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| 8-K - 8-K - CVR Refining, LP | cvrr8-kq2earningspresentat.htm |
2nd Quarter 2017 Earnings Report
July 27, 2017
Forward Looking Statements
2
This presentation should be reviewed in conjunction with CVR Refining, LP’s Second Quarter earnings conference call
held on July 27, 2017. The following information contains forward-looking statements based on management’s current
expectations and beliefs, as well as a number of assumptions concerning future events. These statements are subject
to risks, uncertainties, assumptions and other important factors. You are cautioned not to put undue reliance on such
forward-looking statements (including forecasts and projections regarding our future performance) because actual
results may vary materially from those expressed or implied as a result of various factors, including, but not limited
to those set forth under “Risk Factors” in CVR Refining, LP’s Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q and any other filings CVR Refining, LP makes with the Securities and Exchange Commission. CVR Refining,
LP assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except to the extent required by law.
All information in this earnings report is unaudited other than the consolidated statement of operations data for the
years ended December 31, 2014 through 2016 and the balance sheet data as of December 31, 2014 through 2016.
Consolidated Financial Results Second Quarter Year to Date
(In millions, except for throughput and market data)
6/30/2017 6/30/2016 6/30/2017 6/30/2016
Net Income (Loss) $ (19.2) $ 78.1 $ 47.8 $ 10.1
Gross Profit $ 12.2 $ 107.6 $ 99.0 $ 70.7
Refining Margin(1)(2)(3) $ 145.6 $ 176.3 $ 368.1 $ 296.8
Operating Income (Loss) $ (7.4) $ 90.1 $ 58.6 $ 34.1
Adjusted EBITDA(4)(5) $ 43.1 $ 84.7 $ 157.6 $ 119.8
NYMEX 2-1-1 Crack Spread $ 16.59 $ 15.98 $ 15.85 $ 14.95
PADD II Group 3 2-1-1 Crack Spread $ 14.30 $ 12.64 $ 13.82 $ 11.56
Refining Margin (per crude oil throughput barrel)(1)(2)(6) $ 7.48 $ 9.56 $ 9.51 $ 8.44
Direct Operating Expenses excluding Major Scheduled Turnaround Expenses (per
crude oil throughput barrel)(7) $ 4.29 $ 4.45 $ 4.46 $ 4.84
Consolidated Selected Financials and Key Performance Indicators
Balance Sheet and Cash Flow Data Second
Quarter(In millions, except per unit data)
6/30/2017
Cash and Cash Equivalents $ 515.7
Total Debt, including current portion(8) $ 546.0
Partners' Capital $ 1,344.5
Cash Flow from Operations $ 135.2
Available Cash for Distribution(5)(9) $ —
Available Cash for Distribution, per unit(9) $ —
(1) Adjusted for FIFO impact
(2) Definition on slide 11
(3) Non-GAAP reconciliation on slide 12
3
(4) Non-GAAP reconciliation on slide 17
(5) Definition on slide 10
(6) Non-GAAP reconciliation on slide 15
(7) Non-GAAP reconciliation on slide 16
(8) Amounts presented are gross debt not net of unamortized debt issuance costs
(9) Non-GAAP reconciliation on slide 18
Q2 2017 Q2 2016 YTD 2017 YTD 2016
133.8 127.4 132.3
116.9
Q2 2017 Q2 2016 YTD 2017 YTD 2016
144.4 138.0
145.0
130.4
Refinery Crude Throughput
(mbpd)
(1) Adjusted for FIFO impact
(2) Definition on slide 11
(3) Non-GAAP reconciliation on slide 15
(4) Non-GAAP reconciliation on slide 16
Barrels Sold
(mbpd)
Q2 2017 Q2 2016 YTD 2017 YTD 2016
$7.92 $10.09 $10.06 $8.75
Refining Margin(1)(2)(3)
(per crude throughput barrel)
Q2 2017 Q2 2016 YTD 2017 YTD 2016
$3.90 $3.98 $4.10 $4.41
Direct Operating Expenses Excluding Major Scheduled
Turnaround Expenses(4)
(per crude throughput barrel)
Coffeyville Refinery
4
Q2 2017 Q2 2016 YTD 2017 YTD 2016
80.0
75.1
81.8
76.5
Q2 2017 Q2 2016 YTD 2017 YTD 2016
