SUGAR LAND, Texas, May 9, 2011 /PRNewswire/ -- CVR Energy, Inc.
(NYSE: CVI), a refiner and marketer of petroleum fuels and a
majority owner of a nitrogen fertilizer products manufacturer,
today reported first quarter 2011 net income of $45.8 million, or 52
cents per fully diluted share, on net sales of $1,167.3 million.
(Logo: http://photos.prnewswire.com/prnh/20071203/CVRLOGO)
In the first quarter 2010, the company reported a net loss of
$12.4 million, or a loss of
14 cents per fully diluted share, on
net sales of $894.5 million.
The first quarter EPS was directly impacted by a $7.2 million or 8
cents per share after tax loss associated with derivative
activities in connection with the company's purchase of Canadian
crude oil. These losses were directly related the company's
start up activity on the TransCanada pipeline which began in late
2010. Such losses are not expected to occur in the future,
and the benefit of these lower cost barrels are expected to be
recognized in cost of products sold in the second
quarter.
"We are very pleased with this quarter's results, particularly
since January was impacted by an FCC outage that limited our
earnings in our petroleum segment," said Jack Lipinski, CVR Energy's chief executive
officer. "In a rising margin environment in February and
March, we generated 93 percent of our reported petroleum segment
income.
"In addition, we unlocked value at CVR Energy through the public
offering of our fertilizer business as a master limited
partnership. Common units in the partnership began trading on
the New York Stock Exchange on April
8 under the ticker UAN. CVR Energy through its
subsidiaries retains 69.8 percent of the LP units.
"Looking forward, fundamentals for both the petroleum and
fertilizer segments remain strong," he said, "and given our
midcontinent location, we are optimistic about our future
results."
Consolidated adjusted net income for the quarter in 2011 was
$49.5 million, or 56 cents per diluted share, compared to a loss of
$15.6 million or a loss of
18 cents per diluted share, for the
same quarter in 2010.
Significant adjustments to net income in the first quarter of
2011 included a $13.2 million
favorable impact from first-in, first-out (FIFO) accounting, net of
taxes, compared to a $9.4 million
favorable impact from FIFO accounting, net of taxes, in the first
quarter of 2010. Share-based compensation expense, net of
taxes, in the first quarter 2011, was $13.8
million compared to share-based compensation expense, net of
taxes, in the first quarter 2010 of $5.9
million.
Cash and cash equivalents at the end of the first quarter 2011
were $165.9 million compared to
$37.5 million of cash and cash
equivalents available at the end of the first quarter a year
earlier.
Petroleum Business
The petroleum business reported first quarter 2011 operating
income of $105.7 million, and
adjusted EBITDA of $91.7 million (see
footnote 11 on attached tables), on net sales of $1,111.3 million, compared to an operating loss
in the same quarter a year earlier of $7.1
million, and a negative adjusted EBITDA of $4.4 million, on net sales of $856.7 million. The results for the first
quarter of 2011 reflect a favorable impact from FIFO accounting
practices of $21.9 million compared
with a favorable FIFO impact of $15.7
million in the first quarter of 2010.
Reflecting the FCC outage in January, first quarter 2011
throughput of crude oil and all other feedstocks and blendstocks
totaled 105,557 barrels per day (bpd), compared to 113,120 bpd
total throughput for the same period in 2010. Crude oil throughput
for the first quarter 2011 averaged 98,684 bpd per day compared
with 105,140 bpd for the same period in 2010.
Refining margin per crude oil throughput barrel was $20.38 in the first quarter 2011, an increase
from $6.10 per crude oil throughput
barrel during the same period in 2010. Gross profit per crude
oil throughput barrel was $13.36 in
the first quarter 2011, up from 34
cents per crude oil throughput barrel during the same period
in 2010.
Direct operating expense per barrel sold, exclusive of
depreciation and amortization, for the first quarter 2011 was
$4.88, as compared to $3.63 per barrel sold in the first quarter 2010.
This increase was largely attributable to the FCC outage.
