Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 14, 2011 (April 13, 2011)
CVR ENERGY, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-33492 | 61-1512186 | ||
| (State or other jurisdiction | (Commission File Number) | (I.R.S. Employer | ||
| of incorporation) | Identification Number) |
2277 Plaza Drive, Suite 500
Sugar Land, Texas 77479
(Address of principal executive offices,
including zip code)
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 (see General Instruction
A.2. below):
| 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)) |
TABLE OF CONTENTS
| Item 2.01 Completion of Acquisition or Disposition of Assets | ||||||||
| Item 8.01. Other Events | ||||||||
| Item 9.01 Financial Statements and Exhibits | ||||||||
| SIGNATURES | ||||||||
| Exhibit Index | ||||||||
| EX-99.1 | ||||||||
| EX-99.2 | ||||||||
Table of Contents
Item 2.01 Completion of Acquisition or Disposition of Assets.
On April 13, 2011, CVR Partners, LP (the “Partnership”) completed its initial public offering
(the “Offering”) of 22,080,000 common units representing limited partner interests at a public
offering price of $16.00 per common unit pursuant to a Registration Statement on Form S-1, as
amended (File No. 333-171270). To effectuate the Offering, the Partnership, Coffeyville Resources
Nitrogen Fertilizers, LLC, a direct wholly-owned subsidiary of the Partnership, CVR GP, LLC, the
general partner of the Partnership that is our indirect wholly-owned subsidiary and Coffeyville
Resources, LLC (“CRLLC”), our wholly-owned subsidiary, and Morgan Stanley & Co. Incorporated,
Barclays Capital Inc. and Goldman, Sachs & Co., as representatives of the several underwriters
named therein, entered into an Underwriting Agreement, dated April 7, 2011 (the “Underwriting
Agreement”). The gross proceeds to the Partnership were $353.3 million, of which $135.4 million
were paid as a dividend to CRLLC. The common units sold by the Underwriters to the public in the
Offering represent approximately 30.2% of the Partnership common units outstanding as of the
closing of the Offering. Our wholly-owned subsidiary, Coffeyville Resources, LLC (“CRLLC”), owns
the remaining 69.8% of the Partnership’s common units.
The description of the Underwriting Agreement provided above is qualified in its entirety by
reference to the full text of the Underwriting Agreement which is incorporated by reference into
this current report on Form 8-K.
Item 8.01. Other Events.
Tender Offer
On April 14, 2011, we announced that CRLLC and Coffeyville Finance, Inc. have commenced an
offer to purchase for cash up to $100 million aggregate principal amount of CRLLC’s 9% First Lien
Senior Secured Notes due 2015 and 10 7/8% Second Lien Senior Secured Notes due 2017 (collectively,
the “Notes”) at a cash purchase price of 103% of the principal amount of the Notes plus accrued and
unpaid interest to the date the Notes are accepted for payment pursuant to the offer. The offer
will expire at 10:00 a.m., New York City time, on May 16, 2011, unless extended. The offer is being
made pursuant to the indentures governing the Notes as a result of the closing of the Offering,
which constitutes a “Fertilizer Business Event” under the indentures. A copy of the press release
announcing the tender offer is filed as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
Pro Forma Financial Information.
Attached as Exhibit 99.2 to this report is the unaudited pro forma consolidated balance sheet
of CVR Energy as of December 31, 2010 and the unaudited pro forma consolidated statement of
operations of CVR Energy for the year ended December 31, 2010 and the accompanying notes. The pro
forma financial statements of CVR Energy give effect to the Offering as if it had occurred on
January 1, 2010 (for the statement of operations) and December 31, 2010 (for the balance sheet).
Exhibits
A list of exhibits filed herewith is contained in the exhibit index following the signature
page hereto and is incorporated by reference herein.
Table of Contents
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.
