CVR Energy Q2 2026 Earnings Report

CVR Energy EPS Results

• Actual EPS: $0.34
• Consensus EPS: $0.26
• Beat/Miss: Beat by +$0.08
• One Year Ago EPS: -$0.23

CVR Energy Revenue Results

• Actual Revenue: $2.74 billion
• Expected Revenue: $2.22 billion
• Beat/Miss: Beat by +$513.61 million
• YoY Revenue Growth: +55.50%

CVR Energy Announcement Details

• Quarter: Q2 2026
• Date: 7/29/2026
• Time: After Market Closes
• Conference Call Date: Thursday, July 30, 2026
• Conference Call Time: 1:00PM ET

CVR Energy (NYSE:CVI), Inc. (NYSE:CVI) is a diversified energy company that operates through its petroleum refining and nitrogen fertilizer businesses. The company’s operations are primarily located in the Mid-Continent region of the United States.

Through its petroleum segment, CVR Energy owns and operates refineries in Coffeyville, Kansas, and Wynnewood, Oklahoma. These facilities process crude oil into transportation fuels and other refined products, including gasoline, diesel fuel, jet fuel, and asphalt. The segment also includes crude oil gathering, pipelines, terminals, and related logistics assets that support the company’s refining operations.

CVR Energy’s nitrogen fertilizer business is operated through CVR Partners, LP. It produces and markets nitrogen fertilizers, including ammonia and urea ammonium nitrate, which are sold primarily to agricultural customers. The company’s history traces back to refining and fertilizer operations developed in the Midwestern and central United States, and its products are distributed mainly across domestic agricultural and fuel markets.

CVR Energy Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong second-quarter operations and earnings: Refining utilization was 98% and ammonia utilization was 99%, while adjusted EBITDA rose to $209 million and adjusted EPS was $0.34.
• Positive Sentiment: Favorable market conditions supported both businesses, with Group 3 refining cracks averaging $44.91 per barrel and fertilizer demand and pricing remaining strong. Management expects conditions to remain above mid-cycle levels into 2027.
• Negative Sentiment: High renewable fuel compliance costs remained a significant drag, including a $216 million net RIN expense and a $408 million accrued RFS obligation. EPA has yet to rule on Wynnewood’s 2025 small-refinery exemption petition, creating further compliance uncertainty.
• Negative Sentiment: Refining results were reduced by $75 million of derivative losses, including an $81 million realized loss; the company still has approximately 8.2 million barrels of crack-spread swap positions outstanding.
• Positive Sentiment: CVR generated $264 million of free cash flow and ended the quarter with $737 million of consolidated cash, supporting its priority to reduce base-business debt toward $1 billion while preserving flexibility for potential acquisitions and future dividend increases.

Presentation

[Operator]

Would now like to turn the call over to Richard Roberts, Interim Chief Financial Officer and Vice President of FP&A and Investor Relations. Sir, please go ahead.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

Thank you. Good afternoon, everyone. We very much appreciate you joining us this afternoon for our CVR Energy second quarter 2026 earnings call. With me today are Dane Neumann, our Chief Executive Officer, Mike Wright, our Chief Operating Officer, and other members of management. Prior to discussing our 2026 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. 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 as specified in the forward-looking statements.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

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 reconciliation to the most directly comparable GAAP financial measures, are included in our 2026 second-quarter earnings release that we filed with the SEC in Form 10-Q for the period and will be discussed during the call. With that said, I'll turn the call over to Dane.

[Dane Neumann, CEO at CVR Energy]

Thank you, Richard. Good afternoon, everyone, and thank you for joining our earnings call. We posted another quarter of strong operating results with crude utilization of 98% and an ammonia plant utilization of 99%. The ongoing global conflicts have created tightness across energy and fertilizer markets, which directly benefited our asset base during the second quarter. We are pleased to announce the second quarter 2026 dividend of $0.10 per share, and we believe current market conditions could present opportunities to reduce leverage and add value for our shareholders. Now let me turn the call over to Richard to discuss our financial highlights.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

Thank you, Dane, and good afternoon, everyone. For the second quarter of 2026, our consolidated net income was $46 million. Losses per share were $0.03. EBITDA was $161 million. Our second-quarter results include an unfavorable change in our RFS liability of $73 million, favorable inventory valuation impacts of $19 million, and unrealized derivative gains of $6 million. Excluding the above-mentioned items, adjusted EBITDA for the quarter was $209 million. Adjusted earnings per share was $0.34. Adjusted EBITDA on the petroleum segment was $106 million for the second quarter, compared to $38 million for the second quarter of 2025. Elevated Group 3 crack spreads and higher throughput volumes drove the majority of the increase from the prior year period, offset somewhat by higher Brent expenses, significant backwardation in WTI, and realized derivative losses.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

