Slide 1: Investor Presentation May 2015
Investor Presentation May 2015
Slide 2: Safe Harbor
The following information contains forward-looking statements based on management’s current expectations and beliefs, as well as a number of assumptions concerning future events. These statements are subject to risks, uncertainties, assumptions and other important factors. Interested parties are cau
Slide 3: Overview & Strategic Factors
• Solid long-term industry fundamentals • Strategically located assets • Fully utilized capacity • Feed stock benefits • Experienced management team • Multiple opportunities for growth -- Partnership formed by CVR Energy, Inc. in June 2007 … IPO in April 2011 -- -- Manufacturing facility primarily p
Slide 4: Solid Industry Fundamentals: Key Demand Drivers
P o u n d s ( lb s ) 0 2 4 6 8 10 1950 1970 1990 2010 2030 2050 B ill io n s o f P e o p le World Population Source: USDA, Census Bureau, FAO, World Bank & USDA WASDE.. A c re s P e r P e rs o n World Farmland Per Capita 0.4 0.5 0.6 0.7 0.8 1970 1980 1990 2000 2010 - 2,000 4,000 6,000 8,000 10,000 1
Slide 5: Consistent Growth in Fertilizer Demand
• Nitrogen represents 61% of fertilizer consumption • Nitrogen fertilizers have the most stable demand – Must be applied annually – Primary determinant of crop yield • Corn consumes largest amount of nitrogen fertilizer Note: Nutrient Tons; Fertilizer Years. Source: International Fertilizer Industry
Slide 6: Corn Prices Continue to Support Fertilizer Use
Corn Prices Continue to Support Fertilizer Use Fertilizer is Smaller Component of Total Cost NYSE:UAN 6 Solid Industry Fundamentals 18% 19% 20% 21% 22% 23% 24% 25% 2009 2010 2011 2012 2013 Fertilizer Portion of U.S. Farmer Total Input Costs Source: USDA. $3 $4 $5 $6 $7 $8 $9 5 /1 2 /2 0 1 0 8 /2 0 /
Slide 7: Nitrogen Supply/Demand Imbalance in U.S.
-4,000 -2,000 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 Production Imports Exports Consumption 0 0 0 ’s o f N it ro g en S h o rt T o n s Total U.S. Nitrogen Supply & Demand Source: Blue, Johnson and Associates, Inc. • Fertilizer accounted for 72% of total nitrogen u
Slide 8: Excess Demand Driving Net Imports of UAN
U.S. Net Imports of UAN were 24% of Demand in 2014 (1) Country 2010 2011 2012 2013 2014 Russia 749 612 675 1,139 1,302 Trinidad & Tobago 777 916 773 652 795 Canada 437 560 365 302 386 Romania 254 442 258 216 157 Bulgaria 33 19 99 49 155 China 0 0 0 0 118 Netherlands 44 130 130 169 69 Lithuania 79 44
Slide 9: Fertilizer Prices Remain Attractive
$200 $300 $400 $500 $600 $700 $800 5 /1 0 /1 0 8 /1 0 /1 0 1 1 /1 0 /1 0 2 /1 0 /1 1 5 /1 0 /1 1 8 /1 0 /1 1 1 1 /1 0 /1 1 2 /1 0 /1 2 5 /1 0 /1 2 8 /1 0 /1 2 1 1 /1 0 /1 2 2 /1 0 /1 3 5 /1 0 /1 3 8 /1 0 /1 3 1 1 /1 0 /1 3 2 /1 0 /1 4 5 /1 0 /1 4 8 /1 0 /1 4 1 1 /1 0 /1 4 2 /1 0 /1 5 5 /1 0 /1 5 Amm
Slide 10: Corn Inventory Impacts Planting Levels
USDA Estimates U.S. Ended 2014 with Corn Stocks-to-Use of 13.6% -- CVR Partners Anticipates 88MM to 90MM Acres Will Be Planted in 2015 -- 0 30 60 90 120 150 180 0 20 40 60 80 100 Planted Yield Yield Trend Line Millions of Acres Bushels per Acre U.S. Corn Planted & Yields Source: USDA (WASDE). U.S. C
Slide 11: Blueprint for Success
NYSE:UAN 11 Blueprint for Success • Leverage strategically located assets in key markets • Incrementally expand plant production and distribution capabilities • Selectively evaluate longer term opportunities • Focused on growing distributions – Investments to be accretive with an acceptable level of
Slide 12: Strategically Located Assets
• Located in Farm Belt • 49% of corn planted in 2014 was within ~$45/UAN ton freight rate of plant • Transportation cost advantage to Corn Belt vs. U.S. Gulf Coast NYSE:UAN 12 Strategically Located Assets
Slide 13: Fully Utilized Capacity
