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 31,2018ORTRANSITION 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 500,Suga
3、r Land,Texas 77479(Address of principal executive offices)(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 interes
4、tsNew 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 Se
5、ction 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 r
6、eports),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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 1
7、2 months(or for such shorter period that the registrant was required to submit such files).Yes No.Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K(229.405 of this chapter)is not contained herein,and will not be contained,to the best of registrants know
8、ledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an eme
9、rging 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 Smaller reporting company Emerging growth company If an em
10、erging 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 pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell com
11、pany(as defined in Rule 12b-2 of the Exchange Act).Yes No At June 29,2018,the aggregate market value of the voting common units held by non-affiliates of the registrant was approximately$244.9 million based upon the closing price of its common units on the New York Stock Exchange Composite tape.As o
12、f February 19,2019,there were 113,282,973 shares of the registrants common units outstanding.December 31,2018|1TABLE OF CONTENTSCVR PartnersAnnual Report on Form 10-K PagePagePART IPART IIIItem 1.BusinessItem 10.Directors,Executive Officers and Corporate GovernanceItem 1A.Risk FactorsItem 11.Executi
13、ve CompensationItem 1B.Unresolved Staff CommentsItem 12.Security Ownership of Certain Beneficial Owners and Management and Related Unitholder MattersItem 2.PropertiesItem 13.Certain Relationships and Related Transactions,and Director IndependenceItem 3.Legal ProceedingsItem 14.Principal Accounting F
14、ees and ServicesItem 4.Mine Safety DisclosuresPART IIPART IVItem 5.Market For Registrants Common Equity,Related Unitholder Matters and Issuer Purchases of Equity SecuritiesItem 15.Exhibits,Financial Statement SchedulesItem 6.Selected Financial DataItem 16.Form 10-K SummaryItem 7.Managements Discussi
15、on 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 Disagreements With Accountants on Accounting and Financial DisclosureItem 9A.Controls and Procedur
16、esItem 9B.Other Information472117931983110031103323310434108354849717171Table of Contents December 31,2018|2 GLOSSARY OF SELECTED TERMSThe following are definitions of certain terms used in this Annual Report on Form 10-K for the year ended December 31,2018(this“Report”).Ammonia Ammonia is a direct
17、application fertilizer and is primarily used as a building block for other nitrogen products for industrial applications and finished fertilizer products.Capacity Capacity is defined as the throughput a process unit is capable of sustaining,either on a calendar or operating day basis.The throughput
18、may be expressed in terms of maximum sustainable,nameplate or economic capacity.The maximum sustainable or nameplate capacities may not be the most economical.The economic capacity is the throughput that generally provides the greatest economic benefit based on considerations such as feedstock costs
19、,product values and downstream unit constraints.Corn belt The primary corn producing region of the United States,which includes Illinois,Indiana,Iowa,Minnesota,Missouri,Nebraska,Ohio and Wisconsin.Ethanol A clear,colorless,flammable oxygenated hydrocarbon.Ethanol is typically produced chemically fro
20、m ethylene,or biologically from fermentation of various sugars from carbohydrates found in agricultural crops and cellulosic residues from crops or wood.It is used in the United States as a gasoline octane enhancer and oxygenate.Farm belt Refers to the states of Illinois,Indiana,Iowa,Kansas,Minnesot
21、a,Missouri,Nebraska,North Dakota,Ohio,Oklahoma,South Dakota,Texas and Wisconsin.MMBtu One million British thermal units:a measure of energy.One Btu of heat is required to raise the temperature of one pound of water one degree Fahrenheit.MSCF One thousand standard cubic feet,a customary gas measureme
22、nt.Netback Netback represents net sales less freight revenue divided by product sales volume in tons.Netback is also referred to as product pricing at gate.Petroleum coke(otherwise referred to as pet coke)a coal-like substance that is produced during the oil refining process.Product pricing at gate
23、Product pricing at gate represents net sales less freight revenue divided by product sales volume in tons.Product pricing at gate is also referred to as netback.Southern plains Primarily includes Oklahoma,Texas and New Mexico.Turnaround A periodically performed standard procedure to inspect,refurbis
24、h,repair and maintain the plant assets.This process involves the shutdown and inspection of major processing units and occurs every two to three years.A turnaround will typically extend the operating life of a facility and return performance desired levels.UAN An aqueous solution of urea and ammoniu
25、m nitrate used as a fertilizer.Utilization Measurement of the annual production of UAN and Ammonia expressed as a percentage of the plants nameplate production capacity.Table of Contents December 31,2018|3Important Information Regarding Forward Looking StatementsThis Annual Report on Form 10-K conta
26、ins forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,as amended(the“Securities Act”),and Section 21E of the Securities Exchange Act of 1934,as amended(the“Exchange Act”),including,but not limited to,those under Item 1.Business,Item 1A.Risk Factors and Item 7
27、.Managements Discussion and Analysis of Financial Condition and Results of Operations.These forward-looking statements are subject to a number of risks and uncertainties,many of which are beyond our control.All operations,financial position,estimated revenues and losses,projected costs,prospects,pla
28、ns and objectives of management are forward-looking statements.When used in this Annual Report on Form 10-K the words“could,”“believe,”“anticipate,”“intend,”“estimate,”“expect,”“may,”“continue,”“predict,”“potential,”“project,”and similar terms and phrases are intended to identify forward-looking sta
29、tements.Although we believe our assumptions concerning future events are reasonable,a number of risks,uncertainties and other factors could cause actual results and trends to differ materially from those projected or forward-looking.Forward-looking statements may include statements about,but are not
30、 limited to,the following:our ability to make cash distributions on the common units;the volatile nature of our business and the variable nature of our distributions;the ability of our general partner to modify or revoke our distribution policy at any time;the cyclical and seasonal nature of our bus
31、iness;the dependence of our operations on a few third-party suppliers,including providers of transportation services and equipment;our reliance on pet coke that we purchase from CVR Refining and third party suppliers;our reliance on the natural gas,electricity,oxygen,nitrogen and compressed dry air
32、that we purchase from third parties;the supply and price levels of essential raw materials;the risk of a material decline in the production at our nitrogen fertilizer plants;accidents or other unscheduled shutdowns or distributions affecting our facilities,machinery,or equipment,or those of our supp
33、liers or customers;potential operating hazards from accidents,fire,severe weather,tornadoes,floods or other natural disasters our ability to obtain or renew permits to operating our business;competition in the nitrogen fertilizer businesses;capital expenditures and potential liabilities arising from
34、 environmental laws and regulations;existing and proposed laws,rulings and regulations,including but not limited to those relating to climate change,alternative energy or fuel sources,and the end-use and application of fertilizers;new regulations concerning the transportation of hazardous chemicals,
35、risks of terrorism,the security of chemical manufacturing facilities and other matters beyond our control;the risks of security breaches;our lack of asset diversification;our dependence on significant customers and the creditworthiness and performance by counterparties;our potential loss of transpor
36、tation cost advantage over our competitors;our partial dependence on customer and distributor transportation of purchased goods;our potential inability to successfully implement our business strategies,including the completion of significant capital programs;our reliance on CVR Energys senior manage
37、ment team and conflicts of interest they face operating each of CVR Partners,CVR Refining and CVR Energy;control of our general partner by CVR Energy;our ability to continue to license the technology used on our operations;restrictions in our debt agreements;changes in our treatment as a partnership
38、 for U.S.federal income or state tax purposes;rulings,judgments or settlements in litigation,tax or other legal or regulatory matters;instability and volatility in the capital and credit markets;competition with CVR Energy and its affiliates;and our ability to recover under our insurance policies fo
