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| 8-K - 8-K - CVR Refining, LP | cvrr8-kq42016earningsprese.htm |
4th Quarter 2016 Earnings Report
February 16, 2017
This presentation should be reviewed in conjunction with CVR Refining, LP’s Fourth Quarter earnings
conference call held on February 16, 2017. The following information contains forward-looking
statements based on management’s current expectations and beliefs, as well as a number of assumptions
concerning future events. These statements are subject to risks, uncertainties, assumptions and other
important factors. You are cautioned not to put undue reliance on such forward-looking statements
(including forecasts and projections regarding our future performance) because actual results may vary
materially from those expressed or implied as a result of various factors, including, but not limited to
those set forth under “Risk Factors” in CVR Refining, LP’s Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and any other filings CVR Refining, LP makes with the Securities and Exchange
Commission. CVR Refining, LP assumes no obligation to, and expressly disclaims any obligation to,
update or revise any forward-looking statements, whether as a result of new information, future events
or otherwise, except to the extent required by law.
All information in this earnings report is unaudited other than the consolidated statement of operations
data for the year ended December 31, 2015 and the balance sheet data as of December 31, 2013 through
2015.
Forward Looking Statements
2
Consolidated Financial Results Fourth Quarter Year to Date
(In millions, except for throughput and market data)
12/31/2016 12/31/2015 12/31/2016 12/31/2015
Net Income (Loss) $ (10.7) $ (122.2) $ 15.3 $ 291.2
Gross Profit (Loss) $ 34.6 $ (114.7) $ 152.4 $ 439.1
Refining Margin(1)(2)(3) $ 139.5 $ 132.1 $ 620.0 $ 1,078.6
Operating Income (Loss) $ 15.3 $ (135.5) $ 77.8 $ 361.7
Adjusted EBITDA(4)(5) $ 27.7 $ 16.4 $ 222.8 $ 602.0
NYMEX 2-1-1 Crack Spread $ 14.70 $ 14.00 $ 14.66 $ 20.41
PADD II Group 3 2-1-1 Crack Spread $ 11.60 $ 13.91 $ 12.39 $ 18.34
Refining margin (per crude oil throughput barrel)(1)(2)(6) $ 7.32 $ 8.96 $ 8.55 $ 15.31
Direct Operating Expenses excluding Major Scheduled
Turnaround Expenses (per crude oil throughput barrel)(7) $ 4.96 $ 7.04 $ 4.99 $ 5.34
Consolidated Selected Financials and Key Performance Indicators
Balance Sheet and Cash Flow Data Fourth
Quarter(In millions, except per unit data)
12/31/2016
Cash and Cash Equivalents $ 314.1
Total Debt, including current portion(8) $ 546.9
Partners' Capital $ 1,296.7
Cash Flow from Operations $ 81.4
Available Cash for Distribution $ —
Available Cash for Distribution, per unit(9) $ —
(1) Adjusted for FIFO impact
(2) Definition on slide 11
(3) Non-GAAP reconciliation on slide 12
3
(4) Non-GAAP reconciliation on slide 16
(5) Definition on slide 10
(6) Non-GAAP reconciliation on slide 15
(7) Reconciliation on slide 6
(8) Amounts presented are gross debt not net of unamortized debt issuance costs
(9) Non-GAAP reconciliation on slide 17
Q4 2016 Q4 2015 YTD 2016 YTD 2015
146.9
81.5
137.0 123.3
(1) Adjusted for FIFO impact
(2) Definition on slide 11
(3) Non-GAAP reconciliation on slide 15
(4) Non-GAAP reconciliation on slide 6
Q4 2016 Q4 2015 YTD 2016 YTD 2015
$7.29 $6.97 $8.74
$15.29
Q4 2016 Q4 2015 YTD 2016 YTD 2015
$4.27
$7.53
$4.32 $5.06
Coffeyville Refinery
4
Refinery Crude Throughput
(mbpd)
Direct Operating Expenses Excluding Major Scheduled
