cvi-20200219
0001376139false00013761392020-02-192020-02-19



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
___________________________________

Date of Report (Date of earliest event reported): February 19, 2020

CVR ENERGY, INC.
(Exact name of registrant as specified in its charter)

Delaware001-3349261-1512186
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification Number)
2277 Plaza Drive, Suite 500
Sugar Land, Texas 77479
(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (281) 207-3200

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareCVIThe New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02. Results of Operations and Financial Condition.

On February 19, 2020, CVR Energy, Inc. (the “Company”) issued a press release announcing information regarding its results of operations and financial condition for the three months and year ended December 31, 2019, which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in Items 2.02 and 7.01 of this Current Report on Form 8-K (“Current Report”) and Exhibit 99.1 attached hereto is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, unless specifically identified therein as being incorporated by reference. The furnishing of information in this Current Report (including Exhibit 99.1) is not intended to, and does not, constitute a determination or admission by the Company that the information in this Current Report is material or complete, or that investors should consider this information before making an investment decision with respect to any securities of the Company or its affiliates.

Item 7.01. Regulation FD Disclosure.

The information set forth under Item 2.02 is incorporated by reference as if fully set forth herein.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

The following exhibit is being “furnished” as part of this Current Report on Form 8-K:

Exhibit
Number

Exhibit Description
99.1
104Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 19, 2020

CVR Energy, Inc.
By:/s/ Tracy D. Jackson
Tracy D. Jackson
Executive Vice President and
Chief Financial Officer

Document


Exhibit 99.1



CVR Energy Reports Fourth Quarter and Full-Year 2019 Results
and Announces Cash Dividend of 80 Cents

Achieved year-over-year environmental, health and safety improvements.
Completed Wynnewood’s BenFree repositioning project.
Received Board approval for Wynnewood’s Isomerization project.
Increased cash dividend to $3.20 per share annualized for an industry-leading dividend yield.

SUGAR LAND, Texas (Feb 19, 2020) CVR Energy, Inc. (NYSE: CVI) today announced fourth quarter 2019 net income of $44 million, or 44 cents per diluted share, on net sales of $1.6 billion, compared to net income of $73 million, or 73 cents per diluted share, on net sales of $1.7 billion for the fourth quarter of 2018. Fourth quarter 2019 EBITDA was $142 million, compared to fourth quarter 2018 EBITDA of $202 million.

For full-year 2019, the Company reported net income of $380 million, or $3.78 per diluted share, on net sales of $6.4 billion, compared to net income for full-year 2018 of $259 million, or $2.80 per diluted share, on net sales of $7.1 billion. Full-year 2019 EBITDA was $880 million, compared to $821 million for 2018.

“CVR Energy delivered solid 2019 full-year and fourth quarter results, led by continuous improvement in our core values of environmental, health and safety across both our petroleum and nitrogen fertilizer segments,” said Dave Lamp, CVR Energy’s Chief Executive Officer. “Our petroleum business again posted increased earnings year-over-year, driven by higher throughput rates, increased capture rates and higher refining margins despite lower crack spreads. In addition, we began our multi-year approach intended to improve crude oil optionality, market capture and reliability at our refineries.

“CVR Partners achieved year-over-year increases in net income and EBITDA and benefited from higher fertilizer sales volumes and stronger product pricing in 2019,” Lamp said. “As a result, CVR Partners distributed a total of 40 cents per unit during 2019 despite poor weather during the year, which impacted market conditions. Looking forward, we anticipate strong demand for spring nitrogen fertilizer application and currently expect 92 million to 95 million acres of corn to be planted this year.”

Petroleum

The Petroleum Segment reported fourth quarter 2019 operating income of $82 million, on net sales of $1.5 billion, compared to operating income of $122 million, on net sales of $1.6 billion in the fourth quarter of 2018.

Refining margin per total throughput barrel was $12.47 in the fourth quarter 2019, compared to $13.67 during the same period in 2018. Crude oil pricing during the quarter led to a favorable inventory valuation impact of $12 million, or 61 cents per total throughput barrel, compared to an unfavorable impact of $77 million, or $3.80 per total throughput barrel, in the fourth quarter of 2018. The Petroleum Segment also recognized a fourth quarter 2019 derivative loss of $19 million, or 99 cents per total throughput barrel, compared to a gain of $70 million, or $3.45 per total throughput barrel, for the fourth quarter of 2018. Included in the total derivative loss for the fourth quarter of 2019 was an unrealized loss of $24 million, compared to an unrealized gain of $37 million for the fourth quarter of 2018.

