SUGAR LAND, Texas, Aug. 4 /PRNewswire-FirstCall/ -- CVR Energy, Inc.
(NYSE: CVI), a refiner and marketer of petroleum fuels and a
nitrogen fertilizer products manufacturer, today reported second
quarter 2010 net income of $1.2
million, or $0.01 per fully
diluted share, on net sales of $1,005.9
million.
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The 2010 second quarter results compared to net income of
$42.7 million, or $0.49 per share, on sales of $793.3 million for the same quarter in 2009.
For the first six months of 2010, the company reported an
$11.2 million loss, or a loss of
$0.13 per share, on net sales of
$1,900.4 million, as compared to net
income of $73.3 million in the first
six months of 2009, or $0.85 per
share, on net sales of $1,402.7
million.
The second quarter results included a number of one-time items.
On a pre-tax basis, the company expensed $14.6 million related to extinguishment of debt
and other costs associated with the restructuring of the company's
long-term debt and incurred a one-time $1.3
million write-off of a capital project. In addition,
the company's results for the quarter were affected by continued
volatility of commodity prices, which resulted in a negative
$17.5 million pre-tax
First-In-First-Out (FIFO) impact.
In the aggregate, the elimination of these items using a 39.7
percent statutory tax rate would have resulted in an adjusted Net
Income for the quarter of $21.3
million or $0.25 per fully
diluted share.
"The highlight of the quarter was our extension of our long-term
debt through the successful high-yield bond transactions," said
Chief Executive Officer Jack
Lipinski. "This restructuring of older term debt with
new financing leaves us well positioned for the future. While
the charges associated with the bonds had a one-time negative
affect on our quarterly results, we now have greater financial
stability and flexibility going forward that will allow us to
better handle the volatility in our business."
Petroleum Business
The petroleum business reported second quarter 2010 operating
income of $4.6 million on net sales
of $951.3 million compared to
operating income of $96.2 million on
sales of $740.0 million in the second
quarter of 2009. The results for the second quarter 2010
reflected an unfavorable impact from FIFO accounting of
$17.5 million, compared to a
favorable impact of $67.3 million in
the same period of 2009. For the first six months of 2010,
the petroleum segment had an operating loss of $2.4 million compared to operating income of
$160.9 million for the first six
months in 2009.
For the second quarter, the refinery had total crude oil
throughput of 113,431 barrels per day, compared with 111,620
barrels per day of crude during the second quarter of 2009.
Including all other feedstocks and blendstocks, the refinery
had total throughput of 121,867 barrels per day.
Refining margin per crude oil throughput barrel (see footnote 8)
was $6.70 in the second quarter of
2010, a decrease from $15.58 during
the same period in 2009. Gross profit per crude oil
throughput barrel (see footnote 7) was $1.13 in the second quarter of 2010, down from
$10.77 per crude oil throughput
barrel during the same period in 2009.
Direct operating expense, exclusive of depreciation and
amortization, for the second quarter 2010 was $3.63 per barrel sold, as compared to
$2.90 per barrel sold in the second
quarter of 2009. This increase was primarily attributable to
higher natural gas usage and higher prices in 2010 as well as
unplanned maintenance costs related to the outages at the catalytic
cracker and coker during the quarter.
Nitrogen Fertilizers Business
The nitrogen fertilizer business reported second quarter 2010
operating income of $16.5 million on
net sales of $56.3 million, compared
to operating income of $16.5 million
on net sales of $55.3 million during
the equivalent period in 2009.
Excluding the impact of a third party air separation unit
outage, the nitrogen fertilizer plant on-stream factors were 97.8
percent for the gasifier, 96.8 percent for the ammonia synthesis
loop, and 95.3 percent for the UAN facility.
For the second quarter 2010, average realized plant gate prices
for ammonia and UAN were $312
per ton and $205 per ton
respectively, compared to $351 per
ton and $249 per ton respectively for
the equivalent period in 2009.
