Cvr Energy Inc. · NYSE:CVI
Cvr Energy — Deutsche Bank US Independent Refining Conference 2012
34 slides from Cvr Energy's conference presentation, Jan 5, 2012
Slide 1: Deutsche Bank US Independent Refining Conference
Exhibit 99.1 Deutsche Bank US Independent Refining Conference January 5, 2012
Slide 2: Forward-Looking Statements
Forward-Looking Statements TM This presentation should be reviewed in conjunction with CVR Energy, Inc.’s Third Quarter earnings conference call held on November 3, 2011. The following information contains forward-looking statements based on management’s current expectations and beliefs, as well as
Slide 3: Management Attendees
Management Attendees TM Jack Lipinski Chief Executive Officer Ed Morgan Executive Vice President of Investor Relations Jay Finks Director of Finance 2
Slide 4: Gary-Williams Acquisition Summary
Gary-Williams Acquisition Summary
Slide 5: Transaction Overview
Transaction Overview TM CVR Energy, Inc. acquired Gary-Williams Energy Corporation for $607 million including working capital Gary-Williams’ primary asset is a 70,000 barrels-per-day (“bpd”) refinery located in Wynnewood, Oklahoma – Complexity rating of 9.3 We funded the transaction primarily with c
Slide 6: Wynnewood Refinery Overview
Wynnewood Refinery Overview TM Summary LTM Feedstock and Product Slate 70,000 bpd of crude throughput capacity – 9.3 complexity Produces a full slate of gasoline, diesel, asphalt, jet fuel, LPG and specialty products – 97.5% liquid product yield Strategically located in Group III of PADD II – Access
Slide 7: Acquisition Rationale
Acquisition Rationale TM High quality asset increases CVR’s scale and operational diversity – Pro forma company will have approximately 185,000 bpd of throughput capacity and weighted average complexity of approximately 11.5 Strategically positioned in attractive Mid-Continent region – Located in th
Slide 8: CVR Energy: About Us
CVR Energy: About Us TM Pro Forma Company Overview Pro Forma LTM Feedstock & Product Slate (a) Two top-tier Mid-Continent refineries – 115,000 bpd Coffeyville, Kansas refinery – 70,000 bpd Wynnewood, Oklahoma Refinery A nitrogen fertilizer plant using pet coke gasification – Rated capacity of 1,225
Slide 9: Well Positioned to Compete in Underserved PADD II Region
Well Positioned to Compete in Underserved PADD II Region TM “Top Quartile” Consolidated Asset Profile PADD II Consolidated Refinery Statistics – By Owner PADD II Refiners (a) 100% of capacity in Wood River, IL refinery JV consolidated (50% ownership interest). (b) Includes 50% interest in JV in Tole
Slide 10: Extensive Crude Oil Supply and Product Distribution Network
Extensive Crude Oil Supply and Product Distribution Network TM Consolidated Supply Network Consolidated Marketing Network Coffeyville Resources Refining & Marketing and Nitrogen Fertilizer Wynnewood Refinery Major Canadian Crude Oil Pipelines CVR Crude Oil Pipelines Wynnewood Related Pipelines Third
Slide 11: Logistics Drives Profitability
Logistics Drives Profitability TM Logistics Overview Operations Map Located 100 miles from the global crude hub of Cushing, CVR has access to global crudes with Canada storage to optimize purchasing and crude slates Montana Bakken Shipper status of 35,000 bpd on Spearhead and Clearbrook North Dakota
Slide 12: Hedging Activity
Hedging Activity TM CVR has an estimated $50.9 million unrealized gain based on 11/28 market data Locked Gross $49.2 $53.9 $50.0 $44.5 $27.9 $14.7 $13.7 $12.5 Margin 2012 Total Locked Gross Margin $197.5 2012 Total Locked Margin per Barrel $3.42 Note: Based on 11/28 market data. 11
Slide 13: Post-closing Value Enhancement Initiatives
Post-closing Value Enhancement Initiatives TM Integrate and optimize operations with existing businesses – Expand existing crude oil gathering business to supply lower cost, local crude to Wynnewood refinery – Proximity of plant is a benefit to managing feedstocks Increase ability to optimize Sour /
Slide 14: Projected Synergies and Improvements
Projected Synergies and Improvements TM 2012E Projected Synergies Synergies Assumptions Amount ($mm)(a) Crude Rate Increase 4,000 bpd to 67,000 bpd in non turnaround years $16.3 Overall Crude Differential $0.50/bbl on crude rate 7.9 Reduce Trucked Crude Freight $0.50/bbl on 10,000 bpd 0.9 Product &
Slide 15: Coffeyville Overview
Coffeyville Overview
Slide 16: Coffeyville Refinery Overview
Coffeyville Refinery Overview TM Summary LTM Feedstock & Product Slate (a) 115,000 bpd of crude throughput capacity – 12.9 complexity High complexity refinery producing gasoline, distillates, specialty products and petroleum coke Strategically located in Group III of PADD II – Access to cost-advanta
Slide 17: Access to WTI Priced Crudes
Access to WTI Priced Crudes TM Overview Historical WTI-Brent Spread ($/bbl) Both refineries benefit from the current WTI-Brent spread WTI price-linked crudes are currently trading at historically wide discounts to crudes, such as Brent and LLS Growing production from the U.S. Bakken and Canada flowi
