CVR PARTNERS, LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL
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Common Units
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General
Partner
Interest
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Total
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Issued
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Amount
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(unaudited)
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(in thousands, except unit data)
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Balance at December 31, 2017
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113,282,973
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$
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549,852
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$
|
1
|
|
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$
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549,853
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Net loss
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—
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|
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(19,051
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)
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—
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(19,051
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)
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Balance at March 31, 2018
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113,282,973
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$
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530,801
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$
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1
|
|
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$
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530,802
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See accompanying notes to the condensed consolidated financial statements.
CVR PARTNERS, LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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Three Months Ended
March 31,
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2018
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2017
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(unaudited)
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(in thousands)
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Cash flows from operating activities:
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Net loss
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$
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(19,051
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)
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$
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(10,336
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)
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Adjustments to reconcile net loss to net cash provided by operating activities:
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Depreciation and amortization
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16,426
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15,412
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Allowance for doubtful accounts
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25
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3
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Amortization of deferred financing costs and original issue discount
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806
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735
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Loss on disposition of fixed assets
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54
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13
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Share-based compensation – Affiliates
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110
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516
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Share-based compensation
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170
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167
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Change in assets and liabilities:
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Accounts receivable
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(4,419
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)
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(1,194
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)
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Inventories
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(1,605
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)
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(3,106
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)
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Prepaid expenses and other current assets
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549
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|
685
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Other long-term assets
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188
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178
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Accounts payable
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(786
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)
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(1,372
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)
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Deferred revenue
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10,635
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19,315
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Accrued expenses and other current liabilities
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11,307
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9,016
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Other long-term liabilities
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77
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23
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Net cash provided by operating activities
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14,486
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30,055
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Cash flows from investing activities:
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Capital expenditures
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(2,720
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)
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(4,112
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)
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Proceeds from sale of assets
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172
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—
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Net cash used in investing activities
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(2,548
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)
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(4,112
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)
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Net increase in cash and cash equivalents
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11,938
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25,943
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Cash and cash equivalents, beginning of period
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49,173
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55,595
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Cash and cash equivalents, end of period
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$
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61,111
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$
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81,538
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Supplemental disclosures:
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Cash paid for income taxes, net of refunds (received)
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$
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(4
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)
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$
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—
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Non-cash investing and financing activities:
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Construction in progress additions included in accounts payable
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$
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2,203
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$
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2,181
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Change in accounts payable related to construction in progress additions
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$
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1,314
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$
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(1,690
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)
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See accompanying notes to the condensed consolidated financial statements.
CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2018
(unaudited)
(1) Organization and Nature of Business
CVR Partners, LP (referred to as "CVR Partners" or the "Partnership") is a Delaware limited partnership, formed by CVR Energy, Inc. (together with its subsidiaries, but excluding the Partnership and its subsidiaries, "CVR Energy") to own, operate and grow its nitrogen fertilizer business. Nitrogen fertilizer is used by farmers to improve the yield and quality of their crops, primarily corn and wheat. The Partnership principally produces ammonia and urea ammonium nitrate ("UAN"), an aqueous solution of urea and ammonium nitrate. The Partnership's product sales are sold on a wholesale basis in North America.
The Partnership produces nitrogen fertilizer products at
two
manufacturing facilities, which are located in Coffeyville, Kansas (the "Coffeyville Facility") and East Dubuque, Illinois (the "East Dubuque Facility"). The Partnership's subsidiaries include Coffeyville Resources Nitrogen Fertilizers, LLC ("CRNF"), which owns and operates the Coffeyville Facility, and East Dubuque Nitrogen Fertilizers, LLC ("EDNF"), which owns and operates the East Dubuque Facility. Both facilities manufacture ammonia and are able to further upgrade to other nitrogen fertilizer products, principally UAN.
As of
March 31, 2018
, public security holders held approximately
66%
of the Partnership's outstanding limited partner interests and Coffeyville Resources, LLC ("CRLLC"), a wholly-owned subsidiary of CVR Energy, held approximately
34%
of the Partnership's outstanding limited partner interests and
100%
of the noneconomic general partner interest. As of
March 31, 2018
, Icahn Enterprises L.P. ("IEP") and its affiliates owned approximately
82%
of the shares of CVR Energy.
Management and Operations
CVR GP, LLC ("CVR GP" or the "general partner") manages and operates the Partnership. Common unitholders have only limited voting rights on matters affecting the Partnership. In addition, common unitholders have no right to elect the general partner's directors on an annual or continuing basis.
The Partnership is operated by a combination of the general partner's senior management team and CVR Energy's senior management team pursuant to a services agreement among CVR Energy, CVR GP and the Partnership. The various rights and responsibilities of the Partnership's partners are set forth in the limited partnership agreement. The Partnership is also party to a number of agreements with CVR Energy and CVR GP to regulate certain business relations between the Partnership and the other parties thereto. See
Note 13 ("Related Party Transactions")
for further discussion.
(2) Basis of Presentation
The accompanying Partnership condensed consolidated financial statements include the accounts of CVR Partners and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"). These condensed consolidated financial statements should be read in conjunction with the
December 31, 2017
audited consolidated financial statements and notes thereto included in CVR Partners’ Annual Report on Form 10-K for the year ended
December 31, 2017
, which was filed with the SEC on February 23, 2018 (the "2017 Form 10-K").
The condensed consolidated financial statements include certain selling, general and administrative expenses and direct operating expenses that CVR Energy and its subsidiaries incurred on behalf of the Partnership. These related party transactions are governed by the services agreement. See
Note 13 ("Related Party Transactions")
for additional discussion of the services agreement and billing and allocation of certain costs.
