GlobeNewswire Inc | Nov 2, 2020 05:23PM EST

November 02, 2020

SUGAR LAND, Texas, Nov. 02, 2020 (GLOBE NEWSWIRE) -- CVR Energy, Inc. (CVR Energy) (NYSE: CVI) today announced a net loss of $96 million, or 96 cents per diluted share, on net sales of $1.0 billion for the third quarter of 2020, compared to net income of $119 million, or $1.18 per diluted share, on net sales of $1.6 billion for the third quarter of 2019. Third quarter 2020 EBITDA was a loss of $39 million, compared to third quarter 2019 EBITDA of $235 million.

Despite a difficult market environment during the third quarter 2020 marked by narrow crack spreads, tight crude oil differentials and high Renewable Identification Number pricing, we were able to execute on our plan of reducing operating and SG&A expenses, which allowed us to add cash to our balance sheet, said Dave Lamp, CVR Energys Chief Executive Officer. In addition, CVR Energys Board of Directors has approved the completion of detailed engineering and the purchase of long lead-time equipment for the Wynnewood refinerys renewable diesel unit project. Weve also submitted applications for all environmental permits to the state of Oklahoma for final approval.

CVR Partners achieved strong production and product sales during the 2020 third quarter, which helped offset lower product pricing, Lamp said. Farm economics have significantly improved since the summer, with corn and soybean prices up 30 percent since July. Looking ahead, we anticipate strong customer demand for fertilizer applications for the fall 2020 and spring 2021 seasons.

Petroleum

The Petroleum Segment reported a third quarter 2020 operating loss of $39 million on net sales of $927 million, compared to operating income of $173 million on net sales of $1.5 billion in the third quarter of 2019.

Refining margin per total throughput barrel was $5.47 in the third quarter of 2020, compared to $16.34 during the same period in 2019. Narrow crack spreads and a decrease in throughput volumes contributed to the reduction in refining margins during the third quarter of 2020. Partially offsetting these impacts, crude oil prices rose during the quarter, which led to a favorable inventory valuation impact of $16 million, or 86 cents per total throughout barrel, compared to an unfavorable inventory valuation impact of $1 million, or 3cents per total throughput barrel during the third quarter of 2019. The Petroleum Segment also recognized a third quarter 2020 derivative gain of $5 million, or 27 cents per total throughput barrel, compared to a gain of $18 million, or 90cents per total throughput barrel, for the third quarter of 2019. Included in this derivative gain for the third quarter of 2020 was a $1 million unrealized gain, compared to an unrealized gain of $14 million for the third quarter of 2019.

Third quarter 2020 combined total throughput was approximately 201,000 barrels per day (bpd), compared to approximately 222,000 bpd of combined total throughput for the third quarter of 2019. This decrease was due to running a lighter crude slate in addition to weather-related issues.

Fertilizer

The Nitrogen Fertilizer Segment reported an operating loss of $3 million on net sales of $79 million for the third quarter of 2020, compared to an operating loss of $8 million on net sales of $89 million for the third quarter of 2019.

Third quarter 2020 average realized gate prices for urea ammonia nitrate (UAN) decreased over the prior year, down 23 percent to $140 per ton, and ammonia was down 28 percent over the prior year to $242 per ton.Average realized gate prices for UAN and ammonia were $182 per ton and $337 per ton, respectively, for the third quarter of 2019.

CVR Partners fertilizer facilities produced a combined 215,000 tons of ammonia during the third quarter of 2020, of which 71,000 net tons were available for sale while the rest was upgraded to other fertilizer products, including 330,000 tons of UAN. During the third quarter 2019, the fertilizer facilities produced 196,000 tons of ammonia, of which 56,000 net tons were available for sale while the remainder was upgraded to other fertilizer products, including 318,000 tons of UAN.

Corporate

The Company reported an income tax benefit of $31 million, or 22.2 percent of loss before income taxes, for the three months ended Sep.30, 2020, compared to income tax expense of $34 million, or 25.0 percent of income before income taxes for the three months ended Sep. 30, 2019. The change in income tax (benefit) expense was due primarily to changes in pretax loss during the three months ended Sep.30, 2020. Additionally, the Company recognized investment loss from marketable securities of $65million during the three months ended Sep.30, 2020.

