Cvr Energy Inc. · NYSE:CVI
Cvr Energy — Investor Presentation (August 2011)
27 slides from Cvr Energy's investor presentation, Aug 8, 2011
Slide 1: CVR Energy, Inc.
Ss ee < 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 – Rated capacity of 1,225 tpd Market Cap(1) — $2.0 billion Market Cap(1) — $1.6 billion ammonia; 2,025 tpd UAN CVI owns ~ 70% Nitrogen fertilizer using pet coke gasification Crude slate flexibility PADD IV 4 PADD
Slide 4: Recent developments
• Received first Canadian barrels on Keystone pipeline • Refinanced revolver in petroleum segment • Completed IPO of fertilizer segment in a simplified MLP structure • Completed $150mm credit facility to support MLP growth capital • Private equity shareholder “overhang” removed • Added management to
Slide 5: Cushing In-Flows vs. Outflows
Cushing In-Flows vs. Outflows Canada Pipelines In-bound Pipelines Out-bound (In Thousands) Capacity (In Thousands) Capacity Keystone (Current) ~ 590 Outbound ~ 600 Clearbrook North Dakota Keystone XL: (Proposed) ~ 110 Keystone XL: ~ 500 Minnesota (Proposed) Spearhead ~ 200 Monarch Wisconsin ~ 350 BP
Slide 6: NYMEX 2-1-1 and Brent-WTI Differential
Tulsa Oklahoma 40 City Oklahoma Arkansas 30 Wichita Falls 20.6 20 10 Corsicana Louisiana /Barrel 0 Midland Texas $
Slide 7: Canadian oil production and refining utilization
-10 Nederland Houma Houston Sugar Land 1/1/2010 2/1/2010 3/1/2010 4/1/2010 5/1/2010 6/1/2010 7/1/2010 8/1/2010 9/1/2010 10/1/2010 11/1/2010 12/1/2010 1/1/2011 2/1/2011 3/1/2011 4/1/2011 5/1/2011 6/1/2011 7/1/2011 8/1/2011 Freeport NYMEX 2-1-1 Brent-WTI Differential (EB-CL) 4 4444 Total Canadian oil
Slide 8: CVR Barrels Sold and Group 3 Basis
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 Year Total 10 Year Average = $1.57 / bbl $10 Added Terminals $8 5 Year Average = $1.95 / bbl $6 Pre-2006 2 $4 2006 8 2007 17 /Barrel $2
Slide 9: Crude gathering system map
Canada Bakken Montana Clearbrook Big Timber North Dakota Minnesota Jackson Wisconsin Wyoming South Dakota Sioux Falls Sioux City Iowa Nebraska Flanagan Salt Lake City Des Moines Omaha Utah DJ Illinois Colorado Phillipsburg Denver Basin Plainville Kansas Topeka Kansas City Valley Center Humboldt Wich
Slide 10: Refining & Marketing and Nitrogen Fertilizer assets
Refining & Marketing and Nitrogen New Mexico Oklahoma Arkansas Fertilizer Coffeyville Resources Refined Fuel Wichita Falls Products / Asphalt Terminal Coffeyville Resources Crude Transportation Corsicana Louisiana Offshore Deepwater Crude Midland Foreign Crude Texas Nederland Houma Coffeyville Resou
Slide 11: Crude gathered per day and CO2 agreement
North Dakota South Dakota Nebraska Total Consumed Crude Discount to WTI $3 Colorado Kansas $2 Missouri $1 $0 ($1) /bbl Oklahoma ($2) $ ($3) ($4) ($5) ($6) Texas ($7) Corporate Refining Operations Headquarters Barrels Gathered Per Day – LTM Q2 2011 • Twenty year off-take agreement for 850,000 annual
Slide 12: Nitrogen Fertilizer MLP
<= Nitrogen Fertilizer MLP Energy.
Slide 13: Fertilizer consumption drivers
• Fertilizer consumption is driven by: Global Fertilizer Consumption Over Time (Millions of Metric Tonnes) (Population in Millions) • Population growth 200 8,000 • Decrease in farmland • Income growth in emerging 7,000 markets, preference for proteins 150 6,000 • Ethanol production 5,000 • Nitrogen
Slide 14: World grain production and farmland per capita
• World demand for grain has increased significantly, leading to increases in grain prices – USDA projects 2011 U.S. grain stocks to be at 15-year lows • Grain production is directly tied to nitrogen fertilizer applications • Farmland per capita is declining World Grain Production and Stock to Use R
Slide 15: Corn prices and farmer input costs
• 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 16: Financial Highlights
Financial Highlights
Slide 17: Adjusted Operating EBITDA and cash flow
Adjusted Operating EBITDA (1) Cash Flow $ in TTM TTM TTM TTM Thousands 6/30/10 6/30/11 6/30/10 6/30/11 Petroleum 61,777 402,523 (31,488) 298,340 Fertilizer 43,056 94,318 64,977 96,523 Total Consolidated 96,995 469,665 Adjusted EBITDA (1) 39,469 342,399 Cash to Cash Waterfall $1,000 $900 $55 $72 $800
Slide 18: Year-end net debt / cash
Year—End Net Debt / Cash $ Millions 500 Net Cash 1$ 153 0 3 3 5 4 (500) Net (1,000) Debt (1,500) (2,000) 2007 2008 2009 2010 2011 Q2 1 CVI Ranking Relative to Peers Peer range*: ALJ, HFC, 1 being the highest net cash WNR, TSO, DK *Note: Holly & Frontier Historical Data as Reported (1) Proforma balan
Slide 19: Capital spending summary
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 $10.3 $3.4 $1.6 $
Slide 20: Operating expense per barrel of crude
Q2 2011 LTM CVI Operating Expense (a) per Barrel of Crude Operating Expense(a) per Barrel of Crude $4.00 $6.90 $7.00 $3.80 $6.10 $3.60 $6.00 $5.41 $4.81 $3.40 $5.00 $4.01 $3.20 $3.91 $3.00 $4.00 $2.80 $3.00 $2.60 $2.00 $2.40 $2.20 $1.00 $2.00 $0.00 2008 2009 2010 LTM Q2 CVI ALJ FTO (b) HOC WNR TSO 2
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: 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 (