SUGAR LAND, Texas, April 27, 2017 /PRNewswire/ -- CVR Refining,
LP (NYSE: CVRR), a refiner and marketer of petroleum fuels, today
announced net income of $67.0 million
on net sales of $1,423.5 million for
the first quarter of 2017, compared to a net loss of $68.0 million on net sales of $834.0 million for the first quarter of 2016.
Adjusted EBITDA, a non-GAAP financial measure, for the 2017 first
quarter was $114.5 million compared
to adjusted EBITDA of $35.1 million
for the 2016 first quarter.
"CVR Refining's Coffeyville,
Kansas, and Wynnewood,
Oklahoma, refineries performed exceptionally well during the
2017 first quarter and exceeded the range of our outlook by posting
a combined crude throughput of 214,369 barrels per day (bpd), a
quarterly record for the company," said Jack Lipinski, chief executive officer.
"Another recent highlight was the successful completion of our
pipeline project with Velocity Midstream Partners," Lipinski said.
"The newly constructed crude oil pipeline, which commenced
operations in mid-April, directly links the South Central Oklahoma
Oil Province (SCOOP) play to CVR Refining's Wynnewood refinery, further enhancing our
crude supply.
"The Renewable Fuel Standard continues to be a disaster
searching for a solution," he continued. "The wild volatility in
the market for Renewable Identification Numbers (RINs) during the
first quarter once again proves that RINs are not fundamentally
priced but are in fact manipulated. The cost to produce a D-6
ethanol RIN is currently between 6 cents and
10 cents, yet it trades 40
cents higher. This is the price manipulation in the market
that must stop and CVR Refining supports the efforts of the many
refiners and independent gas station dealers to reform this
misguided regulation.
"As I have said many times before, RINs are an egregious tax on
independent, merchant refiners and small fuel retailers," Lipinski
concluded. "CVR Refining alone has incurred more than $670 million in RIN expenses since the beginning
of the program. Not only has the Company incurred this expense, but
our unitholders have experienced significant market cap losses.
RINs are sucking the lifeblood out of the merchant refining
industry. We hope and strongly believe that this pernicious RINs
program will be changed in the near future. However, in the
interest of prudent corporate fiscal management, CVR Refining will
not distribute cash this quarter."
Consolidated Operations
First quarter 2017 throughputs of crude oil and all other
feedstocks and blendstocks totaled 228,612 bpd. Throughputs of
crude oil and all other feedstocks and blendstocks for both
refineries totaled 195,859 bpd for the same period in 2016.
Refining margin adjusted for FIFO impact per crude oil
throughput barrel, a non-GAAP financial measure, was $11.54 in the 2017 first quarter, compared to
$7.19 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 first quarter were
$5.29, compared to $7.02 in the first quarter of 2016.
Distributions
CVR Refining announced today that it will not make a cash
distribution for the 2017 first quarter. 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, and other cash reserves deemed necessary or appropriate
by the board of directors of its general partner.
First Quarter 2017 Earnings Conference Call
CVR Refining previously announced that it will host its first
quarter 2017 Earnings Conference Call for analysts and investors on
Thursday, April 27, 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/1005/20615. 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/1005/20615. A repeat of the
conference call can be accessed by dialing (877) 660-6853,
conference ID 13659738.
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
March
31,
|
|
2017
|
|
2016
|
|
(in millions,
except per unit data)
|
Statement of
Operations Data:
|
|
|
|
Net sales
|
$
|
1,423.5
|
|
|
$
|
834.0
|
|
Operating costs and
expenses:
|
|
|
|
Cost of materials and
other
|
1,201.3
|
|
|
722.3
|
|
Direct operating
expenses(1)(2)
|
102.1
|
|
|
117.7
|
|
Depreciation and
amortization
|
33.3
|
|
|
30.9
|
|
Cost of
sales
|
1,336.7
|
|
|
870.9
|
|
Selling, general and
administrative expenses(1)
|
20.0
|
|
|
18.5
|
|
Depreciation and
amortization
|
0.8
|
|
|
0.6
|
|
Operating income
(loss)
|
66.0
|
|
|
(56.0)
|
|
Interest expense and
other financing costs
|
(11.2)
|
|
|
(10.8)
|
|
Interest
income
|
—
|
|
|
—
|
|
Gain (loss) on
derivatives, net
|
12.2
|
|
|
(1.2)
|
|
Other income
(expense), net
|
—
|
|
|
—
|
|
Income (loss) before
income tax expense
|
67.0
|
|
|
(68.0)
|
|
Income tax
expense
|
—
|
|
|
—
|
|
Net income
(loss)
|
$
|
67.0
|
|
|
$
|
(68.0)
|
|
|
|
|
|
Net income (loss) per
common unit - basic and diluted
|
$
|
0.45
|
|
|
$
|
(0.46)
|
|
|
|
|
|
Adjusted
EBITDA*
|
$
|
114.5
|
|
|
$
|
35.1
|
|
Available cash for
distribution*
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
Weighted average,
number of common units outstanding:
|
|
|
|
Basic and
diluted
|
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 months ended March 31, 2017 and 2016 are shown exclusive
of depreciation and amortization, which amounts are presented
separately below direct operating expenses and selling, general and
administrative expenses.
