CVR Energy Inc (CVI) 2024 Q2 法說會逐字稿

Greetings. And welcome to the CVR Energy Second Quarter 2024 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)

問候。歡迎參加 CVR Energy 2024 年第二季電話會議。此時，所有參與者都處於只聽模式。正式演講後將舉行簡短的問答環節。（操作員說明）

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Richard Roberts, Vice President of FP&A and Investor Relations. Thank you, sir. You may begin.

提醒一下，本次會議正在錄製中。現在我很高興向大家介紹主持人理查德·羅伯茨 (Richard Roberts)，他是 FP&A 和投資者關係副總裁。謝謝你，先生。你可以開始了。

Thank you, Christine. Good afternoon, everyone. We very much appreciate you joining us this afternoon for our CVR Energy second quarter 2024 earnings call. With me today are David Lamp, our Chief Executive Officer; Dane Neumann, our Chief Financial Officer; and other members of management.

謝謝你，克里斯汀。大家下午好。我們非常感謝您今天下午參加我們的 CVR Energy 2024 年第二季財報電話會議。今天與我在一起的有我們的執行長 David Lamp； Dane Neumann，我們的財務長；以及其他管理層成員。

Prior to discussing our 2024 second 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.

在討論我們 2024 年第二季的業績之前，請允許我提醒您，本次電話會議可能包含前瞻性陳述，因為該術語是根據聯邦證券法定義的。為此目的，本次電話會議期間所做的任何非歷史事實陳述的陳述都可能被視為前瞻性陳述。

You are cautioned that these statements may be affected by important factors set forth in our filings with the Securities and Exchange Commission and our latest earnings release. As a result, actual operation of the results may differ materially from 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.

請注意，這些聲明可能會受到我們向美國證券交易委員會提交的文件和最新收益發布中列出的重要因素的影響。因此，實際運行結果可能與前瞻性陳述中討論的結果有重大差異。我們沒有義務公開更新任何前瞻性陳述，無論是由於新資訊、未來事件或其他原因，除非法律要求。

This call also includes various non-GAAP financial measures. The disclosures lettered in such non-GAAP measures, including reconciliation to the most directly comparable GAAP financial measures, are included in our 2024 second quarter earnings release that we filed with the SEC in Form 10-Q for the period and will be discussed during the call.

此次電話會議也包括各種非公認會計準則財務指標。此類非GAAP 指標中的揭露訊息，包括與最直接可比較的GAAP 財務指標的調節，已包含在我們以10-Q 表形式向SEC 提交的2024 年第二季度收益報告中，並將在2024 年第二季財報中進行討論。

With that said, I’ll turn the call over to Dave.

話雖如此，我會將電話轉給戴夫。

Thank you, Richard. Good afternoon, everyone, and thank you for joining our earnings call. Yesterday, we reported second quarter consolidated net income $38 million and earnings per share of $0.21. EBITDA was $103 million.

謝謝你，理查。大家下午好，感謝您參加我們的財報電話會議。昨天，我們公佈了第二季合併淨利 3,800 萬美元，每股收益 0.21 美元。 EBITDA 為 1.03 億美元。

Our results for the quarter reflect the weakness in refining product tracks in the Mid-Con, in addition to the downtime and increased expenses associated with the fire at Wynnewood. We estimate total pre-tax impact of our second quarter results from the fire was approximately $50 million, which does not include the impact of any insurance recoveries that may be achieved in the future.

我們本季的業績反映了中部地區煉油產品線的疲軟，以及與溫尼伍德火災相關的停工和費用增加。我們估計火災對我們第二季業績的稅前總影響約為 5000 萬美元，其中不包括未來可能實現的任何保險賠償的影響。

We are pleased to announce that the Board of Directors has authorized a second quarter dividend of $0.50 per share, which will be paid on August 19th to shareholders of record at the close of market on August 12th. Our trailing annualized dividend yield, based on yesterday’s close price, is approximately 7%, the highest among independent refiners.

我們很高興地宣布，董事會已授權派發每股 0.50 美元的第二季度股息，該股息將於 8 月 19 日支付給 8 月 12 日收盤時在冊的股東。根據昨天的收盤價，我們的追蹤年化股息殖利率約為 7%，是獨立煉油商中最高的。

In our Petroleum segment, combined throughput, total throughput for the second quarter of 2024 was approximately 186,000 barrels per day and light product yield was 99% on crude oil process. Following the fire at Wynnewood in late April, we resumed operations of the number one crude unit within two weeks of the incident and the number two crude unit began operating in mid-June. Wynnewood is currently operating at normal rates.

在我們的石油部門，2024 年第二季的總吞吐量約為每天 186,000 桶，原油加工的輕質產品收率為 99%。4 月下旬 Wynnewood 發生火災後，我們在事故發生後兩週內恢復了第一號原油裝置的運營，第二號原油裝置於 6 月中旬開始運營。Wynnewood 目前正在以正常速度運作。

Benchmark cracks softened during the second quarter, with the Group 3 2-1-1 averaging $18.83 per barrel, compared to $32.03 per barrel for the second quarter of 2024. Average RIN prices for the second quarter of 2024 also declined from the prior year period and ended the quarter at approximately $0.69 on an RVO-weighted basis.

第二季基準裂縫有所緩解，第 3 組 2-1-1 平均價格為每桶 18.83 美元，而 2024 年第二季為每桶 32.03 美元。2024 年第二季的平均 RIN 價格也較上年同期有所下降，本季末以 RVO 加權計算約為 0.69 美元。

Regarding the RFS, we were thrilled with last week’s order from the D.C. Circuit vacating EPA’s improper denial of dozens of petitions of other refiners seeking small refinery exemptions. While we await the text of this opinion, the outcome mirrors the Fifth Circuit’s damning opinion last year vacating EPA’s denial of small refinery exemptions for Wynnewood and other refiners from 2017 to 2021. EPA has still not acted on those petitions despite eight months since their remand, and we intend to oppose the writ of cert they filed for the Supreme Court, we think the favorable D.C. action D.C. Circuit action should work in our favor.

