and
other financing
costs (12.0) (10.8) (35.2) (31.7)
Interest income 0.2 - 0.4 -
Loss on derivatives,
net (17.0) (1.7) (4.8) (4.8)
Other income, net 0.1 - 0.1 -
--- --- --- ---
Income before income
tax expense 70.0 15.9 117.8 26.0
Income tax expense
(benefit) - - - -
Net income $70.0 $15.9 $117.8 $26.0
===== ===== ====== =====
Net income per
common unit -basic
and diluted $0.47 $0.11 $0.80 $0.18
Adjusted EBITDA* $138.6 $75.3 $296.2 $195.1
Available cash for
distribution* $138.6 $0.3 $138.6 $0.3
Weighted average, number of common
units outstanding:
Basic and diluted 147.6 147.6 147.6 147.6
_______________________
* See "Use of Non-GAAP Financial Measures" below.
(1) Direct operating expenses and selling, general and
administrative expenses for the three and nine months ended
September 30, 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) Direct operating expenses includes $21.7 million and $37.4
million of major scheduled turnaround expenses during the three
and nine months ended September 30, 2017, respectively. Direct
operating expenses includes $0.0 million and $31.5 million of
major scheduled turnaround expenses during the three and nine
months ended September 30, 2016, respectively.
As of September 30, As of December 31,
2017 2016
---- ----
(audited)
(in millions)
Balance
Sheet
Data:
Cash and
cash
equivalents $560.4 $314.1
Working
capital 467.3 313.7
Total
assets 2,500.7 2,331.9
Total
debt,
including
current
portion 540.9 541.5
Total
partners'
capital 1,414.5 1,296.7
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
(in millions)
Cash Flow Data:
Net cash flow provided by
(used in):
Operating activities $63.0 $145.6 $314.3 $186.4
Investing activities (17.8) (18.6) (66.6) (86.6)
Financing activities (0.5) (0.4) (1.4) (1.2)
---- ---- ---- ----
Net cash flow $44.7 $126.6 $246.3 $98.6
===== ====== ====== =====
Capital expenditures for
property, plant and
equipment:
Maintenance capital
expenditures $15.1 $10.5 $58.0 $50.1
Growth capital
expenditures 3.6 4.9 8.1 33.3
--- --- --- ----
Total capital expenditures $18.7 $15.4 $66.1 $83.4
===== ===== ===== =====
Operating Data
The following tables set forth information about our consolidated operations and our Coffeyville and Wynnewood refineries. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below.
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
Key Operating
Statistics:
Per crude oil
throughput barrel:
Gross profit $6.35 $2.59 $3.79 $2.21
Refining margin* 14.52 9.66 10.86 9.55
FIFO impact,
(favorable)
unfavorable (0.80) 0.43 0.01 (0.56)
----- ---- ---- -----
Refining margin
adjusted for FIFO
impact* 13.72 10.09 10.87 8.99
Direct operating
expenses and major
scheduled
turnaround expenses 6.47 5.33 5.38 5.59
Direct operating
expenses excluding
major scheduled
turnaround expenses 5.31 5.33 4.73 5.00
Direct operating
expenses and major
scheduled
turnaround expenses
per barrel sold 6.26 5.04 5.08 5.24
Direct operating
expenses excluding
major scheduled
turnaround expenses
per barrel sold $5.13 $5.04 $4.47 $4.68
Barrels sold
(barrels per day) 210,002 209,228 222,889 208,192
____________________
* See "Use of Non-GAAP Financial Measures" below.
