SUGAR LAND, Texas, Nov. 5, 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 record net income in the 2012 third
quarter of $208.9 million, or
$2.41 per fully diluted share, on net
sales of $2,409.6 million, compared
to third quarter 2011 net income of $109.3
million, or $1.25 per fully
diluted share, on net sales of $1,352.0
million.
(Logo: http://photos.prnewswire.com/prnh/20071203/CVRLOGO)
Third quarter 2012 adjusted net income, a non-GAAP financial
measure, was $260.2 million, or
$3.00 per diluted share, compared to
$137.4 million, or $1.57 per diluted share, for the third quarter of
2011. Major items impacting the 2012 third quarter adjusted net
income, all net of taxes, were a favorable impact from first-in,
first-out (FIFO) accounting of $30.9
million and an unrealized loss on derivatives of
$70.1 million.
Year-to-date, the company reported net income of $338.4 million, or $3.86 per diluted share, on net sales of
$6,686.5 million, compared to net
income of $279.9 million, or
$3.19 per diluted share, on net sales
of $3,966.9 million for the same
period in 2011. Operating results for the nine month period of 2012
were impacted by an unrealized loss on derivatives of $119.4 million; an unfavorable impact from FIFO
accounting of $32.9 million; major
turnaround expenses of $21.1 million;
and expenses associated with proxy matters of $26.8 million, all net of taxes.
"Strong operating performance from our refineries in the third
quarter allowed us to take advantage of wide Group 3 crack spreads
driven by favorable differentials between Brent and WTI crudes and
local market conditions," said Jack
Lipinski, CVR Energy's chief executive officer. "This
quarter CVR Energy posted its best-ever net income for any quarter
since the company went public in October
2007. Our petroleum segment also set new records with third
quarter operating income of $507.5
million and a new crude gathering milestone of an average
47,513 barrels gathered during the quarter.
"Our nitrogen fertilizer segment continues to be supported by
strong operating performance and solid industry fundamentals, as
well," he said. "CVR Partners recently announced a third
quarter cash distribution of 49.6
cents per common unit."
Petroleum Business
The petroleum business,
which includes the Coffeyville and
Wynnewood refineries, reported
record third quarter 2012 operating income of $507.5 million, and adjusted EBITDA, a non-GAAP
financial measure, of $444.2 million,
on net sales of $2,337.3 million,
compared to operating income in the same quarter a year earlier of
$179.8 million, and adjusted EBITDA
of $232.0 million, on net sales of
$1,284.4 million.
Third quarter 2012 throughput of crude oil and all other
feedstocks and blendstocks totaled 203,038 barrels per day (bpd),
compared to 116,091 bpd for the same period in 2011. Crude oil
throughput for the third quarter 2012 averaged 192,563 bpd per day
compared with 112,885 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 $33.44 in the third quarter 2012 compared to
$27.55 during the same period in
2011. Gross profit per crude oil throughput barrel was $29.75 in the third quarter 2012, as compared to
$18.14 during the same period in
2011.
Direct operating expenses, including major scheduled turnaround
expenses, per barrel sold, exclusive of depreciation and
amortization, for the third quarter 2012 was $4.81, down from $5.19 in the third quarter 2011.
Coffeyville Refinery
The Coffeyville refinery reported third quarter
2012 operating income of $353.6
million, compared to $180.3
million of operating income for the third quarter of 2011.
Third quarter 2012 crude oil throughput totaled 124,643 bpd,
compared to 112,885 bpd in the third quarter of 2011. Refining
margin adjusted for FIFO impact per crude oil throughput barrel for
the third quarter of 2012 was $33.56
compared to $27.54 for the same
period in 2011. Gross profit per crude oil throughput barrel was
$31.76 in the third quarter of 2012,
compared to $18.19 for the 2011 third
quarter. Direct operating expenses, including major scheduled
turnaround expenses, per barrel sold for the 2012 third quarter was
$3.83, compared to $5.19 for the 2011 third quarter.
Wynnewood Refinery
CVR Energy acquired the
Wynnewood refinery in December 2011. The 2012 third quarter represents
the refinery's third full quarter as a CVR Energy
subsidiary.
For the third quarter of 2012, the refinery's crude oil
throughput totaled 67,920 bpd. The refinery's third quarter 2012
operating income was $154.4 million.
Refining margin adjusted for FIFO impact per crude oil throughput
barrel for the third quarter of 2012 was $33.07. Direct operating expenses, including
major scheduled turnaround expenses, per barrel sold for the third
quarter was $6.54.
Nitrogen Fertilizers Business
The fertilizer
business operated by CVR Partners, LP reported third quarter 2012
operating income of $32.3 million,
and adjusted EBITDA, a non-GAAP financial measure, of $39.0 million, on net sales of $75.0 million, compared to operating income of
$37.5 million, and adjusted EBITDA of
$43.3 million, on net sales of
$77.2 million for the 2011 third
quarter.