Cash, Debt and Dividend

Consolidated cash and cash equivalents was $672 million at Sep.30, 2020, an increase of $20 million from Dec. 31, 2019. Consolidated total debt and finance lease obligations was $1.7 billion at Sep.30, 2020, including $635 million held by the Nitrogen Fertilizer Segment.

On Sep.29, 2020, CVR Partners amended its ABL Credit Agreement to, among other things, extend its termination date to Sep.30, 2022, optimize the borrowing capacity and fee structure, and revise certain provisions to provide an improved credit facility for the Nitrogen Fertilizer Segment. The proceeds may be used to fund working capital, capital expenditures and for other general corporate purposes.

CVR Energy will not pay a cash dividend and CVR Partners will not pay a cash distribution for the 2020 third quarter.

Third Quarter 2020 Earnings Conference Call

CVR Energy previously announced that it will host its third quarter 2020 Earnings Conference Call on Tuesday, Nov. 3, at 1 p.m. Eastern. The Earnings Conference Call may also include discussion of Company developments, forward-looking information and other material information about business and financial matters.

The third quarter 2020 Earnings Conference Call will be webcast live and can be accessed on the Investor Relations section of CVR Energys website at www.CVREnergy.com. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291. The webcast will be archived and available for 14 days at https://edge.media-server.com/mmc/p/okiw9yxf. A repeat of the call also can be accessed for 14 days by dialing (877) 660-6853, conference ID 13712216.

Forward-Looking StatementsThis news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are forward-looking statements, as that term is defined under the federal securities laws. These forward-looking statements include, but are not limited to, statements regarding future: reduction of operating and SG&A expenses; cash on our balance sheet; Wynnewoods renewable diesel unit project including our ability to successfully complete and costs, timing and permitting relating thereto; farm economics; customer demand for fertilizer applications; impacts of COVID-19 including the duration thereof; gasoline demand, including recovery thereof in the Midcontinent; cash flow; safe and reliable operations; costs including management thereof; capital spending; derivatives activities and gains or losses associated therewith; income taxes including benefit or expense relating thereto, pretax income or loss and tax rates; value of securities, including marketability, income from and performance thereof; expectations for market conditions in the fertilizer industry; dividends and distributions including the timing, payment and amount (if any) thereof; impacts of global crude oil pricing; repurchases (if any) of CVR Partners common units including the amount and timing thereof; refinery throughput; crude oil prices including impacts to inventory valuation; direct operating expenses, capital expenditures, depreciation and amortization; turnaround expenditures and the impact of turnarounds; ammonia utilization rates; inventories and adjustments thereto; basis used for determining inventory value; and other matters. You can generally identify forward-looking statements by our use of forward-looking terminology such as outlook, anticipate, believe, continue, could, estimate, expect, explore, evaluate, intend, may, might, plan, potential, predict, seek, should, or will, or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. Investors are cautioned that various factors may affect these forward-looking statements, including the health and economic effects of COVID-19, the rate of any economic improvement, demand for fossil fuels, price volatility of crude oil, other feedstocks and refined products (among others); the ability of CVR Partners to make cash distributions; potential operating hazards; costs of compliance with existing, or compliance with new, laws and regulations and potential liabilities arising therefrom; impacts of planting season on CVR Partners; general economic and business conditions; CVR Partners compliance with the NYSEs listing requirements; and other risks. For additional discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings. These and other risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this news release are made only as of the date hereof. CVR Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.

About CVR Energy, Inc.Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and marketing business through its interest in CVR Refining and the nitrogen fertilizer manufacturing business through its interest in CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own 35 percent of the common units of CVR Partners.

For further information, please contact:

Investor Relations:Richard RobertsCVR Energy, Inc.(281) 207-3205InvestorRelations@CVREnergy.com

Media Relations:Brandee StephensCVR Energy, Inc. (281) 207-3516MediaRelations@CVREnergy.com

Non-GAAP Measures

Our management uses certain non-GAAP performance measures to evaluate current and past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These non-GAAP financial measures are important factors in assessing our operating results and profitability and include the performance and liquidity measures defined below.

The following are non-GAAP measures presented for the period ended September 30, 2020:

EBITDA - Consolidated net income (loss) before (i) interest expense, net, (ii) income tax expense and (iii) depreciation and amortization expense.

Petroleum EBITDA and Nitrogen Fertilizer EBITDA - Segment net income (loss) before segment (i) interest expense, net, (ii) income tax expense (benefit), and (iii) depreciation and amortization.

