CVI - Earnings call transcript Q4 2021

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Operator

00:03 Greetings and welcome to the CVR Energy Inc. Fourth 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. [Operator Instructions] As a reminder, this conference is being recorded. like Roberts, the and Vice for Energy. now your over Investor would CVR Richard host, President I to conference turn to Relations XX:XX of FP&A Thank sir. you,

begin. You may

Richard Roberts

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

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

may except that release. operations and forth may with information, the our events materially obligation cautioned filings as these are statements. or results in You new the result latest discussed affected forward-looking from and the statements set factors result, by actual in As a Commission our Securities important the to whether results by publicly be Exchange XX:XX required law. in statements, of update We to undertake otherwise, any differ or extent forward-looking a no future earnings

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

David Lamp

reported call. you, ’XX. we results Good CVR thank full-year and earnings Energy's We This morning, afternoon, of joining our full quarter shareholders. attributable Thank per XX:XX million were full reported $XX year Earnings non-controlling diluted million fourth CVI Richard. $X.XX of to net everyone for the inclusive year interest you for or XX:XX of for share $XX and XXXX. a income of the of

the the quarter, reported million we fourth per million. inclusive a income and and Loss $XX fourth quarter. of $X.XX the quarter $XX for the share was interest diluted was For the to year the $XXX of for of CVI net $XXX refining net our EBITDA Despite on loss million million. safe, refining non-controlling shareholders attributable reliable high in was it for While business. and markets results drove fundamentals another stubbornly for we to to strong market CVR’s on operations. prices weighted fertilizer RIN in XXXX, and continue improve fertilizer of remained results, quarter the continue XX:XX challenges focus

we XX% publicly published later plan environmental XXXX. in continue on is achieve We we are to reduction internal and ESG for more events. report XXXX improvements We significant providing XX:XX environmental our that report Work year-over-year safety year-over-year and metrics, a release including this in disclosures a health first ESG year. to progressing

XX:XX a also results. million $XXX significant quarter in quarter $X.XX fourth of to returned to shareholders or our capital through Turning totaling second equivalent We share. the special the the dividend per

WCS the we for per refinery the increased at was of the XX:XX XXX% during for barrel X-X-X were The crack our per fourth of was throughput improved barrels quarter $X.XX processing the from $XX.XX per per combined The XXX,XXX over per to the XXXX. Cushing Petroleum barrel Light Both RINs per XXX,XXX the WCS fourth ran in significantly as compared quarter barrels have differential Cushing. over period. a of barrel to XXXX however, crude approximately Group was in quarter quarter the quarter day barrel. fourth $XX.XX to that in $X.XX was over total XXXX compared in Midland the XXXX. Group prior the averaged the of -- WTI cracks $XX the WCS Coffeyville for yield averaged $X.XX facilities X fourth quarter year due the ago. X-X-X ’XX, at per barrel on barrel. product differential the period XX% to in barrel per based fourth segment, $X.XX XXXX, quarter barrel of Brent-TI as Benchmark last in in compared WTI RINs of quarter per X the processed. consumed well For $X.XX year. when to day quarter widening fourth And XX:XX The approximately barrel to per WTI spreads and differential of same XX:XX compared $X.XX oil averaged a $X.XX year

In last of as the Our distillate the of with yield approximately crude total of XXX,XXX quarter fourth XXXX ‘XX fourth percentage the prior oil throughputs gathered per we barrels consistent for XX% year. XXX,XXX was total, period. of during crude day compared quarter day in same to barrels period a per

activities our in the to year. We due over decline production see system, continue to drilling limited a slight across past

Coffeyville firmly an the our compressor the during impacted XX% see was our continue at being the with quarter highlights. call In the additional of unplanned look additional quarter, through the prices $XX through let October, increase above consolidated and facilities. would pump and discuss prices currently we approximately of Fertilizer half me downtime Now year. ammonia Dane firm to day. capacity the an per the utilization over turn facility, XX:XX XXX segment, drilled to production tons financial Fertilizer COX fourth prices was UAN to by some first XX:XX increase which to current expect which barrel. both we should an completed per at ammonia However, In installation wells

