Attached files
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| 8-K - 8-K - CVR Refining, LP | cvrr8-kxq22016earningspres.htm |
2nd Quarter 2016 Earnings Report
July 28, 2016
Forward Looking Statements
2
This presentation should be reviewed in conjunction with CVR Refining, LP’s Second Quarter earnings
conference call held on July 28, 2016. 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.
Consolidated Financial Results Second Quarter Year to Date
(In millions, except for throughput and market data)
6/30/2016 6/30/2015 6/30/2016 6/30/2015
Net Income $ 78.1 $ 227.8 $ 10.1 $ 274.5
Refining Margin(1)(2)(3) $ 176.3 $ 330.2 $ 296.8 $ 603.0
Operating Income $ 90.1 $ 250.8 $ 34.1 $ 360.0
Adjusted EBITDA(4)(5) $ 84.7 $ 194.3 $ 119.8 $ 356.0
NYMEX 2-1-1 Crack Spread $ 15.98 $ 23.85 $ 14.95 $ 23.33
PADD II Group 3 2-1-1 Crack Spread $ 12.64 $ 18.91 $ 11.56 $ 18.85
Direct Operating Expenses excluding Major Scheduled Turnaround Expenses
(per crude oil throughput barrel)(6) $ 4.45 $ 4.62 $ 4.84 $ 4.71
Consolidated Selected Financials and Key Performance Indicators
Balance Sheet and Cash Flow Data Second
Quarter(In millions, except per unit data)
6/30/2016
Cash and Cash Equivalents $ 159.3
Total Debt, including current portion(7) $ 579.2
Partners' Capital $ 1,291.5
Cash Flow from Operations $ 37.8
Available Cash for Distribution $ —
Available Cash for Distribution, per unit(8) $ —
(1) Adjusted for FIFO impact
(2) Definition on slide 11
(3) Non-GAAP reconciliation on slide 12
(4) Non-GAAP reconciliation on slide 13
3
(5) Definition on slide 10
(6) Reconciliation on slide 6
(7) Amounts presented are gross debt not net of unamortized debt issuance costs
(8) Non-GAAP reconciliation on slide 14
Q2 2016 Q2 2015 YTD 2016 YTD 2015
127.4 130.9
116.9
128.9
Q2 2016 Q2 2015 YTD 2016 YTD 2015
138.0 144.2
130.4
142.6
Refinery Crude Throughput
(mbpd)
(1) Adjusted for FIFO impact
(2) Definition on slide 11
(3) Reconciliation on slide 6
Barrels Sold
(mbpd)
Q2 2016 Q2 2015 YTD 2016 YTD 2015
$10.09
$17.83
$8.75
$16.36
Refining Margin(1)(2)
($ / bpd)
Q2 2016 Q2 2015 YTD 2016 YTD 2015
$3.98
$4.29 $4.41 $4.35
Direct Operating Expenses Excluding Major Scheduled
Turnaround Expenses(3)
($ / bpd)
Coffeyville Refinery
4
Q2 2016 Q2 2015 YTD 2016 YTD 2015
75.1
79.8
76.5 77.3
Q2 2016 Q2 2015 YTD 2016 YTD 2015
75.3
79.8
77.2
78.3
Refinery Crude Throughput
(mbpd)
(1) Adjusted for FIFO impact
(2) Definition on slide 11
(3) Reconciliation on slide 6
Barrels Sold
(mbpd)
Q2 2016 Q2 2015 YTD 2016 YTD 2015
$8.51
$16.09
$7.79
$15.65
Refining Margin(1)(2)
($ / bpd)
Q2 2016 Q2 2015 YTD 2016 YTD 2015
$5.24
$5.16
$5.49
$5.29
Direct Operating Expenses Excluding Major Scheduled
Turnaround Expenses(3)
($ / bpd)
Wynnewood Refinery
5
Consolidated Second Quarter Year to Date
($ in millions) 6/30/2016 6/30/2015 6/30/2016 6/30/2015
Direct operating expenses and major scheduled turnaround expenses $ 84.0 $ 90.3 $ 201.7 $ 177.3
Less: major scheduled turnaround expenses 2.1 1.7 31.5 1.7
Direct Operating Expenses excluding major scheduled turnaround expenses $ 81.9 $ 88.6 $ 170.2 $ 175.6
Direct Operating Expenses less major scheduled turnaround expenses per
barrel of crude throughput $ 4.45 $ 4.62 $ 4.84 $ 4.71
6
Direct Operating Expenses
Coffeyville Second Quarter Year to Date
($ in millions) 6/30/2016 6/30/2015 6/30/2016 6/30/2015
Direct operating expenses and major scheduled turnaround expenses $ 48.2 $ 52.9 $ 125.3 $ 103.2
Less: major scheduled turnaround expenses 2.1 1.7 31.5 1.7
Direct Operating Expenses excluding major scheduled turnaround expenses $ 46.1 $ 51.2 $ 93.8 $ 101.5
Direct Operating Expenses less major scheduled turnaround expenses per
barrel of crude throughput $ 3.98 $ 4.29 $ 4.41 $ 4.35
Wynnewood Second Quarter Year to Date
($ in millions) 6/30/2016 6/30/2015 6/30/2016 6/30/2015
Direct operating expenses and major scheduled turnaround expenses $ 35.8 $ 37.5 $ 76.4 $ 74.1
Less: major scheduled turnaround expenses — — — —
Direct Operating Expenses excluding major scheduled turnaround expenses $ 35.8 $ 37.5 $ 76.4 $ 74.1
Direct Operating Expenses less major scheduled turnaround expenses per