39、r damages or losses in full or at all.All forward-looking statements included in this report are based on information available to us on the date of this report.We undertake no obligation to revise or update any forward-looking statements as a result of new information,future events or otherwise.Tab
40、le of Contents December 31,2018|4PART IPart 1 should be read in conjunction with Managements Discussion and Analysis in Item 7 and our consolidated financial statements and related notes thereto in Item 8.Item 1.BusinessOverviewCVR Partners,LP(“CVR Partners,”or the“Partnership”)is a Delaware limited
41、 partnership formed in 2011 by CVR Energy,Inc.(“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 yield and quality of their crops.References to CVR Partners,the Partnership,“we”,“us”,a
42、nd“our”may refer to consolidated subsidiaries of CVR Partners or one or both of the facilities,as the context may require.Additionally,as the context may require,references to CVR Energy may refer to CVR Energy,its consolidated subsidiaries which include CVR Refining,LP and its petroleum refining,ma
43、rketing and logistics operations.Our principal products are ammonia and UAN.All of our products are sold on a wholesale basis.We produce nitrogen fertilizer products at two manufacturing facilities,which are located in Coffeyville,Kansas and East Dubuque,Illinois.Organizational Structure and Related
44、 OwnershipThe following chart illustrates the organizational structure of the Partnership as of December 31,2018.Table of Contents December 31,2018|5Subsequent to December 31,2018,the general partner of CVR Refining,LP(“CVRR”),an indirect,wholly-owned subsidiary of CVR Energy,assigned to CVR Energy
45、its right to purchase all of the issued and outstanding CVRR common units not already owned by CVRRs general partner or its affiliates.On January 29,2019,CVR Energy purchased all remaining CVRR common units not already owned by CVR Energy or its affiliates(the“Public Unit Purchase”).In conjunction w
46、ith the Public Unit Purchase,CVR Energy purchased all CVRR common units owned by Icahn Enterprises L.P.(“IEP”)and its subsidiary,American Entertainment Properties Corporation(the“Affiliate Unit Purchase,”and together with the Public Unit Purchase,the“CVRR Unit Purchase”).The CVRR Unit Purchase had n
47、o impact on the Partnership,its operations,or CVR Energys ownership in the Partnership.FacilitiesWe own and operate nitrogen fertilizer manufacturing facilities which are located in Coffeyville,Kansas(the“Coffeyville Facility”)and East Dubuque,Illinois(the“East Dubuque Facility”).We produce and dist
48、ribute nitrogen fertilizer products,which are used primarily by farmers to improve the yield and quality of their crops.The principal products are UAN and ammonia,and all products are sold on a wholesale basis.The Coffeyville Facility includes a a gasifier complex having a capacity of 89 million sta
49、ndard cubic feet per day of hydrogen,a 1,300 ton-per-day capacity ammonia unit and a 3,000 ton-per-day capacity UAN unit.The Coffeyville Facility is the only nitrogen fertilizer plant in North America that utilizes a pet coke gasification process to produce nitrogen fertilizer.The Coffeyville Facili
50、tys largest raw material expense used in the production of ammonia is pet coke,which it purchases from CVR Energy and third parties.For the years ended December 31,2018,2017 and 2016,the Partnership purchased approximately$13 million,$8 million and$8 million,respectively,of pet coke at an average co
51、st per ton of$28,$17 and$15,respectively.For the years ended December 31,2018,2017 and 2016,we upgraded approximately 93%,88%and 93%,respectively,of our ammonia production into UAN,a product that presently generates greater profit than ammonia.We upgrade substantially all of our ammonia production a
52、t the Coffeyville Facility into UAN and will continue to do so when the economics are favorable.The East Dubuque Facility,which includes a 1,075 ton-per-day capacity ammonia unit and a 1,100 ton-per-day capacity UAN unit,has the flexibility to vary its product mix enabling the East Dubuque Facility
53、to upgrade a portion of its ammonia production into varying amounts of UAN,nitric acid and liquid and granulated urea,depending on market demand,pricing and storage availability.The East Dubuque Facilitys largest raw material expense used in the production of ammonia is natural gas,which we purchase
54、 from third parties.The East Dubuque Facilitys natural gas process results in a higher percentage of variable costs as compared to the Coffeyville Facility.For the year ended December 31,2018,and 2017 the East Dubuque Facility incurred approximately$22.5 million and$26.3 million for feedstock natura
55、l gas,respectively,which equaled an average cost of$3.15 and$3.26 per MMBtu,respectively.CommoditiesThe nitrogen products we produce are globally traded commodities and are subject to price competition.The customers for its products make their purchasing decisions principally on the basis of deliver
56、ed price and,to a lesser extent,on customer service and product quality.The selling prices of its products fluctuate in response to global market conditions and changes in supply and demand.Agriculture The three primary forms of nitrogen fertilizer used in the United States of America are ammonia,ur
57、ea and UAN.Unlike ammonia and urea,UAN can be applied throughout the growing season and can be applied in tandem with pesticides and herbicides,providing farmers with flexibility and cost savings.As a result of these factors,UAN typically commands a premium price to urea and ammonia,on a nitrogen eq
58、uivalent basis.Nutrients are depleted in soil over time and therefore must be replenished through fertilizer use.Nitrogen is the most quickly depleted nutrient and must be replenished every year,whereas phosphate and potassium can be retained in soil for up to three years.Plants require nitrogen in
59、the largest amounts and it accounts for approximately 57%of primary fertilizer consumption on a nutrient ton basis,per the International Fertilizer Industry Association.Table of Contents December 31,2018|6DemandGlobal demand for fertilizers is driven primarily by grain demand and prices,which,in tur
60、n,are driven by population growth,farmland per capita,dietary changes in the developing world and increased consumption of bio-fuels.According to the International Fertilizer Industry Association,from 1974 to 2016,global fertilizer demand grew 2%annually.Global fertilizer use,consisting of nitrogen,
61、phosphate and potassium,is projected to increase by 34%between 2010 and 2030 to meet global food demand according to a study funded by the Food and Agricultural Organization of the United Nations.Currently,the developed world uses fertilizer more intensively than the developing world,but sustained e
62、conomic growth in emerging markets is increasing food demand and fertilizer use.In addition,populations in developing countries are shifting to more protein-rich diets as their incomes increase,with such consumption requiring more grain for animal feed.As an example,Chinas wheat and coarse grains pr
63、oduction is estimated to have increased 32%between 2007 and 2018,but still failed to keep pace with increases in demand,prompting China to grow its wheat and coarse grain imports by more than 1,320%over the same period,according to the United States Department of Agriculture(“USDA”).The United State
64、s is the worlds largest exporter of coarse grains,accounting for 33%of world exports and 29%of world production for the fiscal year ended September 30,2018,according to the USDA.A substantial amount of nitrogen is consumed in production of these crops to increase yield.Based on Fertecon Limiteds(“Fe
65、rtecon”)2018 estimates,the United States is the worlds third largest consumer of nitrogen fertilizer and the worlds largest importer of nitrogen fertilizer.Fertecon is a reputable agency which provides market information and analysis on fertilizers and fertilizer raw materials for fertilizer and rel
66、ated industries,and international agencies.Fertecon estimates indicate that the United States represented 12%of total global nitrogen fertilizer consumption for 2018,with China and India as the top consumers representing 23%and 15%of total global nitrogen fertilizer consumption,respectively.North Am
67、erican nitrogen fertilizer producers predominantly use natural gas as their primary feedstocks.Over the last five years,U.S.oil and natural gas reserves have increased significantly due to,among other factors,advances in extracting shale oil and gas as well as relatively high oil and gas prices.More
68、 recently,global demand has slowed with production staying steady even as oil and gas prices have declined substantially over the past two years.This has led to significantly reduced natural gas and oil prices as compared to historical prices.As a result,North America has become a low-cost region fo
69、r nitrogen fertilizer production.Raw Material SupplyCoffeyville Facility-During the past five years,just under 70%(2018-59%)of the Coffeyville Facilitys pet coke requirements on average were supplied by CVR Energys adjacent Coffeyville,Kansas refinery pursuant to a multi-year agreement.Historically
70、the Coffeyville Facility has obtained the remainder of its pet coke requirements through third party contracts typically priced at a discount to the spot market.In 2018,a larger amount of third party purchases were made at spot prices due to less supply being available from the Coffeyville refinery.
