Cvr Energy Inc. · NYSE:CVI
Cvr Energy — Investor Presentation (May 2019)
31 slides from Cvr Energy's investor presentation, May 14, 2019
Slide 1: Investor Relations May 2019
Investor Relations May 20191
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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 underl
Slide 3: CVR Energy, Inc. mission and core values
CVR Energy, Inc. (NYSE: CVI) Our mission is to be a top-tier North American petroleum refining and nitrogen-based fertilizer company as measured by safe and reliable operations, superior financial performance and profitable growth. Our core values define the way we do business every day to accomplis
Slide 4: CVR Energy overview: Petroleum and Nitrogen Fertilizer
CVR Energy, Inc. (NYSE: CVI) 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 complex refineries and assoc
Slide 5: Petroleum Segment
Slide 6: Asset Footprint
Asset Footprint Mid-Continent Refineries • Nameplate crude oil capacity of 206,500 bpd across two refineries • 1Q19 total throughput of 212,800 bpd • Average complexity of 10.8 • Located in Group 3 of PADD II Cushing & SCOOP/STACK Centric • Refineries are strategically located ~ 100 to 130 miles fro
Slide 7: Strategically Located Mid-Con Refineries
Strategically Located Mid-Con Refineries Crude Oil Supply Network Marketing Network Coffeyville Refinery Wynnewood Refinery Major Canadian Crude Oil Pipelines CVR Crude Oil Pipelines Third-Party Crude Oil Pipelines Third-Party Terminals JV Pipeline Third-Party Refined Product Pipelines CVR Crude Tra
Slide 8: High-Quality Refining Assets
High-Quality Refining Assets Consolidated Favorable High Distillate Yield (1) (2) Consolidated Low Cost Operator(2) (3) 46% $8.0 $7.0 42% $6.0 $5.0 38% $4.0 $3.0 34% $2.0 $1.0 30% $0.0 CVI VLO DK PSX HFC MPC PBF VLO MPC DK CVI PSX PBF HFC LTM 1Q19 LTM 1Q19 Total Throughput(2) Total Production(2) Hea
Slide 9: Favorable Macro Environment
Favorable Macro Environment Feedstock Supply • Increasing U.S. shale oil production • Limited Canadian pipeline and rail takeaway capacity • Access to price-advantaged crude oils such as Canadian and Regional Shales Product Demand • Global economies aligned for sustainable growth • Sustained product
Slide 10: Favorable Macro Environment: Crack Spreads and Differentials
Favorable Macro Environment 2-1-1 Crack Spreads & Brent-WTI Differentials ($/bbl) Midland-WTI & Condensate-WTI Differentials ($/bbl) $10 $30 Midland-WTI Condensate - WTI NYMEX 2-1-1 Group 3 2-1-1 Brent-WTI $5 $25 $20 $0 $15 ($5) Futures $10 Futures ($10) $5 ($15) $0 ($20) May-14 Feb-15 Nov-15 Aug-16
Slide 11: Well Positioned to Benefit from IMO 2020
Well Positioned to Benefit from IMO 2020 IMO 2020 is expected to benefit high-complexity refiners like CVR Background: Beginning January 1, 2020 the International Maritime Organization (IMO) is expected to enforce a new 0.5% global sulfur cap on marine fuel content, a significant reduction from the
Slide 12: Industry Leading Dividend Yield
Industry Leading Dividend Yield Current Dividend Yield1 nearly 2x Peer Group Average Dividend Payout Ratio Also >2x Peer Average Current Dividend Yield 2018 Dividend Payout Ratio (% of CFFO) 8.0% 50% 7.0% Peer Group Average 40% 6.0% Peer Group Average 5.0% 30% 4.0% 3.0% 20% 2.0% 10% 1.0% 0.0% 0% CVI
Slide 13: Strategic Initiatives
Strategic Initiatives Environment, Health Continue to improve in all Environmental, Health and Safety matters. Safety is Job 1. and Safety › 2018 total recordable incident rates down over 50% Y/Y, environmental events down over 35% Leverage our strategic location and our proprietary gathering system
Slide 14: Long-Term Value Creation Projects: Crude Optionality at Coffeyville
Long-Term Value Creation Projects Crude Optionality at Coffeyville • If approved, Phase 1 would increase the capacity for processing natural gasoline to 10,000 bpd and/or increase shale crude oil and condensate processing ➢ Additional naphtha hydrotreating capacity ➢ Additional C5 / C6 isomerization
Slide 15: Long-Term Value Creation Projects: Isomerization Unit at Wynnewood
Long-Term Value Creation Projects Isomerization Unit at Wynnewood • Intended to: • Run more Anadarko Basin crude oils and condensates • Improve liquid volume yield and increase distillate yield • Increase capability to produce additional premium gasoline (typically $0.20/gal. uplift) • Reduce benzen
Slide 16: Long-Term Value Creation Projects: KSAAT Project at Wynnewood
Long-Term Value Creation Projects KSAAT Project at Wynnewood • KSAAT Solid Acid Alkylation Technology – Wynnewood Refinery • Intended to eliminate the use of hydrofluoric (HF) acid catalyst in the alkylation unit • Installation of the KSAAT process would avoid investment in an HF mitigation system •
Slide 17: Capital Expenditures and Turnaround Expense
Capital Expenditures and Turnaround Expense $250 2019 Total Capex budget of $180M - $200M $200 • Environmental and Maintenance spending $150 planned at $125M - $140M $M $100 • Growth capex budgeted at $55M - $60M $50 • Approximately $50M - $60M of growth related projects will require additional appr
Slide 18: Nitrogen Fertilizer Segment
Slide 19: Solid Trends in Fertilizer Demand Growth
Solid Trends in Fertilizer Demand Growth ◼ Global nitrogen consumption increased by 15% Global Nitrogen Consumption between 2008 and 2018 driven by: 140 − Population growth 130 120 − Decrease in arable farmland per capita 110 100 − Biofuel consumption 90 − Continued evolution to more protein-based M
Slide 20: U.S. Nitrogen Supply & Demand
U.S Nitrogen Supply & Demand Corn Stocks to Use Compared to Net Back Fertilizer Pricing U.S. Nitrogen Supply $700 30% 16,000 Stocks to Use $600 Ammonia Net Back Price 14,000 UAN Net Back Price $500 12,000 20% $400 16% 14% 10,000 13% 13% 12% 12% $300 8,000 9% 10% 8% 7% $200 6,000 $100 4,000 $0 0% 2,0
Slide 21: Strong Demand for Corn in the U.S.
