Earnings call transcript: CVR Energy Q2 2025 reports EPS miss, stock dips

CVR Energy Inc. (CVI) reported a significant earnings miss for Q2 2025, with an adjusted loss per share of $0.23, compared to a forecasted loss of $0.06. The revenue, however, exceeded expectations, coming in at $1.76 billion against a forecast of $1.68 billion. The company’s stock dropped 8.04% in after-hours trading, reflecting investor concerns over the earnings shortfall. According to InvestingPro data, CVI maintains a substantial 12.96% dividend yield and appears overvalued at current levels. InvestingPro analysis reveals 11 additional key insights about CVI’s financial position and future prospects.

Key Takeaways

• CVR Energy reported a consolidated net loss of $90 million for Q2.
• The company experienced a negative market reaction, with stock prices falling over 8%.
• Revenue exceeded expectations, posting a 4.76% surprise.
• The company ended the quarter with a cash balance of $596 million.
• CVR Energy is optimistic about future refining prospects despite current challenges.

Company Performance

CVR Energy faced a challenging second quarter, reporting a consolidated net loss of $90 million. The loss per share was $1.14, and EBITDA showed a loss of $24 million, although adjusted EBITDA was positive at $99 million. The company managed to generate $176 million in cash flow from operations, maintaining a solid liquidity position with $759 million in total liquidity. The petroleum segment’s throughput was 172,000 barrels per day, with a light product yield of 99%.

Financial Highlights

• Revenue: $1.76 billion, up from the forecasted $1.68 billion.
• Adjusted loss per share: $0.23, missing the forecasted loss of $0.06.
• EBITDA loss: $24 million; adjusted EBITDA: $99 million.
• Cash flow from operations: $176 million.
• Free cash flow: -$12 million.

Earnings vs. Forecast

CVR Energy’s Q2 earnings report showed a stark contrast between actual and forecasted results. The adjusted EPS was -$0.23, significantly missing the forecast of -$0.06, representing a 283.33% negative surprise. This miss is substantial compared to previous quarters, where earnings were closer to expectations. On the revenue side, the company delivered a positive surprise of 4.76%, with actual revenue of $1.76 billion against a forecast of $1.68 billion.

Market Reaction

Following the earnings announcement, CVR Energy’s stock fell 8.04% in after-hours trading, dropping from $29.12 to $26.78. This decline reflects investor disappointment with the earnings miss. Despite this, the stock remains above its 52-week low of $15.10, indicating some resilience. The broader energy sector has faced volatility, which may have compounded the negative reaction. Year-to-date, CVI has delivered a remarkable 44.13% return, according to InvestingPro data, though analysts have recently revised their earnings expectations downward.

Outlook & Guidance

Looking forward, CVR Energy has set a petroleum segment throughput estimate of 200,000-215,000 barrels per day for 2025. The company plans to spend $165-200 million on capital expenditures, with approximately $190 million allocated for turnaround spending. The fertilizer segment is expected to achieve an ammonia utilization rate of 93-98%.

Executive Commentary

CEO Dave Lamp expressed optimism about the long-term refining prospects, emphasizing the company’s desire to return to being a "dividend machine." He also noted the evolving nature of the energy transition, suggesting it will differ from expectations set three to four years ago.

Risks and Challenges

• The company faces negative impacts from mark-to-market adjustments on RFS obligations, totaling $89 million.
• Inventory valuation issues resulted in a $32 million unfavorable impact.
• CVR Energy is exposed to volatile RIN prices, which have risen over 70% year-over-year.
• The company operates in a single market with limited diversification, posing strategic risks.
• Upcoming capital and turnaround spending could strain financial resources.

Q&A

During the earnings call, analysts inquired about potential strategic diversification and the company’s commitment to reinstating dividends. Executives highlighted ongoing discussions about small refinery exemptions and expressed cautious optimism about the refining outlook.

Full transcript - CVR Energy Inc (CVI) Q2 2025:

Christine, Conference Operator: Greetings, and welcome to the CVR Energy Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Richard Roberts, Vice President, Financial Planning and Analysis and Investor Relations.

