cvi-20200228
0001376139false00013761392020-02-282020-02-28



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
___________________________________

Date of Report (Date of earliest event reported): February 28, 2020

CVR ENERGY, INC.
(Exact name of registrant as specified in its charter)

Delaware001-3349261-1512186
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification Number)
2277 Plaza Drive, Suite 500
Sugar Land, Texas 77479
(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (281) 207-3200

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareCVIThe New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 7.01. Regulation FD Disclosure.

        Beginning March 2, 2020, the Company will begin using the Slide Presentation (the “Slide Presentation”), which contains forward-looking statements, in meetings with certain current and potential investors and analysts. The Slide Presentation, available on the Investor Relations page of the Company’s website at www.CVREnergy.com, is furnished as Exhibit 99.1 to this Current Report on Form 8-K (“Current Report”) and is incorporated herein by reference.

        The information in this Current Report and Exhibit 99.1 is being furnished, not filed, pursuant to Items 7.01 and 9.01 of Form 8-K. Accordingly, the information in Items 7.01 and 9.01 of this Current Report, including Exhibit 99.1, will not be subject to liability under Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and will not be incorporated by reference into any registration statement or other document filed by the Company under the Securities Act of 1933, as amended, or the Exchange Act, unless specifically identified therein as being incorporated by reference. The furnishing of information in this report, Exhibit 99.1 is not intended to, and does not, constitute a determination of admission by the Company that the information in this report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company or any of its affiliates.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

The following exhibits are being “furnished” as part of this Current Report on Form 8-K:

Exhibit
Number

Exhibit Description
99.1
104Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).




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: February 28, 2020

CVR Energy, Inc.
By:/s/ Tracy D. Jackson
Tracy D. Jackson
Executive Vice President and
Chief Financial Officer

cviexhibit991investorpre
Exhibit 99.1 March 2020 IR Presentation


 
Forward-Looking Statements This presentation contains forward-looking statements (“FLS”) which are protected as FLS under the PSLRA, and which are based on management’s current expectations and beliefs, as well as a number of assumptions concerning future events. The assumptions and estimates underlying FLS are inherently uncertain and are subject to a wide variety of significant business and economic uncertainties and competitive risks that could cause actual results to differ materially from those contained in the prospective information. Accordingly, there can be no assurance CVR Energy, Inc. (together with its subsidiaries, “CVI”, “CVR Energy”, “we”, “us” or the Company”) will achieve the future results we expect or that actual results will not differ materially from expectations. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are FLS and include, but are not limited to, statements regarding future: crude oil capacities; access to crude oil and condensate fields; EBITDA and capacities of our logistics assets; crude oil and condensate production, quality, pricing, price advantages and gathering; pipeline access; fertilizer distribution costs, netback pricing (and maximization thereof), marketing agreements and utilization rates; access to crude oils and shale oils; complexity; optionality of our marketing network; blending and RIN generation; product mix; conversion and distillate yields; strategic value of our locations; cost of operations; throughput and production; favorability of the macro environment including increased shale oil production, takeaway capacity, price advantages, product demand, growth of global economies sustainably or at all, price environment, impacts of IMO 2020 including the ability of the Company to benefit therefrom, exports, unemployment, Renewable Identification Number (“RIN”) prices, regulatory environments, energy developments and exports; crude oil and condensate differentials; crack spreads; diesel demand and gasoline production; demand for light sweet and heavy sour crude oil; exposure to Brent/WTI differential; liquid volume yield; impacts of Tier 3 including sulfur credit pricing, premium/subgrade spreads, octane value, ability of our refineries to comply with sulfur specifications and the impact of our capital projects; dividends and balance sheet strength; strategic initiatives including EHS improvements, RINs exposure, biodiesel blending, development of wholesale or retail businesses, expansion of optionality to process WCS, light shale oil and/or natural gasoline, liquid yield improvement at Wynnewood by 3.5% or at all, reduction of lost opportunities and capture rates; capital expenditures, turnaround expense and turnaround timing and activities; the crude optionality, Isom and HF mitigation projects including the costs, timing, returns, benefits and impacts thereof; global and domestic nitrogen demand and consumption; population growth; amount of arable farmland; biofuels consumption; diet evolution; product pricing and capacities; logistics optionality; rail access and delivery points; sustainability of production; demand growth and supply/demand imbalance; corn demand, stocks, uses, pricing, consumption, production, planting and yield; continued safe and reliable operations; and other matters. You are cautioned not to put undue reliance on FLS (including forecasts and projections regarding our future performance) because actual results may vary materially from those expressed or implied as a result of various factors, including, but not limited to those set forth under “Risk Factors” in the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and any other filings with the Securities and Exchange Commission by CVR Energy, Inc. (“CVI”) or CVR Partners, LP (“UAN”). These FLS are made only as of the date hereof. Neither CVI nor UAN assume any obligation to, and they expressly disclaim any obligation to, update or revise any FLS, whether as a result of new information, future events or otherwise, except as required by law. Non-GAAP Financial Measures Certain financial information in this presentation (including EBITDA, Adjusted EBITDA) are not presentations made in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and use of such terms varies from others in the same industry. Non-GAAP financial measures should not be considered as alternatives to income from continuing operations, income from operations or any other performance measures derived in accordance with GAAP. Non-GAAP financial measures have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for results as reported under GAAP. This presentation includes a reconciliation of certain non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP. 2


