0000813762-13-000064.txt : 20130801 0000813762-13-000064.hdr.sgml : 20130801 20130801130543 ACCESSION NUMBER: 0000813762-13-000064 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20130801 ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20130801 DATE AS OF CHANGE: 20130801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICAHN ENTERPRISES L.P. CENTRAL INDEX KEY: 0000813762 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 133398766 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09516 FILM NUMBER: 131001935 BUSINESS ADDRESS: STREET 1: 767 FIFTH AVENUE STREET 2: SUITE 4600 CITY: NEW YORK STATE: NY ZIP: 10153 BUSINESS PHONE: 212-702-4300 MAIL ADDRESS: STREET 1: 767 FIFTH AVENUE STREET 2: SUITE 4600 CITY: NEW YORK STATE: NY ZIP: 10153 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN REAL ESTATE PARTNERS L P DATE OF NAME CHANGE: 19920703 8-K 1 q220138-kcvipressrelease.htm 8-K Q2 2013 8-K CVI Press Release
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM 8-K
 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 1, 2013


ICAHN ENTERPRISES L.P.
    (Exact Name of Registrant as Specified in Its Charter)


Delaware
1-9516
13-3398766
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)


767 Fifth Avenue, Suite 4700, New York, NY   10153
(Address of Principal Executive Offices)   (Zip Code)


(212) 702-4300
    (Registrant's Telephone Number, Including Area Code)


N/A
     (Former Name or Former Address, if Changed Since Last Report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Section 8 - Other Events

Item 8.01   Other Events.

On August 1, 2013, CVR Energy, Inc., a subsidiary of Icahn Enterprises L.P., issued a press release announcing its financial results for the second quarter of 2013. A copy of the press release is attached hereto as Exhibit 99.1.


Section 9 - Financial Statements and Exhibits

Item 9.01   Financial Statements and Exhibits.

(d) Exhibits
 
99.1 -  Press release dated August 1, 2013.
 





[Remainder of page intentionally left blank; signature page follows]




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
ICAHN ENTERPRISES L.P.
 
 
(Registrant)
 
 
 
 
 
 
By:
Icahn Enterprises G.P. Inc.,
 
 
 
its general partner
 
 
 
 
 
 
By: 
/s/ Peter Reck
 
 
 
Peter Reck
 
 
 
Chief Accounting Officer
 
 
Date:  August 1, 2013



 EX-99.1 2 ex991q22013cvipressrelease.htm EXHIBIT Ex 99.1 Q2 2013 CVI Press Release
EXHIBIT 99.1


CVR ENERGY REPORTS 2013 SECOND QUARTER RESULTS
AND ANNOUNCES CASH DIVIDEND OF 75 CENTS

•
2013 second quarter cash dividend of 75 cents per share, bringing 2013 cumulative cash dividends to $13.50 per share

•
CVR Energy petroleum subsidiary, CVR Refining, LP, announced 2013 second quarter cash distribution of $1.35 per common unit, bringing 2013 cumulative cash distributions to $2.93 per common unit

•
CVR Energy fertilizer subsidiary, CVR Partners, LP, announced 2013 second quarter cash distribution of 58.3 cents per common unit, bringing 2013 cumulative cash dividends to $1.19 per common unit

 
SUGAR LAND, Texas (Aug. 1, 2013) - CVR Energy, Inc. (NYSE: CVI) today announced second quarter 2013 net income of $183.4 million, or $2.11 per diluted share, on net sales of $2,220.3 million, compared to net income of $154.7 million, or $1.75 cents per diluted share, on net sales of $2,308.3 million for the second quarter of 2012. Operating income for the second quarter of 2013 was $262.7 million compared to $235.8 million in the second quarter of 2012.
 
For the first six months of 2013, net income was $348.4 million, or $4.01 per diluted share, on net sales of $4,572.7 million, compared to net income of $129.5 million, or $1.46 per diluted share, on net sales of $4,276.9 million for the same period in 2012. Year-to-date, operating income was $630.3 million compared to $376.3 million for the first six months of 2012.
 
The company also announced a second quarter 2013 cash dividend of 75 cents per share. The dividend, as declared by CVR Energy's Board of Directors, will be paid on Aug. 19, 2013, to stockholders of record on Aug. 12, 2013.
 
On May 24, 2013, CVR Energy declared a special dividend of $6.50 per share, which was paid on June 10, 2013, to stockholders of record on June 3, 2013.
 
On July 26, CVR Energy's petroleum subsidiary, CVR Refining, announced a 2013 second quarter cash distribution of $1.35 per common unit and CVR Partners, CVR Energy's fertilizer subsidiary, announced a 2013 second quarter cash distribution of 58.3 cents per common unit.
 
“We are pleased that CVR Energy's subsidiaries turned in strong financial performance for the second quarter of 2013, although our results were impacted by narrowing crack spreads and the higher cost of Renewable Identification Numbers, or RINs, for CVR Refining's petroleum business, as well as unscheduled downtime at CVR Partners' fertilizer plant,” said Jack Lipinski, chief executive officer. “At the same time, the Coffeyville and Wynnewood refineries had strong operational performance with record level throughput rates at Wynnewood for the quarter, and CVR Partners reported record UAN production at its fertilizer plant.
 
“CVR Energy continues to return cash to stockholders through quarterly and special dividends,” Lipinski said. “We have paid or declared cash dividends of $13.50 per share to our stockholders for the first six months of 2013.”


Petroleum Business

The petroleum business, which is operated by CVR Refining and includes the Coffeyville and Wynnewood refineries, reported second quarter 2013 operating income of $229.1 million, and adjusted EBITDA, a non-GAAP financial measure, of $250.6 million, on net sales of $2,138.1 million, compared to operating income in the same quarter a year earlier of $248.9 million, and adjusted EBITDA of $381.4 million, on net sales of $2,229.5 million.
 
Both refineries had strong operational performance in the 2013 second quarter. Throughputs of crude oil and all other feedstocks and blendstocks totaled 201,925 barrels per day (bpd) in the 2013 second quarter, which includes record throughput rates at the Wynnewood refinery. Throughputs of crude oil and all other feedstocks and blendstocks for both refineries totaled 199,501 bpd for the same period in 2012.
 


Refining margin adjusted for FIFO impact per crude oil throughput barrel, a non-GAAP financial measure, was $19.18 in the second quarter 2013 compared to $27.07 during the same period in 2012. Direct operating expenses per barrel sold, exclusive of depreciation and amortization, for the 2013 second quarter was $4.60, compared to $3.81 in the second quarter of 2012.

