SUGAR LAND, Texas, May 9, 2011 /PRNewswire/ -- CVR Partners, LP
(NYSE: UAN), a manufacturer of ammonia and urea ammonium nitrate
(UAN) solution fertilizer products, today announced pre-initial
public offering net income of $16.7
million for the first quarter 2011 on net sales of
$57.4 million.
(Logo:
http://photos.prnewswire.com/prnh/20080226/CVRLOGO)
In the first quarter 2010, the company reported net income of
$6.0 million on net sales of
$38.3 million.
Adjusted for share-based compensation expense, CVR Partners had
adjusted net income of $21.3 million
compared to adjusted net income of $7.1
million for the same period in 2010 (see footnote 2 in
attached table). CVR Partners posted an adjusted EBITDA of
$25.9 million for 2011 compared to
$8.8 million in 2010 (see footnote 3
in attached tables).
"We are pleased to issue our first quarter results as CVR
Partners, LP," said Chief Executive Officer Jack Lipinski, "having begun trading on the New
York Stock Exchange April 8 with the
initial public offering closing on April 13."
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.
On April 13, 2011, CVR Partners
closed its initial public offering and sold an aggregate 22.1
million common units, or 30.2 percent of the limited partnership
interests, to the public at $16 per
common unit. The first distributions to holders of these
common units will be made beginning with the quarter ending
June 30, 2011, with the first
distribution scheduled to be made by Aug.
15, 2011. Although first quarter results will not be
part of these distributions, management decided to issue this first
quarter report for its interest to CVR Partners' new investors.
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 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
Located in Coffeyville, Kansas,
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
The following tables summarize the financial data and key
operating statistics for CVR Partners, LP (the "Partnership") for
the three months ended March 31, 2011
and 2010. Select balance sheet data is as of March 31, 2011 and December 31,
2010.
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(in
millions)
|
|
|
|
(unaudited)
|
|
Consolidated Statement of
Operations Data:
|
|
|
|
|
|
Net sales
|
|
$
57.4
|
|
$
38.3
|
|
Cost of product sold —
Affiliates*
|
|
1.5
|
|
1.0
|
|
Cost of product sold — Third
parties*
|
|
6.0
|
|
4.0
|
|
Direct operating expenses —
Affiliates*
|
|
0.7
|
|
0.5
|
|
Direct operating expenses —
Third parties*
|
|
22.3
|
|
21.7
|
|
Insurance recovery - business
interruption
|
|
(2.9)
|
|
—
|
|
Selling, general and
administrative expenses — Affiliates*
|
|
6.4
|
|
2.9
|
|
Selling, general and
administrative expenses — Third parties*
|
|
2.0
|
|
0.5
|
|
Depreciation and
amortization
|
|
4.6
|
|
4.7
|
|
Operating
income
|
|
$
16.8
|
|
$
3.0
|
|
Other income (expense),
net
|
|
(0.1)
|
|
3.0
|
|
Income before income tax
expense
|
|
$
16.7
|
|
$
6.0
|
|
Income tax expense
|
|
—
|
|
—
|
|
Net
income
|
|
$
16.7
|
|
$
6.0
|
|
_______________
|
|
|
|
|
|
* Amounts shown are exclusive of
depreciation and amortization.
