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Share Name | Share Symbol | Market | Type |
---|---|---|---|
CVR Partners LP | NYSE:UAN | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
1.36 | 1.71% | 80.75 | 81.23 | 78.56 | 79.25 | 27,668 | 01:00:00 |
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(Mark One)
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þ
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QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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|
For the quarterly period ended September 30, 2018
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OR
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¨
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TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the transition period from
to
.
|
Delaware
|
56-2677689
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
2277 Plaza Drive, Suite 500
|
|
Sugar Land, Texas
(Address of principal executive offices)
|
77479
(Zip Code)
|
Large accelerated filer
o
|
Accelerated filer
þ
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
Emerging growth company
o
|
|
|
|
|
Page No.
|
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||
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||
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||
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||
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||
|
|
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|
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|
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|
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(In thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
61,441
|
|
|
$
|
49,173
|
|
Accounts receivable, net of allowance for doubtful accounts
|
20,564
|
|
|
9,855
|
|
||
Inventories
|
56,905
|
|
|
54,097
|
|
||
Prepaid expenses and other current assets
|
4,817
|
|
|
5,793
|
|
||
Total current assets
|
143,727
|
|
|
118,918
|
|
||
Property, plant, and equipment, net of accumulated depreciation
|
1,029,402
|
|
|
1,069,526
|
|
||
Goodwill
|
40,969
|
|
|
40,969
|
|
||
Other long-term assets
|
4,414
|
|
|
4,863
|
|
||
Total assets
|
$
|
1,218,512
|
|
|
$
|
1,234,276
|
|
LIABILITIES AND PARTNERS’ CAPITAL
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
20,019
|
|
|
$
|
21,295
|
|
Accounts payable to Affiliates
|
2,170
|
|
|
2,223
|
|
||
Accrued expenses and other current liabilities
|
64,015
|
|
|
32,577
|
|
||
Total current liabilities
|
86,204
|
|
|
56,095
|
|
||
Long-term liabilities:
|
|
|
|
||||
Long-term debt, net of current portion
|
628,192
|
|
|
625,904
|
|
||
Other long-term liabilities
|
2,919
|
|
|
2,424
|
|
||
Total long-term liabilities
|
631,111
|
|
|
628,328
|
|
||
Commitments and contingencies (see Note 9)
|
|
|
|
|
|
||
Partners’ capital
|
501,197
|
|
|
549,853
|
|
||
Total liabilities and partners’ capital
|
$
|
1,218,512
|
|
|
$
|
1,234,276
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands, except per unit data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net sales
|
$
|
79,909
|
|
|
$
|
69,393
|
|
|
$
|
252,965
|
|
|
$
|
252,610
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of materials and other
|
19,590
|
|
|
19,495
|
|
|
61,198
|
|
|
63,373
|
|
||||
Direct operating expenses (exclusive of depreciation and amortization)
|
35,334
|
|
|
40,249
|
|
|
121,468
|
|
|
113,941
|
|
||||
Depreciation and amortization
|
16,035
|
|
|
19,483
|
|
|
52,866
|
|
|
54,877
|
|
||||
Cost of sales
|
70,959
|
|
|
79,227
|
|
|
235,532
|
|
|
232,191
|
|
||||
Selling, general and administrative expenses
|
6,393
|
|
|
6,083
|
|
|
18,955
|
|
|
18,750
|
|
||||
Loss on asset disposals
|
28
|
|
|
19
|
|
|
160
|
|
|
58
|
|
||||
Operating income (loss)
|
2,529
|
|
|
(15,936
|
)
|
|
(1,682
|
)
|
|
1,611
|
|
||||
Interest expense, net
|
(15,693
|
)
|
|
(15,723
|
)
|
|
(47,080
|
)
|
|
(47,111
|
)
|
||||
Other income, net
|
30
|
|
|
22
|
