SUGAR LAND, Texas, Aug. 1, 2012 /PRNewswire/ -- CVR Energy,
Inc. (NYSE: CVI), a refiner and marketer of petroleum fuels and the
majority owner in nitrogen fertilizer manufacturer CVR Partners, LP
(NYSE: UAN), today reported second quarter 2012 net income of
$154.7 million, or $1.75 per fully diluted share, on net sales of
$2,308.3 million, compared to second
quarter 2011 net income of $124.9
million, or $1.42 per fully
diluted share, on net sales of $1,447.7
million.
(Logo: http://photos.prnewswire.com/prnh/20071203/CVRLOGO
)
Second quarter 2012 adjusted net income, a non-GAAP financial
measure, was $223.1 million, or
$2.52 per diluted share, compared to
$126.4 million, or $1.44 per diluted share, for the second quarter
of 2011. Major items impacting the 2012 second quarter adjusted net
income, all net of taxes, were an unfavorable impact from first-in,
first-out (FIFO) accounting of $63.9
million; an unrealized gain on derivatives of $28.4 million; expenses associated with proxy
matters of $17.8 million; and
share-based compensation of $10.8
million.
Year-to-date, the company reported net income of $129.5 million, or $1.46 per diluted share, on net sales of
$4,276.9 million compared to net
income of $170.7 million, or
$1.94 per diluted share, on net sales
of $2,615.0 million for the first six
months of 2011. Strong operating results for the first six months
of 2012 were negatively impacted by an unrealized loss before tax
on derivatives of $81.3 million and
an unfavorable impact from FIFO accounting of $95.0 million.
"Our solid second quarter results were driven by wide crack
spreads, favorable crude differentials and strong operational
performance from both of our refineries," said Jack Lipinski, CVR Energy's chief executive
officer. "Following the completion of a scheduled turnaround in
March, our Coffeyville plant has
run exceptionally well. In fact, the refinery set a new crude
throughput record of 125,900 barrels per day for the month of
June.
"Our continuing integration efforts are paying off handsomely at
the Wynnewood refinery, as well,"
he said. "Wynnewood posted
$97.2 million of operating income for
the quarter.
"Our results were also supported by our nitrogen fertilizer
segment, which performed very well in the second quarter, reporting
operating income of $36.1 million,"
Lipinski said.
Petroleum Business
The petroleum business, which includes the Coffeyville and Wynnewood refineries, reported second quarter
2012 operating income of $248.9
million, and adjusted EBITDA, a non-GAAP financial measure,
of $381.4 million, on net sales of
$2,229.5 million, compared to
operating income in the same quarter a year earlier of $183.5 million, and adjusted EBITDA of
$208.4 million, on net sales of
$1,376.7 million.
Second quarter 2012 throughput of crude oil and all other
feedstocks and blendstocks totaled 199,501 barrels per day (bpd),
compared to 116,459 bpd for the same period in 2011. Crude oil
throughput for the second quarter 2012 averaged 190,372 bpd per day
compared with 109,486 bpd for the same period in 2011. The
year-over-year increase in throughput was mostly driven by the
addition of the Wynnewood
refinery.
Refining margin adjusted for FIFO impact per crude oil
throughput barrel, a non-GAAP financial measure, was $20.98 in the second quarter 2012 compared to
$25.49 during the same period in
2011. Gross profit per crude oil throughput barrel was $15.31 in the second quarter 2012, as compared to
$19.36 during the same period in
2011.
Direct operating expense per barrel sold, exclusive of
depreciation and amortization, for the second quarter 2012 was
$3.81, down from $4.09 in the second quarter 2011, driven by
increased throughput at the Coffeyville refinery.
Coffeyville Refinery
The Coffeyville refinery
reported second quarter 2012 operating income of $151.9 million on net sales of $2,162.2 million, compared to $185.4 million of operating income on net sales
of $1,376.6 million for the second
quarter of 2011. Second quarter 2012 crude oil throughput totaled
121,325 bpd, compared to 109,486 bpd in the second quarter of 2011.
Refining margin per crude oil throughput barrel for the second
quarter of 2012 was $20.61, compared
to $25.46 for the same period in
2011. Gross profit per crude oil throughput barrel was $15.00 in the second quarter of 2012, compared to
$19.40 for the 2011 second quarter.
The refining margin adjusted for FIFO impact was $309.4 million for the 2012 second quarter,
compared to $257.8 million for the
same period in 2011. Direct operating expense per barrel sold for
the 2012 second quarter was $3.62,
compared to $4.09 for the 2011 second
quarter.
Wynnewood Refinery
CVR Energy acquired the Wynnewood refinery in December 2011. The 2012 second quarter represents
the refinery's second full quarter of production as a CVR Energy
subsidiary.
