SUGAR LAND, Texas, May 1, 2014 /PRNewswire/ -- CVR Energy, Inc.
(NYSE: CVI) today announced first quarter 2014 net income of
$126.7 million, or $1.46 per diluted share, on net sales of
$2,447.4 million, compared to net
income of $165.0 million, or
$1.90 per diluted share, on net sales
of $2,352.4 million for the 2013
first quarter.
First quarter 2014 adjusted EBITDA, a non-GAAP financial
measure, was $154.1 million, compared
to first quarter 2013 adjusted EBITDA of $286.6 million.
"CVR Energy's first quarter results were driven by the solid
financial and operational performance of our petroleum and nitrogen
fertilizer subsidiaries," said Jack
Lipinski, CVR Energy's chief executive officer. "CVR
Refining's Coffeyville and
Wynnewood refineries posted a
record quarterly combined crude throughput rate for the quarter. At
CVR Partners, realized fertilizer prices and plant operations were
generally in line with the company's expectations."
The company also announced a first quarter 2014 cash dividend of
75 cents per share. The dividend, as
declared by CVR Energy's Board of Directors, will be paid on
May 19, 2014, to stockholders of
record on May 12, 2014.
Today, CVR Refining announced a 2014 first quarter cash
distribution of 98 cents per common
unit, and CVR Partners announced a 2014 first quarter cash
distribution of 38 cents per common
unit.
Petroleum Business
The petroleum business,
which is operated by CVR Refining and includes the Coffeyville and Wynnewood refineries, reported first quarter
2014 operating income of $164.6
million on net sales of $2,375.3
million, compared to operating income of $335.6 million on net sales of $2,274.0 million in the first quarter of
2013.
Refining margin adjusted for FIFO impact per crude oil
throughput barrel, a non-GAAP financial measure, was $15.98 in the 2014 first quarter, compared to
$26.44 during the same period in
2013. Direct operating expenses per barrel sold, exclusive of
depreciation and amortization, for the 2014 first quarter was
$5.08, compared to $4.64 in the first quarter of 2013.
First quarter 2014 throughputs of crude oil and all other
feedstocks and blendstocks totaled 214,056 bpd, compared to first
quarter 2013 throughputs of crude oil and all other feedstocks and
blendstocks of 204,590 bpd.
Nitrogen Fertilizers Business
The fertilizer
business operated by CVR Partners, reported first quarter 2014
operating income of $23.1 million on
net sales of $80.3 million, compared
to operating income of $36.8 million
on net sales of $81.4 million for the
first quarter of 2013.
For the first quarter of 2014, average realized plant gate
prices for urea ammonium nitrate (UAN) and ammonia were
$253 per ton and $479 per ton, respectively, compared to
$295 per ton and $663 per ton, respectively, for the same period
in 2013.
CVR Partners produced 91,000 tons of ammonia and purchased an
additional 22,900 tons of ammonia during the first quarter of 2014,
of which 8,900 net tons were available for sale while the rest was
upgraded to approximately 257,200 tons of UAN. In the 2013 first
quarter, the plant produced 111,400 tons of ammonia with 30,700 net
tons available for sale and the remainder upgraded to 196,200 tons
of UAN.
Cash and Debt
Consolidated cash and cash
equivalents, which included $413.4
million for CVR Refining and $85.9
million for CVR Partners, was $962.1
million at March 31, 2014.
Consolidated total debt was $675.9
million at March 31, 2014. The
company had no debt exclusive of CVR Refining's and CVR Partners'
debt.
First Quarter 2014 Earnings Conference Call
CVR Energy previously announced that it will host its first quarter
2014 Earnings Conference Call for analysts and investors on
Thursday, May 1, at 2:30 p.m. Eastern.
The Earnings Conference Call will be broadcast live over the
Internet at http://www.videonewswire.com/event.asp?id=98962. 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 for 14 days at
http://www.videonewswire.com/event.asp?id=98962. A repeat of the
conference call can be accessed by dialing (877) 660-6853,
conference ID 13580567.
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, any subsequently filed Quarterly Reports on Form 10-Q
and our other SEC filings. 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:
Investor Relations:
Jay
Finks
CVR Energy, Inc.
913-982-0481
InvestorRelations@CVREnergy.com
Media Relations:
Angie
Dasbach
CVR Energy, Inc.
281-207-3550
MediaRelations@CVREnergy.com
CVR Energy, Inc.
Financial and Operations Data (all information in this
release is unaudited unless noted otherwise).
