1、Table of ContentsUNITED 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 31,2017ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES E
2、XCHANGEACT OF 1934 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
3、 Land,Texas(Address 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 interests
4、New York Stock Exchange 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 Sect
5、ion 13 or Section 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 rep
6、orts),and(2)has been 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 Regulati
7、on S-T(232.405 of 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 he
8、rein,and will not 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
9、,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of large accelerated filer,accelerated filer,smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer
10、(Do not check if a smaller reporting company)Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pu
11、rsuant to Section 13(a)of the Exchange Act.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 Yo
12、rk Stock Exchange closing price on June 30,2017(the last business day of the registrants second fiscal quarter)was$258,354,879.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 commo
13、n units as of June 30,2017 have been excluded 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 20,2018Common unit representin
14、g limited partner interests113,282,973 units1TABLE OF CONTENTS PagePART IItem 1.BusinessItem 1A.Risk FactorsItem 1B.Unresolved Staff CommentsItem 2.PropertiesItem 3.Legal ProceedingsItem 4.Mine Safety DisclosuresPART IIItem 5.Market For Registrants Common Equity,Related Unitholder Matters and Issuer
15、 Purchases of Equity SecuritiesItem 6.Selected Financial DataItem 7.Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A.Quantitative and Qualitative Disclosures About Market RiskItem 8.Financial Statements and Supplementary DataItem 9.Changes in and Disagreeme
16、nts With Accountants on Accounting and Financial DisclosureItem 9A.Controls and ProceduresItem 9B.Other InformationPART IIIItem 10.Directors,Executive Officers and Corporate GovernanceItem 11.Executive CompensationItem 12.Security Ownership of Certain Beneficial Owners and Management and Related Uni
17、tholder MattersItem 13.Certain Relationships and Related Transactions,and Director IndependenceItem 14.Principal Accounting Fees and ServicesPART IVItem 15.Exhibits,Financial Statement SchedulesItem 16.Form 10-K Summary41034343535363642606197979798103124126136137142Table of Contents2 GLOSSARY OF SEL
18、ECTED TERMSThe following are definitions of certain terms used in this Annual Report on Form 10-K for the year ended December 31,2017(this Report).2023 Notes$645.0 million aggregate principal amount of 9.250%Senior Secured Notes due 2023,which were issued through CVR Partners and CVR Nitrogen Financ
19、e Corporation.ABL Credit FacilityThe Partnerships senior secured asset based revolving credit facility with a group oflenders and UBS AG,Stamford Branch,as administrative agent and collateral agent.ammoniaAmmonia is a direct application fertilizer and is primarily used as a building block forother n
20、itrogen products for industrial applications and finished fertilizer products.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.Th
21、e maximum sustainable ornameplate capacities may not be the most economical.The economic capacity is thethroughput that generally provides the greatest economic benefit based onconsiderations such as feedstock costs,product values and downstream unitconstraints.Coffeyville FacilityCVR Partners nitro
22、gen fertilizer manufacturing facility located in Coffeyville,Kmon unitsCommon units representing limited partner interests of CVR Partners.corn beltThe primary corn producing region of the United States,which includes Illinois,Indiana,Iowa,Minnesota,Missouri,Nebraska,Ohio and Wisconsin.CRLLCCoffeyvi
23、lle Resources,LLC,the subsidiary of CVR Energy which indirectly owns ourgeneral partner and 38,920,000 common units.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 units owned
24、 by CRLLC.CVR NitrogenCVR Nitrogen,LP(formerly known as East Dubuque Nitrogen Partners,L.P.and alsoformerly known as Rentech Nitrogen Partners L.P.).CVR PartnersCVR Partners,LP.CVR RefiningCVR Refining,LP,a publicly traded limited partnership listed on the New York StockExchange under the ticker sym
25、bol 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)in Coffeyville,Kansas,a complex crude oil refinerywith a rated capacity of 70,000 bpcd in Wynnewood,Oklahoma and ancillarybusinesses.East Dubuq
26、ue FacilityCVR Partners nitrogen fertilizer manufacturing facility located in East Dubuque,Illinois.East Dubuque MergerThe transactions contemplated by the Merger Agreement,whereby the Partnershipacquired CVR Nitrogen and CVR Nitrogen GP,LLC on April 1,2016.ethanolA clear,colorless,flammable oxygena
27、ted hydrocarbon.Ethanol is typically producedchemically from ethylene,or biologically from fermentation of various sugars fromcarbohydrates 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 beltRefe
28、rs to the states of Illinois,Indiana,Iowa,Kansas,Minnesota,Missouri,Nebraska,North Dakota,Ohio,Oklahoma,South Dakota,Texas and Wisconsin.general partnerCVR GP,LLC,our general partner,which is a wholly-owned subsidiary of CRLLC.MMBtuOne million British thermal units:a measure of energy.One Btu of hea
29、t is required toraise the temperature of one pound of water one degree Fahrenheit.MSCFOne thousand standard cubic feet,a customary gas measurement.NYSEThe New York Stock Exchange.Table of Contents3netbackNetback represents net sales less freight revenue divided by product sales volume intons.Netback
30、 is also referred to as product pricing at gate.on-streamMeasurement of the reliability of the gasification,ammonia and UAN units,definedas the total number of hours operated by each unit divided by the total number ofhours in the reporting period.PartnershipCVR Partners,LP.pet cokePetroleum coke a
31、coal-like substance that is produced during the oil refiningprocess.product 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.southern plainsPrimarily includes Oklahoma,Texas
32、and New Mexico.tonOne ton is equal to 2,000 pounds.turnaroundA periodically required standard procedure to refurbish and maintain a facility thatinvolves the shutdown and inspection of major processing units.UANUAN is an aqueous solution of urea and ammonium nitrate used as a fertilizer.Table of Con
33、tents4PART IItem 1.BusinessOverviewCVR 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.We produce and distribute nitrogen fertilizer products,which are used by farmers to improve the
34、 yield and quality of their crops.Our principal products are UAN and ammonia.All of our products are sold on a wholesale basis.We produce our nitrogen fertilizer products at two manufacturing facilities,which are located in Coffeyville,Kansas and East Dubuque,Illinois.Our Coffeyville Facility includ
35、es a 1,300 ton-per-day capacity ammonia unit,a 3,000 ton-per-day capacity UAN unit,and a gasifier complex having a capacity of 89 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 red
36、undancy and improving our reliability.Strategically located adjacent to CVR Refinings refinery in Coffeyville,Kansas,our Coffeyville Facility is the only operation in North America that utilizes a petroleum coke,or pet coke,gasification process to produce nitrogen fertilizer.During the past five yea
37、rs,over 70%of the pet coke consumed by our Coffeyville Facility was produced and supplied by CVR Refinings Coffeyville,Kansas crude oil refinery.We upgrade the majority of the ammonia we produce at our Coffeyville Facility to higher margin UAN,which has historically commanded a premium price over am
38、monia.Approximately 88%of our Coffeyville Facility produced ammonia tons were upgraded into UAN in 2017.Our East Dubuque Facility includes a 1,075 ton-per-day capacity ammonia unit and a 1,100 ton-per-day capacity UAN unit.The facility is located on a bluff above the Mississippi River,with access to
39、 the river for loading certain products.The East Dubuque Facility uses natural gas as its primary feedstock.The East Dubuque Facility has the flexibility to significantly vary its product mix.This enables us to upgrade our ammonia production into varying amounts of UAN,nitric acid and liquid and gra
40、nulated urea each season,depending on market demand,pricing and storage availability.Product sales are heavily weighted toward sales of ammonia and UAN.Approximately 44%of our East Dubuque Facility produced ammonia tons were upgraded to other products in 2017.CVR Energy,which indirectly owns our gen
41、eral partner and approximately 34%of our outstanding common units,also indirectly owns the general partner and approximately 66%of the outstanding common units of CVR Refining at December 31,2017.We generated net sales of$330.8 million and a net loss of$72.8 million for the year ended December 31,20
42、17.Our total assets balance as of December 31,2017 was$1,234.3 million.Table of Contents5Organizational Structure and Related OwnershipThe following chart illustrates the organizational structure of the Partnership as of the date of this Report.Table of Contents6 Raw Material SupplyCoffeyville Facil