For the second quarter of 2012, the refinery's crude oil
throughput totaled 69,046 bpd. The refinery's second quarter 2012
operating income was $97.2 million on
net sales of $782.3 million. The
refining margin adjusted for FIFO impact in the second quarter 2012
was $158.5 million and direct
operating expense per barrel sold for the quarter was $4.02.
Nitrogen Fertilizers Business
The fertilizer business operated by CVR Partners, LP reported
second quarter 2012 operating income of $36.1 million, and adjusted EBITDA, a non-GAAP
financial measure, of $44.1 million,
on net sales of $81.4 million,
compared to operating income of $39.3
million, and adjusted EBITDA of $45.0
million, on net sales of $80.7
million for the 2011 second quarter.
CVR Partners produced 108,900 tons of ammonia during the second
quarter of 2012, of which 34,900 net tons were available for sale
while the rest was upgraded to 180,000 tons of more profitable urea
ammonium nitrate (UAN). In the 2011 second quarter, the plant
produced 102,300 tons of ammonia with 28,200 net tons available for
sale with the remainder upgraded to 179,400 tons of UAN.
Second quarter 2012 average realized plant gate prices for
ammonia and UAN were $568 per ton and
$329 per ton, respectively, as
compared to $574 per ton and
$300 per ton, respectively, for the
same period in 2011.
Cash and Debt
Consolidated cash and cash equivalents, which included
$196.4 million for CVR Partners,
increased to $692.6 million at the
end of the 2012 second quarter, compared to $500.9 million at the end of the first quarter of
2012, primarily due to increased cash flows in the petroleum
business. Consolidated long-term debt at the end of the 2012
second quarter, which included $125.0
million for CVR Partners, remained nearly unchanged at
$851.9 million.
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, except to the extent
required by law.
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.
For further information, please contact:
Investor Relations:
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
June
30,
|
Change from
2011
|
|
2012
|
2011
|
Change
|
Percent
|
|
(in
millions, except per share data)
|
Consolidated Statement of Operations
Data:
|
|
|
|
|
Net
sales
|
$
2,308.3
|
$
1,447.7
|
$
860.6
|
59.4%
|
Cost of
product sold
|
1,874.2
|
1,123.4
|
750.8
|
66.8
|
Direct
operating expenses
|
94.1
|
66.2
|
27.9
|
42.1
|
Insurance
recovery — business interruption
|
—
|
—
|
—
|
—
|
Selling,
general and administrative expenses
|
72.0
|
18.2
|
53.8
|
295.6
|
Depreciation and amortization
|
32.2
|
22.0
|
10.2
|
46.4
|
Operating income
|
235.8
|
217.9
|
17.9
|
8.2
|
Interest
expense and other financing costs
|
(19.0)
|
(14.2)
|
(4.8)
|
33.8
|
Gain
(loss) on derivatives, net
|
|
|
|
|
Realized
|
(8.1)
|
0.5
|
(8.6)
|
(1,720.0)
|
Unrealized
|
46.9
|
6.4
|
40.5
|
632.8
|
Loss on
extinguishment of debt
|
—
|
(0.2)
|
0.2
|
—
|
Other
income, net
|
0.8
|
0.5
|
0.3
|
60.0
|
Income before income tax expense
|
256.4
|
210.9
|
45.5
|
21.6
|
Income tax
expense
|
91.1
|
76.7
|
14.4
|
18.8
|
Net income
|
165.3
|
134.2
|
31.1
|
23.2
|
Net income attributable to noncontrolling
interest
|
10.6
|
9.3
|
1.3
|
14.0
|
Net income attributable to CVR Energy