CVR Partners produced 104,200 tons of ammonia during the third
quarter of 2012, of which 29,400 net tons were available for sale
while the rest was upgraded to 181,900 tons of more profitable urea
ammonium nitrate (UAN). In the 2011 third quarter, the plant
produced 102,700 tons of ammonia with 25,900 net tons available for
sale with the remainder upgraded to 185,800 tons of UAN.
Third quarter 2012 average realized plant gate prices for
ammonia and UAN were $578 per ton and
$290 per ton, respectively, as
compared to $568 per ton and
$294 per ton, respectively, for the
same period in 2011.
Cash and Debt
Consolidated cash and cash
equivalents, which included $180.3
million for CVR Partners, increased to $988.2 million at the end of the 2012 third
quarter, compared to $692.6 million
at the end of the second quarter of 2012, primarily due to
increased cash flows in the petroleum business. Consolidated
long-term debt at the end of the 2012 third quarter, which included
$125.0 million for CVR Partners,
remained nearly unchanged at $850.9
million.
CVR Energy Third Quarter 2012 Earnings Conference Call
Information
CVR Energy previously announced that it will
host its third quarter 2012 Earnings Conference Call for analysts
and investors on Tuesday, Nov. 6, at
2 p.m. Eastern.
The call will be broadcast live over the Internet at
http://www.videonewswire.com/event.asp?id=89676. For investors or
analysts who want to participate during the call, the dial-in
number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived
and available for 28 days at
http://www.videonewswire.com/event.asp?id=89676. A repeat of the
conference call can be accessed by dialing (877) 660-6853,
conference ID 400979.
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,
Missouri, Oklahoma, 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
September 30,
|
Change
from 2011
|
|
2012
|
2011
|
Change
|
Percent
|
|
(in
millions, except per share data)
|
Consolidated Statement of Operations
Data:
|
|
|
|
|
Net
sales
|
$
2,409.6
|
$
1,352.0
|
$
1,057.6
|
78.2%
|
Cost of
product sold
|
1,702.5
|
1,026.0
|
676.5
|
65.9
|
Direct
operating expenses
|
109.9
|
74.6
|
35.3
|
47.3
|
Insurance
recovery — business interruption
|
—
|
(0.5)
|
0.5
|
(100.0)
|
Selling,
general and administrative expenses
|
30.4
|
17.7
|
12.7
|
71.8
|
Depreciation and amortization
|
33.1
|
22.0
|
11.1
|
50.5
|
Operating income
|
533.7
|
212.2
|
321.5
|
151.5
|
Interest
expense and other financing costs
|
(18.9)
|
(13.8)
|
(5.1)
|
37.0
|
Gain
(loss) on derivatives, net
|
|
|
|
|
Realized
|
(53.2)
|
0.1
|
(53.3)
|
(53,300.0)
|
Unrealized
|
(115.7)
|
(10.0)
|
(105.7)
|
1,057.0
|
Other
income, net
|
0.2
|
0.4
|
(0.2)
|
(50.0)
|
Income before income tax expense
|
346.1
|
188.9
|
157.2
|
83.2
|
Income tax
expense
|
127.6
|
68.6
|
59.0
|
86.0
|
Net income
|
218.5
|
120.3
|
98.2
|
81.6
|
Net income attributable to noncontrolling
interest
|
9.6
|
11.0
|
(1.4)
|
(12.7)
|
Net income attributable to CVR Energy
stockholders
|
$ 208.9
|
$ 109.3
|
$ 99.6
|
91.1%
|
_______________
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share
|
$
2.41
|
$
1.26
|
$
1.15
|
91.3%
|
Diluted
earnings per share
|
$
2.41
|