43、ityOur Coffeyville Facility was built in 2000 and uses a gasification process to convert pet coke to high purity hydrogen for subsequent conversion to ammonia.Our Coffeyville Facilitys pet coke gasification process results in a higher percentage of fixed costs than a natural gas-based fertilizer pla
44、nt.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 parties such as other Midwestern re
45、fineries or pet coke brokers at spot-prices.We are party to a pet coke supply agreement with HollyFrontier Corporation that ends in December 2018,and we have historically renewed this agreement annually.If necessary,there are other pet coke suppliers.We also purchased some of our hydrogen from CVR R
46、efinings adjacent crude oil refinery pursuant to a long-term agreement.The pet coke gasification process is licensed from an affiliate of General Electric Company.The license grants us perpetual rights to use the pet coke gasification process on specified terms and conditions,and the license is full
47、y paid.Linde LLC(Linde)owns,operates,and maintains the air separation plant that provides contract volumes of oxygen,nitrogen,and compressed dry air to our gasifiers.East Dubuque FacilityThe East Dubuque Facility uses natural gas to produce nitrogen fertilizer.We are able to purchase natural gas at
48、competitive prices due to the plants connection to the Northern Natural Gas interstate pipeline system,which is within one mile of the facility,and the ANR Pipeline Company pipeline.The pipelines are connected to Nicor Inc.s distribution system at the Chicago Citygate receipt point and at the Hampsh
49、ire interconnect,from which natural gas is transported to the facility.Changes in the levels of natural gas prices and market prices of nitrogen-based products can materially affect our financial position and results of operations.Natural gas prices in the United States have experienced significant
50、fluctuations over the last decade,increasing substantially in 2008 and subsequently declining to the current lower levels.From time to time,we enter into forward contracts with fixed delivery prices to purchase portions of our natural gas requirements.As of December 31,2017,we had commitments to pur
51、chase approximately 1.8 million MMBtus of natural gas supply for planned use in our East Dubuque Facility in January and February 2018 at a weighted average rate per MMBtu of approximately$3.20,exclusive of transportation cost.Distribution,Sales and MarketingThe primary geographic markets for our fe
52、rtilizer products are Illinois,Iowa,Kansas,Nebraska,and Texas.We primarily market the UAN products to agricultural customers and ammonia products to agricultural and industrial customers.UAN and ammonia accounted for approximately 67%and 25%,respectively,of our total net sales for the year ended Dec
53、ember 31,2017.UAN and ammonia are primarily distributed by truck or by railcar.If delivered by truck,products are most commonly sold on a FOB shipping point basis,and freight is normally arranged by the customer.We lease and own a fleet of railcars for use in product delivery,and,if delivered by rai
54、lcar,our products are most commonly sold on a FOB destination point basis and we typically arrange the freight.Our products leave our Coffeyville Facility either in railcars for destinations located primarily on the Union Pacific Railroad or in trucks for direct shipment to customers.The East Dubuqu
55、e Facility primarily sells its product to customers located within 200 miles of the facility.In most instances,customers take delivery of nitrogen products at the East Dubuque Facility and arrange and pay to transport them to their final destinations by truck.We have the capacity to store approximat
56、ely 160,000 tons of UAN and 80,000 tons of ammonia.Our storage tanks are located primarily at our two production facilities.Inventories are often allowed to accumulate to allow customers to take delivery to meet the seasonal demand.While we do experience higher sales volumes due to seasonality durin
57、g the fall and spring application periods,we sell our product to customers throughout the year.We offer our agricultural products on a spot,forward or prepay basis.We often use forward sales of our fertilizer products to optimize our asset utilization,planning process and production scheduling.These
58、 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 our view of market conditions.Fixing the selling prices of our products mont
59、hs in advance of their ultimate delivery to customers typically causes our reported selling prices and margins to differ from spot market prices and margins available at the time of shipment.Cash received as a result of prepayments is recognized as deferred revenue on our Consolidated Balance Sheet
60、upon receipt,and revenue and resultant net income and EBITDA are recorded as the product is delivered.Table of Contents7CustomersWe sell UAN products to retailers and distributors.In addition,we sell ammonia to agricultural and industrial customers.Given the nature of our business,and consistent wit
61、h industry practice,we do not have long-term minimum purchase contracts with most of our agricultural customers.Some of our industrial sales include long-term purchase contracts.For the year ended December 31,2017,the top five customers in the aggregate represented 31%of our net sales.Our top custom
62、er on a consolidated basis accounted for approximately 11%of our net sales.While we do have high concentration of customers,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 distributi
63、ons.Refer to Part I,Item 1A,Risk Factors,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,of this Report for further discussion.CompetitionWe
64、have experienced and expect to continue to meet significant levels of competition from current and potential competitors,many of whom have significantly greater financial and other resources.Refer to Part I,Item 1A,Risk Factors,Nitrogen fertilizer products are global commodities,and we face intense
65、competition from other nitrogen fertilizer producers,of this Report for further discussion.Competition in our industry is dominated by price considerations.However,during the spring and fall application seasons,farming activities intensify and delivery capacity is a significant competitive factor.We
66、 maintain a large fleet of leased and owned railcars and seasonally adjust inventory to enhance our manufacturing and distribution operations.Our major competitors include CF Industries Holdings,Inc.,including its majority owned subsidiary Terra Nitrogen Company,L.P.;Koch Fertilizer Company,LLC;and
67、Nutrien Ltd.(formerly known as Agrium,Inc.and Potash Corporation of Saskatchewan,Inc.).Domestic competition is intense due to customers sophisticated buying tendencies and competitor strategies that focus on cost and service.We also encounter competition from producers of fertilizer products manufac
68、tured in foreign countries.In certain cases,foreign producers of fertilizer who export to the United States may be subsidized by their respective governments.SeasonalityBecause we primarily sell agricultural commodity products,our business is exposed to seasonal fluctuations in demand for nitrogen f
69、ertilizer products in the agricultural industry.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 a harvest.The spec
70、ific 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.We typically experience higher pricing in the first half of the calendar year,which we refer to as the planting season,and
71、our pricing tends to be lower during the second half of each calendar year,which we refer to as the fill season.Environmental MattersOur business is subject to extensive and frequently changing federal,state and local,environmental,health and safety laws and regulations governing the emission and re
72、lease 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 underlying regulatory requirements and the enforcement thereof impact us by imposing:rest
73、rictions 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 groundwater at current and former facilities(if any)and off-site waste disposal locatio
74、ns;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 generally could result in fines,penalties or other sanctions or a revocation of our permits
75、.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 or state agencies.These laws and regulations could result in increased capital,operating and
76、compliance costs or result in delays or limits to our operations or growth while attempting to obtain required permits.Table of Contents8The principal environmental risks associated with our business are outlined below,with additional details included in Part I,Item 1A,Risk Factors and Note 13(Commi
77、tments and Contingencies)to Part II,Item 8 of this Report.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 Acts permit
78、ting 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,or any fut
79、ure promulgations of standards,may require the installation of controls or changes to our nitrogen fertilizer facilities 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,or other
80、presently existing or future environmental regulations could cause us to expend substantial resources to comply and/or permit our facilities to produce products that meet applicable requirements.The regulation of air emissions under the federal Clean Air Act requires that we obtain various construct
81、ion 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 Standar