Dane Neumann

everyone. and XX:XX Thank you, afternoon, Dave good

income of favorable and of and diluted on million fourth inventory per share impact valuation $XX loss consolidated impacts includes million quarter outstanding of $X.XX, $XX negative of million. $X a Our RFS mark-to-market estimated our net obligation

million our fourth quarter a in XX:XX XXXX the a elevated negative million. same $X.XX prices. million impacts, Petroleum of somewhat compared The $XX driven XXXX. $XXX loss adjusted by EBITDA year-over-year of $XX spreads, to fourth was The was quarter EBITDA in these the was the was increase for XXXX increase offset RINs EPS EBITDA segment's period adjusted significant in by crack Excluding and

In outstanding of segment's XXXX, $XX segment million. barrel. Petroleum reported margin million, impact was fourth our estimated Excluding impacts the of $X.XX RFS inventory adjusted mark-to-market the refining valuation quarter obligation Petroleum $X our was on $XX XX:XX an our million, of per EBITDA

RIN XX% losses valuation unrealized for the fourth XX% quarter obligation, the approximately quarter inventory of Excluding was derivative been barrel. our impacts, in the refining have $X.XX our would margin XXXX XX:XX On capture per estimated of mark-to-market outstanding compared approximately fourth impact this rate and XXXX. basis, to of

million capture of $XXX of quarter same market. the impacted prices million differential the rate RINs RINs favorable per or period Our was elevated barrel XXXX total fourth in fourth was and last expense quarter oil the in crude XX:XX less $XXX XXXX the for for of the mostly a by steep compared year. to crude to negatively throughput, $X.XX backwardation due

impact our any of As a reminder, include waivers RINs or not reported the expense exceptions. does

RFS including our $X Our mark-to-market $X The $X.XX from benefit obligation price mark-to-market RFS end to the quarter million expense as an obligation was on obligation impact of XXXX. ‘XX RIN recently full-year was estimated estimated includes at high compared at third expense RINs average in our $X.XX quarter. $XXX a the $XXX a fourth at to the million volume RINs million accrued end XXXX proposed XX:XX XXXX compared to Our year-end million the renewable of accrued revising obligations. of

RFS as Wynnewood’s obligations based expected of XXX XXXX million from estimated operations we RVO, year the EPA's to of our the the of end refining adjusted XXXX obligation high should million Our XXXX a for under on the exempt believe approximates RFS internal approximately at obligation we regulation. blending be end RINs For XXXX continue the obligation XXX through volumes. net XX:XX for Wynnewood’s forecast proposed to

also for net renewable bringing XXX We XXX RINs. million XXX approximately diesel, million DX to obligation approximately our to to expect million generate RIN XXXX RINs from

by higher expense income operating prices and of per $X.XX barrel does net operating $X.XX exemptions. of million quarter improvement of of Fertilizer XXXX, or fourth the by for This unit, gains with losses realized quarter with forecast or In the year-over-year the was XXXX. crack Petroleum $X.XX Derivative and primarily throughput of distribution swaps in operating the $XX of or quarter quarter unit segment third The fourth million. the and EBITDA quarter not offset quarter of crude associated million, per were of result reported which XXXX. closed as primarily $XX of EBITDA of prices. fourth the for fourth fourth million. $XX and the $XX unit for of common direct any losses XXXX, quarter and of a waivers included loss in were is compared million, XXXX a of $XX slightly expenses derivatives. gains of loss primarily XXXX. million of personnel XX:XX For expenses. higher end oil XX:XX quarter XXXX associated the the common feedstock Our direct primarily increased include operating million, which at operating we Partnership costs $XX unrealized total natural impact per derivative to and expenses the of gas Canadian XX:XX of per EBITDA that million, $X per XXXX, totaled $X.XX $X.XX net million, of fourth The had increase to income were The of of ammonia UAN higher compared XX:XX barrel segment's driven was of $XX the in declared spread fourth $X the common

$XXX $XX expected the of XXXX which to common and and distribution the will million the and Fertilizer CVR which segment consolidated As we related owns capital diesel of XXXX renewable $XXX $XXX in the this million $XXX $XX be to total was units, receive diesel to million $XXX cash CVR environmental million, in spending Fertilizer $XX year the of proportionate approximately spending $XXX the Environmental for total, construction million $XX Petroleum estimate Partners Wynnewood, Energy capital $XX approximately and including of the consolidated comprised for at to million to the Wynnewood. renewable XX:XX million Total $XX spending be in million. a million full unit million the the of maintenance included maintenance million, at segment, capital, We segment, Of is $XX Petroleum project from million $XX for capital million completion to the and XX% is segment. pretreater.

