Cvr Energy Inc. · NYSE:CVI
Cvr Energy — Investor Presentation (October 2011)
27 slides from Cvr Energy's investor presentation, Oct 13, 2011
Slide 1: CVR Energy, Inc. NYSE: CVI and UAN
CVR ENERGY, INC. NYSE: CVI and UAN
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: Diversified in mid-continent
Diversified in mid-continent — 115k bpd high complexity refinery NYSE — CVI NYSE — UAN — A Nitrogen fertilizer plant using Market Cap(1) — $2.1 billion Market Cap(1) — $1.6 billion pet coke gasification, rated CVI owns ~ 70% capacity of 1,225 tpd ammonia; 2,025 tpd UAN Nitrogen in PADD IV 4 PADD 2 O
Slide 4: Refining & Fertilizer Utilization, Capital Expenditures, Market Cap
Refining & Fertilizer Utilization1 Capital Expenditures 100% 554 $M 600 95% 90% $M 400 86 144 85% $M 200 49 32 80% 75% $M 0 Prior to 2008 2009 2010 2011E 70% 2008 Petroleum Nitrogen Other 2008 2009 2010 2011FH Gasifier Ammonia UAN Refinery Utilization Market Cap / Operating cash flow NYMEX 211 & Bre
Slide 5: Cushing In-Flows vs. Outflows
Cushing In-Flows vs. Outflows Pipelines In-bound Pipelines Out-bound Canada (In Thousands) Capacity (In Thousands) Capacity Keystone ~ 590 Clearbrook Outbound ~ 600 North Dakota Spearhead ~ 200 Minnesota Total Current ~ 600 BP/Basin ~ 450 Keystone XL: Wisconsin ~ 700 South Dakota (Proposed) Seaway ~
Slide 6: Refinery Utilization and Magellan Pipeline Inventories
100.0 95.0 88.7 86.1 84.7 81.7 90.0 82.1 85.0 Utilization 80.0 75.0 Percent 70.0 65.0 60.0 2007 2008 2009 2010 2011 1H PADD 1 PADD II PADD III PADD IV PADD V Average Source: EIA Magellan Pipeline Inventories Magellan Pipeline Inventories Gasoline Prior 4 Year Average ULS Diesel Prior 4 Year Average
Slide 7: CVR Barrels Sold and Terminals
CVR Barrels Sold 127,142 110,860 140,000 104,476 120,000 100,000 bpd 80,000 60,000 40,000 20,000 — 2006 2010 2011 YTD PADD II — Group 3 Basis CVR Market Terminals $12 Total 10 Year Average = $1.57 / bbl Year $10 Added Terminals $8 5 Year Average = $1.95 / bbl Pre-2006 $6 2 $4 2006 8 2007 17 /Barrel
Slide 8: Crude Gathering and Discount to WTI
North Dakota South Dakota Nebraska Total Consumed Crude Discount to WTI $3 Colorado 3 year average is 3.44 Kansas Missouri $2 $1 $0 ($1) /bbl Oklahoma ($2) $ ($3) ($4) ($5) ($6) Texas ($7) Corporate Refining Operations Headquarters Barrels Gathered Per Day — LTM Q2 2011 15,000+ Up to 10,000 Up to 1,
Slide 9: Nitrogen Fertilizer MLP
= Nitrogen Fertilizer MLP Eneroy.
Slide 10: Strategically Located Assets & Logistics
Strategically Located Assets & Logistics WA MT ND MN OR WI ID SD WY IA NE NV CA IL UT CO KS MO NM AR AZ OK TX LA Additional Shipments East of the Mississippi Corporate (1) As of August 4, 2011 Rail Distribution Fertilizer Plant Headquarters LTM Q2 2011 Tons Sold by State 100,000+ 10,000 to 100,000 U
Slide 11: Stable & Economic Feedstock
Stable & Economic Feedstock Abundant Supply of Third-Party Pet Coke in the Region U.S. Pet Coke Exports and Consumption 38% 44% 43% 41% 42% 38% 39% 41% 43% 47% 54% Source: Oil & Gas Journal 57% 69% 62% 62% 60% 56% 59% 57% 57% 53% 46% Texas Gulf Coast Coke Production = 40,000 tons/day Consumption Net
Slide 12: Market Fundamentals — Key Growth Factors
Market Fundamentals — Key Growth Factors Declining Farmland Per Capita World Population: 1950-2050 (Hectares per Person) 10 3,500 9 3,000 8 7 2,500 6 2,000 5 Billions 1,500 4 3 1,000 2 500 1 0 0 Australia Canada USA Brazil India 1950 1970 1990 2010 2030 2050% Change: (31%) (26%) (33%) (14%) (42%) 19
Slide 13: Corn and Nitrogen Fertilizer Economics
