UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 13, 2011
CVR ENERGY, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-33492 | 61-1512186 | ||
| (State or other | (Commission File Number) | (I.R.S. Employer | ||
| jurisdiction of | Identification Number) | |||
| incorporation) |
2277 Plaza Drive, Suite 500
Sugar Land, Texas 77479
Sugar Land, Texas 77479
(Address of principal
executive offices,
including zip code)
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:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 9.01. Financial Statements and Exhibits.
| (b) | Pro forma financial information. |
The purpose of this Current Report on Form 8-K/A is to amend the Current Report on Form 8-K of
CVR Energy, Inc. (the “Company”), filed on April 14, 2011, which described (among other things) the
completion of the initial public offering (the “Offering”) of CVR Partners, LP and provided the
unaudited pro forma consolidated balance sheet of the Company as of December 31, 2010 and the
unaudited pro forma consolidated statement of operations of the Company for the year ended December
31, 2010 and the accompanying notes. The pro forma financial statements of the Company filed on
April 14, 2011 give effect to the Offering as if it had occurred on January 1, 2010 (for the
statement of operations) and December 31, 2010 (for the balance sheet).
Attached as Exhibit 99.1 to this report is the updated, unaudited pro forma consolidated
balance sheet of the Company as of March 31, 2011 and the unaudited pro forma consolidated
statement of operations of the Company for the quarter ended March 31, 2011 and the accompanying
notes. The pro forma financial statements of the Company give effect to the Offering as if it had
occurred on January 1, 2011 (for the statement of operations) and March 31, 2011 (for the balance
sheet).
| (d) | Exhibits. |
A list of exhibits filed herewith is contained in the exhibit index following the signature
page hereto and is incorporated by reference herein.
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: May 23, 2011
| CVR Energy, Inc. | ||||||
| By: | /s/ Edmund S. Gross
|
|||||
| Senior Vice President, General Counsel and | ||||||
| Secretary | ||||||
Exhibit Index
| Exhibit No. | Description | |
99.1
|
Unaudited pro forma consolidated financial statements of CVR Energy, Inc. |
Exhibit 99.1
CVR ENERGY, INC.
AND SUBSIDIARIES
UNAUDITED PRO
FORMA CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated financial statements of CVR
Energy, Inc. have been derived from the unaudited historical
financial statements of CVR Energy, Inc. for the three months
ended and as of March 31, 2011, which are included in CVR
Energy, Inc.’s Form 10-Q for the three months ended
March 31, 2011.
The pro forma consolidated balance sheet as of March 31,
2011 and the pro forma consolidated statement of operations for
the three months ended March 31, 2011 have been adjusted to
give effect to the following transactions:
| • | The interests of Coffeyville Resources, LLC (“CRLLC”) and CVR Special GP, LLC (“Special GP”) in CVR Partners, LP (“CVR Partners”) were converted into 50,920 and 50,869,080 common units, respectively, and Special GP, a wholly-owned subsidiary of CRLLC, was merged with and into CRLLC, with CRLLC continuing as the surviving entity; | |
| • | CVR Partners offered and sold 22,080,000 common units to the public at a public offering price of $16.00 per unit and paid related commissions and expenses; | |
| • | CVR Partners’ general partner sold its incentive distribution rights, or lDRs, to CVR Partners for $26.0 million in cash (representing fair market value), and CVR Partners extinguished such IDRs; | |
| • | CVR GP, LLC, the general partner of CVR Partners (“CVR GP”) and CRLLC, entered into a second amended and restated agreement of limited partnership; | |
| • | CVR Partners entered into a new credit facility, which included a $125.0 million term loan and a $25.0 million revolving credit facility both due in 2016, drew the $125.0 million term loan in full, and paid associated financing costs; and | |
| • | Coffeyville Acquisition III LLC, the then-owner of CVR GP, sold CVR GP and its non-economic general partner interest to CRLLC for nominal consideration. |
The pro forma adjustments have been prepared as if the
transactions described above had taken place on March 31,
2011, in the case of the pro forma balance sheet, or as of
January 1, 2011 in the case of the pro forma statement of
operations.
The unaudited pro forma consolidated financial statements are
not necessarily indicative of the results that we would have
achieved had the transactions described herein actually taken
place at the dates indicated, and do not purport to be
indicative of future financial position or operating results.
