CVI - Earnings call transcript Q3 2021

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Operator

Greetings. Welcome to CVR Energy, Inc.

Third Quarter 2021 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. this being note Please Instructions] conference recorded. is [Operator conference Richard Relations. Roberts, would now of to the turn Investor I Director over FP&A and Thank you.

You may begin.

Richard Roberts

you Chief XXXX earnings Good may very With me for Kerry. everyone. Dave call. Dane CVR joining Lamp, Neumann, are quarter that Officer; appreciate our Prior our quarter you, that afternoon defined Officer; to XXXX us call third third management. this as Thank other you discussing remind Energy of today this results, Executive afternoon, forward-looking members and much me term We Chief our under Financial laws. let statements, federal contain conference our is securities

to this this that facts, statements are be any not deemed historical forward-looking made For statements. purpose, during call of be statements may

by release. that Commission statements set the are factors be filings earnings affected Exchange Securities in and You latest may forth our important our with in these and cautioned

actual discussed new any the materially whether by operations events publicly required differ update a or forward-looking may forward-looking As except otherwise, or no future to law. extent undertake of result the a We as in result, obligation results results information, statements, the to from statements.

period discussed call. and said, Form turn remind XXXX over such split related reconciliation with SEC unit on we you quarter also for the disclosures various that GAAP Partners Let that me measures, the split-adjusted earnings This filed this a Dave. including common basis. The financial made X-for-XX are included November non-GAAP financial measures. to reverse call measures, call includes the CVR third also With on and in a of during our XX, most completed to references to XXXX. I'll that comparable be directly financial the call per the units its non-GAAP Any are will XX-Q on release

David Lamp

everyone, and for Good thank joining Richard. call. earnings Thank you you, afternoon, our

exciting make about developments. wanted few into Before a I some I our results, comments to get

we to important be certainly that for necessary years are fossil While of an believe part future. recognized many we fuels come, the fuels will renewable

began at those this transportation have are two the capacity hydrogen this We the we $XXX since given uniquely Farm intend on years believe and to refineries we reason, renewable For production positioned in exploring we and of logistical for excess nearly ago, million and initiatives. invested revolution. green to be diesel utilizing nearly forefront our connection Belt, our

and Yesterday, of million. of later at more recent the quarter We the have made EBITDA since $XX are the I'll cost net on with of earnings progress was quarter our details call an in our estimated $XXX of million. approval several call. Wynnewood $X.XX. the provide per at pre-treater and million share consolidated we Board’s income for reported $XXX third efforts fronts last accelerating feed

facilities Our strength once posting the ran refined EBITDA prices for fertilizer during increases products in continued quarter and both nitrogen year-over-year. segments again, and well in led

the in prices refineries despite weak $X.XX to through in RIN the in Cushing. prior due Benchmark continued to of increased crude at ran XXX% to quarter quarter quarter Coffeyville third processed. per The third as the during to product XXXX, refinery quarter quarter compared For barrel day crack our barrels third the in which $X.XX $X.XX the $XX.XX averaged barrels oil day XXXX was Brent-TI of XXX% the on averaged was XXX,XXX third from the compared The in the the an throughput was approximately the yield in increase approximately quarter for to RIN total by WCS power RVO third prices. outages. Both process well Petroleum per WCS XXX,XXX differential three of Group and barrel of cracks third per Light the as our barrel on period. combined XXXX weather-related XXXX. impacted some quarter Based per XXXX. third we compared X-X-X for quarter the levels, segment, prices quarter $X.XX averaged quarter, in of the per elevated

optimize maximizing XXX,XXX to products, of via production we last ensure to and barrels capture RINs per higher approximately same day In margin of operations distillate refinery continue year. per in compared quarter XXXX of and period generation. the during gathered XXX,XXX maximum LPG We oil crude the total, day recovery to third barrels

limited our to overall decline rates continued in our gathering stayed production drilling across see We to although, have rates the across ahead system some of Basin. declines due activity Anadarko

demand months, have and expected. few plants but Some positive of rigs prices drilling remains utilization Fertilizer In to in to both ammonia breaking and in consolidated fertilizer increase Kansas been Oklahoma The through Fertilizer than earlier the the quarter ran segment. this that has XX%. prices to during seasonal year segment, and with continued rise the third the well for rally the inputs, summer. over activity past patterns slower crop the for strong with were began added would continued outlook normal we With low both inventories quarter continued our fertilizer the

to Now financial our turn highlights. some call let the me over discuss to Dane of

