CVI - Earnings call transcript Q1 2022

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Operator

Greetings, and welcome to the CVR Energy First Quarter 2022 Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Richard Roberts, Vice President of Financial Planning and Analysis, Investor Relations. Thank you, sir.

begin. may You

Richard Roberts

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

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

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

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

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

David Lamp

share afternoon, in sector higher reported quarter in quarter. per on Thank everyone, continued to both the earnings million $X.XX. a Yesterday, year-over-year quarter was We for net and call. thank fundamentals posted EBITDA results basis we million. improve our $XXX fertilizer during and the consolidated income first earnings first $XXX of as for and you, you of joining Good Richard. segments refining

We XX close are quarter has closing May of pleased per dividend be to record on to announce the on would the market share annualized May authorized representing shareholders XX. independent At which share, first currently which paid at of Board of of will this the $X.XX dividend per $X.XX that yield refiners. highest over dividend dividend yesterday's yield annual price, is be a X%, among

day the throughput barrels month XXX,XXX quarter This the its schedule segment, first Petroleum was approximately planned first undergoing our of for total XXX,XXX impacted turnaround Wynnewood weather-related per day the turnaround for during with outages. which began completed Wynnewood on by in The per at combined quarter XXXX, April. compares and planned February first For was the XXXX the the some of barrels week of to was of March. end at of

of crude $XX.XX March oil X-X-X We first quarter X and Group Diesel processed. cracks $X.XX we quarter hydrocracker averaged proposed on was Brent-TI renewable averaged XXXX. end surged the XX% also running in product certification in the year and in high prices compared XX% in of in to the completed prior averaged rate the the first work currently as quarter The The begun diesel and quarter. the of crack X.XX quarter, first quarter month. the Light barrel Based for the barrel the in The the per RIN first of RVO yield per barrel quarter out work service. renewable half at is the has period. conversion unit XXXX $X.XX the approximately compared renewable to differential as operations for towards diesel first of through $XX.XX averaged XXXX. levels, per per increased over cracks the Benchmark increase of $XX.XX an product. diesel barrel on to

to our max to percentage continue of Our and XX%, a we crude quarter we same throughput XXXX distillate the of in last as barrels per XXX,XXX first of crude for oil distillate refineries total during XXX,XXX gathered per mode. compared day year. approximately was day operate barrels period yield In total, the

and stated, me, recently. been As have rates drilling we per have day XXX,XXX in we have started see our have in excuse activities an above -- to we barrels increase gathering area, our

during is Although plants hurdle consolidated XX%. the to downtime utilization encouraging In issues the unplanned production with up ramp quarter ammonia activity faced both starting coming chain to supply producers a increasing in some at see Mid-Con. Fertilizer it at remain the quickly, in we segment, in

During some the of the of the Price X caused over the facilities at turnarounds that for and this Europe the in in at both we began recent the and increased of address this concern reflecting global latest fall Energy the conflict summer, and longevity last the issues and the quarters. quarter increased -- to again, of upcoming XXXX outages realizations increases cycle. last the first driven increased has strengthened that unplanned expect Asia. in fertilizer grain the supply ag with confidence Ukraine our has Crunch over further The in prices onset price

turn over discuss let the to Now me Dane additional call highlights. to financial

Dane Neumann

afternoon, good and Dave, you, everyone. Thank

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

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

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

segment's Petroleum items, adjusted adjusted quarter $XX XXXX. adjusted by first in to million quarter in million. the expense of segment's for our other quarter higher for recognized offset somewhat the The volumes reported shows was In the quarter cracks $XX that Petroleum for that quarter to by elevated compared throughput a the first barrel. I The product highlight the was within the of first was increase year-over-year XXXX, XXXX refining and up increased like driven million related $XXX $XX per for EBITDA margin our $XX.XX potential EBITDA EBITDA EBITDA to million obligations of would RIN first prices. above-mentioned was future expense the line. legal we XXXX, of Excluding adjusted

