CVR Partners LP (UAN) 2014年年度報告「NYSE」.pdf

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1、UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_Form 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACTOF 1934 For the fiscal year ended December 31,2014ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGEACT OF 193

2、4 For the transition period from to .Commission file number:001-35120_CVR Partners,LP(Exact name of registrant as specified in its charter)Delaware(State or other jurisdiction ofincorporation or organization)56-2677689(I.R.S.EmployerIdentification No.)2277 Plaza Drive,Suite 500Sugar Land,Texas(Addre

3、ss of principal executive offices)77479(Zip Code)(281)207-3200(Registrants telephone number,including area code)_ Securities registered pursuant to Section 12(b)of the Act:Title of Each ClassName of each exchange on which registeredCommon units representing limited partner interestsNew York Stock Ex

4、change Securities registered pursuant to section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section

5、 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has b

6、een subject to such filing requirements for the past 90 days.Yes No.Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,if any,every Interactive Data File required to be submitted and posted pursuant to Rule 405 or Regulation S-T(232.405 of

7、 this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit and post such files).Yes No.Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K(229.405 of this chapter)is not contained herein,and will not

8、 be contained,to the best of registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerate

9、d filer,or a smaller reporting company.See the definitions of large accelerated filer,accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company (Do not check if a smaller reporting compa

10、ny)Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant computed based on the New York Stock Exchange closing price on June

11、30,2014(the last business day of the registrants second fiscal quarter)was$632,771,032.Common units held by each executive officer and director and by each entity or person that,to the registrants knowledge,owned 10%or more of the registrants outstanding common units as of June 30,2014 have been exc

12、luded from this number in that these persons may be deemed affiliates of the registrant.This determination of possible affiliate status is not necessarily a conclusive determination for other purposes.ClassOutstanding at February 17,2015Common unit representing limited partner interests73,122,997 un

13、itsTable of Contents1TABLE OF CONTENTS PagePART IItem 1.Business4Item 1A.Risk Factors12Item 1B.Unresolved Staff Comments35Item 2.Properties35Item 3.Legal Proceedings35Item 4.Mine Safety Disclosures35PART IIItem 5.Market For Registrants Common Equity,Related Unitholder Matters and Issuer Purchases of

14、 Equity Securities36Item 6.Selected Financial Data39Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations45Item 7A.Quantitative and Qualitative Disclosures About Market Risk67Item 8.Financial Statements and Supplementary Data68Item 9.Changes in and Disagreements

15、 With Accountants on Accounting and Financial Disclosure103Item 9A.Controls and Procedures103Item 9B.Other Information103PART IIIItem 10.Directors,Executive Officers and Corporate Governance104Item 11.Executive Compensation110Item 12.Security Ownership of Certain Beneficial Owners and Management and

16、 Related Unitholder Matters131Item 13.Certain Relationships and Related Transactions,and Director Independence133Item 14.Principal Accounting Fees and Services143PART IVItem 15.Exhibits,Financial Statement Schedules1442GLOSSARY OF SELECTED TERMSThe following are definitions of certain terms used in

17、this Annual Report on Form 10-K for the year ended December 31,2014(this Report).ammoniaAmmonia is a direct application fertilizer and is primarily used as a building block forother nitrogen products for industrial applications and finished fertilizer products.Blue JohnsonBlue,Johnson&Associates,Inc

18、.capacityCapacity is defined as the throughput a process unit is capable of sustaining,either ona calendar or stream day basis.The throughput may be expressed in terms ofmaximum sustainable,nameplate or economic capacity.The maximum sustainable ornameplate capacities may not be the most economical.T

19、he economic capacity is thethroughput that generally provides the greatest economic benefit based onconsiderations such as feedstock costs,product values and downstream unitconstraints.catalystA substance that alters,accelerates,or instigates chemical changes,but is neitherproduced,consumed nor alte

20、red in the process.Coffeyville Resourcesor CRLLCCoffeyville Resources,LLC,the subsidiary of CVR Energy which directly owns ourgeneral partner and 38,920,000 common units,or approximately 53%of our mon unitsCommon units representing limited partner interests of CVR Partners,LP.corn beltThe primary co

21、rn producing region of the United States,which includes Illinois,Indiana,Iowa,Minnesota,Missouri,Nebraska,Ohio and Wisconsin.CVR EnergyCVR Energy,Inc.,a publicly traded company listed on the New York Stock Exchangeunder the ticker symbol CVI,which indirectly owns our general partner and thecommon un

22、its owned by CRLLC.CVR RefiningCVR Refining,LP,a publicly traded limited partnership listed on the New York StockExchange under the ticker symbol CVRR,which currently owns and operates acomplex full coking medium-sour crude oil refinery with a rated capacity of 115,000barrels per calendar day(bpcd)i

23、n Coffeyville,Kansas,a complex crude oil refinerywith a rated capacity of 70,000 bpcd in Wynnewood,Oklahoma and ancillarybusinesses.ethanolA clear,colorless,flammable oxygenated hydrocarbon.Ethanol is typically producedchemically from ethylene,or biologically from fermentation of various sugars from

24、carbohydrates found in agricultural crops and cellulosic residues from crops or wood.It is used in the United States as a gasoline octane enhancer and oxygenate.farm beltRefers to the states of Illinois,Indiana,Iowa,Kansas,Minnesota,Missouri,Nebraska,North Dakota,Ohio,Oklahoma,South Dakota,Texas and

25、 Wisconsin.feedstocksPetroleum coke and petroleum products(such as crude oil and natural gas liquids)thatare processed and blended into refined products,such as gasoline,diesel fuel and jetfuel,which are produced by a refinery.general partnerCVR GP,LLC,our general partner,which is a wholly-owned sub

26、sidiary ofCoffeyville Resources.Initial Public OfferingThe initial public offering of CVR Partners,LP common units that closed on April 13,2011.MMbtuOne million British thermal units:a measure of energy.One Btu of heat is required toraise the temperature of one pound of water one degree Fahrenheit.M

27、SCFOne thousand standard cubic feet,a customary gas backNetback represents net sales less freight revenue divided by product sales volume intons.Netback is also referred to as product pricing at gate.NYSEThe New York Stock Exchange.Table of Contents3on-streamMeasurement of the reliability of the gas

28、ification,ammonia and UAN units,definedas the total number of hours operated by each unit divided by the total number ofhours in the reporting period.OSHAFederal Occupational Safety and Health Act.pet cokePetroleum coke a coal-like substance that is produced during the oil refiningprocess.prepaid sa

29、lesRepresents customer payments under contracts to guarantee a price and supply offertilizer in quantities expected to be delivered in the next twelve months.Revenue isnot recorded for such sales until the product is considered delivered.Prepaid sales arealso referred to as deferred revenue.product

30、pricing at gateProduct pricing at gate represents net sales less freight revenue divided by productsales volume in tons.Product pricing at gate is also referred to as netback.recordable incidentAn injury,as defined by OSHA.All work-related deaths and illnesses,and thosework-related injuries which re

31、sult in loss of consciousness,restriction of work ormotion,transfer to another job,or require medical treatment beyond first aid.Secondary OfferingThe registered public offering of 12,000,000 common units of CVR Partners,LP,byCRLLC,which closed on May 28,2013.slagA glasslike substance removed from t

32、he gasifier containing the metal impuritiesoriginally present in pet coke.slurryGround pet coke blended with water and a fluxant(a mixture of fly ash and sand).spot marketA market in which commodities are bought and sold for cash and deliveredimmediately.syngasSynthesized gas a mixture of gases(larg

33、ely carbon monoxide and hydrogen)thatresults from gasifying carbonaceous feedstock such as pet coke.throughputThe volume processed through a unit.tonOne ton is equal to 2,000 pounds.turnaroundA periodically required standard procedure to refurbish and maintain a facility thatinvolves the shutdown an

34、d inspection of major processing units.UANUAN is an aqueous solution of urea and ammonium nitrate used as a fertilizer.wheat beltThe primary wheat producing region of the United States,which includes Oklahoma,Kansas,North Dakota,South Dakota and Texas.Table of Contents4PART IItem 1.BusinessOverviewC

35、VR Partners,LP(CVR Partners,the Partnership,we,us,or our)is a Delaware limited partnership formed by CVR Energy to own,operate and grow our nitrogen fertilizer business.Strategically located adjacent to CVR Refinings refinery in Coffeyville,Kansas,our nitrogen fertilizer manufacturing facility is th

36、e only operation in North America that utilizes a petroleum coke,or pet coke,gasification process to produce nitrogen fertilizer.We produce and distribute nitrogen fertilizer products,which are used primarily by farmers to improve the yield and quality of their crops.Our principal products are UAN a

37、nd ammonia.These products are manufactured at our facility in Coffeyville,Kansas.Our product sales are heavily weighted toward UAN and all of our products are sold on a wholesale basis.Our facility includes a 1,225 ton-per-day ammonia unit,a 3,000 ton-per-day UAN unit and a gasifier complex having a

38、 capacity of 84 million standard cubic feet per day of hydrogen.Our gasifier is a dual-train facility,with each gasifier able to function independently of the other,thereby providing redundancy and improving our reliability.With the completion of the UAN expansion in February 2013,we now upgrade sub

39、stantially all of the ammonia we produce to higher margin UAN fertilizer,an aqueous solution of urea and ammonium nitrate which has historically commanded a premium price over ammonia.In 2014,we produced 963,715 tons of UAN and 388,923 tons of ammonia.Approximately 97%of our produced ammonia tons an

40、d the majority of the purchased ammonia were upgraded into UAN.We intend to continue to expand our existing asset base and utilize the experience of our and CVR Energys management teams to execute our growth strategy,which includes expanded production of UAN and acquiring and building additional inf