Fourth quarter 2019 combined total throughput was approximately 213,000 barrels per day (bpd), compared to approximately 221,000 bpd of combined total throughput for the fourth quarter 2018.

For full-year 2019, operating income was $574 million, on net sales of $6.0 billion, compared to operating income of $544 million, on net sales of $6.8 billion for the year ended 2018.

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The Petroleum Segment’s refining margin per total throughput barrel for 2019 was $15.26, compared to $15.18 for 2018. This year-over-year increase was driven in part by lower renewable identification number (RIN) expenses resulting from a reduction in market prices. In addition, operating income in the Petroleum segment was positively impacted by a $9 million gain on sale of the Cushing, Oklahoma, crude oil terminal. Combined total throughput increased to approximately 216,000 bpd, compared to approximately 213,000 bpd in the year ended 2018.

Nitrogen Fertilizer

The Nitrogen Fertilizer Segment reported an operating loss of $9 million on net sales of $86 million for the fourth quarter of 2019, compared to operating income of $8 million on net sales of $98 million for the fourth quarter of 2018.

Fourth quarter 2019 average realized gate prices for urea ammonia nitrate (UAN) decreased compared to the prior year, down 2 percent to $176 per ton, while ammonia was flat at $324 per ton. Average realized gate prices for UAN and ammonia were $180 per ton and $324 per ton, respectively, for the fourth quarter of 2018.

CVR Partners’ fertilizer facilities produced a combined 180,000 tons of ammonia during the fourth quarter of 2019, of which 55,000 net tons were available for sale while the rest was upgraded to other fertilizer products, including 286,000 tons of UAN. During the fourth quarter 2018, the fertilizer facilities produced 209,000 tons of ammonia, of which 59,000 net tons were available for sale while the remainder was upgraded to other fertilizer products, including 357,000 tons of UAN.

For full-year 2019, operating income was $27 million on net sales of $404 million, compared to operating income of $6 million on net sales of $351 million for the year ended 2018.

The average realized gate price for UAN increased 15 percent to $199 per ton, coupled with a 20 percent increase in ammonia to $392 per ton for full-year 2019. Average realized gate prices for UAN and ammonia were $173 per ton and $328 per ton, respectively, for the year ended 2018. In 2019, our fertilizer facilities produced a combined 766,000 tons of ammonia, of which 223,000 tons were available for sale, while the rest was upgraded to other fertilizer products, including 1,255,000 tons of UAN. For the year ended 2018, the fertilizer facilities produced 794,000 tons of ammonia, of which 246,000 net tons were available for sale while the remainder was upgraded to other fertilizer products, including 1,276,000 tons of UAN.

Cash, Debt and Dividend

Consolidated cash and cash equivalents was $652 million at Dec 31, 2019. Consolidated total debt was $1.2 billion at Dec 31, 2019, with no debt other than the Petroleum and Nitrogen Fertilizer segments’ debt.

CVR Energy announced a fourth quarter 2019 cash dividend of 80 cents per share. The dividend, as declared by CVR Energy’s Board of Directors, will be paid on Mar 9, 2020, to stockholders of record as of the close of market on Mar 2, 2020. CVR Energy’s fourth quarter cash dividend brings the cumulative cash dividends declared for the 2019 full year to $3.10 per share.

CVR Partners will not pay a cash distribution for the 2019 fourth quarter.

Fourth Quarter 2019 Earnings Conference Call

CVR Energy previously announced that it will host its fourth quarter and full-year 2019 Earnings Conference Call on Thursday, Feb 20, at 1 p.m. Eastern. This Earnings Conference Call may also include discussion of Company developments, forward-looking information and other material information about business and financial matters.

The fourth quarter and full-year 2019 Earnings Conference Call will be webcast live and can be accessed on the Investor Relations section of CVR Energy’s website at www.CVREnergy.com. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291. The webcast will be archived and available for 14 days at https://edge.media-server.com/mmc/p/9nek858g. A repeat of the call can be accessed for 14 days by dialing (877) 660-6853, conference ID 13698196.

