1、UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_Form 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2019ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1
2、934 For the transition period from to Commission file number:001-35120 _CVR Partners,LP(Exact name of registrant as specified in its charter)Delaware56-2677689(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)2277 Plaza Drive,Suite 500,Sugar Land,Texas 77
3、479(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 ClassTrading Symbol(s)Name of each exchange on which registeredCommon units representing limited partner intere
4、stsUANNew 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 t
5、o Section 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 1934during the preceding 12 months(or for such shorter period that the registrant was required to file suc
6、h reports),and(2)has been subject to such filingrequirements 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 ofRegulation S-T(232.405 of this chapter)during the preceding
7、 12 months(or for such shorter period that the registrant was required to submit suchfiles).Yes No .Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or anemerging growth company.See the definitions of“
8、large accelerated filer,”“accelerated filer,”“smaller reporting company”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if t
9、he registrant has elected not to use the extended transition period for complying with any newor revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act)
10、.Yes No At June 28,2019,the aggregate market value of the voting common units held by non-affiliates of the registrant was approximately$303.5 million basedupon the closing price of its common units on the New York Stock Exchange Composite tape.As of February 18,2020,there were 113,282,973 shares of
11、 theregistrants common units outstanding.Table of ContentsTABLE OF CONTENTSCVR PartnersAnnual Report on Form 10-KPART IPART IIIItem 1.Business4Item 10.Directors,Executive Officers and Corporate Governance71Item 1A.Risk Factors10Item 11.Executive Compensation79Item 1B.Unresolved Staff Comments27Item
12、12.Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters96Item 2.Properties27Item 13.Certain Relationships and Related Transactions,and Director Independence98Item 3.Legal Proceedings27Item 14.Principal Accounting Fees and Services99Item 4.Mine Safety Disclosu
13、res27PART IIPART IVItem 5.Market For Registrants Common Equity,Related Unitholder Matters and Issuer Purchases of Equity Securities28Item 15.Exhibits,Financial Statement Schedules100Item 6.Selected Financial Data29Item 16.Form 10-K Summary103Item 7.Managements Discussion and Analysis of Financial Co
14、ndition and Results of Operations30Item 7A.Quantitative and Qualitative Disclosures About Market Risk42Item 8.Financial Statements and Supplementary Data43Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure70Item 9A.Controls and Procedures70Item 9B.Other Infor
15、mation70December 31,2019|1 GLOSSARY OF SELECTED TERMSThe following are definitions of certain terms used in this Annual Report on Form 10-K for the year ended December 31,2019(this“Report”).Ammonia Ammonia is a direct application fertilizer and is primarily used as a building block for other nitroge
16、n productsfor 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 operatingday basis.The throughput may be expressed in terms of maximum sustainable,nameplate or economic capacity.The
17、maximumsustainable or nameplate capacities may not be the most economical.The economic capacity is the throughput that generallyprovides the greatest economic benefit based on considerations such as feedstock costs,product values and downstream unitconstraints.Corn belt The primary corn producing re
18、gion 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 from ethylene,or biologically from fermentation of various sugars from carbohydrates found
19、 in agricultural crops and cellulosic residues fromcrops or wood.It is used in the United States as a gasoline octane enhancer and oxygenate.MMBtu One million British thermal units:a measure of energy.One Btu of heat is required to raise the temperature ofone pound of water one degree Fahrenheit.MSC
20、F One thousand standard cubic feet,a customary gas measurement.Netback Netback represents net sales less freight revenue divided by product sales volume in tons.Netback is alsoreferred to as product pricing at gate.Petroleum coke(“pet coke”)a coal-like substance that is produced during the oil refin
21、ing process.Product pricing at gate Product pricing at gate represents net sales less freight revenue divided by product sales volumein tons.Product pricing at gate is also referred to as netback.Southern Plains Primarily includes Oklahoma,Texas and New Mexico.Turnaround A periodically performed sta
22、ndard procedure to inspect,refurbish,repair and maintain the plant assets.Thisprocess involves the shutdown and inspection of major processing units and occurs every two to three years.A turnaround willtypically extend the operating life of a facility and return performance desired levels.UAN An aqu
23、eous solution of urea and ammonium nitrate used as a fertilizer.Utilization Measurement of the annual production of UAN and Ammonia expressed as a percentage of the plantsnameplate production capacity.Table of ContentsDecember 31,2019|2Important Information Regarding Forward Looking StatementsThis A
24、nnual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of1933,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,I
25、tem 1A.Risk Factors and Item 7.Managements Discussion and Analysis ofFinancial 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,
26、projected costs,prospects,plansand 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 phrasesare intended to i
27、dentify forward-looking statements.Although we believe our assumptions concerning future events are reasonable,a number of risks,uncertainties and other factorscould cause actual results and trends to differ materially from those projected or forward-looking.Forward-looking statements,as well ascert
28、ain risks,contingencies,or uncertainties that may impact our forward-looking statements,include,but are not limited to,thefollowing: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 p
29、artner to modify or revoke our distribution policy at any time;the cyclical and seasonal nature of our business;the impact of weather on our business including our ability to produce,market,or sell fertilizer products profitably or at all;the dependence of our operations on a few third-party supplie
30、rs,including providers of transportation services,and equipment;our reliance on,or our ability to procure economically or at all,pet coke we purchase from CVR Energy and third-partysuppliers or our reliance on the natural gas,electricity,oxygen,nitrogen,sulfur processing,compressed dry air and other
31、products that we purchase from third parties;the supply and price levels of essential raw materials;our production levels,including the risk of a material decline in those levels;accidents or other unscheduled shutdowns or interruptions affecting our facilities,machinery,or equipment,or those of our
32、suppliers or customers;potential operating hazards from accidents,fire,severe weather,tornadoes,floods or other natural disastersour ability to obtain,retain,or renew permits,licenses and authorizations to operate our business;competition in the nitrogen fertilizer businesses including potential imp
33、acts of domestic and global supply and demand;capital expenditures;existing and future laws,rulings and regulations,including but not limited to those relating to the environment,climate change,and/or the transportation or production of hazardous chemicals like ammonia,including potential liabilitie
34、s or capitalrequirements arising from such laws,rulings,or regulations;alternative energy or fuel sources,and the end-use and application of fertilizers;risks of terrorism,cybersecurity attacks,the security of chemical manufacturing facilities and other matters beyond our control;our lack of asset d
35、iversification;our dependence on significant customers and the creditworthiness and performance by counterparties;our potential loss of transportation cost advantage over our competitors;our partial dependence on customers and distributors,including to transport goods and equipment;risks associated
36、with third party operation of or control over important facilities necessary for operation of our nitrogenfertilizer facilities;The volatile nature of ammonia,potential liability for accidents involving ammonia including damage or injury to property,theenvironment or human health and increased costs
37、 related to the transport or production of ammonia;our potential inability to successfully implement our business strategies,including the completion of significant capitalprograms or projects;our reliance on CVR Energys senior management team and conflicts of interest they may face operating each o
38、f CVR Partnersand CVR Energy;control of our general partner by CVR Energy;our ability to continue to license the technology used in our operations;restrictions in our debt agreements;changes in our treatment as a partnership for U.S.federal income or state tax purposes;rulings,judgments or settlemen
39、ts 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;andour ability to recover under our insurance policies for damages or losses in full or at all.All forward-looking statements included
40、 in this report are based on information available to us on the date of this report.Weundertake no obligation to revise or update any forward-looking statements as a result of new information,future events or otherwise.Table of ContentsDecember 31,2019|3PART IPart 1 should be read in conjunction wit
41、h Managements Discussion and Analysis in Item 7 and our consolidated financial statements and related notes thereto in Item 8.Item 1.BusinessOverviewCVR Partners,LP(referred to as“CVR Partners”or the“Partnership”)is a Delaware limited partnership formed in 2011by CVR Energy,Inc.(together with its su
42、bsidiaries,but excluding the Partnership and its subsidiaries,“CVR Energy”)to own,operate and grow its nitrogen fertilizer business.The Partnership produces nitrogen fertilizer products at two manufacturingfacilities,which are located in Coffeyville,Kansas(the“Coffeyville Facility”)and East Dubuque,
43、Illinois(the“East DubuqueFacility”).As used in these financial statements,references to CVR Partners,the Partnership,“we”,“us”,and“our”may referto consolidated subsidiaries of CVR Partners or one or both of the facilities,as the context may require.We produce anddistribute nitrogen fertilizer produc
44、ts,which are used by farmers to improve the yield and quality of their crops.Our principalproducts are ammonia and UAN,and all of our products are sold on a wholesale basis.Organizational Structure and Related OwnershipThe following chart illustrates the organizational structure of the Partnership a
45、s of December 31,2019.Table of ContentsDecember 31,2019|4FacilitiesThe Coffeyville Facility includes a gasifier complex having a capacity of 89 million standard cubic feet per day ofhydrogen,a 1,300 ton per day capacity ammonia unit and a 3,000 ton per day capacity UAN unit.The Coffeyville Facility
46、is theonly nitrogen fertilizer plant in North America that utilizes a pet coke gasification process to produce nitrogen fertilizer.TheCoffeyville Facilitys largest raw material used in the production of ammonia is pet coke,which it purchases from CVR Energyand third parties.For the years ended Decem
47、ber 31,2019,2018,and 2017,the Partnership purchased approximately$20.0million,$13.2 million,and$8.1 million,respectively,of pet coke at an average cost per ton of$37.47,$28.41,and$16.56,respectively.For the years ended December 31,2019,2018,and 2017,we upgraded approximately 90%,93%,and 88%,respecti
48、vely,of our ammonia production into UAN,a product that presently generates greater profit than ammonia.We upgradesubstantially all of our ammonia production at the Coffeyville Facility into UAN and expect to continue to do so when theeconomics are favorable.The East Dubuque Facility,which includes a
