CVR Energy (CVI) 21 Feb 202019 Q4 Earnings call transcript

Greetings, and welcome to the CVR Energy, Inc. fourth quarter 2019 conference call. At this time all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. [Operator Instructions].

conference recorded. this reminder, a is being As

It Jay and Finks, my pleasure Treasurer. your host, to introduce Vice you. is now Thank President of Finance

You may begin.

of very us Thank Chief appreciate XXXX Financial Jackson, our our earnings management. today Landreth, CVR everyone. Chief Good me you, quarter Chief We Officer; With and Dave Michelle. Energy fourth Dave you afternoon other this Commercial our are joining call. for Executive our afternoon, Tracy members much Officer Lamp, Officer;

our may discussing and term quarter statements, to securities year Prior XXXX that fourth federal that results, full you laws. remind this as is under let contain me defined conference call forward-looking

to the similar expressions this anticipates, For that statements. facts statements and are be this words plans, Without expects to not intended deemed historical forward-looking the limiting outlook, any purpose, statements. made believes, foregoing, during forward-looking identify call of are be statements may

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

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

our the including in also yesterday after includes included SEC the to reconciliation most we market. measures, fourth related disclosures measures filed directly release non-GAAP are that call This GAAP the such various non-GAAP The quarter financial closing to with comparable financial earnings measures. XXXX

Executive to over Dave, the Chief that With turn said, I'll Officer. call our

Dave?

a the everyone, as the like discussion our you an our of discuss well accomplishments earnings earlier CVR afternoon, XXXX, opportunity as the with Good to in our brief I'd year. thank and Jay. the joining Hopefully, quarter, for to then you had begin today today. performance earnings and Partners operating call call listen for to call. you, for Thank

year to by for strategic year-over-year successful XX% I plants. reduction declined followed performance another incident in happy XXXX. in a the was handful Last for XX% health in several improvements year, safety by company, significant report and outlined for CVR rate recordable XXXX I'm Total Energy. at all initiatives XXXX, accomplishments and a environmental of XXXX including of

Tier by X our occurrences process in on underutilized program declined including cash The XXXX. reduction Board declined million. maintained increase share XX% our quarterly by and Cushing $X closed sale XX% of million of as after for X% of safety commitment $XX events to cash environmental we to of dividend. planned a XX% authorized return with a tank We our gain in for shareholders repurchase a farm and our consideration inventory, assets million, of $XXX a a

an crudes averaged segment our on and our regional per versus of shale Some approximately include increase while the throughput Midland specific oil Petroleum oils. $X.XX barrel. specific Cushing crude and accomplishments quality crude oil of to to gathering adjusted our by Cushing The WTI advantage reliance XX% common $X.XX -- typically in reducing

repositioning at project XX% than by as a XXXX reformer well we of replacement benzene to both in completed the of in compared gasoline more catalyst our result increased a As XXXX. premium of have March, production refineries, as

biodiesel gallon X across internal to We our increased XXXX. $X.XX refinery XX,XXX increase approached compared Our by premium average. blending per XX% full the for in XXXX over averaged gasoline generation over by our premium production barrels approximately in year. gasoline both subgrade racks day December, Group an of XX% per RINs The further

East Mark we Board a today, per -- the Pytosh the Dubuque in The unit and in and our levels Fertilizer project, achieved paid turnaround following were urea, CVR our December. the capture of planned distributions ammonia segment CEO, during safely And, $X.XX year rates. that XXXX. the expect Board approved record project will production Total completed Isomerization plant. at Partners' reliability the fall accomplishments cash improve approved the we the at facility was expansion Coffeyville which announced at Earlier for in and Wynnewood the further

we year fourth reported quarter results. Yesterday, CVR full Energy's and

income on basis. For quarter and XXXX, diluted improved was results year a $XXX for year-over-year EBITDA million year in $X.XX. million. of was full was income segments quarter We million consolidated of and consolidated and earnings were were Fourth share $X.XX. per per $XXX earnings for million the the net diluted $XXX share business $XX posted our both the net was