關於 RFS，我們對上週華盛頓特區巡迴法院撤銷 EPA 不當拒絕其他煉油廠尋求小型煉油廠豁免的數十份請願書的命令感到興奮。在我們等待該意見的文本時，結果反映了第五巡迴法院去年的嚴厲意見，撤銷了 EPA 拒絕給予 Wynnewood 和其他煉油廠 2017 年至 2021 年小型煉油廠豁免的決定。儘管這些請願書已被還押八個月，但環保署仍未對這些請願書採取行動，我們打算反對他們向最高法院提交的證明令，我們認為有利的華盛頓特區行動華盛頓特區巡迴法院行動應該對我們有利。

As previously reported, we have a pending suit against EPA in the Fifth Circuit for the denial of our 2022 petition, and earlier this month we filed suit for their illegal failure to rule on our 2023 petition. We submitted our 2024 petition last week and the clock is ticking for EPA to act.

正如之前所報道的，我們在第五巡迴法院對EPA 提出了一項未決訴訟，指控其拒絕我們的2022 年請願書，而本月早些時候，我們又因他們非法未能對我們的2023 年請願書做出裁決而提起訴訟。我們上週提交了 2024 年請願書，EPA 採取行動的時間已經不多了。

We will continue to fight for small refinery exemptions for the small refinery exemptions of Wynnewood it deserves and also compel EPA to fix what we believe is EPA’s clear violation of RFS by allowing non-obligated parties to trade in and manipulate the brand market. The Supreme Court’s recent overturn of the Chevron doctrine may represent an incremental positive for our efforts, though the ultimate impact remains to be seen.

我們將繼續爭取小型煉油廠豁免，以爭取溫尼伍德小型煉油廠應得的豁免，並迫使 EPA 糾正我們認為 EPA 允許非義務方進行交易和操縱品牌市場的明顯違反 RFS 的行為。最高法院最近推翻了雪佛龍原則，這可能對我們的努力產生積極的積極影響，但最終影響仍有待觀察。

For the second quarter of 2024, we processed approximately 12 million gallons of vegetable fuel oil through the pretreater and the renewable diesel unit at Wynnewood, with throughput in the quarter indirectly impacted by the fire in April.

2024 年第二季度，我們透過溫尼伍德的預處理器和可再生柴油裝置加工了約 1,200 萬加侖植物燃料油，該季度的吞吐量間接受到 4 月份火災的影響。

The HOBO spread weakened slightly from the first quarter of 2024 with lower diesel prices and the D4 RINs remained depressed as a result of EPA’s continued mismanagement of the RFS program. As a reminder, our renewable diesel business is currently reported within our Corporate and Other segments.

由於柴油價格下降，HOBO 價差較 2024 年第一季略有減弱，而且由於 EPA 對 RFS 計劃持續管理不善，D4 RIN 仍然低迷。提醒一下，我們的再生柴油業務目前在我們的企業和其他部門中報告。

In the Fertilizer segment, both facilities ran well for the quarter with a combined ammonia utilization rate of 102%. Nitrogen Fertilizer prices were relatively consistent with first quarter pricing and we saw strong demand for nitrogen for the spring planting season.

在化肥領域，兩家工廠本季運作良好，合成氨利用率為 102%。氮肥價格與第一季定價相對一致，我們看到春季種植季節對氮肥的需求強勁。

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

現在讓我把電話轉給戴恩，討論我們的財務亮點。

Thank you, Dave. Good afternoon, everyone. For the second quarter of 2024, our consolidated net income was $38 million, earnings per share was $0.21 and EBITDA was $103 million. Our second quarter results include unrealized derivative gains of $17 million and an unfavorable inventory valuation impact of $1 million. Excluding the above-mentioned items, adjusted EBITDA for the quarter was $87 million and adjusted earnings per share was $0.09.

謝謝你，戴夫。大家下午好。2024 年第二季度，我們的合併淨利潤為 3,800 萬美元，每股收益為 0.21 美元，EBITDA 為 1.03 億美元。我們第二季的業績包括 1700 萬美元的未實現衍生性商品收益和 100 萬美元的不利庫存估值影響。排除上述項目，本季調整後 EBITDA 為 8,700 萬美元，調整後每股收益為 0.09 美元。

Adjusted EBITDA in the Petroleum segment was $37 million for the second quarter with the decline from the prior year period primarily driven by lower product cracks in Group 3 and reduced throughput volumes due to the downtime at Wynnewood.

第二季石油業務調整後 EBITDA 為 3,700 萬美元，年減主要是由於第 3 組產品裂縫減少以及 Wynnewood 停工導致吞吐量減少。

Our second quarter realized margin adjusted for unrealized derivative gains and inventory valuation impacts was $9.81 per barrel, representing a 52% capture rate on the Group 3 2-1-1 benchmark.

根據未實現的衍生性商品收益和庫存估值影響調整後的第二季度已實現利潤率為每桶 9.81 美元，相當於 Group 3 2-1-1 基準的 52% 捕獲率。

RIN’s expense for the quarter, excluding the mark-to-market impact, was $40 million or $2.33 per barrel, which negatively impacted our capture rate for the quarter by approximately 12%. The estimated accrued RFS obligation on the balance sheet was $312 million at June 30th representing $471 million RINs mark-to-market at an average price of $0.66. As a reminder, our estimated outstanding RIN obligation excludes the impact of any small refinery exemptions.

