Cvr Energy Inc. · NYSE:CVI
Cvr Energy — Investor Presentation (November 2020)
31 slides from Cvr Energy's investor presentation, Nov 30, 2020
Slide 1: December 2020 Investor Presentation
December 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 3 3 Our Guiding Principles Safety - We always put safety first. The protection of our employees, contractors and communities is paramount. We have an unwavering commitment to safety above all else. If it’s not safe, then we don’t do it. Environment - We care for our environment. C
Slide 4: Company Overview
Petroleum Segment Fertilizer Segment Company Overview 4 4 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 Mid-Continent
Slide 5: Strategic Priorities
Strategic Priorities 5 Focus on Operating Safely, Controlling Costs and Maintaining Balance Sheet & Liquidity Environmental, Health and Safety Focus on Crude Oil Quality & Differentials Reduce our RIN Exposure Reduce Lost Opportunities Continuing to improve in all Environmental, Health and Safety ma
Slide 6: Petroleum Segment
PETROLEUM SEGMENT
Slide 7: Asset Footprint
Asset Footprint 7 Mid-Continent Refineries Nameplate crude oil capacity of 206,500 bpd across two refineries • 3Q20 total throughput of 201,168 bpd (total throughput impacted by maximizing light crude oil) • 2019 total throughput of 215,971 bpd Average complexity of 10.8 Located in Group 3 of PADD I
Slide 8: Strategically Located Mid-Con Refineries Marketing Network
Strategically Located Mid-Con Refineries 8 Marketing Network Optionality Multiple Takeaway Options Provide Product Placement Flexibility ➢ 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 Total Throughput(1) Total Production(1) Consolidated Top-Tier Refining Margin(1) Consolidated Low-Cost Operator(2) (1) Based on total throughputs for the last twelve months ended September 30, 2020. TTM throughputs impacted by the Coffeyville turnaround in the Spring of
Slide 10: Challenging Macro Environment
Challenging Macro Environment 10Source: EIA, Magellan Mid Con Supply and Demand Fundamentals Better than US Average US Gasoline Demand Magellan System Gasoline Demand US Diesel Demand Magellan System Diesel Demand
Slide 11: Challenging Macro Environment
Challenging Macro Environment 11Source: EIA, Magellan Mid Con Supply and Demand Fundamentals Better than US Average US Gasoline Inventories Magellan System Gasoline Inventories US Diesel Inventories Magellan System Diesel Inventories
Slide 12: Challenging Macro Environment: Crack Spreads Expected to Improve
Challenging Macro Environment 12Source: MarketView as of November 17, 2020 Expect Crack Spreads to Improve as Product Demand Recovers and Inventories Decline 2-1-1 Crack Spreads & Brent-WTI Differentials ($/bbl) Midland-Cushing and WTL-WTI Differentials ($/bbl)WCS – WTI Differential ($/bbl) WTI-Base
Slide 13: Progressing Renewable Diesel Project
Progressing Renewable Diesel Project(1) 13 Potential Multi-Phase Project Utilizing Existing Assets at Both Refineries • Convert the existing hydrocracker at Wynnewood to Renewable Diesel service • Retool the Wynnewood Refinery for maximum condensate processing • Capacity of 100 million gallons per y
Slide 14: Progressing Renewable Diesel Project: KSAAT Project at Wynnewood
Progressing Renewable Diesel Project 14 KSAAT Project at Wynnewood Board Authorized Spending for Detailed Cost Estimates for Phase 1 Wynnewood Hydrocracker Conversion Project Highlights: • Convert 19,000 BPD hydrocracker at Wynnewood to process 100 million gallons per year of washed and bleached soy
Slide 15: Renewable Diesel Project Economics and Sensitivities
Progressing Renewable Diesel Project 15 KSAAT Project at Wynnewood Renewable Diesel Project Economics and Sensitivities Project Economics: ➢ Renewable diesel margins impacted by several factors: ➢ Crude oil price and spread between ULSD and Soybean oil (HOBO spread) ➢ Carbon Intensity (CI) of feedst
Slide 16: Capital Expenditures and Turnarounds
Capital Expenditures and Turnarounds 16Note: As of September 30, 2020 2020 Petroleum Segment Capex budget of $86M - $92M Reduced 2020 planned spending by approximately 20% from original budget. Environmental and Maintenance spending planned at $73M - $77M for FY20. YTD spending through September 30,
Slide 17: Fertilizer Segment
FERTILIZER SEGMENT
Slide 18: Stable Trends in Fertilizer Demand
18 Stable Trends in Fertilizer Demand Source: Fertecon, World Bank Global nitrogen consumption increased by 15% between 2009 and 2019 driven by: ➢ Population growth ➢ Decrease in arable farmland per capita ➢ Biofuel consumption ➢ Continued evolution to more protein-based diets in developing countrie
Slide 19: U.S. Nitrogen Supply & Demand
➢ Nitrogen fertilizers represent approximately 15% of farmers’ cost structure and significantly improves yields ➢ UAN prices for YTD 2020 declined $50/ton from YTD 2019, or 24% Y/Y ➢ USDA projecting stocks to use ratio for 2020/2021 at less than 11%, its lowest level in over 5 years 19 U.S Nitrogen
Slide 20: Strong Demand for Corn in the U.S.