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. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are “forward-looking statements,” as that term is defined under the
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federal securities laws. These forward-looking statements include, but are not limited to, statements regarding future: dividends and distributions including the timing, payment and amount (if any) thereof; improvement of crude oil optionality, market capture and reliability at our refineries; demand for spring nitrogen fertilizer application; planted corn acres; refinery throughput, direct operating expenses, capital expenditures, depreciation and amortization and turnaround expense; continued safe and reliable operations; ammonia utilization rates including impact of turnarounds; inventory adjustments; and other matters. 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. Investors are cautioned that various factors may affect these forward-looking statements, including (among others) price volatility of crude oil, other feedstocks and refined products; the ability of CVR Partners to make cash distributions; potential operating hazards; costs of compliance with existing, or compliance with new, laws and regulations and potential liabilities arising therefrom; impacts of planting season on CVR Partners; general economic and business conditions; and other risks. For additional discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings. These and other risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this news release are made only as of the date hereof. CVR Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.

About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and marketing business through its interest in CVR Refining and the nitrogen fertilizer manufacturing business through its interest in CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 34 percent of the common units of CVR Partners.

For further information, please contact:

Investor Contact:
Richard Roberts
CVR Energy, Inc.
(281) 207-3205
InvestorRelations@CVREnergy.com

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


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Non-GAAP Measures

Our management uses certain non-GAAP performance measures to evaluate current and past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These non-GAAP financial measures are important factors in assessing our operating results and profitability and include the performance and liquidity measures defined below.

Effective January 1, 2019, the Company revised its accounting policy method for the costs of planned major maintenance activities (turnarounds) specific to the Petroleum Segment from being expensed as incurred (the direct expensing method) to the deferral method. Refer to the 10-K for a further discussion of the impacts of this change in accounting policy. As a result of this change in accounting policy, the non-GAAP measures of Adjusted EBITDA, Petroleum Adjusted EBITDA, Nitrogen Fertilizer Adjusted EBITDA, Adjusted Net Income (Loss), and Direct Operating Expenses per Total Throughput Barrel net of Turnaround Expense are no longer being presented.

The following are non-GAAP measures that continue to be presented for the year ended December 31, 2019:

EBITDA - Consolidated net income (loss) before (i) interest expense, net, (ii) income tax expense (benefit) and (iii) depreciation and amortization expense.

Petroleum EBITDA and Nitrogen Fertilizer EBITDA - Segment net income (loss) before segment (i) interest expense, net, (ii) income tax expense (benefit), and (iii) depreciation and amortization.

Refining Margin - The difference between our Petroleum Segment net sales and cost of materials and other.

Refining Margin adjusted for Inventory Valuation Impacts - Refining Margin adjusted to exclude the impact of current period market price and volume fluctuations on crude oil and refined product inventories recognized in prior periods. We record our commodity inventories on the first-in-first-out basis. As a result, significant current period fluctuations in market prices and the volumes we hold in inventory can have favorable or unfavorable impacts on our refining margins as compared to similar metrics used by other publicly-traded companies in the refining industry.

Refining Margin and Refining Margin adjusted for Inventory Valuation Impacts, per Throughput Barrel - Refining Margin divided by the total throughput barrels during period, which is calculated as total throughput barrels per day times the number of days in the period.

Direct Operating Expenses per Throughput Barrel - Direct operating expenses for our Petroleum Segment divided by total throughput barrels for the period, which is calculated as total throughput barrels per day times the number of days in the period.

We present these measures because we believe they may help investors, analysts, lenders and ratings agencies analyze our results of operations and liquidity in conjunction with our U.S. GAAP results, including but not limited to our operating performance as compared to other publicly-traded companies in the refining industry, without regard to historical cost basis or financing methods and our ability to incur and service debt and fund capital expenditures. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. See “Non-GAAP Reconciliations” section included herein for reconciliation of these amounts. Due to rounding, numbers presented within this section may not add or equal to numbers or totals presented elsewhere within this document.

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Items or Events Impacting Comparability

Refer to the “Non-GAAP Measures” section above for discussion of the changes made to the Company’s definition of certain non-GAAP measures.

Petroleum Segment

Coffeyville Refinery - During the fourth quarter of 2019, our Coffeyville Refinery incurred costs of $15 million related to preparations for the planned turnaround scheduled to be completed in the spring of 2020. During the first quarter of 2018, our Coffeyville Refinery experienced an outage with its fluid catalytic cracking unit (“FCCU”) lasting 48 days. The FCCU outage had a significant negative impact on production and sales during that period.

