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Business Segments
 3 Months Ended
Mar. 31, 2012
Business Segments  
Business Segments

(18) Business Segments

        The Company measures segment profit as operating income for Petroleum and Nitrogen Fertilizer, CVR's two reporting segments, based on the definitions provided in ASC Topic 280—Segment Reporting. All operations of the segments are located within the United States.

  • Petroleum

        Principal products of the Petroleum Segment are refined fuels, liquefied petroleum gas, asphalts, and petroleum refining by-products, including pet coke. The Petroleum Segment's Coffeyville refinery sells pet coke to the Partnership for use in the manufacture of nitrogen fertilizer at the adjacent nitrogen fertilizer plant. For the Petroleum Segment, a per-ton transfer price is used to record intercompany sales on the part of the Petroleum Segment and corresponding intercompany cost of product sold (exclusive of depreciation and amortization) for the Nitrogen Fertilizer Segment. The per ton transfer price paid, pursuant to the pet coke supply agreement that became effective October 24, 2007, is based on the lesser of a pet coke price derived from the price received by the Nitrogen Fertilizer Segment for UAN (subject to a UAN based price ceiling and floor) and a pet coke price index for pet coke. The intercompany transactions are eliminated in the Other Segment. Intercompany sales included in petroleum net sales were approximately $2.4 million and $1.4 million for the three months ended March 31, 2012 and 2011, respectively.

        The Petroleum Segment recorded intercompany cost of product sold (exclusive of depreciation and amortization) for the hydrogen sales described below under "Nitrogen Fertilizer" of approximately $5.7 and $0.0 million for the three months ended March 31, 2012 and 2011, respectively. For the three months ended March 31, 2012 and 2011, the net sales generated from the sale of hydrogen to the Partnership were approximately $0.0 and $0.7 million, respectively.

  • Nitrogen Fertilizer

        The principal product of the Nitrogen Fertilizer Segment is nitrogen fertilizer. Intercompany cost of product sold (exclusive of depreciation and amortization) for the pet coke transfer described above was approximately $3.0 and $0.8 million for the three months ended March 31, 2012 and 2011, respectively.

        Pursuant to the feedstock agreement, the Company's segments have the right to transfer excess hydrogen to one another between the Coffeyville refinery and nitrogen fertilizer plant. Sales of hydrogen to the Petroleum Segment have been reflected as net sales for the Nitrogen Fertilizer Segment. Receipts of hydrogen from the Petroleum Segment have been reflected in cost of product sold (exclusive of depreciation and amortization) for the Nitrogen Fertilizer Segment. For the three months ended March 31, 2012 and 2011, the net sales generated from intercompany hydrogen sales were $5.7 million and $0.0, respectively. For the three months ended March 31, 2012 and 2011, the Nitrogen Fertilizer Segment also recognized approximately $0.0 and $0.7 million, respectively, of cost of product sold related to the transfer of excess hydrogen. As these intercompany sales and cost of product sold are eliminated, there is no financial statement impact on the condensed consolidated financial statements.

  • Other Segment

        The Other Segment reflects intercompany eliminations, cash and cash equivalents, all debt related activities, income tax activities and other corporate activities that are not allocated to the operating segments.

        The following table summarizes certain operating results and capital expenditures information by segment:

 
   Three Months Ended
March 31, 		 
 
   2012   2011  
 
   (in thousands)
  

Net sales

              

Petroleum

   $ 1,898,485   $ 1,111,260  

Nitrogen Fertilizer

     78,276     57,377  

Intersegment elimination

     (8,130 )   (1,372 )
           

Total

   $ 1,968,631   $ 1,167,265  
           

Cost of product sold (exclusive of depreciation and amortization)

              

Petroleum

   $ 1,630,665   $ 930,283  

Nitrogen Fertilizer

     12,598     7,491  

Intersegment elimination

     (8,108 )   (952 )
           

Total

   $ 1,635,155   $ 936,822  
           

Direct operating expenses (exclusive of depreciation and amortization)

              

Petroleum

   $ 92,703   $ 45,410  

Nitrogen Fertilizer

     22,837     23,024  

Other

     (26 )   —  
           

Total

   $ 115,514   $ 68,434  
           

Insurance recovery—business interruption

              

Petroleum

   $ —   $ —  

Nitrogen Fertilizer

     —     (2,870 )

Other

     —     —  
           

Total

   $ —   $ (2,870 )
           

Depreciation and amortization

              

Petroleum

   $ 26,259     16,916  

Nitrogen Fertilizer

     5,438     4,637  

Other

     415     458  
           

Total

   $ 32,112   $ 22,011  
           

Operating income (loss)

              

Petroleum

   $ 134,896   $ 105,690  

Nitrogen Fertilizer

     31,426     16,766  

Other

     (25,814 )   (12,850 )
           

Total

   $ 140,508   $ 109,606  
           

Capital expenditures

              

Petroleum

   $ 35,403   $ 4,588  

Nitrogen fertilizer

     22,274     2,041  

Other

     1,848     708  
           

Total

   $ 59,525   $ 7,337  
           

 

 
   As of
March 31,
2012 		  As of
December 31,
2011 		 
 
   (in thousands)
  

Total assets

              

Petroleum

   $ 2,396,272   $ 2,322,148  

Nitrogen Fertilizer

     656,931     659,309  

Other

     150,239     137,834  
           

Total

   $ 3,203,442   $ 3,119,291  
           

Goodwill

              

Petroleum

   $ —   $ —  

Nitrogen Fertilizer

     40,969     40,969  

Other

     —     —  
           

Total

   $ 40,969   $ 40,969