Coffeyville Refinery

The Coffeyville refinery reported second quarter 2013 gross profit of $163.8 million, compared to a gross profit of $165.7 million for the second quarter of 2012. Second quarter 2013 crude oil throughput totaled 117,265 bpd, compared to 121,325 bpd in the second quarter of 2012. Refining margin adjusted for FIFO impact per crude oil throughput barrel for the second quarter of 2013 was $20.30, compared to $28.02 for the same period in 2012. Direct operating expenses per barrel sold for the 2013 second quarter was $4.37, compared to direct operating expenses per barrel sold of $3.69 for the 2012 second quarter.

Wynnewood Refinery

The Wynnewood refinery had a second quarter 2013 gross profit of $85.8 million compared to a gross profit of $99.3 million for the second quarter of 2012. Second quarter of 2013 crude oil throughput totaled a record 75,936 bpd, compared to 69,046 bpd for the second quarter of 2012. Refining margin adjusted for FIFO impact per crude oil throughput barrel for the second quarter of 2013 was $17.34, compared to $25.23 for the 2012 second quarter. Direct operating expenses per barrel sold for the second quarter of 2013 was $4.97, compared to $4.02 for the 2012 second quarter.

Nitrogen Fertilizers Business

The fertilizer business operated by CVR Partners, LP reported second quarter 2013 operating income of $37.1 million, and adjusted EBITDA, a non-GAAP financial measure, of $44.1 million, on net sales of $88.8 million, compared to operating income of $36.1 million, and adjusted EBITDA of $44.1 million, on net sales of $81.4 million for the 2012 second quarter.
 
For the second quarter 2013, average realized plant gate prices for ammonia and UAN were $688 per ton and $331 per ton, respectively, compared to $568 per ton and $329 per ton, respectively, for the same period in 2012.
 
CVR Partners produced 91,300 tons of ammonia during the second quarter of 2013, of which 2,200 net tons were available for sale while the rest was upgraded to a record 225,200 tons of UAN. Additionally, as a result of lower ammonia production rates during the quarter, the company purchased approximately 4,000 tons of ammonia from third parties, which was subsequently converted into UAN. In the 2012 second quarter, the plant produced 108,900 tons of ammonia with 34,900 net tons available for sale with the remainder upgraded to 180,000 tons of UAN.
 
On-stream factors during the 2013 second quarter were 91.6 percent for the gasifier, 89.1 percent for the ammonia synthesis loop, and 86.5 percent for the UAN conversion facility. Excluding the nine days of unscheduled downtime due to external events during the 2013 second quarter, on-stream rates would have been 99.6 percent for the gasifier, 99.1 percent for the ammonia synthesis loop, and 97.1 percent for the UAN plant.

Cash and Debt

Consolidated cash and cash equivalents, which included $483.3 million for CVR Refining and $111.9 million for CVR Partners, increased to $1,134.5 million at the end of the 2013 second quarter compared to $1,040.8 million at the end of the 2013 first quarter.
 
Consolidated total debt at the end of the 2013 second quarter, which included $551.8 million for CVR Refining and $125.0 million for CVR Partners, remained flat at $676.8 million compared to $677.0 million at the end of the 2013 first quarter.

Second Quarter 2013 Earnings Conference Call Information
 
CVR Energy previously announced that it will host its second quarter 2013 Earnings Conference Call for analysts and investors on Thursday, Aug. 1, at 2 p.m. Eastern.
 


The Earnings Conference Call will be broadcast live over the Internet at http://www.videonewswire.com/event.asp?id=94592. For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8291.
 
For those unable to listen live, the Webcast will be archived and available for 14 days at http://www.videonewswire.com/event.asp?id=94592. A repeat of the conference call can be accessed by dialing (877) 660-6853, conference ID 416496.

# # #

Forward Looking Statements
 
This news release may contain 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,” “explore,” “evaluate,” “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, and any subsequently filed Quarterly Reports on Form 10-Q.  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 Energy disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
 
About CVR Energy, Inc.
 
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own a majority of the common units representing limited partner interests of CVR Refining and CVR Partners.
 
For further information, please contact:
 
Investor Relations:
 
Jay Finks
 
CVR Energy, Inc.
 
281-207-3588
 
InvestorRelations@CVREnergy.com
 
 
 
Media Relations:
 
Angie Dasbach
 
CVR Energy, Inc.
 
913-982-0482
 
MediaRelations@CVREnergy.com
 

CVR Energy, Inc.

Financial and Operational Data (all information in this release is unaudited unless noted otherwise).



 
Three Months Ended
June 30,       
 
Change from 2012
 
2013
 
2012
 
Change  
 
Percent  
 
(in millions, except per share data)
Consolidated Statement of Operations Data:
 
 
 
 
 
 
 
Net sales
$
2,220.3

 
$
2,308.3
 
 
$
(88.0
)
 
(3.8
)%
Cost of product sold
1,785.4

 
1,874.2
 
 
(88.8
)
 
(4.7
)
Direct operating expenses
108.3

 
94.1
 
 
14.2
 
 
15.1
 
Selling, general and administrative expenses
28.9

 
72.0
 
 
(43.1
)
 
(59.9
)
Depreciation and amortization
35.0

 
32.2
 
 
2.8
 
 
8.7
 
Operating income
262.7

 
235.8
 
 
26.9
 
 
11.4
 
Interest expense and other financing costs
(12.5
)
 
(19.0
)
 
6.5
 
 
(34.2
)
Interest income
0.3

 
0.2
 
 
0.1
 
 
50.0
 
Gain on derivatives, net
120.5

 
38.8
 
 
81.7
 
 
210.6
 
Other income, net
0.2

 
0.6
 
 
(0.4
)
 
(66.7
)
Income before income tax expense
371.2

 
256.4
 
 
114.8
 
 
44.8
 
Income tax expense
99.5

 
91.1
 
 
8.4
 
 
9.2
 
Net income
271.7

 
165.3
 
 
106.4
 
 
64.4
 
Net income attributable to noncontrolling interest
88.3

 
10.6
 
 
77.7
 
 
733.0
 
Net income attributable to CVR Energy stockholders
$
183.4

 
$
154.7
 
 
$
28.7
 
 
18.6
%
 
 
 