Wynnewood Refinery - The second phase of our Wynnewood Refinery’s planned facility turnaround was completed in the first quarter of 2019 at a cost of $24 million.

Nitrogen Fertilizer Segment

During the fourth quarter of 2018, the Partnership recognized a $6 million business interruption insurance recovery associated with an outage at its Coffeyville Fertilizer Facility during 2017. The recovery is recorded in Other income, net.

Coffeyville Fertilizer Facility - During 2018, the Coffeyville Fertilizer Facility had a planned, full facility turnaround lasting 15 days and incurred approximately $6 million in turnaround expense in the second quarter of 2018.

East Dubuque Fertilizer Facility - During 2019, the East Dubuque Fertilizer Facility had a planned, full facility turnaround lasting 32 days and cost approximately $10 million in the third and fourth quarters of 2019.

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CVR Energy, Inc.
(unaudited)
Three Months Ended December 31, Year Ended
December 31,
(in millions, except per share amounts)2019 2018 2019 2018
Consolidated Statement of Operations Data
Net sales $1,569  $1,738  $6,364  $7,124  
Operating costs and expenses:   
Cost of materials and other1,262  1,388  4,851  5,683  
Direct operating expenses (exclusive of depreciation and amortization as reflected below)136  127  533  517  
Depreciation and amortization70  69  278  263  
Cost of sales 1,468  1,584  5,662  6,463  
Selling, general and administrative expenses (exclusive of depreciation and amortization as reflected below)30  28  117  112  
Depreciation and amortization   11  
Loss (gain) on asset disposal —  (4)  
Operating income69  124  580  532  
Other income (expense):
Interest expense, net(24) (22) (102) (102) 
Other income, net  13  15  
Income before income taxes47  109  491  445  
Income tax expense19  14  129  79  
Net income 28  95  362  366  
Less: Net (loss) income attributable to noncontrolling interest(16) 22  (18) 107  
Net income attributable to CVR Energy stockholders$44  $73  $380  $259  
Basic and diluted earnings per share$0.44  $0.73  $3.78  $2.80  
Dividends declared per share$0.80  $0.75  $3.05  $2.50  
EBITDA *$142  $202  $880  $821  
Weighted-average common shares outstanding - basic and diluted100.5  100.5  100.5  92.5  

*See “Non-GAAP Reconciliations” section below.

Selected Balance Sheet Data:
(in millions)December 31, 2019 December 31, 2018
Cash and cash equivalents
$652  $668  
Working capital
695  797  
Total assets
3,905  4,000  
Total debt and finance lease obligations
1,195  1,170  
Total liabilities
2,237  2,057  
Total CVR stockholders’ equity
1,393  1,286  


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Selected Cash Flow Data:
Three Months Ended December 31, Year Ended
December 31,
(in millions)2019 2018 2019 2018
Net cash flow provided by (used in):
Operating activities
$94  $102  $747  $628  
Investing activities
(48) (34) (121) (108) 
Financing activities
(86) (102) (642) (334) 
Net cash flow
$(40) $(34) $(16) $186  

Selected Segment Data:
(in millions)PetroleumNitrogen FertilizerConsolidated
Three Months Ended December 31, 2019
Net sales $1,485  $86  $1,569  
Operating income (loss)82  (9) 69  
Net income (loss)81  (25) 28  
EBITDA *135  11  142  
Capital Expenditures (1)
Maintenance$20  $ $28  
Growth   
Total capital expenditures$23  $ $33  
Year Ended December 31, 2019
Net sales$5,968  $404  $6,364  
Operating income574  27  580  
Net income (loss)559  (35) 362  
EBITDA *788  107  880  
Capital Expenditures (1)
Maintenance$79  $18  $102  
Growth10   12  
Total capital expenditures$89  $20  $114  

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(in millions)PetroleumNitrogen FertilizerConsolidated
Three Months Ended December 31, 2018
Net sales$1,641  $98  $1,738  
Operating income122   124  
Net income (loss)115  (1) 95  
EBITDA *172  33  202  
Capital Expenditures (1)
Maintenance$29  $ $34  
Growth —   
Total capital expenditures$35  $ $40  
Year Ended December 31, 2018
Net sales$6,780  $351  $7,124  
Operating income544   532  
Net income (loss)511  (50) 366  
EBITDA *748  84  821  
Capital Expenditures (1)
Maintenance$70  $16  $89  
Growth19   22  
Total capital expenditures$89  $19  $111  

*See “Non-GAAP Reconciliations” section below.
(1)Capital expenditures are shown exclusive of capitalized turnaround expenditures.