In the opinion of the Partnership’s management, the accompanying condensed consolidated financial statements and related notes reflect all adjustments (consisting only of normal recurring adjustments) that are necessary to fairly present the financial position of the Partnership as of
March 31, 2018
and
December 31, 2017
, the results of operations and cash flows of the Partnership for the
three
months ended
March 31, 2018
and
2017
, and the changes in partners’ capital for the Partnership for the
three
months ended
March 31, 2018
.
CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2018
(unaudited)
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Results of operations and cash flows for the interim periods presented are not necessarily indicative of the results that will be realized for the year ending
December 31, 2018
or any other interim or annual period.
Planned Major Maintenance Costs
The direct-expense method of accounting is used for maintenance activities, including planned major maintenance activities and other less extensive shutdowns. Maintenance costs are recognized as an expense when maintenance services are performed. Planned major maintenance activities generally occur every
two
to
three years
. In the second quarter of 2018, the Coffeyville Facility commenced a scheduled turnaround that is expected to last approximately
15
days.
(3) Recent Accounting Pronouncements
Adoption of New Accounting Standard
On January 1, 2018, the Partnership adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, "
Revenue from Contracts with Customers"
("ASC 606" or the "new revenue standard") using the modified retrospective method applied to contracts which were not completed as of January 1, 2018. The new revenue standard was applied prospectively and the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Partnership did not identify any material differences in its existing revenue recognition methods that require modification under the new revenue standard. However, the Partnership did identify a balance sheet presentation change discussed below. The Partnership’s Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows were not impacted due to the adoption of ASC 606 for the three months ended March 31, 2018.
The Partnership identified a balance sheet presentation change associated with contracts requiring customer prepayment prior to delivery. Prior to adoption of ASC 606, deferred revenue, a type of contract liability, was recorded upon customer prepayment. Under the new revenue standard, a receivable and associated deferred revenue is recorded at the point in time in which a prepaid contract is legally enforceable and the associated right to consideration is unconditional. The adoption of the new revenue standard resulted in a
$21.4 million
increase to deferred revenue and accounts receivable as of January 1, 2018. After the effect of adoption of the new revenue standard, deferred revenue and accounts receivable were
$34.3 million
and
$31.2 million
, respectively, as of January 1, 2018.
The following table displays the effect of the adoption of ASC 606 to the Condensed Consolidated Balance Sheet as of March 31, 2018:
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March 31, 2018
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As Reported
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Balances without adoption of ASC 606
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Effect of Change
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(in thousands)
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Assets
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Accounts receivable
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$
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14,948
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$
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14,249
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$
|
699
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Liabilities
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Deferred revenue
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$
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24,229
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$
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23,530
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$
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699
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CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2018
(unaudited)
New Accounting Standards Issued But Not Yet Implemented
In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02, "
Leases"
("ASU 2016-02"), creating a new topic, FASB ASC Topic 842, "
Leases,"
which supersedes lease requirements in FASB ASC Topic 840,
"Leases."
The new standard revises accounting for operating leases by a lessee, among other changes, and requires a lessee to recognize a liability related to future lease payments and an asset representing its right to use the underlying asset for the lease term in the balance sheet. Quantitative and qualitative disclosures, including disclosures regarding significant judgments made by management, will be required. The standard is effective for the first interim and annual periods beginning after December 15, 2018, with early adoption permitted. At adoption, ASU 2016-02 will be applied using the modified retrospective application method and allows for certain practical expedients. The Partnership expects its assessment and implementation plan to be ongoing during 2018 and is currently unable to reasonably estimate the impact of adopting the new lease standard on its consolidated financial statements and related disclosures. The Partnership expects to recognize right-of-use assets and leases liability on the balance sheet for existing long-term operating leases, the majority of which are railcar leases. The impact of the new standard on right-of-use assets, leases liability and related disclosures is expected to be material.
(4) Revenue
The following table presents the Partnership's revenue disaggregated by product:
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Three Months Ended
March 31, 2018
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(in thousands)
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Ammonia
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$
|
11,597
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UAN
|
52,763
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Urea products
|
4,911
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Fertilizer sales net at gate
|
69,271
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Freight revenue
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8,739
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Other revenue
|
1,849
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Total net sales
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$
|
79,859
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|
The Partnership sells its products on a wholesale basis under a contract or by purchase order. The Partnership’s contracts with customers, including purchase orders, generally contain fixed pricing and most have terms of less than one year. The Partnership recognizes revenue at the point in time at which the customer obtains control of the product, which is generally upon delivery and acceptance by the customer. The customer acceptance point is stated in the contract and may be at one of the Partnership’s manufacturing facilities, at one of the Partnership’s off-site loading facilities or at the customer’s designated facility. Freight revenue recognized by the Partnership represents the pass-through finished goods delivery costs incurred prior to customer acceptance and is reimbursed by customers. An offsetting expense is included in cost of materials and other. Qualifying taxes collected from customers and remitted to governmental authorities are not included in reported revenues.
Depending on the product sold and the type of contract, payments from customers are generally either due prior to delivery or within
15
to
30 days
of product delivery.
The Partnership generally provides no warranty other than the implicit promise that goods delivered are free of liens and encumbrances and meet the agreed upon specifications. Product returns are rare, and as such, the Partnership does not record a specific warranty reserve or consider activities related to such warranty, if any, to be a separate performance obligation.
The Partnership has an immaterial amount of variable consideration for contracts with an original duration of less than a year. A small portion of the Partnership’s revenue includes contracts extending beyond one year, some of which contain variable pricing in which the majority of the variability is attributed to the market-based pricing. The Partnership’s contracts do not contain a significant financing component.
CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2018
(unaudited)
The Partnership has certain fee-based revenue, included in other revenue in the table above, that is recognized based on the net amount of the proceeds received, consistent with prior accounting practice.
