Cvr Partners, Lp · NYSE:UAN
Cvr Partners, Lp — Investor Presentation (August 2013)
25 slides from Cvr Partners, Lp's investor presentation, Aug 22, 2013
Slide 1: Ready. Set. Grow. Maximizing Yields
READY. SET. GROW. MAXIMIZING YIELDS Investor Presentation August 2013 NYSE:UAN
Slide 2: Safe Harbor
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: Overview & Strategic Factors
Overview & Strategic Factors Solid market fundamentals Strategically located assets Fully utilized capacity & high run time rates Feed stock advantages Experienced management team Multiple opportunities for growth -- Growth-oriented partnership formed by CVR Energy, Inc. in June 2007 ... IPO in Apri
Slide 4: Solid Market Fundamentals: Key Demand Drivers
Pounds (lbs) Source: USDA, Census Bureau, World Bank, http://data.worldbank.org/indicator/AG.LND.ARBL.HA.PC. Hectares Per Person (1) World Farmland Per Capita 4 NYSE:UAN Solid Market Fundamentals Key Demand Drivers (1) 1 hectare equals 2.471 acres World Population: 1950-2050 Billions U.S. Corn Use f
Slide 5: Consistent Growth in Fertilizer Demand
Nitrogen represents ~62% of fertilizer consumption (1) Nitrogen fertilizers have most stable demand Must be applied annually Primary determinant of crop yield Corn consumes the largest amount of nitrogen fertilizer Solid Market Fundamentals Consistent Growth in Fertilizer Demand (1) Per the Internat
Slide 6: Nitrogen Remains Small Portion of Farmer's Cost Profile
Nitrogen Remains Small Portion of Farmer’s Cost Profile Solid Market Fundamentals Farmer Profitability Supports Fertilizer Price 6 NYSE:UAN U.S. Farmer Total Input Costs Input Costs and Prices per Bushel ($) Other Variable 11% Seed/Chemicals 18% Fixed Costs 46% % TOTAL (2012) CORN FUTURES* May 14: $
Slide 7: U.S. is Net Importer of Nitrogen
Solid Market Fundamentals U.S. is Net Importer of Nitrogen 000’s of Nitrogen Tons U.S. Nitrogen Production & Consumption Source: Fertecon, May 2013. 7 NYSE:UAN To meet demand requirements, U.S. has historically been net importer of nitrogen 2000-2012 Average 2.4 million tons per year 21% of demand 2
Slide 8: Excess Demand Driving Net Imports of UAN
U.S. Net Imports of UAN were 23% of U.S. Demand in 2012 (1) Solid Market Fundamentals Excess Demand Driving Net Imports of UAN Country 2008 2009 2010 2011 2012 Trinidad & Tobago 0 0 777 1,010 852 Russia 953 658 749 674 750 Canada 487 427 437 617 402 Romania 185 29 254 487 284 Egypt 174 0 123 117 221
Slide 9: Fertilizer Prices Remain Attractive
9 NYSE:UAN Solid Market Fundamentals Fertilizer Prices Remain Attractive Spot Prices (U.S. Southern Plains) Ammonia Urea UAN 1/1/08 - 8/12/13 $553.80 $433.46 $316.26 8/9/10 - 8/12/13 $626.10 $460.80 $343.65 8/13/12 – 8/12/13 $672.84 $428.38 $337.36 Average Prices Supply/Demand Dynamics Support Posit
Slide 10: Acres Planted Impacts Crop Yield
Historical Data Indicates 2013 Year Ending Corn Stocks of 11% or Less -- Expect More than 90 Million Acres to be Planted in 2014 -- Solid Market Fundamentals Acres Planted Impacts Crop Yield 10 NYSE:UAN Millions of Acres Bushels per Acre U.S. Corn Planted & Yields Source: USDA. Projected Stocks & Us
Slide 11: Strategically Located Assets
Strategically Located Assets Located in Corn Belt 54% of corn planted in 2012 was within $45/UAN ton freight rate of plant ~$15/UAN ton transportation advantage to Corn Belt vs. U.S. Gulf Coast * * Impacted by major scheduled turnaround (occurs every two years). 11 NYSE:UAN
Slide 12: Fully Utilized Capacity & High Run Rates
Fully Utilized Capacity & High Run Rates (1) 1.0 ton of ammonia converts to 2.44 tons of UAN. (2) Excludes impact of major scheduled turnaround (occurs every two years) and third party air separation unit outage. Including impact of turnaround and third party outage, on-stream efficiency would have
Slide 13: Feed Stock Advantages
Feed Stock Advantages 13 NYSE:UAN Utilize pet coke as feed stock versus natural gas Lower production cost compared to competition Advantage when natural gas price is higher than ~$3.90/MMBtu* * Reflects price delivered to plant. Henry Hub price is lower as excludes transportation cost to plant gate.