(in millions)PetroleumNitrogen FertilizerConsolidated
December 31, 2019
Cash and cash equivalents$583  $37  $652  
Total assets3,187  1,138  3,905  
Total debt and finance lease obligations563  632  1,195  
December 31, 2018
Cash and cash equivalents$353  $62  $668  
Total assets2,453  1,254  4,000  
Total debt and finance lease obligations541  629  1,170  

Petroleum Segment:

Key Operating Metrics per Total Throughput Barrel
Three Months Ended December 31, Year Ended
December 31,
(in millions)2019 2018 2019 2018
Refining Margin *$12.47  $13.67  $15.26  $15.18  
Refining Margin, excluding Inventory Valuation Impacts *11.86  17.47  14.71  15.60  
Direct Operating Expenses *4.63  4.41  4.56  4.62  

*See “Non-GAAP Reconciliations” section below.

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Throughput Data by Refinery
Three Months Ended December 31, Year Ended
December 31,
(in bpd)2019 2018 2019 2018
Coffeyville
Regional crude63,501  35,855  49,093  31,350  
WTI46,784  72,468  67,382  66,952  
WTL1,875  —  473  —  
Midland WTI709  18,506  3,888  15,893  
Condensate6,534  672  4,331  4,992  
Heavy Canadian3,264  7,629  4,711  5,302  
Other feedstocks and blendstocks10,798  12,033  9,160  8,369  
Wynnewood
Regional crude57,107  51,959  53,848  54,746  
WTI—  —   2,354  
WTL2,649  —  668  —  
Midland WTI6,808  7,776  10,995  10,332  
Condensate8,431  8,808  7,666  7,237  
Heavy Canadian—  —  —  —  
Other feedstocks and blendstocks4,269  5,775  3,753  5,068  
Total throughput212,729  221,481  215,971  212,595  

Production Data by Refinery
Three Months Ended December 31, Year Ended
December 31,
(in bpd)2019 2018 2019 2018
Coffeyville
Gasoline73,814  78,290  71,817  67,091  
Distillate53,222  60,080  57,549  56,307  
Other liquid products2,850  4,834  5,810  5,737  
Solids3,643  5,682  4,573  5,190  
Wynnewood
Gasoline39,429  39,033  38,864  40,291  
Distillate33,496  30,568  32,380  33,442  
Other liquid products3,697  2,992  3,223  4,025  
Solids27  27  30  41  
Total production210,178  221,506  214,246  212,124  
Liquid volume yield (as % of total throughput)97.1 %97.0 %97.1 %97.3 %


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Key Market Indicators
 Three Months Ended December 31, Year Ended
December 31,
(dollars per barrel)2019 2018 2019 2018
West Texas Intermediate (WTI) NYMEX
$56.87  $59.34  $57.04  $64.90  
Crude Oil Differentials to WTI:
Brent
5.55  9.26  7.12  6.79  
WCS (heavy sour)
(18.98) (33.86) (13.72) (26.35) 
Condensate
(0.10) (0.65) (0.76) (0.46) 
Midland Cushing
0.94  (5.96) (0.69) (7.20) 
NYMEX Crack Spreads:
Gasoline
12.14  9.81  15.43  15.69  
Heating Oil
24.82  27.74  24.43  23.15  
NYMEX 2-1-1 Crack Spread
18.48  18.78  19.93  19.42  
PADD II Group 3 Product Basis:
Gasoline
(1.27) (0.35) (1.74) (1.58) 
Ultra Low Sulfur Diesel
(2.41) (0.25) (1.68) 0.01  
PADD II Group 3 Product Crack Spread:
Gasoline
10.88  9.46  13.69  14.11  
Ultra Low Sulfur Diesel
22.41  27.49  22.75  23.16  
PADD II Group 3 2-1-1
16.65  18.48  18.22  18.63  

Q1 2020 Petroleum Segment Outlook

The table below summarizes our outlook for certain refining statistics and financial information for the first quarter of 2020. See “Forward-Looking Statements” above.
Q1 2020
LowHigh
Total throughput (bpd)
155,000  165,000  
Direct operating expenses (1) (in millions)$85  $95  
Total capital expenditures (in millions)
$45  $55  
Total turnaround expenditures (in millions)$115  $125  

(1)Direct operating expenses are shown exclusive of depreciation and amortization.

