CVR Energy Inc . (NYSE: NYSE:CVI) has reported a consolidated net loss of $122 million in its third quarter of 2024, translating to a loss per share of $1.24. This loss was primarily attributed to unplanned downtimes and challenging market conditions. Despite these setbacks, the company remains focused on preserving liquidity and strengthening its balance sheet through strategic measures, including the suspension of its quarterly dividend and cost-cutting initiatives.
Key Takeaways
- CVR Energy experienced a consolidated net loss of $122 million, with a loss per share of $1.24.
- The company reported a throughput of approximately 189,000 barrels per day, with an 85% crude oil utilization rate.
- The quarterly dividend was suspended to preserve cash due to challenging refining market conditions.
- Adjusted EBITDA for the quarter was $63 million, with the fertilizer segment performing better due to increased prices and demand.
- CVR Energy plans to maintain liquidity, with total available cash of $534 million as of September 30, 2024.
Company Outlook
- CVR Energy estimates fourth quarter throughput between 200,000 to 215,000 barrels per day.
- The company is exploring options to increase liquidity, including access to capital markets.
- Demand for refined products is expected to improve by late 2024, with gasoline and diesel inventories below five-year averages.
Bearish Highlights
- The fall turnaround season may see a decline in refinery utilization to mid-80%.
- Ongoing pressures from electric vehicles and LNG market dynamics could lead to below-average mid-cycle margins in 2025.
Bullish Highlights
- Nitrogen fertilizer prices are expected to rise, with ammonia and UAN prices showing year-over-year increases.
- Positive results from the Wynnewood renewable diesel unit, with discussions ongoing for a potential conversion to 100% SAF.
Misses
- The company closed out its crack swap hedging in Q2, with gains expected to roll off through Q4 and into 2025.
- No significant plans for further material hedging have been announced.
Q&A Highlights
- Management discussed capital expenditures for the next year, focusing on essential growth projects.
- The potential conversion of the Wynnewood RD plant back to crude processing is under consideration, but current profitability from renewable diesel is encouraging.
CVR Energy continues to navigate a challenging refining environment, making tough decisions to support future growth and shareholder value. With a strategic plan in place, the company aims to optimize its operations and prepare for potential improvements in refining margins. Despite the current setbacks, CVR Energy is committed to executing upcoming turnarounds safely and cost-effectively while prioritizing environmentally responsible operations. The management team expressed gratitude for employee efforts and looks forward to discussing Q4 results in the next earnings call.
InvestingPro Insights
CVR Energy's recent financial performance aligns with the challenging market conditions described in the earnings report. According to InvestingPro data, the company's revenue for the last twelve months as of Q3 2024 stood at $7.865 billion, with a significant revenue decline of 19.13% over the same period. This decline is even more pronounced in the quarterly figures, with a 27.32% drop in Q3 2024 compared to the previous year.
The company's profitability has been under pressure, as evidenced by its current P/E ratio of 24.79, which is relatively high for the refining sector. This suggests that investors are paying a premium for each dollar of earnings, possibly anticipating a future turnaround in the company's fortunes.
InvestingPro Tips highlight some important aspects of CVR Energy's current situation. One tip notes that the stock is trading near its 52-week low, which correlates with the reported net loss and challenging market conditions. Another tip points out that CVR Energy pays a significant dividend to shareholders, with a remarkable dividend yield of 19.38% as of the latest data. However, it's crucial to note that the company has suspended its quarterly dividend as mentioned in the article, which aligns with another InvestingPro Tip indicating that the dividend has grown negatively by 12.5% over the last twelve months.
Despite the current headwinds, InvestingPro Tips suggest that analysts predict the company will be profitable this year, which could provide some reassurance to investors. Additionally, the company operates with a moderate level of debt, which may offer some financial flexibility as it navigates through this difficult period.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for CVR Energy, providing a deeper insight into the company's financial health and market position.
Full transcript - CVR Energy Inc (CVI) Q3 2024:
Operator: Greetings, and welcome to the CVR Energy Third Quarter 2024 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Richard Roberts, Financial Planning and Analysis and Investor Relations. Thank you, sir. You may begin.