|
|
|
(2)
|
Direct operating
expenses includes $12.9 million and $29.4 million of major
scheduled turnaround expenses during the three months ended
March 31, 2017 and 2016, respectively.
|
|
|
|
|
|
|
|
|
|
|
As of March 31,
2017
|
|
As of December 31,
2016
|
|
|
|
(audited)
|
|
(in
millions)
|
Balance Sheet
Data:
|
|
|
|
Cash and cash
equivalents
|
$
|
408.8
|
|
|
$
|
314.1
|
|
Working
capital
|
394.0
|
|
|
313.7
|
|
Total
assets
|
2,371.8
|
|
|
2,331.9
|
|
Total debt, including
current portion
|
541.4
|
|
|
541.5
|
|
Total partners'
capital
|
1,363.7
|
|
|
1,296.7
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
|
(in
millions)
|
Cash Flow
Data:
|
|
|
|
Net cash flow
provided by (used in):
|
|
|
|
Operating
activities
|
$
|
116.1
|
|
|
$
|
3.0
|
|
Investing
activities
|
(21.0)
|
|
|
(44.0)
|
|
Financing
activities
|
(0.4)
|
|
|
(0.4)
|
|
Net cash
flow
|
$
|
94.7
|
|
|
$
|
(41.4)
|
|
|
|
|
|
Capital expenditures
for property, plant and equipment:
|
|
|
|
Maintenance capital
expenditures
|
$
|
17.5
|
|
|
$
|
25.3
|
|
Growth capital
expenditures
|
2.1
|
|
|
18.7
|
|
Total capital
expenditures
|
$
|
19.6
|
|
|
$
|
44.0
|
|
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
March
31,
|
|
2017
|
|
2016
|
Key Operating
Statistics:
|
|
|
|
Per crude oil
throughput barrel:
|
|
|
|
Gross profit
(loss)
|
$
|
4.50
|
|
|
$
|
(2.20)
|
|
Refining
margin*
|
11.52
|
|
|
6.67
|
|
FIFO impact,
unfavorable
|
0.02
|
|
|
0.52
|
|
Refining margin
adjusted for FIFO impact*
|
11.54
|
|
|
7.19
|
|
Direct operating
expenses and major scheduled turnaround expenses
|
5.29
|
|
|
7.02
|
|
Direct operating
expenses excluding major scheduled turnaround expenses
|
4.63
|
|
|
5.27
|
|
Direct operating
expenses and major scheduled turnaround expenses per barrel
sold
|
4.97
|
|
|
6.40
|
|
Direct operating
expenses excluding major scheduled turnaround expenses per barrel
sold
|
$
|
4.34
|
|
|
$
|
4.80
|
|
Barrels sold (barrels
per day)
|
228,522
|
|
|
201,970
|
|
______________________________
* See "Use of
Non-GAAP Financial Measures" below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
Refining
Throughput and Production Data (bpd):
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
Sweet
|
197,853
|
|
|
86.6
|
%
|
|
170,728
|
|
|
87.2
|
%
|
Medium
|
—
|
|
|
—
|
%
|
|
1,513
|
|
|
0.8
|
%
|
Heavy sour
|
16,516
|
|
|
7.2
|
%
|
|
11,914
|
|
|
6.0
|
%
|
Total crude oil
throughput
|
214,369
|
|
|
93.8
|
%
|
|
184,155
|
|
|
94.0
|
%
|
All other feedstocks
and blendstocks
|
14,243
|
|
|
6.2
|
%
|
|
11,704
|
|
|
6.0
|
%
|
Total
throughput
|
228,612
|
|
|
100.0
|
%
|
|
195,859
|
|
|
100.0
|
%
|
Production:
|
|
|
|
|
|
|
|
Gasoline
|
118,955
|
|
|
51.9
|
%
|
|
105,878
|
|
|
54.2
|
%
|
Distillate
|
89,907
|
|
|
39.2