82、ds and New Source Review.Release ReportingThe release of hazardous substances 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 substan
83、ces from our equipment.Our facilities periodically have excess emission events from flaring and other planned and unplanned startup,shutdown and malfunction events.Such releases are reported to the U.S.Environmental Protection Agency(the EPA)and relevant state and local agencies.From time to time,th
84、e EPA has conducted inspections and issued information requests to us with respect to our compliance with release reporting 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 timel
85、y or properly report a release,or if the release violates the law or our permits,it could cause us to become the subject of a governmental enforcement action or third-party claims.Government enforcement or third-party claims relating to releases of hazardous or extremely hazardous substances could r
86、esult in significant expenditures and liability.Greenhouse Gas EmissionsRefer to Part I,Item 1A,Risk Factors,Climate change laws and regulations could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions,of this Report for further dis
87、cussion of the Greenhouse Gas(GHG)Emissions regulations.Environmental RemediationAs 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 proper
88、ty 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 were
89、 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.The policy includes business interruption coverage.The policy ins
90、ures any location owned,leased,rented or operated by the Partnership,including our nitrogen fertilizer facilities.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
91、site pollution legal liability insurance policy,we benefit from umbrella and excess casualty insurance policies maintained by CVR Energy.This insurance provides coverage due to named perils for claims involving pollutants where the discharge is sudden and accidental and first commences at a specific
92、 day and time during the policy period.The site pollution legal liability policy and the pollution coverage provided in the casualty insurance policies are subject to retentions and deductibles and contain discovery requirements,reporting requirements,exclusions,definitions,conditions and limitation
93、s that could apply to a particular pollution claim,and there can be no assurance such claim will be adequately insured for all potential damages.Table of Contents9Safety,Health and Security MattersWe are subject to a number of federal and state laws and regulations related to safety,including the Oc
94、cupational Safety 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 releas
95、es of toxic,reactive,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 a
96、chieve excellence 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.EmployeesAs of December 31,2017,we had 304 direct employees.
97、As of December 31,2017,these employees are covered by health insurance,disability and retirement plans established by CVR Energy.We believe that our relationship with our employees is good.As of December 31,2017,the Coffeyville Facility employed 151 of our employees,of whom none were unionized.As of
98、 December 31,2017,the East Dubuque Facility employed 148 of our employees,about 64%of whom were represented by the International Union of United Automobile,Aerospace,and Agricultural Implement Workers under a collective bargaining agreement that expires in October 2019.We also rely on the services o
99、f employees of CVR Energy and its subsidiaries pursuant to a services agreement between us,CVR Energy and our general partner.Additionally,the Partnerships general partner manages the Partnerships operations and activities as specified in the partnership agreement and had 4 employees as of December
100、31,2017.For more information on these agreements,see Note 14(Related Party Transactions)to Part II.Item 8 of this Report.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 filed o
101、r furnished pursuant to Section 13(a)or 15(d)of the Securities Exchange Act of 1934,as amended,are available free of charge through our website under Investor Relations,as soon as reasonably practicable after the electronic filing or furnishing of these reports is made with the Securities and Exchan
102、ge Commission(the SEC).In addition,our Corporate Governance Guidelines,Codes of Ethics and Business Conduct and the Charter of the Audit 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 a
103、lso available in print without charge to any unitholder requesting them.We do not intend for information contained in our website to be part of this Report.Table of Contents10Item 1A.Risk FactorsYou should carefully consider each of the following risks together with the other information contained i
104、n this Report and all of the information set forth in our filings with the SEC.If any of the following risks and uncertainties develops 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
105、pay distributions on our common units,the trading 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 differ
106、ent from the capital stock of a corporation and 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 o
107、n a quarterly basis or otherwise,and may elect to 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
108、quarterly basis or otherwise.Although our general partners current policy is to distribute all of our available cash on a quarterly basis.Available cash is defined as Adjusted EBITDA reduced for cash needed for(i)net cash interest expense(excluding capitalized interest)and debt service and other con
109、tractual obligations;(ii)maintenance capital expenditures;and(iii)to the extent applicable,major scheduled turnaround expenses,reserves for future operating or capital needs that the board of directors of the general partner deems necessary or appropriate,and expenses associated with the East Dubuqu
110、e Merger,if any.Available cash for distribution may be increased by the release of previously established cash reserves,if any,at the discretion of the board of directors of our general partner and available cash is increased by the business interruption insurance proceeds.The board of directors of
111、our general partner may at any time,for any reason,change this 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 di
112、rectly dependent upon the operating margins we generate,which 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 production costs,as well as seasonality,weather conditions,government
113、al regulation,unscheduled maintenance 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
114、of our general partner,whose interests 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 current debt instrument
115、s,and debt instruments that we enter into in the future,may limit the distributions that we can make.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 ferti
116、lizer products,fluctuations in our working capital needs,and 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 busine
117、ss performance will be more seasonal and volatile,and our 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 publicl
118、y traded partnerships,we do not have a minimum quarterly distribution 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 histor
119、ically as a result of volatile nitrogen fertilizer and natural 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 common unitholders will
120、 vary significantly from quarter to quarter and may be zero.Table of Contents11The 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
121、 of the amount of available cash we generate.Our partnership agreement 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 common unitholders of record on a pro rata basis.However,the board of
122、 directors of our general partner may change such policy at any time at 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 modifica
123、tion or revocation of our cash distribution policy could substantially reduce or eliminate the amounts of distributions to our common unitholders.The nitrogen fertilizer business is,and nitrogen fertilizer prices are,cyclical and highly volatile and have experienced substantial downturns in the past
124、.Cycles in demand and pricing could potentially expose us to significant fluctuations 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
125、 nitrogen fertilizer demand in the agricultural industry.These fluctuations historically 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 signific
126、ant volatility or material reductions in the price of our common units or an inability 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 facto
127、rs,including general economic conditions,cyclical trends in end-user markets,supply 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 p
128、roduction,our customers may acquire nitrogen fertilizer products from our competitors,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
129、 dependent on demand for crop nutrients by the global agricultural industry.The 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 existen
130、ce of,or changes in,import or foreign currency exchange barriers in certain foreign 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.Nitr
131、ogen-based fertilizers remain solidly in demand,driven by a growing world population,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