Richard Roberts: Thank you, Christine. Good afternoon, everyone. We very much appreciate you joining us this afternoon for our CVR Energy third quarter 2024 earnings call. With me today are Dave Lamp, our Chief Executive Officer; Dane Neumann, our Chief Financial Officer; and other members of management. Prior to discussing our 2024 third 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 maybe deemed to be forward-looking statements. You are cautioned that these statements maybe affected by important factors set forth in our filings with the Securities and Exchange Commission and our latest earnings release. As a result, actual operation of the results may differ materially from results discussed in the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise, except to the extent required by law. This call also includes various non-GAAP financial measures. The disclosures related to such non-GAAP measures, including reconciliation of the most directly comparable GAAP financial measures are included in our 2024 third 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: Thank you, Richard. Good afternoon, everyone, and thank you for joining our earnings call. Yesterday, we reported third quarter consolidated net loss of $122 million and a loss per share of $1.24. EBITDA was a loss of $35 million. Our results were impacted by unplanned downtime at both facilities during the quarter, partially due to external power supply outages along with an unfavorable mark-to-market impact on our outstanding RFS obligation and negative inventory readout validation impacts due to the declining crude oil price. With the upcoming major turnaround planned at Coffeyville next year maintaining adequate liquidity and a strong balance sheet is a primary focus as we navigate the currently challenging refining market. In light of this, the Board of Directors has elected to suspend the quarterly dividend as we look to preserve cash on the balance sheet. While this was a difficult decision, we believe it is an appropriate course of action given our near-term cash needs and the current forward strip for crack spreads into 2025. In our Petroleum segment, combined total throughput for the third quarter of 2024 was approximately 189,000 barrels per day and light product yield was 99% on crude oil processed. We had a very difficult operational quarter with multiple plant interruptions, some of which were related to or were the result of external power supply outages. Crude oil utilization for the quarter was 85% compared to our third quarter crude utilization rate of 95% over the past five years. We estimate lost profit opportunity was approximately $23 million in the third quarter, of which approximately $13 million was related to external power issues. Year-to-date total lost profit opportunity was approximately $73 million. Group 3 2-1-1 benchmark cracks averaged $19.40 per barrel for the third quarter of 2024 compared to $39.10 per barrel for the third quarter of last year. Average RIN prices for the third quarter of 2024 also declined from the prior year period and ended the quarter at approximately $0.74 on an RVO weighted basis. Although this was a 7% increase from last quarter. Regarding the RFS, the situation remains incomprehensible. No less than three federal courts including the United States Supreme Court have told EPA in no uncertain terms that small refinery hardship exemptions exist to protect small refiners who suffer disproportionate economic harm. Both the Fifth Circuit and the DC circuit called EPA's denial of the most hardship petitions arbitrary and capricious vacating those denials and reminding them back to EPA. Incredibly, despite this expressed statutory obligation to rule on hardship petitions within 90 days, EPA has done nothing, even though almost a year has passed since the Fifth Circuit loss. EPA's egregious conduct has level pending petitioners hanging in limbo for years and the financial impact of their actions threaten the very existence of small refineries like ours. That a US federal agency can be allowed to flagrantly and repeatedly violate the law without recourse shakes the very foundation of our government. No one is above the law including EPA. So I call you out Administrator Regan. EPA has broken, the RFS violated the law persistently ignores very clear direction from the courts. This must stop now. For our part, we continue to seek relief in court not only through to secure small refinery exemptions that Wynnewood deserves but to force EPA to remedy the root cause of small refinery harm. EPA's decision to violate the RFS law allowing non-obligated parties to produce, buy, sell, trade and hoard RINs resulting in manipulation of the RIN market. For the third quarter of 2024, we processed approximately 20 million gallons of vegetable oil feedstocks through the renewable diesel unit at Wynnewood. The HOBO spread weakened slightly from the second quarter of 2024 with lower diesel prices, although this was offset by higher prices for D4 RINs and LCFS credits, which helped drive a positive result for the quarter. As a reminder, our renewable diesel business is currently reported in our corporate and other segments. In the fertilizer segment, both facilities ran well during the quarter with a consolidated ammonia utilization of 97%. Nitrogen fertilizer prices for the third quarter of 2024 increased relative to the third quarter of 2023 and we saw a strong demand for ammonia and UAN over the summer. Now let me turn the call over to Dane to discuss our financial highlights.