|
%
|
|
77,996
|
|
|
39.9
|
%
|
Other (excluding
internally produced fuel)
|
20,298
|
|
|
8.9
|
%
|
|
11,519
|
|
|
5.9
|
%
|
Total refining
production (excluding internally produced fuel)
|
229,160
|
|
|
100.0
|
%
|
|
195,393
|
|
|
100.0
|
%
|
Product price
(dollars per gallon):
|
|
|
|
|
|
|
|
Gasoline
|
$
|
1.54
|
|
|
|
|
$
|
1.04
|
|
|
|
Distillate
|
1.58
|
|
|
|
|
1.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
Market Indicators
(dollars per barrel):
|
|
|
|
West Texas
Intermediate (WTI) NYMEX
|
$
|
51.78
|
|
|
$
|
33.63
|
|
Crude Oil
Differentials:
|
|
|
|
WTI less WTS
(light/medium sour)
|
1.42
|
|
|
0.13
|
|
WTI less WCS (heavy
sour)
|
13.77
|
|
|
13.62
|
|
NYMEX Crack
Spreads:
|
|
|
|
Gasoline
|
14.68
|
|
|
15.84
|
|
Heating
Oil
|
15.54
|
|
|
11.91
|
|
NYMEX 2-1-1 Crack
Spread
|
15.11
|
|
|
13.88
|
|
PADD II Group 3
Basis:
|
|
|
|
Gasoline
|
(1.96)
|
|
|
(5.88)
|
|
Ultra Low Sulfur
Diesel
|
(1.58)
|
|
|
(1.01)
|
|
PADD II Group 3
Product Crack Spread:
|
|
|
|
Gasoline
|
12.71
|
|
|
9.97
|
|
Ultra Low Sulfur
Diesel
|
13.96
|
|
|
10.90
|
|
PADD II Group 3
2-1-1
|
13.34
|
|
|
10.43
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
|
(in millions,
except operating statistics)
|
Coffeyville
Refinery Financial Results:
|
|
|
|
Net sales
|
$
|
951.3
|
|
|
$
|
528.0
|
|
Cost of materials and
other
|
808.4
|
|
|
462.7
|
|
Direct operating
expenses(1)
|
50.7
|
|
|
47.6
|
|
Major scheduled
turnaround expenses
|
—
|
|
|
29.4
|
|
Depreciation and
amortization
|
19.1
|
|
|
16.8
|
|
Gross profit
(loss)
|
73.1
|
|
|
(28.5)
|
|
Add:
|
|
|
|
Direct operating
expenses(1)
|
50.7
|
|
|
47.6
|
|
Major scheduled
turnaround expenses
|
—
|
|
|
29.4
|
|
Depreciation and
amortization
|
19.1
|
|
|
16.8
|
|
Refining
margin*
|
142.9
|
|
|
65.3
|
|
FIFO impact,
unfavorable
|
1.5
|
|
|
3.9
|
|
Refining margin
adjusted for FIFO impact*
|
$
|
144.4
|
|
|
$
|
69.2
|
|
|
|
|
|
Coffeyville
Refinery Key Operating Statistics:
|
|
|
|
Per crude oil
throughput barrel:
|
|
|
|
Gross profit
(loss)
|
$
|
6.22
|
|
|
$
|
(2.94)
|
|
Refining
margin*
|
12.15
|
|
|
6.75
|
|
FIFO impact,
unfavorable
|
0.13
|
|
|
0.40
|
|
Refining margin
adjusted for FIFO impact*
|
12.28
|
|
|
7.15
|
|
Direct operating
expenses and major scheduled turnaround expenses
|
4.31
|
|
|
7.96
|
|
Direct operating
expenses excluding major scheduled turnaround expenses
|
4.31
|
|
|
4.92
|
|
Direct operating
expenses and major scheduled turnaround expenses per barrel
sold
|
3.87
|
|
|
6.89
|
|
Direct operating
expenses excluding major scheduled turnaround expenses per barrel
sold
|
$
|
3.87
|
|
|
$
|
4.26
|
|
Barrels sold (barrels
per day)
|
145,555
|
|
|
122,838
|
|
______________________________
* See "Use of
Non-GAAP Financial Measures" below.
