CVR Partners Reports 2013 Fourth Quarter and Full Year Results And Announces Cash Distribution of 43 Cents

SUGAR LAND, Texas, Feb. 20, 2014 /PRNewswire/ -- CVR Partners, LP (NYSE: UAN), a manufacturer of ammonia and urea ammonium nitrate (UAN) solution fertilizer products, today announced fourth quarter 2013 net income of $27.9 million, or 38 cents per fully diluted common unit, on net sales of $84.3 million, compared to net income of $15.3 million, or 21 cents per fully diluted common unit, on net sales of $67.6 million for the fourth quarter a year earlier. Adjusted EBITDA, a non-GAAP measure, was $36.6 million for the fourth quarter of 2013, compared to adjusted EBITDA of $27.1 million for the fourth quarter of 2012.

(Logo: http://photos.prnewswire.com/prnh/20080226/CVRLOGO)

Full year 2013 net income was $118.6 million, or $1.62 per fully diluted common unit, on net sales of $323.7 million, compared to $112.2 million of net income, or $1.53 per fully diluted common unit, on net sales of $302.3 million for 2012. Adjusted EBITDA for full year 2013 was $152.8 million compared to adjusted EBITDA of $148.2 million for the previous year.

"Both the 2013 fourth quarter and full year were highlighted by record production from our expanded UAN plant, which was brought online at the end of February 2013," said Jack Lipinski, chief executive officer. "The increased production levels of higher value UAN continue to benefit our business."

Operations

For the fourth quarter of 2013, average realized plant gate prices for UAN and ammonia were $253 per ton and $478 per ton, respectively, compared to $274 per ton and $676 per ton, respectively, for the same period in 2012. For the full year 2013, average realized plant gate prices for UAN and ammonia were $282 per ton and $643 per ton, respectively, compared to $303 per ton and $613 per ton, respectively, for the full year 2012.

CVR Partners produced 98,900 tons of ammonia and purchased an additional 12,000 tons of ammonia during the fourth quarter of 2013, of which 1,600 net tons were available for sale while the rest was upgraded to a record 270,100 tons of UAN. In the 2012 fourth quarter, the plant produced 87,700 tons of ammonia, of which 35,300 net tons were available for sale while the remainder was upgraded to 127,300 tons of UAN. Fourth quarter 2012 production tons were heavily impacted by a scheduled turnaround at the company's fertilizer plant in Coffeyville, Kan.

For full year 2013, CVR Partners produced 402,000 tons of ammonia and purchased an additional 17,000 tons, of which 37,900 net tons were available for sale while the rest was upgraded to a record 930,600 tons of UAN. In 2012, the company produced 390,000 tons of ammonia, of which 124,600 net tons were available for sale while the remainder was upgraded to 643,800 tons of UAN.

On-stream factors during the 2013 fourth quarter were 100 percent for the gasifiers, 99.5 percent for the ammonia synthesis loop, and 98.8 percent for the UAN conversion facility. For full year 2013, on-stream factors were 95.6 percent for the gasifiers, 94.4 percent for the ammonia synthesis loop, and 91.9 percent for the UAN conversion facility. Excluding the impact of planned downtime associated with the replacement of damaged catalyst, unplanned Linde air separation unit outages, the UAN expansion coming online, and unplanned downtime related to weather issues, 2013 full year on-stream factors would have been 99.5 percent for the gasifiers, 98.9 percent for the ammonia synthesis loop and 98.0 percent for the UAN conversion facility.

Distributions

CVR Partners also announced today a fourth quarter 2013 distribution of 43 cents per common unit. The distribution as set by the board of CVR GP, LLC, the general partner of CVR Partners, will be paid on March 10, 2014, to unitholders of record on March 3, 2014.

CVR Partners' fourth quarter cash distribution brings the cumulative cash distributions paid or declared for the 2013 full year to a record $1.98 per common unit, which meets the company's most recent distribution outlook of $1.85 to $2.00 per common unit.

CVR Partners, LP is a variable distribution master limited partnership. As a result, its quarterly distributions, if any, will vary from quarter to quarter due to several factors, including, but not limited to, its operating performance; fluctuations in the prices received for its finished products; maintenance capital expenditures; and cash reserves deemed necessary or appropriate by the board of directors of its general partner.

CVR Partners 2013 Fourth Quarter Earnings Conference Call Information

CVR Partners previously announced that it will host its 2013 fourth quarter Earnings Conference Call for analysts and investors on Thursday, Feb. 20, at 10 a.m. Eastern.

The Earnings Conference Call will be broadcast live over the Internet at http://www.videonewswire.com/event.asp?id=97987. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8029.

For those unable to listen live, the Webcast will be archived and available for 14 days at http://www.videonewswire.com/event.asp?id=97987. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 13575649.

Forward Looking Statements

This news release contains forward-looking statements. You can generally identify forward-looking statements by our use of forward-looking terminology such as "outlook," "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 most recent Annual Report on Form 10-K, any subsequently filed quarterly reports on Form 10-Q and our 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. CVR Partners 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 3,000 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.

Use of Non-GAAP Financial Measures

To supplement our actual results calculated in accordance with GAAP for the applicable periods, the Partnership also uses the financial non-GAAP measures noted above, which are reconciled to our GAAP-based results below. These non-GAAP financial measures should not be considered as an alternative to GAAP results. 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.

EBITDA is defined as net income before (i) net interest (income) expense; (ii) income tax expense; and (iii) depreciation and amortization expense, which are items management believes affect the comparability of operating results.

Adjusted EBITDA is defined as EBITDA further adjusted for the impact of share-based compensation, non-cash and, where applicable, major scheduled turnaround expense and loss on disposition of assets. We present Adjusted EBITDA because it is a key measure used in material covenants in our credit facility and because it is the starting point for the calculation of our available cash for distribution. EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be substituted for net income or cash flows from operations. Management believes that EBITDA and Adjusted EBITDA enable investors and analysts to better understand our ability to make distributions to our common unitholders and our compliance with the covenants contained in our credit facility. EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.

A reconciliation of Net Income to EBITDA and Adjusted EBITDA is as follows:

Available cash for distribution is not a recognized term under GAAP. Available cash should not be considered in isolation or as an alternative to net income or operating income as a measure of operating performance. In addition, available cash for distribution is not presented as, and should not be considered, an alternative to cash flows from operations or as a measure of liquidity. Available cash as reported by the Partnership may not be comparable to similarly titled measures of other entities, thereby limiting its usefulness as a comparative measure.

The Partnership announced a cash distribution of 43 cents per common unit for the fourth quarter of 2013. The distribution was based on the Partnership's available cash, beginning with Adjusted EBITDA reduced for cash needed for (i) net interest expense (excluding capitalized interest) and debt service and other contractual obligations; (ii) maintenance capital expenditures; and (iii) to the extent applicable, major scheduled turnaround expense incurred and reserves for future operating or capital needs that the board of directors of the general partner deems necessary or appropriate, if any. Available cash for distribution may be increased by previously established cash reserves, if any, at the discretion of the board of directors of our general partner. 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.

SOURCE CVR Partners, LP

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