XXXX quarter EBITDA the throughputs, segment, sales fourth increased despite be margins segment. of the for achieved fertilizer which total profit year of Petroleum Higher spreads cash our shareholders for and bringing the drove to X X. $X.XX record opportunities. paid crack rates the shareholders return and the and on March dividend volumes $XXX driven per year was lost cash capture dividends in through share, of improvement Fertilizer higher by improvement prices sales In announced $X.XX, will the to We lower to higher million. approximately refining paid total We the March fewer

of share Our an yesterday's represents dividend $X.XX on industry-leading based dividend close. current X% over per yield annualized of

for our Now, each speak to of fourth I'll business some of the highlights quarter segments.

quarter total quarter day per of day barrels barrels compared the quarter, the for the combined XXXX. was as the per of Petroleum 'XX XXX,XXX to approximately XXX,XXX fourth the fourth in For throughput segment, fourth

from due the $XX.XX XXXX. start-up quarter of 'XX, The for Group the averaged have fourth the fourth and spread compared to primarily $XX.XX tightened quarter compared year of a to crude in differentials levels, to Domestic pipelines barrel X:X:X crack ago new the XXXX, per in per fourth the of compared to $X.XX The of $X.XX quarter fill barrel in averaged Coast. XXXX. differential quarter Midland Brent-TI Gulf crude of the fourth to to Cushing line

the quarter to in premium Cushing to largely barrel result $X.XX compared to discount WCS per of The Midland Cushing compared with quarter 'XX. Midland The the the production curtailment turned last of The continued $X.XX per differential for government. $XX.XX barrel by imposed averaging over barrel WCS in negative a per per barrel fourth tightening is period same $XX.XX was differential the Alberta differential the of WTI of year.

the Light quarter was product for on crude XXX% processed. yield

as yield distillate XXXX, in crude of for in to compared a prior throughputs total XX% Our XX% the year. fourth quarter the oil was percentage

one the yield rank continues refiners. the highest among distillate to of as independent Our

In gathered XXX,XXX total, we quarter day approximately compared per the in to per barrels fourth XXX,XXX fourth the quarter, barrels day of 'XX. during

per records crude During quarter, November. we of gathered reached oil -- the barrels in XXX,XXX new approximately volumes day for

Fertilizer generate the the 'XX. fourth The And at operated of Coffeyville's performance XX% with at operating completing the ammonia Dubuque compared to facilities quarter in East unit after strong facility. finished both at planned turnaround its XX% quarter planned available segment adjusted for XX% in quarter Dubuque, at XX% ammonia operated Partners quarter for unit the CVR fourth East fourth the the of distribution did to not utilization, turnaround, 'XX. XXXX. for cash of compared

our turn to Now, Tracy, to discuss the financial highlights. call over let me

afternoon, Dave, you, everyone. and good Thank

As in we share share quarter $XXX of This and of for income Dave diluted $X.XX of EBITDA of of compares earnings XXXX. of $XXX mentioned, to fourth the diluted EBITDA income million reported net million. per the $X.XX quarter fourth net of of XXXX, earnings per and million, $XX million, $XX

XX% the fourth quarter XX% for for rate of to tax effective the compared was prior year. The XXXX

quarter XX% reduction to was our tax primarily of tax rate transaction equity of XXXX, and for as year effective to year was the The interest of increase rate completed prior effective a the the the in XX% full period. due For full compared fourth non-controlling our XXXX year result January in XXXX.

as tax The in tax, state in changes currently to as well income estimate rate the due XXXX CVR income increase tax in We subject to items. be to effective was an our Partners and certain also year effective tax XX%. elevated full XXXX fourth quarter losses rate approximately in

X million the and to period EBITDA $XXX $XX.XX our in in XXXX. XXXX fourth million was narrower differentials. In the quarter mainly excluding The crack inventory the $XXX quarter $X.XX in EBITDA result for same of year-over-year The compared was crude XXXX, compared for spreads barrel XXXX. throughput refining same margin to quarter in Petroleum valuation segment's total impacts of fourth lower segment's Petroleum oil of was decrease of the the Group

increase of negative period to a during year. crude impact This barrel the last inventory generated flat of barrel $X.XX positive quarter per price in XXXX. same oil impact during per $X.XX compares quarter valuation fourth the The through a the

gains Excluding capture impacts losses, XX% derivative compared XX% year approximately the rate is and XXXX of inventory period. unrealized the to prior and quarter for valuation the in fourth

of approximately which XXXX crude Total for open We totaled by $XX of estimate quarter oil purchases million, lost capture for million profit opportunities open and negatively X% impacted scheduled with delivery. our quarter $XX in fourth losses that oil, fourth derivative the crude associated commodity instruments of derivative of Canadian unrealized includes losses future are rate the XXXX.

