SUGAR LAND, Texas, May 03, 2021 (GLOBE NEWSWIRE) -- CVR Energy, Inc. (“CVR Energy”) (NYSE: CVI) today announced a net loss of $39 million, or 39 cents per diluted share, on net sales of $1.5 billion for the first quarter of 2021, compared to net loss of $87 million, or 87 cents per diluted share, on net sales of $1.1 billion for the first quarter of 2020. First quarter 2021 EBITDA was less than $1 million, compared to a first quarter 2020 EBITDA loss of $38 million.
“CVR Energy’s first quarter 2021 results were influenced by exorbitant Renewable Identification Number (RIN) pricing, unrealized derivative losses and impacts from Winter Storm Uri,” said Dave Lamp, CVR Energy’s Chief Executive Officer. “We were able to quickly recover from the storm-related shutdowns, and with the increase in Group 3 crack spreads, our refining business in March experienced its best results since the height of the COVID-19 pandemic despite high RIN prices.
“CVR Partners was able to successfully minimize the impacts of Winter Storm Uri by reducing throughput and selling contracted natural gas at significantly higher prices at its East Dubuque facility while also maintaining operations at its Coffeyville facility,” Lamp said. “In addition, the nitrogen fertilizer industry reached an inflection point during the first quarter of 2021, where improved farmer economics translated into increased demand for nitrogen fertilizer as well as much higher pricing.”
Petroleum
The Petroleum Segment reported a first quarter 2021 operating loss of $115 million on net sales of $1.4 billion, compared to an operating loss of $127 million on net sales of $1.1 billion in the first quarter of 2020.
Refining margin per total throughput barrel was $3.05 in the first quarter of 2021, compared to $1.52 during the same period in 2020. Increased crack spreads and an increase in throughput volumes contributed to the improvement in refining margins during the first quarter of 2021. Adding to these impacts, crude oil prices rose during the quarter, which led to a favorable inventory valuation impact of $66 million, or $3.93 per total throughout barrel, compared to an unfavorable inventory valuation impact of $136 million, including a $58 million loss on the value of inventory to reflect its net realizable value, or $9.54 per total throughput barrel during the first quarter of 2020. The Petroleum Segment also recognized a first quarter 2021 derivative loss of $32 million, or $1.90 per total throughput barrel, compared to a derivative gain of $46 million, or $3.20 per total throughput barrel, for the first quarter of 2020. Included in this derivative loss for the first quarter of 2021 was a $43 million unrealized loss, compared to an unrealized gain of $12 million for the first quarter of 2020.
First quarter 2021 combined total throughput was approximately 186,000 barrels per day (bpd), compared to approximately 157,000 bpd of combined total throughput for the first quarter of 2020. This increase was primarily attributable to the turnaround at our Coffeyville refinery in 2020, which began in late February.
Fertilizer
The Nitrogen Fertilizer Segment reported an operating loss of $14 million on net sales of $61 million for the first quarter of 2021, compared to an operating loss of $5 million on net sales of $75 million for the first quarter of 2020.
First quarter 2021 average realized gate prices for urea ammonia nitrate (UAN) showed a reduction over the prior year, down 4 percent to $159 per ton, and ammonia was up 14 percent over the prior year to $300 per ton. Average realized gate prices for UAN and ammonia were $166 per ton and $264 per ton, respectively, for the first quarter of 2020.
CVR Partners’ fertilizer facilities produced a combined 188,000 tons of ammonia during the first quarter of 2021, of which 70,000 net tons were available for sale while the rest was upgraded to other fertilizer products, including 272,000 tons of UAN. During the first quarter 2020, the fertilizer facilities produced 201,000 tons of ammonia, of which 78,000 net tons were available for sale while the remainder was upgraded to other fertilizer products, including 317,000 tons of UAN.
Corporate
The Company reported an income tax benefit of $42 million, or 43.3 percent of loss before income taxes, for the three months ended March 31, 2021, compared to an income tax benefit of $36 million, or 26.6 percent of loss before income taxes, for the three months ended March 31, 2020. The change in income tax benefit was due primarily to changes in pretax loss and an increase in the effective income tax rate. The year-over-year increase in effective income tax rate is due primarily to the relationship between pretax results, losses attributable to noncontrolling interest and state income tax credits generated.
Cash, Debt and Dividend
Consolidated cash and cash equivalents was $707 million at March 31, 2021, an increase of $40 million from December 31, 2020. Consolidated total debt and finance lease obligations was $1.7 billion at March 31, 2021, including $637 million held by the Nitrogen Fertilizer Segment.