stockholders
|
$ 154.7
|
$ 124.9
|
$ 29.8
|
23.9%
|
_______________
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share
|
$
1.78
|
$
1.44
|
$
0.34
|
23.6%
|
Diluted
earnings per share
|
$
1.75
|
$
1.42
|
$
0.33
|
23.2%
|
|
|
|
|
|
Adjusted
net income
|
$
223.1
|
$
126.4
|
$
96.7
|
76.5%
|
Adjusted
net income, per diluted share
|
$
2.52
|
$
1.44
|
$
1.08
|
75.0%
|
|
|
|
|
|
Weighted-average common shares
outstanding:
|
|
|
|
|
Basic
|
86.8
|
86.4
|
0.4
|
0.5%
|
Diluted
|
88.5
|
87.8
|
0.6
|
0.7%
|
|
Six
Months Ended
June
30,
|
Change from
2011
|
|
2012
|
2011
|
Change
|
Percent
|
|
(in
millions, except per share data)
|
Consolidated Statement of Operations
Data:
|
|
|
|
|
Net
sales
|
$
4,276.9
|
$
2,615.0
|
$
1,661.9
|
63.6%
|
Cost of
product sold
|
3,509.4
|
2,060.2
|
1,449.2
|
70.3
|
Direct
operating expenses
|
209.6
|
134.6
|
75.0
|
55.7
|
Insurance
recovery — business interruption
|
—
|
(2.9)
|
2.9
|
—
|
Selling,
general and administrative expenses
|
117.3
|
51.5
|
65.8
|
127.8
|
Depreciation and amortization
|
64.3
|
44.1
|
20.2
|
45.8
|
Operating income
|
376.3
|
327.5
|
48.8
|
14.9
|
Interest
expense and other financing costs
|
(38.2)
|
(27.4)
|
(10.8)
|
39.4
|
Gain
(loss) on derivatives, net
|
|
|
|
|
Realized
|
(27.2)
|
(18.4)
|
(8.8)
|
47.8
|
Unrealized
|
(81.3)
|
3.2
|
(84.5)
|
(2,640.6)
|
Loss on
extinguishment of debt
|
—
|
(2.1)
|
2.1
|
—
|
Other
income, net
|
1.1
|
1.1
|
—
|
—
|
Income before income tax expense
|
230.7
|
283.9
|
(53.2)
|
(18.7)
|
Income tax
expense
|
81.4
|
103.9
|
(22.5)
|
(21.7)
|
Net income
|
149.3
|
180.0
|
(30.7)
|
(17.1)
|
Net income attributable to noncontrolling
interest
|
19.8
|
9.3
|
10.5
|
112.9
|
Net income attributable to CVR Energy
stockholders
|
$ 129.5
|
$ 170.7
|
$ (41.2)
|
(24.1)%
|
_____________
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share
|
$
1.49
|
$
1.97
|
$
(0.48)
|
(24.4)%
|
Diluted
earnings per share
|
$
1.46
|
$
1.94
|
$
(0.48)
|
(24.7)%
|
|
|
|
|
|
Adjusted
net income
|
$
295.7
|
$
175.6
|
$
120.1
|
68.4%
|
Adjusted
net income, per diluted share
|
$
3.34
|
$
2.00
|
$
1.34
|
67.0%
|
|
|
|
|
|
Weighted-average common shares
outstanding:
|
|
|
|
|
Basic
|
86.8
|
86.4
|
0.4
|
0.5%
|
Diluted
|
88.5
|
87.8
|
0.7
|
0.8%
|
|
|
|
|
|
|
|
_______________
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
June 30,
|
|
As of
December 31,
|
|
2012
|
|
2011
|
|
|
|
(audited)
|
|
(in
millions)
|
Balance
Sheet Data:
|
|
|
|
|
Cash and
cash equivalents
|
$
692.6
|
|
$
388.3
|
|
Working
capital
|
904.5
|
|
769.2
|
|
Total
assets
|
3,284.7
|
|
3,119.3
|
|
Long-term
debt
|
851.9
|
|
853.9
|
|
Total CVR
stockholders' equity
|
1,276.5
|
|
1,151.6
|
|
|
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
|
(in
millions)
|
|
Cash
Flow Data
|
|
|
|
|
|
Net cash
flow provided by (used in):
|
|
|
|
|
|
Operating activities
|
$
249.6
|
$
178.6
|
$
435.9
|
$
162.6
|
|
Investing activities
|
(45.4)
|
(13.6)
|
(104.8)
|
(20.7)
|
|
Financing activities
|
(12.4)
|
417.1
|
(26.8)
|
406.0
|
|
Net cash flow
|
$ 191.8
|
$ 582.1
|
$ 304.3
|
$ 547.9
|
|
|
|
|
|
|
|
|
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 June 30, 2012 are
included in CVR Partners' press release dated August 1, 2012.
