SUGAR LAND, Texas, May 1, 2012 /PRNewswire/ -- CVR Energy, Inc.
(NYSE: CVI), a refiner and marketer of petroleum fuels and a
majority owner of a nitrogen fertilizer products manufacturer,
today reported a first quarter 2012 net loss of $25.2 million, or a loss of 29 cents per diluted share, on net sales of
$1,968.6 million, compared to first
quarter 2011 net income of $45.8
million, or 52 cents per fully
diluted share, on net sales of $1,167.3
million. Strong operating results for the first quarter of
2012 were offset by an unrealized loss before tax on derivatives of
$128.1 million.
(Logo: http://photos.prnewswire.com/prnh/20071203/CVRLOGO)
Operating income for the first quarter of 2012 was $140.5 million, up from $109.6 million in the same quarter of 2011.
Operating income for the quarter was positively impacted by several
factors, including increases in crack spreads and beneficially wide
crude oil differentials, a shorter-than-planned turnaround at the
Coffeyville refinery and strong
operating results from the Wynnewood refinery during its first full
quarter of operations as a CVR Energy company.
Adjusted net income, a non-GAAP financial measure, was
$67.1 million, or 76 cents per diluted share for the first quarter
of 2012, compared to $49.5 million,
or 56 cents per diluted share for the
first three months of 2011. As shown in the Reconciliation of Net
Income (loss) to Adjusted Net Income table in this release,
significant net-of-tax adjustments in the first quarter of 2012
included an unrealized loss on derivatives of $77.7 million, major scheduled turnaround
expenses of $12.7 million, and
expenses associated with the proxy matter of $9.0 million, partially offset by an $11.7 million favorable impact from first-in,
first-out (FIFO) inventory accounting.
"We are pleased that CVR Energy's businesses turned in strong
operational performance for the first quarter of 2012, although our
results were impacted by the turnaround at our Coffeyville refinery, which was completed
ahead of schedule and under budget, and by product pipeline
shipping limitations in our group during the quarter," said
Jack Lipinski, CVR Energy's chief
executive officer. "At the same time, our Coffeyville and Wynnewood refineries benefited from the
favorable crack spread environment. As we enter the second quarter,
we expect to achieve strong financial results driven by solid
operating performance, continuing wide crack spreads and
differentials between Brent and WTI crudes.
"Additionally, the nitrogen fertilizer segment operated by CVR
Partners had a good first quarter," he said. "The company reported
today that it has increased its 2012 cash distributions
guidance.
"Looking ahead, our refineries are running at or above their
stated capacities and we reasonably expect a favorable pricing
environment to continue for both of our business segments,"
Lipinski said.
Petroleum Business
The petroleum business, which includes the Coffeyville and Wynnewood refineries, reported first quarter
2012 operating income of $134.9
million, and adjusted EBITDA, a non-GAAP financial measure,
of $144.9 million, on net sales of
$1,898.5 million, compared to
operating income in the same quarter a year earlier of $105.7 million, and adjusted EBITDA of
$91.7 million, on net sales of
$1,111.3 million. In addition
to reporting the impact of the first full quarter of operations for
the Wynnewood refinery, first
quarter 2012 operating income was also impacted by the Coffeyville refinery turnaround, which
resulted in major scheduled turnaround expenses of $21.0 million, as compared to $3.1 million for the same category in the first
quarter of 2011.
First quarter 2012 throughput of crude oil and all other
feedstocks and blendstocks totaled 155,385 barrels per day (bpd),
compared to 105,557 bpd for the same period in 2011. Crude oil
throughput for the first quarter 2012 averaged 146,658 bpd per day
compared with 98,684 bpd for the same period in 2011. The
year-over-year increase in throughput was mostly driven by the
addition of the Wynnewood refinery
and offset in part by the reduction in throughput from the
Coffeyville refinery turnaround in
the first quarter of 2012.
Refining margin adjusted for FIFO impact per crude oil
throughput barrel, a non-GAAP financial measure, was $18.62 in the first quarter 2012, an increase
from $17.91 during the same period in
2011. The increase was driven by a stronger crack spread and crude
differential environment. Gross profit per crude oil
throughput barrel dropped to $11.15
in the first quarter 2012, as compared to $13.36 during the same period in 2011, primarily
due to higher operating expenses and lower throughput volumes
resulting from the Coffeyville
turnaround.
Direct operating expense per barrel sold, exclusive of
depreciation and amortization, for the first quarter 2012 was
$6.51, up from $4.88 in the first quarter 2011, also
attributable to the higher operating expenses and lower throughput
volumes resulting from the Coffeyville turnaround.
Coffeyville
Refinery
The first quarter 2012 results noted above were impacted by
completion of the refinery turnaround at Coffeyville. The refinery was fully
operational by late March and was operating at approximately
117,000 bpd of crude throughput as of April
30, 2012.
The Coffeyville refinery
reported first quarter 2012 operating income of $67.8 million on net sales of $1,295.7 million, compared to $106.3 million of operating income on net sales
of $1,111.1 million for the first
quarter of 2011. First quarter 2012 crude oil throughput totaled
88,403 bpd, compared to 98,684 bpd in the first quarter of 2011.
Refining margin per crude oil throughput barrel for the first
quarter of 2012 was $19.82, compared
to $20.38 for the same period in
2011. Gross profit per crude oil throughput barrel was $9.73 in the first quarter of 2012, compared to
$13.43 for the 2011 first quarter.
