SUGAR LAND, Texas, Oct. 27, 2016 /PRNewswire/ -- CVR Refining,
LP (NYSE: CVRR), a refiner and marketer of petroleum fuels, today
announced third quarter 2016 net income of $15.9 million on net sales of $1,163.5 million, compared to net income of
$138.9 million on net sales of
$1,361.6 million for the third
quarter of 2015. Adjusted EBITDA, a non-GAAP financial measure, for
the 2016 third quarter was $75.3
million compared to adjusted EBITDA of $229.6 million for the 2015 third quarter.
For the first nine months of 2016, net income was $26.0 million on net sales of $3,161.9 million, compared to net income of
$413.4 million on net sales of
$4,213.6 million for the comparable
period a year earlier. Adjusted EBITDA for the first nine months of
2016 was $195.1 million, compared to
adjusted EBITDA of $585.6 million for
the first nine months of 2015.
"A highlight of the 2016 third quarter was the signing of a
definitive agreement with Velocity Midstream Partners for the
construction of a crude oil pipeline directly linking the fairway
of the South Central Oklahoma Oil Province (SCOOP) to CVR
Refining's Wynnewood refinery,
which will further enhance our crude supply," said Jack Lipinski, chief executive officer. "Our
Coffeyville refinery also ran exceptionally well during the quarter
with a total crude throughput of 130,393 barrels per day (bpd).
"As I mentioned last quarter, the exorbitant costs of Renewable
Identification Numbers (RINs) under the broken Renewable Fuel
Standard (RFS) program continue to negatively impact our overall
financial results," Lipinski said. "The Environmental Protection
Agency (EPA) must change the point of obligation and pull back on
its proposed 2017 Renewable Volume Obligations (RVOs) before
escalating RIN prices cause irreparable harm to merchant refiners.
The EPA is now in the process of literally destroying small and
medium-sized merchant refineries like ours that do not control the
blending and retail sale of their fuel.
"It is absurd that the EPA continues to punish and ruin merchant
refineries that have done nothing wrong when the EPA itself admits
that the RFS program is not working," he continued. "The primary
beneficiaries of the broken RFS program are 'Big Oil,' large retail
chains and the Wall Street speculators that are manipulating the
RINs' market for illicit gain, causing the compliance costs of
merchant refineries to skyrocket - all with the EPA's imprimatur.
Even the EPA's own former Chief of Criminal Investigations,
Doug Parker, recently stated
publicly that 'structural vulnerabilities in the regulations,
limited agency oversight, and a lack of market transparency within
the RFS made this program a ripe target for massive fraud and
illicit gain.'
"The EPA now has the opportunity to avert another 2008-style
financial crisis, but only if it takes resolute and immediate
action," Lipinski added. "If regulatory oversight of the 'wild
west' RINs' market, as well as an investigation of the criminal
activities identified by Doug
Parker, are not brought to bear, a number of small and
medium-sized refineries will be driven into bankruptcy, which will
do for 'Big Oil' what the Federal Trade Commission would never
allow them to do for themselves - destroy all of their competitors
in the refining business. This will allow them to strengthen
oligopolies that will control the supply of gasoline, giving them
the ability to cause prices to spike and squeeze consumers at will,
which will start a domino effect, crippling the transportation
industry and causing many businesses to suffer and even fail.
"We therefore implore the EPA, before it is too late and its
rule becomes final on Nov. 30, to
take decisive action - by drastically lowering the proposed RVOs
for 2017," he said. "It is important to note that the volumes of
ethanol and biofuels that the EPA has indicated it will require
refineries to blend in 2017 are mathematically impossible to
achieve. Therefore, the demands being made on merchant refineries
will be impossible for them to achieve. This has become an 'Alice
in Wonderland' situation - but it is not funny because of the dire
consequences that it will soon manifest.
"We invite everyone to visit our new online resource,
www.FixTheRFS.org, to learn more about these important issues, our
position and how the EPA can fix this broken program," Lipinski
concluded.