49、 1,075 ton per day capacity ammonia unit and a 1,100 ton per day capacityUAN unit,has the flexibility to vary its product mix enabling the East Dubuque Facility to upgrade a portion of its ammoniaproduction into varying amounts of UAN,nitric acid,and liquid and granulated urea,depending on market de
50、mand,pricing,and storage availability.The East Dubuque Facilitys largest raw material used in the production of ammonia is natural gas,which we purchase from third parties.For the years ended December 31,2019,2018 and 2017,the East Dubuque Facilityincurred approximately$21.5 million,$22.5 million,an
51、d$26.3 million for feedstock natural gas,respectively,which equaledan average cost of$3.08,$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 forour products make their purchasing decisi
52、ons principally on the basis of delivered price and,to a lesser extent,on customerservice and product quality.The selling prices of our products fluctuate in response to global market conditions and changes insupply and demand.AgricultureThe three primary forms of nitrogen fertilizer used in the Uni
53、ted States of America are ammonia,urea,and UAN.Unlikeammonia and urea,UAN can be applied throughout the growing season and can be applied in tandem with pesticides andherbicides,providing farmers with flexibility and cost savings.As a result of these factors,UAN typically commands apremium price to
54、urea and ammonia,on a nitrogen equivalent basis.Nutrients are depleted in soil over time and,therefore,must be replenished through fertilizer use.Nitrogen is the mostquickly depleted nutrient and must be replenished every year,whereas phosphate and potassium can be retained in soil for up tothree ye
55、ars.Plants require nitrogen in the largest amounts,and it accounts for approximately 59%of primary fertilizerconsumption on a nutrient ton basis,per the International Fertilizer Industry Association(“IFIA”).DemandGlobal demand for fertilizers is driven primarily by grain demand and prices,which,in t
56、urn,are driven by populationgrowth,farmland per capita,dietary changes in the developing world,and increased consumption of bio-fuels.According to theIFIA,from 1975 to 2017,global fertilizer demand grew 2%annually.Global fertilizer use,consisting of nitrogen,phosphate,and potassium,is projected to i
57、ncrease by 34%between 2010 and 2030 to meet global food demand according to a studyfunded by the Food and Agricultural Organization of the United Nations.Currently,the developed world uses fertilizer moreintensively than the developing world,but sustained economic growth in emerging markets is incre
58、asing food demand andfertilizer 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 production isestimated to have increased 36%be
59、tween 2009 and 2019,but still failed to keep pace with increases in demand,promptingChina to grow its wheat and coarse grain imports by more than 552%over the same period,according to the United StatesDepartment of Agriculture(“USDA”).The United States is the worlds largest exporter of coarse grains
60、,accounting for 25%of world exports and 27%of worldproduction for the fiscal year ended September 30,2019,according to the USDA.A substantial amount of nitrogen is consumedTable of ContentsDecember 31,2019|5in production of these crops to increase yield.Based on Fertecon Limiteds(“Fertecon”)2019 est
61、imates,the United States is theworlds third largest consumer of nitrogen fertilizer and the worlds largest importer of nitrogen fertilizer.Fertecon is areputable agency which provides market information and analysis on fertilizers and fertilizer raw materials for fertilizer andrelated industries,as
62、well as international agencies.Fertecon estimates indicate the United States represented 11%of totalglobal nitrogen fertilizer consumption for 2019,with China and India as the top consumers representing 23%and 15%of totalglobal nitrogen fertilizer consumption,respectively.North American nitrogen fer
63、tilizer producers predominantly use natural gas as their primary feedstocks.Over the last fiveyears,U.S.oil and natural gas reserves have increased significantly due to,among other factors,advances in extracting shale oiland gas,as well as relatively high oil and gas prices.More recently,global dema
64、nd has slowed with production staying steadyeven as oil and gas prices have declined substantially over the past two years.This has led to significantly reduced natural gasand oil prices as compared to historical prices.As a result,North America has become a low-cost region for nitrogen fertilizerpr
65、oduction.Raw Material SupplyCoffeyville Facility-During the past five years,just under 61%of the Coffeyville Facilitys pet coke requirements onaverage were supplied by CVR Energys adjacent Coffeyville,Kansas refinery pursuant to a multi-year agreement.Historically,the Coffeyville Facility has obtain
66、ed the remainder of its pet coke requirements through third-party contracts typically priced ata discount to the spot market.In 2019,our supply of pet coke from the Coffeyville refinery declined to approximately 40%,generally attributable to increased processing of shale crude oil,which reduced the
67、amount of pet coke produced by the refineryand increased the amount of third-party purchases made at spot prices.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 theCoffeyvil
68、le Facility gasifiers.East Dubuque Facility-The East Dubuque Facility uses natural gas to produce nitrogen fertilizer.The East DubuqueFacility is generally able to purchase natural gas at competitive prices due to the plants connection to the Northern Natural Gasinterstate pipeline system,which is w
69、ithin one mile of the facility,and a third-party owned and operated pipeline.The pipelinesare connected to a third-party distribution system at the Chicago Citygate receipt point and at the Hampshire interconnect fromwhich natural gas is transported to the East Dubuque Facility.As of December 31,201
70、9,we had commitments to purchaseapproximately 0.8 million and 0.6 million MMBtus,respectively,of natural gas supply for planned use in our East DubuqueFacility in January and February of 2020 at a weighted average rate per MMBtu of approximately$2.67 and$2.66,respectively,exclusive of transportation
71、 costs.Marketing and DistributionWe primarily market UAN products to agricultural customers and ammonia products to agricultural and industrialcustomers.UAN and ammonia,including freight,accounted for approximately 70%and 24%,respectively,of total net sales forthe year ended December 31,2019.UAN and
72、 ammonia are primarily distributed by truck or by railcar.If delivered by truck,products are most commonly soldon a free-on-board(“FOB”)shipping point basis,and freight is normally arranged by the customer.We operate a fleet ofrailcars for product delivery.If delivered by railcar,our products are mo
73、st commonly sold on a FOB destination point basis,andwe typically arrange the freight.The nitrogen fertilizer products leave the Coffeyville Facility either in railcars for destinations located principally on theUnion Pacific railroad,the Burlington Northern Santa Fe Railway railroad,or in trucks fo
74、r direct shipment to customers.TheEast 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 finaldestinations by tr
75、uck.Additionally,the East Dubuque Facility has direct access to a barge dock on the Mississippi River,aswell as a nearby rail spur serviced by the Canadian National Railway Company.Table of ContentsDecember 31,2019|6CustomersWe sell UAN products to retailers and distributors.In addition,we sell ammo
76、nia to agricultural and industrial customers.Given the nature of our business,and consistent with industry practice,most of our contracts with customers are for a term of12-months or less.Some of our industrial sales include long-term purchase contracts.For the year ended December 31,2019,the top tw
77、o customers in the aggregate represented 28%of net sales.CompetitionOur business has experienced and expects to continue to meet significant levels of competition from current and potentialcompetitors,many of whom have significantly greater financial and other resources.Competition in the nitrogen f
78、ertilizerindustry is dominated by price considerations.However,during the spring and fall application seasons,farming activitiesintensify and delivery capacity is a significant competitive factor.We seasonally adjust inventory to enhance our manufacturingand distribution operations.Our major competi
79、tors include CF Industries Holdings,Inc.,including its majority owned subsidiary Terra NitrogenCompany,L.P.;LSB Industries,Inc.;Koch Fertilizer Company,LLC;and Nutrien Ltd.(formerly known as Agrium,Inc.andPotash Corporation of Saskatchewan,Inc.).Domestic competition is intense due to customers sophi
80、sticated buying tendenciesand competitor strategies that focus on cost and service.We also encounter competition from producers of fertilizer productsmanufactured in foreign countries,including the threat of increased production capacity.In certain cases,foreign producers offertilizer who export to
81、the United States may be subsidized by their respective governments.SeasonalityBecause we primarily sell agricultural commodity products,our business is exposed to seasonal fluctuations in demand fornitrogen fertilizer products in the agricultural industry.In addition,the demand for fertilizers is a
82、ffected by the aggregate cropplanting decisions and fertilizer application rate decisions of individual farmers who make planting decisions based largely onthe prospective profitability of a harvest.The specific varieties and amounts of fertilizer they apply depend on factors like cropprices,farmers
83、 current liquidity,soil conditions,weather patterns,and the types of crops planted.We typically experiencehigher net sales in the first half of the calendar year,which is referred to as the planting season,and net sales tend to be lowerduring the second half of each calendar year,which is referred t
84、o as the fill season.Environmental MattersOur business is subject to extensive and frequently changing federal,state,and local environmental,health,and safety lawsand regulations governing the emission and release of hazardous substances into the environment,the treatment and dischargeof waste water
85、,and the storage,handling,use,and transportation of our nitrogen fertilizer products.These laws and regulationsand the enforcement thereof impact us by imposing:restrictions on operations or the need to install enhanced or additional controls;liability for the investigation and remediation of contam
86、inated soil and groundwater at current and formerfacilities(if any)and off-site waste disposal locations;andspecifications for the products we market,primarily UAN and ammonia.Our operations require numerous permits,licenses,and authorizations.Failure to comply with these permits orenvironmental law
87、s and regulations could result in fines,penalties,or other sanctions or a revocation of our permits.Inaddition,the laws and regulations to which we are subject are often evolving and many of them have become more stringent orhave become subject to more stringent interpretation or enforcement by fede
88、ral or state agencies.These laws and regulationscould result in increased capital,operating,and compliance costs.The Federal Clean Air Act(“CAA”)The CAA and its implementing regulations,as well as corresponding state laws and regulations governing air emissions,affect us both directly and indirectly
89、.Direct impacts may occur through the CAAs permitting requirements and emissioncontrol requirements relating to specific air pollutants,as well as the requirement to maintain a risk management program tohelp prevent accidental releases of certain substances.Some or all of the regulations promulgated
90、 pursuant to the CAA,or anyTable of ContentsDecember 31,2019|7future promulgations of regulations,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
91、needed,thecosts could be material.The regulation of air emissions under the CAA requires that we obtain various construction and operating permits andincur capital expenditures for the installation of certain air pollution control devices at our operations.Various standards andprograms specific to o
