2. Hyperion Strategic Finance
Introduction and Update
Will Kaffenberger, Director, Business Analytics
Suren Seshadri, Director, Software Development
Ray Mettetal III, Director of FP&A, CVR Energy
September 29, 2014
Copyright © 2014, Oracle and/or its affiliates. All rights reserved. |

3. Program Agenda 1
Solution Overview & Demo Development Update and Roadmap Strategic Planning at CVR Energy 2 3

4. Strategic Financial Planning
Measure Financial Impact of Key Business Strategies
Corporate Development
Treasury
CFO
Finance
Speaker Notes:
Leading edge organizations are integrating strategic financial planning across groups with Strategic Financial Planning software like Hyperion Strategic Finance. This application provides out of the box support for complex financial modeling, in a packaged application that provides a common platform that can be leveraged across multiple departments. With integrated financial statements and purpose-built features, this application can be deployed quickly, can improve user productivity, and ensure accuracy and integrity of the financial models used across groups.
Long Range Planning
Internal Investment Decisions
Strategy Screening
Covenant/Ratio Analysis
Credit Ratings
Shareholder Policy
Mergers & Acquisitions
Valuation Analysis
Divestitures

5. How Effective is Your Strategic Planning Process?
CFO
Finance
Treasury
Corporate
Development
So, when we talk about the Strategic Plan, it is typically run through the CFO’s office by 3 key departments:
Corporate Finance : Responsible for running the long range plan
Treasury : Responsible for maintaining a strong balance sheet and ensuring that funding is available when needed
M&A (aka Corporate Development) : Looks for opportunities to acquire companies or assets from another company
Often, these departments will run their own set of spreadsheets, leading to inefficiencies in the process where each model might not be updated with the most recent scenarios from the other departments. We’ll get into more detail in later slides.

6. Challenges in Strategic Planning
CFOs Long for Growth But Hesitate to Invest
Finance chiefs are focused on growth, but they're holding back on making
the moves that actually drive sustained expansion, according to Ernst & Young.
Marielle Segarra
January 23, 2014 | CFO.com | US
OECD Admits It Flubbed Growth Forecasts
The Organization for Economic Cooperation and Development says it overestimated economic growth worldwide in the years following the financial crisis.
Vincent Ryan
February 11, 2014 | CFO.com | US
Source : EY Capital Confidence Barometer April 2014 | ey.com/ccb

7. Risks to Global Economic Growth
Source : McKinsey Global Survey results, Economic Conditions Snapshot, September 2014

8. Key Market Trends – April 2014
Executive Survey
Source : EY Capital Confidence Barometer April 2014 | ey.com/ccb

9. Key Market Trends – December 2013
Executive Survey
Source : EY Capital Confidence Barometer December 2013| ey.com/ccb

10. “A company will find great value in understanding the financial profile it would need in order to maintain a particular rating .”
Gurdip Dhami, How to Work With Credit Rating Agencies, Treasury & Risk, August 18, 2014
Tips :
Understand the key financial ratios that the agency uses and how the ratios impacted the rating decision
Model expected rating, current, and projected financial profile

11. Statistical Tools Improve Forecast Accuracy and Understand Plan Risk
Speaker Notes:
Once the driver relationships are created, time-series forecasting can be used to analyze historical trends in these drivers and more accurately predict future results, as well as best and worst case outcomes.
In addition, Monte Carlo simulations can be run on the plan to account for a range of possible outcomes and better assess the probabilities of success and failure for key decisions, as well as to establish a confidence level for hitting plan targets.
Calculate certainty of hitting plan targets
Understand the full range of outcomes and overall risk
Assign probability distributions to uncertain assumptions
Source : EY Capital Confidence Barometer April 2014 | ey.com/ccb

12. The HSF Customer Experience
…Develop strategies for retaining current customer base and to plan for continued growth in expanding markets….
…Run stress tests for a proposed budget and long term plan…
…Analysis of new product lines and acquisition targets….
...We successfully executed a sale of the unit after the market crashed, at the price we had established before the market crashed…
…Over the course of one month, over 1,200 scenarios were run to review ability to service debt, capital adequacy, and capital structure….
…Better understand the impact of raising debt and equity…

13. Reduce Scenario Analysis From Days to Hours
AVG. HOURS FOR FINANCIAL MODELING
The Hyperion Strategic Finance solution is designed to streamline the strategic planning process and eliminate the inefficiencies of spreadsheet models. Based on an April 2009 North American study, our customers have been able to reduce their financial modeling turnaround time from days to hours by implementing Hyperion Strategic Finance.