Thank you, sir. You may begin.

Richard Roberts, Vice President, Financial Planning and Analysis and Investor Relations, CVR Energy: Thank you, Christine. Good afternoon, everyone. We very much appreciate you joining us this afternoon for our CVR Energy second quarter twenty twenty five earnings call. With me today are Dave Lamp, our Chief Executive Officer, Dan Newman, our Chief Financial Officer and other members of management. Prior to discussing our twenty twenty five second quarter results, let me remind you that this conference call may contain forward looking statements 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 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 reconciliation to the most directly comparable GAAP financial measures, are included in our twenty twenty five second quarter earnings release that we filed with the SEC and Form 10 Q for the period and will be discussed during the call. With that said, I’ll turn the call over to Dave.

Dave Lamp, Chief Executive Officer, CVR Energy: Thank you, Richard. Good afternoon, everyone, and thank you for joining our earnings call. Yesterday, we reported a second quarter consolidated net loss of $90,000,000 and a loss per share of 1.14 EBITDA was a loss of $24,000,000 Although crack spreads increased in the quarter, our results were impacted by an unfavorable mark to market impact of our outstanding RIN obligation and reduced throughputs following the completion of the planned turnaround at Coffeyville. In our Petroleum segment, combined total throughput for the 2025 was approximately 172,000 barrels per day with light product yield of 99% on crude oil processed. The planned turnaround at Coffeyville was complete in April and we ran at a reduced crude rate for most of the quarter as we drew down intermediate inventories built during the turnaround.

We resumed full operating rates at Coffeyville in July, and we do not currently have any additional turnarounds planned for the refining segment for the duration of 2025 and 2026. We currently expect our next planned turnaround to be at Wynnewood in 2027. Group three two-one-one benchmark cracks averaged $24.02 per barrel for the second quarter compared to $18.83 per barrel for the second quarter last year. Average RIN prices for the 2025 were approximately $1.11 on an RVO weighted basis, an increase of over 70% from the prior year period. On a per barrel basis, RINs were approximately $6.08 per barrel, more than 25% of the Group three two-one-one crack spread for the quarter.

Regarding RFS, the Supreme Court ruled on the Venue case in the second quarter, finding that Venue for challenges of EPA’s 2022 denial of certain small refinery exemptions lies exclusively in the DC Circuit. This ruling should make little difference in our case since the DC Circuit, like the Fifth Circuit before it, also held that EPA’s denials of small refinery exemptions were arbitrary, capricious, and contrary to law. The comment period for the proposed 2026 2027 Renewable Volume Obligation ends in August and EPA has indicated it intends to rule on the twenty twenty four SRE applications before finalizing the RVOs. In the meantime, we have already filed our twenty twenty five SRE petition and this will be a true test to see if EPA can finally meet its ninety day deadline to rule on SRE petitions. Given EPA has indicated it intends to clear the backlog of outstanding SRE petitions, we are holding back for now on filing additional lawsuits against EPA, though we will be prepared to rapidly respond if appropriate.

We remain hopeful under President Trump’s leadership EPA will see the critical role small refineries like ours plays in supporting rural communities across America and exactly why Congress included a small refinery exemption in the renewable fuels legislation. For the 2025, we processed approximately 14,000,000 gallons of vegetable fuel oil in the renewable diesel unit at Wynnewood, which was impacted by some unplanned downtime in May. Gross margin was approximately $0.38 per gallon for the 2025 compared to $0.43 per gallon for the 2024. As we continue to await for final regulations from the IRS, we did not recognize any PTC benefit in the quarter. As a reminder, we believe we would have the ability to retroactively claim credits once the regulations are finalized.

In the Fertilizer segment, we had some planned and unplanned downtime at both facilities during the quarter, which resulted in an ammonia utilization rate of 91%. Nitrogen fertilizer prices for the 2025 were higher for both UAN and ammonia compared to the 2024, and we saw strong demand for both products through the spring planting season. Now let me turn the call over to Dane to discuss our financial highlights.