fourth expense per of of year gains derivative in $XX the quarter included quarter million $XX fourth to was The had gains RINs million which the RINs year. million as total last barrel $XX $XX throughput, of the compared XXXX unrealized with of million. $X.XX or expense of full we XXXX, same line XXXX period in million, In was $XX total in XXXX.

Court expense $XXX to by recent significant biodiesel biodiesel market a Based and of production will the prices caused to of tax RINs less recent the been RINs million blender's ruling that the estimates RINs we current The Circuit XXXX be rates, extension the million. $XXX has of price in our ethanol affected estimate Tenth upon although increase have RINs of credit. for

expenses $X.XX were expenses barrel and of lower activities, total quarter associated the the of offset per services. barrel compared quarter was increase fourth outside throughput operating fourth higher for in primarily personnel to direct of segment's material Petroleum The for somewhat maintenance per XXXX by $X.XX spending The in expenses as with utilities increased and XXXX.

reported $X.XX of net $XX year million compared unit. common income loss $X million a to full year XXXX $XX operating Partners $XX the or of and $X.XX and million unit. loss a common net full of per For operating or million income of is CVR per This XXXX,

due year. the XXXX, $XX full million and sales was volumes. in respectively, the XX% to pricing improved netback compared $XXX prior of million the XX% increased year with and The primarily EBITDA EBITDA for for ammonia XX% along approximate was year-over-year increase UAN ammonia to both for

XXXX. fourth per This EBITDA fourth fourth in the income $XX of and a and million of the $X net prior operating of of was for net million period. loss $X loss common operating common a $XX Partners to the to million for $X.XX quarter XXXX, million unit. quarter year of XXXX, For $X the $XX compared quarter compared is million of unit CVR or million reported $X.XX or per losses of

result as decline and quarter Year-over-year fourth as weather pricing the turnaround as well UAN in in challenging driven quarter, a the lower EBITDA expenses incurred conditions. by in of sales was volumes

total, this Total consolidated $XX capital million from Of which million in segment included $XX $XXX million environmental of $XX XXXX including the spending maintenance the million, capital $XX spending $XXX the and and Fertilizer was year million, comprised and Petroleum Petroleum for the segment. Fertilizer from million full in the segment. segment

below for million, of $XX consolidated a shifting expected subsequent million estimate project XXXX the in $XXX to and of the to result spending for as capital $XXX spending Actual certain to years. came expectations million capital. maintenance be total in We be $XX to is year the which million capital environmental

to turnaround excludes spending, the which will million planned turnaround includes of ahead turnaround for $XXX million Expected planned XXXX. year. estimate Wynnewood the This we at for refinery some XXXX in spending be spending the $XXX

improving January million $X year approximately the Our cash remained includes rate additional to quarter $XXX notes the interest in a of cash end, position. $XX offering senior with million due to the balance we million ended approximately the on X.X liquidity segment. XXXX, which After consolidated position in Fertilizer basis, $XXX million repaying existing completed our as unsecured Subsequent notes a added senior cash we billion X.XX%. $XXX strong further of of we sheet, at blended of

XXX,XXX for XXXX segment, Looking of reflecting first total Petroleum day, per turnaround Coffeyville. at the estimate the of be throughput to XXX,XXX quarter ahead planned for the barrels impact our we to

to operating be expenses range $XX million total spending million between expect and be Turnaround in and the and first to million between We $XX million. is $XXX total for $XXX spending million $XX million. $XX capital direct expected quarter to

our be For and to ammonia rate Fertilizer estimate XX% utilization XXX%. we segment, the between

expect to We million. to $XX operating million, $X million and direct between $X excluding be spending inventory $XX million expenses total capital impact be to and