Nitrogen Fertilizers Business
The nitrogen fertilizer operations reported first quarter 2011
operating income of $16.8 million,
and adjusted EBITDA of $25.9 million,
on net sales of $57.4 million,
compared to operating income of $3.0
million, and adjusted EBITDA of $8.8
million, on net sales of $38.3
million during the equivalent period in 2010.
For the first quarter 2011, average realized plant gate prices
for ammonia and UAN were $564 per ton
and $207 per ton respectively,
compared to $282 per ton and
$167 per ton respectively for the
equivalent period in 2010.
Nitrogen Fertilizers produced 105,300 tons of ammonia during the
first quarter of 2011, of which 35,200 net tons were available for
sale while the rest was upgraded to 170,600 tons of more highly
valued UAN. In the 2010 first quarter, the plant produced
105,100 tons of ammonia with 38,200 net tons available for sale and
the remainder upgraded to 163,800 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, 2010, and
other SEC filings. 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 central Kansas, Oklahoma, western Missouri and southwest Nebraska; and an asphalt and refined fuels
storage and terminal business in Phillipsburg, Kan. In addition, CVR
Energy subsidiaries own a majority interest in and serve as the
general partner of CVR Partners, LP, a producer of ammonia and urea
ammonium nitrate, or UAN, fertilizers.
For further information, please
contact:
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Investor
Relations:
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Media Relations:
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Stirling Pack, Jr.
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Steve Eames
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CVR Energy, Inc.
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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 months ended March 31,
2011 and 2010. Select balance sheet data is as of
March 31, 2011 and December 31,
2010. 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.
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Three Months
Ended
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March
31,
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2011
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2010
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(in
millions, except share data)
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(unaudited)
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Consolidated Statement of
Operations Data:
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Net sales
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$
1,167.3
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$
894.5
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Cost of product
sold*
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936.8
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802.9
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Direct operating
expenses*
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68.3
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60.6
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Insurance recovery - business
interruption
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(2.9)
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-
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Selling, general and
administrative expenses*
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33.4
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21.3
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Net costs associated with
flood
|
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0.1
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-
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Depreciation and
amortization
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22.0
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21.3
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Operating income
(loss)
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$
109.6
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$
(11.6)
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Interest expense and other
financing costs
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(13.2)
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(9.9)
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Gain (loss) on derivatives,
net
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(22.1)
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1.5
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Loss on extinguishment of
debt
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(1.9)
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(0.5)
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Other income, net
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0.5
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0.4
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Income (loss)
before income tax expense (benefit)
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$
72.9
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$
(20.1)
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Income tax expense
(benefit)
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27.1
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(7.7)
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Net income
(loss)
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$
45.8
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$
(12.4)
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* Amounts shown are exclusive of
depreciation and amortization.
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Basic earnings
(loss) per share
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$
0.53
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$
(0.14)
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Diluted earnings
(loss) per share
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$
0.52
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$
(0.14)
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Weighted average common shares
outstanding
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Basic
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86,413,781
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86,329,237
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Diluted
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87,783,857
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86,329,237
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As of March
31,
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As of
December 31,
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2011
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2010
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(in
millions)
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(unaudited)
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Balance Sheet
Data:
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Cash and cash
equivalents
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$
165.9
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$
