Financial Performance - Net sales for the year ended December 31, 2019, increased to $404,177,000, up 15.1% from $351,082,000 in 2018[272] - Operating income improved significantly to $27,380,000 in 2019, compared to $6,314,000 in 2018, marking a 334.5% increase[272] - The net loss for 2019 was $34,969,000, a reduction from a net loss of $50,027,000 in 2018, representing a 30.5% improvement[272] - Cash flows from operating activities increased to $39,157,000 in 2019, up from $32,234,000 in 2018, indicating a 21.5% growth[280] - For the year ended December 31, 2019, the Partnership reported net sales of $404.2 million, an increase of 15.1% from $351.1 million in 2018[343] - Ammonia sales increased to $94.5 million in 2019 from $66.3 million in 2018, representing a growth of 42.5%[343] - UAN sales rose to $251.2 million in 2019, up 13.0% from $222.3 million in 2018[343] - The Partnership reported a net loss of $24.882 million in the fourth quarter of 2019, with a basic and diluted loss per common unit of $0.22[410] - Operating income for the second quarter of 2019 was $34.544 million, while the Partnership experienced an operating loss of $9.086 million in the fourth quarter[410] Assets and Liabilities - As of December 31, 2019, total assets decreased to $1,137,955,000 from $1,254,388,000 in 2018, representing a decline of approximately 9.3%[270] - Current assets fell to $130,594,000 in 2019, down from $193,981,000 in 2018, a decrease of about 32.6%[270] - Total liabilities increased slightly to $718,411,000 in 2019 from $754,562,000 in 2018, indicating a marginal rise of approximately 1.5%[270] - Partners' capital decreased to $419,544,000 in 2019, down from $499,826,000 in 2018, reflecting a decline of about 16%[270] - Cash and cash equivalents dropped to $36,994,000 in 2019 from $61,776,000 in 2018, a decrease of approximately 40%[270] - Accounts receivable decreased to $34,264,000 in 2019, down from $61,662,000 in 2018, representing a decline of about 44.7%[270] - Total Property, Plant, and Equipment, net decreased from $1,015,240,000 in 2018 to $951,959,000 in 2019, a decline of approximately 6.3%[299] - Long-term debt remained relatively stable at $632,406,000 in 2019 compared to $628,989,000 in 2018, showing a slight increase of about 0.7%[270] - The Partnership's total current liabilities increased from $122,635,000 to $126,097,000 due to the initial recognition of lease liabilities following the adoption of Topic 842[319] - Long-term debt as of December 31, 2019, was $632.4 million, slightly up from $629.0 million in 2018[334] - The estimated fair value of total long-term debt outstanding was approximately $673.8 million as of December 31, 2019[340] Revenue and Expenses - The company reported a significant reduction in deferred revenue, which fell to $27,841,000 in 2019 from $68,804,000 in 2018, a decrease of approximately 59.6%[270] - Total inventories decreased to $53,930,000 in 2019 from $63,554,000 in 2018, reflecting a 15.2% decline[297] - Cash and cash equivalents at the end of 2019 were $36,994,000, down from $61,776,000 at the end of 2018, representing a 40.4% decrease[280] - Capital expenditures for 2019 were $18,656,000, slightly down from $19,806,000 in 2018, indicating a 5.8% decrease[280] - The total cost of materials and other for 2019 was $113.103 million, with the highest cost recorded in the second quarter at $26.000 million[410] - The Partnership's natural gas expense totaled approximately $33.1 million for the year ended December 31, 2019, down from $42.4 million in 2018[365] Market and Operational Risks - The company is exposed to significant market risk due to potential changes in prices for fertilizer products and natural gas, which are critical for production[255] - The management believes that market prices of nitrogen products are affected by changes in grain prices and demand, as well as natural gas prices[256] Distributions and Compensation - The company declared distributions of $0.40 per common unit in 2019, compared to $0.02 in 2017, showing a significant increase[272] - Total distributions paid to CVR Partners' unitholders for 2019 amounted to $45.313 million, with a distribution per common unit of $0.40[405] - In 2019, the Partnership did not declare any distributions for the fourth quarter, while the total distributions for the previous quarters were $29.745 million to public unitholders and $15.567 million to CVR Energy[405] - Total compensation expense related to the Long-Term Incentive Plan (LTIP) was approximately $2.3 million for the year ended December 31, 2019, up from $1.9 million in 2018[357] Agreements and Contracts - The Partnership's share-based compensation is classified as liability-classified and is measured at fair value, affecting compensation expense based on unit price fluctuations[313] - The Partnership's cash settled non-vested phantom unit awards liability was $1.2 million as of December 31, 2019, compared to $0.5 million in 2018[358] - The Partnership had an outstanding liability of $0.4 million related to the 2017 Performance Unit Award Agreement as of December 31, 2019[362] - The Partnership's expenses associated with the Amended and Restated On-Site Product Supply Agreement totaled approximately $4.2 million for the year ended December 31, 2019[367] - The Coffeyville Facility operates under a Feedstock Agreement with CRRM, which has an initial term of 20 years ending in 2031, automatically extending for successive five-year periods[377] - The Coke Supply Agreement requires CRRM to deliver a minimum of 500,000 tons of pet coke annually, with the facility purchasing 61% of its pet coke needs from this agreement over the last five years[379] - The Hydrogen Purchase and Sale Agreement commits CRRM to deliver 90,000 mscf of hydrogen per month, with pricing based on fixed and variable fees[383] - The Corporate MSA, also effective February 19, 2020, consolidates the Services Agreement and GP Services Agreement, providing for monthly fees for services supplied[400] Environmental and Compliance Matters - The Partnership recognized no liabilities for environmental remediation matters as of December 31, 2019, indicating no identified probable or estimable matters[308] - The partnership's environmental agreement with CRRM includes indemnification rights related to environmental contamination, with no liabilities recorded as of December 31, 2019[386]