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
% % % %
--- --- --- ---
Refining Throughput
and Production Data
(bpd):
Throughput:
Sweet 196,342 91.9 176,404 85.3 198,750 89.8 174,594 85.4
Medium - - 1,983 1.0 - - 2,321 1.1
Heavy sour 6,751 3.2 19,568 9.5 11,643 5.3 17,978 8.9
----- --- ------ --- ------ --- ------ ---
Total crude oil
throughput 203,093 95.1 197,955 95.8 210,393 95.1 194,893 95.4
All other feedstocks
and blendstocks 10,513 4.9 8,778 4.2 10,943 4.9 9,476 4.6
------ --- ----- --- ------ --- ----- ---
Total throughput 213,606 100.0 206,733 100.0 221,336 100.0 204,369 100.0
======= ===== ======= ===== ======= ===== ======= =====
Production:
Gasoline 105,712 49.5 106,120 51.2 112,268 50.6 106,774 52.2
Distillate 89,655 42.0 84,669 40.9 92,046 41.5 83,101 40.6
Other (excluding
internally produced
fuel) 18,107 8.5 16,390 7.9 17,385 7.9 14,738 7.2
------ --- ------ --- ------ --- ------ ---
Total refining
production (excluding
internally produced
fuel) 213,474 100.0 207,179 100.0 221,699 100.0 204,613 100.0
======= ===== ======= ===== ======= ===== ======= =====
Product price (dollars
per gallon):
Gasoline $1.63 $1.45 $1.56 $1.31
Distillate 1.67 1.45 1.58 1.30
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
Market Indicators
(dollars per barrel):
West Texas Intermediate
(WTI) NYMEX $48.20 $44.94 $49.36 $41.53
Crude Oil Differentials:
WTI less WTS (light/
medium sour) 0.97 1.47 1.15 0.82
WTI less WCS (heavy sour) 10.48 14.23 11.42 13.59
NYMEX Crack Spreads:
Gasoline 20.42 13.73 17.74 16.24
Heating Oil 21.05 14.34 17.24 13.04
NYMEX 2-1-1 Crack Spread 20.73 14.03 17.49 14.64
PADD II Group 3 Basis:
Gasoline (1.18) 0.48 (2.37) (3.59)
Ultra Low Sulfur Diesel 0.85 1.01 (0.44) (0.38)
PADD II Group 3 Product
Crack Spread:
Gasoline 19.23 14.21 15.37 12.65
Ultra Low Sulfur Diesel 21.90 15.35 16.80 12.65
PADD II Group 3 2-1-1 20.57 14.78 16.09 12.65
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
(in millions, except operating statistics)
Coffeyville Refinery
Financial Results:
Net sales $939.3 $788.1 $2,750.5 $2,094.1
Cost of materials
and other 767.7 669.9 2,349.7 1,763.3
Direct operating
expenses(1) 56.7 50.7 154.9 144.5
Major scheduled
turnaround expenses - - - 31.5
Depreciation and
amortization 17.4 17.7 53.8 51.2
---- ----
Gross profit 97.5 49.8 192.1 103.6
Add:
Direct operating
expenses(1) 56.7 50.7 154.9 144.5
Major scheduled
turnaround expenses - - - 31.5
Depreciation and
amortization 17.4 17.7 53.8 51.2
----
Refining margin* 171.6 118.2 400.8 330.8
FIFO impact,
(favorable)
unfavorable (10.1) 4.0 1.5 (22.4)
----- --- --- -----
Refining margin
adjusted for FIFO
impact* $161.5 $122.2 $402.3 $308.4
====== ====== ====== ======
Coffeyville Refinery
Key Operating
Statistics:
Per crude oil
throughput barrel:
Gross profit $8.26 $4.15 $5.37 $3.12
Refining margin* 14.52 9.86 11.21 9.94
FIFO impact,
(favorable)
unfavorable (0.86) 0.33 0.04 (0.67)
----- ---- ---- -----
Refining margin
adjusted for FIFO
impact* 13.66 10.19 11.25 9.27
Direct operating
expenses and major
scheduled
turnaround expenses 4.80 4.23 4.33 5.29
Direct operating
expenses excluding
major scheduled
turnaround expenses 4.80 4.23 4.33 4.34
Direct operating
expenses and major
scheduled
turnaround expenses
per barrel sold 4.50 3.93 3.99 4.80
Direct operating
expenses excluding
major scheduled
turnaround expenses
per barrel sold $4.50 $3.93 $3.99 $3.94
Barrels sold
(barrels per day) 136,776 140,256 142,238 133,729
____________________
* See "Use of Non-GAAP Financial Measures" below.