41、rastructure and production assets.A significant two-year plant expansion designed to increase our UAN production capacity by 400,000 tons per year,or approximately 50%,was completed in February 2013.Our expanded facility was operating at full rates at the end of the first quarter of 2013.CVR Energy,

42、which indirectly owns our general partner and approximately 53%of our outstanding common units,also indirectly owns the general partner and approximately 66%of the common units of CVR Refining at December 31,2014.CVR Refining owns and operates a complex full coking medium-sour crude oil refinery wit

43、h a rated capacity of 115,000 barrels per calendar day(bpcd)in Coffeyville,Kansas,a complex crude oil refinery with a rated capacity of 70,000 bpcd in Wynnewood,Oklahoma and ancillary businesses.We generated net sales of$298.7 million,$323.7 million and$302.3 million and net income of$76.1 million,$

44、118.6 million and$112.2 million for the years ended December 31,2014,2013 and 2012,respectively.The primary raw material feedstock utilized in our nitrogen fertilizer production process is pet coke,which is produced during the crude oil refining process.In contrast,substantially all of our nitrogen

45、fertilizer competitors use natural gas as their primary raw material feedstock.Historically,pet coke has been less expensive than natural gas on a per ton of fertilizer produced basis and pet coke prices have been more stable when compared to natural gas prices.By using pet coke as the primary raw m

46、aterial feedstock instead of natural gas,we believe our nitrogen fertilizer business has historically been one of the lower cost producers and marketers of UAN and ammonia fertilizers in North America.We currently purchase most of our pet coke from CVR Refining pursuant to a long-term agreement havi

47、ng an initial term that ends in 2027,subject to renewal.During the past five years,over 70%of the pet coke consumed by our plant was produced and supplied by CVR Refinings Coffeyville,Kansas crude oil refinery.Table of Contents5Organizational Structure and Related OwnershipThe following chart illust

48、rates the organizational structure of the Partnership as of the date of this Report.Table of Contents6Raw Material SupplyThe nitrogen fertilizer facilitys primary input is pet coke.Pet coke is produced as a byproduct of a refinerys coker unit process.In order to refine heavy or sour crude oil,which

49、are lower in cost and more prevalent than higher quality crude oil,refiners use coker units,which enables refiners to further upgrade heavy crude oil.Our fertilizer plant is located in Coffeyville,Kansas,which is part of the Midwest pet coke market.Our average daily pet coke demand from 2012-2014 wa

50、s approximately 1,400 tons per day.During the past five years,over 70%of our pet coke requirements on average were supplied by CVR Refinings adjacent crude oil refinery,pursuant to a renewable long-term agreement.Historically we have obtained the remainder of our pet coke requirements from third par

51、ties such as other Midwestern refineries or pet coke brokers at spot-prices.During 2012,the Partnership entered a pet coke supply agreement with HollyFrontier Corporation.The term of this renewed agreement ends in December 2015 and may be renewed.If necessary,the gasification process can be modified

52、 to operate on coal as an alternative,which provides an additional raw material source.There are significant supplies of coal within a 60-mile radius of our nitrogen fertilizer plant.Linde LLC(Linde)owns,operates,and maintains the air separation plant that provides contract volumes of oxygen,nitroge

53、n,and compressed dry air to our gasifiers for a monthly fee.We provide and pay for all utilities required for operation of the air separation plant.The air separation plant has not experienced any long-term operating problems;however,CVR Energy maintains,for our benefit,contingent business interrupt

54、ion insurance with a$150.0 million limit for any interruption that results in a loss of production from an insured peril.The agreement with Linde provides that if our requirements for liquid or gaseous oxygen,liquid or gaseous nitrogen or clean dry air exceed specified instantaneous flow rates by at

55、 least 10%,we can solicit bids from Linde and third parties to supply our incremental product needs.We are required to provide notice to Linde of the approximate quantity of excess product that we will need and the approximate date by which we will need it.We and Linde will then jointly develop a re

56、quest for proposal for soliciting bids from third parties and Linde.The bidding procedures may be limited under specified circumstances.The agreement with Linde expires in 2020.Although we have our own boiler that is used to create start-up steam,we also have the ability to import start-up steam for

57、 the nitrogen fertilizer plant from CVR Refinings adjacent crude oil refinery and then export steam back to the crude oil refinery once all of our units are in service.We have entered into a feedstock and shared services agreement with a subsidiary of CVR Refining,which regulates,among other things,

58、the import and export of start-up steam between the adjacent refinery and the nitrogen fertilizer plant.Monthly charges and credits are recorded with the steam valued at the natural gas price for the month.Production ProcessOur nitrogen fertilizer plant was built in 2000 with two separate gasifiers

59、to provide redundancy and reliability.It uses a gasification process,licensed from an affiliate of the General Electric Company(General Electric),to convert pet coke to high purity hydrogen for subsequent conversion to ammonia.The nitrogen fertilizer plant is capable of processing approximately 1,40

60、0 tons per day of pet coke from CVR Refinings crude oil refinery and third-party sources and converting it into approximately 1,225 tons per day of ammonia.Substantially all of the ammonia produced is converted to approximately 3,000 tons per day of UAN.Typically 0.41 tons of ammonia are required to

61、 produce one ton of UAN.Pet coke is first ground and blended with water and a fluxant(a mixture of fly ash and sand)to form a slurry that is then pumped into the partial oxidation gasifier.The slurry is then contacted with oxygen from an air separation unit.Partial oxidation reactions take place and

62、 the synthesis gas,or syngas,consisting predominantly of hydrogen and carbon monoxide,is formed.The mineral residue from the slurry is a molten slag(a glasslike substance containing the metal impurities originally present in pet coke)and flows along with the syngas into a quench chamber.The syngas a

63、nd slag are rapidly cooled and the syngas is separated from the slag.Slag becomes a byproduct of the process.The syngas is scrubbed and saturated with moisture.The syngas next flows through a shift reactor unit where the carbon monoxide in the syngas is reacted with the moisture to form hydrogen and

64、 CO2.The heat from this reaction generates saturated steam.Most of this steam along with other steam produced in the ammonia and UAN plants is used internally.The excess steam not consumed by the process can be sent to the adjacent crude oil refinery.After additional heat recovery,the high-pressure

65、syngas is cooled and processed in the acid gas removal unit where carbon dioxide and hydrogen sulfide are removed.The syngas is then fed to a pressure swing adsorption(PSA)unit,where the remaining impurities are extracted.The PSA unit reduces residual carbon monoxide and CO2 levels to trace levels,a

66、nd the moisture-free,high-purity hydrogen is sent directly to the ammonia synthesis loop.Table of Contents7The hydrogen is reacted with nitrogen from the air separation unit in the ammonia unit to form the ammonia product.A large portion of the ammonia is converted to UAN.In 2014,we produced 963,715

67、 tons of UAN and 388,923 tons of ammonia.Approximately 97%of our produced ammonia tons and the majority of the purchased ammonia were upgraded into UAN.We schedule and provide routine maintenance to our critical equipment using our own maintenance technicians.Pursuant to a technical services agreeme

68、nt with General Electric,which licenses the gasification technology to us,General Electric provides technical advice and technological updates from their ongoing research as well as other licensees operating experiences.The pet coke gasification process is licensed from General Electric pursuant to

69、a perpetual license agreement that is fully paid.The license grants us perpetual rights to use the pet coke gasification process on specified terms and conditions.Distribution,Sales and MarketingThe primary geographic markets for our fertilizer products are Kansas,Missouri,Nebraska,Iowa,Illinois,Col

70、orado and Texas.We market the ammonia products to industrial and agricultural customers and the UAN products to agricultural customers.UAN and ammonia are distributed by truck or by railcar.If delivered by truck,products are sold on a freight-on-board basis,and freight is normally arranged by the cu

71、stomer.We lease and own a fleet of railcars for use in product delivery.We incur costs to maintain and repair our railcar fleet that include expenses related to regulatory inspections and repairs.For example,many of our railcars require specific regulatory inspections and repairs due on a ten-year i

72、nterval.The extent and frequency of railcar fleet maintenance and repair costs are generally expected to change based partially on when regulatory inspections and repairs are due for our railcars under the relevant regulations.We operate eight rail loading and two truck loading racks for UAN.We also

73、 operate four rail loading and two truck loading racks for ammonia.We own all of the truck and rail loading equipment at our nitrogen fertilizer facility.We also utilize two separate UAN storage tanks and related truck and railcar load-out facilities.Each of these facilities,located in Phillipsburg

74、and Dartmouth,Kansas,has a UAN storage tank that has a capacity of two million gallons,or approximately 10,000 tons.The Phillipsburg property that the terminal was constructed on is owned by a subsidiary of CVR Refining,which operates the terminal.The Dartmouth terminal is located on leased property

75、 owned by the Pawnee County Cooperative Association,which operates the terminal.The purpose of the UAN terminals is to collectively distribute approximately 40,000 tons of UAN fertilizer annually.These UAN terminals are currently operational.We market agricultural products to destinations that produ

76、ce strong margins.The UAN market is primarily located near the Union Pacific Railroad lines or destinations that can be supplied by truck.The ammonia market is primarily located near the Burlington Northern Santa Fe or Kansas City Southern Railroad lines or destinations that can be supplied by truck

77、.By securing this business directly,we reduce our dependence on distributors serving the same customer base,which enables us to capture a larger margin and allows us to better control our product distribution.Most of the agricultural sales are made on a competitive spot basis.We also offer products