$
1.25
|
$
1.16
|
92.8%
|
|
|
|
|
|
Adjusted
net income
|
$
260.2
|
$
137.4
|
$
122.8
|
89.4%
|
Adjusted
net income, per diluted share
|
$
3.00
|
$
1.57
|
$
1.43
|
91.1%
|
|
|
|
|
|
Weighted-average common shares
outstanding:
|
|
|
|
|
Basic
|
86,831,050
|
86,549,846
|
281,204
|
0.3%
|
Diluted
|
86,831,050
|
87,743,600
|
(912,550)
|
(1.0)%
|
|
|
|
|
|
|
|
|
|
Nine
Months Ended September 30,
|
Change
from 2011
|
|
|
2012
|
2011
|
Change
|
Percent
|
|
|
(in
millions, except per share data)
|
|
Consolidated Statement of Operations
Data:
|
|
|
|
|
|
Net
sales
|
$
6,686.5
|
$
3,966.9
|
$
2,719.6
|
68.6%
|
|
Cost of
product sold
|
5,211.9
|
3,086.2
|
2,125.7
|
68.9
|
|
Direct
operating expenses
|
319.5
|
209.3
|
110.2
|
52.7
|
|
Insurance
recovery — business interruption
|
—
|
(3.4)
|
3.4
|
(100.0)
|
|
Selling,
general and administrative expenses
|
147.7
|
69.0
|
78.7
|
114.1
|
|
Depreciation and amortization
|
97.4
|
66.1
|
31.3
|
47.4
|
|
Operating income
|
910.0
|
539.7
|
370.3
|
68.6
|
|
Interest
expense and other financing costs
|
(57.1)
|
(41.2)
|
(15.9)
|
38.6
|
|
Gain
(loss) on derivatives, net
|
|
|
|
|
|
Realized
|
(80.4)
|
(18.3)
|
(62.1)
|
339.3
|
|
Unrealized
|
(197.0)
|
(6.8)
|
(190.2)
|
2,797.1
|
|
Loss on
extinguishment of debt
|
—
|
(2.1)
|
2.1
|
(100.0)
|
|
Other
income, net
|
1.3
|
1.4
|
(0.1)
|
(7.1)
|
|
Income before income tax expense
|
576.8
|
472.7
|
104.1
|
22.0
|
|
Income tax
expense
|
209.0
|
172.5
|
36.5
|
21.2
|
|
Net income
|
367.8
|
300.2
|
67.6
|
22.5
|
|
Net income attributable to noncontrolling
interest
|
29.4
|
20.3
|
9.1
|
44.8
|
|
Net income attributable to CVR Energy
stockholders
|
$ 338.4
|
$ 279.9
|
$
58.5
|
20.9%
|
|
|
|
|
|
|
|
_____________
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share
|
$
3.90
|
$
3.24
|
$
0.66
|
20.4%
|
|
Diluted
earnings per share
|
$
3.86
|
$
3.19
|
$
0.67
|
21.0%
|
|
|
|
|
|
|
|
Adjusted
net income
|
$
562.1
|
$
310.9
|
$
251.2
|
80.8%
|
|
Adjusted
net income, per diluted share
|
$
6.42
|
$
3.54
|
$
2.88
|
81.4%
|
|
|
|
|
|
|
|
Weighted-average common shares
outstanding:
|
|
|
|
|
|
Basic
|
86,820,181
|
86,462,668
|
357,513
|
0.4%
|
|
Diluted
|
87,580,588
|
87,772,169
|
(191,581)
|
(0.2)%
|
|
|
|
|
|
|
|
|
|
|
|
_______________
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
September 30,
|
|
As of
December 31,
|
|
2012
|
|
2011
|
|
|
|
(audited)
|
|
(in
millions)
|
Balance
Sheet Data:
|
|
|
|
|
Cash and
cash equivalents
|
$
988.2
|
|
$
388.3
|
|
Working
capital
|
1,137.7
|
|
769.2
|
|
Total
assets
|
3,652.4
|
|
3,119.3
|
|
Long-term
debt
|
850.9
|
|
853.9
|
|
Total CVR
stockholders' equity
|
1,485.1
|
|
1,151.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
|
(in
millions)
|
|
Cash
Flow Data
|
|
|
|
|
|
Net cash
flow provided by (used in):
|
|
|
|
|
|
Operating activities
|
$347.9
|
$
183.3
|
$
783.8
|
$
345.9
|
|
Investing activities
|
(38.8)
|
(23.1)
|
(143.6)
|
(43.8)
|
|
Financing activities
|
(13.5)
|
(9.7)
|
(40.3)
|
396.3
|
|
Net cash flow
|
$ 295.6
|
$ 150.5
|
$ 599.9
|
$ 698.4
|
|
|
|
|
|
|
|
|
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 September 30, 2012 are included in CVR Partners'
press release dated November 5,
2012.
