Jay Finks - VP, Finance Jack Lipinski - CEO and President Susan Ball - CFO and Treasurer.

Analysts:.

Greetings, and welcome to the CVR Energy Second Quarter 2015 Earnings Conference Call. At this time all participants are in 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, Jay Finks, Vice President of Finance for CVR Energy. Please go ahead, Jay..

Thank you, Kevin and good afternoon everyone. We very much appreciate you joining us this afternoon for our CVR Energy second quarter 2015 earnings call. With me are Jack Lipinski, our Chief Executive Officer; and Susan Ball, our Chief Financial Officer.

Prior to discussing our 2015 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, without limiting the foregoing, the words outlook, believes, anticipates, plans, expects and similar expressions are intended to identify forward-looking statements.

You are cautioned 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 disclosures related to such non-GAAP measures, including reconciliations to the most directly comparable GAAP financial measures are included in our 2015 second quarter earnings release that we filed with the SEC this morning prior to the open of the market. With that said I’ll turn the call over to Jack Lipinski, our Chief Executive Officer.

Jack?.

Thank you, Jay. Good afternoon, everyone and thanks for joining our earnings call. Hopefully, you had the opportunity to listen to the CVR Partners and CVR Refining second quarter earnings calls earlier today.

This morning we reported CVR Energy’s second quarter consolidated adjusted net income of $72.1 million or $0.83 per diluted share and that compare to $75.1 million or $0.87 per diluted share in the second quarter a year ago. Susan will provide more details on the financials after I’m done.

We also announce today a quarterly cash dividend of $0.50 per share which will be paid on August 17th, to stockholders of record on August 10. Let me talk a little bit about our business segments. And Petroleum, CVR Refining’s 2015 second quarter adjusted EBITDA was $194.3 million, as compared to $192.9 million a year ago.

CVR Refining also declared a second quarter distribution at $0.98 per common unit. CVR Energy owns approximately 66% of common units of CVR Refining and therefore received a proportion amount of distributions from CVR Refining. CVR Refining’s total crude throughput for the second quarter was approximately 210,700 barrels a day.

Coffeyville processed approximately 130,900 barrels a day of crude and Wynnewood processed approximately 79,800 barrels. In our fertilizer segment, CVR Partners announced a 2015 second quarter adjusted EBITDA of $36.1 million as compared to $25.7 million in the second quarter a year ago.

CVR Partners also declared a 2015 second quarter cash distribution of $0.39 per common unit. As CVR Energy owns approximately 53% of the common units of CVR Partners we will receive a proportional amount of CVR Partners’ distribution. At this point I’ll turn the call over to Susan to give you more details about the financials..

Thank you Jack and good afternoon everyone. Net income attributable to CVR Energy stockholders was $101.9 million in the second quarter 2015 as compared to $83.7 million in the second quarter of last year.

The net income attributable to the non-controlling interest was $90.2 million for the second quarter 2015 as compared to $60.3 million in the same period a year ago. Adjusted net income for the 2015 second quarter was $72.1 million or $0.83 per diluted share as compared to $75.1 million or $0.87 per diluted share in the second quarter of 2014.

We believe adjusted net income is a meaningful metric for analyzing our performance as it does eliminate the impact of non-cash and other unusual items inherent in our business and provides a more transparent view as to market expectation.

The adjustments to net income utilized for the 2015 second quarter to derive adjusted net income were adjustments related to favorable impacts as a result of our accounting under first-in first-out or FIFO inventory account method of $36.4 million.

Gains on derivatives not settled during the period of $15.9 million, a gain on flood insurance recovery of $27.3 million. Share based compensation expense of $1.9 million and main-tier scheduled turnaround expenses of $2.1 million.

The adjustments utilized for the 2014 second quarter were a favorable FIFO impact of $24.3 million, share based compensation expense of $4.7 million and a gain on derivatives not settled during the period of $2 million.

These gross adjustments to net income are reduced for the portion that’s attributable to the non-controlling interest and are further reduced for the net tax impacts associated with them. The second quarter of 2015, effective tax rate was approximately 23% as compared to 24% in the second quarter of 2014.

I will now turn to the specific performance of our two business segments impacting our overall quarterly results. As Jack mentioned earlier CVR Refining’s adjusted EBITDA for the 2015 second quarter was $194.3 million as compared to $192.9 million in the same period in 2014.

Both the Coffeyville and Wynnewood refineries had solid operating performance enabling both facilities to take advantage of the favorable margin environment. In the second quarter 2015, CVR Refining’s realized refining margin adjusted for FIFO was $17.22 per barrel as compared to $13.96 in the same quarter of 2014.

The NYMEX 211 crack spread averaged $23.85 per barrel in the second quarter of 2015 as compared to $23.05 per barrel in the same period of 2014. The PADD II Group 3 211 crack spread averaged $18.91 per barrel in the second quarter of 2015 as compared to $18.64 in the second quarter of 2014.

As discussed earlier, CVR Refining announced a 2015 second quarter distribution of $0.98 per common unit with $49.3 million to be paid to the public unit holders and $95.4 million to be paid to CVR Energy. As mentioned earlier CVR Partners second quarter adjusted EBITDA was $36.1 million as compared to $25.7 million in the same period last year.

The increase in adjusted EBITDA for CVR Partners over the periods was primarily driven by higher sales volumes per UAN as well as reduced cost for regulatory required rail-car inspections in repairs and lower third party ammonia purchases. Partially offsetting the overall increase was lower UAN pricing for this year’s second quarter.

The partnership announced a cash distribution of $0.39 per common unit for the second quarter 2015 of that $28.5 million to be paid, $13.3 million will be paid to public unit-holders and CVR Energy will receive $15.2 million.

Our financial position remains strong as we ended the quarter with cash and cash equivalents of approximately $937.7 million on a consolidated basis, including $67 million of cash held at CVR Partners and $433.2 million of cash at CVR Refining. As such CVR Energy held cash of $437.5 million as of June 30, 2015.

CVR Energy has no debt exclusive of the debt that resides with CVR refining and CVR Partners. Total consolidated debt including current portions as of June 30 was approximately $674.2 million. With that Jack, I will turn it back to you..

Okay, thank you Susan. Again hopefully, everyone on this call had the opportunity to listen to the earlier earnings calls of CVR Partners and CVR Refining. As we’ve discussed CVR Partners fertilizer facility is in the final stages of scheduled turnaround activities at Cannes [ph] in mid-July.

This work has progressed very well so far than plan as targeted to come back on line sometime next week. And at CVR Refining, we’ll begin the first phase of Coffeyville’s fabricated turnaround in the latter part of September. This turnaround is scheduled to last between six and seven weeks, at which time the refinery will operate at reduced rates.

And just as a reminder, the fall schedule of our turnaround is much larger than the spring schedule. We’re going to do somewhere around 70% of the work this fall and about 30% in spring. So, with that operator, turn it over for questions..

Operator:.

Thank you, Kevin. I’d like to thank everyone for joining us today. As a reminder a conference call along with CVR Refining and CVR Partners will be available for replay over the next 15 days. You can visit our website cvrenergy.com or contact Investor Relations for additional information. Thank you..

Thank you. That does conclude today’s teleconference. You may disconnect your lines at this time. And have a wonderful day. We thank you for your participation today..