 
Mission and Values Our Guiding Principles Our mission is to be a top-tier North American petroleum refining and nitrogen-based fertilizer company as measured by safe and reliable operations, superior financial performance and profitable growth. Our core values define the way we do business every day to accomplish our mission. The foundation of our company is built on these core values. We are responsible to apply our core values in all the decisions we make and actions we take. Safety - We always put safety first. The protection of our employees, contractors and communities is paramount. We have an unwavering commitment to safety above all else. If it’s not safe, then we don’t do it. Environment - We care for our environment. Complying with all regulations and minimizing any environmental impact from our operations is essential. We understand our obligation to the environment and that it’s our duty to protect it. Integrity - We require high business ethics. We comply with the law and practice sound corporate governance. We only conduct business one way – the right way with integrity. Corporate Citizenship - We are proud members of the communities where we operate. We are good neighbors and know that it’s a privilege we can’t take for granted. We seek to make a positive economic and social impact through our financial donations and contributions of time, knowledge and talent of our employees to the places where we live and work. Continuous Improvement - We foster accountability under a performance-driven culture. We believe in both individual and team a success. We foster accountability under a performance-driven culture that supports creative thinking, teamwork and personal development so that employees can realize their maximum potential. We use defined work practices for consistency, efficiency and to create value across the organization. 3 3


 
Company Overview Mid-Continent Focused Refining & Fertilizer Businesses CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries. CVR Energy’s Petroleum segment is the larger of the two businesses and is comprised of two Mid-Continent complex refineries and associated logistics assets. Our Nitrogen Fertilizer business is comprised of our ownership of the general partner and 34 percent of the common units of CVR Partners, LP. Petroleum Segment Fertilizer Segment ➢ 2 strategically located Mid- ➢ CVI owns the general Continent refineries close to partner and 34% of the Cushing, Oklahoma common units of CVR ➢ 206,500 bpd of nameplate crude Partners, LP (NYSE: UAN) oil capacity ➢ 2 strategically located ➢ Direct access to crude oil and facilities serving the condensate fields in the Southern Plains and Corn Anadarko Basin Belt ➢ Complimentary logistic assets ➢ Well positioned to benefit with potential EBITDA of from low feedstock cost approximately $70 million per environment year ➢ Historical space on key pipelines ➢ Consistently maintained provides access to quality and high utilization rates at price advantaged crude oil – production facilities 100% exposure to WTI-Brent ➢ Marketing agreement with differential LSB Industries Pryor, OK, ➢ 97% liquid volume yield & 42% facility’s UAN production distillate yield(1) (1) Based on total throughputs; for the last twelve months ended December 31, 2019 4 4


 
PETROLEUM SEGMENT


 
Asset Footprint Strategically Located Assets near Cushing and SCOOP/STACK Mid-Continent Refineries Nameplate crude oil capacity of 206,500 bpd across two refineries • 2019 total throughput of 215,971 bpd Average complexity of 10.8 Located in Group 3 of PADD II Cushing & SCOOP/STACK Centric Refineries are strategically located ~ 100 to 130 miles from Cushing, OK Historical space on key pipelines Access to domestic conventional and locally gathered shale oils and Canadian crude oils Logistics Crude oil gathering system with access to over 250,000 bpd of production across Kansas, Nebraska, Oklahoma and Missouri • 4Q19 SCOOP/STACK gathering increased over 45% Y/Y as we increased focus on these high quality crude oils Logistics asset portfolio includes over 430 miles of owned or JV pipelines, over 7 million barrels of total crude oil and product storage capacity and 39 LACT units 6