132、nitrogen fertilizer prices would have a material adverse effect on our business,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
133、 common unitholders and the trading price of our common units may be adversely impacted.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 o
134、bligations,pursue our business strategies or comply with certain environmental standards,which would have a material adverse effect on our business and results of operations.As of December 31,2017,we had cash and cash equivalents of$49.2 million and had availability under the ABL Credit Facility of$
135、43.8 million.The costs associated with operating our nitrogen fertilizer plants include significant fixed costs.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 adver
136、sely impacted.Unlike our competitors,whose primary costs are related to the purchase of natural gas and whose costs are therefore largely variable,our Coffeyville Facility has largely fixed costs.In addition,while less than our Coffeyville Facility,our East Dubuque Facility has a significant amount
137、of fixed costs.As a result of the fixed cost nature of our operations,downtime,interruptions or low productivity 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 m
138、aterial adverse effect on our results of operations,financial condition and ability to make cash distributions.Table of Contents12Continued low natural gas prices could impact our Coffeyville Facilitys relative competitive position when compared to other nitrogen fertilizer producers.Most nitrogen f
139、ertilizer manufacturers rely on natural gas as their primary feedstock,and the cost of natural gas 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
140、making us less competitive with natural gas-based nitrogen fertilizer manufacturers.Continued low natural gas prices could impair the ability of our Coffeyville Facility to compete with other nitrogen fertilizer producers who utilize natural gas as their primary feedstock if nitrogen fertilizer pric
141、ing drops as a result of low natural gas prices,and therefore have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.The market for natural gas has been volatile.Natural gas prices are currently at a relative low point.An increase in na
142、tural gas prices could impact our East Dubuque Facilitys relative competitive position when compared to other foreign and domestic nitrogen fertilizer producers,and if prices for natural gas increase significantly,we may not be able to economically operate our East Dubuque Facility.The operation of
143、our East Dubuque Facility with natural gas as the primary feedstock exposes us to market risk due to increases in natural gas prices,particularly if the price of natural gas in the United States were to become higher than the price of natural gas outside the United States.An increase in natural gas
144、prices would impact our East Dubuque Facilitys operations by making us less competitive with competitors who do not use natural gas as their primary feedstock,and could therefore have a material adverse impact on our results of operations,financial condition and cash flows.In addition,if natural gas
145、 prices in the United States were to increase relative to prices of natural gas paid by foreign nitrogen fertilizer producers,this may negatively affect our competitive position in the corn belt and thus have a material adverse effect on our results of operations,financial condition and cash flows.T
146、he profitability of operating our East Dubuque Facility is significantly dependent on the cost of natural gas,and our East Dubuque Facility operated at certain times,and could operate in the future,at a net loss.Local factors may affect the price of natural gas available to us,in addition to factors
147、 that determine the benchmark prices of natural gas.We expect to purchase natural gas on the spot market and to enter into forward purchase contracts.Since we expect to purchase a portion of our natural gas for use in our East Dubuque Facility on the spot market,we remain susceptible to fluctuations
148、 in the price of natural gas in general and in local markets in particular.We also expect to use short-term,fixed supply,fixed price forward purchase contracts to lock in pricing for a portion of our natural gas requirements.Our ability to enter into forward purchase contracts is dependent upon our
149、creditworthiness and,in the event of a deterioration in our credit,counterparties could refuse to enter into forward purchase contracts on acceptable terms.If we are unable to enter into forward purchase contracts for the supply of natural gas,we would need to purchase natural gas on the spot market
150、,which would impair our ability to hedge our exposure to risk from fluctuations in natural gas prices.If we enter into forward purchase contracts for natural gas,and natural gas prices decrease,then our cost of sales could be higher than it would have been in the absence of the forward purchase cont
151、racts.Any interruption in the supply of natural gas to our East Dubuque Facility through Nicor Inc.(Nicor)could have a material adverse effect on our results of operations and financial condition.Our East Dubuque operations depend on the availability of natural gas.We have an agreement with Nicor pu
152、rsuant to which we access natural gas from the ANR Pipeline Company and Northern Natural Gas pipelines.Our access to satisfactory supplies of natural gas through Nicor could be disrupted due to a number of causes,including volume limitations under the agreement,pipeline malfunctions,service interrup
153、tions,mechanical failures or other reasons.The agreement extends through October 31,2019.Upon expiration of the agreement,we may be unable to extend the service under the terms of the existing agreement or renew the agreement on satisfactory terms,or at all.Any disruption in the supply of natural ga
154、s to our East Dubuque Facility could restrict our ability to continue to make products at the facility.In the event we need to obtain natural gas from another source,we would need to build a new connection from that source to our East Dubuque Facility and negotiate related easement rights,which woul
155、d be costly,disruptive and/or may be unfeasible.As a result,any interruption in the supply of natural gas through Nicor could have a material adverse effect on our results of operations and financial condition.Any decline in U.S.agricultural production or limitations on the use of nitrogen fertilize
156、r for agricultural purposes 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
157、 industry can be affected 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
158、.Table of Contents13State 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,the mix of crops planted and the use of fertilizers for p
159、articular 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 affect the demand for nitrogen fertilizer.In addition,from t
160、ime 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 could negatively affect nitrogen fertilizer prices and there
161、fore 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 nitrogen-based fertilizer products is the production of ethanol.A decrease in ethanol production,an increase in ethan
162、ol 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 the solid level of demand for nitrogen-based fertilizer prod
163、ucts 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 significantly more competitive by various federal and state incentives and mandat
164、ed usage of renewable fuels pursuant to the federal Renewable Fuel Standards(RFS).To date,the RFS has been satisfied 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 incr
165、ease the level of greenhouse gases in the environment as well as be unsuitable for small engine use,have resulted 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-base
166、d ethanol production,planted corn acreage and fertilizer demand.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 late 2013,the EPA recognized that the transportation
167、 fuels market had reached the“blend wall”for ethanol.The blend wall refers to the aggregate limit to which ethanol can be blended into gasoline,and is generally considered to be reached when a gallon of transportation fuel contains 10%ethanol by volume.As a result,since 2013,the EPA has used its wai
168、ver authorities to set lower renewable volume obligations than those mandated by the RFS,though those volumes still generally increase year-over-year as demand for transportation fuel also increases.Even so,the most recent volume mandates have resulted in or are expected to result in renewable fuel
169、being blended in volumes that exceed the ethanol blend wall,forcing the use of higher ethanol fuel blends or non-ethanol renewable fuel.The EPA continues to articulate a policy to incentivize additional investments in renewable fuel blending and distribution infrastructure.Any substantial decrease i
170、n future renewable volume obligations under the RFS could have a material adverse effect on ethanol production in the United States,which could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.Further,while most ethanol is current
171、ly produced from corn and other raw grains,such as milo or sorghum,the RFS requires that a portion of the overall RFS renewable fuel mandate comes from advanced biofuels,including cellulose-based biomass,such as agricultural waste,forest residue,municipal solid waste,energy crops(plants grown for us