|
Petroleum
|
Nitrogen
Fertilizer
(CVR
Partners)
|
Corporate
and
Other
|
Consolidated
|
|
(in
millions)
|
Three
months ended June 30, 2012
|
|
|
|
|
Net
sales
|
$
2,229.5
|
$
81.4
|
$
(2.6)
|
$
2,308.3
|
Cost of
product sold
|
1,866.1
|
10.7
|
(2.6)
|
1,874.2
|
Direct
operating expenses (1)
|
69.1
|
22.4
|
0.1
|
91.6
|
Major
scheduled turnaround expense
|
2.5
|
—
|
—
|
2.5
|
Selling,
general & administrative
|
16.3
|
7.0
|
48.7
|
72.0
|
Depreciation and amortization
|
26.6
|
5.2
|
0.4
|
32.2
|
Operating income (loss)
|
$
248.9
|
$
36.1
|
$
(49.2)
|
$
235.8
|
|
|
|
|
|
Capital
expenditures
|
$
27.0
|
$
16.9
|
$
1.7
|
$
45.6
|
|
|
|
|
|
Six
months ended June 30, 2012
|
|
|
|
|
Net
sales
|
$
4,128.0
|
$
159.7
|
$
(10.8)
|
$
4,276.9
|
Cost of
product sold
|
3,496.8
|
23.3
|
(10.7)
|
3,509.4
|
Direct
operating expenses (1)
|
140.8
|
45.3
|
—
|
186.1
|
Major
scheduled turnaround expense
|
23.5
|
—
|
—
|
23.5
|
Selling,
general & administrative
|
30.2
|
13.0
|
74.0
|
117.3
|
Depreciation and amortization
|
52.9
|
10.6
|
0.8
|
64.3
|
Operating income (loss)
|
$
383.8
|
$
67.5
|
$
(74.9)
|
$
376.3
|
|
|
|
|
|
Capital
expenditures
|
$
62.4
|
$
39.2
|
$
3.6
|
$
105.2
|
|
|
|
|
|
|
Petroleum
|
Nitrogen
Fertilizer
(CVR
Partners)
|
Corporate
and
Other
|
Consolidated
|
|
(in
millions)
|
Three
months ended June 30, 2011
|
|
|
|
|
Net
sales
|
$
1,376.7
|
$
80.7
|
$
(9.7)
|
$
1,447.7
|
Cost of
product sold
|
1,122.8
|
9.7
|
(9.1)
|
1,123.4
|
Direct
operating expenses (1)
|
44.0
|
22.3
|
(0.1)
|
66.2
|
Major
scheduled turnaround expense
|
—
|
—
|
—
|
—
|
Insurance
recovery – business interruption
|
—
|
—
|
—
|
—
|
Selling,
general & administrative
|
9.4
|
4.7
|
4.1
|
18.2
|
Depreciation and amortization
|
17.0
|
4.7
|
0.3
|
22.0
|
Operating income (loss)
|
$
183.5
|
$
39.3
|
$
(4.9)
|
$
217.9
|
|
|
|
|
|
Capital
expenditures
|
$
8.6
|
$
4.0
|
$
1.0
|
$
13.6
|
|
|
|
|
|
Six
months ended June 30, 2011
|
|
|
|
|
Net
sales
|
$
2,487.9
|
$
138.1
|
$
(11.0)
|
$
2,615.0
|
Cost of
product sold
|
2,053.0
|
17.2
|
(10.0)
|
2,060.2
|
Direct
operating expenses (1)
|
89.5
|
45.3
|
(0.2)
|
134.6
|
Major
scheduled turnaround expense
|
—
|
—
|
—
|
—
|
Insurance
recovery – business interruption
|
—
|
(2.9)
|
—
|
(2.9)
|
Selling,
general & administrative
|
22.3
|
13.1
|
16.1
|
51.5
|
Depreciation and amortization
|
33.9
|
9.3
|
0.9
|
44.1
|
Operating income (loss)
|
$
289.2
|
$
56.1
|
$
(17.8)
|
$
327.5
|
|
|
|
|
|
Capital
expenditures
|
$
13.2
|
$
6.0
|
$
1.8
|
$
21.0
|
____________________
(1)
|
Excluding turnaround
expenses.
|
|
Petroleum
|
Nitrogen
Fertilizer
(CVR
Partners)
|
Corporate
and
Other
|
Consolidated
|
|
(in
millions)
|
June
30, 2012
|
|
|
|
|
Cash and
cash equivalents (1)
|
$
—
|
$
196.4
|
$
496.2
|
$
692.6
|
Total
assets
|
2,540.0
|
639.7
|
105.0
|
3,284.7
|
Long-term
debt (1)
|
—
|
125.0
|
726.9
|
851.9
|
|
|
|
|
|
|
|
|
|
|
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
June
30,
|
Six
Months Ended
June
30,
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
(in
millions, except operating statistics)
|
Petroleum Segment Summary Financial
Results:
|
|
|
|
|
Net
sales
|
$
2,229.5
|
$
1,376.7
|
$
4,128.0
|
$
2,487.9
|
Cost of
product sold
|
1,866.1
|
1,122.8
|
3,496.8
|
2,053.0
|
Refining margin*
|
363.4
|
253.9
|
631.2
|
434.9
|
Direct
operating expenses
|
69.1
|
44.0
|
140.8
|
89.5
|
Major
scheduled turnaround expense