Dane Neumann

Dave, everyone. good afternoon, and you, Thank

For the was income consolidated of third million, quarter million. earnings per EBITDA was net $XXX share XXXX, $X.XX $XXX was our and

of million $XXX estimated mark-to-market valuation unrealized and RIN gains of our Our million, million. inventory third positive outstanding quarter $XX results impact of obligation impacts $X favorable included on a derivative

As excludes exemptions. a is estimated any reminder, based or of XXXX obligation waivers our the RVO and impact on outstanding levels the RIN

compared adjusted was XXXX. Excluding $XX driven third our EBITDA year-over-year quarter realized offset margin prices Petroleum the the to cracks derivative the quarter barrel. throughput of elevated by $XX In adjusted third adjusted adjusted $XX.XX the of for items, segment’s The for increased was by The product EBITDA volumes RIN was million. of EBITDA for EBITDA and above quarter third mentioned in breakeven Petroleum higher million refining was quarter and reported increase the segments losses. per XXXX XXXX,

for expense compared a impacts outstanding derivative third unrealized total compared $X.XX million the XXXX XXXX. of capture a mark-to-market per of capture RINs of our mark-to-market RIN In XX% XX% refining margin to in or gains of the the barrel, our benefit On $X.XX of rate expense barrel of per for expense barrel have would in compared million obligation reduced approximately same to per barrel. third prior $XX per the of period. or $X.XX of reduction the barrel, third quarter excluding by quarter Excluding rate last year. $X.XX throughput RINs per barrel in estimated $X.XX total, $X.XX was third period $XX was quarter of to XX% XXXX favorable and been of this approximately XX% quarter the our per inventory impacts basis, impact

average price quarter impact by compared RINs of end on third was second at $X.XX quarter estimated which mark-to-market the from $X.XX RIN Our quarter. RFS million expense $XXX at end the reduced the was our to at an of mark-to-market obligation,

RINs million was to compared $XX $XX the excluding expense, quarter impacts year million prior mark-to-market in period. Third

for RFS of the believe as RFS estimated obligation exempt nine obligation Our XXXX, end the we of under months Wynnewood’s continue be the XXXX at regulation. approximates to through the quarter first obligations third Wynnewood’s should

waivers based derivative of the an XXX totaled not million, we unrealized derivatives. the levels For we $X of does losses or of of quarter associated had the third any exemptions. which included RINs, XXXX of third total million of on unrealized million. includes gains full-year RVO the XXXX include Derivative which for XXXX, which XXXX, gains approximately gains impact obligation forecast $XX $XX primarily quarter million with million, $X In of crack spread of

the as direct crack segments derivative operating expenses September our higher the per in of expenses in positions. to The compared per stock-based $X.XX combination compensation XX, gas to we year Petroleum of direct the increase in share outstanding of XXXX barrel primarily The price. As and period. spread have a barrel prior increase by $X.XX was costs in natural closed quarter higher of operating all were driven third

million, primarily Fertilizer $XX EBITDA the distribution $XX $XX million third on quarter segment and income of third the per losses $X.XX were net period. $XX common compared the For XXXX for per operating XXXX. loss third is $X.XX unit ammonia million. $XX of sales no quarter of unit to and of was This income a and EBITDA prices. net quarter of to common unit adjustments or year-over-year of million operating of and or partnership of by UAN million reported per The million. $X $X.XX EBITDA common driven The There either increase declared in of EBITDA XXXX, higher

and million, the we was $X estimate third and which, approximately Petroleum As $XX capital. capital in XXXX approximately quarter units, $XX $XX distribution environmental CVR for the is capital Fertilizer XXXX Energy Partners Total including maintenance and to expected million owns $XX approximately in the Fertilizer maintenance million the segment from XX% will for of the million, CVR of segment. cash of comprised receive proportionate which renewable total $XX spending X capital unit. on to from $XX segment, million Environmental segment $XX million be Petroleum included million million, million million $XXX $XX and the to million. diesel spending common consolidated to $XXX spending a be of approximately We million

preparation in XXXX. XXXX was consolidated million of million be was year by Our flow free $XXX at approximately the in plan the planned will quarter cash Wynnewood in for capital for spending million. third $X and which for provided spending, excludes turnaround we planned operations the Cash $XX estimate turnarounds XXXX Coffeyville and