The refining margin adjusted for FIFO impact was $144.3 million for the first three months of
2012, compared to $159.0 million for
the same period in 2011. Direct operating expense per barrel sold
for the quarter was $6.88, compared
to $4.89 for the 2011 first quarter.
Excluding expenses related to the refinery turnarounds, direct
operating expense per barrel sold was $4.71 in the 2012 first quarter and $4.55 in the same quarter of 2011.
Wynnewood Refinery
The first quarter of 2012 represented the first full quarter of
operating the Wynnewood refinery
since acquiring it in December 2011.
For the quarter, the refinery's crude oil throughput totaled 58,255
bpd after the impact of a maintenance-related partial refinery
shutdown during the second half of January. The refinery was
restored to full operations in early February and was running crude
throughput of approximately 69,000 bpd as of April 17, 2012.
The refinery's first quarter 2012 operating income was
$67.5 million on net sales of
$825.5 million. The refining margin
adjusted for FIFO impact in the first quarter 2012 was $103.8 million and direct operating expense per
barrel sold for the quarter was $4.28.
Nitrogen Fertilizers Business
The fertilizer business operated by CVR Partners, LP reported
first quarter 2012 net income of $30.2
million, on net sales of $78.3
million, compared to net income of $16.7 million on net sales of $57.4 million for the 2011 first quarter.
Adjusted EBITDA was $38.0 million for
the first quarter of 2012 compared to $25.9
million in the first quarter of 2011.
CVR Partners produced 89,300 tons of ammonia during the first
quarter of 2012, of which 25,000 net tons were available for sale
while the rest was upgraded to 154,600 tons of more highly valued
UAN. In the 2011 first quarter, the plant produced 105,300
tons of ammonia with 35,200 net tons available for sale with the
remainder upgraded to 170,600 tons of UAN.
First quarter 2012 average realized plant gate prices for
ammonia and UAN were $613 per ton and
$313 per ton respectively, compared
to $564 per ton and $207 per ton for the same period in 2011.
Cash and Debt
Consolidated cash and cash equivalents, which included
$225.6 million for CVR Partners,
increased to $500.9 million at the
end of the first quarter of 2012, compared to $388.3 million at the end of 2011, due in part to
increased cash flows in the petroleum business. Consolidated
long-term debt at the end of the 2012 first quarter, which included
$125.0 million for CVR Partners,
remained nearly unchanged at $852.9
million.
Other Information
As previously announced, CVR Energy has signed a transaction
agreement with Carl C. Icahn and
certain entities under his control that would permit Mr. Icahn to
complete his tender offer for $30 in
cash per share plus a "contingent cash payment" right (CCP), if he
obtains a majority of the shares. The tender offer period
remains open and is set to close at 11:59
p.m. Eastern time on Friday, May
4, 2012. CVR Energy's Board of Directors is not
recommending that stockholders tender into Mr. Icahn's offer and
continues to believe CVR Energy's potential long-term value
exceeds $30 per share. But the Board also
understands that many of the company's stockholders may prefer to
realize value in the near term and would consider the offer, as
revised, an attractive near-term alternative. Accordingly, by
entering into the transaction agreement the Board obtained several
significant protections for stockholders and decided to permit CVR
Energy stockholders to determine whether or not they wish to sell
their shares at the price offered by Mr. Icahn. If the offer is
completed, Mr. Icahn has agreed to immediately provide a subsequent
10-business day offering period during which stockholders who did
not initially tender but do not wish to be stockholders in the
company after the change of control could tender any remaining
outstanding shares for the same offer price plus the CCP. If
at any time Mr. Icahn owns 90% of the outstanding shares, he will
complete a short-form merger under Delaware law pursuant to which all remaining
outstanding shares will be cancelled in exchange for receiving the
same per share consideration as paid in the tender offer plus the
CCP. If a majority of shares (taking into account those
already owned by Mr. Icahn) are not tendered into his offer, Mr.
Icahn will terminate his offer and his pending proxy contest for
control of the CVR Energy Board of Directors.
Forward Looking Statements
This news release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended. You can generally identify forward-looking
statements by our use of forward-looking terminology such as
"anticipate," "believe," "continue," "could," "estimate," "expect,"
"explore," "evaluate," "intend," "may," "might," "plan,"
"potential," "predict," "seek," "should," or "will," or the
negative thereof or other variations thereon or comparable
terminology. These forward-looking statements are only
predictions and involve known and unknown risks and uncertainties,
many of which are beyond our control. For a discussion of
risk factors which may affect our results, please see the risk
factors and other disclosures included in our Annual Report on
Form 10-K for the year ended Dec. 31, 2011, and any
subsequently filed quarterly reports on Form 10-Q. These
risks may cause our actual results, performance or achievements to
differ materially from any future results, performance or
achievements expressed or implied by these forward-looking
statements. Given these risks and uncertainties, you are
cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements included in this
press release are made only as of the date hereof. CVR Energy
disclaims any intention or obligation to update publicly or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
About CVR Energy, Inc.