which fourth spending provided planned year estimate will million. turnaround operations Our next be year. turnaround consolidated Wynnewood the $XX we at planned capital and the spending million turnaround quarter free by $XX to for for was Cash the preparing XX:XX of the XXXX approximately for use $XX plan was million of a flow excludes million Coffeyville $XX this cash and

paid million quarter, million portion million the approximately of $XX $XX we year and the sheet. We $XX interest million. uses $XXX During included to of of the Turning in quarter Notes cash XX:XX Partners' for XXXX CVR quarter CVR of ended interest Partners the third material cash partial non-controlling the balance the cash. distribution. $XX for taxes and Other the million of of redemption with

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

liquidity, had Partners we $XXX cash X.XX% the which cash CVR December quarter, $XXX million Senior that of Partners, under were As outstanding. of Notes XX:XX the another Partners of borrowing CVR the approximately was the Subsequent million. final approximately XXXX, redeemed million base outstanding. of its ABL redeemed comprised million availability of $XXX $XXX $XX the of to included of of year-end, less Notes million, $XX CVR excluding XXXX in and million During approximately XX,

be been reduction the XXXX on the over XX:XX With full sheet a first an June in refinancing $XX the $XX Partners' by of debt completed reduced ‘XX quarter the ahead debt has by of annual reduced debt per year, senior will CVR redemption and cost million XXXX. approximately balance total the million, Looking service of notes remaining of today, to earlier XX%.

throughput to day For to our during at rates barrels in turnaround. XXX,XXX running Wynnewood reduced March be will per the we estimate total XXX,XXX Petroleum approximately be as segment,

XX million. million We and direct be XX capital to for the XX total our Fertilizer spending ammonia range and between expenses XX% to between the utilization be XX to For expect rate between we estimate total to XX% million, quarter. million and operating XX:XX segment,

to capital spending $XX XX:XX over to it I'll operating turn inventory impacts and We and million be between $XX expenses million. that, be million to back approximately expect $X million direct to total you. excluding Dave, With $X

David Lamp

Thank returning material in over an unnecessary we and of recovery winter course due market of and at saw hurricanes pre-treated rates refining renewable levels. of margins we currently quarter. and a to and we our by spreads. closures near led exposure Product feedstock during which and XXXX, oil should refining term CVR, pre-COVID in the Wynnewood, increase we online the refining stubbornly we you, in to product and capacity XX:XX reduced Dane. demand inventories second crack significantly, currently inventories associated reduction to the Unfortunately, corn continue with Between for RINs which summary, announced mix XX:XX to hand. the run mostly on plan downtime remain as In have the and the storms at on in fundamentals. sustained a complete have to tightened fuels. have high drag and significantly rebound April oil transportation a soybean price Initially, Fortunately to middle diesel RIN the full be of unit plan could

a generate discussed increased expect or assuming decarbonization. exposure last (ph) to XXX million RINs to million renewables XX:XX which production, should this waivers RINs on renewable a our bring our year diesel per million from approximately RIN XXX our exemptions. I year focus reminder, As net we under On earning call, and no to XXX

the of to for projects. any renewable quarters We transfer renewables, of should to on our reporting on subject and a plan the expect segment to significantly several plan complete This provide authorizations We Wynnewood, anticipate new We that value. facilitate look progress. continue and including the are of to outlined to Directors company pleased of once appropriate. start-up next assets. also reporting approved renewables, entities optionality currently to XX:XX April the begin focus this required advances our in RDU milestones the of reorganize as various maximizing ultimately when We the we to segregation step we report to and new the formation ago XX forward has Board and months, comprehensive significant over execute expect a advance

processing co-currently installation progressing Wynnewood. other -- other expected We including are projects at the projects of pretreater the