(1) Direct operating expenses for the three and nine
months ended September 30, 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 Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
% % % %
--- --- --- ---
Coffeyville Refinery
Throughput and
Production Data
(bpd):
Throughput:
Sweet 121,710 89.6 110,825 81.0 119,361 85.8 101,803 79.2
Medium - - - - - - 1,641 1.3
Heavy sour 6,751 5.0 19,568 14.3 11,643 8.4 17,978 13.9
----- --- ------ ---- ------ --- ------ ----
Total crude oil
throughput 128,461 94.6 130,393 95.3 131,004 94.2 121,422 94.4
All other feedstocks
and blendstocks 7,415 5.4 6,399 4.7 8,124 5.8 7,193 5.6
----- --- ----- --- ----- --- ----- ---
Total throughput 135,876 100.0 136,792 100.0 139,128 100.0 128,615 100.0
======= ===== ======= ===== ======= ===== ======= =====
Production:
Gasoline 67,598 49.1 70,013 50.3 70,697 50.1 67,298 51.5
Distillate 57,654 41.9 57,839 41.6 58,927 41.7 54,192 41.5
Other (excluding
internally produced
fuel) 12,355 9.0 11,286 8.1 11,619 8.2 9,191 7.0
------ --- ------ --- ------ --- ----- ---
Total refining
production (excluding
internally produced
fuel) 137,607 100.0 139,138 100.0 141,243 100.0 130,681 100.0
======= ===== ======= ===== ======= ===== ======= =====
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
(in millions, except operating statistics)
Wynnewood Refinery
Financial Results:
Net sales $445.3 $374.3 $1,393.7 $1,064.4
Cost of materials and
other 346.9 317.7 1,174.6 888.5
Direct operating
expenses(1) 42.5 46.3 117.0 122.7
Major scheduled turnaround
expenses 21.7 - 37.4 -
Depreciation and
amortization 12.9 12.7 38.5 37.9
---- ---- ---- ----
Gross profit (loss) 21.3 (2.4) 26.2 15.3
Add:
Direct operating
expenses(1) 42.5 46.3 117.0 122.7
Major scheduled turnaround
expenses 21.7 - 37.4 -
Depreciation and
amortization 12.9 12.7 38.5 37.9
---- ---- ---- ----
Refining margin* 98.4 56.6 219.1 175.9
FIFO impact, (favorable)
unfavorable (4.8) 3.8 (0.7) (7.3)
---- --- ---- ----
Refining margin adjusted
for FIFO impact* $93.6 $60.4 $218.4 $168.6
===== ===== ====== ======
Wynnewood Refinery Key
Operating Statistics:
Per crude oil throughput
barrel:
Gross profit (loss) $3.10 $(0.39) $1.21 $0.76
Refining margin* 14.33 9.10 10.11 8.74
FIFO impact, (favorable)
unfavorable (0.70) 0.61 (0.03) (0.36)
----- ---- ----- -----
Refining margin adjusted
for FIFO impact* 13.63 9.71 10.08 8.38
Direct operating expenses
and major scheduled
turnaround expenses 9.35 7.45 7.13 6.10
Direct operating expenses
excluding major scheduled
turnaround expenses 6.18 7.45 5.40 6.10
Direct operating expenses
and major scheduled
turnaround expenses per
barrel sold 9.53 7.29 7.01 6.01
Direct operating expenses
excluding major scheduled
turnaround expenses per
barrel sold $6.30 $7.29 $5.32 $6.01
Barrels sold (barrels per
day) 73,226 68,971 80,651 74,463
____________________
* See "Use of Non-GAAP Financial Measures" below.