Combined total throughput for the second quarter of 2026 was approximately 213,000 barrels per day. Crude utilization for the quarter was approximately 98% of nameplate capacity. Light product yield was 92% on total throughput volumes. Benchmark cracks for the second quarter of 2026 increased from the prior year period, with the Group 3 2-1-1 averaging $44.91 per barrel, compared to $24.02 per barrel in the second quarter of 2025. Our second quarter realized margin, adjusted for the change in RFS liability, inventory valuation, and unrealized derivative gains, was $12.43 per barrel, representing a 28% capture rate on the Group 3 2-1-1 benchmark. RIN prices increased significantly from second quarter 2025 levels, up over 125% to average nearly $14 per barrel for the second quarter of 2026.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

Net RINs expense for the quarter, excluding the change in RFS liability, was $216 million, or $11.16 per barrel, which negatively impacted our capture rate for the quarter by approximately 25%. The estimated accrued RFS obligation on the balance sheet was $408 million at June 30th, representing 169 million RINs, mark-to-market at an average price of $2.41. EPA has still not ruled on our pending 2025 petition. As such, we will continue to recognize 100% of Wynnewood Refining Company's RIN obligation in our financials, which for the second quarter of 2026 was approximately $77 million. Had Wynnewood Refining Company received the 100% SRE we believe it is entitled to, our consolidated capture rate for the quarter would have been improved by approximately 9%. EPA is now nine months delinquent in ruling on Wynnewood Refining Company's 2025 SRE petition.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

The current compliance date for 2025 is approximately one month away. We still do not know what our compliance obligation will be. RIN prices have gotten completely out of hand due to the blending obligations EPA established in Set 2, effectively creating a short market that will require imported biofuels in order to potentially meet the required obligations, the complete opposite of the stated intent of the RFS. Meanwhile, RIN prices are adding nearly $0.40 a gallon to the price of gasoline in the U.S. RFS compliance costs are more than twice all the other combined operating costs for many refineries. As we have stated numerous times, if the administration is serious about lowering fuel prices, it should start with the RFS. Our second quarter 2026 results included derivative losses totaling $75 million, comprised of an $81 million realized loss and a $6 million unrealized gain.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

The realized loss for the quarter was related to the crack spread swaps that we discussed on the first quarter call. We settled approximately 4.4 million barrels of crack spread swap positions during the second quarter, leaving open positions totaling approximately 8.2 million barrels. For the remainder of 2026, there were approximately 4.6 million barrels of diesel hedged and 400,000 barrels of gasoline hedged, with the diesel exposure fairly split between the third and fourth quarters and all of the gasoline exposure in the third quarter. The total notional value of the open crack spread swaps for the third quarter is approximately $102 million. For 2027, we are approximately 3.2 million barrels of diesel hedged fairly ratably across the year.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

We'll continue to actively monitor these positions and plan to be opportunistic in managing our exposure going forward, which could include closing out these positions or adding other positions depending on market conditions. Direct operating expenses in the petroleum segment were $5.93 per barrel for the second quarter, compared to $6.45 per barrel in the second quarter of 2025. The decrease in direct operating expenses per barrel was primarily due to increased throughput volumes as the Coffeyville Refinery was coming out of turnaround in the second quarter of 2025. Adjusted EBITDA in the fertilizer segment was $107 million for the second quarter, compared to $67 million for the prior year period. Ammonia utilization rate was 99%, with both plants running well and experiencing minimal downtime during the quarter.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

The board of directors of CVR Partners General Partner declared a distribution of $6.08 per common unit for the second quarter of 2026. As CVR Energy owns approximately 37% of CVR Partners common units, we will receive a proportionate cash distribution of approximately $24 million. Cash flow from operations for the second quarter of 2026 was $307 million, and free cash flow was $264 million. Significant uses of cash in the quarter included $43 million of capital spending, $27 million paid for the non-controlling interest portion of the CVR Partners first quarter 2026 distribution, $20 million for cash interest, and $10 million for dividends. Total consolidated capital spending on an accrual basis was $46 million, which included $29 million in the petroleum segment and $17 million in the fertilizer segment. For the full year 2026, we estimate total consolidated capital spending to be approximately $215 million to $240 million.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

