Exhibit 99.2
CVR ENERGY, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated financial statements of CVR Energy, Inc. have been derived from the audited historical financial statements of CVR Energy, Inc. for the year ended and as of December 31, 2010, which are included in CVR Energy, Inc.’sForm 10-K for the year ended December 31, 2010.
The pro forma consolidated balance sheet as of December 31, 2010 and the pro forma consolidated statement of operations for the year ended December 31, 2010 have been adjusted to give effect to the following transactions:
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| | • | The interests of Coffeyville Resources, LLC (“CRLLC”) and CVR Special GP, LLC (“Special GP”) in CVR Partners, LP (“CVR Partners”) were converted into 50,920 and 50,869,080 common units, respectively, and Special GP, a wholly-owned subsidiary of CRLLC, was merged with and into CRLLC, with CRLLC continuing as the surviving entity; |
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| | • | CVR Partners offered and sold 22,080,000 common units to the public at a public offering price of $16.00 per unit and paid related commissions and expenses; |
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| | • | CVR Partners’ general partner sold its incentive distribution rights, or IDRs, to CVR Partners for $26.0 million in cash (representing fair market value), and CVR Partners extinguished such IDRs; |
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| | • | CVR GP, LLC, the general partner of CVR Partners (“CVR GP”) and CRLLC, entered into a second amended and restated agreement of limited partnership; |
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| | • | CVR Partners entered into a new credit facility, which included a $125.0 million term loan and a $25.0 million revolving credit facility both due in 2016, drew the $125.0 million term loan in full, and paid associated financing costs; and |
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| | • | Coffeyville Acquisition III LLC, the then-owner of CVR GP, sold CVR GP and its non-economic general partner interest to CRLLC for nominal consideration. |
The pro forma adjustments have been prepared as if the transactions described above had taken place on December 31, 2010, in the case of the pro forma balance sheet, or as of January 1, 2010, in the case of the pro forma statement of operations.
The unaudited pro forma consolidated financial statements are not necessarily indicative of the results that we would have achieved had the transactions described herein actually taken place at the dates indicated, and do not purport to be indicative of future financial position or operating results. The unaudited pro forma consolidated financial statements do not reflect the repurchase of up to $100.0 million of CRLLC and Coffeyville Finance’s outstanding notes that may be tendered pursuant to the offer to purchase dated April 14, 2011. See “Tender Offer” under Item 8.01 of thisForm 8-K for a discussion of the tender offer. The unaudited pro forma consolidated financial statements should be read in conjunction with the audited financial statements of CVR Energy, Inc., the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in CVR Energy, Inc.’sForm 10-K for the year ended December 31, 2010.
The pro forma adjustments are based on available information and certain assumptions that we believe are reasonable. The pro forma adjustments and the assumptions included therein are described in the accompanying notes.
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CVR Energy, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Balance Sheet
As of December 31, 2010
| | | | | | | | | | | | | |
| | | Actual as of
| | | Pro Forma
| | | Pro Forma as of
| |
| | | December 31, 2010 | | | Adjustments | | | December 31, 2010 | |
| | | | | | (In thousands) | | | | |
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ASSETS |
| Current assets: | | | | | | | | | | | | |
| Cash and cash equivalents | | $ | 200,049 | | | $ | 353,280 | (a) | | $ | 621,273 | |
| | | | | | | | (28,056 | )(b) | | | | |
| | | | | | | | 125,000 | (c) | | | | |
| | | | | | | | (3,000 | )(d) | | | | |
| | | | | | | | (26,000 | )(e) | | | | |
| Accounts receivable, net of allowance for doubtful accounts of $722 | | | 80,169 | | | | — | | | | 80,169 | |
| Inventories | | | 247,172 | | | | — | | | | 247,172 | |
| Prepaid expenses and other current assets | | | 28,616 | | | | (2,089 | )(b) | | | 26,527 | |
| Income tax receivable | | | — | | | | — | | | | — | |
| Deferred income taxes | | | 43,351 | | | | (10,034 | )(f) | | | 33,317 | |
| | | | | | | | | | | | | |
| Total current assets | | | 599,357 | | | | 409,101 | | | | 1,008,458 | |
| Property, plant, and equipment, net of accumulated depreciation | | | 1,081,312 | | | | — | | | | 1,081,312 | |
| Intangible assets, net | | | 344 | | | | — | | | | 344 | |
| Goodwill | | | 40,969 | | | | — | | | | 40,969 | |
| Deferred financing costs, net | | | 10,601 | | | | 3,000 | (d) | | | 13,601 | |
| Insurance receivable | | | 3,570 | | | | — | | | | 3,570 | |
| Other long-term assets | | | 4,031 | | | | — | | | | 4,031 | |
| | | | | | | | | | | | | |