(1) Direct operating expenses for the three and nine
months ended September 30, 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 Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
% % % %
--- --- --- ---
Wynnewood Refinery
Throughput and
Production Data
(bpd):
Throughput:
Sweet 74,632 96.0 65,579 93.8 79,389 96.6 72,791 96.1
Medium - - 1,983 2.8 - - 680 0.9
Heavy sour - - - - - - - -
--- --- --- --- --- --- --- ---
Total crude oil
throughput 74,632 96.0 67,562 96.6 79,389 96.6 73,471 97.0
All other feedstocks
and blendstocks 3,098 4.0 2,379 3.4 2,819 3.4 2,283 3.0
----- --- ----- --- ----- ----- ---
Total throughput 77,730 100.0 69,941 100.0 82,208 100.0 75,754 100.0
====== ===== ====== ===== ====== ===== ====== =====
Production:
Gasoline 38,114 50.2 36,107 53.1 41,571 51.6 39,476 53.4
Distillate 32,001 42.2 26,830 39.4 33,119 41.2 28,909 39.1
Other (excluding
internally produced
fuel) 5,752 7.6 5,104 7.5 5,766 7.2 5,547 7.5
----- --- ----- --- ----- ----- ---
Total refining
production (excluding
internally produced
fuel) 75,867 100.0 68,041 100.0 80,456 100.0 73,932 100.0
====== ===== ====== ===== ====== ===== ====== =====
Use of Non-GAAP Financial Measures
To supplement our actual results in accordance with GAAP for the applicable periods, CVR Refining, LP (the "Partnership") also uses 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 the Partnership's financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.
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 our refineries' performance as a general indication of the amount above our cost of materials and other at which we 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 Statements of Operations. Our calculation of refining margin may differ from similar calculations of other companies in our 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 is important to enable investors 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.
Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference between 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 our refineries' performance as a general indication of the amount above our cost of materials and other (taking into account the impact of our utilization of FIFO) at which we are able to sell refined products. Our calculation of refining margin adjusted for FIFO impact may differ from calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure. Under our FIFO accounting method, changes in crude oil prices can cause fluctuations in the inventory valuation of our 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.
The calculation of refining margin and refining margin adjusted for FIFO impact (each a non-GAAP financial measure), including a reconciliation to the most directly comparable GAAP financial measure for the three and nine months ended September 30, 2017 and 2016 is as follows:
Consolidated
Operating Data
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
(in millions)
Net sales $1,385.8 $1,163.5 $4,147.5 $3,161.9
Cost of materials
and other 1,114.4 987.5 3,523.7 2,651.7
Direct operating
expenses (exclusive
of depreciation and
amortization and
major scheduled
turnaround expenses
as reflected below) 99.2 97.0 271.9 267.2
Major scheduled
turnaround expenses 21.7 - 37.4 31.5
Depreciation and
amortization 31.8 31.9 96.8 93.7
---- ---- ---- ----
Gross profit 118.7 47.1 217.7 117.8
Add:
Direct operating
expenses (exclusive
of depreciation and
amortization and
major scheduled
turnaround expenses
as reflected below) 99.2 97.0 271.9 267.2
Major scheduled
turnaround expenses 21.7 - 37.4 31.5
Depreciation and
amortization 31.8 31.9 96.8 93.7
----
Refining margin 271.4 176.0 623.8 510.2
FIFO impact,
(favorable)
unfavorable (14.9) 7.7 0.8 (29.7)
----- --- --- -----
Refining margin
adjusted for FIFO
impact $256.5 $183.7 $624.6 $480.5
====== ====== ====== ======
The calculation of refining margin per crude oil throughput barrel and refining margin adjusted for FIFO impact per crude oil throughput barrel for the three and nine months ended September 30, 2017 and 2016 is as follows:
Consolidated Operating Data
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
Total crude oil
throughput barrels
per day 203,093 197,955 210,393 194,893
Days in the period 92 92 273 274
Total crude oil
