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CVR Energy Reports 2017 Fourth Quarter and Full Year Results And Announces Cash Dividend of 50 Cents

SUGAR LAND, Texas, Feb. 22, 2018 /PRNewswire/ -- CVR Energy, Inc. (NYSE: CVI) today announced full year 2017 net income of $234.4 million, or $2.70 per diluted share, on net sales of $5,988.4 million, compared to net income for full year 2016 of $24.7 million, or 28 cents per diluted share, on net sales of $4,782.4 million. Full year 2017 adjusted EBITDA, a non-GAAP financial measure, was $258.4 million compared to full year 2016 adjusted EBITDA of $181.6 million.

CVR Energy Logo. (PRNewsFoto/CVR Energy) (PRNewsFoto/)

For the fourth quarter of 2017, the company reported net income of $200.5 million, or $2.31 per diluted share, on net sales of $1,593.1 million, compared to net income of $7.1 million, or 8 cents per diluted share, on net sales of $1,353.4 million for the fourth quarter 2016. Fourth quarter 2017 adjusted EBITDA was $49.4 million compared to adjusted EBITDA of $22.8 million for the same period a year earlier.

"CVR Refining delivered solid 2017 full year and fourth quarter results led by stronger crack spreads and record operating rates," said Dave Lamp, CVR Energy's chief executive officer. "The Coffeyville, Kansas, refinery processed more than 131,000 barrels per day (bpd) of crude oil during the year and the Wynnewood, Oklahoma, refinery successfully completed its major scheduled plant turnaround in the fourth quarter.

"Low nitrogen fertilizer pricing continued to dampen CVR Partners' 2017 full year and fourth quarter results," Lamp said. "Fertilizer pricing has improved in the 2018 first quarter mostly due to continued steady demand for product and lower imports into the U.S. market.

"Looking forward, we will continue to focus on safe and reliable operations while increasing shareholder value by implementing self-help initiatives and developing capital improvements that will meaningfully improve our return on capital employed," he concluded.

Petroleum Business

The petroleum business, which is operated by CVR Refining and includes the Coffeyville and Wynnewood refineries, reported fourth quarter 2017 operating income of $46.5 million on net sales of $1,516.7 million, compared to operating income of $15.3 million on net sales of $1,269.4 million in the fourth quarter of 2016.

Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $11.87 in the 2017 fourth quarter, compared to $7.32 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 fourth quarter were $7.78, compared to $4.96 in the fourth quarter of 2016.

Fourth quarter 2017 throughputs of crude oil and all other feedstocks and blendstocks totaled 203,263 bpd, compared to fourth quarter 2016 throughputs of crude oil and all other feedstocks and blendstocks of 223,266 bpd.

Nitrogen Fertilizers Business

The fertilizer business, which is operated by CVR Partners and includes the Coffeyville and East Dubuque fertilizer facilities, reported a fourth quarter 2017 operating loss of $10.8 million on net sales of $78.2 million, compared to operating income of $1.0 million on net sales of $84.9 million for the fourth quarter of 2016.

For the fourth quarter of 2017, consolidated average realized gate prices for UAN and ammonia were $132 per ton and $264 per ton, respectively. Consolidated average realized gate prices for UAN and ammonia were $147 per ton and $352 per ton, respectively, for the same period in 2016.

CVR Partners' fertilizer facilities produced a combined 199,500 tons of ammonia during the fourth quarter of 2017, of which 64,100 net tons were available for sale while the rest was upgraded to other fertilizer products, including 306,100 tons of UAN. In the 2016 fourth quarter, the fertilizer facilities produced 207,600 tons of ammonia, of which 62,600 net tons were available for sale while the remainder was upgraded to other fertilizer products, including 330,700 tons of UAN.

Cash, Debt and Dividend

Consolidated cash and cash equivalents was $481.8 million at Dec. 31, 2017. Consolidated total debt was $1,166.5 million at Dec. 31, 2017. The company had no debt exclusive of CVR Refining's and CVR Partners' debt.

CVR Energy also announced a fourth quarter 2017 cash dividend of 50 cents per share. The dividend, as declared by CVR Energy's Board of Directors, will be paid on March 12, 2018, to stockholders of record on March 5, 2018. CVR Energy's fourth quarter cash dividend brings the cumulative cash dividends paid or declared for the 2017 full year to $2.00 per share.