85.9
75.3
84.4
77.2
Refinery Crude Throughput
(mbpd)
Barrels Sold
(mbpd)
Q2 2017 Q2 2016 YTD 2017 YTD 2016
$6.59
$8.51 $8.43 $7.79
Refining Margin(1)(2)(3)
(per crude throughput barrel)
Q2 2017 Q2 2016 YTD 2017 YTD 2016
$4.95 $5.24 $5.04 $5.49
Direct Operating Expenses Excluding Major Scheduled
Turnaround Expenses(4)
(per crude throughput barrel)
Wynnewood Refinery
5
(1) Adjusted for FIFO impact
(2) Definition on slide 11
(3) Non-GAAP reconciliation on slide 15
(4) Non-GAAP reconciliation on slide 16
Consolidated Second Quarter Year to Date
($ in millions, except per barrel data) 6/30/2017 6/30/2016 6/30/2017 6/30/2016
Direct operating expenses and major scheduled turnaround expenses $ 86.3 $ 84.0 $ 188.4 $ 201.7
Less: major scheduled turnaround expenses 2.8 2.1 15.7 31.5
Direct operating expenses excluding major scheduled turnaround expenses $ 83.5 $ 81.9 $ 172.7 $ 170.2
Direct operating expenses excluding major scheduled turnaround expenses per
barrel of crude throughput(1) $ 4.29 $ 4.45 $ 4.46 $ 4.84
6
Direct Operating Expenses
Coffeyville Second Quarter Year to Date
($ in millions, except per barrel data) 6/30/2017 6/30/2016 6/30/2017 6/30/2016
Direct operating expenses and major scheduled turnaround expenses $ 47.5 $ 48.2 $ 98.2 $ 125.3
Less: major scheduled turnaround expenses — 2.1 — 31.5
Direct operating expenses excluding major scheduled turnaround expenses $ 47.5 $ 46.1 $ 98.2 $ 93.8
Direct operating expenses excluding major scheduled turnaround expenses per
barrel of crude throughput(1) $ 3.90 $ 3.98 $ 4.10 $ 4.41
Wynnewood Second Quarter Year to Date
($ in millions, except per barrel data) 6/30/2017 6/30/2016 6/30/2017 6/30/2016
Direct operating expenses and major scheduled turnaround expenses $ 38.8 $ 35.8 $ 90.3 $ 76.4
Less: major scheduled turnaround expenses 2.8 — 15.7 —
Direct operating expenses excluding major scheduled turnaround expenses $ 36.0 $ 35.8 $ 74.6 $ 76.4
Direct operating expenses excluding major scheduled turnaround expenses per
barrel of crude throughput(1) $ 4.95 $ 5.24 $ 5.04 $ 5.49
(1) Non-GAAP reconciliation on slide 16
$500
$400
$300
$200
$100
$0
2014 2015 2016 Q2 2017
$211.2
$392.7
$232.8
$30.3
Note: Refer to slide 19 for metrics used in calculations
Debt Metrics
7
Financial Metrics 2014 2015 2016 Q2 2017 LTM
w Debt to Capital 29% 31% 30% 29%
w Debt to Adj. EBITDA 0.9 1.0 2.5 2.1
w Net Debt to Adj. EBITDA 0.3 0.7 1.0 0.1
Net Debt
($ in millions)
Coffeyville
($ in millions)
Note: Refer to slide 21 for metrics used in calculations
Wynnewood
($ in millions)
Capital Spending
8
n Environmental & Maintenance n Growth
$150
$100
$50
$0
2014 2015 2016 2017 E
$150
$100
$50
$0
2014 2015 2016 2017 E
Consolidated Capital Spending Summary
2014 2015 2016 2017 Estimate
Environmental & Maintenance $140.3 $103.4 $63.6 $130.0
Growth 51.0 91.3 38.7 20.0
Total Capital Spending $191.3 $194.7 $102.3 $150.0
n Environmental & Maintenance n Growth
Appendix
Non-GAAP Financial Measures
10
To supplement the actual results in accordance with GAAP for the applicable periods, the Partnership also uses
non-GAAP financial measures as discussed below, which are reconciled to GAAP-based results. 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.
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 measure 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.
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.
Non-GAAP Financial Measures (cont'd)
11
Refining margin per crude oil throughput barrel is a measurement calculated as the difference between net sales and
cost of material 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.