throughput barrels 18,684,556 18,211,860 57,437,289 53,400,682
========== ========== ========== ==========
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
(in millions, except for $ per barrel data)
Refining margin $271.4 $176.0 $623.8 $510.2
Divided by: crude oil
throughput barrels 18.7 18.2 57.4 53.4
---- ---- ---- ----
Refining margin per
crude oil throughput
barrel $14.52 $9.66 $10.86 $9.55
====== ===== ====== =====
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
(in millions, except for $ per barrel data)
Refining margin
adjusted for FIFO
impact $256.5 $183.7 $624.6 $480.5
Divided by: crude oil
throughput barrels 18.7 18.2 57.4 53.4
---- ---- ---- ----
Refining margin
adjusted for FIFO
impact per crude oil
throughput barrel $13.72 $10.09 $10.87 $8.99
====== ====== ====== =====
Coffeyville Refinery
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
Total crude oil
throughput barrels
per day 128,461 130,393 131,004 121,422
Days in the period 92 92 273 274
Total crude oil
throughput barrels 11,818,412 11,996,156 35,764,092 33,269,628
========== ========== ========== ==========
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
(in millions, except for $ per barrel data)
Refining margin $171.6 $118.2 $400.8 $330.8
Divided by: crude oil
throughput barrels 11.8 12.0 35.8 33.3
---- ---- ---- ----
Refining margin per
crude oil throughput
barrel $14.52 $9.86 $11.21 $9.94
====== ===== ====== =====
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
(in millions, except for $ per barrel data)
Refining margin
adjusted for FIFO
impact $161.5 $122.2 $402.3 $308.4
Divided by: crude oil
throughput barrels 11.8 12.0 35.8 33.3
---- ---- ---- ----
Refining margin
adjusted for FIFO
impact per crude oil
throughput barrel $13.66 $10.19 $11.25 $9.27
====== ====== ====== =====
Wynnewood Refinery
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
Total crude oil
throughput barrels
per day 74,632 67,562 79,389 73,471
Days in the period 92 92 273 274
Total crude oil
throughput barrels 6,866,144 6,215,704 21,673,197 20,131,054
========= ========= ========== ==========
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
(in millions, except for $ per barrel data)
Refining margin $98.4 $56.6 $219.1 $175.9
Divided by: crude oil
throughput barrels 6.9 6.2 21.7 20.1
--- --- ---- ----
Refining margin per
crude oil throughput
barrel $14.33 $9.10 $10.11 $8.74
====== ===== ====== =====
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
(in millions, except for $ per barrel data)
Refining margin
adjusted for FIFO
impact $93.6 $60.4 $218.4 $168.6
Divided by: crude oil
throughput barrels 6.9 6.2 21.7 20.1
--- --- ---- ----
Refining margin
adjusted for FIFO
impact per crude oil
throughput barrel $13.63 $9.71 $10.08 $8.38
====== ===== ====== =====
EBITDA and Adjusted EBITDA. EBITDA represents net income before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA represents EBITDA adjusted for (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) loss on derivatives, net and (iv) current period settlements on derivative contracts. We present Adjusted EBITDA because it is the starting point for our calculation of available cash for distribution. EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be substituted for net income or cash flow from operations. Management believes that EBITDA and Adjusted EBITDA enable investors to better understand our ability to make distributions to our 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 to EBITDA and EBITDA to Adjusted EBITDA for the three and nine months ended September 30, 2017 and 2016 is as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
(in millions)
Net income $70.0 $15.9 $117.8 $26.0
Add:
Interest expense and
other financing costs,
net of interest income 11.8 10.8 34.8 31.7
Income tax expense - - - -
Depreciation and
amortization 33.0 32.5 99.5 95.6
---- ---- ---- ----
EBITDA 114.8 59.2 252.1 153.3
Add:
FIFO impact,
(favorable)
unfavorable (14.9) 7.7 0.8 (29.7)
Major scheduled
turnaround expenses 21.7 - 37.4 31.5
Loss on derivatives,
net 17.0 1.7 4.8 4.8
Current period
settlements on
derivative
contracts(1) - 6.7 1.1 35.2
Adjusted EBITDA $138.6 $75.3 $296.2 $195.1
====== ===== ====== ======
____________________
(1) Represents the portion of 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.