|
2.5
|
—
|
23.5
|
—
|
Depreciation and amortization
|
26.6
|
17.0
|
52.9
|
33.9
|
Gross profit
|
265.2
|
192.9
|
414.0
|
311.5
|
Selling,
general and administrative expenses
|
16.3
|
9.4
|
30.2
|
22.3
|
Operating income
|
$ 248.9
|
$ 183.5
|
$ 383.8
|
$ 289.2
|
|
|
|
|
|
Refining
margin adjusted for FIFO impact*
|
$
468.8
|
$
258.0
|
$
726.2
|
$
413.6
|
|
|
|
|
|
Adjusted
Petroleum EBITDA*
|
$
381.4
|
$
208.4
|
$
535.2
|
$
296.6
|
|
|
|
|
|
Petroleum Segment Key Operating
Statistics:
|
|
|
|
|
Per crude
oil throughput barrel:
|
|
|
|
|
Refining margin*
|
$
20.98
|
$
25.49
|
$
20.58
|
$
23.08
|
FIFO impact (favorable) unfavorable
|
6.09
|
0.41
|
3.10
|
(1.13)
|
Refining margin adjusted for FIFO
impact*
|
27.07
|
25.90
|
23.68
|
21.95
|
Gross profit
|
15.31
|
19.36
|
13.50
|
16.53
|
Direct operating expenses
|
4.13
|
4.42
|
5.36
|
4.74
|
Direct
operating expenses per barrel sold
|
$
3.81
|
$
4.09
|
$
4.69
|
$
4.45
|
Barrels
sold (barrels per day)
|
206,606
|
118,435
|
190,319
|
110,860
|
|
|
|
|
|
|
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|
2012
|
2011
|
2012
|
2011
|
Petroleum Segment Summary Refining Throughput and
Production Data:
|
|
|
|
|
|
|
|
|
(barrels per day)
|
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
|
Sweet
|
148,912
|
74.6%
|
84,654
|
72.6%
|
129,781
|
73.1%
|
82,302
|
74.1%
|
Light/medium sour
|
20,488
|
10.3%
|
198
|
0.2%
|
22,728
|
12.8%
|
397
|
0.4%
|
Heavy sour
|
20,972
|
10.5%
|
24,634
|
21.2%
|
16,006
|
9.0%
|
21,416
|
19.3%
|
Total crude oil throughput
|
190,372
|
95.4%
|
109,486
|
94.0%
|
168,515
|
94.9%
|
104,115
|
93.8%
|
All other feedstocks and
blendstocks
|
9,129
|
4.6%
|
6,973
|
6.0%
|
8,929
|
5.1%
|
6,923
|
6.2%
|
Total throughput
|
199,501
|
100.0%
|
116,459
|
100.0%
|
174,444
|
100.0%
|
111,038
|
100.0%
|
|
|
|
|
|
|
|
|
|
Production:
|
|
|
|
|
|
|
|
|
Gasoline
|
96,972
|
48.7%
|
53,495
|
45.5%
|
89,131
|
50.4%
|
51,564
|
46.2%
|
Distillate
|
82,075
|
41.3%
|
48,959
|
41.6%
|
72,202
|
40.9%
|
45,934
|
41.1%
|
Other (excluding internally
produced fuel)
|
19,910
|
10.0%
|
15,106
|
12.9%
|
15,396
|
8.7%
|
14,158
|
12.7%
|
Total refining production
(excluding internally
produced fuel)
|
198,957
|
100.0%
|
117,560
|
100.0%
|
176,729
|
100.0%
|
111,656
|
100.0%
|
|
|
|
|
|
|
|
|
|
Product
price (dollars per gallon):
|
|
|
|
|
|
|
|
|
Gasoline
|
$
2.89
|
|
$
3.07
|
|
$
2.88
|
|
$
2.86
|
|
Distillate
|
2.95
|
|
3.14
|
|
3.03
|
|
3.03
|
|
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|
2012
|
2011
|
2012
|
2011
|
Market
Indicators (dollars per barrel):
|
|
|
|
|
|
West Texas
Intermediate (WTI) NYMEX
|
$
93.35
|
$
102.34
|
$
98.15
|
$
98.50
|
Crude Oil
Differentials:
|
|
|
|
|
WTI less WTS (light/medium sour)
|
5.28
|
2.51
|
4.48
|
3.30
|
WTI less WCS (heavy sour)
|
20.45
|
17.61
|
23.79
|
19.76
|
NYMEX
Crack Spreads:
|
|
|
|
|
Gasoline
|
30.42
|
27.85
|
27.95
|
22.98
|
Heating Oil
|
28.13
|
25.56
|
28.87
|
24.76
|
NYMEX 2-1-1 Crack Spread
|
29.27
|
26.71
|
28.41
|
23.87
|
PADD II
Group 3 Basis:
|
|
|
|
|
Gasoline
|
(3.24)
|
(1.59)
|
(5.00)
|
(1.82)
|
Ultra Low Sulfur Diesel
|
2.16
|
3.24
|
0.28
|
2.21
|
PADD II
Group 3 Product Crack:
|
|
|
|
|
Gasoline
|
27.18
|
26.26
|
22.95
|
21.16
|
Ultra Low Sulfur Diesel
|
30.29
|
28.81
|
29.14
|
26.97
|
PADD II
Group 3 2-1-1
|
28.74
|
27.53
|
26.05
|
24.06
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
|
(in