92、ur operations have been implemented,such as the National Emission Standard for Hazardous AirPollutants,the New Source Performance Standards,and the New Source Review.The Federal Clean Water Act(“CWA”)The CWA and its implementing regulations,as well as the corresponding state and municipal laws and r
93、egulations thatgovern the discharge of pollutants into the water,affect our business.In addition,water resources are becoming and in thefuture may become more scarce.The Coffeyville Fertilizer Facility has contracts in place to receive water during certain watershortage conditions,but these conditio
94、ns could change over time depending on the scarcity of water.Release ReportingThe release of hazardous substances or extremely hazardous substances into the environment is subject to release reportingrequirements under federal and state environmental laws.Our Facilities periodically experience relea
95、ses of hazardous andextremely 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 reportingrequirements under the Comprehensive Environmental R
96、esponse,Compensation and Liability Act(“CERCLA”)and theEmergency Planning and Community Right-to-Know Act.If we fail to timely or properly report a release,or if a releaseviolates the law or our permits,we could become the subject of a governmental enforcement action or third-party claims.Government
97、 enforcement or third-party claims relating to releases of hazardous or extremely hazardous substances could resultin significant expenditures and liability.Greenhouse Gas Emissions(“GHG”)The EPA regulates GHG emissions under the Clean Air Act.In October 2009,the EPA finalized a rule requiring certa
98、inlarge emitters of GHGs to inventory and report their GHG emissions to the EPA.In accordance with the rule,our facilitiesmonitor and report our GHG emissions to the EPA.In May 2010,the EPA finalized the“Greenhouse Gas Tailoring Rule,”which established GHG emissions thresholds that determine when st
99、ationary sources,such as the nitrogen fertilizer plants,mustobtain permits under Prevention of Significant Deterioration(“PSD”)and Title V programs of the CAA.Under the rule,facilities already subject to the PSD and Title V programs that increase their emissions of GHGs by a significant amount arere
100、quired to undergo PSD review and to evaluate and implement air pollution control technology,known as“best availablecontrol technology,”to reduce GHG emissions.Environmental RemediationAs is the case with all companies engaged in similar industries,we face potential exposure from future claims and la
101、wsuitsinvolving environmental matters,including soil and water contamination and personal injury or property damage allegedlycaused by hazardous substances that we manufactured,handled,used,stored,transported,spilled,disposed of,or released.There is no assurance that we will not become involved in f
102、uture proceedings related to the release of hazardous or extremelyhazardous substances for which we have potential liability or that,if we were held responsible for damages in any existing orfuture proceedings,such costs would be covered by insurance or would not be material.Environmental InsuranceW
103、e are covered by CVR Energys site pollution legal liability insurance policy,which includes business interruptioncoverage.The policy insures any location owned,leased,rented,or operated by the Partnership,including our Facilities.Thepolicy insures certain pollution conditions at,or migrating from,a
104、covered location,certain waste transportation and disposalactivities,and business interruption.Table of ContentsDecember 31,2019|8In addition to the site pollution legal liability insurance policy,we benefit from umbrella and excess casualty insurancepolicies maintained by CVR Energy.This insurance
105、provides coverage due to named perils for claims involving pollutantswhere the discharge is sudden and accidental and first commences at a specific day and time during the policy period.The site pollution legal liability policy and the pollution coverage provided in the casualty insurance policies a
106、re subject toretentions and deductibles and contain discovery requirements,reporting requirements,exclusions,definitions,conditions,andlimitations that could apply to a particular pollution claim,and there can be no assurance such claim will be adequately insuredfor all potential damages.Health,Safe
107、ty,and Security MattersWe are subject to a number of federal and state laws and regulations related to safety,including the Occupational Safetyand Health Act(“OSHA”),and comparable state statutes,the purposes of which are to protect the health and safety of workers.We also are subject to OSHA Proces
108、s Safety Management regulations,which are designed to prevent or minimize theconsequences of catastrophic releases of toxic,reactive,flammable,or explosive chemicals.We operate a comprehensive safety,health,and security program,with participation by employees,consultants,andadvisors at all levels of
109、 the organization.We have developed comprehensive safety programs aimed at preventing OSHArecordable incidents.Despite our efforts to achieve excellence in our safety and health performance,there can be no assurancesthat there will not be accidents resulting in injuries or even fatalities.We routine
110、ly audit our programs and seek to continuallyimprove our management systems.EmployeesAs of December 31,2019,the Partnership had approximately 286 employees across both of its facilities and its marketingand logistics operations,including approximately 90 employees covered by collective bargaining ag
111、reements that expire inOctober 2023.We also rely on the services of employees of CVR Energy and its subsidiaries pursuant to a services agreementbetween us,CVR Energy,and our general partner.Available InformationOur website address is www.CVRP.Our annual reports on Form 10-K,quarterly reports on For
112、m 10-Q,currentreports on Form 8-K,and all amendments to those reports filed or furnished pursuant to Section 13(a)or 15(d)of the SecuritiesExchange Act of 1934,as amended,are available free of charge through our website under“Investor Relations,”as soon asreasonably practicable after the electronic
113、filing or furnishing of these reports is made with the Securities and ExchangeCommission(the“SEC”)at www.sec.gov.In addition,our Corporate Governance Guidelines,Codes of Ethics and BusinessConduct,and the Charter of the Audit Committee and the Compensation Committee of the Board of Directors of our
114、generalpartner are available on our website.These guidelines,policies,and charters are also available in print without charge to anyunitholder requesting them.We do not intend for information contained in our website to be part of this Report.Table of ContentsDecember 31,2019|9Item 1A.Risk FactorsTh
115、e following risks should be considered together with the other information contained in this Report and all of theinformation set forth in our filings with the SEC.If any of the following risks or uncertainties develops into actual events,ourbusiness,financial condition or results of operations coul
116、d be materially adversely affected.References to CVR Partners,thePartnership,“we”,“us”,and“our”may refer to consolidated subsidiaries of CVR Partners or one or both of the facilities,asthe context may require.Risks Related to Our BusinessOur business is,and nitrogen fertilizer prices are,cyclical an
117、d highly volatile,which could have a material adverse effecton our results of operations,financial condition and cash flows.Our business is exposed to fluctuations in nitrogen fertilizer demand in the agricultural industry.These fluctuationshistorically have had and could in the future have signific
118、ant effects on prices across all nitrogen fertilizer products and,in turn,our results of operations,financial condition and cash flows.Nitrogen fertilizer products are commodities,the price of which can be highly volatile.The prices of nitrogen fertilizerproducts depend on a number of factors,includ
119、ing general economic conditions,cyclical trends in end-user markets,supply anddemand imbalances,governmental policies and weather conditions,which have a greater relevance because of the seasonalnature of fertilizer application.If seasonal demand exceeds the projections on which we base our producti
120、on levels,customersmay acquire nitrogen fertilizer products from competitors,and our profitability may be negatively impacted.If seasonal demandis less than expected,we may be left with excess inventory that will have to be stored or liquidated.Demand for nitrogen fertilizer products is dependent on
121、 demand for crop nutrients by the global agricultural industry.Theinternational market for nitrogen fertilizers is influenced by such factors as the relative value of the U.S.dollar and its impactupon the cost of importing nitrogen fertilizers,foreign agricultural policies,the existence of,or change
122、s in,import or foreigncurrency exchange barriers in certain foreign markets,changes in the hard currency demands of certain countries and otherregulatory policies of foreign governments,as well as the laws and policies of the United States affecting foreign trade andinvestment.Nitrogen-based fertili
123、zers remain solidly in demand,driven by a growing world population,changes in dietaryhabits and an expanded use of corn for the production of ethanol.Supply is affected by available capacity and operating rates,raw material costs,government policies and global trade.A decrease in nitrogen fertilizer
124、 prices would have a material adverseeffect on our business,cash flow and ability to make distributions.Nitrogen fertilizer products are global commodities,and our business faces intense competition from other nitrogenfertilizer producers,which may have more resources and scale.Our business is subje
125、ct to intense price competition from both U.S.and foreign sources.Fertilizers are global commodities,with little or no product differentiation,and customers make their purchasing decisions principally on the basis of deliveredprice and availability of the product.Increased global supply or decreases
126、 in transportation costs for foreign sources of fertilizermay put downward pressure on fertilizer prices.Furthermore,in recent years the price of nitrogen fertilizer in the United Stateshas been substantially driven by pricing in the global fertilizer market.We compete with a number of U.S.producers
127、 andproducers in other countries,including state-owned and government-subsidized entities.Some competitors have greater totalresources and are less dependent on earnings from fertilizer sales,which make them less vulnerable to industry downturns andbetter positioned to pursue new expansion and devel
128、opment opportunities.Additionally,our competitors utilizing differentcorporate structures may be better able to withstand lower cash flows than we can as a limited partnership.Our competitiveposition could suffer to the extent we are unable to expand resources either through investments in new or ex
129、isting operations orthrough acquisitions,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 resultsof operations,financial cond
130、ition and cash flows.Our business is geographically concentrated and is therefore subject to regional economic downturns and seasonalvariations,which may affect our production levels,transportation costs and inventory and working capital levels.Our sales to agricultural customers are concentrated in
131、 the Great Plains and Midwest states,and nitrogen fertilizer demandis seasonal.Our quarterly results may vary significantly from one year to the next due largely to weather-related shifts inTable of ContentsDecember 31,2019|10planting schedules and purchase patterns.Farmers tend to apply nitrogen fe
132、rtilizer during two short application periods,one inthe spring and the other in the fall.In contrast,we,along with other nitrogen fertilizer producers,generally produce productsthroughout the year.As a result,we and our customers generally build inventories during the low demand periods of the year
133、toensure timely product availability during peak sales seasons.Variations in the proportion of product sold through prepaid salescontracts and the terms of such contracts can increase the seasonal volatility of our cash flows and cause changes in the patternsof seasonal volatility from year-to-year.