Calculation of Consolidated Refining Margin adjusted for FIFO
impact(1) Second Quarter Year to Date
($ in millions) 6/30/2017 6/30/2016 6/30/2017 6/30/2016
Net sales $ 1,338.2 $ 1,164.4 $ 2,761.7 $ 1,998.4
Cost of materials and other 1,208.0 941.9 2,409.3 1,664.2
Direct operating expenses (exclusive of depreciation and amortization and major
scheduled turnaround expenses as reflected below) 83.5 81.9 172.7 170.2
Major scheduled turnaround expenses 2.8 2.1 15.7 31.5
Depreciation and amortization 31.7 30.9 65.0 61.8
Gross profit $ 12.2 $ 107.6 $ 99.0 $ 70.7
Add:
Direct operating expenses (exclusive of depreciation and amortization and major
scheduled turnaround expenses as reflected below) 83.5 81.9 172.7 170.2
Major scheduled turnaround expenses 2.8 2.1 15.7 31.5
Depreciation and amortization 31.7 30.9 65.0 61.8
Refining margin(1) $ 130.2 $ 222.5 $ 352.4 $ 334.2
FIFO impact, (favorable) unfavorable 15.4 (46.2) 15.7 (37.4)
Refining margin adjusted for FIFO impact(1) $ 145.6 $ 176.3 $ 368.1 $ 296.8
Consolidated Non-GAAP Financial Measures
(1) Definition on slide 11
12
Calculation of Coffeyville Refinery Refining Margin adjusted for
FIFO impact(1) Second Quarter Year to Date
($ in millions) 6/30/2017 6/30/2016 6/30/2017 6/30/2016
Net sales $ 859.8 $ 778.0 $ 1,811.1 $ 1,306.0
Cost of materials and other 773.5 630.7 1,581.9 1,093.4
Direct operating expenses (exclusive of depreciation and amortization and major
scheduled turnaround expenses as reflected below) 47.5 46.1 98.2 93.8
Major scheduled turnaround expenses — 2.1 — 31.5
Depreciation and amortization 17.4 16.7 36.4 33.5
Gross profit $ 21.4 $ 82.4 $ 94.6 $ 53.8
Add:
Direct operating expenses (exclusive of depreciation and amortization and major
scheduled turnaround expenses as reflected below) 47.5 46.1 98.2 93.8
Major scheduled turnaround expenses — 2.1 — 31.5
Depreciation and amortization 17.4 16.7 36.4 33.5
Refining margin(1) $ 86.3 $ 147.3 $ 229.2 $ 212.6
FIFO impact, (favorable) unfavorable 10.1 (30.2) 11.6 (26.4)
Refining margin adjusted for FIFO impact(1) $ 96.4 $ 117.1 $ 240.8 $ 186.2
Coffeyville Non-GAAP Financial Measures
(1) Definition on slide 11
13
Calculation of Wynnewood Refinery Refining Margin adjusted for
FIFO impact(1) Second Quarter Year to Date
($ in millions) 6/30/2017 6/30/2016 6/30/2017 6/30/2016
Net sales $ 477.3 $ 385.3 $ 948.4 $ 690.1
Cost of materials and other 434.6 311.3 827.7 570.7
Direct operating expenses (exclusive of depreciation and amortization and major
scheduled turnaround expenses as reflected below) 36.0 35.8 74.6 76.4
Major scheduled turnaround expenses 2.8 — 15.7 —
Depreciation and amortization 12.8 12.6 25.6 25.2
Gross profit (loss) $ (8.9) $ 25.6 $ 4.8 $ 17.8
Add:
Direct operating expenses (exclusive of depreciation and amortization and major
scheduled turnaround expenses as reflected below) 36.0 35.8 74.6 76.4
Major scheduled turnaround expenses 2.8 — 15.7 —
Depreciation and amortization 12.8 12.6 25.6 25.2
Refining margin(1) $ 42.7 $ 74.0 $ 120.7 $ 119.4
FIFO impact, (favorable) unfavorable 5.2 (15.9) 4.1 (11.0)
Refining margin adjusted for FIFO impact(1) $ 47.9 $ 58.1 $ 124.8 $ 108.4
(1) Definition on slide 11
Wynnewood Non-GAAP Financial Measures
14
15
Non-GAAP Financial Measures
Calculation of Consolidated Refining Margin adjusted for FIFO
impact per crude oil throughput barrel Second Quarter Year to Date
($ in millions except per barrel data) 6/30/2017 6/30/2016 6/30/2017 6/30/2016
Total crude oil throughput barrels per day 213,841 202,536 214,103 193,345
Days in the period 91 91 181 182
Total crude oil throughput barrels 19,459,531 18,430,776 38,752,643 35,188,790
Refining margin adjusted for FIFO impact(1)(2) $ 145.6 $ 176.3 $ 368.1 $ 296.8