Financial Data and Key Metrics Changes - For the full year 2019, the company reported net sales of $404 million, a net loss of $35 million, and EBITDA of $107 million, compared to a net loss of $50 million and EBITDA of $84 million for 2018, indicating a 27% increase in EBITDA year-over-year [7][14] - In Q4 2019, net sales were $86 million with a net loss of $25 million and EBITDA of $11 million, down from net sales of $98 million and EBITDA of $33 million in Q4 2018 [7][15] - Direct operating expenses for Q4 2019 increased to $46 million from $38 million in the prior year, primarily due to turnaround expenses and higher personnel costs [16] Business Line Data and Key Metrics Changes - Combined operations produced approximately 180,000 gross tons of ammonia, 286,000 tons of UAN, and 55,000 tons of ammonia available for sale in Q4 2019, compared to 209,000 gross tons of ammonia and 357,000 tons of UAN in Q4 2018 [10] - UAN sales volumes decreased by 20% in Q4 2019, with an average netback price of $176 per ton, a 2% decrease from Q4 2018 [11][15] Market Data and Key Metrics Changes - The extreme wet conditions in spring 2019 led to a late planting season and delayed grain harvest, negatively impacting nitrogen application and pricing in Q4 2019 [12][23] - The UAN market experienced changes in trade flows due to EU tariffs on imports from certain countries, affecting pricing and availability [24] Company Strategy and Development Direction - The company is focused on improving plant reliability and debottlenecking to increase production with low capital investment over the next five years [22] - A re-expansion project at the Coffeyville plant has been approved, expected to enhance reliability and UAN production [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2020, anticipating an increase in planted corn acreage and strong in-season purchases of nitrogen fertilizer [12][26] - The company expects to navigate near-term market volatility while benefiting from lower natural gas costs, which positively impact production costs [25] Other Important Information - As of December 31, the company had approximately $62 million in liquidity, with $37 million in cash and $50 million available under the ABL facility [18] - The company generated EBITDA of $11 million for Q4 2019 but had total cash needs of $15 million for debt service, resulting in no cash available for distribution [19] Q&A Session Summary Question: Market conditions and UAN values - The market saw a sharp fall in UAN values, with producers trying to clear inventory and manage sales for the first quarter [32][34] - The NOLA price for UAN is not a liquid market point and may not reflect inland pricing accurately [34] Question: Urea debottlenecking and capital expenditure - The company is not ready to disclose incremental production figures but expects capital expenditures to be within the normal range for 2020 [37]

Financial Data and Key Metrics Changes - For Q3 2019, the company reported net sales of $89 million, a net income of $23 million, and adjusted EBITDA of $18 million, compared to net sales of $80 million and operating income of $3 million in Q3 2018 [6][12] - The net loss for Q3 2019 was $23 million or $0.20 per common unit, compared to a net loss of $13 million or $0.12 per common unit in the prior year [12] - Direct operating expenses increased to $48 million from $35 million in the prior year period, primarily due to turnaround expenses [13] Business Line Data and Key Metrics Changes - Combined operations produced approximately 196,000 gross tons of ammonia, 318,000 tons of UAN, and 56,000 net tons of ammonia available for sale, compared to 212,000 gross tons of ammonia, 338,000 tons of UAN, and 63,000 net tons of ammonia available for sale in the prior year [8] - UAN sales increased by 10% year-over-year, with an average price of $182 per ton, while ammonia pricing increased by 13% to an average of $337 per ton [9][10] Market Data and Key Metrics Changes - The company experienced strong utilization rates at both facilities, with the Coffeyville ammonia plant operating at 98% utilization, up from 94% in Q3 2018, and East Dubuque ammonia plant also at 98% utilization [7] - The company anticipates a favorable spring 2020 planting season compared to 2019, influenced by lower natural gas prices and higher fertilizer prices [10][23] Company Strategy and Development Direction - The company aims to maximize free cash flow by safely operating plants at high utilization rates, managing costs prudently, and selectively investing in reliability projects [25] - Future turnaround projects will focus on improving reliability and increasing production capacity with low capital investment [21] Management's Comments on Operating Environment and Future Outlook - Management noted that the existing corn and soybean inventory levels are lower than expected, which has led to rising crop prices [23] - The company expects to maintain ammonia utilization rates between 95% and 100% in Q4 2019, with direct operating expenses projected at $40 million to $45 million [18] Other Important Information - The Board of Directors declared a third-quarter distribution of $0.07 per common unit, payable on November 12 [6] - The company released $18 million of cash reserved in prior quarters for maintenance turnaround and other operating needs [16] Q&A Session Summary Question: Can you provide more details on the sales cadence through the second half of the year? - Management indicated that July sales were light due to limited activity, and pricing was reflective of fill levels rather than carryover from previous sales [31][32] Question: What is the company's approach to refinancing bonds? - Management stated they are evaluating refinancing opportunities but decided against it due to insufficient payback periods and uncertainty around market rates [34] Question: How are inventories for UAN and ammonia managed? - Management noted that inventory levels were generally comfortable, with some geographic variations, and that early ammonia applications were being observed due to favorable weather conditions [35][36][42]

For the transition period from to . Commission file number: 001-35120 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ______________________________________________ CVR PARTNERS, LP (Exact name of registrant as spec ...