Dane Neumann: Thank you, Dave, and good afternoon, everyone. For the third quarter of 2024, our consolidated net loss was $122 million, losses per share were $1.24 and EBITDA was a loss of $35 million. Our third quarter results include a negative mark-to-market impact on our outstanding RFS obligation of $59 million and unfavorable inventory valuation impact of $30 million and unrealized derivative losses of $9 million. Excluding the above-mentioned items, adjusted EBITDA for the quarter was $63 million and adjusted loss per share was $0.50. Adjusted EBITDA in the Petroleum segment was $24 million for the third quarter, with the decline from the prior year period primarily driven by lower product cracks in Group 3 and reduced throughput volumes due to the downtime at both facilities. Our third quarter realized margin, adjusted for RIN mark-to-market impacts, inventory valuation and unrealized derivative gains was $8.23 per barrel, representing a 42% capture rate on the Group 3 2-1-1 benchmark. We estimate the unplanned downtime in the quarter negatively impacted our capture rate by approximately 7% related to the resale of gathered crude oil and the purchase of refined products while the backwardation in the market drove an additional 6% unfavorable capture impact. RINs expense for the quarter excluding the mark-to-market impact was $46 million or $2.62 per barrel, which negatively impacted our capture rate for the quarter by approximately 14%. The estimated accrued RFS obligation on the balance sheet was $374 million at September 30, representing 467 million RINs mark-to-market at an average price of $0.80. As a reminder, our estimated outstanding RIN obligation excludes the impact of any small refinery exemptions. Direct operating expenses in the Petroleum segment were $5.72 per barrel for the third quarter compared to $5.39 per barrel in the third quarter of 2023. The increase in direct operating expense per barrel was primarily driven by lower throughput volumes, partially offset by lower repair and maintenance expenses and natural gas and electricity costs. Adjusted EBITDA in the Fertilizer segment was $36 million for the third quarter, with higher market prices for ammonia and UAN and lower feedstock and operating expenses driving the increase relative to the prior year period. The partnership declared a distribution of $1.19 per common unit for the third quarter of 2024. The CVR Energy owns approximately 37% of CVR Partners (NYSE:UAN) common units. We will receive a proportionate cash distribution of approximately $5 million. Cash provided by operations for the third quarter of 2024 was $48 million, primarily driven by $87 million of cash flow from the fertilizer segment. Free cash flow for the quarter was $13 million also attributable primarily to the Fertilizer segment. Significant uses of cash in the quarter included $50 million for the CVI second quarter 2024 dividend, $39 million for cash interest, $36 million of capital and turnaround spending and $13 million paid for the non-controlling interest portion of the CVR Partners' second quarter 2024 distribution. Total consolidated capital spending on an accrual basis was $39 million which included $28 million in the Petroleum segment, $10 million in the Fertilizer segment and less than $1 million for the RDU. Turnaround spending in the third quarter was approximately $3 million. For the full year 2024 we estimate total consolidated capital spending to be approximately $170 million to $195 million which represents a reduction of approximately $25 million from our previous estimates. Turnaround spending is expected to be approximately $50 million to $60 million. Turning to the balance sheet. We ended the quarter with a consolidated cash balance of $534 million which includes $111 million of cash in the fertilizer segment. Total liquidity as of September 30 excluding CVR Partners was approximately $713 million which was comprised primarily of $423 million of cash and availability under the ABL facility of $290 million. Looking ahead to the fourth quarter of 2024. For our Petroleum segment, we estimate total throughput to be approximately 200,000 to 215,000 barrels per day. Direct operating expenses to range between $100 million and $110 million and total capital spending to be between $38 million and $42 million. For the Fertilizer segment we estimate our fourth quarter 2024 ammonia utilization rate to be between 92% and 97% with some potential downtime at the third-party air separation unit at Coffeyville expected in the quarter. We estimate direct operating expenses to be approximately $60 million to $70 million excluding inventory impacts and total capital spending to be between $19 million and $23 million. With that Dave, I will turn it back over to you.