CVR Energy will not pay a cash dividend and CVR Partners will not pay a cash distribution for the 2021 first quarter.
First Quarter 2021 Earnings Conference Call
CVR Energy previously announced that it will host its first quarter 2021 Earnings Conference Call on Tuesday, May 4, at 1 p.m. Eastern. The Earnings Conference Call may also include discussion of Company developments, forward-looking information and other material information about business and financial matters.
The first quarter 2021 Earnings Conference Call will be webcast live and can be accessed on the Investor Relations section of CVR Energy’s website at . For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291. The webcast will be archived and available for 14 days at . A repeat of the call also can be accessed for 14 days by dialing (877) 660-6853, conference ID 13718881.
Forward-Looking StatementsThis news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are “forward-looking statements,” as that term is defined under the federal securities laws. These forward-looking statements include, but are not limited to, statements regarding future: Renewable Identification Number pricing and the impact thereof on results; derivatives activities and gains or losses associated therewith; impacts from Winter Storm Uri; ability to recover from storm-related shutdowns; crack spreads, including the increase thereof; farmer economics including improvement thereof; nitrogen fertilizer demand and pricing, including the increase thereof; throughput volumes and crude oil prices, including increases thereof; inventory valuation impacts; ammonia production, including volumes upgraded to other fertilizer products including UAN; tax benefits and rates, including impact of pretax loss, noncontrolling interest and state income tax credits thereon; balance sheet cash levels and debt and finance lease obligations; dividends and distributions, including the timing, payment and amount (if any) thereof; total throughput, direct operating expenses, capital expenditures, depreciation and amortization and turnaround expense; continued safe and reliable operations; and other matters. You can generally identify forward-looking statements by our use of forward-looking terminology such as “outlook,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “explore,” “evaluate,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” “should,” or “will,” or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. Investors are cautioned that various factors may affect these forward-looking statements, including the health and economic effects of COVID-19, the rate of any economic improvement, demand for fossil fuels, price volatility of crude oil, other feedstocks and refined products (among others); the ability of the Company to pay cash dividends and CVR Partners to make cash distributions; potential operating hazards; costs of compliance with existing, or compliance with new, laws and regulations and potential liabilities arising therefrom; impacts of planting season on CVR Partners; general economic and business conditions; and other risks. For additional discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings. These and other risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this news release are made only as of the date hereof. CVR Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
About CVR Energy, Inc.Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and marketing business through its interest in CVR Refining and the nitrogen fertilizer manufacturing business through its interest in CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 36 percent of the common units of CVR Partners.
Investors and others should note that CVR Energy may announce material information using SEC filings, press releases, public conference calls, webcasts, and the Investor Relations page of its website. CVR Energy may use these channels to distribute material information about the company and to communicate important information about the company, corporate initiatives and other matters. Information that CVR Energy posts on its website could be deemed material; therefore, CVR Energy encourages investors, the media, its customers, business partners and others interested in the company to review the information posted on its website.
For further information, please contact:
Investor Relations:Richard RobertsCVR Energy, Inc.(281) 207-3205InvestorRelations@CVREnergy.com
Media Relations:Brandee StephensCVR Energy, Inc. (281) 207-3516MediaRelations@CVREnergy.com
Non-GAAP Measures
Our management uses certain non-GAAP performance measures, and reconciliations to those measures, to evaluate current and past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These non-GAAP financial measures are important factors in assessing our operating results and profitability and include the performance and liquidity measures defined below.
The following are non-GAAP measures we present for the period ended March 31, 2021:
EBITDA - Consolidated net income (loss) before (i) interest expense, net, (ii) income tax expense (benefit) and (iii) depreciation and amortization expense.
Petroleum EBITDA and Nitrogen Fertilizer EBITDA - Segment net income (loss) before segment (i) interest expense, net, (ii) income tax expense (benefit), and (iii) depreciation and amortization.
Refining Margin - The difference between our Petroleum Segment net sales and cost of materials and other.
Refining Margin, adjusted for Inventory Valuation Impacts - Refining Margin adjusted to exclude the impact of current period market price and volume fluctuations on crude oil and refined product inventories purchased in prior periods and lower of cost or net realizable value adjustments, if applicable. We record our commodity inventories on the first-in-first-out basis. As a result, significant current period fluctuations in market prices and the volumes we hold in inventory can have favorable or unfavorable impacts on our refining margins as compared to similar metrics used by other publicly-traded companies in the refining industry.