14. 40% Link Strategy with Budgets Source: Palladium Group Speaker Notes:
A recent survey from Palladium Group revealed that only 40% of organizations link their long-term business strategy with the annual financial budgets. This is critical to ensuring alignment across the organization and optimal use of resources.
But, companies face many challenges in trying to link strategy with budgets and monitoring progress along the way
Link Strategy with Budgets
Source: Palladium Group

15. Aligned Objectives Budget/ Strategic Operating Plan Plan
Rolling Forecast
Strategic
Plan
Budget/
Operating Plan
EnterprisePlanning
Allocate Strategic Targets to Broader Community of Departmental Managers
Build Individual Department Plans Aligned to Allocated Strategic Targets
Once Oracle’s World Class Planning system is deployed, all of these various departments, plans, and forecasts are now in alignment. This allows :
Strategic Targets to be communicated to a broader community of departmental managers, who can build their plans in a collaborative, driver-based environment aligned to the strategic targets.
Accurate forecasts to be created with the latest information and linked to the latest plans so that appropriate actions can be taken.
Perform Variance Analysis,
Analyze Historical Trends,
Update Plans

16. Oracle Hyperion Enterprise Planning Solutions
Predictive Modeling and Simulation
Strategic Financial Planning
Profitability and Cost Management
Specialized Modules
Workforce Planning
Capital Asset Planning
Project Financial Planning
Plan for Profitable Growth
Planning, Budgeting and Forecasting
Middleware
Database
Systems and Hardware

17. HOW – MUCH SAVINGS
Productive Hours Spent for Implementation
680
340
100
200
300
400
500
600
700
800
Hyperion Strategic Finance
Platform
Hours
Productive Hours Spent for Multi-Year Plan (per version)
114 40 20 60 80
100
120
Hyperion Strategic Finance
Platform
Hours
Excel & Multi-Year Scenario
Excel & Multi-Year Scenario
Implementation Savings – In dollars, application and installation costs totaled less than 77% of building a “multi-year” scenario in Hyperion Planning (which did not have all the functionality of Strategic Finance)
Each version created has approximately a $6,000 savings in labor hours. Considering, each of our five-year plans has had at least 5 versions, that is a savings of $30,000 per year (over the last 3 years).

18. Scorecard and Strategy Management
Thursday, October 2 11:30 AM
Strategy
Strategy Maps and Trees
Cause and Effect Maps
Contribution Wheel
Watchlists
Custom Visualizations
Scorecards
Supports all methods and custom methods
Collaboration
Initiatives
Threaded Discussions
Related Documents
Action Links and Agents
Speaker Notes:
Many types of visualizations to communicate the status of strategy and KPIs:
Strategy maps and trees – to organize objectives, sub-objectives and measures and easily view the status
Cause and effect maps – to understand the impact one KPI has on another, on an objective or on the overall organizational goals
Contribution wheel – to understand which pieces of the strategy and which KPIs have the most impact, and therefore deserve the most attention
Watchlists – to keep track of day-to-day KPIs to enable you to do your job better, or to watch/monitor initiatives as they progress
Custom visualizations – to resemble visualizations that currently exist within the organization for a level of comfort
Scorecards – can make use of any methodology (means of organization), existing or custom – or use no method at all. Scorecards are a tabular way to monitor the progress of strategy and/or KPIs
Initiatives - a method of documenting the intention to change (a project or other) and monitoring that change
Threaded discussions - documenting exchanges of information about a KPI or initiative or objective
Related documents - links to any on-line document that will suppliment information about any object (KPI, initative or objective) in the application
Action links and agents - enable an organization to watch for conditions 24 hours a day, 7 days a week, and then suggest appropriate actions based on those conditions
Oracle Confidential – Internal/Restricted/Highly Restricted