RIN 本季的支出（不包括以市價計算的影響）為 4000 萬美元，即每桶 2.33 美元，這對我們本季的捕獲率產生了約 12% 的負面影響。截至 6 月 30 日，資產負債表上的預期應計 RFS 義務為 3.12 億美元，相當於以市值計價的 RIN 為 4.71 億美元，平均價格為 0.66 美元。提醒一下，我們估計的未償 RIN 義務不包括任何小型煉油廠豁免的影響。

Direct operating expenses in the Petroleum segment were $6.94 per barrel for the second quarter, compared to $5.46 per barrel in the second quarter of 2023. The increase in direct operating expenses was primarily driven by increased repair and maintenance expenses and lower throughput volumes as a result of the Wynnewood fire.

第二季石油部門的直接營運費用為每桶 6.94 美元，而 2023 年第二季為每桶 5.46 美元。直接營運費用的增加主要是由於溫尼伍德火災造成的修理和維護費用增加以及吞吐量下降所致。

Adjusted EBITDA on the Fertilizer segment was $54 million for the second quarter, with lower feedstock costs and direct operating expenses somewhat offsetting the decline in prices relative to the prior year period. Partnership declared a distribution of $1.90 per common unit for the second quarter of 2024. If CVR Energy owns approximately 37% of CVR Partners’ common units, we will receive a proportionate cash distribution of approximately $7 million.

第二季化肥業務調整後 EBITDA 為 5,400 萬美元，原料成本和直接營運費用的下降在一定程度上抵消了價格相對於去年同期的下降。Partnership 宣布 2024 年第二季每普通單位分配 1.90 美元。如果 CVR Energy 擁有 CVR Partners 普通單位約 37% 的股份，我們將按比例獲得約 700 萬美元的現金分配。

Cash provided by operations for the second quarter of 2024 was $81 million and free cash flow was $7 million. Significant uses of cash in the quarter included $76 million of capital and turnaround expenditures, $52 million for cash taxes and interest, $50 million for the CVI first quarter 2024 dividend and $13 million paid for the non-controlling interest portion of the CVR Partners’ first quarter 2024 distribution.

2024 年第二季營運提供的現金為 8,100 萬美元，自由現金流為 700 萬美元。本季的大量現金使用包括 7,600 萬美元的資本和周轉支出、5,200 萬美元的現金稅和利息、5,000 萬美元的 CVI 2024 年第一季股息以及 1,300 萬美元的 CVR Partners 非控股權益部分。第一季分佈。

Total consolidated capital spending on an accrual basis was $41 million, which included $33 million in the Petroleum segment, $5 million in the Fertilizer segment and $2 million for the RDU primarily related to the pretreatment unit.

以權責發生製計算的綜合資本支出總額為 4,100 萬美元，其中包括石油部門的 3,300 萬美元、化肥部門的 500 萬美元以及主要與預處理裝置相關的 RDU 的 200 萬美元。

Turnaround spending in the second quarter was approximately $3 million. For the full year 2024, we estimate total consolidated capital spending to be approximately $195 million to $220 million and turnaround spending to be approximately $55 million to $65 million.

第二季的周轉支出約為 300 萬美元。對於 2024 年全年，我們預計綜合資本支出總額約為 1.95 億至 2.2 億美元，週轉支出約為 5,500 萬至 6,500 萬美元。

Turning to the balance sheet, we ended the quarter with a consolidated cash balance of $586 million, which includes $48 million of cash in the Fertilizer segment. Total liquidity as of June 30th, excluding CVR Partners, was approximately $790 million, which was comprised primarily of $539 million of cash and availability under the ABL facility of $251 million.

轉向資產負債表，本季末我們的綜合現金餘額為 5.86 億美元，其中包括化肥部門的 4,800 萬美元現金。截至 6 月 30 日，不包括 CVR Partners 的流動性總額約為 7.9 億美元，其中主要包括 5.39 億美元的現金和 ABL 融資下的 2.51 億美元的可用資金。

Looking ahead to the third quarter of 2024 for our Petroleum segment, we estimate total throughputs to be approximately 200,000 barrels per day to 215,000 barrels per day, direct operating expenses to range between $95 million and $105 million, and total capital spending to be between $35 million and $40 million.

展望 2024 年第三季度，我們的石油部門預計總吞吐量約為每天 20 萬桶至 21.5 萬桶，直接營運費用將在 9,500 萬美元至 1.05 億美元之間，總資本支出將在 35 美元之間100 萬和4000 萬美元。

For the Fertilizer segment, we estimate our third quarter 2024 ammonia utilization rate to be between 95% and 100%, direct operating expenses to be approximately $53 million to $58 million, excluding inventory impacts, and total capital spending to be between $10 million and $15 million.

對於化肥領域，我們預計2024 年第三季氨利用率將在95% 至100% 之間，直接營運費用約為5,300 萬美元至5,800 萬美元（不包括庫存影響），總資本支出將在1,000 萬美元至15 美元之間百萬。

With that, Dave, I will turn it back over to you.

這樣，戴夫，我會把它交還給你。

Thanks, Dane. In summary, Petroleum market conditions remain challenging in the second quarter and we would characterize second quarter crack spreads as below mid-cycle levels. Part of the second quarter weakness in cracks can be attributed to high fleet utilization and somewhat lackluster refined product demand in the U.S. although demand in the Mid-Con has remained within five-year bands.

謝謝，丹恩。總之，第二季石油市場狀況仍充滿挑戰，我們認為第二季裂解價差低於週期中期水準。第二季裂痕疲軟的部分原因在於美國的船隊利用率較高和成品油需求有些低迷，儘管中部地區的需求仍維持在五年區間內。

Over the past week, we have seen an uptick in the benchmark cracks in the Mid-Con primarily driven by the tightness in the gasoline and diesel basis, likely due to unplanned downtime by other refineries in PADD II.