Transaction price allocated to remaining performance obligations
As of March 31, 2018, the Partnership had approximately
$13.3 million
of remaining performance obligations for contracts with an original expected duration of more than one year. The Partnership expects to recognize approximately
64%
of these performance obligations as revenue by the end of 2019, an additional
22%
by 2020 and the remaining balance thereafter. The Partnership has elected to not disclose the amount of transaction price allocated to remaining performance obligations for contracts with an original expected duration of less than one year. The Partnership has elected to not disclose variable consideration allocated to wholly unsatisfied performance obligations that are based on market prices that have not yet been determined.
Contract balances
The Partnership’s deferred revenue is a contract liability that primarily relates to fertilizer sales contracts requiring customer prepayment prior to product delivery to guarantee a price and supply of nitrogen fertilizer. Deferred revenue is recorded at the point in time in which a prepaid contract is legally enforceable and the associated right to consideration is unconditional prior to transferring product to the customer. An associated receivable is recorded for uncollected prepaid contract amounts. Contracts requiring prepayment are generally short-term in nature and, as discussed above, revenue is recognized at the point in time in which the customer obtains control of the product.
A summary of the deferred revenue activity during the
three
months ended
March 31, 2018
is presented below:
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|
Three Months Ended
March 31, 2018
|
|
|
|
(in thousands)
|
Balance at January 1, 2018
|
$
|
34,270
|
|
Add:
|
|
New prepay contracts entered into during the period
|
3,418
|
|
Less:
|
|
Revenue recognized that was included in the contract liability balance at the beginning of the period
|
11,565
|
|
Revenue recognized related to contracts entered into during the period
|
1,763
|
|
Other changes
|
131
|
|
Balance at March 31, 2018
|
$
|
24,229
|
|
(5) Share‑Based Compensation
Certain employees of CVR Partners and employees of CVR Energy who perform services for the Partnership under the services agreement with CVR Energy participate in equity compensation plans of CVR Partners' affiliates. All compensation expense related to these plans for full-time employees of CVR Partners has been attributed
100%
to the Partnership. For employees of CVR Energy, the Partnership records share-based compensation relative to the percentage of time spent by each employee providing services to the Partnership as compared to the total calculated share-based compensation by CVR Energy. The Partnership recognizes the costs of share-based compensation in selling, general and administrative expenses and direct operating expenses (exclusive of depreciation and amortization). Allocated expense amounts related to plans for which the Partnership is responsible for payment are reflected as changes to accrued expenses and other current liabilities.
Long-Term Incentive Plan – CVR Energy
CVR Energy has a Long-Term Incentive Plan ("CVR Energy LTIP") that permits the grant of options, stock appreciation rights, restricted shares, restricted stock units, dividend equivalent rights, share awards and performance awards (including performance share units, performance units and performance based restricted stock). As of
March 31, 2018
, only grants of performance units under the
CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2018
(unaudited)
CVR Energy LTIP remain outstanding. Individuals who are eligible to receive awards and grants under the CVR Energy LTIP include CVR Energy’s or its subsidiaries’ employees, officers, consultants and directors.
Performance Unit Awards
In December 2015, CVR Energy entered into a performance unit award agreement (the "2015 Performance Unit Award Agreement") with Mr. Lipinski, CVR Energy's then Chief Executive Officer and President. Compensation cost for the 2015 Performance Unit Award Agreement was recognized over the performance cycle from January 1, 2016 to December 31, 2016. The award was fully vested at December 31, 2016 and the Partnership reimbursed CVR Energy
$0.5 million
for its allocated portion of the performance unit award during the first quarter of 2017.
In December 2016, CVR Energy entered into a performance unit award agreement (the "2016 Performance Unit Award Agreement") with Mr. Lipinski. Compensation cost for the 2016 Performance Unit Award Agreement was recognized over the performance cycle from January 1, 2017 to December 31, 2017. The award was fully vested at December 31, 2017 and the Partnership reimbursed CVR Energy
$0.5 million
for its allocated portion of the performance unit award during the first quarter of 2018. As of December 31, 2017, the Partnership had a liability of
$0.5 million
, for its allocated portion of the 2016 Performance Unit Award Agreement, which was recorded in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. Compensation expense recorded for the three months ended March 31, 2017 related to the award was approximately
$0.1 million
.
In November 2017, CVR Energy entered into a performance unit agreement (the "2017 Performance Unit Agreement") with Mr. Lamp, CVR Energy's current Chief Executive Officer and President. Compensation cost will be recognized over the performance cycle from January 1, 2018 to December 31, 2018. The performance unit award represents the right to receive, upon vesting, a cash payment equal to a defined threshold in accordance with the award agreement, multiplied by a performance factor that is based upon the achievement of certain operating objectives. The Partnership will be responsible for reimbursing CVR Energy for its allocated portion of the performance unit award. Assuming a target performance threshold and that the allocation of costs from CVR Energy remains consistent with the allocation percentages in place at
March 31, 2018
, there was approximately
$0.2 million
of total unrecognized compensation cost related to the 2017 Performance Unit Agreement to be recognized over approximately
0.8 years
. Compensation expense recorded for the
three
months ended
March 31, 2018
related to the award was approximately
$0.1 million
. As of
March 31, 2018
, the Partnership had a liability of
$0.1 million
, for its allocated portion of the 2017 Performance Unit Agreement, which is recorded in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets.
In November 2017, CVR Energy entered into a performance unit award agreement (the "2017 Performance Unit Award Agreement") with Mr. Lamp. The performance unit award represents the right to receive upon vesting, a cash payment equal to
$10.0 million
if the average closing price of CVR Energy's common stock over the
30
-trading day period from January 4, 2022 to February 15, 2022 is equal to or greater than
$60
per share. The Partnership will be responsible for reimbursing CVR Energy for its allocated portion of the performance unit award. Assuming the target is met and that the allocation of costs from CVR Energy remains consistent with the allocation percentages in place at
March 31, 2018
, there was approximately
$1.4 million
of total unrecognized compensation cost related to the 2017 Performance Unit Award Agreement to be recognized over approximately
3.8
years. Compensation expense recorded for the
three
months ended
March 31, 2018
related to the award was approximately
$0.1 million
. As of
March 31, 2018
, the Partnership had a liability of
$0.1 million
, for its allocated portion of the 2017 Performance Unit Award Agreement, which is recorded in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets.