Turning to the balance sheet, we ended the quarter with a consolidated cash balance of $737 million, which includes $137 million of cash in the fertilizer segment. Total liquidity as of June 30th, excluding CVR Partners, was approximately $1.1 billion, which was comprised primarily of $600 million of cash and availability under the ABL facility of $540 million. We remain committed to our deleveraging goal and plan to continue working towards a gross leverage target of $1 billion, excluding debt at CVR Partners. Looking ahead to the third quarter of 2026, for our petroleum segment, we estimate total throughput to be approximately 205,000 to 220,000 barrels per day, direct operating expenses to range between $110 million and $120 million, and total capital spending to be between $41 million and $50 million.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

For the fertilizer segment, we estimate our ammonia utilization rate to be between 75%-80%, which will be impacted by the upcoming planned turnaround at the East Dubuque facility. We estimate direct operating expenses, excluding inventory and turnaround impacts, to be between $57 million-$62 million, turnaround expenses to be between $30 million-$35 million, and total capital spending to be between $40 million-$49 million. With that, Dane, I'll turn it back over to you.

[Dane Neumann, CEO at CVR Energy]

Thank you, Richard. In summary, we had another good quarter of operations in our refining and fertilizer businesses. We are optimistic about the near-term outlook for both segments and believe we could remain above mid-cycle conditions well into 2027. The ongoing geopolitical conflicts across the globe continue to create volatility. However, the U.S. has remained fairly insulated and able to benefit from these conditions with its relatively abundant supplies of available crude oil, natural gas, and critical refining infrastructure. Starting with the refining segment, the ongoing conflicts in the Middle East have so far been more impactful for refined products than crude oil. In addition to reduced flows of crude oil from the closure of the Strait of Hormuz, a number of refineries in the Middle East have been damaged, and the status of those repairs and timelines on potential restarts remains unknown.

[Dane Neumann, CEO at CVR Energy]

Outside of the Middle East, Ukraine has stepped up its attacks on Russian refineries over the past few months, with reports estimating a third to nearly half of Russia's refining capacity could be offline. As a result, refined product exports from Russia have been effectively shut off, while China has also halted refined product exports for several months. Looking at the U.S., the tightness in global refined product supply has created opportunities for increased refined product exports. Year-to-date exports of gasoline, diesel, and jet fuel have increased 16% compared to the same period last year to over 2.6 million barrels per day on average. Meanwhile, U.S. demand for refined products has remained resilient, driving gasoline and diesel inventories near or below five-year lows on a days of supply basis.

[Dane Neumann, CEO at CVR Energy]

In the MidCon, where we operate, we are seeing similar trends, with days of supply hovering near five-year lows for the past several months. While cracks were strong in the second quarter-to-date cracks have increased further, and we should see some improvements to capture as crude oil backwardation narrows in the third quarter. In the fertilizer segment, the spring planting season went well, and demand for nitrogen was strong overall. Grain prices have increased some recently, with expectations for lower carryout inventories driven by a combination of hot and dry conditions across the Western Corn Belt, increased export demand, and a smaller-than-expected corn crop in Argentina. Summer fill and fall prepay for ammonia occurred in late June, and UAN fill was completed in early July.

[Dane Neumann, CEO at CVR Energy]

Overall, we saw strong demand for both products, and we were able to secure a solid book of business for the second half of 2026 at attractive pricing. We expect to start the planned turnaround at East Dubuque in late August, during which we intend to complete the brownfield capacity expansion, which we believe should increase its ammonia production capacity by approximately 5%. We also expect to finalize a detailed design and construction plan this year intended to allow the plant to utilize natural gas as an alternative feedstock to third-party petcoke. Looking at quarter-date pricing metrics for the third quarter of 2026, Group 3 2-1-1 cracks have averaged $58.70 per barrel, with the Brent WTI spread at $4.82 per barrel and the WCS differential at $14.04 per barrel under WTI. Prompt fertilizer prices are $650 to $700 per ton for ammonia and $325 to $350 per ton for UAN.

[Dane Neumann, CEO at CVR Energy]

After eight years with the company, I have seen the benefits of focusing on safety, reliability, cost management, and prudent capital allocation. We have a strong team in place, and I look forward to continue executing on the strategy we laid out earlier this year. In addition to our constant focus on safe and reliable operations, we remain committed to working to improve margin capture in our base business, and we are laser-focused on pursuing accretive growth opportunities that would add value for our shareholders. With that, operator, we are ready for questions.

