Cvr Partners, Lp · NYSE:UAN
Cvr Partners, Lp — MLP Infrastructure Conference (August 2011)
34 slides from Cvr Partners, Lp's conference presentation, Aug 24, 2011
Slide 1: MLP Infrastructure Conference
MLP infrastructure confrence
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: CVR Partners, LP Company Overview
Cue Partners, LP Company Overview
Slide 4: CVR Partners overview and offering summary
NYSE Ticker: UAN Total units with over-allotment: 22.1m common units (30.2%) Pricing: $16 per LP unit ($3 higher than original midpoint) March 31, 2012 LTM estimated distribution/yield: $1.92 per unit / 12% Use of proceeds: Buy the GP and extinguish IDR’s, distribution to Coffeyville Resources, gene
Slide 5: Key Strategic Factor: Experienced management team
Key Strategic factor Experienced management team
Slide 6: Management team
Byron Kelley CEO Stan Riemann COO Kevan Vick EVP & GMNitrogenManufacturing BillWhite VP Marketing Neal Barkley VP & Fertilizer FacilityManager Years Experience: 41 Years Experience: 37 Years Experience: 36 Years Experience: 30 Years Experience: 34
Slide 7: LTM Q2 2011 tons sold by state
1) Adjusted for major scheduled turnaround, third-party outage on air separation unit and UAN vessel rupture. WA OR CA NV ID MT WY UT CO AZ NM TX OK KS NE SD ND MN IA MO AR LA WI IL Fertilizer Plant Corporate Headquarters LTM Q2 2011 Tons Sold by State 100,000+ 10,000 to 100,000 Up to 10,000
Slide 8: LTM Q2 2011 total tons sold and rail distribution
LTM Q2 2011 Total Tons Sold ~ 738,000 8 WA OR CA NV ID MT WY UT CO AZ NM TX OK KS NE SD ND MN IA MO AR LA WI IL Additional Shipments East of the Mississippi Rail Distribution LTM Q2 2011 Tons Sold by State 100,000+ 10,000 to 100,000 Up to 10,000 Corporate Fertilizer Plant Headquarters LTM Q2 2011 To
Slide 9: Abundant supply of third-party pet coke in the region
Abundant Supply of Third-Party Pet Coke in the Region 9 Texas Gulf Coast Coke Production = 40,000 tons/day Source: Oil & Gas Journal 56% 57% 59% 57% 69% 62% 62% 60% 57% 53% 46% 44% 43% 41% 42% 38% 38% 39% 41% 43% 47% 54% Consumption Net Exports Source: EIA. U.S. Pet Coke Exports and Consumption Y924
Slide 10: Per capita consumption of meat
df 0 50 100 150 200 250 Per Capita Consumption of Meat (lbs per year) 1965 1998 2030 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Australia Canada USA Brazil India 1980 1990 2000 2008 (31%) (33%) (14%) (42%(26%) )
Slide 11: Market Fundamentals: Key Growth Factors
Market Fundamentals Key Growth Factors 1 Fertilizer consumption is driven by: — Population growth — Decrease in farmland — Income growth in emerging markets, preference for proteins — Ethanol production n
Slide 12: World population and declining farmland per capita
0 1 2 3 4 5 6 7 8 9 10 1950 1970 1990 2010 2030 2050 Billions World Population: 1950-2050 (Hectares per Person) Source: USDA, Census Bureau, World Bank, http://data.worldbank.org/indicator/AG.LND.ARBL.HA.PC % Change: Declining Farmland Per Capita 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Milli
Slide 13: Global fertilizer consumption and natural gas prices
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 0 50 100 150 200 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 (Millions ofMetric Tonnes) Global Fertilizer Consumption Over Time Nitrogen Phosphate Potash Note: Nutrient Tonnes; Fertilizer Years. Source: International Fertilizer Industry Associa
Slide 14: Historical U.S. nitrogen production and consumption
(4,000) (2,000) - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2000 2004 2008 2012 2016 Production Imports Exports Consumption (000 Tonnes N) Historical U.S. Nitrogen Production and Consumption Source: Fertecon
Slide 15: Supply rationalization and consolidation
Market Fundamentals eur Supply Rationalization and Consolidation Historical US. Nitrogen Production and Consumption i Between 1999 to 2010, U.S. nitrogen << fertilizer capacity was reduced by 34% as 18000 producers shut down less attractive plants 14000 Hl Industry has also consolidated significantl
Slide 16: Corn prices, farmer input costs and fertilizer prices
Corn Spot Prices Breakdown of U.S. Farmer Total Input Costs Input Costs and Prices per Bushel ($) 2.60 3.68 3.53.10 1 2.97 0 1 2 3 4 5 6 7 8 2005 2006 2007 2008 2009 Other Variable Costs 13% Seed and Chemicals 17% Fixed Costs 48% Avg. % Total of Cost: Corn Futures Prices: 30 Day: $6.96 12 Month: $7.