Incentive Unit Awards – CVR Energy
CVR Energy granted awards of incentive units and distribution equivalent rights to certain employees of CRLLC, CVR Energy and the Partnership's general partner who provide shared services to CVR Energy and its subsidiaries (including the Partnership). The awards are generally graded vesting awards, which are expected to vest over
three
years, with one-third of the award vesting each year. Compensation expense is recognized on a straight-line basis over the vesting period of the respective tranche of the award. Each incentive unit and distribution equivalent right represents the right to receive, upon vesting, a cash payment equal to (i) the average fair market value of
one
common unit of CVR Refining, LP ("CVR Refining") in accordance with the award agreement, plus (ii) the per unit cash value of all distributions declared and paid by CVR Refining from the grant date to and including the vesting date. The awards, which are liability-classified, are remeasured at each subsequent reporting date until they vest.
CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2018
(unaudited)
Assuming the portion of time spent on CVR Partners-related matters by CVR Energy employees providing services to CVR Partners remains consistent with the amount of services provided during
March 31, 2018
, there was approximately
$0.6 million
of total unrecognized compensation cost related to the incentive units and associated distribution equivalent rights to be recognized over a weighted-average period of approximately
1.4 years
. Inclusion of a vesting table would not be meaningful due to changes in allocation percentages that may occur from time to time. The unrecognized compensation expense has been determined by the number of incentive units and respective allocation percentage for individuals for whom, as of
March 31, 2018
, compensation expense has been allocated to the Partnership. Compensation benefit for the
three
months ended
March 31, 2018
related to the incentive unit awards was approximately
$0.3 million
. Compensation expense for the
three
months ended
March 31, 2017
related to the incentive unit awards was approximately
$0.2 million
. The Partnership is responsible for reimbursing CVR Energy for its allocated portion of the awards.
As of
March 31, 2018
and
December 31, 2017
, the Partnership had a liability related to these awards of
$0.4 million
and
$0.7 million
, respectively, which was recorded in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets.
Long-Term Incentive Plan – CVR Partners
The Partnership has a long-term incentive plan ("CVR Partners LTIP") that provides for the grant of options, unit appreciation rights, distribution equivalent rights, restricted units, phantom units and other unit-based awards, each in respect of common units. Individuals eligible to receive awards under the CVR Partners LTIP include (i) employees of the Partnership and its subsidiaries, (ii) employees of the general partner, (iii) members of the board of directors of the general partner, and (iv) certain CVR Partners' parent's employees, consultants and directors who perform services for the benefit of the Partnership.
Through the CVR Partners LTIP, phantom and common units have been awarded to employees of the Partnership and the general partner. Phantom unit awards made to employees of the general partner are considered non-employee equity-based awards. Awards to employees of the Partnership and employees of the general partner vest over a
three
-year period. The maximum number of common units issuable under the CVR Partners LTIP is
5,000,000
. As of
March 31, 2018
, there were
4,820,215
common units available for issuance under the CVR Partners LTIP. As phantom unit awards discussed below are cash-settled, they do not reduce the number of common units available for issuance.
Each phantom unit and distribution equivalent right represents the right to receive, upon vesting, a cash payment equal to (i) the average fair market value of
one
unit of the Partnership's common units in accordance with the award agreement, plus (ii) the per unit cash value of all distributions declared and paid by the Partnership from the grant date to and including the vesting date. The awards, which are liability-classified, are remeasured at each subsequent reporting date until they vest. The phantom unit awards are generally graded vesting awards, which are expected to vest over
three
years with one-third of the award vesting each year. Compensation expense is recognized on a straight-line basis over the vesting period of the respective tranche of the award.
A summary of the phantom unit activity during the
three
months ended
March 31, 2018
is presented below:
|
|
|
|
|
|
|
|
|
Phantom Units
|
|
Weighted-Average
Grant Date Fair Value
|
Non-vested at January 1, 2018
|
1,188,206
|
|
|
$
|
4.35
|
|
Granted
|
18,262
|
|
|
3.29
|
|
Vested
|
—
|
|
|
—
|
|
Forfeited
|
(23,320
|
)
|
|
4.26
|
|
Non-vested at March 31, 2018
|
1,183,148
|
|
|
$
|
4.34
|
|
Unrecognized compensation expense associated with the unvested phantom units at
March 31, 2018
was approximately
$2.4 million
and is expected to be recognized over a weighted average period of
1.5 years
. Compensation expense recorded for the
three
months ended
March 31, 2018
and
2017
related to the awards under the CVR Partners LTIP was approximately
$0.4 million
and
$0.3 million
, respectively. Compensation expense related to the awards to employees of the Partnership and its subsidiaries under the CVR Partners LTIP has been recorded in selling, general and administrative expenses - third parties and direct operating expenses
CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2018
(unaudited)
(exclusive of depreciation and amortization) - third parties. Compensation expense related to the awards issued to employees of the general partner under the CVR Partners LTIP has been recorded in selling, general and administrative expenses - affiliates and direct operating expenses (exclusive of depreciation and amortization) - affiliates as the expense has been incurred for the benefit of employees.
As of
March 31, 2018
and
December 31, 2017
, the Partnership had liabilities of
$1.1 million
and
$0.7 million
, respectively, for cash settled non-vested phantom unit awards and associated distribution equivalent rights, which are recorded in personnel accruals on the Condensed Consolidated Balance Sheets.