71、Additionally,the Coffeyville Facility relies on a third-party air separation plant at its location that provides contract volumes of oxygen,nitrogen,and compressed dry air to the Coffeyville Facility gasifiers.Refer to Note 8(Commitments and Contingencies)within the“Lease and Supply Commitments”sect
72、ion,for further discussion on the matters outlined above.East Dubuque Facility-The East Dubuque Facility uses natural gas to produce nitrogen fertilizer.The East Dubuque Facility is able to purchase natural gas at competitive prices due to the plants connection to the Northern Natural Gas interstate
73、 pipeline system,which is within one mile of the facility,and a third-party owned and operated pipeline.The pipelines are connected to a third-party distribution system at the Chicago Citygate receipt point and at the Hampshire interconnect from which natural gas is transported to the East Dubuque F
74、acility.As of December 31,2018,we had commitments to purchase approximately 1.4 million MMBtus of natural gas supply for planned use in our East Dubuque Facility in January and February 2019 at a weighted average rate per MMBtu of approximately$3.84,exclusive of transportation cost.Table of Contents
75、 December 31,2018|7Marketing and DistributionWe primarily market UAN products to agricultural customers and ammonia products to agricultural and industrial customers.UAN and ammonia accounted for approximately 72%and 20%,respectively,of total net sales for the year ended December 31,2018.UAN and amm
76、onia are primarily distributed by truck or by railcar.If delivered by truck,products are most commonly sold on a free-on-board(“FOB”)shipping point basis,and freight is normally arranged by the customer.We operate a fleet of railcars for product delivery.If delivered by railcar,our products are most
77、 commonly sold on a FOB destination point basis and we typically arrange the freight.The nitrogen fertilizer products leave the Coffeyville Facility either in railcars for destinations located principally on the Union Pacific railroad.the BNSF Railway railroad or in trucks for direct shipment to cus
78、tomers.The East Dubuque 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.Additionally,the E
79、ast Dubuque Facility has direct access to a barge dock on the Mississippi River as well as a nearby rail spur serviced by the Canadian National Railway Company.CustomersWe sell UAN products to retailers and distributors.In addition,we sell ammonia to agricultural and industrial customers.Given the n
80、ature of our business,and consistent with industry practice,most of our contracts with customers are for a term of 12-month or less.Some of our industrial sales include long-term purchase contracts.For the year ended December 31,2018,the top five customers in the aggregate represented 32%of net sale
81、s.The Partnerships top customer on a consolidated basis accounted for approximately 14%of net sales.Competition Our business has experienced and expects to continue to meet significant levels of competition from current and potential competitors,many of whom have significantly greater financial and
82、other resources.Competition in the nitrogen fertilizer 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 seasonally adjust inventory to enhance our manufacturi
83、ng 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 Nutrien Ltd.(formerly known as Agrium,Inc.and Potash Corporation of Saskatchewan,Inc.).Domestic competition is
84、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 manufactured in foreign countries.In certain cases,foreign producers of fertilizer who export to the United States may
85、 be subsidized by their respective governments.The decline of natural gas prices in recent periods have led to existing and new producers considering construction of new or expanding existing nitrogen fertilizer production facilities in the United States.The substantial majority of the incremental n
86、itrogen fertilizer supply associated with the construction of confirmed new production facilities is expected to be online in 2018.Once the increased production comes on-line,Blue,Johnson&Associates,Inc.,a company management considers to provide reliable fertilizer industry forecasts,expects the Uni
87、ted States will still require net imports into the United States to meet domestic demand for nitrogen fertilizers.SeasonalityBecause we primarily sell agricultural commodity products,our business is exposed to seasonal fluctuations in demand for nitrogen fertilizer products in the agricultural indus
88、try.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 specific varieties and amounts of fertilizer the
89、y apply depend on factors like crop prices,farmers current liquidity,soil conditions,weather patterns and the types of crops planted.We typically experience Table of Contents December 31,2018|8higher net sales in the first half of the calendar year,which is referred to as the planting season,and its
90、 net sales tend to be lower during the second half of each calendar year,which is referred 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 r
91、elease 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 and the enforcement thereof impact us by imposing:restrictions on operations or the need to in
92、stall enhanced or additional controls;liability for the investigation and remediation of contaminated soil and groundwater at current and former facilities(if any)and off-site waste disposal locations;and specifications for the products we market,primarily UAN and ammonia.Our operations require nume
93、rous permits and authorizations.Failure to comply with these permits or environmental laws and regulations could result in fines,penalties or other sanctions or a revocation of our permits.In addition,the laws and regulations to which we are subject are often evolving and many of them have become mo
94、re 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 compliance costs.The Federal Clean Air Act(“CAA”)The CAA and its implementing regulations,as well as correspondi
95、ng state laws and regulations governing air emissions,affect us through the CAAs permitting requirements and emission control requirements relating to specific air pollutants,as well as the requirement to maintain a risk management program to help prevent accidental releases of certain substances.Th
96、e CAA indirectly affects us by extensively regulating the air emissions of sulfur dioxide(“SO2”),volatile organic compounds,nitrogen oxides and other substances,including those emitted by mobile sources,which are direct or indirect users of our products.Some or all of the standards promulgated pursu
97、ant to the CAA,or any future promulgations of standards,may require the installation of controls or changes to our nitrogen fertilizer facilities(collectively referred to as the“Facilities”)to maintain compliance.If new controls or changes to operations are needed,the costs could be material.The reg
98、ulation of air emissions under the CAA requires that we obtain various construction 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 the Na
99、tional Emission Standard for Hazardous Air Pollutants,the New Source Performance Standards and the 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 enviro
100、nmental laws.Our Facilities periodically experience releases of hazardous and extremely hazardous substances from their equipment.From time to time,the U.S.Environmental Protection Agency(the“EPA”)has conducted inspections and issued information requests to us with respect to our compliance with rep
101、orting 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 timely or properly report a release,or if a release violates the law or our permits,we could become the subject of a gov
102、ernmental enforcement action or third-party claims.Government enforcement or third-party claims relating to releases of hazardous or extremely hazardous substances could result in significant expenditures and liability.Table of Contents December 31,2018|9Greenhouse Gas Emissions(“GHG”)The EPA regula
103、tes GHG emissions under the Clean Air Act.In October 2009,the EPA finalized a rule requiring certain large emitters of GHGs to inventory and report their GHG emissions to the EPA.In accordance with the rule,our facilities monitor and report our GHG emissions to the EPA.In May 2010,the EPA finalized
104、the“Greenhouse Gas Tailoring Rule,”which established GHG emissions thresholds that determine when stationary sources,such as the nitrogen fertilizer plant,must obtain permits under Prevention of Significant Deterioration(“PSD”)and Title V programs of the federal Clean Air Act.Under the rule,faciliti
105、es already subject to the PSD and Title V programs that increase their emissions of GHGs by a significant amount are required to undergo PSD review and to evaluate and implement air pollution control technology,known as“best available control technology,”to reduce GHG emissions.Environmental Remedia
106、tionAs 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 property damage allegedly caused by crude oil or hazardous substances that we manuf
107、actured,handled,used,stored,transported,spilled,disposed of or released.There is no assurance that we will not become involved in future proceedings related to the release of hazardous or extremely hazardous substances or crude oil for which we have potential liability or that,if we were held respon
108、sible 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 insures any loc
109、ation owned,leased,rented or operated by the Partnership,including our 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 site pollution legal liability i
110、nsurance 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 day and time during the policy
111、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 limitations that could apply to a particul
112、ar pollution claim,and there can be no assurance such claim will be adequately insured for all potential damages.Health,Safety and Security MattersWe are subject to a number of federal and state laws and regulations related to safety,including the Occupational Safety and Health Act(“OSHA”),and compa
113、rable state statutes,the purpose of which are to protect the health and safety of workers.We also are subject to OSHA Process Safety Management regulations,which are designed to prevent or minimize the consequences of catastrophic releases of toxic,reactive,flammable or explosive chemicals.We operat
114、e a comprehensive safety,health and security program,with participation by employees at all levels of the organization.We have developed comprehensive safety programs aimed at preventing OSHA recordable incidents.Despite our efforts to achieve excellence in our safety and health performance,there ca
115、n 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 31,2018,the Partnership had approximately 290 employees across both of its facilities and its logis
116、tics operations,including approximately 100 employees covered by collective bargaining agreements that expire in October 2019.We also rely on the services of employees of CVR Energy and its subsidiaries pursuant to a services agreement between us,CVR Energy and our general partner.Table of Contents
117、December 31,2018|10Available 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 or furnished pursuant to Section 13(a)or 15(d)of the Securities Exchange Act of 1934,as amended,are ava
118、ilable 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 Exchange Commission(the“SEC”)at www.sec.gov.In addition,our Corporate Governance Guidelines,Codes of Ethics
119、 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 also available in print without charge to any unitholder requesting them.We do not inte
120、nd for information contained in our website to be part of this Report.Table of Contents December 31,2018|11Item 1A.Risk FactorsThe following risks should be considered together with the other information contained in this Report and all of the information set forth in our filings with the SEC.If any