[PART I. Financial Information](index=4&type=section&id=PART%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for periods ended June 30, 2019, covering balance sheets, operations, partners' capital, and cash flows Condensed Consolidated Balance Sheet Highlights (unaudited) | (in thousands) | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total current assets** | $153,966 | $193,981 | | **Total assets** | $1,190,405 | $1,254,388 | | **Total current liabilities** | $56,211 | $122,635 | | **Long-term debt** | $630,655 | $628,989 | | **Total partners' capital** | $491,192 | $499,826 | Condensed Consolidated Statements of Operations Highlights (unaudited) | (in thousands, except per unit data) | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $137,660 | $93,197 | $229,533 | $173,056 | | **Operating income (loss)** | $34,544 | $(790) | $43,983 | $(4,211) | | **Net income (loss)** | $18,968 | $(16,459) | $12,889 | $(35,510) | | **Basic and diluted earnings (loss) per unit** | $0.17 | $(0.15) | $0.11 | $(0.31) | Condensed Consolidated Statements of Cash Flows Highlights (unaudited) | (in thousands) | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $34,681 | $(12,470) | | **Net cash used in investing activities** | $(5,668) | $(8,451) | | **Net cash used in financing activities** | $(21,523) | — | | **Net increase (decrease) in cash and cash equivalents** | $7,490 | $(20,921) | - The Partnership adopted the new lease standard, Topic 842, on January 1, 2019, resulting in the recognition of Right-of-Use (ROU) assets of **$14.3 million** and corresponding lease liabilities on the balance sheet[30](index=30&type=chunk)[31](index=31&type=chunk) - In April 2019, CRNF settled a property tax dispute with Montgomery County, Kansas, expecting to recover **$7.9 million** through favorable property tax assessments from 2019 through 2028[60](index=60&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Partnership's financial performance, highlighting significant increases in net sales and operating income driven by favorable pricing and volumes [Strategy and Market Conditions](index=18&type=section&id=Strategy%20and%20Market%20Conditions) The Partnership aims to be a top-tier North American nitrogen fertilizer company, focusing on strategic objectives and strong long-term market fundamentals - The Partnership's strategic objectives are centered on achieving excellence in **Safety, Reliability, Market Capture, and Financial Discipline**[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - A long-term positive outlook for the U.S. nitrogen fertilizer industry is based on increasing global population, decreasing arable land per capita, and sustained demand for corn as ethanol feedstock[80](index=80&type=chunk) - Key achievements include maintaining high asset reliability, generating positive cash available for distribution despite weather delays, and declaring cash distributions of **$0.33 per unit** in 2019[76](index=76&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) The Partnership's financial performance significantly improved in Q2 and H1 2019, driven by higher net sales and operating income from favorable pricing and volumes Financial Highlights Comparison (Q2 2019 vs Q2 2018) | (in thousands) | Q2 2019 | Q2 2018 | | :--- | :--- | :--- | | **Net Sales** | $137,660 | $93,197 | | **Operating Income (Loss)** | $34,544 | $(790) | | **Net Income (Loss)** | $18,968 | $(16,459) | | **Adjusted EBITDA** | $59,760 | $25,979 | Financial Highlights Comparison (Six Months 2019 vs 2018) | (in thousands) | Six Months 2019 | Six Months 2018 | | :--- | :--- | :--- | | **Net Sales** | $229,533 | $173,056 | | **Operating Income (Loss)** | $43,983 | $(4,211) | | **Net Income (Loss)** | $12,889 | $(35,510) | | **Adjusted EBITDA** | $85,803 | $39,095 | - The increase in net sales for Q2 2019 was driven by favorable pricing (**$19.8 million**) and volume (**$24.7 million**) conditions, primarily due to a shift in demand from Q1 to Q2 because of inclement weather[102](index=102&type=chunk)[103](index=103&type=chunk) Production Volumes (in thousands of tons) | Product | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | **Ammonia (gross produced)** | 211 | 174 | 390 | 373 | | **UAN** | 316 | 241 | 651 | 580 | [Non-GAAP Reconciliations](index=20&type=section&id=Non-GAAP%20Reconciliations) This section reconciles non-GAAP financial measures like EBITDA, Adjusted EBITDA, and Available Cash for Distribution, used to evaluate performance Reconciliation of Net Income (Loss) to Adjusted EBITDA | (in thousands) | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | **Net income (loss)** | $18,968 | $(16,459) | $12,889 | $(35,510) | | **EBITDA** | $59,609 | $19,642 | $85,652 | $32,691 | | **Adjusted EBITDA** | $59,760 | $25,979 | $85,803 | $39,095 | Reconciliation of Adjusted EBITDA to Available Cash for Distribution | (in thousands) | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | | :--- | :--- | :--- | | **Adjusted EBITDA** | $59,760 | $25,979 | | **Less: Debt Service** | $(14,865) | $(14,870) | | **Less: Maintenance capital expenditures** | $(1,447) | $(4,098) | | **Less: Turnaround expenses** | $(151) | $(6,337) | | **Adjustments (Reserves)** | $(28,000) | $(674) | | **Available Cash for distribution** | $15,297 | $— | [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2019, the Partnership reported **$92.6 million** in liquidity, **$630.7 million** in debt, and projected 2019 capital expenditures of **$20-25 million** - As of June 30, 2019, total liquidity was **$92.6 million**, comprising **$69.3 million** in cash and cash equivalents and **$48.3 million** available under the AB Credit Facility (net of certain cash balances)[117](index=117&type=chunk) 2019 Capital Expenditure Outlook | (in thousands) | Estimated full year 2019 | | :--- | :--- | | **Maintenance capital** | $18,000 - $20,000 | | **Growth capital** | $2,000 - $5,000 | | **Total capital expenditures** | **$20,000 - $25,000** | - A major turnaround is planned for the East Dubuque facility in the second half of 2019, expected to take 28 days and cost **$7 million**[124](index=124&type=chunk) - For the second quarter of 2019, a distribution of **$0.14 per common unit** (**$15.9 million** total) was declared, payable in August 2019[127](index=127&type=chunk) [Cash Flows](index=30&type=section&id=Cash%20Flows) For H1 2019, net cash from operating activities significantly improved to **$34.7 million**, while investing and financing activities used **$5.7 million** and **$21.5 million** respectively Cash Flow Summary | (in thousands) | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | | **Operating activities** | $34,681 | $(12,470) | | **Investing activities** | $(5,668) | $(8,451) | | **Financing activities** | $(21,523) | — | - The **$47.2 million** positive change in operating cash flow was primarily due to a shift from a net loss of **$35.5 million** in 2018 to net income of **$12.9 million** in 2019[130](index=130&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to the Partnership's market risks were reported for the periods ended June 30, 2019, compared to the 2018 Form 10-K - There have been no material changes to the company's market risks as of June 30, 2019, compared to those disclosed in the 2018 Form 10-K[134](index=134&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2019, with no material changes to internal controls - The Partnership's management concluded that disclosure controls and procedures were effective as of June 30, 2019[135](index=135&type=chunk) - There were no material changes in the Partnership's internal control over financial reporting during the quarter ended June 30, 2019[136](index=136&type=chunk) [PART II. Other Information](index=31&type=section&id=PART%20II.