include uniquely which fuel in are refinery COX for and Wynnewood renewable fertilizer be of project have We evaluate potentially have refining at for return in our believe bill. discussions engineering number proximity our our potentially renewables also decarbonizes a than oil sustainable to given around have will relationship feedstock design with the we aviation synergistic believe order the to of on vegetable the today the -- could production. our attractive meaningful We back our producers Coffeyville XX:XX as Overall, partnering with business refinery, most larger traffic with and work positioned underway better the the value the how could We'll look refining. and we to XX:XX refining be anything it. focused and we to renewables to chains. there capitalize business economics recovery be a control and projects are a benefit sequestering in that we be determine economics. in farm and more We various can build focused to Turning sources from around supplier on strategy could

demand year. gas I are As U.S. in during below inventories and and currently significant below Meanwhile mentioned, a for gasoline the are -- inventories the we diesel five-year refining five-year XX% Gasoline over improvement past fundamentals see averages. same averages X% Vehicle jet month the pre-COVID diesel in in XXXX. levels XX% the XXXX to levels. for of of surpassed pre-COVID in is the even in miles traveled -- period same -- back same December levels of within demand is and

believe to of to over new closures next North We we America capacity start-up Moving in monitor Fertilizer. continue drive years. refinery Europe on refinery the which globally, the and few additional should XX:XX

of per ammonia good of China, CVR restrict U.S. in prices while Fertilizer some the into supply in distributions fourth the call, nearly those in fertilizer for in storm perfect Natural book firm year, Egypt XXXX globally quarters, interest. exports hence that saw and period into significant distributions UAN. in facilities earning price the captured the and at led disruptions to fourth announced a we've a are higher nearly we million continued in we has quarter both and to we million market in XXXX. conditions of seen remained continue have and of strong a three the saw which BTUs, shut market cash last of Our that per have a net highlighted business, the improvements Nitrogen quarter. gas XX The the fertilizer to increases half of for $XX $XX of first looking XX:XX Russia fertilizers. number on prices increases that strong Partners Europe demand generates in, XX% developed we Over order past spring prices nearly unit, CVI’s of Last

interest CVR per per The its $XX.XX over over prices its ton. X was WTI. financing of $XX.XX $XXX As quarter of $XX.XX the $X.XX quarter. first of differential at reduced service by UAN increasing held cracks the balance barrel under With and debt prices have Brent-TI debt X-X-X WCS differential $X.XX ton and as has ammonia -- spread significantly the metrics and with WTI and $XX million. pay-down quarter-to-date Fertilizer XXXX, $X.XX high after XX:XX WCS XX:XX improved per per firm fourth Ammonia has the X barrel, barrel; Group follows: per sheet annual with the $XX.XX Brent-TI Partners of barrel mark quarter per were prices and over Looking to Group WTL prices per per X-X-X have barrel, under the $X,XXX are barrel; and has $X.XX averaged was averaged averaged differential cracks over WTI. market in significantly yesterday WTI. Midland

for Assuming current $X.XX end high the situation RIN XXXX they and the issued comply early fix failure exemption prices to by RIN the the to both per the of with and RVO unfortunately to as of to we on would prices high periods end led RFS outstanding setting hold EPA proposed refinery in denial missed RVO, the capitalize December. to under the after small rose EPA rule hopeful ‘XX February obligations necessary its in prepared the were RVOs, if requests. XX:XX approximately proposed Depending proposed the market opportunity again final RINs environment. EPA on Comment EPA's the barrel. law. XXXX RVOs EPA's persistence proposed are EPA, in We're file that to suit has accountable the making

may RIN by be proposed sheet addition is caused refinery pursue Wynnewood RVOs from -- unlawful under these request for to actions exempt lawsuits the are pursuing to issues we rule believe on refinery window to period. to obligation time initial XX and failure to the a provide per to it it until the RFS. the associated market. time resolved, damages should RIN within small are are continue balance and per will our once RFS we small they we mandated Wynnewood’s on its an EPA's likely activities related including to carry the is as unlawful months Failure In issues obligation exemptions, impacts we to -- settlement regarding believe also the it RFS, entitled entitled -- exemption that These

high mentioned. also resolution pressure will from in likely ready believe prices to or for the With of due that, issues possibly moderate We we're just the prices XX:XX I the questions. future, from operator, gasoline RIN

Operator

conducting Phil Our the At a Please Thank question session. question. from with time, with question-and-answer comes XX:XX proceed this Instructions] first of Gresh your [Operator Morgan. line be JP you. we'll