20 Strong Demand for Corn in the U.S. ➢ Corn has a variety of uses and applications, including feed grains, ethanol for fuel and food, seed and industrial (FSI) ➢ Feed grains ▪ ~96% of domestic feed grains are supplied by corn ▪ Consumes ~37% of annual corn crop(1) ➢ Ethanol ▪ Consumes ~35% of annua
Slide 21: Strategically Located Assets
21 Strategically Located Assets ➢ 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 optionality west of the Mississippi River due
Slide 22: Key Operating Statistics
22 Key Operating Statistics Consolidated Production Volumes (1) Ammonia Utilization(2) Consolidated Feedstocks Costs(1) Consolidated Sales Revenue(1)(3) (1) For the last twelve months ended September 30, 2020. (2) Adjusted by planned turnarounds. (3) Excludes freight. Consistent High Utilization at
Slide 23: Capital Expenditures and Turnaround Expenses
Capital Expenditures and Turnaround Expenses 23Note: As of September 30, 2020 2020 Total Capex budget of $18M - $21M Reduced 2020 planned spending by over 20% from original budget Environmental and Maintenance spending planned at $13M - $15M Growth capex budgeted at $5M - $6M ➢ Growth capex budget i
Slide 24: Appendix
APPENDIX
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures 25 Available Cash for Distribution - EBITDA for the quarter excluding non-cash income or expense items (if any), for which adjustment is deemed necessary or appropriate by the board of directors (the “Board”) of our general partner in its sole discretion, less (i) reserve
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures 26Note: All amounts on this slide are adjusted for the turnaround accounting change effective in 1Q19. These amounts are unaudited. Petroleum Segment (In USD Millions) CVR Energy, Inc. 2015 2016 2017 2018 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 TTM Net Income 350$ 10$ 258$ 3
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures 27 Twelve Months (In USD Millions) December 31, March 31, June 30, September 30, Ended 2019 2020 2020 2020 September 30, 2020 Consolidated Net income (loss) 28$ (101)$ (32)$ (108)$ (213)$ Add: Interest expense, net 24 35 31 31 121 Income tax expense (benefit) 19 (36) (5)
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures 28 (1) Amounts are shown inclusive of the current portion of long-term debt and finance lease obligations (2) Net debt represents total debt and finance lease obligations exclusive of cash and cash equivalents Reconciliation of Total Debt and Net Debt and Finance Lease Ob
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures 29 (In USD Millions) CVR Partners, LP 2015 2016 2017 2018 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 TTM Net Income (loss) 62$ (27)$ (73)$ (50)$ (35)$ (25)$ (21)$ (42)$ (19)$ (107)$ Add: Interest expense and other financing costs, net of interest income 7 49 63 63 62 16 16 16 1
Slide 30: 2020 Estimated Capital Expenditures
2020 Estimated Capital Expenditures 30 (1) Total 2020 estimated capital expenditures includes approximately $1 million of growth-related projects that will require additional approvals before commencement (2) Includes total 2020 estimated RDU capital expenditures of between $15 and $19 million Maint
Slide 31: Simplified Organizational Structure
Simplified Organizational Structure 31 Public 29% 71% Public 34.1% 65.9% 64.9% 35.1% Non-Economic General Partner Interest Non-Economic General Partner Interest 50% 40% Enable South Central Pipeline, LLC Nitrogen Fertilizer Segment Icahn Enterprises L.P. and Affiliates Petroleum Segment CVR Energy,