78、on a prepay basis for in-season demand.The heavy in-season demand periods are spring and fall in the corn belt and summer in the wheat belt.The corn belt is the primary corn producing region of the United States,which includes Illinois,Indiana,Iowa,Minnesota,Missouri,Nebraska,Ohio and Wisconsin.The

79、wheat belt is the primary wheat producing region of the United States,which includes Kansas,North Dakota,Oklahoma,South Dakota and Texas.Some of the industrial sales are spot sales,but most are on annual or multiyear contracts.We use forward sales of our fertilizer products to optimize our asset uti

80、lization,planning process and production scheduling.These sales are made by offering customers the opportunity to purchase product on a forward basis at prices and delivery dates that we propose.We use this program to varying degrees during the year and between years depending on market conditions.W

81、e have the flexibility to decrease or increase forward sales depending on our view as to whether price environments will be increasing or decreasing.Fixing the selling prices of our products months in advance of their ultimate delivery to customers typically causes our reported selling prices and ma

82、rgins to differ from spot market prices and margins available at the time of shipment.As of December 31,2014 and 2013,we had sold forward 279,832 and 285,537 tons of UAN at an average netback of$263 and$251 over the next six months,respectively.Cash received as a result of prepayments is recognized

83、as deferred revenue on our Consolidated Balance Sheet upon receipt,and revenue and resultant net income and EBITDA are recorded as the product is actually delivered.CustomersWe sell UAN products to retailers and distributors.In addition,we sell ammonia to agricultural and industrial customers.Some o

84、f our larger customers include Gavilon Fertilizer,LLC,United Suppliers,Inc.,Crop Production Services,Inc.,J.R.Simplot,Inc.,Interchem,and MFA.Given the nature of our business,and consistent with industry practice,we do not have long-term minimum purchase contracts with our UAN and ammonia customers.T

85、able of Contents8For the year ended December 31,2014,the top five UAN customers in the aggregate represented 42%of our total sales.Our top two fertilizer customers on a consolidated basis accounted for approximately 17%and 10%,respectively,of our net sales.While we do have high concentration of cust

86、omers,we do not believe that the loss of any single customer would have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.See Risk Factors Risks Related to Our Business Our business depends on significant customers,and the loss of signi

87、ficant customers may have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.CompetitionWe have experienced and expect to continue to meet significant levels of competition from current and potential competitors,many of whom have signifi

88、cantly greater financial and other resources.See Risk Factors Risks Related to Our Business Nitrogen fertilizer products are global commodities,and we face intense competition from other nitrogen fertilizer producers.Competition in our industry is dominated by price considerations.However,during the

89、 spring and fall application seasons,farming activities intensify and delivery capacity is a significant competitive factor.We maintain a large fleet of leased and owned railcars and seasonally adjust inventory to enhance our manufacturing and distribution operations.Our major competitors include Ag

90、rium,Inc.;Koch Nitrogen Company,LLC;Potash Corporation of Saskatchewan,Inc.;CF Industries Holdings,Inc.and Terra Nitrogen Company,LP.Domestic competition is intense due to customers sophisticated buying tendencies and competitor strategies that focus on cost and service.Also,foreign competition can

91、exist from producers of fertilizer products manufactured in countries with lower cost natural gas supplies.In certain cases,foreign producers of fertilizer who export to the United States may be subsidized by their respective governments.Based on Blue Johnson&Associates,Inc.data regarding total U.S.

92、use of UAN and ammonia,we estimate that our UAN production in 2014 represented approximately 7%of total U.S.UAN use and that the net ammonia produced and marketed at our facility represented less than 1%of total U.S.ammonia use.SeasonalityBecause we primarily sell agricultural commodity products,our

93、 business is exposed to seasonal fluctuations in demand for nitrogen fertilizer products in the agricultural industry.As a result,we typically generate greater net sales in the first half of the calendar year,which we refer to as the planting season,and our net sales tend to be lower during the seco

94、nd half of each calendar year,which we refer to as the fill season.In addition,the demand for fertilizers is affected by the aggregate crop planting decisions and fertilizer application rate decisions of individual farmers who make planting decisions based largely on the prospective profitability of

95、 a harvest.The specific varieties and amounts of fertilizer they apply depend on factors like crop prices,farmers current liquidity,soil conditions,weather patterns and the types of crops planted.Environmental MattersOur business is subject to extensive and frequently changing federal,state and loca

96、l,environmental,health and safety laws and regulations governing the emission and release of hazardous substances into the environment,the treatment and discharge of waste water and the storage,handling,use and transportation of our nitrogen fertilizer products.These laws and regulations,their under

97、lying regulatory requirements and the enforcement thereof impact us by imposing:restrictions on operations or the need to install enhanced or additional controls;the need to obtain and comply with permits and authorizations;liability for the investigation and remediation of contaminated soil and gro

98、undwater at current and former facilities(if any)and off-site waste disposal locations;and specifications for the products we market,primarily UAN and ammonia.Our operations require numerous permits and authorizations.Failure to comply with these permits or environmental laws and regulations general

99、ly could result in fines,penalties or other sanctions or a revocation of our permits.In addition,the laws and regulations to which we are subject are often evolving and many of them have become more stringent or have become subject to more stringent interpretation or enforcement by federal and state

100、 agencies.The ultimate impact on our business of complying with existing laws and regulations is not always clearly known or determinable due in part to the fact that our operations may change over time and certain implementing regulations for laws,such as the federal Clean Air Act,have not yet been

101、 finalized,are under governmental or judicial review or are being revised.These laws and regulations could result in Table of Contents9increased capital,operating and compliance costs or result in delays or limits to our operations or growth while attempting to obtain required permits.The principal

102、environmental risks associated with our business are outlined below.The Federal Clean Air ActThe federal Clean Air Act and its implementing regulations,as well as the corresponding state laws and regulations that regulate emissions of pollutants into the air,affect us through the federal Clean Air A

103、cts permitting requirements and emission control requirements relating to specific air pollutants,as well as the requirement to maintain a risk management program to help prevent accidental releases of certain substances.Some or all of the standards promulgated pursuant to the federal Clean Air Act,

104、or any future promulgations of standards,may require the installation of controls or changes to our nitrogen fertilizer facility in order to comply.If new controls or changes to operations are needed,the costs could be material.These new requirements,other requirements of the federal Clean Air Act,o

105、r other presently existing or future environmental regulations could cause us to expend substantial amounts to comply and/or permit our facility to produce products that meet applicable requirements.The regulation of air emissions under the federal Clean Air Act requires that we obtain various const

106、ruction and operating permits and incur capital expenditures for the installation of certain air pollution control devices at our operations.Various regulations specific to our operations have been implemented,such as National Emission Standard for Hazardous Air Pollutants,New Source Performance Sta

107、ndards and New Source Review.We have incurred,and expect to continue to have to make substantial capital expenditures to attain or maintain compliance with these and other air emission regulations that have been promulgated or may be promulgated or revised in the future.In May 2012,the U.S.Environme

108、ntal Protection Agency(the EPA)finalized revisions to the New Source Performance Standards for nitric acid plants.We do not expect to incur capital expenditures or any significant additional operational expenses associated with the revised standards.Release ReportingThe release of hazardous substanc

109、es or extremely hazardous substances into the environment is subject to release reporting requirements under federal and state environmental laws.We periodically experience releases of hazardous or extremely hazardous substances from our equipment.Our facility periodically has excess emission events

110、 from flaring and other planned and unplanned startup,shutdown and malfunction events.Such releases are reported to the EPA and relevant state and local agencies.From time to time,the EPA has conducted inspections and issued information requests to us with respect to our compliance with release repo

111、rting requirements under the Comprehensive Environmental Response,Compensation and Liability Act(CERCLA)and the Emergency Planning and Community Right-to-Know Act.If we fail to properly report a release,or if the release violates the law or our permits,it could cause us to become the subject of a go

112、vernmental enforcement action or third-party claims.Government enforcement or third-party claims relating to releases of hazardous or extremely hazardous substances could result in significant expenditures and liability.Greenhouse Gas EmissionsVarious regulatory and legislative measures to address g

113、reenhouse gas(GHG)emissions(including carbon dioxide,or CO2,methane and nitrous oxides)are in different phases of implementation or discussion.In the aftermath of its 2009 endangerment finding that GHG emissions pose a threat to public health and welfare,the EPA has begun to regulate GHG emissions u

114、nder the authority granted to it under the federal Clean Air Act.In October 2009,the EPA finalized a rule requiring certain large emitters of GHGs to inventory and report their GHG emissions to the EPA.In accordance with the rule,we began monitoring and reporting GHG emissions from our nitrogen fert

115、ilizer plant.In May 2010,the EPA finalized the Greenhouse Gas Tailoring Rule,which established new GHG emissions thresholds that determine when stationary sources,such as our nitrogen fertilizer plant,must obtain permits under the New Source Review/Prevention of Significant Deterioration(NSR),and Ti

116、tle V programs of the federal Clean Air Act.In cases where a new source is constructed or an existing major source undergoes a major modification,facilities are required to undergo NSR review and evaluate and install air pollution controls to reduce GHG emissions.A major modification resulting in a

117、significant increase in GHG emissions may require the installation of air pollution controls as part of the permitting process.Although the EPA has not yet proposed New Source Performance Standards(NSPS)to regulate GHG emissions for the nitrogen fertilizer plant,the EPA has proposed NSPS to regulate

118、 GHG for electric utilities.Therefore,we expect that the EPA will propose standards for our fertilizer plant,but the timing of any such EPA proposal is not known.Table of Contents10During a State of the Union address in January 2014 and again in January 2015,President Obama indicated that the United