Phil Gresh

Good Hey. for afternoon, XX:XX question. Thanks Dave. taking my

David Lamp

Phil XX:XX Hi,

Phil Gresh

the better it So, put and quarter-to-quarter just Gulf seems kind margins in results, Coast and XX:XX back of at mid-term. looking stepping refiners up fourth the quarter and much that

about that. of You factors some talked that be could the influencing

are you think et backwardation view those factors if factors Brent-TI, transitory curious cetera. structural your like or in Just

you have thoughts Thanks. So there? just any

David Lamp

falls, to the therefore. inventories That's high first Sure, not incentive fact dramatically, typical. that there season, winter reason picks the the base and in with do the and recover -- so price an at open. go once long although, allowed gasoline area that I of on out effect in were had, profitability our Well, product but refinery has just it's RVP, Phil. still that go fact seasonally the of market, the to significant much, demand if the the the down. backwardation bit, run volatility production not which they're that's to little demand and the is also the you has but blew kind we're the up it's uncommon no a doing little look goes season. the in turnaround bit numbers, not mentioned quarter, Wynnewood everybody our appropriately which and the crude right reduced an weakest incentive during law, Brent-TI usually XX:XX to of just of up back Mid-Con it's to the the at interruptions And and typically the RVP is a it -- real higher So you now is for gas, our Magellan only starts in XX:XX expect under fairly wide

the the prices. much shale As directly nearly goes at crude oil, which but these Brent-TI production to expected as we it's related kinds as of as of is increasing, not far really have would

Phil Gresh

thorough. that the arms That's around trying you have My it. renewable very CVIs around Got XX:XX you. follow-up to where objectives I'm my could more here is headed just allocation. capital Thank require just spending. capital get because

about maybe or cash allocation. to that's on talking of not right about do is other look you reinstating And that the buybacks thinking at look kind you through walk you time you -- your we Coffeyville segregating Is so other the kind how like scenario RINs outstanding, or plate generation things could flow consider have capital now then opportunities, also these company, liability feel that? about of the dividends just there If or that think you're a at business? are of with you you parent where

David Lamp

been XX:XX allocation, a a Well, machine flow all is and about. always what capital cash cash I all it's CVIs we're and think about from

mention of spent you complying million like. And sheet -- I our expense. really balance put think that we equation when just we the on RINs level, takes us in that XXX kind that cash you've a at booked or of heard flow our least with the it to don't it

RINs and just with the has rectification So out anything kind take some wipes can we got to we to of of steps happen on, XXX that of but outlined, going a we're do. to things kind lot we think that

and thinking Our anybody fuel break XX:XX is have thought dividends that however under a business, markets this the flag of every far and ESG corporate As it are in lot it other shut being access business and to strategy raise decarbonization balance in a money here think higher it that out, I we change behind quarter can commands and factors, board know that sheet a going and concerns it breaking our is lot this of money I Those to a where probably I those as going in will conversations be renewables forward fossil still to things. structure not starting difficult, the by mention think and think capital to far there's I the position talks from out and we of them again I are a is the continue. strong, multiple. two breaking our see little about where all and businesses are renewables -- we're here is think about raising not

Phil Gresh

XX:XX Okay. thoughts. for your Thanks Great.

David Lamp

welcome. You're XX:XX

Operator

Thank XX:XX you.

with your question. comes proceed with Credit question Manav from Please the Our line Gupta next of Suisse.

Manav Gupta

Dave. Thanks have a side. I Hey, the for all here. update on renewable the XX:XX question

who more your CapEx they're Some peers offering And part will equity, the partners build just are be to and it like financial -- in be a understand building diesel to the you do this provider times do not bringing who partners? you are bringing I'm to with it CapEx or of guaranteed feedstock will is, or they or and sometimes as your is but financial you this giving a feedstock and some then renewable taking partners build bringing of how profits. other the preferred in business of doing are are business in it business, out, others, they some they're trying offering open feedstock, probably supply what you partners plan alone like yourself offering

Dane Neumann

to big you where now and oil look us players, with controlled we're or do is bean more have supply XX:XX it's deals, that little the it want if Well, sharing dollars with players several other help not people not in we're we of the and you more probably that vegetable not go I several in game, more particularly a optionality promising some say real break give like bad not those we're but that with -- of skin we're to evaluating think it's opposed kind the at only is us optionality in very but could, of these and it, the of oil vegetable than refining the crushers we haven't will three monopoly business think something that found ag the the business of out a and so than to lot deals feedstocks, itself, forward, by yet. you going cases having oil, shutting it's of good area the bean I in a in way to not way