200.0
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Working capital
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402.2
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333.6
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Total assets
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1892.0
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1740.2
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Total debt, including current
portion
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470.6
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477.0
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Total CVR stockholders'
equity
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743.2
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689.6
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Three Months
Ended
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March
31,
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2011
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2010
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(in
millions)
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(unaudited)
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Other Financial
Data:
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Cash flows provided by (used in)
operating activities
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$
(16.0)
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$
43.4
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Cash flows used in investing
activities
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(7.1)
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(11.4)
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Cash flows used in financing
activities
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(11.1)
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(31.4)
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Net cash flow
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$
(34.2)
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$
0.6
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Three Months
Ended
March 31,
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2011
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2010
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(in millions
except per share data)
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(unaudited)
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Non-GAAP
Measures:
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Reconciliation of Net Income
(loss) to Adjusted Net Income (loss):
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Net Income (loss)
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$ 45.8
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$
(12.4)
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Adjustments:
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FIFO impact
(favorable) unfavorable, net of taxes (1)
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(13.2)
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(9.4)
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Share-based
compensation, net of taxes (2)
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13.8
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5.9
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Loss on
extinguishment of debt, net of taxes (3)
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1.2
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0.3
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Major
scheduled turnaround expense, net of taxes (4)
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1.9
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-
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Adjusted net income (loss) (5)
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$ 49.5
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$
(15.6)
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Adjusted net income
(loss) per diluted share
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$ 0.56
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$
(0.18)
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Three Months
Ended
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March
31,
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2011
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2010
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(in
millions, except operating statistics)
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(unaudited)
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Petroleum Business Financial
Results:
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Net sales
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$
1,111.3
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$
856.7
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Cost of product
sold*
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930.3
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799.0
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Direct operating
expenses* (6)(7)
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45.3
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38.4
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Net costs associated with
flood
|
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0.1
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-
|
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Depreciation and
amortization
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16.9
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16.1
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|
Gross profit
(8)
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$
118.7
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$
3.2
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Plus direct operating
expenses*
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45.3
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38.4
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Plus net costs associated with
flood
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0.1
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-
|
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Plus depreciation and
amortization
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16.9
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16.1
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Refining margin (9)
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$
181.0
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$
57.7
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FIFO impact (favorable)
unfavorable (1)
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(21.9)
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(15.7)
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Refining margin adjusted for
FIFO impact (10)
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$
159.1
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$
42.0
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Operating income
(loss)
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|
$
105.7