%20Other%20Information) [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference legal proceedings information from Note 11 of the financial statements, detailing a property tax dispute settlement - Information regarding legal proceedings is incorporated by reference from Note 11 ("Commitments and Contingencies") of the financial statements[138](index=138&type=chunk) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the Partnership's risk factors were reported compared to those disclosed in the 2018 Form 10-K - There have been no material changes from the risk factors previously disclosed in the 2018 Form 10-K[139](index=139&type=chunk) [Other Information](index=31&type=section&id=Item%205.%20Other%20Information) No information is reported under this item - None[140](index=140&type=chunk) [Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and XBRL-formatted financial statements List of Exhibits | Exhibit | Exhibit Description | | :--- | :--- | | 31.1 - 31.4 | Rule 13a-14(a)/15d-14(a) Certifications of various officers | | 32.1 | Section 1350 Certification of various officers | | 101 | Financial information formatted in XBRL |

Financial Data and Key Metrics Changes - For Q2 2019, the company reported net sales of $138 million, net income of $19 million, and adjusted EBITDA of $60 million, compared to net sales of $93 million and a net loss of $16 million in Q2 2018 [5][11] - The operating income for Q2 2019 was $35 million, a significant improvement from an operating loss of less than $1 million in the prior year [11] - UAN sales volume increased by 26% year-over-year, with average pricing rising by 14% to $217 per ton, while ammonia pricing increased by 31% to $456 per ton [7][9][8] Business Line Data and Key Metrics Changes - Combined operations produced approximately 211,000 gross tons of ammonia and 316,000 tons of UAN in Q2 2019, compared to 174,000 gross tons of ammonia and 241,000 tons of UAN in the prior year [7] - The Coffeyville ammonia plant operated at 97% utilization, and the East Dubuque plant operated at 98% utilization, both higher than the previous year [6] Market Data and Key Metrics Changes - The company experienced strong demand for nitrogen due to poor fall application and a late start to spring planting, despite challenging weather conditions [9][18] - The USDA reported a confusing planting intentions report, estimating 92 million acres of corn and 82 million acres of soybeans planted, which the company believes may be overstated [20] Company Strategy and Development Direction - The company plans a 28-day turnaround at the East Dubuque facility starting in September, focusing on upgrades to improve reliability and production [22] - The partnership aims to maximize free cash flow by operating plants reliably, managing costs prudently, and optimizing marketing and logistics activities [23] Management's Comments on Operating Environment and Future Outlook - Management noted that the late planting season and severe flooding affected UAN rail shipments but still anticipated strong demand for nitrogen in the third quarter [18][21] - The company expects fertilizer demand to increase as customer inventories are low and anticipates a significant rise in planted acres for the spring 2020 planting season [21] Other Important Information - The company has approximately $69 million in cash and a total liquidity position of about $93 million at the end of the quarter, which is deemed sufficient for future needs [14] - The long-term gross debt remains unchanged at $631 million, primarily consisting of senior notes due in 2023 [15] Q&A Session Summary Question: Market outlook for July and Q3 volume expectations - Management indicated that there has been decent sales of in-season product in July, with expectations for healthy demand in Q3 due to low inventory levels [25][27] Question: Ammonia market commentary - Management noted differences in market conditions between the Northern and Southern Plains, with expectations for a strong ammonia run in the fall [28][29] Question: Debt refinancing opportunities - Management is evaluating market rates and will make decisions based on the Fed's actions and available rates [30] Question: CapEx reserves and distribution strategy - Management clarified that reserves were set aside for anticipated capital expenditures and turnaround costs, positioning the company well for the second half of the year [31][33] Question: Gas costs and pricing outlook - Management confirmed that gas prices in Q3 are expected to be lower than in Q2, with ongoing evaluations for potential forward purchases [35][36] Question: Sales cadence and inventory levels - Management expects normal sales patterns in the second half, with UAN movement remaining steady and ammonia activity picking up in Q4 [39][43] Question: Delivery conditions and river issues - Management stated that while the Mississippi River is back to normal, other rivers still face challenges, but this does not significantly affect their operations [44][45]

CVR Partners, LP Investor Presentation May 2019 Safe Harbor Statement and Non-GAAP Financial Measures Forward Looking Statements; Safe Harbor This presentation contains forward-looking statements ("FLS") based on management's current expectations and beliefs, as well as a number of assumptions concerning future events. The assumptions and estimates underlying FLS are inherently uncertain and are subject to a wide variety of significant business, economic, and competitive risks and uncertainties that could c ...

CVR Partners LP (NYSE:UAN) Q1 2019 Earnings Conference Call April 25, 2019 11:00 AM ET Company Participants Jay Finks – Vice President-Finance and Treasurer Mark Pytosh – Chief Executive Officer Tracy Jackson – Chief Financial Officer Conference Call Participants Adam Samuelson – Goldman Sachs Roger Spitz – Bank of America Charles Neivert – Cowen Operator Greetings, and welcome to the CVR Partners, LP First Quarter 2019 Conference Call. At this time, all participants are in a listen-only mode. A brief quest ...