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
|
(in millions,
except per share data)
|
Consolidated
Statement of Operations Data:
|
|
|
|
Net sales
|
$
|
2,447.4
|
|
|
$
|
2,352.4
|
|
Cost of product
sold
|
2,076.9
|
|
|
1,813.6
|
|
Direct operating
expenses
|
123.4
|
|
|
108.5
|
|
Selling, general and
administrative expenses
|
26.3
|
|
|
28.4
|
|
Depreciation and
amortization
|
37.3
|
|
|
34.2
|
|
Operating
income
|
183.5
|
|
|
367.7
|
|
Interest expense and
other financing costs
|
(10.1)
|
|
|
(15.4)
|
|
Interest
income
|
0.2
|
|
|
0.3
|
|
Gain (loss) on
derivatives, net
|
109.4
|
|
|
(20.0)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
(26.1)
|
|
Other income,
net
|
0.1
|
|
|
—
|
|
Income before income
tax expense
|
283.1
|
|
|
306.5
|
|
Income tax
expense
|
69.4
|
|
|
93.8
|
|
Net income
|
213.7
|
|
|
212.7
|
|
Less: Net income
attributable to noncontrolling interest
|
87.0
|
|
|
47.7
|
|
Net income
attributable to CVR Energy stockholders
|
$
|
126.7
|
|
|
$
|
165.0
|
|
|
|
|
|
Basic earnings per
share
|
$
|
1.46
|
|
|
$
|
1.90
|
|
Diluted earnings per
share
|
$
|
1.46
|
|
|
$
|
1.90
|
|
Dividends declared
per share
|
$
|
0.75
|
|
|
$
|
5.50
|
|
|
|
|
|
Adjusted
EBITDA*
|
$
|
154.1
|
|
|
$
|
286.6
|
|
Adjusted net
income*
|
$
|
81.9
|
|
|
$
|
156.8
|
|
Adjusted net income,
per diluted share*
|
$
|
0.94
|
|
|
$
|
1.81
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
Basic
|
86.8
|
|
|
86.8
|
|
Diluted
|
86.8
|
|
|
86.8
|
|
|
|
|
|
|
|
|
|
|
As of March 31,
2014
|
|
As of December 31,
2013
|
|
|
|
(audited)
|
|
(in
millions)
|
Balance Sheet
Data:
|
|
|
|
Cash and cash
equivalents
|
$
|
962.1
|
|
|
$
|
842.1
|
|
Working
capital
|
1,286.3
|
|
|
1,230.2
|
|
Total
assets
|
3,869.9
|
|
|
3,665.8
|
|
Total debt, including
current portion
|
675.9
|
|
|
676.2
|
|
Total CVR
stockholders' equity
|
1,250.1
|
|
|
1,188.6
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
|
(in
millions)
|
Cash Flow
Data:
|
|
|
|
Net cash flow
provided by (used in):
|
|
|
|
Operating
activities
|
$
|
281.3
|
|
|
$
|
278.3
|
|
Investing
activities
|
(61.9)
|
|
|
(63.7)
|
|
Financing
activities
|
(99.4)
|
|
|
(69.8)
|
|
Net cash
flow
|
$
|
120.0
|
|
|
$
|
144.8
|
|
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 the Corporate and Other segment
(along with elimination of intersegment transactions). The
Petroleum segment includes the operations of the Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with the
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. Detailed operating results for the Petroleum
segment for the quarter ended March 31,
2014 are included in CVR Refining's press release dated
May 1, 2014. 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 March 31,
2014 are included in CVR Partners' press release dated
May 1, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Petroleum (CVR
Refining)
|
|
Nitrogen
Fertilizer (CVR Partners)
|
|
Corporate and
Other
|
|
Consolidated
|
|
|
(in
millions)
|
Three Months Ended
March 31, 2014
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
2,375.3
|
|
|
$
|
80.3
|
|
|
$
|
(8.2)
|
|
|
$
|
2,447.4
|
|
Cost of product
sold
|
|
2,063.3
|
|
|
21.7
|
|
|
(8.1)
|
|
|
2,076.9
|
|
Direct operating
expenses
|
|
99.2
|
|
|
24.2
|
|
|
—
|
|
|
123.4
|
|
Selling, general and
administrative
|
|
18.7
|
|
|
4.6
|
|
|
3.0
|
|