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

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

$X.XX expense an XXXX. RFS was $X.XX estimated quarter Our includes of accrued RIN million at average our of impact compared mark-to-market on a at at price obligation, to mark-to-market end which first quarter end the RINs

generated In exemptions. derivatives. XXXX or million, $X for with million based quarter first an spread include production, approximately XXX in 'XX, the $X.XX XXXX, the barrel offsetting of RINs associated we prior year crack million an barrel crack to high associated includes hedges XXXX, unrealized RINs due renewable had and impact the with not we were the Derivative gains the million, but derivative that first per XXXX quarter quarter. million from expenses approximately RVO losses of direct Petroleum $X end end waivers on which were which increased proposed does obligation absolute losses forecast year the direct closed totaled the operating of quarter XXXX, For diesel basis, gains any full share-based The primarily of the expenses the XXX total segment of the of Petroleum labor includes of of of compared first $X.XX of included the $XX primarily spread other expenses were with the to in which million operating quarter of reductions. unrealized period. first expense segment's third flat $XX On in compensation operating as primarily the per at

net distribution quarter the million net first of segment Fertilizer of and spending a expected renewable which unit quarter XXXX. segment. EBITDA of million sales million. comprised for consolidated for common the the and We $XX million, $X.XX $XX to For CVR prices XXXX diesel is the UAN segment, common Energy Fertilizer or $X of of million Petroleum Total adjustments increase including There million $X.XX million. maintenance unit. $X first Petroleum the consolidated loss and proportionate the per either distribution Fertilizer for the approximately per approximately volumes. The to and million, XXXX, and $XX maintenance environmental Partners in of million primarily year-over-year compared of This The and CVR EBITDA approximately income a $XXX quarter sales $XXX spending and were XXXX was million, to million of and $XXX period. approximately of $XX capital the units higher from million, on EBITDA to be $X.XX $XXX receive common million per $XXX total and common in $XXX of XX% partnership $XX which the million owns million, million is quarter $X first million $X segment income driven The $XX a by declared million. higher from cash capital operating operating $XX will losses in segment in unit be first to of XXXX capital ammonia spending estimate Environmental to capital. unit included or of was reported EBITDA no of $XX

the flow notes, $XX repurchases. interest turnaround for XXXX Coffeyville spending uses Cash CVR $XX we and and redemption $XX estimate quarter $XX of the million Partners' plan be for for recently of in million million the CVR remaining senior for in Wynnewood portion for cash and million $XX XXXX. Our included the was preparation remaining $XXX at unit noncontrolling and first the quarter provided capital to at $XX CVR free was consolidated the $XXX million million the will planned for million planned year Significant for excludes the distribution fourth in interest, quarter turnaround approximately XXXX million. the cash million spending, $XX turnaround Partners planned of Partners' operations CapEx turnaround for spending, completed for by which

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

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

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

During million the remaining its quarter, CVR completing $XX X.XX% plan. XXXX outstanding, million debt reduction Partners $XX notes redeemed of the senior targeted

senior notes annual the by of will million $XX approximately in With June be debt CVR and per refinancing of the of a the at service million over reduced costs paydown, the XX%. debt Partners XXXX $XX reduction year,

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

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

and total we to to between be inventory utilization XX%. to million segment, million operating approximately $XX quarter $XX rate between XXXX expenses the million, million. and XX% to estimate Direct turnaround be $XX and $XX Fertilizer spending ammonia our excluding capital For and impacts second be

million. estimate be we to X,XXX day total renewables, Dave, to be between $X to per that, to throughput I'll approximately you. expenses $X turn second With barrels XXXX million direct it and over back For and quarter operating X,XXX

David Lamp

Thank becoming the already you, what the the market with Dane. tightening market. refining a considerably the In improved fundamentals year conflict have is in in In summary, tight essentially beginning X-year of United Ukraine States, refining further with line since demand product levels. was average

a barrels for of refined the below increased month nearly of to per products an the X.X over averages. the Exports gasoline XX% X-year of from have distillate over day inventories are jet day, over fuel barrels increase X year. million beginning While million past

the is capacity has As -- and year, driving near-term The industry of of second distillate outlook for period of the of half we for the significantly RIN natural the refining a Europe and approach believe driving Russian cracks improved despite in products summer exports the season fairly versus Asia, U.S. gas constructive. rationalization the combination prices. near-record of refining in high advantage diesel we the particularly and the heavy loss global the resulted cracks, maintenance

in has is system in with the inventories in improved pushing levels, With beginning below the $XX and barrel gasoline to Distillate which the are Group have per the for tightened cracks the pre-COVID distillate line Group Mid-Con significantly Demand levels average for month diesel of XX% the X. basis the inventories the since of and nearly X-year near year, Magellan X April.