Dave Lamp: Thanks, Dane. Although, we saw a slight improvement in the Group three crack spreads from the second quarter levels Overall, refining markets remain challenging. While the Board's decision to suspend the dividend was difficult we believe the key to surviving these downturns in the refinery is maintaining adequate liquidity and protecting the balance sheet while we focus on areas we control safe reliable operations while reducing costs and capital spend. We are currently exploring the potential increase in our liquidity through possible access to capital markets between these efforts cash on hand availability on our undrawn revolver we are confident in our ability to navigate this challenging environment and be well prepared post-turnaround for any improvements in refining margins. Line demand fundamentals for refined products have improved in the second half of 2024 with gasoline and diesel inventories both currently below five-year averages. Gasoline and diesel demand are essentially in line with five-year averages while refined product exports have remained above two million barrels per day. One of the key issues for the US refining in 2024 has been utilization levels that have averaged more than two percentage points higher than the five-year average over the course of the year. So far in the fourth quarter we've seen utilization rates for the US refining fleet decline from the low to mid-90s down to the mid-80s during the fall turnaround season. While this is encouraging ultimately we believe we need to see additional refining capacity rationalization in both the US and globally in order to -- for crack spreads to make a sustained move higher. In the fertilizer segment we believe we are currently in a more of a mid-cycle type environment after the peaks we saw over the past few years and we are encouraged to see ammonia and UAN prices for the third quarter increased relative to the third quarter of last year. The fall harvest is ahead of schedule, nearing completion and conditions look favorable for the fall ammonia application. Nitrogen fertilizer prices for the fourth quarter are up approximately $50 per ton for ammonia and $10 per ton for UAN compared fourth quarter of 2023. Finally in renewables, we are pleased with the third quarter results from the Wynnewood renewable diesel unit with this being the first full quarter of operations with the RD unit with a pretreater. Our discussions with interested party -- counter-parties related to the potential conversion of the Wynnewood renewable diesel unit to 100% SAF are ongoing. As we said before, we would not expect to move forward with the conversion without developing an offtake structure for SAF that would provide us downside protection and minimize our reliance on government credits. Looking at the fourth quarter of 2024. Quarter-to-date metrics are as follows: Group 3 2-1-1 cracks have averaged $18 per barrel, with the Brent TI spread at $3.79 per barrel and the WCS differential at $12.93 per barrel under WTI. Prompt fertilizer prices are approximately $550 per ton for ammonia and $250 per ton for UAN. As of yesterday, Group 3 2-1-1 cracks were $15.83 per barrel. Brent TI was approximately $4.27 and WCS was $12.50 per barrel under WTI. RINs were at $4.29 per barrel. The crack at these levels is well below mid-cycle and may remain this way through the next year. This creates an opportunity for us to focus on positioning our business for the long-term. So we are best equipped to take advantage of favorable market conditions when they return, as I believe they will. So here is our plan. One, strengthen our balance sheet to improve our ability to navigate these market conditions. This includes internal cost-cutting initiatives and reduced hiring. Focus also includes focusing our capital spend on projects that are in flight and those critical to safe, reliable operations. And finally, we are exploring access to capital markets, which could include non-core asset sales. Suspending the dividend is also part of this, but our Board will continue to look at it each and every quarter. What we think this shows is we can make the tough decisions when necessary to support the company's future and our goal of increasing value to our stockholders. Two, focusing on executing our upcoming turnaround safely on time and on budget. Given market conditions, our turnaround timing is it looks to be very, very well planned. Our track record for exceptional project execution things for itself. Although, we've had some hiccups this year, we are a great operator to have demonstrated our ability to successfully execute turnarounds in the past. Three, continue exploring ways to optimize our business. We will not ignore accretive opportunities before us and liquidity measures we announced yesterday should help with this. And four, as always, continue to focus on safe, reliable operations in an environmentally responsible manner. This should result in lower operating costs, better capture rates and ultimately, superior financial performance for our shareholders and stakeholders. In summary, despite the weakness in the current refining market, we continue to believe the U.S. fleet is the most advantage in the world given its high complexity access to low-cost crude oil and natural gas. Our refineries are very competitive among this fleet. We have tremendous confidence in the future, and we see the actions we announced in our intended path forward as best positioning CVR to take advantage of it. With that, operator, we're ready for questions.
Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Neil Mehta with Goldman Sachs (NYSE:GS). Please proceed with your question.
Neil Mehta: Good morning Dave and team and thanks for taking the time. I guess Dave, maybe the first question just around how you're thinking about the dividend. You have always had a little bit more of a variable approach to the distribution raising it in strong times and suspending it previously in some of the weaker times. So just how should we think about the go forward for the dividend? And if we get on the back end of the turnaround and margin environment normalizing, how do you think about resuming it? And then just your framework would be helpful.
Dave Lamp: Yes, Neil, I think, we've said many times that our structure as such really lends ourselves to our preferred method of returning cash to shareholders is via dividend. And I don't think anything's changed on that. Yeah, we're a little bit more variable now. And if you look at our past record of returning cash to shareholders via the dividend, it's pretty strong. We don't really want to take this action, but I think it's necessary in light of -- if you look at the forward curve from -- in 2025, we're printing in the 2017 type numbers. And with the inflation and everything that's been happening in the marketplace, we view mid-cycle has increased to at least $1 a barrel, if not $2. So we're just being cautious. If you look at the turnaround, we have coming up, it's our largest turnaround of the sequence. Every five years, it's around $180 million is about half of our budget a little less than half of our budget for turnarounds in that cycle. And we're just taking it very cautiously.