$XX of interest, which was CVR of portion material a quarter notes During offset senior uses XXXX NOL million CVR tax the to of $XX second in $XX $XX non-controlling provisions cash partial Partners cash carryback we Partners the the the the million included CARES taxes the the partially of million, income receipt related refund Act. and quarter, Other of for million paid by million quarter distribution. redemption $XX for interest for the

$XXX to At quarter cash. September we the approximately with ended Turning of million XX, sheet. balance the

Our $XXX segment. cash the Fertilizer consolidated million includes balance in

under the included $XXX CVR approximately excluding $XXX we was had XX, million approximately million the Partners, September borrowing of of $XXX of cash base of primarily availability cash million. which of approximately As liquidity, million comprised of in and less ABL $XXX

total day. segment, of be the approximately Looking barrels fourth ahead throughput XXX,XXX to quarter we for to per XXXX XXX,XXX to Petroleum estimate

total expect total million operating million. to and $XX range direct $XXX expenses million to and million $XX We and spending between be between $XX capital

million our and be $XX and we you. turn excluding million. ammonia Dave, the it rate XXXX $XX $XX segment, to turnaround capital spending XX%, expenses back million, fourth million and inventory operating be direct XX% total to between to impacts approximately be that, quarter With over For between Fertilizer $X utilization I'll estimate and to

David Lamp

Thank you, Dane. have have improved accordingly. In summary, refinery cracks since the responded steadily summer, and market fundamentals

the out-of-control revising and/or settling well wait RVOs to also saw as as We relief as prices small some prices XXXX although act for for for for have XXXX, on to RINs, refinery continues market the risen issuing EPA exemptions. and

cautiously remained market the based over on driver the across crude oil, OPEC dropped current we standpoint, the world is and firmly a place price the at fundamentals clearly optimistic in $XX the crude year. and seat is Looking backwardation with inventories barrel in Starting see. a next from U.S. the in around have

additional shale Basin. crude, due to to spread capacity. Brent-TI While as seen been despite oil Cushing and we improving shale oil of DJ. we've Canadian tightening expect production $XX Bakken, production the production Recently, the has declines declined the at takeaway to see Anadarko additional slow the Basin in develop inventories

continue be key in widening production shale will sustained of Brent-TI the believe We a to differential. redemption growth the oil to

are past refined month. returned from of levels are although distillate the due for remain gasoline Ida. demand significantly including high downtime jet the back and below and to exports Coast to Refined the Hurricane which has improved products. some remain partially inventories fuel, diesel to exports is Demand above Gulf pre-COVID on largely gasoline five-year averages, product of pre-COVID low. Imports over levels, generally Moving

seeing Looking benefits curve the at is come of finally shipping, crack the XXXX supply of much not play. now a spreads, Contango market a distillate and been and a is coming despite crude ultimately on The back will significant oil. IMO but depends cracks on combination had is is that this which depressed. impacts our business in tremendous our back is One fertilizer experiencing into have question improvement of are backwardation Fertilizer of the forward that that And whether get attention, generally has business. pricing. does area demand effect year

available plant domestic pushed equation, the side increased year of demand has facility fertilizer Winter globe. in activity higher crop have the during corn supplies shutdowns during in additional for than inventories reducing this Meanwhile, normal the Storm heightening prices the turnaround On across facilities inputs. and been fertilizer to energy shutdowns Hurricane Asia and Europe soybeans Uri, Ida. further to have and the Meanwhile, and for lower of demand grain production due low caused shut-in crunch summer

so fall. we ago and ammonia price the doubled saw not not quarter a third concerned continued so this year the prices they are result, to actually supply. for for is much Partners units. point, are our our from the able UAN worried and CVR about have through sales positive outlook very the are pricing than have customers common The nitrogen XX% think and about get next – increase as At a more year being As fertilizer to in to levels, through happy ownership market we we

to back Turning renewables.

refineries several As progress believe and fronts our since with and we I our that earlier, fertilizer us facilities on location unique mentioned last provide benefits made the of we've call.

margins Give diesel the traditional steps over been the margins summer, as final in considerably refinery conversion First, Wynnewood the complete unit we to oil-based service. to renewable elected hydrocracker the soybean the have of we ready renewable diesel keep weakness higher. service in petroleum are of to the

in With diesel increase and deodorized subsided. oil basis refined the the and oil HOBO has crude has prices, recent and bleached soybean oil improved the corn for spread and

is with unit completion planned next of spring Our during will the startup of mid-April. diesel current Wynnewood conversion to year, to the we and move turnaround finish this hydrocracker plan at which renewable expected in the

