UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 12, 2013
CVR ENERGY, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-33492 |
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61-1512186 |
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(State or other |
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(Commission File Number) |
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(I.R.S. Employer |
2277 Plaza Drive, Suite 500
Sugar Land, Texas 77479
(Address of principal executive offices,
including zip code)
Registrant’s telephone number, including area code: (281) 207-3200
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On March 12, 2013, CVR Energy, Inc. (the “Company”) issued a press release announcing information regarding its results of operations and financial condition for the quarter and fiscal year ended December 31, 2012, the text of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in Item 2.02 of this Current Report on Form 8-K and in Exhibit 99.1 attached hereto is being “furnished” and is not deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor is it deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibit is being “furnished” as part of this Current Report on Form 8-K:
99.1 Press release.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: March 12, 2013 |
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CVR Energy, Inc. | |
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By: |
/s/ Susan M. Ball |
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Susan M. Ball, |
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Chief Financial Officer and Treasurer |
Exhibit 99.1
CVR ENERGY REPORTS FOURTH QUARTER
AND RECORD FULL YEAR RESULTS
SUGAR LAND, Texas (March 12, 2013) – CVR Energy, Inc. (NYSE: CVI) today reported record full year 2012 net income of $378.6 million, or $4.33 per fully diluted share, on net sales of $8,567.3 million. Fourth quarter 2012 net income was $40.2 million, or 46 cents per fully diluted share, on net sales of $1,880.8 million.
The 2012 results compare to net income for the full year 2011 of $345.8 million, or $3.94 per fully diluted share, on net sales of $5,029.1 million, and fourth quarter 2011 net income of $65.9 million, or 75 cents per fully diluted share, on net sales of $1,062.2 million.
Fourth quarter 2012 adjusted net income, a non-GAAP financial measure, was $103.8 million, or $1.20 per diluted share, compared to $29.5 million, or 34 cents per diluted share, for the fourth quarter of 2011. Major items impacting the 2012 fourth quarter adjusted net income, all net of taxes, were shared-based compensation of $6.2 million, an unfavorable impact from first-in, first-out (FIFO) accounting of $7.9 million, an unrealized gain on derivatives of $29.8 million, a loss on extinguishment of debt of $22.8 million, and a major scheduled turnaround expense of $56.1 million.
Operating income for the fourth quarter 2012 was $124.9 million, up from $26.9 million in the same quarter of 2011. Full year 2012 operating income was $1,034.9 million, up from $566.6 million for the full year 2011.
“CVR Energy’s exceptional financial results in 2012 were driven by strong operating performance and attractive market conditions throughout the year. These results were achieved despite the expense and lost production from our planned major turnarounds at the refinery in Wynnewood and fertilizer plant in Coffeyville, along with a partial turnaround at the Coffeyville refinery,” said Jack Lipinski, CVR Energy’s chief executive officer. “Our fertilizer segment also had a solid year with CVR Partners generating 2012 full year distributions of $1.81 per common unit.
“In addition to posting record results in 2012, we achieved another significant milestone by taking our petroleum businesses public earlier this year in the largest IPO of a master limited partnership to date,” he said. “CVR Refining, LP began trading on the New York Stock Exchange on Jan. 17 under the ticker CVRR. CVR Energy, through a subsidiary, retains 81.3 percent of CVR Refining’s common units.
“This latest IPO effectively makes CVR Energy a diversified holding company owning the General Partners of both CVR Partners and CVR Refining along with the majority of LP units in each company,” Lipinski said.
Petroleum Business
The petroleum business, which includes the Coffeyville and Wynnewood refineries, reported fourth quarter 2012 operating income of $121.3 million, and adjusted EBITDA, a non-GAAP financial measure, of $198.2 million, on net sales of $1,816.2 million, compared to an operating loss in the same quarter a year earlier of $3.3 million, and adjusted EBITDA of $47.6 million, on net sales of $979.5 million.
Fourth quarter 2012 throughput of crude oil and all other feedstocks and blendstocks, which was impacted by a major scheduled turnaround at the Wynnewood refinery, averaged 162,603 barrels per day (bpd), compared to 97,630 bpd for the same period in 2011. Crude oil throughput for the fourth quarter 2012 averaged 147,815 bpd per day, compared with 93,705 bpd for the same period in 2011. The year-over-year increase in throughput was mostly driven by the addition of the Wynnewood refinery.
Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $25.93 in the fourth quarter 2012 compared to $11.05 during the same period in 2011. Gross profit per crude oil throughput barrel was $10.23 in the fourth quarter 2012, as compared to 90 cents during the same period in 2011.
Direct operating expenses, including major scheduled turnaround expenses, per barrel sold, exclusive of depreciation and amortization, for the fourth quarter 2012 was $11.29, down from $12.53 in the fourth quarter 2011.
Coffeyville Refinery
The Coffeyville refinery reported fourth quarter 2012 gross profit of $238.4 million, compared to $9.4 million of gross profit for the fourth quarter of 2011. Fourth quarter 2012 crude oil throughput averaged 124,570 bpd, compared to 81,474 bpd in the fourth quarter of 2011. Refining margin adjusted for FIFO impact per crude oil throughput barrel for the fourth quarter of 2012 was $28.08, compared to $12.19 for the same period in 2011. Gross profit per crude oil throughput barrel was $20.80 in the fourth quarter of 2012, compared to $1.26 for the 2011 fourth quarter. Direct operating expenses, including major scheduled turnaround expenses, per barrel sold for the 2012 fourth quarter was $4.20, compared to $13.84 for the 2011 fourth quarter. Fourth quarter 2011 results for the Coffeyville refinery were negatively impacted by a major scheduled turnaround.
Wynnewood Refinery
CVR Energy acquired the Wynnewood refinery in December 2011. The 2012 fourth quarter represents the refinery’s fourth full quarter as a CVR Energy subsidiary. Fourth quarter 2012 results for the Wynnewood refinery were negatively impacted by a major scheduled turnaround.
The refinery had a fourth quarter 2012 gross loss of $97.9 million. Fourth quarter of 2012 crude oil throughput averaged 23,245 bpd. Refining margin adjusted for FIFO impact per crude oil throughput barrel for the fourth quarter of 2012 was $14.67. Direct operating expenses, including major scheduled turnaround expenses, per barrel sold for the fourth quarter was $49.90.
Nitrogen Fertilizers Business
The fertilizer business operated by CVR Partners, LP reported fourth quarter 2012 operating income of $16.0 million, and adjusted EBITDA, a non-GAAP financial measure, of $27.1 million, on net sales of $67.6 million, compared to operating income of $42.6 million, and adjusted EBITDA of $48.4 million, on net sales of $87.6 million for the 2011 fourth quarter. Impacting 2012 fourth quarter results was a biennial turnaround at the company’s nitrogen fertilizer plant in Coffeyville, Kan.