|
|
|
|
|
|
|
|
As of March
31,
|
|
As of
December 31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(in
millions)
|
|
|
|
(unaudited)
|
|
|
|
|
Balance Sheet
Data:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
71.4
|
|
$
42.7
|
|
|
Working capital
|
53.5
|
|
27.1
|
|
|
Total assets
|
479.5
|
|
452.2
|
|
|
Partners' capital
|
423.5
|
|
402.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(in
millions)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Data:
|
|
|
|
|
|
Cash flows provided by operating
activities
|
$
32.1
|
|
$
33.2
|
|
|
Cash flows used in investing
activities
|
(1.8)
|
|
(1.2)
|
|
|
Cash flows used in financing
activities
|
(1.7)
|
|
(33.9)
|
|
|
Net cash flow
|
$
28.6
|
|
$
(1.9)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
(in
millions)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to
Adjusted Net Income
and to Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
16.7
|
|
$
6.0
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
|
4.6
|
|
1.1
|
|
|
|
Adjusted net income (2)
|
|
$
21.3
|
|
$
7.1
|
|
|
|
Major scheduled
turnaround expense
|
|
—
|
|
—
|
|
|
|
Depreciation and
amortization
|
|
4.6
|
|
4.7
|
|
|
|
Interest (income)
expense
|
|
—
|
|
(3.0)
|
|
|
|
Adjusted EBITDA (3)
|
|
$
25.9
|
|
$
8.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(unaudited)
|
|
Nitrogen Fertilizer Key
Operating Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
Production (thousand
tons):
|
|
|
|
|
|
Ammonia (gross produced)
(4)
|
|
105.3
|
|
105.1
|
|
Ammonia (net available
for sale) (4)
|
|
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) (5):
|
|
|
|
|
|
Ammonia
|
|
$
564
|
|
$
282
|
|
UAN
|
|
$
207
|
|
$
167
|
|
|
|
|
|
|
|
On-stream factors
(6):
|
|
|
|
|
|
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
|
|
_______________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) CVR Partners has been allocated non-cash share-based
compensation expense from CVR Energy, Inc., its affiliates and
former affiliates (collectively "CVR Energy"). CVR Energy
accounts for share-based compensation in accordance with Accounting
Standards Codification ("ASC") Topic 718 Compensation – Stock
Compensation ("ASC 718") as well as guidance regarding the
accounting for share-based compensation granted to employees of an
equity method investee. In accordance with ASC 718, CVR
Energy applies a fair-value based measurement method in accounting
for share-based compensation. The Partnership recognizes the
costs of the share-based compensation incurred by CVR Energy on its
behalf, primarily in selling, general and administrative expenses
(exclusive of depreciation and amortization), and a corresponding
increase or decrease to Partners' Capital, as the costs are
incurred on its behalf, following the guidance issued by the FASB
regarding the accounting for equity instruments that are issued to
other than employees for acquiring, or in conjunction with selling
goods or services, which require remeasurement at each reporting
period through the performance commitment period, or in the
Partnership's case, through the vesting period. Costs are allocated
by CVR Energy based upon the percentage of time a CVR Energy
employee provides services to CVR Partners. In accordance
with a services agreement between the entities, CVR Partners will
not be responsible for the payment of cash related to any
share-based compensation allocated to it by CVR Energy.
|
Three Months
Ended
March
31,
|
|
|
2011
|
|
2010
|
|
|
(in
millions)
|
|
|
(unaudited)
|
|
Share-based compensation
recorded in direct operating expenses:
|
|
$
0.3
|
|
|
$
0.2
|
|
|
|
|
|
|
|
|
Share-based compensation
recorded in selling, general and administrative
expenses:
|
|
4.3
|
|
|
0.9
|
|
|
|
|
|
|
Total share-based
compensation
|
|
$
4.6
|
|
|
$
1.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Adjusted net income results from adjusting net income for
items that the Partnership 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, net income was adjusted for the impact of share-based
compensation. 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.
(3) Adjusted EBITDA is defined as net income before income tax
expense, net interest (income) expense, depreciation and
amortization expense and certain other items management believes
affect the comparability of operating results. For the three
months ended March 31, 2011 and 2010, EBITDA was adjusted for
the impact of share-based compensation. 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
reviewing of our overall financial, operational and economic
performance. Management believes it is appropriate to exclude
certain items from EBITDA, such as share-based compensation and
major scheduled turnaround expenses because management believes
these items affect the comparability of operating results.
(4) 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.
(5) 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.
(6) 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 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