CVRR
$12.55
Cvr Refining LP
$.20
1.62%
Earnings Details
3rd Quarter September 2017
Wednesday, November 01, 2017 8:30:00 AM
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Summary

Cvr Refining LP (CVRR) Recent Earnings

Cvr Refining LP (CVRR) reported 3rd Quarter September 2017 earnings of $0.47 per share on revenue of $1.4 billion. The consensus earnings estimate was $0.59 per share. Revenue grew 19.1% on a year-over-year basis.

CVR Refining LP is an independent downstream energy limited partnership with refining & related logistics assets that operates in the mid-continent region. Its business includes a complex full coking medium-sour crude oil refinery in Coffeyville, Kansas.

Results
Reported Earnings
$0.47
Earnings Whisper
-
Consensus Estimate
$0.59
Reported Revenue
$1.39 Bil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CVR Refining Reports 2017 Third Quarter Results And Announces Cash Distribution of 94 Cents

CVR Refining, LP (CVRR), a refiner and marketer of petroleum fuels, today announced third quarter 2017 net income of $70.0 million on net sales of $1,385.8 million, compared to net income of $15.9 million on net sales of $1,163.5 million for the third quarter of 2016. Adjusted EBITDA, a non-GAAP financial measure, for the 2017 third quarter was $138.6 million compared to adjusted EBITDA of $75.3 million for the 2016 third quarter.

https://mma.prnewswire.com/media/594417/CVR_REFINING__LP_LOGO.jpg

For the first nine months of 2017, net income was $117.8 million on net sales of $4,147.5 million, compared to net income of $26.0 million on net sales of $3,161.9 million for the comparable period a year earlier. Adjusted EBITDA for the first nine months of 2017 was $296.2 million, compared to adjusted EBITDA of $195.1 million for the first nine months of 2016.

"Led by the stellar performance of our Coffeyville refinery, we are pleased to announce a third quarter 2017 CVR Refining distribution of 94 cents," said Jack Lipinski, chief executive officer. "However, the over-priced and volatile RIN price continue to adversely affect our business. Unless the Administration and EPA step up to fix this broken program, the future viability of merchant refiners will continue to be at risk.

"The Coffeyville, Kansas, and Wynnewood, Oklahoma, refineries ran well during the 2017 third quarter, posting a total combined crude throughput of 203,093 barrels per day (bpd) despite operational disruptions at both plants," Lipinski said. "In addition, the Wynnewood refinery began planned fall maintenance at the end of September and is on schedule to complete its turnaround in early November. As a result of the large scale and cost of the Wynnewood turnaround, CVR Refining’s results will be negatively impacted for the year."

Consolidated Operations

Third quarter 2017 throughputs of crude oil and all other feedstocks and blendstocks totaled 213,606 bpd. Throughputs of crude oil and all other feedstocks and blendstocks for both refineries totaled 206,733 bpd for the same period in 2016.

Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $13.72 in the 2017 third quarter, compared to $10.09 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 third quarter were $6.47, compared to $5.33 in the third quarter of 2016.

Distributions

CVR Refining also announced today a third quarter 2017 distribution of 94 cents per common unit. The distribution, as set by the board of CVR Refining GP, LLC, the general partner of CVR Refining, will be paid on Nov. 17, 2017, to unitholders of record on Nov. 10, 2017.

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 2017 Earnings Conference Call

CVR Refining previously announced that it will host its third quarter 2017 Earnings Conference Call for analysts and investors on Wednesday, Nov. 1, 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/1005/23021. 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/1005/23021. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13672108.

This release serves as a qualified notice to nominees and brokers as provided for under Treasury Regulation Section 1.1446-4(b). Please note that 100 percent of CVR Refining’s distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, CVR Refining’s distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate.

Forward-Looking Statements This news release contains forward-looking statements. You can generally identify forward-looking statements by our use of forward-looking terminology such as "outlook," "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "seek," "should," or "will," or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. For a discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings. These risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. CVR Refining disclaims any intention or obligation to update publicly or revise its forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.

About CVR Refining, LP Headquartered in Sugar Land, Texas, CVR Refining, LP is an independent downstream energy limited partnership that owns refining and related logistics assets in the Midcontinent United States. CVR Refining’s subsidiaries operate a complex full coking medium-sour crude oil refinery with a rated capacity of 115,000 barrels per calendar day (bpcd) in Coffeyville, Kansas, and a complex crude oil refinery with a rated capacity of 70,000 bpcd in Wynnewood, Oklahoma. CVR Refining’s subsidiaries also operate and invest in supporting logistics assets, including approximately 340 miles of active owned and leased pipelines, a 65,000 bpcd pipeline owned and operated by a joint venture, approximately 150 crude oil transports, a network of strategically located crude oil gathering tank farms, and approximately 6.4 million barrels of owned and leased crude oil storage capacity.