19. Program Agenda 1
Solution Overview & Demo Development Update and Roadmap Strategic Planning at CVR Energy 2 3

20. Oracle Hyperion Strategic Finance: What’s New & What’s Coming….
Past 18 months: Highlights
Strategic Finance release
SmartView Features
Depreciation Scheduler
Debt Scheduler
Actual/Deal Periods
Change Fiscal Year End
Entity Structures
Entity/Account Change Manager
Client Side Consolidation
Past 18 months: Highlights
Office bit Support
Batch import/export to ASO cubes
Automatic export to Essbase and HFM after consolidation
Performance improvements for Excel based Reports
Stabilization

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22. Oracle Hyperion Strategic Finance: What’s New & What’s Coming….
Next 12 months: Highlights
Flat file import/export – facilitate DRM integration
FDMEE integration for automated data loads to HSF
Crystal Ball integration in SmartView
Enhanced logging and error reporting
Distributed deployment support
Improved SmartView display performance for Accounts and Reports

23. Oracle Hyperion Strategic Finance: What’s New & What’s Coming….
Next 18 months: Highlights
Enterprise Readiness
Linux Deployment
Web User Interface
Unified Application Creation
Project Financial Planning Integration for Funding Analysis
Life Cycle Management for HSF
REST based Web Services
Next 18 months: Highlights
Product Features
Consolidation of Business cases with import and export
Hierarchical Accounts and Sub Accounts – Essbase/Planning like Accounts dimension tree
Monthly Depreciation Scheduler
Improved Consolidation performance – Multi-threaded Consolidation
Multiple Days Audit Transactions

24. Integrating the Long-Range Planning Process
CVR Energy
Bluestone – a Huron Consulting Group solution
Integrating the Long-Range Planning Process
September 29, 2014
Presented by:
Scott Leshinski Scott Song Ray Mettetal
Managing Director Director Director-FP&A
Huron Consulting Group Huron Consulting Group CVR Energy

25. Petroleum Refining and Nitrogen Fertilizer Manufacturing
About CVR Energy
Petroleum Refining and Nitrogen Fertilizer Manufacturing 
About CVR Energy
Headquartered in Sugar Land, Texas, CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in two limited partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy subsidiaries serve as the general partner and own a majority of the common units representing limited partner interests of CVR Refining and CVR Partners.
The CVR Energy portfolio of companies employs more than 1,200 employees and generated approximately $9 billion in net sales in CVR Energy’s common stock is listed for trading on the New York Stock Exchange under the symbol "CVI."  
Limited Partnerships
In 2007, CVR Energy formed CVR Partners, LP to own, operate and grow its nitrogen fertilizer business. CVR Partners completed its Initial Public Offering in April 2011 and trades on the New York Stock Exchange under the symbol "UAN." 
In 2012, CVR Energy formed another limited partnership, CVR Refining, LP, to own, operate and grow its petroleum refining and related logistics businesses. CVR Refining completed its Initial Public Offering in January 2013 and trades on the New York Stock Exchange under the symbol “CVRR.”
CVR Energy subsidiaries serve as the general partner and own a majority of the common units of both CVR Refining and CVR Partners.

26. About CVR Refining Petroleum Refining
Headquartered in Sugar Land, Texas, CVR Refining is an independent downstream energy limited partnership formed by CVR Energy, Inc., to own, operate and grow our refining and related logistics businesses.
Our petroleum business includes a complex full coking, medium-sour crude oil refinery with a rated capacity of 115,000 barrels per calendar day operated by Coffeyville Resources Refining & Marketing in Coffeyville, Kan., and a medium complexity crude oil refinery with a rated capacity of 70,000 barrels per calendar day operated by Wynnewood Refining Company in Wynnewood, Okla. CVR Refining's subsidiaries also operate approximately 336 miles of owned and leased pipelines, more than 150 crude oil transports, a network of strategically located crude oil gathering tank farms, and more than six million barrels of owned and leased crude oil storage capacity.
CVR Refining, LP is traded on the New York Stock Exchange under the ticker symbol “CVRR.” CVR Energy subsidiaries serve as the general partner of CVR Refining and own the majority of the common units representing limited partner interests of CVR Refining.