|
|
100
|
|
|
81
|
|
||||
Loss before income tax
|
(13,134
|
)
|
|
(31,637
|
)
|
|
(48,662
|
)
|
|
(45,419
|
)
|
||||
Income tax expense (benefit)
|
12
|
|
|
(35
|
)
|
|
(6
|
)
|
|
(36
|
)
|
||||
Net loss
|
$
|
(13,146
|
)
|
|
$
|
(31,602
|
)
|
|
$
|
(48,656
|
)
|
|
$
|
(45,383
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per common unit — basic and diluted
|
$
|
(0.12
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.40
|
)
|
Weighted-average common units outstanding — basic and diluted
|
113,283
|
|
|
113,283
|
|
|
113,283
|
|
|
113,283
|
|
|
Nine Months Ended September 30,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(48,656
|
)
|
|
$
|
(45,383
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
52,866
|
|
|
54,877
|
|
||
Share-based compensation
|
2,695
|
|
|
1,748
|
|
||
Other non-cash items
|
2,640
|
|
|
2,314
|
|
||
Change in assets and liabilities:
|
|
|
|
||||
Current assets and liabilities
|
16,490
|
|
|
14,272
|
|
||
Non-current assets and liabilities
|
1,083
|
|
|
276
|
|
||
Net cash provided by operating activities
|
27,118
|
|
|
28,104
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(15,022
|
)
|
|
(11,456
|
)
|
||
Proceeds from sale of assets
|
172
|
|
|
—
|
|
||
Net cash used in investing activities
|
(14,850
|
)
|
|
(11,456
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Cash distributions to common unitholders – Affiliates
|
—
|
|
|
(778
|
)
|
||
Cash distributions to common unitholders – Non-affiliates
|
—
|
|
|
(1,488
|
)
|
||
Net cash used in financing activities
|
—
|
|
|
(2,266
|
)
|
||
Net increase in cash and cash equivalents
|
12,268
|
|
|
14,382
|
|
||
Cash and cash equivalents, beginning of period
|
49,173
|
|
|
55,595
|
|
||
Cash and cash equivalents, end of period
|
$
|
61,441
|
|
|
$
|
69,977
|
|
|
September 30, 2018
|
||||||||||
(In thousands)
|
As Reported
|
|
Balances without adoption of ASC 606
|
|
Effect of Change
|
||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable
|
$
|
20,564
|
|
|
$
|
13,791
|
|
|
$
|
6,773
|
|
Liabilities
|
|
|
|
|
|
||||||
Deferred revenue
|
$
|
31,611
|
|
|
$
|
24,838
|
|
|
$
|
6,773
|
|
(In thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Raw materials and precious metals
|
$
|
5,362
|
|
|
$
|
6,333
|
|
Finished goods
|
19,911
|
|
|
13,594
|
|
||
Parts and supplies
|
31,632
|
|
|
34,170
|
|
||
Total inventories
|
$
|
56,905
|
|
|
$
|
54,097
|
|
(In thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Land and improvements
|
$
|
13,092
|
|
|
$
|
13,092
|
|
Buildings and improvements
|
16,707
|
|
|
16,990
|
|
||
Machinery and equipment
|
1,362,014
|
|
|
1,352,573
|
|
||
Other
|
31,411
|
|
|
28,101
|
|
||
|
1,423,224
|
|
|
1,410,756
|
|
||
Less: Accumulated depreciation
|
393,822
|
|
|
341,230
|
|
||
Total property, plant and equipment, net
|
$
|
1,029,402
|
|
|
$
|
1,069,526
|
|
(In thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Deferred revenue
|
$
|
31,611
|
|
|
$
|
12,895
|
|
Share-based compensation
|
3,077
|
|
|
3,928
|
|
||
Personnel accruals
|
6,520
|
|
|
7,533
|
|
||
Accrued interest
|
17,635
|
|
|
2,683
|
|
||
Other accrued expenses and liabilities
|
5,172
|
|
|
5,538
|
|
||
Total accrued expenses and other current liabilities
|
$
|
64,015
|
|
|
$
|
32,577
|
|
Debt Balance, Net of Current Maturities and Unamortized Discount and Issuance Costs
|
|
|
|
||||
(In thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
9.250% senior secured notes, due 2023
|
$
|
645,000
|
|
|
$
|
645,000
|
|
6.500% notes, due 2021
|
2,240
|
|
|
2,240
|
|
||
Total long-term debt, before debt issuance costs and discount (a)
|
647,240
|
|
|
647,240
|
|
||
Less:
|
|
|
|
||||
Unamortized discount and debt issuance costs
|
19,048
|
|
|
21,336
|
|
||
Total long-term debt, net of current portion
|
$
|
628,192
|
|
|
$
|
625,904
|
|
|
(a)
|
The estimated fair value of total long-term debt outstanding was approximately
$683.7 million
and
$694.2 million
as of
September 30, 2018
and December 31, 2017, respectively.