Refining Margin - The difference between our Petroleum Segment net sales and cost of materials and other.

Petroleum EBITDA and Refining Margin, adjusted for Inventory Valuation Impacts - Petroleum EBITDA and Refining Margin adjusted to exclude the impact of current period market price and volume fluctuations on crude oil and refined product inventories purchased in prior periods and lower of cost or net realizable value adjustments, if applicable. We record our commodity inventories on the first-in-first-out basis. As a result, significant current period fluctuations in market prices and the volumes we hold in inventory can have favorable or unfavorable impacts on our refining margins as compared to similar metrics used by other publicly-traded companies in the refining industry.

Refining Margin and Refining Margin adjusted for Inventory Valuation Impacts,per Throughput Barrel - Refining Margin divided by the total throughput barrels during period, which is calculated as total throughput barrels per day times the number of days in the period.

Direct Operating Expenses per Throughput Barrel - Direct operating expenses for our Petroleum Segment divided by total throughput barrels for the period, which is calculated as total throughput barrels per day times the number of days in the period.

Adjusted (Loss) Earnings per Share - (Loss) Earnings per share adjusted for inventory valuation impacts and other significant non-cash items on an after-tax basis.

Net Debt and Finance Lease Obligations - Net debt and finance lease obligations is total debt and finance lease obligations reduced for cash and cash equivalents.

Total Debt and Net Debt and Finance Lease Obligations to EBITDA Exclusive of Nitrogen Fertilizer - Total debt and net debt and finance lease obligations is calculated as the consolidated debt and net debt and finance lease obligations less the Nitrogen Fertilizer Segments debt and net debt and finance lease obligations as of the most recent period ended divided by EBITDA exclusive of the Nitrogen Fertilizer Segment for the most recent twelve-month period.

Free Cash Flow - Net cash provided by (used in) operating activities less capital expenditures and capitalized turnaround expenditures.

We present these measures because we believe they may help investors, analysts, lenders and ratings agencies analyze our results of operations and liquidity in conjunction with our U.S. GAAP results, including but not limited to our operating performance as compared to other publicly-traded companies in the refining industry, without regard to historical cost basis or financing methods and our ability to incur and service debt and fund capital expenditures. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. See Non-GAAP Reconciliations section included herein for reconciliation of these amounts. Due to rounding, numbers presented within this section may not add or equal to numbers or totals presented elsewhere within this document.

Items or Events Impacting Comparability

Our results over the past two years have been affects by the following events, the understanding of which will aid in assessing the comparability of our period to period financial performance and financial condition.

Petroleum Segment

Coffeyville Refinery - Beginning in March 2020, the Coffeyville Refinery had a planned, full facility turnaround lasting 57 days, which was completed in April 2020. During the three and nine months ended September 30, 2020, we capitalized costs of $1million and $154million, respectively, related to this planned turnaround.

Nitrogen Fertilizer Segment

Goodwill Impairment

As of June 30, 2020, a full, non-cash impairment charge of $41million was recorded. Refer to Note 6 (Goodwill) to Part I, Item 1 of the second quarter 2020 Form 10-Q for further discussion.

CVR Energy, Inc. (all information in this release is unaudited)

Financial and Operational Data

Three Months Ended Nine Months Ended September 30, September 30,(in millions, except 2020 2019 2020 2019share data)Consolidated Statement of Operations DataNet sales $ 1,005 $ 1,622 $ 2,811 $ 4,794 Operating costs and expenses:Cost of materials and 846 1,221 2,348 3,589 otherDirect operating expenses(exclusive of 116 139 353 397 depreciation andamortization)Depreciation and 67 69 200 210 amortizationCost of sales 1,029 1,429 2,901 4,196 Selling, general andadministrative expenses(exclusive of 20 29 65 85 depreciation andamortization)Depreciation and 2 2 8 7 amortizationLoss (gain) on asset ? 3 2 (5 ) disposalsGoodwill impairment ? ? 41 ? Operating (loss) income (46 ) 159 (206 ) 511 Other (expense) income: Interest expense, net (31 ) (26 ) (98 ) (77 ) Investment loss from (65 ) ? (13 ) ? marketable securitiesOther income, net 3 5 3 10 (Loss) income before (139 ) 138 (314 ) 444 income tax expenseIncome tax (benefit) (31 ) 34 (73 ) 110 expenseNet (loss) income (108 ) 104 (241 ) 334 Less: Net lossattributable to (12 ) (15 ) (53 ) (2 ) noncontrolling interestNet (loss) incomeattributable to CVR $ (96 ) $ 119 $ (188 ) $ 336 Energy stockholders Basic and diluted (loss) $ (0.96 ) $ 1.18 $ (1.87 ) $ 3.34 earnings per shareDividends declared per $ ? $ 0.75 $ 1.20 $ 2.25 share EBITDA* $ (39 ) $ 235 $ (8 ) $ 738 Weighted-average commonshares outstanding - 100.5 100.5 100.5 100.5 basic and diluted