We chain issues activity to are drilling in new our ramp-up faster increasing. remain on interest the the a we're area. in of level constraint encouraged pickup the seeing a also Supply but gathering drilling, of see

States conflict have number production, that fertilizer issues from do We low continues domestic was very struggling low and production costs the benefit for energy positioned positive in from increased supply need As U.S. energy fix key not are States, I believe The supply tightening shale shale for business since With in of the to assets turn United also. further with differentials easy to production. starting the the market see the in for to conversations in is term. Europe crude and higher call the be to oil the for stated ongoing the production. Brent fertilizer to The fall. our fertilizer Russia inventories to well the we a are in issues with times, China independence and is a near export and driving fertilizer increase the sustained TI already of that constraints inventories face high up United widening oil to cost an an continuing outlook Ukraine

million Partners of distribution X unit. the units $XX debt interest of the $XX Over CVR announced paid per has bought million down of and high quarters, $XX back and past over

in the million. interest the XX% $XX net distributions past of Our CVR share nearly Energy's for quarters X is

on turnaround service, previously Wynnewood, renewable the completed at progress we mentioned, unit. of the to diesel the make continue and pretreatment As the hydrocracker I we during conversion to

in long the of lead equipment quarter Due the and targeting phase. 'XX. have ongoing the permitting the in now supply for currently issues, We pretreater are ordered chain are to we second

of Board are also to been by develop X call. beyond and business I projects, for our company segregate plan discussed continuing approved these our last to the the been The assets. have reorganization new in created has earnings the We reorganization renewables overall strategy the the renewables various as including entities

fuel We sustainable expansion could on among conversion of at us in fuel. program within renewable standard potential will The have include the could fertilizer renewable looking conversion be future with -- an Wynnewood to completed refining can factors, states position LCFS-type carbon existing we we the the production diesel of the that that belt unique Overall, believe on of provides definition geographical opportunity and term. other the the project, of reduction a economic emissions, our to are our location LCFS aviation which or of drive of long development depend any and regulation. other a business farm the conversion

WTL per averaged The the a Brent The Fertilizer $XX.XX WCS differential under under WTI are ammonia Looking and per spread cracks $XXX have Midland at over over prices and of over averaged the strong quarter $X.XX per approximately differential as barrel Group barrel follows: $XX.XX $X,XXX differential well. are $X.XX ton. WTI. WTI. per ton has prices are UAN and remained has averaged barrel, prices metrics per TI XXXX, X-X-X second X per quarter-to-date $XX.XX the of as barrel of with

$XX per $X.XX yet EPA of refinery proposed As symbolic was $XX.XX RVO, revoke announcement April, cracks RINs a made per barrel III granted end small were diesel Group to under cracks barrel. assuming yesterday, for unlawful X-X-X WCS are XXXX. $XX.XX exemptions the TI approximately barrel. over Group In of seemingly the per XXXX per Brent were was barrel. X high WTI and

redeem to as 'XX, impact for remains 'XX 'XX as requiring the meet on to to XXXX RVO which no for is However, price the wait on obligation. the announcement and XXXX or 'XX. EPA those and not refineries well exemptions for purchase This stubbornly refinery RINs continue rule to we as had RINs, EPA small finalizing high of

small be exemption the waiver by a issue We rule under how law timely manner. refinery RVOs on can and federal agency perplexed to obligations continue a to repeatedly in

be believe we obligation continually should have the stated, under exempt As we Wynnewood's RFS.

continue XXXX, outstanding me, positions These persistent be EPA's RFS excuse -- intended we does -- filed are for and small carry small courts, for resolved and by the we continue our to -- believe issues filing and chaos our for relief, merchant XXXX by balance have assert hurt only refiners. until XXXX we'll comply not by issues caused will and or entitled prepare continue the to rights possible. We obligation as with soon 'XX. refinery outstanding will on XXXX refusal as and sheet legally wherever rule exemptions whenever these to will to likely RIN EPA Congress The we are to