|
26.3
|
|
Depreciation and
amortization
|
|
29.5
|
|
|
6.7
|
|
|
1.1
|
|
|
37.3
|
|
Operating income (loss)
|
|
$
|
164.6
|
|
|
$
|
23.1
|
|
|
$
|
(4.2)
|
|
|
$
|
183.5
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
57.9
|
|
|
$
|
3.4
|
|
|
$
|
0.6
|
|
|
$
|
61.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Petroleum (CVR
Refining)
|
|
Nitrogen
Fertilizer (CVR Partners)
|
|
Corporate and
Other
|
|
Consolidated
|
|
|
(in
millions)
|
Three Months Ended
March 31, 2013
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
2,274.0
|
|
|
$
|
81.4
|
|
|
$
|
(3.0)
|
|
|
$
|
2,352.4
|
|
Cost of product
sold
|
|
1,805.8
|
|
|
10.6
|
|
|
(2.8)
|
|
|
1,813.6
|
|
Direct operating
expenses
|
|
86.0
|
|
|
22.6
|
|
|
(0.1)
|
|
|
108.5
|
|
Selling, general and
administrative
|
|
18.6
|
|
|
5.6
|
|
|
4.2
|
|
|
28.4
|
|
Depreciation and
amortization
|
|
28.0
|
|
|
5.8
|
|
|
0.4
|
|
|
34.2
|
|
Operating income (loss)
|
|
$
|
335.6
|
|
|
$
|
36.8
|
|
|
$
|
(4.7)
|
|
|
$
|
367.7
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
44.6
|
|
|
$
|
18.1
|
|
|
$
|
1.0
|
|
|
$
|
63.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Petroleum (CVR
Refining)
|
|
Nitrogen
Fertilizer (CVR Partners)
|
|
Corporate and
Other
|
|
Consolidated
|
|
|
(in
millions)
|
March 31,
2014
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
413.4
|
|
|
$
|
85.9
|
|
|
$
|
462.8
|
|
|
$
|
962.1
|
|
Total
assets
|
|
2,769.4
|
|
|
592.6
|
|
|
507.9
|
|
|
3,869.9
|
|
Total debt, including
current portion
|
|
582.4
|
|
|
125.0
|
|
|
(31.5)
|
|
|
675.9
|
|
|
|
|
|
|
|
|
|
|
December 31,
2013
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
279.8
|
|
|
$
|
85.1
|
|
|
$
|
477.2
|
|
|
$
|
842.1
|
|
Total
assets
|
|
2,533.3
|
|
|
593.5
|
|
|
539.0
|
|
|
3,665.8
|
|
Total debt, including
current portion
|
|
582.7
|
|
|
125.0
|
|
|
(31.5)
|
|
|
676.2
|
|
Petroleum Segment Operating Data
The following tables
set forth information about our consolidated Petroleum segment
operated by CVR Refining, LP, of which we own a majority interest
and serve as general partner, and the Coffeyville and Wynnewood refineries. Reconciliations of
certain non-GAAP financial measures are provided under "Use of
Non-GAAP Financial Measures" below. Additional discussion of
operating results for the Petroleum segment for the quarter ended
March 31, 2014 are included in CVR
Refining's press release dated May 1,
2014.
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
|
(in
millions)
|
Petroleum Segment
Summary Financial Results:
|
|
|
|
Net sales
|
$
|
2,375.3
|
|
|
$
|
2,274.0
|
|
Cost of product
sold
|
2,063.3
|
|
|
1,805.8
|
|
Direct operating
expenses
|
99.2
|
|
|
86.0
|
|
Selling, general and
administrative expenses
|
18.7
|
|
|
18.6
|
|
Depreciation and
amortization
|
29.5
|
|
|
28.0
|
|
Operating
income
|
164.6
|
|
|
335.6
|
|
Interest expense and
other financing costs
|
(8.7)
|
|
|
(14.2)
|
|
Interest
income
|
0.1
|
|
|
0.1
|
|
Gain (loss) on
derivatives, net
|
109.4
|
|
|
(20.0)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
(26.1)
|
|
Income before income
tax expense
|
265.4
|
|
|
275.4
|
|
Income tax
expense
|
—
|
|
|
—
|
|
Net income
|
$
|
265.4
|
|
|
$
|
275.4
|
|
|
|
|
|
Refining
margin*
|
$
|
312.0
|
|
|
$
|
468.2
|
|
Gross
profit*
|
$
|
183.3
|
|
|
$
|
354.2
|
|
Refining margin
adjusted for FIFO impact*
|
