Cvr Energy Inc. · NYSE:CVI
Cvr Energy — Investor Presentation (December 2011)
36 slides from Cvr Energy's investor presentation, Dec 9, 2011
Slide 1: Investor Presentation December 2011
Investor Presentation December 2011
Slide 2: Forward-looking statements
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. You are cautioned not to p
Slide 3: Not an offer to sell or solicitation of offers to buy securities
“The following presentation is neither an offer to sell nor a solicitation of offers to buy the securities of Coffeyville Resources, LLC or CVR Partners, LP.”
Slide 4: Presenters
Jack Lipinski Chief Executive Officer Ed Morgan Chief Financial Officer Jay Finks Director of Finance
Slide 5: Agenda
Transaction Overview Gary-Williams Acquisition Summary?Combined Company Overview??Nitrogen Fertilizer MLP ??Financial Highlights ??Appendix
Slide 6: Transaction Overview
Transaction Overview saction Overview Jack Lipinski Chief Executive Officer
Slide 7: Executive Summary
Executive Summary ?On November 2, 2011, CVR Energy, Inc. announced that it had signed an agreement to acquire Gary-Williams Energy Corp (“GWEC”) for $525 million working capital)??GWEC is a refiner located in Wynnewood, Oklahoma — Asset is a 70,000 bpd, 9.3 complexity crude oil refinery located in W
Slide 8: Transaction Summary
Transaction Summary ($ in millions) Sources Uses Senior secured financing(a) $209 Purchase Gary-Williams(b) $594 Cash on hand 400 Estimated fees and expenses 15 Total sources $609 Total uses $609 Existing Pro forma 9/30/11 xEBITDA Adj. 9/30/11 xEBITDA (c) Cash and cash equivalents $643 ($400) $243 A
Slide 9: Pro Forma Organizational Structure
Pro Forma Organizational Structure Public shareholders 100% CVR Energy, Inc. NYSE: CVI 100% Upsized $400 mm ABL revolver New $200 mm senior secured financing Public unitholders Coffeyville Resources, LLC $247 mm 9.000% 1st lien notes due 15 $223 mm 10.875% 2nd lien notes due ,,17 100% GP 30.3% LP 10
Slide 10: Gary-Williams Acquisition Summary
Gary-Williams Acquisition Summary Jack Lipinski Chief Executive Officer
Slide 11: Transaction Overview
Transaction Overview ??CVR Energy, Inc. has agreed to acquire Gary-Williams Energy Corporation for $525 million in cash plus working capital ??Gary-Williams primary asset -per-day is (“bpd”) a 70,000 located in Wynnewood, Oklahoma — Complexity rating of 9.3 ??CVR Energy will also acquire associated
Slide 12: Acquisition Rationale
Acquisition Rationale ??High quality asset increases CVR s — 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 the highly fragmented and histori
Slide 13: Well Positioned to Compete in Underserved PADD II Region
Well Positioned to Compete in Underserved PADD II Region “Top Quartile” Consolidated Asset Profile PADD II Consolidated Refinery Statistics —By Owner PADD II Refiners Total Capacity Blended Median Company (Kbpd) Complexity 16.0 NCRA Capacity: 185.0 Marathon Petroleum 602.0 10.0 Capacity: 185 kbpd (C
Slide 14: Extensive Crude Oil Supply and Product Distribution Network
Extensive Crude Oil Supply and Product Distribution Network 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-Pa
Slide 15: Post-closing Value Enhancement Initiatives
Post-closing Value Enhancement Initiatives ??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 16: Combined Company Overview
Combined Company Overview Jack Lipinski Chief Executive Officer
Slide 17: CVR Energy: About Us
CVR Energy: About Us Pro Forma Company Overview Pro Forma LTM Feedstock & Product Slate(a) Isobutane Other Other ??Two top-tier Mid-Continent refineries LPG Butane 1% feedstocks Asphalt 8% 1% 1% 4% 3% — 115,000 bpd Coffeyville, Kansas refinery Jet Fuel — 70,000 bpd Wynnewood, Oklahoma Refinery 2% So
Slide 18: Coffeyville Refinery Overview
Coffeyville Refinery Overview Summary LTM Feedstock & Product Slate(a) ??115,000 bpd of crude throughput capacity Other feedstocks Other products — 12.9 complexity 6% 13% ??High complexity refinery producing gasoline, Sour Crude distillates, specialty products and petroleum coke (WCS) 20% Gasoline S
Slide 19: Wynnewood Refinery Overview
Wynnewood Refinery Overview Summary LTM Feedstock and Product Slate??70,000 bpd of crude throughput capacity Isobutane Butane 2% Asphalt LPG Mixed butane — 9.3 complexity 2% 9% 2% 1% Jet Fuel Sour Crude 6% ??Produces a full slate of gasoline, diesel, (WTS) 18% asphalt, jet fuel, LPG and specialty pr
Slide 20: Access to WTI Priced Crudes