Today, CVR Refining announced a 2017 fourth quarter cash distribution of 45 cents per common unit. CVR Partners announced that it will not pay a cash distribution for the 2017 fourth quarter.

Fourth Quarter 2017 Earnings Conference Call

CVR Energy previously announced that it will host its fourth quarter 2017 Earnings Conference Call for analysts and investors on Thursday, Feb. 22, at 3 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 Earnings Conference Call will be broadcast live over the Internet at
https://www.webcaster4.com/Webcast/Page/1003/24489. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.

For those unable to listen live, the webcast will be archived and available for 14 days at
https://www.webcaster4.com/Webcast/Page/1003/24489. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13676234.

Forward-Looking Statements

This 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. You can generally identify forward-looking statements by our use of forward-looking terminology such as "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. 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 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 nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 66 percent of the common units of CVR Refining and 34 percent of the common units of CVR Partners.

For further information, please contact:

Investor Contact:
Jay Finks
CVR Energy, Inc.
(281) 207-3588
InvestorRelations@CVREnergy.com

Media Relations:
Brandee Stephens
CVR Energy, Inc.
(281) 207-3516
MediaRelations@CVREnergy.com

CVR Energy, Inc.


Financial and Operational Data (all information in this release is unaudited other than the statements of operations and cash flow data for the year ended December 31, 2016 and the balance sheet data as of December 31, 2016).



Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016


(in millions, except per share data)

Consolidated Statement of Operations Data:








Net sales

$

1,593.1



$

1,353.4



$

5,988.4



$

4,782.4


Operating costs and expenses:








Cost of materials and other

1,300.7



1,128.1



4,882.9



3,847.5


Direct operating expenses(1)

176.1



132.6



599.5



541.8


Depreciation and amortization

51.7



49.9



203.3



184.5


Cost of sales

1,528.5



1,310.6



5,685.7



4,573.8


Selling, general and administrative expenses(1)

31.5



27.5



114.2



109.1


Depreciation and amortization

3.1



2.4



10.7



8.6


Operating income

30.0



12.9



177.8



90.9


Interest expense and other financing costs

(27.9)



(27.1)



(110.1)



(83.9)


Interest income

0.4



0.2



1.1



0.7


Loss on derivatives, net

(65.0)



(14.6)



(69.8)



(19.4)


Gain (loss) on extinguishment of debt



0.2





(4.9)


Other income, net

0.9



0.3



1.0



5.7


Income (loss) before income tax benefit

(61.6)



(28.1)





(10.9)


Income tax benefit(2)

(234.3)



(22.1)



(216.9)



(19.8)


Net income (loss)

172.7



(6.0)



216.9



8.9


Less: Net loss attributable to noncontrolling interest

(27.8)



(13.1)



(17.5)



(15.8)


Net income attributable to CVR Energy stockholders

$

200.5



$

7.1



$

234.4



$

24.7










Basic and diluted earnings per share

$

2.31



$

0.08



$

2.70



$

0.28


Dividends declared per share

$

0.50



$

0.50



$

2.00



$

2.00










Adjusted EBITDA*

$

49.4



$

22.8



$

258.4



$

181.6


Adjusted net income*

$

24.1



$

4.4



$

75.9



$

41.5


Adjusted net income per diluted share*

$

0.28



$

0.05



$

0.87



$

0.48










Weighted-average common shares outstanding - basic and diluted

86.8



86.8



86.8



86.8


____________________

* See "Use of Non-GAAP Financial Measures" below.


(1)

Direct operating expenses and selling, general and administrative expenses for the three months and years ended December 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)

The income tax benefit for the three months and year ended December 31, 2017 was favorably impacted as a result of the Tax Cuts and Jobs Act ("TCJA") legislation that was signed into law in December 2017 with the reduction of the federal income tax rate from 35% to 21% beginning in 2018. The Company is required to reflect the impact of tax law changes in its consolidated financial statements in the period of enactment. As a result, our net deferred tax liabilities at December 31, 2017 were remeasured to reflect the lower tax rate that will be in effect for the years in which the deferred tax assets and liabilities will be realized. A benefit of approximately $200.5 million was recognized as a result of the remeasurement.