Dan Newman, Chief Financial Officer, CVR Energy: Thank you, Dave, and good afternoon, everyone. For the 2025, our consolidated net loss was $90,000,000 losses per share were $1.14 and EBITDA was a loss of 24,000,000 Our second quarter results include a negative mark to market impact on our outstanding RFS obligation of $89,000,000 an unfavorable inventory valuation impact of $32,000,000 and unrealized derivative losses of 2,000,000 Excluding the above mentioned items, adjusted EBITDA for the quarter was $99,000,000 and adjusted loss per share was $0.23 Adjusted EBITDA on the Petroleum segment was $38,000,000 for the second quarter, with a slight increase from the prior year period driven by the increase in Group three crack spreads, offset by increased RINs prices and lower throughput volumes. Our second quarter realized margin adjusted for RIN mark to market impacts, inventory valuation and unrealized derivative losses was $9.95 per barrel, representing a 41 percent capture rate on the Group 3,211 benchmark. Our capture rate for the second quarter was negatively impacted by the timing of product sales as coffee was still coming out of turnaround and running through expensive feedstocks in April when cracks were at their highest, and our sales volumes were mostly weighted towards June when cracks were at the lowest levels of the quarter.

Net RINs expense for the quarter, excluding mark to market impact, was $62,000,000 or $3.93 per barrel, which negatively impacted our capture rate for the quarter by an additional 20%. The estimated accrued RFS obligation on the balance sheet was $548,000,000 at June 30, representing $5.00 8,000,000 RINs mark to market at an average price of $1.8 As a reminder, our estimated outstanding RIN obligation excludes the impact of any small refinery exemptions. Direct operating expenses in the Petroleum segment were $6.45 per barrel for the second quarter, compared to $6.94 per barrel in the 2024. The decrease in direct operating expense per barrel was primarily due to lower repair and maintenance expenses. Adjusted EBITDA on the Renewables segment was a loss of $4,000,000 for the second quarter, a decline from the 2024 adjusted EBITDA loss of $2,000,000 The decrease in adjusted EBITDA was driven by a combination of a decline in the HOGO spread due to higher soybean oil prices and lower diesel prices, along with the loss of the BTC and nothing booked for the PTC while we wait final regulations from the IRS.

Adjusted EBITDA in the Fertilizer segment was $67,000,000 for the second quarter with higher UAN and ammonia sales pricing and volumes driving the increase relative to the prior year period. The partnership declared a distribution of $3.89 per common unit for the 2025. As CVR Energy owns approximately 37% of CVR Partners’ common units, we will receive a proportionate cash distribution of approximately 15,000,000. Cash flow from operations for the 2025 was 176,000,000 and free cash flow was a use of 12,000,000. Significant uses of cash in the quarter included $189,000,000 of capital and turnaround spending, a $70,000,000 prepayment on the term loan, 26,000,000 for cash interest, and $15,000,000 paid for the non controlling interest portion of the CVR Partners first quarter twenty twenty five distribution.

Working capital was a cash source, partially associated with crude oil and feedstock inventory draws following the Coffeyville turnaround. Total consolidated capital spending on an accrual basis was 36,000,000, which included 23,000,000 in the petroleum segment, 10,000,000 in the fertilizer segment, and $2,000,000 in the renewable segment. Turnaround spending on an accrual basis in the second quarter was approximately $24,000,000 For the full year 2025, we estimate total consolidated capital spending to be approximately 165,000,000 to 200,000,000 and turnaround spending to be approximately $190,000,000 Turning to the balance sheet, we ended the quarter with a consolidated cash balance of $596,000,000 which includes $114,000,000 of cash in the fertilizer segment. Total liquidity as of June 30, excluding CVR Partners, was approximately $759,000,000 which was comprised primarily of $482,000,000 of cash and availability under the ABL facility of $277,000,000 During the quarter, we paid down $70,000,000 on the term loan and subsequent to quarter end, we repaid an additional $20,000,000 in total representing a 28% reduction and leaving the current principal balance at approximately $235,000,000 Looking ahead to the 2025, for our Petroleum segment, we estimate total throughputs to be approximately 200,000 to 215,000 barrels per day, direct operating expenses to range between $105,000,000 and $115,000,000 and total capital spending to be between 25,000,000 and $30,000,000 For the fertilizer segment, estimate our ammonia utilization rate to be between 9398%, with some downtime planned at East Dubuque for control system upgrades.