[Operator]

At this time, if you would like to ask a question, press star, then the number one on your telephone keypad. To withdraw your question, simply press star one again. We kindly ask that you limit your questions to one and one follow-up for today's call. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Manav Gupta with UBS. Please go ahead.

[Manav Gupta, Analyst at UBS]

Good morning. Congratulations on a very strong quarter. You provided some outlook on macro, and which was pretty constructive. I'm just trying to understand, based on everything you said, you could be building a lot of cash and, again, coming back to your vision of expanding your refining footprints. I'm just trying to go back and understand, is that still a goal for you to have higher refining capacity? If that is the case, how will you plan to fund it, including the surplus cash that probably you will accumulate because margins are well above mid-cycle?

[Dane Neumann, CEO at CVR Energy]

Thanks, Manav. Our strategy is obviously we still believe that CVI needs to grow in barrels and diversify from its core region of the Southern MidCon. As it relates to the growing cash balances, obviously we want to continue to focus on reducing the debt levels of CVI to our base business. Also, as we continue to look at commercial opportunities, we're mindful that we may come across a couple of smaller, call it immaterial opportunities to advance our logistics footprint. I don't really consider the cash at this time as potentially being a meaningful impact to any M&A. If there's an opportunity out there, we do believe the capital markets are open. Obviously, I think the world's learned a very valuable lesson on the value of the U.S. refining complex. Frankly, we're going backwards in capacity when we should be going forward.

[Dane Neumann, CEO at CVR Energy]

I kind of consider them separate topics and would look to fund alternatively other than using cash on the balance sheet.

[Manav Gupta, Analyst at UBS]

Thank you. A quick one again on your hedging strategy. This is somewhat unique. Most of your peers don't hedge as much or don't admit to hedging that much. Can you walk us through the hedging strategy that you have in place for the next few quarters and the next year? Thank you.

[Dane Neumann, CEO at CVR Energy]

Sure. Manav, historically, we'd get board authorization to target around 30% of our production, usually for around a calendar year. I would say historically, when opportunities have presented themselves, we would layer into the market we'd often miss the timing of it kind of not get the hedges on that we wanted. Unfortunately, this time around, we learned from the past, went really, really fast, the conflict obviously is still ongoing. A great example of past performance, not indicative of future results. As we look forward, I think for our book for the rest of the year, we're satisfied with where the levels are at. 2027 is a much smaller amount. If we did look at any closures, it'd be looking at the 2027 area. Obviously no action that we've taken and just discussing it.

[Dane Neumann, CEO at CVR Energy]

Going forward, I think that we will probably look to lower what type of authorizations we get. 30% may be a little high on a go-forward basis, and just continue to assess as we go forward, and then be a little more cautious as we layer in.

[Manav Gupta, Analyst at UBS]

Thank you so much, and congrats on your new role.

[Dane Neumann, CEO at CVR Energy]

Thank you, sir.

[Operator]

Your next question comes from the line of Matthew Blair with TPH. Please go ahead.

[Matthew Blair, Analyst at TPH]

Thanks. Good morning. Maybe to stick on the hedging side. If I heard correctly, it sounded like the realized hedge loss in the quarter was $81 million, which I think shakes out to about $4.20 a barrel as a headwind. Is that how you look at it as well? Do you have an estimate on what the mark-to-market hedging impact would look like in Q3? Would that be something around $100 million to $120 million? Thank you.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

Hey, Matthew. It's Richard. You're right on the 2Q impact. It was $81 million of a realized loss, which was about $4.16 a barrel, and that was about a 9% hit to capture. We did say in the prepared remarks, 2Q was the largest volume exposure that we had of all the hedges that we had in place. That's behind us now, which is nice. We stepped down in 3Q, we stepped down again in 4Q. For 2027, it's a lot smaller. For 3Q, total exposure is about 2.7 million barrels, and the notional value of that position right now is $102 million, as I mentioned earlier. If you want to try to back into it, I think we talked about it last quarter. We put these hedges on pretty early when the Ukraine conflict started, call it late February, early March.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

If you wanted to look at where were 3Q, 4Q, diesel cracks trading around that time, you can probably get a sense of where we would have locked in to try to get order of magnitude of where we are versus where we entered into.

[Matthew Blair, Analyst at TPH]

Okay, thanks. That's helpful. Do you have any concerns on 2026 RIN compliance? Any concerns that there simply might not be enough RINs in the market? If so, are you adjusting your RIN purchase strategy, or are you buying any extra RINs now to avoid potential shortage later in the year?