Consolidated Operations
Third quarter 2016 throughputs of crude oil and all other
feedstocks and blendstocks totaled 206,733 bpd. Throughputs of
crude oil and all other feedstocks and blendstocks for both
refineries totaled 210,917 bpd for the same period in 2015.
Refining margin adjusted for FIFO impact per crude oil
throughput barrel, a non-GAAP financial measure, was $10.09 in the 2016 third quarter, compared to
$18.65 during the same period in
2015. Direct operating expenses (exclusive of depreciation and
amortization), excluding major scheduled turnaround expenses, per
crude oil throughput barrel, for the 2016 third quarter were
$5.33, compared to $5.27 in the third quarter of 2015.
Distributions
CVR Refining will not pay a cash distribution for the 2016 third
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, RINs' costs and cash
reserves deemed necessary or appropriate by the board of directors
of its general partner.
Third Quarter 2016 Earnings Conference Call
CVR Refining previously announced that it will host its third
quarter 2016 Earnings Conference Call for analysts and investors on
Thursday, Oct. 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/1005/17702. 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/1005/17702. A repeat of the
conference call can be accessed by dialing (877) 660-6853,
conference ID 13647399.
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 supporting logistics assets
including approximately 340 miles of active owned and leased
pipelines, 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:
Angie Dasbach
CVR Refining, LP
(281) 207-3550
MediaRelations@CVRRefining.com
CVR Refining,
LP
|
|
Financial and
Operational Data (all information in this release is unaudited
except as otherwise noted).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(in millions,
except per unit data)
|
Statement of
Operations Data:
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,163.5
|
|
|
$
|
1,361.6
|
|
|
$
|
3,161.9
|
|
|
$
|
4,213.6
|
|
Cost of product
sold
|
987.5
|
|
|
1,063.7
|
|
|
2,651.7
|
|
|
3,300.8
|
|
Direct operating
expenses (1)
|
97.0
|
|
|
112.6
|
|
|
298.7
|
|
|
289.9
|
|
Flood insurance
recovery
|
—
|
|
|
—
|
|
|
—
|
|
|
(27.3)
|
|
Selling, general and
administrative expenses
|
18.1
|
|
|
18.2
|
|
|
53.4
|
|
|
54.9
|
|
Depreciation and
amortization
|
32.5
|
|
|
29.9
|
|
|
95.6
|
|
|
98.1
|
|
Operating
income
|
28.4
|
|
|
137.2
|
|
|
62.5
|
|
|
497.2
|
|
Interest expense and
other financing costs
|
(10.8)
|
|
|
(10.4)
|
|
|
(31.7)
|
|
|
(32.2)
|
|
Interest
income
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.3
|
|
Gain (loss) on
derivatives, net
|
(1.7)
|
|
|
11.8
|
|
|
(4.8)
|
|
|
(52.2)
|
|
Other income,
net
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.3
|
|
Income before income
tax expense
|
15.9
|
|
|
138.9
|
|
|
26.0
|
|
|
413.4
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income