134、Additionally,the accumulation of inventory to be available for seasonal sales createssignificant seasonal working capital and storage capacity requirements.The degree of seasonality can change significantly fromyear-to-year due to conditions in the agricultural industry and other factors.As a conseq
135、uence of this seasonality,distributionsof 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 materialadverse impact on our results of operations,financial condition and c
136、ash flows.We have a significant concentration of customers.Our two largest customers represented approximately 28%of net salesfor the year ended December 31,2019.Given the nature of our business,and consistent with industry practice,we do not havelong-term minimum purchase contracts with our custome
137、rs.The loss of several of these significant customers,or a significantreduction in purchase volume by several of them,could have a material adverse effect on our results of operations,financialcondition and cash flows.Any decline in U.S.agricultural production or limitations on the use of nitrogen f
138、ertilizer for agricultural purposes couldhave a material adverse effect on the sales of nitrogen fertilizer,and on our results of operations,financial condition andcash flows.Conditions in the U.S.agricultural industry significantly impact our operating results.The U.S.agricultural industry can beaf
139、fected by a number of factors,including weather patterns and field conditions,current and projected grain inventories andprices,domestic and international population changes,demand for U.S.agricultural products and U.S.and foreign policiesregarding trade in agricultural products.For example,a major
140、factor underlying the solid level of demand for nitrogen-basedfertilizer products we produce is the use of corn for the production of ethanol in the U.S.Changes in governmental incentivesfor ethanol production could affect future ethanol demand and production.State and federal governmental policies,
141、including farm and biofuel subsidies and commodity support programs,as well asthe prices of fertilizer products,may also directly or indirectly influence the number of acres planted,the mix of crops plantedand the use of fertilizers for particular agricultural applications.Developments in crop techn
142、ology could also reduce the use ofchemical fertilizers and adversely affect the demand for nitrogen fertilizer.In addition,from time to time various statelegislatures have considered limitations on the use and application of chemical fertilizers due to concerns about the impact ofthese products on t
143、he environment.Unfavorable state and federal governmental policies could negatively affect nitrogenfertilizer prices and therefore have a material adverse effect on our results of operations,financial condition and cash flows.Ethanol production in the United States is highly dependent upon a myriad
144、of federal statutes and regulations,and is madesignificantly more competitive by various federal and state incentives and mandated usage of renewable fuels pursuant to theEPAs Renewable Fuel Standard(“RFS”).To date,the RFS has been satisfied primarily with corn-based fuel ethanol blendedinto gasolin
145、e.However,a number of factors,including the continuing“food versus fuel”debate and studies showing thatexpanded ethanol usage may increase the level of greenhouse gases in the environment,cause harmful conversion ofuncultivated land for biofuel crop production,and be unsuitable for small engine use,
146、have resulted in calls to reduce subsidiesfor ethanol,allow increased ethanol imports and to repeal or waive(in whole or in part)the current RFS.Changes within theRFS program also could affect future ethanol demand and production.Further,while most ethanol is currently produced fromcorn and other ra
147、w grains,such as milo or sorghum,the RFS requires that a portion of the overall RFS renewable fuel mandatecome from advanced biofuels,including cellulose-based biomass,such as agricultural waste,forest residue,and municipal solidwaste.In addition,there is a continuing trend to encourage the use of p
148、roducts other than corn and raw grains for ethanolproduction.The repeal of,or reduction in the benefits to ethanol producers under,ethanol incentive programs,an increase inethanol imports,a substantial decrease in future renewable volume obligations under the RFS program,or a significant increasein
149、the use of products other than corn and raw grains for ethanol production could affect the demand for corn-based ethanol andresult in a decrease in planted corn acreage and in the demand for nitrogen fertilizer products and have a material adverse effecton our results of operations,financial conditi
150、on and cash flows.Table of ContentsDecember 31,2019|11The acquisition and expansion strategy of our business involves significant risks.From time to time,we may consider pursuing acquisitions and expansion projects to continue to grow and increaseprofitability.However,we may not be able to consummat
151、e such acquisitions or expansions,due to intense competition forsuitable acquisition targets,the potential unavailability of financial resources necessary to consummate acquisitions andexpansions,difficulties in identifying suitable acquisition targets and expansion projects or in completing any tra
152、nsactionsidentified on sufficiently favorable terms,and the failure to obtain requisite regulatory or other governmental approvals.Inaddition,any future acquisitions and expansions may entail significant transaction costs and risks associated with entry into newmarkets and lines of business,includin
153、g but not limited to,new regulatory obligations and risks.Even when acquisitions are completed,integration of acquired entities can involve significant difficulties,such as:Unforeseen difficulties in the integration of the acquired operations and disruption of the ongoing operations of ourbusiness;F
154、ailure to achieve cost savings or other financial or operating objectives contributing to the accretive nature of anacquisition;Strain on the operational and managerial controls and procedures and the need to modify systems or to addmanagement resources;Difficulties in the integration and retention
155、of customers or personnel and the integration and effective deployment ofoperations or technologies;Assumption of unknown material liabilities or regulatory non-compliance issues;Amortization of acquired assets,which would reduce future reported earnings;Possible adverse short-term effects on our ca
156、sh flows or operating results;andDiversion of managements attention from the ongoing operations of our business.In addition,in connection with any potential acquisition or expansion project,we will need to consider whether a businesswe intend to acquire or expansion project we intend to pursue could
157、 affect our tax treatment as a partnership for federal incometax purposes.If we are otherwise unable to conclude that the activities of the business being acquired or the expansion projectwould not affect our treatment as a partnership for federal income tax purposes,we may elect to seek a ruling fr
158、om the InternalRevenue Service(“IRS”).Seeking such a ruling could be costly or,in the case of competitive acquisitions,place the business ina competitive disadvantage compared to other potential acquirers who do not seek such a ruling.If we are unable to concludethat an activity would not affect our
159、 treatment as a partnership for federal income tax purposes and are unable or unwilling toobtain an IRS ruling,we may choose to acquire such business or develop such expansion project in a corporate subsidiary,which would subject the income related to such activity to entity-level taxation,which wou
160、ld reduce the amount of cashavailable for distribution to its common unitholders and could likely cause a substantial reduction in the value of its commonunits.Failure to manage these acquisition and expansion growth risks could have a material adverse effect on our results ofoperations,financial co
161、ndition and cash flows.Our joint ventures involve similar risks.There can be no assurance that we willbe able to consummate any acquisitions or expansions,successfully integrate acquired entities,or generate positive cash flow atany acquired company or expansion project.We are subject to cybersecuri
162、ty risks and other cyber incidents resulting in disruption to our business.We depend on internal and third-party information technology systems to manage and support our operations.In addition,we collect,process,and retain sensitive and confidential customer information in the normal course of busin
163、ess.Despite thesecurity measures we have in place and any additional measures we may implement in the future,our facilities and thesesystems could be vulnerable to security breaches,computer viruses,lost or misplaced data,programming errors,human errors,acts of vandalism,or other events.Any disrupti
164、on of these 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 b
165、usiness,or otherwise affect ourresults of operations.In addition,new laws and regulations governing data privacy and the unauthorized disclosure ofconfidential information pose increasingly complex compliance challenges and potentially elevate our costs.Any failure tocomply with these laws and regul
166、ations,including as a result of a security or privacy breach,could result in significant penaltiesand liabilities for us.Table of ContentsDecember 31,2019|12Risks Related to Our Plant OperationsOur Coffeyville Facility may be adversely affected by the supply and price levels of pet coke.Failure by C
167、VR EnergysCoffeyville refinery to continue to supply us with pet coke and the availability of third-party pet coke at higher prices couldnegatively impact our results of operations.Unlike our competitors,whose primary costs are related to the purchase of natural gas and whose costs are therefore lar
168、gelyvariable,our Coffeyville Facility uses a pet coke gasification process to produce nitrogen fertilizer.Our profitability is directlyaffected by the price and availability of pet coke obtained from CVR Energys Coffeyville refinery pursuant to a long-termagreement.Our Coffeyville Facility has obtai
169、ned the majority of its pet coke from CVR Energys Coffeyville refinery over thepast five years,although this percentage has decreased to 40%in 2019.However,should CVR Energys Coffeyville refineryfail to perform in accordance with the existing agreement or to the extent pet coke from CVR Energys Coff
170、eyville refinery isinsufficient,we would need to purchase pet coke from third parties on the open market,which could negatively impact ourresults of operations to the extent third-party pet coke is unavailable or available only at higher prices.Currently,we purchase100%of the pet coke CVR Energys Co
171、ffeyville refinery produces.However,we are still required to procure additional petcoke from third parties to maintain our production rates.We are currently party to pet coke supply agreements with multiplethird-party refineries to provide a significant amount of pet coke at fixed prices.The terms o
172、f these agreements currently end inDecember 2020.The market for natural gas has been volatile,and fluctuations in natural gas prices could affect our competitive position.Low natural gas prices benefit our competitors that rely on natural gas as their primary feedstock and disproportionatelyimpact o