Slide 17: UAN demand and supply
9,542 15,465 12,500 19,667 7,424 15,714 9,925 19,745 - 5,000 10,000 15,000 20,000 25,000 U.S. World U.S. World Thousands of UAN Tons Demand Supply 2010 2011
Slide 18: UAN demand growth
Market Fundamentals UAN Demand Growth vow sassy 0708 : 11 US. Demand for AN i tsa sar i grows by 31% from 2010 3 ism to 2020 4 soso i 1 Us. import of UAN = remains 21% of total =a demand in 2020 210 mn my eis
Slide 19: Growth Opportunities
Growth Opportunities
Slide 20: UAN upgrading capacity
Current 12-24 Months 3-5 years Y92455_23 Ex. 99.1.pdf (000’s Tons of UAN) UAN Upgrading Capacity 1) Excludes $5MM of capitalized interest
Slide 21: Growth Opportunities: UAN Expansion Capability
Growth Opportunities UAN Expansion Capability IUAN Expansion Project — Increase exposure to strong UAN market dynamics — Expand UAN capacity by 400,000 tons per year or by ~50% — Provides flexibility to upgrade 100% of ‘ammonia to UAN — On-line in Q1 2013 Approximately $100MM cost to complete!) At c
Slide 22: Growth Opportunities: Distribution
* Integer Focus Report 2011: The Emerging DEF Market Y92455_25 Ex. 99.1.pdf Growth Opportunities Distribution
Slide 23: Growth Opportunities: Distribution
Growth Opportunities ae Distribution @ Logistic assets are key to enhancing annual margin during the shift between application and fill season ™@ Target 60,000 — 70,000 tons per year of sales through off premise storage facilities by 2013 @ Net margin increased by $15 per ton
Slide 24: Financial Statistics
Financial Statistics
Slide 25: Net sales, EBITDA, pricing and capital expenditures
128 65 30 63 - 25 50 75 100 125 150 2008 2009 2010 LTM Q2 2011 EBITDA — Maintenance CAPEX (No Debt)(3) 1) Plant gate price per ton represents net sales less freight costs and hydrogen revenue (from hydrogen sales to CVR Energy’s refinery) divided by product sales volume in tons in the reporting peri
Slide 26: Illustrative EBITDA sensitivity to UAN and ammonia prices
1) Based on projected next twelve months 3/31/12 cost structure as provided in our prospectus dated April 7, 2011. 2) Based on 5 year average Ammonia and UAN spot prices of $467/ton and $292/ton respectively and forecasted next twelve months cost structure. EBITDA(1) ($MM) Illustrative EBITDA Sensit
Slide 27: Forecasted distributable cash
Financial Statistics Forecasted Distributable Cash_ Illustrative EBITDA Sensitivity to UAN and Ammonia Prices!) ‘aroa Gu 250 ieee = | oneenenncnen teense ey af _- Be . | ree peton8)
Slide 28: Summary
Summary i Strong Industry Fundamentals | High Quality, Strategically Located Assets 1 Premium Product Focus @ Attractive Growth Opportunities @ Pay out 100% of Available Cash Each Quarter to Common Unitholders. @ No IDR’s 1 Experienced Management Team
Slide 29: Q&A
Q&A
Slide 30: Appendix
Appendix
Slide 31: Plant process flow
Linde Air Separation Unit UAN Product Ammonia Product Slag Gasifier (2 Units) Ammonia Synthesis UAN Synthesis Nitrogen Oxygen Syngas (Hydrogen) Ammonia Coke Hydrogen HydrogeCoke n Third- Party Coke Supplies CVR Energy’s Oil Refinery Y92455_34 Ex. 99.1.pdf
Slide 32: 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 33: EBITDA definition
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 34: Reconciliation of net income to EBITDA
Below is a reconciliation of Net Income to EBITDA (In USD Millions) 2008 2009 2010 LTMQ2 2011 Net Income $118.9 $57.9 $33.3 $62.2 Interest expense — - — - Interest (income) (2.0) (9.0) (13.1) (5.3) Depreciation and amortization 18.0 18.7 18.5 18.5 Income tax expense — - — - EBITDA $ 134.9 $ 67.6 $38
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