|
$
|
15.9
|
|
|
$
|
138.9
|
|
|
$
|
26.0
|
|
|
$
|
413.4
|
|
|
|
|
|
|
|
|
|
Net income per common
unit - basic and diluted
|
$
|
0.11
|
|
|
$
|
0.94
|
|
|
$
|
0.18
|
|
|
$
|
2.80
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA*
|
$
|
75.3
|
|
|
$
|
229.6
|
|
|
$
|
195.1
|
|
|
$
|
585.6
|
|
Available cash for
distribution*
|
$
|
0.3
|
|
|
$
|
149.7
|
|
|
$
|
0.3
|
|
|
$
|
405.7
|
|
|
|
|
|
|
|
|
|
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 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, 2016
|
|
As of December
31,
2015
|
|
|
|
(audited)
|
|
(in
millions)
|
Balance Sheet
Data:
|
|
|
|
Cash and cash
equivalents
|
$
|
285.9
|
|
|
$
|
187.3
|
|
Working capital
(1)
|
345.0
|
|
|
297.5
|
|
Total assets
(1)
|
2,277.3
|
|
|
2,189.0
|
|
Total debt, including
current portion (1)
|
573.3
|
|
|
573.8
|
|
Total partners'
capital
|
1,307.4
|
|
|
1,281.4
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Prior period
amounts have been retrospectively adjusted for Accounting Standard
Update No. 2015-03, which requires that costs incurred to issue
debt be presented in the balance sheet as a direct reduction from
the carrying value of the debt.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(in
millions)
|
Cash Flow
Data:
|
|
|
|
|
|
|
|
Net cash flow
provided by (used in):
|
|
|
|
|
|
|
|
Operating
activities
|
$
|
145.6
|
|
|
$
|
258.4
|
|
|
$
|
186.4
|
|
|
$
|
566.9
|
|
Investing
activities
|
(18.6)
|
|
|
(45.4)
|
|
|
(86.6)
|
|
|
(123.5)
|
|
Financing
activities
|
(0.4)
|
|
|
(145.1)
|
|
|
(1.2)
|
|
|
(312.5)
|
|
Net cash
flow
|
$
|
126.6
|
|
|
$
|
67.9
|
|
|
$
|
98.6
|
|
|
$
|
130.9
|
|
|
|
|
|
|
|
|
|
Capital expenditures
for property, plant and equipment:
|
|
|
|
|
|
|
|
Maintenance capital
expenditures
|
$
|
10.5
|
|
|
$
|
25.8
|
|
|
$
|
50.1
|
|
|
$
|
66.5
|
|
Growth capital
expenditures
|
4.9
|
|
|
19.7
|
|
|
33.3
|
|
|
57.1
|
|
Total capital
expenditures
|
$
|
15.4
|
|
|
$
|
45.5
|
|
|
$
|
83.4
|
|
|
$
|
123.6
|
|
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
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Key Operating
Statistics:
|
|
|
|
|
|
|
|
Per crude oil
throughput barrel:
|
|
|
|
|
|
|
|
Refining
margin*
|
$
|
9.66
|
|
|
$
|
16.17
|
|
|
$
|
9.55
|
|
|
$
|
16.38
|
|
FIFO impact,
(favorable) unfavorable
|
0.43
|
|
|
2.48
|
|
|
(0.56)
|
|
|
0.60
|
|
Refining margin
adjusted for FIFO impact*
|
10.09
|
|
|
18.65
|
|
|
8.99
|
|
|
16.98
|
|
Gross
profit
|
2.55
|
|
|
8.44
|
|
|
2.17
|
|
|
9.91
|
|
Gross profit
excluding flood insurance recovery*
|
2.55
|
|
|
8.44
|
|
|
2.17
|
|
|
9.42
|
|
Direct operating
expenses and major scheduled turnaround expenses
|
5.33
|
|
|
6.11
|
|
|
5.59
|
|
|
5.20
|
|
Direct operating
expenses excluding major scheduled turnaround expenses
|
5.33
|
|
|
5.27
|
|
|
5.00
|
|
|
4.89
|
|
Direct operating
expenses and major scheduled turnaround expenses per barrel
sold
|
5.04
|
|
|
5.79
|
|
|
5.24