173、ur operations at our Coffeyville Fertilizer Facility by making us less competitive with natural gas-based nitrogenfertilizer manufacturers.Continued low natural gas prices could result in nitrogen fertilizer pricing drops and impair the abilityof the Coffeyville Facility to compete with other nitrog
174、en fertilizer producers who use natural gas as their primary feedstock,which,therefore,would have a material adverse impact on our results of operations,financial condition and ability to makecash distributions.The East Dubuque Facility uses natural gas as its primary feedstock,and as such,the profi
175、tability of operating the EastDubuque Facility is significantly dependent on the cost of natural gas.An increase in natural gas prices could make it lesscompetitive with producers who do not use natural gas as their primary feedstock.In addition,an increase in natural gas pricesin the United States
176、relative to prices of natural gas paid by foreign nitrogen fertilizer producers may negatively affect ourcompetitive 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
177、natural gas for use in the East Dubuque Facility on the spot market.As a result,weremain susceptible to fluctuations in the price of natural gas in general and in local markets in particular.We may use fixedsupply,fixed price forward purchase contracts to lock in pricing for a portion of its natural
178、 gas requirements,but we may not beable to enter into such agreements on acceptable terms or at all.Without forward purchase contracts for the supply of naturalgas,we would need to purchase natural gas on the spot market,which would impair its ability to hedge exposure to risk fromfluctuations in na
179、tural gas prices.If we enter into forward purchase contracts for natural gas,and natural gas prices decrease,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 coul
180、d have a material adverse effect on ourresults of operations and financial condition.Our East Dubuque Facility depends on the availability of natural gas.We have an agreement with Nicor Gas(“Nicor”)pursuant to which we access natural gas from the ANR Pipeline Company and Northern Natural Gas pipelin
181、es.Our access tosatisfactory supplies of natural gas through Nicor could be disrupted due to a number of causes,including volume limitationsunder the agreement,pipeline malfunctions,service interruptions,mechanical failures or other reasons.The agreement currentlyextends through February 29,2020.Upo
182、n expiration of the agreement,we may be unable to extend the service under the termsof the existing agreement or renew the agreement on satisfactory terms,or at all.Any disruption in the supply of natural gas toour East Dubuque Facility could restrict our ability to continue to make products at the
183、facility.In the event we need to obtainnatural gas from another source,we may need to build a new connection from that source to the East Dubuque Facility andnegotiate related easement rights,which would be costly,disruptive and/or may be unfeasible.As a result,any interruption inthe supply of natur
184、al gas through Nicor could have a material adverse effect on our results of operations and financial condition.Table of ContentsDecember 31,2019|13If licensed technology were no longer available,our business may be adversely affected.We have licensed,and may in the future license,a combination of pa
185、tent,trade secret,and other intellectual property rightsof third parties for use in our plant operations.If any 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 rea
186、sonableor acceptable.In addition,any substitution of new technology for currently-licensed technology may require substantialchanges to manufacturing processes or equipment and may have a material adverse effect on our results of operations,financialcondition and cash flows.Additionally,we may face
187、claims of infringement that could interfere with our ability to use technology that is material toour plant operations.Any litigation of this type could result in substantial costs and diversions of resources,either of whichcould have a material adverse effect on our results of operations,financial
188、condition and cash flows.In the event a claim ofinfringement against us is successful,we may be required to pay royalties or license fees for past or continued use of theinfringing technology,or we may be prohibited from using the infringing technology altogether.If we are prohibited from usingany t
189、echnology as a result of such a claim,we may not be able to obtain licenses to alternative technology adequate to substitutefor the technology we can no longer use,or licenses for such alternative technology may only be available on terms that are notcommercially reasonable or acceptable.In addition
190、,any substitution of new technology for currently-licensed technology mayrequire us to make substantial changes to our manufacturing processes or equipment or to our products,and could have amaterial adverse effect on our results of operations,financial condition and cash flows.Compliance with and c
191、hanges in environmental laws and regulations,including those related to climate change,couldrequire us to make substantial capital expenditures and adversely affect our performance.Our operations are subject to extensive federal,state and local environmental laws and regulations relating to the prot
192、ectionof the environment,including those governing the emission or discharge of pollutants into the environment,product use andspecifications and the generation,treatment,storage,transportation,disposal and remediation of solid and hazardous wastes.Violations of applicable environmental laws and reg
193、ulations,or of the conditions of permits issued thereunder,can result insubstantial penalties,injunctive orders compelling installation of additional controls,civil and criminal sanctions,operatingrestrictions,injunctive relief,permit revocations and/or facility shutdowns,which may have a material a
194、dverse effect on ourability to operate our facilities and accordingly our financial performance.Capital expenditures and operating costs for currentand future environmental compliance may be substantial and could have a material adverse effect on our results of operations,financial condition and pro
195、fitability.In addition,new environmental laws and regulations,new interpretations of existing laws and regulations,increasedgovernmental enforcement of laws and regulations or other developments could require us to make additional unforeseenexpenditures.These laws and regulations are generally expec
196、ted to impose increasingly stringent and costly requirements overtime.Various legislative and regulatory measures to address climate change and GHG emissions(including carbon dioxide,methane and nitrous oxides)are in various phases of discussion or implementation and could affect our operations.They
197、include proposed and enacted federal regulation and state actions to develop statewide,regional or nationwide programsdesigned to control and reduce GHG emissions from fixed sources,such as our plants.Many states and regions haveimplemented,or are in the process of implementing,measures to reduce em
198、issions of GHGs,but other than Kansas,we do notcurrently operate in states that have their own GHG reduction programs.Although it is not possible to predict the requirements of any GHG legislation that may be enacted,any laws or regulationsthat have been or may be adopted to restrict or reduce GHG e
199、missions will likely require us to incur increased operating andcapital costs and/or increased taxes on GHG emissions,and result in reduced demand for our fertilizer products.If we areunable to maintain sales of our products at a price that reflects such increased costs,there could be a material adv
200、erse effect onour business,financial condition and results of operations.Further,any increase in the prices of our products resulting fromsuch increased costs could have a material adverse effect on our operations,financial condition and cash flows.In addition,climate change legislation and regulati
201、ons may result in increased costs not only for our business but also usersof our fertilizer products,thereby potentially decreasing demand for our products.Further,changes in environmental laws andregulations or their interpretation relating to the end-use and application of fertilizers could cause
202、changes in demand for ourproducts or limit our ability to market and sell products to end users.From time to time,various state legislatures have proposedbans or other limitations on fertilizer products.Decreased demand for our products may have a material adverse effect on ourresults of operations,
203、financial condition and cash flows.Table of ContentsDecember 31,2019|14Our operations are dependent on third-party suppliers,which could have a material adverse effect on our results ofoperations,financial condition and cash flows.Operations of our Coffeyville Facility depend in large part on the pe
204、rformance of third-party suppliers,and the operationsof the Coffeyville Facility could be adversely affected if the operation of the third-party air separation plant located adjacent toit were disrupted.Additionally,this air separation plant has experienced numerous short-term interruptions in the p
205、ast,causinginterruptions in our gasifier operations.With respect to electricity,we are party to an electric services agreement with a third-party supplier through June 30,2029.Our East Dubuque Facility operations also depend in large part on the performance of third-party suppliers,including forthe
206、purchase of electricity.We entered into a utility service agreement,which terminates on June 1,2022 and will continueyear-to-year thereafter unless either party provides 12-month advance written notice of termination.Should any of our other third-party suppliers fail to perform in accordance with ex
207、isting contractual arrangements,orshould we otherwise lose the service of any third-party suppliers,our operations(or a portion thereof)could be forced to halt.Alternative sources of supply could be difficult to obtain.Any shutdown of our operations(or a portion thereof),even for alimited period,cou
208、ld have a material adverse effect on our results of operations,financial condition and ability to make cashdistributions.We rely on third-party providers of transportation services and equipment,which subjects us to risks and uncertaintiesbeyond our control that may have a material adverse effect on
209、 our results of operations,financial condition and ability tomake distributions.Our business relies on railroad and trucking companies to ship finished products to customers of the Coffeyville Facility.We also lease railcars from railcar owners to ship its finished products.Additionally,although cus
210、tomers of the East DubuqueFacility generally pick up products at the facility,the facility occasionally relies on barge,truck and railroad companies to shipproducts to customers.These transportation operations,equipment and services are subject to various hazards,includingextreme weather conditions,
211、work stoppages,delays,spills,derailments and other accidents,and other operating hazards.Further,the limited number of towing companies and barges available for ammonia transport may also impact the availabilityof transportation for our products.These transportation operations,equipment and services
212、 are also subject to environmental,safety and other regulatory oversight.Due to concerns related to terrorism or accidents,local,state and federal governmentscould implement new regulations affecting the transportation of our finished products.In addition,new regulations could beimplemented affectin