119、 States should take action to address climate change.At the federal legislative level,this could mean Congressional passage of legislation adopting some form of federal mandatory GHG emission reduction,such as a nationwide cap-and-trade program.It is also possible that Congress may pass alternative

120、climate change bills that do not mandate a nationwide cap-and-trade program and instead focus on promoting renewable energy and energy efficiency.In addition to potential federal legislation,a number of states have adopted regional GHG initiatives to reduce CO2 and other GHG emissions.In 2007,a grou

121、p of Midwest states,including Kansas(where our nitrogen fertilizer facility is located),formed the Midwestern Greenhouse Gas Reduction Accord,which calls for the development of a cap-and-trade system to control GHG emissions and for the inventory of such emissions.However,the individual states that

122、have signed on to the accord must adopt laws or regulations implementing the trading scheme before it becomes effective,and it is unclear whether Kansas intends to do so.Alternatively,the EPA may take further steps to regulate GHG emissions.The implementation of EPA regulations and/or the passage of

123、 federal or state climate change legislation may result in increased costs to(i)operate and maintain our facility,(ii)install new emission controls on our facility and(iii)administer and manage any GHG emissions program.Increased costs associated with compliance with any future legislation or regula

124、tion of GHG emissions,if it occurs,may have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.In addition,climate change legislation and regulations may result in increased costs not only for our business but also for users of our ferti

125、lizer products,thereby potentially decreasing demand for our fertilizer products.Decreased demand for our fertilizer products may have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.Environmental RemediationUnder CERCLA,the Resource

126、Conservation and Recovery Act,and related state laws,certain persons may be liable for the release or threatened release of hazardous substances.These persons can include the current owner or operator of property where a release or threatened release occurred,any persons who owned or operated the pr

127、operty when the release occurred,and any persons who disposed of,or arranged for the transportation or disposal of,hazardous substances at a contaminated property.Liability under CERCLA is strict,and,under certain circumstances,joint and several,so that any responsible party may be held liable for t

128、he entire cost of investigating and remediating the release of hazardous substances.As is the case with all companies engaged in similar industries,we face potential exposure from future claims and lawsuits involving environmental matters,including soil and water contamination,personal injury or pro

129、perty damage allegedly caused by hazardous substances that we manufactured,handled,used,stored,transported,spilled,disposed of or released.We cannot assure you that we will not become involved in future proceedings related to our release of hazardous or extremely hazardous substances or that,if we w

130、ere held responsible for damages in any existing or future proceedings,such costs would be covered by insurance or would not be material.Environmental InsuranceWe are covered by CVR Energys site pollution legal liability insurance policy with an aggregate limit of$50.0 million per pollution conditio

131、n,subject to a self-insured retention of$1.0 million.The policy includes business interruption coverage,subject to a 5-day waiting period deductible.This insurance expires on March 1,2015 and is expected to be renewed without any material changes in terms.The policy insures any location owned,leased

132、,rented or operated by the Partnership,including our nitrogen fertilizer facility.The policy insures certain pollution conditions at,or migrating from,a covered location,certain waste transportation and disposal activities and business interruption.In addition to the site pollution legal liability i

133、nsurance policy,we benefit from umbrella and excess casualty insurance policies maintained by CVR Energy having an aggregate and occurrence limit of$150.0 million,subject to a self-insured retention of$2.0 million.This insurance provides coverage due to named perils for claims involving pollutants w

134、here the discharge is sudden and accidental and first commenced at a specific day and time during the policy period.The casualty insurance policies,including umbrella and excess policies,expire on March 1,2015 and are expected to be renewed or replaced by insurance policies containing equivalent sud

135、den and accidental pollution coverage with no reduction in limits.The site pollution legal liability policy and the pollution coverage provided in the casualty insurance policies contain discovery requirements,reporting requirements,exclusions,definitions,conditions and limitations that could apply

136、to a particular pollution claim,and there can be no assurance such claim will be adequately insured for all potential damages.Table of Contents11Safety,Health and Security MattersWe are subject to a number of federal and state laws and regulations related to safety,including the Occupational Safety

137、and Health Administration Act(OSHA),and comparable state statutes,the purpose of which are to protect the health and safety of workers.We also are subject to OSHA Process Safety Management regulations,which are designed to prevent or minimize the consequences of catastrophic releases of toxic,reacti

138、ve,flammable or explosive chemicals.We operate a comprehensive safety,health and security program,with participation by employees at all levels of the organization.We have developed comprehensive safety programs aimed at preventing OSHA recordable incidents.Despite our efforts to achieve excellence

139、in our safety and health performance,there can be no assurances that there will not be accidents resulting in injuries or even fatalities.We routinely audit our programs and consider improvements in our management systems.Process Safety Management.We maintain a process safety management program(PSM)

140、.This program is designed to address all aspects of OSHA guidelines for developing and maintaining a comprehensive process safety management program.We will continue to audit our programs and consider improvements in our management systems and equipment.Risk Management Program.We maintain an EPA ris

141、k management program.This program is similar to PSM but also includes environmental and worst case scenario protections.Emergency Planning and Response.We have an emergency response plan that describes the organization,responsibilities and plans for responding to emergencies in our facility.This pla

142、n is communicated to local regulatory and community groups.We have on-site warning siren systems and personal radios.We will continue to audit our programs and consider improvements in our management systems and equipment.EmployeesAs of December 31,2014,we had 144 direct employees.These employees op

143、erate our facilities at the nitrogen fertilizer plant level and are directly employed and compensated by us.As of December 31,2014,these employees are covered by health insurance,disability and retirement plans established by CVR Energy.None of our employees are unionized,and we believe that our rel

144、ationship with our employees is good.We also rely on the services of employees of CVR Energy in the operation of our business pursuant to a services agreement among us,CVR Energy and our general partner.For more information on this services agreement,see Part III,Item 13 of this report Certain Relat

145、ionships and Related Transactions,and Director Independence Agreements with CVR Energy and CVR Refining Services Agreement.Available InformationOur website address is .Our annual reports on Form 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K,and all amendments to those reports,are a

146、vailable free of charge through our website under Investor Relations,as soon as reasonably practicable after the electronic filing of these reports is made with the Securities and Exchange Commission(the SEC).In addition,our Corporate Governance Guidelines,Codes of Ethics and the Charter of the Audi

147、t Committee and the Compensation Committee of the Board of Directors of our general partner are available on our website.These guidelines,policies and charters are also available in print without charge to any unitholder requesting them.Trademarks,Trade Names and Service MarksThis Report may include

148、 our and our affiliates trademarks,including Coffeyville Resources,the Coffeyville Resources logo,the CVR Partners,LP logo,the CVR Refining,LP logo and the CVR Energy,Inc.logo,each of which is registered or for which we are applying for federal registration with the United States Patent and Trademar

149、k Office.This Report may also contain trademarks,service marks,copyrights and trade names of other companies.Table of Contents12Item 1A.Risk FactorsYou should carefully consider each of the following risks together with the other information contained in this Report and all of the information set fo

150、rth in our filings with the SEC.If any of the following risks and uncertainties develop into actual events,our business,financial condition,cash flows or results of operations could be materially adversely affected.In that case,we might not be able to pay distributions on our common units,the tradin

151、g price of our common units could decline,and you could lose all or part of your investment.Although many of our business risks are comparable to those faced by a corporation engaged in a similar business,limited partner interests are inherently different from the capital stock of a corporation and

152、involve additional risks described below.Risks Related to Our BusinessWe may not have sufficient cash available to pay any quarterly distribution on our common units.Furthermore,we are not required to make distributions to holders of our common units on a quarterly basis or otherwise,and may elect t

153、o distribute less than all of our available cash.We may not have sufficient cash available each quarter to enable us to pay any distributions to our common unitholders.Furthermore,our partnership agreement does not require us to pay distributions on a quarterly basis or otherwise.Although our genera

154、l partners current policy is to distribute all of our available cash(which is defined as Adjusted EBITDA reduced for cash needed for(i)net interest expense(excluding capitalized interest)and debt service and other contractual obligations;(ii)maintenance capital expenditures;and(iii)to the extent app

155、licable,major scheduled turnaround expenses incurred and reserves for future operating or capital needs that the board of directors of the general partner deems necessary or appropriate,if any)on a quarterly basis,the board of directors of our general partner may at any time,for any reason,change th

156、is policy or decide not to pay cash distributions on a quarterly basis or other basis.The amount of cash we will be able to distribute on our common units principally depends on the amount of cash we generate from our operations,which is directly dependent upon the operating margins we generate,whic

157、h have been volatile historically.Our operating margins are significantly affected by the market-driven UAN and ammonia prices we are able to charge our customers and our pet coke-based gasification production costs,as well as seasonality,weather conditions,governmental regulation,unscheduled mainte

158、nance or downtime at our facilities and global and domestic demand for nitrogen fertilizer products,among other factors.In addition:The amount of distributions we pay,if any,and the decision to make any distribution at all will be determined by the board of directors of our general partner,whose int

159、erests may differ from those of our common unitholders.Our general partner has limited fiduciary and contractual duties,which may permit it to favor its own interests or the interests of CVR Energy to the detriment of our common unitholders.Our credit facility,which matures in April 2016,and any cre

160、dit facility or other debt instruments we enter into in the future,may limit the distributions that we can make.Our credit facility provides that we can make distributions to holders of our common units,but only if we are in compliance with our leverage ratio and interest coverage ratio covenants on

161、 a pro forma basis after giving effect to any distribution,and there is no default or event of default under the facility.In addition,any future credit facility may contain other financial tests and covenants that we must satisfy.Any failure to comply with these tests and covenants could result in t