CVR Partners produced 87,700 tons of ammonia during the fourth quarter of 2012, of which 35,300 net tons were available for sale while the rest was upgraded to 127,300 tons of more highly valued UAN. In the 2011 fourth quarter, the plant produced 100,800 tons of ammonia with 27,500 net tons available for sale with the remainder upgraded to 178,300 tons of UAN.
For the fourth quarter 2012, average realized plant gate prices for ammonia and UAN were $676 per ton and $274 per ton, respectively, compared to $606 per ton and $334 per ton, respectively, for the equivalent period in 2011.
Cash Dividends
On Jan. 24, 2013, the CVR Energy Board of Directors adopted a quarterly cash dividend policy. The company’s initial quarterly dividend is expected to be 75 cents per share, or $3.00 per share on an annualized basis, which the company plans to begin paying in the 2013 second quarter. Also on Jan. 24, 2013, the company declared a special dividend of $5.50 per share, which was paid on Feb. 19, 2013, to shareholders of record on Feb. 5, 2013.
CVR Energy Fourth Quarter and Full Year 2012 Earnings Conference Call Information
CVR Energy previously announced that it will host its fourth quarter and full year 2012 Earnings Conference Call for analysts and investors on Tuesday, March 12, at 2 p.m. Eastern.
The Earnings Conference Call will be broadcast live over the Internet at http://www.videonewswire.com/event.asp?id=91583. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
For those unable to listen live, the Webcast will be archived and available for14 days at http://www.videonewswire.com/event.asp?id=91583. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 407365.
# # #
Forward Looking Statements
This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by our use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “explore,” “evaluate,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” “should,” or “will,” or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. For a discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, and any subsequently filed Quarterly Reports on Form 10-Q. These risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. CVR Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own a majority of the common units representing limited partner interests of CVR Refining and CVR Partners.
For further information, please contact:
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Investor Relations: |
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Jay Finks |
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CVR Energy, Inc. |
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281-207-3588 |
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InvestorRelations@CVREnergy.com |
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Media Relations: |
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Angie Dasbach |
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CVR Energy, Inc. |
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913-982-0482 |
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MediaRelations@CVREnergy.com |
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CVR Energy, Inc.
Financial and Operational Data (all information in this release is unaudited other than the Statements of Operations and cash flow data for the year ended December 31, 2011 and the balance sheet data as of December 31, 2011).
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Three Months Ended |
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Change from 2011 |
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2012 |
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2011 |
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Change |
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Percent |
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(in millions, except per share data) |
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Consolidated Statement of Operations Data: |
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Net sales |
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$ |
1,880.8 |
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$ |
1,062.2 |
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$ |
818.6 |
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77.1 |
% |
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Cost of product sold |
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1,485.1 |
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857.3 |
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627.8 |
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73.2 |
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Direct operating expenses |
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202.5 |
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124.8 |
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77.7 |
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62.3 |
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Insurance recovery — business interruption |
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— |
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— |
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— |
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— |
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Selling, general and administrative expenses |
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35.7 |
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29.0 |
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6.7 |
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23.1 |
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Depreciation and amortization |
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32.6 |
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24.2 |
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8.4 |
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34.7 |
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Operating income |
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124.9 |
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26.9 |
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98.0 |
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364.3 |
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Interest expense and other financing costs |
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(18.2 |
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(14.7 |
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(3.5 |
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23.8 |
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Gain (loss) on derivatives, net |
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Realized |
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(57.1 |
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11.1 |
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(68.2 |
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(614.4 |
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Unrealized |
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48.9 |
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92.1 |
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(43.2 |
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(46.9 |
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Loss on extinguishment of debt |
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(37.5 |
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— |
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(37.5 |
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— |
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Other income, net |
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0.5 |
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— |
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0.5 |
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— |
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Income before income tax expense |
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61.5 |
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115.4 |
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(53.9 |