Turnaround Expenses(4)
(per crude throughput barrel)
Refining Margin(1)(2)(3)
(per crude throughput barrel)
Barrels Sold
(mbpd)
Q4 2016 Q4 2015 YTD 2016 YTD 2015
132.4
77.2
124.2 113.3
Q4 2016 Q4 2015 YTD 2016 YTD 2015
75.1
82.9
73.9
79.8
Q4 2016 Q4 2015 YTD 2016 YTD 2015
75.0
84.7
74.6
81.4
Refinery Crude Throughput
(mbpd)
(1) Adjusted for FIFO impact
(2) Definition on slide 11
(3) Non-GAAP reconciliation on slide 15
(4) Non-GAAP reconciliation on slide 6
Q4 2016 Q4 2015 YTD 2016 YTD 2015
$7.19
$10.74
$8.07
$15.21
Refining Margin(1)(2)(3)
(per crude throughput barrel)
Q4 2016 Q4 2015 YTD 2016 YTD 2015
$6.19
$6.44
$6.12
$5.71
Wynnewood Refinery
5
Direct Operating Expenses Excluding Major Scheduled
Turnaround Expenses(4)
(per crude throughput barrel)
Barrels Sold
(mbpd)
Consolidated Fourth Quarter Year to Date
($ in millions) 12/31/2016 12/31/2015 12/31/2016 12/31/2015
Direct operating expenses and major scheduled turnaround expenses $ 94.7 $ 188.7 $ 393.4 $ 478.5
Less: major scheduled turnaround expenses — 84.9 31.5 102.2
Direct Operating Expenses excluding major scheduled turnaround
expenses $ 94.7 $ 103.8 $ 361.9 $ 376.3
Direct Operating Expenses excluding major scheduled turnaround
expenses per barrel of crude throughput $ 4.96 $ 7.04 $ 4.99 $ 5.34
Coffeyville
Direct operating expenses and major scheduled turnaround expenses $ 52.0 $ 138.4 $ 227.9 $ 311.3
Less: major scheduled turnaround expenses — 84.9 31.5 102.2
Direct Operating Expenses excluding major scheduled turnaround
expenses $ 52.0 $ 53.5 $ 196.4 $ 209.1
Direct Operating Expenses excluding major scheduled turnaround
expenses per barrel of crude throughput $ 4.27 $ 7.53 $ 4.32 $ 5.06
Wynnewood
Direct operating expenses and major scheduled turnaround expenses $ 42.7 $ 49.2 $ 165.5 $ 166.2
Less: major scheduled turnaround expenses — — — —
Direct Operating Expenses excluding major scheduled turnaround
expenses $ 42.7 $ 49.2 $ 165.5 $ 166.2
Direct Operating Expenses excluding major scheduled turnaround
expenses per barrel of crude throughput $ 6.19 $ 6.44 $ 6.12 $ 5.71
6
Direct Operating Expenses
$450
$400
$350
$300
$250
$200
$150
2013 2014 2015 2016
$302.9
$211.2
$392.7
$232.8
Note: Refer to slide 18 for metrics used in calculations
Debt Metrics
7
Financial Metrics 2013 2014 2015 2016
w Debt to Capital 28% 29% 31% 30%
w Debt to Adj. EBITDA 0.8 0.9 1.0 2.5
w Net Debt to Adjusted EBITDA 0.4 0.3 0.7 1.0
Net Debt
($ in millions)
Coffeyville
($ in millions)
Note: Refer to slide 20 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 2017 E
$160
$140
$120
$100
$80
$60
$40
$20
$0
2013 2014 2015 2016 2017 E
Consolidated Capital Spending Summary
2013 2014 2015 2016 2017 Estimate
Environmental & Maintenance $169.6 $140.3 $103.4 $63.6 $137.0
Growth 34.9 51.0 91.3 38.7 20.0
Total Capital Spending $204.5 $191.3 $194.7 $102.3 $157.0
n Environmental & Maintenance n Growth
Appendix
Non-GAAP Financial Measures
10
To supplement the actual results in accordance with GAAP for the applicable periods, the Partnership also uses
non-GAAP financial measures as discussed below, which are reconciled to GAAP-based results. These non-GAAP
financial measures should not be considered an alternative for GAAP results. The adjustments are provided to
enhance an overall understanding of the Partnership’s financial performance for the applicable periods and are
indicators management believes are relevant and useful for planning and forecasting future periods.
