CVR Partners(US:UAN)2025-02-19 21:21Market Risk and Commodity Prices - The company reported a significant exposure to market risk due to potential changes in prices for fertilizer products, pet coke, and natural gas, which are critical raw materials for production [291]. - A $1.00 per MMBtu change in the price of natural gas would affect the cost to produce a ton of ammonia and UAN by approximately $14.29 and $5.86, respectively [293]. - A $1.00 per ton change in the price of pet coke would change the cost to produce a ton of ammonia and UAN by approximately $0.66 and $0.27, respectively [293]. - The company is exposed to risks from changes in market conditions, including fluctuations in fertilizer, natural gas, and other commodity prices, which can impact operating results [22]. - The company’s ability to generate distributable cash or make cash distributions on common units is influenced by market volatility and commodity prices [22]. - The company acknowledges the potential impact of climate change and environmental regulations on demand for its products, which could affect future growth [27]. Financial Performance - Net sales for the year ended December 31, 2024, were $525.3 million, a decrease of 22.9% compared to $681.5 million in 2023 [314]. - Operating income for 2024 was $90.4 million, down 55.1% from $201.4 million in 2023 [314]. - The company reported a net income of $60.9 million for 2024, a decline of 64.7% from $172.4 million in 2023 [314]. - Basic and diluted earnings per common unit decreased to $5.76 in 2024 from $16.31 in 2023, representing a decline of 64.7% [314]. - Net income for the year ended December 31, 2024, was $60.9 million, a decrease of 64.7% compared to $172.4 million in 2023 [320]. - Total revenue for the year ended December 31, 2024, was $525.3 million, a decrease of 22.9% from $681.5 million in 2023 [400]. - Revenue from ammonia products was $130.0 million in 2024, down 19.5% from $161.0 million in 2023 [400]. - UAN revenue decreased by 27.7% to $312.0 million in 2024 from $431.5 million in 2023 [400]. Assets and Liabilities - As of December 31, 2024, total assets increased to $1,018.7 million from $975.3 million in 2023, reflecting a growth of approximately 4.4% [311]. - Total current liabilities rose to $111.3 million in 2024, compared to $75.5 million in 2023, marking an increase of 47.5% [311]. - Long-term debt and finance lease obligations increased to $568.0 million in 2024 from $547.3 million in 2023, reflecting a rise of 3.8% [311]. - The total long-term debt and finance lease obligations, including the current portion, was $568.9 million as of December 31, 2024, compared to $547.3 million in 2023 [388]. - The Partnership recognized total other current liabilities of $24.0 million as of December 31, 2024, up from $20.9 million in 2023 [386]. Cash Flow and Distributions - Cash and cash equivalents increased to $90.9 million in 2024, up from $45.3 million in 2023, indicating a growth of 100.5% [311]. - Net cash provided by operating activities was $150.5 million, down 38.2% from $243.5 million in 2023 [320]. - Cash distributions to common unitholders (affiliates) were $26.0 million, a decrease of 74.9% from $103.6 million in 2023 [320]. - The total quarterly distributions paid in 2024 reached $70,710,000, with an average distribution per common unit of $6.69 [436]. - For the fourth quarter of 2024, the Partnership declared a distribution of $1.75 per common unit, totaling $18.5 million, payable to unitholders [438]. Operational and Market Conditions - The company’s operations are subject to the volatile, cyclical, and seasonal nature of the nitrogen fertilizer market, which can impact financial performance [22]. - The company faces risks related to the dependence on a few third-party suppliers for feedstocks and transportation services, which could affect operational stability [22]. - The company’s production levels and pricing are subject to significant competition in the nitrogen fertilizer business, which can affect market share and profitability [22]. - The Partnership's nitrogen fertilizer products are primarily sold on a wholesale basis in the United States [323]. Capital Expenditures and Investments - Capital expenditures for 2024 totaled $37.1 million, an increase from $24.2 million in 2023 [320]. - The Partnership incurred capitalized interest of $1.0 million in 2024, compared to $0.5 million in 2023, showing an increase in financing costs associated with capital projects [369]. - The Partnership's total unconditional purchase obligations amount to $57.5 million, with $3.9 million due in each of the next five years [417]. Compliance and Governance - The company maintained effective internal control over financial reporting as of December 31, 2024, according to the auditor's opinion [304]. - The Partnership's compliance with all covenants under debt instruments was confirmed as of December 31, 2024 [399]. - The Board's distribution policy allows for quarterly distributions based on available cash, subject to change at the Board's discretion [435].