With that, the reliable questions. assets broken ready be EPA While environmentally much XXXX on able cost they demand $X.XX the the of of operator, EPA the high who lower and parties the pump. cost we for opportunities capture believe focus for are only develop. are big we're RIN have stated oil at prices publicly no government. higher in we fixing gasoline ultimately as by which that isn't take We selling ready and immediately and public alone EPA prices We administration operation and which big will Wall foots until blenders, is estimate ensure Hopefully, as gallon, responsible to consumers disagree $XX to manner our billion much participants retail and is holding but obligated admitted through even to Street RFS. RINs on paid it bill Meanwhile, this the prices who opportunistically. traders, to to one, the of the with for as safe, as has some value chain to driving per as help rise prices our the notice market that repeatedly program, to pass

Operator

[Operator Instructions].

question comes the from line first Our JPMorgan. Gresh of with Phil

Philip Gresh

just First the announcement on of question the is here. dividend

talked annualized high. would obviously You be the which rate, pretty about

suggests that that, just framework be of -- from to is new So kind on achieve? trying capital or dividend the just general to you're return the thoughts and/or to run going is any rate that of that here

David Lamp

possibly every many return can at us. many Well, this a we I The it didn't Board have cash. and wouldn't say available is that us month, business. as any obviously, demonstrates some every heard we ways you've model just shape to look make our shareholders will in But and business reinstated strategy. as forward to that think the quarter if looks I the positive And cash to think times very And confidence decision. curve we going the of have in

So shareholders. money we strategy to our returning original went think back of to I

Philip Gresh

Understood. Yes.

and And view was the feel Okay. many you second are the to margin now up the prices, the on just the the there. of between question, you Do there here, you without I right a so little talk about as environment facility now But moving delay then gave comfortable pieces prices, you, your LCFS. diesel could PTU fundamentals PTU. wanted more bit you the happening start with just at ask update I hoping what's broadly

is thinking what Just the latest fundamental curious your picture. on

David Lamp

is it's picture than market. it different interesting think much it a was make a very When conversion today. made we the call what I to the Well,

the we that hand, it of make we where the other current right price could us with are appears money structure. the to RINs On -- now,

of as We general, profitable accommodate we that quarters to the to little an bit we're we're remember, in original opportunity a rate cutting it this, to conversion that you of RDU, because the got -- now refining up know, in piece. the are probably because, delay giving cost in to be we looks a crude And bought did feedstock ago lot months running X several us. you this

paperwork, the bought be we're to is is But up an So how fast quite file, dated will is or rate running up the a Whether another is to material to the we're of yet when to I is as firmly take we'll have have and right and -- question P&L the camp then and that the it unit still have it almost to lot carbon how as open complete. not the of course, think a load now, of through of you and unit run news again you seen. was look flow close very what life we're But ago, replace do that. and we're in now that going certification while through processing very to good a various do cycle and at order we'll this we the of catalysts. stable, ramp catalyst

Philip Gresh

LCFS feel I the appropriately accounted that sense. the RD inventory kind makes a That now, the you think to like clarify, that of of Yes. price -- just that lot. lower where they've economics LCFS from run that prices such come about price the are lower aside as at Do the business. feel have potential you're about And guess I obviously, of down running you for rate getting good feel you

David Lamp

I It's just it pricing would are prices They're don't I almost it at you're -- oil. doesn't But happening it's think. will pretreater are it Well, lot -- there's now just feedstock I the worse I what service, have. thought right with lot between oil don't -- million frankly. a the is that million one market will this even is It is better almost -- is pricing and in looking be. moving like by that business with because of exactly lot is whole bean matter we're year $XX is. I business, just than the swings in $XX which quicker driven tell it cracks. something still it that thing on around and this diesel And a there of the projecting But what's a you the differentials know the the commoditized than it's incredible.