Nitrogen Fertilizers produced 105,200 tons of ammonia during the
second quarter of 2010, of which 38,700 net tons were available for
sale while the rest was upgraded to 162,900 tons of more highly
valued UAN. In the 2009 second quarter, the plant produced
103,300 tons of ammonia with 38,900 net tons available for sale and
the remainder upgraded to 156,100 tons of UAN.
This news release contains 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," "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 Annual Report on Form 10-K
for the year ended Dec. 31, 2009, 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. The Company undertakes no duty to
update its forward-looking statements.
About CVR Energy, Inc.
Headquartered in Sugar Land,
Texas, CVR Energy, Inc.'s subsidiary and affiliated
businesses include an independent refiner that operates a 115,000
barrel per day refinery in Coffeyville,
Kan., and markets high value transportation fuels supplied
to customers through tanker trucks and pipeline terminals; a crude
oil gathering system serving Kansas, northern Oklahoma, western Missouri and southwestern Nebraska; an asphalt and refined fuels storage
and terminal business in Phillipsburg,
Kan.; and through a limited partnership, an ammonia and urea
ammonium nitrate fertilizer business located in Coffeyville, Kan.
For further information, please
contact:
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Investor
Relations:
|
Media Relations:
|
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Stirling Pack, Jr.
|
Steve Eames
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|
CVR Energy, Inc.
|
CVR Energy, Inc.
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281-207-3464
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281-207-3550
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InvestorRelations@CVREnergy.com
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MediaRelations@CVREnergy.com
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CVR Energy, Inc.
The following tables summarize the financial data and key
operating statistics for CVR Energy and our two operating segments
for the three and six months ended June 30, 2010 and 2009.
Select balance sheet data is as of June 30, 2010 and December 31, 2009.
The summary financial data for our two operating segments does not
include certain selling, general and administrative expenses and
depreciation and amortization related to our corporate offices.
|
|
Three Months
Ended
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
(in millions, except share
data)
|
|
|
|
(unaudited)
|
|
Consolidated Statement of
Operations Data:
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
1,005.9
|
|
$
793.3
|
|
$
1,900.4
|
|
$
1,402.7
|
|
|
Cost of product sold*
|
|
891.7
|
|
587.6
|
|
1,694.5
|
|
1,009.2
|
|
|
Direct operating
expenses*
|
|
62.5
|
|
54.5
|
|
123.1
|
|
110.7
|
|
|
Selling, general and
administrative expenses*
|
|
10.8
|
|
21.8
|
|
32.2
|
|
41.3
|
|
|
Net costs associated with
flood
|
|
—
|
|
(0.1)
|
|
—
|
|
0.1
|
|
|
Depreciation and
amortization
|
|
21.5
|
|
21.1
|
|
42.8
|
|
42.0
|
|
|
Operating
income
|
|
19.4
|
|
108.4
|
|
7.8
|
|
199.4
|
|
|
Interest expense and other
financing costs
|
|
(12.8)
|
|
(11.2)
|
|
(22.7)
|
|
(22.7)
|
|
|
Gain (loss) on derivatives,
net
|
|
7.3
|
|
(29.2)
|
|
8.8
|
|
(66.1)
|
|
|
Loss on extinguishment of
debt
|
|
(14.6)
|
|
(0.7)
|
|
(15.1)
|
|
(0.7)
|
|
|
Other income, net
|
|
1.5
|
|
0.9
|
|
1.9
|
|
0.9
|
|
|
Income (loss) before income tax
expense (benefit)
|
|
0.8
|
|
68.2
|
|
(19.3)
|
|
110.8
|
|
|
Income tax expense
(benefit)
|
|
(0.4)
|
|
25.5
|
|
(8.1)
|
|
37.5
|
|
|
Net income
(loss)
|
|
$
1.2
|
|
$
42.7
|
|
$
(11.2)
|
|
$
73.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amounts shown are
exclusive
of depreciation
and amortization.