EBITDA and Adjusted EBITDA. EBITDA represents net income (loss) before (i) interest expense and other financing
costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA
represents EBITDA adjusted for (i) FIFO impact (favorable) unfavorable;(ii) share-based compensation, non-cash;
(iii) loss on extinguishment of debt; (iv) major scheduled turnaround expenses (that many of our competitors capitalize
and thereby exclude from their measure of EBITDA and adjusted EBITDA); (v) (gain) loss on derivatives, net; (vi)
current period settlements on derivative contracts and (vii) 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 (loss) or cash flow from operations.
Management believes that EBITDA and Adjusted EBITDA enable investors to better understand our ability to make
distributions to our common unitholders, help investors evaluate our ongoing operating results and allow for greater
transparency in reviewing our overall financial, operational and economic performance. EBITDA and Adjusted
EBITDA presented by other companies may not be comparable to our presentation, since each company may define
these terms differently.
Available cash for distribution is not a recognized term under GAAP. Available cash should not be considered in
isolation or as an alternative to net income (loss) or operating income (loss) as a measure of operating performance.
In addition, available cash for distribution is not presented as, and should not be considered, an alternative to cash
flows from operations or as a measure of liquidity. Available cash as reported by the Partnership may not be comparable
to similarly titled measures of other entities, thereby limiting its usefulness as a comparative measure.
Non-GAAP Financial Measures (cont'd)
11
Refining margin per crude oil throughput barrel is a measurement calculated as the difference between net sales and
cost of 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.
Calculation of Consolidated Refining Margin
adjusted for FIFO impact(1) Fourth Quarter Year to Date
($ in millions) 12/31/2016 12/31/2015 12/31/2016 12/31/2015
Net Sales $ 1,269.4 $ 948.3 $ 4,431.3 $ 5,161.9
Cost of materials and other 1,107.5 842.8 3,759.2 4,143.6
Direct operating expenses (exclusive of depreciation and
amortization as reflected below) 94.7 103.8 361.9 376.3
Major scheduled turnaround expenses — 84.9 31.5 102.2
Flood insurance recovery — — — (27.3)
Depreciation and amortization 32.6 31.5 126.3 128.0
Gross Profit (Loss) $ 34.6 $ (114.7) $ 152.4 $ 439.1
Add:
Direct operating expenses (exclusive of depreciation and
amortization as reflected below) 94.7 103.8 361.9 376.3
Major scheduled turnaround expenses — 84.9 31.5 102.2
Flood insurance recovery — — — (27.3)
Depreciation and amortization 32.6 31.5 126.3 128.0
Refining Margin(1) $ 161.9 $ 105.5 $ 672.1 $ 1,018.3
FIFO impact, (favorable) unfavorable (22.4) 26.6 (52.1) 60.3
Refining Margin adjusted for FIFO impact(1) $ 139.5 $ 132.1 $ 620.0 $ 1,078.6
Consolidated Non-GAAP Financial Measures
(1) Definition on slide 11
12
Calculation of Coffeyville Refinery Refining
Margin adjusted for FIFO impact(1) Fourth Quarter Year to Date
($ in millions) 12/31/2016 12/31/2015 12/31/2016 12/31/2015
Net Sales $ 854.7 $ 522.6 $ 2,948.9 $ 3,220.6
Cost of materials and other 750.6 490.5 2,513.9 2,626.1
Direct operating expenses (exclusive of depreciation and
amortization as reflected below) 52.0 53.5 196.4 209.1