_____________ See Non-GAAP Reconciliations section below.

Selected Balance Sheet Data

(in millions) September 30, December 31, 2020 2019Cash and cash equivalents $ 672 $ 652 Working capital 797 678 Total assets 3,876 3,905 Total debt and finance lease obligations, 1,690 1,195 including current portionTotal liabilities 2,574 2,237 Total CVR stockholders? equity 1,084 1,393

Selected Cash Flow Data

Three Months Ended Nine Months Ended September 30, September 30,(in millions) 2020 2019 2020 2019Net cash flowprovided by (used in):Operating activities $ 111 $ 269 $ 62 $ 653 Investing activities (35 ) (30 ) (396 ) (73 ) Financing activities (3 ) (87 ) 361 (556 ) Net increase in cash $ 73 $ 152 $ 27 $ 24 and cash equivalents Free cash flow* $ 76 $ 239 $ (197 ) $ 544

_________________* See Non-GAAP Reconciliations section below.

Selected Segment Data

(in millions) Petroleum Nitrogen Consolidated FertilizerThree Months Ended September 30, 2020Net sales $ 927 $ 79 $ 1,005 Operating loss (39 ) (3 ) (46 )Net loss (33 ) (19 ) (108 )EBITDA* 15 15 (39 ) Capital expenditures (1) Maintenance capital expenditures $ 12 $ 3 $ 16 Growth capital expenditures 5 2 7 Total capital expenditures $ 17 $ 5 $ 23 Nine Months Ended September 30, 2020Net sales $ 2,556 $ 260 $ 2,811 Operating loss (161 ) (34 ) (206 )Net loss (156 ) (81 ) (241 )EBITDA* (8 ) 23 (8 ) Capital expenditures (1) Maintenance capital expenditures $ 66 $ 9 $ 78 Growth capital expenditures 14 4 18 Total capital expenditures $ 80 $ 13 $ 96

(in millions) Petroleum Nitrogen Consolidated FertilizerThree Months Ended September 30, 2019Net sales $ 1,535 $ 89 $ 1,622 Operating income (loss) 173 (8 ) 159 Net income (loss) 170 (23 ) 104 EBITDA* 228 11 235 Capital expenditures (1) Maintenance capital expenditures $ 25 $ 6 $ 31 Growth capital expenditures 2 1 3 Total capital expenditures $ 27 $ 7 $ 34 Nine months ended September 30, 2019Net sales $ 4,484 $ 318 $ 4,794 Operating income 492 36 511 Net income (loss) 478 (10 ) 334 EBITDA* 653 97 738 Capital expenditures (1) Maintenance capital expenditures $ 58 $ 11 $ 73 Growth capital expenditures 7 1 8 Total capital expenditures $ 65 $ 12 $ 81

_______________* See Non-GAAP Reconciliations section below.

(1) Capital expenditures are shown exclusive of capitalized turnaround expenditures and capitalized software costs.

Selected Balance Sheet Data

(in millions) Petroleum Nitrogen Consolidated FertilizerSeptember 30, 2020 Cash and cash equivalents (1) $ 397 $ 48 $ 672 Total assets 2,919 1,047 3,876 Total debt and finance leaseobligations, including current portion 61 635 1,690 (2) December 31, 2019 Cash and cash equivalents (1) $ 583 $ 37 $ 652 Total assets 3,187 1,138 3,905 Total debt and finance leaseobligations, including current portion 563 632 1,195 (2)

_______________

(1) Corporate cash and cash equivalents consisted of $227 million and $32 million at September 30, 2020 and December 31, 2019, respectively.(2) Corporate total debt and finance lease obligations, including current portion consisted of $994 million at September 30, 2020, with no debt held at December 31, 2019.