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(46.7 |
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Income tax expense |
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16.7 |
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37.1 |
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(20.4 |
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(55.0 |
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Net income |
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44.8 |
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78.3 |
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(33.5 |
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(42.8 |
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Net income attributable to noncontrolling interest |
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4.6 |
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12.4 |
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(7.8 |
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(62.9 |
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Net income attributable to CVR Energy stockholders |
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$ |
40.2 |
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$ |
65.9 |
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$ |
(25.7 |
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(39.0 |
)% |
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Basic earnings per share |
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$ |
0.46 |
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$ |
0.76 |
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$ |
(0.30 |
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(39.5 |
)% |
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Diluted earnings per share |
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$ |
0.46 |
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$ |
0.75 |
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$ |
(0.29 |
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(38.7 |
)% |
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Adjusted net income* |
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$ |
103.8 |
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$ |
29.5 |
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$ |
74.3 |
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251.8 |
% |
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Adjusted net income, per diluted share* |
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$ |
1.20 |
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$ |
0.34 |
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$ |
0.86 |
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252.9 |
% |
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Weighted-average common shares outstanding: |
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Basic |
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86,831,050 |
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86,582,800 |
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248,250 |
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0.3 |
% | |||
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Diluted |
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86,831,050 |
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87,746,843 |
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(915,793 |
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(1.0 |
)% | |||
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Year Ended |
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Change from 2011 |
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2012 |
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2011 |
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Change |
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Percent |
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(in millions, except per share data) |
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Consolidated Statement of Operations Data: |
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Net sales |
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$ |
8,567.3 |
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$ |
5,029.1 |
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$ |
3,538.2 |
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70.4 |
% |
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Cost of product sold |
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6,696.9 |
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3,943.5 |
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2,753.4 |
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69.8 |
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Direct operating expenses |
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522.1 |
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334.1 |
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188.0 |
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56.3 |
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Insurance recovery — business interruption |
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— |
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(3.4 |
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3.4 |
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(100.0 |
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Selling, general and administrative expenses |
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183.4 |
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98.0 |
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85.4 |
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87.1 |
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Depreciation and amortization |
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130.0 |
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90.3 |
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39.7 |
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44.0 |
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Operating income |
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1,034.9 |
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566.6 |
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468.3 |
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82.7 |
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Interest expense and other financing costs |
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(75.4 |
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(55.8 |
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(19.6 |
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35.1 |
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Gain (loss) on derivatives, net |
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Realized |
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(137.6 |
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(7.2 |
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(130.4 |
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1,811.1 |
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Unrealized |
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(148.0 |
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85.3 |
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(233.3 |
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(273.5 |
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Loss on extinguishment of debt |
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(37.5 |
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(2.1 |
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(35.4 |
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1,685.7 |
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Other income, net |
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1.8 |
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1.3 |
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0.5 |
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38.5 |
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Income before income tax expense |
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638.2 |