 


As of December 31,


2017


2016




(audited)


(in millions)

Balance Sheet Data:




Cash and cash equivalents

$

481.8



$

735.8


Working capital

550.5



749.6


Total assets

3,806.7



4,050.2


Total debt, including current portion

1,166.5



1,164.6


Total CVR stockholders' equity

918.8



858.1


 


Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016


(in millions)

Cash Flow Data:








Net cash flow provided by (used in):








Operating activities

$

(159.9)



$

48.6



$

166.9



$

267.5


Investing activities

(114.6)



(29.4)



(195.0)



(201.4)


Financing activities

(92.8)



(46.0)



(225.9)



(95.4)


Net cash flow

$

(367.3)



$

(26.8)



$

(254.0)



$

(29.3)


Segment Information

Our operations are organized into two reportable segments, Petroleum and Nitrogen Fertilizer. Our operations that are not included in the Petroleum and Nitrogen Fertilizer segments are included in the Corporate and Other segment (along with elimination of intersegment transactions). The Petroleum segment is operated by CVR Refining, LP ("CVR Refining"), in which we own a majority interest as well as serve as the general partner. The Petroleum segment includes the operations of the Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with the crude oil gathering and pipeline systems. Detailed operating results for the Petroleum segment for the quarter and year ended December 31, 2017 are included in CVR Refining's press release dated February 22, 2018. The Nitrogen Fertilizer segment is operated by CVR Partners, LP ("CVR Partners"), in which we own approximately 34% of the common units as of December 31, 2017 and serve as the general partner. On April 1, 2016, CVR Partners completed the merger (the "East Dubuque Merger") whereby CVR Partners acquired a nitrogen fertilizer manufacturing facility located in East Dubuque, Illinois (the "East Dubuque Facility"). The Nitrogen Fertilizer segment consists of a nitrogen fertilizer manufacturing facility located in Coffeyville, Kansas, and the East Dubuque Facility beginning on April 1, 2016, the date of the closing of the acquisition. Detailed operating results for the Nitrogen Fertilizer segment for the quarter and year ended December 31, 2017 are included in CVR Partners' press release dated February 22, 2018.


Petroleum
(CVR Refining)


Nitrogen
Fertilizer
(CVR Partners)


Corporate
and Other


Consolidated






(in millions)

Three Months Ended December 31, 2017










Net sales

$

1,516.7



$

78.2



$

(1.8)



$

1,593.1


Cost of materials and other

1,281.0



21.6



(1.9)



1,300.7


Direct operating expenses(1)

91.5



41.5



0.1



133.1


Major scheduled turnaround expenses

43.0







43.0


Selling, general and administrative

21.1



6.8



3.6



31.5


Depreciation and amortization

33.6



19.1



2.1



54.8


Operating income (loss)

$

46.5



$

(10.8)



$

(5.7)



$

30.0










Capital expenditures

$

33.6



$

3.1



$

2.0



$

38.7










Year Ended December 31, 2017










Net sales

$

5,664.2



$

330.8



$

(6.6)



$

5,988.4


Cost of materials and other

4,804.7



84.9



(6.7)



4,882.9


Direct operating expenses(1)

363.4



152.9



0.2



516.5


Major scheduled turnaround expenses

80.4



2.6





83.0


Selling, general and administrative

78.8



25.6



9.8



114.2


Depreciation and amortization

133.1



74.0



6.9



214.0


Operating income (loss)

$

203.8



$

(9.2)



$

(16.8)



$

177.8










Capital expenditures

$

99.7



$

14.5



$

4.4



$

118.6



































Petroleum
(CVR Refining)


Nitrogen
Fertilizer
(CVR Partners)


Corporate
and Other


Consolidated






(in millions)

Three Months Ended December 31, 2016










Net sales

$

1,269.4



$

84.9



$

(0.9)



$

1,353.4


Cost of materials and other

1,107.5



21.5



(0.9)



1,128.1


Direct operating expenses(1)

94.7



37.9





132.6


Major scheduled turnaround expenses








Selling, general and administrative

18.5



7.3



1.7



27.5


Depreciation and amortization

33.4



17.2



1.7



52.3


Operating income (loss)

$

15.3



$

1.0



$

(3.4)