[PART I. Financial Information](index=4&type=section&id=PART%20I.%20Financial%20Information) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements detail the company's financial position, operations, and cash flows for Q1 2019 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2019 | December 31, 2018 | Change | Change (%) | | :--------------------------------- | :------------- | :---------------- | :----- | :--------- | | Cash and cash equivalents | $96,606 | $61,776 | $34,830 | 56.38% | | Accounts receivable, net | $16,922 | $61,662 | $(44,740) | -72.56% | | Inventories | $72,479 | $63,554 | $8,925 | 14.04% | | Total current assets | $191,680 | $193,981 | $(2,301) | -1.19% | | Total assets | $1,246,990 | $1,254,388 | $(7,398) | -0.59% | | Total current liabilities | $124,338 | $122,635 | $1,703 | 1.39% | | Long-term debt, net | $629,812 | $628,989 | $823 | 0.13% | | Total liabilities and partners' capital | $1,246,990 | $1,254,388 | $(7,398) | -0.59% | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations Highlights (in thousands, except per common unit) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | Change | Change (%) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :----- | :--------- | | Net sales | $91,873 | $79,859 | $12,014 | 15.04% | | Cost of sales | $75,134 | $77,564 | $(2,430) | -3.13% | | Operating income (loss) | $9,439 | $(3,421) | $12,860 | 376.07% | | Net loss | $(6,079) | $(19,051) | $12,972 | -68.09% | | Net loss per common unit – basic and diluted | $(0.05) | $(0.17) | $0.12 | -70.59% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | Change | Change (%) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :----- | :--------- | | Net cash provided by operating activities | $51,924 | $14,486 | $37,438 | 258.45% | | Net cash used in investing activities | $(3,500) | $(2,548) | $(952) | 37.36% | | Net cash used in financing activities | $(13,594) | $0 | $(13,594) | -100.00% | | Net increase in cash and cash equivalents | $34,830 | $11,938 | $22,892 | 191.76% | | Cash and cash equivalents, end of period | $96,606 | $61,111 | $35,495 | 58.08% | [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [(1) Organization and Nature of Business](index=7&type=section&id=%281%29%20Organization%20and%20Nature%20of%20Business) - CVR Partners, LP is a Delaware limited partnership formed by CVR Energy, Inc to own and operate its nitrogen fertilizer business, producing ammonia and UAN at facilities in Coffeyville, Kansas, and East Dubuque, Illinois[14](index=14&type=chunk) - As of March 31, 2019, public security holders held approximately **66%** of the Partnership's outstanding limited partner interests, while Coffeyville Resources, LLC (a CVR Energy subsidiary) held approximately **34%** and **100%** of the general partner interest[15](index=15&type=chunk) [(2) Basis of Presentation](index=7&type=section&id=%282%29%20Basis%20of%20Presentation) - The condensed consolidated financial statements are prepared in accordance with GAAP and SEC rules, reflecting all necessary adjustments for fair presentation, and should be read with the 2018 Form 10-K[17](index=17&type=chunk)[18](index=18&type=chunk) - Management's preparation of financial statements involves estimates and assumptions, and **actual results may differ**[19](index=19&type=chunk) [(3) Recent Accounting Pronouncements](index=7&type=section&id=%283%29%20Recent%20Accounting%20Pronouncements) - The Partnership adopted ASU No 2016-02, 'Leases' (Topic 842), on January 1, 2019, requiring recognition of **ROU assets and lease liabilities** on the balance sheet for operating leases with terms greater than one year[20](index=20&type=chunk)[22](index=22&type=chunk) Effect of Topic 842 Adoption on Condensed Consolidated Balance Sheet as of January 1, 2019 (in thousands) | Financial Statement Line Item | December 31, 2018 (As Stated) | Effect of Adoption of Topic 842 - Leases | January 1, 2019 (As Adjusted) | | :-------------------------------- | :---------------------------- | :--------------------------------------- | :---------------------------- | | Prepaid expenses and other current assets | $6,989 | $(2,650) | $4,339 | | Other long-term assets | $4,198 | $16,923 | $21,121 | | Accrued expenses and other current liabilities | $24,066 | $3,462 | $27,528 | | Other long-term liabilities | $2,938 | $10,811 | $13,749 | - The Partnership is evaluating ASU 2018-13, Fair Value Measurement (Topic 820), effective January 1, 2020, but **does not expect a material impact** on disclosures[25](index=25&type=chunk) [(4) Inventories](index=9&type=section&id=%284%29%20Inventories) Inventories (in thousands) | Category | March 31, 2019 | December 31, 2018 | | :--------------- | :------------- | :---------------- | | Finished goods | $34,315 | $25,136 | | Raw materials | $317 | $439 | | Parts, supplies and other | $37,847 | $37,979 | | Total inventories | $72,479 | $63,554 | [(5) Property, Plant and Equipment](index=9&type=section&id=%285%29%20Property%2C%20Plant%20and%20Equipment) Property, Plant and Equipment, Net (in thousands) | Category | March 31, 2019 | December 31, 2018 | | :--------------------------------- | :------------- | :---------------- | | Machinery and equipment | $1,369,904 | $1,362,965 | | Automotive equipment | $16,773 | $16,860 | | Buildings and improvements | $16,707 | $17,116 | | Land and improvements | $13,751 | $13,250 | | Construction in progress | $9,812 | $15,802 | | Other | $2,074 | $1,990 | | Less: Accumulated depreciation | $431,918 | $412,743 | | Total property, plant and equipment, net | $997,103 | $1,015,240 | [(6) Leases](index=9&type=section&id=%286%29%20Leases) - The Partnership leases railcars and facilities, recognizing ROU assets and lease liabilities for leases over one year; **short-term lease expense was $0.7 million** for Q1 2019[28](index=28&type=chunk)[33](index=33&type=chunk) ROU Assets and Lease Liabilities (in thousands) as of March 31, 2019 | Category | ROU Asset, Net | Lease Liability | | :---------------- | :------------- | :-------------- | | Operating Leases: | | | | Railcars | $13,328 | $13,409 | | Real estate and other | $2,496 | $15 | | Financing Leases: | | | | Real estate and other | $111 | $155 | Lease Terms and Discount Rates | Metric | March 31, 2019 | January 1, 2019 (initial recognition) | | :-------------------------- | :------------- | :------------------------------------ | | Weighted-average remaining lease term (years): | | | | Operating Leases | 4.1 | 4.3 | | Finance Leases | 0.4 | 0.5 | | Weighted-average discount rate: | | | | Operating Leases | 5.1% | 5.1% | | Finance Leases | 11.0% | 