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588.1 |
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50.1 |
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8.5 |
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Income tax expense |
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225.6 |
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209.5 |
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16.1 |
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7.7 |
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Net income |
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412.6 |
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378.6 |
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34.0 |
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9.0 |
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Net income attributable to noncontrolling interest |
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34.0 |
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32.8 |
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1.2 |
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3.7 |
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Net income attributable to CVR Energy stockholders |
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$ |
378.6 |
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$ |
345.8 |
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$ |
32.8 |
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9.5 |
% |
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Basic earnings per share |
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$ |
4.36 |
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$ |
4.00 |
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$ |
0.36 |
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9.0 |
% |
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Diluted earnings per share |
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$ |
4.33 |
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$ |
3.94 |
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$ |
0.39 |
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9.9 |
% |
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Adjusted net income* |
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$ |
660.1 |
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$ |
345.7 |
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$ |
314.4 |
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90.9 |
% |
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Adjusted net income, per diluted share* |
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$ |
7.55 |
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$ |
3.94 |
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$ |
3.61 |
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91.6 |
% |
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Weighted-average common shares outstanding: |
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Basic |
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86,822,913 |
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86,493,735 |
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329,178 |
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0.4 |
% | |||
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Diluted |
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87,392,270 |
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87,766,573 |
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(374,303 |
) |
(0.4 |
)% | |||
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December 31, |
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December 31, |
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(in millions) |
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Balance Sheet Data: |
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Cash and cash equivalents |
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$ |
896.0 |
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$ |
388.3 |
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Working capital |
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1,135.4 |
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769.2 |
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Total assets |
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3,610.9 |
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3,119.3 |
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Total debt, including current portion |
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898.2 |
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863.8 |
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Total CVR stockholders’ equity |
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1,525.2 |
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1,151.6 |
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Three Months Ended |
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Year Ended |
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2012 |
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2011 |
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2012 |
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2011 |
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(in millions) |
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Cash Flow Data: |
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Net cash flow provided by (used in): |
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Operating activities |
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$ |
(21.2 |
) |
$ |
(67.4 |
) |
$ |
762.6 |
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$ |
278.6 |
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Investing activities |
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(67.1 |
) |
(630.5 |
) |
(210.7 |
) |
(674.4 |
) | ||||
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Financing activities |
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(4.0 |
) |
187.8 |
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(44.3 |
) |
584.1 |
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Net cash flow |
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$ |
(92.3 |
) |
$ |
(510.1 |
) |
$ |
507.6 |
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$ |
188.3 |
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Other Financial Data: |
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Capital expenditures for property, plant and equipment |
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$ |
67.1 |
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$ |
44.6 |
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$ |
212.2 |
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$ |
91.2 |
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Segment Information
Our operations are organized into two reportable segments, Petroleum and Nitrogen Fertilizer. Our operations that are not included in the Petroleum and Nitrogen Fertilizer segments are included in Corporate and Other segment (along with elimination of intersegment transactions). The Petroleum segment includes the operations of our Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with our crude oil gathering and pipeline systems. Effective with its initial public offering on January 23, 2013, our Petroleum segment is operated by CVR Refining, LP (“CVR Refining”), in which we own a majority interest as well as the general partner. The Nitrogen Fertilizer segment is operated by CVR Partners, LP, (“CVR Partners”) in which we own a majority interest as well as the general partner. It consists of a nitrogen fertilizer manufacturing facility that utilizes a pet coke gasification process in producing nitrogen fertilizer. Detailed operating results for the Nitrogen Fertilizer segment for the quarter ended December 31, 2012 are included in CVR Partners’ press release dated February 27, 2013.
The Petroleum segment, as reported herein, is not reflective of the full and actual financial statements of CVR Refining as certain allocations that were charged to CVR Refining were not made at the Petroleum segment. Beginning in 2013, the financial statements of the Petroleum segment will be the same as CVR Refining’s financial statements.