millions, except operating statistics)
|
|
Coffeyville Refinery Financial
Results:
|
|
|
|
|
|
Net
sales
|
$
2,162.2
|
$
1,376.6
|
$
3,457.9
|
$
2,487.7
|
|
Cost of
product sold
|
1,934.6
|
1,122.9
|
3,070.9
|
2,053.1
|
|
Refining margin*
|
227.6
|
253.7
|
387.0
|
434.6
|
|
Direct
operating expenses
|
43.6
|
43.0
|
87.4
|
85.2
|
|
Turnaround
expenses
|
0.9
|
1.1
|
21.0
|
4.3
|
|
Depreciation and amortization
|
17.4
|
16.3
|
34.7
|
32.6
|
|
Gross profit
|
165.7
|
193.3
|
243.9
|
312.5
|
|
Selling,
general and administrative expenses
|
13.8
|
7.9
|
24.2
|
20.7
|
|
Operating income
|
$ 151.9
|
$ 185.4
|
$ 219.7
|
$ 291.8
|
|
|
|
|
|
|
|
Refining
margin adjusted for FIFO impact*
|
$
309.4
|
$
257.8
|
$
455.8
|
$
413.3
|
|
|
|
|
|
|
|
Coffeyville Refinery Key Operating
Statistics:
|
|
|
|
|
|
Per crude
oil throughput barrel:
|
|
|
|
|
|
Refining margin*
|
$
20.61
|
$
25.46
|
$
20.27
|
$
23.06
|
|
FIFO impact (favorable) unfavorable
|
7.41
|
0.41
|
3.61
|
(1.13)
|
|
Refining margin adjusted for FIFO
impact*
|
28.02
|
25.87
|
23.88
|
21.93
|
|
Gross profit
|
15.00
|
19.40
|
12.78
|
16.59
|
|
Direct operating expenses
|
4.03
|
4.42
|
5.68
|
4.74
|
|
Direct
operating expenses per barrel sold
|
$
3.62
|
$
4.09
|
$
5.02
|
$
4.45
|
|
Barrels
sold (barrels per day)
|
135,062
|
118,435
|
118,569
|
110,860
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|
2012
|
2011
|
2012
|
2011
|
Coffeyville Refinery Throughput and Production
Data:
|
|
|
|
|
|
|
|
|
(barrels per day)
|
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
|
Sweet
|
100,166
|
78.4%
|
84,654
|
72.6%
|
86,041
|
77.7%
|
82,302
|
74.1%
|
Light/medium sour
|
187
|
0.1%
|
198
|
0.2%
|
2,817
|
2.5%
|
397
|
0.4%
|
Heavy sour
|
20,972
|
16.4%
|
24,634
|
21.2%
|
16,006
|
14.4%
|
21,416
|
19.3%
|
Total crude oil throughput
|
121,325
|
94.9
|
109,486
|
94.0%
|
104,864
|
94.6%
|
104,115
|
93.8%
|
All other feedstocks and blendstocks
|
6,500
|
5.1%
|
6,973
|
6.0%
|
5,934
|
5.4%
|
6,923
|
6.2%
|
Total throughput
|
127,825
|
100.0%
|
116,459
|
100.0%
|
110,798
|
100.0%
|
111,038
|
100.0%
|
|
|
|
|
|
|
|
|
|
Production:
|
|
|
|
|
|
|
|
|
|
Gasoline
|
62,351
|
47.9%
|
53,495
|
45.5%
|
56,310
|
50.1%
|
51,564
|
46.2%
|
|
Distillate
|
54,933
|
42.3%
|
48,959
|
41.6%
|
48,004
|
42.7%
|
45,934
|
41.1%
|
|
Other
(excluding internally produced
fuel)
|
12,753
|
9.8%
|
15,106
|
12.9%
|
8,123
|
7.2%
|
14,158
|
12.7%
|
Total refining production (excluding
internally produced fuel)
|
130,037
|
100.0%
|
117,560
|
100.0%
|
112,437
|
100.0%
|
111,656
|
100.0%
|
|
|
|
|
|
|
|
|
|
Product
price (dollars per gallon):
|
|
|
|
|
|
|
|
|
Gasoline
|
$
2.89
|
|
$
3.07
|
|
$
2.89
|
|
$
2.86
|
|
Distillate
|
2.94
|
|
3.14
|
|
3.00
|
|
3.03
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
June
30, 2012
|
Six
Months Ended
June
30, 2012
|
|
(in
millions, except operating statistics)
|
Wynnewood Refinery Financial
Results:
|
|
|
Net
sales
|
$
782.3
|
$
1,607.8
|
Cost of
product sold
|
647.5
|
1,365.0
|
Refining margin*
|
134.8
|
242.8
|
Direct
operating expenses
|
25.5
|
53.4
|
Turnaround
expenses
|
1.6
|
2.5
|
Depreciation and amortization
|
8.4
|
16.7
|
Gross profit
|
99.3
|
170.2
|
Selling,
general and administrative expenses
|
2.1
|
5.5
|
Operating income
|
$
97.2
|
$
164.7
|
|
|
|
Refining
margin adjusted for FIFO impact*
|
$
158.5
|
$
269.0
|
|
|
|
Wynnewood Refinery Key Operating