(6) Inventories
Inventories consisted of the following:
|
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
|
|
|
|
|
(in thousands)
|
Finished goods
|
$
|
17,311
|
|
|
$
|
13,594
|
|
Raw materials and precious metals
|
6,329
|
|
|
6,333
|
|
Parts and supplies
|
34,153
|
|
|
34,170
|
|
Total inventories
|
$
|
57,793
|
|
|
$
|
54,097
|
|
(7) Property, Plant and Equipment
A summary of costs and accumulated depreciation for property, plant and equipment is as follows:
|
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
|
|
|
|
|
(in thousands)
|
Land and improvements
|
$
|
13,092
|
|
|
$
|
13,092
|
|
Buildings and improvements
|
17,068
|
|
|
16,990
|
|
Machinery and equipment
|
1,352,573
|
|
|
1,352,573
|
|
Automotive equipment
|
599
|
|
|
599
|
|
Furniture and fixtures
|
1,607
|
|
|
1,582
|
|
Railcars
|
16,261
|
|
|
16,261
|
|
Construction in progress
|
13,233
|
|
|
9,659
|
|
|
1,414,433
|
|
|
1,410,756
|
|
Less: Accumulated depreciation
|
359,492
|
|
|
341,230
|
|
Total property, plant and equipment, net
|
$
|
1,054,941
|
|
|
$
|
1,069,526
|
|
Capitalized interest recognized as a reduction of interest expense was approximately
$0.2 million
and
$42,000
for the three months ended
March 31, 2018
and
2017
, respectively.
(8) Partners’ Capital and Partnership Distributions
The Partnership has
two
types of partnership interests outstanding:
|
|
•
|
a general partner interest, which is not entitled to any distributions, and which is held by the general partner.
|
As of
March 31, 2018
, the Partnership had a total of
113,282,973
common units issued and outstanding, of which
38,920,000
common units were owned by CRLLC, representing approximately
34%
of the total Partnership common units outstanding.
The board of directors of the Partnership's general partner has a policy for the Partnership to distribute all available cash generated on a quarterly basis. Cash distributions will be made to the common unitholders of record on the applicable record date, generally within
60 days
after the end of each quarter. Available cash for each quarter will be determined by the board of directors of the general partner following the end of such quarter.
Available cash begins with Adjusted EBITDA reduced for cash needed for (i) net cash interest expense (excluding capitalized interest) and debt service and other contractual obligations; (ii) maintenance capital expenditures; and (iii) to the extent applicable, major scheduled turnaround expenses and reserves for future operating or capital needs that the board of directors of the general partner deems necessary or appropriate, if any. Adjusted EBITDA is defined as EBITDA (net income before interest expense, net, income tax expenses, depreciation and amortization) further adjusted for the impact of major scheduled turnaround expense, gain or loss on extinguishment of debt, loss on disposition of assets, and business interruption insurance recovery, when applicable. Available cash for distribution may be increased by the release of previously established cash reserves, if any, at the discretion of the board of directors of the general partner, and available cash is increased by the business interruption insurance proceeds. Actual distributions are set by the board of directors of the general partner. The board of directors of the general partner may modify the cash distribution policy at any time, and the partnership agreement does not require the board of directors of the general partner to make distributions at all.
CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2018
(unaudited)
(9) Net Income (Loss) per Common Unit
The Partnership's net income (loss) is allocated wholly to the common units as the general partner does not have an economic interest. Basic and diluted net income (loss) per common unit is calculated by dividing net income (loss) by the weighted-average number of common units outstanding during the period. The common units issued during the period, if any, are included on a weighted-average basis for the days in which they were outstanding.
(10) Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities were as follows:
|
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
|
|
|
|
|
(in thousands)
|
Property taxes
|
$
|
2,071
|
|
|
$
|
1,493
|
|
Accrued interest
|
17,635
|
|
|
2,683
|
|
Railcar maintenance accruals
|
1,469
|
|
|
678
|
|
Affiliates (1)
|
939
|
|
|
3,221
|
|
Other accrued expenses and liabilities
|
3,888
|
|
|
3,367
|
|
Total accrued expenses and other current liabilities
|
$
|
26,002
|
|
|
$
|
11,442
|
|
________________________________
|
|
(1)
|
Accrued expenses and other current liabilities include amounts owed by the Partnership to CVR Energy under the shared services agreement. Refer to
Note 13 ("Related Party Transactions")
for additional discussion.
|
(11) Debt
Long-term debt consisted of the following:
|
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
|
|
|
|
|
(in thousands)
|
9.250% senior secured notes, due 2023
|
$
|
645,000
|
|
|
$
|
645,000
|
|
6.500% notes, due 2021
|
2,240
|
|
|
2,240
|
|
Total long-term debt, before debt issuance costs and discount
|
647,240
|
|
|
647,240
|
|
Less:
|
|
|
|
Unamortized discount
|
12,988
|
|
|
13,457
|
|
Unamortized debt issuance costs
|
7,604
|
|
|
7,879
|
|
Total long-term debt, net of current portion
|
$
|
626,648
|
|
|
$
|
625,904
|
|
For the three months ended
March 31, 2018
and
2017
, amortization of the discount on debt and amortization of debt issuance costs reported as interest expense and other financing costs totaled approximately
$0.8 million
and
$0.7 million
, respectively.
2023 Notes
On June 10, 2016, the Partnership and CVR Nitrogen Finance Corporation, an indirect wholly-owned subsidiary of the Partnership, certain subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee and as collateral trustee, completed a private offering of
$645.0 million
aggregate principal amount of
9.250%
Senior Secured Notes due 2023 (the "2023 Notes"). The 2023 Notes mature on June 15, 2023, unless earlier redeemed or repurchased by the issuers. Interest on the 2023 Notes is payable semi-annually in arrears on June 15 and December 15 of each year. The 2023 Notes are guaranteed on a senior secured basis by all of the Partnership’s existing subsidiaries.