$
|
290.4
|
|
|
$
|
463.5
|
|
Adjusted Petroleum
EBITDA*
|
$
|
194.1
|
|
|
$
|
309.9
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
|
|
|
|
Petroleum Segment
Key Operating Statistics:
|
|
|
|
Per crude oil
throughput barrel:
|
|
|
|
Refining
margin*
|
$
|
17.17
|
|
|
$
|
26.71
|
|
FIFO impact
(favorable) unfavorable
|
(1.19)
|
|
|
(0.27)
|
|
Refining margin
adjusted for FIFO impact*
|
15.98
|
|
|
26.44
|
|
Gross
profit*
|
10.09
|
|
|
20.20
|
|
Direct operating
expenses
|
5.46
|
|
|
4.91
|
|
Direct operating
expenses per barrel sold
|
$
|
5.08
|
|
|
$
|
4.64
|
|
Barrels sold (barrels
per day)
|
217,186
|
|
|
205,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
Petroleum Segment
Summary Refining Throughput and Production Data
(bpd):
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
Sweet
|
178,253
|
|
|
83.3
|
%
|
|
156,725
|
|
|
76.6
|
%
|
Medium
|
3,047
|
|
|
1.4
|
%
|
|
14,757
|
|
|
7.2
|
%
|
Heavy
sour
|
20,602
|
|
|
9.6
|
%
|
|
23,334
|
|
|
11.4
|
%
|
Total crude oil
throughput
|
201,902
|
|
|
94.3
|
%
|
|
194,816
|
|
|
95.2
|
%
|
All
other feedstocks and blendstocks
|
12,154
|
|
|
5.7
|
%
|
|
9,774
|
|
|
4.8
|
%
|
Total
throughput
|
214,056
|
|
|
100.0
|
%
|
|
204,590
|
|
|
100.0
|
%
|
Production:
|
|
|
|
|
|
|
|
Gasoline
|
104,452
|
|
|
48.5
|
%
|
|
98,184
|
|
|
47.8
|
%
|
Distillate
|
88,901
|
|
|
41.2
|
%
|
|
83,841
|
|
|
40.8
|
%
|
Other
(excluding internally produced fuel)
|
22,093
|
|
|
10.3
|
%
|
|
23,543
|
|
|
11.4
|
%
|
Total refining
production (excluding internally produced fuel)
|
215,446
|
|
|
100.0
|
%
|
|
205,568
|
|
|
100.0
|
%
|
Product price
(dollars per gallon):
|
|
|
|
|
|
|
|
Gasoline
|
$
|
2.66
|
|
|
|
|
$
|
2.82
|
|
|
|
Distillate
|
3.00
|
|
|
|
|
3.11
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
Market Indicators
(dollars per barrel):
|
|
|
|
West Texas
Intermediate (WTI) NYMEX
|
$
|
98.61
|
|
|
$
|
94.36
|
|
Crude Oil
Differentials:
|
|
|
|
WTI less
WTS (light/medium sour)
|
5.58
|
|
|
6.33
|
|
WTI less
WCS (heavy sour)
|
20.87
|
|
|
27.26
|
|
NYMEX Crack
Spreads:
|
|
|
|
Gasoline
|
18.12
|
|
|
31.24
|
|
Heating
Oil
|
27.95
|
|
|
33.43
|
|
NYMEX 2-1-1
Crack Spread
|
23.04
|
|
|
32.33
|
|
PADD II Group 3
Basis:
|
|
|
|
Gasoline
|
(4.87)
|
|
|
(7.57)
|
|
Ultra
Low Sulfur Diesel
|
(1.94)
|
|
|
2.09
|
|
PADD II Group 3
Product Crack:
|
|
|
|
Gasoline
|
13.25
|
|
|
23.66
|
|
Ultra
Low Sulfur Diesel
|
26.01
|
|
|
35.52
|
|
PADD II Group 3
2-1-1
|
19.63
|
|
|
29.59
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
|
(in millions,
except operating statistics)
|
Coffeyville
Refinery Financial Results:
|
|
|
|
Net sales
|
$
|
1,572.3
|
|
|
$
|
1,492.6
|
|
Cost of product
sold
|
1,358.8
|
|
|
1,195.1
|
|
Refining
margin*
|
213.5
|
|
|
297.5
|
|
Direct operating
expenses
|
53.3
|
|
|
52.2
|
|
Depreciation and
amortization
|
18.0
|
|
|
17.5
|
|
Gross
profit*
|
$
|
142.2
|
|
|
$
|
227.8
|
|
|
|
|
|
Refining margin
adjusted for FIFO impact*
|
$
|
196.9
|
|
|
$
|
290.7
|
|
|
|
|
|
Coffeyville
Refinery Key Operating Statistics:
|
|
|
|
Per crude oil
throughput barrel:
|
|
|
|
Refining
margin*
|
$
|
19.14
|
|
|
$
|
26.73
|
|
FIFO impact
(favorable) unfavorable
|
(1.49)
|
|
|
(0.61)
|
|
Refining margin
adjusted for FIFO impact*
|
17.65
|
|
|
26.12
|
|
Gross
profit*
|
12.75
|
|
|
20.47
|
|
Direct operating
expenses
|
4.78
|
|
|
4.69