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Petroleum |
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Nitrogen |
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Corporate |
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Consolidated |
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(in millions) |
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Three months ended December 31, 2012 |
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Net sales |
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$ |
1,816.2 |
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$ |
67.6 |
|
$ |
(3.0 |
) |
$ |
1,880.8 |
|
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Cost of product sold |
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1,476.5 |
|
11.5 |
|
(2.9 |
) |
1,485.1 |
| ||||
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Direct operating expenses (1) |
|
84.2 |
|
24.6 |
|
— |
|
108.8 |
| ||||
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Major scheduled turnaround expense |
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89.1 |
|
4.6 |
|
— |
|
93.7 |
| ||||
|
Selling, general & administrative |
|
17.8 |
|
6.0 |
|
11.9 |
|
35.7 |
| ||||
|
Depreciation and amortization |
|
27.3 |
|
4.9 |
|
0.4 |
|
32.6 |
| ||||
|
Operating income (loss) |
|
$ |
121.3 |
|
$ |
16.0 |
|
$ |
(12.4 |
) |
$ |
124.9 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Capital expenditures |
|
$ |
37.4 |
|
$ |
24.7 |
|
$ |
5.0 |
|
$ |
67.1 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Year ended December 31, 2012 |
|
|
|
|
|
|
|
|
| ||||
|
Net sales |
|
$ |
8,281.5 |
|
$ |
302.3 |
|
$ |
(16.5 |
) |
$ |
8,567.3 |
|
|
Cost of product sold |
|
6,667.3 |
|
46.1 |
|
(16.5 |
) |
6,696.9 |
| ||||
|
Direct operating expenses (1) |
|
302.8 |
|
90.8 |
|
— |
|
393.6 |
| ||||
|
Major scheduled turnaround expense |
|
123.7 |
|
4.8 |
|
— |
|
128.5 |
| ||||
|
Selling, general & administrative |
|
67.6 |
|
24.1 |
|
91.7 |
|
183.4 |
| ||||
|
Depreciation and amortization |
|
107.6 |
|
20.7 |
|
1.7 |
|
130.0 |
| ||||
|
Operating income (loss) |
|
$ |
1,012.5 |
|
$ |
115.8 |
|
$ |
(93.4 |
) |
$ |
1,034.9 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Capital expenditures |
|
$ |
120.0 |
|
$ |
82.2 |
|
$ |
10.0 |
|
$ |
212.2 |
|
|
|
|
Petroleum |
|
Nitrogen |
|
Corporate |
|
Consolidated |
| ||||
|
|
|
(in millions) |
| ||||||||||
|
Three months ended December 31, 2011 |
|
|
|
|
|
|
|
|
| ||||
|
Net sales |
|
$ |
979.5 |
|
$ |
87.6 |
|
$ |
(4.9 |
) |
$ |
1,062.2 |
|
|
Cost of product sold |
|
849.1 |
|
14.4 |
|
(6.2 |
) |
857.3 |
| ||||
|
Direct operating expenses (1) |
|
49.6 |
|
21.1 |
|
— |
|
70.7 |
| ||||
|
Major scheduled turnaround expense |
|
54.1 |
|
— |
|
— |
|
54.1 |
| ||||
|
Insurance recovery — business interruption |
|
— |
|
— |
|
— |
|
— |
| ||||
|
Selling, general & administrative |
|
11.0 |
|
4.6 |
|
13.4 |
|
29.0 |
| ||||
|
Depreciation and amortization |
|
19.0 |
|
4.9 |
|
0.3 |
|
24.2 |
| ||||
|
Operating income (loss) |
|
$ |
(3.3 |
) |
$ |
42.6 |
|
$ |
(12.4 |
) |
$ |
26.9 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Capital expenditures |
|
$ |
35.2 |
|
$ |
8.6 |
|
$ |
0.8 |
|
$ |
44.6 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Year ended December 31, 2011 |
|
|
|
|
|
|
|
|
| ||||
|
Net sales |
|
$ |
4,751.8 |
|
$ |
302.9 |
|
$ |
(25.6 |
) |
$ |
5,029.1 |
|
|
Cost of product sold |
|
3,926.6 |
|
42.5 |
|
(25.6 |
) |
3,943.5 |
| ||||
|
Direct operating expenses (1) |
|
181.3 |
|
86.5 |
|
(0.1 |
) |
267.7 |
| ||||
|
Major scheduled turnaround expense |
|
66.4 |
|
— |
|
— |
|
66.4 |
| ||||
|
Insurance recovery — business interruption |
|
— |
|
(3.4 |
) |
— |
|
(3.4 |
) | ||||
|
Selling, general & administrative |
|
41.9 |
|
22.2 |
|
33.9 |
|
98.0 |
| ||||
|
Depreciation and amortization |
|
69.9 |
|
18.9 |
|
1.5 |
|
90.3 |
| ||||
|
Operating income (loss) |
|
$ |
465.7 |
|
$ |
136.2 |
|
$ |
(35.3 |
) |
$ |
566.6 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Capital expenditures |
|
$ |
68.6 |
|
$ |
19.1 |
|
$ |
3.5 |
|
$ |
91.2 |
|
(1) Excluding turnaround expenses.
|
|
|
Petroleum |
|
Nitrogen |
|
Corporate |
|
Consolidated |
| ||||
|
|
|
(in millions) |
| ||||||||||
|
December 31, 2012 |
|
|
|
|
|
|
|
|
| ||||
|
Cash and cash equivalents |
|
$ |
148.1 |
|
$ |
127.8 |
|
$ |
620.1 |
|
$ |
896.0 |
|
|
Total assets |
|
2,258.5 |
|
623.0 |
|
729.4 |
|
3,610.9 |
| ||||
|
Total debt, including current portion |
|
552.3 |
|
125.0 |
|
220.9 |
|
898.2 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
December 31, 2011 |
|
|
|
|
|
|
|
|
| ||||
|
Cash and cash equivalents (1) |
|
$ |
— |
|
$ |
237.0 |
|
$ |
151.3 |
|
$ |
388.3 |
|
|
Total assets |
|
2,322.1 |
|
659.3 |
|
137.9 |
|
3,119.3 |
| ||||
|
Total debt, including current portion |
|
— |
|
125.0 |
|
738.8 |
|
863.8 |
| ||||
(1) Prior to December 2012, the Petroleum segment was part of a centralized approach to cash management. Accordingly, Corporate and Other is inclusive of the Petroleum segment’s cash and cash equivalents and long-term debt as of December 31, 2011.
Petroleum Segment Operating Data
The following tables set forth information about our consolidated Petroleum segment operations and our Coffeyville and Wynnewood refineries. Reconciliations of certain non-GAAP financial measures are provided under “Use of Non-GAAP Financial Measures” below.
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
(in millions, except operating statistics) |
| ||||||||||
|
Petroleum Segment Summary Financial Results: |
|
|
|
|
|
|
|
|
| ||||
|
Net sales |
|
$ |
1,816.2 |
|
$ |
979.5 |
|
$ |
8,281.5 |
|
$ |
4,751.8 |
|
|
Cost of product sold |
|
1,476.5 |
|
849.1 |
|
6,667.3 |
|
3,926.6 |
| ||||
|
Refining margin* |
|
339.7 |
|
130.4 |
|
1,614.2 |
|
825.2 |
| ||||
|
Direct operating expenses |
|
84.2 |
|
49.6 |
|
302.8 |
|
181.3 |
| ||||
|
Major scheduled turnaround expense |
|
89.1 |
|
54.1 |
|
123.7 |
|
66.4 |
| ||||
|
Depreciation and amortization |
|
27.3 |
|
19.0 |
|
107.6 |
|
69.9 |
| ||||
|
Gross profit |
|
139.1 |
|
7.7 |
|
1,080.1 |
|
507.6 |
| ||||
|
Selling, general and administrative expenses |
|
17.8 |
|
11.0 |
|
67.6 |
|
41.9 |
| ||||
|
Operating income |
|
$ |
121.3 |
|
$ |
(3.3 |
) |
$ |
1,012.5 |
|
$ |
465.7 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Refining margin adjusted for FIFO impact* |
|
$ |
352.6 |
|
$ |
95.3 |
|
$ |
1,672.6 |
|
$ |
799.6 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Adjusted Petroleum EBITDA* |
|
$ |
198.2 |
|
$ |
47.6 |
|
$ |
1,178.9 |
|
$ |
580.9 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Petroleum Segment Key Operating Statistics: |
|
|
|
|
|
|
|
|
| ||||
|
Per crude oil throughput barrel: |
|
|
|
|
|
|
|
|
| ||||
|
Refining margin* |
|
$ |
24.98 |
|
$ |
15.13 |
|
$ |
26.04 |
|
$ |
21.80 |
|
|
FIFO impact (favorable) unfavorable |
|
0.95 |
|
(4.08 |
) |
0.94 |
|
(0.68 |
) | ||||
|
Refining margin adjusted for FIFO impact* |
|
25.93 |
|
11.05 |
|
26.98 |
|
21.12 |
| ||||
|
Gross profit |
|
10.23 |
|
0.90 |
|
17.42 |
|
13.41 |
| ||||
|
Direct operating expenses and major scheduled turnaround expenses |
|
12.75 |
|
12.03 |
|
6.88 |
|
6.54 |
| ||||
|
Direct operating expenses and major scheduled turnaround expenses per barrel sold |
|
$ |
11.29 |
|
$ |
12.53 |
|
$ |
6.26 |
|
$ |
6.38 |
|
|
Barrels sold (barrels per day) |
|
166,842 |
|
89,953 |
|
186,035 |
|
106,397 |
| ||||
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||||||||||
|
Petroleum Segment Summary Refining Throughput and Production Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
(barrels per day) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Throughput: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Sweet |
|
112,113 |
|
68.9 |
% |
78,006 |
|
79.9 |
% |
130,414 |
|
72.4 |
% |
83,538 |
|
76.7 |
% | ||||
|
Light/medium sour |
|
20,508 |
|
12.6 |
% |
4,986 |
|
5.1 |
% |
21,334 |
|
11.8 |
% |
1,704 |
|
1.6 |
% | ||||
|
Heavy sour |
|
15,194 |
|
9.3 |
% |
10,713 |
|
11.0 |
% |
17,608 |
|
9.8 |
% |
18,460 |
|
16.9 |
% | ||||
|
Total crude oil throughput |
|
147,815 |
|
90.8 |
% |
93,705 |
|
96.0 |
% |
169,356 |