Access to WTI Priced Crudes Overview Historical WTI-Brent Spread ($/bbl) ??Both refineries benefit from the current WTI-Brent spread $140 $10 $120 $5 ??WTI price-linked crudes are currently trading at $0 $100 historically wide discounts to crudes, such as Brent $80 ($5) ($10) and LLS /bbl) $60 ($15)
Slide 21: Logistics Drives Profitability
Logistics Drives Profitability 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 Dakot
Slide 22: Crude Gathering Overview
Crude Gathering 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 Total Consumed Crude Discount to WTI Nebraska $2 3 year average is $3.64 Colorado $1 Kansas Missouri $0 ($1) /bbl ($2) ($3)
Slide 23: Nitrogen Fertilizer MLP
Nitrogen Fertilizer MLP Jay Finks Director of Finance
Slide 24: Strategically Located Assets and Logistics
Strategically Located Assets and Logistics Overview Fertilizer Operations??Located in the corn belt (on Union Pacific mainline) WA MT ND ??45% of corn planted in OR MN WI ID 2010 was within $35/UAN SD ton freight rate of our WY IA plant NE NV CA IL ??$25/ton transportation UT CO advantage to corn be
Slide 25: Stable & Economic Feedstock
Stable & Economic Feedstock Overview Abundant Supply of Third-party Pet Coke ??CVR Partners LP 2008 —2010 average daily coke demand ~ 1,378 tons/day??Coke gasification technology uses petroleum coke as a feedstock — Pet coke costs lower than natural gas costs per ton of ammonia produced, and pet cok
Slide 26: Financial Highlights
Financial Highlights Ed Morgan Chief Financial Officer
Slide 27: Key Historical Financial Statistics
Key Historical Financial Statistics CVR Energy Standalone EBITDA by Operating Segment ($mm) Capital Expenditures ($mm) $2 $122 $24 $2 $3 $574 $3 $17 $13 $60 $130 $71 $53 $10 $34 $36 $109 $142 $155 $20 2008 2009 2010 LTM 2008 2009 2010 LTM Adjusted Petroleum EBITDA Adjusted Fertilizer EBITDA Petroleu
Slide 28: Key Historical Financial Statistics: Gary Williams Standalone
Key Historical Financial Statistics Gary Williams Standalone Adjusted EBITDA ($mm)(a) Capital Expenditures ($mm) $49 $235 $43 250 200 150 $21 100 $37 $47 50 0 2009 2010 LTM 2009 2010 LTM Refining Margins and Expenses ($/bbl) Total Throughput (bpd) $17.76 66,515 64,282 64,488 $9.43 $7.50 $4.34 $3.92
Slide 29: Combined Company Controlled Operating Expenses
Combined Company — Controlled Operating Expenses CVI Operating Expenses(a) ($/bbl) Q3 11 LTM Operating $5.82 $6.00 $6.00 $5.41 $5.11 $5.00 $4.89 $5.00 $4.56 $4.48 $4.56 $4.24 $4.33 $3.91 $3.70 $4.00 $4.00 $3.58 $3.00 $3.00 $2.00 $2.00 $1.00 $1.00 $0.00 $0.00 2008 2009 2010 LTM 3Q 2011 (a) Excludes t
Slide 30: Hedging Activity
Hedging Activity CVR has an estimated $50.9 million unrealized gain based on 11/28 market data 30,000 $27.63 $30.00 $25.89 $25.65 $24.80 $24.57 $23.71 production) 25,000 $22.90 $25.00 20,879 21,429 21,196 $20.76 GWEC 20,000 20,380 $20.00 /bbl) ( $ of (% 15,000 $15.00 spread (bpd) 12,500 33% 34% 34%
Slide 31: Appendix
Appendix
Slide 32: Non-GAAP Financial Measures
Non-GAAP Financial Measures To supplement the actual results in accordance with U.S. generally accepted accounting principles (GAAP), for the applicable periods, the Company also uses certain non-GAAP financial measures as discussed below, which are adjusted for GAAP-based results. The use of non-GA
Slide 33: Non-GAAP Financial Measures
Non-GAAP Financial Measures EBITDA: EBITDA represents net income before the effect of interest expense, interest income, income tax expense (benefit) and depreciation and amortization. EBITDA is not a calculation based upon GAAP; however, the amounts included in EBITDA are derived from amounts inclu
Slide 34: CVR 9/30/11 LTM Adjusted EBITDA
Non-GAAP Financial Measures CVR 9/30/11 LTM Adjusted EBITDA ($mm) LTM 9/30/2011 Consolidated Net Income $282.2 Interest expense, net of interest income 53.8 Depreciation and amortization 88.1 Income tax expense 181.5 EBITDA adjustments included in NCI (3.4) Unrealized (gain)/loss on derivatives 9.8
Slide 35: CVR Adjusted EBITDA
Non-GAAP Financial Measures CVR Adjusted EBITDA ($mm) Petroleum: 2008 2009 2010 LTM 9/30/2011 Petroleum operating income $31.9 $170.2 $104.6 $529.5 FIFO impact (favorable) unfavorable 102.5 (67.9) (31.7) (30.4) Share-based compensation (10.8) (3.7) 11.5 17.1 Loss on disposal of fixed assets — - 1.3
Slide 36: GWEC Adjusted EBITDA
Non-GAAP Financial Measures GWEC Adjusted EBITDA ($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 amortization 15.4 13.8 1