 
 
 
 
 
Basic earnings per share
$
2.11

 
$
1.78
 
 
$
0.33
 
 
18.5
%
Diluted earnings per share
$
2.11

 
$
1.75
 
 
$
0.36
 
 
20.6
%
 
 
 
 
 
 
 
 
Adjusted EBITDA*
$
221.3

 
$
407.0
 
 
$
(185.7
)
 
(45.6
)%
Adjusted net income*
$
124.5

 
$
223.1
 
 
$
(98.6
)
 
(44.2
)%
Adjusted net income, per diluted share*
$
1.43

 
$
2.52
 
 
$
(1.09
)
 
(43.3
)%
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding:
 
 
 
 
 
 
 
   Basic
86,831,050

 
86,821,224
 
 
9,826
 
 
—
%
   Diluted
86,831,050

 
88,454,006
 
 
(1,622,956
)
 
(1.8
)%




 
Six Months Ended
June 30,       
 
Change from 2012
 
2013
 
2012
 
Change  
 
Percent  
 
(in millions, except per share data)
Consolidated Statement of Operations Data:
 
 
 
 
 
 
 
Net sales
$
4,572.7

 
$
4,276.9
 
 
$
295.8
 
 
6.9
%
Cost of product sold
3,599.0

 
3,509.4
 
 
89.6
 
 
2.6
 
Direct operating expenses
216.8

 
209.6
 
 
7.2
 
 
3.4
 
Selling, general and administrative expenses
57.4

 
117.3
 
 
(59.9
)
 
(51.1
)
Depreciation and amortization
69.2

 
64.3
 
 
4.9
 
 
7.6
 
Operating income
630.3

 
376.3
 
 
254.0
 
 
67.5
 
Interest expense and other financing costs
(27.9
)
 
(38.2
)
 
10.3
 
 
(27.0
)
Interest income
0.6

 
0.2
 
 
0.4
 
 
200.0
 
Gain (loss) on derivatives, net
100.5

 
(108.5
)
 
209.0
 
 
(192.6
)
Loss on extinguishment of debt
(26.1
)
 
—
 
 
(26.1
)
 
—
 
Other income, net
0.3

 
0.9
 
 
(0.6
)
 
(66.7
)
Income before income tax expense
677.7

 
230.7
 
 
447.0
 
 
193.8
 
Income tax expense
193.3

 
81.4
 
 
111.9
 
 
137.5
 
Net income
484.4

 
149.3
 
 
335.1
 
 
224.4
 
Net income attributable to noncontrolling interest
136.0

 
19.8
 
 
116.2
 
 
586.9
 
Net income attributable to CVR Energy stockholders
$
348.4

 
$
129.5
 
 
$
218.9
 
 
169.0
%
 
 
 
 
 
 
 
 
Basic earnings per share
$
4.01

 
$
1.49
 
 
$
2.52
 
 
169.1
%
Diluted earnings per share
$
4.01

 
$
1.46
 
 
$
2.55
 
 
174.7
%
 
 
 
 
 
 
 
 
Adjusted EBITDA*
$
507.3

 
$
582.1
 
 
$
(74.8
)
 
(12.9
)%
Adjusted net income*
$
281.0

 
$
295.7
 
 
$
(14.7
)
 
(5.0
)%
Adjusted net income, per diluted share*
$
3.24

 
$
3.34
 
 
$
(0.10
)
 
(3.0
)%
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding:
 
 
 
 
 
 
 
   Basic
86,831,050

 
86,814,687
 
 
16,363
 
 
—
%
   Diluted
86,831,050

 
88,464,347
 
 
(1,633,297
)
 
(1.8
)%


 
June 30, 2013
 
December 31,
2012
 
(in millions)
Balance Sheet Data:
 
 
 
Cash and cash equivalents
$
1,134.5
 
 
$
896.0
 
Working capital
1,461.8
 
 
1,135.4
 
Total assets
4,023.4
 
 
3,610.9
 
Total debt, including current portion
676.8
 
 
898.2
 
Total CVR stockholders' equity
1,299.0
 
 
1,525.1
 



 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions)
Cash Flow Data:
 
 
 
 
 
 
 
Net cash flow provided by (used in):
 
 
 
 
 
 
 
Operating activities
$
84.1

 
$
249.6

 
$
362.4

 
$
435.9

Investing activities
(50.8
)
 
(45.4
)
 
(114.5
)
 
(104.8
)
Financing activities
60.4

 
(12.4
)
 
(9.4
)
 
(26.8
)
Net cash flow
$
93.7

 
$
191.8

 
$
238.5

 
$
304.3


Segment Information

Our operations are organized into two reportable segments, Petroleum and Nitrogen Fertilizer. Our operations that are not included in the Petroleum and Nitrogen Fertilizer segments are included in Corporate and Other segment (along with elimination of intersegment transactions). The Petroleum segment includes the operations of our Coffeyville, Kansas and Wynnewood, Oklahoma refineries along with our crude oil gathering and pipeline systems. Effective with its initial public offering on January 23, 2013, our Petroleum segment is operated by CVR Refining, LP (“CVR Refining”), in which we own a majority interest as well as the general partner.  Detailed operating results for the Petroleum segment for the quarter ended June 30, 2013 are included in CVR Refining's press release dated August 1, 2013.  The Nitrogen Fertilizer segment is operated by CVR Partners, LP, (“CVR Partners”) in which we own a majority interest as well as the general partner. It consists of a nitrogen fertilizer manufacturing facility that utilizes a pet coke gasification process in producing nitrogen fertilizer.  Detailed operating results for the Nitrogen Fertilizer segment for the quarter ended June 30, 2013 are included in CVR Partners' press release dated August 1, 2013.
 
The Petroleum Segment, as reported herein for the three and six months ended June 30, 2012, is not reflective of the full and actual financial statements of CVR Refining as certain allocations that were charged to CVR Refining were not made at the Petroleum segment.  Beginning in 2013, the financial statements of the Petroleum segment are the same as CVR Refining's financial statements.