Headquartered in Sugar Land,
Texas, CVR Energy, Inc.'s subsidiary and affiliated
businesses operate independent refining assets in Coffeyville, Kan., and Wynnewood, Okla., with more than 185,000
barrels per day of processing capacity, a marketing network for
supplying high value transportation fuels to customers through
tanker trucks and pipeline terminals, and a crude oil gathering
system serving Kansas,
Oklahoma, western Missouri, southwestern Nebraska and Texas. In addition, CVR
Energy subsidiaries own a majority interest in and serve as the
general partner of CVR Partners, LP, a producer of ammonia and urea
ammonium nitrate, or UAN, fertilizers.
Important Additional Information
In response to the tender offer (as amended) commenced by Mr.
Icahn and certain entities under his control, the Company filed a
Solicitation/Recommendation Statement on Schedule 14D-9 with the
Securities and Exchange Commission (the "SEC") and certain
amendments thereto. CVR ENERGY STOCKHOLDERS ARE STRONGLY
ENCOURAGED TO READ THE COMPANY'S SOLICITATION/RECOMMENDATION
STATEMENT ON SCHEDULE 14D-9 (AS AMENDED), BECAUSE IT CONTAINS
IMPORTANT INFORMATION. Stockholders may obtain a free copy of the
Solicitation/Recommendation Statement on Schedule 14D-9 (as
amended), which was first filed on March 1,
2012, as well as any other documents filed by the Company,
for no charge at the SEC's website at www.sec.gov. Copies will also
be available at no charge in the "Investor Relations" section of
the Company's website at www.cvrenergy.com or by writing to CVR
Energy at 2277 Plaza Drive, Suite 500, Sugar Land, Texas, 77479, Attn: Senior Vice
President, General Counsel and Secretary.
In addition, the Company may file a definitive proxy statement
with the SEC for the 2012 annual meeting of stockholders.
Such definitive proxy statement will be mailed to stockholders of
CVR Energy. CVR ENERGY STOCKHOLDERS ARE URGED TO READ THE
DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC
CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL
CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain
free copies of these documents (when available) and other documents
filed with the SEC by the Company through the web site maintained
by the SEC at www.sec.gov and in the "Investor Relations" section
of the Company's website at www.cvrenergy.com. However, if
the short-form merger described in the transaction agreement is
consummated, the 2012 annual meeting will not take place.
For further information, please contact:
Investor Relations:
Ed Morgan
CVR Energy, Inc.
281-207-3388
or
Jay Finks
CVR Energy, Inc.
281-207-3588
InvestorRelations@CVREnergy.com
Media Relations:
Angie Dasbach
CVR Energy, Inc.
913-982-0482
MediaRelations@CVREnergy.com
CVR Energy, Inc.
Financial and Operational Data (all information in this
release is unaudited unless noted otherwise).
|
Three
Months Ended
March
31,
|
Change
from 2011
|
|
2012
|
2011
|
Change
|
Percent
|
|
(in
millions, except per share data)
|
Consolidated Statement of Operations
Data:
|
|
|
|
|
Net
sales
|
$
1,968.6
|
$
1,167.3
|
$
801.3
|
68.6%
|
Cost of
product sold
|
1,635.2
|
936.8
|
698.4
|
74.6
|
Direct
operating expenses
|
115.5
|
68.4
|
47.1
|
68.9
|
Insurance
recovery — business interruption
|
—
|
(2.9)
|
2.9
|
—
|
Selling,
general and administrative expenses
|
45.3
|
33.4
|
11.9
|
35.6
|
Depreciation and amortization
|
32.1
|
22.0
|
10.1
|
45.9
|
Operating income
|
140.5
|
109.6
|
30.9
|
28.2
|
Interest
expense and other financing costs
|
(19.2)
|
(13.2)
|
(6.0)
|
45.5
|
Gain
(loss) on derivatives, net
|
|
|
|
|
Realized
|
(19.1)
|
(18.8)
|
(0.3)
|
1.6
|
Unrealized
|
(128.1)
|
(3.3)
|
(124.8)
|
3,781.8
|
Loss on
extinguishment of debt
|
—
|
(1.9)
|
1.9
|
—
|
Other
income, net
|
0.1
|
0.5
|
(0.4)
|
(80.0)
|
Income (loss) before income tax expense
(benefit)
|
(25.8)
|
72.9
|
(98.7)
|
(135.4)
|
Income tax
expense (benefit)
|
(9.8)
|
27.1
|
(36.9)
|
(136.2)
|
Net income (loss)
|
(16.0)
|
45.8
|
(61.8)
|
(134.9)
|
Net income attributable to noncontrolling
interest
|
9.2
|
—
|
9.2
|
—
|
Net income (loss) attributable to CVR Energy
stockholders
|
$
(25.2)
|
$
45.8
|
$
(71.0)
|
(155.0)%
|
|
|
|
|
|
_______________
|
|
|
|
|
|
|
|
|
|
Basic