Date: April 14, 2011
| CVR ENERGY, INC. |
||||
| By: | /s/ Susan M. Ball | |||
| Susan M. Ball | ||||
| Vice President, Chief Accounting Officer and Assistant Treasurer | ||||
Table of Contents
Exhibit Index
| Exhibit No. | Description | |
2.1
|
Underwriting Agreement (incorporated by reference to Exhibit 1.1 the Current Report on Form 8-K, dated April 13, 2011, of CVR Energy, Inc.) | |
99.1
|
Press release issued April 14, 2011 by CVR Energy, Inc. | |
99.2
|
Unaudited pro forma consolidated financial statements of CVR Energy, Inc. |
Exhibit 99.1
CVR Energy Commences Offer to Purchase
Up To $100 Million Principal Amount
of First Lien Senior Secured Notes and
Second Lien Senior Secured Notes
Up To $100 Million Principal Amount
of First Lien Senior Secured Notes and
Second Lien Senior Secured Notes
SUGAR LAND, Texas (April 14, 2011) — CVR Energy, Inc. (NYSE: CVI) announced today that its
wholly-owned subsidiaries, Coffeyville Resources, LLC and Coffeyville Finance, Inc. (the
“Issuers”), have commenced an offer to purchase up to $100 million aggregate principal amount of
their 9% First Lien Senior Secured Notes due 2015 (the “First Lien Notes”) and their 10 7/8% Second
Lien Senior Secured Notes due 2017 (the “Second Lien Notes” and, together with the First Lien
Notes, the “Notes”) at a cash purchase price of 103% of the principal amount of Notes, plus accrued
and unpaid interest to the date Notes are accepted for payment pursuant to the offer.
The offer will expire at 10:00 a.m., New York City time, on May 16, 2011, unless extended. In
order to participate in the offer, holders must validly tender Notes prior to the expiration time.
Any holder desiring to tender Notes should refer to the Offer to Purchase being circulated to
holders of the Notes to ensure valid tender of such Notes.
Wells Fargo Bank, National Association, the trustee under the indentures governing the Notes, is
serving as the depositary for the offer. Questions regarding the offer should be directed to Wells
Fargo Bank, National Association, at (800) 344-5128, option 0. Requests for documents relating to
the offer should be directed to Wells Fargo Bank, National Association.
This press release is for informational purposes only and does not constitute an offer to purchase
nor a solicitation of an offer to sell any security and shall not constitute an offer, solicitation
or sale in any jurisdiction in which such offering would be unlawful. The offer will be made only
pursuant to the Offer to Purchase, dated April 14, 2011, and related materials.
The offer is being made pursuant to the indentures governing the Notes as a result of the closing
of the initial public offering of CVR Partners, LP, which constitutes a fertilizer business event
as defined in the indentures governing the Notes.
This press release contains 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,” “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 key risk factors, please see the risk factors and other
disclosures included in our annual report on Form 10-K, and other filings with the Securities and
Exchange Commission, which may be
obtained at the Securities and Exchange Commission’s website at
www.sec.gov or our website at www.cvrenergy.com as well as the risk factors and other disclosures
contained in the Offer to Purchase, dated April 14, 2011. 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, Inc. undertakes no duty to update its forward-looking statements.
# # #
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy, Inc.’s subsidiary and affiliated businesses include
an independent refiner that operates a 115,000 barrel per day refinery in Coffeyville, Kan., and
markets high value transportation fuels supplied to customers through tanker trucks and pipeline
terminals; a crude oil gathering system serving central Kansas, Oklahoma, western Missouri and
southwest Nebraska; an asphalt and refined fuels storage and terminal business in Phillipsburg,
Kan.; and, through a limited partnership, of which it owns approximately 70% of the limited
partnership’s common units, an ammonia and urea ammonium nitrate fertilizer business located in
Coffeyville, Kan.
For further information, please contact: |
||
Investor Relations:
|
Media Relations: | |
Stirling Pack, Jr.
|
Steve Eames | |
281-207-3464
|
281-207-3550 | |
Jay Finks
|
MediaRelations@CVREnergy.com | |
281-207-3588 |
||
InvestorRelations@CVREnergy.com |
2
Exhibit
99.2
CVR
ENERGY, INC. AND SUBSIDIARIES
UNAUDITED
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated financial statements of CVR
Energy, Inc. have been derived from the audited historical
financial statements of CVR Energy, Inc. for the year ended and
as of December 31, 2010, which are included in CVR Energy,
Inc.’s
Form 10-K
for the year ended December 31, 2010.
The pro forma consolidated balance sheet as of December 31,
2010 and the pro forma consolidated statement of operations for
the year ended December 31, 2010 have been adjusted to give
effect to the following transactions:
| • | The interests of Coffeyville Resources, LLC (“CRLLC”) and CVR Special GP, LLC (“Special GP”) in CVR Partners, LP (“CVR Partners”) were converted into 50,920 and 50,869,080 common units, respectively, and Special GP, a wholly-owned subsidiary of CRLLC, was merged with and into CRLLC, with CRLLC continuing as the surviving entity; | |
| • | CVR Partners offered and sold 22,080,000 common units to the public at a public offering price of $16.00 per unit and paid related commissions and expenses; | |
| • | CVR Partners’ general partner sold its incentive distribution rights, or IDRs, to CVR Partners for $26.0 million in cash (representing fair market value), and CVR Partners extinguished such IDRs; | |
| • | CVR GP, LLC, the general partner of CVR Partners (“CVR GP”) and CRLLC, entered into a second amended and restated agreement of limited partnership; | |
| • | CVR Partners entered into a new credit facility, which included a $125.0 million term loan and a $25.0 million revolving credit facility both due in 2016, drew the $125.0 million term loan in full, and paid associated financing costs; and | |
| • | Coffeyville Acquisition III LLC, the then-owner of CVR GP, sold CVR GP and its non-economic general partner interest to CRLLC for nominal consideration. |
The pro forma adjustments have been prepared as if the
transactions described above had taken place on
December 31, 2010, in the case of the pro forma balance
sheet, or as of January 1, 2010, in the case of the pro
forma statement of operations.