|
|
|
4.88
|
|
Direct operating
expenses excluding major scheduled
turnaround expenses per barrel sold
|
$
|
5.04
|
|
|
$
|
4.99
|
|
|
$
|
4.68
|
|
|
$
|
4.59
|
|
Barrels sold (barrels
per day)
|
209,228
|
|
|
211,440
|
|
|
208,192
|
|
|
217,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* See
"Use of Non-GAAP Financial Measures" below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Refining
Throughput and Production Data (bpd):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweet
|
176,404
|
|
|
85.3
|
%
|
|
185,228
|
|
|
87.8
|
%
|
|
174,594
|
|
|
85.4
|
%
|
|
184,481
|
|
|
85.5
|
%
|
Medium
|
1,983
|
|
|
1.0
|
%
|
|
2,037
|
|
|
1.0
|
%
|
|
2,321
|
|
|
1.1
|
%
|
|
3,220
|
|
|
1.5
|
%
|
Heavy sour
|
19,568
|
|
|
9.5
|
%
|
|
12,891
|
|
|
6.1
|
%
|
|
17,978
|
|
|
8.9
|
%
|
|
16,476
|
|
|
7.7
|
%
|
Total crude oil
throughput
|
197,955
|
|
|
95.8
|
%
|
|
200,156
|
|
|
94.9
|
%
|
|
194,893
|
|
|
95.4
|
%
|
|
204,177
|
|
|
94.7
|
%
|
All other feedstocks
and blendstocks
|
8,778
|
|
|
4.2
|
%
|
|
10,761
|
|
|
5.1
|
%
|
|
9,476
|
|
|
4.6
|
%
|
|
11,487
|
|
|
5.3
|
%
|
Total
throughput
|
206,733
|
|
|
100.0
|
%
|
|
210,917
|
|
|
100.0
|
%
|
|
204,369
|
|
|
100.0
|
%
|
|
215,664
|
|
|
100.0
|
%
|
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
106,120
|
|
|
51.2
|
%
|
|
103,479
|
|
|
48.9
|
%
|
|
106,774
|
|
|
52.2
|
%
|
|
106,650
|
|
|
49.1
|
%
|
Distillate
|
84,669
|
|
|
40.9
|
%
|
|
88,479
|
|
|
41.8
|
%
|
|
83,101
|
|
|
40.6
|
%
|
|
91,262
|
|
|
42.0
|
%
|
Other (excluding
internally produced fuel)
|
16,390
|
|
|
7.9
|
%
|
|
19,608
|
|
|
9.3
|
%
|
|
14,738
|
|
|
7.2
|
%
|
|
19,210
|
|
|
8.9
|
%
|
Total refining
production (excluding internally produced fuel)
|
207,179
|
|
|
100.0
|
%
|
|
211,566
|
|
|
100.0
|
%
|
|
204,613
|
|
|
100.0
|
%
|
|
217,122
|
|
|
100.0
|
%
|
Product price
(dollars per gallon):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
$
|
1.45
|
|
|
|
|
$
|
1.72
|
|
|
|
|
$
|
1.31
|
|
|
|
|
$
|
1.69
|
|
|
|
Distillate
|
1.45
|
|
|
|
|
1.60
|
|
|
|
|
1.30
|
|
|
|
|
1.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Market Indicators
(dollars per barrel):
|
|
|
|
|
|
|
|
West Texas
Intermediate (WTI) NYMEX
|
$
|
44.94
|
|
|
$
|
46.50
|
|
|
$
|
41.53
|
|
|
$
|
51.01
|
|
Crude Oil
Differentials:
|
|
|
|
|
|
|
|
WTI less WTS
(light/medium sour)
|
1.47
|
|
|
(1.62)
|
|
|
0.82
|
|
|
(0.47)
|
|
WTI less WCS (heavy
sour)
|
14.23
|
|
|
15.14
|
|
|
13.59
|
|
|
12.79
|
|
NYMEX Crack
Spreads:
|
|
|
|
|
|
|
|
Gasoline
|
13.73
|
|
|
22.23
|
|
|
16.24
|
|
|
22.30
|
|
Heating
Oil
|
14.34
|
|
|
20.05
|
|
|
13.04
|
|
|
22.87
|
|
NYMEX 2-1-1 Crack
Spread
|
14.03
|
|
|
21.14
|
|
|
14.64
|
|
|
22.59
|
|
PADD II Group 3
Basis:
|
|
|
|
|
|
|
|
Gasoline
|
0.48
|
|
|
0.63
|
|
|
(3.59)
|
|
|
(2.99)
|
|
Ultra Low Sulfur
Diesel
|
1.01
|
|
|
0.27
|
|
|
(0.38)
|
|
|
(2.61)
|
|
PADD II Group 3
Product Crack Spread:
|
|
|
|
|
|
|
|
Gasoline
|
14.21
|
|