過去一周，我們看到中部地區基準裂縫增加，這主要是由於汽油和柴油基礎緊張所致，這可能是由於 PADD II 的其他煉油廠計劃外停機所致。

As I often say, the best cure for low prices is low prices. We are already seeing evidence of run cuts from more marginal refineries, particularly in Asia and Europe, due to the weakness in refining margins in those areas. We believe there is likely more to come in order to rationalize supply, which, along with an increase in product exports or an uptick in U.S. product demand on improved economic sentiment, could provide additional support for refining margins.

正如我常說的，解決低價問題的最好方法就是低價。我們已經看到更多邊緣煉油廠削減產量的證據，特別是在亞洲和歐洲，由於這些地區煉油利潤疲軟。我們認為，為了使供應合理化，可能會有更多的舉措，再加上產品出口的增加或美國產品需求因經濟信心改善而增加，可能會為煉油利潤提供額外的支持。

Turning to the Fertilizer segment, the spring planting season went well and demand for nitrogen was strong. In July, we completed both summer UAN fill and the fall ammonia prepay and saw solid demand for both products at prices that were above 2023 fill pricing, better than most were expecting. We currently have a solid order book heading into the fall and UAN pricing has risen from summer fill prices.

談到化肥領域，春季播種季節進展順利，氮肥需求強勁。7 月，我們完成了夏季 UAN 填充和秋季氨預付款，並看到對這兩種產品的強勁需求，價格高於 2023 年填充價格，優於大多數人的預期。目前，進入秋季，我們的訂單量充足，UAN 定價已較夏季成交價格上漲。

Finally, in renewables, we resumed planned operations at the renewable diesel unit in early June following the downtime associated with the Wynnewood fire in April. The pretreater for the renewable diesel unit is also operating at planned rates and so far we’re seeing an improvement in renewable diesel yield and resulting economics at current market prices.

最後，在再生能源方面，繼 4 月溫尼伍德火災造成的停機之後，我們在 6 月初恢復了再生柴油裝置的計畫運作。再生柴油裝置的預處理器也按計劃運行，到目前為止，我們看到可再生柴油產量有所提高，並以當前市場價格計算所帶來的經濟效益。

Discussions are ongoing through the potential conversion of Wynnewood renewable diesel unit to 100% SAF and we expect to have a development plan together in the next few months for a larger project at coffee bill.

目前正在討論將 Wynnewood 再生柴油裝置轉換為 100% SAF 的可能性，我們預計將在未來幾個月內共同製定一個更大的咖啡帳單專案的開發計劃。

We continue to believe there will be a market for renewable diesel and sustainable aviation going forward, and while there is significant interest in the market from potential offtakers for SAF, the bid-ask spread remains fairly wide. In addition to these potential projects and renewables, we continue to explore strategic transactions both in refining and potentially related to the CVR partners, although we have nothing to report at this point.

我們仍然相信，未來將存在再生柴油和永續航空市場，儘管 SAF 的潛在承購商對該市場表現出濃厚的興趣，但買賣價差仍然相當大。除了這些潛在項目和再生能源之外，我們還繼續探索煉油領域以及可能與 CVR 合作夥伴相關的策略交易，儘管我們目前沒有任何可報告的內容。

Looking at the third quarter of 2024, quarter-to-date metrics are as follows. Group 2-1-1 cracks have averaged $19.12 per barrel, with the Brent TI spread at $3.22 per barrel and the WCS differential at $14.39 per barrel under WTI.

展望 2024 年第三季度，季度至今指標如下。2-1-1 組裂縫平均每桶 19.12 美元，布倫特 TI 價差為每桶 3.22 美元，WCS 價差為每桶 14.39 美元。

Prompt fertilizer prices are approximately $520 per ton for ammonia and $240 per ton for UAN. As of yesterday, group 3 2-1-1 cracks were $21.74 per barrel, the Brent TI was approximately $4 per barrel and WCS was $15.75 under WTI. RINs were $3.96 per barrel.

氨的即時肥料價格約為每噸 520 美元，UAN 的即時肥料價格約為每噸 240 美元。截至昨天，第 3 組 2-1-1 裂縫價格為每桶 21.74 美元，布倫特 TI 價格約為每桶 4 美元，WCS 價格低於每桶 15.75 美元。RIN 為每桶 3.96 美元。

As always, we continue to strive to operate our plants in a safe, reliable and environmentally responsible manner to explore opportunities to grow and to explore opportunities to grow the company. We also continue to focus on maximizing free cash flow and protecting the balance sheet while aiming to provide an attractive return to shareholders.

一如既往，我們繼續努力以安全、可靠和對環境負責的方式運作我們的工廠，以探索發展機會和公司發展機會。我們也繼續專注於最大化自由現金流和保護資產負債表，同時旨在為股東提供有吸引力的回報。

With that, Operator, we’re ready for questions.

至此，接線員，我們準備好回答問題了。

Thank you. (Operator Instructions) Thank you. Our first question comes from John Royall with JPMorgan. Please proceed with your question.

謝謝。（操作員說明）謝謝。我們的第一個問題來自摩根大通的約翰·羅亞爾。請繼續你的問題。

Hi. Good morning. Thanks for taking my question. So, Dave mentioned a potential insurance recovery regarding the $50 million loss from the Wynnewood outage. Is there an expectation you can share for how much of that $50 million you might see coming back and maybe a timeline as well?

