Cvr Energy Inc. · NYSE:CVI
Cvr Energy — Investor Presentation (September 2020)
31 slides from Cvr Energy's investor presentation, Sep 9, 2020
Slide 1: September 2020 Investor Presentation
Exhibit 99.1 September 2020 Investor Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements (“FLS”) which are protected as FLS under the PSLRA, and which are based on management’s current expectations and beliefs, as well as a number of assumptions concerning future events. The assumptions and estimates underl
Slide 3: Mission and Values
Mission and Values Our Guiding Principles Our mission is to be a top-tier North American petroleum refining and nitrogen-based fertilizer company as measured by safe and reliable operations, superior financial performance and profitable growth. Our core values define the way we do business every day
Slide 4: Company Overview: Mid-Continent Focused Refining & Fertilizer Businesses
Company Overview Mid-Continent Focused Refining & Fertilizer Businesses CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries. CVR Energy’s Petroleum segment is the larger of the two businesses and is comprised of two
Slide 5: Strategic Priorities
Strategic Priorities Focus on Operating Safely, Controlling Costs and Maintaining Balance Sheet & Liquidity Environmental, Continuing to improve in all Environmental, Health and Safety matters - Safety is Job 1 Health and Safety ✓ 1H 2020 Total Recordable Incident Rate was down 33% and Environmental
Slide 6: Petroleum Segment
oe) = i PETROLEUM SEGMENT
Slide 7: Asset Footprint: Strategically Located Assets near Cushing and SCOOP/STACK
Asset Footprint Strategically Located Assets near Cushing and SCOOP/STACK Mid-Continent Refineries Nameplate crude oil capacity of 206,500 bpd across two refineries • 2Q20 total throughput of 156,369 bpd (impacted by planned Coffeyville turnaround and reduced demand) • 2019 total throughput of 215,9
Slide 8: Strategically Located Mid-Con Refineries Multiple Takeaway Options
Strategically Located Mid-Con Refineries Multiple Takeaway Options Provide Product Placement Flexibility Marketing Network Optionality ➢ Marketing activities focused in central mid- continent area via rack marketing, supplying customers nearby and at terminals on third- party distribution systems ➢
Slide 9: High-Quality Refining Assets
High-Quality Refining Assets Consistent High Margin Generation and Low-Cost Operations Consolidated Top-Tier Refining Margin(1) Consolidated Low Cost Operator(2) Total Throughput(1) Total Production(1) Heavy Canadian (3) Other (4) Other (5) Condensate 2% 6% 6% 7% Midland WTI 3% WTL 2% 187,070 Distil
Slide 10: Challenging Macro Environment: Supply and Demand Fundamentals
Challenging Macro Environment Mid Con Supply and Demand Fundamentals Better than US Average US Gasoline Demand Magellan System Gasoline Demand US Diesel Demand Magellan System Diesel Demand Source: EIA, Magellan 10
Slide 11: Challenging Macro Environment: Inventories
Challenging Macro Environment Mid Con Supply and Demand Fundamentals Better than US Average US Gasoline Inventories Magellan System Gasoline Inventories US Diesel Inventories Magellan System Diesel Inventories Source: EIA, Magellan 11
Slide 12: Expect Crack Spreads to Improve as Demand Recovers
Challenging Macro Environment Expect Crack Spreads to Improve as Product Demand Recovers and Inventories Decline 2-1-1 Crack Spreads & Brent-WTI Differentials ($/bbl) WTI-Based Gasoline and ULSD Crack Spreads ($/bbl) $35 $30 NYMEX ULSD Crack NYMEX RBOB Crack NYMEX 2-1-1 Group 3 2-1-1 Brent-WTI $30 $
Slide 13: Progressing Renewable Diesel Project
Progressing Renewable Diesel Project(1) Potential Multi-Phase Project Utilizing Existing Assets at Both Refineries KSAAT Project at Wynnewood • Convert the existing hydrocracker at Wynnewood to Renewable Diesel service • Capacity of 100 million gallons per year of washed and refined soybean oil Phas
Slide 14: Renewable Diesel Project: Detailed Cost Estimates for Phase 1
Progressing Renewable Diesel Project Board Authorized Spending for Detailed Cost Estimates for Phase 1 KSAAT Project at Wynnewood Wynnewood Hydrocracker Conversion Renewable Diesel Margin Proxy Project Highlights: • Convert 19,000 BPD hydrocracker at Wynnewood to process 100 million gallons per year
Slide 15: Renewable Diesel Project Economics and Sensitivities
Progressing Renewable Diesel Project Renewable Diesel Project Economics and Sensitivities Project Economics: KSAAT Project at Wynnewood ➢ Renewable diesel margins impacted by several factors: ➢ Crude oil price and spread between ULSD and Soybean oil (HOBO spread) ➢ Carbon Intensity (CI) of feedstock
Slide 16: Capital Expenditures and Turnarounds
Capital Expenditures and Turnarounds Disciplined Approach to Capital Spending 2020 Petroleum Segment Capex budget of $74M - $78M $250 $200 Reduced 2020 planned spending by over 30% from original budget. $150 Environmental and Maintenance spending planned $M $100 at $65M - $68M for FY20. YTD spending
Slide 17: Fertilizer Segment
FERTILIZER SEGMENT
Slide 18: Stable Trends in Fertilizer Demand
Stable Trends in Fertilizer Demand Global and Domestic Demand for Nitrogen Remains Steady Global nitrogen consumption increased by 15% between 2009 and 2019 driven by: Global Nitrogen Consumption ➢ Population growth 140 130 ➢ Decrease in arable farmland per capita 120 ➢ Biofuel consumption 110 ➢ Con
Slide 19: U.S. Nitrogen Supply & Demand
U.S Nitrogen Supply & Demand Domestic Supply and Demand Picture is More Balanced Corn Stocks to Use Compared to Netback Fertilizer Pricing US Nitrogen Supply ➢ Nitrogen fertilizers represent approximately 15% of ➢ Major global nitrogen capacity build cycle largely farmers’ cost structure and signifi
Slide 20: Strong Demand for Corn in the U.S.