|
Petroleum
|
Nitrogen Fertilizer
(CVR
Partners)
|
Corporate
and
Other
|
Consolidated
|
|
(in
millions)
|
Three
months ended September 30, 2012
|
|
|
|
|
Net
sales
|
$
2,337.3
|
$
75.0
|
$
(2.7)
|
$
2,409.6
|
Cost of
product sold
|
1,694.0
|
11.3
|
(2.8)
|
1,702.5
|
Direct
operating expenses (1)
|
77.7
|
20.9
|
—
|
98.6
|
Major
scheduled turnaround expense
|
11.1
|
0.2
|
—
|
11.3
|
Selling,
general & administrative
|
19.5
|
5.1
|
5.8
|
30.4
|
Depreciation and amortization
|
27.5
|
5.2
|
0.4
|
33.1
|
Operating income (loss)
|
$
507.5
|
$
32.3
|
$
(6.1)
|
$
533.7
|
|
|
|
|
|
Capital
expenditures
|
$
20.2
|
$
18.2
|
$
1.5
|
$
39.9
|
|
|
|
|
|
Nine
months ended September 30, 2012
|
|
|
|
|
Net
sales
|
$
6,465.3
|
$
234.7
|
$
(13.5)
|
$
6,686.5
|
Cost of
product sold
|
5,190.8
|
34.6
|
(13.5)
|
5,211.9
|
Direct
operating expenses (1)
|
218.5
|
66.2
|
—
|
284.7
|
Major
scheduled turnaround expense
|
34.6
|
0.2
|
—
|
34.8
|
Selling,
general & administrative
|
49.8
|
18.1
|
79.8
|
147.7
|
Depreciation and amortization
|
80.4
|
15.8
|
1.2
|
97.4
|
Operating income (loss)
|
$
891.2
|
$
99.8
|
$
(81.0)
|
$
910.0
|
|
|
|
|
|
Capital
expenditures
|
$
82.6
|
$
57.4
|
$
5.1
|
$
145.1
|
|
|
|
|
|
|
Petroleum
|
Nitrogen Fertilizer
(CVR
Partners)
|
Corporate
and
Other
|
Consolidated
|
|
(in
millions)
|
Three
months ended September 30, 2011
|
|
|
|
|
Net
sales
|
$
1,284.4
|
$
77.2
|
$
(9.6)
|
$
1,352.0
|
Cost of
product sold
|
1,024.5
|
10.9
|
(9.4)
|
1,026.0
|
Direct
operating expenses (1)
|
46.5
|
20.1
|
—
|
66.6
|
Major
scheduled turnaround expense
|
8.0
|
—
|
—
|
8.0
|
Insurance
recovery – business interruption
|
—
|
(0.5)
|
—
|
(0.5)
|
Selling,
general & administrative
|
8.6
|
4.5
|
4.6
|
17.7
|
Depreciation and amortization
|
17.0
|
4.7
|
0.3
|
22.0
|
Operating income (loss)
|
$
179.8
|
$
37.5
|
$
(5.1)
|
$
212.2
|
|
|
|
|
|
Capital
expenditures
|
$
20.2
|
$
4.5
|
$
1.0
|
$
25.7
|
|
|
|
|
|
Nine
months ended September 30, 2011
|
|
|
|
|
Net
sales
|
$
3,772.3
|
$
215.3
|
$
(20.7)
|
$
3,966.9
|
Cost of
product sold
|
3,077.5
|
28.2
|
(19.5)
|
3,086.2
|
Direct
operating expenses (1)
|
131.8
|
65.4
|
(0.1)
|
197.1
|
Major
scheduled turnaround expense
|
12.2
|
—
|
—
|
12.2
|
Insurance
recovery – business interruption
|
—
|
(3.4)
|
—
|
(3.4)
|
Selling,
general & administrative
|
30.9
|
17.6
|
20.5
|
69.0
|
Depreciation and amortization
|
50.9
|
13.9
|
1.3
|
66.1
|
Operating income (loss)
|
$
469.0
|
$
93.6
|
$
(22.9)
|
$
539.7
|
|
|
|
|
|
Capital
expenditures
|
$
33.4
|
$
10.5
|
$
2.7
|
$
46.6
|
____________________
(1) Excluding turnaround expenses.
|
Petroleum
|
Nitrogen Fertilizer
(CVR
Partners)
|
Corporate
and
Other
|
Consolidated
|
|
(in
millions)
|
September 30, 2012
|
|
|
|
|
Cash and
cash equivalents (1)
|
$
—
|
$
180.3
|
$
807.9
|
$
988.2
|
Total
assets
|
2,189.0
|
653.2
|
810.2
|
3,652.4
|
Long-term
debt (1)
|
—
|
125.0
|
725.9
|
850.9
|
|
|
|
|
|
|
|
|
|
|
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
September 30,
|
Nine
Months Ended
September 30,
|
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
|
(in
millions, except operating statistics)
|
|
Petroleum Segment Summary Financial
Results:
|
|
|
|
|
|
Net
sales
|
$
2,337.3
|
$
1,284.4
|
$
6,465.3
|
$
3,772.3
|
|
Cost of
product sold
|
1,694.0
|
1,024.5
|
5,190.8
|
3,077.5
|
|
Refining margin*
|
643.3
|
259.9
|
1,274.5
|
694.8
|
|
Direct
operating expenses
|
77.7
|
46.5
|
218.5
|
131.8
|
|
Major