We expect direct operating expenses excluding inventory impacts to be between 60,000,000 and $65,000,000 and total capital spending to be between 20,000,000 and $25,000,000 For the Renewables segment, we estimate third quarter twenty twenty five total throughput to be approximately 16 to 20,000,000 gallons, direct operating expenses to range between 8,000,000 and 10,000,000 and total capital spending to be between 1,000,000 and 3,000,000. With that, Dave, I’ll turn it back over to you.

Dave Lamp, Chief Executive Officer, CVR Energy: Thanks, Dan. Refining market conditions continue to improve in the second quarter. The combination of the heavy spring maintenance season and the closure of one U. S. Refinery led to a decline in refined products inventories, particularly diesel inventories, which are nearly 15% below twenty twenty one-twenty twenty four averages.

Refined product demand in The U. S. Remains steady, with year to date gasoline and diesel demands both in line with twenty twenty one to twenty twenty four averages. Within the Mid Con where we operate, we’re seeing similar trends, with gasoline and diesel inventories at or below recent historical averages and demand remains steady. We are also seeing strong premium gasoline pricing in the Group three, which benefits our system as premium typically makes up 15% of our gasoline pool.

The alkylation project at Wynnewood should further increase our ability to make premium gasoline as well. This project is currently 40% complete and expected to come online in 2027. We are also in the process of revamping tankage and pipelines to allow us to produce jet fuel out of Coffeyville, where we’ve already made some progress on the commercial front. With higher RIN prices and jet demand, the between diesel is open. Overall, we are cautiously optimistic about near and medium term outlook for the refining sector.

As I mentioned, refined product inventories are relatively low and there are still several refineries in The US and Europe that are scheduled to shut down. In addition, the forward curve for diesel remains backwardated, providing no incentive to increase inventories in the near term. Outside of the startup of new refineries in Mexico and Nigeria, there are a few new refineries under construction around the world that will be starting over the next few years. Meanwhile, refined product demand appears stable. Any pro growth initiatives from the Big Beautiful Bill should be a positive for GDP growth and demand for transportation fuels in The United States.

In the Renewables segment, we’ve been near breakeven on an adjusted EBITDA basis year to date, with the loss of the blenders tax credit and an increase in soybean oil pricing mostly being offset by increased RIN prices. Assuming we book PTC in line with proposed regulations, our year to date adjusted EBITDA in the Renewables segment would have increased approximately $6,000,000 We have ordered our next load of renewable diesel catalysts and we currently plan to remain in renewable diesel production as we wait to see how credits line out with the PTC and other potential positive changes to come out of the big beautiful bill. We will also continue to weigh all our options for the future of our renewable business. As we have stated in our last few earnings calls, we remain fully willing to participate in the renewable space, but we cannot invest in additional time or capital without further assurances from the government that the government will support the business it created. In the fertilizer segment, the spring planting season went well and demand for nitrogen fertilizer is strong, with corn acres planted increasing 4% over twenty twenty four levels.

Recent USDA estimates are calling for an inventory carryout levels for corn and soybeans at 10% or less for 2026, which are below the ten year averages. Between robust demand in the spring and tight supplies of nitrogen fertilizer in The U. S. And globally, we are seeing continued support for pricing and the normal seasonal pricing declines for the summer fill. And fall pre play of UAN have been much narrower this year than past.