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share
|
|
$
0.01
|
|
$
0.49
|
|
$
(0.13)
|
|
$
0.85
|
|
|
Diluted earnings
(loss) per share
|
|
$
0.01
|
|
$
0.49
|
|
$
(0.13)
|
|
$
0.85
|
|
|
Weighted average common shares
outstanding
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
86,336,125
|
|
86,244,152
|
|
86,332,700
|
|
86,243,949
|
|
|
Diluted
|
|
86,506,590
|
|
86,333,349
|
|
86,332,700
|
|
86,327,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30,
|
|
As of December
31,
|
|
|
|
2010
|
|
2009
|
|
|
|
(in millions)
|
|
|
|
(unaudited)
|
|
|
|
Balance Sheet
Data:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
63.3
|
|
$
36.9
|
|
Working capital
|
|
265.4
|
|
235.4
|
|
Total assets
|
|
1,620.7
|
|
1,614.5
|
|
Total debt, including current
portion
|
|
500.9
|
|
491.3
|
|
Total CVR stockholders'
equity
|
|
645.3
|
|
653.8
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
(in millions)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Data:
|
|
|
|
|
|
|
|
|
|
Cash flows provided by operating
activities
|
$
2.2
|
|
$
54.8
|
|
$
45.7
|
|
$
91.5
|
|
|
Cash flows used in investing
activities
|
(5.4)
|
|
(8.7)
|
|
(16.8)
|
|
(24.6)
|
|
|
Cash flows provided by (used in)
financing activities
|
28.9
|
|
(1.2)
|
|
(2.5)
|
|
(2.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
(in millions except per share
data)
|
|
|
|
|
|
|
(unaudited)
|
|
Non-GAAP
Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income
(Loss) to Adjusted Net Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss)
|
|
$
1.2
|
|
$
42.7
|
|
$
(11.2)
|
|
$
73.3
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
FIFO impact (favorable)
unfavorable, net of taxes (1)
|
|
10.6
|
|
(40.6)
|
|
3.1
|
|
(27.0)
|
|
|
|
Loss on extinguishment of debt,
net of taxes (2)
|
|
8.7
|
|
0.4
|
|
9.1
|
|
0.4
|
|
|
|
Loss on disposition of assets,
net of taxes (3)
|
|
0.8
|
|
-
|
|
0.8
|
|
-
|
|
|
|
|
Adjusted net income
(4)
|
|
$
21.3
|
|
$
2.5
|
|
$
1.8
|
|
$
46.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per diluted
share
|
|
$
0.25
|
|
$
0.03
|
|
$
0.02
|
|
$
0.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
(in millions, except operating
statistics)
|
|
|
|
(unaudited)
|
|
Petroleum Business Financial
Results:
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
951.3
|
|
$
740.0
|
|
$
1,808.0
|
|
$
1,285.2
|
|
|
Cost of product sold*
|
|
882.1
|
|
581.7
|
|
1,681.1
|
|
999.3
|
|
|
Direct operating expenses*
(5)(6)
|
|
41.2
|
|
33.0
|
|
79.5
|
|
67.6
|
|
|
Net costs associated with
flood
|
|
—
|
|
(0.1)
|
|
—
|
|
0.1
|
|
|
Depreciation and
amortization
|
|
16.4
|
|
16.0
|
|
32.6
|
|
31.8
|
|
|
Gross profit
(7)
|
|
$
11.6
|
|
$
109.4
|
|
$
14.8
|
|
$
186.4
|
|
|
Plus direct operating
expenses*
|
|
41.2
|
|
33.0
|
|
79.5
|
|
67.6
|
|
|
Plus net costs associated with
flood
|
|
—
|
|
(0.1)
|
|
—
|
|
0.1
|
|
|
Plus depreciation and
amortization
|
|
16.4
|
|
16.0
|
|
32.6
|
|
31.8
|
|
|
Refining margin (8)
|
|