Strong Demand for Corn in the U.S. Increasing Corn Consumption is Positive for Nitrogen Demand ➢ Corn has a variety of uses and applications, U.S. Domestic Corn Use including feed grains, ethanol for fuel and 14.0 food, seed and industrial (FSI) 12.0 10.0 ➢ Feed grains 8.0 6.0 ▪ ~96% of domestic fee
Slide 21: Strategically Located Assets in Premium Pricing Regions
Strategically Located Assets Well-Positioned in Premium Pricing Regions ➢ Large geographic footprint serving the Southern Plains and Corn Belt region ➢ Well positioned to minimize distribution costs and maximize net back pricing ➢ Rail loading rack at Coffeyville provides significant logistics optio
Slide 22: Key Operating Statistics
Key Operating Statistics Consistent High Utilization at Both Facilities Consolidated Production Volumes (1) Ammonia Utilization(2) Consolidated Feedstocks Costs(1) Consolidated Sales Revenue(1)(3) (1) For the last twelve months ended June 30, 2020. (2) Adjusted by planned turnarounds. 22 (3) Exclude
Slide 23: Capital Expenditures and Turnaround Expenses
Capital Expenditures and Turnaround Expenses Primarily Focused on Maintenance Spending East Dubuque Merger on 2020 Total Capex budget of $19M - $23M April 1, 2016 $25 Reduced 2020 planned spending by over 15% $20 from original budget. $15 Environmental and Maintenance spending planned $M $10 at $14M
Slide 24: Appendix
APPENDIX
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures Available Cash for Distribution - EBITDA for the quarter excluding non-cash income or expense items (if any), for which adjustment is deemed necessary or appropriate by the board of directors (the “Board”) of our general partner in its sole discretion, less (i) reserves f
Slide 26: Non-GAAP Financial Measures: CVR Energy EBITDA and Refining Margin
Non-GAAP Financial Measures (In USD Millions) CVR Energy, Inc. 2015 2016 2017 2018 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 TTM Net Income $ 350 $ 10 $ 258 $ 366 $ 362 $ 104 $ 28 $ (101) $ (32) $ (1) Add: Interest expense and other financing costs, net of interest income 47 83 109 102 102 26 24 35 31 11
Slide 27: Non-GAAP Financial Measures: EBITDA by Segment
Non-GAAP Financial Measures Three Months Ended Twelve Months (In USD Millions) September 30, December 31, March 31, June 30, Ended 2019 2019 2020 2020 June 30, 2020 Consolidated Net income (loss) $ 104 $ 28 $ (101) $ (32) $ (1) Add: Interest expense, net 26 24 35 31 116 Income tax expense (benefit)
Slide 28: Reconciliation of Total Debt and Net Debt to EBITDA
Non-GAAP Financial Measures Reconciliation of Total Debt and Net Debt and Finance Lease Obligations to EBITDA Exclusive of Nitrogen Fertilizer (In USD Millions) Twelve Months Ended June 30, 2020 Total debt and finance lease obligations(1) $ 1,690 Less: Nitrogen Fertilizer debt and finance lease obli
Slide 29: Non-GAAP Financial Measures: CVR Partners, LP
Non-GAAP Financial Measures (In USD Millions) CVR Partners, LP 2015 2016 2017 2018 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 TTM Net Income (loss) $ 62 $ (27) $ (73) $ (50) $ (35) $ (23) $ (25) $ (21) $ (42) $ (111) Add: Interest expense and other financing costs, net of interest income 7 49 63 63 62 16
Slide 30: 2020 Estimated Capital Expenditures
2020 Estimated Capital Expenditures 2019 Actual 2020 Estimate (1)(2) Maintenance Growth Total Maintenance Growth Total Low High Low High Low High Petroleum $ 79 $ 10 $ 89 $ 65 $ 68 $ 9 $ 10 $ 74 $ 78 Nitrogen Fertilizer 18 2 20 14 16 5 7 19 23 Other 5 - 5 2 4 - - 2 4 Total $ 102 $ 12 $ 114 $ 81 $ 88
Slide 31: Simplified Organizational Structure
Simplified Organizational Structure Public Icahn Enterprises L.P. and Affiliates 29% 71% CVR Energy, Inc. (NYSE:CVI) Wynnewood Insurance Corporation CVR Energy Holdings, Inc. CVR Aviation, LLC Public 34.1% 65.9% CVR Services LLC CVR GP, LLC CVR Refining GP, LLC 65.4% 34.6% Non-Economic General Partn