|
Credit Facilities Outstanding
|
|
|
|
|
|
|
|
|
|
||||||||
(In thousands)
|
Total Capacity
|
|
Amount Borrowed as of September 30, 2018
|
|
Outstanding Letters of Credit
|
|
Available Capacity as of September 30, 2018
|
|
Maturity Date
|
||||||||
Asset based credit facility (b)
|
$
|
50,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50,000
|
|
|
September 30, 2021
|
|
(b)
|
At the option of the borrowers, loans under the asset based credit facility initially bear interest at an annual rate equal to (i)
2.00%
plus LIBOR or (ii)
1.00%
plus a base rate, subject to a
0.50%
step-down based on the previous quarter’s excess availability.
|
|
Nine Months Ended September 30,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Supplemental disclosures:
|
|
|
|
||||
Cash paid for interest
|
$
|
30,244
|
|
|
$
|
30,123
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Construction in process additions included in accounts payable
|
1,920
|
|
|
608
|
|
||
Change in accounts payable related to construction in process additions
|
1,032
|
|
|
(3,263
|
)
|
(In thousands)
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||
Ammonia
|
$
|
11,391
|
|
|
$
|
51,361
|
|
UAN
|
52,681
|
|
|
156,838
|
|
||
Urea products
|
4,987
|
|
|
14,834
|
|
||
Fertilizer sales, exclusive of freight
|
69,059
|
|
|
223,033
|
|
||
Freight revenue
|
8,805
|
|
|
23,908
|
|
||
Other revenue
|
2,045
|
|
|
6,024
|
|
||
Total net sales
|
$
|
79,909
|
|
|
$
|
252,965
|
|
(In thousands)
|
Nine Months Ended September 30, 2018
|
||
Balance at January 1, 2018
|
$
|
34,270
|
|
Add:
|
|
||
New prepay contracts entered into during the period
|
35,665
|
|
|
Less:
|
|
||
Revenue recognized that was included in the contract liability balance at the beginning of the period
|
33,761
|
|
|
Revenue recognized related to contracts entered into during the period
|
4,321
|
|
|
Other changes
|
242
|
|
|
Balance at September 30, 2018
|
$
|
31,611
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Phantom Units
|
$
|
710
|
|
|
$
|
268
|
|
|
$
|
1,663
|
|
|
$
|
684
|
|
Other Awards (a)
|
486
|
|
|
367
|
|
|
1,032
|
|
|
1,064
|
|
||||
Total Share-Based Compensation Expense
|
$
|
1,196
|
|
|
$
|
635
|
|
|
$
|
2,695
|
|
|
$
|
1,748
|
|
|
(a)
|
Other awards include the allocation of compensation expense for certain employees of CVR Energy who perform services for the Partnership under the services agreement with CVR Energy and participate in equity compensation plans of CVR Partners’ affiliates.