121、 of the following risks or uncertainties develops into actual events,our business,financial condition or results of operations could be materially adversely affected.References to CVR Partners,the Partnership,“we”,“us”,and“our”may refer to consolidated subsidiaries of CVR Partners or one or both of
122、the facilities,as the context may require.Risks Related to Our BusinessOur business is,and nitrogen fertilizer prices are,cyclical and highly volatile,which could have a material adverse effect on our results of operations,financial condition and cash flows.Our business is exposed to fluctuations in
123、 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 results of operations,financial condition and cash flows.Nitrogen fertilizer products a
124、re commodities,the price of which can be highly volatile.The prices of nitrogen fertilizer products depend on a number of factors,including general economic conditions,cyclical trends in end-user markets,supply and demand imbalances,governmental policies and weather conditions,which have a greater r
125、elevance because of the seasonal nature of fertilizer application.If seasonal demand exceeds the projections on which we base our production levels,customers may acquire nitrogen fertilizer products from competitors,and our profitability may be negatively impacted.If seasonal demand is less than exp
126、ected,we may be left with excess inventory that will have to be stored or liquidated.Demand for nitrogen fertilizer products is dependent on demand for crop nutrients by the global agricultural industry.The international market for nitrogen fertilizers is influenced by such factors as the relative v
127、alue of the U.S.dollar and its impact upon the cost of importing nitrogen fertilizers,foreign agricultural policies,the existence of,or changes in,import or foreign currency exchange barriers in certain foreign markets,changes in the hard currency demands of certain countries and other regulatory po
128、licies of foreign governments,as well as the laws and policies of the United States affecting foreign trade and investment.Nitrogen-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.Supp
129、ly is affected by available capacity and operating rates,raw material costs,government policies and global trade.A decrease in nitrogen fertilizer prices would have a material adverse effect on our business,cash flow and ability to make distributions.Nitrogen fertilizer products are global commoditi
130、es,and our business faces intense competition from other nitrogen fertilizer producers,which may have more resources and scale.Our business is subject to intense price competition from both U.S.and foreign sources,including competitors operating in the Middle East,the Asia-Pacific region,the Caribbe
131、an,Russia and the Ukraine.Fertilizers are global commodities,with little or no product differentiation,and customers make their purchasing decisions principally on the basis of delivered price and availability of the product.Increased global supply or decreases in transportation costs for foreign so
132、urces of fertilizer 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 other countries,inc
133、luding 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 opportunities.Additionally,
134、our competitors utilizing different corporate structures may be better able to withstand lower cash flows than we can as a limited partnership.Our competitive position could suffer to the extent we are unable to expand resources either through investments in new or existing operations or through acq
135、uisitions,joint ventures or partnerships.An inability to compete successfully could result in a loss of customers,which could adversely affect our sales,profitability and cash flows and,therefore,have a material adverse effect on our results of operations,financial condition and cash flows.Table of
136、Contents December 31,2018|12Our business is geographically concentrated and is therefore subject to regional economic downturns and seasonal variations,which may affect our production levels,transportation costs and inventory and working capital levels.Our sales to agricultural customers are concent
137、rated in the Great Plains and Midwest states,and nitrogen fertilizer demand is seasonal.Our quarterly results may vary significantly from one year to the next due largely to weather-related shifts in planting schedules and purchase patterns.Farmers tend to apply nitrogen fertilizer during two short
138、application periods,one in the spring and the other in the fall.In contrast,we along with other nitrogen fertilizer producers generally produce products throughout the year.As a result,we and our customers generally build inventories during the low demand periods of the year to ensure timely product
139、 availability during peak sales seasons.Variations 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.Additio
140、nally,the accumulation of inventory to be available for seasonal sales creates significant seasonal working capital and storage capacity requirements.The degree of seasonality can change significantly from year to year due to conditions in the agricultural industry and other factors.As a consequence
141、 of this seasonality,distributions of available cash,if any,may be volatile and may vary quarterly and annually.Our sales volumes depend on significant customers,and the loss of several significant customers may have a material adverse impact on our results of operations,financial condition and cash
142、 flows.We have a significant concentration of customers.Our five largest customers represented approximately 32%of net sales for the year ended December 31,2018.Our largest customer accounts for approximately 14%of net sales for this same period.Given the nature of our business,and consistent with i
143、ndustry practice,we do not have long-term minimum purchase contracts with our customers.The loss of several of these significant customers,or a significant reduction in purchase volume by several of them,could have a material adverse effect on our results of operations,financial condition and cash f
144、lows.Any decline in U.S.agricultural production or limitations on the use of nitrogen fertilizer for agricultural purposes could have a material adverse effect on the sales of nitrogen fertilizer,and on our results of operations,financial condition and cash flows.Conditions in the U.S.agricultural i
145、ndustry significantly impact our operating results.The U.S.agricultural 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 product
146、s and U.S.and foreign policies regarding trade in agricultural products.For example,a major factor underlying the solid level of demand for nitrogen-based fertilizer products we produce is the use of corn for the production of ethanol in the U.S.Changes in governmental incentives for ethanol product
147、ion could affect future ethanol demand and production.State and federal governmental policies,including farm and biofuel subsidies and commodity support programs,as well as the prices of fertilizer products,may also directly or indirectly influence the number of acres planted,the mix of crops plante
148、d and the use of fertilizers for particular agricultural applications.Developments in crop technology,such as nitrogen fixation(the conversion of atmospheric nitrogen into compounds that plants can assimilate),could also reduce the use of chemical fertilizers and adversely affect the demand for nitr
149、ogen fertilizer.In addition,from time to time various state legislatures have considered limitations on the use and application of chemical fertilizers due to concerns about the impact of these products on the environment.Unfavorable state and federal governmental policies could negatively affect ni
150、trogen fertilizer prices and therefore have a material adverse effect on our results of operations,financial condition and cash flows.Table of Contents December 31,2018|13Ethanol production in the United States is highly dependent upon a myriad of federal statutes and regulations,and is made signifi
151、cantly more competitive by various federal and state incentives and mandated usage of renewable fuels pursuant to EPAs RFS.To date,the RFS has been satisfied primarily with corn-based fuel ethanol blended into gasoline.However,a number of factors,including the continuing“food versus fuel”debate and
152、studies showing that expanded ethanol usage may increase the level of greenhouse gases in the environment as well as be unsuitable for small engine use,have 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.Ch
153、anges within the RFS program also could affect future ethanol demand and production.Further,while most ethanol is currently 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
154、 cellulose-based biomass,such as agricultural waste,forest residue,and municipal solid waste.In addition,there is a continuing trend to encourage the use of products other than corn and raw grains for ethanol production.The repeal of,or reduction in the benefits to ethanol producers under,ethanol in
155、centive programs,an increase in ethanol imports,a substantial decrease in future renewable volume obligations under the RFS program,or a significant increase in the use of products other than corn and raw grains for ethanol production could affect the demand for corn-based ethanol and result in a de
156、crease in planted corn acreage and in the demand for nitrogen fertilizer products and have a material adverse effect on our results of operations,financial condition and cash flows.The acquisition and expansion strategy of our business involves significant risks.From time to time,we may consider pur
157、suing acquisitions and expansion projects to continue to grow and increase profitability.However,we may not be able to consummate such acquisitions or expansions,due to intense competition for suitable acquisition targets,the potential unavailability of financial resources necessary to consummate ac
158、quisitions and expansions,difficulties in identifying suitable acquisition targets and expansion projects or in completing any transactions identified on sufficiently favorable terms and the failure to obtain requisite regulatory or other governmental approvals.In addition,any future acquisitions an
159、d expansions may entail significant transaction costs and risks associated with entry into new markets and lines of business,including but not limited to,new regulatory obligations and risks.Even when acquisitions are completed,integration of acquired entities can involve significant difficulties,su
160、ch as Unforeseen difficulties in the integration of the acquired operations and disruption of the ongoing operations of our business;Failure to achieve cost savings or other financial or operating objectives contributing to the accretive nature of an acquisition;Strain on the operational and manager
161、ial controls and procedures and the need to modify systems or to add management resources;Difficulties in the integration and retention of customers or personnel and the integration and effective deployment of operations or technologies;Assumption of unknown material liabilities or regulatory non-co
162、mpliance issues;Amortization of acquired assets,which would reduce future reported earnings;Possible adverse short-term effects on our cash flows or operating results;and Diversion of managements attention from the ongoing operations of our business.In addition,in connection with any potential acqui
163、sition or expansion project,we will need to consider whether a business we intend to acquire or expansion project we intend to pursue could affect our tax treatment as a partnership for federal income tax purposes.If we are otherwise unable to conclude that the activities of the business being acqui