The unaudited pro forma consolidated financial statements are
not necessarily indicative of the results that we would have
achieved had the transactions described herein actually taken
place at the dates indicated, and do not purport to be
indicative of future financial position or operating results.
The unaudited pro forma consolidated financial statements do not
reflect the repurchase of up to $100.0 million of CRLLC and
Coffeyville Finance’s outstanding notes that may be
tendered pursuant to the offer to purchase dated April 14,
2011. See “Tender Offer” under Item 8.01 of this
Form 8-K
for a discussion of the tender offer. The unaudited pro forma
consolidated financial statements should be read in conjunction
with the audited financial statements of CVR Energy, Inc., the
related notes and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations”
included in CVR Energy, Inc.’s
Form 10-K
for the year ended December 31, 2010.
The pro forma adjustments are based on available information and
certain assumptions that we believe are reasonable. The pro
forma adjustments and the assumptions included therein are
described in the accompanying notes.
1
CVR
Energy, Inc. and Subsidiaries
Unaudited
Pro Forma Consolidated Balance Sheet
As of
December 31, 2010
|
Actual as of |
Pro Forma |
Pro Forma as of |
||||||||||
| December 31, 2010 | Adjustments | December 31, 2010 | ||||||||||
| (In thousands) | ||||||||||||
|
ASSETS
|
||||||||||||
|
Current assets:
|
||||||||||||
|
Cash and cash equivalents
|
$ | 200,049 | $ | 353,280 | (a) | $ | 621,273 | |||||
| (28,056 | )(b) | |||||||||||
| 125,000 | (c) | |||||||||||
| (3,000 | )(d) | |||||||||||
| (26,000 | )(e) | |||||||||||
|
Accounts receivable, net of allowance for doubtful accounts of
$722
|
80,169 | — | 80,169 | |||||||||
|
Inventories
|
247,172 | — | 247,172 | |||||||||
|
Prepaid expenses and other current assets
|
28,616 | (2,089 | )(b) | 26,527 | ||||||||
|
Income tax receivable
|
— | — | — | |||||||||
|
Deferred income taxes
|
43,351 | (10,034 | )(f) | 33,317 | ||||||||
|
Total current assets
|
599,357 | 409,101 | 1,008,458 | |||||||||
|
Property, plant, and equipment, net of accumulated depreciation
|
1,081,312 | — | 1,081,312 | |||||||||
|
Intangible assets, net
|
344 | — | 344 | |||||||||
|
Goodwill
|
40,969 | — | 40,969 | |||||||||
|
Deferred financing costs, net
|
10,601 | 3,000 | (d) | 13,601 | ||||||||
|
Insurance receivable
|
3,570 | — | 3,570 | |||||||||
|
Other long-term assets
|
4,031 | — | 4,031 | |||||||||
|
Total assets
|
$ | 1,740,184 | $ | 412,101 | $ | 2,152,285 | ||||||
| LIABILITIES AND EQUITY | ||||||||||||
|
Current liabilities:
|
||||||||||||
|
Current portion of long-term debt
|
$ | — | $ | — | $ | — | ||||||
|
Note payable and capital lease obligations
|
8,014 | — | 8,014 | |||||||||
|
Accounts payable
|
155,220 | (1,415 | )(b) | 153,805 | ||||||||
|
Personnel accruals
|
29,151 | — | 29,151 | |||||||||
|
Accrued taxes other than income taxes
|
21,266 | — | 21,266 | |||||||||
|
Income taxes payable
|
7,983 | 13,309 | (f) | 21,292 | ||||||||
|
Deferred revenue
|
18,685 | — | 18,685 | |||||||||
|
Other current liabilities
|
25,396 | — | 25,396 | |||||||||
|
Total current liabilities
|
265,715 | 11,894 | 277,609 | |||||||||
|
Long-term liabilities:
|
||||||||||||
|
Long-term debt, net of current portion
|
468,954 | 125,000 | (c) | 593,954 | ||||||||
|
Accrued environmental liabilities, net of current portion
|
2,552 | — | 2,552 | |||||||||
|
Deferred income taxes
|
298,943 | (23,343 | )(f) | 344,059 | ||||||||