|
Expenses from related parties
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
Related Party
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cost of materials and other
|
|
|
|
|
|
|
|
|
|
||||||||
Coke Supply Agreement
|
CRRM (a)
|
|
$
|
1,057
|
|
|
$
|
586
|
|
|
$
|
2,133
|
|
|
$
|
1,566
|
|
Hydrogen Purchase and Sale Agreement
|
CRRM
|
|
1,072
|
|
|
933
|
|
|
3,157
|
|
|
3,042
|
|
||||
Railcar Lease Agreements
|
ARI (b)
|
|
361
|
|
|
236
|
|
|
1,082
|
|
|
683
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Direct operating expenses (exclusive of depreciation and amortization)
|
|
|
|
|
|
|
|
|
|
||||||||
Services Agreement
|
CVR Energy
|
|
$
|
761
|
|
|
$
|
766
|
|
|
$
|
2,145
|
|
|
$
|
2,158
|
|
Limited Partnership Agreement
|
CVR GP
|
|
242
|
|
|
127
|
|
|
572
|
|
|
428
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Services Agreement
|
CVR Energy
|
|
$
|
3,595
|
|
|
$
|
3,239
|
|
|
$
|
10,353
|
|
|
$
|
9,398
|
|
Limited Partnership Agreement
|
CVR GP
|
|
626
|
|
|
677
|
|
|
1,920
|
|
|
2,001
|
|
|
(a)
|
Coffeyville Resources Refining & Marketing, LLC, a subsidiary of CVR Refining
|
(b)
|
ARI Leasing, LLC, a company controlled by IEP
|
Amounts due to related parties
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
(In thousands)
|
Related Party
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Accounts payable
|
|
|
|
|
|
||||
Feedstock and Shared Services Agreement
|
CRRM
|
|
$
|
747
|
|
|
$
|
1,020
|
|
Hydrogen Purchase and Sale Agreement
|
CRRM
|
|
313
|
|
|
324
|
|
||
Limited Partnership Agreement:
|
CVR GP
|
|
955
|
|
|
771
|
|
||
|
|
|
|
|
|
||||
Accrued expenses and other current liabilities
|
|
|
|
|
|
||||
Limited Partnership Agreement
|
CVR GP
|
|
$
|
1,346
|
|
|
$
|
1,521
|
|
Services Agreement
|
CVR Energy
|
|
2,497
|
|
|
3,221
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
79,909
|
|
|
$
|
69,393
|
|
|
$
|
252,965
|
|
|
$
|
252,610
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of materials and other
|
19,590
|
|
|
19,495
|
|
|
61,198
|
|
|
63,373
|
|
||||
Direct operating expenses (exclusive of depreciation and amortization)
|
35,334
|
|
|
40,249
|
|
|
121,468
|
|
|
113,941
|
|
||||
Depreciation and amortization
|
16,035
|
|
|
19,483
|
|
|
52,866
|
|
|
54,877
|
|
||||
Cost of sales
|
70,959
|
|
|
79,227
|
|
|
235,532
|
|
|
232,191
|
|
||||
Selling, general and administrative expenses
|
6,393
|
|
|
6,083
|
|
|
18,955
|
|
|
18,750
|
|
||||
Loss on asset disposals
|
28
|
|
|
19
|
|
|
160
|
|
|
58
|
|
||||
Operating income (loss)
|
2,529
|
|
|
(15,936
|
)
|
|
(1,682
|
)
|
|
1,611
|
|
||||
Interest expense, net
|
(15,693
|
)
|
|
(15,723
|
)
|
|
(47,080
|
)
|
|
(47,111
|
)
|
||||
Other income, net
|
30
|
|
|
22
|
|
|
100
|
|
|
81
|
|
||||
Loss before income tax
|
(13,134
|
)
|
|
(31,637
|
)
|
|
(48,662
|
)
|
|
(45,419
|
)
|
||||
Income tax expense (benefit)
|
12
|
|
|
(35
|
)
|
|
(6
|
)
|
|
(36
|
)
|
||||
Net loss
|
$
|
(13,146
|
)
|
|
$
|
(31,602
|
)
|
|
$
|
(48,656
|
)
|
|
$
|
(45,383
|
)
|
|
|
|
|
|
|
|
|
||||||||
EBITDA (1)
|
$
|
18,594
|
|
|
$
|
3,569
|
|
|
$
|
51,284
|
|
|
$
|
56,569
|