Manav Gupta

some high. the, prices? little even Europe environment is, second the understand are gas XXXX? prices with some talked you the to high help a last fertilizer And or this is maybe fertilizer why these price struggling What make or it fact XXXX natural in fertilizer the the Is about of that factors of reasons us Okay. could nitrogen XX:XX question bit, driving so which are

David Lamp

demand so going soybeans. corn are flush think bucks. these if allocated customers drive big of with the towards for of a most America. -- supply, the has approaching are broken to fertilizer and over cost fertilizer even demand which grains, start corn gone farm are about are two And X price. a worried corn put though getting worldwide, you mainly then is they to and drives are our bushel and up, All more other South unprofitable. the what gas in the you're the Farmers is XX:XX is soybeans in the the there a has on factors $XX Europe much reasons has And Well, for -- you remarks and the at price look drought price gone of more RFS incentives prepared leading to and making in there mentioned pretty I with then if made look up fertilizer continues XX:XX I natural is

So over of have are own usually to are plants exporters holding and they're holding their their, you use. China their now the and Russia for what basically production down and due they economics Egypt shut there XX% and

U.S. those five Trinidad fairly next those Storm and which there be U.S. Winter to for case other going all and are probably hurricanes years, Russia is at that lot to products So imports factors those, Uri against going or And trade tariffs mention the tariffs together maybe shut are the a on year steep. because even that -- and not was XX:XX the production. and down of to a is, the just the there won those limit factor

that's of referring storm kind I was So the perfect to.

Manav Gupta

you is Supreme fought XX:XX I've you asked even before, SREs, Perfect. like them before, declining looks towards you them one, quick taken tilting last, won. Court this EPA all And and have very to

guys for you ready around yours? rightfully for X is what believe getting you are So

David Lamp

they all pretty the period is on refinery ignore basically If EPA, XX:XX Yeah. all responses to pretty, know want proposed all that these dramatic. will waivers our I they'll filing them -- comment in denial up and of small they day the small I we and as I the lawsuit waivers. Register deny soon Federal mean just And think as like refinery their be the will go next meant. were

Manav Gupta

you Thank XX:XX so much.

David Lamp

welcome. You're XX:XX

Operator

you. Thank XX:XX

of with Our question. Goldman Carly from next question Davenport the with Sachs. comes your Please proceed line

Carly Davenport

Thanks afternoon. for Good taking Hi. XX:XX the questions.

strategy, on mentioned start prepared the the wanted Just to remarks. you decarbonization in

your share to efforts wanted be or on a think lot on a side you're but the fit renewable SAS to other piece, get there considering. Is some your about talked for good You’ve anything CCS the fuels would the business? of decarbonization that you thoughts

David Lamp

to and we Carly, and but can sequester a uniquely pipeline both owned our Fertilizer that it's is connected positioned We're available have this oil our Well, any refineries for -- to as we do is, system. that again isn't enhanced at COX XX:XX once and looking because for we there early COX is we're use business, recovery extend of recover out have today, what we reason system today. of think a to a third-party. do are pipeline in yet I there But we by

pipeline to or either that low-carbon in just pipeline in standard it and a Not stick credits the that and getting XX%, credits. COX of monetize fuel one it So new further recover example. XXq through to only for examples, I’ll which a give purify can that you concentrated building Wynnewood couple example, the makes the which run, requires XX% like and that's hydrogen sequester plant that a at we RD RD unit we're stream

a of have stream We those. concentrated FCC in our We COX. recover could stacks also

So of building to to one utility at real refinery there fuel hit look on and slew is that as also using a be business likely case a decarbonize the there, look and and itself is stuff some really natural Scope of that that would refineries. We a in hydrogen around considered it there fuel gas detail Scope a X. instead within at

that years. So be and over the here there's we of a exciting lot think options next of that are pursuing we'll couple

Carly Davenport

follow-up context. the and quarter. you're color the the around that flagged something capture backwardation there for during just rates that Thanks on of some you Is Great. is and impacts XX:XX The any us, think curve quantify provide to given captures the capture we the sensitivity can about Are go of you impact current structure? in kind forward on there the able was quarter? what

David Lamp

it's Well, much pretty one XX:XX crack. right your proposition for a off that's one comes

now, make about $X.XX right backwardation. what -- crack. that's we're $X.of comes the So I would the assumption XX that off and right between just $X.XX

Carly Davenport

XX:XX Great. I appreciate that.