162、he lenders prohibiting distributions by us.The actual amount of available cash depends on numerous factors,some of which are beyond our control,including UAN and ammonia prices,our operating costs,global and domestic demand for nitrogen fertilizer products,fluctuations in our working capital needs,a

163、nd the amount of fees and expenses incurred by us.The amount of our quarterly cash distributions,if any,will vary significantly both quarterly and annually and will be directly dependent on the performance of our business.We expect our business performance will be more seasonal and volatile,and our

164、cash flows will be less stable,than the business performance and cash flows of most publicly traded partnerships.As a result,our quarterly cash distributions will be volatile and are expected to vary quarterly and annually.Unlike most publicly traded partnerships,we do not have a minimum quarterly d

165、istribution or employ structures intended to consistently maintain or increase distributions over time.The amount of our quarterly cash distributions will be directly dependent on the performance of our business,which has been volatile historically as a result of volatile nitrogen fertilizer and nat

166、ural gas prices,and seasonal and global fluctuations in demand for nitrogen fertilizer products.Because our quarterly distributions will be subject to significant fluctuations,future quarterly distributions paid to our unitholders will vary significantly from quarter to quarter and may be zero.Table

167、 of Contents13The board of directors of our general partner may modify or revoke our cash distribution policy at any time at its discretion,including in such a manner that would result in an elimination of cash distributions regardless of the amount of available cash we generate.Our partnership agre

168、ement does not require us to make any distributions at all.Our general partners current policy is to distribute all of the available cash we generate each quarter to unitholders of record on a pro rata basis.However,the board of directors of our general partner may change such policy at any time at

169、its discretion and could elect not to make distributions for one or more quarters regardless of the amount of available cash we generate.Our partnership agreement does not require us to make any distributions at all.Any modification or revocation of our cash distribution policy could substantially r

170、educe or eliminate the amounts of distributions to our unitholders.The nitrogen fertilizer business is,and nitrogen fertilizer prices are,cyclical and highly volatile and have experienced substantial downturns in the past.Cycles in demand and pricing could potentially expose us to significant fluctu

171、ations in our operating and financial results,and expose you to substantial volatility in our quarterly cash distributions and material reductions in the trading price of our common units.We are exposed to fluctuations in nitrogen fertilizer demand in the agricultural industry.These fluctuations his

172、torically have had and could in the future have significant effects on prices across all nitrogen fertilizer products and,in turn,our financial condition,cash flows and results of operations,which could result in significant volatility or material reductions in the price of our common units or an in

173、ability to make quarterly cash distributions on our common units.Nitrogen fertilizer products are commodities,the price of which can be highly volatile.The price of nitrogen fertilizer products depend on a number of factors,including general economic conditions,cyclical trends in end-user markets,su

174、pply and demand imbalances,governmental policies and weather conditions,which have a greater relevance because of the seasonal nature of fertilizer application.If seasonal demand exceeds the projections on which we base production,our customers may acquire nitrogen fertilizer products from our compe

175、titors,and our profitability will be negatively impacted.If seasonal demand is less than we expect,we will be left with excess inventory that will have to be stored or liquidated.Demand for nitrogen fertilizer products is dependent on demand for crop nutrients by the global agricultural industry.The

176、 international market for nitrogen fertilizers is influenced by such factors as the relative value of the U.S.dollar and its impact upon the cost of importing nitrogen fertilizers,foreign agricultural policies,the existence of,or changes in,import or foreign currency exchange barriers in certain for

177、eign markets,changes in the hard currency demands of certain countries and other regulatory policies of foreign governments,as well as the laws and policies of the United States affecting foreign trade and investment.Nitrogen-based fertilizers are currently in high demand,driven by a growing world p

178、opulation,changes in dietary habits and an expanded use of corn for the production of ethanol.Supply is affected by available capacity and operating rates,raw material costs,government policies and global trade.A decrease in nitrogen fertilizer prices would have a material adverse effect on our busi

179、ness,cash flow and ability to make distributions.Our internally generated cash flows and other sources of liquidity may not be adequate for our capital needs.As a result,we may not be able to pay any cash distributions to our unitholders and the trading price of our common units may be adversely imp

180、acted.If we cannot generate adequate cash flow or otherwise secure sufficient liquidity to meet our working capital needs or support our short-term and long-term capital requirements,we may be unable to meet our debt obligations,pursue our business strategies or comply with certain environmental sta

181、ndards,which would have a material adverse effect on our business and results of operations.As of December 31,2014,we had cash and cash equivalents of$79.9 million and$25.0 million available under our revolving credit facility.The costs associated with operating our nitrogen fertilizer plant are lar

182、gely fixed.If nitrogen fertilizer prices fall below a certain level,we may not generate sufficient revenue to operate profitably or cover our costs and our ability to make distributions will be adversely impacted.Unlike our competitors,whose primary costs are related to the purchase of natural gas a

183、nd whose costs are therefore largely variable,we have largely fixed costs that are not dependent on the price of natural gas because we use pet coke as the primary feedstock in our nitrogen fertilizer plant.As a result of the fixed cost nature of our operations,downtime,interruptions or low producti

184、vity due to reduced demand,adverse weather conditions,equipment failure,a decrease in nitrogen fertilizer prices or other causes can result in significant operating losses,which would have a material adverse effect on our results of operations,financial condition and ability to make cash distributio

185、ns.Table of Contents14Continued low natural gas prices could impact our relative competitive position when compared to other nitrogen fertilizer producers.Most nitrogen fertilizer manufacturers rely on natural gas as their primary feedstock,and the cost of natural gas,which approached ten-year lows

186、at the beginning of 2015,is a large component of the total production cost for natural gas-based nitrogen fertilizer manufacturers.Low natural gas prices benefit our competitors and disproportionately impact our operations by making us less competitive with natural gas-based nitrogen fertilizer manu

187、facturers.Continued low natural gas prices could impair our ability to compete with other nitrogen fertilizer producers who utilize natural gas as their primary feedstock if nitrogen fertilizer pricing drops as a result of low natural gas prices,and therefore have a material adverse impact on the tr

188、ading price of our common units.In addition,if low natural gas prices in the United States were to prompt those U.S.producers who have permanently or temporarily closed production facilities to resume fertilizer production,this would likely contribute to a global supply/demand imbalance that could n

189、egatively affect nitrogen fertilizer prices and therefore have a material adverse effect on our results of operations,financial condition,cash flows,and ability to make cash distributions.Any decline in U.S.agricultural production or limitations on the use of nitrogen fertilizer for agricultural pur

190、poses could have a material adverse effect on the sales of nitrogen fertilizer,and on our results of operations,financial condition and ability to make cash distributions.Conditions in the U.S.agricultural industry significantly impact our operating results.The U.S.agricultural industry can be affec

191、ted by a number of factors,including weather patterns and field conditions,current and projected grain inventories and prices,domestic and international population changes,demand for U.S.agricultural products and U.S.and foreign policies regarding trade in agricultural products.The Agricultural Act

192、of 2014(the 2014 Farm Bill)ends direct subsidies to agricultural producers for owning farmland,and funds a new crop insurance program in its place.As part of the conservation title of the 2014 farm bill,agricultural producers must meet a minimum standard of environmental protection in order to recei

193、ve federal crop insurance on sensitive lands.The 2014 Farm Bill also discourages producers from converting native grasslands to farmland by limiting crop insurance subsidies for the first few years for newly converted lands.These changes may have a negative impact on fertilizer sales and on our resu

194、lts of operations,financial condition and ability to make cash distributions.State and federal governmental policies,including farm and biofuel subsidies and commodity support programs,as well as the prices of fertilizer products,may also directly or indirectly influence the number of acres planted,

195、the mix of crops planted and the use of fertilizers for particular agricultural applications.Developments in crop technology,such as nitrogen fixation(the conversion of atmospheric nitrogen into compounds that plants can assimilate),could also reduce the use of chemical fertilizers and adversely aff

196、ect the demand for nitrogen fertilizer.In addition,from time to time various state legislatures have considered limitations on the use and application of chemical fertilizers due to concerns about the impact of these products on the environment.Unfavorable state and federal governmental policies cou

197、ld negatively affect nitrogen fertilizer prices and therefore have a material adverse effect on our results of operations,financial condition ability to make cash distributions.A major factor underlying the current high level of demand for our nitrogen-based fertilizer products is the production of

198、ethanol.A decrease in ethanol production,an increase in ethanol imports or a shift away from corn as a principal raw material used to produce ethanol could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.A major factor underlying

199、 the current high level of demand for our nitrogen-based fertilizer products is the production of ethanol in the United States and the use of corn in ethanol production.Ethanol production in the United States is highly dependent upon a myriad of federal statutes and regulations,and is made significa

200、ntly more competitive by various federal and state incentives and mandated usage of renewable fuels pursuant to the federal renewable fuel standards(“RFS”).The RFS required 16.55 billion gallons of renewable fuel usage in 2013,increasing to 36.0 billion gallons by 2022.To date,the RFS has been satis

201、fied primarily with fuel ethanol blended into gasoline.However,a number of factors,including the continuing“food versus fuel”debate and studies showing that expanded ethanol usage may increase the level of greenhouse gases in the environment as well as be unsuitable for small engine use,have resulte

202、d in calls to reduce subsidies for ethanol,allow increased ethanol imports and to repeal or waive(in whole or in part)the current RFS,any of which could have an adverse effect on corn-based ethanol production,planted corn acreage and fertilizer demand.For example,in December 2013 a bipartisan bill w