earnings (loss) per share
|
$
(0.29)
|
$
0.53
|
$
(0.82)
|
(154.7)%
|
Diluted
earnings (loss) per share
|
$
(0.29)
|
$
0.52
|
$
(0.81)
|
(155.8)%
|
|
|
|
|
|
Adjusted
net income
|
$
67.1
|
$
49.5
|
$
17.6
|
35.6%
|
Per
diluted share
|
$
0.76
|
$
0.56
|
$
0.21
|
37.5%
|
|
|
|
|
|
Weighted-average common shares
outstanding:
|
|
|
|
|
Basic
|
86.8
|
86.4
|
0.4
|
0.5%
|
Diluted
|
86.8
|
87.8
|
(1.0)
|
(1.1)%
|
|
As of
March 31,
|
|
As of
December 31,
|
|
2012
|
|
2011
|
|
|
|
(audited)
|
|
(in
millions)
|
Balance Sheet Data:
|
|
|
|
|
Cash and cash equivalents
|
$
500.9
|
|
$
388.3
|
|
Working capital
|
741.2
|
|
769.2
|
|
Total assets
|
3,203.4
|
|
3,119.3
|
|
Long-term debt
|
852.9
|
|
853.9
|
|
Total CVR stockholders' equity
|
1,130.1
|
|
1,151.6
|
|
|
Three
Months Ended
March
31,
|
|
2012
|
2011
|
|
(in
millions)
|
Cash
Flow Data
|
|
|
Net cash
flow provided by (used in):
|
|
|
Operating activities
|
$
186.3
|
$
(16.0)
|
Investing activities
|
(59.4)
|
(7.1)
|
Financing activities
|
(14.4)
|
(11.1)
|
Net cash flow
|
$ 112.5
|
$ (34.2)
|
Segment Information
Our operations are organized into two reportable segments,
Petroleum and Nitrogen Fertilizer. Our operations that are not
included in the Petroleum and Nitrogen Fertilizer segments are
included in Corporate and Other segment (along with elimination of
intersegment transactions). The Petroleum segment includes the
operations of our Coffeyville,
Kansas and Wynnewood,
Oklahoma refineries along with our crude oil gathering and
pipeline systems. The Nitrogen Fertilizer segment is operated by
CVR Partners, LP, ("CVR Partners") of which we own a majority
interest and serve as general partner. It consists of a nitrogen
fertilizer manufacturing facility that utilizes a pet coke
gasification process in producing nitrogen fertilizer.
Detailed operating results for the Nitrogen Fertilizer segment for
the quarter ended March 31, 2012 are
included in CVR Partners' press release dated May 1, 2012.
|
Petroleum
|
Nitrogen Fertilizer
(CVR
Partners)
|
Corporate
and
Other
|
Consolidated
|
|
(in
millions)
|
Three
months ended March 31, 2012
|
|
|
|
|
Net
sales
|
$
1,898.5
|
$
78.3
|
$
(8.2)
|
$
1,968.6
|
Cost of
product sold
|
1,630.7
|
12.6
|
(8.1)
|
1,635.2
|
Direct
operating expenses (1)
|
71.7
|
22.9
|
(0.1)
|
94.5
|
Major
scheduled turnaround expense
|
21.0
|
—
|
—
|
21.0
|
Selling,
general & administrative
|
13.9
|
6.0
|
25.4
|
45.3
|
Depreciation and amortization
|
26.3
|
5.4
|
0.4
|
32.1
|
Operating income (loss)
|
$
134.9
|
$
31.4
|
$
(25.8)
|
$
140.5
|
|
|
|
|
|
Capital
expenditures
|
$
35.4
|
$
22.3
|
$
1.8
|
$
59.5
|
|
|
|
|
|
Three
months ended March 31, 2011
|
|
|
|
|
Net
sales
|
$
1,111.3
|
$
57.4
|
$
(1.4)
|
$
1,167.3
|
Cost of
product sold
|
930.3
|
7.5
|
(1.0)
|
936.8
|
Direct
operating expenses (1)
|
42.3
|
23.0
|
—
|
65.3
|
Major
scheduled turnaround expense
|
3.1
|
—
|
—
|
3.1
|
Insurance
recovery – business interruption
|
—
|
(2.9)
|
—
|
(2.9)
|
Selling,
general & administrative
|
13.0
|
8.4
|
12.0
|
33.4
|
Depreciation and amortization
|
16.9
|
4.6
|
0.5
|
22.0
|
Operating income (loss)
|
$
105.7
|
$
16.8
|
$
(12.9)
|
$
109.6
|
|
|
|
|
|
Capital
expenditures
|
$
4.6
|
$
2.0
|
$
0.7
|
$
7.3
|
____________________
|
|
|
|
|
(1)
Excluding turnaround expenses.
|
|
Petroleum
|
Nitrogen Fertilizer
(CVR
Partners)
|
Corporate
and
Other
|
Consolidated
|
|
(in
millions)
|
March
31, 2012
|
|
|
|
|
Cash and
cash equivalents (1)
|
$
—
|
$
225.6
|
$
275.3
|
$
500.9
|
Total
assets
|
2,396.3
|
656.9
|
150.2
|
3,203.4
|
Long-term
debt (1)
|
—
|
125.0
|
727.9
|
852.9
|
|
|
|
|
|
|
|
|
|
|
December 31, 2011
|
|
|
|
|
Cash and
cash equivalents (1)
|
$
—
|
$
237.0
|
$
151.3
|
$
388.3
|
Total
assets
|
2,322.1
|
659.3
|
137.9
|
3,119.3
|
Long-term
debt (1)
|
—
|
125.0
|
728.9
|
853.9
|
_________________
|
|
|
|
|
(1)
Corporate and Other is inclusive of the Petroleum segment's cash
and cash equivalents and long-term debt.
|
Petroleum Segment Operating Data
The following tables set forth information about our
consolidated Petroleum segment operations and our Coffeyville and Wynnewood refineries. Reconciliations of
certain non-GAAP financial measures are provided under "Use of
Non-GAAP Financial Measures" below.