Statistics:
|
|
|
Per crude
oil throughput barrel:
|
|
|
Refining margin*
|
$
21.47
|
$
20.97
|
FIFO impact (favorable) unfavorable
|
3.76
|
2.25
|
Refining margin adjusted for FIFO
impact*
|
25.23
|
23.22
|
Gross profit
|
15.82
|
14.70
|
Direct operating expenses
|
4.30
|
4.83
|
Direct
operating expenses per barrel sold
|
$
4.02
|
$
4.15
|
Barrels
sold (barrels per day)
|
74,072
|
73,996
|
|
Three
Months Ended
June
30,
2012
|
Six
Months Ended
June
30,
2012
|
|
|
%
|
|
%
|
Wynnewood Refinery Throughput and Production
Data:
|
|
|
|
|
(barrels per day)
|
|
|
|
|
Throughput:
|
|
|
|
|
Sweet
|
48,745
|
68.0%
|
43,740
|
65.6%
|
Light/medium sour
|
20,301
|
28.3%
|
19,911
|
29.9%
|
Heavy sour
|
—
|
—%
|
—
|
—%
|
Total crude oil throughput
|
69,046
|
96.3%
|
63,651
|
95.5%
|
All other
feedstocks and blendstocks
|
2,629
|
3.7%
|
2,995
|
4.5%
|
Total throughput
|
71,675
|
100.0%
|
66,646
|
100.0%
|
|
|
|
|
|
Production:
|
|
|
|
|
Gasoline
|
34,621
|
50.2%
|
32,821
|
51.0%
|
Distillate
|
27,142
|
39.4%
|
24,198
|
37.6%
|
Other (excluding internally produced fuel)
|
7,157
|
10.4%
|
7,273
|
11.4%
|
Total refining production (excluding internally
produced fuel)
|
68,920
|
100.0%
|
64,292
|
100.0%
|
|
|
|
|
|
Product
price (dollars per gallon):
|
|
|
|
|
Gasoline
|
$
2.88
|
|
$
2.90
|
|
Distillate
|
2.95
|
|
3.06
|
|
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 June 30, 2012 are
included in CVR Partners' press release dated August 1, 2012.
|
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
|
(in
millions, except as noted)
|
|
Nitrogen Fertilizer Segment Financial
Results:
|
|
|
|
|
|
Net
sales
|
$
81.4
|
$
80.7
|
$
159.7
|
$
138.1
|
|
Cost of
product sold
|
10.7
|
9.7
|
23.3
|
17.2
|
|
Direct
operating expenses
|
22.4
|
22.3
|
45.3
|
45.3
|
|
Insurance
recovery — business interruption
|
—
|
—
|
—
|
(2.9)
|
|
Selling,
general and administrative expenses
|
7.0
|
4.7
|
13.0
|
13.1
|
|
Depreciation and amortization
|
5.2
|
4.7
|
10.6
|
9.3
|
|
|
|
|
|
|
|
Operating income
|
$ 36.1
|
$ 39.3
|
$ 67.5
|
$ 56.1
|
|
|
|
|
|
|
|
Adjusted
Nitrogen Fertilizer EBITDA*
|
$
44.1
|
$
45.0
|
$
82.1
|
$
70.9
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|
2012
|
2011
|
2012
|
2011
|
|
(in
millions, except as noted)
|
Nitrogen Fertilizer Segment Key Operating
Statistics:
|
|
|
|
|
Production
(thousand tons):
|
|
|
|
|
Ammonia (gross produced) (1)
|
108.9
|
102.3
|
198.2
|
207.6
|
Ammonia (net available for sale) (1)
|
34.9
|
28.2
|
59.9
|
63.4
|
UAN
|
180.0
|
179.4
|
334.6
|
350.0
|
|
|
|
|
|
Petroleum
coke consumed (thousand tons)
|
130.2
|
135.8
|
250.7
|
259.9
|
Petroleum
coke (cost per ton)
|
$
31
|
$
30
|
$
36
|
$
23
|
|
|
|
|
|
Sales
(thousand tons):
|
|
|
|
|
Ammonia
|
29.4
|
33.6
|
59.3
|
60.9
|
UAN
|
177.2
|
166.1
|
335.5
|
345.4
|
|
|
|
|
|
Product
pricing (plant gate) (dollars per ton) (2):
|
|
|
|
|
Ammonia
|
$
568
|
$
574
|
$
591
|
$
570
|
UAN
|
$
329
|
$
300
|
$
322
|
$
252
|
|
|
|
|
|
On-stream
factors (3):
|
|
|
|
|
Gasification
|
99.2%
|
99.3%
|
96.2%
|
99.6%
|
Ammonia
|
98.0%
|
98.5%
|
94.7%
|
97.6%
|
UAN
|
96.7%
|
97.6%
|
90.1%
|
95.4%
|
|
|
|
|
|
Market
Indicators:
|
|
|
|
|
Ammonia —
Southern Plains (dollars per ton)
|
$
585
|
$
604
|
$
585
|
$
605
|
UAN — Mid
Cornbelt (dollars per ton)
|
$
417
|
$
366
|
$
380
|
$
358
|
