CVR Energy(US:CVI)2019-02-22 01:18Financial Data and Key Metrics Changes - Consolidated net income attributable to CVR Energy for the full year of 2018 was $289 million or $3.12 per diluted share, compared to $235 million or $2.70 per diluted share in the prior year [11] - Fourth quarter 2018 consolidated net income attributable to CVR Energy was $82 million or $0.82 per diluted share, compared to $200 million or $2.31 per diluted share in the fourth quarter of last year [11] - Adjusted EBITDA for the full year of 2018 was $825 million compared to $406 million in the previous year [11] Business Segment Data and Key Metrics Changes Petroleum Segment - Adjusted EBITDA for the Petroleum segment in Q4 2018 was $172 million, compared to $60 million in the same period of 2017 [17] - The combined total throughput for Q4 2018 was approximately 221,000 barrels per day, compared to 205,000 barrels per day in Q4 2017 [13] - Realized refining margin excluding inventory valuation impacts was $17.47 per total throughput barrel in Q4 2018, compared to $7.46 in the same quarter of 2017 [17] Fertilizer Segment - For the full year of 2018, CVR Partners reported operating income of $6 million and adjusted EBITDA of $90 million, compared to operating losses of $10 million and adjusted EBITDA of $67 million for the full year of 2017 [22] - For Q4 2018, CVR Partners reported net sales of $98 million and adjusted EBITDA of $33 million, compared to net sales of $78 million and adjusted EBITDA of $8 million for the prior year period [23][24] Market Data and Key Metrics Changes - The Group 3 crack spread averaged $18.48 per barrel in Q4 2018, compared to $19.96 in Q4 2017 [18] - The WCS differential to WTI widened by approximately $8.00 per barrel compared to Q4 2017, peaking at $50.75 under WTI in October [19] Company Strategy and Development Direction - The company aims to be a top-tier North American petroleum refining and fertilizer company, focusing on safe and reliable operations, superior financial performance, and profitable growth [28] - Strategic objectives include improving environmental health and safety, expanding crude gathering and logistics, and increasing biodiesel blending [30][31] Management's Comments on Operating Environment and Future Outlook - Management sees favorable market themes for 2019, including GDP growth, strong gasoline demand, and favorable spreads due to shale oil production [29] - The company is well-positioned for 2019 and beyond, with a focus on operational efficiency and strategic project development [30] Other Important Information - The total consolidated capital spend for the full year 2018 was $102 million, with an estimated total consolidated capital spending for 2019 to be approximately $210 million to $240 million [25][26] - The company ended the quarter with cash of approximately $668 million on a consolidated basis [26] Q&A Session Summary Question: M&A Environment - Management noted that the bid-ask spread has narrowed somewhat, and CVR Energy is looking for consolidation opportunities while streamlining operations [38] Question: Crude Sourcing and Project Optionality - Management indicated that the additional barrels gathered are primarily SCOOP and STACK barrels, which provide a margin benefit over Cushing common crude [41] Question: Ownership in UAN - Management expressed that they do not foresee increasing their ownership in UAN but recognize it as undervalued [45] Question: EBITDA from Midstream Activities - Management estimated that approximately $60 million to $75 million of EBITDA comes from traditional logistical MLPable assets [46] Question: Unrealized Hedge Gains - Management confirmed that the unrealized hedge gains of $37 million are included in the refining margins and EBITDA [47]