SUGAR LAND, Texas, May 3 /PRNewswire-FirstCall/ -- CVR Energy, Inc.
(NYSE: CVI), a refiner and marketer of petroleum fuels and a
nitrogen fertilizer products manufacturer, today reported a first
quarter 2010 net loss of $12.4
million, or a loss of $0.14
per share, on net sales of $894.5
million.
(Logo:
http://www.newscom.com/cgi-bin/prnh/20071203/CVRLOGO)
In the first quarter 2009, the company reported net income of
$30.7 million, or $0.36 per share, on net sales of $609.4 million.
"During the first quarter, refiners operated in a very low
margin environment," said Chief Executive Officer Jack Lipinski. "These conditions contributed
directly to the results we announced today.
"Margins deteriorated from the beginning of the year through mid
February and then began to improve," he said, "and as the second
quarter has progressed, we have seen a continuing improvement.
"Our nitrogen fertilizer business, meanwhile, remains positive.
For the past six months we have seen steadily improving
markets, which will show up in our fertilizer revenues in future
quarters. In the first quarter, our fertilizer results were
impacted by our forward book of orders, which reflected second half
2009 pricing."
On April 6, 2010, the company
recapitalized its business by issuing $275
million aggregate principal amount of 9 percent first lien
senior secured notes due 2015 and $225
million aggregate principal amount of 10.875 percent second
lien senior secured notes due 2017. The company used the
proceeds from the issuance of the senior notes to repay the entire
outstanding balance of $453.3 million
of term loan indebtedness under its first priority credit facility
and to pay related fees and expenses of approximately $27 million. The remaining net proceeds
were used for general corporate purposes.
Petroleum Business
The petroleum business reported a first quarter 2010 operating
loss of $7.1 million on net sales of
$856.7 million, compared to operating
income for the same period in 2009 of $64.7
million on net sales of $545.3
million. The results for the first quarter of 2010
reflect a favorable impact from first-in, first-out (FIFO)
accounting practices of $15.7 million
compared with an unfavorable FIFO impact of $6.0 million in the first quarter of 2009.
First quarter 2010 throughput of crude oil and all other
feedstocks and blendstocks totaled 113,120 barrels per day (bpd),
compared to 120,667 bpd total throughput for the same period in
2009. Crude oil throughput for the first quarter 2010 averaged
105,140 bpd per day compared with 106,169 bpd for the same period
in 2009.
Refining margin per barrel was $6.10 in the first quarter 2010, a decrease from
$13.36 per barrel during the same
period in 2009. Gross profit per crude oil throughput barrel
was $0.34 in the first quarter 2010,
down from $8.06 per crude oil
throughput barrel during the same period in 2009.
Direct operating expense, exclusive of depreciation and
amortization, for the first quarter 2010 was $4.06 per barrel of crude oil throughput, as
compared to $3.62 per barrel of crude
oil throughput in 2009. This increase was primarily
attributable to higher natural gas usage and higher prices in 2010
as well as our decision to perform opportunistic maintenance equal
to approximately 11 cents per barrel
during the low margin period.
Nitrogen Fertilizers Business
The nitrogen fertilizer operations reported first quarter 2010
operating income of $3.0 million on
net sales of $38.3 million, compared
to operating income of $29.3 million
on net sales of $67.8 million during
the equivalent period in 2009.
For the first quarter 2010, average realized plant gate prices
for ammonia and UAN were $282 per ton
and $167 per ton respectively,
compared to $373 per ton and
$316 per ton respectively for the
equivalent period in 2009.
Nitrogen Fertilizers produced 105,100 tons of ammonia during the
first quarter of 2010, of which 38,200 net tons were available for
sale while the rest was upgraded to 163,800 tons of more highly
valued UAN. In the 2009 first quarter, the plant produced
108,000 tons of ammonia with 38,800 net tons available for sale and
the remainder upgraded to 169,700 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. 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, eastern Colorado, western Missouri and southwest 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:
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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,
2010 and 2009. Select balance sheet data is as of
March 31, 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.