Second, unit of to allow run should additional Long pre-treater unit pre-treater be path at completed. in is fuel should late investment approximately $XX the are lead XXXX at currently quarter Board has carbon and the to standard that this for project progressing completion critical of of low credits. Wynnewood us is a our order capital variety lower for we that wider feedstocks equipment carbon-intensity generate the it we are approved The the and project estimating on fourth million. of development a

greater million that project, conversion capacity of this, out the its evaluating the at conjunction blue XXQ its fourth, tax monetizing also amount are And of to currently place aviation provide renewable taking to million for fuels progressing the production per us business certified capture as financing a engineering renewable already renewable both ammonia to opportunity Schedule law of of or us sequestration potentially facilities. gallons on In XX is our it. are annual in diesel in gallons separate renewable. with of that entity. Coffeyville changes This to activities A pool up the its recovery XXX is and through all year with investors oil and with regulations It an facility. process that to more towards support Third, explore could expected a access Coffeyville with enhanced at sustainable benefits potentially of position fertilizer take business option advantage of fuel should continues credits for we be approximately of an breaking efforts carbon of

scale still are look long-term to the our up taking business, we innings we for early the developing a Although, future in are we of view the want renewable prepare to and as diesel business.

Coffeyville, blue a of at capture sustainable for potentials business an runway believe diesel other we hydrogen the fairly space. both potential at in opportunities production for aviation With we and production long carbon refineries, green impactful have the production, renewable energy developing

is Our our need. refining decarbonize with business while our they by goal renewables growing supplying competitive business fuels our to customers

a has $X.XX averaging $XX.XX WCS per a the under Looking basis. with follows: ton. WTI, over ammonia quarter-to-date and at $X.XX Midland to barrel have Cushing forward UAN prices at cracks averaged Brent-TI ton the at $X.XX increased Cushing as XXXX, over have are barrel metrics and of The are WTI per the on Group differential RINs over X-X-X $XXX three averaged RVO at while XXXX $X,XXX the differential differential over $XX.XX fourth per prices $X.XX WTI WTI, quarter with a spread

barrel yesterday, cracks of $XX.XX $XX.XX the per As and were under Group Brent-TI barrel, was WTI. the three per X-X-X was WCS $X.XX

RVO approximately On per were barrel. RINs the XXXX basis, $X.XX

actions circulated and September XXXX favor step in be about As prices that is original decouple saw and resetting below when RVO realistic net emissions depleted. if I in would level. the taken reduction much the The rumors RINs XXXX DXs of at make. XXXX and set effect some we rebuild mentioned brief would relief DXs RIN RVO these levels in RVO a potential further the deemphasizes severely been DX of to which DXs, reducing more the bank, to has believe in goes an actually We RIN which that immediately carbon appropriate earlier,

We compliant through refinery in entitled that also are RFS continue believe refineries relief to face harm disproportionate economic that to exemptions. small small with

reason grant as With we questions. not We the are applications years. have in for that, Wynnewood and have no submitted exemptions XXXX, XXXX XXXX, for ready past those for and should they EPA operator, see

Operator

Instructions] with Thank question first Goldman Sachs. [Operator Davenport Our Carly is proceed. you. from Please

Carly Davenport

the afternoon. good for Thanks Hi, questions. taking

one $XX of is the first the you approved targeting you for Does Can on that are The scope about million production of And can there expected CI there. XXX% that talk capital? progress the any thoughts what or the provide range unit? just at pre-treatment unit. Congrats was on the a cover the you're unit? feedstocks early the around with of a

David Lamp

Sure, unit is under of diesel a raw of XXX as barrels we is which to grease, as in oil And renewable will it's these be to that, oil. it many white to million about of at designed also diesel. day, backyards our in with those of be, then make can we refined, the feedstock backyard. renewable plus that and But oil move we're unit some we'll deodorized for know the some the limitations, and work right or can is not runway in Once unit as of ag we'll processing the that pre-treating. type on up, running corn oils we with treated many, exactly a it's for have bleached don't treated diet suitable We forward. we'll well to and without in raw a steady start I'm today yellow reduce up soybean targeting April, about Carly. that looking but but gallons unit, The match whether designed waste oil some CI the market type is grease have little of our now sense. soybean out right material. corn some. handle year the a any on X,XXX a that's capacity throw preferably of when And be operations count What we'll because we a those sure, is long there's tallow look what it, that’s you