 
Strategically Located Mid-Con Refineries Multiple Takeaway Options Provide Product Placement Flexibility Marketing Network Optionality ➢ Marketing activities focused in central mid- continent area via rack marketing, supplying customers nearby and at terminals on third- party distribution systems ➢ Rack marketing enables the sale of blended products, allowing CVR to capture the RIN ➢ Majority of refined volumes flow north on Magellan system or NuStar pipelines ➢ Flexibility to ship product south into Texas markets as well ➢ Over 100 product storage tanks with shell capacity of over 4 million barrels across both refineries 7


 
High-Quality Refining Assets Favorable Product Mix and Low-Cost Operations Consolidated Favorable High Distillate Yield (1) Consolidated Low Cost Operator(2) (3) Total Throughput(2) Total Production(2) Heavy Canadian (4) Other (5) Other (6) 2% 6% Condensate 6% 6% Midland WTI WTL 7% 1% 215,971 Regional 214,246 Crude Distillate Gasoline bpd 48% 42% bpd 52% WTI 31% (1) Based on crude oil throughputs (2) Based on total throughputs for the last twelve months ended December 31, 2019 (3) Operating expenses based on per barrel of total throughput (4) Currently have pipeline space up to 35,000 bpd but has historically been more economic to sell heavy crude oils in Cushing, Oklahoma (5) Other includes natural gasoline, isobutane, normal butane and gas oil 8 (6) Other includes pet coke, NGLs, slurry, sulfur and gas oil, and specialty products such as propylene and solvents; excludes internally produced fuels fuel.


 
Favorable Macro Environment Supply and Demand Fundamentals Supportive of Constructive Outlook Feedstock Supply • Increasing U.S. shale oil production • Limited Canadian pipeline and rail takeaway capacity • Access to price-advantaged crude oils • Low natural gas prices benefits Petroleum & Fertilizer segments Source: EIA Product Demand • Global economies aligned for sustainable growth • Sustained product demand driven by: • Lower price environment • Tier 3 Gasoline • IMO 2020 • Exports • Low Unemployment Source: EIA Industry Landscape • Constructive regulatory environment • Positive Energy development in the U.S. • Need to export incremental light crude production should drive sustained Brent – WTI differential Source: EIA 9


 
Favorable Macro Environment Forward Crack Spreads and Crude Differentials Remain Attractive 2-1-1 Crack Spreads & Brent-WTI Differentials ($/bbl) Midland-Cushing and WTL-WTI Differentials ($/bbl) $30 $5 NYMEX 2-1-1 Group 3 2-1-1 Brent-WTI Midland - Cushing WTL - WTI $25 $0 $20 ($5) $15 Futures ($10) $10 Futures ($15) $5 $0 ($20) Jan-16 Oct-16 Jul-17 Apr-18 Jan-19 Oct-19 Jul-20 Jan-16 Oct-16 Jul-17 Apr-18 Jan-19 Oct-19 Jul-20 WCS – WTI Differential ($/bbl) WTI-Based ULSD Crack Spread ($/bbl) Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 $0 $35 ($5) $30 ($10) $25 ($15) ($20) $20 ($25) Futures $15 ($30) Futures $10 ($35) ($40) $5 ($45) $0 ($50) Jan-16 Oct-16 Jul-17 Apr-18 Jan-19 Oct-19 Jul-20 Source: Market view as of February 25, 2020 10


 
Industry Leading Dividend Yield & Leverage Best in Class Dividend and Balance Sheet Current Dividend Yield(1) over 2x Peer Group Average Dividend Payout Ratio Also >2x Peer Average Consistent Dividend Payouts Despite Oil Price Volatility Peer-Leading Leverage Position(1)(2) (1) Based on closing prices on February 25, 2020 (2) Based on balance sheet as of December 31, 2019 11