$

12.9










Capital expenditures

$

18.9



$

5.9



$

3.2



$

28.0










Year Ended December 31, 2016










Net sales

$

4,431.3



$

356.3



$

(5.2)



$

4,782.4


Cost of materials and other

3,759.2



93.7



(5.4)



3,847.5


Direct operating expenses(1)

361.9



141.7



0.1



503.7


Major scheduled turnaround expenses

31.5



6.6





38.1


Selling, general and administrative

71.9



29.3



7.9



109.1


Depreciation and amortization

129.0



58.2



5.9



193.1


Operating income (loss)

$

77.8



$

26.8



$

(13.7)



$

90.9










Capital expenditures

$

102.3



$

23.2



$

7.2



$

132.7


____________________

(1) Excluding turnaround expenses.

 



Petroleum
(CVR Refining)


Nitrogen
Fertilizer
(CVR Partners)


Corporate
and Other


Consolidated








(in millions)

December 31, 2017









Cash and cash equivalents


$

173.8



$

49.2



$

258.8



$

481.8


Total assets


2,269.9



1,234.3



302.5



3,806.7


Total debt, including current portion


540.6



625.9





1,166.5











December 31, 2016









Cash and cash equivalents


$

314.1



$

55.6



$

366.1



$

735.8


Total assets


2,331.9



1,312.2



406.1



4,050.2


Total debt, including current portion


541.5



623.1





1,164.6


Petroleum Segment Operating Data

The following tables set forth information about our consolidated Petroleum segment operated by CVR Refining, of which we own a majority interest and serve as the general partner, and the Coffeyville and Wynnewood refineries. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Petroleum segment for the quarter and year ended December 31, 2017 are included in CVR Refining's press release dated February 22, 2018.


Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016


(in millions)

Petroleum Segment Summary Financial Results:








Net sales

$

1,516.7



$

1,269.4



$

5,664.2



$

4,431.3


Operating costs and expenses:








Cost of materials and other

1,281.0



1,107.5



4,804.7



3,759.2


Direct operating expenses(1)

91.5



94.7



363.4



361.9


Major scheduled turnaround expenses

43.0





80.4



31.5


Depreciation and amortization

32.5



32.6



129.3



126.3


Cost of sales

1,448.0



1,234.8



5,377.8



4,278.9


Selling, general and administrative expenses(1)

21.1



18.5



78.8



71.9


Depreciation and amortization

1.1



0.8



3.8



2.7


Operating income

46.5



15.3



203.8



77.8


Interest expense and other financing costs

(12.0)



(11.7)



(47.2)



(43.4)


Interest income

0.1



0.1



0.5



0.1


Loss on derivatives, net

(65.0)



(14.6)



(69.8)



(19.4)


Other income, net

1.4



0.2



1.5



0.2


Income (loss) before income tax expense

(29.0)



(10.7)



88.8



15.3


Income tax expense








Net income (loss)

$

(29.0)



$

(10.7)



$

88.8



$

15.3










Gross profit

$

68.7



$

34.6



$

286.4



$

152.4


Refining margin*

$

235.7



$

161.9



$

859.5



$

672.1


Refining margin adjusted for FIFO impact*

$

205.3



$

139.5



$

829.9



$

620.0


Adjusted Petroleum EBITDA*

$

76.4



$

27.7



$

372.6



$

222.8


____________________

* See "Use of Non-GAAP Financial Measures" below.


(1)

Direct operating expenses for the three months and years ended December 31, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses. Selling, general and administrative expense for the three months and years ended December 31, 2017 and 2016 are shown exclusive of depreciation and amortization, which amounts are presented separately below selling, general and administrative expenses.

 


Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016


(dollars per barrel)

Petroleum Segment Key Operating Statistics:








Per crude oil throughput barrel:








Gross profit

$

3.97



$

1.81



$

3.83



$

2.10


Refining margin*

13.63



8.49



11.50



9.27


FIFO impact, favorable

(1.76)



(1.17)



(0.40)



(0.72)


Refining margin adjusted for FIFO impact*

11.87



7.32



11.10



8.55


Direct operating expenses and major scheduled turnaround expenses

7.78



4.96



5.94



5.43


Direct operating expenses excluding major scheduled turnaround expenses

5.29



4.96



4.86



4.99


Direct operating expenses and major scheduled turnaround expenses per barrel sold

7.06



4.64



5.55



5.08


Direct operating expenses excluding major scheduled turnaround expenses per barrel sold

$

4.80



$

4.64



$

4.55



$

4.67


Barrels sold (barrels per day)

207,112



221,921



218,912



211,643


____________________

* See "Use of Non-GAAP Financial Measures" below.