Major scheduled turnaround expenses — 84.9 31.5 102.2
Flood insurance recovery — — — (27.3)
Depreciation and amortization 18.4 17.5 69.7 72.1
Gross Profit (Loss) $ 33.7 $ (123.8) $ 137.4 $ 238.4
Add:
Direct operating expenses (exclusive of depreciation and
amortization as reflected below) 52.0 53.5 196.4 209.1
Major scheduled turnaround expenses — 84.9 31.5 102.2
Flood insurance recovery — — — (27.3)
Depreciation and amortization 18.4 17.5 69.7 72.1
Refining Margin(1) $ 104.1 $ 32.1 $ 435.0 $ 594.5
FIFO impact, (favorable) unfavorable (15.4) 17.4 (37.8) 38.0
Refining Margin adjusted for FIFO impact(1) $ 88.7 $ 49.5 $ 397.2 $ 632.5
Coffeyville Non-GAAP Financial Measures
(1) Definition on slide 11
13
Calculation of Wynnewood Refinery Refining
Margin adjusted for FIFO impact(1) Fourth Quarter Year to Date
($ in millions) 12/31/2016 12/31/2015 12/31/2016 12/31/2015
Net Sales $ 413.6 $ 424.6 $ 1,478.0 $ 1,936.9
Cost of materials and other 356.9 351.8 1,245.4 1,516.3
Direct operating expenses (exclusive of depreciation and
amortization as reflected below) 42.7 49.2 165.5 166.2
Major scheduled turnaround expenses — — — —
Flood insurance recovery — — — —
Depreciation and amortization 12.8 12.6 50.7 50.2
Gross Profit $ 1.2 $ 11.0 $ 16.4 $ 204.2
Add:
Direct operating expenses (exclusive of depreciation and
amortization as reflected below) 42.7 49.2 165.5 166.2
Major scheduled turnaround expenses — — — —
Flood insurance recovery — — — —
Depreciation and amortization 12.8 12.6 50.7 50.2
Refining Margin(1) $ 56.7 $ 72.8 $ 232.6 $ 420.6
FIFO impact, (favorable) unfavorable (7.0) 9.2 (14.2) 22.3
Refining Margin adjusted for FIFO impact(1) $ 49.7 $ 82.0 $ 218.4 $ 442.9
Wynnewood Non-GAAP Financial Measures
(1) Definition on slide 11
14
Calculation of Consolidated Refining Margin adjusted for FIFO
impact per crude oil throughput barrel Fourth Quarter Year to Date
($ in millions except per barrel and throughput data) 12/31/2016 12/31/2015 12/31/2016 12/31/2015
Total crude oil throughput barrels per day 207,422 160,139 198,042 193,077
Days in the period 92 92 366 365
Total crude oil throughput barrels 19,082,824 14,732,788 72,483,372 70,473,105
Refining Margin adjusted for FIFO impact(1)(2) $ 139.5 $ 132.1 $ 620.0 $ 1,078.6
Divided by: crude oil throughput barrels 19.1 14.7 72.5 70.5
Refining Margin adjusted for FIFO impact per crude oil throughput barrel(1) $ 7.32 $ 8.96 $ 8.55 $ 15.31
Coffeyville
Total crude oil throughput barrels per day 132,351 77,224 124,169 113,305
Days in the period 92 92 366 365
Total crude oil throughput barrels 12,176,292 7,104,608 45,445,854 41,356,325
Refining Margin adjusted for FIFO impact(1)(3) $ 88.7 $ 49.5 $ 397.2 $ 632.5
Divided by: crude oil throughput barrels 12.2 7.1 45.4 41.4
Refining Margin adjusted for FIFO impact per crude oil throughput barrel(1) $ 7.29 $ 6.97 $ 8.74 $ 15.29
Wynnewood
Total crude oil throughput barrels per day 75,071 82,915 73,873 79,772
Days in the period 92 92 366 365
Total crude oil throughput barrels 6,906,532 7,628,180 27,037,518 29,116,780
Refining Margin adjusted for FIFO impact(1)(4) $ 49.7 $ 82.0 $ 218.4 $ 442.9
Divided by: crude oil throughput barrels 6.9 7.6 27.0 29.1
Refining Margin adjusted for FIFO impact per crude oil throughput barrel(1) $ 7.19 $ 10.74 $ 8.07 $ 15.21
15
Non-GAAP Financial Measures
(1) Definition on slide 11
(2) Non-GAAP reconciliation on slide 12
(3) Non-GAAP reconciliation on slide 13