Neil Mehta: And then -- that's helpful. And then just your perspective on non-core asset sales and the opportunity set because as you talked about accessing the capital markets you mentioned that, you brought up UAN in the past as an area of potential monetization. But just curious on what in the portfolio do you think has -- could be on the table and any sense of how deep into conversations you might be?
Dave Lamp: Well, we have really started anything in earnest, Jeff. But non-core assets as you know, we have about $80 million worth of EBITDA associated with midstream assets including pipelines, trucking and tankage and others. Some of that would be considered for sure. As far as UAN goes, we really have no new news in that area. And as you know, we own 37% of the units and have 100% ownership of the non-economic GP, but nothing really new to report there yet.
Operator: Our next question comes from the line of Matthew Blair with Tudor Pickering. Please proceed with your question.
Matthew Blair: Thank you. Good morning, Dave. Is there a potential to file any insurance claims on the downtime in an effort to recover any of that lost profit opportunity?
Dave Lamp: Yes. We have recovered some money from it. I anticipate that our cost from a PP&I basis was somewhere in the neighborhood of $25 million. So we have a deductible, it comes off of that. But we don't have an answer for it yet, exactly how much we'll get out of that.
Matthew Blair: Sounds good. And then circling back to the question on the potential access to capital markets, should we interpret that to mean that you're considering a potential equity raise? And then also on the non-core asset sales you mentioned some of the midstream assets. What about the gathering system? Would that be core or non-core for CVR Energy?
Dave Lamp: Well, I'll take the second part of that. The gathering system is integral to our system, but it could be monetized, if we absolutely needed to. I don't think that would be our first choice. We have joint ventures and pipelines that feed our refineries that would probably go first. On the liquidity Dane?
Dane Neumann: Yeah. And Matt, as far as capital markets guy, I'd say it's pretty premature to discuss exactly what path we're thinking is, we're assessing all options both magnitude and path to the market. So we'll be sure to update you guys more when we have more of a plan.
Matthew Blair: Great. Thank you very much.
Operator: Our next question comes from the line of John Royall with JPMorgan (NYSE:JPM). Please proceed with your question.
John Royall: Hi. Good afternoon. Thanks for taking my questions. I was just hoping for your updated thoughts on acquisitions. You've been pretty vocal about looking at acquisitions. One of the big assets that we knew publicly was out there was Citgo which is now sold to another party. So how do you view the opportunity set today with that asset now off the market? And does the need to preserve liquidity today, but any inorganic growth ambitions on hold for now?
Dave Lamp: Well, as I mentioned in the prepared remarks, we're not going to turn down any accretive deals that come up. Right now, we don't really have any in the pipeline with the Citgo situation. But we continue to look at the market for any opportunities that can improve our portfolio as such to diversify it. You can tell when we have two refineries we have problems at both it really hits the quarter hard. And that's really our strategy is try to diversify around that. But I don't know that our current situation precludes us from looking at anything in the future and we'll continue to look at that.
John Royall: Okay. Thanks Dave. And then my next question is maybe just a little housekeeping on the hedge program. What should we expect in 4Q in terms of hedging any positive or negative impact as it looks today?
Dane Neumann: Yeah. So in terms of our crack swap hedging, if you recall we predominantly closed that out in the second quarter, recognized a realized gain. Those will roll off through the fourth quarter and through 2025 and you'll see the flip between realized and unrealized. But other than that no significant plan to do any other material hedging at this time.
John Royall: Okay. Thank you.
Operator: Our next question comes from the line of Manav Gupta with UBS. Please proceed with your question.
Manav Gupta: Good morning guys. I just wanted to focus a little bit on the refining macro. You kind of made a number of comments; you did say we will need more refining capacity closures. You also said the margins could be below mid-cycle in 2025. So I'm just trying to figure out like how does this recovery eventually as you also said will happen, happen like I mean, how much capacity do you think globally needs to come in US, and maybe some outside do you think some Mid-Con capacity needs to shutdown? But I'm just trying to understand the path to back to mid-cycle margins what will it take to get there?