172、e 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 other than corn and raw grains for ethanol production.If this trend is successful,the demand for corn may decrease significantly,which c
173、ould reduce demand for our nitrogen fertilizer products and have an adverse effect on 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
174、 nitrogen fertilizer product usage in connection with the production of cellulosic biofuels.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 sour
175、ces,including competitors operating in the Middle East,the Asia-Pacific region,the Caribbean,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
176、of the product.Increased global supply may put downward pressure on fertilizer prices.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
177、other countries,including state-owned and government-subsidized entities.Some competitors have greater total resources and are less dependent on earnings from fertilizer sales,which make them less vulnerable to industry downturns and better positioned to pursue new expansion and development opportun
178、ities.Increased domestic supply may put downward pressure on fertilizer prices.Competitors utilizing different corporate structures may be better able to withstand lower cash flows than we can as a limited partnership.Our competitive Table of Contents14position could suffer to the extent we are not
179、able to expand our own resources either through investments in new or existing operations or through acquisitions,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
180、 cash distributions.Adverse weather conditions during peak fertilizer application periods may have a material 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 nitroge
181、n fertilizer products to agricultural customers are concentrated in the Great Plains and Midwest states and are seasonal in nature.Accordingly,an adverse weather pattern affecting agriculture in these regions or during the planting season could have a negative effect on fertilizer demand,which could
182、,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 significantly from one year to the next due largely to weather-relate
183、d 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 result in our carrying significant amounts of inventory and seasonal va
184、riations 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 during two short application periods,one in the spring and the other in th
185、e fall.In contrast,we and other nitrogen fertilizer producers generally produce our products throughout the year.As a result,we and our customers generally build inventories during the low demand periods of the year in order to ensure timely product availability during the peak sales seasons.Variati
186、ons in the proportion of product sold through prepaid sales contracts and variations in the terms of such contracts can increase the seasonal volatility of our cash flows and cause changes in the patterns of seasonal volatility from year-to-year.In most instances,our East Dubuque customers take deli
187、very of our nitrogen products at our East Dubuque Facility.Customers arrange and pay to transport our nitrogen products to their final destinations.At our East Dubuque Facility,inventories are accumulated to allow for customer to take delivery to meet the seasonal demand,which require significant st
188、orage capacity.The accumulation of inventory to be available for seasonal sales creates significant seasonal working capital requirements.Most of our Coffeyville Facility nitrogen products are delivered by railcar to our customers storage facilities.Therefore,we are less dependent on storage capacit
189、y at the Coffeyville Facility and,as a result,experience lower seasonal fluctuations as compared to our East Dubuque Facility.The seasonality of nitrogen fertilizer demand results in our sales volumes and net sales being highest during the North American spring season and our working capital require
190、ments typically being highest just prior to the start of the spring season.If seasonal demand exceeds our projections,we may not have enough product and our customers may acquire products from our competitors,which would negatively impact our profitability.If seasonal demand is less than we expect,w
191、e may 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 our seasonality,we expect that our distr
192、ibutions will be volatile and will vary quarterly and annually.Our operations are dependent on third-party suppliers,including the following:Linde,which owns an air separation plant that provides oxygen,nitrogen and compressed dry air to our Coffeyville Facility;the City of Coffeyville,which supplie
193、s the Coffeyville Facility with electricity;and Jo-Carroll Energy,Inc.(Jo-Carroll Energy),which supplies our East Dubuque Facility 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-part
194、y supplier to perform in accordance with its contractual obligations could have a material adverse effect on our results of operations,financial condition and on our ability to make cash distributions.Our Coffeyville Facility operations depend in large part on the performance of third-party supplier
195、s,including Linde for the supply of oxygen,nitrogen and compressed dry air,and the City of Coffeyville for the supply of electricity.With respect to Linde,the operations of our Coffeyville Facility could be adversely affected if there were a deterioration in Lindes financial condition such that the
196、operation of the air separation plant located adjacent to our Coffeyville Facility was disrupted.Additionally,this air separation plant in the past has experienced numerous short-term interruptions,causing interruptions in our gasifier operations.With respect to electricity,we are party to an electr
197、ic services agreement with the City of Coffeyville,Kansas which gives us an option to extend the term of such agreement through June 30,2024.Table of Contents15Our East Dubuque Facility operations also depend in large part on the performance of third-party suppliers,including,Jo-Carroll Energy for t
198、he purchase of electricity.We entered into a utility service agreement with Jo-Carroll Energy,which terminates on May 31,2019 and will continue year-to-year thereafter unless either party provides 12-month advance written notice of termination.Should Linde,the City of Coffeyville,Jo-Carroll Energy o
199、r any of our other third-party suppliers fail to perform in accordance with existing contractual arrangements,or should we otherwise lose the service of any third-party suppliers,our operations(or a portion of our operations)could be forced to halt.Alternative sources of supply could be difficult to
200、 obtain.Any shutdown of our operations,(or a portion of our operations),even for 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 distri
201、butions may be adversely affected by the supply and price levels of pet coke.Failure by CVR Refining to continue to supply our Coffeyville Facility 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 prov
202、ide it with security for our payment obligations,could negatively impact our results of operations.Our Coffeyville Facilitys 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 agreemen
203、t and pet coke purchased from third parties,both of which vary based on market prices.Pet coke is a key raw material used by our Coffeyville Facility 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 cos
204、ts,because market prices for our nitrogen fertilizer products are not correlated with pet coke prices.Based on our current output,we obtain most(over 70%on average during the last five years)of the pet coke we need for our Coffeyville Facility from CVR Refinings adjacent crude oil refinery,and procu
205、re 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(subject 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
206、 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 with our existing agreement,we would need to purchase pet coke from third parties on the open market,which could negatively impac
207、t 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 coke.In addition,we could experience production delays or cost increases if alternative sources of supply prove to be more expensi
208、ve 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 dependent on pet coke purchases from third-party suppliers at open market prices.We are party to a pet coke supply agreement wi
209、th HollyFrontier Corporation.The term of this agreement ends in December 2018.There is no assurance that we would be able to purchase pet coke on comparable terms from third parties or at all.We rely on third-party providers of transportation services and equipment,which subjects us to risks and unc
210、ertainties 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 customers of our Coffeyville Facility.We also lease railcars from railcar o
211、wners in order to ship our finished products.Additionally,although our customers generally pick up our products at our East Dubuque Facility,we occasionally rely on barge,truck and railroad companies to ship products to our customers.These transportation operations,equipment and services are subject
212、 to various hazards,including extreme weather conditions,work stoppages,delays,spills,derailments and other accidents and other operating hazards.For example,barge transport can be impacted by lock closures resulting from inclement weather or surface conditions,including fog,rain,snow,wind,ice,stron