你好。早安.感謝您提出我的問題。因此，戴夫提到了關於溫尼伍德停電造成的 5000 萬美元損失的潛在保險賠償。您是否可以分享您可能會看到這 5000 萬美元中的多少回報以及時間表？

Well, we have a deductible, and from a property and equipment standpoint is probably where most of that will come from. We don’t really have a good estimate yet, but I’m guessing around $20 million and the timeframe of getting it back is always an interesting process.

嗯，我們有免賠額，從財產和設備的角度來看，這可能是大部分免賠額的來源。我們還沒有真正的準確估計，但我猜大約是 2000 萬美元，而收回資金的時間範圍始終是一個有趣的過程。

Okay. Thank you. And then can you talk about the broader strategy around renewables in today’s market? I know you have a couple of potential projects that are moving forward, but obviously the margin environments challenge right now and I know this is all kind of pending, finding agreements with partners, but are you waiting at this point to see if the market improves before you sanction these projects or do you remain confident in the long-term viability of RD and staff such that you might take FID in a lower margin environment?

好的。謝謝。然後您能談談當今市場上圍繞再生能源的更廣泛策略嗎？我知道你們有幾個潛在的項目正在推進，但顯然現在的利潤環境面臨挑戰，我知道這一切都懸而未決，正在與合作夥伴達成協議，但你們現在是否在等待，看看市場是否有所改善在在您批准這些項目之前，還是您對研發和員工的長期生存能力仍然充滿信心，以便您可以在利潤率較低的環境中進行最終投資？

Well, I think, you’ve got to remember how we got here. The RVO that was set for three years was set, I think, basically for political reasons, if nothing else, with an election coming up to lower the price of gasoline and diesel. And what it manifested itself into is D4s were way under RVO'ed, and as a result, the RINs dropped, and then there went largely the economics of RD.

好吧，我想，你必須記住我們是如何到達這裡的。我認為，三年的 RVO 基本上是出於政治原因，如果沒有其他原因的話，即將舉行的選舉將降低汽油和柴油的價格。它的表現是 D4 遠低於 RVO，結果是 RIN 下降，然後 RD 的經濟性就大打折扣了。

That said, if you still look at what the market offers, even on a bean oil basis, you can eke out some profit just if you operate well at design rates and minimize your costs. So, I think, there’s no question decarbonization is still going to be with us for a long time and probably the best material out there that can handle heavy machinery and trucks and such is renewable diesel if you really want to reduce carbon.

也就是說，如果您仍然關注市場提供的產品，即使以豆油為基礎，只要您按照設計率良好運營並最大限度地降低成本，您就可以勉強獲得一些利潤。因此，我認為，毫無疑問，脫碳仍將在很長一段時間內伴隨我們，如果你真的想減少碳，那麼可能是可以處理重型機械和卡車的最佳材料，例如可再生柴油。

So, I think that the market’s there and of course from an SAF standpoint, the airlines really have no other alternative to really reduce carbon. So you could do ethanol to SAF but if you look at the yield and the cost, it’s almost identical to the SAF route via vegetable oils and waste oils.

因此，我認為市場就在那裡，當然從新加坡武裝部隊的角度來看，航空公司確實沒有其他選擇來真正減少碳排放。因此，您可以用乙醇生產 SAF，但如果您考慮產量和成本，您會發現它與透過植物油和廢油生產的 SAF 路線幾乎相同。

So, I think, it’s around a long time, John, and our timing is we’re not in a big hurry to push these things out. From an SAF standpoint and converting Wynnewood, we really want to have contractual terms that give us a return or we just won’t do it.

所以，我認為，這已經是很長一段時間了，約翰，我們的時機是我們並不急於推出這些東西。從 SAF 和轉換 Wynnewood 的角度來看，我們確實希望合約條款能為我們帶來回報，否則我們就不會這樣做。

And the Coffeyville side is, this is really a deal where we’re putting sweat equity into it, a little bit of money to seed it, but the bottom line is we’re looking for partners that we could roll the Wynnewood business in with and eventually monetize our investment there.

科菲維爾方面是，這確實是一筆交易，我們投入了汗水股權，一點點資金來播種，但底線是我們正在尋找可以開展溫尼伍德業務的合作夥伴並最終將我們在那裡的投資貨幣化。

So we’re still positive on it. Timing’s not perfect, but a new RVO coming out here with a new president, and hopefully, they’ll put some sense into it and decouple 6s from 4s, and I think, you’ll see the market improve dramatically if that occurs.

所以我們對此仍然持正面態度。時機並不完美，但新的 RVO 和新總裁一起出現，希望他們能對此有所了解，並將 6 與 4 脫鉤，我認為，您會看到市場顯著改善如果發生這種情況。

Very helpful. Thank you, Dave.

很有幫助。謝謝你，戴夫。

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

我們的下一個問題來自尼爾梅塔與高盛的對話。請繼續你的問題。

Good morning, Dave and team. I guess the first question, just building on the UAN commentary, was there’s a very strong quarter at UAN in the Fertilizer segment, and sometimes those of us in refining have less visibility into some of the comings and goings of that segment. So, can you talk about what you’re seeing on the ground, anything that’s one-time in nature or have we found a sustainable level of higher profitability?

早上好，戴夫和團隊。我想第一個問題是基於 UAN 的評論，UAN 在化肥領域的季度表現非常強勁，有時我們煉油行業的人對該領域的一些進展了解較少。那麼，您能否談談您在實地看到的情況，自然界中一次性的情況，或者我們是否已經找到了可持續的更高盈利水平？

Well, I think, Neil, if you look at the market, it’s really stabilized. I think it’s kind of in balance and that’s driven the prices back to what we would call mid-cycle. $5.20 and $2.50 on UAN, $5.20 on ammonia and $2.50 on UAN is right in the wheelhouse of mid-cycle.