For further information, please contact:

Investor Contact: Jay Finks CVR Refining, LP (281) 207-3588 IR@CVRRefining.com

Media Relations: Brandee Stephens CVR Refining, LP (281) 207-3516 MediaRelations@CVRRefining.com

CVR Refining, LP
Financial and Operational Data (all information in this release is unaudited other than the balance sheet data as of December 31, 2016).
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
(in millions, except per unit data)
Statement of Operations Data:
Net sales
$
1,385.8
$
1,163.5
$
4,147.5
$
3,161.9
Operating costs and expenses:
Cost of materials and other
1,114.4
987.5
3,523.7
2,651.7
Direct operating expenses(1)(2)
120.9
97.0
309.3
298.7
Depreciation and amortization
31.8
31.9
96.8
93.7
Cost of sales
1,267.1
1,116.4
3,929.8
3,044.1
Selling, general and administrative expenses(1)
18.8
18.1
57.7
53.4
Depreciation and amortization
1.2
0.6
2.7
1.9
Operating income
98.7
28.4
157.3
62.5
Interest expense and other financing costs
(12.0)
(10.8)
(35.2)
(31.7)
Interest income
0.2
--
0.4
--
Loss on derivatives, net
(17.0)
(1.7)
(4.8)
(4.8)
Other income, net
0.1
--
0.1
--
Income before income tax expense
70.0
15.9
117.8
26.0
Income tax expense (benefit)
--
--
--
--
Net income
$
70.0
$
15.9
$
117.8
$
26.0
Net income per common unit - basic and diluted
$
0.47
$
0.11
$
0.80
$
0.18
Adjusted EBITDA*
$
138.6
$
75.3
$
296.2
$
195.1
Available cash for distribution*
$
138.6
$
0.3
$
138.6
$
0.3
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 and selling, general and administrative expenses for the three and nine months ended September 30, 2017 and 2016 are shown exclusive of depreciation and amortization, which amounts are presented separately below direct operating expenses and selling, general and administrative expenses.
(2) Direct operating expenses includes $21.7 million and $37.4 million of major scheduled turnaround expenses during the three and nine months ended September 30, 2017, respectively. 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,
As of December 31,
2017
2016
(audited)
(in millions)
Balance Sheet Data:
Cash and cash equivalents
$
560.4
$
314.1
Working capital
467.3
313.7
Total assets
2,500.7
2,331.9
Total debt, including current portion 540.9
541.5
Total partners’ capital
1,414.5
1,296.7
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
(in millions)
Cash Flow Data:
Net cash flow provided by (used in):
Operating activities
$
63.0
$
145.6
$
314.3
$
186.4
Investing activities
(17.8)
(18.6)
(66.6)
(86.6)
Financing activities
(0.5)
(0.4)
(1.4)
(1.2)
Net cash flow
$
44.7
$
126.6
$
246.3
$
98.6
Capital expenditures for property, plant and equipment:
Maintenance capital expenditures
$
15.1
$
10.5
$
58.0
$
50.1
Growth capital expenditures
3.6
4.9
8.1
33.3
Total capital expenditures
$
18.7
$
15.4
$
66.1
$
83.4