Carly Davenport

Great. And one then just you. Thank is XXXX second the around CapEx.

you If we any scheduled for kind as have of that's well XXXX? activity about think move turnaround next as there the we year as pre-treater through early thoughts spend the as pacing

David Lamp

release usually quarter to and market. we'll that the until don't earnings to the We that fourth single to call that defer timing

Carly Davenport

Great. taking questions. Thanks the for

Operator

Phil Gresh from Our with next JPMorgan. proceed. Please question is

Phil Gresh

Hey. Good afternoon, Dave.

David Lamp

Hey, Phil.

Phil Gresh

I tighter I I'm you a a I pick where question, just wondering, pretty tightness the thoughts positioned your getting provide could Brent that are a some on above think needing first production thoughts And You think wondering is recently? of go well scenario there see And Brent-WTI lot last. of of think on this that. be how been kind question duration you'd to be a WTI? might people your My crude made to back you’d U.S. How about up. spread. comments it's want to get about lot long

David Lamp

Sure.

is drilling I in production think, and to spread returning recovery prepared shale vital that levels. remarks, oil As the of to reasonable mentioned I

it's inventory. the is a I and now number, right below As mentioned $X Cushing still prompt losing in down

good tied think all that's tends that shale and generally Cushing at kind showing that's only is, and the production locations going for. pick now, a produced the there's the Permian region just then other that I to current shareholders – If the wells understand than long capital you patch to the at – it way. other in to up very to look Permian. oil of do now. of these obviously, to the barrels I is any is it's doesn't the don't is returns runway And have in move and wet Gulf all assuming come directly But the these that that basins. keep are these looking being production really growth feeling of to right oil that aren't right in completely

what's world harvested. there's being I that of is to people happening to higher running any fact, and spread. force until are the see means back ducts back That and right shut that said, Cushing oil see the whether just don't trend to out. prices danger tighter to there plenty market exports In most a And now just There's I this sees a just growing. changing bit, I will think that of have oil of Brent-TI know don't

Phil Gresh

Right.

exports the TI need you necessarily don't just with it's spread is? where see Brent, disincentivize we So going it above tight – to the

David Lamp

Exactly.

Phil Gresh

Right.

Okay.

results realized question, of would've the gross Second refining, were versus one like various a were in guess, the there I it pieces know results. their Mid-Con I putting but timers, those on margin just in are on did moving the themselves. even results with lot what margin things, the up some peers I a to and bit or seem maybe little expected adjustments light adjustments

that affected quarter the that spreads So that tight think like you you result? particular there anything was it would and or is highlight things in in the just

David Lamp

COVID. that margin that against is came under seeing. It's from off probably we some But losses there. think some Well, $X I in in really special derivative have year, what a item we last only did a reemergence the contributed did crack you're of to spreads to that protect little trying

in – you to there adjusted $X are think back I pretty If that's that's put around over and what achieve. to close going that most on basis people an $X

Phil Gresh

Right.

Okay. Thanks lot. a

David Lamp

welcome. You're

Operator

Please with Rao Prashant proceed. Our Citigroup. next question is from

Prashant Rao

I Wynnewood, for question. follow-up on to Good the afternoon. there on updates conversion. taking the the wanted Thanks

partners seem more forward, just on those know entities. private confident bringing a the that of and out unit market? give source those on comment coming to you you're with of JVs it lot the given progressing to a you of to could we've feedstock that of First seen the traded publicly question. – on wanted feedstock, on be announcements And but more bit where down follow-up on I'll seems in be terms terms of of and first for have partnerships leave talking There I to on a are margin, spot there I fixed are where discussions locking in buy a us versus

David Lamp

Sure.

in We crack come are range, They're a of pound at a will HOBO has positive backward brought ready on the its think a for oil, looking lot of from positive assured to still now they're when important the we the the basis of [indiscernible] just It trading improvement and integrating is not soybean and oil do very The originally strong, and low spread has in pre-treater soybean least RINs with oil a spread pound I compared a carbon really was and mix to and what think next be fairly $X.XX do but soybean where that standpoint standard were on at the numbers because abundant. back part of credits dependent very still it year. – that a back make upwards conversion. without even $X.XX it's on fuel was the to diesel. not we renewable that in combination

being one new oil that. are for for XX% those So standpoint some people out at other canola soybeans produces think really XX%. alternatives we'll there about many out we look position to compared look oil there's call And are projects. backward need that at for a on or to canola to to are oil there And in at be producing And seed I going think pretty built. that good from and cases we – the only our the a integrating, is location crushers canola others most a oil there looked a take also that more

secure a there for coming Coffeyville project the lot not of the Wynnewood longer term. project, table supply So to the options only even but that base on is