$
69.2
|
|
$
158.3
|
|
$
126.9
|
|
$
285.9
|
|
|
FIFO impact (favorable)
unfavorable (1)
|
|
17.5
|
|
(67.3)
|
|
5.2
|
|
(44.7)
|
|
|
Refining margin adjusted for
FIFO impact (9)
|
|
$
86.7
|
|
$
91.0
|
|
$
132.1
|
|
$
241.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
$
4.6
|
|
$
96.2
|
|
$
(2.4)
|
|
$
160.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Petroleum Key Operating
Statistics:
|
|
|
|
|
|
|
|
|
|
|
Per crude oil throughput
barrel:
|
|
|
|
|
|
|
|
|
|
|
Refining margin
(8)
|
|
$
6.70
|
|
$
15.58
|
|
$
6.41
|
|
$
14.50
|
|
|
FIFO impact
(favorable) unfavorable (1)
|
|
1.70
|
|
(6.62)
|
|
0.26
|
|
(2.27)
|
|
|
Refining margin
adjusted for FIFO impact (9)
|
|
8.40
|
|
8.96
|
|
6.67
|
|
12.23
|
|
|
Gross profit
(7)
|
|
1.13
|
|
10.77
|
|
0.75
|
|
9.46
|
|
|
Direct operating
expenses* (5)
|
|
3.99
|
|
3.25
|
|
4.02
|
|
3.43
|
|
|
Direct operating expenses per
barrel sold* (6)
|
|
3.63
|
|
2.90
|
|
3.63
|
|
3.03
|
|
|
Barrels sold (barrels per day)
(6)
|
|
124,486
|
|
125,121
|
|
121,016
|
|
123,305
|
|
|
_______________
|
|
|
|
|
* Amounts shown are exclusive of
depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Refining Throughput and
Production Data:
|
|
(unaudited)
|
|
(barrels per
day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughput:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweet
|
|
90,829
|
|
74.5%
|
|
87,610
|
|
70.8%
|
|
87,864
|
|
74.8%
|
|
81,319
|
|
66.5%
|
|
Light/medium
sour
|
|
8,505
|
|
7.0%
|
|
16,245
|
|
13.1%
|
|
8,019
|
|
6.8%
|
|
18,477
|
|
15.1%
|
|
Heavy sour
|
|
14,097
|
|
11.6%
|
|
7,765
|
|
6.3%
|
|
13,425
|
|
11.4%
|
|
9,114
|
|
7.5%
|
|
Total crude
oil throughput
|
|
113,431
|
|
93.1%
|
|
111,620
|
|
90.2%
|
|
109,308
|
|
93.0%
|
|
108,910
|
|
89.1%
|
|
All other feedstocks and
blendstocks
|
|
8,436
|
|
6.9%
|
|
12,097
|
|
9.8%
|
|
8,209
|
|
7.0%
|
|
13,290
|
|
10.9%
|
|
Total
throughput
|
|
121,867
|
|
100.0%
|
|
123,717
|
|
100.0%
|
|
117,517
|
|
100.0%
|
|
122,200
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
55,998
|
|
45.7%
|
|
63,170
|
|
51.0%
|
|
57,508
|
|
48.5%
|
|
63,745
|
|
52.1%
|
|
Distillate
|
|
51,008
|
|
41.6%
|
|
48,192
|
|
38.9%
|
|
48,137
|
|
40.6%
|
|
47,194
|
|
38.6%
|
|
Other (excluding
internally produced fuel)
|
|
15,607
|
|
12.7%
|
|
12,529
|
|
10.1%
|
|
12,911
|
|
10.9%
|
|
11,338
|
|
9.3%
|
|
Total
refining production (excluding
internally
produced fuel)
|
|
122,613
|
|
100.0%
|
|
123,891
|
|
100.0%
|
|
118,556
|
|
100.0%
|
|
122,277
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product price (dollars per
gallon):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
$
2.12
|
|
|
|
$
1.70
|
|
|
|
$
2.08
|
|
|
|
$
1.47
|
|
|
|
Distillate
|
|
$
2.17
|
|
|
|
$
1.57
|
|
|
|
$
2.12
|
|
|
|
$
1.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Indicators (dollars per
barrel):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
West Texas Intermediate (WTI)
NYMEX
|
|
$ 78.05
|
|
|
|
$ 59.79
|
|