 
Petroleum
(CVR Refining)
 
Nitrogen Fertilizer
(CVR Partners)
 

Corporate
and Other
 
Consolidated
 
(in millions)
Three months ended June 30, 2013
 
 
 
 
 
 
 
Net sales
$
2,138.1

 
$
88.8

 
$
(6.6
)
 
$
2,220.3

Cost of product sold
1,776.6

 
15.6

 
(6.8
)
 
1,785.4

Direct operating expenses (1)
83.8

 
24.4

 
0.1

 
108.3

Major scheduled turnaround expense
—

 
—

 
—

 
—

Selling, general & administrative
20.2

 
5.5

 
3.2

 
28.9

Depreciation and amortization
28.4

 
6.2

 
0.4

 
35.0

Operating income (loss)
$
229.1

 
$
37.1

 
$
(3.5
)
 
$
262.7

 
 
 
 
 
 
 
 
Capital expenditures
$
35.5

 
$
13.8

 
$
1.6

 
$
50.9

 
 
 
 
 
 
 
 
Six months ended June 30, 2013
 
 
 
 
 
 
 
Net sales
$
4,412.1

 
$
170.2

 
$
(9.6
)
 
$
4,572.7

Cost of product sold
3,582.3

 
26.2

 
(9.5
)
 
3,599.0

Direct operating expenses (1)
169.9

 
47.0

 
(0.1
)
 
216.8

Major scheduled turnaround expense
—

 
—

 
—

 
—

Selling, general & administrative
38.8

 
11.1

 
7.5

 
57.4

Depreciation and amortization
56.4

 
12.0

 
0.8

 
69.2

Operating income (loss)
$
564.7

 
$
73.9

 
$
(8.3
)
 
$
630.3

 
 
 
 
 
 
 
 
Capital expenditures
$
80.1

 
$
31.9

 
$
2.6

 
$
114.6



 
Petroleum
 
Nitrogen Fertilizer
(CVR Partners)
 

Corporate
and Other
 
Consolidated
 
(in millions)
Three months ended June 30, 2012
 
 
 
 
 
 
 
Net sales
$
2,229.5

 
$
81.4

 
$
(2.6
)
 
$
2,308.3

Cost of product sold
1,866.1

 
10.7

 
(2.6
)
 
1,874.2

Direct operating expenses (1)
69.1

 
22.4

 
0.1

 
91.6

Major scheduled turnaround expense
2.5

 
—

 
—

 
2.5

Selling, general & administrative
16.3

 
7.0

 
48.7

 
72.0

Depreciation and amortization
26.6

 
5.2

 
0.4

 
32.2

Operating income (loss)
$
248.9

 
$
36.1

 
$
(49.2
)
 
$
235.8

 
 
 
 
 
 
 
 
Capital expenditures
$
27.0

 
$
16.9

 
$
1.7

 
$
45.6

 
 
 
 
 
 
 
 
Six months ended June 30, 2012
 
 
 
 
 
 
 
Net sales
$
4,128.0

 
$
159.7

 
$
(10.8
)
 
$
4,276.9

Cost of product sold
3,496.8

 
23.3

 
(10.7
)
 
3,509.4

Direct operating expenses (1)
140.8

 
45.3

 
—

 
186.1

Major scheduled turnaround expense
23.5

 
—

 
—

 
23.5

Selling, general & administrative
30.2

 
13.0

 
74.1

 
117.3

Depreciation and amortization
52.9

 
10.6

 
0.8

 
64.3

Operating income (loss)
$
383.8

 
$
67.5

 
$
(75.0
)
 
$
376.3

 
 
 
 
 
 
 
 
Capital expenditures
$
62.4

 
$
39.2

 
$
3.6

 
$
105.2

____________________

(1)
Excluding turnaround expenses.
 
Petroleum
(CVR Refining)
 
Nitrogen Fertilizer
(CVR Partners)
 

Corporate
and Other
 
Consolidated
 
(in millions)
June 30, 2013
 
 
 
 
 
 
 
Cash and cash equivalents
$
483.3

 
$
111.9

 
$
539.3

 
$
1,134.5

Total assets
2,800.2

 
619.2

 
604.0

 
4,023.4

Long-term debt, including current portion
551.8

 
125.0

 
—

 
676.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
Cash and cash equivalents
$
153.1

 
$
127.8

 
$
615.1

 
$
896.0

Total assets
2,258.5

 
623.0

 
729.4

 
3,610.9

Long-term debt, including current portion
773.2

 
125.0

 
—

 
898.2


Petroleum Segment Operating Data

The following tables set forth information about our consolidated Petroleum segment operations and our Coffeyville and Wynnewood refineries. Reconciliations of certain non-GAAP financial measures are provided under “Use of Non-GAAP Financial Measures” below.  Additional discussion of operating results for the Petroleum segment for the quarter ended June 30, 2013 are included in CVR Refining's press release dated August 1, 2013.




 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions, except operating statistics)
Petroleum Segment Summary Financial Results:
 
 
 
 
 
 
 
Net sales
$
2,138.1

 
$
2,229.5

 
$
4,412.1

 
$
4,128.0

Cost of product sold
1,776.6

 
1,866.1

 
3,582.3

 
3,496.8

Refining margin*
361.5

 
363.4

 
829.8

 
631.2

Direct operating expenses
83.8

 
69.1

 
169.9

 
140.8

Major scheduled turnaround expense
—

 
2.5

 
—

 
23.5

Depreciation and amortization
28.4

 
26.6

 
56.4

 
52.9

Gross profit*
249.3

 
265.2

 
603.5

 
414.0

Selling, general and administrative expenses
20.2

 
16.3

 
38.8

 
30.2

Operating income
$
229.1

 
$
248.9

 
$
564.7

 
$
383.8

 
 
 
 
 
 
 
 
Refining margin adjusted for FIFO impact*
$
337.3

 
$
468.8

 
$
800.8

 
$
726.2

 
 
 
 
 
 
 
 
Adjusted Petroleum EBITDA*
$
250.6

 
$
381.4

 
$
560.5

 
$
535.2

 
 
 
 
 
 
 
 
Petroleum Segment Key Operating Statistics:
 
 
 
 
 
 
 
Per crude oil throughput barrel:
 
 
 
 
 
 
 
Refining margin*
$
20.56

 
$
20.98

 
$
23.63

 
$
20.58

FIFO impact (favorable) unfavorable
(1.38
)
 
6.09

 
(0.83
)
 
3.10

Refining margin adjusted for FIFO impact*
19.18

 
27.07

 
22.80

 
23.68

Gross profit*
14.18

 
15.31

 
17.19

 
13.50

Direct operating expenses and major scheduled turnaround expenses
4.77

 
4.13

 
4.84

 
5.36

Direct operating expenses and major scheduled turnaround expenses per barrel sold
$
4.60