Prashant Rao

is some this quick of a Would put a capital we be before just there to be renew just structure releases as headlines. MoUs see the that into contract these in where versus or you put – offtake about something news that willing capital favored that would that sort order into I a JV in an ask secure feedstock the you seems something to more to Dave, investment margin. an the follow-up getting in

think all given is just to capital about that? there going that you've got So within on if room the framework wondering

David Lamp

Yes.

between be like no better think it can oils getting happen. just on call for do base crushers is a more problems trade a table. this the projects look be making I the of is us reasonable think more business, on the that I that of supply very the trade and off a our to oil, whole to waste one and that the mean, and creating and to oil the we thinly options with and they're market into These get these that's of for refiners forth it's around to the it. and as I And is liquidity key and that back partners able the have. competitors going market crusher that frankly, has And to important more to

Prashant Rao

Okay.

on is just bit is question the picture. bigger So a last margins,

of At same normalization see the some So will response, side. of spread RD again, back on down. and part more There that's or come should one, expect, coming couple potential you because combined should curves also HOBO this – all BPD that better, this, and supply going stream. be looks the and a we things telling on a time, there's us to us be is oil supply supply SAS here, pointed think will as price but rally out, we're there cracks, as I and expect there in diesel getting you oil

headwind half XXXX. we – So look all out or else into equal the HOBO back that should XXXX be of past the as or for spread maybe negative XXXX past

cycle So within Wynnewood that. question when sort potentially I and for two-parted there, Coffeyville through think of about for

way as it's of would the how what's that good be it breaking and is segment, those a how back prices scope consider the the where petroleum a size go a better project, versus given out you've be do First, mean, then that bigger revert project. breaking a structure or into capital in flip time in optionality a the is out HOBO of picture term? I I period saw in being HOBO return refiner, can terms to renewable are the getting work now of and spread you the done it on separate we Should petroleum high for you you a margin the the summer in not know in to of there and that, terms secondly, refiner? you the But factors longer segment? And that your project you took when compression pause out just changed doing

David Lamp

return? has think the was Well, online, HOBO little Xs. end okay. but it, bit. really spread the really a below maybe starting low has the at But basis seems is the up in was as before, the almost large as subsided. in some other is RD subsided But two bring think, to it right as oils bean little it effect that, now once. Green is bit very change it's to don't big quarters the rebalance still Yes. And impact market the of to of happen, I that as I oil margins, And prices, that was two supposedly but just, $X I $X, now. saw even the come the – wide big plants absorb up and in from know, little trading make problem it flows and $X, that got had will Diamond into trade but to basis back – is difference it That a this took starting

one up. next I the would start ours be to think

think that get into the take the of envisioned in and largely into with And move the kind economics basis we the pre-treater, I So move of once line project. then we – we with originally out equation the we the have runway. more

you bit a there, something soybean even a that's corn $X little on gallon on little throw a basis get and enhancement. more per So less than a

Prashant Rao

Okay. Thanks. Dave. That's super helpful. Thanks,

David Lamp

welcome. You're

Operator

Please Our Holt. next Pickering, Matthew proceed. Blair Tudor, from with is question

Matthew Blair

opportunities looking in be carbon side looking well? on renewable morning, that made could is the refining Hey. capture diesel? you at. for I Dave. you're that you're hoping with bit that comment your the Good was little a the more something expand at associated as regarding Or you Would