|
Three
Months Ended
March
31,
|
|
|
2012
|
|
2011
|
|
|
(in
millions, except operating statistics)
|
|
|
|
Petroleum Segment Summary Financial
Results:
|
|
|
|
|
Net
sales
|
$
1,898.5
|
|
$
1,111.3
|
|
Cost of
product sold
|
1,630.7
|
|
930.3
|
|
Refining margin*
|
267.8
|
|
181.0
|
|
Direct
operating expenses
|
71.7
|
|
42.3
|
|
Major
scheduled turnaround expense
|
21.0
|
|
3.1
|
|
Depreciation and amortization
|
26.3
|
|
16.9
|
|
Gross profit
|
148.8
|
|
118.7
|
|
Selling,
general and administrative expenses
|
13.9
|
|
13.0
|
|
Operating income
|
$ 134.9
|
|
$ 105.7
|
|
|
|
|
|
|
Refining
margin adjusted for FIFO impact*
|
$
248.5
|
|
$
159.1
|
|
|
|
|
|
|
Adjusted
Petroleum EBITDA*
|
$
144.9
|
|
$
91.7
|
|
|
|
|
|
|
Petroleum Segment Key Operating
Statistics:
|
|
|
|
|
Per crude
oil throughput barrel:
|
|
|
|
|
Refining margin*
|
$
20.07
|
|
$
20.38
|
|
FIFO impact (favorable) unfavorable
|
(1.45)
|
|
(2.47)
|
|
Refining margin adjusted for FIFO
impact*
|
18.62
|
|
17.91
|
|
Gross profit
|
11.15
|
|
13.36
|
|
Direct operating expenses
|
6.95
|
|
5.10
|
|
Direct
operating expenses per barrel sold
|
$
6.51
|
|
$
4.88
|
|
Barrels
sold (barrels per day)
|
156,573
|
|
103,200
|
|
_______________
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
March
31,
|
|
|
2012
|
|
2011
|
|
Petroleum Segment Summary Refining Throughput and
Production Data:
|
|
|
(barrels per day)
|
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
|
Sweet
|
110,636
|
|
71.2%
|
|
79,924
|
|
75.7%
|
|
Light/medium sour
|
24,982
|
|
16.1%
|
|
599
|
|
0.6%
|
|
Heavy sour
|
11,040
|
|
7.1%
|
|
18,161
|
|
17.2%
|
|
Total crude oil throughput
|
146,658
|
|
94.4%
|
|
98,684
|
|
93.5%
|
|
All other feedstocks and blendstocks
|
8,727
|
|
5.6%
|
|
6,873
|
|
6.5%
|
|
Total throughput
|
155,385
|
|
100.0%
|
|
105,557
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
Production:
|
|
|
|
|
|
|
|
|
Gasoline
|
81,291
|
|
52.6%
|
|
49,610
|
|
46.9%
|
|
Distillate
|
62,329
|
|
40.4%
|
|
42,876
|
|
40.6%
|
|
Other (excluding internally produced fuel)
|
10,879
|
|
7.0%
|
|
13,200
|
|
12.5%
|
|
Total refining production (excluding internally
produced fuel)
|
154,499
|
|
100.0%
|
|
105,686
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
Product
price (dollars per gallon):
|
|
|
|
|
|
|
|
|
Gasoline
|
$2.87
|
|
|
|
$2.65
|
|
|
|
Distillate
|
3.12
|
|
|
|
2.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
March
31,
|
|
2012
|
|
2011
|
Market
Indicators (dollars per barrel):
|
|
|
|
West Texas
Intermediate (WTI) NYMEX
|
$103.03
|
|
$94.60
|
Crude Oil
Differentials:
|
|
|
|
WTI less WTS (light/medium sour)
|
3.67
|
|
4.10
|
WTI less WCS (heavy sour)
|
27.12
|
|
21.95
|
NYMEX
Crack Spreads:
|
|
|
|
Gasoline
|
25.44
|
|
18.03
|
Heating Oil
|
29.61
|
|
23.94
|
NYMEX 2-1-1 Crack Spread
|
27.53
|
|
20.99
|
PADD II
Group 3 Basis:
|
|
|
|
Gasoline
|
(6.78)
|
|
(2.05)
|
Ultra Low Sulfur Diesel
|
(1.64)
|
|
1.15
|
PADD II
Group 3 Product Crack:
|
|
|
|
Gasoline
|
18.66
|
|
15.98
|
Ultra Low Sulfur Diesel
|
27.98
|
|
25.10
|
PADD II
Group 3 2-1-1
|
23.32
|
|
20.54
|
|
Three
Months Ended
March
31,
|
|
|
2012
|
|
2011
|
|
|
(in
millions, except operating statistics)
|
|
|
|
Coffeyville Refinery Financial
Results:
|
|
|
|
|
Net
sales
|
$
1,295.7
|
|
$
1,111.1
|
|
Cost of
product sold
|
1,136.3
|
|
930.2
|
|
Refining margin*
|
159.4
|
|
180.9
|
|
Direct
operating expenses
|
43.8
|
|
42.3
|
|
Turnaround
expenses
|
20.1
|
|
3.1
|
|
Depreciation and amortization
|
17.3
|
|
16.3
|
|
Gross profit
|
78.2
|
|
119.2
|
|
Selling,
general and administrative expenses
|
10.4
|
|
12.9
|
|
Operating income
|
$ 67.8
|
|
$ 106.3
|
|
|
|
|
|
|
Refining
margin adjusted for FIFO impact*
|
$
144.3
|
|
$
159.0
|
|
|
|
|
|
|
Coffeyville Refinery Key Operating
Statistics:
|
|
|
|
|
Per crude
oil throughput barrel:
|
|
|
|
|
Refining margin*
|
$
19.82
|
|
$
20.38
|
|
FIFO impact (favorable) unfavorable
|
(1.88)
|
|
(2.47)
|
|
Refining margin adjusted for FIFO
impact*
|
17.94
|
|
17.91
|
|
Gross profit
|
9.73
|
|
13.43
|
|
Direct operating expenses
|
7.94
|
|
5.11
|
|
Direct
operating expenses per barrel sold
|
$
6.88
|
|
$
4.89
|
|
Barrels
sold (barrels per day)
|
102,077
|
|
103,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
March
31,
|
|
|
2012
|
|
2011
|
|
Coffeyville Refinery Throughput and Production
Data:
|
|
|
(barrels per day)
|
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
|
Sweet
|
71,916
|
|
76.7%
|
|
79,924
|
|
75.7%
|
|
Light/medium sour
|
5,447
|
|
5.8%
|
|
599
|
|
0.6%
|
|
Heavy sour
|
11,040
|
|
11.8%
|
|
18,161
|
|
17.2%
|
|
Total crude oil throughput
|
88,403
|
|
94.3%
|
|
98,684
|
|
93.5%
|
|
All other feedstocks and blendstocks
|
5,367
|
|
5.7%
|
|
6,873
|
|
6.5%
|
|
Total throughput
|
93,770
|
|
100.0%
|
|
105,557
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
Production:
|
|
|
|
|
|
|
|
|
Gasoline
|
50,269
|
|
53.0%
|
|
49,610
|
|
46.9%
|
|
Distillate
|
41,075
|
|
43.3%
|
|
42,876
|
|
40.6%
|
|
Other (excluding internally produced fuel)
|
3,492
|
|
3.7%
|
|
13,200
|
|
12.5%
|
|
Total refining production (excluding internally
produced fuel)
|
94,836
|
|
100.0%
|
|
105,686
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
Product
price (dollars per gallon):
|
|
|
|
|
|
|
|
|
Gasoline
|
$2.88
|
|
|
|
$2.65
|
|
|
|
Distillate
|
3.10
|
|
|
|
2.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
March 31, 2012
|
|
|
(in
millions, except operating statistics)
|
|
Wynnewood Refinery Financial
Results:
|
|
|
Net
sales
|
$
825.5
|
|
Cost of
product sold
|
717.5
|
|
Refining margin*
|
108.0
|
|
Direct
operating expenses
|
27.9
|
|
Turnaround
expenses
|
0.9
|
|
Depreciation and amortization
|
8.3
|
|
Gross profit
|
70.9
|
|
Selling,
general and administrative expenses
|
3.4
|
|
Operating income
|
$ 67.5
|
|
|
|
|
Refining
margin adjusted for FIFO impact*
|
$
103.8
|
|
|
|
|
Wynnewood Refinery Key Operating
Statistics:
|
|
|
Per crude
oil throughput barrel:
|
|
|
Refining margin*
|
$
20.36
|
|
FIFO impact (favorable) unfavorable
|
(0.79)
|
|
Refining margin adjusted for FIFO
impact*
|
19.57
|
|
Gross profit
|
13.36
|
|
Direct operating expenses
|
5.43
|
|
Direct
operating expenses per barrel sold
|
$
4.28
|
|
Barrels
sold (barrels per day)
|
73,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
March
31, 2012
|
|
(in
millions, except operating statistics)
|
|
Wynnewood Refinery Throughput and Production
Data:
|
|
|
(barrels per day)
|
|
|
|
|
Throughput:
|
|
|
|
|
Sweet
|
38,720
|
|
62.8%
|
|
Light/medium sour
|
19,535
|
|
31.7%
|
|
Heavy sour
|
—
|
|
—%
|
|
Total crude oil throughput
|
58,255
|
|
94.5%
|
|
All other feedstocks and blendstocks
|
3,360
|
|
5.5%
|
|
Total throughput
|
61,615
|
|
100.0%
|
|
|
|
|
|
|
Production:
|
|
|
|
|
Gasoline
|
31,022
|
|
52.0%
|
|
Distillate
|
21,254
|
|
35.6%
|
|
Other (excluding internally produced fuel)
|
7,387
|
|
12.4%
|
|
Total refining production (excluding internally
produced fuel)
|
59,663
|
|
100.0%
|
|
|
|
|
|
|
Product
price (dollars per gallon):
|
|
|
|
|
Gasoline
|
$2.91
|
|
|
|
Distillate
|
3.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nitrogen Fertilizer Segment Operating Data
The following tables set forth information about the Nitrogen
Fertilizer segment operated by CVR Partners, of which we own a
majority interest and serve as general partner. Reconciliations of
certain non-GAAP financial measures are provided under "Use of
Non-GAAP Financial Measures" below. Additional discussion of
operating results for the Nitrogen Fertilizer segment for the
quarter ended March 31, 2012 are
included in CVR Partners' press release dated May 1,
2012.