 
$
3.81

 
$
4.62

 
$
4.75

Barrels sold (barrels per day)
200,314

 
206,606

 
203,079

 
181,589





 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
Petroleum Segment Summary Refining Throughput and Production Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(barrels per day)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Throughput:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sweet
153,944

 
76.2
%
 
148,912

 
74.6
%
 
155,304

 
76.4
%
 
129,781

 
73.1
%
    Medium
18,089

 
9.0
%
 
20,488

 
10.3
%
 
16,455

 
8.1
%
 
22,728

 
12.8
%
Heavy sour
21,168

 
10.5
%
 
20,972

 
10.5
%
 
22,244

 
10.9
%
 
16,006

 
9.0
%
Total crude oil throughput
193,201

 
95.7
%
 
190,372

 
95.4
%
 
194,003

 
95.4
%
 
168,515

 
94.9
%
All other feedstocks and blendstocks
8,724

 
4.3
%
 
9,129

 
4.6
%
 
9,248

 
4.6
%
 
8,929

 
5.1
%
Total throughput
201,925

 
100.0
%
 
199,501

 
100.0
%
 
203,251

 
100.0
%
 
177,444

 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Production:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gasoline
95,253

 
47.1
%
 
96,972

 
48.7
%
 
96,710

 
47.4
%
 
89,131

 
50.4
%
Distillate
84,617

 
41.8
%
 
82,075

 
41.3
%
 
84,232

 
41.3
%
 
72,202

 
40.9
%
Other (excluding internally produced fuel)
22,546

 
11.1
%
 
19,910

 
10.0
%
 
23,043

 
11.3
%
 
15,396

 
8.7
%
Total refining production (excluding internally produced fuel)
202,416

 
100.0
%
 
198,957

 
100.0
%
 
203,985

 
100.0
%
 
176,729

 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Product price (dollars per gallon):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gasoline
$
2.88

 
 
 
$
2.89

 
 
 
$
2.85

 
 
 
$
2.88

 
 
Distillate
2.95

 
 
 
2.95

 
 
 
3.03

 
 
 
3.03

 
 

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
Market Indicators (dollars per barrel):
 
 
 
 
 
 
 
West Texas Intermediate (WTI) NYMEX
$
94.17

 
$
93.35

 
$
94.26

 
$
98.15

Crude Oil Differentials:
 
 
 
 
 
 
 
WTI less WTS (light/medium sour)
0.06

 
5.28

 
3.09

 
4.48

WTI less WCS (heavy sour)
16.79

 
20.45

 
21.94

 
23.79

NYMEX Crack Spreads:
 
 
 
 
 
 
 
Gasoline
24.72

 
30.42

 
27.87

 
27.95

Heating Oil
27.19

 
28.13

 
30.21

 
28.87

NYMEX 2-1-1 Crack Spread
25.95

 
29.27

 
29.04

 
28.41

PADD II Group 3 Basis:
 
 
 
 
 
 
 
Gasoline
1.52

 
(3.24
)
 
(2.88
)
 
(5.00
)
Ultra Low Sulfur Diesel
2.13

 
2.16

 
2.11

 
0.28

PADD II Group 3 Product Crack:
 
 
 
 
 
 
 
Gasoline
26.23

 
27.18

 
24.99

 
22.95

Ultra Low Sulfur Diesel
29.33

 
30.29

 
32.32

 
29.14

PADD II Group 3 2-1-1
27.78

 
28.74

 
28.66

 
26.05



 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions, except operating statistics)
Coffeyville Refinery Financial Results:
 
 
 
 
 
 
 
Net sales
$
1,349.2

 
$
1,447.0

 
$
2,841.7

 
$
2,579.5

Cost of product sold
1,117.6

 
1,219.4

 
2,312.6

 
2,192.5

Refining margin*
231.6

 
227.6

 
529.1

 
387.0

Direct operating expenses
50.1

 
43.6

 
102.3

 
87.4

Major scheduled turnaround expense
—

 
0.9

 
—

 
21.0

Depreciation and amortization
17.7

 
17.4

 
35.2

 
34.7

Gross profit*
$
163.8

 
$
165.7

 
$
391.6

 
$
243.9

 
 
 
 
 
 
 
 
Refining margin adjusted for FIFO impact*
$
216.6

 
$
309.4

 
$
507.2

 
$
455.8

 
 
 
 
 
 
 
 
Coffeyville Refinery Key Operating Statistics:
 
 
 
 
 
 
 
Per crude oil throughput barrel:
 
 
 
 
 
 
 
Refining margin*
$
21.71

 
$
20.61

 
$
24.27

 
$
20.27

FIFO impact (favorable) unfavorable
(1.41
)
 
7.41

 
(1.00
)
 
3.61

Refining margin adjusted for FIFO impact*
20.30

 
28.02

 
23.27

 
23.88

Gross profit*
15.35

 
15.00

 
17.97

 
12.78

Direct operating expenses and major scheduled turnaround expenses
4.69

 
4.03

 
4.69

 
5.68

Direct operating expenses and major scheduled turnaround expenses per barrel sold
$
4.37

 
$
3.69

 
$
4.35

 
$
5.41

Barrels sold (barrels per day)
125,851

 
132,534

 
129,777

 
110,034

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
Coffeyville Refinery Throughput and Production Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(barrels per day)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Throughput:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sweet
95,763

 
77.1
%
 
100,166

 
78.4
%
 
97,767

 
76.6
%
 
86,041

 
77.7
%
    Medium
334

 
0.3
%
 
187

 
0.1
%
 
423

 
0.3
%
 
2,817

 
2.5
%
Heavy sour
21,168

 
17.0
%
 
20,972

 
16.4
%
 
22,244

 
17.4
%
 
16,006

 
14.4
%
Total crude oil throughput
117,265

 
94.4
%
 
121,325

 
94.9
%
 
120,434

 
94.3
%
 
104,864

 
94.6
%
All other feedstocks and blendstocks
6,962

 
5.6
%
 
6,500

 
5.1
%
 
7,265

 
5.7
%
 
5,934

 
5.4
%
Total throughput
124,227

 
100.0
%
 
127,825

 
100.0
%
 
127,699

 
100.0
%
 
110,798

 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Production:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gasoline
59,908