213、g the equipment used to ship our finished products.Any delay in our ability to ship our finished products as a result of these transportation companies failure to operateproperly,the implementation of new and more stringent regulatory requirements affecting transportation operations orequipment,or s
214、ignificant increases in the cost of these services or equipment could have a material adverse effect on our resultsof 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 prod
215、uctswe produce or transport that cause severe damage to property or injury to the environment and human health could have amaterial adverse effect on our results of operations,financial condition and ability to make cash distributions.In addition,the costs of transporting ammonia could increase sign
216、ificantly in the future.Our business manufactures,processes,stores,handles,distributes and transports ammonia,which can be very volatile andextremely hazardous.Major accidents or releases involving ammonia could cause severe damage or injury to property,theenvironment and human health,as well as a p
217、ossible disruption of supplies and markets.Such an event could result in civillawsuits,fines,penalties and regulatory enforcement proceedings,all of which could lead to significant liabilities.Any damageor injury to persons,equipment,or property or other disruption of our ability to produce or distr
218、ibute products could result in asignificant decrease in operating revenues and significant additional costs to replace or repair and insure our assets,which couldhave a material adverse effect on our results of operations,financial condition and ability to make cash distributions.Ourfacilities perio
219、dically experience minor releases of ammonia related to leaks from our facilities equipment.Similar events mayoccur in the future.In addition,we may incur significant losses or costs relating to the operation of railcars used for the purpose of carryingvarious products,including ammonia.Due to the d
220、angerous and potentially hazardous nature of the cargo,in particularTable of ContentsDecember 31,2019|15ammonia,a railcar accident may result in fires,explosions,and releases of material which could lead to sudden,severe damageor injury to property,the environment,and human health.In the event of co
221、ntamination,under environmental law,we may beheld responsible even if we are not at fault,and we complied with the laws and regulations in effect at the time of the accident.Litigation arising from accidents involving ammonia and other products we produce or transport may result in us being namedas
222、a defendant in lawsuits asserting claims for substantial damages,which could have a material adverse effect on our results ofoperations,financial condition and ability to make cash distributions.We could incur significant costs in cleaning up contamination at our fertilizer plants and off-site locat
223、ions.Our businesses handle hazardous substances which may result in spills,discharges or other releases of hazardoussubstances into the environment.Past or future spills related to any of our current or former operations,including fertilizerplants,or transportation of products or hazardous substance
224、s from those facilities,may give rise to liability(including strictliability,or liability without 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 l
225、iable under CERCLA,and similar state statutes,for past or future spills without regard to fault or whether our actions were in compliance with the lawat the time of the spills.Pursuant to CERCLA and similar state statutes,we could be held liable for contamination associatedwith facilities we current
226、ly own or operate(whether such contamination occurred prior to or during our ownership),facilitieswe formerly owned or operated,and facilities to which we transported or arranged for the transportation of wastes orbyproducts containing hazardous substances for treatment,storage,or disposal.If signif
227、icant unknown contamination isidentified at or migrating from any of our facilities,the associated liability could have a material adverse effect on our results ofoperations,financial condition and cash flows and may not be covered by insurance.The potential penalties and cleanup costs for past or f
228、uture releases or spills,liability to third parties for damage to theirproperty or exposure to hazardous substances,or the need to address newly discovered information or conditions that mayrequire response actions could be significant and could have a material adverse effect on our results of opera
229、tions,financialcondition and cash flows.In addition,we may incur liability for alleged personal injury or property damage due to exposure tochemicals or other hazardous substances located at or released from our facilities.We may also face liability for personal injury,property damage,natural resour
230、ce damage,or cleanup costs for the alleged migration of contamination or other hazardoussubstances from our facilities to adjacent and other nearby properties.We have assumed the previous owners responsibilities under certain administrative orders under the ResourceConservation and Recovery Act(“RCR
231、A”)related to contamination that migrated from CVR Energys Coffeyville refineryonto the nitrogen fertilizer plant property while the previous owner owned and operated the properties.We continue to workwith the applicable governmental authorities to implement remediation of these sites on a timely ba
232、sis.We may incur future liability relating to the off-site disposal of hazardous waste from our facilities.Companies that disposeof,or arrange for the treatment,transportation or disposal of,hazardous substances at off-site locations may be held jointly andseverally liable for the costs of investiga
233、tion and remediation of contamination at those off-site locations,regardless of fault.We could become involved in litigation or other proceedings involving off-site waste disposal and the damages or costs in anysuch proceedings could be material.We may be unable to obtain or renew permits or approva
234、ls necessary for our operations,which could inhibit our ability todo business.Our business holds numerous environmental and other governmental permits and approvals authorizing operations at ourfacilities.Future expansion of our operations is predicated upon securing the necessary environmental or o
235、ther permits orapprovals.A decision by a government agency to deny or delay issuing a new or renewed material permit or approval,or torevoke or substantially modify an existing permit or approval,could have a material adverse effect on our ability to continueoperations and on our financial condition
236、,results of operations and cash flows.New regulations concerning the transportation,storage and handling of hazardous chemicals,risks of terrorism,and thesecurity of chemical manufacturing facilities could result in higher operating and/or capital costs.The costs of complying with future regulations
237、 relating to the transportation,storage,and handling of hazardous chemicalsand security associated with our facilities may have a material adverse effect on our results of operations,financial conditionand cash flows.Targets such as chemical manufacturing facilities may be at greater risk of future
238、terrorist attacks than otherTable of ContentsDecember 31,2019|16targets in the United States.As a result,the chemical industry has initiatives relating to the security of chemical industryfacilities and the transportation of hazardous chemicals in the United States.Future terrorist attacks could lea
239、d to even stronger,more costly initiatives that could result in a material adverse effect on our results of operations,financial condition and cashflows.Changes to regulations or requirements for the transportation,storage,and handling of hazardous chemicals could alsorequire additional capital inve
240、stments,which could have a material adverse effect on our financial condition.Our facilities face significant risks due to physical damage hazards,environmental liability risk exposure,and unplannedor emergency partial or total plant shutdowns resulting in business interruptions.We could incur poten
241、tially significantcosts to the extent there are unforeseen events which cause property damage and a material decline in production which arenot fully insured.The commercial insurance industry engaged in underwriting energy industry risk is specialized and thereis finite capacity;therefore,the indust
242、ry may limit or curtail coverage,may modify the coverage provided,or maysubstantially increase premiums in the future.If any of our plants,logistics assets,or key suppliers sustains a catastrophic loss and operations are shutdown orsignificantly impaired,it would have a material adverse impact on ou
243、r operations,financial condition and cash flows.Inaddition,the risk exposures we have at the Coffeyville,Kansas plant complex are greater due to production facilities for CVREnergys refinery and our fertilizer production,distribution,and storage being in relatively close proximity and potentiallyexp
244、osed to damage from one incident.Operations at our plant could be curtailed,limited or completely shut down for anextended period of time as the result of one or more unforeseen events and circumstances,which may not be within our control,including:major unplanned maintenance requirements;catastroph
245、ic 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 or labor difficulties that result in a work stoppage or slowdown;cessation or suspension of
246、 a plant or specific operations dictated by environmental authorities;acts of terrorism or other deliberate malicious acts;andan event or incident involving a large clean-up,decontamination,or the imposition of laws and ordinances regulatingthe cost and schedule of demolition or reconstruction,which
247、 can cause significant delays in restoring property to itspre-event condition.We have sustained losses over the past ten-year period at our facilities,which are illustrative of the types of risks andhazards that exist.These losses or events resulted in costs assumed by us that were not fully insured
248、 due to policy retention orapplicable exclusions.We are insured under casualty,environmental,property and business interruption insurance policies.Theproperty and business interruption policies insure real and personal property,including property located at our plants.There ispotential for a common
249、occurrence to impact both our Coffeyville Facility and CVR Energys Coffeyville refinery in whichcase the insurance limits and applicable sub-limits would apply to all damages combined.These policies are subject to limits,sub-limits,retention(financial and time-based),and deductibles.The application
250、of these and other policy conditions couldmaterially 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 risk,and there arerisks associated with the com
251、mercial insurance industry reducing capacity,changing the scope of insurance coverage offered,and substantially increasing premiums,deductibles,or retainers,and/or waiting periods,resulting from highly adverse lossexperience or other financial circumstances.Factors that impact insurance cost and ava
252、ilability include,but are not limited to:losses in our industry and other industries,such as chemical and petroleum refining,natural disasters,specific losses incurredby us,and low or inadequate investment returns earned by the insurance industry.If the supply of commercial insurance iscurtailed due