|
22.87
|
|
|
12.65
|
|
|
19.31
|
|
Ultra Low Sulfur
Diesel
|
15.35
|
|
|
20.31
|
|
|
12.65
|
|
|
20.26
|
|
PADD II Group 3
2-1-1
|
14.78
|
|
|
21.59
|
|
|
12.65
|
|
|
19.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(in millions,
except operating statistics)
|
Coffeyville
Refinery Financial Results:
|
|
|
|
|
|
|
|
Net sales
|
$
|
788.1
|
|
|
$
|
840.0
|
|
|
$
|
2,094.1
|
|
|
$
|
2,698.0
|
|
Cost of product
sold
|
669.9
|
|
|
669.9
|
|
|
1,763.3
|
|
|
2,135.6
|
|
Refining
margin*
|
118.2
|
|
|
170.1
|
|
|
330.8
|
|
|
562.4
|
|
Direct operating
expenses
|
50.7
|
|
|
54.0
|
|
|
144.5
|
|
|
155.6
|
|
Major scheduled
turnaround expenses
|
—
|
|
|
15.6
|
|
|
31.5
|
|
|
17.2
|
|
Flood insurance
recovery
|
—
|
|
|
—
|
|
|
—
|
|
|
(27.3)
|
|
Depreciation and
amortization
|
17.7
|
|
|
15.7
|
|
|
51.4
|
|
|
54.7
|
|
Gross
profit
|
$
|
49.8
|
|
|
$
|
84.8
|
|
|
$
|
103.4
|
|
|
$
|
362.2
|
|
|
|
|
|
|
|
|
|
Refining margin
adjusted for FIFO impact*
|
$
|
122.2
|
|
|
$
|
201.3
|
|
|
$
|
308.4
|
|
|
$
|
582.9
|
|
|
|
|
|
|
|
|
|
Coffeyville
Refinery Key Operating Statistics:
|
|
|
|
|
|
|
|
Per crude oil
throughput barrel:
|
|
|
|
|
|
|
|
Refining
margin*
|
$
|
9.86
|
|
|
$
|
15.57
|
|
|
$
|
9.94
|
|
|
$
|
16.42
|
|
FIFO impact,
(favorable) unfavorable
|
0.33
|
|
|
2.85
|
|
|
(0.67)
|
|
|
0.60
|
|
Refining margin
adjusted for FIFO impact*
|
10.19
|
|
|
18.42
|
|
|
9.27
|
|
|
17.02
|
|
Gross
profit
|
4.15
|
|
|
7.76
|
|
|
3.11
|
|
|
10.58
|
|
Gross profit
excluding flood insurance recovery*
|
4.15
|
|
|
7.76
|
|
|
3.11
|
|
|
9.78
|
|
Direct operating expenses and major scheduled
turnaround expenses
|
4.23
|
|
|
6.37
|
|
|
5.29
|
|
|
5.05
|
|
Direct operating expenses excluding major scheduled
turnaround expenses
|
4.23
|
|
|
4.95
|
|
|
4.34
|
|
|
4.54
|
|
Direct operating
expenses and major scheduled turnaround expenses per barrel
sold
|
3.93
|
|
|
5.95
|
|
|
4.80
|
|
|
4.61
|
|
Direct operating
expenses excluding major scheduled turnaround expenses per barrel
sold
|
$
|
3.93
|
|
|
$
|
4.62
|
|
|
$
|
3.94
|
|
|
$
|
4.15
|
|
Barrels sold (barrels
per day)
|
140,256
|
|
|
127,089
|
|
|
133,729
|
|
|
137,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* See
"Use of Non-GAAP Financial Measures" below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Coffeyville
Refinery Throughput and Production Data (bpd):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweet
|
110,825
|
|
|
81.0
|
%
|
|
105,314
|
|
|
83.3
|
%
|
|
101,803
|
|
|
79.2
|
%
|
|
106,256
|
|
|
79.2
|
%
|
Medium
|
—
|
|
|
—
|
%
|
|
552
|
|
|
0.4
|
%
|
|
1,641
|
|
|
1.3
|
%
|
|
2,732
|
|
|
2.0
|
%
|
Heavy sour
|
19,568
|
|
|
14.3
|
%
|
|
12,891
|
|
|
10.2
|
%
|
|
17,978
|
|
|
13.9
|
%
|
|
16,476
|
|
|
12.3
|
%
|
Total crude oil
throughput
|
130,393
|
|
|
95.3
|
%
|
|
118,757
|
|
|
93.9
|
%
|
|
121,422
|
|
|
94.4
|
%
|
|
125,464
|
|
|
93.5
|
%
|
All other feedstocks
and blendstocks
|
6,399
|
|
|
4.7
|