|
Three
Months Ended
March
31,
|
|
2012
|
|
2011
|
|
(in
millions, except as noted)
|
Nitrogen Fertilizer Segment Financial
Results:
|
|
|
|
Net
sales
|
$
78.3
|
|
$
57.4
|
Cost of
product sold
|
12.6
|
|
7.5
|
Direct
operating expenses
|
22.9
|
|
23.0
|
Insurance
recovery — business interruption
|
—
|
|
(2.9)
|
Depreciation and amortization
|
5.4
|
|
4.6
|
|
|
|
|
Operating
income
|
$ 31.4
|
|
$ 16.8
|
|
|
|
|
Adjusted
Nitrogen Fertilizer EBITDA*
|
$
38.0
|
|
$
25.9
|
|
|
|
|
|
Three
Months Ended
March
31,
|
|
2012
|
|
2011
|
|
(in
millions, except as noted)
|
Nitrogen Fertilizer Segment Key Operating
Statistics:
|
|
|
|
Production
(thousand tons):
|
|
|
|
Ammonia (gross produced) (1)
|
89.3
|
|
105.3
|
Ammonia (net available for sale) (1)
|
25.0
|
|
35.2
|
UAN
|
154.6
|
|
170.6
|
|
|
|
|
Petroleum
coke consumed (thousand tons)
|
120.5
|
|
124.1
|
Petroleum
coke (cost per ton)
|
$
42
|
|
$
15
|
|
|
|
|
Sales
(thousand tons):
|
|
|
|
Ammonia
|
29.9
|
|
27.3
|
UAN
|
158.3
|
|
179.3
|
|
|
|
|
Product
pricing (plant gate) (dollars per ton) (2):
|
|
|
|
Ammonia
|
$
613
|
|
$
564
|
UAN
|
$
313
|
|
$
207
|
|
|
|
|
On-stream
factors (3):
|
|
|
|
Gasification
|
93.3%
|
|
100.0%
|
Ammonia
|
91.5%
|
|
96.7%
|
UAN
|
83.6%
|
|
93.2%
|
|
|
|
|
Market
Indicators:
|
|
|
|
Ammonia —
Southern Plains (dollars per ton)
|
$
586
|
|
$
605
|
UAN — Mid
Cornbelt (dollars per ton)
|
$
343
|
|
$
349
|
_______________
|
|
|
|
* See
Use of Non-GAAP Financial Measures below.
|
(1) Gross tons produced for ammonia represent the
total ammonia produced, including ammonia produced that was
upgraded into UAN. The net tons available for sale represent the
ammonia available for sale that was not upgraded into UAN.
(2) Plant gate sales per ton represent net
sales less freight and hydrogen revenue divided by product sales
volume in tons in the reporting period and is shown in order to
provide a pricing measure that is comparable across the fertilizer
industry.
(3) On-stream factor is the total number of
hours operated divided by the total number of hours in the
reporting period and is included as a measure of operating
efficiency.
Use of Non-GAAP Financial Measures
To supplement the actual results in accordance with GAAP for the
applicable periods, the Company also uses non-GAAP measures as
discussed below, which are adjusted for GAAP-based results. The use
of non-GAAP adjustments are not in accordance with or an
alternative for GAAP. The adjustments are provided to enhance an
overall understanding of the Company's financial performance for
the applicable periods and are indicators management believes are
relevant and useful for planning and forecasting future
periods.
Adjusted net income is not a recognized term under GAAP and
should not be substituted for net income (loss) as a measure
of our performance but rather should be utilized as a supplemental
measure of financial performance in evaluating our business.
Management believes that adjusted net income provides relevant and
useful information that enables external users of our financial
statements, such as industry analysts, investors, lenders and
rating agencies to better understand and evaluate our ongoing
operating results and allow for greater transparency in the review
of our overall financial, operational and economic performance.
|
Three
Months Ended
March
31,
|
|
2012
|
|
2011
|
|
(in
millions, except per share data)
|
|
Reconciliation of Net Income (loss) to Adjusted
Net Income:
|
|
|
|
Net Income
(loss) attributable to CVR Energy stockholders
|
$
(25.2)
|
|
$
45.8
|
Adjustments (all net of taxes):
|
|
|
|
FIFO impact (favorable)
|
(11.7)
|
|
(13.2)
|
Share-based compensation
|
2.4
|
|
13.8
|
Loss on extinguishment of debt
|
—
|
|
1.2
|
Major scheduled turnaround expense
|
12.7
|
|
1.9
|
Unrealized loss on derivatives
|
77.7
|
|
—
|
Expenses associated with proxy matters
|
9.0
|
|
—
|
Expenses associated with the acquisition of
Gary-Williams, net of taxes (1)
|
2.2
|
|
—
|
Adjusted net income
|
$ 67.1
|
|
$ 49.5
|
|
|
|
|
Adjusted net income per diluted share
|
$
0.76
|
|
$
0.56
|
_______________
|
|
|
|
|
(1) Legal,
professional and integration expenses related to acquisition of
Gary-Williams in December 2011.
|
|
Refining margin per crude oil throughput barrel is a measurement
calculated as the difference between net sales and cost of product
sold (exclusive of depreciation and amortization). Refining margin
is a non-GAAP measure that we believe is important to investors in
evaluating our refinery's performance as a general indication of
the amount above our cost of product sold that we are able to sell
refined products. Each of the components used in this calculation
(net sales and cost of product sold exclusive of depreciation and
amortization) can be taken directly from our Statement of
Operations. Our calculation of refining margin may differ from
similar calculations of other companies in our industry, thereby
limiting its usefulness as a comparative measure. In order to
derive the refining margin per crude oil throughput barrel, we
utilize the total dollar figures for refining margin as derived
above and divide by the applicable number of crude oil throughput
barrels for the period. We believe that refining margin is
important to enable investors to better understand and evaluate our
ongoing operating results and allow for greater transparency in the
review of our overall financial, operational and economic
performance.