253、 to highly adverse financial results,we may not be able to continue our present limits of insurance coverage orobtain 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
254、 safety,and failure to comply with these lawsand regulations could have a material adverse effect on our results of operations,financial condition and profitability.Table of ContentsDecember 31,2019|17We are subject to the requirements of OSHA and comparable state statutes that regulate the protecti
255、on of the health andsafety of workers,the proper design,operation,and maintenance of our equipment,and require us to provide information abouthazardous materials used in our operations.Failure to comply with these requirements may result in significant fines orcompliance costs,which could have a mat
256、erial adverse effect on our results of operations,financial condition and cash flows.A 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 31,2019,approx
257、imately 31%of our employees were represented by labor unions under collectivebargaining agreements.We may not be able to renegotiate our collective bargaining agreements when they expire onsatisfactory terms or at all.A failure to do so may increase our costs.In addition,our existing labor agreement
258、s may not preventa strike or work stoppage at any of our facilities in the future,and any work stoppage could negatively affect our results ofoperations,financial condition and cash flows.Risks Related to Our Capital StructureInternally generated cash flows and other sources of liquidity may not be
259、adequate for the capital needs of our business.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 bas
260、is.If we cannot generate adequate cash flow or otherwise secure sufficient liquidity to meet our working capitalneeds or support our short-term and long-term capital requirements,we may be unable to meet our debt obligations,pursue ourbusiness strategies,or comply with certain environmental standard
261、s,which would have a material adverse effect on ourbusiness and results of operations.Instability and volatility in the capital,credit,and commodity markets in the global economy could negatively impact ourbusiness,financial condition,results of operations and cash flows.Our business,financial condi
262、tion and results of operations could be negatively impacted by difficult conditions andvolatility in the capital,credit,and commodities markets and in the global economy.For example:Although we believe we have sufficient liquidity under our AB credit facility to run the business,there can be noassur
263、ance that such funds would be available or sufficient,and in such a case,we may not be able to successfullyobtain 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 toraise additional capital a
264、nd thereby limit our ability to grow,which could in turn cause our unit price to drop.Market conditions could result in significant customers experiencing financial difficulties.We are exposed to the creditrisk of our customers,and their failure to meet their financial obligations when due because o
265、f bankruptcy,lack ofliquidity,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 our ability to operate our business,andmay have a material adverse effect on our financial condition
266、 and results of operations.We have incurred significant indebtedness,and we may be able to incur significant additional indebtedness in the future.Ifnew indebtedness is added to our current indebtedness,the risks described below could increase.Our level of indebtednesscould have important consequenc
267、es,such as:limiting our ability to obtain additional financing to fund our working capital needs,capital expenditures,debt servicerequirements,acquisitions,or other purposes;requiring us to utilize a significant portion of our cash flows to service our indebtedness,thereby reducing availablecash and
268、 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 substantialportion of additional funds to service debt;limiting our ability to compete with other companies who are not as highly leveraged
269、,as we may be less capable ofresponding 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 ContentsDecember 31,2019|18restricting us from making strategic acquisitions or investments,introducing
270、 new technologies,or exploiting businessopportunities;restricting the way in which we conduct business because of financial and operating covenants in the agreementsgoverning our and our respective subsidiaries existing and future indebtedness,including,in the case of certainindebtedness of subsidia
271、ries,certain covenants that restrict the ability of subsidiaries to pay dividends or make otherdistributions;limiting our ability to enter into certain transactions with our affiliates;limiting our ability to designate our subsidiaries as unrestricted subsidiaries;exposing us to potential events of
272、default(if not cured or waived)under financial and operating covenants contained inour or our respective subsidiaries debt instruments that could have a material adverse effect on our business,financialcondition and operating results;increasing our vulnerability to a downturn in general economic con
273、ditions or in pricing of products;andlimiting our ability to react to changing market conditions in our respective industries and in respective customersindustries.Further,we are and will be subject to covenants contained in agreements governing present and future indebtedness.Thesecovenants include
274、,and will likely include,restrictions on certain payments(including restrictions on distributions to ourunitholders),the granting of liens,the incurrence of additional indebtedness,asset sales,transactions with affiliates,andmergers and consolidations.Any failure to comply with these covenants could
275、 result in a default under our current creditagreements 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 tosatisfy our debt obligations that may not be successful.Our ability to s
276、atisfy debt obligations will depend upon,among other things:our future financial and operating performance,which will be affected by prevailing economic conditions andfinancial,business,regulatory,and other factors,many of which are beyond our control;andour future ability to obtain other financing.
277、We cannot offer any assurance that our business will generate sufficient cash flow from operations or that we will be ableto draw funds under our AB credit facility or otherwise,or from other sources of financing,in an amount sufficient to fund ourrespective liquidity needs.If cash flows and capital
278、 resources are insufficient to service our indebtedness,we could facesubstantial liquidity problems and may be forced to reduce or delay capital expenditures,sell assets,seek additional capital,restructure or refinance indebtedness,or seek bankruptcy protection.These alternative measures may not be
279、successful and maynot permit us to meet scheduled debt service and other obligations.Our ability to restructure or refinance debt will depend onthe condition of the capital markets and our financial condition at such time.Any refinancing of debt could be at higher interestrates and may require us to
280、 comply with more onerous covenants,which could further restrict business operations,and theterms of existing or future debt agreements may restrict us from adopting some of these alternatives.Further,our AB credit facility bears interest at variable rates and other debt we incur could likewise be v
281、ariable-rate debt.If market interest rates increase,variable-rate debt will create higher debt service requirements,which could adversely affectour ability to fund our liquidity needs,capital investments,and distributions to our unitholders.We may enter into agreementslimiting our exposure to higher
282、 interest rates,but any such agreements may not offer complete 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
283、C.Icahn indirectly controls approximately 71%of the voting power of CVR Energys common stock and,byvirtue of such ownership,is able to control or exert substantial influence over the Partnership through CVR Energys ownershipof our general partner and its sole member,including:the election and appoin
284、tment of directors;business strategy and policies;mergers or other business combinations;Table of ContentsDecember 31,2019|19acquisition or disposition of assets;future issuances of common stock,common units,or other securities;incurrence of debt or obtaining other sources of financing;andthe paymen
285、t of distributions on our common units.The existence of a controlling stockholder may have the effect of making it difficult for,or may discourage or delay,athird-party from seeking to acquire a majority of our common units,which may adversely affect the market price of suchcommon units.Further,Mr.I
286、cahns interests may not always be consistent with the Partnerships interests or with the interests of ourcommon unitholders.Mr.Icahn and entities controlled by him may also pursue acquisitions or business opportunities inindustries in which we compete,and there is no requirement that any additional
287、business opportunities be presented to us.Wealso have and may in the future enter into transactions to purchase goods or services with affiliates of Mr.Icahn.To the extentthat conflicts of interest may arise between us and Mr.Icahn and his affiliates,those conflicts may be resolved in a manneradvers
288、e to us and our common unitholders.Risks Related to Our Limited Partnership StructureWe have a policy to distribute an amount equal to the“available cash”we generate each quarter,which could limit ourability to grow and make acquisitions.However,we may not have sufficient available cash to pay any q
289、uarterly distributionon common units or the board of directors of our general partner 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 cashgenerated by our business each q
290、uarter to our common unitholders.As a result of its cash distribution policy,we will likelyneed to rely primarily upon external financing sources,including commercial bank borrowings and the issuance of debt andequity securities,to fund acquisitions and expansion capital expenditures.We may not have
291、 sufficient available cash eachquarter to enable the payment of distributions to common unitholders.Furthermore,the partnership agreement does not requireus to pay distributions on a quarterly basis or otherwise.As such,the board of directors of our general partner may modify orrevoke its cash distr
292、ibution policy at any time at its discretion,including in such a manner that would result in an elimination ofcash distributions regardless of the amount of available cash our business generates.In addition,because of its distribution policy,our growth,if any,may not be as robust as that of business
293、es that reinvesttheir available cash to expand ongoing operations.To the extent we issue additional units in connection with any acquisitions orexpansion capital expenditures or as in-kind distributions,current unitholders would experience dilution and the payment ofdistributions on those additional
294、 units may decrease the amount we distribute in respect of its outstanding units.Under ourpartnership agreement,we are authorized to issue an unlimited number of additional interests without a vote of the commonunitholders.The issuance by us of additional common units or other equity interests of eq
295、ual or senior rank would reduce theproportionate ownership interest of common unitholders immediately prior to the issuance.As a result of the issuance ofcommon units,the following may occur:the amount of cash distributions on each common unit may decrease;the ratio of our taxable income to distribu