With I'll to you. the back that turn Dave, call

year Energy. was Tracy. a In for XXXX Thank CVR you, successful summary,

performance petroleum XXXX, For American company, mission reliable North growth. measured refining top-tier and a financial remains as safe superior fertilizer and our by be profitable to operations, and

demand. having typical cracks the weather at coronavirus Looking start to top soft been of Year. reduced warm XXXX, worldwide have New -- a has that, On and are the has the

see traveled, we in and constructive our demand number trends rates driving response Despite these cut for a increases the industry's GDP miles drive prices vehicle in been low are has X% low runs. unemployment year. up the workforce The gasoline that growth, factors, of to product participation positive market with XXXX. refined outlook

production million in barrels oil day XXX,XXX and production to XXXX. the grow. and U.S. over X.X oil XXX,XXX shale to in per expected from U.S. oil Shale increase XXXX another continue major barrels is by from basins per exports Crude to increased day

crude As the X for domestic have exports per over averaging day million the X volumes have from oil barrels barrels nearly increased, XXXX, production a day million U.S. in the year. increased

the to have a the Midland the believe continue to differential new Coast prices a in Brent the winter. to abundance for refining the shale with our narrowed industry drives a has sustained incremental pipeline U.S. general. the and of WTI. oil, in fertilizer even Although advantage capacity, addition low key crude differentials need and in natural new production between gas Gulf The we natural and businesses export is and light activity Cheap driven gas of to

expected the are not million increase maintenance RVP although are plantings million they're this inventory product elevated, spring of this for acres up upcoming and less and acres. alarming Corn the time to XXXX clean picture. of million the year, year, inventories level to XX heavy And to than above should XX currently global change spec the XX

period gasoline The over credits XXXX, with ago. year. from averaging impacts the X a in X recently, showing octane $X,XXX year of far in for gasoline Tier well Prices so the gallon as increase a Tier marketplace above XX% were $X.XX same as spreads are a up last

currently are producing at credits below gasoline generating XX sulfur We PM refineries. our and both

IMO tighten from of the market. marine As expected into diverted inventories. with is crackers further cat product fuel away and the implementation the should XXXX, reduce VGO This being gasoline

Canadian some future pipeline Western additions. be on crudes has capacity, been pipeline although progress finally, by capacity constrained to And continue made takeaway

make are suite and projects we our forces We dynamics. well continue these regard progress all to believe we capitalize improving to of income intended in are to positioned market these of on that on

remains on ability further increase our focus our premium and our yields Our expand liquid feedstock gasoline, increasing optionality. to make

capital million gave Total complete project to CX/CX of end shale project our developing gasoline by Wynnewood our improve approved, increase Our Coffeyville unit capture more XXXX. We're at refinery. crudes. a final spending Coffeyville's leverages new capability at $XXX the expect process estimated which similar to project this efficiently to in light oil our Isom Board approval efficiently This Wynnewood our natural project will run and for oils is and project. the refinery, improve operation the process the light rates. Isom we at an and shale will If this ability to project

in replacement capability. use the And finally, the If and our gasoline unit. at catalyst production and we -- of evaluate to project HF continue approved, acid premium catalyst eliminate alkylation Wynnewood octane the HF acid this increase at addition in would new to of

engineering the A returns and We this selection XX%. of than technology year these year. should by of of make a expect the the schedule projects second complete to each expect end greater in generate of currently We half

only We projects high also but also create believe returns. could potential this attractive return for improves future competitive our runway shareholder of not position,

our recent in could flexibility share repurchases addition other shareholders. capital Our the to distributions fund bond to financial to projects additional and required providing offering for funding acquisitions, potential provide these

on As last schedule the The XX of currently start we look days. turnaround XXXX, and week. to at to expected turnaround the to approximately next Coffeyville fourth refineries quarter expected XX is is is

WTI. barrel under per was have barrel Prompt X as $X.XX quarter-to-date $XX.XX WCS under spread follows. under barrel per by has was barrel quarter-to-month, market, barrel has $XX.XX WTI. differential Prompt averaged at yesterday. per X averaged averaged metrics Brent over per spread were crack per and The $X.XX -- Cushing the per The cracks $XX.XX TI Cushing $X.XX differentials Midland averaged at $X.XX barrel. TI WTL the WTI. barrel. WCS and Group Group cracks $XX.XX per are Brent Looking

