CVR Partners(US:UAN)2026-02-18 21:33Market Risks and Commodity Prices - The company reported significant exposure to market risks due to potential changes in prices for fertilizer products, pet coke, and natural gas, which are critical raw materials for production [286]. - The company anticipates potential impacts from changes in market conditions, including fluctuations in fertilizer and natural gas prices, which could affect profitability [23]. - A $1.00 per MMBtu change in natural gas prices affects the production cost of ammonia and UAN by approximately $14.29 and $5.86 per ton, respectively [287]. - A $1.00 per ton change in pet coke prices impacts the production cost of ammonia and UAN by approximately $0.66 and $0.27 per ton, respectively [287]. Operational Risks - The company faces risks related to the volatile, cyclical, and seasonal nature of its business, which could impact cash distributions and financial performance [23]. - The company is dependent on a few third-party suppliers for feedstocks and transportation services, which poses risks to operational stability [23]. - The company acknowledges the potential for significant operational hazards and interruptions, including unscheduled maintenance or downtime, which could affect production levels [33]. - The company may face challenges in obtaining or renewing necessary permits and approvals for operations, impacting business continuity [33]. Competition and Market Position - The company is subject to intense competition in the nitrogen fertilizer market, which may affect pricing and market share [33]. - The company is reliant on the natural gas market, and volatility in natural gas prices could impact its competitive position [33]. Environmental and Regulatory Risks - The company is exposed to risks from environmental regulations and compliance, which could adversely affect operations and financial results [33]. Financial Risks - As of December 31, 2025, there were no outstanding borrowings under the ABL Credit Facility or other variable rate borrowings, indicating a low exposure to interest rate risk [288]. - A hypothetical 50-basis point fluctuation in market interest rates would have resulted in a $25.6 million change in the fair value of the company's fixed-rate debt as of December 31, 2025 [289]. - Fixed-rate debt exposes the company to refinancing risks, potentially requiring new debt at higher rates upon maturity [289]. Raw Material Cost Management - The company has commitments to purchase pet coke and natural gas through short-term, fixed price, and index price purchase contracts, indicating a strategy to manage raw material costs [286]. - The company produces nitrogen-based fertilizer products year-round to meet customer demand during high-delivery-volume seasons, with inventory value subject to market risk from commodity price fluctuations [287].