|
|
Direct operating
expenses per barrel sold
|
$
|
4.26
|
|
|
$
|
4.33
|
|
Barrels sold (barrels
per day)
|
139,016
|
|
|
133,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
Coffeyville
Refinery Throughput and Production Data (bpd):
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
Sweet
|
101,856
|
|
|
76.3
|
%
|
|
99,793
|
|
|
76.0
|
%
|
Medium
|
1,495
|
|
|
1.1
|
%
|
|
512
|
|
|
0.4
|
%
|
Heavy
sour
|
20,602
|
|
|
15.4
|
%
|
|
23,334
|
|
|
17.8
|
%
|
Total crude oil
throughput
|
123,953
|
|
|
92.8
|
%
|
|
123,639
|
|
|
94.2
|
%
|
All other
feedstocks and blendstocks
|
9,670
|
|
|
7.2
|
%
|
|
7,570
|
|
|
5.8
|
%
|
Total
throughput
|
133,623
|
|
|
100.0
|
%
|
|
131,209
|
|
|
100.0
|
%
|
Production:
|
|
|
|
|
|
|
|
Gasoline
|
66,316
|
|
|
48.4
|
%
|
|
62,414
|
|
|
46.7
|
%
|
Distillate
|
57,825
|
|
|
42.2
|
%
|
|
55,602
|
|
|
41.6
|
%
|
Other
(excluding internally produced fuel)
|
12,776
|
|
|
9.4
|
%
|
|
15,717
|
|
|
11.7
|
%
|
Total refining
production (excluding internally produced fuel)
|
136,917
|
|
|
100.0
|
%
|
|
133,733
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
|
(in millions,
except operating statistics)
|
Wynnewood Refinery
Financial Results:
|
|
|
|
Net sales
|
$
|
802.0
|
|
|
$
|
780.4
|
|
Cost of product
sold
|
704.5
|
|
|
610.4
|
|
Refining
margin*
|
97.5
|
|
|
170.0
|
|
Direct operating
expenses
|
45.6
|
|
|
33.8
|
|
Depreciation and
amortization
|
10.0
|
|
|
9.3
|
|
Gross
profit*
|
$
|
41.9
|
|
|
$
|
126.9
|
|
|
|
|
|
Refining margin
adjusted for FIFO impact*
|
$
|
92.5
|
|
|
$
|
172.1
|
|
|
|
|
|
Wynnewood Refinery
Key Operating Statistics:
|
|
|
|
Per crude oil
throughput barrel:
|
|
|
|
Refining
margin*
|
$
|
13.89
|
|
|
$
|
26.55
|
|
FIFO impact
(favorable) unfavorable
|
(0.72)
|
|
|
0.32
|
|
Refining margin
adjusted for FIFO impact*
|
13.17
|
|
|
26.87
|
|
Gross
profit*
|
5.97
|
|
|
19.80
|
|
Direct operating
expenses
|
6.49
|
|
|
5.29
|
|
Direct operating
expenses per barrel sold
|
$
|
6.48
|
|
|
$
|
5.22
|
|
Barrels sold (barrels
per day)
|
78,170
|
|
|
72,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
Wynnewood Refinery
Throughput and Production Data (bpd):
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
Sweet
|
76,397
|
|
|
95.0
|
%
|
|
56,932
|
|
|
77.6
|
%
|
Medium
|
1,552
|
|
|
1.9
|
%
|
|
14,245
|
|
|
19.4
|
%
|
Heavy
sour
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
Total crude oil
throughput
|
77,949
|
|
|
96.9
|
%
|
|
71,177
|
|
|
97.0
|
%
|
All other
feedstocks and blendstocks
|
2,484
|
|
|
3.1
|
%
|
|
2,204
|
|
|
3.0
|
%
|
Total
throughput
|
80,433
|
|
|
100.0
|
%
|
|
73,381
|
|
|
100.0
|
%
|
Production:
|
|
|
|
|
|
|
|
Gasoline
|
38,136
|
|
|
48.6
|
%
|
|
35,770
|
|
|
49.8
|
%
|
Distillate
|
31,076
|
|
|
39.6
|
%
|
|
28,239
|
|
|
39.3
|
%
|
Other
(excluding internally produced fuel)
|
9,317
|
|
|
11.8
|
%
|
|
7,826
|
|
|
10.9
|
%
|
Total refining
production (excluding internally produced fuel)
|
78,529
|
|
|
100.0
|
%
|
|
71,835
|
|
|
100.0
|
%
|
Nitrogen Fertilizer Segment Operating Data
The
following tables set forth information about the Nitrogen
Fertilizer segment operated by CVR Partners, of which we own a
majority interest and serve as general partner. 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 March 31, 2014 are
included in CVR Partners' press release dated May 1, 2014.