Slide 18: Crude Gathering
Crude Gathering TM Overview Asset Map Gathered 7,000 bpd in 2005 Today gathering 37,000+ bpd North Dakota Growth target 10% – 20% per year for the next 2 – 5 years South Dakota Nebraska Total Consumed Crude Discount to WTI Colorado Kansas Missouri Oklahoma Texas Corporate Refining Operations Headqua
Slide 19: Nitrogen Fertilizer MLP
Nitrogen Fertilizer MLP
Slide 20: Strategically Located Assets and Logistics
Strategically Located Assets and Logistics TM Overview Fertilizer Operations Located in the corn belt (on Union Pacific mainline) 45% of corn planted in 2010 was within $35/UAN ton freight rate of our plant $25/ton transportation advantage to corn belt vs. US Gulf Coast No intermediate transfer, sto
Slide 21: Stable & Economic Feedstock
Stable & Economic Feedstock TM Overview Abundant Supply of Third-party Pet Coke CVR Partners LP 2008 – 2010 average daily coke demand ~ 1,378 tons/day Coke gasification technology uses petroleum coke as a feedstock – Pet coke costs lower than natural gas costs per ton of ammonia produced, and pet co
Slide 22: Market Fundamentals: Farmer Profitability Supports Fertilizer Pricing
Market Fundamentals Farmer Profitability Supports Fertilizer Pricing TM Corn consumes the largest amount of nitrogen fertilizer Farmers are expected to generate substantial proceeds at currently forecasted corn prices Farmers are still incentivized to apply nitrogen fertilizer at corn prices lower t
Slide 23: Market Fundamentals: Strong Pricing Environment
Market Fundamentals Strong Pricing Environment TM Historical U.S. Nitrogen Fertilizer Prices ($ per Ton) 1,000 900 800 Ammonia 700 $686 600 5 Yr. Avg. 500 Ammonia $493 5 Yr. Avg. UAN 400 Ammonia $283 $352 300 5 Yr. Avg. 200 UAN $312 5 Yr. Avg. 100 UAN $163 0 1999 2000 2001 2002 2004 2005 2006 2007 2
Slide 24: Financial Highlights
Financial Highlights
Slide 25: Key Historical Financial Statistics: CVR Energy Standalone
Key Historical Financial Statistics CVR Energy Standalone TM EBITDA by Operating Segment ($mm) Capital Expenditures ($mm) Refining Margins and Expenses ($/bbl) Fertilizer Prices ($/Ton) Note: Adjusted Petroleum EBITDA represents petroleum operating income adjusted for FIFO impacts, share-based compe
Slide 26: Key Historical Financial Statistics: Gary Williams Standalone
Key Historical Financial Statistics Gary Williams Standalone TM Adjusted EBITDA ($mm) (a) Capital Expenditures ($mm) Refining Margins and Expenses ($/bbl) Total Throughput (bpd) (a) Adjusted EBITDA represents GWEC operating income adjusted for FIFO impacts, major scheduled turnaround expenses, reali
Slide 27: Combined Company – Controlled Operating Expenses
Combined Company – Controlled Operating Expenses TM CVI Operating Expenses (a) ($/bbl) Q3’11 LTM Operating Expense ($/bbl) (a) Excludes turnaround. CVI PF GWEC based on weighted average crude throughput. (b) HFC combined results from legacy companies 3Q 2011 report. 26
Slide 28: Appendix
Appendix
Slide 29: Pro Forma Organizational Structure
Pro Forma Organizational Structure TM Public shareholders 100% CVR Energy, Inc. NYSE: CVI Market cap: ~$2.2 bn 100% Public unitholders Coffeyville Resources, LLC 100% GP 30.3% LP 100% 69.7% LP Refining business ~$809 mm LTM EBITDA Fertilizer business 100% CVR Partners, LP NYSE: UAN Market cap: ~$1.8
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures TM To supplement the actual results in accordance with U.S. generally accepted accounting principles (GAAP), for the applicable periods, the Company also uses certain non-GAAP financial measures as discussed below, which are adjusted for GAAP-based results. The use of non
Slide 31: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) TM EBITDA: EBITDA represents net income before the effect of interest expense, interest income, income tax expense (benefit) and depreciation and amortization. EBITDA is not a calculation based upon GAAP; however, the amounts included in EBITDA are derived from a
Slide 32: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) TM CVR 9/30/11 LTM Adjusted EBITDA ($mm) LTM 9/30/2011 Consolidated Net Income $282.2 Interest expense, net of interest income 53.8 Depreciation and amortization 88.1 Income tax expense 181.5 EBITDA adjustments included in NCI (3.4) Unrealized (gain)/loss on deri
Slide 33: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) TM CVR Adjusted EBITDA ($mm) Petroleum: 2008 2009 2010 LTM 9/30/2011 Petroleum operating income $31.9 $170.2 $104.6 $529.5 FIFO impact (favorable) unfavorable 102.5 (67.9) (31.7) (30.4) Share-based compensation (10.8) (3.7) 11.5 17.1 Loss on disposal of fixed ass
Slide 34: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) TM GWEC Adjusted EBITDA ($mm) GWEC: 2009 2010 LTM 9/30/2011 Net income (loss) $52.5 $16.1 $161.6 Income taxes - - - Interest expense (net) 12.9 22.4 28.6 Depreciation and amortization 13.8 14.7 17.2 Hedge mark to market loss (gain) - - 37.9 Turnaround amortizatio
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