|
Adjusted EBITDA (1)
|
$
|
18,594
|
|
|
$
|
5,005
|
|
|
$
|
57,689
|
|
|
$
|
58,094
|
|
Available cash for distribution (1)
|
$
|
(130
|
)
|
|
$
|
(1,252
|
)
|
|
$
|
(4,274
|
)
|
|
$
|
557
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation to net sales:
|
|
|
|
|
|
|
|
||||||||
Fertilizer sales, exclusive of freight
|
$
|
69,059
|
|
|
$
|
59,422
|
|
|
$
|
223,033
|
|
|
$
|
223,002
|
|
Freight in revenue
|
8,805
|
|
|
8,313
|
|
|
23,908
|
|
|
23,638
|
|
||||
Other
|
2,045
|
|
|
1,658
|
|
|
6,024
|
|
|
5,970
|
|
||||
Total net sales
|
$
|
79,909
|
|
|
$
|
69,393
|
|
|
$
|
252,965
|
|
|
$
|
252,610
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Key Operating Statistics:
|
|
|
|
|
|
|
|
||||||||
Consolidated sales (thousand tons):
|
|
|
|
|
|
|
|
||||||||
Ammonia
|
38
|
|
|
65
|
|
|
156
|
|
|
202
|
|
||||
UAN
|
310
|
|
|
299
|
|
|
925
|
|
|
952
|
|
||||
Consolidated product pricing at gate (dollars per ton) (1):
|
|
|
|
|
|
|
|
||||||||
Ammonia
|
$
|
297
|
|
|
$
|
214
|
|
|
$
|
329
|
|
|
$
|
287
|
|
UAN
|
$
|
170
|
|
|
$
|
138
|
|
|
$
|
169
|
|
|
$
|
158
|
|
Consolidated production volume (thousand tons):
|
|
|
|
|
|
|
|
||||||||
Ammonia (gross produced) (2)
|
212
|
|
|
181
|
|
|
584
|
|
|
615
|
|
||||
Ammonia (net available for sale) (2)
|
63
|
|
|
46
|
|
|
187
|
|
|
204
|
|
||||
UAN
|
338
|
|
|
307
|
|
|
919
|
|
|
962
|
|
||||
Feedstock:
|
|
|
|
|
|
|
|
||||||||
Petroleum coke used in production (thousand tons)
|
117
|
|
|
114
|
|
|
325
|
|
|
371
|
|
||||
Petroleum coke used in production (dollars per ton)
|
$
|
26
|
|
|
$
|
18
|
|
|
$
|
23
|
|
|
$
|
18
|
|
Natural gas used in production (thousands of MMBtu) (3)(4)
|
2,118
|
|
|
1,555
|
|
|
5,933
|
|
|
5,781
|
|
||||
Natural gas used in production (dollars per MMBtu) (3)(4)
|
$
|
3.03
|
|
|
$
|
3.12
|
|
|
$
|
3.01
|
|
|
$
|
3.25
|
|
Natural gas in cost of materials and other (thousands of MMBtu) (3)
|
1,439
|
|
|
1,935
|
|
|
5,268
|
|
|
5,898
|
|
||||
Natural gas in cost of materials and other (dollars per MMBtu) (3)
|
$
|
2.98
|
|
|
$
|
3.15
|
|
|
$
|
3.03
|
|
|
$
|
3.30
|
|
Coffeyville Facility on-stream factors (4):
|
|
|
|
|
|
|
|
||||||||
Gasification
|
100
|
%
|
|
96
|
%
|
|
91
|
%
|
|
98
|
%
|
||||
Ammonia
|
100
|
%
|
|
94
|
%
|
|
90
|
%
|
|
97
|
%
|
||||
UAN
|
97
|
%
|
|
94
|
%
|
|
88
|
%
|
|
93
|
%
|
||||
East Dubuque Facility on-stream factors (4):
|
|
|
|
|
|
|
|
||||||||
Ammonia
|
99
|
%
|
|
76
|
%
|
|
93
|
%
|
|
92
|
%
|
||||
UAN
|
98
|
%
|
|
77
|
%
|
|
93
|
%
|
|
92
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Market Indicators:
|
|
|
|
|
|
|
|
||||||||
Ammonia - Southern plains (dollars per ton)
|
$
|
337
|
|
|
$
|
238
|
|
|
$
|
354
|
|
|
$
|
314
|
|
Ammonia - Corn belt (dollars per ton)
|
$
|
398
|
|
|
$
|
303
|
|
|
$
|
407
|
|
|
$
|
364
|
|
UAN - Corn belt (dollars per ton)
|
$
|
203
|
|
|
$
|
165
|
|
|
$
|
208
|
|
|
$
|
192
|
|
Natural gas - NYMEX (dollars per MMBtu)
|
$
|
2.87
|
|
|
$
|
2.95
|
|
|
$
|
2.85
|
|
|
$
|
3.05
|
|
(1)
|
Product pricing at gate (also referred to as “netback”) represents net sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry.