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
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
Key Operating Statistics:
Per crude oil throughput barrel:
Gross profit
$
6.35
$
2.59
$
3.79
$
2.21
Refining margin*
14.52
9.66
10.86
9.55
FIFO impact, (favorable) unfavorable
(0.80)
0.43
0.01
(0.56)
Refining margin adjusted for FIFO impact*
13.72
10.09
10.87
8.99
Direct operating expenses and major scheduled turnaround expenses
6.47
5.33
5.38
5.59
Direct operating expenses excluding major scheduled turnaround expenses
5.31
5.33
4.73
5.00
Direct operating expenses and major scheduled turnaround expenses per barrel sold
6.26
5.04
5.08
5.24
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold $
5.13
$
5.04
$
4.47
$
4.68
Barrels sold (barrels per day)
210,002
209,228
222,889
208,192
____________________
* See "Use of Non-GAAP Financial Measures" below.
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
%
%
%
%
Refining Throughput and Production Data (bpd):
Throughput:
Sweet
196,342
91.9
176,404
85.3
198,750
89.8
174,594
85.4
Medium
--
--
1,983
1.0
--
--
2,321
1.1
Heavy sour
6,751
3.2
19,568
9.5
11,643
5.3
17,978
8.9
Total crude oil throughput
203,093
95.1
197,955
95.8
210,393
95.1
194,893
95.4
All other feedstocks and blendstocks
10,513
4.9
8,778
4.2
10,943
4.9
9,476
4.6
Total throughput
213,606
100.0
206,733
100.0
221,336
100.0
204,369
100.0
Production:
Gasoline
105,712
49.5
106,120
51.2
112,268
50.6
106,774
52.2
Distillate
89,655
42.0
84,669
40.9
92,046
41.5
83,101
40.6
Other (excluding internally produced fuel)
18,107
8.5
16,390
7.9
17,385
7.9
14,738
7.2
Total refining production (excluding internally produced fuel) 213,474
100.0
207,179
100.0
221,699
100.0
204,613
100.0
Product price (dollars per gallon):
Gasoline
$
1.63
$
1.45
$
1.56
$
1.31
Distillate
1.67
1.45
1.58
1.30
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
Market Indicators (dollars per barrel):
West Texas Intermediate (WTI) NYMEX
$
48.20
$
44.94
$
49.36
$
41.53
Crude Oil Differentials:
WTI less WTS (light/medium sour)
0.97
1.47
1.15
0.82
WTI less WCS (heavy sour)
10.48
14.23
11.42
13.59
NYMEX Crack Spreads:
Gasoline
20.42
13.73
17.74
16.24
Heating Oil
21.05
14.34
17.24
13.04
NYMEX 2-1-1 Crack Spread
20.73
14.03
17.49
14.64
PADD II Group 3 Basis:
Gasoline
(1.18)
0.48
(2.37)
(3.59)
Ultra Low Sulfur Diesel
0.85
1.01
(0.44)
(0.38)
PADD II Group 3 Product Crack Spread:
Gasoline
19.23
14.21
15.37
12.65
Ultra Low Sulfur Diesel
21.90
15.35
16.80
12.65
PADD II Group 3 2-1-1
20.57
14.78
16.09
12.65
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
(in millions, except operating statistics)
Coffeyville Refinery Financial Results:
Net sales
$
939.3
$
788.1
$
2,750.5
$
2,094.1
Cost of materials and other
767.7
669.9
2,349.7
1,763.3
Direct operating expenses(1)
56.7
50.7
154.9
144.5
Major scheduled turnaround expenses
--
--
--
31.5
Depreciation and amortization
17.4
17.7
53.8
51.2
Gross profit
97.5
49.8
192.1
103.6
Add:
Direct operating expenses(1)
56.7
50.7
154.9
144.5
Major scheduled turnaround expenses
--
--
--
31.5
Depreciation and amortization
17.4
17.7
53.8
51.2
Refining margin*
171.6
118.2
400.8
330.8
FIFO impact, (favorable) unfavorable
(10.1)
4.0
1.5
(22.4)
Refining margin adjusted for FIFO impact*
$
161.5
$
122.2
$
402.3
$
308.4
Coffeyville Refinery Key Operating Statistics:
Per crude oil throughput barrel:
Gross profit
$
8.26
$
4.15
$
5.37
$
3.12
Refining margin*
14.52
9.86
11.21
9.94
FIFO impact, (favorable) unfavorable
(0.86)
0.33
0.04
(0.67)
Refining margin adjusted for FIFO impact*
13.66
10.19
11.25
9.27
Direct operating expenses and major scheduled turnaround expenses
4.80
4.23
4.33
5.29
Direct operating expenses excluding major scheduled turnaround expenses
4.80
4.23
4.33
4.34