| Total assets | | $ | 1,740,184 | | | $ | 412,101 | | | $ | 2,152,285 | |
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| LIABILITIES AND EQUITY |
| Current liabilities: | | | | | | | | | | | | |
| Current portion of long-term debt | | $ | — | | | $ | — | | | $ | — | |
| Note payable and capital lease obligations | | | 8,014 | | | | — | | | | 8,014 | |
| Accounts payable | | | 155,220 | | | | (1,415 | )(b) | | | 153,805 | |
| Personnel accruals | | | 29,151 | | | | — | | | | 29,151 | |
| Accrued taxes other than income taxes | | | 21,266 | | | | — | | | | 21,266 | |
| Income taxes payable | | | 7,983 | | | | 13,309 | (f) | | | 21,292 | |
| Deferred revenue | | | 18,685 | | | | — | | | | 18,685 | |
| Other current liabilities | | | 25,396 | | | | — | | | | 25,396 | |
| | | | | | | | | | | | | |
| Total current liabilities | | | 265,715 | | | | 11,894 | | | | 277,609 | |
| Long-term liabilities: | | | | | | | | | | | | |
| Long-term debt, net of current portion | | | 468,954 | | | | 125,000 | (c) | | | 593,954 | |
| Accrued environmental liabilities, net of current portion | | | 2,552 | | | | — | | | | 2,552 | |
| Deferred income taxes | | | 298,943 | | | | (23,343 | )(f) | | | 344,059 | |
| | | | | | | | 68,459 | (g) | | | | |
| Other long-term liabilities | | | 3,847 | | | | — | | | | 3,847 | |
| | | | | | | | | | | | | |
| Total long-term liabilities | | | 774,296 | | | | 170,116 | | | | 944,412 | |
| Commitments and contingencies | | | | | | | | | | | | |
| Equity: | | | | | | | | | | | | |
| CVR stockholders’ equity: | | | | | | | | | | | | |
| Common stock $0.01 par value per share, 350,000,000 shares authorized, 86,435,672 shares issued | | | 864 | | | | — | | | | 864 | |
Additionalpaid-in-capital | | | 467,871 | | | | 216,658 | (a) | | | 571,940 | |
| | | | | | | | (28,730 | )(b) | | | | |
| | | | | | | | (15,400 | )(e) | | | | |
| | | | | | | | (68,459 | )(g) | | | | |
| Retained earnings | | | 221,079 | | | | — | | | | 221,079 | |
| Treasury stock, 21,891, at cost | | | (243 | ) | | | — | | | | (243 | ) |
| Accumulated other comprehensive income, net of tax | | | 2 | | | | — | | | | 2 | |
| | | | | | | | | | | | | |
| Total CVR stockholders’ equity | | | 689,573 | | | | 104,069 | | | | 793,642 | |
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| Noncontrolling interest | | | 10,600 | | | | 136,622 | (a) | | | 136,622 | |
| | | | | | | | (10,600 | )(e) | | | | |
| | | | | | | | | | | | | |
| Total equity | | | 700,173 | | | | 230,091 | | | | 930,264 | |
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| Total liabilities and equity | | $ | 1,740,184 | | | $ | 412,101 | | | $ | 2,152,285 | |
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The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
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CVR Energy, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2010
| | | | | | | | | | | | | |
| | | Actual as of
| | | Pro Forma
| | | Pro Forma as of
| |
| | | December 31, 2010 | | | Adjustments | | | December 31, 2010 | |
| | | | | | (In thousands) | | | | |
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| Net sales | | $ | 4,079,768 | | | $ | — | | | $ | 4,079,768 | |
| Operating costs and expenses: | | | | | | | | | | | | |
| Cost of product sold (exclusive of depreciation and amortization) | | | 3,568,118 | | | | — | | | | 3,568,118 | |
| Direct operating expenses (exclusive of depreciation and amortization) | | | 240,761 | | | | — | | | | 240,761 | |
| Selling, general and administrative expenses (exclusive of depreciation and amortization) | | | 92,034 | | | | — | | | | 92,034 | |
| Net costs associated with flood | | | (970 | ) | | | — | | | | (970 | ) |
| Depreciation and amortization | | | 86,761 | | | | — | | | | 86,761 | |
| | | | | | | | | | | | | |
| Total operating costs and expenses | | | 3,986,704 | | | | — | | | | 3,986,704 | |
| | | | | | | | | | | | | |
| Operating income | | | 93,064 | | | | — | | | | 93,064 | |
| Other income (expense): | | | | | | | | | | | | |
| Interest expense and other financing costs | | | (50,268 | ) | | | (5,000 | )(a) | | | (56,003 | ) |
| | | | | | | | (610 | )(b) | | | — | |
| | | | | | | | (125 | )(c) | | | — | |
| Interest income | | | 2,211 | | | | 650 | (d) | | | 2,861 | |
| Gain (loss) on derivatives, net | | | (1,505 | ) | | | — | | | | (1,505 | ) |
| Loss on extinguishment of debt | | | (16,647 | ) | | | — | | | | (16,647 | ) |
| Other income, net | | | 1,218 | | | | — | | | | 1,218 | |
| | | | | | | | | | | | | |
| Total other income (expense) | | | (64,991 | ) | | | (5,085 | ) | | | (70,076 | ) |
| | | | | | | | | | | | | |
| Income before income taxes and noncontrolling interest | | | 28,073 | | | | (5,085 | ) | | | 22,988 | |
| Income tax expense | | | 13,783 | | | | (4,187 | )(e) | | | 9,596 | |
| | | | | | | | | | | | | |
| Net income | | | 14,290 | | | | (898 | ) | | | 13,392 | |
| Less: Net income attributable to noncontrolling interest | | | — | | | | 4,569 | (f) | | | 4,569 | |
| | | | | | | | | | | | | |
| Net income attributable to CVR Energy, Inc. | | $ | 14,290 | | | $ | (5,467 | ) | | $ | 8,823 | |
| | | | | | | | | | | | | |
| Basic earnings per share | | $ | 0.17 | | | | | | | $ | 0.10 | |