Nitrogen Fertilizer Segment

Ammonia Utilization Rates (2)
Two Years Ended December 31,
(percent of capacity utilization)2019 2018
Consolidated93 %95 %
Coffeyville94 %95 %
East Dubuque91 %95 %

(2)Reflects ammonia utilization rates on a consolidated basis and at each of the Nitrogen Fertilizer facilities. Utilization is an important measure used by management to assess operational output at each of the facilities. Utilization is calculated as actual tons produced divided by capacity. The Nitrogen Fertilizer Segment presents utilization on a two-year rolling average to take into account the impact of current turnaround cycles on any specific period. The two-year rolling average is a more useful presentation of the long-term utilization performance of our plants. Additionally, we present utilization solely on ammonia production rather than each nitrogen product as it provides a comparative baseline against industry peers and eliminates the disparity of plant configurations for upgrade of ammonia into
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other nitrogen products. With the Nitrogen Fertilizer Segments’ efforts being primarily focused on ammonia upgrade capabilities, this measure provides a meaningful view of how well the facilities operate.

Sales and Production Data
 Three Months Ended December 31, Year Ended
December 31,
 2019 2018 2019 2018
Consolidated sales (thousand tons):   
Ammonia62  46  241  202  
UAN293  364  1,261  1,289  
Consolidated product pricing at gate (dollars per ton) (1): 
Ammonia$324  $324  $392  $328  
UAN$176  $180  $199  $173  
Consolidated production volume (thousand tons): 
Ammonia (gross produced) (2)180  209  766  794  
Ammonia (net available for sale) (2)55  59  223  246  
UAN286  357  1,255  1,276  
  
Feedstock:
Petroleum coke used in production (thousand tons)131  139  535  463  
Petroleum coke used in production (dollars per ton)$39.90  $41.34  $37.47  $28.41  
Natural gas used in production (thousands of MMBtus) (3)1,646  2,000  6,856  7,933  
Natural gas used in production (dollars per MMBtu) (3)$2.87  $4.06  $2.88  $3.28  
Natural gas in cost of materials and other (thousands of MMBtus) (3)1,474  1,854  6,961  7,122  
Natural gas in cost of materials and other (dollars per MMBtu) (3)$2.58  $3.50  $3.08  $3.15  

(1)Product pricing at gate represents sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry.
(2)Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represent ammonia available for sale that was not upgraded into other fertilizer products.
(3)The feedstock natural gas shown above does not include natural gas used for fuel. The cost of fuel natural gas is included in direct operating expense.

Key Market Indicators
Three Months Ended December 31, Year Ended
December 31,
2019 2018 2019 2018
Ammonia — Southern plains (dollars per ton)$288  $423  $348  $370  
Ammonia — Corn belt (dollars per ton)385  479  435  424  
UAN — Corn belt (dollars per ton)189  255  210  219  
Natural gas NYMEX (dollars per MMBtu)$2.40  $3.75  $2.54  $3.08  


11


Q1 2020 Nitrogen Fertilizer Segment Outlook

The table below summarizes our outlook for certain operational statistics and financial information for the first quarter of 2020. See “Forward-Looking Statements” above.
Q1 2020
LowHigh
Ammonia utilization rates (1)
Consolidated95 %100 %
Coffeyville95 %100 %
East Dubuque95 %100 %
Direct operating expenses (2) (in millions)$35  $40  
Total capital expenditures (in millions)
$ $ 

(1)Ammonia utilization rates exclude the impact of Turnarounds.
(2)Direct operating expenses are shown exclusive of depreciation and amortization, turnaround expenses, and impacts of inventory adjustments.

Non-GAAP Reconciliations

Reconciliation of Consolidated Net Income to EBITDA
Three Months Ended December 31, Year Ended
December 31,
(in millions)2019 2018 2019 2018
Net income$28  $95  $362  $366  
Add:
Interest expense, net
24  22  102  102  
Income tax expense
19  14  129  79  
Depreciation and amortization
71  71  287  274  
EBITDA142  202  880  821  

Reconciliation of Petroleum Segment Net Income to EBITDA
Three Months Ended December 31, Year Ended
December 31,
(in millions)2019 2018 2019 2018
Net income (loss)$81  $115  $559  $511  
Add:
Interest expense, net  27  41  
Depreciation and amortization50  48  202  196  
Petroleum EBITDA135  172  788  748  