嗯，我認為，尼爾，如果你看看市場，你會發現它確實穩定了。我認為這是一種平衡，這推動價格回到我們所說的周期中期。 UAN 為 5.20 美元和 2.50 美元，氨水為 5.20 美元，UAN 為 2.50 美元，正好處於中期週期的駕駛室。

Farmer economics are still fairly good, although price of grains have dropped quite a bit. But they’re still very profitable if you own the land, a little less if you’re leasing the land. But as our customers go, we go, and I think the demand for Fertilizers is quite strong, as evidenced by our fill, prepay on ammonia and our fill on UAN. That kind of gives you a look into the market going forward. So it looks very positive to us.

雖然糧食價格下降，但農民經濟仍然較好。但如果你擁有土地，他們的利潤仍然很高，如果你租賃土地，利潤就會少一些。但隨著我們的客戶走，我們也走，我認為對化學肥料的需求相當強勁，我們的填充、氨預付款和 UAN 的填充證明了這一點。這可以讓您了解未來的市場。所以這對我們來說看起來非常積極。

Thanks, Dave. And you talked a little bit about trying to figure out the right long-term corporate structure around some of these assets from whether it makes sense to monetize the Nitrogen business. But you’ve also talked over the years about if you’re not a seller, then you could be a buyer. And just put that in the context of the refining business, are there assets on the market that look interesting to you and you’ve talked about diversifying outside of Group 3 as well. So how does that fit into the strategy?

謝謝，戴夫。您談到了試圖圍繞其中一些資產找出正確的長期公司結構，從氮氣業務貨幣化是否有意義。但多年來您也談到，如果您不是賣家，那麼您也可以成為買家。就煉油業務而言，市場上是否有您感興趣的資產，您也談到了第 3 組之外的多元化。那麼這如何融入戰略呢？

Yeah. I think if you have any weakness in our company, we’re concentrated in the Mid-Con and one market with the Cushing-Cruz, and that’s about it. Obviously, diversification away from that or in addition to that is a good thing. So we look at everything that comes on the market and there are some interesting deals out there. We don’t have anything to announce yet or even discuss, but we will look at everything and continue to look at everything just as we do with UAN and how work -- how it’s structured in our 100% ownership of the GP, but 37% of the units. So we continue to innovate on that and look at all options.

是的。我認為，如果說我們公司有什麼弱點的話，那就是我們專注於中型市場以及庫欣-克魯茲市場，僅此而已。顯然，遠離這一點或除此之外的多元化是一件好事。因此，我們關注市場上出現的所有產品，其中有一些有趣的交易。我們還沒有什麼要宣布的，甚至沒有任何要討論的，但我們會審視一切，並繼續審視一切，就像我們對UAN 所做的那樣，以及如何運作——它是如何在我們100% 的所有權中建構的。因此，我們繼續對此進行創新並考慮所有選擇。

Thanks, Dave.

謝謝，戴夫。

You’re welcome.

不客氣。

(Operator Instructions) Our next question comes from the line of Paul Cheng with Scotiabank. Please proceed with your question.

（操作員說明）我們的下一個問題來自豐業銀行的 Paul Cheng。請繼續你的問題。

Hey, guys. Good afternoon.

大家好。午安.

Hi, Paul.

嗨，保羅。

I think in the past, you have at one point suggest that you may even consider to convert the RD back into just running oil, running crude oil. Can you give us some idea that, I mean, under what circumstances that you will make such a decision and that what kind of timeline or that precondition that you are looking for?

我認為過去，您曾一度建議您甚至可以考慮將 RD 轉換回僅運行石油、運行原油。您能否告訴我們一些想法，我的意思是，您在什麼情況下會做出這樣的決定，以及您正在尋找什麼樣的時間表或先決條件？

Well, Paul, I think, if you look at the RD business we have today, what it does is mitigate a lot of RINs for us, and that has some value that we have to go out in the marketplace and buy it. Even if we may have a small loss on renewable diesel, yeah, we think that’s a benefit to us going forward.

好吧，Paul，我認為，如果你看看我們今天擁有的 RD 業務，它所做的就是為我們減輕很多 RIN，這具有一定的價值，我們必須在市場上購買它。即使我們在再生柴油方面可能會遭受少量損失，是的，我們認為這對我們未來的發展是有利的。

But I am very confident that even in today’s market, we can print the $0.30 a gallon to $0.40 a gallon profit pretty easily if we just run to design and that’s where we’re at now. We’re at a rate that’s slightly reduced to really optimize our catalyst life. And if we get that all in line, get the cost in line, even under today’s market conditions, we think that can happen.

但我非常有信心，即使在今天的市場上，如果我們只是進行設計，我們也可以輕鬆獲得每加侖 0.30 美元到 0.40 美元的利潤，而這就是我們現在的處境。我們的速度略有降低，以真正優化我們的催化劑壽命。如果我們讓一切保持一致，使成本保持一致，即使在今天的市場條件下，我們認為這也是可能發生的。

Now, we do have the BTC expiring at the end of the year. There’s legislation that’s being proposed to extend it. What’s going to happen, nobody knows. But our view is that the RIN will respond if the BTC goes away almost dollar-for-dollar and that will probably cement the RD economics even better.

現在，比特幣確實將在今年年底到期。人們正在提議立法來延長這一期限。會發生什麼，沒有人知道。但我們的觀點是，如果 BTC 幾乎一美元兌一美元地消失，RIN 將會做出反應，這可能會更好地鞏固 RD 經濟。

We really like our location in terms of being close to the ag belt. We still have exploring to do on the lower CI materials. Just recently, we got our CIs on both corn oil and bean oil reduced by 10, which helps us on the economics also.