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$
(7.1)
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Adjusted Petroleum EBITDA
(11)
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$
91.7
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$
(4.4)
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|
|
Petroleum Key Operating
Statistics:
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Per crude oil throughput
barrel:
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Refining margin
(9)
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$
20.38
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$
6.10
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FIFO impact
(favorable) unfavorable (1)
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(2.47)
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(1.66)
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Refining margin
adjusted for FIFO impact (10)
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17.91
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4.44
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Gross profit
(8)
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13.36
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0.34
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|
Direct operating
expenses* (6)
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|
5.10
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4.06
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Direct operating expenses per
barrel sold* (7)
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4.88
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3.63
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Barrels sold (barrels per day)
(7)
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103,200
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117,556
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_______________
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* Amounts shown are
exclusive of depreciation and amortization
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Three Months
Ended
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March
31,
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|
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2011
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2010
|
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Refining Throughput and
Production Data:
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(unaudited)
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(barrels per
day)
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Throughput:
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Sweet
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79,924
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75.7%
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84,867
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75.0%
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Light/medium
sour
|
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599
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0.6%
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7,527
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6.6%
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Heavy sour
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18,161
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17.2%
|
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12,746
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11.3%
|
|
Total crude
oil throughput
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|
98,684
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93.5%
|
|
105,140
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92.9%
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|
All other feedstocks and
blendstocks
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6,873
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6.5%
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7,980
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7.1%
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|
Total
throughput
|
|
105,557
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|
100.0%
|
|
113,120
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|
100.0%
|
|
|
|
|
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|
|
|
|
|
|
Production:
|
|
|
|
|
|
|
|
|
|
Gasoline
|
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49,610
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|
46.9%
|
|
59,036
|
|
51.6%
|
|
Distillate
|
|
42,876
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|
40.6%
|
|
45,234
|
|
39.5%
|
|
Other (excluding
internally produced fuel)
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|
13,200
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|
12.5%
|
|
10,184
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|
8.9%
|
|
Total
refining production (excluding internally produced fuel)
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|
105,686
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|
100.0%
|
|
114,454
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|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
Product price (dollars per
gallon):
|
|
|
|
|
|
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|
Gasoline
|
|
$
2.65
|
|
|
|
$
2.04
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Distillate
|
|
$
2.90
|
|
|
|
$
2.05
|
|
|
|
|
|
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|
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|
|
|
|
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|
|
|
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Market Indicators (dollars per
barrel):
|
|
|
|
|
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West Texas Intermediate (WTI)
NYMEX
|
|
$
94.60
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$
78.88
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Crude Oil
Differentials:
|
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|
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WTI less WTS (light/medium
sour)
|
|
4.10
|
|
|
|
1.89
|
|
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|
WTI less WCS (heavy
sour)
|
|
21.95
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|
|
|
10.47
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|
|
NYMEX Crack Spreads:
|
|
|
|
|
|
|
|
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|
Gasoline
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|
18.03
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|
|
|
9.72
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|
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Heating Oil
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|
23.94
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|
7.24
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NYMEX 2-1-1 Crack
Spread
|
|
20.99
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|
8.48
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PADD II Group 3
Basis:
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Gasoline
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(2.05)
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(2.73)