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
|
(in
millions)
|
Nitrogen
Fertilizer Segment Business Financial Results:
|
|
|
|
Net sales
|
$
|
80.3
|
|
|
$
|
81.4
|
|
Cost of product
sold
|
21.7
|
|
|
10.6
|
|
Direct operating
expenses
|
24.2
|
|
|
22.6
|
|
Selling, general and
administrative expenses
|
4.6
|
|
|
5.6
|
|
Depreciation and
amortization
|
6.7
|
|
|
5.8
|
|
Operating income
|
23.1
|
|
|
36.8
|
|
Interest expense and
other financing costs
|
(1.6)
|
|
|
(1.2)
|
|
Interest
income
|
—
|
|
|
—
|
|
Other
income (expense), net
|
—
|
|
|
—
|
|
Income
before income tax expense
|
21.5
|
|
|
35.6
|
|
Income tax
expense
|
—
|
|
|
—
|
|
Net
income
|
$
|
21.5
|
|
|
$
|
35.6
|
|
|
|
|
|
Adjusted Nitrogen
Fertilizer EBITDA*
|
$
|
29.9
|
|
|
$
|
43.8
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
Nitrogen
Fertilizer Segment Key Operating Statistics:
|
|
|
|
Production (thousand
tons):
|
|
|
|
Ammonia
(gross produced)(1)
|
91.0
|
|
|
111.4
|
|
Ammonia
(net available for sale)(1)(2)
|
8.9
|
|
|
30.7
|
|
UAN
|
257.2
|
|
|
196.2
|
|
|
|
|
|
Pet coke consumed
(thousand tons)
|
124.8
|
|
|
129.8
|
|
Pet coke (cost per
ton)
|
$
|
29
|
|
|
$
|
31
|
|
|
|
|
|
Sales (thousand
tons):
|
|
|
|
Ammonia
|
5.4
|
|
|
27.6
|
|
UAN
|
254.7
|
|
|
194.1
|
|
|
|
|
|
Product pricing
(plant gate) (dollars per ton)(3):
|
|
|
|
Ammonia
|
$
|
479
|
|
|
$
|
663
|
|
UAN
|
$
|
253
|
|
|
$
|
295
|
|
|
|
|
|
On-stream
factor(4):
|
|
|
|
Gasification
|
98.8
|
%
|
|
99.5
|
%
|
Ammonia
|
92.1
|
%
|
|
98.8
|
%
|
UAN
|
97.0
|
%
|
|
92.8
|
%
|
|
|
|
|
Market
Indicators
|
|
|
|
Ammonia -- Southern
Plains (dollars per ton)
|
$
|
441
|
|
|
$
|
696
|
|
UAN -- Corn belt
(dollars per ton)
|
$
|
332
|
|
|
$
|
378
|
|
|
|
|
|
|
|
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. As a result of the completion
of the UAN expansion project in February 2013, the Nitrogen
Fertilizer segment now expects to upgrade substantially all of the
ammonia they produce into UAN. The net tons available for sale
represent the ammonia available for sale that was not upgraded into
UAN.
|
|
|
(2)
|
In addition to the
produced ammonia, the Nitrogen Fertilizer segment acquired
approximately 22,900 tons of ammonia during the three months ended
March 31, 2014.
|
|
|
(3)
|
Plant gate sales per
ton represent net sales less freight revenue divided by product
sales volume in tons and is shown in order to provide a pricing
measure that is comparable across the fertilizer
industry.
|
|
|
(4)
|
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 UAN expansion
coming on-line, the on-stream factors for the three months ended
March 31, 2013 would have been 99.5% for gasifier, 98.8% for
ammonia and 98.3% for UAN.
|
Use of Non-GAAP Financial Measures
To supplement the
Company's actual results in accordance with GAAP for the applicable
periods, the Company also uses non-GAAP measures as noted above
which are reconciled to our GAAP-based results below. 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 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
March
31,
|
|
2014
|
|
2013
|
|
(in millions,
except per share data)
|
Reconciliation of
Net Income to Adjusted Net Income:
|
|
|
|
Income before income
tax expense
|
$
|
283.1
|
|
|
$
|
306.5
|
|
Adjustments:
|
|
|
|
FIFO impact
(favorable) unfavorable
|
(21.6)
|
|
|
(4.7)
|
|
Share-based
compensation
|
4.1
|
|
|
6.0
|
|
Loss on extinguishment
of debt
|
—
|
|
|
26.1
|
|
(Gain) loss on
derivatives, net
|
(109.4)
|
|
|
20.0
|
|
Current period
settlement on derivative contracts (1)
|
21.1
|
|
|
(52.5)
|
|
Adjusted net income
before income tax expense and
noncontrolling interest
|
177.3
|
|
|
301.4
|
|
Adjusted net income
attributed to noncontrolling interest
|
(55.3)
|
|
|
(56.1)
|
|
Income tax expense, as
adjusted
|
(40.1)
|
|
|
(88.5)
|
|
Adjusted net income
attributable to CVR Energy stockholders
|
$
|
81.9
|
|
|
$
|
156.8
|
|
|
|
|
|
Adjusted net income
per diluted share
|
$
|
0.94
|
|
|
$
|
1.81
|
|
Refining margin per crude oil throughput barrel is a measurement
calculated as the difference between the Petroleum segment's 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 the refineries'
performance as a general indication of the amount above their cost
of product sold at which they are able to sell refined products.