|
94.0 |
% |
103,702 |
|
95.2 |
% | ||||
|
All other feedstocks and blendstocks |
|
14,788 |
|
9.2 |
% |
3,925 |
|
4.0 |
% |
10,791 |
|
6.0 |
% |
5,231 |
|
4.8 |
% | ||||
|
Total throughput |
|
162,603 |
|
100.0 |
% |
97,630 |
|
100.0 |
% |
180,147 |
|
100.0 |
% |
108,933 |
|
100.0 |
% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Production: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Gasoline |
|
82,855 |
|
50.6 |
% |
41,032 |
|
42.1 |
% |
89,787 |
|
49.9 |
% |
48,486 |
|
44.3 |
% | ||||
|
Distillate |
|
64,577 |
|
39.5 |
% |
40,095 |
|
41.1 |
% |
72,804 |
|
40.6 |
% |
45,535 |
|
41.6 |
% | ||||
|
Other (excluding internally produced fuel) |
|
16,284 |
|
9.9 |
% |
16,410 |
|
16.8 |
% |
17,262 |
|
9.5 |
% |
15,385 |
|
14.1 |
% | ||||
|
Total refining production (excluding internally produced fuel) |
|
163,716 |
|
100.0 |
% |
97,537 |
|
100.0 |
% |
179,853 |
|
100.0 |
% |
109,406 |
|
100.0 |
% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Product price (dollars per gallon): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Gasoline |
|
$ |
2.62 |
|
|
|
$ |
2.56 |
|
|
|
$ |
2.86 |
|
|
|
$ |
2.82 |
|
|
|
|
Distillate |
|
3.13 |
|
|
|
2.98 |
|
|
|
3.08 |
|
|
|
3.03 |
|
|
| ||||
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
Market Indicators (dollars per barrel): |
|
|
|
|
|
|
|
|
| ||||
|
West Texas Intermediate (WTI) NYMEX |
|
$ |
88.23 |
|
$ |
94.06 |
|
$ |
94.15 |
|
$ |
95.11 |
|
|
Crude Oil Differentials: |
|
|
|
|
|
|
|
|
| ||||
|
WTI less WTS (light/medium sour) |
|
9.29 |
|
0.84 |
|
5.40 |
|
2.06 |
| ||||
|
WTI less WCS (heavy sour) |
|
27.07 |
|
12.38 |
|
22.53 |
|
16.54 |
| ||||
|
NYMEX Crack Spreads: |
|
|
|
|
|
|
|
|
| ||||
|
Gasoline |
|
26.63 |
|
16.03 |
|
28.55 |
|
23.54 |
| ||||
|
Heating Oil |
|
40.00 |
|
30.96 |
|
32.94 |
|
29.12 |
| ||||
|
NYMEX 2-1-1 Crack Spread |
|
33.32 |
|
23.49 |
|
30.75 |
|
26.33 |
| ||||
|
PADD II Group 3 Basis: |
|
|
|
|
|
|
|
|
| ||||
|
Gasoline |
|
(4.82 |
) |
(0.87 |
) |
(3.11 |
) |
(1.09 |
) | ||||
|
Ultra Low Sulfur Diesel |
|
2.57 |
|
0.95 |
|
2.17 |
|
1.98 |
| ||||
|
PADD II Group 3 Product Crack: |
|
|
|
|
|
|
|
|
| ||||
|
Gasoline |
|
21.82 |
|
15.16 |
|
25.45 |
|
22.44 |
| ||||
|
Ultra Low Sulfur Diesel |
|
42.57 |
|
31.91 |
|
35.11 |
|
31.10 |
| ||||
|
PADD II Group 3 2-1-1 |
|
32.19 |
|
23.54 |
|
30.28 |
|
26.77 |
| ||||
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
(in millions, except operating statistics) |
| ||||||||||
|
Coffeyville Refinery Financial Results: |
|
|
|
|
|
|
|
|
| ||||
|
Net sales |
|
$ |
1,548.6 |
|
$ |
871.8 |
|
$ |
5,632.9 |
|
$ |
4,643.9 |
|
|
Cost of product sold |
|
1,238.3 |
|
745.8 |
|
4,506.5 |
|
3,823.5 |
| ||||
|
Refining margin* |
|
310.3 |
|
126.0 |
|
1,126.4 |
|
820.4 |
| ||||
|
Direct operating expenses |
|
54.4 |
|
45.5 |
|
189.1 |
|
177.1 |
| ||||
|
Major scheduled turnaround expense |
|
— |
|
54.1 |
|
21.2 |
|
66.4 |
| ||||
|
Depreciation and amortization |
|
17.5 |
|
17.0 |
|
69.6 |
|
66.0 |
| ||||
|
Gross profit |
|
$ |
238.4 |
|
$ |
9.4 |
|
$ |
846.5 |
|
$ |
510.9 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Refining margin adjusted for FIFO impact* |
|
$ |
321.9 |
|
$ |
91.5 |
|
$ |
1,164.5 |
|
$ |
795.4 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Coffeyville Refinery Key Operating Statistics: |
|
|
|
|
|
|
|
|
| ||||
|
Per crude oil throughput barrel: |
|
|
|
|
|
|
|
|
| ||||
|
Refining margin* |
|
$ |
27.07 |
|
$ |
16.80 |
|
$ |
26.81 |
|
$ |
22.34 |
|
|
FIFO impact (favorable) unfavorable |
|
1.01 |
|
(4.61 |
) |
0.91 |
|
(0.68 |
) | ||||
|
Refining margin adjusted for FIFO impact* |
|
28.08 |
|
12.19 |
|
27.72 |
|
21.66 |
| ||||
|
Gross profit |
|
20.80 |
|
1.26 |
|
20.15 |
|
13.91 |
| ||||
|
Direct operating expenses and major scheduled turnaround expense |
|
4.75 |
|
13.28 |
|
5.01 |
|
6.63 |
| ||||
|
Direct operating expenses and major scheduled turnaround expense per barrel sold |
|
$ |
4.20 |
|
$ |
13.84 |
|
$ |
4.52 |
|
$ |
6.45 |
|
|
Barrels sold (barrels per day) |
|
140,943 |
|
78,180 |
|
127,122 |
|
103,430 |
| ||||
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||||||
|
Coffeyville Refinery Throughput and Production Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(barrels per day) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughput: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweet |
|
93,692 |
|
67.5 |
% |
67,286 |
|
80.0 |
% |
91,580 |
|
74.3 |
% |
80,835 |
|
76.5 |
% |
|
Light/medium sour |
|
15,684 |
|
11.3 |
% |
3,475 |
|
4.1 |
% |
5,601 |
|
4.6 |
% |
1,323 |
|
1.3 |
% |
|
Heavy sour |
|
15,194 |
|
10.9 |
% |
10,713 |
|
12.7 |
% |
17,608 |
|
14.3 |
% |
18,460 |
|
17.5 |
% |
|
Total crude oil throughput |
|
124,570 |
|
89.7 |
% |
81,474 |
|
96.8 |
% |
114,789 |
|
93.2 |
% |
100,618 |
|
95.3 |
% |
|
All other feedstocks and blendstocks |
|
14,259 |
|
10.3 |
% |
2,694 |
|
3.2 |
% |
8,412 |
|
6.8 |
% |
4,921 |
|
4.7 |
% |
|
Total throughput |
|
138,829 |
|
100.0 |
% |
84,168 |
|
100.0 |
% |
123,201 |
|
100.0 |
% |
105,539 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline |
|
71,259 |
|
50.5 |
% |
33,975 |
|
40.2 |
% |
61,998 |
|
49.6 |
% |
46,707 |
|
44.0 |
% |
|
Distillate |
|
57,382 |
|
40.7 |
% |
35,646 |
|
42.2 |
% |
52,429 |
|
41.9 |
% |
44,414 |
|
41.9 |
% |
|
Other (excluding internally produced fuel) |
|
12,457 |
|
8.8 |
% |
14,885 |
|
17.6 |
% |
10,629 |
|
8.5 |
% |
15,000 |
|
14.1 |
% |
|
Total refining production (excluding internally produced fuel) |
|
141,098 |
|
100.0 |
% |
84,506 |
|
100.0 |
% |
125,056 |
|
100.0 |
% |
106,121 |
|
100.0 |
% |
|
|
|
Three Months Ended |
|
Year Ended |
| ||
|
|
|
(in millions, except operating statistics) |
| ||||
|
Wynnewood Refinery Financial Results: |
|
|
|
|
| ||
|
Net sales |
|
$ |
266.5 |
|
$ |
2,647.1 |
|
|
Cost of product sold |
|
236.4 |
|
2,160.9 |
| ||
|
Refining margin* |
|
30.1 |
|
486.2 |
| ||
|
Direct operating expenses |
|
30.1 |
|
113.7 |
| ||
|
Major scheduled turnaround expense |
|
89.1 |
|
102.5 |
| ||
|
Depreciation and amortization |
|
8.8 |
|
34.5 |
| ||
|
Gross profit (loss) |
|
$ |
(97.9 |
) |
$ |
235.5 |
|
|
|
|
|
|
|
| ||
|
Refining margin adjusted for FIFO impact* |
|
$ |
31.5 |
|
$ |
506.5 |
|
|
|
|
|
|
|
| ||
|
Wynnewood Refinery Key Operating Statistics: |
|
|
|
|
| ||
|
Per crude oil throughput barrel: |
|
|
|
|
| ||
|
Refining margin* |
|
$ |
14.04 |
|
$ |
24.34 |
|
|
FIFO impact (favorable) unfavorable |
|
0.63 |
|
1.01 |
| ||
|
Refining margin adjusted for FIFO impact* |
|
14.67 |
|
25.35 |
| ||
|
Gross profit |
|
(45.81 |
) |
11.79 |
| ||
|
Direct operating expenses and major scheduled turnaround expense |
|
55.76 |
|
10.83 |
| ||
|
Direct operating expenses and major scheduled turnaround expense per barrel sold |
|
$ |
49.90 |
|
$ |
9.76 |
|
|
Barrels sold (barrels per day) |
|
25,974 |
|
60,496 |
| ||
|
|
|
Three Months Ended |
|
Year Ended |
| ||||
|
Wynnewood Refinery Throughput and Production Data: |
|
|
|
|
|
|
|
|
|
|
(barrels per day) |
|
|
|
|
|
|
|
|
|
|
Throughput: |
|
|
|
|
|
|
|
|
|
|
Sweet |
|
18,421 |
|
77.5 |
% |
38,834 |
|
68.2 |
% |
|
Light/medium sour |
|
4,824 |
|
20.3 |
% |
15,733 |
|
27.6 |
% |
|
Heavy sour |
|
— |
|
— |
% |
— |
|
— |
% |
|
Total crude oil throughput |
|
23,245 |
|
97.8 |
% |
54,567 |
|
95.8 |
% |
|
All other feedstocks and blendstocks |
|
529 |
|
2.2 |
% |
2,379 |
|
4.2 |
% |
|
Total throughput |
|
23,774 |
|
100.0 |
% |
56,946 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
Gasoline |
|
11,596 |
|
51.3 |
% |
27,789 |
|
50.6 |
% |
|
Distillate |
|
7,195 |
|
31.8 |
% |
20,375 |
|
37.2 |
% |
|
Other (excluding internally produced fuel) |
|
3,827 |
|
16.9 |
% |
6,633 |
|
12.2 |
% |
|
Total refining production (excluding internally produced fuel) |
|
22,618 |
|
100.0 |
% |
54,797 |
|
100.0 |
% |
Nitrogen Fertilizer Segment Operating Data
The following tables set forth information about the Nitrogen Fertilizer segment operated by CVR Partners. Reconciliations of certain non-GAAP financial measures are provided under “Use of Non-GAAP Financial Measures” below. Additional discussion of operating results for the Nitrogen Fertilizer segment for the quarter ended December 31, 2012 are included in CVR Partners’ press release dated February 27, 2013.