Slide 14: Experienced Management
Experienced Management 14 NYSE:UAN
Slide 15: Multiple Growth Opportunities
Operational efficiency Plant expand/enhance Specialty products Distribution/offsite storage Mergers and acquisitions Multiple Growth Opportunities Current 12-36 Months 4-5 Years 15 NYSE:UAN
Slide 16: UAN Plant Expansion
$130MM project completed in March 2013 Capitalize on historical price premium of UAN to ammonia (NH3) UAN Plant Expansion UAN Price Premium to Ammonia* * Indicates price premium only (i.e., before incremental processing costs, etc.). 16 NYSE:UAN Ability to upgrade 100% of NH3 to UAN (1) Expanded UAN
Slide 17: Historical Financial Success
Historical Financial Success Millions Millions 17 NYSE:UAN See page 24 for a reconciliation of net income to EBITDA. See page 24 for a reconciliation of net income to EBITDA less maintenance capital. 82.2
Slide 18: Targeting Growth in 2013
Targeting Growth in 2013 Distributable Cash Flow Per Unit of $1.80 to $2.00 for 2013 Full Year -- $1.81 Paid to Unitholders for 2012 -- YTD 6/30/13 YTD 6/30/12 Change Sales $170.2 $159.7 6.6% EBITDA (1) $85.9 $78.1 10.0% Adjusted EBITDA (2) $87.9 $82.1 7.1% Operating Income $73.9 $67.5 9.5% Distribu
Slide 19: Strong Financial Profile
Strong Financial Profile ($US millions, unless otherwise noted) Capitalization As of 6/30/13 Cash & Equivalents $111.9 Credit Facility due April 2016: Term Loan 125.0 $25 million Revolver - Total Debt $125.0 Partners' Equity 461.1 Total Capitalization (Book) $586.1 LTM EBITDA (1) $144.4 LTM Interest
Slide 20: A Bright Outlook
A Bright Outlook Strong industry fundamentals High-quality & strategically-located assets Premium product focus Attractive growth opportunities Experienced management team Pay out 100% of available cash each quarter No IDRs or management fees for General Partner 20 NYSE:UAN
Slide 21: Appendix
MAXIMIZING YIELDS Appendix
Slide 22: Plant Process Flow Chart
Plant Process Flow Chart 22 NYSE:UAN
Slide 23: Non-GAAP Financial Measures
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-GA
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation See below for reconciliation of net income to EBITDA, EBITDA to Adjusted EBITDA, & EBITDA less maintenance capital See below for reconciliation of net income to EBITDA & EBITDA to Adjusted EBITDA Adjusted EBITDA: Defined as EBITDA further adjusted for the impact of share-base
Slide 25: Activities & Transactions
Activities & Transactions 25 NYSE:UAN January-March April-June July-September October-December Average Season Dealer/Distributor Fill Orders & Wheat Topdress Spring Planting Dealer/Distributor Fill Orders Dealer/Distributor Fill Orders & Fall Planting Crop No Planting Corn Planting No Planting Wheat