RINs retroactive biodiesel from produced RINs in the credit The blenders' mixed averaged to beginning the and of prices. nearly some developments Recent and XX% by $X.XX XXXX, approval RINs biodiesel to of end direction the averaged Quarter-to-date have the windfall have quarter for fourth resulted a quarter. have of refineries the biodiesel ethanol in $X.XX. declined

properly the few has The Court RINs. four However, ethanol Clean to under RIN small the particularly recent increase, exemptions that court to ruling in refiners renewable Circuit granted a caused Tenth from favor under standard of associations Air obligations related prices Act. were ruled fuel the to trade

Let Tenth trade most of standard standing the from mention the renewable granting me protecting the harm to small fuel important not refineries wrong. the with disproportionate with all Circuit these regulation, got We be standard. fuel renewable misreading clear. compliance by to Starting it associations, believe part the caused

regulation, its quote the for may directly no been think disproportionate the RFS any time "A refinery there small these refinery harmed small economic exemptions. an from exemption that proof for trade administrator by have To petition is positively We at of hardship." the extension associations reason of these refinery

In exemptions. has the despite ethanol issuance fact, blended the increased of year every of volume

intend well fight authority. and conflicts necessary Tenth sets believe ruling policy, the with other ruling to as and all the Circuit with this exceeds going which this We national the rulings forward as both regulations, resources

questions. With we're operator, ready for that,

Rao question Instructions] you. Thank question. [Operator comes from Please your Prashant Our with proceed line with first the Citigroup. of

for Hi, acquiring seeing the now expected bid-ask you XXXX this Rockies is given structure? the market. capital tailwind Prashant, January the sense make and Are you your that shown as in haven't for Would we're attractive an asset IMO Joe more past on up M&A spreads?

bit. think out I there know I'd that they bid-ask of attractive we that. what say coming I'd But valued. full are are don't more assets available a call in the I spread Most spreads. are see

an them something -- really value synergies to some to any we angle add which of or your existing to have work. business with you have could to that make So,

is, segment you bit got the we market weak. the speak in Can the Okay, it. a a seems that long-term profitability question dynamic my And second bit think and how about about Fertilizer segment? little should

segment up boom sort of Well, of that the say, It's still, recovery cycle be chemical to It's needs cycle. Demand strong had I the and in have the I we material a plenty that 'XX-'XX still of but worldwide that be would happened timeframe. to bust consider some in there soaked that Fertilizer in there's -- return like phase to a however a of you and margins out boom business. is past. really be to sold see bust typical before

the low other the it it's going forward. On of being a it, side business and to natural and relatively we is pretty for gas prices, steady that by expect benefiting continue us

Thank you.

from Our question proceed Sachs. the Goldman Please comes your with with Neil next Mehta line question. of

had afternoon the is than we what to from Yes, I here RINs team. your to Can stay the just on built modeled that And a Dave, prepared into DX XXX price? XXX that's the higher there remarks. you number? then, through good a with are is the in. embedded exemption refinery small little assumptions wanted walk topic there the in And extending, of number us probably

is the waiver, that to project look potential any do Yes. Neil tend the but price current for without take and We year. forward full we what at

that So, comes number from. that's where

is price spot The where?

price XX.X is XX Spot blended roughly about today a basis. on --

year? And of the in balance through the that's what's embedded

right. That's

then… And Okay.

that's able million -- about -- of range. still what million course, which basic can off -- be internally, the Of $XXX moved past the years. we today our you -- million But to RINs that is do to has generate and Take somewhere generated $XX RVO $XX around of about math. off in up internally take is should the the you

is quarters? -- that the ratable across that And pretty Perfect.