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
(in millions, except as noted) |
| ||||||||||
|
Nitrogen Fertilizer Segment Financial Results: |
|
|
|
|
|
|
|
|
| ||||
|
Net sales |
|
$ |
67.6 |
|
$ |
87.6 |
|
$ |
302.3 |
|
$ |
302.9 |
|
|
Cost of product sold |
|
11.5 |
|
14.4 |
|
46.1 |
|
42.5 |
| ||||
|
Direct operating expenses |
|
24.6 |
|
21.1 |
|
90.8 |
|
86.5 |
| ||||
|
Major scheduled turnaround expense |
|
4.6 |
|
— |
|
4.8 |
|
— |
| ||||
|
Insurance recovery — business interruption |
|
— |
|
— |
|
— |
|
(3.4 |
) | ||||
|
Selling, general and administrative expenses |
|
6.0 |
|
4.6 |
|
24.1 |
|
22.2 |
| ||||
|
Depreciation and amortization |
|
4.9 |
|
4.9 |
|
20.7 |
|
18.9 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Operating income |
|
$ |
16.0 |
|
$ |
42.6 |
|
$ |
115.8 |
|
$ |
136.2 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Adjusted Nitrogen Fertilizer EBITDA* |
|
$ |
27.1 |
|
$ |
48.4 |
|
$ |
148.2 |
|
$ |
162.6 |
|
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
(in millions, except as noted) |
| ||||||||||
|
Nitrogen Fertilizer Segment Key Operating Statistics: |
|
|
|
|
|
|
|
|
| ||||
|
Production (thousand tons): |
|
|
|
|
|
|
|
|
| ||||
|
Ammonia (gross produced) (1) |
|
87.7 |
|
100.8 |
|
390.0 |
|
411.2 |
| ||||
|
Ammonia (net available for sale) (1) |
|
35.3 |
|
27.5 |
|
124.6 |
|
116.8 |
| ||||
|
UAN |
|
127.3 |
|
178.3 |
|
643.8 |
|
714.1 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Petroleum coke consumed (thousand tons) |
|
109.7 |
|
126.3 |
|
487.3 |
|
517.3 |
| ||||
|
Petroleum coke (cost per ton) |
|
$ |
30 |
|
$ |
42 |
|
$ |
33 |
|
$ |
33 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Sales (thousand tons): |
|
|
|
|
|
|
|
|
| ||||
|
Ammonia |
|
38.4 |
|
29.3 |
|
127.8 |
|
112.8 |
| ||||
|
UAN |
|
133.0 |
|
184.6 |
|
643.5 |
|
709.3 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Product pricing (plant gate) (dollars per ton) (2): |
|
|
|
|
|
|
|
|
| ||||
|
Ammonia |
|
$ |
676 |
|
$ |
606 |
|
$ |
613 |
|
$ |
579 |
|
|
UAN |
|
$ |
274 |
|
$ |
334 |
|
$ |
303 |
|
$ |
284 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
On-stream factors (3): |
|
|
|
|
|
|
|
|
| ||||
|
Gasification |
|
79.0 |
% |
97.6 |
% |
92.6 |
% |
99.0 |
% | ||||
|
Ammonia |
|
76.6 |
% |
97.1 |
% |
91.1 |
% |
97.7 |
% | ||||
|
UAN |
|
68.6 |
% |
94.1 |
% |
86.4 |
% |
95.5 |
% | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Market Indicators: |
|
|
|
|
|
|
|
|
| ||||
|
Ammonia — Southern Plains (dollars per ton) |
|
$ |
748 |
|
$ |
651 |
|
$ |
647 |
|
$ |
619 |
|
|
UAN — Mid Cornbelt (dollars per ton) |
|
$ |
361 |
|
$ |
400 |
|
$ |
369 |
|
$ |
379 |
|
Cost of product sold, direct operating expenses and selling, general and administrative expenses are all reflected exclusive of depreciation and amortization.
* See Use of Non-GAAP Financial Measures below.
(1) Gross tons produced for ammonia represent the total ammonia produced, including ammonia produced that was upgraded into UAN. The net tons available for sale represent the ammonia available for sale that was not upgraded into UAN.
(2) Plant gate sales per ton represent net sales less freight and hydrogen revenue divided by product sales volume in tons in the reporting period and is shown in order to provide a pricing measure that is comparable across the fertilizer industry.
(3) On-stream factor is the total number of hours operated divided by the total number of hours in the reporting period and is included as a measure of operating efficiency. Excluding the impact of the Linde air separation unit outage and the major scheduled turnaround, the on-stream factors for the three months ended December 31, 2012 would have been 99.7% for gasifier, 98.8% for ammonia and 91.5% for UAN. Excluding the impact of the Linde air separation unit outage, the on-stream factors for the three months ended December 31, 2011 would have been 97.6% for gasifier, 97.1% for ammonia and 94.1% for UAN.
Excluding the impact of the Linde air separation unit outage and the major scheduled turnaround, the on-stream factors for the year ended December 31, 2012 would have been 98.1% for gasifier, 97.1% for ammonia and 92.8% for UAN. Excluding the impact of the Linde air separation unit outage, the on-stream factors for the year ended December 31, 2011 would have been 99.2% for gasifier, 98.0% for ammonia and 95.7% for UAN.
Use of Non-GAAP Financial Measures
To supplement the actual results in accordance with GAAP for the applicable periods, the Company also uses non-GAAP measures as discussed below, which are reconciled to GAAP-based results. These non-GAAP financial measures should not be considered an alternative for GAAP results. The adjustments are provided to enhance an overall understanding of the Company’s financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.
Adjusted net income is not a recognized term under GAAP and should not be substituted for net income (loss) as a measure of our performance but rather should be utilized as a supplemental measure of financial performance in evaluating our business. Management believes that adjusted net income provides relevant and useful information that enables external users of our financial statements, such as industry analysts, investors, lenders and rating agencies to better understand and evaluate our ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance.
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
(in millions, except per share data) |
| ||||||||||
|
Reconciliation of Net Income to Adjusted Net Income: |
|
|
|
|
|
|
|
|
| ||||
|
Net Income attributable to CVR Energy stockholders |
|
$ |
40.2 |
|
$ |
65.9 |
|
$ |
378.6 |
|
$ |
345.8 |
|
|
Adjustments (all net of taxes): |
|
|
|
|
|
|
|
|
| ||||
|
FIFO impact (favorable) unfavorable |
|
7.9 |
|
(21.3 |
) |
35.5 |
|
(15.5 |
) | ||||
|
Share-based compensation |
|
6.2 |
|
2.1 |
|
22.5 |
|
18.6 |
| ||||
|
Loss on extinguishment of debt |
|
22.8 |
|
— |
|
22.8 |
|
1.3 |
| ||||
|
Major scheduled turnaround expense |
|
56.1 |
|
32.8 |
|
77.2 |
|
40.2 |
| ||||
|
Loss on disposition of fixed assets |
|
— |
|
0.6 |
|
— |
|
1.5 |
| ||||
|
Unrealized (gain) loss on derivatives, net |
|
(29.8 |
) |
(55.8 |
) |
90.0 |
|
(51.7 |
) | ||||
|
Expenses associated with proxy matters |
|
— |
|
— |
|
26.8 |
|
— |
| ||||
|
Expenses associated with the acquisition of Gary-Williams (1) |
|
0.4 |
|
5.2 |
|
6.7 |
|
5.5 |
| ||||
|
Adjusted net income |
|
$ |
103.8 |
|
$ |
29.5 |
|
$ |
660.1 |
|
$ |
345.7 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Adjusted net income per diluted share |
|
$ |
1.20 |
|
$ |
0.34 |
|
$ |
7.55 |
|
$ |
3.94 |
|
(1) Legal, professional and integration expenses related to the December 2011 acquisition of Gary-Williams .
