Cvr Energy Inc. · NYSE:CVI
Cvr Energy — Investor Presentation (March 2012)
30 slides from Cvr Energy's investor presentation, Mar 26, 2012
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation March 26, 2012
Slide 2: Forward Looking Statements
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.
Slide 3: Management Attendees
Management Attendees Frank Pici Chief Financial Officer Ed Morgan Executive Vice President of Investor Relations Jay Finks Director of Finance 2
Slide 4: Company Overview
Company Overview
Slide 5: CVR Energy: About Us
CVR Energy: About Us Pro Forma Company Overview Two top-tier Mid-Continent refineries NYSE– CVI NYSE– UAN Market Cap (1) - $1.8 billion Market Cap (1) - $2.3 billion – 115,000 bpd Coffeyville, Kansas refinery CVI owns ~ 70% – 70,000 bpd Wynnewood, Oklahoma Refinery A nitrogen fertilizer plant using
Slide 6: 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 Company (Kbpd) Complexity Median 16.0 NCRA Capacity: Marathon Petroleum 602.0 10.0 185.0 Capacity: 185 kbpd (
Slide 7: Key Business Drivers
Key Business Drivers Refining & Fertilizer (1) Utilization 100% 105% 95% 100% 95% 90% 90% 85% 85% 80% 80% 75% 75% 70% 70% 2008 2009 2010 2011 Gasifier Ammonia UAN Refining Utilization WTI vs. Midale & WTS WCS -WTI Differential $10 $0 $5 ($5) $0 ($10) ($5) ($15) ($10) ($20) ($15) ($25) ($20) ($25) ($
Slide 8: Utilization by PADD
Utilization by PADD 100 95 88.7 83.5 86.1 84.8 90 82.1 85 80 75 70 65 60 2007 2008 2009 2010 2011 PADD 1 PADD II PADD III PADD IV PADD V Average Source: EIA Magellan Pipeline Inventories over 4 Year Range Magellan Pipeline Inventories over 4 Year Range Gasoline ULS Diesel Source: Magellan 7
Slide 9: CVR Energy total shareholder return
CVR Energy total shareholder return Refiners relative total return performance CVI Refining peers S&P 500 Since IPO 32% (39%) (10%) 160 3- year 459% 81% 80% 2-year 198% 134% 20% 140 1-year 39% 13% 10% 120 100 80 60 40 20 0 Oct -07 Feb -08 Jun -08 Oct -08 Feb -09 Jun -09 Oct -09 Feb -10 Jun -10 Oct -
Slide 10: Shareholder Value Focused
Shareholder Value Focused Building the business Responsive to opportunities Increased total refining capacity to 185 kbpd IPO of CVR Partners Integrating Wynnewood acquisition and Accretive acquisition of GWEC realizing synergies Initiating regular quarterly dividend $0.08/sh Grown crude gathering t
Slide 11: Refining Business
Refining Business
Slide 12: Extensive Crude Oil Supply and Product Distribution Network
Extensive Crude Oil Supply and Product Distribution Network Consolidated Supply Network Consolidated Marketing Network Coffeyville Resources Refining & Marketing and Nitrogen Fertilizer Wynnewood Refinery Major Canadian Crude Oil Pipelines CVR Crude Oil Pipelines Wynnewood Related Pipelines Third-Pa
Slide 13: Logistics Drives Profitability
Logistics Drives Profitability Logistics Overview Operations Map Located 100 miles from the global crude hub of Cushing, CVR has access to global crudes with Canada storage to optimize purchasing and crude slates Shipper status of 35,000 bpd on Spearhead and Keystone Pipelines 40,000+ bpd crude oil
Slide 14: Access to WTI Priced Crudes
Access to WTI Priced Crudes Overview Historical WTI-Brent Spread ($/bbl) Both refineries benefit from the current WTI-Brent spread $140 $30.00 WTI price-linked crudes are currently trading at $120 $25.00 historically wide discounts to crudes, such as Brent $100 $20.00 and LLS $80 $15.00 Growing prod
Slide 15: Hedging Activity
Hedging Activity Volume Hedged 6.0 $30 4.8 5.0 $26.12 4.7 $25 $23.87 $20.54 $24.23 $24.74 $23.68 $23.67 4.0 $22.23 $20 3.1 3.0 2.9 $15 2.0 2.0 $10 1.1 1.1 1.1 1.0 $5 0.0 $0 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Base Level 11/28/2011 As of 12/31/2011 As of 1/31/2012 As of 3/15/2012
Slide 16: Crude Gathering