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Three Months
Ended
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March
31,
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2010
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2009
|
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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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$
894.5
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$
609.4
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|
Cost of product sold*
|
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802.9
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|
421.6
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Direct operating expenses*
|
|
60.6
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|
56.2
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Selling, general and administrative
expenses*
|
|
21.3
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|
19.5
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Net costs associated with
flood
|
|
--
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0.2
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Depreciation and
amortization
|
|
21.3
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20.9
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Operating income
(loss)
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(11.6)
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91.0
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Interest expense and other financing
costs
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(9.9)
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(11.5)
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Gain (loss) on derivatives,
net
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1.5
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(36.9)
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Loss on extinguishment of
debt
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(0.5)
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--
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Other income, net
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0.4
|
|
0.1
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Income (loss) before income tax
expense (benefit)
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(20.1)
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42.7
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Income tax expense
(benefit)
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(7.7)
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12.0
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Net income
(loss)
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$
(12.4)
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$
30.7
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_______________
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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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$
(0.14)
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$
0.36
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Diluted earnings (loss)
per share
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$
(0.14)
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$
0.36
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Weighted average common shares
outstanding
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Basic
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86,329,237
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86,243,745
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Diluted
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86,329,237
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86,322,411
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As of March
31,
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As of December
31,
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2010
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2009
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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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$
37.5
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$
36.9
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Working capital
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219.6
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235.4
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Total assets
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1,613.0
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1,614.5
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Total debt, including current
portion
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461.4
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491.3
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Total CVR stockholders'
equity
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645.3
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653.8
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Three Months
Ended
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|
March
31,
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|
|
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2010
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2009
|
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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 operating
activities
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$
43.4
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$
36.7
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Cash flows used in investing
activities
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(11.4)
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(15.9)
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Cash flows used in financing
activities
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(31.4)
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(1.3)
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Three Months
Ended
|
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|
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March
31,
|
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|
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2010
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2009
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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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$
856.7
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$
545.3
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Cost of product sold*
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799.0
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417.6
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Direct operating expenses*
(1)
|
|
38.4
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34.6
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Net costs associated with
flood
|
|
--
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0.2
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Depreciation and
amortization
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16.1
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15.9
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Gross profit
(1)
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$
3.2
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$
77.0
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Plus direct operating
expenses*
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|
38.4
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34.6
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Plus net costs associated with
flood
|
|
--
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0.2
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Plus depreciation and
amortization
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16.1
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15.9
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Refining margin (2)
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$
57.7
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$
127.7
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FIFO impact (favorable) unfavorable
(3)
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$
(15.7)
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$
6.0
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Refining margin adjusted for FIFO
impact (4)
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$
42.0
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$
133.7
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Operating income (loss)
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|
$
(7.1)
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|
$
64.7
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|
|
|
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Petroleum Key Operating
Statistics:
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Per crude oil throughput
barrel:
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|
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Refining margin (2)
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$
6.10
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$