give and do. of runs blender we're carbon of issue. -- DX We it, we're kind positive what open What's as some we're go or What -- going business. And values pretty fuel be And We amount the offset into see CI it whether money run the happening being put the up still of standard is and the do a credit basically and fair and going is to that. down. confident we a an those happens is able the how to it to of be. into source some to low credits on when appears not just as we're out ready tax up that prices the feedstocks gets have extended still gone other still We're And that by be to are the advantaged towel stretch because location. throw ready imagination our going to in any not of on to it. given

Philip Gresh

the for volatility Dave. thank appreciate your thoughts, the complexity, and I you and

Operator

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

Carly Davenport

wanted expected. came touch OpEx kind than higher just a I had the environment. in quarter on touch of briefly cost this we to

CapEx cost you or can working you're just the the seeing and on what you're side out side talk bit from on So those to a also how about of pressures. perspective manage whether an that's OpEx inflation any there,

David Lamp

$XX to Sure. our run basis. EBITDA headwind. -- every us you, million I'll comments, some remind time a is of worth did We dollar was a I'll Other natural charge in is about about couple about That more. make a than that, a gas rate elaborate is that million. $XX Dane it's in can OpEx on reoccurring. this have not onetime and maybe

that run has to you bit. our have our previous anything the had particularly has a quite So we're up we stock-based P&L. probably Dane, it don't And That up gone adjustments and up, some stock stock also the add. first quarter. through UAN the almost in unit double since was prices what I runs if in know quarter

Dane Neumann

item. was we the of OpEx and and The run-up was just the Yes. another made both with primarily saw SG&A. in clarify in that was associated that income I'll escalation line accrual OpEx UAN

Carly Davenport

you the Understood. for on looks as Wynnewood XQ the was kind The follow-up of guidance guys don't the then XQ. through operational coming for side. maintenance lack volumes have the just strong of at And

these from we where that perspective about kind ultimately, extent as things be setup? screen EBITDA an can how operational you seeing think think the you could about on well you we're trending at XQ run So just margins And the of capture talk refining. can are that and XQ, the power to strong

David Lamp

Sure.

during as we did subject be have fully -- the other build have events. work there's than other going off plants far weather As nothing that for Wynnewood other some much inventory us to the turnaround we'll crude rest we raise wide that to at like our as running the thrown else can, We before Wynnewood at we do rates planned open But goes, are that, year. operations we'll the -- of up our as refinery. things forward and

Our next in mainly and turnaround on a Coffeyville small turnaround is at there really the which coker. 'XX the

that's the only So that's there. other impact

a spreads area as if where long crack ever. are far in in As today, haven't I -- we're mentioned career an that I seen time, my in

during and we're weeks very But structurally, times I X only It's -- constructive. saw couple worldwide. the refining market hurricane think lasted short, of capacity or the a is appears I so. it

Singapore Europe, look and in they're margins you wide. the at in If equally also

or pull a world make pull comes out. to rates on world's have to don't crude -- more to do into or gasoline. which much season has that's have gasoline you driving have diesel carve Either and I the big to a worldwide pretty think to raise it's you and So the time. to have going the capacity to going And eventually, as it's event the

just looks it strong. very, So very

Operator

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

Manav Gupta

dividends the back. pre-pandemic the the disappeared had pandemic that dividend to the good of refining see for Dave, kind reinstating congrats all from first of it's during or coming which all, coverage are

are analyst are the sector. Help it. who just for fertilizer analyst. reinstating understand, It question fertilizer you more what's those are of the long benefiting helps us can here how overall And My every move in less super quarter, environment you that? seeing guys fertilizer thank How So and for it? prices this for remain we driving of cycle of us is from up, refining place?

David Lamp

just you quantity are higher quarter it, margin as on about over at the I of over think and even well make first the we and margin. XXX%, make even up ammonia look just a take of is quantity higher than UAN. fair a ammonia, the Well, And that We prices UAN. as numbers if ammonia XXXX of

So structural plants of the natural shut really thing the here price. that's high because happened have in is down gas Europe

If you in think with And ton is ton cost looked driving I on Europe, yesterday basically the it natural the a I at gas it it's natural that in it. at where is look gas of just $X,XXX ammonia. what's price,

on going hoarding with was You Ukraine. fertilizer also both their feed have big sure to people they make hoarding that And They're and had themselves. that some and basically they own China were before and exporters. enough -- can production for Russia their and

so when the U.S. it's altogether, put you market. those is And -- import an and just

market. import net So

So grain, frankly. look crop is they're very World short prices, at fertilizer, you is very, just also strong. soybean, and world short And if the corn wheat.