(1) 1.0 ton of ammonia converts to approximately 2.44 tons of UAN. (2) Excludes impact of shutdown for installation of waste heat boiler, pressure swing adsorption unit upgrade and maintenance of Linde’s air separation unit. Including these impacts, on-stream efficiency was 96.8% for gasifier, 92.6%
Slide 14: Feed Stock Benefits
• Utilize pet coke as feed stock versus natural gas • Operating costs are competitive to natural gas fed nitrogen fertilizer producers • ~70% of pet coke requirement contracted through 2027 – Abundant supply from 3rd parties available by truck and rail at attractive prices for remaining 30% • Dual t
Slide 15: Skilled Management Team
NYSE:UAN 15 Skilled Management Team Mark A. Pytosh: CEO & President 29 years William White: EVP Marketing & Operations 38 years Susan M. Ball: CFO & Treasurer 31 years John R. Walter: SVP, General Counsel & Secretary 13 years
Slide 16: Multiple Growth Opportunities
• Operational efficiency • Plant expand/enhance • Specialty products • Distribution/offsite storage • Mergers and acquisitions Current 12-36 Months 4-5 Years NYSE:UAN 16 Multiple Growth Opportunities
Slide 17: (1) Product price at gate (netback) price per ton represents net sales less freight
(1) Product price at gate (netback) price per ton represents net sales less freight revenue divided by product sales volume in tons in the reporting period. Netback price per ton is shown in order to provide a pricing measure that is comparable across the fertilizer industry. EBITDA 38.7 155.3 136.6
Slide 18: 2015 Results to Date
YTD 3/31/14 YTD 3/31/15 Increase UAN Product Price Per Ton at Gate(1) $253 $263 4% Ammonia Product Price Per Ton at Gate(1) $479 $553 15% Net Sales $80.3 $93.1 16% EBITDA(2) $29.8 $38.3 29% Adjusted EBITDA(3) $29.9 $38.4 28% Operating Income $23.1 $31.5 36% Available Cash for Distribution $27.8 $32.
Slide 19: Strong Financial Profile
($U.S. millions, unless otherwise noted) Capitalization As of 3/31/15 Cash & Equivalents $72.6 Credit Facility due April 2016: Term Loan $125.0 $25 million Revolver Total Debt $125.0 Total Partners' Equity 414.0 Total Capitalization (Book) $539.0 LTM 3/31/15 EBITDA* $118.6 LTM 3/31/15 Interest Expen
Slide 20: A Bright Outlook
• Solid industry fundamentals • High-quality & strategically located assets • Premium product focus • Opportunities for growth • Experienced management team • Pay out 100% of available cash each quarter • General Partner has non-economic interest (no IDRs) NYSE:UAN 20 A Bright Outlook
Slide 21: Appendix
Appendix
Slide 22: Plant Process Flow Chart
Linde Air Separation Unit Oxygen Gasifier (2 Units) Pet Coke Pet Coke CVR Refining Refinery Third Party Supplier(s) Slag Ammonia Synthesis UAN Synthesis UAN Product Ammonia Product Nitrogen Syngas (Hydrogen) Ammonia 22 NYSE:UAN Plant Process Flow Chart
Slide 23: To supplement the actual results in accordance with U.S. generally accepted accounting principles (GAAP),
To supplement the actual results in accordance with U.S. generally accepted accounting principles (GAAP), for the applicable periods, the Partnership also uses certain non-GAAP financial measures, which are derived from our GAAP-based results. The use of non-GAAP adjustments are not in accordance wi
Slide 24: EBITDA: Defined as net income before (i) net interest (income) expense; (ii) income tax
EBITDA: Defined as net income before (i) net interest (income) expense; (ii) income tax expense; and (iii) depreciation and amortization expense. Adjusted EBITDA: Defined as EBITDA further adjusted for the impact of non-cash share-based compensation, and, when applicable, major scheduled turnaround
Slide 25: Seasonal Activities & Transactions
25 January-March April-June July-September October-December Season Dealer/Distributor Fill Orders & Wheat Topdress Spring Planting Dealer/Distributor Fill Orders Dealer/Distributor Fill Orders & Fall Planting Crop No Planting Corn Planting Wheat Planting (Southern Territories) Wheat Planting Nitroge