Refining margin per crude oil throughput barrel adjusted for
FIFO impact is a measurement calculated as the difference between
net sales and cost of product sold (exclusive of depreciation and
amortization) adjusted for FIFO impacts. Refining margin adjusted
for FIFO impact is a non-GAAP measure that we believe is important
to investors in evaluating our refinery's performance as a general
indication of the amount above our cost of product sold (taking
into account the impact of our utilization of FIFO) that we are
able to sell refined products. Our calculation of refining margin
adjusted for FIFO impact may differ from calculations of other
companies in our industry, thereby limiting its usefulness as a
comparative measure. Under our FIFO accounting method, changes in
crude oil prices can cause fluctuations in the inventory valuation
of our crude oil, work in process and finished goods, thereby
resulting in favorable FIFO impacts when crude oil prices increase
and unfavorable FIFO impacts when crude oil prices decrease.
Adjusted Petroleum and Nitrogen Fertilizer EBITDA represents
operating income adjusted for FIFO impacts (favorable) unfavorable,
share-based compensation, major scheduled turnaround expenses,
realized gain (loss) on derivatives, net, loss on disposition of
fixed assets, depreciation and amortization and other income
(expense). Adjusted EBITDA by operating segment results from
operating income by segment adjusted for items that we believe are
needed in order to evaluate results in a more comparative analysis
from period to period. Adjusted EBITDA by operating segment is not
a recognized term under GAAP and should not be substituted for
operating income as a measure of our liquidity but should be
utilized as a supplemental measure of liquidity in evaluating our
business. Below is a reconciliation of operating income to adjusted
EBITDA for the petroleum and nitrogen fertilizer segments for the
three months ended March 31, 2012 and
2011:
|
Three
Months Ended
March
31,
|
|
2012
|
|
2011
|
|
(in
millions)
|
Petroleum:
|
|
|
|
Petroleum
operating income
|
$
134.9
|
|
$
105.7
|
FIFO impacts
(favorable)
|
(19.3)
|
|
(21.9)
|
Share-based
compensation
|
1.0
|
|
6.6
|
Major scheduled turnaround
expenses
|
21.0
|
|
3.1
|
Realized (loss) on derivatives,
net
|
(19.1)
|
|
(18.8)
|
Depreciation and
amortization
|
26.3
|
|
16.9
|
Other income
|
0.1
|
|
0.1
|
Adjusted
Petroleum EBITDA
|
$144.9
|
|
$ 91.7
|
|
Three
Months Ended
March
31,
|
|
2012
|
|
2011
|
|
(in
millions)
|
Nitrogen Fertilizer:
|
|
|
|
Nitrogen
Fertilizer operating income
|
$
31.4
|
|
$
16.8
|
Share-based
compensation
|
1.2
|
|
4.6
|
Depreciation and
amortization
|
5.4
|
|
4.6
|
Other (expense)
|
—
|
|
(0.1)
|
Adjusted
Nitrogen Fertilizer EBITDA
|
$ 38.0
|
|
$ 25.9
|
Derivatives Summary. To reduce the basis risk between the
price of products for Group 3 and that of the NYMEX associated with
selling forward derivative contracts for NYMEX crack spreads, we
may enter into basis swap positions to lock the price difference.
If the difference between the price of products on the NYMEX and
Group 3 (or some other price benchmark as we may deem appropriate)
is different than the value contracted in the swap, then we will
receive from or owe to the counterparty the difference on each unit
of product contracted in the swap, thereby completing the locking
of our margin. From time to time our petroleum segment holds
various NYMEX positions through a third-party clearing house. In
addition, the Company enters into commodity swap contracts. The
physical volumes are not exchanged and these contracts are net
settled with cash.
The table below summarizes our open commodity derivatives
positions as of March 31, 2012.
The positions are primarily in the form of 'crack spread' swap
agreements with financial counterparties, wherein the Company will
receive the fixed prices noted below.
Commodity Swaps
|
Barrels
|
Fixed
Price(1)
|
Second
Quarter 2012
|
4,800,000
|
$
26.12
|
Third
Quarter 2012
|
4,650,000
|
23.68
|
Fourth
Quarter 2012
|
3,075,000
|
20.54
|
|
|
|
First
Quarter 2013
|
2,025,000
|
24.23
|
Second
Quarter 2013
|
1,050,000
|
24.74
|
Third
Quarter 2013
|
1,050,000
|
23.67
|
Fourth
Quarter 2013
|
1,050,000
|
22.23
|
|
|
|
Total
|
17,700,000
|
$ 23.83
|
|
|
|
____________________
|
(1)
Weighted-average price of all positions for period
indicated.
|
SOURCE CVR Energy, Inc.