CVR Energy Inc.

Greetings, and welcome to the CVR Energy third quarter 2020 conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Richard Roberts, Senior Manager, FP&A, and Investor Relations. Thank you, sir. You may begin.

Thank you, Christine. Good afternoon, everyone. We very much appreciate you joining us this afternoon for our CBR Energy Third Quarter 2020 Earnings Call. With me today are Dave Lamp, our Chief Executive Officer, Tracy Jackson, our Chief Financial Officer, Dave Landreth, our Chief Commercial Officer, and other members of management. Prior to discussing our 2020 Third Quarter results, let me remind you that this conference call may contain forward-looking statements, as that term is defined under federal securities laws. For this purpose, any statements made during this call that are not statements of historical facts may be deemed to be forward-looking statements. Your caution that these statements may be affected by important factors set forth in our filings with the Securities and Exchange Commission and in our latest earnings release. As a result, actual operations or results may differ materially from the results discussed in the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise, except to the extent required by law. This call also includes various non-GAAP financial measures. The disposures related to such non-GAAP measures, including reconciliation to the most directly comparable GAAP financial measures, are included in our 2020 third quarter earnings release that we filed with the SEC and form 10-Q for the period and will be discussed during the call.

With that said, I'll turn the call over to Dave. Thank you, Richard. Good afternoon, everyone, and thank you for joining our earnings call. Yesterday, we reported the third quarter consolidated net loss of $108 million. and a loss per share of 96 cents. EBITDA for the quarter was a negative 39 million. Narrower crack spreads, elevated RIN prices, and a decline in our investment in DELIC all impacted our results for the quarter. In light of the ongoing challenges to our business presented by the pandemic, preserving the balance sheet remains a key focus. As a result, the Board of Directors did not approve a dividend for the third quarter of 2020. The Board thinks the Winnie Wood renewable diesel project that I will discuss shortly and potential acquisition opportunities could offer better returns to shareholders. For our petroleum segment, the combined total throughput for the third quarter was approximately 201,000 barrels a day, as compared to 222,000 barrels per day in the third quarter of 2019. We experienced some weather-related power outages at both facilities in August that modestly impacted our throughput rates for the quarter. Total throughput was also constrained by NAPTA processing capabilities, as tight crude differentials have favored running a very light crude slate. Across the board, benchmark crack spreads and crude differentials deteriorated significantly from a year ago. The Group 3 2-1-1 crack averaged $8.34 per barrel in the third quarter as compared to $18.30 per barrel in the third quarter of 2019, a decline of nearly $10 a barrel. The Brent TI differential averaged $2.42 in the third quarter compared to $5.59 per barrel in the prior year period. The Midland Cushing differential was $0.13 per barrel over WTI in the quarter, compared to $0.26 per barrel under TI in the third quarter of 2019. And the WCS to WTI differential was $9.82 per barrel, compared to $12.59 per barrel for the same period last year. Our light product yield for the quarter was 99% on crude oil processed. Our distillate yield as a percentage of total crude oil throughputs was 43% in the quarter compared to 45% in the prior year period. In total, we gathered approximately 124,000 barrels per day of crude oil during the third quarter of 2020 as compared to approximately 127,000 barrels per day for the same period last year. While production volumes in our gathering regions fell significantly in the second quarter with the drop in crude prices, those volumes quickly came back as prices recovered to around $40 a barrel. Our current gathering volumes are over 120,000 barrels per day. In the fertilizer segment, we had strong ammonia utilization at both facilities of 97% at Coffeyville and 99% at East Dubuque. Although fertilizer prices remain soft, year-over-year sales volumes were higher for both ammonia and UAN, and we've made additional progress in our cost savings initiatives. Weather conditions have been favorable, and with the harvest largely complete, we expect solid demand for ammonia for the ammonia fall run. I would also like to highlight some of the environmental achievements announced by CVR partners recently. The Coffeyville Fertilizer Facility recently certified its first carbon offset credits for reducing nitric oxide emissions at one of its acid plants. The East Dubuque Facility has already abated the majority of its nitric oxide emissions over the past five years. Between the two plants, CVR Partners is now able to reduce its carbon dioxide equivalent emissions by over a million metric tons per year. Now let me turn the call over to Tracy to discuss additional financial highlights.