The 2023 Notes were issued at a
$16.1 million
discount, which is being amortized over the term of the 2023 Notes as interest expense using the effective-interest method. As a result of the issuance, approximately
$9.4 million
of debt issuance costs were incurred, which are being amortized over the term of the 2023 Notes as interest expense using the effective-interest method.
The 2023 Notes contain customary covenants for a financing of this type that, among other things, restrict the Partnership’s ability and the ability of certain of its subsidiaries to: (i) sell assets; (ii) pay distributions on, redeem or repurchase the Partnership’s units or redeem or repurchase its subordinated debt; (iii) make investments; (iv) incur or guarantee additional indebtedness or issue preferred units; (v) create or incur certain liens; (vi) enter into agreements that restrict distributions or other payments from the Partnership’s restricted subsidiaries to the Partnership; (vii) consolidate, merge or transfer all or substantially all of the Partnership’s assets; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries.
The indenture governing the 2023 Notes prohibits the Partnership from making distributions to unitholders if any default or event of default (as defined in the indenture) exists. In addition, the indenture limits the Partnership's ability to pay distributions to unitholders. The covenants will apply differently depending on the Partnership's fixed charge coverage ratio (as defined in the indenture). If the fixed charge coverage ratio is not less than
1.75
to 1.0, the Partnership will generally be permitted to make restricted payments, including distributions to its unitholders, without substantive restriction. If the fixed charge coverage ratio is less than
1.75
to 1.0, the Partnership will generally be permitted to make restricted payments, including distributions to our unitholders, up to an aggregate
$75.0 million
basket plus certain other amounts referred to as "incremental funds" under the indenture. As of
March 31, 2018
, the ratio was less than
1.75
to 1.0. Restricted payments have been made, and
$72.7 million
of the basket was available as of
March 31, 2018
. The Partnership was in compliance with the covenants contained in the 2023 Notes as of
March 31, 2018
.
Included in other current liabilities on the Condensed Consolidated Balance Sheets is accrued interest payable totaling approximately
$17.6 million
and
$2.7 million
, respectively, as of
March 31, 2018
and December 31, 2017 related to the 2023 Notes.
CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2018
(unaudited)
At
March 31, 2018
and December 31, 2017, respectively, the estimated fair value of the 2023 Notes was approximately
$686.7 million
and
$694.2 million
. This estimate of fair value is Level 2 as it was determined by quotations obtained from a broker-dealer who makes a market in these and similar securities.
Asset Based (ABL) Credit Facility
On September 30, 2016, the Partnership entered into a senior secured asset based revolving credit facility (the "ABL Credit Facility") with a group of lenders and UBS AG, Stamford Branch, as administrative agent and collateral agent. The ABL Credit Facility has an aggregate principal amount of availability of up to
$50.0 million
with an incremental facility, which permits an increase in borrowings of up to
$25.0 million
in the aggregate subject to additional lender commitments and certain other conditions. The proceeds of the loans may be used for capital expenditures and working capital and general corporate purposes of the Partnership and its subsidiaries. The ABL Credit Facility provides for loans and standby letters of credit in an amount up to the aggregate availability under the facility, subject to meeting certain borrowing base conditions, with sub-limits of the lesser of
10%
of the total facility commitment and
$5.0 million
for swingline loans and
$10.0 million
for letters of credit. The ABL Credit Facility is scheduled to mature on September 30, 2021.
At the option of the borrowers, loans under the ABL Credit Facility initially bear interest at an annual rate equal to (i)
2.00%
plus LIBOR or (ii)
1.00%
plus a base rate, subject to a
0.50%
step-down based on the previous quarter’s excess availability. The borrowers must also pay a commitment fee on the unutilized commitments and also pay customary letter of credit fees.
The ABL Credit Facility also contains customary covenants for a financing of this type that limit the ability of the Partnership and its subsidiaries to, among other things, incur liens, engage in a consolidation, merger, purchase or sale of assets, pay dividends, incur indebtedness, make advances, investments and loans, enter into affiliate transactions, issue equity interests or create subsidiaries and unrestricted subsidiaries. The ABL Credit Facility also contains a fixed charge coverage ratio financial covenant, as defined therein. The Partnership was in compliance with the covenants of the ABL Credit Facility as of
March 31, 2018
.
As of
March 31, 2018
, the Partnership and its subsidiaries had availability under the ABL Credit Facility of
$49.2 million
. There were
no
borrowings outstanding under the ABL Credit Facility as of
March 31, 2018
.
(12) Commitments and Contingencies
Leases and Unconditional Purchase Obligations
The minimum required payments for the Partnership’s operating leases and unconditional purchase obligations are as follows:
|
|
|
|
|
|
|
|
|
|
Operating
Leases
|
|
Unconditional
Purchase
Obligations
|
|
|
|
|
|
(in thousands)
|
Nine months ending December 31, 2018
|
$
|
3,569
|
|
|
$
|
20,230
|
|
Year Ending December 31,
|
|
|
|
2019
|
4,164
|
|
|
15,752
|
|
2020
|
3,625
|
|
|
8,127
|
|
2021
|
3,442
|
|
|
6,482
|
|
2022
|
3,141
|
|
|
6,676
|
|
Thereafter
|
1,780
|
|
|
45,424
|
|
|
$
|
19,721
|
|
|
$
|
102,691
|
|
CRNF leases railcars and facilities under long-term operating leases. Lease expense included in cost of materials and other for the three months ended
March 31, 2018
and
2017
totaled approximately
$1.2 million
and
$1.3 million
, respectively. The lease agreements have various remaining terms. Some agreements are renewable, at CRNF’s option, for additional periods. It is
CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2018
(unaudited)
expected, in the ordinary course of business, that leases may be renewed or replaced as they expire. The Partnership leases some of its railcars from a related party, which is included in the operating lease commitments shown above. See
Note 13 ("Related Party Transactions")
for further discussion.