The unaudited pro forma consolidated financial statements do not
reflect the repurchase of $2.7 million of CRLLC and Coffeyville
Finance’s outstanding notes that were tendered pursuant to
the offer to purchase dated April 14, 2011. The unaudited pro forma
consolidated financial statements should be read in conjunction
with the unaudited financial statements of CVR Energy, Inc., the
related notes and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations“
included in CVR Energy, Inc.’s
Form 10-Q
for the three months March 31, 2011.
The pro forma adjustments are based on available information and
certain assumptions that we believe are reasonable. The pro
forma adjustments and the assumptions included therein are
described in the accompanying notes.
CVR Energy, Inc.
and Subsidiaries
Unaudited Pro
Forma Consolidated Balance Sheet
As of
March 31, 2011
|
Actual as of |
Pro Forma |
Pro Forma as of |
||||||||||
| March 31, 2011 | Adjustments | March 31, 2011 | ||||||||||
| (In thousands) | ||||||||||||
|
ASSETS
|
||||||||||||
|
Current assets:
|
||||||||||||
|
Cash and cash equivalents
|
$ | 165,896 | $ | 353,280 | (a) | $ | 586,923 | |||||
| (26,441 | ) (b) | |||||||||||
| 125,000 | (c) | |||||||||||
| (4,812 | ) (d) | |||||||||||
| (26,000 | ) (e) | |||||||||||
|
Accounts receivable, net of allowance for doubtful accounts of
$845
|
113,988 | — | 113,988 | |||||||||
|
Inventories
|
395,076 | — | 395,076 | |||||||||
|
Prepaid expenses and other current assets
|
51,061 | (3,673 | ) (b) | 47,388 | ||||||||
|
Deferred income taxes
|
39,825 | (2,250 | ) (f) | 37,575 | ||||||||
|
Total current assets
|
765,846 | 415,104 | 1,180,950 | |||||||||
|
Property, plant, and equipment, net of accumulated depreciation
|
1,063,831 | — | 1,063,831 | |||||||||
|
Intangible assets, net
|
336 | — | 336 | |||||||||
|
Goodwill
|
40,969 | — | 40,969 | |||||||||
|
Deferred financing costs, net
|
12,949 | 4,812 | (d) | 17,761 | ||||||||
|
Insurance receivable
|
3,570 | — | 3,570 | |||||||||
|
Other long-term assets
|
4,461 | — | 4,461 | |||||||||
|
Total assets
|
$ | 1,891,962 | $ | 419,916 | $ | 2,311,878 | ||||||
| LIABILITIES AND EQUITY | ||||||||||||
|
Current liabilities:
|
||||||||||||
|
Note payable and capital lease obligations
|
$ | 1,495 | $ | — | $ | 1,495 | ||||||
|
Accounts payable
|
226,073 | (1,384 | ) (b) | 224,689 | ||||||||
|
Personnel accruals
|
19,451 | — | 19,451 | |||||||||
|
Accrued taxes other than income taxes
|
24,919 | — | 24,919 | |||||||||
|
Income taxes payable
|
23,141 | 38,655 | (f) | 61,796 | ||||||||
|
Deferred revenue
|
26,726 | — | 26,726 | |||||||||
|
Other current liabilities
|
41,840 | — | 41,840 | |||||||||
|
Total current liabilities
|
363,645 | 37,271 | 400,916 | |||||||||
|
Long-term liabilities:
|
||||||||||||
|
Long-term debt, net of current portion
|
469,075 | 125,000 | (c) | 594,075 | ||||||||
|
Accrued environmental liabilities, net of current portion
|
2,344 | — | 2,344 | |||||||||
|
Deferred income taxes
|
299,177 | (40,905 | ) (f) | 326,367 | ||||||||
| 68,095 | (g) | |||||||||||
|
Other long-term liabilities
|
3,898 | — | 3,898 | |||||||||
|
Total long-term liabilities
|
774,494 | 152,190 | 926,684 | |||||||||
|
Commitments and contingencies
|
||||||||||||
|
Equity:
|
||||||||||||
|
CVR stockholders’ equity:
|
||||||||||||
|
Common stock $0.01 par value per share,
350,000,000 shares authorized, 86,435,672 shares issued
|
864 | — | 864 | |||||||||
|
Additional
paid-in-capital
|
475,732 | 215,740 | (a) | 579,247 | ||||||||
| (28,730 | ) (b) | |||||||||||
| (15,400 | ) (e) | |||||||||||
| (68,095 | ) (g) | |||||||||||
|
Retained earnings
|
266,867 | — | 266,867 | |||||||||
|
Treasury stock, 21,891, at cost
|
(243 | ) | — | (243 | ) | |||||||
|
Accumulated other comprehensive income, net of tax
|
3 | — | 3 | |||||||||
|
Total CVR stockholders’ equity
|
743,223 | 103,515 | 846,738 | |||||||||
|
Noncontrolling interest
|
10,600 | 137,540 | (a) | 137,540 | ||||||||
| (10,600 | ) (e) | |||||||||||
|
Total equity
|
753,823 | 230,455 | 984,278 | |||||||||
|
Total liabilities and equity
|
$ | 1,891,962 | $ | 419,916 | $ | 2,311,878 | ||||||
The accompanying notes are an integral part of these unaudited
pro forma consolidated financial statements.