203、as introduced in Congress to eliminate the ethanol mandate from the RFS.Therefore,ethanol incentive programs may not be renewed,or if renewed,they may be renewed on terms significantly less favorable to ethanol producers than current incentive programs.In November 2013,the EPA proposed the 2014 annu

204、al renewable fuel percentage standards,including a reduced corn-based ethanol volume,due in part to the concerns regarding the ethanol blend wall-the point at which refiners are required to blend more ethanol into the transportation fuel supply than can be supported by the demand for E10 gasoline(ga

205、soline containing 10 percent ethanol by volume).In January 2015,the EPA announced that its goal was to release the final 2015 RFS Table of Contents15volume mandates in the spring of 2015.If finalized,as originally proposed,this rulemaking could have a material adverse effect on ethanol production in

206、 the United States,which could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.In other action,the US Court of Appeals upheld an EPA waiver allowing the sale of E15(gasoline blends containing up to 15%ethanol)on later model year

207、cars,but this issue may continue to be challenged through legislative action.Further,while most ethanol is currently produced from corn and other raw grains,such as milo or sorghum,the current RFS federal mandate requires a portion of the overall RFS federal mandate to come from advanced biofuels,in

208、cluding cellulose-based biomass,such as agricultural waste,forest residue,municipal solid waste and energy crops(plants grown for use to make biofuels or directly exploited for their energy content)and biomass-based diesel.In addition,there is a continuing trend to encourage the use of products othe

209、r than corn and raw grains for ethanol production.For example,the 2014 Farm Bill provides authorization for funding advanced biofuels.If this trend is successful,the demand for corn may decrease significantly,which could reduce demand for our nitrogen fertilizer products and have an adverse effect o

210、n our results of operations,financial condition and ability to make cash distributions.This potential impact on the demand for nitrogen fertilizer products;however,could be slightly offset by the potential market for nitrogen fertilizer product usage in connection with the production of cellulosic b

211、iofuels.Nitrogen fertilizer products are global commodities,and we face intense competition from other nitrogen fertilizer producers.Our business is subject to intense price competition from both U.S.and foreign sources,including competitors operating in the Middle East,the Asia-Pacific region,the C

212、aribbean,Russia and the Ukraine.Fertilizers are global commodities,with little or no product differentiation,and customers make their purchasing decisions principally on the basis of delivered price and availability of the product.Increased global supply may put downward pressure on fertilizer price

213、s.Furthermore,in recent years the price of nitrogen fertilizer in the United States has been substantially driven by pricing in the global fertilizer market.We compete with a number of U.S.producers and producers in other countries,including state-owned and government-subsidized entities.Some compet

214、itors have greater total resources and are less dependent on earnings from fertilizer sales,which makes them less vulnerable to industry downturns and better positioned to pursue new expansion and development opportunities.Increased local supply may put downward pressure on fertilizer prices.Competi

215、tors utilizing different corporate structures may be better able to withstand lower cash flows than we can as a limited partnership.Our competitive position could suffer to the extent we are not able to expand our own resources either through investments in new or existing operations or through acqu

216、isitions,joint ventures or partnerships.An inability to compete successfully could result in the loss of customers,which could adversely affect our sales and profitability,and our ability to make cash distributions.Adverse weather conditions during peak fertilizer application periods may have a mate

217、rial adverse effect on our results of operations,financial condition and ability to make cash distributions,because our agricultural customers are geographically concentrated.Our sales of nitrogen fertilizer products to agricultural customers are concentrated in the Great Plains and Midwest states a

218、nd are seasonal in nature.For example,we generate greater net sales and operating income in the first half of the year,which we refer to as the planting season,compared to the second half of the year.Accordingly,an adverse weather pattern affecting agriculture in these regions or during the planting

219、 season could have a negative effect on fertilizer demand,which could,in turn,result in a material decline in our net sales and margins and otherwise have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.Our quarterly results may vary

220、significantly from one year to the next due largely to weather-related shifts in planting schedules and purchase patterns.In addition,given the seasonal nature of our business,we expect that our distributions will be volatile and will vary quarterly and annually.Our business is seasonal,which may re

221、sult in our carrying significant amounts of inventory and seasonal variations in working capital.Our inability to predict future seasonal nitrogen fertilizer demand accurately may result in excess inventory or product shortages.Our business is seasonal.Farmers tend to apply nitrogen fertilizer durin

222、g two short application periods,one in the spring and the other in the fall.The strongest demand for our products typically occurs during the planting season.In contrast,we and other nitrogen fertilizer producers generally produce our products throughout the year.As a result,we and our customers gen

223、erally build inventories during the low demand periods of the year in order to ensure timely product availability during the peak sales seasons.The seasonality of nitrogen fertilizer demand results in our sales volumes and net sales being highest during the North American spring season and our worki

224、ng capital requirements typically being highest just prior to the start of the spring season.Table of Contents16If seasonal demand exceeds our projections,we will not have enough product and our customers may acquire products from our competitors,which would negatively impact our profitability.If se

225、asonal demand is less than we expect,we will be left with excess inventory and higher working capital and liquidity requirements.The degree of seasonality of our business can change significantly from year to year due to conditions in the agricultural industry and other factors.As a consequence of o

226、ur seasonality,we expect that our distributions will be volatile and will vary quarterly and annually.Our operations are dependent on third-party suppliers,including Linde,which owns an air separation plant that provides oxygen,nitrogen and compressed dry air to our gasifiers,and the City of Coffeyv

227、ille,which supplies us with electricity.A deterioration in the financial condition of a third-party supplier,a mechanical problem with the air separation plant,or the inability of a third-party supplier to perform in accordance with its contractual obligations could have a material adverse effect on

228、 our results of operations,financial condition and on our ability to make cash distributions.Our operations depend in large part on the performance of third-party suppliers,including Linde for the supply of oxygen,nitrogen and compressed dry air,and the City of Coffeyville for the supply of electric

229、ity.With respect to Linde,our operations could be adversely affected if there were a deterioration in Lindes financial condition such that the operation of the air separation plant located adjacent to our nitrogen fertilizer plant was disrupted.Additionally,this air separation plant in the past has

230、experienced numerous short-term interruptions,causing interruptions in our gasifier operations.With respect to electricity,in 2010 we entered into an amended and restated electric services agreement with the City of Coffeyville,Kansas which gives us an option to extend the term of such agreement thr

231、ough June 30,2024.Should Linde,the City of Coffeyville or any of our other third-party suppliers fail to perform in accordance with existing contractual arrangements,our operation could be forced to halt.Alternative sources of supply could be difficult to obtain.Any shutdown of our operations,even f

232、or a limited period,could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.Our results of operations,financial condition and ability to make cash distributions may be adversely affected by the supply and price levels of pet coke.F

233、ailure by CVR Refining to continue to supply us with pet coke(to the extent third-party pet coke is unavailable or available only at higher prices),or CVR Refinings imposition of an obligation to provide it with security for our payment obligations,could negatively impact our results of operations.O

234、ur profitability is directly affected by the price and availability of pet coke obtained from CVR Refinings Coffeyville,Kansas crude oil refinery pursuant to a long-term agreement and pet coke purchased from third parties,both of which vary based on market prices.Pet coke is a key raw material used

235、by us in the manufacture of nitrogen fertilizer products.If pet coke costs increase,we may not be able to increase our prices to recover these increased costs,because market prices for our nitrogen fertilizer products are not correlated with pet coke prices.Based on our current output,we obtain most

236、(over 70%on average during the last five years)of the pet coke we need from CVR Refinings adjacent crude oil refinery,and procure the remainder on the open market.The price that we pay CVR Refining for pet coke is based on the lesser of a pet coke price derived from the price we receive for UAN(subj

237、ect to a UAN-based price ceiling and floor)and a pet coke index price.In most cases,the price we pay CVR Refining will be lower than the price which we would otherwise pay to third parties.Pet coke prices could significantly increase in the future.Should CVR Refining fail to perform in accordance wi

238、th our existing agreement,we would need to purchase pet coke from third parties on the open market,which could negatively impact our results of operations to the extent third-party pet coke is unavailable or available only at higher prices.We may not be able to maintain an adequate supply of pet cok

239、e.In addition,we could experience production delays or cost increases if alternative sources of supply prove to be more expensive or difficult to obtain.We currently purchase 100%of the pet coke produced by CVR Refinings Coffeyville refinery.Accordingly,if we increase our production,we will be more

240、dependent on pet coke purchases from third-party suppliers at open market prices.We entered into a pet coke supply agreement with HollyFrontier Corporation which became effective on March 1,2012.The term of this agreement ends in December 2015 and may be renewed.There is no assurance that we would b

241、e able to purchase pet coke on comparable terms from third parties or at all.Under our pet coke agreement with CVR Refining,we may become obligated to provide security for our payment obligations if,in CVR Refinings sole judgment,there is a material adverse change in our financial condition or liqui

242、dity position or in our ability to pay for our pet coke purchases.See Certain Relationships and Related Transactions,and Director Independence Agreements with CVR Energy and CVR Refining Coke Supply Agreement.Table of Contents17We rely on third-party providers of transportation services and equipmen

243、t,which subjects us to risks and uncertainties beyond our control that may have a material adverse effect on our results of operations,financial condition and ability to make distributions.We rely on railroad and trucking companies to ship finished products to our customers.We also lease railcars fr

244、om railcar owners in order to ship our finished products.These transportation operations,equipment and services are subject to various hazards,including extreme weather conditions,work stoppages,delays,spills,derailments and other accidents and other operating hazards.These transportation operations

245、,equipment and services are also subject to environmental,safety and other regulatory oversight.Due to concerns related to terrorism or accidents,local,state and federal governments could implement new regulations affecting the transportation of our finished products.In addition,new regulations coul