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Ultra Low Sulfur
Diesel
|
|
1.15
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(0.36)
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PADD II Group 3 Product
Crack:
|
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Gasoline
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15.98
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|
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|
6.99
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Ultra Low Sulfur
Diesel
|
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25.10
|
|
|
|
6.88
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PADD II Group 3 2-1-1
|
|
20.54
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|
|
|
6.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(in
millions, except as noted)
|
|
|
|
(unaudited)
|
|
Nitrogen Fertilizer Business
Financial Results:
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
57.4
|
|
$
38.3
|
|
Cost of product
sold*
|
|
7.5
|
|
5.0
|
|
Direct operating
expenses*
|
|
23.0
|
|
22.2
|
|
Insurance recovery — business
interruption
|
|
(2.9)
|
|
-
|
|
Net cost associated with
flood
|
|
-
|
|
-
|
|
Depreciation and
amortization
|
|
4.6
|
|
4.7
|
|
|
|
|
|
|
|
Operating income
|
|
$
16.8
|
|
$
3.0
|
|
|
|
|
|
|
|
Adjusted Nitrogen Fertilizer
EBITDA (11)
|
|
$
25.9
|
|
$
8.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nitrogen Fertilizer Key
Operating Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
Production (thousand
tons):
|
|
|
|
|
|
Ammonia (gross produced)
(12)
|
|
105.3
|
|
105.1
|
|
Ammonia (net available
for sale) (12)
|
|
35.2
|
|
38.2
|
|
UAN
|
|
170.6
|
|
163.8
|
|
|
|
|
|
|
|
Petroleum coke consumed
(thousand tons)
|
|
124.1
|
|
117.7
|
|
Petroleum coke (cost per
ton)
|
|
$
15
|
|
$
14
|
|
|
|
|
|
|
|
Sales (thousand
tons):
|
|
|
|
|
|
Ammonia
|
|
27.3
|
|
31.2
|
|
UAN
|
|
179.3
|
|
155.8
|
|
Total
sales
|
|
206.6
|
|
187.0
|
|
|
|
|
|
|
|
Product pricing (plant gate)
(dollars per ton) (13):
|
|
|
|
|
|
Ammonia
|
|
$
564
|
|
$
282
|
|
UAN
|
|
$
207
|
|
$
167
|
|
|
|
|
|
|
|
On-stream factors
(14):
|
|
|
|
|
|
Gasification
|
|
100.0%
|
|
96.0%
|
|
Ammonia
|
|
96.7%
|
|
94.2%
|
|
UAN
|
|
93.2%
|
|
90.6%
|
|
|
|
|
|
|
|
Reconciliation to net sales
(dollars in millions):
|
|
|
|
|
|
Freight in
revenue
|
|
$
4.8
|
|
$
3.5
|
|
Hydrogen
revenue
|
|
-
|
|
-
|
|
Sales net plant
gate
|
|
52.6
|
|
34.8
|
|
Total net
sales
|
|
$
57.4
|
|
$
38.3
|
|
|
|
|
|
|
|
Market
Indicators:
|
|
|
|
|
|
Natural gas NYMEX (dollars per
MMBtu)
|
|
$
4.20
|
|
$
4.99
|
|
Ammonia — Southern Plains
(dollars per ton)
|
|
$
605
|
|
$
330
|
|
UAN — Mid Cornbelt (dollars per
ton)
|
|
$
349
|
|
$
245
|
|
_______________
|
|
|
|
|
|
* 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
March 31,
|
|
|
2011
|
|
2010
|
|
|
(in
millions)
|
|
|
|
(unaudited)
|
|
Petroleum:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIFO impact
(favorable) unfavorable
|
|
$
(21.9)
|
|
|
$
(15.7)
|
|
Income tax expense of
FIFO
|
|
8.7
|
|
|
6.3
|
|
|
|
|
|
|
FIFO impact
(favorable) unfavorable,
net of taxes
|
|
$
(13.2)
|
|
|
$
(9.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
The Company has two
classifications for share-based compensation awards. Phantom Unit
Plan awards are accounted for as liability based awards. In
accordance with Financial Accounting Standards Board ("FASB")
Accounting Standards Codification ("ASC") Topic 718,
Compensation – Stock
Compensation ("ASC 718"), the expense
associated with these awards is based on the current fair value of
the awards. These awards are remeasured at each reporting date
until the awards are settled in their entirety. Override unit
awards are accounted for as equity-classified awards using the
guidance for non-employee awards prescribed by FASB Topic ASC 323
("ASC 323"). ASC 323 includes guidance for the proper
accounting by an investor for stock-based
compensation granted to employees of an equity method investee.
In addition, guidance set forth in FASB Topic
ASC 505, provides the treatment related to accounting
for equity investments that are issued other than to employees for
acquiring, or in conjunction with selling goods or
services. In accordance with that
guidance, the expense associated with these awards is based on the
current fair value of the awards. These awards are remeasured at
each reporting date until the awards are vested (when the
performance commitment is reached). The value of all of these
awards can fluctuate significantly between periods.
Non-vested common stock awards are accounted for as
equity-classified awards using the guidance provided by ASC 718.
Non-vested common stock awards upon issuance typically vest
over a three year period. Non-vested shares, when granted,
are valued at the closing market price of CVR's common stock on the
date of issuance and amortized to compensation expense on a
straight-line basis over the vesting period of the award. The
compensation expense associated with our Phantom Unit Plan,
override units and non-vested common stock awards is recorded in
direct operating expenses, selling, general and administration
expenses and other income. Below is a breakdown of the
expense by Statement of Operations caption and by business
segment.
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2011
|
|
2010
|
|
|
(in
millions)
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Share-based compensation
recorded
in direct operating
expenses:
|
|
|
|
|
|
|
Petroleum
|
|
$
0.8
|
|
|
$
0.1
|
|
Nitrogen
|
|
0.3
|
|
|
0.2
|
|
Corporate
|
|
-
|
|
|
-
|
|
|
|
$
1.1
|
|
|
$
0.3
|
|
|
|
|
|
|
|
|
Share-based compensation
recorded
in selling, general and
administrative
expenses:
|
|
|
|
|
|
|
Petroleum
|
|
$
5.8
|
|
|
$
2.0
|
|
Nitrogen
|
|
4.3
|
|
|
0.9
|
|
Corporate
|
|
8.0
|
|
|
4.1
|
|
|
|
$
18.1
|
|
|
$
7.0
|
|
|
|
|
|
|
Share-based compensation
recorded
in other income
|
|
(0.1)
|
|
|
-
|
|
|
|
|
|
|
|
|
Total share-based
compensation
|
|
$
19.1
|
|
|
$
7.3
|
|
Income tax benefit of
share-
based
compensation
|
|
(5.3)
|
|
|
(1.4)
|
|
Share-based
compensation, net of taxes
|
|
$
13.8
|
|
|
$
5.9
|
|
|
|
|
|
|
|
(3)
|
In February 2011, the Company
entered into an asset-backed revolving credit facility ("ABL credit
facility") and concurrently terminated its first priority credit
facility. In connection with the terminated first priority
credit facility, the Company recorded a loss on extinguishment of
debt of approximately $1.9 million of previously deferred financing
costs. 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. Below is the gross and tax affected
loss on extinguishment of debt for the applicable
periods:
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
March
31,
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
(in
millions)
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Loss on extinguishment of
debt
|
|
$
1.9
|
|
$
0.5
|
|
|
Income tax benefit of loss on
extinguishment of debt
|
|
(0.7)
|
|
(0.2)
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of debt,
net of taxes
|
|
$
1.2
|
|
$
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Represents expenses associated
with a major scheduled turnaround for the refinery.