 
Strategic Initiatives Focus on Maximizing Reliability, Increasing Feedstock Flexibility & Premium Production Continue to improve in all Environmental, Health and Safety matters. Safety is Job 1 Environmental, ✓ 2019 total recordable incident rate declined 11% Y/Y, following a reduction of over 50% in 2018. Health and Safety Process Safety Tier 1 rate for 2019 declined 50% Y/Y. Environmental events in 2019 declined 14% Y/Y, following a reduction of over 35% in 2018. Leverage our strategic location and our proprietary gathering system to deliver high Focus on Crude quality and cost-efficient crude oil to our refineries Quality & Differentials ✓ Increased 4Q19 SCOOP gathering by over 45% Y/Y as we eliminated activity in other non-strategic regions. Gathering approx. 140,000 bpd in the SCOOP, working toward 200,000 bpd goal Reduce our RIN exposure through increased biodiesel blending and building a Reduce our RIN wholesale/retail business Exposure ✓ Internal RINs generation increased to 22% for 2019, an increase of 25% since the beginning of ‘18, in part by blending biodiesel across both refinery racks and selling more aviation fuel Expand our optionality to process additional light shale oil, condensate and natural Expand Coffeyville gasoline at the Coffeyville refinery Feedstock Flexibility ✓ Project under development; potential capital investment of $200M if approved, with expected returns over 40% Increase Liquid Improve liquid yield recovery at the Wynnewood refinery by 3.5% Yields at ✓ Benfree repositioning project placed in service 1Q19. Board recently approved Isomerization Wynnewood project; expected capital investment of $117M with expected returns over 40%. Reduce Lost Reduce lost opportunities and improve capture rates Opportunities ✓ Total lost profit opportunities for 2019 declined by over 30% from 2018 12


 
Long-Term Value Creation Projects Increase Feedstock Flexibility & Improve Liquid Yield at Coffeyville Crude Optionality at Coffeyville Group 3 Gasoline vs. Conway Natural Gasoline ($/gal) If approved, this project would increase Coffeyville’s capacity to run natural gasoline to 10,000 bpd and/or YTD Spread ~$0.40/gal, nearly $17/bbl increase light shale crude oil and condensate processing ➢ Additional naphtha hydrotreating capacity ➢ Additional C5 / C6 isomerization capacity ➢ Create Tier III gasoline flexibility / premium production Schedule A engineering design is complete and now finalizing detailed cost estimate The impact of Tier 3 Gasoline specs on this spread in 2020 is yet to be determined Timing for completion is expected to be in 2023 Project Economics Total capital cost currently estimated at approximately Total Capital Spend Estimate: $200 million $200 million Expected Internal Rate of Return: 40% or higher Potential Annual EBITDA Uplift: $80 million+(1) (1) A reconciliation of this non-GAAP measure has not been provided because the method by which the project could be funded has not been determined. Further, changes in project cost estimates and timing of cash flows could have a significant impact on a reconciliation of projected EBITDA to net income. 13


 
Long-Term Value Creation Projects Increase Feedstock Flexibility & Improve Liquid Yield Isomerization Unit at Wynnewood Group 3 Premium Gasoline Spread over Subgrade ($/gal) Intended to: ➢ Run more SCOOP/STACK light crude oils and YTD Spread ~$0.25/gal, over $10.50/bbl condensates ➢ Improve liquid volume yield and increase distillate yield ➢ Increase capability to produce additional premium gasoline (typically >$0.25/gal. uplift) ➢ Reduce benzene content of gasoline – generate more credits Schedule A design work is complete, including detailed engineering and equipment purchases Project Economics Achieved Board approval at the end of 2019, subject to Total Capital Spend Estimate: $117 million continuing internal project approval processes Expected Internal Rate of Return: 40% or higher Project completion targeted for 2022 Potential Annual EBITDA Uplift: $34 million 14


 
Long-Term Value Creation Projects Environmental Mitigation Project with Liquid Yield Enhancement KSAAT Project at Wynnewood HF Mitigation Project at Wynnewood Intended to: ➢ Eliminate the use of hydrofluoric (HF) acid catalyst in the alkylation unit ➢ Also expected to increase liquid yield and production of premium gasoline at Wynnewood HF mitigation alone would cost approximately $36 million with no EBITDA uplift. Currently evaluating multiple technologies to replace the HF acid catalyst while also adding yield enhancements. Expect to complete Schedule A engineering design in Project Economics and select a technology by the end of 2020 Total Capital Spend Estimate: $90 million If approved, timing for project completion is expected to Expected Internal Rate of Return: 40% or higher on be in 2023 net spending of $54 million Potential to implement similar design at Coffeyville Potential Annual EBITDA Uplift: $29 million+(1) (1) A reconciliation of this non-GAAP measure has not been provided because the method by which the project could be funded has not been determined. Further, changes in project cost estimates and timing of cash flows could have a significant impact on a reconciliation of projected EBITDA to net income. 15


