Welcome to CVR Energy Third Quarter 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, Stirling Pack, Vice President of Investor Relations for CVR Energy. Thank you. Mr. Pack, you may begin.

Good morning everyone. We appreciate very much your being here for our call this morning. We know that there are a large number of users that have called in and we appreciate that very much. With me this morning is Jack Lipinski, our Chief Executive Officer; Ed Morgan, our Chief Financial Officer and Stan Riemann, our Chief Operating Officer will be participating either in the call or in the question-and-answer time period. So we'll proceed with that introduction. Prior to discussion of our 2009 third quarter results, we are required to make the following Safe Harbor statement. In accordance with Federal Securities Laws, the statements in this earnings call relating to matters that are not historical facts, are forward-looking statements based on management's belief and assumptions using currently available information and expectations as of this date, and are not guarantees of future performance and do involve certain risks and uncertainties including those noted in our filings with the Securities and Exchange Commission. This presentation 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 third quarter 2009 earnings release, which we `d yesterday after the close of the market. With that said, I'll quickly turn the call over to Jack Lipinski, our Chief Executive Officer. Jack?

Thank you Stirling and good morning. Thanks for joining us this morning on our third quarter earnings call. I'll begin by reviewing our results and speak briefly about the operating environment we find ourselves in. Following my comments, Ed Morgan, our CFO, will provide a more detailed look at our reported financials and then we'll conclude the call with your questions. As Stirling mentioned, yesterday after the market closed, we reported a third quarter net loss of $13.4 million or $0.16 per basic share. Our results reflected soft commodity markets loss for refinery throughput due to mechanical issues on two critical units and the cost of extraordinary repairs. Lost refinery production associated with mechanical problems on our FCC and CCR cost us approximately $0.22 per share on a pretax basis for the quarter. Without these interruptions and their associated maintenance costs our reported results would have been near breakeven. We pride ourselves on operational excellence and we are really disappointed with mechanical issues we experienced. Early in the quarter the cat cracker was forced down to an internal catalyst circulation issue. You may recall from our last investor call that I mentioned the unit was being returned to service following repair. Subsequently our CCR, which is a continuous catalytic reforming unit operated at reduced rate severity for a period while we corrected an issue that has been troublesome since the deferred unit was first brought on stream. Permanent repairs were completed and both units are now operating as we would expect. These interruptions did reduce our overall throughput for the quarter. We averaged 101,500 barrels a day compared to 114,700 barrels a day for the same quarter last year. We always try to turn adversity into opportunity and did so during the quarter. We performed maintenance and upgrades on the…

Thank you, Jack. As Jack stated CVR Energy's 2009 third quarter results were a net loss of $13.4 million or $0.16 per basic share. This compared to $99.7 million or $1.16 per diluted share for the third quarter of 2008. As historically reported there are three primary financial statement impact that caused fluctuations in our financial performance from period to period. These impacts are the unrealized gains or losses from our cash flow swap. The inventory impacts due to our First In, First Out or FIFO accounting for inventory and share based compensation expenses or reversals, which are also non-cash items. The consolidation of these three impacts, net of the tax impacts is reported separately in our press release as adjusted net income or loss. The adjusted net loss for the third quarter of 2009 was $6.7 million or $0.08 per basic share compared to an adjusted net income of $57 million or $0.66 per diluted share for the third quarter of 2008. To compare our adjusted net income to what was reported, please note that our adjustments to the third quarter of 2009 were less significant than they've been in prior years. Our unrealized gain on the cash flow swap net of tax for the third quarter of 2009 was only $1.6 million compared to roughly a $59 million gain in the third quarter of 2008. Our impact of FIFO accounting was favorable in the amount of $4.4 million net of taxes for the third quarter versus an unfavorable impact of $35.6 million last year. The n finally, our share-based compensation expense net of tax was $12.7 million in the current quarter versus a share based compensation expense reversal of $18.6 million in the third quarter of 2008. When you look forward, in regard to shareholder compensation expense through…

Thank you Ed. In conclusion at CVR, we intend to exploit every opportunity that presents itself, while remaining focused on safety and operational excellence. We firmly believe we're competitively positioned in our businesses and have high expectations in moving CVR forward in a positive manner. We believe that the soft markets and fundamentals of our business are showing real evidence of recovering and we look forward to opportunities that will arise. As always, we thank you for joining us today and I'll turn the call back to Stirling for any questions. Thanks.