| 68,459 | (g) | |||||||||||
|
Other long-term liabilities
|
3,847 | — | 3,847 | |||||||||
|
Total long-term liabilities
|
774,296 | 170,116 | 944,412 | |||||||||
|
Commitments and contingencies
|
||||||||||||
|
Equity:
|
||||||||||||
|
CVR stockholders’ equity:
|
||||||||||||
|
Common stock $0.01 par value per share,
350,000,000 shares authorized, 86,435,672 shares issued
|
864 | — | 864 | |||||||||
|
Additional
paid-in-capital
|
467,871 | 216,658 | (a) | 571,940 | ||||||||
| (28,730 | )(b) | |||||||||||
| (15,400 | )(e) | |||||||||||
| (68,459 | )(g) | |||||||||||
|
Retained earnings
|
221,079 | — | 221,079 | |||||||||
|
Treasury stock, 21,891, at cost
|
(243 | ) | — | (243 | ) | |||||||
|
Accumulated other comprehensive income, net of tax
|
2 | — | 2 | |||||||||
|
Total CVR stockholders’ equity
|
689,573 | 104,069 | 793,642 | |||||||||
|
Noncontrolling interest
|
10,600 | 136,622 | (a) | 136,622 | ||||||||
| (10,600 | )(e) | |||||||||||
|
Total equity
|
700,173 | 230,091 | 930,264 | |||||||||
|
Total liabilities and equity
|
$ | 1,740,184 | $ | 412,101 | $ | 2,152,285 | ||||||
The accompanying notes are an integral part of these unaudited
pro forma consolidated financial statements.
2
CVR
Energy, Inc. and Subsidiaries
Unaudited
Pro Forma Consolidated Statement of Operations
For the
Year Ended December 31, 2010
|
Actual as of |
Pro Forma |
Pro Forma as of |
||||||||||
| December 31, 2010 | Adjustments | December 31, 2010 | ||||||||||
| (In thousands) | ||||||||||||
|
Net sales
|
$ | 4,079,768 | $ | — | $ | 4,079,768 | ||||||
|
Operating costs and expenses:
|
||||||||||||
|
Cost of product sold (exclusive of depreciation and amortization)
|
3,568,118 | — | 3,568,118 | |||||||||
|
Direct operating expenses (exclusive of depreciation and
amortization)
|
240,761 | — | 240,761 | |||||||||
|
Selling, general and administrative expenses (exclusive of
depreciation and amortization)
|
92,034 | — | 92,034 | |||||||||
|
Net costs associated with flood
|
(970 | ) | — | (970 | ) | |||||||
|
Depreciation and amortization
|
86,761 | — | 86,761 | |||||||||
|
Total operating costs and expenses
|
3,986,704 | — | 3,986,704 | |||||||||
|
Operating income
|
93,064 | — | 93,064 | |||||||||
|
Other income (expense):
|
||||||||||||
|
Interest expense and other financing costs
|
(50,268 | ) | (5,000 | )(a) | (56,003 | ) | ||||||
| (610 | )(b) | — | ||||||||||
| (125 | )(c) | — | ||||||||||
|
Interest income
|
2,211 | 650 | (d) | 2,861 | ||||||||
|
Gain (loss) on derivatives, net
|
(1,505 | ) | — | (1,505 | ) | |||||||
|
Loss on extinguishment of debt
|
(16,647 | ) | — | (16,647 | ) | |||||||
|
Other income, net
|
1,218 | — | 1,218 | |||||||||
|
Total other income (expense)
|
(64,991 | ) | (5,085 | ) | (70,076 | ) | ||||||
|
Income before income taxes and noncontrolling interest
|
28,073 | (5,085 | ) | 22,988 | ||||||||
|
Income tax expense
|
13,783 | (4,187 | )(e) | 9,596 | ||||||||
|
Net income
|
14,290 | (898 | ) | 13,392 | ||||||||
|
Less: Net income attributable to noncontrolling interest
|
— | 4,569 | (f) | 4,569 | ||||||||
|
Net income attributable to CVR Energy, Inc.
|
$ | 14,290 | $ | (5,467 | ) | $ | 8,823 | |||||
|
Basic earnings per share
|
$ | 0.17 | $ | 0.10 | ||||||||
|
Diluted earnings per share
|
$ | 0.16 | $ | 0.10 | ||||||||
|
Weighted-average common shares outstanding:
|
||||||||||||
|
Basic
|
86,340,342 | 86,340,342 | ||||||||||
|
Diluted
|
86,789,179 | 86,789,179 | ||||||||||
The accompanying notes are an integral part of these unaudited
pro forma consolidated financial statements.