 
Capital Expenditures and Turnarounds Disciplined Approach to Capital Spending $250 2020 Total Capex budget of $105M - $115M $200 Environmental and Maintenance spending $150 planned at $55M - $60M $M $100 Growth capex budgeted at $50M - $55M $50 ➢ Approximately $45M - $55M of growth-related $0 projects will require additional approvals before 2015 2016 2017 2018 2019 2020e moving forward Environmental & Maintenance Growth $250 2019 Turnaround spending planned at $145M - $155M $200 Coffeyville refinery planned turnaround began $150 at the end of February. Expected 40 to 50-day $M turnaround at a total cost of $130 to $140 $100 million. $50 ➢ 2020 budget includes some planning costs ahead of the Wynnewood 2021 turnaround $0 2015 2016 2017 2018 2019 2020e Turnaround spending Note: As December 31, 2019 16


 
FERTILIZER SEGMENT


 
Solid Trends in Fertilizer Demand Growth Global and Domestic Demand for Nitrogen Remains Strong Global nitrogen consumption increased Global Nitrogen Consumption by 15% between 2008 and 2018 driven by: 140 ➢ Population growth 130 120 ➢ Decrease in arable farmland per capita 110 ➢ Biofuel consumption 100 90 ➢ Continued evolution to more protein- Million Tonnes 80 based diets in developing countries 70 60 50 2010 2011 2012 2013 2016 2017 2018 2019 2022 2023 2024 2025 2028 2029 2030 2014 2015 2020 2021 2026 2027 Global Arable Land per Capita US Nitrogen Consumption 14.0 13.5 13.0 12.5 12.0 11.5 Million Million Tonnes 11.0 10.5 10.0 2012 2013 2014 2016 2017 2018 2020 2021 2022 2024 2025 2026 2028 2029 2030 2010 2011 2015 2019 2023 2027 Source: Fertecon, World Bank 18


 
U.S Nitrogen Supply & Demand Domestic Supply and Demand Picture is More Balanced Corn Stocks to Use Compared to Netback Fertilizer Pricing US Nitrogen Supply ➢ Nitrogen fertilizers represent approximately 15% of farmers’ cost structure and significantly improves yields ➢ UAN prices increased $26/ton from 2018 to 2019, or 15% Y/Y ➢ Major global nitrogen capacity build cycle largely complete in 2017/2018. Additional tons have been absorbed by the market, though imports have increased recently following EU tariffs on Russia and Trinidad ➢ Product demand currently expected to exceed new supply for the next several years Source: NPK Fertilizer Consultant, USDA, Blue Johnson and Associates, Inc. 19


 
Strong Demand for Corn in the U.S. Increasing Corn Consumption is Positive for Nitrogen Demand U.S. Domestic Corn Use ➢ Corn has a variety of uses and applications, 14.0 including feed grains, ethanol for fuel and food, seed and industrial (FSI) 12.0 10.0 8.0 ➢ Feed grains 6.0 4.0 (Bushels (Bushels billions) in ▪ ~96% of domestic feed grains are 2.0 supplied by corn 0.0 ▪ Consumes ~37% of annual corn crop(1) Feed / Residual Use Ethanol Seed & Industrial Domestic Corn Planted Acres and Yield per Acre ➢ Ethanol ▪ Consumes ~38% of annual corn crop(1) ➢ Corn production driven more by yield than acres planted ➢ Nitrogen is low on the cost curve for farmers Source: USDA Economic Research Service and USDA WASDE. (1) Based on 2015 – 2019 average. 20


 
Strategically Located Assets Well-Positioned in Premium Pricing Regions ➢ Large geographic footprint serving the Southern Plains and Corn Belt region ➢ Well positioned to minimize distribution costs and maximize net back pricing ➢ New rail loading rack at Coffeyville increases logistics optionality west of the Mississippi River due to access to both UP and BNSF delivery points ➢ Production sustainability due to storage capabilities at the plants and offsite locations ➢ Marketing agreement with LSB Industries Pryor, OK, facility’s UAN production 21


 
Key Operating Statistics Consistent High Utilization at Both Facilities Consolidated Production Volumes Ammonia Utilization(1) Consolidated Feedstocks Costs(2) Consolidated Sales Revenue(2)(3) Urea Products 6% Hydrogen 10% Natural Ammonia Gas 26% 45% UAN Pet Coke 69% 45% (1) Adjusted by planned turnarounds. (2) For the last twelve months ended December 31, 2019. 22 (3) Excludes freight.