Divided by: crude oil throughput barrels (in millions) 19.5 18.4 38.8 35.2
Refining margin adjusted for FIFO impact per crude oil throughput barrel(1) $ 7.48 $ 9.56 $ 9.51 $ 8.44
Coffeyville
Total crude oil throughput barrels per day 133,819 127,410 132,297 116,887
Days in the period 91 91 181 182
Total crude oil throughput barrels 12,177,529 11,594,310 23,945,757 21,273,434
Refining margin adjusted for FIFO impact(1)(3) $ 96.4 $ 117.1 $ 240.8 $ 186.2
Divided by: crude oil throughput barrels (in millions) 12.2 11.6 23.9 21.3
Refining margin adjusted for FIFO impact per crude oil throughput barrel(1) $ 7.92 $ 10.09 $ 10.06 $ 8.75
Wynnewood
Total crude oil throughput barrels per day 80,022 75,126 81,806 76,458
Days in the period 91 91 181 182
Total crude oil throughput barrels 7,282,002 6,836,466 14,806,886 13,915,356
Refining margin adjusted for FIFO impact(1)(4) $ 47.9 $ 58.1 $ 124.8 $ 108.4
Divided by: crude oil throughput barrels (in millions) 7.3 6.8 14.8 13.9
Refining margin adjusted for FIFO impact per crude oil throughput barrel(1) $ 6.59 $ 8.51 $ 8.43 $ 7.79
(1) Definition on slide 11
(2) Non-GAAP reconciliation on slide 12
(3) Non-GAAP reconciliation on slide 13
(4) Non-GAAP reconciliation on slide 14
16
Non-GAAP Financial Measures
Calculation of Consolidated Direct Operating Expenses excluding
Major Scheduled Turnaround expenses per crude oil throughput barrel Second Quarter Year to Date
($ in millions except per barrel data) 6/30/2017 6/30/2016 6/30/2017 6/30/2016
Total crude oil throughput barrels per day 213,841 202,536 214,103 193,345
Days in the period 91 91 181 182
Total crude oil throughput barrels 19,459,531 18,430,776 38,752,643 35,188,790
Direct operating expenses excluding major scheduled turnaround expenses(1) $ 83.5 $ 81.9 $ 172.7 $ 170.2
Divided by: crude oil throughput barrels (in millions) 19.5 18.4 38.8 35.2
Direct operating expenses excluding major scheduled turnaround expenses per crude oil
throughput barrel $ 4.29 $ 4.45 $ 4.46 $ 4.84
Coffeyville
Total crude oil throughput barrels per day 133,819 127,410 132,297 116,887
Days in the period 91 91 181 182
Total crude oil throughput barrels 12,177,529 11,594,310 23,945,757 21,273,434
Direct operating expenses excluding major scheduled turnaround expenses(1) $ 47.5 $ 46.1 $ 98.2 $ 93.8
Divided by: crude oil throughput barrels (in millions) 12.2 11.6 23.9 21.3
Direct operating expenses excluding major scheduled turnaround expenses per crude oil
throughput barrel $ 3.90 $ 3.98 $ 4.10 $ 4.41
Wynnewood
Total crude oil throughput barrels per day 80,022 75,126 81,806 76,458
Days in the period 91 91 181 182
Total crude oil throughput barrels 7,282,002 6,836,466 14,806,886 13,915,356
Direct operating expenses excluding major scheduled turnaround expenses(1) $ 36.0 $ 35.8 $ 74.6 $ 76.4
Divided by: crude oil throughput barrels (in millions) 7.3 6.8 14.8 13.9
Direct operating expenses excluding major scheduled turnaround expenses per crude oil
throughput barrel $ 4.95 $ 5.24 $ 5.04 $ 5.49
(1) Non-GAAP reconciliation on slide 6
Financials Second Quarter Year to Date
($ in millions) 6/30/2017 6/30/2016 6/30/2017 6/30/2016
Net income (loss) $ (19.2) $ 78.1 $ 47.8 $ 10.1
Interest expense and other financing costs, net of interest income 11.8 10.1 23.0 20.9
Income tax expense — — — —
Depreciation and amortization 32.4 31.6 66.5 63.1
EBITDA(1) $ 25.0 $ 119.8 $ 137.3 $ 94.1
FIFO impact, (favorable) unfavorable 15.4 (46.2) 15.7 (37.4)
Major scheduled turnaround expenses 2.8 2.1 15.7 31.5
(Gain) loss on derivatives, net — 1.9 (12.2) 3.1
Current period settlements on derivative contracts(2) (0.1) 7.1 1.1 28.5
Adjusted EBITDA(1) $ 43.1 $ 84.7 $ 157.6 $ 119.8
(1) Definition on slide 10
(2) 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.