|
(2)
|
Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represent ammonia available for sale that was not upgraded into other fertilizer products.
|
(3)
|
The feedstock natural gas shown above does not include natural gas used for fuel. The cost of fuel natural gas is included in direct operating expenses (exclusive of depreciation and amortization).
|
(4)
|
On-stream factor is the total number of hours operated divided by the total number of hours in the reporting period and is included as a measure of operating efficiency.
|
(In thousands)
|
Price
Variance
|
|
Volume
Variance
|
||||
UAN
|
$
|
10,229
|
|
|
$
|
1,835
|
|
Ammonia
|
$
|
3,292
|
|
|
$
|
(6,131
|
)
|
(In thousands)
|
Price
Variance
|
|
Volume
Variance
|
||||
UAN
|
$
|
12,029
|
|
|
$
|
(4,725
|
)
|
Ammonia
|
$
|
6,865
|
|
|
$
|
(13,687
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net loss
|
$
|
(13,146
|
)
|
|
$
|
(31,602
|
)
|
|
$
|
(48,656
|
)
|
|
$
|
(45,383
|
)
|
Add:
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
15,693
|
|
|
15,723
|
|
|
47,080
|
|
|
47,111
|
|
||||
Income tax expense (benefit)
|
12
|
|
|
(35
|
)
|
|
(6
|
)
|
|
(36
|
)
|
||||
Depreciation and amortization
|
16,035
|
|
|
19,483
|
|
|
52,866
|
|
|
54,877
|
|
||||
EBITDA
|
$
|
18,594
|
|
|
$
|
3,569
|
|
|
$
|
51,284
|
|
|
$
|
56,569
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Major scheduled turnaround expenses
|
$
|
—
|
|
|
$
|
2,497
|
|
|
$
|
6,405
|
|
|
$
|
2,586
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Insurance recovery - business interruption
|
—
|
|
|
(1,061
|
)
|
|
—
|
|
|
(1,061
|
)
|
||||
Adjusted EBITDA
|
$
|
18,594
|
|
|
$
|
5,005
|
|
|
$
|
57,689
|
|
|
$
|
58,094
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands, except per unit data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Adjusted EBITDA
|
$
|
18,594
|
|
|
$
|
5,005
|
|
|
$
|
57,689
|
|
|
$
|
58,094
|
|
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Net cash interest expense (excluding capitalized interest) and debt service
|
(14,873
|
)
|
|
(14,967
|
)
|
|
(44,664
|
)
|
|
(44,882
|
)
|
||||
Maintenance capital expenditures
|
(4,526
|
)
|
|
(2,716
|
)
|
|
(10,894
|
)
|
|
(11,130
|
)
|
||||
Major scheduled turnaround expenses
|
—
|
|
|
(2,497
|
)
|
|
(6,405
|
)
|
|
(2,586
|
)
|
||||
Add:
|
|
|
|
|
|
|
|
||||||||
Insurance recovery - business interruption
|
—
|
|
|
1,061
|
|
|
—
|
|
|
1,061
|
|
||||
Release of previously established cash reserves, net
|
675
|
|
|
12,862
|
|
|
—
|
|
|
—
|
|
||||
Available cash for distribution
|
$
|
(130
|
)
|
|
$
|
(1,252
|
)
|
|
$
|
(4,274
|
)
|
|
$
|
557
|
|
Distribution declared, per common unit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.02
|
|
Common units outstanding
|
113,283
|
|
|
113,283
|
|
|
113,283
|
|
|
113,283
|
|
|
Nine Months Ended September 30,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Net cash flow provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
27,118
|
|
|
$
|
28,104
|
|
Investing activities
|
(14,850
|
)
|
|
(11,456
|
)
|
||
Financing activities
|
—
|
|
|
(2,266
|
)
|
||
Net increase in cash and cash equivalents
|
$
|
12,268
|
|
|
$
|
14,382
|
|
•
|
statements, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future;
|
•
|
statements relating to future financial or operational performance, future distributions, future capital sources and capital expenditures; 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.