CVR Energy, Inc.
and Subsidiaries
Unaudited Pro
Forma Consolidated Statement of Operations
As of
March 31, 2011
|
Actual as of |
Pro Forma |
Pro Forma as of |
||||||||||
| March 31, 2011 | Adjustments | March 31, 2011 | ||||||||||
| (in thousands) | ||||||||||||
|
Net sales
|
$ | 1,167,265 | $ | — | $ | 1,167,265 | ||||||
|
Operating costs and expenses:
|
||||||||||||
|
Cost of product sold (exclusive of depreciation and amortization)
|
936,822 | — | 936,822 | |||||||||
|
Direct operating expenses (exclusive of depreciation and
amortization)
|
68,326 | — | 68,326 | |||||||||
|
Insurance recovery — business interruption
|
(2,870 | ) | — | (2,870 | ) | |||||||
|
Selling, general and administrative expenses
(exclusive of depreciation and amortization)
|
33,262 | — | 33,262 | |||||||||
|
Net costs associated with flood
|
108 | — | 108 | |||||||||
|
Depreciation and amortization
|
22,011 | — | 22,011 | |||||||||
|
Total operating costs and expenses
|
1,057,659 | — | 1,057,659 | |||||||||
|
Operating Income
|
109,606 | — | 109,606 | |||||||||
|
Other income (expense):
|
||||||||||||
|
Interest expense and other financing costs
|
(13,190 | ) | (1,250 | ) (a) | (14,712 | ) | ||||||
| (241 | ) (b) | |||||||||||
| (31 | ) (c) | |||||||||||
|
Interest income
|
274 | 163 | (d) | 437 | ||||||||
|
Gain (loss) on derivatives, net
|
(22,106 | ) | — | (22,106 | ) | |||||||
|
Loss on extinguishment of debt
|
(1,908 | ) | — | (1,908 | ) | |||||||
|
Other income
|
231 | — | 231 | |||||||||
|
Total other income
|
(36,699 | ) | (1,359 | ) | (38,058 | ) | ||||||
|
Income (loss) before income taxes and noncontrolling interest
|
72,907 | (1,359 | ) | 71,548 | ||||||||
|
Income tax expense
|
27,119 | (3,637 | ) (e) | 23,482 | ||||||||
|
Net income
|
45,788 | 2,278 | 48,066 | |||||||||
|
Less: Net income attributable to noncontrolling interest
|
— | 4,651 | (f) | 4,651 | ||||||||
|
Net income attributable to CVR Energy, Inc.
|
$ | 45,788 | $ | (2,373 | ) | $ | 43,415 | |||||
|
Basic earnings per share
|
$ | 0.53 | $ | 0.50 | ||||||||
|
Diluted earnings per share
|
$ | 0.52 | $ | 0.49 | ||||||||
|
Weighted-average common shares outstanding:
|
||||||||||||
|
Basic
|
86,413,781 | 86,413,781 | ||||||||||
|
Diluted
|
87,783,857 | 87,783,857 | ||||||||||
The accompanying notes are an integral part of these unaudited
pro forma consolidated financial statements.
CVR ENERGY, INC.