David Lamp

XX:XX You’re welcome.

Operator

XX:XX Thank you.

Holt. Pickering, with Please line your question Matthew proceed with Our the comes question. from next of Tudor, Blair

Matthew Blair

quarter you're XX:XX looks in QX Good the about the like I and benchmarks about so morning. help of for is fertilizer only think closer XX% Hey. normally XX%. could us to here, hoping pricing first you realization or was it

-- other for or can moving if are we pencil-in parts other wondering, there XX% into QX take if consideration? Just need some to we

David Lamp

industrial an have that's of do fairly that's of we Well, business, one XX:XX large. part our plants,

a ramp are that to those formula take while up. those, prices So

As of in first open and booked that most half say far prices. the the the as these we've as goes, spring are of should I book early stuff higher the the year, all at

in occurs go again. other it see time atypical there? does the do ammonia farmers apply kind first drop and quarter see the not start factor It's price you'll So summer side-dress to of market at it's they for where harvest in a question a the largely then from fertilizer and to post And until activities second the in and then quarter.

what is to pretty of the make that think complete make the first ammonia we're have pretty will going a still vast But just we book we're half, in we pretty strong. happen exactly UAN, the and So going hard on majority to in second to it's say because order it's much half.

Matthew Blair

Great. XX:XX

Okay.

how then RDU Dave, availability assess start oil. last on the really upcoming where soybean the saw Sounds your year pricing of you oil the up. blew RBDs the, relative good. the for would And crude We on soybean to out front,

might what's there of, in supplier careful kind market? in overall So, on of you're kind material improvement you kind has that start or that what been do of RBD a

David Lamp

And it’s the kind so maintain it's year you because have high, that range. XX:XX for we the Well, where call It's rebalance, of $X.XX at was down steady $X.XX bean while pound. they that, a trade we postponed Matt but in to doing postpone, that basis remember I'll could now profitable $X.XX at oil it that we're we and up at pretty done this took somewhere now and now and started the it a their, the have last and over we're it's that's point, for in why $X.XX all we're to that flows now. conversion

run oil to our real we've big other I bean lot has, said. of that's good source what always CI. pretreater a oil And feedstocks problem without don't as also than pretty of basis But with that higher availability suitable a has lower it for also -- it's option. it's but We'll and the look is with it. corn have a that So we've see a pretreater it got us a gives to

So that revs. the money short-haul a mix, of make lot we in we with can and feel offset

Matthew Blair

So basis plant on? that you're XX:XX you you, do you just plant, up pretreater your to or do keep what blows comes until in if out response again start after you do producing economics set your

David Lamp

keep that I we but probably anticipate Well, XX:XX happening. don't running,

not huge. Our move is

months some in and on others oil other the are and two matter of And the they're inventory. of fact claiming about coming is things. using a used of feedstock tallow have the And we

seen we're not going the was time. it to market last like shock So

Matthew Blair

XX:XX Great. Thank you.

David Lamp

Matt. these of A lot delayed getting XX:XX to are

Some of them are later. later and coming on

that trade flows. would rebalance just help So

Matthew Blair

Right. Thank XX:XX all point. color. Good you for the

Operator

Thank you. XX:XX

of Our line proceed question Cheng the your comes with from with question. Please next Paul Scotiabank.

Paul Cheng

XX:XX guys. Good Hey, afternoon.

David Lamp

XX:XX Hey, Paul.