Refining Margin and Refining Margin adjusted for Inventory Valuation Impacts, per Throughput Barrel - Refining Margin and Refining Margin adjusted for Inventory Valuation Impacts divided by the total throughput barrels during the period, which is calculated as total throughput barrels per day times the number of days in the period.
Direct Operating Expenses per Throughput Barrel - Direct operating expenses for our Petroleum Segment divided by total throughput barrels for the period, which is calculated as total throughput barrels per day times the number of days in the period.
Adjusted (Loss) Earnings per Share - (Loss) Earnings per share adjusted for inventory valuation impacts and other significant non-cash items on an after-tax basis.
Net Debt and Finance Lease Obligations - Net debt and finance lease obligations is total debt and finance lease obligations reduced for cash and cash equivalents.
Total Debt and Net Debt and Finance Lease Obligations to EBITDA Exclusive of Nitrogen Fertilizer - Total debt and net debt and finance lease obligations is calculated as the consolidated debt and net debt and finance lease obligations less the Nitrogen Fertilizer Segment’s debt and net debt and finance lease obligations as of the most recent period ended divided by EBITDA exclusive of the Nitrogen Fertilizer Segment for the most recent twelve-month period.
Free Cash Flow - Net cash provided by (used in) operating activities less capital expenditures and capitalized turnaround expenditures.
We present these measures because we believe they may help investors, analysts, lenders and ratings agencies analyze our results of operations and liquidity in conjunction with our U.S. GAAP results, including but not limited to our operating performance as compared to other publicly-traded companies in the refining and fertilizer industries, without regard to historical cost basis or financing methods and our ability to incur and service debt and fund capital expenditures. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. See “Non-GAAP Reconciliations” included herein for reconciliation of these amounts. Due to rounding, numbers presented within this section may not add or equal to numbers or totals presented elsewhere within this document.
Factors Affecting Comparability of Our Financial Results
Our historical results of operations for the periods presented may not be comparable with prior periods or to our results of operations in the future for the reasons discussed below.
Petroleum Segment
Coffeyville Refinery - Beginning in the first quarter of 2020, the Coffeyville Refinery had a planned, full facility turnaround, during which we capitalized $127 million.
Wynnewood Refinery - The Petroleum Segment’s next planned turnaround is at the Wynnewood Refinery, where pre-planning expenditures are currently underway. During the first quarter of 2021, approximately $1 million has been capitalized related to these pre-planning activities.
CVR Energy, Inc. (all information in this release is unaudited)
Financial and Operational Data
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* See “Non-GAAP Reconciliations” section below.
Selected Balance Sheet Data
Selected Cash Flow Data
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* See “Non-GAAP Reconciliations” section below.
Selected Segment Data
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Selected Balance Sheet Data
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Petroleum Segment
Key Operating Metrics per Total Throughput Barrel
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* See “Non-GAAP Reconciliations” section below.
Throughput Data by Refinery
Production Data by Refinery
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Nitrogen Fertilizer Segment:
Key Operating Data:
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Sales and Production Data
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Key Market Indicators
Q2 2021 Outlook
The table below summarizes our outlook for certain operational statistics and financial information for the second quarter of 2021. See “Forward-Looking Statements” above.
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Non-GAAP Reconciliations:
Reconciliation of Net Loss to EBITDA
Reconciliation of Net Cash Provided By (Used In) Operating Activities to Free Cash Flow
Reconciliation of Petroleum Segment Net Loss to EBITDA and EBITDA Adjusted for Inventory Valuation Impacts
Reconciliation of Petroleum Segment Gross Loss to Refining Margin and Refining Margin Adjusted for Inventory Valuation Impacts
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Reconciliation of Petroleum Segment Total Throughput Barrels
Reconciliation of Petroleum Segment Refining Margin per Total Throughput Barrels
Reconciliation of Petroleum Segment Refining Margin Adjusted for Inventory Valuation Impacts per Total Throughput Barrel
Reconciliation of Petroleum Segment Direct Operating Expenses per Total Throughput Barrel
Reconciliation of Nitrogen Fertilizer Segment Net Loss to EBITDA
Reconciliation of Basic and Diluted Loss per Share to Adjusted Loss per Share
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Reconciliation of Total Debt and Net Debt and Finance Lease Obligations to EBITDA Exclusive of Nitrogen Fertilizer
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