 
Capital Expenditures and Turnaround Expenses Primarily Focused on Maintenance Spending 2020 Total Capex budget of $23M - $27M East Dubuque Merger on April 1, 2016 $30 Environmental and Maintenance spending planned at $19M - $21M $25 $20 Growth capex budgeted at $4M - $6M $15 $M ➢ Growth capex budget comprised of a number of $10 smaller projects $5 $0 2015 2016 2017 2018 2019 2020e Maintenance Growth East Dubuque 2020 Turnaround spending planned at $8M Merger on $10.0 April 1, 2016 Coffeyville turnaround scheduled for the Fall of $8.0 2020 $6.0 East Dubuque turnaround completed in $M $4.0 October 2019 $2.0 Coffeyville and East Dubuque are on alternating two-year turnaround schedules $0.0 2015 2016 2017 2018 2019 2020e Turnaround spending Note: As of June 30, 2019 23


 
APPENDIX


 
Non-GAAP Financial Measures EBITDA represents net income (loss) before (i) interest expense, net, (ii) income tax expense (benefit) and (iii) depreciation and amortization expense. Adjusted EBITDA as it relates only to our Fertilizer segment represents EBITDA adjusted to exclude consolidated turnaround expense and other non-recurring items which management believes are material to an investor’s understanding of the Company’s underlying operating results. Available Cash for Distribution represents Adjusted EBITDA reduced for cash reserves established by the board of directors of CVR Partners, LP’s general partner for (i) debt service, (ii) maintenance capital expenditures, (iii) 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 distribution may be increased by the release of previously established cash reserves, if any, and other excess cash, at the discretion of the board of directors of CVR Partners L.P.’s general partner. Direct Operating Expenses per Throughput Barrel represents direct operating expenses for the Company’s Petroleum segment divided by total throughput barrels for the period, which is calculated as total throughput barrels per day times the number of days in the period. Refining Margin represents the difference between the Company’s Petroleum segment net sales and cost of materials and other. Refining Margin adjusted for Inventory Valuation Impact represents Refining Margin adjusted to exclude the impact of current period market price and volume fluctuations on crude oil and refined product inventories recognized in prior periods. The Company records its commodity inventories on the first-in-first-out basis. As a result, significant current period fluctuations in market prices and the volumes we hold in inventory can have favorable or unfavorable impacts on its refining margins as compared to similar metrics used by other publicly-traded companies in the refining industry. Refining Margin and Refining Margin adjusted for Inventory Valuation Impact, per Throughput Barrel represents Refining divided by the total throughput barrels during the period, which is calculated as total throughput barrels per day times the number of days in the period. Note: Due to rounding, numbers presented within this section may not add or equal to numbers or totals presented elsewhere within this document 25


 
Non-GAAP Financial Measures (In USD Millions) CVR Energy, Inc. 2015 2016 2017 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 2019 Net Income $ 350 $ 10 $ 258 $ 366 $ 102 $ 128 $ 104 $ 28 $ 362 Add: Interest expense and other financing costs, net of interest income 47 83 109 102 26 26 26 24 102 Add: Income tax expense (benefit) 105 (19) (220) 79 35 41 34 19 129 Add: Depreciation and amortization 199 229 258 274 67 78 71 71 287 EBITDA $ 701 $ 303 $ 405 $ 821 $ 230 $ 273 $ 235 $ 142 $ 880 Petroleum Segment (In USD Millions, except per bbl data) Refining Margin per throughput barrel 1Q 2019 2Q 2019 3Q 2019 4Q 2019 2019 Refining margin $ 317 $ 308 $ 334 $ 244 $ 1,203 Divided by: total throughput barrels 19 20 20 20 79 Refining margin per throughput barrel $ 16.55 $ 15.66 $ 16.34 $ 12.47 $ 15.26 Inventory valuation impacts $ (32) $ - $ 1 $ (12) $ (43) Refining margin, excluding inventory valuation impacts 285 308 335 232 1,160 Divided by: total throughput barrels 19 20 20 20 79 Refining margin, excluding inventory valuations impacts, per throughput barrel $ 14.88 $ 15.68 $ 16.37 $ 11.86 $ 14.71 Direct Operating Expense per throughput barrel 1Q 2019 2Q 2019 3Q 2019 4Q 2019 2019 Direct operating expenses $ 92 $ 91 $ 86 $ 91 $ 359 Throughput (bpd) 221,481 212,806 216,283 212,729 215,840 Total Throughput (mm bbls) 20 19 20 20 79 Direct operating expenses per total throughput barrel $ 4.45 $ 4.75 $ 4.40 $ 4.63 $ 4.56 Note: All amounts on this slide are adjusted for the turnaround accounting change effective in 1Q19. These amounts are unaudited. 26