Direct operating expenses and major scheduled turnaround expenses per barrel sold
4.50
3.93
3.99
4.80
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold $
4.50
$
3.93
$
3.99
$
3.94
Barrels sold (barrels per day)
136,776
140,256
142,238
133,729
____________________
* See "Use of Non-GAAP Financial Measures" below.
(1) Direct operating expenses for the three and nine months ended September 30, 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
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
%
%
%
%
Coffeyville Refinery Throughput and Production Data (bpd):
Throughput:
Sweet
121,710
89.6
110,825
81.0
119,361
85.8
101,803
79.2
Medium
--
--
--
--
--
--
1,641
1.3
Heavy sour
6,751
5.0
19,568
14.3
11,643
8.4
17,978
13.9
Total crude oil throughput
128,461
94.6
130,393
95.3
131,004
94.2
121,422
94.4
All other feedstocks and blendstocks
7,415
5.4
6,399
4.7
8,124
5.8
7,193
5.6
Total throughput
135,876
100.0
136,792
100.0
139,128
100.0
128,615
100.0
Production:
Gasoline
67,598
49.1
70,013
50.3
70,697
50.1
67,298
51.5
Distillate
57,654
41.9
57,839
41.6
58,927
41.7
54,192
41.5
Other (excluding internally produced fuel)
12,355
9.0
11,286
8.1
11,619
8.2
9,191
7.0
Total refining production (excluding internally produced fuel) 137,607
100.0
139,138
100.0
141,243
100.0
130,681
100.0
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
(in millions, except operating statistics)
Wynnewood Refinery Financial Results:
Net sales
$
445.3
$
374.3
$
1,393.7
$
1,064.4
Cost of materials and other
346.9
317.7
1,174.6
888.5
Direct operating expenses(1)
42.5
46.3
117.0
122.7
Major scheduled turnaround expenses
21.7
--
37.4
--
Depreciation and amortization
12.9
12.7
38.5
37.9
Gross profit (loss)
21.3
(2.4)
26.2
15.3
Add:
Direct operating expenses(1)
42.5
46.3
117.0
122.7
Major scheduled turnaround expenses
21.7
--
37.4
--
Depreciation and amortization
12.9
12.7
38.5
37.9
Refining margin*
98.4
56.6
219.1
175.9
FIFO impact, (favorable) unfavorable
(4.8)
3.8
(0.7)
(7.3)
Refining margin adjusted for FIFO impact*
$
93.6
$
60.4
$
218.4
$
168.6
Wynnewood Refinery Key Operating Statistics:
Per crude oil throughput barrel:
Gross profit (loss)
$
3.10
$
(0.39)
$
1.21
$
0.76
Refining margin*
14.33
9.10
10.11
8.74
FIFO impact, (favorable) unfavorable
(0.70)
0.61
(0.03)
(0.36)
Refining margin adjusted for FIFO impact*
13.63
9.71
10.08
8.38
Direct operating expenses and major scheduled turnaround expenses
9.35
7.45
7.13
6.10
Direct operating expenses excluding major scheduled turnaround expenses
6.18
7.45
5.40
6.10
Direct operating expenses and major scheduled turnaround expenses per barrel sold
9.53
7.29
7.01
6.01
Direct operating expenses excluding major scheduled turnaround expenses per barrel sold $
6.30
$
7.29
$
5.32
$
6.01
Barrels sold (barrels per day)
73,226
68,971
80,651
74,463
____________________
* See "Use of Non-GAAP Financial Measures" below.
(1) Direct operating expenses for the three and nine months ended September 30, 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
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
%
%
%
%
Wynnewood Refinery Throughput and Production Data (bpd):
Throughput:
Sweet
74,632
96.0
65,579
93.8
79,389
96.6
72,791
96.1
Medium
--
--
1,983
2.8
--
--
680
0.9
Heavy sour
--
--
--
--
--
--
--
--
Total crude oil throughput
74,632
96.0
67,562
96.6
79,389
96.6
73,471
97.0
All other feedstocks and blendstocks
3,098
4.0
2,379
3.4
2,819
3.4
2,283
3.0
Total throughput
77,730
100.0
69,941
100.0
82,208
100.0
75,754
100.0
Production:
Gasoline
38,114
50.2
36,107
53.1
41,571
51.6
39,476
53.4
Distillate
32,001
42.2
26,830
39.4
33,119
41.2
28,909
39.1
Other (excluding internally produced fuel)
5,752
7.6
5,104
7.5
5,766
7.2
5,547
7.5
Total refining production (excluding internally produced fuel) 75,867
100.0
68,041
100.0
80,456
100.0
73,932
100.0