Paul Cheng

a plan the also your And start that in for to before different think until that I you're how you and talking merge the investment? ahead that you you're then reorganize to also your reporting that RBD looking out looking location that [indiscernible] That a business. before means doing about -- you're probably when going you're saying you refinement do also, payback going results would those you go what XX:XX done or from financial them? future, become at next and in at comp early anyway and way be you, are year. that by reporting, Will quarterly that and refinery start profit the period

David Lamp

refining, XX:XX ultimately to I going competitive that as we trade don't the as it's just in going be -- I think would latter. sure, look same the look probably we the view the at at business renewable Paul. think return, I refining businesses. first, probably way. The, to is as the

no from difference So standpoint of that. in approach our there's really that

as on we soon or keep option the Again, if under what separate commands is want doing renewables it company. reporting worried dictates our we're fossil we're we that appropriate. hard financing a multiple as we're spin anything starting the question to where this as could businesses. a as the We'll don't fuel we have off to participate and not see banks we to segment, as this restructuring. higher We be much as should that, separate in with market have other We of that as do already optionality Your were reason to going takes, yes, it done. as are, have well a type ESG more forward as think

So that's what we're future. planning for the

Paul Cheng

or guys obviously, even at, is anticipation looking you, looking you RD one, I and other CSS at mean, after basically are looking you're to look at plan. what or RD when and then your are refinery outside next cost it looking of stay for and [indiscernible] you Dave, going And you you location like that or that, things? at all be XX:XX would other the you opportunity

David Lamp

that chain lot a to installing Well, into people as XX:XX think other -- participate of I this taking think a I decarbonization going plants us for an as that in turn is want today like through are and of owned helps potentially the well value ownership and to an separate no that third-parties refiner owned a as decarbonization than by decarbonize monetizing us just third-parties plants corporation. different hydrogen a it's as can that by typically, I as see opportunity

space. have We a wide-open

Paul Cheng

start going you go as or doing we -- I you're to the pop that you the to that back, when Okay. of them year -- a stop going a in number that you quarter, second by just we could is before second then quarter, a is to up wanted saying do take it separate assume should that? means settlement will that quarters this it is XX:XX years And you're that put

David Lamp

is soon a reporting that to appropriate get an that row as think, our time, that ducks have in just call happen. can and would I start what be I'd as we Well, it XX:XX

Paul Cheng

for out lag the the flexibility once switch how plan and on XX:XX refining take Okay. the you're on make versus you to have long mixing? them condition since terms go is the will is for you the that Wynnewood How effect in And long market that plan least for of conventional -- it to have back that in order that always – at depends stretch you the into

David Lamp

it, matter but you're decide, in the the you're do of is to once every, to switch Once a you year XX is gives that you kind you to probably About make time service it chance the fact have good on look or happens. of days that each it back of at RD to want hydrocracker you practicality to run that -- probably and it. going cycle every the catalyst XX:XX replacing less is, runway of some a put in

on market a lot that of and you're lot what is thought without forward the going So to of on a not around do whole thought refining.

Paul Cheng

to XX:XX that once and you subsequent the a you up that months particular switch has matter So one for convinced that end do than year that XX were, in in fall? is make if you be practical the not more probably

David Lamp

XX:XX Yeah, that's right.

Paul Cheng

can us the XX:XX tell And the how refine also we that, do once that RD, refinery. Wynnewood you that start you up

I day, think how barrels per product throughput you the so by XX,XXX and the to? also will going capacity change yield the reduce to is

David Lamp

will run really We've to And Wynnewood we'll XX that come is accomplish well, that. Yeah. feedstock a with to number. like back -- XX:XX XX,XXX an at RD barrels old and to we about go about

that we hydrogen uniquely field are is can there, kinds of in we make after them RD make proprietary we're to in there positioned bring to with with and the crudes because what those our naphtha So gather pipelines. and

Paul Cheng

look will Do yield street? like XX:XX distillate what you estimate, is have the an you gasoline make and after your

David Lamp

is, the Yeah. maker. will go main lose distillate the hydrocracker a that's opportunity cost which distillate down, and is because won't yield XX:XX big Well we here

today So probably you cat going cracking you'll post loss the XX% a see do you're result. on of you'll as than switch distillate to yield rely more and of RD see

Paul Cheng

you. Thank XX:XX

David Lamp

You’re XX:XX welcome, Paul.

Operator

concludes any Ladies final that the session. turn Thank back to comments. you. I will XX:XX over for and question-and-answer management floor our gentlemen,

David Lamp

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

during and earnings call. results Thank like responsible environmentally to their first work operations. next all commitment We reliable to reviewing you. their safe, I'd thank hard quarter employees for XXXX our forward towards look Additionally, our our

Operator

XX:XX Thank concludes you. conference. This today's

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

CVR Energy (CVI) 22 Feb 222021 Q4 Earnings call transcript