too high storm, cure you And of build to of billion call many high plant you prices it perfect the $X And it's a years well -- to new those $X X So as know as for is build it. do, or kind billion, a billion takes it. But now prices. you haven't probably I'd where many it's probably fertilizer $X too and announcements, on best heard depending happening. I

eventually. this a that solved get is cycle to tends So

Manav Gupta

on quick the incredibly are export My you at bullish cracks, look on. is potential the and obviously mid But when everybody Perfect. Look, and follow-up good. everything. Coast here is contracts Gulf the

the on I'll it that strength the bullishness as Coast. you're fundamentals a pure to leave refining the talk there. refiner relates can about understand Gulf I now? like And seeing right you in it mid-con But So the

David Lamp

Yes.

not pre-COVID side, winter inventories on on board across the side. markets. the Magellan been are it's of previous that's came the statements, to our mentioned We I whittled been As with -- back low in on gasoline away. the has out demand levels the and high

very well So I'm constructive will any and like. wonderful. now, But all who cycles right the on impacts looks It looks market turnaround that on other weather and be what and occur. the doesn't what who depends our group runs

Operator

question next of Vittorioso line Our from comes with Matt Jefferies. the

Matthew Vittorioso

quick ones. a of guess I couple just

it's Obviously, X-X-X going as quarter Just quarter. crack progress to be on the quarter, so solid averaging $XX a we -- second the far. third through that in second

Just X-X-X quarter sort high-level quarter. give commentary or the how wondering of that first Any progress on on so. directional captures on us of just should any sort second sort capture if XX% could -- guidance was of in that you

David Lamp

reason it have changing don't Well, any see I much. to

at gasoline, capture sub look and If above those rates. Distillate the really you the way moves is NYMEX, our still NYMEX. impact it's we premium on basis around like are

the big that there. of XX% course, to right Of up out the capture RINs is carves headwind and

in, you range, If we're our that in back typical. historical put

the as have jet we'll which for which is area. to a remarkable the going margins a increase been also we're make, military also aviation forward, in to year. a done that And quite change. the lot in is in back We and the commercial premium big but business only have capture And continue not bit, those

Matthew Vittorioso

stuff. subsidiaries guess I just in around the corporate Then sort that's helpful. That's the green press going carve of create I on think that restructuring mentioned or new -- you out some to the release the

you're like asset of bondholders. perspective, bondholder's out a realigning not away want creating that or to assets from I existing set group Just confirm from moving is Is just restricted the This fair? that up. any moving assets just

Dane Neumann

is That correct.

the In CVI the notes, of be of construct the moved within terms notes. all will

Matthew Vittorioso

thinking me, strong for just of could just cracks about lastly where be cash here. a then are And flow, and today what couple given very Okay. quarters

from flow. cash UAN generating who's You're very distributions getting strong also also

talk you cash if flow maybe your Just priorities. could about

billion any of You've But And came you on that, maybe you've sort thoughts? away kind know you from of do M&A. you'll $X that, bond I some quarter. reinstituted that And from deal, the some with thought what refi capital the would at I when that the of be M&A dividend. did back moved of each should dividend XXX you presume with to assess point. allocation size away your

So are XXs, as I closer, guess straight about thinking is you debt Just that I'm a for refi as level you do get just thinking billion how away. But stuff? think about couple of a there's there? those $X you years Or of right the guys? they still

Dane Neumann

Yes.

I think we're the being. $X billion the of time level debt with comfortable at

of refi advantage various the look time sure we course, funding we as make the up between we'll, for that the to being, for it some as and As But green to time. entities of point, opportunities that split want for at the maybe of taking we're can. to that get funds we green look

we'll path each other front then of what you the it capital in and and allocation, at a In said, assess best determine quarter terms take what's as look of us is.