scheduled turnaround expense
|
11.1
|
8.0
|
34.6
|
12.2
|
|
Depreciation and amortization
|
27.5
|
17.0
|
80.4
|
50.9
|
|
Gross profit
|
527.0
|
188.4
|
941.0
|
499.9
|
|
Selling,
general and administrative expenses
|
19.5
|
8.6
|
49.8
|
30.9
|
|
Operating income
|
$
507.5
|
$
179.8
|
$
891.2
|
$
469.0
|
|
|
|
|
|
|
|
Refining
margin adjusted for FIFO impact*
|
$
592.4
|
$
286.1
|
$
1,328.8
|
$
696.3
|
|
|
|
|
|
|
|
Adjusted
Petroleum EBITDA*
|
$
444.2
|
$
232.0
|
$
989.7
|
$
525.2
|
|
|
|
|
|
|
|
Petroleum Segment Key Operating
Statistics:
|
|
|
|
|
|
Per crude
oil throughput barrel:
|
|
|
|
|
|
Refining margin*
|
$
36.31
|
$
25.03
|
$
26.34
|
$
23.77
|
|
FIFO impact (favorable) unfavorable
|
(2.87)
|
2.52
|
1.12
|
0.05
|
|
Refining margin adjusted for FIFO
impact*
|
33.44
|
27.55
|
27.46
|
23.82
|
|
Gross profit
|
29.75
|
18.14
|
19.45
|
17.10
|
|
Direct operating expenses and major scheduled
turnaround expenses
|
5.02
|
5.25
|
5.23
|
4.93
|
|
Direct
operating expenses and major scheduled turnaround expenses per
barrel sold
|
$
4.81
|
$
5.19
|
$
4.75
|
$
4.71
|
|
Barrels
sold (barrels per day)
|
200,683
|
114,061
|
194,638
|
111,939
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
September 30,
|
Nine
Months Ended
September 30,
|
|
2012
|
2011
|
2012
|
2011
|
Petroleum Segment Summary Refining Throughput and
Production Data:
|
|
|
|
|
|
|
|
|
(barrels per day)
|
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
|
Sweet
|
149,768
|
73.8%
|
91,498
|
78.8%
|
136,463
|
73.4%
|
85,401
|
75.8%
|
Light/medium sour
|
21,188
|
10.4%
|
994
|
0.8%
|
21,708
|
11.7%
|
598
|
0.5%
|
Heavy sour
|
21,607
|
10.6%
|
20,393
|
17.6%
|
18,418
|
9.9%
|
21,071
|
18.7%
|
Total crude oil throughput
|
192,563
|
94.8%
|
112,885
|
97.2%
|
176,589
|
95.0%
|
107,070
|
95.0%
|
All other feedstocks and blendstocks
|
10,475
|
5.2%
|
3,206
|
2.8%
|
9,448
|
5.0%
|
5,671
|
5.0%
|
Total throughput
|
203,038
|
100.0%
|
116,091
|
100.0%
|
186,037
|
100.0%
|
112,741
|
100.0%
|
|
|
|
|
|
|
|
|
|
Production:
|
|
|
|
|
|
|
|
|
Gasoline
|
98,016
|
48.5%
|
49,886
|
42.7%
|
92,114
|
49.7%
|
50,998
|
45.0%
|
Distillate
|
82,224
|
40.7%
|
50,189
|
43.0%
|
75,568
|
40.8%
|
47,368
|
41.8%
|
Other (excluding internally produced fuel)
|
21,928
|
10.8%
|
16,770
|
14.3%
|
17,588
|
9.5%
|
15,038
|
13.2%
|
Total refining production (excluding internally
produced fuel)
|
202,168
|
100.0%
|
116,845
|
100.0%
|
185,270
|
100.0%
|
113,404
|
100.0%
|
|
|
|
|
|
|
|
|
|
Product
price (dollars per gallon):
|
|
|
|
|
|
|
|
|
Gasoline
|
$
3.03
|
|
$
2.95
|
|
$
2.93
|
|
$
2.89
|
|
Distillate
|
3.15
|
|
3.07
|
|
3.07
|
|
3.04
|
|
|
Three
Months Ended
September 30,
|
Nine
Months Ended
September 30,
|
|
2012
|
2011
|
2012
|
2011
|
Market
Indicators (dollars per barrel):
|
|
|
|
|
|
West Texas
Intermediate (WTI) NYMEX
|
$
92.20
|
$
89.54
|
$
96.16
|
$
95.47
|
Crude Oil
Differentials:
|
|
|
|
|
WTI less WTS (light/medium sour)
|
3.34
|
0.82
|
4.10
|
2.46
|
WTI less WCS (heavy sour)
|
15.53
|
14.09
|
21.06
|
17.86
|
NYMEX
Crack Spreads:
|
|
|
|
|
Gasoline
|
31.70
|
32.01
|
29.21
|
26.04
|
Heating Oil
|
33.86
|
35.82
|
30.54
|
28.51
|
NYMEX 2-1-1 Crack Spread
|
32.78
|
33.92
|
29.87
|
27.27
|
PADD II
Group 3 Basis:
|
|
|
|
|
Gasoline
|
2.22
|
(0.03)
|
(2.58)
|
(1.21)
|
Ultra Low Sulfur Diesel
|
2.53
|
2.54
|
2.04
|
2.32
|
PADD II
Group 3 Product Crack:
|
|
|
|
|
Gasoline
|
33.92
|
31.98
|
26.63
|
24.82
|