 
47.3
%
 
62,351

 
47.9
%
 
61,154

 
47.0
%
 
56,310

 
50.1
%
Distillate
53,471

 
42.2
%
 
54,933

 
42.3
%
 
54,531

 
41.9
%
 
48,004

 
42.7
%
Other (excluding internally produced fuel)
13,272

 
10.5
%
 
12,753

 
9.8
%
 
14,488

 
11.1
%
 
8,123

 
7.2
%
Total refining production (excluding internally produced fuel)
126,651

 
100.0
%
 
130,037

 
100.0
%
 
130,173

 
100.0
%
 
112,437

 
100.0
%





 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions, except operating statistics)
Wynnewood Refinery Financial Results:
 
 
 
 
 
 
 
Net sales
$
787.8

 
$
782.3

 
$
1,568.2

 
$
1,548.2

Cost of product sold
658.8

 
647.5

 
1,269.2

 
1,305.4

Refining margin*
129.0

 
134.8

 
299.0

 
242.8

Direct operating expenses
33.7

 
25.5

 
67.6

 
53.4

Major scheduled turnaround expense
—

 
1.6

 
—

 
2.5

Depreciation and amortization
9.5

 
8.4

 
18.8

 
16.7

Gross profit*
$
85.8

 
$
99.3

 
$
212.6

 
$
170.2

 
 
 
 
 
 
 
 
Refining margin adjusted for FIFO impact*
$
119.8

 
$
158.5

 
$
292.0

 
$
269.0

 
 
 
 
 
 
 
 
Wynnewood Refinery Key Operating Statistics:
 
 
 
 
 
 
 
Per crude oil throughput barrel:
 
 
 
 
 
 
 
Refining margin*
$
18.67

 
$
21.47

 
$
22.46

 
$
20.97

FIFO impact (favorable) unfavorable
(1.33
)
 
3.76

 
(0.53
)
 
2.25

Refining margin adjusted for FIFO impact*
17.34

 
25.23

 
21.93

 
23.22

Gross profit*
12.41

 
15.82

 
15.97

 
14.70

Direct operating expenses and major scheduled turnaround expenses
4.88

 
4.30

 
5.08

 
4.83

Direct operating expenses and major scheduled turnaround expenses per barrel sold
$
4.97

 
$
4.02

 
$
5.09

 
$
4.29

Barrels sold (barrels per day)
74,463

 
74,072

 
73,302

 
71,556


 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
Wynnewood Refinery Throughput and Production Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(barrels per day)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Throughput:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sweet
58,181

 
74.8
%
 
48,745

 
68.0
%
 
57,537

 
76.2
%
 
43,740

 
65.6
%
    Medium
17,755

 
22.9
%
 
20,301

 
28.3
%
 
16,032

 
21.2
%
 
19,911

 
29.9
%
Heavy sour
—

 
—
%
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
Total crude oil throughput
75,936

 
97.7
%
 
69,046

 
96.3
%
 
73,569

 
97.4
%
 
63,651

 
95.5
%
All other feedstocks and blendstocks
1,762

 
2.3
%
 
2,629

 
3.7
%
 
1,983

 
2.6
%
 
2,995

 
4.5
%
Total throughput
77,698

 
100.0
%
 
71,675

 
100.0
%
 
75,552

 
100.0
%
 
66,646

 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Production:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gasoline
35,345

 
46.7
%
 
34,621

 
5.2
%
 
35,556

 
48.2
%
 
32,821

 
51.0
%
Distillate
31,146

 
41.1
%
 
27,142

 
39.4
%
 
29,701

 
40.2
%
 
24,198

 
37.6
%
Other (excluding internally produced fuel)
9,274

 
12.2
%
 
7,157

 
10.4
%
 
8,555

 
11.6
%
 
7,273

 
11.4
%
Total refining production (excluding internally produced fuel)
75,765

 
100.0
%
 
68,920

 
100.0
%
 
73,812

 
100.0
%
 
64,292

 
100.0
%


Nitrogen Fertilizer Segment Operating Data

The following tables set forth information about the Nitrogen Fertilizer segment operated by CVR Partners, of which we own a majority interest and serve as general partner. Reconciliations of certain non-GAAP financial measures are provided under “Use of Non-GAAP Financial Measures” below. Additional discussion of operating results for the Nitrogen Fertilizer segment for the quarter ended June 30, 2013 are included in CVR Partners' press release dated August 1, 2013.
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions, except as noted)
Nitrogen Fertilizer Segment Financial Results:
 
 
 
 
 
 
 
Net sales
$
88.8

 
$
81.4

 
$
170.2

 
$
159.7

Cost of product sold
15.6

 
10.7

 
26.2

 
23.3

Direct operating expenses
24.4

 
22.4

 
47.0

 
45.3

Major scheduled turnaround expense
—

 
—

 
—

 
—

Selling, general and administrative expenses
5.5

 
7.0

 
11.1

 
13.0

Depreciation and amortization
6.2

 
5.2

 
12.0

 
10.6

 
 
 
 
 
 
 
 
Operating income
$
37.1

 
$
36.1

 
$
73.9

 
$
67.5

 
 
 
 
 
 
 
 
Adjusted Nitrogen Fertilizer EBITDA*
$
44.1

 
$
44.1

 
$
87.9

 
$
82.1

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions, except as noted)
Nitrogen Fertilizer Segment Key Operating Statistics:
 
 
 
 
 
 
 
Production (thousand tons):
 
 
 
 
 
 
 
Ammonia (gross produced) (1)
91.3

 
108.9

 
202.7

 
198.2

Ammonia (net available for sale) (1)(2)
2.2

 
34.9

 
32.9

 
59.9

UAN
225.2

 
180.0

 
421.3

 
334.6

 
 
 
 
 
 
 
 
Petroleum coke consumed (thousand tons)
114.4

 
130.2

 
244.2

 
250.7

Petroleum coke (cost per ton)
$
29

 
$
31

 
$
30

 
$
36

 
 
 
 
 
 
 
 
Sales (thousand tons):
 
 
 
 
 
 
 
Ammonia
7.1

 
29.4

 
34.6

 
59.3

UAN
217.3

 
177.2

 
411.4

 
335.5

 
 
 
 
 
 
 
 
Product pricing (plant gate) (dollars per ton) (3):
 
 
 
 
 
 
 
Ammonia
$
688

 
$
568

 
$
668

 
$
591

UAN
$
331

 
$
329

 
$
314

 
$
322

 
 
 
 
 
 
 
 
On-stream factors (4):
 
 
 
 
 
 
 
Gasification
91.6
%
 
99.2
%
 
95.5
%
 
96.2
%
Ammonia
89.1
%
 
98.0
%
 
93.9
%
 
94.7
%
UAN
86.5
%
 
96.7
%
 
89.7
%
 
90.1
%
 
 
 
 
 
 
 
 
Market Indicators:
 
 
 
 
 
 
 
Ammonia - Southern Plains (dollars per ton)
$
653

 
$
585

 
$
674

 
$
585

UAN - Mid Corn belt (dollars per ton)
$
381

 
$
417

 
$
380

 
$
380



Cost of product sold, direct operating expenses and selling, general and administrative expenses are all reflected exclusive of depreciation and amortization.