8.0% | [(7) Accrued Expenses and Other Current Liabilities](index=11&type=section&id=%287%29%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued Expenses and Other Current Liabilities (in thousands) | Category | March 31, 2019 | December 31, 2018 | | :--------------------------------- | :------------- | :---------------- | | Share-based compensation | $1,172 | $2,667 | | Personnel accruals | $4,136 | $7,993 | | Accrued interest | $17,643 | $2,516 | | Other accrued expenses and liabilities | $13,472 | $10,890 | | Total accrued expenses and other current liabilities | $36,423 | $24,066 | - Accrued expenses include **$3.8 million owed to CVR Energy and affiliates** at March 31, 2019, up from $3.5 million at December 31, 2018[36](index=36&type=chunk) [(8) Debt](index=12&type=section&id=%288%29%20Debt) Long-term Debt (in thousands) | Debt Instrument | March 31, 2019 | December 31, 2018 | | :--------------------------------- | :------------- | :---------------- | | 9.25% senior secured notes, due 2023 | $645,000 | $645,000 | | 6.50% notes, due 2021 | $2,240 | $2,240 | | Unamortized discount and debt issuance costs | $(17,428) | $(18,251) | | Total long-term debt, net of current portion | $629,812 | $628,989 | - The estimated fair value of total long-term debt was approximately **$675.6 million** at March 31, 2019, up from $670.8 million at December 31, 2018[37](index=37&type=chunk) - The Partnership has a **$50 million Asset Based Credit Facility** with $50 million available capacity as of March 31, 2019, maturing September 30, 2021, and was in compliance with all debt covenants[38](index=38&type=chunk)[39](index=39&type=chunk) [(9) Partners' Capital](index=12&type=section&id=%289%29%20Partners%27%20Capital) Partners' Capital Activity (in thousands) | Metric | Common Units Amount | General Partner Interest | Total Partners' Capital | | :--------------------------------- | :------------------ | :----------------------- | :---------------------- | | Balance at December 31, 2018 | $499,825 | $1 | $499,826 | | Cash distributions to common unitholders - Affiliates | $(4,670) | — | $(4,670) | | Cash distributions to common unitholders - Non-affiliates | $(8,924) | — | $(8,924) | | Net loss | $(6,079) | — | $(6,079) | | Balance at March 31, 2019 | $480,152 | $1 | $480,153 | - A cash distribution of **$0.12 per common unit** ($13.6 million total) for Q4 2018 was paid on March 11, 2019[42](index=42&type=chunk) - A cash distribution of **$0.07 per common unit** ($8 million total) for Q1 2019 was declared on April 24, 2019, payable May 13, 2019[43](index=43&type=chunk) [(10) Revenue](index=13&type=section&id=%2810%29%20Revenue) Revenue Disaggregated by Product (in thousands) | Product | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Ammonia | $13,352 | $11,597 | | UAN | $64,064 | $52,763 | | Urea products | $4,671 | $4,911 | | Fertilizer sales, exclusive of freight and other | $82,087 | $69,271 | | Freight revenue | $8,018 | $8,739 | | Other revenue | $1,768 | $1,849 | | Total net sales | $91,873 | $79,859 | - Revenue is recognized when the customer obtains control of the product, typically upon delivery and acceptance; freight revenue is a pass-through cost reimbursed by customers[44](index=44&type=chunk) - As of March 31, 2019, the Partnership had **$9.6 million in remaining performance obligations** for contracts over one year, with 39% expected to be recognized by end of 2019 and an additional 30% by 2020[49](index=49&type=chunk) [(11) Share-Based Compensation](index=14&type=section&id=%2811%29%20Share-Based%20Compensation) Share-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--------------- | :-------------------------------- | :-------------------------------- | | Phantom Units | $790 | $406 | | Other Awards | $318 | $(126) | | Total Share-Based Compensation Expense | $1,108 | $280 | [(12) Commitments and Contingencies](index=14&type=section&id=%2812%29%20Commitments%20and%20Contingencies) - **No material changes** in commitments and contingencies during Q1 2019, with liabilities accrued for probable and estimable losses from lawsuits, administrative proceedings, and governmental investigations[54](index=54&type=chunk) - In April 2019, CRNF and Montgomery County, Kansas, settled a property tax dispute, leading to an expected recovery of **$7.9 million** for CRNF through favorable property tax assessments from 2019 to 2028[55](index=55&type=chunk) [(13) Supplemental Cash Flow Information](index=15&type=section&id=%2813%29%20Supplemental%20Cash%20Flow%20Information) Supplemental Cash Flow Information (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Cash paid for interest | $53 | $138 | | Construction in process additions included in accounts payable | $1,252 | $2,203 | | Change in accounts payable related to construction in process additions | $(668) | $1,314 | [(14) Related Party Transactions](index=15&type=section&id=%2814%29%20Related%20Party%20Transactions) Related Party Sales and Expenses (in thousands) | Category | Related Party | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--------------------------------- | :------------ | :-------------------------------- | :-------------------------------- | | Net Sales | CRRM | $2 | $35 | | Cost of materials and other: | | | | | Coke Supply Agreement | CRRM | $1,321 | $359 | | Hydrogen Purchase and Sale Agreement | CRRM | $1,541 | $1,310 | | Direct operating expenses: | | | | | Services Agreement | CVR Energy | $940 | $616 | | Limited Partnership Agreement | CVR GP | $174 | $663 | | Selling, general and administrative expenses: | | | | | Services Agreement | CVR Energy | $4,038 | $2,863 | | Limited Partnership Agreement | CVR GP | $915 | $1,330 | Amounts Due to Related Parties (in thousands) | Category | Related Party | March 31, 2019 | December 31, 2018 | | :--------------------------------- | :------------ | :------------- | :---------------- | | Accounts payable: | | | | | Feedstock and Shared Services Agreement | CRRM | $1,102 | $1,280 | | Hydrogen Purchase and Sale Agreement and other | CRRM | $1,335 | $324 | | Limited Partnership Agreement | CVR GP | $1,260 | $1,372 | | Accrued expenses and other current liabilities: | | | | | Limited Partnership Agreement | CVR GP | $940 | $1,179 | | Services Agreement | CVR Energy | $2,818 | $2,352 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition, operational results, and market factors for Q1 2019 [Partnership Overview](index=17&type=section&id=Partnership%20Overview) - CVR Partners, LP, formed in 2011 by CVR Energy, Inc, produces and distributes nitrogen fertilizer products, primarily ammonia and UAN, from two