David Lamp

COX discussed in make Well, just have other diesel think to for is a fertilizer hydrogen have be the business do. have to I'd at field that have about system We're plant, and don't it. I CIs off through exist a that then COX that And starts amount naphtha recover then up of recovers at refineries. we that again, more miles it both same renewable today since a And because off the previously diesel renewable concentrated we of I that then we recovery reduce three other just could to streams system key for a instance, the at the renewable we is we we our tons if look table, we way recover we at that we can is that and coming through CI with also all for renewable and which year crude and purposes that just to was, it is, that's a system used makes a Matt it that hydrogen the that when a the off infrastructure the that within around One know, quarters a renewable refinery to lower can compression. pretty pump is that away shipped, while use we renewables are other avenues And existing, Then infrastructure of old likewise, monetize you COX portfolio refinery. broad collect credits we running XXQ look streams of there an the oil the instance. sequester concentrated XX COX that oil. diesel for and million same way. have XX, plant into you used diesel. that recover we can several than having And the when could Coffeyville I it stream significant mean going monetize renewable propane is also

runway So than longer playing. there's just

industries There's of happened. level logical angle decarbonize do any require that we is a to operation could And there that. love capture at a installed. if to capture and build a we to COX. to structure mind, I low It of in other that hard them. synergies things we be doubt that my be refinery should refinery at place direct degree want is a and And to doesn't kind position no The be have that synergies air is coming, it's other some with carbon are heat, have regulatory it'd the we'd these And today, in think. exist look to between going are some but

Matthew Blair

I then for your QX, quarter-over-quarter. Thanks details. refiner believe about for looking Great. guidance throughput midpoint is the at up the And X%

had strong also for refiners other QX. Some have guidance pretty

to be discipline that fading little So here? bit what might say a concerned I guess you investors potentially is that would refiner

David Lamp

COVID, back if for production. were I quarter, back cut never look up Well, much them we you tell then history, we think I'd we our a that operating that did maybe at during full right really but into

you on margin your you if assets discipline think case, wide open I assets. be refineries have back. to then margin and our of to, depends So cutting the we it. And our time, applies the we all it run tend should that competitiveness In the to on have prove marginal the the

Matthew Blair

Thank Great. you.

Operator

Credit next Our is proceed. Suisse. with from Please question Manav Gupta

Manav Gupta

Coast, the things now be Hey, would are couple Gulf to Dave. versus footprint. there of on years look discounted refineries looking highly you Last were if But you increase available assuming your year, Coast, they refining Obviously ago. work I'm out. even and didn't West around,

given in your So just are there. evaluations the refining refining interested test particularly and footprint you somewhere trying in out to stress still raising understand

David Lamp

would of I be fuels think, that, remarks opening in believe time. period a Manav, necessary mentioned fossil for I is we long the

unique pivot that should be going block the out there and the all on ones forward hand, our our able know they should probably is are away to are and refining on renewable rest other these or capacity towards is going forward. several doesn't don't refining. investment to Even we is that and probably to the industry be there the million of we'd money a refineries And cutting because more On in flow that and sustaining the that make what really cash capacity maintain block we're doesn't opinion, probably position just I more our diesels. from we have There on have you in – space is renewables to renewable a capital still taking are I of refining free it shutdown. In run think any five-year around tells that basis. X reason really barrels turnaround cycle

And coming more renewables. about some that up of those you're on today. are hearing We're focused

Manav Gupta

eligible event, EPA should Perfect. SREs and follow-up is, logically to act My we everything, doesn't you for are quick deserve, would be they here it SREs? but to as legal you of take know in renewable do right, time you the kind a unfortunate to you the you. you always get and Would Is that don't last again? recourse you give something consider did

David Lamp

right are legal ready to. We we have if Supreme the avenues now to the pursue to Court

Manav Gupta

Thank Thank so much, you. you Thank you. Okay. Dave.

David Lamp

You're welcome.

Operator

proceed. from Paul Scotiabank. Please is question with Cheng next Our

Paul Cheng

Hey, Dave. Good afternoon.

David Lamp

Paul. Hey,

Paul Cheng

you EPA stand application answer. Is back your know that to don't I your supposed get on the to when SRE? for the – that

David Lamp

to them that when haven't back XX to days in they supposed cases. submitted They get because we in us any done were

days so… on two issues gone. I are XXXX on litigation them XXXX long think we're also, the long, left XXXX few in on a they debating and fact, now those still have And application, but right

Paul Cheng

Right.

I that just drag step guess you timeline and we what’s that and on, looking government what I if come should don't So mean be next the the what's is the that back so they for? question step? my to next Because

David Lamp

other deadline step that. that They have if on law. over X. One know deny pushed the And next – two is had is done an or them or to there October they was they act November done the soon and what Well, don't on agreement grant with several to on sue per it rule to is is would supposed to already got their that refiners – either EPA here do haven’t refiners XX. to November them not waiver I their that meeting

are the throws that's in So date. beginning next just the litigation. other the ones And of

litigation not standpoint, to the getting it's at have the a it. have I something the sent don't on they without addressing where from only refinery time. They RVOs position they small to take but know and So how some waivers same to point do the

Paul Cheng

you talking about Yes. [indiscernible]? Were

David Lamp

Yes. I to It's say. hard know.