Looking at the 2025, quarter to date metrics are as follows: Group two-one-one cracks have averaged 25.57 per barrel, Brent TI spread at $2.28 per barrel, and the WCS differential at $10.73 per barrel under WTI. The Jobo spread averaged a negative $1.75 As of yesterday, Group three two eleven cracks were 25 per barrel, Brent TI was $3.24 per barrel and WCS was $11.65 under WTI. The HOBO spread was a negative $1.85 per gallon and RINs were approximately $6.9 per barrel. Prompt fertilizer prices are approximately $600 per ton for ammonia and $300 for UAN. In conjunction with improving refinery fundamentals and the completion of payments of the Coffeyville turnaround in the second quarter, we were pleased to begin making progress on our deleveraging strategy by paying 90,000,000 of the principal on the term loan between the second and third quarters.

Returning our balance sheet to target leverage levels is key for us in the near term, in addition to our constant focus on safe and reliable operations of our facilities. We will also continue to look for ways to improve capture, reduce costs, and ultimately grow our business profitably. Finally, as mentioned in our earnings release, I have announced my intention to retire as President and CEO at the end of the year. It’s been a privilege to have spent the past forty five years in the boiling oil industry that I love. I truly enjoy working with the talented CVR team and look forward to continuing to serve as a member of its board.

Mark Pytosh has done great things for both our companies. I look forward to watching him lead CVR Energy into the future. With that, operator, we’re ready for questions.

Christine, Conference Operator: Thank you. We will now be conducting a question and answer session. We ask that all callers limit themselves to one question and one follow-up. If you have additional questions, you may requeue, and those questions will be addressed time permitting. If you would like to ask a question, please press star one on your telephone keypad.

A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Paul Cheng with Scotiabank. Please proceed with your question.

Paul Cheng, Analyst, Scotiabank: Hey, Dave. Good morning or good afternoon. First, just want to congratulate on the and best of luck with your pending retirement. We really appreciate over the years your insight and very candid comments. We really appreciate that.

Dave Lamp, Chief Executive Officer, CVR Energy: Thank you, Paul.

Paul Cheng, Analyst, Scotiabank: I guess two questions. One, on cost of view, I’m just curious then. From a pending standpoint, is it really necessary that to have all this excess inventory and then you get into a situation where when margin is very strong, but you can’t run yet at full because you have to work off in that inventory. I assume that there have some negative financial impact in the quarter. Can you quantify it?

And also from a pending standpoint, is there any way to do so that we can minimize that kind of impact in the future? That’s the first question. Second question that I know you’re a little bit early. Can you maybe, Dane, give us some idea that how 2026 CapEx and turnaround that is going to look like, given that you don’t have any major turnaround for next year? Thank you.

Dave Lamp, Chief Executive Officer, CVR Energy: Paul, on your first question, is there a way to mitigate the inventory we build during a turnaround season? There is some we could do there, leave it stored in tankage for a period of time. But the problem with that is if you have another problem, you have nowhere to go. Most of our strategy is to pull the inventory back towards target so we have some degrees of freedom should some other incident occur like weather or something else that we can’t control. Does that second part of your question on the first question, I can’t remember now.

Paul Cheng, Analyst, Scotiabank: What’s the financial impact in the quarter because of that?

Dave Lamp, Chief Executive Officer, CVR Energy: David, do you have a few follow ups?

Dan Newman, Chief Financial Officer, CVR Energy: Yes. I’ll kind of cover the capture overall, Paul. So obviously, 41% was a decline from the first quarter’s performance. The draw definitely had an impact. As I mentioned, sales timing, while we were at lower throughputs and drawing that inventory, cracks were at their best of the quarter.

Rolling into June, when we got back to full rates, cracks were depressed. In addition, that feedstock draw that we had was more heavily weighted towards gasoline, which relative to the crack was also obviously disadvantaged against diesel. Kind of pulling all of those together, our estimate is, call it, 7% to 9% on capture, it would have pushed us closer to 50%.

Paul Cheng, Analyst, Scotiabank: About on the second question about the CapEx and turnaround for next year?

