SUGAR LAND, Texas, Feb. 22, 2012 /PRNewswire/ -- CVR Partners, LP
(NYSE: UAN), a manufacturer of ammonia and urea ammonium nitrate
(UAN) solution fertilizer products, today announced fourth quarter
2011 net income of $41.2 million, or
56 cents per fully diluted common
unit, on net sales of $87.6 million,
compared to a $6.2 million net loss
on net sales of $39.4 million for the
fourth quarter a year earlier.
(Logo:
http://photos.prnewswire.com/prnh/20080226/CVRLOGO)
Adjusted EBITDA, a non-GAAP measure, was $48.4 million for the fourth quarter of 2011
compared to $7.5 million in the
fourth quarter of 2010 (see footnote 5 in accompanying tables).
Full year 2011 net income was $132.4
million, or $1.48 per fully
diluted common unit, on net sales of $302.9
million compared to $33.3
million of net income on net sales of $180.5 million for 2010.
Adjusted EBITDA for 2011 was $162.6
million compared to $52.6
million for the previous year.
"2011 was an outstanding year operationally and financially,"
said Byron Kelley, president and
chief executive officer. "The facility's production
reliability rates collectively over the full year were the highest
achieved since the plant opened more than 10 years ago, which is a
testament to the outstanding efforts of our employees.
"This high level of reliability combined with the best financial
results in the company's history places us in a solid position
moving forward," Kelley said.
Operations
For the fourth quarter 2011, average realized plant gate prices
for ammonia and UAN were $606 per ton
and $334 per ton respectively,
compared to $491 per ton and
$171 per ton respectively for the
equivalent period in 2010. For the full year 2011, average realized
plant gate prices for ammonia and UAN were $579 per ton and $284 per ton respectively, compared to
$361 per ton and $179 per ton respectively for full year 2010.
CVR Partners produced 100,800 tons of ammonia during the fourth
quarter of 2011, of which 27,500 net tons were available for sale
while the rest was upgraded to 178,300 tons of more highly valued
UAN. In the 2010 fourth quarter, the plant produced 69,900
tons of ammonia with 37,700 net tons available for sale with the
remainder upgraded to 77,800 tons of UAN.
For full year 2011, CVR Partners produced 411,200 tons of
ammonia, of which 116,800 net tons were available for sale while
the rest was upgraded to 714,100 tons of UAN. In 2010, the company
produced 392,700 tons of ammonia, of which 155,600 net tons were
available for sale while the remaining was upgraded to 578,300 tons
of UAN.
On-stream factors during the fourth quarter were 97.6 percent
for the gasifiers, 97.1 percent for the ammonia synthesis loop, and
94.1 percent for the UAN conversion facility. For full year 2011,
on-stream factors were 99.0 percent for the gasifiers, 97.7 percent
for the ammonia synthesis loop, and 95.5 percent for the UAN
conversion facility.
Distributions and Guidance
On Jan. 26, 2012, CVR Partners
announced its fourth quarter distribution based on available cash
of 58.8 cents per common unit which
was paid on Feb. 14, 2012, to
unitholders of record on Feb. 7,
2012. The company has distributed approximately $1.57 per common unit since its IPO in
March 2011. CVR Partners said it is
raising its previous distributions guidance from $1.92 per common unit to $2.00 to $2.05 per common unit for the 12 months
ending March 31, 2012.
"We are pleased to increase our guidance, which is reflective of
the outstanding performance of the last three quarters of 2011 and
our expectations for the 2012 first quarter," said Kelley.
"Although we have seen a number of market factors that have
tempered commodity pricing in relation to those late last year, in
a historical context we continue to see very good prices for the
first half of 2012.
"Combined with an ongoing focus on driving operational
reliability and prudent cost control, we anticipate 2012 will be
another good year for CVR Partners," said Kelley.
For calendar year 2012, the company's guidance range for
distributions is $1.50 to $1.75 per
common unit. Included in this guidance is an approximate
25 cent negative impact per common
unit associated with the company's biannual turnaround operation
currently scheduled for the 2012 fourth quarter. Normalized
for the turnaround, the distribution range would be approximately
$1.75 to $2.00 per common unit.