Thank you Jack and Ed. Joe, we are prepared at this point to take questions from the listening audience now. Jeff Dietert - Simmons & Company: Your Coffeyville cash operating cost are lower than the industry average and yet, you have strong yields there as well. Could you talk about your targets for refinery throughput in the fourth quarter and under what margin environment would you increase or reduce those runs?

Okay, our target is to run between a 110 and 115 for the quarter of crude and in large part we run crude to feed our CCR. We have a rather oversized reformer and because of the blending opportunities which are significant, we found our ourselves running crude to give ourselves advantage in downstream processing, even at these levels of a 110 to 115,000 barrels a day, we find ourselves net short of cat-feed and coker-feed and we are buying both of those feedstocks as well. Our total throughput would probably be in the range of a 125,000 barrels a day, round numbers that would be blendstock, feedstocks and crude. The refinery as Ed mentioned has low operating cost. We did put a lot of capital into the plants and to the way it operates, very efficiently. We've increased our liquid volume yield across the plant, we have done a couple of things that are showing up just what would be plain old crude economics. The crack spread again is only one leg of that three legged that we operate under. I don't know if that answered your question, but we are running pretty much flat out at these levels. Jeff Dietert - Simmons & Company: Then I guess as long as your EBITDA positive you continue to run at full rates?

That's correct I mean we are obviously cognizant of the market, you can't physically oversupply your own market. We have done a few things that we'll see benefits of. In the upcoming and this current quarter we look to work to loop on a pair of pipelines to make sure we can evacuate plant at higher levels. That loop should be coming on-stream probably sometime in December if not may be early first quarter. As we have expanded the plant we have had to expand our markets as well. Jeff Dietert - Simmons & Company: As you think about your 2010 budgeting, how do you think about the 211 crack for Coffeyville. What expectations do you have?

If you take a look, you can see there as well good crack is certainly in contango as you go forward. We are in a situation that the crack is compressed and we believe the crack is compressed simply because of inventory. Once inventory starts clearing out we would expect cracks to return to a more normal level. In an $80 crude environment you would expect cracks to be somewhere between $10 and $12 a barrel. We would be budgeting or we would expect something in the range longer-term and the short-term it's the overhang of inventory that's keeping everything somewhat in check. So we are seeing those, we are seeing a widening of the crude diff. I did mention that. We're back to buying maximum amounts of Canadian heavy with a [capacity] of the line coming down from Canada, were on Spearhead right now. Jeff Dietert - Simmons & Company: Shifting over to the fertilizer business, can you talk about what UAN prices you sold at for 4Q and where you've seen first quarter sales?

Okay, well. The way we take orders on the fertilizer business is a little different than the refining business. You're always taking orders now for future delivery. It's really three ways that fertilizer is sold. It's basically sold prompt or spot. Somebody is buying at that locations today. They buy it for, still meaning that there is, most of the inventory of fertilizer in the country is held in third party storage all over, because fertilizer goes about in about a six-week period during the planting season. So you have to have the fertilizer close to the field. So on [Fill tons], we take orders and then we could deliver the Fill at any given time. Then there is also another way of doing it and its called prepay, when people are willing to pay up and pay some cash upfront to guarantee delivery in a window. We have seen strong movement in the last few weeks of fertilizer prices increase. Again, it's the reverse of what we're seeing in petroleum. In petroleum, we're having head-high inventories. Last year we had high inventories in fertilizer which depressed prices. Those inventories are starting to clean up and we're starting to see prices move. We took a substantial amount of orders last week in the high 160's. We've actually taken orders for delivery up near $180 a ton on a prepaid basis and all of those are net back numbers. They are not local numbers. We run a rather large fleet of both ammonia and UAN cars. So when we say a net back number, it's the actual price less than the cost of delivery net back to the plant.

Stan, would you want to add anything to that?

No, I think you said well. The prices have strengthened significantly late over, late second quarter, third quarter and we continue to see that happen and you'll see the results of that in our first quarter and second quarter Jeff.

Right and we have a rather large stock. We have about a 200,000 ton buck of UAN orders roughly. That will stretch out into the remainder of this quarter and into next year. Jeff Dietert - Simmons & Company: The n now, as far as fourth quarter sales go, should that follow prompt prices or is there a substantial book that's already been sold for 4Q?

The fourth quarter book shipments will resemble the third quarter. The uptake in the pricing you are going to start seeing in 2010. Jeff Dietert - Simmons & Company: Okay, and the sales you're making now are for 2Q 2010.

So doing some crop but it's minimal and if we do more crop then the fourth quarter will be better than the third quarter but basically you are right. The orders at the higher net backs will be the first quarter and predominantly second quarter type numbers. Jeff Dietert - Simmons & Company: Okay.