Petroleum Segment

Key Operating Metrics per Total Throughput Barrel

Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Refining margin * $ 5.47 $ 16.34 $ 5.77 $ 16.18 Refining margin adjusted forinventory valuation impacts 4.61 16.37 7.34 15.65 *Direct operating expenses * 4.17 4.46 5.09 4.53

________________ See Non-GAAP Reconciliations section below.

Throughput Data by Refinery

Three Months Ended Nine Months Ended September 30, September 30,(in bpd) 2020 2019 2020 2019Coffeyville Regional crude 35,769 41,150 36,277 44,238 WTI 58,743 80,717 42,794 74,325 Midland WTI ? 1,436 ? 4,959 Condensate 13,885 2,378 8,502 3,588 Heavy Canadian 22 4,555 1,362 5,199 Other crude oil 9,702 ? 3,258 ? Other feedstocks and 8,203 8,455 7,001 8,608 blendstocksWynnewood Regional crude 57,919 61,345 53,057 52,750 WTI ? 13 ? 4 WTL 8,657 ? 6,994 ? Midland WTI ? 11,313 1,573 12,406 Condensate 5,330 7,435 7,175 7,408 Other feedstocks and 2,936 3,203 3,468 3,579 blendstocksTotal throughput 201,168 222,000 171,460 217,064

Production Data by Refinery

Three Months Ended Nine Months Ended September 30, September 30,(in bpd) 2020 2019 2020 2019Coffeyville Gasoline 68,572 69,122 53,241 71,144Distillate 49,407 58,457 38,976 59,008Other liquid products 5,246 7,157 4,328 6,808Solids 3,382 4,580 2,836 4,886Wynnewood Gasoline 37,118 42,464 37,334 38,673Distillate 32,514 36,555 29,864 32,003Other liquid products 2,712 1,756 2,532 3,064Solids 23 33 25 31Total production 198,975 220,124 169,135 215,617 Light product yield (as % of crude 98.7% 98.2% 99.0% 98.0%throughput) (1)Liquid volume yield (as % of total 97.2% 97.1% 97.0% 97.1%throughput) (2)Distillate yield (as % of crude 43.1% 45.2% 42.8% 44.4%throughput) (3)

______________

(1) Total Gasoline and Distillate divided by total Regional crude, WTI, WTL, Midland WTI, Condensate, and Heavy Canadian throughput.(2) Total Gasoline, Distillate, and Other liquid products divided by total throughput.(3) Total Distillate divided by total Regional crude, WTI, WTL, Midland WTI, Condensate, and Heavy Canadian throughput.

Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019MarketIndicators (dollars perbarrel)West TexasIntermediate $ 40.92 $ 56.44 $ 38.21 $ 57.10 (WTI) NYMEXCrude OilDifferentials to WTI:Brent 2.42 5.59 4.32 7.65 WCS (heavy (9.82 ) (12.59 ) (12.31 ) (11.93 ) sour)Condensate (0.52 ) (0.55 ) (1.47 ) (0.99 ) Midland 0.13 (0.26 ) 0.16 (1.23 ) CushingNYMEX Crack Spreads:Gasoline 10.89 16.37 10.93 16.55 Heating Oil 9.55 23.14 13.81 24.30 NYMEX 2-1-1 10.22 19.76 12.37 20.42 Crack SpreadPADD II Group 3 Basis:Gasoline (2.74 ) (1.07 ) (3.74 ) (1.89 ) Ultra Low (1.01 ) (1.84 ) (1.50 ) (1.45 ) Sulfur DieselPADD II Group3 Product Crack Spread:Gasoline 8.15 15.30 7.19 14.66 Ultra Low 8.54 21.30 12.31 22.85 Sulfur DieselPADD II Group 8.34 18.30 9.75 18.76 3 2-1-1

Q4 2020 Petroleum Segment Outlook

The table below summarizes our outlook for certain operational statistics and financial information for the fourth quarter of 2020. See Forward-Looking Statements above.

Q4 2020 Low HighTotal throughput (bpd) 200,000 220,000 Direct operating expenses (1) (in millions) $ 75 $ 85 Total capital expenditures (2) (in millions) $ 6 $ 12

_____________________

(1) Direct operating expenses are shown exclusive of depreciation and amortization.(2) Capital expenditures are disclosed on an accrual basis.

