ml8k_cvrenergy.htm
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): April 29, 2008 (April
23, 2008)
CVR
ENERGY, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
(State
or other jurisdiction of
incorporation)
|
001-33492
(Commission File
Number)
|
61-1512186
(I.R.S.
Employer
Identification
Number)
|
|
|
2277
Plaza Drive, Suite 500
Sugar
Land, Texas 77479
(Address
of principal
executive offices)
|
|
Registrant’s
telephone number, including area
code: (281)
207-3200
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 (see
General Instruction A.2. below):
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
|
Item
4.02(a).
|
Non-Reliance
on Previously Issued Financial Statements or a Related Audit Report or
Completed Interim Review.
|
On April
23, 2008, the Audit Committee and management of CVR Energy, Inc. (the “Company”)
concluded that the Company’s previously issued financial statements reflected
certain errors principally relating to the calculation of the cost of crude oil
purchased by the Company and associated financial transactions. The
errors affecting cost of product sold (exclusive of depreciation and
amortization) equate to approximately 0.8% of the Company’s cost of product sold
(exclusive of depreciation and amortization) for the year ended December 31,
2007.
The Audit
Committee and Company management have concluded that solely due to the effects
of the reporting errors described above, the Company’s previously issued annual
financial statements for the year ended December 31, 2007 included in its 2007
Form 10-K, the related report of its independent registered public accounting
firm and its interim financial statements for the quarter ended September 30,
2007 included in its Form 10-Q, should not be relied upon.
The
restated financial statements for the year ended December 31, 2007 will be
included in an amended Annual Report on Form 10-K. The Company
expects to file the amended Annual Report on Form 10-K prior to the filing of
its Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, which it
anticipates will be filed in a timely manner. The restated interim
financial statements for the quarter ended September 30, 2007 will be reflected
in the Company’s amended Annual Report on Form 10-K and included in the
Quarterly Report on Form 10-Q for the quarter ended September 30,
2008.
The
Company estimates that, for the year ended December 31, 2007, net loss will
increase by approximately $8-13 million. The Company estimates that
its net loss for the year, previously reported as $56.8 million, will increase
to approximately $65-70 million. This increase in net loss is the
result of an increase in cost of product sold of approximately $16-20 million,
with an associated increase in income tax benefit of approximately $7-9
million. The Company also estimates that inventories for the year
ended December 31, 2007 will increase by approximately $5-7 million and accounts
payable will increase by approximately $22-26 million. The
restatement will have no effect on the Company’s covenant compliance under its
debt facilities or its cash position as of December 31, 2007.
The
change in net income for the third quarter ended September 30, 2007 is estimated
to be approximately $1-4 million, comprised of an increase of approximately $7-8
million in cost of product sold and an increase in income tax benefit of
approximately $4-6 million. The Company estimates that its net income
for the quarter, previously reported as $13.4 million, will decrease to
approximately $9-12 million.
The
change in net income for the fourth quarter ended December 31, 2007 is estimated
to be approximately $7-10 million, comprised of an increase of approximately
$10-12 million in cost of product sold and an increase in income tax benefit of
approximately $2-3 million. The Company estimates that its net loss for the
quarter, previously reported as $15.9 million, will increase to approximately
$23-26 million.
The
Company’s net loss for the year ended December 31, 2007, which was one
consideration used to determine the materiality of the error, was significantly
impacted by a number of previously disclosed one-time or non-cash items,
including a pre-tax charge of $44.1 million for non-cash share-based
compensation, a one-time pre-tax expense of $10.0 million arising from the
termination of management agreements in conjunction with the Company’s initial
public offering, $41.5 million in pre-tax flood-related expenses, net of
insurance recoveries, and $103.2 million in pre-tax unrealized losses on the
cash flow swap. The Company’s earnings were also impacted by $76.4
million in pre-tax expenses recorded during 2007 as a result of a scheduled
turnaround at the refinery and significant downtime at the nitrogen fertilizer
plant and refinery due to the scheduled turnaround and the flood.
As a
result of this matter, the Company has begun implementation of certain changes
regarding crude oil accounting, including centralization of the related
accounting functions and improved oversight and review of those functions.
The Company is currently evaluating the effect of this matter on its disclosure
controls and procedures. Additional remedial measures may be
forthcoming.
The
expected effects of the restatement described above are based on currently
available information. Because the Company’s accounting review is
ongoing, the estimates included herein are subject to change until the review is
finished and the outside audit is completed.
The Audit
Committee and Company management have discussed the matters related to this
restatement with the Company’s independent registered public accounting firm,
KPMG LLP.
Forward-Looking
Statements
This
report contains forward-looking statements within the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. These include,
without limitation:
• statements,
other than statements of historical fact, that address activities, events or
developments that the Company expects, believes or anticipates will or may occur
in the future, including statements regarding expected materiality or
significance, the quantitative effects of the restatement, and any anticipated
conclusions of the Company, the Audit Committee or management; and
• any
other statements preceded by, followed by or that include the words
“anticipates,” “believes,” “expects,” “plans,” “intends,” “estimates,”
“projects,” “could,” “should,” “may,” or similar expressions.
Because these forward-looking
statements involve risks and uncertainties, there are important factors that
could cause our actual results, as well as our expectations regarding
materiality or significance, the restatement’s quantitative effects and the
effectiveness of our disclosure controls and procedures, to differ materially
from those described above. These factors include the risk that
additional information may arise from the evaluation of our disclosure controls
and procedures, the preparation of our restated financial statements or other
subsequent events that would require us to make additional adjustments, as well
as inherent limitations in disclosure controls and procedures. For a
discussion of a variety of risk factors affecting our business and prospects,
see “Item 1A — Risk Factors” in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2007.
Annual
Meeting of Stockholders
The
Company has postponed the Annual Meeting of Stockholders scheduled to be held at
10:00 a.m. on Wednesday, May 14, 2008. The Annual Meeting will be
rescheduled at a later date. The postponement is necessary in order to
provide the Company with time to prepare restated financial statements for the
year ended December 31, 2007 as described above in Item 4.02(a). The
Company will distribute an amended Annual Report on Form 10-K to stockholders
when it is available.
As soon
as practicable upon determining the date of the Annual Meeting, the Company will
provide additional information with respect to the Annual Meeting, including the
date, time and place of the rescheduled Annual Meeting, through definitive
additional proxy materials to be filed with the Securities and Exchange
Commission and distributed to stockholders.
|
Item
9.01.
|
Financial
Statements and Exhibits.
|
|
Exhibit
Number
|
Description
|
| |
|
| 99.1 |
Press
Release dated April 29, 2008
|
SIGNATURES
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.
Date: April
29, 2008
| |
CVR ENERGY,
INC. |
|
| |
|
|
|
|
|
By:
|
/s/ James
T. Rens |
|
| |
|
James
T. Rens |
|
| |
|
Chief
Financial Officer and Treasurer |
|
| |
|
|
|