Cvr Energy Inc. · NYSE:CVI
Cvr Energy — Investor Presentation (September 2021)
32 slides from Cvr Energy's investor presentation, Sep 8, 2021
Slide 1: September 2021 Investor Presentation
September 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 Minimize 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/year o
Slide 8: Petroleum Segment
PETROLEUM SEGMENT
Slide 9: Asset Footprint
Asset Footprint 9 Mid-Continent Refineries Nameplate crude oil capacity of 206,500 bpd across two refineries • 2Q21 total throughput of 216,626 bpd • 2020 total throughput of 183,295 bpd(1) Average complexity of 10.8 Located in Group 3 of PADD II Crude Oil Sourcing Optionality ➢ Refineries are strat
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 53.6% Distillate 40.9% Other (5) 5.5% Regional Crude 44.3% WTI 31.6% WTL 2.9% Condensate 8.2% Heavy Canadian (3) 0.5% Other (4) 12.5% High-Quality Refining Assets Total Throughput(1) Total Production(1) Consolidated Top Tier Refining Margin(1) Consolidated Low Cost Operator(2) (1) Based on
Slide 12: Improving Macro Environment
Improving Macro Environment 12Source: EIA, Magellan Mid Con Supply and Demand Fundamentals Trending Similar to US Average US Gasoline Demand Magellan System Gasoline Demand US Diesel Demand Magellan System Diesel Demand
Slide 13: Improving Macro Environment
Improving Macro Environment 13Source: EIA, Magellan Mid Con Supply and Demand Fundamentals Trending Similar to 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 August 31, 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 Gasol
Slide 15: Renewable Diesel Initiatives
Renewable Diesel Initiatives 15 Potential Multi-Phase Project(1) Utilizing Existing Assets at Both Refineries • Convert the existing hydrocracker at Wynnewood to Renewable Diesel service, while retaining the optionality to switch back to traditional petroleum processing • Retool the Wynnewood Refine
Slide 16: Renewable Diesel Initiatives: KSAAT Project at Wynnewood
Renewable Diesel Initiatives 16 KSAAT Project at Wynnewood Phase 1 Under Construction(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 or pre-treated corn oil to produce
Slide 17: Renewable Diesel Project Economics and Sensitivities
Renewable Diesel Initiatives 17 KSAAT Project at Wynnewood Phase 1 Project(1) 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 Biodiesel RINs generated
Slide 18: Capital Expenditures and Turnarounds
$0 $50 $100 $150 $200 $250 2016 2017 2018 2019 2020 2021e $ M Environmental & Maintenance Growth Capital Expenditures and Turnarounds 18Note: As of March 31, 2021 2021 Petroleum Segment and RDU Capex of $196 - $207M Environmental and Maintenance spending planned at $60M to $65M for FY21. Growth cape
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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
➢ Fertilizers represent approximately 15% of farmers’ cost structure and significantly improves yields. ➢ USDA projecting stocks to use ratio for 2020/2021 at approximately 7%, its lowest level in the past decade ➢ Since the beginning of 2021 UAN prices have risen over $150/ton. 21 U.S Nitrogen Supp
Slide 22: Strong Demand for Corn in the U.S.
22 Strong Demand for Corn in the U.S. Increasing Corn Consumption is Positive for Nitrogen Fertilizer Demand ➢ 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 ▪
Slide 23: Corn and Fertilizer Price Developments
➢ USDA estimates of 91 million corn acres planted and yields of 172 bushels per acre imply a carryout of 9.2%, the lowest since 2014 ➢ Corn prices continued to increase, reaching over $7/bu driven by strong Chinese and domestic ethanol demand and poor South American crop conditions ➢ High grain pric
Slide 24: Strategically Located Assets
24 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 25: Key Operating Statistics
UAN 68% Ammonia 26% Urea Products 6% 25 Key Operating Statistics Consistent High Utilization at Both Company-owned Facilities Consolidated Production Volumes(1) Consolidated Ammonia Utilization(2) Consolidated Feedstock Costs(1) Consolidated Sales Revenue(1)(3) (1) For the last twelve months ended J
Slide 26: Capital Expenditures and Turnaround Expenses
Capital Expenditures and Turnaround Expenses 26Note: As of March 31, 2020 2021 Total Capex budget of $27M - $31M Environmental and Maintenance spending planned at $20M - $22M Growth capex budgeted at $7M - $9M ➢ Growth capex budget includes Urea/UAN expansion projects at Coffeyville 2021 Turnaround
Slide 27: Appendix
APPENDIX
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures 28 Adjusted EBITDA –EBITDA adjusted for certain significant non-cash items and items that management believes are not attributable to or indicative of our on-going operations or that may obscure our underlying results and trends. Direct Operating Expenses per Throughput B
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures 29Note: All amounts on this slide are adjusted for the turnaround accounting change effective in 1Q19. These amounts are unaudited Petroleum Segment (In USD Millions) CVR Energy, Inc. 2016 2017 2018 2019 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 TTM Net Income 10$ 258$ 366$ 36
Slide 30: Non-GAAP Financial Measures: CVR Partners, LP
Non-GAAP Financial Measures 30 (In USD Millions) CVR Partners, LP 2016 2017 2018 2019 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 TTM Net Income (loss) (27)$ (73)$ (50)$ (35)$ (98)$ (19)$ (17)$ (25)$ 7$ (54)$ Add: Interest expense and other financing costs, net of interest income 49 63 62 62 63 16 16 16 23
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,