![]() Returning Capital to Shareholders February 13, 2012 Exhibit 99.2 |
![]() 1 1 1 1 1 We are taking action to prudently return cash to shareholders CVR Energy announced today its Board of Directors approved a regular quarterly cash dividend of $0.08 per common share – Dividend will be payable following the end of the first quarter – Decision to initiate a regular quarterly dividend was reached after an extensive review of the company’s financial performance and confidence in its future prospects – CVR Energy’s Board believes a regular dividend is consistent with its continuing commitment to deliver long term value for shareholders CVR Energy intends to sell a portion of its investment in CVR Partners – The net proceeds will be used to pay a special dividend to CVR Energy’s shareholders and to strengthen the company’s balance sheet – Sizing broadly consistent with MLP offering precedent so that it can provide the greatest cash return to shareholders without significant negative impact on the market for CVR Partners – The size, time and manner of the sale will be disclosed when the transaction is implemented CVR Energy’s Board has evaluated various financial and structural alternatives and believes these actions offer the best opportunity to enhance returns for shareholders in a reasonable time frame with minimal execution risk or structural impediments CVR Energy Declares Regular Quarterly Dividend and Intends to Monetize a Portion of its Investment in CVR Partners |
![]() 2 2 2 2 2 This plan is focused on shareholder value Institutes a regular quarterly dividend to benefit shareholders Monetizes a portion of the CVR Partners stake after strong post-IPO performance Returns a majority of the after-tax sale proceeds to CVR Energy shareholders via special dividend Strengthens the balance sheet to better weather refining business cycles Increases the float and liquidity of CVR Partners without introducing an unproven new equity security to the market Our plan provides transparency and certainty of execution and will deliver additional immediate and long-term value to CVR Energy shareholders |
![]() 3 3 3 3 3 Delivering value to CVR Energy shareholders Note: Total return based on period from October 22, 2007 to February 10, 2012. CVI initial value based on IPO price of $19.00 per share. CVI total return compared to total return of refining peers: ALJ, DK, HFC, TSO and WNR. Peer index equal weighted. Source: Capital IQ Refiners relative total return performance CVI Refining peers S&P 500 Since IPO 43% (34%) (2%) 3-year 357% 77% 73% 2-year 243% 160% 31% 1-year 44% 27% 4% 1-month 29% 23% 4% Since IPO, CVR Energy is #1 in total return among refining peers and remains focused on creating value for shareholders 0 20 40 60 80 100 120 140 160 180 Oct-07 May-08 Nov -08 Jun -09 Dec-09 Jun -10 Jan -11 Jul -11 Feb-12 CVI Refining Peers Index S&P 500 (2%) (34%) 43% |
![]() 4 4 4 4 4 CVR Partners has outperformed the Alerian MLP index and fertilizer corporations Note: Total return based on period from April 7, 2011 to February 10, 2012. CVR Partners initial value based on IPO price of $16.00 per unit. AMZX is based on the total return of the Alerian MLP index. Corporate fertilizer index equal weighted and includes AGU, CF and YAR. Performance calculated using local currency returns. Source: Bloomberg, Capital IQ, Alerian Total return of UAN vs. Alerian MLP index and fertilizer corporations CVR Partners has provided a total return of 86% since IPO 60 80 100 120 140 160 180 200 220 Apr-11 May-11 Jun -11 Jul -11 Sep-11 Oct-11 Nov -11 Jan -12 Feb-12 CVR Partners AMZX Corporate Fertilizer Index 86 % 10 % 4 % |
![]() 5 5 5 5 5 Your Board’s commitment to shareholders Commitment to operational excellence Commitment to building shareholder value in accordance with prudent capital allocation Continuously evaluating opportunities and alternatives to enhance value for or return cash to shareholders Transparency regarding our objectives Identifying outcomes that deliver value to our shareholders on a risk-adjusted basis within reasonable timeframes Meaningful return of capital within definitive time frame Dividend signals our commitment to regularly return capital Our decision came following a review of other alternatives, including a full spin-off of CVR Partners, but our plan: – Provides greater certainty of shareholder return – Rapidly delivers cash to our shareholders – Maintains our ability to retain future cash and appreciation from CVR Partners distributions – Does not create the uncertainties related to introducing a new security without true comparables Our principles Our announcement today is consistent with those principles |
![]() 6 6 6 6 6 Separating Refining and Fertilizer at this time is not an optimal strategy Tax-free separation is complex and requires corporate holding company for UAN units (UAN Holdco) UAN Holdco would pay cash taxes on UAN distributions received, with an effective tax rate in excess of 40% Separation is time consuming and exposes shareholders to more market risk May require refinancing of existing CVR Energy’s debt at significant premiums over par A Fertilizer separation has significant structural, execution and valuation risks compared with our plan Structural and execution risks Valuation risks UAN Holdco’s valuation would be subject to significant uncertainty – No true comparable companies – UAN’s variable distribution policy makes valuation inherently more volatile than other corporate GP holding companies – Unlike other corporate GP holding companies, there are no incentive distribution rights associated with CVR Energy’s GP interest and no associated incremental cash flows CVR Energy and its shareholders would receive no cash proceeds today and forego future cash and appreciation from UAN distributions and unit sales – Potential impact on financial flexibility, ratings and cost of debt at CVR Energy To create value for shareholders, post-spin entities must trade at multiples above current levels and closest peers |
![]() 7 7 7 7 7 We have a demonstrated track record of creating shareholder value Operational excellence and enhancements – Increased total refining capacity and crude gathering – Expanding UAN capacity Improving financial strength – Conservative leverage metrics led to Ba3 rating upgrade – Tactical hedging and risk management Willing to take action – IPO of CVR Partners – Accretive and synergistic acquisition of GWEC – Instituting a regular quarterly dividend – Selling a portion of CVR Partners interest Our plan is consistent with our commitment to creating value through operating improvements, focused growth initiatives, conservative capital management and structural actions |