13.36
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FIFO impact (favorable)
unfavorable (3)
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(1.66)
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0.63
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Refining margin adjusted for
FIFO impact (4)
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4.44
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|
13.99
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Gross profit (1)
|
|
0.34
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|
8.06
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|
Direct operating expenses*
(1)
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|
4.06
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3.62
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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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|
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March
31,
|
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2010
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2009
|
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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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|
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Sweet
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84,867
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75.0%
|
|
74,958
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62.1%
|
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Light/medium sour
|
|
7,527
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6.6%
|
|
20,733
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17.2%
|
|
Heavy sour
|
|
12,746
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11.3%
|
|
10,478
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8.7%
|
|
Total crude oil
throughput
|
|
105,140
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92.9%
|
|
106,169
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|
88.0%
|
|
All other feed and
blendstocks
|
|
7,980
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7.1%
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14,498
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12.0%
|
|
Total
throughput
|
|
113,120
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100.0%
|
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120,667
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|
100.0%
|
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|
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|
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Production:
|
|
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|
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Gasoline
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59,036
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51.6%
|
|
64,327
|
|
53.3%
|
|
Distillate
|
|
45,234
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39.5%
|
|
46,184
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38.3%
|
|
Other (excluding internally
produced fuel)
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|
10,184
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8.9%
|
|
10,133
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8.4%
|
|
Total refining
production (excluding internally produced fuel)
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|
114,454
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100.0%
|
|
120,644
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|
100.0%
|
|
|
|
|
|
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|
|
Product price (dollars per
gallon):
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Gasoline
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|
$
2.04
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|
|
$
1.24
|
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|
Distillate
|
|
$
2.05
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|
|
$
1.32
|
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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
|
|
$
78.88
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|
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$
43.31
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|
Crude Oil Differentials:
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WTI less WTS (light/medium
sour)
|
|
1.89
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0.93
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WTI less WCS (heavy
sour)
|
|
10.47
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|
|
7.19
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NYMEX Crack Spreads:
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Gasoline
|
|
9.72
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|
|
9.07
|
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|
|
Heating Oil
|
|
7.24
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|
|
13.13
|
|
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NYMEX 2-1-1 Crack
Spread
|
|
8.48
|
|
|
11.10
|
|
|
|
PADD II Group 3 Basis:
|
|
|
|
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|
|
Gasoline
|
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(2.73)
|
|
|
(0.64)
|
|
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|
Ultra Low Sulfur
Diesel
|
|
(0.36)
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|
|
(1.82)
|
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PADD II Group 3 Product
Crack:
|
|
|
|
|
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Gasoline
|
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6.99
|
|
|
8.43
|
|
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|
Ultra Low Sulfur
Diesel
|
|
6.88
|
|
|
11.31
|
|
|
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PADD II Group 3 2-1-1
|
|
6.93
|
|
|
9.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
(in millions,
except as noted)
|
|
|
|
(unaudited)
|
|
Nitrogen Fertilizer Business Financial
Results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
38.3
|
|
$
67.8
|
|
|
Cost of product sold*
|
|
5.0
|
|
8.7
|
|
|
Direct operating expenses*
|
|
22.2
|
|
21.6
|
|
|
Net cost associated with
flood
|
|
--
|
|
--
|
|
|
Depreciation and
amortization
|
|
4.7
|
|
4.6
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
3.0
|
|
$
29.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nitrogen Fertilizer Key Operating
Statistics:
|
|
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|
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|
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Production (thousand tons):
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|
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Ammonia (gross produced)
(5)
|
|
105.1
|
|
108.0
|
|
|
Ammonia (net available for
sale) (5)
|
|
38.2
|
|
38.8
|
|
|
UAN
|
|
163.8
|
|
169.7
|
|
|
|
|
|
|
|
|
|
Petroleum coke consumed (thousand
tons)
|
|
117.7
|
|
125.3
|
|
|
Petroleum coke (cost per
ton)
|
|
$
14
|
|
$
35
|
|
|
|
|
|
|
|
|
|
Sales (thousand tons):
|
|
|
|
|
|
|
Ammonia
|
|
31.2
|
|
48.0
|
|
|
UAN
|
|
155.8
|
|
143.0
|
|
|
Total
sales
|
|
187.0
|
|
191.0
|
|
|
|
|
|
|
|
|
|
Product pricing (plant gate) (dollars
per ton) (6):
|
|
|
|
|
|
|
Ammonia
|
|
$
282
|
|
$
373
|
|
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UAN
|
|
$
167
|
|
$
316
|
|
|
|
|
|
|
|
|
|
On-stream factors (7):
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|
|
|
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|
|
Gasification
|
|
96.0%
|
|
100.0%
|
|
|
Ammonia
|
|
94.2%
|
|
100.0%
|
|
|
UAN
|
|
90.6%
|
|
96.0%
|
|
|
|
|
|
|
|
|
|
Reconciliation to net sales (dollars
in millions):
|
|
|
|
|
|
|
Freight in revenue
|
|
$
3.5
|
|
$
4.1
|
|
|
Hydrogen revenue
|
|
--
|
|
0.7
|
|
|
Sales net plant gate
|
|
34.8
|
|
63.0
|
|
|
Total net
sales
|
|
$
38.3
|
|
$
67.8
|
|
|
|
|
|
|
|
|
|
Market Indicators:
|
|
|
|
|
|
|
Natural gas NYMEX (dollars per
MMBtu)
|
|
$
4.99
|
|
$
4.47
|
|
|
Ammonia — Southern Plains (dollars per
ton)
|
|
$
330
|
|
$
337
|
|
|
UAN — Mid Cornbelt (dollars per
ton)
|
|
$
245
|
|
$
274
|
|
|
|
|
|
|
|
|
|
* Amounts shown are exclusive of
depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(1) 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. In order to derive the
direct operating expenses per crude oil throughput barrel, 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.
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(2) Refining margin 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.
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(3) FIFO is the Company's basis for determining
inventory value on a 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.
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(4) Refining margin 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.
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(5) 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.
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(6) 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.
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(7) On-stream factor is the total number of hours
operated divided by the total number of hours in the reporting
period.
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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.