Nitrogen Fertilizer Segment:

Key Operating Data:

Ammonia Utilization (3) Two Years Ended September 30(capacity utilization) 2020 2019Consolidated 94 % 93 %Coffeyville Facility 95 % 95 %East Dubuque Facility 94 % 91 %

_____________

(3) Reflects ammonia utilization rates on a consolidated basis and at each of the Nitrogen Fertilizer facilities. Utilization is an important measure used by management to assess operational output at each of the facilities. Utilization is calculated as actual tons produced divided by capacity. The Nitrogen Fertilizer Segment presents utilization on a two-year rolling average to take into account the impact of current turnaround cycles on any specific period. The two-year rolling average is a more useful presentation of the long-term utilization performance of our plants. Additionally, we present utilization solely on ammonia production rather than each nitrogen product as it provides a comparative baseline against industry peers and eliminates the disparity of plant configurations for upgrade of ammonia into other nitrogen products. With the Nitrogen Fertilizer Segments efforts being primarily focused on ammonia upgrade capabilities, this measure provides a meaningful view of how well the facilities operate.

Sales and Production Data

Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Consolidated sales (thousand tons):Ammonia 54 33 218 179 UAN 365 340 986 968 Consolidated productpricing at gate (dollars per ton) (1):Ammonia $ 242 $ 337 $ 293 $ 416 UAN 140 182 156 206 Consolidated production volume (thousand tons):Ammonia (gross produced) 215 196 631 586 (2)Ammonia (net available for 71 56 228 168 sale) (2)UAN 330 318 968 969 Feedstock: Petroleum coke used in 129 137 393 404 production (thousand tons)Petroleum coke (dollars $ 35.11 $ 37.75 $ 36.77 $ 36.68 per ton)Natural gas used inproduction (thousands of 2,136 1,700 6,408 5,210 MMBtu) (3)Natural gas used inproduction (dollars per $ 2.10 $ 2.40 $ 2.15 $ 2.88 MMBtu) (3)Natural gas in cost ofmaterials and other 2,026 1,294 6,660 5,487 (thousands of MMBtus) (3)Natural gas in cost ofmaterials and other $ 2.01 $ 2.46 $ 2.25 $ 3.22 (dollars per MMBtu) (3)

_______________

(1) Product pricing at gate represents sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry.(2) Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represent ammonia available for sale that was not upgraded into other fertilizer products.(3) The feedstock natural gas shown above does not include natural gas used for fuel. The cost of fuel natural gas is included in direct operating expense.

Key Market Indicators

Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Ammonia ? Southern Plains (dollars per $ 216 $ 298 $ 249 $ 369 ton)Ammonia ? Corn belt (dollars per ton) 299 363 336 452 UAN ? Corn belt (dollars per ton) 159 196 170 217 Natural gas NYMEX (dollars per MMBtu) $ 2.12 $ 2.38 $ 1.92 $ 2.59

Q4 2020 Nitrogen Fertilizer Segment Outlook

The table below summarizes our outlook for certain operational statistics and financial information for the fourth quarter of 2020. See Forward-Looking Statements above.

Q4 2020 Low HighAmmonia utilization rates (1) Consolidated 95 % 100 %Coffeyville 95 % 100 %East Dubuque 95 % 100 % Direct operating expenses (2) (in millions) $ 37 $ 42 Total capital expenditures (3) (in millions) $ 5 $ 8

________________

(1) Ammonia utilization rates exclude the impact of Turnarounds.(2) Direct operating expenses are shown exclusive of depreciation and amortization, turnaround expenses, and impacts of inventory adjustments.(3) Capital expenditures are disclosed on an accrual basis.

Non-GAAP Reconciliations:

Reconciliation of Net (Loss) Income to EBITDA

Three Months Ended Nine Months Ended September 30, September 30,(in millions) 2020 2019 2020 2019Net (loss) income $ (108 ) $ 104 $ (241 ) $ 334 Add: Interest expense, net 31 26 98 77 Income tax (benefit) (31 ) 34 (73 ) 110 expenseDepreciation and 69 71 208 217 amortizationEBITDA $ (39 ) $ 235 $ (8 ) $ 738

Reconciliation of Net Cash (Used In) Provided By Operating Activities to Free Cash Flow

Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Net cash provided by operating $ 111 $ 269 $ 62 $ 653 activitiesLess: Capital expenditures (24 ) (30 ) (101 ) (85 ) Capitalized turnaround expenditures (11 ) ? (158 ) (24 ) Free cash flow $ 76 $ 239 $ (197 ) $ 544