| Diluted earnings per share | | $ | 0.16 | | | | | | | $ | 0.10 | |
| Weighted-average common shares outstanding: | | | | | | | | | | | | |
| Basic | | | 86,340,342 | | | | | | | | 86,340,342 | |
| Diluted | | | 86,789,179 | | | | | | | | 86,789,179 | |
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
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CVR ENERGY, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
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| (1) | Pro Forma Balance Sheet Adjustments and Assumptions |
(a) Reflects (1) the issuance by CVR Partners, LP (CVR Partners) of 19,200,000 common units to the public at an initial public offering price of $16.00 per common unit resulting in aggregate gross proceeds of $307.2 million and (2) the exercise by the underwriters of their option to sell 2,880,000 common units at $16.00 per common unit to cover over-allotments resulting in aggregate gross proceeds of $46.1 million, for a total of $353.3 million. Associated with this transaction is the entry to record the noncontrolling interest at approximately 30.2% of the total partners’ capital carrying value at CVR Partners, with the excess recorded to additionalpaid-in-capital for CVR Energy.
(b) Reflects the payment of underwriting commissions of $24.7 million and other estimated offering expenses of $4.0 million for a total of $28.7 million which will be allocated to the newly issued public common units of CVR Partners and recorded in additional paid-in-capital for CVR Energy. Of the $4.0 million in estimated offering costs, $0.7 million had been prepaid and $1.4 million had been accrued.
(c) Reflects term debt incurred by CVR Partners of $125.0 million.
(d) Reflects the estimated deferred financing costs of $3.0 million associated with the new credit facility of CVR Partners.
(e) Reflects the purchase of the incentive distribution rights of the managing general partner interest of CVR Partners ($26.0 million) which represents the fair market value.
(f) Reflects an increase to income taxes payable primarily due to the taxable gain on distributions from CVR Partners to CRLLC in excess of CRLLC’s tax basis in CVR Partners. The change in deferred tax assets and deferred tax liabilities is due to the reclassification of the net book versus tax basis difference associated with the investment in CVR Partners to a noncurrent deferred tax liability in conjunction with the initial public offering of CVR Partners. Deferreds historically were recorded based upon each separate component of the book versus tax basis difference of CVR Partners’ assets and liabilities.
(g) Reflects the deferred tax liability recorded associated with the difference between the book carrying value of CVR Energy’s investment in CVR Partners and the tax basis resulting from gains recorded in additionalpaid-in-capital.
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| (2) | Pro Forma Statement of Operations Adjustments and Assumptions |
(a) Reflects the inclusion of interest expense relating to the new credit facility of CVR Partners at an assumed rate of 4.0% with no balance outstanding under the revolver.
(b) Reflects the amortization of related debt issuance costs of the new credit facility of CVR Partners over a five year term.
(c) Reflects the commitment fee of 0.50% on the estimated unused portion of the $25.0 million revolving credit facility of CVR Partners.
(d) Reflects the inclusion of interest income earned on the average cash balance of CVR Partners.
(e) Reflects adjustments attributable to the noncontrolling interest and the reduction in pre-tax income.
(f) Reflects the removal of net income attributable to the noncontrolling interest.
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| (3) | Pro Forma Net Income per Common Share |
Pro forma net income per common share is determined by dividing the pro forma net income that has been adjusted for adjustments of interest expense, interest income, income tax expense and income attributable
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CVR ENERGY, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
to the noncontrolling interest by the weighted average common shares outstanding to determine both the basic and diluted net income per common share. The pro forma adjustments do not impact the weighted average shares outstanding.
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| (4) | Incremental Post-IPO Costs |
Upon completion of CVR Partners’ initial public offering, CVR Partners anticipates incurring incremental general and administrative expenses as a result of being a publicly traded limited partnership, such as costs associated with SEC reporting requirements, including annual and quarterly reports to unitholders, tax return andSchedule K-1 preparation and distribution, independent auditor fees, investor relations activities and registrar and transfer agent fees. It is estimated that these incremental general and administrative expenses will be approximately $3.5 million per year. The unaudited pro forma consolidated financial statements do not reflect the $3.5 million in incremental expenses.
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