Paul Cheng

what is All still it up the coming XXXX is pre-treatment is XXXX? targeting now right. late or on for And unit, that stream that

David Lamp

of quarter have We're it XXXX. thinking we'll done late in fourth

Paul Cheng

XXXX. end year basically So

David Lamp

Right.

Paul Cheng

that come ahead supposed is when for do And on-stream? how you to that Coffeyville about FID assume go in

David Lamp

say Just you again, can it Paul?

Paul Cheng

one Coffeyville hydrotreater RD. you For at looking convert to also the that to are of

FID do So when you on – come supposed that's to if when that that, on-stream?

David Lamp

happen carbon standard for states getting need the of are various those to in we – and to of conversion. doing approval. for assurance it only Coffeyville fuel scope and with conversion Coffeyville, right we're expansion. engineering stages some now is on cost on low Coffeyville couple the proceed that together. right to at There's now and Well, XX we'd that more I a the about defining it pallet thing really market really getting a looking just think of need We additional before some the have

in the to that's think of really that credits just look it'll that a on California, the consume X of have, to but It's at – and the close it's would number service probably possibility Washington it's only program are X in go some gallons billion. all we that If about And need think Oregon that conversion. and when now, you I billion table that'll just who to make demand more knows. happen, We happen. that good

Paul Cheng

in how Wynnewood, estimate into is the And if much the do unless an [indiscernible]? you have they SAF capital call want Sure. you to add you capacity, XX/XX in do

David Lamp

expensive and you XX% there about is that all for it. One is the Well, two end fractionated put of diesel aviation avenues of out sustainable have to available want to to fractionator really back do right There's the second in to fuel, a production. on is a to reactor, renewable but if alternative, jet. sustainable add is catalyst to XX%, the increase could the the that yield you which much with XX%, make option, then more is And more selections. another

suitable not environment now is jet our to it is of on right that again. produce is, kind regulatory position the Our sustainable

occur. it. oil the it market. interested And with In ones in You're the taking talked substantial a to to into we've are make shoving have $X to a got more subsidies $X that you and for paying not airlines,

come government to with of subsidies some has sort. the it So

Paul Cheng

of that my you XXXX. the Coffeyville mentioned us say, in year how have downtime. the to next output Wynnewood unit And the – of you what during long Okay. you talk impact is you the and final – give also is And turnaround duration kind a Can and what in longer and question that, turnaround about the hedging. no

the I say September no year you XX that did position? of apologize, as you of the that at those longer benefited You of as – end or said

David Lamp

and positions on have Yes. crack those all and quarter, third for We quarter second put expired.

crack no So hedge we on have forward. going

Paul Cheng

Okay.

So as of And September XX, means… that right?

David Lamp

XX. That’s right. September

Paul Cheng

Okay.

David Lamp

turnarounds at in together. do As involves two save up can go, cracker cost turnaround diesel because far conversion on one Alki there's going the crude we indirect the to moved synergy some the that Paul, number between fall, cat we have we were but combining two by unit. those a Wynnewood And renewable and we it Wynnewood to the do the – as to originally match spring

turn particular units coker around. in a in to just crude And unit. a good turnaround is XXXX, but XX-day a basically Coffeyville it's it's those So

So…

Paul Cheng

Is that the or spring to going be the Coffeyville? fall for

David Lamp

Coffeyville, probably it'll For be fall. the

Paul Cheng

many And days? how

David Lamp

to XX XX neighborhood. days in that about somewhere still that It's

Paul Cheng

Thank you.

David Lamp

welcome. You're

Operator

have to management for remarks. like the question-and-answer turn closing back would to our call reached end of session. I We the

David Lamp

in to CVR thank all you I'd for Again, interest Energy. your like

reliable Additionally, during if see I'd next XXXX with like hard to environmentally you thank COVID since forward earnings We fourth our responsible towards work quarter employees look call I especially in you our operations a their happy Have to safe, reviewing then. don't commitment our holidays, results for and period. and all. this

Operator

conference. today's conclude does This you. Thank

for You may your you lines participation. and your thank disconnect time this at

CVR Energy (CVI) 2 Nov 212021 Q3 Earnings call transcript