246、d be implemented affecting the equipment used to ship our finished products.Any delay in our ability to ship our finished products as a result of these transportation companies failure to operate properly,the implementation of new and more stringent regulatory requirements affecting transportation o

247、perations or equipment,or significant increases in the cost of these services or equipment could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.Our facility faces significant risks due to physical damage hazards,environmental li

248、ability risk exposure,and unplanned or emergency partial or total plant shutdowns resulting in business interruptions.We could incur potentially significant costs to the extent there are unforeseen events which cause property damage and a material decline in production which are not fully insured.In

249、surance companies that currently insure companies in our industry may limit or curtail coverage,may modify the coverage provided or may substantially increase premiums in the future.Our operations,located at a single location,are subject to significant operating hazards and interruptions.If our prod

250、uction plant or individual units within our plant,logistics assets,or key suppliers sustain a catastrophic loss and operations are shut down or significantly impaired,it would have a material adverse impact on our operations,financial condition and cash flows and adversely impact our ability to make

251、 cash distributions.Moreover,our facility is located adjacent to CVR Refinings Coffeyville refinery,and a major accident or disaster at the refinery could adversely affect our operations.Operations at our nitrogen fertilizer plant could be curtailed or partially or completely shut down,for an extend

252、ed period of time as a result of unexpected circumstances,which may not be within our control,such as:major unplanned maintenance requirements;catastrophic events caused by mechanical breakdown,electrical injury,pressure vessel rupture,explosion,contamination,fire,or natural disasters,including floo

253、d,windstorm,etc;labor supply shortages,or labor difficulties that result in a work stoppage or slowdown;cessation of all or a portion of the operations at our nitrogen fertilizer plant dictated by environmental authorities;a disruption in the supply of pet coke to our nitrogen fertilizer plant;a gov

254、ernmental ban or other limitation on the use of nitrogen fertilizer products,either generally or specifically those manufactured at our plant;and an event or incident involving a large clean-up,decontamination,or the imposition of laws and ordinances regulating the cost and schedule of demolition or

255、 reconstruction.Such regulatory oversight can cause significant delays in restoring property to its pre-loss condition.We have sustained losses over the past ten-year period at our nitrogen fertilizer plant,which are illustrative of the types of risks and hazards that exit.These losses or events res

256、ulted in costs assumed by us that were not fully insured due to policy retentions or applicable exclusions.These events were as follows:June 2007:the flood at CVR Refinings Coffeyville refinery and nitrogen fertilizer plant;and September 2010:the secondary urea reactor rupture at the nitrogen fertil

257、izer plant.The magnitude of the effect on us of any shutdown will depend on the length of the shutdown and the extent of the plant operations affected by the shutdown.Our plant requires a scheduled maintenance turnaround approximately every two to three years,which generally lasts up to three weeks.

258、Table of Contents18Currently,we are insured under CVR Energys casualty,environmental,property and business interruption insurance policies;the property and business interruption coverage has a combined policy limit of$1.0 billion.The property and business interruption insurance policies contain limi

259、ts and sub-limits which insure our assets as well as CVR Energys assets.There is a potential for a common occurrence to impact both the fertilizer plant and CVR Refinings Coffeyville refinery,in which case the insurance limitations would apply to all damages combined.Under this insurance program,the

260、re is a$2.5 million property damage retention in respect of the nitrogen fertilizer plant.For business interruption losses,the insurance program has a 45-day waiting period retention for any one occurrence.In addition,the insurance policies contain a schedule of the sub-limits which apply to certain

261、 specific perils or areas of coverage.Sub-limits which may be of importance depending on the nature and extent of a particular insured occurrence are:flood,earthquake,contingent business interruption insuring key suppliers and customers,debris removal,decontamination,demolition and increased cost of

262、 construction due to law and ordinance,and others.Such conditions,limits and sub-limits could materially impact insurance recoveries,and potentially cause us to assume losses which could impair earnings.The nitrogen fertilizer industry is highly capital intensive,and the entire or partial loss of fa

263、cilities can result in significant costs to participants,such as us,and their insurance carriers.There are risks associated with the commercial insurance industry,reducing capacity,changing the scope of insurance coverage offered and substantially increasing premiums due to adverse loss experience o

264、r other financial circumstances.Factors that impact insurance cost and availability include,but are not limited to:industry wide losses,natural disasters,specific losses incurred by us,and the investment returns earned by the insurance industry.If the supply of commercial insurance is curtailed due

265、to highly adverse financial results,CVR Energy or we may not be able to continue our present limits of insurance coverage or obtain sufficient insurance capacity to adequately insure our risks for property damage or business interruption.Deliberate,malicious acts,including terrorism,could damage our

266、 facilities,disrupt our operations or injure employees,contractors,customers or the public and result in liability to us.Intentional acts of destruction could hinder our sales or production and disrupt our supply chain.Our facilities could be damaged or destroyed,reducing our operational production

267、capacity and requiring us to repair or replace our facilities at substantial cost.Employees,contractors and the public could suffer substantial physical injury for which we could be liable.Governmental authorities may impose security or other requirements that could make our operations more difficul

268、t or costly.The consequences of any such actions could adversely affect our operating results,financial condition and ability to make distributions.Ammonia can be very volatile and extremely hazardous.Any liability for accidents involving ammonia or other products we produce or transport that cause

269、severe damage to property or injury to the environment and human health could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.In addition,the costs of transporting ammonia could increase significantly in the future.We manufacture

270、,process,store,handle,distribute and transport ammonia,which can be very volatile and extremely hazardous.Major accidents or releases involving ammonia could cause severe damage or injury to property,the environment and human health,as well as a possible disruption of supplies and markets.Such an ev

271、ent could result in civil lawsuits,fines,penalties and regulatory enforcement proceedings,all of which could lead to significant liabilities.Any damage to persons,equipment or property or other disruption of our ability to produce or distribute our products could result in a significant decrease in

272、operating revenues and significant additional cost to replace or repair and insure our assets,which could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.We periodically experience minor releases of ammonia related to leaks from

273、our equipment.We experienced more significant ammonia releases in August and September 2010 due to a heat exchanger leak and a UAN vessel rupture.Similar events may occur in the future.In addition,we may incur significant losses or costs relating to the operation of our railcars used for the purpose

274、 of carrying various products,including ammonia.Due to the dangerous and potentially toxic nature of the cargo,in particular ammonia,on board railcars,a railcar accident may result in fires,explosions and pollution.These circumstances may result in sudden,severe damage or injury to property,the envi

275、ronment and human health.In the event of pollution,we may be held responsible even if we are not at fault and we complied with the laws and regulations in effect at the time of the accident.Litigation arising from accidents involving ammonia and other products we produce or transport may result in o

276、ur being named as a defendant in lawsuits asserting claims for large amounts of damages,which could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.Given the risks inherent in transporting ammonia,the costs of transporting ammoni

277、a could increase significantly in the future.Ammonia is most typically transported by pipeline and railcar.A number of initiatives are underway in the railroad and chemical industries that may result in changes to railcar design in order to minimize railway accidents involving hazardous materials.In

278、 addition,in the future,laws may more severely restrict or eliminate our ability to transport ammonia via railcar.If Table of Contents19any railcar design changes are implemented,or if accidents involving hazardous freight increase the insurance and other costs of railcars,our freight costs could si

279、gnificantly increase.Environmental laws and regulations could require us to make substantial capital expenditures to remain in compliance or to remediate current or future contamination that could give rise to material liabilities.Our operations are subject to a variety of federal,state and local en

280、vironmental laws and regulations relating to the protection of the environment,including those governing the emission or discharge of pollutants into the environment,product specifications and the generation,treatment,storage,transportation,disposal and remediation of solid and hazardous waste and m

281、aterials.Violations of these laws and regulations or permit conditions can result in substantial penalties,injunctive orders compelling installation of additional controls,civil and criminal sanctions,permit revocations or facility shutdowns.In addition,new environmental laws and regulations,new int

282、erpretations of existing laws and regulations,increased governmental enforcement of laws and regulations or other developments could require us to make additional unforeseen expenditures.Many of these laws and regulations are becoming increasingly stringent,and the cost of compliance with these requ

283、irements can be expected to increase over time.The requirements to be met,as well as the technology and length of time available to meet those requirements,continue to develop and change.These expenditures or costs for environmental compliance could have a material adverse effect on our results of o

284、perations,financial condition and ability to make cash distributions.Our facility operates under a number of federal and state permits,licenses and approvals with terms and conditions containing a significant number of prescriptive limits and performance standards in order to operate.Our facility is

285、 also required to comply with prescriptive limits and meet performance standards specific to chemical facilities as well as to general manufacturing facilities.All of these permits,licenses,approvals,limits and standards require a significant amount of monitoring,record keeping and reporting in orde

286、r to demonstrate compliance with the underlying permit,license,approval,limit or standard.Incomplete documentation of compliance status may result in the imposition of fines,penalties and injunctive relief.Additionally,due to the nature of our manufacturing processes,there may be times when we are u

287、nable to meet the standards and terms and conditions of these permits and licenses due to operational upsets or malfunctions,which may lead to the imposition of fines and penalties or operating restrictions that may have a material adverse effect on our ability to operate our facilities and accordin

288、gly our financial performance.We could incur significant cost in cleaning up contamination at our fertilizer plant and off-site locations.Our business is subject to the occurrence of accidental spills,discharges or other releases of hazardous substances into the environment.Past or future spills rel

289、ated to our nitrogen fertilizer plant or transportation of products or hazardous substances from our facility may give rise to liability(including strict liability,or liability without fault,and potential cleanup responsibility)to governmental entities or private parties under federal,state or local