(4) Non-GAAP reconciliation on slide 14
Financials Fourth Quarter Year to Date
($ in millions) 12/31/2016 12/31/2015 12/31/2016 12/31/2015
Net income (loss) $ (10.7) $ (122.2) $ 15.3 $ 291.2
Interest expense and other financing costs, net of interest income 11.6 10.4 43.3 42.2
Depreciation and amortization 33.4 32.1 129.0 130.2
EBITDA(1) $ 34.3 $ (79.7) $ 187.6 $ 463.6
FIFO impact, (favorable) unfavorable (22.4) 26.6 (52.1) 60.3
Share-based compensation, non-cash — 0.1 — 0.6
Major scheduled turnaround expenses — 84.9 31.5 102.2
(Gain) loss on derivatives, net 14.6 (23.6) 19.4 28.6
Current period settlements on derivative contracts(2) 1.2 8.1 36.4 (26.0)
Flood insurance recovery(3) — — — (27.3)
Adjusted EBITDA(1) $ 27.7 $ 16.4 $ 222.8 $ 602.0
(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 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
Fourth Quarter
($ in millions, except for per unit data)
12/31/2016
Adjusted EBITDA(1) $27.7
Less:
Cash needs for debt service (10.0)
Reserves for environmental and maintenance capital expenditures (17.7)
Reserves for major scheduled turnaround expenses —
Available cash for distribution(1) $—
Available cash for distribution, per unit $—
Distribution declared, per unit $—
Common units outstanding (in millions) 147.6
(1) Definition on slide 10
17
Consolidated Non-GAAP Financial Measures
Financials Full Year
($ in millions) 2013 2014 2015 2016
n Cash $ 279.8 $ 370.2 $ 187.3 $ 314.1
n Total debt, including current portion(1) 582.7 581.4 580.0 546.9
n Net Debt 302.9 211.2 392.7 232.8
n Partners' capital 1,522.1 1,450.1 1,281.4 1,296.7
n Adjusted EBITDA(2)(3) $ 712.0 $ 621.6 $ 602.0 $ 222.8
(1) Amounts presented are gross debt not net of unamortized debt issuance costs
(2) Non-GAAP reconciliation on slide 19
(3) Definition on slide 10
18
Capital Structure
Financials Full Year
($ in millions) 2013 2014 2015 2016
Net Income $ 590.4 $ 358.7 $ 291.2 $ 15.3
Interest expense and other financing costs, net of interest income 43.7 33.9 42.2 43.3
Depreciation and amortization 114.3 122.5 130.2 129.0
EBITDA(1) $ 748.4 $ 515.1 $ 463.6 $ 187.6
FIFO impact, (favorable) unfavorable (21.3) 160.8 60.3 (52.1)
Share-based compensation, non-cash 9.5 2.3 0.6 —
Loss on extinguishment of debt 26.1 — — —
Major scheduled turnaround expenses — 6.8 102.2 31.5
(Gain) loss on derivatives, net (57.1) (185.6) 28.6 19.4
Current period settlements on derivative contracts(2) 6.4 122.2 (26.0) 36.4
Flood insurance recovery(3) — — (27.3) —
Adjusted EBITDA(1) $ 712.0 $ 621.6 $ 602.0 $ 222.8
(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 environmental insurance carriers as a result of the flood and crude oil discharge at the Coffeyville refinery on June/July 2007.
19
Consolidated Non-GAAP Financial Measures
Financials
($ in millions) 2013 2014 2015 2016
2017
Estimate
Coffeyville refinery
Environmental and Maintenance $ 52.6 $ 74.8 $ 69.7 $ 39.1 $ 58.0
Growth 3.6 5.5 73.2 37.2 15.0
Coffeyville refinery total capital $ 56.2 $ 80.3 $ 142.9 $ 76.3 $ 73.0
Wynnewood refinery
Environmental and Maintenance $ 105.3 $ 58.5 $ 25.6 $ 20.6 $ 63.0
Growth 24.9 38.9 6.4 0.5 5.0
Wynnewood refinery total capital $ 130.2 $ 97.4 $ 32.0 $ 21.1 $ 68.0
Other Petroleum
Environmental and Maintenance $ 11.7 $ 7.0 $ 8.1 $ 3.9 $ 16.0
Growth 6.4 6.6 11.7 1.0 —
Other petroleum total capital $ 18.1 $ 13.6 $ 19.8 $ 4.9 $ 16.0
Total capital spending $ 204.5 $ 191.3 $ 194.7 $ 102.3 $ 157.0
20
Capital Spending