"As we look beyond 2012, the macro-fundamentals of our business
remain solid," Kelley said. "Continued population growth,
evolution to more protein-rich diets, and increased bio-fuel
consumption indicate strong fertilizer demand over the long-term.
Add to this the significant value created beginning in 2013 from
our current UAN expansion project and the other strategic
initiatives we are pursuing, we believe we are well positioned to
successfully grow our business well into the future."
This news release contains forward-looking statements. 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 Prospectus dated April 7, 2011, and filed with the SEC on
April 11, 2011, and other filings
with the SEC. 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
Partnership undertakes no duty to update its forward-looking
statements.
About CVR Partners, LP
Headquartered in Sugar Land,
Texas, with manufacturing facilities located in Coffeyville, Kan., CVR Partners, LP is a
Delaware limited partnership
focused primarily on the manufacture of nitrogen fertilizers. The
CVR Partners nitrogen fertilizer manufacturing facility is the only
operation in North America that
uses a petroleum coke gasification process to produce nitrogen
fertilizer and includes a 1,225 ton-per-day ammonia unit, a 2,025
ton-per-day urea ammonium nitrate unit, and a dual-train gasifier
complex having a capacity of 84 million standard cubic feet per day
of hydrogen.
CVR
Partners, LP
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The following tables summarize
financial data and key operating statistics for CVR Partners, LP
(the "Partnership") for the three and twelve months ended December
31, 2011 and 2010. Select balance sheet data is as of December 31,
2011 and December 31, 2010.
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Three Months
Ended
December
31,
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Twelve
Months Ended
December
31,
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2011
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2010
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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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(unaudited)
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Consolidated Statement of
Operations data:
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Net sales+
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$ 87.6
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$ 39.4
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$ 302.9
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|
$ 180.5
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Cost of product sold –
Affiliates*
|
3.7
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|
0.7
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|
11.7
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|
5.8
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Cost of product sold – Third
parties*
|
10.7
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5.9
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30.8
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28.5
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Direct operating expense –
Affiliates*
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0.1
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0.9
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1.2
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2.3
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Direct operating expense – Third
parties*
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21.0
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25.1
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85.3
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|
84.4
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Insurance recovery – business
interruption
|
—
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|
—
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|
(3.4)
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|
—
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Selling, general and
administrative expenses – Affiliates
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3.4
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9.9
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16.5
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16.7
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Selling, general and
administrative expenses – Third parties
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1.2
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2.0
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5.7
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|
3.9
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Depreciation and
amortization
|
4.9
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|
4.6
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|
18.9
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|
18.5
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Operating
income
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$ 42.6
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$ (9.7)
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$ 136.2
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$ 20.4
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Interest expense and other
financing costs
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(1.4)
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—
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(4.0)
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—
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Interest income
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—
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3.5
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—
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13.1
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Other income (expense),
net
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—
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—
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0.2
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(0.2)
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Income before income tax
expense
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$ 41.2
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$ (6.2)
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$ 132.4
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$ 33.3
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Income tax expense
|
—
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—
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—
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—
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Net
income
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$ 41.2
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|
$ (6.2)
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$ 132.4
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$ 33.3
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_______________
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*Amounts shown are exclusive of
depreciation and amortization.
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Net income subsequent to initial
public offering
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$ 41.2
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$ 108.4
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Net income per common unit –
basic**
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$ 0.56
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$ 1.48
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Net income per common unit –
diluted**
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$ 0.56
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$ 1.48
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Weighted average, number of
common
units outstanding (in
thousands):
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Basic
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73,020
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73,008
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Diluted
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73,088
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73,073
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**Reflective of net income per
common unit since closing the Partnership's initial public offering
on April 13, 2011. The Partnership has omitted net income per unit
for the periods in 2010 because the Partnership operated under a
different capital structure prior to the closing of the Offering
and, as a result, the per unit data would not be meaningful to
investors.