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2011
|
|
2010
|
|
|
(in
millions)
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Major schedule turnaround
expense
|
|
$
3.1
|
|
|
$
-
|
|
Income tax benefit of turnaround
expense
|
|
(1.2)
|
|
|
-
|
|
|
|
|
|
|
|
Major scheduled turnaround
expense,
net of taxes
|
|
$
1.9
|
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
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 months ended March 31, 2011 and
2010, these items included, on an after tax basis, the Company's
impact of the accounting for its inventory under FIFO, loss on
extinguishment of debt, share-based compensation and major
scheduled turnaround expenses. 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.
|
|
|
|
|
(6)
|
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.
|
|
|
|
|
(7)
|
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.
|
|
|
|
|
(8)
|
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.
|
|
|
|
|
(9)
|
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.
|
|
|
|
|
(10)
|
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.
|
|
|
|
|
(11)
|
Adjusted Petroleum and Nitrogen
Fertilizer EBITDA represents operating income adjusted for FIFO
impacts (favorable) unfavorable, share-based compensation, major
scheduled turnaround expenses, realized gain (loss) on derivatives,
net, depreciation and amortization and other income (expense).
Adjusted EBITDA by operating segment results from operating
income by segment adjusted for items that we believe are needed in
order to evaluate results in a more comparative analysis from
period to period. Adjusted EBITDA by operating segment is not
a recognized term under GAAP and should not be substituted for
operating income as a measure of performance but should be utilized
as a supplemental measure of performance in evaluating our
business. Management believes that adjusted EBITDA by
operating segment provides relevant and useful information that
enables investors to better understand and evaluate our ongoing
operating results and allows for greater transparency in the
reviewing of our overall financial, operational and economic
performance. Below is a reconciliation of operating income to
adjusted EBITDA for the petroleum and nitrogen fertilizer segments
for the three months ended March 31, 2011 and 2010:
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(in
millions)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Petroleum:
|
|
|
|
|
|
Petroleum operating income
(loss)
|
$
105.7
|
|
$
(7.1)
|
|
|
FIFO impacts
(favorable), unfavorable
|
(21.9)
|
|
(15.7)
|
|
|
Share-based
compensation
|
6.6
|
|
2.1
|
|
|
Major scheduled
turnaround expenses
|
3.1
|
|
-
|
|
|
Realized gain
(loss) on derivatives, net
|
(18.8)
|
|
0.1
|
|
|
Depreciation and
amortization
|
16.9
|
|
16.1
|
|
|
Other income
(expense)
|
0.1
|
|
0.1
|
|
|
Adjusted Petroleum
EBITDA
|
$
91.7
|
|
$
(4.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(in
millions)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Nitrogen
Fertilizer:
|
|
|
|
|
|
Nitrogen Fertilizer operating
income
|
$
16.8
|
|
$
3.0
|
|
|
Share-based
compensation
|
4.6
|
|
1.1
|
|
|
Major scheduled
turnaround expenses
|
-
|
|
-
|
|
|
Depreciation and
amortization
|
4.6
|
|
4.7
|
|
|
Other income
(expense)
|
(0.1)
|
|
-
|
|
|
Adjusted Nitrogen Fertilizer
EBITDA
|
$
25.9
|
|
$
8.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12)
|
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.
|
|
|
|
|
(13)
|
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.
|
|
|
|
|
(14)
|
On-stream factor is the total
number of hours operated divided by the total number of hours in
the reporting period.
|
|
|
|
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.