我們真的很喜歡我們的位置，因為它靠近農業帶。對於較低 CI 的材料我們還有探索的空間。就在最近，我們的玉米油和豆油 CI 都降低了 10，這對我們的經濟也有幫助。

So we’re in it for the long haul. We always keep an eye on it to what it would be -- what it would take for us to switch back to hydrocarbon surface -- service. And obviously, where cracks are today, it’s not a very hard decision to keep running RD.

因此，我們將長期致力於此。我們始終關注它會是什麼——我們需要什麼才能切換回碳氫化合物表面——服務。顯然，在目前存在裂縫的情況下，繼續運作研發並不是一個非常艱難的決定。

And David, how about you and Dane, what else do you need to take in order for you to be able to run the full design capacity? I mean, you are running more like 65%, 70%. So what needs to be changed in order for you to be able to get to 9500%?

David，你和 Dane 怎麼樣，為了能夠充分發揮設計能力，你們還需要做什麼？我的意思是，你的跑步率更像是 65%、70%。那麼，為了達到 9500%，需要改變什麼？

I didn’t get your question, Paul.

我沒聽清楚你的問題，保羅。

In your Wynnewood, your RD facility currently, you’re running at about 65% to 70% utilization rate or nameplate capacity. What will you take or what needs to be changed in order for you to be able to run that close to 100%?

目前，在溫尼伍德 (Wynnewood) 研發設施中，利用率或銘牌容量約為 65% 至 70%。為了讓您能夠接近 100% 運行，您將採取什麼措施或需要更改什麼？

Well…

嗯…

And how far you can get there?

你能到達多遠？

Yeah. Well, I think, this run that we’re at now with the pretreater, we’re going to at least a year catalyst life and that’s going to bring our utilization right on up with it. To get to 100%, we are -- we -- as I mentioned, we’re looking at how to optimize the catalyst load and how to get the maximum life out of it, which affects the economics tremendously.

是的。嗯，我認為，我們現在使用預處理器進行的運行，催化劑壽命將至少為一年，這將使我們的利用率立即提高。為了達到 100%，我們——正如我所提到的，我們正在研究如何優化催化劑負載以及如何最大限度地延長催化劑的使用壽命，這對經濟效益有巨大影響。

So, we have cut back a little bit. We’re running more closer to the 80-million-gallon rate right now and we plan to hold that for this entire run. And then we’ll walk it up probably another 500 barrels or 600 barrels, something like that, 10%, 20% on the next load to really get us all the way up to the highest run we think we can optimize on.

所以，我們削減了一點。我們現在的運行速度更接近 8000 萬加侖，並且我們計劃在整個運行過程中保持這一水平。然後我們可能會再增加 500 桶或 600 桶，類似的情況，在下一次裝載時增加 10%、20%，真正讓我們一路達到我們認為可以優化的最高運行。

Okay.

好的。

It’s going to take another cycle to do that.

需要另一個週期才能做到這一點。

So you’re talking about sometime by the end of next year?

所以你說的是明年年底的某個時間？

Yeah. I’d say by the end of that, we should be on the fourth load and fifth load, excuse me. And that will give us the curve we need and the data we need to know where the optimum is.

是的。我想說，到最後，我們應該進行第四次裝載和第五次裝載，對不起。這將為我們提供所需的曲線和數據，以了解最佳位置。

I see. And Dave, you’re talking about the EPA lawsuit. So what’s the next step for you and then the timeline and the action that you’re going to take? I mean, that you sort of get a somewhat favorable ruling from the court, but that hasn’t been able to translate into anything yet. So what’s the next step for you to be able to pursue?

我懂了。戴夫，你正在談論美國環保署的訴訟。那麼您的下一步是什麼，然後是您要採取的時間表和行動？我的意思是，你從法院得到了某種有利的裁決，但這還沒有轉化為任何東西。那麼您下一步可以追求什麼？

Well, the D.C. Circuit ruling was a big one, that kind of confirmed the Fifth Circuit ruling. So it took an appeal out of question, I think, for EPA to go to the Supreme Court to try to overturn those.

嗯，華盛頓特區巡迴法院的裁決是一項重大裁決，這證實了第五巡迴法院的裁決。因此，我認為，環保署毫無疑問地可以向最高法院上訴，試圖推翻這些規定。

But all that said, EPA may try to come up with some other lousy excuse to deny small refinery waivers, which we’ll have to battle. In the meantime, we have submitted our 2024 small refinery waiver. Our 2023 has been pending for five months now and they missed the 90-day requirement by the law. So we’re suing over that.

但儘管如此，美國環保署可能會試圖找出其他一些糟糕的藉口來拒絕小型煉油廠的豁免，而我們將不得不與之抗爭。同時，我們已提交 2024 年小型煉油廠豁免。我們的 2023 年已經懸而未決五個月了，他們錯過了法律規定的 90 天要求。所以我們正在為此提起訴訟。

So we continue to pile on, if you will, with lawsuits on this poor management by EPA on this whole ruling. And I did mention the other factor that we’re petitioning the government to start rulemaking again on changing the obligated parties to only include people that are obligated parties to be able to trade or buy or sell or generate RINs. The way it is today, anybody and their brother can do it and that’s led to manipulation.

因此，如果你願意的話，我們將繼續對美國環保署在整個裁決中的管理不善提起訴訟。我確實提到了另一個因素，即我們請求政府再次開始製定規則，改變義務方，使其僅包括能夠交易、購買、出售或產生 RIN 的義務方。今天的情況是，任何人和他們的兄弟都可以做到這一點，這導致了操縱。

And I’ll just use today’s example of renewable diesel. If you looked at the RVO that was set and the volume of renewable diesel that’s being produced, RIN should be zero, frankly. And because of all these other players in there hoarding RINs and hiding them and doing this and that, it’s actually $0.60 or it’s got as low as $0.32, I think, and has whittled its way back up. So we’re going to pursue that one also against EPA. So we’ve got multiple fronts working.