27. Nitrogen Fertilizer Manufacturing
About CVR Partners
Nitrogen Fertilizer Manufacturing
Headquartered in Sugar Land, TX,CVR Partners is a growth-oriented limited partnership formed by CVR Energy, Inc. to own, operate and grow our nitrogen fertilizer business. Our nitrogen fertilizer manufacturing facility, which produces ammonia and urea ammonium nitrate (UAN) fertilizers, is located in Coffeyville, Kan. Coffeyville Resources Nitrogen Fertilizers, LLC is a wholly-owned subsidiary of CVR Partners, and directly owns and operates the CVR Partners nitrogen fertilizer plant.
The CVR Partners nitrogen fertilizer plant is the only such operation in North America that uses a petroleum coke gasification process to make hydrogen, a key ingredient in its manufacturing process, and produces about 5 percent of total UAN demand in the United States. In 2013, Coffeyville Resources Nitrogen Fertilizers produced 402,000 tons of ammonia, of which 37,900 net tons were available for sale, and also produced 930,600 tons of UAN.
CVR Partners, LP is traded on the New York Stock Exchange under the ticker symbol “UAN.” CVR Energy subsidiaries serve as the general partner of CVR Partners and own a majority of the common units representing limited partner interests of CVR Partners.

28. CVR Energy - History Why EPM was needed… Timeline of Major Events
1906 – The Coffeyville refinery began operations; the fertilizer plant was built
March 3, Both assets were acquired by Coffeyville Resources through bankruptcy court from Farmland Industries
June 24, Coffeyville was purchased by funds of Kelso & Company, L.P. (subsidiary of Goldman Sachs & Co.)
October 26, 2007, CVR Energy consummated its IPO
February and May of 2011, Kelso and Goldman completely sold their ownership interest
April 13, 2011, CVR Partners, LP completed it’s IPO
December 15, 2011, CVR Energy acquired a 70,000 bpd refinery in Wynnewood, Oklahoma
April 18, 2012, CVR Energy entered into a transaction agreement with IEP
May 2012, IEP acquired 82% of the common stock of CVR Energy
January 23, 2013, CVR Refining, LP completed it’s IPO
Summary of Major Events
3 separate IPO’s
2 different private equity owners
1 major acquisition
CVR Energy 2009 Full Year Adjusted EBITDA $206.8 million
CVR Energy 2012 Full Year Adjusted EBITDA $1,264.5 million
Growth and multiple transactions led the need for an EPM suite and Hyperion was purchased in December 2012

29. CVR Energy – Hyperion Implementation
Phased Approach
Phase I – Kicked off April 2013
Phase I Mantra – “replicate current state”
Shorten close cycle
Acquisition readiness
Improve reporting
Reduce dependency on Excel
Crawl, walk, run
April 2013
Aug
Sept
Nov
August 2014
Hyperion Kickoff
HP OpEx/SG&A
Workforce Planning
Hyperion Strategic Finance (HSF)
Centralized Essbase Cube
Data Relationship Manager (DRM)

30. CVR Energy – Hyperion Implementation
Phased Approach
Phase I+
Driven by a general ledger optimization project
Oracle EBS General Ledger String was improved
All Hyperion Applications needed to be updated due to the change in account structure
Great opportunity to improve reporting within Hyperion Essbase and go beyond “current state” with the powerful EPM suite that had been implemented
Phase II
This is what’s next
Time for an even better and more powerful state

31. Existing Pain Points – Current Forecasting State
Understanding the needs of the business
Forecasting and the refining business
Driven by volatile commodity prices
Prices can move quickly and unexpectedly in unforeseen directions
Changes in prices have material impacts on expected earnings
Plant operations can be interrupted due to unplanned down time
Plants go down, sometimes a partial shut down, sometimes it isn't known how long a plant will be down until engineers dig into the process units
To meet management expectations
Forecast must be updated frequently and scenarios stored
As prices move, the forecast model needs to be flexed
As changes in unexpected downtime assumptions are updated, forecast model needs to be flexed
Very difficult to integrate actual statistical and financial data with forecasted data using excel
Variance of scenarios becomes key
Difficult to maintain all of the scenarios and the assumptions used in excel
Difficult to compare assumptions used in the various scenarios in excel
Difficult to “trust” excel and the multitude of spreadsheets