Use of Non-GAAP Financial Measures

To supplement our actual results in accordance with GAAP for the applicable periods, CVR Refining, LP (the "Partnership") also uses the non-GAAP financial measures noted above, which are reconciled to our GAAP-based results below. These non-GAAP financial measures should not be considered an alternative for GAAP results. The adjustments are provided to enhance an overall understanding of the Partnership’s financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.

Refining margin per crude oil throughput barrel is a measurement calculated as the difference between net sales and cost of materials and other. Refining margin is a non-GAAP measure that we believe is important to investors in evaluating our refineries’ performance as a general indication of the amount above our cost of materials and other at which we are able to sell refined products. Each of the components used in this calculation (net sales and cost of materials and other) can be taken directly from our Statements of Operations. Our calculation of refining margin may differ from similar calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure. In order to derive the refining margin per crude oil throughput barrel, we utilize the total dollar figures for refining margin as derived above and divide by the applicable number of crude oil throughput barrels for the period. We believe that refining margin is important to enable investors to better understand and evaluate our ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance.

Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference between net sales and cost of materials and other adjusted for FIFO impact. Refining margin adjusted for FIFO impact is a non-GAAP measure that we believe is important to investors in evaluating our refineries’ performance as a general indication of the amount above our cost of materials and other (taking into account the impact of our utilization of FIFO) at which we are able to sell refined products. Our calculation of refining margin adjusted for FIFO impact may differ from calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure. Under our FIFO accounting method, changes in crude oil prices can cause fluctuations in the inventory valuation of our crude oil, work in process and finished goods, thereby resulting in a favorable FIFO impact when crude oil prices increase and an unfavorable FIFO impact when crude oil prices decrease.

The calculation of refining margin and refining margin adjusted for FIFO impact (each a non-GAAP financial measure), including a reconciliation to the most directly comparable GAAP financial measure for the three and nine months ended September 30, 2017 and 2016 is as follows:

Consolidated Operating Data
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
(in millions)
Net sales
$
1,385.8
$
1,163.5
$
4,147.5
$
3,161.9
Cost of materials and other
1,114.4
987.5
3,523.7
2,651.7
Direct operating expenses (exclusive of depreciation and amortization and major scheduled turnaround expenses as reflected below) 99.2
97.0
271.9
267.2
Major scheduled turnaround expenses
21.7
--
37.4
31.5
Depreciation and amortization
31.8
31.9
96.8
93.7
Gross profit
118.7
47.1
217.7
117.8
Add:
Direct operating expenses (exclusive of depreciation and amortization and major scheduled turnaround expenses as reflected below) 99.2
97.0
271.9
267.2
Major scheduled turnaround expenses
21.7
--
37.4
31.5
Depreciation and amortization
31.8
31.9
96.8
93.7
Refining margin
271.4
176.0
623.8
510.2
FIFO impact, (favorable) unfavorable
(14.9)
7.7
0.8
(29.7)
Refining margin adjusted for FIFO impact
$
256.5
$
183.7
$
624.6
$
480.5

The calculation of refining margin per crude oil throughput barrel and refining margin adjusted for FIFO impact per crude oil throughput barrel for the three and nine months ended September 30, 2017 and 2016 is as follows:

Consolidated Operating Data
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
Total crude oil throughput barrels per day
203,093
197,955
210,393
194,893
Days in the period
92
92
273
274
Total crude oil throughput barrels
18,684,556
18,211,860
57,437,289
53,400,682
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
(in millions, except for $ per barrel data)
Refining margin
$
271.4
$
176.0
$
623.8
$
510.2
Divided by: crude oil throughput barrels
18.7
18.2
57.4
53.4
Refining margin per crude oil throughput barrel
$
14.52
$
9.66
$
10.86
$
9.55
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
(in millions, except for $ per barrel data)
Refining margin adjusted for FIFO impact
$
256.5
$
183.7
$
624.6
$
480.5
Divided by: crude oil throughput barrels
18.7
18.2
57.4
53.4
Refining margin adjusted for FIFO impact per crude oil throughput barrel $
13.72
$
10.09
$
10.87
$
8.99
Coffeyville Refinery
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
Total crude oil throughput barrels per day
128,461
130,393
131,004
121,422
Days in the period
92
92
273
274
Total crude oil throughput barrels
11,818,412
11,996,156
35,764,092
33,269,628
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
(in millions, except for $ per barrel data)
Refining margin
$
171.6
$
118.2
$
400.8
$
330.8
Divided by: crude oil throughput barrels
11.8
12.0
35.8
33.3
Refining margin per crude oil throughput barrel
$
14.52
$
9.86
$
11.21
$
9.94
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
(in millions, except for $ per barrel data)
Refining margin adjusted for FIFO impact
$
161.5
$
122.2
$
402.3
$
308.4
Divided by: crude oil throughput barrels
11.8
12.0
35.8
33.3
Refining margin adjusted for FIFO impact per crude oil throughput barrel $
13.66
$
10.19
$
11.25
$
9.27
Wynnewood Refinery
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
Total crude oil throughput barrels per day
74,632
67,562
79,389
73,471
Days in the period
92
92
273
274
Total crude oil throughput barrels
6,866,144
6,215,704
21,673,197
20,131,054
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
(in millions, except for $ per barrel data)
Refining margin
$
98.4
$
56.6
$
219.1
$
175.9
Divided by: crude oil throughput barrels
6.9
6.2
21.7
20.1
Refining margin per crude oil throughput barrel
$
14.33
$
9.10
$
10.11
$
8.74
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
(in millions, except for $ per barrel data)
Refining margin adjusted for FIFO impact
$
93.6
$
60.4
$
218.4
$
168.6
Divided by: crude oil throughput barrels
6.9
6.2
21.7
20.1
Refining margin adjusted for FIFO impact per crude oil throughput barrel $
13.63
$
9.71
$
10.08
$
8.38

