Business Context and Reporting Period
This Form 8-K was filed by CVR Partners, LP on April 23, 2012, pursuant to Item 7.01 (Regulation FD Disclosure). The filing discloses an amendment to CVR Energy, Inc.'s (the sole member of the Partnership's general partner and owner of approximately 70% of the Partnership) Schedule 14D-9 regarding a tender offer by Icahn Enterprises Holdings L.P. and affiliates to purchase all outstanding shares of CVR Energy common stock at $30.00 per share in cash plus a contingent cash payment right.
Key Financial Metrics and Forecasts
The filing contains forward-looking financial forecasts prepared by CVR Energy management in February 2012 and updated in April 2012 ("April Updates"). These figures are non-GAAP, unaudited, and not prepared for public disclosure. The Partnership disclaims any obligation to update these figures.
| Forecast Metric (in millions) | 2012E | 2013E | 2014E | 2015E | 2016E |
|---|---|---|---|---|---|
| Consolidated EBITDA | $792 | $767 | $716 | $646 | $633 |
| Consolidated Adjusted EBITDA | $908 | $769 | $722 | $696 | $723 |
| Refining EBITDA | $670 | $586 | $566 | $490 | $492 |
| Refining Adjusted EBITDA | $781 | $588 | $568 | $540 | $576 |
| Refining Capital Expenditures | $181 | $134 | $125 | $124 | $84 |
| Pre-tax CVR Partners Cash Distributions | $138 | $142 | $152 | $133 | $136 |
Note: EBITDA includes unrealized hedging losses and deducts unrealized hedging gains. Adjusted EBITDA adds back turnaround expenses. The filing does not provide specific historical revenue, profit, cash flow, debt, or liquidity figures for the reporting period.
Material Changes and Unusual Items
The primary material event is the tender offer by Icahn Enterprises. The financial forecasts reflect specific adjustments made in April 2012, including:
- Estimated actual operating and financial results for the first fiscal quarter of 2012.
- Additional crude oil hedges related to future periods.
- Adjustments relating to "Wynnewood matters."
The filing explicitly states that the forecasts were not prepared in accordance with GAAP or SEC guidelines for projections and have not been examined by independent accountants.
Guidance, Outlook, and Risks
Management provided the forecasts to the CVR Energy Board of Directors to evaluate the tender offer. The Partnership emphasizes that these are forward-looking statements subject to significant uncertainty. Key risks and contingencies include:
- Subjectivity of internal financial projections and assumptions.
- Rapid changes in economic and business environments.
- Uncertainty regarding the realization of the forecasts, which may vary materially from actual results.
- The forecasts do not reflect events occurring after their preparation date.
The Partnership expressly disclaims any obligation to update or revise these forward-looking statements.
Investor Verification Checklist
- Tender Offer Status: Verify the current status of the Icahn Enterprises tender offer and the $30.00 per share price.
- Forecast Assumptions: Review the specific assumptions regarding crude oil prices and hedging strategies used in the "April Updates."
- Wynnewood Matters: Investigate the nature and financial impact of the "Wynnewood matters" referenced in the adjustments.
- GAAP Reconciliation: Note that the provided EBITDA figures are non-GAAP; verify if a reconciliation to GAAP net income is available in other filings.
- Partnership vs. Parent: Confirm that these forecasts represent CVR Energy's views and not necessarily the Partnership's official outlook.