%
|
|
7,753
|
|
|
6.1
|
%
|
|
7,193
|
|
|
5.6
|
%
|
|
8,691
|
|
|
6.5
|
%
|
Total
throughput
|
136,792
|
|
|
100.0
|
%
|
|
126,510
|
|
|
100.0
|
%
|
|
128,615
|
|
|
100.0
|
%
|
|
134,155
|
|
|
100.0
|
%
|
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
70,013
|
|
|
50.3
|
%
|
|
60,849
|
|
|
47.3
|
%
|
|
67,298
|
|
|
51.5
|
%
|
|
65,000
|
|
|
47.4
|
%
|
Distillate
|
57,839
|
|
|
41.6
|
%
|
|
55,521
|
|
|
43.1
|
%
|
|
54,192
|
|
|
41.5
|
%
|
|
59,050
|
|
|
43.0
|
%
|
Other (excluding
internally produced fuel)
|
11,286
|
|
|
8.1
|
%
|
|
12,407
|
|
|
9.6
|
%
|
|
9,191
|
|
|
7.0
|
%
|
|
13,115
|
|
|
9.6
|
%
|
Total refining
production (excluding internally produced fuel)
|
139,138
|
|
|
100.0
|
%
|
|
128,777
|
|
|
100.0
|
%
|
|
130,681
|
|
|
100.0
|
%
|
|
137,165
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(in millions,
except operating statistics)
|
Wynnewood Refinery
Financial Results:
|
|
|
|
|
|
|
|
Net sales
|
$
|
374.3
|
|
|
$
|
520.5
|
|
|
$
|
1,064.4
|
|
|
$
|
1,512.3
|
|
Cost of product
sold
|
317.7
|
|
|
393.1
|
|
|
888.5
|
|
|
1,164.5
|
|
Refining
margin*
|
56.6
|
|
|
127.4
|
|
|
175.9
|
|
|
347.8
|
|
Direct operating
expenses
|
46.3
|
|
|
42.9
|
|
|
122.7
|
|
|
117.0
|
|
Major scheduled
turnaround expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Depreciation and
amortization
|
12.7
|
|
|
12.5
|
|
|
38.0
|
|
|
37.6
|
|
Gross profit
(loss)
|
$
|
(2.4)
|
|
|
$
|
72.0
|
|
|
$
|
15.2
|
|
|
$
|
193.2
|
|
|
|
|
|
|
|
|
|
Refining margin
adjusted for FIFO impact*
|
$
|
60.4
|
|
|
$
|
141.8
|
|
|
$
|
168.6
|
|
|
$
|
361.0
|
|
|
|
|
|
|
|
|
|
Wynnewood Refinery
Key Operating Statistics:
|
|
|
|
|
|
|
|
Per crude oil
throughput barrel:
|
|
|
|
|
|
|
|
Refining
margin*
|
$
|
9.10
|
|
|
$
|
17.01
|
|
|
$
|
8.74
|
|
|
$
|
16.18
|
|
FIFO impact,
(favorable) unfavorable
|
0.61
|
|
|
1.93
|
|
|
(0.36)
|
|
|
0.61
|
|
Refining margin
adjusted for FIFO impact*
|
9.71
|
|
|
18.94
|
|
|
8.38
|
|
|
16.79
|
|
Gross profit
(loss)
|
(0.39)
|
|
|
9.61
|
|
|
0.76
|
|
|
8.99
|
|
Direct operating
expenses and major scheduled turnaround expenses
|
7.45
|
|
|
5.73
|
|
|
6.10
|
|
|
5.44
|
|
Direct operating
expenses excluding major scheduled turnaround expenses
|
7.45
|
|
|
5.73
|
|
|
6.10
|
|
|
5.44
|
|
Direct operating
expenses and major scheduled turnaround expenses per barrel
sold
|
7.29
|
|
|
5.53
|
|
|
6.01
|
|
|
5.33
|
|
Direct operating
expenses excluding major scheduled turnaround expenses per barrel
sold
|
$
|
7.29
|
|
|
$
|
5.53
|
|
|
$
|
6.01
|
|
|
$
|
5.33
|
|
Barrels sold (barrels
per day)
|
68,971
|
|
|
84,351
|
|
|
74,463
|
|
|
80,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Wynnewood Refinery
Throughput and Production Data (bpd):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweet
|
65,579
|
|
|
93.8
|
%
|
|
79,914
|
|
|
94.6
|
%
|
|
72,791
|
|
|
96.1
|
%
|
|
78,225
|
|
|
96.0
|
%
|
Medium
|
1,983
|
|
|
2.8
|
%
|
|
1,485
|
|
|
1.8
|
%