barrel of crude throughput $ 5.24 $ 5.16 $ 5.49 $ 5.29
$450
$400
$350
$300
$250
$200
$150
2013 2014 2015 Q2 2016
$302.9
$211.2
$392.7
$419.9
Note: Refer to slide 15 for metrics used in calculations
Debt Metrics
7
Financial Metrics 2013 2014 2015 Q2 2016 LTM
w Debt to Capital 28% 29% 31% 31%
w Debt to Adj. EBITDA 0.8 0.9 1.0 1.6
Net Debt
($ in millions)
Coffeyville
($ in millions)
Note: Refer to slide 17 for metrics used in calculations
Wynnewood
($ in millions)
Capital Spending
8
n Environmental & Maintenance n Growth
$250
$200
$150
$100
$50
$0
2013 2014 2015 2016 E
$200
$150
$100
$50
$0
2013 2014 2015 2016 E
Consolidated Capital Spending Summary
2013 2014 2015 2016 Estimate
Environmental & Maintenance $169.6 $140.3 $103.4 $108.0
Growth 34.9 51.0 91.3 52.0
Total Capital Spending $204.5 $191.3 $194.7 $160.0
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 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 FIFO impact (favorable) unfavorable; share-based compensation, non-cash; major scheduled
turnaround expenses; loss on extinguishment of debt; (gain) loss on derivatives, net; current period settlements on
derivative contracts and flood insurance recovery. We present Adjusted EBITDA because it is the starting point for our
calculation of available cash for distribution. EBITDA and Adjusted EBITDA are not recognized terms under GAAP
and should not be substituted for net income or cash flow from operations. Management believes that EBITDA and
Adjusted EBITDA enable investors to better understand our ability to make distributions to our common unitholders,
help investors evaluate our ongoing operating results and allow for greater transparency in reviewing our overall
financial, operational and economic performance. EBITDA and Adjusted EBITDA presented by other companies may
not be comparable to our presentation, since each company may define these terms differently.
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.
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 product sold (exclusive of depreciation and amortization). Refining margin is a non-GAAP measure that we
believe is important to investors in evaluating our refineries' performance as a general indication of the amount above
our cost of product sold at which we are able to sell refined products. Each of the components used in this calculation
(net sales and cost of product sold exclusive of depreciation and amortization) can be taken directly from our Statements
of Operations. Our calculation of refining margin may differ from similar calculations of other companies in our
industry, thereby limiting its usefulness as a comparative measure. In order to derive the refining margin per crude oil
throughput barrel, we utilize the total dollar figures for refining margin as derived above and divide by the applicable
number of crude oil throughput barrels for the period. We believe that refining margin is important to enable investors
to better understand and evaluate our ongoing operating results and allow for greater transparency in the review of
our overall financial, operational and economic performance.
Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference
between net sales and cost of product sold (exclusive of depreciation and amortization) adjusted for FIFO impact.
Refining margin adjusted for FIFO impact is a non-GAAP measure that we believe is important to investors in evaluating
our refineries’ performance as a general indication of the amount above our cost of product sold (taking into account
the impact of our utilization of FIFO) at which we are able to sell refined products. Our calculation of refining margin
adjusted for FIFO impact may differ from calculations of other companies in our industry, thereby limiting its usefulness
as a comparative measure. Under our FIFO accounting method, changes in crude oil prices can cause fluctuations in
the inventory valuation of our crude oil, work in process and finished goods, thereby resulting in a favorable FIFO
impact when crude oil prices increase and an unfavorable FIFO impact when crude oil prices decrease.