manufacturing facilities in Coffeyville, Kansas, and East Dubuque, Illinois[62](index=62&type=chunk) [Strategy and Goals](index=17&type=section&id=Strategy%20and%20Goals) - The Partnership's mission is to be a top-tier North American nitrogen-based fertilizer company, driven by core values including Safety, Environment, Integrity, Corporate Citizenship, and Continuous Improvement[63](index=63&type=chunk) - Strategic objectives include continuous improvement in environmental, health, and safety; achieving industry-leading utilization rates; maximizing market capture through improved pricing and reduced costs; and maintaining financial discipline with low operating costs and disciplined capital deployment[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - Achievements in Q1 2019 include maintaining high asset reliability, generating positive cash available for distribution despite weather delays, and declaring a **cash distribution of 7 cents per unit**[67](index=67&type=chunk) [Industry Factors and Market Conditions](index=18&type=section&id=Industry%20Factors%20and%20Market%20Conditions) - Nitrogen fertilizer earnings and cash flows are primarily influenced by product prices, utilization rates, and operating costs, which are affected by global supply/demand, world grain production, population changes, transportation costs, weather, imports, and government policies[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - Despite short-term volatility, **long-term fundamentals for the U.S. nitrogen fertilizer industry remain strong**, supported by increasing global population, decreasing arable land, evolving diets, sustained corn use for ethanol, and the Partnership's position at the lower end of the global cost curve[71](index=71&type=chunk)[72](index=72&type=chunk) [Non-GAAP Measures](index=19&type=section&id=Non-GAAP%20Measures) - Management uses non-GAAP measures like **EBITDA, Adjusted EBITDA, and Available Cash for Distribution** to evaluate performance and profitability, supplementing GAAP financial information[73](index=73&type=chunk) - EBITDA is Net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization; **Adjusted EBITDA further excludes turnaround expense**[74](index=74&type=chunk) - Available Cash for Distribution is Adjusted EBITDA reduced by cash reserves for debt service, maintenance capital, turnaround expenses, and other operating/capital needs, with potential increases from released reserves or excess cash[75](index=75&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) [Key Operating Data](index=20&type=section&id=Key%20Operating%20Data) - Ammonia utilization rates are presented on a **two-year rolling average** to account for planned and unplanned outages, providing a long-term view of plant performance and a comparative baseline against industry peers[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) Production Volumes (in thousands of tons) | Product | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Ammonia (gross produced) | 179 | 199 | | Ammonia (net available for sale) | 41 | 59 | | UAN | 335 | 339 | Feedstock Usage and Cost | Feedstock | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Petroleum coke used (thousand tons) | 132 | 118 | | Petroleum coke (dollars per ton) | $38 | $18 | | Natural gas used (thousands of MMBtu) | 1,440 | 1,850 | | Natural gas (dollars per MMBtu) | $3.83 | $3.24 | [Financial Highlights (2019 1st Quarter Versus 2018 1st Quarter)](index=22&type=section&id=Financial%20Highlights%20%282019%201st%20Quarter%20Versus%202018%201st%20Quarter%29) Financial Highlights (in thousands, except per common unit) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Net sales | $91,873 | $79,859 | | Operating income (loss) | $9,439 | $(3,421) | | Net loss | $(6,079) | $(19,051) | | Net loss per common unit | $(0.05) | $(0.17) | | EBITDA | $26,043 | $13,049 | | Adjusted EBITDA | $26,043 | $13,049 | | Available Cash for distribution | $7,849 | $(4,139) | [Net Sales](index=22&type=section&id=Net%20Sales) - **Net sales increased by $12.0 million** to $91.9 million in Q1 2019, primarily driven by a $22 million increase from favorable pricing, partially offset by a $10.0 million decrease due to volume reductions[86](index=86&type=chunk) Impact of Sales Volumes and Pricing on Net Sales (in thousands) | Product | Price Variance | Volume Variance | | :-------- | :------------- | :-------------- | | UAN | $20,760 | $(9,975) | | Ammonia | $1,600 | $106 | - Increased UAN and ammonia sales pricing was attributed to a shift in demand from Q4 2018 to Q1 2019 due to heavy rain in fall 2018, leading to increased customer demand for ammonia in Q1 2019[87](index=87&type=chunk) [Cost of Materials and Other (exclusive of depreciation and amortization)](index=23&type=section&id=Cost%20of%20Materials%20and%20Other%20%28exclusive%20of%20depreciation%20and%20amortization%29) - Cost of materials and other increased by $1.2 million to $23.7 million in Q1 2019, primarily due to a **$2.2 million increase in pet coke costs** at the Coffeyville plant, partially offset by a $1.0 million decrease in distribution costs[88](index=88&type=chunk) [Direct Operating Expenses (exclusive of depreciation and amortization)](index=23&type=section&id=Direct%20Operating%20Expenses%20%28exclusive%20of%20depreciation%20and%20amortization%29) - **Direct operating expenses decreased by $3.9 million** to $34.8 million in Q1 2019, mainly due to a build-up of UAN and ammonia inventories compared to Q1 2018[89](index=89&type=chunk) [Non-GAAP Reconciliations](index=23&type=section&id=Non-GAAP%20Reconciliations) Reconciliation of Net Loss to EBITDA and Adjusted EBITDA (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(6,079) | $(19,051) | | Interest expense, net | $15,650 | $15,711 | | Income tax benefit | $(112) | $(37) | | Depreciation and amortization | $16,584 | $16,426 | | EBITDA and Adjusted EBITDA | $26,043 | $13,049 | Reconciliation of Adjusted EBITDA to Available Cash for Distribution (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Adjusted EBITDA | $26,043 | $13,049 | | Debt Service | $(14,827) | $(14,920) | | Maintenance capital expenditures | $(3,367) | $(2,268) | | Available Cash for distribution | $7,849 | $(4,139) | [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) - The Partnership's primary liquidity sources are cash from operations and customer advances, used for working capital, capital expenditures, debt service, and unitholder distributions[93](index=93&type=chunk) - Management believes current cash, cash equivalents, and the ABL Credit Facility will be **sufficient to meet cash