CVR Refining, LP (NYSE:CVRR) Q3 2018 Earnings Conference Call Transcript

Oct 25, 2018 • 01:00 pm ET

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CVR Refining, LP (NYSE:CVRR) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the CVR Refining, LP Third Quarter 2018 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)

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Jay Finks, VP of Finance and Treasurer. Thank you, you may begin.

Executive
Jay Finks

Thank you, Michelle. Good afternoon, everyone. We very much appreciate you joining us this afternoon for our CVR Refining Third Quarter 2018 Earnings Call. With me are Dave Lamp, our CEO; Tracy Jackson, our CFO; and other members of management.

(Forward-Looking Cautionary Statements)

This call also includes various non-GAAP financial measures. The disclosures related to such non-GAAP measures, including reconciliations to the most directly comparable GAAP financial measures, are included in our 2018 third quarter earnings release that we filed with the SEC yesterday after the close of the market.

With that said, I'll turn the call over to Dave Lamp, our CEO. Dave?

Executive
David Lamp

Thanks, Jay, and thank you for joining us for our earnings call. I'd like to begin the call today with a brief discussion of our financial and operating performance. Tracy will provide further details on our financial results and guidance for the fourth quarter, then I'll wrap up the call with progress on our strategic initiatives and objectives.

Our third quarter 2018 adjusted EBITDA was $221 million as compared to $139 million for the same period a year ago. Group three crack spread was $19.88 per barrel in the third quarter of '18, which is slightly lower than the third quarter of '17. As you recall, crack spreads in the third quarter of '17 were influenced by Hurricane Harvey.

The continued strength in the Group three crack spread was partially due to the improvement in the Brent-TI spread, which averaged $6.41 in the third quarter of '18 as compared to $3.97 in the prior period. Our refining margin per barrel of total throughput adjusted for FIFO averaged $15.41 for the third quarter of '18 as compared to $13.05 in the third quarter of 2018 -- 2017, excuse me. The realized capture rate was 78% in the third quarter of '18 as compared to 63% in the third quarter of '17. RIN expense in the third quarter of '18 was $20 million as compared to $64 million in the same period last year.

Operationally, both plants ran well, and we had minimal lost opportunities. The combined total throughput for the third quarter of '18 is approximately 219,000 barrels as compared to 214,000 barrels per day in the third quarter of '17. The third quarter of '18 -- in the third quarter of '18, the crude slate at Coffeyville was primarily comprised of approximately 7,000 barrels a day of WCS, 30,000 barrels per day of Midland crudes, 30,000 barrels a day of gathered crudes with the remainder being Cushing common. At Wynnewood, we sourced most of our crude from the SCOOP shale oil play.

In