3
CVR
ENERGY, INC. AND SUBSIDIARIES
NOTES TO
THE UNAUDITED PRO FORMA
CONSOLIDATED
FINANCIAL STATEMENTS
| (1) | Pro Forma Balance Sheet Adjustments and Assumptions |
(a) Reflects (1) the issuance by CVR Partners, LP (CVR
Partners) of 19,200,000 common units to the public at an initial
public offering price of $16.00 per common unit resulting in
aggregate gross proceeds of $307.2 million and (2) the
exercise by the underwriters of their option to sell 2,880,000
common units at $16.00 per common unit to cover over-allotments
resulting in aggregate gross proceeds of $46.1 million, for
a total of $353.3 million. Associated with this transaction
is the entry to record the noncontrolling interest at
approximately 30.2% of the total partners’ capital carrying
value at CVR Partners, with the excess recorded to additional
paid-in-capital
for CVR Energy.
(b) Reflects the payment of underwriting commissions of
$24.7 million and other estimated offering expenses of
$4.0 million for a total of $28.7 million which will
be allocated to the newly issued public common units of CVR
Partners and recorded in additional paid-in-capital for CVR
Energy. Of the $4.0 million in estimated offering costs,
$0.7 million had been prepaid and $1.4 million had
been accrued.
(c) Reflects term debt incurred by CVR Partners of
$125.0 million.
(d) Reflects the estimated deferred financing costs of
$3.0 million associated with the new credit facility of CVR
Partners.
(e) Reflects the purchase of the incentive distribution
rights of the managing general partner interest of CVR Partners
($26.0 million) which represents the fair market value.
(f) Reflects an increase to income taxes payable primarily
due to the taxable gain on distributions from CVR Partners to
CRLLC in excess of CRLLC’s tax basis in CVR Partners. The
change in deferred tax assets and deferred tax liabilities is
due to the reclassification of the net book versus tax basis
difference associated with the investment in CVR Partners to a
noncurrent deferred tax liability in conjunction with the
initial public offering of CVR Partners. Deferreds historically
were recorded based upon each separate component of the book
versus tax basis difference of CVR Partners’ assets and
liabilities.
(g) Reflects the deferred tax liability recorded associated
with the difference between the book carrying value of CVR
Energy’s investment in CVR Partners and the tax basis
resulting from gains recorded in additional
paid-in-capital.
| (2) | Pro Forma Statement of Operations Adjustments and Assumptions |
(a) Reflects the inclusion of interest expense relating to
the new credit facility of CVR Partners at an assumed rate of
4.0% with no balance outstanding under the revolver.
(b) Reflects the amortization of related debt issuance
costs of the new credit facility of CVR Partners over a five
year term.
(c) Reflects the commitment fee of 0.50% on the estimated
unused portion of the $25.0 million revolving credit
facility of CVR Partners.
(d) Reflects the inclusion of interest income earned on the
average cash balance of CVR Partners.
(e) Reflects adjustments attributable to the noncontrolling
interest and the reduction in pre-tax income.
(f) Reflects the removal of net income attributable to the
noncontrolling interest.
| (3) | Pro Forma Net Income per Common Share |
Pro forma net income per common share is determined by dividing
the pro forma net income that has been adjusted for adjustments
of interest expense, interest income, income tax expense and
income attributable
4
CVR
ENERGY, INC. AND SUBSIDIARIES
NOTES TO
THE UNAUDITED PRO FORMA
CONSOLIDATED
FINANCIAL STATEMENTS — (Continued)
to the noncontrolling interest by the weighted average common
shares outstanding to determine both the basic and diluted net
income per common share. The pro forma adjustments do not impact
the weighted average shares outstanding.
| (4) | Incremental Post-IPO Costs |
Upon completion of CVR Partners’ initial public offering,
CVR Partners anticipates incurring incremental general and
administrative expenses as a result of being a publicly traded
limited partnership, such as costs associated with SEC reporting
requirements, including annual and quarterly reports to
unitholders, tax return and
Schedule K-1
preparation and distribution, independent auditor fees, investor
relations activities and registrar and transfer agent fees. It
is estimated that these incremental general and administrative
expenses will be approximately $3.5 million per year. The
unaudited pro forma consolidated financial statements do not
reflect the $3.5 million in incremental expenses.
5