32. Understanding the needs of the business
Solutions Developed
Understanding the needs of the business
Hyperion Strategic Finance, Hyperion Planning, and Hyperion Essbase
Hyperion Strategic Finance – brains of the operation
HSF contains the complex logic to calculate sales and cost of sales for the refining business
HSF calculates the forecasted balance sheet and cash flow
HSF calculates the variety of scenarios required by management
Hyperion Planning
HP is used to update operating, SG&A, and a few other select items
HP is used to calculate the sales and cost of sales of the simpler nitrogen business
HP is used to marry the data from HP and HSF and contains a few reports used for a first pass review
Hyperion Essbase
Essbase is used to tie everything together
Houses up to six different versions within a given scenario
Combines actuals and forecast with ease
Stores all scenarios that can be called up and analyzed against other scenarios in very short order
Requires strong collaboration among all parties involved

33. Benefits Achieved Improving the Process
Structured process allows for weekly Flash update instead of just monthly
Automated vs. manual reporting
Centralized environment; data readiness allows for deeper analytics
Integrated financials and operating statistics paired with driver-based forecasting
Standardization of metadata leading to improved variance analysis and cross functional communication

34. Understanding the needs of the business
Current Architecture
Understanding the needs of the business
Sales and COGS
Balance Sheet
Cash Flow
Hyperion Strategic Finance
Hyperion Financial Management
Hyperion Planning
Hyperion Essbase
Input Operating Expenses
Input SG&A
Input Fertilizer Model
Actuals
Budget
Flash
Actuals

35. Changing the flow of data
Phase II HSF
Changing the flow of data
Specialized Reporting Cube
Smartview / FR
Direct integration with HSF
Auto-export to EB upon check-in and consolidation
Ability to consume data across all EB users
Slice and dice information / adhoc reporting
Hyperion Essbase
For HSF
Playground for Strategic Analysis
Flex prices, business combinations
Flex changes in working capital
Flex changes due to secondaries
Flex changes due to crude rates
Scenario Modeling
M&A Modeling
Capital Structure and Value Analysis
Hyperion Strategic Finance
Hyperion Essbase
Actual
Budget
Flash
Smartview / FR
Hyperion Financial Management
Hyperion Planning
Self contained detail for flash and budget
Actuals

36. Playground for strategic analysis
Goals of HSF Phase II
Playground for strategic analysis
Change the flow of data
Hyperion Strategic Finance – brains of the operation
Scenario Analysis
Layer Multiple Scenarios
High-level, but accurate and important drivers
Data will flow into HSF where it can be flexed and analyzed
M&A Modeling
Capital Structure Analysis
Strategic Plan
Hyperion Planning
HP is used to handle the nuts and bolts of the detail forecast and budget
Hyperion Essbase
Existing Essbase is used to tie everything together
HSF Essbase will be used to report on the special scenarios and analysis

37. Be flexible, anticipate change
Lessons Learned
Be flexible, anticipate change
People and knowledge
There are many people who understand Hyperion Planning and Hyperion Essbase
There are not as many people who understand Hyperion Strategic Finance
Typically, the people who understand HSF also understand Planning and Essbase
It is important to understand all three when designing a system
Training upfront pays dividends in the future
Data
It takes time and effort to validate data
It takes patience and team work to validate data
It takes more work than anticipated
Time
Keeping current processes going while creating new processes and developing a system takes time
Remember that one day it will work for you instead of you working for it

38. Please Join Us!
Date: Monday, September 29th
Time: 6:30 – 9:30pm
Location:
B Restaurant & Bar
720 Howard St.
San Francisco, CA 94103

39. Contact Info
Ray Mettetal III, CPA
Director of FP&A, CVR Energy
Houston, Texas I USA
Mobile
Scott Leshinski
Managing Director, Huron Consulting Group
Chicago, Illinois I USA
Mobile
Scott Song
Director, Huron Consulting Group
Chicago, Illinois I USA
Mobile