CVR Partners Reports Fourth Quarter and Full Year 2011 Results

CVR Partners, LP

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.

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2011

2010

2011

2010

(in millions)

(unaudited)

(unaudited)

Consolidated Statement of Operations data:

Net sales+

$  87.6

$  39.4

$  302.9

$  180.5

Cost of product sold – Affiliates*

3.7

0.7

11.7

5.8

Cost of product sold – Third parties*

10.7

5.9

30.8

28.5

Direct operating expense – Affiliates*

0.1

0.9

1.2

2.3

Direct operating expense – Third parties*

21.0

25.1

85.3

84.4

Insurance recovery – business interruption

—

—

(3.4)

—

Selling, general and administrative expenses – Affiliates

3.4

9.9

16.5

16.7

Selling, general and administrative expenses – Third parties

1.2

2.0

5.7

3.9

Depreciation and amortization

4.9

4.6

18.9

18.5

    Operating income

$  42.6

$  (9.7)

$  136.2

$  20.4

Interest expense and other financing costs

(1.4)

—

(4.0)

—

Interest income

—

3.5

—

13.1

Other income (expense), net

—

—

0.2

(0.2)

Income before income tax expense

$  41.2

$  (6.2)

$  132.4

$  33.3

Income tax expense

—

—

—

—

    Net income

$  41.2

$  (6.2)

$  132.4

$  33.3

_______________

*Amounts shown are exclusive of depreciation and amortization.

Net income subsequent to initial public offering

$  41.2

$  108.4

Net income per common unit – basic**

$  0.56

$  1.48

Net income per common unit – diluted**

$  0.56

$  1.48

Weighted average, number of common

  units outstanding (in thousands):

    Basic

73,020

73,008

    Diluted

73,088

73,073

**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.

+ Below are the components of Net sales:

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2011

2010

2011

2010

(unaudited)

Reconciliation to net sales (dollars in millions):

  Sales net plant gate

$  79.3

$  36.9

$  266.6

$  163.4

  Freight in revenue

5.9

2.4

22.1

17.0

  Hydrogen revenue

2.4

0.1

14.2

0.1

     Total net sales

$  87.6

$  39.4

$  302.9

$  180.5

As of December 31,

As of December 31,

2011

2010

(in millions)

(unaudited)

Balance Sheet Data:

Cash and cash equivalents

$  237.0

$  42.7

Working capital

229.4

27.1

Total assets

659.3

452.2

Total debt

125.0

—

Partners' capital

489.5

402.2

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2011

2010

2011

2010

(in millions)

(unaudited)

(unaudited)

Other Financial Data:

Cash flows provided by operating activities

$  31.9

$  19.3

$  139.8

$  75.9

Cash flows used in investing activities

(8.6)

(5.2)

(16.4)

(9.0)

Cash flows provided by (used in) financing activities

(41.9)

(0.1)

70.8

(29.6)

    Net cash flow

$  (18.6)

$  14.0

$  194.2

$  37.3

Capital expenditures

$  8.6

$  6.3

$  19.1

$  10.1

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2011

2010

2011

2010

(unaudited)

Key Operating Statistics:

Production (thousand tons):

  Ammonia (gross produced) (1)

100.8

69.9

411.2

392.7

  Ammonia (net available for sale) (1)

27.5

37.7

116.8

155.6

  UAN

178.3

77.8

714.1

578.3

Petroleum coke consumed (thousand tons)

126.3

84.5

517.3

436.3

Petroleum coke (cost per ton)

$  42

$  8

$  33

$  17

Sales (thousand tons):

  Ammonia

29.3

49.4

112.8

164.7

  UAN

184.6

73.8

709.3

580.7

     Total sales

213.9

123.2

822.1

745.4

Product pricing plant gate (dollars per ton) (2):

  Ammonia

$  606

$  491

$  579

$  361

  UAN

$  334

$  171

$  284

$  179

On-stream factors (3):

  Gasification

97.6%

68.8%

99.0%

89.0%

  Ammonia

97.1%

67.3%

97.7%

87.7%

  UAN

94.1%

47.1%

95.5%

80.8%

Market Indicators:

Ammonia — Southern Plains (dollars per ton)

$  651

$  606

$  619

$  437

UAN — Mid Cornbelt (dollars per ton)

$  400

$  331

$  379

$  266

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2011

2010

2011

2010

(in millions)

(unaudited)

(unaudited)

Non-GAAP Measures:

Reconciliation of Net income to Adjusted net income and to Adjusted EBITDA:

Net Income

$  41.2

$  (6.2)

$  132.4

$  33.3

  Adjustments:

     Share-based compensation

0.9

7.7

7.3

9.0

     Major scheduled turnaround expense

—

3.5

—

3.5

     Loss on disposition of assets

—

1.4

—

1.4

        Adjusted net income (4)

$  42.1

$  6.4

$  139.7

$  47.2

     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

Adjustments:

  Plus: Deferred revenue balance at September 30, 2011

20.6

  Less: Deferred revenue balance at December 31, 2011

(9.0)

  Less: Maintenance capital expenditures

(0.6)

Available cash for distribution (6)

$  42.9

Available cash for distribution, per unit

$  0.588

Common units outstanding

73,031

_______________

(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.

(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.

(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.

(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.

(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.

(6)

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.

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.