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

That's a great question, Matt. Yeah, I think just in general, I have concerns about the 2026 RVO, and I'll avoid the soapbox, but just in brief, we've mismanaged the program. We are not helping farmers, we are harming consumers, and we are just not giving any clarity on how to plan businesses as it relates to EPA and their waivers, deadlines, et cetera. I don't know how the EPA could let the RIN bank go short. They're forcing us to comply with something, they will have to take some level of action. It's just untenable that they could do what they've done or let it get worse. As it relates to RIN buying, our plan is always ratable.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

I think in 2Q here, when the prices really started to get out of control, we slowed down a little bit, just because we think the EPA has to take some action here. That strategy's paid off a little bit as we've seen some softness in RINs the last few days. We'll continue to focus on ratable buying with a little bit of catch-up here in the third quarter.

[Matthew Blair, Analyst at TPH]

Okay. Can I just clarify for Wynnewood, are you currently buying 50% of your expected 2026 obligation?

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

Yes. We are intending on buying 50% of the obligation for Wynnewood, although we still intend, and have proven out using the DOE scoring methodology, that we deserve a 100% waiver at Wynnewood.

[Matthew Blair, Analyst at TPH]

Great. Thanks so much.

[Richard Roberts, Interim CFO and VP of FP&A and Investor Relations at CVR Energy]

Got it.

[Operator]

Your next question comes from the line of Alexa Petrick with Goldman Sachs. Please go ahead.

[Alexa Petrick, Analyst at Goldman Sachs]

Hey, team, thanks for taking our question. First of all, congratulations, Dane and Richard, on your new roles. Well deserved. Can you guys talk about what you're focused on in these new seats, and then how's the leadership transition going?

[Dane Neumann, CEO at CVR Energy]

Yeah, thank you. The leadership transition's been great. We have a really strong team in place. I obviously have been at the company a long time, and as have a number of other senior leaders. The team I had in the CFO organization is very, very strong. Obviously, bringing Richard up to help us out here has been, I think, a great move. I don't really feel like we missed a beat. The team I have is capable of wearing many hats, has very broad experience, and frankly, have made it relatively easy to manage through. Strategically, I don't think anything really changes. We do want to focus on the core commercial business, improving capture, and then just accretive opportunities to shareholders. We're marching forward on that, and hopefully we have some information to share soon.

[Alexa Petrick, Analyst at Goldman Sachs]

Thanks. Appreciate that. As a follow-up, just wanted to ask on capital allocation, can you talk a little bit more about how you guys are thinking about balancing a dividend with debt reduction? As you look at the potentials to scale up refining, what does the M&A landscape look like right now?

[Dane Neumann, CEO at CVR Energy]

Sure. For capital allocation, consistent with what we've previously said, we really want to get back to that base level of $1 billion of debt, excluding CVR Partners. That remains a priority. I would say similar to the past, we always said we didn't have to get that balance gone before we return a dividend, and we delivered on that in the first quarter. If we can make meaningful progress, which we have a line of sight to doing on the remaining balance of that debt, there's certainly opportunity to discuss some incremental increase to the dividend with the market conditions the way they are. I don't see us returning to the high historical levels, but something that is sustainable and regular throughout the cycle. We'll continue to provide updates on that front.

[Dane Neumann, CEO at CVR Energy]

M&A perspective, yeah, I think this, to me, almost feels like somewhat of an ideal time for folks to take action, looking to rebalance portfolios. Now more than ever, I think the ability for refineries to trade at a mid-cycle level, which over a long term is where people should transact, presents an opportunity. Historically, bid-asks have been very wide, this gives you a scenario where value can be achieved and risk-reward can be balanced as well.

[Alexa Petrick, Analyst at Goldman Sachs]

Thanks. We'll turn it back.

[Dane Neumann, CEO at CVR Energy]

Thank you.

[Operator]

That concludes our question and answer session. I will now turn the call back over to Dane Neumann for closing remarks.

[Dane Neumann, CEO at CVR Energy]

Again, I would like to thank you all for your interest in CVR Energy and our employees for their hard work and commitment towards safe, reliable, and environmentally responsible operations. We look forward to reviewing our third quarter 2026 results during our next earnings call. Have a safe day.

[Operator]

Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.

Participants

Executives

• Richard Roberts, Interim CFO and VP of FP&A and Investor Relations
• Dane Neumann, CEO

Analysts

• Manav Gupta, Analyst at UBS
• Matthew Blair, Analyst at TPH
• Alexa Petrick, Analyst at Goldman Sachs