Ultra Low Sulfur Diesel
|
39.38
|
38.36
|
32.58
|
30.82
|
PADD II
Group 3 2-1-1
|
36.65
|
35.17
|
29.60
|
27.82
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
September 30,
|
Nine
Months Ended
September 30,
|
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
|
(in
millions, except operating statistics)
|
|
Coffeyville Refinery Financial
Results:
|
|
|
|
|
|
Net
sales
|
$
1,564.3
|
$
1,284.4
|
$
4,084.3
|
$
3,772.1
|
|
Cost of
product sold
|
1,135.2
|
1,024.6
|
3,268.2
|
3,077.7
|
|
Refining margin*
|
429.1
|
259.8
|
816.1
|
694.4
|
|
Direct
operating expenses
|
47.3
|
46.5
|
134.7
|
131.7
|
|
Turnaround
expenses
|
0.2
|
8.0
|
21.2
|
12.2
|
|
Depreciation and amortization
|
17.4
|
16.4
|
52.1
|
49.0
|
|
Gross profit
|
364.2
|
188.9
|
608.1
|
501.5
|
|
Selling,
general and administrative expenses
|
10.6
|
8.6
|
34.8
|
29.4
|
|
Operating income
|
$ 353.6
|
$ 180.3
|
$ 573.3
|
$ 472.1
|
|
|
|
|
|
|
|
Refining
margin adjusted for FIFO impact*
|
$
384.8
|
$
286.1
|
$
857.8
|
$
696.3
|
|
|
|
|
|
|
|
Coffeyville Refinery Key Operating
Statistics:
|
|
|
|
|
|
Per crude
oil throughput barrel:
|
|
|
|
|
|
Refining margin*
|
$
37.42
|
$
25.02
|
$
26.71
|
$
23.76
|
|
FIFO impact (favorable) unfavorable
|
(3.86)
|
2.52
|
1.37
|
0.05
|
|
Refining margin adjusted for FIFO
impact*
|
33.56
|
27.54
|
28.08
|
23.81
|
|
Gross profit
|
31.76
|
18.19
|
19.90
|
17.16
|
|
Direct operating expenses and major scheduled
turnaround expenses
|
4.14
|
5.25
|
5.10
|
4.92
|
|
Direct
operating expenses and major scheduled turnaround expenses per
barrel sold
|
$
3.83
|
$
5.19
|
$
4.65
|
$
4.71
|
|
Barrels
sold (barrels per day)
|
134,873
|
114,061
|
122,482
|
111,939
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
September 30,
|
Nine
Months Ended
September 30,
|
|
2012
|
2011
|
2012
|
2011
|
Coffeyville Refinery Throughput and Production
Data:
|
|
|
|
|
|
|
|
|
(barrels per day)
|
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
|
Sweet
|
100,427
|
76.0%
|
91,498
|
78.8%
|
90,871
|
77.0%
|
85,401
|
75.8%
|
Light/medium sour
|
2,609
|
2.0%
|
994
|
0.8%
|
2,216
|
1.9%
|
598
|
0.5%
|
Heavy sour
|
21,607
|
16.4%
|
20,393
|
17.6%
|
18,418
|
15.6%
|
21,071
|
18.7%
|
Total crude oil throughput
|
124,643
|
94.4%
|
112,885
|
97.2%
|
111,505
|
94.5%
|
107,070
|
95.0%
|
All other feedstocks and blendstocks
|
7,465
|
5.6%
|
3,206
|
2.8%
|
6,448
|
5.5%
|
5,671
|
5.0%
|
Total throughput
|
132,108
|
100.0%
|
116,091
|
100.0%
|
117,953
|
100.0%
|
112,741
|
100.0%
|
|
|
|
|
|
|
|
|
|
Production:
|
|
|
|
|
|
|
|
|
|
Gasoline
|
63,991
|
47.8%
|
49,886
|
42.7%
|
58,889
|
49.2%
|
50,998
|
45.0%
|
|
Distillate
|
56,230
|
42.0%
|
50,189
|
43.0%
|
50,766
|
42.4%
|
47,368
|
41.8%
|
|
Other
(excluding internally produced
fuel)
|
13,756
|
10.2%
|
16,770
|
14.3%
|
10,014
|
8.4%
|
15,038
|
13.2%
|
Total refining production (excluding
internally produced fuel)
|
133,977
|
100.0%
|
116,845
|
100.0%
|
119,669
|
100.0%
|
113,404
|
100.0%
|
|
|
|
|
|
|
|
|
|
Product
price (dollars per gallon):
|
|
|
|
|
|
|
|
|
Gasoline
|
$
3.03
|
|
$
2.95
|
|
$
2.94
|
|
$
2.89
|
|
Distillate
|
3.15
|
|
3.07
|
|
3.06
|
|
3.04
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
September 30, 2012
|
Nine
Months Ended
September 30, 2012
|
|
(in
millions, except operating statistics)
|
Wynnewood Refinery Financial
Results:
|
|
|
Net
sales
|
$
772.8
|
$
2,380.6
|
Cost of
product sold
|
559.5
|
1,924.5
|
Refining margin*
|