|
|
680
|
|
|
0.9
|
%
|
|
488
|
|
|
0.6
|
%
|
Heavy sour
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
Total crude oil
throughput
|
67,562
|
|
|
96.6
|
%
|
|
81,399
|
|
|
96.4
|
%
|
|
73,471
|
|
|
97.0
|
%
|
|
78,713
|
|
|
96.6
|
%
|
All other feedstocks
and blendstocks
|
2,379
|
|
|
3.4
|
%
|
|
3,008
|
|
|
3.6
|
%
|
|
2,283
|
|
|
3.0
|
%
|
|
2,796
|
|
|
3.4
|
%
|
Total
throughput
|
69,941
|
|
|
100.0
|
%
|
|
84,407
|
|
|
100.0
|
%
|
|
75,754
|
|
|
100.0
|
%
|
|
81,509
|
|
|
100.0
|
%
|
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
36,107
|
|
|
53.1
|
%
|
|
42,630
|
|
|
51.5
|
%
|
|
39,476
|
|
|
53.4
|
%
|
|
41,650
|
|
|
52.1
|
%
|
Distillate
|
26,830
|
|
|
39.4
|
%
|
|
32,958
|
|
|
39.8
|
%
|
|
28,909
|
|
|
39.1
|
%
|
|
32,212
|
|
|
40.3
|
%
|
Other (excluding
internally produced fuel)
|
5,104
|
|
|
7.5
|
%
|
|
7,201
|
|
|
8.7
|
%
|
|
5,547
|
|
|
7.5
|
%
|
|
6,095
|
|
|
7.6
|
%
|
Total refining
production (excluding internally produced fuel)
|
68,041
|
|
|
100.0
|
%
|
|
82,789
|
|
|
100.0
|
%
|
|
73,932
|
|
|
100.0
|
%
|
|
79,957
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sold,
direct operating expenses and selling, general and administrative
expenses are all reflected exclusive of depreciation and
amortization.
|
|
* See
"Use of Non-GAAP Financial Measures" below.
|
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 product
sold (exclusive of depreciation and amortization). 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 product sold at which we are able to
sell refined products. Each of the components used in this
calculation (net sales and cost of product sold exclusive of
depreciation and amortization) 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 product sold (exclusive of depreciation and
amortization) 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 product sold (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.
Gross profit excluding flood insurance recovery is calculated as
the difference between net sales, cost of product sold (exclusive
of depreciation and amortization), direct operating expenses
(exclusive of depreciation and amortization), major scheduled
turnaround expenses and depreciation and amortization. Gross
profit excluding flood insurance recovery per crude throughput
barrel is calculated as gross profit excluding flood insurance
recovery as derived above divided by our refineries' crude oil
throughput volumes for the respective periods presented. Gross
profit excluding flood insurance recovery is a non-GAAP measure
that should not be substituted for operating income. Management
believes it is important to investors in evaluating our refineries'
performance and our ongoing operating results. Our calculation of
gross profit excluding flood insurance recovery may differ from
similar calculations of other companies in our industry, thereby
limiting its usefulness as a comparative measure.