|
|
(1)
|
Direct operating
expenses for the three months ended March 31, 2017 and 2016
are shown exclusive of depreciation and amortization, which amounts
are presented separately below direct operating
expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
Coffeyville
Refinery Throughput and Production Data (bpd):
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
Sweet
|
114,243
|
|
|
80.6
|
%
|
|
92,938
|
|
|
80.3
|
%
|
Medium
|
—
|
|
|
—
|
%
|
|
1,513
|
|
|
1.3
|
%
|
Heavy sour
|
16,516
|
|
|
11.7
|
%
|
|
11,914
|
|
|
10.3
|
%
|
Total crude oil
throughput
|
130,759
|
|
|
92.3
|
%
|
|
106,365
|
|
|
91.9
|
%
|
All other feedstocks
and blendstocks
|
10,915
|
|
|
7.7
|
%
|
|
9,344
|
|
|
8.1
|
%
|
Total
throughput
|
141,674
|
|
|
100.0
|
%
|
|
115,709
|
|
|
100.0
|
%
|
Production:
|
|
|
|
|
|
|
|
Gasoline
|
74,538
|
|
|
51.6
|
%
|
|
64,033
|
|
|
54.8
|
%
|
Distillate
|
59,444
|
|
|
41.2
|
%
|
|
47,147
|
|
|
40.3
|
%
|
Other (excluding
internally produced fuel)
|
10,335
|
|
|
7.2
|
%
|
|
5,768
|
|
|
4.9
|
%
|
Total refining
production (excluding internally produced fuel)
|
144,317
|
|
|
100.0
|
%
|
|
116,948
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
|
(in millions,
except operating statistics)
|
Wynnewood Refinery
Financial Results:
|
|
|
|
Net sales
|
$
|
471.1
|
|
|
$
|
304.8
|
|
Cost of materials and
other
|
393.1
|
|
|
259.4
|
|
Direct operating
expenses(1)
|
38.6
|
|
|
40.6
|
|
Major scheduled
turnaround expenses
|
12.9
|
|
|
—
|
|
Depreciation and
amortization
|
12.8
|
|
|
12.6
|
|
Gross profit
(loss)
|
13.7
|
|
|
(7.8)
|
|
Add:
|
|
|
|
Direct operating
expenses(1)
|
38.6
|
|
|
40.6
|
|
Major scheduled
turnaround expenses
|
12.9
|
|
|
—
|
|
Depreciation and
amortization
|
12.8
|
|
|
12.6
|
|
Refining
margin*
|
78.0
|
|
|
45.4
|
|
FIFO impact,
(favorable) unfavorable
|
(1.1)
|
|
|
4.8
|
|
Refining margin
adjusted for FIFO impact*
|
$
|
76.9
|
|
|
$
|
50.2
|
|
|
|
|
|
Wynnewood Refinery
Key Operating Statistics:
|
|
|
|
Per crude oil
throughput barrel:
|
|
|
|
Gross profit
(loss)
|
$
|
1.83
|
|
|
$
|
(1.10)
|
|
Refining
margin*
|
10.36
|
|
|
6.41
|
|
FIFO impact,
(favorable) unfavorable
|
(0.15)
|
|
|
0.68
|
|
Refining margin
adjusted for FIFO impact*
|
10.21
|
|
|
7.09
|
|
Direct operating
expenses and major scheduled turnaround expenses
|
6.83
|
|
|
5.74
|
|
Direct operating
expenses excluding major scheduled turnaround expenses
|
5.12
|
|
|
5.74
|
|
Direct operating
expenses and major scheduled turnaround expenses per barrel
sold
|
6.89
|
|
|
5.64
|
|
Direct operating
expenses excluding major scheduled turnaround expenses per barrel
sold
|
$
|
5.16
|
|
|
$
|
5.64
|
|
Barrels sold (barrels
per day)
|
82,967
|
|
|
79,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________
* See "Use of
Non-GAAP Financial Measures" below.