164、red or the expansion project would not affect our treatment as a partnership for federal income tax purposes,we may elect to seek a ruling from the Internal Revenue Service(“IRS”).Seeking such a ruling could be costly or,in the case of competitive acquisitions,place the business in a competitive dis
165、advantage 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 treatment as a partnership for federal income tax purposes,and are unable or unwilling to obtain an IRS ruling,we may choose to acquire such business or de
166、velop such expansion project in a corporate subsidiary,which would subject the income related to such activity to entity-level taxation,which would reduce the amount of cash available for distribution to its common unitholders and could likely cause a substantial reduction in the value of its common
167、 units.Table of Contents December 31,2018|14Failure to manage these acquisition and expansion growth risks could have a material adverse effect on our results of operations,financial condition and cash flows.Our joint ventures involve similar risks.There can be no assurance that we will be able to c
168、onsummate any acquisitions or expansions,successfully integrate acquired entities,or generate positive cash flow at any acquired company or expansion project.We are subject to cybersecurity risks and other cyber incidents resulting in disruption to our business.Threats to information technology syst
169、ems associated with cybersecurity risks and cyber incidents or attacks continue to grow.We depend on information technology systems.In addition,we collect,process,and retain sensitive and confidential customer information in the normal course of business.Despite the security measures we have in plac
170、e and any additional measures we may implement in the future,our facilities and systems,and those of our third-party service providers,could be vulnerable to security breaches,computer viruses,lost or misplaced data,programming errors,human errors,acts of vandalism or other events.Any disruption of
171、our systems or security breach or event resulting in the misappropriation,loss or other unauthorized disclosure of confidential information,whether by us directly or our third-party service providers,could damage our reputation,expose us to the risks of litigation and liability,disrupt our business
172、or otherwise affect our results of operations.In addition,new laws and regulations governing data privacy and the unauthorized disclosure of confidential information pose increasingly complex compliance challenges and potentially elevate our costs.Any failure by us to comply with these laws and regu
173、lations,including as a result of a security or privacy breach,could result in significant penalties and liabilities for us.Additionally,if we acquire a company that has violated or is not in compliance with applicable data protection laws,we may incur significant liabilities and penalties as a resul
174、t.Intentional acts of destruction could hinder our sales or production and disrupt our supply chain.Our facilities could be damaged or destroyed,reducing our operational production capacity and requiring us to repair or replace our facilities at substantial cost.Employees,contractors and the public
175、could suffer substantial physical injury for which we could be liable.Governmental authorities may impose security or other requirements that could make our operations more difficult or costly.The consequences of any such actions could adversely affect our operating results,financial condition and c
176、ash flows.Risks Related to Our Plant OperationsOur Coffeyville Facility may be adversely affected by the supply and price levels of pet coke.Failure by CVR Energys Coffeyville refinery to continue to supply us with pet coke and the availability of third-party pet coke only at higher prices could neg
177、atively impact our results of operations.Unlike our competitors,whose primary costs are related to the purchase of natural gas and whose costs are therefore largely variable,our Coffeyville Facility uses a pet coke gasification process to produce nitrogen fertilizer.Our profitability is directly aff
178、ected by the price and availability of pet coke obtained from CVR Energys Coffeyville refinery pursuant to a long-term agreement.Our Coffeyville Facility has obtained the majority of its pet coke from CVR Energys Coffeyville refinery over the past five years.However,should CVR Energys Coffeyville re
179、finery fail to perform in accordance with the existing agreement,we would need to purchase pet coke from third parties on the open market,which could negatively impact our results of operations to the extent third-party pet coke is unavailable or available only at higher prices.Currently,we purchase
180、 100%of the pet coke CVR Energys Coffeyville refinery produces.However,we are still required to procure additional pet coke from third parties to maintain our production rates.Accordingly,we are party to a pet coke supply agreement with a third-party refinery to provide a significant amount of pet c
181、oke at a fixed price.The term of this agreement ends in December 2019.The market for natural gas has been volatile,and fluctuations in natural gas prices could affect our competitive position.Our Coffeyville Facility uses a pet coke gasification process to produce nitrogen fertilizer.When compared t
182、o our Coffeyville Facility,low natural gas prices benefit our competitors that rely on natural gas as their primary feedstock and disproportionately impact our operations by making us less competitive with natural gas-based nitrogen fertilizer manufacturers.Continued low natural gas prices could res
183、ult in nitrogen fertilizer pricing drops and impair the ability of the Coffeyville Facility to compete with other nitrogen fertilizer producers who use natural gas as their primary feedstock,and therefore have a material adverse impact on the nitrogen fertilizer segments results of operations,financ
184、ial condition and ability to make cash distributions.Table of Contents December 31,2018|15The East Dubuque Facility uses natural gas as its primary feedstock,and as such,the profitability of operating the East Dubuque Facility is significantly dependent on the cost of natural gas.An increase in natu
185、ral gas prices could make it less competitive with producers who do not use natural gas as their primary feedstock.In addition,an increase in natural gas prices in the United States relative to prices of natural gas paid by foreign nitrogen fertilizer producers may negatively affect our competitive
186、position in the corn belt,and such changes could have a material adverse effect on our results of operations,financial condition and cash flows.We expect to purchase a portion of our natural gas for use in the East Dubuque Facility on the spot market.As a result,we remain susceptible to fluctuations
187、 in the price of natural gas in general and in local markets in particular.We may use short-term,fixed supply,fixed price forward purchase contracts to lock in pricing for a portion of its natural gas requirement,but we may not be able to enter into such agreements on acceptable terms or at all.With
188、out forward purchase contracts for the supply of natural gas,we would need to purchase natural gas on the spot market,which would impair its ability to hedge exposure to risk from fluctuations in natural gas prices.If we enter into forward purchase contracts for natural gas,and natural gas prices de
189、crease,then its cost of sales could be higher than it would have been in the absence of the forward purchase contracts.Any interruption in the supply of natural gas to our East Dubuque Facility could have a material adverse effect on our results of operations and financial condition.Our East Dubuque
190、 Facility depends on the availability of natural gas.We have an agreement with Nicor pursuant 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,
191、including volume limitations under the agreement,pipeline malfunctions,service interruptions,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 t
192、he agreement on satisfactory terms,or at all.Any disruption in the supply of natural gas 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 may need to build a new connection from that
193、 source to the East Dubuque Facility and negotiate related easement rights,which would 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.If li
194、censed 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 for use in our plant operation.In particular,the gasification process used at
195、the Coffeyville Facility to convert pet coke to high purity hydrogen for subsequent conversion to ammonia is licensed from a third party.The license,which is fully paid,grants us perpetual rights to use the pet coke gasification process on specified terms and conditions and is integral to the operat
196、ions of the Coffeyville Facility.If this license or any other license agreement on which our operations rely were to be terminated,licenses to alternative technology may not be available,or may only be available on terms that are not commercially reasonable or acceptable.In addition,any substitution
197、 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 cash flows.Additionally,we may face claims of infringement that could interfere wit
198、h our ability to use technology that is material to our plant operations.Any litigation of this type related to third-party intellectual property rights could result in substantial costs and diversions of resources,either of which could have a material adverse effect on our results of operations,fin
199、ancial condition and cash flows.In the event a claim of infringement against us is successful,we may be required to pay royalties or license fees for past or continued use of the infringing technology,or we may be prohibited from using the infringing technology altogether.If we are prohibited from u
200、sing any technology as a result of such a claim,we may not be able to obtain licenses to alternative technology adequate to substitute for the technology we can no longer use,or licenses for such alternative technology may only be available on terms that are not commercially reasonable or acceptable
201、.In addition,any substitution of new technology for currently licensed technology may require us to make substantial changes to its manufacturing processes or equipment or to our products,and could have a material adverse effect on our results of operations,financial condition and cash flows.Table o
202、f Contents December 31,2018|16Compliance with and changes in environmental laws and regulations,including those related to climate change,could require us to make substantial capital expenditures and adversely affect our performance.Our operations are subject to extensive federal,state and local env
203、ironmental laws and regulations relating to the protection of the environment,including those governing the emission or discharge of pollutants into the environment,product use and specifications and the generation,treatment,storage,transportation,disposal and remediation of solid and hazardous wast
204、es.Violations of applicable environmental laws and regulations or of the conditions of permits issued thereunder can result in substantial penalties,injunctive orders compelling installation of additional controls,civil and criminal sanctions,operating restrictions,injunctive relief,permit revocatio
205、ns and/or facility shutdowns,which may have a material adverse effect on our ability to operate our facilities and accordingly our financial performance.Capital expenditures and operating costs for current and future environmental compliance may be substantial and could have a material adverse effec
206、t on our results of operations,financial condition and profitability.In addition,new environmental 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
207、 expenditures.These laws and regulations are generally expected to impose increasingly stringent,and costly requirements over time.Various legislative and regulatory measures to address climate change and GHG emissions(including carbon dioxide,methane and nitrous oxides)are in various phases of disc