AND SUBSIDIARIES
NOTES TO THE
UNAUDITED PRO FORMA
CONSOLIDATED
FINANCIAL STATEMENTS
| (1) | Pro Forma Balance Sheet Adjustments and Assumptions |
(a) Reflects (1) the issuance by CVR Partners, LP (CVR
Partners) of 19,200,000 common units to the public at an initial
public offering price of $16.00 per common unit resulting in
aggregate gross proceeds of $307.2 million and (2) the
exercise by the underwriters of their option to sell 2,880,000
common units at $16.00 per common unit to cover over-allotments
resulting in aggregate gross proceeds of $46.1 million, for
a total of $353.3 million. Associated with this transaction
is the entry to record the noncontrolling interest at
approximately 30.2% of the total partners’ capital carrying
value at CVR Partners, with the excess recorded to additional
paid-in-capital
for CVR Energy.
(b) Reflects the payment of underwriting commissions of
$24.7 million and other estimated offering expenses of
$4.0 million for a total of $28.7 million which will
be allocated to the newly issued public common units of CVR
Partners and recorded in additional
paid-in-capital
for CVR Energy. Of the $4.0 million in estimated offering
costs, $2.3 million had been prepaid and $1.4 million
had been accrued.
(c) Reflects term debt incurred by CVR Partners of
$125.0 million.
(d) Reflects the estimated deferred financing costs of
$3.0 million paid to the lenders and approximately
$1.8 million paid for third party costs associated with the
new credit facility of CVR Partners.
(e) Reflects the purchase of the incentive distribution rights of the managing general partner
interest of CVR Partners for $26.0 million which represents the fair market value.
(f) Reflects an increase to income taxes payable primarily
due to the estimated taxable gain on distributions from CVR
Partners to CRLLC in excess of CRLLC’s allocable tax basis
in CVR Partners. The change in deferred tax assets and deferred
tax liabilities is due to the reclassification of the net book
versus tax basis difference associated with the investment in
CVR Partners to a noncurrent deferred tax liability in
conjunction with the initial public offering of CVR Partners.
Deferreds historically were recorded based upon each separate
component of the book versus tax basis difference of CVR
Partners’ assets and liabilities.
(g) Reflects the deferred tax liability recorded associated
with the difference between the book carrying value of CVR
Energy’s investment in CVR Partners and the tax basis
resulting from gains recorded in additional
paid-in-capital.
| (2) | Pro Forma Statement of Operations Adjustments and Assumptions |
(a) Reflects the inclusion of interest expense relating to
the new credit facility of CVR Partners at an assumed rate of
4.0% with no balance outstanding under the revolver.
(b) Reflects the amortization of related debt issuance
costs of the new credit facility of CVR Partners over a five
year term.
(c) Reflects the commitment fee of 0.50% on the estimated
unused portion of the $25.0 million revolving credit
facility of CVR Partners.
(d) Reflects the inclusion of interest income earned on the
average cash balance of CVR Partners.
CVR ENERGY, INC.
AND SUBSIDIARIES
NOTES TO THE
UNAUDITED PRO FORMA
CONSOLIDATED
FINANCIAL STATEMENTS—(Continued)
(e) Reflects adjustments attributable to the noncontrolling
interest and the reduction in pre-tax income.
(f) Reflects the removal of net income attributable to the
noncontrolling interest.
| (3) | Pro Forma Net Income per Common Share |
Pro forma net income per common share is determined by dividing
the pro forma net income that has been adjusted for adjustments
of interest expense, interest income, income tax expense and
income attributable to the noncontrolling interest by the
weighted average common shares outstanding to determine both the
basic and diluted net income per common share. The pro forma
adjustments do not impact the weighted average shares
outstanding.
| (4) | Incremental Post-IPO Costs |
CVR Partners anticipates incurring incremental general and
administrative expenses subsequent to the initial public
offering, as a result of being a publicly traded limited
partnership, such as costs associated with SEC reporting
requirements, including annual and quarterly reports to
unitholders, tax return and
Schedule K-1
preparation and distribution, independent auditor fees, investor
relations activities and registrar and transfer agent fees. It
is estimated that these incremental general and administrative
expenses will be approximately $3.5 million per year. The
unaudited pro forma consolidated financial statements do not
reflect the $3.5 million in incremental expenses.