Dave Lamp: Well, I think I'd characterize the market right now Manav is oversupplied. It's not a demand problem as such. At least demand in the Mid-Con is as strong as it's ever been even after COVID it hasn't really moved much. As far as the United States go as in general demand is back fairly normal to a five-year level almost. Diesel may be a little bit behind but not much. So I don't think it's a demand question. It's really a supply question and there's just some of the refining capacity that shut down during COVID has been added back. Lyondell is supposedly shutting down at the end of this year, but we'll see if that happens. It hasn't happened yet. And you look at an announced project in California, the shutdown of LA refinery. But I think in general we've almost added back as much as we shut down during COVID. And frankly there's penetration of EVs as it continues to accelerate. The efficiency of the overall fleet, therefore, is improving. So even though vehicle models traveled are up it still looks like efficiency is keeping demand at about at the same level. So I think there are still some topping units that are running as evidenced by the diesel crack where it is today. And those are probably European assets as such. And then there's just new capacity additions that have come in and a couple of new announced Chinese refineries that are going to be built in three or four years that will further impact the market. The good news is there's still growth in the market worldwide. I don't know how that will divide up among the various regions, but I would guess that the US will continue to see continued pressure from EVs and substitution in the LNG phase, because if you look at the gap between crude oil and LNG it's huge. And there's plenty of incentive to convert engines to LNG and other things on the industrial fleet. So it's going to take either grow our way out of it or additional shutdowns to occur.
Manav Gupta: Thank you so much for taking my question.
Dave Lamp: You're welcome.
Operator: Our next question comes from the line of Paul Cheng with Scotiabank (TSX:BNS). Please proceed with your question.
Paul Cheng: Hey guys. Good morning -- good afternoon. Dane maybe I missed it, did you mentioned what is the 2025 CapEx? If not, could you give us a rough estimate? And I think that will be included in cost of view on the major turnaround. How many days is the turnaround going to be and whether it's all going to be in the first quarter, in the current plan or that is going to spill in the second quarter? That's the first question.
Dave Lamp: Paul, it will cross over both quarters slightly. We'll start in late February and it's approximately 45 days of oil-to-oil. But it will cross over into first and second quarter just slightly.
Paul Cheng: Okay. And what's the CapEx for next year currently that you have in mind given the market condition?
Dane Neumann: Yes Paul, we typically don't disclose that until later in the year. We are going through our budgeting process and taking a real hard look at the capital in light of Dave's comments about focusing on spend in flight and focusing only on growth projects or projects critical to the operations of the refinery in a safe and reliable manner. So, we are undergoing that exercise now and we will share the guidance when we have it prepared.
Paul Cheng: Then can I ask that, what is the minimum you need to spend? I'm not saying that you would just spend the minimum. Just curious, what is the minimum given the major turnaround that you expected for next year?
Dave Lamp: What is the minimum? I don't know that we've prepared something like that. We have a lot of projects that are in flight that take multiple years to complete. We are not proposing to stop those just because it costs more to stop them then restart them. But that number, I don't have it. Dane, do you?
Dane Neumann: No.
Dave Lamp: I don't have it accessible to me. So we can probably look it up Paul and we'll get back to you with it.
Paul Cheng: That would be great. A second question. I think Dave in the past you have thrown the idea that you could even convert the RD plant in Wynnewood back into processing crude oil. One of your peers that down in Alabama that they have just done that. If you do not find a partner to allow you to convert that into FAF, what's the thought process and the time line for you to make a decision whether you want to go the other way?
Dave Lamp: Well, I think Paul it goes back to the discussion of whether how short we are on rent. And even with a small refinery waiver for Wynnewood, we're still substantially short on rents. What the hydrocracker does in renewable diesel services, provide us with a relatively low-cost RINs on the margin since the capital sunk. And I think that's a strategy we're going to continue to play out. This quarter, we did make money in renewable diesel and I think with the setup we have and with the pretreater now, we're experiencing good yields. Our biggest issue really is catalyst life and we continue to explore that. We'll probably take us another year or two to really understand that in full throw. But right now, we're repricing margins are, we actually make more money in RD on a per barrel basis than what we do in refining. So, we'll probably stay on that service.
Paul Cheng: Okay. Thank you.
Dave Lamp: You are welcome.
Operator: We have no further questions at this time. I'd like to turn the floor back over to management for closing comments.
Dave Lamp: Thank you all for joining our earnings call and your interest in CVR. Additionally, we'd like to thank our employees for their hard work and commitment towards safe reliable and environmentally responsible operations. And we look forward to reviewing our fourth quarter results with you on the next earnings call. Thank you and have a great day.
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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