12


Reconciliation of Petroleum Segment Gross Profit to Refining Margin and Refining Margin Adjusted for Inventory Valuation Impact
Three Months Ended December 31, Year Ended
December 31,
(in millions)2019 2018 2019 2018
Net sales$1,485  $1,641  $5,968  $6,780  
Cost of materials and other1,241  1,362  4,765  5,602  
Direct operating expenses (exclusive of depreciation and amortization and turnaround expenses as reflected below)91  90  359  356  
Depreciation and amortization48  47  199  192  
Gross profit
105  142  645  630  
Add:
Direct operating expenses (exclusive of depreciation and amortization and turnaround expenses as reflected below)91  90  359  356  
Depreciation and amortization48  47  199  192  
Refining margin
244  279  1,203  1,178  
Inventory valuation impact, (favorable) unfavorable (1)(12) 77  (43) 33  
Refining margin, excluding inventory valuation impacts
$232  $356  $1,160  $1,211  

(1)The Petroleum Segment’s basis for determining inventory value under GAAP is First-In, First-Out (“FIFO”). Changes in crude oil prices can cause fluctuations in the inventory valuation of crude oil, work in process and finished goods, thereby resulting in a favorable inventory valuation impact when crude oil prices increase and an unfavorable inventory valuation impact when crude oil prices decrease. The inventory valuation impact is calculated based upon inventory values at the beginning of the accounting period and at the end of the accounting period. In order to derive the inventory valuation impact per total throughput barrel, we utilize the total dollar figures for the inventory valuation impact and divide by the number of total throughput barrels for the period.

Reconciliation of Petroleum Segment Total Throughput Barrels
Three Months Ended December 31, Year Ended
December 31,
2019 2018 2019 2018
Total throughput barrels per day212,729  221,481  215,971  212,595  
Days in the period92  92  365  365  
Total throughput barrels
19,571,068  20,376,252  78,829,441  77,597,175  

Reconciliation of Petroleum Segment Refining Margin per Total Throughput Barrel
Three Months Ended December 31, Year Ended
December 31,
(in millions, except per total throughput barrel)2019 2018 2019 2018
Refining margin$244  $279  $1,203  $1,178  
Divided by: total throughput barrels20  20  79  78  
Refining margin per total throughput barrel
$12.47  $13.67  $15.26  $15.18  

Reconciliation of Petroleum Segment Refining Margin Adjusted for Inventory Valuation Impact per Total Throughput Barrel
Three Months Ended December 31, Year Ended
December 31,
(in millions, except per total throughput barrel)2019 2018 2019 2018
Refining margin, excluding inventory valuation impacts$232  $356  $1,160  $1,211  
Divided by: total throughput barrels20  20  79  78  
Refining margin, excluding inventory valuation impacts, per total throughput barrel$11.86  $17.47  $14.71  $15.60  

13


Reconciliation of Petroleum Segment Direct Operating Expenses per Total Throughput Barrel
Three Months Ended December 31, Year Ended
December 31,
(in millions, except per total throughput barrel)2019 2018 2019 2018
Direct operating expenses (exclusive of depreciation and amortization)$91  $90  $359  $356  
Divided by: total throughput barrels20  20  79  78  
Direct operating expense per total throughput barrel$4.63  $4.41  $4.56  $4.62  

Reconciliation of Nitrogen Fertilizer Segment Net Loss to EBITDA
Three Months Ended December 31, Year Ended
December 31,
(in millions)2019 2018 2019 2018
Nitrogen fertilizer net loss$(25) $(1) $(35) $(50) 
Add:  
Interest expense, net16  15  62  62  
Depreciation and amortization20  19  80  72  
Nitrogen fertilizer EBITDA
$11  $33  $107  $84  



14
v3.19.3.a.u2
Cover
Feb. 19, 2020
Cover page.  
Document Type 8-K
Document Period End Date Feb. 19, 2020
Entity Registrant Name CVR ENERGY, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-33492
Entity Tax Identification Number 61-1512186
Entity Address, Address Line One 2277 Plaza Drive, Suite 500
Entity Address, City or Town Sugar Land
Entity Address, State or Province TX
Entity Address, Postal Zip Code 77479
City Area Code 281
Local Phone Number 207-3200
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 par value per share
Trading Symbol CVI
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001376139
Amendment Flag false