Reconciliation of Petroleum Segment Net (Loss) Income to EBITDA and EBITDA Adjusted for Inventory Valuation Impacts

Three Months Ended Nine Months Ended September 30, September 30,(in millions) 2020 2019 2020 2019Petroleum net (loss) $ (33 ) $ 170 $ (156 ) $ 478 incomeAdd: Interest (income) (3 ) 7 (2 ) 23 expense, netDepreciation and 51 51 150 152 amortizationPetroleum EBITDA 15 228 (8 ) 653 Inventory valuationimpacts, (favorable) (16 ) 1 74 (31 ) unfavorable (1) (2)Petroleum EBITDAadjusted for inventory $ (1 ) $ 229 $ 66 $ 622 valuation impacts

_______________________

(1) The Petroleum Segments basis for determining inventory value under GAAP is First-In, First-Out (FIFO). Changes in crude oil prices can cause fluctuations in the inventory valuation of crude oil, work in process and finished goods, thereby resulting in a favorable inventory valuation impact when crude oil prices increase and an unfavorable inventory valuation impact when crude oil prices decrease. The inventory valuation impact is calculated based upon inventory values at the beginning of the accounting period and at the end of the accounting period. In order to derive the inventory valuation impact per total throughput barrel, we utilize the total dollar figures for the inventory valuation impact and divide by the number of total throughput barrels for the period.(2) Includes an inventory valuation charge of $58million recorded in the first quarter of 2020, as inventories were reflected at the lower of cost or net realizable value. No adjustment was necessary as of September 30, 2020, June 30, 2020, or December 31, 2019.

Reconciliation of Petroleum Segment Gross Profit to Refining Margin and Refining Margin Adjusted for Inventory Valuation Impacts

Three Months Ended Nine Months Ended September 30, September 30,(in millions) 2020 2019 2020 2019Net sales $ 927 $ 1,535 $ 2,556 $ 4,484 Cost of materials 826 1,201 2,285 3,525 and otherDirect operatingexpenses (exclusiveof depreciation and 77 91 239 269 amortization asreflected below)Depreciation and 51 51 150 152 amortizationGross (loss) profit (27 ) 192 (118 ) 538 Add: Direct operatingexpenses (exclusiveof depreciation and 77 91 239 269 amortization asreflected below)Depreciation and 51 51 150 152 amortizationRefining margin 101 334 271 959 Inventory valuationimpacts, (16 ) 1 74 (31 ) (favorable)unfavorable (3) (4)Refining marginadjusted for $ 85 $ 335 $ 345 $ 928 inventory valuationimpacts

_____________________

(3) The Petroleum Segments basis for determining inventory value under GAAP is FIFO. Changes in crude oil prices can cause fluctuations in the inventory valuation of crude oil, work in process and finished goods, thereby resulting in a favorable inventory valuation impact when crude oil prices increase and an unfavorable inventory valuation impact when crude oil prices decrease. The inventory valuation impact is calculated based upon inventory values at the beginning of the accounting period and at the end of the accounting period. In order to derive the inventory valuation impact per total throughput barrel, we utilize the total dollar figures for the inventory valuation impact and divide by the number of total throughput barrels for the period.(4) Includes an inventory valuation charge of $58million recorded in the first quarter of 2020, as inventories were reflected at the lower of cost or net realizable value. No adjustment was necessary as of September 30, 2020, June 30, 2020, or December 31, 2019.

Reconciliation of Petroleum Segment Total Throughput Barrels

Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Totalthroughput 201,168 222,000 171,460 217,064 barrels perdayDays in the 92 92 274 273 periodTotalthroughput 18,507,431 20,423,972 46,980,133 59,258,366 barrels

Reconciliation of Petroleum Segment Refining Margin per Total Throughput Barrels

Three Months Ended Nine Months Ended September 30, September 30,(in millions, exceptfor per throughput 2020 2019 2020 2019barrel data)Refining margin $ 101 $ 334 $ 271 $ 959 Divided by: total 19 20 47 59 throughput barrelsRefining margin pertotal throughput $ 5.47 $ 16.34 $ 5.77 $ 16.18 barrel

Reconciliation of Petroleum Segment Refining Margin Adjusted for Inventory Valuation Impact per Total Throughput Barrel