Yes, generally.

years? catalyst how that of the of your just higher is law? prices expand little you a going And that on with more RINs And not you are the couple can Okay. over letter the was how that bit sends decision, you next the then, ultimately to feel consistent court decision be comments, the the concerned this

waivers to two took this to from I of against the refinery frankly factors up elected importantly, has it is put not was put intended waivers But I on law, a face that think sure RFS from standpoint save going the don't large Tenth EPA you're the Well, ruling, in there's It and regulation. to directly which reallocation exemption in, the to I'm more try of the never if phase at refiners, know, there Circuit in out in The small value small standard was number it the in small refinery goes there. renewable It's it refineries one. that. you fuel unfair. business.

may there where you putting there point just these value, turnarounds goes where is do run And a $X smaller a RINs $X, can't to it of I between if other if it. sustaining and of free know refineries you if afford to The and right to you you, after all to capital be go a cash is, don't lot -- certain out They flow this and things zero business. the have start business.

by the this bottom against the put that that just way. and in in So, goes I'll safety was the small protect refiners every a to is ruling legislators relief it line

And base not of we embed element small into on? your what conservatism now the guidance, decision from that that case refinery an just is is should exemption or the to

after the because over way the that the it's vintage we that was actually given useless period ended that compliance this pain last in 'XX is a to stranded tend our that EPA incur is We've what always up year hurts is that us RINs in so 'XX. We to And like cases. lot waivers, issuing that we of assume we don't late with an business of a these and run -- exemption. in were was were get

that going with harm. We're litigation suing because the for have of EPA fact. actually now And that we on

you they've your some cover. they and time yourself these exemption expired lot to by in net the in position short even risk issue going around to it's the that put of cover infeasible So, waivers. -- because business without some I can't to cases And a really think the RINs even have you're plan do these

that is do just creates Washington is And business in whole bunch it. -- the of a uncertainty fix line. way to run to business it no bottom something it's the But needs to

the comments. appreciate I

I think reemerging. put we hoping RINs seems of behind all we were It topic like us. it's that this could

right vengeance. now come just back with It's

Dave. Thanks,

Yes.

you. Thank

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

a Coffeyville little digging turnaround, you on you will more during the the are elaborate what be and units for this down incurred Can the actually timeframe expenses which turnaround?

Well, turnaround a It's this major run. X.X-year Coffeeville. run, is for after years X.X

on So, refinery. we're basically every in unit the working

So, partial days. up. full lose various we'll production And of last days as for ramp at we'll least those XX units XX of we the in have start-ups back

And expect what's incur downtime? you to expense this the during

Well -- the between $XXX we're million spent turnaround, on $XXX we've already and million. estimating some but money

Wynnewood question follow-up quick unit. A Okay. on your isomerization

have between 'XX, million plan it over spend more it that sorry capex 'XX or split and that how $XXX to should some -- the 'XX years? to to you do million, versus next be the idea indicated you 'XX? close can is $XXX is 'XX us You give two we going If

design, heavily this next two to modulize our spend then fairly will year it the which between planning split means we're years. Well, be slow this and be will

'XX periods. and 'XX heavy So, will spend be

sensitivity And that? those of Like, and you the XXs, if what toward could what the Can $XX drive numbers? million, help of understand and more could At the put give sensitivity $XX lower into us more you number against million. things the us some those the go you time, around idea same is $XX some about return could $XX numbers million of million.

can is two for its basically yield liquid use premium and -- key in The get distillate And liquid but -- we the this not driver volume can also make. you premium it's ways. amount of Yes. only yield, you

your can liquid your yield premium make area rate. which in can capture improves improves reformer the or you and your more You cut either severe existing

-- wrong. are those real that could things the So, those the are go

we're it could prices the is there and/or it. of that's really, improve Tier really gasoline and higher benefit crude the spreads, of What which premium which good X liquid shortages octane yield the predicting because high make

there. are distillate prices always course, Of

you. Thank

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

capture retail something that Hey maybe Dave, Do good on I last of -- guys, of in they formed opportunity also them, months your maybe some terms in side. quite competitor, They you margin RIN the see afternoon. -- refinery one any the did do the venture JV a local help could that? think, guys that to for interesting. joint their in and several refinery that you

before, the Paul, up I it. and wholesale kind is me we on alternative An in And really It you've evaluating say activity. we Well, deal in find. been into everything. think being marketing frankly, would us on this investments year we had a we've heard ended as were that we And we not retail, close that jump-started joint to have pursue that successful bidder direction some to those like of continue ventures, can you mentioned. every --

markets to our Kansas goes deals. City, material in us. and a in Oklahoma yet. the look are -- been for of we big those penetration just of haven't of markets successful big for produce continue we directly a of -- each City, we It those all type have really And those for Tulsa, That what Mid-Con makes a lot lot us because sense of to

say price you the or successful, it's Is control you when the what's kind can say Dave, that it not that? the of just or hurdle? issue what is

Well, it's a factors, number of Paul.