Operator

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

Paul Cheng

of Maybe are the didn't will plant at full potential that correctly. maybe looking guys or renewable converting Wynnewood option late also I Did like conversion a you maybe [indiscernible]. catch you produce have a to say it apologize, of that in I into I that came

David Lamp

at that talking No. We time. about were Coffeyville

ago find Coffeyville the hydrotreaters think have a jet the sustainable scope to were we some doing And adding to study As at make to of that engineering that, diesel. I time. module renewable conversion of an of we its within option one we announced time fuel the for same

Paul Cheng

Okay.

because that for going been decision? you table time. that on has is that that guys make So the some to -- When

David Lamp

don't hope RFS not about know. bit. do the talking prepared it's of carbon fuel they remarks, is high reducing carbon compared to until which carbon But I on fuel my the or some market soon inefficient the what low That be credit, very don't oversupplied a the the to Well, were very will RFS standard what low little of it. a and and/or is would been getting states. LCFS the standard EPA it goal they is they'll I has going really that's regulation decision smart, that at as conversion because -- if Paul, I hold is. mentioned we're the in is kind to make to expansion of that other

Paul Cheng

adopting RD need even LCFS be I given that, to number a since mean, and we the going if of be anyway, market, to the large realistically, to low going construction under structurally we're for And states have export.

that So -- some lot every because as say, market mean, kind circumstances, to that strong that under that okay, of for and fine place that will you market look export that places Canada, adopt is there's going a I we that a Europe, -- will at export believe such RD. is be guys like of market

do you demand conversion can't I is a how no, -- it. this tailored I that will I project say market that that for if export make mean So that really the or you just or the to fundamental in domestic standpoint good market? shape, build is from the I'm you going or supply -- the strategically, see at look mean, not how the

David Lamp

location, would Well, at Paul, export I think, our be the best. difficult from

would a California to they're if a market just wherever point the is. I right look credits and rail priced what on about our I see is it at on depending mainly plants range. do that probably LCFS doing the doing the think basis to are $X.XX to credit. plants $X.XX out, the in the soybean you railing where cost run, gallon you now let's LCFS you will exporting internal coastal feed

to just whether So always rail it your getting you're you there. pool close or the [indiscernible]. that's where it's dump And of variable base it that's a to push into

Paul Cheng

I'm sorry, you're the domestic market. But then that going people market, other to yourself. referring mean tighten it exporting I'm are the going not to whole export I you're

FID? for condition still to that the asked export make market I Will a comfortable that order that if to you in balance, why we need that's So to RD.

David Lamp

know. Coffeyville. a I to think don't to Well, make conversion don't I

It's you this how have at I think really that point. to point. monetize specific to at -- me it's to look we'd Canada unclear going

mechanism that those happen blender point that's at for this no it. You with tax associated I don't close There's make the lose RIN it. credit. to to see a even

Paul Cheng

the XXXX? question remarks. probably point on what been XXXX, prepared terms to have sheet? also well finally, for that start obligation? the talk change revise Dane. assume then for to your next settle June you may company anything your will balance step that looking in Or you about Did that the second of as status essentially is done whether of the haven't a as mean, missed let's currently what the at I RVO that for And the some -- EPA 'XX in then is quo, have for for guys? you RVO the And current it I X, program pathway your is The

Dane Neumann

And our legally mentioned, believe $XXX for in we that have balance The Wynnewood. Keep balance on be waivers carrying current Dave sheet. we're that entitled that mind -- we'll comfortable we're We RVO sheet million. and to 'XX balance 'XX. liability as or -- sheet soon on obligation outstanding is the waivers. And that for such, as 'XX 'XX, those represents filing

David Lamp

And your it. second question, Paul, I didn't quite catch

Paul Cheng

been for XXXX, your that guys balance or on asking to was your sheet? whether has you been I RVO that added have No, current that,

David Lamp

Yes. a We're still short and of 'XX. 'XX little

small on litigating and essence at short refinery be Coffeyville settle EPA we'll as because remain acts. all we're to Wynnewood entitled we the is that believe to Wynnewood plan waiver Our in and

Paul Cheng

Right.

sue on of is the So again? so that Dave, June didn't EPA part question the them the that is if that's going you my final change guys next step X, are to