|
|
(1)
|
Direct operating
expenses for the three months ended March 31, 2017 and 2016
are shown exclusive of depreciation and amortization, which amounts
are presented separately below direct operating
expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
Wynnewood Refinery
Throughput and Production Data (bpd):
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
Sweet
|
83,610
|
|
|
96.2
|
%
|
|
77,790
|
|
|
97.1
|
%
|
Medium
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
Heavy sour
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
Total crude oil
throughput
|
83,610
|
|
|
96.2
|
%
|
|
77,790
|
|
|
97.1
|
%
|
All other feedstocks
and blendstocks
|
3,328
|
|
|
3.8
|
%
|
|
2,360
|
|
|
2.9
|
%
|
Total
throughput
|
86,938
|
|
|
100.0
|
%
|
|
80,150
|
|
|
100.0
|
%
|
Production:
|
|
|
|
|
|
|
|
Gasoline
|
44,417
|
|
|
52.4
|
%
|
|
41,845
|
|
|
53.4
|
%
|
Distillate
|
30,463
|
|
|
35.9
|
%
|
|
30,849
|
|
|
39.3
|
%
|
Other (excluding
internally produced fuel)
|
9,963
|
|
|
11.7
|
%
|
|
5,751
|
|
|
7.3
|
%
|
Total refining
production (excluding internally produced fuel)
|
84,843
|
|
|
100.0
|
%
|
|
78,445
|
|
|
100.0
|
%
|
Use of Non-GAAP Financial Measures
To supplement our actual results in accordance with GAAP for the
applicable periods, 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 months ended March 31, 2017 and 2016 is
as follows:
|
|
|
|
|
|
|
|
|
Consolidated
Operating Data
|
|
|
|
|
Three Months
Ended
March 31,
|
|
2017
|
|
2016
|
|
(in
millions)
|
Net Sales
|
$
|
1,423.5
|
|
|
$
|
834.0
|
|
Cost of materials and
other
|
1,201.3
|
|
|
722.3
|
|
Direct operating
expenses (exclusive of depreciation and amortization as reflected
below)
|
89.2
|
|
|
88.3
|
|
Major schedule
turnaround expenses
|
12.9
|
|
|
29.4
|
|
Depreciation and
amortization
|
33.3
|
|
|
30.9
|
|
Gross profit
(loss)
|
86.8
|
|
|
(36.9)
|
|
Add:
|
|
|
|
Direct operating
expenses (exclusive of depreciation and amortization as reflected
below)
|
89.2
|
|
|
88.3
|
|
Major schedule
turnaround expenses
|
12.9
|
|
|
29.4
|
|
Depreciation and
amortization
|
33.3
|
|
|
30.9
|
|
Refining
Margin
|
222.2
|
|
|
111.7
|
|
FIFO impact,
unfavorable
|
0.3
|
|
|
8.8
|
|
Refining Margin
adjusted for FIFO impact
|
$
|
222.5
|
|
|
$
|
120.5
|
|
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 months ended March 31, 2017
and 2016 is as follows:
|
|
|
|
|
|
|
Consolidated
Operating Data
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
Total crude oil
throughput barrels per day
|
214,369
|
|
|
184,155
|
|
Days in the
period
|
90
|
|
|
91
|
|
Total crude oil
throughput barrels
|
19,293,210
|
|
|
16,758,105
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
|
(in millions,
except for $ per barrel data)
|
Refining
Margin
|
$
|
222.2
|
|
|
$
|
111.7
|
|
Divided by: crude oil
throughput barrels
|
19.3
|
|
|
16.8
|
|
Refining Margin per
crude oil throughput barrel
|
$
|
11.52
|
|
|
$
|
6.67
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
|
(in millions,
except for $ per barrel data)
|
Refining Margin
adjusted for FIFO impact
|
$
|
222.5
|
|
|
$
|
120.5
|
|
Divided by: crude oil
throughput barrels
|
19.3
|
|
|
16.8
|
|
Refining Margin
adjusted for FIFO impact per crude oil throughput barrel
|
$
|
11.54
|
|
|
$
|
7.19
|
|
|
|
|
|
|
|
|
Coffeyville
Refinery
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
Total crude oil
throughput barrels per day
|
130,759
|
|
|
106,365
|
|
Days in the
period
|
90
|
|
|
91
|
|
Total crude oil
throughput barrels
|
11,768,310
|
|
|
9,679,215
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
|
(in millions,
except for $ per barrel data)
|
Refining
Margin
|
$
|
142.9
|
|
|
$
|
65.3
|
|
Divided by: crude oil
throughput barrels
|
11.8
|
|
|
9.7
|
|
Refining Margin per
crude oil throughput barrel
|
$
|
12.15
|
|
|
$
|
6.75
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