 


Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016




%




%




%




%

Petroleum Segment Summary Refining Throughput and Production Data (bpd):
















Throughput:
















Sweet

182,339



89.7



185,154



82.9



194,613



89.8



177,256



84.8


Medium





3,160



1.4







2,525



1.2


Heavy sour

5,657



2.8



19,108



8.6



10,135



4.7



18,261



8.7


Total crude oil throughput

187,996



92.5



207,422



92.9



204,748



94.5



198,042



94.7


All other feedstocks and blendstocks

15,267



7.5



15,844



7.1



12,032



5.5



11,077



5.3


Total throughput

203,263



100.0



223,266



100.0



216,780



100.0



209,119



100.0


Production:
















Gasoline

104,169



50.8



114,682



51.1



110,226



50.7



108,762



51.9


Distillate

85,550



41.8



91,021



40.5



90,409



41.6



85,092



40.6


Other (excluding internally produced fuel)

15,128



7.4



18,782



8.4



16,818



7.7



15,751



7.5


Total refining production (excluding internally produced fuel)

204,847



100.0



224,485



100.0



217,453



100.0



209,605



100.0


Product price (dollars per gallon):
















Gasoline

$

1.69





$

1.42





$

1.59





$

1.34




Distillate

1.89





1.52





1.66





1.36




 


Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016

Market Indicators (dollars per barrel):








West Texas Intermediate (WTI) NYMEX

$

55.30



$

49.29



$

50.85



$

43.47


Crude Oil Differentials:








WTI less WTS (light/medium sour)

0.42



0.92



0.97



0.85


WTI less WCS (heavy sour)

16.61



15.04



12.69



13.95


NYMEX Crack Spreads:








Gasoline

16.63



12.96



17.46



15.42


Heating Oil

23.96



16.45



18.93



13.89


NYMEX 2-1-1 Crack Spread

20.29



14.70



18.19



14.66


PADD II Group 3 Product Basis:








Gasoline

(0.14)



(3.70)



(1.83)



(3.62)


Ultra Low Sulfur Diesel

(0.53)



(2.55)



(0.50)



(0.92)


PADD II Group 3 Product Crack Spread:








Gasoline

16.49



9.28



15.63



11.82


Ultra Low Sulfur Diesel

23.42



13.91



18.42



12.96


PADD II Group 3 2-1-1

19.96



11.60



17.03



12.39


 


Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016


(in millions, except operating statistics)

Coffeyville Refinery Financial Results:








Net sales

$

1,117.3



$

854.7



$

3,867.8



$

2,948.9


Cost of materials and other

936.2



750.6



3,285.8



2,513.9


Direct operating expenses(1)

54.6



52.0



209.5



196.4


Major scheduled turnaround expenses







31.5


Depreciation and amortization

17.7



18.4



71.5



69.7


Gross profit

108.8



33.7



301.0



137.4


Add:








Direct operating expenses(1)

54.6



52.0



209.5



196.4


Major scheduled turnaround expenses







31.5


Depreciation and amortization

17.7



18.4



71.5



69.7


Refining margin*

181.1



104.1



582.0



435.0


FIFO impact, favorable

(21.7)



(15.4)



(20.2)



(37.8)


Refining margin adjusted for FIFO impact*

$

159.4



$

88.7



$

561.8



$

397.2










Coffeyville Refinery Key Operating Statistics:








Per crude oil throughput barrel:








Gross profit

$

8.87



$

2.76



$

6.27



$

3.03


Refining margin*

14.77



8.55



12.12



9.57


FIFO impact, favorable

(1.77)



(1.26)



(0.42)



(0.83)


Refining margin adjusted for FIFO impact*

13.00



7.29



11.70



8.74


Direct operating expenses and major scheduled turnaround expenses

4.46



4.27



4.36



5.02


Direct operating expenses excluding major scheduled turnaround expenses

4.46



4.27



4.36



4.32


Direct operating expenses and major scheduled turnaround expenses per barrel sold

4.02



3.84



4.00



4.54


Direct operating expenses excluding major scheduled turnaround expenses per barrel sold

$

4.02



$

3.84



$

4.00



$

3.92


Barrels sold (barrels per day)

147,633



146,930



143,598



137,047


____________________

* See "Use of Non-GAAP Financial Measures" below.