213、g currents,floods,droughts and other unplanned natural phenomena,lock malfunction,tow conditions and other conditions.Further,the limited number of towing companies and of barges available for finished product transport may also impact the availability of transportation for our products.These transp
214、ortation operations,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,n
215、ew regulations could 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 affecti
216、ng transportation operations 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.Table of Contents16Our facilities face significant risks due to p
217、hysical damage hazards,environmental liability 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 pr
218、oduction which are not fully insured.Insurance 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 are subject to significant operating hazards and interruptions.I
219、f our production plants or individual units within our plants,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 abi
220、lity to make cash distributions.Moreover,our Coffeyville Facility is located adjacent to CVR Refinings Coffeyville refinery,and a major accident or disaster at the refinery could adversely affect our operations at the Coffeyville Facility.Operations at our nitrogen fertilizer plants could be curtail
221、ed or partially or completely shut down,for an extended 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,c
222、ontamination,fire,or natural disasters,including flood,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 one or both of our nitrogen fertilizer plants dictated by environmental authorities;a disru
223、ption in the supply of pet coke to our Coffeyville Facility or natural gas to our East Dubuque Facility;a governmental ban or other limitation on the use of nitrogen fertilizer products,either generally or specifically those manufactured at our nitrogen fertilizer plants;and an event or incident inv
224、olving a large clean-up,decontamination,or the imposition of laws and ordinances regulating the cost and schedule of demolition or 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 per
225、iod at our facilities,which are illustrative of the types of risks and hazards that exist.These losses or events resulted in costs assumed by us that were not fully insured due to policy retentions or applicable exclusions.The magnitude of the effect on us of any shutdown will depend on the length o
226、f the shutdown and the extent of the plant operations affected by the shutdown.Our plants require scheduled maintenance turnarounds approximately every two to three years,which generally lasts two to four weeks.Currently,we are insured under CVR Energys casualty,environmental,property and business i
227、nterruption insurance policies.The property and business interruption policies insure real and personal property,including property located at our facilities.There is a potential for a common occurrence to impact both the Coffeyville Facility and CVR Refinings Coffeyville refinery,in which case the
228、insurance limitations would apply to all damages combined.These policies are subject to limits,sub-limits,retentions(financial and time-based)and deductibles.The application of these and other policy conditions could materially impact insurance recoveries,and potentially cause us to assume losses wh
229、ich could impair earnings.The nitrogen fertilizer industry is highly capital intensive,and the entire or partial loss of facilities can result in significant costs to participants,such as us,and their insurance carriers.There are risks associated with the commercial insurance industry,reducing capac
230、ity,changing the scope of insurance coverage offered and substantially increasing premiums resulting from highly adverse loss experience or other financial circumstances.Factors that impact insurance cost and availability include,but are not limited to:industry wide losses,natural disasters,specific
231、 losses incurred by us,and low or inadequate investment returns earned by the insurance industry.If the supply of commercial insurance is curtailed due to highly adverse financial results,CVR Energy or we may not be able to continue our present limits of insurance coverage or obtain sufficient insur
232、ance capacity to adequately insure our risks for property damage or business interruption.Table of Contents17Deliberate,malicious acts,including terrorism,could damage our facilities,disrupt our operations or injure employees,contractors,customers or the public and result in liability to us.Intentio
233、nal 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 capacity and requiring us to repair or replace our facilities at substantial cost.Employees,contractors and the public could suff
234、er substantial physical injury for which we could be liable.Governmental authorities may impose security or other requirements that could make our operations more difficult or costly.The consequences of any such actions could adversely affect our operating results,financial condition and ability to
235、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 severe damage to property or injury to the environment and human health could have a material adverse effect on our results of op
236、erations,financial condition and ability to make cash distributions.In addition,the costs of transporting ammonia could increase significantly in the future.We manufacture,process,store,handle,distribute and transport ammonia,which can be very volatile and extremely hazardous.Major accidents or rele
237、ases 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 event could result in civil lawsuits,fines,penalties and regulatory enforcement proceedings,all of which could lead to significant
238、liabilities.Any damage or injury to persons,equipment or property or other disruption of our ability to produce or distribute our products could result in a significant decrease in operating revenues and significant additional cost to replace or repair and insure our assets,which could have a materi
239、al 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 our equipment.Similar events may occur in the future.In addition,we may incur significant losses or costs relating to t
240、he operation of our railcars used for the purpose of carrying various products,including ammonia.Due to the dangerous and potentially hazardous nature of the cargo,in particular ammonia,on board railcars,a railcar accident may result in fires,explosions and pollution.These circumstances may result i
241、n sudden,severe damage or injury to property,the environment 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 o
242、ther products we produce or transport may result in our 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
243、transporting ammonia,the costs of transporting ammonia 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 minimi
244、ze railway accidents involving hazardous materials.In addition,in the future,laws may more severely restrict or eliminate our ability to transport ammonia via railcar.If any railcar design changes are implemented,or if accidents involving hazardous freight increase the insurance and other costs of r
245、ailcars,our freight costs could significantly 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 var
246、iety of federal,state and local environmental 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
247、of solid and hazardous waste and materials.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 environm
248、ental laws and regulations,new interpretations 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
249、cost of compliance with these requirements 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
250、adverse effect on our results of operations,financial condition and ability to make cash distributions.Our facilities operate 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
251、in order to operate.Our facilities are 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 monitorin
252、g,record keeping and reporting in order to demonstrate compliance with the underlying permit,license,approval,Table of Contents18limit 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
253、 manufacturing processes,there may be times when we are unable 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 eff
254、ect on our ability to operate our facilities and accordingly our financial performance.We could incur significant cost in cleaning up contamination at our nitrogen fertilizer plants and off-site locations.Our business is subject to the occurrence of accidental spills,discharges or other releases of
255、hazardous substances into the environment.Past or future spills related to our nitrogen fertilizer plants or transportation of products or hazardous substances from our facilities may give rise to liability(including strict liability,or liability without fault,and potential cleanup responsibility)to
256、 governmental entities or private parties under federal,state or local environmental laws,as well as under common law.For example,we could be held strictly liable under the Comprehensive Environmental Response,Compensation and Liability Act(CERCLA)for past or future spills without regard to fault or