requirements** for at least the next 12 months, with no material changes in liquidity for Q1 2019[94](index=94&type=chunk)[96](index=96&type=chunk) - As of March 31, 2019, **total liquidity was $121.6 million**, comprising $96.6 million in cash and cash equivalents (including $63.4 million from customer advances) and $50 million available under the ABL Credit Facility (less $25.0 million in cash included in the borrowing base)[97](index=97&type=chunk) Capital Spending (in thousands) | Category | Three Months Ended March 31, 2019 | Estimated full year 2019 | | :------------------ | :-------------------------------- | :----------------------- | | Maintenance capital | $3,500 | $18,000 - $20,000 | | Growth capital | — | $2,000 - $5,000 | | Total capital expenditures | $3,500 | $20,000 - $25,000 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the Partnership's market risks as of March 31, 2019 - **No material changes** to market risks were reported as of March 31, 2019[108](index=108&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirms the effectiveness of disclosure controls and procedures with no material changes in internal controls - As of March 31, 2019, the Partnership's disclosure controls and procedures were evaluated and **deemed effective** in providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[109](index=109&type=chunk)[111](index=111&type=chunk) - There were **no material changes** in the Partnership's internal control over financial reporting during the fiscal quarter ended March 31, 2019[112](index=112&type=chunk) [PART II. Other Information](index=27&type=section&id=PART%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 12 of the financial statements for a description of legal, administrative, and environmental proceedings - For details on legal proceedings, refer to Note 12 ('Commitments and Contingencies') in Part I, Item 1 of this report[114](index=114&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the 2018 Form 10-K - **No material changes** from the risk factors disclosed in the 'Risk Factors' section of the 2018 Form 10-K[115](index=115&type=chunk) [Item 5. Other Information](index=27&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report - No other information is reported in this section[116](index=116&type=chunk) [Item 6. Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including the 2019 Performance-Based Bonus Plan and various certifications - Exhibits include the CVR Partners, LP 2019 Performance-Based Bonus Plan, Rule 13a-14(a)/15d-14(a) Certifications from key executives, Section 1350 Certification, and XBRL formatted financial information[121](index=121&type=chunk)

Financial Data and Key Metrics Changes - For the full year 2018, the company reported net sales of $351 million, a net loss of $50 million, and adjusted EBITDA of $90 million, compared to a net loss of $73 million and adjusted EBITDA of $63 million in 2017, indicating a significant year-over-year improvement [8][14] - In Q4 2018, net sales were $98 million, with a net loss of $1 million and adjusted EBITDA of $33 million, compared to net sales of $78 million and a net loss of $27 million in Q4 2017, reflecting improved pricing and sales volumes [8][15] Business Line Data and Key Metrics Changes - Combined operations produced approximately 209,000 tons of ammonia, 357,000 tons of UAN, and 59,000 tons of ammonia available for sale in Q4 2018, compared to 200,000 tons of ammonia, 306,000 tons of UAN, and 64,000 tons of ammonia available for sale in the prior year period [10] - UAN sales volumes increased by 20% year-over-year, while ammonia sales volumes decreased significantly due to weather conditions, impacting overall sales [15][11] Market Data and Key Metrics Changes - The average net back price for UAN was $180 per ton in Q4 2018, a 36% increase over the prior year period, while ammonia's average net back price was $324 per ton, a 23% increase [10][11] - The U.S. corn-belt fall ammonia application season was down by 50% from early season expectations, leading to a shift in demand from fall to spring [11][22] Company Strategy and Development Direction - The company focused on safe and reliable operations, improving market capture, and maintaining financial discipline throughout 2018 [6] - A new rail loading rack at the Coffeyville facility enhances logistics capabilities, allowing for unit train deliveries and improved access to high netback markets [7][31] Management's Comments on Operating Environment and Future Outlook - Management noted that weather conditions in Q4 2018 negatively impacted normal farming operations, leading to lower nitrogen fertilizer demand [22] - The company expects a significant order book for spring ammonia and is preparing to meet customer needs as the planting season approaches [23][25] Other Important Information - The Board of Directors declared a fourth-quarter distribution of $0.12 per common unit, to be paid on March 11, 2019 [8] - The company reported a total liquidity position of approximately $87 million at the end of 2018, which is deemed sufficient for future operations [19][20] Q&A Session Summary Question: Market commentary on UAN pricing and its progression - Management indicated that Q4 pricing was largely reflective of fill prices, with some spot pricing included, and that first-quarter pricing would be influenced by the spot market [28][29] Question: Opportunities from the new rail loading at Coffeyville - The new loading rack allows for improved logistics and access to larger geographic markets, enhancing competitiveness in delivering large quantities to customers [30][31] Question: Capital expenditure outlook for 2019 - The company expects capital expenditures to be in the range of $20 million to $25 million, with some targeted growth projects included [34][38] Question: Impact of natural gas pricing on Q1 - Management noted that natural gas prices spiked in Q4 but have moderated, with expectations for stable pricing in Q1 [42] Question: Pricing movements in regions served by the company - The company observed that interior markets have been less volatile compared to NOLA, with stable pricing despite some declines [44][46] Question: Timing of product movement in the spring - Typically, product movement begins in February in southern regions and progresses northward, with logistics being a critical factor for timely delivery [47][50] Question: Customer purchasing behavior and inventory management - Management acknowledged that customers are holding back on purchases due to inventory levels, which could lead to a squeeze in logistics as demand increases [49][52]