 
Non-GAAP Financial Measures (In USD Millions) CVR Partners, LP 2015 2016 2017 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 2019 Net Income (loss) $ 62 $ (27) $ (73) $ (50) $ (6) $ 19 $ (23) $ (25) $ (35) Add: Interest expense and other financing costs, net of interest income 7 49 63 63 16 16 16 16 63 Add: Income tax expense (benefit) - 0 0 (0) (0) 0 - 0 (0) Add: Depreciation and amortization 28 58 74 72 17 25 18 20 79 EBITDA $ 97 $ 80 $ 64 $ 84 $ 26 $ 60 $ 11 $ 11 $ 107 Add: Turnaround expenses 7 7 3 6 - 0 7 3 10 Add: Loss on extinguishment of debt - 5 - - - - - - - Add: Expenses associated with the East Dubuque Facility acquisition 2 3 - - - - - - - Adjusted EBITDA $ 107 $ 95 $ 67 $ 90 $ 26 $ 60 $ 18 $ 14 $ 117 (In USD Millions) CVR Partners, LP 2015 2016 2017 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 2019 Adjusted EBITDA $ 107 $ 95 $ 67 $ 90 $ 26 $ 60 $ 18 $ 14 $ 117 Less: Debt service (6) (46) (60) (59) (15) (15) (15) (15) (60) Less: Maintenance capital expenditures (10) (14) (14) (15) (3) (1) (7) (7) (18) Less: Turnaround expenses (7) (7) (3) (6) - (0) (7) (3) (10) Less: Cash reserves for future operating needs - - - - - (5) - (5) Less: Cash reserves for future turnaround expenses (8) - - - - (7) - (7) Less: Cash reserves for maintenance capital expenditures - - - - - (16) - (16) Less: Expenses associated with East Dubuque Facility acquisition (2) (3) - - - - - - Add: Impact of purchase accounting - 13 - - - - - - Add: Available cash associated with East Dubuque 2016 first quarter - 6 - - - - - - Add: Release of previously established cash reserves 7 - - - - - 18 7 26 Available cash for distribution $ 81 $ 45 $ (10) $ 10 $ 8 $ 15 $ 8 $ (4) $ 27 27


 
Non-GAAP Financial Measures Reconciliation of Projected Logistics Net Income to Projected Logistics EBITDA (Annual, USD Millions) Projected Logistics Net Income $ 49 to $ 55 Income tax expense 10 to 12 Depreciation & amortization 6 to 8 Projected Logistics EBITDA $ 65 to $ 75 Reconciliation of Projected Isomerization Project Net Income to Projected Isomerization Project EBITDA (Annual, USD Millions) Projected Isomerization Project Net Income $ 21 Income tax expense 7 Depreciation & amortization 6 Projected Isomerization Project EBITDA (1) $ 34 (1) Represents the lowest projected uplift 28


 
2020 Estimated Capital Expenditures 2019 Actual 2020 Estimate (1)(2) Maintenance Growth Total Maintenance Growth Total Low High Low High Low High Petroleum $ 79 $ 10 $ 89 $ 55 $ 60 $ 50 $ 55 $ 105 $ 115 Nitrogen Fertilizer 18 2 20 19 21 4 6 23 27 Other 5 - 5 5 8 - - 5 8 Total $ 102 $ 12 $ 114 $ 79 $ 89 $ 54 $ 61 $ 133 $ 150 (1) Total 2020 estimated capital expenditures includes approximately $45 to $55 million of growth-related additional approvals before commencement (2) Total 2020 estimated capital expenditures does not include planned Turnaround spending of $145 to $155 million 29


 
Simplified Organizational Structure 30