|
|
$ 78.46
|
|
|
|
$ 51.68
|
|
|
|
Crude Oil
Differentials:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WTI less WTS
(light/medium sour)
|
|
1.84
|
|
|
|
1.39
|
|
|
|
1.86
|
|
|
|
1.16
|
|
|
|
WTI less WCS (heavy
sour)
|
|
13.92
|
|
|
|
9.19
|
|
|
|
12.19
|
|
|
|
8.20
|
|
|
|
NYMEX Crack Spreads:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
13.00
|
|
|
|
12.23
|
|
|
|
11.39
|
|
|
|
10.68
|
|
|
|
Heating Oil
|
|
10.50
|
|
|
|
5.74
|
|
|
|
8.89
|
|
|
|
9.37
|
|
|
|
NYMEX 2-1-1 Crack
Spread
|
|
11.75
|
|
|
|
8.99
|
|
|
|
10.14
|
|
|
|
10.03
|
|
|
|
PADD II Group 3
Basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
(2.88)
|
|
|
|
(1.73)
|
|
|
|
(2.80)
|
|
|
|
(1.19)
|
|
|
|
Ultra Low Sulfur
Diesel
|
|
2.58
|
|
|
|
0.53
|
|
|
|
1.13
|
|
|
|
(0.63)
|
|
|
|
PADD II Group 3 Product
Crack:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
10.12
|
|
|
|
10.51
|
|
|
|
8.58
|
|
|
|
9.49
|
|
|
|
Ultra Low Sulfur
Diesel
|
|
13.08
|
|
|
|
6.27
|
|
|
|
10.03
|
|
|
|
8.75
|
|
|
|
PADD II Group 3 2-1-1
|
|
11.60
|
|
|
|
8.39
|
|
|
|
9.31
|
|
|
|
9.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
(in millions, except as
noted)
|
|
|
|
(unaudited)
|
|
Nitrogen Fertilizer Business
Financial Results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
56.3
|
|
$
55.3
|
|
$
94.6
|
|
$
123.1
|
|
|
Cost of product sold*
|
|
11.9
|
|
8.2
|
|
16.9
|
|
16.9
|
|
|
Direct operating
expenses*
|
|
21.3
|
|
21.5
|
|
43.5
|
|
43.1
|
|
|
Net cost associated with
flood
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Depreciation and
amortization
|
|
4.7
|
|
4.7
|
|
9.3
|
|
9.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
16.5
|
|
$
16.5
|
|
$
19.5
|
|
$
45.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nitrogen Fertilizer Key
Operating Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production (thousand
tons):
|
|
|
|
|
|
|
|
|
|
|
Ammonia (gross produced)
(10)
|
|
105.2
|
|
103.3
|
|
210.3
|
|
211.3
|
|
|
Ammonia (net available
for sale) (10)
|
|
38.7
|
|
38.9
|
|
76.9
|
|
77.8
|
|
|
UAN
|
|
162.9
|
|
156.1
|
|
326.7
|
|
325.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Petroleum coke consumed
(thousand tons)
|
|
115.5
|
|
114.3
|
|
233.1
|
|
239.6
|
|
|
Petroleum coke (cost per
ton)
|
|
$
17
|
|
$
32
|
|
$
15
|
|
$
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales (thousand
tons):
|
|
|
|
|
|
|
|
|
|
|
Ammonia
|
|
50.6
|
|
27.4
|
|
81.8
|
|
75.4
|
|
|
UAN
|
|
172.2
|
|
161.8
|
|
327.9
|
|
304.7
|
|
|
Total
sales
|
|
222.8
|
|
189.2
|
|
409.7
|
|
380.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product pricing (plant gate)
(dollars per ton) (11):
|
|
|
|
|
|
|
|
|
|
|
Ammonia
|
|
$
312
|
|
$
351
|
|
$
300
|
|
$
365
|
|
|
UAN
|
|
$
205
|
|
$
249
|
|
$
187
|
|
$
280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On-stream factors
(12):
|
|
|
|
|
|
|
|
|
|
|
Gasification
|
|
92.2%
|
|
91.7%
|
|
94.0%
|
|
95.8%
|
|
|
Ammonia
|
|
90.4%
|
|
89.5%
|
|
92.3%
|
|
94.7%
