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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Greetings and welcome to the CVR Energy Inc., First Quarter 2018 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, Mr. Jay Finks, Vice President of Finance. Thank you. You may begin.
Thank you, Michelle. Good afternoon, everyone. We very much appreciate you joining us this afternoon for our first quarter 2018 earnings call. With me today are Dave Lamp, our Chief Executive Officer; and other members of management.
Prior to discussing our first quarter 2018 results, let me remind you that this conference call may contain forward-looking statements, as that term is defined under Federal Securities laws. For this purpose any statements made during this call, that are not statements of historical facts may be deemed to be forward-looking statements. Without limiting the foregoing, the words outlook, believes, anticipates, plans, expects and similar expressions are intended to identify 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 2018 first quarter earnings release that we filed with the SEC this morning prior to the opening of the market.
With that said, I will turn the call over to Dave, our Chief Executive Officer. Dave?
Thanks Jay. And again, good afternoon everyone and thank you for joining our earnings call. Hopefully, you had an opportunity to listen to CVR Partners and CVR Refining earnings calls earlier today.
First, I would like to thank Susan Ball for all her contributions to CVR Energy over many years, Susan has been instrumental to our success and she will be very well missed and wish her all the best in the future.
This morning we reported CVR Energy's first quarter 2018 consolidated adjusted net income was $34 million or $0.39 per diluted share, as compared to an adjusted net income of $23 million or $0.27 per diluted share for the first quarter of last year. We announced today a cash distribution of $0.50, which would be paid on May 14, to stockholders on record of May 7.
Now I'll speak to some of the first quarter highlights from each of the business segments. First the petroleum business; CVR Refining first quarter 2018 adjusted EBITDA was a $126 million compared to $115 million a year ago. CVR Refining also declared a first quarter distribution of $0.51 per common unit. CVR Energy owns approximately 66% of the common units of CVR Refining and therefore receives proportional amount of the distribution.
Operationally CVR Refining processed approximately 178,000 barrels per day of crude in the first quarter of 2018 as compared to 214,000 barrels a day of crude for the same period last year. CVR Refining's crude throughput for the first quarter was reduced by the downtime associated with the Cat cracker at the Coffeyville Refinery, which processed approximately 99,000 barrels of crude. The Wynnewood Refinery processed approximately 79,000 barrels of crude in the first quarter of 2018.
Now turning to nitrogen fertilizer business, CVR Partners announced a first quarter 2018 adjusted EBITDA of $13 million as compared to $21 million for the first quarter of 2017. Operationally, the first quarter results were impacted by approximately 12 days of unplanned downtime during the January - in January at the East Dubuque facility. At Coffeyville the plant ran very well, and has posted a near 100% on stream rates on all units. While at East Dubuque, both of the ammonia and UAN plants ran at 87%.
CVR Partners announced today that it will not pay a cash distribution for the first quarter of 2018. Now let me turn the call over to Jay to talk a about some financial highlights.
Thank you, Dave and good afternoon everyone. As previously mentioned adjusted net income for the first quarter 2018 was $34 million or $0.39 per diluted share as compared to adjusted net income of $23 million or $0.27 per diluted share in the first quarter of 2017. We believe adjusted net income is a meaningful metric for analyzing our performance as it eliminates the impact of non-cash and other unusual items inherent in our business and provides a more transparent view as to market expectations.
The most significant adjustments during the first quarter of 2018 to drive adjusted net income was a gain on derivatives no settled in the current period of $46 million and a favorable FIFO impact of $20 million. The most significant adjustments for the first quarter 2017 were a major scheduled turnaround expenses of $13 million and a gain on derivatives not settled during the period of $11 million.
The gross pretax adjustments to net income are reduced for the portion that's attributable to the non-controlling interest and are further reduced for the net tax impact associated with them. The total income tax expense for the first quarter of 2018 was $21 million as compared to $15 million in the first quarter of 2017. The overall effective tax rate in both 2018 and 2017 was impacted by the incumbent losses associated with the non-controlling interest in CVR Refining and CVR Partners' earnings and certain state income tax benefits.
The effective tax rate for the first quarter of 2018 was approximately 17% as compared to 28% in the first quarter of 2017. The reduction year-over-year was primarily as a result of the Tax Cuts and Jobs Act, which reduced the federal tax rate from 35% in 2017 to 21% in 2018. We estimate our full year 2018 effective tax rate to be between 14% and 16%.