|
(in millions,
except for $ per barrel data)
|
Refining Margin
adjusted for FIFO impact
|
$
|
144.4
|
|
|
$
|
69.2
|
|
Divided by: crude oil
throughput barrels
|
11.8
|
|
|
9.7
|
|
Refining Margin
adjusted for FIFO impact per crude oil throughput barrel
|
$
|
12.28
|
|
|
$
|
7.15
|
|
|
|
|
|
|
|
|
Wynnewood
Refinery
|
|
|
|
|
Three Months Ended
March 31,
|
|
2017
|
|
2016
|
Total crude oil
throughput barrels per day
|
83,610
|
|
|
77,790
|
|
Days in the
period
|
90
|
|
|
91
|
|
Total crude oil
throughput barrels
|
7,524,900
|
|
|
7,078,890
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2017
|
|
2016
|
|
(in millions,
except for $ per barrel data)
|
Refining
Margin
|
$
|
78.0
|
|
|
$
|
45.4
|
|
Divided by: crude oil
throughput barrels
|
7.5
|
|
|
7.1
|
|
Refining Margin per
crude oil throughput barrel
|
$
|
10.36
|
|
|
$
|
6.41
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2017
|
|
2016
|
|
(in millions,
except for $ per barrel data)
|
Refining Margin
adjusted for FIFO impact
|
$
|
76.9
|
|
|
$
|
50.2
|
|
Divided by: crude oil
throughput barrels
|
7.5
|
|
|
7.1
|
|
Refining Margin
adjusted for FIFO impact per crude oil throughput barrel
|
$
|
10.21
|
|
|
$
|
7.09
|
|
EBITDA and Adjusted EBITDA. EBITDA represents net income (loss)
before (i) interest expense and other financing costs, net of
interest income, (ii) income tax expense and (iii) depreciation and
amortization. Adjusted EBITDA 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) (gain) 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 (loss) 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 (loss) to EBITDA and EBITDA to
Adjusted EBITDA for the three months ended March 31, 2017 and
2016 is as follows:
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
|
(in
millions)
|
Net income
(loss)
|
$
|
67.0
|
|
|
$
|
(68.0)
|
|
Add:
|
|
|
|
Interest expense and
other financing costs, net of interest income
|
11.2
|
|
|
10.8
|
|
Income tax
expense
|
—
|
|
|
—
|
|
Depreciation and
amortization
|
34.1
|
|
|
31.5
|
|
EBITDA
|
112.3
|
|
|
(25.7)
|
|
Add:
|
|
|
|
FIFO impact,
unfavorable
|
0.3
|
|
|
8.8
|
|
Major scheduled
turnaround expenses
|
12.9
|
|
|
29.4
|
|
(Gain) loss on
derivatives, net
|
(12.2)
|
|
|
1.2
|
|
Current period
settlements on derivative contracts(1)
|
1.2
|
|
|
21.4
|
|
Adjusted
EBITDA
|
$
|
114.5
|
|
|
$
|
35.1
|
|
_________________________
|
|
(1)
|
Represents the
portion of (gain) loss on derivatives, net related to contracts
that matured during the respective periods and settled with
counterparties. There are no premiums paid or received at inception
of the derivative contracts and upon settlement, there is no cost
recovery associated with these contracts.
|
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 (loss) or operating income (loss) 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
March 31,
2017
|
|
(in millions,
except per unit data)
|
Adjusted
EBITDA
|
$
|
114.5
|
|
Adjustments:
|
|
Less:
|
|
Cash needs for debt
service
|
(10.0)
|
|
Reserves for
environmental and maintenance capital expenditures
|
(35.0)
|
|
Reserves for major
scheduled turnaround expenses
|
(15.0)
|
|
Reserves for future
operating needs
|
(54.5)
|
|
Available cash for
distribution
|
$
|
—
|
|
|
|
Available cash for
distribution, per common unit
|
$
|
—
|
|
Common units
outstanding
|
147.6
|
|
Q2 2017 Outlook. The table below summarizes our outlook
for certain refining statistics for the second quarter of 2017. See
"Forward-Looking Statements."
|
|
|
|
|
|
|
|
Q2
2017
|
|
Low
|
|
High
|
Refinery
Statistics:
|
|
|
|
Total crude oil
throughput (bpd)
|
200,000
|
|
|
210,000
|
|
Total refining
production (bpd)
|
210,000
|
|
|
220,000
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cvr-refining-reports-2017-first-quarter-results-300447045.html
SOURCE CVR Refining, LP