The book of orders is somewhat of a buffer. If prices are falling, your book tends and your quarter tends to look better than our market. Conversely if the market is rising, it takes a little bit for you to work through the book of orders that you have taken and so our book is increasing substantially as we go forward.

Thank you our next question is from Mr. Paul Sankey from Deutsche Bank.

Hi good morning guys. Just thinking about your cash flows a little bit you said that you actually came down quite sharply and it sounds as if you have got pretty firm idea of where you would like your CapEx to be next year. Could you talk a little but more about where you would like your excess cash to go. I assume it's to more of that pay down and how far you would want that to go. I guess that kind of debt to equity target is what I am looking for?

Pau this Ed, we are focused on primarily using excess cash to continue to reduce that level I think at this stage of the game Jack and I would like to see that net debt start to approach 30%. That would be our preliminary target. We want to take a look at when we get there to give consideration to what our next steps would be, but our CapEx program stand is, working with Stan we do a very good job and have done very nice job of planning out remainder of 9 and 10 and I think that would help us continue to control that capital going forward as well.

Paul we are using some of our cash to find this carry program. At some point in time the market will flatten or I am not suggesting that we see an indication that it's going to go into backwardation but certainly right now keeping that $40 million of cash, working our [crude character] program pays us nicely.

I guess you could always argue that it would come off that, lets see depending on your view prices in the future right?

That's correct.

Can you take a little about more about and forgive I can probably do this myself but the progression of your reduction in debt is a little bit counterintuitive. You mentioned how year-over-year it has come down but I guess important as you said the strongest quarter. So could you just give a little bit more detail on of that, can you parse it in terms of cash flow?

Over the course of this quarter?

Yes, for instance, I think the number you gave us a year-over-year wasn't that, if you've got them?

I have provided a net debt number Paul?

Yes.

That's where we saw our cash is up substantially this year at the end of the quarter versus where we were at the end of the quarter last year by approximately $50 million if I'm not mistaken. So that's…

That's what I'm driving at, so that's the net debt that has come down is because the cash has gone up but I was just wondering how come the cash has gone up so much given the market was not exactly strong in Q3?

Okay, Paul, last year we had this cash flow swap that was, at least from our perspective was deeply underwater. So even though we had margins and we had reported earnings we also had a lot of cash being paid down on the swap. Then in our capital program this year, we got through our capital where, we're now in a pretty much steady state mode going forward.

Yes, and on top of that you're basically out of the swap right. So the swap is basically gone?

It is gone.

Yes, so that we've taken out that noise from the largest part of the counter-institutive move in your debt-to equity. Is it the fact that that's ended?

Right and if margins go up the cash stays inside the company.

Yes, just going to the market guys, a little bit more harvest season and I've read various things. It was actually in Kansas not that long ago, maybe chatting to some people, believe it or not. So the harvest season is not going that well but the margins have bounced. Can you talk a little bit more about that?

Paul, remember the predominant product we sell is UAM which is liquid nitrogen, which isn't prone to be affected by a late harvest and hydrous ammonia and urea would be and the prices that is coming back is just the economics coming back in supply and demand but a late harvest won't affect us. It would affect an anhydrous ammonia or urea produce. We don't move a lot of ammonia so it's just not going to affect us that much.

Yes. I suppose thinking a little more about this additional markets and whether or not there was low demand with a little lower activity amongst performance.

This additional markets will be there, I mean, they will get the corn out and they will harvest it and whether it's breaking nicely because of Nebraska and Iowa, you are absolutely right. It's going to be late but the gallons to take out the bushes of corn won't change.

Is that right, because my understanding was it would actually be a smaller harvest season in general?

I don't think so, I mean, that remains to be seen. I could be right, I could be wrong but I actually own a farm in Nebraska and its doing quite well. So I don't know of this second job.

Yes, you kind of know on fertilizers.

Its all about taking bushels, of the acres and the power required to do that and I think you'll find the yields will be similar to past years and we can have this conversation in 60 days and I could be wrong or right but we're not seeing less yield and that will determine the power to take it out of the field.

Yes.

There was a comment that I heard made this morning that it's latest harvest since 1967?

It is. It's very late and you would expect right to be in the firms that are right now and you'd expect to see that this was demand in October. Hope I'm going to see it in November. It's going to have to tail off. I mean if its, we're probably not going to get a big bump but the [gallop] will have to be there, I mean that you got to get it out of the field.