(1)

Direct operating expenses for the three months and years ended December 31, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses.

 


Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016




%




%




%




%

Coffeyville Refinery Throughput and Production Data (bpd):
















Throughput:
















Sweet

127,586



87.9



113,243



78.4



121,434



86.4



104,679



78.9


Medium













1,229



0.9


Heavy sour

5,657



3.9



19,108



13.2



10,135



7.2



18,261



13.8


Total crude oil throughput

133,243



91.8



132,351



91.6



131,569



93.6



124,169



93.6


All other feedstocks and blendstocks

11,834



8.2



12,206



8.4



9,058



6.4



8,453



6.4


Total throughput

145,077



100.0



144,557



100.0



140,627



100.0



132,622



100.0


Production:
















Gasoline

75,531



51.2



75,273



51.1



71,915



50.4



69,303



51.4


Distillate

61,568



41.7



60,550



41.1



59,593



41.7



55,790



41.4


Other (excluding internally produced fuel)

10,490



7.1



11,446



7.8



11,335



7.9



9,756



7.2


Total refining production (excluding internally produced fuel)

147,589



100.0



147,269



100.0



142,843



100.0



134,849



100.0


 


Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016


(in millions, except operating statistics)

Wynnewood Refinery Financial Results:








Net sales

$

398.3



$

413.6



$

1,792.1



$

1,478.0


Cost of materials and other

345.0



356.9



1,519.7



1,245.4


Direct operating expenses(1)

36.9



42.7



153.9



165.5


Major scheduled turnaround expenses

43.0





80.4




Depreciation and amortization

13.2



12.8



51.7



50.7


Gross profit (loss)

(39.8)



1.2



(13.6)



16.4


Add:








Direct operating expenses(1)

36.9



42.7



153.9



165.5


Major scheduled turnaround expenses

43.0





80.4




Depreciation and amortization

13.2



12.8



51.7



50.7


Refining margin*

53.3



56.7



272.4



232.6


FIFO impact, favorable

(8.7)



(7.0)



(9.4)



(14.2)


Refining margin adjusted for FIFO impact*

$

44.6



$

49.7



$

263.0



$

218.4










Wynnewood Refinery Key Operating Statistics:








Per crude oil throughput barrel:








Gross profit (loss)

$

(7.90)



$

0.16



$

(0.51)



$

0.61


Refining margin*

10.58



8.20



10.20



8.60


FIFO impact, favorable

(1.73)



(1.01)



(0.35)



(0.53)


Refining margin adjusted for FIFO impact*

8.85



7.19



9.85



8.07


Direct operating expenses and major scheduled turnaround expenses

15.86



6.19



8.77



6.12


Direct operating expenses excluding major scheduled turnaround expenses

7.32



6.19



5.76



6.12


Direct operating expenses and major scheduled turnaround expenses per barrel sold

14.60



6.20



8.52



6.06


Direct operating expenses excluding major scheduled turnaround expenses per barrel sold

$

6.74



$

6.20



$

5.60



$

6.06


Barrels sold (barrels per day)

59,479



74,991



75,314



74,596


____________________

* See "Use of Non-GAAP Financial Measures" below.


(1)

Direct operating expenses for the three months and years ended December 31, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses.