Refining margin per crude oil throughput barrel is a measurement calculated as the difference between net sales and cost of product sold (exclusive of depreciation and amortization). Refining margin is a non-GAAP measure that we believe is important to investors in evaluating our refineries’ performance as a general indication of the amount above our cost of product sold that we are able to sell refined products. Each of the components used in this calculation (net sales and cost of product sold exclusive of depreciation and amortization) can be taken directly from our Statement of Operations. Our
calculation of refining margin may differ from similar calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure. In order to derive the refining margin per crude oil throughput barrel, we utilize the total dollar figures for refining margin as derived above and divide by the applicable number of crude oil throughput barrels for the period. We believe that refining margin is important to enable investors to better understand and evaluate our ongoing operating results and allow for greater transparency in the review of our overall financial, operational and economic performance.
Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference between net sales and cost of product sold (exclusive of depreciation and amortization) adjusted for FIFO impacts. Refining margin adjusted for FIFO impact is a non-GAAP measure that we believe is important to investors in evaluating our refineries’ performance as a general indication of the amount above our cost of product sold (taking into account the impact of our utilization of FIFO) that we are able to sell refined products. Our calculation of refining margin adjusted for FIFO impact may differ from calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure. Under our FIFO accounting method, changes in crude oil prices can cause fluctuations in the inventory valuation of our crude oil, work in process and finished goods, thereby resulting in favorable FIFO impacts when crude oil prices increase and unfavorable FIFO impacts when crude oil prices decrease.
Adjusted Petroleum and Nitrogen Fertilizer EBITDA represents operating income adjusted for FIFO impacts (favorable) unfavorable, share-based compensation, major scheduled turnaround expenses, realized gain (loss) on derivatives, net, loss on disposition of fixed assets, depreciation and amortization and other income (expense). Adjusted EBITDA by operating segment is not a recognized term under GAAP and should not be substituted for operating income as a measure of performance but should be utilized as a supplemental measure of performance in evaluating our business. Management believes that adjusted EBITDA by operating segment provides relevant and useful information that enables investors to better understand and evaluate our ongoing operating results and allows for greater transparency in the reviewing of our overall financial, operational and economic performance. Below is a reconciliation of operating income to adjusted EBITDA for the petroleum and nitrogen fertilizer segments for the three months and year ended December 31, 2012 and 2011:
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
(in millions) |
| ||||||||||
|
Petroleum: |
|
|
|
|
|
|
|
|
| ||||
|
Petroleum operating income |
|
$ |
121.3 |
|
$ |
(3.3 |
) |
$ |
1,012.5 |
|
$ |
465.7 |
|
|
FIFO impacts (favorable) unfavorable |
|
12.9 |
|
(35.1 |
) |
58.4 |
|
(25.6 |
) | ||||
|
Share-based compensation |
|
4.7 |
|
0.7 |
|
13.5 |
|
8.7 |
| ||||
|
Major scheduled turnaround expenses |
|
89.1 |
|
54.1 |
|
123.7 |
|
66.4 |
| ||||
|
Loss on disposition of fixed assets |
|
— |
|
1.0 |
|
— |
|
2.5 |
| ||||
|
Realized gain (loss) on derivatives, net |
|
(57.1 |
) |
11.1 |
|
(137.6 |
) |
(7.2 |
) | ||||
|
Depreciation and amortization |
|
27.3 |
|
19.0 |
|
107.6 |
|
69.9 |
| ||||
|
Other income |
|
— |
|
0.1 |
|
0.8 |
|
0.5 |
| ||||
|
Adjusted Petroleum EBITDA |
|
$ |
198.2 |
|
$ |
47.6 |
|
$ |
1,178.9 |
|
$ |
580.9 |
|
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
(in millions) |
| ||||||||||
|
Nitrogen Fertilizer: |
|
|
|
|
|
|
|
|
| ||||
|
Nitrogen Fertilizer operating income |
|
$ |
16.0 |
|
$ |
42.6 |
|
$ |
115.8 |
|
$ |
136.2 |
|
|
Share-based compensation |
|
1.6 |
|
0.9 |
|
6.8 |
|
7.3 |
| ||||
|
Depreciation and amortization |
|
4.9 |
|
4.9 |
|
20.7 |
|
18.9 |
| ||||
|
Major scheduled turnaround expense |
|
4.6 |
|
— |
|
4.8 |
|
— |
| ||||
|
Other income, net |
|
— |
|
— |
|
0.1 |
|
0.2 |
| ||||
|
Adjusted Nitrogen Fertilizer EBITDA |
|
$ |
27.1 |
|
$ |
48.4 |
|
$ |
148.2 |
|
$ |
162.6 |
|
Derivatives Summary. To reduce the basis risk between the price of products for Group 3 and that of the NYMEX associated with selling forward derivative contracts for NYMEX crack spreads, we may enter into basis swap positions to lock the price difference. If the difference between the price of products on the NYMEX and Group 3 (or some other price benchmark as we may deem appropriate) is different than the value contracted in the swap, then we will receive from or owe to the counterparty the difference on each unit of product contracted in the swap, thereby completing the locking of our margin. From time to time our Petroleum segment holds various NYMEX positions through a third-party clearing house. In addition, the Petroleum segment enters into commodity swap contracts. The physical volumes are not exchanged and these contracts are net settled with cash.
The table below summarizes our open commodity derivatives positions as of December 31, 2012. The positions are primarily in the form of ‘crack spread’ swap agreements with financial counterparties, wherein the Company will receive the fixed prices noted below.
|
Commodity Swaps |
|
Barrels |
|
Fixed Price(1) |
| |
|
First Quarter 2013 |
|
6,600,000 |
|
$ |
25.02 |
|
|
Second Quarter 2013 |
|
5,850,000 |
|
27.25 |
| |
|
Third Quarter 2013 |
|
5,625,000 |
|
25.89 |
| |
|
Fourth Quarter 2013 |
|
4,875,000 |
|
26.98 |
| |
|
|
|
|
|
|
| |
|
First Quarter 2014 |
|
150,000 |
|
32.95 |
| |
|
Second Quarter 2014 |
|
75,000 |
|
32.00 |
| |
|
Third Quarter 2014 |
|
75,000 |
|
32.00 |
| |
|
Fourth Quarter 2014 |
|
75,000 |
|
32.00 |
| |
|
|
|
|
|
|
| |
|
Total |
|
23,325,000 |
|
$ |
26.32 |
|
(1) Weighted-average price of all positions for period indicated.