296、tions may increase;the relative voting strength of each previously outstanding common unit will be diminished;andthe market price of the common units may decline.In addition,our partnership agreement does not prohibit the issuance by our subsidiaries of equity interests,which mayeffectively rank sen
297、ior to the common units.The incurrence of additional commercial borrowings or other debt to finance itsgrowth strategy would result in increased interest expense,which,in turn,would reduce the available cash we have to distributeto unitholders.Our partnership agreement has limited our general partne
298、rs liability,replaces default fiduciary duties,and restricts theremedies available to common unitholders for actions that,without these limitations and reductions,might otherwiseconstitute breaches of fiduciary duty.Table of ContentsDecember 31,2019|20Our partnership agreement limits the liability a
299、nd replaces the fiduciary duties of our general partner,while also restrictingthe remedies available to our common unitholders for actions that,without these limitations and reductions,might constitutebreaches of fiduciary duty.Delaware partnership law permits such contractual reductions of fiduciar
300、y duty.The partnershipagreement contains provisions that replace the standards to which our general partner would otherwise be held by statefiduciary duty law.For example:The partnership agreement permits our general partner to make a number of decisions in its individual capacity,asopposed to its c
301、apacity as general partner.This entitles our general partner to consider only the interests and factorsthat it desires and means that it has no duty or obligation to give any consideration to any interest of,or factorsaffecting,any limited partner.The partnership agreement provides that our general
302、partner will not have any liability to unitholders for decisionsmade in its capacity as general partner so long as it acted in good faith,meaning it believed the decision was in ourbest interest.The partnership agreement provides that our general partner and the officers and directors of its general
303、 partner willnot be liable for monetary damages to common unitholders,including us,for any acts or omissions unless there hasbeen a final and non-appealable judgment entered by a court of competent jurisdiction determining that the generalpartner or its officers or directors acted in bad faith or en
304、gaged in fraud or willful misconduct,or in the case of acriminal matter,acted with knowledge that the conduct was criminal.The partnership agreement generally provides that affiliated transactions and resolutions of conflicts of interest notapproved by the conflicts committee of the board of directo
305、rs of its general partner and not involving a vote ofunitholders must be on terms no less favorable to us than those generally being provided to or available from unrelatedthird parties or be“fair and reasonable”to us,as determined by its general partner in good faith,and that,indetermining whether
306、a transaction or resolution is“fair and reasonable,”the general partner may consider the totalityof the relationships between the parties involved,including other transactions that may be particularly advantageous orbeneficial to affiliated parties,including us.The partnership agreement provides tha
307、t in resolving conflicts of interest,it will be presumed that in making itsdecision,the general partner or its conflicts committee acted in good faith,and in any proceeding brought by or onbehalf of any holder of common units,the person bringing or prosecuting such proceeding will have the burden of
308、overcoming such presumption.By purchasing a common unit,a common unitholder agrees to be bound by the provisions set forth in the partnershipagreement,including the provisions described above.Our general partner,an indirect wholly-owned subsidiary of CVR Energy,has fiduciary duties to CVR Energy and
309、 itsstockholders,and the interests of CVR Energy and its stockholders may differ significantly from,or conflict with,theinterests of our public common unitholders.Our general partner is responsible for managing us.Although our general partner has fiduciary duties to manage us in amanner that is in o
310、ur best interests,the fiduciary duties are specifically limited by the express terms of our partnershipagreement,and the directors and officers of our general partner also have fiduciary duties to manage our general partner in amanner beneficial to CVR Energy and its stockholders.The interests of CV
311、R Energy and its stockholders may differ from,orconflict with,the interests of our public common unitholders.In resolving these conflicts,our general partner may favor its owninterests,the interests of CRLLC,its sole member,or the interests of CVR Energy and holders of CVR Energys commonstock,includ
312、ing its majority stockholder,an affiliate of Icahn Enterprises L.P.,over our interests and those of our commonunitholders.The potential conflicts of interest include,among others,the following:Neither our partnership agreement nor any other agreement requires the owners of our general partner,includ
313、ing CVREnergy,to pursue a business strategy that favors us.The affiliates of our general partner,including CVR Energy,havefiduciary duties to make decisions in their own best interests and in the best interest of holders of CVR Energyscommon stock,which may be contrary to our interests.In addition,o
314、ur general partner is allowed to take into accountthe interests of parties other than us or our common unitholders,such as its owners or CVR Energy,in resolvingconflicts of interest,which has the effect of limiting its fiduciary duty to our common unitholders.Our general partner has limited its liab
315、ility and reduced its fiduciary duties under our partnership agreement and hasalso restricted the remedies available to our common unitholders for actions that,without the limitations,mightTable of ContentsDecember 31,2019|21constitute breaches of fiduciary duty.As a result of purchasing common unit
316、s,common unitholders consent to someactions and conflicts of interest that might otherwise constitute a breach of fiduciary or other duties under applicablestate law.The board of directors of our general partner determines the amount and timing of asset purchases and sales,capitalexpenditures,borrow
317、ings,repayment of indebtedness,and issuances of additional partnership interests,each of whichcan affect the amount of cash that is available for distribution to our common unitholders.Our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any
318、services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf.There is no limitation on the amounts our general partner can cause us to pay it or its affiliates.Our general partner controls the enforcement of obligations owed to us by it and it
319、s affiliates.In addition,our generalpartner decides whether to retain separate counsel or others to perform services for us.Our general partner determines which costs incurred by it and its affiliates are reimbursable by us.Certain of the executive officers of our general partner also serve as execu
320、tive officers of CVR Energy,and ourexecutive chairman is the chief executive officer of CVR Energy.The executive officers who work for both CVREnergy and our general partner,including our chief financial officer,chief accounting officer,and general counsel,divide their time between our business and
321、the business of CVR Energy.These executive officers will face conflicts ofinterest from time to time in making decisions which may benefit either us or CVR Energy.Additionally,thecompensation of such executive officers is set by CVR Energy,and we have no control over the amount paid to suchofficers.
322、CVR Energy has the power to elect all of the members of the board of directors of our general partner.Our general partnerhas control over all decisions related to our operations.Our public common unitholders do not have an ability to influence anyoperating decisions and will not be able to prevent u
323、s from entering into any transactions.Furthermore,the goals and objectivesof CVR Energy,as the indirect owner of our general partner,may not be consistent with those of our public commonunitholders.Certain subsidiaries of CVR Energy perform certain corporate services for us,including finance,account
324、ing,legal,information technology,auditing,and cash management activities,and we could be impacted by any failure of those entities toadequately perform these services.If at any time our general partner and its affiliates own more than 80%of the common units,our general partner will havethe right,whi
325、ch it may assign to any of its affiliates or to us,but not the obligation,to acquire all,but not less than all,of thecommon units held by public common unitholders at a price not less than their then-current market price,as calculated pursuantto the terms of our partnership agreement.As a result,eac
326、h holder of our common units may be required to sell such holderscommon units at an undesirable time or price and may not receive any return on investment.A common unitholder may alsoincur a tax liability upon a sale of its common units.Our general partner is not obligated to obtain a fairness opini
327、on regardingthe value of the common units to be repurchased by it upon exercise of the call right.There is no restriction in our partnershipagreement that prevents our general partner from issuing additional common units and then exercising its call right.Our generalpartner may use its own discretio
328、n,free of fiduciary duty restrictions,in determining whether to exercise this right.Our general partner may transfer its general partner interest in us to a third-party in a merger or in a sale of all orsubstantially all of its assets without the consent of our common unitholders.Furthermore,there i
329、s no restriction in ourpartnership agreement on the ability of CVR Energy to transfer its equity interest in our general partner to a third-party.Thenew equity owner of our general partner would then be in a position to replace the board of directors and the officers of ourgeneral partner with its o
330、wn choices and to influence the decisions taken by the board of directors and officers of our generalpartner.If control of our general partner were transferred to an unrelated third-party,the new owner of the general partnerwould have no interest in CVR Energy.We rely on the senior management team o
331、f CVR Energy and are party to a servicesagreement pursuant to which CVR Energy provides us with the services of its senior management team.If our general partnerwere no longer controlled by CVR Energy,CVR Energy could be more likely to terminate the services agreement,which it maydo upon 180 days no
332、tice.As a publicly traded partnership we qualify for certain exemptions from many of the NYSEs corporate governancerequirements.As a publicly traded partnership,we qualify for certain exemptions from the NYSEs corporate governance requirements,which include the requirements that(i)a majority of the
333、board of directors of our general partner consist of independentTable of ContentsDecember 31,2019|22directors and(ii)the requirement that the board of directors of our general partner have a nominating/corporate governancecommittee and compensation committee that are composed entirely of independent directors.Our general partners board of directors has not and does not currently intend to establis
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