Available cash for distribution is not a recognized term under GAAP. Available cash should not be considered in isolation or as an alternative to net income or operating income as a measure of operating performance. In addition, available cash for distribution is not presented as, and should not be considered, an alternative to cash flows from operations or as a measure of liquidity. Available cash as reported by the Partnership may not be comparable to similarly titled measures of other entities, thereby limiting its usefulness as a comparative measure.
Available cash begins with Adjusted EBITDA reduced for cash needed for (i) debt service; (ii) reserves for environmental and maintenance capital expenditures; (iii) reserves for major scheduled turnaround expenses and (iv) to the extent applicable, reserves for future operating or capital needs that the board of directors of our general partner deems necessary or appropriate, if any. Available cash for distribution may be increased by the release of previously established cash reserves, if any, and other excess cash, at the discretion of the board of directors of our general partner. Actual distributions are set by the board of directors of our general partner. The board of directors of our general partner may modify our cash distribution policy at any time, and our partnership agreement does not require us to make distributions at all.
A reconciliation of Adjusted EBITDA to Available cash for distribution is as follows:
Three Months Ended Nine Months Ended
September 30, 2017 September 30, 2017
------------------ ------------------
(in millions, except per unit data)
Adjusted EBITDA $138.6 $296.2
Adjustments:
Less:
Cash needs for debt service (10.0) (30.0)
Reserves for environmental
and maintenance capital
expenditures (25.0) (78.1)
Reserves for major scheduled
turnaround expenses (15.0) (45.0)
Reserves for future operating
needs - (54.5)
Add:
Release of previously
established cash reserves 50.0 50.0
---- ----
Available cash for
distribution $138.6 $138.6
====== ======
Available cash for
distribution, per common
unit $0.94 $0.94
Common units outstanding 147.6 147.6
Derivatives Summary. The Partnership enters into commodity swap contracts through crack spread swap agreements with financial counterparties to fix the spread risk between the crude oil the Partnership purchases and the refined products the refineries produce for sale. Through these swaps, the Partnership will sell a fixed differential for the value between the selected refined product benchmark and the benchmark crude oil price, thereby locking in a margin for a portion of the refineries' production. The physical volumes are not exchanged and these contracts are net settled with cash. From time to time, the Partnership holds various NYMEX positions through a third-party clearing house.
The table below summarizes our open commodity swap positions as of September 30, 2017. The positions are primarily in the form of crack spread swap agreements with financial counterparties, wherein the Partnership has locked in differentials at the fixed prices noted below. As of September 30, 2017, the open commodity swap positions for 2017 and 2018 were comprised of approximately 39.8% for 2-1-1 crack swaps, 30.1% for distillate crack swaps and 30.1% for gasoline crack swaps.
Commodity Swaps Barrels Fixed Price
(1)
--------------- ------- ------------
Fourth Quarter 2017 7,050,000 $17.80
First Quarter 2018 7,050,000 18.66
Second Quarter 2018 1,950,000 21.09
Third Quarter 2018 150,000 19.22
------- -----
Total 16,200,000 $18.59
========== ======
________________
(1) Weighted-average price of all
positions for period indicated.
Q4 2017 Outlook. The table below summarizes our outlook for certain refining statistics for the fourth quarter of 2017. See "Forward-Looking Statements."
Q4 2017
Low High
--- ----
Refinery Statistics:
Total crude oil throughput
(bpd) 185,000 195,000
Total refining production (bpd) 200,000 215,000
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SOURCE CVR Refining, LP