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+ Below are the components of
Net sales:
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Three Months
Ended
December
31,
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Twelve
Months Ended
December
31,
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2011
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2010
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2011
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2010
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(unaudited)
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Reconciliation to net sales
(dollars in millions):
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Sales net plant
gate
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$ 79.3
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$ 36.9
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$ 266.6
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$ 163.4
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Freight in
revenue
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5.9
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2.4
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22.1
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17.0
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Hydrogen
revenue
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2.4
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0.1
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14.2
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0.1
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Total net
sales
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$ 87.6
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|
$ 39.4
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$ 302.9
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$ 180.5
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As of
December 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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$ 237.0
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$ 42.7
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Working capital
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229.4
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27.1
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Total assets
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659.3
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452.2
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Total debt
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125.0
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—
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Partners' capital
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489.5
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402.2
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Three Months
Ended
December
31,
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Twelve
Months Ended
December
31,
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2011
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2010
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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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(unaudited)
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Other Financial
Data:
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Cash flows provided by operating
activities
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$ 31.9
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$ 19.3
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$ 139.8
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$ 75.9
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Cash flows used in investing
activities
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(8.6)
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(5.2)
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(16.4)
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(9.0)
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Cash flows provided by (used in)
financing activities
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(41.9)
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(0.1)
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70.8
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(29.6)
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Net cash
flow
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$ (18.6)
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$ 14.0
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$ 194.2
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$ 37.3
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Capital expenditures
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$ 8.6
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$ 6.3
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$ 19.1
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$ 10.1
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Three Months
Ended
December
31,
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Twelve
Months Ended
December
31,
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2011
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2010
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|
2011
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2010
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(unaudited)
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Key Operating
Statistics:
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Production (thousand
tons):
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Ammonia (gross produced)
(1)
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100.8
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69.9
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411.2
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392.7
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Ammonia (net available
for sale) (1)
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27.5
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37.7
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116.8
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155.6
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UAN
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178.3
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77.8
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714.1
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578.3
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Petroleum coke consumed
(thousand tons)
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126.3
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84.5
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517.3
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436.3
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Petroleum coke (cost per
ton)
|
$ 42
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$ 8
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$ 33
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$ 17
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Sales (thousand
tons):
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Ammonia
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29.3
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49.4
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112.8
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164.7
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UAN
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184.6
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73.8
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709.3
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580.7
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Total
sales
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213.9
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123.2
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822.1
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745.4
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Product pricing plant gate
(dollars per ton) (2):
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Ammonia
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$ 606
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$ 491
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$ 579
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$ 361
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UAN
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$ 334
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$ 171
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$ 284
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$ 179
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On-stream factors
(3):
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Gasification
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97.6%
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68.8%
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99.0%
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89.0%
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Ammonia
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97.1%
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67.3%
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97.7%
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87.7%
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UAN
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94.1%
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47.1%
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95.5%
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80.8%
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Market
Indicators:
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Ammonia — Southern Plains
(dollars per ton)
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$ 651
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$ 606
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$ 619
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$ 437
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UAN — Mid Cornbelt (dollars per
ton)
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$ 400
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$ 331
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$ 379
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$ 266
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|
|
|
|
|
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|
Three Months
Ended
December
31,
|
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Twelve
Months Ended
December
31,
|
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2011
|
|
2010
|
|
2011
|
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2010
|
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(in
millions)
|
|
|
(unaudited)
|
(unaudited)
|
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Non-GAAP
Measures:
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Reconciliation of Net income to
Adjusted net income and to Adjusted EBITDA:
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Net Income
|
$ 41.2
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$ (6.2)
|
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$ 132.4
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$ 33.3
|
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Adjustments:
|
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Share-based
compensation
|
0.9
|
|
7.7
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|
7.3
|
|
9.0
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|
Major
scheduled turnaround expense
|
—
|
|
3.5
|
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—
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3.5
|
|
Loss on
disposition of assets
|
—
|
|
1.4
|
|
—
|
|
1.4
|
|
Adjusted net income
(4)
|
$ 42.1
|
|
$ 6.4
|
|
$ 139.7
|
|
$ 47.2
|
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Depreciation
and amortization
|
4.9
|
|
4.6
|
|
18.9
|
|
18.5
|
|
Interest
(income) expense
|
1.4
|
|
(3.5)
|
|
4.0
|
|
(13.1)
|
|
Adjusted EBITDA
(5)
|
$ 48.4
|
|
$ 7.5
|
|
$ 162.6
|
|
$ 52.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
2011
|
|
|
(in
millions, except per unit amount)
|
|
|
(unaudited)
|
|
Reconciliation of Cash flows
from operations to Available cash for distribution
|
|
|
|
|
Cash flows from
operations
|
$ 31.9
|
|
|
|
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|
|
Adjustments:
|
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|
Plus: Deferred revenue
balance at September 30, 2011
|
20.6
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|
|
Less: Deferred revenue
balance at December 31, 2011
|
(9.0)
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Less: Maintenance capital
expenditures
|
(0.6)
|
|
|
|
|
|
|
Available cash for distribution
(6)
|
$ 42.9
|
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|
Available cash for distribution,
per unit
|
$ 0.588
|
|
|
|
|
|
|
Common units
outstanding
|
73,031
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_______________
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(1)
|
Gross tons produced for ammonia
represent total ammonia produced, including ammonia produced that
was upgraded into UAN. Net tons available for sale represent
ammonia available for sale that was not upgraded into
UAN.