I'll now turn to the specific performance of our two business segments impacting our overall quarterly results. As Dave mentioned earlier, CVR Refining's adjusted EBITDA for the first quarter of 2018 was $126 million as compared to $115 million in the same period 2017. The increase in adjusted EBITDA year-over-year was primarily a result of higher Group 3 crack spreads, hedging gains, a reduction to our renewable volume obligation and lower RIN prices.
In the first quarter of 2018, CVR Refining's realized refining margin adjusted for FIFO was $13.77 per barrel of crude as compared to $11.54 in the same period last year. The Group 3 tier 1 cash spread averaged $16.67 per barrel in the first quarter of 2018 as compared to $13.34 in the first quarter of 2017.
Now turning to our fertilizer segment, as previously mentioned, CVR Partners' first quarter adjusted EBITDA was $13 million as compared to $21 million in the same period last year. The decrease in adjusted EBITDA over the periods was primarily attributable to lower realized yield and sales prices, lower ammonia sales volumes and approximately 12 days' unplanned downtime in January at the East Dubuque facility, partially offset by increased UAN tons sold.
The average UAN net back price for the first quarter of 2018 was $153 per ton as compared to $160 per ton in the prior year period. The average ammonia net back price was $322 per ton in the first quarter of 2018 as compared to $308 per ton in the first quarter of 2017. Total consolidated capital spending for the first quarter of 2018 was $20 million, which included $16 million of CVR Refining and $3 million of CVR Partners. We estimate that the total consolidated capital spending for 2018 were approximately $160 million.
Our cash position remained strong, as we ended the quarter with cash and cash equivalents of approximately $420 million on a consolidated basis. Total consolidated gross margin debt as of March 31, 2018 was approximately $1.2 billion unchanged from a year ago. CVR Energy has no debt exclusive of the debt that resides at CVR Refining and CVR Partners.
As of March 31, 2018, CVR Refining's total debt was approximately $545 million and CVR Partners' total debt was approximately $647 million. With that Dave, I'll turn the call back over to you.
Thanks Jay. As discussed in our last call, I outlined our strategic objectives for '18. We continue to develop these initiatives and as we move forward I will provide updates. A recap of our objectives are, restructure our organization to reduce G&A cost and eliminate unprofitable activities and improve decision making; two, build a wholesale/retail business to reduce our RIN exposure. Three, install biodiesel blending facilities at our racks [ph]. Four, to expand our capacity to run WCS and light shales at our Coffeyville refinery to capture market opportunities offered with the upcoming IMO specification. Five, improve liquid yielded at Wynnewood refinery by 3.5% and increase our ability to process light shale oils produced in our backyard.
We've made steady progress on these objectives and we believe they will position our business for the future dynamics, market dynamics including strong global demand supporting U.S., product markets supporting crude differentials of WCS Permian, Brent, Brent TI and condensate versus WTI, regulatory tailwinds from the tax reform, IMO bunker fuel specification changes as well as our RFS reform.
We've been working to diversify our marketing channels to grow the wholesale market outlets to reduce our exposure to RINs. Several deals are in the works and we believe we can increase our internally generated RINs by approximately 25% by the end of '18. In addition, we'll be ready to start blending B5 biodiesel in our racks by the end of the second quarter.
At our Coffeyville refinery, process studies indicate that 40,000 barrels per day of WCS is in scope and that light shale processing can be substantially increased with the - unit expansion and the addition of additional Naphtha hydro-treating capacity.
At our Wynnewood refinery, we have approved the reposition of Benfi [ph] unit which will increase liquid yields by approximately 1%. This project will cost approximately $11 million and has an expected rate of return greater than 90% at s WTI price of $65. The Benfi repositioning will be completed during our planned 2019 turnaround.
We continue to scope and complete process engineering work on the LPG recovery from fuel gas, and the addition of an iSOM [ph] unit to capture the rest of the liquid volume yield improvement as well as increase our ability to process shale or condensate. We believe these economics will be equally compelling.
Our restructuring efforts are defined and being implemented now. We are on tracked to eliminate approximately $11 million of cost and gain approximately $4 million of capital for the sale of unnecessary assets and net of restructuring cost. These restructuring efforts will be substantially complete by the end of 2018.
So, with that operator, we're ready to take questions.
Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] There are no questions at this time. I would like to turn the call back over to management for any closing remarks.
Again I would like to thank you for your interest in CVR Energy. We look forward to reviewing our second quarter results with you in our next earnings call. I would like to thank all our employees for their efforts for safe and reliable operations during the quarter. With that, thank you very much.
Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.