290、 environmental laws,as well as under common law.For example,we could be held strictly liable under the CERCLA for past or future spills without regard to fault or whether our actions were in compliance with the law at the time of the spills.Pursuant to CERCLA and similar state statutes,we could be h

291、eld liable for contamination associated with the facility we currently own and operate(whether or not such contamination occurred prior to our acquisition thereof),facilities we formerly owned or operated(if any)and facilities to which we transported or arranged for the transportation of wastes or b

292、yproducts containing hazardous substances for treatment,storage,or disposal.The potential penalties and cleanup costs for past or future releases or spills,liability to third parties for damage to their property or exposure to hazardous substances,or the need to address newly discovered information

293、or conditions that may require response actions could be significant and could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.In addition,we may incur liability for alleged personal injury or property damage due to exposure to c

294、hemicals or other hazardous substances located at or released from our facility.We may also face liability for personal injury,property damage,natural resource damage or for cleanup costs for the alleged migration of contamination or other hazardous substances from our facility to adjacent and other

295、 nearby properties.We may incur future costs relating to the off-site disposal of hazardous wastes.Companies that dispose of,or arrange for the transportation or disposal of,hazardous substances at off-site locations may be held jointly and severally liable for the costs of investigation and remedia

296、tion of contamination at those off-site locations,regardless of fault.We could become involved in litigation or other proceedings involving off-site waste disposal and the damages or costs in any such proceedings could be material.Table of Contents20We may be unable to obtain or renew permits necess

297、ary for our operations,which could inhibit our ability to do business.We hold numerous environmental and other governmental permits and approvals authorizing operations at our nitrogen fertilizer facility.Expansion of our operations is also predicated upon securing the necessary environmental or oth

298、er permits or approvals.A decision by a government agency to deny or delay issuing a new or renewed material permit or approval,or to revoke or substantially modify an existing permit or approval,could have a material adverse effect on our ability to continue operations and on our business,financial

299、 condition,results of operations and ability to make cash distributions.Environmental laws and regulations on fertilizer end-use and application and numeric nutrient water quality criteria could have a material adverse impact on fertilizer demand in the future.Future environmental laws and regulatio

300、ns on the end-use and application of fertilizers could cause changes in demand for our products.In addition,future environmental laws and regulations,or new interpretations of existing laws or regulations,could limit our ability to market and sell our products to end users.From time to time,various

301、state legislatures have proposed bans or other limitations on fertilizer products.The EPA is encouraging states to adopt state-wide numeric water quality criteria for total nitrogen and total phosphorus,which are present in our fertilizer products.A number of states have adopted or proposed numeric

302、nutrient water quality criteria for nitrogen and phosphorus.The adoption of stringent state criteria for nitrogen and phosphorus could reduce the demand for nitrogen fertilizer products in those states.If such laws,rules,regulations or interpretations to significantly curb the end-use or application

303、 of fertilizers were promulgated in our marketing area,it could result in decreased demand for our products and have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.Climate change laws and regulations could have a material adverse eff

304、ect on our results of operations,financial condition,and ability to make cash distributions.Various regulatory and legislative measures to address GHG emissions(including CO2,methane and nitrous oxides)are in various phases of discussion or implementation.In the aftermath of its 2009 endangerment fi

305、nding that GHG emissions pose a threat to public health and welfare,the EPA has begun to regulate GHG emissions under the authority granted to it under the Clean Air Act.In October 2009,the EPA finalized a rule requiring certain large emitters of GHGs to inventory and annually report their GHG emiss

306、ions to the EPA.In accordance with the rule,we began monitoring and reporting our GHG emissions from our nitrogen fertilizer plant.In May 2010,the EPA finalized the Greenhouse Gas Tailoring Rule,which established new GHG emissions thresholds that determine when stationary sources,such as our nitroge

307、n fertilizer plant,must obtain permits under the New Source Review/Prevention of Significant Deterioration(NSR)and Title V programs of the federal Clean Air Act.The significance of the permitting requirement is that,in cases where a new source is constructed or an existing source undergoes a major m

308、odification,the facility is required to undergo NSR review and evaluate and install air pollution controls to reduce GHG emissions.A major modification resulting in a significant increase in GHG emissions may require the installation of air pollution controls as part of the permitting process.Althou

309、gh the EPA has not yet proposed New Source Performance Standards(NSPS)to regulate GHG emissions for the nitrogen fertilizer plant,the EPA has proposed NSPS to regulate GHG for electric utilities.Therefore,we expect that the EPA will propose standards for our fertilizer plant,but the timing of any su

310、ch EPA proposal is not known.During a State of the Union address in January 2014 and again in January 2015,President Obama indicated that the United States should take action to address climate change.At the federal legislative level,this could mean Congressional passage of legislation adopting some

311、 form of federal mandatory GHG emission reduction,such as a nationwide cap-and-trade program.It is also possible that Congress may pass alternative climate change bills that do not mandate a nationwide cap-and-trade program and instead focus on promoting renewable energy and energy efficiency.In add

312、ition to potential federal legislation,a number of states have adopted regional GHG initiatives to reduce CO2 and other GHG emissions.In 2007,a group of Midwest states,including Kansas(where our nitrogen fertilizer facility is located),formed the Midwestern Greenhouse Gas Reduction Accord,which call

313、s for the development of a cap-and-trade system to control GHG emissions and for the inventory of such emissions.However,the individual states that have signed on to the accord must adopt laws or regulations implementing the trading scheme before it becomes effective,and it is unclear whether Kansas

314、 intends to do so.Alternatively,the EPA may take further steps to regulate GHG emissions.The implementation of EPA regulations and/or the passage of federal or state climate change legislation may result in increased costs to(i)operate and maintain our facility,(ii)install new emission controls on o

315、ur facility and(iii)administer and manage any GHG emissions program.Increased costs Table of Contents21associated with compliance with any future legislation or regulation of GHG emissions,if it occurs,may have a material adverse effect on our results of operations,financial condition and ability to

316、 make cash distributions.In addition,climate change legislation and regulations may result in increased costs not only for our business but also for users of our fertilizer products,thereby potentially decreasing demand for our fertilizer products.Decreased demand for our fertilizer products may hav

317、e a material adverse effect on our results of operations,financial condition and ability to make cash distributions.New regulations concerning the transportation,storage and handling of hazardous chemicals,risks of terrorism and the security of chemical manufacturing facilities could result in highe

318、r operating costs.The costs of complying with future regulations relating to the transportation,storage and handling of hazardous chemicals and security associated with our nitrogen fertilizer facility may have a material adverse effect on our results of operations,financial condition and ability to

319、 make cash distributions.Targets such as chemical manufacturing facilities may be at greater risk of future terrorist attacks than other targets in the United States.The chemical industry has responded to the issues that arose in response to the terrorist attacks on September 11,2001 by starting new

320、 initiatives relating to the security of chemical industry facilities and the transportation of hazardous chemicals in the United States.Future terrorist attacks could lead to even stronger,more costly initiatives that could result in a material adverse effect on our results of operations,financial

321、condition and ability to make cash distributions.The 2013 fertilizer plant explosion in West,Texas has generated consideration of more restrictive measures in the storage,handling and transportation of crop production materials,including fertilizers.Due to our lack of asset diversification,adverse d

322、evelopments in the nitrogen fertilizer industry could adversely affect our results of operations and our ability to make distributions to our unitholders.We rely exclusively on the revenues generated from our nitrogen fertilizer business.An adverse development in the nitrogen fertilizer industry wou

323、ld have a significantly greater impact on our operations and cash available for distribution to holders of common units than it would on other companies with a more diverse asset and product base.The largest publicly traded companies with which we compete sell a more varied range of fertilizer produ

324、cts.Our business depends on significant customers,and the loss of significant customers may have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.Our business has a high concentration of customers.In the aggregate,our top five UAN cust

325、omers represented 42%of our sales for the year ended December 31,2014.Given the nature of our business,and consistent with industry practice,we do not have long-term minimum purchase contracts with any of our customers.The loss of significant customers,or a significant reduction in purchase volume b

326、y customers,could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.There can be no assurance that the transportation costs of our competitors will not decline.Our nitrogen fertilizer plant is located within the U.S.farm belt,where

327、 the majority of the end users of our nitrogen fertilizers grow their crops.Many of our competitors produce fertilizer outside this region and incur greater costs in transporting their products over longer distances via rail,ships and pipelines.There can be no assurance that our competitors transpor

328、tation costs will not decline or that additional pipelines will not be built,lowering the price at which our competitors can sell their products,which could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.We are subject to strict

329、 laws and regulations regarding employee and process safety,and failure to comply with these laws and regulations could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.Our facility is subject to the requirements of the federal Oc

330、cupational Safety and Health Act,or OSHA,and comparable state statutes that regulate the protection of the health and safety of workers.In addition,OSHA and certain environmental regulations require that we maintain information about hazardous materials used or produced in our operations and that we

331、 provide this information to employees and state and local governmental authorities.Failure to comply with OSHA requirements,including general industry standards,record keeping requirements and monitoring and control of occupational exposure to regulated substances,could have a material adverse effe

332、ct on our results of operations,financial condition and ability to make cash distributions if we are subjected to significant fines or compliance costs.Table of Contents22Instability and volatility in the global capital,credit and commodity markets could negatively impact our business,financial cond

333、ition,results of operations and ability to make cash distributions.Our business,results of operations,financial condition and ability to make cash distributions could be negatively impacted by difficult conditions and extreme volatility in the capital,credit and commodities markets and in the global economy.For example:Although we believe we will have sufficient liquidity under our credit facility