|
|
|
UAN
|
|
89.1%
|
|
87.4%
|
|
89.8%
|
|
91.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to net sales
(dollars in millions):
|
|
|
|
|
|
|
|
|
|
|
Freight in
revenue
|
|
$
5.2
|
|
$
5.5
|
|
$
8.8
|
|
$
9.6
|
|
|
Hydrogen
revenue
|
|
—
|
|
—
|
|
—
|
|
0.7
|
|
|
Sales net plant
gate
|
|
51.1
|
|
49.8
|
|
85.8
|
|
112.8
|
|
|
Total net
sales
|
|
$
56.3
|
|
$
55.3
|
|
$
94.6
|
|
$
123.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
Indicators:
|
|
|
|
|
|
|
|
|
|
|
Natural gas NYMEX (dollars per
MMBtu)
|
|
$
4.35
|
|
$
3.81
|
|
$
4.67
|
|
$
4.13
|
|
|
Ammonia — Southern Plains
(dollars per ton)
|
|
$
359
|
|
$
308
|
|
$
345
|
|
$
322
|
|
|
UAN — Mid Cornbelt (dollars per
ton)
|
|
$
249
|
|
$
221
|
|
$
246
|
|
$
247
|
|
|
_______________
|
|
|
|
|
|
|
|
|
|
|
* Amounts shown are exclusive of
depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) First-in, first-out ("FIFO") is the Company's basis for
determining inventory value on a Generally Accepted Accounting
Principles ("GAAP") basis. 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. The FIFO impact is
calculated based upon inventory values at the beginning of the
accounting period and at the end of the accounting period. In
order to derive the FIFO impact per crude oil throughput barrel, we
utilize the total dollar figures for the FIFO impact and divide by
the number of crude oil throughput barrels for the period.
Below is the gross and tax affected FIFO impact for the
applicable periods:
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
(in millions)
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIFO impact
(favorable) unfavorable
|
$
|
17.5
|
|
$
|
(67.3)
|
|
$
|
5.2
|
|
$
|
(44.7)
|
|
|
Income tax expense
(benefit) of FIFO
|
|
(6.9)
|
|
|
26.7
|
|
|
(2.1)
|
|
|
17.7
|
|
|
|
|
|
|
|
|
|
|
|
|
FIFO impact
(favorable) unfavorable,
net of taxes
|
$
|
10.6
|
|
$
|
(40.6)
|
|
$
|
3.1
|
|
$
|
(27.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) In January 2010, we made
a voluntary unscheduled principal payment of $20.0 million on our tranche D term loans.
In addition, we made a second voluntary unscheduled principal
payment of $5.0 million in
February 2010. In connection
with these voluntary prepayments, we paid a 2.0% premium totaling
$0.5 million to the lenders of our
first priority credit facility. The premiums paid are
reflected as a loss on extinguishment of debt in our Consolidated
Statements of Operations. In April
2010, we paid off the remaining $453.0 million tranche D term loans. This payoff
was made possible by the issuance of $275.0
million aggregate principal amount of 9.0% First Lien Senior
Secured Notes due 2015 (the "First Lien Notes") and $225.0 million aggregate principal amount of
10.875% Second Lien Senior Secured Notes due 2017 (the "Second Lien
Notes" and together with the First Lien Notes, the "Notes").
In connection with the payoff, we paid a 2.0% premium
totaling approximately $9.1 million.