Strong Demand for Corn in the U.S. U.S. Domestic Corn Use 14.0 ◼ Corn has a variety of uses and applications, 12.0 including feed grains, ethanol for fuel and 10.0 food, seed and industrial (FSI) 8.0 6.0 ◼ Feed grains 4.0 (Bushels (Bushels billions) in 2.0 − ~96% of domestic feed grains are supplied
Slide 22: Strategically Located Assets
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 ◼ New rail loading rack at Coffeyville increases logistics optionality due to access to both UP and BNSF delivery
Slide 23: Key Operating Statistics
Key Operating Statistics Consolidated Production Volumes Ammonia Utilization(1) 100% Ammonia (gross produced) Ammonia (net avail. for sale) UAN Coffeyville East Dubuque Consolidated 1,400 95% 94% 94% 94% 1,200 95% 92% 91% 1,000 90% 800 600 85% % % Capacity of Thousand Thousand tons 400 80% 200 0 75%
Slide 24: Capital Expenditures and Turnaround Expenses
Capital Expenditures and Turnaround Expenses East Dubuque Merger on 2019 Total Capex budget of $20M - $25M $30 April 1, 2016 $25 • Environmental and Maintenance spending $20 planned at $18M - $20M $15 $M • Growth capex budgeted at $2.0M - $5.0M $10 • Growth capex budget comprised of a number of $5 s
Slide 25: Appendix
APPENDIX
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures EBITDA represents net income (loss) before (i) interest expense, net, (ii) income tax expense (benefit) and (iii) depreciation and amortization expense. Adjusted EBITDA represents EBITDA adjusted to exclude consolidated turnaround expense and other non-recurring items whi
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures (In USD Millions) 2015 2016 2017 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 LTM CVR Energy, Inc. Net Income $ 350 $ 10 $ 258 $ 366 $ 68 $ 110 $ 96 $ 102 $ 376 Add: Interest expense and other financing costs, net of interest income 47 83 109 103 26 26 24 26 102 Add: Income tax e
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures (In USD Millions) 2015 2016 2017 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 LTM CVR Partners, LP Net Income (loss) $ 62 $ (27) $ (73) $ (50) $ (16) $ (13) $ (1) $ (6) $ (37) Add: Interest expense and other financing costs, net of interest income 7 49 63 63 16 16 16 16 63 Add: I
Slide 29: Non-GAAP Financial Measures: Projected Logistics EBITDA
Non-GAAP Financial Measures Reconciliation of Projected Logistics Net Income to Projected Logistics EBITDA (Annual, USD Millions) Projected Logistics Net Income $ 49 to $ 55 Income tax expense 10 to 12 Depreciation & amortization 6 to 8 Projected Logistics EBITDA $ 65 to $ 75 Note: reconciliation ab
Slide 30: 2019 Estimated Capital Expenditures
2019 Estimated Capital Expenditures 2018 Actual 2019 Estimate (1) Maintenance Growth Total Maintenance Growth Total Low High Low High Low High Petroleum $ 62 $ 17 $ 79 $ 125 $ 140 $ 55 $ 60 $ 180 $ 200 Nitrogen Fertilizer 15 4 19 18 20 2 5 20 25 Other 4 - 4 10 15 - - 10 15 Total $ 81 $ 21 $ 102 $ 15
Slide 31: Organizational Structure
Organizational Structure1 IEP Public 70.8% 29.2% CVR Energy, Inc. (CVI) 100% Holding Companies (1) 100% Coffeyville Resources, LLC 34.1% 100% 100% 34.4% CVR Refining Holdings, LLC CVR GP, LLC Public 100% 65.9% 65.6% CVR Refining GP, LLC CVR Partners, LP CVR Refining, LP (UAN) (CVRR) Coffeyville Reso