257、 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 held liable for contamination associated with the facilities we currently own and operate(whether or not such contamination occurred prior to our acquisition there
258、of),facilities we formerly owned or operated(if any)and facilities to which we transported or arranged for the transportation of wastes or byproducts containing hazardous substances for treatment,storage,or disposal.The potential penalties and cleanup costs for past or future releases or spills,liab
259、ility to third parties for damage to their property or exposure to hazardous substances,or the need to address newly discovered information or conditions that may require response actions could be significant and could have a material adverse effect on our results of operations,financial condition a
260、nd ability to make cash distributions.In addition,we may incur liability for alleged personal injury or property damage due to exposure to chemicals or other hazardous substances located at or released from our facilities.We may also face liability for personal injury,property damage,natural resourc
261、e damage or for cleanup costs for the alleged migration of contamination or other hazardous substances from our facilities to adjacent and other nearby properties.We may also face legal actions or sanctions or incur costs related to contamination or noncompliance with environmental laws at our facil
262、ities.In addition,limited subsurface investigation indicates the presence of certain contamination at the East Dubuque Facility and Coffeyville Facility.In the future,state or federal authorities may require additional investigation or remediation or we may determine that there are conditions at the
263、se facilities that require remediation or other response.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
264、the costs of investigation and remediation 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.We may be unable to obtain or r
265、enew permits necessary 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 facilities.Expansion of our operations is also predicated upon securing the necessary
266、 environmental or other 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 o
267、ur business,financial 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 environment
268、al laws and regulations 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
269、time to time,various 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
270、 or proposed numeric 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 e
271、nd-use or application 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.Table of Contents19Climate change laws and regul
272、ations could have a material adverse effect on our results of operations,financial condition,and ability to make cash distributions.The EPA regulates GHG emissions(including carbon dioxide,methane and nitrous oxides)under the authority granted to it under the Clean Air Act.We monitor and report our
273、annual GHG emissions from our nitrogen fertilizer plants.If our nitrogen fertilizer plants meet GHG emissions thresholds,they must obtain permits under the New Source Review/Prevention of Significant Deterioration(PSD)and Title V programs of the federal Clean Air Act,then evaluate and implement best
274、 available control technology if they increase their GHG emissions by a significant amount.The EPA has not yet proposed New Source Performance Standards(NSPS)to regulate GHG emissions for the nitrogen fertilizer plants.Sources subject to NSPS are required to comply with emissions limits that reflect
275、 the best system of emissions reduction that the EPA has determined has been adequately demonstrated for that type of source.In 2015,the EPA promulgated NSPS for carbon dioxide emissions from electric utilities,although the EPA announced in April 2017 that those NSPS were under review and may be sus
276、pended,revised,or rescinded.Still,it is possible that the EPA will propose NSPS for our fertilizer plants,the timing of which is not known.The current administration has sought to implement a new or modified policy with respect to climate change.For example,the administration announced its intention
277、 to withdraw the United States from the Paris Climate Agreement,though the earliest possible effective date of withdrawal for the United States is November 2020.If efforts to address climate change resume at the federal legislative level,this could mean Congressional passage of legislation adopting
278、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 climate change bills that do not mandate a nationwide cap-and-trade program and instead focus on promoting renewable energy and efficiency.In additi
279、on to potential federal legislation,a number of states have adopted regional GHG initiatives to reduce carbon dioxide and other GHG emissions.In 2007,a group of Midwest states,including Kansas(where our Coffeyville Facility is located)and Illinois(where our East Dubuque Facility is located),formed t
280、he 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 have signed on to the accord must adopt laws or regulations implementing the trading scheme befo
281、re it becomes effective.To date,neither Kansas nor Illinois has taken meaningful action to implement the accord,and it is unclear whether either state intends to do so in the future.Alternatively,the EPA may take further steps to regulate GHG emissions,although it is unclear to what extent the EPA w
282、ill pursue climate change regulation.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 facilities,(ii)install new emission controls on our facilities and(iii)administer and manage any GH
283、G emissions program.Increased costs associated 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 make cash distributions.In addition,climate change legislation and
284、 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 have a material adverse effect on our results of operations,financial
285、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 higher operating costs.The costs of complying with future regulations re
286、lating to the transportation,storage and handling of hazardous chemicals and security associated with our nitrogen fertilizer facilities may have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.Targets such as chemical manufacturing f
287、acilities 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 initiatives relating to the security of chemical industry facili
288、ties 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 condition and ability to make cash distributions.The 2013 fertili
289、zer plant explosion in West,Texas has generated consideration of more restrictive measures in the storage,handling and transportation of crop production materials,including fertilizers.Table of Contents20Due to our lack of asset diversification,adverse developments in the nitrogen fertilizer industr
290、y could adversely affect our results of operations and our ability to make distributions to our common unitholders.We rely exclusively on the revenues generated from our nitrogen fertilizer business.An adverse development in the nitrogen fertilizer industry would have a significantly greater impact
291、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 products.Our business depends on significant
292、 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,the top five customers represented 31%our net sales for the
293、year ended December 31,2017.Our top customer on a consolidated basis accounted for approximately 11%of our net sales for the year ended December 31,2017.Given the nature of our business,and consistent with industry practice,we do not have long-term minimum purchase contracts with most of our agricul
294、tural customers.The loss of significant customers or a significant reduction in purchase volume by these 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 o
295、ur competitors will not decline.Our nitrogen fertilizer plants are located within the U.S.farm belt,where 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 o
296、ver longer distances via rail,ships and pipelines.There can be no assurance that our competitors transportation 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
297、results of operations,financial condition and ability to make cash distributions.We are largely dependent on our customers to transport purchased goods from our East Dubuque Facility.Historically,the customers of the East Dubuque Facility generally were located close to our East Dubuque Facility and
298、 have been willing and able to transport purchased goods from the East Dubuque Facility.In most instances,those customers have purchased products for delivery at the East Dubuque Facility and then arranged and paid for the transport of them to their final destinations by truck.However,in the future,
299、the transportation needs of those customers as well as their preferences may change,and those customers may no longer be willing or able to transport purchased goods from the East Dubuque Facility.In the event that our competitors are able to transport their products more efficiently or cost effecti
300、vely than those customers,and we are unable to reallocate or provide alternative transportation resources that service our other facilities,those customers may reduce or cease purchases of our products.If this were to occur,we could be forced to make a substantial investment in a fleet of trucks and