Dan Newman, Chief Financial Officer, CVR Energy: Yeah, so Paul for ’26, obviously, we wait till later in the year to give guidance on capital. I don’t think there’s anything at this time that’s gonna say it’s gonna be an exceptional year from the past years. And in the prepared remarks, we did mention we don’t have any planned turnarounds till potentially with the Wynnewood turnaround in ’27. And depending on timing of when that turnaround would happen, there could be some pre spending towards the end of the year. But if it happens later in the year, I wouldn’t expect that either.

Paul Cheng, Analyst, Scotiabank: Okay. We do. Thanks.

Dave Lamp, Chief Executive Officer, CVR Energy: Thank you.

Christine, Conference Operator: Our next question comes from the line of Neil Mehta with Goldman Sachs. Please proceed with your question.

Neil Mehta, Analyst, Goldman Sachs: Yes. Good afternoon, Dave. Thanks for all the guidance over the years, and we’re going to miss you very much. Thanks, Neil. Well, you know, maybe that’s a good place to start which is as Mark steps into the role, there areas of strategic focus that you think CVI should really be focused on?

And how do you think about this being a continuation of the existing strategy or whether there’s some white space that you want the business to move towards?

Dave Lamp, Chief Executive Officer, CVR Energy: Well, I think, Neil, that you’ve probably heard me say this before. Our biggest issue is we’re in one single market with one single basically one single driver in terms of the crack. I hope in the future, the bid ask narrows somewhat on new assets that were we could either acquire something that diversify us to some degree or even be acquired by someone to accomplish that same function. So, and that’s nothing new in our repertoire. So, what we end up doing from a fertilizer standpoint, so it’s an interesting question.

There’s a lot of value there and fertilizer appears to be very short and there’s geopolitical things that are happening that could make that even worse. So I’m sure Paul, Markle has his hands full trying to figure all that out going down the road.

Neil Mehta, Analyst, Goldman Sachs: And Dave, you think about a little bit of a longer term question, you’ve always had a very good perspective on the refining cycle. There’s a rich debate out right now whether we’re in a new refining up cycle, given limited capacity adds or we’re still going to go through a tough period given crude differentials and demand uncertainty. What’s your multi year outlook for refining?

Dave Lamp, Chief Executive Officer, CVR Energy: Well, I think there’s no new construction that I can find worldwide until 02/1930. Demand is still, I wouldn’t call it growing rapidly, but I’m hoping with a big beautiful bill that demand will take off to some degree just from GDP growth and just the demand for products. And I think there’s no question, there’s a lot of countries that would envy the kind of consumption that The US enjoys and the standard of living. So that constant pressure is there and the alternatives are not particularly attractive, especially when you have crude in a $50 to $70 range. So I think it’s very positive just from the standpoint that there’s a reason that oil enjoys the market share it does is because there’s nothing better out there.

From that standpoint, I think it’s still a bright future and we’ll need this industry for many, many years.

Neil Mehta, Analyst, Goldman Sachs: All right, Dave. Thanks for everything.

Dave Lamp, Chief Executive Officer, CVR Energy: You’re welcome.

Christine, Conference Operator: Our next question comes from the line of Manav Gupta with UBS. Please proceed with your question.

Manav Gupta, Analyst, UBS: Hey, Dave. Congrats on the retirement. We really appreciated all your insights over the years. My question here is, looks like you are more constructive on refining than than sometimes you have been in the past. You also do not have any major plant turnaround approaching.

And, yes, you have lower leverage, but at what point do you and the board sit together and think about rewarding shareholders with some kind of a dividend reinstatement, if you could talk about that?

Dave Lamp, Chief Executive Officer, CVR Energy: Sure, Manav. I think first off, I’d just say we’re well known in the industry to be a dividend machine and we’d love to return to that as fast as possible. I think just I’m much more optimistic than I was just because I just believe the penetration of EVs is going to slow. It has to some degree already and Americans will wake up and the rest of the world will wake up that the most versatile and flexible fuel in the world is gas and diesel. And that I’m afraid is very difficult to change and that makes me much more optimistic.