CRNF’s purchase obligation for pet coke from a subsidiary of CVR Refining has been derived from a calculation of the average pet coke price paid to such subsidiary over the preceding
two
-year period. See
Note 13 ("Related Party Transactions")
for further discussion of the coke supply agreement.
CRNF is party to a hydrogen purchase and sale agreement with a subsidiary of CVR Refining, pursuant to which CRNF agrees to pay a monthly fixed fee. See
Note 13 ("Related Party Transactions")
for further discussion of the hydrogen purchase and sale agreement.
CRNF is party to the Amended and Restated On-Site Product Supply Agreement with The BOC Group, Inc. (as predecessor in interest to Linde LLC). Pursuant to the agreement, which expires in 2020, CRNF is required to take as available and pay for the supply of oxygen and nitrogen to the fertilizer operation. Expenses associated with this agreement are included in direct operating expenses (exclusive of depreciation and amortization), and, for the three months ended
March 31, 2018
and
2017
, totaled approximately
$0.9 million
and
$1.1 million
, respectively.
CRNF is a party to a pet coke supply agreement with HollyFrontier Corporation. The term of this agreement ends in December
2018
. The delivered cost of this pet coke is included in cost of materials and other and totaled approximately
$1.5 million
and
$0.9 million
, respectively, for the three months ended
March 31, 2018
and
2017
.
EDNF is a party to a utility service agreement with Jo-Carroll Energy, Inc. The term of this agreement ends in 2019 and includes certain charges on a take-or-pay basis. The cost of utilities is included in direct operating expenses (exclusive of depreciation and amortization) and amounts associated with this agreement totaled approximately
$2.4 million
and
$2.5 million
for the three months ended
March 31, 2018
and
2017
, respectively.
Commitments for natural gas purchases consist of the following:
|
|
|
|
|
|
March 31, 2018
|
|
|
|
(in thousands, except weighted average rate)
|
MMBtus under fixed-price contracts
|
600
|
|
MMBtus under index-price contracts (1)
|
440
|
|
Total MMBtus under contracts
|
1,040
|
|
Commitments to purchase natural gas
|
$
|
2,428
|
|
Weighted average rate per MMBtu (2)
|
$
|
2.33
|
|
________________________________
|
|
(1)
|
Indexed rates were estimated using the monthly index rate of the applicable index.
|
|
|
(2)
|
Weighted average rate per MMBtu is based on the fixed rates and the indexes applicable to each contract, exclusive of transportation costs.
|
Litigation
From time to time, the Partnership is involved in various lawsuits arising in the normal course of business, including environmental, health and safety ("EHS") matters described below under "Environmental, Health and Safety Matters." Liabilities, if any, related to such litigation are recognized when the related costs are probable and can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. It is possible that management’s estimates of the outcomes will change within the next year due to uncertainties inherent in litigation and settlement negotiations. There were no new proceedings or material developments in proceedings from those provided in the
2017
Form 10-K. In the opinion of management,
CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2018
(unaudited)
the ultimate resolution of any other litigation matters is not expected to have a material adverse effect on the accompanying condensed consolidated financial statements. There can be no assurance that management’s beliefs or opinions with respect to liability for potential litigation matters are accurate.
Environmental, Health and Safety Matters
The Partnership's subsidiaries are subject to various stringent federal, state and local EHS rules and regulations. Liabilities related to EHS matters are recognized when the related costs are probable and can be reasonably estimated. Estimates of these costs are based upon currently available facts, existing technology, site-specific costs and currently enacted laws and regulations. In reporting EHS liabilities, no offset is made for potential recoveries. All liabilities are monitored and adjusted regularly as new facts emerge or changes in laws or technology occur.
There have been no new developments or material changes to the environmental accruals or expected capital expenditures related to compliance with environmental matters from those provided in the
2017
Form 10-K. The Partnership believes its subsidiaries are in material compliance with existing EHS rules and regulations. There can be no assurance that the EHS matters which may develop in the future will not have a material adverse effect on the Partnership's business, financial condition or results of operations.
CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2018
(unaudited)
(13) Related Party Transactions
Related Party Agreements
CVR Partners and its subsidiaries are party to, or otherwise subject to certain agreements with CVR Energy and its subsidiaries (including CVR Refining and its subsidiary Coffeyville Resources Refining & Marketing, LLC ("CRRM")) that govern the business relations among each party including: the (i) Feedstock and Shared Services Agreement; (ii) Hydrogen Purchase and Sale Agreement; (iii) Coke Supply Agreement; (iv) Environmental Agreement; (v) Services Agreement; (vi) GP Services Agreement; and (vii) Limited Partnership Agreement. The agreements are described as in effect at
March 31, 2018
. There have been no new developments or material changes to these agreements from those provided in the 2017 Form 10-K.
Amounts owed to CVR Partners and its subsidiaries from CVR Energy and its subsidiaries with respect to these agreements are included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. Conversely, amounts owed to CVR Energy and its subsidiaries by CVR Partners and its subsidiaries with respect to these agreements are included in accounts payable, personnel accruals and accrued expenses and other current liabilities on the Partnership's Condensed Consolidated Balance Sheets.
Feedstock and Shared Services Agreement
CRNF is party to a feedstock and shared services agreement with CRRM under which the
two
parties provide feedstock and other services to one another. These feedstocks and services are utilized in the respective production processes of CRRM's Coffeyville, Kansas refinery and CRNF's Coffeyville Facility.
Hydrogen sales to CRRM are governed pursuant to the feedstock and shared services agreement. For the
three
months ended March 31,
2017
, the gross sales generated from the sale of hydrogen to CRRM pursuant to the feedstock and shared services agreement were approximately
$0.1 million
, which is included in net sales in the Condensed Consolidated Statements of Operations. For the
three
months ended
March 31, 2018
, the gross sales generated from the sale of hydrogen to CRRM pursuant to the feedstock and shared services agreement were nominal. The monthly hydrogen sales are cash settled net on a monthly basis with hydrogen purchases, pursuant to the hydrogen purchase and sale agreement.