17
Consolidated Non-GAAP Financial Measures
Financials
Second
Quarter
($ in millions, except for per unit data)
6/30/2017
Adjusted EBITDA(1) $ 43.1
Less:
Cash needs for debt service (10.0)
Reserves for environmental and maintenance capital expenditures (18.1)
Reserves for major scheduled turnaround expenses (15.0)
Reserves for future operating needs —
Available cash for distribution(1) $ —
Available cash for distribution, per unit $ —
Common units outstanding 147.6
(1) Definition on slide 10
18
Consolidated Non-GAAP Financial Measures
Financials Full Year LTM
($ in millions) 2014 2015 2016 Q2 2017
n Cash $ 370.2 $ 187.3 $ 314.1 $ 515.7
n Total debt, including current portion(1) 581.4 580.0 546.9 546.0
n Net debt 211.2 392.7 232.8 30.3
n Partners' capital 1,450.1 1,281.4 1,296.7 1,344.5
n Adjusted EBITDA(2)(3) $ 621.6 $ 602.0 $ 222.8 $ 260.6
(1) Amounts presented are gross debt not net of unamortized debt issuance costs
(2) Non-GAAP reconciliation on slide 20
(3) Definition on slide 10
19
Capital Structure
Financials Full Year LTM
($ in millions) 2014 2015 2016 Q2 2017
Net income $ 358.7 $ 291.2 $ 15.3 $ 53.0
Interest expense and other financing costs, net of interest income 33.9 42.2 43.3 45.4
Income tax expense — — — —
Depreciation and amortization 122.5 130.2 129.0 132.4
EBITDA(1) $ 515.1 $ 463.6 $ 187.6 $ 230.8
FIFO impact, (favorable) unfavorable 160.8 60.3 (52.1) 1.0
Share-based compensation, non-cash 2.3 0.6 — —
Major scheduled turnaround expenses 6.8 102.2 31.5 15.7
(Gain) loss on derivatives, net (185.6) 28.6 19.4 4.1
Current period settlements on derivative contracts(2) 122.2 (26.0) 36.4 9.0
Flood insurance recovery(3) — (27.3) — —
Adjusted EBITDA(1) $ 621.6 $ 602.0 $ 222.8 $ 260.6
(1) Definition on slide 10
(2) 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.
(3) Represents an insurance recovery from environmental insurance carriers as a result of the flood and crude oil discharge at the Coffeyville refinery on June/July 2007.
20
Consolidated Non-GAAP Financial Measures
Financials
($ in millions) 2014 2015 2016 2017 Estimate
Coffeyville refinery
Environmental and Maintenance $ 74.8 $ 69.7 $ 39.1 $ 60.0
Growth 5.5 73.2 37.2 15.0
Coffeyville refinery total capital $ 80.3 $ 142.9 $ 76.3 $ 75.0
Wynnewood refinery
Environmental and Maintenance $ 58.5 $ 25.6 $ 20.6 $ 55.0
Growth 38.9 6.4 0.5 5.0
Wynnewood refinery total capital $ 97.4 $ 32.0 $ 21.1 $ 60.0
Other Petroleum
Environmental and Maintenance $ 7.0 $ 8.1 $ 3.9 $ 15.0
Growth 6.6 11.7 1.0 —
Other petroleum total capital $ 13.6 $ 19.8 $ 4.9 $ 15.0
Total capital spending $ 191.3 $ 194.7 $ 102.3 $ 150.0
21
Capital Spending