David Lamp

of way course. depends they it on me in then just to waivers of they refinery they illegally to to what what do no said, there's to Well, small certain apply and And did was litigating those anticipate approach But certain when for still going that be they've fairly try -- created, think change quite point. reason something with a successful on us litigate the far to do it XX they're appears what taken. at to June past ridiculous, and X, that interpret on I I that that's kind Wynnewood in it's so regulation exemption. but the the based more this at be we're anything we'll the

Operator

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

Matthew Blair

circle to trying that make. just RD you your back expect comments Dave, to to

that volume QX for QX, so, can to I guess, barrel I When this think I X,XXX it it year. can do And XX looks and the was for around, was I QX. you'd extrapolate day renewable $XX per $XX million million guidance you that year. for make extrapolate you like if gallons if million wondering

to should per gallon consideration there's million to be And those if range to else range to EBITDA EBITDA take guide anywhere just gallon. by anything trying you're you like numbers to $X.XX if per so we see that $X.XX that the that's into million and need or run $XX $XX to? And from wanted

David Lamp

quarters. usually you ahead or X even know, quarter Well, way Matthew, buy feedstock as I'm sure here a you the is

in the spread volatility has the HOBO been and -- we'll So incredible.

exactly looks going -- hedging are strategies do we're But far for it. an don't we're of think things equation I your out like that somewhat working it's other still So how and it off. numbers to

and that on that would RBD today at corn an very varying oil soybean margins you be come close. oil of you You mix run the with a percentages in those we do just look kind of you'd soybean up mentioned, margin and

Matthew Blair

Great. Great.

Sounds providing thanks for the good. Yes, go ahead. And OpEx.

David Lamp

Yes.

point make that to other Just is will what X I'd run. that decided rate One you haven't exactly second. we

we'll be will margins it it those are. -- what whether ramp will So depend up not or on

Matthew Blair

Right, a SG&A. environment. And And on had I pretty volatile just a question it's right. then

be? accrual? QX, to was to Or for expense $XX QX? that stock that or get onetime range run like closer to what $XX trying to million good rate do even is million that a million the $XX like in impacted comp by low at be you I'm And that really, the expect high or used is So you $XX is, million, that

Dane Neumann

Yes.

see as what addition, any well, typical would change some are rates in our But go that. that nothing figures that a and dramatically this stock price. that we well. we're there as inflate then So in the comp helping project impact the was volatility stock-based run about there as costs in SG&A up ancillary And picking we restructuring,

Matthew Blair

Okay.

that range low So for coming means down to $XX million QX?

David Lamp

mean I a pretty the It charge. $XX for number. should was million onetime good sure be a

Dane Neumann

the was other That income.

David Lamp

thing money, other continues rest be does a it's couple should to -- of bit that's never was other -- other repeat Tell to going income, goes us is -- it restructuring after but there. and -- to not But do expense. going That stock that, go or to was a it of that's than Hopefully, our the it of us that's That how does. going quarters. going only it itself, but The stock-based. hopefully. another the where impact back you to little expect to to up. it that's cost in what impact. going But where onetime tell unless it But is

Matthew Blair

helpful. Very question. And last then Okay.

But on current a mean really curve the of as I focus has moved up lot XXXX well. diesel cracks. So the

product on? just so and and any product you hedging sort how start wondering crack crack hedges And be of looking whether might layer at if to any that you're appealing

David Lamp

at time, -- and the do that we occasionally No, a of have volume. look our percentage certain we do we all

were the course, where some them to if dated. crack low compared week, it's backward today. they would locked last But they -- in And you are of of have heavily

$XX, you're about The looking first 'XX could even was 'XX, out, and And at like do in into back those $XX it X not the I that months and numbers. you down was think said NYMEX. are you actually, 'XX even very group strong

say I do very that prices. So don't history. at high the numbers yet, do those are if anything or attractive always for I we'll but I high But look best think know cure that prices Whether not we'll you is you're...

Operator

like management the We floor over have comments. back time. for no this now further I to turn would to closing questions at

David Lamp

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

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

Operator

this Ladies does teleconference. today's and conclude gentlemen,

for Thank at You may your and you participation, disconnect your day. time. have lines wonderful a this

CVR Energy (CVI) 3 May 222022 Q1 Earnings call transcript