Calculation of Refining Margin adjusted for FIFO impact(1)
Second Quarter Year to Date
($ in millions)
6/30/2016 6/30/2015 6/30/2016 6/30/2015
Net Sales $ 1,164.4 $ 1,547.5 $ 1,998.4 $ 2,852.0
Cost of product sold 941.9 1,180.9 1,664.2 2,237.1
Refining Margin 222.5 366.6 334.2 614.9
FIFO impact, favorable (46.2) (36.4) (37.4) (11.9)
Refining Margin adjusted for FIFO impact(1) $ 176.3 $ 330.2 $ 296.8 $ 603.0
Consolidated Non-GAAP Financial Measures
(1) Definition on slide 11
12
Financials Second Quarter Year to Date
($ in millions) 6/30/2016 6/30/2015 6/30/2016 6/30/2015
Net Income $ 78.1 $ 227.8 $ 10.1 $ 274.5
Interest expense and other financing costs, net of interest income 10.1 10.3 20.9 21.5
Depreciation and amortization 31.6 34.2 63.1 68.2
EBITDA(1) $ 119.8 $ 272.3 $ 94.1 $ 364.2
FIFO impact, favorable (46.2) (36.4) (37.4) (11.9)
Share-based compensation, non-cash — (0.1) — 0.1
Major scheduled turnaround expenses 2.1 1.7 31.5 1.7
Loss on derivatives, net 1.9 12.6 3.1 64.0
Current period settlements on derivative contracts(2) 7.1 (28.5) 28.5 (34.8)
Flood insurance recovery(3) — (27.3) — (27.3)
Adjusted EBITDA(1) $ 84.7 $ 194.3 $ 119.8 $ 356.0
(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 Coffeyville Resources Refining & Marketing, LLC's environmental insurance carriers as a result of the flood and crude oil discharge at the Coffeyville refinery
on June/July 2007.
13
Consolidated Non-GAAP Financial Measures
Financials
Second Quarter
($ in millions, except for per unit data)
6/30/2016
Adjusted EBITDA(1) $84.7
Less:
Cash needs for debt service (10.0)
Reserves for environmental and maintenance capital expenditures (40.0)
Reserves for major scheduled turnaround expenses (15.0)
Reserves for future operating needs (19.7)
Available cash for distribution(1) $—
Available cash for distribution, per unit $—
Common units outstanding (in thousands) 147,600
(1) Definition on slide 10
14
Consolidated Non-GAAP Financial Measures
Financials Full Year LTM
($ in millions) 2013 2014 2015 Q2 2016
n Cash $ 279.8 $ 370.2 $ 187.3 $ 159.3
n Total debt, including current portion(1) 582.7 581.4 580.0 579.2
n Net Debt 302.9 211.2 392.7 419.9
n Partners' capital 1,522.1 1,450.1 1,281.4 1,291.5
n Adjusted EBITDA(2)(3) $ 712.0 $ 621.6 $ 602.0 $ 365.8
(1) Amounts presented are gross debt not net of unamortized debt issuance costs
(2) Non-GAAP reconciliation on slide 16
(3) Definition on slide 10
15
Capital Structure
Financials Full Year LTM
($ in millions) 2013 2014 2015 Q2 2016
Net Income $ 590.4 $ 358.7 $ 291.2 $ 26.8
Interest expense and other financing costs, net of interest income 43.7 33.9 42.2 41.6
Depreciation and amortization 114.3 122.5 130.2 125.1
EBITDA(1) $ 748.4 $ 515.1 $ 463.6 $ 193.5
FIFO impact (favorable) unfavorable (21.3) 160.8 60.3 34.8
Share-based compensation, non-cash 9.5 2.3 0.6 0.5
Loss on extinguishment of debt 26.1 — — —
Major scheduled turnaround expenses — 6.8 102.2 132.0
(Gain) loss on derivatives, net (57.1) (185.6) 28.6 (32.3)
Current period settlements on derivative contracts(2) 6.4 122.2 (26.0) 37.3
Flood insurance recovery(3) — — (27.3) —
Adjusted EBITDA(1) $ 712.0 $ 621.6 $ 602.0 $ 365.8
(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.
(3) Represents an insurance recovery from Coffeyville Resources Refining & Marketing, LLC's environmental insurance carriers as a result of the flood and crude oil discharge at the Coffeyville refinery
on June/July 2007.
16
Consolidated Non-GAAP Financial Measures
Financials
($ in millions) 2013 2014 2015 2016 Estimate
Coffeyville refinery
Environmental and Maintenance $ 52.6 $ 74.8 $ 69.7 $ 65.0
Growth 3.6 5.5 73.2 45.0
Coffeyville refinery total capital $ 56.2 $ 80.3 $ 142.9 $ 110.0
Wynnewood refinery
Environmental and Maintenance $ 105.3 $ 58.5 $ 25.6 $ 36.0
Growth 24.9 38.9 6.4 4.0
Wynnewood refinery total capital $ 130.2 $ 97.4 $ 32.0 $ 40.0
Other Petroleum
Environmental and Maintenance $ 11.7 $ 7.0 $ 8.1 $ 7.0
Growth 6.4 6.6 11.7 3.0
Other petroleum total capital $ 18.1 $ 13.6 $ 19.8 $ 10.0
Total capital spending 204.5 191.3 194.7 160.0
17
Capital Spending