Our calculation of refining margin may differ from similar
calculations of other companies in the 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 the Petroleum segment's
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
the Petroleum segment's 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 the
refineries' performance as a general indication of the amount above
their cost of product sold (taking into account the impact of the
utilization of FIFO) at which they are able to sell refined
products. Our calculation of refining margin adjusted for FIFO
impact may differ from calculations of other companies in the
industry, thereby limiting its usefulness as a comparative measure.
Under the FIFO accounting method, changes in crude oil prices can
cause fluctuations in the inventory valuation of 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.
Gross profit is calculated as the difference between the
Petroleum segment's net sales, cost of product sold (exclusive of
depreciation and amortization), direct operating expenses
(exclusive of depreciation and amortization), major scheduled
turnaround expenses and depreciation and amortization. Gross profit
per crude throughput barrel is calculated as gross profit as
derived above divided by the refineries' crude oil throughput
volumes for the respective periods presented. Gross profit is a
non-GAAP measure that should not be substituted for operating
income. Management believes it is important to investors in
evaluating the refineries' performance and the Petroleum segment's
ongoing operating results. Our calculation of gross profit may
differ from similar calculations of other companies in the
industry, thereby limiting its usefulness as a comparative
measure.
EBITDA and Adjusted EBITDA. EBITDA represents net income before
(i) interest expense and other financing costs, net of interest
income, (ii) income tax expense and (iii) depreciation and
amortization. Adjusted EBITDA represents EBITDA adjusted for FIFO
impacts (favorable) unfavorable, share-based compensation, major
scheduled turnaround expenses, loss on disposition of fixed assets,
(gain) loss on derivatives, net, current period settlements on
derivative contracts and loss on extinguishment of debt. EBITDA and
Adjusted EBITDA are not recognized terms under GAAP and should not
be substituted for net income or cash flow from operations.
Management believes that EBITDA and Adjusted EBITDA enable
investors to better understand and evaluate our ongoing operating
results and allow for greater transparency in reviewing our overall
financial, operational and economic performance. EBITDA and
Adjusted EBITDA presented by other companies may not be comparable
to our presentation, since each company may define these terms
differently. Below is a reconciliation of net income to EBITDA and
EBITDA to Adjusted EBITDA for the three months ended March 31, 2014 and 2013:
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
|
(in
millions)
|
Net income
attributable to CVR Energy stockholders
|
$
|
126.7
|
|
|
$
|
165.0
|
|
Add:
|
|
|
|
Interest
expense and other financing costs, net of interest
income
|
9.9
|
|
|
15.1
|
|
Income
tax expense
|
69.4
|
|
|
93.8
|
|
Depreciation and amortization
|
37.3
|
|
|
34.2
|
|
EBITDA
adjustments included in noncontrolling interest
|
(15.0)
|
|
|
(8.0)
|
|
EBITDA
|
228.3
|
|
|
300.1
|
|
Add:
|
|
|
|
FIFO
impacts, (favorable) unfavorable
|
(21.6)
|
|
|
(4.7)
|
|
Share-based compensation
|
4.1
|
|
|
6.0
|
|
(Gain)
loss on derivatives, net
|
(109.4)
|
|
|
20.0
|
|
Current
period settlement on derivative contracts (1)
|
21.1
|
|
|
(52.5)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
26.1
|
|
Adjustments included in noncontrolling interest
|
31.6
|
|
|
(8.4)
|
|
Adjusted
EBITDA
|
$
|
154.1
|
|
|
$
|
286.6
|
|
Petroleum and Nitrogen Fertilizer EBITDA and Adjusted EBITDA.
EBITDA by operating segment represents net income before (i)
interest expense and other financing costs, net of interest income,
(ii) income tax expense and (iii) depreciation and amortization.
