CVR Refining Reports Record 2013 First Quarter Results And Announces Initial Cash Distribution of $1.58 per Common Unit

SUGAR LAND, Texas, May 2, 2013 /PRNewswire/ -- CVR Refining, LP (NYSE: CVRR), a refiner and marketer of petroleum fuels, today announced first quarter 2013 net income of $275.4 million on net sales of $2,274.0 million, compared to a net loss of $37.4 million on net sales of $1,898.5 million for the 2012 first quarter.

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Adjusted EBITDA, a non-GAAP financial measure, for the 2013 first quarter was $309.9 million compared to adjusted EBITDA of $143.0 million for the first quarter of 2012.

Net income for the time period between the closing of the CVR Refining initial public offering (IPO) on Jan. 23, 2013, and the end of the first quarter of 2013 was $197.5 million, or $1.34 per common unit. Adjusted EBITDA for the same time period was $271.9 million.

Operating income for the first quarter of 2013 was $335.6 million compared to operating income of $128.6 million in the same quarter of 2012.

"CVR Refining's exceptional results were driven by record operational performance that allowed us to take advantage of favorable market conditions during the first quarter," said Jack Lipinski, chief executive officer. "The Coffeyville and Wynnewood refineries operated at a combined crude throughput rate of 194,816 barrels per day for the quarter. We continue to grow our crude gathering business as well, achieving a record of 50,429 barrels per day gathered for the quarter."

Consolidated Operations

First quarter 2013 throughput of crude oil and all other feedstocks and blendstocks totaled 204,590 barrels per day (bpd), compared to 155,385 bpd for the same period in 2012.

Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $26.44 in the first quarter 2013 compared to $18.62 during the same period in 2012. Direct operating expenses per barrel sold, exclusive of depreciation and amortization, for the 2013 first quarter was $4.64, down from $6.51 in the first quarter of 2012.

Coffeyville Refinery

The Coffeyville refinery reported first quarter 2013 gross profit of $227.8 million, compared to $78.2 million of gross profit for the first quarter of 2012. First quarter 2013 crude oil throughput totaled 123,639 bpd, compared to 88,403 bpd in the first quarter of 2012. Refining margin adjusted for FIFO impact per crude oil throughput barrel for the first quarter of 2013 was $26.12, compared to $17.94 for the same period in 2012. Direct operating expenses per barrel sold for the 2013 first quarter was $4.33, compared to direct operating expenses, including turnaround expenses, per barrel sold of $8.02 for the 2012 first quarter.

Wynnewood Refinery

The Wynnewood refinery had a first quarter 2013 gross profit of $126.9 million compared to a gross profit of $70.9 million for the first quarter of 2012. First quarter of 2013 crude oil throughput totaled a record 71,177 bpd, compared to 58,255 bpd for the first quarter of 2012. Refining margin adjusted for FIFO impact per crude oil throughput barrel for the first quarter of 2013 was $26.87, compared to $19.57 for the 2012 first quarter. Direct operating expenses per barrel sold for the first quarter of 2013 was $5.22, compared to $4.59 for the 2012 first quarter.

Distributions

CVR Refining also announced today a post IPO first quarter 2013 cash distribution of $1.58 per common unit, which exceeds the previous post IPO first quarter distribution outlook of $1.10 to $1.35 per common unit. The first quarter 2013 distribution reflects available cash for the period from Jan. 23, 2013, the closing date of CVR Refining's IPO, through March 31, 2013.

On a full quarter basis, the cash distribution would have been $1.76 per common unit, which exceeds the full first quarter distribution outlook at the time of CVR Refining's IPO of $1.21 per common unit.

The distribution, as declared by the board of CVR Refining GP, LLC, the general partner of CVR Refining, will be paid on May 17, 2013, to unitholders of record on May 10, 2013.

CVR Refining First Quarter 2013 Earnings Conference Call Information

CVR Refining previously announced that it will host its first quarter 2013 Earnings Conference Call for analysts and investors on Thursday, May 2, at 10 a.m. Eastern.

The Earnings Conference Call will be broadcast live over the Internet at http://www.videonewswire.com/event.asp?id=93183. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8289.

For those unable to listen live, the Webcast will be archived and available for 14 days at http://www.videonewswire.com/event.asp?id=93183. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 411728.

Forward Looking Statements
This news release contains forward-looking statements. 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 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 Refining undertakes no duty to update its forward-looking statements.

About CVR Refining, LP
Headquartered in Sugar Land, Texas, CVR Refining, LP is an independent downstream energy limited partnership that owns refining and related logistics assets in the Midcontinent United States. CVR Refining's subsidiaries operate a 115,000 barrel per day complex full coking medium-sour crude oil refinery in Coffeyville, Kan., and a 70,000 bpd medium complexity crude oil refinery in Wynnewood, Okla. CVR Refining's subsidiaries also operate supporting logistics assets including approximately 350 miles of pipelines, more than 125 crude oil transports, a network of strategically located crude oil gathering tank farms, and more than six million barrels of owned and leased crude oil storage capacity.

For further information, please contact:

Investor Relations:
Jay Finks CVR Refining, LP
281-207-3588
[email protected]

Media Relations:
Angie Dasbach
CVR Refining, LP
913-982-0482
[email protected]

Use of Non-GAAP Financial Measures

To supplement our actual results in accordance with GAAP for the applicable periods, the Partnership also uses the non-GAAP measures discussed below, 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 Partnership's financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.

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.

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, non-cash; major scheduled turnaround expenses; loss on disposition of fixed assets; unrealized (gain) loss on derivatives, net; loss on extinguishment of debt and expenses associated with the Gary-Williams acquisition. We present Adjusted EBITDA because it is the starting point for our available cash for distribution. 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 enables investors to better understand our ability to make distributions to our common unitholders, evaluate our ongoing operating results and allows for greater transparency in reviewing our overall financial, operational and economic performance. EBTIDA 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, 2013 and 2012:

Available cash for distribution is not a recognized term under GAAP. Available cash should not be considered in isolation or as an alternative to net income or operating income, as a measure of operating performance. In addition, available cash for distribution is not presented as, and should not be considered an alternative to cash flows from operations or as a measure of liquidity. Available cash as reported by the Partnership may not be comparable to similarly title measures of other entities; thereby limiting its usefulness as a comparative measure.

The Partnership announced a cash distribution of $1.58 per common unit for first quarter of 2013 adjusted to exclude the period from January 1, 2013 to January 22, 2013 prior to our Initial Public Offering. The distribution was based on the Partnership's available cash, which equaled Adjusted EBITDA reduced for cash needed for (i) debt service; (ii) reserves for environmental and maintenance capital expenditures; (iii) reserves for future major scheduled turnaround expenses and, to the extent applicable, (iv) reserves for future operating or capital needs that the board of directors of our general partner deems necessary or appropriate, if any. Available cash for distributions may be increased by previously established cash reserves, if any, at the discretion of the board of directors of our general partner. Actual distributions are set by the board of directors of our general partner.  The board of directors of our general partner may modify our cash distribution policy at any time, and our partnership agreement does not require us to make distributions at all.

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 the Partnership holds various NYMEX positions through a third-party clearing house. In addition, the Partnership 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 March 31, 2013.  The positions are primarily in the form of 'crack spread' swap agreements with financial counterparties, wherein the Partnership will receive the fixed prices noted below.

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(1)     Weighted-average price of all positions for period indicated.

SOURCE CVR Refining, LP