Cvr Energy Inc. · NYSE:CVI
Cvr Energy — Investor Presentation (September 2010)
31 slides from Cvr Energy's investor presentation, Sep 21, 2010
Slide 1: CVR Energy, Inc. - Competitively Positioned
CVR Energy, Inc. - NYSE : CVI COMPETITIVELY POSITIONED
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: CVR Energy, Inc. - A Diversified Business
CVR Energy, Inc. - A Diversified Business 3 WA OR CA NV AZ NM UT CO TX LA AR OK ID MT WY ND SD NE KS MN IA MO WI IL Phillipsburg Kansas City CoffeyvilleResources Springfield Ft. Smith Columbia Palmyra Bettendorf Iowa City Waterloo Des Moines Fort Dodge Milford Sioux Falls Sioux City Omaha Enid Oklah
Slide 4: CVR Energy Recent Evolution
CVR Energy Recent Evolution Crude and Feedstock Throughput (bpd) Crude Flexibility Complexity Rating Gathered Barrels (bpd) Refinery Upgrades Fertilizer Sold (tons per year) Fertilizer On-stream Efficiency 2005 (Acquisition Year) Launched $521 million of upgrades 10.0 98,300 No heavy sour ~7,000 Amm
Slide 5: Nitrogen Fertilizer Segment
Upgrading low-cost petroleum coke to high-value nitrogen fertilizers Nitrogen Fertilizer Segment 5 Geographic advantage - located in mid-continentHigh on-stream reliability - dual gasifiersSignificant feedstock cost advantage versus natural gas producers
Slide 6: CVR Fertilizer Operations - A Competitive Advantage
Tons of Fertilizer Sold in 2009 CVR Fertilizer Operations - A Competitive Advantage Plant located on Union Pacific mainlineAnnual production averages 155,717 tons of net ammonia 678,701 tons of UAN2010 6-month on-stream efficiencyGasifier: 97% (1)Ammonia: 96%UAN: 93% Urea Imports: Gulf Coastand Tamp
Slide 7: CVR Fertilizer is a Fixed Cost Business
Gas conversion: 34 MMBtu/ton (e.g., $3.50 x 34 MMBtu = $119).Incremental supply is imported from U.S. Gulf Coast. Transportation to Mid-Continent is to provide comparison to CVR location cost.Coke-to-ammonia conversion: 1.1 tons of coke / 1 ton of ammonia. CVR Fertilizer Ammonia Production Costs - 2
Slide 8: Nitrogen Fertilizer Plant Overview and Process
Nitrogen Fertilizer Plant Overview and Process Third- Party Coke Suppliers CVR Energy's Oil Refinery Ammonia UAN Slag Gasifier (2-Units) Ammonia Synthesis Loop UAN Synthesis Loop Syngas (Hydrogen) Ammonia Coke Coke Hydrogen Hydrogen Oxygen Nitrogen Linde Air Separation Unit Coke gasification technol
Slide 9: Nitrogen Fertilizer Outlook
Nitrogen Fertilizer Outlook U.S. Planting Projections (CHART) Source: USDA- NASS 9
Slide 10: Nitrogen Fertilizer - An Import Market
Nitrogen Fertilizer - An Import Market U. S. Nitrogen Fertilizer Imports Source: FERTECON (CHART) 10 Imports
Slide 11: Nitrogen Fertilizer - Production / Inventory
Nitrogen Fertilizer - Production / Inventory (CHART) Source: USDA- NASS U.S. Corn Market Statistics 11
Slide 12: Petroleum Segment
12 Complex full coking refiner with strategic complementary assets Petroleum Segment Benefit from PADD II Group 3 locationSignificant operational flexibilityFeedstock supported by owned crude gathering and pipeline systems
Slide 13: Petroleum Segment - Market Advantage
Petroleum Segment - Market Advantage Refining Operations and Crude Gathering Average 1H 2010 throughput Crude: 109,300 bpdFeedstock: 8,200 bpd 13 Phillipsburg Kansas City CoffeyvilleResources Springfield Ft. Smith Columbia Palmyra Bettendorf Iowa City Waterloo Des Moines Fort Dodge Milford Sioux Fal
Slide 14: Strategic Mid-Continent Location Advantage
Strategic Mid-Continent Location Advantage Product Market Area(a) Product Market Area(a) Petroleum businessPurchases crude at discount to WTI Historic Positive product basis differential due to location 14 Per Oil and Gas Journal. (CHART) Basis Averages10 Year Average = $1.69 $ / bbl 2001 - 2004 Ave
Slide 15: Completed Major Capital Project & Upgrades
Completed Major Capital Project & Upgrades Refinery and Fertilizer Plant Expansion and optimizationInfrastructure upgradesCoker upgradesHydrotreating expansion/ULSDContinuous Catalytic Reformer (CCR)Ultra Low Sulfur Gasoline (ULSG) 15
Slide 16: Crude Oil Supply and Pipeline Network
Coffeyville Resources Refining & Marketing and Nitrogen FertilizerCoffeyville Resources Refined Fuel Products / Asphalt TerminalCoffeyville Resources Crude TransportationOffshore Deepwater CrudeForeign CrudeCoffeyville Resources Crude Oil PipelineThird-Party Crude Oil PipelineCVR Energy Headquarters
Slide 17: Throughput and Product Flexibility
Throughput and Product Flexibility Crude Throughput Slate (% of total crude throughput) 76,317 105,837 108,226 109,308 Representative Major Crude Throughput Slate Types 2007 - 2010 Representative Major Crude Throughput Slate Types 2007 - 2010 Representative Major Crude Throughput Slate Types 2007 -
Slide 18: Flexible Product Slate
Flexible Product Slate (% of refining production) 82,382 118,531 120,767 6% Flexibility 118,406 Throughput and Product Flexibility bpd 18 (CHART) (CHART) High value other products *Refinery averages 2.4 mscf/day of excess hydrogen (13k tons of ammonia).