Adjusted EBITDA by operating segment represents EBITDA by operating
segment adjusted for FIFO impacts (favorable) unfavorable;
share-based compensation, non-cash; major scheduled turnaround
expenses; loss on extinguishment of debt; loss on disposition of
fixed assets; (gain) loss on derivatives, net; and current period
settlements on derivative contracts. We present Adjusted EBITDA by
operating segment because it is the starting point for CVR
Refining's and CVR Partners' calculation of available cash for
distribution. 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. Management believes
that Adjusted EBITDA by operating segment enables investors to
better understand CVR Refining's and CVR Partners' ability to make
distributions to their common unitholders, helps investors evaluate
our ongoing operating results and allows for greater transparency
in reviewing our overall financial, operational and economic
performance. Adjusted EBITDA presented by other companies may not
be comparable to our presentation, since each company may define
these terms differently. Below is a reconciliation of net income to
EBITDA and EBITDA to Adjusted EBITDA for the Petroleum and Nitrogen
Fertilizer segments for the three months ended March 31, 2014 and 2013:
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
|
(in
millions)
|
Petroleum:
|
|
|
|
Petroleum net
income
|
$
|
265.4
|
|
|
$
|
275.4
|
|
Add:
|
|
|
|
Interest expense and
other financing costs, net of interest income
|
8.6
|
|
|
14.1
|
|
Income tax
expense
|
—
|
|
|
—
|
|
Depreciation and
amortization
|
29.5
|
|
|
28.0
|
|
Petroleum
EBITDA
|
303.5
|
|
|
317.5
|
|
Add:
|
|
|
|
FIFO impacts
(favorable), unfavorable
|
(21.6)
|
|
|
(4.7)
|
|
Share-based
compensation, non-cash
|
0.5
|
|
|
3.5
|
|
(Gain) loss on
derivatives, net
|
(109.4)
|
|
|
20.0
|
|
Current period
settlements on derivative contracts (1)
|
21.1
|
|
|
(52.5)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
26.1
|
|
Adjusted Petroleum
EBITDA
|
$
|
194.1
|
|
|
$
|
309.9
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
2013
|
|
(in
millions)
|
Nitrogen
Fertilizer:
|
|
|
|
Nitrogen Fertilizer
net income
|
$
|
21.5
|
|
|
$
|
35.6
|
|
Add:
|
|
|
|
Interest expense,
net
|
1.6
|
|
|
1.2
|
|
Income tax
expense
|
—
|
|
|
—
|
|
Depreciation and
amortization
|
6.7
|
|
|
5.8
|
|
Nitrogen
Fertilizer EBITDA
|
29.8
|
|
|
42.6
|
|
Add:
|
|
|
|
Share-based
compensation, non-cash
|
0.1
|
|
|
1.2
|
|
Adjusted Nitrogen
Fertilizer EBITDA
|
$
|
29.9
|
|
|
$
|
43.8
|
|
|
|
(1)
|
Represents the
portion of gain (loss) on derivatives, net related to contracts
that matured during the respective periods and settled with
counterparties. There are no premiums paid or received at inception
of the derivative contracts and upon settlement, there is no cost
recovery associated with these contracts.
|
Derivatives Summary. The Petroleum segment enters into
commodity swap contracts through crack spread swap agreements with
financial counterparties to fix the spread risk between the
refineries' crude oil purchases and the refined products the
refineries produce for sale. Through these swaps, the Petroleum
segment will sell a fixed differential for the value between the
selected refined product benchmark and the benchmark crude oil
price, thereby locking in a margin for a portion of the refineries'
production. The physical volumes are not exchanged and these
contracts are net settled with cash. From time to time, the
Petroleum segment holds various NYMEX positions through a
third-party clearing house.
The table below summarizes the Petroleum segment's open
commodity swap positions as of March 31,
2014. The positions are primarily in the form of crack
spread swap agreements with financial counterparties, wherein the
Petroleum segment has locked in differentials at the fixed prices
noted below. As of March 31, 2014,
the open commodity swap positions below were comprised of
approximately 72.2% for distillate crack swaps and 27.8% for
gasoline crack swaps.
|
|
|
|
|
|
|
|
|
Commodity
Swaps
|
|
Barrels
|
|
Fixed
Price(1)
|
Second Quarter
2014
|
|
5,175,000
|
|
|
$
|
28.39
|
|
Third Quarter
2014
|
|
6,000,000
|
|
|
26.78
|
|
Fourth Quarter
2014
|
|
5,100,000
|
|
|
27.25
|
|
|
|
|
|
|
First Quarter
2015
|
|
525,000
|
|
|
32.09
|
|
Second Quarter
2015
|
|
975,000
|
|
|
30.20
|
|
Third Quarter
2015
|
|
150,000
|
|
|
29.83
|
|
Fourth Quarter
2015
|
|
150,000
|
|
|
29.83
|
|
|
|
|
|
|
Total
|
|
18,075,000
|
|
|
$
|
27.76
|
|
|
|
(1)
|
Weighted-average
price of all positions for period indicated.
|
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SOURCE CVR Energy, Inc.