* See Use of Non-GAAP Financial Measures below.

(1)     Gross tons produced for ammonia represent the total ammonia produced, including ammonia produced that was upgraded into UAN. As a result of the recently completed UAN expansion project, we expect to upgrade substantially all of the ammonia we produce into UAN. The net tons available for sale represent the ammonia available for sale that was not upgraded into UAN.
 
(2)          In addition to the produced ammonia, the Nitrogen Fertilizer segment acquired approximately 4,000 tons of ammonia, which was upgraded to UAN during the three and six months ended June 30, 2013.
 
(3)          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.
 
(4)          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. Excluding the impact of the unplanned Linde air separation unit outages and the unplanned downtime associated with weather issues, the on-stream factors for the three months ended June 30, 2013 would have been 99.6% for gasifier, 99.1% for ammonia and 97.1% for UAN.
 
Excluding the impact of the UAN expansion coming on-line, the unplanned Linde air separation unit outages and the unplanned downtime associated with weather issues, the on-stream factors for the six months ended June 30, 2013 would have been 99.6% for gasifier, 98.9% for ammonia and 97.7% for UAN.

Use of Non-GAAP Financial Measures
 
To supplement the actual results in accordance with GAAP for the applicable periods, the Company also uses non-GAAP measures as discussed below, which are reconciled to our GAAP-based results below. These non-GAAP financial measures should not be considered an alternative for GAAP results. The adjustments are provided to enhance an overall understanding of the Company's financial performance for the applicable periods and are indicators management believes are relevant and useful for planning and forecasting future periods.
 
Adjusted net income is not a recognized term under GAAP and should not be substituted for net income (loss) 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.




 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions, except per share data)
Reconciliation of Net Income to Adjusted Net Income:
 
 
 
 
 
 
 
Income before income tax expense
$
371.2

 
$
256.4

 
$
677.7

 
$
230.7

Adjustments:
 
 
 
 
 
 
 
FIFO impact (favorable) unfavorable
(24.2
)
 
105.4

 
(29.0
)
 
95.0

Share-based compensation
4.3

 
17.8

 
10.3

 
21.9

Loss on extinguishment of debt
—

 
—

 
26.1

 
—

Major scheduled turnaround expense
—

 
2.5

 
—

 
23.5

Loss on disposition of fixed assets
—

 
—

 
—

 
—

(Gain) loss on derivatives, net
(120.5
)
 
(38.8
)
 
(100.5
)
 
108.5

Current period settlements on derivative contracts
14.7

 
(8.1
)
 
(37.8
)
 
(27.2
)
Expenses associated with proxy matters
—

 
29.4

 
—

 
44.2

Expenses associated with the acquisition of Gary-Williams (1)
—

 
4.6

 
—

 
8.3

Adjusted income before income tax expense (benefit) and noncontrolling interest
245.5

 
369.2

 
546.8

 
504.9

Adjusted net income attributable to noncontrolling interest
(59.5
)
 
(11.4
)
 
(116.1
)
 
(21.2
)
Income tax expense, as adjusted
(61.5
)
 
(134.7
)
 
(149.7
)
 
(188.0
)
Adjusted net income attributable to CVR Energy stockholders
$
124.5

 
$
223.1

 
$
281.0

 
$
295.7

 
 
 
 
 
 
 
 
Adjusted net income per diluted share
$
1.43

 
$
2.52

 
$
3.24

 
$
3.34

_______________

(1)    Legal, professional and integration expenses related to the December 2011 acquisition of Gary-Williams.

Refining margin per crude oil throughput barrel is a measurement calculated as the difference between net sales and cost of product sold (exclusive of depreciation and amortization). Refining margin is a non-GAAP measure that we believe is important to investors in evaluating our refineries' performance as a general indication of the amount above our cost of product sold that we are able to sell refined products. Each of the components used in this calculation (net sales and cost of product sold exclusive of depreciation and amortization) can be taken directly from our Statement of Operations. Our calculation of refining margin may differ from similar calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure. In order to derive the refining margin per crude oil throughput barrel, we utilize the total dollar figures for refining margin as derived above and divide by the applicable number of crude oil throughput barrels for the period. We believe that refining margin is important to enable investors 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.
 
Refining margin per crude oil throughput barrel adjusted for FIFO impact is a measurement calculated as the difference between net sales and cost of product sold (exclusive of depreciation and amortization) adjusted for FIFO impacts. Refining margin adjusted for FIFO impact is a non-GAAP measure that we believe is important to investors in evaluating our refineries' performance as a general indication of the amount above our cost of product sold (taking into account the impact of our utilization of FIFO) that we are able to sell refined products. Our calculation of refining margin adjusted for FIFO impact may differ from calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure. Under our FIFO accounting method, changes in crude oil prices can cause fluctuations in the inventory valuation of our crude oil, work in process and finished goods, thereby resulting in favorable FIFO impacts when crude oil prices increase and unfavorable FIFO impacts when crude oil prices decrease.
 
Gross profit is calculated as the difference between net sales, cost of product sold (exclusive of depreciation and amortization), direct operating expenses (exclusive of depreciation and amortization), major scheduled turnaround expenses and depreciation and amortization.  Gross profit per throughput barrel is calculated as gross profit as derived above divided by our refineries' crude oil throughput volumes for the respective periods presented. Gross profit is a non-GAAP measure that should not be substituted for operating income. Management believes it is important to investors in


evaluating our refineries' performance and our ongoing operating results. Our calculation of gross profit may differ from similar calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure.
 