• Corn consumes the largest amount of nitrogen fertilizer • At current & projected corn prices, farmers expected to generate significant income • Nitrogen fertilizer represents small percent of farmer’s input costs Corn Spot Prices Breakdown of U.S. Farmer Total Input Costs Input Costs and Prices pe
Slide 14: Market Fundamentals: Global Shift in Cost of Production
Market Fundamentals Global Shift in Cost of Production Natural Gas Prices — United States vs. Western Europe Natural Gas Price ($/MMBtu) $14 NBP, Britain $12 $10.33 Spot $10 $8 $6 $4 $2 Henry Hub, Louisiana $3.49 spot $- Sep’07 Feb’08 Jul’08 Dec’08 May’09 Oct’09 Mar’10 Aug’10 Jan’11 Jun’11 Nov’11 Ap
Slide 15: MLP Forecasted Available Cash
MLP Forecasted Available Cash Illustrative EBITDA Sensitivity to UAN and Ammonia Prices(1) EBITDA(1) ($MM) Forecasted NTM 5 Year Avg. Spot Prices(2) 3/31/2012 $147 UAN Ammonia 400300 450 500 550 547 600650350 700 Price per Ton ($) Net Sales 171 221 246 271 296 297321196 346 371 Available 13 63 88 11
Slide 16: Financial Highlights
Financial Highlights Eherou
Slide 17: Operating Cash Flow, Interest Coverage, Net Debt and Liquidity
YTD Q2 2011 Operating Cash Flow Per Barrel of Crude Throughput Adjusted EBITDA / Interest Coverage Ratio (1) $12.0 10.00x $8.0 8.00x $11.9 $8.6 6.00x $4.0 $6.3 8.54x $0.9 4.00x $0.0 $(2.1) 2.00x 2.19x -$4.0 0.00x HFC CVI WNR TSO ALJ LTM Q2 2010 LTM Q2 2011 Net Debt / (Net Cash) $1.1 billion of Liqui
Slide 18: Operating Expense per Barrel of Crude
Q2 2011 LTM CVI Operating Expense(a) per Barrel of Crude Operating Expense(a) per Barrel of Crude $6.90 $4.00 $7.00 $3.80 $6.10 $6.00 $5.41 $5.47 $3.60 $4.81 $3.40 $5.00 $3.20 $3.91 $3.00 $4.00 $2.80 $3.00 $2.60 $2.00 $2.40 $1.00 $2.20 $2.00 $0.00 2008 2009 2010 LTM Q2 CVI FTO (b) HOC DK WNR TSO 201
Slide 19: Adjusted EBITDA and Operating Cash to Cash Waterfall
Adjusted Operating Cash to Cash Waterfall EBITDA(1) Cash Flow $1,000 $ in TTM TTM TTM TTM Thousands 6/30/10 6/30/11 6/30/10 6/30/11 $900 $55 $72 $800 $54 $64 Petroleum 61,777 402,523 (31,488) 298,340 $700 Fertilizer 43,056 94,318 64,977 96,523 $600 $419 $500 Total Consolidated $400 D&A 96,995 469,66
Slide 20: Capital Summary
Refinery turnaround year(1) Capital Summary Prior to ($ in millions) 2007 2007 2008 2009 2010 2011E(2) Non-discretionary Petroleum $193.8 $137.3 $50.1 $30.6 $18.2 $62.5 Nitrogen 7.5 4.4 6.5 2.6 8.9 9.0 Total non-discretionary $201.3 $141.7 $56.6 $33.2 $27.1 $71.5 Discretionary Petroleum $73.0 $124.3
Slide 21: Debt Maturities and Liquidity
as of June 30, 2011 Date Closed Balance 1st Call Date Maturity Date 1st Lien 4/ 2010 $247.1 April 6, 2012 (106.75) April 6, 2015 2nd Lien 4/ 2010 $222.8 April 6, 2013 (108.15) April 6, 2017 Asset Based Loan 2/ 2011 $31.6* August 22, 2015 MLP Term Loan 4/ 2011 $125.0 April 13, 2016 MLP Revolver 4/ 20
Slide 22: Q & A
Q & A
Slide 23: Appendix
APPENDIX
Slide 24: 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-GAAP adjustments are not in ac
Slide 25: EBITDA definitions
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 included in the consolidated stat
Slide 26: Operating Income to Adjusted EBITDA by segment
Below is a reconciliation of Operating Income to Adjusted EBITDA, by segment (in thousands) TTM 6/30/10 TTM 6/30/11 Petroleum Operating income 6,844 396,241 Depreciation and amortization 65,137 67,720 Realized gain (loss) on derivatives, net 11,213 (24,600) Other income (expense) 714 325 FIFO impact
Slide 27: Consolidated Net Income to Adjusted EBITDA
TTM 6/30/10 TTM 6/30/11 (In Thousands) Consolidated Net Income attributable to CVR Energy (15,187) 196,155 Interest expense, net of interest income 42,156 53,337 Depreciation and amortization 85,671 88,002 Income tax expense (16,403) 125,770 EBITDA adjustments included in NCI - (1,589) FIFO impact (