CVR Energy Declares $5.50 Special Dividend And Announces Adoption
of Quarterly Dividend Policy
SUGAR LAND, Texas, Jan. 24, 2013 /PRNewswire/ -- CVR Energy,
Inc. (NYSE: CVI) ("CVR Energy") recently contributed its petroleum
refining and related logistics assets to CVR Refining, LP (NYSE:
CVRR) ("CVR Refining"), a newly-formed master limited partnership,
and successfully completed the initial public offering of CVR
Refining's common units. CVR Energy currently retains an
approximate 84% interest in CVR Refining and the new unitholders
hold the remaining approximate 16%. Pursuant to its
cash distribution policy, CVR Refining will make a distribution of
100% of its available cash each quarter. Estimated cash
distributions for 2013 are approximately $700 million on a full year basis. As a result,
under the current ownership structure, the new unitholders of CVR
Refining would collectively receive approximately $115 million, generating an annualized yield of
approximately 19% (based on the initial public offering price of
the common units), and CVR Energy would receive approximately
$585 million, in each case, for the
year ending December 31, 2013.
Approximately 40% of CVR Refining's forecasted production
is hedged through 2013 at an attractive weighted average crack
spread of over $26 per barrel.
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In addition to its majority ownership in CVR Refining, CVR
Energy owns a majority interest in CVR Partners, LP (NYSE: UAN)
("CVR Partners"), a nitrogen fertilizer master limited partnership.
As a result of forecasted cash flows of approximately $700 million for 2013 from its interests in CVR
Refining and CVR Partners, CVR Energy announced today that its
Board of Directors has adopted a quarterly cash dividend
policy. Subject to declaration by its Board of Directors, CVR
Energy's initial quarterly dividend is expected to be $0.75 per share, or $3.00 per share on an annualized basis, which the
company plans to begin paying in the second quarter of 2013. In
addition, utilizing a portion of the company's cash-on-hand of
approximately $725 million, the Board
of Directors of CVR Energy has declared a special dividend of
$5.50 per share payable on
February 19, 2013, to shareholders of
record at the close of business on February
5, 2013. The total amount of the special dividend payment
will be approximately $480 million
based on the current number of shares outstanding, leaving CVR
Energy with abundant liquidity.
"Our Board's decision to adopt a quarterly dividend policy at
this time underscores our commitment to returning capital to
shareholders and enhancing shareholder value," said CVR Energy
Chairman Carl C. Icahn. "The policy
reflects the strength of our balance sheet, our fundamental ability
to generate free cash flow and our confidence in the future
prospects of our business."
Forward-Looking Statements
This news release contains
forward-looking statements. You can generally identify
forward-looking statements by our use of forward-looking
terminology such as "anticipate," "believe," "continue," "could,"
"estimate," "expect," "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 undertakes no duty to update its
forward-looking statements.
The ownership information and certain financial information
contained in this news release (i) do not reflect the potential
exercise of the over-allotment option granted to the underwriters
in CVR Refining's initial public offering, which expires on
February 15, 2013, (ii) do not
reflect potential future sales or issuances of CVR Refining or CVR
Partners units and (iii) are calculated on a full-year basis as if
the closing of CVR Refining's initial public offering occurred on
January 1, 2013.
Stockholders should consult their tax advisors regarding the tax
effects of the dividends to them.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified
holding company primarily engaged in the petroleum refining and
nitrogen fertilizer manufacturing industries through its holdings
in two limited partnerships, CVR Refining, LP and CVR Partners, LP.
CVR Energy subsidiaries serve as the general partner and own a
majority of the common units representing limited partner interests
of CVR Refining and CVR Partners.
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
SOURCE CVR Energy, Inc.