At both
March 31, 2018
and
December 31, 2017
, receivables of
$0.2 million
were included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets for amounts yet to be received related to components of the feedstock and shared services agreement. At
March 31, 2018
and
December 31, 2017
, current obligations of approximately
$0.8 million
and
$1.0 million
, respectively, were included in accounts payable on the Condensed Consolidated Balance Sheets associated with unpaid balances related to components of the feedstock and shared services agreement.
Hydrogen Purchase and Sale Agreement
CRNF and CRRM are party to a hydrogen purchase and sale agreement, pursuant to which CRRM agrees to sell and deliver a committed hydrogen volume of
90,000
mscf per month, and CRNF agrees to purchase and receive the committed volume. For the three months ended
March 31, 2018
and
2017
, the cost of hydrogen purchases from CRRM was approximately
$1.3 million
and
$1.2 million
, respectively, which were included in cost of materials and other in the Condensed Consolidated Statement of Operations. The monthly hydrogen purchases are cash settled net on a monthly basis with hydrogen sales pursuant to the feedstock and shared services agreement. At
March 31, 2018
and
December 31, 2017
, current obligations, net of any amounts due to CRNF under the feedstock and shared services agreement for hydrogen, of approximately
$0.5 million
and
$0.3 million
, respectively, were included in accounts payable on the Condensed Consolidated Balance Sheets associated with net hydrogen purchases from CRRM.
CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2018
(unaudited)
Coke Supply Agreement
CRNF is party to a coke supply agreement with CRRM pursuant to which CRRM supplies CRNF with pet coke. The cost of pet coke associated with the transfer of pet coke from CRRM to CRNF was approximately
$0.4 million
and
$0.5 million
for the three months ended
March 31, 2018
and
2017
, respectively, which was recorded in cost of materials and other. Payables of approximately
$0.1 million
related to the coke supply agreement were included in accounts payable on the Condensed Consolidated Balance Sheets at
December 31, 2017
. Payables were nominal related to the coke supply agreement included in accounts payable on the Condensed Consolidated Balance Sheets at
March 31, 2018
.
Services Agreement
CVR Partners obtains certain management and other services from CVR Energy pursuant to a services agreement between the Partnership, CVR GP and CVR Energy.
Net amounts incurred under the services agreement for the
three
months ended
March 31, 2018
and
2017
were as follows:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2018
|
|
2017
|
|
|
|
|
|
(in thousands)
|
Direct operating expenses (exclusive of depreciation and amortization) — Affiliates
|
$
|
616
|
|
|
$
|
610
|
|
Selling, general and administrative expenses — Affiliates
|
2,863
|
|
|
3,152
|
|
Total
|
$
|
3,479
|
|
|
$
|
3,762
|
|
For services performed in connection with the services agreement, the Partnership recognized personnel costs, excluding amounts related to share-based compensation that are disclosed in
Note 5 ("Share‑Based Compensation")
, of
$1.3 million
and
$1.7 million
, respectively, for the three months ended
March 31, 2018
and
2017
. At
March 31, 2018
and
December 31, 2017
, current obligations of
$1.9 million
and
$4.0 million
, respectively, were included in accounts payable and accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets with respect to amounts billed in accordance with the services agreement.
Limited Partnership Agreement
The partnership agreement provides that the Partnership will reimburse its general partner for all direct and indirect expenses it incurs or payments it makes on behalf of the Partnership (including salary, bonus, incentive compensation and other amounts paid to any person to perform services for the Partnership or for its general partner in connection with operating the Partnership). Pursuant to the partnership agreement, the Partnership incurred approximately
$0.7 million
and
$0.9 million
for the three months ended
March 31, 2018
and
2017
, respectively, primarily for personnel costs related to the compensation of executives of the general partner, who manage the Partnership's business. At
March 31, 2018
and
December 31, 2017
, current obligations of
$1.0 million
and
$1.5 million
, respectively, were included in personnel accruals on the Condensed Consolidated Balance Sheets related to amounts outstanding in accordance with the limited partnership agreement.
Insight Portfolio Group
Insight Portfolio Group LLC ("Insight Portfolio Group") is an entity formed by Mr. Carl C. Icahn in order to maximize the potential buying power of a group of entities with which Mr. Icahn has a relationship in negotiating with a wide range of suppliers of goods, services and tangible and intangible property at negotiated rates. In January 2013, CVR Energy acquired a minority equity interest in Insight Portfolio Group. The Partnership participates in Insight Portfolio Group’s buying group through its relationship with CVR Energy. The Partnership may purchase a variety of goods and services as members of the buying group at prices and on terms that management believes would be more favorable than those which would be achieved on a stand-alone basis. Transactions with Insight Portfolio Group for each of the reporting periods were nominal.
CVR PARTNERS, LP AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2018
(unaudited)
Railcar Lease Agreements and Maintenance
CRNF has agreements that expire in
2023
to lease a total of
115
UAN railcars from ARI Leasing, LLC ("ARI"), a company controlled by IEP. In the second quarter of 2017, CRNF entered into an agreement to lease an additional
70
UAN railcars from ARI which will expire in
2022
. The Partnership received the additional
70
leased railcars during the second half of 2017. For the
three
months ended
March 31, 2018
and
2017
, rent expense of approximately
$0.4 million
and
$0.2 million
, respectively, was recorded in cost of materials and other in the Condensed Consolidated Statement of Operations related to these agreements.
American Railcar Industries, Inc., a company controlled by IEP, performed railcar maintenance for CRNF and the expense associated with this maintenance was approximately
$0.2 million
for the
three
months ended March 31,
2017
and was included in cost of materials and other in the Condensed Consolidated Statement of Operations. Expense associated with this maintenance was nominal for the
three
months ended
March 31, 2018
.