CVR ENERGY INC Q3 FY2024 earnings call

• Operational Challenges: Third quarter results impacted by unplanned downtime at facilities (partially due to external power outages), unfavorable RFS mark-to-market, and negative inventory valuation. - Dividend Suspension: Board suspended quarterly dividend to preserve cash due to near-term cash needs and challenging refining market. - Petroleum Segment: Difficult operational quarter with multiple plant interruptions, Group 3 cracks down from prior year, RIN prices declined but increased from prior quarter. - Fertilizer Segment: Strong demand for ammonia and UAN, higher prices and lower costs drove adjusted EBITDA increase. - Renewable Diesel: Wynnewood unit had first full quarter with pretreater, discussions ongoing on converting to 100% SAF. - Balance Sheet: Ended quarter with consolidated cash balance of $534 million, total liquidity ~$713 million.

Petroleum segment: Third quarter 2024 combined total throughput was approximately 189,000 barrels per day, crude oil utilization was 85% (vs 95% over past five years), lost profit opportunity was $23 million ($13 million related to external power issues). Group 3 2-1-1 benchmark cracks averaged $19.40 per barrel, RIN prices ended the quarter at approximately $0.74 on an RVO weighted basis. Adjusted EBITDA was a loss of $35 million, direct operating expenses were $5.72 per barrel. Fertilizer segment: Both facilities ran well with consolidated ammonia utilization of 97%, adjusted EBITDA was $36 million, driven by higher market prices for ammonia and UAN and lower feedstock and operating expenses.

• Fourth Quarter 2024: Petroleum segment estimated throughput 200,000-215,000 bbl/day, direct operating expenses $100M-$110M, total capital spending $38M-$42M. Fertilizer segment estimated ammonia utilization 92%-97%, direct operating expenses $60M-$70M, total capital spending $19M-$23M. - Full Year 2024: Estimated consolidated capital spending $170M-$195M (reduction from previous estimate), turnaround spending $50M-$60M.

• RFS Issues: EPA's handling of small refinery hardship exemptions is problematic, violating law and causing financial impact on small refiners like CVR Energy. - Operational Downtime: Unplanned downtime at facilities led to lost profit opportunity of ~$23 million in third quarter.

Q: How should we think about the go forward for the dividend and resuming it?

A: Board suspended dividend to preserve cash, will look at resuming when market conditions improve.

Q: Thoughts on non-core asset sales and opportunity set?

A: Considering midstream assets with ~$80M EBITDA, no new news on UAN.

Q: Potential to file insurance claims on downtime?

A: Recovered some money, cost from PP&I ~$25M but exact amount not known.

Q: Interpretation of access to capital markets and gathering system?

A: Assessing options, gathering system could be monetized but not first choice.

Q: Updated thoughts on acquisitions?

A: Continue to look for accretive opportunities to diversify portfolio.

Q: Hedging program in 4Q?

A: Crack swap hedging closed in 2Q, will roll off through 4Q and 2025, no significant material hedging planned.

Q: Refining macro and recovery path?

A: Market oversupplied, need refining capacity closures, EV penetration and efficiency affecting demand.

Q: 2025 CapEx and turnaround timeline?

A: Turnaround starts late Feb, ~45 days, crossing first and second quarters; CapEx budgeting ongoing.

Q: Thought process on converting Wynnewood RD plant?

A: Continue with renewable diesel strategy as it's profitable, focus on catalyst life and RINs margin.