213.3
|
456.1
|
Direct
operating expenses
|
30.1
|
83.6
|
Turnaround
expenses
|
11.0
|
13.4
|
Depreciation and amortization
|
9.0
|
25.7
|
Gross profit
|
163.2
|
333.4
|
Selling,
general and administrative expenses
|
8.8
|
14.3
|
Operating income
|
$
154.4
|
$
319.1
|
|
|
|
Refining
margin adjusted for FIFO impact*
|
$
206.7
|
$
468.7
|
|
|
|
Wynnewood Refinery Key Operating
Statistics:
|
|
|
Per crude
oil throughput barrel:
|
|
|
Refining margin*
|
$
34.13
|
$
25.58
|
FIFO impact (favorable) unfavorable
|
(1.06)
|
0.70
|
Refining margin adjusted for FIFO
impact*
|
33.07
|
26.28
|
Gross profit
|
26.12
|
18.70
|
Direct operating expenses and major scheduled
turnaround expenses
|
6.58
|
5.44
|
Direct
operating expenses and major scheduled turnaround expenses per
barrel sold
|
$
6.54
|
$
4.91
|
Barrels
sold (barrels per day)
|
68,311
|
72,087
|
|
Three
Months Ended
September 30, 2012
|
Nine
Months Ended
September 30, 2012
|
|
|
%
|
|
%
|
Wynnewood Refinery Throughput and Production
Data:
|
|
|
|
|
(barrels per day)
|
|
|
|
|
Throughput:
|
|
|
|
|
Sweet
|
49,341
|
69.6%
|
45,592
|
67.0%
|
Light/medium sour
|
18,579
|
26.2%
|
19,492
|
28.6%
|
Heavy sour
|
—
|
—%
|
—
|
—%
|
Total crude oil throughput
|
67,920
|
95.8%
|
65,084
|
95.6%
|
All other
feedstocks and blendstocks
|
3,010
|
4.2%
|
3,000
|
4.4%
|
Total throughput
|
70,930
|
100.0%
|
68,084
|
100.0%
|
|
|
|
|
|
Production:
|
|
|
|
|
Gasoline
|
34,025
|
49.9%
|
33,225
|
50.7%
|
Distillate
|
25,994
|
38.1%
|
24,802
|
37.8%
|
Other (excluding internally produced fuel)
|
8,172
|
12.0%
|
7,574
|
11.5%
|
Total refining production (excluding internally
produced fuel)
|
68,191
|
100.0%
|
65,601
|
100.0%
|
|
|
|
|
|
Product
price (dollars per gallon):
|
|
|
|
|
Gasoline
|
$
3.02
|
|
$
2.93
|
|
Distillate
|
3.13
|
|
3.08
|
|
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 September 30, 2012 are
included in CVR Partners' press release dated November 5, 2012.
|
|
Three
Months Ended
September 30,
|
Nine
Months Ended
September 30,
|
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
|
(in
millions, except as noted)
|
|
Nitrogen Fertilizer Segment Financial
Results:
|
|
|
|
|
|
Net
sales
|
$
75.0
|
$
77.2
|
$
234.7
|
$
215.3
|
|
Cost of
product sold
|
11.3
|
10.9
|
34.6
|
28.2
|
|
Direct
operating expenses
|
21.1
|
20.1
|
66.4
|
65.4
|
|
Insurance
recovery — business interruption
|
—
|
(0.5)
|
—
|
(3.4)
|
|
Selling,
general and administrative expenses
|
5.1
|
4.5
|
18.1
|
17.6
|
|
Depreciation and amortization
|
5.2
|
4.7
|
15.8
|
13.9
|
|
|
|
|
|
|
|
Operating income
|
$ 32.3
|
$ 37.5
|
$ 99.8
|
$ 93.6
|
|
|
|
|
|
|
|
Adjusted
Nitrogen Fertilizer EBITDA*
|
$
39.0
|
$
43.3
|
$
121.1
|
$
114.0
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
September 30,
|
Nine
Months Ended
September 30,
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
(in
millions, except as noted)
|
|
Nitrogen Fertilizer Segment Key Operating
Statistics:
|
|
|
|
|
|
Production
(thousand tons):
|
|
|
|
|
|
Ammonia (gross produced) (1)
|
104.2
|
102.7
|
302.3
|
310.4
|
|
Ammonia (net available for sale) (1)
|
29.4
|
25.9
|
89.3
|
89.3
|
|
UAN
|
181.9
|
185.8
|
516.5
|
535.8
|
|
|
|
|
|
|
|
Petroleum
coke consumed (thousand tons)
|
126.9
|
131.2
|
377.7
|
391.0
|
|
Petroleum
coke (cost per ton)
|
$
30
|
$
43
|
$
34
|
$
30
|
|
|
|
|
|
|
|
Sales
(thousand tons):
|
|
|
|
|
|
Ammonia
|
30.2
|
22.6
|
89.5
|
83.5
|
|
UAN
|
175.1
|
179.2