In addition, previously deferred borrowing costs totaling
approximately $5.4 million associated
with the first priority credit facility term debt were also written
off at that time. The Company also recognized approximately
$0.1 million of third party costs at
the time the Notes were issued. Other third party costs
incurred at the time were deferred and will be amortized over the
respective terms of the Notes. The premiums paid, previously
deferred borrowing costs subject to write-off and immediately
recognized third party expenses are reflected as a loss on
extinguishment of debt in our Condensed Consolidated Statements of
Operations. Below is the gross and tax affected loss on
extinguishment of debt for the applicable periods:
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of
debt
|
|
$
14.6
|
|
$
0.7
|
|
$
15.1
|
|
$
0.7
|
|
Income tax (benefit) of loss on
extinguishment of debt
|
|
(5.9)
|
|
(0.3)
|
|
(6.0)
|
|
(0.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of debt,
net of taxes
|
|
$
8.7
|
|
$
0.4
|
|
$
9.1
|
|
$
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) During the second quarter of 2010, the Company wrote-off an
amount associated with a capital project. Below is the gross
and tax affected impact of the write-off for the applicable
periods:
|
|
|
|
|
Three Months
Ended
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on disposition of
assets
|
|
$
1.3
|
|
$
-
|
|
$
1.3
|
|
$
-
|
|
Income tax (benefit) of loss on
disposition of assets
|
|
(0.5)
|
|
-
|
|
(0.5)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on disposition of assets,
net of taxes
|
|
$
0.8
|
|
$
-
|
|
$
0.8
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Adjusted net income results from adjusting net income for
items that the Company believes are needed in order to evaluate
results in a more comparative analysis from period to period. For
the three and six months ended June 30,
2010 and 2009, these items included the Company's impact of
the accounting for its inventory under FIFO, loss on extinguishment
of debt and loss on disposition of assets. Adjusted net
income is not a recognized term under GAAP and should not be
substituted for net income (loss) 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 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.
(5) Direct operating expense is presented on a per crude oil
throughput basis. We utilize the total direct operating
expenses, which does not include depreciation or amortization
expense, and divide by the applicable number of crude oil
throughput barrels for the period to derive the metric.
(6) Direct operating expense is presented on a per barrel sold
basis. Barrels sold are derived from the barrels produced and
shipped from the refinery. We utilize the total direct
operating expenses, which does not include depreciation or
amortization expense, and divide by the applicable number of
barrels sold for the period to derive the metric.
(7) In order to derive the gross profit per crude oil throughput
barrel, we utilize the total dollar figures for gross profit as
derived above and divide by the applicable number of crude oil
throughput barrels for the period.
(8) 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 refinery's 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.
(9) 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. 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. Refining margin adjusted for FIFO impact is a non-GAAP
measure that we believe is important to investors in evaluating our
refinery's 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.
(10) The gross tons produced for ammonia represent the total
ammonia produced, including ammonia produced that was upgraded into
UAN. The net tons available for sale represent the ammonia
available for sale that was not upgraded into UAN.
(11) Plant gate sales per ton represent net sales less freight
and hydrogen revenue divided by product sales volume in tons in the
reporting period. Plant gate pricing per ton is shown in order to
provide a pricing measure that is comparable across the fertilizer
industry.
(12) On-stream factor is the total number of hours operated
divided by the total number of hours in the reporting period.
Excluding the impact of the Linde air separation unit outage,
the on-stream factors would have been 97.8% for gasifier, 96.8% for
ammonia and 95.3% for UAN for the three months ended June 30, 2010. Excluding the impact of the
Linde air separation unit outage, the on-stream factors for the six
months ended June 30, 2010 would have
been 96.9% for gasifier, 95.5% for ammonia and 93.0% for ammonia.
Excluding the impact of the Linde air separation unit outage,
the on-stream factors would have been 99.3% for gasifier, 97.1% for
ammonia and 95.1% for UAN for the three months ended June 30, 2009. Excluding the impact of the
Linde air separation unit outage, the on-stream factors for the six
months ended June 30, 2009 would have
been 99.6% for gasifier, 98.6% for ammonia and 95.6% for UAN.
Use of Non-GAAP Financial Measures
To supplement the actual results in accordance with GAAP for the
applicable periods, the Company also uses non-GAAP measures as
discussed above, which are adjusted for GAAP-based results.
The use of non-GAAP adjustments are not in accordance with or
an alternative for GAAP. 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.
SOURCE CVR Energy, Inc.
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