208、ussion or implementation,and could affect our operations.They include proposed and enacted federal regulation and state actions to develop statewide,regional or nationwide programs designed to control and reduce GHG emissions from fixed sources,such as our plants.Many states and regions have impleme
209、nted,or are in the process of implementing,measures to reduce emissions of GHGs,but other than Kansas,we do not currently operate in states that have their own GHG reduction programs.In 2007,a group of Midwestern states,including Kansas(where the Coffeyville Facility is located),formed the Midwester
210、n 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 that implement the trading scheme before it beco
211、mes effective.To date,Kansas has taken no meaningful action to implement the accord,and it is unclear whether Kansas intends to do so in the future.Although it is not possible to predict the requirements of any GHG legislation that may be enacted,any laws or regulations that have been or may be adop
212、ted to restrict or reduce GHG emissions will likely require us to incur increased operating and capital costs and/or increased taxes on GHG emissions,and result in reduced demand for our fertilizer products.If we are unable to maintain sales of our products at a price that reflects such increased co
213、sts,there could be a material adverse effect on our business,financial condition and results of operations.Further,any increase in the prices of our products resulting from such increased costs could have a material adverse effect on our operations,financial condition and cash flows.In addition,clim
214、ate change legislation and regulations may result in increased costs not only for our business but also users of our fertilizer products,thereby potentially decreasing demand for our products.Further,changes in environmental laws and regulations or their interpretation relating to the end-use and ap
215、plication of fertilizers could cause changes in demand for our products or limit our ability market and sell products to end users.From time to time,various state legislatures have proposed bans or other limitations on fertilizer products.Decreased demand for our products may have a material adverse
216、 effect on our results of operations,financial condition and cash flows.Our operations are dependent on third-party suppliers,which could have a material adverse effect on our results of operations,financial condition and cash flows.Operations of our Coffeyville Facility depend in large part on the
217、performance of third-party suppliers,and the operations of the Coffeyville Facility could be adversely affected if the operation of the third-party air separation plant located adjacent to it were disrupted.Additionally,this air separation plant in the past has experienced numerous short-term interr
218、uptions,causing interruptions in our gasifier operations.With respect to electricity,we are party to an electric services agreement with a third-party supplier,which allows for an option for us to extend the term of such agreement through June 30,2024.Our East Dubuque Facility operations also depend
219、 in large part on the performance of third-party suppliers,including for the purchase of electricity.We entered into a utility service agreement,which terminates on May 31,2019 and will continue year-to-year thereafter unless either party provides 12-month advance written notice of termination.Table
220、 of Contents December 31,2018|17Should 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 thereof)could be forced to halt.Alternative sources of s
221、upply could be difficult to obtain.Any shutdown of our operations(or a portion thereof),even for a limited period,could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.We rely on third-party providers of transportation services a
222、nd equipment,which subjects it to risks and uncertainties beyond its control that may have a material adverse effect on the nitrogen fertilizer segments results of operations,financial condition and ability to make distributions.Our business relies on railroad and trucking companies to ship finished
223、 products to customers of the Coffeyville Facility.We also lease railcars from railcar owners to ship its finished products.Additionally,although customers of the East Dubuque Facility generally pick up products at the facility,the facility occasionally relies on barge,truck and railroad companies t
224、o ship products to customers.These transportation operations,equipment and services are subject to various hazards,including extreme weather conditions,work stoppages,delays,spills,derailments and other accidents and other operating hazards.Further,the limited number of towing companies and barges a
225、vailable for ammonia transport may also impact the availability of transportation for our nitrogen fertilizer segments products.These transportation operations,equipment and services are also subject to environmental,safety and other regulatory oversight.Due to concerns related to terrorism or accid
226、ents,local,state and federal governments could implement new regulations affecting the transportation of our finished products.In addition,new regulations could be implemented affecting the equipment used to ship its finished products.Any delay in our ability to ship its finished products as a resul
227、t of these transportation companies failure to operate properly,the implementation of new and more stringent regulatory requirements affecting transportation operations or equipment,or significant increases in the cost of these services or equipment could have a material adverse effect on our result
228、s of operations,financial condition and ability to make cash 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 c
229、ould have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.In addition,the costs of transporting ammonia could increase significantly in the future.Our business manufactures,processes,stores,handles,distributes and transports ammonia,w
230、hich can be very volatile and extremely hazardous.Major accidents or releases involving ammonia could cause severe damage or injury to property,the environment and human health,as well as a possible disruption of supplies and markets.Such an event could result in civil lawsuits,fines,penalties and r
231、egulatory enforcement proceedings,all of which could lead to significant liabilities.Any damage or injury to persons,equipment or property or other disruption of our ability to produce or distribute products could result in a significant decrease in operating revenues and significant additional cost
232、 to replace or repair and insure our assets,which could have a material adverse effect on our results of operations,financial condition and ability to make cash distributions.Our facilities periodically experience minor releases of ammonia related to leaks from its equipment.Similar events may occur
233、 in the future.In addition,we may incur significant losses or costs relating to the operation of 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,a railcar accident may result in fire
234、s,explosions and releases of material which could lead to sudden,severe damage or injury to property,the environment and human health.In the event of contamination,under environmental law we may be held responsible even if it is not at fault and we complied with the laws and regulations in effect at
235、 the time of the accident.Litigation arising from accidents involving ammonia and other products we produce or transport may result in us being named as a defendant in lawsuits asserting claims for substantial damages,which could have a material adverse effect on our results of operations,financial
236、condition and ability to make cash distributions.Table of Contents December 31,2018|18We could incur significant costs in cleaning up contamination at our fertilizer plants and off-site locations.Our businesses handle hazardous substances which may result in accidental spills,discharges or other rel
237、eases of hazardous substances into the environment.Past or future spills related to any of our current or former operations,including fertilizer plants,or transportation of products or hazardous substances from those facilities,may give rise to liability(including strict liability,or liability witho
238、ut fault,and potential cleanup responsibility)to 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 CERCLA,and similar state statutes for past or future spills without regard to fault
239、 or whether our actions were in compliance with the law at the time of the spills.Pursuant to CERCLA and similar state statutes,we could be held liable for contamination associated with facilities we currently own or operate(whether such contamination occurred prior to or during our ownership),facil
240、ities we formerly owned or operated 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,liability to third p
241、arties 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 and cash flows.In
242、 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 resource damage or for cleanup costs for the al
243、leged migration of contamination or other hazardous substances from our facilities to adjacent and other nearby properties.Our Coffeyville Facility has known environmental contamination.We have assumed the previous owners responsibilities under certain administrative orders under RCRA related to con
244、tamination that migrated from CVR Energys Coffeyville refinery onto the nitrogen fertilizer plant property while the previous owner owned and operated the properties.If significant unknown contamination is identified at or migrating from any of our facilities,the associated liability could have a ma
245、terial adverse effect on our results of operations,financial condition and cash flows and may not be covered by insurance.We may incur future liability relating to the off-site disposal of hazardous waste from our facilities.Companies that dispose of,or arrange for the treatment,transportation or di
246、sposal of,hazardous substances at off-site locations may be held jointly and severally liable for 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
247、and the damages or costs in any such proceedings could be material.We may be unable to obtain or renew permits necessary for our operations,which could inhibit our ability to do business.Our business holds numerous environmental and other governmental permits and approvals authorizing operations at
248、our facilities.Future expansion of our operations is predicated upon securing the necessary 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 a
249、pproval,could have a material adverse effect on our ability to continue operations and on our financial condition,results of operations and cash flows.New regulations concerning the transportation,storage and handling of hazardous chemicals,risks of terrorism and the security of chemical manufacturi
250、ng facilities could result in higher operating costs.The costs of complying with future regulations relating to the transportation,storage and handling of hazardous chemicals and security associated with our facilities may have a material adverse effect on our results of operations,financial conditi
251、on and cash flows.Targets such as chemical manufacturing facilities may be at greater risk of future terrorist attacks than other targets in the United States.As a result,the chemical industry has responded to the issues that arose following the terrorist attacks on September 11,2001 by starting new
252、 initiatives relating to the security of chemical industry facilities and the transportation of hazardous chemicals in the United States.Future terrorist attacks could lead to even stronger,more costly initiatives that could result in a material adverse effect on our results of operations,financial