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) major scheduled turnaround expenses (that many of our competitors capitalize and thereby exclude from their measures of EBITDA and adjusted EBITDA); (iii) 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 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, 2017 and 2016 is as follows:

Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
(in millions)
Net income
$
70.0
$
15.9
$
117.8
$
26.0
Add:
Interest expense and other financing costs, net of interest income 11.8
10.8
34.8
31.7
Income tax expense
--
--
--
--
Depreciation and amortization
33.0
32.5
99.5
95.6
EBITDA
114.8
59.2
252.1
153.3
Add:
FIFO impact, (favorable) unfavorable
(14.9)
7.7
0.8
(29.7)
Major scheduled turnaround expenses
21.7
--
37.4
31.5
Loss on derivatives, net
17.0
1.7
4.8
4.8
Current period settlements on derivative contracts(1)
--
6.7
1.1
35.2
Adjusted EBITDA
$
138.6
$
75.3
$
296.2
$
195.1
____________________
(1)
Represents the portion of loss on derivatives, net related to contracts that matured during the respective periods and settled with counterparties. There are no premiums paid or received at inception of the derivative contracts and upon settlement, there is no cost recovery associated with these contracts.

Available cash for distribution is not a recognized term under GAAP. Available cash should not be considered in isolation or as an alternative to net income 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
Nine Months Ended
September 30, 2017
September 30, 2017
(in millions, except per unit data)
Adjusted EBITDA
$
138.6
$
296.2
Adjustments:
Less:
Cash needs for debt service
(10.0)
(30.0)
Reserves for environmental and maintenance capital expenditures (25.0)
(78.1)
Reserves for major scheduled turnaround expenses
(15.0)
(45.0)
Reserves for future operating needs
--
(54.5)
Add:
Release of previously established cash reserves
50.0
50.0
Available cash for distribution
$
138.6
$
138.6
Available cash for distribution, per common unit
$
0.94
$
0.94
Common units outstanding
147.6
147.6

Derivatives Summary. The Partnership enters into commodity swap contracts through crack spread swap agreements with financial counterparties to fix the spread risk between the crude oil the Partnership purchases and the refined products the refineries produce for sale. Through these swaps, the Partnership will sell a fixed differential for the value between the selected refined product benchmark and the benchmark crude oil price, thereby locking in a margin for a portion of the refineries’ production. The physical volumes are not exchanged and these contracts are net settled with cash. From time to time, the Partnership holds various NYMEX positions through a third-party clearing house.

The table below summarizes our open commodity swap positions as of September 30, 2017. The positions are primarily in the form of crack spread swap agreements with financial counterparties, wherein the Partnership has locked in differentials at the fixed prices noted below. As of September 30, 2017, the open commodity swap positions for 2017 and 2018 were comprised of approximately 39.8% for 2-1-1 crack swaps, 30.1% for distillate crack swaps and 30.1% for gasoline crack swaps.

Commodity Swaps
Barrels
Fixed Price (1)
Fourth Quarter 2017
7,050,000
$
17.80
First Quarter 2018
7,050,000
18.66
Second Quarter 2018
1,950,000
21.09
Third Quarter 2018
150,000
19.22
Total
16,200,000 $
18.59
________________
(1)
Weighted-average price of all positions for period indicated.

Q4 2017 Outlook. The table below summarizes our outlook for certain refining statistics for the fourth quarter of 2017. See "Forward-Looking Statements."

Q4 2017
Low
High
Refinery Statistics:
Total crude oil throughput (bpd) 185,000
195,000
Total refining production (bpd)
200,000
215,000

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SOURCE CVR Refining, LP

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