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(2)
|
Plant gate sales per ton
represent net sales less freight and hydrogen revenue divided by
product sales volume in tons in the reporting period, and is shown
in order to provide a pricing measure that is comparable across the
fertilizer industry.
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(3)
|
On-stream factor is the total
number of hours operated divided by the total number of hours in
the reporting period and is included as a measure of operating
efficiency. The on-stream factors would have been 97.6% for
gasifier, 97.1% for ammonia, and 94.1% for UAN for three months
ended December 31, 2011 and 99.2% for gasifier, 98.0% for
ammonia, and 95.7% for UAN for twelve months ended December 31,
2011, as adjusted to exclude the impact of a Linde air separation
unit outage. Excluding the impact of the Linde air separation unit
outage, the rupture of a high pressure UAN vessel and the major
scheduled turnaround, the on-stream factors would have been 96.5%
for gasifier, 95.3% for ammonia, and 99.4% for UAN for three months
ended December 31, 2010 and 97.6% for gasifier, 96.8% for ammonia,
and 96.1% for UAN for twelve months ended December 31,
2010.
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(4)
|
Adjusted net income is defined
as net income adjusted for the impact of share-based compensation,
major scheduled turnaround expenses and loss on disposition of
assets which are items that management believes are needed in order
to evaluate results in a more comparative analysis from period to
period. Adjusted net income is not a recognized term under
GAAP and should not be substituted for net income 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 external users of our financial
statements, such as industry analysts, investors, lenders and
rating agencies 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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(5)
|
Adjusted EBITDA is defined as
net income before income tax expense, net interest (income)
expense, depreciation and amortization expense and the impact of
share-based compensation, major scheduled turnaround
expenses and loss on disposition of assets which
are items that management believes
affect the comparability of operating results. Adjusted
EBITDA is not a recognized term under GAAP and should not be
substituted for net 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 provides
relevant and useful information that enables external users of our
financial statements, such as industry analysts, investors, lenders
and rating agencies to better understand and evaluate our ongoing
operating results and allows for greater transparency in the review
of our overall financial, operational and economic
performance.
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(6)
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The Partnership announced a cash
distribution of 58.8 cents per common unit for the fourth quarter
of 2011. The distribution was based on the Partnership's available
cash, which is generally equal to cash flow from operations for the
quarter, less cash needed for maintenance capital expenditures,
debt service and other contractual obligations, and reserves for
future operating or capital needs that the board of directors of
the general partner deems necessary or appropriate. The Partnership
also retains cash on hand associated with prepaid sales at each
quarter end for future distributions to common unitholders based
upon the recognition into income of the prepaid sales. Actual
distributions are set by the board of directors of our general
partner. The board of directors of our general partner may modify
our cash distribution policy at any time, and our partnership
agreement does not require us to make distributions at
all.
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Available cash is not a
recognized term under GAAP. Amounts derived in the calculation are
derived from amounts separately presented in our consolidated
financial statements; with the exception of maintenance capital
expenditures. The measure most directly comparable to available
cash is operating cash flow for which we have reconciled to in this
release. Available cash should not be considered in isolation or as
an alternative to net income or operating income. Available
cash as reported by the Partnership may not be comparable to
similarly titled measures of other entities.
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Use of Non-GAAP Financial Measures
To supplement the actual results in accordance with GAAP for the
applicable periods, the Partnership 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 Partnership's financial performance
for the applicable periods and are indicators management believes
are relevant and useful for planning and forecasting future
periods.
SOURCE CVR Partners, LP