Reality has come in on the energy transition and it’s going to be much different than what it was thought of three, four years ago. So on that basis, I think it’s got a bright future. Second part of your question was I forgot now.

Manav Gupta, Analyst, UBS: No, I think you’re for a dividend at some stage that you mentioned that you have been known in the industry as cash machine. How should we think about a possible dividend reinstatement there?

Dave Lamp, Chief Executive Officer, CVR Energy: Well, the Board looks at this all the time. So and I think our strategy has and you saw us make here in just recently a $90,000,000 pay down. We’re going to keep that trend going or something of it most likely, although the board looks at it all the time. But I think our goal is to get back to a dividend of some reasonable level that we can support long term. And when exactly that will happen, I can’t say, But that’s the goal.

Manav Gupta, Analyst, UBS: Perfect. Quick follow-up here is on the small refinery exemptions. In the past, whenever you have been denied, have gone all the way to Supreme Court and proven your case. But look, there are a number of people who have applied for these small refinery exemptions. Someone some people may not be having as compelling as case as you.

So just trying to understand from your view, how do you think this plays out? And if small refinery exemptions are actually given out, do you think there would be some kind of a reallocation from the top or would it be without reallocation? What are you hearing and what are your thoughts on that?

Dave Lamp, Chief Executive Officer, CVR Energy: Well, I think I’ve said many times that Wynnewood is our Wynnewood refinery is a poster child for an SRE. And I think just the numbers are compelling if you look at closely. And EPA has had these for years and they could see it without a doubt we’re disproportionately economically harmed by this RFS rule. And it’s much more of an issue when RINs are high than it is when RINs are low. And we just went through a cycle here and we’re on an upcycle of RIN price with the BTC gone, the PTC sort of in question mark and a huge RVO increase for ’26 and ’27.

So I don’t know that this program ever goes away, but Congress always intended to have a relief valve for small refiners that operate in rural areas that support those communities. I mean the supply lines are long for a lot of these small refineries that are in rural areas that just don’t have alternative and the fuel price is going to go up. Congress knew this and EPA has fought it every direction they could almost to absurdity. The courts have ruled arbitrary capricious and counter to the law, But I’ve always said this regulation was the law was written poorly. It was implemented ridiculously.

It’s been managed politically and it just doesn’t it’s untenable for people that are in the business to think that you’re just going to deny all small refinery waivers across The United States without any consideration. It even gets to the point where you have the Department of Energy that does the scoring, where they do the scoring so rigorously like it’s politically influenced and not facing reality. So we’ll be back in court if it doesn’t go our way, without a doubt. I think we’ve had some indications from the EPA including Zeldin that they’re going to take relook at this and make more sense out of it And they’re gonna clear the backlog and get back on time, which means, and we’re gonna test them already with we submitted our 25 application and they’ve done nothing on it yet that we know of, but the ninety days aren’t up yet. So we’ll find out if they’re really serious with that test.

On the reallocation comment, I believe there’s nothing in the law that states you have to reallocate SREs. In fact, I’m positive there isn’t. EPA has made that up in my opinion and they’re doing that to please the other lobby that’s against any kind of change to the RFS. It’s sort of a ridiculous position, but it’s never been challenged in court that I know of and it might get to that. If I was certainly a large refiner, which I am, I’m a large and a small, I would take the position that there’s nothing in the law requires you to reallocate.

So that’s kind of currently where we stand.

Manav Gupta, Analyst, UBS: Thank you so much, sir.

Richard Roberts, Vice President, Financial Planning and Analysis and Investor Relations, CVR Energy: You’re welcome.

Christine, Conference Operator: We have reached the end of the question and answer session. I’d now like to turn the floor back over to management for closing comments.

Dave Lamp, Chief Executive Officer, CVR Energy: Again, I’d like to thank you all for your interest in CVR Energy. Additionally, I’d like to thank our employees for their work and their commitment towards safe, reliable and environmentally responsible operations. We look forward to reviewing our third quarter results in 2025 in our next earnings call. Thank you all very much.

Christine, Conference Operator: 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.

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