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) share-based
compensation, non-cash; (iii) loss on extinguishment of debt; (iv)
major scheduled turnaround expenses (that many of our competitors
capitalize and thereby exclude from their measures of EBITDA and
adjusted EBITDA); (v) (gain) loss on derivatives, net; (vi) current
period settlements on derivative contracts and (vii) flood
insurance recovery. 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, 2016
and 2015 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(in
millions)
|
Net income
|
$
|
15.9
|
|
|
$
|
138.9
|
|
|
$
|
26.0
|
|
|
$
|
413.4
|
|
Add:
|
|
|
|
|
|
|
|
Interest expense and
other financing costs, net of interest income
|
10.8
|
|
|
10.3
|
|
|
31.7
|
|
|
31.9
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Depreciation and
amortization
|
32.5
|
|
|
29.9
|
|
|
95.6
|
|
|
98.1
|
|
EBITDA
|
59.2
|
|
|
179.1
|
|
|
153.3
|
|
|
543.4
|
|
Add:
|
|
|
|
|
|
|
|
FIFO impact,
(favorable) unfavorable
|
7.7
|
|
|
45.6
|
|
|
(29.7)
|
|
|
33.7
|
|
Share-based
compensation, non-cash
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.4
|
|
Major scheduled
turnaround expenses
|
—
|
|
|
15.6
|
|
|
31.5
|
|
|
17.2
|
|
(Gain) loss on
derivatives, net
|
1.7
|
|
|
(11.8)
|
|
|
4.8
|
|
|
52.2
|
|
Current period
settlements on derivative contracts(1)
|
6.7
|
|
|
0.8
|
|
|
35.2
|
|
|
(34.0)
|
|
Flood insurance
recovery(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
(27.3)
|
|
Adjusted
EBITDA
|
$
|
75.3
|
|
|
$
|
229.6
|
|
|
$
|
195.1
|
|
|
$
|
585.6
|
|
|
|
(1)
|
Represents the
portion of (gain) loss on derivatives, net related to contracts
that matured during the respective periods and settled with
counterparties. There are no premiums paid or received at inception
of the derivative contracts and upon settlement, there is no cost
recovery associated with these contracts.
|
|
|
|
|
|
(2)
|
Represents an
insurance recovery from Coffeyville Resources Refining and
Marketing, LLC's environmental insurance carriers as a result of
the flood and crude oil discharge at the Coffeyville refinery on
June/July 2007.
|
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
September
30, 2016
|
|
Nine Months
Ended
September
30, 2016
|
|
(in millions,
except per unit data)
|
Adjusted
EBITDA
|
$
|
75.3
|
|
|
$
|
195.1
|
|
Adjustments:
|
|
|
|
Less:
|
|
|
|
Cash needs for debt
service
|
(10.0)
|
|
|
(30.0)
|
|
Reserves for
environmental and maintenance capital expenditures
|
(40.0)
|
|
|
(96.4)
|
|
Reserves for major
scheduled turnaround expenses
|
(25.0)
|
|
|
(48.7)
|
|
Reserves for future
operating needs
|
—
|
|
|
(19.7)
|
|
Available cash for
distribution
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
|
|
|
Available cash for
distribution, per unit
|
$
|
—
|
|
|
$
|
—
|
|
Common units
outstanding
|
147.6
|
|
|
147.6
|
|
Q4 2016 Outlook. The table below summarizes our outlook
for certain refining statistics for the fourth quarter of 2016. See
"forward looking statements."
|
|
|
|
|
|
|
|
Q4
2016
|
|
Low
|
|
High
|
Refinery
Statistics:
|
|
|
|
Total crude oil
throughput (bpd)
|
190,000
|
|
|
205,000
|
|
Total refining
production (bpd)
|
200,000
|
|
|
215,000
|
|
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SOURCE CVR Refining, LP