|
•
|
our ability to make cash distributions on the common units;
|
•
|
the volatile nature of our business and the variable nature of our distributions;
|
•
|
the ability of our general partner to modify or revoke our distribution policy at any time;
|
•
|
the cyclical nature of our business;
|
•
|
the seasonal nature of our business;
|
•
|
the dependence of our operations on a few third-party suppliers, including providers of transportation services and equipment;
|
•
|
our reliance on pet coke that we purchase from CVR Refining;
|
•
|
our reliance on the natural gas, electricity, oxygen, nitrogen and compressed dry air that we purchase from third parties;
|
•
|
the supply and price levels of essential raw materials;
|
•
|
the risk of a material decline in production at our nitrogen fertilizer plants;
|
•
|
accidents or other unscheduled shutdowns or distributions affecting our facilities, machinery, or equipment, or those of our suppliers or customers;
|
•
|
potential operating hazards from accidents, fire, severe weather, tornadoes, floods or other natural disasters;
|
•
|
our ability to obtain or renew permits to operating our business.;
|
•
|
competition in the nitrogen fertilizer businesses;
|
•
|
capital expenditures and potential liabilities arising from environmental laws and regulations;
|
•
|
existing and proposed laws, rulings and regulations, including but not limited to those relating to climate change, alternative energy or fuel sources, and the end-use and application of fertilizers;
|
•
|
new regulations concerning the transportation of hazardous chemicals, risks of terrorism, the security of chemical manufacturing facilities and other matters beyond our control;
|
•
|
the risk of security breaches;
|
•
|
our lack of asset diversification;
|
•
|
our dependence on significant customers and the creditworthiness and performance by counterparties;
|
•
|
the potential loss of our transportation cost advantage over our competitors;
|
•
|
our partial dependence on customer and distributor transportation of purchased goods;
|
•
|
our potential inability to successfully implement our business strategies, including the completion of significant capital programs;
|
•
|
our reliance on CVR Energy’s senior management team and conflicts of interest they face operating each of CVR Partners, CVR Refining and CVR Energy;
|
•
|
the risk of labor disputes and adverse employee relations;
|
•
|
risks relating to our relationships with CVR Energy and CVR Refining;
|
•
|
control of our general partner by CVR Energy;
|
•
|
our ability to continue to license the technology used in our operations;
|
•
|
restrictions in our debt agreements;
|
•
|
changes in our treatment as a partnership for U.S. federal income or state tax purposes;
|
•
|
rulings, judgments or settlements in litigation, tax or other legal or regulatory matters;
|
•
|
instability and volatility in the capital and credit markets;
|
•
|
competition with CVR Energy and its affiliates; and
|
•
|
our ability to recover under our insurance policies for damages or losses in full or at all.
|
|
*
|
Filed herewith.
|
†
|
Furnished herewith.
|
|
|
CVR Partners, LP
|
|
|
|
|
|
|
|
By:
|
CVR GP, LLC, its general partner
|
|
|
|
|
October 25, 2018
|
|
By:
|
/s/ TRACY D. JACKSON
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
October 25, 2018
|
|
By:
|
/s/ MATTHEW W. BLEY
|
|
|
|
Chief Accounting Officer and Corporate Controller
|
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
1 Year CVR Partners Chart |
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