|
510.5
|
524.7
|
|
|
|
|
|
|
|
Product
pricing (plant gate) (dollars per ton) (2):
|
|
|
|
|
|
Ammonia
|
$
578
|
$
568
|
$
586
|
$
569
|
|
UAN
|
$
290
|
$
294
|
$
311
|
$
266
|
|
|
|
|
|
|
|
On-stream
factors (3):
|
|
|
|
|
|
Gasification
|
99.1%
|
99.2%
|
97.2%
|
99.5%
|
|
Ammonia
|
98.4%
|
98.6%
|
96.0%
|
98.0%
|
|
UAN
|
96.9%
|
97.0%
|
92.4%
|
95.9%
|
|
|
|
|
|
|
|
Market
Indicators:
|
|
|
|
|
Ammonia —
Southern Plains (dollars per ton)
|
$
677
|
$
619
|
$
616
|
$
609
|
|
UAN — Mid
Cornbelt (dollars per ton)
|
$
356
|
$
401
|
$
372
|
$
373
|
|
_______________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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
September 30,
|
Nine
Months Ended
September 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
|
$
208.9
|
$
109.3
|
$
338.4
|
$
279.9
|
|
Adjustments (all net of taxes):
|
|
|
|
|
|
FIFO impact (favorable) unfavorable
|
(30.9)
|
15.8
|
32.9
|
0.9
|
|
Share-based compensation
|
4.0
|
1.5
|
17.3
|
16.5
|
|
Loss on extinguishment of debt
|
—
|
—
|
—
|
1.2
|
|
Major scheduled turnaround expense
|
6.9
|
4.8
|
21.1
|
7.4
|
|
Loss on disposition of fixed assets
|
—
|
—
|
—
|
0.9
|
|
Unrealized (gain) loss on derivatives
|
70.1
|
6.0
|
119.4
|
4.1
|
|
Expenses associated with proxy matters
|
—
|
—
|
26.8
|
—
|
|
Expenses associated with the acquisition of
Gary-Williams (1)
|
1.2
|
—
|
6.2
|
—
|
|
Adjusted net income
|
$
260.2
|
$
137.4
|
$
562.1
|
$
310.9
|
|
|
|
|
|
|
|
Adjusted net income per diluted share
|
$
3.00
|
$
1.57
|
$
6.42
|
$
3.54
|
|
_______________
(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 nine
months ended September 30, 2012 and
2011:
|
Three
Months Ended
September 30,
|
Nine
Months Ended
September 30,
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
(in
millions)
|
|
Petroleum:
|
|
|
|
|
|
Petroleum
operating income
|
$
507.5
|
$
179.8
|
$
891.2
|
$
469.0
|
|
FIFO impacts (favorable)
unfavorable
|
(50.9)
|
26.2
|
54.3
|
1.5
|
|
Share-based
compensation
|
2.3
|
0.8
|
8.8
|
8.0
|
|
Major scheduled turnaround
expenses
|
11.1
|
8.0
|
34.6
|
12.2
|
|
Loss on disposition of fixed
assets
|
—
|
—
|
—
|
1.5
|
|
Realized gain (loss) on
derivatives, net
|
(53.3)
|
0.1
|
(80.4)
|
(18.3)
|
|
Depreciation and
amortization
|
27.5
|
17.0
|
80.4
|
50.9
|
|
Other income
|
—
|
0.1
|
0.8
|
0.4
|
|
Adjusted
Petroleum EBITDA
|
$ 444.2
|
$ 232.0
|
$ 989.7
|
$ 525.2
|
|
|
Three
Months Ended
September 30,
|
Nine
Months Ended
September 30,
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
(in
millions)
|
|
Nitrogen Fertilizer:
|
|
|
|
|
|
Nitrogen
Fertilizer operating income
|
$
32.3
|
$
37.5
|
$
99.8
|
$
93.6
|
|
Share-based
compensation
|
1.2
|
0.9
|
5.2
|
6.4
|
|
Depreciation and
amortization
|
5.2
|
4.7
|
15.8
|
13.9
|
|
Major scheduled turnaround
expense
|
0.2
|
—
|
0.2
|
—
|
|
Other income, net
|
0.1
|
0.2
|
0.1
|
0.1
|
|
Adjusted
Nitrogen Fertilizer EBITDA
|
$ 39.0
|
$ 43.3
|
$ 121.1
|
$ 114.0
|
|
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 September 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)
|
Fourth
Quarter 2012
|
5,850,000
|
$
23.50
|
|
|
|
First
Quarter 2013
|
6,375,000
|
24.95
|
Second
Quarter 2013
|
5,400,000
|
26.85
|
Third
Quarter 2013
|
5,175,000
|
25.31
|
Fourth
Quarter 2013
|
3,525,000
|
24.66
|
|
|
|
Total
|
26,325,000
|
$ 25.05
|
____________________
(1) Weighted-average price of all
positions for period indicated.
SOURCE CVR Energy, Inc.