CVR Energy Reports Fourth Quarter And Record Full Year Results

SUGAR LAND, Texas, March 12, 2013 /PRNewswire/ -- 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.  

(Logo: http://photos.prnewswire.com/prnh/20071203/CVRLOGO)

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 for 14 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:

Investor Relations:
Jay Finks
CVR Energy, Inc.
281-207-3588
InvestorRelations@CVREnergy.com              

Media Relations:
Angie Dasbach
CVR Energy, Inc.
913-982-0482
MediaRelations@CVREnergy.com

 


CVR Energy, Inc.


Financial and Operational Data (all information in this release is unaudited other than the Statement of Operations and cash flow data for the year ended December 31, 2011 and balance sheet data as of December 31, 2011).


Three Months Ended

December 31,

Change from 2011



2012

2011

 Change

 Percent



(in millions, except per share data)


Consolidated Statement of Operations Data:






Net sales

$  1,880.8

$ 1,062.2

$     818.6

77.1%


Cost of product sold

1,485.1

857.3

627.8

73.2


Direct operating expenses

202.5

124.8

77.7

62.3


Insurance recovery — business interruption


Selling, general and administrative expenses

35.7

29.0

6.7

23.1


Depreciation and amortization

32.6

24.2

8.4

34.7


Operating income

124.9

26.9

98.0

364.3


Interest expense and other financing costs

(18.2)

(14.7)

(3.5)

23.8


Gain (loss) on derivatives, net






Realized

(57.1)

11.1

(68.2)

(614.4)


Unrealized

48.9

92.1

(43.2)

(46.9)


Loss on extinguishment of debt

(37.5)

(37.5)


Other income, net

0.5

0.5


Income before income tax expense

61.5

115.4

(53.9)

(46.7)


Income tax expense

16.7

37.1

(20.4)

(55.0)


Net income

44.8

78.3

(33.5)

(42.8)


Net income attributable to noncontrolling interest

4.6

12.4

(7.8)

(62.9)


Net income attributable to CVR Energy stockholders

$       40.2

$      65.9

$      (25.7)

(39.0)%


_______________












Basic earnings per share

$       0.46

$       0.76

$      (0.30)

(39.5)%


Diluted earnings per share

$       0.46

$       0.75

$      (0.29)

(38.7)%








Adjusted net income*

$     103.8

$       29.5

$       74.3

251.8%


Adjusted net income, per diluted share*

$       1.20

$       0.34

$       0.86

252.9%








Weighted-average common shares outstanding:






     Basic

86,831,050

86,582,800

248,250

0.3%


     Diluted

86,831,050

87,746,843

(915,793)

(1.0)%









 


Year Ended

December 31,

Change from 2011



2012

2011

Change

Percent



(in millions, except per share data)


Consolidated Statement of Operations Data:






Net sales

$  8,567.3

$  5,029.1

$  3,538.2

70.4%


Cost of product sold

6,696.9

3,943.5

2,753.4

69.8


Direct operating expenses

522.1

334.1

188.0

56.3


Insurance recovery — business interruption

(3.4)

3.4

(100.0)


Selling, general and administrative expenses

183.4

98.0

85.4

87.1


Depreciation and amortization

130.0

90.3

39.7

44.0


Operating income

1,034.9

566.6

468.3

82.7


Interest expense and other financing costs

(75.4)

(55.8)

(19.6)

35.1


Gain (loss) on derivatives, net






Realized

(137.6)

(7.2)

(130.4)

1,811.1


Unrealized

(148.0)

85.3

(233.3)

(273.5)


Loss on extinguishment of debt

(37.5)

(2.1)

(35.4)

1,685.7


Other income, net

1.8

1.3

0.5

38.5


Income before income tax expense

638.2

588.1

50.1

8.5


Income tax expense

225.6

209.5

16.1

7.7


Net income

412.6

378.6

34.0

9.0


Net income attributable to noncontrolling interest

34.0

32.8

1.2

3.7


Net income attributable to CVR Energy stockholders

$     378.6

$      345.8

$        32.8

9.5%


_____________












Basic earnings per share

$ 4.36

$ 4.00

$ 0.36

9.0%


Diluted earnings per share

$ 4.33

$ 3.94

$ 0.39

9.9%








Adjusted net income*

$ 660.1

$ 345.7

$ 314.4

90.9%


Adjusted net income, per diluted share*

$ 7.55

$ 3.94

$ 3.61

91.6%








Weighted-average common shares outstanding:






       Basic

86,822,913

86,493,735

329,178

0.4%


       Diluted

87,392,270

87,766,573

(374,303)

(0.4)%


 




December 31,


December 31,




2012


2011




(in millions)



Balance Sheet Data:






Cash and cash equivalents

$ 896.0


$ 388.3



Working capital

1,135.4


769.2



Total assets

3,610.9


3,119.3



Total debt, including current portion

898.2


863.8



Total CVR stockholders' equity

1,525.2


1,151.6










Three Months Ended

December 31,

Year Ended

December 31,



2012

2011

2012

2011




(in millions)



Cash Flow Data:






Net cash flow provided by (used in):






Operating activities

$    (21.2)

$     (67.4)

$     762.6

$   278.6


Investing activities

(67.1)

(630.5)

(210.7)

(674.4)


Financing activities

(4.0)

187.8

(44.3)

584.1


Net cash flow

$    (92.3)

$   (510.1)

$     507.6

$   188.3








Other Financial Data:






Capital expenditures for property, plant and equipment

$ 67.1

$ 44.6

$ 212.2

$ 91.2


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.


Petroleum

Nitrogen Fertilizer

(CVR Partners)

Corporate

and Other

Consolidated


(in millions)

Three months ended December 31, 2012





Net sales

$      1,816.2

$            67.6

$             (3.0)

$      1,880.8

Cost of product sold

1,476.5

11.5

(2.9)

1,485.1

Direct operating expenses (1)

84.2

24.6

108.8

Major scheduled turnaround expense

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 Fertilizer

(CVR Partners)

Corporate

and Other

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 Fertilizer

(CVR Partners)

Corporate

and Other

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 (2)

$             —

$          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



(2)

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

December 31,

Year Ended

December 31,




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