Yes, I mean, I have to say, Deutsche Bank's meteorologist says Texas is going to be very warm to us this week indeed for --

Yes.

Several weeks actually, its just, without wanting to get too off track, so what I'm trying to get to the macro level is the bounce in margins that we've seen. You have mentioned that the inventory overhang is still very much there. What is causing the bounce in margins, that's what I was kind of driving at and then I am talking about oil products?

Oil price I mean there is a minimum level I mean lot of our peers are not anywhere near cash positive they are probably operating on a contribution of fixed cost if that at all. If you take a look at a $6 crack and basis differential albeit in a niche market where some are protected, the folks on the Gulf and East Coast aren't as well protected, when you trigger in typical volume that you pull off and operating costs and crude differentials. If prices were to drop very much more I think you would see massive run cuts.

That's what I was driving at. Is there anything unusual just imposing about crude market from your perspective? I know you've got a very strong position to look at pretty much the global oil market from your central location. Is there anything that you would highlight as particularly, where do I keep at, where we are at right now?

No actually, there is some semblance in normalcy returning, its still.. When you talk 75 or $80 crude and you are talking a little over $2 on a WTI, WTS spread, we used to see $2 on crude to this 40. What's happened in the last 2 or 3 years is lot of the historical norms or checks and balances don't exist. We are having a little bit of hard time reading through what does it mean. We use to be able, fixed crude price and pretty much tell you what crack spread would be and we haven't returned to normalcy yet.

Yes, but its kind of coming back somewhat?

It's coming back somewhat, yes. We're seeing the indications. We think we've seeing the bottom. When crack spreads, when the 2-1-1 drops to $3 a barrel you better have some other parts of your business to hold you up, because I don't know anybody on the Gulf Coast or the East Coast that can operate with those kinds of margins.

Right, and then very finally from me, sorry to go on, the impact of Holly's recently, could you just talk a little bit about how that may impact you guys and …

Well, actually we have said Coffeyville looking to our Southern neighbor in refineries and wondered for years why they didn't put themselves together. We actually think it's a very good move on Holly's part. You have two sweet crude refineries. You now have one unit that will be, or two units that will be consolidated into more or less a single operation. From the public information you can see that they're planning on reducing crude runs in the order of 40,000 barrels or 45,000 barrels a day. Being in a niche market we will be the beneficiary of that as well as, as crude comes out we can expect some reduction in product production in our backyard and I'd give Matt Clifton and his guys a lot of credit for pulling that deal off. Joe do we have any additional questions?

Our next question comes from the line of Vance Shaw of company of Credit Suisse.

Good morning. Hey, since I have most of my questions answered but just to continue on from his last one, what are you guys thinking strategically? It seems like obviously you guys can't control the markets but your operations seem to be pretty efficient now and humming along. Any thoughts on acquisitions or anything like that?….

Vance, let me just say, we're always looking. We need to find the one that works. You could look around in a lot of refineries that have been for sale, are not exactly the ones anybody wants to own, using Holly for example. You had two plants that were somewhat compromised that they were able to buy and put together and make one good one out of it but each one individually may not have been that great a story. Let me just put it this way, we are looking.

It seems to be a lot of plants in Oklahoma and I don't know what you call, almost like teapot refineries, really small ones. They probably wouldn't fit what your guys are looking at doing over the franc, right?

No, I mean, you need to look at complexity. You need to look at flexibility. If somebody is operating a really small plant in a topping mode or whatever, I mean, I don't know how those plants survive.

Got you, and would you be looking also at infrastructure account of this great storage asset and of the pipeline one at Cushing, maybe some sort of more logistic supply around?

Absolutely, we're always looking for something that is synergistic with what we own.

Are you operating at 115,000 barrels? Is that pretty much as much you could do?

No, we can actually run higher. We can actually run, we have run as high as 121 or 122,000. Right now purchasing blend stocks and feedstocks is more economic than filling the plants out with crude. We buy when we talk about feedstock, blend stocks, again that's DGO cat cracker feed back in to our bottoms or asphalt particularly this time of the year is pretty distressed. We are going for 2000 or 3000 barrels a day coker feed on a daily basis. Our expanded plant actually expanded little more than we had on paper, and then we used the octane capability of our CCR to blend low octane natural gasoline, natural gas liquids Any additional questions Joe?

(Operator Instructions) Mr. Pack we have no further question in the queue at this time.

Okay. Thank you again everyone for being here and questions were well thought through. It gives us an opportunity to speak openly about the company and how we are doing and we appreciate you being here on the call. We'll see you next quarter. Thanks again.

Thank you all.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.