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Subsequent Events | 9 Months Ended
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Sep. 30, 2012
Subsequent Events |
Subsequent Events |
(20) Subsequent Events Formation and Initial Public Offering of CVR Refining, LP In contemplation of an initial public offering, CRLLC has formed CVR Refining Holdings, LLC, which in turn has formed CVR Refining GP, LLC. CVR Refining Holdings, LLC and CVR Refining GP, LLC have formed CVR Refining, LP which has issued them a 100% limited partnership interest and a non-economic general partner interest, respectively. CVR Refining Holdings, LLC has formed CVR Refining, LLC and CRLLC contributed its petroleum and logistics subsidiaries, as well as its equity interests in Coffeyville Finance Inc., to CVR Refining, LLC in October 2012. On October 1, 2012, CVR Refining, LP (the "Refining Partnership") filed a registration statement on Form S-1 to effect an initial public offering of its common units representing limited partner interests (the "Offering"). The number of common units to be sold in the Offering has not yet been determined. The Offering is subject to numerous conditions including, without limitation, market conditions, pricing, regulatory approvals, including clearance from the SEC, compliance with contractual obligations, and reaching agreements with the underwriters and lenders. Upon consummation of the Offering, CVR will indirectly own the Refining Partnership's general partner and limited partnership interests in the form of common units. There can be no assurance that any such offering will be consummated on the terms described in the registration statement or at all. Following the Offering, the Refining Partnership will have two types of partnership interests outstanding: • common units representing limited partner interests, a portion of which the Refining Partnership will have sold in the Offering; and • a general partner interest, which is not entitled to any distributions, and which will be held by the Refining Partnership's general partner. Following the Offering, the Refining Partnership expects to make quarterly cash distributions to unitholders. The board of directors of the general partner will adopt a policy, which it may change at any time, whereby distributions for each quarter will be in an amount equal to available cash generated in such quarter. Available cash will be determined by the board of directors of the general partner. The general partner will manage and operate the Refining Partnership. Common unitholders will only have limited voting rights on matters affecting the Refining Partnership's business. Common unitholders will have no right to elect the general partner or its directors on an annual or other continuing basis. Issuance of Second Lien Senior Secured Notes and Tender Offer On October 23, 2012, CVR Refining LLC ("Refining LLC") and its wholly-owned subsidiary, Coffeyville Finance Inc. (the "New Issuers"), completed a private offering of $500.0 million in aggregate principal amount of 6.500% Second Lien Senior Secured Notes due 2022 (the "2022 Notes"). The 2022 Notes were issued at par. Refining LLC received approximately $492.5 million of cash proceeds, net of the underwriting fees, but before deducting other third-party fees and expenses associated with the offering. The 2022 Notes are secured by substantially the same assets that secure the outstanding Second Lien Notes, subject to exceptions, until such time that the outstanding Second Lien Notes have been discharged in full. A portion of the net proceeds from the offering approximating $348.1 million were used to purchase approximately $323.0 million of the First Lien Notes pursuant to a tender offer and to settle accrued interest of approximately $1.8 million through October 23, 2012 and to pay related fees and expenses. Tendered notes were purchased at a premium of approximately $23.3 million in aggregate amount. CRLLC intends to use the remaining proceeds from the offering to either (1) purchase the remaining $124.1 million of existing First Lien Notes, if any, tendered in the tender offer by November 5, 2012 or (2) redeem any remaining non-tendered First Lien Notes on November 23, 2012 pursuant to a notice of redemption issued on October 23, 2012. Any remaining proceeds will be used for general corporate purposes. As a result of these transactions, a write-off of previously deferred financing charges estimated at approximately $8.4 million will be recorded in the fourth quarter of 2012. Additionally, the tendered and redeemed First Lien Notes have an unamortized original issuance premium of approximately $6.6 million, which will reduce the loss on extinguishment of debt recorded in the fourth quarter. The total premiums expected to be paid in conjunction with both the tender offer and the redemption of the First Lien Notes are anticipated to be approximately $31.7 million. This will be recorded as a loss on extinguishment of debt in the fourth quarter of 2012. The debt issuance costs of the 2022 Notes will be amortized over the term of the 2022 Notes as interest expense using the effective-interest amortization method. The 2022 Notes mature on November 1, 2022, unless earlier redeemed or repurchased by the New Issuers. Interest is payable on the 2022 Notes semi-annually on May 1 and November 1 of each year, commencing on May 1, 2013. Partnership Distribution On October 26, 2012, the Board of Directors of the Partnership's general partner declared a cash distribution for the third quarter of 2012 to the Partnership's unitholders of $0.496 per common unit. The cash distribution will be paid on November 14, 2012 to unitholders of record at the close of business on November 7, 2012. Wynnewood Refinery Major Scheduled Turnaround The Wynnewood refinery began turnaround maintenance in the fourth quarter of 2012. The Company expects to incur approximately $100.0 million of expenses during 2012 related to the Wynnewood refinery's turnaround. The Wynnewood refinery has incurred $13.4 million of turnaround costs in the nine months ended September 30, 2012. It is anticipated that the downtime associated with the Wynnewood refinery turnaround will approximate 50 to 55 days and will significantly impact the revenue for the fourth quarter of 2012. Nitrogen Fertilizer Major Scheduled Turnaround The nitrogen fertilizer facility's previously scheduled major turnaround began on October 3, 2012 with ammonia production resuming on October 23, 2012 and UAN production resuming on October 25, 2012. Operating income is impacted negatively by both the expenses associated with the scheduled turnaround and the lost revenue the Partnership would have generated had the nitrogen fertilizer plant not been shut down. Turnaround expenses are recognized as incurred as a component of direct operating expenses. As of September 30, 2012, $0.2 million of turnaround expenses had been incurred. It is estimated that approximately $4.7 million of expenses were incurred in October 2012 associated with the turnaround.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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