253、condition and cash flows.Table of Contents December 31,2018|19Our facilities face significant risks due to physical damage hazards,environmental liability risk exposure,and unplanned or emergency partial or total plant shutdowns resulting in business interruptions.We could incur potentially signific
254、ant costs to the extent there are unforeseen events which cause property damage and a material decline in production which are not fully insured.The commercial insurance industry engaged in underwriting energy industry risk is specialized and there is finite capacity;therefore,the industry may limit
255、 or curtail coverage,may modify the coverage provided or may substantially increase premiums in the future.If any of our plants,logistics assets,or key suppliers sustains a catastrophic loss and operations are shutdown or significantly impaired,it would have a material adverse impact on our operatio
256、ns,financial condition and cash flows.In addition,the risk exposures we have at the Coffeyville,Kansas plant complex are greater due to production facilities for CVR Energys refinery and our fertilizer production,distribution and storage being in relatively close proximity and potentially exposed to
257、 damage from one incident,such as resulting damages from the perils of explosion,windstorm,fire or flood.Operations at either or both of the plants could be curtailed,limited or completely shut down for an extended period of time as the result of one or more unforeseen events and circumstances,which
258、 may not be within our control,including:major unplanned maintenance requirements;catastrophic events caused by mechanical breakdown,electrical injury,pressure vessel rupture,explosion,contamination,fire,or natural disasters,including floods,windstorms and other similar events;labor supply shortages
259、 or labor difficulties that result in a work stoppage or slowdown;cessation or suspension of a plant or specific operations dictated by environmental authorities;and an event or incident involving a large clean-up,decontamination or the imposition of laws and ordinances regulating the cost and sched
260、ule of demolition or reconstruction,which can cause significant delays in restoring property to its pre-loss condition.We have sustained losses over the past ten-year period at our facilities,which are illustrative of the types of risks and hazards that exist.These losses or events resulted in costs
261、 assumed by us that were not fully insured due to policy retentions or applicable exclusions.We are insured under casualty,environmental,property and business interruption insurance policies.The property and business interruption policies insure real and personal property,including property located
262、at our plants.There is potential for a common occurrence to impact both our Coffeyville Facility and CVR Energys Coffeyville refinery in which case the insurance limits and applicable sub-limits would apply to all damages combined.These policies are subject to limits,sub-limits,retention(financial a
263、nd time-based)and deductibles.The application of these and other policy conditions could materially impact insurance recoveries and potentially cause us to assume losses which could impair earnings.There is finite capacity in the commercial insurance industry engaged in underwriting energy industry
264、risk,and there are risks associated with the commercial insurance industry reducing capacity,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 av
265、ailability include,but are not limited to:industry wide losses,natural disasters,specific 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,we may not be able to c
266、ontinue our present limits of insurance coverage or obtain sufficient insurance capacity to adequately insure our risks for property damage or business interruption.We are subject to strict laws and regulations regarding employee and process safety,and failure to comply with these laws and regulatio
267、ns could have a material adverse effect on our results of operations,financial condition and profitability.We are subject to the requirements of OSHA and comparable state statutes that regulate the protection of the health and safety of workers,and the proper design,operation and maintenance of our
268、equipment.In addition,OSHA and certain environmental regulations require that we maintain information about 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 these requirements,
269、including general industry standards,record keeping requirements and monitoring and control of occupational exposure to regulated substances,may result in significant fines or compliance costs,which could have a material adverse effect on our results of operations,financial condition and cash flows.
270、Table of Contents December 31,2018|20A significant portion of our workforce is unionized,and we are subject to the risk of labor disputes and adverse employee relations,which may disrupt our business and increase our costs.As of December 31,2018,approximately 34%of our employees were represented by
271、labor unions under collective bargaining agreements.We may not be able to renegotiate our collective bargaining agreements when they expire on satisfactory terms or at all.A failure to do so may increase our costs.In addition,our existing labor agreements may not prevent a strike or work stoppage at
272、 any of our facilities in the future,and any work stoppage could negatively affect our results of operations,financial condition and cash flows.Risks Related to Our Capital StructureInternally generated cash flows and other sources of liquidity may not be adequate for the capital needs of our busine
273、ss.Our business is capital intensive,and working capital needs may vary significantly over relatively short periods of time.For instance,nitrogen fertilizer demand volatility can significantly impact working capital on a week-to-week and month-to-month basis.If we cannot generate adequate cash flow
274、or otherwise secure sufficient liquidity to meet our working capital needs or support our short-term and long-term capital requirements,we may be unable to meet our debt obligations,pursue our business strategies or comply with certain environmental standards,which would have a material adverse effe
275、ct on our business and results of operations.Instability and volatility in the capital,credit and commodity markets in the global economy could negatively impact our business,financial condition,results of operations and cash flows.Our business,financial condition and results of operations could be
276、negatively impacted by difficult conditions and volatility in the capital,credit and commodities markets and in the global economy.For example:Although we believe we have sufficient liquidity under our ABL credit facility to run the business,under extreme market conditions there can be no assurance
277、that such funds would be available or sufficient,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 our common units,which may make it more difficult for us to raise additional capital and
278、thereby limit our ability to grow,which could in turn cause our unit price to drop.Our credit facility contains 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 agreement in the future.Further,any s
279、uch amendment may be expensive.In addition,any new credit facility we may enter into may require us to agree to additional covenants.Market conditions could result in significant customers experiencing financial difficulties.We are exposed to the credit risk of our customers,and their failure to mee
280、t their financial obligations when due because of bankruptcy,lack of liquidity,operational failure or other reasons could result in decreased sales and earnings for us.Our level of indebtedness,including the restrictive covenants therein,may affect their ability to operate our business,and may have
281、a material adverse effect on our financial condition and results of operations.We have incurred significant indebtedness and we may be able to incur significant additional indebtedness in the future.If new indebtedness is added to our current indebtedness,the risks described below could increase.Our
282、 level of indebtedness could have important consequences,such as:limiting our ability to obtain additional financing to fund their working capital needs,capital expenditures,debt service requirements,acquisitions or other purposes;requiring us to utilize a significant portion of our cash flows to se
283、rvice their indebtedness,thereby reducing available cash and our ability to make distributions on our common units;limiting our ability to use operating cash flow in other areas of the business because we must dedicate a substantial portion of additional funds to service debt;limiting our ability to
284、 compete with other companies who are not as highly leveraged,as we may be less capable of responding to adverse economic and industry conditions;limiting our ability to make certain payments on debt that is subordinated or secured on a junior basis;Table of Contents December 31,2018|21 restricting
285、us from making strategic acquisitions or investments,introducing new technologies or exploiting business opportunities;restricting the way in which we conduct business because of financial and operating covenants in the agreements governing our and our respective subsidiaries existing and future ind
286、ebtedness,including,in the case of certain indebtedness of subsidiaries,certain covenants that restrict the ability of subsidiaries to pay dividends or make other distributions;limiting our ability to enter into certain transactions with our affiliates;limiting our ability to designate our subsidiar
287、ies as unrestricted subsidiaries;exposing us to potential events of default(if not cured or waived)under financial and operating covenants contained in our or our respective subsidiaries debt instruments that could have a material adverse effect on their business,financial condition and operating re
288、sults;increasing our vulnerability to a downturn in general economic conditions or in pricing of products;and limiting our ability to react to changing market conditions in their respective industries and in respective customers industries.In addition to debt service obligations,our operations requi
289、re substantial investments on a continuing basis.Our ability to make scheduled debt payments,to refinance obligations with respect to indebtedness and to fund capital and non-capital expenditures necessary to maintain the condition of our operating assets,properties and systems software,as well as t
290、o provide capacity for the growth of our business,depends on our financial and operating performance,which,in turn,is subject to prevailing economic conditions and financial,business,competitive,legal and other factors.Further,we are and will be subject to covenants contained in agreements governing
291、 present and future indebtedness.These covenants include,and will likely include,restrictions on certain payments(including restrictions on distributions to our unitholders),the granting of liens,the incurrence of additional indebtedness,asset sales,transactions with affiliates and mergers and conso
292、lidations.Any failure to comply with these covenants could result in a default under our current credit agreements or debt instruments or future credit agreements.We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our
293、debt obligations that may not be successful.Our ability to satisfy debt obligations will depend upon,among other things:our future financial and operating performance,which will be affected by prevailing economic conditions and financial,business,regulatory and other factors,many of which are beyond
294、 our control;and our future ability to obtain other financing.We cannot offer any assurance that our business will generate sufficient cash flow from operations or that we will be able to draw funds under our ABL credit facility or otherwise,or from other sources of financing,in an amount sufficient
