Cvr Energy Inc. · NYSE:CVI
Cvr Energy — Investor Presentation (May 2021)
32 slides from Cvr Energy's investor presentation, May 11, 2021
Slide 1: May 2021 Investor Presentation
May 2021 Investor Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 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 unde
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 Improve EH&S Performance Focus on Crude Oil Quality & Differentials Reduce our RIN Exposure Reduce Lost Opportunities Continuing to improve in all Environmental, Health and Safety matters -
Slide 6: Capital Allocation Strategy
Capital Allocation Strategy 6 Non-Discretionary Asset Continuity Safety, reliability and environmental compliance are core to CVR’s management philosophy • Approximately $100MM in annual sustaining and regulatory capex, allocated to assets through a continuous assessment process. • Run-rate annual r
Slide 7: Environmental, Social & Governance (ESG) Highlights
Governance SocialEnvironmental Environmental, Social & Governance (ESG) Highlights 7 In Process of Creating First ESG Report o Reduced consolidated criteria pollutant emissions by 20% from 2015 to 2019 o Commenced construction on renewable diesel unit designed to produce approx. 100mm gallons per yr
Slide 8: Petroleum Segment
PETROLEUM SEGMENT
Slide 9: Asset Footprint: Mid-Continent Refineries
Asset Footprint 9 Mid-Continent Refineries Nameplate crude oil capacity of 206,500 bpd across two refineries • 1Q21 total throughput of 186,093 bpd(1) • 2020 total throughput of 183,295 bpd(2) Average complexity of 10.8 Located in Group 3 of PADD II Crude Oil Sourcing Optionality ➢ Refineries are st
Slide 10: Strategically Located Mid-Con Refineries Marketing Network
Strategically Located Mid-Con Refineries 10 Marketing Network Optionality Multiple Takeaway Options Provide Product Placement Flexibility ➢ Marketing activities focused in central mid- continent area via rack marketing, supplying nearby customers and at terminals on third- party distribution systems
Slide 11: High-Quality Refining Assets
Gasoline 53.8% Distillate 40.8% Other (5) 5.4% Regional Crude 47.2% WTI 30.2% WTL 3.0% Midland WTI 0.4% Condensate 7.9% Heavy Canadian (3) 0.2% Other (4) 11.1% High-Quality Refining Assets Total Throughput(1) Total Production(1) Consolidated Top Tier Refining Margin(1) Consolidated Low Cost Operator
Slide 12: Improving Macro Environment: Demand
Improving Macro Environment 12Source: EIA, Magellan Mid Con Supply and Demand Fundamentals Trending Better than US Average US Gasoline Demand Magellan System Gasoline Demand US Diesel Demand Magellan System Diesel Demand
Slide 13: Improving Macro Environment: Inventories
Improving Macro Environment 13Source: EIA, Magellan Mid Con Supply and Demand Fundamentals Trending Better than US Average US Gasoline Inventories Magellan System Gasoline Inventories US Diesel Inventories Magellan System Diesel Inventories
Slide 14: Improving Macro Environment: Crack Spreads
Improving Macro Environment 14Source: MarketView as of May 5, 2021 Crack Spreads Have Improved With Product Demand Recovery and Inventory Declines 2-1-1 Crack Spreads & Brent-WTI Differentials ($/bbl) Midland-Cushing and WTL-WTI Differentials ($/bbl)WCS – WTI Differential ($/bbl) WTI-Based Gasoline
Slide 15: Progressing Renewable Diesel Project
Progressing Renewable Diesel Project(1) 15 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 16: Renewable Diesel Project: KSAAT Project at Wynnewood
Progressing Renewable Diesel Project(1) 16 KSAAT Project at Wynnewood Full Board Approval 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 soybean oil to produce renewable d
Slide 17: Renewable Diesel Project Economics and Sensitivities
Progressing Renewable Diesel Project(1) 17 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) ➢ RINs prices (1.7 D4 Biodiese
Slide 18: Capital Expenditures and Turnarounds
Capital Expenditures and Turnarounds 18Note: As of March 31, 2021 2021 Petroleum Segment and RDU Capex of $209 - $220M Environmental and Maintenance spending planned at $85M to $90M for FY21. Growth capex estimated at $124M to $130M. ➢ Substantially all budgeted growth capital spending for 2021 is r
Slide 19: Fertilizer Segment
FERTILIZER SEGMENT
Slide 20: Stable Trends in Fertilizer Demand
20 Stable Trends in Fertilizer Demand Source: Fertecon, World Bank Global nitrogen consumption increased by 15% between 2009 and 2020 driven by: ➢ Population growth ➢ Decrease in arable farmland per capita ➢ Biofuel consumption ➢ Continued evolution to more protein-based diets in developing countrie
Slide 21: U.S. Nitrogen Supply & Demand
➢ Nitrogen fertilizers represent approximately 15% of farmers’ cost structure and significantly improves yields. ➢ USDA projecting stocks to use ratio for 2020/2021 at approximately 9%, its lowest level since 2014. ➢ Since the beginning of 2021 UAN prices have risen over $150/ton. 21 U.S Nitrogen Su
Slide 22: Strong Demand for Corn in the U.S.
22 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 ~38% of annual corn crop(1) ➢ Ethanol ▪ Consumes ~37% of annual
Slide 23: Strategically Located Assets
23 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 24: Key Operating Statistics
24 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 March 31, 2021. (2) Adjusted by planned turnarounds. (3) Excludes freight. Consistent High Utilization at Both
Slide 25: Capital Expenditures and Turnaround Expenses
$0 $5 $10 $15 $20 $25 $30 2016 2017 2018 2019 2020 2021e $M Maintenance Growth East Dubuque Merger on April 1, 2016 Capital Expenditures and Turnaround Expenses 25Note: As of March 31, 2020 2021 Total Capex budget of $22M - $26M Environmental and Maintenance spending planned at $18M - $20M Growth ca
Slide 26: Appendix
APPENDIX
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures 27 Available Cash for Distribution - EBITDA for the quarter excluding non-cash income or expense items (if any), for which adjustment is deemed necessary or appropriate by the board of directors (the “Board”) of our general partner in its sole discretion, less (i) reserve
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures 28Note: All amounts on this slide are adjusted for the turnaround accounting change effective in 1Q19. These amounts are unaudited Petroleum Segment (In USD Millions) CVR Energy, Inc. 2016 2017 2018 2019 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 TTM Net Income 10$ 258$ 366$ 36
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures 29 Twelve Months (In USD Millions) June 30, September 30, December 31, March 31, Ended 2020 2020 2020 2021 March 31, 2021 Consolidated Net loss (32)$ (108)$ (78)$ (55)$ (273)$ Add: Interest expense, net 31 31 32 31 125 Income tax benefit (5) (31) (23) (42) (101) Depreciat
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures 30 (In USD Millions) CVR Partners, LP 2016 2017 2018 2019 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 TTM Net Income (loss) (27)$ (73)$ (50)$ (35)$ (98)$ (42)$ (19)$ (17)$ (25)$ (103)$ Add: Interest expense and other financing costs, net of interest income 49 63 62 62 63 16 16 1
Slide 31: 2021 Estimated Capital Expenditures
2021 Estimated Capital Expenditures 31 (1) Total 2021 estimated capital expenditures includes up to approximately $1 million of growth related projects that will require additional approvals before commencement. (2) Renewables reflects spending on the Wynnewood RDU project. Amounts spent in 2020 wer
Slide 32: Simplified Organizational Structure
Simplified Organizational Structure 32 Public 29% 71% Public 34.1% 65.9% 63.6% 36.4% 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,