EBITDA and Adjusted EBITDA.   EBITDA represents net income before (i) interest expense and other financing costs, net of interest income, (ii) income tax expense and (iii) depreciation and amortization.  Adjusted EBITDA represents EBITDA adjusted for FIFO impacts (favorable) unfavorable, share-based compensation, major scheduled turnaround expenses, loss on disposition of fixed assets, unrealized gains and losses on derivatives, loss on extinguishment of debt and expenses associated with the Gary-Williams acquisition.  EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be substituted for net income or cash flow from operations. Management believes that EBITDA and Adjusted EBITDA enables investors to better understand and evaluate our ongoing operating results and allows for greater transparency in reviewing our overall financial, operational and economic performance.  EBITDA and Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.  Below is a reconciliation of net income to EBITDA and EBITDA to Adjusted EBITDA for the three and six months ended June 30, 2013 and 2012:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions)
Net income attributable to CVR Energy stockholders
$
183.4

 
$
154.7

 
$
348.4

 
$
129.5

Add:
 
 
 
 
 
 
 
Interest expense and other financing costs, net of interest income
12.2

 
18.8

 
27.3

 
38.0

Income tax expense
99.5

 
91.1

 
193.3

 
81.4

Depreciation and amortization
35.0

 
32.2

 
69.2

 
64.3

EBITDA adjustments included in noncontrolling interest
(11.9
)
 
(1.8
)
 
(19.9
)
 
(3.9
)
EBITDA
318.2

 
295.0

 
618.3

 
309.3

Add:
 
 
 
 
 
 
 
FIFO impacts (favorable) unfavorable
(24.2
)
 
105.4

 
(29.0
)
 
95.0

Share-based compensation
4.3

 
17.8

 
10.3

 
21.9

Major scheduled turnaround expense
—

 
2.5

 
—

 
23.5

(Gain) loss on derivatives, net
(120.5
)
 
(38.8
)
 
(100.5
)
 
108.5

Current period settlements on derivative contracts
14.7

 
(8.1
)
 
(37.8
)
 
(27.2
)
Loss on extinguishment of debt
—

 
—

 
26.1

 
—

Expenses associated with proxy matter
—

 
29.4

 
—

 
44.2

Expenses associated with Gary-Williams acquisition
—

 
4.6

 
—

 
8.3

Adjustments included in noncontrolling interest
28.8

 
(0.8
)
 
19.9

 
(1.4
)
Adjusted EBITDA
$
221.3

 
$
407.0

 
$
507.3

 
$
582.1


Adjusted Petroleum and Nitrogen Fertilizer EBITDA represents operating income adjusted for FIFO impacts (favorable) unfavorable; share-based compensation, non-cash; major scheduled turnaround expenses; current period settlements on derivative contracts; loss on disposition of fixed assets; depreciation and amortization and other income (expense). We present Adjusted EBITDA by operating segment because it is the starting point for CVR Refining's and CVR Partner's available cash for distribution. Adjusted EBITDA by operating segment is not a recognized term under GAAP and should not be substituted for operating income as a measure of performance. Management believes that Adjusted EBITDA by operating segment enables investors to better understand CVR Refining's and CVR Partner's ability to make distributions to their common unitholders,  evaluate our ongoing operating results and allows for greater transparency in reviewing our overall financial, operational and economic performance. Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently. Below is a reconciliation of operating income to adjusted EBITDA for the petroleum and nitrogen fertilizer segments for the three and six months ended June 30, 2013 and 2012:



 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions)
Petroleum:
 
 
 
 
 
 
 
Petroleum operating income
$
229.1

 
$
248.9

 
$
564.7

 
$
383.8

    FIFO impacts (favorable) unfavorable
(24.2
)
 
105.4

 
(29.0
)
 
95.0

    Share-based compensation, non-cash
2.5

 
5.4

 
6.1

 
6.4

    Major scheduled turnaround expenses
—

 
2.5

 
—

 
23.5

    Loss on disposition of fixed assets
—

 
—

 
—

 
—

    Current period settlements on derivative contracts
14.7

 
(8.1
)
 
(37.8
)
 
(27.2
)
    Depreciation and amortization
28.4

 
26.6

 
56.4

 
52.9

    Other income
0.1

 
0.7

 
0.1

 
0.8

Adjusted Petroleum EBITDA
$
250.6

 
$
381.4

 
$
560.5

 
$
535.2

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2013
 
2012
 
2013
 
2012
 
(in millions)
Nitrogen Fertilizer:
 
 
 
 
 
 
 
Nitrogen Fertilizer operating income
$
37.1

 
$
36.1

 
$
73.9

 
$
67.5

    Share-based compensation, non-cash
0.8

 
2.8

 
2.0

 
4.0

    Depreciation and amortization
6.2

 
5.2

 
12.0

 
10.6

    Major scheduled turnaround expense
—

 
—

 
—

 
—

    Other income, net
—

 
—

 
—

 
—

Adjusted Nitrogen Fertilizer EBITDA
$
44.1

 
$
44.1

 
$
87.9

 
$
82.1


Derivatives Summary . To reduce the basis risk between the price of products for Group 3 and that of the NYMEX associated with selling forward derivative contracts for NYMEX crack spreads, we may enter into basis swap positions to lock the price difference. If the difference between the price of products on the NYMEX and Group 3 (or some other price benchmark as we may deem appropriate) is different than the value contracted in the swap, then we will receive from or owe to the counterparty the difference on each unit of product contracted in the swap, thereby completing the locking of our margin. From time to time our Petroleum segment holds various NYMEX positions through a third-party clearing house. In addition, the Petroleum segment enters into commodity swap contracts. The physical volumes are not exchanged and these contracts are net settled with cash.
 
The table below summarizes our open commodity derivatives positions as of June 30, 2013.  The positions are primarily in the form of 'crack spread' swap agreements with financial counterparties, wherein the Petroleum segment will receive the fixed prices noted below.
Commodity Swaps
 
   Barrels   
 
Fixed Price(1)
Third Quarter 2013
 
5,775,000

 
25.92

Fourth Quarter 2013
 
4,875,000

 
26.98

 
 
 
 
 
First Quarter 2014
 
3,000,000

 
33.50

Second Quarter 2014
 
1,800,000

 
31.76

Third Quarter 2014
 
2,250,000

 
30.25

Fourth Quarter 2014
 
2,250,000

 
30.26

 
 
 
 
 
Total
 
19,950,000

 
$
28.82

____________________



(1)
Weighted-average price of all positions for period indicated.