295、 to fund our respective liquidity needs.If cash flows and capital resources are insufficient to service our indebtedness,we may be forced to reduce or delay capital expenditures,sell assets,seek additional capital or restructure or refinance indebtedness or seek bankruptcy protection.These alternati
296、ve measures may not be successful and may not permit us to meet scheduled debt service obligations.Our ability to restructure or refinance debt will depend on the condition of the capital markets and our financial condition at such time.Any refinancing of debt could be at higher interest rates and m
297、ay require us to comply with more onerous covenants,which could further restrict business operations,and the terms of existing or future debt agreements may restrict us from adopting some of these alternatives.In addition,in the absence of adequate cash flows or capital resources,we could face subst
298、antial liquidity problems and might be required to dispose of material assets or operations,or sell equity,and/or negotiate with lenders to restructure the applicable debt in order to meet our debt service and other obligations.We may not be able to consummate those dispositions for fair market valu
299、e or at all.Market or business conditions may limit our ability to avail ourselves of some or all of these options.Furthermore,any proceeds that we realize from any such dispositions may not be adequate to meet debt service obligations when due.None of our unitholders or CVR Energy or any of its res
300、pective affiliates has any continuing obligation to provide us with debt or equity financing.Table of Contents December 31,2018|22Further,our ABL credit facility bears interest at variable rates and other debt we incur could likewise be variable-rate debt.If market interest rates increase,variable-r
301、ate debt will create higher debt service requirements,which could adversely affect our ability to fund our liquidity needs,capital investments and distributions to our unitholders.We may enter into agreements limiting our exposure to higher interest rates,but any such agreements may not offer comple
302、te protection from this risk.Mr.Carl C.Icahn exerts significant influence over the Partnership through his controlling ownership of CVR Energy,and his interests may conflict with the interests of the Partnership and our unitholders.Mr.Carl C.Icahn indirectly controls approximately 71%of the voting p
303、ower of CVR Energys common stock and,by virtue of such ownership,is able to control or exert substantial influence over the Partnership through CVR Energys ownership of our general partner and its sole member,including:the election and appointment of directors;business strategy and policies;mergers
304、or other business combinations;acquisition or disposition of assets;future issuances of common stock,common units or other securities;incurrence of debt or obtaining other sources of financing;and the payment of distributions on our common units.The existence of a controlling stockholder may have th
305、e effect of making it difficult for,or may discourage or delay,a third party from seeking to acquire a majority of our common units,which may adversely affect the market price of such common units.Further,Mr.Icahns interests may not always be consistent with the Partnerships interests or with the in
306、terests of our common unitholders.Mr.Icahn and entities controlled by him may also pursue acquisitions or business opportunities in industries in which we compete,and there is no requirement that any additional business opportunities be presented to us.We also have and may in the future enter into t
307、ransactions to purchase goods or services with affiliates of Mr.Icahn.To the extent that conflicts of interest may arise between us and Mr.Icahn and his affiliates,those conflicts may be resolved in a manner adverse to us and our common unitholders.Risks Related to Our Limited Partnership StructureW
308、e have a policy is to distribute an amount equal to the“available cash”we generate each quarter,which could limit our ability to grow and make acquisitions.However,we may not have sufficient available cash to pay any quarterly distribution on common units or the board of directors of our general par
309、tner may elect to distribute less than all of our available cash.The current policy of the board of directors of our general partner is to distribute an amount equal to the available cash generated by our business each quarter to our common unitholders.As a result of its cash distribution policy,we
310、will likely need to rely primarily upon external financing sources,including commercial bank borrowings and the issuance of debt and equity securities,to fund acquisitions and expansion capital expenditures.As such,to the extent we are unable to finance growth externally,our general partners cash di
311、stribution policy may significantly impair our ability to grow.We may not have sufficient available cash each quarter to enable the payment of distributions to common unitholders.Furthermore,the partnership agreement does not require us to pay distributions on a quarterly basis or otherwise.As such,
312、the board of directors of our general partner may modify or revoke its cash distribution policy at any time at its discretion,including in such a manner that would result in an elimination of cash distributions regardless of the amount of available cash our business generates.Table of Contents Decem
313、ber 31,2018|23In addition,because of its distribution policy,our growth,if any,may not be as robust as that of businesses that reinvest their available cash to expand ongoing operations.To the extent we issue additional units in connection with any acquisitions or expansion capital expenditures or a
314、s in-kind distributions,current unitholders will experience dilution and the payment of distributions on those additional units may decrease the amount we distribute in respect of its outstanding units.Under our partnership agreement,we are authorized to issue an unlimited number of additional inter
315、ests without a vote of the common unitholders.The issuance by us of additional common units or other equity interests of equal or senior rank will reduce the proportionate ownership interest of common unitholders immediately prior to the issuance.As a result of the issuance of common units,the follo
316、wing may occur:the amount of cash distributions on each common unit may decrease;the ratio of our taxable income to distributions may increase;the relative voting strength of each previously outstanding common unit will be diminished;and the market price of the common units may decline.In addition,o
317、ur partnership agreement does not prohibit the issuance by our subsidiaries of equity interests,which may effectively rank senior to the common units.The incurrence of additional commercial borrowings or other debt to finance its growth strategy would result in increased interest expense,which,in tu
318、rn,would reduce the available cash we have to distribute to unitholders.Our partnership agreement has limited our general partners liability,replaces default fiduciary duties and restricts the remedies available to common unitholders for actions that,without these limitations and reductions,might ot
319、herwise constitute breaches of fiduciary duty.Our partnership agreement limits the liability and replaces the fiduciary duties of our general partner,while also restricting the remedies available to our common unitholders for actions that,without these limitations and reductions,might constitute bre
320、aches of fiduciary duty.Delaware partnership law permits such contractual reductions of fiduciary duty.The partnership agreement contains provisions that replace the standards to which our general partner would otherwise be held by state fiduciary duty law.For example:The partnership agreement permi
321、ts our general partner to make a number of decisions in its individual capacity,as opposed to its capacity as general partner.This entitles its general partner to consider only the interests and factors that it desires,and means that it has no duty or obligation to give any consideration to any inte
322、rest of,or factors affecting,any limited partner.The partnership agreement provides that our general partner will not have any liability to unitholders for decisions made in its capacity as general partner so long as it acted in good faith,meaning it believed that the decision was in our best intere
323、st.The partnership agreement provides that our general partner and the officers and directors of its general partner will not be liable for monetary damages to common unitholders,including us,for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of co
324、mpetent jurisdiction determining that the general partner or its officers or directors acted in bad faith or engaged in fraud or willful misconduct,or in the case of a criminal matter,acted with knowledge that the conduct was criminal.In addition,our partnership agreement(i)generally provides that a
325、ffiliated transactions and resolutions of conflicts of interest not approved by the conflicts committee of the board of directors of its general partner and not involving a vote of unitholders must be on terms no less favorable to us than those generally being provided to or available from unrelated
326、 third parties or be“fair and reasonable”to us,as determined by its general partner in good faith,and that,in determining whether a transaction or resolution is“fair and reasonable,”the general partner may consider the totality of the relationships between the parties involved,including other transa
327、ctions that may be particularly advantageous or beneficial to affiliated parties,including us and(ii)provides that in resolving conflicts of interest,it will be presumed that in making its decision,the general partner or its conflicts committee acted in good faith,and in any proceeding brought by or
328、 on behalf of any holder of common units,the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption.By purchasing a common unit,a common unitholder agrees to be bound by the provisions set forth in the partnership agreement,including the provisions describ
329、ed above.Table of Contents December 31,2018|24Our general partner,an indirect wholly-owned subsidiary of CVR Energy,has fiduciary duties to CVR Energy and its stockholders,and the interests of CVR Energy and its stockholders may differ significantly from,or conflict with,the interests of our public
330、common unitholders.Our general partner is responsible for managing us.Although our general partner has fiduciary duties to manage us in a manner that is in our best interests,the fiduciary duties are specifically limited by the express terms of our partnership agreement,and the directors and officer
331、s of our general partner also have fiduciary duties to manage our general partner in a manner beneficial to CVR Energy and its stockholders.The interests of CVR Energy and its stockholders may differ from,or conflict with,the interests of our public common unitholders.In resolving these conflicts,ou
332、r general partner may favor its own interests,the interests of CRLLC,its sole member,or the interests of CVR Energy and holders of CVR Energys common stock,including its majority stockholder,an affiliate of Icahn Enterprises L.P.,over our interests and those of our common unitholders.The potential c
333、onflicts of interest include,among others,the following:Neither our partnership agreement nor any other agreement requires the owners of our general partner,including CVR Energy,to pursue a business strategy that favors us.The affiliates of our general partner,including CVR Energy,have fiduciary duties to make decisions in their own best interests and in the best interest of holders of CVR Energys
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