Three Months Ended Nine Months Ended September 30, September 30,(in millions, except for 2020 2019 2020 2019throughput barrel data)Refining margin adjusted for $ 85 $ 335 $ 345 $ 928 inventory valuation impactsDivided by: total throughput 19 20 47 59 barrelsRefining margin adjusted forinventory valuation impacts $ 4.61 $ 16.37 $ 7.34 $ 15.65 per total throughput barrel

Reconciliation of Petroleum Segment Direct Operating Expenses per Total Throughput Barrel

Three Months Ended Nine Months Ended September 30, September 30,(in millions, except for 2020 2019 2020 2019throughput barrel data)Direct operating expenses(exclusive of depreciation and $ 77 $ 91 $ 239 $ 269 amortization)Divided by: total throughput 19 20 47 59 barrelsDirect operating expenses per $ 4.17 $ 4.46 $ 5.09 $ 4.53 total throughput barrel

Reconciliation of Nitrogen Fertilizer Segment Net Loss to EBITDA

Three Months Ended Nine Months Ended September 30, September 30,(in millions) 2020 2019 2020 2019Nitrogen fertilizer net loss $ (19 ) $ (23 ) $ (81 ) $ (10 )Add: Interest expense, net 16 16 47 47 Depreciation and amortization 18 18 57 60 Nitrogen Fertilizer EBITDA $ 15 $ 11 $ 23 $ 97

Reconciliation of Basic and Diluted (Loss) Earnings per Share to Adjusted (Loss) Earnings per Share

Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Basic and diluted (loss) earnings $ (0.96 ) $ 1.18 $ (1.87 ) $ 3.34 per shareAdjustments: Inventory valuation impacts (1) (0.11 ) 0.01 0.54 (0.23 ) Unrealized gain on marketable 0.50 ? 0.15 ? securities (1)Goodwill impairment (1) (2) ? ? 0.07 ? Adjusted (loss) earnings per share $ (0.57 ) $ 1.19 $ (1.11 ) $ 3.11

__________________

(1) Amounts are shown after-tax, using the Companys marginal tax rate, and are presented on a per share basis using the weighted average shares outstanding for each period.(2) Amount is shown exclusive of noncontrolling interests.

Reconciliation of Total Debt and Net Debt and Finance Lease Obligations to EBITDA Exclusive of Nitrogen Fertilizer

Twelve Months Ended September 30, 2020Total debt and finance lease obligations (1) $ 1,690 Less: Nitrogen Fertilizer debt and finance lease obligations (1) $ 635 Total debt and finance lease obligations exclusive of Nitrogen 1,055 Fertilizer EBITDA exclusive of Nitrogen Fertilizer $ 98 Total debt and finance lease obligations to EBITDA exclusive of 10.77 Nitrogen Fertilizer Consolidated cash and cash equivalents $ 672 Less: Nitrogen Fertilizer cash and cash equivalents 48 Cash and cash equivalents exclusive of Nitrogen Fertilizer 624 Net debt and finance lease obligations exclusive of Nitrogen $ 431 Fertilizer (2) Net debt and finance lease obligations to EBITDA exclusive of 4.40 Nitrogen Fertilizer (2)

_______________

(1) Amounts are shown inclusive of the current portion of long-term debt and finance lease obligations.(2) Net debt represents total debt and finance lease obligations exclusive of cash and cash equivalents.

Three Months Ended Twelve December March 31, June 30, September Months Ended 31, 2019 2020 2020 30, September 2020 30, 2020Consolidated Net income $ 28 $ (101 ) $ (32 ) $ (108 ) $ (213 ) (loss)Add: Interest 24 35 31 31 121 expense, netIncome taxexpense 19 (36 ) (5 ) (31 ) (53 ) (benefit)Depreciationand 71 64 74 69 278 amortizationEBITDA $ 142 $ (38 ) $ 68 $ (39 ) $ 133 Nitrogen FertilizerNet (loss) $ (25 ) $ (21 ) $ (42 ) $ (19 ) (107 ) incomeAdd: Interest 16 16 16 16 64 expense, netDepreciationand 20 16 24 18 78 amortizationEBITDA $ 11 $ 11 $ (2 ) $ 15 $ 35 EBITDAexclusive of $ 131 $ (49 ) $ 70 $ (54 ) $ 98 NitrogenFertilizer