 


Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016




%




%




%




%

Wynnewood Refinery Throughput and Production Data (bpd):
















Throughput:
















Sweet

54,753



94.1



71,911



91.4



73,179



96.1



72,577



94.9


Medium





3,160



4.0







1,296



1.7


Heavy sour
















Total crude oil throughput

54,753



94.1



75,071



95.4



73,179



96.1



73,873



96.6


All other feedstocks and blendstocks

3,433



5.9



3,638



4.6



2,974



3.9



2,624



3.4


Total throughput

58,186



100.0



78,709



100.0



76,153



100.0



76,497



100.0


Production:
















Gasoline

28,638



50.0



39,409



51.0



38,311



51.3



39,459



52.8


Distillate

23,982



41.9



30,471



39.5



30,816



41.3



29,302



39.2


Other (excluding internally produced fuel)

4,638



8.1



7,336



9.5



5,483



7.4



5,995



8.0


Total refining production (excluding internally produced fuel)

57,258



100.0



77,216



100.0



74,610



100.0



74,756



100.0


Nitrogen Fertilizer Segment Operating Data

The following tables set forth information about the Nitrogen Fertilizer segment operated by CVR Partners, of which we own approximately 34% of the common units as of December 31, 2017 and serve as the general partner. The financial and operational data include East Dubuque Facility, beginning on April 1, 2016, the date of the closing of the acquisition. Reconciliations of certain non-GAAP financial measures are provided under "Use of Non-GAAP Financial Measures" below. Additional discussion of operating results for the Nitrogen Fertilizer segment for the quarter and year ended December 31, 2017 are included in CVR Partners' press release dated February 22, 2018.


Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016


(in millions)

Nitrogen Fertilizer Segment Business Financial Results:








Net sales

$

78.2



$

84.9



$

330.8



$

356.3


Cost of materials and other

21.6



21.5



84.9



93.7


Direct operating expenses(1)

41.5



37.9



152.9



141.7


Major scheduled turnaround expenses





2.6



6.6


Depreciation and amortization

19.1



17.2



74.0



58.2


Cost of sales

82.2



76.6



314.4



300.2


Selling, general and administrative expenses

6.8



7.3



25.6



29.3


Operating income (loss)

(10.8)



1.0



(9.2)



26.8


Interest expense and other financing costs

(15.8)



(15.8)



(62.9)



(48.6)


Gain (loss) on extinguishment of debt



0.2





(4.9)


Other income (loss), net

(0.6)



0.1



(0.5)



0.1


Loss before income tax expense

(27.2)



(14.5)



(72.6)



(26.6)


Income tax expense

0.2





0.2



0.3


Net loss

$

(27.4)



$

(14.5)



$

(72.8)



$

(26.9)










Adjusted Nitrogen Fertilizer EBITDA*

$

7.7



$

18.3



$

65.8



$

92.7


____________________

* See Use of Non-GAAP Financial Measures below.


(1)

Direct operating expenses for the three months and years ended December 31, 2017 and 2016 are shown exclusive of depreciation and amortization and major scheduled turnaround expenses, which amounts are presented separately below direct operating expenses.

 


Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016

Nitrogen Fertilizer Segment Key Operating Statistics:
















Consolidated sales (thousand tons):








Ammonia

84.3



55.7



286.1



201.4


UAN

302.9



335.1



1,254.5



1,237.5










Consolidated product pricing at gate (dollars per ton)(1):








Ammonia

$

264



$

352



$

280



$

376


UAN

$

132



$

147



$

152



$

177










Consolidated production volume (thousand tons):








Ammonia (gross produced)(2)

199.5



207.6



814.7



693.5


Ammonia (net available for sale)(2)

64.1



62.6



267.8



183.6


UAN

306.1



330.7



1,268.4



1,192.6










Feedstock:








Petroleum coke used in production (thousand tons)

116.5



129.4



487.5



513.7


Petroleum coke used in production (dollars per ton)

$

13



$

18



$

17



$

15


Natural gas used in production (thousands of MMBtus)(3)

1,838.8



2,124.3



7,619.5



5,596.0


Natural gas used in production (dollars per MMBtu)(3) (4)

$

3.24



$

3.30



$

3.24



$

2.96


Natural gas in cost of materials and other (thousands of MMBtus)(3)

2,153.2



1,876.2



8,051.5



4,618.7


Natural gas in cost of materials and other (dollars per MMBtus)(3) (4)

$

3.17



$

3.15



$

3.26



$

2.87










Coffeyville Facility on-stream factor(5):








Gasification

100.0

%


96.1

%


98.5

%


96.9

%

Ammonia

99.5

%


91.1

%


97.4

%


94.9

%

UAN

88.8

%


93.1

%


91.7

%


93.1

%









East Dubuque Facility on-stream factors(5):








Ammonia

86.3

%


99.7

%


90.4

%


87.7

%

UAN

86.8