_______________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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.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
June
30,
|
Six
Months Ended
June
30,
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
(in
millions, except per share data)
|
|
Reconciliation of Net Income to Adjusted Net
Income:
|
|
|
|
|
|
Net Income
attributable to CVR Energy stockholders
|
$
154.7
|
$
124.9
|
$
129.5
|
$
170.7
|
|
Adjustments (all net of taxes):
|
|
|
|
|
|
FIFO impact (favorable) unfavorable
|
63.9
|
2.5
|
57.6
|
(12.9)
|
|
Share-based compensation
|
10.8
|
1.3
|
13.3
|
15.0
|
|
Loss on extinguishment of debt
|
—
|
0.1
|
—
|
1.3
|
|
Major scheduled turnaround expense
|
1.5
|
0.6
|
14.2
|
2.5
|
|
Loss on disposition of fixed assets
|
—
|
0.9
|
—
|
0.9
|
|
Unrealized (gain) loss on derivatives
|
(28.4)
|
(3.9)
|
49.3
|
(1.9)
|
|
Expenses associated with proxy matters
|
17.8
|
—
|
26.8
|
—
|
|
Expenses associated with the acquisition of
Gary-Williams (1)
|
2.8
|
—
|
5.0
|
—
|
|
Adjusted net income
|
$ 223.1
|
$ 126.4
|
$ 295.7
|
$ 175.6
|
|
|
|
|
|
|
|
Adjusted net income per diluted share
|
$
2.52
|
$
1.44
|
$
3.34
|
$
2.00
|
|
_______________
(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 performance but should be utilized
as a supplemental measure of performance in evaluating our
business. Management believes that adjusted EBITDA by operating
segment provides relevant and useful information that enables
investors to better understand and evaluate our ongoing operating
results and allows for greater transparency in the reviewing of our
overall financial, operational and economic performance. Below is a
reconciliation of operating income to adjusted EBITDA for the
petroleum and nitrogen fertilizer segments for the three and six
months ended June 30, 2012 and
2011:
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
(in
millions)
|
|
Petroleum:
|
|
|
|
|
|
Petroleum
operating income
|
$
248.9
|
$
183.5
|
$
383.8
|
$
289.2
|
|
FIFO impacts (favorable)
unfavorable
|
105.4
|
4.1
|
95.0
|
(21.3)
|
|
Share-based
compensation
|
5.4
|
0.5
|
6.4
|
7.1
|
|
Major scheduled turnaround
expenses
|
2.5
|
1.1
|
23.5
|
4.3
|
|
Loss on disposition of fixed
assets
|
—
|
1.5
|
—
|
1.5
|
|
Realized gain (loss) on
derivatives, net
|
(8.1)
|
0.5
|
(27.2)
|
(18.4)
|
|
Depreciation and
amortization
|
26.6
|
17.0
|
52.9
|
33.9
|
|
Other income
|
0.7
|
0.2
|
0.8
|
0.3
|
|
Adjusted
Petroleum EBITDA
|
$ 381.4
|
$ 208.4
|
$ 535.2
|
$ 296.6
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
(in
millions)
|
|
Nitrogen Fertilizer:
|
|
|
|
|
|
Nitrogen
Fertilizer operating income
|
$
36.1
|
$
39.3
|
$
67.5
|
$
56.1
|
|
Share-based
compensation
|
2.8
|
0.9
|
4.0
|
5.5
|
|
Depreciation and
amortization
|
5.2
|
4.7
|
10.6
|
9.3
|
|
Other income, net
|
—
|
0.1
|
—
|
—
|
|
Adjusted
Nitrogen Fertilizer EBITDA
|
$ 44.1
|
$ 45.0
|
$ 82.1
|
$ 70.9
|
|
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 June 30, 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)
|
Third
Quarter 2012
|
4,950,000
|
$
23.62
|
Fourth
Quarter 2012
|
3,075,000
|
20.54
|
|
|
|
First
Quarter 2013
|
2,100,000
|
24.31
|
Second
Quarter 2013
|
1,125,000
|
24.85
|
Third
Quarter 2013
|
1,125,000
|
23.86
|
Fourth
Quarter 2013
|
1,125,000
|
22.51
|
|
|
|
Total
|
13,500,000
|
$ 23.06
|
____________________
(1)
|
Weighted-average price of all positions for period
indicated.
|
SOURCE CVR Energy, Inc.