301、/or railcars to meet the delivery needs of those customers,which could be expensive and time consuming.We may not be able to obtain transportation capabilities on a timely basis or at all,and our inability to provide transportation for products could have a material adverse effect on our results of
302、operations,financial condition and cash flows.We are subject to strict 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 distr
303、ibutions.Our facilities are subject to the requirements of the federal Occupational Safety and Health Act(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 ab
304、out hazardous materials used or produced in our operations and that we 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 occupation
305、al exposure to regulated substances,could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions if we are subjected to significant fines or compliance costs.Instability and volatility in the global capital,credit and commodity markets
306、could negatively impact our business,financial condition,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 capit
307、al,credit and commodities markets and in the global economy.For example:Although we believe we will have sufficient liquidity under our debt facilities and instruments to run our business,under extreme market conditions there can be no assurance that such funds would be available or Table of Content
308、s21sufficient,and in such a case,we may not be able to successfully obtain additional financing on favorable terms,or at all.Market volatility could exert downward pressure on the price of our common units,which may make it more difficult for us to raise additional capital and thereby limit our abil
309、ity to grow.Our debt facilities and instruments contain various covenants that must be complied with,and if we are not in compliance,there can be no assurance that we would be able to successfully amend the facilities or instruments in the future.Further,any such amendment may be expensive.Market co
310、nditions could result in our significant customers experiencing financial difficulties.We are exposed to the credit risk of our customers,and their failure to meet their financial obligations when due because of bankruptcy,lack of liquidity,operational failure or other reasons could result in decrea
311、sed sales and earnings for us.Our acquisition and expansion strategy involves significant risks.One of our business strategies is to pursue acquisitions and expansion projects.However,acquisitions and expansions involve numerous risks and uncertainties,including intense competition for suitable acqu
312、isition targets,the potential unavailability of financial resources necessary to consummate acquisitions and expansions,difficulties in identifying suitable acquisition targets and expansion projects or in completing any transactions identified on sufficiently favorable terms,and the need to obtain
313、regulatory or other governmental approvals that may be necessary to complete acquisitions and expansions.In addition,any future acquisitions and expansions may entail significant transaction costs,tax consequences and risks associated with entry into new markets and lines of business.In addition to
314、the risks involved in identifying and completing acquisitions described above,even when acquisitions are completed,integration of acquired entities can involve significant difficulties,such as:unforeseen difficulties in the acquired operations and disruption of the ongoing operations of our business
315、;failure to achieve cost savings or other financial or operating objectives with respect to an acquisition;strain on the operational and managerial controls and procedures of our business,and the need to modify systems or to add management resources;difficulties in the integration and retention of c
316、ustomers or personnel and the integration and effective deployment of operations or technologies;assumption of unknown material liabilities or regulatory non-compliance issues;amortization of acquired assets,which would reduce future reported earnings;possible adverse short-term effects on our cash
317、flows or operating results;and diversion of managements attention from the ongoing operations of our business.In addition,in connection with any potential acquisition or expansion project,we will need to consider whether the business we intend to acquire or expansion project we intend to pursue coul
318、d affect our tax treatment as a partnership for U.S.federal income tax purposes.If we are otherwise unable to conclude that the activities of the business being acquired or the expansion project would not affect our treatment as a partnership for U.S.federal income tax purposes,we could seek a rulin
319、g from the Internal Revenue Service(IRS).Seeking such a ruling could be costly or,in the case of competitive acquisitions,place us in a competitive disadvantage compared to other potential acquirers who do not seek such a ruling.If we are unable to conclude that an activity would not affect our trea
320、tment as a partnership for U.S.federal income tax purposes,we could choose to acquire such business or develop such expansion project in a corporate subsidiary,which would subject the income related to such activity to entity-level taxation.See Tax Risks to Common Unitholders Our tax treatment depen
321、ds on our status as a partnership for U.S.federal income tax purposes,and not being subject to a material amount of entity-level taxation.If the IRS were to treat us as a corporation for U.S.federal income tax purposes or we become subject to entity-level taxation for state tax purposes,our cash ava
322、ilable for distribution to our common unitholders would be substantially reduced,likely causing a substantial reduction in the value of our common units.Failure to manage acquisition and expansion growth risks could have a material adverse effect on our results of operations,financial condition and
323、ability to make cash distributions.There can be no assurance that we will be able to consummate any acquisitions or expansions,successfully integrate acquired entities,or generate positive cash flow at any acquired company or expansion project.Table of Contents22A shortage of skilled labor,together
324、with rising labor costs,could adversely affect our results of operations and cash available for distribution to our common unitholders.Efficient production of nitrogen fertilizer using modern techniques and equipment requires skilled employees.Our facilities require special expertise to operate effi
325、ciently and effectively.To the extent that the services of our key technical personnel and skilled labor become unavailable to us for any reason,including as a result of the retirement of experienced employees from our aging work force,we would be required to hire other personnel.We may not be able
326、to locate or employ such qualified personnel on acceptable terms or at all.We face competition for these professionals from our competitors,our customers and other companies operating in our industry.If we are unable to find qualified employees,or if the cost to find qualified employees increases ma
327、terially,our results of operations and cash available for distribution to our common unitholders could be adversely affected.A substantial portion of our East Dubuque workforce is unionized and we are subject to the risk of labor disputes and adverse employee relations,which may disrupt our business
328、 and increase our costs.As of December 31,2017,approximately 64%of the employees at the East Dubuque Facility were represented by the International Union of United Automobile,Aerospace,and Agricultural Implement Workers under a collective bargaining agreement that expires in October 2019.We may not
329、be able to renegotiate our collective bargaining agreement when it expires on satisfactory terms or at all.A failure to do so may increase our costs.In addition,our existing labor agreement or future agreements may not prevent a strike or work stoppage in the future,and any work stoppage could negat
330、ively affect our results of operations,financial condition and cash flows.If licensed technology were no longer available,our business may be adversely affected.We have licensed,and may in the future license,a combination of patent,trade secret and other intellectual property rights of third parties
331、 for use in our business.In particular,the gasification process we use at the Coffeyville Facility to convert pet coke to high purity hydrogen for subsequent conversion to ammonia is licensed from an affiliate of General Electric Company.The license,which is fully paid,grants us perpetual rights to
332、use the pet coke gasification process on specified terms and conditions and is integral to the operations of our Coffeyville Facility.If this license,or any other license agreements on which our operations rely,were to be terminated,licenses to alternative technology may not be available,or may only
333、 be available on terms that are not commercially reasonable or acceptable.In addition,any substitution of new technology for currently-licensed technology may require substantial changes to manufacturing processes or equipment and may have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.We are subject to cybersecurity risks and othe
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