XX -- combining a what, typically XX that know to multiple to compared you X.X at in traded do because is we and deals difficult neighborhood. somewhere As to a that it's business you're --

business. very compared for to the retail going base that any our are are businesses So, numbers these -- high

of multiple. quickly we or I don't So, you because you'd two one get asking did a be if why imagine higher them, spin you those off

it's capture and if very capture rates the and us, to circular can your to enhance margin there's strategic we argument us. that's and really So, not whether something our RINs, --

is a Right, fully do on desirable for think just that or this your the be the Fertilizer or back is better business, sustainable off OK. minority the to haul interest? current And long structure and you for you that structure consolidate bought

current valuation a it it to But from accretive that's the running be is to shareholders the just the be would be case. personally, better consolidated. of synergy. There not our has lot at Well, to company, and

ask there it a Let that another about -- entity Is mean I reason, in separate for where any the like then. current strategic in accretive, there be. strategic reason valuation way whether to as Is about forget today? it assume the minute it's are any them a structure, they me keep for will

think No, don't I so.

It's -- MLP be I for GP the the point are. be has to out to probably in structure occur. think -- for make fact, do of cycle anything right accretive We to and that saw to decision the they right But fallen of way it to has to that now. favor. that has the we're In them for the CVI disincentive

me. from question Final

You guidance gave also the number the the full year? perfect rough a Do for quarter, you and number. the have first capex

We but probably them. have Tracy has that somewhere,

capex, think XXX to read it, For I XXX. I

I the thought was he rate. saying

do A rate, it -- don't no. We

the for capex Yes, your also throughput the for rate the year year? and

have any other Paul. no turnarounds on We basis, other a planned planned or things

you think probably on ramp that can I So, up us assumption.

Right.

So days. of turnaround the is cost you XX-XX

right? into a this extend the quarter, bit So, will second little

will second in partially quarter. That's the be correct. It

capitalize terms but that in now. turnaround the seems you And that -- of, that

opex be shouldn't on your So, that the impacted? absolute level,

all at be much. shouldn't it Yes,

Your is denominator changing.

will that So, --

Right.

dollar absolute an on but change, will since you cost unit that. capitalize Your

true. that's Sure,

or expected? than expected Unless is prolong that than the expense higher longer

correct. That's

you. Thank

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

year-over-year. you slate you? declined quarter-over-quarter economic definitely coming regional shale regional half both mind uplift just also, picked Hey. you Good to on in the count over ran there it see keeping crude. rig of more down any barrels. Could the the shale And in for record than risk amount is past year, barrels these these It's STACK/SCOOP has your you noticed and and talk up now Dave. about I morning, a

Sure.

Let me first. second take the one

I pipes, maintain here. our the know seasonal -- of bulk I January, The we production with aligned remarks prepared think actually in still the is that a large out we to in increases effects. And don't specifically to we're -- any in XXX. we're coupled that get mentioned their direct go or gathered increase people that is my are taking projecting STACK/SCOOP I today SCOOP. that from area, of we've But the up, continues

winter wells it peaked that to gathered We XXX,XXX. to the January, impact muddy it, or gets your if at will But in us. get the or get do we snowy too You weather too a in trucking or effect something XXX,XXX.

So, in XXX,XXX November. in November,

much see our been saying to activities we can almost that's and has are that think else, They farming drill. as partners enjoy. have seasonal a anything you and So, going really continuing do decline, their to I they're slight there continue rigs as but active

and make as as they refinery a as of wheelhouse. light with are with WTL, So, second our cocktail pure fits They're WTL the crudes really it, that far well running these we barrel, the right at so, blend that well. in really heavy of a the with the that Coffeyville could the Wynnewood slate question, a WCS is part and trim. And

$X.XX $X.XX remains typical to with that's pick So, to a up dynamics our the market. $X, advantage this of see. continue sometimes. to even strategy moves we to It But the

Thank you.

for management, floor have We any over reached end back remarks. I closing to turn like the of would to the session. question-and-answer our

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

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

call today's concludes this you, Thank conference.

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