我將僅以今天的再生柴油為例。如果您查看設定的 RVO 和正在生產的可再生柴油量，坦白說，RIN 應該為零。由於所有其他玩家都在囤積 RIN、隱藏它們並做這做那，所以實際上是 0.60 美元，或者我認為它已經低至 0.32 美元，並且已經逐漸回升。因此，我們也將針對 EPA 採取同樣的行動。因此，我們已經在多個方面開展工作。

All right. All right. Good luck on that. Thank you.

好的。好的。祝你好運。謝謝。

Yeah. Thank you. We’ll need it.

是的。謝謝。我們需要它。

You’re dealing with the government.

你正在與政府打交道。

Yeah. That’s right.

是的。沒錯。

Our next question comes from a line of Matthew Blair with Tudor, Pickering. Please proceed with your question.

我們的下一個問題來自馬修·布萊爾和都鐸·皮克林的台詞。請繼續你的問題。

Good afternoon. Thanks for taking my question. On Coffeyville, it looks like the crude diet reflected a nice move up to gathered barrels. It looks like you’re gathering more of your own barrels and pushing out. I guess it would be just like pushing source barrels of WTI. Could you talk about how you’re able to increase these gathered barrel volumes and uplift to your refining system?

午安.感謝您提出我的問題。在科菲維爾，粗製飲食似乎反映出向聚集桶的良好轉變。看起來你正在收集更多自己的桶子並推出。我想這就像推動 WTI 源桶一樣。您能否談談您如何能夠增加這些聚集的桶子體積並提升您的精煉系統？

Well, I think, what you’re seeing there, Matt, is mostly the effect of the fire at Wynnewood. Normally, we’d run a lot of those barrels at Wynnewood and with Wynnewood out of commission for two weeks and cut back for about almost two months. A lot of those barrels went to Coffeyville. It backed out domestic sweet, which is the Cushing common or commonly called WTI out of Cushing, which is a blended barrel.

嗯，我認為，馬特，你在那裡看到的主要是溫尼伍德火災的影響。通常情況下，我們會在溫尼伍德運行大量此類桶，當溫尼伍德停駛兩週時，我們會減少大約兩個月的時間。其中許多桶子都被運往科菲維爾。它取消了國內甜酒，即庫欣常見的或通常稱為庫欣 WTI 的酒，這是一種混合桶。

So, our strategy has always been to gather at the wellhead and pick and choose the most profitable crudes and we continue that. Our gathering right now is up to about 136,000 barrels a day, which is probably up, I don’t know, over five years, probably, about double, roughly. And it’s really important for Wynnewood because Wynnewood ‘s configuration is it needs about a 48 gravity crude and because we take the BTBs and crack them in the cap and that requires certain quality crudes. So, it’s given us the ability to do RD and a few other things that the fact that we have the gathered crude system.

因此，我們的策略始終是聚集在井口，挑選最有利可圖的原油，我們將繼續這樣做。我們現在每天的開採量高達約 136,000 桶，我不知道，五年內這個數字可能會增加一倍左右。這對 Wynnewood 來說非常重要，因為 Wynnewood 的配置是它需要大約 48 比重的原油，而且因為我們採用 BTB 並在蓋子中將其破解，這需要一定品質的原油。因此，除了我們擁有完整的原始系統之外，它還賦予我們進行研發和其他一些事情的能力。

Sounds good. And then on the RD side, I just wanted to clarify. So, for the pretreatment, should we expect that that will be fully online and contributing for Q3 and beyond, because it looks like it wasn’t really a factor in the second quarter. Is that correct?

聽起來不錯。然後在研發方面，我只是想澄清一下。因此，對於預處理，我們是否應該期望它將完全在線並為第三季度及以後的時間做出貢獻，因為看起來這並不是第二季度的一個真正因素。那是對的嗎？

Yeah. Well, it was a factor in the second quarter, but the fire kind of knocked our, we should have made 19 million gallons and we only did about 12 million gallons and that was the effect of the fire. But our yield is up over 95%, which is a vast improvement over where we were without the pretreater. And the metals, everything looks, the pretreater is really doing a fantastic job on pretreating and it’s really making a difference in what we see in the unit, the downstream unit. So, it’s expected to run forever from now on.

是的。嗯，這是第二季度的一個因素，但火災有點打擊了我們，我們本應該生產 1900 萬加侖，但我們只生產了大約 1200 萬加侖，這就是火災的影響。但我們的產量提高了 95% 以上，這比沒有預處理器的情況有了很大的提高。對於金屬，一切看起來，預處理器在預處理方面確實做得非常出色，並且它確實使我們在下游單元中看到的情況發生了變化。因此，它預計從現在開始將永遠運行。

Great. Thank you very much.

偉大的。非常感謝。

You’re welcome.

不客氣。

We have reached the end of the question-and-answer session. I would now like to turn the floor back over to management for closing comments.

我們的問答環節已經結束。我現在想將發言權交還給管理層以徵求結束意見。

Again, I’d like to thank you for your interest in CVI Energy. Additionally, I’d like to thank our employees for their hard work and commitment towards safe, reliable and environmentally responsible operations. We look forward to reviewing our third quarter 2024 results during our next earnings call. Thank you. Have a great day.

我再次感謝您對 CVI Energy 的關注。此外，我還要感謝我們的員工的辛勤工作以及對安全、可靠和對環境負責的營運的承諾。我們期待在下一次財報電話會議上回顧 2024 年第三季的業績。謝謝。祝你有美好的一天。

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

女士們、先生們，今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與，祝您有美好的一天。