Crude Gathering Overview Asset Map Gathered 7,000 bpd in 2005 Today gathering over 40,000+ bpd North Dakota Growth target 10% – 20% per year for the next 2 – 5 years South Dakota Nebraska Total Consumed Crude Discount to WTI 4 year average is $3.53 Colorado Kansas $2 Missouri $1 $0 ($1) ($2) Oklahom
Slide 17: Crude Gathering System
Crude Gathering System Gathered Blended Refined Phillipsburg Plainville (Gathering North) 55k 20k Humboldt 150 miles (Gathering South) Jayhawk/Kaw Pipeline system Valley Center Winfield Station (Gathering South) Capacity 4,700 bpd 62.5 miles 156,000 b/d 1.6 miles 67 miles Hooser Broome Coffeyville 4
Slide 18: Nitrogen Fertilizer MLP
Nitrogen Fertilizer MLP
Slide 19: Strategically Located Assets and Logistics
Strategically Located Assets and Logistics 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 $25/ton transportation advantage to corn belt vs. US Gulf Coast No intermediate transfer, storag
Slide 20: Stable & Economic Feedstock
Stable & Economic Feedstock Overview Abundant Supply of Third-party Pet Coke CVR Partners LP 2008 – 2010 average daily coke demand ~ 1,378 tons/day Coke gasification technology uses petroleum coke as a feedstock – Pet coke costs lower than natural gas costs per ton of ammonia produced, and pet coke
Slide 21: Market Fundamentals
Market Fundamentals Farmer Profitability Supports Fertilizer Pricing Corn consumes the largest amount of nitrogen fertilizer Farmers are expected to generate substantial proceeds at currently forecasted corn prices Farmers are still incentivized to apply nitrogen fertilizer at corn prices lower than
Slide 22: Market Fundamentals
Market Fundamentals Strong Pricing Environment Historical U.S. Nitrogen Fertilizer Prices ($ per Ton) Robust global grain demand coupled with1,000 capacity reductions has lead to significant900 nitrogen fertilizer price increases 800 Ammonia 700 5 Yr. Avg. $651 5 year average UAN price has increased
Slide 23: Financial Highlights
Financial Highlights
Slide 24: Key Historical Financial Statistics CVR Energy Standalone
Key Historical Financial Statistics CVR Energy Standalone EBITDA by Operating Segment ($mm) Capital Expenditures ($mm) (a) $2 $4 $163 $19 $24 $2 $13 $3 $581 $69 $60 $130 $71 $53 $10 $34 $109 $142 $155 $20 2008 2009 2010 2011 2008 2009 2010 2011 Adjusted Petroleum EBITDA Adjusted Fertilizer EBITDA Pe
Slide 25: Controlled Operating Expenses
Controlled Operating Expenses CVI Operating Expenses (a)(b) ($/bbl) 2011 Operating Expense (b) ($/bbl) (a) (a) Excludes turnaround. Includes only 16 days of Wynnewood operation. (b) Calculated on a per barrel of crude throughput. 24
Slide 26: Appendix
Appendix
Slide 27: Organizational Structure
Organizational Structure Public shareholders 100% CVR Energy, Inc. NYSE: CVI 100% $400m ABL due ’15 st Coffeyville Resources, LLC $447m 9% 1 Lien notes due ‘15 Public unitholders nd $223m 10 7/8% 2 Lien notes due ‘17 100% GP 30.3% LP 100% 69.7% LP Refining business $25m cash flow revolver due ’16 $1
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures To supplement the actual results in accordance with U.S. generally accepted accounting principles (GAAP), for the applicable periods, the Company also uses certain non-GAAP financial measures as discussed below, which are adjusted for GAAP-based results. The use of non-GA
Slide 29: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) EBITDA: EBITDA represents net income before the effect of interest expense, interest income, income tax expense (benefit) and depreciation and amortization. EBITDA is not a calculation based upon GAAP; however, the amounts included in EBITDA are derived from amou
Slide 30: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) CVR Adjusted EBITDA ($mm) Petroleum: 2008 2009 2010 2011 Petroleum operating income $31.9 $170.2 $104.6 $465.7 FIFO impact (favorable) unfavorable 102.5 (67.9) (31.7) (25.6) Share-based compensation (10.8) (3.7) 11.5 8.7 Loss on disposal of fixed assets - - 1.3 2