Slide 19: Crude Gathering Provides Pricing Advantage
Crude Gathering Provides Pricing Advantage Phillipsburg Valley CenterStation Winfield Plainville Hooser Station Broome Station Humboldt Coffeyville East Tank Farm CushingPlains/TEPPCO Bartlesville Shidler 55k 2,700k 660k 160k 75k 200k 10k 40k 20k 20k Jayhawk/Kaw Pipeline system 150 miles 67 miles 23
Slide 20: Financial Segment
20 Driving shareholder value through prudent management of our balance sheet and operational excellence Financial Segment
Slide 21: Credit Summary
Credit Summary Credit Rating and OutlookCorporateMoody's : B1, stableS&P: B, stable1st Lien senior notesMoody's : Ba3S&P: BB-2nd Lien senior notesMoody's : B3S&P: BB- Credit Facilities$150mm Cash flow revolver$119mm net availability at 8/31/2010Covenant light facility 21 (CHART) Note: A security rat
Slide 22: 2009 EBITDA - A Diversified Business
(CHART) 2009 EBITDA($ in millions) $214 $222 $332 $231 $27 $607 Refining Industry EBITDA($ in millions) $149 $243 $214 $104 CVR Energy CVR Energy, Inc. - A Diversified Business 22 33%[$71] [$143] [$222] [$136] [$95] [$291] [$25] [$485] [$122] [$21] [$6] [$16] Note: Segment EBITDA adjusted for alloca
Slide 23: Capital - History is our Strength
Capital - History is our Strength 23 Total Annual Capital$285.4 mm was spent in 2005 & 2006 *Represents ongoing maintenance capital, environmental and AFE expenses, Annual Maintenance / EH&S Capital - No Significant Regulatory Capital Left to Spend (CHART) $42.9mm* $41.8Total $50.2Total $36.8Total $
Slide 24: Liquidity / Strategy
Liquidity / Strategy IntermediatedBarrel Lease 2009 Total Crude Purchased40.3mm Barrels Capital Structure StrategyDebt / Capital 25 - 35%First Lien Debt / EBITDA < 2.0X $286mm of Liquidityas of August 31, 2010 24 (CHART)
Slide 25: Petroleum - What Drives Profitability
Petroleum - What Drives Profitability 25 Gross Realized Refining Margin ($/bbl) Group 3 PADD II Basis Over NYMEX ($/bbl) Crude Differential (WTI Minus) ($/bbl) (CHART) $0.33 (CHART) $3.18 * 10 year basis average is $1.69 per bbl (CHART) * Realized refining margins are adjusted for FIFO impacts.
Slide 26: CVR EBITDA by Operating Segment
CVR EBITDA by Operating Segment ($mm) LTM Refining Industry Operating Expenses ($/bbl)(a) CVR Operating Expense Note: Segment EBITDA excludes unallocated corporate expenses. EBITDA and margins adjusted for FIFO gains / losses, unrealized gains / losses, major turnaround costs, flood expenses, non-ca
Slide 27: CVR Fertilizer is a Fixed Cost Business: Fixed vs. Variable Costs
Total Fixed79% Total Variable7% 2009 Detailed Fixed vs. Variable Cost Analysis CVR Fertilizer is a Fixed Cost Business 27 On-stream factor is the total number of hours operated divided by the total number of hours in the reporting period, excluding the impact of turnarounds and the flood at the fert
Slide 28: Non-GAAP Measures Definitions
28 To supplement the actual results in accordance with U.S. generally accepted accounting principles (GAAP) for the applicable periods, the Company also uses non-GAAP measures as discussed below, which are adjusted for GAAP-based results. The use of non-GAAP adjustments are not in accordance with or
Slide 29: FIFO and EBITDA Definitions
29 First-in, first-out (FIFO): The Company's basis for determining inventory value on a GAAP basis. Changes in crude oil prices can cause fluctuations in the inventory valuation of our crude oil, work in process and finished goods, thereby resulting in favorable FIFO impacts when crude oil prices in
Slide 30: Reconciliation of Refining Margin to Adjusted for FIFO
30 Use of Non-GAAP Financial Measures Below is a reconciliation of Refining Margin to Refining Margin Adjusted for the impact of First-In, First-Out (FIFO) accounting
Slide 31: Reconciliation of Operating Income to Adjusted EBITDA
31 Use of Non-GAAP Financial Measures Below is a reconciliation of Operating Income to Adjusted EBITDA, by segment Petroleum Petroleum Petroleum Petroleum Petroleum Petroleum Petroleum (in millions) (in millions) (in millions) (in millions) (in millions) (in millions) YTD 6/30/10 LTM 6/30/10 2009 20